SEMI ANNUAL REPORT
December 31, 1995
Prudential Securities
Command Account
_________________
Command Money Fund
Command Government Fund
Command Tax-Free Fund
(LOGO)
<PAGE>
Dear Shareholder:
Letter to Shareholders
February 9, 1996
For the Prudential Securities Command Series' money market investor, the
past six months have featured sound performance. During the year, the
Command Money and Command Government funds took advantage of rising
interest rates early on and then anticipated falling rates later.
The Command Tax-Free Fund produced attractive tax-free income, which
for the 7- day period ending December 29, 1995, was equivalent to 6.16%
taxable yield for those in the 39.6% income tax bracket.
<TABLE>
FUND FACTS
As of 12/31/95
<CAPTION>
7 Day Net Asset Weighted Total
Net
Current Yld. Value Avg. Mat. Assets
(mil.)
<S> <C> <C> <C> <C>
Command Money 5.29% $1.00 51 days $
4,412
IBC/Donoghue Money 5.16% $1.00 54 days N/A
Fund Average (All Taxable)1
Command 5.12% $1.00 41 days $ 458
Government
IBC/Donoghue Total 4.96% $1.00 49 days N/A
Government Universe2
Command 3.72% $1.00 56 days $ 901
Tax-Free3
IBC/Donoghue 3.67% $1.00 52 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 the average 7-day current yield, NAV and WAM of 771 funds in the
International Business Communications/Donoghue all taxable money market
fund category for December 26, 1995.
2 This is the average 7-day current yield, NAV and WAM of 229 funds in
IBC/Donoghue's total government universe fund category for December 26, 1995.
3 Some investors may be subject to the federal alternative minimum tax.
Income may be subject to state and local taxes.
4 This is the average 7-day current yield, NAV and WAM of 141 funds in
IBC/Donoghue's stockbroker & general purpose tax-free money fund category
for December 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. The Fund invests in a diversified
portfolio of short-term, tax-exempt securities with maturities of
13 months or less that are issued by states, municipalities and their
agencies (or authorities).
There can be no assurance that any of the Funds will achieve their
respective objectives.
Strategy Session.
The investment strategy for the Command Money and Government funds is,
by necessity, dependent upon Federal Reserve policy. Correctly anticipating
moves by the central bank is the key to preserving competitive yields for
a money fund. This is true whether short-term interest rates rise or fall.
The Command Tax-Free Fund, while affected by central bank policy, is
driven more by supply-and- demand factors in the short-term municipal
securities markets.
The Federal Reserve seeks to indirectly influence the nation's economy
by managing the federal funds rate (the rate banks charge each other
for overnight loans). The goal is to promote sustainable economic
growth without triggering higher levels of inflation.
During periods of rising inflation, the central bank may raise the rate.
This increases the cost to banks to borrow money. The banks, in turn,
raise their rates for consumer and business loans. As the cost of borrowing
rises, individuals and businesses will have less money to spend on goods,
services and other items. The economy slows and inflation eases.
Conversely, if the economy is sluggish or is in recession, the Federal
Reserve may lower the federal funds rate. This makes borrowing cheaper
for banks who then lower their loan rates to consumers and businesses.
Spending on goods and services increases and the economy grows. At
least that's the theory, and it usually works.
2
<PAGE>
High Tide For Interest Rates.
When 1995 began, short-term interest rates were still rising. By the end
of February, the federal funds rate had risen 300 basis points to 6% from
3% of only a year earlier (a basis point is 1/100 of a percentage point).
It would be the last time short-term rates would be that high for the
remainder of the year.
During this period of rising rates the strategy for the Command Money
Fund and Command Government Fund was straightforward: shorten the
portfolio's maturity in anticipation of each Federal Reserve announcement
and then lengthen maturity immediately afterwards to lock in the new,
higher yields, which would periodically plateau after each central
bank move.
The Economy Slows . . .
Eighteen months of higher rates were specifically engineered to quell
inflation -- and that's exactly what they did. By the second quarter
of 1995, the annualized inflation rate was still about 3%, but the
underlying inflationary pressures were easing. Clearly, inflation
had nowhere to go but down. Unfortunately, the same could be said for
the economy.
As the second quarter ended, Gross Domestic Product (GDP), the total
value of goods produced by the nation, had fallen sharply to 1.3%.
It was a substantial drop from the 2.7% GDP recorded in the first
quarter of 1995, and was downright anemic when compared to the 5.1%
from the fourth quarter of 1994. There was serious concern that the
economy was slipping toward recession.
. . . And Interest Rates Fall.
The Federal Reserve saw those warning signs and at its July 6 meeting
declared its campaign against inflation a success. It then reversed
course and began lowering the federal funds rate by 25 basis points
to 5.75%. The stimulus was warmly welcomed by investors. Stocks
skyrocketed to new heights and the bond market surged. The economy
also accelerated and GDP increased to about 3.5% by the end of the
third quarter.
Despite the stimulus, economic growth began to decelerate again in
the fourth quarter and GDP was projected to finish the year at an
annual rate of only 2%. This outlook, plus favorable inflation news,
led the Federal Reserve to lower short-term rates again in mid-December
to 5.50% or 25 basis points lower than last summer.
3
<PAGE>
What Went Well.
Preserving Yield.
As rates began to decline in the second half of the year, the goal of
the Command Funds was to preserve a competitive yield for you. We did
so by correctly anticipating the central bank's first move to lower
rates in July and extending maturity before rates were cut. Over the
past six months, the maturity of the Command Money, Command Government
and Command Tax-Free money market funds were generally positioned
longer than the average money fund tracked by IBC/Donoghue.
Increasing our exposure to longer term, fixed-rate securities also
allowed us to hold on to higher yields longer.
Looking For Attractive Investments.
High quality, variable rate securities, which currently reset off
of daily, one-month or other periodic interest rates, were an attractive
investment for the Command Money and Command Government funds late in
the year and may continue to be so into early 1996.
Variable rate securities are different from other money market investments
because their coupons (or yield) change frequently. These securities are
linked to various independent, short-term interest rate indices such as
the federal funds rate, the London interbank offering rate (LIBOR) or
Treasury bills. Given the right conditions, variable rate securities
can play an important role in preserving or enhancing yield.
Conditions were not right last summer. Prior to -- and then after -- the
July interest rate cut, market indices moved steadily lower. At that time
it made sense to pare our variable rate holdings and we did.
Conditions were better later in the year. As we've stated, variable rate
securities reset to various market indices. These indices generally move
in tandem, but in varying degrees. As the year drew to a close, LIBOR-based
variable instruments generally had higher yields than variable rate
securities tied to the other market indices, such as the federal funds
rate or Treasury bills. The Command Money Fund benefited from this
development since the majority of our variable-rate holdings
were concentrated in LIBOR-based instruments (13.07% as of 12/29/95).
A Change In Investment Policy For The Tax-Free Fund.
To increase its investment flexibility, the Command Tax-Free Fund no
longer intends to avoid purchases of municipal bonds and municipal
notes, the interest on which may be a preference item for the purpose
of the federal Alternative Minimum Tax (AMT paper). The Command Tax-Free
Fund may invest not more than 20% of its net assets in AMT paper.
4
<PAGE>
What Could Have Gone Better.
Bond markets tend to anticipate Federal Reserve policy rather than react
to it. As a result, longer term money market rates have already priced in
expectations for lower interest rates. This has caused an "inverted yield
curve" in the short-term bond markets, which meant that three-month rates
were higher than one-year rates.
Although we correctly anticipated the lowering of short-term interest rates
by the Federal Reserve, we did not expect the yield curve to invert to the
extent that it did. Looking back, we could have been more aggressively
positioned in longer term, fixed-rate securities as the curve inverted.
Looking back, the Command Tax-Free Fund would have liked to have been able
to take greater advantage of higher yields in December (supply usually
dries up and rates fall in January). We were unable to do so. Why? At
year-end, many investors redeem shares for tax purposes, to pay for holiday
purchases or for other reasons.
Because we had to accommodate this seasonal surge in redemptions, we were
unable to extend the Fund's maturity and lock in the higher yields to the
extent that we wanted.
A Word About Quality.
As of December 31, 1995, all of the securities held by either the Command
Money Fund, Command Government Fund or Command Tax-Free Fund were ranked
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. For the Command Money
Fund, investments deemed to be of equivalent quality that were not rated,
were subject to Board ratification.
Although there is never a guarantee that the share price of Command
Funds will remain at $1, we emphasize a conservative, quality-oriented
investment approach.
Looking Ahead.
Variable Rate Securities: Opportunity Knocks.
As December drew to a close, the Command Money Fund and Command
Government Fund liked the yield opportunities offered by some variable
rate securities and we will likely be purchasing them in 1996.
- -- As long as the yield curve remains inverted, money market investors
will not have to extend maturity to get higher yields.
5
<PAGE>
- -- As 1995 ended, the economy appeared locked in low gear. We believed
that at 5.5%, the federal funds rate was still too high to encourage an
expanding economy and the specter of a near recession could not be ignored.
In fact, on January 31, 1996, the Federal Reserve once again lowered the
federal funds rate 25 basis points to 5.25%. We believe that the Federal
Reserve will take a "go slow" approach in lowering short-term rates
further. A gradual reduction in short-term rates rewards
patience and should allow us to extend the average maturity of the Fund
only when longer term securities represent better relative value.
The Command Tax-Free Fund will also be watching central bank policy
closely. Seasonal supply-and-demand factors notwithstanding, short-term
municipal securities markets will adjust to these new lower rates just
as they did when rates were increasing. Given such an environment, we
shall continue to seek out issues that offer attractive yields at fair
prices in our ongoing effort to enhance your tax-free yield.
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
6
<PAGE>
COMMAND MONEY FUND Portfolio of Investments
December 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
BANK HOLDING PAPER--2.5%
Chase Manhattan Corp.
$ 39,000 5.67%, 2/12/96............. $ 38,742,015
First Union Corp.
36,000 5.71%, 2/9/96.............. 35,777,310
PNC Funding Corp.
17,000 5.73%, 2/8/96.............. 16,897,178
17,000 5.71%, 3/1/96.............. 16,838,217
--------------
Total Bank Holding Paper
(amortized cost
$108,254,720)............ 108,254,720
--------------
BANK NOTES--3.7%
Bank of America, Illinois
11,000 5.79%, 1/16/96............. 10,999,955
First Union National Bank,
N.C.
66,000 5.80%, 1/31/96............. 66,000,000
37,000 5.78%, 2/9/96.............. 37,000,000
Nationsbank Texas, NA
25,000 7.55%, 1/9/96.............. 25,004,339
25,000 7.30%, 1/26/96............. 25,007,111
--------------
Total Bank Notes
(amortized cost
$164,011,405)............ 164,011,405
--------------
CERTIFICATES OF DEPOSIT--
EURODOLLAR--4.1%
Abbey National Treasury
Services, PLC.
23,000 5.80%, 1/22/96............. 23,000,132
Bank Nationale De Paris
7,000 5.77%, 1/22/96............. 6,999,799
Bayerische Hypotheken
37,000 5.78%, 1/16/96............. 36,999,313
111,000 5.83%, 1/16/96............. 111,000,912
Lloyds Bank, PLC.
3,000 5.75%, 1/22/96............. 2,999,854
--------------
Total Certificates of
Deposit--
Eurodollar
(amortized cost
$181,000,010)............ 181,000,010
--------------
CERTIFICATES OF DEPOSIT--13.0%
Bank of Nova Scotia
$ 10,000 5.77%, 2/1/96.............. $ 9,999,736
Banque Nationale De Paris
19,000 5.78%, 1/22/96............. 18,999,719
54,000 5.80%, 2/2/96.............. 54,000,000
29,000 6.95%, 2/21/96............. 29,011,451
Bayerische Hypotheken
16,000 5.80%, 1/16/96............. 15,999,957
25,000 5.80%, 2/6/96.............. 24,999,885
Commerzbank
3,000 7.32%, 1/24/96............. 3,001,245
16,000 7.10%, 2/2/96.............. 16,006,054
10,000 6.45%, 4/17/96............. 9,999,968
National Westminster Bank
PLC
92,000 5.81%, 1/12/96............. 92,000,000
73,000 5.80%, 1/31/96............. 73,000,000
Societe Generale North
America, Inc.
16,000 5.67%, 1/31/96............. 15,998,056
85,000 5.80%, 2/1/96.............. 85,000,000
Swiss Bank Corp.
128,000 5.75%, 3/20/96............. 128,000,000
--------------
Total Certificates of
Deposit
(amortized cost
$576,016,071)............ 576,016,071
--------------
COMMERCIAL PAPER--54.0%
A.H. Robins Co., Inc.
9,000 5.80%, 1/19/96............. 8,973,900
24,000 5.68%, 3/7/96.............. 23,750,080
American Express Credit
Corp.
3,350 5.82%, 2/2/96.............. 3,332,669
33,000 5.67%, 2/13/96............. 32,776,508
13,000 5.59%, 3/15/96............. 12,850,623
American Home Food
Products, Inc.
33,464 5.80%, 1/17/96............. 33,377,737
</TABLE>
-7-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--(cont'd)
American Home Products
Corp.
$ 10,475 5.80%, 1/18/96............. $ 10,446,310
4,000 5.68%, 3/7/96.............. 3,958,347
American Honda Finance
Corp.
16,000 5.85%, 1/12/96............. 15,971,400
8,000 5.75%, 1/17/96............. 7,979,556
6,774 5.85%, 1/24/96............. 6,748,682
13,000 5.90%, 1/29/96............. 12,940,345
4,000 5.845%, 1/30/96............ 3,981,166
4,350 5.75%, 2/13/96............. 4,320,124
Aristar, Inc.
4,000 5.80%, 1/19/96............. 3,988,400
4,000 5.90%, 1/24/96............. 3,984,922
7,000 5.80%, 2/2/96.............. 6,963,911
3,000 5.77%, 2/5/96.............. 2,983,171
Asset Securitization
Cooperative Corp.
50,000 5.70%, 1/23/96............. 49,825,833
Associates Corp. of North
America
65,000 5.71%, 2/1/96.............. 64,680,398
57,000 5.71%, 2/2/96.............. 56,710,694
12,000 5.68%, 2/8/96.............. 11,928,053
40,000 5.68%, 2/13/96............. 39,728,622
Bank of Montreal
133,000 5.72%, 1/29/96............. 132,408,298
Bradford & Bingley Building
Society
25,000 5.74%, 1/17/96............. 24,936,222
16,000 5.52%, 3/5/96.............. 15,842,987
Caterpillar Financial
Services
12,000 5.66%, 2/21/96............. 11,903,780
15,000 5.67%, 2/27/96............. 14,865,337
CIT Group Holdings, Inc.
25,000 5.78%, 1/25/96............. 24,903,667
66,295 5.67%, 2/5/96.............. 65,929,549
51,000 5.68%, 2/7/96.............. 50,702,273
Cogentrix, Inc.
8,945 5.95%, 1/24/96............. 8,910,997
Corporate Receivables Corp.
$ 17,000 5.75%, 1/16/96............. $ 16,959,271
45,100 5.75%, 1/18/96............. 44,977,541
7,000 5.625%, 2/28/96............ 6,936,562
Countrywide Funding Corp.
27,000 5.83%, 1/16/96............. 26,934,412
25,000 5.84%, 1/18/96............. 24,931,056
9,000 5.87%, 1/22/96............. 8,969,182
7,000 6.00%, 1/22/96............. 6,975,500
47,000 6.00%, 1/23/96............. 46,827,667
Dean Witter, Discover & Co.
24,000 5.70%, 2/8/96.............. 23,855,600
26,000 5.70%, 2/14/96............. 25,818,867
Enterprise Funding Corp.
8,000 5.75%, 1/19/96............. 7,977,000
Falcon Asset Securitization
Corp.
5,800 5.75%, 1/16/96............. 5,786,104
Finova Capital Corp.
28,000 5.97%, 1/5/96.............. 27,981,427
53,040 5.97%, 1/8/96.............. 52,978,429
27,543 6.00%, 1/12/96............. 27,492,505
Fleet Mortgage Group, Inc.
5,000 5.80%, 1/16/96............. 4,987,917
8,000 5.80%, 1/24/96............. 7,970,355
19,000 5.81%, 1/25/96............. 18,926,407
Ford Motor Credit Corp.
50,000 5.75%, 1/22/96............. 49,832,292
90,695 5.71%, 2/1/96.............. 90,249,058
35,000 5.67%, 2/13/96............. 34,762,962
10,000 5.53%, 3/4/96.............. 9,903,225
General Electric Capital
Corp.
45,000 5.66%, 2/8/96.............. 44,731,150
28,000 5.58%, 4/8/96.............. 27,574,680
63,000 5.58%, 4/9/96.............. 62,033,265
General Motors Acceptance
Corp.
9,000 5.77%, 2/2/96.............. 8,953,840
6,081 5.73%, 2/6/96.............. 6,046,156
165,000 5.75%, 2/20/96............. 163,682,292
</TABLE>
-8-
See Notes to Financial Statements appearing on page 29.
<PAGE>
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--(cont'd)
Goldman, Sachs Group, L.P.
$ 11,000 6.05%, 1/12/96............. $ 10,979,665
GTE Corp.
12,405 5.87%, 1/19/96............. 12,368,591
38,000 5.95%, 1/30/96............. 37,817,864
8,000 5.95%, 1/31/96............. 7,960,334
Hanson Finance (U.K.), PLC.
5,000 5.70%, 1/19/96............. 4,985,750
30,000 5.70%, 1/26/96............. 29,881,250
10,000 5.70%, 1/31/96............. 9,952,500
23,000 5.70%, 2/8/96.............. 22,861,617
25,000 5.65%, 2/28/96............. 24,772,430
Heller Financial Services,
Inc.
25,000 5.90%, 1/11/96............. 24,959,028
Hertz Corp.
20,000 5.71%, 2/5/96.............. 19,888,972
Honeywell, Inc.,
9,000 5.77%, 1/9/96.............. 8,988,460
Lehman Brothers Holdings,
Inc.
883 6.10%, 1/2/96.............. 882,850
Merrill Lynch & Co., Inc.
19,000 5.72%, 1/31/96............. 18,909,433
21,000 5.76%, 1/31/96............. 20,899,200
83,000 5.64%, 2/29/96............. 82,232,803
15,000 5.60%, 3/29/96............. 14,794,667
Morgan Stanley Group, Inc.
59,000 5.72%, 1/12/96............. 58,896,881
13,000 5.75%, 1/25/96............. 12,950,167
NYNEX Corp.,
18,000 5.82%, 1/9/96.............. 17,976,720
12,000 5.82%, 1/16/96............. 11,970,900
10,000 5.80%, 1/19/96............. 9,971,000
15,000 5.75%, 2/6/96.............. 14,913,750
PHH Corp.
12,000 5.83%, 1/23/96............. 11,957,247
Preferred Receivables
Funding Corp.
$ 14,800 5.85%, 1/16/96............. $ 14,763,925
17,000 5.70%, 2/12/96............. 16,886,950
Riverwoods Funding Corp.
26,000 5.70%, 2/6/96.............. 25,851,800
3,000 5.71%, 2/7/96.............. 2,982,394
5,000 5.68%, 2/16/96............. 4,963,711
Sears Roebuck Acceptance
Corp.
15,000 5.70%, 2/6/96.............. 14,914,500
19,000 5.72%, 2/12/96............. 18,873,206
12,000 5.72%, 2/23/96............. 11,898,947
12,000 5.72%, 2/26/96............. 11,893,227
Sherwood Medical Co.
11,200 5.80%, 1/19/96............. 11,167,520
Smith Barney, Inc.
34,000 5.74%, 1/30/96............. 33,842,788
Special Purpose Accounts
Receivable Co.
10,000 5.78%, 1/23/96............. 9,964,678
18,000 5.75%, 1/24/96............. 17,933,875
6,000 5.78%, 1/24/96............. 5,977,843
USL Capital Corp.
3,000 5.75%, 1/19/96............. 2,991,375
WCP Funding, Inc.
6,000 5.75%, 1/24/96............. 5,977,958
9,000 5.70%, 2/16/96............. 8,934,450
3,000 5.65%, 2/28/96............. 2,972,692
Whirlpool Financial Corp.
3,000 5.80%, 1/23/96............. 2,989,366
10,000 5.80%, 1/30/96............. 9,953,278
--------------
Total Commercial Paper
(amortized cost
$2,385,165,845).......... 2,385,165,845
--------------
</TABLE>
-9-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
MEDIUM-TERM OBLIGATIONS--3.9%
Associates Corp. of North
America
$ 4,000 8.75%, 2/1/96.............. $ 4,006,311
3,000 8.80%, 3/1/96.............. 3,011,027
Bayerische Hypotheken
16,000 6.376%, 4/24/96............ 15,996,412
BP America, Inc.,
4,865 10.15%, 3/15/96............ 4,905,135
CIT Group Holdings, Inc.
2,750 8.75%, 2/15/96............. 2,758,577
8,590 4.75%, 3/15/96............. 8,563,004
Federal National Mortgage
Association
67,000 5.8125%, 10/4/96........... 66,936,615
Ford Motor Credit Corp.
4,700 5.15%, 2/26/96............. 4,690,844
1,500 8.85%, 5/1/96.............. 1,513,353
10,000 14.00%, 7/5/96............. 10,384,177
4,000 9.05%, 7/23/96............. 4,070,998
General Motors Acceptance
Corp.
1,400 4.80%, 1/16/96............. 1,399,224
2,500 8.80%, 7/3/96.............. 2,531,794
4,000 8.625%, 7/15/96............ 4,053,274
6,000 8.25%, 8/1/96.............. 6,073,880
5,000 8.20%, 9/13/96............. 5,078,200
International Lease Finance
Corp.
4,250 8.75%, 8/15/96............. 4,320,523
Merrill Lynch & Co., Inc.
4,000 9.00%, 4/15/96............. 4,035,000
Westdeutsche Landesbank
Girozentral
16,000 6.85%, 3/1/96.............. 16,004,075
--------------
Total Medium-Term
Obligations
(amortized cost
$170,332,423)............ 170,332,423
--------------
VARIABLE RATE INSTRUMENTS(a)--16.3%
American Express Centurion
Bank
$ 9,000 5.9375%, 1/16/96........... $ 8,999,773
Federal National Mortgage
Association
82,000 5.755%, 1/2/96............. 82,000,000
General Motors Acceptance
Corp.
38,000 5.70%, 1/2/96.............. 37,984,743
7,000 5.975%, 2/21/96............ 7,000,312
Goldman Sachs Group, L.P.,
213,000 5.8125%, 5/24/96........... 213,000,000
Lehman Brothers Holdings,
Inc.
52,000 6.1422%, 1/2/96............ 52,000,000
Merrill Lynch & Co., Inc.
72,000 5.97656%, 1/2/96........... 71,984,263
Money Market Auto Loan
Trust,
20,400 6.085%, 1/16/96............ 20,400,309
Morgan Stanley Group, Inc.
18,000 6.0625%, 1/16/96........... 18,000,000
33,000 6.0703%, 2/15/96........... 33,000,000
SMM Trust Notes 1995-Q
174,000 5.9375%, 1/16/96........... 173,983,359
--------------
Total Variable Rate
Instruments
(amortized cost
$718,352,759)............ 718,352,759
--------------
U.S. GOVERNMENT AGENCIES--2.2%
Federal Farm Credit Bank
19,585 5.75%, 8/1/96.............. 19,565,901
Federal Home Loan Bank
28,000 6.05%, 6/13/96............. 28,007,367
Federal Home Loan Mortgage
Corp.
19,000 5.645%, 8/15/96............ 18,970,068
</TABLE>
-10-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
U.S. GOVERNMENT AGENCIES--(cont'd)
Federal National Mortgage
Association
$ 29,000 5.71%, 6/10/96............. $ 28,963,212
--------------
Total U.S. Government
Agencies
(amortized cost
$95,506,548)............. 95,506,548
--------------
Total Investments--99.7%
(amortized cost
$4,398,639,781).......... 4,398,639,781
Other assets in excess of
liabilities--0.3%........ 13,520,911
--------------
Net Assets--100%........... $4,412,160,692
--------------
--------------
</TABLE>
- ---------------
(a) 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.
-11-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND MONEY FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets
December 31, 1995
-----------------
<S>
<C>
Investments, at
value................................................................. $
4,398,639,781
Receivable for Fund shares
sold....................................................... 97,644,159
Interest
receivable...................................................................
24,494,028
Prepaid
expenses......................................................................
294,073
-----------------
Total
assets........................................................................
4,521,072,041
-----------------
Liabilities
Bank
overdraft....................................................................
.... 129,160
Payable for Fund shares
repurchased...................................................
106,998,489
Due to
Manager........................................................................
1,512,426
Due to
Distributor....................................................................
271,274
-----------------
Total
liabilities...................................................................
108,911,349
-----------------
Net Assets
Applicable to 4,412,160,692 shares of beneficial interest ($ .01 par value)
issued and
outstanding;
unlimited number of shares
authorized............................................... $ 4,412,160,692
-----------------
-----------------
Net asset value, offering price and redemption price per share ($4,412,160,692
/
4,412,160,692
shares)...............................................................
$1.00
-----------------
-----------------
</TABLE>
See Notes to Financial Statements appearing on page 29.
-12-
<PAGE>
COMMAND MONEY FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
Net Investment Income 1995
------------------
<S> <C>
Income
Interest............................. $ 135,596,803
------------------
Expenses
Management fee....................... 8,566,460
Distribution fee..................... 2,835,016
Transfer agent's fees and expenses... 698,000
Registration fees.................... 595,000
Custodian's fees and expenses........ 144,000
Reports to shareholders.............. 50,000
Insurance expense.................... 48,000
Trustees' fees and expenses.......... 32,000
Audit fee and expenses............... 21,000
Legal fees and expenses.............. 6,000
Miscellaneous........................ 846
------------------
Total expenses..................... 12,996,322
------------------
Net investment income.................. 122,600,481
------------------
Realized gain on Investments
Net realized gain on investment
transactions......................... 28,069
------------------
Net Increase in Net Assets
Resulting from Operations.............. $ 122,628,550
------------------
------------------
</TABLE>
COMMAND MONEY FUND
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) December 31, June 30,
in Net Assets 1995 1995
---------------- ----------------
<S> <C> <C>
Operations
Net investment
income............. $ 122,600,481 $ 156,370,915
Net realized gain
on investment
transactions..... 28,069 307,047
---------------- ----------------
Net increase in net
assets resulting
from
operations....... 122,628,550 156,677,962
---------------- ----------------
Dividends and
distributions to
shareholders....... (122,628,550) (156,677,962)
---------------- ----------------
Fund share
transactions (at $1
per share)
Net proceeds from
shares
subscribed....... 11,089,677,603 16,966,514,286
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions.... 122,628,550 156,677,962
Cost of shares
reacquired....... (10,855,845,344) (15,515,692,996)
---------------- ----------------
Net increase in net
assets from Fund
share
transactions..... 356,460,809 1,607,499,252
---------------- ----------------
Total increase....... 356,460,809 1,607,499,252
Net Assets
Beginning of
period............. 4,055,699,883 2,448,200,631
---------------- ----------------
End of period........ $ 4,412,160,692 $ 4,055,699,883
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements
appearing on page 29.
See Notes to Financial Statements
appearing on page 29.
-13-
<PAGE>
COMMAND MONEY FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended June 30,
December 31,
- --------------------------------------------------------------
1995 1995
1994 1993 1992 1991
------------ ----------
- ---------- ---------- ---------- ----------
<S> <C> <C> <C>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period......... $ 1.000 $ 1.000 $
1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized
gains...................................... 0.027 0.050
0.029 0.030 0.046 0.069
Dividends and distributions to
shareholders............................... (0.027) (0.050)
(0.029) (0.030) (0.046) (0.069)
------------ ----------
- ---------- ---------- ---------- ----------
Net asset value, end of period............... $ 1.000 $ 1.000 $
1.000 $ 1.000 $ 1.000 $ 1.000
------------ ----------
- ---------- ---------- ---------- ----------
------------ ----------
- ---------- ---------- ---------- ----------
TOTAL RETURN(b):............................. 2.75% 5.13%
2.98% 3.01% 4.71% 7.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).............. $ 4,412,161 $4,055,700
$2,448,201 $2,436,672 $2,125,430 $2,417,429
Average net assets (000)..................... $ 4,511,373 $3,072,284
$2,570,195 $2,275,532 $2,377,108 $2,605,472
Ratios to average net assets:
Expenses, including distribution fees...... .57%(a) .59%
.59% .61% .64% .61%
Expenses, excluding distribution fees...... .45%(a) .47%
.47% .48% .51% .49%
Net investment income...................... 5.41%(a) 5.09%
2.92% 2.90% 4.57% 6.95%
</TABLE>
- ---------------
(a) Annualized.
(b) 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. Total returns for less than
a full year are not annualized.
See Notes to Financial Statements appearing on page 29.
-14-
<PAGE>
COMMAND GOVERNMENT FUND Portfolio of Investments
December 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
U.S. Government Agencies--72.3%
Federal Farm Credit Bank
$ 30,000(a) 5.51%, 1/2/96.............. $ 29,991,005
15,000 5.48%, 2/1/96.............. 14,931,500
1,095 6.31%, 2/2/96.............. 1,088,858
7,400(a) 5.57%, 2/23/96............. 7,399,463
1,470 5.57%, 3/1/96.............. 1,456,353
1,300 5.57%, 3/5/96.............. 1,287,127
4,000 5.75%, 8/1/96.............. 3,996,099
--------------
60,150,405
--------------
Federal Home Loan Bank
15,000(a) 5.79%, 1/2/96.............. 14,987,419
10,000 6.20%, 1/2/96.............. 9,998,278
5,000 6.04%, 1/16/96............. 4,987,417
5,000 5.51%, 1/25/96............. 4,982,399
1,000 5.61%, 1/26/96............. 996,104
4,000 6.79%, 2/15/96............. 3,999,117
4,070 6.85%, 2/28/96............. 4,070,750
870 5.54%, 2/29/96............. 862,101
615(a) 5.68%, 3/4/96.............. 614,874
6,500 5.49%, 3/6/96.............. 6,435,569
5,000(a) 5.47%, 3/8/96.............. 4,998,449
1,000(a) 5.55%, 3/14/96............. 999,694
4,000 6.22%, 3/22/96............. 3,944,020
10,000 5.37%, 4/30/96............. 9,821,000
11,000 5.38%, 4/30/96............. 10,802,733
2,820 7.39%, 8/2/96.............. 2,843,724
1,215 5.36%, 8/23/96............. 1,172,488
--------------
86,516,136
--------------
Federal Home Loan Mortgage
Corporation
5,000 5.80%, 2/1/96.............. 4,975,028
6,500 5.57%, 2/16/96............. 6,453,738
--------------
11,428,766
--------------
Federal National Mortgage
Association
$ 2,000(a) 5.44%, 1/2/96.............. $ 2,000,013
8,600(a) 5.53%, 1/2/96.............. 8,594,859
13,000(a) 5.53%, 1/2/96.............. 12,996,593
10,500(a) 5.76%, 1/2/96.............. 10,500,000
20,500(a) 5.81%, 1/2/96.............. 20,489,365
6,000 5.54%, 2/7/96.............. 5,965,837
10,000 5.57%, 2/13/96............. 9,933,469
1,790 5.57%, 2/20/96............. 1,776,152
17,000 5.50%, 2/28/96............. 16,849,361
5,990 5.49%, 3/8/96.............. 5,928,797
5,000 5.48%, 3/26/96............. 4,935,306
8,000 5.48%, 4/29/96............. 7,855,084
6,000 5.71%, 6/10/96............. 5,992,389
5,000 5.81%, 10/4/96............. 4,995,270
7,000 5.60%, 11/1/96............. 6,990,987
--------------
125,803,482
--------------
Student Loan Marketing Association
3,000(a) 5.20%, 1/2/96.............. 2,996,544
2,250(a) 5.22%, 1/2/96.............. 2,249,348
7,120(a) 5.23%, 1/2/96.............. 7,116,042
14,000(a) 5.27%, 1/2/96.............. 13,996,381
3,400(a) 5.40%, 1/2/96.............. 3,401,472
2,525(a) 5.50%, 1/2/96.............. 2,526,846
8,000(a) 6.08%, 7/1/96.............. 7,995,219
--------------
40,281,852
--------------
United States Treasury Notes
7,000 6.88%, 10/31/96............ 7,065,036
--------------
Total U.S. Government
Agencies
(amortized cost
$331,245,677)............ 331,245,677
--------------
</TABLE>
-15-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND GOVERNMENT FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Repurchase Agreements(b)--32.3%
$ 398 Joint Repurchase Agreement
Account,
5.85%, 1/2/96, (Note
4)....................... $ 398,000
12,000 CS First Boston Corp.,
5.83%, dated 12/7/95, due
1/5/96 in the amount of
$12,056,357 (cost
$12,000,000), the value
of the collateral
including accrued
interest is
$12,386,790.............. 12,000,000
25,000 Goldman Sachs & Co., 5.78%,
dated 11/9/95, due 1/8/96
in the amount of
$25,240,833 (cost
$25,000,000), the value
of the collateral
including accrued
interest is
$25,500,000.............. 25,000,000
14,165 Morgan Stanley & Co., 5.95%
dated, 12/26/95, due
1/2/96 in the amount of
$14,181,388 (cost
$14,165,000), the value
of the collateral
including accrued
interest is
$14,548,924.............. 14,165,000
31,000 Morgan Stanley & Co.,
6.00%, dated 12/27/95,
due 1/3/96 in the amount
of $31,036,167 (cost
$31,000,000), the value
of the collateral
including accrued
interest is
$31,840,216.............. 31,000,000
7,623 Nomura Securities
International, Inc.,
6.00%, dated 12/28/95,
due 1/4/96 in the amount
of $7,631,894 (cost
$7,623,000), the value of
the collateral including
accrued interest is
$7,791,021............... 7,623,000
$ 11,700 Smith Barney, 5.83%, dated
12/11/95, due 1/8/96 in
the amount of $11,753,053
(cost $11,700,000), the
value of the collateral
including accrued
interest is
$11,934,000.............. $ 11,700,000
46,000 UBS Securities Inc., 6.10%,
dated 12/27/95, due
1/3/96 in the amount of
$46,054,561 (cost
$46,000,000), the value
of the collateral
including accrued
interest is
$46,921,184.............. 46,000,000
--------------
Total Repurchase Agreements
(amortized cost
$147,886,000)............ 147,886,000
--------------
Total Investments--104.6%
(amortized cost
$479,131,677)............ 479,131,677
Liabilities in excess of
other assets --(4.6%).... (20,991,098)
--------------
Net Assets--100%........... $ 458,140,579
--------------
--------------
</TABLE>
- ---------------
(a) 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.
(b) Repurchase agreements are collateralized by U.S. Treasury or Federal agency
obligations.
-16-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND GOVERNMENT FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
Assets
December 31, 1995
-----------------
<S>
<C>
Investments, at
value................................................................. $
479,131,677
Receivable for Fund shares
sold....................................................... 6,050,417
Interest
receivable...................................................................
2,168,011
Prepaid
expenses......................................................................
7,653
-----------------
Total
assets........................................................................
487,357,758
-----------------
Liabilities
Bank
overdraft....................................................................
.... 9,158
Payable for investments
purchased..................................................... 19,913,899
Payable for Fund shares
repurchased................................................... 8,907,796
Accrued
expenses......................................................................
198,211
Due to
Manager........................................................................
160,893
Due to
Distributor....................................................................
27,222
-----------------
Total
liabilities...................................................................
29,217,179
-----------------
Net Assets
Applicable to 458,140,579 shares of beneficial interest ($.01 par value) issued
and
outstanding;
unlimited number of shares
authorized............................................... $ 458,140,579
-----------------
-----------------
Net asset value, offering price and redemption price per share ($458,140,579 /
458,140,579
shares).................................................................
$1.00
-----------------
-----------------
</TABLE>
See Notes to Financial Statements appearing on page 29.
-17-
<PAGE>
COMMAND GOVERNMENT FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
Net Investment Income 1995
-----------------
<S> <C>
Income
Interest............................. $13,226,826
-----------------
Expenses
Management fee....................... 896,323
Distribution fee..................... 280,101
Registration fees.................... 201,000
Custodian's fees and expenses........ 58,000
Transfer agent's fees and expenses... 40,000
Trustees' fees and expenses.......... 25,000
Reports to shareholders.............. 23,000
Audit fee and expenses............... 18,000
Legal fees and expenses.............. 10,000
Insurance expense.................... 5,500
Miscellaneous........................ 2,576
-----------------
Total expenses..................... 1,559,500
-----------------
Net investment income.................. 11,667,326
-----------------
Realized gain on Investments
Net realized gain on investment
transactions......................... 15,880
-----------------
Net Increase in Net Assets
Resulting from Operations.............. $11,683,206
-----------------
-----------------
</TABLE>
COMMAND GOVERNMENT FUND
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) in December 31, June 30,
Net Assets 1995 1995
--------------- ---------------
<S> <C> <C>
Operations
Net investment
income............... $ 11,667,326 $ 16,865,588
Net realized gain on
investment
transactions....... 15,880 49,296
--------------- ---------------
Net increase in net
assets resulting
from operations.... 11,683,206 16,914,884
--------------- ---------------
Dividends and
distributions to
shareholders......... (11,683,206) (16,914,884)
--------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares
subscribed......... 965,348,010 1,851,317,527
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions...... 11,683,206 16,914,884
Cost of shares
reacquired........... (923,185,782) (1,789,194,124)
--------------- ---------------
Net increase in net
assets from Fund
share
transactions....... 53,845,434 79,038,287
--------------- ---------------
Total increase 53,845,434 79,038,287
Net Assets
Beginning of period.... 404,295,145 325,256,858
--------------- ---------------
End of period.......... $ 458,140,579 $ 404,295,145
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements
appearing on page 29.
See Notes to Financial Statements
appearing on page 29.
-18-
<PAGE>
COMMAND GOVERNMENT FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended June 30,
December 31,
- ----------------------------------------------------
1995 1995
1994 1993 1992 1991
------------ --------
-------- -------- -------- --------
<S> <C> <C>
<C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................. $ 1.000 $ 1.000
$ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains......... .026 .048
0.028 0.028 0.045 0.067
Dividends and distributions to shareholders.......... (.026) (.048)
(0.028) (0.028) (0.045) (0.067)
------------ --------
-------- -------- -------- --------
Net asset value, end of period....................... $ 1.000 $ 1.000
$ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ --------
-------- -------- -------- --------
------------ --------
-------- -------- -------- --------
TOTAL RETURN(b)...................................... 2.65% 4.89%
2.86% 2.85% 4.56% 6.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...................... $458,141 $404,295
$325,257 $381,703 $372,988 $414,978
Average net assets (000)............................. $445,726 $350,458
$376,159 $380,103 $422,639 $398,971
Ratios to average net assets:
Expenses, including distribution fees.............. .69%(a) .65%
.63% .65% .69% .65%
Expenses, excluding distribution fees.............. .57%(a) .53%
.51% .53% .57% .53%
Net investment income.............................. 5.21%(a) 4.81%
2.79% 2.74% 4.38% 6.54%
</TABLE>
- ---------------
(a) Annualized.
(b) 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. Total returns for less than
a full year are not annualized.
See Notes to Financial Statements appearing on page 29.
-19-
<PAGE>
<PAGE>
COMMAND TAX-FREE FUND Portfolio of Investments
December 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
CALIFORNIA--3.7%
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.,
3.90%, 11/1/96, Ser.
VMIG1 10,800 93A................... 10,800,000
--------------
33,585,000
--------------
COLORADO--3.0%
Avon Cnty. Ind. Dev.
Rev.,
Beaver Creek Proj.,
F.R.M.D.,
4.10%, 1/15/96, Ser.
P-1 9,000 84.................... 9,000,000
Colorado Hsg. Fin.
Auth.,
Eagle Tax-Exempt
Trust, 94C,
F.R.W.D.S.,
5.25%, 1/4/96, Ser.
A-1* 7,335 0601.................. 7,335,000
Denver City & County
Airport Rev.,
F.R.W.D,
5.90%, 1/3/96, Ser.
VMIG 11,000 91B................... 11,000,000
--------------
27,335,000
--------------
CONNECTICUT--1.7%
Connecticut Spec. Tax
Oblig.,
Trans. Infrastructure
Rev., F.R.W.D.,
5.10%, 1/3/96, Ser. 90
VMIG1 15,000 I..................... 15,000,000
--------------
DISTRICT OF COLUMBIA--5.9%
Dist. of Columbia
Hsg. Fin. Agcy.,
Carmel Plaza,
F.R.W.D.,
5.15%, 1/4/96, Ser.
VMIG1 8,830 91.................... 8,830,000
Dist. of Columbia Rev.,
F.R.D.D.,
6.00%, 1/2/96, Ser.
VMIG1 $ 7,700 92A-1................. $ 7,700,000
6.00%, 1/2/96, Ser.
VMIG1 4,600 92A-2................. 4,600,000
6.00%, 1/2/96, Ser.
VMIG1 4,900 92A-3................. 4,900,000
6.00%, 1/2/96, Ser.
VMIG1 10,400 92A-4................. 10,400,000
6.00%, 1/2/96, Ser.
VMIG1 7,300 92A-5................. 7,300,000
6.00%, 1/2/96, Ser.
VMIG1 9,400 92A-6................. 9,400,000
--------------
53,130,000
--------------
FLORIDA--2.5%
Miami Hlth. Facs. Auth.
Rev.,
Miami Jewish Home &
Hosp., F.R.W.D.,
5.15%, 1/3/96, Ser.
CPS1 7,000 92.................... 7,000,000
Orange County Hsg. Fin.
Auth., S.E.M.O.T. 3,
3.60%, 6/1/96, Ser.
AAA* 6,415 87A................... 6,415,000
Putnam Cnty. Dev. Auth.,
Seminole Elec. Proj.,
S.E.M.O.T.,
3.75%, 3/15/96, Ser.
P1 9,000 84H-4................. 9,000,000
--------------
22,415,000
--------------
GEORGIA--5.3%
Burke Cnty. Dev. Auth.,
Oglethorpe Power
Corp.,
3.70%, 6/26/96, Ser.
MIG1 13,070 95.................... 13,070,000
Poll. Ctrl. Pwr. Plant
Co., Vogtle Proj.,
F.R.D.D.,
6.10%, 1/2/96, Ser.
VMIG1 5,400 94-9.................. 5,400,000
Clayton County Hsg.
Auth.,
Multifamily, Summer
Wind Proj., F.R.W.D.,
5.40%, 1/3/96, Ser.
A-1* 6,655 89.................... 6,655,000
</TABLE>
-20-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
GEORGIA--(cont'd)
Fulton Cnty. Dev. Auth.
Rev.,
Robert W. Woodruff Art
Center, F.R.W.D.,
5.15%, 1/3/96, Ser.
CPS1 $ 22,500 93.................... $ 22,500,000
--------------
47,625,000
--------------
ILLINOIS--14.9%
Cook Cnty. Tender Notes,
Cap. Equip. Proj.,
S.E.M.M.T.,
VMIG 48,750 3.85%, 2/7/96, Ser. B... 48,750,000
Illinois Dev. Fin. Auth.
Poll.,
Rfdg. Commonwealth
Edison Co. Proj. B,
F.R.W.D.,
5.00%, 1/3/96, Ser.
P-1 6,000 94B................... 6,000,000
Illinois Dev. Fin. Auth.
Rev.,
Multifamily Hsg. Proj.
Rev., F.R.W.D.,
5.60%, 1/5/96, Ser.
A-1* 18,900 92.................... 18,900,000
Illinois Ed. Facs. Auth.
Rev.,
John F. Kennedy
Healthcare Fund,
T.E.C.P.,
3.45%, 3/7/96, Ser.
A-1+* 7,800 95.................... 7,800,000
Illinois Hlth. Facs.
Auth. Rev.,
Children's Mem. Hosp.,
S.E.M.M.T.,
3.85%, 1/23/96, 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
Joliet Regional Port
Dist., Dow Chemical
Proj., F.R.D.D.,
6.10%, 1/2/96, Ser.
P-1 $ 1,125 85.................... $ 1,125,000
Wheeling Multifamily Hsg. Rev.,
Woodland Creek II, F.R.W.D.,
5.20%, 1/5/96, Ser.
SP-1+* 8,000 90.................... 8,000,000
--------------
134,075,000
--------------
INDIANA--2.0%
Indiana Ed. Fac. Auth.,
Wesleyan Univ.
F.R.W.D.,
5.20%, 1/4/96, Ser.
NR 10,000 93.................... 10,000,000
Indiana Hlth. Fac. Fin.
Auth. Rev., Baptist
Homes of Indiana,
F.R.W.D.,
5.20%, 1/4/96, Ser.
NR 8,255 95.................... 8,255,000
--------------
18,255,000
--------------
KENTUCKY--3.2%
Louisville & Jefferson
Cnty.,
Sub. Notes, F.R.W.D.,
5.50%, 1/4/96, Ser.
A-1* 18,900 95A................... 18,900,000
5.50%, 1/4/96, Ser.
VMIG1 10,000 95B................... 10,000,000
--------------
28,900,000
--------------
LOUISIANA--0.8%
Louisiana Pub. Facs.
Auth.,
Hosp. Equip. Rev.,
F.R.W.D.,
5.65%, 1/3/96, Ser.
VMIG1 6,900 85A................... 6,900,000
--------------
MAINE--3.3%
Biddeford Res. Rec.
Rev.,
Energy Recovery Co.
Proj., F.R.M.D.,
3.90%, 1/2/96, Ser.
VMIG1 21,200 85.................... 21,200,000
State of Maine Gen.
Oblig.,
B.A.N.,
MIG1 8,800 3.90%, 5/15/96.......... 8,809,416
--------------
30,009,416
--------------
</TABLE>
-21-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
MARYLAND--1.2%
Baltimore Cnty. Poll. Ctrl. Rev.,
Gas & Elec Co., T.E.C.P.,
3.55%, 2/6/96, Ser.
VMIG1 $ 3,000 85.................... $ 3,000,000
Maryland St. Econ. Dev. Corp.,
F.R.W.D.,
5.30%, 1/4/96, Ser.
A-1* 7,500 95.................... 7,500,000
--------------
10,500,000
--------------
MASSACHUSETTS--3.6%
Massachusetts Hsg. Fin.
Agcy.,
Sngl. Fam. Hsg. Rev.,
Q.T.R.O.T.3,
Aaa 10,650 3.55%, 3/1/96, Ser. 5... 10,650,000
Revere Hsg. Auth.,
Multifamily Mtge. Rev.
Waters Edge Proj.,
F.R.W.D.,
5.60%, 1/5/96, Ser.
A-1* 22,000 91C................... 22,000,000
--------------
32,650,000
--------------
MINNESOTA--4.6%
Bloomington Comm. Dev.
Rev.,
94th St. Proj.,
F.R.W.D.,
5.20%, 1/5/96, Ser.
A-1+* 6,300 85.................... 6,300,000
Bloomington Port Auth.
Tax Rev., F.R.W.D.,
5.20%, 1/5/96, Ser.
VMIG1 15,000 95A................... 15,000,000
City of Fridley Comm.
Dev. Rev.,
River Rd. Invsmt.
Proj., F.R.W.D.,
5.60%, 1/5/96, Ser.
A-1* 4,025 84.................... 4,025,000
Minneapolis St. Paul
Healthcare Rev.,
F.R.D.D.,
6.05%, 1/2/96, Ser.
VMIG1 $ 1,720 95B................... $ 1,720,000
Minnesota Hsg. Fin.
Agency,
A.N.N.M.T.,
3.50%, 12/12/96, Ser.
VMIG1 3,600 95M................... 3,600,000
5.25%, 1/16/96, Ser.
VMIG1 10,505 93F................... 10,505,000
--------------
41,150,000
--------------
MISSISSIPPI--0.9%
Harrison Cnty. Poll.
Ctrl. Rev.,
Mississippi Pwr. Co.
Proj., F.R.W.D.
5.15%, 1/3/96, Ser.
A-1* 8,000 92.................... 8,000,000
--------------
MISSOURI--5.1%
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 Hlth. & Ed.
Facs.,
T.E.C.P.,
3.50%, 1/17/96, Ser.
VMIG1 3,200 88C................... 3,200,000
Missouri Hlth. & Ed.
Schl. Dist.,
4.50%, 8/19/96, Ser.
SP-1+* 25,000 95H................... 25,083,136
St. Charles Cnty. Ind.
Dev. Auth.,
Cedar Ridge Apts.,
F.R.W.D.,
5.15%, 1/3/96, Ser.
A-1+* 8,495 88A................... 8,495,000
--------------
45,728,136
--------------
</TABLE>
-22-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
NEW JERSEY--2.2%
Jersey City, B.A.N.,
SP-1* $ 4,000 4.25%, 9/27/96.......... $ 4,011,691
Paterson, B.A.N.,
NR 15,584 5.25%, 1/29/96.......... 15,590,403
--------------
19,602,094
--------------
NEW YORK--5.0%
Nassau Cnty., T.A.N.,
4.50%, 4/15/96, Ser.
SP-1* 15,100 95B................... 15,125,431
New York City Unltd.
Tax,
F.R.W.D.S.,
5.30%, 1/4/96, Ser.
VMIG1 19,800 33.................... 19,800,000
New York City, T.A.N.,
4.50%, 2/15/96, Ser.
MIG1 10,000 95.................... 10,007,357
--------------
44,932,788
--------------
NORTH CAROLINA--1.9%
Cabarrus Cnty. Ind.
Facs. Auth.,
Poll. Ctrl. Rev.
Philip Morris Proj.,
F.R.W.D.,
5.15%, 1/2/96, Ser.
P-1 5,000 92.................... 5,000,000
North Carolina Mun. Pwr. Agcy.,
T.E.C.P.,
P-1 12,061 3.55%, 1/9/96........... 12,061,000
--------------
17,061,000
--------------
OHIO--0.9%
Toledo-Lucas Cnty.,
Convntn. & Visitors
Bureau, M.T.H.O.T.,
3.75%, 2/1/96, Ser.
VMIG1 8,215 88.................... 8,215,000
--------------
OKLAHOMA--0.6%
Muskogee Mall Proj.,
F.R.W.D,
5.35%, 1/3/96, Ser.
VMIG1 $ 5,800 85.................... $ 5,800,000
--------------
OREGON--2.5%
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
Oregon Hlth., Hsg. &
Ed.,
F.R.W.D.,
5.00%, 1/2/96, Ser.
A-1+* 10,000 95.................... 10,000,000
--------------
22,425,000
--------------
SOUTH CAROLINA--0.5%
York Cnty. Poll. Ctrl.
Rev.,
Electric Proj.,
S.E.M.O.T.,
3.75%, 3/15/96, Ser.
MIG1 4,935 84N-5................. 4,935,000
--------------
SOUTH DAKOTA--1.2%
South Dakota Hlth. & Ed. Rev.,
Mc Kennan Hosp. Proj.,
F.R.W.D.,
5.20%, 1/5/96, Ser.
VMIG1 11,000 94.................... 11,000,000
--------------
TENNESSEE--1.2%
Montgomery Cnty. Public
Bldg., F.R.W.D.,
5.30%, 1/4/96, Ser.
A-1* 11,000 95.................... 11,000,000
--------------
TEXAS--15.7%
Austin Util. Sys. Rev.,
F.R.W.D.S.,
5.25%, 1/4/96, Ser.
A-1+* 8,890 SG30.................. 8,890,000
Bexar Cnty. Hsg. Fin.
Corp.,
Windridge Apts.,
F.R.W.D.,
5.15%, 1/4/96, Ser.
A-1+* 6,270 95.................... 6,270,000
</TABLE>
-23-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
TEXAS--(cont'd)
Brazos River Harbor
Nav. Dist.,
Dow Chemical Co.
Proj., T.E.C.P.,
3.60%, 1/3/96, Ser.
P-1 $ 3,000 91.................... $ 3,000,000
3.60%, 1/3/96, Ser.
P-1 10,500 91.................... 10,500,000
Dallas Area Rapid
Transit,
T.E.C.P.,
3.85%, 1/10/96, Ser.
P-1 5,000 A..................... 5,000,000
DeSoto Ind. Dev. Auth.,
Nat'l. Svc. Inds. Inc.
Proj., F.R.W.D.,
5.15%, 1/4/96, Ser.
CPS1 7,150 91.................... 7,150,000
Harris Cnty. Hlth.
Facs. Dev. Corp.,
Methodist Hosp. Rev.,
T.E.C.P.,
3.90%, 1/17/96, Ser.
VMIG1 9,200 94B................... 9,200,000
Lower Colorado River
Auth.,
T.E.C.P.,
P-1 11,100 3.70%, 3/29/96, Ser B... 11,100,000
Pub. Fin. Auth. Rev.,
T.E.C.P.,
P-1 8,000 3.70%, 3/7/96, Ser. B... 8,000,000
San Antonio Elec. & Gas Rev.,
T.E.C.P.,
3.50%, 1/17/96, Ser.
P-1 16,500 A..................... 16,500,000
P-1 12,200 3.75%, 3/5/96, Ser. A... 12,200,000
San Antonio Water
Systems,
T.E.C.P.,
3.80%, 3/7/96, Ser.
P-1 6,000 95.................... 6,000,000
State of Texas,
T.R.A.N.,
4.75%, 8/30/96, Ser.
MIG1 13,200 95A................... 13,256,967
Texas Board of Regents,
A & M University,
T.E.C.P.,
3.50%, 1/18/96, Ser.
P-1 14,200 B..................... 14,200,000
Per. University Fund,
F.R.W.D.S.,
5.30%, 1/4/96, Ser.
VMIG1 $ 10,170 MGT23................. $ 10,170,000
--------------
141,436,967
--------------
UTAH--2.2%
Intermountain Pwr. Auth.
Supply Rev.,
A.N.N.O.T.,
3.85%, 6/17/96, Ser.
VMIG1 8,500 85E................... 8,500,000
S.E.M.O.T.,
3.75%, 3/15/96, Ser.
VMIG1 11,000 85E,.................. 11,000,000
--------------
19,500,000
--------------
VIRGINIA--6.0%
Chesterfield Cnty.
Ind. Dev. Auth.,
Phillip Morris Proj.,
F.R.W.D.,
P-1 8,500 5.15%, 1/3/96........... 8,500,000
Virginia Elec. & Pwr.
Co. Proj., T.E.C.P.,
3.85%, 1/11/96, Ser.
VMIG1 17,600 87A................... 17,600,000
Harrisonburg Redev. &
Hsg. Auth.,
Multfamily Hsg. Rev.,
F.R.W.D.,
5.15%, 1/4/96, Ser.
VMIG1 13,000 91A................... 13,000,000
York Cnty. Ind. Dev.
Auth.,
Virginia Elec. & Pwr.
Co., T.E.C.P.,
VMIG1 14,800 3.65%, 3/8/96........... 14,800,000
--------------
53,900,000
--------------
WASHINGTON--1.8%
State Nonprofit Hsg.,
Emerald Heights Proj.,
F.R.D.D.,
6.15%, 1/2/96, Ser.
A-1* 2,000 90.................... 2,000,000
</TABLE>
-24-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
WASHINGTON--(cont'd)
State Pub. Pwr. Sup.,
Proj. #1, F.R.W.D.,
4.95%, 1/3/96, Ser.
VMIG1 $ 14,300 931A3................. $ 14,300,000
--------------
16,300,000
--------------
WISCONSIN--2.1%
Oconomowoc Area Schl. Dist.,
B.A.N.,
MIG1 7,200 3.75%, 12/1/96.......... 7,206,624
Oshkosh Area Schl.
Dist.,
B.A.N.,
3.75%, 12/13/96, Ser.
MIG1 11,900 95-96................. 11,917,017
--------------
19,123,641
--------------
WYOMING
Platte Cnty. Poll.
Cntrl. Rev.,
F.R.D.D.,
6.00%, 1/2/96, Ser.
P-1 300 84B................... 300,000
--------------
Total Investments--105.5%
(amortized cost
$950,789,042)......... 950,789,042
Liabilities in excess of
other
assets--(5.5%)........ (49,649,669)
--------------
Net Assets--100%........ $ 901,139,373
--------------
--------------
</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
S.E.M.O.T.3--Semi-Annual Third Party Optional Tender
T.A.N.--Tax Anticipation Note
T.E.C.P.--Tax Exempt Commercial Paper
T.R.A.N.--Tax and Revenue Anticipation Note
* 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.
-25-
See Notes to Financial Statements appearing on page 29.
<PAGE>
COMMAND TAX-FREE FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets
December 31, 1995
-----------------
<S>
<C>
Investments, at
value................................................................. $
950,789,042
Receivable for investments
sold....................................................... 31,570,636
Receivable for Fund shares
sold....................................................... 15,963,495
Interest
receivable...................................................................
7,328,588
Prepaid
expenses......................................................................
22,240
-----------------
Total
assets........................................................................
1,005,674,001
-----------------
Liabilities
Bank
overdraft....................................................................
.... 33,307
Payable for investments
purchased.....................................................
65,731,011
Payable for Fund shares
repurchased...................................................
37,955,381
Due to
Manager........................................................................
412,931
Accrued
expenses......................................................................
342,188
Due to
Distributor....................................................................
59,810
-----------------
Total
liabilities...................................................................
104,534,628
-----------------
Net Assets
Applicable to 901,139,373 shares of beneficial interest ($.01 par value) issued
and
outstanding;
unlimited number of shares
authorized............................................... $ 901,139,373
-----------------
-----------------
Net asset value, offering price and redemption price per share ($901,139,373 /
901,139,373
shares).................................................................
$1.00
-----------------
-----------------
</TABLE>
See Notes to Financial Statements appearing on page 29.
-26-
<PAGE>
<PAGE>
COMMAND TAX-FREE FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
Net Investment Income 1995
-------------
<S> <C>
Income
Interest............................ $ 21,309,570
-------------
Expenses
Management fee...................... 2,497,286
Distribution fee.................... 685,798
Registration fees................... 211,000
Custodian's fees and expenses....... 130,000
Transfer agent's fees and
expenses............................ 96,000
Trustees' fees and expenses......... 28,000
Audit fee and expenses.............. 21,000
Reports to shareholders............. 20,000
Insurance expense................... 15,000
Legal fees and expenses............. 10,000
Miscellaneous....................... 4,915
-------------
Total expenses.................... 3,718,999
Less: custodian fee credit........ (37,969)
-------------
Net expenses...................... 3,681,030
-------------
Net investment income................. 17,628,540
-------------
Realized gain on Investments
Net realized gain on investment
transactions........................ 17,370
-------------
Net Increase in Net Assets
Resulting from Operations............. $ 17,645,910
-------------
-------------
</TABLE>
COMMAND TAX-FREE FUND
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) in December 31, June 30,
Net Assets 1995 1995
--------------- ---------------
<S> <C> <C>
Operations
Net investment
income............... $ 17,628,540 $ 28,248,472
Net realized gain on
investment
transactions....... 17,370 45
--------------- ---------------
Net increase in net
assets resulting
from operations.... 17,645,910 28,248,517
--------------- ---------------
Dividends and
distributions to
shareholders......... (17,645,910) (28,248,517)
--------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares
subscribed......... 2,280,174,797 4,346,712,584
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions...... 17,645,910 28,248,517
Cost of shares
reacquired........... (2,452,248,980) (4,166,995,198)
--------------- ---------------
Net increase
(decrease) in net
assets from Fund
share
transactions....... (154,428,273) 207,965,903
--------------- ---------------
Total increase
(decrease)........... (154,428,273) 207,965,903
Net Assets
Beginning of period.... 1,055,567,646 847,601,743
--------------- ---------------
End of period.......... $ 901,139,373 $ 1,055,567,646
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements
appearing on page 29.
See Notes to Financial Statements
appearing on page 29.
-27-
<PAGE>
<PAGE>
COMMAND TAX-FREE FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended June 30,
December 31,
- ----------------------------------------------------------
1995 1995
1994 1993 1992 1991
------------- ----------
-------- -------- -------- --------
<S> <C> <C>
<C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 1.000 $ 1.000
$ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized
gains....................................... 0.016 0.032
0.020 0.022 0.035 0.049
Dividends and distributions to shareholders... (0.016) (0.032)
(0.020) (0.022) (0.035) (0.049)
------------- ----------
-------- -------- -------- --------
Net asset value, end of period................ $ 1.000 $ 1.000
$ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- ----------
-------- -------- -------- --------
------------- ----------
-------- -------- -------- --------
TOTAL RETURN(b)............................... 1.63% 3.29%
1.98% 2.23% 3.53% 5.02%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 901,139 $1,055,568
$847,602 $853,930 $729,122 $750,567
Average net assets (000)...................... $ 1,091,314 $ 926,888
$908,421 $823,517 $751,458 $770,745
Ratios to average net assets:
Expenses, including distribution fees....... .68%(a) .66%
.65% .68% .69% .66%
Expenses, excluding distribution fees....... .55%(a) .54%
.53% .55% .56% .54%
Net investment income....................... 3.21%(a) 3.05%
1.96% 2.09% 3.47% 4.88%
</TABLE>
- ---------------
(a) Annualized.
(b) 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 29.
-28-
<PAGE>
<PAGE>
COMMAND FUNDS
Notes to Financial Statements
(Unaudited)
Command Money Fund, Command Government Fund, and Command Tax-Free Fund (each
a ``Fund'' and 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. Expenses are recorded on the accrual basis which may require the
use of certain estimates by management. 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 determined 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.
Custody Fee Credits: The Command Tax-Free Fund has an arrangement with its
custodian bank, whereby uninvested money earn credits which reduce the fees
charged by the custodian.
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 had a distribution agreement with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acted as the distributor of the shares of
each Fund through January 1, 1996. Effective January 2, 1996, Prudential
Securities Incorporated (``PSI'') became the distributor of the shares of
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<PAGE>
<PAGE>
each Fund and is serving each Fund under the same terms and conditions as under
the arrangement with PMFD. The Funds compensated PMFD for distributing and
servicing each Fund's shares pursuant to a plan of distribution at an annual
rate of .125 of 1% of each respective Fund's average daily net assets. The
distribution fee is accrued daily and paid monthly.
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 December 31, 1995, the following amounts were due to PMFS from the
Funds:
<TABLE>
<S> <C>
Command Money.................................... $130,316
Command Government............................... $ 6,371
Command Tax-Free................................. $ 14,427
</TABLE>
Note 4. Joint The Command Government
Repurchase Fund, along with other affili-
Agreement Account ated registered investment
companies, transfers unin-
vested 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 December 31, 1995, the Command
Government Fund had a 0.03% undivided interest in the joint account. The
undivided interest for the Command Government Fund represents $398,000 in the
principal amount. As of such date, each repurchase agreement in the joint
account and the collateral therefor were as follows:
Bear, Stearns & Co. Inc., 5.80%, in the principal amount of $262,000,000,
repurchase price $262,168,844, due 1/2/96. The value of the collateral including
accrued interest is $267,947,172.
BT Securities Corp., 5.75%, in the principal amount of $61,765,000,
repurchase price $61,804,461, due 1/2/96. The value of the collateral including
accrued interest is $63,059,883.
Goldman, Sachs & Co., 5.90%, in the principal amount of $365,000,000,
repurchase price $365,239,278, due 1/2/96. The value of the collateral including
accrued interest is $372,300,053.
Morgan Stanley & Co. Inc., 5.89%, in the principal amount of $103,000,000,
repurchase price $103,067,408, due 1/2/96. The value of the collateral including
accrued interest is $105,192,608.
Smith Barney, Inc., 5.83%, in the principal amount of $365,000,000,
repurchase price $365,236,439, due 1/2/96. The value of the collateral including
accrued interest is $372,300,416.
-30-
<PAGE>
<PAGE>
Trustees
Edward D. Beach
Delayne Dedrick Gold
Harry A. Jacobs, Jr.
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
Stephen M. Ungerman, Assistant 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
Distributor
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 FundsOne Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852
The accompanying financial statements as of December 31, 1995 were not
audited and, accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
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