CAPITAL RESERVES
SEMIANNUAL REPORT
JANUARY 31, 1994
CAPITAL RESERVES: MONEY MARKET PORTFOLIO
INVESTMENTS/JANUARY 31, 1994 (UNAUDITED)
(Showing Percentage of Total Value of Investments)
ANNUALIZED ANNUALIZED
YIELD AT YIELD AT
DUE TIME OF PRINCIPAL VALUE DUE TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1) DATE PURCHASE AMOUNT (NOTE 1)
CERTIFICATES OF DEPOSIT - 24.5%
DOMESTIC CERTIFICATES OF DEPOSIT - 0.8%
Old Kent Bank & Trust Company
3/31/94 3.40% $ 5,000,000 $ 5,000,000
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 18.2%
Bayerische Landesbank Girozentrale
2/9/94 3.38 4,000,000 4,000,002
Fuji Bank, Ltd.
3/7/94 3.25 5,000,000 5,000,000
Kingdom of Sweden
3/23/94 3.08 (a) 24,000,000 24,000,000Mitsubishi Bank, Ltd.
5/13/94 3.25 5,000,000 5,000,985
7/7/94 3.45 10,000,000 10,000,000
National Bank of Canada
4/6/94 3.30 10,000,000 10,000,000
Sakura Bank, Ltd.
2/7/94 3.40 10,000,000 10,000,000
3/7/94 3.27 5,000,000 5,000,000
Sanwa Bank, Ltd.
7/29/94 3.33 5,000,000 5,000,243
Skandinaviska Enskilda Banken
2/17/94 3.39 5,000,000 5,000,000
Societe Generale
4/18/94 3.41 10,000,000 9,999,275
4/25/94 3.43 15,000,000 15,000,000
Sumitomo Bank, Ltd.
2/24/94 3.45 5,000,000 5,000,000
Swedish National Housing Finance Corp. (a)
2/23/94 3.50 7,000,000 7,000,000
120,000,505
NEW YORK BRANCH, EURODOLLAR, FOREIGN BANKS - 0.8%
Sumitomo Bank, Ltd.
6/20/94 3.31 5,000,000 5,001,855
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 4.7%
Mitsubishi Bank, Ltd.
4/18/94 3.24 5,000,000 5,000,363
4/29/94 3.49 10,000,000 9,999,960
Sanwa Bank, Ltd.
2/24/94 3.42 6,000,000 6,000,028
Sumitomo Bank, Ltd.
5/23/94 3.28 10,000,000 10,004,321
31,004,672
TOTAL CERTIFICATES OF DEPOSIT 161,007,032
COMMERCIAL PAPER - 41.3%
Bear Stearns Companies Inc.
2/18/94 3.37% $ 4,096,000 $ 4,089,520
3/9/94 3.35 5,000,000 4,983,400
BellAtlantic Financial Services
2/25/94 3.43 5,000,000 4,988,667
2/28/94 3.43 5,000,000 4,987,250
CIT Group Holdings, Inc.
3/24/94 3.38 10,000,000 9,952,542
3/30/94 3.59 10,000,000 9,944,583
CoreStates Capital Corp.
2/15/94 3.14 (a) 5,000,000 5,000,000
Ford Motor Credit Corporation
3/31/94 3.34 5,000,000 4,973,336
General Electric Capital Corporation
2/2/94 3.37 3,000,000 2,999,721
3/10/94 3.37 (a) 5,000,000 5,000,000
3/28/94 3.39 10,000,000 9,948,819
9/8/94 3.51 10,000,000 9,791,342
10/5/94 3.43 5,000,000 4,885,542
General Motors Acceptance Corporation
2/14/94 3.55 15,000,000 14,980,906
Goldman Sachs Group, L.P. (The)
3/11/94 3.40 10,000,000 9,964,481
Grand Metropolitan Finance
5/23/94 3.45 11,000,000 10,885,023
Hanson Finance
3/7/94 3.38 10,000,000 9,968,361
Kingdom of Denmark
2/10/94 3.38 18,000,000 17,985,015
Morgan Stanley Group, Inc.
2/22/94 3.42 10,000,000 9,980,225
2/28/94 3.38 10,000,000 9,974,875
NYNEX Corporation
2/14/94 3.40 3,000,000 2,996,349
2/22/94 3.38 15,000,000 14,970,688
3/7/94 3.36 10,000,000 9,968,550
Nationwide Building Society
2/1/94 3.47 25,000,000 25,000,000
New Center Asset Trust
2/28/94 3.40 5,000,000 4,987,325
3/7/94 3.41 5,000,000 4,984,039
3/8/94 3.41 5,000,000 4,983,569
New South Wales Treasury Corp.
3/8/94 3.39 8,000,000 7,973,867
ANNUALIZED ANNUALIZED
YIELD AT YIELD AT
DUE TIME OF PRINCIPAL VALUE DUE TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1) DATE PURCHASE AMOUNT (NOTE 1)
COMMERCIAL PAPER - CONTINUED
Norwest Corporation
3/28/94 3.39% $ 5,000,000 $ 4,974,410
Norwest Financial
3/2/94 3.38 10,000,000 9,973,014
Prudential Funding Corporation
2/14/94 3.36 10,000,000 9,988,084
Sears Credit Corp. B
2/23/94 3.13 5,000,000 4,990,467
TOTAL COMMERCIAL PAPER 271,073,970
FEDERAL AGENCIES - 4.3%
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 1.5%
6/16/94 3.37 10,000,000 9,997,033
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 0.7%
11/25/94 3.46 5,000,000 4,861,400
INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT -
DISCOUNT NOTES - 2.1%
12/23/94 3.52 13,880,000 13,452,706
Total Federal Agencies 28,311,139
U.S. TREASURY OBLIGATIONS - 4.3%
U.S. Treasury Bills
5/26/94 3.35 13,000,000 12,864,150
12/15/94 3.39 10,000,000 9,709,857
12/15/94 3.62 5,000,000 4,846,123
Total U.S. Treasury Obligations 27,420,130
BANK NOTES - 1.5%
Bank of New York
3/6/94 3.50 (a) 10,000,000 10,000,000
MEDIUM-TERM NOTES (a) - 7.8%
Abbey National PLC, UK
6/24/94 3.17 1,000,000 1,000,000
Abbey National Treasury Service
9/30/94 3.37 26,000,000 26,000,000
Goldman Sachs Group, L.P. (The)
6/16/94 3.48% $ 6,000,000 $ 6,000,000
9/1/94 3.48 6,000,000 6,000,000
Norwest Corporation
3/15/94 3.38 7,000,000 7,000,000
Westdeutsche Landesbank Gironzentrale
1/11/95 3.56 5,000,000 5,004,016
TOTAL MEDIUM-TERM NOTES 51,004,016
SHORT-TERM NOTES (a) - 7.2%
J.P. Morgan Securities
2/1/94 3.44 11,000,000 11,000,000
2/1/94 3.46 7,000,000 7,000,000
Norwest Corporation
2/1/94 3.11 4,000,000 4,000,000
SMM Trust Company (1993-A) (b)
3/18/94 3.36 9,000,000 9,000,000
SMM Trust Company (1993-D) (b)
4/28/94 3.30 4,000,000 4,000,000
SMM Trust Company (1993-F) (b)
2/15/94 3.52 12,000,000 12,000,000
TOTAL SHORT-TERM NOTES 47,000,000
FOREIGN GOVERNMENT OBLIGATIONS
(UNITED STATES DOLLARS) - 3.0%
CANADIAN TREASURY BILLS
5/26/94 3.42 20,000,000 19,787,200
TIME DEPOSITS - 1.5%
Dai-Ichi Kangyo Bank, Ltd.
2/24/94 3.16 10,000,000 10,000,000
MUNICIPAL BONDS - 0.2%
New Orleans Aviation Board (MBIA Insured)
2/7/94 3.26 (a) 1,600,000 1,600,000
MATURITY VALUE
AMOUNT (NOTE 1)
REPURCHASE AGREEMENTS - 4.4%
With First Boston Corporation:
At 3.10%, dated 1/11/94 due 2/1/94:
U.S. Government Obligations
(principal amount $10,295,885)
6.50% to 10.75%,
2/15/03 to 1/1/24 $ 10,018,083 $ 10,000,000
With Goldman, Sachs & Co.:
At 3.10%, dated 1/14/94 due 2/7/94:
U.S. Government Obligations
(principal amount $3,863,926)
5.22% to 7%,
7/1/20 to 12/1/23 3,507,233 3,500,000
At 3.125%, dated 1/10/94 due 2/14/94:
U.S. Government Obligations
(principal amount $10,997,329)
5.22% to 7%,
7/1/20 to 12/1/23 10,030,382 10,000,000
In a joint trading account
(U.S. Treasury Obligations)
dated 1/31/94, due 2/1/94
(Note 2)
At 3.20% 5,368,494 5,368,000
TOTAL REPURCHASE AGREEMENTS 28,868,000
TOTAL INVESTMENTS-100% $ 656,071,487
Total Cost for Income Tax Purposes - $656,071,487
LEGEND:
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
SMM Trust Company:
(1993-A) 3/18/93 $9,000,000
(1993-D) 10/21/93 $4,000,000
(1993-F) 11/15/93 $12,000,000
INCOME TAX INFORMATION:
At July 31, 1993, the fund had a capital loss carryforward of approximately
$8,000 which will expire on July 31, 2001.
MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
January 31, 1994 (Unaudited)
ASSETS
Investment in securities, at value (including repurchase agreements of $28,868,000) (Notes 1 and 2) - $ 656,071,487
See accompanying schedule
Cash 1,583,108
Interest receivable 1,511,305
Receivable from investment adviser for expense reductions (Note 5) 100,885
TOTAL ASSETS 659,266,785
LIABILITIES
Dividends payable $ 92,802
Accrued management fee 290,653
Other payables and accrued expenses 400,734
TOTAL LIABILITIES 784,189
NET ASSETS $ 658,482,596
Net Assets consist of:
Paid in capital $ 658,460,348
Accumulated net realized gain (loss) on investments 22,248
NET ASSETS, for 658,460,348 shares outstanding $ 658,482,596
NET ASSET VALUE, offering price and redemption price per share ($658,482,596 (divided by) 658,460,348 shares) $1.00
</TABLE>
Statement of Operations
DRAFT
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<CAPTION>
<S> <C> <C>
Six Months Ended January 31, 1994 (Unaudited)
INTEREST INCOME $ 10,618,069
EXPENSES
Management fee (Note 4) $ 1,586,843
Transfer agent fees (Note 4) 794,441
Distribution fees (Note 4) 1,110,790
Accounting fees and expenses (Note 4) 48,452
Non-interested trustees' compensation 1,927
Custodian fees and expenses 32,424
Registration fees 79,306
Audit 6,271
Legal 4,783
Miscellaneous 4,721
Total expenses before 3,669,958
reductions
Expense reductions (Note 5) (566,477) 3,103,481
NET INTEREST INCOME 7,514,588
NET REALIZED GAIN (LOSS) ON 17,896
INVESTMENTS (NOTE 1)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,532,484
</TABLE>
Statement of Changes in Net Assets
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, 1994 JULY 31,
(UNAUDITED) 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 7,514,588 $ 11,181,033
Net interest income
Net realized gain (loss) on investments 17,896 (8,089)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 7,532,484 11,172,944
Dividends to shareholders from net interest income (7,514,588) (11,181,033)
Share transactions at net asset value of $1.00 per share 1,863,085,994 2,536,376,162
Proceeds from sales of shares
Reinvestment of dividends from net interest income 6,736,544 10,067,106
Cost of shares redeemed (1,812,855,588) (2,299,126,791)
Net increase (decrease) in net assets and shares resulting from share transactions 56,966,950 247,316,477
TOTAL INCREASE (DECREASE) IN NET ASSETS 56,984,846 247,308,388
NET ASSETS
Beginning of period 601,497,750 354,189,362
End of period $ 658,482,596 $ 601,497,750
</TABLE>
Financial Highlights
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JULY 31, OCTOBER 23,
ENDED 1990
JANUARY 31, (COMMENCEMENT
1994 OF OPERATIONS) TO
JULY 31,
(UNAUDITED) 1993 1992 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of period$ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations .012 .025 .041 .047
Net interest income
Dividends from net interest income (.012) (.025) (.041) (.047)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (dagger) 1.20% 2.57% 4.13% 4.79%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $ 658,483 $ 601,498 $ 354,189 $ 108,991
Ratio of expenses to average net
assets (dagger)(dagger) .98%* .95% .82% .83%*
Ratio of expenses to average net
assets before expense reductions
(dagger)(dagger) 1.16%* 1.14% 1.17% 1.25%*
Ratio of net interest income to
average net assets 2.37%* 2.52% 3.81% 5.71%*
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
CAPITAL RESERVES: U.S. GOVERNMENT PORTFOLIO
INVESTMENTS/JANUARY 31, 1994 (UNAUDITED)
(Showing Percentage of Total Value of Investments)
ANNUALIZED
YIELD AT
DUE TIME OF PRINCIPAL VALUE MATURITY VALUE
DATE PURCHASE AMOUNT (NOTE 1) AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 48.8%
U.S. TREASURY BILLS - 27.7%
2/3/94 3.30% $ 7,000,000 $ 6,998,736
4/7/94 3.35 9,000,000 8,947,350
4/21/94 3.18 18,000,000 17,876,366
4/28/94 3.23 1,000,000 992,403
5/5/94 3.21 2,500,000 2,479,915
5/5/94 3.27 2,500,000 2,479,527
5/5/94 3.30 7,000,000 6,941,488
5/26/94 3.30 7,000,000 6,927,958
5/26/94 3.35 10,000,000 9,895,511
6/2/94 3.36 12,000,000 11,866,900
6/30/94 3.30 10,000,000 9,867,556
85,273,710
U.S. TREASURY NOTES - 21.1%
2/15/94 3.15 1,000,000 1,001,359
2/28/94 3.11 12,000,000 12,019,705
2/28/94 3.21 7,000,000 7,010,914
3/31/94 3.24 4,000,000 4,015,406
4/30/94 3.14 5,000,000 5,025,077
4/30/94 3.23 2,000,000 2,009,619
5/15/94 3.16 10,000,000 10,103,318
5/15/94 3.22 3,000,000 3,031,252
7/31/94 3.20 2,000,000 2,009,235
8/15/94 3.08 8,500,000 8,920,068
9/30/94 3.22 10,000,000 10,044,391
65,190,344
TOTAL U.S TREASURY OBLIGATIONS 150,464,054
REPURCHASE AGREEMENTS - 51.2%
In a joint trading account
(U.S. Treasury Obligations)
dated 1/31/94, due 2/1/94
(Notes 2 and 3)
At 3.19% $ 154,013,629 $ 154,000,000
At 3.22% 3,962,354 3,962,000
TOTAL REPURCHASE AGREEMENTS 157,962,000
TOTAL INVESTMENTS - 100% $ 308,426,054
Total Cost for Income Tax Purposes - $308,426,054
INCOME TAX INFORMATION:
At July 31, 1993, the fund had a capital loss carryforward of approximately
$5,500 which will expire on July 31, 2001.
U.S. GOVERNMENT PORTFOLIO
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
January 31, 1994 (Unaudited)
ASSETS
Investment in securities, at value (including repurchase agreements of $157,962,000) (Notes 1 and 2) - $ 308,426,054
See accompanying schedule
Interest receivable 1,483,599
Receivable from investment adviser for expense reductions (Note 5) 11,553
TOTAL ASSETS 309,921,206
LIABILITIES
Dividends payable $ 106,230
Accrued management fee 129,036
Other payables and accrued expenses 135,512
TOTAL LIABILITIES 370,778
NET ASSETS $ 309,550,428
Net Assets consist of:
Paid in capital $ 309,554,371
Accumulated net realized gain (loss) on investments (3,943)
NET ASSETS, for 309,554,371 shares outstanding $ 309,550,428
NET ASSET VALUE, offering price and redemption price per share ($309,550,428 (divided by) 309,554,371 shares) $1.00
</TABLE>
Statement of Operations
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended January 31, 1994 (Unaudited)
INTEREST INCOME $ 4,832,976
EXPENSES
Management fee (Note 4) $ 760,400
Transfer agent fees (Note 4) 146,729
Distribution fees (Note 4) 534,080
Accounting fees and expenses (Note 4) 26,395
Non-interested trustees' compensation 941
Custodian fees and expenses 16,189
Registration fees 73,200
Audit 7,160
Legal 2,412
Miscellaneous 2,132
Total expenses before 1,569,638
reductions
Expense reductions (83,816) 1,485,822
(Note 5)
NET INTEREST INCOME 3,347,154
NET REALIZED GAIN (LOSS) ON (187)
INVESTMENTS (NOTE 1)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,346,967
</TABLE>
Statement of Changes in Net Assets
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, 1994 JULY 31,
(UNAUDITED) 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 3,347,154 $ 6,429,830
Net interest income
Net realized gain (loss) on investments (187) (5,505)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 3,346,967 6,424,325
Dividends to shareholders from net interest income (3,347,154) (6,429,830)
Share transactions at net asset value of $1.00 per share 1,164,161,843 1,815,220,928
Proceeds from sales of shares
Reinvestment of dividends from net interest income 2,776,206 5,539,936
Cost of shares redeemed (1,121,870,181) (1,864,814,792)
Net increase (decrease) in net assets and shares resulting from share transactions 45,067,868 (44,053,928)
TOTAL INCREASE (DECREASE) IN NET ASSETS 45,067,681 (44,059,433)
NET ASSETS
Beginning of period 264,482,747 308,542,180
End of period $ 309,550,428 $ 264,482,747
</TABLE>
Financial Highlights
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JULY 31, OCTOBER 23,
ENDED 1990
JANUARY 31, (COMMENCEMENT
1994 OF OPERATIONS) TO
JULY 31,
(UNAUDITED) 1993 1992 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of period$ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations .011 .024 .041 .046
Net interest income
Dividends from net interest income (.011) (.024) (.041) (.046)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (dagger) 1.11% 2.40% 4.15% 4.66%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $ 309,550 $ 264,483 $ 308,542 $ 80,762
Ratio of expenses to average net
assets (dagger)(dagger) .98%* .95% .65% .70%*
Ratio of expenses to average net
assets before expense reductions
(dagger)(dagger) 1.03%* 1.07% 1.14% 1.27%*
Ratio of net interest income to
average net assets 2.20%* 2.39% 3.82% 5.65%*
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENTS/JANUARY 31, 1994 (UNAUDITED)
(Showing Percentage of Total Value of Investments)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MUNICIPAL SECURITIES (a) - 100%
ARIZONA - 4.5%
Mojave County Ind. Dev. Auth. Ind. Dev. Rev. (Citizens Utilities) Series
1993 E, 2.55% 4/18/94, VT (b) $ 2,360,000 $ 2,360,000
Student Loan Acquisition Auth. Student Loan Rev., Series 1993 A-1, 2.40%,
(FSA Insured)
SBPA Barclays Bank, VRDN (b) 945,000 945,000
Yavapai County Ind. Dev. Auth. Ind. Dev. Rev. (Citizens Utilities) Series
1993, 2.55%4/18/94, VT (b) 3,000,000 3,000,000
6,305,000
CALIFORNIA - 6.1%
California Gen. Oblig. RAN, 3.50% 6/28/94 2,000,000 2,004,442
Oakland TRAN 3.50% 8/15/94 2,500,000 2,505,829
Orange County Apt. Dev. Rev. (Niguel Summit I) Issue 1985 U, Series A,
2.60%, LOC Tokai Bank, VRDN 1,000,000 1,000,000
Sacramento County TRAN, 3% 7/29/94 3,000,000 3,002,080
8,512,351
COLORADO - 8.6%
Arapahoe County Capital Improv. Trust Hwy. Rev. Bonds (E-470 Proj.), OT:
Series 1986 H, 2.95% 2/28/94 3,000,000 3,000,000
Series J, 2.85% 2/28/94 1,000,000 1,000,061
Denver County Airport Sys. Rev. Bonds Series 1992 F, 2.45%, LOC Bank of
Montreal, VRDN (b) 5,500,000 5,500,000
Fort Collins County Ind. Dev. Rev. (Phelps-Tointon Millwork Proj.) Series
1993, 2.55%, LOC Bank One, VRDN (b) 1,500,000 1,500,000
Wheat Ridge County Ind. Dev. Rev. (Adolph Coors Co. Proj.), Series 1993,
2.55%,
LOC Wachovia Bank Georgia, VRDN (b) 1,000,000 1,000,000
12,000,061
DISTRICT OF COLUMBIA - 0.5%
Dist. of Columbia Hsg. Fin. Auth. Multi-Family Hsg. Rev. Rfdg., Series
1991, 2.50%, LOC Bank One, VRDN (b) 650,000 650,000
FLORIDA - 9.4%
Broward County Ind. Dev. Auth. Rev. Rfdg. (Goldline Lab., Inc. Proj.)
Series 1989 B, 2.80%,
LOC Barnett Bank, VRDN (b) 279,000 279,000
Dade County Hsg. Fin. Corp. Tax-Exempt Trust Ctfs. of Prtn. Series 1991 A,
2.65%,
(Liquidity Enhancement Bank One), VRDN (b) (c) 2,855,000 2,855,000Dade
County Ind. Dev. Auth. Rev. (Guastafeste Proj.) Series 1987, 2.45%, LOC Sun
Bank, VRDN (b) 300,000 300,000
Dade County Multi-Family Hsg. Rev. (Biscayne View Apts. Proj.) Series 1993,
2.60%,
BPA Commonwealth Life Ins. Co., VRDN (b) 1,475,000 1,475,000
Florida Aviation Auth. Tax-Exempt Trust Ctfs, Series 1989 A, 2.75%, LOC
NationsBank, VRDN (b) (c) 1,425,000 1,425,000
Indian Trace Commty. Dev. Dist. (Broward County Basin Wtr. Mgmt.), 3.20%
2/2/94, LOC Tokai Bank Ltd., VT 1,650,000 1,650,000
Martin Co. Ind. Dev. Auth. Ind. Dev. Rev. Series 1992 A, (Indiantown
Cogeneration Proj.) 2.25% LOC Credit Suisse (b) 1,000,000 1,000,000
Miami TAN 3.25% 9/28/94 1,000,000 1,002,994
Okeechobee County Solid Wst. Rev. (Chambers Wst. Sys.) Series 1992, 2.50%,
LOC Nations Bank, VRDN (b) 1,000,000 1,000,000
Orange Co. School Dist. TAN 3% 6/30/94 2,000,000 2,001,278
12,988,272
GEORGIA - 2.8%
Floyd County Dev. Auth Ind. Rev. Bonds (Marglen Ind. Inc. Proj.), 2.45%,
LOC Trust Co. Bank, VRDN (b) 2,000,000 2,000,000
Georgia Hsg. & Fin. Auth. Rev. (Home Ownership Opportunity Prog.)
Series 1992 B, 2.75%, VRDN (b) 1,000,000 1,000,000
Hart County Ind. Dev. Rev. (Dundee Mills Inc. Proj.) Series 1990, 2.45%,
LOC Trust Co. of Georgia, VRDN (b) 155,000 155,000
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MUNICIPAL SECURITIES (a) - CONTINUED
GEORGIA - CONTINUED
Pierce County Ind. Dev. & Bldg. Auth. Rev. (American Egg Prods. Inc.
Proj.) Series 1989, 2.45%,
LOC Barclays Bank, VRDN (b) $ 170,000 $ 170,000
Rockdale County Ind. Dev. Rev. (Takahashi Works USA) Series 1990, 2.45%,
LOC Sanwa Bank, VRDN (b) 500,000 500,000
3,825,000
ILLINOIS - 3.1%
Chicago O'Hare Int'l. Arpt. Rev. (Northwest Orient Airlines), 2.55%, LOC
Mitsubishi Bank, VRDN (b) 300,000 300,000
Illinois Dev. Fin. Auth. Ind. Dev. Rev. Bonds, VRDN: (b)
(MTI Corp Proj.) Series 1989, 2.575%, LOC Industrial Bank of Japan
1,000,000 1,000,000
(Rich Prods. Corp. Proj.) Series 1993, 2.45%, LOC Trust Company Bank
800,000 800,000
Illinois Dev. Fin. Auth. Rev., VRDN: (b)
(Kindlon Partners Proj.) 2.45%, LOC Lasalle Bank 1,000,000 1,000,000
(R.S. Anderson Co. Proj.) 2.50%, LOC Comerica Bank 200,000 200,000
Illinois Gen. Oblig. TRAN 3.50% 6/15/94 1,000,000 1,001,898
4,301,898
INDIANA - 0.4%
Shelbyville Ind. Econ. Dev. Rev. (Nippisun Indiana Corp. Proj.) 2.60%, LOC
Industrial Bank of Japan, VRDN (b) 500,000 500,000
IOWA - 0.6%
Sioux City Hosp. Rev. Rfdg. Bonds (Sisters of Mercy Health Corp.) Oblig.
Group) Series 1993, 3.10% 8/15/94 765,000 765,000
KENTUCKY - 1.4%
Kentucky Higher Ed. Student Loan Auth., Series 1991 E, 2.75%, LOC Sumitomo
Bank, VRDN (b) 2,000,000 2,000,000
LOUISIANA - 0.7%
Louisiana Hsg. Fin. Auth. Single Family Mtg. Rev. Bonds, Series 1992 B,
3.70% 6/2/94, MT (b) 1,000,000 1,000,000
MAINE - 0.5%
Maine Fin. Auth. Econ. Dev. Rev. Series 1992, 2.50%, LOC Sumitomo Bank LTD,
VRDN (b) 760,000 760,000
MARYLAND - 2.9%
Maryland Commty. Dev. Admin. Dept. Hsg. & Commty. Dev. (Single Family
Prog.), MT: (b)
Series 1993 2nd, 2.80% 6/15/94 1,000,000 1,000,000
Series 1993 14th, 2.90% 11/2/94 1,000,000 1,000,000
Montgomery County Hsg. Opportunity Committee:
(Draper Lane Apts.) 2.50%, (FGIC Insured), SBPA Sumitomo Bank, VRDN (b)
1,000,000 1,000,000
(Single Family Mtg.) Series 1993 B, 2.85% 11/1/94, MT 1,000,000
1,000,000
4,000,000
MASSACHUSETTS - 1.4%
Massachusetts Gen. Oblig. Tender Option Bonds Series E, 2.50%,
(Liquidity Enhancement Dai-Ichi Kangyo Bank), VRDN (c) 2,000,000
2,000,000
MICHIGAN - 2.2%
Michigan Hsg. Dev. Auth. Multi-Family Hsg. Rev. Bonds Series 1988 A, 2.30%
2/28/94, LOC Sanwa Bank Ltd., VT (b) 1,935,000 1,935,000
Sterling Heights Econ. Dev. Corp. Ltd. Oblig. Rev. (Cherrywood Ctr. Assoc.
Proj.), 2.45%, LOC Comerica Bank, VRDN (b) 1,100,000 1,100,000
3,035,000
MINNESOTA - 0.9%
Anoka County Solid Waste Disp. (United Pwr. Assoc.-National Rural Utils.),
Series 1988 A, 2.45% 3/24/94, VT (b) 1,300,000 1,300,000
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MUNICIPAL SECURITIES (a) - CONTINUED
NEVADA - 2.7%
Clark County Ind. Dev. Rev. (Nevada Pwr. Co. Proj.) Series 1989 A, 2.85%,
LOC Citibank, VRDN (b) $ 1,400,000 $ 1,400,000
Henderson Public Improv. Trust Hsg. (Victory Village Proj.), 3.20% 3/8/94,
MT (b) 1,290,000 1,290,000
Washoe County Gas Fac. Rev. Bonds (Sierra Pacific Pwr. Co.) Series 1990,
2.40% 3/30/94,
LOC Union Bank Switzerland, VT (b) 1,000,000 1,000,000
3,690,000
NORTH CAROLINA - 3.3%
Johnston County Ind. Fac. Poll. Cont. Fin. Auth. Ind. Dev. Rev. (Kabivitrum
Inc. Proj.), 2.85%,
LOC Skandinaviska Enskilda Banken, VRDN 3,750,000 3,750,000
Piedmont Triad Arpt. Auth. Spl. Facs. Rev. (Triad Int'l. Maintenance Corp.
Proj.) Series 1989, 2.55%,
LOC Mellon Bank, VRDN (b) 900,000 900,000
4,650,000
OHIO - 4.0%
Cleveland Public Pwr. Sys. Rev. BAN, Series 1993 B, 3.50% 8/1/94
1,000,000 1,002,023
Ohio Wtr. Dev. Auth. Poll. Contr. Facs. (Toledo Edison Co. Proj.), VT: (b)
Series 1988 A, 2.50% 2/22/94, LOC Citibank 1,000,000 1,000,000
Series 1988 A, 2.50% 2/25/94, LOC Citibank 2,500,000 2,500,000
Student Loan Funding Corp. Rev., Series 1990 A-1, 2.70%, LOC Nat'l.
Westminster, VRDN (b) 1,000,000 1,000,000
5,502,023
OKLAHOMA - 0.7%
Southeastern Ind. Auth. Solid Wst. Disp. Rev. (Weyerhaeuser Co. Proj.)
2.48%, VRDN (b) 1,000,000 1,000,000
OREGON - 1.1%
Klamath Falls Elec. Rev. Bonds (Salt Cave Hydroelec Proj.), Series D, 4.75%
5/1/94,MT 1,500,000 1,507,523
PENNSYLVANIA - 9.3%
Bucks County Ind. Dev. Auth. Ind. Dev. (Double H Plastics Inc. Proj.)
Series 1993, 2.80%,
LOC Meridian Bank, NA, VRDN (b) 2,445,000 2,445,000
Carbon County Ind. Dev. Auth. Resource Recovery (Panther Creek Partners
Proj.), VT: (b)
Series B:
2.40% 3/8/94, LOC Nat'l Westminister 1,700,000 1,700,000
2.50% 4/7/94, LOC Nat'l Westminister 2,375,000 2,375,000
Northumberland County Ind. Dev. Auth Rev. (Foster Wheeler Carmel Proj.),
VRDN: (b)
Series 1987 A, 2.45%, LOC Union Bank of Switzerland 1,000,000 1,000,000
Series 1987 B, 2.45%, LOC Union Bank of Switzerland 200,000 200,000
Pennsylvania Econ. Dev. Fing. Auth. Ind. Dev. Rev. (ASK Foods, Inc.) Series
A-1, 2.50%,
LOC Pittsburgh Nat'l. Bank, VRDN (b) 585,000 585,000
Pennsylvania Econ. Dev. Fin. Auth. Rev., VRDN: (b)
(Kaminski Lumber Proj.) Series 1989 A-6, 2.50%, LOC Pittsburgh Nat'l. Bank
950,000 950,000
(Port Erie Plastics Proj.) Series 1989 D-9, 2.50%, LOC Pittsburgh Nat'l.
Bank 90,000 90,000
Philadelphia School Dist. Bonds Series B, 5.75% 7/1/94, (MBIA Insured)
1,500,000 1,517,643Philadelphia School Dist. TRAN, Series 1993-94, 3.625%
6/30/94 1,000,000 1,002,083
Philadelphia TRAN, Series D, 3.25% 6/15/94 LOC Pittsburgh Nat'l. Bank
1,000,000 1,001,787
12,866,513
RHODE ISLAND - 1.4%
Cranston Gen. Oblig. BAN, 3.40% 7/15/94 1,000,000 1,001,766
Providence Pub. Parking (Washington Street Garage Proj.) Series 1991,
2.45%, LOC Credit Suisse, VRDN (b) 1,000,000 1,000,000
2,001,766
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MUNICIPAL SECURITIES (a) - CONTINUED
TENNESSEE - 5.4%
Knox County Ind. Dev. Rev. (Rock-Tenn Converting CP Proj.) Series 1993,
2.45%, LOC Trust Company Bank, VRDN (b) $ 1,000,000 $ 1,000,000
Memphis Gen. Oblig. Arpt. Rev., Series 1987 D, 2.35%, LOC Industrial Bank
of Japan, VRDN (b) 2,300,000 2,300,000
Morristown Ind. Dev. Rev., VRDN ): (b)
(Lakeway Container Inc. Proj.) Series 1993, 2.60%, LOC First Tennessee
Bank, NA 2,200,000 2,200,000 (Tuff Torq Corp. Proj.) Series 1989,
2.45%, LOC Bank of Tokyo 1,450,000 1,450,000
Trenton Ind. Dev. Rev. (Dyersburg Fabrics Inc.) Series 1990, 2.45%, LOC
Trust Co. of Georgia, VRDN (b) 585,000 585,000
7,535,000
TEXAS - 7.4%
Brazos Higher Ed. Auth. Student Loan Rev.,Series 1993B-1, 2.8% 6/1/94 LOC
Student Loan Mktg. Assoc., MT (b) 400,000 400,000
Brazos River Harbor Navigation Dist. of Brazoria County (Dow Chemical
Proj.) Series 1988, 2.40% 3/8/94, VT (b) 1,000,000 1,000,000
Greater East Texas Higher Ed. Auth. Student Loan Rev., Series 1988 A,
2.30%, (AMBAC Insured)
SBPA Citibank, VRDN (b) 300,000 300,000
Greater East Texas Higher Ed. Student Loan Rev. Bonds, Series 1991 A, 2.75%
5/1/94,
LOC Student Loan Mktg. Assoc., MT (b) 1,000,000 1,000,000
Heart of Texas Hsg. Fin. Corp. Single Family Mtg. Rev. Rfdg., Series 1993
A, 3.038% 9/1/94, MT (b) 2,070,000 2,070,000
Panhandle Plains Higher Ed. Student Loan Rev. Bonds, Series 1991 A, 2.70%
6/1/94,
LOC Student Loan Mktg. Assoc., MT (b) 2,000,000 2,000,000
Texas Gen. Oblig. TRAN, 3.25% 8/31/94 1,000,000 1,002,696
Travis County Hsg. Fin. Corp. Multi-Family Hsg. Rev. (Primecrest Ltd.
Proj.), VRDN: (b)
Series 1990 A, 2.70%, LOC Algemene Bank 300,000 300,000
Series 1990 B, 2.70%, LOC Algemene Bank 200,000 200,000
Waxahachie Ind. Dev. Auth. (Rock-Tenn Converting Co. Proj.) Series 1986,
2.45%,
LOC Trust Co. of Georgia, VRDN (b) 2,000,000 2,000,000
10,272,696
UTAH - 4.6%
Carbon County Solid Waste Disp. (East Carbon Proj.), Series 1991, 3.05%
5/1/94, (GIC Insured), MT 1,435,000 1,435,000
Tooele County Waste Rev. Bonds (Union Pacific Corp./USPCI Proj.), VT: (b)
Series 1992 A:
2.35% 2/28/94 4,000,000 4,000,000
2.35% 3/8/94 1,000,000 1,000,000
6,435,000
VIRGINIA - 4.7%
Richmond Redev. & Hsg. Auth. Rev. (Tobacco Row Proj.) Series 1989 B-1,
2.45%, VRDN (b) 2,500,000 2,500,000
Virginia Ed. Loan Auth. Rev. Bonds (Student Loan Prog.) Series 1993 H,
2.85% 2/24/94, MT 2,000,000 2,000,000
Virginia Hsg. Dev. Auth. Commonwealth Mtg. Rev., Series 93-E, 3.05%
8/10/94, MT 2,000,000 2,002,166
6,502,166
WASHINGTON - 7.4%
Algona Econ. Dev. Corp. Ind. Rev. (Aitchison Family Partnership) Series
1992, 2.40%, LOC Wells Fargo Bank, VRDN (b) 2,770,000 2,770,000
Pierce County Econ. Dev. Corp. Ind. Dev. Rev. (Pacific N.W. Baking Co.
Proj.) Series 1988, 2.30%,
LOC Barclays Bank, VRDN (b) 2,000,000 2,000,000
Port Angeles Ind. Dev. Corp. (Daishowa America Proj.) Series 1991 2.50%,
LOC Industrial Bank of Japan, VRDN (b) 200,000 200,000
Port of Grays Harbor Ind. Dev. Corp. Solid Waste Fac. Rev., (Pacific
Veneer, Weyerhaueser Co.), 2.50%, VRDN 2,500,000 2,500,000
Port Longview Ind. Dev. Corp. (Weyerhaeuser Co. Proj.) Series 1993, 2.50%,
VRDN 2,000,000 2,000,000
Washington Gen. Oblig. Bond, Series B, 2.60% 5/1/94 825,000 825,000
10,295,000
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MUNICIPAL SECURITIES (a) - CONTINUED
WEST VIRGINIA - 1.1%
Wood County Ind. Dev. Rev. (AGA Gas Inc. Proj.) Series 1988, 2.65%, LOC
Svenska Handelsbanken, VRDN (b) $ 1,500,000 $ 1,500,000
WISCONSIN - 0.9%
Appleton Ind. Dev. Rev. (Pensar Corp. Proj.) Series 1993, 2.55%, LOC Bank
One, VRDN (b) 1,200,000 1,200,000
TOTAL INVESTMENTS - 100% $ 138,900,269
Total Cost for Income Tax Purposes - $138,900,488
SECURITY TYPE ABBREVIATIONS:
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
VT - Variable Tender
LEGEND:
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION:
At July 31, 1993, the fund had a capital loss carryforward of approximately
$8,000 of which $200, $5,600 and $2,200 will expire on July 31, 1999, 2000,
and 2001, respectively.
MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
January 31, 1994 (Unaudited)
ASSETS
Investment in securities, at value (Note 1) - See accompanying schedule $ 138,900,269
Interest receivable 721,639
Receivable from investment adviser for expense reductions (Note 5) 5,830
TOTAL ASSETS 139,627,738
LIABILITIES
Share transactions in process $ 5,506,355
Dividends payable 6,505
Accrued management fee 63,286
Other payables and accrued expenses 93,135
TOTAL LIABILITIES 5,669,281
NET ASSETS $ 133,958,457
Net Assets consist of:
Paid in capital $ 133,968,771
Accumulated net realized gain (loss) on investments (10,314)
NET ASSETS, for 133,968,771 shares outstanding $ 133,958,457
NET ASSET VALUE, offering price and redemption price per share ($133,958,457 (divided by) 133,968,771 shares) $1.00
</TABLE>
Statement of Operations
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended January 31, 1994 (Unaudited)
INTEREST INCOME $ 1,783,966
EXPENSES
Management fee (Note 4) $ 327,860
Transfer agent, accounting and custodian fees and expenses (Note 4) 56,657
Distribution fees (Note 4) 228,571
Non-interested trustees' compensation 390
Registration fees 57,922
Audit 8,598
Legal 1,375
Miscellaneous 1,416
Total expenses before 682,789
reductions
Expense reductions (41,675) 641,114
(Note 5)
NET INTEREST INCOME 1,142,852
NET REALIZED GAIN (LOSS) ON (2,388)
INVESTMENTS (NOTE 1)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,140,464
</TABLE>
Statement of Changes in Net Assets
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, 1994 JULY 31,
(UNAUDITED) 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 1,142,852 $ 1,759,949
Net interest income
Net realized gain (loss) on investments (2,388) (2,166)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 1,140,464 1,757,783
Dividends to shareholders from net interest income (1,142,852) (1,759,949)
Share transactions at net asset value of $1.00 per share 235,136,665 364,076,414
Proceeds from sales of shares
Reinvestment of dividends from net interest income 1,110,599 1,714,690
Cost of shares redeemed (218,560,330) (318,011,966)
Net increase (decrease) in net assets and shares resulting from share transactions 17,686,934 47,779,138
TOTAL INCREASE (DECREASE) IN NET ASSETS 17,684,546 47,776,972
NET ASSETS
Beginning of period 116,273,911 68,496,939
End of period $ 133,958,457 $ 116,273,911
</TABLE>
Financial Highlights
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JULY 31, NOVEMBER 29,
ENDED 1990
JANUARY 31, (COMMENCEMENT
1994 OF OPERATIONS) TO
JULY 31,
(UNAUDITED) 1993 1992 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations .009 .019 .031 .028
Net interest income
Dividends from net interest income (.009) (.019) (.031) (.028)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (dagger) .88% 1.96% 3.14% 2.82%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $ 133,958 $ 116,274 $ 68,497 $ 19,578
Ratio of expenses to average net
assets (dagger)(dagger) .98%* .95% .95% .95%*
Ratio of expenses to average net
assets before expense reductions
(dagger)(dagger) 1.04%* 1.23% 1.40% 2.63%*
Ratio of net interest income to
average net assets 1.74%* 1.92% 2.89% 3.97%*
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1994 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Capital Reserves: Money Market Portfolio, U.S. Government Portfolio, and
Municipal Money Market Portfolio (the funds) are funds of Daily Money Fund
(the trust). The trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. Each fund is
authorized to issue an unlimited number of shares. At a special meeting of
the shareholders of the funds held on March 24, 1993 shareholders approved
an Agreement and Plan of Conversion and Termination (the Plan of
Conversion), providing for the conversion of the funds from separate series
of a Massachusetts business trust, to separate series of a Delaware
business trust, effective September 29, 1993. The individual investment
objective, policies and limitations of the funds remain the same. The
following summarizes the significant accounting policies of the funds:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
Municipal Money Market fund, accretion of market discount represents
unrealized gain until realized at the time of a security disposition or
maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The funds, through their custodian, receive delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The funds' investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
RESTRICTED SECURITIES. The Money Market and Municipal Money Market funds
are permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. At the end of the period, restricted
securities (excluding 144A issues) amounted to $25,000,000 or 4% of net
assets for the Money Market fund.
3. JOINT TRADING ACCOUNT.
At the end of the period, the U.S. Government fund had 20% or more of its
total investments in repurchase agreements through a joint trading account.
These repurchase agreements were with entities whose creditworthiness has
been reviewed and found satisfactory by FMR. The repurchase agreements were
dated January 31, 1994 and due February 1, 1994. The maturity values of the
joint trading account investments were $154,013,629 at 3.19% and $3,962,354
at 3.22%, respectively. The investments in repurchase agreements through
the joint trading account are summarized as follows:
SUMMARY OF JOINT TRADING ACCOUNT
MAXIMUM
AMOUNT AGGREGATE AGGREGATE AGGREGATE
NO. OF WITH ONE PRINCIPAL MATURITY MARKET COUPON MATURITY
DEALERS DEALER AMOUNT OF AMOUNT OF VALUE OF RATES OF DATES OF
OR BANKS OR BANK AGREEMENTS AGREEMENTS COLLATERAL COLLATERAL COLLATERAL
At 3.19% 10 18% $3,338,000,000 $3,338,295,423 $3,400,338,433 3.875%-12.375%
2/15/94-2/15/23
At 3.22% 3 41 465,000,000 465,041,224 469,534,224 0%-11.25% 3/10/94-8/15/19
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a fee that
is computed daily at an annual rate of .50% of the fund's average net
assets.
SUB-ADVISER FEE. As each fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fees are paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to each fund's Distribution and Service
Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the 1940 Act, each
fund is authorized to pay its distributor, National Financial Services
Corporation (the Distributor), an affiliate of FMR, a monthly distribution
fee at an annual rate of .35% of its average net assets. The Distributor
may pay all or a portion of the fee to securities dealers or banks
(Qualified Recipients) that have selling agreements with each fund. In
addition, FMR may use its resources to pay Qualified Recipients who provide
shareholder support or distribution services at a maximum annual rate of
.25% of each fund's average net assets. Qualified Recipients, including the
Distributor acting in the capacity of a Qualified Recipient, may at their
discretion, retain any portion of their compensation and reallocate the
balance to their correspondents. For the period, FMR made payments under
the Plans in the amount of $566,875, $468,679 and $88,372 for the Money
Market, U.S. Government and Municipal Money Market funds, respectively.
In connection with the Plan of Conversion, a new Management Contract, new
Sub-Advisory Agreement and new Distribution and Service Plan identical to
those previously in effect, became effective on September 29, 1993.
TRANSFER AGENT AND ACCOUNTING FEE. Fidelity Investments Institutional
Operations Company (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for the Money Market and U.S.
Government funds. United Missouri Bank N.A. (the Bank) is the custodian and
transfer and shareholder servicing agent for the Municipal Money Market
fund. The Bank has entered into a sub-contract with FIIOC to perform the
activities associated with the Municipal Money Market fund's transfer and
shareholder servicing agent functions. FIIOC receives fees based on the
type, size, number of accounts and the number of transactions made by
shareholders of each fund. FIIOC pays for typesetting, printing and mailing
of all shareholder reports, except proxy statements. For the period, FIIOC
received transfer and shareholder servicing agent fees amounting to $28,832
for the Municipal Money Market fund.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
Fidelity Service Co. (FSC), an affiliate of FMR, maintains the accounting
records for the Money Market and U.S. Government funds. The Bank also has a
sub-contract with FSC to maintain the Municipal Money Market fund's
accounting records. The accounting fee is based on the level of average net
assets for the month plus out-of-pocket expenses. For the period, FSC
received accounting fees amounting to $15,012 for the Municipal Money
Market fund.
5. EXPENSE REDUCTIONS.
FMR has voluntarily agreed to reimburse the funds for total operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above an annual rate of .95% of average net assets.
Effective October 1, 1993, this expense limitation was increased to .99% of
average net assets. For the period, the reimbursement reduced expenses by
$566,477, $83,816 and $41,675 for the Money Market, U.S. Government and
Municipal Money Market funds, respectively.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF THE
SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR
FIDELITY DISTRIBUTORS CORPORATION IS A
BANK AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY
THE FDIC.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
Thomas D. Maher, ASSISTANT VICE PRESIDENT
Gary L. French, TREASURER
John H. Costello, ASSISTANT TREASURER
Arthur S. Loring, SECRETARY
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn
Edward C. Johnson 3d
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch
Edward H. Malone
Marvin L. Mann
Gerald C. McDonough
Thomas R. Williams
GENERAL DISTRIBUTOR
National Financial Services Corporation
Boston, MA
TRANSFER AND
SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company
Boston, MA
United Missouri Bank, N.A.
Kansas City, MO
CUSTODIANS
Morgan Guaranty Trust Company of New York
New York, NY
United Missouri Bank, N.A.
Kansas City, MO CAPR-3-94S
