ANNUAL REPORT
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[LOGO] NvestFunds(SM)
Where The Best Minds Meet(R)
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Nvest Money Market Funds
Where
The Best
Minds Meet(R)
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Annual Report -- June 30, 2000
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<PAGE>
PRESIDENT'S MESSAGE
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August 2000
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[PHOTO]
"No matter how you react to shifting markets, don't let short-term events derail
your long-range program. Consult your financial representative before you make
any changes."
In an effort to protect the U.S. economy from the specter of renewed inflation,
the Federal Reserve Board has raised interest rates six times in the past 12
months -- three times during the first six months of 2000. Because higher
interest rates cut into corporate profits and make financial assets less
attractive, the markets have been undergoing a period of heightened volatility.
Your choice of investment tools
Investors react to volatility in different ways. Some seek safer harbors; others
define risk as opportunity and add selectively to their portfolios. Regardless
of which type of investor you may resemble, remember that Nvest funds cover a
wide spectrum of investments, from conservative to aggressive. These include a
comprehensive family of equity and fixed-income funds that may complement your
current holdings, as well as funds that combine different investment styles in a
single portfolio.
For example, Nvest Star funds' multi-manager approach can help you through
periods of market volatility by offering you greater diversification than
single-manager funds. Each Nvest Star fund is composed of four separate segments
run by managers with distinct investment disciplines -- a strategy that allows
investors to benefit from different investment styles and diversified portfolio
holdings, seeking superior long-term results with reduced risk. We search for
the strongest candidates to manage each segment, using approaches that
complement one another in varying market conditions.
No matter how you react to shifting markets, don't let short-term events derail
your long-range program. Consult your financial representative before you make
any changes.
Nvest is poised for global growth
As you may know, Nvest Companies is under agreement to be acquired by CDC Asset
Management, a leading French institutional money management company and a major
global financial institution. CDC's expertise in European stock and bond markets
will be a resource for the premier U.S. investment management teams who manage
our funds. Nvest Funds will continue to operate independently, but with broader
resources to bring you attractive, innovative products and services. Since your
vote will be required, you will receive proxy information in September. In the
meantime, if you would like more information, you are welcome to call your
financial representative or us, or visit our web site, www.nvestfunds.com.
/s/ John T. Hailer
John T. Hailer
President and Chief Executive Officer
Nvest Funds
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INVESTMENT IN THE FUNDS IS NOT FDIC INSURED NOR GUARANTEED
BY A BANK AND MAY LOSE VALUE
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Annual Report
<PAGE>
NVEST MONEY MARKET FUNDS
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Annualized Seven-Day Yields -- 6/30/00
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<TABLE>
<S> <C> <C>
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Class A, B & C Class Y
Nvest Cash Management Trust -- Money Market Series 5.76% 6.11%
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Class A & B
Nvest Tax Exempt Money Market Trust 3.77%
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</TABLE>
Yields will fluctuate with changes in market conditions.
The seven-day money market yield reflects the Funds' current earnings more
closely than total return.
Average Annual Total Returns -- 6/30/00
Nvest Cash Management Trust -- Money Market Series
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<TABLE>
<S> <C> <C> <C>
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Class A 1 Year 5 Years 10 Years
Net Asset Value(1) 5.10% 4.87% 4.63%
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Class B (Inception 9/13/93) 1 Year 5 Years Since Inception
Net Asset Value(1) 5.10% 4.88% 4.61%
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Class C (Inception 3/1/98) 1 Year Since Inception
Net Asset Value(1) 5.10% 4.86%
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Class Y (Inception 2/27/98) 1 Year Since Inception
Net Asset Value(1) 5.00% 4.80%
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</TABLE>
Nvest Tax Exempt Money Market Trust
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<TABLE>
<S> <C> <C> <C>
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Class A 1 Year 5 Years 10 Years
Net Asset Value(1) 3.13% 3.15% 3.15%
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Class B (Inception 9/13/93) 1 Year 5 Years Since Inception
Net Asset Value(1) 3.13% 3.15% 3.08%
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</TABLE>
(1) These returns include reinvestment of distributions, represent past
performance and do not predict future results.
Class Y shares are only available to certain institutional investors.
Annual Report -- 1
<PAGE>
NVEST MONEY MARKET FUNDS
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Economic Summary
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Robust economic growth and rising interest rates continued to impact the money
markets over the past 12 months. Solid retail and vehicle sales, as well as a
vigorous housing market and glowing industrial sales, were testimony to the
economy's strength. In addition, employment and income growth delivered healthy
gains throughout the year.
Concerned that the high rate of economic growth might be unhealthy and lead to
inflation, the Federal Reserve Board began a steady program of tightening
monetary policy by raising key short-term interest rates. The Fed's goal was a
"soft landing" -- to slow the economy just enough to moderate growth and curb
inflation yet not enough to cripple economic activity. To do so, the Fed
implemented a series of interest rate hikes, totaling 1.75%, since June 1999.
Despite the Federal Reserve's efforts, the economy may not have slowed as much
as Chairman Greenspan would like. However, it typically takes at least a year
for changes in money rates to affect the economy. Although many financial
experts believe that growth has remained strong enough that the Federal Reserve
might raise interest rates several more times through the remainder of the year,
we believe the economy should show some signs of slowing later this
summer.
Interview with Your Portfolio Managers
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Nvest Cash Management Trust
[PHOTO] [PHOTO]
John Maloney J. Scott Nicholson
Back Bay Advisors, L.P. Back Bay Advisors, L.P.
Q. How did Nvest Cash Management Trust perform over the past 12 months?
During the period, Nvest Cash Management Trust provided a strong total return
while maintaining a constant $1 share price. For the 12 months ended June 30,
2000, Class A shares of the Fund returned 5.10% at net asset value, which
included $0.0498 per share in reinvested dividends. The Fund's seven-day yield
as of that date was 5.76%.
Q. What was your strategy?
Mid-way through the Fund's fiscal year, in December, as the market experienced
year-end pressure due to Y2K concerns, we took the opportunity to pick up
additional yield by extending the Fund's maturities into the year 2000. When we
expect interest rates to rise we typically shorten the Fund's average maturity
so that issues coming due can be reinvested at higher rates. Consequently, in
response to an increase in Fed activity during the first quarter of 2000, we
shortened the Fund's average maturity to 39 days. However, as economic growth
began to moderate during the second quarter of this year -- and it appeared that
the Fed might be near the end of its tightening cycle -- we extended the Fund's
average maturity to 75 days to lock in higher yields.
Q. What is your outlook?
We will continue to keep a watchful eye on economic data, and adjust our
strategy accordingly. Although the economy has begun to show some signs of
slowing, the threat of inflation lingers and the possibility of additional rate
hikes remains.
Portfolio Composition as of 6/30/2000
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Commercial Paper 66.0%
Certificates of Deposit 17.3%
Certificates of Deposit (Euro) 12.6%
Bank Notes & Other 4.1%
Portfolio allocation is subject to change.
2 -- Annual Report
<PAGE>
NVEST MONEY MARKET FUNDS
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[PHOTO] [PHOTO]
John Maloney J. Scott Nicholson
Back Bay Advisors, L.P. Back Bay Advisors, L.P.
Q. How did Nvest Tax Exempt Money Market Trust perform?
Nvest Tax Exempt Money Market Trust provided a solid total return during the
past fiscal year while maintaining a constant $1 share price. For the 12 months
ended June 30, 2000, Class A shares of the Fund returned 3.13%, including
$0.0309 per share in reinvested distributions. The Fund's seven-day yield as of
that date was 3.77%, which is equivalent to a taxable yield of 6.24%, based on
the highest federal tax bracket of 39.6%.
Q. What was your strategy?
The short-term tax-exempt market is affected by both economic, and seasonal
supply and demand, factors. Tax-exempt money market funds are the largest
purchasers of variable rate securities. In December, yields on these securities
typically increase as mutual fund shareholders redeem assets to meet year-end
expenses and for tax-planning purposes. (When supply outstrips demand, prices
typically fall while rates rise.) In April, funds again see an increase in
redemptions as investors need to raise cash to pay their tax bills, causing
yields on variable rate securities to rise. Both in December and in the spring,
we looked for yield opportunities in variable rate securities.
Finally, because fiscal year-end for most municipalities is June 30, the supply
of newly issued, one-year, fixed-rate securities is high, producing a
corresponding increase in yields. During the closing quarter of the Fund's
fiscal year, we emphasized municipal notes, locking in attractive yields. As of
June 30, 2000, the average maturity of Nvest Tax Exempt Money Market Trust was
26 days.
Q. What is your outlook?
Although we appear to be on the verge of an economic slowdown, the Fed may still
raise rates further. We plan to take advantage of any future rate hikes as well
as seasonal factors that present rewarding investment opportunities.
These two funds are not insured or guaranteed by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency. Although both funds seek to
maintain a constant share price of $1, it is possible to lose money by investing
in them.
The portfolio managers' commentary reflects the conditions and actions taken
during the reporting period, which are subject to change. A shift in opinion may
result in strategic and other portfolio changes. Some income may be subject to
federal and state taxes. Capital gains are fully taxable. Investors may be
subject to the Alternative Minimum Tax (AMT).
Annual Report -- 3
<PAGE>
CASH MANAGEMENT TRUST MONEY MARKET SERIES
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Investments as of June 30, 2000
Investments -- 99.8% of Total Net Assets
Principal
Amount Description Value (a)
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CERTIFICATES OF DEPOSIT -- 17.3%
$10,000,000 Toronto Dominion Bank, 6.210%, 7/20/2000 ............ $ 9,999,771
10,000,000 Lloyds Bank PLC New York, 6.250%, 7/24/2000 ......... 9,999,966
5,000,000 UBS AG Stamford, 5.700%, 7/27/2000 .................. 4,999,829
12,500,000 Dresdner Bank AG New York, 5.930%, 8/07/2000 ........ 12,491,092
16,000,000 Deutsche Bank AG New York, 6.750%, 8/22/2000 ........ 16,000,024
15,000,000 Deutsche Bank AG New York, 6.750%, 8/25/2000 ........ 15,000,000
20,000,000 Barclays Bank PLC, 5.900%, 10/02/2000 ............... 19,943,921
20,000,000 Canadian Imperial Bank of Commerce, 7.020%,
11/20/2000 ........................................ 20,001,523
15,000,000 UBS AG Stamford, 6.240%, 12/06/2000 ................. 14,996,288
10,000,000 UBS AG Stamford, 6.450%, 1/02/2001 .................. 9,997,589
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Total Certificates of Deposit (Cost $133,430,003) ... 133,430,003
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CERTIFICATES OF DEPOSIT (EURODOLLARS) -- 12.6%
13,000,000 Bank of Nova Scotia, 6.430%, 9/28/2000 .............. 12,988,156
2,000,000 Dresdner Bank, 6.450%, 10/19/2000 ................... 1,997,608
20,000,000 Commerzbank, 7.030%, 11/20/2000 ..................... 20,000,449
5,000,000 National Westminster Bank PLC, 6.140%, 7/10/2000 .... 4,999,809
12,000,000 Toronto Dominion Bank London, 6.300%, 8/29/2000 ..... 11,990,129
15,000,000 Toronto Dominion Bank London, 6.420%, 9/28/2000 ..... 14,990,489
30,000,000 ABN Amro Bank NV London, 7.010%, 11/22/2000 ......... 30,000,184
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Total Certificates of Deposit (Eurodollars)
(Cost $96,966,824) ................................ 96,966,824
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COMMERCIAL PAPER -- 66.0%
Asset-backed -- 4.9%
15,000,000 Clipper Receivables Corp., 6.160%, 7/10/2000 ........ 14,976,900
10,000,000 Clipper Receivables Corp., 6.160%, 7/17/2000 ........ 9,972,622
5,000,000 Clipper Receivables Corp., 6.170%, 7/27/2000 ........ 4,977,719
8,000,000 Clipper Receivables Corp., 6.650%, 8/14/2000 ........ 7,934,978
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37,862,219
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Automotive -- 12.7%
5,000,000 Ford Motor Credit Corp., 6.510%, 7/05/2000 .......... 4,996,383
5,300,000 Ford Motor Credit Corp., 6.510%, 7/06/2000 .......... 5,295,208
5,000,000 Ford Motor Credit Corp., 6.560%, 7/07/2000 .......... 4,994,533
5,300,000 General Motors Acceptance Corp., 6.170%, 7/20/2000 .. 5,282,741
15,000,000 American Honda Finance Corp., 6.160%, 7/21/2000 ..... 14,948,667
3,000,000 American Honda Finance Corp., 6.170%, 7/24/2000 ..... 2,988,174
4,000,000 General Motors Acceptance Corp., 6.190%, 7/28/2000 .. 3,981,430
5,000,000 General Motors Acceptance Corp., 6.410%, 8/01/2000 .. 4,972,401
6,500,000 American Honda Finance Corp., 6.650%, 8/16/2000 ..... 6,444,768
10,000,000 American Honda Finance Corp., 6.640%, 8/22/2000 ..... 9,904,089
8,000,000 General Motors Acceptance Corp., 6.520%, 8/28/2000 .. 7,915,965
2,000,000 American Honda Finance Corp., 6.600%, 9/07/2000 ..... 1,975,067
10,000,000 Ford Motor Credit Corp. Canada, 6.670%, 9/11/2000 ... 9,866,600
15,000,000 General Motors Acceptance Corp., 6.610%, 10/04/2000 . 14,738,354
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98,304,380
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Banks -- 5.4%
15,000,000 Dresdner US Finance, 6.210%, 7/27/2000 .............. 14,932,725
7,000,000 Svenska Handelsbanken, 6.600%, 9/08/2000 ............ 6,911,450
5,000,000 Dresdner US Finance, 6.600%, 10/19/2000 ............. 4,899,167
15,000,000 Svenska Handelsbanken, 6.770%, 11/27/2000 ........... 14,579,696
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41,323,038
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Finance -- 16.9%
8,400,000 Household Finance Corp., 6.880%, 7/03/2000 .......... 8,396,789
4,000,000 UBS Finance, Inc., 6.960%, 7/03/2000 ................ 3,998,453
15,000,000 Citicorp Yrs, 6.510%, 7/05/2000 ..................... 14,989,150
14,100,000 American Express Credit Corp., 6.500%, 7/07/2000 .... 14,084,725
3,000,000 CIT Group Holdings, Inc., 6.430%, 7/10/2000 ......... 2,995,177
5,000,000 Citicorp, 6.530%, 7/11/2000 ......................... 4,990,931
6,700,000 Citicorp, 6.530%, 7/12/2000 ......................... 6,686,632
7,200,000 Associates Corp. of North America, 6.520%, 7/13/2000 7,184,352
3,000,000 CIT Group Holdings, Inc., 6.150%, 7/13/2000 ......... 2,993,850
10,000,000 Household Finance Corp., Ltd. Canada, 6.250%,
7/20/2000 ......................................... 9,967,014
15,000,000 CIT Group Holdings, Inc., 6.410%, 7/31/2000 ......... 14,919,875
4,300,000 UBS Finance, Inc., 6.600%, 9/05/2000 ................ 4,247,970
20,000,000 Household Finance Corp., 6.610%, 10/10/2000 ......... 19,629,106
10,000,000 CIT Group Holdings, Inc., 6.590%, 10/20/2000 ........ 9,796,808
6,000,000 CIT Group Holdings, Inc., 6.590%, 10/23/2000 ........ 5,874,790
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130,755,622
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Financial Services -- 7.2%
1,200,000 Transamerica Finance Corp., 6.620%, 7/17/2000 ....... 1,196,469
2,500,000 General Electric Capital Corp., 6.190%, 8/15/2000 ... 2,480,656
20,000,000 General Electric Capital Corp., 6.520%, 8/24/2000 ... 19,804,400
19,493,000 Transamerica Finance Corp., 6.650%, 9/08/2000 ....... 19,244,546
3,200,000 General Electric Capital Corp., 6.640%, 10/23/2000 .. 3,132,715
10,000,000 General Electric Capital Corp., 6.760%, 11/30/2000 .. 9,714,578
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55,573,364
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Insurance -- 6.9%
10,000,000 Prudential Funding Corp., 6.520%, 7/06/2000 ......... 9,990,945
7,200,000 Prudential Funding Corp., 6.520%, 7/07/2000 ......... 7,192,176
5,000,000 American General Corp., 6.520%, 8/24/2000 ........... 4,951,100
15,000,000 American General Corp., 6.620%, 10/05/2000 .......... 14,735,200
15,000,000 Prudential Funding Corp., 6.750%, 11/22/2000 ........ 14,595,000
2,000,000 Prudential Funding Corp., 6.750%, 11/27/2000 ........ 1,944,125
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53,408,546
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Securities & Asset Management -- 9.8%
5,000,000 Merrill Lynch & Co., Inc., 6.150%, 7/24/2000 ........ 4,980,354
2,000,000 Merrill Lynch & Co., Inc., 6.170%, 7/24/2000 ........ 1,992,116
5,000,000 Merrill Lynch & Co., Inc., 6.170%, 7/25/2000 ........ 4,979,433
10,000,000 Goldman Sachs Group, Inc., 6.180%, 7/28/2000 ........ 9,953,650
5,000,000 Merrill Lynch & Co., Inc., 6.650%, 8/21/2000 ........ 4,952,896
20,000,000 Merrill Lynch & Co., Inc., 6.650%, 8/23/2000 ........ 19,804,195
10,000,000 Goldman Sachs Group, Inc., 6.370%, 10/06/2000 ....... 9,828,364
7,000,000 Goldman Sachs Group, Inc., 6.510%, 10/06/2000 ....... 6,877,214
5,000,000 Goldman Sachs Group, Inc., 6.520%, 10/06/2000 ....... 4,912,161
1,500,000 J.P. Morgan & Co., 6.600%, 10/11/2000 ............... 1,471,950
6,000,000 Goldman Sachs Group, Inc., 6.630%, 11/01/2000 ....... 5,864,085
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75,616,418
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Telecommunications -- 2.2%
6,150,000 Motorola, Inc., 6.590%, 10/06/2000 .................. 6,040,798
11,200,000 Motorola, Inc., 6.590%, 10/12/2000 .................. 10,988,827
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17,029,625
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Total Commercial Paper (Cost $509,873,212) .......... $ 509,873,212
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BANK NOTES -- 3.9%
10,000,000 J P Morgan (Canada)
6.640%, 3/16/2001 ................................... 10,000,000
20,000,000 First Union National Bank NC, 6.645%, 5/29/2001 ..... 20,000,000
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Total Bank Notes (Cost $30,000,000) ................. 30,000,000
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Total Investments -- 99.8%
(Identified Cost $770,270,039) (b) ................ 770,270,039
Other assets less liabilities ....................... 1,489,891
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Total Net Assets -- 100% ............................ $ 771,759,930
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(a) See Note 1a of Notes to Financial Statements.
(b) The aggregate cost for federal income tax purposes was $770,270,039.
At June 30, 2000, the Fund had a capital loss carryover of approximately
$2,455 which expires on June 30, 2007. This may be available to offset
future realized capital gains, if any, to the extent provided by
regulations.
Percentage of net assets invested in obligations of foreign banks or
branches of U.S. banks at June 30, 2000:
Germany 11.10% Canada 9.10% England 4.50%
Netherlands 3.90% Switzerland 3.90% Sweden 2.80%
4 -- Annual Report
See accompanying notes to financial statements.
<PAGE>
TAX EXEMPT MONEY MARKET TRUST
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Investments as of June 30, 2000
Investments -- 99.7% of Total Net Assets
Principal
Amount Description Value (a)
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Alaska -- 5.0%
$ 345,000 Alaska Industrial Development & Export Authority,
5.300%, (b), 7/01/2001 .............................. $ 345,000
1,170,000 Alaska Industrial Development & Export Authority,
5.300%, (b), 7/01/2003 .............................. 1,170,000
525,000 Alaska Industrial Development & Export Authority,
5.300%, (b), 7/01/2005 .............................. 525,000
340,000 Alaska Industrial Development & Export Authority,
5.300%, (b), 7/01/2007 .............................. 340,000
55,000 Alaska Industrial Development & Export Authority,
5.300%, (b), 7/01/2008 .............................. 55,000
1,145,000 Alaska Industrial Development & Export Authority,
5.300%, (b), 7/01/2012 .............................. 1,145,000
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3,580,000
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Arizona -- 1.4%
1,000,000 Tempe Excise Tax Revenue, 3.750%, 7/01/2000 ........... 1,000,000
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California -- 0.4%
300,000 Los Angeles Regional Airport Lease, 4.550%,
(b), 12/01/2025 ..................................... 300,000
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Colorado -- 6.1%
1,325,000 Denver City & County Airport Revenue, (MBIA insured),
4.800%, 11/15/2000 .................................. 1,327,971
3,050,000 Cherry Creek South Metropolitan District Number 1,
4.850%, (b), 6/01/2006 .............................. 3,050,000
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4,377,971
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District of Columbia -- 0.9%
650,000 District of Columbia, 4.750%, (b), 6/01/2003 .......... 650,000
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Florida -- 13.5%
300,000 Florida State Board of Regents University Improvements,
(FGIC insured), 5.000%, 7/01/2000 ................... 300,000
400,000 Orlando & Orange County Expressway, 7.000%, 7/01/2000 . 408,000
1,200,000 Florida Housing Finance Agency, 4.900%, (b), 4/01/2004 1,200,000
1,595,000 Palm Beach County Industrial Development, 4.950%,
(b), 11/01/2011 ..................................... 1,595,000
1,900,000 Hillsborough County Florida Industrial Development,
4.950%, (b), 12/01/2016 ............................. 1,900,000
900,000 Collier County Industrial Development Authority,
4.700%, (b), 11/01/2019 ............................. 900,000
2,000,000 University Athletic Association, Inc., 4.750%,
(b), 2/01/2020 ...................................... 2,000,000
1,400,000 Gulf Coast University Florida, 4.900%, (b), 8/01/2027 . 1,400,000
-----------
9,703,000
-----------
Hawaii -- 4.6%
3,300,000 Hawaii State Housing Finance & Development Corp.,
5.350%, (b), 7/01/2025 .............................. 3,300,000
-----------
Illinois -- 19.6%
1,070,000 Illinois Health Facilities Auth Rev, (AMBAC insured),
5.000%, 8/15/2000 ................................... 1,070,110
1,000,000 Cook County, Illinois, (MBIA insured), 7.000%,
11/01/2000 .......................................... 1,029,010
1,500,000 Chicago, Illinois, 3.900%, 12/07/2000 ................. 1,500,000
3,300,000 McCook Revenue, 4.800%, (b), 12/01/2021 ............... 3,300,000
3,225,000 Vernon Hills, Illinois, Industrial Development,
4.750%, (b), 4/01/2025 .............................. 3,225,000
2,000,000 Illinois Housing Development Authority, 5.050%,
(b), 5/01/2027 ...................................... 2,000,000
2,000,000 Illinois Educational Facilities Authority
Revenues, 5.000%, (b), 8/15/2027 .................... 2,000,000
-----------
14,124,120
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Kentucky -- 2.2%
1,615,000 Mayfield Multi City Lease, 4.900%, (b), 7/01/2026 ..... 1,615,000
-----------
Massachusetts -- 2.8%
2,000,000 New England Education Loan Marketing Student Loan,
6.200%, 9/01/2000 ................................... 2,007,227
-----------
Michigan -- 2.1%
$ 510,000 Saginaw Hospital Finance Authority Revenue,
(MBIA insured), 4.000%, 7/01/2000 ................... 510,000
$1,000,000 Michigan State Building Authority Revenue,
5.000%, 10/15/2000 .................................. 1,002,386
-----------
1,512,386
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Nebraska -- 3.1%
2,265,000 American Public Energy Agency Gas, (AMBAC insured),
3.600%, 9/01/2000 ................................... 2,263,506
-----------
Nevada -- 1.9%
860,000 Las Vegas Convention & Visitors Authority, (AMBAC
insured), 4.500%, 7/01/2000 ......................... 860,000
500,000 Washoe County School District, (MBIA insured),
5.300%, 8/01/2000 ................................... 500,399
-----------
1,360,399
-----------
Oklahoma -- 2.9%
2,100,000 Claremore, Oklahoma Industrial & Redevelopment
Authority, 4.800%, (b), 1/01/2011 ................... 2,100,000
-----------
Oregon -- 1.1%
765,000 Oregon State Department Administrative Services,
(AMBAC insured), 4.000%, 11/01/2000 ................. 764,856
-----------
Pennsylvania -- 7.0%
3,400,000 Quakertown, Pennsylvania Hospital Authority
Revenue, 4.750%, (b), 7/01/2005 ..................... 3,400,000
1,610,000 Washington County Authority Lease, 4.850%,
(b), 11/01/2005 ..................................... 1,610,000
-----------
5,010,000
-----------
South Carolina -- 1.4%
1,000,000 Berkeley County Water & Sewer Revenue,
(MBIA insured), 7.000%, 6/01/2001 ................... 1,040,904
-----------
Tennessee -- 5.5%
555,000 Maury County Health and Educational Ind Dev Rev,
4.750%, (b), 6/01/2004 .............................. 555,000
3,400,000 Blount County Industrial Development Board,
4.950%, (b), 8/01/2008 .............................. 3,400,000
-----------
3,955,000
-----------
Texas -- 16.9%
3,000,000 Texas, 4.500%, 8/31/2000 .............................. 3,003,866
2,000,000 Texas State Public Finance Authority, 5.000%,
10/01/2000 .......................................... 2,004,640
1,225,000 Nueces County Health Facilities, 4.850%, (b),
7/01/2015 ........................................... 1,225,000
3,440,000 Montgomery County Texas Industrial Development,
4.950%, (b), 8/01/2027 .............................. 3,440,000
2,500,000 San Antonio Airport Systems Revenue, 4.900%,
(b), 4/01/2020 ...................................... 2,500,000
-----------
12,173,506
-----------
Washington -- 1.3%
500,000 Clark County Washington Public Utility District 1,
(FGIC insured), 4.600%, 1/01/2001 ................... 500,000
455,000 Washington Certificates Participation, (AMBAC
insured), 4.750%, 7/01/2001 ......................... 455,000
-----------
955,000
-----------
Total Investments -- 99.7% (Identified Cost
$71,792,875) (c) .................................... 71,792,875
Other assets less liabilities ......................... 191,961
-----------
Total Net Assets -- 100% .............................. $71,984,836
===========
(a) See Note 1a of Notes to Financial Statements.
(b) Floating rate notes are instruments whose interest rates vary with
changes in a designated base rate (such as the prime interest rate) on a
specified date (such as coupon date or interest payment date). These
instruments are payable on demand and are secured by letters of credit or
other credit support agreements from major banks. Maturity dates shown
represent the ultimate maturity of the note.
(c) The aggregate cost for federal income tax purposes was $71,792,875. At
June 30, 2000, the Fund had a capital loss carryover of approximately
$7,652 which expires on June 30, 2007. This may be available to offset
future realized capital gains, if any, to the extent provided by
regulations.
AMBAC American Municipal Bond Assurance Corp.
FGIC Financial Guarantee Insurance Co.
MBIA Municipal Bond Investors Assurance Corp.
Annual Report -- 5
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF ASSETS & LIABILITIES
================================================================================
June 30, 2000
<TABLE>
<CAPTION>
Cash Management Trust Tax Exempt
Money Market Money Market
Series Trust
------------- -------------
<S> <C> <C>
ASSETS
Investments, at value (Identified cost $770,270,039 and $71,792,875, respectively) ........ $ 770,270,039 $ 71,792,875
Cash ...................................................................................... 78,674 0
Receivable for:
Shares of the Trust sold ................................................................ 3,788,720 111,680
Interest ................................................................................ 4,534,101 582,229
------------- -------------
778,671,534 72,486,784
------------- -------------
LIABILITIES
Payable for:
Shares of the Trust redeemed ............................................................ 6,261,243 339,236
Dividends declared ...................................................................... 47,472 0
Custodial bank .......................................................................... 0 7,052
Accrued expenses:
Management fees ....................................................................... 26,311 55,617
Deferred trustees' fees ............................................................... 90,244 37,420
Accounting and administrative ......................................................... 47,500 4,400
Transfer agent ........................................................................ 303,112 21,935
Other expenses ........................................................................ 135,722 36,288
------------- -------------
6,911,604 501,948
------------- -------------
NET ASSETS ................................................................................. $ 771,759,930 $ 71,984,836
============= =============
Net assets consist of:
Paid in capital Class A shares ........................................................ $ 582,242,048 $ 71,420,192
Paid in capital Class B shares ........................................................ 18,771,158 543,651
Paid in capital Class C shares ........................................................ 2,787,656 0
Paid in capital Class Y shares ........................................................ 167,844,001 0
Undistributed net investment income ................................................... 123,397 28,645
Accumulated net realized gains (losses) ............................................... (8,330) (7,652)
------------- -------------
NET ASSETS ................................................................................. $ 771,759,930 $ 71,984,836
============= =============
Shares of beneficial interest outstanding, no par value
Class A shares ........................................................................ 582,242,353 71,462,026
Class B shares ........................................................................ 18,771,162 501,817
Class C shares ........................................................................ 2,787,657 0
Class Y shares ........................................................................ 167,844,001 0
------------- -------------
Shares of beneficial interest outstanding ............................................... 771,645,173 71,963,843
============= =============
Net asset value per share Class A, Class B, Class C, and Class Y shares* ................... $ 1.00 $ 1.00
============= =============
</TABLE>
* Shares of the series are sold and redeemed at net asset value (net assets /
shares of beneficial interest outstanding).
6 -- Annual Report
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
================================================================================
Year Ended June 30, 2000
<TABLE>
<CAPTION>
Cash Management Trust Tax Exempt
Money Market Money Market
Series Trust
------------ ------------
<S> <C> <C>
INVESTMENT INCOME
Interest ......................................................... $ 48,188,657 $ 2,985,140
------------ ------------
Expenses
Management fees ................................................ 3,447,484 318,953
Transfer agent - Class A, Class B, Class C ..................... 2,260,257 138,190
Transfer agent - Class Y ....................................... 180,735 0
Service fees - Class Y ......................................... 406,838 0
Accounting and administrative .................................. 264,886 28,480
Audit and tax services ......................................... 26,009 30,481
Custodian fees ................................................. 156,446 45,866
Legal fees ..................................................... 35,000 3,970
Printing ....................................................... 113,851 10,904
Registration fees .............................................. 98,425 34,430
Trustees' fees and expenses .................................... 38,451 9,136
Miscellaneous .................................................. 17,611 7,607
------------ ------------
Total expenses ................................................... 7,045,993 628,017
Less: waiver of fee by investment adviser and subadviser ......... 0 (109,957)
------------ ------------
Net expenses ..................................................... 7,045,993 518,060
------------ ------------
Net investment income ............................................... 41,142,664 2,467,080
------------ ------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) on Investments - net ........................ (6,576) (7,652)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ............... $ 41,136,088 $ 2,459,428
============ ============
</TABLE>
Annual Report -- 7
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Cash Management Trust Tax Exempt
Money Market Money Market
Series Trust
--------------------------------- ---------------------------------
Year Ended June 30,
---------------------------------------------------------------------
1999 2000 1999 2000
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income ..................................... $ 34,641,250 $ 41,142,664 $ 2,145,371 $ 2,467,080
Net realized gain (loss) on investments ................... 2,470 (6,576) 0 (7,652)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets resulting from operations 34,643,720 41,136,088 2,145,371 2,459,428
--------------- --------------- --------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (a)
Class A ................................................. (27,834,505) (31,912,095) (2,145,371) (2,428,366)
Class B ................................................. (723,507) (1,105,678) 0 (10,069)
Class C ................................................. (67,961) (129,351) 0 0
Class Y ................................................. (6,017,747) (7,988,964) 0 0
--------------- --------------- --------------- ---------------
(34,643,720) (41,136,088) (2,145,371) (2,438,435)
--------------- --------------- --------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares .......................... 2,516,699,035 2,024,354,351 120,150,365 122,990,075
Net asset value of shares issued in connection with the
reinvestment of dividends from net investment income
and distributions from net realized gains ............... 33,335,258 39,720,014 2,119,382 2,403,384
Cost of shares redeemed ................................... (2,449,436,758) (2,104,177,978) (111,188,492) (138,308,396)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets derived from capital
share transactions ........................................ 100,597,535 (40,103,613) 11,081,255 (12,914,937)
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets ..................... 100,597,535 (40,103,613) 11,081,255 (12,893,944)
NET ASSETS
Beginning of the year .................................... 711,266,008 811,863,543 73,797,525 84,878,780
--------------- --------------- --------------- ---------------
End of the year .......................................... $ 811,863,543 $ 771,759,930 $ 84,878,780 $ 71,984,836
=============== =============== =============== ===============
UNDISTRIBUTED NET INVESTMENT INCOME ......................... $ 116,821 $ 123,397 $ 0 $ 28,645
=============== =============== =============== ===============
</TABLE>
(a) Amounts distributed include a net realized gain (loss) of $2,470 and
($6,576) for the Cash Management Trust Money Market Series for the years
ended June 30, 1999 and 2000, respectively, and $0 and ($7,652) for Tax
Exempt Money Market Trust for the years ended June 30, 1999 and 2000,
respectively.
8 -- Annual Report
See accompanying notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
Cash Management Trust -- Money Market Series
--------------------------------------------------------
Class A, B, C
-------------------------------------------------------
Year Ended June 30,
--------------------------------------------------------
1996 1997 1998(a) 1999 2000
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Income From Investment Operations:
Net Investment Income ................................ 0.0482 0.0467 0.0488 0.0445 0.0498
Net Realized and Unrealized Gain (Loss) on Investments 0.0002 0.0000 0.0000 0.0000 0.0000
-------- -------- -------- -------- --------
Total From Investment Operations ..................... 0.0484 0.0467 0.0488 0.0445 0.0498
-------- -------- -------- -------- --------
Less Distributions
Distributions From Net Investment Income ............. (0.0484)(c) (0.0465)(c) (0.0488) (0.0445)(c) (0.0498)(c)
Distributions From Net Realized Capital Gains ........ 0.0000 (0.0002) 0.0000 0.0000 0.0000
-------- -------- -------- -------- --------
Total Distributions .................................. (0.0484) (0.0467) (0.0488) (0.0445) (0.0498)
-------- -------- -------- -------- --------
Net Asset Value, End of Year ......................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return (%) ..................................... 5.0 4.8 5.0 4.6 5.1
Ratio of Operating Expenses to Average Net Assets (%) 0.90 0.88 0.84 0.84 0.84
Ratio of Net Investment Income to
Average Net Assets (%) ............................. 4.85 4.66 4.88 4.46 4.96
Net Assets, End of Year (000) ........................ $663,621 $698,659 $607,406 $664,609 $603,916
<CAPTION>
--------------------------------
Class Y
--------------------------------
February 27
(b)
through Year Ended June 30,
June 30, --------------------
1998 1999 2000
-------- -------- --------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year ................... $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- --------
Income From Investment Operations:
Net Investment Income ................................ 0.0169 0.0448 0.0489
Net Realized and Unrealized Gain (Loss) on Investments 0.0000 0.0000 0.0000
-------- -------- --------
Total From Investment Operations ..................... 0.0169 0.0448 0.0489
-------- -------- --------
Less Distributions
Distributions From Net Investment Income ............. (0.0169)(c) (0.0448)(c) (0.0489)(c)
Distributions From Net Realized Capital Gains ........ 0.0000 0.0000 0.0000
-------- -------- --------
Total Distributions .................................. (0.0169) (0.0448) (0.0489)
-------- -------- --------
Net Asset Value, End of Year ......................... $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ========
Total Return (%) ..................................... 1.7 4.6 5.0
Ratio of Operating Expenses to Average Net Assets (%) 0.74(d) 0.82 0.87
Ratio of Net Investment Income to
Average Net Assets (%) ............................. 4.98(d) 4.44 4.94
Net Assets, End of Year (000) ........................ $103,860 $147,254 $167,844
</TABLE>
(a) Class C shares commenced operations March 1, 1998.
(b) Commencement of operations.
(c) Including net realized gain (loss) on investments.
(d) Computed on an annualized basis.
<TABLE>
<CAPTION>
Tax Exempt Money Market Trust
------------------------------------------------------------------
Class A,B
------------------------------------------------------------------
Year Ended June 30,
------------------------------------------------------------------
1996 1997 1998 1999 2000
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ..................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income .................................. 0.0327 0.0314 0.0323 0.0276 0.0309
Net Realized and Unrealized Gain (Loss) on Investments . 0.0000 0.0001 0.0000 0.0000 0.0000
---------- ---------- ---------- ---------- ----------
Total From Investment Operations ....................... 0.0327 0.0315 0.0323 0.0276 0.0309
---------- ---------- ---------- ---------- ----------
Less Distributions
Distributions From Net Investment Income ............... (0.0327) (0.0315)(2) (0.0323) (0.0276) (0.0309)(2)
---------- ---------- ---------- ---------- ----------
Total Distributions .................................... (0.0327) (0.0315) (0.0323) (0.0276) (0.0309)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Year ........................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
========== ========== ========== ========== ==========
Total Return (%) ....................................... 3.3 3.2 3.3 2.8 3.1
Ratio of Operating Expenses to Average Net Assets (%) .. 0.90 0.85 0.85 0.80 0.79
Ratio of Operating Expenses to
to Average Net Assets After Expense Reductions (%) (b) 0.56 0.56 0.60 0.65 0.65
Ratio of Net Investment Income to
Average Net Assets (%) ................................ 3.29 3.17 3.23 2.76 3.10
Net Assets, End of Year (000) .......................... $ 64,897 $ 67,736 $ 73,798 $ 84,879 $ 71,964
</TABLE>
(a) Including net realized gain (loss) on investments.
(b) After giving effect to the expense limitation and fee waiver described in
Note 3 to the financial statements.
Annual Report -- 9
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
For the Year Ended June 30, 2000
1. Significant Accounting Policies. Nvest Cash Management Trust Money Market
Series and Nvest Tax Exempt Money Market Trust (the "Trusts") are registered
under the Investment Company Act of 1940, as amended, as diversified, open-end
investment companies. The Cash Management Trust Money Market Series seeks
maximum current income consistent with the preservation of capital and
liquidity. The Tax Exempt Money Market Trust seeks current income exempt from
federal income taxes consistent with the preservation of capital and liquidity.
Nvest Cash Management Trust Money Market Series -- The Trust's Agreement and
Declaration of Trust permits the issuance of an unlimited number of shares of
beneficial interest, no par value. The Trust commenced its public offering of
Class B shares on September 13, 1993, Class C shares on March 1, 1998 and Class
Y shares on February 27, 1998. Class A, B and C shares were offered to enable
investors in each class of the Nvest Stock or Bond Funds to invest in money
market shares. Class A, B and C shares are identical and may be subject to a
contingent deferred sales charge upon redemption if the shares were acquired by
exchange of Class A, Class B or C shares of a stock or bond fund. Class Y shares
are intended for institutional investors with a minimum of $1 million to invest.
Nvest Tax Exempt Money Market Trust -- The Trust's Agreement and Declaration of
Trust permits the issuance of an unlimited number of shares of beneficial
interest, no par value. Effective September 13, 1993, the Trust began offering
two classes of shares, Class A and Class B, in order to enable investors in
either class of the Nvest Stock or Bond Funds to invest in money market shares.
Class A and B shares are identical and may be subject to a contingent deferred
sales charge upon redemption if the shares were acquired by exchange of Class A
or Class B shares of a stock or bond fund.
The following is a summary of significant accounting policies followed by the
Trusts in the preparation of the financial statements. The policies are in
conformity with accounting principles generally accepted in the United States
for investment companies. The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
a. Security Valuation. The Trusts employ the amortized cost method of security
valuation as set forth in Rule 2a-7 under the Investment Company Act of 1940
which, in the opinion of the trustees of each Trust, represents the fair value
of the particular security. The amortized cost of a security is determined by
valuing it at original cost and there-after accreting any discount or amortizing
any premium on a straight-line basis.
b. Repurchase Agreements. The Trusts, through their custodian, receive delivery
of the underlying securities collateralizing repurchase agreements. It is the
Trusts' policy that the market value of the collateral be at least equal to 100%
of the repurchase price. The subadviser is responsible for determining that the
value of the collateral is at all times at least equal to the repurchase price.
Repurchase agreements could involve certain risks in the event of default or
insolvency of the other party, including possible delays or restrictions upon
the portfolio's ability to dispose of the underlying security.
c. Security Transactions and Related Investment Income. Security transactions
are accounted for on the trade date (date the order to buy or sell is executed)
and interest income is recorded on the accrual basis. In determining the net
gain or loss on securities sold, the cost of securities is determined on the
identified cost basis.
d. Federal Income Taxes. The Cash Management Trust Money Market Series and the
Tax Exempt Money Market Trust intend to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies, and to distribute to
their shareholders all of their taxable and tax exempt income. Accordingly, no
provision for federal income tax has been made.
The Tax Exempt Money Market Trust has designated 100% of dividends paid from net
investment income during the fiscal year as tax exempt for federal income tax
purposes.
e. Dividends and Distributions to Shareholders. Dividends and distributions are
declared daily to shareholders of record at the time and are paid monthly. Long
term gain distributions, if any, will be made annually. The timing and
characterization of certain income and capital gains distributions are
determined in accordance with federal tax regulations which may differ from
generally accepted accoutning principles. These differences are primarily due to
deferred Trustee fees.
f. Other. Each of the Trusts invests primarily in a portfolio of money market
instruments maturing in 397 days or less whose ratings are within the two
highest ratings categories of a nationally recognized rating agency or, if not
rated, are believed to be of comparable quality. The ability of the issuers of
the securities held by the Trusts to meet their obligations may be affected by
foreign, economic, political and legal developments in the case of foreign
banks, foreign branches, or subsidiaries of U.S. banks, or domestic economic
developments in a specific industry, state or region.
2. Investment Transactions.
Nvest Cash Management Trust Money Market Series -- Purchases and sales or
maturities of short-term obligations, including securities purchased subject to
repurchase agreements, aggregated $6,806,405,448 and $6,886,387,272,
respectively.
Nvest Tax Exempt Money Market Trust -- Purchases and sales or maturities of
short-term obligations aggregated $262,470,373 and $277,693,600, respectively.
3. Investment Advisory Fees and Other Transactions with Affiliates.
a. Management Fees and Other Transactions with Affiliates. During the year ended
June 30, 2000, the Trusts incurred management fees payable to the Trusts'
investment adviser, Nvest Funds Management L.P. ("Nvest Management") and
subadviser, Back Bay Advisors L.P. ("Back Bay"). Certain officers and directors
of Nvest Management are also officers and trustees of the Trusts. Nvest
Management and Back Bay are wholly-owned subsidiaries of Nvest Companies, L.P.
("Nvest"), which is a subsidiary of Metropolitan Life Insurance Company (Note
5).
Nvest Cash Management Trust Money Market Series -- Under the management
agreement, the Trust pays to its investment adviser, Nvest Management, a monthly
fee based on the annual percentage rates of its corresponding average daily net
asset values set forth below. The management fee is reduced by the amount of
subadvisory fees paid by the Trust directly to the subadviser as described
below.
Under the same management agreement, Nvest Management pays to its investment
subadviser, Back Bay, a monthly fee based on the annual percentage rates of its
corresponding average
10 -- Annual Report
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- continued
================================================================================
For the Year Ended June 30, 2000
daily net asset values set forth below:
<TABLE>
<CAPTION>
Annual Percentage Rate of Annual Percentage Rate of Advisory Fees
Advisory Fees Paid to Nvest Management Paid by Nvest Management to the Subadviser, Back Bay
-------------------------------------- ----------------------------------------------------
<S> <C> <C>
the first $500 million 0.425% 0.205%
the next $500 million 0.400% 0.180%
the next $500 million 0.350% 0.160%
the next $500 million 0.300% 0.140%
amounts in excess of $2 billion 0.250% 0.120%
</TABLE>
Fees Earned
-----------
Nvest Management $ 1,827,365
Back Bay 1,620,119
-----------
$ 3,447,484
===========
The effective management fee for the year ended June 30, 2000 was 0.42%.
Nvest Tax Exempt Money Market Trust -- The Trust pays management fees to its
investment adviser, Nvest Management, at the annual rate of 0.40% of the first
$100 million of the Trust's average daily net assets and 0.30% of such assets in
excess of $100 million. Nvest Management pays management fees to its investment
subadviser, Back Bay, at the rate of 0.20% of the first $100 million of the
Trust's average daily net assets and 0.15% of such assets in excess of $100
million. Fees earned by Nvest Management and Back Bay under the management
agreements in effect during the year ended June 30, 2000 are as follows:
Fees Earned
-----------
Nvest Management $ 159,477
Back Bay 159,476
-----------
$ 318,953
===========
The effective management fee before the expense limitation for the year ended
June 30, 2000 was 0.40%.
Effective January 2, 1996 to August 31, 2000 Nvest Management and Back Bay have
agreed to reduce the management fee and, if necessary, to assume Trust expenses
in order to limit the expenses to 0.65 of 1% of average daily net assets. As a
result of Trust expenses exceeding the expense limitation, for the year ended
June 30, 2000 Nvest Management and Back Bay reduced their fees by $54,979 and
$54,978, respectively. The effective management fee after the expense limitation
for the year ended June 30, 2000 was 0.26%.
b. Accounting and Administrative Expense. Nvest Services Company, Inc. ("NSC")
is a wholly owned subsidiary of Nvest and provides certain accounting and
administrative services for the Trusts. Prior to January 1, 2000 each Trust
reimbursed NSC for all or part of NSC's expenses of providing these services
which include the following (i) expenses for personnel performing bookkeeping,
accounting, and financial reporting functions and clerical functions relating to
the Trusts, and (ii) expenses for services required in connection with the
preparation of registration statements and prospectuses, registration of shares
in various states, shareholder reports and notices, proxy solicitation material
furnished to shareholders of the Trusts or regulatory authorities and reports
and questionnaires for SEC compliance. Effective January 1, 2000, the Trusts pay
NSC a group fee for these services equal to the annual rate of 0.035% of the
first $5 billion of the Nvest Funds' average daily net assets, 0.0325% of the
next $5 billion of the Nvest Funds' average daily net assets, and 0.03% of the
Nvest Funds' average daily net assets in excess of $10 billion. For the year
ended June 30, 2000, these expenses amounted to $264,886 for the Cash Management
Trust Money Market Series and $28,480 for the Tax Exempt Money Market Trust.
c. Transfer Agent Fees. NSC is the transfer and shareholder servicing agent for
the Trusts and Boston Financial Data Services serves as the sub-transfer agent
for the Trusts. For the year ended June 30, 2000, the Cash Management Trust
Money Market Series and Tax Exempt Money Market Trust paid $1,507,132 and
$72,061, respectively, to NSC as compensation for its services in that capacity.
Class Y shares of Cash Management Trust Money Market Series also bear a
sub-transfer agent fee of 0.10% of average daily net assets charged by National
Financial Services Corporation.
d. Service Fee. The Cash Management Trust Money Market Series Class Y shares
bear a service charge of 0.25% annually of the Class Y average daily net assets
which will be paid by the Fund to such investment advisers, financial planners
and broker-dealers, including New England Securities Corporation, for services
provided by them to service accounts on behalf of Class Y shares of the Fund
under a service agreement. For the year ended June 30, 2000 the Fund paid
$406,838 in service fees.
e. Trustees Fees and Expenses. The Trusts do not pay any compensation directly
to its officers or trustees who are directors, officers or employees of Nvest
Management, Nvest Funds Distributor, L.P., Nvest, NSC or their affiliates, other
than registered investment companies. Each other Trustee receives a retainer fee
at the annual rate of $40,000 and meeting attendance fees of $3,500 for each
meeting of the Board of Trustees attended. Each committee member receives an
additional retainer fee at the annual rate of $6,000 while each committee
chairman receives a retainer fee (beyond the $6,000 fee) at the annual rate of
$4,000. These fees are allocated to the various Nvest Funds based on a formula
that takes into account, among other factors, the relative net assets of each
Trust.
A deferred compensation plan is available to the Trustees on a voluntary basis.
Each participating Trustee will receive an amount equal to the value that such
deferred compensation would have been, had it been invested in the Trusts or
certain other Nvest Funds on the normal payment date. Deferred amounts remain in
the Fund until distributed in accordance with the Plan.
4. Concentration of Credit. The Tax Exempt Money Market Trust had the following
industry concentrations in excess of 10% on June 30, 2000 as a percentage of the
Trust's total net assets: Industrials (24.5%) and Finance (15.0%). The Trust
also had more than 10% of its total net assets invested in tax exempt
obligations of issuers in Illinois (19.6%), Texas (16.9%) and Florida (13.5%).
5. Subsequent Event. Nvest, L.P., and its affiliated operating partnership,
Nvest Companies, L.P., have entered into an agreement for CDC Asset Management
to acquire all of their outstanding partnership units. CDC Asset Management is
the investment management arm of France's Caisse des Depots et Consignations,
which is a major diversified financial institution. Nvest will be renamed CDC
Asset Management-North America and it will continue to use the holding company
structure. Nvest affiliates will retain their investment independence, brand
names, management and operating autonomy. The transaction will not affect daily
operations of the Funds or the investment management activities of the Funds'
investment advisers and subadvisers.
Consummation of the transaction with CDC is subject to a number of
contingencies, including regulatory approvals and approval of the unitholders of
Nvest, L.P. and Nvest Companies L.P. Under the rules for mutual funds the
transaction may result in a change of control for the Nvest affiliates.
Consequently, it is anticipated that the Nvest affiliates will seek approval of
new agreements from the Funds' Board of Trustees and shareholders prior to
consummation of the transaction. The transaction is expected to close in the
fourth quarter of 2000.
Annual Report -- 11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Trustees and the Shareholders of
Nvest Cash Management Trust Money Market Series
Nvest Tax Exempt Money Market Trust
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Nvest Cash Management Trust
Money Market Series and Nvest Tax Exempt Money Market Trust (the "Trusts") at
June 30, 2000, and the results of their operations, the changes in each of their
net assets and the financial highlights for the periods indicated, in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trusts' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at June 30, 2000 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 2, 2000
12 -- Annual Report
<PAGE>
NVEST FUNDS
================================================================================
LARGE-CAP EQUITY FUNDS GLOBAL/INTERNATIONAL EQUITY
Capital Growth Fund Star Worldwide Fund
Kobrick Growth Fund International Equity Fund
Growth Fund
Growth and Income Fund CORPORATE INCOME FUNDS
Balanced Fund Short Term Corporate Income Fund
Star Value Fund Bond Income Fund
High Income Fund
ALL-CAP EQUITY FUNDS Strategic Income Fund
Star Advisers Fund
Kobrick Capital Fund GOVERNMENT INCOME FUNDS
Bullseye Fund Limited Term U.S. Government Fund
Equity Income Fund Government Securities Fund
SMALL-CAP EQUITY FUNDS MONEY MARKET FUNDS*
Star Small Cap Fund Cash Management Trust
Kobrick Emerging Growth Fund Tax Exempt Money Market Trust
*Investments in money market funds are not
insured or guaranteed by the FDIC or any
government agency.
TAX-FREE INCOME FUNDS
Municipal Income Fund
Intermediate Term Tax Free
Fund of California
Massachusetts Tax Free Income Fund
To learn more, and for a free prospectus, contact your financial representative.
Visit our Web site at www.nvestfunds.com
Nvest Funds Distributor, L.P.
399 Boylston Street
Boston, MA 02116
Toll Free 800-225-5478
This material is authorized for distribution to prospective investors when
it is preceded or accompanied by the Fund's current prospectus, which contains
information about distribution charges, management and other items of interest.
Investors are advised to read the prospectus carefully before investing.
Nvest Funds Distributor, L.P., and other firms selling shares of Nvest
Funds are members of the National Association of Securities Dealers, Inc.
(NASD). As a service to investors, the NASD has asked that we inform you of the
availability of a brochure on its Public Disclosure Program. The program
provides access to information about securities firms and their representatives.
Investors may obtain a copy by contacting the NASD at 800-289-9999 or by
visiting their Web site at www.NASDR.com.
Annual Report
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