<PAGE> 1
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORTS (UNAUDITED) MARCH 31, 1998
COWEN STANDBY RESERVE
FUND, INC.
AND
COWEN STANDBY TAX - EXEMPT
RESERVE FUND, INC.
(LOGO)
COWEN & COMPANY
- --------------------------------------------------------------------------------
<PAGE> 2
COWEN STANDBY RESERVE FUND, INC.
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
SEMI-ANNUAL FINANCIAL STATEMENTS
MARCH 31, 1998
(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..........................................21
Statements of Operations......................................................22
Statements of Changes in Net Assets...........................................23
Notes to Combined Financial Statements........................................24
<PAGE> 3
CHAIRMAN'S LETTER MAY 13, 1998
Dear Shareholder:
We are pleased to report that the Cowen Standby Reserve Fund and the Cowen
Standby Tax-Exempt Reserve Fund produced yields well in excess of inflation
throughout the semi-annual period ended March 31, 1998. As of that date, the
annualized 7-day yields were 4.98% and 3.07%, respectively.
MARKET ACTIVITY
Over the past six months, investors have been concentrating on the Federal
Reserve Board (Fed) and what actions it might take. Between October and
December, the consensus opinion was that the Fed would have to raise short-term
interest rates in early January to slow down the U.S. economy. However, by the
time we entered the first quarter of 1998, the Fed was thought to be on hold
with a bias towards lowering interest rates. The reason for the shift in
sentiment was the perception that the Asian economic crisis would slow down the
U.S. economy without the need for Fed action. As we now know, the Fed stayed on
the sidelines during the first quarter of 1998 even though the Asian impact
failed to materialize.
The Federal Funds rate, the rate banks charge each other for overnight loans,
remained at 5.5% for the entire six-month period. However by March 31, sentiment
had once again switched to the possibility for the Fed to raise rates because
the threat from Asia had shown little evidence of slowing down the U.S. economy.
Consumer spending was strong throughout the six-month period, as was consumer
sentiment. The unemployment rate fell below 5%, and corporations were coping
with "job quitters," people who had the confidence to leave their job without
having another one lined up. At the same time, interest rates declined for most
of the period, and inflation, as measured by the Consumer Price Index, remained
under 2%.
INVESTMENT REVIEW
During the first half of the period, the Cowen Standby Reserve Fund's average
maturity was slightly longer than the average money market fund. Although the
market had anticipated a rise in interest rates, our view was that the Fed would
not tighten. By extending our maturity through January, we were able to lock in
higher yields. After a short transition period, we brought down the average
maturity in February because we were no longer being compensated to extend out
on the yield curve. As of March 31, the average maturity was 48 days, down from
63 days at the beginning of the period.
While both the Cowen Standby Reserve Fund and Cowen Standby Tax-Exempt Reserve
Fund are managed according to expectations regarding interest rates and Fed
policy, the Cowen Standby Tax-Exempt Reserve Fund involves additional factors
such as the supply and demand of securities and the liquidity needs of
investors. For example, the Cowen Standby Tax-Exempt Reserve Fund's average
maturity was shorter than average during February and March in preparation for
April 15th, since many investors use this fund to pay taxes on their taxable
investments.
In the interest of safety and liquidity, both funds are managed very
conservatively. The Cowen Standby Reserve Fund is invested in top tier-rated
commercial paper, certificates of deposit and floating rate notes. The Cowen
Standby Tax-Exempt Reserve Fund is invested in top tier-rated tax-exempt and
floating rate notes.
1
<PAGE> 4
LOOKING AHEAD
With the Federal Reserve Board showing less concern about the effects of Asia,
we feel the need to concentrate on our own economy in order to understand future
Fed activity. It is our view that the fundamentals of low inflation and solid
economic growth will not be enough to provoke the Fed to raise rates. With that
in mind, we will be extending the average days to maturity longer than the
average money market fund, believing that the slightest economic slowdown will
give the Fed the leeway to maintain a stable monetary policy.
We look forward to serving your investment needs in the future.
Sincerely,
/s/ JOSEPH M. COHEN
-------------------
Joseph M. Cohen
Chairman
2
<PAGE> 5
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED VALUE
PRINCIPAL DESCRIPTION OF YIELD ON DATE
AMOUNT SECURITY OF PURCHASE
<C> <S> <C> <C>
CERTIFICATE OF DEPOSIT - DOMESTIC - 1.99%
Bankers Trust New York Corp.
$30,000,000 04-03-1998 5.70% $ 29,999,951
--------------
Total Certificate of Deposit - Domestic
(Cost $29,999,951) $ 29,999,951
--------------
COMMERCIAL PAPER - 65.85%
Aetna Services, Inc.
$40,000,000 05-14-1998 5.60% $ 39,739,611
American Express Corp.
40,000,000 04-02-1998 5.73 39,993,811
American Home Products
25,000,000 04-16-1998 5.63 24,942,500
Associates Corp.
20,000,000 04-22-1998 5.63 20,000,000
BMW U.S. Capital
11,200,000 04-02-1998 5.64 11,198,276
39,365,000 05-11-1998 5.64 39,123,999
BTR Dunlop Finance Corp.
30,000,000 04-09-1998 5.63 29,963,467
30,000,000 05-21-1998 5.59 29,773,333
Bear Stearn Companies, Inc.
25,000,000 04-16-1998 5.61 24,942,813
Bell Atlantic Financial Services
28,998,000 04-02-1998 5.64 28,993,529
Countrywide Funding Corporation
18,649,000 04-02-1998 5.67 18,646,109
35,000,000 05-26-1998 5.66 34,705,368
15,000,000 05-28-1998 5.68 14.868,663
Daimler-Benz Corporation
25,000,000 04-09-1998 5.66 24,969,167
30,000,000 04-23-1998 5.77 29,898,433
Ford Motor Credit Corporation
35,000,000 04-07-1998 5.57 35,000,000
30,000,000 05-20-1998 5.53 30,000,000
</TABLE>
See notes to combined financial statements
3
<PAGE> 6
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED VALUE
PRINCIPAL DESCRIPTION OF YIELD ON DATE
AMOUNT SECURITY OF PURCHASE
<C> <S> <C> <C>
COMMERCIAL PAPER - (CONTINUED)
General Electric Capital Corp.
$17,000,000 04-22-1998 5.64% $ 16,945,161
13,500,000 04-22-1998 5.64 13,456,451
General Motors Acceptance Corp.
30,000,000 04-30-1998 5.61 30,000,000
Grand Metropolitan, PLC
30,000,000 04-15-1998 5.81 29,935,017
Merrill Lynch & Company Inc.
25,000,000 05-06-1998 5.80 24,864,861
Nordbanken
25,000,000 06-04-1998 5.64 24,756,000
Penney, J.C. Financial Corporation
16,000,000 04-02-1998 5.60 15,997,560
Prudential Funding Corporation
40,000,000 04-07-1998 5.66 39,963,000
20,000,000 06-10-1998 5.65 19,786,500
Riverwoods Funding
30,000,000 04-16-1998 5.66 29,930,625
Rose Asset Funding Company, Limited
25,000,000 04-16-1998 5.62 24,943,021
30,000,000 04-28-1998 5.62 29,876,925
Svenska Handelbank
25,000,000 05-26-1998 5.61 24,791,458
33,000,000 06-03-1998 5.77 32,678,910
Toronto Dominion Finance
27,500,000 06-08-1998 5.62 27,218,461
Trans America Finance
22,000,000 04-21-1998 5.63 21,932,533
18,000,000 04-27-1998 5.63 17,928,240
Union Bank of Switzerland
41,000,000 04-01-1998 6.08 41,000,000
</TABLE>
See notes to combined financial statements
4
<PAGE> 7
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED VALUE
PRINCIPAL DESCRIPTION OF YIELD ON DATE
AMOUNT SECURITY OF PURCHASE
<C> <S> <C> <C>
COMMERCIAL PAPER - (CONTINUED)
Xerox Corporation
$35,000,000 04-07-1998 5.63% $ 34,967,742
15,000,000 04-21-1998 5.58 14,954,584
--------------
Total Commercial Paper
(Cost $992,686,128) $ 992,686,128
--------------
FLOATING RATE NOTES - 16.36%
American Express Centurion Bank
$20,000,000 01-14-1999 5.526(b)% $ 20,000,000
Bankers Trust New York Corporation
24,000,000 03-18-1999 5.570(a) 23,990,941
Bear Stearns & Co.
40,000,000 09-16-1998 5.669(c) 40,000,000
Dean Witter/Discover
25,000,000 08-03-1998 5.100(b) 25,005,872
General Motors Acceptance Corporation
35,000,000 10-06-1998 5.749(c) 35,000,000
Key Bank Corporation
30,000,000 02-22-1999 5.545(c) 29,988,276
PHH Corporation
20,000,000 08-28-1998 5.000(b) 19,997,580
23,000,000 02-10-1999 5.582(b) 22,996,992
WFP Tower B STEERS
29,622,025 12-08-1998 6.030(b) 29,622,025
--------------
Total Floating Rate Notes
(Cost $246,601,686) $ 246,601,686
--------------
YANKEE CERTIFICATES OF DEPOSIT - 15.36%
ABN-AMRO Bank
$24,000,000 06-19-1998 5.93% $ 24,012,379
25,500,000 03-26-1999 5.79 25,500,000
Barclays Bank, PLC
15,000,000 10-22-1998 5.91 14,994,956
Bayerische Landesbank Girozen
30,000,000 09-21-1998 5.53 30,022,251
</TABLE>
See notes to combined financial statements
5
<PAGE> 8
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED VALUE
PRINCIPAL DESCRIPTION OF YIELD ON DATE
AMOUNT SECURITY OF PURCHASE
<C> <S> <C> <C>
YANKEE CERTIFICATES OF
DEPOSIT - (CONTINUED)
Royal Bank of Canada
$30,000,000 05-12-1998 5.73% $ 30,009,196
30,000,000 02-26-1999 5.69 29,984,221
Societe Generale
26,000,000 05-01-1998 5.51 25,999,982
Swiss Bank Corporation
19,000,000 07-02-1998 5.95 19,002,025
15,000,000 07-17-1998 5.79 14,999,330
17,000,000 08-28-1998 5.90 16,998,987
--------------
Total Yankee Certificates of Deposit
(Cost $231,523,327) $ 231,523,327
--------------
TOTAL INVESTMENTS
(Cost $1,500,811,092)........ 99.56% $1,500,811,092
Cash and Receivables,
Less Payables (net).......... 0.44% 6,577,384
----- --------------
Net Assets................... 100.00% $1,507,388,476
====== ==============
</TABLE>
Notes:
(a) -- Prime rate instruments reflect rate as of 03-31-1998
(b) -- 1 Month Libor rate instruments reflect rate as of 03-31-1998
(c) -- 3 Month Libor rate instruments reflect rate as of 03-31-1998
See notes to combined financial statements
6
<PAGE> 9
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$ 400,000 Alabama Special Care Facility
Montgomery Hospital Floating Rate
Demand Note
Series 1985
(7-Day Put, 7-Day Change)
04-01-2015 3.65%# $ 400,000
2,160,000 Alaska State Industrial Development
Authority
Lot 6
(7-Day Put, 7-Day Change)
07-01-2001 3.75 # 2,160,000
1,000,000 Alaska State Housing Financing Corporation
Series C, Floating Rate Demand Note
(7-Day Put, 7-Day Change)
06-01-2026 3.85 # 1,000,000
3,000,000 Allegheny County, PA Industrial Development
Authority Pollution Control Revenue Bonds,
Series 1986
(Mandatory Put 06-10-1998)
05-01-2002 3.50 3,000,000
2,100,000 Allegheny County, PA Industrial Development
Authority Revenue Bonds, Longwood at
Oakmont Project B
(Daily Put, Daily Change)
07-01-2027 3.90 # 2,100,000
1,200,000 Arizona Health Facilities Authority
Revenue Bonds
(7-Day Put, 7-Day Change)
10-01-2015 3.65 # 1,200,000
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 3.80 # 1,750,000
</TABLE>
See notes to combined financial statements
7
<PAGE> 10
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$ 600,000 Bexar County, TX Housing Finance
Corporation Park Hill Project Series 88-B
(7-Day Put, 7-Day Change)
06-01-2005 3.85%# $ 600,000
1,100,000 Billings, MT Industrial Development Revenue
Adjustable Tender Notes
(7-Day Put, 7-Day Change)
12-01-2014 3.70 # 1,100,000
1,000,000 Brazos River, TX Harbor Navigation District
Pollution Control Revenue Bonds, Project A
(Mandatory Put 04-09-1998)
03-01-2005 3.50 1,000,000
1,300,000 Burlington, KS Pollution Control Revenue
Notes
Kansas City Power and Light Project Series
A
(Mandatory Put 04-06-1998)
09-01-2015 3.70 1,300,000
3,150,000 Burlington, KS Pollution Control Revenue
Notes
Kansas City Power and Light Project
(Mandatory Put 05-12-1998)
10-01-2017 3.30 3,150,000
2,300,000 Claiborne County, MS Pollution Control
Revenue Bonds
National Rural Electric/Southern
Mississippi Electric Power Association,
Series 1985G-2
(Mandatory Put 06-10-1998)
12-01-2015 3.50 2,300,000
1,100,000 Clarksville, TN Public Building Authority
Pooled Financial Series
(7-Day Put, 7-Day Change)
12-01-2000 3.65 # 1,100,000
6,080,000 Clayton County, GA Housing Finance
Authority
(7-Day Put, 7-Day Change)
01-01-2021 3.70 # 6,080,000
</TABLE>
See notes to combined financial statements
8
<PAGE> 11
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$4,000,000 Cohasset, MN Revenue Bonds, Minnesota Power
and Light Industrial Refunding Project A
(Daily Put, Daily Change)
06-01-2020 3.90%# $ 4,000,000
2,000,000 State of Colorado General Fund Tax and
Revenue Anticipation Notes, Cash Flow
Management, Series 97-A
06-26-1998 3.85 2,002,948
1,000,000 Columbia, AL Industrial Development Board,
Pollution Control Revenue Bonds, Alabama
Power Co. Project D
(Daily Put, Daily Change)
10-01-2022 3.75 # 1,000,000
3,000,000 State of Connecticut, Special Assessment
Unemployment Compensation Advance Fund
Revenue Bonds, (Connecticut Unemployment
Revenue Bonds) 1993 Series C
07-01-1998 3.90 3,000,000
1,000,000 Cornell Township, MI Economic Development
Corporation Environmental Improvement
Revenue Bonds
(Daily Put, Daily Change)
11-01-2016 3.70 # 1,000,000
800,000 DeKalb 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 3.70 # 800,000
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 3.70 # 2,000,000
</TABLE>
See notes to combined financial statements
9
<PAGE> 12
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$1,000,000 Delaware State General Obligation Notes
05-01-1998 3.73% $ 1,002,464
3,200,000 Delaware Valley, PA Regional Finance
Authority Local Government Revenue Bonds
Series A
(7-Day Put, 7-Day Change)
12-01-2017 3.65 # 3,200,000
1,000,000 District of Columbia, Revenue Bonds,
The American University Issue, Series 1985A
(7-Day Put, 7-Day Change)
10-01-2015 3.75 # 1,000,000
1,095,000 District of Columbia, Revenue Bonds,
The American University Issue, Series 1986A
(7-Day Put, 7-Day Change)
12-01-2015 3.75 # 1,095,000
3,400,000 District of Columbia, Revenue Bonds,
Georgetown University Issue, Series 1988D
(7-Day Put, 7-Day Change)
04-01-2017 3.70 # 3,400,000
1,090,000 District of Columbia General Obligation
Revenue Refunding Bonds, Series B
(Pre-refunded to 06-01-1998 @ 101.5)
06-01-2005 3.85 1,111,396
1,800,000 District of Columbia General Obligation
Revenue Refunding Bonds, Series B
(Pre-refunded to 06-01-1998 @ 101.5)
06-01-2002 3.80 1,835,490
1,500,000 Farmington, NM Pollution Control Revenue
Bonds Arizona Public Service Company,
Series A
(Daily Put, Daily Change)
05-01-2024 3.75 # 1,500,000
1,230,000 Florida Housing Finance Agency--Reference
Multi-Family Housing EEE Carlton Project
(7-Day Put, 7-Day Change)
12-01-2008 3.75 # 1,230,000
</TABLE>
See notes to combined financial statements
10
<PAGE> 13
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$3,200,000 Florida Housing Finance Agency--Reference
Multi-Family Hillsboro, Series D
(7-Day Put, 7-Day Change)
12-01-2009 3.85%# $ 3,200,000
1,000,000 Greensboro, NC General Obligation Note
Public Improvements-Sewer Project, Series B
(7-Day Put, 7-Day Change)
04-01-2007 3.70 # 1,000,000
700,000 Hanover, MA Bond Anticipation Notes
05-28-1998 3.96 700,315
1,050,000 Harris County, TX General Obligation
Unlimited Highway Toll Revenue
Pre-refunding Bonds
(Pre-refunded to 08-01-1998 @ 102)
08-01-2015 3.825 1,085,427
1,000,000 Honolulu, HI City and County Tax-Exempt
Commercial Paper
08-13-1998 3.80 1,000,000
300,000 Illinois Health Facility Authority Hospital
Revenue Bonds, Sisters of Charity Project,
Series E
(7-Day Put, 7-Day Change)
12-01-2015 3.70 # 300,000
500,000 Illinois Health Facility Authority Hospital
Revenue Bonds, Decatur Memorial Hospital
Project A
(7-Day Put, 7-Day Change)
11-15-2024 3.70 # 500,000
2,000,000 Illinois Health Facility Authority Hospital
Revenue Bonds, Alexian Brothers Medical
Center Project D
(Mandatory Put 06-08-1998)
01-01-2005 3.60 2,000,000
1,800,000 Illinois State Toll Highway Authority,
Priority Revenue Bonds Series B
(7-Day Put, 7-Day Change)
01-01-2010 3.65 # 1,800,000
</TABLE>
See notes to combined financial statements
11
<PAGE> 14
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$2,000,000 Independence, MO Water Utility District
Revenue Bonds Water Utility Improvements
(Mandatory Put 04-01-1998)
11-01-2018 3.25% $ 2,000,000
2,000,000 Independence, MO Water Utility District
Revenue Bonds Water Utility Improvements
(Mandatory Put 05-01-1998)
11-01-2016 3.40 2,000,000
2,000,000 Indian River County, FL Hospital District
Revenue Bonds Sunhealth Network Project
1990
(Mandatory Put 06-01-1998)
10-01-2024 3.55 2,000,000
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 3.70 # 2,000,000
3,000,000 Intermountain Power Agency of Utah,
Electric Light and Power Improvements,
Power Supply Revenue Bonds Series 1985-E
(Mandatory Put 04-09-1998)
07-18-2019 3.20 3,000,000
1,500,000 Jacksonville, FL Electric Authority
Revenue Bonds Series C-1
06-09-1998 3.40 1,500,000
2,250,000 Jacksonville, FL Electric Authority
Revenue Bonds Series C-1
06-09-1998 3.45 2,250,000
5,000,000 Jefferson Parish, LA Hospital Service
District #001 Hospital Revenue Bonds,
Jefferson Medical Center
(7-Day Put, 7-Day Change)
01-01-2026 3.70 # 5,000,000
3,000,000 King County, WA Sewer System Revenue Notes
Series A, Commercial Paper
06-01-1998 3.50 3,000,000
</TABLE>
See notes to combined financial statements
12
<PAGE> 15
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$2,700,000 La Cygne, KS Environmental Improvement
Revenue Notes, Kansas City Power and Light
Co. Project
(7-Day Put, 7-Day Change)
03-01-2015 3.80%# $ 2,700,000
1,820,000 Las Vegas, NV General Obligation Notes
Sewer System Improvements
(Pre-refunded to 01-01-1999 @ 102)
01-01-2001 3.75 1,897,288
1,600,000 Lehigh County, PA General Purpose Authority
Revenue Bonds, Lehigh Valley Hospital
Series A
(Daily Put, Daily Change)
07-01-2028 3.70 # 1,600,000
200,000 Los Angeles, CA Regional Airport
Improvement Corporation Lease Revenue
Bonds, Los Angeles International Airport
Series 2
(Daily Put, Daily Change)
12-01-2025 3.75 # 200,000
1,500,000 Los Angeles, CA Regional Airport
Improvement Corporation Lease Revenue
Bonds, Los Angeles International Airport
Series A
(Daily Put, Daily Change)
12-01-2024 3.75 # 1,500,000
3,000,000 Los Angeles County, CA 1987-1998 Tax
Revenue Anticipation Notes, Series A, Cash
Flow Management
06-30-1998 3.85 3,004,629
3,100,000 Louisiana Public Facilities Authority,
Hospital Revenue Bonds, Lady of the Lake
Medical Center
(Mandatory Put 04-01-1998)
08-01-2012 3.45 3,100,000
1,000,000 Louisiana Public Facilities Authority,
Hospital Revenue CP Program
(7-Day Put, 7-Day Change)
12-01-2000 3.70 # 1,000,000
</TABLE>
See notes to combined financial statements
13
<PAGE> 16
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$ 450,000 Louisiana Public Facilities Authority,
Revenue Bonds--College & University
Equipment and Capital, Series A
(7-Day Put, 7-Day Change)
08-01-2010 3.70%# $ 450,000
1,900,000 Louisiana Public Facilities Authority,
Revenue Bonds--Sister of Charity Project
Series E
(7-Day Put, 7-Day Change)
07-01-2023 3.70 # 1,900,000
4,000,000 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 3.70 # 4,000,000
1,500,000 Louisiana State General Obligation
Unlimited, Refunding Bonds, Series A
08-01-1998 3.50 1,505,557
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 3.70 # 200,000
4,200,000 Maryland State Health and Higher Education
Facilities Authority Revenue Notes
(7-Day Put, 7-Day Change)
04-01-2035 3.65 # 4,200,000
650,000 Mason County, KY Pollution Control Revenue
Bonds, Kentucky Power-National Rural
Electric Project B-1
(7-Day Put, 7-Day Change)
10-15-2014 3.75 # 650,000
2,000,000 Massachusetts Bay Authority Tax Revenue
Anticipation Notes, Series C
04-09-1998 3.20 2,000,000
</TABLE>
See notes to combined financial statements
14
<PAGE> 17
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$1,560,000 Metropolitan Government of Nashville and
Davidson County, TN Electric Revenue Bonds
Series B
05-15-1998 3.80% $ 1,561,641
315,000 Michigan State Hospital Finance Authority
Revenue Bonds, Hospital Equipment Loan
Program
(7-Day Put, 7-Day Change)
06-01-2001 3.65 # 315,000
1,400,000 Michigan State Hospital Finance Authority
Revenue Bonds, Hospital Equipment Loan
Program
(7-Day Put, 7-Day Change)
12-01-2023 3.75 # 1,400,000
1,000,000 Michigan State Underground Storage Tank
Financial Assistance Corporation Notes
Series 1
(Mandatory Put 05-15-1998)
12-01-2004 3.25 1,000,000
2,200,000 Missouri State Environmental Improvement
and Energy Research Authority, Pollution
Control Revenue Bonds, Union Electric
Project Series A
(Mandatory Put 07-30-1998)
06-01-2015 3.45 2,200,000
1,000,000 Missouri State Environmental Improvement
and Energy Research Authority, Pollution
Control Revenue Bonds, Union Electric
Project Series A
(Mandatory Put 04-03-1998)
06-01-2015 3.35 1,000,000
700,000 Missouri State Environmental Improvement
and Energy Research Authority, Pollution
Control Revenue Bonds, National Rural
Project
(7-Day Put, 7-Day Change)
12-15-2003 3.75 # 700,000
</TABLE>
See notes to combined financial statements
15
<PAGE> 18
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$3,000,000 Moffat Country, CO Pollution Control
Revenue Bonds, Colorado-Ute Electric
Authority Project
(7-Day Put, 7-Day Change)
07-01-2010 3.75%# $ 3,000,000
2,000,000 Monroe County, GA Development Authority
Pollution Control Revenue Bonds, Georgia
Power Scherer Project First Series
(Daily Put, Daily Change)
07-01-2025 3.75 # 2,000,000
1,000,000 Municipal Electric Authority of Georgia,
Revenue Bonds Series A
(Mandatory Put 08-14-1998)
01-04-2009 3.55 1,000,000
2,000,000 Municipal Electric Authority of Georgia,
Revenue Bonds Project One, Series 1994 D
(7-Day Put, 7-Day Change)
01-01-2022 3.70 # 2,000,000
1,100,000 National Rural Utilities Authority,
Industrial Development Board of the Town of
Chatom, AL
Alabama Electric Co-Op Project
(Mandatory Put 09-11-1998)
03-01-2008 3.55 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 3.70 # 2,000,000
1,000,000 New Jersey State Highway Authority, Garden
State Parkway Toll Revenue Bonds
(Pre-refunded to 01-01-1999 @ 102)
01-01-2004 3.53 1,046,993
2,000,000 New Jersey State Tax Revenue Anticipation
Notes Series 1998 A
04-01-1998 3.35 2,000,000
</TABLE>
See notes to combined financial statements
16
<PAGE> 19
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$ 350,000 New Mexico State Hospital Equipment
Revenue Bonds
(7-Day Put, 7-Day Change)
05-01-2009 3.60%# $ 350,000
2,500,000 New York City General Obligation Bonds
Subseries 1996-J3
(Mandatory Put 04-07-1998)
02-15-2016 3.75 2,500,000
3,000,000 New York City General Obligation Series
1995 B-9
(Mandatory Put 04-07-1998)
08-15-2023 3.15 3,000,000
1,000,000 New York, NY Municipal Water Finance
Authority Water and Sewer System Revenue
Notes
(Daily Put, Daily Change)
06-15-2025 4.00 # 1,000,000
3,000,000 New York State Environmental Quality
Authority Revenue Bonds, Series 1997-A
06-11-1998 3.40 3,000,000
1,280,000 Omaha, NE General Obligation Bonds, Public
Improvement Projects
12-15-1998 3.80 1,286,149
2,500,000 Orange County, FL Health Facilities
Authority Revenue Bonds, Pooled Hospital
Loan Program, Series 1985
(Mandatory Put 04-02-1998)
12-01-2025 3.40 2,500,000
2,000,000 Otero County, CO Industrial Development
Authority Citizens Utilities Refunding
Bonds
(Mandatory Put 08-13-1998)
08-01-2020 3.55 2,000,000
740,000 Pennsylvania Infrastructure Investment
Authority Revenue Bonds, Water Utility
Improvements
09-01-1998 3.70 741,194
</TABLE>
See notes to combined financial statements
17
<PAGE> 20
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$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 3.80%# $ 1,000,000
1,500,000 Platte River Power Authority, CO Electrical
Power and Light Revenue Bonds, Series S-1
(Mandatory Put 08-10-1998)
06-01-2018 3.50 1,500,000
1,100,000 Port of Portland, OR Pollution Control
Revenue Bonds Industrial Refunding of
Reynold Metals Project
(Daily Put, Daily Change)
12-01-2009 3.75 # 1,100,000
2,000,000 Racine, WI Unified School District Tax
Revenue Anticipation Notes, Cash Flow
Management
08-24-1998 3.85 2,003,045
1,450,000 Rochester, MN Health Care Facilities
Revenue Bonds, Mayo Foundation/Mayo Medical
Center Series 88-F
(Mandatory Put 04-01-1998)
11-15-2017 3.10 1,450,000
3,000,000 Rockport, IN Pollution Control Revenue
Notes Indiana-Michigan Power
Company-Project B
(7-Day Put, 7-Day Change)
06-01-2025 3.65 # 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 3.70 # 1,000,000
1,600,000 Seattle, WA Municipal Light & Power Revenue
Bonds
(7-Day Put, 7-Day Change)
11-01-2018 3.65 # 1,600,000
500,000 Seattle, WA Water System Revenue Bonds
(7-Day Put, 7-Day Change)
09-01-2025 3.65 # 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, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$2,200,000 Port of Seattle, Washington General
Obligation Bonds
(7-Day Put, 7-Day Change)
01-01-2005 3.65%# $ 2,200,000
3,020,000 Port of Seattle, Washington General
Obligation Bonds
04-01-1998 3.45 3,020,000
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 3.80 # 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 3.80 # 50,000
1,705,000 Tarrant County, TX Housing Finance
Corporation Revenue Bonds, Multi-Family
Housing-SF Apartments
(7-Day Put, 7-Day Change)
11-01-2017 3.75 # 1,705,000
3,000,000 Tennessee State School Bond Authority
Higher Education Improvements, Series A
04-08-1998 3.35 3,000,000
2,000,000 Tennessee State School Bond Authority
Higher Education Improvements, Series A
08-27-1998 3.50 2,000,000
700,000 Texas Higher Education Authority, Inc.
Series B
(7-Day Put, 7-Day Change)
12-01-2025 3.70 # 700,000
960,000 Texas Hospital Equipment Financing
Authority Revenue Bonds
(7-Day Put, 7-Day Change)
04-07-2005 4.20 # 960,000
</TABLE>
See notes to combined financial statements
19
<PAGE> 22
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (CONTINUED)
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
DESCRIPTION OF BOND ANNUALIZED VALUE
PRINCIPAL YIELD ON DATE
AMOUNT OF PURCHASE
<C> <S> <C> <C>
$2,000,000 Topeka, KS General Obligation Temporary
Notes Cash Flow Management Series A
07-15-1998 3.75% $ 2,001,391
1,200,000 University of North Carolina School of
Medicine and Ambulatory Care Clinic Revenue
Bonds
(7-Day Put, 7-Day Change)
07-01-2012 3.75 # 1,200,000
2,000,000 Virginia Commonwealth Instrumentality Notes
Series 1997
04-01-1998 3.60 2,000,000
1,100,000 Virginia Commonwealth Instrumentality Notes
Series 1997
05-27-1998 3.40 1,100,000
1,380,000 West Allis, WI Unlimited Refunding Bonds
Series C
06-01-1998 3.50 1,381,497
2,100,000 Wisconsin Health & Educational Facilities
Authority, Revenue ACES, Health Care
Project A
(7-Day Put, 7-Day Change)
06-01-2006 3.65 # 2,100,000
2,512,000 Wisconsin State Transportation Revenue
Notes Series 1997-A
04-07-1998 3.65 2,512,000
------------
TOTAL INVESTMENTS
(Cost $200,444,424)............. 99.20% $200,444,424
Cash and Receivables, Less
Payables (net).................. 0.80% 1,607,003
----- -----------
Net Assets...................... 100.00% $202,051,427
====== ============
</TABLE>
- ---------------
Notes: #--Variable Rate Instruments Reflect Rate as of 03-31-1998
93.8% of the investment values above are supported by Letters of Credit,
guarantees or other credit enhancements.
See notes to combined financial statements
20
<PAGE> 23
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1998
(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) $1,500,811,092 $200,444,424
Cash 963,204 742,520
Interest receivable 9,092,102 1,159,693
Prepaid expenses 102,293 30,589
---------------- ---------------
TOTAL ASSETS 1,510,968,691 202,377,226
---------------- ---------------
LIABILITIES
648,023 71,143
Due to investment manager - Note B
502,898 53,282
Accrued expenses
Dividends payable 2,429,294 201,374
---------------- ---------------
TOTAL LIABILITIES 3,580,215 325,799
---------------- ---------------
NET ASSETS $1,507,388,476 $202,051,427
================ ===============
Represented By:
$1,509,032,817 $202,069,969
Paid-in capital
(1,644,341) (18,542)
Accumulated net realized loss on investments
---------------- ---------------
NET ASSETS AT VALUE, applicable to
1,509,032,817 outstanding shares of $.01 par
value Common Stock for SRF and 202,069,969
outstanding shares of $.001 par value Common
Stock for STE (2,000,000,000 and $1,507,388,476 $202,051,427
1,000,000,000 shares authorized for SRF and
STE, respectively)
================ ===============
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, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
<S> <C> <C>
INVESTMENT INCOME
Interest income $39,742,291 $3,436,487
-------------- --------------
EXPENSES
Investment management fee - Note B 3,486,727 475,743
Shareholder servicing costs and custodian fee 882,268 70,385
Federal and State registration fees 88,532 28,476
Professional fees 25,431 19,945
Directors' fees and expenses - Note B 12,465 12,465
Prospectus and shareholders' reports 77,316 4,987
Miscellaneous 41,088 7,009
-------------- --------------
Total Expenses 4,613,827 619,010
Less: Investment management fee
waived - Note B -- (95,149)
-------------- --------------
Net Expenses 4,613,827 523,861
-------------- --------------
Investment Income - net 35,128,464 2,912,626
Net realized gain on investments 50,536 --
-------------- --------------
Net Increase in Net Assets Resulting From
Operations $35,179,000 $2,912,626
============== ==============
</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 YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
1998 1997 1998 1997
--------------- -------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
--------------- -------------- ------------- -------------
OPERATIONS
Investment
income - net $ 35,128,464 $ 60,027,267 $ 2,912,626 $ 5,554,691
Net realized gain on
investments 50,536 70,086 -- --
-------------- ------------- ------------ ------------
Net increase in net
assets resulting
from operations 35,179,000 60,097,353 2,912,626 5,554,691
DIVIDENDS TO
SHAREHOLDERS FROM
Investment
income - net (35,128,464) (60,027,267) (2,912,626) (5,554,691)
COMMON STOCK
TRANSACTIONS
(NET) - NOTE C 169,871,155 235,452,289 14,838,353 16,157,580
-------------- ------------- ------------ ------------
Total increase in net
assets 169,921,691 235,522,375 14,838,353 16,157,580
NET ASSETS
Beginning of period 1,337,466,785 1,101,944,410 187,213,074 171,055,494
-------------- ------------- ------------ ------------
End of period $1,507,388,476 $1,337,466,785 $202,051,427 $187,213,074
============== ============== ============ ============
</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. On
February 22, 1998, Cowen entered into an agreement with Societe Generale ("SG")
to sell Cowen's business to SG (the "Acquisition"). SG is a leading
international commercial and investment bank based in France. Under the terms of
the Acquisition, Cowen's business will be combined with Societe Generale
Securities Corporation, a subsidiary of SG, to form SG Cowen Securities
Corporation ("SG Cowen"). A division or affiliate of SG Cowen will serve as the
new investment manager to the Funds after the Acquisition. 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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(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, 1998, 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, 1997, SRF and STE had unused capital loss carryovers of
approximately $1,695,000 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
24
<PAGE> 27
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
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 $95,149 of its Investment Management Fee from STE during the
six months ended March 31, 1998.
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
each audit committee attended and reimbursement for travel and out-of-pocket
expenses.
NOTE C - COMMON STOCK TRANSACTIONS: At March 31, 1998, 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
-----------------------------------------------------------
YEAR
SIX MONTHS ENDED
ENDED SEPTEMBER 30,
MARCH 31, 1998 1997
<S> <C> <C>
------------------ ------------------
Shares sold $3,386,585 $6,044,992
Dividends reinvested 33,525 57,167
------------- -------------
3,420,110 6,102,159
Shares redeemed (3,250,239) (5,866,707)
------------- -------------
Net increase $ 169,871 $ 235,452
============= =============
</TABLE>
<TABLE>
<CAPTION>
STE
-----------------------------------------------------------
YEAR
SIX MONTHS ENDED
ENDED SEPTEMBER 30,
MARCH 31, 1998 1997
<S> <C> <C>
------------------ ------------------
Shares sold $ 406,529 $ 786,951
Dividends reinvested 2,824 5,356
------------ ------------
409,353 792,307
Shares redeemed (394,515) (776,149)
------------ ------------
Net increase $ 14,838 $ 16,158
============ ============
</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 period:
<TABLE>
<CAPTION>
SRF
SIX MONTHS --------------------------------------------------------------
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, --------------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------------- ----------- ----------- --------- --------- ---------
(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 0.03 0.05 0.05 0.05 0.03 0.03
LESS DISTRIBUTIONS
Dividends from Net
Investment Income (0.03) (0.05) (0.05) (0.05) (0.03) (0.03)
---------- ---------- ---------- -------- -------- --------
NET ASSET VALUE
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ======== ======== ========
Total Return 5.08%(1) 4.98% 4.97% 5.23% 3.14% 3.07%
RATIOS/SUPPLEMENTAL DATA
Net Assets (000
omitted) $1,507,388 $1,337,467 $1,101,944 $890,888 $692,609 $682,379
Ratio of Expenses to
Average Net Assets 0.66%(1) 0.69% 0.71% 0.71% 0.64% 0.68%
Ratio of Net Investment
Income to Average Net
Assets 5.04%(1) 4.89% 4.89% 5.13% 3.11% 3.00%
</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>
STE
SIX MONTHS ----------------------------------------------------------
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, ----------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------------- --------- --------- --------- --------- ---------
(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 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Dividends from Net
Investment Income (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
---------- -------- -------- -------- -------- --------
NET ASSET VALUE
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======== ======== ========
Total Return 3.08%(1) 3.11% 3.07% 3.19% 2.11% 2.03%
RATIOS/SUPPLEMENTAL DATA
Net Assets (000 omitted) $ 202,051 $187,213 $171,055 $122,536 $120,704 $116,618
Ratio of Expenses to
Average Net Assets* 0.55%(1) 0.56% 0.59% 0.61% 0.58% 0.62%
Ratio of Net Investment
Income to Average Net
Assets* 3.07%(1) 3.07% 3.01% 3.14% 2.03% 1.99%
INVESTMENT ADVISORY FEES
WAIVED
Amount $ 95,149 $181,100 $156,993 $124,784 $130,483 $119,582
Ratio to Average Net Assets 0.10% 0.10% 0.10% 0.10% 0.10% 0.10%
*NET OF WAIVER
</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 Investors Fiduciary Trust Company
Cowen & Company P.O. Box 419111
Financial Square Kansas City, MO 64141
New York, NY 10005
LEGAL COUNSEL TRANSFER AGENT
Willkie Farr & Gallagher DST, Inc.
One Citicorp Center 210 West 10th Street
153 East 53rd Street Kansas City, MO 64105
New York, NY 10022
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
</TABLE>
CMB-RSRV-SEMI
