ANNUAL REPORT June 30, 1995
Prudential Securities
Command Account
--------------------------------
Command Money Fund
Command Government Fund
Command Tax-Free Fund
<PAGE>
Letter to Shareholders
August 23, 1995
Dear Shareholder:
Money market investors enjoyed many happy returns while interest rates rose
throughout 1994 and into 1995. But nothing lasts forever. Short-term interest
rates that reached 6% in February fell to 5.75% in July as the Federal
Reserve sought to pump new life into a faltering U.S. economy.
Although interest rates may have peaked, the past year has been favorable
for investors in the Command Money Fund, the Command Government Fund or the
Command Tax-Free Fund. All three produced competitive yields that either
mirrored or surpassed industry averages as measured by IBC/Donoghue, a
widely known and independent, mutual fund tracking firm.
<TABLE>
FUND FACTS
As of June 30, 1995
<CAPTION>
7 Day Net Asset Weighted Total
Net
Current Yld. Value Avg. Mat. Assets
(mil.)
<S> <C> <C> <C> <C>
Command Money 5.51% $1.00 62 days $
4,056
IBC/Donoghue Money 5.46% $1.00 51 days N/A
Fund Average (All Taxable)1
Command 5.43% $1.00 62 days $ 404
Government
IBC/Donoghue Total 5.29% $1.00 46 days N/A
Government Universe2
Command 3.41% $1.00 54 days $
1,056
Tax-Free3
IBC/Donoghue Stockbroker & 3.54% $1.00 46 days N/A
General Purpose Tax-Free
Money Funds4
</TABLE>
Note: Yields will fluctuate from time to time and past performance is no
guarantee of future results. An investment in the Fund is neither insured
nor guaranteed by the U.S. government and there can be no assurance that
the Fund will be able to maintain a stable net asset value.
1 This is the average 7-day current yield, NAV and WAM of 738 funds in
International Business Communications/Donoghue all taxable money market
fund category for June 26, 1995.
2 This is the average 7-day current yield, NAV and WAM of 224 funds in
IBC/Donoghue's total government universe fund category for June 26, 1995.
3 Some investors may be subject to the federal alternative minimum tax.
4 This is the average 7-day current yield, NAV and WAM of 139 funds in
IBC/Donoghue stockbroker & general purpose tax-free money fund category
for June 26, 1995.
1
<PAGE>
Fund Objectives.
The Command Money Fund seeks high current income, preservation of capital and
maintenance of liquidity by investing in a diversified portfolio of money
market instruments maturing in 13 months or less.
The Command Government Fund seeks high current income, preservation of
capital and maintenance of liquidity by investing in a portfolio of U.S.
government securities maturing in 13 months or less.
The Command Tax-Free Fund seeks high current income that is exempt from
federal income taxes consistent with the preservation of capital and
maintenance of liquidity by investing in a diversified portfolio of
short-term, tax-exempt securities issued by states, municipalities and
their agencies or authorities maturing in 13 months or less. (Some
investors may be subject to the federal alternative minimum tax.)
There can be no assurance that any of the Funds will achieve their
respective objectives.
Strategy Session.
In order to foster sustainable, non-inflationary economic growth, the Federal
Reserve indirectly controls short-term interest rates. The Federal Reserve
does so by adjusting the targeted federal funds rate, the rate banks charge
each other for overnight lending to meet regulatory balance requirements.
In February 1995, the Federal Reserve increased this rate once, by a half
a percentage point, to 6%, double the 3% rate of February, 1994. Generally,
our strategy for the Command Money Fund and Command Government Fund before
the Federal Reserve acted was to hold shorter maturities, so we could lock
in higher yields when they became available. The short-term municipal
securities market is not as sensitive to ongoing economic developments.
Seasonal supply-and-demand factors have more immediate impact on
tax-advantaged investments such as the Command Tax-Free Fund.
After the Federal Reserve moved in February, the Command Money and Command
Government Fund began lengthening the weighted average maturity (WAM) of
their respective portfolios. By June 30, WAM was 8 to 16 days longer than
that of the competition, according to IBC/Donoghue. As a result, we were
able to preserve higher yields for a longer period of time. This was
important. On July 6, shortly after our reporting period closed, the
Federal Reserve reduced the targeted federal funds rate by one quarter
of a percentage point to 5.75%.
Why did we believe that the Federal Reserve's seventh increase would probably
be the last? Weaknesses began to surface in the interest rate sensi-
2
<PAGE>
tive sectors of the economy, such as housing and auto sales. Plus, growth in
employment slowed. This suggested that a sharp deceleration in economic
growth was occurring.
What Went Well.
Taking care of business. The Command Money Fund and Command Government Fund
were correctly positioned for the expected move by the Federal Reserve to
raise short-term interest rates again in February. The Command Tax-Free
Fund was well-positioned for developing opportunities in the short-term
municipal market.
In anticipation of higher rates, the weighted average maturity (WAM) of
the Command Money Fund and Command Government Fund prior to the increase
were 9 days shorter than comparable funds tracked by IBC/Donoghue.
Lengthening to preserve yields. After February's increase, we gradually
extended maturities to capture and preserve the new, higher rates.
By May and June, the WAM for the Command Money Fund and the Command
Government Fund averaged 8 to 16 days longer than comparable funds tracked
by IBC/Donoghue.
Seizing investment opportunities. Market interest rates fluctuated widely
in May and June as investor uncertainty grew over whether or not the Federal
Reserve would raise or begin lowering short-term interest rates at its
scheduled meeting in July. Uncertainty gave rise to opportunities -- and
we seized them.
The Command Government Fund took advantage of attractive yields that were
offered by federal agency securities. We purchased one-year, fixed rate
Federal Farm Credit Bank securities at yields similar to lower-rated credits.
These notes can be traded very quickly, offer a higher return than comparable
maturity U.S. Treasuries, and carry the implicit backing of the U.S.
government.
The Command Tax-Free Fund was able to take advantage of attractive yields
that were offered by some state and local agency securities in the second
quarter. (June is a big month when many municipal issues mature and/or are
refinanced.) We purchased hospital bonds from Evanston, Illinois, that were
yielding 4.30%. Comparable bonds at the time were yielding 3.8% or 50 basis
points (0.6%) less than this holding. There was much opportunity in Illinois
where short-term municipal securities were also priced attractively and sold
in large blocks, which was another plus from a trading standpoint.
3
<PAGE>
And Not So Well.
Lengthening maturities earlier. In retrospect, the Command Money Fund could
have lengthened WAM earlier than we did. Instead, we held slightly shorter
maturities as a hedge against another Federal Reserve rate increase.
Why did we think that? As the first quarter ended, we looked at conditions
and believed there was still a possibility that the Federal Reserve might
increase interest rates again. And we did not want to be caught holding
longer term maturities if this happened. Gross Domestic Product (GDP) grew
at a torrid rate of 5.1% in the final quarter of 1994. Economic signs were
mixed throughout the first quarter of 1995 as GDP growth slowed to a more
manageable 2.7%. We did not believe the economy would cool off more quickly.
But it did. Preliminary figures released on July 28, showed second quarter
GDP had fallen to 0.5% -- the slowest rate in nearly three years. Higher
interest rates engineered by the Federal Reserve appear to have really
taken the wind out of the economy's sails. And just like economic theory,
consumers stopped spending and companies began laying off employees.
The Tax-Free Market Is Different.
While taxable money market funds jockey for position to take advantage of
rising or falling short-term interest rates, the short-term municipal
securities market follows a different drummer. That's not to say that
changing interest rates don't affect tax-free markets. They do. Yet
supply-and-demand factors often play a larger, more immediate role in
determining a fund'sstrategy.
In December, for instance, the Command Tax-Free Fund traded securities
with two goals in mind: to create more liquidity for investors who needed
cash for holiday expenses and tax purposes; and to maintain a consistent
yield in anticipation of declining rates in January.
How did it play out? On January 3, 1995 7-day yields hit 4.01%, according
to IBC/Donoghue. Yields went up as bond prices fell because of the year-end
holiday and tax season rush. Our yield on that date was 3.87%. Three weeks
later on January 24, IBC/Donoghue reported that the average fund's 7-day
yield fell to 2.67% -- a swing of 134 basis points -- as investors returned
and bond prices rose. We weathered this volatile period well. Our 7-day
yield stood at 2.77%, moving 33 basis points less than the IBC/Donoghue
average.
A similar supply-and-demand scenario sets up as June approaches. June 30
is the fiscal year-end for many municipalities. It's a time when a large
number of short-term securities mature causing rates to decline significantly
in early July. Our strategy is to lengthen maturities in anticipation of
lower rates associated with this maturity cycle in order to maintain a more
stable yield.
4
<PAGE>
A Word About Quality.
As of June 30, 1995, all of the securities held by either the Command Money
Fund, Command Government Fund or Command Tax-Free Fund were invested in one
of the two highest quality ratings by either Moody's Investors Service,
Standard & Poor's Rating Group or considered to be of comparable quality
by each portfolio's investment adviser.
Although there is never a guarantee that the share price of the Command
Funds will stay at $1, we at Prudential emphasize a conservative,
quality-oriented investment approach.
The Outlook.
After steadily rising for the past 18 months, we believe that money market
yields have peaked. The Federal Reserve has already reduced short-term
interest rates once and further reductions are possible as the central
bank continues to fine tune monetary policy.
This may not be welcome news to money market shareholders. Keep in mind
why investors choose money market funds in the first place -- liquidity
to meet day-to-day finances, investment flexibility or for income tax
purposes. A money market fund should be viewed as a short-term investment.
There are many Prudential mutual funds that offer long-term growth of capital
or tax-advantaged returns.
As always, it is a pleasure to work for you. Thank you for the confidence
you have shown in us by choosing the Prudential Securities Command Account.
Sincerely,
Robert N. Felice Bernard Whitsett Richard S. Lynes
Portfolio Manager Portfolio Manager Portfolio Manager
Command Money Fund Command Government Fund CommandTax-Free Fund
Richard A. Redeker
President
5
<PAGE>
COMMAND MONEY FUND Portfolio of Investments
June 30, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
ASSET BACKED SECURITYD--1.3%
Money Market Auto Loan Trust Ser. 1990-1
6.235%, 7/17/95
$ 51,000 (amortized cost
$51,000,000) . . . $51,000,000
--------------
BANK HOLDING PAPER--0.6%
PNC Funding Corp.
25,000 5.96%, 8/18/95
(amortized cost
$24,801,333)............. 24,801,333
--------------
BANK NOTES--4.6%
Huntington National Bank
18,000 6.20%, 11/3/95............. 18,005,077
Mellon Bank, NA
15,000 6.20%, 11/1/95............. 14,999,006
Nationsbank Texas, NA
64,000 6.82%, 10/31/95............ 64,002,023
25,000 7.55%, 1/9/96.............. 25,104,143
25,000 7.30%, 1/26/96............. 25,059,446
Northern Trust Co.
25,000 6.60%, 11/17/95............ 25,029,608
State Street Bank & Trust
Co.
14,000 6.01%, 9/20/95............. 13,999,726
--------------
Total Bank Notes
(amortized cost
$186,199,029)............ 186,199,029
--------------
CERTIFICATES OF DEPOSIT--
CANADA--3.5%
Bank of Montreal (New York)
136,000 5.99%, 7/5/95............ 136,000,000
Canadian Imperial Bank of
Commerce
5,000 5.98%, 7/27/95............. 4,999,914
Total Certificates of
Deposit--Canada
(amortized cost
$140,999,914)............ $ 140,999,914
--------------
CERTIFICATES OF DEPOSIT--
DOMESTIC--0.2%
National Westminster Bank
Delaware
$ 10,000 5.85%, 12/26/95
(amortized cost
$10,000,000)............. 10,000,000
--------------
CERTIFICATES OF DEPOSIT--
EURODOLLAR--2.0%
Abbey National Treasury Services, PLC.
50,000 6.40%, 5/17/96............. 50,000,000
Bank of New York
4,000 6.15%, 7/3/95.............. 4,000,007
24,000 6.27%, 10/31/95............ 24,005,437
Toronto Dominion Bank
3,000 5.78%, 7/18/95............. 2,999,155
--------------
Total Certificates of
Deposit--Eurodollar
(amortized cost
$81,004,599)............. 81,004,599
--------------
CERTIFICATES OF DEPOSIT--
YANKEE--10.8%
Banque Nationale De Paris
29,000 6.95%, 2/21/96............. 29,052,767
Caisse Nationale De Credit
Agricole
29,000 6.22%, 11/2/95............. 29,001,833
Commerzbank
3,000 7.32%, 1/24/96............. 3,011,212
16,000 7.10%, 2/2/96.............. 16,040,863
10,000 6.45%, 4/17/96............. 9,999,912
Industrial Bank of Japan,
Ltd.
87,000 6.02%, 7/5/95.............. 87,000,000
Norinchukin Bank
75,000 6.06%, 7/20/95............. 75,000,394
Rabobank Nederland
3,000 6.40%, 9/13/95............. 3,001,178
</TABLE>
-6-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
CERTIFICATES OF DEPOSIT--
YANKEE--(cont'd)
Sanwa Bank, Ltd.
$ 63,000 5.95%, 7/6/95.............. $ 62,999,556
Sumitomo Bank, Ltd.
46,000 6.00%, 7/10/95............. 46,000,000
75,000 6.06%, 7/14/95............. 75,000,269
--------------
Total Certificates of
Deposit--Yankee
(amortized cost
$436,107,984)............ 436,107,984
--------------
COMMERCIAL PAPER--CANADA--0.5%
Province of Quebec
20,000 5.82%, 9/26/95
(amortized cost
$19,718,700)............. 19,718,700
--------------
COMMERCIAL PAPER--DOMESTIC--43.7%
A.H. Robins Co., Inc.
4,000 6.00%, 7/10/95............. 3,994,000
15,000 6.00%, 7/20/95............. 14,952,500
35,932 5.97%, 8/10/95............. 35,693,651
American Express Credit
Corp.
27,000 6.18%, 8/21/95............. 26,763,615
27,000 5.85%, 9/19/95............. 26,649,000
3,350 5.82%, 2/2/96.............. 3,233,018
American Home Food Products
12,950 5.97%, 7/20/95............. 12,909,197
37,645 5.97%, 8/10/95............. 37,395,288
3,000 5.91%, 8/30/95............. 2,970,450
American Home Products
Corp.
5,000 5.97%, 7/20/95............. 4,984,246
23,778 5.95%, 7/27/95............. 23,675,821
2,915 5.97%, 8/3/95.............. 2,899,048
25,500 5.97%, 8/10/95............. 25,330,850
20,000 5.91%, 8/30/95............. 19,803,000
12,000 5.95%, 8/31/95............. 11,879,017
Aristar, Inc.
8,000 6.02%, 7/5/95.............. 7,994,649
4,000 6.12%, 8/1/95.............. 3,978,920
Asset Securitization
Cooperative Corp.
$ 25,000 6.00%, 8/1/95.............. $ 24,870,833
13,000 5.83%, 9/20/95............. 12,829,473
Associates Corp. of North
America
76,000 6.00%, 7/5/95.............. 75,949,333
33,000 5.96%, 8/2/95.............. 32,825,173
9,000 5.96%, 8/3/95.............. 8,950,830
28,000 5.91%, 8/29/95............. 27,728,797
AT&T Capital Corp.
8,000 5.83%, 9/8/95.............. 7,910,607
AT&T Corp.
17,000 5.83%, 9/12/95............. 16,799,027
Caterpillar Financial
Services
5,000 5.92%, 9/14/95............. 4,938,333
Chrysler Financial Corp.
8,000 6.15%, 7/10/95............. 7,987,700
CIT Group Holdings, Inc.
42,000 6.00%, 7/5/95.............. 41,972,000
21,000 5.90%, 9/11/95............. 20,752,200
14,000 5.85%, 9/18/95............. 13,820,275
Coca Cola Enterprises, Inc.
5,000 6.00%, 7/7/95.............. 4,995,000
8,425 6.00%, 11/3/95............. 8,249,479
Corporate Receivables Corp.
4,800 5.85%, 9/19/95............. 4,737,600
Countrywide Funding Corp.
3,000 5.97%, 7/6/95.............. 2,997,512
35,000 5.98%, 7/19/95............. 34,895,350
10,600 5.96%, 7/20/95............. 10,566,657
6,000 6.02%, 7/27/95............. 5,973,913
10,878 6.00%, 7/28/95............. 10,829,049
Dean Witter, Discover & Co.
26,000 5.97%, 7/5/95.............. 25,982,753
Duracell, Inc.
7,000 5.98%, 8/11/95............. 6,952,326
Falcon Asset Securitization
Corp.
8,540 6.00%, 7/24/95............. 8,507,263
</TABLE>
-7-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--DOMESTIC--(cont'd)
Finova Capital Corp.
$ 5,000 6.20%, 7/6/95.............. $ 4,995,694
6,300 6.12%, 7/11/95............. 6,289,290
22,016 6.05%, 7/12/95............. 21,975,301
10,000 6.07%, 7/17/95............. 9,973,022
8,000 6.05%, 7/20/95............. 7,974,456
3,200 6.07%, 7/20/95............. 3,189,748
16,000 6.05%, 7/27/95............. 15,930,089
3,100 6.03%, 7/31/95............. 3,084,423
18,500 6.03%, 8/1/95.............. 18,403,939
3,000 6.01%, 8/2/95.............. 2,983,973
11,000 5.98%, 8/3/95.............. 10,939,702
11,900 6.00%, 8/7/95.............. 11,826,617
3,000 6.00%, 8/9/95.............. 2,980,500
Ford Motor Credit Corp.
5,000 6.11%, 7/12/95............. 4,990,665
107,000 5.95%, 7/14/95............. 106,770,099
50,000 6.20%, 9/12/95............. 49,371,389
General Electric Capital
Corp.
99,000 6.05%, 10/17/95............ 97,203,150
24,000 6.53%, 10/30/95............ 23,473,247
4,000 5.97%, 11/1/95............. 3,918,410
General Motors Acceptance
Corp.
111,411 6.15%, 7/12/95............. 111,201,640
47,670 6.15%, 7/13/95............. 47,572,276
3,000 6.00%, 7/17/95............. 2,992,000
15,560 6.10%, 7/17/95............. 15,517,815
4,800 6.18%, 8/7/95.............. 4,769,512
GTE Finance Corp.
8,000 5.98%, 8/11/95............. 7,945,516
Hertz Corp.
17,000 5.86%, 9/18/95............. 16,781,389
Household Finance Corp.
22,000 5.82%, 9/26/95............. 21,690,570
IBM Credit Corp.
50,000 5.89%, 9/1/95.............. 49,492,806
ITT Corp.
$ 20,000 6.00%, 7/11/95............. $ 19,966,667
ITT Hartford Group, Inc.
45,000 5.96%, 7/13/95............. 44,910,600
5,000 6.00%, 7/27/95............. 4,978,333
Mckenna Triangle National
Corp.
26,000 5.90%, 7/27/95............. 25,889,211
12,500 5.97%, 8/1/95.............. 12,435,740
12,927 5.96%, 8/3/95.............. 12,856,375
7,000 5.90%, 9/15/95............. 6,912,811
Merrill Lynch & Co., Inc.
28,500 6.04%, 10/17/95............ 27,983,580
Monsanto Company
3,500 6.25%, 8/18/95............. 3,470,833
3,065 5.97%, 10/30/95............ 3,003,498
Morgan (J.P.) & Co., Inc.
5,000 6.07%, 7/31/95............. 4,974,708
Morgan Stanley Group, Inc.
35,000 5.85%, 10/2/95............. 34,471,063
Norwest Financial, Inc.
14,000 6.00%, 7/5/95.............. 13,990,667
NYNEX Corp.,
5,000 6.05%, 7/24/95............. 4,980,674
10,000 5.97%, 9/27/95............. 9,854,067
PacifiCorp
5,000 6.00%, 7/5/95.............. 4,996,667
Pennsylvania Power & Light
Energy
7,000 6.02%, 7/7/95.............. 6,992,977
8,000 5.92%, 7/10/95............. 7,988,160
10,000 5.95%, 7/17/95............. 9,973,556
Phillip Morris Co., Inc.
35,000 6.02%, 7/12/95............. 34,935,619
Preferred Receivables
Funding Corp.
11,000 5.85%, 9/20/95............. 10,855,213
Sears Roebuck Acceptance
Corp.
13,000 5.98%, 7/10/95............. 12,980,565
14,000 5.98%, 7/11/95............. 13,976,744
</TABLE>
-8-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--DOMESTIC--(cont'd)
WCP Funding, Inc.
$ 11,000 5.95%, 8/15/95............. $ 10,918,187
Whirlpool Corp.
14,000 5.97%, 7/10/95............. 13,979,105
Whirlpool Financial Corp.
26,275 6.05%, 7/18/95............. 26,199,934
Xerox Corp.
16,000 5.82%, 9/14/95............. 15,806,000
--------------
Total Commercial
Paper--Domestic
(amortized cost
$1,771,646,545).......... 1,771,646,545
--------------
COMMERCIAL PAPER--YANKEE--8.9%
Abbey National Corp., NA
50,000 5.82%, 9/15/95............. 49,385,667
American Honda Finance
Corp.
5,000 6.05%, 7/31/95............. 4,974,792
6,000 6.00%, 8/15/95............. 5,955,000
3,000 5.95%, 8/23/95............. 2,973,721
12,000 5.88%, 9/5/95.............. 11,870,640
BHF Finance Inc.
31,000 5.80%, 9/22/95............. 30,585,461
Bradford & Bingley Building
Society
15,000 5.90%, 9/13/95............. 14,818,083
14,000 5.81%, 9/26/95............. 13,803,428
Bridgestone/Firestone
10,000 6.00%, 7/12/95............. 9,981,667
Cheltenham & Gloucester
Building Society
16,000 6.02%, 7/20/95............. 15,949,164
Fundex Corp.
4,000 6.00%, 7/10/95............. 3,994,000
Halifax Building Society
12,000 5.81%, 9/11/95............. 11,860,560
Hanson Finance (U.K.), PLC.
8,000 5.88%, 9/11/95............. 7,905,920
3,000 5.83%, 9/19/95............. 2,961,133
$ 33,000 5.90%, 9/21/95............. $ 32,556,517
8,000 5.83%, 9/22/95............. 7,892,469
Leeds Permanent Buillding
Society
49,000 6.07%, 7/7/95.............. 48,950,428
Maguire/Thomas Partners
15,000 6.00%, 7/17/95............. 14,960,000
Paribas Finance Inc.
22,000 5.94%, 7/26/95............. 21,909,250
13,000 6.00%, 8/1/95.............. 12,932,833
15,000 5.84%, 9/28/95............. 14,783,433
75 State Street Capital
Corp.
6,000 6.07%, 7/7/95.............. 5,993,930
Sumitomo Corp. of America
15,000 6.02%, 7/31/95............. 14,924,750
--------------
Total Commercial
Paper--Yankee
(amortized cost
$361,922,846)............ 361,922,846
--------------
CORPORATE BONDS--0.7%
Associates Corp. of North
America
4,000 8.75%, 2/1/96.............. 4,043,768
3,000 8.80%, 3/1/96.............. 3,044,844
Atlantic Richfield Company
6,701 10.375%, 7/15/95........... 6,710,436
BP America, Inc.
4,865 10.15%, 3/15/96............ 5,004,930
CIT Group Holdings, Inc.
2,750 8.75%, 2/15/96............. 2,793,647
8,590 4.75%, 3/15/96............. 8,495,880
--------------
Total Corporate Bonds
(amortized cost
$30,093,505)............. 30,093,505
--------------
DEPOSIT NOTES--0.4%
Bayerische Hypotheken
16,000 6.376%, 4/24/96
(amortized cost
$15,990,620)............. 15,990,620
--------------
</TABLE>
-9-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
LOAN PARTICIPATION--0.8%
Morgan Stanley Group, Inc.
$ 33,000 6.08%, 7/7/95
(amortized cost
$33,000,000)............. $ 33,000,000
--------------
MEDIUM-TERM OBLIGATIONS
DOMESTIC--0.9%
Ford Motor Credit Corp.
3,000 6.125%, 12/11/95........... 2,992,205
4,700 5.15%, 2/26/96............. 4,660,760
1,500 8.85%, 5/1/96.............. 1,533,659
10,000 14.00%, 7/5/96............. 10,764,222
4,000 9.05%, 7/23/96............. 4,135,036
General Motors Acceptance
Corp.
1,400 4.80%, 1/16/96............. 1,389,707
2,500 8.80%, 7/3/96.............. 2,563,588
PepsiCo, Inc.
10,000 15.00%, 11/8/95............ 10,302,601
--------------
Total Medium-Term
Obligations-Domestic
(amortized cost
$38,341,778)............. 38,341,778
--------------
MEDIUM-TERM OBLIGATION--
YANKEE--0.4%
Westdeusche Landesbank
Girozentral
16,000 6.85%, 3/1/96
(amortized cost
$16,016,573)............. 16,016,573
--------------
TIME DEPOSITS--EURODOLLAR--7.2%
Dai-Ichi Kangyo Bank, Ltd.
89,240 6.375%, 7/5/95............. 89,240,000
Mitsubishi Bank, Ltd.
83,000 6.1875%, 7/7/95............ 83,000,000
74,000 6.125%, 7/12/95............ 74,000,000
45,000 6.0625%, 7/14/95........... 45,000,000
--------------
Total Time
Deposits--Eurodollar
(amortized cost
$291,240,000)............ $ 291,240,000
--------------
U.S. GOVERNMENT AGENCIES--2.1%
Federal Farm Credit Banks
$ 28,000 5.60%, 7/1/96.............. 27,971,089
Federal Home Loan Banks
28,000 6.05%, 6/13/96............. 28,015,632
Federal National Mortgage
Association
29,000 5.71%, 6/10/96............. 28,921,170
--------------
Total U.S. Government
Agencies
(amortized cost
$84,907,891)............. 84,907,891
--------------
VARIABLE RATE INSTRUMENTSD--12.0%
American Express Centurion
Bank
11,000 6.0625%, 7/5/95............ 10,999,897
9,000 6.0625%, 7/17/95........... 8,998,866
19,000 6.0625%, 7/19/95........... 18,999,692
6,000 6.0625%, 7/28/95........... 5,999,854
Avco Financial Services,
Inc.
18,000 6.14076%, 7/13/95.......... 18,000,000
Beneficial Corp.
11,000 6.04045%, 7/19/95.......... 10,999,628
General Electric Capital
Corp.
65,000 6.03125%, 7/26/95.......... 65,000,000
General Motors Acceptance
Corp.
13,500 6.235%, 10/20/95........... 13,500,188
Goldman, Sachs Group, L.P.
129,000 6.1875%, 11/27/95.......... 129,000,000
Lehman Brothers Holdings,
Inc.
96,000 6.2625%, 7/24/95........... 96,000,000
</TABLE>
-10-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
VARIABLE RATE INSTRUMENTSD--(cont'd)
Merrill Lynch & Co., Inc.
$ 24,000 6.0725%, 7/24/95........... $ 23,998,936
33,500 6.0725%, 7/5/95............ 33,498,335
Morgan Stanley Group, Inc.
33,000 6.25%, 8/15/95............. 33,000,000
18,000 6.375%, 7/17/95............ 18,000,000
--------------
Total Variable Rate
Instruments
(amortized cost
$485,995,396)............ 485,995,396
--------------
REPURCHASE AGREEMENTS*--0.7%
9,000 Smith Barney, Inc.,
5.98%, dated 6/5/95, due
7/5/95 in the amount of
$9,044,850 (cost
$9,000,000) value of
collateral including
accrued
interest--$9,180,000..... 9,000,000
19,000 Smith Barney, Inc.,
6.00%, dated 6/9/95, due
7/10/95 in the amount of
$19,098,167 (cost
$19,000,000) value of
collateral including
accrued
interest--$19,380,000.... 19,000,000
--------------
Total Repurchase Agreements
(amortized cost
$28,000,000)............. 28,000,000
--------------
Total Investments--101.3%
(amortized cost
$4,106,986,713).......... 4,106,986,713
Liabilities in excess of
other assets--(1.3%)..... (51,286,830)
--------------
Net Assets--100%........... $4,055,699,883
--------------
--------------
</TABLE>
---------------
D The maturity date presented for these instruments is the later of the next
date on which the security can be redeemed at par or the next date on which
the rate of interest is adjusted.
* Repurchase agreements are collateralized by U.S. Treasury or Federal agency
obligations.
-11-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND MONEY FUND
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets
June 30, 1995
--------------
<S>
<C>
Investments, at
value...................................................................
$4,106,986,713
Cash............................................................................
........ 19,692
Receivable for Fund shares
sold......................................................... 93,241,032
Interest
receivable.....................................................................
13,320,229
Prepaid
expenses........................................................................
96,364
--------------
Total
assets..........................................................................
4,213,664,030
--------------
Liabilities
Payable for Fund shares
repurchased.....................................................
82,177,293
Payable for Investments
purchased.......................................................
74,000,000
Due to
Manager.........................................................................
. 1,257,053
Accrued
expenses........................................................................
308,360
Due to
Distributor.....................................................................
. 221,441
--------------
Total
liabilities.....................................................................
157,964,147
--------------
Net Assets
Applicable to 4,055,699,883 shares of beneficial interest ($ .01 par value)
issued and
outstanding;
unlimited number of shares
authorized................................................. $4,055,699,883
--------------
--------------
Net asset value, offering price and redemption price per share ($4,055,699,883 /
4,055,699,883
shares).................................................................
$1.00
--------------
--------------
</TABLE>
See Notes to Financial Statements appearing on page 30.
-12-
<PAGE>
COMMAND MONEY FUND
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
June 30,
Net Investment Income 1995
--------------
<S> <C>
Income
Interest............................. $ 174,527,169
--------------
Expenses
Management fee....................... 12,002,993
Distribution fee..................... 3,840,355
Transfer agent's fees................ 1,225,000
Registration fees.................... 492,000
Custodian's fees and expenses........ 295,000
Reports to shareholders.............. 95,000
Insurance expense.................... 83,000
Trustees' fees....................... 63,000
Audit fee and expenses............... 41,000
Legal fees........................... 15,000
Miscellaneous........................ 3,906
--------------
Total expenses..................... 18,156,254
--------------
Net investment income.................. 156,370,915
--------------
Realized gain on Investments
Net realized gain on investment
transactions......................... 307,047
--------------
Net Increase in Net Assets
Resulting from Operations.............. $ 156,677,962
--------------
--------------
</TABLE>
COMMAND MONEY FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
Increase in -----------------------------------
Net Assets 1995 1994
---------------- ----------------
<S> <C> <C>
Operations
Net investment
income............. $ 156,370,915 $ 74,952,241
Net realized gain
on investment
transactions..... 307,047 336,119
---------------- ----------------
Net increase in net
assets resulting
from
operations....... 156,677,962 75,288,360
---------------- ----------------
Dividends and
distributions to
shareholders....... (156,677,962) (75,288,360)
---------------- ----------------
Fund share
transactions (at $1
per share)
Net proceeds from
shares
subscribed....... 16,966,514,286 12,302,814,436
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions.... 156,677,962 75,288,360
Cost of shares
reacquired....... (15,515,692,996) (12,366,574,033)
---------------- ----------------
Net increase in net
assets from Fund
share
transactions..... 1,607,499,252 11,528,763
---------------- ----------------
Total increase....... 1,607,499,252 11,528,763
Net Assets
Beginning of year.... 2,448,200,631 2,436,671,868
---------------- ----------------
End of year.......... $ 4,055,699,883 $ 2,448,200,631
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements appearing on page 30.
See Notes to Financial Statements appearing on page 30.
-13-
<PAGE>
COMMAND MONEY FUND
Financial Highlights
<TABLE>
<CAPTION>
Year Ended June 30,
-----------------------
---------------------------------------
1995 1994
1993 1992 1991
---------- ----------
---------- ---------- ----------
<S> <C> <C>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year..................... $ 1,000 $ 1.000
$ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains........... 0.050 0.029
0.030 0.046 0.069
Dividends and distributions to shareholders............ (0.050)
(0.029) (0.030) (0.046) (0.069)
---------- ----------
---------- ---------- ----------
Net asset value, end of year........................... $ 1.000 $ 1.000
$ 1.000 $ 1.000 $ 1.000
---------- ----------
---------- ---------- ----------
---------- ----------
---------- ---------- ----------
TOTAL RETURN(a):....................................... 5.13%
2.98% 3.01% 4.71% 7.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000).......................... $4,055,700 $2,448,201
$2,436,672 $2,125,430 $2,417,429
Average net assets (000)............................... $3,072,284 $2,570,195
$2,275,532 $2,377,108 $2,605,472
Ratios to average net assets:
Expenses, including distribution fees................ .59%
.59% .61% .64% .61%
Expenses, excluding distribution fees................ .47%
.47% .48% .51% .49%
Net investment income................................ 5.09%
2.92% 2.90% 4.57% 6.95%
</TABLE>
---------------
(a) Total return is calculated assuming a purchase of shares on the first
day and a sale on the last day of each year reported and includes
reinvestment of dividends and distributions.
See Notes to Financial Statements appearing on page 30.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees of
Command Money Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, 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 Command Money Fund (the ``Fund'')
at June 30, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as ``financial
statements'') are the responsibility of the Fund'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, 1995 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
August 21, 1995
-14-
<PAGE>
COMMAND GOVERNMENT FUND Portfolio of Investments
June 30, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
U.S. Government Agencies--55.6%
Federal Farm Credit Bank
$ 30,000D 5.94%, 7/3/95.............. $ 29,981,325
9,000 6.00%, 7/05/95............. 8,999,910
7,500 5.375%, 8/01/95............ 7,499,154
8,750 6.65%, 8/01/95............. 8,750,504
7,400D 5.97%, 8/23/95............. 7,397,598
5,100 6.56%, 11/14/95............ 5,097,306
1,095 6.31%, 2/02/96............. 1,053,543
18,000 5.60%, 7/01/96............. 17,981,415
--------------
86,760,755
--------------
Federal Home Loan Bank
1,500 10.30%, 7/25/95............ 1,503,942
4,900 5.625%, 8/23/95............ 4,899,644
5,550 6.07%, 9/01/95............. 5,491,981
615D 5.85%, 9/05/95............. 614,723
5,000D 5.67%, 9/08/95............. 4,994,190
1,000D 5.83%, 9/14/95............. 998,923
1,500 5.92%, 10/13/95............ 1,474,347
3,500 5.92%, 10/19/95............ 3,436,689
7,805 5.82%, 11/17/95............ 7,629,609
5,000 6.04%, 1/16/96............. 4,833,061
4,000 6.787%, 2/15/96............ 3,995,508
4,070 6.85%, 2/28/96............. 4,073,130
4,000 6.22%, 3/22/96............. 3,816,855
--------------
47,762,602
--------------
Federal Home Loan Mortgage
Corporation
500 5.90%, 7/31/95............. 497,542
5,000 5.80%, 2/01/96............. 4,826,805
--------------
5,324,347
--------------
Federal National Mortgage
Association
$ 4,000D 5.97%, 7/3/95.............. $ 4,000,000
4,000 7.55%, 7/09/95............. 4,000,926
1,125 5.91%, 7/26/95............. 1,120,383
5,000 5.93%, 7/26/95............. 4,979,410
5,000D 5.967%, 7/30/95............ 4,998,759
10,000 5.90%, 8/14/95............. 9,927,889
10,000 5.90%, 8/17/95............. 9,922,972
2,950 6.05%, 9/01/95............. 2,919,263
4,275 6.07%, 9/01/95............. 4,230,309
410 5.95%, 10/20/95............ 402,478
1,250 8.80%, 11/10/95............ 1,258,530
1,520 6.24%, 12/08/95............ 1,477,845
6,000 5.71%, 6/10/96............. 5,983,690
--------------
55,222,454
--------------
International Bank For
Reconstruction & Development
4,500 6.07%, 11/06/95............ 4,402,880
--------------
Student Loan Marketing Association
4,000D 5.73%, 7/5/95.............. 4,000,000
13,400D 5.86%, 7/5/95.............. 13,407,850
8,000D 6.08%, 7/1/96.............. 7,990,385
--------------
25,398,235
--------------
Total U.S. Government
Agencies (amortized cost
$224,871,273)............ 224,871,273
--------------
Repurchase Agreements*--44.6%
Joint Repurchase Agreement
Account,
704 6.12%, 7/3/95, (Note 4).... 704,000
</TABLE>
-15-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND GOVERNMENT FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Repurchase Agreements--(cont'd)
$ 33,000 UBS Securities Inc., 6.07%,
dated 6/26/95, due 7/3/95,
in the amount of
$33,038,949, (cost
$33,000,000), value of
collateral including
accrued
interest--$33,661,081...... $ 33,000,000
14,000 Bear Stearns and Co., 6.07%,
dated 6/28/95, due 7/5/95,
in the amount of
$14,016,524, (cost
$14,000,000), value of
collateral including
accrued
interest--$14,295,361...... 14,000,000
9,000 Bear Stearns and Co., 5.98%,
dated 6/2/95, due 7/24/95,
in the amount of
$9,077,740, (cost
$9,000,000), value of
collateral including
accrued
interest--$9,206,015....... 9,000,000
3,574 Goldman, Sachs & Co., 6.07%,
dated 6/27/95, due 7/5/95,
in the amount of
$3,578,821, (cost
$3,574,000), value of
collateral including
accrued
interest--$3,645,480....... 3,574,000
36,000 Goldman, Sachs & Co., 6.07%,
dated 6/28/95, due 7/5/95,
in the amount of
$36,042,490, (cost
$36,000,000), value of
collateral including
accrued
interest--$36,720,001...... 36,000,000
38,470 Nomura Securities
International, Inc., 6.07%,
dated 6/28/95, due 7/5/95,
in the amount of
$38,515,405, (cost
$38,470,000), value of
collateral including
accrued
interest--$39,240,208...... 38,470,000
$ 15,000 Smith Barney, Inc., 6.08%,
dated 6/28/95, due 7/5/95,
in the amount of
$15,017,733, (cost
$15,000,000), value of
collateral including
accrued
interest--$15,300,000...... $ 15,000,000
23,438 Smith Barney, Inc., 5.98%,
dated 6/6/95, due 7/6/95,
in the amount of
$23,554,799, (cost
$23,438,000), value of
collateral including
accrued
interest--$23,906,760...... 23,438,000
7,000 Morgan Stanley & Co., 6.00%,
dated 6/13/95, due 7/12/95,
in the amount of
$7,033,833, (cost
$7,000,000), value of
collateral including
accrued
interest--$7,185,533....... 7,000,000
--------------
Total Repurchase Agreements
(amortized cost
$180,186,000).............. 180,186,000
--------------
Total Investments--100.2%
(amortized cost
$405,057,273).............. 405,057,273
Liabilities in excess of
other
assets--(0.2)%............. (762,128)
--------------
Net Assets--100%............. $ 404,295,145
--------------
--------------
</TABLE>
---------------
D The maturity date presented for these instruments is the later of the next
date on which the security can be redeemed at par or the next date on which
the rate of interest is adjusted.
* Repurchase agreements are collateralized by U.S. Treasury or Federal agency
obligations.
-16-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND GOVERNMENT FUND
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets
June 30, 1995
-------------
<S>
<C>
Investments, at
value...................................................................... $
405,057,273
Cash............................................................................
........... 5,915
Receivable for Fund shares
sold............................................................ 8,819,446
Interest
receivable......................................................................
.. 1,545,139
Prepaid
expenses........................................................................
... 9,946
-------------
Total
assets..........................................................................
... 415,437,719
-------------
Liabilities
Payable for Fund shares
repurchased........................................................
10,824,025
Accrued
expenses........................................................................
... 164,486
Due to
Manager.........................................................................
.... 131,753
Due to
Distributor.....................................................................
.... 22,310
-------------
Total
liabilities.....................................................................
... 11,142,574
-------------
Net Assets
Applicable to 404,295,145 shares of beneficial interest ($.01 par value) issued
and
outstanding;
unlimited number of shares
authorized.................................................... $ 404,295,145
-------------
-------------
Net asset value, offering price and redemption price per share ($404,295,145 /
404,295,145
shares).........................................................................
......... $1.00
-------------
-------------
</TABLE>
See Notes to Financial Statements appearing on page 30.
-17-
<PAGE>
COMMAND GOVERNMENT FUND
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
Net Investment Income June 30, 1995
-------------
<S> <C>
Income
Interest.............................. $ 19,164,369
-------------
Expenses
Management fee........................ 1,401,832
Distribution fee...................... 438,073
Custodian's fees and expenses......... 120,000
Registration fees..................... 95,000
Transfer agent's fees................. 78,000
Trustees' fees........................ 49,000
Reports to shareholders............... 44,000
Audit fee and expenses................ 36,000
Legal fees............................ 20,000
Insurance expense..................... 11,300
Miscellaneous......................... 5,576
-------------
Total expenses...................... 2,298,781
-------------
Net investment income................... 16,865,588
-------------
Realized gain on Investments
Net realized gain on investment
transactions.......................... 49,296
-------------
Net Increase in Net Assets
Resulting from Operations............... $ 16,914,884
-------------
-------------
</TABLE>
COMMAND GOVERNMENT FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
Increase (Decrease) in ---------------------------------
Net Assets 1995 1994
--------------- ---------------
<S> <C> <C>
Operations
Net investment
income................. $ 16,865,588 $ 10,496,097
Net realized gain on
investment
transactions......... 49,296 49,860
--------------- ---------------
Net increase in net
assets resulting from
operations........... 16,914,884 10,545,957
--------------- ---------------
Dividends and
distributions to
shareholders........... (16,914,884) (10,545,957)
--------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares subscribed.... 1,851,317,527 1,493,531,341
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 16,914,884 10,545,957
Cost of shares
reacquired............. (1,789,194,124) (1,560,523,700)
--------------- ---------------
Net increase (decrease)
in net assets from
Fund share
transactions......... 79,038,287 (56,446,402)
--------------- ---------------
Total increase (decrease) 79,038,287 (56,446,402)
Net Assets
Beginning of year........ 325,256,858 381,703,260
--------------- ---------------
End of year.............. $ 404,295,145 $ 325,256,858
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements appearing on page 30.
See Notes to Financial Statements appearing on page 30.
-18-
<PAGE>
COMMAND GOVERNMENT FUND
Financial Highlights
<TABLE>
<CAPTION>
Year Ended June 30,
-------------
---------------------------------------
1995
1994 1993 1992 1991
-------- --
------ -------- -------- --------
<S> <C>
<C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year............................... $ 1.000 $
1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains..................... .048
0.028 0.028 0.045 0.067
Dividends and distributions to shareholders...................... (.048)
(0.028) (0.028) (0.045) (0.067)
-------- --
------ -------- -------- --------
Net asset value, end of year..................................... $ 1.000 $
1.000 $ 1.000 $ 1.000 $ 1.000
-------- --
------ -------- -------- --------
-------- --
------ -------- -------- --------
TOTAL RETURN(a).................................................. 4.89%
2.86% 2.85% 4.56% 6.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000).................................... $404,295
$325,257 $381,703 $372,988 $414,978
Average net assets (000)......................................... $350,458
$376,159 $380,103 $422,639 $398,971
Ratios to average net assets:
Expenses, including distribution fees.......................... .65%
.63% .65% .69% .65%
Expenses, excluding distribution fees.......................... .53%
.51% .53% .57% .53%
Net investment income.......................................... 4.81%
2.79% 2.74% 4.38% 6.54%
</TABLE>
---------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
See Notes to Financial Statements appearing on page 30.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees of
Command Government Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, 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 Command Government Fund (the
``Fund'') at June 30, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
``financial statements'') are the responsibility of the Fund'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, 1995 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
August 21, 1995
-19-
<PAGE>
COMMAND TAX-FREE FUND Portfolio of Investments
June 30, 1995
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
ALABAMA--0.2%
Birmingham Medical
Clinic, F.R.D.D.,
4.06%, 7/3/95, Ser.
A1+* $ 2,100 91.................... $ 2,100,000
--------------
ALASKA--0.5%
Alaska Hsg. Fin. Corp.,
F.R.W.D.,
4.00%, 7/6/95, Ser.
VMIG1 5,000 94A................... 5,000,000
--------------
ARIZONA--4.1%
Maricopa County Poll.
Ctrl., T.E.C.P.,
3.75%, 9/12/95, Ser.
P1 19,830 85E................... 19,830,000
Salt River Agi. Impvt. &
Pwr., T.E.C.P.
P1 23,200 3.75%, 9/11/95.......... 23,200,000
--------------
43,030,000
--------------
CALIFORNIA--3.2%
California Higher Ed.
Ln. Auth. Inc.,
Student Ln. Rev.,
A.N.N.M.T.,
3.90%, 7/1/96, Ser.
VMIG1 17,900 87A................... 17,900,000
3.90%, 7/1/96, Ser.
VMIG1 4,885 92D................... 4,885,000
Student Ln. Rev. Rfdg.,
A.N.N.M.T.,
4.40%, 11/1/95, Ser.
VMIG1 10,800 93A................... 10,800,000
--------------
33,585,000
--------------
COLORADO--3.1%
Avon Cnty. Ind. Dev.
Rev., Beaver Creek
Proj., F.R.M.D.,
4.25%, 7/15/95, Ser.
P1 9,000 84.................... 9,000,000
Colorado Hsg. Fin.
Auth.,
Eagle Tax-Exempt
Trust, 94C,
F.R.W.D.S.,
4.25%, 7/6/95, Ser.
A1+* 21,700 0601.................. 21,700,000
Denver Cnty.
Multifamily,
Ogden Res. Project,
F.R.D.D.,
4.25%, 7/3/95, Ser.
VMIG1 $ 2,010 85.................... $ 2,010,000
--------------
32,710,000
--------------
CONNECTICUT--3.6%
Connecticut Spec. Tax
Oblig.,
Trans. Infrastructure
Rev.,
F.R.W.D.,
4.00%, 7/5/95, Ser. 90
VMIG1 20,600 I..................... 20,600,000
Connecticut St. Hsg.
Fin. Auth.,
A.N.N.M.T.,
4.40%, 11/15/95, Ser.
VMIG1 17,000 94E-1................. 16,982,137
--------------
37,582,137
--------------
DISTRICT OF COLUMBIA--4.5%
Dist. of Columbia Rev.,
F.R.D.D.,
4.40%, 7/3/95, Ser.
VMIG1 8,100 92A-1................. 8,100,000
4.40%, 7/3/95, Ser.
VMIG1 4,400 92A-2................. 4,400,000
4.40%, 7/3/95, Ser.
VMIG1 10,200 92A-3................. 10,200,000
4.40%, 7/3/95, Ser.
VMIG1 7,300 92A-4................. 7,300,000
4.40%, 7/3/95, Ser.
VMIG1 8,400 92A-5................. 8,400,000
4.40%, 7/3/95, Ser.
VMIG1 9,100 92A-6................. 9,100,000
--------------
47,500,000
--------------
FLORIDA--1.9%
Dade Cnty. Hlth. Facs.
Auth. Rev.,
Miami Children's Hosp.
Proj., F.R.D.D.,
4.45%, 7/3/95, Ser.
VMIG1 2,100 90.................... 2,100,000
Eustis Hlth. Fac. Auth.
Rev., Hosp./Waterman
Proj., F.R.W.D.,
VMIG1 4,380 4.05%, 7/6/95........... 4,380,000
</TABLE>
-20-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
FLORIDA--(cont'd)
Miami Hlth. Facs. Auth.
Rev.,
Miami Jewish Home &
Hosp., F.R.W.D.,
4.15%, 7/5/95, Ser.
CPS1 $ 7,000 92.................... $ 7,000,000
Orange Cnty. Hsg. Fin.
Multifamily,
4.95%, 7/1/95, Ser.
A1* 6,700 89B................... 6,700,000
--------------
20,180,000
--------------
GEORGIA--6.9%
Burke Cnty. Dev. Auth.,
Poll. Ctrl. Pwr. Plant
Co., Vogtle Proj.,
F.R.D.D.,
4.35%, 7/3/95, Ser.
VMIG1 12,300 94A................... 12,300,000
4.35%, 7/3/95, Ser.
VMIG1 1,200 94-8.................. 1,200,000
Clayton Cnty. Hsg. Auth.
Multifamily, Summer
Wind Proj., F.R.W.D.,
4.25%, 7/5/95, Ser.
A1* 6,555 89.................... 6,555,000
De Kalb Cnty. Dev.
Auth.,
General Motors,
F.R.W.D.,
4.20%, 7/4/95, Ser.
VMIG2 2,500 85.................... 2,500,000
Fulton Cnty. Dev. Auth.
Rev.,
Robert W. Woodruff Art
Center, F.R.W.D.,
4.15%, 7/6/95, Ser.
CPS1 22,500 93.................... 22,500,000
Municipal Gas Auth.
Rev.,
Southern Portfolio 1
Project, T.E.C.P.,
VMIG1 7,375 3.70%, 8/7/95, Ser. C... 7,375,000
Transco Project,
T.E.C.P.,
3.20%, 7/31/95, Ser.
VMIG1 14,700 B..................... 14,700,000
Private Colleges & Univ.
Fac.
Energy Proj.,
T.E.C.P.,
3.60%, 8/10/95, Ser.
VMIG1 6,000 93B................... 6,000,000
--------------
73,130,000
--------------
ILLINOIS--13.8%
Cook Cnty. Tender Notes,
Cap. Equip. Proj.,
F.R.W.D.,
VMIG1 $ 18,500 4.20%, 7/5/95, Ser. A... $ 18,500,000
Hazel Crest Village
Rev., Waterford
Estates Proj.,
F.R.W.D.,
4.20%, 7/7/95, Ser.
VMIG1 7,500 92A................... 7,500,000
Illinois Dev. Fin. Auth.
Poll., Rfdg.
Commonwealth
Edison Co. Proj. B,
F.R.W.D.,
4.10%, 7/5/95, Ser.
P1 6,000 94B................... 6,000,000
Illinois Dev. Fin. Auth.
Rev., Multifamily Hsg.
Proj. Rev., F.R.W.D.,
4.20%, 7/7/95, Ser.
A1* 18,900 92.................... 18,900,000
Palos Comm. Hosp.,
F.R.W.D.,
4.00%, 7/6/95, Ser.
VMIG1 19,800 94.................... 19,800,098
Illinois Hlth. Facs.
Auth. Rev.,
Children's Mem. Hosp.,
S.E.M.M.T.,
4.40%, 8/24/95, Ser.
VMIG1 15,000 90A................... 15,000,000
Evanston Hosp. Corp.
Proj., A.N.N.M.T.,
3.65%, 5/31/96, Ser.
VMIG1 18,000 95.................... 18,000,000
Evanston Hosp. Corp.
Proj., S.E.M.M.T.,
4.30%, 2/29/96, Ser.
VMIG1 10,500 92.................... 10,500,000
Illinois St. Toll Hwy.
Auth. Rev., F.R.W.D.,
4.25%, 7/5/95, Ser.
VMIG1 2,500 93B................... 2,500,000
Joliet Regional Port
Dist., Dow Chemical
Proj., F.R.D.D.,
4.35%, 7/3/95, Ser.
P1 300 85.................... 300,000
</TABLE>
-21-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
ILLINOIS--(cont'd)
Village of Vernon Hills,
Multifamily Various
Rfdg. Hsg. Hawthorn
Lakes Proj., F.R.W.D.,
4.20%, 7/7/95, Ser.
A1* $ 10,210 1991.................. $ 10,210,000
Wheeling Multifamily
Hsg. Rev., Woodland
Creek II, F.R.W.D.,
4.15%, 7/7/95, Ser.
SP-1+* 8,000 90.................... 8,000,000
Woodridge Dupage Cntys.,
Multifamily Hsg. Rev.
Rfdg., Hinsdale Terr.
Apts., F.R.W.D.,
4.20%, 7/7/95, Ser.
A1+* 10,760 90.................... 10,760,000
--------------
145,970,098
--------------
INDIANA--3.2%
Gary Environ. Impvt.
Rev., U.S. Steel
Corp., T.E.C.P.,
4.00%, 9/8/95, Ser.
VMIG1 13,200 86.................... 13,200,000
Indiana Ed. Fac. Auth.,
Wesleyan Univ.
F.R.W.D.,
4.20%, 7/6/95, Ser.
NR 10,000 93.................... 10,000,000
Indiana Hlth. Fac. Fin.
Auth. Rev.,
Baptist Homes of
Indiana, F.R.W.D.,
4.20%, 7/6/95, Ser.
NR 8,255 95.................... 8,255,000
Indianapolis Econ. Dev.,
Mmm-Invest, Inc.
Proj., F.R.W.D.,
NR 1,965 4.20%, 7/6/95........... 1,965,000
--------------
33,420,000
--------------
LOUISIANA--0.6%
Louisiana Pub. Facs.
Auth.,
Hosp. Equip. Rev.,
F.R.W.D.,
4.45%, 7/5/95, Ser.
VMIG1 6,900 85A................... 6,900,000
--------------
MAINE--2.0%
Biddeford Res. Rec.
Rev.,
Energy Recovery Co.
Proj., F.R.M.D.,
3.95%, 7/3/95, Ser.
VMIG1 $ 20,900 85.................... $ 20,900,000
--------------
MARYLAND--2.7%
Baltimore Cnty. Poll.
Ctrl. Rev.,
Gas & Elec Co.,
T.E.C.P.,
3.40%, 7/5/95, Ser.
VMIG1 6,000 85.................... 6,000,000
3.75%, 8/3/95, Ser.
VMIG1 5,500 85.................... 5,500,000
Maryland St. Econ. Dev.
Corp., F.R.W.D.,
4.20%, 7/6/95, Ser.
A1* 7,500 95.................... 7,500,000
Maryland St. Ind. Dev.
Fin. Auth.,
Baltimore Int'l.
Culinary, F.R.W.D.,
A-1* 10,010 4.15%, 7/5/95, Ser 94... 10,010,000
--------------
29,010,000
--------------
MASSACHUSETTS--3.2%
Massachusetts Hsg. Fin. Agcy.,
Sngl. Fam. Hsg. Rev.,
Q.T.R.O.T.3,
Aaa 11,340 3.90%, 9/1/95, Ser. 5... 11,340,000
Revere Hsg. Auth.,
Multifamily Mtge. Rev.
Waters Edge Proj.,
F.R.W.D.,
4.20%, 7/7/95, Ser.
A-1* 22,000 91C................... 22,000,000
--------------
33,340,000
--------------
MICHIGAN--4.1%
Michigan Municipal Bond
Auth. Rev.,
4.75%, 7/20/95, Ser.
SP-1+* 25,800 94B................... 25,809,683
</TABLE>
-22-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
MICHIGAN--(cont'd)
Michigan Strategic Poll.
Ctrl. Rev.,
Dow Chemical Co.
Proj., T.E.C.P.,
4.15%, 8/2/95, Ser.
P-1 $ 6,850 87.................... $ 6,850,000
Michigan Strategic Fund,
Poll. General Motors
Proj., F.R.W.D.,
4.10%, 7/4/95, Ser.
VMIG2 10,500 85.................... 10,500,000
--------------
43,159,683
--------------
MINNESOTA--3.7%
Bloomington Port Auth.
Tax Rev., F.R.W.D.,
4.15%, 7/7/95, Ser.
VMIG1 15,000 95A................... 15,000,000
City of Fridley Comm.
Dev. Rev.,
River Rd. Invsmt.
Proj., F.R.W.D.,
4.05%, 7/1/95, Ser.
A-1* 4,130 84.................... 4,130,000
Minnesota Hsg. Fin.
Agency., A.N.N.M.T.,
5.25%, 1/16/96, Ser.
VMIG1 12,500 93F................... 12,500,000
Minnetonka Multifamily
Hsg. Rev.,
Cliffs Ridgedale II
Proj., F.R.W.D.,
4.15%, 7/7/95, Ser.
A-1* 7,000 85A................... 7,000,000
--------------
38,630,000
--------------
MISSISSIPPI--0.7%
Harrison Cnty. Poll.
Ctrl. Rev.,
Mississippi Pwr. Co.
Proj., F.R.W.D.
4.15%, 7/5/95, Ser.
A1* 8,000 92.................... 8,000,000
--------------
MISSOURI--2.6%
Missouri Environ. Impvt.
&
Energy Res. Auth.,
Union Elec. Co.,
A.N.N.O.T.,
4.00%, 6/1/96, Ser.
P-1 $ 2,700 84A................... $ 2,700,000
4.00%, 6/1/96, Ser.
P-1 6,250 84B................... 6,250,000
Missouri St. Econ. Dev.
Export &
Infrastructure Board,
3.95%, 8/1/95, Ser.
MIG1 10,000 94C................... 10,000,000
St. Charles Cnty. Ind.
Dev. Auth.,
Cedar Ridge Apts.,
F.R.W.D.,
4.15%, 7/5/95, Ser.
A-1+* 8,405 88A................... 8,405,000
--------------
27,355,000
--------------
NEW JERSEY--4.1%
Jersey City, B.A.N.,
4.75%, 9/29/95, Ser.
NR 27,500 94.................... 27,523,007
Patterson, B.A.N.,
NR 15,584 5.25%, 1/29/96.......... 15,632,480
--------------
43,155,487
--------------
NEW MEXICO--1.8%
Albuquerque Airport
Rev., Sub. Lien,
F.R.W.D.,
4.15%, 7/5/95, Ser.
VMIG1 13,700 95.................... 13,700,000
Hurley Poll. Ctrl. Rev.,
Updates Kennecott
Santa Fe, F.R.D.D.,
4.25%, 7/3/95, Ser.
P-1 5,600 85.................... 5,600,000
--------------
19,300,000
--------------
NEW YORK--1.9%
New York City Gen.
Oblig., F.R.W.D.,
4.25%, 7/5/95, Ser.
VMIG1 7,900 95F-3................. 7,900,000
</TABLE>
-23-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
NEW YORK--(cont'd)
New York City Unltd.
Tax, F.R.W.D.S.,
4.40%, 7/6/95, Ser.
VMIG1 $ 12,200 33.................... $ 12,200,000
--------------
20,100,000
--------------
NORTH CAROLINA--1.3%
Cabarrus Cnty. Ind.
Facs. Auth.,
Poll. Ctrl. Rev.
Philip Morris Proj.,
F.R.W.D.,
4.15%, 7/5/95, Ser.
P-1 5,000 92.................... 5,000,000
Wake Cnty. Ind. Fac. &
Poll. Ctrl., T.E.C.P.,
3.85%, 8/4/95, Ser.
P-1 8,900 90B................... 8,900,000
--------------
13,900,000
--------------
OHIO--3.0%
Marion Cnty. Hosp.
Impvt. Rev.,
S.E.M.O.T.,
4.25%, 10/1/95, Ser.
A-1+* 7,280 92.................... 7,280,000
Ohio St. Air Quality
Dev. Auth. Rev.,
Cincinnati Elect. &
Gas, T.E.C.P.,
3.85%, 8/4/95, Ser.
P-1 15,600 85B................... 15,600,000
Toledo-Lucas Cnty.,
Convntn. & Visitors
Bureau, M.T.H.O.T.,
3.90%, 8/1/95, Ser.
VMIG1 8,375 88.................... 8,375,000
--------------
31,255,000
--------------
OKLAHOMA--0.5%
Muskogee Mall Proj.,
F.R.W.D,
4.25%, 7/5/95, Ser.
VMIG1 5,800 85.................... 5,800,000
--------------
OREGON--1.2%
Klamath Falls Elect.
Rev., Salt Caves
Hydroelectric Proj.,
A.N.N.M.T.,
4.40%, 5/2/96, Ser.
SP-1+* $ 7,425 86B................... $ 7,425,000
4.40%, 5/2/96, Ser.
SP-1+* 5,000 86D................... 5,000,000
--------------
12,425,000
--------------
PENNSYLVANIA--1.9%
Allegheny Cnty. Ind.
Dev. Rev.,
USX Corp., T.E.C.P.,
4.30%, 8/1/95, Ser.
P-1 8,200 86.................... 8,200,000
3.85%, 8/7/95, Ser.
P-1 12,000 86.................... 12,000,000
--------------
20,200,000
--------------
PUERTO RICO--0.2%
Puerto Rico
Commonwealth,
Gov't. Dev. Bank.,
F.R.W.D.,
3.80%, 7/5/95, Ser.
VMIG1 1,700 85.................... 1,700,000
--------------
SOUTH DAKOTA--2.5%
South Dakota School
Dist.,
4.50%, 8/1/95, Ser.
SP-1+* 15,755 94.................... 15,762,689
South Dakota Hlth. & Ed.
Rev.,
Mc Kennan Hosp. Proj.,
F.R.W.D.,
4.20%, 7/7/95, Ser.
VMIG1 11,000 94.................... 11,000,000
--------------
26,762,689
--------------
TENNESSEE--2.3%
Montgomery Cnty. Public
Bldg., F.R.W.D.,
4.20%, 7/6/95, Ser.
A-1* 11,000 95.................... 11,000,000
</TABLE>
-24-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
TENNESSEE--(cont'd)
Nashville & Davidson
Cnty.,
Beachwood Ter.,
F.R.W.D.,
4.20%, 7/7/95, Ser.
VMIG2 $ 8,995 89.................... $ 8,995,000
Smyrna Hsg. Assoc. Inc.,
Multifamily Hsg. Rev.,
F.R.W.D.,
4.20%, 7/7/95, Ser.
A-1* 4,285 89.................... 4,285,000
--------------
24,280,000
--------------
TEXAS--6.0%
Austin Util. Sys. Rev., F.R.W.D.S.,
4.35%, 7/6/95, Ser.
A-1+* 8,890 SG30.................. 8,890,000
Bexar Cnty. Hsg. Fin.
Corp.,
Windridge Apts.,
F.R.W.D.,
4.15%, 7/6/95, Ser.
A-1+* 6,270 95.................... 6,270,000
Brazos River Harbor Nav.
Dist.,
Dow Chemical Co.
Proj., T.E.C.P.,
3.75%, 8/8/95, Ser.
P-1 6,000 91.................... 6,000,000
4.50%, 10/18/95, Ser.
P-1 7,600 91.................... 7,600,000
DeSoto Ind. Dev. Auth.,
Nat'l. Svc. Inds. Inc.
Proj., F.R.W.D.,
4.15%, 7/6/95, Ser.
NR 7,150 91.................... 7,150,000
Harris Cnty. Hlth. Fac.
Dev. Corp.,
Methodist Hosp. Rev.,
F.R.D.D.,
4.50%, 7/3/95, Ser.
A1+* 2,800 94.................... 2,800,000
San Antonio Elec. & Gas
Rev., T.E.C.P.,
4.125%, 7/25/95, Ser.
P-1 4,800 A..................... 4,800,000
P-1 5,600 3.20%, 8/7/95, Ser. A... 5,600,000
Tarrant Cnty. Hlth. Fac.
Dev. Corp.,
Cumberland Proj.,
F.R.D.D.,
4.70%, 7/3/95, Ser.
A-1* $ 2,500 91.................... $ 2,500,000
Texas Board of Regents,
A & M University,
T.E.C.P.,
P-1 11,800 4.20%, 9/5/95, Ser. B... 11,800,000
--------------
63,410,000
--------------
UTAH--1.3%
Intermountain Pwr. Auth.
Supply Rev.,
3.85%, 6/17/96, Ser.
VMIG1 8,500 85E, A.N.N.O.T........ 8,500,000
3.90%, 8/17/95, Ser.
VMIG1 5,000 85E, T.E.C.P.......... 5,000,000
--------------
13,500,000
--------------
VIRGINIA--6.2%
Chesterfield Cnty. Ind.
Dev. Auth.,
Virginia Elec. & Pwr.
Co. Proj., T.E.C.P.,
4.00%, 8/8/95, Ser.
VMIG1 17,600 87A................... 17,600,000
3.80%, 9/5/95, Ser.
VMIG1 14,100 85.................... 14,100,000
Philip Morris Proj.,
F.R.W.D.,
P-1 8,500 4.15%, 7/5/95........... 8,500,000
Harrisonburg Redev. &
Hsg. Auth.,
Multifamily Hsg. Rev.,
F.R.W.D.,
4.15%, 7/6/95, Ser.
VMIG1 13,000 91A................... 13,000,000
York Cnty. Ind. Dev.
Auth.,
Virginia Elec. & Pwr.
Co.,
VMIG1 12,500 4.20%, 8/9/95........... 12,500,000
--------------
65,700,000
--------------
</TABLE>
-25-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
WASHINGTON--0.3%
Washington St. Hsg. Fin.
Comm.,
Snohomish Cnty. YMCA
Proj., F.R.D.D.,
4.65%, 7/3/95, Ser.
VMIG1 $ 2,800 94.................... $ 2,800,000
--------------
WYOMING--0.2%
Lincoln Cnty. Poll.
Ctrl. Rev.,
Pacificorp Proj.,
T.E.C.P.,
4.20%, 8/2/95, Ser.
VMIG1 2,500 91.................... 2,500,000
--------------
Total Investments--99.3%
(amortized cost
$1,048,290,094)....... 1,048,290,094
Other assets in excess
of
liabilities--0.7%..... 7,277,552
--------------
Net Assets--100%........ $1,055,567,646
--------------
--------------
</TABLE>
(a) The following abbreviations are used in portfolio descriptions:
A.N.N.M.T.--Annual Mandatory Tender
A.N.N.O.T.--Annual Optional Tender
B.A.N.--Bond Anticipation Note
F.R.D.D.--Floating Rate (Daily) Demand Note**
F.R.M.D.--Floating Rate (Monthly) Demand Note**
F.R.W.D.--Floating Rate (Weekly) Demand Note**
F.R.W.D.S.--Floating Rate Weekly Demand--Synthetic
M.T.H.O.T.--Monthly Optional Tender
Q.T.R.O.T.3--Quarterly Third Party Optional Tender
S.E.M.M.T.--Semi-Annual Mandatory Tender
S.E.M.O.T.--Semi-Annual Optional Tender
T.E.C.P.--Tax Exempt Commercial Paper
* Standard & Poor's Rating.
** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the later of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current statement of Additional Information contains a description of
Moody's and Standard & Poor's ratings.
-26-
See Notes to Financial Statements appearing on page 30.
<PAGE>
COMMAND TAX-FREE FUND
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets
June 30, 1995
-----------------
<S>
<C>
Investments, at
value................................................................. $
1,048,290,094
Cash............................................................................
...... 20,644
Receivable for Fund shares
sold....................................................... 26,134,780
Receivable for investments
sold....................................................... 13,500,000
Interest
receivable...................................................................
8,377,549
Prepaid
expenses......................................................................
29,454
-----------------
Total
assets........................................................................
1,096,352,521
-----------------
Liabilities
Payable for investments
purchased.....................................................
22,789,937
Payable for Fund shares
repurchased...................................................
17,359,188
Due to
Manager........................................................................
397,676
Accrued
expenses......................................................................
180,552
Due to
Distributor....................................................................
57,522
-----------------
Total
liabilities...................................................................
40,784,875
-----------------
Net Assets
Applicable to 1,055,567,646 shares of beneficial interest ($.01 par value)
issued and
outstanding;
unlimited number of shares
authorized............................................... $ 1,055,567,646
-----------------
-----------------
Net asset value, offering price and redemption price per share ($1,055,567,646 /
1,055,567,646
shares)...............................................................
$1.00
-----------------
-----------------
</TABLE>
See Notes to Financial Statements appearing on page 30.
-27-
<PAGE>
COMMAND TAX-FREE FUND
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
June 30,
Net Investment Income 1995
-------------
<S> <C>
Income
Interest............................ $ 34,377,013
-------------
Expenses
Management fee...................... 4,314,275
Distribution fee.................... 1,158,610
Custodian's fees and expenses....... 205,000
Transfer agent's fees............... 184,000
Registration fees................... 70,000
Trustees' fees...................... 56,000
Audit fee and expenses.............. 41,000
Reports to shareholders............. 40,000
Insurance expense................... 28,000
Legal fees.......................... 20,000
Miscellaneous....................... 11,656
-------------
Total expenses.................... 6,128,541
-------------
Net investment income................. 28,248,472
-------------
Realized gain on Investments
Net realized gain on investment
transactions........................ 45
-------------
Net Increase in Net Assets
Resulting from Operations............. $ 28,248,517
-------------
-------------
</TABLE>
COMMAND TAX-FREE FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
Increase (Decrease) in ---------------------------------
Net Assets 1995 1994
--------------- ---------------
<S> <C> <C>
Operations
Net investment
income............... $ 28,248,472 $ 17,833,245
Net realized gain on
investment
transactions....... 45 243
--------------- ---------------
Net increase in net
assets resulting
from operations.... 28,248,517 17,833,488
--------------- ---------------
Dividends and
distributions to
shareholders......... (28,248,517) (17,833,488)
--------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares
subscribed......... 4,346,712,584 3,949,124,328
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions...... 28,248,517 17,833,488
Cost of shares
reacquired........... (4,166,995,198) (3,973,285,613)
--------------- ---------------
Net increase
(decrease) in net
assets from Fund
share
transactions....... 207,965,903 (6,327,797)
--------------- ---------------
Total increase
(decrease)........... 207,965,903 (6,327,797)
Net Assets
Beginning of year...... 847,601,743 853,929,540
--------------- ---------------
End of year............ $ 1,055,567,646 $ 847,601,743
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements appearing on page 30.
See Notes to Financial Statements appearing on page 30.
-28-
<PAGE>
COMMAND TAX-FREE FUND
Financial Highlights
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------
---------------------------------------
1995
1994 1993 1992 1991
---------- -----
--- -------- -------- --------
<S> <C> <C>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year........................ $ 1.000 $
1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains.............. 0.032
0.020 0.022 0.035 0.049
Dividends and distributions to shareholders............... (0.032)
(0.020) (0.022) (0.035) (0.049)
---------- -----
--- -------- -------- --------
Net asset value, end of year.............................. $ 1.000 $
1.000 $ 1.000 $ 1.000 $ 1.000
---------- -----
--- -------- -------- --------
---------- -----
--- -------- -------- --------
TOTAL RETURN(a)........................................... 3.29%
1.98% 2.23% 3.53% 5.02%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)............................. $1,055,568
$847,602 $853,930 $729,122 $750,567
Average net assets (000).................................. $ 926,888
$908,421 $823,517 $751,458 $770,745
Ratios to average net assets:
Expenses, including distribution fees................... .66%
.65% .68% .69% .66%
Expenses, excluding distribution fees................... .54%
.53% .55% .56% .54%
Net investment income................................... 3.05%
1.96% 2.09% 3.47% 4.88%
</TABLE>
---------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
See Notes to Financial Statements appearing on page 30.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees of
Command Tax-Free Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, 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 Command Tax-Free Fund (the
``Fund'') at June 30, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
``financial statements'') are the responsibility of the Fund'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, 1995 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
August 21, 1995
-29-
<PAGE>
COMMAND FUNDS
Notes to Financial Statements
Command Money Fund, Command Govemment Fund, and Command Tax-Free Fund
(collectively, the Funds ) are each registered under the Investment Company Act
of 1940 as an open-end, diversified management investment company whose shares
are offered exclusively to participants in the Prudential Securities Command
Account Program of Prudential Securities Incorporated ( Prudential Securities ).
The Funds invest in a portfolio of money market instruments maturing in 13
months or less whose ratings are within the two highest ratings categories by a
nationally recognized statistical rating agency or, if not rated, are of
comparable quality. The ability of the issuers of the securities held by the
Funds to meet their obligations may be affected by economic and/or political
developments in a specific industry, state or region.
Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium. If the amortized cost
method is determined not to represent fair value, the value shall be determined
by or under the direction of the Board of Trustees. All securities are valued as
of 4:30 p.m., New York time.
In connection with transactions in repurchase agreements, it is the Funds'
policy that its custodian or designated subcustodians, as the case may be under
triparty repurchase agreements, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. If the seller defaults and the value of
the collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Funds may be
delayed or limited.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The cost of portfolio securities for federal income tax purposes
is substantially the same as for financial reporting purposes.
Federal Income Taxes: Each Fund intends to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income to its shareholders.
Therefore, no federal income tax provision is required.
Dividends: Each Fund declares all of its net investment income as dividends
daily to its shareholders of record at the time of such declaration. Dividends
are reinvested daily into additional full and fractional shares of the
respective Fund at the net asset value per share detemined on the date of
declaration. Net investment income for dividend purposes includes accrued
interest and amortization of premiums and discounts, plus or minus any gains or
losses realized on sales of portfolio securities, and less the estimated
expenses of the Fund applicable to the dividend period.
Note 2. Agreements Each Fund has a manage
ment agreement with Prudential Mutual Fund
Management, Inc. ( PMF ). Pursuant to this agreement PMF has responsibility for
all investment advisory services and supervises the subadviser's performance of
such services. PMF has entered into a subadvisory agreement with the Prudential
Investment Corporation (PIC); PIC furnishes investment advisory services in
connection with the management of the Funds. PMF pays for the cost of the
subadvisor's services, the compensation of officers of the Funds, occupancy and
certain clerical and bookkeeping costs of the Funds. The Funds bear all other
costs and expenses.
The management fee paid PMF is computed daily and payable monthly on the
following basis:
<TABLE>
<CAPTION>
Average Daily Command Command Command
Net Assets Money Government Tax-Free
------------------------------------ ------- ---------- -------
<S> <C> <C> <C>
First $500 million.................. .500% .400% .500%
Second $500 million................. .425% .400% .425%
Third $500 million.................. .375% .375% .375%
Excess of $1.5 billion.............. .350% .375% .375%
</TABLE>
Each Fund has a distribution agreement with Prudential Mutual Fund
Distributors, Inc. ( PMFD ). To reimburse PMFD for its expenses incurred
pursuant to a plan of distribution, the Funds pay PMFD a reimbursement, accrued
daily and payable monthly, at an annual rate of .125 of 1% of each Fund's
average daily net assets. PMFD pays various broker-dealers, including Prudential
Securities and Pruco Securities Corporation, affiliated broker-dealers, for
account servicing fees and other expenses incurred by such brokers-dealers.
-30-
<PAGE>
PMFD is a wholly-owned subsidiary of PMF; Prudential Securities, PMF and PIC
are (indirect) wholly-owned subsidiaries of The Prudential Insurance Company of
America.
Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (PMFS), a wholly-
with Affiliates owned subsidiary of PMF,
serves as the Funds' transfer agent.
As of June 30, 1995, the following amounts were due to PMFS from the Funds:
<TABLE>
<S> <C>
Command Money.................................... $128,222
Command Government............................... $ 6,244
Command Tax-Free................................. $ 15,649
</TABLE>
Note 4. Joint The Command Government
Repurchase Fund, along with other affili-
Agreement Account ated registered investment
companies, transfers un-
invested cash balances into a single joint account, the daily aggregate balance
of which is invested in one or more repurchase agreements collateralized by U.S.
Treasury or Federal agency obligations. As of June 30, 1995, the Command
Government Fund had a 0.1% undivided interest in the joint account. The
undivided interest for the Command Government Fund represents $704,000 in the
principal amount. As of such date, each repurchase agreement in the joint
account and the collateral therefore were as follows:
Bear, Stearns & Co. Inc., 6.125%, in the principal amount of $200,000,000,
repurchase price $200,102,083, due 7/3/95. The value of the collateral including
accrued interest is $204,321,562.
CS First Boston Corp., 6.13%, in the principal amount of $160,000,000,
repurchase price $160,081,733, due 7/3/95. The value of the collateral including
accrued interest is $163,246,196.
Goldman, Sachs & Co., 6.10%, in the principal amount of $116,557,000,
repurchase price $116,616,250, due 7/3/95. The value of the collateral including
accrued interest is $118,889,059.
Smith Barney, Inc., 6.13%, in the principal amount of $200,000,000,
repurchase price $200,102,166, due 7/3/95. The value of the collateral including
accrued interest is $204,000,775.
-31-
<PAGE>
FEDERAL INCOME TAX INFORMATION
COMMAND TAX-FREE FUND:
We are required by the Internal Revenue Code to advise you within 60 days of
the Command Tax-Free Fund's fiscal year end (June 30, 1995) as to the federal
tax status of dividends and distributions paid by the Fund during such fiscal
year. Accordingly, we are advising you that for the year ended June 30, 1995,
dividends paid from net investment income totalling $.032 per share were all
federally tax-exempt interest dividends.
COMMAND GOVERNMENT FUND:
IMPORTANT NOTICE FOR CERTAIN SHAREHOLDERS
We are required by Massachusetts and Oregon to inform you that dividends
which have been derived from interest on federal obligations are not taxable to
shareholders providing the mutual fund meets certain requirements mandated by
the respective state's taxing authorities. We are pleased to report that 30.4%
of the dividends paid by the Command Government Fund qualify for such deduction.
For more detailed information regarding your state and local taxes, you
should contact your tax advisor or the state/local taxing authorities.
-32-
<PAGE>
Trustees
Edward D. Beach
Delayne Dedrick Gold
Harry A. Jacobs, Jr.
Lawrence C. McQuade
Richard A. Redeker
Stanley E. Shirk
Langdon R. Stevenson
Stephen Stoneburn
Nancy H. Teeters
David S. Towner
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace Torres, Treasurer
S. Jane Rose, Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
(LOGO)
