Table of Contents
USAA Family of Funds 1
Message from the President 2
Fund Performance 4
Investment Review:
Long-Term Fund 6
Intermediate-Term Fund 9
Short-Term Fund 12
Tax Exempt Money Market Fund 15
Financial Information:
Distributions to Shareholders 18
Independent Auditors' Report 19
Statements of Assets and Liabilities 20
Portfolios of Investments in Securities:
Long-Term Fund 23
Intermediate-Term Fund 30
Short-Term Fund 40
Tax Exempt Money Market Fund 48
Notes to Portfolios of Investments 64
Statements of Operations 65
Statements of Changes in Net Assets 66
Notes to Financial Statements 68
Important Information:
Through our ongoing efforts to reduce expenses and respond to shareholder
requests, your annual and semiannual report mailings are now "streamlined." One
copy of each report will be sent to each address, instead of our previous
practice of sending one report to every registered owner. For many shareholders
and their families, this eliminates duplicate copies, saving paper and postage
costs to the Funds.
If you are the primary shareholder on at least one account, prefer not to
participate in streamlining, and would like to continue receiving one report
per registered account owner, you may request this in writing to:
USAA Investment Management Company
Attn: Report Mail
9800 Fredericksburg Road
San Antonio, TX 78284-8916
or phone a Mutual Fund Representative at 1-800-531-8448 during business hours.
This report is for the information of the shareholders and others who have
received a copy of the currently effective prospectus of the USAA Tax Exempt
Fund, Inc., managed by USAA Investment Management Company (IMCO). It may be
used as sales literature only when preceded or accompanied by a current
prospectus which gives further details about the funds.
USAA with the eagle is registered in the U.S. Patent & Trademark Office.
(copyright)1995, USAA. All rights reserved.
USAA Family of Funds Performance Summary
If you own only one or two USAA funds, you may not be aware of the performance
of our other funds. This summary is a snapshot of the performance of all 29
funds by investment objective as of March 31, 1995. If you're interested in
more information, please call us at 1-800-531-1087 for a prospectus. Please
read the prospectus carefully before investing.
<TABLE>
<CAPTION>
Average Annual Total Return**
Investment Inception Since 7-Day 30-Day***
Objective Date 1 yr 5 yrs 10 yrs Inception Simple SEC
Capital Appreciation % % % % % %
<S> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth 10/19/81 12.44 9.92 9.01 - - -
Emerging Markets 11/7/94 - - - (12.80) - -
Gold 8/15/84 (4.24) .87 1.51 - - -
Growth 4/5/71 20.03 12.05 11.71 - - -
Growth & Income 6/1/93 12.40 - - 6.96 - -
International 7/11/88 (1.37) 7.67 - 8.47 - -
World Growth 10/1/92 (.78) - - 9.20 - -
Diversified/Balanced
Balanced Portfolio 1/11/89 7.99 8.08 - 8.64 - 4.16
Cornerstone 8/15/84 2.18 7.66 11.59 - - -
Income - Taxable
GNMA 2/1/91 5.45 - - 7.29 - 7.10
Income 3/4/74 5.42 9.18 10.14 - - 7.34
Income Stock 5/4/87 11.41 11.17 - 10.84 - -
Short-Term Bond 6/1/93 3.27 - - 2.88 - 7.68
Income - Tax Exempt
Long-Term 3/19/82 5.07 7.68 9.13 - - 5.96
Intermediate-Term 3/19/82 6.16 7.58 8.22 - - 5.45
Short-Term 3/19/82 4.51 5.41 5.96 - - 4.58
California Bond* 8/1/89 6.89 7.66 - 7.09 - 5.94
Florida Tax-Free Income* 10/1/93 7.01 - - (1.19) - 5.80
New York Bond* 10/15/90 5.42 - - 8.59 - 5.73
Texas Tax-Free Income* 8/1/94 - - - 5.75 - 5.72
Virginia Bond* 10/15/90 6.61 - - 8.30 - 5.83
Money Market
Money Market 2/2/81 4.78 4.87 6.11 - 5.80 -
Tax Exempt Money Market 2/6/84 2.98 3.68 4.48 - 3.70 -
Treasury Money Market Trust 2/1/91 4.45 - - 3.91 5.63 -
California Money Market* 8/1/89 2.94 3.45 - 3.70 3.69 -
Florida Tax-Free Money Market* 10/1/93 2.86 - - 2.54 3.61 -
New York Money Market* 10/15/90 2.76 - - 2.94 3.48 -
Texas Tax-Free Money Market* 8/1/94 - - - 2.09 3.63 -
Virginia Money Market* 10/15/90 2.91 - - 3.15 3.60 -
</TABLE>
* Shares of the state funds are authorized for sale only to residents of the
states listed above.
** Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No adjustment
has been made for taxes payable by shareholders on their reinvested
dividends and capital gain distributions. The performance data quoted
represents past performance and is not an indication of future results.
Investment return and principal value of an investment will fluctuate, and
an investor's shares, when redeemed, may be worth more or less than their
original cost.
An investment in any money market fund is neither insured nor guaranteed by the
U.S. government and there is no assurance that any of the funds will maintain a
stable net asset value of $1 per share.
Some tax-exempt income may be subject to state or local taxes or the
federal alternative minimum tax.
Foreign investing is subject to certain risks, which are discussed in the
funds' prospectuses.
*** Calculated as prescribed by the Securities and Exchange Commission.
Message from the President
[A photo of Michael J.C. Roth, President appears here]
Recently in Houston, I had a fascinating conversation with a USAA member and
shareholder of our funds. This gentleman is an owner of the USAA Income Fund,
but our conversation is applicable, with some modification for returns, to any
of our longer-term fixed-income funds. Around 1990, after diligent research,
he had invested the bulk of his retirement funds into the Income Fund. When I
met him in Houston, he said to me, "The Income Fund had a 10-year record of 12%
compound returns*, so I chose it for my retirement fund." (From 1980 to 1990,
the Income Fund's annual compound return was actually 13.03%.)(1)
This gentleman then pulled out a large graph which he had constructed on
several pieces of graph paper carefully taped together. He had drawn a line
which began at the value of his account in 1990, which then curved upward for
20 years. The upward curve was simply an extrapolation of 12% returns for the
next 20 years. This mathematical exercise, created by the investor, will show
the original value to grow over 9 1/2 times. But, remember, this is a
hypothetical exercise, and as we always tell you, past performance is not a
guarantee of future results.(2) A second line on the graph plotted the actual
value of his account. Through 1993 this actual value stayed close to the
extrapolation, but in 1994 fell below it. He asked me, "How are you experts
going to get me back to the 12% line?"
The first thing I told him was that if he updated his graph at the end of the
first quarter of 1995, he would find that the loss of 1994 had been recouped.
(3) But after that, we had a bit of a problem.
I pointed out to him that the period from the early 1980s until 1993 was an
unusual one in the bond market. Interest rates declined, with a few jiggles,
from all-time highs to notable lows. That meant, in addition to all the income
bonds produced, their market prices kept rising, and investors saw total
returns that rivaled those of stocks.(4, 5)
We had a great conversation. He smiled and said, "I know all that, I just want
to know how you're going to get me back to my line." I told him he could not
dismiss the market so easily. Over time, bonds may return their interest rate,
with perhaps a bit more for premiums received if they get called. Investors may
enjoy a market run like we had in the 1980s and early 1990s, but they must not
deceive themselves.(5)
1994 was a signal that a unique period in the bond market was over. We probably
won't keep on going at 12% a year. But so far, 1995 has sent another signal.
That is - remember! The bond market can fluctuate, but over the years it has
been a good place to invest.(5) Risks have been rewarded.
Sincerely,
Michael J.C. Roth
President and
Vice Chairman of the Board
(1) Average annual 10-year return at December 31, 1990.
(2) This hypothetical exercise does not imply that gain or income realized
in the past will be repeated in the future.
(3) Income Fund: One-year total return as of December 31, 1994: -5.21% Quarter
ending March 31, 1995 total return: 5.56%
(4) Based on price return data provided by Lehman Brothers, 1993 Bond Market
Annual Book.
(5) Source: (copyright)Stocks, Bonds, Bills and Inflation 1995 Yearbook (TM),
Ibbotson Associates, Chicago (Annually updates work by Roger G. Ibbotson
and Rex A. Sinquefield). Used with permission. All rights reserved.
For more complete information about any of the USAA Family of Funds including
charges and expenses, call for a prospectus. Please read it carefully before
investing or sending money.
"The bond market can fluctuate, but over the years it has been a good place to
invest. Risks have been rewarded."
*Income Fund
Average Annual Total Return
as of 3/31/95
1 Year 5.42%
5 Years 9.18%
10 Years 10.14%
Total return equals income yield plus share price
change and assumes reinvestment of all
dividends and capital gains distributions. The
performance data quoted represents past performance
and is not an indication of future results. Investment
return and principal value of an investment will
fluctuate, and an investor's shares, when redeemed,
may be worth more or less than the original cost.
Fund Performance
The graph and table below compare the total return of the three USAA tax-exempt
bond funds for the 10-year period ended March 31, 1995, to the Lehman Brothers
Municipal Bond Index, an unmanaged total return performance benchmark for the
investment grade tax-exempt bond market. This index, like most broad market
indices, is a hypothetical portfolio which, unlike a mutual fund, has no
operating expenses or transaction costs. It assumes all income and capital
gains are reinvested. All tax-exempt bond funds will find it difficult to
outperform such an index, since funds have expenses.
Average Annual Total Return As Of 3/31/95
1 Year 5 Years 10 Years
Long-Term Fund 5.07% 7.68% 9.13%
Intermediate-Term Fund 6.16% 7.58% 8.22%
Short-Term Fund 4.51% 5.41% 5.96%
Lehman Brothers Municipal Bond Index 7.43% 8.24% 9.79%
[A graph is shown here which is a comparison of the change in value of a
$10,000 investment for the period of 3/31/85 to 3/31/95, with dividends and
capital gains reinvested. The vertical axis shows the dollar amount and the
horizontal axis shows the time period. The ending values for the items graphed
are:
Lehman Brothers Municipal Bond Index $25,456
USAA Long-Term Fund 23,959
USAA Intermediate-Term Fund 22,041
USAA Short-Term Fund 17,841]
Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gains distributions. No adjustment
has been made for taxes payable to shareholders on their reinvested dividends
and capital gains distributions. The performance data quoted represents past
performance and is not an indication of future results. Investment return and
principal value of an investment will fluctuate, and an investor's shares, when
redeemed, may be worth more or less than their original cost.
The graph on the preceding page shows how the value of a $10,000 investment on
March 31, 1985, in the Long-Term, Intermediate-Term, and Short-Term Funds
would have grown in value to $23,959, $22,041, and $17,841, respectively, at
March 31, 1995. The same $10,000 investment based on the long-term benchmark of
the Lehman Brothers Municipal Bond Index for the same time period would be
valued at $25,456. This comparison illustrates that the longer the bonds are in
a fund, the higher the potential returns offered to compensate investors for
longer exposure to an uncertain future. In other words, the higher the risk,
the higher the potential reward. While past performance is no guarantee of
future results, the USAA funds generally performed as expected, given their
varying maturities - the longer the difference in maturity, the greater the
return.
The exemption of interest income for federal income tax purposes does not
necessarily result in exemption under the income or other tax laws of any
state or local taxing authority. Shareholders should consult their tax
advisors about the status of distributions from a fund in their own states and
localities. Income may be subject to federal, state, or local taxes or the
alternative minimum tax.
INVESTMENT REVIEW
LONG-TERM FUND
OBJECTIVE: Provide investors with interest income that is exempt from federal
income tax.
TYPES OF INVESTMENTS: Invests primarily in investment grade tax-exempt
securities of varying maturities. The average weighted portfolio maturity is
10 years or more.
3/31/94 3/31/95
Net Assets $1,831.7 Million $1,774.6 Million
Net Asset Value Per Share $13.20 $12.96
Average Annual Total Return as of 3/31/95
1 Year 5.07%
5 Years 7.68%
10 Years 9.13%
30-Day SEC Yield* on March 31, 1995 5.96%
*Calculated as prescribed by the Securities and Exchange Commission
<TABLE>
<CAPTION>
[A graph is shown here comparing the 12-month dividend yield of the USAA
Long-Term Fund and the Lipper General Municipal Debt Funds Average from 3/31/86
to 3/31/95. The vertical axis shows the yield and the horizontal axis shows
the time period. The values are:
3/31/86 3/31/87 3/31/88 3/31/89 3/31/90 3/31/91 3/31/92 3/31/93 3/31/94 3/31/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
USAA Long-
Term Fund 8.36 7.45 7.71 7.57 7.29 7.15 6.78 6.21 6.10 6.01
Lipper Gen.
Muni. Debt
Funds Avg. 7.63 7.04 7.36 7.09 6.88 6.68 6.36 5.71 5.56 5.29]
</TABLE>
Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gains distributions. No adjustment
has been made for taxes payable to shareholders on their reinvested dividends
and capital gains distributions. The performance data quoted represents past
performance and is not an indication of future results. Investment return and
principal value of an investment will fluctuate, and an investor's shares, when
redeemed, may be worth more or less than their original cost.
Message from the Manager
[A photo of Kenneth E. Willmann, Portfolio Manager appears here]
Grizzly Bear
The fiscal year which began April 1, 1994, started off with one of the worst
bear markets ever. The standard for bond interest rates, the active 30-year
U.S. Treasury Bond (the Long Bond), rose from 7.09% on March 31,1994, to 8.23%
on November 7, 1994. The resultant bond price decline was 12.7%, a very
substantial bear market in the Long Bond.
Tax-exempt municipal bonds followed suit. The Bond Buyer 40-Bond Index, an
industry benchmark for long-term municipal bonds, experienced an interest rate
rise from 6.36% on March 31, 1994, to 7.37% on November 22, 1994. The resultant
price decline was 11.7%. The Long-Term Fund's performance mirrored the index.
The net asset value (NAV) per share declined 10.5% from March 31, 1994, to
November 22, 1994 (adjusted for capital gains distributed on May 5, 1994).
This was a real grizzly bear market. On the bright side, the 30-day SEC yield
rose from 5.62% to a high of 6.62% during the same time period.
Running of the Bulls
Each year there is a festival in Pamplona, Spain, where bulls are allowed to
run through the main street of the city. The object is to give to all who
choose a chance to prove their bravery by running in front of the bulls. When
interest rates started downward sharply in November 1994, we were all given the
same opportunity. A "bull market" is investment jargon for a period of rising
prices. Bond prices rise when interest rates decline, and that is what began a
few days before Thanksgiving 1994.
From November 7, 1994, to March 31, 1995, the yield on the Long Bond dropped to
7.51% from 8.23%. From November 22, 1994, to March 31, 1995, the yield on the
Bond Buyer 40-Bond Index dropped from 7.37% to 6.37%, and the 30-day SEC yield
on the Fund fell from 6.62% to 5.96%.
In January 1995, I began buying bonds which were structurally a bit more
volatile and selling those that were less volatile. For example, we sold
several bonds that had relatively short periods to the next possible call date
and bought those with longer call dates. We also bought bonds with slightly
lower coupons and sold some with higher coupons.
The NAV per share had recovered 9.6% to $12.96 by March 31, 1995, making up
nearly all of its previous decline. In order to maintain our income
distribution, we gradually and selectively increased our holdings in BBB rated
bonds from 10% to 21%. These securities tend to have higher yields than those
with higher credit ratings.
Crystal Ball
What is the outlook for the near term? There are several crosscurrents at work.
Will the Federal Reserve Board continue to raise short-term interest rates?
What is the effect of the current turmoil in the foreign exchange markets on
the general level of interest rates? Will the U.S. economy continue to grow or
falter? Will inflation heat up or cool down? Will the new issuance of municipal
bonds continue at relatively low levels? What effects will the shift in
political power, away from federally funded programs to state and local control
have on all of the above plus state and local finances?
Searching for answers to these questions is like looking into a crystal ball,
full of swirling images as all the answers and their interrelationships appear.
A picture emerges, though it is not completely clear. I think the U.S. economy
will slow gradually for the rest of calendar 1995, which should keep inflation
from rising. The Federal Reserve will respond by holding short-term interest
rates steady. Therefore, long-term rates will likely fall in a choppy pattern,
causing bond prices to rise in a similar pattern.
I will continue to follow a strategy of favoring tax-exempt income over capital
gains while maintaining a high-quality portfolio. For the fiscal year ended
March 31, 1995, the dividend yield (1) on the Long-Term Fund was 6.0%, well
ahead of Lipper's General Municipal Debt Funds Average of 5.3%. (2) I believe
such a strategy is appropriate and desirable for investors who are in upper
income tax brackets. It should stand them in good stead in the scenario
outlined above.
(1) 12-Month Dividend Yield is computed by dividing income dividends paid
during the previous 12 months by the latest month-end net asset value
adjusted for capital gains distributions.
(2) Lipper Analytical Services is an independent organization that monitors the
performance of mutual funds.
See page 23 for a complete listing of the Portfolio of Investments in
Securities.
Note: Income may be subject to federal, state or local taxes, or the
alternative minimum tax.
Portfolio Ratings/Mix
March 31, 1995
[A pie chart is shown here depicting the Portfolio Ratings/Mix as of March 31,
1995 for the USAA Long-Term Fund to be: AAA - 19%, AA - 25%, A - 33%, BBB -
21% and Cash Equivalents - 2%]
Investment Review
INTERMEDIATE-TERM FUND
OBJECTIVE: Provide investors with interest income that is exempt from federal
income tax.
TYPES OF INVESTMENTS: Invests primarily in investment grade tax-exempt
securities of varying maturities. The average weighted portfolio maturity
is between 3 and 10 years.
3/31/94 3/31/95
Net Assets $1,559.2 Million $1,529.8 Million
Net Asset Value Per Share $12.48 $12.50
Average Annual Total Return as of 3/31/95
1 Year 6.16%
5 Years 7.58%
10 Years 8.22%
30-Day SEC Yield* on March 31, 1995 5.45%
*Calculated as prescribed by the Securities and Exchange Commission.
<TABLE>
<CAPTION>
[A graph is shown here comparing the 12-month dividend yield of the USAA
Intermediate-Term Fund and the Lipper Intermediate Municipal Debt Funds
Average from 3/31/86 to 3/31/95. The vertical axis shows the yield and the
horizontal axis shows the time period. The values are:
3/31/86 3/31/87 3/31/88 3/31/89 3/31/90 3/31/91 3/31/92 3/31/93 3/31/94 3/31/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
USAA Inter.
Term Fund 7.97 7.08 7.12 7.17 6.98 6.84 6.43 5.75 5.63 5.55
Lipper Int.
Muni. Debt
Funds Avg. 6.94 6.18 6.29 6.50 6.37 6.17 5.79 5.13 4.73 4.63
</TABLE>
The Lipper Intermediate Municipal Debt Funds Average is computed by Lipper
Analytical Services, an independent organization that monitors the performance
of mutual funds. 12-month dividend yield is computed by dividing income
dividends paid during the previous 12 months by the latest month-end net asset
value adjusted for capital gains distributions. The graph represents data from
3/31/86 to 3/31/95.
Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No adjustment has
been made for taxes payable by shareholders on their reinvested dividends and
capital gain distributions. The performance data quoted represents past
performance and is not an indication of future results. Investment return and
principal value of an investment will fluctuate, and an investor's shares, when
redeemed, may be worth more or less than their original cost.
Message from the Manager
[A photo of Clifford A. Gladson, Portfolio Manager appears here]
Credit Market Review
The Federal Reserve Board's increases in short-term interest rates and the bond
market's fear of future inflation from an overheated economy dominated events
in 1994. The relentless rise in all interest rates resulted in a bear market
for bonds. However, over the first three months of 1995, the market gained
confidence in the Federal Reserve's ability to hold inflation in check and the
bond market staged a sustained rally.
Fund Performance
Even though interest rates were volatile during the Fund's fiscal year, March
31, 1994, to March 31, 1995, yields on 10-year AA municipal bonds ended the
fiscal year at the same level as they started. During this period, the Fund's
30-day SEC yield increased from 5.17% to 5.45% while the share value increased
$.02 to $12.50.
For the 12 months ending March 31, 1995, your Fund provided a dividend yield(1)
of 5.6%, well above the 4.6% average dividend yield of the Lipper Intermediate
Municipal Debt Funds Average.(2)
Income Orientation
I manage your Fund to generate tax-free income - not taxable capital
appreciation. Bonds are very mathematical. When interest rates go up, the price
of a bond falls. When interest rates go down, the price of a bond rises. In the
long run, a bond matures at face value. The only tax-exempt income the bond
earns is the coupon(3) yield at the time of purchase. No one can consistently
predict movements in interest rates, so I do not try to time the market.
Income and yields for municipal bonds tend to increase with maturity, so I
attempt to extend maturities and buy high-quality bonds to maximize tax-exempt
income and minimize risk of ownership. And, as a secondary consideration, I
keep an eye on total return.
The Fund's solid performance after enduring the volatile bond market of the
last fiscal year reinforced my conviction that concentrating on producing
tax-free income is in the shareholder's best interest.
Interest Rate Outlook
It appears the credit market thinks the Federal Reserve has both the ability
to manage a soft landing and the determination to keep inflation in check. In
addition, demand for intermediate-term municipal bonds seems to be greater than
the level of new issuance. These factors indicate yields on intermediate-term
municipal bonds could continue to decline, and prices should also go up.
(1) 12-Month Dividend Yield is computed by dividing income dividends paid
during the previous 12 months by the latest month-end net asset value
adjusted for capital gains distributions.
(2) Lipper Analytical Services is an independent organization that monitors
the performance of mutual funds.
(3) Interest rate on a debt security the issuer promises to pay to the holder
until maturity.
See page 30 for a complete listing of the Portfolio of Investments in
Securities.
Note: Income may be subject to federal, state or local taxes, or the
alternative minimum tax.
Portfolio Ratings/Mix
March 31, 1995
[A pie chart is shown here depicting the Portfolio Ratings/Mix as of March 31,
1995 for the USAA Intermediate-Term Fund to be: AAA - 17%, AA - 14%, A-51%,
BBB - 17% and Cash Equivalents - 1%.]
Investment Review
Short-Term Fund
OBJECTIVE: Provide investors with interest income that is exempt from federal
income tax.
TYPES OF INVESTMENTS: Invests primarily in investment grade tax-exempt
securities of varying maturities. The average weighted portfolio maturity is 3
years or less.
3/31/94 3/31/95
Net Assets $995.6 Million $801.2 Million
Net Asset Value Per Share $10.48 $10.47
Average Annual Total Return as of 3/31/95
1 Year 4.51%
5 Years 5.41%
10 Years 5.96%
30-Day SEC Yield* on March 31, 1995 4.58%
*Calculated as prescribed by the Securities and Exchange Commission.
<TABLE>
<CAPTION>
[A graph is shown here comparing the 12-month dividend yield of the USAA Short-
Term Fund and the Lipper Short-Term Municipal Debt Funds Average from 3/31/86 to
3/31/95. The vertical axis shows the yield and the horizontal axis shows the
time period. The values are:
3/31/86 3/31/87 3/31/88 3/31/89 3/31/90 3/31/91 3/31/92 3/31/93 3/31/94 3/31/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
USAA Short-
Term Fund 6.73 5.79 5.80 6.19 6.47 6.47 5.59 4.75 4.33 4.51
Lipper Short-
Term Muni.
Debt Funds
Average 6.44 5.69 5.48 5.93 6.12 6.04 5.50 4.70 3.96 4.01
</TABLE>
The Lipper Short-Term Municipal Debt Funds Average is computed by Lipper
Analytical Services, an independent organization that monitors the performance
of mutual funds. 12-month dividend yield is computed by dividing income
dividends paid during the previous 12 months by the latest month-end net asset
value adjusted for capital gains distributions. The graph represents data from
3/31/86 to 3/31/95.
Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No adjustment
has been made for taxes payable by shareholders on their reinvested dividends
and capital gain distributions. The performance data quoted represents past
performance and is not an indication of future results. Investment return and
principal value of an investment will fluctuate, and an investor's shares, when
redeemed, may be worth more or less than their original cost.
Message from the Manager
[A photo of Clifford A. Gladson, Portfolio Manager appears here]
Credit Market Review
Starting in February 1994, the Federal Reserve Board increased short-term
interest rates seven times, doubling the Fed Funds rate to 6% at March 31, 1995
The Federal Reserve has direct control over short-term rates only. With the
possibility of an overheated economy causing inflation to raise its ugly head,
all bond yields soared, causing bond prices to fall across all maturities.
However, over the first three months of 1995, the bond market gained confidence
in the Federal Reserve's ability to hold inflation in check, resulting in a
sharp decline in bond yields.
Fund Performance
While your Fund is managed to pursue an above-average level of tax-free income,
I also strive to maintain low share price volatility.
The Fund performed as anticipated even though interest rates were volatile
during the Fund's fiscal year, March 31, 1994, to March 31, 1995. Yields on five
year AA municipal bonds ended the fiscal year at the same level as they started.
Yields on municipal money market securities rose steadily and have not
retreated. During this period, the Fund's 30-day SEC yield increased from 3.76%
to 4.58%, while the share value fell only $.01 to end at $10.47.
For the 12 months ending March 31, 1995, the Fund provided a dividend yield(1)
of 4.5%, well above the average dividend yield of 4.0% for the Lipper Short-
Term Municipal Debt Funds Average.(2)
Credit Analysis
We purchase bonds based on independent credit analysis rather than relying
exclusively on published credit ratings or name recognition.
We try to identify problems before they impact the portfolio. For example,
early last year one of our analysts performed an on-site credit review of
Orange County, California. He could not understand how the county was able to
generate such a high level of investment income without exposing itself to a
high level of risk. He visited the Orange County Treasurer's Office and
reviewed their reverse repo program and use of derivatives. Our analyst became
skeptical and after talking it over with other USAA analysts and portfolio
managers, we decided excessive leverage did not make sense to us, so we
followed one of our company's strategies: DON'T BUY WHAT YOU DON'T
UNDERSTAND. Orange County was rated AA when it filed for Chapter 9
bankruptcy protection in December 1994.
Rest assured that USAA IMCO has a seasoned team of fixed-income professionals
looking out for your best interests.
Interest Rate Outlook
It appears the bond market feels the Federal Reserve will keep inflation in
check. In addition, there is a relatively low level of new issuance of
short-term municipal bonds. These factors point to a rise in municipal money
market rates and stable or slightly declining municipal short-term yields.
The wild card in the interest rate outlook is the value of the dollar relative
to the yen and deutsche mark.
(1) 12-Month Dividend Yield is computed by dividing income dividends paid
during the previous 12 months by the latest month-end net asset value
adjusted for capital gains distributions.
(2) Lipper Analytical Services is an independent organization that monitors the
performance of mutual funds.
See page 40 for a complete listing of the Portfolio of Investments in
Securities.
Note: Income may be subject to federal, state or local taxes, or the
alternative minimum tax.
Portfolio Ratings/Mix
March 31, 1995
[A pie chart is shown here depicting the Portfolio Ratings/Mix as of March 31,
1995 for the USAA Short-Term Fund to be: AAA - 15%, AA - 21%, A - 41%, BBB -
10% and Cash Equivalents - 13%.]
Investment Review
Tax Exempt Money Market Fund
OBJECTIVE: Provide investors with interest income that is exempt from federal
income tax while preserving capital and maintaining liquidity.
TYPES OF INVESTMENTS: High quality tax-exempt securities with maturities of 397
days or less. The Fund will maintain a dollar-weighted average portfolio
maturity of 90 days or less and will endeavor to maintain a constant net asset
value per share of $1.00.*
*An investment in this Fund is neither insured nor guaranteed by the U.S.
government, and there can be no assurance that the Fund can maintain a stable
net asset value of $1.00 per share.
3/31/94 3/31/95
Net Assets $1,569.8 Million $1,456.7 Million
Net Asset Value Per Share $1.00 $1.00
Average Annual Total Return as of 3/31/95
1 Year 2.98%
5 Years 3.68%
10 Years 4.48%
7-Day Simple Yield on March 31, 1995 3.70%
[A graph is shown here comparing the 7-day yield of the USAA Tax Exempt Money
Market Fund and the IBC/Donoghue's SB & GP (tax free) from 3/94 to 3/95. The
vertical axis shows the yield and the horizontal axis shows the time period.
The ending value, on 3/27/95, for the USAA Tax Exempt Money Market Fund is
3.66% and the ending value for the IBC/Donoghue's SB & GB (tax free) is 3.42%.]
Data represents the last Monday of each month. Ending date 3/27/95.
Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No adjustment
has been made for taxes payable by shareholders on their reinvested dividends
and capital gain distributions. Past performance is no guarantee of future
results and the value of your investment may vary according to the Fund's
performance. The graph tracks the Fund's 7-day simple yield against
IBC/Donoghue's SB (Stock Broker) and GP (General Purpose) (Tax-Free) Money
Funds, an average of all major money market fund yields.
Message from the Manager
[A photo of Thomas Ramos, Portfolio Manager, appears here]
Strategy
In early December 1994, Orange County, California, declared bankruptcy. While a
number of other taxable and tax-exempt money market funds were bailed out due
to the Orange County bankruptcy, your Fund had no direct exposure to securities
backed by Orange County. Remaining true to our strategy, our portfolio
contained competitive-yielding high-quality securities. The USAA Tax Exempt
Money Market Fund is managed as a team effort. Even though I manage the Fund
and ultimately decide what is held in the portfolio, I receive a tremendous
amount of support from a team of three money market analysts. These analysts,
John Bonnell, CFA; Pamela Bledsoe, CFA; and Tony Era, provide me with critical
input on credit quality for both current holdings and potential buy candidates.
Their input helps me determine that the securities I am purchasing are not only
appropriate for money market funds; but, just as important, it helps me avoid
possible problems such as the Orange County fiasco.
Market Environment
The Federal Reserve Board has raised short-term rates twice since our last
report dated September 30, 1994, as it continued its preemptive moves against
inflation. Although short-term taxable rates have increased due to the Federal
Reserve's actions, tax-exempt securities have not risen as much because
investor demand for these securities has outstripped supply.
[A graph is here showing the growth of $10,000, from 3/31/85 to 3/31/95,
invested in the USAA Tax-Exempt Money Market Fund. The vertical axis shows the
dollar amount and the horizontal axis shows the time period. The ending value
is $15,494.]
The Portfolio
The average maturity of the Fund has been increased by approximately 8 days to
an average of 66 days since our last report. I believe it is unlikely that the
economy will continue to grow at the pace it did in the last half of 1994.
Consequently, over the near term I do not believe short-term rates will move
considerably upward. While the current maturity of the portfolio allows the
Fund to lock in competitive rates, it also provides me with flexibility and
buying power should short-term rates move higher.
See page 48 for a complete listing of the Portfolio of Investments in
Securities.
Note: Income may be subject to federal, state or local taxes, or the
alternative minimum tax.
Distributions to Shareholders
USAA Tax Exempt Fund, Inc. completed its fiscal year on March 31, 1995.
Federal law (Internal Revenue Code of 1986, as amended, and the regulations
thereunder) requires each Fund to notify its shareholders after the close of
its taxable year as to what portion of its earnings was exempt from federal
taxation and the dividend distributions which represent long-term capital
gains. The net investment income earned and distributed by each of the Funds
was 100% tax exempt for federal income tax purposes. There were no long-term
capital gain distributions for the year ended March 31, 1995.
Independent Auditors' Report
The Shareholders and Board of Directors
USAA TAX EXEMPT FUND, INC.:
We have audited the accompanying statements of assets and liabilities and
portfolios of investments in securities of the Long-Term, Intermediate-Term,
Short-Term, and Tax Exempt Money Market Funds, separate Funds of USAA Tax
Exempt Fund, Inc., as of March 31, 1995, the related statements of operations
for the year then ended, the statements of changes in net assets for each of
the years in the two-year period then ended, and the financial highlights
information presented in note 7 to the financial statements for each of the
years in the five-year period then ended. These financial statements and the
financial highlights information are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of March 31, 1995, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights information
referred to above present fairly, in all material respects, the financial
position of the Long-Term, Intermediate-Term, Short-Term, and Tax Exempt Money
Market Funds, separate Funds of USAA Tax Exempt Fund, Inc., as of March 31,
1995, the results of their operations for the year then ended, the changes in
their net assets for each of the years in the two-year period then ended, and
the financial highlights information for each of the years in the five-year
period then ended, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
San Antonio, Texas
May 3, 1995
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
(In Thousands)
March 31, 1995
<S> <C> <C>
Long-Term Intermediate-
Assets Fund Term Fund
Investments in securities, at market value
(identified cost of $1,695,137 and $1,484,287,
respectively) $ 1,757,195 $1,511,051
Cash 317 286
Receivables:
Capital shares sold 1,339 729
Interest 32,597 23,943
Securities sold 12,553 -
--------------- ------------
Total assets 1,804,001 1,536,009
--------------- ------------
Liabilities
Securities purchased 25,014 3,365
Capital shares redeemed 1,138 728
USAA Investment Management Company (note 5) 421 361
USAA Transfer Agency Company (note 5) 86 75
Accounts payable and accrued expenses 133 123
Dividends on capital shares 2,566 1,607
--------------- ------------
Total liabilities 29,358 6,259
--------------- ------------
Net assets applicable to capital shares outstanding $ 1,774,643 $1,529,750
=============== ============
Represented by:
Paid-in capital $ 1,774,940 $1,511,887
Accumulated net realized loss on investments (62,355) (8,901)
Net unrealized appreciation (depreciation) of investments 62,058 26,764
--------------- ----------
Net assets applicable to capital shares outstanding $ 1,774,643 $1,529,750
=============== ===========
Capital shares outstanding 136,941 122,375
=============== ===========
Net asset value, redemption price, and offering price per share $ 12.96 $ 12.50
=============== ===========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
TAX EXEMPT
SHORT-TERM MONEY MARKET
FUND FUND
<S> <C> <C>
ASSETS
Investments in securities, at market value
(identified cost of $792,632, and $1,439,089,
respectively) $ 791,016 $1,439,089
Cash 1,143 4,606
Receivables:
Capital shares sold 491 3,594
Interest 11,746 12,844
Securities sold - 18,027
----------- ----------
Total assets 804,396 1,478,160
----------- ----------
LIABILITIES
Securities purchased - 16,087
Capital shares redeemed 2,413 4,519
USAA Investment Management Company (note 5) 191 346
USAA Transfer Agency Company (note 5) 39 73
Accounts payable and accrued expenses 100 145
Dividends on capital shares 496 243
----------- ----------
Total liabilities 3,239 21,413
----------- ----------
Net assets applicable to capital shares outstanding $ 801,157 $1,456,747
=========== ==========
REPRESENTED BY:
Paid-in capital $ 806,378 $1,456,747
Accumulated net realized loss on investments (3,605) -
Net unrealized appreciation (depreciation) of investments (1,616) -
----------- ----------
Net assets applicable to capital shares outstanding $ 801,157 $1,456,747
=========== ==========
Capital shares outstanding 76,537 1,456,747
=========== ==========
Net asset value, redemption price, and offering price per share $ 10.47 $ 1.00
=========== ==========
</TABLE>
CATEGORIES & DEFINITIONS
PORTFOLIOS OF INVESTMENTS IN SECURITIES
March 31, 1995
This year's Portfolios of Investments in Securities have a new format. The
securities are now divided into three categories - fixed rate instruments, put
bonds, and variable rate demand notes. We hope this presentation enhances your
understanding of the securities held in each fund.
Fixed Rate Instruments - consist of municipal bonds, notes, and commercial
paper. The coupon rate is constant to maturity. Prior to maturity, the price of
a fixed rate instrument generally varies inversely to the movement of interest
rates. At maturity, the security pays face value.
Put Bonds - provide the right to tender, or put, the bond for redemption at
face value at specific tender dates prior to final maturity. The put feature
shortens the effective maturity to the next tender date. Between tender dates,
the price of a put bond generally varies inversely to the movement of interest
rates.
Variable Rate Demand Notes (VRDN) - provide the right, on any business day, to
demand, or put, the security for redemption at face value on either that day or
in seven days. The interest rate is adjusted at the stipulated daily, weekly,
or monthly interval to a rate that reflects current market conditions. In money
market funds, the VRDN's effective maturity is the longer of the next put date
or the interest reset date rather than the final maturity. In bond funds, the
effective maturity is the next put date. Most VRDNs possess a credit
enhancement.
Credit Enhancement (CRE) - adds the financial strength of the provider to
support the underlying obligor's debt service obligations and/or the put
option. The enhancement may be provided by either a high quality bank,
insurance company or other corporation, or a collateral trust. Typically, the
rating agencies evaluate the security based upon the credit standing of the
credit enhancement.
<TABLE>
<CAPTION>
LONG-TERM FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES
(In Thousands)
March 31, 1995
Principal Coupon Final Market
Amount Security Rate Maturity Value
<C> <S> <C> <C> <C>
Fixed Rate Instruments (97.3%)
Alabama
$ 8,500 Fairfield Environmental Improvement RB,
Series 1994A 6.70% 12/01/24 $ 8,403
Alaska
Housing Finance Corp. Collateralizied RB,
12,290 1991 Second Series 6.90 6/01/32 12,586
18,330 1993 First Series 5.88 12/01/35 16,793
10,460 1994 First Series 6.70 12/01/19 10,681
Valdez Marine Terminal RB,
21,175 Series 1985A 7.00 12/01/25 22,211
22,000 Series 1985A 5.75 11/01/28 20,404
Arizona
Maricopa County IDA RB,
12,350 Series 1985D 9.25 7/01/11(a) 12,747
11,150 Series 1985D 9.25 7/01/11 11,489
16,745 Salt River Project Agriculture and Power
District Electric System RB, Series 1987E 7.25 1/01/17(a) 17,827
California
45,045 San Joaquin Hills Transportation RB 7.60(b) 1/01/23 6,134
58,260 San Joaquin Hills Transportation RB 7.60(b) 1/01/24 7,383
74,000 San Joaquin Hills Transportation RB 6.75 1/01/32 70,900
Colorado
11,480 Summit County Sports Facilities RB,
Series 1990 7.88 9/01/08 13,020
District of Columbia
12,485 Health Facilities Mortgage RB, Series 1985 7.75 8/01/29 13,066
8,000 Hospital RB, Series 1992B 7.00 8/15/15 7,880
Florida
18,000 Board of Education GO, Series 1989A, (CRE) 6.00 6/01/25 17,874
18,000 Jacksonville Port Auth. PCRB, Series 1984C 9.63 9/01/19 18,876
8,900 Tallahassee Student Housing RB, Series 1990A 7.00 7/01/22 4,450(e)
Georgia
35,000 Burke County Development Auth. PCRB 6.38 8/01/24 35,005
20,000 Georgia GO, Series 1995B 3.20 3/01/15 13,815
Illinois
Chicago Gas Supply RB,
13,500 Series 1985B 7.50 3/01/15 14,742
7,500 Series 1985C 7.50 3/01/15 8,190
Chicago-O'Hare International Airport RB,
13,725 Series 1994 8.20 12/01/24 15,190
15,000 Series 1994A, (CRE) 6.38 1/01/12 15,429
14,000 Development Finance Auth. RB, Series 1993A 6.38 1/01/28 14,068
Health Facilities Auth. RB,
4,160 Series 1988 8.10 12/01/03 4,228
7,000 Series 1989 7.88 1/01/13 7,324
17,775 Series 1992 7.00 1/01/15 18,203
10,170 Series 1993A 6.95 11/15/13 10,211
16,360 Series 1993A 7.00 11/15/19 16,340
12,540 Series 1993B 6.95 11/15/13 12,591
6,745 Series 1993B 7.00 11/15/19 6,736
18,400 Quincy Hospital RB, Series 1993 6.00 11/15/18 16,680
10,980 Regional Transport Auth. GO,
Series 1994C, (CRE) 7.10 6/01/25 11,830
Indiana
5,560 Fifth Avenue Housing Development Corp. RB,
Series 1992C 7.25 7/01/25 5,741
Health Facility Financing Auth. RB,
100,675 Series 1992C 7.89(b) 7/01/23 12,457
5,900 Series 1993 5.90 11/01/09 5,731
40,000 Indianapolis Airport Facility RB 6.80 4/01/17 40,795
6,500 Marion County Hospital Auth. RB, Series 1992 6.55 10/01/08 6,709
Kansas
60,245 Sedgwick County Mortgage Loan RB,
Senior Series 1991A 7.11(b) 12/01/22 8,079
Kentucky
21,065 Boone County PCRB, Series 1992A 6.50 11/15/22 21,394
Louisiana
9,000 Delhi IDA RB, Series 1982 7.50 12/01/12 9,392
25,730 Lake Charles Harbor and Terminal District
Port Facilities RB 7.75 8/15/22 27,701
51,420 Orleans Parish School Board GO, (CRE) 7.65 2/01/14 51,554
Massachusetts
24,000 GO, Series 1991A 7.63 6/01/08(a) 27,583
12,750 Health and Educational Facilities Auth. RB,
Series G1 5.50 12/01/27 11,000(c)
Michigan
9,900 Battle Creek Downtown Development Auth.
Development Bonds, Series 1994 7.60 5/01/16 10,532
13,500 Hospital Finance Auth. MFH RB, Series 1994A 7.50 10/01/27 13,290
11,900 Housing Development Auth. RB, Series 1992A 6.60 4/01/12 12,246
6,500 Job Development Auth. RB, Series 1990A 8.00 12/01/13 7,102
Minnesota
9,095 South St. Paul Housing and Redevelopment
Auth. Hospital RB, Series 1994 6.75 11/01/09 9,086
23,940 St. Paul Housing and Redevelopment Auth.
Hospital RB, Series 1993-A 6.63 11/01/17 22,288
Mississippi
Lafayette County Hospital RB,
2,940 Series 1991A 7.95 3/01/16 3,153
15,175 Series 1991B 7.95 3/01/16 16,276
Union County Hospital RB,
4,450 Series 1991A 7.95 3/01/16 4,744
8,350 Series 1991B 7.95 3/01/16 8,901
Missouri
22,185 Environmental Improvement and Energy
Resources Auth. PCRB,
Series 1984G-2, (CRE) 8.25 11/15/14 23,563
Nevada
15,650 Humboldt County PCRB, Series 1984 8.30 12/01/14 18,088
New Hampshire
13,070 Business Finance Auth. PCRB, Series 1993 6.63 2/01/22 12,540
7,035 Higher Educational and Health Facilities
Auth. RB, Series 1993 6.38 7/01/23 6,577
New Jersey
11,000 Health Care Facilities Financing Auth. RB,
Series 1994, (CRE) 6.75 7/01/19 11,638
New Mexico
11,650 Albuquerque Gross Receipts Tax RB,
Series 1984 8.25 7/01/14 12,099
16,000 Chaves County Hospital RB 7.25 12/01/22 16,009
30,100 Lordsburg PCRB 6.50 4/01/13 30,652
New York
24,455 Dormitory Auth. RB, Series 1994B 6.25 5/15/20 24,027
Medical Care Facilities Finance Agency RB,
36,275 Series 1994A, (CRE) 6.90 8/15/34 38,412
13,900 Series 1995A 6.85 2/15/17 13,921(c)
New York City GO,
12,875 Series 1993A 6.25 8/01/20 12,112
50,000 Series 1995B 7.25 8/15/19 51,995
North Carolina
19,905 Housing Finance Agency RB, Series R 6.95 9/01/23 20,706
Pennsylvania
11,350 Housing Finance Agency MFH RB, Series 1992 6.50 7/01/23 11,427
15,700 Philadelphia Gas Works RB, Fourteenth Series 6.38 7/01/26 15,375
Puerto Rico
21,175 Electric Power Auth. RB, Series T 6.38 7/01/24 21,265
26,215 Public Building Auth. RB, Series I 6.00 7/01/12 25,880
Rhode Island
25,000 Housing and Mortgage Finance Corp.
Single-Family Housing RB, Series 15-A 6.85 10/01/24 25,778
South Carolina
27,515 Piedmont Municipal Power Agency RB,
Series 1991 4.00 1/01/23 18,912
South Dakota
16,155 Housing Development Auth. Home Mortgage
Bonds, Series 1993A 6.00 5/01/21 15,618
Texas
19,500 Bell County Health Facilities Development
Corp. RB, Series 1989 6.50 7/01/19(a) 20,735
7,055 Department of Housing and Community Affairs
RB, Series 1991A 6.95 7/01/23 7,320
12,500 Harris County Health Facilities RB,
Series 1992 7.13 6/01/15 12,961
19,100 Harris County IDC RB, Series 1992 6.95 2/01/22 19,603
19,000 Houston Water and Sewer System RB,
Series 1992B 6.38 12/01/14 19,343
9,630 Red River Auth. PCRB, Series 1984 7.88 9/15/14 10,198
San Antonio Electric and Gas RB,
21,055 Series 1989A 6.00 2/01/14 20,889
3,800 Series 1989B 5.00 2/01/16 3,302
9,900 Series 1991B 6.00 2/01/14 9,822
36,195 Turnpike Auth. RB 6.00 1/01/20 35,192
20,000 Waco Health Facilities RB 10.13 11/01/15 21,029
Utah
32,705 Intermountain Power Agency RB, Series 1985G 8.00 7/01/20(a) 33,004
7,000 Juab County PCRB, Series 1991 6.00(d) 8/01/11 6,570
Virginia
9,500 Henrico County IDA Hospital RB, Series 1985C 7.50 9/01/11(a) 10,681
26,100 Housing Development Auth. Commonwealth
Mortgage RB, Series 1990B, Subseries B5 6.90 7/01/13 27,003
21,950 Peninsula Ports Auth. RB, Series 1992, (CRE) 7.38 6/01/20 22,796
Washington
41,485 King County GO, Series 1994A 6.25 1/01/34 41,720
68,500 Seattle Metropolitan Sewer RB, Series V 6.20 1/01/32 67,227
West Virginia
12,500 Water Development Auth. RB,
Series 1991A, (CRE) 7.00 11/01/25 13,207
Wisconsin
17,000 Housing and Economic Development Auth.
MFH RB, Series 1993C 5.88 11/01/19 16,143
Wyoming
33,735 Community Development Auth. Single-Family
Housing Bonds, Series 1993A 6.10 6/01/33 31,701
----------
Total fixed rate instruments (cost: $1,664,042) 1,726,100
----------
Variable Rate Demand Notes (1.7%)
California
6,600 Fremont MFH RB, Series 1985A, (CRE) 4.40 1/01/08 6,600
7,100 Richmond Joint Powers Financing Auth. RB,
Series 1994, (CRE) 4.60 9/01/04 7,100
1,100 Torrance Hospital RB, Series 1992, (CRE) 4.15 2/01/22 1,100
Florida
3,000 Atlantic Beach RB, Series 1994B, (CRE) 4.50 10/01/24 3,000
4,900 Dade County Health Facilities Auth. RB,
Series 1990, (CRE) 4.60 9/01/20 4,900
1,395 Pinellas County Housing Finance Auth. MFH
RB, Series 1991A, (CRE) 4.35 7/01/11 1,395
Texas
2,100 Nueces River Auth. PCRB, Series 1985, (CRE) 4.60 12/01/99 2,100
Virginia
1,800 Henrico County IDA RB, Series 1994, (CRE) 4.50 5/01/24 1,800
3,100 Loudoun County IDA Residential Care Facility
RB, Series 1994B, (CRE) 4.50 11/01/24 3,100
------------
Total variable rate demand notes (cost: $31,095) 31,095
------------
Total investments (cost: $1,695,137) $1,757,195
============
</TABLE>
LONG-TERM FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (CONTINUED)
March 31, 1995
Portfolio Summary By Industry
Hospitals 18.8%
Electric Power 12.1
General Obligations 11.1
Housing - Single/Family 9.9
Escrowed Securities 6.9
Toll Roads 6.7
Sewer 3.8
Housing - Multi/Family 3.3
Oil - International 2.4
Air Freight 2.3
Special Assessment/Tax/Fee 2.3
Gas Utilities 2.2
Education 1.7
Metals - Miscellaneous 1.7
Ports/Wharfs 1.7
Natural Gas Distribution - Pipelines 1.6
Leasing 1.1
Water/Sewer 1.1
Other 8.3
--------
Total 99.0%
========
Portfolio Summary By State
Alabama .5% Alaska 4.7% Arizona 2.4%
California 5.6 Colorado .7 District of Columbia 1.2
Florida 2.8 Georgia 2.7 Illinois 9.7
Indiana 4.0 Kansas .4 Kentucky 1.2
Louisiana 5.0 Massachusetts 2.2 Michigan 2.4
Minnesota 1.8 Mississippi 1.9 Missouri 1.3
Nevada 1.0 New Hampshire 1.1 New Jersey .7
New Mexico 3.3 New York 7.9 North Carolina 1.2
Pennsylvania 1.5 Puerto Rico 2.7 Rhode Island 1.4
South Carolina 1.1 South Dakota .9 Texas 10.3
Utah 2.2 Virginia 3.7 Washington 6.1
West Virginia .7 Wisconsin .9 Wyoming 1.8
------
Total 99.0%
======
<TABLE>
<CAPTION>
INTERMEDIATE-TERM FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES
(IN THOUSANDS)
March 31, 1995
Principal Coupon Final Market
Amount Security Rate Maturity Value
<C> <S> <C> <C> <C>
Fixed Rate Instruments (91.7%)
Arizona
$ 4,000 Educational Loan Marketing Corp. RB,
Series 1992A 6.70% 3/01/00 $ 4,190
Arkansas
7,520 Mississippi County Hospital RB, Series 1992B 6.85 11/01/02 7,989
8,635 St. Francis County Hospital RB, Series 1985 6.50 2/01/05 8,931
2,850 Student Loan RB, Series 1991 7.15 6/01/02 3,028
California
10,500 Contra Costa Transportation Auth. RB,
Series 1991A, (CRE) 6.30(b) 3/01/03 6,840
25,165 Pleasanton Joint Powers Financing Auth. RB,
Series 1993A 6.00 9/02/05 25,298
14,950 Revenue Anticipation Warrants,
Series 1994C, (CRE) 5.75 4/25/96 15,115
2,425 Sacramento County Sanitation District
Financing Auth. RB, Series 1993 5.00 12/01/06 2,278
20,920 Sacramento Municipal Utility District
Electric RB, Series 1993D 5.25 11/15/04 20,395
10,900 San Diego Port Facilities RB,
Series 1992, (CRE) 6.60 12/01/02 10,318
San Joaquin Hills Transportation RB,
3,525 Series 1993 7.05(b) 1/01/05 2,255
8,305 Series 1993 7.87(b) 1/01/06 5,313
3,000 Series 1993 7.82(b) 1/01/07 1,915
16,795 Series 1993 7.71(b) 1/01/08 10,773
12,695 Southern California Public Power Auth. RB,
Series 1992 6.10(b) 7/01/04 7,448
Colorado
5,200 Arapahoe County IDA RB, Series 1991 7.00 2/01/01 5,538
10,000 Highlands Ranch Metropolitan District #2 GO,
Series 1991, (CRE) 6.70 6/15/01 10,367
10,310 Student Obligations RB, Series 1991A-2 6.90 9/01/02 10,736
District of Columbia
GO,
9,000 Series 1987A 7.40 6/01/99 9,302
27,750 Series 1993A 5.80 6/01/04 25,577
8,000 Series 1994A-3 5.50 6/01/06 7,036
7,000 Series B-2, (CRE) 5.40 6/01/05 6,813
11,780 Series E 5.75 6/01/05 10,619
12,000 Series E 5.75 6/01/06 10,663
6,250 Hospital RB, Series B 6.75 8/15/07 6,172
Florida
5,000 Housing Finance Agency MFH RB, Series 1984C 6.25 12/01/06 5,136
5,050 Miami Health Facilities Auth. RB,
Series 1988A 7.75 8/01/00 5,418
5,935 Nassau County PCRB, Series 1989 7.65 6/01/06 6,352
Pensacola Health Facilities RB,
3,570 Series 1988 7.50 1/01/98(a) 3,774
8,500 Series 1993 5.10 1/01/06 7,977
Georgia
7,300 Gwinnett County MFH RB, Series B, (CRE) 7.50 6/01/98 7,493
8,760 Metropolitan Atlanta Rapid Transit RB,
Series M 6.25 7/01/03 9,339
Municipal Electric Auth. RB,
26,305 Series CC 7.00 1/01/07 28,564
6,500 Series Q 7.75 1/01/00 7,052
Guam
Power Auth. RB,
2,195 Series 1994A 6.00 10/01/05 2,195
2,180 Series 1994A 6.13 10/01/06 2,184
2,580 Series 1994A 6.20 10/01/07 2,580
Illinois
3,000 Bedford Park Tax Increment RB, Series 1993 7.38 12/01/04 3,188
8,685 Chicago GO, Series A 7.40 1/01/00 9,107
21,235 Chicago-O'Hare International Airport RB,
Series 1994A, (CRE) 6.20 1/01/07 21,985
10,110 Development Finance Auth. RB, Series 1995 7.00 3/01/07 10,271
Health Facilities Auth. RB,
3,615 Series 1989 7.75 5/15/00(a) 4,046
6,700 Series 1992 7.00 1/01/07 6,974
1,850 Independent Higher Education Loan Auth. RB,
Series 1985, (CRE) 7.50 12/01/99 1,866
15,000 Joliet Gas Supply RB, Series B 8.00 6/01/99 16,519
29,395 Toll Highway Auth. RB, Series 1993A 3.50 1/01/05 25,288
Indiana
Health Facility Financing Auth. RB,
620 Series 1991 8.50 9/01/95 630
620 Series 1991 8.50 9/01/96 638
620 Series 1991 8.50 9/01/97 638
205 Series 1991 8.50 9/01/98 211
205 Series 1991 8.50 9/01/99 211
20,300 Series 1993 5.40 11/1/05 20,122
16,800 Series 1994 6.20 7/01/09 16,876
8,400 Marion County Hospital Auth. RB, Series 1992 6.10 10/01/03 8,567
Pike Township School Building Corp. RB,
4,600 Series 1992A 6.00 2/01/06 4,629
4,700 Series 1992A 6.00 8/01/06 4,729
3,150 Scottsburg Economic Development RB,
Series 1990 7.13 3/01/99 3,257
Iowa
10,000 Student Loan Liquidity Corp. RB, Series 1992A 6.45 3/01/02 10,533
Kansas
5,000 Kansas City IDA PCRB, Series 1984 5.45 4/01/06 4,697
Louisiana
9,650 Orleans Parish School Board RB,
Series 1991, (CRE) 6.63 2/01/02 9,668
8,500 Vidalia IDA RB, Series 1983 7.50 12/01/00 8,534
Maine
3,615 Winslow PCRB, Series 1985A 9.00 6/01/00 3,657
Maryland
2,260 Community Development Administration RB,
1987 Second Series 7.60 4/01/99 2,348
12,725 Transportation Facilities Auth. RB,
Series 1992, (CRE) 6.00(b) 7/01/04 7,801
Massachusetts
GO,
15,000 Series 1991D 6.63 7/01/03 16,208
27,775 Series 1993A 5.10 2/01/05 26,634
3,640 Housing Finance Agency RB, Series 1992C 6.35 11/15/03 3,832
17,175 Industrial Finance Agency RB, Series 1989A 7.10 8/01/99 18,332
60,000 New England Education Loan Marketing Corp.
RB, Series 1985A 5.80 3/01/02 61,502
Michigan
18,100 Dickinson County Economic Development Corp.
RB, Series 1989 6.55 3/01/07 18,628
5,000 State Hospital Finance Auth. RB, Series 1995A 7.50 10/01/07 5,159
Minnesota
13,500 South St. Paul Housing and Redevelopment
Auth. Hospital Facility RB, Series 1994 6.50 11/01/04 13,499
Mississippi
15,000 Adams County PCRB, Series 1994A 5.50 12/01/05 14,518
Lafayette County Hospital RB,
720 Series 1991A 7.70 3/01/03 774
3,725 Series 1991B 7.70 3/01/03 4,001
3,720 Prentiss County Hospital RB, Series 1985 6.50 2/01/05 3,729
Union County Hospital RB,
1,100 Series 1991A 7.70 3/01/03 1,227
2,045 Series 1991B 7.70 3/01/03 2,281
Nevada
16,640 Clark County School District GO,
Series 1991B, (CRE) 6.24(b) 3/01/04 10,338
New Hampshire
Higher Educational and Health Facilities
Auth. RB,
2,735 Series 1985A, (CRE) 7.50 12/01/00 2,796
2,275 Series 1990 8.50 12/01/01 2,406
New Jersey
32,260 Turnpike Auth. RB, Series 1991A 6.50 1/01/03 34,581
New Mexico
6,595 Chaves County Hospital RB, Series 1992 7.25 12/01/10 6,644
New York
Dormitory Auth. RB,
2,725 Series 1994B 5.90 5/15/06 2,672
2,500 Series 1994B 6.00 5/15/07 2,460
6,550 Environmental Facilities Corp. PCRB,
Series 1991E 6.40 6/15/03 7,013
4,730 GO, Series 1995A 5.60 3/15/06 4,722
Local Government Assistance Corp. RB,
5,000 Series 1993D 5.00 4/01/06 4,792
3,140 Series 1994A 5.00 4/01/06 3,014
Medical Care Facilities Finance Agency RB,
5,000 Series 1994A, (CRE) 6.40 2/15/07 5,360
5,000 Series 1994A, (CRE) 6.50 2/15/08 5,359
2,675 Series 1995A 6.70 2/15/05 2,686
2,750 Series 1995A 6.70 8/15/05 2,762
2,860 Series 1995A 6.75 2/15/06 2,873
2,940 Series 1995A 6.75 8/15/06 2,954
3,045 Series 1995A 6.80 2/15/07 3,059
3,130 Series 1995A 6.80 8/15/07 3,145
5,700 Series 1995A 6.80 8/15/12 5,708(c)
2,905 Mortgage Agency RB, Series EE-1 7.75 10/01/00 2,969
New York City GO,
10,160 Series 1991D 8.00 8/01/99 11,026
1,375 Series 1991D (Escrowed) 8.00 8/01/99(a) 1,534
12,780 Series 1992H 6.88 2/01/04 13,235
17,000 Series 1993B 6.75 10/01/04 17,491
9,000 Series 1993C 6.50 8/01/04 9,099
15,000 Series 1995A 6.13 8/01/06 14,622
13,000 New York City Municipal Assistance Corp. RB,
Series 67 7.30 7/01/00 14,380
New York City Municipal Water Finance RB,
6,640 Series 1992A 6.70 6/15/03 7,107
27,665 Series 1994B 5.30 6/15/06 26,274
4,100 Urban Development Corp. Youth Facilities RB,
Series 1994 5.60 4/01/04 3,996
North Carolina
21,000 Eastern Municipal Power Agency RB,
Series 1991A 6.25 1/01/03 21,501
Municipal Power Agency #1 RB,
6,000 Series 1992 6.00 1/01/04 6,126
17,530 Series 1993 4.10 1/01/05 15,206
Ohio
4,000 IDA RB, Series 1992 5.75 12/01/02 4,049
Oklahoma
54,460 Grand River Dam Auth. RB, Series 1993 4.00 6/01/04 48,212
Industries Auth. Health Facilities RB,
2,350 Series 1989A 7.30 6/01/01(a) 2,597
2,045 Series 1989A 7.30 6/01/01 2,239
2,355 Tulsa County Home Finance Auth. RB,
Series 1990, (CRE) 7.10 5/01/02 2,610
Pennsylvania
9,440 GO, Second Series 1992 6.11(b) 7/01/04 5,782
3,565 Housing Finance Agency RB, Series 1992 5.90 7/01/04 3,628
10,000 State Finance Auth. RB 6.60 11/01/09 10,377
5,000 York County IDA RB, Series 1992 6.25 7/01/02 5,206
Puerto Rico
Electric Power Auth. RB,
21,895 Series N 5.90(b) 7/01/04 12,938
5,000 Series S 7.00 7/01/06 5,498
20,000 Housing Bank and Finance Agency RB 7.50 12/01/06 21,869
8,005 Municipal Finance Agency RB, Series 1992A 5.80 7/01/04 8,101
14,060 Public Building Auth. RB, Series K 6.50 7/01/03 15,124
Public Improvement GO,
24,850 Series 1993 5.38 7/01/05 24,004
7,500 Series 1994 6.10 7/01/06 7,664
7,825 Series 1994 6.20 7/01/07 7,996
Rhode Island
6,180 Housing and Mortgage Finance Corp. RB,
Series 15-B 6.30 10/01/07 6,327
South Dakota
5,400 Rapid City IDA RB, Series 1990 7.25 11/01/00 5,815
Tennessee
7,550 Memphis and Shelby County Industrial
Development Board RB, Series 1993 5.40 3/15/05 7,470
2,500 Shelby County Hospital RB, Series 1993 5.10 11/01/03 2,461
Texas
3,495 Brazos County Health Facilities RB,
Series 1989B 7.50 1/01/01(a) 3,847
15,400 Gulf Coast Waste Disposal Auth. PCRB,
Series 1992 6.13 11/01/04 15,785
6,200 Gulf Coast Waste Disposal Auth. RB,
Series 1994 5.70 5/01/06 6,066
5,000 Houston Water and Sewer System RB,
Series 1992B 6.00 12/01/04 5,173
Lower Colorado River Auth. RB,
34,035 Fifth Supplemental Series 5.25 1/01/05 33,172
11,700 Series 1992, (CRE) 6.45(b) 1/01/03 7,673
5,000 Metro Health Facilities Development Corp.
Hospital RB, Series 1993 5.25 1/01/06 4,748
11,790 Public Finance Auth. RB, (CRE) 6.06(b) 2/01/04 7,226
San Antonio Electric and Gas RB,
4,190 Series 1989 7.00 2/01/01 4,498
10,000 Series 1991B, (CRE) 6.38(b) 2/01/04 6,156
1,015 Series 1992 5.80 2/01/06 1,035
4,000 Trinity River IDA RB 7.25 2/01/04 4,384
6,530 Tyler Health Facilities Development Corp. RB,
Series 1993B 6.63 11/01/11 6,116
1,095 Waco Health Facilities RB 9.38 11/01/97 1,144
7,255 Water Resources Finance Auth. RB, Series 1989 7.25 2/15/01 7,729
Utah
Intermountain Power Agency RB,
16,430 Series 1988B, (CRE) 6.48(b) 7/01/03 10,493
21,895 Series 1988B, (CRE) 6.18(b) 7/01/04 13,125
Virginia
5,000 Isle of Wight County IDA PCRB, Series 1994 5.80 5/01/04 4,996
6,315 Loudoun County IDA Hospital RB, Series 1990 7.50 6/01/98 6,436
Washington
15,800 GO, Series R-1989B 7.20 9/01/00 16,863
5,500 King County GO, Series 1993A 5.90 12/01/07 5,631
West Virginia
16,940 School Building Auth. RB, Series 1994 6.25 7/01/04 17,625
Wyoming
491 Farm Loan Board COP, Series 1989, (CRE) 6.50 12/01/99 490
Platte County PCRB,
1,500 Series 1994 4.95 1/01/06 1,384
1,000 Series 1994 5.05 1/01/07 918
----------
Total fixed rate instruments (cost: $1,378,983) 1,402,877
----------
Put Bonds (6.8%)
Alabama
4,000 Housing Finance Auth. MFH RB,
Series 1992C, (CRE) 5.90 8/01/07 3,997
California
3,535 Woodland MFH RB, Series 1994A 6.05 12/01/24 3,617
Florida
10,330 Broward County MFH RB, Series 1991, (CRE) 7.20 5/01/07 10,714
5,000 Housing Finance Agency RB, Series 1994B 5.70 10/01/24 5,036
Illinois
13,965 Arlington Heights MFH RB, Series 1991, (CRE) 7.25 5/01/11 14,544
9,945 Glendale Heights MFH RB, Series 1985A, (CRE) 7.70 11/01/09 10,048
8,055 Hoffman Estates MFH RB, Series 1985A, (CRE) 7.00 12/01/09 8,257
Kansas
6,590 Merriam MFH RB, Series 1991A, (CRE) 7.25 4/01/21 6,855
Louisiana
18,110 Public Facilities Auth. RB, Health and
Education Facilities, Series 1985A, (CRE) 7.30 12/01/15 18,970
4,360 Shreveport Home Mortgage Authority RB,
Series 1995A, (CRE) 6.40 9/01/25 4,376
New Mexico
7,700 Bernalillo County MFH RB, Series 1994A, (CRE) 6.50 10/01/19 7,860
Ohio
5,500 Montgomery County IDA RB, Series 1992, (CRE) 6.50 2/01/07 5,740
Texas
2,500 Gregg County Housing Finance Corp. RB,
Series 1995A 6.40 9/01/25 2,493
Utah
855 Housing Finance Agency RB, Series 1985B 9.13 7/01/07 867
----------
Total put bonds (cost: $100,504) 103,374
----------
Variable Rate Demand Notes (0.3%)
Florida
1,500 Atlantic Beach RB, Series 1994B, (CRE) 4.50 10/01/24 1,500
Texas
2,300 Nueces River Auth. PCRB, Series 1985, (CRE) 4.60 12/01/99 2,300
Virginia
1,000 Henrico County IDA RB, Series 1994, (CRE) 4.50 5/01/24 1,000
------------
Total variable rate demand notes (cost: $4,800) 4,800
------------
Total investments (cost: $1,484,287) $1,511,051
============
</TABLE>
INTERMEDIATE-TERM FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (CONTINUED)
March 31, 1995
Portfolio Summary By Industry
General Obligations 19.3%
Electric Power 16.9
Hospitals 13.3
Housing - Multi/Family 7.9
Student Loan 6.4
Toll Roads 5.2
Special Assessment/Tax/Fee 4.3
Paper & Forest Products 3.7
Water Utilities 3.2
Sales Tax Obligations 3.1
Education 2.2
Airports 1.4
Finance - Municipal 1.2
Gas Utilities 1.1
Manufacturing - Diversified Industries 1.1
Chemicals 1.0
Escrowed Securities 1.0
Other 6.5
------
Total 98.8%
=======
Portfolio Summary By State
Alabama .3% Alaska .3% Arizona 1.3%
California 7.3 Colorado 1.7 District of Columbia 5.0
Florida 3.0 Georgia 3.4 Guam .5
Illinois 8.6 Indiana 4.0 Iowa .7
Kansas .8 Louisiana 2.7 Maine .2
Maryland .7 Massachusetts 8.3 Michigan 1.6
Minnesota .9 Mississippi 1.7 Nevada .7
New Hampshire .3 New Jersey 2.3 New Mexico .9
New York 11.8 North Carolina 2.8 Ohio .6
Oklahoma 3.6 Pennsylvania 1.6 Puerto Rico 6.7
Rhode Island .4 South Dakota .4 Tennessee .6
Texas 7.8 Utah 1.6 Virginia .8
Washington 1.5 West Virginia 1.2 Wyoming .2
-------
Total 98.8%
=======
<TABLE>
<CAPTION>
SHORT-TERM FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES
(IN THOUSANDS)
March 31, 1995
Principal Coupon Final Market
Amount Security Rate Maturity Value
<C> <S> <C> <C> <C>
Fixed Rate Instruments (75.8%)
Alaska
$ 1,500 Anchorage Hospital RB, Series 1991 6.30% 10/01/95 $ 1,516
North Slope Borough GO,
7,000 Series 1988G 8.35 6/30/98 7,626
2,000 Series 1992A, (CRE) 4.65 6/30/97 1,988
3,860 Series 1992A, (CRE) 4.85 6/30/98 3,831
6,000 Series 1993B, (CRE) 4.50 1/01/98 5,931
Arkansas
2,635 Mississippi County Hospital RB, Series 1992B 6.05 5/01/97 2,668
2,315 St. Francis County Hospital RB, Series 1985 5.40 12/01/97 2,353
California
4,865 Pleasanton Joint Powers Financing Auth. RB,
Series 1993A 5.20 9/02/98 4,835
Revenue Anticipation Warrants,
22,695 Series 1994C, (CRE) 5.75 4/25/96 22,946
10,000 Series 1994C (Insured), (CRE) 5.75 4/25/96 10,115
12,615 San Joaquin Hills Transportation RB 7.10(b) 1/01/00 9,142
3,500 San Joaquin Hills Transportation RB 7.16(b) 1/01/01 2,363
Colorado
13,000 Centennial Water and Sanitation District GO,
Series 1991A, (CRE) 6.50 6/15/96 13,170
3,000 Student Obligation RB, Series 1991A-1 6.20 9/01/96 3,044
District of Columbia
18,790 GO, Series 1994A-3 4.70 6/01/99 17,173
Georgia
7,100 Municipal Electric Auth. RB, Series BB 4.50 1/01/98 6,939
Guam
20,000 GO, Series 1994A 5.75 8/15/99 20,329
Power Auth. RB,
1,640 Series 1994A 5.50 10/01/99 1,646
1,725 Series 1994A 5.60 10/01/00 1,733
Hawaii
GO,
5,000 Series 1993CC 4.30 2/01/98 4,866
5,000 Series 1993CD 4.30 2/01/98 4,865
Idaho
Student Loan RB,
3,705 Series 1992 5.95 4/01/96 3,710
3,540 Series 1992 5.95 10/01/96 3,548
3,330 Series 1992 6.00 4/01/97 3,340
Illinois
9,000 Cook County GO, (CRE) 7.38 11/01/08(a) 10,026
Development Finance Auth. RB,
3,500 Series 1985 5.70 10/01/99 3,551
1,215 Series 1995 6.13 3/01/98 1,219
1,285 Series 1995 6.25 3/01/99 1,294
1,000 Student Assistance Commission RB,
Series 1992AA 5.05 3/01/97 1,004
10,000 Toll Highway Auth. RB, Series 1993A 4.10 1/01/98 9,802
Indiana
Health Facility Financing Auth. RB,
4,200 Series 1991 6.25 9/01/96(a) 4,310
9,100 Series 1993 4.65 11/01/98 9,067
14,700 Series 1994 5.38 7/01/01 14,672
4,200 Marion County Hospital Auth. RB, Series 1992 5.25 10/01/97 4,246
Kentucky
2,000 Higher Education Student Loan RB, Series A 4.40 12/01/98 1,953
Louisiana
4,900 Offshore Terminal Auth. RB, Series 1994B 5.85 9/01/00 5,041
3,440 Saint Charles Parish PCRB 7.63 6/01/03 3,682
Massachusetts
New England Education Loan Marketing Corp. RB,
10,160 Series 1993D 4.75 7/01/98 9,983
14,675 Series 1993H 4.75 12/01/99 14,234
5,000 Series A 6.13 9/01/99 5,199
9,751 Turnpike Auth. RB, Series A 4.75 1/01/02(a) 10,256
Michigan
Hospital Finance Auth. RB,
3,655 Series 1993A 4.75 5/15/97 3,632
3,500 Series 1995 7.00 10/01/01 3,589
3,500 Series 1995A 6.80 10/01/00 3,570
Minnesota
Southern MN Municipal Power Agency RB,
4,855 Series 1993A 4.10 1/01/98 4,693
4,475 Series A 4.30 1/01/99 4,306
Mississippi
Lafayette County Hospital RB,
75 Series 1991A 7.35 3/01/96 76
395 Series 1991B 7.35 3/01/96 402
Union County Hospital RB,
115 Series 1991A 7.35 3/01/96 117
215 Series 1991B 7.35 3/01/96 220
Missouri
6,530 Higher Education Loan Auth. RB, Series 1992A 5.00 2/15/97 6,543
Nevada
8,640 Reno GO, Series 1991 6.30 4/01/96 8,772
New Jersey
790 Expressway Auth. RB, Series 1962 4.75 12/01/02(a) 792
New Mexico
2,300 Educational Assistance Foundation Student
Loan RB, Senior Series 1993 2A 4.40 12/01/97 2,280
New York
Dormitory Auth. RB,
1,285 Series 1994B 5.10 5/15/99 1,261
2,190 Series 1994B 5.30 5/15/00 2,151
25,805 Environmental Facilities Corp. PCRB,
Series 1994A 5.50 6/15/99 26,373
7,500 GO, Series 1991 6.40 3/01/96 7,633
5,325 Medical Care Facilities Finance Agency RB,
Series 1994A, (CRE) 5.80 2/15/01 5,509
New York City GO,
9,000 Series 1992B 7.00 2/01/96 9,142
10,000 Series 1994D 6.00 8/15/99 10,094
8,000 Series 1994H 5.30 8/01/99 7,822
5,000 Series 1995A 5.40 8/01/00 4,878
5,000 Series 1995D 6.50 2/01/02 5,112
North Carolina
3,000 Charlotte-Mecklenberg Hospital RB,
Series 1992 5.20 1/01/97 3,038
Oklahoma
15,000 Grand River Dam Auth.RB, Series 1992 5.00 6/01/99 14,932
Oregon
5,000 Clackamas County Hospital RB, Series 1992A 5.30 10/01/96 5,066
Pennsylvania
Beaver County Finance Auth. RB,
12,000 Series 1986A, (CRE) 8.00 11/01/09(a) 12,966
4,000 Series 1986B, (CRE) 8.00 11/01/09(a) 4,322
17,290 Higher Education Assistance Agency Student
Loan RB, Series 1985A, (CRE) 6.80 12/01/00 18,196
IDA Economic Development RB,
5,325 Series 1991A 6.20 7/01/95 5,347
11,770 Series 1991A 6.30 1/01/96 11,937
Puerto Rico
Electric Power Auth. RB,
4,365 Series S 6.00 7/01/99 4,516
3,600 Series T 6.00 7/01/99 3,724
5,000 Highway and Transportation Auth. RB, Series U 5.50 7/01/97 5,069
5,000 Municipal Finance Agency RB, Series 1992A 4.75 7/01/97 4,996
14,000 Public Improvement GO, Series 1993 4.55 7/01/98 13,727
9,900 Telephone Auth. RB, Series M 4.30 1/01/98 9,717
South Carolina
7,145 Public Service Auth. RB, Series 1991A 6.00 7/01/95 7,174
Tennessee
15,000 Clarksville Public Building Auth. RB,
Series 1993 4.40 12/01/98 14,673
2,000 Shelby County Hospital RB, Series 1993 4.50 11/01/98 1,985
Texas
4,530 Brazos County Health Facilities RB,
Series 1993B 4.88 1/01/98 4,477
1,405 Harris County Health Facilities RB,
Series 1991A 6.00 2/15/96 1,423
1,450 Houston Water and Sewer System RB,
Series 1992B 4.90 12/01/97 1,447
20,400 Municipal Power Agency RB, Series 1993A 4.25 9/01/97 20,216
4,090 Pasadena GO, Series 1994 5.75 2/15/99 4,203
6,500 San Antonio Electric and Gas RB, Series 1991A 6.00 2/01/96 6,595
Virginia
3,180 Fairfax County Economic Development Auth.,
Series 1991A 7.13 6/01/96 3,234
Washington
4,000 GO 5.00 9/01/99 4,012
16,050 Seattle Municipal Light and Power RB,
Series 1993 4.30 5/01/98 15,654
West Virginia
13,480 School Building Auth. Capital Improvement
RB, Series 1994 6.00 7/01/00 13,917
Wisconsin
2,250 Housing and Economic Development Auth. RB,
Series 1992A 5.20 11/01/96 2,264
--------
Total fixed rate instruments (cost: $608,981) 607,010
--------
Put Bonds (12.7%)
California
2,200 Modesto MFH RB, Series 1992A, (CRE) 5.00 3/01/06 2,204
5,963 Tustin Assessment Improvement Bonds,
District #86-2, (CRE) 4.35 9/02/13 5,963
Colorado
2,155 Boulder County IDRB, Series 1984,(CRE) 4.75 12/01/04 2,134
5,000 City and County of Denver Airport System RB,
Series 1991C, (CRE) 6.00 12/01/25 5,094
Florida
5,000 Orange County Housing Auth. MFH RB,
Series 1985H, (CRE) 4.50 11/01/97 5,001
Illinois
Development Finance Auth. RB,
5,000 Series 1993A, (CRE) 5.00 1/01/28 5,016
10,980 Series 1993B-1 4.38 6/01/28 10,754
6,500 Series 1993C-1 4.20 8/15/26 6,333
11,900 Educational Facilities Auth. RB,
Series 1992, (CRE) 5.63 10/01/26 11,966
Kansas
6,270 Lenexa Health Care Facilities RB,
Series 1991 6.25 5/15/11(a) 6,387
Maryland
9,000 Howard County MFH RB, Series 1984, (CRE) 6.00 12/01/05 9,102
Michigan
7,000 Ottawa County Economic Development RB,
Series 1991, (CRE) 6.38 5/01/16 7,104
Nebraska
7,310 Investment Finance Auth. MFH RB,
Series 1985, (CRE) 6.63 9/01/05 7,369
Pennsylvania
3,800 Armstrong County Hospital Auth. RB,
Series 1992A, (CRE) 5.25 11/01/12 3,853
13,625 Montgomery County Redevelopment MFH RB,
Series 1991A, (CRE) 6.13 8/01/07 13,656
Texas
115 North Central Health Facilities Development
Corp. RB, Series 1991A, (CRE) 6.00 10/01/08 115
---------
Total put bonds (cost: $101,696) 102,051
---------
Variable Rate Demand Notes (10.2%)
California
8,700 Fremont MFH RB, Series 1985A, (CRE) 4.40 1/01/08 8,700
8,200 Hemet MFH RB, Series 1984A, (CRE) 5.13 6/01/96 8,200
Orange County Housing Auth. MFH RB,
6,700 Series 1984C, (CRE) 4.35 8/01/08 6,700
6,890 Series 1985-AA, (CRE) 4.70 12/01/08 6,890
11,500 Series 1985-BB, (CRE) 4.75 12/01/09 11,500
7,200 Sacramento County MFH RB,
Series 1985D, (CRE) 5.00 4/15/07 7,200
Florida
12,900 Broward County Housing Auth. MFH RB,
Series 1984A, (CRE) 4.60 4/01/06 12,900
2,400 Dade County Health Facilities Auth. RB,
Series 1990, (CRE) 4.60 9/01/20 2,400
Illinois
965 West Frankfurt Commercial Redevelopment RB 6.98 4/01/07 965
New Mexico
13,400 Farmington PCRB, Series 1994A, (CRE) 5.05 11/01/13 13,400
Texas
400 Nueces River Auth. PCRB, Series 1985, (CRE) 4.60 12/01/99 400
Virginia
2,700 Loudoun County IDA RB, Series 1985, (CRE) 4.60 9/01/15 2,700
----------
Total variable rate demand noes (cost: $81,955) 81,955
----------
Total investments (cost: $792,632) $791,016
==========
</TABLE>
SHORT-TERM FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (CONTINUED)
March 31, 1995
Portfolio Summary By Industry
General Obligations 20.6%
Electric Power 15.3
Housing - Multi/Family 13.0
Hospitals 9.2
Student Loan 8.9
Special Assessment/Tax/Fee 7.9
Finance - Municipal 6.8
Toll Roads 3.9
Water Utilities 3.3
Community Service 1.5
Escrowed Securities 1.4
Nursing Care 1.2
Telephones 1.2
Other 4.5
-------
Total 98.7%
=======
Portfolio Summary By State
Alaska 2.6% Arkansas .6% California 13.3%
Colorado 2.9 District of Columbia 2.1 Florida 2.5
Georgia .9 Guam 3.0 Hawaii 1.2
Idaho 1.3 Illinois 7.7 Indiana 4.0
Kansas .8 Kentucky .3 Louisiana 1.1
Maryland 1.1 Massachusetts 5.0 Michigan 2.2
Minnesota 1.1 Mississippi .1 Missouri .8
Nebraska .9 Nevada 1.1 New Jersey .1
New Mexico 2.0 New York 10.0 North Carolina .4
Oklahoma 1.9 Oregon .6 Pennsylvania 8.8
Puerto Rico 5.2 South Carolina .9 Tennessee 2.1
Texas 4.9 Virginia .7 Washington 2.5
West Virginia 1.7 Wisconsin .3 ------
Total 98.7%
=======
<TABLE>
<CAPTION>
Tax Exempt Money Market Fund
Portfolio of Investments in Securities
(In Thousands)
March 31, 1995
Principal Coupon Final
Amount Security Rate Maturity Value
<C> <S> <C> <C> <C>
Variable Rate Demand Notes (55.4%)
Alabama
$ 2,875 Foley Industrial Development Board RB, (CRE) 4.30% 12/01/00 $ 2,875
3,600 Housing Finance Auth. MFH RB,
Series 1988C, (CRE) 4.30 12/01/03 3,600
Arizona
34,100 Apache County IDA PCRB, Series 1981A, (CRE) 4.25 6/15/20 34,100
15,900 Pima County IDA RB, Series 1983A, (CRE) 4.20 3/15/18 15,900
6,840 Yuma IDA MFH RB, Series 1988A, (CRE) 4.15 11/01/08 6,840
Arkansas
6,300 Little Rock Metrocentre IDA RB,
Series 1985, (CRE) 4.65 12/01/25 6,300
9,000 Union County Industrial Board PCRB,
Series 1988, (CRE) 4.32 2/01/00 9,000
13,600 Univ. of Arkansas RB, Series 1994, (CRE) 4.20 12/01/19 13,600
California
5,170 Livermore MFH RB, Series 1992A, (CRE) 4.35 12/01/22 5,170
3,300 Monterey Peninsula Water Management District
COP, Series 1992, (CRE) 4.10 7/01/22 3,300
1,600 Palm Springs Community Redevelopment Agency
COP, Project VII, (CRE) 4.10 12/01/14 1,600
3,600 Riverside County MFH RB, Series 1992A, (CRE) 4.15 12/01/15 3,600
18,945 San Bernardino County MFH RB,
Series 1989A, (CRE) 4.00 5/01/06 18,945
500 San Diego MFH RB, Series 1993A, (CRE) 4.50 12/01/15 500
4,425 Statewide Communities Development Auth. COP,
Series 1992, (CRE) 4.20 12/01/22 4,425
9,100 Torrance Hospital RB, Series 1992, (CRE) 4.15 2/01/22 9,100
4,400 Union City MFH RB, Series 1989B, (CRE) 4.00 11/01/07 4,400
5,000 Vallejo Housing Auth. MFH RB,
Series 1985C, (CRE) 4.15 1/01/08 5,000
Colorado
6,860 Commerce City Golf Enterprise RB,
Series 1994, (CRE) 4.20 11/01/21 6,860
1,000 Denver City and County MFH RB,
Series 1985, (CRE) 4.55 12/01/09 1,000
Delaware
12,570 New Castle County Economic Development RB,
Series 1993, (CRE) 4.25 8/15/20 12,570
District of Columbia
6,200 National Children's Center RB,
Series 1993, (CRE) 4.30 2/01/20 6,200
Florida
2,800 Dade County Health Facilities Auth. RB,
Series 1990, (CRE) 4.60 9/01/20 2,800
1,500 Dade County Housing Finance Auth. MFH RB,
Series 1985, (CRE) 3.95 9/01/05 1,500
3,890 Dade County MFH RB, Series 1993-1, (CRE) 4.30 2/01/28 3,890
182 Greater Orlando Aviation Auth. Special
Purpose RB, Series 1990, (CRE) 4.35 12/01/14 182
2,400 Jacksonville Health Facilities Auth. RB,
Series 1990, (CRE) 4.50 6/01/20 2,400
600 Jacksonville IDA RB, Series 1993, (CRE) 4.20 7/01/13 600
5,000 Jacksonville Parking System Improvement RB,
Series 1992, (CRE) 4.35 5/01/22 5,000
2,563 Local Government Finance Auth. RB,
Series 1994A, (CRE) 4.15 3/01/15 2,563
10,200 Manatee County Housing Finance Auth. MFH RB,
Series 1989A, (CRE) 4.35 6/01/07 10,200
900 Miami Health Facilities Auth. RB,
Series 1992, (CRE) 4.20 3/01/12 900
2,800 Palm Beach County Health Facilities RB,
Series 1993, (CRE) 4.20 9/01/08 2,800
855 Palm Beach County IDRB, Series 1990, (CRE) 4.20 5/01/02 855
1,200 Pinellas County Housing Finance Auth. MFH RB,
Series 1989A, (CRE) 4.35 7/01/07 1,200
1,585 Plant City Hospital RB, Series 1993, (CRE) 4.25 3/01/13 1,585
1,300 Sarasota County Health Facilities Auth.
Hospital RB, Series 1992, (CRE) 4.65 12/01/22 1,300
3,900 Sarasota County Health Facilities Auth. RB,
Series 1989, (CRE) 4.40 12/01/19 3,900
1,700 Suwannee County Health Facilities RB,
Series 1994, (CRE) 4.25 2/01/21 1,700
11,945 Volusia County Health Facilities Auth. RB,
Series 1994A, (CRE) 4.15 11/15/23 11,945
Georgia
6,500 Catoosa County IDA RB, Series 1991, (CRE) 4.32 12/01/06 6,500
2,550 Clayton County Housing Auth. MFH RB,
Series 1992, (CRE) 4.35 6/15/17 2,550
5,000 Cobb County Housing Auth. MFH RB,
Series 1993, (CRE) 4.28 12/01/05 5,000
6,365 Columbus IDA RB, Series 1991, (CRE) 4.35 1/01/11 6,365
7,470 DeKalb County Housing Auth. MFH RB,
Series 1993A, (CRE) 4.30 11/01/15 7,470
13,860 Fulton County Housing Auth. MFH RB,
Series 1994A, (CRE) 4.30 10/01/25 13,860
6,435 Fulton County Residential Care Facility RB,
Series 1993, (CRE) 4.30 1/01/19 6,435
3,610 Peachtree Development Auth. RB,
Series 1988, (CRE) 4.25 7/01/10 3,610
6,650 Roswell Housing Auth. MFH RB,
Series 1994, (CRE) 4.30 8/01/24 6,650
9,350 Whitfield County Residential Care Facility
Auth. RB, Series 1992, (CRE) 4.30 11/01/25 9,350
Illinois
5,160 Development Finance Auth. Demand Notes,
Fiscal Year 1994-1995, (CRE) 4.25 6/30/95 5,160
7,400 Development Finance Auth. MFH RB,
Series 1991, (CRE) 4.40 10/01/25 7,400
17,100 Health Facilities Auth. RB,
Series 1995A, (CRE) 4.20 2/15/16 17,100
Indiana
2,600 Salem Economic Development RB,
Series 1985, (CRE) 5.85 10/01/00 2,600
4,080 St. Joseph County Hospital Auth. RB,
Series 1995, (CRE) 4.20 3/04/15 4,080
Iowa
5,900 Waterloo IDRB, (CRE) 4.10 11/01/08 5,900
Kansas
2,895 Kansas City MFH RB, Series 1993, (CRE) 4.48 6/01/15 2,895
4,930 Ottawa IDA RB, Series 1991, (CRE) 4.25 10/01/04 4,930
5,900 Prairie Village RB, Series 1993B, (CRE) 4.30 8/15/23 5,900
Kentucky
6,000 Fulton Hospital RB, Series 1985, (CRE) 4.50 5/01/10 6,000
9,490 Hancock County Industrial Building RB,
Series 1991, (CRE) 4.38 7/01/11 9,490
18,000 Ohio County PCRB, Series 1983, (CRE) 4.45 6/01/13 18,000
Louisiana
12,685 Public Facilities IDA RB, Series 1993, (CRE) 4.20 2/01/13 12,685
Maryland
7,400 Baltimore IDA RB, Series 1986, (CRE) 4.10 8/01/16 7,400
6,500 Prince George's County Sports Arena RB,
Series 1992, (CRE) 4.30 6/01/12 6,500
Minnesota
4,400 Hastings Hospital RB, Series 1988, (CRE) 4.50 11/01/13 4,400
16,700 St. Paul Housing and Redevelopment Auth. RB,
Series 1982A, (CRE) 4.35 12/01/12 16,700
Mississippi
4,445 Hinds County Urban Renewal RN,
Series 1991, (CRE) 4.35 1/01/07 4,445
Missouri
Clayton IDA RB,
6,325 Series 1994A, (CRE) 4.40 12/01/06 6,325
8,780 Series 1995C, (CRE) 4.40 5/01/05 8,780
New Jersey
3,240 Economic Development Auth. RB,
Series 1989, (CRE) 4.32 12/01/00 3,240
New York
2,000 Energy Research and Development Auth. PCRB,
Series 1987A, (CRE) 4.45 3/01/27 2,000
1,400 Housing Finance Agency RB,
Series 1991A, (CRE) 4.05 5/15/15 1,400
Job Development Auth. RB,
95 Series 1984D1-D9, (CRE) 3.85 3/01/99 95
485 Series 1985C1-C34, (CRE) 3.80 3/01/00 485
1,100 Nassau County IDA RB, Series 1993, (CRE) 4.45 7/01/23 1,100
800 New York City GO, Series 1995B-8, (CRE) 4.05 8/15/24 800
New York City Housing Development Corp. RB,
24,850 Series 1984A, (CRE) 4.60 12/01/16 24,850
1,230 Series 1985-1, (CRE) 3.95 12/01/07 1,230
3,700 Series 1985A, (CRE) 4.60 12/01/09 3,700
1,300 Series 1994A, (CRE) 3.95 7/01/05 1,300
400 North Hempstead Solid Waste Management Auth.
RB, Series 1991, (CRE) 3.80 2/01/12 400
1,400 Oswego County IDA PCRB, Series 1992, (CRE) 4.10 12/01/08 1,400
800 Rotterdam IDA RB, Series 1993A, (CRE) 3.95 11/01/09 800
800 Triborough Bridge and Tunnel Auth. RB,
Series 1994, (CRE) 3.80 1/01/24 800
North Carolina
300 Medical Care Commission Health Care
Facilities RB, Series 1991, (CRE) 4.50 4/01/21 300
8,700 New Hanover County Industrial Facilities and
Pollution Control Financing Auth. RB,
Series 1984, (CRE) 4.15 12/01/99 8,700
Ohio
6,000 Clark County IDA RB, (CRE) 5.58 12/01/10 6,000
7,700 Dayton Special Facilities RB,
Series 1988C, (CRE) 4.70 10/01/09 7,700
Oklahoma
Muskogee Industrial Trust RB,
2,400 Series 1985, (CRE) 4.35 12/01/15 2,400
3,260 Series 1985, (CRE) 4.35 12/01/15 3,260
9,000 Oklahoma City Industrial and Cultural
Facilities Trust RB, Series 1985, (CRE) 4.50 7/01/15 9,000
4,300 Tulsa County Home Finance Auth. MFH RB,
Series 1985B, (CRE) 4.30 3/15/05 4,300
6,600 Tulsa Industrial Auth. Univ. RB,
Series 1985, (CRE) 4.38 3/01/15 6,600
Pennsylvania
5,700 Lehigh County IDA RB, Series 1984A, (CRE) 5.94 12/01/04 5,700
2,875 Montgomery County Higher Education and
Health Auth. RB, Series 1992, (CRE) 4.38 12/01/02 2,875
South Carolina
Housing Finance and Development Auth. RB,
4,505 Series 1987, (CRE) 4.35 12/01/11 4,505
4,550 Series 1988, (CRE) 4.35 11/01/07 4,550
5,000 Job and Economic Development Auth. RB,
Series 1994, (CRE) 4.35 12/01/14 5,000
5,600 State Housing Finance and Development Auth.
RB, Series 1988, (CRE) 4.35 7/01/07 5,600
Tennessee
14,000 Hamilton County IDRB, Series 1995, (CRE) 4.30 3/01/15 14,000
19,000 Montgomery County Public Building Auth. RB,
Series 1995, (CRE) 4.30 3/01/25 19,000
1,000 Nashville and Davidson County Health and
Educational Facilities Board RB,
Series 1989, (CRE) 4.35 2/01/09 1,000
5,000 Nashville and Davidson County Industrial
Development Board RB, Series 1994, (CRE) 4.30 6/01/08 5,000
Texas
8,200 Austin Housing Finance Corp. MFH RB,
Series 1985, (CRE) 4.30 4/01/15 8,200
400 Brazos River Auth. PCRB, Series 1988 4.25 11/01/00 400
300 Capital IDC PCRB, Series 1984 4.15 10/01/00 300
300 Department of Housing and Community Affairs
MFH RB, Series 1993B, (CRE) 4.05 2/01/23 300
6,950 DeSoto IDA RB, Series 1989, (CRE) 4.25 12/01/16 6,950
460 El Paso IDA RB, Series 1991, (CRE) 4.35 11/01/03 460
1,850 Euless IDA RB, Series 1985, (CRE) 4.25 12/01/15 1,850
6,490 Galveston County Health Facilities
Development Corp. RB, Series 1991, (CRE) 4.25 1/01/16 6,490
6,500 Gulf Coast IDA RB, Series 1989, (CRE) 4.35 11/01/19 6,500
600 Harris County Health Facilities RB,
Series 1988, (CRE) 4.13 5/01/18 600
Housing Agency MFH RB,
9,500 Series 1984A, (CRE) 4.14 3/01/06 9,500
5,800 Series 1984B, (CRE) 4.14 3/01/06 5,800
900 Hunt County Health Facilities Development
Corp. RB, Series 1985, (CRE) 4.10 10/01/15 900
900 Hunt County IDC RB, Series 1987, (CRE) 4.30 10/01/02 900
1,910 Maverick County IDC RB, Series 1991, (CRE) 4.35 12/01/01 1,910
500 McAllen IDA RB, Series 1985, (CRE) 4.35 12/01/99 500
300 Metropolitan Higher Education Auth. RB,
Series 1984, (CRE) 4.35 12/01/04 300
150 North Central Texas Health Facilities
Development Corp. RB, Series 1989, (CRE) 4.35 12/01/98 150
12,700 Nueces River Auth. PCRB, Series 1985, (CRE) 4.60 12/01/99 12,700
2,400 Port Arthur Navigation District IDC PCRB,
Series 1985, (CRE) 4.60 5/01/03 2,400
Port Development Corp. RB,
9,300 Series 1984, (CRE) 4.38 12/01/04 9,300
1,100 Series 1989, (CRE) 4.15 1/15/14 1,100
1,065 San Antonio Higher Education Auth. RB,
Series 1985, (CRE) 3.90 12/01/15 1,065
1,100 Tarrant County Health Facilities Development
Corp. RB, Series 1988, (CRE) 4.25 9/01/18 1,100
14,375 Tarrant County Housing Finance Corp. MFH RB,
Series 1994, (CRE) 4.35 11/01/07 14,375
370 Tom Green County Health Facilities
Development Corp. RB, Series 1985B, (CRE) 6.25 1/01/06 370
2,475 Travis County Housing Finance Corp. MFH RB,
Series 1985S, (CRE) 4.50 12/01/07 2,475
2,900 Trinity River IDA RB, Series 1984, (CRE) 4.25 11/01/14 2,900
Utah
8,800 Ogden City IDA RB, Series 1986, (CRE) 4.45 9/01/13 8,800
Virginia
3,800 Alexandria IDA RB, Series 1989, (CRE) 4.30 1/01/09 3,800
3,600 Arlington Public Improvement RB, (CRE) 4.05 8/01/17 3,600
Chesterfield County IDA PCRB,
1,500 Series 1992, (CRE) 4.20 4/01/09 1,500
4,050 Series 1993, (CRE) 4.35 8/01/09 4,050
3,170 Culpeper IDA RB, Series 1992, (CRE) 4.30 11/01/17 3,170
569 Fairfax County American College of Radiology
RB, (CRE) 4.30 2/01/11 569
4,300 Fairfax County IDA RB, Series 1985A, (CRE) 4.10 10/01/16 4,300
400 Fauquier County IDA RB, Series 1994, (CRE) 4.30 12/01/14 400
Hampton Redevelopment and Housing Auth.
MFH RB,
7,010 Series 1984A, (CRE) 4.25 12/01/06 7,010
1,891 Series 1985, (CRE) 4.30 12/01/05 1,891
5,253 Harrisonburg Redevelopment and Housing Auth.
RN, Series 1985, (CRE) 4.30 12/01/15 5,253
Henrico County IDA RB,
3,738 Series 1991, (CRE) 4.30 9/01/11 3,738
3,600 Series 1994, (CRE) 4.50 5/01/24 3,600
4,700 Loudoun County IDA RB, Series 1985, (CRE) 4.60 9/01/15 4,700
2,200 Loudoun County IDA Residential Care Facility
RB, Series 1994B, (CRE) 4.50 11/01/24 2,200
1,000 Louisa County IDA RB, Series 1995, (CRE) 4.30 1/01/20 1,000
1,800 Lynchburg IDA Hospitl RB,
Series 1985E, (CRE) 4.10 12/01/25 1,800
Newport News Redevelopment and Housing Auth.
MFH RB,
2,100 Series 1984, (CRE) 4.45 9/01/06 2,100
800 Series 1990, (CRE) 4.25 3/01/07 800
1,460 Richmond IDA RB, Series 1987, (CRE) 4.30 12/01/99 1,460
3,937 Spotsylvania County IDA RB,
Series 1990, (CRE) 4.30 10/01/20 3,937
Washington
2,305 Port of Benton Economic Development Corp.
RB, Series 1989, (CRE) 4.50 11/01/05 2,305
2,445 Port of Pasco Economic Development Corp. RB,
Series 1991, (CRE) 4.50 7/01/00 2,445
2,436 Seattle IDA RB, Series 1989-I, Lot 1, (CRE) 4.35 8/01/04 2,436
West Virginia
6,270 Cabell County Nursing and Rehabilitation
Facilities RB, Series 1993, (CRE) 4.35 10/01/10 6,270
Wisconsin
10,000 Wausau IDRB, Series 1993, (CRE) 4.25 10/01/02 10,000
--------
Total variable rate demand notes (cost: $806,704) 806,704
--------
Put Bonds (19.6%)
California
Higher Education Loan Auth. RB,
10,000 Senior Lien Series 1992A, (CRE) 3.90 4/01/00 10,000
9,000 Series 1987B, (CRE) 3.90 7/01/02 9,000
10,240 Irvine Assessment District #85-7 CP, (CRE) 4.10 9/02/11 10,240
25,000 Student Education Loan Marketing Corp. RB,
Series 1993A, (CRE) 4.40 11/01/02 25,000
Colorado
Arapahoe County Capital Improvement
Highway RB,
5,000 Series 1986D, (CRE) 4.45 8/31/26 5,000
5,000 Series G, (CRE) 4.45 8/31/26 5,000
Connecticut
3,200 Housing Finance Auth. RB, Series 1992G,
Subseries G-1 3.55 11/15/16 3,200
5,000 Special Assessment Unemployment Compensation
RB, Series 1993C, (CRE) 3.85 11/15/01 5,000
Florida
8,205 Jacksonville IDA RB, Series 1989, (CRE) 3.95 10/01/09 8,205
3,800 Putnam County Development Auth. PCRB,
Series 1984H-3, (CRE) 4.30 3/15/14 3,800
St. Lucie County PCRB,
1,000 Series 1992, (CRE) 4.25 5/01/27 1,000
8,300 Series 1992, (CRE) 4.20 5/01/27 8,300
Georgia
10,260 Private Colleges and Universities Auth. RB,
Series 1993B 4.20 10/01/15 10,260
7,925 Roswell Housing Auth. MFH RB,
Series 1984B, (CRE) 4.30 11/01/14 7,925
Illinois
Chicago GO,
12,000 Series 1994A-2, (CRE) 4.15 10/31/95 12,000
15,000 Series 1994C, (CRE) 4.25 10/31/99 15,000
8,500 Series 1995A, (CRE) 4.60 10/31/96 8,500
Health Facilities Auth. RB,
8,000 Series 1990A, (CRE) 4.40 2/01/19 8,000
14,000 Series 1992 4.10 1/01/26 14,000
Kentucky
2,000 Lexington-Fayette Urban County Government
Residential Facilities RB, Series 1987, (CRE)4.50 4/01/15 2,000(c)
Louisiana
8,850 Plaquemines Port Harbor and Terminal
District Port Facilities RB,
Series 1984B, (CRE) 4.50 3/15/06 8,850
8,510 Public Facilities IDA RB, Series 1984, (CRE) 4.75 12/01/14 8,510
Maryland
7,150 Anne Arundel County RB, 1988 Issue, (CRE) 4.00 6/15/11 7,150
4,300 Calvert County RB, 1987 Issue, (CRE) 4.25 12/01/04 4,300
Missouri
10,300 Environmental Improvement and Energy
Resouces Auth. PCRB, Series 1984A, (CRE) 3.75 6/01/14 10,301
New York
Energy Research and Development Auth. PCRB,
2,200 Series 1985A, (CRE) 4.65 3/15/15 2,200
3,500 Series 1985B, (CRE) 4.10 10/15/15 3,500
4,000 Series 1985D, (CRE) 4.60 12/01/15 4,000
Oregon
3,000 Clackamas County Hospital Facility
Auth. RB, (CRE) 4.20 4/01/14 3,000(c)
Pennsylvania
2,000 Beaver County IDA PCRB, Series 1992E, (CRE) 4.20 10/01/11 2,000
6,320 Ferguson Industrial and Commercial
Development Auth. RB, Series 1981, (CRE) 4.30 11/01/06 6,320
South Carolina
10,000 York County PCRB, Series 1984N-4, (CRE) 4.30 9/15/14 10,000
Texas
6,000 Lower Neches Valley Auth. PCRB,
Series 1987, (CRE) 4.45 2/15/17 6,000
Virginia
Housing Development Auth. Commonwealth
Mortgage RB,
9,000 Series 1993A A-Stem 4.25 7/01/17 9,000
25,000 Series 1993F F-Stem 3.90 7/01/22 25,000
Washington
3,500 Seattle Municipal Light and Power RB,
Series 1991B 4.40 5/01/11 3,500
--------
Total put bonds (cost: $285,061) 285,061
--------
Fixed Rate Instruments (23.8%)
California
7,000 Pasadena TRAN, Series 1994 4.75 10/27/95 7,022
5,000 RAN, Series 1994-1995A 5.00 6/28/95 5,007
4,000 Revenue Anticipation Warrants,
Series 1994C, (CRE) 5.75 4/25/96 4,045
10,000 San Diego Unified School District TRAN,
Series 1994-1995A 4.25 6/30/95 10,013
16,000 San Luis Obispo County TRAN, Series 1994-1995 4.50 7/18/95 16,037
4,400 San Ramon Valley Unified School District TRAN,
Series 1994-1995 5.25 3/13/96 4,414
12,000 Sonoma County TRAN, Series 1994-1995 4.75 10/10/95 12,037
Colorado
8,750 Colorado Springs School District TAN,
District Number 11, Series 1994A 4.75 6/30/95 8,761
District of Columbia
5,000 GO, Series 1995A-3, (CRE) 6.25 9/30/95 5,033
Florida
9,600 Orange County School District RAN,
Series 1994B 3.75 4/06/95 9,601
5,000 Palm Beach County School District TAN,
Series 1994 4.75 9/13/95 5,015
Illinois
4,395 Metropolitan Fair and Exposition Auth. RB,
Series 1984, (CRE) 10.38 6/01/14(a) 4,570
Iowa
10,000 School Corporations Warrant Certificates,
Series 1994A, (CRE) 4.25 7/17/95 10,018
Massachusetts
4,045 Brockton BAN, (CRE) 4.35 6/23/95 4,050
Massachusetts Bay Transportation Auth. CP
Notes,
10,200 Series B, (CRE) 4.10 4/10/95 10,200
6,700 Series B, (CRE) 4.35 5/08/95 6,700
12,000 Massachusetts Bay Transportation Auth.
Notes, Series 1995A 5.50 3/01/96 12,091
10,511 Worcester BAN, Lot A, (CRE) 4.75 8/31/95 10,537
Minnesota
3,600 St. Paul Independent School District 625 Tax
Anticipation GO, Series 1995A 5.38 3/28/96 3,628
3,650 Westonka Independent School District 277 Tax
Anticipation GO, Series 1995, (CRE) 5.50 3/09/96 3,678
12,500 White Bear Lake Independent School District
624 Tax Anticipation GO, Series 1995A, (CRE)5.25 3/21/96 12,566
Missouri
9,600 Economic Development, Export, and
Infrastructure Program Notes,
Series 1994C, (CRE) 3.95 8/01/95 9,600
New Jersey
6,835 Bridgewater Township BAN 4.75 11/27/95 6,837
7,027 North Bergen Township BAN 5.75 1/26/96 7,062
9,646 Sussex County BAN GO 5.25 9/15/95 9,663
New York
5,304 Hempstead BAN, Series A 5.25 3/01/96 5,335
Suffolk County TAN,
5,800 Series 1994 II, (CRE) 4.50 9/14/95 5,811
10,000 Series 1995 I, (CRE) 5.25 8/15/95 10,035
12,500 Urban Development Corp. RB,
Series 1986B, (CRE) 8.00 1/01/06(a) 13,063
Ohio
5,950 Montgomery County GO, Second Renewal 1994 4.00 4/27/95 5,952
10,920 Mount Vernon Hospital RB, (CRE) 11.75 6/01/12(a) 11,390
5,515 Shaker Heights GO BAN 4.63 10/19/95 5,529
6,800 Univ. of Cincinnati BAN, Series K1 5.00 3/21/96 6,822
Oregon
6,000 Multnomah County School District Number 1J
TAN, Series 1994 3.75 6/29/95 6,002
Texas
6,400 Houston Independent School District TRAN,
Series 1994B 4.50 8/31/95 6,406
10,000 Houston TRAN, Series 1994 4.50 6/29/95 10,021
5,000 Houston Water and Sewer System CP Notes,
Series A 4.30 5/09/95 5,000
23,400 Public Finance Auth. GO CP Notes,
Series 1993A 4.35 6/06/95 23,400
24,900 TRAN, Series 1995 5.00 8/31/95 24,985
Utah
7,300 Davis County School District TAN, Series 1994 4.50 6/30/95 7,314
Virginia
2,000 Southeastern Public Service Auth. RB,
Series A, (CRE) 10.50 7/01/15(a) 2,074
-----------
Total fixed rate instruments (cost: $347,324) 347,324
-----------
Total investments (cost: $1,439,089) $1,439,089
===========
</TABLE>
Portfolio Summary By Industry
General Obligations 19.2%
Housing - Multi/Family 17.4
Electric Power 8.1
Hospitals 6.3
Education 5.9
Buildings 4.0
Nursing Care 3.6
Transportation - Miscellaneous 2.7
Housing - Single/Family 2.6
Hotel - Motel 2.5
Retirement Homes 2.2
Escrowed Securities 2.1
Community Service 1.9
Manufacturing - Diversified Industries 1.9
Finance - Municipal 1.8
Ports/Wharfs 1.3
Student Loan 1.3
Gas Utilities 1.1
Machinery - Diversified 1.1
Special Assessment/Tax/Fee 1.1
Entertainment 1.0
Oil - International 1.0
Other 8.7
------
Total 98.8%
======
Portfolio Summary By State
Alabama .4% Arizona 3.9% Arkansas 2.0%
California 11.6 Colorado 1.8 Connecticut .6
Delaware .9 District of Columbia .8 Florida 6.3
Georgia 5.9 Illinois 6.3 Indiana .5
Iowa 1.1 Kansas .9 Kentucky 2.4
Louisiana 2.1 Maryland 1.7 Massachusetts 3.0
Minnesota 2.8 Mississippi .3 Missouri 2.4
New Jersey 1.8 New York 5.8 North Carolina .6
Ohio 3.0 Oklahoma 1.7 Oregon .6
Pennsylvania 1.2 South Carolina 2.0 Tennessee 2.7
Texas 12.1 Utah 1.1 Virginia 6.7
Washington .7 West Virginia .4 Wisconsin .7
------
Total 98.8%
Notes to Portfolios of Investments
(In Thousands)
March 31, 1995
General Notes
Market values of securities are determined by procedures and practices
discussed in note 1 to the financial statements.
The cost of securities for federal income tax purposes is approximately the
same as that reported in the financial statements.
The percentages shown represent the percentage of the investments to net
assets.
Portfolio Description Abbreviations
BAN Bond Anticipation Note MFH Multi-Family Housing
COP Certificate of Participation PCRB Pollution Control
CP Commercial Paper Revenue Bond
CRE Credit Enhanced RAN Revenue Anticipation Note
GO General Obligation RB Revenue Bond
IDA Industrial Development RN Revenue Note
Authority/Agency TAN Tax Anticipation Note
IDC Industrial Development TRAN Tax Revenue
Corporation Anticipation Note
IDRB Industrial Development
Revenue Bond
Specific Notes
(a) Prerefunded to various dates prior to maturity at the call price.
(b) Zero Coupon security. Rate represents the effective yield at date of
purchase.
(c) At March 31, 1995, the cost of securities purchased on a delayed delivery
basis for the Long-Term, Intermediate-Term, and Tax Exempt Money Market
Funds was $25,014, $149, and $5,002, respectively.
(d) Rate changes periodically and is subject to a floor of 6% and a ceiling
of 12%.
(e) Illiquid security valued in good faith at fair value using methods
determined by the Manager under the general supervision of the Board of
Directors. At March 31, 1995, this security represented .3% of the
Long-Term Fund's net assets.
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
Statements of Operations
(In Thousands)
Year ended March 31, 1995
Tax Exempt
Long-Term Intermediate- Short-Term Money Market
Fund Term Fund Fund Fund
<S> <C> <C> <C> <C>
Net investment income:
Interest income $116,379 $90,790 $43,743 $51,021
Expenses (note 5):
Management fees 4,931 4,220 2,490 4,299
Transfer agent's fees 1,195 1,164 746 931
Custodian's fees 237 219 179 354
Postage 117 99 79 157
Shareholder reporting fees 46 43 38 91
Directors' fees 2 2 2 2
Registration fees 98 120 100 127
Audit fees 39 38 38 38
Legal fees 4 4 4 4
Other 51 45 32 51
--------- -------- --------- --------
Total expenses 6,720 5,954 3,708 6,054
--------- -------- --------- --------
Net investment income 109,659 84,836 40,035 44,967
--------- -------- --------- --------
Net realized and unrealized gain
(loss) on investments (note 4):
Net realized loss (62,334) (8,896) (3,175) -
Change in net unrealized
appreciation/depreciation 36,258 10,764 535 -
--------- -------- -------- --------
Net realized and
unrealized gain (loss) (26,076) 1,868 (2,640) -
---------- -------- --------- --------
Increase in net assets resulting
from operations $83,583 $86,704 $37,395 $44,967
========== ========= ========== =========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
(In Thousands)
Years ended March 31,
Long-Term Intermediate-
Fund Term Fund
1995 1994 1995 1994
<S> <C> <C> <C> <C>
From operations:
Net investment income $ 109,659 $ 113,439 $ 84,836 $ 83,357
Net realized gain (loss) on investments (62,334) 58,462 (8,896) 6,352
Change in net unrealized appreciation/depreciation of
investments 36,258 (119,583) 10,764 (48,714)
------------- -------------- --------- -------------
Increase in net assets resulting from operations 83,583 52,318 86,704 40,995
------------- -------------- --------- -------------
Distributions to shareholders from:
Net investment income (note 3) (107,798) (113,439) (84,836) (83,357)
------------- ------------- ---------- ----------
Distributions in excess of net investment income (note 3) - (1,861) - -
--------------- -------------- --------- ----------
Net realized gains (note 3) (12,042) (76,502) (3,178) (14,944)
--------------- --------------- ----------- ------------
From capital share transactions:
Shares sold 752,881 639,477 334,817 589,751
Shares issued for dividends reinvested 87,645 146,443 68,192 78,184
Shares redeemed (861,319) (697,625) (431,132) (425,605)
-------------- -------------- ------------ -------------
Increase (decrease) in net assets from
capital share transactions (20,793) 88,295 (28,123) 242,330
--------------- --------------- ------------- ------------
Net increase (decrease) in net assets (57,050) (51,189) (29,433) 185,024
Net assets:
Beginning of period 1,831,693 1,882,882 1,559,183 1,374,159
--------------- --------------- ------------- -------------
End of period $1,774,643 $1,831,693 $1,529,750 $1,559,183
================ ================ ============= =============
Change in shares outstanding:
Shares sold 59,286 45,006 27,070 45,080
Shares issued for dividends reinvested 6,859 10,375 5,523 5,997
Shares redeemed (67,925) (49,157) (35,144) (32,665)
--------------- -------------- ------------ ------------
Increase (decrease) in shares outstanding (1,780) 6,224 (2,551) 18,412
=============== =============== =========== ============
Authorized shares of $.01 par value 175,000 175,000 170,000 170,000
=============== =============== =========== ============
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets (cont.)
(In Thousands)
Years ended March 31,
Tax Exempt
Short-Term Money Market
Fund Fund
1995 1994 1995 1994
<S> <C> <C> <C> <C>
From operations:
Net investment income $ 40,035 $ 39,726 $ 44,967 $ 33,240
Net realized gain (loss) on investments (3,175) 2,759 - -
Change in net unrealized appreciation/depreciation of
investments 535 (17,522) - -
------------- -------------- --------- -------------
Increase in net assets resulting from operations 37,395 24,963 44,967 33,240
------------- -------------- --------- -------------
Distributions to shareholders from:
Net investment income (note 3) (40,035) (39,726) (44,967) (33,240)
-------------- -------------- ---------- ------------
Distributions in excess of net investment income (note 3) - - - -
--------------- -------------- ----------- ------------
Net realized gains (note 3) - - - -
--------------- --------------- ----------- ------------
From capital share transactions:
Shares sold 370,243 752,879 1,991,020 1,777,271
Shares issued for dividends reinvested 33,428 33,578 42,040 30,984
Shares redeemed (595,498) (638,252) (2,146,073) (1,739,593)
-------------- -------------- ------------ -------------
Increase (decrease) in net assets from
capital share transactions (191,827) 148,205 (113,013) 68,662
--------------- --------------- ------------- ------------
Net increase (decrease) in net assets (194,467) 133,442 (113,013) 68,662
Net assets
Beginning of period 995,624 862,182 1,569,760 1,501,098
--------------- --------------- ------------- -------------
End of period $ 801,157 $ 995,624 $1,456,747 $1,569,760
================ ================ ============= =============
Changes in shares outstanding:
Shares sold 35,503 70,576 1,991,020 1,777,271
Shares issued for dividends reinvested 3,205 3,151 42,040 30,984
Shares redeemed (57,164) (59,857) (2,146,073) (1,739,593)
--------------- -------------- ------------ ------------
Increase (decrease) in shares outstanding (18,456) 13,870 (113,013) 68,662
=============== =============== =========== ============
Authorized shares of $.01 par value 135,000 135,000 2,600,000 2,000,000
=============== =============== =========== ============
</TABLE>
See accompanying notes to financial statements.
Notes to Financial Statements
(In Thousands)
March 31, 1995
(1) Summary of Significant Accounting Policies
USAA TAX EXEMPT FUND, INC. (the Company), registered under the Investment
Company Act of 1940, is a diversified, open-end management investment company
incorporated under the laws of Maryland consisting of ten separate funds. The
information presented in this annual report pertains only to the Long-Term
Fund, Intermediate-Term Fund, Short-Term Fund, and Tax Exempt Money Market Fund
(the Funds).
A. Security valuation - Investments in the Long-Term, Intermediate-Term, and
Short-Term Funds are valued each business day by a pricing service (the
Service) approved by the Company's Board of Directors. The Service uses the
mean between quoted bid and asked prices or the last sale price to price
securities when, in the Service's judgement, these prices are readily available
and are representative of the securities' market values. For many securities,
such prices are not readily available. The Service generally prices these
securities based on methods which include consideration of yields or prices
of municipal securities of comparable quality, coupon, maturity and type,
indications as to values from dealers in securities, and general market
conditions. Securities which are not valued by the Service, and all other
assets, are valued in good faith at fair value using methods determined by
the Manager under the general supervision of the Board of Directors.
Securities purchased with maturities of 60 days or less and, pursuant to
Rule 2a-7 of the Securities and Exchange Commission, all securities in the
Tax Exempt Money Market Fund are stated at amortized cost which
approximates market value.
B. Federal taxes - Each Fund's policy is to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of its income to its shareholders. Therefore,
no federal income or excise tax provision is required.
C. Investments in securities - As is common in the industry, security
transactions are accounted for on the date the securities are purchased or sold
(trade date). Gain or loss from sales of investment securities is computed on
the identified cost basis. Interest income is recorded daily on the accrual
basis. Premiums and original issue discounts are amortized over the life of the
respective securities. Market discounts are not amortized. Any ordinary income
related to market discounts is recognized upon disposition of the bonds.
(2) Line of Credit
The Funds participate with other USAA funds in a joint $150 million short-term
revolving loan agreement (the Agreement) through January 15, 1996, for
temporary or emergency purposes, including the meeting of redemption requests
that might otherwise require the untimely disposition of securities. Subject to
availability under this Agreement, each Fund may borrow amounts not to
exceed 5% of the value of its total assets. All borrowings must be repaid
before additional investments are made, and the interest paid on such
borrowings will reduce income. Borrowings under this Agreement bear
interest at .125% over the Federal Funds Rate as published by the Federal
Reserve Bank of New York or at .125% over the London Interbank Offered
Rate. The Long-Term Fund had two borrowings under this Agreement during the
year ended March 31, 1995, incurring $1 in interest expense. The
Intermediate-Term, Short-Term, and Tax Exempt Money Market Funds had no
borrowings under the Agreement during the year.
(3) Distributions
Net investment income is accrued daily as dividends and distributed to
shareholders monthly. All net investment income available for distribution
was distributed at March 31, 1995. Certain book-to-tax timing differences
for the Long-Term Fund are reflected as excess distributions in the 1994
Statement of Changes in Net Assets. These distributions did not constitute
a return of capital.
Distributions of realized gains from security transactions not offset by
capital losses are generally made in the succeeding fiscal year. At March
31, 1995, the Long-Term, Intermediate-Term, and Short-Term Funds had
capital loss carryovers of approximately $62,355, $8,901, and $3,605,
respectively, which will expire in or before 2004. It is unlikely that the
Board of Directors of the Company will authorize a distribution of capital
gains realized in the future until the capital loss carryovers have been
utilized or expire.
(4) Investment Transactions
Purchases and sales/maturities of securities, excluding short-term securities,
for the year ended March 31, 1995, were as follows:
Long-Term Intermediate- Short-Term
Fund Term Fund Fund
Purchases $ 2,848,954 $ 1,080,464 $ 902,792
Sales $ 2,866,867 $ 1,144,260 $ 1,127,541
Purchases and sales/maturities of securities for the year ended March 31,
1995, for the Tax Exempt Money Market Fund were $4,396,541 and $4,519,382,
respectively.
Gross unrealized appreciation and depreciation of investments at March 31,
1995, was as follows:
Long-Term Intermediate- Short-Term
Fund Term Fund Fund
Appreciation $ 77,461 $ 42,905 $ 4,901
Depreciation (15,403) (16,141) (6,517)
------------- ------------- ------------
Net $ 62,058 $ 26,764 $ (1,616)
============= ============= ============
(5) Transactions with Manager
A. Management fees - The investment policy of the Funds and the management
of the Funds' portfolios is carried out by USAA Investment Management
Company (the Manager). Management fees are computed at .28% of the average
annual net assets of each Fund.
B. Transfer agent's fees - USAA Transfer Agency Company, d/b/a USAA
Shareholder Account Services, an affiliate of the Manager, provides
transfer agent services to the Company. Shareholder accounting service fees
are based on an annual charge per shareholder account plus out-of-pocket
expenses.
C. Underwriting agreement - The Company has an agreement with the Manager
for exclusive underwriting and distribution of the Funds' shares on a
continuing best efforts basis. The agreement provides that the Manager will
receive no fee or other remuneration for such services.
(6) Transactions with Affiliates
USAA Investment Management Company is wholly owned by United Services
Automobile Association (the Association), a large, diversified financial
services institution.
At March 31, 1995, the Association and its affiliates owned 3,464 shares
(2.8%) of the Intermediate-Term Fund and 5,715 shares (.4%) of the Tax
Exempt Money Market Fund.
Notes to Financial Statements (continued)
March 31, 1995
<TABLE>
<CAPTION>
(7) Financial Highlights
Per share operating performance for a share outstanding throughout each
period is as follows:
Net Asset Net Realized Distributions Net Asset
Value At Net and from Net Distributions Value at Net Assets
Beginning Investment Unrealized Investment of Realized End Total At End
Fiscal Year Ended of Period Income Gain (Loss) Income Capital Gains Of Period Return Of Period
($) ($) ($) ($) ($) ($) (%) ($000)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long-Term Fund:
March 31,
1991 13.01 .94 .12 (.94) - 13.13 8.46 1,355,321
1992 13.13 .92 .41 (.92) - 13.54 10.39 1,638,848
1993 13.54 .88 .75 (.88) (.08) 14.21 12.46 1,882,882
1994 14.21 .81 (.44) (.82)* (.56) 13.20 2.36 1,831,693
1995 13.20 .79 (.16) (.78) (.09) 12.96 5.07 1,774,643
Intermediate-Term Fund:
March 31,
1991 11.87 .82 .13 (.82) - 12.00 8.30 575,770
1992 12.00 .79 .29 (.79) - 12.29 9.24 893,874
1993 12.29 .74 .61 (.74) - 12.90 11.29 1,374,159
1994 12.90 .69 (.29) (.69) (.13) 12.48 3.06 1,559,183
1995 12.48 .69 .05 (.69) (.03) 12.50 6.16 1,529,750
Short-Term Fund:
March 31,
1991 10.39 .67 (.04) (.67) - 10.35 6.27 423,914
1992 10.35 .59 .13 (.59) - 10.48 7.09 680,075
1993 10.48 .50 .15 (.50) - 10.63 6.37 862,182
1994 10.63 .45 (.15) (.45) - 10.48 2.87 995,624
1995 10.48 .47 (.01) (.47) - 10.47 4.51 801,157
Tax Exempt Money Market Fund:
March 31,
1991 1.00 .06 - (.06) - 1.00 5.94 1,508,862
1992 1.00 .04 - (.04) - 1.00 4.30 1,483,554
1993 1.00 .03 - (.03) - 1.00 2.89 1,501,098
1994 1.00 .02 - (.02) - 1.00 2.31 1,569,760
1995 1.00 .03 - (.03) - 1.00 2.98 1,456,747
</TABLE>
Ratio of Net
Ratio of Investment
Expenses Income
to Average to Average Portfolio
Fiscal Year Ended Net Assets Net Assets Turnover
(%) (%) (%)
LONG-TERM FUND:
March 31,
1991 .40 7.22 91.41
1992 .40 6.83 76.28
1993 .39 6.35 88.27
1994 .38 5.69 109.28
1995 .38 6.23 163.38
INTERMEDIATE-TERM FUND:
March 31,
1991 .43 6.91 66.26
1992 .44 6.45 66.57
1993 .42 5.85 74.02
1994 .40 5.30 69.45
1995 .40 5.63 72.00
SHORT-TERM FUND:
March 31,
1991 .50 6.48 96.10
1992 .48 5.59 107.35
1993 .43 4.75 138.20
1994 .43 4.25 101.67
1995 .42 4.50 102.93
TAX EXEMPT MONEY MARKET FUND:
March 31,
1991 .40 5.76 -
1992 .39 4.21 -
1993 .40 2.85 -
1994 .40 2.29 -
1995 .39 2.93 -
*includes $.01 of excess distributions (note 3).
