CMA
CMA TAX-EXEMPT FUND
Semi-Annual Report
September 30, 1994
Merrill Lynch Bull Logo
This report is not authorized for use as an
offer of sale or a solicitation of an offer to buy
shares of the Fund unless accompanied or
preceded by the Fund's current prospectus.
Past performance results shown in this report
should not be considered a representation
of future performance, which will fluctuate.
The Fund seeks to maintain a consistent
$1.00 net asset value per share, although this
cannot be assured. An investment in the Fund
is neither insured nor guaranteed by the
US Government.
Printed on Recycled Paper
CMA Tax-Exempt Fund
Box 9011
Princeton, NJ 08543-9011
<PAGE>
TO OUR SHAREHOLDERS:
For the six-month period ended September 30, 1994, CMA Tax-Exempt
Fund paid shareholders a net annualized yield of 2.32%*. As of
September 30, 1994, the Fund's 7-day yield was 2.92%.
The Environment
Concerns of increasing inflationary pressures continued to prompt
volatility in the US stock and bond markets during the July--
September period. In addition, the weakness of the US dollar in
foreign exchange markets caused intermittent stock and bond market
declines during the period. While the immediate concerns regarding
the US dollar had diminished by late July, the possibility of
continued tightening by the Federal Reserve Board persisted for most
of the period. However, a lower-than-expected rate of growth
reported for the US economy during the second calendar quarter
allayed inflationary concerns to some degree, despite the fifth
increase this year in short-term interest rates made by the central
bank in mid-August. Inflationary expectations surfaced again with
the announcement of significant upward revision in industrial
production and capacity utilization for the May--July period. When
the central bank did not raise short-term interest rates at the late
September Federal Open Market Committee meeting, financial markets
rallied on the expectation that the US economy was not overheating
and therefore significant further monetary policy tightening would
not be necessary.
Despite the stronger-than-expected industrial production results,
other economic data suggest that while the economic recovery is
continuing, it is losing some momentum. Consumer spending is
increasing, but at a relatively slow pace, and existing home sales
may have peaked. Inflation remains subdued at the retail level. In
the industrial sector, the sharp increase in manufacturing
production in August was largely the result of a strong increase in
motor vehicle assemblies, which may level off in the weeks ahead. On
balance, it appears that the growth in US industry is progressing at
a steady, modest rate.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
<PAGE>
Despite evidence of a moderating trend in the US economy, Chairman
Greenspan indicated in his July Humphrey-Hawkins testimony that the
central bank would prefer to err on the side of too much monetary
tightening rather than too little. In the weeks ahead, investors
will continue to assess economic data and inflationary trends in
order to gauge whether further increases in short-term interest
rates are imminent. Continued indications of moderate and
sustainable levels of economic growth would be positive for the US
capital markets.
Investment Outlook and Strategy
During the six-month period ended September 30, 1994, the US economy
continued to surprise investors with its resiliency. Manufacturing
provided a strong catalyst for growth, and continued strength in
housing and automobile sales also provided the impetus for the
Federal Reserve Board to continue the restrictive monetary policy
initiated in February. This was accomplished by raising the Federal
Funds rate by 25 basis points (0.25%) to 3.75% in April, with more
aggressive 50 basis point increases in May and August to its current
rate of 4.75%. In addition, the Federal Reserve Board raised the
discount rate by 50 basis points in both May and August.
Additionally, during the period the yield on the one-year US
Treasury bill rose approximately 155 points to 5.95% by September
30, 1994.
Yields on short-term municipal securities were influenced by the
direction of interest rates in the Government securities market,
although the rise was not as dramatic. This can be attributed to the
strong demand for municipal securities by individuals, corporations
and mutual funds. In addition, an improving economy provided
increased revenues to many large states, which translated into a
reduced need for short-term borrowing and consequently reduced
supply in the marketplace. For example, total short-term issuance
for the first nine months of 1994 totaled $36.2 billion, compared to
$42.8 billion for the corresponding period in 1993. During the same
period, tax-exempt money funds assets rose from $100.9 billion to
$112.6 billion. Additionally, yields on short-term tax-exempt notes
rose from the 3.00% range at the onset of the period to the 4.00%
range by the end of September, an increase of approximately 100
basis points, compared to an increase of 155 basis points in the one-
year US Treasury bill yield.
<PAGE>
The average portfolio maturity of CMA Tax-Exempt Fund began the
reporting period with an average portfolio maturity in the 55-day--
60-day range as we awaited heavy new-issue supply to enter the
marketplace in June and July. At that time we temporarily increased
the average portfolio maturity to the 75-day range to take advantage
of higher yields caused by supply pressures. However, we
subsequently moved the average portfolio maturity back to the 55-day--
60-day range as we awaited further increases in short-term interest
rates from the Federal Reserve Board's restrictive monetary policy.
Although the upcoming period is traditionally the lowest in terms of
new-issue supply, we anticipate maintaining a somewhat defensive
posture in the near future until a clearer picture emerges of the
Federal Reserve Board's interest rate policy. We continue to work
closely with our credit department to maintain a high quality
portfolio while seeking to offer shareholders an attractive tax-
exempt yield.
In Conclusion
We thank you for your continued interest in CMA Tax-Exempt Fund, and
we look forward to serving your investment needs in the months and
years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President and Portfolio Manager
October 26, 1994
<PAGE>
Portfolio Abbreviations for CMA Tax-Exempt Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
COP Certificates of Participation
CP Commercial Paper
DATES Daily Adjustable Tax-Exempt Securities
EDA Economic Development Authority
GO General Obligation Bonds
HFA Housing Finance Authority
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
LIBOR London Interbank Offered Rate
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
S/F Single-Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UPDATES Unit Priced Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Alabama -- $ 22,000 Birmingham, Alabama, Medical Clinic Board Revenue Bonds (U.A.H.S.F.),
1.2% VRDN, 3.80% due 12/01/2026 (a) $ 22,000
5,600 Huntsville, Alabama, Health Care Authority, Health Care Facilities Revenue
Bonds, VRDN, Series A, 3.70% due 6/01/2024 (a) 5,600
7,600 McIntosh, Alabama, IDB, PCR (Ciba-Geigy Corporation Project), VRDN,
Series A, 3.75% due 12/01/2003 (a) 7,600
37,900 McIntosh, Alabama, IDB, Solid Waste Disposal Revenue Bonds (Ciba-Geigy
Corporation Project), VRDN, AMT, 3.75% due 7/01/2004 (a) 37,900
10,000 Mobile, Alabama, IDB, PCR (International Paper Co.), 3.05% due 10/15/1994 10,000
2,200 Mobile, Alabama, IDB, Solid Waste Disposal Revenue Bonds (Scott Paper
Company), VRDN, Series E, 3.70% due 12/01/2019 (a) 2,200
Alaska -- 35,000 Alaska Housing Finance Corporation Revenue Bonds, VRDN, Series C, 3.85%
2.3% due 6/01/2026 (a) 35,000
10,650 Alaska Industrial Development and Export Authority, IDR, Refunding
(Pacific Corp. Project), VRDN, 3.75% due 12/01/1995 (a) 10,650
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Arco Transportation
Project), CP, Series A:
15,800 3.15% due 11/15/1994 15,800
12,000 AMT, 3.05% due 11/07/1994 12,000
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Exxon Pipeline
Co. Project):
43,000 CP, Series B, 3.15% due 12/12/1994 43,000
52,000 VRDN, Series A, 3.05% due 11/10/1994 (a) 52,000
Arizona -- 10,200 Arizona Educational Loan Marketing Corp., Educational Loan Revenue
1.9% Bonds, VRDN, AMT, Series A, 3.75% due 3/01/2015 (a) 10,200
1,100 Maricopa County, Arizona, IDA, PCR (Motorola Inc. Project), VRDN, 3.40%
due 10/01/1995 (a) 1,100
Maricopa County, Arizona, Pollution Control Corp., Revenue Refunding
(Arizona Public Service Co.), VRDN (a):
24,000 Series A, 3.80% due 5/01/2029 24,000
14,400 Series C, 3.80% due 5/01/2029 14,400
8,000 Series F, 3.80% due 5/01/2029 8,000
54,950 Maricopa County, Arizona, TAN, 5% due 7/28/1995 55,255
9,695 Maricopa County, Arizona, Tender Option, 3.20% due 10/12/1994 9,695
Phoenix, Arizona, UT, GO, VRDN (a):
1,000 Series 1, 3.80% due 6/01/2018 1,000
4,800 Series 2, 3.80% due 6/01/2018 4,800
8,000 Salt River Project, Arizona, Agricultural Improvement and Power District,
Electric System Revenue Bonds, CP, 3.10% due 10/18/1994 8,000
<PAGE>
Arkansas -- Arkansas State Student Loan Authority Revenue Bonds, VRDN, AMT (a):
0.6% 20,000 Series B-1, 3.75% due 6/01/2013 20,000
3,800 Series B-4, 3.75% due 6/01/2013 3,800
19,000 Little River County, Arkansas, Solid Waste Disposal Revenue Bonds
(Nekoosa Papers, Inc. Project), VRDN, AMT, 3.75% due 2/01/2025 (a) 19,000
California -- California HFA, Home Mortgage Revenue Bonds:
13.8% 21,000 AMT, Series II, 4.30% due 5/01/1995 21,000
48,050 Series F, 2.50% due 12/15/1994 48,020
20,700 California Health Facilities Financing Authority Revenue Bonds (Catholic
Health Care), VRDN, Series C, 3.50% due 7/01/2020 (a) 20,700
California Higher Education Loan Authority, Inc., Student Loan Revenue
Bonds, AMT, Series C:
65,375 3.85% due 6/01/1995 65,375
21,000 4% due 7/01/1995 21,000
California Higher Education Loan Authority, Inc., Student Loan Revenue
Refunding Bonds:
33,650 Series A, 3.60% due 5/01/1995 33,650
25,000 Series A-1, 3.90% due 7/01/1995 25,000
5,000 Series A-2, 3.60% due 5/01/1995 5,000
33,000 VRDN, AMT, Series E-1, 3.85% due 12/01/2022 (a) 33,000
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
California $ 50,000 California Public Capital Improvements, Financing Authority Revenue Bonds
(concluded) (Pooled Project), Series D, 3.45% due 12/15/1994 $ 50,000
70,000 California State, RAN, Series A, 5% due 6/28/1995 70,408
23,380 California State, Tender Option, 3.50% due 11/17/1994 23,380
27,800 Eastern Municipal Water District, California, Water and Sewer Revenue
Refunding Bonds, VRDN, COP, Series B, 3.50% due 7/01/2020 (a) 27,800
236,535 FB California Floating Rate Trust Certificates, VRDN, Series 9, 3.87% due
4/25/1996 (a) 236,535
15,000 Floating Rate Trust Certificate, California, VRDN, Series 1992-E, 3.95%
due 9/01/2006 (a) 15,000
23,000 Kern County, California, TRAN, 4.25% due 7/14/1995 23,091
11,700 Long Beach, California, Harbor Revenue Bonds, CP, AMT, Series A, 3.20%
due 10/19/1994 11,700
102,700 Los Angeles County, California, TRAN, 4.50% due 6/30/1995 103,177
3,300 Mountain View, California, M/F Housing Revenue Bonds (Villa Mariposa
Project), VRDN, Series A, 3.50% due 3/01/2017 (a) 3,300
60,225 Orange County, California, Various Sanitation Districts, COP, Refunding,
VRDN, 3.50% due 8/01/2013 (a) 60,225
12,600 Riverside County, California, TRAN, CP, 4.25% due 6/30/1995 12,659
11,000 Sacramento County, California, M/F Housing Revenue Bonds (River Oaks
Apartments), VRDN, Series E, 3.75% due 9/15/2007 (a) 11,000
Sacramento County, California, M/F Housing Revenue Bonds, VRDN (a):
7,800 Series A, 3.75% due 4/15/2007 7,800
6,400 Series B, 3.75% due 4/15/2007 6,400
6,000 Series C, 3.75% due 4/15/2007 6,000
54,750 San Diego County, California, TAN, Series A, 4.25% due 6/30/1995 55,000
10,000 Santa Clara County, California, TRAN, 4.25% due 7/07/1995 10,035
11,300 Student Education Loan Marketing Corporation, California, Student Loan
Revenue Refunding Bonds, Series A, 2.65% due 11/01/1994 11,300
<PAGE>
Colorado -- Arapahoe County, Colorado, Capital Improvement Trust Fund, Highway
4.7% Revenue Bonds (E-470 Project):
2,595 Series A, 3.80% due 2/28/1995 2,595
34,675 Series C, 3.90% due 2/28/1995 34,675
34,915 Series E, 3.90% due 2/28/1995 34,915
31,020 Series F, 3.90% due 2/28/1995 31,020
28,030 Series G, 3.90% due 2/28/1995 28,030
63,655 Series H, 3.80% due 2/28/1995 63,655
28,645 Series I, 3.90% due 2/28/1995 28,645
31,400 Series J, 3.90% due 2/28/1995 31,400
9,580 Series K, 3.90% due 2/28/1995 9,580
6,900 Colorado Health Facilities Authority Revenue Bonds (North Colorado
Medical Center), VRDN, 3.65% due 5/15/2020 (a) 6,900
17,000 Colorado Student Obligation Bond Authority, Student Loan Revenue Bonds,
VRDN, AMT, Series B, 3.70% due 7/01/2020 (a) 17,000
Denver, Colorado, City and County Airport Revenue Bonds, AMT:
15,000 CP, Sub-Series C, 3.20% due 10/14/1994 15,000
11,000 CP, Sub-Series C, 3.40% due 10/26/1994 11,000
10,500 VRDN, Series F, 3.85% due 11/15/2025 (a) 10,500
11,500 VRDN, Series G, 3.85% due 11/15/2025 (a) 11,500
3,800 Pitkin County, Colorado, IDR, Refunding (Aspen Skiing Co. Project),
VRDN, Series A, 3.80% due 4/01/2016 (a) 3,800
8,000 Westminster, Colorado, IDR, Refunding (Ball Corp. Project), VRDN, 3.80%
due 6/01/2005 (a) 8,000
Connecticut -- Connecticut State, HFA (Housing Mortgage Finance Project):
3.5% 10,670 Series H-1, 2.80% due 11/15/1994 10,670
10,000 Series H-2, 2.90% due 11/15/1994 10,000
35,155 Sub-Series D-1, 3.55% due 5/15/1995 35,155
3,900 Sub-Series E-2, 2.90% due 11/15/1994 3,900
4,165 Sub-Series G-1, 3.55% due 5/15/1995 4,165
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Connecticut $128,000 Connecticut State Special Assessment Unemployment Compensation, Advance
(concluded) Fund Revenue Bonds, Series C, 3.85% due 7/01/1995 $ 128,000
49,400 Connecticut State Special Tax Obligation Revenue Bonds (Transportation
Infrastructure), Second Lien, Series 1, VRDN, 3.75% due 12/01/2010 (a) 49,400
16,200 Eagle Tax Exempt Trust, Connecticut, VRDN, 3.93% due 8/15/2012 (a) 16,200
Delaware -- Delaware State, EDA, Revenue Bonds (Delmarva Power & Light Co. Project),
0.1% VRDN, AMT (a):
4,400 3.95% due 10/01/2017 4,400
2,100 Series A, 3.95% due 10/01/2017 2,100
District of District of Columbia, General Fund Revenue Bonds, VRDN (a):
Columbia -- 6,800 Series B, 3.85% due 6/01/2003 6,800
1.2% 4,300 Series B-2, 3.85% due 6/01/2003 4,300
11,500 Series B-3, 3.85% due 6/01/2003 11,500
18,000 District of Columbia, Hospital Revenue Bonds (Providence Hospital--Daughters
of Charity), VRDN, Series 89A, 3.75% due 12/01/2019 (a) 18,000
2,900 District of Columbia, Refunding Bonds, VRDN, Series A-2, 3.50% due
10/01/2007 (a) 2,900
13,100 District of Columbia, Revenue Bonds (George Washington University), VRDN,
Series A, 3.70% due 3/01/2006 (a) 13,100
6,500 District of Columbia Revenue Bonds (Student Loan), 4.05% due 7/01/1995 6,500
26,700 Eagle Tax Exempt Trust, VRDN, Series A, 3.87% due 6/01/2005 (a) 26,700
Florida -- 3,400 Broward County, Florida, HFA, M/F Housing Revenue Bonds (Margate
2.5% Investments Projects), VRDN, 3.55% due 11/01/2005 (a) 3,400
38,690 Dade County, Florida, Aviation Revenue Refunding Bonds, VRDN, Series V,
3.75% due 10/01/2007 (a) 38,690
11,700 Dade County, Florida, IDA, Exempt Facilities Revenue Refunding Bonds
(Florida Power & Lighting Co.), VRDN, 3.40% due 6/01/2021 (a) 11,700
Dade County, Florida, Solid Waste Authority, IDR (Montenay-Dade Limited
Project), VRDN (a):
16,710 AMT, 3.80% due 12/01/2010 16,710
900 Series A, 3.80% due 12/01/2013 900
9,900 Dade County, Florida, Special Obligation Capital Asset Acquisition
Revenue Bonds, 3.65% due 10/01/2010 9,900
4,500 Dade County, Florida, Water and Sewer System Revenue Bonds, VRDN, 3.60%
due 10/05/2022 (a) 4,500
8,000 Floating Rate Trust Certificate, Florida, VRDN, Series 1992-D, 4% due
7/01/1995 (a) 8,000
400 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric Company
<PAGE> Project), VRDN, 3.55% due 9/01/2025 (a) 400
16,000 Jacksonville, Florida, CP, GO, 3.30% due 11/08/1994 16,000
9,900 Martin County, Florida, IDA, IDR, Revenue Bonds (Indiantown Cogeneration),
VRDN, AMT, Series A, 3.85% due 7/01/2025 (a) 9,900
8,500 Martin County, Florida, PCR, Refunding (Florida Power & Lighting Co.
Project), VRDN, 3.80% due 9/01/2024 (a) 8,500
Saint Lucie County, Florida, PCR, Refunding (Florida Power & Light Co. Project), CP:
21,500 Series A, 3.20% due 11/09/1994 21,500
15,000 Series B, 3.10% due 11/10/1994 15,000
Sunshine State Governmental Financing Commission of Florida Revenue
Bonds, CP:
6,000 3% due 10/12/1994 6,000
6,200 3.05% due 10/20/1994 6,200
6,860 Volusia County, Florida, Health Facilities Authority Revenue Bonds
(Pooled Hospital Loan Program), VRDN, 3.75% due 11/01/2015 (a) 6,860
Georgia -- 4,500 Burke County, Georgia, Development Authority, PCR (Georgia Power
3.3% Company-Plant Vogtle Project), VRDN, 3.65% due 7/01/2024 (a) 4,500
5,200 DeKalb County, Georgia, IDA Revenue Bonds (Hitachi Chemical America),
VRDN, 3.65% due 8/01/2004 (a) 5,200
22,229 FB Georgia Floating Rate Trust Certificates, VRDN, Series 7, 3.90% due
1/01/1996 (a) 22,229
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Georgia $ 52,880 Fulton County, Georgia, General Fund Bonds, TAN, 3.50% due 12/30/1994 $ 52,964
(concluded) 9,682 Georgia Municipal Association, Pooled Bonds, COP, VRDN, 3.55% due
12/15/2020 (a) 9,682
11,590 Georgia State Residential Finance Authority, Home Ownership Mortgage
Revenue Bonds, VRDN, Series A, 3.65% due 12/01/2020 (a) 11,590
6,270 Georgia State Residential Finance Authority, S/F Industrial Mortgage
Revenue Bonds, VRDN, Series A, 3.65% due 12/01/2016 (a) 6,270
12,235 Georgia State, Tender Option, 3.20% due 10/17/1994 12,235
6,600 Hapeville, Georgia, Development Authority, IDR (Hapeville Hotel Limited),
VRDN, 3.65% due 11/01/2015 (a) 6,600
14,320 Municipal Electric Authority, Georgia, General Resolution Revenue Bonds,
Series B, 3.85% due 6/01/1995 14,320
Municipal Electric Authority, Georgia (Project One), CP:
20,000 Sub-Series B, 3.05% due 10/17/1994 20,000
10,000 Sub-Series D, 3.05% due 10/11/1994 10,000
Municipal Electric Authority, Georgia, Various Bonds (Project One), Sub-Series E:
25,000 3.05% due 10/18/1994 25,000
25,000 3.05% due 10/19/1994 25,000
20,000 3.05% due 10/21/1994 20,000
<PAGE>
Idaho -- 10,025 Idaho State, TAN, 4.50% due 6/29/1995 10,074
0.1%
Illinois -- 9,000 Chicago, Illinois, Gas Supply Revenue Bonds (Peoples Gas Light & Coke Co.),
8.7% AMT, Series B, 2.55% due 12/01/1994 9,000
Chicago, Illinois, O'Hare International Airport Revenue Bonds (a):
7,100 (American Airlines), DATES, Series C, 3.90% due 12/01/2017 7,100
29,100 (General Airport Second Lien), VRDN, AMT, Series A, 3.90% due 1/01/2018 29,100
14,800 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue
Bonds (Compagnie Nationale, Air France), VRDN, 3.75% due 5/01/2018 (a) 14,800
23,600 Chicago, Illinois, Revised Tender Agent, VRDN, Series B, 3.65% due 1/01/2012 (a) 23,600
5,720 Chicago, Illinois, School Financing Authority, Refunding (School Assistance),
8.70% due 6/01/1995 (b) 6,005
Chicago, Illinois, Tender Notes:
19,400 CP, Series B, 3.15% due 10/31/1994 19,400
35,000 CP, Series C-1, 3.25% due 11/30/1994 35,000
15,400 Series C, 3.25% due 11/30/1994 15,400
45,000 VRDN, Series B, 3.60% due 10/31/1995 (a) 45,000
20,900 Eagle Tax Exempt Trust, Illinois, VRDN, 3.35% due 6/15/2009 (a) 20,900
Illinois Development Finance Authority, VRDN (a):
12,700 PCR (Diamond Star Motors Project), 3.90% due 12/01/2008 12,700
3,800 PCR (Illinois Power Co.), AMT, Series C, 3.75% due 3/01/2017 3,800
22,100 Revenue Bonds (Lyric Opera Chicago Project), 3.80% due 12/01/2028 22,100
8,860 Revenue Bonds (Residential Rental-River Oaks Project), AMT, 3.70% due
12/15/2019 8,860
Illinois Educational Facilities Authority Revenue Bonds, VRDN (a):
5,300 (Chicago Historical Society), 3.75% due 12/01/2025 5,300
7,500 (Cultural Pooled Financing Program), 3.70% due 12/01/2025 7,500
15,200 (Illinois Institute of Technology), Series A, 3.80% due 9/01/2025 15,200
Illinois Health Facilities Authority Revenue Bonds:
32,000 (Evangelical Hospital Corporation), Series A, 3.80% due 1/01/2010 32,000
35,000 (Evanston Hospital Corporation Project), 3% due 10/17/1994 35,000
25,000 (Evanston Hospital Corporation Project), 3.40% due 3/31/1995 25,000
30,000 (Evanston Hospital Corporation Project), Series A, 3.30% due 12/01/1994 30,000
10,000 (Evanston Hospital Corporation Project), Series A, 3.50% due 2/15/1995 10,000
10,000 (Evanston Hospital Corporation Project), Series B, 3.50% due 2/15/1995 10,000
10,000 (Evanston Hospital Corporation Project), Series C, 3.50% due 2/15/1995 10,000
10,000 (Evanston Hospital Corporation Project), Series D, 3.50% due 2/15/1995 10,000
10,000 (Evanston Hospital Corporation Project), Series E, 3.50% due 2/15/1995 10,000
50,000 (Evanston Hospital Corporation Project), UPDATES, Series B, 3.50% due
1/26/1995 (a) 50,000
15,000 (Highland Park Hospital), VRDN, Series B, 3.75% due 6/01/1995 (a) 15,000
8,700 (Hospital Sister Services, Inc.), UPDATES, Series E, 3.65% due 12/01/2014 (a) 8,700
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Illinois Illinois Health Facilities Authority Revenue Bonds (concluded):
(concluded) $ 20,000 (Lutheran Institute), VRDN, Series C, 3.15% due 4/01/2015 (a) $ 20,000
19,500 (Revolving Fund, Pooled Loan Program), VRDN, Series B, 3.70% due
8/01/2015 (a) 19,500
7,000 (Revolving Fund, Pooled Loan Program), VRDN, Series F, 3.70% due
8/01/2015 (a) 7,000
46,200 Illinois State Toll Highway Authority, Revenue Refunding Bonds (Toll
Highway Priority), VRDN, Series B, 3.65% due 1/01/2010 (a) 46,200
Indiana -- 39,275 Evansville, Indiana, Hospital Authority Revenue Bonds (Saint Mary's
3.2% Medical Center-Daughters of Charity), VRDN, 3.75% due 11/01/2013 (a) 39,275
Fort Wayne, Indiana, Hospital Authority Revenue Bonds (Parkview Memorial
Hospital), VRDN (a):
1,645 Series B, 3.90% due 1/01/2016 1,645
2,700 Series B, 3.90% due 1/01/2020 2,700
3,505 Series C, 3.90% due 1/01/2016 3,505
5,670 Series D, 3.90% due 1/01/2016 5,670
3,845 Indiana Bond Bank, GO, 3.50% due 2/01/1995 3,848
Indiana Health Facilities Financing Authority, Hospital Revenue Bonds, VRDN (a):
5,400 (Daughters of Charity National Health System), Series A, 3.75% due 11/01/2022 5,400
1,700 (Daughters of Charity National Health System), Series B, 3.75% due 11/01/2022 1,700
7,900 (Methodist Hospital of Indiana, Inc.), Series B, 3.75% due 9/01/2022 7,900
34,200 (Methodist Hospital of Indiana, Inc.), Series C, 3.75% due 9/01/2022 34,200
Indiana Secondary Market Educational Loans Incorporated, Student Loan
Revenue Bonds, VRDN, AMT (a):
26,900 Series B, 3.75% due 12/01/2013 26,900
17,500 Series B, 3.75% due 12/01/2014 17,500
25,700 Indianapolis, Indiana, Local Public Improvement Bond Bank Notes, Series A,
3.75% due 1/16/1995 25,745
9,400 Jasper County, Indiana, PCR, Refunding (Northern Indiana Public Service Co.),
VRDN, Series C, 3.50% due 4/01/2019 (a) 9,400
47,810 Marion County, Indiana, Hospital Authority, Hospital Facility Revenue Bonds
(Saint Vincent's Hospital-Daughters of Charity), VRDN, 3.75% due 11/01/2013 (a) 47,810
<PAGE>
Iowa -- 0.5% 5,000 Chillicothe, Iowa, PCR, Refunding (Iowa-Illinois Gas & Electric Project),
VRDN, 3.80% due 1/01/2023 (a) 5,000
Iowa Finance Authority, Solid Waste Disposal Revenue Bonds (Cedar River
Paper Company Project), Series A, VRDN (a):
6,500 4.05% due 7/01/2023 6,500
3,200 4.05% due 6/01/2024 3,200
4,100 Iowa Higher Education Loan Authority Revenue Bonds (Private College
Facilities), VRDN, 3.80% due 12/01/2015 (a) 4,100
14,500 Iowa Student Loan Liquidity Corporation, Student Loan Revenue Bonds,
VRDN, AMT, Series B, 3.65% due 12/01/2013 (a) 14,500
Kansas -- Wichita, Kansas, Hospital Revenue Bonds (CSJ Health Systems), VRDN (a):
0.2% 1,800 3.75% due 10/01/2002 1,800
15,300 3.75% due 10/01/2008 15,300
Kentucky -- 5,100 Ashland, Kentucky, PCR (Merck & Co./Calgon Carbon Project), VRDN,
0.3% 3.80% due 10/01/2006 (a) 5,100
Davies County, Kentucky, Solid Waste Disposal Facilities Revenue Bonds
(Scott Paper Co. Project), VRDN, AMT (a):
1,400 Series A, 3.55% due 12/01/2023 1,400
4,500 Series B, 3.60% due 5/01/2023 4,500
12,200 Series B, 3.60% due 12/01/2023 12,200
Louisiana -- 2,760 Bastrop, Louisiana, IDB, PCR (International Paper, Inc.), 3.05% due 10/15/1994 2,760
2.8% 5,200 Louisiana Public Facilities Authority, Hospital Revenue Bonds (Hospital
Equipment Financing and Refunding Program), VRDN, Series A, 3.80% due
12/01/2005 (a) 5,200
8,600 Louisiana Public Facilities Authority Revenue Bonds (Kenner Hotel Ltd.),
VRDN, 3.65% due 12/01/2015 (a) 8,600
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Louisiana $ 12,485 Louisiana State Offshore Terminal Authority, Deepwater Port Revenue
(concluded) Refunding Bonds (Loop Inc.), VRDN, Series A, 3.50% due 9/01/2008 (a) $ 12,485
9,300 New Orleans, Louisiana, Exhibition Hall Authority Revenue Bonds (Hotel
Occupancy Tax), VRDN, Series B, 3.80% due 7/01/2018 (a) 9,300
4,400 New Orleans, Louisiana, Levee District, Levee Improvement Revenue Bonds,
VRDN, 3.95% due 11/01/2014 (a) 4,400
Saint Charles Parish, Louisiana, PCR, VRDN (a):
17,100 (Shell Oil Company-Norco Project), AMT, 3.55% due 11/01/2021 17,100
4,400 (Shell Oil Company Project), 3.40% due 6/01/2005 4,400
13,600 (Shell Oil Company Project), AMT, Series A, 3.55% due 10/01/2022 13,600
Saint James Parish, Louisiana, PCR, Refunding (Texaco Project), CP:
83,030 Series A, 3.20% due 10/14/1994 83,030
46,030 Series B, 3.25% due 11/14/1994 46,030
<PAGE>
Maine -- 0.7% 15,635 Jay, Maine, Solid Waste Disposal Revenue Bonds (International Paper),
AMT, Series A, 3.95% due 6/01/1995 15,635
Maine Health and Higher Educational Facilities Authority Revenue Bonds
(VHA New England Inc.), VRDN (a):
1,250 Series B, 3.70% due 12/01/2025 1,250
1,450 Series F, 3.70% due 12/01/2025 1,450
12,500 Maine State Housing Authority, Mortgage Purchase Bonds, AMT, Series B-2,
3.70% due 4/13/1995 12,500
18,000 Maine State, TAN, 4.50% due 6/30/1995 18,104
Maryland -- 25,800 Maryland State Health and Higher Educational Facilities Authority Revenue
0.6% Bonds (Daughters of Charity Systems, Incorporated-Saint Agnes Hospital),
VRDN, 3.75% due 7/01/2013 (a) 25,800
Maryland State Health and Higher Educational Facilities Authority
Revenue Bonds (Pooled Loan Program), VRDN (a):
12,300 Series A, 3.40% due 4/01/2035 12,300
7,800 Series B, 3.40% due 4/01/2035 7,800
Massachusetts 32,130 Clipper Tax Exempt Trust, Massachusetts, Class A, VRDN, 3.58% due
- -- 3.3% 10/17/2002 (a) 32,130
Eagle Tax Exempt Trust, Massachusetts, VRDN (a):
25,000 3.93% due 10/01/2007 25,000
20,900 Series J, 3.93% due 8/01/2005 20,900
Massachusetts Bay Transportation Authority Notes:
1,500 Series A, 3.75% due 3/01/1995 1,500
64,100 Series B, 5% due 9/08/1995 64,614
33,210 Massachusetts State HFA, S/F Housing, Convertible Option Revenue Bonds,
Series 35, 3.75% due 6/01/1995 33,210
300 Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (Capital Asset Program), VRDN, Series D, 3.65% due 1/01/2035 (a) 300
5,000 Massachusetts State, Industrial Finance Agency, PCR, Refunding (New
England Power Company Project), Series A, 3.10% due 11/17/1994 5,000
2,100 Massachusetts State, Industrial Finance Agency Revenue Refunding Bonds
(Showa Women's Institute, Inc.), VRDN, 3.80% due 3/15/2004 (a) 2,100
39,495 Massachusetts State Notes, Series B, 3.40% due 11/22/1994 39,541
Massachusetts State, UPDATES (a):
14,600 Series B, 3.80% due 12/01/1997 14,600
1,400 Series E, 3.80% due 12/01/1997 1,400
Michigan -- 1,600 Delta County, Michigan, Economic Development Corporation, Environmental
2.0% Improvement Revenue Bonds (Mead Escambia), VRDN, Series D, 3.85%
due 12/01/2023 (a) 1,600
18,500 Detroit, Michigan, TAN, Series A, 4% due 12/01/1994 18,531
19,000 Eagle Tax Exempt Trust, Michigan, VRDN, Series 1994-C, Class 2201, 3.50%
due 6/01/2021 (a) 19,000
25,000 Floating Rate Trust Certificates, Michigan, VRDN, Series 1993 K, 3.05%
due 10/01/2011 (a) 25,000
1,000 Grand Rapids, Michigan, Water Supply System, Revenue Refunding Bonds,
VRDN, 3.70% due 1/01/2020 (a) 1,000
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Michigan $ 100 Kent Hospital Finance Authority, Michigan, Hospital Facilities Revenue Bonds
(concluded) (Butterworth Hospital), VRDN, Series A, 3.75% due 1/15/2020 (a) $ 100
Michigan Municipal Bond Authority Revenue Notes:
21,000 Series A, 4.25% due 5/05/1995 21,090
24,250 Series B, 4.75% due 7/20/1995 24,390
Michigan State Hospital Finance Authority Revenue Bonds, VRDN (a):
4,400 (Providence Hospital--Daughters of Charity Systems, Incorporated),
3.75% due 11/01/2014 4,400
14,500 (Saint Mary's Hospital), 3.75% due 11/01/2013 14,500
5,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds
(Consumers Power Company Project), VRDN, Series A, 3.70% due 6/15/2010 (a) 5,000
1,000 Michigan State Strategic Fund, Solid Waste Disposal Revenue Bonds
(Grayling Generating Project), VRDN, AMT, 3.85% due 1/01/2014 (a) 1,000
3,500 Midland County, Michigan, Economic Development Limited Obligation Revenue Bonds
(Dow Chemical Co. Project), VRDN, AMT, Series A, 3.90% due 12/01/2023 (a) 3,500
9,800 University of Michigan, University Revenue Refunding Bonds, VRDN, Series A,
3.50% due 12/01/2019 (a) 9,800
Minnesota -- Becker, Minnesota, PCR (Northern State Power Company), CP, Series A:
2.2% 13,400 3.10% due 10/12/1994 13,400
9,800 3.30% due 10/26/1994 9,800
Eagle Tax Exempt Trust, Minnesota, VRDN (a):
16,500 Series 1994-C, 3.87% due 2/01/2015 16,500
45,000 Series A, 3.93% due 8/01/2006 45,000
13,700 Minneapolis, Minnesota, Community Development Agency Revenue Bonds
(Riverplace Project-Pinnacle Apartments), VRDN, 3.75% due 2/01/2012 (a) 13,700
61,660 Minnesota State, HFA, S/F Mortgage Bonds, AMT, Series D, 2.60% due 1/12/1995 61,660
Mississippi -- 10,000 Harrison County, Mississippi, PCR, Refunding (E.I. du Pont de Nemours & Co.),
0.3% VRDN, Series E, 3.50% due 9/01/2010 (a) 10,000
3,000 Mississippi Hospital Equipment and Facilities Authority Revenue Bonds
(Mississippi Baptist Medical Center), VRDN, Series B, 3.60% due 7/01/2012 (a) 3,000
5,600 Perry County, Mississippi, PCR, Refunding (Leaf River Forest Project), VRDN,
3.55% due 3/01/2002 (a) 5,600
<PAGE>
Missouri -- 30,000 Eagle Tax Exempt Trust, Missouri, VRDN, Series 1993-E, 3.93% due 8/01/2006 (a) 30,000
1.8% Missouri Higher Education Loan Authority, Student Loan Revenue Bonds,
VRDN, AMT (a):
7,800 Series A, 3.65% due 6/01/2017 7,800
11,700 Series B, 3.65% due 6/01/2020 11,700
Missouri State Health and Educational Facilities Authority, Health Facilities
Revenue Bonds (Sisters of Mercy Health System), VRDN (a):
5,000 Series A, 3.70% due 6/01/2019 5,000
15,500 Series C, 3.70% due 6/01/2019 15,500
4,700 Series D, 3.70% due 6/01/2019 4,700
Missouri State Health and Educational Facilities Authority Revenue Bonds
(Washington University Project), VRDN (a):
1,300 Series A, 3.55% due 9/01/2010 1,300
11,230 Series A, 3.80% due 3/01/2017 11,230
19,600 Series B, 3.80% due 3/01/2017 19,600
29,100 Saint Louis County, Missouri, IDA, Hospital Revenue Bonds (DePaul
Hospital--Daughters of Charity), VRDN, 3.75% due 11/01/2014 (a) 29,100
Nebraska -- 13,349 Floating Rate Trust Certificate, Nebraska, VRDN, Series 1991-C, 3.70%
1.0% due 1/02/1995 (a) 13,349
Nebraska Higher Education Loan Program, Multiple Mode Student Loan
Revenue Bonds, VRDN (a):
9,000 Series D, 3.70% due 12/01/2015 9,000
20,100 Series N, 3.70% due 12/01/2015 20,100
Nebraska Higher Education Loan Program, Student Loan Revenue Bonds,
VRDN, AMT (a):
3,550 Series A, 3.80% due 12/01/2016 3,550
30,150 Series C, 3.80% due 8/01/2018 30,150
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Nevada -- $ 8,000 Clark County, Nevada, Airport Improvement Revenue Refunding Bonds,
0.1% VRDN, Series A, 3.60% due 7/01/2012 (a) $ 8,000
New 1,400 New Hampshire Higher Educational and Health Facilities Authority Revenue
Hampshire -- Bonds (VHA New England Inc.), VRDN, Series D, 3.70% due 12/01/2025 (a) 1,400
0.5% 38,400 New Hampshire State, Business Finance Authority, PCR, Refunding (Public
Service Co.), VRDN, Series E, 3.85% due 5/01/2021 (a) 38,400
New Jersey -- 13,800 Cape May County, New Jersey, Municipal Utilities Authority, Solid Waste Resource
0.5% Recovery Revenue Bonds (Daneco Project), AMT, 2.80% due 11/30/1994 13,800
5,000 Floating Rate Trust Certificate, New Jersey, Series 1993-A, UT, 3.05% due 2/16/1999 5,000
14,400 New Jersey Sports and Exposition Authority, State Contract Revenue Bonds,
VRDN, Series C, 3.50% due 9/01/2024 (a) 14,400
<PAGE>
New Mexico -- 10,000 Farmington, New Mexico, PCR (Arizona Public Service Co.-Four Corners
1.1% Project), VRDN, 3.85% due 11/01/1994 (a)(b) 10,000
Farmington, New Mexico, PCR, Refunding (Arizona Public Service Co.), VRDN (a):
28,700 Series A, 3.80% due 5/01/2024 28,700
13,400 Series B, 3.85% due 9/01/2024 13,400
New Mexico Educational Assistance Foundation, Student Loan Revenue Bonds,
VRDN, AMT (a):
4,900 Series B, 3.70% due 4/01/2005 4,900
17,600 Series I, 3.75% due 9/01/2008 17,600
2,830 New Mexico State Hospital Equipment Loan Council, Hospital Equipment and
Improvement Revenue Bonds, VRDN, 3.60% due 5/01/2009 (a) 2,830
New York -- 15,000 Nassau County, New York, RAN, 4% due 4/14/1995 15,032
2.6% 62,000 New York City, New York, Floating Rate LIBOR Notes, VRDN, 3.413% due
6/30/1995 (a) 62,000
31,600 New York City, New York, RAN, Series A, 4.50% due 4/12/1995 31,731
10,000 New York City, New York, TAN, Series A, 4.25% due 2/15/1995 10,026
14,000 New York City, New York, Transportation Authority, Special Obligation,
RAN, Series A, 4% due 12/15/1994 14,028
New York City, New York, VRDN, GO, Series H (a):
3,200 Sub-Series H-3, 3.80% due 8/01/2019 3,200
8,300 Sub-Series H-3, 3.80% due 8/01/2022 8,300
7,900 Sub-Series H-4, 3.80% due 8/01/2015 7,900
3,000 Sub-Series H-6, 3.80% due 8/01/2012 3,000
1,600 Sub-Series H-6, 3.80% due 8/01/2013 1,600
5,700 New York State Dormitory Authority Revenue Bonds (Cornell University),
VRDN, Series B, 3.80% due 7/01/2025 (a) 5,700
10,000 New York State Energy Research Development Authority, PCR, Refunding
(Orange & Rockland Project), VRDN, Series A, 3.35% due 10/01/2014 (a) 10,000
1,600 New York State Local Government Assistance Corporation, VRDN, Series B,
3.50% due 4/01/2023 (a) 1,600
14,500 Rochester, New York, BAN, 2.74% due 11/04/1994 14,503
2,000 Syracuse, New York, IDA, Multi Modal Civic Facilities Revenue Bonds
(Syracuse University Project), VRDN, 3.80% due 3/01/2023 (a) 2,000
North Craven County, North Carolina, Industrial Facilities and Pollution
Carolina -- Control Finance Authority Revenue Bonds (Cravenwood Energy Project),
2.7% VRDN, AMT (a):
6,300 Series B, 3.85% due 5/01/2011 6,300
16,000 Series C, 3.85% due 5/01/2011 16,000
2,600 Halifax County, North Carolina, Industrial Facilities and Pollution
Control Finance Authority Revenue Bonds (Westmoreland), VRDN, 3.90%
due 12/01/2019 (a) 2,600
9,995 North Carolina Eastern Municipal Power Agency, Power System Revenue
Bonds (Putters), Series 5, 3.55% due 3/15/1995 9,995
North Carolina Educational Facilities Finance Agency Revenue Bonds, VRDN (a):
23,950 (Bowman Grey School of Medicine Project), 3.65% due 9/01/2020 23,950
20,240 (Duke University Project), Series A, 3.50% due 6/01/2027 20,240
15,000 (Duke University Project), Series B, 3.50% due 12/01/2021 15,000
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North North Carolina Medical Care Commission, Hospital Revenue Bonds, VRDN (a):
Carolina $ 10,200 (Carol Woods Project), 3.80% due 4/01/2021 $ 10,200
(concluded) 1,700 (Duke University Hospital), Series B, 3.50% due 6/01/2015 1,700
2,000 (Duke University Hospital Project), Series C, 3.50% due 6/01/2015 2,000
18,500 (North Carolina Baptist Hospital Project), Series B, 3.65% due 6/01/2022 18,500
17,600 (Pooled Equipment Financing Project), 3.70% due 12/01/2025 17,600
9,000 (Pooled Financing Project), 3.70% due 4/01/2012 9,000
13,900 (Pooled Financing Project), Series A, 3.90% due 10/01/2020 13,900
6,500 (Pooled Financing Project), Series B, 3.90% due 10/01/2013 6,500
9,000 Refunding (Moses H. Cone Memorial Hospital Project), 3.65% due 10/01/2023 9,000
4,200 Person County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Solid Waste Disposal Revenue Bonds (Carolina Power
and Light Company), VRDN, AMT, 3.65% due 11/01/2016 (a) 4,200
6,000 University of North Carolina, Chapel Hill, School of Medicine and Ambulatory
Care Revenue Bonds, CP, 3.10% due 10/21/1994 6,000
3,300 Wake County, North Carolina, Industrial Facilities and Pollution Control Finance
Authority Revenue Bonds (Carolina Power and Light Company Project), DATES,
3.95% due 3/01/2017 (a) 3,300
Ohio -- 1.3% 16,400 Cincinnati, Ohio, Student Loan Funding Corporation, Student Loan Revenue
Bonds, VRDN, Series 1983-A, 3.60% due 12/29/1998 (a) 16,400
5,000 Clinton County, Ohio, Airport Facilities Revenue Refunding Bonds
(Wilmington Air Park, Inc.), VRDN, 3.75% due 6/01/2011 (a) 5,000
15,100 Cuyahoga County, Ohio, Hospital Revenue Improvement Bonds (Cleveland
University Hospital), VRDN, 3.75% due 1/01/2016 (a) 15,100
1,100 Franklin County, Ohio, Health System Revenue Bonds (Franciscan Sister-Saint
Anthony Medical Center), VRDN, Series B, 3.75% due 7/01/2015 (a) 1,100
5,300 Hamilton County, Ohio, Health Care Systems Revenue Bonds (Franciscan
Sister Poor Health), VRDN, Series A, 3.75% due 3/01/2017 (a) 5,300
1,865 Ohio HFA, M/F Housing Revenue Bonds (Kenwood Congregate Retirement
Program), VRDN, 3% due 12/01/2015 (a) 1,865
Ohio State Air Quality Development Authority, Revenue Refunding Bonds
(JMG Funding Project), VRDN, AMT (a):
23,400 Series A, 3.75% due 10/01/2027 23,400
19,000 Series B, 3.85% due 10/01/2027 19,000
3,000 Scioto County, Ohio, Hospital Facilities Revenue Bonds (VHA Central Inc.
Capital Asset), VRDN, Series C, 3.70% due 12/01/2025 (a) 3,000
6,100 Scioto County, Ohio, Marine Terminal Facility, Revenue Refunding Bonds
(Norfolk Southern Corporation Project), VRDN, 3.65% due 8/15/2013 (a) 6,100
Oklahoma -- 10,200 Oklahoma City, Oklahoma, Industrial and Cultural Facilities Revenue
0.1% Bonds, VRDN, Series A, 3.80% due 6/01/2006 (a) 10,200
<PAGE>
Oregon -- Oregon State GO, Veterans' Welfare Bonds, VRDN (a):
1.0% 53,000 Series 73-E, 3.40% due 12/01/2016 53,000
15,000 Series 73-G, 3.80% due 12/01/2018 15,000
7,300 Port of Portland, Oregon, Public Grain Elevator Revenue Bonds (Columbia
Grain Incorporated Project), VRDN, Series A, 3.80% due 12/01/2014 (a) 7,300
Pennsylvania -- 1,400 Allegheny County, Pennsylvania, Hospital Development Authority Revenue
6.6% Bonds (Presbyterian Health Center), VRDN, Series C, 3.50% due 3/01/2020 (a) 1,400
27,000 Allegheny County, Pennsylvania, IDA, PCR (Duquesne Light Project), CP,
Series A, 2.75% due 10/20/1994 27,000
1,000 Authority Improvement Municipalities of Allegheny County, Pennsylvania
(Pooled Hospital Equipment Leasing), VRDN, 3.70% due 9/01/1995 (a) 1,000
2,500 Butler County, Pennsylvania, IDA, Revenue Refunding Bonds (Wetterau Finance
Co. Project), VRDN, 3.70% due 12/01/2014 (a) 2,500
4,800 Cambria County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Cambria Cogen Project), VRDN, AMT, Series V-1, 3.85% due 9/01/2019 (a) 4,800
3,000 Delaware County, Pennsylvania, IDA, Solid Waste Revenue Bonds (Scott
Paper Company), VRDN, Series B, 3.80% due 12/01/2018 (a) 3,000
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania $ 17,000 Eagle Tax Exempt Trust, Pennsylvania, Series 94, Class 3803, VRDN, 3.87% due
(concluded) 5/01/2008 (a) $ 17,000
Emmaus, Pennsylvania, General Authority Revenue Bonds (Local Government),
VRDN (a):
12,500 Sub-Series E-4, 3.80% due 3/01/2024 12,500
12,500 Sub-Series E-5, 3.80% due 3/01/2024 12,500
1,700 Geisinger Authority, Pennsylvania, Health Systems Revenue Bonds, VRDN,
Series B, 3.80% due 7/01/2022 (a) 1,700
5,700 Montgomery County, Pennsylvania, Higher Education and Health Authority,
Hospital Revenue Bonds (Holy Redeemer Hospital), VRDN, 3.55% due
9/01/2018 (a) 5,700
34,800 Northampton County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Glendon Energy Company Project), AMT, Series A, 3.75% due 10/01/1994 34,800
17,450 Pennsylvania Energy Development Authority Revenue Bonds (B&W Edensburg
Project), VRDN, AMT, 3.70% due 12/01/2011 (a) 17,450
Pennsylvania State Higher Education Assistance Agency, Student Loan
Revenue Bonds, VRDN (a):
54,300 1984 Series A, 3.35% due 12/01/2000 54,300
11,000 AMT, Series A, 3.95% due 1/01/2018 11,000
14,700 AMT, Series B, 3.75% due 7/01/2018 14,700
35,000 Series C, 3.75% due 7/01/2018 35,000
<PAGE> 30,800 Series E, 3.75% due 7/01/2018 30,800
8,000 Pennsylvania State Higher Educational Facilities Authority, College and University
Revenue Bonds (Carnegie-Mellon University), VRDN, Series A, 3.55% due
11/01/2015 (a) 8,000
5,225 Pennsylvania State Higher Educational Facilities Authority, Health Services
Revenue Bonds (Putters), Series 4B, 3.55% due 3/15/1995 5,225
Pennsylvania State Higher Educational Facilities Authority, Revenue
Refunding Bonds (Thomas Jefferson University):
7,650 Series B, 3.20% due 6/01/1995 7,650
34,500 Series C, 3.70% due 6/01/1995 34,500
Philadelphia, Pennsylvania, Gas Works Revenue Bonds, CP:
14,000 3.20% due 10/05/1994 14,000
15,000 3.20% due 10/06/1994 15,000
15,000 3.20% due 10/07/1994 15,000
46,350 Philadelphia, Pennsylvania, Hospital and Higher Education Facilities Authority,
Hospital Revenue Bonds (Children's Hospital of Philadelphia Project), VRDN,
3.80% due 3/01/2027 (a) 46,350
Philadelphia, Pennsylvania, IDA, Revenue Bonds, VRDN (a):
10,200 (30th Street Station Project), AMT, 3.15% due 1/01/2011 10,200
8,600 (Institute for Cancer Research Project), Series A, 3.80% due 7/01/2013 8,600
9,000 (Philadelphia Airport Hotel), AMT, 3.75% due 12/01/2017 9,000
20,880 Sayre, Pennsylvania, Health Care Facilities Authority Revenue Bonds (VHA
of Pennsylvania, Inc., Capital Assets Financing Program), VRDN, Series L,
3.70% due 12/01/2020 (a) 20,880
Rhode Island -- 13,800 Rhode Island Housing and Mortgage Finance Corp., Homeowner Opportunity
0.2% Revenue Bonds, VRDN, AMT, Series 9-B, 3.95% due 4/01/2013 (a) 13,800
South 3,000 Charleston County, South Carolina, IDR, Refunding (Massey Coal Terminal
Carolina -- SC Corporation), VRDN, 3.85% due 1/01/2007 (a) 3,000
0.6% 19,800 Charleston County, South Carolina, School District, TAN, 4.50% due 4/13/1995 19,887
South Carolina EDA, Revenue Bonds, VRDN (a):
4,600 (Saint Francis Hospital Project), 3.75% due 7/01/2022 4,600
5,400 (Wellman, Inc. Project), 3.95% due 12/01/2010 5,400
14,100 (Wellman, Inc. Project), AMT, 3.95% due 12/01/2012 14,100
9,000 York County, South Carolina, PCR (Saluda River), Series 84E-1, 3.50% due
2/15/1995 9,000
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Tennessee -- $ 9,400 Cleveland, Tennessee, IDB, Revenue Bonds (Newly Wed Foods Incorporated
2.0% Project), VRDN, AMT, 3.80% due 1/01/2012 (a) $ 9,400
10,000 Floating Rate Trust Certificates, Tennessee, Series 1994-E, 4% due 3/02/2012 10,000
8,100 Loudon, Tennessee, IDB, PCR, Refunding (A.E. Staley Manufacturing Co.
Project), VRDN, 3.75% due 9/01/2001 (a) 8,100
6,695 Memphis, Tennessee (Putters), Series 3A, 3.55% due 3/15/1995 6,695
14,955 Morristown, Tennessee, IDB, PCR, Refunding (Akzo Chemicals, Inc.
Project), VRDN, 3.75% due 8/01/2001 (a) 14,955
17,300 Nashville, Tennessee, Metropolitan Airport Authority, Revenue Refunding
and Improvement Bonds, VRDN, 3.65% due 7/01/2019 (a) 17,300
Tennessee State (Putters):
7,315 Series 2A, 3.55% due 3/15/1995 7,315
7,600 Series 2B, 3.55% due 3/15/1995 7,600
Volunteer State Student Funding Corporation, Tennessee, Student Loan
Revenue Bonds, VRDN (a):
12,000 Series A-1, 3.75% due 12/01/2017 12,000
54,000 Series A-3, 3.75% due 12/01/2017 54,000
Texas -- 10,000 Brazos River, Texas, PCR, Refunding (Texas Utilities Electric Co.), AMT, CP,
10.2% Series B, 3.40% due 11/14/1994 10,000
23,500 Brazos, Texas, Higher Education Authority Incorporated, Student Loan
Revenue Bonds, AMT, Series B-1, 3.80% due 6/01/1995 23,500
4,000 Corpus Christi, Texas, IDR (Dedietrich USA Incorporated Project), VRDN,
AMT, 3.65% due 11/01/2008 (a) 4,000
9,110 Galveston County, Texas, Health Facilities Development Corporation Revenue
Bonds (Devereux Foundation Project), VRDN, 3.85% due 1/01/2016 (a) 9,110
17,000 Grapevine, Texas, IDR, Airport Revenue Refunding Bonds (Southern Air
Transportation Project), VRDN, 3.65% due 3/01/2010 (a) 17,000
Gulf Coast Waste Disposal Authority, Texas, PCR (Amoco Oil Co. Project),
VRDN, AMT (a):
22,500 3.55% due 5/01/2023 22,500
2,800 3.55% due 6/01/2024 2,800
24,700 Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Memorial Hospital Systems Project), CP, Series
B, 3.30% due 12/05/1994 24,700
Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds, VRDN (a):
152,300 (Methodist Hospital), 3.80% due 12/01/2025 152,300
4,800 (Saint Luke's Episcopal Hospital), Series B, 3.80% due 2/15/2016 4,800
16,900 (Saint Luke's Episcopal Hospital), Series C, 3.80% due 2/15/2016 16,900
1,500 (Saint Luke's Episcopal Hospital), Series D, 3.80% due 2/15/2016 1,500
7,100 Harris County, Texas, Industrial Development Corporation, PCR (Exxon
Project), DATES, Series A, 3.65% due 3/01/2024 (a) 7,100
Harris County, Texas, Toll Road Revenue Bonds, VRDN (a):
26,880 Sublien B, 3.55% due 8/01/2015 26,880
8,195 Sublien C, 3.55% due 8/01/2015 8,195
19,980 Sublien D, 3.55% due 8/01/2015 19,980
<PAGE> 7,000 Houston, Texas, Public Improvement Bonds, VRDN, Series A, 3.55% due
4/01/2013 (a) 7,000
54,150 Houston, Texas, TRAN, 4.50% due 6/29/1995 54,500
22,800 Lubbock, Texas, Health Facilities Development Corporation Revenue Bonds
(Saint Joseph Health System), VRDN, Series A, 3.60% due 7/01/2013 (a) 22,800
North Texas Higher Education Authority Incorporated, Student Loan
Revenue Bonds, VRDN (a):
5,000 AMT, 3.85% due 12/01/2005 5,000
13,700 AMT, Series F, 3.50% due 4/01/2020 13,700
3,000 Refunding, 3.75% due 3/01/1999 3,000
23,700 Refunding, 3.50% due 3/01/2005 23,700
29,000 Refunding, Series A, 3.75% due 4/01/2005 29,000
5,000 Refunding, Series A, 3.75% due 4/01/2020 5,000
18,500 Panhandle Plains, Texas, Higher Education Authority Incorporated,
Student Loan Revenue Bonds, AMT, Series A, 3.80% due 6/01/1995 18,500
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Texas $ 4,100 Port Arthur, Texas, Navigational District, PCR, Refunding (Texaco Inc.
(concluded) Project), VRDN, 3.50% due 10/01/2024 (a) $ 4,100
San Antonio, Texas, Electric and Gas Revenue Bonds, CP, Series A:
6,900 2.80% due 10/12/1994 6,900
5,000 3.10% due 11/08/1994 5,000
5,000 3.15% due 11/17/1994 5,000
18,700 San Antonio, Texas, Higher Education Authority Revenue Refunding Bonds
(Trinity University Project), VRDN, 3.60% due 4/01/2004 (a) 18,700
6,900 Southwest Texas, Higher Education Authority Incorporated, Revenue
Refunding Bonds (Southern Methodist University), VRDN, 3.45% due
7/01/2015 (a) 6,900
Texas A&M University, University System Revenue Bonds (Financing
System), CP, Series B:
6,500 3.05% due 10/17/1994 6,500
11,000 3% due 11/14/1994 11,000
25,000 3.15% due 11/28/1994 25,000
20,400 Texas State, Multi-Modal Water Development Board, VRDN, Series A, 3.80%
due 3/01/2015 (a) 20,400
Texas State, Public Finance Authority Revenue Bonds, CP:
19,000 Series A, 2.50% due 10/27/1994 19,000
10,000 Series A, 3.05% due 11/07/1994 10,000
15,300 Series B, 3.15% due 11/09/1994 15,300
28,360 Travis County, Texas, Health Facility Development Corporation Revenue Bonds
(Daughters of Charity-Seton Medical Center), VRDN, 3.75% due 11/01/2013 (a) 28,360
Waco, Texas, Health Facilities Development Corporation, Health Facilities
Revenue Bonds (Daughters of Charity-Providence Hospital):
18,775 3.75% due 11/01/2013 18,775
12,400 Series 88A, 3.75% due 11/01/2018 12,400
<PAGE>
Utah -- 1.3% Intermountain Power Agency, Utah, Power Supply Revenue Bonds:
10,000 CP, Series E, 3.20% due 10/20/1994 10,000
19,400 CP, Series E, 3.15% due 10/26/1994 19,400
15,000 Series E, 3.75% due 3/15/1995 15,000
22,400 Series F, 3.75% due 3/15/1995 22,400
6,200 Salt Lake County, Utah, PCR, Refunding (Service Station Holdings Project),
Series B, VRDN, 3.85% due 8/01/2007 (a) 6,200
6,000 Utah State Board of Regents, Student Loan Revenue Bonds, VRDN, AMT,
Series C, 3.75% due 11/01/2013 (a) 6,000
18,700 Utah State, GO, Tender Options, 3.20% due 10/06/1994 18,700
Vermont -- 1,100 Vermont Higher Educational and Health Buildings, Financing Agency Revenue
0.0% Bonds (VHA-New England), VRDN, Series G, 3.70% due 12/01/2025 (a) 1,100
Virginia -- 5,330 Fairfax County, Virginia, Redevelopment and Housing Authority, M/F Housing
2.2% Revenue Bonds (Chase Commons Apartments Project), VRDN, 3.675%
due 12/01/2006 (a) 5,330
20,200 Peninsula Ports Authority, Virginia, Revenue Refunding Bonds (Port
Facility-Shell Oil Company Project), UPDATES, Series A, 3.55% due
12/01/2005 (a) 20,200
2,400 Roanoke, Virginia, IDA, Hospital Revenue Bonds (Roanoke Memorial
Hospital Project), VRDN, Series A, 3.80% due 7/01/2017 (a) 2,400
Rockingham County, Virginia, IDA, Revenue Bonds, VRDN (a):
1,000 4.05% due 10/01/2022 1,000
16,000 (Merck & Company Project), Series A, 3.80% due 10/01/2020 16,000
Virginia State Housing Development Authority, Commonwealth Mortgage
Revenue Bonds:
71,800 AMT, Series I, Sub-Series I, 2.80% due 11/04/1994 71,801
19,500 Series A, Sub-Series A, 2.80% due 11/04/1994 19,500
27,400 Series J, Sub-Series J, 2.70% due 11/04/1994 27,400
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Washington $ 9,400 Washington State Housing Finance Commission, S/F Mortgage Revenue
- -- 1.4% Refunding Bonds (Mortgage-Backed Securities Program), AMT, Series F,
3.85% due 6/15/1995 $ 9,400
Washington State Public Power Supply System, Revenue Refunding Bonds,
VRDN (a):
21,100 (Nuclear Project No. 1), Series 1A-3, 3.65% due 7/01/2017 21,100
24,500 (Nuclear Project No. 3), Series 3A-1, 3.45% due 7/01/2018 24,500
9,300 (Nuclear Project No. 3), Series 3A-2, 3.50% due 7/01/2018 9,300
Washington Student Loan Finance Association Revenue Bonds (Guaranteed
Student Loan Program), VRDN (a):
12,100 AMT, Series A, 3.65% due 12/01/2002 12,100
6,000 AMT, Series B, 3.65% due 12/01/2002 6,000
10,680 AMT, Series B, 3.80% due 1/01/2004 10,680
10,400 Series A, 3.70% due 1/01/2001 10,400
<PAGE>
West Virginia 19,500 Grant County, West Virginia, PCR (Virginia Electric Power Co.), CP,
- -- 0.4% 3.20% due 10/27/1994 19,500
11,220 Hancock County, West Virginia, County Commission, IDR, Refunding (The
Boc Group Inc. Project), VRDN, 3.75% due 8/01/2005 (a) 11,220
Wisconsin -- Eagle Tax Exempt Trust, Wisconsin, VRDN (a):
0.8% 30,300 Series 1993-H, 3.35% due 11/01/2008 30,300
7,200 Series 94, Class 4901, 3.87% due 9/01/2015 7,200
16,000 Sheboygan, Wisconsin, PCR, Refunding (Wisconsin Power and Light Company
Project), VRDN, Series A, 3.80% due 9/01/2015 (a) 16,000
2,300 Wisconsin State Health Facilities Authority Revenue Bonds (Saint Mary's
Hospital of Milwaukee Daughters of Charity), VRDN, 3.75% due 11/06/2016 (a) 2,300
Wyoming -- Lincoln County, Wyoming, PCR (Exxon Project):
1.2% 15,000 CP, AMT, Series B, 3.40% due 12/05/1994 15,010
18,600 CP, AMT, Series C, 3.25% due 10/12/1994 18,600
1,500 DATES, Series B, 3.65% due 11/01/2014 (a) 1,500
1,400 DATES, Series D, 3.65% due 11/01/2014 (a) 1,400
Sublette County, Wyoming, PCR (Exxon Project), AMT, CP:
1,500 Series A, 3.10% due 10/13/1994 1,500
10,000 Series A, 3.30% due 10/13/1994 10,000
6,600 Series B, 3.30% due 10/12/1994 6,600
17,500 Sweetwater County, Wyoming, PCR, Refunding (Pacific Corporation Project),
VRDN, 3.80% due 7/01/2015 (a) 17,500
Uinta County, Wyoming, PCR:
10,000 (Amoco Oil Company Project), Series A, 2.90% due 12/01/1994 10,000
2,700 Refunding (Chevron USA Inc. Project), VRDN, 3.50% due 8/15/2020 (a) 2,700
Total Investments (Cost--$7,329,584*)--99.6% 7,329,584
Other Assets Less Liabilities--0.4% 31,535
----------
Net Assets--100.0% $7,361,119
==========
<FN>
(a)The interest rate is subject to change periodically based on certain indexes.
The interest rate shown is the interest rate in effect at September 30, 1994.
(b)Prerefunded; to be called.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1994
<S> <C> <C>
Assets:
Investments, at value (identified cost--$7,329,584,278) (Note 1a) $ 7,329,584,278
Cash 458,760
Receivables:
Interest $ 45,278,020
Securities sold 366,717 45,644,737
---------------
Prepaid registration fees and other assets (Note 1d) 196,682
---------------
Total assets 7,375,884,457
---------------
Liabilities:
Payables:
Securities purchased 9,809,746
Investment adviser (Note 2) 2,377,608
Distributor (Note 2) 1,867,639
Beneficial interest redeemed 5,458
Dividends (Note 1e) 3,509 14,063,960
---------------
Accrued expenses and other liabilities 701,562
---------------
Total liabilities 14,765,522
---------------
Net Assets $ 7,361,118,935
===============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares
authorized $ 736,622,359
Paid-in capital in excess of par 6,629,601,225
Undistributed investment income--net 248,537
Accumulated realized capital losses--net (Note 4) (5,353,186)
---------------
Net Assets--Equivalent to $1.00 per share based on 7,366,223,584 shares of
beneficial interest outstanding $ 7,361,118,935
===============
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1994
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 109,589,437
Expenses:
Investment advisory fees (Note 2) $ 14,771,783
Distribution fees (Note 2) 4,735,135
Transfer agent fees (Note 2) 737,135
Registration fees (Note 1d) 276,289
Accounting services (Note 2) 166,804
Custodian fees 96,784
Printing and shareholder reports 76,371
Professional fees 50,965
Trustees' fees and expenses 23,778
Pricing fees 22,371
Other 42,987
---------------
Total expenses 21,000,402
---------------
Investment income--net 88,589,035
Realized Loss on Investments--Net (Note 1c) (779,750)
---------------
Net Increase in Net Assets Resulting from Operations $ 87,809,285
===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
For the Six For the Year
CMA TAX-EXEMPT FUND Months Ended Ended
STATEMENTS OF CHANGES IN NET ASSETS Sept. 30, 1994 March 31,1994
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Investment income--net $ 88,589,035 $ 148,192,450
Realized gain (loss) on investments--net (779,750) 51,826
--------------- ---------------
Net increase in net assets resulting from operations 87,809,285 148,244,276
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net (88,580,443) (147,847,067)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (88,580,443) (147,847,067)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 10,836,271,717 25,164,582,052
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 88,579,878 147,842,729
--------------- ---------------
10,924,851,595 25,312,424,781
Cost of shares redeemed (11,474,921,113) (24,927,916,358)
--------------- ---------------
Net increase (decrease) in net assets derived from beneficial
interest transactions (550,069,518) 384,508,423
--------------- ---------------
Net Assets:
Total increase (decrease) in net assets (550,840,676) 384,905,632
Beginning of period 7,911,959,611 7,527,053,979
--------------- ---------------
End of period* $ 7,361,118,935 $ 7,911,959,611
=============== ===============
<FN>
*Undistributed investment income--net $ 248,537 $ 239,945
=============== ===============
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Six
Months Ended For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: Sept. 30, 1994 1994 1993 1992 1991
<C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .01 .02 .02 .04 .05
---------- ---------- ---------- ---------- ----------
Total from investment operations .01 .02 .02 .04 .05
---------- ---------- ---------- ---------- ----------
Less dividends:
Investment income--net (.01) (.02) (.02) (.04) (.05)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 2.32%* 1.96% 2.36% 3.76% 5.39%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses, excluding distribution fees .43%* .42% .42% .42% .41%
========== ========== ========== ========== ==========
Expenses .55%* .55% .54% .54% .54%
========== ========== ========== ========== ==========
Investment income and realized gain on
investments--net 2.32%* 1.94% 2.33% 3.70% 5.24%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of period (in thousands) $7,361,119 $7,911,960 $7,527,054 $7,874,437 $8,695,795
========== ========== ========== ========== ==========
<FN>
*Annualized.
See Notes to Financial Statements.
</TABLE>
<PAGE>
CMA TAX-EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Tax-Exempt Fund (the "Fund") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment
company. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments--Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of a variable rate demand instrument is deemed to be
the next coupon date on which the interest rate is to be adjusted.
In the case of a floating rate instrument, the remaining maturity is
the demand notice payment period.
(b) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax provision is
required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
premium and discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends to shareholders--The Fund declares dividends daily and
reinvests daily such dividends (net of non-resident alien tax
withheld) in additional fund shares at net asset value. Dividends
are declared from the total of net investment income, excluding
discounts earned other than original issue discounts. Net realized
capital gains, if any, are normally distributed annually after
deducting prior years' loss carryforward. The Fund may distribute
capital gains more frequently than annually in order to maintain the
Fund's net asset value at $1.00 per share.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co. ("ML & Co."). The limited partners
are ML & Co. and Fund Asset Management, Inc. ("FAMI"), which is also
an indirect wholly-owned subsidiary of ML & Co.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets at the following annual rates: 0.50%
of the Fund's average daily net assets not exceeding $500 million;
0.425% of the average daily net assets in excess of $500 million but
not exceeding $1 billion; and 0.375% of the average daily net assets
in excess of $1 billion. The Investment Advisory Agreement obligates
FAM to reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets, and 1.5% of the average daily
net assets in excess thereof. No fee payment will be made to the
Adviser during any year which will cause such expenses to exceed the
pro rata expense limitation at the time of such payment.
CMA TAX-EXEMPT FUND
NOTE TO FINANCIAL STATEMENTS (CONCLUDED)
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") receives a
distribution fee from the Fund at the end of each month at the
annual rate of 0.125% of the average daily net assets of the Fund.
The distribution fee is to compensate MLPF&S financial consultants
and other directly involved branch office personnel for selling
shares of the Fund and for providing direct personal services to
shareholders. The distribution fee is not compensation for the
administrative and operational services rendered to the Fund by
MLPF&S in processing share orders and administering shareholder
accounts.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, FAMI, PSI, MLPF&S, FDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the periods
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares and cost of shares
redeemed, respectively, since shares are recorded at $1.00 per
share.
<PAGE>
4. Capital Loss Carryforward:
At March 31, 1994, the Fund had a net capital loss carryforward of
approximately $4,537,000, of which $2,969,000 expires in 1997,
$1,358,000 expires in 1998, and $210,000 expires in 1999. These
amounts will be available to offset like amounts of any future
taxable gains.
CMA TAX-EXEMPT FUND
Officers and Trustees
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Donald C. Burke--Vice President
Peter J. Hayes--Vice President
Kenneth A. Jacob--Vice President
Helen Marie Sheehan--Vice President
Gerald M. Richard--Treasurer
Robert Harris--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 1713
Boston, Massachusetts 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 221-7210*
[FN]
*For inquiries regarding your CMA account,
call (800) CMA-INFO [(800) 262-4636].
