CMA TAX-EXEMPT FUND
Semi-Annual Report
September 30, 1997
[FUND LOGO]
[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. Statements and other information herein are as
dated and are subject to change.
CMA Tax-Exempt Fund
Box 9011
Princeton, NJ 08543-9011 #11214 -- 9/97
[FUND LOGO]
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the six-month period ended September 30, 1997, CMA Tax-Exempt Fund
paid share-holders a net annualized yield of 3.19%*. As of September
30, 1997, the Fund's 7-day yield was 3.43%.
Investment Outlook and Strategy
Short-term interest rates declined during the six-month period ended
September 30, 1997, since investors were satisfied that economic
growth was slowing dramatically from the rapid first-quarter pace.
Economic data released during the period was so favorable relative to
both the economy and inflation that by the end of the period some
investors had begun to factor in a possible easing of monetary policy.
Another result of the positive inflationary data was that the yield
curve assumed a flatter shape than it had during the six-month period
ended March 31, 1997. For example, during the six-month period ended
September 30, 1997, the yield on the three-month US Treasury bill fell
22 basis points (0.22%), while the yield on the one-year US Treasury
bill fell 56 basis points, thus narrowing the spread between the two.
This narrowing was even more dramatic for longer-term securities,
reflecting investors' more modest expectations about inflation.
Interest rates on short-term tax-exempt securities also fell during
the six-month period ended September 30, 1997, although they
experienced periods of volatility resulting from supply and demand
imbalances. The heavier-than-expected tax-related redemptions which
occurred at the end of April continued into May, keeping interest
rates on variable rate securities high for most of the first several
months of the period. In fact, demand for short-term tax-exempt
products did not materialize again until the beginning of July, an
event that was short lived in an environment of heavy new-issue
volume.
Assets of the tax-exempt money market fund industry fell from $148.2
billion at the outset of the period to $143.7 billion by June 1, 1997,
only to rise for the remainder of the period to close marginally
higher at approximately $151.3 billion on September 30, 1997. However,
new-issue supply far outpaced demand as the vast majority of new
short-term municipal supply is issued during this time of year. New
issuance of short-term tax-exempt securities was $36.7 billion for the
period, an increase of 117% over the $16.9 billion brought to market
during the six-month period ended March 31, 1997. In addition to large
fixed-rate note transactions issued by states including California,
Texas, Wisconsin and Colorado, issuance of variable rate securities
also increased for the period as issuers became more comfortable with
the nature of adjustable rate debt. This new issuance needed time to
be absorbed into the market, thus causing most of the fall in interest
rates to occur later in the period. Additionally, this surge in new-
issue supply kept interest rates on short-term tax-exempt securities
from falling as dramatically as those on US Treasury bills.
We maintained the average portfolio maturity of CMA Tax-Exempt Fund in
the 30-day range for the first several months of the six-month period
in order to seek to take advantage of the flat-to-inverted yield curve
which persisted during that time. However, as new issuance came to
market in late summer and demand began to increase, we began to
selectively extend the average portfolio maturity of the Fund with the
purchase of nine-month--one-year fixed-rate notes, especially those
issued by the states of Texas and California. This was prompted by the
fact that we believed new issuance would be low in the upcoming
months, as well as by our expectation that the Federal Reserve Board
would keep interest rates unchanged. Thus, we ended the period in the
mid 50-day range. We expect to extend the Fund's average portfolio
maturity to the 65-day range in October and November as opportunities
present themselves. We expect upcoming months to present us with
traditionally low new issuance and heavy demand, especially in early
January, providing the impetus for a more aggressive portfolio
strategy. Credit quality and diversification remain paramount to the
Fund as we seek to offer shareholders an attractive tax-exempt money
market yield.
In Conclusion
We thank you for your continued support of CMA Tax-Exempt Fund, and we
look forward to serving your investment needs in the months and years
ahead.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/PETER J. HAYES
Peter J. Hayes
Vice President and Portfolio Manager
November 4, 1997
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after
all expenses.
<TABLE>
<CAPTION>
CMA Tax-Exempt Fund
Schedule of Investments as of September 30, 1997 (in Thousands)
Face Value
State Amount Issue (Note 1a)
<S> <C> <C> <C>
Alabama -- $66,300 Birmingham, Alabama, Medical Clinic Board Revenue Bonds (U.A.H.S.F.),
2.1% VRDN, 4.10% due 12/01/2026 (a) $66,300
20,000 Birmingham, Alabama, Refunding, VRDN, Series A, 4.05% due 10/01/2015 (a)(e) 20,000
Columbia, Alabama, IDB, PCR, Refunding (Alabama Power Co. Project), VRDN (a):
25,000 Series A, 4.05% due 5/01/2022 25,000
9,000 Series E, 4% due 10/01/2022 9,000
7,600 McIntosh, Alabama, IDB, PCR (Ciba-Geigy Corporation Project), VRDN,
Series A, 4% due 12/01/2003 (a) 7,600
9,170 Mobile, Alabama, IDB, PCR (International Paper Company Project),
Series A, 3.85% due 11/15/1997 9,169
9,905 Montgomery, Alabama, Special Care Facilities Financing Authority, Health
Care Facilities Revenue Bonds (Saint Margaret's Hospital -- Daughters
of Charity), VRDN, 4.10% due 11/01/2013 (a) 9,905
15,000 Parrish, Alabama, IDB, PCR, Refunding (Alabama Power Co. Project), VRDN,
4.05% due 6/01/2015 (a) 15,000
15,000 Stevenson, Alabama, IDB, Environmental Improvement Revenue Bonds (Mead
Corporation Project), VRDN, 4.15% due 1/01/2031 (a) 15,000
Alaska -- 1.2% 10,400 Alaska Industrial Development and Export Authority Revolving Fund, VRDN,
AMT, Series B, 4.10% due 4/01/2023 (a) 10,400
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Exxon Pipeline
Co. Project), VRDN (a):
25,700 Series A, 4% due 12/01/2033 25,700
30,000 Series B, 4% due 12/01/2033 30,000
34,500 Series C, 4% due 12/01/2033 34,500
Arizona -- 3.5% 26,300 Apache County, Arizona, IDA, IDR (Tucson Electric Power -- Springerville
Project), VRDN, Series B, 4.15% due 12/15/2018 (a) 26,300
10,200 Arizona Educational Loan Marketing Corporation Revenue Bonds, VRDN,
AMT, Series A, 4.15% due 3/01/2015 (a)(c) 10,200
4,300 Maricopa County, Arizona, IDA, Hospital Facilities Revenue Bonds
(Samaritan Health Service Hospital), VRDN, Series B-2, 4% due
12/01/2008 (a)(c) 4,300
6,000 Maricopa County, Arizona, IDA, IDR (Citizens Utilities), CP, 3.85% due
2/04/1998 6,000
21,500 Maricopa County, Arizona, PCR (El Paso Electric Co. Project), VRDN,
Series A, 4.15% due 7/01/2014 (a) 21,500
Maricopa County, Arizona, PCR, Refunding (Arizona Public Service Co.),
VRDN (a):
10,800 Series A, 4% due 5/01/2029 10,800
29,700 Series C, 4.05% due 5/01/2029 29,700
19,700 Series D, 4% due 5/01/2029 19,700
15,500 Series F, 4.10% due 5/01/2029 15,500
10,635 Mohave County, Arizona, IDA, IDR, CP, 3.85% due 2/04/1998 10,635
20,785 Phoenix, Arizona, Civic Improvement Corporation, Wastewater System Lease
Revenue Bonds, VRDN, 4.20% due 7/01/2003 (a) 20,785
6,200 Phoenix, Arizona, VRDN, UT, Series 95-2, 4% due 6/01/2020 (a) 6,200
2,300 Pinal County, Arizona, IDA, PCR (Magma Copper/Newmont Mining Corp.),
VRDN, 4.05% due 12/01/2009 (a) 2,300
Salt River Project, Arizona, Agricultural Improvement and Power
District, Electric System Revenue Promissory Notes, CP:
14,685 3.65% due 10/22/1997 14,685
30,400 3.80% due 11/13/1997 30,400
36,600 3.65% due 11/18/1997 36,600
26,589 3.85% due 11/20/1997 26,589
Arkansas -- 10,300 Arkansas State Development Finance Authority, Health Care Facilities
0.3% Revenue Bonds (Sisters of Mercy Health), VRDN, Series B, 4.05% due
6/01/2012 (a) 10,300
19,000 Little River County, Arkansas, Solid Waste Disposal Revenue Bonds
(Nekoosa Papers Incorporated Project), VRDN, AMT, 4.20% due
2/01/2025 (a) 19,000
California -- California Higher Education Loan Authority, Inc., Student Loan
4.4% Revenue Bonds (i):
41,425 AMT, Series C, 3.95% due 6/01/1998 41,425
3,250 Refunding, Series B, 4% due 7/01/1998 3,250
33,000 Refunding, VRDN, AMT, Series E-1, 4.10% due 12/01/2022 (a) 33,000
50,000 California Public Capital Improvements Financing Authority Revenue Bonds
(Pooled Loan Project), Series D, 3.80% due 12/15/1997 50,000
127,745 California State, RAN, 4.50% due 6/30/1998 128,370
17,505 Eastern Municipal Water District, California, Water and Sewer Revenue
Refunding Bonds, COP, VRDN, Series B, 4% due 7/01/2020 (a)(f) 17,505
20,000 Los Angeles County, California, Local Education Agency, COP,
TRAN, Series A, 4.50% due 6/30/1998 (g) 20,101
40,000 Los Angeles County, California, Metropolitan Transportation Authority
Revenue Bonds, MSTR, VRDN, Series 1, 4.15% due 7/01/2025 (a)(g) 40,000
11,800 San Diego, California, COP, TRAN, Area Local Government, 4.75%
due 10/01/1997 (g) 11,800
22,600 Tulare County, California, TRAN, 4.25% due 6/30/1998 22,673
Colorado -- Colorado Health Facilities Authority Revenue Bonds, VRDN (a):
0.8% 6,600 (North Colorado Medical Center), 4.05% due 5/15/2020 (c) 6,600
10,400 (Sisters of Charity Health Services), 4.05% due 5/15/2025 10,400
11,800 (Sisters of Charity Health Services), Series C, 4.05% due 5/15/2022 11,800
10,500 Denver, Colorado, City and County Airport Revenue Bonds, VRDN, AMT,
Series F, 4.25% due 11/15/2025 (a) 10,500
14,755 Palomino Park, Colorado, Assessment Lien Revenue Bonds (Public Improvements
Corporation), VRDN, 4% due 12/01/2035 (a) 14,755
Pitkin County, Colorado, IDR, Refunding (Aspen Skiing Co. Project), VRDN (a):
6,500 AMT, Series B, 4.10% due 4/01/2014 6,500
2,700 Series A, 4% due 4/01/2016 2,700
8,000 Westminster, Colorado, IDR, Refunding (Ball Corp. Project), VRDN, 4.05%
due 6/01/2005 (a) 8,000
Connecticut -- 17,900 Connecticut State, HFA, Housing Mortgage Finance Program, VRDN, Series G,
1.0% 4% due 5/15/2018 (a)(e) 17,900
22,000 Connecticut State Special Assessment, Unemployment Compensation,
Advanced Fund Revenue Bonds (Connecticut Unemployment), Series C,
3.90% due 7/01/1998 (f) 22,000
6,800 Connecticut State Special Tax Obligation Revenue Bonds (Transportation
Infrastructure), VRDN, Second Lien, Series 1, 4.10% due 12/01/2010 (a) 6,800
Eagle Tax-Exempt Trust, VRDN (a):
23,700 Connecticut Resource, Series 96A, Class 0701, 4.23% due 11/15/2004 23,700
13,200 Connecticut State, Series 94, Class 071, 4.18% due 8/15/2012 13,200
Delaware -- Delaware State, EDA, IDR, VRDN, AMT, Series B (a):
0.7% 28,900 (Delaware City Waste Recovery), 3.80% due 11/20/1997 (b) 28,900
24,000 Refunding (Delaware Clean Power Project), 4.10% due 8/01/2029 24,000
Delaware State, EDA, Revenue Bonds (Delmarva Power & Light Co. Project),
VRDN, AMT (a):
4,400 4.15% due 10/01/2017 4,400
2,100 Series A, 4.15% due 10/01/2017 2,100
District of District of Columbia, General Fund Recovery Bonds, VRDN, UT (a):
Columbia -- 13,900 Series B-1, 4.05% due 6/01/2003 13,900
1.0% 17,300 Series B-3, 4.05% due 6/01/2003 17,300
17,400 District of Columbia, Hospital Revenue Bonds (Providence Hospital --
Daughters of Charity), VRDN, Series 89-A, 4.10% due 12/01/2019 (a) 17,400
11,100 District of Columbia, Revenue Bonds (George Washington University),
VRDN, Series A, 4.25% due 3/01/2006 (a) 11,100
26,700 Eagle Tax-Exempt Trust, Washington DC, VRDN, Series 94-A, 4.23%
due 6/01/2005 (a) 26,700
Florida -- 3.3% 3,400 Broward County, Florida, HFA, M/F Housing Revenue Bonds (Margate
Investments Project), VRDN, 4.15% due 11/01/2005 (a) 3,400
33,245 Dade County, Florida, Aviation Revenue Refunding Bonds, VRDN, Series V,
4.05% due 10/01/2007 (a) 33,245
3,900 Dade County, Florida, IDA, Exempt Facilities Revenue Refunding Bonds
(Florida Power and Light Co.), VRDN, 4% due 6/01/2021 (a) 3,900
4,300 Dade County, Florida, Special Obligation, Capital Asset Acquisition
Bonds, VRDN, 4.35% due 10/01/2010 (a) 4,300
74,900 Dade County, Florida, Water and Sewer System Revenue Bonds, VRDN, 4.10%
due 10/05/2022 (a)(f) 74,900
23,700 Eagle Tax-Exempt Trust, Florida, Turnpike 95A, VRDN, Series 96C, Class 0903,
3.80% due 7/01/2025 (a) 23,700
24,195 Florida State Municipal Power Agency, Revenue Refunding Bonds (Stanton
Project), VRDN, 4% due 10/01/2019 (a)(c) 24,195
Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric
Company Project), VRDN (a):
10,400 3.95% due 5/15/2018 10,400
6,300 4% due 9/01/2025 6,300
Jacksonville, Florida, Electric Authority Revenue Bonds, CP:
20,800 3.65% due 10/06/1997 20,800
17,700 3.65% due 10/07/1997 17,700
13,300 3.55% due 10/09/1997 13,300
4,900 Saint Lucie County, Florida, Solid Waste Disposal Revenue Bonds (Florida
Power & Light Co. Project), VRDN, AMT, 4.10% due 1/01/2027 (a) 4,900
Sunshine State Governmental Finance Commission, Florida, Revenue Bonds, CP:
11,625 3.65% due 10/06/1997 11,625
14,700 3.65% due 11/19/1997 14,700
6,660 Volusia County, Florida, Health Facilities Authority Revenue Bonds
(Pooled Hospital Loan Program), ACES, 4.10% due 11/01/2015 (a)(f) 6,660
Georgia -- 4.1% 32,600 Burke County, Georgia, Development Authority, PCR (Georgia Power
Company -- Plant Vogtle Project), VRDN, 2nd Series, 4.05% due
4/01/2025 (a) 32,600
8,500 Burke County, Georgia, Development Authority, PCR (Oglethorpe Power
Corporation), VRDN, Series A, 4.10% due 1/01/2016 (a)(f) 8,500
18,000 Burke County, Georgia, Development Authority, PCR, Refunding (Oglethorpe
Power Corporation -- Plant Vogtle Project), Series A, 3.60% due 12/01/1997 (e) 18,000
41,000 Cobb County, Georgia, TAN, UT, 4% due 12/31/1997 41,031
Eagle Tax-Exempt Trust, VRDN (a):
9,500 3.75% due 11/01/2005 9,500
9,500 3.80% due 7/01/2020 9,500
3,500 Georgia HFA, Series 88A, 3.85% due 12/01/2016 3,500
45,000 Fulton County, Georgia, TAN, 4.25% due 12/31/1997 45,057
8,938 Georgia Municipal Association, Pooled Bonds, COP, VRDN, 4.05% due
12/15/2020 (a)(c) 8,938
21,400 Georgia Municipal Gas Authority Revenue Bonds (Gas Portfolio II Project),
VRDN, Series A, 4.15% due 11/01/2006 (a) 21,400
Georgia State Residential Finance Authority, Home Ownership Mortgage
Bonds, AMT, Series A (d):
3,690 3.85% due 12/01/1997 3,690
4,605 3.85% due 3/01/1998 4,605
13,145 Georgia State, Tender Options, VRDN, Series 79-A, 3.85% due 8/01/2003 (a) 13,145
Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax Revenue
Bonds, VRDN (a):
7,005 4.25% due 7/01/2002 7,005
7,340 4.25% due 7/01/2004 7,340
Monroe County, Georgia, Development Authority, PCR (Georgia Power Co.),
VRDN (a):
38,000 1st Series, 4.05% due 7/01/2025 38,000
24,900 2nd Series, 4.10% due 7/01/2025 24,900
Municipal Electric Authority, Georgia (Project One), VRDN (a):
18,300 Series B, 4.05% due 1/01/2016 18,300
13,000 Series C, 4.05% due 1/01/2020 13,000
20,000 Sub-Series E, 4.10% due 1/01/2026 20,000
Idaho -- 0.3% 22,600 Idaho Health Facilities Authority Revenue Bonds (Pooled Financing
Program), ACES, 4.15% due 10/01/2010 (a) 22,600
Illinois -- 9.8% 7,000 Chicago, Illinois, IDR (Enterprise Center VIII Project), VRDN, AMT,
4.30% due 6/01/2022 (a) 7,000
Chicago, Illinois, O'Hare International Airport Revenue Bonds (American
Airlines) (a):
10,700 DATES, Series B, 4.10% due 12/01/2017 10,700
4,500 DATES, Series C, 4.10% due 12/01/2017 4,500
13,000 DATES, Series D, 4.10% due 12/01/2017 13,000
20,200 VRDN, Series A, 4.10% due 12/01/2017 20,200
Chicago, Illinois, O'Hare International Airport Revenue Bonds (General
Airport Second Lien), VRDN (a):
6,630 Series B, 4.10% due 1/01/2015 6,630
20,500 Series C, 4.05% due 1/01/2018 20,500
14,800 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue Bonds
(Compagnie Nationale -- Air France), VRDN, AMT, 4.25% due 5/01/2018 (a) 14,800
24,000 Chicago, Illinois, Park District, Tax Anticipation Warrants, 4.75% due 9/21/1998 24,200
121,757 Chicago, Illinois, Tender Notes, 3.55% due 10/31/1997 121,757
18,100 Chicago, Illinois, VRDN, Series B, 4.05% due 1/01/2012 (a) 18,100
46,000 Cook County, Illinois, VRDN, 4.15% due 12/01/2001 (a) 46,000
13,800 Eagle Tax-Exempt Trust, Chicago, Illinois, VRDN, Series 95, Class 7090, 4.23%
due 1/01/2024 (a) 13,800
Illinois Development Finance Authority, PCR, Refunding (Commonwealth
Edison Company Project), VRDN, Series B (a):
25,000 4.05% due 12/01/2006 (e) 25,000
42,200 4% due 10/15/2014 42,200
6,000 Illinois Development Finance Authority, Revenue Refunding Bonds (Olin
Corporation Project), VRDN, Series A, 4% due 6/01/2004 (a) 6,000
Illinois Educational Facilities Authority Revenue Bonds, VRDN (a):
16,800 (Art Institute of Chicago), 4.10% due 3/01/2027 16,800
5,100 (Chicago Historical Society), 4.05% due 12/01/2025 5,100
26,700 (Illinois Institute of Technology), Series A, 4.05% due 9/01/2025 26,700
Illinois Health Facilities Authority Revenue Bonds (a):
6,900 (Central Dupage Healthcorp. Project), VRDN, 4% due 11/01/2020 6,900
13,200 (Decatur Memorial Hospital Project), VRDN, Series A, 4.10% due
11/15/2024 (c) 13,200
29,550 (Franciscan Sisters Health Service), VRDN, 4.05% due 1/01/2018 29,550
8,500 (Hospital Sisters Services, Inc.), UPDATES, Series E, 4.10% due
12/01/2014 (c) 8,500
41,800 (Northwest Community Hospital), VRDN, 4.05% due 7/01/2025 41,800
7,000 (Pooled Financing Program), VRDN, Series F, 4.05% due 8/01/2015 7,000
29,600 Refunding (Advocate Health Care), VRDN, Series B, 4.15% due 8/15/2022 29,600
48,500 (Resurrection Health Care System), VRDN, 4% due 5/01/2011 48,500
Illinois Health Facilities Authority Revenue Bonds (Evanston Hospital
Corporation Project):
12,000 CP, 3.85% due 10/15/1997 12,000
30,000 CP, 3.65% due 10/31/1997 30,000
15,000 CP, 3.70% due 12/01/1997 15,000
12,000 CP, Series A, 3.90% due 7/31/1998 12,000
10,000 Series B, 3.95% due 4/30/1998 10,000
10,000 Series C, 3.95% due 4/30/1998 10,000
10,000 Series D, 3.95% due 4/30/1998 10,000
41,140 Illinois Housing Development Authority Revenue Bonds (Homeowner
Mortgage), AMT, Sub-Series B-2, 4.15% due 7/07/1998 41,140
18,815 Illinois State, GO, VRDN, UT, Series 60, 4.20% due 8/01/2019 (a)(c) 18,815
4,900 Illinois Student Assistance Commission, Student Loan Revenue Bonds,
VRDN, AMT, Series A, 4.15% due 3/01/2006 (a) 4,900
21,350 Regional Transportation Authority, Illinois, VRDN, Series 82, 4.20% due
6/01/2025 (a)(c) 21,350
11,100 Southwestern Illinois Development Authority, Solid Waste Disposal Revenue
Bonds (Shell Oil Co. -- Wood River Project), VRDN, AMT, 4.10% due
8/01/2021 (a) 11,100
Indiana -- 4.3% 3,200 Elkhardt County, Indiana, Mortgage Revenue Bonds (Hubbard Hill Estates),
VRDN, Series A, 4% due 7/01/2027 (a) 3,200
28,660 Evansville, Indiana, Hospital Authority Revenue Bonds (Saint Mary's Medical
Center of Evansville Inc. -- Daughters of Charity), VRDN, 4.10% due
11/01/2013 (a) 28,660
Fort Wayne, Indiana, Hospital Authority Revenue Bonds (Parkview Memorial
Hospital), VRDN (a):
1,645 Series B, 4.05% due 1/01/2016 1,645
2,700 Series B, 4.05% due 1/01/2020 2,700
3,505 Series C, 4.05% due 1/01/2016 3,505
5,670 Series D, 4.05% due 1/01/2016 5,670
87,200 Indiana Bond Bank, Advance Funding Notes, Series A-2, 4.25% due
1/21/1998 87,343
Indiana Health Facilities Financing Authority, Hospital Revenue Bonds (a):
20,700 (Clarian Health Partners Inc), VRDN, Series B, 4.15% due 2/15/2026 20,700
15,000 (Community Hospitals Project), VRDN, Series A, 4.20% due 7/01/2027 15,000
5,400 (Daughters of Charity National Health System), ACES, Series A, 4.10% due
11/01/2022 5,400
1,700 (Daughters of Charity National Health System), ACES, Series B, 4.10% due
11/01/2022 1,700
18,200 Refunding (Clarian Health Partners Inc.), VRDN, Series A, 4.15% due
2/15/2026 (c) 18,200
11,750 Indiana Health Facilities Financing Authority Revenue Bonds (Capital
Access Designated Pool), VRDN, 4.05% due 1/01/2012 (a) 11,750
Indiana Secondary Market Educational Loans Incorporated, Student Loan
Revenue Bonds, VRDN, AMT, Series B (a)(e):
26,900 4.10% due 12/01/2013 26,900
22,500 4.10% due 12/01/2014 22,500
Jasper County, Indiana, PCR, Refunding (Northern Indiana Public Service Co.),
VRDN (a):
8,000 Series B, 4% due 6/01/2013 8,000
20,700 Series C, 4% due 4/01/2019 20,700
45,325 Marion County, Indiana, Hospital Authority, Hospital Facility Revenue Bonds
(Saint Vincent's Hospital and Healthcare Center and Stress Center Inc. --
Daughters of Charity), VRDN, 4.10% due 11/01/2013 (a) 45,325
9,400 Princeton, Indiana, PCR, Refunding (PSI Energy Inc. Project), VRDN,
4% due 4/01/2022 (a) 9,400
22,200 Rockport, Indiana, PCR, Refunding (AEP Generating Co. Project), VRDN,
Series A, 4% due 7/01/2025 (a)(e) 22,200
Iowa -- 1.6% 5,000 Chillicothe, Iowa, PCR, Refunding (Iowa-Illinois Gas & Electric Project), VRDN,
4.10% due 1/01/2023 (a) 5,000
Iowa Finance Authority, Solid Waste Disposal Revenue Bonds (Cedar River
Paper Company Project), VRDN, Series A (a):
52,500 4.05% due 7/01/2023 52,500
42,000 AMT, 4.05% due 6/01/2024 42,000
20,500 AMT, 4.05% due 5/01/2025 20,500
3,700 Iowa Higher Education Loan Authority Revenue Bonds (Private College
Facilities), ACES, 4.15% due 12/01/2015 (a)(c) 3,700
14,500 Iowa Student Loan Liquidity Corporation, Student Loan Revenue Bonds,
VRDN, AMT, Series B, 4.20% due 12/01/2013 (a)(e) 14,500
Kansas -- 0.8% 9,100 Butler County, Kansas, Solid Waste Disposal Facilities Revenue Bonds
(Texaco Refining and Marketing Project), VRDN, AMT, Series A, 4.20%
due 8/01/2024 (a) 9,100
23,700 Kansas State, Department of Transportation, Highway Revenue Bonds, VRDN,
Series B, 4.05% due 9/01/2014 (a) 23,700
Wichita, Kansas, Hospital Revenue Bonds (CSJ Health Systems), VRDN (a):
1,000 4.25% due 10/01/2002 1,000
15,300 4.25% due 10/01/2008 15,300
15,355 Wichita, Kansas, Temporary Notes, UT, Series 192, 4.50% due 2/26/1998 15,398
Kentucky -- 5,100 Ashland, Kentucky, PCR (Calgon Carbon Corporation Project), VRDN, Series A,
2.6% 4.30% due 10/01/2006 (a) 5,100
22,700 Carroll County, Kentucky, Solid Waste Disposal Facilities Revenue Bonds
(Kentucky Utilities Co. Project), VRDN, AMT, Series A, 4.15% due
11/01/2024 (a) 22,700
Daviess County, Kentucky, Solid Waste Disposal Facilities Revenue Bonds
(Scott Paper Co. Project), VRDN, AMT (a):
29,100 Series A, 4.15% due 12/01/2023 29,100
9,300 Series A, 4.15% due 5/01/2024 9,300
19,800 Series B, 4.15% due 12/01/2023 19,800
21,700 Series B, 4.15% due 5/01/2024 21,700
13,000 Kentucky Asset/Liability Commission, General Fund Revenue Bonds, TRAN,
Series A, 4.50% due 6/25/1998 13,064
11,100 Kentucky Economic Development Finance Authority Revenue Bonds (Sisters
of Charity), VRDN, 4% due 11/01/2020 (a) 11,100
27,421 Kentucky Interlocal School Transportation Association, COP, TRAN, 4.09%
due 6/30/1998 27,433
30,805 Kentucky School Boards Finance Corporation, COP, TRAN, Series A, 4.25%
due 6/30/1998 30,874
26,800 Kentucky State Pollution Abatement and Water Resource Finance Authority,
PCR (Toyota Motors), VRDN, AMT, 4.20% due 8/13/2006 (a) 26,800
Louisiana -- 31,500 Calcasieu Parish, Louisiana, IDB, Environmental Revenue Refunding Bonds
2.1% (Citgo Petroleum Corporation), VRDN, AMT, 4.20% due 3/01/2025 (a) 31,500
8,800 Eagle Tax-Exempt Trust, Louisiana State, VRDN, Series 94, Class 3803, 4.23%
due 5/01/2008 (a) 8,800
17,550 East Baton Rouge Parish, Louisiana, PCR, Refunding (Exxon Project),
VRDN, 4.05% due 3/01/2022 (a) 17,550
5,200 Louisiana Public Facilities Authority, Hospital Revenue Bonds (Hospital
Equipment Financing and Refunding Program), VRDN, Series A, 4.35% due
12/01/2005 (a) 5,200
17,000 Louisiana Public Facilities Authority Revenue Bonds (Kenner Hotel Ltd.),
VRDN, 4% due 12/01/2015 (a) 17,000
35,050 Louisiana State Offshore Terminal Authority, Deepwater Port Revenue
Refunding Bonds (Loop Inc. -- First Stage), ACES, 4% due 9/01/2006 (a) 35,050
14,100 Plaquemines Parish, Louisiana, Environmental Revenue Bonds (BP
Exploration & Oil), VRDN, AMT, 4.15% due 10/01/2024 (a) 14,100
Saint Charles Parish, Louisiana, PCR, VRDN (a):
19,200 (Shell Oil Company -- Norco Project), AMT, 4.10% due 11/01/2021 19,200
4,400 (Shell Oil Company Project), 3.95% due 6/01/2005 4,400
21,000 (Shell Oil Company Project), AMT, Series A, 4.10% due 10/01/2022 21,000
4,400 South Louisiana Port Commission, Louisiana, Port Revenue Refunding Bonds
(Occidental Petroleum Corp. Project), VRDN, 4% due 7/01/2018 (a) 4,400
Maine -- 0.0% Maine Health and Higher Educational Facilities Authority Revenue Bonds
(VHA New England Inc.), VRDN (a)(e):
1,250 Series B, 4.15% due 12/01/2025 1,250
1,450 Series F, 4.15% due 12/01/2025 1,450
Maryland -- 35,700 Baltimore, Maryland, Port Facilities Revenue Bonds (Occidental Petroleum),
1.4% VRDN, 3.60% due 10/14/2011 (a) 35,700
Maryland State Health and Higher Educational Facilities Authority
Revenue Bonds, VRDN (a):
20,000 (Helix Health Hospital), Issue A, 4.10% due 7/01/2026 20,000
23,400 (Pooled Loan Program), Series A, 4.10% due 4/01/2035 23,400
23,400 (Saint Agnes Hospital -- Daughters of Charity), 4.10% due 7/01/2013 23,400
Washington Suburban Sanitation District, Maryland, UT:
8,200 BAN, 3.80% due 1/01/1999 8,200
4,000 Water Supply Refunding Bonds, 5.75% due 11/01/1997 4,007
Massachusetts -- 32,130 Clipper Tax-Exempt Trust 1994-2, Massachusetts, VRDN, Class A, 3.89% due
3.1% 10/17/2002 (a) 32,130
20,900 Eagle Tax-Exempt Trust, Massachusetts State, GO, VRDN, Series C, 4.23% due
8/01/2005 (a) 20,900
10,000 Lynn, Massachusetts, Water and Sewer Commission, BAN, UT, Series A,
4.25% due 10/08/1997 10,000
139,250 Massachusetts Bay Transportation Authority, Series B, 4.50% due 9/04/1998 140,026
2,000 Massachusetts State Municipal Wholesale Electric Company, Power Supply
System Revenue Bonds, VRDN, Series C, 4% due 7/01/2019 (a) 2,000
Massachusetts State Port Authority, Revenue Refunding Bonds, VRDN (a):
1,900 AMT, Series B, 4.05% due 7/01/2018 1,900
5,425 Series A, 4% due 7/01/2015 5,425
31,500 Massachusetts State, Refunding, VRDN, Series B, 4.10% due 8/01/2015 (a) 31,500
20,400 Massachusetts State Water Resources Authority, Subordinated General Bonds
(Multi-Modal), VRDN, AMT, Series A, 4% due 4/01/2028 (a)(e) 20,400
Michigan -- 3,800 Eagle Tax-Exempt Trust, Michigan, HFA, S/F, VRDN, Series 94, Class 2201, 3.85%
1.7% due 6/01/2021 (a) 3,800
17,200 Grand Rapids, Michigan, Water Supply System, Revenue Refunding Bonds,
VRDN, 4% due 1/01/2020 (a)(f) 17,200
8,460 Holly, Michigan, Area School District, VRDN, UT, Series 50, 4.20% due
5/01/2020 (a)(f) 8,460
47,500 Michigan Municipal Bond Authority Revenue Bonds, Series B, 4.50% due
7/02/1998 47,725
4,150 Michigan State Hospital Finance Authority Revenue Bonds (Providence
Hospital -- Daughters of Charity), VRDN, 4.10% due 11/01/2014 (a) 4,150
6,150 Michigan State Strategic Fund, Limited Obligation Revenue Refunding
Bonds (Detroit Edison Co.), VRDN, Series CC, 4% due 9/01/2030 (a) 6,150
1,000 Michigan State Strategic Fund, Solid Waste Disposal Revenue Bonds
(Grayling Generating Project), VRDN, AMT, 4.20% due 1/01/2014 (a) 1,000
9,500 Monroe County, Michigan, Economic Development Corp., Limited Obligation
Revenue Refunding Bonds (Detroit Edison Co.), VRDN, Series CC, 4% due
10/01/2024 (a) 9,500
Royal Oak, Michigan, Hospital Finance Authority Revenue Bonds (William
Beaumont Hospital), VRDN (a):
5,300 Series J, 4.05% due 1/01/2003 5,300
4,000 Series L, 4.05% due 1/01/2027 4,000
University of Michigan, University Hospital Revenue Bonds, VRDN, Series A (a):
7,900 4% due 12/01/2027 7,900
16,000 (Medical Service Plan), 4% due 12/01/2027 16,000
9,800 Refunding, 4% due 12/01/2019 9,800
Minnesota -- 45,000 Eagle Tax-Exempt Trust, Minnesota, GO, VRDN, Series 94, Class C5, 4.23%
0.5% due 8/01/2006 (a) 45,000
Mississippi -- 10,000 Harrison County, Mississippi, PCR, Refunding (E.I. du Pont de Nemours & Co.),
0.6% VRDN, 4% due 9/01/2010 (a) 10,000
Jackson County, Mississippi, PCR, Refunding (Chevron USA, Inc. Project),
VRDN (a):
9,800 4% due 12/01/2016 9,800
9,750 4% due 6/01/2023 9,750
18,360 Jackson County, Mississippi, Port Facility Revenue Refunding Bonds
(Chevron USA, Inc. Project), VRDN, 4% due 6/01/2023 (a) 18,360
3,000 Mississippi Hospital Equipment and Facilities Authority Revenue Bonds
(Mississippi Baptist Medical Center), VRDN, Series B, 4.10% due
7/01/2012 (a) 3,000
Missouri -- 1.1% 30,000 Eagle Tax-Exempt Trust, Missouri, GO, VRDN, Series 1993-E, 4.23% due
8/01/2006 (a) 30,000
Missouri Higher Education Loan Authority, Student Loan Revenue Bonds,
VRDN, AMT (a):
7,800 Series A, 4.10% due 6/01/2017 7,800
11,700 Series B, 4.10% due 6/01/2020 11,700
5,000 Missouri State Health and Educational Facilities Authority, Health Facilities
Revenue Bonds (Sisters of Mercy Health System), VRDN, Series A,
4.05% due 6/01/2019 (a) 5,000
12,215 Missouri State Housing Development Commission, S/F Mortgage Revenue
Bonds (Homeowner), AMT, Series A-4, 4.05% due 11/03/1997 (h) 12,215
27,700 Saint Louis County, Missouri, IDA, Hospital Revenue Bonds (DePaul Health
Center -- Daughters of Charity), VRDN, 4.10% due 11/01/2014 (a) 27,700
Montana -- 0.7% 6,800 Billings, Montana, M/F Housing Revenue Bonds (West Park Retirement
Center), VRDN, 4.10% due 12/01/2007 (a) 6,800
50,000 Montana State, TRAN, 4.50% due 6/30/1998 50,248
Nebraska -- 0.6% Nebraska Higher Education Loan Program, Multiple Mode Student Loan
Revenue Bonds, VRDN (a)(c)(i):
12,800 Series A, 4.05% due 12/01/2015 12,800
13,600 Series B, 4.05% due 12/01/2015 13,600
3,100 Series C, 4.05% due 12/01/2015 3,100
17,600 Series D, 4.05% due 12/01/2015 17,600
3,550 Nebraska Higher Education Loan Program, Student Loan Revenue Bonds,
VRDN, AMT, Series A, 4.15% due 12/01/2016 (a)(i) 3,550
Nevada -- 0.6% 44,000 Clark County, Nevada, Airport Improvement Revenue Refunding Bonds, VRDN,
Series A, 4.10% due 7/01/2012 (a)(c) 44,000
7,075 Nevada Housing Division (Mesquite Bluffs Apartments), VRDN, AMT, Series B,
4.15% due 5/01/2028 (a) 7,075
New 1,400 New Hampshire Higher Educational and Health Facilities Authority Revenue
Hampshire -- 0.4% Bonds (VHA New England Inc.), VRDN, Series D, 4.15% due 12/01/2025 (a)(e) 1,400
22,000 New Hampshire State, Business Finance Authority, PCR, Refunding (United
Illuminating Company), VRDN, AMT, Series A, 4.15% due 7/01/2027 (a) 22,000
5,700 New Hampshire State, HFA, M/F Housing Revenue Bonds (P.R.A. Properties --
Pheasant Run Project), VRDN, AMT, 4.10% due 5/01/2025 (a) 5,700
New Jersey -- 27,300 Eagle Tax-Exempt Trust, New Jersey, GO, VRDN, Series 1996-D, 4.23% due
0.4% 2/15/2007 (a) 27,300
6,757 Elizabeth, New Jersey, BAN, 4.75% due 1/09/1998 6,769
New Mexico -- 15,300 Albuquerque, New Mexico, Hospital Revenue Bonds (Saint Joseph's Sisters
0.8% of Charity), VRDN, 4.05% due 5/15/2022 (a) 15,300
Farmington, New Mexico, PCR (Arizona Public Service Co.), VRDN (a):
11,300 AMT, Series C, 4.10% due 9/01/2024 11,300
19,500 Refunding, Series A, 4.05% due 5/01/2024 19,500
14,100 Refunding, Series B, 4% due 9/01/2024 14,100
3,700 Hurley, New Mexico, PCR (Kennecott Santa Fe), VRDN, 4.05% due
12/01/2015 (a) 3,700
7,000 New Mexico, Mortgage Finance Authority (S/F Mortgage Program), AMT,
Series D-2, 3.95% due 6/15/1998 7,000
New York -- Municipal Assistance Corporation, New York City, New York, VRDN (a):
3.2% 25,900 Sub-Series K-1, 4.05% due 7/01/2008 25,900
15,000 Sub-Series K-2, 4.05% due 7/01/2008 15,000
15,000 Nassau County, New York, BAN, UT, Series B, 4.25% due 11/14/1997 15,006
New York City, New York, GO, VRDN, UT (a):
8,400 Series B, Sub-Series B-3, 4% due 8/15/2004 (c) 8,400
3,000 Sub-Series A-7, 4% due 8/01/2019 3,000
New York City, New York, Municipal Water Finance Authority, Water and
Sewer System Revenue Bonds:
23,900 CP, 3.80% due 12/18/1997 23,900
21,500 MSTR, VRDN, Series 27, 4.25% due 6/15/2024 (a)(g) 21,500
13,300 VRDN, Series G, 4% due 6/15/2024 (a)(f) 13,300
6,500 New York State Dormitory Authority Revenue Bonds (Putters-14A), VRDN,
4.10% due 7/01/2008 (a) 6,500
17,600 New York State, HFA, Housing Revenue Bonds (East 84th Street), VRDN, AMT,
Series A, 3.95% due 11/01/2028 (a) 17,600
New York State, Local Government Assistance Corporation, VRDN (a):
12,400 Series B, 4% due 4/01/2023 12,400
29,700 Series F, 4% due 4/01/2025 29,700
41,660 New York State Power Authority, Revenue and General Purpose Bonds
(Junior Lien), 3.75% due 3/01/1998 41,660
9,300 Triborough Bridge and Tunnel Authority, New York, Special Obligation,
VRDN, 4.05% due 1/01/2024 (a)(f) 9,300
21,500 Westchester County, New York, TAN, UT, 3.48% due 12/11/1997 21,499
North Carolina -- Craven County, North Carolina, Industrial Facilities and Pollution
0.8% Control Financing Authority (Cravenwood Energy Project), VRDN, AMT (a):
3,600 Series B, 4.10% due 5/01/2011 3,600
3,000 Series C, 4.10% due 5/01/2011 3,000
16,875 North Carolina Medical Care Commission, Health Care Facilities Revenue
Bonds (Cabarrus Memorial Hospital Project), VRDN, 4.15% due
3/01/2012 (a) 16,875
North Carolina Medical Care Commission, Hospital Revenue Bonds, VRDN (a):
1,700 (Duke University Hospital), Series B, 4% due 6/01/2015 1,700
2,000 (Duke University Hospital Project), Series C, 4% due 6/01/2015 2,000
28,500 (North Carolina Baptist Hospital Project), Series B, 4.05% due 6/01/2022 28,500
10,700 Person County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Solid Waste Disposal Revenue Bonds (Carolina Power
and Light Company), AMT, DATES, 4.15% due 11/01/2016 (a) 10,700
2,000 Raleigh-Durham, North Carolina, Airport Authority, Special Facility
Revenue Refunding Bonds (American Airlines), VRDN, Series B, 4.05% due
11/01/2015 (a) 2,000
Ohio -- 0.8% 20,000 Clermont County, Ohio, Hospital Facilities Revenue Refunding Bonds
(Mercy Health System), VRDN, Series A, 4.05% due 12/01/2021 (a) 20,000
10,500 Eagle Tax-Exempt Trust, Ohio, Edison, VRDN, Series 95, Class 3502, 4.18% due
7/01/2015 (a) 10,500
18,800 Franklin County, Ohio, Hospital Revenue Refunding and Improvement Bonds
(US Health Corp. -- Columbus), VRDN, Series A, 4.15% due 12/01/2021 (a) 18,800
1,865 Ohio HFA, M/F Housing Revenue Bonds (Kenwood Congregate Retirement
Program), VRDN, 3.70% due 12/01/2015 (a) 1,865
8,100 Ohio State Air Quality Development Authority, Revenue Refunding Bonds
(Cincinnati Gas & Electric), VRDN, Series B, 4% due 9/01/2030 (a) 8,100
4,200 Paudling County, Ohio, Solid Waste Disposal Revenue Bonds (Lafarge
Corporation Project), VRDN, AMT, 3.80% due 8/01/2026 (a) 4,200
3,000 Scioto County, Ohio, Hospital Facilities Revenue Bonds (VHA Central
Inc. -- Capital Asset), VRDN, Series C, 4.15% due 12/01/2025 (a)(e) 3,000
Oklahoma -- 10,250 Grand River, Oklahoma, Dam Authority Revenue Bonds, VRDN, Series 42,
0.5% 4.20% due 6/01/2009 (a)(e) 10,250
14,200 Muskogee, Oklahoma, Industrial Trust, PCR, Refunding (Oklahoma Gas and
Electric Co.), VRDN, Series A, 4.10% due 1/01/2025 (a) 14,200
Oklahoma State Industrial Authority Revenue Bonds (Baptist Medical Center),
VRDN (a):
10,500 Series A, 4.20% due 8/15/2024 10,500
5,500 Series B, 4.20% due 8/15/2023 5,500
Oregon -- 1.6% 8,900 Medford, Oregon, Hospital Facilities Authority Revenue Bonds
(Gross-Rogue Valley Health Services), VRDN, 4.10% due 10/01/2016 (a) 8,900
64,000 Multnomah County, Oregon, Portland School District No.1 Bonds, TRAN, 4.25%
due 6/26/1998 64,205
24,300 Oregon State, GO, VRDN, Series 73-H, 4.10% due 12/01/2019 (a) 24,300
Oregon State, GO, Veterans' Welfare Bonds, VRDN (a):
18,000 Series 73-E, 4.05% due 12/01/2016 18,000
15,000 Series 73-G, 4.10% due 12/01/2018 15,000
Pennsylvania -- 5,300 Allegheny County, Pennsylvania, Hospital Development Authority Revenue
3.1% Bonds (Presbyterian Health Center), VRDN, Series A, 4% due
3/01/2020 (a)(c) 5,300
27,000 Allegheny County, Pennsylvania, IDA, PCR (Duquesne), CP, Series A, 3.70%
due 2/05/1998 27,000
2,500 Butler County, Pennsylvania, IDA, IDR, Refunding (Wetterau Finance Co.
Project), VRDN, 4.10% due 12/01/2014 (a) 2,500
5,600 Delaware County, Pennsylvania, IDA, PCR (BP Oil Incorporated Project),
UPDATES, 4.10% due 12/01/2009 (a) 5,600
Eagle Tax-Exempt Trust, Pennsylvania, GO, VRDN (a):
12,300 1st Series, 4.23% due 5/01/2015 12,300
17,000 Series 94, Class 3803, 4.23% due 5/01/2008 17,000
2,600 Geisinger, Pennsylvania, Health Systems Authority Revenue Bonds, VRDN,
Series B, 4.05% due 7/01/2022 (a) 2,600
12,000 Lackawanna County, Pennsylvania, MSTR, VRDN, Series 38, 4.25% due
9/15/2020 (a) 12,000
3,400 Montgomery County, Pennsylvania, Higher Education and Health Authority,
Hospital Revenue Bonds (Holy Redeemer Hospital), VRDN, 4.10% due
9/01/2018 (a)(e) 3,400
Pennsylvania State Higher Education Assistance Agency, Student Loan
Revenue Bonds, VRDN, AMT (a):
11,200 Series A, 4.10% due 1/01/2018 (i) 11,200
5,000 Series B, 4.10% due 7/01/2018 5,000
19,400 Pennsylvania State Higher Educational Facilities Authority, College and
University Revenue Bonds (Temple University), VRDN, 4% due
10/01/2009 (a) 19,400
15,000 Pennsylvania State Higher Educational Facilities Authority, Health Services
Revenue Bonds (University of Pennsylvania), ACES, Series B, 4.05% due
1/01/2024 (a) 15,000
Pennsylvania State Higher Educational Facilities Authority, Revenue Refunding
Bonds (Carnegie Mellon University), VRDN (a):
13,300 Series A, 4.05% due 11/01/2025 13,300
18,600 Series B, 4.05% due 11/01/2027 18,600
15,000 Series C, 4.05% due 11/01/2029 15,000
13,200 Series D, 4.05% due 11/01/2030 13,200
7,500 Pennsylvania State University (University Project), Series A, 4.50% due
11/25/1997 7,511
Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities
Authority, Hospital Revenue Bonds (Children's Hospital of Philadelphia
Project), VRDN (a):
7,100 4.05% due 3/01/2027 7,100
14,100 Series A, 4.05% due 3/01/2027 14,100
6,800 Philadelphia, Pennsylvania, IDA, Revenue Bonds (Institute for Cancer
Research Project), VRDN, Series A, 4.05% due 7/01/2013 (a) 6,800
10,400 Philadelphia, Pennsylvania, TRAN, Series A, 4.50% due 6/30/1998 10,437
8,900 Sayre, Pennsylvania, Health Care Facilities Authority Revenue Bonds (VHA
of Pennsylvania, Inc. -- Capital Financing Program), VRDN, Series L, 4.10%
due 12/01/2020 (a)(e) 8,900
5,200 Schuylkill County, Pennsylvania, IDA, Resource Recovery Revenue
Refunding Bonds (Northeastern Power Company), VRDN, Series A, 4% due
12/01/2022 (a) 5,200
South Carolina -- 15,300 Berkeley County, South Carolina, Exempt Facilities, Industrial Revenue Bonds
1.8% (Amoco Chemical Company Project), VRDN, AMT, 4.10% due 4/01/2027 (a) 15,300
2,000 Berkeley County, South Carolina, PCR, Facilities Refunding (Amoco Chemical
Co. Project), VRDN, 4% due 7/01/2012 (a) 2,000
17,950 Charleston County, South Carolina, Industrial Revenue Refunding Bonds
(Massey Coal Terminal Corp.), VRDN, 4% due 1/01/2007 (a) 17,950
Florence County, South Carolina, Solid Waste Disposal and Wastewater
Treatment Facilities Revenue Bonds (Roche Carolina Inc. Project),
VRDN, AMT (a):
35,000 4.05% due 4/01/2026 35,000
2,900 4.10% due 4/01/2027 2,900
27,800 Orangeburg County, South Carolina, Solid Waste Disposal Facilities
Revenue Bonds (South Carolina Electric & Gas), VRDN, AMT, 4.10% due
11/01/2024 (a) 27,800
South Carolina Jobs, EDA, Economic Development Revenue Bonds, VRDN (a):
4,490 (Saint Francis Hospital Project), 4% due 7/01/2022 4,490
5,400 (Wellman, Inc. Project), AMT, 4.15% due 12/01/2010 5,400
12,095 (Wellman, Inc. Project), AMT, 4.15% due 12/01/2012 12,095
31,562 South Carolina State, Public Service Authority, Electric System Revenue
Bonds, CP, 3.65% due 11/12/1997 31,562
South Dakota -- 20,000 Lawrence County, South Dakota, Solid Waste Disposal Revenue Bonds
0.2% (Homestake Mining), VRDN, AMT, Series A, 4.05% due 7/01/2032 (a) 20,000
Tennessee -- 16,000 Clarksville, Tennessee, Public Building Authority Revenue Bonds (Pooled
1.1% Financing -- Tennessee Municipal Bond Fund), VRDN, 4.10% due 10/01/2025 (a) 16,000
9,400 Cleveland, Tennessee, IDB, Revenue Bonds (Newly Wed Foods Incorporated
Project), VRDN, AMT, 4.25% due 1/01/2012 (a) 9,400
8,100 Loudon, Tennessee, IDB, PCR, Refunding (A.E. Staley Manufacturing Co.
Project), VRDN, 4.15% due 9/01/2001 (a) 8,100
13,000 Montgomery County, Tennessee, Public Building Authority Revenue Bonds
(Pooled Financing -- Montgomery County Loan), VRDN, 4.10% due 7/01/2019 (a) 13,000
14,955 Morristown, Tennessee, IDB, PCR, Refunding (Akzo Chemicals, Inc.
Project), VRDN, 4.15% due 8/01/2001 (a) 14,955
5,500 Nashville and Davidson Counties, Tennessee, Metropolitan Health and
Educational Facilities Board Revenue Bonds (Vanderbilt University),
Series 85-A, 3.65% due 1/15/1998 5,500
16,400 Tennessee State, BAN, VRDN, Series E, 4.05% due 7/02/2001 (a) 16,400
12,000 Volunteer State Student Funding Corporation, Tennessee, Student Loan
Revenue Bonds, VRDN, AMT, Series A-1, 4.15% due 12/01/2017 (a) 12,000
Texas -- 22.6% Brazos River Authority, Texas, PCR (Texas Utilities Electric Co.), VRDN, AMT (a):
53,055 Refunding, Series B, 4.20% due 6/01/2030 53,055
24,005 Refunding, Series B, 4.15% due 2/01/2032 (c) 24,005
90,555 Refunding, Series C, 4.10% due 6/01/2030 90,555
15,800 Refunding, Series C, 4.10% due 6/01/2030 (e) 15,800
15,600 Series A, 4.10% due 4/01/2030 15,600
29,500 Brazos River Authority, Texas, Revenue Refunding Bonds (Houston Light
and Power Co.), VRDN, AMT, Series 1997, 4.05% due 11/01/2018 (a)(e) 29,500
4,000 Corpus Christi, Texas, IDR (Dedietrich USA Incorporated Project), VRDN,
AMT, 4.20% due 11/01/2008 (a) 4,000
Dallas-Fort Worth, Texas, Regional Airport Revenue Bonds, MSTR, VRDN (a):
15,785 AMT, Series 46, 4.25% due 11/01/2020 (c) 15,785
9,495 AMT, Series 52, 4.25% due 11/01/2017 (c) 9,495
6,600 Series 5, 4.25% due 11/01/2015 (f) 6,600
5,500 Grapevine, Texas, IDR, Airport Refunding Bonds (Southern Air Transportation
Project), VRDN, 4.10% due 3/01/2010 (a) 5,500
9,000 Greater East Texas Higher Educational Authority Incorporated, Student Loan
Revenue Refunding Bonds, VRDN, AMT, Series A, 4.10% due 5/01/1998 (a)(i) 9,000
15,000 Greater Texas Student Loan Corp., Student Loan Revenue Refunding Bonds,
AMT, Series A, 3.70% due 3/01/1998 (i) 15,000
7,300 Gulf Coast, Texas, IDA, Marine Terminal Revenue Bonds (Amoco Oil Company
Project), VRDN, AMT, 4.10% due 4/01/2028 (a) 7,300
Gulf Coast, Texas, IDA, Solid Waste Disposal Revenue Bonds (Citgo Petroleum
Corp. Project), VRDN, AMT (a):
13,700 4.20% due 5/01/2025 13,700
7,400 4.20% due 4/01/2026 7,400
7,000 Gulf Coast Waste Disposal Authority, Texas, Environmental Improvement
Revenue Bonds (Amoco Oil Co. Project), 3.70% due 3/01/1998 7,000
Gulf Coast Waste Disposal Authority, Texas, PCR, VRDN (a):
42,200 (Amoco Oil Co. Project), AMT, 4.10% due 5/01/2023 42,200
20,200 (Amoco Oil Company Project), AMT, 4.10% due 6/01/2024 20,200
14,400 Refunding (Exxon Project), 4% due 6/01/2020 14,400
Gulf Coast Waste Disposal Authority, Texas, Solid Waste Disposal Revenue
Bonds (Amoco Oil Co. Project), VRDN, AMT (a):
32,800 4.10% due 7/01/2027 32,800
27,600 Refunding, 4.10% due 8/01/2023 27,600
17,710 Harris County, Texas, GO, VRDN, Series 45, 4.20% due 8/15/2016 (a)(f) 17,710
Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Methodist Hospital), VRDN (a):
130,750 4.10% due 12/01/2025 130,750
106,900 Refunding, 4.10% due 12/01/2026 106,900
Harris County, Texas, Industrial Development Corporation, PCR (Exxon Project) (a):
8,600 DATES, Series 1984-A, 4.05% due 3/01/2024 8,600
8,100 VRDN, AMT, 4.05% due 8/15/2027 8,100
32,000 Harris County, Texas, Industrial Development Corporation, PCR, Refunding
(Shell Oil Company Project), VRDN, 3.95% due 4/01/2027 (a) 32,000
46,100 Harris County, Texas, Industrial Development Corporation, Solid Waste
Disposal Revenue Bonds (Deer Park Limited Partnership), VRDN, AMT,
Series A, 4.20% due 2/01/2023 (a) 46,100
Harris County, Texas, Toll Road Revenue Bonds, Sub-Lien, VRDN (a):
25,000 Series H, 4.10% due 8/01/2020 25,000
31,900 UT, Series B, 4.10% due 8/01/2015 31,900
25,700 UT, Series C, 4.10% due 8/01/2015 25,700
15,000 UT, Series D, 4.10% due 8/01/2015 15,000
Hockley County, Texas, Industrial Development Corporation, PCR:
11,940 (Amoco Project), 3.80% due 11/01/1997 11,940
24,200 (Amoco Project -- Standard Oil Co.), 3.75% due 3/01/1998 24,205
11,000 Houston, Texas, Water and Sewer System Revenue Bonds, MSTR, VRDN,
Series 22, 4.20% due 12/01/2020 (a)(c) 11,000
72,430 Lower Colorado River Authority, Texas, Revenue Refunding Bonds, VRDN,
3rd Junior Lien, 4.10% due 1/01/2013 (a)(c) 72,430
7,200 Lower Neches Valley Authority, Texas, PCR (Chevron U.S.A. Inc. Project),
3.75% due 6/01/1998 7,200
24,400 Lubbock, Texas, Health Facilities Development Corporation Revenue Bonds
(Saint Joseph Health System), VRDN, Series A, 4% due 7/01/2013 (a) 24,400
18,500 Matagorda County, Texas, Navigational District No. 1, Revenue Refunding
Bonds (Houston Light & Power Co. Project), VRDN, AMT, Series 1997,
4.15% due 11/01/2028 (a)(e) 18,500
18,000 North Central, Texas, Health Facility Development Corp. Revenue Bonds
(Methodist Hospital, Dallas), VRDN, Series B, 4.05% due 10/01/2015 (a)(j) 18,000
North Texas Higher Education Authority Incorporated, Student Loan
Revenue Bonds, VRDN, AMT (a)(i):
3,000 Refunding, 4.10% due 3/01/1999 3,000
27,900 Refunding, 4.10% due 3/01/2005 27,900
29,000 Refunding, Series A, 4.10% due 4/01/2005 29,000
5,000 Refunding, Series A, 4.10% due 4/01/2020 5,000
12,800 Series C, 4.10% due 4/01/2020 (e) 12,800
13,700 Series F, 4.10% due 4/01/2020 (e) 13,700
Panhandle Plains, Texas, Higher Education Authority Incorporated,
Student Loan Revenue Bonds, VRDN, AMT, Series A (a)(i):
9,000 4.20% due 6/01/2021 9,000
13,700 4.20% due 6/01/2025 13,700
4,700 Refunding, 4.20% due 6/01/2008 4,700
18,800 Port Corpus Christi, Texas, Industrial Development Corporation, Sewage and
Solid Waste Disposal Revenue Bonds (Citgo Petroleum Corp. Project), VRDN,
AMT, 4.20% due 4/01/2026 (a) 18,800
14,400 Port of Port Arthur, Texas, Navigational District, PCR, Refunding (Texaco Inc.
Project), VRDN, 4.10% due 10/01/2024 (a) 14,400
21,525 Sabine River Authority, Texas, PCR, Refunding (Texas Utilities Project), VRDN,
AMT, Series A, 4.10% due 7/01/2022 (a)(c) 21,525
15,000 San Antonio, Texas, Higher Education Authority, Revenue Refunding Bonds
(Trinity University Project), VRDN, 4.15% due 4/01/2004 (a) 15,000
10,000 San Antonio, Texas, Hotel Occupancy Revenue Bonds, VRDN, Series 51, 4.20%
due 8/15/2019 (a)(f) 10,000
40,700 South Texas Higher Education Authority Incorporated, Student Loan Revenue
Refunding Bonds, VRDN, AMT, 3.75% due 12/01/2027 (a)(c)(i) 40,700
16,850 Southwest Texas, Higher Education Authority Incorporated, Revenue Refunding
Bonds (Southern Methodist University), VRDN, 4.05% due 7/01/2015 (a) 16,850
35,300 Texas State, CP, Series 1993-A, 3.70% due 10/28/1997 35,300
37,300 Texas State, GO, Refunding (Veterans' Housing Assistance Fund), VRDN, AMT,
4.10% due 12/01/2016 (a) 37,300
28,400 Texas State, Multi-Modal Water Development Board, VRDN, Series A, 4.10%
due 3/01/2015 (a) 28,400
22,770 Texas State Tender Options, VRDN, 4.20% due 10/01/2008 (a) 22,770
322,500 Texas State, TRAN, Series A, 4.75% due 8/31/1998 325,101
26,885 Travis County, Texas, Health Facility Development Corp. Revenue Bonds
(Daughters of Charity -- Seton Medical Center), VRDN, 4.10% due 11/01/2013 (a) 26,885
21,200 Trinity River Authority, Texas, PCR (Texas Utilities Electric), VRDN, AMT,
Series 96A, 4.10% due 3/01/2026 (a)(e) 21,200
Waco, Texas, Health Facilities Development Corporation, Health Facilities
Revenue Bonds (Daughters of Charity -- Providence Hospital), VRDN (a):
17,800 4.10% due 11/01/2013 17,800
11,900 Series 88A, 4.10% due 11/01/2018 11,900
9,100 West Side Calhoun County, Texas, Development Corporation, PCR
(Sohio Chemical Company Project -- Standard Oil), UPDATES,
4.10% due 12/01/2015 (a) 9,100
4,200 West Side Calhoun County, Texas, Navigation District, Sewer and Solid
Waste Disposal Revenue Bonds (BP Chemicals Inc. Project), VRDN, AMT,
4.15% due 4/01/2031 (a) 4,200
Utah -- 1.8% 11,500 Davis County, Utah, School District, TAN, 4.50% due 6/30/1998 11,552
23,300 Emery County, Utah, PCR, Refunding (Pacificorp Projects), VRDN, 4.05%
due 11/01/2024 (a)(e) 23,300
6,180 Jordan, Utah, School District, Tender Option, VRDN, UT, 4.25% due
6/15/2007 (a) 6,180
4,550 Salt Lake City, Utah, PCR (Amoco-Standard Oil Project), 3.50% due 10/01/1997 4,550
Salt Lake County, Utah, PCR, Refunding (Service Station Holdings Project),
VRDN (a):
14,300 4.05% due 2/01/2008 14,300
26,915 Series B, 4.10% due 8/01/2007 26,915
15,375 Utah County, Utah, Environmental Improvement Revenue Refunding Bonds
(USX Corp. Project), 3.75% due 1/15/1998 15,375
Utah State Board of Regents, Student Loan Revenue Bonds, VRDN, AMT (a)(e):
6,000 Series C, 4.10% due 11/01/2013 6,000
33,500 Series L, 4.10% due 11/01/2025 33,500
10,600 Utah State, HFA, S/F Mortgage, VRDN, Series 1, 4.20% due 7/01/2016 (a) 10,600
Vermont -- 0.4% 1,100 Vermont Educational and Health Buildings Financing Agency Revenue Bonds
(VHA -- New England), VRDN, Series G, 4.15% due 12/01/2025 (a)(e) 1,100
29,175 Vermont State Student Assistance Corporation, Student Loan Revenue Bonds,
VRDN, 3.60% due 1/01/2004 (a) 29,175
Virginia -- 1.3% 8,500 Eagle Tax-Exempt Trust, Richmond, Virginia, GO, VRDN, Series 95, Class 7091,
4.18% due 1/15/2013 (a) 8,500
27,100 Peninsula Ports Authority, Virginia, Port Facility Revenue Refunding Bonds
(Shell Oil Company Project), UPDATES, Series A, 4% due 12/01/2005 (a) 27,100
Rockingham County, Virginia, IDA, Revenue Bonds, VRDN (a):
16,000 (Merck & Co.), Series A, 4.30% due 10/01/2020 16,000
1,000 4.55% due 10/01/2022 1,000
Virginia State, HDA, Commonwealth Mortgage:
24,800 AMT, Series G, Sub-Series G, 3.92% due 4/16/1998 24,800
33,700 Series H, Sub-Series H, 3.84% due 4/16/1998 33,700
Washington -- 16,300 Eagle Tax-Exempt Trust, Washington State, GO, VRDN, Series 93B, 3.80% due
1.7% 4/01/2011 (a) 16,300
30,200 Snohomish County, Washington, Public Utility District No. 001, Electric
Revenue Bonds (Generation System), VRDN, 4.10% due 1/01/2025 (a)(c) 30,200
Washington State Housing Finance Commission, M/F Housing Revenue Bonds,
VRDN (a):
6,400 (Arbors on the Park Project), 4.25% due 10/01/2024 6,400
10,600 (Courtside Apartments Project), AMT, 4.15% due 1/01/2026 10,600
Washington State Public Power Supply System Revenue Bonds (Nuclear
Project No. 1), VRDN (a):
18,990 4.25% due 7/01/2004 18,990
5,870 Refunding, Series 1A-1, 4.15% due 7/01/2017 5,870
Washington State Public Power Supply System, Revenue Refunding Bonds
(Nuclear Project No. 3), VRDN (a):
22,755 Series 3A-1, 4.10% due 7/01/2018 22,755
12,485 Series 3A-2, 4.10% due 7/01/2018 12,485
Washington Student Loan Finance Association Revenue Bonds (Guaranteed
Student Loan Program), VRDN (a):
10,680 AMT, Series B, 3.90% due 1/01/2004 10,680
10,400 Second Series, 4.05% due 1/01/2001 10,400
West Virginia -- 11,220 Hancock County, West Virginia, County Commission, IDR, Refunding (The Boc
0.1% Group Inc. Project), VRDN, 4.15% due 8/01/2005 (a) 11,220
Wisconsin -- Eagle Tax-Exempt Trust, VRDN, Series 94 (a):
1.6% 5,100 Class 4901, Wisconsin, HFA, S/F, 4.23% due 9/01/2015 5,100
24,300 Class 4905, Milwaukee Sewer Authority, 4.23% due 10/01/2005 24,300
6,500 Hartland, Wisconsin, IDR (Commercial Communications Inc. -- Hegwood LLC
Project), VRDN, AMT, 4.25% due 8/01/2009 (a) 6,500
35,000 Milwaukee, Wisconsin, Revenue Bonds (School Order Notes), Series B,
4.25% due 8/27/1998 35,138
19,000 Pleasant Prairie, Wisconsin, PCR, Refunding (Wisconsin Electric & Power Co.),
VRDN, Series C, 4.10% due 9/01/2030 (a) 19,000
16,000 Sheboygan, Wisconsin, PCR, Refunding (Wisconsin Power and Light Company
Project), VRDN, Series A, 4% due 9/01/2015 (a) 16,000
Wisconsin State Health and Educational Facilities Authority Revenue Bonds (a):
10,355 (Daughter's of Charity Health System), ACES, 4.10% due 11/01/2022 10,355
14,500 (Wheaton Franciscan Services), VRDN, 3.95% due 8/15/2016 14,500
2,150 Wisconsin State Health Facilities Authority Revenue Bonds (Saint Mary's Hospital
of Milwaukee -- Daughters of Charity), VRDN, 4.10% due 11/06/2016 (a) 2,150
Wyoming -- Lincoln County, Wyoming, PCR:
1.3% 14,350 (Amoco Project -- Standard Oil Ltd.), 3.50% due 10/01/1997 14,350
7,700 (Exxon Project), VRDN, AMT, Series A, 4.10% due 7/01/2017 (a) 7,700
9,000 (Exxon Project), VRDN, AMT, Series B, 4.10% due 7/01/2017 (a) 9,000
10,960 Lincoln County, Wyoming, PCR, Refunding (Pacificorp Projects), VRDN,
4.10% due 11/01/2024 (a)(e) 10,960
17,150 Sublette County, Wyoming, PCR (Exxon Project), DATES, 4% due 11/01/2014 (a) 17,150
18,000 Sweetwater County, Wyoming, PCR, Refunding (Pacificorp Project), VRDN,
4% due 7/01/2015 (a) 18,000
Unita County, Wyoming, PCR:
12,205 (Amoco Standard Oil Company Industry), Series A, 3.90% due 12/01/1997 12,211
16,640 Refunding (Chevron USA Inc. Project), VRDN, 4% due 8/15/2020 (a) 16,640
Puerto Rico -- 20,000 Puerto Rico Commonwealth, Government Development Bank, CP, 3.70% due
0.2% 12/09/1997 20,000
-----------
Total Investments (Cost -- $8,406,254*) -- 99.9% 8,406,254
Other Assets Less Liabilities -- 0.1% 9,176
-----------
Net Assets -- 100.0% $8,415,430
===========
(a) The interest rate is subject to change periodically based on certain indexes. The interest rate shown is the rate in
effect at September 30, 1997.
(b) Prerefunded.
(c) MBIA Insured.
(d) FHA Insured.
(e) AMBAC Insured.
(f) FGIC Insured.
(g) FSA Insured.
(h) GNMA/FNMA Collateralized.
(i) SLMA Collateralized.
(j) BIG Insured.
* Cost for Federal income tax purposes.
Portfolio Abbreviations for CMA Tax-Exempt Fund
ACESSM 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
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
MSTR Municipal Securities Trust Receipts
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
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA Tax-Exempt Fund
Statement of Assets and Liabilities as of September 30, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost -- $8,406,254,352) (Note 1a) $8,406,254,352
Cash 85,216
Receivables:
Interest $46,947,802
Securities sold 7,968,399 54,916,201
--------------
Prepaid registration fees and other assets (Note 1d) 503,025
--------------
Total assets 8,461,758,794
--------------
Liabilities:
Payables:
Securities purchased 40,700,000
Investment adviser (Note 2) 2,897,246
Distributor (Note 2) 1,934,899
Beneficial interest redeemed 1,811
Dividends to shareholders (Note 1e) 1,412 45,535,368
--------------
Accrued expenses and other liabilities 793,670
--------------
Total liabilities 46,329,038
--------------
Net Assets $8,415,429,756
==============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares authorized $841,788,495
Paid-in capital in excess of par 7,575,854,590
Undistributed investment income -- net 19,471
Accumulated realized capital losses -- net (Note 4) (2,232,800)
--------------
Net Assets -- Equivalent to $1.00 per share based on 8,417,884,945 shares of
beneficial interest outstanding $8,415,429,756
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA Tax-Exempt Fund
Statement of Operations for the Six Months Ended September 30, 1997
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $155,733,050
Expenses:
Investment advisory fees (Note 2) $16,090,122
Distribution fees (Note 2) 5,066,603
Transfer agent fees (Note 2) 877,083
Accounting services (Note 2) 250,947
Custodian fees 167,118
Printing and shareholder reports 98,598
Professional fees 38,050
Pricing fees 33,783
Trustees' fees and expenses 26,427
Registration fees (Note 1d) 21,697
Other 44,311
--------------
Total expenses 22,714,739
--------------
Investment income -- net 133,018,311
Realized Gain on Investments -- Net (Note 1c) 25,302
--------------
Net Increase in Net Assets Resulting from Operations $133,043,613
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA Tax-Exempt Fund
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: Sept. 30, 1997 March 31, 1997
<S> <C> <C>
Operations:
Investment income -- net $133,018,311 $235,338,847
Realized gain on investments -- net 25,302 2,077,078
---------------- ----------------
Net increase in net assets resulting from operations 133,043,613 237,415,925
---------------- ----------------
Dividends to Shareholders (Note 1e):
Investment income -- net (133,018,311) (235,183,162)
---------------- ----------------
Net decrease in net assets resulting from dividends to shareholders (133,018,311) (235,183,162)
---------------- ----------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 14,662,969,685 27,075,188,082
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 133,018,693 235,179,553
---------------- ----------------
14,795,988,378 27,310,367,635
Cost of shares redeemed (14,727,861,446) (27,129,482,654)
---------------- ----------------
Net increase in net assets derived from beneficial
interest transactions 68,126,932 180,884,981
---------------- ----------------
Net Assets:
Total increase in net assets 68,152,234 183,117,744
Beginning of period 8,347,277,522 8,164,159,778
---------------- ----------------
End of period* $8,415,429,756 $8,347,277,522
================ ================
*Undistributed investment income -- net $19,471 $19,471
================ ================
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA Tax-Exempt Fund
Financial Highlights
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended For the Year Ended March 31,
Sept. 30, 1997 1997 1996 1995 1994
Increase (Decrease) in Net Asset Value:
<S> <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 .02 .03 .03 .03 .02
---------- ---------- ---------- ---------- ----------
Less dividends from investment income -- net (.02) (.03) (.03) (.03) (.02)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ==========
Total Investment Return 3.19%* 3.00% 3.31% 2.76% 1.96%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses .54%* .55% .55% .55% .55%
========== ========== ========== ========== ==========
Investment income -- net 3.19%* 2.94% 3.26% 2.70% 1.94%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of period (in thousands) $8,415,430 $8,347,278 $8,164,160 $7,391,964 $7,911,960
========== ========== ========== ========== ==========
* Annualized.
See Notes to Financial Statements.
</TABLE>
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 no-load, diversified, open-end management
investment company. These unaudited financial statements reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented. All
such adjustments are of a normal recurring nature. 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 and distributions to shareholders -- The Fund declares
dividends daily and reinvests daily such dividends (net of nonresident
alien tax and back-up withholding 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., Inc. ("ML & Co."), which is the limited
partner.
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.
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.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), 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, PSI, MLFDS, 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.
4. Capital Loss Carryforward:
At March 31, 1997, the Fund had a net capital loss carryforward of
approximately $2,258,000, of which $1,358,000 expires in 1998,
$210,000 expires in 1999 and $690,000 expires in 2003. This amount
will be available to offset like amounts of any future taxable gains.
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, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
* For inquiries regarding your CMA account, call (800) CMA-INFO [(800)
262-4636].
