EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
PROSPECTUS
"A PASSPORT TO CASH MANAGEMENT"
The shares of Edward D. Jones & Co. Daily Passport Cash Trust (the "Trust")
offered by this prospectus represent interests in a no-load, open-end,
diversified management investment company (a mutual fund) investing in money
market instruments to achieve stability of principal and current income
consistent with stability of principal.
AN INVESTMENT IN THE TRUST IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE TRUST ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE; THERE CAN BE NO ASSURANCE THAT THE TRUST WILL BE ABLE TO DO SO.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY.
This prospectus contains the information you should read and know before you
invest in the Trust. Keep this prospectus for future reference.
The Trust has also filed a Statement of Additional Information dated April 30,
1995, with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of Additional Information
free of charge by calling 1-800-441-2357. To obtain other information or to
make inquiries about the Trust, contact the Trust at the address listed in the
back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Prospectus dated April 30, 1995
TABLE OF CONTENTS
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SUMMARY OF TRUST EXPENSES 1
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FINANCIAL HIGHLIGHTS 2
- -------------------------------------
GENERAL INFORMATION 3
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LIBERTY INVESTMENT PROGRAM 3
- -------------------------------------
INVESTMENT INFORMATION 4
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Investment Objective 4
Investment Policies 4
Investment Risks 7
Investment Limitations 7
Regulatory Compliance 7
NET ASSET VALUE 7
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INVESTING IN THE TRUST 8
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Share Purchases 8
Full Service Account 8
Minimum Investment Required 8
What Shares Cost 8
Receipt of Orders 9
Certificates and Confirmations 9
Dividends 9
Capital Gains 9
Retirement Plans 9
EXCHANGE PRIVILEGE 9
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Requirements for Exchange 9
Tax Consequences 10
Making an Exchange 10
REDEEMING SHARES 10
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Redeeming by Check 11
VISA Account 11
Written Requests 11
Accounts with Low Balances 12
TRUST INFORMATION 12
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Management of the Trust 12
Distribution of Trust Shares 13
Administration of the Trust 13
SHAREHOLDER INFORMATION 14
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Voting Rights 14
Massachusetts Partnership Law 14
TAX INFORMATION 15
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Federal Income Tax 15
State and Local Taxes 15
PERFORMANCE INFORMATION 15
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FINANCIAL STATEMENTS 16
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REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS 24
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ADDRESSES 25
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SUMMARY OF TRUST EXPENSES
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<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)...................................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)...................................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable).................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)........ None
Exchange Fee.............................................................. None
ANNUAL TRUST OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee............................................................ 0.46%
12b-1 Fee................................................................. None
Total Other Expenses...................................................... 0.52%
Shareholder Services Fee.......................................... 0.25%
Total Trust Operating Expenses........................................ 0.98%
</TABLE>
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Trust will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment assuming (1) 5% annual return
and (2) redemption at the end of each time
period......................................... $10 $31 $54 $119
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
FINANCIAL HIGHLIGHTS
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(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 24.
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- ---------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------
INCOME FROM
INVESTMENT
OPERATIONS
- ----------------
Net investment
income 0.04 0.02 0.03 0.05 0.07 0.08 0.07 0.06 0.06 0.07
- ----------------
LESS
DISTRIBUTIONS
- ----------------
Distributions
from net
investment
income (0.04) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06) (0.06) (0.07)
- ---------------- ------ ----- ----- ----- ------ ------ ------ ------ ------ ------
NET ASSET VALUE,
END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------- ------ ----- ----- ----- ------ ------ ------ ------ ------ ------
TOTAL RETURN(A) 3.78% 2.33% 2.82% 4.98% 7.39% 8.63% 7.24% 6.15% 5.79% 7.43%
- ----------------
RATIOS TO
AVERAGE NET
ASSETS
- ----------------
Expenses 0.98% 0.95% 0.95% 0.87% 0.83% 0.88% 1.01% 1.03% 1.03% 1.03%
- ----------------
Net investment
income 3.74% 2.31% 2.79% 4.89% 7.13% 8.23% 7.14% 6.00% 5.63% 7.17%
- ----------------
SUPPLEMENTAL
DATA
- ----------------
<CAPTION>
Net assets,
end of period
(000 omitted)
- ---------------- $2,464,260 $2,171,225 $2,223,226 $2,469,295 $2,631,671 $2,235,991 $1,279,762 $744,107 $656,730 $645,553
</TABLE>
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
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The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated January 9, 1980. The Trust is designed for individual, joint,
custodial, trust, fiduciary, corporate, partnership, association, or
proprietorship accounts as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio limited to money market
instruments maturing in one year or less. A minimum initial investment of
$1,000 is required.
The Trust attempts to stabilize the value of a share at $1.00. Trust shares are
currently sold and redeemed at that price.
LIBERTY INVESTMENT PROGRAM
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This Trust is one of a group of mutual funds, collectively known as the Liberty
Investment Program. The other funds in the Liberty Investment Program are:
. American Leaders Fund, Inc.--providing growth of capital and income
through high-quality stocks;
. Capital Growth Fund--providing appreciation of capital primarily through
equity securities;
. Fund for U.S. Government Securities, Inc.--providing current income
through long-term U.S. government securities;
. International Equity Fund--providing long-term capital growth and income
through international securities;
. International Income Fund--providing a high level of current income
consistent with prudent investment risk through high-quality debt
securities denominated primarily in foreign currencies;
. Liberty Equity Income Fund, Inc.--providing above-average income and
capital appreciation through income-producing equity securities;
. Liberty High Income Bond Fund, Inc.--providing high current income
through high-yielding, lower-rated, corporate bonds;
. Liberty Municipal Securities Fund, Inc.--providing a high level of
current income exempt from federal income tax through municipal bonds;
. Liberty Utility Fund, Inc.--providing current income and long-term growth
of income, primarily through electric, gas and communication utilities;
. Limited Term Fund--providing a high level of current income consistent
with minimum fluctuation in principal through investment grade securities;
. Limited Term Municipal Fund--providing a high level of current income
exempt from federal regular income tax consistent with the preservation of
principal, primarily limited to municipal securities;
. Michigan Intermediate Municipal Trust--providing current income exempt
from federal regular income tax and the personal income taxes imposed by
the state of Michigan and Michigan municipalities, primarily through
Michigan municipal securities;
. Pennsylvania Municipal Income Fund--providing current income exempt from
federal regular income tax and the personal income taxes imposed by the
Commonwealth of Pennsylvania, primarily through Pennsylvania municipal
securities;
. Strategic Income Fund--providing high current income through investing in
domestic corporate debt obligations, U.S. government securities, and
foreign government and corporate debt obligations;
. Tax-Free Instruments Trust--providing current income consistent with
stability of principal and exempt from federal income tax, through high-
quality, short-term municipal securities; and
. World Utility Fund--providing total return by investing primarily in
securities issued by domestic and foreign companies in the utilities
industry.
Each of the funds may also invest in certain other types of securities as
described in each fund's prospectus.
The Liberty Investment Program provides flexibility and diversification for an
investor's long-term investment planning. It enables an investor to meet the
challenges of changing market conditions by offering convenient exchange
privileges which give access to various investment vehicles and by providing
the investment services of a proven, professional investment adviser.
INVESTMENT INFORMATION
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INVESTMENT OBJECTIVE
The investment objective of the Trust is stability of principal and current
income consistent with stability of principal. The Trust pursues this
investment objective by investing in a portfolio of money market instruments
maturing in one year or less. The average maturity of money market instruments
in the Trust's portfolio, computed on a dollar-weighted basis, will be 120
days or less, but the Trust intends to compute on a dollar-weighted basis of
90 days. While there is no assurance that the Trust will achieve its
investment objective, it endeavors to do so by following the investment
policies described in this prospectus. The investment objective and the
policies and limitations described below cannot be changed without approval of
shareholders.
INVESTMENT POLICIES
ACCEPTABLE INVESTMENTS. The Trust invests in high quality money market
instruments that are either rated in the highest short-term rating category by
one or more nationally recognized statistical rating organizations ("NRSROs")
or of comparable quality to securities having such ratings. Examples of these
instruments include, but are not limited to:
. domestic issues of corporate debt obligations, including variable rate
demand notes;
. commercial paper (including Canadian Commercial Paper and Europaper);
. certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");
. short-term credit facilities, such as demand notes;
. asset-backed securities;
. obligations issued or guaranteed as to payment of principal and interest
by the U.S. government or one of its agencies or instrumentalities
("Government Securities"); and
. other money market instruments.
The Trust invests only in instruments denominated and payable in U.S. dollars.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term
corporate debt instruments that have variable or floating interest rates
and provide the Trust with the right totender the security for repurchase
at its stated principal amount plus accrued interest. Suchsecurities
typically bear interest at a rate that is intended to cause the securities
to trade at par. The interest rate may float or be adjusted at regular
intervals (ranging from daily to annually), and is normally based on a
published interest rate or interest rate index. Most variable rate demand
notes allow the Trust to demand the repurchase of the security on not more
than seven days prior notice. Other notes only permit the Trust to tender
the security at the time of each interest rate adjustment or at other fixed
intervals. See "Demand Features." The Trust treats variable rate demand
notes as maturing on the later of the date of the next interest adjustment
or the date on which the Trust may next tender the security for repurchase.
BANK INSTRUMENTS. The Trust only invests in Bank Instruments either issued
by an institution having capital, surplus and undivided profits over $100
million or insured by the Bank Insurance Fund ("BIF") or the Savings
Association Insurance Fund ("SAIF"). Bank Instruments may include
Eurodollar Certificates of Deposit ("ECDs"), Yankee Certificates of Deposit
("Yankee CDs") and Eurodollar Time Deposits ("ETDs"). The Trust will treat
securities credit enhanced with a bank's letter of credit as Bank
Instruments.
SHORT-TERM CREDIT FACILITIES. Demand notes are short-term borrowing
arrangements between a corporation and an institutional lender (such as the
Trust) payable upon demand by either party. The notice period for demand
typically ranges from one to seven days, and the party may demand full or
partial payment. The Trust may also enter into, or acquire participations
in, short-term revolving credit facilities with corporate borrowers. Demand
notes and other short-term credit arrangements usually provide for floating
or variable rates of interest.
ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial
interest in a special purpose trust, limited partnership interests or
commercial paper or other debt securities issued by a special purpose
corporation. Although the securities often have some form of credit or
liquidity enhancement, payments on the securities depend predominately upon
collections of the loans and receivables held by the issuer.
RATINGS. An NRSRO's highest rating category is determined without regard for
sub-categories and gradations. For example, securities rated A-1 or A-1+ by
Standard & Poor's Ratings Group ("S&P"), Prime-1 by Moody's Investors Service,
Inc. ("Moody's"), or F-1 (+ or -) by Fitch Investors Service, Inc. ("Fitch")
are all considered rated in the highest short-term rating category. The Trust
will follow applicable regulations in determining whether a security rated by
more than one NRSRO can be treated as being in the highest short-term rating
category; currently, such securities must be rated by two NRSROs in their
highest rating category. See "Regulatory Compliance."
REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government securities or certificates of deposit to the Trust and agree at the
time of sale to repurchase them at a mutually agreed upon time and price. To
the extent that the original seller does not repurchase the securities from
the Trust, the Trust could receive less than the repurchase price on any sale
of such securities.
CREDIT ENHANCEMENT. Certain of the Trust's acceptable investments may have
been credit enhanced by a guaranty, letter of credit or insurance. The Trust
typically evaluates the credit quality and ratings of credit enhanced
securities based upon the financial condition and ratings of the party
providing the credit enhancement (the "credit enhancer"), rather than the
issuer. Generally, the Trust will not treat credit enhanced securities as
having been issued by the credit enhancer for diversification purposes.
However, under certain circumstances applicable regulations may require the
Trust to treat the securities as having been issued by both the issuer and the
credit enhancer. The bankruptcy, receivership or default of the credit
enhancer will adversely affect the quality and marketability of the underlying
security.
DEMAND FEATURES. The Trust may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period
(usually seven days) following a demand by the Trust. The demand feature may
be issued by the issuer of the underlying securities, a dealer in the
securities or by another third party, and may not be transferred separately
from the underlying security. The Trust uses these arrangements to provide the
Trust with liquidity and not to protect against changes in the market value of
the underlying securities. The bankruptcy, receivership or default by the
issuer of the demand feature, or a default on the underlying security or other
event that terminates the demand feature before its exercise, will adversely
affect the liquidity of the underlying security. Demand features that are
exercisable even after a payment default on the underlying security may be
treated as a form of credit enhancement.
RESTRICTED AND ILLIQUID SECURITIES. The Trust may invest up to 10% of its
total assets in restricted securities. This restriction is not applicable to
commercial paper issued under Section 4(2) of the Securities Act of 1933.
Restricted securities are any securities in which the Trust may otherwise
invest pursuant to its investment objectives and policies but which are
subject to restriction on resale under federal law. The Trust will limit
investments in illiquid securities, including certain restricted securities
not determined by the Trustees to be liquid, ETDs and repurchase agreements
providing for settlement in more than seven days after notice, to 10% of its
net assets.
The Trust may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) paper is restricted as to disposition under federal securities
law, and is generally sold to institutional investors, such as the Trust, who
agree that they are purchasing the paper for investment purposes and not with
a view to public distribution. Any resale by the purchaser must be in an
exempt transaction. Section 4(2) commercial paper is normally resold through,
or with the assistance of, an issuer or investment dealers who make a market
in Section 4(2) commercial paper, thus providing liquidity.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which the Trust purchases securities with payment and delivery
scheduled for a future time. The seller's failure to complete these
transactions may cause the Trust to miss a price or yield considered to be
advantageous. Settlement dates may be a month or more after entering into
these transactions, and the market values of the securities purchased may vary
from the purchase prices. Accordingly, the Trust may pay more/less than the
market value of the securities on the settlement date.
INVESTMENT RISKS
ECDs, ETDs, Yankee CDs, CCPs, and Europaper are subject to somewhat different
risks than domestic obligations of domestic banks. Examples of these risks
include international, economic and political developments, foreign
governmental restrictions that may adversely affect the payment of principal or
interest, foreign withholding or other taxes on interest income, difficulties
in obtaining or enforcing a judgment against the issuing bank, and the possible
impact of interruptions in the flow of international currency transactions.
Different risks may also exist for ECDs, ETDs, and Yankee CDs because the banks
issuing these instruments, or their domestic or foreign branches, are not
necessarily subject to the same regulatory requirements that apply to domestic
banks, such as reserve requirements, loan limitations, examinations,
accounting, auditing and recordkeeping, and the public availability of
information. These factors will be carefully considered by the Trust's adviser
in selecting investments for the Trust.
INVESTMENT LIMITATIONS
The Trust will not:
. borrow money directly or through reverse repurchase agreements
(arrangements in which the Trust sells a money market instrument for a
percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under certain circumstances, the Trust
may borrow up to one-third of the value of its total assets and pledge up
to 10% of the value of those assets to secure such borrowings;
. invest more than 5% of its total assets in securities of one issuer
(except cash and cash items, repurchase agreements, and U.S. government
obligations); or
. invest more than 5% of its total assets in securities of issuers that
have records of less than three years of continuous operations.
REGULATORY COMPLIANCE
The Trust may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended. In particular, the Trust
will comply with the various requirements of Rule 2a-7, which regulates money
market mutual funds. The Trust will also determine the effective maturity of
its investments, as well as its ability to consider a security as having
received the requisite short-term ratings by NRSROs, according to Rule 2a-7.
The Trust may change these operational policies to reflect changes in the laws
and regulations without the approval of its shareholders.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust attempts to stabilize the net asset value of its shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net asset
value per share is determined by subtracting total liabilities from total
assets and dividing the remainder by the number of shares outstanding. The
Trust, of course, cannot guarantee that its net asset value will always remain
at $1.00 per share.
INVESTING IN THE TRUST
- --------------------------------------------------------------------------------
SHARE PURCHASES
To purchase shares of the Trust:
. sign the Automatic Collection and Reinvestment Service Agreement, also
available from an Edward D. Jones investment representative (optional, but
recommended);
. complete and sign a check-writing application, available from an Edward
D. Jones investment representative (optional);
. enclose a check for $1,000 or more made payable to Edward D. Jones & Co.,
L.P. ("Edward D. Jones"; and
. send the check and completed form(s) to your local Edward D. Jones
office.
FEDERAL RESERVE OR BANK WIRE. Shares may also be purchased with federal funds
sent by Federal Reserve or bank wire. This method results in a more rapid
investment in Trust shares. Shares cannot be purchased by wire on Columbus Day,
Veteran's Day, or Martin Luther King Day. An investment representative of
Edward D. Jones must be contacted before wiring any funds.
FULL SERVICE ACCOUNT
Shareholders of the Trust may subscribe to Edward D. Jones & Co.'s Full Service
Account ("FSA"). This program provides a convenient method for investment by
linking the shareholder's Trust Account and Edward D. Jones & Co. Brokerage
Account. The FSA subscriber, with a free credit balance in a Brokerage Account,
will automatically have this sum invested in the Trust account on a daily
basis. FSA also permits daily, automatic redemption of Trust shares to satisfy
debit balances in the shareholders' Brokerage Accounts. At present, there is no
fee for this service, but Edward D. Jones & Co., L.P. reserves the right to
charge a fee in the future.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Trust is $1,000. Subsequent investments
must be in amounts of at least $1,000 except for the FSA in which there is no
minimum requirement. If the investor has signed an Automatic Collection and
Reinvestment Service Agreement there is no minimum. An investment can be made
by sending a check to Edward D. Jones with instructions that it be invested in
the Trust.
WHAT SHARES COST
Trust shares are sold at their net asset value next determined after an order
is received. There is no sales load imposed by the Trust.
The net asset value is determined at 12:00 noon (Eastern time) and 4:00 p.m.
(Eastern time), Monday through Friday, except on: (i) days on which there are
not sufficient changes in the value of the Trust's portfolio securities that
its net asset value might be materially affected; (ii) days during which no
shares are tendered for redemption and no orders to purchase shares are
received; and (iii) the following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
RECEIPT OF ORDERS
Trust shares are sold on days on which the New York Stock Exchange is open.
Orders are considered received after payment by check is converted by Edward D.
Jones or Federated Services Company, the Trust's transfer agent, into federal
funds (normally within two business days of receiving the check). When payment
is made with federal funds, the order is considered received immediately.
The Trust reserves the right to reject any purchase request.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless
requested on the aplication or by contacting the Trust.
All purchases, redemptions, and dividends paid during the preceding month will
be confirmed on the shareholder's Edward D. Jones monthly account statement.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Trust. Shares purchased
before 12:00 noon (Eastern time) earn dividends that day.
CAPITAL GAINS
Since the Trust's policy is, under normal circumstances, to hold portfolio
securities to maturity and to value portfolio securities at amortized cost, it
does not expect any capital gains or losses. If the Trust does experience
gains, however, it could result in an increase in dividends. Capital losses
could result in a decrease in dividends. If for some extraordinary reason the
Trust realizes net long-term capital gains, it will distribute them at least
once every 12 months.
RETIREMENT PLANS
Shares of the Trust can be purchased as an investment for retirement plans or
for IRA accounts. For further details, contact an investment representative of
Edward D. Jones and consult a tax adviser.
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Trust shares may be acquired in exchange for shares of other funds in the
Liberty Investment Program at net asset value. Also, Trust shares may be
exchanged for shares in other funds in the Liberty Investment Program at net
asset value plus a sales load, if applicable. Neither the Trust nor any of the
funds in the Liberty Investment Program impose any additional fees on
exchanges.
REQUIREMENTS FOR EXCHANGE
Shareholders using this privilege must exchange shares having a net asset value
equal to the Fund's minimum investment requirement. Before the exchange, the
shareholder must receive a prospectus of the fund for which the exchange is
being made.
This privilege is available to shareholders resident in any state in which the
fund shares being acquired may be sold. Upon receipt of proper instructions
and required supporting documents, shares submitted for exchange are redeemed
and the proceeds invested in shares of the other fund. The exchange privilege
may be terminated at any time. Shareholders will be notified of the
termination of the exchange privilege.
Further information on the exchange privilege and prospectuses for the Liberty
Investment Program funds are available by contacting your Edward D. Jones
investment representative.
TAX CONSEQUENCES
An exercise of the exchange privilege is treated as a sale for federal income
tax purposes. Depending upon the circumstances, a short-term or long-term
capital gain or loss may be realized.
MAKING AN EXCHANGE
Exchange instructions for the Liberty Investment Program may be given in
writing or by telephoning your Edward D. Jones investment representative.
Written instructions may require a signature guarantee. Shareholders of the
Trust may have difficulty in making exchanges by telephone through brokers and
other financial institutions during times of drastic economic or market
changes. If a shareholder cannot contact the broker or financial institution
by telephone, it is recommended that an exchange request be made in writing
and sent by overnight mail.
TELEPHONE INSTRUCTIONS. Telephone instructions made by the investor may be
carried out only if a telephone authorization form completed by the investor
is on file with Federated Services Company. If the instructions are given by a
broker, a telephone authorization form completed by the broker must be on file
with Federated Services Company. Shares may be exchanged between two funds by
telephone only if the two funds have identical shareholder registrations.
Any shares held in certificate form cannot be exchanged by telephone but must
be forwarded to Federated Services Company and deposited to the shareholder's
account before being exchanged. Telephone exchange instructions may be
recorded and will be binding upon the shareholder. Such instructions will be
processed as of 4:00 p.m. (Eastern time) and must be received by Federated
Services Company before that time for shares to be exchanged the same day.
Shareholders exchanging into a fund will not receive any dividend that is
payable to shareholders of record on that date. This privilege may be modified
or terminated at any time.
REDEEMING SHARES
- -------------------------------------------------------------------------------
The Trust redeems shares at their net asset value next determined after
Federated Services Company receives the redemption request. Redemptions will
be made on days on which the Trust computes its net asset value. Redemption
requests must be received in proper form and can be made:
. by writing a check;
. by VISA debit card and VISA checks;
. by contacting your Edward D. Jones & Co. investment representative; or
. by written request.
REDEEMING BY CHECK
At the shareholder's request, Federated Services Company will establish a
checking account for redeeming Trust shares. For further information, contact
an investment representative of Edward D. Jones.
USING THE CHECKING ACCOUNT. With a Trust checking account, shares may be
redeemed simply by writing a check for $500 or more. The redemption will be
made at the net asset value on the date that Federated Services Company
presents the check to the Trust. A check may not be written to close an
account. In addition, if a shareholder wishes to redeem shares and have the
proceeds available, a check may be written and negotiated through the
shareholder's local bank. Checks should never be sent to Federated Services
Company to redeem shares. Canceled checks are currently sent to the
shareholder each month. We reserve the right to return on a less frequent
basis, or to truncate or image the checks.
VISA ACCOUNT
At the shareholder's request, State Street Bank will establish a VISA account.
This VISA account allows a shareholder to redeem Trust shares by using a VISA
debit card or VISA checks. A VISA check may not be written to close an
account. A shareholder with a VISA account may not use the Trust checking
account privileges (only one check-writing option may be chosen). For further
information, contact an investment representative of Edward D. Jones. Canceled
checks are currently sent to shareholders each month. We reserve the right to
return on a less frequent basis, or to truncate or image the checks.
WRITTEN REQUESTS
Trust shares may also be redeemed by sending a written request to Edward D.
Jones. Call Edward D. Jones for specific instructions before redeeming by
letter. The shareholder will be asked to provide in the request, the
shareholder's name, the Trust name, the account number, and the share or
dollar amount requested. If share certificates have been issued, they must be
properly endorsed and should be sent by registered or certified mail with the
written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record
with the Trust, or a redemption payable other than to the shareholder of
record must have signatures on written redemption requests guaranteed by:
. a trust company or commercial bank whose deposits are insured by the BIF,
which is administered by the Federal Deposit Insurance Corporation
("FDIC");
. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
. a savings bank or savings and loan association whose deposits are insured
by the SAIF, which is administered by the FDIC; or
. any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
The Trust and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Trust and its transfer agent reserve the
right to amend these standards at any time without notice.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Trust may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value, due to shareholder
redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 60 days to purchase additional shares to meet the minimum
requirement. A shareholder's checkwriting or VISA privilege may be
discontinued at any time.
This policy does not currently apply to IRAs, Keoghs, other retirement
accounts, or accounts owned by employees or associates of Edward D. Jones &
Co., L.P. These types of accounts may be subject to the fund-required minimum
in the future. The shares may be redeemed and placed in a non-interest bearing
brokerage account without prior written notification.
At this time there is no fee for a low balance account. In the future, the
Trust may assess a fee to offset the cost of a small account, rather than
liquidating the account.
TRUST INFORMATION
- -------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Trust's business affairs and for exercising
all the Trust's powers except those reserved for the shareholders. The
Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Trust are made by Passport
Research, Ltd., the Trust's investment adviser, subject to direction by the
Trustees. The adviser continually conducts investment research and supervision
for the Trust and is responsible for the purchase, sale, or exchange of
portfolio instruments, for which it receives an annual fee from the Trust.
ADVISORY FEES. The annual investment advisory fee is based on the Trust's
average daily net assets as shown on the chart below.
<TABLE>
<CAPTION>
ADVISORY FEE AS
AVERAGE DAILY % OF AVERAGE
NET ASSETS DAILY NET ASSETS
------------- ----------------
<S> <C>
First $500 million .50 of 1%
Second $500 million .475 of 1%
Third $500 million .45 of 1%
Forth $500 million .425 of 1%
Over $2 billion .40 of 1%
</TABLE>
The adviser has undertaken to reimburse the Trust for operating expenses in
excess of limitations established by certain states.
ADVISER'S BACKGROUND. Passport Research, Ltd. is a Pennsylvania limited
partnership organized in 1981. Federated Advisers is the general partner of
the investment adviser and has a 50.5% interest in the investment adviser.
Federated Advisers is owned by Federated Investors. Edward D. Jones & Co.,
L.P. is the limited partner of the investment adviser and has a 49.5%
interest in the investment adviser.
FEDERATED INVESTORS. Federated Investors, which was founded in 1956 as
Federated Investors, Inc., develops and manages mutual funds primarily for
the financial industry. Federated Investors' track record of competitive
performance and its disciplined, risk averse investment philosophy serve
approximately 3,500 client institutions nationwide. Through these same
client institutions, individual shareholders also have access to this same
level of investment expertise.
DISTRIBUTION OF TRUST SHARES
Edward D. Jones & Co., L.P. ("E.D. Jones") is the principal distributor for
shares of the Trust. Although it receives no compensation from the Trust for
sales of its shares, it does provide administrative personnel and services to
Federated Administrative Services, for which it receives a fee equal to
approximately 0.039 of 1% of average daily net assets of the Trust. Prior to
March 1, 1994, E. D. Jones provided similar personnel and services to the
Trust at approximate cost. The Trust has agreed to indemnify the distributor,
and the distributor has agreed to indemnify the Trust against certain civil
liabilities, including liabilities under the Securities Act of 1933.
SHAREHOLDER SERVICES PLAN. The Trust has adopted a Shareholder Services Plan
(the "Services Plan"). Under the Services Plan, E. D. Jones will enter into a
shareholder services agreement with the Trust to provide shareholder services
to its customers who from time to time may be owners of Trust shares. In
return for providing these services, E. D. Jones will receive payments from
the Trust at a rate not exceeding .25% of the average daily net assets of the
Trust. These shareholder services may include, but are not limited to, the
following functions: providing office space, equipment, telephone facilities,
and various personnel, including clerical, supervisory, and computer
personnel, as necessary or beneficial to establish and maintain shareholder
accounts and records; processing purchase and redemption transactions and
automatic investments of client account cash balances; answering routine
client inquiries regarding the Trust; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Federated Securities Corp. acts as the Trust's distributor in those states in
which Edward D. Jones is not registered. Federated Securities Corp. is a
subsidiary of Federated Investors and is the principal distributor for a
number of investment companies.
ADMINISTRATION OF THE TRUST
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the
Trust. Federated Administrative Services provides these at an annual rate
which relates to the average aggregate daily net assets of all funds advised
by subsidiaries of Federated Investors ("Federated Funds") as specified below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
----------- ----------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Trust.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND PORTFOLIO
RECORDKEEPER. Federated Services Company, Pittsburgh, Pennsylvania, is
transfer agent for the shares of the Trust, and dividend disbursing agent for
the Trust. E.D. Jones is sub-transfer agent for the shares of the Trust.
INDEPENDENT AUDITORS. The independent auditors for the Trust are Ernst & Young
LLP, Pittsburgh, Pennsylvania.
SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. As a Massachusetts
business trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Trust's
operation and for the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the Trust shall be called by the Trustees upon
the written request of shareholders owning at least 10% of the Trust's
outstanding shares.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations
of the Trust. These documents require notice of this disclaimer to be given in
each agreement, obligation, or instrument the Trust or its Trustees enter into
or sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required to use its property to protect or
compensate the shareholder. On request, the Trust will defend any claim made
and pay any judgment against a shareholder for any act or obligation of the
Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies even though
dividends and distributions are received as additional shares. No federal
income tax is due on any dividends earned in an IRA or qualified retirement
plan until distributed.
STATE AND LOCAL TAXES
Shareholders are urged to consult their own tax advisers regarding the status
of their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Trust advertises its yield and effective yield.
The yield of the Trust represents the annualized rate of income earned on an
investment in the Trust over a seven-day period. It is the annualized dividends
earned during the period on the investment, shown as a percentage of the
investment. The effective yield is calculated similarly to the yield, but, when
annualized, the income earned by an investment in the Trust is assumed to be
reinvested daily. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment.
Advertisements and other sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value of
an investment in the Trust after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed
as a percentage.
From time to time, the Trust may refer to ratings, rankings, and other
information in certain financial publications and/or compare the Trust's
performance to certain indices.
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------------------------------------------ --------------
<C> <S> <C>
SHORT-TERM OBLIGATIONS--42.4%
-------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION, FLOATING RATE NOTES--5.0%
-------------------------------------------------------------
$122,000,000 5.99%-6.06%, 3/7/1995(a) $ 121,993,472
------------------------------------------------ --------------
FEDERAL FARMS CREDIT BANK, DISCOUNT NOTES--1.1%
-------------------------------------------------------------
27,295,000 5.48%-5.64%, 4/12/1995-4/24/1995(b) 27,090,951
------------------------------------------------ --------------
FEDERAL HOME LOAN MORTGAGE, DISCOUNT NOTES--3.7%
-------------------------------------------------------------
93,075,000 5.56%-6.575%, 4/4/1995-2/8/1996(b) 91,421,280
------------------------------------------------ --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--14.8%
-------------------------------------------------------------
368,900,000 5.30%-6.61%, 3/2/1995-8/17/1995(b) 363,683,100
------------------------------------------------ --------------
FEDERAL HOME LOAN BANK, DISCOUNT NOTES--5.9%
-------------------------------------------------------------
148,000,000 4.93%-6.60%, 4/7/1995-11/22/1995(b) 145,712,439
------------------------------------------------ --------------
FEDERAL HOME LOAN BANK, FLOATING RATE NOTES--1.6%
-------------------------------------------------------------
40,000,000 5.87%, 3/7/1995(a) 39,990,505
------------------------------------------------ --------------
FEDERAL HOME LOAN MORTGAGE CORPORATION, FLOATING RATE NOTES--
1.7%
-------------------------------------------------------------
43,500,000 5.94%, 3/1/1995(a) 43,480,694
------------------------------------------------ --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTES--
4.9%
-------------------------------------------------------------
121,500,000 5.89%-6.01%, 3/1/1995-3/7/1995(a) 121,486,644
------------------------------------------------ --------------
U.S. TREASURY BILLS--3.0%
-------------------------------------------------------------
74,500,000 4.93%-6.505%, 5/4/1995-8/24/1995 73,042,397
------------------------------------------------ --------------
U.S. TREASURY NOTES--0.7%
-------------------------------------------------------------
17,000,000 8.50%, 5/15/1995 17,110,131
------------------------------------------------ --------------
TOTAL SHORT-TERM OBLIGATIONS 1,045,011,613
------------------------------------------------ --------------
(C)REPURCHASE AGREEMENTS--58.5%
-------------------------------------------------------------
100,000,000 Bank of America, 6.10%, dated 2/28/1995, due
3/1/1995 100,000,000
------------------------------------------------
45,700,000 BZW Securities, Inc., 6.10%, dated 2/28/1995,
due 3/1/1995 45,700,000
------------------------------------------------
200,000,000 BT Securities, Inc., 6.12%, dated 2/28/1995, due
3/1/1995 200,000,000
------------------------------------------------
100,000,000 Chase Manhattan, 6.07%, dated 2/28/1995, due
3/1/1995 100,000,000
------------------------------------------------
</TABLE>
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ --------------------------------------------- --------------
<C> <S> <C>
(C)REPURCHASE AGREEMENTS--CONTINUED
-------------------------------------------------------------
$100,000,000 Daiwa Securities America, Inc., 6.08%, dated
2/28/1995, due 3/1/1995 $ 100,000,000
---------------------------------------------
100,000,000 Deutsche Bank Government Securities, Inc.,
6.13%, dated 2/28/1995, due 3/1/1995 100,000,000
---------------------------------------------
20,000,000 Deutsche Bank Government Securities, Inc.,
6.15%, dated 2/28/1995, due 3/1/1995 20,000,000
---------------------------------------------
100,000,000 Donaldson, Lufkin & Jenrette Securities
Corp., 6.08%, dated 2/28/1995, due 3/1/1995 100,000,000
---------------------------------------------
100,000,000 First Chicago Bank, 6.07%, dated 2/28/1995,
due 3/1/1995 100,000,000
---------------------------------------------
50,000,000 Fuji Securities, Inc., 6.07%, dated
2/28/1995, due 3/1/1995 50,000,000
---------------------------------------------
95,000,000 Goldman, Sachs & Co., 6.15%, dated 2/28/1995,
due 3/1/1995 95,000,000
---------------------------------------------
70,000,000 HSBC Securities, Inc., 6.15%, dated
2/28/1995, due 3/1/1995 70,000,000
---------------------------------------------
100,000,000 Nationsbank of North Carolina, 6.09%, dated
2/28/1995, due 3/1/1995 100,000,000
---------------------------------------------
38,000,000(d) First Boston Corp., 6.00%, dated 1/20/1995,
due 3/21/1995 38,000,000
---------------------------------------------
58,000,000(d) First Boston Corp., 6.10%, dated 2/17/1995,
due 5/18/1995 58,000,000
---------------------------------------------
58,000,000(d) Merrill Lynch Government Securities, Inc.,
6.05%, dated 2/27/1995, due 5/30/1995 58,000,000
---------------------------------------------
50,000,000(d) Morgan Stanley & Co., Inc., 6.00%, dated
2/25/1995, due 3/20/1995 50,000,000
---------------------------------------------
57,000,000(d) Lehman Brothers, Inc., 6.05%, dated 2/2/1995,
due 4/3/1995 57,000,000
--------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 1,441,700,000
--------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (E) $2,486,711,613
--------------------------------------------- --------------
</TABLE>
(a) Floating rate note with current rate and next reset date shown.
(b) Discount rate at time of purchase.
(c) Repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in repurchase agreements were through participation in joint
accounts with other Federated funds.
(d) Although final maturity falls beyond seven days, a liquidity feature is
included in this transaction to permit termination of the repurchase
agreement within seven days.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,464,259,500) at February 28, 1995.
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ----------------------------------------------------------
Investments in repurchase agreements $1,441,700,000
- ------------------------------------------
Investments in other securities 1,045,011,613
- ------------------------------------------ --------------
Total investments, at amortized cost and
value $2,486,711,613
- ------------------------------------------ --------------
Cash 3,350,076
- ------------------------------------------ --------------
Receivable for shares sold 50,069,451
- ------------------------------------------ --------------
Interest receivable 4,154,916
- ------------------------------------------ -------------- --------------
Total assets 2,544,286,056
- ------------------------------------------ --------------
LIABILITIES:
- ------------------------------------------ --------------
Payable for investments purchased 58,000,000
- ------------------------------------------
Payable for shares redeemed 18,262,457
- ------------------------------------------
Dividends payable 2,381,023
- ------------------------------------------
Accrued expenses 1,383,076
- ------------------------------------------ --------------
Total liabilities 80,026,556
- ------------------------------------------ -------------- --------------
NET ASSETS for 2,464,259,500 shares outstanding $2,464,259,500
- ------------------------------------------ -------------- --------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds
Per Share:
($2,464,259,500 / 2,464,259,500 shares outstanding) $1.00
- ------------------------------------------ -------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------- ----------
Interest $102,159,808
- ----------------------------------------------------- ----------
EXPENSES:
- ----------------------------------------------------- ----------
Investment advisory fee $9,914,410
- -----------------------------------------------------
Directors'/Trustees' fees 31,941
- -----------------------------------------------------
Administrative personnel and services fee 1,639,745
- -----------------------------------------------------
Shareholder services fee 5,415,277
- -----------------------------------------------------
Custodian fees 388,704
- -----------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 3,266,509
- -----------------------------------------------------
Share registration costs 138,124
- -----------------------------------------------------
Auditing fees 20,013
- -----------------------------------------------------
Legal fees 25,023
- -----------------------------------------------------
Printing and postage 210,030
- -----------------------------------------------------
Insurance premiums 35,526
- -----------------------------------------------------
Miscellaneous 27,043
- ----------------------------------------------------- ----------
Total expenses 21,112,345
- ----------------------------------------------------- ---------- ------------
Net investment income $ 81,047,463
- ----------------------------------------------------- ---------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST STATEMENT OF CHANGES IN NET
ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
YEAR ENDED FEBRUARY 28,
-------------------------------
1995 1994
- ------------------------------------------- --------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------
OPERATIONS--
- -------------------------------------------
Net investment income $ 81,047,463 $ 49,828,767
- ------------------------------------------- --------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------
Distributions from net investment income (81,047,463) (49,828,767)
- ------------------------------------------- --------------- --------------
SHARE TRANSACTIONS--
- -------------------------------------------
Proceeds from sale of Shares 10,047,201,714 9,022,703,218
- -------------------------------------------
Net asset value of Shares issued to
shareholders
in payment of dividends declared 78,525,018 49,139,474
- -------------------------------------------
Cost of Shares redeemed (9,832,691,748) (9,123,844,305)
- ------------------------------------------- --------------- --------------
Change in net assets resulting from share 293,034,984 (52,001,613)
transactions --------------- --------------
- -------------------------------------------
Change in net assets 293,034,984 (52,001,613)
- -------------------------------------------
NET ASSETS:
- -------------------------------------------
Beginning of period 2,171,224,516 2,223,226,129
- ------------------------------------------- --------------- --------------
End of period $ 2,464,259,500 $2,171,224,516
- ------------------------------------------- --------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Trust is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a diversified open-end, management investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Trust in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Trust's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
REPURCHASE AGREEMENTS--It is the policy of the Trust to require the custo-
dian bank to take possession, to have legally segregated in the Federal Re-
serve Book Entry System, or to have segregated within the custodian bank's
vault, all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Trust to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the re-
purchase price to be paid under the repurchase agreement transaction.
The Trust will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers, which are deemed
by the Trust's adviser to be creditworthy pursuant to guidelines and/or
standards reviewed or established by the Board of Trustees ("Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Trust could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Distri-
butions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Trust's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for
the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At Feb-
ruary 28, 1995, capital paid-in aggregated $2,464,259,500. Transactions in
Trust shares were as follows:
<TABLE>
<S> <C> <C>
YEAR ENDED FEBRUARY 28,
------------------------------
1995 1994
- ------------------------------------------- -------------- --------------
Shares sold 10,047,201,714 9,022,703,218
- -------------------------------------------
Shares issued to shareholders in payment of
dividends declared 78,525,018 49,139,474
- -------------------------------------------
Shares redeemed (9,832,691,748) (9,123,844,305)
- ------------------------------------------- -------------- --------------
Net change resulting from Trust share 293,034,984 (52,001,613)
transactions -------------- --------------
- -------------------------------------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Passport Research, Ltd., the Trust's investment ad-
viser (the "Adviser"), receives for its services an annual investment advisory
fee based on average daily net assets of the Trust as follows: .50% on the
first $500 million, .475% on the next $500 million, .45% on the next $500 mil-
lion, .425% on the next $500 million and .40% thereafter. The Adviser will
waive the amount that normal operating expenses of the Trust (including the in-
vestment advisory fee, but excluding brokerage commissions, interest, taxes and
extraordinary expenses) exceed 2 1/2% per year on the first $30 million of av-
erage daily net assets of the Trust, 2% per year on the next $70 million of av-
erage daily net assets of the Trust, and 1 1/2% per year on any additional net
assets.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Trust administrative personnel
and services. The FAS fee is based on the level of average aggregate daily net
assets of the funds advised by subsidiaries of Federated Investors for the
period. The administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and $30,000 per
each additional class of share.
SHAREHOLDER SERVICES PLAN--Under the terms of a Shareholder Services Agreement
with Edward D. Jones & Co., L.P., the Trust will pay Edward D. Jones & Co.,
L.P. up to .25 of 1% of average daily net assets of the Trust for the period.
This fee is to obtain certain services for shareholders and to maintain
shareholder accounts.
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
- -------------------------------------------------------------------------------
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES --Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent
for the Trust. The fee is based on the size, type, and number of accounts and
transactions made by shareholders. Edward D. Jones & Co., L.P. is sub-transfer
agent for the shares of the Trust.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of EDWARD D. JONES & CO. DAILY PASSPORT CASH
TRUST:
We have audited the accompanying statement of assets and liabilities of Edward
D. Jones & Co. Daily Passport Cash Trust, including the portfolio of invest-
ments, as of February 28, 1995, and 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 (see page 2 of
this Prospectus) for each of the ten years in the period then ended. These fi-
nancial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these finan-
cial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights 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 Feb-
ruary 28, 1995, 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 pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Ed-
ward D. Jones & Co. Daily Passport Cash Trust at February 28, 1995, 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
for each of the ten years in the period then ended, in conformity with gener-
ally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
April 12, 1995
ADDRESSES
- --------------------------------------------------------------------------------
Edward D. Jones & Co. Daily Passport Cash Trust
Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
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Principal Distributor
Edward D. Jones & Co., L.P. 201 Progress Parkway Maryland
Heights, Missouri 63043
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Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
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Investment Adviser
Passport Research, Ltd. Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
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Custodian
State Street Bank and Trust Company P.O. Box 1790 Boston,
Massachusetts 02105
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Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
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Independent Auditors
One Oxford Centre Pittsburgh,
Ernst & Young LLP Pennsylvania 15219
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EDWARD D. JONES & CO. DAILY PASSPORT
CASH TRUST
PROSPECTUS
Prospectus dated April 30, 1995
EDWARD D. JONES & CO., L.P.
201 PROGRESS PARKWAY
MARYLAND HEIGHTS, MISSOURI 63043
1-800-441-2357
Distributor
480023100
8032801A (4/95)
Edward D. Jones & Co. Daily Passport Cash Trust
Statement of Additional Information
"A Passport to Cash Management"
This Statement of Additional Information should be read with the
prospectus of the Trust dated April 30, 1995. This Statement is
not a prospectus itself. To receive a copy of the prospectus,
write Edward D. Jones & Co. Daily Passport Cash Trust at 201
Progress Parkway, Maryland Heights, Missouri 63043 or call 1-800-
441-2357.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated April 30, 1995
EDWARD D. JONES & CO., L.P.
201 PROGRESS PARKWAY
MARYLAND HEIGHTS, MISSOURI 63043
1-800-441-2357
Distributor
General Information About
the Trust 1
Investment Objective and
Policies 1
Types of Investments 1
Restricted and Illiquid
Securities 2
When-Issued and Delayed
Delivery
Transactions 2
Repurchase Agreements 2
Reverse Repurchase
Agreements 2
Investment Limitations 3
Purchasing Shares 4
Conversion to Federal
Funds 4
Determining Net Asset Value 5
Use of the Amortized Cost
Method 5
Redeeming Shares 6
Redemption in Kind 6
VISA Account 6
Edward D. Jones & Co. Daily
Passport
Cash Trust Management 6
Trust Ownership 10
Trustees Compensation 11
Trustee Liability 11
Investment Advisory
Services 12
Adviser to the Trust 12
Advisory Fees 12
Administrative Services 12
Shareholder Services Plan 13
Brokerage Transactions 13
Tax Status 13
The Trust's Tax Status 13
Shareholders' Tax Status 13
Yield 14
Effective Yield 14
Performance Comparisons 14
General Information About the Trust
Edward D. Jones & Co. Daily Passport Cash Trust (the "Trust") was
established as a Massachusetts business trust under a Declaration of
Trust dated January 9, 1980.
Investment Objective and Policies
The Trust's investment objective is to provide stability of principal
and current income consistent with stability of principal.
Types of Investments
The Trust invests in money market instruments which mature in one year
or less and which include, but are not limited to, bank instruments,
commercial paper, demand master notes, and U.S. government obligations.
The above investment objective and policies cannot be changed without
approval of shareholders.
Bank Instruments
In addition to domestic bank obligations such as certificates of
deposit, demand and time deposits, savings shares, and bankers'
acceptances, the Trust may invest in:
o Eurodollar Certificates of Deposit issued by foreign branches
of U.S. or foreign banks;
o Eurodollar Time Deposits, which are U.S. dollar-denominated
deposits in foreign branches of U.S. or foreign banks;
o Canadian Time Deposits, which are U.S. dollar-denominated
deposits issued by branches of major Canadian banks located in
the United States; and
o Yankee Certificates of Deposit, which are U.S. dollar-
denominated certificates of deposit issued by U.S. branches of
foreign banks and held in the United States.
U.S. Government Obligations
The types of U.S. government obligations in which the Trust may
invest generally include direct obligations of the U.S. Treasury
(such as U.S. Treasury bills, notes, and bonds) and obligations
issued or guaranteed by U.S. government agencies or
instrumentalities. These securities are backed by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the
obligations.
Examples of agencies and instrumentalities which may not always
receive financial support from the U.S. government are:
o Farm Credit System, including the National Bank for
Cooperatives, Farm Credit Banks, and Banks for Cooperatives;
o Farmers Home Administration;
o Federal Home Loan Banks;
o Federal Home Loan Mortgage Corporation;
o Federal National Mortgage Association;
o Government National Mortgage Association; and
o Student Loan Marketing Association.
Restricted and Illiquid Securities
The ability of the Trust's Board of Trustees (the "Trustees") to
determine the liquidity of certain restricted securities is permitted
under a Securities and Exchange Commission ("SEC") Staff position set
forth in the adopting release for Rule 144A under the Securities Act of
1933 (the "Rule"). The Rule is a non-exclusive safe-harbor for certain
secondary market transactions involving securities subject to
restrictions on resale under federal securities laws. The Rule provides
an exemption from registration for resales of otherwise restricted
securities to qualified institutional buyers. The Rule was expected to
further enhance the liquidity of the secondary market for securities
eligible for resale under Rule 144A. The Trust believes that the Staff
of the SEC has left the question of determining the liquidity of all
restricted securities (eligible for resale under Rule 144A) for
determination by the Trustees. The Trustees consider the following
criteria in determining the liquidity of certain restricted securities.
o the frequency of trades and quotes for the security;
o the number of dealers willing to purchase or sell the security and
the number of other potential buyers;
o dealer undertakings to make a market in the security; and
o the nature of the security and the nature of the marketplace
trades.
When-Issued and Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price or yield for the Trust. Settlement dates may be a
month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices. No
fees or other expenses, other than normal transaction costs, are
incurred. However, liquid assets of the Trust sufficient to make payment
for the securities to be purchased are segregated on the Trust's records
at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled. The Trust does not
intend to engage in when-issued and delayed delivery transactions to an
extent that would cause the segregation of more than 20% of the total
value of its assets.
Repurchase Agreements
The Trust requires its custodian to take possession of the securities
subject to repurchase agreements, and these securities are marked to
market daily. To the extent that the original seller does not repurchase
the securities from the Trust, the Trust could receive less than the
repurchase price on any sale of such securities. In the event that such
a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by the Trust might be delayed pending
court action. The Trust believes that under the regular procedures
normally in effect for custody of the Trust's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction
would rule in favor of the Trust and allow retention or disposition of
such securities. The Trust will only enter into repurchase agreements
with banks and other recognized financial institutions, such as
broker/dealers, which are deemed by the Trust's adviser to be
creditworthy pursuant to guidelines established by the Trustees.
Reverse Repurchase Agreements
The Trust may also enter into reverse repurchase agreements. This
transaction is similar to borrowing cash. In a reverse repurchase
agreement the Trust transfers possession of a portfolio instrument to
another person, such as a financial institution, broker or dealer, in
return for a percentage of the instrument's market value in cash, and
agrees that on a stipulated date in the future the Trust will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase
agreements may enable the Trust to avoid selling portfolio instruments
at a time when a sale may be deemed to be disadvantageous, but the
ability to enter into reverse repurchase agreements does not ensure that
the Trust will be able to avoid selling portfolio instruments at a
disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the
Trust, in a dollar amount sufficient to make payment for the obligations
to be purchased, are segregated at the trade date. These securities are
marked to market daily and maintained until the transaction is settled.
Investment Limitations
The Trust will not change any of the investment limitations described
below without approval of shareholders.
Selling Short and Buying on Margin
The Trust will not sell any money market instruments short or
purchase any money market instruments on margin but may obtain
such short-term credits as may be necessary for clearance of
purchases and sales of money market instruments.
Borrowing Money
The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not
in excess of 5% of the value of its total assets. In addition, the
Trust may enter into reverse repurchase agreements and otherwise
borrow up to one-third of the value of its total assets, including
the amount borrowed, in order to meet redemption requests without
immediately selling portfolio instruments. This latter practice is
not for investment leverage but solely to facilitate management of
the portfolio by enabling the Trust to meet redemption requests
when the liquidation of portfolio instruments would be
inconvenient or disadvantageous.
Interest paid on borrowed funds will not be available for
investment. The Trust will liquidate any such borrowings as soon
as possible and may not purchase any portfolio instruments while
any borrowings are outstanding. However, during the period any
reverse repurchase agreements are outstanding, but only to the
extent necessary to assure completion of the reverse repurchase
agreements, the Trust will restrict the purchase of portfolio
instruments to money market instruments maturing on or before the
expiration date of the reverse repurchase agreements.
Pledging Assets
The Trust will not mortgage, pledge, or hypothecate any assets
except to secure permitted borrowings. In those cases, it may
mortgage, pledge, or hypothecate assets having a market value not
exceeding the lesser of the dollar amounts borrowed or 10% of the
value of total assets at the time of the borrowing.
Investing in Commodities, Minerals, or Real Estate
The Trust will not invest in commodities, commodity contracts,
oil, gas, or other mineral programs or real estate, except that it
may purchase money market instruments issued by companies that
invest in or sponsor such interests.
Underwriting
The Trust will not engage in underwriting of securities issued by
others, except as it may be deemed to be an underwriter under the
Securities Act of 1933 in connection with the sale of securities
in accordance with its investment objective, policies and
limitations.
Lending Cash or Securities
The Trust will not lend any of its assets, except that it may
purchase or hold money market instruments, including repurchase
agreements and variable amount demand master notes, permitted by
its investment objective and policies.
Acquiring Securities
The Trust will not acquire the voting securities of any issuer. It
will not invest in securities issued by any other investment
company, except as part of a merger, consolidation, or other
acquisition. It will not invest in securities of a company for the
purpose of exercising control or management.
Diversification of Investments
The Trust will not purchase securities issued by any one issuer
having a value of more than 5% of the value of its total assets
except cash or cash items, repurchase agreements, and U.S.
government obligations.
The Trust considers the type of bank obligations it purchases as
cash items.
Concentration of Investments
The Trust will not purchase money market instruments if, as a
result of such purchase, more than 25% of the value of its total
assets would be invested in any one industry.
However, investing in bank instruments (such as time and demand
deposits and certificates of deposit), U.S. government
obligations, or instruments secured by these money market
instruments, such as repurchase agreements, shall not be
considered investments in any one industry.
Investing in New Issuers
The Trust will not invest more than 5% of the value of its total
assets in money market instruments of unseasoned issuers,
including their predecessors, that have been in operation for less
than three years.
Investing in Issuers Whose Securities Are Owned by Officers and
Trustees of the Trust
The Trust will not purchase or retain the securities of any issuer
if the officers and Trustees of the Trust or its investment
adviser, owning individually more than 1/2 of 1% of the issuer's
securities, together own more than 5% of the issuer's securities.
Dealing in Puts and Calls
The Trust will not invest in puts, calls, straddles, spreads, or
any combination of them.
Investing in Restricted Securities
The Trust will not invest more than 10% of its total assets in
securities which are subject to restrictions on resale under
federal securities laws, except for Section 4(2) commercial paper.
Issuing Senior Securities
The Trust will not issue senior securities, except as permitted by
the investment objective and policies and investment limitations
of the Trust.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not
result in a violation of such restriction.
The Trust did not borrow money, pledge securities, or invest in reverse
repurchase agreements in excess of 5% of the value of its net assets
during the last fiscal year and has no present intent to do so in the
coming fiscal year.
For purposes of its policies and limitations, the Trust considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items".
Purchasing Shares
Shares are sold at their net asset value without a sales charge on days
the New York Stock Exchange is open for business. The procedure for
purchasing shares of the Trust is explained in the prospectus under
"Investing in the Trust."
Conversion to Federal Funds
It is the Trust's policy to be as fully invested as possible so that
maximum interest may be earned. To this end, all payments from
shareholders must be in federal funds or be converted into federal
funds. This conversion must be made before shares are purchased. Edward
D. Jones or Federated Services Company acts as the shareholder's agent
in depositing checks and converting them to federal funds.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust
Company, Boston, MA is custodian for the securities and cash of the
Trust. Federated Services Company, Pittsburgh, PA provides certain
accounting and recordkeeping services with respect to the Trust's
portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains
all necessary shareholder records. For its services, the transfer agent
receives a fee based on the number of shareholder accounts.
Determining Net Asset Value
The Trust attempts to stabilize the value of a share at $1.00. The days
on which net asset value is calculated by the Trust are described in the
prospectus.
Use of the Amortized Cost Method
The Trustees have decided that the best method for determining the value
of portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at
current market value.
The Trust's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-
7 (the "Rule") promulgated by the SEC under the Investment Company Act
of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as
computed for purposes of distribution and redemption, at $1.00 per
share, taking into account current market conditions and the Trust's
investment objective.
Under the Rule, the Trust is permitted to purchase instruments which are
subject to demand features or standby commitments. As defined by the
Rule, a demand feature entitles the Trust to receive the principal
amount of the instrument from the issuer or a third party on (1) no more
than 30 days' notice or (2) at specified intervals not exceeding one
year on no more than 30 days' notice. A standby commitment entitles the
Trust to achieve same day settlement and to receive an exercise price
equal to the amortized cost of the underlying instrument plus accrued
interest at the time of exercise.
The Trust acquires instruments subject to demand features and standby
commitments to enhance the instruments' liquidity. The Trust treats
demand features and standby commitments as part of the underlying
instruments, because the Trust does not acquire them for speculative
purposes and cannot transfer them separately from the underlying
instruments. Therefore, although the Rule defines demand features and
standby commitments as "puts," the Trust does not consider them to be
separate investments for purposes of its investment policies.
Monitoring Procedures
The Trustees' procedures include monitoring the relationship
between the amortized cost value per share and the net asset value
per share based upon available indications of market value. The
Trustees will decide what, if any, steps should be taken if there
is a difference of more than .5% between the two values. The
Trustees will take any steps they consider appropriate (such as
redemption in kind or shortening the average portfolio maturity)
to minimize any material dilution or other unfair results arising
from differences between the two methods of determining net asset
value.
Investment Restrictions
The Rule requires that the Trust limit its investments to
instruments that, in the opinion of the Trustees, present minimal
credit risks and have received the requisite rating from one or
more nationally recognized statistically rating organizations. If
the instruments are not rated, the Trustees must determine that
they are of comparable quality. The Rule also requires the Trust
to maintain a dollar-weighted average portfolio maturity (not more
than 90 days) appropriate to the objective of maintaining a stable
net asset value of $1.00 per share. In addition, no instrument
with a remaining maturity of more than one year can be purchased
by the Trust.
Should the disposition of a portfolio security result in a dollar-
weighted average portfolio maturity of more than 90 days, the
Trust will invest its available cash to reduce the average
maturity to 90 days or less as soon as possible.
It is the Trust's usual practice to hold portfolio securities to
maturity and realize par, unless the investment adviser determines that
sale or other disposition is appropriate in light of the Trust's
investment objective. Under the amortized cost method of valuation,
neither the amount of daily income nor the net asset value is affected
by any unrealized appreciation or depreciation of the portfolio.
In periods of declining interest rates, the indicated daily yield on
shares of the Trust computed by dividing the annualized daily income on
the Trust's portfolio by the net asset value computed as above may tend
to be higher than a similar computation made by using a method of
valuation based upon market prices and estimates.
In periods of rising interest rates, the indicated daily yield on shares
of the Trust computed the same way may tend to be lower than a similar
computation made by using a method of calculation based upon market
prices and estimates.
Redeeming Shares
The Trust redeems shares at the next computed net asset value after
Federated Services Company receives the redemption request. Redemption
procedures are explained in the prospectus under "Redeeming Shares."
Redemption in Kind
The Trust is obligated to redeem shares solely in cash up to $250,000 or
1% of the Trust's net asset value, whichever is less, for any one
shareholder within a 90-day period.
Any redemption beyond this amount will also be in cash unless the
Trustees determine that further cash payments will have a material
adverse effect on remaining shareholders. In such a case, the Trust will
pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way as the Trust determines net asset
value. The portfolio instruments will be selected in a manner that the
Trustees deem fair and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption
is made in kind, shareholders receiving their securities and selling
them before maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.
VISA Account
At the shareholder's request, State Street Bank and Trust Company
("State Street Bank") will establish a VISA account. This VISA account
allows a shareholder to redeem Trust shares by using a VISA debit card
or VISA checks.
The VISA debit card may be used to purchase merchandise or services from
merchants honoring VISA or to obtain cash advances (which a bank may
limit to $5,000 per account per day) from any bank honoring VISA.
State Street Bank will notify the Trust daily of all charges and cash
advances being presented against the VISA account, and Trust shares will
be redeemed immediately. When a VISA draft or check is presented to
State Street Bank for payment, State Street Bank presents the draft or
check to the Trust. Enough shares are redeemed from the account to cover
the transactions. This enables the shareholder to continue to earn daily
income dividends on Trust shares up to the date they are redeemed.
In the event that there are insufficient shares in the shareholder's
Trust account to cover the amount of the VISA debit card or VISA check
transaction, State Street Bank is authorized to place a stop transfer on
the shareholder's Trust account, to impose a finance charge on the
amount, and to institute collection proceedings.
Shareholders are subject to State Street Bank's VISA account
regulations. State Street Bank charges an annual VISA fee of $40 to
cover credit fees and administrative costs. Enough shares are redeemed
automatically from the account to pay the fee. Lost or stolen cards
should be reported immediately to State Street Bank (1-800-331-2451).
State Street Bank and the Trust have the right to modify or terminate
the VISA debit card privilege or to impose additional charges for
establishing or maintaining a VISA account.
Edward D. Jones & Co. Daily Passport Cash Trust Management
Officers and Trustees are listed with their addresses, present
positions with Edward D. Jones & Co. Daily Passport Cash Trust, and
principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; Chairman and Director,
Federated Research Corp.; Chairman, Passport Research, Ltd.; Director,
AEtna Life and Casualty Company; Chief Executive Officer and Director,
Trustee, or Managing General Partner of the Funds.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Director,
Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D.
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
225 Franklin Street
Boston, MA
Birthdate: April 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation and Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman, Horizon Financial, F.A.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; formerly, Chairman,
National Advisory Council for Environmental Policy and Technology.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: July 21, 1935
Trustee
Public relations/marketing consultant; Director, Trustee, or Managing
General Partner of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
President
Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities
Corp.; President or Vice President of some of the Funds; Director or
Trustee of some of the Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Vice President
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp.; President, Passport Research, Ltd.; Trustee,
Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Vice President of the
Funds; Director, Trustee, or Managing General Partner of some of the
Funds. Mr. Donahue is the son of John F. Donahue, Chairman and Trustee
of the Trust.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Vice President and Treasurer
Vice President, Treasurer, and Trustee, Federated Investors; Vice
President and Treasurer, Federated Advisers, Federated Management,
Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; Vice
President and Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Federated Management, and Federated Research; Vice President and
Secretary, Federated Research Corp. and Passport Research, Ltd.;
Trustee, Federated Services Company; Executive Vice President,
Secretary, and Trustee, Federated Administrative Services; Secretary and
Trustee, Federated Shareholder Services; Executive Vice President and
Director, Federated Securities Corp.; Vice President and Secretary of
the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Cash Management Trust; Automated
Government Money Trust; California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Federated ARMs
Fund; Federated Exchange Fund, Ltd.; Federated GNMA Trust; Federated
Government Trust; Federated Growth Trust; Federated High Yield Trust;
Federated Income Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Institutional Trust; Federated Intermediate
Government Trust; Federated Master Trust; Federated Municipal Trust;
Federated Short-Intermediate Government Trust; Federated Short-Term
U.S. Government Trust; Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; First Priority Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund
for U.S. Government Securities, Inc.; Government Income Securities,
Inc.; High Yield Cash Trust; Insight Institutional Series, Inc.;
Insurance Management Series; Intermediate Municipal Trust; International
Series, Inc.; Investment Series Funds, Inc.; Investment Series Trust;
Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund, Inc.;
Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund,
Inc.; Liquid Cash Trust; Managed Series Trust; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; Municipal
Securities Income Trust; Newpoint Funds; New York Municipal Cash Trust;
111 Corcoran Funds; Peachtree Funds; The Planters Funds; RIMCO Monument
Funds; The Shawmut Funds; Short-Term Municipal Trust; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.;
Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments Trust;
Trademark Funds; Trust for Financial Institutions; Trust For Government
Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust
for U.S. Treasury Obligations; The Virtus Funds; World Investment
Series, Inc.
Trust Ownership
Officers and Trustees own less than 1% of the Trust's outstanding
shares. As of April 11, 1995, no shareholders of record owned 5% of more
of the outstanding shares of the Trust.
Trustees Compensation
<TABLE>
<CAPTION>
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST* FROM FUND COMPLEX
<S> <C> <C>
John F. Donahue, Chairman
and Trustee $ -0- $ -0- for the Trust and
16 other investment companies in the
Fund Complex
John T. Conroy,
Trustee $ 3,371 $ 21,149 for the Trust and
16 other investment companies in the
Fund Complex
William J. Copeland,
Trustee $ 3,371 $ 21,149 for the Trust and
16 other investment companies in the
Fund Complex
James E. Dowd,
Trustee $ 3,371 $ 21,149 for the Trust and
16 other investment companies in the
Fund Complex
Lawrence D. Ellis,
Trustee $ 3,054 $ 19,184 for the Trust and
16 other investment companies in the
Fund Complex
Edward L. Flaherty,
Trustee $ 3,371 $ 21,149 for the Trust and
16 other investment companies in the
Fund Complex
Peter E. Madden,
Trustee $ 2,596 $ 16,332 for the Trust and
16 other investment companies in the
Fund Complex
Gregor F. Meyer,
Trustee $ 3,054 $ 19,184 for the Trust and
16 other investment companies in the
Fund Complex
John E. Murray,
Trustee $ -0- $ -0-for the Trust and
16 other investment companies in the
Fund Complex
Wesley W. Posvar,
Trustee $ 3,054 $ 19,184 for the Trust and
16 other investment companies in the
Fund Complex
Marjorie P. Smuts,
Trustee $ 3,054 $ 19,184 for the Trust and
16 other investment companies in the
Fund Complex
</TABLE>
*Information is furnished for the fiscal year ended February 28, 1995.
Trustee Liability
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they
are not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of their
office.
Investment Advisory Services
Adviser to the Trust
The Trust's investment adviser, Passport Research, Ltd., was organized
as a Pennsylvania limited partnership in 1981. Federated Advisers is the
general partner of the adviser and has a 50.5% interest in the adviser.
The limited partner of the adviser is Edward D. Jones & Co., L.P. which
owns a 49.5% interest in the adviser. Federated Advisers is owned by FII
Holdings, Inc., a subsidiary of Federated Investors. All of the voting
securities of Federated Investors are owned by a trust, the Trustees of
which are John F. Donahue, his wife, and his son, J. Christopher
Donahue.
At any time, Edward D. Jones can require Federated Investors to
repurchase all of its partnership interest in the adviser at the then
current book value. Edward D. Jones cannot transfer, sell, or assign its
partnership interest in the adviser without first offering it to
Federated Investors.
As long as Edward D. Jones owns a partnership interest in the adviser,
it cannot acquire, organize, or cause the organization of any other
money market mutual fund or enter into arrangements with an investment
adviser or underwriter of any other money market mutual fund in which
Edward D. Jones will offer the shares of the other money market mutual
fund. Edward D. Jones has agreed not to solicit proxies in opposition to
management of the Trust unless a court of competent jurisdiction finds
the conduct of a majority of the Trustees constitutes willful
misfeasance, bad faith, gross negligence, or reckless disregard of its
duties.
All of the executive officers of the Trust, except J. Christopher
Donahue, are officers of the adviser. These relationships are described
under "Edward D. Jones & Co. Daily Passport Cash Trust Management."
The adviser shall not be liable to the Trust or any shareholder for any
losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
Advisory Fees
For its advisory services, Passport Research, Ltd. receives an annual
investment advisory fee as described in the prospectus. During the
fiscal years ended February 28, 1995, 1994, and 1993, the Trust's
adviser earned $9,914,410, $9,874,011, and $10,565,847, respectively.
All advisory fees were computed on the same basis as in the present
contract described in the prospectus.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Trust's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the adviser will reimburse the Trust for its
expenses over the limitation.
If the Trust's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
Administrative Services
Federated Administrative Services, a subsidiary of Federated Investors,
and Edward D. Jones & Co., L.P., provide administrative personnel and
services to the Trust for a fee as described in the prospectus. Prior to
March 1, 1994, Federated Administrative Services, Inc., also a
subsidiary of Federated Investors, served as the Trust's Administrator.
(For purposes of this Statement of Additional Information, Federated
Administrative Services and Federated Administrative Services, Inc., may
hereinafter collectively be referred to as, the "Administrators". For
the fiscal years ended February 28, 1995, 1994, and, 1993, the
Administrators collectively earned $ 819,872, $809,742, and $699,338,
respectively. Dr. Henry J. Gailliot, an officer of Passport Research
Ltd., the adviser to the Trust, holds approximately 15% and 20%,
respectively, of the outstanding common stock and serves as a director
of Commercial Data Services, Inc., a company which provides computer
processing services to Federated Administrative Services.
Shareholder Services Plan
This arrangement permits the payment of fees to Federated Shareholder
Services and, indirectly, to financial institutions to cause services to
be provided to shareholders by a representative who has knowledge of the
shareholder's particular circumstances and goals. These activities and
services may include, but are not limited to, providing office space,
equipment, telephone facilities, and various clerical, supervisory,
computer, and other personnel as necessary or beneficial to establish
and maintain shareholder accounts and records; processing purchase and
redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designations, and addresses. For the
fiscal year ended February 28, 1995, and for the fiscal period ending
February 28, 1994, payments in the amount of $5,415,277 and $2,218,473,
respectively were made pursuant to the Shareholder Services Plan, all of
which were paid to financial institutions.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally utilize those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to review by the
Trustees.
The adviser may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Trust
or to the adviser and may include:
o advice as to the advisability of investing in securities;
o security analysis and reports;
o economic studies;
o industry studies;
o receipt of quotations for portfolio evaluations; and
o similar services.
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions
charged by such persons are reasonable in relationship to the value of
the brokerage and research services provided.
Research services provided by brokers may be used by the adviser or by
affiliates of Federated Investors, in advising Federated Funds and other
accounts. To the extent that receipt of these services may supplant
services for which the adviser or its affiliates might otherwise have
paid, it would tend to reduce their expenses.
Tax Status
The Trust's Tax Status
The Trust will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies. To qualify for this treatment, the Trust
must, among other requirements:
o derive at least 90% of its gross income from dividends, interest,
and gains from the sale of securities;
o derive less than 30% of its gross income from the sale of
securities held less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income
earned during the year.
Shareholders' Tax Status
Shareholders are subject to federal income tax on dividends received as
additional shares. No portion of any income dividend paid by the Trust
is eligible for the dividends received deduction available to
corporations. These dividends, and any short-term capital gains, are
taxable as ordinary income.
Capital Gains
Because the Trust invests primarily for income and because it
normally holds portfolio instruments to maturity, it is not
expected to realize long-term capital gains.
Yield
The Trust's yield for the seven-day period ended February 28, 1995 was
5.11%.
The Trust calculates its yield, based upon the seven days ending on the
day of the calculation, called the "base period." This yield is computed
by:
o determining the net change in the value of a hypothetical account
with a balance of one share at the beginning of the base period,
with the net change excluding capital changes but including the
value of any additional shares purchased with dividends earned
from the original one share and all dividends declared on the
original and any purchased shares;
o dividing the net change in the account's value by the value of the
account at the beginning of the base period to determine the base
period return; and
o multiplying the base period return by (365/7).
To the extent that financial institutions and broker/dealers charge fees
in connection with services provided in conjunction with an investment
in the Trust, the performance will be reduced for those shareholders
paying those fees.
Effective Yield
The Trust's effective yield for the seven-day period ended February 28,
1995 was 5.24%.
The Trust's effective yield is computed by compounding the unannualized
base period return by:
o adding 1 to the base period return;
o raising the sum to the 365/7th power; and
o subtracting 1 from the result.
Performance Comparisons
The Trust's performance depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates on money market instruments;
changes in Trust expenses; and
o the relative amount of Trust cash flow.
Investors may use financial publications and/or indices to obtain a more
complete view of the Trust's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Trust uses in advertising may include:
o Lipper Analytical Services, Inc., ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all income dividends and
capital gains distributions, if any. From time to time, the Trust
will quote its Lipper ranking in the "money market instruments"
category in advertising and sales literature.
Advertisements and other sales literature for the Trust may refer to
total return. Total return is the historic change in the value of an
investment in the Trust based on the monthly reinvestment of dividends
over a specified period of time.
From time to time as it deems appropriate, the Trust may advertise its
performance using charts, graphs, and descriptions, compared to
federally insured bank products including certificates of deposit and
time deposits.
480023100
8032801B (4/95)
