<PAGE> 1
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORTS (UNAUDITED) MARCH 31, 1997
COWEN STANDBY RESERVE
FUND, INC.
AND
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC.
(COWEN LOGO)
COWEN & COMPANY
- --------------------------------------------------------------------------------
<PAGE> 2
COWEN STANDBY RESERVE FUND, INC.
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
SEMI-ANNUAL FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
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..........................................22
Statements of Operations......................................................23
Statements of Changes in Net Assets...........................................24
Notes to Combined Financial Statements........................................25
<PAGE> 3
CHAIRMAN'S LETTER MAY 12, 1997
Dear Shareholder:
We are pleased to report that the high portfolio quality and flexibility
shared by the Cowen Standby Reserve Fund and the Cowen Standby Tax-Exempt
Reserve Fund led to competitive yields throughout the semi-annual period ended
March 31, 1997. On that date, the annualized 7-day yields provided by your Funds
were 4.92% and 2.91%, respectively.
MARKET ACTIVITY
In general, the market in the last six months has been dominated by beliefs
that the Federal Reserve Board would raise interest rates. As anticipated in our
last shareholder report at the end of September 1996, we did not believe that
the Federal Reserve Board would have to take action prior to the first calendar
quarter given the slow but steady growth of the economy and benign inflation.
During this period, investors were preoccupied with whether the Fed would
tighten policy in December. Short-term interest rates rose in anticipation of
such a move, but the official rate hike did not happen. By January 1997,
favorable inflation news continued and seemed to lessen concerns of an interest
rate increase. But then indicators, both economic and otherwise, changed quickly
in February.
Specifically, the Consumer Price Index and the National Association of
Purchasing Management Index, which measures corporate spending, were higher than
anticipated in February. Perhaps more dramatically, Federal Reserve Board
Chairman Alan Greenspan's "preemptive strike" comment served clearly to indicate
to the markets that the Fed could raise rates even without the presence of
inflation and would do so as a preventive measure. On March 25th the Fed did
increase the Federal Funds rate -- the rate banks charge each other for
overnight loans -- by 0.25% to 5.50%, the first move it had made since January
31, 1996.
INVESTMENT REVIEW
Given the modest growth of the economy and our belief that the Federal Reserve
Board would not take action for a while, we kept the Cowen Standby Reserve
Fund's maturity longer than the average money market fund. This allowed us to
take advantage of short-term pressures in the marketplace and lock in the higher
yields available. Then, as a move by the Federal Reserve Board seemed imminent,
we shortened the Fund's average maturity prior to the March 25th meeting. As of
March 31, 1997, the Fund's average maturity was 60 days, which is in line with
the benchmark.
We maintained a similar strategy for the Cowen Standby Tax-Exempt Reserve Fund
for most of the semi-annual period. However, we shortened this Fund's maturity
to a neutral position early in March due to both anticipated investor
withdrawals for taxes and the pending interest rate increases. Having extended
to a high of 64 days in mid-November, the Fund's average maturity on March 31,
1997 was 42 days. The portfolio also continued to be broadly diversified with
securities representing 40 states and the District of Columbia.
LOOKING AHEAD
Although the Federal Reserve Board has increased rates modestly once, we are
not yet convinced that the threat of inflation is behind us. In fact, we have
been seeing some rather strong economic growth indicators,
1
<PAGE> 4
including low unemployment and increasing average hourly wages. If this scenario
persists, we believe that the Federal Reserve Board will be likely to raise
rates again.
Given this outlook, we intend to stay defensively positioned and will await
the opportunity to extend average maturity until the time when we believe
interest rates have reached or are near their cyclical peak.
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 investment grade quality, 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, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
BANK NOTES - 2.00%
Bank of America - Illinois
$25,000,000 05-05-1997 5.38% $25,000,410
-----------
Total Bank Notes
(Cost $25,000,410) $25,000,410
-----------
CERTIFICATE OF DEPOSIT - DOMESTIC - 1.60%
Bankers Trust
20,000,000 01-08-1998 5.81 $19,991,123
-----------
Total Certificate of Deposit - Domestic
(Cost $19,991,123) $19,991,123
-----------
COMMERCIAL PAPER - 58.45%
Allianz of America Finance Corporation
22,700,000 05-13-1997 5.48 $22,558,844
20,200,000 05-21-1997 5.44 20,051,867
American Home Products Corporation
60,000,000 04-01-1997 6.86 60,000,000
BMW U.S. Capital Corporation
33,012,000 04-03-1997 5.90 33,001,363
BTR Dunlop Finance Inc.
20,000,000 08-04-1997 5.60 19,627,778
20,000,000 08-20-1997 5.52 19,586,400
Banco Biboa Vizcaya Group
30,000,000 09-04-1997 5.68 29,294,100
Canadian Imperial Bank of
Commerce Holdings Inc.
30,000,000 04-25-1997 5.41 29,894,540
Citicorp
15,000,000 04-16-1997 6.99 15,000,000
Copley Financing Corporation
20,376,000 04-16-1997 5.47 20,330,494
Countrywide Funding Corporation
25,000,000 04-01-1997 5.52 25,000,000
30,000,000 04-07-1997 5.47 29,973,250
General Electric Capital Corporation
14,000,000 04-14-1997 5.44 13,973,104
</TABLE>
See notes to combined financial statements
3
<PAGE> 6
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
COMMERCIAL PAPER - (CONTINUED)
Goldman Sachs Group, L.P.
$30,000,000 06-05-1997 5.50% $29,714,542
Koch Industries Inc.
60,000,000 04-01-1997 6.86 60,000,000
Merrill Lynch & Company Inc.
20,000,000 04-30-1997 5.59 19,913,806
Philip Morris Companies Inc.
60,000,000 04-02-1997 6.20 59,989,833
Rose Asset Funding Co. Limited
20,000,000 04-08-1997 5.47 19,979,194
25,000,000 05-23-1997 5.75 24,797,777
Three Rivers Funding Corporation
38,200,000 04-10-1997 6.01 38,143,655
Toronto - Dominion Holdings U.S.A. Inc.
30,000,000 06-03-1997 5.50 29,719,650
Transamerica Finance Corporation
30,000,000 04-03-1997 5.43 29,991,133
20,000,000 04-22-1997 5.38 19,938,750
Union Bank of Switzerland
60,000,000 04-01-1997 6.86 60,000,000
------------
Total Commercial Paper
(Cost $730,480,080) $730,480,080
------------
EURO - DOLLAR DEPOSIT - 1.60%
Societe Generale
20,000,000 08-21-1997 5.43 $20,000,768
------------
Total Euro - Dollar Deposit
(Cost $20,000,768) $20,000,768
------------
FLOATING RATE NOTES - 17.20%
American Express Credit Corporation
30,000,000 11-13-1997 5.4075(b) $30,000,000
Associates Corporation of North America
25,000,000 03-02-1998 5.5700(a) 24,983,387
Bayerische - Landesbank Girozentale
25,000,000 08-20-1997 5.5666(c) 25,000,000
</TABLE>
See notes to combined financial statements
4
<PAGE> 7
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
FLOATING RATE NOTES - (CONTINUED)
Bear Stearns Companies Inc.
$25,000,000 09-04-1997 5.4675%(b) $25,000,000
20,000,000 11-07-1997 5.5325(c) 20,000,000
Beta Finance Corporation
20,000,000 06-16-1997 5.3775(b) 20,000,000
Canadian Imperial Bank of Commerce
20,000,000 08-06-1997 5.6125(c) 20,000,000
Sears Roebuk Acceptance Corporation
20,000,000 08-21-1997 5.57266(b) 20,010,877
WFP Tower B STEERS
29,908,752 12-08-1997 5.4675(b) 29,908,752
------------
Total Floating Rate Notes
(Cost $214,903,016) $214,903,016
------------
MEDIUM TERM NOTES - 4.20%
Ford Motor Credit Company
7,986,821 11-15-1997 5.451 $ 7,986,322
General Motors Acceptance Corporation
26,000,000 10-30-1997 5.73 25,986,862
18,500,000 11-07-1997 5.64 18,508,357
------------
Total Medium Term Notes
(Cost $52,481,541) $52,481,541
------------
YANKEE CERTIFICATES OF DEPOSIT - 14.65%
Abbey National PLC
25,000,000 11-26-1997 5.50 $24,984,121
Banque National De Paris
25,000,000 05-07-1997 5.41 25,000,247
23,000,000 08-18-1997 5.50 23,000,000
Commerzbank U.S. Finance
25,000,000 08-11-1997 5.48 25,002,529
Deustche Bank
25,000,000 03-10-1998 5.75 24,991,010
Landesbank Hessen - Thoringen
30,000,000 07-18-1997 6.01 30,038,903
</TABLE>
See notes to combined financial statements
5
<PAGE> 8
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
YANKEE CERTIFICATES OF
DEPOSIT - (CONTINUED)
Societe Generale
$30,000,000 07-22-1997 5.53% $30,000,910
--------------
Total Yankee Certificates of Deposit
(Cost $183,017,720) $183,017,720
--------------
TOTAL INVESTMENTS
(Cost $1,245,874,658)........ 99.70% $1,245,874,658
Cash and Receivables,
Less Payables (net).......... 0.30% 3,769,997
------ --------------
Net Assets................... 100.00% $1,249,644,655
====== ==============
</TABLE>
Notes:
(a) -- Fed. Fund -- rate instruments reflect rate as of 03-31-1997
(b) -- 1 Month Libor rate instruments reflect rate as of 03-31-1997
(c) -- 3 Month Libor rate instruments reflect rate as of 03-31-1997
See notes to combined financial statements
6
<PAGE> 9
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,900,000 Adams County, CO Industrial
Development Authority
Revenue Notes--City View Park Project
(7-Day Put, 7-Day Change)
12-01-2015 3.45%# $2,900,000
400,000 Alabama Special Care Facility
Montgomery Hospital Floating Rate
Demand Note
Series 1985
(7-Day Put, 7-Day Change)
04-01-2015 3.50# 400,000
2,235,000 Alaska State Industrial Development
Authority
Lot 6
(7-Day Put, 7-Day Change)
07-01-2001 3.50# 2,235,000
1,000,000 Alaska State Housing Financing Corporation
Series C, Floating Rate Demand Note
(7-Day Put, 7-Day Change)
06-01-2026 3.50# 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 3.50# 1,000,000
2,000,000 Alma, WI Pollution Control Revenue Bonds
Dairyland Power Co-Op Project
(7-Day Put, Monthly Change)
02-01-2015 3.60# 2,000,000
1,200,000 Arizona Health Facilities Authority
Revenue Bonds
(7-Day Put, 7-Day Change)
10-01-2015 3.55# 1,200,000
2,000,000 Baltimore County, MD General Obligation
Note
04-07-1997 3.30 2,000,000
</TABLE>
See notes to combined financial statements
7
<PAGE> 10
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 Baltimore County, MD Pollution Control
Revenue Bonds
Baltimore Gas & Electric Co. Project
(Mandatory Put 05-05-1997)
07-01-2011 3.45% $2,000,000
1,000,000 Baltimore County, MD Pollution Control
Revenue Bonds
Baltimore Gas & Electric Co. Project
(Mandatory Put 06-09-1997)
07-01-2011 3.55 1,000,000
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 3.60# 1,750,000
600,000 Bexar County, TX Housing Finance
Corporation Park Hill Project Series 88-B
(7-Day Put, 7-Day Change)
06-01-2005 3.60# 600,000
1,100,000 Billings, MT Industrial Development Revenue
Note
Adjustable Tender Notes
(7-Day Put, 7-Day Change)
12-01-2014 3.45# 1,100,000
1,000,000 Burke County, GA Development Authority
Pollution Control Revenue Bonds-Oglethorpe
Project
Georgia Power Company
(Mandatory Put 12-01-1997)
01-01-2025 3.60 1,000,000
3,150,000 Burlington, KS Pollution Control Revenue
Notes Kansas City Power and Light Project
(Mandatory Put 05-08-1997)
10-01-2017 3.35 3,150,000
</TABLE>
See notes to combined financial statements
8
<PAGE> 11
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,000,000 Chelan County, WA Public Utility District
Number 1
Conservation Revenue Hydroelectric Project
Series A
(7-Day Put, 7-Day Change)
06-01-2015 3.30%# $1,000,000
2,300,000 Claiborne County, MS Pollution Control
Revenue Bonds
National Rural Electric/Southern
Mississippi Electric Power Association,
Series 1985G-2
(Mandatory Put 05-09-1997)
12-01-2015 3.55 2,300,000
1,100,000 Clark County, NV Airport Improvement
Revenue Bond Series A-1
(7-Day Put, 7-Day Change)
07-01-2025 3.35# 1,100,000
500,000 Clark County, NV Industrial Development
Authority Nevada Power Company Series C
(7-Day Put, 7-Day Change)
10-01-2030 3.45# 500,000
1,500,000 Clarksville, TN Public Building Authority
Pooled Financial Series
(7-Day Put, 7-Day Change)
12-01-2000 3.35# 1,500,000
5,805,000 Clayton County, GA Housing Finance
Authority
(7-Day Put, 7-Day Change)
01-01-2021 3.40# 5,805,000
4,000,000 State of Connecticut, Special Assessment
Unemployment Compensation Advance Fund
Revenue Bonds, (Connecticut Unemployment
Revenue Bonds) 1993 Series C
07-01-1997 3.90 4,000,000
1,805,000 Cook, Kane, and McHenry Counties, IL
Community College District, William Rainey
Harper College, GO Bond
12-01-1997 3.85 1,812,593
</TABLE>
See notes to combined financial statements
9
<PAGE> 12
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 Dade County, FL Housing Finance Authority
Miami Children's Hospital Project
(7-Day Put, 7-Day Change)
09-01-2025 3.35%# $2,000,000
1,990,000 Dade County, FL Housing Finance Authority
Waterside Project Series 2
(7-Day Put, 7-Day Change)
08-01-2005 3.55# 1,990,000
2,000,000 Davis County, UT School District Tax
Anticipation Notes, General Obligation
06-30-1997 3.85 2,003,086
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)
03-01-2024 3.45# 800,000
3,000,000 Delaware County, PA Pollution Control
Revenue Bonds
Philadelphia Electric Company
Project 1988-A
(Mandatory Put 04-08-1997)
12-01-2012 3.20 3,000,000
2,000,000 Delaware State Economic Development
Authority Industrial Development Revenue
Bonds
Delmarva Power & Light Co Gas Facilities
Project C
(7-Day Put, 7-Day Change)
10-01-2028 3.55# 2,000,000
1,095,000 District of Columbia, Revenue Bonds,
(The American University Issue), Series
1986A
(7-Day Put, 7-Day Change)
12-01-2015 3.45# 1,095,000
</TABLE>
See notes to combined financial statements
10
<PAGE> 13
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,400,000 District of Columbia, Revenue Bonds,
Georgetown University Issue, Series 1986D
(7-Day Put, 7-Day Change)
04-01-2017 3.40%# $1,400,000
2,000,000 Fairfield-Suisun, CA Unified School
District,
Tax and Revenue Anticipation Notes
10-09-1997 3.83 2,004,229
1,300,000 Florida Housing Finance Agency--Reference
Multi-Family Housing EE, Twin Colony
Project
(7-Day Put, 7-Day Change)
09-01-2008 3.55# 1,300,000
1,230,000 Florida Housing Finance Agency--Reference
Multi-Family Housing EEE Carlton Project
(7-Day Put, 7-Day Change)
12-01-2008 3.45# 1,230,000
3,200,000 Florida Housing Finance Agency--Reference
Multi-Family Hillsboro, Series D
(7-Day Put, 7-Day Change)
12-01-2009 3.60# 3,200,000
400,000 Florida State Municipal Power Agency
Required Power Supply, Electric Power &
Light Revenue
(Pre-refunded to 10-01-1997 @ 102)
10-01-2000 3.70 412,945
1,300,000 Georgia Municipal Gas Authority Revenue
Bonds Southern Portfolio 1 Project D,
Natural Gas Revenues
(Mandatory Put 04-01-1997)
01-01-2001 3.25 1,300,000
575,000 Grand River Dam Authority, OK Revenue Bonds
Electric Power Revenue,
(Pre-refunded to 06-01-1997 @ 102)
06-01-2013 3.80 588,710
1,285,000 Grand River Dam Authority, OK Revenue Bonds
Electric Power Revenue,
(Pre-refunded to 06-01-1997 @ 102)
06-01-2000 3.75 1,316,677
</TABLE>
See notes to combined financial statements
11
<PAGE> 14
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,000,000 Greensboro, NC General Obligation Note
Public Improvements-Sewer Project, Series B
(7-Day Put, 7-Day Change)
04-01-2007 3.40%# $1,000,000
1,000,000 Illinois Development Finance Authority
Revenue Bonds, Catholic Charities Housing
Project A
(Mandatory Put 08-24-1997)
01-01-2028 3.55 1,005,607
300,000 Illinois Health Facility Authority Hospital
Revenue Bonds, Sisters of Charity Project,
Series E
(7-Day Put, 7-Day Change)
12-01-2015 3.50# 300,000
600,000 Illinois Health Facility Authority Hospital
Revenue Bonds, Decatur Memorial Hospital
Project A
(7-Day Put, 7-Day Change)
11-15-2024 3.50# 600,000
1,500,000 Illinois State Toll Highway Authority
Highway Priority Revenue Bonds, Series B
(7-Day Put, 7-Day Change)
01-01-2010 3.35# 1,500,000
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 3.50# 2,000,000
1,400,000 Jacksonville, FL Electric Authority
Revenue Bonds Series AA
(Mandatory Put 10-04-1997)
10-01-2014 3.45 1,400,000
2,000,000 Jefferson Parish, LA Hospital Service
District #001 Hospital Revenue Bonds,
Jefferson Medical Center
(7-Day Put, 7-Day Change)
01-01-2026 3.50# 2,000,000
</TABLE>
See notes to combined financial statements
12
<PAGE> 15
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,000,000 Lincoln County, WY Pollution Control
Revenue Bonds
Local Improvements, Exxon Project Series D
(Daily Put, Daily Change)
11-01-2024 3.90%# $1,000,000
1,800,000 Lone Star, TX Airport Improvement
Authority, Revenue Bonds, American Airlines
Project
(Daily Put, Daily Change)
12-01-2014 3.80# 1,800,000
2,000,000 Los Angeles, CA Unified School District Tax
and Revenue Anticipation Notes
06-30-1997 3.80 2,003,323
450,000 Louisiana Public Facilities Authority
Revenue Bonds--College & University
Equipment and Capital Series A
(7-Day Put, 7-Day Change)
09-01-2010 3.40# 450,000
1,200,000 Louisiana Public Facilities Authority,
Hospital Revenue CP Program
(7-Day Put, 7-Day Change)
12-01-2000 3.50# 1,200,000
1,600,000 Louisiana Public Facilities Authority,
Hospital Revenue Bonds, Lady of the Lake
Regional Medical Center
(Mandatory Put 04-03-1997)
08-01-2012 3.25 1,600,000
4,100,000 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# 4,100,000
</TABLE>
See notes to combined financial statements
13
<PAGE> 16
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$200,000 Lynchburg, 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 3.50%# $ 200,000
4,200,000 Maryland State Health and Higher Education
Facilities Authority Revenue Notes
(7-Day Put, 7-Day Change)
04-01-2035 3.45# 4,200,000
2,000,000 Maryland State Health and Higher Education
Facilities Authority Revenue Notes
(7-Day Put, 7-Day Change)
07-01-2024 3.55# 2,000,000
650,000 Mason County, KY Pollution Control Revenue
Bonds, Kentucky Power-National Rural
Electric Project Series B-1
(7-Day Put, 7-Day Change)
10-15-2014 3.45# 650,000
1,300,000 Massachusetts State General Obligation
Unlimited Notes Series 1990 A
06-01-1997 3.65 1,308,975
1,115,000 Memphis, TN General Obligation Notes
10-01-1997 3.50 1,123,185
1,000,000 Metropolitan Government of Nashville &
Davidson County, TN Electric Power and
Light Revenue Bonds
05-15-1997 3.70 1,001,054
515,000 Michigan State Hospital Finance Authority
Revenue Bonds, Hospital Equipment Loan
Program
(7-Day Put, 7-Day Change)
06-01-2001 3.35# 515,000
</TABLE>
See notes to combined financial statements
14
<PAGE> 17
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$400,000 Michigan State Hospital Finance Authority
Revenue Bonds, Hospital Equipment Loan
Program
(7-Day Put, 7-Day Change)
12-01-2023 3.55%# $ 400,000
2,000,000 Michigan State Underground Storage Tank
Financial Authority Revenue Bonds, Series
1995
(Mandatory Put 04-08-1997)
12-01-2004 3.40 2,000,000
800,000 Missouri State Environmental Improvement
and Energy Research Authority, Pollution
Control Revenue Bonds, National Rural
Utilities Project
(7-Day Put, 7-Day Change)
12-15-2003 3.45# 800,000
1,000,000 Missouri State Health & Educational
Facilities Authority School District
Advance Funding Project, Rockwood School D
09-08-1997 3.66 1,003,442
3,000,000 Moffat Country, CO Pollution Control
Revenue Bonds, Colorado-Ute Electric
Authority Project
(7-Day Put, 7-Day Change)
07-01-2010 3.40# 3,000,000
2,000,000 Montgomery County, MD General Obligation
Bonds 1996 Series
05-05-1997 3.40 2,000,000
900,000 Montgomery County, PA Higher Education and
Health Authority, Hospital Revenue Bonds,
Bryn Mawr Hospital
(Pre-refunded to 12-01-1997 @ 102)
12-01-2019 3.65 951,091
2,000,000 Municipal Electric Authority of Georgia,
Revenue Bonds Series A
(Mandatory Put 04-08-1997)
01-01-2009 3.55 2,000,000
</TABLE>
See notes to combined financial statements
15
<PAGE> 18
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 Municipal Electric Authority of Georgia,
Revenue Bonds Project One, Series 1994 D
(Mandatory Put 04-11-1997)
01-01-2022 3.20% $2,000,000
1,200,000 National Rural Utilities Authority,
Industrial Development Board of the Town of
Chatom, AL
Alabama Electric Co-Op Project
(Mandatory Put 05-09-1997)
03-01-2008 3.55 1,200,000
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 3.45# 2,000,000
2,000,000 New Jersey Tax and Revenue Anticipation
Notes Series 1997 A
04-08-1997 3.40 2,000,000
400,000 New Mexico State Hospital Equipment Revenue
Bonds
(7-Day Put, 7-Day Change)
05-01-2009 3.45# 400,000
500,000 New York, NY General Obligation Series B-2
(Daily Put, Daily Change)
08-15-2019 3.70# 500,000
2,000,000 New York, NY General Obligation Series B
Subseries B-4
(Daily Put, Daily Change)
08-15-2023 4.00# 2,000,000
200,000 New York, NY General Obligation Series C
(Daily Put, Daily Change)
10-01-2023 3.70# 200,000
</TABLE>
See notes to combined financial statements
16
<PAGE> 19
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,200,000 North Carolina Educational Facilities
Finance Agency Revenue Refunding Bonds for
University and College Improvements,
Guilford College Project
(Daily Put, Daily Change)
09-01-2023 3.80%# $1,200,000
2,440,000 Norwalk, CA Redevelopment Agency Tax-
Allocation Refunding Notes
Norwalk Redevelopment Project 1
(Pre-refunded to 12-01-1997 @ 101,948)
12-01-2015 3.60 2,542,884
2,750,000 The Ohio State University General Receipts
Revenue Bonds Series B, General University
Improvements
(7-Day Put, 7-Day Change)
12-01-2012 3.20# 2,750,000
500,000 Orange County, FL Tax-Exempt Commercial
Paper Series A
05-17-1997 3.35 500,000
1,775,000 Oregon State Housing and Community Services
Dept. Revenue Bonds, Single-Family Mortgage
Program Series J
12-11-1997 3.55 1,775,000
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 3.55# 1,000,000
3,000,000 Philadelphia, PA Gas Works Eleventh Series A
(Pre-refunded to 07-01-1997 @ 102)
07-01-2017 3.70 3,089,794
720,000 Pickens County, SC School District Series A
General Obligation Unlimited School
Improvements
05-01-1997 3.65 721,079
</TABLE>
See notes to combined financial statements
17
<PAGE> 20
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,715,000 Pima County, AZ Community College District
Project of 1995, Series A
07-01-1997 3.90% $2,735,376
700,000 Pima County, AZ Industrial Development
Corporation, Tucson Electric Corp. Series A
(7-Day Put, 7-Day Change)
06-15-2022 3.50# 700,000
1,000,000 Pinellas Country, FL Educational Facilities
Authority Revenue Bonds, Higher Educational
Improvements
(Mandatory Put 04-28-1997)
12-01-2025 3.30 1,000,000
400,000 The Port of Portland, OR Pollution Control
Revenue Bonds, Reynold Metals Industrial
Revenue Project
(Daily Put, Daily Change)
12-01-2009 3.80# 400,000
950,000 Richardson, TX Independent School District
General Obligation Notes Series A
(Pre-refunded to 08-15-1997 @ 102)
08-15-1999 3.825 960,924
1,950,000 Rochester, MN Health Care Facilities
Revenue Bonds, Mayo Foundation/Mayo Medical
Center Series 88-F
(Mandatory Put 04-22-1997)
11-15-2017 3.25 1,950,000
3,000,000 Rockport, IN Pollution Control Revenue
Notes Indiana-Michigan Power
Company-Project B
(7-Day Put, 7-Day Change)
06-01-2025 3.55# 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 3.50# 1,000,000
</TABLE>
See notes to combined financial statements
18
<PAGE> 21
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,500,000 Salt River Project, AZ Agricultural
Improvement
and Power District
05-09-1997 3.50% $2,500,000
2,000,000 San Francisco, CA City and County Unified
School District, Tax and Revenue
Anticipation Notes
07-24-1997 3.98 2,003,138
502,000 Scituate, MA General Obligation Note
Water and Sewer Utilities Improvement
11-01-1997 3.77 505,518
1,500,000 Seattle, WA Municipal Light and Power
Revenue Bonds Adjustable Series B
(Mandatory Put 05-29-1997)
05-01-2011 3.45 1,500,000
1,600,000 Seattle, WA Municipal Light and Power
Revenue Bonds
(7-Day Put, 7-Day Change)
11-01-2018 3.45# 1,600,000
500,000 Seattle, WA Water System Revenue Bonds
(7-Day Put, 7-Day Change)
09-01-2025 3.45# 500,000
2,500,000 Port of Seattle, Washington General
Obligation Bonds
(7-Day Put, 7-Day Change)
01-01-2005 3.50# 2,500,000
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 3.60# 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 3.55# 50,000
</TABLE>
See notes to combined financial statements
19
<PAGE> 22
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,700,000 South Carolina Jobs Economic Development
Authority, Industrial Development Revenue
Bonds, St. Francis Hospital Project
(Daily Put, 7-Day Change)
07-01-2022 3.80%# $1,700,000
890,000 South Carolina State General Obligation
Revenue Bonds, University and College
Improvements, Series B
04-01-1997 3.65 890,000
1,000,000 Sweetwater County, WY Pollution Control
Revenue Bonds, Pacificorp Project
(Mandatory Put 05-12-1997)
01-01-2017 3.30 1,000,000
1,705,000 Tarrant County, TX Housing Financial
Corporation Revenue Bonds, Multi-Family
Housing-SF Apartments
(7-Day Put, 7-Day Change)
11-01-2017 3.45# 1,705,000
750,000 Texas Higher Education Authority, Inc.
Series B
(7-Day Put, 7-Day Change)
12-01-2025 3.40# 750,000
980,000 Texas Hospital Equipment Financing
Authority Revenue Bonds
(7-Day Put, 7-Day Change)
04-07-2005 3.55# 980,000
2,500,000 Texas State Miscellaneous Tax and Revenue
Anticipation Notes
08-29-1997 3.48 2,512,085
2,000,000 Toledo-Lucas County, OH Port Authority
Revenue Bonds
CSX Transport, Inc. Project
(Mandatory Put 04-07-1997)
12-15-2021 3.30 2,000,000
1,000,000 Washington State General Obligation Note
Refunding Bonds Series R-93-B-1
10-01-1997 3.75 1,001,825
</TABLE>
See notes to combined financial statements
20
<PAGE> 23
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 West Orange Memorial Hospital Tax District
Revenue Bonds Series A-1
(Mandatory Put 05-31-1997)
02-01-2022 3.50% $2,000,000
1,000,000 Wichita, KS Highway Improvement Authority
General Obligation Sales Tax Revenue Notes
Highway and Public Improvements
10-01-1997 3.626 1,004,263
2,200,000 Wisconsin Health and Educational Facilities
Authority, Revenue ACES, Health Care
Project A
(7-Day Put, 7-Day Change)
06-01-2006 3.40# 2,200,000
-------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $177,631,803)............. 99.21% $177,631,803
Cash and Receivables, Less
Payables (net).................. 0.79% 1,418,833
------ ------------
Net Assets...................... 100.00% $179,050,636
====== ============
</TABLE>
- ---------------
Notes: #--Variable Rate Instruments Reflect Rate as of 03-31-1997
85.5% of the investment values above are supported by Letters of Credit,
guarantees or other credit enhancements.
See notes to combined financial statements
21
<PAGE> 24
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1997
(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) $1,245,874,658 $177,631,803
Cash 308,894
Interest receivable 6,631,246 1,359,648
Prepaid expenses 84,748 35,068
-------------- ------------
TOTAL ASSETS 1,252,590,652 179,335,413
-------------- ------------
LIABILITIES
Due to Custodian 143,657
Due to investment manager - Note B 533,330 61,517
Accrued expenses 430,132 68,760
Dividends payable 1,838,878 154,500
-------------- ------------
TOTAL LIABILITIES 2,945,997 284,777
-------------- ------------
NET ASSETS $1,249,644,655 $179,050,636
============== ============
Represented By:
Paid-in capital $1,251,339,839 $179,069,178
Accumulated net realized loss on investments (1,695,184) (18,542)
-------------- ------------
NET ASSETS AT VALUE, applicable to
1,251,339,839 outstanding shares of $.01 par
value Common Stock for SRF and 179,069,178
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) $1,249,644,655 $179,050,636
============== ============
Offering and redemption price per share $ 1.00 $ 1.00
============== ============
</TABLE>
See notes to combined financial statements
22
<PAGE> 25
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
<S> <C> <C>
INVESTMENT INCOME
Interest income $32,523,092 $3,150,327
----------- ----------
EXPENSES
Investment management fee - Note B 2,964,105 449,276
Shareholder servicing costs and custodian fee 958,228 77,238
Federal and State registration fees 61,661 34,375
Professional fees 35,153 18,202
Directors' fees and expenses - Note B 11,301 11,301
Prospectus and shareholders' reports 30,416 1,696
Miscellaneous 39,191 6,496
----------- ----------
Total Expenses 4,100,055 598,584
Less: Investment management fee
waived - Note B -- (89,855)
----------- ----------
Net Expenses 4,100,055 508,729
----------- ----------
Investment Income - net 28,423,037 2,641,598
Net realized gain on investments 69,779 --
----------- ----------
Net Increase in Net Assets Resulting From
Operations $28,492,816 $2,641,598
=========== ==========
</TABLE>
See notes to combined financial statements
23
<PAGE> 26
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
---------------------------------- -------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
1997 1996 1997 1996
--------------- -------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATIONS
Investment
income - net $28,423,037 $51,046,194 $2,641,598 $4,712,178
Net realized gain on
investments 69,779 77,106 -- --
-------------- -------------- ------------- -------------
Net increase in net
assets resulting
from operations 28,492,816 51,123,300 2,641,598 4,712,178
DIVIDENDS TO
SHAREHOLDERS FROM
Investment
income - net (28,423,037) (51,046,194) (2,641,598) (4,712,178)
COMMON STOCK
TRANSACTIONS
(NET) - NOTE C 147,630,466 210,979,736 7,995,142 48,519,374
------------- -------------- ------------- -------------
Total increase in net
assets 147,700,245 211,056,842 7,995,142 48,519,374
NET ASSETS
Beginning of period 1,101,944,410 890,887,568 171,055,494 122,536,120
-------------- -------------- ------------- -------------
End of period $1,249,644,655 $1,101,944,410 $179,050,636 $171,055,494
============== ============== ============= =============
</TABLE>
See notes to combined financial statements
24
<PAGE> 27
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - SUMMARY OF SIGNIFICANT AC-COUNTING 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, 1997, 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, 1996, SRF and STE had unused capital loss carryovers of
approximately $1,765,000 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 2001 and in fiscal 2000, 2001 and 2002,
respectively.
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. Cowen has waived
$89,855 of its Investment Management Fee from STE during the six months ended
March 31, 1997.
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 $375 for
25
<PAGE> 28
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (continued)
(UNAUDITED)
each audit committee meeting attended and reimbursement for travel and
out-of-pocket expenses.
NOTE C - COMMON STOCK TRANSACTIONS: At March 31, 1997, 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 YEAR
ENDED ENDED
MARCH 31, SEPTEMBER 30,
1997 1996
<S> <C> <C>
Shares sold $2,913,114 $5,093,876
Dividends reinvested 27,075 48,575
------------ ------------
2,940,189 5,142,451
Shares redeemed (2,792,559) (4,931,471)
------------ ------------
Net increase $147,630 $210,980
============ ============
</TABLE>
<TABLE>
<CAPTION>
STE
---------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, SEPTEMBER 30,
1997 1996
<S> <C> <C>
Shares sold $378,334 $729,409
Dividends reinvested 2,564 4,508
----------- -----------
380,898 733,917
Shares redeemed (372,903) (685,398)
----------- -----------
Net increase $7,995 $48,519
=========== ===========
</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 - FINANCIAL HIGHLIGHTS: Selected data for a share of Common Stock
outstanding throughout each period:
<TABLE>
<CAPTION>
SRF
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, ---------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
----------- ----------- ------ ------ ------ ------
(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 0.05 0.03 0.03 0.04
LESS DISTRIBUTIONS
Dividends from Net Investment
Income (0.02) (0.05) (0.05) (0.03) (0.03) (0.04)
---------- ---------- -------- -------- --------- ---------
NET ASSET VALUE
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======== ======== ========= =========
Total Return 4.83%(1) 4.97% 5.23% 3.14% 3.07% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net Assets (000 omitted) $1,249,645 $1,101,944 $890,888 $692,609 $ 682,379 $ 667,366
Ratio of Expenses to Average
Net Assets 0.69%(1) 0.71% 0.71% 0.64% 0.68% 0.70%
Ratio of Net Investment
Income to Average Net
Assets 4.80%(1) 4.89% 5.13% 3.11% 3.00% 4.06%
</TABLE>
27
<PAGE> 30
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, ------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
------ ------ ------ ------ ------ ------
(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 0.01 0.03 0.03 0.02 0.02 0.03
LESS DISTRIBUTIONS
Dividends from Net Investment
Income (0.01) (0.03) (0.03) (0.02) (0.02) (0.03)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return 2.96% (1) 3.07% 3.19% 2.11% 2.03% 2.97%
RATIOS/SUPPLEMENTAL DATA
Net Assets (000 omitted) $179,051 $171,055 $122,536 $120,704 $116,618 $118,389
Ratio of Expenses to Average
Net Assets 0.57% (1) 0.59% 0.61% 0.58% 0.62% 0.61%
Ratio of Net Investment Income
to Average Net Assets 2.94% (1) 3.01% 3.14% 2.03% 1.99% 2.87%
INVESTMENT ADVISORY FEES WAIVED
Amount $ 89,855 $156,993 $124,784 $130,483 $119,582 $130,414
Ratio to Average Net Assets 0.10% 0.10% 0.10% 0.10% 0.10% 0.10%
</TABLE>
- ---------------
(1) Annualized
28
<PAGE> 31
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
</TABLE>
CMB-RSRV-SEMI
