DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
INVESTMENTS JULY 31, 1996
Showing Percentage of Total Value of Investments
U.S. TREASURY OBLIGATIONS - 18.4%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
U.S. TREASURY BILLS - 10.1%
11/14/96 5.28% $ 29,000,000 $ 28,565,167
4/3/97 5.54 22,000,000 21,213,210
4/3/97 5.55 47,000,000 45,317,531
4/3/97 5.59 40,000,000 38,557,222
5/29/97 5.71 18,000,000 17,187,300
5/29/97 5.74 36,000,000 34,367,075
185,207,505
U.S. TREASURY NOTES - 8.3%
9/30/96 4.87 18,000,000 18,040,625
9/30/96 4.89 33,000,000 33,073,292
9/30/96 4.92 15,000,000 15,032,528
9/30/96 4.95 25,000,000 25,052,817
9/30/96 4.98 8,000,000 8,016,549
10/15/96 5.26 21,000,000 21,110,263
10/15/96 5.27 6,000,000 6,031,365
10/31/96 5.12 26,000,000 26,092,886
152,450,325
TOTAL U.S. TREASURY OBLIGATIONS 337,657,830
REPURCHASE AGREEMENTS - 81.6%
MATURITY VALUE
AMOUNT (NOTE 1)
In a joint trading account
(U.S. Treasury Obligations)
dated 7/31/96 due 8/1/96:
(Notes 2 and 3)
At 5.66% $ 46,132,253 $ 46,125,000
At 5.66% 1,450,228,039 1,450,000,000
TOTAL REPURCHASE AGREEMENTS 1,496,125,000
TOTAL INVESTMENTS - 100% $ 1,833,782,830
Total Cost for Income Tax Purposes $ 1,833,782,830
INCOME TAX INFORMATION
At July 31, 1996 the fund had a capital loss carryforward of approximately
$438,000 which will expire on July 31, 2002.
A total of 21.0% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JULY 31, 1996
1.ASSETS 2. 3.
4.Investment in securities, at value (including repurchase agreements of $1,496,125,000) - 5. $ 1,833,782,830
See accompanying schedule
6.Cash 7. 7,961,019
8.Interest receivable 9. 3,486,826
10. 11.TOTAL ASSETS 12. 1,845,230,675
13.LIABILITIES 14. 15.
16.Distributions payable $ 3,069,902 17.
18.Accrued management fee 714,459 19.
20.Other payables and accrued expenses 448,286 21.
22. 23.TOTAL LIABILITIES 24. 4,232,647
25.26.NET ASSETS 27. $ 1,840,998,028
28.Net Assets consist of: 29. 30.
31.Paid in capital 32. $ 1,841,386,179
33.Accumulated net realized gain (loss) on investments 34. (388,151)
35.36.NET ASSETS 37. $ 1,840,998,028
40. $1.00
38.INITIAL CLASS:
39.NET ASSET VALUE, offering price and redemption price per share
($1,801,042,232 (divided by) 1,801,421,960 shares)
41.CLASS B: 43. $1.00
42.NET ASSET VALUE, offering price and redemption price per share
($39,955,796 (divided by) 39,964,219 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED JULY 31, 1996
44.45.INTEREST INCOME 46. $ 111,910,720
47.EXPENSES 48. 49.
50.Management fee $ 10,004,781 51.
52.Transfer agent fees 3,473,119 53.
Initial Class
54. Class B 32,078 55.
56.Distribution fees - Class B 90,457 57.
58.Accounting fees and expenses 200,897 59.
60.Non-interested trustees' compensation 2,862 61.
62.Custodian fees and expenses 51,721 63.
64.Registration fees - Initial Class 112,389 65.
66.Registration fees - Class B 43,072 67.
68.Audit 22,687 69.
70.Legal 15,261 71.
72.Miscellaneous 16,296 73.
74. Total expenses before reductions 14,065,620 75.
76. Expense reductions (969,780) 13,095,840
77.78.NET INTEREST INCOME 79. 98,814,880
80.81.NET REALIZED GAIN (LOSS) ON INVESTMENTS 82. 37,646
83.84.NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 85. $ 98,852,526
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1996 1995
86.INCREASE (DECREASE) IN NET ASSETS
87.Operations $ 98,814,880 $ 95,675,780
Net interest income
88. Net realized gain (loss) 37,646 29,208
89. 90.NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 98,852,526 95,704,988
91.Distributions to shareholders (98,286,345) (95,473,806)
From net interest income
Initial Class
92. Class B (528,535) (201,974)
93. 94.TOTAL DISTRIBUTIONS (98,814,880) (95,675,780)
95.Share transactions - net increase (decrease) 10,109,349 (194,955,395)
96. 97.TOTAL INCREASE (DECREASE) IN NET ASSETS 10,146,995 (194,926,187)
98.NET ASSETS 99. 100.
101. Beginning of period 1,830,851,033 2,025,777,220
102. End of period $ 1,840,998,028 $ 1,830,851,033
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
U.S. Treasury Portfolio (the fund) is a fund of Daily Money Fund (the
trust) and is 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 organized as a
Delaware business trust.
The fund offers two classes of shares, Initial Class and Class B, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plan. Interest
income, realized and unrealized capital gains and losses, and the common
expenses of the fund are allocated on a pro rata basis to each class based
on the relative net assets of each class to the total net assets of the
fund. Each class of shares differs in its respective distribution, transfer
agent, registration, and certain other class-specific fees and expenses.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
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, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its 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 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. JOINT TRADING ACCOUNT.
At the end of the period, the 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 maturity values of the joint trading account
investments were $1,450,228,039 at 5.66% and $46,132,253 at 5.66%. The
investments in repurchase agreements through the joint trading account are
summarized as follows:
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING
DATED JULY 31, 1996, DUE AUGUST 1, 1996 AT 5.66%
Number of dealers or banks 16
Maximum amount with one dealer or bank 23.1%
Aggregate principal amount of agreements $8,668,731,000
Aggregate maturity amount of agreements $8,670,094,316
Aggregate market value of transferred assets $8,853,791,961
Coupon rates of transferred assets 0.0% to 14.25%
Maturity dates of transferred assets 8/1/96 to 2/15/26
DATED JULY 31, 1996, DUE AUGUST 1, 1996 AT 5.66%
Number of dealers or banks 4
Maximum amount with one dealer or bank 41.8%
Aggregate principal amount of agreements $335,000,000
Aggregate maturity amount of agreements $335,052,678
Aggregate market value of transferred assets $341,997,578
Coupon rates of transferred assets 0.0% to 14%
Maturity dates of transferred assets 8/8/96 to 2/15/26
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the 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 the 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 fee is paid prior to any voluntary
expense reimbursements which may be in effect.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Initial Class shares (Initial Class Plan) and Class B shares
(Class B Plan). Under the Initial Class Plan, FMR or the fund's
distributor, Fidelity Distributors Corporation (FDC), an affiliate of FMR,
may use its resources to pay administrative and promotional expenses
related to the sale of the fund's Initial Class shares. Subject to the
approval of the Board of Trustees, the Initial
Class Plan authorizes payments to third parties that assist in the sale of
the fund's Initial Class shares or render shareholder support services. FMR
or FDC has informed the fund that payments made to third parties under the
Initial Class Plan amounted to $5,808,081 for the period.
Under the Class B Plan, the fund pays FDC a distribution and service fee.
This fee is based on an annual rate of 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
average net assets of the Class B shares. For the period, the fund paid FDC
$90,457 under the Class B Plan, of which $25,397 was paid to securities
dealers, banks and other financial institutions for the distribution of
Class B shares and providing shareholder support services.
FMR or FDC may use its resources to pay administrative and promotional
expenses related to the sale of the fund's Class B shares. The Class B Plan
also authorizes payments to third parties that assist in the sale of the
fund's Class B shares or render shareholder support services.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives the proceeds of a contingent deferred sales charge
levied on Class B share redemptions occurring within five years of
purchase. The charge is based on declining rates which range from 4% to 1%
of the lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested dividends
and capital gains. For the period, FDC received contingent deferred sales
charges of $33,539 on Class B share redemptions from the fund. When Class B
shares are sold, FDC pays commissions from its own resources to dealers
through which the sales are made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and
shareholder servicing agent for the fund's Initial Class and Class B
shares. FIIOC receives account fees and asset-based fees that vary
according to account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .17%
and .25% of the average net assets for Initial Class and Class B shares,
respectively.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's 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 fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets.
(I) U.S. TREASURY INITIAL CLASS. For the period, this expense limitation
was .65% of average net assets and the reimbursement reduced expenses by
$910,404.
(II) U.S. TREASURY CLASS B. For the period, this expense limitation was
1.35% of average net assets and the reimbursement reduced expenses by
$59,376.
In addition, the fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of the fund's expenses. During the period, the fund's custodian
fees were reduced by $454 under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, 3 shareholders were each record owners of more
than 10% of the total outstanding shares of the fund, totaling
approximately 44% and 65% of Initial Class shares and Class B shares,
respectively.
7. SHARE TRANSACTIONS.
Share transactions for both classes of the U.S. Treasury fund at net asset
value of $1.00 per share were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR YEAR
ENDED ENDED
JULY 31, 1996 JULY 31, 1995
INITIAL CLASS:
Proceeds from sales of shares $ 11,030,210,151 $ 10,338,354,217
Reinvestment of distributions from net interest income 56,208,793 49,283,595
Cost of shares redeemed (11,113,118,785) (10,585,120,039)
Net increase (decrease) in net assets and shares resulting from share transactions $ (26,699,841) $ (197,482,227)
CLASS B:
Proceeds from sales of shares $ 82,859,473 $ 17,802,599
Reinvestment of distributions from net interest income 472,884 185,089
Cost of shares redeemed (46,523,167) (15,460,856)
Net increase (decrease) in net assets and shares resulting from share transactions $ 36,809,190 $ 2,526,832
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Daily Money Fund and the Shareholders of U.S. Treasury
Portfolio:
We have audited the accompanying statement of assets and liabilities of
Daily Money Fund: U.S. Treasury Portfolio, including the schedule of
portfolio investments, as of July 31, 1996, the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended and the financial
highlights for the ten years in the period then ended for the U.S. Treasury
Portfolio Initial Class and each of the two years ended July 31, 1996 and
for the period July 1, 1994 (commencement of operations) to July 31, 1994
for the U.S. Treasury Portfolio Class B. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Daily Money Fund: U.S. Treasury Portfolio as of July 31, 1996, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights on page P-5 for the periods set forth above, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
September 9, 1996
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
Leland Barron, VICE PRESIDENT
Sarah H. Zenoble, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Kenneth A. Rathgeber, TREASURER
Thomas D. Maher, ASSISTANT VICE PRESIDENT
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
Thomas J. Simpson, ASSISTANT TREASURER
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND
SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
* INDEPENDENT TRUSTEES
DAILY MONEY FUND: MONEY MARKET PORTFOLIO
INVESTMENTS JULY 31, 1996
Showing Percentage of Total Value of Investments
BANKERS' ACCEPTANCES - 1.4%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
DOMESTIC BANKERS' ACCEPTANCES - 1.1%
Chase Manhattan Bank, NA
8/2/96 5.41% $ 2,605,817 $ 2,605,430
8/26/96 5.42 2,394,491 2,385,561
8/29/96 5.47 2,844,529 2,832,560
9/12/96 5.46 2,800,000 2,782,523
9/16/96 5.51 1,167,344 1,159,229
Citibank, NA
9/16/96 5.47 7,000,000 6,951,700
Wachovia Bank of Georgia, NA
8/27/96 5.41 10,000,000 9,961,217
28,678,220
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.3%
Royal Bank of Canada
8/26/96 5.46 7,760,444 7,731,343
TOTAL BANKERS' ACCEPTANCES 36,409,563
CERTIFICATES OF DEPOSIT - 21.2%
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 12.5%
ABN-AMRO Bank
12/2/96 5.51 12,000,000 12,000,000
Bank of Tokyo - Mitsubishi Ltd.
10/15/96 5.67 40,000,000 40,000,000
Banque Nationale de Paris
8/1/96 5.47 5,000,000 5,000,000
8/29/96 5.11 9,000,000 9,000,000
Bayerische Landesbank Girozentrale
9/9/96 5.40 45,000,000 45,000,000
10/30/96 5.74 (a) 25,000,000 25,000,000
4/22/97 5.85 18,000,000 18,000,000
Canadian Imperial Bank of Commerce
12/5/96 5.63 6,000,000 6,000,000
Commerzbank, Germany
9/6/96 5.40 10,000,000 10,000,099
Deutsche Bank, Germany
12/23/96 5.52 18,000,000 18,000,000
Royal Bank of Canada
1/15/97 5.76 8,000,000 7,999,467
Sanwa Bank, Ltd.
9/3/96 5.50 8,000,000 8,000,073
10/31/96 5.68 5,000,000 5,000,000
11/4/96 5.69 16,000,000 16,000,000
Societe Generale, France
9/3/96 5.13 25,000,000 25,000,000
12/2/96 5.52 15,000,000 15,000,000
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Swiss Bank Corp.
8/8/96 5.16% $ 9,000,000 $ 8,999,716
Westdeutsche Landesbank
8/12/96 5.40 14,000,000 14,000,000
8/22/96 5.32 26,000,000 26,000,000
8/26/96 5.08 13,000,000 13,000,000
326,999,355
LONDON BRANCH, EURODOLLAR, DOMESTIC BANKS - 0.6%
Morgan Guaranty Trust Co.
9/6/96 5.45 16,000,000 16,000,939
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 8.1%
Abbey National Treasury Services
8/30/96 5.42 10,000,000 9,999,398
12/3/96 5.52 25,000,000 25,000,000
Bayerische Hypotheken-und Weschel
11/27/96 5.50 15,000,000 14,998,564
Bayerische Landesbank Girozentrale
8/27/96 5.12 20,000,000 19,998,974
Bayerische Vereinsbank A.G.
9/10/96 5.40 14,000,000 14,000,153
Deutsche Bank, Germany
9/4/96 5.38 18,000,000 18,000,000
9/9/96 5.41 20,000,000 20,000,000
National Westminster Bank, PLC
9/18/96 5.45 50,000,000 50,001,918
Rabobank Nederland, N.V.
12/3/96 5.50 20,000,000 20,000,670
Swiss Bank Corp.
10/11/96 5.55 20,000,000 20,000,778
212,000,455
TOTAL CERTIFICATES OF DEPOSIT 555,000,749
COMMERCIAL PAPER - 32.8%
ABN-AMRO North America Finance, Inc.
8/28/96 5.13 7,000,000 6,973,750
Asset Securitization Coop. Corp.
8/13/96 5.42 10,000,000 9,982,100
Associates Corp. of North America
8/22/96 5.37 5,000,000 4,984,542
8/22/96 5.45 7,000,000 6,977,950
8/22/96 5.46 25,000,000 24,920,958
Banc One Corp.
8/1/96 5.43 10,000,000 10,000,000
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
Bear Stearns Cos., Inc.
8/8/96 5.44% $ 3,000,000 $ 2,996,850
9/9/96 5.50 10,000,000 9,940,958
Beneficial Corp.
8/19/96 5.37 5,000,000 4,986,750
8/19/96 5.45 10,000,000 9,973,000
10/3/96 5.51 10,000,000 9,904,450
CIT Group Holdings, Inc.
8/12/96 5.44 6,000,000 5,990,100
Caisse d'Amortissement dela Dette Sociale
10/21/96 5.52 11,700,000 11,556,792
Caisse des Depots et Consignations
8/28/96 5.37 25,000,000 24,899,688
Cheltenham & Gloucester Building Society
10/21/96 5.53 20,000,000 19,754,750
Citibank Credit Card Master Trust I (Dakota Certificate Program)
8/19/96 5.44 15,000,000 14,959,650
8/21/96 5.46 25,000,000 24,925,000
9/5/96 5.45 5,000,000 4,973,896
Commerzbank U.S. Finance, Inc.
8/14/96 5.40 7,000,000 6,986,502
Compagnie Bancaire
8/30/96 5.51 20,000,000 19,912,356
9/9/96 5.52 8,500,000 8,449,907
Corporate Asset Funding Co., Inc.
9/4/96 5.39 21,000,000 20,894,487
Delaware Funding Corporation
8/20/96 5.45 15,000,000 14,957,250
Eiger Capital Corp.
8/14/96 5.40 10,000,000 9,980,717
8/26/96 5.37 15,000,000 14,944,271
Electricite de France
8/20/96 5.20 17,600,000 17,552,905
Electronic Data Systems
8/26/96 5.37 20,000,000 19,925,694
Enterprise Funding Corp.
8/20/96 5.45 3,000,000 2,991,450
8/23/96 5.43 2,000,000 1,993,449
8/28/96 5.41 9,164,000 9,127,023
Fleet Funding Corporation
8/7/96 5.46 2,000,000 1,998,190
Ford Motor Credit Corp.
8/2/96 5.41 28,000,000 27,995,823
8/12/96 5.37 10,000,000 9,983,653
8/30/96 5.46 10,000,000 9,956,500
General Electric Capital Corp.
8/12/96 5.39 30,000,000 29,951,417
8/21/96 5.42 25,000,000 24,925,417
8/22/96 5.42 25,000,000 24,921,688
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
General Electric Capital Services Inc.
8/7/96 5.42% $ 30,000,000 $ 29,973,000
8/23/96 5.42 25,000,000 24,917,958
8/27/96 5.44 25,000,000 24,902,681
8/29/96 5.44 25,000,000 24,895,194
Goldman Sachs Group, L.P. (The)
8/19/96 5.40 39,000,000 38,896,410
Lucent Technologies, Inc.
8/22/96 5.34 5,000,000 4,984,483
Merrill Lynch & Co., Inc.
9/9/96 5.50 25,000,000 24,852,531
Morgan Stanley Group, Inc.
8/15/96 5.43 40,000,000 39,916,000
8/23/96 5.37 10,000,000 9,967,611
8/26/96 5.37 10,000,000 9,963,194
National Australia Funding, Inc.
1/27/97 5.78 15,000,000 14,581,215
Nationwide Building Society
10/15/96 5.53 7,000,000 6,920,521
New Center Asset Trust
8/5/96 5.40 10,000,000 9,994,078
8/12/96 5.43 10,000,000 9,983,653
8/20/96 5.41 9,000,000 8,974,588
10/28/96 5.58 10,000,000 9,865,556
Philip Morris Cos., Inc.
9/9/96 5.47 15,000,000 14,911,925
Preferred Receivables Funding Corp.
8/12/96 5.43 35,000,000 34,942,464
8/20/96 5.34 5,670,000 5,654,080
9/10/96 5.45 15,000,000 14,910,000
Unifunding, Inc.
8/21/96 5.34 5,000,000 4,985,222
TOTAL COMMERCIAL PAPER 855,142,247
FEDERAL AGENCIES - 31.4%
FEDERAL HOME LOAN BANK - AGENCY COUPONS (A) - 4.6%
8/20/96 5.36 35,000,000 34,995,133
8/25/96 5.35 50,000,000 49,994,900
9/13/96 5.49 11,000,000 10,997,466
9/20/96 5.44 11,000,000 10,997,334
10/2/96 5.46 13,000,000 12,998,044
119,982,877
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 2.9%
8/14/96 5.31 18,360,000 18,325,259
9/3/96 5.39 30,000,000 29,853,150
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - CONTINUED
1/21/97 5.54% $ 18,000,000 $ 17,537,225
2/3/97 5.62 10,000,000 9,717,900
75,433,534
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 9.9%
8/12/96 5.31 19,700,000 19,668,458
8/13/96 5.31 17,000,000 16,970,307
9/3/96 5.32 43,941,000 43,729,534
9/3/96 5.37 3,350,000 3,333,663
9/4/96 5.32 50,000,000 49,752,083
9/4/96 5.37 1,925,000 1,915,328
9/9/96 5.32 10,000,000 9,943,125
9/9/96 5.40 63,700,000 63,332,530
10/7/96 5.39 11,000,000 10,890,985
10/18/96 5.43 31,500,000 31,134,180
12/2/96 5.47 9,270,000 9,101,502
259,771,695
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS (A) - 6.8%
8/1/96 5.39 25,000,000 24,984,293
8/2/96 5.44 50,000,000 49,970,852
8/15/96 5.25 10,000,000 9,989,246
8/16/96 5.38 40,000,000 39,998,953
9/20/96 5.44 33,000,000 32,990,155
10/17/96 5.56 19,000,000 18,993,198
176,926,697
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 5.9%
8/9/96 5.32 29,905,000 29,870,111
9/6/96 5.34 15,000,000 14,920,950
9/6/96 5.37 7,200,000 7,161,696
9/11/96 5.41 29,800,000 29,618,766
9/12/96 5.34 40,000,000 39,754,300
9/12/96 5.38 11,770,000 11,696,948
9/18/96 5.41 19,880,000 19,738,454
152,761,225
STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS (A) - 1.3%
10/16/96 5.68 35,000,000 35,000,000
TOTAL FEDERAL AGENCIES 819,876,028
U.S. TREASURY OBLIGATIONS - 2.5%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
U.S. Treasury Bills
5/29/97 5.62% $ 68,000,000 $ 64,975,284
BANK NOTES - 4.2%
Bank of America National Trust & Savings Assoc.
8/1/96 5.46 (a) 12,000,000 11,999,372
Bank of New York, NY
9/3/96 5.16 5,000,000 5,000,000
Bank One, Milwaukee
8/1/96 5.48 (a) 20,000,000 19,989,391
Fifth Third Bank - Cincinnati
8/14/96 5.40 25,000,000 25,000,000
First National Bank of Chicago
9/4/96 5.41 15,000,000 15,000,000
First Union National Bank of North Carolina
9/27/96 5.51 (a) 12,000,000 11,997,650
Seattle First National Bank
8/5/96 5.49 (a) 12,000,000 11,995,131
Wachovia Bank of North Carolina, NA
8/3/96 5.38 (a) 10,000,000 10,000,315
TOTAL BANK NOTES 110,981,859
MEDIUM-TERM NOTES (A) - 1.7%
Exxon Shipping Co.
8/1/96 5.44 18,100,000 18,100,000
8/1/96 5.47 25,000,000 25,000,000
TOTAL MEDIUM-TERM NOTES 43,100,000
SHORT-TERM NOTES (A) (B) - 1.7%
CSA Funding - B
8/7/96 5.56 22,000,000 22,000,000
CSA Funding - C
8/7/96 5.56 23,000,000 23,000,000
TOTAL SHORT-TERM NOTES 45,000,000
TIME DEPOSITS - 2.6%
Bank of Tokyo - Mitsubishi Ltd.
8/12/96 5.53 17,000,000 17,000,000
Canadian Imperial Bank of Commerce
8/1/96 5.75 50,000,000 50,000,000
TOTAL TIME DEPOSITS 67,000,000
REPURCHASE AGREEMENTS - 0.5%
MATURITY VALUE
AMOUNT (NOTE 1)
In a joint trading account
(U.S. Treasury Obligations)
dated 7/31/96 due 8/1/96:
At 5.66% $ 13,567,133 $ 13,565,000
TOTAL INVESTMENTS - 100% $ 2,611,050,730
Total Cost for Income Tax Purposes $ 2,611,050,730
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(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
CSA Funding - B 10/28/93 $ 22,000,000
CSA Funding - C 10/28/93 $ 23,000,000
INCOME TAX INFORMATION
At July 31, 1996, the fund had a capital loss carryforward of approximately
$822,000 of which $30,000, $35,000, $125,000, $584,000 and $48,000 will
expire on July 31, 2000, 2001, 2002, 2003 and 2004, respectively.
A total of 6.9% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
DAILY MONEY FUND: MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JULY 31, 1996
8.ASSETS 9. 10.
11.Investment in securities, at value (including repurchase agreements of $13,565,000) - 12. $ 2,611,050,730
See accompanying schedule
13.Cash 14. 6,801,800
15.Interest receivable 16. 8,698,430
17. 18.TOTAL ASSETS 19. 2,626,550,960
20.LIABILITIES 21. 22.
23.Payable for investments purchased $ 43,707,219 24.
25.Distributions payable 724,773 26.
27.Accrued management fee 826,138 28.
29.Other payables and accrued expenses 786,138 30.
31. 32.TOTAL LIABILITIES 33. 46,044,268
34.35.NET ASSETS 36. $ 2,580,506,692
37.Net Assets consist of: 38. 39.
40.Paid in capital 41. $ 2,581,328,617
42.Accumulated net realized gain (loss) on investments 43. (821,925)
44.45.NET ASSETS, for 2,581,328,617 shares outstanding 46. $ 2,580,506,692
47.48.NET ASSET VALUE, offering price and redemption price per share 49. $1.00
($2,580,506,692 (divided by) 2,581,328,617 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED JULY 31, 1996
50.51.INTEREST INCOME 52. $ 137,532,412
53.EXPENSES 54. 55.
56.Management fee $ 12,172,452 57.
58.Transfer agent fees 5,920,309 59.
60.Accounting fees and expenses 233,579 61.
62.Non-interested trustees' compensation 8,831 63.
64.Custodian fees and expenses 99,889 65.
66.Registration fees 265,857 67.
68.Audit 39,610 69.
70.Legal 17,739 71.
72.Reports to shareholders 6,164 73.
74.Miscellaneous 12,940 75.
76. Total expenses before reductions 18,777,370 77.
78. Expense reductions (2,953,826) 15,823,544
79.80.NET INTEREST INCOME 81. 121,708,868
82.83.NET REALIZED GAIN (LOSS) ON INVESTMENTS 84. (48,294)
85.86.NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 87. $ 121,660,574
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1996 1995
88.INCREASE (DECREASE) IN NET ASSETS
89.Operations $ 121,708,868 $ 94,283,195
Net interest income
90. Net realized gain (loss) (48,294) (583,736)
91. 92.NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 121,660,574 93,699,459
93.Distributions to shareholders from net interest income (121,708,868) (94,283,195)
94.Share transactions at net asset value of $1.00 per share 13,231,538,511 9,812,791,289
Proceeds from sales of shares
95. Reinvestment of distributions from net interest income 112,618,012 85,047,974
96. Cost of shares redeemed (12,902,990,749) (9,282,734,518)
97.98. 441,165,774 615,104,745
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES RESULTING FROM SHARE TRANSACTIONS
99. 100.TOTAL INCREASE (DECREASE) IN NET ASSETS 441,117,480 614,521,009
101.NET ASSETS 102. 103.
104. Beginning of period 2,139,389,212 1,524,868,203
105. End of period $ 2,580,506,692 $ 2,139,389,212
</TABLE>
DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
INVESTMENTS JULY 31, 1996
Showing Percentage of Total Value of Investments
U.S. TREASURY OBLIGATIONS - 18.4%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
U.S. TREASURY BILLS - 10.1%
11/14/96 5.28% $ 29,000,000 $ 28,565,167
4/3/97 5.54 22,000,000 21,213,210
4/3/97 5.55 47,000,000 45,317,531
4/3/97 5.59 40,000,000 38,557,222
5/29/97 5.71 18,000,000 17,187,300
5/29/97 5.74 36,000,000 34,367,075
185,207,505
U.S. TREASURY NOTES - 8.3%
9/30/96 4.87 18,000,000 18,040,625
9/30/96 4.89 33,000,000 33,073,292
9/30/96 4.92 15,000,000 15,032,528
9/30/96 4.95 25,000,000 25,052,817
9/30/96 4.98 8,000,000 8,016,549
10/15/96 5.26 21,000,000 21,110,263
10/15/96 5.27 6,000,000 6,031,365
10/31/96 5.12 26,000,000 26,092,886
152,450,325
TOTAL U.S. TREASURY OBLIGATIONS 337,657,830
REPURCHASE AGREEMENTS - 81.6%
MATURITY VALUE
AMOUNT (NOTE 1)
In a joint trading account
(U.S. Treasury Obligations)
dated 7/31/96 due 8/1/96:
(Notes 2 and 3)
At 5.66% $ 46,132,253 $ 46,125,000
At 5.66% 1,450,228,039 1,450,000,000
TOTAL REPURCHASE AGREEMENTS 1,496,125,000
TOTAL INVESTMENTS - 100% $ 1,833,782,830
Total Cost for Income Tax Purposes $ 1,833,782,830
INCOME TAX INFORMATION
At July 31, 1996 the fund had a capital loss carryforward of approximately
$438,000 which will expire on July 31, 2002.
A total of 21.0% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JULY 31, 1996
106.ASSETS 107. 108.
109.Investment in securities, at value (including repurchase agreements of $1,496,125,000) - 110. $ 1,833,782,830
See accompanying schedule
111.Cash 112. 7,961,019
113.Interest receivable 114. 3,486,826
115. 116.TOTAL ASSETS 117. 1,845,230,675
118.LIABILITIES 119. 120.
121.Distributions payable $ 3,069,902 122.
123.Accrued management fee 714,459 124.
125.Other payables and accrued expenses 448,286 126.
127. 128.TOTAL LIABILITIES 129. 4,232,647
130.131.NET ASSETS 132. $ 1,840,998,028
133.Net Assets consist of: 134. 135.
136.Paid in capital 137. $ 1,841,386,179
138.Accumulated net realized gain (loss) on investments 139. (388,151)
140.141.NET ASSETS 142. $ 1,840,998,028
145. $1.00
143.INITIAL CLASS:
144.NET ASSET VALUE, offering price and redemption price per share
($1,801,042,232 (divided by) 1,801,421,960 shares)
146.CLASS B: 148. $1.00
147.NET ASSET VALUE, offering price and redemption price per share
($39,955,796 (divided by) 39,964,219 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED JULY 31, 1996
149.150.INTEREST INCOME 151. $ 111,910,720
152.EXPENSES 153. 154.
155.Management fee $ 10,004,781 156.
157.Transfer agent fees 3,473,119 158.
Initial Class
159. Class B 32,078 160.
161.Distribution fees - Class B 90,457 162.
163.Accounting fees and expenses 200,897 164.
165.Non-interested trustees' compensation 2,862 166.
167.Custodian fees and expenses 51,721 168.
169.Registration fees - Initial Class 112,389 170.
171.Registration fees - Class B 43,072 172.
173.Audit 22,687 174.
175.Legal 15,261 176.
177.Miscellaneous 16,296 178.
179. Total expenses before reductions 14,065,620 180.
181. Expense reductions (969,780) 13,095,840
182.183.NET INTEREST INCOME 184. 98,814,880
185.186.NET REALIZED GAIN (LOSS) ON INVESTMENTS 187. 37,646
188.189.NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 190. $ 98,852,526
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1996 1995
191.INCREASE (DECREASE) IN NET ASSETS
192.Operations $ 98,814,880 $ 95,675,780
Net interest income
193. Net realized gain (loss) 37,646 29,208
194. 98,852,526 95,704,988
195.NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
196.Distributions to shareholders (98,286,345) (95,473,806)
From net interest income
Initial Class
197. (528,535) (201,974)
Class B
198. 199.TOTAL DISTRIBUTIONS (98,814,880) (95,675,780)
200.Share transactions - net increase (decrease) 10,109,349 (194,955,395)
201. 10,146,995 (194,926,187)
202.TOTAL INCREASE (DECREASE) IN NET ASSETS
203.NET ASSETS 204. 205.
206. Beginning of period 1,830,851,033 2,025,777,220
207. End of period $ 1,840,998,028 $ 1,830,851,033
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Money Market Portfolio and U.S. Treasury 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 Delaware business trust. Each fund is
authorized to issue an unlimited number of shares.
U.S. Treasury Portfolio offers two classes of shares, Initial Class and
Class B, each of which has equal rights as to assets and voting privileges.
Each class has exclusive voting rights with respect to its distribution
plan. Interest income, realized and unrealized capital gains and losses,
and the common expenses of the fund are allocated on a pro rata basis to
each class based on the relative net assets of each class to the total net
assets of the fund. Each class of shares differs in its respective
distribution, transfer agent, registration, and certain other
class-specific fees and expenses.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. 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 substantially 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 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the funds, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the funds'
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The Money Market fund is permitted to invest in
securities that are subject to legal or contractual restrictions on resale.
These securities generally 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
$45,000,000 or 1.7% of net assets.
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
3. JOINT TRADING ACCOUNT - CONTINUED
with entities whose creditworthiness has been reviewed and found
satisfactory by FMR. The maturity values of the joint trading account
investments were $1,450,228,039 at 5.66% and $46,132,253 at 5.66% The
investments in repurchase agreements through the joint trading account are
summarized as follows:
SUMMARY OF JOINT TRADING
DATED JULY 31, 1996, DUE AUGUST 1, 1996 AT 5.66%
Number of dealers or banks 16
Maximum amount with one dealer or bank 23.1%
Aggregate principal amount of agreements $8,668,731,000
Aggregate maturity amount of agreements $8,670,094,316
Aggregate market value of transferred assets $8,853,791,961
Coupon rates of transferred assets 0.0% to 14.25%
Maturity dates of transferred assets 8/1/96 to 2/15/26
DATED JULY 31, 1996, DUE AUGUST 1, 1996 AT 5.66%
Number of dealers or banks 4
Maximum amount with one dealer or bank 41.8%
Aggregate principal amount of agreements $335,000,000
Aggregate maturity amount of agreements $335,052,678
Aggregate market value of transferred assets $341,997,578
Coupon rates of transferred assets 0.0% to 14%
Maturity dates of transferred assets 8/8/96 to 2/15/26
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 fee is paid prior to any voluntary
expense reimbursements which may be in effect.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans) adopted by Initial Class shares of each fund, 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 Initial Class shares. Subject to the approval of each
Board of Trustees, the Plans also authorize payments to third parties that
assist in the sale of each fund's Initial Class shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $5,374,819 and
$5,808,081 for the Initial Class of the Money Market and U.S. Treasury
funds, respectively, for the period.
In accordance with Rule 12b-1 of the 1940 Act, the Trustees have adopted a
separate distribution plan with respect to the U.S. Treasury fund's Class B
shares (Class B Plan). Under the Class B Plan, the fund pays FDC a
distribution and service fee. This fee is based on an annual rate of 1.00%
(of which .75% represents a distribution fee and .25% represents a
shareholder
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
service fee) of the average net assets of the Class B shares. For the
period, the fund paid FDC $90,457 under the Class B Plan, of which $25,397
was paid to securities dealers, banks and other financial institutions for
the distribution of Class B shares and providing shareholder support
services.
SALES LOAD. FDC receives the proceeds of a contingent deferred sales charge
levied on Class B share redemptions occurring within five years of
purchase. The charge is based on declining rates which range from 4% to 1%
of the lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested dividends
and capital gains. For the period, FDC received contingent deferred sales
charges of $33,539 on Class B share redemptions from the fund. When Class B
shares are sold, FDC pays commissions from its own resources to dealers
through which the sales are made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the funds' transfer, dividend disbursing
and shareholder servicing agent. FIIOC receives account fees and
asset-based fees that vary according to account size and type of account of
the shareholders of the respective classes of the funds. FIIOC pays for
typesetting, printing and mailing of all shareholder reports, except proxy
statements. For the period, the transfer agent fees were equivalent to an
annual rate of .24%, .17% and .25% of the average net assets for Money
Market, U.S. Treasury Initial Class and U.S. Treasury Class B,
respectively.
ACCOUNTING FEES. Fidelity Service Co. (FSC), 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 a specified percentage of average net assets.
(I) MONEY MARKET. For the period, this expense limitation was .65% of
average net assets and the reimbursement reduced expenses by $2,953,189.
(II) U.S. TREASURY INITIAL CLASS. For the period, this expense limitation
was .65% of average net assets and the reimbursement reduced expenses by
$910,404.
(III) U.S. TREASURY CLASS B. For the period, this expense limitation was
1.35% of average net assets and the reimbursement reduced expenses by
$59,376.
In addition, each fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of each fund's expenses. During the period, the custodian fees were
reduced by $637 and $454 for the Money Market and U.S. Treasury funds,
respectively, under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, 3 shareholders were each record owners of more
than 10% of the total outstanding shares of U.S. Treasury fund, totaling
approximately 44% and 65% of Initial Class shares and Class B shares,
respectively.
7. SHARE TRANSACTIONS.
Share transactions for both classes of the U.S. Treasury fund at net asset
value of $1.00 per share were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR YEAR
ENDED ENDED
JULY 31, 1996 JULY 31, 1995
INITIAL CLASS:
Proceeds from sales of shares $ 11,030,210,151 $ 10,338,354,217
Reinvestment of distributions from net interest income 56,208,793 49,283,595
Cost of shares redeemed (11,113,118,785) (10,585,120,039)
Net increase (decrease) in net assets and shares resulting from share transactions $ (26,699,841) $ (197,482,227)
CLASS B:
Proceeds from sales of shares $ 82,859,473 $ 17,802,599
Reinvestment of distributions from net interest income 472,884 185,089
Cost of shares redeemed (46,523,167) (15,460,856)
Net increase (decrease) in net assets and shares resulting from share transactions $ 36,809,190 $ 2,526,832
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Daily Money Fund and the Shareholders of Money Market
Portfolio and U.S. Treasury Portfolio:
We have audited the accompanying statements of assets and liabilities of
Daily Money Fund: Money Market Portfolio and U.S. Treasury Portfolio,
including the schedules of portfolio investments, as of July 31, 1996, the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the ten years in the period then
ended for the Money Market Portfolio and each of the ten years in the
period then ended for the U.S. Treasury Portfolio (Initial Class). These
financial statements and financial highlights are the responsibility of the
funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Daily Money Fund: Money Market Portfolio and U.S. Treasury Portfolio as
of July 31, 1996, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period
then ended, and the financial highlights on page P-5 for the periods set
forth above, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
September 9, 1996
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
Leland Barron, VICE PRESIDENT
Sarah H. Zenoble, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Kenneth A. Rathgeber, TREASURER
Thomas D. Maher, ASSISTANT VICE PRESIDENT
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
Thomas J. Simpson, ASSISTANT TREASURER
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND
SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
* INDEPENDENT TRUSTEES
