DAILY MONEY FUND
SEMIANNUAL REPORT
JANUARY 31, 1994
DAILY MONEY FUND: 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)
BANKERS' ACCEPTANCES - 3.6%
DOMESTIC BANKERS ACCEPTANCE - 1.3%
Trust Company Bank
2/7/94 3.08% $ 20,000,000 $ 19,989,766 8982769C
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 2.3%
Mitsubishi Bank, Ltd.
2/16/94 3.11 2,000,000 1,997,416 610998US
Sakura Bank, Ltd.
2/9/94 3.26 10,000,000 9,992,777 793999KA
2/15/94 3.26 12,000,000 11,984,833 793999KC
Sanwa Bank, Ltd.
2/9/94 3.11 4,600,000 4,596,831 804999MB
2/17/94 3.11 5,650,000 5,642,216 804999MD
34,214,073
TOTAL BANKERS' ACCEPTANCES 54,203,839
CERTIFICATES OF DEPOSIT - 31.2%
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 22.5%
Bank of Tokyo
2/11/94 3.44 10,000,000 10,000,000 0659932T
Canadian Imperial Bank of Commerce
4/4/94 3.27 25,000,000 25,000,000 136990EB
4/5/94 3.27 25,000,000 25,000,000 136990EC
Credit Suisse
6/1/94 3.31 40,000,000 40,041,468 225991BS
Fuji Bank, Ltd.
2/4/94 3.10 10,000,000 10,000,260 35999DHR
3/7/94 3.25 25,000,000 25,000,000 35999DHL
Industrial Bank of Japan, Ltd.
2/15/94 3.10 50,000,000 50,000,000 4559905V
2/22/94 3.10 10,000,000 10,000,000 4559905U
Lloyds Bank PLC
2/28/94 3.35 17,000,000 16,999,961 539991AF
Societe Generale
3/4/94 3.41 10,000,000 9,998,494 833991SJ
4/18/94 3.41 5,000,000 4,999,641 833991SP
4/25/94 3.43 50,000,000 50,000,000 833991SK
5/17/94 3.48 3,000,000 2,999,595 833991SL
Sumitomo Bank, Ltd.
2/24/94 3.45 10,000,000 10,000,000 86699EBL
2/28/94 3.10 30,000,000 30,000,000 86699ECH
2/28/94 3.10 18,000,000 18,000,000 86699ECK
338,039,419
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 8.7%
ABN-AMRO Bank
2/3/94 3.37% $ 5,000,000 $ 5,000,000 032993KM
3/31/94 3.36 15,000,000 14,999,978 032993KL
2/23/94 3.35 25,000,000 25,000,090 032993KN
2/23/94 3.36 20,000,000 19,999,962 032993KK
Abbey National PLC, UK
2/28/94 3.37 25,000,000 25,000,145 007994GM
Lloyds Bank PLC
4/12/94 3.37 15,000,000 14,994,607 539991AG
Rabobank Nederland, N.V.
3/28/94 3.36 15,000,000 14,996,670 216992JC
Sumitomo Bank, Ltd.
2/7/94 3.10 10,000,000 10,000,209 86699ECF
129,991,661
TOTAL CERTIFICATES OF DEPOSIT 468,031,080
COMMERCIAL PAPER - 23.8%
CIESCO, L.P.
2/16/94 3.10 25,000,000 24,967,813 177996LN
Commerzbank U.S. Finance, Inc.
2/1/94 3.35 17,449,000 17,449,000 202995AP
Corporate Receivables Corp.
2/3/94 3.08 2,000,000 1,999,658 220992CD
Dresdner U.S. Finance Inc.
5/19/94 3.43 13,000,000 12,869,787 261998AC
General Electric Capital Corporation
3/1/94 3.39 25,000,000 24,934,861 369998KP
3/10/94 3.37 (a) 25,000,000 25,000,000 369998LE
3/30/94 3.39 20,000,000 19,893,917 369998KW
HYPO U.S. Finance
4/4/94 3.30 6,895,000 6,856,170 07299DAC
4/14/94 3.38 10,000,000 9,933,200 07299DAB
Hanson Finance Corp.
2/9/94 3.25 40,000,000 39,971,289 41199AAL
Kingdom of Denmark
2/14/94 3.39 70,000,000 69,915,825 249998AX
Kredietbank, N.A. Finance Corporation
5/17/94 3.48 15,000,000 14,850,375 50099DAC
5/24/94 3.46 5,000,000 4,947,111 50099DAF
Merck & Company, Inc.
5/27/94 3.40 15,000,000 14,839,479 5893319S
New South Wales Treasury Corp.
2/2/94 3.38 15,000,000 14,998,604 648992AD
2/14/94 3.38 19,500,000 19,476,410 648992AE
2/23/94 3.43 5,000,000 4,989,611 648992AF
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
Principal Mutual Life Insurance Company
2/15/94 3.08% $ 10,000,000 $ 9,988,061 742992JF
Texaco Inc.
2/17/94 3.11 10,000,000 9,986,222 920998LV
USAA Capital Corporation
2/18/94 3.28 10,000,000 9,984,558 914992FM
TOTAL COMMERCIAL PAPER 357,851,951
FEDERAL AGENCIES - 4.6%
FEDERAL FARM CREDIT BANK - DISCOUNT NOTES - 2.0%
6/14/94 3.33 30,000,000 29,636,467 313993MB
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 1.6%
2/14/94 3.60 (a) 25,000,000 25,000,000 9931287F
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 1.0%
7/6/94 3.47 10,000,000 9,853,611 9931164R
7/20/94 3.47 5,295,000 5,210,486 9931167M
15,064,097
TOTAL FEDERAL AGENCIES 69,700,564
U.S. TREASURY OBLIGATIONS - 1.9%
U.S. TREASURY BILLS
12/15/94 3.43 30,000,000 29,120,325 993134FU
BANK NOTES - 0.7%
PNC Bank, N.A.
4/19/94 3.30 10,000,000 9,997,424 69399EAD
FOREIGN GOVERNMENT OBLIGATIONS
(U.S. Dollars) - 4.6%
Canadian Treasury Bills
5/26/94 3.42 20,000,000 19,787,200 136992ST
5/31/94 3.42 30,000,000 29,666,800 136992SQ
6/13/94 3.35 20,000,000 19,758,000 136992TM
TOTAL FOREIGN GOVERNMENT OBLIGATIONS 69,212,000
SHORT-TERM NOTES (a) - 3.7%
CSA Funding (A)
2/7/94 3.16 22,000,000 22,000,000 129993AD
CSA Funding (B)
2/7/94 3.16 10,000,000 10,000,000 129993AC
CSA Funding (C)
2/7/94 3.16 23,000,000 23,000,000 129993AE
TOTAL SHORT-TERM NOTES 55,000,000
TIME DEPOSITS - 5.0%
Dai-Ichi Kangyo Bank, Ltd.
2/22/94 3.13% $ 25,000,000 $ 25,000,000 2379984G
Hong Kong & Shanghai Banking Corp.
2/1/94 3.25 50,000,000 50,000,000 4385609E
TOTAL TIME DEPOSITS 75,000,000
MUNICIPAL SECURITIES - 4.8%
Harris County Texas Health Facilities Authority
2/25/94 3.13 4,700,000 4,700,000 41415P9H
Illinois Student Assistance
2/7/94 3.22 (a) 10,000,000 10,000,000 452281DD
Louisiana Public Facilities Authority
2/25/94 3.13 47,200,000 47,200,000 5463969J
New Orleans Aviation Board (MBIA Insured)
2/7/94 3.26 (a) 9,700,000 9,700,000 64763H9B
TOTAL MUNICIPAL SECURITIES 71,600,000
MATURITY
AMOUNT
REPURCHASE AGREEMENTS - 16.1%
With First Boston Corporation:
At 3.10%, dated 1/12/94 due 2/10/94:
U.S. Government Obligations
(principal amount $31,304,907)
5.5% to 10.75%,
2/15/03 to 8/1/23 $ 30,074,917 30,000,000
At 3.10%, dated 1/12/94 due 2/16/94:
U.S. Government Obligations
(principal amount $41,705,658)
0% to 10.75%,
2/15/03 to 8/1/24 40,120,556 40,000,000
With Goldman, Sachs & Co.:
At 3.17%, dated 1/5/94 due 2/2/94:
U.S. Government Obligations
(principal amount $25,598,611)
6.50% to 9%,
12/1/99 to 1/1/24 25,061,639 25,000,000
MATURITY VALUE
AMOUNT (NOTE 1)
REPURCHASE AGREEMENTS - CONTINUED
With Goldman, Sachs & Co. - continued
At 3.125%, dated 1/10/94 due 2/7/94:
U.S. Government Obligations
(principal amount $40,960,440)
6.50% to 9%,
12/1/99 to 1/1/24 $ 40,097,222 $ 40,000,000
With Shearson Lehman Government Securities:
At 3.10%, dated 1/20/94 due 2/15/94:
65399ENMU.S. Government Obligations
(principal amount $32,992,772)
6.50%, 10/15/23 31,983,447 31,912,000
In a joint trading account
(U.S. Treasury Obligations)
dated 1/31/94, due 2/1/94
(Note 2)
At 3.19% 54,004,779 54,000,000
99799MSQAt 3.22% 20,653,846 20,652,000 99799MSU
TOTAL REPURCHASE AGREEMENTS 241,564,000
TOTAL INVESTMENTS - 100% $ 1,501,281,183
Total Cost for Income Tax Purposes-$1,501,281,183
LEGEND:
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
INCOME TAX INFORMATION:
At July 31, 1993, the fund had a capital loss carryforward of approximately
$65,000 of which $30,000 and $35,000 will expire on July 31, 2000 and 2001,
respectively.
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 $241,564,000)
(Notes 1 and 2) - See $ 1,501,281,183
accompanying schedule
Interest receivable 3,848,241
Receivable from investment adviser for expense reductions (Note 5) 20,307
TOTAL ASSETS 1,505,149,731
LIABILITIES
Payable for investments $ 54,120,325
purchased
Share transactions in process 4,667,849
Dividends payable 243,158
Accrued management fee 603,707
Other payables and accrued expenses 245,405
TOTAL LIABILITIES 59,880,444
NET ASSETS $ 1,445,269,287
Net Assets consist of:
Paid in capital $ 1,445,269,112
Accumulated net realized gain (loss) on investments 175
NET ASSETS, for 1,445,269,112 shares outstanding $ 1,445,269,287
NET ASSET VALUE, offering price and redemption price per share ($1,445,269,287 (divided by) 1,445,269,112 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 $ 24,178,244
EXPENSES
Management fee (Note 4) $ 3,694,628
Transfer agent fees (Note 4) 904,215
Accounting fees and expenses (Note 4) 80,014
Non-interested trustees' compensation 4,725
Custodian fees and expenses 44,777
Registration fees 57,004
Audit 12,128
Legal 13,177
Miscellaneous 12,656
Total expenses before 4,823,324
reductions
Expense reductions (Note 5) (20,307) 4,803,017
NET INTEREST INCOME 19,375,227
NET REALIZED GAIN (LOSS) ON 65,226
INVESTMENTS (NOTE 1)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 19,440,453
</TABLE>
Statement of Changes in Net Assets
DRAFT
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<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, 1994 JULY 31,
(UNAUDITED) 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 19,375,227 $ 42,868,040
Net interest income
Net realized gain (loss) on investments 65,226 (34,675)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 19,440,453 42,833,365
Dividends to shareholders from net interest income (19,375,227) (42,868,040)
Share transactions at net asset value of $1.00 per share 4,715,418,507 8,652,766,139
Proceeds from sales of shares
Reinvestment of dividends from net interest income 15,972,805 35,339,347
Cost of shares redeemed (4,737,590,141) (8,768,032,138)
Net increase (decrease) in net assets and shares resulting from share transactions (6,198,829) (79,926,652)
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,133,603) (79,961,327)
NET ASSETS
Beginning of period 1,451,402,890 1,531,364,217
End of period $ 1,445,269,287 $ 1,451,402,890
</TABLE>
Financial Highlights
DRAFT
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<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JULY 31,
ENDED
JANUARY 31, 1994
(UNAUDITED) 1993 1992 1991 1990 1989
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations
.013 .028 .041 .067 .080 .085
Net interest income
Dividends from net interest income
(.013) (.028) (.041) (.067) (.080) (.085)
Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (dagger)
1.33% 2.82% 4.21% 6.90% 8.34% 8.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 1,445,269 $ 1,451,403 $ 1,531,364 $ 1,714,108 $ 1,349,670 $ 893,611
Ratio of expenses to average net assets (dagger)(dagger)
.65%* .61% .59% .60% .61% .64%
Ratio of expenses to average net assets before
.65%* .61% .59% .60% .61% .73%
expense reductions (dagger)(dagger)
Ratio of net interest income to average
2.62%* 2.76% 4.19% 6.61% 7.99% 8.56%
net assets
</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
PERIOD SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
DAILY MONEY FUND: U.S. TREASURY 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 - 49.6%
U.S. TREASURY BILLS - 27.8%
2/3/94 3.30% $ 76,000,000 $ 75,986,278 99399HWL
4/7/94 3.35 33,500,000 33,304,025 99399HLF
4/21/94 3.18 200,000,000 198,626,277 99399H2P
4/28/94 3.23 20,000,000 19,848,067 99399H3C
5/5/94 3.21 26,000,000 25,791,112 99399HNJ
5/5/94 3.27 26,000,000 25,787,082 99399HNA
5/5/94 3.30 78,000,000 77,348,741 99399HPC
5/26/94 3.30 30,000,000 29,691,250 99399H6B
5/26/94 3.35 90,000,000 89,059,594 99399H5G
6/2/94 3.36 50,000,000 49,445,417 99399H5R
6/30/94 3.30 123,000,000 121,370,934
746,258,777
U.S. TREASURY NOTES - 21.8%
2/15/94 3.14 13,000,000 13,017,818 99399GGL
2/28/94 3.11 37,000,000 37,060,758 99399GHC
3/31/94 3.24 31,000,000 31,119,398 99399GJC
4/30/94 3.14 20,000,000 20,100,310 99399GGN
4/30/94 3.23 28,000,000 28,134,676 99399GFV
5/15/94 3.16 114,000,000 115,177,825 99399GGR
5/15/94 3.22 75,000,000 75,781,296 9931079W
5/31/94 3.20 21,000,000 21,123,228 99399GGM
7/15/94 3.16 50,000,000 51,073,428 993993DG
7/31/94 3.15 45,000,000 45,220,109 993993DF
7/31/94 3.20 23,000,000 23,106,203 9931079X
8/15/94 3.08 93,000,000 97,596,899 993993DE
8/15/94 3.15 25,000,000 25,475,61 993993CY3
583,987,561
TOTAL U.S. TREASURY OBLIGATIONS 1,330,246,338
Repurchase Agreements - 50.4%
In a joint trading account
(U.S. Treasury Obligations)
dated 1/31/94, due 2/1/94
(Note 2)
At 3.19% $ 1,313,116,205 $ 1,313,000,000 99799MSQ
At 3.22% 37,653,366 37,650,000 99799MSU
TOTAL REPURCHASE AGREEMENTS 1,350,650,000
TOTAL INVESTMENTS - 100% $ 2,680,896,338
Total Cost for Income Tax Purposes - $2,680,896,338
INCOME TAX INFORMATION:
At July 31, 1993, the fund had a capital loss carryforward of approximately
$44,000 which will expire on July 31, 2001.
U.S. TREASURY 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 $1,350,650,000)
(Notes 1 and 2) - See $ 2,680,896,338
accompanying schedule
Cash 5,567,740
Interest receivable 12,101,671
TOTAL ASSETS 2,698,565,749
LIABILITIES
Dividends payable $ 2,242,848
Accrued management fee 1,188,240
Other payables and accrued expenses 262,484
TOTAL LIABILITIES 3,693,572
NET ASSETS $ 2,694,872,177
Net Assets consist of:
Paid in capital $ 2,694,868,084
Accumulated net realized gain (loss) on investments 4,093
NET ASSETS, for 2,694,868,084 shares outstanding $ 2,694,872,177
NET ASSET VALUE, offering price and redemption price per share ($2,694,872,177 (divided by) 2,694,868,084 shares) $1.00
</TABLE>
Statement of Operations
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended January 31, 1994 (Unaudited)
INTEREST INCOME $ 46,089,025
EXPENSES
Management fee (Note 4) $ 7,291,961
Transfer agent fees (Note 4) 906,181
Accounting fees and expenses (Note 4) 134,281
Non-interested trustees' compensation 9,383
Custodian fees and expenses 56,702
Registration fees 60,399
Audit 24,354
Legal 21,472
Miscellaneous 24,436
TOTAL EXPENSES 8,529,169
NET INTEREST INCOME 37,559,856
NET REALIZED GAIN (LOSS) ON (1,754)
INVESTMENTS (NOTE 1)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 37,558,102
</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 $ 37,559,856 $ 77,613,277
Net interest income
Net realized gain (loss) on investments (1,754) (44,237)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 37,558,102 77,569,040
Dividends to shareholders from net interest income (37,559,856) (77,613,277)
Share transactions at net asset value of $1.00 per share 7,120,277,850 13,719,270,587
Proceeds from sales of shares
Reinvestment of dividends from net interest income 21,461,308 42,776,435
Cost of shares redeemed (7,396,035,729) (13,906,546,104)
Net increase (decrease) in net assets and shares resulting from share transactions (254,296,571) (144,499,082)
TOTAL INCREASE (DECREASE) IN NET ASSETS (254,298,325) (144,543,319)
NET ASSETS
Beginning of period 2,949,170,502 3,093,713,821
End of period $ 2,694,872,177 $ 2,949,170,502
</TABLE>
Financial Highlights
DRAFT
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JULY 31,
ENDED
JANUARY 31, 1994
(UNAUDITED) 1993 1992 1991 1990 1989
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations
.013 .027 .042 .065 .079 .083
Net interest income
Dividends from net interest income
(.013) (.027) (.042) (.065) (.079) (.083)
Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (dagger)
1.31% 2.78% 4.25% 6.69% 8.24% 8.64%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 2,694,872 $ 2,949,171 $ 3,093,714 $ 1,701,704 $ 1,177,290 $ 994,133
Ratio of expenses to average net assets
.58%* .57% .59% .59% .59% .64%
Ratio of expenses to average net assets before
.58%* .57% .59% .59% .59% .64%
expense reductions
Ratio of net interest income to average
2.58%* 2.73% 4.14% 6.42% 7.91% 8.47%
net assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1994 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Money Market Portfolio and U.S. Treasury Portfolio (the funds) are funds of
Daily Money Fund (the trust) and are authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company. 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.
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 SEC), 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.
3. JOINT TRADING ACCOUNT.
At the end of the period, the U.S. Treasury 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 $1,313,116,205 at 3.19% and
$37,653,366 at 3.22%.
The investments in repurchase agreements through the joint trading account
are summarized as follows:
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 $3,338,295,424 $3,400,338,433 3.875%-12.375%
2/15/94-2/15/23
At 3.22% 3 41% 465,000,000 465,041,567 469,534,224 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, FMR
or the funds' distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of each fund's shares. Subject to
the approval of the Board of Trustees, the Plans also authorize payments to
third parties that assist in the sale of each fund's shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $1,969,651 and
$4,746,877 for the Money Market and U.S. Treasury funds, respectively, for
the period.
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 FEE. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the funds' transfer, dividend disbursing
and shareholder servicing agent. FIIOC receives fees based on the type,
size, number of accounts and the number of transactions made by
shareholders. FIIOC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING FEE. Fidelity Service Co., an affiliate of FMR, maintains the
funds' accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .65% of average net assets. For the
period, the reimbursement reduced the expenses of the Money Market fund by
$20,307.
6. BENEFICIAL INTEREST.
At the end of the period, 2 shareholders were each record owners of more
than 10% of the total outstanding shares of the U. S. Treasury fund,
totaling 48%.
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.
This page is to be BLANK - do not strip-in this type or the BAR at top of
page.
Thank you
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
Gary L. French, TREASURER
John H. Costello, ASSISTANT TREASURER
Arthur S. Loring, SECRETARY
David H. Potel, ASSISTANT SECRETARY
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
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND
SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company
Boston, MA
CUSTODIAN
Morgan Guaranty Trust Company of New York
New York, NY
DMF-3-94S
