SEMI ANNUAL REPORT December 31,1994
Prudential Securities
Command Account
- ---------------------------------
Command Money Fund
Command Government Fund
Command Tax-Free Fund
<PAGE>
Letter to Shareholders
December 31, 1994
Dear Shareholder:
With short-term interest rates steadily rising, 1994 was a very good year
for money market investors and shareholders of the Command Money Fund, the
Command Government Fund and the Command Tax-Free Fund.
<TABLE>
FUND FACTS
As of December 31, 1994
<CAPTION>
7 Day Net Asset Weighted Total Net
Current Yld. Value Avg. Mat. Assets (mil.)
<S> <C> <C> <C> <C>
Command Money 5.27% $1.00 39 days $ 2,600 million
Command 5.13 1.00 31 days 365.4
Government
Command 3.85 1.00 71 days 747.2
Tax-Free
</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.
Fund Overview.
The Command Money Fund, Command Government Fund and Command Tax-Free Fund all
seek high current income consistent with the preservation of principal and
liquidity, each from a different segment of the short-term markets.
Additionally, the Tax-Free Fund captures income that is exempt from federal
income taxes.
The Federal Reserve Tightens.
Despite higher interest rates, the U.S. economy grew at a robust rate of
about 4% in 1994. Gross Domestic Product (GDP), the measure of goods
produced and services delivered, grew at a rate that many believed was
far faster than the Federal Reserve would have liked to have seen. This
supports our view that more interest rate increases are on the horizon.
In 1994, the central bank raised short-term interest rates six times,
increasing the federal funds rate
-1-
<PAGE>
(the interbank overnight lending rate) by 2.5 percentage points to 5.5%.
Long-term interest rates rose as bond investors worried that prices
would rise.
As it turned out, inflation, as measured by the Consumer Price Index,
grew by only 2.7% in 1994 -- the fourth straight year under 3%. But it
can be argued that inflation usually lags behind actual economic growth.
For example, commodity prices have been rising and employment growth has
been robust. Approximately three million people found jobs in 1994 sending
the unemployment rate to a four-year low, while consumer confidence soared.
If this view proves to be correct, then inflation might rise to 3.5% in
the coming year.
COMMAND MONEY FUND
The Command Money Fund invests in high-quality, U.S.-dollar denominated
money market securities issued by the U.S. government and its agencies,
major corporations, and commercial banks of the U.S. and foreign countries.
Maturities can range from one day to a maximum of 13 months. We generally
invest in securities rated in the two highest rating categories by major
credit rating agencies, or, if unrated, deemed to be of equivalent quality
by our own credit research staff.
Strategy: We Shortened.
The returns for money market funds are greatly affected by changes in
monetary policy. As interest rates rose, we shortened our maturities
to take advantage of the situation. For example, the Command Money
Fund's weighted average maturity (WAM) was as low as 27 days on August
11, 1994, just before the Federal Reserve raised rates by a half of a
percentage point. This enabled us to take advantage of new investments
offering higher interest rates as they came to market. Similarly, when
it became apparent that interest rates would increase once more in November,
we at first shortened our WAM to 35 days before the meeting and then
extended it afterward to as much as 46 days, anticipating a pause in
additional interest rate increases.
As of this writing, attractive sectors of the money market include U. S.
government agency obligations that have become priced more competitively
than Treasury obligations because of increased supply.
COMMAND GOVERNMENT FUND
The Command Government Fund invests primarily in high quality short-term
obligations of the U.S. government, its agencies and instrumentalities
and related repurchase agreements.
-2-
<PAGE>
Strategy: We Shortened.
We followed a similar strategy as the Command Money Fund, shortening our
maturities to take advantage of rising interest rates. We shortened the
Command Government Fund's weighted average maturity (WAM) to 38 days on
August 9, 1994, just before the Federal Reserve raised rates by a half
of a percentage point. This locked in higher interest rates as they came
to market. We employed the same strategy in November when it became
apparent that interest rates would increase once more. We then extended
the WAM since we believed there would be a pause in additional interest
rate increases through the end of 1994.
As of this writing, attractive sectors of the money market include U. S.
government agency obligations that have become priced more competitively
than Treasury obligations because of increased supply.
COMMAND TAX-FREE
The Command Tax-Free Fund invests primarily in short-term securities issued
by states, municipalities, their instrumentalities and authorities, whose
income is exempt from federal taxes.
The Municipal Market Is Different.
The impact of rising interest rates is also being felt by the tax-free
market although not as dramatically as the taxable markets. As we have
explained in previous letters, seasonal supply and demand factors govern
the direction of short-term, tax-exempt rates more than Federal
Reserve policy.
For example, yields on tax-free securities generally rise at the end
of December reflecting an increase in supply as individual investors
withdraw money for the holidays. By mid-January, though, yields fall
as investors return to the tax-free market.
Similar cyclical periods in the short-term, tax-exempt market occur
around income tax filing time and June 30, which marks the end of the
fiscal year for many government entities. Since our objective is to
manage the Fund very conservatively, our strategy is simple: we try to
keep the portfolio extremely liquid at these times, so we can take
advantage of seasonal rate shifts.
A Word About Quality.
As 1994 ended, all of the Command portfolios owned bonds that were
rated in the highest category by two or more nationally recognized
credit rating agencies, or they were deemed to be of equivalent quality
by our credit research staff if they were unrated. We can also report
that the Command Tax-Free portfolio has and had absolutely no exposure
to Orange County, Ca., debt issues when that County declared bankruptcy
last fall.
-3-
<PAGE>
The Outlook.
Since the economy has not yet slowed enough to prevent the threat of
rising inflation, we believe that further credit tightening will occur
in 1995. Short-term interest rates will continue to rise until the Federal
Reserve is satisfied that inflationary fears have subsided.
As always, it is a pleasure to have you as a shareholder. We are committed
to managing the Fund for your benefit.
Sincerely,
Lawrence C. McQuade
President
Robert N. Felice John H. Anderson, Jr. Richard S. Lynes
Portfolio Manager Portfolio Manager Portfolio Manager
Command Money Fund Command Government Fund Command
Tax-Free Fund
-4-
<PAGE>
COMMAND MONEY FUND Portfolio of Investments
December 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
BANK HOLDING PAPER--2.7%
Bankers Trust New York
Corp.
$ 71,000 5.44%, 1/24/95
(amortized cost
$70,753,236)............. $ 70,753,236
--------------
BANK NOTES--10.0%
First National Bank of
Chicago
50,000 5.6875%, 2/22/95........... 50,000,000
7,000 5.18%, 2/27/95............. 6,993,783
Nationsbank of Dallas
Texas, NA
38,000 6.03%, 1/31/95............. 38,000,000
PNC Bank, NA Pittsburgh
Pennsylvania
45,000 5.52%, 1/6/95.............. 44,999,502
46,000 5.15%, 2/22/95............. 46,000,131
PNC Bank, Ohio, NA
12,000 3.50%, 1/31/95............. 11,998,746
Republic National Bank of
New York
69,000 4.30%, 3/8/95.............. 68,963,953
--------------
Total Bank Notes
(amortized cost
$266,956,115)............ 266,956,115
--------------
CERTIFICATES OF DEPOSIT--
DOMESTIC--5.2%
Bank of Montreal (New York)
138,000 5.80%, 1/30/95
(amortized cost
$138,000,000)............ 138,000,000
--------------
CERTIFICATES OF DEPOSIT--
EURODOLLAR--1.0%
Bayerische Vereinsbank AG
25,000 5.83%, 1/23/95
(amortized cost
$25,000,302)............. 25,000,302
--------------
CERTIFICATES OF DEPOSIT--
YANKEE--14.3%
Bank of Tokyo
$ 40,000 6.46%, 3/30/95............. $ 40,000,000
Fuji Bank, Ltd.
20,000 5.90625%, 1/20/95.......... 20,000,000
30,000 5.90625%, 1/23/95.......... 30,000,000
40,000 6.36%, 3/21/95............. 40,000,000
Industrial Bank of Japan,
Ltd.
68,000 6.375%, 3/28/95............ 68,000,000
Sanwa Bank, Ltd.
5,000 5.85%, 1/23/95............. 5,000,000
25,000 6.04%, 2/2/95.............. 25,000,000
Societe Generale No.
America, Inc.
24,000 5.65%, 2/6/95.............. 24,000,000
96,000 5.65%, 2/7/95.............. 96,000,000
Sumitomo Bank, Ltd.
10,000 5.89%, 1/25/95............. 10,000,000
23,000 6.06%, 2/1/95.............. 23,000,000
--------------
Total Certificates of
Deposit--Yankee
(amortized cost
$381,000,000)............ 381,000,000
--------------
COMMERCIAL PAPER--DOMESTIC--45.8%
American Home Products
Corp.
2,697 5.90%, 1/31/95............. 2,683,740
87,000 5.92%, 2/6/95.............. 86,484,960
Aristar, Inc.
2,000 5.85%, 1/17/95............. 1,994,800
5,000 5.54%, 1/23/95............. 4,983,072
</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>
COMMERCIAL PAPER--DOMESTIC--(cont'd)
Asset Securitization
Cooperative Corp.
$ 20,000 5.50%, 1/23/95............. $ 19,932,778
25,000 5.52%, 1/23/95............. 24,915,667
Associates Corp. of No.
America
11,000 5.77%, 1/25/95............. 10,957,687
15,000 5.77%, 1/30/95............. 14,930,279
28,000 5.77%, 1/31/95............. 27,865,367
14,000 6.25%, 3/14/95............. 13,825,000
Beneficial Corp.
20,000 6.25%, 3/14/95............. 19,750,000
Chemical Bank N A
1,704 6.25%, 1/3/95.............. 1,704,000
Chrysler Financial Corp.
32,000 5.75%, 1/17/95............. 31,918,222
20,000 5.75%, 1/17/95............. 19,948,889
CIT Group Holdings, Inc.
5,000 5.50%, 1/17/95............. 4,987,778
57,000 5.97%, 2/1/95.............. 56,706,973
19,000 6.27%, 3/13/95............. 18,765,049
Coca Cola Enterprises, Inc.
4,000 6.015%, 2/1/95............. 3,979,282
Commercial Credit Co.
10,000 5.75%, 1/31/95............. 9,952,083
Corporate Receivables Corp.
4,000 6.28%, 3/6/95.............. 3,955,342
Dean Witter, Discover & Co.
9,000 5.78%, 1/23/95............. 8,968,210
Deerfield Capital
6,000 6.09%, 1/17/95............. 5,983,760
Duracell, Inc.
4,000 6.30%, 2/10/95............. 3,972,000
Falcon Asset Securitization
Corp.
7,000 6.17%, 2/7/95.............. 6,955,610
Ford Motor Credit Corp.
$ 138,400 5.78%, 2/1/95.............. $ 137,711,152
General Electric Capital
Corp.
40,000 5.43%, 1/11/95............. 39,939,667
26,000 5.50%, 1/12/95............. 25,956,306
16,000 5.78%, 2/2/95.............. 15,917,796
23,000 6.45%, 4/13/95............. 22,579,675
General Motors Acceptance
Corp.
138,100 5.74%, 1/17/95............. 137,747,692
5,000 6.25%, 2/6/95.............. 4,968,750
Greyhound Financial Corp.
3,000 6.20%, 1/13/95............. 2,993,800
2,000 6.17%, 1/26/95............. 1,991,431
2,500 6.33%, 2/7/95.............. 2,483,735
13,000 6.29%, 2/8/95.............. 12,913,687
Heller Financial Services,
Inc.
5,000 6.30%, 3/13/95............. 4,937,875
11,000 6.30%, 3/14/95............. 10,861,400
Household Finance Corp.
13,000 5.50%, 1/11/95............. 12,980,139
10,000 5.50%, 1/12/95............. 9,983,194
15,000 5.79%, 1/30/95............. 14,930,038
International Lease Finance
Corp.
8,000 5.75%, 1/18/95............. 7,978,278
ITT Financial Corp.
17,000 5.82%, 1/17/95............. 16,956,027
7,000 6.20%, 1/20/95............. 6,977,094
Maguire/Thomas Partners
3,593 6.22%, 2/9/95.............. 3,568,789
Merrill Lynch & Co., Inc.
21,000 5.75%, 1/17/95............. 20,946,333
7,000 5.77%, 1/19/95............. 6,979,805
Morgan Stanley Group, Inc.
26,000 6.27%, 3/1/95.............. 25,732,828
NationsBank Corp.
19,640 5.40%, 1/23/95............. 19,575,188
</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--DOMESTIC--(cont'd)
Pennsylvania Power &
Lighting Co.
$ 5,040 6.15%, 1/17/95............. $ 5,026,224
7,000 5.83%, 1/17/95............. 6,981,862
Sears Roebuck Acceptance
Corp.
31,000 5.87%, 1/27/95............. 30,868,577
47,000 5.83%, 2/3/95.............. 46,748,824
31,000 5.88%, 2/21/95............. 30,741,770
Smith Barney, Inc.
14,000 5.76%, 1/18/95............. 13,961,920
7,000 5.80%, 1/25/95............. 6,972,933
27,000 5.78%, 1/26/95............. 26,891,625
SRD Finance, Inc.
3,100 6.10%, 1/12/95............. 3,094,222
WCP Funding, Inc.
10,000 6.28%, 3/6/95.............. 9,888,356
Westpac Capital Corp.
(Delaware)
5,000 5.50%, 1/17/95............. 4,987,778
21,000 6.28%, 3/7/95.............. 20,761,883
Whirlpool Financial Corp.
5,000 5.66%, 2/2/95.............. 4,974,844
14,000 5.60%, 2/6/95.............. 13,921,600
5,000 5.60%, 2/9/95.............. 4,969,667
WMX Technologies, Inc.
10,430 5.20%, 5/1/95.............. 10,249,213
4,275 5.20%, 5/12/95............. 4,194,108
--------------
Total Commercial Paper--
Domestic
(amortized cost
$1,256,481,957).......... 1,218,966,633
--------------
COMMERCIAL PAPER--FOREIGN--3.0%
American Honda Finance
Corp.
$ 8,000 5.98%, 1/31/95............. $ 7,960,133
5,900 6.00%, 1/31/95............. 5,870,500
Hanson Finance (U.K.) PLC.
5,000 5.47%, 1/17/95............. 4,987,844
8,000 6.28%, 3/1/95.............. 7,917,663
12,000 6.26%, 3/3/95.............. 11,872,713
14,000 6.27%, 3/7/95.............. 13,841,508
29,000 6.27%, 3/9/95.............. 28,661,594
--------------
Total Commercial Pa-
per--Foreign
(amortized cost
$43,596,631)............. 81,111,955
--------------
DEPOSIT NOTES--0.5%
Society National Bank of
Cleveland
13,000 3.55%, 1/20/95
(amortized cost
$12,998,911)............. 12,998,911
--------------
MEDIUM--TERM OBLIGATIONS--0.2%
Corestates Capital
Corporation Mtn Bank Ent
5,000 6.02%, 1/30/95
(amortized cost
$4,998,496).............. 4,998,496
--------------
VARIABLE RATE INSTRUMENTS(D)--17.4%
American Express Centurion
Bank
11,000 6.0625%, 1/5/95............ 10,999,350
7,000 6.125%, 1/19/95............ 6,999,511
12,000 6.125%, 1/19/95............ 11,999,245
6,000 5.9375%, 1/30/95........... 5,999,556
Avco Financial Services,
Inc.
18,000 6.19232%, 1/13/95.......... 18,000,000
</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>
VARIABLE RATE INSTRUMENTS(D)--(cont'd)
Beneficial Corp.
$ 11,000 6.14253%, 1/19/95.......... $ 10,995,892
20,000 5.69%, 3/7/95.............. 20,000,000
Goldman, Sachs & Co.
129,000 5.375%, 1/30/95............ 129,000,000
International Lease Finance
Corp.
5,000 4.50%, 3/1/95.............. 4,993,248
Lehman Brothers Holdings,
Inc.
70,000 6.1844%, 1/23/95........... 70,000,000
Merrill Lynch & Co., Inc.
33,500 6.0725%, 1/3/95............ 33,495,094
24,000 6.0725%, 1/23/95........... 23,996,614
Money Market Auto Loan
Trust
34,000 6.335%, 1/17/95............ 34,000,000
Money Market Credit Card
Trust
19,309 6.22%, 1/10/95............. 19,298,030
Morgan Stanley Group, Inc.
18,000 5.75%, 1/17/95............. 18,000,000
33,000 5.9375%, 2/15/95........... 33,000,000
11,000 6.475%, 3/15/95............ 11,000,000
--------------
Total Variable Rate Instru-
ments
(amortized cost
$461,776,540)............ 461,776,540
--------------
Total Investments--100.1%
(amortized cost
$2,661,562,188).......... 2,661,562,188
Liabilities in excess of
other
assets--(0.1%)........... (1,675,994)
--------------
Net Assets--100%........... $2,659,886,194
--------------
--------------
</TABLE>
- ---------------
(D) The maturity date presented for these instruments is the later of the next
date on which the security can be redeemed at par or the next date on which
the rate of interest is adjusted.
-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, 1994
-----------------
<S> <C>
Investments, at value................................................................. $ 2,661,562,188
Receivable for Fund shares sold....................................................... 61,794,517
Interest receivable................................................................... 13,547,366
Prepaid expenses...................................................................... 45,047
-----------------
Total assets........................................................................ 2,736,949,118
-----------------
Liabilities
Bank overdraft........................................................................ 405,477
Payable for Fund shares repurchased................................................... 75,209,363
Due to Manager........................................................................ 946,271
Accrued expenses...................................................................... 338,434
Due to Distributor.................................................................... 163,379
-----------------
Total liabilities................................................................... 77,062,924
-----------------
Net Assets
Applicable to 2,659,886,194 shares of beneficial interest ($ .01 par value) issued and
outstanding; unlimited number of shares authorized.................................. $ 2,659,886,194
-----------------
-----------------
Net asset value, offering price and redemption price per share ($2,659,886,194 /
2,659,886,194 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 1994
-----------
<S> <C>
Income
Interest.............................. $68,471,703
-----------
Expenses
Management fee........................ 5,372,700
Distribution fee...................... 1,693,772
Transfer agent's fees................. 642,000
Custodian's fees and expenses......... 124,000
Registration fees..................... 53,000
Reports to shareholders............... 50,000
Insurance expense..................... 41,000
Directors fees........................ 32,000
Audit fee............................. 21,000
Legal fees............................ 5,000
Miscellaneous......................... 909
-----------
Total expenses...................... 8,035,381
-----------
Net investment income................... 60,436,322
-----------
Realized gain on Investments
Net realized gain on investment
transactions.......................... 2,830
-----------
Net Increase in Net Assets
Resulting from Operations............... $60,439,152
-----------
-----------
</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 1994 1994
--------------- ----------------
<S> <C> <C>
Operations
Net investment
income.............. $ 60,436,322 $ 74,952,241
Net realized gain on
investment
transactions...... 2,830 336,119
--------------- ----------------
Net increase in net
assets resulting
from operations... 60,439,152 75,288,360
--------------- ----------------
Dividends and
distributions to
shareholders........ (60,439,152) (75,288,360)
--------------- ----------------
Fund share
transactions (at $1
per share)
Net proceeds from
shares
subscribed........ 6,751,750,345 12,302,814,436
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions..... 60,439,152 75,288,360
Cost of shares
reacquired........ (6,600,503,934) (12,366,574,033)
--------------- ----------------
Net increase in net
assets from Fund
share
transactions...... 211,685,563 11,528,763
--------------- ----------------
Total increase........ 211,685,563 11,528,763
Net Assets
Beginning of period... 2,448,200,631 2,436,671,868
--------------- ----------------
End of period......... $ 2,659,886,194 $ 2,448,200,631
--------------- ----------------
--------------- ----------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
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,
- --------------------------------------------------------------
1994 1994 1993 1992
1991 1990
------------ ---------- ---------- ----------
- ---------- ----------
<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...................................... 0.022 0.029 0.030 0.046
0.069 0.081
Dividends and distributions to
shareholders............................... (0.022) (0.029) (0.030) (0.046)
(0.069) (0.081)
------------ ---------- ---------- ----------
- ---------- ----------
Net asset value, end of period............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $
1.000 $ 1.000
------------ ---------- ---------- ----------
- ---------- ----------
------------ ---------- ---------- ----------
- ---------- ----------
TOTAL RETURN#:............................... 2.26% 2.98% 3.01% 4.71%
7.17% 8.42%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).............. $ 2,659,886 $2,448,201 $2,436,672 $2,125,430
$2,417,429 $2,668,970
Average net assets (000)..................... $ 2,687,944 $2,570,195 $2,275,532 $2,377,108
$2,605,472 $2,680,212
Ratios to average net assets:
Expenses, including distribution fees...... .59%* .59% .61% .64%
.61% .59%
Expenses, excluding distribution fees...... .47%* .47% .48% .51%
.49% .46%
Net investment income...................... 4.46%* 2.92% 2.90% 4.57%
6.95% 8.08%
</TABLE>
- ---------------
* Annualized.
# 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
periods of 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, 1994 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
U.S. Government Agencies--51.4%
Federal Agricultural
Mortgage Corporation,
$ 3,400 5.32%, 1/3/95.............. $ 3,398,995
--------------
Federal Farm Credit Bank,
245 5.92%, 1/17/95............. 244,355
2,075 8.30%, 1/20/95............. 2,077,700
2,955 5.65%, 1/24/95............. 2,944,333
7,400 5.62%, 2/23/95............. 7,395,763
1,700 3.83%, 3/1/95.............. 1,698,162
3,000 5.27%, 3/22/95............. 2,964,867
1,550 5.35%, 3/24/95............. 1,531,111
3,300 5.85%, 5/1/95.............. 3,300,000
7,500 5.375%, 8/1/95............. 7,494,217
5,100 6.56%, 11/14/95............ 5,093,720
--------------
34,744,228
--------------
Federal Home Loan Bank,
930 5.90%, 1/3/95.............. 929,695
500 5.90%, 1/4/95.............. 499,754
6,800 5.32%, 1/12/95............. 6,788,946
250 5.90%, 1/17/95............. 249,345
2,700 8.40%, 1/25/95............. 2,708,342
5,000 6.02%, 3/8/95.............. 4,989,934
4,900 5.625%, 8/23/95............ 4,898,429
--------------
21,064,445
--------------
Federal Home Loan Mortgage
Corporation,
1,210 5.30%, 1/5/95.............. 1,209,287
15,000 5.86%, 1/6/95.............. 14,987,792
5,000 5.64%, 1/23/95............. 4,982,767
287 5.95%, 1/23/95............. 285,956
5,000 5.55%, 2/2/95.............. 4,975,333
6,000 5.54%, 2/3/95.............. 5,969,530
5,000 6.13%, 3/10/95............. 4,942,106
--------------
37,352,771
--------------
Federal National Mortgage
Association,
$ 10,000 5.90%, 1/6/95.............. $ 9,991,806
100 5.95%, 1/6/95.............. 99,917
485 5.90%, 1/10/95............. 484,285
700 9.00%, 1/10/95............. 700,501
1,000 5.90%, 1/20/95............. 996,886
2,525 5.17%, 1/25/95............. 2,516,297
1,370 5.93%, 2/3/95.............. 1,362,553
5,300 11.50%, 2/10/95............ 5,333,869
4,300 5.105%, 3/9/95............. 4,259,146
3,000 5.22%, 3/20/95............. 2,966,070
5,000 5.60%, 4/18/95............. 4,916,778
11,000 5.70%, 6/1/95.............. 10,998,074
5,000 5.09%, 6/16/95............. 4,882,647
4,000 5.53%, 8/25/95............. 4,000,000
5,000 5.975%, 10/30/95........... 4,996,902
--------------
58,505,731
--------------
Student Loan Marketing
Association,
8,250 6.32%, 3/27/95............. 8,260,094
2,335 8.55%, 2/1/95.............. 2,338,669
4,000 5.94%, 4/16/95............. 4,000,000
8,000 6.02%, 6/2/95.............. 8,008,087
10,000 6.07%, 8/7/95.............. 10,017,658
--------------
32,624,508
--------------
Total U.S. Government
Agencies
(amortized cost
$187,690,678)............ 187,690,678
--------------
</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*--45.6%
Joint Repurchase Agreement
Account
$ 945 5.82%, 1/3/95, (Note 4).... $ 945,000
35,000 Bear, Stearns & Co., 6.50%,
dated 12/27/94, due
1/3/95 in the amount of
$35,041,514 (cost
$35,000,000)
value of collateral
including accrued
interest-$35,930,820..... 35,000,000
1,617 CS First Boston Corp.,
5.90%, dated 12/29/94,
due 1/5/95 in the amount
of $1,618,855 (cost
$1,617,000)
value of collateral
including accrued
interest-$1,649,677...... 1,617,000
7,000 Lehman, Inc., 5.55%, dated
10/6/94, due 1/6/95 in
the amount of $7,099,283
(cost $7,000,000)
value of collateral
including accrued
interest-$7,139,185...... 7,000,000
11,854 Lehman, Inc., 5.50%, dated
11/3/94, due 1/3/95 in
the amount of $11,964,473
(cost $11,854,000)
value of collateral
including accrued
interest-$12,090,152..... 11,854,000
3,126 Lehman, Inc., 5.87%, dated
12/30/94, due 1/4/95 in
the amount of $3,128,549
(cost $3,126,000)
value of collateral
including accrued
interest-$3,191,227...... 3,126,000
$ 36,172 Morgan Stanley & Co.,
6.125%, dated 12/28/94,
due 1/4/95 in the amount
of $36,215,080 (cost
$36,172,000)
value of collateral
including accrued
interest-$36,958,023..... $ 36,172,000
35,500 Nomura Securities
International, Inc.,
6.10%, dated 12/27/94,
due 1/3/95 in the amount
of $35,542,107 (cost
$35,500,000)
value of collateral
including accrued
interest-$36,212,601..... 35,500,000
6,408 Smith Barney, Inc., 6.10%,
dated 12/13/94, due
1/12/95 in the amount of
$6,440,574 (cost
$6,408,000)
value of collateral
including accrued
interest-$6,536,161...... 6,408,000
29,000 Smith Barney, Inc., 6.10%,
dated 12/27/94, due
1/3/95 in the amount of
$29,034,397 (cost
$29,000,000)
value of collateral
including accrued
interest-$29,580,000..... 29,000,000
--------------
Total Repurchase Agreements
(amortized cost
$166,622,000)............ 166,622,000
--------------
Total Investments--97.0%
(amortized cost
$354,312,678)............ 354,312,678
Other assets in excess of
liabilities--3.0%........ 11,066,473
--------------
Net Assets--100%........... $ 365,379,151
--------------
--------------
</TABLE>
- ---------------
* 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, 1994
-----------------
<S> <C>
Investments, at value................................................................. $ 354,312,678
Cash.................................................................................. 930,902
Receivable for Fund shares sold....................................................... 19,482,764
Interest receivable................................................................... 1,582,968
Prepaid expenses...................................................................... 4,489
-----------------
Total assets........................................................................ 376,313,801
-----------------
Liabilities
Payable for investments purchased..................................................... 945,000
Payable for Fund shares repurchased................................................... 9,726,609
Accrued expenses...................................................................... 122,252
Due to Manager........................................................................ 119,755
Due to Distributor.................................................................... 21,034
-----------------
Total liabilities................................................................... 10,934,650
-----------------
Net Assets
Applicable to 365,379,151 shares of beneficial interest ($.01 par value) issued and
outstanding; unlimited number of shares authorized.................................. $ 365,379,151
-----------------
-----------------
Net asset value, offering price and redemption price per share ($365,379,151 /
365,379,151 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 1994
----------
<S> <C>
Income
Interest............................... $8,092,873
----------
Expenses
Management fee......................... 667,554
Distribution fee....................... 208,611
Custodian's fees and expenses.......... 60,000
Transfer agent's fees.................. 40,000
Registration fees...................... 36,000
Reports to shareholders................ 34,000
Trustees fees.......................... 24,000
Audit fee.............................. 18,000
Legal fees............................. 10,000
Insurance expense...................... 5,800
Miscellaneous.......................... 3,615
----------
Total expenses....................... 1,107,580
----------
Net investment income.................... 6,985,293
----------
Realized gain on Investments
Net realized gain on investment
transactions........................... 37,161
----------
Net Increase in Net Assets
Resulting from Operations................ $7,022,454
----------
----------
</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 1994 1994
------------- ---------------
<S> <C> <C>
Operations
Net investment
income................. $ 6,985,293 $ 10,496,097
Net realized gain on
investment
transactions......... 37,161 49,860
------------- ---------------
Net increase in net
assets resulting from
operations........... 7,022,454 10,545,957
------------- ---------------
Dividends and
distributions to
shareholders........... (7,022,454) (10,545,957)
------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares subscribed.... 857,986,171 1,493,531,341
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 7,022,454 10,545,957
Cost of shares
reacquired............. (824,886,332) (1,560,523,700)
------------- ---------------
Net increase (decrease)
in net assets from
Fund share
transactions......... 40,122,293 (56,446,402)
------------- ---------------
Total increase (decrease) 40,122,293 (56,446,402)
Net Assets
Beginning of period...... 325,256,858 381,703,260
------------- ---------------
End of period............ $ 365,379,151 $ 325,256,858
------------- ---------------
------------- ---------------
</TABLE>
See Notes to Financial Statements appearing on page 26.
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,
- ----------------------------------------------------
1994 1994 1993 1992
1991 1990
------------ -------- -------- --------
- -------- --------
<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......... 0.021 0.028 0.028 0.045
0.067 0.079
Dividends and distributions to shareholders.......... (0.021) (0.028) (0.028) (0.045)
(0.067) (0.079)
------------ -------- -------- --------
- -------- --------
Net asset value, end of period....................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $
1.000 $ 1.000
------------ -------- -------- --------
- -------- --------
------------ -------- -------- --------
- -------- --------
TOTAL RETURN#........................................ 2.14% 2.86% 2.85% 4.56%
6.90% 8.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...................... $365,379 $325,257 $381,703 $372,988
$414,978 $270,140
Average net assets (000)............................. $331,057 $376,159 $380,103 $422,639
$398,971 $243,593
Ratios to average net assets:
Expenses, including distribution fees.............. .66%* .63% .65% .69%
.65% .66%
Expenses, excluding distribution fees.............. .54%* .51% .53% .57%
.53% .53%
Net investment income.............................. 4.21%* 2.79% 2.74% 4.38%
6.54% 7.70%
</TABLE>
- ---------------
* Annualized
# 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 26.
-16-
<PAGE>
COMMAND TAX-FREE FUND Portfolio of Investments
December 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
ALASKA--1.0%
Valdez Alaska
MarionTerm. Rev.
Arco Trans. Proj.,
T.E.C.P.
A1* $ 7,000 3.65%, 1/17/95, Ser.
94A................ $ 7,000,000
------------
CALIFORNIA--8.9%
California Higher Ed.
Ln. Auth. Inc.,
A.N.N.M.T.,
VMIG1 21,400 3.60%, 5/1/95, Ser.
92A................ 21,400,000
VMIG1 13,250 3.90%, 7/1/95, Ser.
87A................ 13,250,000
State of California
F.R.W.D.S.
VMIG1 7,600 5.78%, 1/5/95, Ser.
94A................ 7,600,000
Fltg Trust Cert.
F.R.W.D.S.,
SP1* 12,189 5.73%, 1/5/95, Ser.
94C-10............. 12,188,911
Student Ed. Ln. Mktg.
Corp.
A.N.M.M.T. Series
93A
VMIG1 10,800 4.40%, 11/1/95....... 10,800,000
------------
65,238,911
------------
COLORADO--3.2%
Avon Cnty. Ind. Dev.
Rev.,
Beaver Creek Proj.,
F.R.M.D.,
P-1 9,000 4.375%, 1/16/95, Ser.
84................. 9,000,000
Colorado Hsg. Fin.
Auth.,
Eagle Tax-Exempt
Trust, 94C
F.R.W.D.S.,
A1* 14,365 5.73%, 1/5/95, Ser.
0601............... 14,365,000
------------
23,365,000
------------
CONNECTICUT--2.3%
Connecticut St. Hsg.
Fin.
Auth., A.N.N.M.T.,
VMIG1 17,000 4.40%, 11/15/95, Ser.
94E-1.............. 16,958,537
------------
FLORIDA--3.0%
Hillsborough Cnty.
Sch. Dist.,
G.O., F.R.W.D.S.,
A1* $ 15,000 5.70%, 1/4/95, Ser.
94................. $ 15,000,000
Miami Hlth. Facs.
Auth. Rev.,
Jewish Home & Hosp.
F.R.W.D.,
CPS1 7,000 5.65%, 1/4/95, Ser.
92................. 7,000,000
------------
22,000,000
------------
GEORGIA--2.5%
Fulco Hosp. Auth.,
St. Joseph Hosp.,
T.E.C.P.,
VMIG1 6,200 3.90%, 1/11/95, Ser.
89................. 6,200,000
Fulton Cnty. Dev.
Auth. Rev.,
Robert W. Woodruff
Art Center,
F.R.W.D.,
CPS1 11,800 5.70%, 1/5/95, Ser.
93................. 11,800,000
------------
18,000,000
------------
IDAHO--1.4%
Idaho St., T.A.N.,
MIG1 10,000 4.50%, 6/29/95, Ser.
94................. 10,032,110
------------
ILLINOIS--15.6%
Hazel Crest Village
Rev.,
Waterford Estates
Proj., F.R.W.D.,
VMIG1 7,500 5.65%, 1/6/95, Ser.
92A................ 7,500,000
Illinois Dev. Fin.
Auth. Poll.,
Refunding
Commonwealth Edison
Co. Project B,
F.R.W.D.,
P-1 6,000 5.60%, 1/4/95, Ser.
94B................ 6,000,000
</TABLE>
-17-
See Notes to Financial Statements appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
ILLINOIS--(cont'd)
Illinois Dev. Fin.
Auth. Rev.,
Palos Comm. Hosp.,
F.R.W.D.,
VMIG1 $ 7,000 5.35%, 1/5/95, Ser.
94................. $ 7,000,100
Illinois Dev. Fin.
Auth.,
Multifamily Hsg.
Project Rev.,
F.R.W.D.,
A1* 15,000 5.65%, 1/6/95, Ser.
92................. 15,000,000
Illinois Hlth. Facs.
Auth. Rev.,
Childrens Mem.
Hosp., S.E.M.M.T.,
VMIG1 15,000 3.80%, 3/1/95, Ser.
90A................ 15,000,000
Illinois St. G.O.,
MIG1 13,000 4.75%, 4/17/95, Ser.
94................. 13,019,630
Illinois St. Toll
Hwy. Auth. Rev.,
F.R.W.D.,
VMIG1 2,500 5.75%, 1/4/95, Ser.
93B................ 2,500,000
Joliet Illinois
Regional Port
District,
Exxon Corp. Project
T.E.C.P.,
CPS1 19,300 3.55%, 1/23/95, Ser.
89................. 19,300,000
Village of Vernon
Hills, Multifamily
Various Refunding
Hsg. Hawthorn Lakes
Proj. F.R.W.D.,
A1* 10,210 5.65%, 1/6/95, Ser.
1991............... 10,210,000
Wheeling Multifamily
Hsg. Rev.,
Woodland Creek II,
F.R.W.D.,
SP1+* 8,000 5.55%, 1/6/95, Ser.
90................. 8,000,000
Woodridge Dupage
Cntys.,
Multifamily Hsg.
Rev. Rfdg.,
Hinsdale Terr.
Apts., F.R.W.D.,
A1+* $ 10,760 5.65%, 1/6/95, Ser.
90................. $ 10,760,000
------------
114,289,730
------------
INDIANA--1.6%
Indiana Ed. Fac.
Auth.,
Wesleyan Univ.
Proj., F.R.W.D.,
NR 10,000 5.55%, 1/5/95, Ser.
93................. 10,000,000
Indianapolis Econ.
Dev.,
MMM-Invest, Inc.
Proj., F.R.W.D.,
NR 1,965 5.55%, 1/5/95........ 1,965,000
------------
11,965,000
------------
IOWA--1.2%
Des Moines Private
Coll. Rev.,
Osteopathic Med. &
Hlth., F.R.M.D.,
A1* 9,005 4.50%, 1/16/95, Ser.
85................. 9,005,000
------------
LOUISIANA--0.9%
Louisiana Pub. Facs.
Auth.,
Hosp. Equip. Rev.,
F.R.W.D.,
VMIG1 6,900 5.70%, 1/4/95, Ser.
85A................ 6,900,000
------------
MAINE--1.1%
Biddeford Res. Rec.
Rev.,
Energy Recovery Co.
Proj., F.R.M.D.,
VMIG1 7,800 3.70%, 1/3/95, Ser.
85................. 7,800,000
------------
</TABLE>
-18-
See Notes to Financial Statements appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
MARYLAND--1.4%
Maryland St. Ind.
Dev. Fin. Auth.,
Baltimore Int'l.
Culinary, F.R.W.D.,
A1* $ 10,075 5.60%, 1/4/95, Ser
94................. $ 10,075,000
------------
MASSACHUSETTS--4.5%
Massachusetts Hsg.
Fin. Agcy.,
Sngl. Fam. Hsg.
Rev., Q.T.R.O.T.3,
AAA* 10,700 3.95%, 3/1/95, Ser.
5.................. 10,700,000
Revere Hsg. Auth.,
Multifamily Mtge.
Rev. Waters Edge
Proj., F.R.W.D.,
A1* 22,000 5.65%, 1/6/95, Ser.
91C................ 22,000,000
------------
32,700,000
------------
MICHIGAN--5.4%
Michigan Municipal
Bond Auth. Rev.,
SP-1+* 25,800 4.75%, 7/20/95, Ser.
94B................ 25,901,924
Michigan Municipal
Bond Auth. Rev.,
R.A.N.,
SP-1+* 14,000 4.25%, 5/5/95, Ser.
94A................ 14,024,431
------------
39,926,355
------------
MINNESOTA--5.2%
City of Fridley Comm.
Dev.
Rev., River Rd.
Invsmt.
Proj., F.R.M.D.,
A1* 4,130 3.85%, 1/3/95, Ser.
84................. 4,130,000
Minnesota St. G.O.,
Trust,
F.R.W.D.,
NR 17,335 5.85%, 1/5/95, Ser.
6.................. 17,334,950
Minnetonka
Multifamily Hsg.
Rev.,
Cliffs Ridgedale
Proj., F.R.W.D.,
A1* $ 7,000 5.55%, 1/6/95, Ser.
85A................ $ 7,000,000
St. Louis Park Hlth.
Care
Minnesota Oblig.
Group, F.R.W.D.S.,
NR 10,000 5.65%, 1/6/95, Ser.
93................. 10,000,000
------------
38,464,950
------------
MISSISSIPPI--1.1%
Harrison Cnty. Poll.
Ctrl. Rev.,
Mississippi Pwr.
Co. Proj., F.R.W.D.
A1* 8,000 5.65%, 1/4/95, Ser.
92................. 8,000,000
------------
MISSOURI--2.5%
Missouri St. Econ.
Dev. Export &
Infrastructure
Board,
MIG1 10,000 3.95%, 8/1/95, Ser.
94C................ 10,000,000
St. Charles Cnty.
Ind. Dev. Auth.,
F.R.W.D.,
Cedar Ridge Apts.,
A1* 8,405 5.55%, 1/4/95, Ser.
88A................ 8,405,000
------------
18,405,000
------------
NEW HAMPSHIRE--0.1%
New Hampshire Bus.
Fin.
Auth., Poll. Cntrl.
Rev.,
T.E.C.P.,
VMIG1 1,000 3.70%, 1/6/95, Ser.
90B................ 1,000,000
------------
</TABLE>
-19-
See Notes to Financial Statements appearing on page 26.
<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--3.8%
Jersey City B.A.N.,
NR $ 27,500 4.75%, 9/29/95, Ser.
94................. $ 27,569,276
------------
NEW YORK--1.1%
New York St. G.O.,
T.E.C.P.,
P-1 8,000 3.85%, 2/16/95, Ser.
P.................. 8,000,000
------------
NORTH CAROLINA--0.7%
Cabarrus Cnty. Ind.
Facs. Auth.,
Poll. Ctrl. Rev.
Philip Morris
Proj., F.R.W.D.,
NR 5,000 3.50%, 1/4/95, Ser.
92................. 5,000,000
------------
OHIO--2.1%
Cnty. Hosp. Impvt.
Rev.,
A1+* 7,280 4.00%, 4/1/95, Ser.
92, S.E.M.O.T.,.... 7,280,000
Toledo-Lucas Cnty.,
Convntn. & Visitors
Bureau, M.T.H.O.T.,
VMIG1 8,375 3.90%, 1/1/95, Ser.
88................. 8,375,000
------------
15,655,000
------------
OKLAHOMA--1.8%
Muskogee Mall Proj.,
F.R.W.D,
VMIG1 6,000 5.70%, 1/4/95, Ser.
85................. 6,000,000
Oklahoma Sch. Dist.
Cash Mgmt.,
NR 7,025 5.30%, 6/30/95, Ser.
94................. 7,058,373
------------
13,058,373
------------
OREGON--1.5%
Klamath Falls Elec.
Rev.,
Salt Caves
Hydroelectric
Proj., A.N.N.M.T.,
SP-1+* 11,200 3.75%, 5/2/95, Ser.
86C................ 11,200,000
------------
PENNSYLVANIA--4.9%
Emmaus Gen. Auth.
Rev.,
Local Gov't. Bond
Pool Prog.,
F.R.W.D.,
A1* $ 8,000 5.70%, 1/4/95, Ser.
89C5............... $ 8,000,000
A1* 7,300 5.70%, 1/4/95, Ser.
B6................. 7,300,000
Pennsylvania St.
University,
MIG1 8,000 4.00%, 5/4/95, Ser.
94................. 8,013,003
Philadelphia T.A.N.,
Ser. E
MIG1 5,000 4.75%, 6/15/95....... 5,014,772
Philadelphia
T.R.A.N.,
MIG1 8,000 4.75%, 6/15/95, Ser.
94, 5B............. 8,029,632
------------
36,357,407
------------
SOUTH CAROLINA--3.0%
Piedmont Mun. Pwr.
Agcy. Rev.,
Prerefunded,
AAA* 7,500 11.00%, 1/1/95....... 7,725,620
York Cnty. Poll.
Ctrl. Rev.,
No. Carolina Elec.
Proj., S.E.M.O.T.,
A1+* 14,000 3.75%, 3/15/95, Ser.
84N-4. >14,000,000
------------
21,725,620
------------
SOUTH DAKOTA--3.0%
Rapid City, B.A.N.,
NR 6,275 5.20%, 3/9/95, Ser.
94................. 6,275,000
</TABLE>
-20-
See Notes to Financial Statements appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
SOUTH DAKOTA--(cont'd)
South Dakota School
Dist. C.O.P.,
SP1+* $ 15,755 4.50%, 8/1/95, Ser.
94................. $ 15,807,586
------------
22,082,586
------------
TENNESSEE--1.2%
Nashville & Davidson
Cnty.,
Timberlake Proj.
Dev. Rev.,
F.R.W.D.,
VMIG2 8,995 5.65%, 1/6/95, Ser.
89................. 8,995,000
------------
TEXAS--5.5%
DeSoto Ind. Dev.
Auth.,
Nat'l. Svc. Inds.
Inc. Proj.,
F.R.W.D.,
CPS1 7,150 5.70%, 1/5/95, Ser.
91................. 7,150,000
Greater East Texas,
Higher Ed. Auth.,
Student Ln. Rev.,
F.R.W.D.,
VMIG1 16,000 5.45%, 1/5/95, Ser.
92A................ 16,000,000
San Antonio Elec. &
Gas Rev., T.E.C.P.,
P-1 9,000 3.55%, 1/18/95, Ser.
A.................. 9,000,000
P-1 8,400 3.65%, 3/6/95, Ser.
A.................. 8,400,000
------------
40,550,000
------------
VIRGINIA--5.0%
Chesterfield Cnty.
Ind. Dev. Auth.,
Phillip Morris
Proj., F.R.W.D.,
P-1 $ 8,500 5.65%, 1/4/95........ $ 8,500,000
Harrisonburg Redev. &
Hsg. Auth.,
Multifamily Hsg.
Rev., F.R.W.D.,
VMIG1 6,800 5.50%, 1/5/95, Ser.
91A................ 6,800,000
Virginia Elec. Pwr.
Co. Proj.,
T.E.C.P.,
VMIG1 18,650 5.05%, 1/6/95, Ser.
87A................ 18,650,000
York Cnty. Ind. Dev.
Auth.,
Elec. & Pwr. Co.,
Ser. A, T.E.C.P.,
VMIG1 3,000 5.15%, 1/5/95........ 3,000,000
------------
36,950,000
------------
WASHINGTON--1.7%
Washington St. Pub.
Pwr. Supply,
FB Trust,
F.R.W.D.S.,
NR 12,631 5.85%, 1/5/95, Ser.
5.................. 12,631,332
------------
</TABLE>
-21-
See Notes to Financial Statements appearing on page 26.
<PAGE>
COMMAND TAX-FREE FUND
<TABLE>
<CAPTION>
Value
(Note 1)
<C> <C> <S> <C>
Total Investments--98.2%
(amortized cost
$720,900,187)...... $720,900,187
Other assets in
excess of
liabilities--1.8%... 13,538,050
------------
Net Assets--100%..... $734,438,237
------------
------------
</TABLE>
- ---------------
(a) The following abbreviations are used in portfolio descriptions:
A.N.N.M.T.--Annual Mandatory Tender
B.A.N.--Bond Anticipation Note
C.O.P.--Certificate of Participation
F.R.M.D.--Floating Rate (Monthly) Demand Note**
F.R.W.D.S.--Floating Rate Weekly Demand--Synthetic
G.O.--General Obligation
M.T.H.O.T.--Monthly Optional Tender
Q.T.R.O.T.3--Quarterly Third Party Optional Tender
R.A.N.--Revenue Antiicpation Note
S.E.M.M.T.--Semi-Annual Mandatory Tender
S.E.M.O.T.--Semi-Annual 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.
(D) Prerefunded issues are secured by escrowed cash and/or direct U.S.
guarantee obligations.
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.
-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, 1994
-----------------
<S> <C>
Investments, at value................................................................. $ 720,900,187
Receivable for Fund shares sold....................................................... 29,322,550
Receivable for investments sold....................................................... 19,597,913
Interest receivable................................................................... 7,874,184
Prepaid expenses...................................................................... 13,398
-----------------
Total assets........................................................................ 777,708,232
-----------------
Liabilities
Bank overdraft........................................................................ 1,390,912
Payable for Fund shares repurchased................................................... 28,141,250
Payable for investments purchased..................................................... 13,240,901
Due to Manager........................................................................ 334,548
Accrued expenses...................................................................... 112,735
Due to Distributor.................................................................... 49,649
-----------------
Total liabilities................................................................... 43,269,995
-----------------
Net Assets
Applicable to 734,438,237 shares of beneficial interest ($.01 par value) issued and
outstanding; unlimited number of shares authorized.................................. $ 734,438,237
-----------------
-----------------
Net asset value, offering price and redemption price per share ($734,438,237 /
734,438,237 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 1994
-----------
<S> <C>
Income
Interest.............................. $14,905,065
-----------
Expenses
Management fee........................ 2,079,445
Distribution fee...................... 556,000
Custodian's fees and expenses......... 129,000
Transfer agent's fees................. 96,000
Directors' fees....................... 28,000
Reports to shareholders............... 28,000
Registration fees..................... 22,000
Audit fee............................. 21,000
Insurance expense..................... 15,000
Legal fees............................ 10,000
Miscellaneous......................... 3,947
-----------
Total expenses...................... 2,988,392
-----------
Net investment income................... 11,916,673
-----------
Realized gain on Investments
Net realized gain on investment
transactions.......................... 45
Net Increase in Net Assets
Resulting from Operations............... $11,916,718
-----------
-----------
</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 1994 1994
--------------- ---------------
<S> <C> <C>
Operations
Net investment
income............... $ 11,916,673 $ 17,833,245
Net realized gain on
investment
transactions....... 45 243
--------------- ---------------
Net increase in net
assets resulting
from operations.... 11,916,718 17,833,488
--------------- ---------------
Dividends and
distributions to
shareholders......... (11,916,718) (17,833,488)
--------------- ---------------
Fund share transactions
(at $1 per share)
Net proceeds from
shares
subscribed......... 1,949,748,674 3,949,124,328
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions...... 11,916,718 17,833,488
Cost of shares
reacquired........... (2,074,828,898) (3,973,285,613)
--------------- ---------------
Net decrease in net
assets from Fund
share
transactions....... (113,163,506) (6,327,797)
--------------- ---------------
Total decrease......... (113,163,506) (6,327,797)
Net Assets
Beginning of period.... 847,601,743 853,929,540
--------------- ---------------
End of period.......... $ 734,438,237 $ 847,601,743
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements See Notes to Financial Statements
appearing on page 26. appearing on page 26.
-24-
<PAGE>
COMMAND TAX-FREE FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended June 30,
December 31,
- ----------------------------------------------------
1994 1994 1993 1992
1991 1990
------------ -------- -------- --------
- -------- --------
<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......... 0.014 0.020 0.022 0.035
0.049 0.055
Dividends and distributions to shareholders.......... (0.014) (0.020) (0.022) (0.035)
(0.049) (0.055)
------------ -------- -------- --------
- -------- --------
Net asset value, end of period....................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $
1.000 $ 1.000
------------ -------- -------- --------
- -------- --------
------------ -------- -------- --------
- -------- --------
TOTAL RETURN#........................................ 1.58% 1.98% 2.23% 3.53%
5.02% 5.66%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...................... $734,438 $847,602 $853,930 $729,122
$750,567 $714,650
Average net assets (000)............................. $882,350 $908,421 $823,517 $751,458
$770,745 $699,559
Ratios to average net assets:
Expenses, including distribution fees.............. .67%* .65% .68% .69%
.66% .68%
Expenses, excluding distribution fees.............. .55%* .53% .55% .56%
.54% .55%
Net investment income.............................. 2.68%* 1.96% 2.09% 3.47%
4.88% 5.57%
</TABLE>
- ---------------
* Annualized.
# 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 periods
of 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
(Unaudited)
Command Money Fund, Command Govemment Fund, and Command Tax-Free Fund
(collectively, the Funds ) are each registered under the Investment Company Act
of 1940 as an open-end, diversified management investment company whose shares
are offered exclusively to participants in the Prudential Securities Command
Account Program of Prudential Securities Incorporated ( Prudential Securities ).
The Funds invest in a portfolio of money market instruments maturing in 13
months or less whose ratings are within the two highest ratings categories by a
nationally recognized statistical rating agency or, if not rated, are of
comparable quality. The ability of the issuers of the securities held by the
Funds to meet their obligations may be affected by economic and/or political
developments in a specific industry, state or region.
Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Funds in the preparation of
their financial statements.
Security Valuation: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium. If the amortized cost
method is determined not to represent fair value, the value shall be determined
by or under the direction of the Board of Trustees. All securities are valued as
of 4:30 p.m., New York time.
In connection with transactions in repurchase agreements, it is the Funds
policy that its custodian or designated subcustodians, as the case may be under
triparty repurchase agreements, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. If the seller defaults and the value of
the collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Funds may be
delayed or limited.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The cost of portfolio securities for federal income tax purposes
is substantially the same as for financial reporting purposes.
Federal Income Taxes: Each Fund intends to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income to its shareholders.
Therefore, no federal income tax provision is required.
Dividends: Each Fund declares all of its net investment income as dividends
daily to its shareholders of record at the time of such declaration. Dividends
are reinvested daily into additional full and fractional shares of the
respective Fund at the net asset value per share detemined on the date of
declaration. Net investment income for dividend purposes includes accrued
interest and amortization of premiums and discounts, plus or minus any gains or
losses realized on sales of portfolio securities, and less the estimated
expenses of the Fund applicable to the dividend period.
Note 2. Agreements Each Fund has a manage-
ment agreement with Prudential Mutual Fund
Management, Inc. ( PMF ). Pursuant to this agreement PMF has responsibility for
all investment advisory services and supervises the subadviser s performance of
such services. PMF has entered into a subadvisory agreement with the Prudential
Investment Corporation (PIC); PIC furnishes investment advisory services in
connection with the management of the Funds. PMF pays for the cost of the
subadvisor s services, the compensation of officers of the Funds, occupancy and
certain clerical and bookkeeping costs of the Funds. The Funds bear all other
costs and expenses.
The management fee paid PMF is computed daily and payable monthly on the
following basis:
<TABLE>
<CAPTION>
Average Daily Command Command Command
Net Assets Money Government Tax-Free
- ------------------------------------ ------- ---------- -------
<S> <C> <C> <C>
First $500 million.................. .500% .400% .500%
Second $500 million................. .425% .400% .425%
Third $500 million.................. .375% .375% .375%
Excess of $1.5 billion .350% .375% .375%
</TABLE>
Each Fund has a distribution agreement with Prudential Mutual Fund
Distributors, Inc. ( PMFD ). To reimburse PMFD for its expenses incurred
pursuant to a plan of distribution, the Funds pay PMFD a reimbursement, accrued
daily and payable monthly, at an annual rate of .125 of 1% of each Fund s
average daily net assets. PMFD pays various broker-dealers, including Prudential
Securities and Pruco Securities Corporation, affiliated broker-dealers, for
account servicing fees and other expenses incurred by such brokers-dealers.
-26-
<PAGE>
<PAGE>
PMFD is a wholly-owned subsidiary of PMF; Prudential Securities, PMF and PIC
are (indirect) wholly-owned subsidiaries of The Prudential Insurance Company of
America.
Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. ( PMFS ), a
with Affiliates wholly-owned subsidiary of
PMF, serves as the Funds transfer agent.
During the six month period ended December 31, 1994, the following amounts
were due to PMFS from the Funds:
<TABLE>
<S> <C>
Command Money..................................... $98,609
Command Government................................ $ 5,523
Command Tax-Free.................................. $13,857
</TABLE>
Note 4. Joint The Command Government
Repurchase Fund, along with other affili-
Agreement Account ated registered investment
companies, transfers uninvested 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, 1994, the Command Government Fund had a 0.1%
undivided interest in the joint account. The undivided interest for the Command
Government Fund represents $945,000 in the principal amount. As of such date,
each repurchase agreement in the joint account and the collateral therefore were
as follows:
Goldman, Sachs & Co., 5.75%, in the principal amount of $250,000,000,
repurchase price $250,159,722, due 1/3/95. The value of the collateral including
accrued interest is $255,000,108.
Lehman Government Securities Inc., 5.90%, in the principal amount of
$70,000,000, repurchase price $70,045,889, due 1/3/95. The value of the
collateral including accrued interest is $71,379,084.
Morgan Stanley & Co., 5.75%, in the principal amount of $250,000,000,
repurchase price $250,159,722, due 1/3/95. The value of the collateral including
accrued interest is $255,146,220.
Smith Barney Inc., 5.95%, in the principal amount of $200,000,000, repurchase
price $200,132,222, due 1/3/95. The value of the collateral including accrued
interest is $204,036,161.
-27-
<PAGE>
<PAGE>
Directors
Edward D. Beach
Delayne Dedrick Gold
Harry A. Jacobs, Jr.
Lawrence C. McQuade
Richard A. Redeker
Stanley E. Shirk
Langdon R. Stevenson
Stephen Stoneburn
Nancy H. Teeters
David S. Towner
Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852, Collect (908) 417-7555
The accompanying financial statements, as of December 31, 1994, 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.
