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Previous: PAINEWEBBER CASHFUND INC, 24F-2NT, 1998-06-26 |
Next: VANGUARD MUNICIPAL BOND FUND INC, NSAR-A, 1998-06-26 |
<PAGE> 1
VANGUARD
MUNICIPAL BOND
FUND
Semiannual Report
April 30, 1998
[PHOTO]
[THE VANGUARD GROUP LOGO]
<PAGE> 2
OUR CREW MAKES THE DIFFERENCE
Throughout our history, The Vanguard Group has received considerable attention
as the low-cost provider of mutual funds. While such accolades are gratifying,
we are most proud, not of our low operating expenses or the billions of dollars
we manage, but of our sterling reputation created by the Vanguard crew.
We recognize that it is our crew members--more than 7,000 highly motivated
men and women--who form the cornerstone of our operations. We could not survive
long--let alone prosper--without them. That's why we chose this fiscal year's
fund reports to celebrate the spirit, enthusiasm, and achievements of our crew.
(We call those who work at Vanguard crew members, not employees, because they
operate as a team to accomplish our mission of serving you, our clients.)
But while we prize the collective contributions of our crew, we also take
time to recognize the importance of the individual. Each calendar quarter, we
present our Award For Excellence to a handful of crew members who have
demonstrated particular excellence in the performance of their jobs and who
embody "The Vanguard Spirit." Our report cover shows only a few of the more than
300 crew members who have received this distinction since 1984.
They, along with the rest of our valiant crew, look forward to serving you
in the years ahead.
[PHOTO] [PHOTO]
John C. Bogle John J. Brennan
Senior Chairman Chairman & CEO
CONTENTS
A MESSAGE TO OUR SHAREHOLDERS ................ 1
THE MARKETS IN PERSPECTIVE ................... 4
REPORT FROM THE ADVISER ...................... 6
PERFORMANCE SUMMARIES ........................ 8
PORTFOLIO PROFILES ........................... 12
FINANCIAL STATEMENTS ......................... 20
All comparative mutual fund data are from Lipper Analytical Services, Inc., or
Morningstar unless otherwise noted.
<PAGE> 3
FELLOW SHAREHOLDER,
Favorable economic conditions led to positive total returns for each
Portfolio of Vanguard Municipal Bond Fund during the first half of its fiscal
year. Interest rates held steady and yields ended the half-year on April 30
almost exactly where they started. Thus, your returns during this period came
almost entirely from interest income, rather than from the small price
fluctuations.
Total returns ranged from +1.7% for our Money Market Portfolio to +3.0%
for our High-Yield Portfolio. These are healthy returns for municipal bond
funds. Not only is 100% of the income return exempt from federal income taxes,
but inflation kept an extraordinarily low profile during this period. What price
changes there were slightly dampened total returns for the Short-Term,
Limited-Term, Intermediate-Term, and Insured Long-Term Portfolios and enhanced
returns a bit for the Long-Term and High-Yield Portfolios. The table at right
shows the six-month total return (capital change plus reinvested dividends) for
each Portfolio, as well as its capital and income components and current yield
as of April 30.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
COMPONENTS OF TOTAL RETURNS
SIX MONTHS ENDED APRIL 30, 1998
-----------------------------------------
TOTAL INCOME CAPITAL CURRENT
PORTFOLIO RETURN RETURN RETURN YIELD*
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market** +1.7% +1.7% 0.0% 3.94%
Short-Term +1.8 +2.0 -0.2 3.73
Limited-Term +1.8 +2.2 -0.4 3.98
Intermediate-Term +2.1 +2.5 -0.4 4.34
Insured Long-Term +2.5 +2.7 -0.2 4.69
Long-Term +2.7 +2.6 +0.1 4.75
High-Yield +3.0 +2.7 +0.3 4.80
- ------------------------------------------------------------------
</TABLE>
*SEC 7-day annualized yield for Money Market Portfolio; SEC 30-day annualized
yield for other Portfolios.
**An investment in a money market fund is neither insured nor guaranteed by the
U.S. government, and there is no assurance that the fund will be able to
maintain a stable net asset value of $1 per share.
Per-share figures for each Portfolio, including net asset values, income
dividends, and any distributions from net realized capital gains, are presented
in the table following this letter. The average credit quality of each is
reported in the Portfolio Profiles beginning on page 12.
THE PERIOD IN REVIEW
The U.S. economy's performance during the six months ended April 30 was, quite
simply, astounding. After growing by nearly 4% in 1997, the economy expanded at
a 4.8% annual pace in the January-March period, even though a stronger U.S.
dollar and economic turmoil in Asia began to crimp U.S. exports and to boost
sales of imported goods. The nation's unemployment rate fell to 4.3% in April,
its lowest level in more than 28 years. Yet a strong job market and robust
economic growth did not push up prices; key inflation measures actually showed a
slowing in price increases. Consumer prices rose only 0.6% for the half-year.
Financial markets flourished in this ideal environment. The Standard &
Poor's 500 Composite Stock Price Index rose during each month of the period, and
its six-month total return of +22.5% was equal to approximately two years' worth
of returns at the stock market's long-term annual average of about +11%.
Interest rates on Treasury securities declined by roughly 20 basis points (0.20
percentage point) on balance during the six months, engendering modest price
increases. The Lehman Brothers Aggregate Bond Index, a good measure of the
overall taxable bond market, returned +3.6%. The yield on 3-month
1
<PAGE> 4
U.S. Treasury bills was 4.97% on April 30, nearly one-quarter percentage point
below the 5.20% level at which it began the half-year.
The yield on high-grade, long-term tax-exempt bonds rose from 5.40% on
October 31, 1997, to 5.45% on November 4, then drifted down to 5.10% by
mid-January before rising to 5.39% by April 30. Yields on high-quality,
short-term municipal securities ended the period at 3.70%, down from 3.75% at
the beginning. At 5.39%, the yield on 20-year tax-exempt bonds as of April 30
was equal to an unusually high 90% of the concurrent yield on 20-year (taxable)
U.S. Treasury bonds. For investors in the maximum marginal tax bracket of 39.6%,
a 5.39% tax-exempt yield is equivalent to a yield of 8.92% on taxable bonds, far
above the 5.0% return on long-term U.S. Treasury bonds. For high-bracket
investors in short-term municipals, the tax-exempt yield of 3.70% is equivalent
to a yield of 6.13% on Treasury bills.
Five of our seven Portfolios provided a higher total return for the six
months than the average fund holding tax-exempt securities of similar quality
and maturity. A sixth, our Short-Term Portfolio, matched its peers. Our
High-Yield Portfolio fell short of the average high-yield fund by 0.3 percentage
point, reflecting in part its emphasis on the higher-quality segment of the
below-investment-grade category.
Our low expenses greatly assisted our managers in retaining these margins
of superiority over competing funds. Cost matters, especially for bond funds,
where the universe of securities with a particular quality rating or maturity is
relatively homogeneous. The costs of operating funds account for a large portion
of the difference in their relative performance. The annualized expense ratios
of Vanguard Municipal Bond Fund's Portfolios during the past six months amounted
to about 0.20%. Average expense ratios of competing funds range from 0.68% for
money market funds to 1.18% for long-term and high-yield funds. As a result, we
can pass along to our shareholders a far larger share of the interest income we
receive.
IN SUMMARY
Though returns on bonds may have seemed meager compared to the historic gains on
stock investments in recent years, they have actually been quite attractive by
historical standards, thanks to the prevailing low inflation rates.
Municipal bond funds not only provide current income that is exempt from
taxes, but they can help to diversify a portfolio. While bond fund prices do
fluctuate, their ups and downs are not necessarily in sync with the movements of
stock funds, so they can help to smooth out the fluctuations of a balanced
portfolio that also contains stock funds and money market funds.
We believe that such balanced portfolios--in proportions suitable to each
person's financial situation, investment goals, and tolerance of risk--can help
investors to "stay the course" toward their investment objectives, whether the
financial markets provide smooth or stormy sailing.
/s/ JOHN C. BOGLE /s/ JOHN J. BRENNAN
John C. Bogle John J. Brennan
Senior Chairman Chairman and
Chief Executive Officer
May 18, 1998
2
<PAGE> 5
<TABLE>
<CAPTION>
PORTFOLIO STATISTICS
- -------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE SIX MONTHS
-------------------------- -----------------------
OCTOBER 31, APRIL 30, INCOME CAPITAL CURRENT
PORTFOLIO 1997 1998 DIVIDENDS GAINS YIELD*
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market $ 1.00 $ 1.00 $0.017 -- 3.94%
Short-Term 15.58 15.55 0.305 $0.006 3.73
Limited-Term 10.74 10.70 0.228 -- 3.98
Intermediate-Term 13.35 13.25 0.329 0.052 4.34
Insured Long-Term 12.51 12.41 0.328 0.081 4.69
Long-Term 11.18 11.13 0.289 0.058 4.75
High-Yield 10.83 10.81 0.289 0.052 4.80
- -------------------------------------------------------------------------------------------
</TABLE>
*SEC 7-day annualized yield for Money Market Portfolio; SEC 30-day annualized
yield for other Portfolios.
3
<PAGE> 6
THE MARKETS IN PERSPECTIVE
Six Months Ended April 30, 1998
Financial markets, it is said, don't like surprises. But when the surprises are
positive--remarkably strong economic growth coupled with conspicuously tame
inflation--the markets seem to cope quite nicely. So it was during the half-year
ended April 30, when the good times kept rolling for U.S. stock and bond
markets. The stock market produced half-year returns that would have been
excellent even for a full year. The bond market, helped by lower interest rates,
generated solid returns.
Plentiful jobs--the nation's unemployment rate fell in April to a 28-year
low of 4.3%--and rising wages clearly put American households in a buying mood.
(The stock market's big gains, by pumping up millions of families' investment
accounts, certainly didn't dampen spirits either.) With strong spending by
consumers leading the way, the U.S. economy grew at an annual rate of about 4%,
even after adjusting for inflation.
Although most economists believe that sustained growth in excess of 3% is
bound to be inflationary, evidence to support the theory has been scarce of
late. Consumer prices rose just 0.6% during the six months, and the Consumer
Price Index was up a relatively benign 1.4% for the 12 months ended April 30,
1998. Wholesale prices declined 1.2% during the past year. Stiff competitive
pressure, including an increasing flow of imported products and materials,
appears to be keeping the lid on prices, despite the bubbling economy.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
TOTAL RETURNS
PERIODS ENDED APRIL 30, 1998
--------------------------------
6 MONTHS 1 YEAR 5 YEARS*
- ------------------------------------------------------------------------
<S> <C> <C> <C>
EQUITY
S&P 500 Index 22.5% 41.1% 23.2%
Russell 2000 Index 11.9 42.4 18.5
MSCI EAFE Index 15.6 19.2 10.4
- ------------------------------------------------------------------------
FIXED INCOME
Lehman Aggregate Bond Index 3.6% 10.9% 6.9%
Lehman 10-Year Municipal Bond Index 2.5 9.0 6.6
Salomon Brothers Three-Month
U.S. Treasury Bill Index 2.6 5.3 4.9
- ------------------------------------------------------------------------
OTHER
Consumer Price Index 0.6% 1.4% 2.4%
- ------------------------------------------------------------------------
</TABLE>
*Annualized.
Economic troubles in Asia--where currency and banking crises are
afflicting several nations--have resulted in lower prices for many imported
goods and are being blamed by some U.S. companies for cutting into profits. But
Asia's problems haven't spooked U.S. consumers and investors, and have only
slightly slowed the domestic economy's powerful momentum.
U.S. EQUITY MARKETS
Wall Street sprinted to record heights during the half-year. The gains were
broad-based, although the big blue chip stocks again led the way.
Large-capitalization stocks, as represented by the S&P 500 Index, returned
22.5%, nearly double the 11.9% return on the small-cap Russell 2000 Index.
Lower interest rates supported stock prices by making interest-bearing
investments relatively less attractive to investors looking for a place to put
new cash. The good inflation news helped, too. Even so, the size of the market's
gains was surprising in light of an evident slowing in the growth rate for
corporate profits. Since November, analysts have been reducing their estimates
of future corporate earnings, and actual profits reported
4
<PAGE> 7
for the January-March quarter were only modestly above those of first-quarter
1997. If corporate earnings growth does not accelerate, stocks may lose some of
their allure.
Health-care stocks were the market's best-performing sector during the
period, as a number of hot-selling new drugs and exciting potential therapies
heightened interest in pharmaceutical companies. Also, some health-maintenance
organization stocks rebounded from depressed levels. The only sectors that
didn't post double-digit gains during the half-year were integrated oil
companies (up 9.5%) and the "other energy" group, which includes oil-services
and exploration firms (down 3.5%). Lower energy prices--a key factor in
inflation's good behavior--explained the weakness in energy stocks.
U.S. FIXED-INCOME MARKETS
Fixed-income investors earned the coupon rates on their bonds during the
half-year, and saw a modest rise in the prices of their holdings, thanks to
declining interest rates. The Lehman Aggregate Bond Index, a good measure of the
overall market for taxable bonds, provided a 3.6% return for the six months,
bringing its total return over the past 12 months to 10.9%, a superb
inflation-adjusted return of 9.5%. The yield on the benchmark 30-year U.S.
Treasury bond decreased from 6.15% on October 31, 1997, to 5.95% on April 30. A
rate decline of 20 basis points in the face of such strong economic growth was
possible because inflation--the enemy of the fixed-income investor--was so weak
during the six months.
Short-term interest rates also declined, although the Federal Reserve
Board made no policy changes. The yield on 3-month U.S. Treasury bills fell from
5.20% on October 31 to 4.97% on April 30, at least partly because it became
clear that the federal government would run a sizable budget surplus, which will
reduce the Treasury's need to borrow and, therefore, reduce the supply of new
Treasury securities.
INTERNATIONAL EQUITY MARKETS
Europe's stock markets were even hotter than Wall Street during the first half
of fiscal 1998, while most Asian markets declined in U.S. dollar terms. Overall,
the Morgan Stanley Capital International Europe, Australasia, Far East Index
gained 15.6% in U.S. dollar terms. The Index returned 21.3% in local currency
terms, but a generally stronger U.S. dollar cut the result for U.S. investors.
European markets were buoyed by a variety of factors and rose 33.6% in
local-currency terms. The dollar's gains against European currencies diminished
the return for U.S. investors only slightly to a still-exceptional 29.2%. The
markets benefited from signs that the economic slump on the continent is ending,
from evidence that corporate managements are adopting a U.S.-style emphasis on
adding shareholder value, and from increasing confidence that the planned
adoption of the euro--a single European currency--would begin as planned in
January 1999.
The Pacific region's experience was very different. Although some emerging
markets (Malaysia, Thailand, South Korea) rebounded from their lows, stock
returns for the region on balance fell 8.8% in U.S.-dollar terms. Japan, by far
the Pacific Rim's largest market, was beset by economic recession and dropped
10.0%, while Hong Kong fell 9.6%. Investors in Tokyo were decidedly unimpressed
with the Japanese government's program for reviving the economy and dealing with
the problems of the nation's banking system.
Emerging markets, as a group, returned 5.6% in dollar terms. Gains in
Greece (50.0%), Hungary (30.1%), Brazil (16.6%), and Argentina (13.7%) more than
offset weakness in Asian emerging markets, most notably Indonesia (down a
stunning 61.4%).
5
<PAGE> 8
REPORT FROM THE ADVISER
The fiscal half-year ended April 30, 1998, was a period that displayed
little "point to point" volatility in interest rates. This relative stability is
apparent in the following table, which shows representative yields to maturity
of AA-rated generic general obligation bonds at the beginning and end of the six
months. However, the apparent tranquility overlay an energetic tug-of-war
between the slowing effects on international trade of massive Asian currency
devaluations and the robust strength of the U.S. economy. Played out with daily
media coverage, the tug-of-war has produced no clear victor to date.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
YIELDS ON GENERIC AA GENERAL OBLIGATION BONDS
- -----------------------------------------------------------
AS OF AS OF
MATURITY (YEARS) OCTOBER 31, 1997 APRIL 30, 1998
- -----------------------------------------------------------
<S> <C> <C>
1 3.95% 4.10%
5 4.45 4.60
10 4.90 4.90
20 5.50 5.45
30 5.60 5.55
40 5.65 5.60
- -----------------------------------------------------------
</TABLE>
While events in Pacific Rim countries and the domestic economic situation
may seem to have little relevance to the sleepy, even "quirky," municipal bond
market, they are indeed closely linked through the functioning of modern capital
markets. Municipal bond yields and prices are tied to the U.S. Treasury bond
market, the bellwether for all dollar-denominated bonds. The Treasury bond
market, in turn, is intimately linked to Federal Reserve monetary policy and to
the international supply of and demand for capital. The Fed's monetary policy
currently is based on policymakers' expectations regarding the inflationary
effects of a robust domestic economy and the currency turmoil abroad. Thus do
the bond prices of the Lower Merion (Pa.) School District, to name one example
in thousands, bob gently up and down with indirect reactions to the latest news
from Jakarta or the U.S. Department of Commerce.
The per-share net asset values of your Fund's seven Portfolios fluctuate
in close harmony with the price activity of each Portfolio's constituent
securities. Because each Portfolio differs from the others in the maturities
(and price volatility) of its constituent bonds, each represents a separate,
distinct, and well-defined "basket" of risk and return. All in all, over the
last six months the seven Portfolios performed exactly as one would expect for a
period with negligible movement in interest rates. They earned six months' worth
of tax-exempt interest income, offset or augmented to a slight degree by small
changes in net asset value. The Message to Shareholders, beginning on page 1,
presents the income and capital returns for each Portfolio.
QUALITY: GOOD AND BAD NEWS
Your Portfolios, in general, hold bonds of higher average quality than their
non-Vanguard peers. As such, we expect them to have lower default risk.
Furthermore, the
6
<PAGE> 9
individual bond holdings should be less likely to suffer downgrades in credit
ratings by the national bond-rating services.
We believe this extra quality in the Portfolios is a virtue appreciated by
our owners, the shareholders. Metaphorically speaking, they sleep more soundly
knowing their credit risks are low. However, better quality almost invariably
comes at a cost, although the magnitude of the cost, in terms of the potential
incremental return forgone, varies over the course of an economic cycle. We have
witnessed in the last several years a dramatic change in the "costs" incurred by
the Portfolios to own higher-quality securities.
Understanding the return implications of these historic changes requires
thinking about quality in two dimensions: interest income and differential price
behavior. A simple hypothetical example illustrates these two dimensions. Take
the case of a top-quality and a medium-quality bond. Last year, Bond A, a
30-year, Aaa-rated obligation, yielded 5.60% to maturity. Bond B, a riskier
Baa-rated obligation, yielded 6.25% to maturity. In today's market, Bond A and B
yield, respectively, 5.20% and 5.55%. Their performances over the year,
expressed as total return, will be a combination of their initial yield and the
percentage change in each bond's price. The sum of the two components of our
hypothetical bonds is shown above.
<TABLE>
<CAPTION>
- --------------------------------------------------------
BOND A BOND B
- --------------------------------------------------------
<S> <C> <C>
Interest 5.60% 6.25%
Principal Change 3.32 5.71
- --------------------------------------------------------
Total Return 8.92% 11.96%
- --------------------------------------------------------
</TABLE>
It is noteworthy that because the differential between the yield on the
riskier bond and the yield on the safer bond shrank (from 0.65% to 0.35%) over
the year, the riskier bond's price increased appreciably more than its
counterpart. This phenomenon is called "quality-spread compression." What was
illustrated hypothetically for Bonds A and B occurred in reality in the
municipal bond market. Quality-spread compression benefited most competing funds
in comparison with us (although appreciably less so than in our theoretical
example) over the last 18 months. That's the bad news. The good news is that
despite the headwinds we endured because of quality-spread compression, the
Portfolios still acquitted themselves well against competitors, thanks to
conscientious and opportunistic value-management strategies and to an enduring
expense-ratio advantage that dwarfs the income we surrender by holding safer
bonds.
We take comfort in knowing that quality spreads do not perpetually move
closer. There are limits to how narrow quality-yield differentials can become,
and we are likely to be at or near those limits today. When spread compression
transforms into expansion, the result will be a tailwind that should help our
performance relative to competitors'. When that occurs (as it inevitably will),
our better quality becomes a good news-good news story.
Ian A. MacKinnon, Managing Director
Christopher M. Ryon, Principal
Pamela Wisehaupt Tynan, Principal
Reid O. Smith, Principal
Vanguard Fixed Income Group
May 12, 1998
INVESTMENT PHILOSOPHY
Each Portfolio holds a diversified group of municipal bonds designed to produce
a high level of current, tax-exempt income consistent with each Portfolio's
maturity and quality mandates. In managing the Fund, Vanguard Fixed Income Group
follows a disciplined investment policy, meeting well-defined standards for
credit quality and keeping each Portfolio within its stated maturity range,
while seeking to exceed, with reasonable consistency over the long term, average
returns achieved by comparable funds.
7
<PAGE> 10
PERFORMANCE SUMMARIES
All of the data on this page represent past performance, which cannot be used to
predict future returns that may be achieved by the Portfolios. Note that annual
returns can fluctuate widely. An investment in a money market fund is neither
insured nor guaranteed by the U.S. government, and there is no assurance that
the fund will be able to maintain a stable value of $1 per share.
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
TOTAL INVESTMENT RETURNS: JUNE 10, 1980-APRIL 30, 1998
- ---------------------------------------------------------------
MONEY MARKET PORTFOLIO AVERAGE
FUND*
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
1980 0.0% 1.3% 1.3% 0.1%
1981 0.0 6.4 6.4 6.2
1982 0.0 7.4 7.4 7.8
1983 0.0 5.1 5.1 4.8
1984 0.0 5.8 5.8 5.4
1985 0.0 5.4 5.4 5.0
1986 0.0 4.9 4.9 4.6
1987 0.0 4.4 4.4 3.9
1988 0.0 5.0 5.0 4.7
1989 0.0 6.3 6.3 5.9
1990 0.0 5.9 5.9 5.5
1991 0.0 4.8 4.8 4.5
1992 0.0 3.3 3.3 2.8
1993 0.0 2.5 2.5 2.0
1994 0.0 2.5 2.5 2.1
1995 0.0 3.7 3.7 3.3
1996 0.0 3.4 3.4 3.0
1997 0.0 3.5 3.5 3.0
1998** 0.0 1.7 1.7 1.5
- ---------------------------------------------------------------
</TABLE>
*Average Tax-Exempt Money Market Fund.
**Six months ended April 30, 1998.
See Financial Highlights table on page 29 for dividend information for the past
five years.
<TABLE>
<CAPTION>
SHORT-TERM PORTFOLIO
TOTAL INVESTMENT RETURNS: OCTOBER 31, 1977-APRIL 30, 1998
- -------------------------------------------------------------------
SHORT-TERM PORTFOLIO LEHMAN*
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
1978 -1.1% 3.5% 2.4% N/A
1979 -0.7 4.4 3.7 N/A
1980 0.9 5.3 6.2 N/A
1981 0.1 6.7 6.8 N/A
1982 2.4 8.3 10.7 N/A
1983 -0.5 6.1 5.6 N/A
1984 -0.1 6.5 6.4 N/A
1985 0.7 6.5 7.2 N/A
1986 1.6 6.1 7.7 11.0%
1987 -2.2 5.0 2.8 3.2
1988 1.6 5.4 7.0 5.9
1989 0.3 6.0 6.3 6.2
1990 0.4 6.1 6.5 7.0
1991 1.2 5.7 6.9 9.4
1992 0.8 4.5 5.3 7.8
1993 0.3 3.9 4.2 6.6
1994 -1.3 3.5 2.2 1.4
1995 1.2 4.1 5.3 8.0
1996 -0.1 4.0 3.9 4.5
1997 0.0 4.0 4.0 5.5
1998** -0.2 2.0 1.8 1.9
- -------------------------------------------------------------------
</TABLE>
*Lehman 3 Year Municipal Bond Index.
**Six months ended April 30, 1998.
See Financial Highlights table on page 30 for dividend and capital gains
information for the past five years.
AVERAGE ANNUAL TOTAL RETURNS: PERIODS ENDED MARCH 31, 1998*
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
10 YEARS
INCEPTION -------------------------
DATE 1 YEAR 5 YEARS CAPITAL INCOME TOTAL
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Portfolio 6/10/1980 3.53% 3.21% 0.00% 4.03% 4.03%
Short-Term Portfolio 9/1/1977 4.56 3.84 0.27 4.64 4.91
- ----------------------------------------------------------------------------------------------------
</TABLE>
*SEC rules require that we provide this average annual total return information
through the latest calendar quarter.
8
<PAGE> 11
All of the data on this page represent past performance, which cannot be used to
predict future returns that may be achieved by the Portfolios. Note, too, that
both share price and return can fluctuate widely, so an investment in the
Portfolios could lose money.
<TABLE>
<CAPTION>
LIMITED-TERM PORTFOLIO
TOTAL INVESTMENT RETURNS: AUGUST 31, 1987-APRIL 30, 1998
- -------------------------------------------------------------
LIMITED-TERM PORTFOLIO LEHMAN*
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
1987 -0.6% 1.0% 0.4% -0.2%
1988 2.2 6.3 8.5 5.9
1989 0.0 6.5 6.5 6.2
1990 0.7 6.5 7.2 7.0
1991 2.8 6.1 8.9 9.4
1992 1.7 5.3 7.0 7.8
1993 2.4 4.6 7.0 6.6
1994 -3.1 4.2 1.1 1.4
1995 2.5 4.7 7.2 8.0
1996 -0.2 4.6 4.4 4.5
1997 0.5 4.5 5.0 5.5
1998** -0.4 2.2 1.8 1.9
- -------------------------------------------------------------
</TABLE>
*Lehman 3 Year Municipal Bond Index.
**Six months ended April 30, 1998.
See Financial Highlights table on page 30 for dividend and capital gains
information for the past five years.
<TABLE>
<CAPTION>
INTERMEDIATE-TERM PORTFOLIO
TOTAL INVESTMENT RETURNS: OCTOBER 31, 1977-APRIL 30, 1998
- -------------------------------------------------------------
INTERMEDIATE-TERM PORTFOLIO LEHMAN*
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
1978 -5.6% 4.4% -1.2% N/A
1979 -9.5 4.8 -4.7 N/A
1980 -11.6 5.9 -5.7 N/A
1981 -18.4 7.4 -11.0 N/A
1982 15.4 11.3 26.7 N/A
1983 0.3 8.4 8.7 N/A
1984 -1.7 8.9 7.2 N/A
1985 7.2 9.4 16.6 N/A
1986 10.8 8.5 19.3 19.8%
1987 -7.9 6.6 -1.3 -0.4
1988 6.4 7.5 13.9 10.5
1989 0.3 7.2 7.5 6.3
1990 0.3 7.0 7.3 8.0
1991 5.6 7.0 12.6 11.2
1992 1.2 6.0 7.2 8.2
1993 8.4 5.9 14.3 12.0
1994 -6.5 5.0 -1.5 -1.9
1995 6.3 5.8 12.1 12.3
1996 -0.3 5.2 4.9 4.7
1997 1.3 5.3 6.6 7.4
1998** -0.4 2.5 2.1 2.2
- -------------------------------------------------------------
</TABLE>
*Lehman 7 Year Municipal Bond Index.
**Six months ended April 30, 1998.
See Financial Highlights table on page 31 for dividend and capital gains
information for the past five years.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS: PERIODS ENDED MARCH 31, 1998*
- -----------------------------------------------------------------------------------------------------
10 YEARS
INCEPTION -------------------------
DATE 1 YEAR 5 YEARS CAPITAL INCOME TOTAL
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Limited-Term Portfolio 8/31/1987 6.02% 4.62% 0.71% 5.25% 5.96%
Intermediate-Term Portfolio 9/1/1977 8.10 6.18 1.86 6.08 7.94
- -----------------------------------------------------------------------------------------------------
</TABLE>
*SEC rules require that we provide this average annual total return information
through the latest calendar quarter.
9
<PAGE> 12
PERFORMANCE SUMMARIES (continued)
All of the data on this page represent past performance, which cannot be used to
predict future returns that may be achieved by the Portfolios. Note, too, that
both share price and return can fluctuate widely, so an investment in the
Portfolios could lose money.
<TABLE>
<CAPTION>
INSURED LONG-TERM PORTFOLIO
TOTAL INVESTMENT RETURNS: SEPTEMBER 30, 1984-APRIL 30, 1998
- ------------------------------------------------------------
INSURED LONG-TERM PORTFOLIO LEHMAN*
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
1984 -1.6% 0.8% -0.8% 1.3%
1985 6.7 9.7 16.4 18.7
1986 14.3 9.2 23.5 22.6
1987 -9.2 6.9 -2.3 -0.8
1988 7.9 8.2 16.1 14.6
1989 1.3 7.5 8.8 8.1
1990 -0.8 7.2 6.4 7.4
1991 6.0 7.2 13.2 12.2
1992 0.2 6.5 6.7 8.4
1993 10.7 6.4 17.1 14.1
1994 -10.8 5.2 -5.6 -4.3
1995 9.5 6.4 15.9 14.8
1996 0.7 5.6 6.3 5.7
1997 1.9 5.7 7.6 8.5
1998** -0.2 2.7 2.5 2.8
- ------------------------------------------------------------
</TABLE>
*Lehman 7 Year Municipal Bond Index.
**Six months ended April 30, 1998.
See Financial Highlights table on page 31 for dividend and capital gains
information for the past five years.
<TABLE>
<CAPTION>
LONG-TERM PORTFOLIO
TOTAL INVESTMENT RETURNS: OCTOBER 31, 1977-APRIL 30, 1998
- ------------------------------------------------------------
LONG-TERM PORTFOLIO LEHMAN*
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
1978 -8.9% 5.3% -3.6% N/A
1979 -9.4 5.7 -3.7 N/A
1980 -19.2 6.5 -12.7 N/A
1981 -21.4 8.4 -13.0 -11.4%
1982 19.0 13.3 32.3 31.6
1983 1.8 9.5 11.3 4.4
1984 -3.3 9.6 6.3 7.6
1985 8.3 10.1 18.4 18.7
1986 14.5 9.3 23.8 22.6
1987 -11.0 6.9 -4.1 -0.8
1988 9.0 8.3 17.3 14.6
1989 1.2 7.6 8.8 8.1
1990 -1.1 7.2 6.1 7.4
1991 6.7 7.6 14.3 12.2
1992 0.8 6.7 7.5 8.4
1993 10.5 6.4 16.9 14.1
1994 -10.7 5.2 -5.5 -4.3
1995 9.5 6.5 16.0 14.8
1996 1.1 5.6 6.7 5.7
1997 2.6 5.6 8.2 8.5
1998** 0.1 2.6 2.7 2.8
- ------------------------------------------------------------
</TABLE>
*Lehman Municipal Bond Index.
**Six months ended April 30, 1998.
See Financial Highlights table on page 31 for dividend and capital gains
information for the past five years.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS: PERIODS ENDED MARCH 31, 1998*
- -------------------------------------------------------------------------------------------------------------------------
10 YEARS
INCEPTION -------------------------------
DATE 1 YEAR 5 YEARS CAPITAL INCOME TOTAL
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Insured Long-Term Portfolio 9/30/1984 10.27% 6.73% 2.16% 6.48% 8.64%
Long-Term Portfolio 9/1/1977 10.94 7.01 2.41 6.54 8.95
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEC rules require that we provide this average annual total return information
through the latest calendar quarter.
10
<PAGE> 13
All of the data on this page represent past performance, which cannot be used to
predict future returns that may be achieved by the Portfolio. Note, too, that
both share price and return can fluctuate widely, so an investment in the
Portfolio could lose money.
<TABLE>
<CAPTION>
HIGH-YIELD PORTFOLIO
TOTAL INVESTMENT RETURNS: DECEMBER 27, 1978-APRIL 30, 1998
- ------------------------------------------------------------
HIGH-YIELD PORTFOLIO LEHMAN*
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
1979 -6.8% 5.2% -1.6% N/A
1980 -15.3 7.1 -8.2 N/A
1981 -19.4 9.0 -10.4 -11.4%
1982 16.1 13.7 29.8 31.6
1983 2.4 9.8 12.2 4.4
1984 -2.6 10.0 7.4 7.6
1985 8.5 10.4 18.9 18.7
1986 14.7 9.6 24.3 22.6
1987 -11.7 7.0 -4.7 -0.8
1988 10.1 8.7 18.8 14.6
1989 1.1 7.7 8.8 8.1
1990 -1.9 7.5 5.6 7.4
1991 7.2 8.0 15.2 12.2
1992 0.6 7.1 7.7 8.4
1993 10.0 6.8 16.8 14.1
1994 -10.5 5.5 -5.0 -4.3
1995 9.0 6.8 15.8 14.8
1996 0.3 5.7 6.0 5.7
1997 2.5 5.9 8.4 8.5
1998** 0.3 2.7 3.0 2.8
- ------------------------------------------------------------
</TABLE>
*Lehman Municipal Bond Index.
**Six months ended April 30, 1998.
See Financial Highlights table on page 32 for dividend and capital gains
information for the past five years.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS: PERIODS ENDED MARCH 31, 1998*
- -------------------------------------------------------------------------------------------------------------------------
10 Years
Inception -------------------------------
Date 1 Year 5 Years Capital Income Total
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
High-Yield Portfolio 12/27/1978 11.21% 7.06% 2.29% 6.81% 9.10%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEC rules require that we provide this average annual total return information
through the latest calendar quarter.
11
<PAGE> 14
PORTFOLIO PROFILE
Money Market Portfolio
This Profile provides a snapshot of the Portfolio's characteristics as of April
30, 1998. Key elements of this Profile are defined on page 13.
<TABLE>
<CAPTION>
FINANCIAL ATTRIBUTES
- ---------------------------------------
<S> <C>
Yield 3.9%
Average Maturity 34 days
Average Quality MIG-1
Expense Ratio 0.20%*
</TABLE>
*Annualized.
<TABLE>
<CAPTION>
DISTRIBUTION BY CREDIT QUALITY (% OF PORTFOLIO)
- -----------------------------------------
<S> <C>
MIG-1/SP-1 70.2%
A-1/P-1 25.2
AAA/AA 4.5
A 0.1
- -----------------------------------------
Total 100.0%
</TABLE>
<TABLE>
<CAPTION>
LARGEST STATE CONCENTRATIONS
(% OF TOTAL NET ASSETS)
- ----------------------------------------
<S> <C>
Texas 11.2%
Ohio 7.2
Florida 6.8
Wisconsin 6.2
California 6.0
Alaska 4.3
Missouri 4.2
Illinois 4.1
Michigan 4.0
North Carolina 3.4
- ----------------------------------------
Top Ten 57.4%
</TABLE>
12
<PAGE> 15
AVERAGE COUPON. The average interest rate paid on the securities held by a
portfolio. It is expressed as a percentage of face value.
AVERAGE DURATION. An estimate of how much a bond portfolio's share price will
fluctuate in response to a change in interest rates. To see how the price could
shift, multiply the portfolio's duration by the change in rates. If interest
rates rise by one percentage point, the share price of a portfolio with an
average duration of five years would decline by about 5%. If rates decrease by a
percentage point, the portfolio's share price would rise by 5%.
AVERAGE MATURITY. The average length of time until bonds held by a portfolio
reach maturity (or are called) and are repaid. In general, the longer the
average maturity, the more a portfolio's share price will fluctuate in response
to changes in market interest rates.
AVERAGE QUALITY. An indicator of credit risk, this figure is the average of the
ratings assigned to a portfolio's securities holdings by credit-rating agencies.
The agencies make their judgment after appraising an issuer's ability to meet
its obligations. Quality is graded on a scale, with Aaa or AAA indicating the
most creditworthy bond issuers and A-1 or MIG-1 indicating the most creditworthy
issuers of money market securities.
BETA. A measure of the magnitude of a portfolio's past share-price fluctuations
in relation to the ups and downs of the overall market (or appropriate market
index). The market (or index) is assigned a beta of 1.00, so a portfolio with a
beta of 1.20 would have seen its share price rise or fall by 12% when the
overall market rose or fell by 10%.
CASH RESERVES. The percentage of a portfolio's net assets invested in "cash
equivalents"--highly liquid, short-term, interest-bearing securities. This
figure does not include cash invested in futures contracts to simulate bond
investment.
DISTRIBUTION BY CREDIT QUALITY. This breakdown of a portfolio's securities by
credit rating can help in gauging the risk that returns could be affected by
defaults or other credit problems.
DISTRIBUTION BY MATURITY. An indicator of interest-rate risk. In general, the
higher the concentration of longer-maturity issues, the more a portfolio's share
price will fluctuate in response to changes in interest rates.
EXPENSE RATIO. The percentage of a portfolio's average net assets used to pay
its annual administrative and advisory expenses. These expenses directly reduce
returns to investors.
INVESTMENT FOCUS. This grid indicates the focus of a portfolio in terms of two
attributes: average maturity (short, medium, or long) and average credit quality
(high, medium, or low).
LARGEST STATE CONCENTRATIONS. An indicator of diversification. The less
concentrated a portfolio's holdings of bonds, the less the portfolio will be
hurt by any financial problems in a single state or region.
NUMBER OF ISSUES. An indicator of diversification. The more separate issues a
portfolio holds, the less susceptible it is to a price decline stemming from the
problems of a particular issue.
R-SQUARED. A measure of how much of a portfolio's past returns can be explained
by the returns from the overall market (or its benchmark index). If a
portfolio's total return were precisely synchronized with the overall market's
return, its R-squared would be 1.00. If a portfolio's returns bore no
relationship to the market's returns, its R-squared would be 0.
YIELD. A snapshot of a portfolio's interest income. The yield, expressed as a
percentage of the portfolio's net asset value, is based on income earned over
the past 30 days (7 days for money market portfolios) and is annualized, or
projected forward for the coming year.
YIELD TO MATURITY. The rate of return an investor would receive if the
securities held by a portfolio were held to their maturity dates.
13
<PAGE> 16
PORTFOLIO PROFILE
Short-Term Portfolio
This Profile provides a snapshot of the Portfolio's characteristics as of April
30, 1998, compared where appropriate to an unmanaged index. Key elements of this
Profile are defined on page 13.
<TABLE>
<CAPTION>
FINANCIAL ATTRIBUTES
- ----------------------------------------------------------
<S> <C>
Number of Issues 222
Yield 3.7%
Yield to Maturity 3.9%
Average Coupon 5.5%
Average Maturity 443 days
Average Quality AA+
Average Duration 1.1 years
Expense Ratio 0.21%*
Cash Reserves 0%
</TABLE>
*Annualized.
<TABLE>
<CAPTION>
VOLATILITY MEASURES
- ----------------------------------------------------------
SHORT-TERM LEHMAN
PORTFOLIO INDEX*
- ----------------------------------------------------------
<S> <C> <C>
R-Squared 0.70 1.00
Beta 0.14 1.00
</TABLE>
*Lehman Municipal Bond Index.
<TABLE>
<CAPTION>
DISTRIBUTION BY MATURITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
Under 1 Year 46.1%
1-3 Years 45.2
3-5 Years 8.7
Over 5 Years --
- -------------------------------------------------------
Total 100.0%
</TABLE>
INVESTMENT FOCUS
- -------------------------------------------------------
[GRAPHIC]
<TABLE>
<CAPTION>
DISTRIBUTION BY CREDIT QUALITY (% OF PORTFOLIO)
- ------------------------------------------------------
<S> <C>
AAA 68.9%
AA 24.7
A 3.2
BBB 1.8
BB 1.4
B --
Not Rated --
- ------------------------------------------------------
Total 100.0%
</TABLE>
<TABLE>
<CAPTION>
LARGEST STATE CONCENTRATIONS
(% OF TOTAL NET ASSETS)
- -------------------------------------------------------
<S> <C>
California 11.0%
New York 10.2
Texas 9.9
Massachusetts 7.9
Pennsylvania 7.3
Florida 6.7
Ohio 4.6
District of Columbia 3.6
Illinois 3.4
Alaska 3.3
- -------------------------------------------------------
Top Ten 67.9%
</TABLE>
14
<PAGE> 17
PORTFOLIO PROFILE
Limited-Term Portfolio
This Profile provides a snapshot of the Portfolio's characteristics as of April
30, 1998, compared where appropriate to an unmanaged index. Key elements of this
Profile are defined on page 13.
<TABLE>
<CAPTION>
FINANCIAL ATTRIBUTES
- ----------------------------------------------------------
<S> <C>
Number of Issues 289
Yield 4.0%
Yield to Maturity 4.2%
Average Coupon 6.0%
Average Maturity 3.2 years
Average Quality AA+
Average Duration 2.8 years
Expense Ratio 0.21%*
Cash Reserves 1.1%
</TABLE>
*Annualized.
<TABLE>
<CAPTION>
VOLATILITY MEASURES
- ----------------------------------------------------------
LIMITED-TERM LEHMAN
PORTFOLIO INDEX*
- ----------------------------------------------------------
<S> <C> <C>
R-Squared 0.82 1.00
Beta 0.36 1.00
</TABLE>
*Lehman Municipal Bond Index.
<TABLE>
<CAPTION>
DISTRIBUTION BY MATURITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
Under 1 Year 5.0%
1-3 Years 40.2
3-5 Years 33.0
Over 5 Years 21.8
- -------------------------------------------------------
Total 100.0%
</TABLE>
INVESTMENT FOCUS
- -------------------------------------------------------
[GRAPHIC]
<TABLE>
<CAPTION>
DISTRIBUTION BY CREDIT QUALITY (% OF PORTFOLIO)
- --------------------------------------------------------
<S> <C>
AAA 62.9%
AA 28.9
A 4.0
BBB 2.2
BB 2.0
B --
Not Rated --
- --------------------------------------------------------
Total 100.0%
</TABLE>
<TABLE>
<CAPTION>
LARGEST STATE CONCENTRATIONS
(% OF TOTAL NET ASSETS)
- -------------------------------------------------------
<S> <C>
New York 18.6%
Pennsylvania 8.7
Michigan 7.3
Texas 7.3
Massachusetts 6.1
California 5.2
Florida 3.9
Illinois 3.6
Washington 3.3
District of Columbia 3.3
- -------------------------------------------------------
Top Ten 67.3%
</TABLE>
15
<PAGE> 18
PORTFOLIO PROFILE
Intermediate-Term Portfolio
This Profile provides a snapshot of the Portfolio's characteristics as of April
30, 1998, compared where appropriate to an unmanaged index. Key elements of this
Profile are defined on page 13.
<TABLE>
<CAPTION>
FINANCIAL ATTRIBUTES
- ----------------------------------------------------------
<S> <C>
Number of Issues 842
Yield 4.3%
Yield to Maturity 4.5%
Average Coupon 5.7%
Average Maturity 6.6 years
Average Quality AA+
Average Duration 5.1 years
Expense Ratio 0.21%*
Cash Reserves 0.1%
</TABLE>
*Annualized
<TABLE>
<CAPTION>
VOLATILITY MEASURES
- ----------------------------------------------------------
INTERMEDIATE-TERM LEHMAN
PORTFOLIO INDEX*
- ----------------------------------------------------------
<S> <C> <C>
R-Squared 0.95 1.00
Beta 0.75 1.00
</TABLE>
*Lehman Municipal Bond Index.
<TABLE>
<CAPTION>
DISTRIBUTION BY MATURITY (% OF PORTFOLIO)
- ------------------------------------------------------
<S> <C> <C>
Under 1 Year 12.3%
1-5 Years 25.3
5-10 Years 39.6
10-20 Years 22.0
20-30 Years 0.8
Over 30 Years --
- ------------------------------------------------------
Total 100.0%
</TABLE>
INVESTMENT FOCUS
- ------------------------------------------------------
[GRAPHIC]
<TABLE>
<CAPTION>
DISTRIBUTION BY CREDIT QUALITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
AAA 62.5%
AA 23.7
A 9.5
BBB 4.0
BB 0.3
B --
Not Rated --
- -------------------------------------------------------
Total 100.0%
</TABLE>
<TABLE>
<CAPTION>
LARGEST STATE CONCENTRATIONS
(% OF TOTAL NET ASSETS)
- -------------------------------------------------------
<S> <C>
New York 11.6%
Texas 9.8
California 9.7
Pennsylvania 8.5
Massachusetts 5.8
New Jersey 5.7
Florida 4.4
Illinois 4.3
Nevada 4.2
Washington 3.7
- -------------------------------------------------------
Top Ten 67.7%
</TABLE>
16
<PAGE> 19
PORTFOLIO PROFILE
Insured Long-Term Portfolio
This Profile provides a snapshot of the Portfolio's characteristics as of April
30, 1998, compared where appropriate to an unmanaged index. Key elements of this
Profile are defined on page 13.
<TABLE>
<CAPTION>
FINANCIAL ATTRIBUTES
- ----------------------------------------------------------
<S> <C>
Number of Issues 261
Yield 4.7%
Yield to Maturity 4.9%
Average Coupon 5.9%
Average Maturity 11.6 years
Average Quality AAA
Average Duration 7.7 years
Expense Ratio 0.20%*
Cash Reserves 0%
</TABLE>
*Annualized.
<TABLE>
<CAPTION>
VOLATILITY MEASURES
- ----------------------------------------------------------
INSURED LONG-TERM LEHMAN
PORTFOLIO INDEX*
- ----------------------------------------------------------
<S> <C> <C>
R-Squared 0.97 1.00
Beta 1.18 1.00
</TABLE>
*Lehman Municipal Bond Index.
<TABLE>
<CAPTION>
DISTRIBUTION BY MATURITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
Under 1 Year 2.7%
1-5 Years 14.6
5-10 Years 21.4
10-20 Years 44.4
20-30 Years 16.7
Over 30 Years 0.2
- -------------------------------------------------------
Total 100.0%
</TABLE>
INVESTMENT FOCUS
- -------------------------------------------------------
[GRAPHIC]
<TABLE>
<CAPTION>
DISTRIBUTION BY CREDIT QUALITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
AAA 97.2%
AA 1.6
A 1.2
BBB --
BB --
B --
Not Rated --
- -------------------------------------------------------
Total 100.0%
</TABLE>
<TABLE>
<CAPTION>
LARGEST STATE CONCENTRATIONS
(% OF TOTAL NET ASSETS)
- -------------------------------------------------------
<S> <C>
California 12.3%
Pennsylvania 8.0
Florida 8.0
Ohio 6.1
Texas 6.0
Massachusetts 5.8
Illinois 5.1
New Jersey 4.6
Michigan 4.3
South Carolina 3.9
- -------------------------------------------------------
Top Ten 64.1%
</TABLE>
17
<PAGE> 20
PORTFOLIO PROFILE
Long-Term Portfolio
This Profile provides a snapshot of the Portfolio's characteristics as of April
30, 1998, compared where appropriate to an unmanaged index. Key elements of this
Profile are defined on page 13.
<TABLE>
<CAPTION>
FINANCIAL ATTRIBUTES
- ----------------------------------------------------------
<S> <C>
Number of Issues 173
Yield 4.8%
Yield to Maturity 5.0%
Average Coupon 6.0%
Average Maturity 11.9 years
Average Quality AA+
Average Duration 7.7 years
Expense Ratio 0.20%*
Cash Reserves 0.1%
</TABLE>
*Annualized.
<TABLE>
<CAPTION>
VOLATILITY MEASURES
- ----------------------------------------------------------
LONG-TERM LEHMAN
PORTFOLIO INDEX*
- ----------------------------------------------------------
<S> <C> <C>
R-Squared 0.98 1.00
Beta 1.12 1.00
</TABLE>
*Lehman Municipal Bond Index.
<TABLE>
<CAPTION>
DISTRIBUTION BY MATURITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
Under 1 Year 5.3%
1-5 Years 15.5
5-10 Years 16.1
10-20 Years 40.1
20-30 Years 22.6
Over 30 Years 0.4
- -------------------------------------------------------
Total 100.0%
</TABLE>
INVESTMENT FOCUS
- -------------------------------------------------------
[GRAPHIC]
<TABLE>
<CAPTION>
DISTRIBUTION BY CREDIT QUALITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
AAA 54.7%
AA 18.3
A 21.5
BBB 4.7
BB --
B --
Not Rated 0.8
- -------------------------------------------------------
Total 100.0%
</TABLE>
<TABLE>
<CAPTION>
LARGEST STATE CONCENTRATIONS
(% OF TOTAL NET ASSETS)
- -------------------------------------------------------
<S> <C>
New York 13.9%
Texas 12.8
California 11.5
Pennsylvania 9.7
Massachusetts 7.9
Illinois 4.4
Florida 4.2
Ohio 3.7
Nevada 3.3
Washington 3.2
- -------------------------------------------------------
Top Ten 74.6%
</TABLE>
18
<PAGE> 21
PORTFOLIO PROFILE
High-Yield Portfolio
This Profile provides a snapshot of the Portfolio's characteristics as of April
30, 1998, compared where appropriate to an unmanaged index. Key elements of this
Profile are defined on page 13.
<TABLE>
<CAPTION>
FINANCIAL ATTRIBUTES
- ----------------------------------------------------------
<S> <C>
Number of Issues 286
Yield 4.8%
Yield to Maturity 5.2%
Average Coupon 5.7%
Average Maturity 10.7 years
Average Quality AA-
Average Duration 7.2 years
Expense Ratio 0.21%*
Cash Reserves 0%
</TABLE>
*Annualized.
<TABLE>
<CAPTION>
VOLATILITY MEASURES
- ----------------------------------------------------------
HIGH-YIELD LEHMAN
PORTFOLIO INDEX*
- ----------------------------------------------------------
<S> <C> <C>
R-Squared 0.96 1.00
Beta 1.05 1.00
</TABLE>
*Lehman Municipal Bond Index.
<TABLE>
<CAPTION>
DISTRIBUTION BY MATURITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
Under 1 Year 4.6%
1-5 Years 14.3
5-10 Years 30.0
10-20 Years 36.3
20-30 Years 14.2
Over 30 Years 0.6
- -------------------------------------------------------
Total 100.0%
</TABLE>
INVESTMENT FOCUS
- -------------------------------------------------------
[GRAPHIC]
<TABLE>
<CAPTION>
DISTRIBUTION BY CREDIT QUALITY (% OF PORTFOLIO)
- -------------------------------------------------------
<S> <C>
AAA 50.0%
AA 10.4
A 16.5
BBB 13.4
BB 1.7
B --
Not Rated 8.0
- -------------------------------------------------------
Total 100.0%
</TABLE>
<TABLE>
<CAPTION>
LARGEST STATE CONCENTRATIONS
(% OF TOTAL NET ASSETS)
- -------------------------------------------------------
<S> <C>
California 12.1%
Texas 10.2
New York 10.1
Pennsylvania 7.9
Massachusetts 6.1
Florida 6.0
Illinois 5.7
Michigan 5.3
District of Columbia 4.5
Indiana 3.0
- -------------------------------------------------------
Top Ten 70.9%
</TABLE>
19
<PAGE> 22
FINANCIAL STATEMENTS
April 30, 1998 (unaudited)
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.
STATEMENT OF OPERATIONS
This Statement shows interest earned by each Portfolio during the reporting
periods, and details the operating expenses charged to the Portfolio. These
expenses directly reduce the amount of investment income available to pay to
shareholders as tax-exempt income dividends. This Statement also shows any Net
Gain (Loss) realized on the sale of investments, and the increase or decrease in
the Unrealized Appreciation (Depreciation) on investments during each period. If
a Portfolio invested in futures contracts during the period, the results of
these investments are shown separately.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
MONEY MARKET SHORT-TERM LIMITED-TERM INTERMEDIATE-TERM
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1998
--------------------------------------------------------------------
(000) (000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Interest $99,925 $31,194 $45,341 $178,938
--------------------------------------------------------------------
Total Income 99,925 31,194 45,341 178,938
--------------------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services 348 96 128 441
Management and Administrative 3,885 1,049 1,562 5,177
Marketing and Distribution 987 272 315 914
Taxes (other than income taxes) 207 57 76 262
Custodian Fees 39 10 13 38
Auditing Fees 4 3 3 4
Shareholders' Reports 100 36 47 177
Annual Meeting and Proxy Costs 17 6 8 31
Directors' Fees and Expenses 5 1 2 6
--------------------------------------------------------------------
Total Expenses 5,592 1,530 2,154 7,050
Expenses Paid Indirectly--Note C (39) (10) (109) (38)
--------------------------------------------------------------------
Net Expenses 5,553 1,520 2,045 7,012
- -----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 94,372 29,674 43,296 171,926
- -----------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS)
Investment Securities Sold 41 305 1,685 39,776
Futures Contracts -- -- (475) (8,865)
- -----------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS) 41 305 1,210 30,911
- -----------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION)
Investment Securities -- (2,809) (8,950) (65,941)
Futures Contracts -- -- 447 7,372
- -----------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) -- (2,809) (8,503) (58,569)
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $94,413 $27,170 $36,003 $144,268
=======================================================================================================================
</TABLE>
20
<PAGE> 23
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
INSURED LONG-TERM LONG-TERM HIGH-YIELD
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1998
------------------------------------------------------
(000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Interest $56,691 $35,103 $64,068
------------------------------------------------------
Total Income 56,691 35,103 64,068
------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services 133 82 148
Management and Administrative 1,584 991 1,766
Marketing and Distribution 229 151 287
Taxes (other than income taxes) 78 49 89
Custodian Fees 12 9 15
Auditing Fees 3 3 3
Shareholders' Reports 57 36 67
Annual Meeting and Proxy Costs 10 6 11
Directors' Fees and Expenses 2 1 2
------------------------------------------------------
Total Expenses 2,108 1,328 2,388
Expenses Paid Indirectly--Note C (12) (9) (15)
------------------------------------------------------
Net Expenses 2,096 1,319 2,373
- -----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 54,595 33,784 61,695
- -----------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS)
Investment Securities Sold 4,232 4,988 9,729
Futures Contracts (7,083) (228) (10,668)
- -----------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS) (2,851) 4,760 (939)
- -----------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
Investment Securities (4,819) (5,592) (2,210)
Futures Contracts 4,173 (160) 8,076
- -----------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) (646) (5,752) 5,866
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $51,098 $32,792 $66,622
=======================================================================================================================
</TABLE>
21
<PAGE> 24
STATEMENT OF CHANGES IN NET ASSETS
This Statement shows how each Portfolio's total net assets changed during the
three most recent reporting periods, including a two-month fiscal period to
convert the Fund to an October 31 fiscal year beginning in 1997. The Operations
section summarizes information detailed in the Statement of Operations. Because
the Portfolio distributes its income to shareholders each day, the amounts of
Distributions--Net Investment Income generally equal the net income earned as
shown under the Operations section. The amounts of Distributions--Realized
Capital Gain may not match the capital gains shown in the Operations section,
because distributions are determined on a tax basis and may be made in a period
different from the one in which the gains were realized on the financial
statements. The Capital Share Transactions section shows the amount shareholders
invested in the Portfolio, either by purchasing shares or by reinvesting
distributions, and the amounts redeemed. The corresponding numbers of Shares
Issued and Redeemed are shown at the end of the Statement.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
------------------------------------------
SIX MONTHS YEAR
ENDED SEP. 1 TO ENDED
APR. 30, 1998 OCT. 31, 1997 AUG. 31, 1997
(000) (000) (000)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 94,372 $ 31,525 $ 171,389
Realized Net Gain (Loss) 41 -- 132
Change in Unrealized Appreciation (Depreciation) -- -- --
----------------------------------------
Net Increase in Net Assets Resulting from Operations 94,413 31,525 171,521
----------------------------------------
DISTRIBUTIONS
Net Investment Income (94,372) (31,525) (171,389)
Realized Capital Gain -- -- --
----------------------------------------
Total Distributions (94,372) (31,525) (171,389)
----------------------------------------
CAPITAL SHARE TRANSACTIONS(1)
Issued 3,570,648 943,194 5,660,032
Issued in Lieu of Cash Distributions 88,256 29,510 159,979
Redeemed (3,462,383) (937,706) (5,099,054)
----------------------------------------
Net Increase from Capital Share Transactions 196,521 34,998 720,957
- ----------------------------------------------------------------------------------------------------------------------
Total Increase 196,562 34,998 721,089
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 5,380,410 5,345,412 4,624,323
----------------------------------------
End of Period $5,576,972 $5,380,410 $5,345,412
======================================================================================================================
(1)Shares Issued (Redeemed)
Issued 3,570,648 943,194 5,660,032
Issued in Lieu of Cash Distributions 88,256 29,510 159,979
Redeemed (3,462,383) (937,706) (5,099,054)
----------------------------------------
Net Increase in Shares Outstanding 196,521 34,998 720,957
======================================================================================================================
</TABLE>
22
<PAGE> 25
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
SHORT-TERM PORTFOLIO
-------------------------------------------
SIX MONTHS YEAR
ENDED SEP. 1 TO ENDED
APR. 30, 1998 OCT. 31, 1997 AUG. 31, 1997
(000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 29,674 $ 9,806 $ 56,997
Realized Net Gain (Loss) 305 7 592
Change in Unrealized Appreciation (Depreciation) (2,809) 1,397 2,384
----------------------------------------
Net Increase in Net Assets Resulting from Operations 27,170 11,210 59,973
----------------------------------------
DISTRIBUTIONS
Net Investment Income (29,674) (9,806) (56,997)
Realized Capital Gain 584 -- (392)
----------------------------------------
Total Distributions (30,258) (9,806) (57,389)
-----------------------------------------
CAPITAL SHARE TRANSACTIONS(1)
Issued 514,593 135,146 732,007
Issued in Lieu of Cash Distributions 25,237 8,197 48,457
Redeemed (474,443) (123,916) (775,966)
----------------------------------------
Net Increase from Capital Share Transactions 65,387 19,427 4,498
- ----------------------------------------------------------------------------------------------------------------------
Total Increase 62,299 20,831 7,082
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 1,484,565 1,463,734 1,463,652
----------------------------------------
End of Period $1,546,864 $1,484,565 $1,463,734
======================================================================================================================
(1)Shares Issued (Redeemed)
Issued 33,004 8,675 47,037
Issued in Lieu of Cash Distributions 1,620 526 3,113
Redeemed (30,435) (7,954) (49,869)
----------------------------------------
Net Increase in Shares Outstanding 4,189 1,247 281
======================================================================================================================
</TABLE>
23
<PAGE> 26
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
LIMITED-TERM PORTFOLIO
--------------------------------------------
SIX MONTHS YEAR
ENDED SEP. 1 TO ENDED
APR. 30, 1998 OCT. 31, 1997 AUG. 31, 1997
(000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 43,296 $ 14,144 $ 81,063
Realized Net Gain (Loss) 1,210 287 2,381
Change in Unrealized Appreciation (Depreciation) (8,503) 5,443 12,454
----------------------------------------
Net Increase in Net Assets Resulting from Operations 36,003 19,874 95,898
----------------------------------------
DISTRIBUTIONS
Net Investment Income (43,296) (14,144) (81,063)
Realized Capital Gain -- -- --
----------------------------------------
Total Distributions (43,296) (14,144) (81,063)
-----------------------------------------
CAPITAL SHARE TRANSACTIONS(1)
Issued 453,045 122,679 672,438
Issued in Lieu of Cash Distributions 33,866 11,012 63,785
Redeemed (339,726) (106,518) (582,527)
-----------------------------------------
Net Increase from Capital Share Transactions 147,185 27,173 153,696
- ------------------------------------------------------------------------------------------------------------------------
Total Increase 139,892 32,903 168,531
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 1,962,009 1,929,106 1,760,575
-----------------------------------------
End of Period $2,101,901 $1,962,009 $1,929,106
========================================================================================================================
(1)Shares Issued (Redeemed)
Issued 42,072 11,434 62,932
Issued in Lieu of Cash Distributions 3,147 1,025 5,970
Redeemed (31,549) (9,927) (54,564)
-----------------------------------------
Net Increase in Shares Outstanding 13,670 2,532 14,338
========================================================================================================================
</TABLE>
24
<PAGE> 27
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE-TERM PORTFOLIO
-------------------------------------------
SIX MONTHS YEAR
ENDED SEP. 1 TO ENDED
APR. 30, 1998 OCT. 31, 1997 AUG. 31, 1997
(000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 171,926 $ 56,099 $ 317,782
Realized Net Gain (Loss) 30,911 (11,995) 5,163
Change in Unrealized Appreciation (Depreciation) (58,569) 36,886 116,742
-----------------------------------------
Net Increase in Net Assets Resulting from Operations 144,268 80,990 439,687
-----------------------------------------
DISTRIBUTIONS
Net Investment Income (171,926) (56,099) (317,782)
Realized Capital Gain (26,385) -- (1,435)
-----------------------------------------
Total Distributions (198,311) (56,099) (319,217)
-----------------------------------------
CAPITAL SHARE TRANSACTIONS(1)
Issued 1,004,590 245,741 1,549,834
Issued in Lieu of Cash Distributions 149,891 41,585 236,107
Redeemed (723,202) (199,759) (1,175,502)
-----------------------------------------
Net Increase from Capital Share Transactions 431,279 87,567 610,439
- ------------------------------------------------------------------------------------------------------------------------
Total Increase 377,236 112,458 730,909
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 6,770,139 6,657,681 5,926,772
-----------------------------------------
End of Period $7,147,375 $6,770,139 $6,657,681
========================================================================================================================
(1)Shares Issued (Redeemed)
Issued 74,888 18,412 117,359
Issued in Lieu of Cash Distributions 11,196 3,113 17,869
Redeemed (53,964) (14,978) (89,141)
-----------------------------------------
Net Increase in Shares Outstanding 32,120 6,547 46,087
========================================================================================================================
</TABLE>
25
<PAGE> 28
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
INSURED LONG-TERM PORTFOLIO
--------------------------------------------
SIX MONTHS YEAR
ENDED SEP. 1 TO ENDED
APR. 30, 1998 OCT. 31, 1997 AUG. 31, 1997
(000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 54,595 $ 18,058 $ 107,858
Realized Net Gain (Loss) (2,851) (7,340) 7,738
Change in Unrealized Appreciation (Depreciation) (646) 16,157 54,683
-----------------------------------------
Net Increase in Net Assets Resulting from Operations 51,098 26,875 170,279
-----------------------------------------
DISTRIBUTIONS
Net Investment Income (54,595) (18,058) (107,858)
Realized Capital Gain (13,337) -- (11,310)
-----------------------------------------
Total Distributions (67,932) (18,058) (119,168)
-----------------------------------------
CAPITAL SHARE TRANSACTIONS(1)
Issued 166,083 43,498 265,675
Issued in Lieu of Cash Distributions 44,738 11,314 76,210
Redeemed (143,346) (44,567) (305,317)
-----------------------------------------
Net Increase from Capital Share Transactions 67,475 10,245 36,568
- ------------------------------------------------------------------------------------------------------------------------
Total Increase 50,641 19,062 87,679
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 2,043,119 2,024,057 1,936,378
-----------------------------------------
End of Period $2,093,760 $2,043,119 $2,024,057
========================================================================================================================
(1)Shares Issued (Redeemed)
Issued 13,183 3,481 21,609
Issued in Lieu of Cash Distributions 3,555 904 6,179
Redeemed (11,381) (3,568) (24,797)
-----------------------------------------
Net Increase in Shares Outstanding 5,357 817 2,991
========================================================================================================================
</TABLE>
26
<PAGE> 29
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
LONG-TERM PORTFOLIO
--------------------------------------------
SIX MONTHS YEAR
ENDED SEP. 1 TO ENDED
APR. 30, 1998 OCT. 31, 1997 AUG. 31, 1997
(000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 33,784 $ 10,889 $ 62,323
Realized Net Gain (Loss) 4,760 (2,185) 2,874
Change in Unrealized Appreciation (Depreciation) (5,752) 10,593 39,777
-----------------------------------------
Net Increase in Net Assets Resulting from Operations 32,792 19,297 104,974
-----------------------------------------
DISTRIBUTIONS
Net Investment Income (33,784) (10,889) (62,323)
Realized Capital Gain (6,527) -- (2,409)
-----------------------------------------
Total Distributions (40,311) (10,889) (64,732)
-----------------------------------------
CAPITAL SHARE TRANSACTIONS(1)
Issued 194,685 39,661 221,419
Issued in Lieu of Cash Distributions 27,895 7,317 44,013
Redeemed (102,425) (27,954) (194,173)
-----------------------------------------
Net Increase from Capital Share Transactions 120,155 19,024 71,259
- ------------------------------------------------------------------------------------------------------------------------
Total Increase 112,636 27,432 111,501
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 1,249,137 1,221,705 1,110,204
-----------------------------------------
End of Period $1,361,773 $1,249,137 $1,221,705
========================================================================================================================
(1)Shares Issued (Redeemed)
Issued 17,250 3,557 20,226
Issued in Lieu of Cash Distributions 2,477 654 4,105
Redeemed (9,091) (2,508) (17,737)
-----------------------------------------
Net Increase in Shares Outstanding 10,636 1,703 6,504
========================================================================================================================
</TABLE>
27
<PAGE> 30
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
HIGH-YIELD PORTFOLIO
--------------------------------------------
SIX MONTHS YEAR
ENDED SEP. 1 TO ENDED
APR. 30, 1998 OCT. 31, 1997 AUG. 31, 1997
(000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 61,995 $ 22,607 $ 115,522
Realized Net Gain (Loss) (939) (5,213) 9,925
Change in Unrealized Appreciation (Depreciation) (5,866) 18,403 63,383
-----------------------------------------
Net Increase in Net Assets Resulting from Operations 66,622 35,797 188,830
-----------------------------------------
DISTRIBUTIONS
Net Investment Income (61,695) (22,607) (115,522)
Realized Capital Gain (10,866) -- --
------------------------------------------
Total Distributions (72,561) (22,607) (115,522)
------------------------------------------
CAPITAL SHARE TRANSACTIONS(1)
Issued 388,379 101,099 480,518
Issued in Lieu of Cash Distributions 50,817 14,591 77,020
Redeemed (226,023) (65,952) (422,965)
-----------------------------------------
Net Increase from Capital Share Transactions 213,173 49,738 134,573
- ------------------------------------------------------------------------------------------------------------------------
Total Increase 207,234 62,928 207,881
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 2,255,572 2,192,644 1,984,763
-----------------------------------------
End of Period $2,462,806 $2,255,572 $2,192,644
========================================================================================================================
(1)Shares Issued (Redeemed)
Issued 35,504 9,278 45,326
Issued in Lieu of Cash Distributions 4,657 1,347 7,255
Redeemed (20,705) (6,106) (39,946)
-----------------------------------------
Net Increase in Shares Outstanding 19,556 4,519 12,635
========================================================================================================================
</TABLE>
28
<PAGE> 31
FINANCIAL HIGHLIGHTS
This table summarizes each Portfolio's investment results and distributions to
shareholders on a per-share basis. It also presents the Portfolio's Total Return
and shows net investment income and expenses as percentages of average net
assets. These data will help you assess: the variability of the Portfolio's net
income and total returns from year to year; the relative contributions of net
income and capital gains to the Portfolio's total return; how much it costs to
operate the Portfolio; and the extent to which the Portfolio tends to distribute
capital gains.
The table also shows the Portfolio Turnover Rate, a measure of trading
activity. A turnover rate of 100% means that the average security is held in the
Portfolio for one year. Money market portfolios are not required to report a
Portfolio Turnover Rate.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
YEAR ENDED AUGUST 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED SEP. 1 TO -----------------------------------------------------
THROUGHOUT EACH PERIOD APR. 30, 1998 OCT. 31, 1997 1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .017 .006 .034 .034 .036 .024 .025
Net Realized and Unrealized
Gain (Loss) on Investments -- -- -- -- -- -- --
-------------------------------------------------------------------------------
Total from Investment
Operations .017 .006 .034 .034 .036 .024 .025
-------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.017) (.006) (.034) (.034) (.036) (.024) (.025)
Distributions from Realized
Capital Gains -- -- -- -- -- -- --
-------------------------------------------------------------------------------
Total Distributions (.017) (.006) (.034) (.034) (.036) (.024) (.025)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
==========================================================================================================================
TOTAL RETURN 1.71% 0.59% 3.47% 3.48% 3.63% 2.43% 2.51%
==========================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $5,577 $5,380 $5,345 $4,624 $4,166 $4,164 $3,538
Ratio of Total Expenses to
Average Net Assets 0.20%* 0.18%* 0.19% 0.20% 0.22% 0.20% 0.20%
Ratio of Net Investment Income to
Average Net Assets 3.42%* 3.53%* 3.41% 3.42% 3.56% 2.41% 2.48%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized.
29
<PAGE> 32
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM PORTFOLIO
YEAR ENDED AUGUST 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED SEP. 1 TO -----------------------------------------------------------
THROUGHOUT EACH PERIOD APR. 30, 1998 OCT. 31, 1997 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $15.58 $15.57 $15.54 $15.59 $15.46 $15.63 $15.64
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .305 .103 .610 .609 .600 .534 .609
Net Realized and Unrealized
Gain (Loss) on Investments (.024) .010 .034 (.050) .131 (.150) .033
---------------------------------------------------------------------------------------
Total from Investment
Operations .281 .113 .644 .559 .731 .384 .642
---------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.305) (.103) (.610) (.609) (.600) (.534) (.609)
Distributions from Realized
Capital Gains (.006) -- (.004) -- (.001) (.020) (.043)
---------------------------------------------------------------------------------------
Total Distributions (.311) (.103) (.614) (.609) (.601) (.554) (.652)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $15.55 $15.58 $15.57 $15.54 $15.59 $15.46 $15.63
=================================================================================================================================
TOTAL RETURN 1.81% 0.73% 4.22% 3.64% 4.83% 2.49% 4.18%
=================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $1,547 $1,485 $1,464 $1,457 $1,442 $1,561 $1,329
Ratio of Total Expenses to
Average Net Assets 0.21%* 0.18%* 0.19% 0.20% 0.22% 0.20% 0.20%
Ratio of Net Investment Income to
Average Net Assets 3.93%* 3.96%* 3.91% 3.90% 3.88% 3.42% 3.88%
Portfolio Turnover Rate 38%* 4% 34% 33% 32% 27% 46%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LIMITED-TERM PORTFOLIO
YEAR ENDED AUGUST 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED SEP. 1 TO -----------------------------------------------------------
THROUGHOUT EACH PERIOD APR. 30, 1998 OCT. 31, 1997 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.74 $10.71 $10.62 $10.71 $10.57 $10.80 $10.64
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .228 .078 .476 .483 .476 .454 .485
Net Realized and Unrealized
Gain (Loss) on Investments (.040) .030 .090 (.090) .140 (.208) .209
---------------------------------------------------------------------------------------
Total from Investment
Operations .188 .108 .566 .393 .616 .246 .694
---------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.228) (.078) (.476) (.483) (.476) (.454) (.485)
Distributions from Realized
Capital Gains -- -- -- -- -- (.022) (.049)
---------------------------------------------------------------------------------------
Total Distributions (.228) (.078) (.476) (.483) (.476) (.476) (.534)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.70 $10.74 $10.71 $10.62 $10.71 $10.57 $10.80
==================================================================================================================================
TOTAL RETURN 1.76% 1.01% 5.44% 3.73% 5.99% 2.31% 6.68%
==================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $2,102 $1,962 $1,929 $1,761 $1,669 $1,814 $1,625
Ratio of Total Expenses to
Average Net Assets 0.21%* 0.18%* 0.19% 0.21% 0.22% 0.20% 0.20%
Ratio of Net Investment Income to
Average Net Assets 4.27%* 4.34%* 4.46% 4.51% 4.51% 4.24% 4.50%
Portfolio Turnover Rate 45%* 2% 28% 27% 35% 21% 20%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized
30
<PAGE> 33
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE-TERM PORTFOLIO
YEAR ENDED AUGUST 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED SEP. 1 TO -----------------------------------------------------------
THROUGHOUT EACH PERIOD APR. 30, 1998 OCT. 31, 1997 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.35 $13.30 $13.04 $13.14 $13.02 $13.45 $12.85
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .329 .111 .669 .671 .686 .683 .710
Net Realized and Unrealized
Gain (Loss) on Investments (.048) .050 .263 (.091) .278 (.354) .721
---------------------------------------------------------------------------------------
Total from Investment
Operations .281 .161 .932 .580 .964 .329 1.431
---------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.329) (.111) (.669) (.671) (.686) (.683) (.710)
Distributions from Realized
Capital Gains (.052) -- (.003) (.009) (.158) (.076) (.121)
---------------------------------------------------------------------------------------
Total Distributions (.381) (.111) (.672) (.680) (.844) (.759) (.831)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.25 $13.35 $13.30 $13.04 $13.14 $13.02 $13.45
==================================================================================================================================
TOTAL RETURN 2.10% 1.21% 7.31% 4.47% 7.82% 2.49% 11.54%
==================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $7,147 $6,770 $6,658 $5,927 $5,448 $5,068 $4,945
Ratio of Total Expenses to
Average Net Assets 0.21%* 0.18%* 0.19% 0.20% 0.22% 0.20% 0.20%
Ratio of Net Investment Income to
Average Net Assets 4.94%* 4.99%* 5.07% 5.09% 5.35% 5.15% 5.41%
Portfolio Turnover Rate 18%* 1% 15% 14% 12% 18% 15%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
INSURED LONG-TERM PORTFOLIO
YEAR ENDED AUGUST 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED SEP. 1 TO -----------------------------------------------------------
THROUGHOUT EACH PERIOD APR. 30, 1998 OCT. 31, 1997 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.51 $12.45 $12.14 $12.12 $11.98 $12.89 $12.28
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .328 .111 .674 .670 .684 .699 .718
Net Realized and Unrealized
Gain (Loss) on Investments (.019) .060 .382 .020 .313 (.734) .813
-----------------------------------------------------------------------------------------
Total from Investment
Operations .309 .171 1.056 .690 .997 (.035) 1.531
-----------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.328) (.111) (.674) (.670) (.684) (.699) (.718)
Distributions from Realized
Capital Gains (.081) -- (.072) -- (.173) (.176) (.203)
-----------------------------------------------------------------------------------------
Total Distributions (.409) (.111) (.746) (.670) (.857) (.875) (.921)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $12.41 $12.51 $12.45 $12.14 $12.12 $11.98 $12.89
===================================================================================================================================
TOTAL RETURN 2.47% 1.37% 8.93% 5.77% 8.88% -0.32% 13.06%
===================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $2,094 $2,043 $2,024 $1,936 $1,935 $1,938 $2,194
Ratio of Total Expenses to
Average Net Assets 0.20%* 0.18%* 0.19% 0.20% 0.22% 0.20% 0.20%
Ratio of Net Investment Income to
Average Net Assets 5.25%* 5.32%* 5.47% 5.46% 5.82% 5.62% 5.77%
Portfolio Turnover Rate 5%* 1% 18% 18% 7% 16% 30%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized.
31
<PAGE> 34
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM PORTFOLIO
YEAR ENDED AUGUST 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED SEP. 1 TO -----------------------------------------------------------
THROUGHOUT EACH PERIOD APR. 30, 1998 OCT. 31, 1997 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.18 $11.11 $10.73 $10.68 $10.58 $11.38 $10.95
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .289 .098 .588 .591 .608 .609 .640
Net Realized and Unrealized
Gain (Loss) on Investments .008 .070 .403 .050 .256 (.595) .715
-----------------------------------------------------------------------------------------
Total from Investment
Operations .297 .168 .991 .641 .864 .014 1.355
-----------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.289) (.098) (.588) (.591) (.608) (.609) (.640)
Distributions from Realized
Capital Gains (.058) -- (.023) -- (.156) (.205) (.285)
-----------------------------------------------------------------------------------------
Total Distributions (.347) (.098) (.611) (.591) (.764) (.814) (.925)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.13 $11.18 $11.11 $10.73 $10.68 $10.58 $11.38
===================================================================================================================================
TOTAL RETURN 2.65% 1.52% 9.46% 6.08% 8.74% 0.08% 13.09%
===================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $1,362 $1,249 $1,222 $1,110 $1,054 $1,001 $1,131
Ratio of Total Expenses to
Average Net Assets 0.20%* 0.18%* 0.19% 0.20% 0.23% 0.20% 0.20%
Ratio of Net Investment Income to
Average Net Assets 5.16%* 5.28%* 5.37% 5.45% 5.87% 5.56% 5.81%
Portfolio Turnover Rate 9%* 1% 9% 26% 35% 45% 36%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
HIGH-YIELD PORTFOLIO
YEAR ENDED AUGUST 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED SEP. 1 TO -----------------------------------------------------------
THROUGHOUT EACH PERIOD APR. 30, 1998 OCT. 31, 1997 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.83 $10.76 $10.39 $10.43 $10.39 $11.17 $10.76
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .289 .106 .589 .594 .625 .626 .669
Net Realized and Unrealized
Gain (Loss) on Investments .032 .070 .370 (.040) .213 (.566) .664
-----------------------------------------------------------------------------------------
Total from Investment
Operations .321 .176 .959 .554 .838 .060 1.333
-----------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.289) (.106) (.589) (.594) (.625) (.626) (.669)
Distributions from Realized
Capital Gains (.052) -- -- -- (.173) (.214) (.254)
-----------------------------------------------------------------------------------------
Total Distributions (.341) (.106) (.589) (.594) (.798) (.840) (.923)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.81 $10.83 $10.76 $10.39 $10.43 $10.39 $11.17
==================================================================================================================================
TOTAL RETURN 2.97% 1.63% 9.45% 5.39% 8.69% 0.52% 13.08%
==================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $2,463 $2,256 $2,193 $1,985 $1,865 $1,781 $1,931
Ratio of Total Expenses to
Average Net Assets 0.21%* 0.19%* 0.19% 0.20% 0.22% 0.20% 0.20%
Ratio of Net Investment Income to
Average Net Assets 5.24%* 6.08%* 5.56% 5.66% 6.15% 5.83% 6.15%
Portfolio Turnover Rate 17%* 3% 27% 19% 33% 50% 34%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized.
32
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS
Vanguard Municipal Bond Fund is registered under the Investment Company Act of
1940 as a diversified open-end investment company, or mutual fund, and comprises
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 many municipal issuers; the issuers' abilities to meet their
obligations may be affected by economic and political developments in a specific
state or region. Effective in 1997, the Fund's fiscal year changed from August
31 to October 31.
A. The following significant accounting policies conform to generally accepted
accounting principles for mutual funds. The Fund consistently follows such
policies in preparing its financial statements.
1. SECURITY VALUATION: Money Market Portfolio: Investment securities are
valued at amortized cost, which approximates market value. Other Portfolios:
Bonds, and temporary cash investments acquired over 60 days to maturity, are
valued using the latest bid prices or using valuations based on a matrix system
(which considers such factors as security prices, yields, maturities, and
ratings), both as furnished by independent pricing services. Other temporary
cash investments are valued at amortized cost, which approximates market value.
2. FEDERAL INCOME TAXES: Each Portfolio 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, except the Money Market Portfolio,
may use 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 or sell futures
contracts instead of bonds to take advantage of pricing differentials between
the futures contracts and the underlying 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. The aggregate principal amounts of the contracts are not recorded in the
financial statements. Fluctuations in the values of futures contracts are
recorded in the Statement of Net Assets as an asset (liability) and in the
Statement of Operations as unrealized appreciation (depreciation) until the
contracts are closed, when they are recorded as realized futures gains (losses).
4. DISTRIBUTIONS: Distributions from net investment income are declared
daily and paid on the first business day of the following month. Annual
distributions from realized capital gains, if any, are recorded on the
ex-dividend date.
5. OTHER: Security transactions are accounted for on the date securities
are bought or sold. Costs used to determine realized gains (losses) on the sale
of investment securities are those of the 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 furnishes at cost investment advisory, corporate
management, administrative, marketing, and distribution services. The costs of
such services are allocated to the Fund under methods approved by the Board of
Directors. At April 30, 1998, the Fund had contributed capital aggregating
$1,297,000 to Vanguard (included in Other Assets), representing 6.5% of
Vanguard's capitalization. The Fund's Directors and officers are also Directors
and officers of Vanguard.
C. The Fund's investment adviser may direct new issue purchases, subject to
obtaining the best price and execution, to underwriters who have agreed to
rebate or credit to the Fund part of the underwriting fees generated. Such
rebates or credits are used solely to reduce the Fund's
33
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS (continued)
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 April 30, 1998, directed brokerage and
custodian fee offset arrangements reduced expenses by:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
EXPENSE REDUCTION
(000)
---------------------------
TOTAL EXPENSE
REDUCTION AS A
DIRECTED CUSTODIAN PERCENTAGE OF
PORTFOLIO BROKERAGE FEES AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market -- $39 --
Short-Term -- 10 --
Limited-Term $96 13 0.01%*
Intermediate-Term -- 38 --
Insured Long-Term -- 12 --
Long-Term -- 9 --
High-Yield -- 15 --
- -------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized.
D. During the six months ended April 30, 1998, purchases and sales of investment
securities other than temporary cash investments were:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
(000)
------------------------------------------
PORTFOLIO PURCHASES SALES
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term $ 335,548 $215,858
Limited-Term 558,186 445,855
Intermediate-Term 1,085,219 571,751
Insured Long-Term 111,554 52,193
Long-Term 223,192 56,599
High-Yield 436,197 191,579
- -------------------------------------------------------------------------------------------------------
</TABLE>
E. 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. For federal income tax purposes, at October
31, 1997, the Portfolios had the following capital losses available to offset
future capital gains:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
CAPITAL LOSS
------------------------------------------
EXPIRATION
FISCAL YEAR(S)
AMOUNT ENDING
PORTFOLIO (000) OCTOBER 31
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Money Market $ (638) 2001-2005
Limited-Term (2,325) 2003-2005
Insured Long-Term (1,861) 2005
Long-Term (635) 2005
High-Yield (3,074) 2005
- -------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE> 37
F. At April 30, 1998, 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 $ 5,118 $ (916) $ 4,202
Limited-Term 18,783 (2,696) 16,087
Intermediate-Term 302,378 (10,470) 291,908
Insured Long-Term 188,232 (1,471) 186,761
Long-Term 105,888 (2,600) 103,288
High-Yield 177,731 (33,229) 144,502
- -------------------------------------------------------------------------------------------------------
</TABLE>
At April 30, 1998, the aggregate settlement value of open futures
contracts expiring in June 1998 and the related unrealized appreciation
(depreciation) were:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
(000)
------------------------------------------------------------------
NUMBER OF AGGREGATE UNREALIZED
LONG (SHORT) SETTLEMENT APPRECIATION
PORTFOLIO/FUTURES CONTRACTS CONTRACTS VALUE (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Limited-Term/
5-Year U.S. Treasury Note (900) $ 98,002 $ 190
Intermediate-Term/
U.S. Treasury Note (2,800) 314,475 1,105
Insured Long-Term/
U.S. Treasury Bond (264) 31,738 138
U.S. Treasury Note (495) 55,595 228
Long-Term/
U.S. Treasury Bond 731 84,630 (89)
High-Yield/
U.S. Treasury Bond (500) 60,109 (94)
U.S. Treasury Note (570) 64,018 258
- -------------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE> 38
DIRECTORS AND OFFICERS
JOHN C. BOGLE
Senior Chairman of the Board and Director of The Vanguard Group, Inc., and of
each of the investment companies in The Vanguard Group.
JOHN J. BRENNAN
Chairman, Chief Executive Officer, and Director of The Vanguard Group, Inc., and
of each of the investment companies in The Vanguard Group.
ROBERT E. CAWTHORN
Chairman Emeritus and Director of Rhone-Poulenc Rorer, Inc.; Managing Director
of Global Health Care Partners/DLJ Merchant Banking Partners; Director of Sun
Company, Inc., and Westinghouse Electric Corp.
BARBARA BARNES HAUPTFUHRER
Director of The Great Atlantic and Pacific Tea Co., IKON Office Solutions, Inc.,
Raytheon Co., Knight-Ridder, Inc., Massachusetts Mutual Life Insurance Co., and
Ladies Professional Golf Association; Trustee Emerita of Wellesley College.
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 Telecommunications 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., Procter & Gamble 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. and The Mead Corp.; Trustee of Vanderbilt University.
OTHER FUND OFFICERS
RAYMOND J. KLAPINSKY
Secretary; Managing Director and Secretary of The Vanguard Group, Inc.;
Secretary of each of the investment companies in The Vanguard Group.
RICHARD F. HYLAND
Treasurer; Principal of The Vanguard Group, Inc.; Treasurer of each of the
investment companies in The Vanguard Group.
KAREN E. WEST
Controller; Principal of The Vanguard Group, Inc.; Controller of each of the
investment companies in The Vanguard Group.
OTHER VANGUARD OFFICERS
R. GREGORY BARTON
Managing Director, Legal Department.
ROBERT A. DISTEFANO
Managing Director, Information Technology.
JAMES H. GATELY
Managing Director, Individual Investor Group.
KATHLEEN C. GUBANICH
Managing Director, Human Resources.
IAN A. MACKINNON
Managing Director, Fixed Income Group.
F. WILLIAM MCNABB, III
Managing Director, Institutional Investor Group.
MICHAEL S. MILLER
Managing Director, Planning and Development.
RALPH K. PACKARD
Managing Director and Chief Financial Officer.
GEORGE U. SAUTER
Managing Director, Core Management Group.
"Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500,"
and "500" are trademarks of The McGraw-Hill Companies, Inc. Frank Russell
Company is the owner of trademarks and copyrights relating to the Russell
Indexes. "Wilshire 4500" and "Wilshire 5000" are trademarks of Wilshire
Associates.
<PAGE> 39
VANGUARD FAMILY OF FUNDS
STOCK FUNDS
Convertible Securities Fund
Equity Income Fund
Explorer Fund
Growth and Income Portfolio
Horizon Fund
Aggressive Growth Portfolio
Capital Opportunity Portfolio
Global Equity Portfolio
Index Trust
500 Portfolio
Extended Market Portfolio
Growth Portfolio
Mid Capitalization Stock
Portfolio
Small Capitalization Growth
Stock Portfolio
Small Capitalization Stock
Portfolio
Small Capitalization Value
Stock Portfolio
Total Stock Market Portfolio
Value Portfolio
Institutional Index Fund
International Equity Index Fund
Emerging Markets Portfolio
European Portfolio
Pacific Portfolio
International Growth Portfolio
International Value Portfolio
Morgan Growth Fund
PRIMECAP Fund
Selected Value Portfolio
Specialized Portfolios
Energy Portfolio
Gold & Precious Metals
Portfolio
Health Care Portfolio
REIT Index Portfolio
Utilities Income Portfolio
Tax-Managed Fund
Capital Appreciation
Portfolio
Growth and Income Portfolio
Total International Portfolio
Trustees' Equity Fund
U.S. Portfolio
U.S. Growth Portfolio
Windsor Fund
Windsor II
MONEY MARKET FUNDS
Admiral Funds
U.S. Treasury Money Market
Portfolio
Money Market Reserves
Federal Portfolio
Prime Portfolio
Municipal Bond Fund
Money Market Portfolio
State Tax-Free Funds
(CA, NJ, NY, OH, PA)
Treasury Money Market Portfolio
BOND FUNDS
Admiral Funds
Intermediate-Term U.S.
Treasury Portfolio
Long-Term U.S. Treasury
Portfolio
Short-Term U.S. Treasury
Portfolio
Bond Index Fund
Intermediate-Term Bond
Portfolio
Long-Term Bond Portfolio
Short-Term Bond Portfolio
Total Bond Market Portfolio
Fixed Income Securities Fund
GNMA Portfolio
High Yield Corporate Portfolio
Intermediate-Term Corporate
Portfolio
Intermediate-Term U.S.
Treasury Portfolio
Long-Term Corporate
Portfolio
Long-Term U.S. Treasury
Portfolio
Short-Term Corporate
Portfolio
Short-Term Federal Portfolio
Short-Term U.S. Treasury
Portfolio
Municipal Bond Fund
High-Yield Portfolio
Insured Long-Term Portfolio
Intermediate-Term Portfolio
Limited-Term Portfolio
Long-Term Portfolio
Short-Term Portfolio
Preferred Stock Fund
State Tax-Free Funds
(CA, FL, NJ, NY, OH, PA)
BALANCED FUNDS
Asset Allocation Fund
Balanced Index Fund
Horizon Fund
Global Asset Allocation
Portfolio
LifeStrategy Portfolios
Conservative Growth
Portfolio
Growth Portfolio
Income Portfolio
Moderate Growth Portfolio
STAR Portfolio
Tax-Managed Fund
Balanced Portfolio
Wellesley Income Fund
Wellington Fund
Q952-4/1998
(C) 1998 Vanguard Marketing
Corporation, Distributor.
All rights reserved.
[THE VANGUARD GROUP LOGO]
Post Office Box 2600
Valley Forge, Pennsylvania 19482
FUND INFORMATION
1-800-662-7447
INDIVIDUAL ACCOUNT SERVICES
1-800-662-2739
INSTITUTIONAL INVESTOR SERVICES
1-800-523-1036
www.vanguard.com
[email protected]
All Vanguard funds are offered by prospectus only. Prospectuses contain more
complete information on advisory fees, distribution charges, and other expenses
and should be read carefully before you invest or send money. Prospectuses can
be obtained directly from The Vanguard Group.
<PAGE> 40
VANGUARD MUNICIPAL BOND FUND
FINANCIAL STATEMENTS
April 30, 1998 (unaudited)
The Statement of Net Assets should be read in conjunction with the Statement of
Operations, Statement of Changes in Net Assets, Financial Highlights, and Notes
to Financial Statements, all of which appear in the accompanying report.
STATEMENT OF NET ASSETS
This Statement provides a detailed list of each Portfolio's municipal bond
holdings by state, including each security's market value on the last day of the
reporting period and information on credit enhancements such as insurance or
letters of credit. Other assets are added to, and liabilities are subtracted
from, the value of Total Municipal Bonds to calculate the Portfolio's Net
Assets. Finally, Net Assets are divided by the outstanding shares of the
Portfolio to arrive at its share price, or Net Asset Value (NAV) Per Share.
At the end of the Statement of Net Assets of each Portfolio, you will find
a table displaying the composition of the Portfolio's net assets on both a
dollar and per-share basis. Undistributed Net Investment Income is usually zero
because the Portfolio distributes its net income to shareholders as a dividend
each day. Any realized gains must be distributed annually, so the bulk of net
assets consists of Paid in Capital (money invested by shareholders). The balance
shown for Accumulated Net Realized Gains usually approximates the amount
available to distribute to shareholders as taxable capital gains as of the
statement date, but may differ because certain investments or transactions may
be treated differently for financial statement and tax purposes. Any Accumulated
Net Realized Losses, and any cumulative excess of distributions over net
realized gains, will appear as negative balances. Unrealized Appreciation
(Depreciation) is the difference between the value of the Portfolio's
investments and their cost, and reflects the gains (losses) that would be
realized if the Portfolio were to sell all of its investments at their
statement-date values.
CONTENTS
Money Market Portfolio .............................. 1
Short-Term Portfolio ................................ 10
Limited-Term Portfolio .............................. 16
Intermediate-Term Portfolio ......................... 23
Insured Long-Term Portfolio ......................... 40
Long-Term Portfolio ................................. 47
High-Yield Portfolio ................................ 52
Key to Abbreviations ................................ 59
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
MONEY MARKET PORTFOLIO COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (99.1%)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALABAMA (3.1%)
Alabama Special Care Fac. Finance Auth. of the
City of Montgomery Hosp. Rev. VRDO 4.10% 5/6/1998 (3) $19,800 $ 19,800
Birmingham AL GO VRDO 4.05% 5/6/1998 (2) LOC 37,700 37,700
Birmingham AL GO VRDO 4.15% 5/6/1998 LOC 28,900 28,900
Birmingham AL GO VRDO 4.15% 5/7/1998 LOC 21,200 21,200
Huntsville AL Health Care Auth.VRDO 4.00% 5/6/1998 (1) 5,700 5,700
McIntosh AL IDR PCR VRDO (Ciba-Geigy Corp. Project) 4.10% 5/6/1998 LOC 25,000 25,000
Mobile AL IDR VRDO (Kimberly-Clark Tissue Co. Project) 4.10% 5/6/1998 33,550 33,550
------------
171,850
------------
ALASKA (4.3%)
Alaska Housing Finance Corp. VRDO 4.10% 5/6/1998 94,000 94,000
Alaska Housing Finance Corp. VRDO 4.20% 5/6/1998 35,400 35,400
Alaska Housing Finance Corp. TOB VRDO 4.15% 5/7/1998 7,580 7,580
Anchorage AK Electric Util. Rev. VRDO (Muni. Light & Power) 4.10% 5/6/1998 LOC 17,700 17,700
</TABLE>
1
<PAGE> 41
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
MONEY MARKET PORTFOLIO COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (99.1%)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Valdez AK Marine Terminal VRDO (Exxon Pipeline Project) 4.20% 5/4/1998 $ 55,100 $ 55,100
Valdez City AK Marine Terminal Rev. VRDO
(Mobil Alaska Pipeline Co. Project) 4.10% 5/6/1998 28,350 28,350
--------------
238,130
--------------
ARIZONA (1.3%)
Arizona Health Fac. Auth. VRDO (Samaritan Health Services) 4.10% 5/7/1998 (3) 29,460 29,460
Maricopa County AZ PCR VRDO (Arizona Public Service Palo Verde) 4.15% 5/4/1998 LOC 7,500 7,500
Maricopa County AZ PCR VRDO (Arizona Public Service Palo Verde) 4.20% 5/4/1998 LOC 2,800 2,800
Maricopa County AZ PCR VRDO (Arizona Public Service Palo Verde) 4.25% 5/4/1998 LOC 3,000 3,000
Scottsdale AZ IDA Hosp. Rev. VRDO
(Scottsdale Memorial Health Systems) 4.00% 5/6/1998 (2) 28,900 28,900
--------------
71,660
--------------
ARKANSAS (0.5%)
Arkansas Dev. Finance Auth. Health Care Fac. VRDO
(Sisters of Mercy) 4.10% 5/7/1998 10,700 10,700
Univ. of Arkansas Board of Trustees Rev. VRDO 4.10% 5/6/1998 20,000 20,000
--------------
30,700
--------------
CALIFORNIA (6.0%)
California Community College Financing Auth. TRAN 4.50% 9/30/1998 40,000 40,087
California RAN 4.50% 6/30/1998 60,000 60,063
California Higher Educ. Loan Auth. Student Loan Rev. PUT 3.80% 5/1/1998 LOC 59,800 59,800
California Higher Educ. Loan Auth. Student Loan Rev. PUT 4.00% 7/1/1998 LOC 16,000 16,000
California Higher Educ. Loan Auth. Student Loan Rev. VRDO 4.05% 5/6/1998 LOC 23,950 23,950
Fresno County CA TRAN 4.25% 7/1/1998 10,000 10,007
Irvine CA Ranch Water Dist. Rev. VRDO 4.05% 5/4/1998 LOC 3,000 3,000
Los Angeles City CA TRAN 4.50% 6/30/1998 24,000 24,024
Los Angeles County CA Local Educ. Agency 4.50% 9/30/1998 35,000 35,105
Los Angeles County CA Unified School Dist. TRAN 4.50% 10/1/1998 25,000 25,064
San Diego City CA TRAN 4.50% 9/30/1998 25,000 25,068
Stanislaus CA TRAN 4.50% 7/9/1998 14,000 14,015
--------------
336,183
--------------
COLORADO (1.6%)
Colorado TRAN 4.50% 6/26/1998 31,000 31,031
Colorado Springs (El Paso County) CO School Dist. TAN 4.50% 6/30/1998 24,400 24,426
Denver CO City, County Airport Rev. VRDO 4.10% 5/7/1998 LOC 21,000 21,000
Regional Transp. Dist. of Colorado COP (Transit Vehicles Project) 4.25% 5/7/1998 LOC 14,580 14,580
--------------
91,037
--------------
DELAWARE (1.2%)
Delaware Econ. Dev. Auth. VRDO (Hosp. Bill & Collection Service) 4.10% 5/6/1998 (5) 67,250 67,250
--------------
FLORIDA (6.8%)
Dade County FL IDA Exempt Fac. Rev. VRDO (Florida Power & Light) 4.20% 5/4/1998 13,500 13,500
Dade County FL Water & Sewer System Rev. TOB VRDO (Eagle Trust) 4.20% 5/7/1998 (3) 24,000 24,000
Dade County FL Water & Sewer System Rev. VRDO 4.00% 5/6/1998 (3) 68,300 68,300
Florida Dept. of General Services Rev.
(Dept. of Environmental Protection Preservation-2000) 5.00% 7/1/1998 (2) 13,015 13,043
Florida Muni. Power Agency VRDO (Stanton Project) 4.00% 5/6/1998 (1) 24,195 24,195
Gulf Breeze FL Local Govt. Loan Program VRDO 4.10% 5/7/1998 (3) 42,715 42,715
Hillsborough County FL IDA PCR VRDO (Tampa Electric Co. Project) 4.15% 5/4/1998 4,100 4,100
Hillsborough County FL School Board COP 4.00% 7/1/1998 (1) 13,220 13,229
Jacksonville FL Electric Auth. System CP 4.00% 5/20/1998 18,000 18,000
Lee County FL Hosp. Board CP (Lee Memorial Hosp. Project) 3.60% 6/1/1998 32,000 32,000
Lee County FL Hosp. Board CP (Lee Memorial Hosp. Project) 3.65% 6/1/1998 13,000 13,000
Lee County FL Hosp. Board CP (Lee Memorial Hosp. Project) 3.70% 5/8/1998 5,800 5,800
Lee County FL Hosp. Board CP (Lee Memorial Hosp. Project) 3.70% 7/9/1998 7,500 7,500
Lee County FL Hosp. Board CP (Lee Memorial Hosp. Project) 3.75% 7/9/1998 22,000 22,000
Lee County FL Hosp. Board CP (Lee Memorial Hosp. Project) 3.80% 7/8/1998 7,000 7,000
Orange County FL Health Fac. Auth. VRDO
(Adventist Health System/Sunbelt) 4.10% 5/7/1998 LOC 29,400 29,400
</TABLE>
2
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<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
St. Lucie County FL PCR CP (Florida Power & Light Co.) 3.85% 8/14/1998 $ 5,000 $ 5,000
St. Lucie County FL PCR VRDO (Florida Power & Light Co.) 4.00% 5/4/1998 300 300
Sunshine State FL Govt. Fin. Comm. CP 3.75% 7/8/1998 (2) 34,700 34,700
--------------
377,782
--------------
GEORGIA (3.3%)
Burke County GA Dev. Auth. PCR VRDO (Georgia Power Co.) 4.20% 5/4/1998 4,000 4,000
Burke County GA Dev. Auth. PCR VRDO (Georgia Power Co.) 4.25% 5/4/1998 12,600 12,600
Burke County GA Dev. Auth. PCR VRDO (Oglethorpe Power Corp.) 4.00% 5/6/1998 (3) 45,370 45,370
Fulco GA Hosp. Auth. RAN Certificates (Shepherd Center Project) 4.05% 5/6/1998 LOC 7,300 7,300
Georgia State GO 6.80% 8/1/1998 6,155 6,204
Georgia State GO 7.20% 3/1/1999 9,650 9,933
Macon-Bibb County GA Hosp. Auth. Rev. VRDO
(Medical Center of Central Georgia) 4.15% 5/6/1998 LOC 5,000 5,000
Muni. Electric Auth. of Georgia CP (Subordinate Bonds Project) 3.50% 5/1/1998 LOC 25,000 25,000
Muni. Electric Auth. of Georgia CP (Subordinate Bonds Project) 3.65% 7/17/1998 LOC 12,650 12,650
Muni. Electric Auth. of Georgia General Resolution CP 3.60% 7/20/1998 LOC 7,385 7,385
Muni. Electric Auth. of Georgia VRDO (Sublien Bonds Project) 4.10% 5/6/1998 LOC 4,600 4,600
Muni. Gas Auth. of Georgia VRDO 3.95% 5/6/1998 LOC 4,300 4,300
Muni. Gas Auth. of Georgia VRDO (Agency Project) 4.10% 5/6/1998 LOC 40,500 40,500
--------------
184,842
--------------
HAWAII (0.4%)
Hawaii GO 5.00% 11/1/1998 16,000 16,109
Honolulu HI City & County CP 3.90% 7/14/1998 8,100 8,100
--------------
24,209
--------------
IDAHO (0.4%)
Idaho TAN 4.625% 6/30/1998 25,000 25,030
--------------
ILLINOIS (4.0%)
Chicago IL School Finance Auth. GO 4.40% 6/1/1998 (1) 5,000 5,003
Illinois Dev. Finance Auth. PCR VRDO (Illinois Power Co. Project) 4.00% 5/6/1998 LOC 3,800 3,800
Illinois Dev. Finance Auth. PCR VRDO (Illinois Power Co. Project) 4.10% 5/6/1998 LOC 13,900 13,900
Illinois Educ. Fac. VRDO (DePaul Univ.) 4.15% 5/6/1998 LOC 33,600 33,600
Illinois Health Fac. Auth. PUT (Evanston Hosp. Corp.) 3.60% 8/31/1998 21,000 21,000
Illinois Health Fac. Auth. VRDO
(Franciscan Sisters Health Care Corp.) 4.05% 5/6/1998 LOC 27,000 27,000
Illinois Health Fac. Auth. VRDO (Hosp. Sisters Service) 4.125% 5/6/1998 (1) 23,500 23,500
Illinois Health Fac. Auth. VRDO (Pooled Finance) 4.10% 5/6/1998 LOC 10,500 10,500
Illinois Health Fac. Auth. VRDO (Univ. of Chicago Hosp. Project) 4.05% 5/6/1998 (1) 21,000 21,000
Illinois Toll Highway Auth. VRDO 4.00% 5/6/1998 (1) LOC 56,085 56,085
Schaumburg IL VRDO 4.20% 5/6/1998 10,800 10,800
--------------
226,188
--------------
INDIANA (2.2%)
Delaware County IN Hosp. Auth. VRDO (Cardinal Health Systems) 4.15% 5/6/1998 (2) 15,000 15,000
Indiana Health Fac. Finance Auth. Hosp. Rev. VRDO
(Charity Obligated Group-Daughters of Charity
National Health System) 3.95% 5/6/1998 27,000 27,000
Indiana Health Fac. Finance Auth. Hosp. Rev. VRDO
(Clarian Health Partners) 4.10% 5/6/1998 38,500 38,500
Indiana Muni. Power Agency VRDO 4.05% 5/6/1998 LOC 10,000 10,000
Mt. Vernon IN PCR PUT (Southern Indiana Gas & Electric) 4.05% 5/1/1998 12,000 12,000
Petersburg IN PCR CP (Indianapolis Power & Light Co.) 3.85% 7/22/1998 10,100 10,100
Purdue Univ. Student Fee Bonds 4.05% 5/6/1998 3,300 3,300
Rockport City IN PCR VRDO (AEP Generating Co. Project) 4.25% 5/4/1998 (2) 9,800 9,800
--------------
125,700
--------------
IOWA (0.1%)
Iowa State School Cash Anticipation Program 4.25% 1/28/1999 (4) 8,000 8,040
--------------
KENTUCKY (2.3%)
Kentucky Econ. Dev. Finance Auth. Hosp. Rev. VRDO
(Baptist Healthcare System Obligation Group) 4.10% 5/6/1998 LOC 87,450 87,450
</TABLE>
3
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<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
MONEY MARKET PORTFOLIO COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kentucky Econ. Dev. Finance Auth. Hosp. Rev. VRDO
(Health Alliance of Greater Cincinnati) 4.125% 5/6/1998 (1) $ 30,300 $ 30,300
Trimble County KY CP (Louisville Gas & Electric Co. Project) 3.70% 7/14/1998 10,000 10,000
--------------
127,750
--------------
LOUISIANA (1.7%)
East Baton Rouge Parish LA PCR VRDO (Exxon Project) 4.20% 5/4/1998 6,725 6,725
Louisiana GO CP 3.60% 5/12/1998 LOC 7,800 7,800
Louisiana Public Fac. Auth. Hosp. Rev. CP
(Our Lady of the Lake Regional Medical Center) 3.65% 7/16/1998 (4) 15,500 15,500
Louisiana Public Fac. Auth. Hosp. Rev. CP
(Our Lady of the Lake Regional Medical Center) 3.65% 7/17/1998 (4) 11,400 11,400
Louisiana Public Fac. Auth. Hosp. Rev. CP
(Our Lady of the Lake Regional Medical Center) 3.70% 7/10/1998 (4) 18,760 18,760
Louisiana Public Fac. Auth. Rev. VRDO (Sisters of Charity) 4.125% 5/6/1998 34,900 34,900
--------------
95,085
--------------
MAINE (0.2%)
Maine Health & Higher Educ. Fac. Auth. VRDO (Bowdoin College) 4.10% 5/6/1998 LOC 13,500 13,500
--------------
MARYLAND (2.3%)
Frederick County MD Consolidated Public Improvement VRDO 4.10% 5/6/1998 59,600 59,600
Maryland GO TOB VRDO 4.13% 5/7/1998 5,000 5,000
Maryland Health and Higher Educ. Fac. Auth.
(Charity Obligated Group-Daughters of Charity) 3.95% 5/6/1998 29,100 29,100
Washington MD Suburban Sanitation Dist. BAN VRDO 4.10% 5/6/1998 32,500 32,500
--------------
126,200
--------------
MASSACHUSETTS (0.5%)
Massachusetts Bay Transp. Auth. Notes 4.25% 2/26/1999 25,000 25,130
--------------
MICHIGAN (4.0%)
Detroit MI City School Dist. State School Aid TRAN 4.50% 5/1/1998 30,000 30,000
Michigan Hosp. Finance Auth. VRDO
(Charity Obligated Group-Daughters of Charity
National Health System) 3.95% 5/6/1998 10,000 10,000
Michigan Housing Dev. Auth. Rental Rev. VRDO 4.05% 5/6/1998 LOC 42,100 42,100
Michigan State Notes 4.50% 9/30/1998 135,500 135,901
Oakland County MI Econ. Dev. Corp. VRDO
(Cranbrook Educ. Comm.) 4.15% 5/7/1998 4,500 4,500
Univ. of Michigan Hosp. Rev. VRDO 4.25% 5/4/1998 3,300 3,300
--------------
225,801
--------------
MINNESOTA (0.1%)
Canby MN Community Hosp. Dist. #1 Yellow Medicine County VRDO
(Sioux Valley Hospitals & Health Systems) 4.50% 5/8/1998 3,870 3,870
--------------
MISSISSIPPI (0.6%)
Jackson County MS Port Fac. Rev. VRDO
(Chevron USA Inc. Project) 4.20% 5/4/1998 28,700 28,700
Mississippi GO 5.00% 11/1/1998 3,730 3,751
--------------
32,451
--------------
MISSOURI (4.2%)
Kansas City MO School Dist. Building Corp. 10.50% 2/1/1999 (3) 7,545 7,923
Missouri Environmental Improvement & Energy Resources Auth.
PCR CP (Union Electric Co.) 3.65% 8/14/1998 LOC 11,655 11,655
Missouri Health & Educ. Fac. Auth. VRDO (SSM Health Care Project) 4.15% 5/6/1998 (1) 13,700 13,700
Missouri Health & Educ. Fac. Auth. VRDO (SSM Health Care Project) 4.30% 5/6/1998 (1) 9,600 9,600
Missouri Health & Educ. Fac. Auth. VRDO (SSM Health Care Project) 4.40% 5/5/1998 LOC 6,800 6,800
Missouri Health & Educ. Fac. Auth. VRDO
(Sisters of Mercy Health Care System) 4.10% 5/6/1998 59,300 59,300
Missouri Health & Educ. Fac. Auth. VRDO
(Sisters of Mercy Health Care System) 4.10% 5/7/1998 67,000 67,000
</TABLE>
4
<PAGE> 44
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Missouri Health & Educ. Fac. Auth. VRDO (Washington Univ.) 4.30% 5/4/1998 $ 8,300 $ 8,300
Missouri Health & Educ. Fac. Auth. School Dist. TRAN
Advance Funding Program (Columbia School Dist.) 4.50% 9/14/1998 6,000 6,013
Missouri Health & Educ. Fac. Auth. School Dist. TRAN
Advance Funding Program (Rockwood R-VI School Dist.) 4.50% 9/14/1998 4,500 4,510
Missouri Health & Educ. Fac. Auth. School Dist.
Advance Funding Program (St. Louis County School Dist.) 4.50% 9/14/1998 9,000 9,020
Missouri Health & Educ. Finance Auth. VRDO
(St. Anthony's Medical Center) 4.10% 5/6/1998 32,200 32,200
--------------
236,021
--------------
NEVADA (2.0%)
Clark County NV Airport Improvement Rev. VRDO
(McCarren International Airport) 4.00% 5/6/1998 LOC 17,800 17,800
Clark County NV Airport System Refunding Rev. VRDO
(McCarren International Airport) 4.00% 5/6/1998 (1) 12,893 12,893
Clark County NV Airport System Rev. PUT
(McCarren International Airport) 3.875% 7/8/1998 (1) 18,000 18,000
Las Vegas NV Water Dist. CP 3.75% 7/10/1998 LOC 45,500 45,500
Las Vegas NV Water Dist. CP 4.00% 5/12/1998 LOC 20,000 20,000
--------------
114,193
--------------
NEW HAMPSHIRE (0.5%)
New Hampshire Higher Educ. & Health Fac. Auth. VRDO
(St Paul's School) 4.10% 5/7/1998 LOC 25,200 25,200
--------------
NEW JERSEY (0.7%)
Cherry Hill Township NJ BAN 4.50% 10/14/1998 11,100 11,134
Freehold Township NJ BAN 4.125% 10/28/1998 7,965 7,978
New Jersey CP TRAN 3.60% 6/15/1998 16,000 16,000
New Jersey Turnpike Auth. Rev. VRDO 4.00% 5/6/1998 (3) LOC 1,800 1,800
--------------
36,912
--------------
NEW MEXICO (2.2%)
Albuquerque NM GO 4.00% 7/1/1998 8,500 8,505
Hurley NM PCR VRDO
(Kennecott Sante Fe Corp. Project British Petroleum) 4.25% 5/4/1998 31,200 31,200
New Mexico Finance Auth. Administrative Fee Rev. Bonds VRDO
(Trims Project) 4.25% 5/6/1998 LOC 5,000 5,000
New Mexico Highway Comm. VRDO 4.10% 5/6/1998 (4) 14,000 14,000
New Mexico TRAN 4.50% 6/30/1998 65,950 66,014
--------------
124,719
--------------
NEW YORK (2.2%)
Nassau County NY GO 4.50% 9/1/1998 (3) 16,430 16,480
New York City NY Custodial Receipt TOB VRDO 4.15% 5/7/1998 (3) 4,000 4,000
New York City NY GO VRDO 4.00% 5/6/1998 LOC 4,600 4,600
New York City NY GO VRDO 4.15% 5/4/1998 (1) 15,900 15,900
New York City NY GO VRDO 4.20% 5/4/1998 LOC 4,100 4,100
New York City NY Muni. Finance Auth. Water &
Sewer System Rev. VRDO 4.20% 5/4/1998 (3) 13,005 13,005
New York State Dormitory Auth. TOB VRDO (City Univ.) 4.13% 5/7/1998 (1) 19,995 19,995
New York State Environmental Fac. PCR TOB VRDO 4.13% 5/7/1998 21,850 21,850
New York State Local Govt. Assistance Corp. TOB VRDO 4.13% 5/7/1998 (2) 9,070 9,070
Roslyn NY Union Free School Dist. TAN 4.25% 6/29/1998 3,000 3,002
Syosset NY Central School Dist. TAN 4.10% 6/29/1998 9,000 9,004
--------------
121,006
--------------
NORTH CAROLINA (3.4%)
Charlotte NC Airport Refunding Rev. VRDO 4.00% 5/6/1998 (1) 15,865 15,865
Mecklenburg County NC GO 4.20% 2/1/1999 5,000 5,024
Mecklenburg County NC VRDO 4.00% 5/7/1998 21,800 21,800
North Carolina Educ. Fac. Finance Auth. VRDO
(Bowman Gray School of Medicine Project) 4.10% 5/6/1998 LOC 11,000 11,000
North Carolina Educ. Fac. Finance Auth. VRDO (Duke Univ.) 4.05% 5/7/1998 11,800 11,800
</TABLE>
5
<PAGE> 45
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
MONEY MARKET PORTFOLIO COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
North Carolina Educ. Fac. Finance Auth. VRDO (Duke Univ.) 4.05% 6/1/1998 $ 14,800 $ 14,800
North Carolina Medical Care Comm. Hosp. Rev. VRDO
(Duke Univ. Hosp. Project) 4.05% 5/7/1998 21,600 21,600
North Carolina Medical Care Comm. Hosp. Rev. VRDO
(Moses H. Cone Memorial Hosp. Project) 4.10% 5/7/1998 19,500 19,500
North Carolina Medical Care Comm. Hosp. Rev. VRDO
(North Carolina Baptist Hosp. Project) 4.10% 5/7/1998 41,000 41,000
Wake County NC Industrial Fac. & Pollution Control
Finance Auth. VRDO (Carolina Power & Light) 4.10% 5/6/1998 LOC 16,600 16,600
Winston-Salem NC COP VRDO 4.20% 5/7/1998 8,850 8,850
--------------
187,839
--------------
NORTH DAKOTA (0.6%)
Oliver County ND PCR VRDO (Square Butte Electric
Cooperative Project) 4.10% 5/6/1998 (2) 30,750 30,750
--------------
OHIO (7.2%)
Butler County OH Water System BAN 3.89% 10/22/1998 4,110 4,117
Cincinnati OH Student Loan Funding Corp.
Student Loan Rev. VRDO 4.05% 5/6/1998 LOC 10,225 10,225
Clermont County OH Hosp. Rev. VRDO (Mercy Health System) 4.10% 5/6/1998 64,100 64,100
Cuyahoga County OH Hosp. Rev. VRDO
(Cleveland Clinic Foundation) 4.15% 5/6/1998 86,000 86,000
Cuyahoga County OH Hosp. Rev. VRDO
(Cleveland Clinic Foundation) 4.15% 5/6/1998 LOC 38,030 38,030
Franklin County OH Hosp. Rev. VRDO (Holy Cross Health System) 4.15% 5/7/1998 21,700 21,700
Franklin County OH Hosp. Rev. VRDO (U.S. Health Corp.) 4.10% 5/7/1998 LOC 4,715 4,715
Hamilton County OH Hosp. Fac. Rev. VRDO
(Health Alliance of Greater Cincinnati) 4.00% 5/6/1998 (1) 9,800 9,800
Hamilton County OH Hosp. Fac. Rev. VRDO
(Health Alliance of Greater Cincinnati) 4.05% 5/6/1998 (1) 56,150 56,150
Hamilton County OH Hosp. Fac. Rev. VRDO
(Health Alliance of Greater Cincinnati) 4.10% 5/6/1998 (1) 16,400 16,400
Montgomery County OH VRDO (Catholic Health Initiatives) 4.10% 5/6/1998 37,800 37,800
Ohio Air Quality Dev. Auth. VRDO
(Cincinnati Gas & Electric Co. Project) 4.20% 5/4/1998 LOC 4,200 4,200
Ohio Water Dev. Auth. VRDO (Mead Corp.) 4.15% 5/4/1998 LOC 4,220 4,220
Ohio Public Fac. Comm. Higher Educ. Fac. 4.50% 5/1/1998 10,850 10,850
Ohio State Univ. VRDO 4.00% 5/7/1998 31,000 31,000
--------------
399,307
--------------
OKLAHOMA (1.1%)
Garfield County OK IDA PCR VRDO
(Oklahoma Gas & Electric Co. Project) 4.25% 5/6/1998 40,300 40,300
Oklahoma City OK Ind. & Cultural Health Fac. Auth. VRDO
(St. Anthony Hosp. Project) 4.40% 5/5/1998 LOC 21,500 21,500
--------------
61,800
--------------
OREGON (1.6%)
Oregon Health Housing Educ. & Cultural Fac. Auth. VRDO
(Peacehealth) 4.10% 5/7/1998 LOC 15,085 15,085
Oregon Veterans Welfare Program VRDO 4.10% 5/6/1998 LOC 33,900 33,900
Oregon Veterans Welfare Program VRDO 4.15% 5/6/1998 LOC 28,865 28,865
Portland OR TAN 4.50% 6/29/1998 10,325 10,336
--------------
88,186
--------------
PENNSYLVANIA (1.9%)
Allegheny County PA Hosp. Dev. Auth. VRDO
(Allegheny General Hosp. Project) 4.20% 5/6/1998 LOC 2,800 2,800
Allegheny County PA Hosp. Dev. Auth. VRDO
(Presbyterian Univ. Health) 4.10% 5/7/1998 (1) 9,000 9,000
Delaware County PA IDA Rev. VRDO (BP Exploration & Oil) 4.25% 5/4/1998 4,000 4,000
</TABLE>
6
<PAGE> 46
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Delaware County PA IDA Solid Waste Rev. VRDO
(Scott Paper Co. Project) 4.15% 5/6/1998 $ 800 $ 800
Geisinger Health System Auth. of PA VRDO
(Geisinger Health System) 4.25% 5/4/1998 35,400 35,400
Pennsylvania Higher Educ. Fac. Auth. VRDO
(Univ. of Pennsylvania Health Services) 4.05% 5/6/1998 3,000 3,000
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. VRDO
(Children's Hosp. Project) 4.25% 5/4/1998 35,660 35,660
Sayre PA Health Care Fac. Auth. VRDO
(VHA of Pennsylvania, Pooled Capital Asset Financial Program) 4.10% 5/6/1998 (2) 15,110 15,110
--------------
105,770
--------------
SOUTH DAKOTA (0.3%)
South Dakota Health & Educ. Fac. Auth. VRDO
(Sioux Valley Hospitals & Health System) 4.50% 5/8/1998 11,130 11,130
South Dakota School District COP (Cash Flow Finance Project) 4.50% 7/27/1998 6,180 6,188
--------------
17,318
--------------
TENNESSEE (1.3%)
Metro. Govt. of Nashville & Davidson County TN
Health & Educ. PUT (Vanderbilt Univ.) 3.75% 1/15/1999 7,000 7,000
Metro. Govt. of Nashville TN Airport Auth.
Improvement Refunding VRDO 4.15% 5/6/1998 (3) LOC 29,500 29,500
Shelby County TN CP 3.60% 6/23/1998 26,000 26,000
Tennessee GO 5.00% 5/1/1998 8,725 8,725
--------------
71,225
--------------
TEXAS (11.2%)
Gulf Coast Waste Disposal Auth. of TX PCR VRDO
(Amoco Oil Project) 4.20% 5/4/1998 5,000 5,000
Harris County TX Health Fac. Dev. Corp. Hosp. Rev. VRDO
(Methodist Hosp.) 4.25% 5/4/1998 23,100 23,100
Harris County TX Health Fac. Dev. Corp. Medical Fac. VRDO
(Baylor College of Medicine) 4.15% 5/6/1998 25,000 25,000
Harris County TX Health Fac. Dev. Corp. VRDO
(St. Lukes Episcopal Hosp.) 4.25% 5/4/1998 140,870 140,870
Harris County TX Health Fac. Dev. Corp. VRDO (Sisters of Charity) 4.125% 5/6/1998 31,500 31,500
Harris County TX Health Fac. Dev. Corp. VRDO
(Texas Children's Hosp.) 4.15% 5/6/1998 32,400 32,400
Harris County TX Toll Road VRDO 4.10% 5/6/1998 20,400 20,400
Harris County TX Toll Road VRDO 4.20% 5/6/1998 15,795 15,795
Houston TX GO CP 3.85% 7/28/1998 6,000 6,000
Houston TX Water & Sewer System Rev. 5.80% 12/1/1998 (2) 4,650 4,703
Katy TX Independent School Dist. VRDO 4.15% 5/7/1998 24,700 24,700
Midland TX Independent School Dist. VRDO 4.15% 5/7/1998 10,000 10,000
North Harris TX Montgomery Community College Dist. VRDO 4.15% 5/7/1998 18,500 18,500
Pasadena TX Independent School Dist. VRDO 4.15% 5/7/1998 (3) 19,600 19,600
Plano TX Independent School Dist. 3.55% 8/10/1998 20,000 20,000
Red River TX Auth. PCR VRDO (Southwest Public Service) 4.30% 5/7/1998 18,600 18,600
Red River TX Auth. PCR VRDO (Southwest Public Service) 4.15% 5/7/1998 (2) 20,000 20,000
Richardson TX Independent School Dist. TRAN 4.50% 8/27/1998 17,000 17,035
San Antonio TX Electric & Gas System Rev. 7.00% 2/1/1999 (Prere.) 3,105 3,225
Texas Municipal Power Agency Rev. 6.40% 9/1/1998 (3) 3,000 3,028
Texas TRAN 4.75% 8/31/1998 166,030 166,522
--------------
625,978
--------------
UTAH (2.3%)
Emery County UT PCR VRDO (PacifiCorp Project) 4.10% 5/6/1998 LOC 35,500 35,500
Intermountain Power Agency of UT TOB VRDO (Eagle Trust) 4.20% 5/7/1998 (1) 37,600 37,600
Salt Lake City UT Rev. VRDO (Pooled Hosp. Finance Program) 4.05% 5/6/1998 26,900 26,900
Univ. of Utah Rev. VRDO (Auxiliary & Campus Fac.) 4.00% 5/6/1998 27,590 27,590
--------------
127,590
--------------
</TABLE>
7
<PAGE> 47
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
MONEY MARKET PORTFOLIO COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VERMONT (0.4%)
Vermont Educ. & Health Buildings Finance Agency PUT
(Middlebury College Project) 3.95% 5/1/1998 $ 6,600 $ 6,600
Vermont Educ. & Health Buildings Finance Agency VRDO
(Norwich Univ.) 4.15% 5/7/1998 LOC 14,400 14,400
--------------
21,000
--------------
VIRGINIA (0.8%)
Fairfax County VA IDA Rev. VRDO (Fairfax Hosp. System) 4.05% 5/6/1998 25,550 25,550
Fairfax County VA IDA Rev. VRDO (Fairfax Hosp. System) 4.25% 5/6/1998 18,000 18,000
--------------
43,550
--------------
WASHINGTON (1.7%)
Port of Seattle WA GO VRDO 4.10% 5/6/1998 2,100 2,100
Seattle WA Muni. Light & Power VRDO 4.00% 5/6/1998 5,000 5,000
Seattle WA Muni. Light & Power VRDO 4.10% 5/6/1998 30,700 30,700
Seattle WA Water System Rev. VRDO 4.10% 5/6/1998 LOC 19,800 19,800
Washington GO 7.00% 10/1/1998 3,900 3,951
Washington GO VRDO 4.05% 5/6/1998 28,440 28,440
Washington Health Care Fac. Auth. Rev. VRDO
(Virginia Mason Medical Center) 4.25% 5/4/1998 (1) 4,500 4,500
--------------
94,491
--------------
WISCONSIN (6.2%)
Milwaukee WI Ind. Dev. VRDO
(Wisconsin Electric Power Co. Project) 4.15% 5/7/1998 10,000 10,000
Milwaukee WI Rev. School Order Notes 4.25% 8/27/1998 15,000 15,019
Oak Creek City WI VRDO (Wisconsin Electric Power Co. Project) 4.10% 5/6/1998 47,100 47,100
Univ. of Wisconsin Hospitals & Clinics Auth. Rev. VRDO
(Univ. of Wisconsin Hosp.) 4.10% 5/6/1998 (1) 16,500 16,500
Village of Pleasant Prairie WI PCR VRDO
(Wisconsin Electric Power Co. Project) 4.15% 5/7/1998 23,500 23,500
Wisconsin GO 4.125% 11/1/1998 33,625 33,677
Wisconsin GO 4.50% 6/15/1998 140,000 140,125
Wisconsin Health & Educ. Fac. Auth. VRDO
(Wheaton Franciscan Services) 4.10% 5/7/1998 LOC 23,700 23,700
Wisconsin Health & Educ. Fac. Auth. VRDO (Wausau Hosp.) 4.15% 5/6/1998 (2) 20,000 20,000
Wisconsin Health & Educ. Fac. Auth. Hosp. Rev. VRDO
(Charity Obligated Group-Daughters of
Charity National Health System) 3.95% 5/6/1998 15,000 15,000
--------------
344,621
--------------
WYOMING (0.4%)
Kemmerer WY PCR VRDO (Exxon Project) 4.20% 5/4/1998 5,700 5,700
Lincoln County WY PCR VRDO (Exxon Project) 4.20% 5/4/1998 10,600 10,600
Sublette County WY PCR VRDO (Exxon Project) 4.20% 5/4/1998 4,800 4,800
--------------
21,100
--------------
- --------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $5,526,964) 5,526,964
- --------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
Other Assets--Note B 115,304
Liabilities (65,296)
--------------
50,008
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------------------------------------------------
Applicable to 5,577,553,306 outstanding $.001 par value shares
(authorized 7,700,000,000 shares) $5,576,972
==========================================================================================================================
NET ASSET VALUE PER SHARE $1.00
==========================================================================================================================
</TABLE>
*See Note A in Notes to Financial Statements.
For key to abbreviations and other references, see page 59.
8
<PAGE> 48
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
AMOUNT PER
(000) SHARE
- ----------------------------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1998, NET ASSETS CONSISTED OF:
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paid in Capital $5,577,568 $1.00
Undistributed Net Investment Income -- --
Accumulated Net Realized Losses (596) --
Unrealized Appreciation -- --
==================================================================================================================================
NET ASSETS $5,576,972 $1.00
==================================================================================================================================
</TABLE>
9
<PAGE> 49
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
SHORT-TERM PORTFOLIO COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (100.8%)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALASKA (3.3%)
Alaska Housing Finance Corp. VRDO 4.10% 5/6/1998 $ 27,100 $ 27,100
North Slope Borough AK GO 7.125% 7/1/1998 (1) 7,710 7,750
North Slope Borough AK GO 7.15% 7/1/1999 (1) 5,670 5,880
North Slope Borough AK GO 0.00% 1/1/2002 (1) 7,650 6,470
Valdez AK Marine Terminal VRDO (Exxon Pipeline Co. Project) 4.20% 5/4/1998 3,100 3,100
--------------
50,300
--------------
ARIZONA (2.0%)
Arizona Transp. Board Excise Tax Rev. 5.50% 7/1/1998 (2) 7,315 7,334
Maricopa County AZ PCR VRDO (Arizona Public Service Palo Verde) 4.20% 5/4/1998 LOC 16,750 16,750
Maricopa County AZ School Dist. 0.00% 7/1/1999 (3) 7,530 7,179
--------------
31,263
--------------
CALIFORNIA (11.0%)
California Dept. of Water (Central Valley Project) 8.75% 12/1/2000 4,540 5,059
California Health Fac. Finance Auth. VRDO
(Catholic Healthcare West) 3.85% 5/6/1998 (1) 500 500
California Higher Educ. Loan Auth. Student Loan Rev. VRDO 4.05% 5/6/1998 LOC 14,100 14,100
Livermore Valley CA Joint Unified School Dist. TRANS 4.50% 12/30/1998 8,000 8,034
Los Angeles County CA Public Works Finance Auth. 6.00% 9/1/1999 (1) 21,080 21,668
Los Angeles County CA Public Works Finance Auth.
(Regional Park & Open Space Dist.) 5.00% 10/1/1999 23,335 23,703
Los Angeles County CA TRAN 4.50% 6/30/1998 25,000 25,019
Mount Diablo CA Unified School Dist. TRAN 4.75% 1/28/1999 13,800 13,896
Orange County CA Sanitation Dist. VRDO 3.95% 5/7/1998 (2) LOC 6,000 6,000
Orange County CA Sanitation Dist. VRDO 4.10% 5/4/1998 LOC 1,000 1,000
Orange County CA Water Dist. VRDO 4.05% 5/4/1998 LOC 1,400 1,400
San Diego CA Area Local Govt. COP Pooled TRAN 4.50% 10/1/1998 25,000 25,070
San Juan CA Unified School Dist. TRAN 4.25% 12/30/1998 25,000 25,075
--------------
170,524
--------------
COLORADO (1.1%)
Jefferson County CO School Dist. GO 5.00% 12/15/2001 (3) 5,800 5,945
Jefferson County CO School Dist. GO 5.00% 12/15/2002 (3) 4,500 4,621
Jefferson County CO School Dist. GO 5.00% 12/15/1998 (1) 6,235 6,282
--------------
16,848
--------------
CONNECTICUT (2.7%)
Connecticut GO 5.00% 8/1/2000 7,000 7,150
Connecticut GO 5.65% 11/15/1998 2,500 2,526
Connecticut 2nd Lien Special Tax Obligation Transp.
Infrastructure VRDO 4.10% 5/6/1998 LOC 3,300 3,300
Connecticut Special Assessment Unemployment Compensation 5.50% 5/15/2000 (2) 17,500 18,011
Connecticut Special Tax Obligation Transp. Infrastructure 4.00% 10/1/1999 11,000 11,024
--------------
42,011
--------------
DISTRICT OF COLUMBIA (3.6%)
District of Columbia GO 0.00% 6/1/1999 (1) 5,000 4,781
District of Columbia GO 0.00% 6/1/2000 (1) 6,900 6,305
District of Columbia GO 5.50% 6/1/1998 9,065 9,073
District of Columbia GO 5.50% 6/1/1999 12,100 12,241
District of Columbia GO 5.90% 6/1/2000 (1) 10,105 10,429
District of Columbia GO 6.00% 6/1/2001 (1) 8,115 8,486
District of Columbia GO 7.10% 6/1/2000 (4) 3,620 3,820
--------------
55,135
--------------
DELAWARE (1.3%)
Delaware Economic Dev. Auth. VRDO 4.10% 5/6/1998 (5) 20,000 20,000
--------------
FLORIDA (6.7%)
Dade County FL Sales Tax Rev. 6.00% 10/1/2001 (2) 2,500 2,640
Dade County FL School Dist. 7.00% 8/1/1998 (3) 7,510 7,567
Dade County FL School Dist. 7.00% 8/1/1999 (3) 8,300 8,614
Dade County FL School Dist. 7.375% 7/1/1999 (Prere.) 19,600 20,765
</TABLE>
10
<PAGE> 50
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dade County FL Water and Sewer Rev. VRDO 4.00% 5/6/1998 (3) $ 9,807 $ 9,807
Florida State Department Transp. Rev. (Right-of-Way) 6.40% 7/1/1999 2,765 2,846
Florida State Turnpike 7.50% 7/1/1999 (Prere.) 9,750 10,344
Gulf Breeze FL Local Govt. Loan Program VRDO 4.10% 5/7/1998 (3) 20,365 20,365
Hillsborough County FL IDA PCR VRDO (Tampa Electric Co. Project) 4.00% 5/4/1998 700 700
Osceola County FL Capital Improvement Rev. 4.50% 9/1/2000 (1) 5,000 5,054
Tampa FL Rev. (Allegany Health System-St. Joseph) 7.125% 12/1/1999 (Prere.) 2,500 2,668
Tampa City FL Health System Rev (Catholic Health East) 4.50% 11/15/1999 (1) 5,355 5,403
Tampa City FL Health System Rev (Catholic Health East) 5.00% 11/15/2001 (1) 4,035 4,128
Tampa-Hillsborough County FL Expressway Auth. Rev. 6.50% 7/1/1999 (2) 3,215 3,313
--------------
104,214
--------------
GEORGIA (2.5%)
Burke County GA Dev. Auth. PCR VRDO (Oglethorpe Power) 4.00% 5/6/1998 (3) 1,300 1,300
Georgia GO 6.80% 8/1/2000 2,230 2,363
Georgia GO 7.00% 11/1/1999 7,500 7,845
Georgia GO 7.25% 7/1/1999 3,000 3,117
Georgia GO 7.40% 8/1/2000 5,000 5,357
Georgia GO 7.50% 4/1/2001 5,500 5,998
Georgia GO 7.70% 4/1/1999 5,000 5,177
Muni. Gas Auth. of GA Rev. VRDO (Agency Project) 4.10% 5/6/1998 LOC 2,800 2,800
Muni. Gas Auth. of GA Rev. VRDO (Agency Project) 4.10% 5/6/1998 LOC 4,900 4,900
--------------
38,857
--------------
HAWAII (1.3%)
Hawaii GO 5.00% 11/1/1999 20,000 20,302
--------------
ILLINOIS (3.4%)
Chicago IL GO 7.50% 1/1/1999 (Prere.) 5,000 5,219
Chicago IL Metro. Water Reclamation Dist. 6.40% 1/1/2000 5,000 5,189
Chicago IL Metro. Water Reclamation Dist. 6.80% 1/1/2000 (Prere.) 5,200 5,530
Chicago IL Metro. Water Reclamation Dist. 7.25% 1/1/1999 (Prere.) 3,490 3,569
Chicago IL Public Building Comm. 4.50% 12/1/1998 (1) 8,000 8,033
Chicago IL Public Building Comm. 7.75% 1/1/1999 (3) 5,000 5,228
Chicago IL School Finance Auth. GO 4.40% 6/1/1998 (1) 6,755 6,757
Illinois GO 5.50% 8/1/1998 7,700 7,730
Illinois State Toll Hwy. Auth. Rev. VRDO 4.00% 5/6/1998 (1) LOC 5,875 5,875
--------------
53,130
--------------
INDIANA (1.6%)
Indiana Health Fac. Finance Auth. Hosp. Rev. VRDO
(Clarian Health Partners) 4.10% 5/6/1998 20,000 20,000
Merrillville IN Multi School Building Corp. 7.50% 7/15/2000 (Prere.) 4,000 4,357
--------------
24,357
--------------
KANSAS (0.3%)
Merriam Kansas Hosp. Rev. (Shawnee Medical Center Project) 7.25% 9/1/2001 (Prere.) 3,580 3,961
--------------
LOUISIANA (0.3%)
East Baton Rouge Parish LA PCR VRDO (Exxon Project) 4.20% 5/4/1998 1,000 1,000
Louisiana GO 5.00% 4/15/2002 (2)++ 3,400 3,475
--------------
4,475
--------------
MARYLAND (0.3%)
Maryland Health & Higher Educ. Fac. (Francis Scott Key) 7.00% 7/1/2000 (Prere.) 4,000 4,311
--------------
MASSACHUSETTS (7.9%)
Massachusetts Bay Transp. Auth. 7.00% 3/1/2001 (Prere.) 6,000 6,548
Massachusetts Bay Transp. Auth. 7.10% 3/1/1999 (3)(Prere.) 7,800 8,161
Massachusetts Consolidated Loan 7.00% 6/1/1999 (Prere.) 10,000 10,527
Massachusetts Consolidated Loan 7.50% 2/1/1999 (3)(Prere.) 6,400 6,637
Massachusetts GO 5.50% 7/1/1999 10,000 10,190
Massachusetts GO 6.50% 8/1/2001 (Prere.) 3,115 3,382
Massachusetts GO 7.25% 7/1/1998 (Prere.) 5,000 5,102
Massachusetts GO 7.25% 3/1/2000 (3)(Prere.) 3,910 4,203
</TABLE>
<PAGE> 51
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
SHORT-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts GO 9.25% 7/1/2000 $ 10,000 $ 11,058
Massachusetts Health and Educ. Fac. Auth. Rev. PUT
(Fairview Extended Care) 4.55% 7/14/2002 3,400 3,422
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 1,485 1,502
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 (ETM) 5,515 5,585
Massachusetts Water Resources Auth. Rev. 6.50% 12/1/2001 (Prere.) 4,300 4,695
Massachusetts Water Resources Auth. Rev. 7.00% 4/1/2000 (Prere.) 4,500 4,825
Massachusetts Water Resources Auth. Rev. 7.50% 4/1/2000 (Prere.) 15,850 17,140
Massachusetts Water Resources Auth. Rev. 7.625% 4/1/2000 (Prere.) 17,645 19,121
-----------
122,098
-----------
MICHIGAN (3.0%)
Greater Detroit MI Resource Recovery Auth. 5.00% 12/13/1999 (2) 12,000 12,197
Michigan Building Auth. Rev. (Equipment Program) 5.00% 10/1/1998 3,615 3,633
Michigan Building Auth. Rev. (Fac. Program) 5.00% 10/1/2000 (2) 4,000 4,086
Michigan Hosp. Finance Auth. Rev. (McLaren Obligated Group) 7.50% 9/15/2001 5,750 6,423
Michigan Trunk Line 5.50% 11/15/1998 13,720 13,846
Regents of Univ. of MI Hosp. Rev. VRDO 4.25% 5/4/1998 3,000 3,000
Royal Oak MI Finance Auth. Hosp. Rev. VRDO
(William Beaumont Hosp.) 4.25% 5/4/1998 3,400 3,400
-----------
46,585
-----------
MINNESOTA (0.8%)
Minnesota GO 6.00% 8/1/1999 5,730 5,882
Minnesota GO 6.40% 8/1/2000 6,700 7,038
-----------
12,920
-----------
MISSISSIPPI (0.5%)
Jackson County MS Port Fac. VRDO (Chevron) 4.20% 5/4/1998 8,300 8,300
-----------
MISSOURI (1.4%)
Missouri Health & Educ. Fac. Auth. VRDO
(Sisters of Mercy Health System) 4.10% 5/6/1998 1,000 1,000
Missouri Health & Educ. Fac. Auth. VRDO
(Sisters of Mercy Health System) 4.10% 5/7/1998 4,600 4,600
Missouri Health & Educ. Fac. Auth. VRDO
(St. Anthony Medical Center) 4.10% 5/6/1998 6,900 6,900
St. Louis County MO Rockwood School Dist. GO Refunding 8.50% 2/1/2001 8,000 8,870
-----------
21,370
-----------
NEVADA (1.2%)
Clark County NV Airport System Refunding Rev. VRDO
(McCarren International Airport) 4.00% 5/6/1998 LOC 2,685 2,685
Clark County NV Highway Improvement Motor Vehicle Fuel Tax 4.50% 7/1/1998 (2) 5,160 5,164
Clark County NV Improvement and Refunding 6.00% 10/1/2001 4,845 5,103
Clark County NV School Dist. GO (Computer Equipment) 7.50% 6/15/2000 (3) 6,000 6,403
-----------
19,355
-----------
NEW JERSEY (0.9%)
New Jersey Econ. Dev. Auth. Transition Fac. 5.125% 7/1/2000 (1) 2,710 2,766
New Jersey Health Care Fac. Finance Auth. Rev.
(Community Medical Center, Kimball Medical Center,
Kensington Manor Care Center Obligated Group) 4.50% 7/1/2001 4,835 4,866
New Jersey Transit Corp. 5.25% 9/1/2001 5,000 5,127
New Jersey Turnpike Auth. VRDO 4.00% 5/6/1998 (3) LOC 800 800
-----------
13,559
-----------
NEW MEXICO (0.3%)
Albuquerque NM Water & Sewer 5.90% 7/1/1998 (ETM) 4,105 4,118
-----------
NEW YORK (10.2%)
Muni. Assistance Corp. for New York City NY 4.50% 7/1/1998 10,000 10,009
Muni. Assistance Corp. for New York City NY 5.00% 7/1/1999 9,500 9,625
Muni. Assistance Corp. for New York City NY 5.00% 7/1/2001 10,000 10,217
Muni. Assistance Corp. for New York City NY 5.25% 7/1/2001 5,110 5,258
Nassau County NY General Improvement 4.50% 9/1/1999 (3) 14,025 14,137
</TABLE>
12
<PAGE> 52
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nassau County NY General Improvement 4.90% 3/1/2001 (3) $ 11,060 $ 11,235
Nassau County NY General Improvement 5.125% 11/1/1999 (3) 7,525 7,658
New York City NY GO 5.25% 8/1/1999 9,875 10,023
New York City NY GO 7.50% 2/1/2002 (Prere.) 7,860 8,793
New York City NY GO VRDO 4.00% 5/6/1998 LOC 4,100 4,100
New York City NY GO VRDO 4.10% 5/4/1998 LOC 1,600 1,600
New York City NY Water and Sewer Auth. Rev. VRDO 4.20% 5/4/1998 (3) 900 900
New York Medical Care Fac. (St. Luke's) 7.45% 2/15/2000 (1)(Prere.) 5,000 5,381
New York Medical Care Fac. Finance Agency Rev. 7.80% 2/15/1999 (Prere.) 5,000 5,251
New York State Dormitory Auth. (Brookdale Hosp.) 5.00% 2/15/2001 4,335 4,388
New York State Dormitory Auth. (Interfaith Medical Center) 5.25% 2/15/2002 2,565 2,615
New York State Dormitory Auth. (Jamaica Hosp.) 5.00% 2/15/2001 2,725 2,758
New York State Dormitory Auth. (Wycoff Heights) 5.00% 2/15/2001 2,605 2,637
New York State Dormitory Auth. Rev. (City Univ.) 7.625% 7/1/2000 (Prere.) 23,600 25,756
New York State Dormitory Auth. Rev. (State Univ.) 7.25% 5/15/2000 (Prere.) 2,070 2,236
New York State Dormitory Auth. Rev. (State Univ.) 7.70% 5/15/2000 (Prere.) 4,000 4,356
New York State Thruway Auth. Service Contract Rev.
(Highway Bridge) 5.10% 4/1/1999 5,085 5,139
New York Urban Dev. Corp. (Correction Fac.) 7.75% 1/1/2000 (Prere.) 3,900 4,208
-----------
158,280
-----------
NORTH CAROLINA (0.4%)
North Carolina Eastern Muni. Power Agency 7.25% 1/1/1999 (Prere.) 3,000 3,127
North Carolina Medical Care Comm. VRDO (Duke Univ. Hosp.) 4.05% 5/7/1998 3,000 3,000
-----------
6,127
-----------
OHIO (4.6%)
Cincinnati City OH School Dist. TAN 5.50% 12/1/2000 (2) 4,300 4,443
Cincinnati OH Student Loan Funding Corp. Student Loan Rev. VRDO 4.05% 5/6/1998 LOC 4,300 4,300
Clermont County OH Hosp. Rev. VRDO (Mercy Health Systems) 4.10% 5/6/1998 1,200 1,200
Columbus OH Electric Systems Rev. VRDO 3.50% 6/1/1998 LOC 1,300 1,300
Columbus OH GO VRDO 3.90% 5/7/1998 1,900 1,900
Cuyahoga County OH Hosp. Rev. (Meridia Health System) 7.25% 8/15/2000 (Prere.) 4,980 5,409
Cuyahoga County OH Hosp. Rev. VRDO (Cleveland Clinic) 4.15% 5/6/1998 LOC 2,410 2,410
Hamilton County OH Hosp. Fac. Rev. VRDO (Bethesda Hosp.) 3.95% 5/7/1998 LOC 600 600
Hancock County OH BAN 4.50% 12/1/1998 5,865 5,888
Ohio Air Quality Dev. Auth. Rev. VRDO (Cincinnati Gas &
Electric Co. Project) 4.10% 5/4/1998 LOC 3,800 3,800
Ohio Air Quality Dev. Auth. Rev. VRDO (Cincinnati Gas &
Electric Co. Project) 4.30% 5/4/1998 LOC 7,100 7,100
Ohio Building Auth. Correctional Fac. 6.50% 10/1/2001 4,000 4,276
Ohio Public Fac. Higher Educ. Rev. 4.75% 5/1/1999 16,600 16,752
Ohio University General Receipts VRDO 4.00% 5/7/1998 12,080 12,080
-----------
71,458
-----------
OKLAHOMA (2.4%)
Garfield County OK IDA PCR VRDO
(Oklahoma Gas & Electric Co. Project) 4.25% 5/6/1998 1,900 1,900
Grand River Dam Auth. OK 4.90% 6/1/1998 10,000 10,008
Oklahoma Ind. Auth. Health System Rev. VRDO (Baptist Center) 4.15% 5/6/1998 24,625 24,625
-----------
36,533
-----------
PENNSYLVANIA (7.3%)
Berks County PA GO 7.25% 11/15/2000 (3)(Prere.) 6,700 7,321
Montgomery County PA GO 5.00% 7/15/1999 2,775 2,814
Pennsylvania GO 4.75% 6/15/1999 (1) 10,500 10,609
Pennsylvania GO 5.00% 10/15/1999 3,490 3,547
Pennsylvania GO 5.25% 11/15/2000 (3) 7,500 7,719
Pennsylvania Higher Educ. Fac. Auth. Health Services
(Allegheny/Delaware Valley) 4.60% 11/15/1999 (1) 4,830 4,876
Pennsylvania Higher Educ. Fac. Auth. Health Services VRDO
(Carnegie Mellon) 4.25% 5/4/1998 4,500 4,500
Pennsylvania Intergovernmental Cooperation Auth. Rev. 5.75% 6/15/2000 6,675 6,889
Philadelphia PA GO 5.75% 11/15/1998 (3) 6,655 6,724
</TABLE>
13
<PAGE> 53
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
SHORT-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Philadelphia PA GO 6.00% 11/15/1999 (3) $ 10,000 $ 10,305
Philadelphia PA Muni. Auth. Rev. 8.625% 11/15/2001 (Prere.) 15,500 17,969
Philadelphia PA School Dist. 6.70% 7/1/1999 (1) 5,145 5,313
Philadelphia PA Water & Sewer Rev. 6.90% 10/1/1999 (Prere.) 5,000 5,303
Pittsburgh PA GO 5.00% 9/1/2000 (2) 2,250 2,291
Sayre PA Health Care Fac. Auth. VRDO
(VHA of Pennsylvania, Pooled Capital Asset Financing Program) 4.10% 5/6/1998 (2) 17,400 17,400
-----------
113,580
-----------
PUERTO RICO (0.7%)
Puerto Rico GO 5.50% 7/1/1999 10,000 10,177
-----------
SOUTH CAROLINA (1.1%)
Berkeley SC PCR VRDO (Amoco Chemical Co. Project) 4.20% 5/4/1998 2,100 2,100
Piedmont SC Muni. Power Agency Electric Rev. VRDO 4.10% 5/6/1998 (1) 15,400 15,400
-----------
17,500
-----------
TENNESSEE (1.1%)
Metro. Govt. of Nashville TN Airport Auth. Improvement
Refunding VRDO 4.15% 5/6/1998 (3) LOC 7,100 7,100
Tennessee GO 5.00% 5/1/1999 10,070 10,194
-----------
17,294
-----------
TEXAS (9.9%)
Austin TX Combined Util. System Rev. 7.60% 11/15/1999 (1) 2,300 2,424
Austin TX Combined Util. System Rev. 7.60% 11/15/1999 (1)(Prere.) 2,700 2,849
Austin TX Combined Util. System Rev. 11.125% 11/15/1999 (Prere.) 4,000 4,428
Austin TX GO 6.00% 9/1/1999 (Prere.) 6,200 6,373
Dallas TX GO 7.50% 2/15/1999 3,050 3,138
Garland TX Independent School Dist. GO 7.00% 2/15/1999 5,000 5,124
Harris County TX Health Fac. Dev.
(Hermann Memorial Hosp. System Project) 4.25% 6/1/1999 (4) 4,600 4,619
Harris County TX Health Fac. Dev.
(Hermann Memorial Hosp. System Project) 5.00% 6/1/2000 (4) 4,095 4,162
Harris County TX Health Fac. Dev.
(Hermann Memorial Hosp. System Project) 5.00% 6/1/2001 (4) 1,500 1,529
Harris County TX Toll Road VRDO 4.10% 5/6/1998 8,500 8,500
Harris County TX Toll Road VRDO 4.20% 5/6/1998 3,730 3,730
Houston TX Hotel Occupancy Rev. 6.00% 7/1/1999 (4) 4,000 4,095
Houston TX Independent School Dist. 5.00% 7/15/1999 6,700 6,792
Lower Colorado River Auth. TX Rev. 5.00% 1/1/1999 3,180 3,205
Richardson TX Independent School Dist. VRDO 4.15% 5/7/1998 5,000 5,000
Round Rock TX Independent School Dist. 6.50% 8/1/2002 1,745 1,886
San Antonio TX Independent School Dist. 7.00% 8/15/1999 6,350 6,597
Southwest TX Higher Educ. Auth. (Southert Methodist Univ.) VRDO 4.25% 5/4/1998 LOC 16,600 16,600
Texas National Research Lab Comm. (Super Conductors) 7.125% 4/1/2000 (Prere.) 15,930 17,111
Texas Public Finance Auth. 8.00% 10/1/1998 3,000 3,052
Texas TRAN 4.75% 8/31/1998 35,000 35,110
Univ. of Texas Board of Regents Rev. 7.00% 8/15/2001 (Prere.) 6,700 7,374
-----------
153,698
-----------
UTAH (0.3%)
Intermountain Power Agency UT 7.00% 7/1/1999 (Prere.) 5,100 5,380
-----------
VIRGINIA (1.0%)
Fairfax County VA IDA Health Care Rev.
(Inova Health System Project) 4.25% 8/15/1999 2,705 2,717
Virginia Public School Auth. 5.00% 8/1/1999 6,215 6,304
Virginia Public School Auth. 5.30% 8/1/2000 2,370 2,429
Virginia Public School Auth. 5.50% 8/1/1998 3,320 3,333
-----------
14,783
-----------
WASHINGTON (2.3%)
King County WA GO 6.70% 1/1/1999 8,585 8,750
King County WA GO 6.70% 1/1/1999 (ETM) 415 423
</TABLE>
14
<PAGE> 54
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Snohomish County WA Public Util. Dist. Rev. 5.00% 1/1/2000 (3) $ 3,000 $ 3,044
Snohomish County WA Public Util. Dist. Rev. 9.75% 1/1/1999 (3) 5,315 5,521
Washington GO 4.40% 10/1/1998 4,500 4,512
Washington GO 5.50% 7/1/1999 5,000 5,094
Washington GO 7.75% 12/1/1998 (Prere.) 2,500 2,557
Washington GO VRDO 4.05% 5/6/1998 5,100 5,100
-----------
35,001
-----------
WEST VIRGINIA (1.1%)
West Virginia Building Comm. Rev. 5.00% 7/1/1998 (1) 5,190 5,199
West Virginia School Building Auth. Rev. 6.00% 7/1/1998 (1) 7,000 7,024
West Virginia Water Dev. Auth. 7.70% 11/1/2000 (Prere.) 4,960 5,468
-----------
17,691
-----------
WISCONSIN (1.0%)
Milwaukee WI Metropolitan Sewer Dist. 7.00% 9/1/2001 5,000 5,421
Wisconsin Clean Water Rev. 6.30% 6/1/2000 3,000 3,133
Wisconsin GO 5.00% 5/1/1999 5,305 5,368
----------
13,922
-----------
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $1,555,215) 1,559,417
- ---------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.8%)
- ---------------------------------------------------------------------------------------------------------------------------
Other Assets--Note B 35,979
Liabilities (48,532)
-----------
(12,553)
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- ---------------------------------------------------------------------------------------------------------------------------
Applicable to 99,446,200 outstanding $.001 par value shares
(authorized 350,000,000 shares) $1,546,864
===========================================================================================================================
NET ASSET VALUE PER SHARE $15.55
===========================================================================================================================
</TABLE>
*See Note A in Notes to Financial Statements.
For key to abbreviations and other references, see page 59.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1998, NET ASSETS CONSISTED OF:
- ---------------------------------------------------------------------------------------------------------------------------
AMOUNT PER
(000) SHARE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paid in Capital $1,542,402 $15.51
Undistributed Net Investment Income -- --
Accumulated Net Realized Gains 260 --
Unrealized Appreciation--Note F 4,202 .04
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS $1,546,864 $15.55
===========================================================================================================================
</TABLE>
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
LIMITED-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (98.9%)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALABAMA (0.8%)
Huntsville AL Health Care Fac. Auth. 4.65% 6/1/2005 (1) $ 16,500 $ 16,548
-----------
ALASKA (1.3%)
Anchorage AK GO 4.70% 8/1/2001 (1) 5,000 5,060
North Slope Borough AK GO 7.25% 6/30/2000 (3)+ 20,000 21,265
-----------
26,325
-----------
ARIZONA (2.3%)
Arizona Transp. Board Excise Tax Rev. 6.00% 7/1/2002 (2) 15,185 16,142
Arizona Transp. Board Highway Rev. 6.00% 7/1/2000 4,500 4,681
Maricopa County AZ PCR VRDO
(Arizona Public Service Co.) 4.15% 5/4/1998 LOC 1,600 1,600
Maricopa County AZ School Dist. GO 0.00% 7/1/1999 (3) 8,000 7,627
Phoenix AZ Civic Improvement Corp. Waste Water System 6.125% 7/1/2003 (Prere.) 10,000 10,959
Salt River AZ Agricultural Refunding Rev. (Salt River Project) 5.50% 1/1/2000 7,375 7,554
-----------
48,563
-----------
CALIFORNIA (5.2%)
California GO 7.50% 11/1/2003 (3) 6,000 6,916
California GO 9.00% 6/1/2000 5,000 5,488
California GO 10.50% 10/1/2000 3,000 3,436
California Dept. of Water (Central Valley Project) 8.25% 12/1/2001 4,790 5,427
California Dept. of Water (Central Valley Project) 8.25% 12/1/2002 5,060 5,879
California Dept. of Water (Central Valley Project) 8.25% 12/1/2005 5,685 7,029
California Public Works Board Lease Rev.
(Univ. of California Project) 5.50% 9/1/2004 (2) 3,790 4,018
California Public Works Board Lease Rev.
(Univ. of California Project) 5.50% 9/1/2005 (2) 3,900 4,141
Irvine CA Ranch Water Dist. VRDO 4.05% 5/4/1998 LOC 1,700 1,700
Los Angeles CA Dept. of Water & Power Waterworks Rev. 9.00% 5/15/2002 + 9,135 10,699
Los Angeles CA Dept. of Water & Power Waterworks Rev. 9.00% 5/15/2003 5,355 6,456
Los Angeles County CA Public Works Auth. 5.00% 10/1/2004 3,640 3,759
Los Angeles County CA Public Works Auth. 6.00% 10/1/2003 13,010 14,016
Orange County CA Sanitation Dist. VRDO 4.10% 5/4/1998 LOC 3,900 3,900
San Joaquin Hills CA Transp. Corridor Agency Toll Road Rev. 0.00% 1/15/2000 (1) 2,000 1,866
San Joaquin Hills CA Transp. Corridor Agency Toll Road Rev. 0.00% 1/15/2001 (1) 10,000 8,921
Univ. of California Rev. (Multi Purpose Dist. Project) 10.00% 9/1/2000 (2) 7,755 8,762
Univ. of California Rev. (Multi Purpose Dist. Project) 10.00% 9/1/2001 (2) 5,500 6,471
-----------
108,884
-----------
COLORADO (0.2%)
Platte River Power Auth. CO Rev. 5.00% 6/1/2000 (1) 5,000 5,088
-----------
CONNECTICUT (2.9%)
Connecticut GO 5.30% 3/15/2004 10,000 10,461
Connecticut GO 5.50% 11/1/2001 13,630 14,208
Connecticut GO 6.25% 11/15/2002 (Prere.) 5,300 5,803
Connecticut GO 9.875% 3/1/2001 6,750 7,754
Connecticut Special Assessment Second Injury Fund Rev. 5.00% 1/1/2001 4,230 4,319
Connecticut Special Assessment Unemployment Compensation 5.50% 5/15/2001 (2) 13,455 13,953
Connecticut Special Tax Obligation Rev. (Transp. Infrastructure) 6.25% 10/1/2002 (3) 4,000 4,300
-----------
60,798
-----------
DELAWARE (0.4%)
Delaware GO 5.00% 4/1/2002 3,000 3,079
Delaware GO 5.00% 1/1/2002 5,085 5,215
Delaware Econ. Dev. Auth. VRDO (Hosp. Bill & Collection Service) 4.10% 5/6/1998 (5) 1,300 1,300
-----------
9,594
-----------
DISTRICT OF COLUMBIA (3.3%)
District of Columbia GO 4.90% 6/1/2000 20,000 20,105
District of Columbia GO 5.00% 6/1/2002 (1) 5,710 5,819
</TABLE>
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
District of Columbia GO 5.00% 6/1/2003 (1) $ 5,995 $ 6,110
District of Columbia GO 5.00% 6/1/2005 (1) 6,000 6,078
District of Columbia GO 5.50% 6/1/1998 9,000 9,008
District of Columbia GO 5.50% 6/1/1999 12,105 12,246
District of Columbia VRDO (George Washington Univ.) 4.70% 5/6/1998 10,200 10,200
-----------
69,566
-----------
FLORIDA (3.9%)
Dade County FL IDA VRDO (Florida Power & Light) 4.20% 5/4/1998 1,000 1,000
Dade County FL School Dist. GO 5.00% 2/15/2001 (1) 4,525 4,620
Florida Board of Educ. Rev. (Capital Outlay) 6.50% 6/1/2002 4,505 4,871
Florida Board of Educ. Rev. (Capital Outlay) 6.50% 6/1/2004 5,565 6,177
Florida Dept. of Transp. Rev. (Right-of-Way) 6.40% 7/1/2000 3,080 3,231
Florida Inland Protection Financing Corp. 5.00% 7/1/2003 (4) 5,000 5,137
Florida School Board Assoc. Rev. (Orange County) 7.00% 7/1/2000 (2) 13,820 14,649
Florida Turnpike Auth. Rev. 9.50% 7/1/1999 (2) 4,000 4,255
Hillsborough County FL School Dist. 6.95% 8/15/1999 (1) 5,425 5,635
Lakeland FL Electric & Water Rev. 6.25% 10/1/2002 (3) 5,000 5,385
Lee County FL School Board 6.00% 8/1/2002 (4) 2,750 2,923
Orange County FL Health Fac. Auth. Rev. 6.00% 10/1/2004 (1) 3,975 4,313
Tampa FL Health System Rev. (Catholic Health East) 5.00% 11/15/2001 (1) 4,000 4,092
Tampa FL Health System Rev. (Catholic Health East) 5.00% 11/15/2002 (1) 8,035 8,231
Tampa FL Health System Rev. (Catholic Health East) 5.25% 11/15/2003 (1) 2,500 2,596
Tampa FL Hillsborough County Expressway Auth. Rev. 6.50% 7/1/2003 (2) 4,770 5,244
-----------
82,359
-----------
GEORGIA (2.5%)
Cobb County GA School Dist. 5.00% 2/1/2000 8,040 8,179
Georgia GO 5.75% 3/1/2002 5,600 5,902
Georgia GO 7.20% 3/1/2002 3,000 3,311
Georgia GO 7.25% 7/1/2002 5,620 6,252
Georgia GO 7.25% 9/1/2002 8,160 9,111
Georgia GO 7.40% 8/1/2002 12,360 13,829
Georgia Muni. Gas Auth. VRDO 3.95% 5/6/1998 LOC 2,000 2,000
Metro. Atlanta GA Rapid Transp. Auth. 6.35% 7/1/2004 3,560 3,809
-----------
52,393
-----------
HAWAII (1.7%)
Hawaii GO 5.00% 9/1/1999 5,000 5,071
Hawaii GO 7.75% 2/1/2002 9,600 10,670
Honolulu HI City & County GO 4.60% 10/1/1999 6,500 6,560
Honolulu HI City & County GO 5.25% 11/1/2003 (3) 13,135 13,630
-----------
35,931
-----------
ILLINOIS (3.6%)
Chicago IL GO 6.25% 10/31/2002 (1) 4,250 4,568
Chicago IL Metro. Water Reclamation Dist. 4.70% 12/1/1999 7,710 7,806
Chicago School Finance Auth. GO 5.00% 6/1/2003 (3) 25,190 25,736
Illinois Dev. Financial Auth. PCR Rev. (Commonwealth Edison) 4.40% 12/1/2006 (2) 19,000 18,511
Illinois GO 6.40% 8/1/2001 5,365 5,618
Illinois Metro. Pier & Exposition Auth. 6.50% 6/15/2003 (Prere.) 4,140 4,604
Illinois Sales Tax Rev. 7.20% 6/15/1999 (Prere.) 7,600 8,025
-----------
74,868
-----------
IOWA (0.2%)
Davenport IA Hosp. Fac. Rev. (Mercy Hosp.) 6.625% 7/1/2002 (1)(Prere.) 4,040 4,451
-----------
KENTUCKY (0.6%)
Kentucky Property & Buildings Comm. Rev. 6.00% 11/1/2002 2,000 2,128
Kentucky Property & Buildings Comm. Rev. 6.75% 11/1/1999 9,500 9,889
-----------
12,017
-----------
LOUISIANA (2.2%)
East Baton Rouge LA PCR VRDO (Exxon Project) 4.20% 5/4/1998 3,340 3,340
Louisiana GO 5.50% 4/15/2002 (4)++ 6,160 6,407
</TABLE>
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
LIMITED-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Louisiana GO 6.00% 8/1/2000 (3) $ 5,000 $ 5,194
Louisiana GO 6.00% 8/1/2001 (3) 19,325 20,298
New Orleans LA GO 6.50% 10/1/2001 (2) 10,655 11,380
-----------
46,619
-----------
MAINE (0.2%)
Maine Health & Higher Educ. (Sebasticook Hosp.) 10.10% 7/1/2001 (Prere.) 4,350 5,167
-----------
MARYLAND (0.3%)
Maryland Dept. of Transp. 6.70% 8/15/1999 (Prere.) 5,000 5,263
-----------
MASSACHUSETTS (6.1%)
Massachusetts Bay Transit Auth. 5.00% 3/1/2003 5,000 5,132
Massachusetts Bay Transit Auth. 7.625% 3/1/2000 (Prere.) 5,550 6,002
Massachusetts Consolidated Loan GO 7.00% 12/1/2000 (Prere.) 5,000 5,352
Massachusetts GO 5.00% 4/1/2004 9,500 9,743
Massachusetts GO 6.25% 7/1/2002 12,500 13,401
Massachusetts GO 6.875% 7/1/2001 (Prere.) 17,400 19,050
Massachusetts GO 7.00% 7/1/1998 LOC 5,000 5,025
Massachusetts GO 7.50% 12/1/2000 (Prere.) 24,750 27,237
Massachusetts GO 9.25% 7/1/2000 10,000 11,058
Massachusetts Health and Educ. Fac. Auth. PUT
(Fairview Extended Care) 4.55% 7/14/2002 3,500 3,522
Massachusetts Water Resources Auth. 6.875% 12/1/2001 (Prere.) 9,945 10,979
Massachusetts Water Resources Auth. 7.00% 4/1/2000 (Prere.) 5,985 6,417
Massachusetts Water Resources Auth. 7.30% 4/1/2000 (Prere.) 5,000 5,389
-----------
128,307
-----------
MICHIGAN (7.3%)
Detroit MI GO 5.60% 5/1/2000 (2) 7,040 7,235
Detroit MI GO 5.70% 5/1/2001 (2) 5,000 5,195
Greater Detroit MI Resource Recovery Auth. 5.00% 12/13/2000 (2) 6,290 6,420
Greater Detroit MI Resource Recovery Auth. 5.50% 12/13/2001 (2) 5,000 5,194
Greater Detroit MI Resource Recovery Auth. 5.50% 12/13/2003 (2) 17,995 18,897
Greater Detroit MI Resource Recovery Auth. 5.50% 12/13/2004 (2) 12,990 13,703
Michigan GO (Environmental Protection Program) 6.00% 11/1/2002 4,845 5,181
Michigan GO (Recreation Program) 6.00% 11/1/2000 11,910 12,466
Michigan GO (Recreation Program) 6.00% 11/1/2001 5,910 6,259
Michigan Building Auth. Rev. 5.25% 10/15/2003 13,890 14,416
Michigan Building Auth. Rev. 5.25% 10/15/2004 19,885 20,701
Michigan Building Auth. Rev. 6.20% 10/1/2002 5,450 5,837
Michigan Building Auth. Rev. 6.30% 10/1/2003 (4) 7,800 8,397
Michigan Hosp. Finance Auth. (Genesys Regional Medical) 5.25% 10/1/2003 2,500 2,554
Michigan Hosp. Finance Auth. (Genesys Regional Medical) 5.50% 10/1/2005 6,655 6,867
Royal Oak MI Hosp. Fin. Auth. (William Beaumont Hosp.) 6.75% 1/1/2001 (Prere.) 12,450 13,459
-----------
152,781
-----------
MINNESOTA (1.1%)
Minneapolis MN Community Dev. Agency Tax Increment Rev.
(Capital Appreciation) 0.00% 9/1/2003 5,875 4,628
Minnesota GO 4.625% 8/1/2000 10,385 10,518
Minnesota GO 6.00% 8/1/2004 5,000 5,433
Minnesota Public Fac. Auth. Water PCR Rev. 5.00% 3/1/2002 2,620 2,688
-----------
23,267
-----------
MISSISSIPPI (0.2%)
Mississippi GO 5.00% 11/1/2004 4,425 4,574
-----------
MISSOURI (0.3%)
St. Louis County MO Regional Convention & Sports Complex Auth. 7.00% 8/15/2003 (Prere.) 5,050 5,663
-----------
NEBRASKA (0.2%)
Omaha NE Public Power Dist. Electric Rev. 5.00% 2/1/2001 4,250 4,336
-----------
</TABLE>
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEVADA (0.8%)
Clark County NV Airport Systems Refunding Rev. VRDO
(McCarren International Airport) 4.00% 5/6/1998 (1) $ 1,100 $ 1,100
Clark County NV School Dist. GO 9.75% 6/1/2001 (1) 10,000 11,529
Clark County NV School Dist. GO (Computer Equipment) 7.00% 6/15/1999 (3) 4,000 4,137
-----------
16,766
-----------
NEW JERSEY (1.2%)
New Jersey Transp. Trust Fund Auth. 6.00% 6/15/2000 12,655 13,130
New Jersey Turnpike Auth. 5.60% 1/1/2000 (2) 4,000 4,098
Passaic County NJ Util. Solid Waste Disposal Rev. 0.00% 3/1/2000 (1) 4,220 3,901
Passaic Valley NJ Sewer System Rev. 5.70% 12/1/2003 (2) 3,980 4,221
-----------
25,350
-----------
NEW MEXICO (1.0%)
New Mexico GO 5.50% 9/1/2000 6,350 6,554
New Mexico GO 5.50% 9/1/2001 4,475 4,651
New Mexico Severance Tax Rev. 5.00% 7/1/2002 9,600 9,824
-----------
21,029
-----------
NEW YORK (18.6%)
Hempstead NY Industrial Dev. Agency (American Fuel Co.) 4.40% 12/1/2001 (1) 6,810 6,822
Muni. Assistance Corp. for New York City NY 5.00% 7/1/2000 4,330 4,413
Muni. Assistance Corp. for New York City NY 5.00% 7/1/2003 7,200 7,391
Muni. Assistance Corp. for New York City NY 5.50% 7/1/2000 42,940 44,209
Muni. Assistance Corp. for New York City NY 5.50% 7/1/2002 5,500 5,736
Muni. Assistance Corp. for New York City NY 6.00% 7/1/2000 (2) 10,000 10,398
Muni. Assistance Corp. for New York City NY 6.00% 7/1/2005 10,370 11,261
Muni. Assistance Corp. for New York City NY VRDO 3.85% 5/6/1998 LOC 1,400 1,400
New York City NY Cultural Resources Center
(Museum of Modern Art) 5.00% 1/1/2000 (2) 7,250 7,368
New York City NY GO 5.00% 8/1/2003 (1) 4,400 4,510
New York City NY GO 5.25% 8/1/1999 9,875 10,023
New York City NY GO 5.50% 8/1/1998 10,410 10,449
New York City NY GO 5.50% 8/1/1998 (ETM) 4,590 4,608
New York City NY GO 7.50% 2/1/2002 (Prere.) 4,615 5,183
New York City NY GO 7.50% 8/1/2002 (Prere.) 4,440 5,038
New York City NY GO 7.625% 2/1/2002 (Prere.) 12,790 14,417
New York City NY GO 7.70% 2/1/2002 (Prere.) 3,350 3,785
New York City NY IDA (USTA National Tennis Center Project) 7.75% 11/15/2000 (4) 3,125 3,392
New York City NY IDA (USTA National Tennis Center Project) 7.75% 11/15/2001 (4) 4,380 4,867
New York City NY IDA (USTA National Tennis Center Project) 7.75% 11/15/2002 (4) 3,100 3,516
New York State COP 4.70% 2/1/1999 4,580 4,607
New York State Dormitory Auth. (Brookdale Hosp.) 5.00% 2/15/2002 5,445 5,514
New York State Dormitory Auth. (Bronx/Lebanon) 5.00% 2/15/2002 5,000 5,063
New York State Dormitory Auth. (City Univ.) 5.50% 7/1/1998 6,300 6,315
New York State Dormitory Auth. (City Univ.) 7.625% 7/1/2000 (Prere.) 6,200 6,766
New York State Dormitory Auth. (City Univ.) 7.875% 7/1/2000 (Prere.) 15,725 17,242
New York State Dormitory Auth. (City Univ.) 9.00% 7/1/2000 (3) 15,515 17,042
New York State Dormitory Auth. (Dept. of Health) 7.70% 7/1/2000 (Prere.) 6,790 7,421
New York State Dormitory Auth. (North General Hosp.) 5.00% 2/15/2002 4,710 4,770
New York State Dormitory Auth. (Presbyterian Hosp.) 5.50% 2/15/2002 (2) 4,000 4,146
New York State Dormitory Auth. (Presbyterian Hosp.) 5.50% 2/15/2003 (2) 8,620 8,982
New York State Dormitory Auth. (Presbyterian Hosp.) 5.50% 2/15/2004 (2) 4,500 4,711
New York State Dormitory Auth. (State Univ.) 7.70% 5/15/2000 (Prere.) 6,500 7,079
New York State Dormitory Auth. (Univ. of Rochester) 5.00% 7/1/2003 (1) 3,210 3,292
New York State Dormitory Auth. VRDO (Cornell Univ.) 4.10% 5/4/1998 1,200 1,200
New York State Environmental Fac. PCR
(New York City Water Fin. Auth.) 5.50% 6/15/2003 (1) 3,000 3,144
New York State Environmental Fac. (Riverbank State Park) 7.375% 4/1/2002 (Prere.) 6,800 7,662
New York State Housing Finance Agency 8.00% 11/1/2000 (Prere.) 4,140 4,593
New York State Housing Finance Agency Service Contract 7.80% 3/15/2001 (Prere.) 15,000 16,712
</TABLE>
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
LIMITED-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York State Local Govt. Assistance Corp. 6.25% 4/1/2002 (Prere.) $ 10,000 $ 10,873
New York State Local Govt. Assistance Corp. 7.00% 4/1/2001 (Prere.) 14,550 15,911
New York State Local Govt. Assistance Corp. 7.50% 4/1/2001 (Prere.) 10,000 11,072
New York State Medical Care Fac. Finance Agency Rev. 7.875% 8/15/2000 (Prere.) 8,000 8,798
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.00% 4/1/2005 (4) 8,930 9,134
New York State Thruway Auth. (Highway & Bridge Trust Fund) 6.00% 4/1/2002 (1) 11,965 12,651
New York State Urban Dev. Corp. (Correctional Fac.) 7.50% 1/1/2001 (Prere.) 7,100 7,816
Suffolk County NY Water Auth. Water System Rev. 5.25% 6/1/2004 (2)(Prere.) 10,000 10,465
-----------
391,767
-----------
NORTH CAROLINA (0.1%)
Charlotte NC Airport Refunding Rev. VRDO 4.00% 5/6/1998 (1) 500 500
North Carolina Educ. Fac. VRDO (Duke Univ.) 4.05% 6/1/1998 1,000 1,000
-----------
1,500
-----------
OHIO (1.9%)
Butler County OH Transp. Improvement Dist. 5.00% 4/1/2003 (4) 3,000 3,069
Cleveland OH School Dist. RAN 5.00% 6/1/2001 (2) 6,000 6,122
Cleveland OH Water Works Rev. 6.25% 1/1/2002 (2)(Prere.) 4,245 4,597
Columbus OH Sewer Rev. VRDO 4.10% 5/7/1998 1,700 1,700
Franklin County OH PUT (U.S. Health Corp.) 4.50% 6/1/2000 LOC 10,000 10,063
Ohio Public Fac. Comm. Higher Educ. Fac. 5.00% 11/1/1999 6,370 6,472
Ohio Public Fac. Comm. Higher Educ. Fac. 5.50% 12/1/1999 7,685 7,872
-----------
39,895
-----------
OKLAHOMA (1.5%)
Grand River Dam Auth. OK Rev. 4.90% 6/1/1998 17,500 17,514
Tulsa County OK Criminal Justice Auth. Sales Tax Rev. 5.25% 3/1/2001 (2) 6,525 6,649
Tulsa County OK Criminal Justice Auth. Sales Tax Rev. 5.25% 9/1/2001 (2) 6,960 7,113
-----------
31,276
-----------
PENNSYLVANIA (8.7%)
Delaware County PA IDA Rev. (Resource Recovery Fac.) 5.50% 1/1/1999 5,000 5,048
Pennsylvania Convention Center Auth. Refunding Rev. 5.75% 9/1/1999 8,700 8,802
Pennsylvania GO 5.00% 5/1/2000 2,710 2,760
Pennsylvania GO 5.00% 3/1/2003 6,250 6,412
Pennsylvania GO 5.25% 11/15/2001 (3) 10,000 10,336
Pennsylvania GO 5.375% 11/15/2003 (3) 2,000 2,096
Pennsylvania GO 5.40% 7/1/2000 4,000 4,112
Pennsylvania Higher Educ. Fac. Health Services
(Allegheny/Delaware Valley) 5.00% 11/15/2002 (1) 7,990 8,159
Pennsylvania Intergovernmental Cooperation Auth. 6.00% 6/15/2001 10,000 10,486
Pennsylvania Intergovernmental Cooperation Auth.
(Philadelphia Funding Program) 6.80% 6/15/2002 (Prere.) 5,050 5,516
Pennsylvania Turnpike Comm. Rev. 5.60% 12/1/2005 (3) 6,575 6,923
Pennsylvania Turnpike Comm. Rev. 7.50% 12/1/1999 (Prere.) 15,000 16,111
Philadelphia PA Airport Rev. 5.25% 6/15/2001 (3) 4,590 4,713
Philadelphia PA Gas Works 7.00% 7/1/2002 (8) 4,035 4,417
Philadelphia PA GO 6.00% 11/15/1999 (3) 8,505 8,764
Philadelphia PA GO 6.00% 11/15/2000 (3) 13,000 13,561
Philadelphia PA Hosp. Auth. Health Rev. (Jefferson Health System) 5.00% 5/15/2002 (2) 2,905 2,962
Philadelphia PA Hosp. Auth. Health Rev. (Jefferson Health System) 5.00% 5/15/2004 (2) 4,990 5,094
Philadelphia PA Hosp. Auth. Health Rev. (Jefferson Health System) 5.50% 5/15/2003 (2) 1,425 1,485
Philadelphia PA Muni. Lease Rev. 5.25% 7/15/1998 1,645 1,649
Philadelphia PA School Dist. GO 4.70% 7/1/1999 (2) 14,000 14,131
Philadelphia PA School Dist. GO 6.60% 7/1/1998 (2) 3,000 3,013
Philadelphia PA Water & Sewer 6.90% 10/1/1999 (Prere.) 24,150 25,616
Philadelphia PA Water & Waste Water Rev. 6.25% 8/1/2002 (1) 5,450 5,826
Pittsburgh PA GO 5.00% 3/1/2003 (1) 5,000 5,112
-----------
183,104
-----------
PUERTO RICO (1.3%)
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2003 (4) 6,000 6,190
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2004 (1) 4,995 5,158
</TABLE>
20
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2004 (4) $ 5,285 $ 5,457
Puerto Rico GO 5.50% 7/1/1999 10,000 10,177
-----------
26,982
-----------
RHODE ISLAND (1.1%)
Rhode Island Consolidated Capital Dev. Loan GO 6.00% 8/1/2003 (1) 9,665 10,364
Rhode Island Consolidated Capital Dev. Loan GO 6.00% 8/1/2004 (1) 11,345 12,269
-----------
22,633
-----------
SOUTH CAROLINA (0.7%)
South Carolina GO 5.10% 2/1/2004 3,940 4,091
South Carolina Public Service Auth. Rev. (Santee Cooper) 6.50% 7/1/2002 (Prere.) 8,900 9,785
-----------
13,876
-----------
TEXAS (7.3%)
Austin TX Combined Util. System Rev. 9.50% 5/15/2000 (Prere.) 5,705 6,302
Austin TX Combined Util. System Rev. 10.00% 5/15/2000 (Prere.) 5,000 5,570
Austin TX Public Improvement GO 5.25% 9/1/2004 2,465 2,574
Fort Worth TX Water & Sewer Rev. 5.90% 2/15/2001 2,900 3,025
Gulf Coast TX Waste Disposal Auth. PCR VRDO (Amoco Oil Project) 4.20% 5/4/1998 700 700
Harris County TX Flood Control Dist. GO 5.50% 10/1/2000 3,000 3,098
Harris County TX GO 5.50% 10/1/2000 2,645 2,732
Harris County TX Health Fac. Dev. Corp. (Memorial Hosp.) 5.00% 6/1/2000 (1) 3,025 3,072
Harris County TX Health Fac. Dev. Corp. (Memorial Hosp.) 5.00% 6/1/2001 (1) 5,835 5,942
Harris County TX Toll Road Refunding GO 6.50% 8/15/2002 (2)(Prere.) 5,220 5,745
Harris County TX Toll Road VRDO 4.20% 5/6/1998 100 100
Houston TX GO 5.00% 3/1/2003 13,000 13,320
Houston TX GO 5.50% 3/1/2004 8,620 9,062
Houston TX GO 5.90% 3/1/2003 3,475 3,653
Houston TX Hotel Occupancy Tax Rev. 6.00% 7/1/2000 (4) 4,250 4,408
Houston TX Hotel Occupancy Tax Rev. 6.00% 7/1/2001 (4) 4,000 4,196
Houston TX Hotel Occupancy Tax Rev. 6.00% 7/1/2002 (4) 2,250 2,381
Houston TX Independent School Dist. 6.40% 8/15/2001 (Prere.) 4,095 4,364
Houston TX Water & Sewer System Rev. 0.00% 12/1/2000 (2) 6,130 5,489
Houston TX Water & Sewer System Rev. 5.40% 12/1/2000 8,000 8,233
Lewisville TX Independent School Dist. 6.55% 5/15/2003 (ETM) 5,000 5,505
Lower Colorado River Auth. TX 5.50% 1/1/2001 17,730 18,269
San Antonio TX Electric & Gas Rev. 7.00% 2/1/2000 1,695 1,756
San Antonio TX GO 5.40% 8/1/2004 7,495 7,765
San Antonio TX Independent School Dist. 6.00% 8/14/2004 4,165 4,511
Texas GO 5.375% 10/1/2000 5,000 5,151
Texas Muni. Power Agency Rev. 5.80% 9/1/2003 (1) 6,750 7,184
Univ. of Texas Permanent Univ. Fund 6.50% 7/1/2001 (Prere.) 4,285 4,644
Univ. of Texas Permanent Univ. Fund 9.50% 7/1/2000 3,545 3,939
-----------
152,690
-----------
UTAH (0.2%)
Utah Water Finance Agency Rev. (Pooled Loan Financing Program) 4.70% 10/1/2001 (1) 5,000 5,062
-----------
VIRGINIA (1.6%)
Virginia Port Auth. Rev. 4.75% 7/1/2004 8,210 8,297
Virginia Public School Auth. 5.00% 8/1/2000 6,345 6,476
Virginia Public School Auth. 5.00% 8/1/2002 12,415 12,714
Virginia Public School Auth. 5.00% 8/1/2003 6,200 6,367
-----------
33,854
-----------
WASHINGTON (3.3%)
King County WA School Dist. 6.30% 12/1/2003 5,375 5,815
Washington GO 6.10% 9/1/2000 5,000 5,224
Washington GO 6.30% 9/1/2002 4,700 5,022
Washington GO 6.50% 7/1/2002 5,035 5,443
Washington GO 6.75% 6/1/2001 (Prere.) 20,000 21,441
Washington GO 7.00% 10/1/1999 7,555 7,877
Washington GO 7.00% 8/1/2002 4,000 4,404
Washington GO VRDO 4.05% 5/6/1998 1,845 1,845
</TABLE>
21
<PAGE> 61
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
LIMITED-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington Health Care Fac. Auth. (Sisters of Providence) 6.00% 10/1/2000 (2) $ 3,030 $ 3,155
Washington Health Care Fac. Auth. (Sisters of Providence) 6.00% 10/1/2001 (2) 4,735 4,981
Washington Motor Vehicle Fuel Tax GO 5.30% 9/1/1999 5,000 5,093
-----------
70,300
-----------
WEST VIRGINIA (0.4%)
West Virginia State Building Comm. Rev. 5.50% 7/1/1999 (1) 2,500 2,546
West Virginia State Building Comm. Rev. 5.50% 7/1/2000 (1) 5,500 5,651
-----------
8,197
-----------
WISCONSIN (2.1%)
Wisconsin GO 5.80% 5/1/2001 4,000 4,176
Wisconsin GO 6.00% 5/1/2003 14,055 15,055
Wisconsin Public Power System Rev. 7.30% 7/1/2000 (3)(Prere.) 4,000 4,336
Wisconsin Public Power System Rev. 7.40% 7/1/2000 (2)(Prere.) 19,500 21,178
-----------
44,745
-----------
WYOMING (0.3%)
Platte County WY PCR (Basin Electric Power Corp.) 4.20% 1/1/1999 3,370 3,378
Platte County WY PCR (Basin Electric Power Corp.) 4.40% 1/1/2000 3,945 3,960
-----------
7,338
-----------
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $2,063,639) 2,079,726
- ---------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.1%)
- ---------------------------------------------------------------------------------------------------------------------------
Other Assets--Note B 82,175
Liabilities (60,000)
-----------
22,175
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- ---------------------------------------------------------------------------------------------------------------------------
Applicable to 196,350,175 outstanding $.001 par value shares
(authorized 350,000,000 shares) $2,101,901
===========================================================================================================================
NET ASSET VALUE PER SHARE $10.70
===========================================================================================================================
</TABLE>
*See Note A in Notes to Financial Statements.
+Securities with an aggregate value of $2,447,000 have been segregated
as initial margin for open futures contracts. For key to abbreviations
and other references, see page 59.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1998, NET ASSETS CONSISTED OF:
- ---------------------------------------------------------------------------------------------------------------------------
AMOUNT PER
(000) SHARE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paid in Capital $2,086,857 $10.63
Undistributed Net Investment Income -- --
Accumulated Net Realized Losses (1,233) (.01)
Unrealized Appreciation--Note F
Investment Securities 16,087 .08
Futures Contracts 190 --
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS $2,101,901 $10.70
===========================================================================================================================
</TABLE>
22
<PAGE> 62
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (99.9%)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALABAMA (0.4%)
Columbia AL Ind. Dev. Board PCR VRDO
(Alabama Power Co. Project) 4.15% 5/4/1998 $ 3,000 $ 3,000
Huntsville AL Health Care Auth. Rev. 4.65% 6/1/2005 (1) 22,000 22,065
Univ. of Southern Alabama Hosp. 7.00% 5/15/2004 (2) 3,250 3,431
-----------
28,496
-----------
ALASKA (0.3%)
Alaska Housing Finance Corp. VRDO 4.20% 5/6/1998 13,000 13,000
Anchorage AK Electric Rev. 8.00% 12/1/2011 (1) 5,395 7,027
-----------
20,027
-----------
ARIZONA (1.6%)
Arizona Transp. Board Excise Tax Rev. 6.00% 7/1/2005 (2) 18,885 20,554
Arizona Transp. Board Highway Rev. 8.75% 7/1/2003 10,000 11,982
Maricopa County AZ COP 6.00% 6/1/2004 5,275 5,463
Maricopa County AZ GO 6.25% 7/1/2002 (3) 5,100 5,469
Maricopa County AZ PCR VRDO (Arizona Public Service Palo Verde) 4.20% 5/4/1998 LOC 3,100 3,100
Maricopa County AZ PCR VRDO (Arizona Public Service Palo Verde) 4.20% 5/4/1998 LOC 11,200 11,200
Maricopa County AZ (Samaritan Health Service) 7.15% 12/1/2004 (1) 9,900 11,349
Maricopa County AZ (Samaritan Health Service) 7.15% 12/1/2005 (1) 6,080 6,882
Mesa AZ GO 5.70% 7/1/2008 (1) 5,600 6,005
Phoenix AZ Civic Improvement Water System 5.95% 7/1/2016 6,600 6,980
Phoenix AZ Highway Rev. 9.25% 7/1/2007 4,000 5,396
Scottsdale AZ IDA Rev. VRDO (Scottsdale Memorial Health Systems) 4.00% 5/6/1998 (2) 700 700
Tucson AZ Unified School Dist. 7.50% 7/1/2006 (3) 8,840 10,549
Tucson AZ Unified School Dist. 7.50% 7/1/2007 (3) 9,125 11,025
-----------
116,654
-----------
CALIFORNIA (9.7%)
Anaheim CA Public Finance Auth. Rev. 6.00% 9/1/2008 (4) 2,000 2,214
Anaheim CA Public Finance Auth. Rev. 6.00% 9/1/2009 (4) 2,000 2,223
California Dept. of Water (Central Valley Project) 8.25% 12/1/2003 5,000 5,954
California Dept. of Water (Central Valley Project) 8.25% 12/1/2004 5,545 6,742
California GO 5.70% 8/1/2007 17,500 18,598
California GO 5.75% 8/1/2008 (3) 15,000 16,127
California GO 6.40% 2/1/2006 (1) 4,500 5,041
California GO 6.75% 6/1/2004 13,165 14,786
California GO 7.00% 10/1/2005 (1) 5,000 5,777
California GO 7.10% 6/1/2005 12,495 14,412
California GO 11.00% 3/1/2006 13,185 18,619
California Health Fac. Finance Auth. (Catholic Healthcare West) 6.25% 7/1/2004 (1) 4,515 4,964
California Health Fac. Finance Auth. (Catholic Healthcare West) 6.25% 7/1/2005 (1) 5,875 6,502
California Health Fac. Finance Auth. (Catholic Healthcare West) 6.25% 7/1/2006 (1) 5,000 5,560
California Health Fac. Finance Auth. (Catholic Healthcare West) 6.25% 7/1/2007 (1) 5,290 5,916
California Health Fac. Finance Auth. (Sisters of Providence) 6.00% 10/1/2002 3,865 4,114
California Health Fac. Finance Auth. (Sisters of Providence) 6.00% 10/1/2003 4,095 4,400
California Health Fac. Finance Auth. (Sisters of Providence) 6.00% 10/1/2004 4,340 4,702
California Health Fac. Finance Auth. VRDO
(Catholic Healthcare West) 3.85% 5/6/1998 (1) 6,000 6,000
California Health Fac. Finance Auth. VRDO (Kaiser Permanente) 4.15% 5/6/1998 600 600
California Higher Educ. Loan Auth. Student Loan Rev. VRDO 4.05% 5/6/1998 LOC 1,500 1,500
California Financing Auth. Rev. PCR VRDO
(Pacific Gas & Electric Project) 4.05% 5/4/1998 LOC 1,400 1,400
California Financing Auth. Rev. PCR VRDO
(Pacific Gas & Electric Project) 4.10% 5/4/1998 24,570 24,570
California Financing Auth. Rev. PCR VRDO
(Pacific Gas & Electric Project) 4.10% 5/4/1998 LOC 400 400
California Public Works Board (Community College) 5.625% 3/1/2016 (2) 20,000 20,787
California Public Works Board (Dept. of Corrections) 5.375% 11/1/2011 6,500 6,687
California Public Works Board (Dept. of Corrections) 5.375% 11/1/2012 7,990 8,154
California Public Works Board (Dept. of Corrections) 5.50% 1/1/2015 (1) 10,000 10,248
</TABLE>
23
<PAGE> 63
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California Public Works Board (Dept. of Corrections) 6.00% 1/1/2008 (2) $ 14,865 $ 16,325
California Public Works Board (State Archives) 5.375% 12/1/2009 4,555 4,766
California Public Works Board (State Archives) 5.375% 12/1/2010 6,635 6,887
California Public Works Board (State Archives) 5.375% 12/1/2012 7,895 8,058
California Public Works Board (Univ. of California) 6.10% 12/1/2005 (2) 6,515 7,063
California Public Works Board (Univ. of California) 6.20% 12/1/2006 (2) 3,320 3,613
California Public Works Board (Various Univ. Projects) 5.375% 12/1/2019 (2) 8,900 8,911
Clovis CA Unified School Dist. GO 0.00% 8/1/2000 7,000 6,387
Clovis CA Unified School Dist. GO 0.00% 8/1/2001 11,180 9,748
Contra Costa CA COP 5.50% 11/1/2011 (1) 5,660 5,925
Fresno CA Sewer Rev. 6.25% 9/1/2014 (2) 12,000 13,631
Irvine CA Assessment Dist. VRDO 3.85% 5/6/1998 LOC 9,300 9,300
Irvine CA Ranch Dist. VRDO 4.05% 5/4/1998 LOC 500 500
Irvine CA Unified School Dist. GO 5.50% 11/1/2013 (2) 4,565 4,739
Long Beach CA Financing Auth. Rev. 6.00% 11/1/2007 (2) 3,070 3,400
Long Beach CA Harbor Rev. 7.10% 5/15/1999 2,900 2,997
Los Angeles CA COP 7.50% 6/1/1998 (Prere.) 3,950 4,041
Los Angeles CA COP 7.60% 6/1/1998 (Prere.) 3,995 4,087
Los Angeles County CA Transp. Auth. Sales Tax Rev. 8.00% 7/1/2001 (2) 6,365 7,069
Los Angeles County CA Transp. Auth. Sales Tax Rev. 8.00% 7/1/2002 (2) 3,915 4,456
Los Angeles County CA Transp. Comm. Sales Tax Rev. 6.50% 7/1/2010 (4) 51,070 58,845
Metro. Water Dist. of Southern California 7.75% 7/1/2001 (Prere.) 9,380 10,519
Northern California Power Agency (Hydroelectric Project) 6.10% 7/1/2005 (1) 5,575 6,120
Northern California Power Agency (Hydroelectric Project) 6.20% 7/1/2006 (1) 5,940 6,606
Northern California Power Agency (Hydroelectric Project) 6.25% 7/1/2007 (1) 6,685 7,507
Oakland CA Redev. Agency (Central Dist. Project) 5.75% 2/1/2004 (2) 1,535 1,641
Oakland CA Redev. Agency (Central Dist. Project) 5.90% 2/1/2005 (2) 4,870 5,267
Oakland CA Redev. Agency (Central Dist. Project) 6.00% 2/1/2007 (1) 3,360 3,698
Orange County CA Local Transp. Auth. Sales Tax Rev. 5.50% 2/15/2009 (1) 5,000 5,313
Orange County CA Local Transp. Auth. Sales Tax Rev. 5.50% 2/15/2010 (1) 10,035 10,633
Orange County CA Sanitation Dist. VRDO 4.10% 5/4/1998 LOC 6,300 6,300
San Bernardino CA Medical Center COP 5.50% 8/1/2004 (1) 7,150 7,563
San Bernardino CA Medical Center COP 5.50% 8/1/2005 (1) 10,000 10,593
San Bernardino CA Medical Center COP 5.50% 8/1/2006 (1) 8,500 9,002
San Bernardino CA Medical Center COP 5.75% 8/1/2006 (1) 3,300 3,572
San Bernardino CA Medical Center COP 5.75% 8/1/2007 (1) 3,420 3,719
San Bernardino CA Medical Center COP 6.75% 8/1/2010 11,385 12,472
San Bernardino CA Medical Center COP 7.00% 8/1/2008 (1) 9,045 10,721
San Bernardino CA Medical Center COP 7.00% 8/1/2009 (1) 9,705 11,600
San Bernardino CA Medical Center COP 7.00% 8/1/2010 (1) 10,525 12,628
San Diego CA Local Govt. COP TRAN 4.50% 10/1/1998 20,000 20,056
San Diego County CA Regional Transp. Auth. Sales Tax Rev. 5.00% 4/1/2007 (3) 12,730 13,117
San Diego County CA Regional Transp. Auth. Sales Tax Rev. 7.00% 4/1/2001 (Prere.) 3,220 3,526
San Diego County CA Regional Transp. Auth. Sales Tax Rev. 7.00% 4/1/2006 1,780 2,010
San Diego County CA Water Rev. COP 5.40% 5/1/2003 5,000 5,243
San Diego County CA Water Rev. COP 5.50% 5/1/2005 4,245 4,503
San Joaquin Hills CA Toll Rev. 0.00% 1/15/2004 25,000 19,381
San Joaquin Hills CA Toll Rev. 0.00% 1/15/2005 25,000 18,414
San Joaquin Hills CA Toll Rev. 0.00% 1/15/2006 16,000 11,218
Santa Margarita/Dana Point CA Water Dist. Rev. 5.50% 8/1/2011 (2) 4,785 5,005
Santa Margarita/Dana Point CA Water Dist. Rev. 5.50% 8/1/2012 (2) 3,315 3,439
South Orange County CA Public Finance Auth. 7.00% 9/1/2006 (1) 500 581
Southern California Public Power Auth. 6.75% 7/1/1999 6,190 6,393
Southern California Rapid Transit Dist. Rev. 5.70% 9/1/2004 (2) 14,040 15,055
Univ. of California Rev. (Multi Purpose Project) 10.00% 9/1/2003 (2) 3,790 4,783
-----------
695,943
-----------
COLORADO (0.9%)
Colorado Health Fac. Auth. (Sisters of Charity Health System Inc.) 5.25% 12/1/2009 (1) 2,965 3,061
Colorado Health Fac. Auth. (Sisters of Charity Health System Inc.) 5.25% 12/1/2010 (1) 1,740 1,783
Colorado Health Fac. Auth. (Sisters of Charity Health System Inc.) 5.25% 12/1/2011 (1) 3,415 3,469
</TABLE>
24
<PAGE> 64
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado Health Fac. Auth. (Sisters of Charity Health System Inc.) 5.25% 12/1/2012 (1) $ 2,250 $ 2,267
Colorado Health Fac. Auth. (Sisters of Charity Health System Inc.) 8.50% 5/15/2004 (1) 17,500 21,162
Denver CO City & County School Dist. 6.95% 12/15/1999 (3)(Prere.) 4,390 4,643
Denver CO City & County School Dist. 6.95% 12/15/2000 (3) 4,860 5,122
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2011 (1) 8,000 4,045
E-470 Public Highway Auth. CO Rev. 4.80% 9/1/2009 (1) 6,095 6,094
E-470 Public Highway Auth. CO Rev. 4.90% 9/1/2010 (1) 5,000 5,005
E-470 Public Highway Auth. CO Rev. 5.00% 9/1/2011 (1) 7,250 7,256
-----------
63,907
-----------
CONNECTICUT (2.1%)
Connecticut GO 5.30% 11/15/2006 16,940 17,854
Connecticut GO 5.40% 11/15/2007 24,010 25,206
Connecticut GO 6.00% 5/15/2003 5,000 5,367
Connecticut GO 6.00% 10/1/2004 5,660 6,158
Connecticut GO 7.00% 3/15/2003 5,000 5,570
Connecticut Resource Recovery Auth. (Bridgeport Resco) 8.40% 1/1/1999 4,950 5,018
Connecticut Special Tax Obligation Rev. (Transp. Infrastructure) 5.125% 9/1/2005 11,575 11,978
Connecticut Special Tax Obligation Rev. (Transp. Infrastructure) 5.25% 9/1/2006 42,550 44,226
Connecticut Special Tax Obligation Rev. (Transp. Infrastructure) 7.125% 6/1/2010 12,000 14,523
Connecticut Special Tax Obligation Rev. (Transp. Infrastructure) 7.75% 6/1/2000 11,300 12,110
South Central CT Regional Water Auth. Water System Rev. 5.75% 8/1/2006 3,000 3,205
-----------
151,215
-----------
DELAWARE (0.3%)
Delaware Transp. Auth. Rev. 5.625% 7/1/2006 (1) 11,420 12,029
Delaware Transp. Auth. Rev. 5.80% 7/1/2008 4,950 5,274
Delaware Transp. Auth. Rev. 5.80% 7/1/2008 (Prere.) 2,595 2,780
-----------
20,083
-----------
DISTRICT OF COLUMBIA (3.0%)
District of Columbia GO 5.20% 6/1/2008 (2) 4,390 4,473
District of Columbia GO 5.30% 6/1/2009 (2) 4,600 4,708
District of Columbia GO 5.375% 6/1/2011 5,255 5,332
District of Columbia GO 5.50% 6/1/1998 20,000 20,018
District of Columbia GO 5.50% 6/1/2006 (4) 6,205 6,468
District of Columbia GO 5.50% 6/1/2013 5,750 5,831
District of Columbia GO 5.75% 6/1/2007 (2) 5,050 5,326
District of Columbia GO 5.75% 6/1/2010 (1) 23,590 25,135
District of Columbia GO 5.80% 6/1/2004 (3) 13,000 13,791
District of Columbia GO 6.00% 6/1/2008 (1) 8,890 9,609
District of Columbia GO 6.10% 6/1/2011 (1) 7,000 7,634
District of Columbia GO 6.30% 6/1/2005 (1) 5,000 5,391
District of Columbia GO 6.30% 6/1/2008 (1) 15,000 16,173
District of Columbia GO 7.50% 6/1/1999 (2)(Prere.) 17,875 18,903
District of Columbia Hosp. Rev. (Medlantic Health Group) 6.00% 8/15/2007 (1) 2,985 3,246
District of Columbia Hosp. Rev. (Medlantic Health Group) 6.00% 8/15/2008 (1) 3,160 3,462
District of Columbia Hosp. Rev. (Medlantic Health Group) 6.00% 8/15/2010 (1) 2,555 2,800
District of Columbia Hosp. Rev. (Medlantic Health Group) 6.00% 8/15/2012 (1) 2,995 3,276
District of Columbia TRAN VRDO 4.10% 5/6/1998 LOC 51,500 51,500
-----------
213,076
-----------
FLORIDA (4.4%)
Broward County FL School Board COP 5.75% 7/1/2003 (2) 9,000 9,556
Broward County FL School Board COP 5.75% 7/1/2004 (2) 9,515 10,175
Broward County FL School Board COP 5.75% 7/1/2005 (2) 5,445 5,841
Broward County FL School Dist. GO 5.40% 2/15/2005 5,000 5,251
Broward County FL School Dist. GO 5.50% 2/15/2006 10,080 10,615
Dade County FL Sales Tax Rev. 6.00% 10/1/2002 (2) 5,000 5,331
Dade County FL School Board COP 5.375% 5/1/2010 (2) 4,775 4,982
Dade County FL School Dist. GO 6.25% 2/15/2004 (1) 5,520 6,025
Dade County FL Water & Sewer Rev. VRDO 4.00% 5/6/1998 (3) 9,103 9,103
Florida Board of Educ. (Capital Outlay Rev.) 0.00% 6/1/2000 (Prere.) 15,000 4,805
Florida Board of Educ. (Capital Outlay Rev.) 4.90% 6/1/2008 6,905 7,012
</TABLE>
25
<PAGE> 65
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida Board of Educ. (Capital Outlay Rev.) 5.00% 6/1/2009 $ 3,620 $ 3,685
Florida Board of Educ. (Capital Outlay Rev.) 5.25% 6/1/2005 4,815 5,026
Florida Board of Educ. (Capital Outlay Rev.) 5.25% 1/1/2009 15,065 15,727
Florida Board of Educ. (Capital Outlay Rev.) 5.25% 1/1/2010 15,775 16,348
Florida Board of Educ. (Capital Outlay Rev.) 5.50% 6/1/2004 5,095 5,386
Florida Board of Educ. (Capital Outlay Rev.) 6.50% 6/1/2005 5,000 5,594
Florida Dept. of General Services Rev.
(Dept. of Environmental Protection Preservation-2000) 5.00% 7/1/2011 (2) 6,575 6,616
Florida Dept. of General Services Rev.
(Dept. of Environmental Protection Preservation-2000) 5.125% 7/1/2009 (2) 5,325 5,493
Florida Dept. of General Services Rev.
(Dept. of Environmental Protection Preservation-2000) 5.625% 7/1/2008 (2) 5,000 5,324
Florida Dept. of General Services Rev.
(Dept. of Environmental Protection Preservation-2000) 6.00% 7/1/2006 (2) 18,560 20,351
Florida School Board Assn. Rev. (Orange County) 6.90% 7/1/1999 (2) 12,450 12,886
Florida Turnpike Auth. Rev. 5.25% 7/1/2009 (3) 6,000 6,236
Florida Turnpike Auth. Rev. 5.25% 7/1/2010 (3) 6,000 6,189
Florida Turnpike Auth. Rev. 5.25% 7/1/2011 (3) 7,185 7,349
Florida Turnpike Auth. Rev. 5.25% 7/1/2012 (3) 7,560 7,668
Florida Turnpike Auth. Rev. 5.25% 7/1/2013 (3) 7,755 7,813
Gulf Breeze FL Local Govt. Loan Program VRDO 4.10% 5/7/1998 (3) 2,725 2,725
Hillsborough County FL IDA PCR VRDO (Tampa Electric Co.) 4.00% 5/4/1998 8,450 8,450
Hillsborough County FL School Dist. GO 7.10% 8/15/2003 23,665 25,639
Lakeland FL Electric & Water Rev. 6.25% 10/1/2003 (3) 6,465 7,046
Lakeland FL Electric & Water Rev. 6.50% 10/1/2006 (3) 5,300 6,008
Lee County FL School Board 6.00% 8/1/2005 (4) 4,175 4,542
Palm Beach County FL School Board 6.00% 8/1/2005 (2) 6,115 6,669
Palm Beach County FL School Board 6.00% 8/1/2006 (2) 6,480 7,111
Palm Beach County FL Solid Waste Auth. Rev. 5.25% 10/1/2003 (2) 9,000 9,383
Palm Beach County FL Solid Waste Auth. Rev. 5.50% 10/1/2006 (2) 13,910 14,815
St. Lucie County FL PCR VRDO (Florida Power & Light Co.) 4.00% 5/4/1998 300 300
Tampa FL Rev. (Catholic Health System) 5.25% 11/15/2011 (2) 3,000 3,061
-----------
312,136
-----------
GEORGIA (2.8%)
Burke County GA Dev. Auth. PCR VRDO (Georgia Power Corp.) 4.25% 5/4/1998 1,130 1,130
DeKalb County GA GO 5.60% 1/1/2005 3,040 3,207
Fulton County GA School Dist. GO 6.375% 5/1/2010 15,000 17,211
Georgia GO 6.30% 4/1/2002 3,820 4,104
Georgia GO 6.30% 3/1/2007 15,000 16,891
Georgia GO 6.50% 8/1/2001 3,230 3,458
Georgia GO 6.50% 12/1/2003 5,000 5,544
Georgia GO 6.50% 7/1/2005 5,000 5,623
Georgia GO 6.75% 9/1/2010 8,000 9,480
Georgia GO 6.80% 8/1/2002 8,000 8,784
Georgia GO 7.00% 11/1/2004 5,000 5,737
Georgia GO 7.00% 11/1/2005 15,670 18,174
Georgia GO 7.00% 11/1/2006 16,780 19,691
Georgia GO 7.00% 11/1/2007 17,960 21,294
Georgia GO 7.10% 9/1/2009 3,400 4,124
Georgia GO 7.25% 9/1/2005 3,630 4,254
Georgia GO 7.25% 9/1/2006 7,860 9,333
Georgia GO 7.40% 8/1/2007 11,200 13,561
Monroe County GA Dev. Auth. (Oglethorpe Power Corp.) 6.65% 1/1/2008 9,220 10,450
Muni. Electric Auth. of Georgia Rev. 6.30% 1/1/2005 12,775 13,963
Muni. Gas Auth. of Georgia Rev. 3.95% 5/6/1998 LOC 1,500 1,500
-----------
197,513
-----------
HAWAII (2.1%)
Hawaii Airport System Rev. 5.40% 7/1/2002 (1) 7,855 8,136
Hawaii Airport System Rev. 5.85% 7/1/2002 (1) 7,830 8,241
Hawaii Airport System Rev. 5.95% 7/1/2003 (1) 2,590 2,760
</TABLE>
26
<PAGE> 66
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hawaii Airport System Rev. 6.05% 7/1/2004 (1) $ 3,145 $ 3,394
Hawaii Airport System Rev. 6.15% 7/1/2005 (1) 10,735 11,682
Hawaii Airport System Rev. 6.25% 7/1/2006 5,000 5,464
Hawaii GO 5.00% 2/1/2004 10,000 10,215
Hawaii GO 5.00% 2/1/2005 6,650 6,775
Hawaii GO 5.125% 2/1/2006 11,605 11,846
Hawaii GO 5.50% 7/1/2001 6,500 6,721
Hawaii GO 6.40% 3/1/2007 5,555 6,244
Honolulu HI City & County GO 5.50% 11/1/2008 (3) 7,130 7,556
Honolulu HI City & County GO 5.75% 1/1/2006 8,825 9,415
Honolulu HI City & County GO 6.00% 1/1/2008 5,000 5,451
Honolulu HI City & County GO 6.30% 3/1/2010 4,830 5,240
Honolulu HI City & County GO 8.00% 10/1/2009 30,560 39,172
---------
148,312
---------
ILLINOIS (4.3%)
Chicago IL Metro. Sanitation Dist. 8.75% 1/1/2000 (Prere.) 2,980 3,206
Chicago IL Metro. Water Reclamation Dist. 5.85% 12/1/2003 6,355 6,805
Chicago IL Metro. Water Reclamation Dist. 5.90% 12/1/2006 4,450 4,851
Chicago IL Metro. Water Reclamation Dist. 5.95% 12/1/2007 7,200 7,882
Chicago IL Metro. Water Reclamation Dist. 6.00% 12/1/2008 9,900 10,911
Chicago IL Metro. Water Reclamation Dist. 6.05% 12/1/2009 3,000 3,333
Chicago IL Metro. Water Reclamation Dist. 6.10% 12/1/2006 5,300 5,797
Chicago IL Metro. Water Reclamation Dist. 6.25% 12/1/2008 15,000 16,630
Chicago IL School Finance Auth. 5.10% 6/1/2004 (3) 26,155 26,897
Chicago IL School Finance Auth. 5.20% 6/1/2005 (3) 3,000 3,097
Chicago IL School Finance Auth. 5.375% 6/1/2008 (3) 9,500 9,863
Chicago IL School Finance Auth. 6.00% 6/1/2001 (3) 8,305 8,696
Chicago IL School Finance Auth. 6.10% 6/1/2002 (3) 11,945 12,669
Chicago IL Water Rev. 5.50% 11/1/2003 (2) 5,000 5,246
Cook County IL GO 5.75% 11/15/2003 (3) 5,000 5,329
Cook County IL GO 5.80% 11/15/2004 10,000 10,752
Cook County IL GO 6.60% 11/1/2003 (2) 4,785 5,232
Cook County IL GO 6.75% 11/1/2001 (2) 3,000 3,295
Illinois Dev. Finance. Auth. PCR 4.40% 12/1/2006 (2) 45,400 44,233
Illinois GO 6.25% 10/1/2005 6,000 6,493
Illinois Health Fac. Auth. (Lutheran General Health Systems) 7.25% 4/1/1999 (Prere.) 745 770
Illinois Health Fac. Auth. (Lutheran General Health Systems) 7.25% 4/1/2000 3,995 4,163
Illinois Health Fac. Auth. VRDO (Univ. of Chicago Hosp. Project) 4.05% 5/6/1998 (1) 700 700
Illinois Metro. Pier & Exposition Auth. Rev. 6.50% 6/1/2006 (2) 11,885 13,369
Illinois Metro. Pier & Exposition Auth. Rev. 6.75% 6/1/2010 (2) 25,000 29,129
Illinois Metro. Pier & Exposition Auth. Rev. 7.25% 6/15/2005 (2) 15,000 17,386
Illinois Regional Transp. Auth. 9.00% 6/1/2005 (2) 5,220 6,588
Illinois Regional Transp. Auth. 9.00% 6/1/2008 (2) 6,840 9,108
Illinois Regional Transp. Auth. 9.00% 6/1/2009 (2) 4,255 5,759
Illinois Sales Tax Rev. 6.50% 6/15/2013 5,000 5,777
Illinois Toll Highway Auth. VRDO 4.00% 5/6/1998 (1) LOC 16,300 16,300
---------
310,266
---------
INDIANA (0.9%)
East Chicago IN School Building Corp. 11.75% 2/1/1999 (Prere.) 4,730 4,983
Indiana Health Fac. Auth. Hosp. Rev. VRDO (Charity Obligated
Group-Daughters of Charity National Health System) 3.95% 5/6/1998 9,900 9,900
Indiana Muni. Power Agency 5.875% 1/1/2010 (1) 4,500 4,915
Indiana Office Building Comm. Rev. 6.65% 7/1/2001 4,500 4,778
Indiana Office Building Comm. Rev. 6.70% 7/1/2002 5,290 5,637
Indiana Univ. Student Fee Bonds 6.80% 8/1/2004 25,000 27,240
Indiana Univ. Student Fee Bonds 7.00% 8/1/2006 5,845 6,312
---------
63,765
---------
KENTUCKY (1.0%)
Kentucky Dev. Finance Auth. (St. Elizabeth Medical Center) 6.625% 11/1/2004 (3) 20,025 21,620
Kentucky Dev. Finance Auth. (Sisters of Charity) 6.60% 11/1/2006 5,000 5,407
</TABLE>
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kentucky Property & Buildings Comm. Rev. 5.25% 11/1/2008 $ 2,500 $ 2,593
Kentucky Property & Buildings Comm. Rev. 5.50% 9/1/2003 8,000 8,395
Kentucky Property & Buildings Comm. Rev. 5.60% 9/1/2004 3,000 3,178
Kentucky Property & Buildings Comm. Rev. 5.70% 9/1/2005 7,350 7,785
Kentucky Property & Buildings Comm. Rev. 6.25% 9/1/2007 (1) 9,100 10,207
Kentucky Property & Buildings Comm. Rev. 6.875% 8/1/2006 10,400 11,405
---------
70,590
---------
LOUISIANA (2.0%)
East Baton Rouge Parish LA PCR VRDO (Exxon Project) 4.20% 5/4/1998 5,915 5,915
Jefferson Parish LA Sales Tax Rev. 6.75% 12/1/2006 (3) 11,000 12,059
Louisiana Gas & Fuel Tax Rev. 7.20% 11/15/1999 9,500 9,944
Louisiana Gas & Fuel Tax Rev. 7.25% 11/15/2000 5,250 5,577
Louisiana Gas & Fuel Tax Rev. 7.25% 11/15/2004 11,000 11,691
Louisiana GO 5.25% 4/15/2011 (4)++ 11,395 11,649
Louisiana GO 5.50% 4/15/2003 (3) 4,445 4,649
Louisiana GO 6.00% 4/15/2004 (3) 7,210 7,762
Louisiana GO 6.25% 4/15/2005 (3) 6,455 7,075
Louisiana GO 6.75% 5/15/2002 (1) 7,680 8,340
Louisiana GO 7.00% 9/1/2000 (Prere.) 11,540 12,485
Louisiana GO 7.00% 8/1/2004 (1) 5,810 6,580
Louisiana GO 7.75% 8/1/2006 (1) 10,970 13,232
Louisiana GO 8.75% 9/1/2000 (4) 8,830 9,713
Louisiana GO 8.75% 9/1/2001 (4) 9,445 10,583
New Orleans LA Public Improvement GO 7.70% 10/1/1999 2,395 2,457
New Orleans LA Public Improvement GO 7.75% 10/1/2000 5,510 5,654
---------
145,365
---------
MAINE
Maine Muni. Bond Bank 4.90% 11/1/2002 2,500 2,552
---------
MARYLAND (0.1%)
Maryland GO 5.00% 10/15/1999 8,520 8,665
---------
MASSACHUSETTS (5.8%)
Boston MA GO 5.25% 4/1/2010 (3)++ 5,670 5,856
Boston MA GO 5.25% 4/1/2011 (3)++ 5,925 6,072
Boston MA GO 5.25% 4/1/2012 (3)++ 6,195 6,303
Boston MA Water & Sewer Comm. 5.75% 11/1/2013 6,325 6,797
Chelsea MA GO 5.50% 6/15/2008 (2) 5,735 6,077
Chelsea MA GO 5.50% 6/15/2009 (2) 5,490 5,818
Chelsea MA GO 5.50% 6/15/2011 (2) 5,000 5,243
Chelsea MA GO 5.50% 6/15/2012 (2) 5,000 5,197
Massachusetts Bay Transp. Auth. 7.25% 3/1/2003 (3) 16,000 17,162
Massachusetts GO 5.00% 11/1/2009 5,000 5,074
Massachusetts GO 5.10% 2/1/2005 25,000 25,805
Massachusetts GO 5.25% 4/1/2010 ++ 12,930 13,392
Massachusetts GO 5.25% 4/1/2011 ++ 13,605 13,968
Massachusetts GO 5.25% 4/1/2012 ++ 14,320 14,573
Massachusetts GO 5.25% 6/1/2014 (3) 18,000 18,165
Massachusetts GO 5.50% 2/1/2011 10,000 10,317
Massachusetts GO 5.50% 2/1/2011 (1) 10,000 10,341
Massachusetts GO 5.50% 7/1/2013 5,360 5,535
Massachusetts GO 5.70% 2/1/2008 (1) 6,805 7,248
Massachusetts GO 6.25% 7/1/2002 10,000 10,721
Massachusetts GO 6.50% 8/1/2002 (Prere.) 3,840 4,224
Massachusetts GO 6.90% 6/1/2000 (2) 2,500 2,625
Massachusetts GO 7.00% 6/1/1999 (Prere.) 3,000 3,158
Massachusetts GO 7.00% 6/1/2002 (2) 5,000 5,263
Massachusetts GO 7.50% 6/1/2004 3,975 4,555
Massachusetts Health & Education Auth.
(Partners Healthcare System) 5.25% 7/1/2003 (4) 4,055 4,197
</TABLE>
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<CAPTION>
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FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts Ind. Finance Agency (Refusetech Inc. Project) 6.15% 7/1/2002 $ 5,040 $ 5,277
Massachusetts Ind. Finance Agency (Refusetech Inc. Project) 6.30% 7/1/2005 21,500 23,165
Massachusetts Ind. Finance Auth. Rev. (BioMed Research Corp.) 0.00% 8/1/2004 10,000 7,470
Massachusetts Ind. Finance Auth. Rev. (BioMed Research Corp.) 7.10% 8/1/1999 12,420 12,881
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 1,410 1,426
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 (ETM) 4,590 4,648
Massachusetts Turnpike Auth. Rev. 4.75% 1/1/2004 2,500 2,545
Massachusetts Water Resources Auth. 5.25% 3/1/2007 5,000 5,138
Massachusetts Water Resources Auth. 5.25% 3/1/2009 7,175 7,331
Massachusetts Water Resources Auth. 5.50% 11/1/2007 32,860 34,188
Massachusetts Water Resources Auth. 6.50% 7/15/2010 30,220 34,922
Massachusetts Water Resources Auth. 6.50% 7/15/2019 37,515 43,733
Massachusetts Water Resources Auth. 7.25% 4/1/2001 9,800 10,498
---------
416,908
---------
MICHIGAN (3.0%)
Detroit MI GO 5.80% 5/1/2002 (2) 8,970 9,426
Detroit MI GO 5.90% 5/1/2003 (2) 9,490 10,088
Detroit MI Sewer System Rev. 5.25% 7/1/2015 (1) 4,000 4,003
Greater Detroit MI Resource Recovery Auth. 5.50% 12/13/2004 (2) 7,505 7,917
Greater Detroit MI Resource Recovery Auth. 6.25% 12/13/2005 (2) 12,905 14,225
Greater Detroit MI Resource Recovery Auth. 6.25% 12/13/2006 (2) 17,475 19,336
Greater Detroit MI Resource Recovery Auth. 6.25% 12/13/2007 (2) 11,070 12,312
Michigan Building Auth. Rev. 5.375% 10/15/2010 5,880 6,102
Michigan Building Auth. Rev. 5.50% 10/1/2007 (2) 7,500 7,958
Michigan Building Auth. Rev. 5.50% 10/15/2008 17,525 18,524
Michigan Building Auth. Rev. 6.00% 10/1/2009 (2) 8,735 9,148
Michigan Building Auth. Rev. 6.50% 10/1/2003 (2) 3,000 3,249
Michigan Hosp. Fin. Auth. Rev. (Genesys Regional Medical Center) 5.30% 10/1/2011 10,840 10,743
Michigan Hosp. Fin. Auth. Rev. (Genesys Regional Medical Center) 5.375% 10/1/2013 4,000 3,944
Michigan Hosp. Fin. Auth. Rev. (Genesys Regional Medical Center) 5.50% 10/1/2006 3,340 3,421
Michigan Hosp. Fin. Auth. Rev. (Genesys Regional Medical Center) 5.50% 10/1/2007 3,910 3,999
Michigan Muni. Bond Auth. Local Govt. Loan Auth. 0.00% 12/1/1999 (3) 6,000 5,629
Michigan Muni. Bond Auth. Local Govt. Loan Auth. 0.00% 12/1/2000 (3) 5,590 5,011
Michigan Muni. Bond Auth. Local Govt. Loan Auth. 0.00% 12/1/2001 (3) 9,630 8,233
Michigan Public Power Agency 5.30% 1/1/2005 13,075 13,595
Michigan Public Power Agency 5.375% 1/1/2006 13,790 14,349
Michigan Public Power Agency 5.50% 1/1/2007 14,545 15,195
Michigan Public Power Agency 5.50% 1/1/2008 9,360 9,746
---------
216,153
---------
MINNESOTA (0.4%)
Minnesota GO 5.125% 11/1/2009 8,275 8,514
Western Minnesota Muni. Power Agency 5.375% 1/1/2008 (2) 5,645 5,942
Western Minnesota Muni. Power Agency 5.50% 1/1/2010 (2) 14,045 14,775
---------
29,231
---------
MISSISSIPPI (0.2%)
Mississippi GO 5.25% 5/1/2008 5,805 6,011
Mississippi GO 6.50% 5/1/2003 4,285 4,700
Mississippi GO 7.00% 5/1/2005 4,840 5,551
---------
16,262
---------
MISSOURI (0.1%)
St. Louis County MO Rockwood School Dist. GO 8.50% 2/1/2002 5,940 6,781
---------
MONTANA (0.2%)
Montana Health Fac. Auth Rev. (Sisters of Charity Health System) 5.25% 12/1/2009 (1) 3,330 3,455
Montana Health Fac. Auth Rev. (Sisters of Charity Health System) 5.25% 12/1/2010 (1) 2,445 2,517
Montana Health Fac. Auth Rev. (Sisters of Charity Health System) 5.25% 12/1/2011 (1) 4,980 5,085
Montana Health Fac. Auth Rev. (Sisters of Charity Health System) 5.25% 12/1/2012 (1) 2,725 2,759
---------
13,816
---------
</TABLE>
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<TABLE>
<CAPTION>
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FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEBRASKA (0.3%) $ $
Consumers Public Power Dist. NE Electric Rev. 5.10% 1/1/2003 9,840 9,842
Nebraska Public Power Dist. 5.60% 7/1/2003 13,175 13,861
---------
23,703
---------
NEVADA (4.2%)
Clark County NV Airport System Rev. 5.25% 7/1/2012 (1) 4,225 4,266
Clark County NV Airport System Rev. 5.375% 7/1/2010 (1) 8,470 8,803
Clark County NV Airport System Rev. VRDO
(McCarran International Airport) 4.00% 5/6/1998 (1) 1,000 1,000
Clark County NV GO 5.50% 6/1/2012 (3) 6,365 6,595
Clark County NV GO 5.60% 6/1/2013 (3) 7,175 7,478
Clark County NV GO 5.625% 6/1/2014 (3) 7,450 7,761
Clark County NV GO 7.50% 6/1/2006 (2) 3,575 4,255
Clark County NV GO 7.50% 6/1/2007 (2) 9,550 11,508
Clark County NV GO 7.50% 6/1/2009 (2) 6,825 8,401
Clark County NV GO 8.00% 6/1/2008 (2) 9,875 12,423
Clark County NV Passenger Fac. Rev.
(Las Vegas-McCarran International Airport) 5.375% 7/1/2010 (1) 6,435 6,706
Clark County NV Passenger Fac. Rev.
(Las Vegas-McCarran International Airport) 5.375% 7/1/2011 (1) 9,445 9,756
Clark County NV Passenger Fac. Rev.
(Las Vegas-McCarran International Airport) 5.375% 7/1/2012 (1) 8,295 8,492
Clark County NV School Dist. GO 5.375% 5/1/2006 (3) 3,740 3,886
Clark County NV School Dist. GO 5.375% 5/1/2007 (3) 9,195 9,529
Clark County NV School Dist. GO 5.375% 5/1/2008 (3) 9,170 9,483
Clark County NV School Dist. GO 5.50% 6/15/2010 (3) 16,325 17,138
Clark County NV School Dist. GO 5.60% 6/15/2009 (3) 9,640 10,182
Clark County NV School Dist. GO 5.625% 6/15/2013 (3) 10,000 10,435
Clark County NV School Dist. GO 5.70% 6/15/2009 (1) 10,825 11,451
Clark County NV School Dist. GO 5.875% 6/15/2013 (1) 9,275 9,782
Clark County NV School Dist. GO 5.875% 6/15/2014 (1) 14,485 15,243
Clark County NV School Dist. GO 5.90% 6/15/2012 (3) 10,000 10,651
Clark County NV School Dist. GO 6.50% 6/15/2006 (3) 13,865 15,583
Clark County NV School Dist. GO 7.25% 6/15/2002 (1) 3,995 4,412
Clark County NV School Dist. GO 9.75% 6/1/2000 (1) 4,580 5,081
Nevada GO 5.25% 5/15/2009 8,150 8,479
Nevada GO 5.25% 5/15/2010 8,555 8,838
Nevada GO 5.25% 5/15/2011 16,455 16,868
Nevada GO 5.25% 5/15/2012 17,300 17,606
Nevada GO 6.00% 5/1/2005 10,450 11,004
Washoe County NV Hosp. Medical Center 6.00% 6/1/2009 (2) 6,310 6,821
---------
299,916
---------
NEW JERSEY (5.7%)
Camden County NJ Muni. Util. Auth. 0.00% 9/1/1999 (3) 12,545 11,856
Camden County NJ Muni. Util. Auth. 0.00% 9/1/2000 (3) 18,500 16,685
Camden County NJ Muni. Util. Auth. 0.00% 9/1/2002 (3) 18,545 15,149
Camden County NJ Muni. Util. Auth. 0.00% 9/1/2003 (3) 18,545 14,421
Essex County NJ Solid Waste Util. Auth. 5.50% 4/1/2011 (4) 3,000 3,130
New Jersey Econ. Dev. Auth. 5.70% 7/1/2005 (1) 6,330 6,755
New Jersey Econ. Dev. Auth. 5.80% 7/1/2007 (1) 17,800 19,072
New Jersey Econ. Dev. Auth. 5.80% 7/1/2008 (1) 4,000 4,272
New Jersey Econ. Dev. Auth. 5.875% 7/1/2011 (1) 6,000 6,377
New Jersey Econ. Dev. Auth. 7.00% 7/1/2003 (1) 26,195 29,209
New Jersey Econ. Dev. Auth. VRDO (New Jersey Natural Gas Co.) 3.80% 5/6/1998 1,000 1,000
New Jersey Econ. Dev. Auth. VRDO (New Jersey Natural Gas Co.) 3.90% 5/6/1998 12,000 12,000
New Jersey Health Care Rev. (Union Hosp./Mega Care) 6.00% 7/1/1998 2,820 2,827
New Jersey Health Care Rev. (Union Hosp./Mega Care) 6.20% 7/1/1999 3,080 3,137
New Jersey Health Care Rev. (Union Hosp./Mega Care) 6.40% 7/1/2000 3,295 3,399
New Jersey Sports & Exposition Auth. 6.50% 3/1/2006 4,725 5,172
New Jersey Sports & Exposition Auth. 6.50% 3/1/2007 3,500 3,811
</TABLE>
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<TABLE>
<CAPTION>
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FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Jersey Transp. Trust Fund Auth. 5.30% 12/15/2001 $ 5,000 $ 5,185
New Jersey Transp. Trust Fund Auth. 5.50% 6/15/2011 (1) 4,250 4,436
New Jersey Transp. Trust Fund Auth. 6.00% 12/15/2004 (1) 4,000 4,352
New Jersey Transp. Trust Fund Auth. 6.00% 6/15/2008 34,660 38,137
New Jersey Transp. Trust Fund Auth. 6.00% 6/15/2009 37,000 40,756
New Jersey Turnpike Auth. 4.75% 1/1/2006 (ETM) 17,530 17,568
New Jersey Turnpike Auth. 5.60% 1/1/2000 (2) 5,000 5,122
New Jersey Turnpike Auth. 5.90% 1/1/2003 (2) 4,700 4,983
New Jersey Turnpike Auth. 5.90% 1/1/2004 (2) 19,030 20,233
New Jersey Turnpike Auth. 6.00% 1/1/2005 (2) 22,220 23,774
New Jersey Turnpike Auth. 6.50% 1/1/2009 (2) 50,000 57,073
New Jersey Turnpike Auth. VRDO 4.00% 5/6/1998 (3) LOC 19,100 19,100
Port Auth. of New York & New Jersey VRDO 4.15% 5/4/1998 1,200 1,200
Rutgers State Univ. NJ GO 6.40% 5/1/2013 4,675 5,376
---------
405,567
---------
NEW YORK (11.6%)
Metro. NY Transp. Auth. 5.00% 7/1/2013 (1) 18,000 17,587
Metro. NY Transp. Auth. 5.20% 7/1/2005 (2) 5,760 5,954
Metro. NY Transp. Auth. 5.40% 7/1/2003 10,560 10,900
Metro. NY Transp. Auth. 5.50% 4/1/2015 (1) 4,500 4,604
Metro. NY Transp. Auth. 5.625% 7/1/2005 11,485 11,990
Metro. NY Transp. Auth. 5.70% 7/1/2017 (1) 9,000 9,334
Metro. NY Transp. Auth. 6.10% 7/1/2007 (1) 3,625 3,974
Metro. NY Transp. Auth. 6.10% 7/1/2008 (1) 7,200 7,927
Metro. NY Transp. Auth. 7.50% 7/1/2000 (Prere.) 4,350 4,736
Muni. Assistance Corp. for New York City NY 5.20% 7/1/2007 (2) 4,500 4,660
Muni. Assistance Corp. for New York City NY 5.125% 7/1/2007 8,000 8,268
Muni. Assistance Corp. for New York City NY 5.25% 7/1/2001 4,000 4,116
Muni. Assistance Corp. for New York City NY 5.50% 7/1/2000 5,000 5,148
Muni. Assistance Corp. for New York City NY 5.50% 7/1/2001 4,500 4,664
Muni. Assistance Corp. for New York City NY 5.50% 7/1/2002 10,000 10,430
Muni. Assistance Corp. for New York City NY 5.50% 7/1/2007 5,000 5,306
Muni. Assistance Corp. for New York City NY 6.00% 7/1/2004 4,200 4,540
Muni. Assistance Corp. for New York City NY 6.00% 7/1/2006 13,500 14,746
Muni. Assistance Corp. for New York City NY 6.00% 7/1/2008 10,000 11,024
Muni. Assistance Corp. for New York City NY 6.25% 7/1/2005 5,000 5,505
New York City NY GO 5.60% 8/1/2005 10,380 10,857
New York City NY GO 5.70% 8/1/2007 9,800 10,339
New York City NY GO 5.75% 2/15/2007 8,950 9,422
New York City NY GO 5.875% 8/15/2012 (3) 7,000 7,456
New York City NY GO 5.90% 8/1/2010 4,750 5,041
New York City NY GO 6.00% 8/15/1999 12,290 12,594
New York City NY GO 6.00% 8/15/1999 (ETM) 780 801
New York City NY GO 6.00% 8/1/2011 5,600 5,960
New York City NY GO 6.00% 8/1/2012 4,000 4,245
New York City NY GO 6.10% 8/1/2002 4,000 4,231
New York City NY GO 6.15% 8/15/2000 3,170 3,299
New York City NY GO 6.375% 8/1/2004 3,985 4,282
New York City NY GO 7.00% 8/15/1999 (3) 5,550 5,764
New York City NY GO 7.00% 8/15/1999 (3)(ETM) 9,450 9,822
New York City NY GO 7.00% 8/1/2000 340 345
New York City NY GO 7.00% 2/1/2002 (Prere.) 3,495 3,865
New York City NY GO 7.00% 2/1/2005 1,505 1,639
New York City NY GO 7.00% 8/1/2005 6,500 7,337
New York City NY GO 7.10% 8/15/2004 (Prere.) 9,270 10,631
New York City NY GO 7.10% 8/15/2007 730 837
New York City NY GO 8.00% 8/1/1999 4,560 4,779
New York City NY GO 8.00% 8/1/1999 (ETM) 615 645
New York City NY GO 8.00% 11/1/2000 (2) 2,175 2,235
New York City NY GO 8.00% 8/1/2001 (Prere.) 3,185 3,588
New York City NY GO 8.00% 8/15/2001 (Prere.) 3,090 3,485
</TABLE>
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<CAPTION>
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FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York City NY GO 8.00% 4/1/2006 (2) $ 5,955 $ 7,215
New York City NY GO VRDO 4.00% 5/6/1998 LOC 2,600 2,600
New York City NY GO VRDO 4.10% 5/4/1998 LOC 200 200
New York City NY GO VRDO 4.15% 5/4/1998 (1) 13,600 13,600
New York City NY GO VRDO 4.20% 5/4/1998 LOC 200 200
New York City NY IDA (USTA National Tennis Center Project) 6.375% 11/15/2007 (4) 6,200 6,937
New York City NY IDA (USTA National Tennis Center Project) 6.40% 11/15/2008 (4) 4,105 4,599
New York City NY IDA (USTA National Tennis Center Project) 6.50% 11/15/2009 (4) 6,745 7,595
New York City NY IDA (USTA National Tennis Center Project) 6.50% 11/15/2010 (4) 3,500 3,905
New York City NY Muni. Water Finance Auth.
Water & Sewer System Rev. 5.30% 6/15/2006 27,665 28,574
New York City NY Muni. Water Finance Auth.
Water & Sewer System Rev. VRDO 4.25% 5/4/1998 (3) 2,800 2,800
New York City NY Transitional Financial Auth. Rev. 5.00% 11/15/2010 6,375 6,386
New York City NY Transitional Financial Auth. Rev. 5.00% 11/15/2009 5,000 5,048
New York City NY Transitional Financial Auth. Rev. 5.50% 11/15/2008 2,000 2,111
New York State Dormitory Auth. Rev. (City Univ.) 5.50% 7/1/2016 16,000 16,349
New York State Dormitory Auth. Rev. (City Univ.) 6.25% 7/1/2003 4,250 4,545
New York State Dormitory Auth. Rev. (City Univ.) 6.25% 7/1/2004 6,570 7,172
New York State Dormitory Auth. Rev. (City Univ.) 6.35% 7/1/2004 2,500 2,702
New York State Dormitory Auth. Rev. (City Univ.) 6.45% 7/1/2005 1,500 1,637
New York State Dormitory Auth. Rev. (City Univ.) 7.00% 7/1/2001 8,090 8,725
New York State Dormitory Auth. Rev. (City Univ.) 7.00% 7/1/2001 (ETM) 1,910 2,065
New York State Dormitory Auth. Rev. (New York Univ.) 6.375% 7/1/2007 (3) 27,000 29,063
New York State Dormitory Auth. Rev. (State Univ.) 5.80% 5/15/2005 5,400 5,746
New York State Dormitory Auth. Rev. (State Univ.) 5.90% 5/15/2006 2,000 2,143
New York State Dormitory Auth. Rev. (State Univ.) 6.00% 7/1/2003 (2) 4,000 4,283
New York State Dormitory Auth. Rev. (State Univ.) 6.00% 7/1/2004 (2) 4,000 4,320
New York State Dormitory Auth. Rev. (State Univ.) 6.10% 5/15/2008 2,000 2,196
New York State Dormitory Auth. Rev. (State Univ.) 7.00% 5/15/1999 (Prere.) 18,285 19,217
New York State Dormitory Auth. Rev. (State Univ.) 7.10% 5/15/2000 6,050 6,381
New York State Dormitory Auth. Rev. (Univ. of Rochester) 5.75% 7/1/2014 (1) 9,725 10,090
New York State Dormitory Auth. Rev. VRDO
(New York Foundling Charitable Corp.) 3.95% 5/6/1998 LOC 4,900 4,900
New York State Environmental Fac. Corp. PCR 5.50% 6/15/2008 13,185 13,983
New York State GO 6.00% 10/1/2003 4,800 5,147
New York State GO 6.00% 10/1/2004 9,195 9,940
New York State GO 7.80% 11/15/1999 5,000 5,285
New York State Local Govt. Assistance Corp. 5.125% 4/1/2010 24,000 24,433
New York State Local Govt. Assistance Corp. 6.00% 4/1/2006 5,000 5,412
New York State Local Govt. Assistance Corp. 6.00% 4/1/2007 3,000 3,261
New York State Local Govt. Assistance Corp. 6.875% 4/1/2019 11,650 12,923
New York State Local Govt. Assistance Corp. VRDO 3.85% 5/6/1998 LOC 7,500 7,500
New York State Medical Care Fac. Finance Agency Rev. 5.375% 2/15/2014 (4) 4,460 4,472
New York State Medical Care Fac. Finance Agency Rev. 6.00% 8/15/2002 (1) 5,350 5,672
New York State Medical Care Fac. Finance Agency Rev. 7.875% 8/15/2000 (Prere.) 6,815 7,495
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.25% 4/1/2009 (3) 4,510 4,673
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.25% 4/1/2010 (3) 9,800 10,098
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.25% 4/1/2011 (2) 5,000 5,100
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.25% 4/1/2011 (3) 4,000 4,085
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.25% 4/1/2012 (3) 6,220 6,297
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.25% 4/1/2013 (3) 5,435 5,468
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.30% 4/1/2008 (1) 7,740 8,041
New York State Thruway Auth. (Highway & Bridge Trust Fund) 5.40% 4/1/2007 (1) 9,215 9,673
New York State Thruway Auth. (Highway & Bridge Trust Fund) 6.25% 4/1/2006 (3) 10,000 11,035
New York State Thruway Auth. (Service Contract) 5.75% 4/1/2013 (1) 14,000 14,707
New York State Urban Dev. Corp. (Correctional Fac.) 6.40% 1/1/2004 9,685 10,435
Onondaga County NY PCR (Anheuser-Busch Cos., Inc. Project) 6.625% 8/1/2006 10,000 11,173
Suffolk County NY Water Auth. 6.80% 6/1/2012 (ETM) 10,660 12,525
Triborough Bridge & Tunnel NY Auth. Rev. 0.00% 1/1/2003 19,185 15,451
</TABLE>
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FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Triborough Bridge & Tunnel NY Auth. Rev. 6.00% 1/1/2012 $ 12,000 $ 13,215
Triborough Bridge & Tunnel NY Auth. Rev. 6.60% 1/1/2010 55,325 63,957
Triborough Bridge & Tunnel NY Auth. Rev. VRDO 3.90% 5/6/1998 (3) 2,400 2,400
---------
826,072
---------
NORTH CAROLINA (1.1%)
Charlotte NC Airport Refunding Rev. VRDO 4.00% 5/6/1998 (1) 9,905 9,905
North Carolina Educ. Fac. Finance Auth. VRDO (Duke Univ.) 4.05% 5/7/1998 4,100 4,100
North Carolina Medical Care Hosp. Rev. VRDO (Duke Univ. Hosp.) 4.05% 5/7/1998 1,300 1,300
North Carolina Muni. Power Agency (Catawba Electric) 6.00% 1/1/2004 (2) 7,000 7,513
North Carolina Muni. Power Agency (Catawba Electric) 6.00% 1/1/2005 (2) 28,750 30,862
North Carolina Muni. Power Agency (Catawba Electric) 7.00% 1/1/2000 (Prere.) 6,040 6,443
North Carolina Muni. Power Agency (Catawba Electric) 7.25% 1/1/2007 5,000 5,863
North Carolina Muni. Power Agency (Catawba Electric) 7.25% 1/1/2007 (1) 5,410 6,344
Wake County NC Ind. Fac. & Pollution Control
Finance Auth. VRDO (Carolina Power & Light) 4.10% 5/6/1998 LOC 8,100 8,100
---------
80,430
---------
OHIO (3.2%)
Butler County OH Transp. Improvement Dist. Rev. 5.00% 4/1/2006 (4) 3,000 3,057
Clermont County OH Hosp. Rev. VRDO (Mercy Health Systems) 4.10% 5/6/1998 600 600
Cleveland OH GO 5.50% 8/1/2008 (1) 6,295 6,685
Cleveland OH School Dist. 8.125% 12/1/1998 (ETM) 785 805
Cleveland OH School Dist. 9.00% 12/1/1998 (Prere.)+ 4,000 4,198
Cleveland OH Water Works 6.00% 1/1/2002 (1) 11,190 11,805
Cleveland OH Water Works 6.00% 1/1/2003 (1) 2,105 2,243
Cleveland OH Water Works 6.00% 1/1/2004 (1) 6,855 7,368
Cleveland OH Water Works 6.00% 1/1/2005 (1) 4,545 4,909
Cleveland OH Water Works 6.00% 1/1/2006 (1) 2,100 2,282
Cleveland OH Water Works 6.25% 1/1/2005 (2) 4,910 5,297
Cuyahoga County OH Hosp. Rev. VRDO
(Cleveland Clinic Foundation) 4.15% 5/6/1998 LOC 1,200 1,200
Franklin County OH Hosp. Rev. 5.75% 5/15/2012 (2) 5,000 5,226
Franklin County OH Hosp. Rev. VRDO (US Health Corp.) 4.10% 5/7/1998 LOC 4,350 4,350
Hamilton County OH Hosp. Fac. Rev. VRDO (Bethesda Hosp.) 3.95% 5/7/1998 LOC 500 500
Lorain County OH Hosp. Rev. (Catholic Healthcare Partners) 5.625% 9/1/2013 (1) 3,000 3,142
Montgomery County OH Hosp. Fac. Rev. CP
(Miami Valley Hosp. Project) 3.35% 5/12/1998 LOC 4,500 4,500
Ohio Air Quality Dev. Auth. VRDO
(Cincinnati Gas & Electric Co. Project) 4.20% 5/4/1998 LOC 4,800 4,800
Ohio Air Quality Dev. Auth. VRDO
(Cincinnati Gas & Electric Co. Project) 4.30% 5/4/1998 LOC 200 200
Ohio Building Auth. (Adult Correctional Building) 5.75% 4/1/2008 5,375 5,818
Ohio Building Auth. (Adult Correctional Building) 5.75% 4/1/2009 (2) 5,485 5,916
Ohio Building Auth. (Adult Correctional Building) 5.90% 10/1/2009 (1) 4,435 4,792
Ohio Building Auth. (Adult Correctional Building) 6.00% 10/1/2007 (2) 3,710 4,085
Ohio Building Auth. (Adult Correctional Building) 6.50% 10/1/2002 (1) 5,350 5,807
Ohio Building Auth. (Adult Correctional Building) 6.50% 10/1/2003 (1) 5,710 6,279
Ohio Building Auth. (Data Center) 5.70% 10/1/2004 2,895 3,088
Ohio Building Auth. (Data Center) 5.75% 10/1/2005 3,070 3,292
Ohio Building Auth. (Highway Safety Building) 5.375% 10/1/2009 (2) 4,605 4,842
Ohio Building Auth. (Highway Safety Building) 5.75% 10/1/2008 (2) 5,055 5,471
Ohio Building Auth. (Highway Safety Building) 6.00% 4/1/2007 (2) 4,640 5,089
Ohio Building Auth. (State Correctional Fac.) 5.70% 10/1/2003 3,305 3,503
Ohio Building Auth. (State Correctional Fac.) 5.70% 10/1/2004 2,725 2,907
Ohio Building Auth. (State Correctional Fac.) 5.80% 10/1/2006 4,360 4,708
Ohio Building Auth. (State Correctional Fac.) 5.90% 10/1/2007 2,500 2,729
Ohio Building Auth. (State Correctional Fac.) 6.50% 10/1/2002 3,790 4,105
Ohio Building Auth. (State Correctional Fac.) 6.50% 10/1/2003 5,500 5,965
Ohio Building Auth. (State Correctional Fac.) 6.50% 10/1/2004 2,500 2,711
Ohio Building Auth. (State Correctional Fac.) 7.20% 8/1/2000 10,000 10,597
Ohio Building Auth. (State Correctional Fac.) 7.25% 8/1/2001 7,500 7,952
</TABLE>
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FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ohio Building Auth. (State Correctional Fac.) 7.30% 8/1/2002 $ 10,000 $ 10,609
Ohio Building Auth. (State Correctional Fac.) 7.35% 8/1/2003 4,945 5,249
Ohio Higher Educ. Fac. 5.90% 12/1/2005 8,175 8,657
Ohio Public Fac. Comm. Higher Educ. Fac. 5.00% 12/1/2009 5,190 5,265
Ohio Public Fac. Comm. Higher Educ. Fac. 5.50% 12/1/2006 5,465 5,711
Ohio State Univ. General Receipts VRDO 4.00% 5/7/1998 6,500 6,500
Ohio Turnpike Comm. Rev. 5.50% 2/15/2010 (1) 4,435 4,664
Ohio Water Dev. Auth. 5.00% 12/1/1998 2,275 2,291
Ohio Water Dev. Auth. 6.00% 12/1/2008 (2) 6,000 6,466
---------
228,235
---------
OKLAHOMA (1.6%)
Grand River Dam Auth. OK 5.70% 6/1/2005 (4) 20,000 21,404
Grand River Dam Auth. OK 5.75% 6/1/2006 (4) 19,350 20,865
Grand River Dam Auth. OK 5.875% 6/1/2007 (1) 14,500 15,820
Grand River Dam Auth. OK 6.25% 6/1/2011 (2) 7,600 8,606
Grand River Dam Auth. OK 8.00% 6/1/2002 21,000 23,756
Oklahoma Ind. Auth. (St. Anthony's Hosp.) 7.50% 10/1/2003 (1) 5,470 5,485
Tulsa County OK Ind. Auth. PUT (St. Francis Hosp.) 5.15% 12/15/2003 8,715 8,980
Tulsa OK Metro. Util. Auth. 7.00% 2/1/2003 8,465 9,215
---------
114,131
---------
OREGON (0.5%)
Portland OR Sewer System Rev. 5.00% 6/1/2010 18,980 19,228
Portland OR Sewer System Rev. 5.00% 6/1/2012 (3) 13,580 13,579
---------
32,807
---------
PENNSYLVANIA (8.5%)
Allegheny County PA GO 7.60% 11/1/1998 (Prere.) 2,000 2,038
Allegheny County PA Higher Educ. Building Auth. VRDO
(Univ. of Pittsburgh Project) 4.00% 5/7/1998 LOC 5,900 5,900
Allegheny County PA Hosp. Dev. Auth. VRDO
(Allegheny General Hosp. Project) 4.20% 5/6/1998 LOC 5,300 5,300
Allegheny County PA Hosp. Dev. Auth. VRDO
(Children's Hosp. Pittsburgh) 4.05% 5/7/1998 (1) 4,600 4,600
Allegheny County PA Hosp. Dev. Auth. VRDO
(Presbyterian-Univ. Hosp. Project) 4.10% 5/7/1998 (1) 12,100 12,100
Berks County PA GO 7.25% 11/15/2000 (3)(Prere.) 10,000 10,927
Delaware County PA Hosp. Rev. VRDO
(Crozer-Chester Medical Center) 4.47% 5/6/1998 LOC 2,900 2,900
Delaware County PA IDA Resource Recovery Rev.
(Browning Ferris) 6.00% 1/1/2009 5,355 5,720
Delaware County PA IDA Resource Recovery Rev.
(Browning Ferris) 6.10% 1/1/2007 7,955 8,541
Erie County PA Prison Auth. Commonwealth Lease Rev. 6.75% 11/1/2001 (1)(Prere.) 5,295 5,723
Lackawana County PA GO 5.375% 9/15/2016 (2) 7,050 7,109
Northumberland County PA Commonwealth Lease Rev. 6.70% 10/15/2001 (1)(Prere.) 7,005 7,554
Northumberland County PA Commonwealth Lease Rev. 7.75% 10/15/2001 (1)(Prere.) 6,000 6,667
Pennsbury PA School District GO 5.50% 8/15/2014 (3) 6,000 6,148
Pennsylvania Convention Center Auth. 6.25% 9/1/2004 15,200 16,225
Pennsylvania Convention Center Auth. 6.70% 9/1/2014 (1) 4,000 4,482
Pennsylvania COP 4.80% 7/1/2001 (2) 20,000 20,204
Pennsylvania COP 4.90% 7/1/2002 (2) 13,665 13,849
Pennsylvania COP 5.00% 7/1/2003 (2) 4,555 4,631
Pennsylvania GO 5.00% 4/15/2005 24,290 24,935
Pennsylvania GO 5.00% 4/15/2007 7,950 8,133
Pennsylvania GO 5.00% 4/15/2008 9,250 9,432
Pennsylvania GO 5.125% 9/15/2009 (2) 20,000 20,636
Pennsylvania GO 5.375% 5/15/2013 (3) 3,515 3,599
Pennsylvania GO 5.50% 5/1/2013 (3) 8,025 8,306
Pennsylvania GO 5.90% 11/15/2001 1,500 1,581
Pennsylvania GO 6.20% 11/15/2004 12,480 13,438
Pennsylvania GO 6.50% 11/1/2006 4,260 4,625
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FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania GO 7.10% 11/1/2008 $ 6,700 $ 7,108
Pennsylvania GO 10.00% 4/15/2002 (2) 10,160 12,212
Pennsylvania Higher Educ. Fac. Auth. (Allegheny/Delaware Valley) 5.00% 11/15/2003 (1) 7,380 7,544
Pennsylvania Higher Educ. Fac. Auth. (Allegheny/Delaware Valley) 5.00% 11/15/2004 (1) 9,295 9,513
Pennsylvania Higher Educ. Fac. Auth. (Allegheny/Delaware Valley) 5.00% 11/15/2005 (1) 7,690 7,845
Pennsylvania Higher Educ. Fac. Auth. (Allegheny/Delaware Valley) 5.00% 11/15/2006 (1) 3,250 3,302
Pennsylvania Higher Educ. Fac. Auth. VRDO (Univ. of Pennsylvania) 4.05% 5/6/1998 1,900 1,900
Pennsylvania IDA 6.50% 7/1/1998 9,850 9,890
Pennsylvania IDA 6.60% 1/1/1999 5,065 5,157
Pennsylvania IDA 6.60% 7/1/1999 10,355 10,671
Pennsylvania IDA 6.70% 1/1/2000 7,420 7,730
Pennsylvania IDA 6.70% 7/1/2000 9,080 9,551
Pennsylvania IDA 6.80% 1/1/2001 5,000 5,311
Pennsylvania IDA 6.80% 7/1/2001 5,480 5,872
Pennsylvania Intergovernmental Cooperation Auth. 5.45% 6/15/2008 (3) 18,095 18,656
Pennsylvania Intergovernmental Cooperation Auth. 5.75% 6/15/1999 (3) 17,000 17,360
Pennsylvania Intergovernmental Cooperation Auth. 6.00% 6/15/2002 (3) 28,500 30,185
Philadelphia PA Airport Rev. (Philadelphia Airport Systems) 5.75% 6/15/2011 (3) 4,695 4,988
Philadelphia PA Airport Rev. (Philadelphia Airport Systems) 6.00% 6/15/2003 (3) 5,530 5,903
Philadelphia PA GO 4.60% 5/15/1999 (3) 4,345 4,379
Philadelphia PA GO 6.00% 11/15/2000 (3) 11,995 12,513
Philadelphia PA Hosp. & Higher Educ. Auth. Rev. VRDO
(Children's Hosp. Project) 4.25% 5/4/1998 LOC 6,000 6,000
Philadelphia PA Muni. Lease Rev. 6.00% 7/15/2003 5,065 5,244
Philadelphia PA Parking Auth. 5.25% 9/1/2010 (2) 4,875 4,992
Philadelphia PA School Dist. GO 0.00% 7/1/2000 (2) 15,500 14,139
Philadelphia PA School Dist. GO 5.375% 7/1/2005 (1) 7,500 7,832
Philadelphia PA School Dist. GO 6.25% 9/1/2005 (2) 5,000 5,492
Philadelphia PA School Dist. GO 6.25% 9/1/2006 (2) 2,000 2,206
Philadelphia PA School Dist. GO 6.25% 9/1/2008 (2) 4,000 4,458
Philadelphia PA School Dist. GO 6.25% 9/1/2009 (2) 2,080 2,333
Philadelphia PA School Dist. GO 6.70% 7/1/1999 (2) 9,000 9,287
Philadelphia PA Water & Sewer Auth. Rev. 6.875% 10/1/2006 (1) 15,455 16,354
Philadelphia PA Water & Waste Water Rev. 4.75% 6/15/1998 11,540 11,550
Philadelphia PA Water & Waste Water Rev. 5.25% 8/1/2009 (2) 6,460 6,665
Philadelphia PA Water & Waste Water Rev. 5.50% 6/15/2006 (1) 12,750 13,405
Philadelphia PA Water & Waste Water Rev. 6.25% 8/1/2007 (1) 5,000 5,540
Pittsburgh PA GO 5.125% 3/1/2009 (3) 10,000 10,168
Pittsburgh PA GO 5.20% 3/1/2010 (3) 22,000 22,363
Pittsburgh PA Water & Sewer Auth. Rev. 5.60% 9/1/2018 (3) 6,000 6,412
Sayre PA Health Care Fac. Auth. VRDO
(VHA of Pennsylvania Capital Asset Financing Program) 4.10% 5/6/1998 (2) 4,500 4,500
Schuylkill PA Redev. Auth. 6.95% 6/1/2001 (3)(Prere.) 3,995 4,354
---------
606,187
---------
PUERTO RICO (1.6%)
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2009 (1) 2,500 2,562
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2009 (4) 10,280 10,536
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2010 (1) 9,645 9,812
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2010 (4) 7,000 7,121
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2011 (1) 5,000 5,041
Puerto Rico Electric Power Auth. Rev. 5.00% 7/1/2011 (4) 7,500 7,561
Puerto Rico Electric Power Auth. Rev. 5.125% 7/1/2013 (4) 11,955 12,025
Puerto Rico Electric Power Auth. Rev. 5.25% 7/1/2009 (1) 7,235 7,584
Puerto Rico Electric Power Auth. Rev. 5.50% 7/1/2008 (1) 5,000 5,344
Puerto Rico Electric Power Auth. Rev. 6.50% 7/1/2005 (1) 20,525 23,015
Puerto Rico GO 5.00% 7/1/1998 15,000 15,024
Puerto Rico Telephone Auth. Rev. 5.40% 1/1/2008 9,550 9,906
---------
115,531
---------
RHODE ISLAND (0.6%)
Rhode Island Consolidated Capital Dev. Loan GO 6.00% 8/1/2005 (1) 4,000 4,344
</TABLE>
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FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rhode Island Consolidated Capital Dev. Loan GO 6.00% 8/1/2006 (1) $ 5,000 $ 5,461
Rhode Island Depositors Econ. Protection Corp. 6.55% 8/1/2010 (1) 26,850 31,130
---------
40,935
---------
SOUTH CAROLINA (0.1%)
Piedmont SC Muni. Power Agency Rev. 5.40% 1/1/2007 (1) 1,800 1,878
Piedmont SC Muni. Power Agency Rev. 5.40% 1/1/2007 (1)(ETM) 1,400 1,484
---------
3,362
---------
SOUTH DAKOTA (0.2%)
South Dakota Building Auth. Lease Rev. 5.25% 12/1/2010 (2) 4,800 4,917
South Dakota Health & Educ. Fac. Auth. Rev. (McKennan Hosp.) 7.50% 7/1/2004 (1) 5,845 6,188
---------
11,105
---------
TENNESSEE (0.3%)
Shelby County TN GO 5.00% 3/1/2014 11,230 11,072
Shelby County TN GO 5.625% 4/1/2012 5,000 5,215
Shelby County TN (Methodist Health Systems) 6.25% 8/1/2006 4,915 5,427
---------
21,714
---------
TEXAS (9.8%)
Anderson County TX Rev. (Coffield Prison Farm Project) 5.50% 3/15/2004 (2) 5,715 5,965
Anderson County TX Rev. (Coffield Prison Farm Project) 5.50% 3/15/2005 (2) 5,590 5,810
Anderson County TX Rev. (Coffield Prison Farm Project) 5.50% 3/15/2006 (2) 6,985 7,244
Austin TX Combined Util. System Rev. 5.20% 11/15/2003 (1) 3,360 3,481
Austin TX Combined Util. System Rev. 5.30% 5/15/2004 (1) 5,770 6,006
Austin TX Combined Util. System Rev. 5.75% 11/15/2003 (4)++ 7,500 7,917
Austin TX Combined Util. System Rev. 5.80% 11/15/2006 (1) 5,255 5,668
Austin TX Combined Util. System Rev. 6.00% 11/15/2006 (1) 23,265 25,406
Austin TX Combined Util. System Rev. 7.25% 11/15/2003 5,605 5,817
Austin TX Combined Util. System Rev. 7.25% 11/15/2003 (ETM) 395 448
Austin TX Independent School Dist. 5.75% 8/1/2012 5,000 5,366
Bell County TX Health Fac. Dev. Corp. (Scott & White Hosp.) 7.625% 9/1/2003 8,340 8,599
Birdville TX Independent School Dist. 5.75% 2/15/2003 4,990 5,272
Corpus Christi TX GO 7.50% 11/1/1998 (2) 1,865 1,871
Dallas TX Civic Center Refunding & Improvement 4.60% 8/15/2009 (1)++ 12,000 11,769
Dallas TX Civic Center Refunding & Improvement 4.70% 8/15/2010 (1)++ 11,000 10,784
Dallas TX Civic Center Refunding & Improvement 4.80% 8/15/2011 (1)++ 12,635 12,372
Dallas TX Civic Center Refunding & Improvement 4.90% 8/15/2012 (1)++ 13,240 12,957
Dallas TX Independent School Dist. 5.30% 8/15/2008 7,510 7,766
Dallas TX Independent School Dist. 5.40% 8/15/2009 10,440 10,827
Dallas TX Independent School Dist. 5.50% 8/15/2010 24,210 25,150
Dallas TX Independent School Dist. 5.60% 8/15/2003 (Prere.) 2,220 2,345
Dallas TX Independent School Dist. 5.60% 8/15/2004 5,780 6,079
Dallas TX Independent School Dist. 5.70% 8/15/2003 (Prere.) 1,230 1,305
Dallas TX Independent School Dist. 5.70% 8/15/2006 3,520 3,693
Gulf Coast TX Waste Disposal Auth. PCR VRDO (Amoco Project) 4.20% 5/4/1998 5,040 5,040
Harris County TX Health Fac. Dev. Corp. VRDO
(St. Luke's Episcopal Hosp.) 4.25% 5/4/1998 6,300 6,300
Harris County TX Health Fac. Dev. Corp. (Memorial Hosp.) 6.00% 6/1/2008 6,080 6,607
Harris County TX Health Fac. Dev. Corp. (Memorial Hosp.) 6.00% 6/1/2010 (1) 1,500 1,648
Harris County TX Health Fac. Dev. Corp. VRDO (Methodist Hosp.) 4.25% 5/4/1998 7,900 7,900
Harris County TX IDA VRDO (Shell Oil Project) 4.20% 5/4/1998 2,900 2,900
Harris County TX Toll Road 6.30% 8/15/2002 (3)(Prere.) 4,470 4,885
Harris County TX Toll Road 6.30% 8/15/2004 (3) 840 912
Harris County TX Toll Road VRDO 4.20% 5/6/1998 12,405 12,405
Houston TX GO 4.80% 3/1/2009 5,820 5,809
Houston TX GO 5.00% 3/1/2004 6,265 6,394
Houston TX GO 5.00% 3/1/2010 7,245 7,300
Houston TX GO 5.00% 3/1/2011 4,535 4,535
Houston TX GO 5.10% 3/1/2006 12,200 12,424
Houston TX GO 5.80% 3/1/2002 5,080 5,337
Houston TX GO 7.00% 3/1/2008 48,405 56,922
Houston TX Hotel Occupancy Tax Rev. 5.25% 7/1/2007 (4) 6,585 6,787
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FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Houston TX Housing Finance Corp. TOB VRDO 4.15% 5/7/1998 (4) $ 8,625 $ 8,625
Houston TX Water & Sewer System Rev. 0.00% 12/1/2000 (2) 6,130 5,489
Houston TX Water & Sewer System Rev. 5.75% 12/1/2015 (1) 3,315 3,432
Houston TX Water & Sewer System Rev. 7.00% 12/1/2001 (2) 3,220 3,501
Houston TX Water & Sewer System Rev. 7.00% 12/1/2002 (2) 4,125 4,557
Houston TX Water & Sewer System Rev. 7.00% 12/1/2003 (2) 3,100 3,481
Lower Colorado River Auth. TX Rev. 5.00% 1/1/2010 (4) 6,885 6,941
North Texas Health Fac. Dev. 5.75% 2/15/2010 (1) 4,115 4,414
Port Arthur TX PCR VRDO (Texaco Inc.) 4.25% 5/4/1998 1,400 1,400
San Antonio TX Electric & Gas System Rev. 5.25% 2/1/2009 12,225 12,734
San Antonio TX Electric & Gas System Rev. 5.25% 2/1/2010 14,500 14,993
San Antonio TX Electric & Gas System Rev. 5.50% 2/1/2002 1,845 1,937
San Antonio TX Electric & Gas System Rev. 5.50% 2/1/2004 2,700 2,819
San Antonio TX Electric & Gas System Rev. 5.60% 2/1/2014 15,000 15,651
San Antonio TX Electric & Gas System Rev. 5.80% 2/1/2006 8,000 8,613
Tarrant County TX Health Resources 5.75% 2/15/2013 (1)+ 7,670 8,093
Tarrant County TX Water Control & Improvement Dist. 4.50% 3/1/2011 (3) 5,000 4,747
Texas GO 6.00% 10/1/2006 6,000 6,581
Texas GO 8.00% 10/1/2007 50,000 62,700
Texas Muni. Power Agency Rev. 6.10% 9/1/2008 (1) 12,840 14,364
Texas Muni. Power Agency Rev. 6.10% 9/1/2009 (1) 5,000 5,614
Texas Public Finance Auth. Building Rev. 6.60% 2/1/2000 (1) 5,000 5,211
Texas Public Finance Auth. Building Rev. 6.75% 2/1/2002 (1) 5,000 5,306
Texas Public Finance Auth. Building Rev. 6.80% 2/1/2003 (1) 5,000 5,311
Texas Public Finance Auth. Rev. 4.80% 10/1/2009 13,325 13,373
Texas Public Finance Auth. Rev. 5.75% 10/1/2009 5,000 5,348
Texas Public Finance Auth. Rev. 5.75% 10/1/2010 8,625 9,225
Texas Public Finance Auth. Rev. GO 4.90% 10/1/2010 32,235 32,365
Texas TRAN 4.75% 8/31/1998 34,000 34,107
Texas Turnpike Auth. Rev. 5.50% 1/1/2015 (3) 13,000 13,348
Texas Water Resource Finance Auth. 7.50% 8/15/2001 3,820 3,939
Univ. of Texas Permanent Univ. Fund 6.40% 7/1/2002 5,000 5,404
Univ. of Texas Refunding Finance System Rev. 7.00% 8/15/2007 14,050 15,396
---------
703,041
---------
UTAH (0.1%)
Jordan UT School Dist. 5.75% 6/15/2005 4,235 4,557
Salt Lake County UT Building Rev. 5.90% 10/1/2006 (1) 4,000 4,303
---------
8,860
---------
VIRGINIA (0.9%)
Chesapeake Bay Bridge & Tunnel VA 5.40% 7/1/2005 (3) 6,090 6,396
Fairfax County VA GO 5.25% 6/1/2014 7,200 7,293
Fairfax County VA GO 7.25% 6/1/2000 5,805 6,174
Fairfax County VA IDA Hosp. Rev. VRDO (Fairfax Hosp. System) 4.05% 5/6/1998 400 400
Virginia Beach VA Refunding & Public Improvement 5.25% 8/1/2009 4,000 4,176
Virginia Beach VA Refunding & Public Improvement 5.25% 8/1/2010 9,690 10,062
Virginia Beach VA Refunding & Public Improvement 5.25% 8/1/2011 5,000 5,145
Virginia Beach VA Refunding & Public Improvement 5.25% 8/1/2012 3,000 3,063
Virginia Beach VA Refunding & Public Improvement 5.25% 8/1/2013 1,750 1,777
Virginia Public School Auth. 5.00% 8/1/2005 4,360 4,474
Virginia Public School Auth. 5.00% 8/1/2011 3,380 3,383
Virginia Public School Auth. 5.25% 8/1/2008 4,540 4,733
Virginia Public School Auth. 5.40% 6/1/2009 5,750 6,023
---------
63,099
---------
WASHINGTON (3.7%)
King County WA GO 6.00% 12/1/2004 5,000 5,347
King County WA GO 6.10% 12/1/2005 5,000 5,367
King County WA School Dist. 5.50% 12/1/2016 (3) 5,635 5,757
Port of Seattle WA GO 5.50% 10/1/2017 (3) 5,290 5,403
Seattle WA GO 5.60% 1/15/2009 5,020 5,292
Seattle WA Power & Light 5.00% 7/1/2011 5,715 5,734
</TABLE>
37
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INTERMEDIATE-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Seattle WA Power & Light 5.10% 5/1/2005 $ 10,575 $ 10,920
Seattle WA Water System Rev. 5.00% 12/1/2003 2,000 2,054
Seattle WA Water System Rev. 5.10% 12/1/2004 4,000 4,135
Seattle WA Water System Rev. 5.20% 12/1/2005 2,320 2,403
Tacoma WA Electric System Rev. 5.50% 1/1/2012 (2) 5,500 5,583
Tacoma WA Electric System Rev. 5.70% 1/1/2003 (2) 6,845 7,211
Washington GO 5.00% 7/1/2011 12,870 12,907
Washington GO 5.50% 7/1/2002 5,000 5,219
Washington GO 5.60% 9/1/2004 5,000 5,314
Washington GO 5.75% 9/1/2007 19,950 21,690
Washington GO 5.75% 9/1/2008 4,000 4,340
Washington GO 5.75% 5/1/2009 5,000 5,285
Washington GO 6.00% 7/1/2003 5,200 5,578
Washington GO 6.00% 7/1/2004 3,115 3,371
Washington GO 6.10% 6/1/2006 9,495 10,441
Washington GO 6.25% 6/1/2009 11,465 12,923
Washington GO 6.25% 9/1/2009 21,550 22,766
Washington GO 6.25% 2/1/2011 6,680 7,527
Washington GO 7.10% 9/1/1999 7,500 7,576
Washington GO 7.20% 9/1/1998 (Prere.) 2,365 2,391
Washington GO VRDO 4.05% 5/6/1998 45,400 45,400
Washington Health Care Fac. Auth. (Sisters of Providence) 6.00% 10/1/2002 (2) 5,105 5,419
Washington Health Care Fac. Auth. (Sisters of Providence) 6.00% 10/1/2003 (2) 5,270 5,644
Washington Health Care Fac. Auth. (Sisters of Providence) 6.00% 10/1/2004 (2) 5,515 5,952
Washington Health Care Fac. Auth. (Sisters of Providence) 6.00% 10/1/2005 (2) 4,830 5,232
Washington Health Care Fac. Auth. (Sisters of Providence) 6.00% 10/1/2006 (2) 6,055 6,575
---------
266,756
---------
WEST VIRGINIA (0.1%)
West Virginia Building Comm. Rev. 5.25% 7/1/2008 (1) 1,000 1,039
West Virginia School Building Auth. Rev. 5.30% 7/1/2009 (2) 8,000 8,356
---------
9,395
---------
WISCONSIN (0.1%)
Wisconsin GO 4.25% 11/1/1999 4,000 4,023
---------
WYOMING (0.1%)
Lincoln County WY PCR VRDO (Exxon Project) 4.20% 5/4/1998 3,200 3,200
Platte County WY PCR 4.60% 1/1/2002 2,430 2,446
---------
5,646
---------
- -------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $6,846,323) 7,138,231
- -------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
Other Assets--Note B 163,264
Liabilities (154,120)
---------
9,144
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- -------------------------------------------------------------------------------------------------------------------------
Applicable to 539,380,915 outstanding $.001 par value shares
(authorized 1,150,000,000 shares) $7,147,375
=========================================================================================================================
NET ASSET VALUE PER SHARE $13.25
=========================================================================================================================
</TABLE>
*See Note A in Notes to Financial Statements.
+Securities with an aggregate value of $9,474,000 have been segregated
as initial margin for open futures contracts.
For key to abbreviations and other references, see page 59.
38
<PAGE> 78
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
AMOUNT PER
(000) SHARE
- --------------------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1998, NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paid in Capital $6,876,081 $12.75
Undistributed Net Investment Income -- --
Overdistributed Net Realized Gains (21,719) (.04)
Unrealized Appreciation--Note F
Investment Securities 291,908 .54
Futures Contracts 1,105 --
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS $7,147,375 $13.25
==========================================================================================================================
</TABLE>
39
<PAGE> 79
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INSURED LONG-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (101.7%)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALABAMA (1.4%)
Birmingham AL Medical Center (Special Care Medical Center) 7.25% 7/1/2015 (1) $ 6,715 $ 6,750
Medical Clinic Board of Bessemer AL (Bessemer Carraway Hosp.) 7.25% 4/1/2015 (1) 5,000 5,342
Medical Clinic Board of Montgomery AL (Jackson Hosp.) 6.00% 3/1/2026 (2) 12,000 12,674
Mobile AL Water & Sewer Comm. 5.50% 1/1/2010 (3) 4,000 4,179
---------
28,945
---------
ALASKA (1.1%)
Alaska Housing Fin. Corp. Rev. VRDO 4.10% 5/6/1998 3,780 3,780
Anchorage AK Electric Rev. 8.00% 12/1/2009 (1) 2,565 3,293
Anchorage AK Electric Rev. 8.00% 12/1/2010 (1) 2,960 3,831
Anchorage AK Water GO 7.20% 6/1/2017 (2) 11,000 11,463
---------
22,367
---------
ARIZONA (0.6%)
Maricopa County AZ (Samaritan Health Service) 7.00% 12/1/2016 (1) 8,650 10,632
Scottsdale AZ IDA Hosp. Rev. VRDO
(Scottsdale Memorial Health Systems) 4.00% 5/6/1998 (2) 1,200 1,200
---------
11,832
---------
ARKANSAS (0.4%)
North Little Rock AR Electric System 6.50% 7/1/2010 (1) 3,500 4,033
North Little Rock AR Electric System 6.50% 7/1/2015 (1) 4,500 5,237
---------
9,270
---------
CALIFORNIA (12.3%)
California Health Fac. Finance Auth. (Adventist Health System) 6.75% 3/1/2011 (1) 12,000 12,875
California Health Fac. Finance Auth. (Pomona Valley Hosp.) 5.75% 7/1/2015 8,205 8,619
California Housing Finance Agency 8.625% 8/1/2015 (1) 2,550 2,650
Cailfornia Public Works Board (California Community College) 5.25% 12/1/2011 ++ 7,550 7,710
Cailfornia Public Works Board (California State Univ.) 5.25% 10/1/2011 ++ 3,530 3,604
Cailfornia Public Works Board (California State Univ.) 5.25% 10/1/2012 ++ 6,305 6,379
Cailfornia Public Works Board (California State Univ.) 5.25% 10/1/2014 ++ 7,045 7,045
Cailfornia Public Works Board (Univ. of California) 5.25% 12/1/2008 ++ 2,000 2,087
Fresno CA COP (City Hall Refinancing Project) 6.375% 8/1/2010 (2) 10,500 11,124
Los Angeles CA Unified School Dist. 5.375% 7/1/2016 (3) 5,000 5,055
Los Angeles County CA Metro. Transp. Auth. VRDO 3.90% 5/6/1998 (3) 1,100 1,100
Modesto CA Irrigation Dist. Finance Auth. (Woodland Project) 6.50% 10/1/2022 (2) 20,225 23,884
MSR California Public Power Agency (San Juan Project) 6.125% 7/1/2013 (2) 7,000 7,862
MSR California Public Power Agency (San Juan Project) 6.75% 7/1/2020 (1) 13,000 15,220
Northern California Power Agency (Combustion Turbine Project) 6.00% 8/15/2010 (1) 3,500 3,580
Oakland CA Redev. Agency (Central Dist. Project) 5.50% 2/1/2014 (2) 6,300 6,605
Oakland CA Redev. Agency (Central Dist. Project) 6.00% 2/1/2008 (2) 5,585 6,157
Orange County CA VRDO (Irvine Coast) 4.10% 5/4/1998 LOC 17,100 17,100
Pittsburg CA Redev. Agency 5.50% 8/1/2007 (3) 3,000 3,148
Port of Oakland CA Rev. 5.40% 11/1/2017 (1) 25,575 25,921
Sacramento CA Muni. Util. Dist. 5.75% 8/15/2013 (1) 12,360 12,887
Sacramento CA Muni. Util. Dist. 6.50% 9/1/2013 (1) 8,895 10,353
San Jose CA Tax Redev. 6.00% 8/1/2010 (1) 8,105 8,997
Santa Clara CA Redev. Agency (Bayshore North Project) 7.00% 7/1/2010 (2) 3,000 3,560
Santa Clara CA Valley Water Dist. 6.00% 2/1/2024 (3) 5,000 5,295
Santa Rosa CA Waste Water Rev. 6.00% 9/1/2015 (3) 5,000 5,526
South County CA Waste Water Auth. (Gilroy) 5.50% 8/1/2022 (3) 8,000 8,047
South County CA Waste Water Auth. (Morgan Hill) 5.50% 8/1/2022 (3) 7,000 7,058
Southern California Public Power Auth. (Palo Verde) 5.00% 7/1/2015 (2) 2,605 2,543
Southern California Rapid Transit Dist. 5.80% 9/1/2006 (2) 4,000 4,349
Southern California Rapid Transit Dist. 5.90% 9/1/2007 (2) 3,155 3,467
Ukiah CA Electric Rev. 6.25% 6/1/2018 (1) 6,330 7,209
---------
257,016
---------
COLORADO (3.8%)
Colorado Health Fac. Auth. (Sisters of Charity Health System) 6.00% 5/15/2013 (1) 4,525 4,694
Denver CO Health Fac. Rev. (St. Anthony's Hosp.) 7.70% 5/1/2007 (1) 2,800 2,932
</TABLE>
40
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2004 (1) $ 13,750 $ 10,263
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2005 (1) 17,200 12,171
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2007 (1) 12,250 7,817
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2008 (1) 14,355 8,686
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2009 (1) 16,500 9,437
Northern Colorado Water Conservation Dist. Rev. 6.50% 12/1/2012 (2) 20,575 23,208
---------
79,208
---------
CONNECTICUT (0.3%)
Connecticut Special Obligation Transp. Infrastructure Rev. 5.625% 10/1/2014 (3) 3,000 3,110
South Central CT Regional Water Auth. Water System Rev. 5.75% 8/1/2012 (3) 3,100 3,257
---------
6,367
---------
DELAWARE (0.9%)
Delaware Econ. Dev. Auth. (Delmarva Power & Light) 7.30% 9/1/2015 (3) 4,000 4,263
Delaware Health Fac. Auth. (Delaware Medical Center) 7.00% 10/1/2015 (1) 6,000 6,326
Dover DE Electric Rev. 5.75% 7/1/2015 (3) 5,225 5,427
Dover DE Electric Rev. 6.10% 7/1/2011 (3) 2,000 2,138
---------
18,154
---------
DISTRICT OF COLUMBIA (0.5%)
District of Columbia Rev. (Howard Univ.) 5.75% 10/1/2017 (1) 10,030 10,444
---------
FLORIDA (8.0%)
Coral Springs FL Improvement Dist. Water & Sewer GO 6.00% 6/1/2010 (1) 3,000 3,310
Dade County FL Water & Sewer Rev. 5.25% 10/1/2026 10,140 10,051
Dade County FL Water & Sewer Rev. VRDO 4.00% 5/6/1998 (3) 3,000 3,000
Davie FL Water & Sewer Rev. 6.375% 10/1/2012 (2) 2,620 2,996
Florida Muni. Power Agency (Stanton Project) 5.00% 10/1/2019 (1) 8,100 7,851
Orange and Orlando County FL Expressway Auth. 8.25% 7/1/2013 (3) 9,695 12,995
Orange and Orlando County FL Expressway Auth. 8.25% 7/1/2015 (3) 8,360 11,374
Orange and Orlando County FL Expressway Auth. 8.25% 7/1/2016 (3)+ 12,295 16,833
Orange County FL Health Auth. Hosp. (Adventist for Sunbelt Group) 6.25% 11/15/2010 (2) 4,000 4,403
Palm Beach FL Criminal Justice 7.20% 6/1/2014 (3) 16,300 20,148
Palm Beach FL Criminal Justice 7.20% 6/1/2015 (3) 4,000 4,966
St. Lucie County FL Util. System Rev. 6.00% 10/1/2020 (3)(ETM) 2,350 2,588
Sarasota County FL Public Hosp. (Sarasota Memorial Hosp.) 5.75% 10/1/2017 (1) 28,850 30,202
Seacoast FL Util. Auth. Water & Sewer Rev. 5.50% 3/1/2019 (3) 2,000 2,091
Tampa FL Util. Rev. 6.75% 10/1/2010 (2) 9,330 11,017
Tampa FL Util. Rev. 6.75% 10/1/2011 (2) 9,965 11,784
Tampa FL Util. Rev. 6.75% 10/1/2012 (2) 10,635 12,579
---------
168,188
---------
GEORGIA (2.9%)
Atlanta GA Water & Sewer Rev. 5.25% 1/1/2027 (3) 9,800 9,628
Burke County GA Dev. Auth. PCR VRDO (Georgia Power Co.) 4.20% 5/4/1998 400 400
Burke County GA Dev. Auth. PCR VRDO (Oglethorpe Power) 4.00% 5/6/1998 (3) 3,000 3,000
George L. Smith II World Congress Center Auth. Rev. 5.50% 7/1/2020 (1)++ 24,740 23,933
George L. Smith II World Congress Center Auth. Rev. 5.70% 7/1/2013 (1)++ 5,000 4,988
George L. Smith II World Congress Center Auth. Rev. 5.75% 7/1/2014 (1)++ 5,000 4,983
George L. Smith II World Congress Center Auth. Rev. 5.75% 7/1/2015 (1)++ 3,680 3,654
Henry County GA School Dist. GO 6.45% 8/1/2011 (1) 4,000 4,611
Private Colleges & Universities Auth. of GA (Mercer Univ. Project) 6.50% 11/1/2015 (1) 5,000 5,836
---------
61,033
---------
HAWAII (1.4%)
Hawaii Airport System Rev. 6.35% 7/1/2007 (1) 8,000 8,779
Hawaii Highway Rev. 5.25% 7/1/2011 1,650 1,669
Hawaii Highway Rev. 5.25% 7/1/2012 1,500 1,506
Hawaii Highway Rev. 5.25% 7/1/2016 2,550 2,520
Honolulu HI City & County GO 8.00% 10/1/2010 11,000 14,180
---------
28,654
---------
ILLINOIS (5.1%)
Chicago IL Board of Educ. GO 6.25% 1/1/2011 (1) 7,000 7,834
Chicago IL Public Building Comm. 7.00% 1/1/2020 (1)(ETM) 21,500 26,720
</TABLE>
41
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INSURED LONG-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Chicago IL Waste Water Transmission Rev. 6.50% 1/1/2008 (3) $ 1,315 $ 1,495
Cook County IL GO 7.25% 11/1/2007 (1) 6,000 7,164
Illinois Dev. Finance Auth. PCR 4.40% 12/1/2006 (2) 15,000 14,614
Illinois Dev. Finance Auth. PCR (Illinois Power Co. Project) 7.40% 12/1/2024 (1) 14,000 16,110
Illinois Regional Transit Auth. GO (Cook, DuPage, and Kane Counties) 7.20% 11/1/2020 (2) 24,000 30,204
Will County IL Community Unit School Dist. (Romeoville) 7.10% 12/1/2009 (2) 1,250 1,506
Will County IL Community Unit School Dist. (Romeoville) 7.10% 12/1/2010 (2) 1,115 1,349
---------
106,996
---------
INDIANA (1.0%)
Indiana Muni. Power Agency 6.125% 1/1/2013 (1) 13,250 14,815
Merrillville IN School Building Corp. 6.65% 7/1/2006 (1) 5,500 6,232
---------
21,047
---------
KANSAS (0.6%)
Kansas Health System Dev. Auth. (St. Luke Mission) 5.375% 11/15/2016 (1) 9,300 9,341
Kansas Health System Dev. Auth. (St. Luke Mission) 5.375% 11/15/2021 (1) 3,000 2,982
---------
12,323
---------
KENTUCKY (1.9%)
Jefferson County KY Health System Rev. (Jewish Hosp.) 5.75% 1/1/2026 (2) 11,000 11,408
Kentucky Dev. Finance Auth. Hosp. Fac. Rev.
(St. Elizabeth's Medical Center) 6.00% 11/1/2010 (3) 23,885 25,003
Kentucky Econ. Dev. Finance Auth. Hosp. Rev. VRDO
(Baptist Healthcare Systems) 4.10% 5/6/1998 LOC 3,600 3,600
---------
40,011
---------
LOUISIANA (2.6%)
East Baton Rouge Parish LA PCR VRDO (Exxon Project) 4.20% 5/4/1998 700 700
Jefferson Parish LA Sales Tax Rev. 6.75% 12/1/2006 (3) 8,500 9,318
New Orleans LA Capital Appreciation 0.00% 9/1/2013 (2) 9,000 4,077
New Orleans LA GO 0.00% 9/1/2010 (2) 8,500 4,633
New Orleans LA GO 0.00% 9/1/2011 (2) 10,475 5,365
New Orleans LA GO 6.00% 9/1/2021 (2) 22,250 23,132
Ouachita Parish LA Hosp. Service (Glenwood Medical Center) 5.70% 5/15/2016 (4) 4,900 5,097
Ouachita Parish LA Hosp. Service (Glenwood Medical Center) 5.75% 5/15/2021 (4) 3,200 3,338
---------
55,660
---------
MAINE (0.8%)
Maine Health & Higher Educ. Fac. Auth.
(Eastern Maine Medical Center) 6.375% 10/1/2021 (3) 8,000 8,568
Maine Turnpike Rev. 6.00% 7/1/2018 (1) 7,000 7,426
---------
15,994
---------
MARYLAND (0.7%)
Maryland Health & Educ. Fac. Auth.
(Univ. of Maryland Medical System) 7.00% 7/1/2022 (3) 12,025 14,925
---------
MASSACHUSETTS (5.8%)
Boston MA GO 6.50% 7/1/2012 (2) 4,750 5,218
Boston MA Water & Sewer Comm. 7.25% 11/1/2006 (5) 2,500 2,541
Lawrence MA GO 4.75% 2/15/2014 (2) 1,500 1,412
Massachusetts Consolidated Loan GO 7.00% 7/1/2009 (3) 32,250 38,543
Massachusetts Health & Educ. Fac. Auth. (Boston College) 6.75% 7/1/2011 (3) 6,595 7,133
Massachusetts Health & Educ. Fac. Auth. (Falmouth Hosp.) 5.50% 7/1/2008 (1) 1,425 1,484
Massachusetts Health & Educ. Fac. Auth. (Lahey Clinic) 7.85% 7/1/2003 (1) 3,360 3,874
Massachusetts Health & Educ. Fac. Auth.
(Massachusetts General Hosp.) 6.25% 7/1/2012 (2) 19,650 22,012
Massachusetts Housing Finance Agency Rev. 5.95% 10/1/2008 (2) 27,485 29,094
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 2,340 2,366
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 (ETM) 8,660 8,769
---------
122,446
---------
MICHIGAN (4.3%)
Detroit MI Sewer System Rev. 5.45% 7/1/2007 (3) 6,850 7,292
Michigan Hosp. Fin. Auth. Rev. (Mercy Health) 5.375% 8/15/2026 (2) 5,000 4,953
Michigan Strategic Fund (Detroit Edison) 7.00% 7/15/2008 (1) 18,375 21,703
</TABLE>
42
<PAGE> 82
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michigan Trunk Line Rev. 5.625% 11/1/2026 (3) $ 10,000 $ 10,227
Monroe County MI Econ. Dev. Corp. (Detroit Edison) 6.95% 9/1/2022 (3) 25,000 30,803
St. Clair MI Econ. Dev. Corp. PCR (Detroit Edison) 6.40% 8/1/2024 (2) 8,000 8,829
Univ. of Michigan Rev. VRDO (Medical Service Plan) 4.25% 5/4/1998 6,700 6,700
---------
90,507
---------
MINNESOTA (0.5%)
Southern Minnesota Muni. Power Agency Supply System Rev. 5.50% 1/1/2015 (2) 6,120 6,215
Southern Minnesota Muni. Power Agency Supply System Rev. 5.50% 1/1/2015 (2)(Prere.) 3,880 4,037
---------
10,252
---------
MISSISSIPPI (0.1%)
Jackson County MS Port Fac. Rev. VRDO (Chevron USA Inc. Project) 4.20% 5/4/1998 2,300 2,300
---------
MISSOURI (0.4%)
Missouri Health & Educ. Fac. Auth. (Lester Cox Medical Center) 5.25% 6/1/2015 (1) 5,000 5,096
Missouri Health & Educ. Fac. Auth. VRDO (Washington Univ.) 4.30% 5/4/1998 3,800 3,800
---------
8,896
---------
NEVADA (0.3%)
Clark County NV GO 6.50% 6/1/2017 (2) 5,000 5,804
---------
NEW HAMPSHIRE (0.4%)
New Hampshire Higher Educ. (Hitchcock Clinic) 6.00% 7/1/2015 (1) 7,560 7,968
---------
NEW JERSEY (4.6%)
Atlantic County NJ Public Fac. COP 7.40% 3/1/2012 (3) 4,335 5,375
Hoboken-Union City-Weehawken NJ Sewage Auth. 6.25% 8/1/2014 (1) 10,185 11,577
Hoboken-Union City-Weehawken NJ Sewage Auth. 6.25% 8/1/2015 (1) 10,820 12,316
New Jersey Health Care Fac. Finance Auth.
(St. Clares-Riverside Medical Center) 5.75% 7/1/2014 (1) 3,000 3,141
New Jersey Sports & Exposition Auth. 6.50% 3/1/2013 (1) 18,795 21,765
New Jersey Turnpike Auth. 6.50% 1/1/2013 (1) 30,000 34,602
New Jersey Turnpike Auth. 6.50% 1/1/2016 (1) 5,000 5,799
New Jersey Turnpike Auth. VRDO 4.00% 5/6/1998 (3) LOC 1,500 1,500
---------
96,075
---------
NEW MEXICO (0.9%)
Albuquerque NM Hosp. System (Presbyterian Health) 6.375% 8/1/2007 (1) 4,000 4,353
Farmington NM Util. Systems Rev. 5.75% 5/15/2013 (3) 3,000 3,148
Santa Fe NM Rev. 6.30% 6/1/2024 (2) 5,000 5,491
Univ. of New Mexico Rev. 5.375% 6/1/2026 (1) 5,000 5,005
---------
17,997
---------
NEW YORK (3.8%)
Metro. NY Transp. Auth. 6.00% 4/1/2020 (1) 18,000 19,970
Nassau County NY Combined Sewer Dist. 6.60% 7/15/1998 (Prere.) 475 487
New York City NY GO VRDO 4.00% 5/6/1998 LOC 6,800 6,800
New York City NY GO VRDO 4.10% 5/4/1998 LOC 4,800 4,800
New York City NY GO VRDO 4.20% 5/4/1998 LOC 3,830 3,830
New York City NY Muni. Water & Sewer System Rev. 7.00% 6/15/2009 (2) 1,845 2,005
New York City NY Muni. Water Finance Auth. Water &
Sewer System Rev. VRDO 4.20% 5/4/1998 (3) 5,000 5,000
New York State Medical Care Fac. Finance Agency
(Mental Health Improvement) 6.00% 8/15/2015 (1) 5,000 5,293
New York State Thruway Auth. (Highway & Bridge Trust Fund) 6.00% 4/1/2007 (2) 16,480 18,000
Suffolk County NY Water Auth. 5.75% 6/1/2013 (2) 7,345 7,721
Triborough Bridge & Tunnel Auth. of NY Rev. 6.00% 1/1/2014 4,500 4,684
Triborough Bridge & Tunnel Auth. of NY Rev. 6.00% 1/1/2015 (2) 1,275 1,329
---------
79,919
---------
NORTH CAROLINA (1.1%)
North Carolina Higher Educ. VRDO (Duke Univ.) 4.05% 5/7/1998 1,940 1,940
North Carolina Medical Care Rev. (Wake County Hosp.) 5.25% 10/1/2017 (1) 14,250 14,129
North Carolina Muni. Power Agency (Catawba Electric) 6.00% 1/1/2010 (1) 6,750 7,441
---------
23,510
---------
</TABLE>
43
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INSURED LONG-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NORTH DAKOTA (1.0%)
Bismarck ND Medical Center 7.50% 5/1/2013 (5) $ 10,000 $ 10,513
Mercer County ND PCR (Basin Electric Power) 6.05% 1/1/2019 (2) 10,000 10,622
---------
21,135
---------
OHIO (6.1%)
Clermont County OH Hosp. Rev. VRDO (Mercy Health System) 4.10% 5/6/1998 3,700 3,700
Cleveland OH Airport System Rev. 0.00% 1/1/2006 (1) 3,475 2,421
Cleveland OH Public Power System Rev. 7.00% 11/15/2016 (1) 5,000 5,700
Cleveland OH School Dist. Board of Educ. GO 5.875% 12/1/2011 (3) 4,720 5,016
Cleveland OH Water Works Rev. 6.25% 1/1/2015 (2) 2,500 2,680
Cuyahoga County OH Hosp. Refunding and Improvement
(Univ. Hosp.) 5.625% 1/15/2021 (1) 11,480 11,707
Cuyahoga County OH Hosp. Rev. VRDO
(Cleveland Clinic Foundation) 4.15% 5/6/1998 LOC 300 300
Cuyahoga County OH Hosp. Rev. VRDO
(Cleveland Clinic Foundation) 4.15% 5/6/1998 400 400
Franklin County OH Convention Center Rev. 0.00% 12/1/2006 (1) 4,355 2,905
Greater Cleveland OH Regional Transp. Auth. GO 5.65% 12/1/2016 (3) 5,000 5,222
Northeast Ohio Regional Sewer Dist. Waste
Water Improvement Rev. 6.50% 11/15/2001 (2)(Prere.) 5,750 6,223
Ohio Air Quality Dev. Auth. PCR (Ohio Edison Project) 7.10% 6/1/2018 (3) 6,500 6,951
Ohio Air Quality Dev. Auth. PCR (Ohio Edison Project) 7.45% 3/1/2016 (3) 9,500 10,163
Ohio Air Quality Dev. Auth. VRDO (Cincinnati Gas & Electric) 4.30% 5/4/1998 LOC 1,400 1,400
Ohio GO 7.625% 8/1/2009 4,345 5,445
Ohio Water Dev Auth. PCR Water Control Loan Fund Rev. 5.125% 6/1/2019 (1)++ 40,750 39,698
Ohio Water Dev Auth. PCR Water Control Loan Fund Rev. 5.50% 12/1/2010 (1)++ 3,575 3,774
Ohio Water Dev Auth. PCR Water Control Loan Fund Rev. 5.50% 6/1/2012 (1)++ 3,175 3,302
Ohio Water Dev Auth. PCR Water Control Loan Fund Rev. 5.50% 6/1/2013 (1)++ 3,420 3,538
Ohio Water Dev Auth. PCR Water Control Loan Fund Rev. 5.50% 6/1/2014 (1)++ 7,475 7,701
---------
128,246
---------
OKLAHOMA (0.3%)
Grand River Dam Auth. OK 5.75% 6/1/2006 (4) 5,800 6,254
---------
OREGON (1.5%)
Oregon Health, Housing, Educ. & Cultural Fac.
(Lewis & Clark College) 6.00% 10/1/2013 (1) 2,250 2,413
Oregon Health Sciences Univ. Rev. 5.25% 7/1/2025 (1) 8,000 7,852
Oregon Veteran Welfare Program VRDO 4.15% 5/6/1998 LOC 6,700 6,700
Portland OR Sewer Rev. GO 5.50% 6/1/2017 (1) 15,000 15,343
---------
32,308
---------
PENNSYLVANIA (8.0%)
Allegheny County PA Hosp. Auth. (Presbyterian Hosp.) 7.125% 7/1/1999 (1)(Prere.) 12,500 13,200
Allegheny County PA Sanitary Auth. 5.50% 12/1/2016 (3) 10,000 10,132
Allegheny County PA Sanitary Auth. 6.00% 12/1/2019 (1) 20,000 21,324
Armstrong County PA Hosp. Auth. Rev. 6.25% 6/1/2013 (2) 18,400 19,717
Lehigh County PA General Purpose Auth. (Lehigh Valley Hosp.) 6.50% 7/1/2010 (1) 6,655 7,311
Pennsylvania Convention Center Auth. Rev. 6.00% 9/1/2019 (3)(ETM) 10,000 10,944
Pennsylvania Convention Center Auth. Rev. 6.70% 9/1/2016 (3)(ETM) 9,970 11,652
Pennsylvania Higher Educ. Fac. Health Services Rev.
(Allegheny/Delaware Valley) 5.875% 11/15/2016 (1) 20,000 21,084
Pennsylvania Turnpike Comm. Rev. 6.00% 6/1/2015 (1) 1,000 1,057
Philadelphia PA Gas Works Rev. 6.00% 5/15/2012 (2) 3,000 3,140
Philadelphia PA Water & Waste Water Rev. 7.00% 6/15/2010 (3) 15,000 17,899
Philadelphia PA Water & Waste Water Rev. 7.00% 6/15/2011 (3) 16,500 19,753
Pittsburgh PA Water & Sewer System Rev. 7.25% 9/1/2014 (3)(ETM) 5,000 6,062
Sharon PA Regional Health System Auth. Rev. 5.00% 12/1/2028 (1) 5,420 5,043
---------
168,318
---------
</TABLE>
44
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PUERTO RICO (0.7%)
Puerto Rico Highway and Transp. Rev. 6.00% 7/1/2018 (4) $ 10,850 $ 12,027
Puerto Rico Public Building Auth. 0.00% 7/1/2001 (3) 4,150 3,634
---------
15,661
---------
RHODE ISLAND (0.3%)
Rhode Island Depositors Econ. Protection Corp. 5.80% 8/1/2012 (1) 2,000 2,181
Rhode Island Public Building Auth. 6.00% 2/1/2011 (2) 3,805 3,951
---------
6,132
---------
SOUTH CAROLINA (3.9%)
Berkeley SC PCR VRDO (Amoco Chemical Co.) 4.20% 5/4/1998 2,900 2,900
Piedmont SC Muni. Power Agency Rev. 5.00% 1/1/2018 (3) 23,585 22,781
Piedmont SC Muni. Power Agency Rev. 6.75% 1/1/2019 (3) 10,600 12,670
Piedmont SC Muni. Power Agency Rev. 6.75% 1/1/2020 (3) 23,515 28,228
Public Service Auth. Rev. of South Carolina 6.25% 1/1/2022 (2) 13,000 14,202
---------
80,781
---------
SOUTH DAKOTA (0.7%)
South Dakota Health & Educ. Fac. Auth. Rev. (McKennan Hosp.) 7.625% 1/1/2008 (1) 10,065 12,235
South Dakota Health & Educ. Fac. Auth. Rev. (McKennan Hosp.) 7.625% 7/1/2014 (1) 1,435 1,515
---------
13,750
---------
TENNESSEE (1.2%)
Health, Educ. & Housing Fac. of Tennessee
(Methodist Health System) 5.00% 4/1/2018 (1) 7,000 6,735
Health, Educ. & Housing Fac. of Tennessee
(Methodist Health System) 5.50% 8/1/2012 (1) 2,500 2,571
Knox County TN Health, Educ. & Housing Fac.
(Fort Sanders Hosp.) 8.00% 1/1/2008 (1) 210 216
Nashville and Davidson County TN Health and Educ. Fac.
(Meharry Medical College) 6.00% 12/1/2012 (2) 3,405 3,777
Tennessee Housing Dev. Agency 7.125% 7/1/2017 (1) 2,665 2,794
Tennessee School Board Auth. Higher Educ. Fac. 5.50% 5/1/2022 (4) 9,500 9,641
---------
25,734
---------
TEXAS (6.0%)
Austin TX Combined Util. System Rev. 5.75% 11/15/2016 (2) 10,000 10,248
Colorado River Muni. Water Dist. of Texas Rev. 6.00% 1/1/2016 (2) 6,000 6,271
Corpus Christi TX Util. System Rev. 7.00% 7/15/2010 (3) 7,500 8,045
Gulf Coast TX Waste Disposal Auth. PCR VRDO (Exxon Project) 4.20% 5/4/1998 1,500 1,500
Harris County TX Toll Road VRDO 4.20% 5/6/1998 2,000 2,000
Houston TX Water & Sewer System Rev. 7.00% 12/1/2020 (1) 12,280 13,358
Houston TX Water Conveyance System 6.25% 12/15/2012 (2) 8,340 9,430
Houston TX Water Conveyance System 6.80% 12/15/2010 (2) 5,490 6,496
Houston TX Water Conveyance System 6.80% 12/15/2011 (2) 8,910 10,566
Houston TX Water Conveyance System 7.50% 12/15/2012 (2) 1,000 1,257
Houston TX Water Conveyance System 7.50% 12/15/2013 (2) 1,100 1,394
Lower Colorado River Auth. of Texas Rev. 5.625% 1/1/2015 (4)(Prere.) 3,055 3,262
North Central TX Health Fac. Dev. Corp. VRDO
(Presbyterian Medical Center) 4.25% 5/4/1998 (1) 200 200
Northeast Hosp. Auth. (Northeast Medical Center) 5.625% 5/15/2017 (4) 7,425 7,643
Northeast Hosp. Auth. (Northeast Medical Center) 5.625% 5/15/2022 (4) 7,110 7,253
Northeast Hosp. Auth. (Northeast Medical Center) 6.00% 5/15/2009 (4) 3,945 4,324
Northeast Hosp. Auth. (Northeast Medical Center) 6.00% 5/15/2010 (4) 2,000 2,196
Northeast Hosp. Auth. (Northeast Medical Center) 6.25% 5/15/2011 (4) 1,400 1,569
Northeast Hosp. Auth. (Northeast Medical Center) 6.25% 5/15/2012 (4) 1,000 1,122
San Antonio TX Electric & Gas System Rev. 0.00% 2/1/2006 (3) 18,000 12,443
San Antonio TX Electric & Gas System Rev. 0.00% 2/1/2007 (3) 15,000 9,844
Texas Turnpike Auth. of Dallas North Toll (Addison Project) 6.60% 1/1/2023 (3) 4,500 5,109
---------
125,530
---------
</TABLE>
45
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
INSURED LONG-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VIRGINIA (0.7%)
Henry County VA Public Service Auth. 6.25% 11/15/2019 (3) $ 1,500 $ 1,595
Norfolk VA Water Dev. 5.90% 11/1/2025 (1) 12,150 12,781
---------
14,376
---------
WASHINGTON (1.3%)
Snohomish County WA Mukilteo School Dist. 5.60% 12/1/2008 (3) 6,960 7,489
Snohomish County WA Mukilteo School Dist. 5.65% 12/1/2009 (3) 9,160 9,913
Snohomish County WA Mukilteo School Dist. 5.65% 12/1/2010 (3) 3,950 4,268
Snohomish County WA Mukilteo School Dist. 5.70% 12/1/2011 (3) 5,000 5,409
---------
27,079
---------
WEST VIRGINIA (1.3%)
West Virginia Hosp. Finance Auth. (Charleston Medical Center) 5.75% 9/1/2013 (1) 8,000 8,437
West Virginia State Building Comm. Rev. (Jail & Correction Fac.) 7.00% 7/1/2011 (1) 7,325 8,812
West Virginia State Building Comm. Rev. (Jail & Correction Fac.) 7.00% 7/1/2012 (1) 7,840 9,444
---------
26,693
---------
WISCONSIN (0.2%)
Wisconsin Health & Educ. (St. Luke's Medical Center) 7.10% 8/15/2011 (1) 4,000 4,411
---------
- -------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $1,943,755) 2,130,516
- -------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-1.7%)
- -------------------------------------------------------------------------------------------------------------------------
Other Assets--Note B 35,967
Payables for Investment Securities Purchased (64,624)
Other Liabilities (8,099)
---------
(36,756)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- -------------------------------------------------------------------------------------------------------------------------
Applicable to 168,706,103 outstanding $.001 par value shares
(authorized 350,000,000 shares) $2,093,760
=========================================================================================================================
NET ASSET VALUE PER SHARE $12.41
=========================================================================================================================
</TABLE>
*See Note A in Notes to Financial Statements.
+Securities with a value of $6,846,000 have been segregated as initial
margin for open futures contracts.
For key to abbreviations and other references, see page 59.
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1998, NET ASSETS CONSISTED OF:
- -------------------------------------------------------------------------------------------------------------------------
AMOUNT PER
(000) SHARE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paid in Capital $1,941,520 $11.51
Undistributed Net Investment Income -- --
Overdistributed Net Realized Gains (34,887) (.21)
Unrealized Appreciation--Note F
Investment Securities 186,761 1.11
Futures Contracts 366 --
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS $2,093,760 $12.41
=========================================================================================================================
</TABLE>
46
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
LONG-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (99.9%)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALASKA (0.3 %)
Valdez AK Marine Terminal VRDO (Exxon Pipeline Project) 4.20% 5/4/1998 $ 4,300 $ 4,300
---------
ARIZONA (0.7%)
Scottsdale AZ IDA (Memorial Hosp.) 6.00% 9/1/2012 (2) 4,000 4,254
Scottsdale AZ IDA (Memorial Hosp.) 6.125% 9/1/2017 (2) 4,700 4,982
---------
9,236
---------
CALIFORNIA (11.5%)
Anaheim CA Public Finance Auth. 6.00% 9/1/2013 (4) 7,000 7,775
Anaheim CA Public Finance Auth. 6.00% 9/1/2014 (4) 2,500 2,771
California GO 6.25% 9/1/2012 5,000 5,650
California Housing Finance Auth. VRDO (Catholic Healthcare West) 3.85% 5/6/1998 (1) 1,900 1,900
California PCR VRDO (Pacific Gas & Electric) 4.05% 5/4/1998 LOC 400 400
California PCR VRDO (Pacific Gas & Electric) 4.10% 5/4/1998 4,500 4,500
California Public Works Rev. (Community College Project) 5.625% 3/1/2016 (2) 11,370 11,817
California Public Works Rev. (Dept. of Corrections) 5.625% 11/1/2016 (1) 16,675 17,366
California State Dept. of Water (Central Valley Project) 4.75% 12/1/2025 3,120 2,843
Culver City CA Redev. Finance Auth. 4.60% 11/1/2020 (2) 6,740 6,042
Fresno CA Sewer Rev. 6.25% 9/1/2010 (2) 6,395 7,250
Irvine CA Assessment Dist. VRDO 4.10% 5/4/1998 LOC 1,500 1,500
Irvine CA Ranch Water Dist. VRDO 4.05% 5/4/1998 2,700 2,700
Los Angeles County CA COP (Capital Fac. Project) 6.50% 3/1/2010 21,815 23,157
Los Angeles County CA Public Works Rev. 5.50% 10/1/2011 5,000 5,224
Los Angeles County CA Public Works Rev. 5.50% 10/1/2012 6,750 6,993
San Bernardino CA COP (Capital Fac. Project) 6.875% 8/1/2024 (ETM) 18,000 22,633
San Bernardino CA Medical Center COP 5.50% 8/1/2019 (1) 11,400 11,512
San Bernardino CA Medical Center COP 5.50% 8/1/2024 (1) 14,295 14,435
---------
156,468
---------
COLORADO (1.1%)
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2016 (1) 10,185 3,807
E-470 Public Highway Auth. CO Rev. 5.00% 9/1/2015 (1) 11,645 11,380
---------
15,187
---------
DISTRICT OF COLUMBIA (1.6%)
District of Columbia GO 5.40% 6/1/2012 (2) 5,000 5,047
District of Columbia GO 6.00% 6/1/2011 (1) 8,990 9,791
District of Columbia GO 6.75% 6/1/2005 (2) 6,140 6,540
---------
21,378
---------
FLORIDA (4.2%)
Dade County FL IDA Rev. VRDO (Florida Power & Light) 4.20% 5/4/1998 2,100 2,100
Florida State Turnpike Auth. Rev. 5.00% 7/1/2019 10,320 9,915
Hillsborough County FL Rev. 5.00% 7/1/2022 (2) 7,575 7,287
Orange County FL School Master Lease COP 5.375% 8/1/2017 (1) 5,000 5,045
Orange County FL School Master Lease COP 5.375% 8/1/2022 (1) 20,285 20,307
Sunrise FL Utilities System Rev. 5.50% 10/1/2018 (2) 12,000 12,588
---------
57,242
---------
GEORGIA (2.1%)
College Park GA IDA GO (Civic Center) 7.00% 9/1/2010 11,500 13,470
Georgia Muni. Gas Auth. VRDO 3.95% 5/6/1998 1,500 1,500
Metro. Atlanta GA Rapid Transit Auth. Rev. 6.25% 7/1/2018 12,170 13,787
---------
28,757
---------
ILLINOIS (4.4%)
Chicago IL Metro. Water Capital Improvement Rev. 7.00% 1/1/2011 20,000 23,740
Chicago IL Public Building Comm. 7.00% 1/1/2020 (1)(ETM) 6,000 7,457
Chicago IL Skyway Toll Bridge Rev. 6.50% 1/1/2010 7,750 8,613
Illinois Dev. Finance Auth. PCR (Illinois Power Co. Project) 7.40% 12/1/2024 (1) 8,150 9,378
Illinois Metro. Pier & Exposition Auth. Rev. 6.75% 6/1/2010 (1) 6,000 7,051
Illinois Toll Highway Auth. Rev. VRDO 4.00% 5/6/1998 (1) 3,260 3,260
---------
59,499
---------
</TABLE>
47
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
LONG-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDIANA (2.7%)
Hammond County IN PCR VRDO (Amoco Oil Co. Project) 4.20% 5/4/1998 $ 1,885 $ 1,885
Indiana Health Fac. Finance Auth. Rev. (Ancilla System, Inc.) 5.75% 7/1/2015 (1) 4,470 4,591
Indiana Educ. Fac. Auth. (Univ. of Notre Dame du Lac Project) 5.25% 3/1/2022 10,530 10,501
Indiana State Office Building Comm. Rev. 6.90% 7/1/2011 16,875 20,084
---------
37,061
---------
LOUISIANA (2.0%)
De Soto Parish LA PCR (Southwestern Electric Power Co.) 7.60% 1/1/2019 24,300 27,599
---------
MASSACHUSETTS (7.9%)
Massachusetts Bay Transp. Auth. 7.00% 3/1/2021 15,000 18,421
Massachusetts GO 5.75% 5/1/2012 7,500 8,006
Massachusetts GO 6.00% 6/1/2011 3,500 3,678
Massachusetts GO 6.50% 8/1/2011 2,345 2,523
Massachusetts Housing Finance Agency 6.125% 11/15/2008 3,500 3,677
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 1,490 1,506
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 (ETM) 5,510 5,580
Massachusetts Turnpike Auth. Rev.
(Metropolitan Highway Systems) 5.125% 1/1/2023 (1) 17,000 16,411
Massachusetts Water Resources Auth. Rev. 5.50% 11/1/2016 (3) 5,000 5,136
Massachusetts Water Resources Auth. Rev. 5.50% 7/15/2022 5,000 5,222
Massachusetts Water Resources Auth. Rev. 6.50% 7/15/2019 + 32,000 37,304
---------
107,464
---------
MICHIGAN (2.1%)
Detroit MI GO 6.375% 4/1/2007 10,500 11,416
Grand Rapids MI Tax Increment Rev. (Downtown Project) 6.875% 6/1/2024 (1) 7,500 8,446
Michigan State Hosp. Fin. Auth. Rev.
(Genesys Regional Medical Center) 5.50% 10/1/2018 3,500 3,416
Michigan State Hosp. Fin. Auth. Rev.
(Genesys Regional Medical Center) 5.50% 10/1/2027 5,000 4,879
Regents of Univ. of Michigan Hosp. Rev. VRDO 4.25% 5/4/1998 900 900
---------
29,057
---------
MISSISSIPPI (0.8%)
Claiborne County MS PCR (Middle South Energy) 9.875% 12/1/2014 10,000 10,571
---------
MISSOURI (0.2 %)
Missouri State Health & Educ. Fac. Auth. VRDO
(Washington Univ.) 4.30% 5/4/1998 3,150 3,150
---------
NEVADA (3.3%)
Clark County NV Building Auth. 5.25% 6/15/2016 (3) 7,000 6,991
Clark County NV Passenger Fac. Rev. 5.375% 7/1/2014 (1) 14,780 14,970
Humboldt County NV PCR (Idaho Power Co.) 8.30% 12/1/2014 9,100 10,818
Nevada GO 5.25% 9/15/2027 12,760 12,479
---------
45,258
---------
NEW JERSEY (2.9%)
New Jersey Health Care Fac. Auth. Rev.
(Atlantic City Medical Center) 6.80% 7/1/2005 3,500 3,857
New Jersey Sports & Exposition Auth. Rev. 6.50% 3/1/2013 10,000 11,592
New Jersey Sports & Exposition Auth. Rev. 6.50% 3/1/2019 20,000 21,738
New Jersey Turnpike Auth. Rev. VRDO 4.00% 5/6/1998 (3) LOC 1,700 1,700
---------
38,887
---------
NEW YORK (13.9%)
Babylon NY Waste Water Fac. GO 9.00% 8/1/2008 (3) 4,900 6,522
Babylon NY Waste Water Fac. GO 9.00% 8/1/2009 (3) 2,800 3,784
Babylon NY Waste Water Fac. GO 9.00% 8/1/2010 (3) 4,900 6,701
Metro. NY Transit Auth. Dedicated Petroleum Tax 5.25% 4/1/2026 (1) 4,675 4,607
Metro. NY Transit Auth. Dedicated Petroleum Tax 6.00% 4/1/2020 (1) 13,665 15,161
</TABLE>
48
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Metro. NY Transit Auth. Rev. 5.70% 7/1/2017 (1) $ 8,320 $ 8,628
Metro. NY Transit Auth. Rev. 6.375% 7/1/2018 (1) 7,500 8,369
New York City NY GO VRDO 4.00% 5/6/1998 LOC 400 400
New York City NY GO 5.75% 2/15/2007 5,000 5,264
New York City NY GO 5.80% 8/1/2008 5,730 6,094
New York City NY GO 5.90% 8/1/2009 6,125 6,533
New York City NY GO 6.375% 8/1/2004 5,000 5,373
New York City NY GO 7.10% 2/1/2002 (1)(Prere.) 6,425 7,127
New York City NY GO 7.10% 2/1/2010 (1) 1,075 1,182
New York City NY Health & Hosp. Rev. (Health System) 3.85% 5/6/1998 LOC 100 100
New York City NY Muni. Water Finance Auth.
Water & Sewer System Rev. 4.20% 5/4/1998 (3) 3,415 3,415
New York City NY Muni. Water Finance Auth.
Water & Sewer System Rev. 7.00% 6/15/2001 (Prere.) 2,520 2,739
New York City NY Muni. Water Finance Auth.
Water & Sewer System Rev. 7.00% 6/15/2009 2,480 2,695
New York Local Govt. Assistance Corp. Rev. 5.375% 4/1/2012 5,275 5,364
New York Local Govt. Assistance Corp. Rev. 5.40% 4/1/2013 13,125 13,306
New York Local Govt. Assistance Corp. Rev. 5.40% 4/1/2015 5,700 5,741
New York Local Govt. Assistance Corp. Rev. 6.50% 4/1/2020 10,000 10,797
New York Local Govt. Assistance Corp. Rev. 6.875% 4/1/2019 8,000 8,874
New York Medical Care Fac. Auth. Rev. 6.875% 2/15/2032 (7) 5,000 5,429
New York State Dormitory Auth. Rev. (State Univ.) 5.00% 5/15/2014 10,000 9,626
New York State Dormitory Auth. Rev. (State Univ.) 7.50% 5/15/2011 18,900 22,875
New York State Energy Res. & Dev. Auth. VRDO (NY Electric & Gas) 4.05% 5/4/1998 LOC 1,100 1,100
Triborough Bridge & Tunnel Auth. NY VRDO 3.90% 5/6/1998 (3) 500 500
Triborough Bridge & Tunnel Auth. NY Rev. (General Purpose Rev.) 6.125% 1/1/2021 10,000 11,207
---------
189,513
---------
NORTH CAROLINA (1.4%)
North Carolina Eastern Muni. Power Agency Rev. 6.50% 1/1/2018 (ETM) 4,625 5,448
North Carolina Eastern Muni. Power Agency Rev. 7.50% 1/1/2009 (Prere.) 4,935 6,109
North Carolina Medical Care Rev. (Wake County Hosp.) 5.25% 10/1/2017 (1) 7,100 7,040
---------
18,597
---------
OHIO (3.7%)
Clermont County OH Hosp. Rev. VRDO (Mercy Health System) 4.10% 5/6/1998 300 300
Columbus OH Sewer Rev. VRDO 4.10% 5/7/1998 1,400 1,400
Cuyahoga County OH Hosp. Rev. VRDO (Cleveland Clinic Foundation) 4.15% 5/6/1998 LOC 1,600 1,600
Cuyahoga County OH Hosp. Rev. VRDO (Cleveland Clinic Foundation) 4.15% 5/6/1998 1,400 1,400
Franklin County OH Hosp. Rev. (Children's Hosp.) 5.75% 11/1/2020 2,945 3,065
Ohio Air Quality Dev. Auth. VRDO
(Cincinnati Gas & Electric Co. Project) 4.10% 5/4/1998 LOC 5,185 5,185
Ohio Air Quality Dev. Auth. VRDO
(Cincinnati Gas & Electric Co. Project) 4.20% 5/4/1998 LOC 4,400 4,400
Ohio Air Quality Dev. Auth. VRDO
(Cincinnati Gas & Electric Co. Project) 4.30% 5/4/1998 LOC 400 400
Ohio GO 4.625% 5/1/1998 5,000 5,000
Ohio Turnpike Comm. Rev. 5.50% 2/15/2026 (1) 26,650 27,010
---------
49,760
---------
OKLAHOMA (0.4%)
Tulsa OK Metro. Util. Auth. 5.75% 9/1/2019 (1) 5,525 5,726
---------
OREGON (0.8%)
Portland County OR Sewer System Rev. 5.50% 6/1/2017 (1) 10,090 10,321
---------
PENNSYLVANIA (9.7%)
Allegheny County PA Hosp. Dev. Auth. VRDO
(Children's Hosp. Pittsburgh) 4.05% 5/7/1998 (1) 350 350
Allegheny County PA Sanitary Auth. 6.00% 12/1/2019 (1) 10,000 10,662
Allegheny County PA Sanitary Auth. 5.375% 12/1/2024 (1) 9,500 9,520
</TABLE>
49
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
LONG-TERM PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Delaware County PA IDA Resource Recovery (Browning Ferris) 6.10% 7/1/2013 $ 10,000 $ 10,793
Pennsylvania GO 6.375% 9/15/2009 11,000 11,838
Pennsylvania GO 6.375% 9/15/2010 8,820 9,476
Pennsylvania GO 6.375% 9/15/2011 5,975 6,424
Pennsylvania GO 6.375% 9/15/2012 13,500 14,515
Pennsylvania Higher Educ. Fac. Auth. VRDO (Carnegie Mellon) 4.25% 5/4/1998 300 300
Pennsylvania Higher Educ. Fac. Auth. VRDO (Carnegie Mellon) 4.25% 5/4/1998 700 700
Pennsylvania Housing Finance Agency Residential Dev. Rev. 7.50% 7/1/2006 ++ 3,890 4,176
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. 5.125% 5/15/2018 (2) 10,000 9,654
Philadelphia PA Water & Waste Water Rev. 7.00% 6/15/2010 (3) 20,000 23,865
Pittsburgh PA School Dist. 5.50% 9/1/2014 (1) 4,715 4,813
Pittsburgh PA Water & Sewer Auth. Rev. 6.50% 9/1/2013 (3) 10,000 11,663
Radnor Township PA School Auth. 9.875% 9/15/2000 (ETM) 295 309
Sayre PA Health Care Fac. Auth. Hosp. Rev. VRDO
(VHA of PA Pooled Capital Asset Financing Program) 4.10% 5/6/1998 (2) 3,000 3,000
---------
132,058
---------
PUERTO RICO (1.5%)
Puerto Rico Electric Power Auth. Rev. 5.25% 7/1/2014 (4) 2,000 2,029
Puerto Rico Electric Power Auth. Rev. 5.25% 7/1/2014 (1) 2,580 2,617
Puerto Rico GO 5.00% 7/1/1998 5,000 5,008
Puerto Rico Highway and Transp. Rev. 5.00% 7/1/2016 (4) 10,605 10,393
---------
20,047
---------
SOUTH CAROLINA (1.2%)
Piedmont SC Muni. Power Agency Rev. 6.50% 1/1/2015 (3) 12,210 14,173
Piedmont SC Muni. Power Agency Rev. 6.50% 1/1/2015 (3)(ETM) 2,035 2,375
---------
16,548
---------
TEXAS (12.8%)
Bexar County TX Health Fac. Dev. Corp (Baptist Health System) 5.375% 11/15/2022 (1) 5,000 4,963
Gulf Coast TX Waste Disp. Auth. VRDO (Exxon Project) 4.20% 5/4/1998 4,000 4,000
Harris County TX IDA VRDO (Shell Oil Co. Project) 4.20% 5/4/1998 3,500 3,500
Harris County TX Toll Road VRDO 4.20% 5/6/1998 200 200
Houston TX Hotel Occupancy Tax Rev. 5.50% 7/1/2011 (4) 21,760 22,392
Houston TX Public Improvement 7.00% 3/1/2008 5,000 5,880
Houston TX Water & Sewer System Rev. 0.00% 12/1/2012 (2) 4,500 2,104
Houston TX Water & Sewer System Rev. 6.375% 12/1/2001 (2)(Prere.) 360 391
Houston TX Water & Sewer System Rev. 6.375% 12/1/2017 (2) 5,640 6,044
North East TX Independent School Dist. 5.00% 2/1/2016 6,425 6,255
San Antonio TX Electric & Gas System Rev. 5.00% 2/1/2017 14,135 13,618
Texas City TX IDR (Arco Pipeline Project) 7.375% 10/1/2020 17,000 21,531
Texas GO 5.50% 4/1/2002 (Prere.) 10,345 10,944
Texas GO 5.50% 4/1/2020 4,655 4,676
Texas State Turnpike Auth. Rev. (President George Bush Turnpike) 5.25% 1/1/2023 (3) 19,300 18,984
Texas Water Dev. Board Rev. 5.125% 7/15/2018 10,000 9,772
Texas Water Dev. Board Rev. 5.25% 7/15/2017 7,000 7,018
Texas Water Dev. Board Rev. 6.50% 7/15/2010 17,425 20,206
Texas Water Dev. Board Rev. 7.05% 8/1/2025 5,655 6,370
Texas Water GO 5.25% 8/1/2028 5,435 5,378
----------
174,226
----------
UTAH (0.2%)
Intermountain Power Agency UT Power Supply Rev. 5.75% 7/1/2019 (1) 3,000 3,128
---------
VIRGINIA (0.4%)
Richmond VA Metro. Expressway Auth. Rev. 6.375% 7/15/2016 (3) 5,400 5,910
---------
WASHINGTON (3.2%)
Chelan County WA Public Util. Dist. (Rock Island Hydro Project) 0.00% 6/1/2017 11,685 4,179
Chelan County WA Public Util. Dist. (Rock Island Hydro Project) 0.00% 6/1/2018 10,000 3,383
WA Dept. of Ecology COP (State Office Bldg. Project) 5.00% 4/1/2016 27,820 26,736
Washington GO VRDO 4.05% 5/6/1998 1,600 1,600
</TABLE>
50
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington GO 5.50% 5/1/2018 $ 4,000 $ 4,189
Washington GO 6.75% 2/1/2015 3,450 4,099
---------
44,186
---------
WEST VIRGINIA (0.8%)
West Virginia State Building Comm. Rev. 7.00% 7/1/2014 (1) 8,975 10,904
---------
WISCONSIN (1.8%)
Wisconsin Clean Water Rev. 6.875% 6/1/2011 20,500 24,343
---------
WYOMING (0.3%)
Lincoln WY PCR VRDO (Exxon Project) 4.20% 5/4/1998 1,100 1,100
Sublette County WY (Exxon Project) 4.20% 5/4/1998 3,400 3,400
---------
4,500
---------
- -------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $1,257,593) 1,360,881
- -------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
Other Assets--Note B 22,932
Liabilities (22,040)
---------
892
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- -------------------------------------------------------------------------------------------------------------------------
Applicable to 122,337,791 outstanding $.001 par value shares
(authorized 350,000,000 shares) $1,361,773
=========================================================================================================================
NET ASSET VALUE PER SHARE $11.13
=========================================================================================================================
</TABLE>
*See Note A in Notes to Financial Statements.
+Securities with a value of $2,565,000 have been segregated as initial
margin for open futures contracts.
For key to abbreviations and other references, see page 59.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1998, NET ASSETS CONSISTED OF:
- -------------------------------------------------------------------------------------------------------------------------
AMOUNT PER
(000) SHARE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paid in Capital $1,269,441 $10.38
Undistributed Net Investment Income -- --
Overdistributed Net Realized Gains (10,867) (.09)
Unrealized Appreciation (Depreciation)--Note F
Investment Securities 103,288 .84
Futures Contracts (89) --
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS $1,361,773 $11.13
=========================================================================================================================
</TABLE>
51
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
HIGH-YIELD PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS (101.2%)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALABAMA (0.2%)
Alabama Special Care Fac. (Baptist Health System) 5.875% 11/15/2026 (1) $ 5,000 $ 5,025
---------
ALASKA (0.1%)
Alaska Housing Finance Corp. VRDO 4.10% 5/6/1998 320 320
North Slope Borough AK GO 7.50% 6/30/2001 (4) 3,000 3,279
---------
3,599
---------
ARIZONA (1.6%)
Board of Regents Rev. (Univ. of Arizona) 6.20% 6/1/2016 26,660 30,062
Maricopa County AZ PCR VRDO (Arizona Public Service Co.) 4.15% 5/4/1998 LOC 1,400 1,400
Pima County AZ IDA Rev. (La Cholla Project) 8.50% 7/1/2020 + 6,650 6,963
---------
38,425
---------
ARKANSAS (0.2%)
North Little Rock AR Electric System Rev. 6.50% 7/1/2015 (1) 3,450 4,015
---------
CALIFORNIA (12.1%)
California Educ. Fac. Auth. (Univ. of Southern California) 5.70% 10/1/2015 6,000 6,333
California Health Fac. Finance Auth. Rev. VRDO
(Adventist Health System West Sutter Health) 3.80% 5/7/1998 LOC 1,700 1,700
California Health Fac. Finance Auth. VRDO
(Catholic Health Care West) 3.85% 5/6/1998 (1) 2,100 2,100
California Health Fac. Finance Auth. Rev. VRDO
(Kaiser Permanente) 4.15% 5/6/1998 300 300
California Public Works Rev. (Community College Project) 5.375% 3/1/2010 3,555 3,682
California Public Works Rev. (Community College Project) 5.375% 3/1/2011 3,905 4,011
California Public Works Rev. (Community College Project) 5.375% 3/1/2012 4,265 4,348
California Public Works Rev. (Community College Project) 7.00% 3/1/2004 (Prere.) 10,000 11,480
California Public Works Rev. (Dept. of Corrections) 5.375% 11/1/2013 7,820 7,930
California Public Works Rev. (Univ. Project) 6.40% 12/1/2016 (2) 8,450 9,332
California Veterans GO 5.20% 12/1/2010 22,000 22,266
California Veterans GO 5.25% 12/1/2011 38,000 38,360
Irvine CA Assessment Dist. VRDO (Orange County-Irvine County) 3.85% 5/6/1998 LOC 2,200 2,200
Irvine CA Ranch Water Dist. VRDO 4.05% 5/4/1998 LOC 6,900 6,900
Irvine CA Ranch Water Dist. VRDO 4.10% 5/4/1998 LOC 2,100 2,100
Los Angeles County CA Pension Obligation VRDO 3.90% 5/6/1998 (2) 400 400
Orange County CA Airport Rev. 5.375% 7/1/2008 (1) 5,745 6,008
Orange County CA Airport Rev. 5.50% 7/1/2004 (1) 3,555 3,746
Orange County CA Airport Rev. 6.00% 7/1/2001 (1) 7,245 7,615
Orange County CA Airport Rev. 6.00% 7/1/2005 (1) 4,020 4,363
Orange County CA Airport Rev. 6.00% 7/1/2006 (1) 4,565 4,973
Orange County CA Airport Rev. 6.00% 7/1/2007 (1) 3,135 3,426
Orange County CA Improvement Boards VRDO
(Irvine Coast Assessment Dist.) 4.10% 5/4/1998 LOC 1,900 1,900
Orange County CA Local Transp. Auth. Sales Tax Rev. 5.25% 2/15/2005 16,600 17,320
Sacramento CA Finance Auth. Lease Rev. 5.40% 11/1/2020 12,565 12,829
San Bernardino County CA COP (Capital Fac. Project) 6.875% 8/1/2024 (ETM) 25,220 31,711
San Bernardino County CA COP (Medical Center Funding) 7.00% 8/1/2020 12,180 14,811
San Joaquin Hills CA Transp. Agency Rev. 0.00% 1/1/2001 (ETM) 7,340 6,557
San Joaquin Hills CA Transp. Agency Rev. 0.00% 1/1/2002 (ETM) 14,000 11,964
San Joaquin Hills CA Transp. Agency Rev. 0.00% 1/15/2007 (1) 3,500 2,329
San Joaquin Hills CA Transp. Agency Rev. 0.00% 1/15/2009 (1) 4,095 2,441
San Joaquin Hills CA Transp. Agency Rev. 0.00% 1/15/2016 22,500 14,446
San Joaquin Hills CA Transp. Agency Rev. 0.00% 1/15/2017 20,000 12,886
Southern California Public Power Auth. Rev. 6.00% 7/1/2018 3,985 4,055
Univ. of California Hosp. (Medical Center) 6.00% 7/1/2026 (2) 10,260 10,902
---------
297,724
---------
COLORADO (2.8%)
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2003 (1) 8,200 6,426
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2006 (1) 22,000 14,791
</TABLE>
52
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2007 (1) $ 12,500 $ 7,977
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2008 (1) 14,000 8,471
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2009 (1) 16,195 9,262
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2010 (1) 7,185 3,870
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2012 (1) 26,795 12,694
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2013 (1) 5,000 2,232
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2014 (1) 5,000 2,101
E-470 Public Highway Auth. CO Rev. 0.00% 9/1/2015 (1) 5,000 1,975
---------
69,799
---------
DELAWARE (0.1%)
Delaware Econ. Dev. Auth. VRDO (Hosp. Bill & Collection Service) 4.10% 5/6/1998 (5) 3,200 3,200
---------
DISTRICT OF COLUMBIA (4.5%)
District of Columbia GO 5.50% 6/1/1998 20,000 20,018
District of Columbia GO 5.75% 6/1/2010 (1) 15,000 15,983
District of Columbia GO 6.00% 6/1/2012 (1) 7,000 7,620
District of Columbia VRDO (George Washington Univ.) 4.70% 5/6/1998 LOC 19,200 19,200
Metro. Washington D.C. Airport Auth. Rev. 5.50% 10/1/2009 (3) 6,795 7,142
Metro. Washington D.C. Airport Auth. Rev. 5.50% 10/1/2010 (3) 7,270 7,596
Metro. Washington D.C. Airport Auth. Rev. 5.50% 10/1/2024 (1) 10,630 10,681
Metro. Washington D.C. Airport Auth. Rev. 5.70% 10/1/2007 (1) 12,900 13,705
Metro. Washington D.C. Airport Auth. Rev. 5.875% 10/1/2015 (1) 8,400 8,779
---------
110,724
---------
FLORIDA (6.0%)
Citrus County FL PCR (Florida Power Corp.) 6.35% 2/1/2022 6,500 6,994
Collier County FL Master Lease Project COP 5.00% 2/15/2016 (4) 5,550 5,453
Dade County FL Aviation Rev. (Miami International Airport) 5.50% 10/1/2002 (4) 4,270 4,448
Dade County FL Aviation Rev. (Miami International Airport) 5.75% 10/1/2003 (4) 17,950 18,987
Dade County FL Aviation Rev. (Miami International Airport) 5.75% 10/1/2004 (4) 11,850 12,620
Dade County FL Aviation Rev. (Miami International Airport) 5.75% 10/1/2005 (4) 7,490 7,992
Dade County FL Water & Sewer System Rev. 5.25% 10/1/2026 20,000 19,824
Florida Dept. of General Services Rev.
(Dept. of Environmental Protection Preservation-2000) 6.00% 7/1/2004 (2) 10,815 11,728
Hillsborough County FL Aviation Auth. Rev. (Tampa Airport) 5.25% 10/1/2003 (2) 2,000 2,073
Orange County FL School Master Lease COP 6.00% 8/1/2008 (1) 11,580 12,755
Orange County FL School Master Lease COP 6.00% 8/1/2009 (1) 12,255 13,412
Orange County FL School Master Lease COP 6.00% 8/1/2010 (1) 12,825 13,985
Orlando FL Util. Comm. Rev. 6.75% 10/1/2017 2,200 2,638
Palm Beach County FL Solid Waste Auth. Rev. 6.00% 10/1/2007 (2) 10,850 11,983
Tarpon Springs FL Health Fac. Auth. Rev. (Tarpon Springs Hosp.) 8.75% 5/1/2012 4,000 4,090
---------
148,982
---------
GEORGIA (2.2%)
Burke County GA Dev. Auth. VRDO (Georgia Power Co.) 4.20% 5/4/1998 9,200 9,200
Cartersville GA Water & Waste Water Fac.
(Anheuser-Busch Cos., Inc.) 7.40% 11/1/2010 5,000 6,081
Dalton County GA Dev. Auth. (Hamilton Health Care System) 5.50% 8/15/2017 (1) 5,000 5,187
Dalton County GA Dev. Auth. (Hamilton Health Care System) 5.50% 8/15/2026 (1) 12,000 12,420
Georgia Muni. Electric Auth. Rev. 6.60% 1/1/2018 (1) 5,000 5,879
Georgia Muni. Gas Auth. VRDO 3.95% 5/6/1998 LOC 2,000 2,000
Savannah GA Hosp. Auth. Rev. (Candler Hosp.) 7.00% 1/1/2023 13,000 13,918
---------
54,685
---------
HAWAII (1.5%)
Hawaii Dept. of Budget & Finance (Hawaiian Electric Co.) 4.95% 4/1/2012 13,500 13,432
Hawaii GO 6.25% 3/1/2007 (3) 5,000 5,532
Hawaii Harbor Capital Improvement Rev. 5.50% 7/1/2027 (1) 18,500 18,575
---------
37,539
---------
ILLINOIS (5.7%)
Chicago IL Public Building Comm. 7.00% 1/1/2015 (1)(ETM) 10,000 11,629
Chicago IL Public Building Comm. 7.00% 1/1/2020 (1)(ETM) 10,000 12,428
</TABLE>
53
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
HIGH-YIELD PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Chicago IL Skyway Toll Bridge Rev. 6.75% 1/1/2004 (Prere.) $ 28,185 $ 31,854
Cook County IL GO 6.60% 11/15/2022 (1) 12,000 13,306
Illinois Dev. Finance Auth. PCR 4.40% 12/1/2006 (2) 15,000 14,614
Illinois Dev. Finance Auth. Rev. (Regency Park Project) 10.25% 4/15/2019 - 6,500 5,265
Illinois Dev. Finance Auth. Rev. (Regency Park Project) 10.625% 4/15/2020 - 6,000 4,860
Illinois Dev. Finance Auth. Rev. PCR (Illinois Power Co. Project) 7.40% 12/1/2024 (1) 20,000 23,014
Illinois Health Fac. Auth. Certificate of Beneficial Interest
(Adventist Living Centers) -- -- - 770 69
Illinois Health Fac. Auth. Rev. (Centegra Health System) 5.10% 9/1/2011 3,105 3,032
Illinois Health Fac. Auth. Rev. (Centegra Health System) 5.25% 9/1/2018 3,500 3,364
Illinois Health Fac. Auth. Rev. (Centegra Health System) 5.25% 9/1/2024 7,500 7,120
Illinois Health Fac. Auth. Rev. (United Medical Center) 8.125% 7/1/2003 (Prere.) 2,565 2,871
Illinois Toll Highway Auth. Rev. 6.30% 1/1/2011 5,000 5,624
Loves Park IL First Mortgage Rev. (Hoosier Care) 9.75% 8/1/2019 1,520 1,615
---------
140,665
---------
INDIANA (3.0%)
Indiana Educ. Fac. Auth. VRDO (Univ. of Notre Dame Du Lac Project) 4.00% 5/7/1998 2,300 2,300
Indiana Health Fac. Finance Auth. Rev. (Ancilla System, Inc.) 7.375% 7/1/2023 19,400 23,641
Indiana Health Fac. Hosp. Rev. VRDO (Charity Obligated Group) 3.95% 5/6/1998 1,600 1,600
Indiana Office Building Comm. Rev. (Capitol Complex) 6.90% 7/1/2011 + 15,660 18,638
Indianapolis IN Local Public Improvement Bond Bank 6.75% 2/1/2014 21,500 25,802
Indianapolis IN Local Public Improvement Bond Bank 6.75% 2/1/2020 2,500 2,755
---------
74,736
---------
IOWA (0.4%)
Des Moines IA Rev. (Des Moines General Hosp.) 8.25% 11/15/2011 9,620 11,134
---------
KANSAS (0.8%)
Kansas Dev. Fin. Auth. Rev. (Sisters of Charity) 5.00% 12/1/2025 (1) 20,000 18,996
---------
KENTUCKY (0.5%)
Jefferson County KY (Jewish Hosp. Health) 5.65% 1/1/2017 (2) 8,000 8,257
Jefferson County KY (Jewish Hosp. Health) 5.70% 1/1/2021 (2) 2,000 2,064
Kentucky Property & Buildings Comm. Rev. 5.80% 9/1/2006 3,100 3,289
---------
13,610
---------
LOUISIANA (1.5%)
Iberia Parish LA Hosp. Services Dist. 8.00% 5/26/2016 6,250 6,859
Louisiana GO 5.25% 4/15/2010 (4)++ 10,610 10,943
Louisiana Health Educ. Auth. (Lambeth House Project) 8.75% 10/1/2017 12,295 14,549
West Feliciana Parish LA PCR (Gulf States Util.) 9.00% 5/1/2015 4,000 4,421
---------
36,772
---------
MARYLAND (0.2%)
Hagerstown MD Energy Financing Admin. Solid Waste Disp. Rev.
(Hagerstown Fiber Project) 9.00% 10/15/2016 - 17,500 5,250
---------
MASSACHUSETTS (6.1%)
Massachusetts Consolidated Loan GO 5.75% 5/1/2012 (2) 5,000 5,345
Massachusetts GO 6.00% 6/1/2011 14,750 15,500
Massachusetts Industrial Finance Agency Solid Waste Disp.
(Massachusetts Recycling Assoc.) 9.00% 8/1/2016 - 17,000 6,630
Massachusetts Industrial Finance Agency (Refusetech Inc. Project) 6.30% 7/1/2005 34,500 37,172
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 2,335 2,361
Massachusetts Turnpike Auth. BAN 5.00% 6/1/1999 (ETM) 8,665 8,774
Massachusetts Water Resources Auth. Rev. 5.50% 7/15/2022 22,420 23,417
Massachusetts Water Resources Auth. Rev. 6.50% 7/15/2019 43,700 50,943
---------
150,142
---------
MICHIGAN (5.3%)
Detroit MI GO 6.25% 4/1/2005 13,000 14,035
Detroit MI GO 6.375% 4/1/2006 8,635 9,415
Dickinson County MI Memorial Hosp. System Rev. 7.625% 11/1/2005 1,065 1,195
</TABLE>
54
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dickinson County MI Memorial Hosp. System Rev. 8.00% 11/1/2014 $ 5,700 $ 6,512
Flint MI Hosp. Building Auth. (Hurley Medical Center) 5.25% 7/1/2016 3,000 2,874
Michigan Hosp. Finance Auth. Rev. (Genesys Health System) 5.50% 10/1/2027 15,000 14,636
Michigan Hosp. Finance Auth. Rev. (Genesys Health System) 7.50% 10/1/2005 (Prere.) 6,620 7,833
Michigan Hosp. Finance Auth. Rev. (Genesys Health System) 8.10% 10/1/2005 (Prere.) 5,000 6,175
Michigan Hosp. Finance Auth. Rev. (Genesys Health System) 8.125% 10/1/2005 (Prere.) 15,000 18,548
Michigan Housing Dev. Auth. Rev. 6.30% 4/1/2004 6,500 6,992
Michigan State Building Auth. (Facilities Program) 5.50% 10/15/2005 14,585 15,396
Michigan Public Power Agency Rev. (Belle River Project) 5.50% 1/1/2013 27,000 27,328
---------
130,939
---------
MINNESOTA (0.8%)
Rochester MN Health Care Fac. Rev. (Mayo Foundation) 5.375% 11/15/2018 ++ 12,000 12,047
Washington County MN Housing & Redev. Auth. Rev.
(Woodland Park Project) 0.00% 5/1/2020 35,070 2,226
Washington County MN Housing & Redev. Auth. Rev.
(Woodland Park Project) 9.75% 5/1/2020 5,000 4,750
---------
19,023
---------
MISSISSIPPI (0.9%)
Claiborne County MS PCR (Middle South Energy) 9.875% 12/1/2014 21,000 22,198
---------
MISSOURI (1.4%)
Missouri Health & Educ. Fac. Auth. (SSM Health Care) 5.00% 6/1/2022 (1)++ 28,000 26,571
Missouri Health & Educ. Fac. Auth.
(St. Luke Mission Health System) 5.375% 11/15/2016 (1) 8,000 8,035
---------
34,606
---------
MONTANA (0.7%)
Montana Health Fac. Auth. (Sisters of Charity) 5.00% 12/1/2024 (1) 17,500 16,541
---------
NEW HAMPSHIRE (0.3%)
New Hampshire Health & Higher Educ. Rev.
(Catholic Medical Center) 6.00% 7/1/2017 6,580 6,652
---------
NEW JERSEY (1.7%)
New Jersey Econ. Dev. Auth. Market Transition Fac. 5.875% 7/1/2011 (1) 8,000 8,503
New Jersey Econ. Dev. Auth. Water Fac. Rev. VRDO
(United Water NJ) 4.00% 5/4/1998 (2) 3,000 3,000
New Jersey Sports & Exposition Auth. Rev. 6.50% 3/1/2013 15,000 17,387
New Jersey Transp. Trust 6.00% 6/15/2011 (1) 10,000 10,863
New Jersey Turnpike Auth. VRDO 4.00% 5/6/1998 (3) LOC 1,300 1,300
---------
41,053
---------
NEW YORK (10.1%)
Metro. NY Transit Auth. Rev. 6.00% 4/1/2020 (1) 18,000 19,970
Metro. NY Transit Auth. Rev. 6.375% 7/1/2004 (1)(Prere.) 25,690 28,668
Metro. NY Transit Auth. Rev. 7.375% 7/1/2008 22,870 26,646
Muni. Assistance Corp. for New York City NY VRDO 3.85% 5/6/1998 LOC 2,100 2,100
New York City NY GO 5.90% 8/1/2009 5,150 5,493
New York City NY GO VRDO 4.00% 5/6/1998 LOC 2,200 2,200
New York City NY GO VRDO 4.15% 5/4/1998 (1) 2,300 2,300
New York City NY Health & Hosp. Corp. Rev. VRDO (Health System) 3.85% 5/6/1998 LOC 1,200 1,200
New York City NY Muni. Water Finance Auth. Water &
Sewer System Rev. 5.50% 6/15/2020 25,000 25,044
New York State Dormitory Auth. Rev. (City Univ.) 5.50% 7/1/2001 1,955 2,010
New York State Dormitory Auth. Rev. (City Univ.) 5.50% 7/1/2002 3,050 3,145
New York State Dormitory Auth. Rev. (City Univ.) 5.50% 7/1/2003 1,000 1,035
New York State Dormitory Auth. Rev. (City Univ.) 5.50% 7/1/2004 500 518
New York State Dormitory Auth. Rev. (City Univ.) 5.50% 7/1/2005 1,000 1,035
New York State Dormitory Auth. Rev. (City Univ.) 5.50% 7/1/2006 500 517
New York State Dormitory Auth. Rev. (City Univ.) 6.375% 7/1/2002 (Prere.) 1,810 1,973
New York State Dormitory Auth. Rev. (City Univ.) 6.375% 7/1/2008 1,340 1,442
</TABLE>
55
<PAGE> 95
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
HIGH-YIELD PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York State Dormitory Auth. Rev. (City Univ.) 7.50% 7/1/2010 $ 5,500 $ 6,607
New York State Dormitory Auth. Rev. (State Univ.) 5.375% 5/15/2007 (2) 2,100 2,205
New York State Dormitory Auth. Rev. (State Univ.) 7.50% 5/15/2013 11,500 14,333
New York State Local Govt. Assistance Corp. Rev. 6.00% 4/1/2016 6,400 6,900
New York State Local Govt. Assistance Corp. Rev. 6.50% 4/1/2001 (Prere.) 16,110 17,393
New York State Local Govt. Assistance Corp. Rev. 7.00% 4/1/2001 (Prere.) 6,320 6,911
New York State Power Auth. Rev. 6.50% 1/1/2002 (Prere.) 17,010 18,558
New York State Power Auth. Rev. 6.50% 1/1/2019 9,240 10,094
Port Auth. of New York & New Jersey Special Obligation Rev.
(JFK International Airport) 5.75% 12/1/2022 (1) 8,455 8,729
Port Auth. of New York & New Jersey Special Obligation Rev.
(JFK International Airport) 6.25% 12/1/2008 (1) 4,000 4,435
Triborough Bridge & Tunnel Auth. NY Rev.
(Convention Center Project) 7.25% 1/1/2010 13,500 15,832
Triborough Bridge & Tunnel Auth. NY Rev. (General Purpose Rev.) 5.50% 1/1/2017 10,000 10,428
---------
247,721
---------
NORTH CAROLINA (1.3%)
Charlotte NC Airport Refunding Rev. VRDO 4.00% 5/6/1998 (1) 1,330 1,330
New Hanover County NC Hosp. Rev. (Regional Medical Center) 5.75% 10/1/2016 (2) 12,500 13,027
North Carolina Eastern Muni. Power Agency Rev. 5.00% 1/1/2020 (ETM) 10,385 10,209
North Carolina Eastern Muni. Power Agency Rev. 6.50% 1/1/2018 (ETM) 6,665 7,851
---------
32,417
---------
OHIO (2.3%)
Butler County OH Transp. Improvement Dist. Rev. 5.125% 4/1/2017 (4) 5,000 4,920
Butler County OH Transp. Improvement Dist. Rev. 5.50% 4/1/2009 (4) 3,000 3,161
Clermont County OH Hosp. Rev. VRDO (Mercy Health System) 4.10% 5/6/1998 4,200 4,200
Lucas County OH Hosp. Fac. Rev. (Flower Memorial Hosp.) 8.125% 12/1/2001 (Prere.) 8,900 10,150
Montgomery County OH Hosp. Fac. Rev. (Grandview Hosp.) 5.20% 12/1/2006 (9) 5,000 5,111
Montgomery County OH Hosp. Fac. Rev. (Grandview Hosp.) 5.25% 12/1/2004 (9) 2,250 2,328
Montgomery County OH Hosp. Fac. Rev. (Grandview Hosp.) 5.35% 12/1/2008 (9) 4,615 4,769
Montgomery County OH Hosp. Fac. Rev. (Grandview Hosp.) 5.375% 12/1/2005 (9) 2,400 2,498
Montgomery County OH Hosp. Fac. Rev. (Grandview Hosp.) 5.40% 12/1/2009 (9) 3,850 3,985
Montgomery County OH Hosp. Fac. Rev. (Grandview Hosp.) 5.75% 12/1/2007 (9) 3,300 3,518
Scioto County OH Marine Terminal Fac. VRDO
(Norfolk Southern Corp.) 5.50% 5/6/1998 12,000 12,000
---------
56,640
---------
OKLAHOMA (0.6%)
Jackson County OK Memorial Hosp. Auth. Rev. (Jackson Memorial) 6.75% 8/1/2004 4,700 4,886
Jackson County OK Memorial Hosp. Auth. Rev. (Jackson Memorial) 7.30% 8/1/2015 4,000 4,327
Norman OK Regional Hosp. Auth. 5.625% 9/1/2016 (1) 4,510 4,640
---------
13,853
---------
OREGON (1.2%)
Oregon State Department Administrative Services 5.70% 5/1/2016 (2) 4,290 4,492
Port Auth. of Portland OR Airport Rev. 5.625% 7/1/2026 (3) 9,000 9,163
Portland County OR Sewer System Rev. 5.50% 6/1/2017 (1) 15,000 15,343
---------
28,998
---------
PENNSYLVANIA (7.9%)
Allegheny County PA Airport Rev. (Pittsburgh International Airport) 5.75% 1/1/2011 (1) 5,000 5,310
Allegheny County PA Hosp. Dev. Auth. VRDO
(Health & Educ. Research) 4.20% 5/6/1998 LOC 1,300 1,300
Allegheny County PA Sanitary Auth. 6.00% 12/1/2019 (1) 14,630 15,599
Delaware County PA IDA (Browning Ferris) 6.10% 7/1/2013 19,000 20,506
Geisinger Health System Auth. of PA VRDO (Geisinger Health System) 4.25% 5/4/1998 800 800
Langhorne PA Higher Educ. & Health Auth. Rev. (Lower Bucks Hosp.) 7.30% 7/1/2012 4,500 4,769
Langhorne PA Higher Educ. & Health Auth. Rev. (Lower Bucks Hosp.) 7.35% 7/1/2022 13,200 14,013
Montgomery County PA Higher Educ. & Health Auth. Rev.
(Brittany Point Project) 8.50% 1/1/2003 (Prere.) 5,000 5,908
Pennsylvania Convention Center Auth. Rev. 6.60% 9/1/2009 (4) 2,500 2,814
Pennsylvania Convention Center Auth. Rev. 6.70% 9/1/2014 (4) 3,500 3,921
Pennsylvania Convention Center Auth. Rev. 6.75% 9/1/2019 (4) 3,695 4,150
</TABLE>
56
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania Econ. Dev. Auth. Rev. (Colver Project) 7.05% 12/1/2010 $ 2,500 $ 2,763
Pennsylvania Econ. Dev. Auth. Rev. (Colver Project) 7.125% 12/1/2015 14,000 15,503
Pennsylvania Housing Finance Agency Rev. 7.60% 7/1/2013 10,000 10,752
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. Rev.
(Children's Seashore Hosp.) 7.00% 8/15/2012 3,540 3,869
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. Rev.
(Children's Seashore Hosp.) 7.00% 8/15/2017 1,000 1,090
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. Rev.
(Children's Seashore Hosp.) 7.00% 8/15/2022 500 543
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. Rev.
(Methodist Hosp.) 7.75% 7/1/2004 (Prere.) 12,290 14,431
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. Rev.
(Roxborough Memorial Hosp.) 7.25% 3/1/2024 9,645 10,122
Philadelphia PA Muni. Auth. Rev. 6.125% 7/15/2008 4,000 4,234
Philadelphia PA Muni. Auth. Rev. 6.25% 7/15/2013 5,785 6,103
Philadelphia PA Muni. Auth. Rev. 6.30% 7/15/2017 1,750 1,848
Philadelphia PA Muni. Auth. Rev. 8.625% 11/15/2016 1,145 1,273
Philadelphia PA Water & Waste Water Rev. 7.00% 6/15/2011 (3) 21,500 25,739
Scranton-Lackawanna PA Health & Welfare (Moses Taylor Hosp.) 8.50% 7/1/2001 (Prere.) 14,375 16,401
---------
193,761
---------
PUERTO RICO (0.6%)
Puerto Rico Electric Power Auth. Rev. 5.25% 7/1/2016 (4) 5,000 5,040
Puerto Rico GO 5.00% 7/1/1998 10,600 10,617
---------
15,657
---------
RHODE ISLAND (0.4%)
Rhode Island Convention Center Auth. Rev. 5.75% 5/15/2020 (2) 5,000 5,186
Rhode Island Public Building Auth. 5.25% 2/1/2010 (2) 5,000 5,079
---------
10,265
---------
SOUTH CAROLINA (0.3%)
Piedmont SC Muni. Power Agency Rev. 6.25% 1/1/2021 (3) 6,640 7,550
---------
TEXAS (10.2%)
Austin TX Airport System Rev. 6.125% 11/15/2025 (1) 38,000 40,381
Austin TX Airport System Rev. 6.45% 11/15/2020 17,040 18,541
Austin TX Water, Sewer & Electric Rev. 14.00% 11/15/2001 200 235
Harris County TX Health Fac. Dev. Corp. VRDO (Methodist Hosp.) 4.25% 5/4/1998 2,500 2,500
Harris County TX Hosp. Dist. Rev. 7.40% 2/15/2010 (2) 17,500 20,906
Harris County TX Improvement GO 0.00% 10/1/2013 (1) 9,630 4,279
Harris County TX Toll Road 6.25% 8/15/2015 (1) 5,000 5,568
Harris County TX Toll Road VRDO 4.20% 5/6/1998 3,900 3,900
Hidalgo County TX Health Mission Hosp. 6.875% 8/15/2026 7,880 8,647
Houston TX Water & Sewer System Rev. 0.00% 12/1/2004 (2) 12,590 9,289
Houston TX Water & Sewer System Rev. 0.00% 12/1/2011 (2) 24,810 12,384
Houston TX Water & Sewer System Rev. 6.375% 12/1/2001 (2)(Prere.) 290 315
Houston TX Water & Sewer System Rev. 6.375% 12/1/2017 (2) 4,530 4,854
Odessa TX Junior College Dist. Rev. 8.125% 12/1/2018 10,000 11,514
San Antonio TX Electric & Gas Rev. 5.00% 2/1/2017 3,500 3,372
Southwest Higher Educ. Auth. TX VRDO (Southern Methodist Univ.) 4.25% 5/4/1998 LOC 1,200 1,200
Texas GO 5.50% 4/1/2002 (Prere.) 27,375 28,960
Texas GO 5.50% 4/1/2020 12,675 12,732
Texas Muni. Power Agency Rev. 0.00% 9/1/2006 6,205 4,172
Texas TRAN 4.75% 8/31/1998 2,000 2,006
Travis County TX Health Fac. (Charity Obligated Group) 5.125% 11/1/2024 ++ 20,000 18,987
Travis County TX Health Fac. (Charity Obligated Group) 5.375% 11/1/2028 ++ 15,500 15,215
Texas Turnpike Auth. Rev. 5.50% 1/1/2015 (3) 14,605 14,996
Tyler TX Health Fac. Dev. Corp. (Mother Frances Hosp.) 5.30% 7/1/2007 1,125 1,127
Tyler TX Health Fac. Dev. Corp. (Mother Frances Hosp.) 5.40% 7/1/2008 1,250 1,253
Tyler TX Health Fac. Dev. Corp. (Mother Frances Hosp.) 5.50% 7/1/2009 1,000 1,004
Tyler TX Health Fac. Dev. Corp. (Mother Frances Hosp.) 5.625% 7/1/2013 1,680 1,682
---------
250,019
---------
</TABLE>
57
<PAGE> 97
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
FACE MARKET
MATURITY AMOUNT VALUE*
HIGH-YIELD PORTFOLIO COUPON DATE (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTAH (1.1%)
Intermountain Power Agency UT Power Supply Rev. 5.70% 7/1/2017 (1) $ 12,000 $ 12,434
Intermountain Power Agency UT Power Supply Rev. 5.75% 7/1/2019 (1) 13,000 13,554
---------
25,988
---------
VIRGIN ISLANDS (1.0%)
Virgin Islands Public Finance Auth. Rev. 5.20% 10/1/2009 ++ 3,065 3,039
Virgin Islands Public Finance Auth. Rev. 5.50% 10/1/2007 ++ 6,530 6,674
Virgin Islands Public Finance Auth. Rev. 5.75% 10/1/2013 ++ 11,000 10,834
Virgin Islands Public Finance Auth. Rev. 6.00% 10/1/2008 ++ 4,915 5,048
---------
25,595
---------
VIRGINIA (0.8%)
Alexandria VA Redev. & Housing Auth. Rev. (Portals West Project) 9.50% 7/15/2020 -- 9,680 6,098
Chesterfield County VA Mortgage Rev. (Brandermill Woods Project) 0.00% 7/1/2017 2,600 26
Chesterfield County VA Mortgage Rev. (Brandermill Woods Project) 0.00% 7/1/2018 2,600 26
Chesterfield County VA Mortgage Rev. (Brandermill Woods Project) 0.00% 7/1/2019 2,600 26
Chesterfield County VA Mortgage Rev. (Brandermill Woods Project) 0.00% 7/1/2020 2,600 26
Chesterfield County VA Mortgage Rev. (Brandermill Woods Project) 0.00% 7/1/2021 2,600 26
Chesterfield County VA Mortgage Rev. (Brandermill Woods Project) 10.25% 7/1/2015 -- 8,000 5,760
Chesterfield County VA Mortgage Rev. (Brandermill Woods Project) 10.625% 7/1/2016 -- 10,400 7,488
---------
19,476
---------
WASHINGTON (2.4%)
Chelan County WA Public Util. Dist. (Rock Island Hydro Project) 0.00% 6/1/2009 (1) 7,950 4,603
Chelan County WA Public Util. Dist. (Rock Island Hydro Project) 0.00% 6/1/2010 (1) 19,550 10,662
Chelan County WA Public Util. Dist. (Rock Island Hydro Project) 0.00% 6/1/2011 (1) 11,400 5,838
Chelan County WA Public Util. Dist. (Rock Island Hydro Project) 0.00% 6/1/2012 (1) 19,650 9,431
Chelan County WA Public Util. Dist. (Rock Island Hydro Project) 0.00% 6/1/2017 (1) 11,000 3,934
Port Auth. of Seattle WA GO 5.75% 5/1/2014 15,600 16,187
Washington GO VRDO 4.05% 5/6/1998 8,400 8,400
---------
59,055
---------
WEST VIRGINIA (0.4%)
West Virginia State Building Comm. Rev.
(Jail & Correction Facilities) 7.00% 7/1/2013 (1) 8,390 10,149
---------
- -------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $2,348,676) 2,493,178
- -------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-1.2%)
- -------------------------------------------------------------------------------------------------------------------------
Other Assets--Note B 90,065
Liabilities (120,437)
---------
(30,372)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%)
- -------------------------------------------------------------------------------------------------------------------------
Applicable to 227,814,847 outstanding $.001 par value shares
(authorized 550,000,000 shares) $2,462,806
=========================================================================================================================
NET ASSET VALUE PER SHARE $10.81
=========================================================================================================================
</TABLE>
*See Note A in Notes to Financial Statements.
+Securities with an aggregate value of $ 5,814,000 have been segregated
as initial margin for open futures contracts.
For key to abbreviations and other references, see page 59.
<PAGE> 98
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
AMOUNT PER
(000) SHARE
- -------------------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1998, NET ASSETS CONSISTED OF:
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paid in Capital $2,340,691 $10.28
Undistributed Net Investment Income -- --
Overdistributed Net Realized Gains (22,551) (.10)
Unrealized Appreciation--Note F
Investment Securities 144,502 .63
Futures Contracts 164 --
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS $2,462,806 $10.81
=========================================================================================================================
</TABLE>
KEY TO ABBREVIATIONS
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.
TAN--Tax Anticipation Note.
TOB--Tender Option Bond.
TRAN--Tax Revenue Anticipation Note.
VRDO--Variable Rate Demand Obligation.
(ETM)--Escrowed to Maturity.
(Prere.)--Prerefunded.
-Non-Income-Producing Security--Interest Payments in Default.
--Only partial interest was paid on the last interest payment date.
++Security purchased on a when-issued or delayed delivery basis for
which the Portfolio has not taken delivery as of April 30, 1998.
Scheduled principal and interest payments are guaranteed by:
(1) MBIA (Municipal Bond Insurance Association).
(2) AMBAC (Ambac Assurance Corporation).
(3) FGIC (Financial Guaranty Insurance Company).
(4) FSA (Financial Security Assurance).
(5) BIGI (Bond Investors Guaranty Insurance).
(6) Connie Lee Inc.
(7) FHA (Federal Housing Authority).
(8) CapMAC (Capital Markets Assurance Corporation).
(9) American Capital Access Financial Guaranty Corporation.
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.
<PAGE> 99
F952-4/1998
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