SEMI-ANNUAL REPORT December 31,
1996
Prudential Securities
Command Account
---------------------
Commany Money Fund
Command Government Fund
Command Tax-Free Fund
(LOGO)
<PAGE>
Letter to
Shareholders
- -----------------------------------------
December 31, 1996
Dear Shareholder:
Short-term interest rates fluctuated frequently in 1996 as
investors reacted
to conflicting reports that the economy was alternately
strengthening or
weakening. By year-end, perceptions of slower growth
prevailed with interest
rates slightly lower than they were a year earlier.
Throughout the six-month
reporting period the Command Money and Command Government
funds offered
competitive yields and the Command Tax-Free Fund produced
attractive tax-free
income, which for the 7-day period ending December 31, 1996,
was equivalent to
5.46% taxable yield for investors in the 39.6% income tax
bracket.
FUND FACTS
As of 12/31/96
<TABLE>
<CAPTION>
7 Day Net Asset
Weighted Total Net
Current Yld. Value Avg.
Mat. Assets (mil.)
<S> <C> <C> <C>
<C>
Command Money 4.94% $1.00 55
days $ 5,622
IBC Financial Data 4.90% $1.00 53
days N/A
Money Fund Avg.
(All Taxable)1
Command 4.82% $1.00 57
days $ 529
Government
IBC Financial Data 4.67% $1.00 50
days N/A
Total Government
Universe2
Command 3.30% $1.00 50
days $ 985
Tax-Free3
IBC Financial Data 3.27% $1.00 53
days N/A
General Purpose Tax-Free
Money Funds4
</TABLE>
Note: Yields will fluctuate from time to time and past
performance is not
indicative 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
812 funds in the
International Business Communications Financial Data all
taxable money market
fund category for December 31, 1996.
2 This is the average 7-day current yield, NAV and WAM of
228 funds in IBC
Financial Data's total government universe fund category for
December 31, 1996.
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
140 funds in IBC
Financial Data's stockbroker & general purpose tax-free
money fund category for
December 31, 1996.
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).
Some securities
may be subject to the federal alternative minimum tax (AMT).
There can be no assurance that any of the Funds will achieve
their respective
investment objectives.
Strategy Session.
What A Ride.
The Federal Reserve adjusts the Federal Funds rate (what
banks charge each
other for overnight loans) with the goal of promoting
sustained and
non-inflationary growth. The central bank usually raises
the rate to
discourage inflation and lowers it to encourage economic
growth. Correctly
anticipating changes in the Federal Funds rate is one way
your Funds attempt
to maximize yield. Another is by seizing investment
opportunities as they
occur.
As matters turned out, the Federal Funds rate stayed
anchored at 5.25% from
February onward. Of course, no one knew earlier in the year
that the central
bank would leave rates unchanged. Starting in March
investors would
aggressively bid up short-term interest rates (some one-year
yields went as
high a 6% or more) whenever an economic report suggested
that the economy was
strengthening too quickly. They thought that the central
bank would be forced
to significantly tighten interest rates to head off
inflation. When the Federal
Reserve took no action, yields fell until the next round of
strong economic
news started the cycle all over again.
Why didn't the Federal Reserve act in 1996? In retrospect,
there was little
need to. While the economy picked up steam in the second
quarter, posting a
robust 4.7% gain in real Gross Domestic Product (GDP is the
total value of
goods and services produced by the U.S. economy and is a
widely used barometer
for measuring growth), it was not sustainable. By the third
quarter real GDP
fell to 2.1%. More importantly, inflationary pressures
remained benign. The
Consumer Price Index (CPI is a widely used measure for
inflation) ended
2
<PAGE>
the year at 3.3%. But when volatile energy prices were
excluded, consumer
prices rose only 2.6% for all of 1996 -- the slowest pace in
more than 30
years.
What Went Well.
The Long & Short of It.
The Command Money Fund invested new assets in longer term
securities (one year
to 13 months) as the yield curve steepened and this helped
through much of the
year. We also maintained a core position in high quality,
variable rate
securities which reset off the London Interbank Offered Rate
(LIBOR). Yields
were attractive and high enough to compensate investors
should the Federal
Reserve raise short-term interest rates (which did not
happen). During this
time our weighted average maturity (WAM) lengthened. We
shortened maturities
late in July in anticipation of a higher Federal Funds rate.
Command Government Fund maturities were longer than the
average government
money market fund tracked by IBC Financial Data. We focused
on shorter term
(three months or less) and longer term (one-year)
securities. This strategy
enabled the Fund to take advantage of the more favorable
longer term yields.
By fall it was becoming apparent to investors that the
Federal Reserve was not
likely to raise rates in 1996 and the spread between longer
term and shorter
term securities narrowed. The increased interest rate risk
prompted us to
invest new assets in three- to four-month securities. The
yields here were
attractive and, more importantly, we kept our ability to
respond if rates went
higher.
The Command Tax-Free Fund saw tax-free interest rates
reflect some gradual
upward movement during the period, generally lagging the
taxable markets. From
spring into early summer, we purchased higher yielding,
longer term investments
before short-term municipal rates began their seasonal
descent in July. This
was reflected in our typically longer maturity compared to
the average tax-free
money market fund. We began to shorten the weighted average
maturity in early
fall because the available longer term yields weren't
attractive enough and we
wanted to maintain our flexibility should the Federal
Reserve decide to
increase interest rates.
For the Command Tax-Free Fund anticipating moves by the
Federal Reserve is one
of the keys to preserving competitive yields. But being a
tax-free money fund,
our investment strategy is also driven by many technical and
economic factors
including seasonal shareholder demands for cash as well as
supply and demand
conditions. Several times during the year we selectively
lengthened our
maturities to take advantage of longer term higher yielding
securities: For
example, we lengthened the weighted average maturi-
3
<PAGE>
ty before the year began to cushion the effects of yields
that seem to fall
every January in the tax-free markets. We extended again in
May as tax-exempt
interest rates moved higher in conjunction with tax season
redemptions, and
again in late August as one-year, tax-exempt interest rates
peaked with the
issuance of Texas tax and revenue anticipation notes. As
the year ended, we
once again lengthened the WAM to carry us through January's
seasonal dip in
yields.
And Not So Well.
Too Cautious.
In retrospect, during periods when the market was poised for
tighter monetary
policy, we should have purchased more longer term
securities. We thought the
Federal Reserve would raise interest rates, however, and we
did not want to be
caught flat-footed by having too much of our assets tied up
in longer term
securities.
Looking Ahead.
In our last report in June we said that there was a
possibility that the
Federal Reserve would raise rates before year-end. It did
not happen, of
course, but the uncertainty which caused short-term rates to
fluctuate in 1996
has continued into the new year. Economic signals remain
mixed. Your Funds
have maintained their maturities based on a stable monetary
policy outlook
through the first quarter of 1997. If any sustainable
increase in inflation
is detected during this time, we believe the Federal Reserve
will respond
quickly by increasing rates modestly.
Sincerely,
Robert N. Felice Michelle Errico Gonnella Richard S.
Lynes
Portfolio Manager Portfolio Manager Portfolio
Manager
Command Money Fund Command Government Fund Command
Tax-Free Fund
Richard A. Redeker
President
4
<PAGE>
COMMAND MONEY FUND Portfolio
of Investments
December
31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Bank Notes--3.6%
American Express Centurion
Bank
$ 10,000(a) 5.5325%, 1/9/97............ $ 9,999,230
18,000(a) 5.57547%, 1/14/97.......... 17,999,370
20,000(a) 5.57547%, 1/15/97.......... 19,998,860
22,000(a) 5.595%, 1/21/97............ 21,999,099
14,000(a) 5.595%, 1/22/97............ 13,998,646
Bank of America, Illinois
17,000 5.80%, 5/13/97............. 16,998,179
FCC National Bank
33,000 5.77%, 4/15/97............. 32,994,593
First Bank National
Association
19,000(a) 5.51719%, 1/15/97.......... 18,989,330
Morgan Guaranty Trust Co.
41,000(a) 5.375%, 2/14/97............ 40,974,042
PNC Bank N.A.
10,000(a) 5.56453%, 1/21/97.......... 9,998,945
--------------
Total Bank Notes
(amortized cost
$203,950,294)............ 203,950,294
--------------
Certificates of Deposit-Domestic--11.3%
Bank of Montreal
150,000 5.39%, 1/23/97............. 150,000,000
Bank of Nova Scotia
180,000 5.39%, 3/4/97.............. 180,000,000
Canadian Imperial Bank
Commerce
87,000 5.41%, 1/31/97............. 87,000,000
176,000 5.39%, 2/4/97.............. 176,000,000
National Bank of Canada
40,765 5.4375%, 3/10/97........... 40,765,000
--------------
Total Certificates of
Deposit-Domestic
(amortized cost
$633,765,000)............ 633,765,000
--------------
Certificates of Deposit-Eurodollar--5.7%
Abbey National
Treasury Services, PLC
149,000 5.41%, 1/30/97............. 149,002,885
75,000 5.38%, 2/14/97............. 75,000,614
$ 20,000 5.42%, 5/27/97............. $ 19,996,523
Banco Bilbao Vizcaya S.A.
11,000 5.41%, 3/5/97.............. 11,000,190
Bank of Nova Scotia
8,000 6.05%, 6/25/97............. 8,016,879
Banque Nationale de Paris
20,000 5.40%, 1/22/97............. 20,000,039
Bayerische Hypotheken und
Weschel Bank
3,000 5.74%, 5/27/97............. 3,001,236
Credit Anstalt Bankverin
9,000 5.43%, 4/7/97.............. 9,000,150
National Bank of Canada
7,000 5.42%, 3/10/97............. 7,000,250
Westdeutshe Landesbank
Girozentrale
4,000 5.58%, 4/2/97.............. 4,001,248
Westpac Banking Corp.
13,000 5.38%, 2/7/97.............. 12,999,426
--------------
Total Certificates of
Deposit-Eurodollar
(amortized cost
$319,019,440)............ 319,019,440
--------------
Certificates of Deposit-Yankee--20.9%
Banque Nationale de Paris
35,000 5.41%, 1/15/97............. 34,999,855
143,000 5.38%, 2/18/97............. 143,000,000
13,000 5.44%, 3/17/97............. 12,999,733
88,000 5.58%, 4/2/97.............. 87,976,008
Barclays Bank PLC
70,000 5.37%, 2/3/97.............. 70,000,000
158,000 5.37%, 2/5/97.............. 158,000,000
Bayerische Hypotheken und
Weschel Bank
6,000 5.375%, 2/18/97............ 6,000,033
44,000 5.39%, 2/28/97............. 44,000,000
20,000 5.39%, 3/3/97.............. 19,999,946
</TABLE>
-5-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Certificates of Deposit-Yankee--(cont'd)
Bayerische Landesbank
Girozentrale
$ 75,000 5.40%, 1/17/97............. $ 74,999,840
22,000 5.37%, 2/3/97.............. 21,999,552
Commerzbank
24,000 5.42%, 6/10/97............. 23,991,087
Deutsche Bank
45,000 5.53%, 4/2/97.............. 44,965,711
Landesbank Hessen-Thuringen
Girozentrale
35,000 5.70%, 4/29/97............. 34,984,427
Midland Bank PLC
10,000 5.50%, 4/10/97............. 9,999,709
National Westminster Bank,
PLC
130,000 5.39%, 2/14/97............. 129,999,873
Societe Generale
258,000 5.37%, 2/20/97............. 258,000,000
--------------
Total Certificates of
Deposit-Yankee
(amortized cost
$1,175,915,774).......... 1,175,915,774
--------------
Commercial Paper--40.3%
Aetna Services, Inc.
20,000 5.42%, 3/14/97............. 19,783,200
11,000 5.42%, 3/17/97............. 10,875,792
American Brands, Inc.
8,000 5.34%, 2/11/97............. 7,951,347
5,000 5.34%, 3/12/97............. 4,948,083
American Express Credit
Corp.
78,000 5.31%, 3/3/97.............. 77,298,195
Aristar, Inc.
6,000 5.37%, 1/17/97............. 5,985,680
9,000 5.41%, 3/14/97............. 8,902,620
Associates Corp. of North
America
72,000 5.32%, 1/30/97............. 71,691,440
Avco Financial Services,
Inc.
25,000 5.44%, 3/3/97.............. 24,769,556
Bank Austria Finance, Inc.
13,547 5.35%, 1/15/97............. 13,518,815
Bank of Nova Scotia
$ 18,000 5.33%, 3/10/97............. $ 17,818,780
Barton Capital Corp.
14,900 5.36%, 1/15/97............. 14,868,942
4,325 5.42%, 2/14/97............. 4,296,349
6,381 5.35%, 2/27/97............. 6,326,948
BHF Finance, Inc.
29,000 5.31%, 1/30/97............. 28,875,952
Bradford & Bingley Building Society
40,000 5.30%, 2/12/97............. 39,752,667
20,000 5.31%, 2/21/97............. 19,849,550
Caterpillar Financial
Services Corp.
10,000 5.38%, 4/28/97............. 9,825,150
18,000 5.35%, 5/16/97............. 17,638,875
29,000 5.35%, 6/16/97............. 28,284,586
Cheltenham & Gloucester,
PLC
41,000 5.32%, 2/21/97............. 40,690,997
77,000 5.325%, 2/24/97............ 76,384,962
CIT Group Holdings, Inc.
42,000 5.35%, 3/31/97............. 41,444,492
Coca-Cola Enterprises, Inc.
36,000 5.34%, 2/3/97.............. 35,823,780
Corporate Receivables Corp.
13,000 5.35%, 2/13/97............. 12,916,926
61,000 5.40%, 2/20/97............. 60,542,500
Countrywide Home Loan, Inc.
18,451 5.35%, 1/21/97............. 18,396,160
Creditanstalt Finance, Inc.
25,000 5.40%, 2/11/97............. 24,846,250
CXC, Inc.
50,000 5.35%, 2/10/97............. 49,702,778
Dakota Certified Program of
Standard Credit Card
Master Trust I
10,000 5.34%, 1/16/97............. 9,977,750
31,670 5.34%, 1/23/97............. 31,566,650
20,000 5.35%, 1/23/97............. 19,934,611
68,000 5.33%, 2/20/97............. 67,496,611
</TABLE>
-6-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Commercial Paper--(cont'd)
Enterprise Funding Corp.
$ 9,652 5.48%, 1/15/97............. $ 9,631,431
7,000 5.34%, 2/18/97............. 6,950,160
15,862 5.34%, 3/4/97.............. 15,716,122
4,473 5.40%, 3/17/97............. 4,422,679
5,000 5.34%, 3/18/97............. 4,943,633
4,000 5.34%, 5/27/97............. 3,913,373
Falcon Asset Securitization
Corp.
29,310 5.50%, 1/15/97............. 29,247,309
Finova Capital Corp.
4,000 5.55%, 1/13/97............. 3,992,600
First Data Corp.
19,000 5.40%, 3/18/97............. 18,783,400
7,000 5.40%, 3/25/97............. 6,912,850
Ford Motor Credit Co.
37,000 5.35%, 3/3/97.............. 36,664,585
General Electric Capital
Corp.
56,000 5.31%, 1/16/97............. 55,876,100
16,000 5.44%, 2/24/97............. 15,869,440
50,000 5.44%, 2/25/97............. 49,584,444
General Motors Acceptance
Corp.
203,800 5.39%, 3/31/97............. 201,084,308
17,000 5.50%, 4/7/97.............. 16,750,667
Golden Peanut Co.
4,000 5.33%, 2/18/97............. 3,971,573
GTE Corp.
13,000 5.50%, 1/14/97............. 12,974,181
29,000 5.50%, 1/21/97............. 28,911,389
Heller Financial, Inc.
12,000 5.57%, 1/13/97............. 11,977,720
14,000 5.57%, 1/14/97............. 13,971,841
3,000 5.75%, 1/16/97............. 2,992,813
40,000 5.80%, 1/21/97............. 39,871,111
ITT Industries, Inc.
16,341 5.50%, 1/21/97............. 16,291,069
6,170 5.45%, 1/23/97............. 6,149,450
14,250 5.32%, 2/18/97............. 14,148,920
Johnson Controls, Inc.
$ 49,000 5.39%, 1/24/97............. $ 48,831,263
Kredietbank Financial Corp.
24,000 5.32%, 1/16/97............. 23,946,800
Merrill Lynch & Co., Inc.
15,000 5.32%, 1/21/97............. 14,955,667
5,000 5.45%, 1/22/97............. 4,984,104
30,000 5.32%, 1/24/97............. 29,898,033
13,000 5.33%, 1/24/97............. 12,955,731
121,000 5.37%, 1/31/97............. 120,458,525
52,000 5.31%, 2/27/97............. 51,562,810
Mitsubishi International
Corp.
12,300 5.50%, 1/10/97............. 12,283,088
17,000 5.45%, 1/15/97............. 16,963,969
15,000 5.35%, 1/24/97............. 14,948,729
10,000 5.35%, 3/4/97.............. 9,907,861
Morgan Stanley Group, Inc.
78,000 5.32%, 1/21/97............. 77,769,467
75,000 5.32%, 1/29/97............. 74,689,667
National Australia Funding, Delaware
5,000 5.33%, 4/18/97............. 4,920,790
Nationwide Building Society
39,000 5.31%, 2/19/97............. 38,718,127
6,000 5.375%, 2/26/97............ 5,949,833
NYNEX Corp.
13,000 5.41%, 2/13/97............. 12,915,995
PNC Funding Corp.
10,000 5.36%, 1/22/97............. 9,968,733
Preferred Receivables Funding Corp.
31,000 5.45%, 1/14/97............. 30,938,990
4,900 5.45%, 1/15/97............. 4,889,615
9,975 5.37%, 3/20/97............. 9,858,941
Rank Xerox Capital (Europe)
PLC
5,000 5.35%, 1/21/97............. 4,985,139
Sears Roebuck Acceptance
Corp.
38,000 5.47%, 2/26/97............. 37,676,662
Triple A One Funding Corp.
13,871 5.40%, 2/7/97.............. 13,794,016
</TABLE>
-7-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Commercial Paper--(cont'd)
WCP Funding Inc.
$ 16,724 5.45%, 1/10/97............. $ 16,701,214
8,000 5.40%, 2/20/97............. 7,940,000
--------------
Total Commercial Paper
(amortized cost
$2,268,003,931).......... 2,268,003,931
--------------
Other Corporate Obligations--16.6%
Abbey National Treasury Services, PLC
53,000 5.50%, 11/26/97............ 52,951,750
American General Finance
Corp.
3,000 7.00%, 10/1/97............. 3,024,158
5,200 7.70%, 11/15/97............ 5,278,840
Associates Corp. of North
America
3,100 9.70%, 5/1/97.............. 3,139,002
5,000 7.00%, 5/13/97............. 5,018,383
Bell Atlantic Financial
Services, Inc.
4,400 6.625%, 11/30/97........... 4,434,498
Beneficial Corp.
25,000(a) 5.54%, 3/5/97.............. 25,009,424
Capital Equipment Receivable Trust
95,766(a) 5.60%, 1/15/97............. 95,767,935
Ford Motor Credit Co.
5,000 7.05%, 11/19/97............ 5,059,849
General Motors Acceptance
Corp.
39,000(a) 5.52%, 2/2/97.............. 38,999,565
5,000 7.65%, 2/3/97.............. 5,011,073
11,000(a) 5.52%, 2/21/97............. 10,999,901
22,000(a) 5.65%, 3/3/97.............. 22,011,852
9,000 6.10%, 3/31/97............. 9,008,660
Goldman Sachs Group L.P.
216,000 a)(b) 5.625%, 2/19/97............ 216,000,000
52,000 a)(b) 5.80469%, 2/19/97.......... 52,000,000
International Lease Finance
Corp.
5,600 5.875%, 2/1/97............. 5,602,553
Merrill Lynch & Co., Inc.
40,000(a) 5.5325%, 1/1/97............ 39,991,264
10,000(a) 5.68016%, 1/24/97.......... 9,999,937
Morgan Stanley Group, Inc.
$ 18,000(a) 5.6875%, 1/15/97........... $ 18,000,000
33,000(a) 5.625%, 2/18/97............ 33,000,000
NationsBank Auto Owner
Trust
15,715(a) 5.776%, 1/15/97............ 15,714,324
NationsBank Corp.
4,000 7.50%, 2/15/97............. 4,008,215
Repackaged Asset Trust
81,000(a) 6.00586%, 1/15/97.......... 80,983,470
SMM Trust 1995-Q
174,000(a) 5.60547%, 1/8/97........... 173,999,688
--------------
Total Other Corporate
Obligations
(amortized cost
$935,014,341)............ 935,014,341
--------------
U.S. Government Agency & Instrumentality
Obligations-Non-discount--1.3%
Federal National Mortgage
Association
50,000 5.48%, 4/24/97............. 49,952,094
United States Treasury
Notes
20,000 6.125%, 5/31/97............ 20,023,259
--------------
Total U.S. Government
Agency & Instrumentality
Obligations-Non-discount
(amortized cost
$69,975,353)............. 69,975,353
--------------
Total Investments--99.7%
(amortized cost
$5,605,644,133).......... 5,605,644,133
Other assets in excess of
liabilities--0.3%........ 16,057,408
--------------
Net Assets--100%........... $5,621,701,541
--------------
--------------
</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) Indicates a security restricted as to resale.
-8-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND MONEY FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets
December 31, 1996
- -----------------
<S>
<C>
Investments, at amortized cost which approximates market
value........................ $ 5,605,644,133
Receivable for Fund shares
sold.......................................................
107,102,643
Interest
receivable..................................................
................. 29,172,320
Prepaid
expenses....................................................
.................. 143,543
- -----------------
Total
assets......................................................
.................. 5,742,062,639
- -----------------
Liabilities
Bank
overdraft...................................................
..................... 78,327
Payable for Fund shares
repurchased.................................................
.. 117,149,188
Management fee
payable.....................................................
........... 1,895,243
Accrued expenses and other
liabilities................................................
892,737
Distribution fee
payable.....................................................
......... 345,603
- -----------------
Total
liabilities.................................................
.................. 120,361,098
- -----------------
Net Assets
Applicable to 5,621,701,541 shares of beneficial interest
(.01 par value) issued and
outstanding;
unlimited number of shares
authorized...............................................
$ 5,621,701,541
- -----------------
- -----------------
Net asset value, offering price and redemption price per
share ($5,621,701,541 /
5,621,701,541
shares).....................................................
.......... $1.00
- -----------------
- -----------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
-9-
<PAGE>
COMMAND MONEY FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
Net Investment Income 1996
<S> <C>
Income
Interest............................. $ 156,641,148
------------------
Expenses
Management fee....................... 10,649,923
Distribution fee..................... 3,578,495
Registration fees.................... 907,000
Transfer agent's fees and expenses... 857,000
Custodian's fees and expenses........ 111,000
Insurance expense.................... 76,000
Reports to shareholders.............. 76,000
Trustees' fees and expenses.......... 33,000
Audit fee and expenses............... 22,000
Legal fees and expenses.............. 8,000
Miscellaneous........................ 748
------------------
Total expenses..................... 16,319,166
------------------
Net investment income.................. 140,321,982
------------------
Realized Gain on Investments
Net realized gain on investment
transactions......................... 16,390
------------------
Net Increase in Net Assets
Resulting from Operations.............. $ 140,338,372
------------------
------------------
</TABLE>
COMMAND MONEY FUND
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase in December 31, June 30,
Net Assets 1996 1996
<S> <C> <C>
Operations
Net investment
income........... $ 140,321,982 $ 252,390,009
Net realized gain
on investment
transactions..... 16,390 125,755
---------------- ----------------
Net increase in net
assets resulting
from operations.. 140,338,372 252,515,764
---------------- ----------------
Dividends and
distributions to
shareholders....... (140,338,372) (252,515,764)
---------------- ----------------
Fund share
transactions (at $1
per share)
Net proceeds from
shares
subscribed....... 13,606,967,223 24,708,980,727
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions.... 140,338,372 252,515,764
Cost of shares
reacquired....... (13,435,445,964) (23,707,354,464)
---------------- ----------------
Net increase in net
assets from Fund
share
transactions..... 311,859,631 1,254,142,027
---------------- ----------------
Total increase....... 311,859,631 1,254,142,027
Net Assets
Beginning of
period............. 5,309,841,910 4,055,699,883
---------------- ----------------
End of period........ $ 5,621,701,541 $ 5,309,841,910
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
-10-
<PAGE>
COMMAND MONEY FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended June 30,
December 31, -
- ------------------------------------------------------------
- -----
1996
1996 1995 1994 1993 1992
------------ -
- --------- ---------- ---------- ---------- -----
- -----
<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................................ 0.025
0.052 0.050 0.029 0.030
0.046
Dividends and distributions to
shareholders......................... (0.025)
(0.052) (0.050) (0.029) (0.030)
(0.046)
------------ -
- --------- ---------- ---------- ---------- -----
- -----
Net asset value, end of period......... $ 1.000 $
1.000 $ 1.000 $ 1.000 $ 1.000 $
1.000
------------ -
- --------- ---------- ---------- ---------- -----
- -----
------------ -
- --------- ---------- ---------- ---------- -----
- -----
TOTAL RETURN(b):....................... 2.50%
5.30% 5.13% 2.98% 3.01%
4.71%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........ $ 5,621,702
$5,309,842 $4,055,700 $2,448,201 $2,436,672
$2,125,430
Average net assets (000)............... $ 5,678,916
$4,896,794 $3,072,284 $2,570,195 $2,275,532
$2,377,108
Ratios to average net assets:
Expenses, including distribution
fees................................. .57%(a)
.58% .59% .59% .61% .64%
Expenses, excluding distribution
fees................................. .45%(a)
.46% .47% .47% .48% .51%
Net investment income................ 4.90%(a)
5.15% 5.09% 2.92% 2.90%
4.57%
</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 26.
-11-
<PAGE>
COMMAND GOVERNMENT FUND Portfolio
of Investments
December
31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
U.S. Government Agencies--82.2%
Federal Farm Credit Bank
$ 3,500 5.32%, 12/17/97............... $ 3,318,972
------------
Federal Home Loan Bank
23,500 5.29%, 1/14/97................ 23,455,109
24,195 13.00%, 1/30/97............... 24,337,094
10,000 5.997%, 9/30/97............... 9,999,776
------------
57,791,979
------------
Federal Home Loan Mortgage
Corporation
950 7.91%, 1/13/97................ 950,681
16,918 5.29%, 1/14/97................ 16,885,682
8,435 7.82%, 1/24/97................ 8,447,145
7,000 5.23%, 2/3/97................. 6,966,441
10,000 5.24%, 2/14/97................ 9,935,956
16,000 5.225%, 2/28/97............... 15,865,311
15,000 5.30%, 3/14/97................ 14,841,000
15,000 5.27%, 3/17/97................ 14,835,312
10,000 5.26%, 6/20/97................ 9,751,611
------------
98,479,139
------------
Federal National Mortgage
Association
25,000(a) 5.4025%, 1/3/97............... 24,984,300
15,000 5.23%, 1/28/97................ 14,941,162
20,000(a) 5.49406%, 1/29/97............. 19,993,326
35,000(a) 5.42%, 2/1/97................. 34,991,061
25,575(a) 5.42%, 2/14/97................ 25,563,894
10,000 5.22%, 2/18/97................ 9,930,400
8,695(a) 5.42%, 2/24/97................ 8,691,752
20,000 5.21%, 3/3/97................. 19,823,439
10,000 5.30%, 3/27/97................ 9,874,861
15,365 5.37%, 3/27/97................ 15,170,185
5,000 5.50%, 3/27/97................ 4,935,069
10,000 5.30%, 4/4/97................. 9,863,083
10,000 5.25%, 4/11/97................ 9,854,167
$ 10,000 5.22%, 5/16/97................ $ 9,804,250
16,250(a) 5.71%, 5/20/97................ 16,243,696
5,000(a) 5.40%, 6/5/97................. 4,993,489
------------
239,658,134
------------
Student Loan Marketing
Association
1,000(a) 5.39%, 1/14/97................ 999,266
7,000(a) 5.87%, 6/30/97................ 6,998,075
------------
7,997,341
------------
United States Treasury Notes
18,000 6.50%, 5/15/97................ 18,049,869
5,000 6.50%, 8/15/97................ 5,020,132
5,000 5.75%, 9/30/97................ 5,010,675
------------
28,080,676
------------
Total U.S. Government Agencies
(amortized cost
$435,326,241)............... 435,326,241
------------
Repurchase Agreements(b)--17.9%
47,000 SBC Warburg Australia, Ltd.,
5.40%, dated 12/02/96, due
01/02/97 in the amount of
$47,218,550 (cost
$47,000,000), value of
collateral including
accrured
interest--$48,354,244....... 47,000,000
12,109 Smith Barney, Inc., 5.68%,
dated 12/23/96, due 01/09/97
in the amount of $3,008,047
(cost $3,000,000), value of
collateral including accrued
interest--$3,060,000........ 12,109,000
9,000 Morgan Stanley 6.08%, dated
12/27/96, due 01/03/97 in
the amount of $9,009,120
(cost $9,000,000), value of
collateral including accrued
interest--$9,258,477........ 9,000,000
</TABLE>
-12-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND GOVERNMENT FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
Repurchase Agreements--(cont'd)
$ 10,180 Morgan Stanley 6.08%, dated
12/27/96, due 01/03/97 in
the amount of $9,009,120
(cost $9,000,000), value of
collateral including accrued
interest--$9,258,477........ $ 10,180,000
4,500 Goldman Sachs 5.45%, dated
12/09/96, due 01/08/97 in
the amount of $4,516,350
(cost $4,500,000 value of
collateral including accrued
interest--$4,590,000........ 4,500,000
3,000 Smith Barney, Inc., 5.68%,
dated 12/23/96, due 01/09/97
in the amount of $3,008,047
(cost $3,000,000), value of
collateral including accrued
interest--$3,060,000........ 3,000,000
8,784 Goldman Sachs 5.45%, dated
12/09/96, due 01/08/97 in
the amount of $4,516,350
(cost $4,500,000 value of
collateral including accrued
interest--$4,590,000........ 8,784,000
------------
Total Repurchase
Agreements
(amortized cost
$94,573,000)................ 94,573,000
------------
Total Investments--100.1%
(amortized cost
$529,899,241)............... $529,899,241
Liabilities in excess of other
assets--(0.1%).............. (750,738)
------------
Net Assets--100%.............. $529,148,503
------------
------------
</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.
-13-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND GOVERNMENT FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets
December 31, 1996
- -----------------
<S>
<C>
Investments, at amortized cost which approximates market
value........................ $ 529,899,241
Recievable for Fund shares
sold.......................................................
8,934,497
Interest
receivable..................................................
................. 2,394,844
Prepaid
expenses....................................................
.................. 13,152
- -----------------
Total
assets......................................................
.................. 541,241,734
- -----------------
Liabilities
Bank
overdraft...................................................
..................... 56,847
Payable for Fund shares
repurchased.................................................
.. 11,380,434
Accrued expenses and other
liabilities................................................
440,685
Management fee
payable.....................................................
........... 183,063
Distribution fee
payable.....................................................
......... 32,202
- -----------------
Total
liabilities.................................................
.................. 12,093,231
- -----------------
Net Assets
Applicable to 529,148,503 shares of beneficial interest (.01
par value) issued and
outstanding;
unlimited number of shares
authorized...............................................
$ 529,148,503
- -----------------
- -----------------
Net asset value, offering price and redemption price per
share ($529,148,503 /
529,148,503
shares).....................................................
............ $1.00
- -----------------
- -----------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
-14-
<PAGE>
COMMAND GOVERNMENT FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
Net Investment Income 1996
<S> <C>
Income
Interest............................. $14,053,904
-----------------
Expenses
Management fee....................... 1,036,134
Distribution fee..................... 323,792
Registration fees.................... 121,000
Custodian's fees and expenses........ 50,000
Transfer agent's fees and expenses... 40,000
Trustee's fees and expenses.......... 25,000
Reports to shareholders.............. 23,000
Audit fee and expenses............... 19,000
Legal fees and expenses.............. 10,000
Insurance expense.................... 7,000
Miscellaneous........................ 4,084
-----------------
Total expenses..................... 1,659,010
-----------------
Net investment income.................. 12,394,894
-----------------
Realized Gain on Investments
Net realized gain on investment
transactions......................... 38,509
-----------------
Net Increase in Net Assets
Resulting from Operations.............. $12,433,403
-----------------
-----------------
</TABLE>
COMMAND GOVERNMENT FUND
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase in December 31, June 30,
Net Assets 1996 1996
<S> <C> <C>
Operations
Net investment
income............... $ 12,394,894 $ 23,722,473
Net realized gain on
investment
transactions....... 38,509 60,771
--------------- ---------------
Net increase in net
assets resulting
from operations.... 12,433,403 23,783,244
--------------- ---------------
Dividends and
distributions to
shareholders......... (12,433,403) (23,783,244)
--------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares
subscribed......... 1,246,796,854 2,100,249,743
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions...... 12,433,403 23,783,244
Cost of shares
reacquired........... (1,217,566,464) (2,040,843,422)
--------------- ---------------
Net increase in net
assets from Fund
share
transactions....... 41,663,793 83,189,565
--------------- ---------------
Total increase......... 41,663,793 83,189,565
Net Assets
Beginning of period.... 487,484,710 404,295,145
--------------- ---------------
End of period.......... $ 529,148,503 $ 487,484,710
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
-15-
<PAGE>
COMMAND GOVERNMENT FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six
Months
Ended
Year Ended June 30,
December
31, ----------------------------------------------------
- ----
1996
1996 1995 1994 1993 1992
---------
- --- -------- -------- -------- -------- ----
- ----
<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....
.024 .050 .048 0.028 0.028
0.045
Dividends and distributions to shareholders.....
(.024) (.050) (.048) (0.028) (0.028)
(0.045)
---------
- --- -------- -------- -------- -------- ----
- ----
Net asset value, end of period.................. $
1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
$ 1.000
---------
- --- -------- -------- -------- -------- ----
- ----
---------
- --- -------- -------- -------- -------- ----
- ----
TOTAL RETURN(b).................................
2.44% 5.12% 4.89% 2.86% 2.85%
4.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).................
$529,149 $487,485 $404,295 $325,257 $381,703
$372,988
Average net assets (000)........................
$513,843 $477,168 $350,458 $376,159 $380,103
$422,639
Ratios to average net assets:
Expenses, including distribution fees.........
.64%(a) .68% .65% .63% .65%
.69%
Expenses, excluding distribution fees.........
.52%(a) .56% .53% .51% .53%
.57%
Net investment income.........................
4.79%(a) 4.97% 4.81% 2.79% 2.74%
4.38%
</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 26.
-16-
<PAGE>
COMMAND TAX-FREE FUND Portfolio
of Investments
December
31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Moody's Amount
Value
Rating (000) Description (a) (Note
1)
<S> <C> <C> <C>
ARIZONA--1.5%
Pima Cnty. Ind. Dev.
Auth., F.R.W.D.,
A-1+* $ 14,945 4.35%, 1/2/97, Ser. 96B... $
14,945,000
-------
- -----
ARKANSAS--1.5%
Arkansas Dev. Fin. Auth.,
Sngl. Family Mtge. Rev.,
A.N.N.O.T.,
3.80%, 2/28/97, Ser.
A-1+* 7,585 96D.....................
7,585,000
Arkansas Fin. Auth. Sngl.
Family Mtg. Rev.,
Q.T.R.M.T.,
3.60%, 2/28/97, Ser.
A-1+* 7,000 96H.....................
7,000,000
-------
- -----
14,585,000
-------
- -----
CALIFORNIA--3.6%
California Higher Ed. Ln.
Auth. Inc., Student Ln.
Rev., A.N.N.M.T.,
VMIG1 25,000 3.95%, 7/1/97, Ser. 87A...
25,000,000
California Student Ln.
Marketing Corp.,
Student Ln. Rev. Rfdg.,
A.N.N.M.T.,
3.85%, 11/1/97, Ser.
VMIG1 10,800 93A.....................
10,800,000
-------
- -----
35,800,000
-------
- -----
COLORADO--9.8%
Arapahoe Cnty. Multifamily
Rev., Ref. Hsg.,
Stratford Proj.,
F.R.D.D.,
A-2* 5,000 5.55%, 1/2/97, Ser. 94....
5,000,000
Avon Cnty. Ind. Dev. Rev.,
Beaver Creek Proj.,
F.R.M.D.,
P-1 9,000 3.75%, 1/15/97, Ser. 84...
9,000,000
Colorado Hsg. & Fin.
Auth., Greenwood
Multifamily, F.R.W.D.,
A-1+* 9,470 4.30%, 1/2/97, Ser. 96D...
9,470,000
Loretto Heights
Multifamily Rev.,
F.R.W.D.,
A-1+* $ 9,200 4.30%, 1/2/97, Ser. 96F... $
9,200,000
Moritz Multifamily,
F.R.W.D.,
A-1+* 8,015 4.30%, 1/2/97, Ser. 96H...
8,015,000
Eagle Trust, F.R.W.D.S.,
A-1* 19,700 4.26%, 1/2/97, Ser. 94C...
19,700,000
Hampton's Crt., F.R.W.D.,
A-1+* 9,600 4.30%, 1/2/97, Ser. 96G...
9,600,000
Hunter's Ridge Multifamily
Hsg. Rev., F.R.W.D.,
A-1+* 6,005 4.30%, 1/2/97, Ser. 96E...
6,005,000
Silver Reef, F.R.W.D.,
A-1* 9,490 4.30%, 1/2/97, Ser. 96A...
9,490,000
Denver City & Cnty.
Airport Rev., F.R.W.D.,
VMIG1 11,300 4.35%, 1/2/97, Ser. 91B...
11,300,000
-------
- -----
96,780,000
-------
- -----
CONNECTICUT--2.1%
Connecticut Hsg. Fin.
Auth., A.N.N.M.T.,
3.60%, 4/10/97, Ser.
VMIG1 15,000 A-3.....................
14,998,364
Connecticut Spec. Assmt.,
Unemployment Comp. Rev.,
A.N.N.M.T.,
VMIG1 5,500 3.90%, 7/1/97, Ser 93C....
5,500,000
-------
- -----
20,498,364
-------
- -----
DISTRICT OF COLUMBIA--2.4%
Dist. of Columbia Hsg.
Fin. Agcy., Carmel
Plaza, F.R.W.D.,
VMIG1 8,830 4.15%, 1/2/97, Ser. 91....
8,830,000
Dist. of Columbia Rev.,
Gen. Oblig., F.R.D.D.,
5.00%, 1/2/97, Ser.
VMIG1 5,000 92A-6...................
5,000,000
</TABLE>
-17-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Principal
Moody's Amount
Value
Rating (000) Description (a) (Note
1)
<S> <C> <C> <C>
DISTRICT OF COLUMBIA--(cont'd)
Metro. Wash. Airport,
T.E.C.P.,
A-1* $ 10,000 3.65%, 5/20/97............ $
10,000,000
-------
- -----
23,830,000
-------
- -----
FLORIDA--3.3%
Muni Trust I Class A
Ambassador Apt. Inc.,
F.R.W.D.S.,
A-1+* 13,500 4.38%, 1/2/97, Ser. 1.....
13,500,000
Pasco Cnty. School Bd.,
M.T.H.O.T.,
VMIG1 11,000 4.15%, 1/9/97, Ser. 96....
11,000,000
Putnam Cnty. Dev. Auth.,
Seminole Elec. Proj.,
S.E.M.O.T.,
3.80%, 3/15/97, Ser.
P-1 8,000 84H-4...................
8,000,000
-------
- -----
32,500,000
-------
- -----
GEORGIA--6.3%
Burke Cnty. Georgia Dev. Auth.,
Oglethorpe Pwr. Corp.,
3.875%, 5/15/97, Ser.
NR 14,215 96......................
14,215,000
Cobb Cnty. Hsg. Auth.,
Terrell Mill II Assoc.,
F.R.W.D.,
4.25%, 1/2/97, Ser. Cr
A-1+* 10,600 171.....................
10,600,000
Georgia Oblig. Bond,
A.N.N.O.T.,
AAA* 15,900 3.60%, 4/1/97, Ser. 95C
15,900,000
Monroe Cnty. Dev.Auth.,
Oglethorpe Sherer Proj.,
3.875%, 5/15/97, Ser.
NR 13,670 96......................
13,670,000
Roswell Hsg. Auth., Post
Canyon Proj., F.R.W.D.
A-1+* $ 7,500 4.05%, 1/2/97, Ser. 96.... $
7,500,000
-------
- -----
61,885,000
-------
- -----
ILLINOIS--9.8%
Gurnee Ind. Dev. Rev.,
Sterigenics Intl. Proj.,
F.R.W.D.,
A-1* 7,750 4.35%, 1/2/97, Ser. 96....
7,750,000
Illinois Dev. Fin. Auth.
Rev., Chicago Symphony,
F.R.W.D.,
A-1+* 10,000 3.05%, 1/8/97, Ser. 96....
10,000,000
Multifamily Hsg.,
F.R.W.D.,
A-1* 8,900 4.50%, 1/3/97, Ser. 92....
8,900,000
Illinois Hlth. Fac. Auth.,
Servant Cor Falcon II,
F.R.W.D.,
A-1+* 13,500 4.30%, 1/1/97, Ser. 96A...
13,500,000
Children's Mem. Hosp.,
S.E.M.M.T.,
3.70%, 2/20/97, Ser.
VMIG1 15,000 90A.....................
15,000,000
Evanston Hosp. Corp.
Proj., A.N.N.M.T.,
VMIG1 12,000 3.70%, 12/1/97, Ser. 92...
12,000,000
Evanston Hsp. Corp. Prog.,
A.N.N.M.T.,
VMIG1 18,000 3.75%, 5/15/97, Ser. 95...
18,000,000
Victory Hlth. Srvcs.
Proj., M.T.H.M.T.,
VMIG1 11,300 3.50%, 2/6/97, Ser. 91....
11,300,000
-------
- -----
96,450,000
-------
- -----
INDIANA--2.5%
Gary Econ. Dev. Rev.,
Miller Partnership,
F.R.W.D.,
VMIG1 7,000 4.35%, 1/2/97, Ser. 96A...
7,000,000
</TABLE>
-18-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Principal
Moody's Amount
Value
Rating (000) Description (a) (Note
1)
<S> <C> <C> <C>
INDIANA--(cont'd)
Indiana Ed. Fac. Auth.,
Wesleyan Univ. F.R.W.D.,
NR $ 10,000 4.20%, 1/2/97, Ser. 93.... $
10,000,000
Indiana Hlth. Fac. Fin.
Auth.,
Rev., Baptist Homes of
Indiana, F.R.W.D.,
NR 7,395 4.20%, 1/2/97, Ser. 95....
7,395,000
-------
- -----
24,395,000
-------
- -----
IOWA--5.4%
Iowa School Corps.,
Warrent Certificates,
4.75%, 6/27/97, Ser.
MIG1 24,000 95-6A...................
24,082,947
Louisa Cnty. Poll. Ctrl.
Rev., Mid-American
Energy, F.R.W.D.,
VMIG1 20,000 4.20%, 1/2/97, Ser. 85....
20,000,000
Sergeant Bluff Dev. Rev.,
Sioux City Brick & Tile
Proj., F.R.W.D.,
NR 9,100 4.35%, 1/2/97, Ser. 96....
9,100,000
-------
- -----
53,182,947
-------
- -----
KENTUCKY--2.0%
Louisville & Jefferson
Cnty., Sewer & Drainage
Sub. Notes, F.R.W.D.,
A-1* 20,000 4.30%, 1/2/97, Ser. 96A...
20,000,000
-------
- -----
LOUISIANA--2.1%
Calcasieu Parish Ind. Dev.
Board, Citgo. Corp.,
F.R.D.D.,
VMIG1 3,900 5.10%, 1/2/97, Ser. 94....
3,900,000
Louisiana Pub. Fac. Auth.,
Hosp. Equip., F.R.W.D.,
VMIG1 6,900 4.45%, 1/2/97, Ser. 85A...
6,900,000
West Baton Rouge Parish
Ind. Dist. #3 Rev., Dow
Chemical Co. Proj.,
F.R.D.D.,
P-1 $ 10,100 5.10%, 1/2/97, Ser. 93.... $
10,100,000
-------
- -----
20,900,000
-------
- -----
MARYLAND--0.8%
Maryland Econ. Dev. Corp.,
F.R.W.D.,
A-1* 7,500 4.30%, 1/2/97, Ser. 95....
7,500,000
-------
- -----
MASSACHUSETTS--4.4%
Massachusetts Bay Transit
Auth.,
MIG2 11,700 3.75%, 2/28/97, Ser. A....
11,704,448
Massachusetts Hsg. Fin.
Agcy., Single Family
Hsg. Rev., Ser. 5-Eagle
Trust,
NR 9,600 3.65%, 3/1/97, Ser. 96....
9,600,000
Revere Hsg. Auth. Multifamily
Mtge. Rev., Waters Edge
Apts. Proj., F.R.W.D.,
Aaa 22,000 4.50%, 1/3/97, Ser. 91C...
22,000,000
-------
- -----
43,304,448
-------
- -----
MICHIGAN--1.0%
Charter Co. of Wayne,
Detroit Metro Wayne Co.
Airport, F.R.W.D.,
P-1 9,400 4.25%, 1/2/97, Ser. 96A...
9,400,000
-------
- -----
MINNESOTA--0.5%
Bloomington Comm. Dev.
Rev., 94th Street Assoc.
Proj., F.R.W.D.,
A-1+* 5,375 4.20%, 1/3/97, Ser. 85....
5,375,000
-------
- -----
</TABLE>
-19-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Principal
Moody's Amount
Value
Rating (000) Description (a) (Note
1)
<S> <C> <C> <C>
MISSISSIPPI--1.7%
Harrison Cnty. Poll. Ctrl.
Rev.,
Mississippi Pwr. Co.
Proj., F.R.W.D.,
A-1* $ 16,750 4.15%, 1/2/97, Ser. 92.... $
16,750,000
-------
- -----
MISSOURI--1.8%
Missouri Environ. Impvt. &
Energy Res. Auth., Union
Elec. Co., A.N.N.O.T.,
P-1 6,095 3.65%, 6/1/97, Ser. 84A...
6,091,303
St. Charles Cnty. Ind.
Dev. Auth., Cedar Ridge
Apts., F.R.W.D.,
A-1+* 11,270 4.20%, 1/2/97, Ser. 88A...
11,270,000
-------
- -----
17,361,303
-------
- -----
NEBRASKA--0.2%
Nebraska Pub. Pwr. Dist.
Rev., T.E.C.P.,
P-1 2,000 3.40%, 3/11/97, Ser. B....
2,000,000
-------
- -----
NEW JERSEY--2.0%
Jersey City, New Jersey
School Promissory Notes
SP-1+* 19,400 3.75%, 3/7/97.............
19,415,035
-------
- -----
NEW MEXICO--0.8%
New Mexico Highway Comm.,
Hwy. Tax Rev.,
Q.T.R.O.T.,
MIG1 7,700 3.70%, 2/5/97, Ser. 96....
7,700,000
-------
- -----
NEW YORK--2.1%
New York City Gen. Oblig.,
T.E.C.P.,
3.65%, 1/10/97, Ser.
VMIG1 5,300 94H-2...................
5,300,000
3.60%, 1/13/97, Ser.
NR 15,200 94H-3...................
15,200,000
-------
- -----
20,500,000
-------
- -----
NORTH CAROLINA--0.5%
Cabarrus Cnty. Ind. Facs.
Auth., Poll. Ctrl. Rev.,
Philip Morris Proj.,
F.R.W.D.,
P-1 $ 5,000 4.15%, 1/2/97, Ser. 92.... $
5,000,000
-------
- -----
OHIO--2.6%
Franklin Cnty. Hosp. Fac.,
US Health Corp.,
F.R.W.D.,
VMIG1 12,000 4.15%, 1/2/97, Ser. 96A...
12,000,000
Ohio Hsg. Agcy., Res. Mtg.
Rev., A.N.N.M.T.,
3.40%, 3/3/97, Ser.
A-1+* 14,000 96A-3...................
14,000,000
-------
- -----
26,000,000
-------
- -----
OKLAHOMA--0.6%
Muskogee Mall Proj.,
F.R.W.D.,
VMIG1 5,600 4.40%, 1/2/97, Ser. 85....
5,600,000
-------
- -----
OREGON--1.9%
Oregon Hsg. & Comm. Svcs.
Dept., Sngl. Family Mtg.
Proj., A.N.N.M.T.,
3.85%, 5/15/97, Ser.
MIG1 5,000 96C.....................
5,000,000
Oregon State Hlth. Hsg.
Ed. & Cult., Peace Hlth.
Proj., F.R.W.D.,
A-1+* 14,235 4.20%, 1/2/97, Ser. 95....
14,235,000
-------
- -----
19,235,000
-------
- -----
PENNSYLVANIA--3.2%
Emmaus Gen. Auth.,
F.R.W.D.,
A-1+* 10,000 5.00%, 1/2/97, Ser. 96....
10,000,000
Montgomery Cnty., Higher
Ed., F.R.W.D.,
A-1* 1,300 4.30%, 1/2/97, Ser. 96A...
1,300,000
</TABLE>
-20-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Principal
Moody's Amount
Value
Rating (000) Description (a) (Note
1)
<S> <C> <C> <C>
PENNSYLVANIA--(cont'd)
Northeastern Hosp. & Ed.
Auth., Hlth. Fin. Prog.,
F.R.W.D.,
VMIG1 $ 19,900 4.30%, 1/2/97, Ser. 96.... $
19,900,000
-------
- -----
31,200,000
-------
- -----
RHODE ISLAND--1.0%
Rhode Island Student Ln.
Auth., F.R.W.D.,
4.15%, 1/2/97, Ser.
A-1+* 10,000 96-2....................
10,000,000
-------
- -----
SOUTH CAROLINA--0.3%
York Cnty. Poll. Ctrl.
Rev., Electric Proj.,
S.E.M.O.T.,
3.80%, 3/15/97, Ser.
VMIG1 2,500 84N-6...................
2,500,000
-------
- -----
SOUTH DAKOTA--0.9%
South Dakota Hsg. Dev.
Auth., Home Ownership,
F.R.W.D.S.,
4.30%, 1/2/97, Ser.
A-1+* 9,200 PT-85...................
9,200,000
-------
- -----
TENNESSEE--1.1%
Montgomery Cnty. Pub.
Bldg., F.R.W.D.,
A-1* 11,000 4.30%, 1/2/97, Ser. 95....
11,000,000
-------
- -----
TEXAS--10.8%
Bexar County Hsg. Fin.
Corp. Perrin Park Apt.,
F.R.W.D.,
VMIG1 10,900 4.51%, 1/2/97, Ser. 96....
10,900,000
Brazos River Harbor Nav.
Dist.,
Dow Chemical Co., Proj.,
F.R.D.D.,
P-1 2,000 5.10%, 1/2/97, Ser. 96....
2,000,000
P-1 4,000 5.10%, 1/2/97, Ser. 93....
4,000,000
Collin Cnty. Hsg. Fin.
Corp., Huntington Apts
Proj., F.R.W.D.,
A-1* $ 6,155 4.26%, 1/2/97, Ser. 96.... $
6,155,000
DeSota Ind. Dev. Auth.,
Nat'l. Svc. Inds. Inc.
Proj., F.R.W.D.,
Aa2 7,150 4.15%, 1/2/97, Ser. 91....
7,150,000
Greater East Texas Student
Ln. Rev., A.N.N.O.T.,
VMIG1 11,650 3.85%, 5/1/97, Ser. 95A...
11,650,000
Houston Gen. Oblig.,
T.E.C.P.,
P-1 12,900 3.45%, 1/2/97, Ser. A.....
12,900,000
Wtr. & Sewer, T.E.C.P.,
P-1 10,000 3.60%, 4/11/97, Ser. A....
10,000,000
San Antonio, Elec. & Gas
Rev.,T.E.C.P.,
P-1 15,000 3.50%, 3/11/97, Ser. A....
15,000,000
Water Systems, T.E.C.P.,
P-1 5,000 3.50%, 1/2/97, Ser. 95....
5,000,000
Texas Board of Regents,
A & M Univ., T.E.C.P.,
VMIG1 9,000 3.55%, 1/10/97............
9,000,000
Texas State, T.R.A.N.,
MIG1 7,000 4.75%, 8/29/97, Ser. 96...
7,034,523
Waller Cnty. Ind. Dev.
Corp., Mckesson Water
Prod., F.R.W.D.,
A-1* 6,000 4.50%, 1/2/97, Ser. 96....
6,000,000
-------
- -----
106,789,523
-------
- -----
UTAH--1.5%
Intermountain Pwr. Auth.
Supply Rev., A.N.N.O.T.,
3.93%, 6/16/97, Ser.
VMIG1 14,500 85E.....................
14,500,000
-------
- -----
</TABLE>
-21-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Principal
Moody's Amount
Value
Rating (000) Description (a) (Note
1)
<S> <C> <C> <C>
VIRGINIA--4.0%
Chesterfield Cnty. Ind.
Dev. Auth., Virginia
Elec. Pwr. Co. Proj.,
T.E.C.P.,
VMIG1 $ 17,600 3.55%, 3/6/97, Ser. 87A... $
17,600,000
Phillip Morris Proj.,
F.R.W.D.,
P-1 8,500 4.15%, 1/2/97.............
8,500,000
Harrisonburg Redev. & Hsg.
Auth., Multifamly Hsg.
Rev., F.R.W.D.,
VMIG1 13,000 4.15%, 1/2/97, Ser. 91A...
13,000,000
-------
- -----
39,100,000
-------
- -----
WASHINGTON--2.8%
Pierce Cnty. Econ. Dev.
Corp., Sealand Inc.,
F.R.W.D.,
Aa2 10,000 4.15%, 1/2/97, Ser. 96....
10,000,000
Washington Hsg. Fin.
Comm., Mills Plains
Crossing Proj.,
F.R.W.D.,
A-1+* 7,800 3.60%, 1/7/97, Ser. 88....
7,800,000
Canyon Lakes II Proj.,
F.R.D.D.,
VMIG1 4,900 5.00%, 1/2/97, Ser. 94....
4,900,000
Multifamily Rev.,
Wandering Creek Proj.,
F.R.D.D.,
VMIG1 5,300 5.45%, 1/2/97, Ser. 95....
5,300,000
-------
- -----
28,000,000
-------
- -----
WEST VIRGINIA--0.9%
West Virginia Public
Energy. Auth. Rev.,
Morgantown Energy,
T.E.C.P.,
3.55%, 4/11/97, Ser.
A-1* 9,000 89A.....................
9,000,000
-------
- -----
WYOMING--0.9%
Green River Poll. Cntrl.
Rev., OCI Chemical,
F.R.D.D.,
VMIG1 $ 9,200 5.75%, 1/2/97, Ser. 94.... $
9,200,000
-------
- -----
Total Investments--100.6%
(cost $991,381,620).......
991,381,620
Liabilities in excess of
other assets--(0.6%)....
(6,077,169)
-------
- -----
Net Assets--100%..........
$985,304,451
-------
- -----
-------
- -----
</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.
F.R.D.D--Floating Rate Daily Demand Note(b).
F.R.W.D.--Floating Rate (Weekly) Demand Note(b).
F.R.W.D.S.--Floating Rate Weekly Demand--Synthetic
Note(b).
M.T.H.M.T.--Monthly Mandatory Tender.
M.T.H.O.T.--Monthly Optional Tender.
Q.T.R.M.T.--Quarterly Mandatory Tender.
Q.T.R.O.T.--Quarterly 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.
T.R.A.N.--Tax and Revenue Anticipation Note.
(b) For purposes of amortized cost valuation, the maturity
date of Floating Rate
Demand Notes 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.
* Standard & Poor's rating.
NR--Not Rated by Moody's or Standard & Poor's.
-22-
See Notes to Financial Statements
appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets
December 31, 1996
- -----------------
<S>
<C>
Investments, at amortized cost which approximates market
value........................ $ 991,381,620
Cash........................................................
.......................... 28,663
Receivable for Fund shares
sold.......................................................
14,776,701
Receivable for investments
sold.......................................................
10,271,657
Interest
receivable..................................................
................. 7,115,072
Prepaid
expenses....................................................
.................. 30,166
- -----------------
Total
assets......................................................
.................. 1,023,603,879
- -----------------
Liabilities
Payable for Fund shares
repurchased.................................................
.. 27,270,986
Payable for investments
purchased...................................................
.. 10,000,000
Accrued
expenses....................................................
.................. 519,771
Management fee
payable.....................................................
........... 443,561
Distribution fee
payable.....................................................
......... 65,110
- -----------------
Total
liabilities.................................................
.................. 38,299,428
- -----------------
Net Assets
Applicable to 985,304,451 shares of beneficial interest
($.01 par value) issued and
outstanding;
unlimited number of shares
authorized...............................................
$ 985,304,451
- -----------------
- -----------------
Net asset value, offering price and redemption price per
share ($985,304,451 /
985,304,451
shares).....................................................
............ $1.00
- -----------------
- -----------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
-23-
<PAGE>
COMMAND TAX-FREE FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
Net Investment Income 1996
<S> <C>
Income
Interest............................. $21,026,260
-----------------
Expenses
Management fee....................... 2,651,900
Distribution fee..................... 736,935
Registration fees.................... 126,000
Transfer agent's fees and expenses... 96,000
Custodian's fees and expenses........ 61,000
Trustees' fees and expenses.......... 29,000
Audit fee and expenses............... 21,000
Reports to shareholders.............. 20,000
Insurance expense.................... 17,000
Legal fees and expenses.............. 10,000
Miscellaneous........................ 3,945
-----------------
Total expenses..................... 3,772,780
Less: custodian fee credit......... (41,330)
-----------------
Net expenses....................... 3,731,450
-----------------
Net investment income.................. 17,294,810
-----------------
Realized Gain on Investments
Net realized gain on investment
transactions......................... 8,700
-----------------
Net Increase in Net Assets
Resulting from Operations.............. $17,303,510
-----------------
-----------------
</TABLE>
COMMAND TAX-FREE FUND
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase in December 31, June 30,
Net Assets 1996 1996
<S> <C> <C>
Operations
Net investment
income............... $ 17,294,810 $ 34,755,227
Net realized gain on
investment
transactions....... 8,700 14,814
--------------- ---------------
Net increase in net
assets resulting
from operations.... 17,303,510 34,770,041
--------------- ---------------
Dividends and
distributions to
shareholders......... (17,303,510) (34,770,041)
--------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares
subscribed......... 2,286,947,879 4,980,375,440
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions...... 17,303,510 34,770,041
Cost of shares
reacquired........... (2,475,882,375) (4,913,777,690)
--------------- ---------------
Net increase
(decrease) in net
assets from Fund
share
transactions....... (171,630,986) 101,367,791
--------------- ---------------
Total increase
(decrease)........... (171,630,986) 101,367,791
Net Assets
Beginning of period.... 1,156,935,437 1,055,567,646
--------------- ---------------
End of period.......... $ 985,304,451 $ 1,156,935,437
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
-24-
<PAGE>
COMMAND TAX-FREE FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
December
Year Ended June 30,
31,
- ------------------------------------------------------------
1996
1996 1995 1994 1993 1992
----------
- ---------- ---------- -------- -------- --------
<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..................................... 0.015
0.031 0.032 0.020 0.022 0.035
Dividends and distributions to
shareholders.............................. (0.015)
(0.031) (0.032) (0.020) (0.022) (0.035)
----------
- ---------- ---------- -------- -------- --------
Net asset value, end of period.............. $ 1.000
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------
- ---------- ---------- -------- -------- --------
----------
- ---------- ---------- -------- -------- --------
TOTAL RETURN(b)............................. 1.49%
3.12% 3.29% 1.98% 2.23% 3.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............. $ 985,304
$1,156,935 $1,055,568 $847,602 $853,930 $729,122
Average net assets (000).................... $1,169,483
$1,134,257 $ 926,888 $908,421 $823,517 $751,458
Ratios to average net assets:
Expenses, including distribution fees.....
.64%(a) .66% .66% .65% .68%
.69%
Expenses, excluding distribution fees.....
.52%(a) .54% .54% .53% .55%
.56%
Net investment income.....................
2.93%(a) 3.06% 3.05% 1.96% 2.09%
3.47%
</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 26.
-25-
<PAGE>
COMMAND FUNDS
Notes to Financial Statements
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 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). Some securities may be subject to the federal
alternative minimum
tax (AMT). 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 LLC (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.
-26-
<PAGE>
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
Securities
Incorporated (``PSI''), which acts as the distributor of the
shares of each
Fund. Each Fund compensates PSI for distributing and
servicing each Funds
shares, pursuant the plan of distribution at an annual rate
of .125 of 1% of the
average daily net assets of each Fund's shares. The
distribution fees for shares
are accrued daily and payable monthly.
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. During the
six months ended December 31, 1996 the Funds incurred fees
for the services of
PMFS of approximately:
<TABLE>
<S> <C>
Command Money.................................... $949,180
Command Government............................... $ 41,094
Command Tax-Free................................. $ 89,314
</TABLE>
As of December 31, 1996, the following amounts were due
to PMFS from the
Funds:
<TABLE>
<S> <C>
Command Money.................................... $160,342
Command Government............................... $ 6,938
Command Tax-Free................................. $ 14,095
</TABLE>
-27-
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Toll free (800) 222-4324
(LOGO)
Trustees
Edward D. Beach
Stephen C. Eyre
Delayne Dedrick Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Mendel A. Melzer
Richard A. Redeker
Robin B. Smith
Langdon R. Stevenson
Stephen Stoneburn
Nancy H. Teeters
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace Torres, Treasurer
S. Jane Rose, Secretary
Manager
Prudential Mutual Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
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 LLC
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
The accompanying financial statements as of December 31,
1996 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.
