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,
1996, 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 or
a paper copy of this prospectus, if you have received your prospectus
electronically, free of charge by calling 1-800-331-2451. 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, 1996
TABLE OF CONTENTS
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SUMMARY OF TRUST EXPENSES 1
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FINANCIAL HIGHLIGHTS 2
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GENERAL INFORMATION 3
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INVESTMENT INFORMATION 3
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Investment Objective 3
Investment Policies 3
Investment Risks 5
Investment Limitations 6
NET ASSET VALUE 6
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INVESTING IN THE TRUST 6
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Share Purchases 6
Full Service Account 7
Minimum Investment Required 7
Receipt of Orders 7
Certificates and Confirmations 7
Dividends 7
Capital Gains 8
Retirement Plans 8
EXCHANGE PRIVILEGE 8
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Requirements for Exchange 8
Tax Consequences 9
Making an Exchange 9
REDEEMING SHARES 9
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Redeeming by Check 10
VISA Account 10
Written Requests 10
Accounts with Low Balances 11
TRUST INFORMATION 11
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Management of the Trust 11
Distribution of Trust Shares 12
Administration of the Trust 13
SHAREHOLDER INFORMATION 13
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Voting Rights 13
TAX INFORMATION 14
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Federal Income Tax 14
State and Local Taxes 14
PERFORMANCE INFORMATION 14
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FINANCIAL STATEMENTS 15
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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 Charge Imposed on Purchases
(as a percentage of offering price).................................................................... None
Maximum Sales Charge 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 OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee........................................................................................... 0.44%
12b-1 Fee................................................................................................ None
Total Other Expenses..................................................................................... 0.52%
Shareholder Services Fee................................................................. 0.25%
Total Operating Expenses....................................................................... 0.96%
</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 $53 $118
</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,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<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
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Net investment
income 0.05 0.04 0.02 0.03 0.05 0.07 0.08 0.07 0.06 0.06
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LESS DISTRIBUTIONS
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Distributions from
net investment
income (0.05) (0.04) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06) (0.06)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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) 5.06% 3.78% 2.33% 2.82% 4.98% 7.39% 8.63% 7.24% 6.15% 5.79%
- ---------------------
RATIOS TO AVERAGE
NET ASSETS
- ---------------------
Expenses 0.96% 0.98% 0.95% 0.95% 0.87% 0.83% 0.88% 1.01% 1.03% 1.03%
- ---------------------
Net investment
income 4.92% 3.74% 2.31% 2.79% 4.89% 7.13% 8.23% 7.14% 6.00% 5.63%
- ---------------------
SUPPLEMENTAL DATA
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Net assets,
end of period
(000 omitted) $3,951,155 $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
- ---------------------
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge 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.
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 complying with the various requirements of
Rule 2a-7 under the Investment Company Act of 1940 which regulates money market
mutual funds and 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 to tender the security for repurchase
at its stated principal amount plus accrued interest. Such securities
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.
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. Any bankruptcy,
receivership or default of the party providing the credit enhancement 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 or 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.
NET ASSET VALUE
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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.
Trust shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Trust.
The net asset value is determined at 12:00 noon (Eastern Time), and as of the
close of trading (normally 4:00 p.m., Eastern time) on the New York Stock
Exchange, Monday through Friday, except on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
INVESTING IN THE TRUST
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SHARE PURCHASES
To purchase shares of the Trust:
sign the Automatic Collection and Reinvestment Service Agreement, also
available from an Edward D. Jones & Co. investment representative
(optional, but recommended);
complete and sign a check-writing application, available from an Edward
D. Jones & Co. investment representative (optional);
enclose a check for $1,000 or more made payable to Edward D. Jones & Co.;
and
send the check and completed form(s) to your local Edward D. Jones & Co.
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 holidays when
wire transfers are restricted. Questions should be directed to your shareholder
services representative at the telephone number listed on your account
statement. An investment representative of Edward D. Jones & Co. 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. 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 & Co. with instructions that it be invested
in the Trust.
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 & Co. or Federated Shareholder 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 Shareholder Services Company
maintains a share account for each shareholder. Share certificates are not
issued unless requested on the application 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 & Co. 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 3:00 p.m. (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 & Co. and consult a tax adviser.
EXCHANGE PRIVILEGE
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Trust shares may be acquired in exchange for shares of other funds in the
Federated Funds at net asset value. Also, Trust shares may be exchanged for
shares in other funds in the Federated Funds at net asset value plus a sales
charge, if applicable. Neither the Trust nor any of the funds in the Federated
Funds impose any additional fees on exchanges.
The Trust has exchange privileges with the following Federated Funds:
Federated American Leaders Fund, Inc.; Federated Asia Pacific Growth Fund;
Capital Growth Fund (Class A Shares and Class C Shares only); Federated Bond
Fund; Federated Small Cap Strategies Fund; Federated Fund for U.S. Government
Securities, Inc.; Federated Emerging Markets Fund; Federated European Growth
Fund; Federated International Equity Fund; Federated Equity Income Fund, Inc.;
Federated International Income Fund; Federated International Small Company Fund;
Federated High Income Bond Fund, Inc.; Federated Latin American Growth Fund;
Federated Municipal Securities Fund, Inc.; Federated U.S. Government Money
Market Trust; Federated Utility Fund, Inc.; Federated Limited Term Fund (Class A
Shares only); Federated Limited Term Municipal Fund (Class A Shares only);
Federated Michigan Intermediate Municipal Trust (Class A Shares only); Federated
Pennsylvania Municipal Income Fund (Class A Shares only); Federated Small Cap
Strategies Fund; Federated Growth Strategies Fund; Federated Strategic Income
Fund; Tax-Free Instruments Trust (Class A Shares only); and Federated World
Utility Fund.
Prospectuses for these funds are available by writing to Federated Securities
Corp.
Shareholders of Class A Shares who have been designated Liberty Life Members are
exempt from sales charges on future purchases in and exchanges between the Class
A Shares of any funds in the Federated Funds, as long as they maintain a $500
balance in one of the Federated Funds.
REQUIREMENTS FOR EXCHANGE
Shareholders using this privilege must exchange shares having a net asset value
equal to the minimum investment requirements of the fund into which the exchange
is being made. 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 Federated
Funds are available by contacting your Edward D. Jones & Co. 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 Federated Funds may be given in writing or by
telephoning your Edward D. Jones & Co. 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 Shareholder Services Company. If the instructions are
given by a broker, a telephone authorization form completed by the broker must
be on file with Federated Shareholder 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 Shareholder 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
Shareholder 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
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The Trust redeems shares at their net asset value next determined after
Federated Shareholder 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 Shareholder Services Company will
establish a checking account for redeeming Trust shares. For further
information, contact an investment representative of Edward D. Jones & Co.
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 Shareholder 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 Shareholder 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 & Co.
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 & Co. Call Edward D. Jones & Co. 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 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 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 Trust 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. In addition, proceeds from redemption requests
received before 3:00 p.m. (Eastern Time) may be wired the same day to the
shareholder's account, but will not include that day's dividend. Proceeds from
redemption requests received after that time include that day's dividend but
will be wired the following business day.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, there is an
average monthly (calculated on a 30-day basis) account balance policy.
Shareholders must maintain a $2,500 average monthly account balance.
Shareholders who do not maintain an average monthly account balance of $2,500,
in any given 30-day period, will be charged a $3.00 fee for that period. A
shareholder's checkwriting or VISA privilege may be discontinued at any time.
This policy does not currently apply to retirement accounts where Edward D.
Jones & Co. is the custodian, or accounts owned by associates of Edward D. Jones
& Co. These types of accounts may be subject to the fund-required minimum in the
future.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees (the
"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. An Executive Committee of the Trustees handles the Trustees'
responsibilities between meetings of the Trustees.
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.
is the limited partner of the investment adviser and has a 49.5% interest
in the investment adviser.
FEDERATED INVESTORS. With over $80 billion invested across more than 250
funds under management and/or administration by its subsidiaries, as of
December 31, 1995, Federated Investors is one of the largest mutual fund
investment managers in the United States. With more than 1,800 employees,
Federated continues to be led by the management who founded the company in
1955. Federated funds are presently at work in and through 4,000 financial
institutions nationwide. More than 100,000 investment professionals have
selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics
governing the conduct of all employees who manage the Trust and its
portfolio securities. These codes recognize that such persons owe a
fiduciary duty to the Trust's shareholders and must place the interests of
shareholders ahead of the employees' own interest. Among other things, the
codes: require preclearance and periodic reporting of personal securities
transactions; prohibit personal transactions in securities being purchased
or sold, or being considered for purchase or sale, by the Trust; prohibit
purchasing securities in initial public offerings; and prohibit taking
profits on securities held for less than sixty days. Violations of the
codes are subject to review by the Trustees, and could result in severe
penalties.
DISTRIBUTION OF TRUST SHARES
Edward D. Jones & Co. 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 Services
Company, 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, Edward D. Jones &
Co. 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.
State securities laws may require certain financial institutions such as
depository institutions to register as dealers.
SHAREHOLDER SERVICES AGREEMENT. Edward D. Jones & Co. has entered 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, Edward D. Jones & Co. 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 & Co. 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 Services Company, a subsidiary of Federated
Investors, provides administrative personnel and services (including certain
legal and financial reporting services) necessary to operate the Trust.
Federated Services Company provides these at an annual rate which relates to the
average aggregate daily net assets of all Federated Funds.
<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 Services Company may choose voluntarily to waive a portion of its fee.
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.
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 total return, 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.
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, advertisements for 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 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- -------------- ------------------------------------------------------------------------------ ----------------
SHORT-TERM OBLIGATIONS--31.3%
- ----------------------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK NOTES--1.4%
------------------------------------------------------------------------------
$ 54,100,000 6.01%-6.05%, 6/3/1996-6/5/1996 $ 54,112,992
------------------------------------------------------------------------------ ----------------
FEDERAL HOME LOAN BANK, FLOATING RATE NOTES--3.7%
------------------------------------------------------------------------------
148,000,000 (a) 6.125%-6.20%, 3/1/1996 147,961,735
------------------------------------------------------------------------------ ----------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION NOTES--3.1%
------------------------------------------------------------------------------
124,300,000 5.41%-5.91%, 6/12/1996-12/6/1996 124,228,013
------------------------------------------------------------------------------ ----------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--5.7%
------------------------------------------------------------------------------
229,605,000 (b) 5.16%-5.95%, 3/6/1996-11/20/1996 225,286,698
------------------------------------------------------------------------------ ----------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTES--2.2%
------------------------------------------------------------------------------
85,700,000 (a) 4.94%-6.40%, 3/1/1996-3/5/1996 85,641,321
------------------------------------------------------------------------------ ----------------
STUDENT LOAN MARKETING ASSOCIATION, FLOATING RATE NOTES--1.7%
------------------------------------------------------------------------------
68,000,000 (a) 5.14%-5.24%, 3/5/1996 67,981,627
------------------------------------------------------------------------------ ----------------
U.S. TREASURY BILLS--4.1%
------------------------------------------------------------------------------
165,000,000 (b)4.99%-5.57%, 6/27/1996-3/6/1997 159,085,304
------------------------------------------------------------------------------ ----------------
U.S. TREASURY NOTES--9.4%
------------------------------------------------------------------------------
368,000,000 4.375%-8.00%, 5/15/1996-12/31/1996 371,702,412
------------------------------------------------------------------------------ ----------------
TOTAL SHORT-TERM OBLIGATIONS 1,236,000,102
------------------------------------------------------------------------------ ----------------
(C)REPURCHASE AGREEMENTS--69.5%
- ----------------------------------------------------------------------------------------------
100,000,000 Aubrey G. Lanston and Company, Inc., 5.420%, dated 2/29/1996, due 3/1/1996 100,000,000
------------------------------------------------------------------------------
75,000,000 Bear, Stearns & Co., Inc., 5.400%, dated 2/29/1996, due 3/1/1996 75,000,000
------------------------------------------------------------------------------
169,800,000 BZW Securities, Inc., 5.450%, dated 2/29/1996, due 3/1/1996 169,800,000
------------------------------------------------------------------------------
100,000,000 CIBC Wood Gundy Securities Corp., 5.450%, dated 2/29/1996, due 3/1/1996 100,000,000
------------------------------------------------------------------------------
195,000,000 Chemical Securities, Inc., 5.400%, dated 2/29/1996, due 3/1/1996 195,000,000
------------------------------------------------------------------------------
</TABLE>
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- -------------- ------------------------------------------------------------------------------ ----------------
(C)REPURCHASE AGREEMENTS--CONTINUED
- ----------------------------------------------------------------------------------------------
$ 190,000,000 Daiwa Securities America, Inc., 5.430%, dated 2/29/1996, due
3/1/1996 $ 190,000,000
------------------------------------------------------------------------------
190,000,000 Deutsche Bank Government Securities, Inc., 5.450%, dated
2/29/1996, due 3/1/1996 190,000,000
------------------------------------------------------------------------------
100,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 5.450%, dated
2/29/1996, due 3/1/1996 100,000,000
------------------------------------------------------------------------------
75,000,000 Dresdner Securities (USA), Inc., 5.430%, dated 2/29/1996, due
3/1/1996 75,000,000
------------------------------------------------------------------------------
115,000,000 First Chicago Capital Markets, Inc., 5.420%, dated 2/29/1996, due 3/1/1996 115,000,000
------------------------------------------------------------------------------
190,000,000 Goldman, Sachs & Co., 5.430%, dated 2/29/1996, due 3/1/1996 190,000,000
------------------------------------------------------------------------------
50,000,000 HSBC Securities, Inc., 5.470%, dated 2/29/1996, due 3/1/1996 50,000,000
------------------------------------------------------------------------------
190,000,000 J.P. Morgan & Co., Inc., 5.430%, dated 2/29/1996, due 3/1/1996 190,000,000
------------------------------------------------------------------------------
96,000,000 Morgan Stanley & Co., Inc., 5.220%, dated 2/21/1996, due
3/1/1996 96,000,000
------------------------------------------------------------------------------
100,000,000 NationsBank Corp., 5.450%, dated 2/29/1996, due 3/1/1996 100,000,000
------------------------------------------------------------------------------
145,000,000 Nomura Securities International, Inc., 5.450%, dated 2/29/1996, due 3/1/1996 145,000,000
------------------------------------------------------------------------------
190,000,000 Swiss Bank Corp., New York, 5.450%, dated 2/29/1996, due
3/1/1996 190,000,000
------------------------------------------------------------------------------
110,000,000 Swiss Bank Corp., New York, 5.470%, dated 2/29/1996, due
3/1/1996 110,000,000
------------------------------------------------------------------------------
150,000,000 UBS Securities, Inc., 5.400%, dated 2/29/1996, due 3/1/1996 150,000,000
------------------------------------------------------------------------------
75,000,000 UBS Securities, Inc., 5.470%, dated 2/29/1996, due 3/1/1996 75,000,000
------------------------------------------------------------------------------
140,000,000 (d) CS First Boston Corp., 5.290%, dated 2/2/1996, due 3/29/1996 140,000,000
------------------------------------------------------------------------------ ----------------
TOTAL REPURCHASE AGREEMENTS 2,745,800,000
------------------------------------------------------------------------------ ----------------
TOTAL INVESTMENTS, AT AMORTIZED COST(E) $ 3,981,800,102
------------------------------------------------------------------------------ ----------------
</TABLE>
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
- --------------------------------------------------------------------------------
(a) Floating rate note with current rate and next reset date shown.
(b) Discount rate at time of purchase.
(c) The 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 the repurchase agreements are through
participation in joint accounts with other Federated funds.
(d) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($3,951,154,791) at February 29, 1996.
(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 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------------------------------------
Investments in repurchase agreements $ 2,745,800,000
- -----------------------------------------------------------------------------
Investments in securities 1,236,000,102
- ----------------------------------------------------------------------------- ----------------
Total investments in securities, at amortized cost and value $ 3,981,800,102
- -----------------------------------------------------------------------------------------------
Income receivable 14,166,060
- -----------------------------------------------------------------------------------------------
Receivable for shares sold 59,332,701
- ----------------------------------------------------------------------------------------------- ----------------
Total assets 4,055,298,863
- -----------------------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------------------
Payable for investments purchased $ 72,565,544
- -----------------------------------------------------------------------------
Payable for shares redeemed 25,534,311
- -----------------------------------------------------------------------------
Income distribution payable 4,269,006
- -----------------------------------------------------------------------------
Payable to Bank 94,375
- -----------------------------------------------------------------------------
Accrued expenses 1,680,836
- ----------------------------------------------------------------------------- ----------------
Total liabilities 104,144,072
- ----------------------------------------------------------------------------------------------- ----------------
NET ASSETS for 3,951,154,791 shares outstanding $ 3,951,154,791
- ----------------------------------------------------------------------------------------------- ----------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
$3,951,154,791 / 3,951,154,791 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 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------------------
Interest $ 188,131,062
- -------------------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------------------
Investment advisory fee $ 14,050,499
- ----------------------------------------------------------------------------------
Administrative personnel and services fee 2,421,597
- ----------------------------------------------------------------------------------
Custodian fees 453,334
- ----------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 4,346,464
- ----------------------------------------------------------------------------------
Directors'/Trustees' fees 13,208
- ----------------------------------------------------------------------------------
Auditing fees 15,006
- ----------------------------------------------------------------------------------
Legal fees 7,272
- ----------------------------------------------------------------------------------
Portfolio accounting fees 125,329
- ----------------------------------------------------------------------------------
Shareholder services fee 8,000,312
- ----------------------------------------------------------------------------------
Share registration costs 593,346
- ----------------------------------------------------------------------------------
Printing and postage 508,168
- ----------------------------------------------------------------------------------
Insurance premiums 38,836
- ----------------------------------------------------------------------------------
Taxes 5,050
- ----------------------------------------------------------------------------------
Miscellaneous 47,608
- ---------------------------------------------------------------------------------- -------------
Total expenses 30,626,029
- ------------------------------------------------------------------------------------------------- --------------
Net investment income $ 157,505,033
- ------------------------------------------------------------------------------------------------- --------------
</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>
<CAPTION>
Year Ended February 28 or 29,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------------------
Net investment income $ 157,505,033 $ 81,047,463
- -------------------------------------------------------------------------- ------------------ -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------------------
Distributions from net investment income (157,505,033) (81,047,463)
- -------------------------------------------------------------------------- ------------------ -----------------
SHARE TRANSACTIONS--
- --------------------------------------------------------------------------
Proceeds from sale of shares 14,038,245,342 10,047,201,714
- --------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of distributions declared 153,374,221 78,525,018
- --------------------------------------------------------------------------
Cost of shares redeemed (12,704,724,272) (9,832,691,748)
- -------------------------------------------------------------------------- ------------------ -----------------
Change in net assets resulting from share transactions 1,486,895,291 293,034,984
- -------------------------------------------------------------------------- ------------------ -----------------
Change in net assets 1,486,895,291 293,034,984
- --------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------
Beginning of period 2,464,259,500 2,171,224,516
- -------------------------------------------------------------------------- ------------------ -----------------
End of period $ 3,951,154,791 $ 2,464,259,500
- -------------------------------------------------------------------------- ------------------ -----------------
</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 29, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION
Edward D. Jones & Co. Daily Passport Cash Trust (the "Trust") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Trust's objective is to
obtain stability of principal and current income consistent with stability of
principal by investing in a portfolio of money market instruments maturing in
one year or less.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Trust uses the amortized cost method to value
its portfolio securities in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Trust to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. 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 repurchase 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 the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"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").
Distributions 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.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
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
February 29, 1996, capital paid-in aggregated $3,951,154,791 Transactions in
shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
FEBRUARY 28 OR 29,
1996 1995
<S> <C> <C>
Shares sold 14,038,245,342 10,047,201,714
- ----------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 153,374,221 78,525,018
- ----------------------------------------------------------------------------
Shares redeemed (12,704,724,272) (9,832,691,748)
- ---------------------------------------------------------------------------- ----------------- ----------------
Net change resulting from share transactions 1,486,895,291 293,034,984
- ---------------------------------------------------------------------------- ----------------- ----------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Passport Research Ltd., the Trust's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory fee
based on average daily net assets of the Trust as follows: 0.50% on the first
$500 million, 0.475% on the next $500 million, 0.45% on the next $500 million,
0.425% on the next $500 million and 0.40% thereafter. The Adviser will waive the
amount that normal operating expenses of the Trust (including the investment
advisory fee, but excluding brokerage commissions, interest, taxes and
extraordinary expenses) exceed 2.5% per year on the first $30 million of average
daily net assets of the Trust, 2% per year on the next $70 million of average
daily net assets of the Trust, and 1.5% per year on any additional net assets.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all 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 shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Trust will pay FSS up to 0.25%
of daily average net assets of the Trust shares for the period. The fee paid to
FSS is used to finance certain services for shareholders and to maintain
shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--FServ, through its registered
transfer and dividend disbursing agent, Federated Shareholder Services Company,
maintains all necessary shareholder records and receives a fee based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Trust's accounting records for
which it receives a fee. The fee is based on the level of the Trust's average
daily net assets for the period, plus out-of-pocket expenses.
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, including
the portfolios of investments, of Edward D. Jones & Co. Daily Passport Cash
Trust as of February 29, 1996, 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 for each of the ten
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
February 29, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Edward
D. Jones & Co. Daily Passport Cash Trust at February 29, 1996, and the results
of its operations for the year then ended, 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 generally accepted
accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
April 12, 1996
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Edward D. Jones & Co.
Daily Passport Cash Trust Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Principal Distributor
Edward D. Jones & Co. 201 Progress Parkway
Maryland Heights, Missouri 63043
- ---------------------------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Investment Adviser
Passport Research, Ltd. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 1800
Boston, Massachusetts 02266-8600
- ---------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
EDWARD D. JONES & CO.
DAILY PASSPORT CASH TRUST
PROSPECTUS
Prospectus dated April 30, 1996
EDWARD D. JONES & CO.
201 PROGRESS PARKWAY
MARYLAND HEIGHTS, MISSOURI 63043
1-800-331-2451
DISTRIBUTOR
Cusip 480023100
