<PAGE> 1
- -------------------------------------------------------------------------------
PROVIDENT
- -------------------------------------------------------------------------------
INSTITUTIONAL
FUNDS
G. Willing Pepper
Chairman TRUST FOR FEDERAL SECURITIES
May 30, 1997
Dear Shareholder:
We are pleased to present the Semi-Annual Report to Shareholders of Trust
for Federal Securities for the period ended April 30, 1997.
The accompanying Investment Adviser's Report provides information on recent
activity in the money markets and on the standing of our portfolios. I urge you
to read the report.
Provident Institutional Funds offer a broad range of high quality taxable
and tax-exempt Money Market Funds to meet the varied needs of our investors.
Please feel free to contact your Provident Distributors, Inc. account
representative or our Client Service Center at (800) 821-7432 to discuss your
investment options.
Thank you for your continued confidence in Provident Institutional Funds.
We welcome the opportunity to service your investment needs.
Sincerely,
LOGO
G. Willing Pepper
Chairman
------------------------------------------------------------------
400 Bellevue Parkway, Wilmington, DE 19809 Phone:
302-792-2555 Fax: 302-792-5876
<PAGE> 2
TRUST FOR FEDERAL SECURITIES
SEMI-ANNUAL INVESTMENT ADVISER'S REPORT
For the past two quarters, the Federal Reserve has maintained a watchful
eye on the strength of the economy. The strong 3.8% jump in fourth quarter gross
domestic product was followed by an even more impressive gain of 5.6% in the
first quarter. As economic activity surged, the Fed resorted to both jawboning
and pre-emptive strikes. As early as last December, Chairman Greenspan spoke of
the markets' "irrational exuberance" and indicated that higher short-term
interest rates were a likely consequence. The financial markets prepared for a
Fed tightening in early 1997, but the Fed surprised many by not raising rates at
its January FOMC meeting. By March, there were some early signs of a slowdown
with no indications of inflation. Once again, the Fed surprised the markets, but
this time by raising the federal funds rate by 25 basis points to 5.50%, the
first increase in almost two years. With scant evidence of inflation, the Fed
came under intense criticism for its move, but remained resolute that its action
was warranted, much like buying insurance against a future problem. As the first
quarter closed, the issue over monetary policy remained hotly debated. One group
argued that the 5.6% pace of GDP in the first quarter was double the pace the
Fed considers a sustainable, non-inflationary growth rate, while others pointed
out that there were no signs of any inflationary build up. As a result, there is
a high probability that the markets' volatility will continue at least through
the second quarter.
The 25 basis point change on March 25 moved most short-term interest rates
broadly higher. The only non-participating sector was short Treasuries where
three-month bill yields traded below overnight rates. This situation tended to
bias two of the Trust's portfolios, T-Fund and Treasury Trust, towards the
shorter end of their maturity targets, as there was very little incentive to
extend. The other two portfolios, FedFund and Federal Trust, were better able to
participate in the higher rates through investments in government agencies. The
month of May was targeted for reinvestment opportunity in the event the Fed
tightened again and some trades were done in the 9-12 month range to pick up
yields near 6%. Federal Trust and Treasury Trust retained their AAA Standard &
Poor's ratings, while T-Fund remained AAA-rated from both Standard & Poor's and
Moody's. Finally, FedFund was cited by Lipper Analytical Services as the top
performing institutional U.S. government money market fund out of a total of six
funds for the fifteen year period ended December 31, 1996.
As always, we look forward to the opportunity to provide you with high
quality liquidity products that emphasize safety of principal and competitive
market rates of return.
PNC INSTITUTIONAL MANAGEMENT CORPORATION
2
<PAGE> 3
FEDFUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets
April 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY & INSTRUMENTALITY
OBLIGATIONS--59.2%
Federal Farm Credit Bank Bonds
5.51%............. 01/02/98 $ 30,000 $ 29,964,863
--------------
Federal Farm Credit Bank Discount Notes
5.23.............. 07/07/97 12,000 11,883,197
--------------
Federal Home Loan Bank Bonds
5.555............. 05/22/97 25,000 25,002,139
5.42.............. 12/02/97 25,000 24,986,188
--------------
49,988,327
--------------
Federal Home Loan Bank Discount Notes
5.215............. 08/26/97 30,000 29,491,538
--------------
Federal Home Loan Mortgage Corporation Discount Notes
5.42.............. 05/07/97 15,500 15,485,998
5.20.............. 05/15/97 5,000 4,989,889
5.20.............. 05/16/97 15,000 14,967,500
5.49.............. 06/25/97 25,000 24,790,313
5.50.............. 07/09/97 50,000 49,472,917
5.26.............. 07/15/97 10,000 9,890,417
5.57.............. 09/30/97 24,050 23,484,396
--------------
143,081,430
--------------
Federal National Mortgage Association Bonds
5.71.............. 03/18/98 20,000 19,978,190
6.00.............. 04/17/98 25,000 24,968,070
--------------
44,946,260
--------------
Federal National Mortgage Association Discount Notes
5.20.............. 05/12/97 40,000 39,936,444
5.24.............. 07/11/97 50,000 49,483,278
5.19.............. 07/21/97 4,000 3,953,290
5.52.............. 08/04/97 10,000 9,854,333
5.54.............. 08/25/97 15,000 14,732,233
5.56.............. 09/15/97 15,000 14,682,617
--------------
132,642,195
--------------
Federal National Mortgage Association Variable Rate
Notes+
5.5275............ 05/03/97 40,000 39,983,851
5.68.............. 05/06/97 58,000 58,000,000
5.2775............ 05/13/97 20,000 19,990,849
--------------
117,974,700
--------------
Student Loan Marketing Association Discount Notes
5.48.............. 06/30/97 8,880 8,798,896
--------------
Student Loan Marketing Association Medium Term Notes
5.615............. 10/29/97 30,000 29,989,757
5.44.............. 12/19/97 20,000 19,980,137
--------------
49,969,894
--------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
Student Loan Marketing Association Variable Rate Notes+
5.53%............. 05/06/97 $ 76,850 $ 76,849,473
5.55.............. 05/06/97 48,545 48,510,452
5.56.............. 05/06/97 10,000 10,000,000
5.57.............. 05/06/97 20,000 20,003,083
5.71.............. 05/06/97 26,075 26,084,950
--------------
181,447,958
--------------
Total............................... 800,189,258
--------------
REPURCHASE AGREEMENTS--40.9%
Donaldson, Lufkin & Jenrette Securities Corp.
5.55.............. 05/01/97 100,000 100,000,000
(Agreement dated 04/30/97
to be repurchased at
$100,015,417,
collateralized by
$318,095,828 Federal
National Mortgage
Association Bonds and
Federal National Mortgage
Association STRIPS 5.50%
to 10.50% due from
07/01/03 to 04/01/27. The
market value is
$103,003,467.)
Goldman Sachs & Co.
5.15.............. 05/01/97 127,000 127,000,000
(Agreement dated 04/30/97
to be repurchased at
$127,018,168,
collateralized by
$135,305,561 Federal Home
Loan Mortgage Corporation
Bonds and U.S. Treasury
Bonds 6.50% to 7.25% due
from 04/15/24 to
11/15/26. The market
value is $130,060,541.)
Lehman Government Securities Inc.
5.52.............. 05/01/97 125,000 125,000,000
(Agreement dated 04/30/97
to be repurchased at
$125,019,167,
collateralized by
$285,334,759 Federal Home
Loan Mortgage Corporation
Bonds, 5.00% to 10.00%
due from 11/01/97 to
12/01/30. The market
value is $128,750,002.)
</TABLE>
3
<PAGE> 4
FEDFUND PORTFOLIO
Statement of Net Assets (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Morgan Stanley & Co.
5.79%............. 05/01/97 $100,000 $ 100,000,000
(Agreement dated 04/30/97
to be repurchased at
$100,016,083,
collateralized by
$103,054,000 Federal Home
Loan Mortgage Corporation
Bonds, Federal National
Mortgage Association
Medium Term Notes,
Resolution Funding
Corporation Bonds,
Student Loan Marketing
Association Bonds and
Tennessee Valley
Authority Bonds, 5.98% to
8.875% due from 11/06/98
to 04/01/36. The market
value is $103,188,076.)
PaineWebber, Incorporated
5.48.............. 05/01/97 100,300 100,300,000
(Agreement dated 04/30/97
to be repurchased at
$100,315,268,
collateralized by
$103,605,000 Federal Farm
Credit Bank Bonds,
Federal Farm Credit Bank
Medium Term Notes,
Federal Home Loan Bank
Bonds, Federal Home Loan
Bank Discount Notes,
Federal National Mortgage
Association Bonds and
Federal National Mortgage
Association Medium Term
Notes, 5.24% to 11.90%
due from 05/01/97 to
02/19/04. The market
value is $103,311,878.)
--------------
Total............................. 552,300,000
--------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,352,489,258*)....... 100.1% $1,352,489,258
LIABILITIES IN EXCESS OF OTHER
ASSETS....................... (0.1) (1,261,687)
------ --------------
NET ASSETS (equivalent to $1.00
per share based on
1,235,335,716 FedFund and
116,189,788 FedFund Dollar
Shares of beneficial interest
outstanding)................. 100.0% $1,351,227,571
====== ==============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($1,351,227,571 / 1,351,525,504)........ $1.00
=====
</TABLE>
- ---------------
* Also cost for federal income tax purposes.
+ Variable rate obligations--the rate shown is the rate as of April 30, 1997,
and the maturity date shown is the longer of the next interest readjustment
date or the date the principal amount can be recovered upon demand.
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------
</TABLE>
FEDFUND PORTFOLIO
Maturity Schedule of Portfolio
April 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C> <C> <C>
1- 30 Days $952,270,000 70.2%
31- 60 Days 25,000,000 1.8
61- 90 Days 134,880,000 10.0
91-120 Days 55,000,000 4.1
121-150 Days 15,000,000 1.1
Over 150 Days 174,050,000 12.8
Average Weighted Maturity--48 Days
- ------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
T-FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets
April 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--32.3%
U.S. Treasury Notes
6.50%............. 05/15/97 $ 32,000 $ 32,011,123
6.125............. 05/31/97 39,000 39,020,297
6.75.............. 05/31/97 111,500 111,604,974
5.875............. 07/31/97 50,000 50,054,396
6.50.............. 08/15/97 73,500 73,698,999
6.00.............. 08/31/97 34,000 34,035,070
5.75.............. 09/30/97 57,000 57,056,058
8.75.............. 10/15/97 38,000 38,536,648
5.625............. 10/31/97 54,000 54,000,760
5.75.............. 10/31/97 45,000 45,025,778
7.375............. 11/15/97 32,000 32,260,701
5.375............. 11/30/97 24,000 23,935,847
6.00.............. 11/30/97 21,000 21,055,920
--------------
Total............................... 612,296,571
--------------
REPURCHASE AGREEMENTS--67.6%
Barclay De Zoet Wedd Securities, Inc.
4.90.............. 05/01/97 28,000 28,000,000
(Agreement dated 04/30/97
to be repurchased at
$28,003,811,
collateralized by
$28,490,000 U.S. Treasury
Notes 6.625% due
04/30/02. The market
value is $28,760,655.)
Donaldson, Lufkin & Jenrette Securities Corp.
5.50.............. 06/09/97 60,000 60,000,000
(Agreement dated 04/10/97
to be repurchased at
$60,550,000,
collateralized by
$49,780,000 U.S. Treasury
Bonds 9.00% due 11/15/18.
The market value is
$61,000,412.)
Goldman, Sachs & Co.
5.35.............. 05/01/97 150,000 150,000,000
(Agreement dated 04/30/97
to be repurchased at
$150,022,292,
collateralized by
$158,589,000 U.S.
Treasury Bonds 6.50% to
6.625% due from 11/15/26
to 02/15/27. The market
value is $153,000,046.)
5.50.............. 06/05/97 50,000 50,000,000
(Agreement dated 04/07/97
to be repurchased at
$50,458,333,
collateralized by
$52,863,000 U.S. Treasury
Bonds 6.50% to 6.625% due
from 11/15/26 to
02/15/27. The market
value is $51,000,015.)
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
Greenwich Capital Markets, Inc.
5.40%............. 05/01/97 $200,000 $ 200,000,000
(Agreement dated 04/30/97
to be repurchased at
$200,030,000,
collateralized by
$197,784,000 U.S.
Treasury Notes 5.625% to
7.875% due from 11/15/04
to 02/15/07. The market
value is $204,004,472.)
Hong Kong Shanghai Bank Securities, Inc.
5.35.............. 05/01/97 60,000 60,000,000
(Agreement dated 04/30/97
to be repurchased at
$60,008,917,
collateralized by
$48,400,000 U.S. Treasury
Bonds 10.75% due
08/15/05. The market
value is $61,831,000.)
Lehman Government Securities, Inc.
5.40.............. 05/01/97 100,000 100,000,000
(Agreement dated 04/30/97
to be repurchased at
$100,015,000,
collateralized by
$86,592,000 U.S. Treasury
Bonds 7.875% to 9.00% due
from 05/15/17 to
02/15/21. The market
value is $102,001,953.)
Morgan (J.P.) Securities, Inc.
5.30.............. 05/01/97 80,000 80,000,000
(Agreement dated 04/30/97
to be repurchased at
$80,011,778,
collateralized by
$80,099,000 U.S. Treasury
Notes 6.625% due
06/30/01. The market
value is $81,600,856.)
Morgan Stanley & Co.
5.71.............. 05/01/97 300,000 300,000,000
(Agreement dated 04/30/97
to be repurchased at
$300,047,583,
collateralized by
$292,670,000 U.S.
Treasury Bonds and Notes
5.50% to 12.00% due from
05/15/97 to 02/15/23. The
market value is
$306,618,733.)
</TABLE>
5
<PAGE> 6
T-FUND PORTFOLIO
Statement of Net Assets (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Smith Barney, Inc.
5.20%............. 05/01/97 $ 80,000 $ 80,000,000
(Agreement dated 04/30/97
to be repurchased at
$80,011,556,
collateralized by
$76,285,000 U.S. Treasury
Bonds 7.00% to 8.125% due
from 07/15/06 to
08/15/21. The market
value is $81,686,492.)
Swiss Bank Corp.
5.35.............. 05/01/97 90,000 90,000,000
(Agreement dated 04/30/97
to be repurchased at
$90,013,375,
collateralized by
$85,775,000 U.S. Treasury
Bonds and Notes 6.00% to
13.25% due from 05/15/00
to 02/15/26. The market
value is $91,879,898.)
UBS Securities Inc.
5.23.............. 05/01/97 80,000 80,000,000
(Agreement dated 04/30/97
to be repurchased at
$80,011,622,
collateralized by
$75,644,000 U.S. Treasury
Bonds 7.50% due 11/15/16.
The market value is
$81,600,965.)
--------------
Total............................. 1,278,000,000
--------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,890,296,571*)....... 99.9% $1,890,296,571
OTHER ASSETS IN EXCESS OF
LIABILITIES.................. 0.1 1,414,911
------ --------------
NET ASSETS (equivalent to $1.00
per share based on
1,527,557,008 T-Fund and
364,242,454 T-Fund Dollar
Shares of beneficial interest
outstanding)................. 100.0% $1,891,711,482
====== ==============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($1,891,711,482 / 1,891,799,462)........ $1.00
=====
- ---------------
* Also cost for federal income tax purposes.
- --------------------------------------------------------
</TABLE>
T-FUND PORTFOLIO
Maturity Schedule of Portfolio
April 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- -------------- ----------
<S> <C> <C> <C>
1- 30 Days $1,200,000,000 63.5%
31- 60 Days 260,500,000 13.8
91-120 Days 123,500,000 6.5
121-150 Days 34,000,000 1.8
Over 150 Days 271,000,000 14.4
Average Weighted Maturity--41 Days
- --------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
FEDERAL TRUST FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets
April 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY & INSTRUMENTALITY
OBLIGATIONS--100.3%
Federal Farm Credit Bank Bonds
5.24%................ 05/01/97 $10,000 $ 10,000,000
------------
Federal Farm Credit Bank Discount Notes
5.40................. 05/01/97 5,000 5,000,000
5.24................. 05/05/97 1,600 1,599,068
5.20................. 05/07/97 5,260 5,255,441
5.38................. 05/08/97 7,000 6,992,677
5.37................. 05/09/97 3,000 2,996,420
5.38................. 05/13/97 8,000 7,985,653
5.32................. 05/27/97 5,000 4,980,789
5.48................. 07/01/97 5,000 4,953,573
------------
39,763,621
------------
Federal Home Loan Bank Discount Notes
5.25................. 05/01/97 6,275 6,275,000
5.35................. 05/01/97 400 400,000
5.38................. 05/01/97 2,080 2,080,000
5.34................. 05/02/97 7,000 6,998,962
5.35................. 05/08/97 1,275 1,273,674
5.39................. 05/08/97 8,695 8,685,887
5.17................. 05/15/97 1,165 1,162,658
5.19................. 05/15/97 2,835 2,829,278
5.195................ 05/15/97 10,000 9,979,797
5.34................. 05/15/97 1,200 1,197,508
5.35................. 05/16/97 15,000 14,966,563
5.35................. 05/19/97 2,460 2,453,420
5.38................. 05/30/97 15,000 14,934,992
5.27................. 06/05/97 3,200 3,183,604
5.405................ 06/19/97 8,300 8,238,939
5.44................. 06/30/97 10,000 9,909,333
------------
94,569,615
------------
Federal Home Loan Bank Variable Rate Notes+
5.293................ 08/19/97 10,000 9,997,727
------------
Student Loan Marketing Association Discount Notes
5.19................. 05/06/97 10,000 9,992,792
5.42................. 05/07/97 15,000 14,986,450
5.41................. 06/30/97 465 460,807
5.46................. 06/30/97 1,400 1,387,260
5.47................. 06/30/97 10,890 10,790,719
------------
37,618,028
------------
Student Loan Marketing Association Variable Rate Notes+
5.53................. 05/06/97 5,000 4,999,476
5.54................. 05/06/97 1,035 1,035,061
5.56................. 05/06/97 30,000 30,000,000
------------
36,034,537
------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
Tennessee Valley Authority Discount Notes
5.30%................ 05/01/97 $10,000 $ 10,000,000
5.50................. 05/13/97 15,000 14,972,500
5.36................. 05/23/97 4,535 4,520,145
5.38................. 06/05/97 10,000 9,947,694
5.36................. 06/19/97 15,000 14,890,567
------------
54,330,906
------------
Total................................. 282,314,434
------------
U.S. GOVERNMENT SECURITIES--0.0%
U.S. Treasury Bills
4.945................ 05/22/97 70 69,798
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $282,384,232*)............ 100.3% 282,384,232
LIABILITIES IN EXCESS OF OTHER
ASSETS.......................... (0.3) (704,764)
------ ------------
NET ASSETS (equivalent to $1.00
per share based on 240,536,798
Federal Trust and 41,350,623
Federal Trust Dollar Shares of
beneficial interest
outstanding).................... 100.0% $281,679,468
====== ============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($281,679,468 / 281,887,421).............. $1.00
=====
- ---------------
* Also cost for federal income tax purposes.
+ Variable Rate Obligations--the rate shown is the rate as
of April 30, 1997, and the maturity date shown is the
longer of the next interest readjustment date or the date
the principal amount can be recovered upon demand.
- ----------------------------------------------------
</TABLE>
FEDERAL TRUST FUND PORTFOLIO
Maturity Schedule of Portfolio
April 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
----------- ------------ ----------
<S> <C> <C> <C> <C>
1- 30 Days $208,885,000 73.8%
31- 60 Days 36,500,000 12.9
61- 90 Days 27,755,000 9.8
91-120 Days 10,000,000 3.5
Average Weighted Maturity--23 Days
- ----------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
TREASURY TRUST FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets
April 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--98.5%
U.S. Treasury Bills
5.04%............. 05/01/97 $ 10,466 $ 10,466,000
4.95.............. 05/15/97 10,237 10,217,294
4.945............. 05/22/97 2,354 2,347,210
4.95.............. 05/22/97 4,840 4,826,025
5.01.............. 06/05/97 2,970 2,955,534
5.025............. 06/05/97 100,000 99,511,458
5.00.............. 07/03/97 3,600 3,568,500
5.40.............. 10/16/97 50,000 48,740,000
5.41.............. 10/16/97 75,000 73,106,500
--------------
255,738,521
--------------
U.S. Treasury Notes
6.50.............. 05/15/97 169,075 169,148,383
8.50.............. 05/15/97 169,368 169,574,100
6.125............. 05/31/97 300,000 300,124,748
6.75.............. 05/31/97 20,000 20,020,703
5.875............. 07/31/97 295,000 295,258,638
--------------
954,126,572
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,209,865,093*)............ 98.5% 1,209,865,093
OTHER ASSETS IN EXCESS OF
LIABILITIES..................... 1.5 18,861,287
------ --------------
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
NET ASSETS (equivalent to $1.00
per share based on 891,816,631
Treasury Trust and 337,220,905
Treasury Trust Dollar Shares of
beneficial interest
outstanding).................... 100.0% $1,228,726,380
====== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($1,228,726,380 / 1,229,037,536)....... $1.00
- ---------------
* Also cost for federal income tax purposes.
- ------------------------------------------------------
</TABLE>
TREASURY TRUST FUND PORTFOLIO
Maturity Schedule of Portfolio
April 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1- 30 Days $366,340,000 30.2%
31- 60 Days 422,970,000 34.9
61- 90 Days 3,600,000 0.3
91-120 Days 295,000,000 24.3
Over 150 Days 125,000,000 10.3
Average Weighted Maturity--55 Days
- ------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
TRUST FOR FEDERAL SECURITIES
Statements of Operations
Six Months Ended April 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
FEDERAL TREASURY
TRUST TRUST
FEDFUND T-FUND FUND FUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Interest income........................................................ $39,437,667 $53,372,475 $7,396,733 $32,904,436
----------- ----------- ----------- -----------
Expenses:
Investment advisory fee................................................ 937,472 1,270,021 178,319 815,859
Administration fee..................................................... 937,472 1,270,021 178,319 815,859
Trustees' fees and officer's salary.................................... 15,913 21,527 3,025 13,796
Transfer agent fee..................................................... 59,706 64,386 20,450 49,194
Custodian fee.......................................................... 114,115 163,381 34,033 107,947
Shareholder computer access program.................................... 15,919 19,843 -- 15,452
Legal and audit........................................................ 31,454 45,367 5,888 26,851
Registration fees and expenses......................................... 15,676 6,974 8,746 8,899
Printing............................................................... 8,086 13,465 3,070 8,091
Other.................................................................. 20,783 29,282 5,378 21,517
----------- ----------- ----------- -----------
2,156,596 2,904,267 437,228 1,883,465
Service Organization fees--Dollar Shares............................... 102,777 470,079 38,043 453,805
----------- ----------- ----------- -----------
2,259,373 3,374,346 475,271 2,337,270
Less fees waived....................................................... (701,835) (932,196) (160,159) (617,541)
----------- ----------- ----------- -----------
Total expenses....................................................... 1,557,538 2,442,150 315,112 1,719,729
----------- ----------- ----------- -----------
Net investment income.................................................. 37,880,129 50,930,325 7,081,621 31,184,707
Realized gain (loss) on investments:
Net realized loss from security transactions........................... (16,091) (13,686) (4,786) (36,583)
----------- ----------- ----------- -----------
Net increase in net assets resulting from operations................... $37,864,038 $50,916,639 $7,076,835 $31,148,124
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
FEDFUND PORTFOLIO T-FUND PORTFOLIO
----------------------------------- -----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996 APRIL 30, 1997 OCTOBER 31, 1996
---------------- ---------------- ---------------- ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income............................ $ 37,880,129 $ 75,881,590 $ 50,930,325 $ 80,881,458
Net loss on investments.......................... (16,091) (14,773) (13,686) (63,912)
--------------- ---------------- --------------- ----------------
Net increase in net assets resulting from
operations..................................... 37,864,038 75,866,817 50,916,639 80,817,546
--------------- ---------------- --------------- ----------------
Distributions to shareholders:
From net investment income:
FedFund Shares................................. (35,833,042) (70,341,167) -- --
FedFund Dollar Shares.......................... (2,047,087) (5,540,423) -- --
T-Fund Shares.................................. -- -- (41,606,172) (71,094,135)
T-Fund Dollar Shares........................... -- -- (9,324,153) (9,787,323)
From net realized gains:
T-Fund Shares.................................. -- -- -- (30,186)
T-Fund Dollar Shares........................... -- -- -- (2,768)
--------------- ---------------- --------------- ----------------
Total distributions to shareholders.......... (37,880,129) (75,881,590) (50,930,325) (80,914,412)
--------------- ---------------- --------------- ----------------
Capital share transactions:
Sale of shares................................... 5,712,552,674 12,893,699,892 11,266,296,911 13,625,291,726
Reinvestment of dividends........................ 8,245,115 19,010,856 10,492,035 19,893,692
Repurchase of shares............................. (5,890,829,807) (13,179,759,396) (11,243,938,005) (13,523,973,979)
Capital issued in merger......................... -- 197,987,140 -- 444,037,729
--------------- ---------------- --------------- ----------------
Increase (decrease) in net assets derived from
capital share transactions..................... (170,032,018) (69,061,508) 32,850,941 565,249,168
--------------- ---------------- --------------- ----------------
Total increase (decrease) in net assets...... (170,048,109) (69,076,281) 32,837,255 565,152,302
Net assets:
Beginning of period................................ 1,521,275,680 1,590,351,961 1,858,874,227 1,293,721,925
--------------- ---------------- --------------- ----------------
End of period...................................... $ 1,351,227,571 $ 1,521,275,680 $ 1,891,711,482 $ 1,858,874,227
=============== ================ =============== ================
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 11
TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
FEDERAL TRUST TREASURY TRUST
FUND PORTFOLIO FUND PORTFOLIO
----------------------------------- -----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996 APRIL 30, 1997 OCTOBER 31, 1996
---------------- ---------------- ---------------- ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income............................ $ 7,081,621 $ 15,054,595 $ 31,184,707 $ 60,676,524
Net loss on investments.......................... (4,786) (14,255) (36,583) (213,661)
------------- --------------- --------------- ---------------
Net increase in net assets resulting from
operations..................................... 7,076,835 15,040,340 31,148,124 60,462,863
------------- --------------- --------------- ---------------
Distributions to shareholders:
From net investment income:
Federal Trust Shares........................... (6,337,154) (13,824,260) -- --
Federal Trust Dollar Shares.................... (744,467) (1,230,335) -- --
Treasury Trust Shares.......................... -- -- (22,571,271) (48,204,888)
Treasury Trust Dollar Shares................... -- -- (8,613,436) (12,471,636)
------------- --------------- --------------- ---------------
Total distributions to shareholders.......... (7,081,621) (15,054,595) (31,184,707) (60,676,524)
------------- --------------- --------------- ---------------
Capital share transactions:
Sale of shares................................... 537,910,210 1,759,666,416 3,518,824,681 7,377,831,706
Reinvestment of dividends........................ 894,157 3,353,428 10,711,142 19,149,426
Repurchase of shares............................. (557,747,128) (1,728,498,456) (3,492,659,618) (7,529,986,362)
------------- --------------- --------------- ---------------
Increase (decrease) in net assets derived from
capital share transactions..................... (18,942,761) 34,521,388 36,876,205 (133,005,230)
------------- --------------- --------------- ---------------
Total increase (decrease) in net assets...... (18,947,547) 34,507,133 36,839,622 (133,218,891)
Net assets:
Beginning of period................................ 300,627,015 266,119,882 1,191,886,758 1,325,105,649
------------- --------------- --------------- ---------------
End of period...................................... $ 281,679,468 $ 300,627,015 $ 1,228,726,380 $ 1,191,886,758
============= =============== =============== ===============
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
FEDFUND
DOLLAR
FEDFUND SHARES SHARES
--------------------------------------------------------------------------------- -----------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
1996 1995 1994 1993 1992 SIX MONTHS
---------- ---------- ---------- ---------- ---------- ENDED
APRIL 30,
1997
SIX MONTHS -----------
ENDED
APRIL 30, (UNAUDITED)
1997
-----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ---------- --------
Income From Investment
Operations:
Net Investment Income... .0259 .0529 .0571 .0377 .0308 .0397 .0247
Net Capital Gains....... -- -- -- -- .0001 .0010 --
---------- ---------- ---------- ---------- ---------- ---------- --------
Total From Investment
Operations.......... .0259 .0529 .0571 .0377 .0309 .0407 .0247
---------- ---------- ---------- ---------- ---------- ---------- --------
Less Distributions:
Dividends to
Shareholders from:
Net Investment Income... (.0259) (.0529) (.0571) (.0377) (.0308) (.0397) (.0247)
Net Capital Gains....... -- -- -- -- (.0001) (.0010) --
---------- ---------- ---------- ---------- ---------- ---------- --------
Total Distributions... (.0259) (.0529) (.0571) (.0377) (.0309) (.0407) (.0247)
---------- ---------- ---------- ---------- ---------- ---------- --------
Net Asset Value,
End of Period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ========== ========
Total Return............. 5.30% (2) 5.41% 5.86% 3.84% 3.12% 4.15% 5.05%(2)
Ratios/Supplemental Data:
Net Assets, End of Period
$(000).................. $1,235,070 $1,407,529 $1,377,175 $1,557,562 $1,290,971 $2,976,954 $ 116,158
Ratio of Expenses to
Average Daily Net
Assets.................. .20 (1,2) .19%(1) .18%(1) .18%(1) .20%(1) .27% .45%(1,2)
Ratio of Net Investment
Income to Average
Daily Net Assets........ 5.22% (2) 5.29% 5.71% 3.76% 3.08% 3.91% 4.97%(2)
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C><C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------
Income From Investment
Operations:
Net Investment Income... .0504 .0546 .0352 .0283 .0372
Net Capital Gains....... -- -- -- .0001 .0010
-------- -------- -------- -------- -------
Total From Investment
Operations.......... .0504 .0546 .0352 .0284 .0382
-------- -------- -------- -------- -------
Less Distributions:
Dividends to
Shareholders from:
Net Investment Income... (.0504) (.0546) (.0352) (.0283) (.0372)
Net Capital Gains....... -- -- -- (.0001) (.0010)
-------- -------- -------- -------- -------
Total Distributions... (.0504) (.0546) (.0352) (.0284) (.0382)
-------- -------- -------- -------- -------
Net Asset Value,
End of Period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =======
Total Return............. 5.16% 5.61% 3.59% 2.87% 3.90%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000).................. $113,747 $213,177 $135,769 $169,877 $148,363
Ratio of Expenses to
Average Daily Net
Assets.................. .44%(1) .43%(1) .43%(1) .45%(1) .52%
Ratio of Net Investment
Income to Average
Daily Net Assets........ 5.04% 5.46% 3.51% 2.83% 3.66%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .30% (annualized) for
the six months ended April 30, 1997 and .30%, .29%, .30% and .27%,
respectively, for the years ended October 31, 1996, 1995, 1994, and 1993 for
FedFund Shares, and .55% (annualized) for the six months ended April 30,
1997 and .55%, .54%, .55% and .52%, respectively, for the years ended
October 31, 1996, 1995, 1994 and 1993, for FedFund Dollar Shares.
(2) Annualized.
See accompanying notes to financial statements.
12
<PAGE> 13
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
T-FUND
DOLLAR
T-FUND SHARES SHARES
--------------------------------------------------------------------------------- -----------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED OCTOBER 31, ENDED
APRIL 30, ------------------------------------------------------------------ APRIL 30,
1997 1996 1995 1994 1993 1992 1997
----------- ---------- ---------- ---------- ---------- ---------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ---------- --------
Income From Investment
Operations:
Net Investment Income....... .0258 .0528 .0565 .0368 .0303 .0392 .0246
---------- ---------- ---------- ---------- ---------- ---------- --------
Total From Investment
Operations.............. .0258 .0528 .0565 .0368 .0303 .0392 .0246
---------- ---------- ---------- ---------- ---------- ---------- --------
Less Distributions:
Dividends to Shareholders
from:
Net Investment Income....... (.0258) (.0528) (.0565) (.0368) (.0303) (.0392) (.0246)
---------- ---------- ---------- ---------- ---------- ---------- --------
Total Distributions....... (.0258) (.0528) (.0565) (.0368) (.0303) (.0392) (.0246)
---------- ---------- ---------- ---------- ---------- ---------- --------
Net Asset Value, End of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ========== ========
Total Return................. 5.29%(2) 5.40% 5.80% 3.75% 3.07% 3.99% 5.04%(2)
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)...................... $1,527,483 $1,507,603 $1,211,220 $1,012,977 $1,361,624 $1,327,743 $ 364,228
Ratio of Expenses to Average
Daily Net Assets............ .20%(1,2) .19%(1) .18%(1) .18%(1) .20%(1) .28% .45%(1,2)
Ratio of Net Investment
Income to Average Daily Net
Assets...................... 5.21%(2) 5.26% 5.66% 3.65% 3.03% 3.93% 4.96%(2)
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1996 1995 1994 1993 1992
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income....... .0503 .0540 .0343 .0278 .0367
-------- ------- ------- ------- -------
Total From Investment
Operations.............. .0503 .0540 .0343 .0278 .0367
-------- ------- ------- ------- -------
Less Distributions:
Dividends to Shareholders
from:
Net Investment Income....... (.0503) (.0540) (.0343) (.0278) (.0367)
-------- ------- ------- ------- -------
Total Distributions....... (.0503) (.0540) (.0343) (.0278) (.0367)
-------- ------- ------- ------- -------
Net Asset Value, End of
Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= =======
Total Return................. 5.15% 5.55% 3.50% 2.82% 3.74%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)...................... $351,271 $82,502 $22,195 $13,328 $ 4,915
Ratio of Expenses to Average
Daily Net Assets............ .44%(1) .43%(1) .43%(1) .45%(1) .53%
Ratio of Net Investment
Income to Average Daily Net
Assets...................... 5.01% 5.41% 3.40% 2.78% 3.68%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .29% (annualized) for
the six months ended April 30, 1997 and .30%, .29%, .29% and .28%,
respectively, for the years ended October 31, 1996, 1995, 1994, and 1993 for
T-Fund Shares, and .54% (annualized) for the six months ended April 30, 1997
and .55%, .54%, .54% and .53%, respectively, for the years ended October 31,
1996, 1995, 1994, and 1993 for T-Fund Dollar Shares.
(2) Annualized.
See accompanying notes to financial statements.
13
<PAGE> 14
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
FEDERAL
TRUST
DOLLAR
FEDERAL TRUST SHARES SHARES
---------------------------------------------------------------------------- -----------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED OCTOBER 31, ENDED
APRIL 30, ------------------------------------------------------------ APRIL 30,
1997 1996 1995 1994 1993 1992 1997
----------- -------- -------- -------- -------- -------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------
Income From Investment
Operations:
Net Investment Income........ .0255 .0523 .0563 .0380 .0302 .0389 .0242
Net Capital Gains............ -- -- -- -- .0001 .0018 --
-------- -------- -------- -------- -------- -------- -------
Total From Investment
Operations............... .0255 .0523 .0563 .0380 .0303 .0407 .0242
-------- -------- -------- -------- -------- -------- -------
Less Distributions:
Dividends to Shareholders
from:
Net Investment Income........ (.0255) (.0523) (.0563) (.0380) (.0302) (.0389) (.0242)
Net Capital Gains............ -- -- -- -- (.0001) (.0018) --
-------- -------- -------- -------- -------- -------- -------
Total Distributions........ (.0255) (.0523) (.0563) (.0380) (.0303) (.0407) (.0242)
-------- -------- -------- -------- -------- -------- -------
Net Asset Value, End of
Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== =======
Total Return.................. 5.21%(2) 5.35% 5.77% 3.87% 3.06% 4.15% 4.96%(2)
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)....................... $ 240,333 $273,752 $237,718 $317,769 $257,125 $428,365 $41,346
Ratio of Expenses to Average
Daily Net Assets(1).......... .20%(2) .19% .18% .18% .18% .20% .45%(2)
Ratio of Net Investment Income
to Average Daily Net
Assets....................... 5.14%(2) 5.22% 5.61% 3.85% 3.02% 3.75% 4.89%(2)
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------ ------ ------
Income From Investment
Operations:
Net Investment Income........ .0498 .0538 .0355 .0277 .0364
Net Capital Gains............ -- -- -- .0001 .0018
------- ------- ------ ------ ------
Total From Investment
Operations............... .0498 .0538 .0355 .0278 .0382
------- ------- ------ ------ ------
Less Distributions:
Dividends to Shareholders
from:
Net Investment Income........ (.0498) (.0538) (.0355) (.0277) (.0364)
Net Capital Gains............ -- -- -- (.0001) (.0018)
------- ------- ------ ------ ------
Total Distributions........ (.0498) (.0538) (.0355) (.0278) (.0382)
------- ------- ------ ------ ------
Net Asset Value, End of
Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ====== ====== ======
Total Return.................. 5.10% 5.52% 3.62% 2.81% 3.90%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)....................... $26,875 $28,402 $8,278 $1,025 $2,442
Ratio of Expenses to Average
Daily Net Assets(1).......... .44% .43% .43% .43% .45%
Ratio of Net Investment Income
to Average Daily Net
Assets....................... 4.97% 5.36% 3.60% 2.77% 3.50%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .32% (annualized) for
the six months ended April 30, 1997 and .31% .32%, .31%, .29% and .30%,
respectively, for the years ended October 31, 1996, 1995, 1994, 1993 and
1992 for Federal Trust Shares, and .57% (annualized) for the six months
ended April 30, 1997 and .56%, .57%, .56%, .54% and .55%, respectively, for
the years ended October 31, 1996,1995, 1994, 1993 and 1992 for Federal Trust
Dollar Shares.
(2) Annualized.
See accompanying notes to financial statements.
14
<PAGE> 15
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
TREASURY
TRUST
DOLLAR
TREASURY TRUST SHARES SHARES
------------------------------------------------------------------------------- -----------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED OCTOBER 31, ENDED
APRIL 30, ---------------------------------------------------------------- APRIL 30,
1997 1996 1995 1994 1993 1992 1997
----------- -------- ---------- ---------- ---------- ---------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ---------- ---------- ---------- ---------- --------
Income From Investment
Operations:
Net Investment Income..... .0248 .0508 .0545 .0359 .0292 .0380 .0235
-------- -------- ---------- ---------- ---------- ---------- --------
Total From Investment
Operations............ .0248 .0508 .0545 .0359 .0292 .0380 .0235
-------- -------- ---------- ---------- ---------- ---------- --------
Less Distributions:
Dividends to Shareholders
from:
Net Investment Income..... (.0248) (.0508) (.0545) (.0359) (.0292) (.0380) (.0235)
-------- -------- ---------- ---------- ---------- ---------- --------
Total Distributions..... (.0248) (.0508) (.0545) (.0359) (.0292) (.0380) (.0235)
-------- -------- ---------- ---------- ---------- ---------- --------
Net Asset Value,
End of Period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ========== ========== ========== ========== ========
Total Return............... 5.07%(2) 5.20% 5.59% 3.65% 2.96% 3.85% 4.82%(2)
Ratios/Supplemental Data:
Net Assets, End of Period
$(000).................... $ 891,566 $897,659 $1,101,834 $1,016,635 $1,188,412 $1,552,207 $ 337,160
Ratio of Expenses to
Average Daily Net
Assets(1)................. .20%(2) .19% .18% .18% .18% .20% .45%(2)
Ratio of Net Investment
Income to Average Daily
Net Assets................ 5.00%(2) 5.08% 5.45% 3.57% 2.92% 3.78% 4.75%(2)
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income..... .0483 .0520 .0334 .0267 .0355
-------- -------- -------- -------- --------
Total From Investment
Operations............ .0483 .0520 .0334 .0267 .0355
-------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders
from:
Net Investment Income..... (.0483) (.0520) (.0334) (.0267) (.0355)
-------- -------- -------- -------- --------
Total Distributions..... (.0483) (.0520) (.0334) (.0267) (.0355)
-------- -------- -------- -------- --------
Net Asset Value,
End of Period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return............... 4.95% 5.34% 3.40% 2.71% 3.60%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000).................... $294,228 $223,272 $181,934 $258,206 $218,320
Ratio of Expenses to
Average Daily Net
Assets(1)................. .44% .43% .43% .43% .45%
Ratio of Net Investment
Income to Average Daily
Net Assets................ 4.83% 5.20% 3.32% 2.67% 3.53%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .30% (annualized) for
the six months ended April 30, 1997 and .30%, .29%, .29%, .28%, and .27%,
respectively, for the years ended October 31, 1996, 1995, 1994, 1993, and
1992 for Treasury Trust Shares, and .55% (annualized) for the six months
ended April 30, 1997 and .55%, .54%, .54%, .53%, and .52% respectively, for
the years ended October 31, 1996, 1995, 1994, 1993, and 1992 for Treasury
Trust Dollar Shares.
(2) Annualized.
See accompany notes to financial statements.
15
<PAGE> 16
Notes to Financial Statements
(Unaudited)
A. Trust for Federal Securities (the Company) was established as a Pennsylvania
business trust under a Declaration of Trust originally dated as of May 14, 1975,
and is registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company. The Company consists of four
separate portfolios, FedFund, T-Fund, Federal Trust Fund and Treasury Trust
Fund.
The FedFund portfolio has two classes of shares, FedFund Shares and FedFund
Dollar Shares. The T-Fund portfolio has three classes of shares, T-Fund Shares,
T-Fund Dollar Shares, and T-Fund Plus Shares. The Federal Trust Fund portfolio
has two classes of shares, Federal Trust Shares and Federal Trust Dollar Shares.
The Treasury Trust Fund portfolio also has two classes of shares, Treasury Trust
Shares and Treasury Trust Dollar Shares. Each portfolio's classes of shares are
identical in all respects, except that Dollar Shares and Plus Shares are sold to
institutions (Service Organizations) which provide support services to their
customers who beneficially own such shares, in consideration of the Company's
payment of .25% (on an annualized basis) of the average daily net asset value of
the Dollar Shares or Plus Shares held by the institutions for the benefit of
their customers. The Plus Shares also bear distribution fees of .15% (on an
annualized basis) of their average daily net asset value payable to the
Company's distributor, PDI, for distribution and sales support services. No
T-Fund Plus Shares have been sold as of April 30, 1997.
B. Significant accounting policies are as follows:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates. The
following is a summary of significant accounting policies consistently followed
by the Company in the preparation of its financial statements
Security Valuation: Portfolio securities are valued under the amortized cost
method which approximates current market value. Under this method, securities
are valued at cost when purchased and thereafter a constant proportionate
amortization of any discount or premium is recorded until maturity of the
security. Regular review and monitoring of the valuation is performed in an
attempt to avoid dilution or other unfair results to shareholders. The Company
seeks to maintain the net asset value per share of each portfolio at $1.00.
Repurchase Agreements--The Company may purchase, for FedFund and T-Fund, money
market instruments from financial institutions, such as banks and non-bank
dealers, subject to the seller's agreement to repurchase them at an agreed upon
date and price. Collateral for repurchase agreements may have longer maturities
than the maximum permissible remaining maturity of portfolio investments,
provided the repurchase agreements themselves mature in one year or less. The
seller will be required on a daily basis to maintain the value of the securities
subject to the agreement at no less than the repurchase price. Repurchase
agreements with maturities in excess of seven days are subject to a seven day
put feature.
Dividends to Shareholders--Dividends are declared daily and paid monthly.
Dividends payable are recorded on the dividend record date. Net income for
dividend purposes includes interest accrued, discount earned and net realized
short term gains on portfolio securities, less the amortization of market
premium and applicable expenses. Capital gains, if any, are distributed at least
once a year.
16
<PAGE> 17
Notes to Financial Statements (Continued)
(Unaudited)
Federal Taxes--No provision is made for federal taxes as it is the Company's
intention to have each portfolio continue to qualify as a regulated investment
company and to make the requisite distributions to its shareholders which will
be sufficient to relieve it from federal income and excise taxes.
Other--Investment transactions are accounted for on the trade date and the
cost of investments sold is determined by use of the specific identification
method for both financial reporting and income tax purposes. Expenses not
directly attributable to a specific portfolio are allocated among the portfolios
based on their relative net assets.
C. Under agreements among the Company, PNC Bank, National Association (PNC Bank)
and PNC Institutional Management Corporation (PIMC), an indirect wholly owned
subsidiary of PNC Bank, PIMC manages the Company's portfolios and maintains
their financial accounts. PNC Bank is the Company's sub-advisor and custodian
and PFPC Inc. (PFPC) is the Company's transfer agent.
Provident Distributors, Inc. (PDI) serves as the Company's distributor. No
compensation is payable by the Company to PDI for its distribution services,
except that the T-Fund Plus Shares pay PDI a distribution fee of .15% of their
average net assets per annum for distribution and sales support services.
The Company has entered into an Administration Agreement with PFPC and PDI for
certain administrative services.
In return for their advisory and administrative services, the Company pays
PIMC and the administrators each a fee, computed daily and payable monthly,
based upon an annualized percentage of the combined average net assets of each
portfolio as follows:
.175% of the first $1 billion, .15% of the next $1 billion, .125% of the next
$1 billion, .10% of the next $1 billion, .095% of the next $1 billion, .09% of
the next $1 billion, .085% of the next $1 billion and .08% of net assets in
excess of $7 billion.
If expenses borne by any portfolio in any fiscal year exceed the applicable
expense limitation imposed by state securities regulations, the administrators
and PIMC will each reimburse the portfolio for one-half of any excess expense up
to the amount of fees payable to it (except where such regulations require
reimbursement regardless of the fees payable to it).
The administrators and PIMC may reduce their fees, on an equal basis, to the
extent necessary to ensure that the total operating expenses (excluding Service
Organization fees) of each portfolio do not exceed .20% of their respective
average net assets. For the six months ended April 30, 1997, the administrators
and PIMC waived, on an equal basis, a total of $701,835 of the administration
and advisory fees payable to them with respect to FedFund, $932,196 with respect
to T-Fund, $160,159 with respect to Federal Trust Fund and $617,541 with respect
to Treasury Trust Fund.
Service Organization fees of $604,658 were paid to affiliates of PNC Bank for
the six months ended April 30, 1997.
D. The Company's Declaration of Trust permits the Trustees to authorize the
issuance of an unlimited number of full and fractional shares of beneficial
interest (shares) in the Company and to classify or reclassify any unissued
shares into one or more additional classes of shares.
17
<PAGE> 18
Notes to Financial Statements (Continued)
Transactions in shares of the Company are summarized as follows:
<TABLE>
<CAPTION>
FEDFUND PORTFOLIO
------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
Shares sold:
FedFund......................................................... 4,225,486,624 9,628,571,506
FedFund Dollar.................................................. 1,487,066,050 3,265,128,386
Shares issued in reinvestment of dividends:
FedFund......................................................... 6,655,526 14,249,401
FedFund Dollar.................................................. 1,589,589 4,761,455
Shares repurchased:
FedFund......................................................... (4,404,585,777) (9,810,439,998)
FedFund Dollar.................................................. (1,486,244,030) (3,369,319,398)
Shares issued from merger:
FedFund......................................................... -- 198,044,619
--------------- ----------------
Net decrease in shares....................................... (170,032,018) (69,004,029)
=============== ================
</TABLE>
<TABLE>
<CAPTION>
T-FUND PORTFOLIO
------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
Shares sold:
T-Fund......................................................... 9,901,982,735 12,513,467,305
T-Fund Dollar.................................................. 1,364,314,176 1,111,824,421
Shares issued in reinvestment of dividends:
T-Fund......................................................... 9,511,566 19,221,200
T-Fund Dollar.................................................. 980,469 672,492
Shares repurchased:
T-Fund......................................................... (9,891,603,391) (12,629,448,435)
T-Fund Dollar.................................................. (1,352,334,614) (894,525,544)
Shares issued from merger:
T-Fund......................................................... -- 393,229,363
T-Fund Dollar.................................................. -- 50,811,711
--------------- ----------------
Net increase in shares...................................... 32,850,941 565,252,513
=============== ================
</TABLE>
18
<PAGE> 19
Notes to Financial Statements (Continued)
<TABLE>
<CAPTION>
FEDERAL TRUST FUND PORTFOLIO
------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
Shares sold:
Federal Trust................................................... 446,337,105 1,615,471,302
Federal Trust Dollar............................................ 91,573,105 144,195,114
Shares issued in reinvestment of dividends:
Federal Trust................................................... 820,165 3,217,621
Federal Trust Dollar............................................ 73,992 135,807
Shares repurchased:
Federal Trust................................................... (480,571,675) (1,582,641,507)
Federal Trust Dollar............................................ (77,175,453) (145,856,949)
------------ --------------
Net increase (decrease) in shares............................ (18,942,761) 34,521,388
============ ==============
</TABLE>
<TABLE>
<CAPTION>
FEDERAL TRUST FUND PORTFOLIO
------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
Shares sold:
Treasury Trust.................................................. 2,864,355,992 6,593,661,701
Treasury Trust Dollar........................................... 654,468,689 784,170,005
Shares issued in reinvestment of dividends:
Treasury Trust.................................................. 4,624,647 9,135,502
Treasury Trust Dollar........................................... 6,086,495 10,013,924
Shares repurchased:
Treasury Trust.................................................. (2,875,048,142) (6,806,800,550)
Treasury Trust Dollar........................................... (617,611,476) (723,185,812)
-------------- --------------
Net increase (decrease) in shares............................ 36,876,205 (133,005,230)
============== ==============
</TABLE>
19
<PAGE> 20
Notes to Financial Statements (Concluded)
E. At April 30, 1997, net assets consisted of:
<TABLE>
<CAPTION>
FEDERAL TREASURY
TRUST TRUST
FEDFUND T-FUND FUND FUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Paid-in capital....................... $1,351,525,504 $1,891,799,462 $ 281,887,421 $1,229,037,536
Accumulated net realized loss on
security transactions............... (297,933) (87,980) (207,953) (311,156)
-------------- -------------- -------------- --------------
$1,351,227,571 $1,891,711,482 $ 281,679,468 $1,228,726,380
============== ============== ============== ==============
</TABLE>
F. At October 31, 1996, FedFund, T-Fund, Federal Trust Fund, and Treasury Trust
Fund had capital loss carryovers amounting to $281,842, $14,210, $202,799 and
$254,426, respectively, expiring at various times from 2001 to 2004. The capital
loss carryovers are available to offset possible future capital gains of the
related portfolios.
20
<PAGE> 21
Board of Trustees
G. Willing Pepper
Chairman
G. Nicholas Beckwith III
Philip E. Coldwell
Robert R. Fortune
Jerrold B. Harris
Rodney D. Johnson
Officers
G. Willing Pepper
President
Edward J. Roach
Vice President and
Treasurer
W. Bruce McConnel, III
Secretary
Investment Adviser
PNC Institutional Management
Corporation
400 Bellevue Parkway
Wilmington, DE 19809
Co-Administrators
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Provident Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
Distributor
Provident Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
Transfer Agent
PFPC Inc.
P.O. Box 8950
Wilmington, DE 19885-9628
This report is submitted for
the general information of the
shareholders of the Company.
It is not authorized for
distribution to prospective
investors unless accompanied
or preceded by effective
prospectuses for each
portfolio of the Company,
which contain information
concerning the investment
policies of the portfolios as
well as other pertinent
information.
PIF-T-003
FEDFUND
T-FUND
FEDERAL TRUST FUND
TREASURY TRUST FUND
Investment Portfolios
Offered by
Trust for Federal Securities
LOGO
Semi-Annual Report
to Shareholders
April 30, 1997
