<PAGE> 1
PROVIDENT
INSTITUTIONAL 400 Bellevue Parkway, Wilmington, DE 19809 M Phone:
302-792-2555 M Fax: 302-792-5876
FUNDS
G. Willing Pepper
Chairman
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
January 14, 1998
Dear Shareholder:
Enclosed is the Annual Report to Shareholders of Municipal Fund for
Temporary Investment for the year ended November 30, 1997.
I invite your attention to the Investment Adviser's Report which provides
interesting information on the economy and on the performance of our portfolios.
Provident Institutional Funds is committed to providing its shareholders
with quality services, liquidity, competitive returns and stability of
principal.
Please contact your Provident Advisers, Inc. account representative or our
Client Service Center at (800) 821-7432 if you have any questions about
Municipal Fund for Temporary Investment or any of the other portfolios offered
by Provident Institutional Funds.
We thank you for the opportunity to service your investment needs.
Sincerely,
/s/ G. Willing Pepper
G. Willing Pepper
Chairman
<PAGE> 2
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
Annual Report of the Investment Adviser
Adhering to a belief that economic growth would slow substantially from its
strong first quarter pace, the Federal Reserve maintained an unchanged monetary
policy following its 25 basis point move on March 25, 1997. The Fed's subsequent
decision to keep short-term interest rates at 5.50%, however, was not easily
made. By mid-spring, there was persistent evidence of continued strength in U.S.
productivity and employment. Economic reports, as evidenced by the drop in the
unemployment rate to 4.6%, showed no letup in the gradual tightening of the U.S.
labor market. The production side of the economy also sustained its momentum as
the National Association of Purchasing Managers survey reached its highest level
since April 1995. Consumer spending, however, appeared to remain subdued as
motor vehicles and chain store sales slipped to levels below their first quarter
averages. On the inflation front, the news remained excellent as core producer
prices were virtually unchanged over the past year. In response to the good news
on inflation, the Fed demonstrated a clear preference for patience in responding
to the economy's strength, continuing to believe that growth would slow to a
pace that would nullify the need for further monetary tightening. The reaction
in the marketplace to the Fed's decision to keep short-term interest rates
unchanged was one of caution as investors were skeptical about the outlook for
an economic slowdown. In early autumn, the release of economic data that growth
was still quite strong, led to a growing "hawkish" sentiment towards further
monetary tightening. However, the Fed again opted not to tighten rates at its
September meeting and the advent of the Asian crisis in late October made it
unlikely that the Fed would consider doing so anytime in the near future.
Tax-exempt money market fund assets hit new highs in nearly every month of
the year ended November 30, 1997. Assets reached a peak of $159.4 billion for
the week ended December 1, 1997, up 14% over 1996, according to IBC's Money Fund
Report. Tax-exempt yields continued to fluctuate during the year as supply and
demand factors dominated the market. Seasonal pressures caused variable rate
yields to rise and fall dramatically during the period. Quarter-end window
dressing pressures forced variable rate yields higher on a temporary basis,
while the payments of quarterly Treasury bond coupon interest supplied cash to
the market, driving yields down. Corporations were also active participants in
the tax-free money markets, purchasing municipals when they were attractive on
an after-tax basis, and liquidating them when tax-free rates declined.
Investment strategy during the year emphasized a laddered maturity
approach, in anticipation of seasonal fund asset fluctuations. Variable rate
demand notes generally comprised 55-65% of the Fund's two portfolios, as these
securities offered liquidity to meet volatile fund activity while also providing
attractive yields. During the year, yields on variable rate securities ranged
from a low of 3.05% on March 12, 1997 to a high of 4.57% on April 23, 1997,
averaging 3.67% for the one-year period. General market notes were purchased
during the summer months as supply grew and yields increased. Due to an
unchanged Fed policy during the last three quarters of the year, notes traded in
a narrow range of 40 basis points. According to the Bond Buyer 1-year note
index, these securities' yields hit a low of 3.57% on January 16, 1997 and a
high of 3.97% on April 17, 1997 and averaged 3.80% for the year.
At the end of November, MuniFund's average weighted maturity stood at 57
days while MuniCash's average weighted maturity was 31 days. The two portfolios
continued to remain competitive within their peer groups. MuniFund ranked #2 in
total return among 12 S&P AAA rated tax-free funds, while MuniCash was ranked #5
in total return among 79 tax-free institutional funds for the 12 months ended
November 1997, according to IBC's Money Fund Report. Both funds continued their
emphasis on high credit quality and liquidity.
PNC INSTITUTIONAL MANAGEMENT CORPORATION
2
<PAGE> 3
MUNIFUND PORTFOLIO
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
Statement of Net Assets
November 30, 1997
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ------------------------ --------- ------- ------------
<S> <C> <C> <C>
ALABAMA -- 5.87%
Alabama Housing Finance
Authority Multifamily Housing
RB (Heatherbrooke Project)
Series C DN (Federal National
Mortgage Association LOC)
(A-1+, VMIG-1)
3.90%(1)............ 12/07/97 $ 6,300 $ 6,300,000
Alabama Housing Finance
Authority Multifamily Housing
RB (Rime Huntsville Project)
Series B DN (Federal National
Mortgage Association LOC)
(A-1+)
3.90%(1)............ 12/07/97 3,000 3,000,000
Alabama Housing Finance
Authority Multifamily Housing
RB (Rime Village Hoover
Project) Series A DN (Federal
National Mortgage Association
LOC) (A-1+)
3.90%(1)............ 12/07/97 5,765 5,765,000
Calhoun County Economic
Development Council IDRB
(Craft Corporation Project) DN
(Amsouth Bank of Alabama LOC)
(A-1+, VMIG-1)
4.25%(1)............ 12/07/97 3,710 3,710,000
City of Montgomery BMC Special
Care Facilities Authority
Hospital RB (Baptist Medical
Center) Series A DN (Amsouth
Bank of Alabama LOC) (VMIG-1)
4.05%(1)............ 12/07/97 9,900 9,900,000
City of Montgomery BMC Special
Care Facilities Authority
Hospital RB (VHA of Alabama
Incorporated Capital Asset
Financing Program) Series
1985H DN (Mellon LOC)
(A-1, VMIG-1)
3.90%(1)............ 12/07/97 6,795 6,795,000
------------
35,470,000
------------
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- ------------
<S> <C> <C> <C>
ARIZONA -- 3.62%
Apache County IDA PCRB (Tucson
Electric Power Company) Series
1983A DN (Barclays Bank LOC)
(A-1+, VMIG-1)
3.85%(1)............ 12/07/97 $ 6,900 $ 6,900,000
Salt River Agricultural
Improvement & Power District
TECP (A-1+, P-1)
3.80%............... 12/05/97 15,000 15,000,000
------------
21,900,000
------------
CALIFORNIA -- 3.28%
California RAN
(SP-1+, MIG-1)
4.50%............... 06/30/98 5,000 5,020,176
Los Angeles County TRAN (SP-1+,
MIG-1)
4.50%............... 06/30/98 14,750 14,804,077
------------
19,824,253
------------
COLORADO -- 2.82%
Colorado Housing Finance
Authority Multifamily Housing
RB (Hunters Project)
Series E DN (Federal
National Mortgage Association
LOC) (A-1+)
3.90%(1)............ 12/07/97 805 805,000
Colorado Housing Finance
Authority Multifamily Housing
RB (Silver Reef Project)
Series 1996A-2 DN (Federal
National Mortgage Association
LOC) (A-1+, VMIG-1)
3.90%(1)............ 12/07/97 1,200 1,200,000
Colorado State General Fund TRAN
Series A
(SP-1+, MIG-1)
4.50%............... 06/26/98 15,000 15,053,216
------------
17,058,216
------------
FLORIDA -- 5.97%
City of Orlando Special
Assessment RB (Republic Drive
Interchange Project) Series
1997A DN (Morgan Guaranty LOC)
(VMIG-1)
3.85%(1)............ 12/07/97 7,200 7,200,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
3
<PAGE> 4
MUNIFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
FLORIDA (CONTINUED)
Dade County IDA (Dolphins Stadium
Project) Series B DN (Societe
Generale LOC) (A-1+)
3.85%(1)............ 12/07/97 $ 6,200 $ 6,200,000
Orange County Housing Finance
Authority Multifamily RB (Post
Lake Apartments Project) DN
(Federal National Mortgage
Association LOC) (A-1+)
3.90%(1)............ 12/07/97 5,000 5,000,000
Orange County Housing Finance
Authority RB (Post Fountains
at Lee Vista) Series 1997E DN
(Federal National Mortgage
Association LOC) (A-1+)
3.90%(1)............ 12/07/97 6,100 6,100,000
St. Petersburg Capital
Improvement RB (Apartment &
Golf Course Project) Series B
DN (Suntrust Bank LOC) (Aa3)
3.95%(1)............ 12/07/97 1,580 1,580,000
Sunshine State Government
Financing Commission RB
(Morgan Guaranty LOC) (A-1+,
VMIG-1)
3.80%............... 12/22/97 10,000 10,000,000
------------
36,080,000
------------
GEORGIA -- 8.73%
Burke County IDA PCRB
(Oglethorpe Power Company
Vogtle Project) MB (AMBAC
Insurance) (AAA)
3.60%............... 12/01/97 4,000 4,000,000
Cobb County Housing Authority
Multifamily Housing RB (Post
Mill Project) Series 1995 DN
(Federal National Mortgage
Association LOC) (A-1+,
VMIG-1)
3.90%(1)............ 12/07/97 7,400 7,400,000
Dekalb County Housing Authority
Multifamily Housing Bonds
(Camden Brooke Project) DN
(Federal National Mortgage
Association LOC) (VMIG-1)
3.90%(1)............ 12/07/97 600 600,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
GEORGIA (CONTINUED)
Dekalb County Housing Authority
Multifamily Housing Bonds
(Post Walk Project) DN
(Federal National Mortgage
Association LOC)
(A-1+, VMIG-1)
3.90%(1)............ 12/07/97 $10,000 $ 10,000,000
Fulton County IDA (Arthritis
Foundation Incorporated) DN
(SunTrust Bank LOC) (Aa3)
3.95%(1)............ 12/07/97 1,000 1,000,000
Fulton County IDA (Epstein
School Project) DN (SunTrust
Bank LOC) (Aa3)
3.95%(1)............ 12/07/97 2,000 2,000,000
Georgia Municipal Association
Pooled Bond Certificates of
Participation DN (Credit
Suisse LOC) (A-1+, VMIG-1)
3.85%(1)............ 12/07/97 3,400 3,400,000
Gwinnett County Development
Authority (Wesleyan School
Project) Series 1997 DN
(SunTrust Bank LOC)(Aa3)
3.95%(1)............ 12/07/97 2,000 2,000,000
Monroe County Development
Authority PCRB (Gulf Power
Company Plant) DN
(A-1, VMIG-1)
4.00%(1)............ 12/01/97 500 500,000
Municipal Electric Authority of
Georgia Series B DN (Credit
Suisse LOC) (A-1+, P-1)
3.90%(1)............ 12/07/97 2,955 2,955,000
Municipal Electric Authority of
Georgia Series C DN
(Morgan Guaranty LOC)
(A-1+, VMIG-1)
3.90%(1)............ 12/07/97 6,200 6,200,000
Smyrna Housing Authority
Multifamily Housing RB (F&M
Villages Project) Series 1997
DN (Federal National Mortgage
Association LOC) (A-1+)
3.90%(1)............ 12/07/97 8,500 8,500,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
4
<PAGE> 5
MUNIFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ------------------- -------- ------- ------------
<S> <C> <C> <C>
GEORGIA (CONTINUED)
Smyrna Housing Authority
Multifamily Housing RB (Post
Valley Project) Series 1995 DN
(Federal National Mortgage
Association LOC) (A-1+)
3.90%(1)............ 12/07/97 $ 4,200 $ 4,200,000
------------
52,755,000
------------
HAWAII -- 0.36%
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage Revenue Bonds
(Kaiser Permanente) (A-1+)
3.75%............... 03/01/98 2,200 2,200,000
------------
IDAHO -- 1.25%
Idaho TAN (SP-1+, MIG-1)
4.625%.............. 06/30/98 7,500 7,531,086
------------
ILLINOIS -- 16.71%
Illinois Development Finance
Authority PCRB (Consolidated
Edison Company Project) Series
B DN (Bank of New York LOC)
(A-1, VMIG-1)
3.85%(1)............ 12/07/97 16,300 16,300,000
Illinois Development Finance
Authority PCRB (Illinois Power
Company Project) (Canadian
Imperial Bank LOC)
(A-1+, VMIG-1)
3.80%............... 03/17/98 14,000 14,000,000
Illinois Development Finance
Authority RB (Chicago Symphony
Project) DN
(Bank of America LOC)
(A-1+, VMIG-1)
3.85%(1)............ 12/07/97 10,000 10,000,000
Illinois Education Authority
(Art Institute of Chicago) DN
(A-1, VMIG-1)
3.90%(1)............ 12/07/97 2,400 2,400,000
Illinois Educational Facilities
Authority (University Pooled
Financing Program) DN (FNB
Chicago LOC) (VMIG-1)
3.85%(1)............ 12/07/97 645 645,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
ILLINOIS (CONTINUED)
Illinois Health Facilities
Authority (Gottlieb Health
Resources Incorporated) DN
(Harris
Trust & Savings Bank LOC)
(VMIG-1)
3.85%(1)............ 12/07/97 $ 2,000 $ 2,000,000
Illinois Health Facilities
Authority (Gottlieb Health
Resources Incorporated) Series
1994 DN (Harris Trust &
Savings Bank LOC) (VMIG-1)
3.85%(1)............ 12/07/97 400 400,000
Illinois Health Facilities
Authority (Revolving Fund
Pooled Financing) Series 1985C
DN (FNB Chicago LOC) (VMIG-1)
3.85%(1)............ 12/07/97 2,000 2,000,000
Illinois Health Facilities
Authority (Revolving Fund
Pooled Financing) Series 1985F
DN (Swiss Bank LOC)
(A-1+, VMIG-1)
3.85%(1)............ 12/07/97 5,800 5,800,000
Illinois Health Facilities
Authority (University of
Chicago Hospital Project)
Series 1994C DN (Comerica Bank
LOC)
(A-1+, VMIG-1)
3.85%(1)............ 12/07/97 5,300 5,300,000
Illinois Health Facilities
Authority RB (Evanston
Hospital Corporation Project)
(A-1+, VMIG-1)
3.80%............... 03/31/98 10,000 10,000,000
3.90%............... 07/31/98 5,000 5,000,000
Illinois Tender Notes Series C-1
(Societe Generale LOC) (A-1+,
P-1)
3.75%............... 04/02/98 8,930 8,930,000
Illinois Tender Notes Series C-2
(Societe Generale LOC) (A-1+,
P-1)
3.75%............... 04/02/98 13,800 13,800,000
Illinois University RB (Health
Services Facility System)
Series B DN (Landesbank Hessen
LOC) (A-1+, VMIG-1)
3.85%(1)............ 12/07/97 4,400 4,400,000
------------
100,975,000
------------
</TABLE>
---------------------------------------------------------
(1) Variable rate
5
<PAGE> 6
MUNIFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
INDIANA -- 1.11%
Rockport PCRB (Michigan Power
Company Project) DN (AMBAC
Insurance)
(A-1, VMIG-1)
3.90%(1)............ 12/07/97 $ 300 $ 300,000
South Bend Redevelopment
Authority (College Football
Hall of Fame) DN (Landesbank
Hessen LOC) (A-1+, VMIG-1)
3.85%(1)............ 12/07/97 6,400 6,400,000
------------
6,700,000
------------
KENTUCKY -- 1.16%
Jefferson County Board of
Education RAN
(SP-1+, MIG-1)
3.86%............... 06/30/98 7,000 7,000,369
------------
LOUISIANA -- 1.17%
Louisiana Public Facilities
Authority (College & Equipment
Project) Series A DN (Societe
Generale LOC) (A-1+, VMIG-1)
4.00%(1)............ 12/07/97 7,050 7,050,000
------------
MARYLAND -- 5.73%
Maryland Health & Higher
Education Facilities Authority
RB (Capitol College Project)
DN (FNB Maryland LOC) (VMIG-1)
4.15%(1)............ 12/07/97 7,850 7,850,000
Maryland Health & Higher
Education Facilities Authority
RB (Doctors Community
Hospital) Series 1997 DN (FNB
Maryland LOC) (A-1)
4.13%(1)............ 12/07/97 7,800 7,800,000
Maryland Industrial Development
Finance Authority (McDonough
School Project) DN (FNB
Maryland LOC) (A-1)
4.15%(1)............ 12/07/97 4,000 4,000,000
Maryland State Economic
Development Corporation RB
(Pooled Financing) DN
(NationsBank LOC)
(A-1+, VMIG-1)
4.05%(1)............ 12/07/97 10,000 10,000,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
MARYLAND (CONTINUED)
Maryland State IDA (McDonough
School Income Facility) DN
(FNB Maryland LOC)
(A-1, VMIG-1)
4.15%(1)............ 12/07/97 $ 5,000 $ 5,000,000
------------
34,650,000
------------
MASSACHUSETTS -- 2.29%
Massachusetts Health & Education
Authority (Partners
Healthcare) Series P-2 DN (FSA
Insurance) (VMIG-1)
3.75%(1)............ 12/07/97 6,000 6,000,000
Massachusetts Municipal
Wholesale Electric Company
Power Supply System RB Series
1994C DN (Canadian Imperial
Bank LOC)
(A-1+, VMIG-1)
3.65%(1)............ 12/07/97 7,835 7,835,000
------------
13,835,000
------------
MICHIGAN -- 4.22%
Michigan State Building
Authority Series I TECP
(Canadian Imperial Bank LOC)
(A-1+, P-1)
3.75%............... 03/02/98 15,500 15,500,000
Michigan State Hospital Finance
Authority (St. Mary Hospital
of Livonia) DN (Comerica Bank
LOC) (A-1, VMIG-1)
3.85%(1)............ 12/07/97 10,000 10,000,000
------------
25,500,000
------------
MISSISSIPPI -- 0.08%
Jackson County Port Facility
(Chevron Incorporated) Series
1993 DN (VMIG-1)
3.90%(1)............ 12/01/97 500 500,000
------------
MISSOURI -- 1.69%
Missouri Environmental
Improvement RB (Kansas City
Power & Light) DN (VMIG-1)
3.90%(1)............ 12/07/97 2,000 2,000,000
Missouri Health & Educational
Facilities Authority RB
(Barnes Hospital) DN
(Morgan Guaranty LOC)
(A-1+, VMIG-1)
3.85%(1)............ 12/07/97 5,100 5,100,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
6
<PAGE> 7
MUNIFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
MISSOURI (CONTINUED)
Missouri Health & Educational
Facilities Authority RB
(Washington University) Series A
DN (A-1+, VMIG-1)
3.90%(1)............ 12/07/97 $ 300 $ 300,000
Missouri Health & Educational
Facilities Authority Refunding
RB (Sisters of Mercy Health
System) Series 1992B DN (A-1+,
VMIG-1)
3.85%(1)............ 12/07/97 2,800 2,800,000
------------
10,200,000
------------
NEBRASKA -- 0.17%
Nebraska Higher Education Loan
Program (Student Loan Program)
RB Series 1985D DN (Student
Loan Marketing Association
LOC) (VMIG-1)
3.85%(1)............ 12/07/97 1,000 1,000,000
------------
NEVADA -- 1.55%
Clark County Airport Systems
Series 1993A DN (National
Westminster LOC)
(A-1+, VMIG-1)
3.80%(1)............ 12/07/97 4,400 4,400,000
Clark County IDRB (Nevada Power
Company Project) DN (Barclays
Bank LOC)
(A-1+, VMIG-1)
4.05%(1)............ 12/07/97 5,000 5,000,000
------------
9,400,000
------------
NEW HAMPSHIRE -- 2.17%
New Hampshire Health & Higher
Education Facilities Authority
(VHA of New England Capital
Asset Financing Program) DN
(FNB Chicago LOC)
(A-1, VMIG-1)
3.90%(1)............ 12/07/97 8,050 8,050,000
New Hampshire Health & Higher
Education Facilities Authority
(VHA of New England Capital
Asset Financing Program)
Series 1985F DN (Mellon LOC)
(A-1, VMIG-1)
3.90%(1)............ 12/07/97 5,050 5,050,000
------------
13,100,000
------------
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
NEW JERSEY -- 0.46%
New Jersey Sports & Exhibition
Authority Series 1992C DN
(Barclays Bank LOC)
(A-1+, VMIG-1)
3.70%(1)............ 12/07/97 $ 2,800 $ 2,800,000
------------
NEW YORK -- 1.29%
City of New York GO RAN Series
1997 DN (Bank of New York LOC)
(SP-1+, MIG-1)
4.15%(1)............ 12/01/97 3,700 3,700,000
City of New York Municipal
Assistance Corporation (Public
Benefit Corporation of The
State of New York) Series
1991K DN (Bayerische
Landesbank Girozentrale LOC)
(A-1+, VMIG-1)
3.75%(1)............ 12/07/97 1,800 1,800,000
New York State Environmental
Quality GO Series 1997A TECP
(Bayerische Landesbank
Girozentrale LOC)
(A-1+, P-1)
3.70%............... 12/18/97 2,300 2,300,000
------------
7,800,000
------------
NORTH CAROLINA -- 0.17%
North Carolina Educational
Facilities RB (The Bowman Gray
School of Medicine Project)
Series 1997 DN (Wachovia Bank
LOC) (VMIG-1)
3.85%(1)............ 12/07/97 1,000 1,000,000
------------
OHIO -- 2.20%
Clermont County Health
Facilities Authority RB (Mercy
Health System Project) DN
(Credit Suisse LOC) (VMIG-1)
3.85%(1)............ 12/07/97 3,800 3,800,000
Franklin County Hospital
Facilities Referral &
Improvement RB (U.S. Health
Corporation of Columbus)
Series 1996A DN (Morgan
Guaranty LOC) (VMIG-1)
3.90%(1)............ 12/07/97 6,500 6,500,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
7
<PAGE> 8
MUNIFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
OHIO (CONTINUED)
Montgomery County Limited
Obligation RB (Society of St.
Vincent de Paul Project) Series
1996 DN (National City Bank of
Cleveland LOC)
(A-1, VMIG-1)
4.00%(1)............ 12/07/97 $ 1,000 $ 1,000,000
Ohio Higher Education Facilities
Authority (Oberlin College) DN
(Morgan Guaranty LOC) (VMIG-1)
3.90%(1)............ 12/07/97 2,000 2,000,000
------------
13,300,000
------------
OKLAHOMA -- 1.94%
Garfield County IDA PCRB
(Oklahoma Gas & Electric
Company) DN
(A-1+, VMIG-1)
3.90%(1)............ 12/07/97 700 700,000
Oklahoma State Water Resource
Board (State Loan Program) RB
(Swiss Bank LOC) (A-1+)
3.75%............... 03/02/98 11,000 11,000,000
------------
11,700,000
------------
OREGON -- 2.58%
Umitilla County Hospital
Facilities Authority RB
(Catholic Health) Series B DN
(A-1+, VMIG-1)
4.00%(1)............ 12/07/97 15,600 15,600,000
------------
SOUTH CAROLINA -- 0.49%
Piedmont Municipal Power Agency
Electric Refunding RB Series B
DN (Credit Suisse LOC) (A-1+,
VMIG-1)
3.85%(1)............ 12/07/97 600 600,000
South Carolina Economic
Development Authority Hospital
Facilities RB (Tuomey Regional
Medical Center) Series B DN
(Wachovia Bank LOC) (A-1+,
VMIG-1)
3.90%(1)............ 12/07/97 2,350 2,350,000
------------
2,950,000
------------
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
TENNESSEE -- 11.04%
City of Chattanooga Health
Education & Housing Authority
(The Baylor Project) DN
(SunTrust Bank LOC) (Aa3)
3.95%(1)............ 12/07/97 $ 900 $ 900,000
Clarksville Public Building
Authority (Pooled Financing
Municipal Fund) Series 1995 DN
(NationsBank LOC) (A-1+)
4.05%(1)............ 12/07/97 22,000 22,000,000
Knox County Health Education &
Housing Board (Mercy Health
Systems) DN (A-1+, VMIG-1)
3.85%(1)............ 12/07/97 5,000 5,000,000
Metropolitan Government
Nashville Davidson County
Health & Education Board
(Harpeth Hall School Project)
DN (SunTrust Bank LOC) (Aa3)
3.95%(1)............ 12/07/97 480 480,000
Montgomery County Public
Building Authority Pooled
Financing GO (Montgomery
County Loan Pool) Series 1996
DN (NationsBank LOC) (A-1+,
VMIG-1)
4.05%(1)............ 12/07/97 3,000 3,000,000
Montgomery County Public
Building Authority Pooled
Financing GO (Tennessee County
Loan Pool) Series 1995 DN
(NationsBank LOC) (A-1+,
VMIG-1)
4.05%(1)............ 12/07/97 16,800 16,800,000
Montgomery County Public
Building Authority Pooled
Financing GO (Tennessee County
Loan Pool) DN (NationsBank
LOC) (VMIG-1)
4.05%(1)............ 12/07/97 15,000 15,000,000
Rutherford Industrial
Development Board (Square D
Company Project) DN (Societe
Generale LOC) (VMIG-1)
3.85%(1)............ 12/07/97 3,100 3,100,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
8
<PAGE> 9
MUNIFUND PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- ------------
<S> <C> <C> <C>
TENNESSEE (CONTINUED)
Washington County IDRB
(Springbrook Properties Project)
Series 1996 DN (SunTrust Bank LOC)
(Aa3)
3.95%(1)............ 12/07/97 $ 400 $ 400,000
------------
66,680,000
------------
TEXAS -- 10.84%
Harris County Health Facilities
Development Authority Hospital
RB (Memorial Hospital System
Project) Series 1997B DN
(Societe Generale LOC)
(A-1+, VMIG-1)
3.80%(1)............ 12/07/97 4,000 4,000,000
Harris County Health Facilities
Development Corporation
(Baylor College of Medicine)
DN (A-1+)
3.90%(1)............ 12/07/97 5,000 5,000,000
Harris County Toll Road Series E
DN (A-1+, VMIG-1)
3.80%(1)............ 12/07/97 7,500 7,500,000
Houston TRAN (SP-1+, MIG-1)
4.50%............... 06/30/98 5,000 5,018,077
Texas TRAN Series A (SP-1+,
MIG-1)
4.75%............... 08/31/98 38,800 39,063,690
Texas Veterans Housing
Assistance Program RB Series
1995 DN (A-1+, VMIG-1)
3.80%(1)............ 12/07/97 4,885 4,885,000
------------
65,466,767
------------
VERMONT -- 0.30%
Vermont Health & Educational
Buildings Finance Agency
Hospital RB (VHA of New
England Capital Asset
Financing Program) Series
1985C DN (FNB Chicago LOC)
(A-1+)
3.90%(1)............ 12/07/97 1,800 1,800,000
------------
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ------------------------ --------- ------- ------------
<S> <C> <C> <C>
VIRGINIA -- 0.53%
Hampton Roads Regional Jail
Authority (Regional Jail
Facility Project) Series 1996B
DN (Wachovia Bank LOC) (A-1+,
VMIG-1)
3.80%(1)............ 12/07/97 $ 700 $ 700,000
Louisa County IDA (Pooled
Financing) DN (NationsBank
LOC) (A-1+, VMIG-1)
4.05%(1)............ 12/07/97 1,500 1,500,000
Lynchburg IDA (VHA Mid-Atlantic
States Capital Asset Financing
Program) Series 1985C DN (FNB
Chicago LOC) (A-1+, VMIG-1)
3.90%(1)............ 12/07/97 1,000 1,000,000
------------
3,200,000
------------
WASHINGTON -- 0.56%
Chelan County Public Utility
District #1 (Chelan Hydro
Consolidated System) Series
1995A DN (Credit Suisse LOC)
(A-1+, VMIG-1)
3.90%(1)............ 12/07/97 3,375 3,375,000
------------
WEST VIRGINIA -- 0.20%
West Virginia Financial
Authority Hospital RB (VHA
Midatlantic Hospital Project)
Series H DN (Mellon LOC)
(A-1+)
3.90%(1)............ 12/01/97 1,200 1,200,000
------------
</TABLE>
---------------------------------------------------------
(1) Variable rate
9
<PAGE> 10
MUNIFUND PORTFOLIO
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
VALUE
------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $619,600,691*)............ 102.55% $619,600,691
LIABILITIES IN EXCESS OF
OTHER ASSETS.................... (2.55) (15,420,077)
------- ------------
NET ASSETS (Equivalent to $1.00
per share based on 536,871,419
MuniFund Shares and 67,392,180
MuniFund Dollar Shares
outstanding).................... 100.00% $604,180,614
======= ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($604,180,614 / 604,263,599).............. $1.00
=====
- ---------------
* Aggregate cost for federal income tax purposes is
substantially the same.
(1) Variable rate
---------------------------------------------------------
</TABLE>
MUNIFUND PORTFOLIO
SUPPLEMENTARY INFORMATION
Maturity Schedule
November 30, 1997
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
-------------- ------------ ----------
<S> <C> <C> <C> <C>
1- 30 Days $445,680,000 72.0%
91-120 Days 42,700,000 6.9
121-150 Days 32,730,000 5.3
Over 150 Days 98,050,000 15.8
Average Weighted Maturity -- 57 Days
---------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 11
MUNICASH PORTFOLIO
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
Statement of Net Assets
November 30, 1997
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ------------------------ --------- ------- ------------
<S> <C> <C> <C>
ALABAMA -- 2.74%
Phenix IDRB Enviromental
Improvement Authority (Mead
Coated Board Project) Series A
AMT (Mitsubishi Bank LOC)
(A-1)
3.95%(1)............ 12/01/97 $15,000 $ 15,000,000
------------
ARIZONA -- 0.94%
Phoenix IDRB (Leggett & Platt
Incorporated Project) AMT
(Wachovia Bank LOC)
4.05%(1)............ 12/07/97 5,170 5,170,000
------------
ARKANSAS -- 2.15%
Arkansas State Development
Finance Authority Single
Family Mortgage Revenue Bonds
Series D AMT (Canadian
Imperial Bank LOC) (A-1+)
4.05%............... 07/01/98 3,900 3,900,000
Hope City Solid Waste Disposal
RB (Temple Inland Forest
Products Corporation Project)
AMT (A-2, P-1)
4.05%............... 02/27/98 7,900 7,900,000
------------
11,800,000
------------
CALIFORNIA -- 4.86%
California GO DN (Bank of New
York LOC) (A-1+, VMIG-1)
4.15%(1)............ 12/01/97 24,630 24,630,000
Los Angeles County TRAN (SP-1+,
MIG-1)
4.50%............... 06/30/98 2,000 2,007,234
------------
26,637,234
------------
COLORADO -- 0.73%
Colorado Springs RB (YMCA of
Pikes Peak Region) DN (Norwest
Bank LOC) (A-1+)
3.90%(1)............ 12/07/97 4,000 4,000,000
------------
FLORIDA -- 0.00%
Volusia County Health Facilities
Authority RB (Volusia Health
Systems Project) DN (First
Union Bank LOC) (A-1)
3.85%(1)............ 12/07/97 15 15,000
------------
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- -------------------- -------- ------- -----------
<S> <C> <C> <C>
GEORGIA -- 5.80%
Bulloch County Development
Authority IDRB (Gold Kist
Incorporated Project) Series
1995 AMT (Wachovia Bank LOC)
4.05%(1)............ 12/07/97 $ 4,700 $ 4,700,000
Burke County PCRB (Oglethorpe
Power Company Vogtle Project)
MB (AMBAC Insurance)
3.60%............... 12/01/97 2,500 2,500,000
Carrollton County Industrial
Improvement Revenue Bonds
(Flowers Baking Villa Company)
AMT (Trust Company Bank LOC)
4.05%(1)............ 12/07/97 6,125 6,125,000
Cobb County IDRB (John W. Rooker
Company Project) AMT (First
Union Bank LOC)
4.15%(1)............ 12/07/97 2,200 2,200,000
Dekalb County Housing Finance
Authority Multifamily Housing
RB (Eagle Trace Apartments
Project) AMT (Key Corporation
Bank, N.A. LOC)(A-1)
4.01%(1)............ 12/07/97 4,675 4,675,000
Haralson County Development
Authority IDRB (Gold Kist
Incorporated Project) Series
1995 AMT (Wachovia Bank LOC)
4.05%(1)............ 12/07/97 2,500 2,500,000
Henry County Development Finance
Authority Solid Waste Disposal
RB (Atlas Roofing Corporation
Project) AMT (SunTrust LOC)
4.05%(1)............ 12/07/97 4,100 4,100,000
Middle Georgia Regional
Development Finance Authority
IDRB (Tolleson Lumber Company
Project) AMT (Wachovia Bank
LOC)
4.05%(1)............ 12/07/97 5,000 5,000,000
------------
31,800,000
------------
</TABLE>
---------------------------------------------------------
(1) Variable rate
11
<PAGE> 12
MUNICASH PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
HAWAII -- 0.18%
Hawaii Department of Budget &
Finance Special Purpose
Mortgage RB (Ewa Plain Water
Development Authority) (Bank
of Hawaii LOC) (VMIG-1)
3.95%............... 10/01/98 $ 1,000 $ 1,000,000
------------
IDAHO -- 0.46%
Idaho TAN (SP-1+, MIG-1)
4.625%.............. 06/30/98 2,500 2,510,362
------------
ILLINOIS -- 12.69%
Belvidere IDRB (R&D Thiel
Incorporated Project) AMT
(First Bank Systems, N.A. LOC)
(A-1)
4.15%(1)............ 12/07/97 1,760 1,760,000
Chicago IDRB (Enterprise Center
IX Project) AMT (ABN-AMRO Bank
N.V. LOC) (A-1+)
4.25%(1)............ 12/07/97 4,750 4,750,000
Chicago IDRB (Enterprise Center
VII Project) AMT (ABN-AMRO
Bank N.V. LOC) (A-1+)
4.25%(1)............ 12/07/97 7,200 7,200,000
Chicago IDRB (Goose Island Beer
Company Project) AMT (First
Bank Systems, N.A. LOC)
4.10%(1)............ 12/07/97 1,900 1,900,000
Illinois Development Finance
Authority (Azteca Foods
Project Incorporated) AMT
(ABN-AMRO Bank N.V. LOC)
(A-1+)
4.15%(1)............ 12/07/97 3,800 3,800,000
Illinois Development Finance
Authority IDRB (Bhagvan H.
Patel Project) AMT (Bank One
Columbus LOC) (A-1+)
4.05%(1)............ 12/07/97 2,305 2,305,000
Illinois Development Finance
Authority IDRB (Big Bolt
Corporation Project) AMT
(ABN-AMRO Bank N.V. LOC)
4.35%(1)............ 12/07/97 2,000 2,000,000
Illinois Development Finance
Authority IDRB (Henry Valve
Company Project) Series 1995
AMT (ABN-AMRO Bank N.V. LOC)
(A-1+)
4.15%(1)............ 12/07/97 4,235 4,235,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
ILLINOIS (CONTINUED)
Illinois Development Finance
Authority IDRB (Prairie
Packaging Incorporated
Project) AMT (ABN-AMRO Bank
N.V. LOC) (A-1+)
4.15%(1)............ 12/07/97 $ 5,000 $ 5,000,000
Illinois Development Finance
Authority IDRB (Royal
Continental Box Project)
Series B AMT (ABN-AMRO Bank
N.V. LOC) (A-1+)
4.15%(1)............ 12/07/97 3,450 3,450,000
Illinois Development Finance
Authority RB (Lyric Opera of
Chicago Project) Series 1994
DN (Harris Trust & Savings
Bank LOC) (A-1+, VMIG-1)
3.85%(1)............ 12/07/97 3,800 3,800,000
Illinois Health Facilities
Authority RB (Evanston
Hospital Corporation) MB
(A-1+, VMIG-1)
3.90%............... 10/15/98 5,000 5,000,000
Illinois Housing Development
Finance Authority RB Home
Ownership Mortgage Bonds AMT
(Morgan Stanley Group LOC)
(A-1+, VMIG-1)
3.70%............... 12/18/97 4,300 4,300,000
Lake County IDRB (Northpoint
Project) AMT (Bank One
Columbus LOC) (A-1+)
3.95%(1)............ 12/07/97 6,000 6,000,000
Naperville Economic Development
Authority (Independence
Village Associates) DN
(National City Bank LOC)
4.05%(1)............ 12/07/97 2,915 2,915,000
Sangamon County IDRB (Contech
Construction Project
Incorporated) Series 1992 AMT
(Mellon LOC) (VMIG-1)
4.10%(1)............ 12/07/97 3,000 3,000,000
Sangamon County IDRB (Contech
Construction Project
Incorporated) Series 1994 AMT
(Mellon LOC) (VMIG-1)
4.10%(1)............ 12/07/97 3,800 3,800,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
12
<PAGE> 13
MUNICASH PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
ILLINOIS (CONTINUED)
Sangamon County IDRB (Contech
Construction Project Incorporated)
Series 1997 AMT (Mellon LOC)
4.10%(1)............ 12/07/97 $ 1,500 $ 1,500,000
Village of North Aurora IDRB
(Oberweis Dairy Incorporated
Project) Series 1995 AMT
(ABN-AMRO Bank N.V. LOC)
(A-1+, VMIG-1)
4.15%(1)............ 12/07/97 2,800 2,800,000
------------
69,515,000
------------
INDIANA -- 3.11%
Gibson City PCRB (Toyota Motor
Manufacturing Industries
Project) AMT (Bank of Tokyo
LOC) (A-1)
4.15%(1)............ 12/07/97 5,000 5,000,000
Indiana Development Finance
Authority IDRB (Cives
Corporation Project) Series
1992 AMT (Wachovia Bank LOC)
(A-1+)
4.05%(1)............ 12/07/97 3,600 3,600,000
Indiana Development Finance
Authority IDRB (Enterprise
Center V Project) Series 1992
AMT (ABN-AMRO Bank N.V. LOC)
(A-1+)
4.25%(1)............ 12/07/97 5,000 5,000,000
Jasper County Economic
Development RB (Wabash Valley
Produce Project) AMT (Bank One
Columbus LOC)
4.05%(1)............ 12/07/97 2,000 2,000,000
Noblesville IDRB (Industrial
Dielectrics Incorporated
Project) AMT (National City
Bank of Cleveland LOC)
4.15%(1)............ 12/07/97 1,420 1,420,000
------------
17,020,000
------------
IOWA -- 1.83%
Polk County Health Facilities
Authority RB (Catholic Health
Initiatives Project) Series
1997B DN (Toronto Dominion
LOC) (A-1+, VMIG-1)
4.00%(1)............ 12/07/97 10,000 10,000,000
------------
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
KANSAS -- 0.46%
Shawnee Private Activity RB
(Simmons Company Project) AMT
(SunTrust LOC) (A-1+, VMIG-1)
4.05%(1)............ 12/07/97 $ 2,500 $ 2,500,000
------------
KENTUCKY -- 5.14%
City of Maysville Solid Waste
Disposal Facilities Revenue
Bonds (Inland Container
Corporation Project) Series
1992 AMT (P-1)
4.00%............... 12/12/97 5,165 5,165,000
4.00%............... 01/23/98 5,000 5,000,000
4.05%............... 02/20/98 7,035 7,035,000
Elsmere IDRB (International Mold
Steel, Incorporated Project)
AMT (Star Banc Corporation
LOC)
4.15%(1)............ 12/07/97 1,945 1,945,000
Jefferson County Board of
Education RAN (SP-1+, MIG-1)
3.86%............... 06/30/98 7,000 7,000,369
Kentucky State Housing Finance
Authority Series D RB (A-1+,
VMIG-1)
4.00%............... 12/31/97 2,000 2,000,000
------------
28,145,369
------------
LOUISIANA -- 0.20%
St. Charles Parish PCRB (Shell
Oil Company Norco Project)
Series 1993 AMT (A-1+, VMIG-1)
4.05%(1)............ 12/01/97 1,100 1,100,000
------------
MAINE -- 1.10%
Maine State Housing Finance
Authority Multifamily Housing
RB (Park Village Apartments
Project) AMT (General Electric
Capital Corporation LOC)
(VMIG-1)
4.05%(1)............ 12/07/97 6,000 6,000,000
------------
MARYLAND -- 4.15%
Maryland State Economic
Development Corporation RB
(Atlantic Pharmaceutical
Services Incorporated) AMT
(FNB Maryland LOC) (A-1)
4.28%(1)............ 12/07/97 5,500 5,500,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
13
<PAGE> 14
MUNICASH PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
MARYLAND (CONTINUED)
Maryland State Health & Higher
Education Authority (Johns Hopkins
Hospital Project) DN (NationsBank
LOC) (A-1+)
4.05%(1)............ 12/07/97 $10,225 $ 10,225,000
Ocean County RB (Harrison Inn
Fifty-Eight Limited
Partnership Facility) AMT (FNB
Maryland LOC) (A-1)
4.33%(1)............ 12/07/97 4,895 4,895,000
Wicomico County Economic
Development RB (Plymouth Tube
Company Project) AMT (FNB
Chicago LOC) (VMIG-1)
3.95%(1)............ 12/07/97 2,100 2,100,000
------------
22,720,000
------------
MICHIGAN -- 0.94%
Michigan State Strategic Fund RB
(Pioneer Metal Finishing
Company Project) AMT (National
City Bank of Cleveland LOC)
(A-1)
4.10%(1)............ 12/07/97 5,135 5,135,000
------------
MINNESOTA -- 0.47%
Minnesota Agricultural Economic
Development Authority (Como
Partnership Project) AMT
(First Bank Systems, N.A. LOC)
4.20%(1)............ 12/07/97 2,550 2,550,000
------------
MISSOURI -- 2.37%
Maries County IDA Solid Waste
Management RB (Kingsford
Products Company Project) AMT
(A-1)
4.10%(1)............ 12/07/97 13,000 13,000,000
------------
NEVADA -- 0.42%
Washoe County Water Facilities
RB (Sierra Pacific Power
Company Project) Series 1990
AMT (Union Bank of Switzerland
LOC) (A-1+, VMIG-1)
4.10%(1)............ 12/01/97 2,300 2,300,000
------------
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
NEW HAMPSHIRE -- 0.47%
New Hampshire State Business
Finance Authority IDRB (Felton
Brush Incorporated Project)
AMT (Key Corporation Bank N.A.
LOC)
4.17%(1)............ 12/07/97 $ 2,600 $ 2,600,000
------------
NEW JERSEY -- 9.11%
East Brunswick BAN
4.125%.............. 11/03/98 2,050 2,054,929
Galloway Township BAN
4.25%............... 10/30/98 1,800 1,806,710
Hopewell Township BAN
4.25%............... 05/22/98 1,000 1,001,352
Kearny Township GO Bonds (FGIC
Insurance)
4.00%............... 02/15/98 475 475,186
New Jersey Economic Development
Authority PCRB (Public Service
Electric & Gas Company
Project) DN (Swiss Bank LOC)
(A-1+, VMIG-1)
4.00%(1)............ 12/07/97 2,400 2,400,000
New Jersey Sports & Exhibition
Authority Series 1992C DN
(MBIA Insurance) (A-1+)
3.70%(1)............ 12/07/97 24,100 24,100,000
New Jersey State Higher
Education Assistance Authority
Student Loan (New Jersey Class
Loan Program) Series B RB
(MBIA Insurance) (A-1+)
3.90%............... 06/01/98 2,000 2,000,000
New Jersey TRAN TECP (Bank of
Nova Scotia LOC) (A-1+, P-1)
3.70%............... 01/13/98 3,000 3,000,000
New Jersey Turnpike Authority RB
Series 1991D DN (Societe
Generale LOC) (A-1+, VMIG-1)
3.70%(1)............ 12/07/97 5,600 5,600,000
Paramus Borough BAN
3.82%............... 08/13/98 2,070 2,070,276
Rahway BAN
4.125%.............. 10/09/98 2,630 2,634,847
Randolf Township BAN
3.82%............... 06/19/98 2,757 2,757,438
------------
49,900,738
------------
</TABLE>
---------------------------------------------------------
(1) Variable rate
14
<PAGE> 15
MUNICASH PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
NEW YORK -- 8.51%
City of New York GO RAN Series
1997 DN (Bank of New York LOC)
(SP-1+, MIG-1)
4.15%(1)............ 12/01/97 $43,800 $ 43,800,000
New York City GO Series A DN
(Sumitomo Bank LOC) (A-1+,
VMIG-1)
4.50%(1)............ 12/01/97 2,800 2,800,000
------------
46,600,000
------------
NORTH CAROLINA -- 6.83%
Charlotte-Mecklenburg Hospital
Authority Health Care System
RB Series C DN (Nations Bank
LOC)(A-1+, VMIG-1)
4.00%(1)............ 12/07/97 25,000 25,000,000
North Carolina Medical Care
Community Hospital (Moses H.
Cone Memorial Hospital) Series
1993 DN (Wachovia Bank LOC)
(A-1+)
3.90%(1)............ 12/07/97 2,500 2,500,000
North Carolina Medical Care
Community Hospital RB (North
Carolina Baptist Hospitals
Project) Series 1992B DN
(A-1+, VMIG-1)
3.95%(1)............ 12/07/97 7,300 7,300,000
North Carolina Medical Care
Community Hospital RB (Pooled
Equipment Financing Project)
Series 1985 DN (MBIA
Insurance) (A-1+)
3.90%(1)............ 12/07/97 2,600 2,600,000
------------
37,400,000
------------
OHIO -- 7.25%
City of Berea BAN
4.05%............... 07/02/98 1,125 1,126,448
City of Mansfield School
District TAN
4.25%............... 06/26/98 4,700 4,706,386
City of Westlake IDRB (The Oaks
Project) Series 1994 DN
(National City Bank LOC)
4.05%(1)............ 12/07/97 1,915 1,915,000
Clermont County Health
Facilities Authority RB (Mercy
Health System Project) Series
1993A DN (Credit Suisse LOC)
(VMIG-1)
3.85%(1)............ 12/07/97 7,600 7,600,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
OHIO (CONTINUED)
Clermont County Health
Facilities Authority RB (Mercy
Health System Project) Series
1994B DN (A-1, VMIG-1)
3.85%(1)............ 12/07/97 $ 4,664 $ 4,664,000
Greene County BAN GO Bonds
4.00%............... 03/26/98 3,747 3,749,251
4.10%............... 03/26/98 2,000 2,002,005
Lucas County Health Facilities
Authority RB (Lutheran Homes
Society Project) DN (Bank One
Columbus LOC) (A-1+)
3.80%(1)............ 12/07/97 3,000 3,000,000
Montgomery County Economic
Development Authority RB
(Dayton Art Institute Project)
DN (National City Bank of
Cleveland LOC) (A-1)
3.90%(1)............ 12/07/97 2,000 2,000,000
Ohio Air Quality Development
Authority PCRB (JMG Funding
Company) Series 1995 AMT
(Societe Generale LOC) (A-1)
3.95%(1)............ 12/07/97 1,100 1,100,000
Ohio Air Quality Development
Authority PCRB (Timken Company
Project) Series 1992 DN
(Credit Suisse LOC) (A-1+,
P-1)
3.90%(1)............ 12/07/97 2,200 2,200,000
Ohio Environmental Improvement
RB (United States Steel
Corporation Project) Series
1986 DN (Sanwa Bank LOC) (P-1)
4.20%(1)............ 12/07/97 1,000 1,000,000
Ohio State University General
Receipt Bonds Series 1992B DN
(A-1+, VMIG-1)
3.90%(1)............ 12/07/97 150 150,000
Sandusky County IDRB (Brighton
Manor Company Project) Series
1986 AMT (Bank One Columbus
LOC) (VMIG-1)
4.05%(1)............ 12/07/97 1,500 1,500,000
Toledo Special Assessment GO
Notes RB DN (Canadian Imperial
Bank LOC) (VMIG-1)
3.90%(1)............ 12/07/97 3,000 3,000,000
------------
39,713,090
------------
</TABLE>
---------------------------------------------------------
(1) Variable rate
15
<PAGE> 16
MUNICASH PORTFOLIO
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
OKLAHOMA -- 1.19%
Oklahoma State Loan Program
Revenue Bonds (Swiss Bank LOC)
(A-1+)
3.75%............... 03/02/98 $ 6,500 $ 6,500,000
------------
OREGON -- 0.64%
Oregon State Housing Authority
Community Services Department
Mortgage Revenue Bonds (Single
Family Mortgage Program)
Series C AMT (Escrowed in U.S.
Treasuries) (VMIG-1)
4.05%............... 05/15/98 2,500 2,500,000
Portland Multifamily Housing RB
(Village of Lovejoy Fountain)
AMT (Key Corporation Bank N.A.
LOC) (A-1)
4.05%(1)............ 12/07/97 1,000 1,000,000
------------
3,500,000
------------
RHODE ISLAND -- 0.89%
Rhode Island Housing & Mortgage
Authority Finance Corporation
Home Ownership Opportunity
Bonds Series 22-A AMT (FGIC
Insurance) (A-1+, VMIG-1)
3.70%............... 12/02/97 4,900 4,900,000
------------
SOUTH CAROLINA -- 1.37%
Chesterfield County IDRB (Culp
Incorporated Project) AMT
(Wachovia Bank LOC)
4.05%(1)............ 12/07/97 6,000 6,000,000
Marlboro County Solid Waste
Disposal Facilities RB
(Willamette Industries
Incorporated Project) AMT
(A-1)
4.00%(1)............ 12/07/97 1,500 1,500,000
------------
7,500,000
------------
TENNESSEE -- 4.73%
Chattanooga IDRB (Southern
Foundry Supply Company
Project) AMT (Sun Trust LOC)
4.05%(1)............ 12/07/97 2,700 2,700,000
City of Henderson IDRB (Premier
Manufacturing Corporation
Project) AMT (National City
Bank LOC)
4.15%(1)............ 12/07/97 5,200 5,200,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
TENNESSEE (CONTINUED)
Jackson City IDRB (Quadion
Corporation Project) AMT
(First Bank Systems, N.A. LOC)
(A-1)
4.10%(1)............ 12/07/97 $ 4,100 $ 4,100,000
Knox County IDRB (Travis Meats,
Incorporated Project) AMT
(SunTrust LOC)
4.10%(1)............ 12/07/97 1,400 1,400,000
Montgomery County Public
Building Authority Pooled
Financing RB (Tennessee County
Loan Pool) DN (NationsBank
LOC) (VMIG-1)
4.05%(1)............ 12/07/97 10,000 10,000,000
Tennessee Housing Development
Authority (Homeownership
Program) Series 3 AMT
(Escrowed in U.S. Treasuries)
(A-1+, VMIG-1)
3.75%............... 02/19/98 2,500 2,500,000
------------
25,900,000
------------
TEXAS -- 5.38%
Angelina & Neches River
Authority Solid Waste Disposal
Revenue Bonds (Temple-Eastex
Incorporated Project) AMT
(P-1)
4.00%............... 12/12/97 8,650 8,650,000
4.00%............... 01/23/98 7,450 7,450,000
Brownsville County IDRB (Rich-
Seapak Corporation Project)
AMT (SunTrust LOC)
4.05%(1)............ 12/07/97 2,500 2,500,000
City of Haltom IDRB (Molded
Products Company Project)
Series 1995 AMT (ABN-AMRO Bank
N.V. LOC) (A-1+)
4.15%(1)............ 12/07/97 3,450 3,450,000
Mesquite County IDRB (Morrison
Products Incorporated Project)
Series 1994 AMT (Key
Corporation Bank N.A. LOC)
(VMIG-1)
4.01%(1)............ 12/07/97 1,500 1,500,000
Montgomery County IDRB (Sawyer
Research Products
Incorporated) AMT (Key
Corporation Bank N.A. LOC)
4.17%(1)............ 12/07/97 1,915 1,915,000
</TABLE>
---------------------------------------------------------
(1) Variable rate
16
<PAGE> 17
MUNICASH PORTFOLIO
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ----------------------- -------- ------- -----------
<S> <C> <C> <C>
TEXAS (CONTINUED)
Sulphur Springs IDRB (CMH
Manufacturing Incorporated
Project) AMT (Wachovia Bank LOC)
4.05%(1)............ 12/07/97 $ 4,030 $ 4,030,000
------------
29,495,000
------------
VIRGINIA -- 2.28%
Charles County IDRB (Chambers
Development of Virginia
Incorporated) Series 1989 AMT
(NationsBank LOC) (VMIG-1)
4.15%(1)............ 12/01/97 1,000 1,000,000
City of Roanoke IDA Hospital RB
(Carillion Health System's
Group) Series 1995C DN (Morgan
Guaranty LOC) (A-1)
3.85%(1)............ 12/07/97 9,995 9,995,000
Washington D.C. Metropolitan
Airport Authority (Passenger
Facility Program) MB AMT
(NationsBank LOC) (A-1)
4.10%............... 01/16/98 1,500 1,500,000
------------
12,495,000
------------
WASHINGTON -- 0.42%
Pilchuck Public Development
Corporation RB (Holden-
McDaniels Partners, Project)
AMT (Key Corporation Bank N.A.
LOC)
4.17%(1)............ 12/07/97 2,300 2,300,000
------------
WEST VIRGINIA -- 0.52%
West Virginia Economic
Development Authority IDRB
(North American Processing
Company Project) AMT (National
City Bank of Cleveland LOC)
4.15%(1)............ 12/07/97 2,860 2,860,000
------------
WISCONSIN -- 1.42%
City of Janesville IDRB (Freedom
Plastics Incorporated Project)
AMT (ABN-AMRO Bank N.V. LOC)
(A-1+)
4.15%(1)............ 12/07/97 2,800 2,800,000
City of Mequon IDRB (Johnson
Level Company Project) AMT
(Bank One Columbus LOC)
4.05%(1)............ 12/07/97 2,500 2,500,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ------------------------ --------- ------- ------------
<S> <C> <C> <C>
WISCONSIN (CONTINUED)
Stevens Point RB (Consolidated
Paper Company Project) AMT
(Wachovia Bank LOC)
4.05%(1)............ 12/07/97 $ 2,500 $ 2,500,000
------------
7,800,000
------------
WYOMING -- 0.79%
Sweetwater County PCRB (Pacific
Corporation) DN
3.85%(1)............ 12/01/97 4,300 4,300,000
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $561,681,793*)............ 102.54% 561,681,793
LIABILITIES IN EXCESS OF OTHER
ASSETS.......................... (2.54) (13,911,757)
------- ------------
NET ASSETS (Equivalent to $1.00
per share based on 397,801,555
MuniCash Shares and 150,117,062
MuniCash Dollar Shares
outstanding).................... 100.00% $547,770,036
======= ============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE
PER SHARE
($547,770,036 / 547,918,617)............. $1.00
=====
- ---------------
* Aggregate cost for federal income tax purposes is
substantially the same. Market value of securities
subject to federal alternative minimum tax is 50.61% of
the total market value.
(1) Variable rate.
- ---------------------------------------------------------
</TABLE>
MUNICASH PORTFOLIO
SUPPLEMENTARY INFORMATION
Maturity Schedule
November 30, 1997
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
-------------- ------------ ----------
<S> <C> <C> <C> <C>
1- 30 Days $468,494,000 83.4%
31- 60 Days 18,950,000 3.4
61- 90 Days 10,010,000 1.8
91-120 Days 20,147,000 3.6
Over 150 Days 44,032,000 7.8
Average Weighted Maturity -- 31 Days
- ---------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
17
<PAGE> 18
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
IMPORTANT TAX INFORMATION
During the fiscal year ended November 30, 1997, 100% of the dividends paid
from net investment income of the MuniFund and MuniCash Portfolios were
exempt-interest dividends for purposes of federal income tax and free from such
tax.
However, 67.35% of the dividends from net investment income of the MuniCash
Portfolio must be taken into consideration in determining liability for federal
alternative minimum tax.
In January 1998, you will be furnished with a schedule showing the
percentage breakdown by state or U.S. possession of the source of interest
income of each portfolio in 1997.
------------------------------------------------------
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
AMT Alternative Minimum Tax
BAN Bond Anticipation Note
DN Demand Note
GO General Obligation
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
LOC Letter of Credit
MB Municipal Bond
PCRB Pollution Control Revenue Bond
RAN Revenue Anticipation Note
RB Revenue Bond
TAN Tax Anticipation Notes
TECP Tax-Exempt Commercial Paper
TRAN Tax and Revenue Anticipation Note
</TABLE>
The Moody's Investors Service, Inc. and Standard & Poor's Ratings Service
ratings of the investments in the various Portfolios are believed to be the most
recent ratings available at November 30, 1997. The ratings have not been audited
by the Independent Auditors and, therefore are not covered by the Independent
Auditors' Report.
18
<PAGE> 19
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
Statements of Operations
Year Ended November 30, 1997
<TABLE>
<CAPTION>
MUNIFUND MUNICASH
PORTFOLIO PORTFOLIO
----------- -----------
<S> <C> <C>
Investment income:
Interest income................................................................................. $25,337,633 $17,260,748
----------- -----------
Expenses:
Investment advisory fee......................................................................... 1,214,356 803,781
Administration fee.............................................................................. 1,214,356 803,781
Trustees' fees and officer's salary............................................................. 83,733 45,107
Transfer agent fee.............................................................................. 71,200 37,841
Custodian fee................................................................................... 143,137 105,185
Shareholder computer access program............................................................. 7,244 6,400
Legal and audit................................................................................. 57,532 43,451
Registration expenses........................................................................... 27,312 21,905
Printing........................................................................................ 14,592 12,220
Other........................................................................................... 34,006 16,751
----------- -----------
2,867,468 1,896,422
Less fees waived................................................................................ (994,573) (1,069,895)
----------- -----------
1,872,895 826,527
Service Organization fees -- Dollar Shares...................................................... 150,996 285,897
----------- -----------
Total expenses............................................................................. 2,023,891 1,112,424
----------- -----------
Net investment income........................................................................... 23,313,742 16,148,324
Realized gain (loss) on investments:
Net realized gain (loss) from security transactions............................................. (12,899) 18,102
----------- -----------
Net increase in net assets resulting from operations............................................ $23,300,843 $16,166,426
=========== ===========
</TABLE>
See accompanying notes to financial statements.
19
<PAGE> 20
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
MUNIFUND PORTFOLIO MUNICASH PORTFOLIO
---------------------------------- ----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income........................ $ 23,313,742 $ 24,029,392 $ 16,148,324 $ 14,292,759
Net gain (loss) on investments............... (12,899) 57,554 18,102 4,477
--------------- --------------- --------------- ---------------
Net increase in net assets resulting from
operations............................... 23,300,843 24,086,946 16,166,426 14,297,236
--------------- --------------- --------------- ---------------
Dividends to shareholders from net investment
income:
MuniFund Shares.............................. (21,420,775) (22,454,678) -- --
MuniFund Dollar Shares....................... (1,892,967) (1,574,714) -- --
MuniCash Shares.............................. -- -- (12,338,904) (11,053,941)
MuniCash Dollar Shares....................... -- -- (3,809,420) (3,238,818)
--------------- --------------- --------------- ---------------
Total dividends to shareholders............ (23,313,742) (24,029,392) (16,148,324) (14,292,759)
--------------- --------------- --------------- ---------------
Capital share transactions (at $1 per share):
Proceeds from sale of shares................. 6,510,103,572 5,212,511,683 6,354,866,941 5,121,589,834
Value of shares issued in reinvestment of
dividends.................................. 4,991,057 4,177,069 7,730,075 6,746,509
Cost of shares repurchased................... (6,502,501,131) (5,351,938,462) (6,197,916,583) (5,168,334,969)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets derived
from capital share transactions.......... 12,593,498 (135,249,710) 164,680,433 (39,998,626)
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets.... 12,580,599 (135,192,156) 164,698,535 (39,994,149)
Net assets:
Beginning of period.............................. 591,600,015 726,792,171 383,071,501 423,065,650
--------------- --------------- --------------- ---------------
End of period.................................... $ 604,180,614 $ 591,600,015 $ 547,770,036 $ 383,071,501
=============== =============== =============== ===============
</TABLE>
See accompanying notes to financial statements.
20
<PAGE> 21
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
MUNIFUND SHARES
--------------------------------------------------------
YEAR ENDED NOVEMBER 30,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income....... .0338 .0326 .0360 .0255 .0224
------- ------- ------- ------- -------
Less Distributions:
Dividends to Shareholders
from Net Investment
Income.................... (.0338) (.0326) (.0360) (.0255) (.0224)
------- ------- ------- ------- -------
Net Asset Value, End of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return.................. 3.43% 3.31% 3.66% 2.58% 2.27%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)...................... 536,794 530,204 720,318 687,895 1,019,749
Ratio of Expenses to Average
Daily Net Assets(1)......... .27% .27% .27% .26% .25%
Ratio of Net Investment Income
to Average Daily Net
Assets...................... 3.38% 3.26% 3.59% 2.53% 2.24%
<CAPTION>
MUNIFUND DOLLAR SHARES
-----------------------------------------------
YEAR ENDED NOVEMBER 30,
-----------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income....... .0313 .0301 .0335 .0230 .0199
------- ------- ------- ------- -------
Less Distributions:
Dividends to Shareholders
from Net Investment
Income.................... (.0313) (.0301) (.0335) (.0230) (.0199)
------- ------- ------- ------- -------
Net Asset Value, End of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return.................. 3.18% 3.06% 3.41% 2.33% 2.02%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)...................... 67,387 61,396 6,474 2,785 6,783
Ratio of Expenses to Average
Daily Net Assets(1)......... .52% .52% .52% .51% .50%
Ratio of Net Investment Income
to Average Daily Net
Assets...................... 3.13% 3.01% 3.34% 2.28% 1.99%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets would have been 0.41%, 0.42%, 0.41%,
0.41% and 0.41%, respectively, for the years ended November 30, 1997, 1996,
1995, 1994 and 1993 for MuniFund Shares and 0.66%, 0.67%, 0.66%, 0.66% and
0.66%, respectively, for the years ended November 30, 1997, 1996, 1995, 1994
and 1993 for MuniFund Dollar Shares.
See accompanying notes to financial statements.
21
<PAGE> 22
MUNICIPAL FUND FOR TEMPORARY INVESTMENT
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
MUNICASH SHARES
--------------------------------------------------------
YEAR ENDED NOVEMBER 30,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income....... .0358 .0350 .0382 .0266 .0235
-------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders
from Net Investment
Income.................... (.0358) (.0350) (.0382) (.0266) (.0235)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.................. 3.63% 3.56% 3.89% 2.69% 2.38%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)...................... 397,681 281,544 321,642 273,439 572,482
Ratio of Expenses to Average
Daily Net Assets(1)......... .18% .18% .18% .19% .20%
Ratio of Net Investment Income
to Average Daily Net
Assets...................... 3.58% 3.50% 3.83% 2.59% 2.36%
<CAPTION>
MUNICASH DOLLAR SHARES
-----------------------------------------------
YEAR ENDED NOVEMBER 30,
-----------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------- -------
Income From Investment
Operations:
Net Investment Income....... .0333 .0325 .0357 .0241 .0210
-------- -------- -------- ------- -------
Less Distributions:
Dividends to Shareholders
from Net Investment
Income.................... (.0333) (.0325) (.0357) (.0241) (.0210)
-------- -------- -------- ------- -------
Net Asset Value, End of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======= =======
Total Return.................. 3.38% 3.31% 3.64% 2.44% 2.13%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)...................... 150,089 101,528 101,424 99,688 95,225
Ratio of Expenses to Average
Daily Net Assets(1)......... .43% .43% .43% .44% .45%
Ratio of Net Investment Income
to Average Daily Net
Assets...................... 3.33% 3.25% 3.58% 2.34% 2.11%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets would have been 0.41%, 0.42%, 0.41%,
0.42% and 0.42%, respectively, for the years ended November 30, 1997, 1996,
1995, 1994 and 1993 for MuniCash Shares and 0.66%, 0.67%, 0.66%, 0.67% and
0.67%, respectively, for the years ended November 30, 1997, 1996, 1995, 1994
and 1993 for MuniCash Dollar Shares.
See accompanying notes to financial statements.
22
<PAGE> 23
Notes to Financial Statements
A. Municipal Fund for Temporary Investment (the "Company"), a Pennsylvania
common law trust, is registered under the Investment Company Act of 1940, as
amended, as a diversified open-end management investment company. The Company
consists of two separate portfolios: MuniFund and MuniCash. The Intermediate
Municipal Fund Portfolio was liquidated on April 21, 1997.
Each portfolio has two classes of shares, one class being referred to as
Dollar Shares. Dollar Shares and the other class of shares of each portfolio are
identical in all respects, except that Dollar Shares are sold to institutions
(Service Organizations) which provide support services to their customers who
beneficially own such shares, in consideration of the Company's payment of 0.25%
(on an annualized basis) of the average daily net asset value of the Dollar
Shares held for the benefit of their customers. The Service Organization fee is
charged to the earnings of the respective Dollar Shares. Expenses, other than
the Service Organization fee, are allocated between the two classes based on
their relative assets.
B. Significant accounting policies are as follows:
Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statement and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from these estimates. The following is a summary of significant accounting
policies consistently followed by the Company in the preparation of its
financial statements.
Security Valuation -- Portfolio securities are valued under the amortized
cost method, which approximates current market value. Under this method,
securities are valued at cost when purchased and thereafter a constant
proportionate amortization of any discount or premium is recorded until maturity
of the security. Regular review and monitoring of the valuation is performed in
an attempt to avoid dilution or other unfair results to shareholders. The
Company seeks to maintain the net asset value per share of each portfolio at
$1.00.
Dividends to Shareholders -- Dividends from net income are declared daily
and paid monthly. Dividends payable are recorded on the dividend record date.
Net income for dividend purposes includes interest accrued less amortization of
market premium and accrued expenses. Net realized capital gains, if any, are
distributed at least annually.
Federal Taxes -- No provision is made for federal taxes as it is the
Company's intention to have each portfolio continue to qualify as a regulated
investment company and to make the requisite distributions to its shareholders
which will be sufficient to relieve it from all or substantially all federal
income and excise taxes.
Other -- Investment transactions are accounted for on the trade date, and
the cost of investments sold is determined by use of the specific identification
method for both financial reporting and income tax purposes. Expenses not
directly attributable to a specific portfolio of the Company are allocated among
the Company's portfolios based on their relative average net assets.
C. Under agreements among the Company, PNC Bank, National Association ("PNC
Bank") and PNC Institutional Management Corporation ("PIMC"), an indirect
wholly-owned subsidiary of PNC Bank, PIMC manages the Company's portfolios and
maintains their financial accounts. PNC Bank is the Company's sub-adviser and
custodian, and PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC
Bank Corp., is the Company's transfer agent.
Provident Distributors, Inc. ("PDI") serves as the Company's Distributor.
No compensation
23
<PAGE> 24
Notes to Financial Statements (Continued)
is payable by the Company to PDI for its distribution services.
The Company has entered into an Administration Agreement with PFPC and PDI
(the "Administrators") for certain administrative services.
In return for their advisory and administrative services, the Company pays
PIMC and the Administrators each a fee, computed daily and payable monthly,
based upon an annual percentage of the average daily net assets of the Company's
portfolios, considered separately, as follows: .175% of the first $1 billion,
.15% of the next $1 billion, .125% of the next $1 billion, .10% of the next $1
billion, .095% of the next $1 billion, .09% of the next $1 billion, .085% of the
next $1 billion and .08% of net assets in excess of $7 billion.
If expenses borne by any portfolio in any fiscal year exceed the applicable
expense limitation imposed by state securities regulations, the Administrators
and PIMC will each reimburse the portfolio for one-half of any excess expense up
to the amount of fees payable to it (except where such regulations require
reimbursement regardless of the fees payable to it).
The Administrators and PIMC have also agreed to reduce their fees, on an
equal basis, to the extent necessary to ensure that the ordinary operating
expenses (excluding Service Organization fees) of the MuniFund Portfolio do not
exceed .27% of its average net assets, and with respect to MuniCash, .18% of its
average net assets.
For the year ended November 30, 1997 the Administrators and PIMC
voluntarily waived $994,573 of the advisory and administration fees payable to
them with respect to MuniFund and $1,069,895 with respect to MuniCash.
Service Organization fees of $11,733 were paid to affiliates of PNC Bank
for the year ended November 30, 1997.
D. The Company's Declaration of Trust permits the trustees to authorize the
issuance of an unlimited number of full and fractional units of beneficial
interest ("shares") in the Company and to classify or reclassify any unissued
shares into one or more additional series of shares.
24
<PAGE> 25
Notes to Financial Statements (Concluded)
Transactions in shares of the Company are summarized as follows:
<TABLE>
<CAPTION>
MUNIFUND PORTFOLIO
--------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
-------------------- --------------------
<S> <C> <C>
Shares sold:
MuniFund........................................ 6,227,675,068 4,919,582,550
MuniFund Dollar................................. 282,428,504 292,929,133
Shares issued in reinvestment of dividends:
MuniFund........................................ 3,196,915 2,752,159
MuniFund Dollar................................. 1,794,142 1,424,910
Shares repurchased:
MuniFund........................................ (6,224,270,348) (5,112,510,337)
MuniFund Dollar................................. (278,230,783) (239,428,125)
-------------------- --------------------
Net increase (decrease) in shares.......... 12,593,498 (135,249,710)
==================== ====================
</TABLE>
<TABLE>
<CAPTION>
MUNICASH PORTFOLIO
--------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
-------------------- --------------------
<S> <C> <C>
Shares sold:
MuniCash........................................ 6,053,929,400 4,867,516,600
MuniCash Dollar................................. 300,937,541 254,073,234
Shares issued in reinvestment of dividends:
MuniCash........................................ 5,097,511 4,710,660
MuniCash Dollar................................. 2,632,564 2,035,849
Shares repurchased:
MuniCash........................................ (5,942,903,293) (4,912,328,000)
MuniCash Dollar................................. (255,013,290) (256,006,969)
-------------------- --------------------
Net increase (decrease) in shares.......... 164,680,433 (39,998,626)
==================== ====================
</TABLE>
On November 30, 1997, two shareholders held approximately 39% of the outstanding
shares of MuniFund and three shareholders held approximately 35% of the
outstanding shares of MuniCash.
E. At November 30, 1997, capital loss carryovers, expiring at various times from
1998 to 2005, were available to offset possible future capital gains of the
respective portfolios, as follows: MuniFund, $82,985 and MuniCash, $148,581.
F. At November 30, 1997, net assets consisted of the following:
<TABLE>
<CAPTION>
MUNIFUND MUNICASH
------------ ------------
<S> <C> <C>
Paid-in capital..................................................... $604,263,599 $547,918,617
Accumulated net realized loss on investments........................ (82,985) (148,581)
------------ ------------
Total Net Assets.................................................... $604,180,614 $547,770,036
============ ============
</TABLE>
25
<PAGE> 26
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Trustees
Municipal Fund for Temporary Investment:
We have audited the statements of net assets of Municipal Fund for
Temporary Investment (comprising, respectively, the MuniFund and MuniCash
Portfolios) as of November 30, 1997, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended, and the financial highlights for each
of the years in the five-year period then ended. These financial statements and
financial highlights are the responsibility of the Company'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 inspection of and confirmation by
correspondence with the custodians of securities owned as of November 30, 1997.
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
each of the respective portfolios constituting Municipal Fund for Temporary
Investment as of November 30, 1997, the results of their operations for the year
then ended, the changes in their net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Philadelphia, PA
January 9, 1998
26
<PAGE> 27
Trustees
G. Willing Pepper
Chairman
G. Nicholas Beckwith III
Philip E. Coldwell
Robert R. Fortune
Jerrold B. Harris
Rodney D. Johnson
Officers
G. Willing Pepper
President
Edward J. Roach
Vice President and
Treasurer
W. Bruce McConnel, III
Secretary
Investment Adviser
PNC Institutional Management
Corporation
400 Bellevue Parkway
Wilmington, DE 19809
Co-Administrators
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Provident Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
Distributor
Provident Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
Transfer Agent
PFPC Inc.
P.O. Box 8950
Wilmington, DE 19885-9628
This report is submitted for
the general information of the
shareholders of the Company.
It is not authorized for
distribution to prospective
investors unless accompanied
or preceded by effective
prospectuses for each
portfolio of the Company,
which contain information
concerning the investment
policies of the portfolios as
well as other pertinent
information.
PIF-A-009
MUNIFUND
MUNICASH
Investment Portfolios
Offered by
Municipal Fund for
Temporary Investment
[PROVIDENT INSTITUTIONAL
FUND LOGO]
Annual Report to Shareholders
November 30, 1997
