<PAGE> 1
Founders of
"America's First
Money Fund"
810 Seventh Avenue, New York, NY 10019-5868
GENERAL INFORMATION AND 24-HOUR YIELD AND BALANCE INFORMATION
800-637-1700
This literature is not authorized for distribution to prospective investors
unless
preceded or accompanied by an appropriate current prospectus.
Distributor -- Resrv Partners, Inc.
Founders of
"America's First
Money Fund"
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SEMI-ANNUAL REPORT
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PRIMARY INSTITUTIONAL FUND
U.S. GOVERNMENT INSTITUTIONAL FUND
FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1997
(UNAUDITED)
<PAGE> 2
RESERVE INSTITUTIONAL TRUST--PRIMARY INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
% DAYS TO VALUE
RATE MATURITY (NOTE 1)
---- -------- ------------
<S> <C> <C> <C>
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT -- 11.64%
Bayerische Hypotheken-und Wechsel Bank AG(b)............................................ 5.77 85 $ 8,008,975
Societe Generale(b)..................................................................... 5.56 4 7,037,839
Union Bank of California, N.A........................................................... 5.80 87 9,007,250
------------
Total Negotiable Certificates of Deposit................................................ 24,054,064
------------
REPURCHASE AGREEMENTS -- 88.09%
GNMA 6.50%-9.50% due from 1/15/02 to 4/15/27 (Repo with CS First Boston Corporation
dated October 30, 1997, resale amount 44,217,458)..................................... 5.56 3 44,217,458
FNMS 6.50%-7.00% due from 10/21/01 to 2/1/26 (Repo with DLJ Securities Corporation dated
November 20, 1997, resale amount $25,042,931)......................................... 5.62 3 25,042,931
FGRA due from 2/15/21 to 10/15/27 and STRIPS due from 9/1/07 to 9/1/22 (Repo with
Merrill Lynch GSI dated October 29, 1997, resale amount $42,715,440).................. 5.53 3 42,715,440
FGRA 6.225% due 10/15/08, FNAR 7.034% due 11/1/32 and U.S. Treasury Note 6.00% due
6/30/99 (Repo with Prudential Securities, Inc. dated November 28, 1997, resale amount
$44,021,083).......................................................................... 5.75 3 44,021,083
FNAR 6.137% due 9/1/34 (Repo with Smith Barney, Inc. dated November 28, 1997, resale
amount $26,012,458)................................................................... 26,012,458
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Total Repurchase Agreements............................................................. 182,009,370
------------
Primary Institutional Fund Investments -- (99.73%) (Cost $205,500,000).................. 206,063,434
Other assets, less liabilities -- (.27%)................................................ 559,861
------------
NET ASSETS (100% ) equivalent to $1.00 net asset value, offering and redemption prices per
share based on 206,623,295 shares of beneficial interest $.001 par value outstanding.... $206,623,295
===========
</TABLE>
RESERVE INSTITUTIONAL TRUST -- U.S. GOVERNMENT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -- 94.87%
U.S. Treasury Bond 12.00% due 8/15/13 (Repo with Smith Barney, Inc. dated November 28,
1997, resale amount $2,000,950)....................................................... 5.70 3 $ 2,000,950
Other assets, less liabilities (5.13%).................................................. 108,173
------------
NET ASSETS (100% ) equivalent to $1.00 net asset value, offering and redemption prices per
share based on 2,109,123 shares of beneficial interest $.001 par value outstanding...... $ 2,109,123
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 3
RESERVE INSTITUTIONAL TRUST
PRIMARY AND U.S. GOVERNMENT INSTITUTIONAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NOVEMBER 30, 1997
-----------------
U.S. GOVERNMENT
INSTITUTIONAL
FUND
-----------------
<S> <C>
ASSETS:
Investments, at value (identified cost -- $2,000,000)................................... $ 2,000,950
Cash.................................................................................... 108,251
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Total Assets.......................................................................... 2,109,201
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LIABILITIES:
Accrued expenses........................................................................ 78
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Total Liabilities..................................................................... 78
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NET ASSETS................................................................................ $ 2,109,123
==========
NET ASSETS CONSIST OF:
Shares of beneficial interest, $.001 par value, unlimited number of shares authorized... $ 2,109
Paid-in capital in excess of par........................................................ 2,107,014
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NET ASSETS -- Equivalent to $1.00 per share based on 2,109,123 shares of beneficial
interest outstanding.................................................................... $ 2,109,123
==========
</TABLE>
RESERVE INSTITUTIONAL TRUST -- STATEMENTS OF OPERATIONS -- (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NOVEMBER 30, 1997
--------------------------------
PRIMARY U.S. GOVERNMENT
INSTITUTIONAL INSTITUTIONAL
------------- ---------------
<S> <C> <C>
INTEREST INCOME (Note 1)......................................................... $ 1,273,319 $23,630
---------- -------
EXPENSES (Note 2)
Comprehensive fee.............................................................. 131,470 1,958
Distribution Assistance (Note 3)
Class A........................................................................ 0 0
Class B........................................................................ 0 0
Class C........................................................................ 23,228 0
---------- -------
Total Expenses............................................................... 154,698 1,958
Less: voluntary waiver......................................................... (27,465) --
---------- -------
Net Expenses................................................................... 127,233 1,958
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NET INVESTMENT INCOME............................................................ $ 1,146,086 $21,672
========== =======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
RESERVE INSTITUTIONAL TRUST--STATEMENTS OF CHANGES IN NET ASSETS--(UNAUDITED)
<TABLE>
<CAPTION>
U.S. GOVERNMENT
INSTITUTIONAL
-----------------
SEPTEMBER 15,
1997
PRIMARY INSTITUTIONAL (COMMENCEMENT OF
--------------------------------- OPERATIONS)
SIX MONTHS ENDED YEAR ENDED THROUGH
NOVEMBER 30, 1997 MAY 31, 1997 NOVEMBER 30, 1997
----------------- ------------ -----------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT
OPERATIONS:
Net investment income paid to shareholder as dividends
(Note 1).............................................. $ (1,146,086) $ (35,795) $ (21,672)
------------ ---------- ----------
FROM CAPITAL SHARE TRANSACTIONS (at net asset value of $1
per share):
Net proceeds from the sale of shares.................... 341,487,824 2,876,422 3,885,379
Net asset value of shares issued on reinvestment of
dividends............................................. 1,146,086 35,795 21,672
------------ ---------- ----------
Subtotal.............................................. 342,633,910 2,912,217 3,907,051
Cost of shares redeemed............................... (138,018,252) (904,580) (1,797,928)
------------ ---------- ----------
Net increase from capital share transactions............ 204,615,658 2,007,637 2,109,123
NET ASSETS:
Beginning of period..................................... 2,007,637 0 0
------------ ---------- ----------
End of period........................................... $ 206,623,295 $2,007,637 $ 2,109,123
============ ========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 5
RESERVE INSTITUTIONAL TRUST
PRIMARY AND U.S. GOVERNMENT INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES:
------------------------------
The Primary and the U.S. Government Institutional Fund, a series of Reserve
Institutional Trust, (the "Fund") is registered under the Investment Company
Act of 1940 as a non-diversified, open-end investment company. The policies
summarized below are consistently followed in the preparation of its
financial statements in conformity with generally accepted accounting
principles.
A. The Fund's authorized shares of beneficial interest are unlimited and
divided into four series with four classes of shares, Primary Institutional,
U.S. Government Institutional, U.S. Treasury Institutional and Interstate
Tax-Exempt Institutional Funds. These financial statements and notes apply
only to Primary Institutional Fund -- Classes A, B and C and U.S. Government
Institutional Fund -- Class B.
B. Securities are stated at value which represents amortized cost plus
interest accrued to date. Under Securities and Exchange Commission Rule 2a-7,
the Fund uses amortized cost to value the portfolio, by which investments are
valued at cost and the difference between the cost of each instrument and its
value at maturity is accrued into income on a straight line basis over the
days to maturity irrespective of intervening changes in interest rates or
market value of investments. The maturity of floating or variable rate
instruments in which the Fund may invest will be deemed to be, for floating
rate instruments (1) following, and for variable rate instruments the longer
of (1) or (2) following: (1) the notice period required before the Fund is
entitled to receive payment of the principal amount of the instrument; (2)
the period remaining until the instrument's next rate adjustment, for
purposes of Rule 2a-7 and for computing the portfolio's average weighted life
to maturity.
C. It is the Fund's policy to comply with Subchapter M of the Internal
Revenue Code and to distribute all of its taxable income to its shareholders.
Accordingly, no Federal income tax provision is required.
D. Investments are recorded as of the date of their purchase and sale.
Interest income is determined on the basis of interest accrued, premium
amortized and discount accreted.
E. Net investment income on investments is distributed to shareholders daily
and automatically reinvested in additional Fund shares.
2. MANAGEMENT FEE, SHAREHOLDER SERVICING COST AND TRANSACTIONS WITH AFFILIATES:
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Under the Management Agreement, Reserve Management Company, Inc. ("RMCI"),
manages the Fund's investments, effects purchases and sales thereof. RMCI
receives a comprehensive fee from the Funds at an annual rate of .25% Class
A, .45% Class B (as amended February 3, 1997) and .75% Class C of the average
daily net assets of each of the Funds. At November 30, 1997, RMCI waived a
portion of its comprehensive fee. For the six months ended November 30, 1997,
the Primary and U.S. Government Institutional Funds had accrued expenses due
to RMCI of $9,334 and $78, respectively.
3. DISTRIBUTION ASSISTANCE:
-----------------------
Pursuant to a Plan of Distribution under Rule 12b-1, subject to the Fund's
expense limitations, Class C shares will make payments of up to .20% per
annum of the average net asset value of shareholder accounts as to which the
payee has rendered assistance in distributing shares of the portfolio.
4. MANAGEMENT'S 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 dates of
the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those
estimates.
5
<PAGE> 6
RESERVE INSTITUTIONAL TRUST
PRIMARY AND U.S. GOVERNMENT INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)--(CONTINUED)
5. CAPITAL SHARE TRANSACTIONS:
---------------------------
Transactions in capital stock of each Fund for the period ended November 30,
1997, were as follows:
<TABLE>
<CAPTION>
PRIMARY INSTITUTIONAL FUND CLASS A CLASS B CLASS C
- ------------------------------------------------------------------ ----------- ----------- -------------
<S> <C> <C> <C>
Sold.............................................................. 18,017,867 28,156,858 295,313,099
Reinvest.......................................................... 67,542 162,848 915,696
Redeemed.......................................................... (527,449) (2,225,681) (135,265,122)
----------- ----------- ------------
Net Increase...................................................... $17,557,960 $26,094,025 $ 160,963,673
=========== =========== ============
U.S. GOVERNMENT INSTITUTIONAL FUND CLASS B
- ------------------------------------------------------------------ -----------
Sold.............................................................. 3,885,379
Reinvest.......................................................... 21,672
Redeemed.......................................................... (1,797,928)
-----------
Net Increase...................................................... $ 2,109,123
===========
</TABLE>
6. SUPPLEMENTARY INFORMATION (UNAUDITED) (FOR ONE SHARE OUTSTANDING DURING EACH
PERIOD):
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<TABLE>
<CAPTION>
CLASS A CLASS C
---------------- CLASS B ----------------
OCTOBER 23, 1997 ------------------------------------ OCTOBER 15, 1997
(COMMENCEMENT OF JANUARY 21, 1997 (COMMENCEMENT OF
OPERATIONS) TO (COMMENCEMENT OF OPERATIONS) TO
NOVEMBER 30, SIX MONTHS ENDED OPERATIONS) TO NOVEMBER 30,
1997 NOVEMBER 30, 1997 MAY 31, 1997 1997
---------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
PRIMARY INSTITUTIONAL FUND
- ---------------------
Net asset value, beginning of
period........................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
---------------- ----------------- ---------------- ----------------
Income from investment
operations....................... .0060 .0283 .0196 .0072
Expenses........................... .0003 .0023 .0017 .0007
---------------- ----------------- ---------------- ----------------
Net investment income(1)........... .0057 .0260 .0179 .0065
Dividends from net investment
income(1)........................ (.0057) (.0260) (.0179) (.0065)
---------------- ----------------- ---------------- ----------------
Net asset value, end of period..... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
================= ================ ================= =================
Total Return....................... 5.37%(2) 5.22%(2) 4.95%(2) 5.01%(2)
RATIOS/SUPPLEMENTAL DATA
- ---------------------
Net assets in thousands, end of
period........................... 11,152 28,102 2,008 160,964
Ratio of expenses to average net
assets........................... .25%(2) .45%(2) .48%(2)(3) .60%(2)(3)
Ratio of net investment income to
average net assets............... 5.36%(2) 5.15%(2) 5.18%(2) 4.98%(2)
</TABLE>
6
<PAGE> 7
RESERVE INSTITUTIONAL TRUST
PRIMARY AND U.S. GOVERNMENT INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)--(CONTINUED)
SUPPLEMENTARY INFORMATION (UNAUDITED) (FOR ONE SHARE OUTSTANDING DURING EACH
PERIOD):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B
-----------------
SEPTEMBER 15,
1997
(COMMENCEMENT OF
OPERATIONS) TO
NOVEMBER 30, 1997
-----------------
<S> <C>
U.S. GOVERNMENT INSTITUTIONAL FUND
- ----------------------------
Net asset value, beginning of period..................................................... $1.0000
--------
Income from investment operations........................................................ .0115
Expenses................................................................................. .0009
--------
Net investment income(1)................................................................. .0106
Dividends from net investment income(1).................................................. (.0106)
--------
Net asset value, end of period........................................................... $1.0000
=================
Total Return............................................................................. 5.01%(2)
RATIOS/SUPPLEMENTAL DATA
- ---------------------
Net assets in thousands, end of period................................................... 2,109
Ratio of expenses to average net assets.................................................. .45%(2)
Ratio of net investment income to average net assets..................................... 4.98%(2)
</TABLE>
- ---------------
(1) Based on compounding of daily dividends. Not indicative of future results.
(2) Annualized.
(3) During the period the manager waived a portion of its comprehensive fee of
the Primary Institutional Fund. If there were no reduction the actual fee
would have been .02% higher for Class B and .15% higher for Class C.
------------------------
FEDERAL TAX INFORMATION
The dividends distributed by the Primary and U.S. Government Institutional
Funds are treated for Federal tax purposes as ordinary income.
7
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