<PAGE> 1
[PROVIDENT INSTITUTIONAL FUNDS LETTERHEAD]
TRUST FOR FEDERAL SECURITIES
December 18, 1998
Dear Shareholder:
We are pleased to present the Annual Report to Shareholders of Trust for
Federal Securities for the period ended October 31, 1998.
Commentary on the economy, financial markets, and recent developments in
our funds are contained in the accompanying Investment Adviser's Report.
Thank you for choosing Provident Institutional Funds for your liquidity
needs. We look forward to your continued support of the Funds and encourage your
participation in the upcoming proxy solicitation and shareholder meeting. Should
you have any question regarding the proxy or other matters, please contact your
account representative or call our Client Service Center at (800) 821-7432. We
welcome the opportunity to service all your short term investment needs.
Sincerely,
/S/ G. Willing Pepper
G. Willing Pepper
Chairman
<PAGE> 2
TRUST FOR FEDERAL SECURITIES
ANNUAL INVESTMENT ADVISER'S REPORT
U.S. government obligations were the clear beneficiary of the financial
turbulence that characterized global markets in 1998. Driven by a near mania for
safety, short-term treasury and agency securities witnessed a precipitous drop
in yields that pushed three-month Treasury bills to as low as 3.65%, down from
over 5.00% one year ago. In similar fashion, the thirty-year bond declined to a
record low yield of 4.69%, from almost 6.40% last year. The reasons for the
strong rally in government securities were many. The financial crisis in Asia
last year spread around the world to South America, Latin America and especially
Russia, where a devaluation of their currency and a default on debt made the
situation appear particularly ominous this past summer. The near collapse of a
large U.S.-based hedge fund in September also weighed heavily on investor
confidence. Equity markets took their cue by plummeting approximately 20%
between July and September.
As global economic slowdowns threatened to impact the U.S., the Federal
Reserve (the "Fed") began an aggressive campaign to maintain liquidity in the
financial system. Between September 29 and November 17, 1998, the Fed reduced
the federal funds rate three times, in 25 basis point increments, to 4.75%. The
discount rate was also lowered to 4.50%. Abetted by similar moves by other
central banks, financial markets gained some measure of confidence by late
October. Yields on Treasury bills rose to 4.50%, as money flowed out of the safe
haven of U.S. government obligations and back into equities, where markets
staged strong recoveries.
Throughout the last several quarters, the average weighted maturities of
the Trust's four government funds were increased to the upper end of their
designated targets as lower interest rates were anticipated. As the money market
yield curves flattened, with yields of longer-term securities decreasing more
than those of shorter-term securities, longer-term issues with final maturities
of six to twelve months were purchased to insulate the portfolios. One-year
notes were purchased for T-Fund and Treasury Trust Fund as the "flight to
quality" continued in an environment where inflation remained benign and the
U.S. Treasury continued to pay down debt. Discount notes with maturities of six
to nine months were purchased for FedFund and Federal Trust Fund as spreads
between agencies and treasuries practically doubled over the last six months,
primarily due to heavy issuance by the agencies. Increased demand for
securitized debt caused overnight investments to become more expensive relative
to the federal funds rate. As a result, positions in term repurchase agreements
and shorter-term treasury and agency names were acquired as an alternative to
overnight repurchase agreements.
The portfolios rated by Standard & Poor's (T-Fund, Federal Trust Fund and
Treasury Trust Fund) and by Moody's (FedFund) adhered to the appropriate credit
and maturity guidelines to maintain their AAA ratings. Total assets in the
Trust's four portfolios increased by 26% over the past year.
BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION
2
<PAGE> 3
FEDFUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENGY & INSTRUMENTALITY OBLIGATIONS--55.6%
Federal Farm Credit Bank Bonds
5.32%.............. 01/04/99 $ 9,500 $ 9,501,027
--------------
Federal Home Loan Bank Bonds
5.81............... 11/04/98 8,735 8,735,025
5.385.............. 01/22/99 6,500 6,496,993
9.30............... 01/25/99 30,000 30,272,000
5.43............... 02/24/99 17,750 17,742,114
5.555.............. 02/26/99 19,000 19,000,000
5.605.............. 03/12/99 15,000 14,998,191
5.56............... 03/25/99 10,000 9,995,340
5.536.............. 07/15/99 10,000 9,995,757
--------------
117,235,420
--------------
Federal Home Loan Bank Discount Notes
4.7499............. 01/20/99 50,000 49,472,222
4.77............... 01/20/99 50,000 49,470,000
--------------
98,942,222
--------------
Federal Home Loan Bank
Variable Rate Notes+
5.18............... 11/02/98 15,000 14,993,164
5.25............... 11/02/98 30,000 29,997,087
--------------
44,990,251
--------------
Federal Home Loan Mortgage
Corporation Bonds
5.527.............. 06/10/99 15,000 14,985,100
--------------
Federal Home Loan Mortgage
Corporation Discount Notes
4.75............... 11/10/98 36,500 36,456,656
--------------
Federal National Mortgage
Association Bonds
5.82............... 12/21/98 4,500 4,502,903
5.46............... 01/14/99 2,000 2,000,488
5.37............... 02/26/99 10,000 9,992,362
5.60............... 04/22/99 10,000 9,993,149
5.48............... 07/09/99 15,000 14,989,621
4.63............... 10/14/99 20,000 19,972,533
--------------
61,451,056
--------------
Federal National Mortgage Association
Variable Rate Notes+
5.18............... 11/02/98 30,000 29,986,631
4.304.............. 11/03/98 58,000 58,000,000
4.64............... 11/03/98 20,000 19,995,644
5.4575............. 11/03/98 25,000 24,985,207
5.1976............. 11/17/98 30,000 29,993,032
5.0048............. 11/30/98 25,000 24,984,523
--------------
187,945,037
--------------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
Student Loan Marketing
Association Bonds
5.74%.............. 12/17/98 $ 17,000 $ 17,002,601
5.625.............. 06/30/99 10,000 9,996,085
--------------
26,998,686
--------------
Student Loan Marketing Association
Discount Notes
4.60............... 06/30/99 30,000 29,076,167
--------------
Student Loan Marketing Association
Variable Rate Notes+
4.36............... 11/03/98 10,000 9,999,478
--------------
Total.............................. 637,581,100
--------------
REPURCHASE AGREEMENTS--44.3%
Goldman Sachs & Co.
4.90............... 11/04/98 50,000 50,000,000
(Agreement dated 10/21/98 to
be repurchased at
$50,095,278,
collateralized by
$65,920,989 Federal Home
Loan Mortgage Corporation
Bonds and Federal National
Mortgage Association Bonds
5.99% to 9.487% due from
10/25/22 to 08/18/28. The
market value is
$51,500,000.)
5.25............... 11/09/98 100,000 100,000,000
(Agreement dated 10/09/98 to
be repurchased at
$100,452,083,
collateralized by
$131,841,979 Federal Home
Loan Mortgage Corporation
Bonds and Federal National
Mortgage Association Bonds
5.99% to 9.487% due from
10/25/22 to 08/18/28. The
market value is
$103,000,000.)
</TABLE>
3
<PAGE> 4
FEDFUND PORTFOLIO
Statement of Net Assets (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Lehman Brothers, Inc.
5.60%.............. 11/02/98 $100,000 $ 100,000,000
(Agreement dated 10/30/98 to
be repurchased at
$100,046,667,
collateralized by
$152,398,071 Government
National Mortgage
Association Bonds 6.50% to
9.00% due from 12/15/09 to
08/15/27. The market value
is $103,001,555.)
Morgan Stanley & Co., Inc.
5.5375............. 11/02/98 258,300 258,300,000
(Agreement dated 10/30/98 to
be repurchased at
$258,419,195,
collateralized by
$330,872,000 Federal Home
Loan Bank Bonds, Federal
Home Loan Mortgage
Corporation Bonds and
Federal National Mortgage
Association Bonds 4.23% to
8.90% due from 11/13/98 to
01/26/18. The market value
is $266,783,110.)
--------------
Total.............................. 508,300,000
--------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,145,881,100*)........ 99.9% $1,145,881,100
OTHER ASSETS IN EXCESS OF
LIABILITIES................... 0.1 1,556,565
------ --------------
NET ASSETS (equivalent to $1.00
per share based on
1,117,192,995 FedFund and
30,490,104 FedFund Dollar
Shares of beneficial interest
outstanding).................. 100.0% $1,147,437,665
------ --------------
------ --------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($1,147,437,665 / 1,147,683,099)......... $1.00
-----
-----
</TABLE>
- ---------------
* Also cost for federal income tax purposes.
+ Variable rate obligations--the rate shown is the rate as of October 31, 1998,
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>
<CAPTION>
- -------------------------------------------------
FED FUND PORTFOLIO
Maturity Schedule of Portfolio
October 31, 1998
(Unaudited)
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C> <C> <C>
1- 30 Days $796,535,000 69.4%
31- 60 Days 21,500,000 1.9
61- 90 Days 148,000,000 12.9
91-120 Days 46,750,000 4.1
121-150 Days 25,000,000 2.2
Over 150 Days 110,000,000 9.5
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
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--19.0%
U.S. Treasury Notes
5.50%.............. 11/15/98 $ 30,000 $ 29,998,478
5.875.............. 01/31/99 75,000 75,058,169
5.00............... 02/15/99 10,000 9,984,909
8.875.............. 02/15/99 25,000 25,233,858
5.50............... 02/28/99 25,000 24,996,772
6.25............... 03/31/99 50,000 50,145,888
6.375.............. 04/30/99 142,000 142,582,751
6.25............... 05/31/99 50,000 50,181,595
6.00............... 06/30/99 70,000 70,198,938
6.75............... 06/30/99 70,000 70,525,811
6.375.............. 07/15/99 20,000 20,261,314
5.875.............. 07/31/99 10,000 10,024,670
6.00............... 08/15/99 10,000 10,036,701
6.00............... 10/15/99 40,000 40,573,305
--------------
Total.............................. 629,803,159
--------------
REPURCHASE AGREEMENTS--80.0%
BZW Securities, Inc.
5.35............... 11/02/98 150,000 150,000,000
(Agreement dated 10/30/98 to
be repurchased at
$150,066,875,
collateralized by
$137,710,000 U.S. Treasury
Bonds 6.00% to 6.50% due
from 02/15/26 to 11/15/26.
The market value is
$153,901,790.)
Bear Stearns & Co., Inc.
5.40............... 11/02/98 150,000 150,000,000
(Agreement dated 10/30/98 to
be repurchased at
$150,067,500,
collateralized by
$235,197,000 U.S. Treasury
STRIPS due from 11/15/99
to 08/15/19. The market
value is $153,553,255.)
Deutsche Morgan Grenfell, Inc.
5.20............... 11/02/98 150,000 150,000,000
(Agreement dated 10/30/98 to
be repurchased at
$150,065,000,
collateralized by
$120,200,000 U.S.Treasury
Bonds 7.25% to 8.125% due
from 05/15/16 to 05/15/21.
The market value is
$153,075,880.)
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
Goldman Sachs & Co.
5.15%.............. 11/02/98 $100,000 $ 100,000,000
(Agreement dated 10/02/98 to
be repurchased at
$100,443,472,
collateralized by
$96,186,000 U.S Treasury
Notes 5.50% to 6.25% due
from 02/29/00 to 02/15/07.
The market value is
$102,000,674.)
5.38............... 11/02/98 50,000 50,000,000
(Agreement dated 10/30/98 to
be repurchased at
$50,022,417,
collateralized by
$48,093,000 U.S. Treasury
Notes 5.50% to 6.25% due
from 02/29/00 to 02/15/07.
The market value is
$51,000,337.)
Greenwich Capital Markets, Inc.
5.38............... 11/02/98 250,000 250,000,000
(Agreement dated 10/30/98 to
be repurchased at
$250,112,083,
collateralized by
$481,464,000 U.S. Treasury
STRIPS due from 02/15/09
to 08/15/12. The market
value is $255,000,285.)
Hong Kong Shanghai Bank
Securities, Inc.
5.375.............. 11/02/98 150,000 150,000,000
(Agreement dated 10/30/98 to
be repurchased at
$150,067,187,
collateralized by
$108,437,000 U.S. Treasury
Bonds 7.25% to 9.125% due
from 08/15/17 to 08/15/22.
The market value is
$153,055,478.)
</TABLE>
5
<PAGE> 6
T-FUND PORTFOLIO
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Merrill Lynch Government
Securities, Inc.
5.15%.............. 11/02/98 $100,000 $ 100,000,000
(Agreement dated 10/02/98 to
be repurchased at
$100,443,472,
collateralized by
$114,797,000 U.S. Treasury
Inflation Indexed
Securities and STRIPS
3.375% to 8.75% due from
07/15/02 to 08/15/28. The
market value is
$102,004,123.)
5.35............... 11/02/98 250,000 250,000,000
(Agreement dated 10/30/98 to
be repurchased at
$250,111,458,
collateralized by
$476,866,000 U.S. Treasury
STRIPS due from 11/15/98
to 02/15/25. The market
value is $255,002,025.)
4.71............... 11/19/98 150,000 150,000,000
(Agreement dated 10/21/98 to
be repurchased at
$150,569,125,
collateralized by
$278,512,000 U.S. Treasury
STRIPS due from 08/15/99
to 11/15/24. The market
value is $153,002,894.)
Morgan (J.P.) Securities, Inc.
5.30............... 11/02/98 150,000 150,000,000
(Agreement dated 10/30/98 to
be repurchased at
$150,066,250,
collateralized by
$135,070,000 U.S. Treasury
Bonds and Notes, 5.875% to
8.00% due from 11/30/99 to
11/15/21. The market value
is $153,000,020.)
Morgan Stanley & Co.
5.15............... 11/02/98 100,000 100,000,000
(Agreement dated 10/02/98 to
be repurchased at
$100,443,472,
collateralized by
$80,711,000 U.S. Treasury
Bonds and Notes 6.00% to
8.75% due from 08/15/00 to
08/15/20. The market value
is $102,032,582.)
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
5.3875%............ 11/02/98 $330,100 $ 330,100,000
(Agreement dated 10/30/98 to
be repurchased at
$330,248,201,
collateralized by
$350,060,000 U.S. Treasury
Bills due 10/14/99. The
market value is
$336,807,779.)
4.72............... 12/21/98 200,000 200,000,000
(Agreement dated 10/21/98 to
be repurchased at
$201,599,556,
collateralized by
$190,653,000 U.S. Treasury
Bonds and Notes 5.375% to
7.875% due from 06/30/00
to 02/15/21. The market
value is $204,060,970.)
Nesbitt Burns Securities, Inc.
5.35............... 11/02/98 150,000 150,000,000
(Agreement dated 10/30/98 to
be repurchased at
$150,066,875,
collateralized by
$141,830,000 U.S. Treasury
Notes 5.75% to 5.875% due
from 11/15/00 to 04/30/03.
The market value is
$153,045,174.)
Salomon Brothers, Inc.
5.37............... 11/02/98 150,000 150,000,000
(Agreement dated 10/30/98 to
be repurchased at
$150,067,125,
collateralized by
$144,721,000 U.S. Treasury
Notes 6.25% to 7.75% due
from 01/31/00 to 05/31/00.
The market value is
$153,063,360.)
SBC Warburg Dillon Read, Inc.
4.75............... 11/02/98 77,000 77,000,000
(Agreement dated 10/30/98 to
be repurchased at
$77,030,479,
collateralized by
$79,406,000 U.S. Treasury
Bills due from 01/21/99 to
10/14/99. The market value
is $78,579,643.)
--------------
Total.............................. 2,657,100,000
--------------
</TABLE>
6
<PAGE> 7
T-FUND PORTFOLIO
Statement of Net Assets (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $3,286,903,159*)........ 99.0% $3,286,903,159
OTHER ASSETS IN EXCESS OF
LIABILITIES................... 1.0 34,483,257
------ --------------
NET ASSETS (equivalent to $1.00
per share based on
2,544,010,964 T-Fund and
777,384,350 T-Fund Dollar
Shares of beneficial interest
outstanding.)................. 100.0% $3,321,386,416
------ --------------
------ --------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($3,321,386,416 / 3,321,395,314)......... $1.00
-----
-----
</TABLE>
- ---------------
* Also cost for federal income tax purposes.
<TABLE>
<CAPTION>
- ---------------------------------------------------
T-FUND PORTFOLIO
Maturity Schedule of Portfolio
October 31, 1998
(Unaudited)
MATURITY
PERIOD PAR PERCENTAGE
------------- -------------- ----------
<S> <C> <C> <C> <C>
1- 30 Days $2,487,100,000 75.7%
31- 60 Days 200,000,000 6.1
91-120 Days 135,000,000 4.1
Over 150 Days 462,000,000 14.1
Average Weighted Maturity--43 Days
- ---------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
FEDERAL TRUST FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY & INSTRUMENTALITY OBLIGATIONS--100.2%
Federal Farm Credit Bank Bonds
5.45%................. 12/14/98 $ 5,000 $ 4,998,833
5.50.................. 04/01/99 20,000 19,999,403
------------
24,998,236
------------
Federal Farm Credit Bank
Discount Notes
4.80.................. 11/03/98 750 749,800
5.09.................. 11/03/98 1,260 1,259,644
5.10.................. 11/05/98 1,600 1,599,093
4.7499................ 11/18/98 4,025 4,015,972
4.75.................. 11/23/98 5,000 4,985,486
4.80.................. 11/23/98 11,000 10,967,733
5.08.................. 11/23/98 17,750 17,694,896
5.35.................. 11/25/98 1,500 1,494,650
------------
42,767,274
------------
Federal Farm Credit Bank
Variable Rate Notes+
5.283................. 11/02/98 15,000 14,997,563
------------
Federal Home Loan Bank Bonds
6.117................. 01/29/99 13,000 13,035,822
------------
Federal Home Loan Bank
Discount Notes
4.76.................. 11/18/98 2,760 2,753,796
5.0499................ 01/04/99 3,825 3,790,660
4.75.................. 01/20/99 8,200 8,113,444
4.82.................. 01/27/99 15,000 14,825,275
4.94.................. 02/10/99 25,000 24,653,514
------------
54,136,689
------------
Federal Home Loan Bank
Variable Rate Notes+
5.18.................. 11/02/98 10,000 9,995,442
5.22.................. 11/02/98 15,000 14,998,567
5.24.................. 11/02/98 10,000 9,999,029
------------
34,993,038
------------
Student Loan Marketing Association
Discount Notes
4.99.................. 01/19/99 20,000 19,780,994
4.60.................. 06/30/99 5,000 4,846,028
------------
24,627,022
------------
Student Loan Marketing Association
Variable Rate Notes+
4.37.................. 11/03/98 30,000 30,000,000
4.405................. 11/03/98 1,000 999,980
------------
30,999,980
------------
Tennessee Valley Authority
Discount Notes
5.37%................. 11/05/98 $34,000 $ 33,979,713
4.8199................ 11/13/98 11,500 11,481,523
4.80.................. 11/23/98 1,000 997,068
4.72999............... 12/18/98 15,000 14,907,371
4.80.................. 12/18/98 17,907 17,794,783
------------
79,160,458
------------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $319,716,082*)............. 100.2% 319,716,082
LIABILITIES IN EXCESS OF OTHER
ASSETS........................... (0.2) (503,016)
------ ------------
NET ASSETS (equivalent to $1.00 per
share based on 280,733,066
Federal Trust and 38,629,838
Federal Trust Dollar Shares of
beneficial interest
outstanding)..................... 100.0% $319,213,066
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($319,213,066 / 319,362,904)............... $1.00
-----
-----
</TABLE>
- ---------------
* Also cost for federal income tax purposes.
+ Variable Rate Obligations--the rate shown is the rate as of October 31, 1998,
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>
<CAPTION>
- -------------------------------------------------
FEDERAL TRUST FUND PORTFOLIO
Maturity Schedule of Portfolio
October 31, 1998
(Unaudited)
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C> <C> <C>
1- 30 Days $173,145,000 53.9%
31- 60 Days 37,907,000 11.8
61- 90 Days 60,025,000 18.7
91-120 Days 25,000,000 7.8
Over 150 Days 25,000,000 7.8
Average Weighted Maturity--48 Days
- -------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
TREASURY TRUST FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- -------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--57.9%
U.S. Treasury Bills
3.60%.............. 11/05/98 $ 485 $ 484,806
3.78............... 01/07/99 1,235 1,226,312
3.77............... 01/14/99 1,225 1,215,507
--------------
2,926,625
--------------
U.S. Treasury Notes
5.50............... 11/15/98 144,500 144,535,350
8.875.............. 11/15/98 145,000 145,219,407
5.125.............. 11/30/98 30,000 30,003,940
5.625.............. 11/30/98 75,000 75,021,696
5.125.............. 12/31/98 5,000 5,004,586
5.00............... 01/31/99 90,000 90,044,243
5.875.............. 01/31/99 230,000 230,571,991
5.00............... 02/15/99 25,000 25,046,007
8.875.............. 02/15/99 75,000 75,868,630
5.50............... 02/28/99 50,000 50,177,618
5.875.............. 02/28/99 30,000 30,156,885
--------------
901,650,353
--------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $904,576,978*).......... 57.9% $ 904,576,978
RECEIVABLE FROM SECURITIES
MATURED....................... 40.1 627,325,000
OTHER ASSETS IN EXCESS OF
LIABILITIES................... 2.0 31,230,730
------ --------------
NET ASSETS (equivalent to $1.00
per share based on
1,091,516,291 Treasury Trust
and 471,779,381 Treasury Trust
Dollar Shares of beneficial
interest outstanding) ........ 100.0% $1,563,132,708
------ --------------
------ --------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($1,563,132,708 / 1,563,295,672)......... $1.00
-----
-----
</TABLE>
- ---------------
* Cost for federal income tax purposes is $904,585,060.
<TABLE>
<CAPTION>
- -----------------------------------------------
TREASURY TRUST FUND PORTFOLIO
Maturity Schedule of Portfolio
October 31, 1998
(Unaudited)
MATURITY
PERIOD PAR PERCENTAGE
----------- ------------ ----------
<S> <C> <C> <C> <C>
1- 30 Days $394,985,000 43.8%
61- 90 Days 7,460,000 0.8
91-120 Days 500,000,000 55.4
Average Weighted Maturity--39 Days
- -----------------------------------------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
TRUST FOR FEDERAL SECURITIES
Statements of Operations
Year Ended October 31, 1998
<TABLE>
<CAPTION>
FEDERAL TREASURY
TRUST TRUST
FEDFUND T-FUND FUND FUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Interest income........................................... $64,254,381 $168,379,686 $16,183,890 $67,305,552
----------- ------------ ----------- -----------
Expenses:
Investment advisory fee................................... 1,434,444 3,773,669 364,331 1,593,104
Administration fee........................................ 1,434,444 3,773,669 364,331 1,593,104
Trustees' fees and officer's salary....................... 26,634 57,390 6,209 20,674
Transfer agent fee........................................ 61,989 133,147 15,966 74,117
Custodian fee............................................. 202,891 374,069 72,044 215,151
Shareholder computer access program....................... 25,399 10,919 -- 3,080
Legal and audit........................................... 22,953 67,162 5,718 24,992
Registration fees and expenses............................ 28,011 24,351 21,183 18,659
Printing.................................................. 3,866 10,847 2,586 5,142
Other..................................................... 30,942 64,285 11,470 32,638
----------- ------------ ----------- -----------
3,271,573 8,289,508 863,838 3,580,661
Service Organization fees--Dollar Shares.................. 125,091 1,483,848 95,541 1,007,664
----------- ------------ ----------- -----------
3,396,664 9,773,356 959,379 4,588,325
Less fees waived.......................................... (957,319) (2,190,077) (273,913) (999,762)
----------- ------------ ----------- -----------
Total expenses.......................................... 2,439,345 7,583,279 685,466 3,588,563
----------- ------------ ----------- -----------
Net investment income..................................... 61,815,036 160,796,407 15,498,424 63,716,989
Net realized gain from security transactions.............. 59,739 56,588 61,366 79,106
----------- ------------ ----------- -----------
Net increase in net assets resulting from operations...... $61,874,775 $160,852,995 $15,559,790 $63,796,095
=========== ============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 11
TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
FEDFUND PORTFOLIO T-FUND PORTFOLIO
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997 OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income............................. $ 61,815,036 $ 75,164,053 $ 160,796,407 $ 109,434,440
Net gain (loss) on investments.................... 59,739 (23,331) 56,588 8,808
--------------- ---------------- ---------------- ----------------
Net increase in net assets resulting from
operations...................................... 61,874,775 75,140,722 160,852,995 109,443,248
--------------- ---------------- ---------------- ----------------
Distributions to shareholders:
From net investment income:
FedFund Shares.................................. (59,247,442) (71,336,960) -- --
FedFund Dollar Shares........................... (2,567,594) (3,827,093) -- --
T-Fund Shares................................... -- -- (130,717,839) (87,961,168)
T-Fund Dollar Shares............................ -- -- (30,078,568) (21,473,272)
--------------- ---------------- ---------------- ----------------
Total distributions to shareholders........... (61,815,036) (75,164,053) (160,796,407) (109,434,440)
--------------- ---------------- ---------------- ----------------
Capital share transactions (at $1 per share):
Sale of shares.................................... 6,842,819,441 10,159,957,992 30,459,048,928 22,232,918,782
Reinvestment of dividends......................... 13,345,715 15,153,501 40,453,713 24,571,259
Repurchase of shares.............................. (7,045,960,017) (10,359,191,055) (29,459,596,681) (21,834,949,208)
--------------- ---------------- ---------------- ----------------
Increase (decrease) in net assets derived from
capital share transactions...................... (189,794,861) (184,079,562) 1,039,905,960 422,540,833
--------------- ---------------- ---------------- ----------------
Total increase (decrease) in net assets....... (189,735,122) (184,102,893) 1,039,962,548 422,549,641
Net assets:
Beginning of period................................. 1,337,172,787 1,521,275,680 2,281,423,868 1,858,874,227
--------------- ---------------- ---------------- ----------------
End of period....................................... $ 1,147,437,665 $ 1,337,172,787 $ 3,321,386,416 $ 2,281,423,868
=============== ================ ================ ================
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
FEDERAL TRUST TREASURY TRUST
FUND PORTFOLIO FUND PORTFOLIO
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997 OCTOBER 31,1998 OCTOBER 31, 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income............................. $ 15,498,424 $ 14,504,526 $ 63,716,989 $ 61,147,163
Net gain (loss) on investments.................... 61,366 (8,037) 79,106 32,503
--------------- --------------- --------------- ---------------
Net increase in net assets resulting from
operations...................................... 15,559,790 14,496,489 63,796,095 61,179,666
--------------- --------------- --------------- ---------------
Distributions to shareholders:
From net investment income:
Federal Trust Shares............................ (13,571,694) (12,745,296) -- --
Federal Trust Dollar Shares..................... (1,926,730) (1,759,230) -- --
Treasury Trust Shares........................... -- -- (44,541,445) (43,994,646)
Treasury Trust Dollar Shares.................... -- -- (19,175,544) (17,152,517)
--------------- --------------- --------------- ---------------
Total distributions to shareholders........... (15,498,424) (14,504,526) (63,716,989) (61,147,163)
--------------- --------------- --------------- ---------------
Capital share transactions (at $1 per share):
Sale of shares.................................... 1,408,226,011 1,113,408,997 9,002,283,228 8,110,835,799
Reinvestment of dividends......................... 1,867,261 1,777,322 19,672,838 20,130,709
Repurchase of shares.............................. (1,358,933,899) (1,147,812,970) (8,576,956,809) (8,204,831,424)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets derived from
capital share transactions...................... 51,159,373 (32,626,651) 444,999,257 (73,864,916)
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets....... 51,220,739 (32,634,688) 445,078,363 (73,832,413)
Net assets:
Beginning of period................................. 267,992,327 300,627,015 1,118,054,345 1,191,886,758
--------------- --------------- --------------- ---------------
End of period....................................... $ 319,213,066 $ 267,992,327 $ 1,563,132,708 $ 1,118,054,345
=============== =============== =============== ===============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE> 13
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
FEDFUND SHARES
--------------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<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...... .0535 .0530 .0529 .0571 .0377
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders
From Net Investment
Income................... (.0535) (.0530) (.0529) (.0571) (.0377)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of
Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return................. 5.48% 5.43% 5.41% 5.86% 3.84%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)..................... 1,116,979 1,220,857 1,407,529 1,377,175 1,557,562
Ratio of Expenses to Average
Daily Net Assets(1)........ .20% .20% .19% .18% .18%
Ratio of Net Investment
Income to Average Daily Net
Assets..................... 5.35% 5.30% 5.29% 5.71% 3.76%
<CAPTION>
FEDFUND DOLLAR SHARES
---------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------
1998 1997 1996 1995 1994
------- -------- -------- -------- --------
<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...... .0510 .0505 .0504 .0546 .0352
------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders
From Net Investment
Income................... (.0510) (.0505) (.0504) (.0546) (.0352)
------- -------- -------- -------- --------
Net Asset Value, End of
Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======== ======== ======== ========
Total Return................. 5.23% 5.18% 5.16% 5.61% 3.59%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)..................... 30,459 116,316 113,747 213,177 135,769
Ratio of Expenses to Average
Daily Net Assets(1)........ .45% .45% .44% .43% .43%
Ratio of Net Investment
Income to Average Daily Net
Assets..................... 5.10% 5.05% 5.04% 5.46% 3.51%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .28%, .29%, .30%, .29%
and .30% , respectively, for the years ended October 31, 1998, 1997, 1996,
1995 and 1994 for FedFund Shares, and .53%, .54%, .55%, .54% and .55%,
respectively, for the years ended October 31, 1998, 1997, 1996, 1995 and
1994 for FedFund Dollar Shares.
See accompanying notes to financial statements.
13
<PAGE> 14
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
T-FUND SHARES
--------------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<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........ .0532 .0528 .0528 .0565 .0368
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders
From Net Investment
Income..................... (.0532) (.0528) (.0528) (.0565) (.0368)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of
Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return................... 5.46% 5.41% 5.40% 5.80% 3.75%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)....................... 2,544,001 1,765,332 1,507,603 1,211,220 1,012,977
Ratio of Expenses to Average
Daily Net Assets............. .20% .20% .19% .18% .18%
Ratio of Net Investment Income
to Average Daily Net
Assets....................... 5.31% 5.28% 5.26% 5.66% 3.65%
<CAPTION>
T-FUND DOLLAR SHARES
--------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- ------- -------
<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........ .0507 .0503 .0503 .0540 .0343
-------- -------- -------- ------- -------
Less Distributions:
Dividends to Shareholders
From Net Investment
Income..................... (.0507) (.0503) (.0503) (.0540) (.0343)
-------- -------- -------- ------- -------
Net Asset Value, End of
Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======= =======
Total Return................... 5.21% 5.16% 5.15% 5.55% 3.50%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)....................... 777,385 516,092 351,271 82,502 22,195
Ratio of Expenses to Average
Daily Net Assets............. .45% .45% .44% .43% .43%
Ratio of Net Investment Income
to Average Daily Net
Assets....................... 5.06% 5.03% 5.01% 5.41% 3.40%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .27%, .29%, .30%, .29%
and .29%, respectively, for the years ended October 31, 1998, 1997, 1996,
1995 and 1994 for T-Fund Shares, and .52%, .54%, .55%, .54% and .54%,
respectively, for the years ended October 31, 1998, 1997, 1996, 1995 and
1994 for T-Fund Dollar Shares.
See accompanying notes to financial statements.
14
<PAGE> 15
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
FEDERAL TRUST SHARES
----------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<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..................... .0529 .0521 .0523 .0563 .0380
-------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders From Net
Investment Income....................... (.0529) (.0521) (.0523) (.0563) (.0380)
-------- -------- -------- -------- --------
Net Asset Value, End of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return................................ 5.42% 5.33% 5.35% 5.77% 3.87%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)............ 280,580 229,292 273,752 237,718 317,769
Ratio of Expenses to Average Daily Net
Assets(1)................................. .20% .20% .19% .18% .18%
Ratio of Net Investment Income to Average
Daily Net Assets.......................... 5.29% 5.21% 5.22% 5.61% 3.85%
<CAPTION>
FEDERAL TRUST DOLLAR SHARES
----------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- ------
<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..................... .0504 .0496 .0498 .0538 .0355
------- ------- ------- ------- ------
Less Distributions:
Dividends to Shareholders From Net
Investment Income....................... (.0504) (.0496) (.0498) (.0538) (.0355)
------- ------- ------- ------- ------
Net Asset Value, End of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======
Total Return................................ 5.17% 5.08% 5.10% 5.52% 3.62%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)............ 38,633 38,700 26,875 28,402 8,278
Ratio of Expenses to Average Daily Net
Assets(1)................................. .45% .45% .44% .43% .43%
Ratio of Net Investment Income to Average
Daily Net Assets.......................... 5.04% 4.96% 4.97% 5.36% 3.60%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .29%, .31%, .31%, .32%
and .31%, respectively, for the years ended October 31, 1998, 1997, 1996,
1995 and 1994 for Federal Trust Shares, and .54%, .56%, .56%, .57% and .56%,
respectively, for the years ended October 31, 1998, 1997, 1996, 1995 and
1994 for Federal Trust Dollar Shares.
See accompanying notes to financial statements.
15
<PAGE> 16
TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
TREASURY TRUST SHARES
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1998 1997 1996 1995 1994
---------- -------- -------- ---------- ----------
<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......... .0502 .0504 .0508 .0545 .0359
---------- -------- -------- ---------- ----------
Less Distributions:
Dividends to Shareholders From
Net Investment Income....... (.0502) (.0504) (.0508) (.0545) (.0359)
---------- -------- -------- ---------- ----------
Net Asset Value, End of
Period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ========== ==========
Total Return.................... 5.14% 5.16% 5.20% 5.59% 3.65%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)........................ 1,091,366 786,556 897,659 1,101,834 1,016,635
Ratio of Expenses to Average
Daily Net Assets(1)........... .20% .20% .19% .18% .18%
Ratio of Net Investment Income
to Average Daily Net Assets... 5.02% 5.04% 5.08% 5.45% 3.57%
<CAPTION>
TREASURY TRUST DOLLAR SHARES
----------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<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......... .0477 .0479 .0483 .0520 .0334
-------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders From
Net Investment Income....... (.0477) (.0479) (.0483) (.0520) (.0334)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.................... 4.89% 4.91% 4.95% 5.34% 3.40%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000)........................ 471,767 331,498 294,228 223,272 181,934
Ratio of Expenses to Average
Daily Net Assets(1)........... .45% .45% .44% .43% .43%
Ratio of Net Investment Income
to Average Daily Net Assets... 4.77% 4.79% 4.83% 5.20% 3.32%
</TABLE>
- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .28%, .30%, .30%, .29%
and .29% , respectively, for the years ended October 31, 1998, 1997, 1996,
1995 and 1994 for Treasury Trust Shares, and .53%, .55%, .55%, .54% and
.54%, respectively, for the years ended October 31, 1998, 1997, 1996, 1995
and 1994 for Treasury Trust Dollar Shares.
See accompanying notes to financial statements.
16
<PAGE> 17
Notes to Financial Statements
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. Federal Trust Fund portfolio has
two classes of shares, Federal Trust Shares and Federal Trust Dollar Shares.
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 and broker-dealers (Service Organizations) which provide support
services to their customers who beneficially own such shares, in consideration
of the Company's payment of 0.25% (on an annualized basis) of the average daily
net asset value of the Dollar Shares or Plus Shares held for the benefit of
their customers. The Service Organization fee is charged to the earnings of the
respective Dollar Shares or Plus Shares. The T-Fund Plus Shares also bear
distribution fees of 0.15% (on an annualized basis) of their average daily net
asset value payable to the Company's distributor, Provident Distributors, Inc.
(PDI), for distribution and sales support services. No T-Fund Plus Shares have
been sold as of October 31, 1998.
B. Significant accounting policies are as follows:
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the 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.
Federal Taxes--No provision is made for federal taxes as it is the Company's
intention to
17
<PAGE> 18
Notes to Financial Statements (Continued)
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 Blackrock Institutional Management Corporation (BIMC), an indirect majority
owned subsidiary of PNC Bank, BIMC manages the Company's portfolios and
maintains their financial accounts. PNC Bank is the Company's sub-advisor and
custodian and PFPC Inc. (PFPC), an indirect wholly-owned subsidiary of PNC Bank,
is the Company's transfer agent.
In March 1998, BIMC (formerly known as PNC Institutional Management
Corporation) assumed the responsibilities of PNC Bank, as sub-advisor, to
provide research, credit analysis and recommendations with respect to the Fund's
investments and supply certain computer facilities, personnel and other
services. The personnel, facilities, and expenses related to these services have
been transferred to BIMC and BIMC's obligation to pay to PNC Bank a portion of
the advisory fee has been terminated.
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 0.15% 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
(the Administrators) for certain administrative services.
In return for their advisory and administrative services, the Company pays
BIMC 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 BIMC 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 BIMC have also agreed to 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 year ended October 31, 1998, the
Administrators and BIMC waived, on an equal basis, a total of $957,319 of the
administration and advisory fees payable to them with respect to FedFund,
$2,190,077 with respect to T-Fund, $273,913 with respect to Federal Trust Fund
and $999,762 with respect to Treasury Trust Fund.
Service Organization fees of $1,228,542 were paid to affiliates of BIMC for
the year ended October 31, 1998.
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.
18
<PAGE> 19
Notes to Financial Statements (Continued)
Transactions in shares of the Company are summarized as follows:
<TABLE>
<CAPTION>
FEDFUND PORTFOLIO
-------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Shares sold:
FedFund................................................ 6,319,523,560 7,982,671,603
FedFund Dollar......................................... 523,295,881 2,177,286,389
Shares issued in reinvestment of dividends:
FedFund................................................ 11,390,841 11,985,551
FedFund Dollar......................................... 1,954,874 3,167,950
Shares repurchased:
FedFund................................................ (6,434,850,991) (8,181,306,912)
FedFund Dollar......................................... (611,109,026) (2,177,884,143)
-------------- --------------
Net decrease in shares............................... (189,794,861) (184,079,562)
============== ==============
</TABLE>
<TABLE>
<CAPTION>
T-FUND PORTFOLIO
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Shares sold:
T-Fund................................................. 25,173,201,809 18,993,277,228
T-Fund Dollar.......................................... 5,285,847,119 3,239,641,554
Shares issued in reinvestment of dividends:
T-Fund................................................. 35,843,706 21,093,890
T-Fund Dollar.......................................... 4,610,007 3,477,369
Shares repurchased:
T-Fund................................................. (24,430,422,061) (18,756,649,706)
T-Fund Dollar.......................................... (5,029,174,620) (3,078,299,502)
--------------- ----------------
Net increase in shares............................... 1,039,905,960 422,540,833
=============== ================
</TABLE>
19
<PAGE> 20
Notes to Financial Statements (Continued)
<TABLE>
<CAPTION>
FEDERAL TRUST FUND PORTFOLIO
-------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Shares sold:
Federal Trust.......................................... 1,151,951,115 883,098,652
Federal Trust Dollar................................... 256,274,896 230,310,345
Shares issued in reinvestment of dividends:
Federal Trust.......................................... 1,627,779 1,604,400
Federal Trust Dollar................................... 239,482 172,922
Shares repurchased:
Federal Trust.......................................... (1,102,343,671) (929,156,412)
Federal Trust Dollar................................... (256,590,228) (218,656,558)
-------------- ------------
Net increase (decrease) in shares.................... 51,159,373 (32,626,651)
============== ============
</TABLE>
<TABLE>
<CAPTION>
TREASURY TRUST FUND PORTFOLIO
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Shares sold:
Treasury Trust......................................... 6,646,747,191 6,033,944,270
Treasury Trust Dollar.................................. 2,355,536,037 2,076,891,529
Shares issued in reinvestment of dividends:
Treasury Trust......................................... 5,171,973 8,360,341
Treasury Trust Dollar.................................. 14,500,865 11,770,368
Shares repurchased:
Treasury Trust......................................... (6,347,159,817) (6,153,431,801)
Treasury Trust Dollar.................................. (2,229,796,992) (2,051,399,623)
-------------- --------------
Net increase (decrease) in shares.................... 444,999,257 (73,864,916)
============== ==============
</TABLE>
On October 31, 1998, one shareholder held approximately 14% of the outstanding
shares of T-Fund, two shareholders held approximately 35% of the outstanding
shares of Federal Trust Fund and one shareholder held approximately 14% of the
outstanding shares of Treasury Trust Fund.
20
<PAGE> 21
Notes to Financial Statements (Concluded)
E. At October 31, 1998, 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........................ $1,147,683,099 $3,321,395,314 $319,362,904 $1,563,295,672
Accumulated net realized loss on
security transactions................ (245,434) (8,898) (149,838) (162,964)
-------------- -------------- ------------ --------------
$1,147,437,665 $3,321,386,416 $319,213,066 $1,563,132,708
============== ============== ============ ==============
</TABLE>
F. At October 31, 1998, FedFund, T-Fund, Federal Trust, and Treasury Trust had
capital loss carryovers amounting to $245,434, $8,898, $149,838 and $154,882,
respectively, expiring at various times from 2001 to 2005. The capital loss
carryovers are available to offset possible future capital gains of the
corresponding portfolios.
21
<PAGE> 22
Report of Independent Accountants
To the Board of Trustees and Shareholders
of Trust for Federal Securities
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
FedFund Portfolio, T-Fund Portfolio, Federal Trust Fund Portfolio and Treasury
Trust Fund Portfolio (constituting Trust for Federal Securities, hereafter
referred to as the "Fund") at October 31, 1998, the results of each of their
operations for the year then ended, the changes in each of their net assets for
each of the two years in the period then ended and the financial highlights for
each of the five years in the period then ended, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1998 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Philadelphia, PA 19103
December 4, 1998
22
<PAGE> 23
Board of Trustees
G. Willing Pepper
Chairman
G. Nicholas Beckwith III
Philip E. Coldwell
Robert R. Fortune
Jerrold B. Harris
Rodney D. Johnson
Officers
Thomas H. Nevin
President
Lisa M. Buono
Treasurer
W. Bruce McConnel, III
Secretary
Investment Adviser
BlackRock 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-A-003
FEDFUND
T-FUND
FEDERAL TRUST FUND
TREASURY TRUST FUND
Investment Portfolios
Offered by
Trust for Federal Securities
[PROVIDENT INSTITUTIONAL FUNDS LOGO]
Annual Report
to Shareholders
October 31, 1998
