PRESIDENT'S MESSAGE
Dear Fellow Shareholder:
Edward D. Jones & Co. Daily Passport Cash Trust was established in 1980, and
I am pleased to present its 19th Semi-Annual Report. This report covers the
six-month period from March 1, 1998 through August 31, 1998. It begins with
an interview with portfolio manager Susan R. Hill, Vice President of Passport
Research, Ltd., and continues with a complete list of the Trust's holdings
and financial statements.
As the keystone of the Full Service Account, the Trust is in its 19th year of
serving Edward Jones clients. As of August 31, 1998, more than $6.4 billion in
shareholders' ready cash is earning income every day from the Trust's
portfolio of short-term U.S. government securities. This money market Trust
has provided stability of principal, competitive daily interest rates and
daily access to your money.*
During the six-month reporting period ended August 31, 1998, the Trust paid
dividends to shareholders totaling $0.02 per share. On the last day of the
period, the 7-day net yield was 4.75% and the 7-day effective yield was
4.87%.**
Thank you for keeping your ready cash working through Edward D. Jones & Co.
Daily Passport Cash Trust. As always, we welcome your questions and comments.
Sincerely,
[Graphic]
Richard B. Fisher
President
October 15, 1998
* An investment in the Trust is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the Trust seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Trust.
** Performance quoted represents past performance and is not indicative of
future results. Yield will vary. Yields quoted for money market funds most
closely reflect the Trust's current earnings.
INVESTMENT REVIEW
[Graphic]
Susan R. Hill
Vice President
Passport Research, Ltd.
Q How did the short-term marketplace respond to the economic environment
during the six-month reporting period ended August 31, 1998?
A For much of the semi-annual reporting period, economic fundamentals were
the driving factor behind movements in short-term interest rates. With
economic growth still strong--albeit slowing from its torrid 5.50% pace in the
first quarter--market participants were content with the idea that the Federal
Reserve Board (the "Fed") would remain on the sidelines. The anticipated drag
on the U.S. economy resulting from the economic crises in Asia became
apparent--particularly in the manufacturing sector--over the second quarter of
1998. This slowdown lent comfort to investors that economic growth would not
be so robust as to ignite inflationary pressures.
By the third quarter of 1998, however, a dramatic shift in market sentiment
was evident. Uncertainty in the world economies resulted in vulnerability in
our domestic equity market, and led to a substantial flight-to-quality to
U.S. Treasury securities across the yield curve. Economic trouble spread to
include Russia and Latin America, and what had been perceived to have been a
fairly modest drag on the U.S. economies as a result of the remote Asian
crisis now became an overpowering influence on the market and expectations
regarding future U.S. growth. Although economic fundamentals still remained
fairly positive in this environment, fear dominated market sentiment over
this period.
The huge flight-to-quality resulting from investors--both abroad and at
home--seeking a safe haven from all of the uncertainty was most evident in
the Treasury bill market. The yield on the 1-year Treasury bill opened the
period at 5.40% in early March, and then traded within a range of 5.30% to
5.40% for a number of months. By late July, however, the market concerns
became overwhelming, and the yield declined sharply over the ensuing weeks
to end the period at close to 4.80%. A general shortage in supply of
Treasury bills because of improvement in the overall U.S. budget picture
exacerbated the decline in rates.
The government agency market was more reflective of underlying economic
fundamentals over the period and had significantly less of a flight-to-
quality influence. The yield on the 1-year agency discount note began the
period at 5.50%, and traded between 5.50% and 5.65% for much of the period.
In early August, however, yields in this sector began to decline as well, and
the yield on this security dropped to 5.40% by the end of August.
Q What strategies guided the Trust during the six-month reporting period?
A We maintained our 35-45 day average maturity target range, which was
consistent with our expectations for stable monetary policy over the period.
We added to our term repurchase agreement position over the period, as this
investment offered incremental yield advantage relative to overnight
investments. We also concentrated our purchases of securities in
U.S. government agencies rather than Treasuries, due to the very expensive
nature of the U.S. Treasury market.
Q We have recently experienced slight easing, or cuts in rates, by the Fed.
What do you see ahead for short-term rates?
A Expectations regarding the direction of the next change in monetary policy
did an abrupt about-face over the reporting period. With economic growth
quite strong early in the period, the Fed adopted a tightening bias in March,
a reflection of their underlying concern about inflationary pressures. By
August, as the now-released minutes of the Federal Open Market Committee
("FOMC") meeting at that time indicated, the Fed had removed its tightening
bias as Fed officials perceived that the risks to the economy had become more
balanced. By late August, however, market expectations that the Fed might
eventually need to ease monetary policy to help the U.S. economy along as a
result of the world economic struggles had begun to grow. This expectation
intensified throughout September and culminated in two back-to-back 25 basis
points eases by the Fed on September 25, 1998 and October 15, 1998, bringing
the Federal Funds Target Rate down to 5.00%. The Fed also lowered the
discount rate by 25 basis points on October 15, 1998.
Although such a quick turnaround in monetary policy is highly unusual and
very difficult to have foreseen, the significant uncertainty regarding the
outlook for our own--and other--economies warranted the sudden shift. At this
point, we would expect the Fed to take more easing steps before the end of
the year unless circumstances stabilize. In spite of our expectations for a
lower Fed Funds Target Rate, both the short-term Treasury market and the
U.S. government agency market remain at expensive levels. The flight-to-
quality that claimed the Treasury market over the recent period has spread to
a certain extent to agency securities as well.
PORTFOLIO OF INVESTMENTS
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
AUGUST 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
GOVERNMENT AGENCIES--36.0%
<S> <C> <C>
$ 31,000,000 (a)Federal Farm Credit System Floating Rate Notes, 5.456%, 10/1/1998 $ 30,985,779
72,500,000 Federal Farm Credit System Notes, 5.500% - 5.700%, 9/2/1998 - 4/1/1999 72,466,360
43,301,000 (b)Federal Home Loan Bank System Discount Notes, 5.390%, 11/2/1998 - 11/12/1998 42,863,443
182,000,000 (a)Federal Home Loan Bank System Floating Rate Notes, 5.490% - 5.545%,
9/1/1998 - 9/2/1998 181,924,927
198,000,000 Federal Home Loan Bank System Notes, 5.500% - 5.705%, 10/23/1998 - 7/6/1999 197,923,963
100,000,000 (b)Federal Home Loan Mortgage Corp. Discount Notes, 5.350% - 5.380%,
9/30/1998 - 12/2/1998 99,155,724
300,000,000 (a)Federal Home Loan Mortgage Corp. Floating Rate Notes,5.438% - 5.468%,
9/18/1998 - 11/17/1998 299,823,694
94,500,000 Federal Home Loan Mortgage Corp. Notes, 5.544% - 5.605%, 3/12/1999 - 8/13/1999 94,455,666
498,242,000 (b)Federal National Mortgage Association Discount Notes, 5.300% - 5.450%,
9/17/1998 - 1/4/1999 492,660,065
522,500,000 (a)Federal National Mortgage Association Floating Rate Notes, 5.435% - 5.550%,
9/1/1998 - 11/28/1998 522,348,351
187,000,000 Federal National Mortgage Association Notes, 5.360% - 5.650%, 2/19/1999 - 8/9/1999 186,882,221
32,000,000 (a)Student Loan Marketing Association Floating Rate Notes, 5.550%, 9/1/1998 31,997,582
73,275,000 Student Loan Marketing Association Notes, 5.580% - 5.830%, 10/29/1998 - 3/11/1999 73,270,295
TOTAL GOVERNMENT AGENCIES 2,326,758,070
(C)REPURCHASE AGREEMENTS--63.4%
215,000,000 ABN AMRO Chicago Corp., 5.850%, dated 8/31/1998, due 9/1/1998 215,000,000
260,000,000 BT Securities Corp., 5.850%, dated 8/31/1998, due 9/1/1998 260,000,000
205,000,000 Bear, Stearns and Co., 5.850%, dated 8/31/1998, due 9/1/1998 205,000,000
75,000,000 (d)Chase Government Securities, Inc., 5.550%, dated 8/27/1998, due 9/28/1998 75,000,000
192,000,000 Credit Suisse First Boston, Inc., 5.800%, dated 8/31/1998, due 9/1/1998 192,000,000
103,600,000 Deutsche Bank Government Securities, Inc., 5.800%, dated 8/31/1998, due 9/1/1998 103,600,000
192,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 5.780%, dated 8/31/1998, due 9/1/1998 192,000,000
110,000,000 (d)Goldman Sachs Group, LP, 5.530%, dated 8/18/1998, due 9/21/1998 110,000,000
115,000,000 (d)Goldman Sachs Group, LP, 5.540%, dated 8/21/1998, due 9/21/1998 115,000,000
95,000,000 (d)Goldman Sachs Group, LP, 5.550%, dated 7/14/1998, due 10/13/1998 95,000,000
250,000,000 Greenwich Capital Markets, Inc., 5.850%, dated 8/31/1998, due 9/1/1998 250,000,000
250,000,000 HSBC Securities, Inc., 5.850%, dated 8/31/1998, due 9/1/1998 250,000,000
</TABLE>
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(C)REPURCHASE AGREEMENTS--CONTINUED
<S> <C> <C>
$ 100,000,000 (d)J.P. Morgan & Co., Inc., 5.550%, dated 7/6/1998, due 10/5/1998 $ 100,000,000
200,000,000 (d)Lehman Brothers, Inc., 5.540%, dated 7/9/1998, due 9/8/1998 200,000,000
50,000,000 (d)Merrill Lynch & Co., 5.560%, dated 8/11/1998, due 11/19/1998 50,000,000
250,000,000 (d)Morgan Stanley Group, Inc., 5.550%, dated 8/11/1998, due 10/13/1998 250,000,000
100,000,000 (d)Morgan Stanley Group, Inc., 5.550%, dated 8/6/1998, due 10/7/1998 100,000,000
230,000,000 NationsBank Capital Markets, 5.850%, dated 8/31/1998, due 9/1/1998 230,000,000
225,000,000 Paribas Corp., 5.850%, dated 8/31/1998, due 9/1/1998 225,000,000
225,000,000 Prudential Securities, Inc., 5.850%, dated 8/31/1998, due 9/1/1998 225,000,000
200,000,000 Salomon Smith Barney, 5.850%, dated 8/31/1998, due 9/1/1998 200,000,000
227,000,000 Societe Generale Securities Corp., 5.780%, dated 8/31/1998, due 9/1/1998 227,000,000
90,000,000 (d)Warburg Dillon Reed LLC, 5.530%, dated 8/14/1998, due 9/11/1998 90,000,000
140,000,000 (d)Warburg Dillon Reed LLC, 5.550%, dated 7/7/1998, due 10/5/1998 140,000,000
TOTAL REPURCHASE AGREEMENTS 4,099,600,000
U.S. TREASURY--0.3%
22,000,000 United States Treasury Notes, 5.875%, 1/31/1999 22,028,598
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $6,448,386,668
</TABLE>
(a) 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 acocunts 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.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($6,468,344,188) at August 31, 1998.
The following acronyms are used throughout this portfolio:
LLC--Limited Liability Corporation
LP --Limited Partnership
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
AUGUST 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $4,099,600,000
Investments in securities 2,348,786,668
Total investments in securities, at amortized cost and value $6,448,386,668
Cash 10,511,076
Income receivable 22,315,639
Total assets 6,481,213,383
LIABILITIES:
Income distribution payable 9,277,339
Accrued expenses 3,591,856
Total liabilities 12,869,195
NET ASSETS for 6,468,344,188 shares outstanding $6,468,344,188
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
$6,468,344,188 / 6,468,344,188 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
SIX MONTHS ENDED AUGUST 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $175,035,854
EXPENSES:
Investment advisory fee $13,113,507 Administrative personnel and services fee
2,353,115 Custodian fees 88,169 Transfer and dividend disbursing agent fees and
expenses 3,078,508 Directors'/Trustees' fees 31,487 Auditing fees 9,185 Legal
fees 8,556 Portfolio accounting fees 222,671 Shareholder services fee 7,802,106
Share registration costs 211,632 Printing and postage 223,414 Insurance premiums
16,598 Taxes 2,635 Miscellaneous 17,245 Total expenses 27,178,828 Net investment
income $147,857,026 </TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
AUGUST 31, 1998 FEBRUARY 28, 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 147,857,026 $ 243,084,072
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (147,857,026) (243,084,072)
SHARE TRANSACTIONS--
Proceeds from sale of shares 13,385,593,050 20,818,466,418
Net asset value of shares issued to shareholders in payment of distributions declared 141,000,103 239,671,111
Cost of shares redeemed (12,863,683,327) (20,012,723,131)
Change in net assets resulting from share transactions 662,909,826 1,045,414,398
Change in net assets 662,909,826 1,045,414,398
NET ASSETS:
Beginning of period 5,805,434,362 4,760,019,964
End of period $ 6,468,344,188 $ 5,805,434,362
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
AUGUST 31, YEAR ENDED FEBRUARY 28 OR 29,
1998 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.05 0.04 0.05 0.04 0.02
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.05) (0.04) (0.05) (0.04) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 2.42% 4.84% 4.59% 5.06% 3.78% 2.33%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.87%* 0.89% 0.89% 0.96% 0.98% 0.95%
Net investment income 4.74%* 4.72% 4.49% 4.92% 3.74% 2.31%
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $6,468,344 $5,805,434 $4,760,020 $3,951,155 $2,464,260 $2,171,225
</TABLE>
* Computed on an annualized basis.
(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)
NOTES TO FINANCIAL STATEMENTS
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
AUGUST 31, 1998 (UNAUDITED)
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 investment
objective of the Trust is stability of principal and current income
consistent with stability of principal.
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.
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
August 31, 1998, capital paid-in aggregated $6,468,344,188. Transactions in
shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28,
1998 1998
<S> <C> <C>
Shares sold 13,385,593,050 20,818,466,418
Shares issued to shareholders in payment of distributions declared 141,000,103 239,671,111
Shares redeemed (12,863,683,327) (20,012,723,131)
Net change resulting from share transactions 662,909,826 1,045,414,398
</TABLE>
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: 0.500% on the first $500 million,
0.475% on the next $500 million, 0.450% on the next $500 million, and 0.425%
on the next $500 million and 0.400% 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
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 Federal Investors, Inc. 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 average
daily 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 AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES FServ, through its
subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the Trust. The
fee paid to FSSC is 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.
YEAR 2000
Similar to other financial organizations, the Trust could be adversely
affected if the computer systems used by the Trust's service providers do not
properly process and calculate date-related information and data from and
after January 1, 2000. The Trust's Adviser and Administrator are taking
measures that they believe are reasonably designed to address the Year 2000
issue with respect to computer systems that they use and to obtain reasonable
assurances that comparable steps are being taken by each of the Trust's other
service providers. At this time, however, there can be no assurance that
these steps will be sufficient to avoid any adverse impact to the Trust.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd, Esq.
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr., Esq.
Peter E. Madden
John E. Murray, Jr., J.D., S.J.D.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Richard B. Fisher
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Matthew S. Hardin
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the trust's prospectus which contains facts
concerning its objective and policies, management fees, expenses, and other
information.
[Graphic]
DAILY PASSPORT CASH TRUST
SEMI-ANNUAL REPORT
AUGUST 31, 1998
Edward Jones
201 Progress Parkway
Maryland Heights, MO 63043
1-800-331-2451
Distributor
[Graphic]
Cusip 480023100
8092605 (10/98)
