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Previous: FIDELITY CHARLES STREET TRUST, N-30D, 1996-05-21 |
Next: JMB INCOME PROPERTIES LTD IX, 10-Q/A, 1996-05-21 |
<PAGE> 1
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORTS (UNAUDITED) MARCH 31, 1996
COWEN STANDBY RESERVE
FUND, INC.
AND
COWEN STANDBY TAX - EXEMPT
RESERVE FUND, IN C.
[COWEN LOGO]
COWEN & COMPANY
- --------------------------------------------------------------------------------
<PAGE> 2
COWEN STANDBY RESERVE FUND, INC.
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
SEMI-ANNUAL UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 1996
Chairman's Letter............................................................. 1
Statements of Investments:
Cowen Standby Reserve Fund, Inc. ........................................... 3
Cowen Standby Tax-Exempt Reserve Fund, Inc. ................................ 7
Statements of Assets and Liabilities..........................................21
Statements of Operations......................................................22
Statements of Changes in Net Assets...........................................23
Notes to Combined Financial Statements........................................24
<PAGE> 3
CHAIRMAN'S LETTER MAY 7, 1996
Dear Shareholder:
We are pleased to report that through a continuing adherence to high standards
of portfolio quality and active market analysis, the managers of both the Cowen
Standby Reserve Fund and Cowen Standby Tax-Exempt Reserve Fund were able to use
shifts in interest rates over the last six months to the Funds' advantage and
produce competitive yields throughout the semi-annual period ended March 31,
1996. On March 29, 1996, the last business day of the period, the annualized
7-day yields provided by your Funds were 4.68% and 2.85%, respectively. We are
especially pleased to report that Cowen Standby Reserve grew to more than $1
billion in assets during this period.
Market Activity
As anticipated in our last report, short-term interest rates declined as the
Federal Reserve Board cut rates in December and January by 1/4 of 1% each time.
At that point, general market expectations were: 1) for the economy to be either
close to or in a recession; 2) to avoid a recession, the Fed would have to cut
short-term interest rates even further; and 3) with short-term rates below the
official discount rate of 5%, the market had already built in expectations for
additional Fed cuts.
In a turnaround in February, evidence unfolded of an economy no longer
slowing. When this data, including higher-than-anticipated employment growth and
consumer spending rates, was released interest rates not only stopped falling
but began to rise, as market participants re-evaluated economic fundamentals and
security valuations.
Shorter-term interest rates were affected most by this turnaround. For
example, 1-year Treasury bill rates had fallen by more than 1/2 of one
percentage point from the beginning of October 1995 through January 22, 1996,
when interest rates were trending lower. Toward the end of this four-month
period, the three-month Treasury Bill was yielding more than the 1-year Treasury
bill. This unusual occurrence -- when an investor can earn more for a
shorter-term period -- indicates a belief on the market's part that interest
rates are more likely to go down than up.
Subsequently, the interest rate picture took on a more traditional look.
During the two-month period from the end of January to the end of March,
shorter-term interest rates did go down. As a result, the yield on the
longer-term 1-year Treasury bill increased by 3/10 of one percentage point and
began to yield more than the three-month Treasury bill. Despite the recent
increase for the semi-annual period, 1-year Treasury bill rates declined by
about 1/4 of one percentage point.
Investment Review
To capture the higher incremental yields available in the last months of the
semi-annual period, the Cowen Standby Reserve Fund's maturity of 62 days on
January 29, 1996 was extended to a high of 84 days in the middle of March after
rates had risen. The average days stood at 79 at quarter-end 1996. Longer than
the IBC/Donoghue benchmark's maturity of 52 days, this strategy has enabled the
Fund to lock in higher yields for our shareholders.
Although the same economic factors were at work in the tax-exempt market,
special liquidity requirements related to the April 15th tax deadline encouraged
us to add yield to the Cowen Standby Tax-Exempt Reserve Fund's portfolio through
a different strategy. Namely, we shortened maturity from a period high of 72
days to 35 days on March 31 -- which was shorter than the benchmark -- and
bought more shorter-term securities to take advantage of current supply/demand
fundamentals. As often happens just before April 15th, issuers are forced to pay
higher yields on their shorter-term tax-exempt securities as demand lessens
since investors are generally making tax payments rather than adding to their
money market accounts. The Fund's portfolio
--
1
<PAGE> 4
continued to be composed 100% of investment grade municipal obligations
throughout the semi-annual period, and we broadened diversification further with
securities held from 39 states plus Washington, D.C. as of March 31.
Looking Ahead
Recent increases in commodity prices have generated concerns in the money
markets about rising inflation, but we believe these concerns to be unfounded.
In fact, for several reasons, we believe that the Federal Reserve Board's
monetary policy is on hold for the near term. First, short-term rates as set by
the Federal Reserve Board are at 5% today, and the last time the Fed entered a
period rising rates, they were at 3%. Second, economic growth, as measured by
the GDP, is expected to be about 2% for 1996, which is considered modest and
should not stimulate inflation. And finally, with global competitive forces at
work and changing consumer spending habits, we see signs that rising prices are
not widespread. The Employment Cost Index is growing at a 2.8% annual rate. So,
while the reported inflation rate as measured by the CPI may not decline
further, any increases should be contained.
In brief, we believe that short-term interest rates and the money markets may
be entering a period of relative stability. This should enable the Funds to
continue generating a consistent income stream and competitive rates of return.
Our strategy is to further our utilization of high quality securities and, when
opportunities for value present themselves, to extend the average days to
maturity in both Funds.
As always, we appreciate your ongoing support of the Cowen Standby Reserve
Funds and look forward to serving your investment needs well into the future
with competitive yields, liquidity and a high degree of safety.
Sincerely,
/s/ JOSEPH M. COHEN
Joseph M. Cohen
Chairman
--
2
<PAGE> 5
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
BANK NOTES - 1.17%
Nation Bank Corp.
$12,700,000 08-15-1996 4.75 % $ 12,679,707
------------
Total Bank Notes
(Cost $12,679,707) $ 12,679,707
------------
COMMERCIAL PAPER - 64.76%
ABN-AMRO NA Finance Inc.
$15,000,000 04-25-1996 5.49 % $ 14,942,475
Abbey National N.A.
5,000,000 08-08-1996 5.24 4,908,664
9,280,000 08-09-1996 5.24 9,109,186
American Brands Inc.
20,000,000 10-08-1996 5.51 19,440,000
American Home Products
25,000,000 04-08-1996 5.40 24,966,938
BMW U.S. Capital Corp.
10,300,000 04-04-1996 5.55 10,292,203
BTR Dunlop Finance Inc.
11,000,000 04-10-1996 5.29 10,982,657
Bankers Trust
15,000,000 06-04-1996 5.64 14,851,500
Bankers Trust-Australia
20,000,000 06-04-1996 5.47 19,806,767
Ciesco
40,000,000 05-10-1996 5.20 39,769,944
Commerzbank U.S. Finance Inc.
20,000,000 04-09-1996 5.52 19,970,278
Copley Financing
39,050,000 04-08-1996 5.33 38,999,040
Countrywide Funding Corp.
30,000,000 04-22-1996 5.49 29,897,075
Daimler-Benz N.A. Corp.
10,000,000 06-07-1996 5.26 9,902,058
Fleet Funding Corp.
25,000,000 04-08-1996 5.33 24,967,375
</TABLE>
See notes to combined financial statements
--
3
<PAGE> 6
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
COMMERCIAL PAPER - (CONTINUED)
Ford Motor Credit
$20,000,000 04-02-1996 5.58 % $ 19,990,867
25,000,000 05-03-1996 5.43 24,876,514
Hanson Finance U.K.
30,000,000 04-10-1996 5.51 29,950,958
Met Life Funding Inc.
27,418,000 05-03-1996 5.28 27,284,642
New Zealand, Government of
50,000,000 04-01-1996 5.54 49,984,861
Penny (J.C.) Financial Corp.
30,000,000 04-12-1996 5.25 29,944,533
Pepsico Inc.
14,000,000 09-03-1996 5.59 13,677,505
Phillip Morris
25,000,000 04-02-1996 5.35 24,989,063
Renault Acceptance B.V.
17,000,000 04-12-1996 5.58 16,966,789
Riverwood Funding Corp.
24,000,000 05-17-1996 5.18 23,839,040
Sharp Electronics
20,000,000 06-04-1996 5.14 19,809,483
Svenska Handelsbanken
15,000,000 04-02-1996 5.60 14,993,213
15,000,000 04-02-1996 5.61 14,852,325
Sweden, Kingdom of
25,000,000 08-16-1996 5.28 24,513,500
25,000,000 08-16-1996 5.27 24,514,465
Union Bank of Switzerland
50,000,000 04-01-1996 5.54 49,984,860
------------
Total Commercial Paper
(Cost $702,978,778) $702,978,778
------------
</TABLE>
See notes to combined financial statements
--
4
<PAGE> 7
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
EURO-DOLLAR DEPOSIT - 2.76%
Banque National de Paris
$30,000,000 05-07-1996 5.15% $ 29,999,931
------------
Total Euro-Dollar Deposit
(Cost $29,999,931) $ 29,999,931
------------
FLOATING RATE NOTES - 10.32%
Bear Stearns
$20,000,000 08-28-1996 5.46016% (b) $ 20,000,000
20,000,000 11-04-1996 5.31250 (c) 20,000,000
Centurion Bank
22,000,000 11-12-1996 5.2825 (b) 22,000,000
First National Bank of Maryland
25,000,000 10-23-1996 5.6870 (c) 25,000,000
J.P. Morgan Delaware Inc.
25,000,000 04-08-1996 5.39 (a) 24,999,644
------------
Total Floating Rate Note
(Cost $111,999,644) $111,999,644
------------
REPURCHASE AGREEMENT - 4.61%
$50,000,000 Daiwa Securities
Entered into 03-29-1995,
maturity 04-02-1996
(Collateralized by $35,205,000
U.S. Treasury Notes,
12%, 08-15-2013, market value
$51,502,304) 5.40% $ 50,000,000
------------
Total Repurchase Agreement
(Cost $50,000,000) $ 50,000,000
------------
YANKEE CERTIFICATES OF DEPOSIT - 14.46%
Canadian Imperial Bank of Commerce
$30,000,000 10-09-1996 5.50% $ 30,000,000
Commerzbank U.S. Finance
20,000,000 01-21-1997 5.14 19,998,774
Creditanslalt-Bankverein
30,000,000 03-19-1997 5.70 30,000,000
</TABLE>
See notes to combined financial statements
--
5
<PAGE> 8
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
Dresdner Bank (NY)
$25,000,000 11-22-1996 5.13 % $ 25,000,657
Deutsche Bank
22,000,000 08-01-1996 5.10 22,000,739
30,000,000 03-19-1997 5.70 30,000,000
--------------
Total Yankee Certificates of Deposit
(Cost $157,000,170) $ 157,000,170
--------------
U.S. TREASURY BILL - 1.75%
U.S. Treasury Bill
$20,000,000 03-06-1997 5.07 % $ 19,039,516
--------------
Total U.S. Treasury Bill
(Cost $19,039,517) $ 19,039,516
--------------
TOTAL INVESTMENTS
(Cost $1,083,697,746)......... 99.83% $1,083,697,746
Cash and Receivables,
Less Payables (net)........... 0.17% 1,819,450
------ -------------
Net Assets.................... 100.00% $1,085,517,196
====== =============
</TABLE>
Notes:
(a) -- Variable rate instruments reflect rate as of 03/29/1996
(b) -- 1 Month Libor rate instruments reflect rate as of 03/29/1996
(c) -- 3 Month Libor rate instruments reflect rate as of 03/29/1996
See notes to combined financial statements
--
6
<PAGE> 9
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,800,000 Adams County, CO, Industrial Development
Authority
Revenue Notes--City View Park Project
(7-Day Put, 7-Day Change)
12-01-2015 3.40% # $1,800,000
500,000 Alabama Special Care Facility
Montgomery Hospital Floating Rate Demand Note
Series 1985
(7-Day Put, 7-Day Change)
04-01-2005 3.30 # 500,000
2,295,000 Alaska State Industrial Development Authority
Lot 6
(7-Day Put, 7-Day Change)
07-01-2001 3.45 # 2,295,000
2,000,000 Alaska State Housing Financing Corporation
Series A, Floating Rate Demand Note
(7-Day Put, 7-Day Change)
06-01-2026 3.40 # 2,000,000
1,000,000 Alaska State Housing Financing Corporation
Series C, Floating Rate Demand Note
(7-Day Put, 7-Day Change)
06-01-2026 3.40 # 1,000,000
1,000,000 Allegheny County, PA, Hospital Development
Health Center, Presbyterian University Series D
(Daily Put, 7-Day Change)
03-01-2020 3.45 # 1,000,000
1,000,000 Allegheny County, PA, Hospital Development
Authority Health Revenue Bonds, (Harmarville
Rehabilitation Center Project) Series 1994
(7-Day Put, 7-Day Change)
07-01-2007 3.35 # 1,000,000
</TABLE>
See notes to combined financial statements
--
7
<PAGE> 10
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 Alma, WI Pollution Control Revenue Bonds
Dairyland Power Co-Op Project
(7-Day Put, Monthly Change)
02-01-2015 3.65% # $2,000,000
1,200,000 Arizona Health Facilities Authority Revenue
Bonds
(7-Day Put, 7-Day Change)
10-01-2015 3.40 # 1,200,000
700,000 Arizona State Transportation Board
Highway Revenue Bonds
(Pre-refunded to 07-01-1996 @ 102)
07-01-2001 3.95 720,830
1,300,000 City of Asheville, NC, Certificates of
Participation, Series 1993A
(7-Day Put, 7-Day Change)
07-01-2003 3.30 # 1,300,000
3,000,000 Baltimore County, MD Consolidated General
Obligation
04-03-1996 3.35 3,000,000
2,000,000 Baltimore County, MD General Obligation Note
Metropolitan District
04-03-1996 3.15 2,000,000
1,750,000 City of Belleville, IL, Industrial Development
Revenue Refunding Bonds, (Wetterau Inc.
Project), Series 1991
(7-Day Put, 7-Day Change)
12-01-2008 3.45 # 1,750,000
1,100,000 Billings, MT Industrial Development Revenue Note
Adjustable Tender CFS
(7-Day Put, 7-Day Change)
12-01-2014 3.40 # 1,100,000
480,000 Brewster, MA General Obligation Unlimited Note
11-15-1996 3.78 489,443
</TABLE>
See notes to combined financial statements
--
8
<PAGE> 11
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
--------- -------------
<C> <S> <C> <C>
$2,000,000 Burke County, GA, Development Authority
Pollution Control Revenue Bonds--Oglethorpe
Project
Georgia Power Company
(Mandatory Put 05-21-1996)
01-01-2025 3.25% $2,000,000
1,000,000 Burke County, GA, Development Authority
Pollution Control Revenue Bonds--Oglethorpe
Project
Georgia Power Company
(Mandatory Put 05-08-1996)
01-01-2025 3.20 1,000,000
500,000 Burke County, GA, Development Authority
Pollution Control Revenue Bonds--Oglethorpe
Project
Georgia Power Company
(Mandatory Put 06-13-1996)
01-01-2025 3.15 500,000
1,400,000 Burke County, GA, Development Authority
Pollution Control Revenue Bonds--Vogtle 5th
Project
Georgia Power Company
(Daily Put, Daily Change)
07-01-2024 3.70 # 1,400,000
1,700,000 Burlington County, KS Pollution Control Revenue
Bonds
Kansas City Power & Light Project A
(Mandatory Put 05-16-1996)
09-01-2015 3.30 1,700,000
1,800,000 California State Revenue Anticipation Notes
Series C FGIC-TCRS
04-25-1996 3.30 1,803,000
1,100,000 Clark County, NV Airport Improvement Revenue
Bond Series A-1
(7-Day Put, 7-Day Change)
07-01-2025 3.30 # 1,100,000
</TABLE>
See notes to combined financial statements
--
9
<PAGE> 12
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$3,805,000 Clayton County, GA, Housing Finance Authority
(7-Day Put, 7-Day Change)
01-01-2021 3.35% # $3,805,000
1,000,000 Columbia, AL Industrial Development Board,
Pollution Control Revenue Bond Alabama Power
Company Nuclear Project Series D
(Daily Put, Daily Change)
10-01-2022 3.80 # 1,000,000
1,000,000 Columbus, OH, General Obligation Bond
05-01-1996 3.60 1,002,895
5,000,000 State of Connecticut, Special Assessment
Unemployment Compensation Advance Fund
Revenue Bonds, (Connecticut Unemployment Revenue
Bonds) 1993 Series C
07-01-1996 3.90 5,000,000
1,990,000 Dade County, FL Housing Finance Authority
Waterside Project Series 2
(7-Day Put, 7-Day Change)
08-01-2005 3.60 # 1,990,000
1,200,000 Dade County, FL Health Facilities Authority
Miami Children's Hospital Project
(Daily Put, Daily Change)
09-01-2020 3.85 # 1,200,000
800,000 De Kalb Private Hospital Authority, Georgia,
(Egleston Children's Hospital at Emory
University, Inc. Project) Revenue Anticipation
Certificates Series 1994A
(7-Day Put, 7-Day Change)
07-01-2023 3.30 # 800,000
1,100,000 Delaware County, PA Industrial Development
Authority Airport Facilities, United Parcel
Service Project
(Daily Put, Daily Change)
12-01-2015 3.80 # 1,100,000
</TABLE>
See notes to combined financial statements
--
10
<PAGE> 13
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
--------- -------------
<C> <S> <C> <C>
$1,095,000 District of Columbia, Revenue Bonds, (The
American University Issue), Series 1986A
(7-Day Put, 7-Day Change)
12-01-2015 3.40% # $1,095,000
1,000,000 District of Columbia, Revenue Bonds,
Reference Series B
(Pre-refunded to 06-01-1996 @ 102)
06-01-2004 3.85 1,026,393
2,000,000 Durham, NC Certificates of Participation--Series
A
(7-Day Put, 7-Day Change)
07-01-2007) 3.30 # 2,000,000
3,200,000 Florida Housing Finance Agency--Reference
Multi-Family Hillsboro, Series D
(7-Day Put, 7-Day Change)
12-01-2009 3.70 # 3,200,000
2,000,000 Golden Valley, MN, Industrial Development
Authority (Unicare Homes)
(7-Day Put, 7-Day Change)
09-01-2014 3.70 # 2,000,000
1,300,000 Hapeville, GA Industrial Development Authority
Hapeville Hotel Project
(Daily Put, Daily Change)
11-15-2015 3.85 # 1,300,000
2,400,000 Harris County, TX Health Facilities
School Health Care Project
(Mandatory Put 04-09-1996)
01-01-2015 3.30 2,400,000
500,000 Henrico County, VA Industrial Development
Authority Health Facilities--Hermitage Project
(Daily Put, Daily Change)
05-01-2024 3.85 # 500,000
2,000,000 Houston, TX Water & Sewer Revenue Bonds Series A
04-10-1996 3.30 2,000,000
</TABLE>
See notes to combined financial statements
--
11
<PAGE> 14
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
--------- -------------
<S> <C> <C> <C>
$300,000 Illinois Health Facility Authority Hospital
Revenue Bonds, (Sisters of Charity Project),
Series E
(7-Day Put, 7-Day Change)
12-01-2015 3.30% # $ 300,000
1,500,000 Illinois State Toll Highway Authority
Highway Priority Revenue Bonds, Series B
(7-Day Put, 7-Day Change)
01-01-2010 3.30 # 1,500,000
500,000 Illinois State General Obligation Bonds
(Pre-refunded to 06-01-1996 @ 102)
06-01-1996 3.95 512,733
2,000,000 City of Indianapolis, IN, Multi-Family Housing
Revenue Refunding Bonds, (Canal Square Project)
(7-Day Put, 7-Day Change)
12-01-2015 3.30 # 2,000,000
1,000,000 Intermountain Power Agency Utah, Special
Obligation Second Series
07-01-1996 4.00 1,007,386
700,000 Joliet, IL Regional Port District Industrial
Building Revenue Notes, Dow Chemical Project
(Daily Put, Daily Change)
07-15-2003 3.85 700,000
1,600,000 Lincoln County, WY Pollution Control Revenue
Bonds Exxon Project Series B
(Daily Put, Daily Change)
11-01-2014 3.80 # 1,600,000
400,000 Lone Star, TX Airports Improvement Authority
American Airlines Project B-1
(Daily Put, Daily Change)
12-01-2014 3.80 # 400,000
500,000 Los Angeles County, CA Van Nuys Courthouse
Project
(Pre-Refunded to 06-01-1996 @ 102)
06-01-2015 3.78 514,340
</TABLE>
See notes to combined financial statements
--
12
<PAGE> 15
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
--------- -------------
<C> <S> <C> <C>
$200,000 Loudoun County, VA, Industrial Development
Agency
(Daily Put, Daily Change)
09-01-2015 3.85% # $ 200,000
500,000 Louisa, VA Industrial Development Corporation
Virginia Electric and Power Project
(Mandatory Put 10-05-1996)
12-01-2015 3.30 500,000
495,000 Louisiana Public Facilities Authority Revenue
Bonds--College & University Equipment and
Capital
Series A
(7-Day Put, 7-Day Change)
09-01-2020 3.35 # 495,000
1,000,000 Louisiana Public Facilities Authority, Hospital
Revenue
CP Program
(7-Day Put, 7-Day Change)
12-01-2000 3.35 # 1,000,000
4,200,000 Louisiana Public Facilities Authority
Multi Family Housing Revenue Bonds,
(Willis Knighton Medical Center Project)
Series 1988
(7-Day Put, 7-Day Change)
09-01-2023 3.50 # 4,200,000
200,000 Lynchburgh, VA, Industrial Development Authority
Hospital Revenue Bonds, (VHA Mid-Atlantic
States, Inc. Capital Asset Financing Project),
Series 1985D
(7-Day Put, 7-Day Change)
12-01-2025 3.30 # 200,000
2,000,000 Maine Municipal Bond Bank Note
Series B
(Pre-refunded to 11-01-1996 @ 102)
11-01-2005 3.85 2,070,913
</TABLE>
See notes to combined financial statements
--
13
<PAGE> 16
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 Maricopa County, AZ, Pollution Control Revenue
Bonds Southern California Edison Series G
(Mandatory Put 05-23-1996)
12-01-2009 3.20% $2,000,000
2,500,000 Maryland State Health and Higher Education
Facilities Authority Revenue Notes
(7-Day Put, 7-Day Change)
04-01-2035 3.40 # 2,500,000
600,000 Massachusetts State Health and Education
Authority Capital Asset Program Issue Series D
(Daily Put, Daily Change)
01-01-2035 3.75 # 600,000
1,510,000 Maui County, HI General Obligation Unlimited
Series A
(Pre-refunded to 10-01-1996 @ 101.5)
10-01-2005 3.30 1,560,953
200,000 Metropolitan Nashville, TN Airport Authority
Special Facilities, American Airlines Project
Series A
(Daily Put, Daily Change)
10-01-2012 3.80 # 200,000
2,000,000 Metropolitan Government of Nashville & Davidson
County, TN General Obligation Note
(Pre-refunded to 06-15-1996 @ 102)
06-15-2000 3.30 2,056,091
1,200,000 Michigan State Underground Storage Tank
Financial Assurance Authority Revenue, Series I
(7-Day Put, 7-Day Change)
12-01-2004 3.30 # 1,200,000
915,000 Michigan State Hospital Finance Authority
Revenue Bonds, Hospital Equipment Loan Program
(7-Day Put, 7-Day Change)
06-01-2001 3.30 # 915,000
</TABLE>
See notes to combined financial statements
--
14
<PAGE> 17
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,715,000 Mobile, AL General Obligation Unlimited Note
08-15-1996 3.83% $1,720,763
2,000,000 Municipal Electric Authority of Georgia, Revenue
Bonds
Series A
(Mandatory Put 05-14-1996)
01-01-2009 3.25 2,000,000
1,050,000 Nevada State Highway Improvement
Motor Vehicle Fuel Tax Bonds
04-01-1996 4.30 1,050,025
1,100,000 New Brighton, MN, Industrial Development
Authority
Revenue Bonds, Unicare Home Inc. Project
(7-Day Put, 7-Day Change)
12-01-2014 3.70 # 1,100,000
2,000,000 New Hampshire Higher Education
Facility Authority, Veterans Housing Authority
Revenue Bonds Series E
(7-Day Put, 7-Day Change)
12-01-2025 3.30 # 2,000,000
3,000,000 New Jersey Tax Revenue Anticipation Notes
04-01-1996 3.25 3,000,000
750,000 New Mexico Educational Assistance Foundation
Student Loan Revenue Series Two-A
12-01-1996 3.95 750,721
800,000 New Mexico State Hospital Equipment
Revenue Bonds
(7-Day Put, 7-Day Change)
05-01-2009 3.40 # 800,000
3,500,000 New Orleans, LA, Aviation Revenue
Bonds, Series 1993B
(7-Day Put, 7-Day Change)
08-01-2016 3.35 # 3,500,000
</TABLE>
See notes to combined financial statements
--
15
<PAGE> 18
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$3,500,000 New York, NY Revenue Anticipation Note
Series B
06-28-1996 3.97% $3,510,034
1,000,000 New York, NY Revenue Anticipation Note
Series B, Subseries B3
(Daily Put, Daily Change)
08-15-2004 3.80 # 1,000,000
1,000,000 New York, NY General Obligation
Series B Subseries B4
(Daily Put, Daily Change)
08-15-2021 3.25 # 1,000,000
500,000 New York, NY Revenue Anticipation Note
Series B
(Daily Put, Daily Change)
10-21-2021 3.25 # 500,000
500,000 New York, NY Revenue Anticipation Note
Series B
(Daily Put, Daily Change)
10-01-2022 3.25 # 500,000
1,000,000 New York, NY Municipal Water Finance Authority
Water and Sewer Systems Revenue Note Series A
(Daily Put, Daily Change)
06-15-2025 3.25 # 1,000,000
2,000,000 Ocean County, NJ, General Obligation Unlimited
Notes
06-28-1996 3.65 2,001,657
1,000,000 Orange County, FL Health Facilities Authority
Pooled Hospital Loan Series 85
(Mandatory Put 05-07-1996)
12-01-2025 3.20 1,000,000
1,600,000 Orange County, FL Health Facilities Authority
Pooled Hospital Loan Series 85
(Mandatory Put 04-08-1996)
12-01-2025 3.30 1,600,000
</TABLE>
See notes to combined financial statements
--
16
<PAGE> 19
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 Pendleton County, KY Associated Kentucky
Counties Leasing Program
(Mandatory Put 04-22-1996)
03-01-2019 3.15% $2,000,000
2,000,000 Pendleton County, KY Associated Kentucky
Counties Leasing Program
(Mandatory Put 05-14-1996)
03-01-2019 3.30 2,000,000
1,000,000 Pennsylvania State University Revenue Bonds
(Pre-refunded to 09-01-1996 @ 100)
09-01-1996 3.15 1,013,958
1,000,000 Person County, NC Industrial Facilities and
Pollution Control Finance Authority
Revenue-Carolina Power and
Light Project Series A
(7-day Put, 7-day Change)
11-01-2019 3.50 # 1,000,000
2,000,000 Pinellas County, FL Educational Facilities
Revenue Pooled Improvement-Higher Education
(Mandatory Put 05-07-1996)
12-01-2025 3.20 2,000,000
1,000,000 Pinellas County, FL Educational Facilities
Revenue Pooled Improvement-Higher Education
(Mandatory Put 04-08-1996)
12-01-2025 3.30 1,000,000
300,000 Platte County, WY Pollution Control Revenue Bond
Tri-State G & T Series A
(Daily Put, Daily Change)
07-01-2014 3.85 # 300,000
2,000,000 Port Kalama, WA Public Corporation Port
Conagra Inc. Project
(7-Day Put, 7-Day Change)
01-01-2004 3.25 # 2,000,000
</TABLE>
See notes to combined financial statements
--
17
<PAGE> 20
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$3,100,000 Regional Transportation District, CO Special
Passenger Fare, Series A
(7-Day Put, 7-Day Change)
06-01-1999 3.30% # $3,100,000
2,000,000 Rhode Island Tax Anticipation Notes
General Obligation Unlimited Bonds
06-28-1996 3.65 2,004,034
1,200,000 Robbinsdale, MN Industrial Development Authority
Unicare Homes, Inc. Project
(7-Day Put, 7-Day Change)
10-01-2014 3.70 # 1,200,000
3,000,000 Rockport, IN, Pollution Control Revenue Notes
Indiana-Michigan Power Company-Project B
(7-Day Put, 7-Day Change)
06-01-2025 3.20 # 3,000,000
1,000,000 Saint Claire County, AL, Industrial
Development Revenue Bonds (National
Cement Company, Inc. Project)
(7-Day Put, 7-Day Change)
03-01-2005 3.40 # 1,000,000
2,000,000 San Francisco, CA Combined School District Tax
Revenue Anticipation Notes
07-25-1996 3.90 2,003,686
500,000 Seattle, WA Municipal Light and Power Authority
Refunding Bonds
(Pre-refunded to 10-01-1996 @ 102)
10-01-2000 3.90 517,167
500,000 Seattle, WA Water System Revenue Bonds
(7-Day Put, 7-Day Change)
09-01-2025 3.30 # 500,000
</TABLE>
See notes to combined financial statements
--
18
<PAGE> 21
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD
ON DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
------- -------------
<S> <C> <C> <C>
$2,800,000 Port of Seattle, Washington, General
Obligation Bonds
(7-Day Put, 7-Day Change)
01-01-2005 3.30% # $2,800,000
1,000,000 City of Sheridan, AR, Industrial Development
Revenue Bonds, (H.H. Robertson Co. Project),
Series 1988A
(7-Day Put, 7-Day Change)
08-01-1998 3.45 # 1,000,000
50,000 South Carolina Jobs Economic Development
Authority, Industrial Development Revenue
Bonds, Series 1987A
(Daily Put, 7-Day Change)
11-01-2007 3.50 # 50,000
1,220,000 Southern California Public Power Authority
Southern Transmission Project
(Pre-refunded to 07-01-1996 @ 103)
07-01-2018 3.95 1,268,038
1,205,000 St. Louis, MO, Industrial Development
Authority Multi-Family Housing (Cedar Run
Apts. Project)
(7-Day Put, 7-Day Change)
02-01-2007 3.60 # 1,205,000
1,000,000 Sweetwater County, WY, Pollution Control
Revenue Bonds, Pacificorp Project B
(Daily Put, Daily Change)
01-01-2014 3.75 # 1,000,000
950,000 Texas Higher Education Authority, Inc. Series B
(7-Day Put, 7-Day Change)
12-01-2025 3.35 # 950,000
1,000,000 Texas Hospital Equipment Financing Authority
Revenue Bonds
(7-Day Put, 7-Day Change)
04-07-2005 3.65 # 1,000,000
</TABLE>
See notes to combined financial statements
--
19
<PAGE> 22
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD
ON DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
------- -------------
<C> <S> <C> <C>
$2,200,000 Texas Public Finance Authority General
Obligation Notes Series 1993A
(Mandatory Put 07-18-1996)
07-18-1996 3.20% $2,200,000
500,000 United Nations Development Corporation, Public
Benefit Corp. Phase 2 and 3
(Pre-refunded to 07-01-1996 @ 102)
07-01-2026 3.95 514,737
500,000 Virginia Beach, VA Improvement note
(Pre-refunded to 05-01-1996 @ 102)
05-01-1998 3.80 511,209
1,000,000 Wake County, NC, Industrial Facility Pollution
Control Finance Authority, Revenue Bonds,
(Carolina Power & Light Co. Project)
Series 1985 A
(7-Day Put, 7-Day Change)
05-01-2015 3.30 # 1,000,000
635,000 Washington State Higher Educational Facilities
Authority Revenue Bonds, Seattle University
Project
(Pre-refunded to 11-01-1996 @ 100)
11-01-1996 3.85 644,462
500,000 Wisconsin State Clean Water Revenue Bonds
Series 1
06-01-1996 3.75 501,713
580,000 Wisconsin State Health and Education Authority
Medical College of Wisconsin, Inc. Project D
(Pre-refunded to 12-01-1996 @ 100)
12-01-1996 3.83 589,723
TOTAL INVESTMENTS
(Cost $160,216,904)................... 99.04 % 160,216,904
Cash and receivables, less payables
(net)................................. 0.96 % 1,545,449
------ ------------
Net Assets............................ 100.00 % $161,762,353
====== ============
</TABLE>
- ---------------
Notes: #-Variable Rate Instruments Reflect Rate as of 03-31-1996
See notes to combined financial statements
--
20
<PAGE> 23
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
<S> <C> <C>
--------------- -------------
ASSETS
Investments in securities, at value - Note
A(1) $1,083,697,746 $160,216,904
Cash 980,648 540,752
Interest receivable 2,576,026 1,195,389
Prepaid expenses 30,028 5,567
--------------- -------------
TOTAL ASSETS 1,087,284,448 161,958,612
--------------- -------------
LIABILITIES
435,791 51,681
Due to investment manager - Note B
216,303 43,393
Accrued expenses
Dividends payable 1,115,158 101,185
--------------- -------------
TOTAL LIABILITIES 1,767,252 196,259
--------------- -------------
NET ASSETS $1,085,517,196 $161,762,353
============== ============
Represented By:
Paid-in capital $1,087,282,159 $161,781,038
Accumulated net realized loss on investments (1,764,963) (18,685)
--------------- -------------
NET ASSETS AT VALUE, applicable to
1,087,282,159 outstanding shares of $.01 par
value Common Stock for SRF and 161,781,038
outstanding shares of $.001 par value Common
Stock for STE (2,000,000,000 and
1,000,000,000 shares authorized for SRF and
STE, respectively) $1,085,517,196 $161,762,353
============== ============
Offering and redemption price per share $ 1.00 $ 1.00
============== ============
</TABLE>
See notes to combined financial statements
--
21
<PAGE> 24
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
<S> <C> <C>
------------ -----------
INVESTMENT INCOME
Interest income $28,144,731 $2,557,513
------------ -----------
EXPENSES
Investment management fee - Note B 2,476,115 350,785
Shareholder servicing costs and custodian fee 796,851 75,469
Federal and State registration fees 43,245 19,977
Professional fees 28,737 22,138
Directors' fees and expenses - Note B 10,894 10,672
Prospectus and shareholders' reports 30,940 2,244
Miscellaneous 44,137 7,153
------------ -----------
Total Expenses 3,430,919 488,438
Less: Investment management fee
waived - Note B -- (70,157)
------------ -----------
Net Expenses 3,430,919 418,281
------------ -----------
Investment Income - net 24,713,812 2,139,232
Net realized gain on investments 77,106 --
------------ -----------
Net Increase in Net Assets Resulting From
Operations $24,790,918 $2,139,232
============ ===========
</TABLE>
See notes to combined financial statements
--
22
<PAGE> 25
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
--------------------------------- -------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
1996 1995 1996 1995
--------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATIONS
Investment
income - net $ 24,713,812 $ 40,478,146 $ 2,139,232 $ 3,933,193
Net realized gain on
investments 77,106 141,897 -- --
--------------- ------------- ------------- -------------
Net increase in net
assets resulting
from operations 24,790,918 40,620,043 2,139,232 3,933,193
DIVIDENDS TO
SHAREHOLDERS FROM
Investment
income - net (24,713,812) (40,478,146) (2,139,232) (3,933,193)
COMMON STOCK
TRANSACTIONS
(NET) - NOTE C 194,552,522 198,136,691 39,226,233 1,832,138
--------------- ------------- ------------- -------------
Total increase in net
assets 194,629,628 198,278,588 39,226,233 1,832,138
NET ASSETS
Beginning of period 890,887,568 692,608,980 122,536,120 120,703,982
--------------- ------------- ------------- -------------
End of period $1,085,517,196 $ 890,887,568 $161,762,353 $122,536,120
=============== ============= ============= =============
</TABLE>
See notes to combined financial statements
--
23
<PAGE> 26
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: General: Cowen Standby
Reserve Fund, Inc. (SRF) and Cowen Standby Tax-Exempt Reserve Fund, Inc. (STE)
are each separately registered under the Investment Company Act of 1940, as
amended ("Act"), as diversified, open-end management companies. Cowen & Company
("Cowen") serves as each company's Investment Manager and acts as the exclusive
distributor of each company's shares, which are sold without a sales charge. It
is each company's policy to maintain a continuous net asset value per share of
$1.00; each company has adopted certain investment portfolio valuation and
dividend and distribution policies to enable it to do so.
(1) Portfolio valuation: Each company values its investments at amortized
cost, which has been determined by the Board of Directors of each company to
represent the fair value of each company's investments.
(2) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
including amortization of premiums and discounts, is recorded on the accrual
basis. Cost of investments represents amortized cost.
(3) Dividends and distributions to shareholders: It is the policy of each
company to declare dividends from net investment income on each business day;
such dividends are paid through the business day preceding the next to last
Friday of the month except for December. In December, income dividends will be
paid through the last business day of the month. Distributions from net realized
capital gains, if any, are declared and paid annually after the end of the
fiscal year in which earned. To the extent that net realized capital gains can
be offset by capital loss carryovers, it is the policy of each company not to
distribute such gains.
(4) Federal income taxes: It is the policy of each company to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the provisions available to
certain investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income sufficient to relieve
it from all, or substantially all, Federal income taxes.
At March 31, 1996, the aggregate cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting purposes
(see the Statements of Investments).
At September 30, 1995, SRF and STE had unused capital loss carryovers of
approximately $1,842,000 and $19,000, respectively, available for Federal income
tax purposes to be applied against future securities profits, if any. If not
applied, the carryovers expire in fiscal 2000, 2001 and 2002.
NOTE B - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES: Fees
paid by each company to Cowen pursuant to the provisions of Investment
Management Agreements are payable monthly, based on an annual rate of .50 of 1%,
of the average daily value of that company's net assets. The Agreements further
provide that if the aggregate expenses of either company, exclusive of interest,
taxes, brokerage and, with the prior written consent of the necessary state
securities commissions, extraordinary expenses, exceed the expense limitation of
any state having jurisdiction over that company, Cowen will reimburse the
company for such excess. The only state expense limitation applicable currently
requires reimbursement of ex-
--
24
<PAGE> 27
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (continued)
(unaudited)
penses in any year that such expenses exceed 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets, and 1 1/2%
of average net assets in excess of $100 million, provided that in no event shall
the amount of expense reimbursement required be greater than the investment
advisory fee. There was no expense reimbursement required for either company for
the period ended March 31, 1996, however, Cowen has waived $70,157 of its
Investment Management Fee from STE during such period.
Directors who are not officers, directors, partners, stockholders or employees
of Cowen or its affiliates
receive from each company a fee of $3,000 per annum plus $500 per meeting
attended and reimbursement for travel and out-of-pocket expenses.
NOTE C - COMMON STOCK TRANSACTIONS: At March 31, 1996, there were 2 billion
shares of $.01 par value Common Stock for SRF and 1 billion shares of $.001 par
value Common Stock of STE authorized.
Transactions in Common Stock were all at $1.00 per share and are summarized as
follows (000's omitted):
<TABLE>
<CAPTION>
SRF
----------------------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1996 SEPTEMBER 30, 1995
<S> <C> <C>
------------------ ------------------
Shares sold $2,456,491 $3,546,994
Dividends reinvested 23,608 38,739
------------- -------------
2,480,099 3,585,733
Shares redeemed (2,285,546) (3,387,596)
------------- -------------
Net increase $ 194,553 $ 198,137
============= =============
</TABLE>
---------------------------------------------------------
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
STE
----------------------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1996 SEPTEMBER 30, 1995
<S> <C> <C>
Shares sold $373,338 $620,723
Dividends reinvested 2,050 3,765
----------- -----------
375,388 624,488
Shares redeemed (336,162) (622,656)
----------- -----------
Net increase $ 39,226 $ 1,832
=========== ===========
</TABLE>
--
25
<PAGE> 28
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (continued)
(unaudited)
NOTE D - FINANCIAL HIGHLIGHTS: Selected data for a share of Common Stock
outstanding throughout each year:
<TABLE>
<CAPTION>
SIX SRF
MONTHS -------------------------------------------------------------------
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, -------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
----------- ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.02 0.05 0.03 0.03 0.04 0.06
LESS DISTRIBUTIONS
Dividends from Net
Investment Income (0.02) (0.05) (0.03) (0.03) (0.04) (0.06)
------- ------- ------- ------- ------- -------
NET ASSET VALUE
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ========= ========= ========= =========
Total Return 5.05 %(1) 5.23 % 3.14 % 3.07 % 4.16 % 6.33 %
RATIOS/SUPPLEMENTAL DATA
Net Assets (000 omitted) $1,085,517 $890,888 $692,609 $682,379 $667,366 $605,212
Ratio of Expenses to Average
Net Assets 0.69 %(1) 0.71 % 0.64 % 0.68 % 0.70 % 0.71 %
Ratio of Net Investment
Income to Average Net
Assets 4.99 %(1) 5.13 % 3.11 % 3.00 % 4.06 % 6.15 %
</TABLE>
--
26
<PAGE> 29
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (continued)
(unaudited)
NOTE D - (continued)
<TABLE>
<CAPTION>
SIX STE
MONTHS -------------------------------------------------------------------
ENDED
MARCH YEAR ENDED SEPTEMBER 30,
31, -------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
------- ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.02 0.03 0.02 0.02 0.03 0.04
LESS DISTRIBUTIONS
Dividends from Net
Investment Income (0.02) (0.03) (0.02) (0.02) (0.03) (0.04)
------- ------- ------- ------- ------- -------
NET ASSET VALUE
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== ========= ========= ========= ========= =========
Total Return 3.06 %(1) 3.19 % 2.11 % 2.03 % 2.97 % 4.50 %
RATIOS/SUPPLEMENTAL DATA
Net Assets (000 omitted) $161,762 $122,536 $120,704 $116,618 $118,389 $107,838
Ratio of Expenses to Average
Net Assets 0.60 %(1) 0.61 % 0.58 % 0.62 % 0.61 % 0.60 %
Ratio of Net Investment
Income to Average Net
Assets 3.05 %(1) 3.14 % 2.03 % 1.99 % 2.87 % 4.37 %
INVESTMENT ADVISORY FEES
WAIVED
Amount $ 70,157 $124,784 $130,483 $119,582 $130,414 $105,431
Ratio to Average Net Assets 0.10 % 0.10 % 0.10 % 0.10 % 0.10 % 0.10 %
</TABLE>
- --------------
(1) Annualized
--
27
<PAGE> 30
COWEN STANDBY RESERVE FUND, INC.
AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
Financial Square
New York, NY 10005
DIRECTORS
Joseph M. Cohen, Chairman
James H. Carey
Dr. Peter P. Gil
Dr. Martin J. Gruber
Gerald P. Kaminsky
Creighton H. Peet
Burton J. Weiss
OFFICERS
Joseph M. Cohen, Chairman of the Board of Directors and Chief Executive Officer
David R. Sarns, President
Creighton H. Peet, Treasurer and Chief Financial Officer
Rodd M. Baxter, Secretary
Gerald P. Kaminsky, Senior Investment Officer
Alan E. Koepplin, Investment Officer
Gordon G. Ifill, Assistant Investment Officer
Irwood Schlackman, Controller
<TABLE>
<S> <C>
INVESTMENT ADVISER CUSTODIAN
& DISTRIBUTOR & TRANSFER AGENT
Cowen & Company Investors Fiduciary Trust Company
Financial Square P.O. Box 419111
New York, NY 10005 Kansas City, MO 64141
LEGAL COUNSEL INDEPENDENT AUDITORS
Willkie Farr & Gallagher Ernst & Young LLP
One Citicorp Center 787 Seventh Avenue
153 East 53rd Street New York, NY 10019
New York, NY 10022
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CMB-RSRV-SEMI
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