ANNUAL REPORT AS OF
JUNE 30, 1998
SEI LIQUID
ASSET TRUST
================================================================================
Treasury Securities Portfolio
================================================================================
Government Securities Portfolio
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Prime Obligation Portfolio
================================================================================
SEI INVESTMENTS
THE ART OF PEOPLE.
THE SCIENCE OF RESULTS.
<PAGE>
TABLE OF CONTENTS
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LETTER TO SHAREHOLDERS ................................................. 1
STATEMENT OF NET ASSETS ................................................ 2
STATEMENT OF OPERATIONS ................................................ 6
STATEMENT OF CHANGES IN NET ASSETS ..................................... 7
FINANCIAL HIGHLIGHTS ................................................... 8
NOTES TO FINANCIAL STATEMENTS .......................................... 9
REPORT OF INDEPENDENT ACCOUNTANTS ...................................... 11
NOTICE TO SHAREHOLDERS ................................................. 12
<PAGE>
LETTER TO SHAREHOLDERS
================================================================================
TO OUR SHAREHOLDERS:
The Federal Reserve opened the Trust's fiscal year by maintaining interest
rates, as expected. Economic growth was stronger than expected, however further
gains were not perceived. This growth translated into a strengthening fiscal
policy and plans to reduce the deficit, yet inflationary presssures remained
subdued. Technical pressures, which included total money fund assets piercing
the $1 trillion level, helped push yields on treasury bills lower by the end of
the quarter. As expectations of further action by the Federal Reserve eased, the
money market yield curve flattened to the targeted Fed Funds level of 5.50%.
While the U.S. economy ended 1997 on a positive note, with low inflation,
continued strong fiscal policy and a strong dollar, it was the activity in Asia
that dominated the markets. Two factors effected the money markets: the unknown
degree the Asian financial crisis would flow into the domestic markets and the
action of foreign central banks selling treasury bills in order to fund currency
activity. Both actions served to increase short-term rates, permitting the Fed
to refrain from tightening fiscal policy to slow growth, while the long end of
the yield curve benefited from the flight to quality. Generally, the investment
advisor, Wellington Management Company LLP, structured the SEI Liquid Asset
Trust portfolios with an eye on the technical effects of an improving economy
paying down debt as well as focusing on the flatness of the yield curve, which
required discipline in selecting opportunities to extend.
As the uncertainty over the Asian crisis seemed to pass, the U.S. economy
rebounded and interest rates fell to the lowest levels in twenty years. The
yield on the one year Treasury bill fell to 5.10% in early January, before a
reversal began. This increase was a function of diminished concerns over
inflation, the reversal of the flight to quality as worldwide sentiment
generally improved, and corporate issuers tapping the debt markets given the
absolute low level of interest rates and the threat of inflationary pressures
re-appearing. With the increase in longer maturity money market yields, some
extension was undertaken.
It was not until well into the second quarter of 1998 that fallout from Asia
began to slow the U.S. economy. Fears of inflation diminished once again as
exports decreased, corporate earnings gave indications of slowing and consumer
confidence fell, not to mention a weakening manufacturing sector and the lowest
unemployment rate in twenty years. The Liquid Asset Trust portfolios have
maintained maturities toward the longer end of their respective targets. Near
term expectations are for unchanged monetary policy as participants continue to
monitor the overall effect of the Asian impact.
As in the past, Wellington Management will continue to seek our prudent
investment opportunities which provide our investors with the competitive yields
they have come to expect. We look forward to serving your investment needs, and
we appreciate your continued confidence in the SEI Liquid Asset Trust.
Sincerely,
/S/Signature
Edward D. Loughlin
President and Chief Executive Officer
SEI Liquid Asset Trust
1
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
SEI LIQUID ASSET TRUST -- JUNE 30, 1998
TREASURY SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 25.7%
U.S. Treasury Notes
6.000%, 09/30/98 $ 13,000 $ 13,007
5.875%, 10/31/98 30,000 30,017
5.125%, 12/31/98 14,000 13,960
5.750%, 12/31/98 14,000 14,002
5.875%, 03/31/99 11,000 11,031
6.250%, 03/31/99 37,000 37,201
6.375%, 04/30/99 26,000 26,171
6.000%, 06/30/99 10,000 10,048
--------
Total U.S. Treasury Obligations
(Cost $155,437) 155,437
--------
REPURCHASE AGREEMENTS -- 74.5%
Lehman Brothers, Inc. (A)
5.75%, dated 06/30/98, matures
07/01/98, repurchase price
$99,933,959 (collateralized by
U.S. Treasury STRIPS, ranging
in par value $3,910,000-
$50,000,000, 02/15/14-11/15/18;
with total market value
$102,698,340) 99,918 99,918
Morgan Stanley (A)
5.68%, dated 06/30/98, matures
07/01/98, repurchase price
$50,008,889 (collateralized by
U.S. Treasury Notes ranging
in par value $11,740,000-
$38,425,000, 8/15/99-10/31/00,
\ 5.750%-6.00%; with total market
value $51,017,128) 50,000 50,000
Salomon Brothers (A)
5.90%, dated 06/30/98, matures
07/01/98, repurchase price
$35,005,736 (collateralized by
U.S. Treasury Notes ranging
in par value $5,137,000-
$7,690,000, 08/31/99-02/15/03,
5.625%- 6.875%; with total
market value $43,442,749) 35,000 35,000
Swiss Bank (A)
5.87%, dated 06/30/98, matures
07/01/98, repurchase price
$145,023,643 (collateralized
by U.S. Treasury Bonds,
ranging in par value
$27,463,000-$35,000,000,
11/15/15-08/15/23, 6.25%- 9.875%;
with total market
value $152,731,419) 145,000 145,000
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Goldman Sachs Co. (A)
5.80%, dated 06/30/98, matures
07/01/98, repurchase price
$120,019,333 (collateralized by
U.S. Treasury Note, par value
$120,148,000, 05/15/08, 5.625%;
with total market value
$122,400,805) $120,000 $120,000
--------
Total Repurchase Agreements
(Cost $449,918) 449,918
--------
Total Investments -- 100.2%
(Cost $605,355) 605,355
--------
OTHER ASSETS AND LIABILITIES, NET -- (0.2%) (1,334)
--------
NET ASSETS:
Portfolio Shares of Class A (unlimited
authorization -- no par value) based
on 603,790,325 outstanding shares of
beneficial interest 603,790
Portfolio Shares of Class D (unlimited
authorization -- no par value) based
on 237,466 outstanding shares of
beneficial interest 237
Undistributed net investment income 246
Accumulated net realized loss
on investments (252)
--------
Total Net Assets -- 100.0% $604,021
========
Net Asset Value, Offering and Redemption
Price Per Share -- Class A $1.00
========
Net Asset Value, Offering and Redemption
Price Per Share -- Class D $1.00
========
(A) TRI-PARTY REPURCHASE AGREEMENT
STRIPS -- SEPARATE TRADING OF REGISTERED INTEREST AND
PRINCIPAL OF SECURITIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
2
<PAGE>
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GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 51.1%
FHLMC
5.450%, 07/20/98 $10,000 $ 9,971
FNMA
5.370%, 08/12/98 2,400 2,399
5.548%, 08/18/98 4,000 3,972
FNMA (A)
5.311%, 07/07/98 22,000 22,000
SLMA (A)
5.321%, 07/07/98 15,400 15,400
--------
Total U.S. Government Agency Obligations
(Cost $53,742) 53,742
--------
U.S. TREASURY OBLIGATIONS -- 23.4%
United States Treasury Bill
5.000%, 10/01/98 25,000 24,684
--------
Total U.S. Treasury Obligations
(Cost $24,684) 24,684
--------
REPURCHASE AGREEMENTS -- 49.2%
Goldman Sachs (B)
5.90%, dated 06/30/98, matures
07/01/98, repurchase price
$20,003,278 (collateralized by
FHLMC, par value $26,447,671,
08/01/26, 7.500%; with total
market value $20,400,000) 20,000 20,000
Lehman Brothers (B)
5.80%, dated 06/30/98, matures
07/01/98, repurchase price
$4,600,741 (collateralized by
U.S. Treasury Note, par value
$4,550,000, 08/15/00, 6.000%;
with total market value
$4,693,033) 4,600 4,600
Lehman Brothers (B)
5.75%, dated 06/30/98, matures
07/01/98, repurchase price
$12,140,939 (collateralized by
U.S. Treasury STRIPS, par value
$30,531,000, 02/15/14;
with total market value
$12,494,201) 12,139 12,139
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Morgan Stanley (B)
6.00%, dated 06/30/98, matures
07/01/98, repurchase price
$15,002,500 (collateralized by
FNMA obligations ranging in
par value $265,954-$10,000,000,
6.000%-6.500%, 10/01/00-03/01/18;
with total market
value $15,431,788) $15,000 $ 15,000
--------
Total Repurchase Agreements
(Cost $51,739) 51,739
--------
Total Investments -- 123.7%
(Cost $130,165) 130,165
--------
OTHER ASSETS AND LIABILITIES, NET -- (23.7%) (24,964)
--------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 105,220,502 outstanding
shares of beneficial interest 105,221
Overdistributed net investment income (5)
Accumulated net realized loss
on investments (15)
--------
Total Net Assets -- 100.0% $105,201
========
Net Asset Value, Offering and Redemption
Price Per Share $1.00
========
(A) VARIABLE RATE INSTRUMENT. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1998. THE MATURITY DATE SHOWN IS THE RESET
DATE.
(B) TRI-PARTY REPURCHASE AGREEMENT
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
STRIPS -- SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
3
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
SEI LIQUID ASSET TRUST -- JUNE 30, 1998
PRIME OBLIGATION PORTFOLIO
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER -- 68.3%
BANKS -- 4.1%
Bank of New York
5.560%, 07/10/98 $15,000 $ 14,979
5.550%, 09/21/98 5,000 4,937
Government Development Bank
of Puerto Rico
5.540%, 08/11/98 14,320 14,230
NationsBank of North America
5.440%, 07/07/98 5,000 4,996
--------
39,142
--------
COMMUNICATIONS & ELECTRONICS -- 1.4%
Hubbell Incorporated
6.250%, 07/01/98 8,000 8,000
Tribune Company
5.600%, 09/10/98 4,800 4,747
--------
12,747
--------
FINANCIAL SERVICES -- 60.1%
Aesop Funding Corporation
5.550%, 07/23/98 7,100 7,076
5.540%, 07/24/98 20,000 19,929
Aon Corporation
5.560%, 08/03/98 10,000 9,949
5.580%, 08/04/98 5,000 4,974
5.570%, 08/17/98 14,284 14,180
Avon Capital
5.650%, 07/06/98 13,050 13,040
5.680%, 07/08/98 15,000 14,983
Bear Stearns Company
5.530%, 07/22/98 30,000 29,903
Centric Capital Corporation
5.510%, 07/06/98 5,000 4,996
5.580%, 08/03/98 15,000 14,923
5.570%, 08/17/98 9,935 9,863
Ciesco LP
5.570%, 07/14/98 10,000 9,980
Cigna Corporation
5.580%, 07/31/98 15,000 14,930
Commoloco
5.520%, 10/30/98 10,000 9,815
Corporate Asset Funding
5.560%, 07/16/98 10,000 9,977
5.580%, 08/26/98 20,000 19,826
Corporate Receivable
Corporation
5.570%, 07/16/98 10,700 10,675
5.580%, 07/28/98 15,000 14,937
Delaware Funding Corporation
5.570%, 07/15/98 17,800 17,761
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Enterprise Funding Corporation
5.500%, 07/13/98 $ 7,673 $ 7,659
5.550%, 07/15/98 5,290 5,279
5.560%, 07/15/98 5,000 4,989
5.580%, 08/28/98 10,700 10,604
5.550%, 08/31/98 2,024 2,005
Falcon Asset Securitization
5.600%, 07/07/98 22,525 22,504
5.550%, 09/21/98 7,180 7,089
Fleet Funding
5.560%, 07/10/98 11,379 11,363
General Electric Capital
Corporation
5.530%, 07/15/98 10,000 9,979
Island Finance of Puerto Rico
5.490%, 07/22/98 5,700 5,682
5.570%, 08/04/98 4,500 4,476
5.520%, 08/10/98 20,000 19,877
Kitty Hawk Funding
5.560%, 07/17/98 5,004 4,992
5.560%, 07/30/98 7,000 6,969
5.530%, 08/04/98 5,000 4,974
5.540%, 08/07/98 4,200 4,176
5.540%, 01/15/99 7,866 7,626
Merrill Lynch
5.540%, 07/31/98 22,000 21,898
Morgan Stanley Dean Witter
& Company
5.540%, 07/15/98 10,000 9,979
Park Avenue Receivable
5.530%, 07/08/98 6,010 6,004
5.550%, 07/10/98 4,133 4,127
5.530%, 07/13/98 8,000 7,985
5.550%, 07/17/98 10,000 9,975
Peacock Funding
5.750%, 07/10/98 1,296 1,294
5.500%, 07/15/98 10,117 10,095
5.600%, 08/10/98 1,198 1,191
5.520%, 11/09/98 10,000 9,799
Prefco
5.570%, 08/13/98 20,000 19,867
5.590%, 08/20/98 2,845 2,823
5.570%, 08/24/98 2,625 2,603
5.560%, 10/05/98 7,500 7,389
Private Export Funding
5.380%, 08/03/98 8,000 7,961
Prudential Funding
5.470%, 08/12/98 10,000 9,936
5.390%, 08/19/98 15,000 14,890
Ranger Funding
5.540%, 07/20/98 15,000 14,956
5.530%, 07/23/98 10,000 9,966
5.550%, 07/23/98 5,000 4,983
--------
569,681
--------
4
<PAGE>
================================================================================
PRIME OBLIGATION PORTFOLIO (CONTINUED)
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 2.7%
Archer-Daniels-Midland
5.600%, 08/12/98 $10,000 $ 9,935
Coca-Cola Enterprises
6.300%, 07/01/98 15,500 15,500
--------
25,435
--------
Total Commercial Paper
(Cost $647,005) 647,005
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 4.8%
FNMA (A)
5.311%, 07/07/98 30,000 30,000
SLMA (A)
5.332%, 07/07/98 15,000 15,001
--------
Total U.S. Government Agency Obligations
(Cost $45,001) 45,001
--------
CERTIFICATES OF DEPOSIT -- 12.4%
Bank of America
5.630%, 02/26/99 15,000 14,996
BankBoston
5.690%, 07/06/98 15,000 15,000
Bankers Trust Delaware
6.010%, 12/10/98 10,000 10,009
Bankers Trust New York
5.680%, 03/09/99 20,000 19,990
First National Bank of Chicago
5.740%, 05/07/99 10,000 9,995
Key Bank of North America
5.900%, 09/17/98 10,000 9,998
Regions Bank
5.770%, 05/21/99 15,000 14,996
Wilmington Trust
5.610%, 07/09/98 5,000 5,000
5.610%, 07/10/98 10,000 10,000
5.900%, 04/30/99 7,000 7,000
--------
Total Certificates Of Deposit
(Cost $116,984) 116,984
--------
FLOATING RATE INSTRUMENTS -- 12.5%
Allstate (A)
5.755%, 07/01/98 10,000 10,000
Asset Backed Securities
Investors Trust 97-E (A)
5.656%, 07/15/98 13,700 13,700
Comerica Bank (A)
5.553%, 09/10/98 17,000 16,989
People's Security (A)
5.820%, 08/03/98 25,000 25,000
- --------------------------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
PNC Bank N.A. (A)
5.600%, 09/23/98 $20,000 $ 19,997
Smm Trust 98-L (A)
5.668%, 07/29/98 10,000 10,000
Travelers Insurance (A)
5.738%, 07/01/98 19,000 19,000
5.738%, 09/01/98 4,000 4,000
--------
Total Floating Rate Instruments
(Cost $118,686) 118,686
--------
CORPORATE BONDS -- 2.1%
Associates Corporation of
North America
6.500%, 09/09/98 15,000 15,026
General Motors Acceptance
Corporation
5.950%, 07/16/98 5,000 5,001
--------
Total Corporate Bonds
(Cost $20,027) 20,027
--------
Total Investments -- 100.1%
(Cost $947,703) 947,703
--------
OTHER ASSETS AND LIABILITIES, NET -- (0.1%) (549)
--------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 947,178,265 outstanding
shares of beneficial interest 947,178
Undistributed net investment income 53
Accumulated net realized loss
on investments (77)
--------
Total Net Assets -- 100.0% $947,154
========
Net Asset Value, Offering and Redemption
Price Per Share $1.00
========
(A) VARIABLE RATE INSTRUMENT. THE RATE REFLECTED ON THE STATEMENT OF
NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1998. THE MATURITY DATE
SHOWN IS THE RESET DATE.
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (000)
====================================================================================================================================
SEI LIQUID ASSET TRUST -- FOR THE YEAR ENDED JUNE 30, 1998
------------ ------------ ------------
TREASURY GOVERNMENT PRIME
SECURITIES SECURITIES OBLIGATION
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
<S> <C> <C> <C>
Interest Income $38,123 $7,212 $53,297
------- ------ -------
EXPENSES:
Management fee 2,855 547 3,922
Less: management fees waived (271) (51) (338)
Investment advisory fee 243 47 334
Shareholder servicing fee -- Class A 1,699 325 2,334
Less: shareholder servicing fee waived -- Class A (1,699) (325) (2,334)
Distribution fee -- Class D 1 -- --
Less: distribution fee waived -- Class D -- -- --
Custodian/wire agent fees 62 15 82
Professional fees 31 9 37
Trustee fees 12 1 13
Printing 16 1 5
Insurance 3 1 2
Other fees 33 3 38
------- ------ -------
Total net expenses 2,985 573 4,095
------- ------ -------
NET INVESTMENT INCOME 35,138 6,639 49,202
------- ------ -------
Net realized gain from security transactions 17 20 28
------- ------ -------
NET INCREASE IN NET ASSETS FROM OPERATIONS $35,155 $6,659 $49,230
======= ====== =======
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (000)
====================================================================================================================================
SEI LIQUID ASSET TRUST -- FOR THE YEAR ENDED JUNE 30,
------------------------- ---------------------- ------------------------
TREASURY GOVERNMENT PRIME
SECURITIES SECURITIES OBLIGATION
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------- ---------------------- ------------------------
1998 1997 1998 1997 1998 1997
------------------------- ---------------------- ------------------------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 35,138 $ 36,212 $ 6,639 $ 8,541 $ 49,202 $ 41,823
Net realized gain (loss) from security
transactions 17 (121) 20 -- 28 (40)
----------- ----------- ----------- --------- ----------- -----------
Net increase in net assets resulting
from operations 35,155 36,091 6,659 8,541 49,230 41,783
----------- ----------- ----------- --------- ----------- -----------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class A (35,126) (36,201) (6,640) (8,541) (49,204) (41,821)
Class D (12) (11) -- -- -- --
----------- ----------- ----------- --------- ----------- -----------
Total dividends distributed (35,138) (36,212) (6,640) (8,541) (49,204) (41,821)
----------- ----------- ----------- --------- ----------- -----------
CAPITAL SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE):
Class A:
Proceeds from shares issued 4,401,155 4,199,778 1,048,069 830,772 7,116,598 6,067,983
Reinvestment of cash distributions 858 663 1,352 818 14,097 10,339
Cost of shares redeemed (4,504,478) (4,326,481) (1,092,845) (852,117) (7,006,837) (6,002,866)
----------- ----------- ----------- --------- ----------- -----------
Increase (decrease) in net assets derived from
Class A transactions (102,465) (126,040) (43,424) (20,527) 123,858 75,456
----------- ----------- ----------- --------- ----------- -----------
Class D:
Proceeds from shares issued 90 230 -- -- -- --
Reinvestment of cash distributions 11 10 -- -- -- --
Cost of shares redeemed (80) (243) -- -- -- --
----------- ----------- ----------- --------- ----------- -----------
Increase (decrease) in net assets derived
from Class D transactions 21 (3) -- -- -- --
----------- ----------- ----------- --------- ----------- -----------
Net increase (decrease) in net assets derived
from capital share transactions (102,444) (126,043) (43,424) (20,527) 123,858 75,456
----------- ----------- ----------- --------- ----------- -----------
Net increase (decrease) in net assets (102,427) (126,164) (43,405) (20,527) 123,884 75,418
----------- ----------- ----------- --------- ----------- -----------
NET ASSETS:
Beginning of Period 706,448 832,612 148,606 169,133 823,270 747,852
----------- ----------- ----------- --------- ----------- -----------
End of Period $ 604,021 $ 706,448 $ 105,201 $ 148,606 $ 947,154 $ 823,270
=========== =========== =========== ========= =========== ===========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
===========================================================================================================================
SEI LIQUID ASSET TRUST -- FOR THE YEARS ENDED JUNE 30,
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
REALIZED
NET ASSET AND DISTRIBUTIONS DISTRIBUTIONS
VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS
BEGINNING INVESTMENT GAINS ON INVESTMENT REALIZED CAPITAL VALUE END TOTAL END OF
OF PERIOD INCOME SECURITIES INCOME GAINS OF PERIOD RETURN PERIOD (000)
==========================================================================================================================
- -------------------
TREASURY SECURITIES
- -------------------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $1.00 $0.05 -- $(0.05) -- $1.00 5.29% $ 603,783
1997 1.00 0.05 -- (0.05) -- 1.00 5.10 706,232
1996 1.00 0.05 -- (0.05) -- 1.00 5.37 832,393
1995 1.00 0.05 -- (0.05) -- 1.00 5.05 1,254,888
1994 1.00 0.03 -- (0.03) -- 1.00 3.00 1,501,510
CLASS D
1998 $1.00 $0.05 -- $(0.05) -- $1.00 4.92% $ 238
1997 1.00 0.05 -- (0.05) -- 1.00 4.73 216
1996 1.00 0.05 -- (0.05) -- 1.00 5.01 219
1995 1.00 0.05 -- (0.05) -- 1.00 4.69 9,798
1994(1) 1.00 0.01 -- (0.01) -- 1.00 0.50** 23
- ---------------------
GOVERNMENT SECURITIES
- ---------------------
CLASS A
1998 $1.00 $0.05 -- $(0.05) -- $1.00 5.21% $ 105,201
1997 1.00 0.05 -- (0.05) -- 1.00 5.09 148,606
1996 1.00 0.05 -- (0.05) -- 1.00 5.30 169,133
1995 1.00 0.05 -- (0.05) -- 1.00 5.18 200,768
1994 1.00 0.03 -- (0.03) -- 1.00 3.04 255,554
- ----------------
PRIME OBLIGATION
- ----------------
CLASS A
1998 $1.00 $0.05 -- $(0.05) -- $1.00 5.40% $ 947,154
1997 1.00 0.05 -- (0.05) -- 1.00 5.20 823,270
1996 1.00 0.05 -- (0.05) -- 1.00 5.39 747,852
1995 1.00 0.05 -- (0.05) -- 1.00 5.20 940,863
1994 1.00 0.03 -- (0.03) -- 1.00 3.08 918,509
RATIO OF
RATIO OF NET INVESTMENT
RATIO OF EXPENSES INCOME
RATIO OF NET INVESTMENT TO AVERAGE TO AVERAGE
EXPENSES INCOME NET ASSETS NET ASSETS
TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
NET ASSETS NET ASSETS WAIVERS) WAIVERS)
=====================================================================
- -------------------
TREASURY SECURITIES
- -------------------
CLASS A
1998 0.44% 5.17% 0.73% 4.88%
1997 0.44 4.98 0.74 4.68
1996 0.44 5.27 0.52 5.19
1995 0.44 4.93 0.54 4.83
1994 0.44 2.91 0.51 2.84
CLASS D
1998 0.79% 4.82% 0.88% 4.73%
1997 0.79 4.64 0.89 4.54
1996 0.79 4.92 0.87 4.84
1995 0.79 5.15 0.89 5.05
1994(1) 0.79* 3.23* 0.98* 3.04*
- ---------------------
GOVERNMENT SECURITIES
- ---------------------
CLASS A
1998 0.44% 5.10% 0.73% 4.81%
1997 0.44 4.98 0.71 4.71
1996 0.44 5.19 0.54 5.09
1995 0.44 5.04 0.53 4.95
1994 0.44 2.96 0.51 2.89
- ----------------
PRIME OBLIGATION
- ----------------
CLASS A
1998 0.44% 5.27% 0.73% 4.98%
1997 0.44 5.08 0.74 4.78
1996 0.44 5.27 0.53 5.18
1995 0.44 5.21 0.53 5.12
1994 0.44 3.03 0.51 2.96
<FN>
(1) TREASURY SECURITIES CLASS D COMMENCED OPERATIONS ON MAY 4, 1994.
* ANNUALIZED
** NOT ANNUALIZED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
SEI LIQUID ASSET TRUST -- JUNE 30, 1998
1. ORGANIZATION
SEI Liquid Asset Trust (the "Trust") was organized as a Massachusetts business
trust under a Declaration of Trust dated July 20, 1981.
The Trust is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company with five
portfolios: the Treasury Securities Portfolio, the Government Securities
Portfolio, the Prime Obligation Portfolio, the Institutional Cash Portfolio and
the Money Market Portfolio (the "Portfolios"). The Trust is registered to offer
Class A shares of each of the portfolios and Class D shares of the Treasury
Securities Portfolio. In the fiscal year ending June 30, 1998, no shares of the
Institutional Cash Portfolio were sold. As of June 30, 1998 the Money Market
Portfolio had not commenced operations. The assets of each Portfolio are
segregated and a shareholder's interest is limited to the Portfolio in which
shares are held. A description of the Funds' investment objectives, policies,
and strategies are provided in the prospectus.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Trust.
SECURITY VALUATION--Investment securities are stated at amortized cost,
which approximates market value. Under this valuation method, purchase discounts
and premiums are accreted and amortized ratably to maturity.
FEDERAL INCOME TAXES--It is each Portfolio's intention to continue to
qualify as a regulated investment company and distribute all of its taxable
income. Accordingly, no provision for Federal income taxes is required.
REPURCHASE AGREEMENTS--Securities pledged as collateral for repurchase
agreements are held by the Portfolio's custodian bank until maturity of the
repurchase agreement. The Trust also invests in tri-party repurchase agreements.
Securities held as collateral for tri-party repurchase agreements are maintained
in a segregated account by the broker's custodian bank until maturity of the
repurchase agreement. Provisions of the agreements and procedures adopted by the
Manager of the Trust require that the market value of the collateral, including
accrued interest thereon, is sufficient to cover interest and principal in the
event of default by the counterparty.
If the counterparty defaults and the value of the collateral declines or if
the counterparty enters an insolvency proceeding, realization of the collateral
by the Trust may be delayed or limited.
DISCOUNT AND PREMIUM AMORTIZATION--All amortization is calculated using the
straight line method over the holding period of the security. Amortization of
premiums and discounts is included in interest income.
EXPENSES--Expenses of the Trust which are not directly associated to a
specific Portfolio are allocated on the basis of relative net asset value of the
affected Portfolios.
CLASSES--Class specific expenses, 12b-1 and transfer agent fees for Class D
and shareholder servicing fees for Class A, are borne by that class. Income,
expenses and realized gains/ losses are allocated to the respective classes on
the basis of relative daily net assets.
USE OF ESTIMATE IN THE PREPARATION OF FINANCIAL STATEMENTS--The preparation
of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates.
DISTRIBUTIONS--Distributions from ordinary income and net realized capital
gains are determined in accordance with U.S. Federal income tax regulations,
which may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences can be either temporary or
permanent in nature, and may necessitate reclassifications between undistributed
net investment income, undistributed net realized capital gains and/or
additional paid in capital.
OTHER--Security transactions are accounted for on the date the securities
are purchased or sold. Costs used in determining realized gains and losses on
the sale of investment securities are those of the specific securities sold.
Distributions from net investment income are declared on a daily basis and are
payable on the first business day of the following month. Any net realized
capital gains of the Portfolios are distributed to the shareholders of the
affected Portfolios annually.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
SEI LIQUID ASSET TRUST -- JUNE 30, 1998
3. MANAGEMENT, INVESTMENT ADVISORY AND DISTRIBUTION AGREEMENTS
SEI Investments (the "Manager") provides management, administrative and
shareholder services to the Trust for an annual fee, which is calculated daily
and paid monthly, of .42% of the average daily net assets of each Portfolio. The
Manager has agreed to bear certain expenses of the Trust so that the total
expenses do not exceed .44% of average daily net assets annually.
Wellington Management Company serves as
the Investment Adviser of the Trust. For its services, the Investment Adviser
receives an annual fee equal to .075% of the Trust's average daily net asset
value up to $500 million and .02% of such net asset value in excess of $500
million. The fees of the Investment Adviser are paid monthly.
SEI Investments Distribution Co. ("the Distributor"), a wholly-owned
subsidiary of SEI Investments Corporation and a registered broker-dealer, acts
as the distributor of the shares of the Trust under a Distribution Agreement.
The Trust has adopted a shareholder servicing plan for its Class A shares (the
"Class A Plan") pursuant to which a shareholder servicing fee of up to .25% of
the average daily net assets attributable to Class A shares will be paid to the
Distributor. Under the Class A Plan the Distributor may perform, or may
compensate other service providers for performing, certain shareholder and
administrative services. The Distributor has waived, on a voluntary basis, all
or a portion of its shareholder servicing fee.
The Trust has adopted a distribution plan for its Class D shares (the
"Class D Plan") pursuant to which a 12b-1 fee of up to .25% of the average daily
net assets attributable to Class D shares will be paid to the Distributor. For
the period ending June 30, 1998, the Distributor is taking a fee under the Class
D Plan of .20% of the average daily net assets attributable to Class D shares.
This payment may be used to compensate financial institutions that provide
distribution-related services to their customers. Under both the Class A Plan
and the Class D Plan, the Distributor may retain as a profit any difference
between the fee it receives and the amount it pays to third parties.
In addition, the Trust has entered into a separate Transfer Agent Agreement
with respect to Class D shares under which DST Systems, Inc. is entitled to a
fee of .15% of the average daily net assets of Class D plus out-of-pocket costs.
4. TRANSACTIONS WITH AFFILIATES
Certain officers and/or Trustees of the Trust are also officers and/or Directors
of the Manager or the Distributor. Compensation of officers and affiliated
Trustees of the Trust is paid by the Manager and/or the Distributor.
CoreStates N.A., which is a Trust shareholder, acts as Custodian and Wire
Agent for the Trust.
5. CAPITAL LOSS CARRYOVERS
At June 30, 1998, the Portfolios had capital loss carryovers, to the extent
provided in regulations, for Federal income tax purposes as follows:
Treasury Securities
Portfolio: $148,751 expiring in 2005
104,723 expiring in 2006
Government Securities
Portfolio: $5,230 expiring in 2001
1,741 expiring in 2004
7,997 expiring in 2005
Prime Obligation
Portfolio: $59,535 expiring in 2000
5,140 expiring in 2003
9,189 expiring in 2005
3,005 expiring in 2006
The Government Securities Portfolio utilized $11,065 of capital loss carryovers
in the fiscal year ended June 30, 1998.
6. LINE OF CREDIT
The Portfolios have a blank line of credit. Borrowings under the line of credit
are secured by investment securities of the Portfolios equal to 110% of such
borrowings and may not exceed 10% of the Portfolio's total assets. No borrowings
were outstanding at June 30, 1998.
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
SEI LIQUID ASSET TRUST -- JUNE 30, 1998
To the Trustees and Shareholders
of SEI Liquid Asset Trust
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Treasury Securities Portfolio, Government Securities Portfolio and Prime
Obligation Portfolio (constituting SEI Liquid Asset Trust, hereafter referred to
as the "Trust") at June 30, 1998, the results of each of their operations, the
changes in each of their net assets and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, PA
July 21, 1998
11
<PAGE>
NOTICE TO SHAREHOLDERS (UNAUDITED)
================================================================================
FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS,
THIS NOTICE IS FOR INFORMATIONAL PURPOSES ONLY.
Dear SEI Liquid Asset Trust Shareholders:
For the fiscal year ended June 30, 1998, each portfolio is designating long term
capital gains, qualifying dividends and exempt income with regard to
distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY (C) (E)
CAPITAL GAINS INCOME TOTAL (D) TAX
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING EXEMPT
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS(1) INTEREST
- -------- ------------- ------------- ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Treasury Securities Portfolio 0% 100% 100% 0% 0%
Government Securities Portfolio 0% 100% 100% 0% 0%
Prime Obligation Portfolio 0% 100% 100% 0% 0%
<FN>
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction.
* Items (A) and (B) are based on a percentage of the portfolio's total distribution.
** Items (D) and (E) are based on a percentage of ordinary income distributions of the portfolio.
Please consult your tax adviser for proper treatment of this information.
</FN>
</TABLE>
12
<PAGE>
======================
SEI LIQUID ASSET TRUST
======================
ANNUAL REPORT
======================
JUNE 30, 1998
Robert A. Nesher
CHAIRMAN
TRUSTEES
William M. Doran
F. Wendell Gooch
Frank E. Morris
James M. Storey
George J. Sullivan, Jr.
OFFICERS
Edward D. Loughlin
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Mark Nagle
CONTROLLER AND CHIEF FINANCIAL OFFICER
Todd Cipperman
VICE PRESIDENT, ASSISTANT SECRETARY
Kathy Heilig
VICE PRESIDENT, ASSISTANT SECRETARY
Joseph M. O'Donnell
VICE PRESIDENT, ASSISTANT SECRETARY
Sandra K. Orlow
VICE PRESIDENT, ASSISTANT SECRETARY
Cynthia M. Parrish
VICE PRESIDENT, ASSISTANT SECRETARY
Kevin P. Robins
VICE PRESIDENT, ASSISTANT SECRETARY
Kathryn L. Stanton
VICE PRESIDENT, ASSISTANT SECRETARY
Richard W. Grant
SECRETARY
John H.Grady, Jr.
ASSISTANT SECRETARY
INVESTMENT ADVISER
Wellington Management Company, LLP
MANAGER AND SHAREHOLDER SERVICING AGENT
SEI Investments Mutual Funds Services
DISTRIBUTOR
SEI Investments Distribution Co.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP
THIS ANNUAL REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED
FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE TRUST AND MUST BE
PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. SHARES OF THE SEI FUNDS ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK. THE SHARES
ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC),
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE
SHARES INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SEI INVESTMENTS
DISTRIBUTION CO., THE DISTRIBUTOR OF THE SEI FUNDS, IS NOT AFFILIATED WITH ANY
BANK.
FOR INFORMATION CALL 1-800-DIAL-SEI/1-800-342-5734
<PAGE>
SEI
INVESTMENTS
DISTRIBUTION
CO.
Oaks, PA 19456-1100
800-DIAL-SEI/800-342-5734
SEI-F-097-05
