[LOGO] FEDERATED INVESTORS
Since 1955
Tax-Free
Instruments
Trust
13th Annual Report
March 31, 1996
Established 1981
MONEY MARKET
President's Message
------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the 13th Annual Report to Shareholders for Tax-Free
Instruments Trust for the 12-month period from April 1, 1995, through March 31,
1996. The report begins with a discussion with the fund's portfolio manager,
Jeff A. Kozemchak, Vice President, Federated Management, and follows with a
complete list of the fund's municipal money market holdings and its financial
statements. In addition, financial highlights tables are included for
Institutional Service Shares and Investment Shares.
In Tax-Free Instruments Trust, your ready cash is pursuing daily income free
from federal regular income tax.* And, you have the comfort of knowing that the
fund is managed to keep the value of your investment at a stable $1 per
share.** You also have daily access to your invested cash.
On March 31, 1996, the fund's portfolio was highly diversified among short-term
money market securities issued by municipalities across the United States.
Dividends paid to shareholders during the period totaled $0.03 per Investment
Share and $0.03 per Institutional Service Share. Net assets stood at $1.8
billion on March 31, 1996.
Thank you for your participation in the daily, tax-free earning power of
Tax-Free Instruments Trust. We'll continue to keep you up to date on your
investment, and, as always, we welcome your comments and suggestions.
Sincerely,
Glen R. Johnson
President
May 15, 1996
* Income may be subject to the federal alternative minimum tax and state and
local taxes.
** Although money market funds seek to maintain a stable net asset value of
$1.00, there is no assurance that they will be able to do so. An
investment in this fund is neither insured nor guaranteed by the U.S.
government.
Investment Review
-------------------------------------------------------------------------------
Jeff A. Kozemchak, CFA
Vice President
Federated Management
Q Jeff, would you comment on the interest rate environment during the 12-month
reporting period?
A In the second quarter of 1995, the Federal Reserve Board's (the "Fed") seven
increases in the Federal Funds target rate over the prior year appeared to be
taking hold on the economy and the pace of economic growth slowed down. As a
result, market sentiment shifted away from expectations of an easing to a
tightening. The front end of the yield curve flattened significantly in
anticipation of a change in direction of monetary policy. The market proved to
be right, as in early July 1995, the Fed modestly cut the Federal Funds target
rate from 6.00% to 5.75%. After holding steady for a number of months, the Fed
again eased monetary policy in late December by 25 basis points, and again in
late January by 25 basis points, moving the target rate from 5.75% to 5.25%.
For the July and December moves, the Fed cited a better-than-expected inflation
outlook as the impetus behind the easing moves, although a sluggish
manufacturing sector and lackluster consumer spending was thought to have had
an influence. In January, the Fed appeared swayed by the dampening effects of
high debt loads and employment uncertainty on consumer consumption along with
sluggish export growth.
February and March of 1996, however, brought a sharp change in the market
expectations regarding the potential for a rebound in economic growth and the
prospects for further Fed easing moves. Stronger-than-expected employment
growth, combined with increased fears of a revival in inflation, led market
participants to discount the potential for further Fed cuts in the target rate.
The Treasury yield curve steepened considerably over this two-month period with
six-month and one-year Treasury bill yields increasing 24 and 49 basis points,
respectively.
Notwithstanding the recent increases in Treasury bill yields, over the 12-month
period, short-term interest rates declined considerably as the market
anticipated the easing moves by the Fed. The yield on the three-month Treasury
bill fell 70 basis points over the period, from 5.85% to 5.15%. Yields on the
six-month and one-year Treasury bills declined even more, by 92 and 111 basis
points to 5.20% and 5.38%, respectively.
-------------------------------------------------------------------------------
Q How has the fund's yield responded to this rate environment?
A The fund's yield is affected by Fed policy moves (interest rate cuts) as well
as supply and demand imbalances unique to the municipal money markets. Because
of these imbalances, on a weekly basis, the fund's yield will experience more
upward and downward movement than Treasury yields and taxable money fund
yields. The 7-day net yield of the fund's Institutional Service Shares on March
31, 1996, was 3.03% compared to 3.63% a year earlier.* Over the 1-year period,
the total return of the shares was 3.47%, which corresponds to an equivalent
taxable return of 5.75% for those investors at the highest federal tax rate.*
For the Investment Shares, the 7-day net yield on March 31, 1996, was 2.88%
compared to 3.48% a year ago.* Over the 1-year period, the total return of the
shares was 3.32%, which is equivalent to a taxable return of 5.50% for
investors subject to the highest federal tax rate.*
Q In light of these market conditions, what was your strategy?
A When the period started, the fund's average maturity was 54 days, which is
neutral. From there, we let it roll down in April and May of 1995 because of a
lack of availability of fixed-rate notes. By early June, the average maturity
was 40 days. In June and July, the annual summer borrowing season began, and
with our expectation of declining interest rates, we extended the average
maturity to 68 days by the end of July. As interest rates continued to fall
during the second half of the year, we kept the average maturity in a defined
band between 50 and 60 days. Our goal was to continue to capture higher yields
available from longer term fixed-rate securities as opportunities arose, while
still preserving portfolio responsiveness to changing market conditions.
* Performance quoted represents past performance and is not indicative of future
results. Yield and total return will vary.
-------------------------------------------------------------------------------
Q What is your outlook for rates?
A Despite the recent increases in short-term and long-term interest rates, we
still believe that the underlying economic fundamentals of slow growth and low
inflation are still in place. If long-term interest rates continue to remain
high, the housing sector could suffer, creating a significant drag on the
economy. Also, failure to achieve a balanced budget will continue to exert
upward pressure on long-term rates. We look for the Fed to remain on hold for
the next several months until a clearer picture of economic strength emerges.
Nevertheless, the bias is toward a lower Federal Funds target rate,
particularly in an election year. Reflecting this outlook, we will continue to
look for value in longer maturity fixed-rate notes while maintaining portfolio
flexibility to take advantage of market conditions, as well as supply and
demand technicals that will heavily influence our market in June and July of
this year.
Tax-Free Instruments Trust
Portfolio of Investments
--------------------------------------------------------------------------------
March 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.8%
----------------------------------------------------------------------------------
ARIZONA--1.1%
-------------------------------------------------------------------
$ 545,200 Gilbert, AZ IDA Weekly VRDNs (Foxworth-Galbraith Lumber Co.)/(Bank
One, Arizona N.A. LOC) P-1 $ 545,200
-------------------------------------------------------------------
9,725,000 Maricopa County, AZ, IDA (Series 1984) Weekly VRDNs (Gannett Co.,
Inc.) P-1 9,725,000
-------------------------------------------------------------------
1,625,000 Maricopa County, AZ, IDA Weekly VRDNs (Chaparral City Water
Services)/(Bank One, Arizona N.A. LOC) P-1 1,625,000
-------------------------------------------------------------------
1,745,000 Pima County, AZ IDA Weekly VRDNs (A & P Investments)/(Bank One,
Arizona N.A. LOC) P-1 1,745,000
-------------------------------------------------------------------
5,203,000 Pima County, AZ IDA Weekly VRDNs (BJR Investments, Inc.)/(Bank One,
Arizona N.A. LOC) P-1 5,203,000
------------------------------------------------------------------- ----------------
Total 18,843,200
------------------------------------------------------------------- ----------------
ARKANSAS--0.1%
-------------------------------------------------------------------
2,500,000 Pocahontas, AR , IDRB (Series 1995) Weekly VRDNs (MacLean ESNA L.P.
Project)/(Northern Trust Co., Chicago, IL LOC) A-1+ 2,500,000
------------------------------------------------------------------- ----------------
CALIFORNIA--12.1%
-------------------------------------------------------------------
14,000,000 California HFA, Home Mortgage Revenue Bonds (1995 Series E), 3.50%
TOBs (Bayerische Landesbank Girozentrale GIC), Mandatory Tender
2/1/1997 A-1+ 14,000,000
-------------------------------------------------------------------
3,400,000 California PCFA, (Series 1991) Weekly VRDNs (North County, CA
Recycling & Energy Recovery)/(Union Bank of Switzerland, Zurich
LOC) A-1+ 3,400,000
-------------------------------------------------------------------
39,985,000 (a)California Public Capital Improvements Financing Authority,
Trust Receipts (Series 1996 FR-3) Weekly VRDNs (MBIA Insurance
Corporation INS)/(Bank of New York, New York LIQ) SP-1 39,985,000
-------------------------------------------------------------------
19,000,000 California School Cash Reserve Program Authority, (Series 1995 A),
4.75% TRANs (MBIA Insurance Corporation INS), 7/3/1996 SP-1+ 19,046,505
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
CALIFORNIA--CONTINUED
-------------------------------------------------------------------
$ 46,200,000 California State, Revenue Anticipation Warrants (Series C), 5.75%
RANs (Bank of America NT and SA, San Francisco, Bank of Nova
Scotia, Toronto, Banque Nationale de Paris, Canadian Imperial Bank
of Commerce, Toronto, Chemical Bank, New York, Citibank NA, New
York, Credit Suisse, Zurich, Morgan Guaranty Trust Co., New York,
National Westminster Bank, PLC, London, Societe Generale, Paris,
Sumitomo Bank Ltd., Osaka, Swiss Bank Corp., Basle,
Toronto-Dominion Bank and Westdeutsche Landesbank Girozentrale
LOCs), 4/25/1996 SP-1 $ 46,222,924
-------------------------------------------------------------------
11,000,000 Kern County, CA Board of Education, 4.50% TRANs,
6/28/1996 SP-1+ 11,013,994
-------------------------------------------------------------------
2,000,000 Los Angeles County, CA Metropolitan Transportation Authority,Series
A, 3.25% CP (ABN AMRO Bank N.V., Amsterdam, Bank of California
N.A., Banque Nationale de Paris, Canadian Imperial Bank of
Commerce, Toronto and National Westminster Bank, PLC, London LOCs),
Mandatory Tender 5/20/1996 A-1 2,000,000
-------------------------------------------------------------------
6,000,000 Los Angeles County, CA Metropolitan Transportation Authority,
General Revenue Bonds, (Series 1995-A) Weekly VRDNs (Union Station
Gateway Project)/(FSA INS)/(Societe Generale, Paris LIQ) A-1+ 6,000,000
-------------------------------------------------------------------
10,000,000 Los Angeles County, CA Unified School District, 4.50% TRANs,
7/3/1996 SP-1+ 10,019,596
-------------------------------------------------------------------
18,100,000 Los Angeles County, CA, 4.50% TRANs (Bank of America NT and SA, San
Francisco, Credit Suisse, Zurich, Morgan Guaranty Trust Co., New
York, Swiss Bank Corp., Basle, Union Bank of Switzerland, Zurich
and Westdeutsche Landesbank Girozentrale LOCs),
7/1/1996 SP-1 18,145,498
-------------------------------------------------------------------
11,200,000 Moreno Valley Unified School District, CA, 4.50% TRANs, 7/5/1996 MIG1 11,219,589
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
CALIFORNIA--CONTINUED
-------------------------------------------------------------------
$ 8,200,000 Orange County, CA IDA, (Series 1991A) Weekly VRDNs (The
Lakes)/(Citibank NA, New York LOC) A-1 $ 8,200,000
-------------------------------------------------------------------
6,000,000 Orange County, CA Local Transportation Authority, Sales Tax Revenue
Notes, 3.45% CP (Industrial Bank of Japan Ltd., Tokyo LOC),
Mandatory Tender 5/22/1996 A-1 6,000,000
-------------------------------------------------------------------
12,000,000 Paramount Unified School District, CA, 4.50% TRANs,
7/5/1996 MIG1 12,020,988
-------------------------------------------------------------------
3,000,000 Riverside County, CA, (Series A) Weekly VRDNs (Riverside, CA Public
Facility Finance)/(Commerzbank AG, Frankfurt and National
Westminster Bank, PLC, London LOCs) MIG1 3,000,000
-------------------------------------------------------------------
4,000,000 Victor Valley Community College District, CA, 4.00% TRANs (Bank of
California N.A. LOC), 1/17/1997 SP-1 4,012,278
------------------------------------------------------------------- ----------------
Total 214,286,372
------------------------------------------------------------------- ----------------
COLORADO--0.5%
-------------------------------------------------------------------
4,000,000 Denver, CO City & County Airport Authority, (Series 1991-B) Weekly
VRDNs (Sanwa Bank Ltd, Osaka LOC) A-1 4,000,000
-------------------------------------------------------------------
5,365,000 (a)Thornton, CO, Multifamily Housing Refunding Revenue Bonds (1989
Series A) Weekly VRDNs (Quail Ridge Project)/(General Electric
Capital Corp. LOC) A-1+ 5,365,000
------------------------------------------------------------------- ----------------
Total 9,365,000
------------------------------------------------------------------- ----------------
CONNECTICUT--0.6%
-------------------------------------------------------------------
4,966,585 (a)Clipper Connecticut Tax Exempt Trust, (Series 1994-1) Weekly
VRDNs (State Street Bank and Trust Co. LIQ) VMIG1 4,966,585
-------------------------------------------------------------------
4,900,000 Connecticut Development Health Care Facilities Weekly VRDNs
(Independence Living)/(Chemical Bank, New York LOC) VMIG1 4,900,000
-------------------------------------------------------------------
500,000 Connecticut State Transportation Infrastructure Authority Weekly
VRDNs (Connecticut State)/ (Commerzbank AG, Frankfurt LOC) A-1 500,000
------------------------------------------------------------------- ----------------
Total 10,366,585
------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
FLORIDA--2.1%
-------------------------------------------------------------------
$ 6,895,000 Florida State Board of Education Administration, (CR 48)/(Series
1989A), 3.60% TOBs (Citibank NA, New York LIQ), Optional Tender
6/1/1996 NR(2) $ 6,895,000
-------------------------------------------------------------------
7,340,000 Florida State Board of Education Administration, (CR 48D)/(Series
1989A), 3.60% TOBs (Citibank NA, New York LIQ), Optional Tender
6/1/1996 NR(2) 7,340,000
-------------------------------------------------------------------
3,615,000 Florida State Board of Education Administration, (CR 49)/(Series
1989A), 3.60% TOBs (Citibank NA, New York LIQ), Optional Tender
6/1/1996 NR(2) 3,615,000
-------------------------------------------------------------------
3,910,000 Florida State Board of Education Administration, (CR55), (Series
1989A), 3.60% TOBs (Citibank NA, New York LIQ), Optional Tender
6/1/1996 NR(2) 3,910,000
-------------------------------------------------------------------
1,000,000 Hillsborough County, FL IDA, (Series 1988) Weekly VRDNs (Florida
Steel Corp.)/(Bankers Trust Co., New York LOC) P-1 1,000,000
-------------------------------------------------------------------
4,500,000 Martin County, FL School District, District Operating Millage
(Series 1995), 4.25% TANs, 6/8/1996 NR 4,500,780
-------------------------------------------------------------------
9,400,000 Pinellas County, FL Health Facility Authority Daily VRDNs (Chemical
Bank, New York LOC) A-1 9,400,000
------------------------------------------------------------------- ----------------
Total 36,660,780
------------------------------------------------------------------- ----------------
GEORGIA--5.3%
-------------------------------------------------------------------
6,200,000 Atlanta, GA, Urban Residential Finance Authority, Multifamily
Rental Housing Revenue Refunding Bonds (Series 1988A), 3.75% TOBs
(West Paces Club Towers Project)/(Sanwa Bank Ltd, Osaka LOC),
Optional Tender 5/1/1996 A-1 6,200,000
-------------------------------------------------------------------
3,000,000 Cherokee County, GA Development Authority Weekly VRDNs (Seaboard
Farms of Canton, Inc. Project)/(Bank of Nova Scotia, Toronto LOC) AA- 3,000,000
-------------------------------------------------------------------
3,615,000 Cobb County, GA IDA Weekly VRDNs (Atlanta RDC Co.)/(First Union
National Bank, Charlotte, N.C. LOC) P-1 3,615,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
GEORGIA--CONTINUED
-------------------------------------------------------------------
$ 6,300,000 Columbus, GA IDA Industrial & Port Development Commission, (Series
1992) Weekly VRDNs (Maine Street Village Partnership)/(Columbus
Bank and Trust Co., GA LOC) A-1 $ 6,300,000
-------------------------------------------------------------------
2,679,000 Douglas County, GA, 3.74% TANs, 12/30/1996 NR 2,681,714
-------------------------------------------------------------------
5,000,000 Floyd County, GA, (Series 1996), 3.49% TANs, 12/31/1996 NR 5,003,251
-------------------------------------------------------------------
4,400,000 Franklin County, GA Industrial Building Authority, (Series 1995)
Weekly VRDNs (Bosal Industries, Inc.)/ (ABN AMRO Bank N.V.,
Amsterdam LOC) A-1+ 4,400,000
-------------------------------------------------------------------
2,200,000 Fulton County, GA IDA Weekly VRDNs (Automatic Data Processing,
Inc.) P-1 2,200,000
-------------------------------------------------------------------
4,000,000 Fulton County, GA IDA Weekly VRDNs (C.K.S. Packaging,
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 4,000,000
-------------------------------------------------------------------
2,997,858 Georgia Municipal Association Weekly VRDNs (Credit Suisse, Zurich
LIQ)/(MBIA Insurance Corporation LOC) A-1+ 2,997,858
-------------------------------------------------------------------
4,430,000 Georgia State HFA, (Series 1987B), 3.40% TOBs (Citibank NA, New
York LIQ), Optional Tender 6/1/1996 NR(2) 4,430,000
-------------------------------------------------------------------
2,775,000 Glynn County, GA, 3.60% TANs, 12/31/1996 NR 2,779,031
-------------------------------------------------------------------
800,000 Gwinnett County, GA IDA Daily VRDNs (Volvo)/(Union Bank of
Switzerland, Zurich LOC) P-1 800,000
-------------------------------------------------------------------
1,280,000 Macon-Bibb County, GA Urban Development Authority, Refunding
Revenue Bonds (Series 1995) Weekly VRDNs (Macon Hotel Investors
Project)/(NBD Bank, Michigan LOC) AA 1,280,000
-------------------------------------------------------------------
32,250,000 Municipal Electric Authority of Georgia, (Series 1994D), 3.25% CP
(ABN AMRO Bank N.V., Amsterdam LOC), Mandatory Tender 5/14/1996 A-1+ 32,250,000
-------------------------------------------------------------------
2,500,000 Rockdale County, GA Development Authority, (Series 1995) Weekly
VRDNs (Great Southern Wood Preserving Co.)/(SunTrust Bank, Central
Florida LOC) P-1 2,500,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
GEORGIA--CONTINUED
-------------------------------------------------------------------
$ 2,500,000 Rockdale County, GA Hospital Authority, Revenue Anticipation
Certificates (Series 1994) Weekly VRDNs (Rockdale
Hospital)/(SunTrust Bank, Atlanta LOC) VMIG1 $ 2,500,000
-------------------------------------------------------------------
4,900,000 Savannah, GA EDA, (Series 1995A) Weekly VRDNs (Home Depot, Inc.) A-1 4,900,000
-------------------------------------------------------------------
2,500,000 Screven County, GA IDA, (Series 1995) Weekly VRDNs (Sylvania Yarn
Systems, Inc. Project)/(SunTrust Bank, Atlanta LOC) Aa3 2,500,000
------------------------------------------------------------------- ----------------
Total 94,336,854
------------------------------------------------------------------- ----------------
ILLINOIS--6.1%
-------------------------------------------------------------------
1,550,000 Champaign, IL, IDRB Weekly VRDNs (Christie Clinic)/ (National City
Bank, Indiana LOC) A-1 1,550,000
-------------------------------------------------------------------
1,033,000 Illinois Development Finance Authority Weekly VRDNs (Newlywed
Food)/(Mellon Bank NA, Pittsburgh LOC) A-1 1,033,000
-------------------------------------------------------------------
3,800,000 Illinois Development Finance Authority, Adjustable Rate IDRB
(Series 1995) Weekly VRDNs (Dickson Weatherproof Nail Co.
Project)/(Bank One, Chicago LOC) A-1 3,800,000
-------------------------------------------------------------------
30,000,000 Illinois Development Finance Authority, Var/Fixed Rate Demand
Revenue Bonds (Series 1994) Weekly VRDNs (Chicago Symphony
Orchestra Project)/(Northern Trust Co., Chicago, IL and Sanwa Bank
Ltd, Osaka LOCs) A-1+ 30,000,000
-------------------------------------------------------------------
2,400,000 Illinois Development Finance Authority, Variable Rate EDRB (Series
1995) Weekly VRDNs (Evapco, Inc. Project)/(Nationsbank of Maryland,
N.A. LOC) A-1 2,400,000
-------------------------------------------------------------------
7,500,000 Illinois Educational Facilities Authority, 3.35% CP (Field Museum
of Natural History)/(Sanwa Bank Ltd, Osaka LOC), Mandatory Tender
5/15/1996 A-1 7,500,000
-------------------------------------------------------------------
40,000,000 Illinois Health Facilities Authority, Variable Rate Demand Revenue
Bonds (Series 1985B) Weekly VRDNs (OSF Health Care Systems)/(Bank
of America Illinois and Rabobank Nederland, Utrecht LIQs) VMIG1 40,000,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
ILLINOIS--CONTINUED
-------------------------------------------------------------------
$ 600,000 Lisle (Village of), IL, Multi-Family Housing Mortgage Revenue
Bonds, (1985 Series A) Weekly VRDNs (Four Lakes Project)/(Chemical
Bank, New York LOC) A-1 $ 600,000
-------------------------------------------------------------------
2,200,000 Martinsville, IL, Adjustable Rate IDRB (Series 1995) Weekly VRDNs
(PAP-R Products Company Project)/ (Bank One, Chicago LOC) P-1 2,200,000
-------------------------------------------------------------------
4,500,000 Mendota, IL, Variable Rate Demand IDRB (Series 1995) Weekly VRDNs
(Minnesota Diversified Products, Inc. Project)/(Norwest Bank
Minnesota, Minneapolis LOC) A-1+ 4,500,000
-------------------------------------------------------------------
1,900,000 Naperville, IL, Economic Development Revenue Refunding Bonds
(Series 1994) Weekly VRDNs (Independence Village Associates, Ltd
Project)/(First Bank NA, Minneapolis LOC) P-1 1,900,000
-------------------------------------------------------------------
3,000,000 Oakbrook Terrace, IL, IDR (Series 1993) Weekly VRDNs (La Quinta
Motor Inns, Inc.)/(Nationsbank of Texas, N.A. LOC) P-1 3,000,000
-------------------------------------------------------------------
2,550,000 Rockford, IL, EDRB, 4.40% TOBs (Independence Village of
Rockford)/(Banque Paribas, Paris LOC), Optional Tender 12/1/1996 A-1 2,550,000
-------------------------------------------------------------------
7,750,000 Winnebago & Boone County, IL, TANs, 4.35% TANs (School District
Number 205)/(FSA INS), 10/30/1996 AAA 7,802,941
------------------------------------------------------------------- ----------------
Total 108,835,941
------------------------------------------------------------------- ----------------
INDIANA--1.5%
-------------------------------------------------------------------
2,200,000 Bluffton, IN, Economic Development Refunding Revenue Bonds Weekly
VRDNs (Blount, Inc.)/(Morgan Guaranty Trust Co., New York LOC) P-1 2,200,000
-------------------------------------------------------------------
3,330,000 Hamilton County, IN, Variable Rate Demand EDRB (Series 1995) Weekly
VRDNs (Fabcon L.L.C. Project)/ (Norwest Bank Minnesota, Minneapolis
LOC) P-1 3,330,000
-------------------------------------------------------------------
5,860,000 Huntington County, IN Community School Corp., 3.50% TANs,
12/31/1996 NR 5,864,265
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
INDIANA--CONTINUED
-------------------------------------------------------------------
$ 2,480,000 Kendallville, IN, IDRB (Series 1995) Weekly VRDNs (Rivnut Real
Estate, Ltd. Project)/(National City, Northeast LOC) P-1 $ 2,480,000
-------------------------------------------------------------------
5,000,000 Muncie, IN Community Schools, 3.90% TANs,
12/31/1996 NR 5,010,865
-------------------------------------------------------------------
6,970,000 Richmond, IN EDA Weekly VRDNs (Gannett Co., Inc.) P-1 6,970,000
------------------------------------------------------------------- ----------------
Total 25,855,130
------------------------------------------------------------------- ----------------
IOWA--0.5%
-------------------------------------------------------------------
5,500,000 Iowa Finance Authority, (Series 1996) Weekly VRDNs (Wittern Realty,
Inc. Project)/(Norwest Bank Minnesota, Minneapolis and Norwest Bank
Minnesota, Minneapolis LOCs) P-1 5,500,000
-------------------------------------------------------------------
3,000,000 Marshalltown Community School District, IA, (Series 1995), 4.375%
RANs, 6/28/1996 NR 3,002,249
------------------------------------------------------------------- ----------------
Total 8,502,249
------------------------------------------------------------------- ----------------
KANSAS--0.5%
-------------------------------------------------------------------
6,000,000 Kansas Development Finance Authority, Adjustable Rate Multifamily
Housing Revenue Bonds (Series 1995) Weekly VRDNs (First Kansas
State Partnership, L.P.)/ (Boatmen's National Bank of St. Louis
LOC) VMIG1 6,000,000
-------------------------------------------------------------------
2,000,000 Olathe, KS, Industrial Revenue Bonds (Series 1995) Weekly VRDNs
(Garmin International, Inc. Project)/ (Boatmen's National Bank of
St. Louis LOC) A-1 2,000,000
------------------------------------------------------------------- ----------------
Total 8,000,000
------------------------------------------------------------------- ----------------
KENTUCKY--5.2%
-------------------------------------------------------------------
5,485,000 Clark County, KY, (Series J-1), 3.70% TOBs (East Kentucky Power
Cooperative, Inc.)/(National Rural Utilities Cooperative Finance
Corp. GTD), Optional Tender 4/15/1996 A-1+ 5,481,435
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
KENTUCKY--CONTINUED
-------------------------------------------------------------------
$ 19,350,000 Clark County, KY, (Series J2), 3.70% TOBs (East Kentucky Power
Cooperative, Inc.)/(National Rural Utilities Cooperative Finance
Corp. GTD), Optional Tender 4/15/1996 A-1+ $ 19,337,422
-------------------------------------------------------------------
5,000,000 Clark County, KY, Adjustable Rate Industrial Building Revenue
Refunding Bonds (Series 1995) Weekly VRDNs (International
Processing Corp)/(Bank One, Lexington, NA LOC) P-1 5,000,000
-------------------------------------------------------------------
20,450,000 Daviess County, KY, Hospital Revenue Authority Weekly VRDNs
(Owensboro Daviess Hospital)/ (Sumitomo Bank Ltd., Osaka LOC) P-1 20,450,000
-------------------------------------------------------------------
5,740,000 Henderson County, KY, Solid Waste Disposal (Series 1996) Weekly
VRDNs (Audubon Metals LLC Project)/ (Harris Trust & Savings Bank,
Chicago LOC) P-1 5,740,000
-------------------------------------------------------------------
2,060,000 Jefferson County, KY, Adjustable Rate Industrial Building Revenue
Bonds (Series 1995) Weekly VRDNs (Derby Industries, Inc.
Project)/(Liberty National Bank & Trust Co. LOC) P-1 2,060,000
-------------------------------------------------------------------
31,500,000 Kentucky Pollution Abatement & Water Resource Finance Authority
Daily VRDNs (Toyota Motor Credit Corp.) A-1+ 31,500,000
-------------------------------------------------------------------
1,800,000 Owensboro, KY, Limited Obligation Revenue Bonds, 3.45% TOBs (Dart
Polymers)/(NBD Bank, Michigan LOC), Optional Tender 6/1/1996 P-1 1,800,000
------------------------------------------------------------------- ----------------
Total 91,368,857
------------------------------------------------------------------- ----------------
MAINE--0.4%
-------------------------------------------------------------------
5,000,000 Cumberland County, ME, 3.50% TANs, 12/31/1996 NR 5,002,531
-------------------------------------------------------------------
2,250,000 Gardiner, ME IDB Weekly VRDNs (Associated Grocers)/ (Westpac
Banking, Corp., Sydney LOC) P-1 2,250,000
------------------------------------------------------------------- ----------------
Total 7,252,531
------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
MARYLAND--0.8%
-------------------------------------------------------------------
$ 1,300,000 Maryland Health & Higher Educational Facilities Authority, (Series
1992A) Weekly VRDNs (Carroll County, MD General
Hospital)/(Nationsbank of Maryland, N.A. LOC) P-1 $ 1,300,000
-------------------------------------------------------------------
1,965,000 Maryland State IDFA, (Series 1991) Weekly VRDNs (Maryland Academy
of Sciences Facility)/(Nationsbank, N.A. (North Carolina) LOC) VMIG1 1,965,000
-------------------------------------------------------------------
1,900,000 Maryland State IDFA, Economic Development Revenue Refunding Bonds
(Series 1994) Weekly VRDNs (Johnson Controls, Inc.) VMIG1 1,900,000
-------------------------------------------------------------------
9,000,000 Montgomery County, MD Housing Opportunities Commission, Multifamily
Housing Revenue Bonds (1995 Series B), 3.90% BANs, 11/14/1996 MIG1 9,000,000
------------------------------------------------------------------- ----------------
Total 14,165,000
------------------------------------------------------------------- ----------------
MASSACHUSETTS--2.1%
-------------------------------------------------------------------
11,067,700 (a)Clipper, MA Tax Exempt Trust Weekly VRDNs (State Street Bank and
Trust Co. LIQ) VMIG1 11,067,700
-------------------------------------------------------------------
1,000,000 Massachusetts HEFA, (Series E) Daily VRDNs (Capital Asset
Program)/(First National Bank of Chicago LIQ)/ (Sanwa Bank Ltd,
Osaka LOC) VMIG1 1,000,000
-------------------------------------------------------------------
5,000,000 Massachusetts HEFA, 3.60% CP (Fallon Healthcare System)/(Sanwa Bank
Ltd, Osaka LOC), Mandatory Tender 4/10/1996 P-1 5,000,000
-------------------------------------------------------------------
5,000,000 Massachusetts IFA, (Series 1993A), 3.30% CP (New England Power
Co.), Mandatory Tender 4/30/1996 A-1 5,000,000
-------------------------------------------------------------------
5,000,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Goddard
House)/(Fleet Bank of New York LOC) A-1 5,000,000
-------------------------------------------------------------------
4,300,000 Massachusetts IFA, Adjustable Rate IDRB (Series 1995) Weekly VRDNs
(Dunsirn Industries, Inc. Project)/(Bank One, Milwaukee, WI N.A.
LOC) A-1+ 4,300,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
-------------------------------------------------------------------
$ 6,100,000 Massachusetts Municipal Wholesale Electric Company, Variable Rate
Power Supply System Revenue Bonds (1994 Series C) Weekly VRDNs
(Canadian Imperial Bank of Commerce, Toronto LOC) A-1+ $ 6,100,000
------------------------------------------------------------------- ----------------
Total 37,467,700
------------------------------------------------------------------- ----------------
MICHIGAN--4.6%
-------------------------------------------------------------------
3,500,000 Auburn Hills, MI EDC, Limited Obligation Multi-Option Revenue Bonds
(Series 1995) Weekly VRDNs (Suburban Tool, Inc.)/(Huntington
National Bank, Columbus, OH LOC) P-1 3,500,000
-------------------------------------------------------------------
950,000 Dearborn, MI Economic Development Corp, (Series 1990) Weekly VRDNs
(Exhibit Productions, Inc. Project)/ (First of America
Bank--Illinois LOC) P-1 950,000
-------------------------------------------------------------------
2,390,000 Michigan State Hospital Finance Authority, (Series 1994) Weekly
VRDNs (Mt. Clemens General Hospital)/ (Comerica Bank, Detroit, MI
LOC) VMIG1 2,390,000
-------------------------------------------------------------------
2,300,000 Michigan State Hospital Finance Authority, (Series A) Weekly VRDNs
(OSF Health Care Systems) VMIG1 2,300,000
-------------------------------------------------------------------
50,000,000 Michigan State, GO UT Notes, 4.00% TRANs, 9/30/1996 SP-1+ 50,244,843
-------------------------------------------------------------------
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1991) Weekly VRDNs (Martin Luther Memorial Home, Inc.)/(National
Australia Bank, Ltd., Melbourne LOC) A-1 1,000,000
-------------------------------------------------------------------
5,630,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (United Waste Systems, Inc.)/(Bank of America
Illinois LOC) A-1 5,630,000
-------------------------------------------------------------------
3,300,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (Wellness Plan Project)/(NBD Bank, Michigan LOC) A-1+ 3,300,000
-------------------------------------------------------------------
$ 4,820,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (Wayne Disposal-Oakland, Inc. Project)/(Comerica
Bank, Detroit, MI LOC) A-1 $ 4,820,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
MICHIGAN--CONTINUED
-------------------------------------------------------------------
1,000,000 Michigan Strategic Fund, Variable Rate Demand Limited Obligation
Revenue Bonds (Series 1995) Weekly VRDNs (Hercules Drawn Steel
Corporation Project)/(Society National Bank, Cleveland, OH LOC) P-1 1,000,000
-------------------------------------------------------------------
1,750,000 Michigan Strategic Fund, Variable Rate Demand Limited Obligation
Revenue Bonds, (Series 1995) Weekly VRDNs (Welch Properties
Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) P-1 1,750,000
-------------------------------------------------------------------
5,000,000 Michigan Underground Storage Tank Financial Assurance Authority,
(Series I--1995) Weekly VRDNs (Canadian Imperial Bank of Commerce,
Toronto LOC) VMIG1 5,000,000
------------------------------------------------------------------- ----------------
Total 81,884,843
------------------------------------------------------------------- ----------------
MINNESOTA--0.1%
-------------------------------------------------------------------
2,500,000 Rochester, MN Health Care Facility Authority Weekly VRDNs (Mayo
Foundation) VMIG1 2,500,000
------------------------------------------------------------------- ----------------
MISSISSIPPI--0.2%
-------------------------------------------------------------------
4,000,000 Warren County, MS IDA Weekly VRDNs (Vesper Corp.)/(PNC Bank, N.A.
LOC) P-1 4,000,000
------------------------------------------------------------------- ----------------
MISSOURI--0.7%
-------------------------------------------------------------------
5,010,000 Missouri Development Finance Board, (Series 1995) Weekly VRDNs
(Wilson Trailer Sales, Inc. Project)/ (Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 5,010,000
-------------------------------------------------------------------
5,000,000 Missouri State Environmental Improvement & Energy Authority, 3.75%
CP (Kansas City Power And Light Co.), Mandatory Tender 11/6/1996 A-1 5,000,000
-------------------------------------------------------------------
1,900,000 Missouri State HEFA Daily VRDNs (Washington University)/(Morgan
Guaranty Trust Co., New York LIQ) A-1+ 1,900,000
-------------------------------------------------------------------
$ 1,200,000 Sedalia, MO IDA Weekly VRDNs (Cooper Industries, Inc.)/(Sanwa Bank
Ltd, Osaka LOC) P-1 $ 1,200,000
------------------------------------------------------------------- ----------------
Total 13,110,000
------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
MONTANA--0.3%
-------------------------------------------------------------------
6,000,000 Forsyth, Rosebud County MT, PCR Daily VRDNs (Pacificorp)/(Deutsche
Bank, AG LOC) P-1 6,000,000
------------------------------------------------------------------- ----------------
NEBRASKA--0.3%
-------------------------------------------------------------------
1,970,000 Douglas County, NE Weekly VRDNs (Majors Plastics, Inc.)/(Norwest
Bank Minnesota, Minneapolis LOC) P-1 1,970,000
-------------------------------------------------------------------
1,205,000 Douglas County, NE, Industrial Development Revenue Refunding Bonds
(Series 1994) Weekly VRDNs (Omaha Fixture Manufacturing
Project)/(NBD Bank, Michigan LOC) P-1 1,205,000
-------------------------------------------------------------------
2,225,000 Douglas County, NE, Variable Rate Demand Subordinated IDRB (Series
1995) Weekly VRDNs (Aksarben Foods, Inc. Project)/(Norwest Bank
Minnesota, Minneapolis LOC) P-1 2,225,000
------------------------------------------------------------------- ----------------
Total 5,400,000
------------------------------------------------------------------- ----------------
NEVADA--0.5%
-------------------------------------------------------------------
8,000,000 Clark County, NV, Industrial Development Refunding Revenue Bonds
(Series 1995B) Weekly VRDNs (Nevada Power Co.)/(Societe Generale,
Paris LOC) A-1+ 8,000,000
------------------------------------------------------------------- ----------------
NEW HAMPSHIRE--2.9%
-------------------------------------------------------------------
10,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A),
3.40% CP (New England Power Co.), Mandatory Tender 6/14/1996 A-1 10,000,000
-------------------------------------------------------------------
3,500,000 New Hampshire Business Finance Authority, PCR Bonds (Series A),
3.40% CP (New England Power Co.), Mandatory Tender 8/9/1996 A-1 3,500,000
-------------------------------------------------------------------
$ 7,100,000 New Hampshire Business Finance Authority, PCR Bonds (Series A),
3.60% CP (New England Power Co.), Mandatory Tender 5/23/1996 A-1 $ 7,100,000
-------------------------------------------------------------------
9,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A),
3.60% CP (New England Power Co.), Mandatory Tender 7/23/1996 A-1 9,000,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
NEW HAMPSHIRE--CONTINUED
-------------------------------------------------------------------
13,900,000 New Hampshire Business Finance Authority, PCR Bonds (Series A),
3.70% CP (New England Power Co.), Mandatory Tender 7/12/1996 A-1 13,900,000
-------------------------------------------------------------------
7,000,000 Rockingham County, NH, 4.00% TANs, 12/31/1996 NR 7,020,550
------------------------------------------------------------------- ----------------
Total 50,520,550
------------------------------------------------------------------- ----------------
NEW JERSEY--2.4%
-------------------------------------------------------------------
5,000,000 Galloway Township, NJ, (Series A), 4.00% BANs,
7/11/1996 NR 5,005,432
-------------------------------------------------------------------
4,200,000 Mercer County, NJ Improvement Authority Weekly VRDNs (Mercer
County, NJ Pooled Governmental Loan Program)/(Credit Suisse, Zurich
LOC) A-1+ 4,200,000
-------------------------------------------------------------------
1,873,000 Moorestown Township, NJ, 3.99% BANs, 9/5/1996 NR(3) 1,873,244
-------------------------------------------------------------------
8,200,000 New Jersey EDA Weekly VRDNs (Center-For-Aging-- Applewood
Estates)/(Banque Paribas, Paris LOC) A-1 8,200,000
-------------------------------------------------------------------
2,400,000 New Jersey EDA Weekly VRDNs (Church and Dwight, Inc.)/(Bank of Nova
Scotia, Toronto LOC) P-1 2,400,000
-------------------------------------------------------------------
348,087 New Jersey EDA Weekly VRDNs (H.L. Bhasin)/(Ford Motor Credit Co.
LIQ)/(Chemical Bank, New York LOC) P-1 348,087
-------------------------------------------------------------------
4,200,000 New Jersey EDA Weekly VRDNs (YM-YWHA of Bergen County, NJ)/(Bank of
New York, New York LOC) VMIG1 4,200,000
-------------------------------------------------------------------
16,100,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Hillcrest Health
Service System, Inc.)/(Industrial Bank of Japan Ltd., Tokyo LOC) A-1 16,100,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
NEW JERSEY--CONTINUED
-------------------------------------------------------------------
$ 1,000,000 New Jersey Turnpike Authority, (Series 1991D) Weekly VRDNs (FGIC
INS) A-1+ $ 1,000,000
------------------------------------------------------------------- ----------------
Total 43,326,763
------------------------------------------------------------------- ----------------
NEW MEXICO--0.9%
-------------------------------------------------------------------
3,300,000 Albuquerque, NM, Refunding Revenue Bonds (Series 1992) Weekly VRDNs
(Charter Hospital of Albuquerque, Inc.)/(Bankers Trust Co., New
York LOC) A-1 3,300,000
-------------------------------------------------------------------
7,100,000 Las Cruces, NM, Variable Rate Demand IDRB (Series 1994A) Weekly
VRDNs (F & A Dairy Products, Inc. Project)/(Norwest Bank Minnesota,
Minneapolis LOC) P-1 7,100,000
-------------------------------------------------------------------
5,000,000 New Mexico Mortgage Finance Authority, Single Family Mortgage
Program Bonds (Series 1996A), 3.25% TOBs (Westdeutsche Landesbank
Girozentrale GIC), Mandatory Tender 12/31/1996 VMIG1 5,000,000
------------------------------------------------------------------- ----------------
Total 15,400,000
------------------------------------------------------------------- ----------------
NEW YORK--7.8%
-------------------------------------------------------------------
10,000,000 Albany County, NY, (Series C), 3.50% BANs, 2/19/1997 NR 10,029,997
-------------------------------------------------------------------
10,000,000 Brentwood Union Free School District, NY, 4.375% TANs, 6/28/1996 NR(4) 10,006,335
-------------------------------------------------------------------
5,000,000 Nassau County, NY, (Series 1996A), 4.00% RANs,
3/5/1997 SP-1 5,028,198
-------------------------------------------------------------------
2,100,000 New York City, NY Daily VRDNs (Fuji Bank, Ltd., Tokyo LOC) A-1 2,100,000
-------------------------------------------------------------------
40,000,000 New York City, NY, (Fiscal 1996 Series A), 4.50% RANs, 4/11/1996 SP-1+ 40,008,522
-------------------------------------------------------------------
28,600,000 New York City, NY, (Series B), 4.75% RANs (Bank of Nova Scotia,
Toronto, Canadian Imperial Bank of Commerce, Toronto, Chemical
Bank, New York, Citibank NA, New York, Commerzbank AG, Frankfurt,
Morgan Guaranty Trust Co., New York and Union Bank of Switzerland,
Zurich LOCs), 6/28/1996 MIG1 28,685,322
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
NEW YORK--CONTINUED
-------------------------------------------------------------------
$ 9,500,000 New York State Energy Research & Development Authority Pollution
Control, (Series 1985A), 3.25% TOBs (Long Island Lighting
Co.)/(Deutsche Bank, AG LOC), Optional Tender 3/1/1997 Aaa $ 9,471,500
-------------------------------------------------------------------
9,720,000 New York State HFA Weekly VRDNs (Special Surgery
Hospital)/(Chemical Bank, New York LOC) VMIG1 9,720,000
-------------------------------------------------------------------
4,000,000 New York State HFA, Housing Revenue Bonds (1985 Series A) Weekly
VRDNs (Liberty View Apartments)/ (Chemical Bank, New York LOC) VMIG1 4,000,000
-------------------------------------------------------------------
2,900,000 New York State Local Government Assistance Corp., (Series B) Weekly
VRDNs (Bank of Nova Scotia, Toronto LOC) A-1+ 2,900,000
-------------------------------------------------------------------
4,000,000 (a)New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds
(Series PT-15B) Weekly VRDNs (Commerzbank AG, Frankfurt LIQ) VMIG1 4,000,000
-------------------------------------------------------------------
3,000,000 (a)VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New York City
Municipal Water Finance Authority)/(MBIA Insurance Corporation
INS)/(Hong Kong & Shanghai Banking Corp. LIQ) A-1 3,000,000
-------------------------------------------------------------------
7,000,000 (a)VRDC/IVRC Trust, (Series 1993B) Weekly VRDNs (New York
Metropolitan Transportation Authority)/(AMBAC INS)/(Hong Kong &
Shanghai Banking Corp. LIQ) A-1 7,000,000
-------------------------------------------------------------------
2,600,000 (a)VRDC/IVRC Trust, (Series 1993G) Weekly VRDNs (St. Lukes
Roosevelt Hospital Center)/(FHA INS)/(Hong Kong & Shanghai Banking
Corp. LIQ) A-1 2,600,000
------------------------------------------------------------------- ----------------
Total 138,549,874
------------------------------------------------------------------- ----------------
NORTH CAROLINA--7.9%
-------------------------------------------------------------------
1,000,000 Alamance County, NC Industrial Facilities Authority, (Series A)
Weekly VRDNs (Culp, Inc.)/(First Union National Bank, Charlotte,
N.C. LOC) VMIG1 1,000,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
-------------------------------------------------------------------
$ 4,600,000 Catawba County, NC Industrial Facilities & Pollution Control
Financing Authority, (Series 1994) Weekly VRDNs (Ethan Allen Inc
Project)/(Bankers Trust Co., New York LOC) P-1 $ 4,600,000
-------------------------------------------------------------------
44,392,557 (a)Charlotte-Mecklenburg Hospital Authority, NC, Loan Participation
Certificates (1995) VRNs, 5/22/1996 NR(2) 44,392,557
-------------------------------------------------------------------
1,000,000 Cleveland County, NC Industrial Facilities and Pollution Control
Financing Authority Weekly VRDNs (PPG Industries, Inc.) P-1 1,000,000
-------------------------------------------------------------------
2,600,000 Greensboro, NC , Certificates of Participation 1994 Equipment
Project Weekly VRDNs (Greensboro, NC Center City Corp.)/(Wachovia
Bank of Georgia NA, Atlanta LIQ) A-1+ 2,600,000
-------------------------------------------------------------------
800,000 Halifax County, NC Industrial Facilities & PCFA Weekly VRDNs
(Flambeau Airmold Project)/(Norwest Bank Minnesota, Minneapolis
LOC) P-1 800,000
-------------------------------------------------------------------
4,500,000 Lee County, NC Industrial Facility & PCFA, (Series 1989) Weekly
VRDNs (Avondale Mills, Inc.)/(SunTrust Bank, Atlanta LOC) P-1 4,500,000
-------------------------------------------------------------------
7,100,000 Lenoir County, NC Industrial Facilities & PCFA, IDRB Weekly VRDNs
(Kinston Neuse Corp Project (NC))/ (Branch Banking & Trust Co,
Wilson LOC) P-1 7,100,000
-------------------------------------------------------------------
20,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs (Weyerhauser Co.) A-1 20,000,000
-------------------------------------------------------------------
3,680,000 Mecklenberg County, NC Industrial Facility & PCFA, (Series 1988)
Weekly VRDNs (Florida Steel Corp.)/ (Bankers Trust Co., New York
LOC) P-1 3,680,000
-------------------------------------------------------------------
1,110,000 (a)NCNB Pooled Tax-Exempt Trust, (Series 1990A) Weekly VRDNs (NCNB
Tax Exempt Trust 1990a)/(Nationsbank, N.A. (North Carolina) LOC) P-1 1,110,000
-------------------------------------------------------------------
$ 4,095,000 (a)NCNB Pooled Tax-Exempt Trust, (Series 1990B) Weekly VRDNs (NCNB
Tax-Exempt Trust 1990b)/(Nationsbank, N.A. (North Carolina) LOC) P-1 $ 4,095,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
-------------------------------------------------------------------
6,000,000 New Hanover County, NC PCFA, (Series 1984) Weekly VRDNs (American
Hoist & Derrick Company Project)/ (First Union National Bank,
Charlotte, N.C. LOC) P-1 6,000,000
-------------------------------------------------------------------
2,250,000 New Hanover County, NC, GO School Bonds, (Series 1995) Weekly VRDNs
(Wachovia Bank of NC, NA, Winston-Salem LIQ) VMIG1 2,250,000
-------------------------------------------------------------------
2,250,000 New Hanover County, NC, GO School Bonds, (Series 1995) Weekly VRDNs
(Wachovia Bank of NC, NA, Winston-Salem LIQ) VMIG1 2,250,000
-------------------------------------------------------------------
2,260,000 (a)North Carolina Eastern Municipal Power Agency,
(P-Floats)/(Series PA-34B) Weekly VRDNs (Merrill Lynch Capital
Services, Inc. LIQ)/(United States Treasury PRF) VMIG1 2,260,000
-------------------------------------------------------------------
6,870,000 North Carolina Eastern Municipal Power Agency, 3.50% CP (Industrial
Bank of Japan Ltd., Tokyo LOC), Mandatory Tender 4/10/1996 A-1 6,870,000
-------------------------------------------------------------------
4,000,000 North Carolina Educational Facilities Finance Agency, (Series 1990)
Weekly VRDNs (Bowman Gray School of Medicine)/(Wachovia Bank of NC,
NA, Winston-Salem LOC) VMIG1 4,000,000
-------------------------------------------------------------------
1,000,000 North Carolina Medical Care Commission Hospital, Revenue Bonds
(Series 1992B) Weekly VRDNs (North Carolina Baptist) A-1+ 1,000,000
-------------------------------------------------------------------
4,700,000 North Carolina Medical Care Commission Hospital, Revenue Bonds
(Series 1994) Weekly VRDNs (Hugh Chatam Memorial/Rutherford
Hospitals)/(First Union National Bank, Charlotte, N.C. LOC) VMIG1 4,700,000
-------------------------------------------------------------------
2,500,000 Onslow County, NC Industrial Facilities & Pollution Control
Financing Authority Weekly VRDNs (Mine Safety Appliances
Co.)/(Sanwa Bank Ltd, Osaka LOC) A-1 2,500,000
-------------------------------------------------------------------
$ 2,300,000 Richmond County, NC Industrial Facilities & Pollution Control,
(Series 1991) Weekly VRDNs (Bibb Company)/ (Citibank NA, New York
LOC) A-1 $ 2,300,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
-------------------------------------------------------------------
6,350,000 University of North Carolina, (Series 1989) Weekly VRDNs
(University of North Carolina at Chapel Hill General Alumni
Association)/(Credit Suisse, Zurich LOC) VMIG1 6,350,000
-------------------------------------------------------------------
4,100,000 Wilson County, NC PCA, (Series 1994) Weekly VRDNs (Granutec,
Inc.)/(Branch Banking & Trust Co, Wilson LOC) P-1 4,100,000
------------------------------------------------------------------- ----------------
Total 139,457,557
------------------------------------------------------------------- ----------------
NORTH DAKOTA--0.2%
-------------------------------------------------------------------
3,675,000 Fargo, ND, Variable Rate Demand IDRB (Series 1994) Weekly VRDNs
(Pan-O-Gold Baking Co. Project)/ (Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 3,675,000
------------------------------------------------------------------- ----------------
OHIO--0.8%
-------------------------------------------------------------------
500,000 Cuyahoga County, OH IDA Weekly VRDNs (Health Hill Hospital)/(Union
Bank of Switzerland, Zurich LOC) P-1 500,000
-------------------------------------------------------------------
6,000,000 North Olmsted, OH, Various Purpose Improvement Notes, (Series
1995), 4.67% BANs, 6/20/1996 NR(3) 6,005,275
-------------------------------------------------------------------
500,000 Oakwood Village, OH IDA Weekly VRDNs (Oak Leaf Industries)/(First
Union National Bank, Charlotte, N.C. LOC) P-1 500,000
-------------------------------------------------------------------
8,000,000 Ohio State Air Quality Development Authority, (Series 1993A), 3.65%
TOBs (Duquesne Light Power Co.)/(Union Bank of Switzerland, Zurich
LOC), Mandatory Tender
7/18/1996 VMIG1 8,000,000
------------------------------------------------------------------- ----------------
Total 15,005,275
------------------------------------------------------------------- ----------------
OKLAHOMA--2.3%
-------------------------------------------------------------------
8,000,000 Broken Arrow, OK EDA Weekly VRDNs (Blue Bell Creameries)/(Banque
Nationale de Paris LOC) VMIG1 8,000,000
-------------------------------------------------------------------
$ 2,295,000 Claremore, OK IDA Weekly VRDNs (Baldor Electric Co.)/(Wachovia Bank
of Georgia NA, Atlanta LOC) P-1 $ 2,295,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
OKLAHOMA--CONTINUED
-------------------------------------------------------------------
24,500,000 Oklahoma State Industrial Authority, Flexible Rate Hospital Revenue
Bonds (Series 1990B) Weekly VRDNs (Baptist Medical Center,
OK)/(Credit Suisse, Zurich and Morgan Guaranty Trust Co., New York
LIQs) VMIG1 24,500,000
-------------------------------------------------------------------
6,400,000 Southeastern Oklahoma Industries Authority Weekly VRDNs
(Weyerhauser Co.) A-1 6,400,000
------------------------------------------------------------------- ----------------
Total 41,195,000
------------------------------------------------------------------- ----------------
PENNSYLVANIA--5.8%
-------------------------------------------------------------------
6,850,000 Berks County, PA, TRANs (Series 1996), 4.50%,
12/31/1996 NR 6,874,647
-------------------------------------------------------------------
3,000,000 Erie County, PA Hospital Authority Weekly VRDNs (St. Mary's
Hospital Erie, PA)/(PNC Bank, N.A. LOC) A-1 3,000,000
-------------------------------------------------------------------
2,000,000 Montgomery County, PA IDA Weekly VRDNs (Plymouth Woods)/(PNC Bank,
N.A. LOC) P-1 2,000,000
-------------------------------------------------------------------
1,100,000 Pennsylvania Education Development Authority, (1995 Series E)
Weekly VRDNs (Home Nursing Agency Affiliates Project)/(PNC Bank,
N.A. LOC) A-1 1,100,000
-------------------------------------------------------------------
800,000 Philadelphia Redevelopment Authority, Multi-Family Revenue Bonds
(Series 1985) Weekly VRDNs (Franklin Town Towers)/(Marine Midland
Bank N.A., Buffalo, NY LOC) A-1 800,000
-------------------------------------------------------------------
29,000,000 Philadelphia, PA, (Series A), 4.50% TRANs, 6/27/1996 SP-1 29,036,538
-------------------------------------------------------------------
8,000,000 Philadelphia, PA, GO (Series 1990), 3.45% CP (Fuji Bank, Ltd.,
Tokyo LOC), Mandatory Tender 4/17/1996 P-1 8,000,000
-------------------------------------------------------------------
27,600,000 Philadelphia, PA, GO (Series 1990), 3.45% CP (Fuji Bank, Ltd.,
Tokyo LOC), Mandatory Tender 4/18/1996 P-1 27,600,000
-------------------------------------------------------------------
7,000,000 Philadelphia, PA, GO (Series 1990), 3.45% CP (Fuji Bank, Ltd.,
Tokyo LOC), Mandatory Tender 4/9/1996 P-1 7,000,000
-------------------------------------------------------------------
$ 18,000,000 Philadelphia, PA, GO (Series 1990), 3.60% CP (Fuji Bank, Ltd.,
Tokyo LOC), Mandatory Tender 4/9/1996 P-1 $ 18,000,000
------------------------------------------------------------------- ----------------
Total 103,411,185
------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
SOUTH CAROLINA--0.9%
-------------------------------------------------------------------
2,915,000 Berkeley, SC IDRB, (Series 1989) Weekly VRDNs (W.W. Williams
Company Project)/(Bank One, Columbus, N.A. LOC) VMIG1 2,915,000
-------------------------------------------------------------------
5,125,000 Greenville County, SC Hospital Authority, (Series 1989) Weekly
VRDNs (Charter Hospital St. Louis)/(Bankers Trust Co., New York
LOC) VMIG1 5,125,000
-------------------------------------------------------------------
2,500,000 South Carolina Education Facilities Authority, Educational
Facilities Revenue Bonds (Series 1993) Weekly VRDNs (Presbyterian
College Project)/ (Wachovia Bank of SC, NA, Columbia LOC) A-1+ 2,500,000
-------------------------------------------------------------------
5,255,000 South Carolina Job Development Authority, Hospital Facilities
Revenue Bonds, (Series 1994) Weekly VRDNs (Rolling Green Village
Project)/(Branch Banking & Trust Co, Wilson LOC) P-1 5,255,000
------------------------------------------------------------------- ----------------
Total 15,795,000
------------------------------------------------------------------- ----------------
SOUTH DAKOTA--0.8%
-------------------------------------------------------------------
720,000 Mitchell, SD, IDR Weekly VRDNs (Holiday Inn)/(First Bank NA,
Minneapolis LOC) P-1 720,000
-------------------------------------------------------------------
1,325,000 Rapid City, SD Weekly VRDNs (Gillette Dairy Black Hills,
Inc.)/(Mitsubishi Bank Ltd, Tokyo LOC) P-1 1,325,000
-------------------------------------------------------------------
10,000,000 South Dakota Housing Development Authority, Homeownership Mortgage
Bonds (Series 1995E), 4.05% TOBs, Mandatory Tender 10/24/1996 A-1+ 10,000,000
-------------------------------------------------------------------
1,630,000 Watertown, SD, (Series 1991) Weekly VRDNs (Tescom Corp.)/(Norwest
Bank Minnesota, Minneapolis LOC) P-1 1,630,000
------------------------------------------------------------------- ----------------
Total 13,675,000
------------------------------------------------------------------- ----------------
TENNESSEE--0.8%
-------------------------------------------------------------------
$ 3,500,000 Greenfield, TN IDB, IDRB (Series 1995) Weekly VRDNs (Plastic
Products Company Project)/(Norwest Bank Minnesota, Minneapolis LOC) P-1 $ 3,500,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
TENNESSEE--CONTINUED
-------------------------------------------------------------------
7,300,000 Hawkins County, TN IDB, (Series 1995) Weekly VRDNs (Sekisui Ta
Industries, Inc. Project)/(Bank of Tokyo Ltd., Tokyo LOC) VMIG1 7,300,000
-------------------------------------------------------------------
1,395,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
(Series 1992) Weekly VRDNs (Belmont University
Project)/(Nationsbank of Tennessee LOC) P-1 1,395,000
-------------------------------------------------------------------
2,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
(Series 1996) Weekly VRDNs (Dede Wallace Center Project)/(SunTrust
Bank, Nashville LOC) Aa3 2,000,000
------------------------------------------------------------------- ----------------
Total 14,195,000
------------------------------------------------------------------- ----------------
TEXAS--8.7%
-------------------------------------------------------------------
900,000 Corpus Christi, TX IDC Weekly VRDNs (Grainger (W.W.), Inc.) P-1 900,000
-------------------------------------------------------------------
18,500,000 Grapevine, TX, IDC Airport Improvement, (Series 1983A), 3.50% TOBs
(Singer Company)/(Bank of Montreal LOC), Optional Tender 4/1/1997 P-1 18,453,750
-------------------------------------------------------------------
2,625,000 Harris County, TX Cultural Education Facilities Finance Corp.
Weekly VRDNs (Houston Museum of Natural Sciences)/(Bank One, Texas
N.A. LOC) P-1 2,625,000
-------------------------------------------------------------------
955,000 Harris County, TX IDC Weekly VRDNs (Grainger (W.W.), Inc.) P-1 955,000
-------------------------------------------------------------------
5,700,000 Harris County, TX, Toll Road Unlimited Tax & Sub Lien Revenue
(Series 1994-G) Weekly VRDNs A-1+ 5,700,000
-------------------------------------------------------------------
25,000,000 Houston, TX, (Series 1995), 4.50% TRANs, 6/27/1996 SP-1+ 25,045,869
-------------------------------------------------------------------
2,550,000 Liberty County, TX IDA Weekly VRDNs (Insteel Industries,
Inc.)/(First Union National Bank, Charlotte, N.C. LOC) P-1 2,550,000
-------------------------------------------------------------------
$ 3,100,000 Lubbock, TX IDC Daily VRDNs (McLane Co., Inc.)/ (Nationsbank, N.A.
North Carolina LOC) P-1 $ 3,100,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
TEXAS--CONTINUED
-------------------------------------------------------------------
29,950,000 North Central Texas HFDC, Flexible Rate Hospital Revenue Bonds
(Series 1991A), 3.80% CP (Methodist Hospitals of Dallas)/(MBIA
Insurance Corporation INS), Mandatory Tender 4/10/1996 VMIG1 29,950,000
-------------------------------------------------------------------
1,780,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol,
Inc.)/(Nationsbank, N.A. (North Carolina) LOC) P-1 1,780,000
-------------------------------------------------------------------
6,000,000 Tarrant County, TX IDC Weekly VRDNs (Holden Business
Forms)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 6,000,000
-------------------------------------------------------------------
22,500,000 Texas State Public Finance Authority, (Series 1993A), 3.30% CP,
Mandatory Tender 5/9/1996 A-1+ 22,500,000
-------------------------------------------------------------------
25,000,000 Texas State, (Series 1995A), 4.75% TRANs, 8/30/1996 SP-1+ 25,064,507
-------------------------------------------------------------------
9,585,000 Tyler, TX Health Facilities Development Corp., Hospital Revenue
Bonds (Series 1994) Weekly VRDNs (East Texas Medical
Center)/(Nationsbank of Texas, N.A. LOC) P-1 9,585,000
------------------------------------------------------------------- ----------------
Total 154,209,126
------------------------------------------------------------------- ----------------
UTAH--1.7%
-------------------------------------------------------------------
9,000,000 Intermountain Power Agency, UT, (Series 1985 E), 3.15% CP (Bank of
America NT and SA, San Francisco LOC), Mandatory Tender 5/14/1996 A-1 9,000,000
-------------------------------------------------------------------
8,500,000 Intermountain Power Agency, UT, (Series E), 3.85% TOBs, Optional
Tender 6/17/1996 VMIG1 8,500,000
-------------------------------------------------------------------
7,400,000 Salt Lake County, UT, Multi-Family Housing Revenue Refunding Bonds
(Series 1992) Weekly VRDNs (Santa Fe Apartments)/(First Security
Bank of Utah, NA LOC) VMIG1 7,400,000
-------------------------------------------------------------------
4,400,000 Salt Lake County, UT, PCR Bonds (Series 1994B) Daily VRDNs (British
Petroleum, Ltd.) A-1+ 4,400,000
------------------------------------------------------------------- ----------------
Total 29,300,000
------------------------------------------------------------------- ----------------
VIRGINIA--7.3%
-------------------------------------------------------------------
$ 5,552,000 Alexandria, VA IDA Weekly VRDNs (American Red Cross)/(Sanwa Bank
Ltd, Osaka LOC) A-1 $ 5,552,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
VIRGINIA--CONTINUED
-------------------------------------------------------------------
8,800,000 Alexandria, VA Redevelopment and Housing Authority Weekly VRDNs
(Crystal City Apartments)/(Safeco Insurance Co. of America
INS)/(Sumitomo Bank Ltd., Osaka LIQ) A-1 8,800,000
-------------------------------------------------------------------
2,000,000 Arlington County, VA Weekly VRDNs (Ballston Public
Parking)/(Citibank NA, New York LOC) A-1 2,000,000
-------------------------------------------------------------------
13,500,000 Campbell County, VA IDA, Solid Waste Disposal Facilities Revenue
Aces Weekly VRDNs (Georgia-Pacific Corp.)/(Industrial Bank of Japan
Ltd., Tokyo LOC) A-1 13,500,000
-------------------------------------------------------------------
7,000,000 Carroll County, VA IDA, Adjustable Rate IDRB (Series 1995) Weekly
VRDNs (Kentucky Derby Hosiery Co, Inc Project)/(Liberty National
Bank & Trust Co. LOC) A-1+ 7,000,000
-------------------------------------------------------------------
10,500,000 Chesterfield County, VA IDA, 3.30% CP (Virginia Electric Power
Co.), Mandatory Tender 5/13/1996 A-1 10,500,000
-------------------------------------------------------------------
8,000,000 Fairfax County, VA EDA, (Series 1995) Weekly VRDNs (American
Society of Civil Engineers Foundation, Inc. Project)/(Mellon Bank
NA, Pittsburgh LOC) A-1 8,000,000
-------------------------------------------------------------------
1,305,000 Fairfax County, VA EDA, Facilities Revenue Refunding Bonds (Series
1993) Weekly VRDNs (Future Homemakers of America)/(Nationsbank of
Virginia, N.A. LOC) P-1 1,305,000
-------------------------------------------------------------------
3,000,000 Fairfax County, VA Redevelopment and Housing Authority Weekly VRDNs
(Chase Commons Associates)/ (Bankers Trust Co., New York LOC) P-1 3,000,000
-------------------------------------------------------------------
1,900,000 Fairfax County, VA IDA Weekly VRDNs (Fairfax Hospital
System)/(Dai-Ichi Kangyo Bank Ltd., Tokyo LOC) A-1 1,900,000
-------------------------------------------------------------------
$ 2,500,000 Fauquier County, VA IDA, Various Rate Demand Refunding Revenue
Bonds Weekly VRDNs (Warrenton Development Co.)/(Nationsbank of
Maryland, N.A. LOC) P-1 $ 2,500,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
VIRGINIA--CONTINUED
-------------------------------------------------------------------
1,500,000 Front Royal & Warren County, VA IDA, IDRB (Series 1995) Weekly
VRDNs (Pen-Tab Industries, Inc. Project)/ (Bank of America,
Illinois LOC) P-1 1,500,000
-------------------------------------------------------------------
3,450,000 Hampton, VA Redevelopment & Housing Authority, (Series 1984) Weekly
VRDNs (Nationsbank of Virginia, N.A. LOC) P-1 3,450,000
-------------------------------------------------------------------
3,000,000 Newport News, VA Redevelopment & Housing Authority, (Series 1990)
Weekly VRDNs (Fredericksburg-Oxford)/(Bankers Trust Co., New York
LOC) VMIG1 3,000,000
-------------------------------------------------------------------
11,375,000 Richmond, VA Redevelopment & Housing Authority, (Series 1989)
Weekly VRDNs (Belmont Apartment)/(First Union National Bank,
Charlotte, N.C. LOC) P-1 11,375,000
-------------------------------------------------------------------
5,000,000 Richmond, VA Redevelopment & Housing Authority, (Series B-2) Weekly
VRDNs (Richmond, VA Red Tabacco Row)/(Westdeutsche Landesbank
Girozentrale LOC) VMIG1 5,000,000
-------------------------------------------------------------------
1,500,000 Richmond, VA Redevelopment & Housing Authority, (Series B-3) Weekly
VRDNs (Richmond, VA Red Tabacco Row)/(Westdeutsche Landesbank
Girozentrale LOC) VMIG1 1,500,000
-------------------------------------------------------------------
3,160,000 Richmond, VA Redevelopment & Housing Authority, (Series B-5) Weekly
VRDNs (Richmond, VA Red Tabacco Row)/(Westdeutsche Landesbank
Girozentrale LOC) VMIG1 3,160,000
-------------------------------------------------------------------
4,300,000 Richmond, VA Redevelopment & Housing Authority, (Series B-9) Weekly
VRDNs (Richmond, VA Red Tabacco Row)/(Westdeutsche Landesbank
Girozentrale LOC) VMIG1 4,300,000
-------------------------------------------------------------------
$ 4,700,000 Richmond, VA, (Series 1996A), 4.00% RANs, 6/28/1996 SP-1+ $ 4,708,356
-------------------------------------------------------------------
4,000,000 Roanoke, VA IDA, Hospital Revenue Bonds (Series 1995C) Weekly VRDNs
(Carilion Health System)/ (Morgan Guaranty Trust Co., New York LIQ) A-1 4,000,000
-------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
VIRGINIA--CONTINUED
-------------------------------------------------------------------
4,650,000 Suffolk, VA Redevelopment & Housing Authority Weekly VRDNs
(Terry/Peterson Development Corp.)/ (Nationsbank of Virginia, N.A.
LOC) P-1 4,650,000
-------------------------------------------------------------------
3,105,000 Suffolk, VA Redevelopment & Housing Authority, (Series 1994) Weekly
VRDNs (Terry/Peterson Associates II Project)/(Nationsbank of
Virginia, N.A. LOC) P-1 3,105,000
-------------------------------------------------------------------
5,100,000 Virginia Peninsula Port Authority Daily VRDNs (Kinyo Virginia,
Inc.)/(Industrial Bank of Japan Ltd., Tokyo LOC) A-1 5,100,000
-------------------------------------------------------------------
4,000,000 Virginia Peninsula Port Authority, Facility Revenue Refunding Bonds
(Series 1992), 3.20% CP (CSX Corp.)/ (Bank of Nova Scotia, Toronto
LOC), Mandatory Tender 4/10/1996 A-1+ 4,000,000
-------------------------------------------------------------------
1,500,000 Virginia State Housing Development Authority, (Series 1987A) Weekly
VRDNs (AHC Service Center)/(Bank of Tokyo-Mitsubishi LTD LOC) P-1 1,500,000
-------------------------------------------------------------------
4,000,000 Williamsburg, VA IDA, (Series 1988) Weekly VRDNs (Colonial
Williamsburg Foundation Museum)/(Sanwa Bank Ltd, Osaka LOC) P-1 4,000,000
------------------------------------------------------------------- ----------------
Total 128,405,356
------------------------------------------------------------------- ----------------
WASHINGTON--0.2%
-------------------------------------------------------------------
2,850,000 Washington State, GO Bonds (Series P-12A) Weekly VRDNs (Merrill
Lynch Capital Services, Inc. LIQ) VMIG1 2,850,000
------------------------------------------------------------------- ----------------
WEST VIRGINIA--0.7%
-------------------------------------------------------------------
3,040,000 Berkeley County, WV County Commission, IDB (Series 1994) Weekly
VRDNs (Brentwood Industries, Inc. Project)/(Meridian Bank, Reading,
PA LOC) P-1 3,040,000
-------------------------------------------------------------------
$ 9,000,000 Marshall County, WV, PCR (Series 1992) Weekly VRDNs (PPG
Industries, Inc.) A-1 $ 9,000,000
------------------------------------------------------------------- ----------------
Total 12,040,000
------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
------------- ------------------------------------------------------------------- ---------- ----------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
----------------------------------------------------------------------------------
WISCONSIN--1.4%
-------------------------------------------------------------------
2,000,000 Green Bay, WI, IDRB (Series 1985) Weekly VRDNs (St. Mary's
Holdings, Inc.)/(Mellon Bank NA, Pittsburgh LOC) P-1 2,000,000
-------------------------------------------------------------------
12,000,000 Milwaukee, WI, (Series 1996-A), 3.50% RANs, 2/27/1997 SP-1+ 12,052,829
-------------------------------------------------------------------
1,000,000 Rice Lake, WI, IDRB (Series 1995) Weekly VRDNs (Wright Products
Corp. Project)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 1,000,000
-------------------------------------------------------------------
940,000 Spooner, WI, (Series 1994) Weekly VRDNs (Nash Finch Co.)/(First
Bank NA, Minneapolis LOC) P-1 940,000
-------------------------------------------------------------------
9,120,000 (a)Wisconsin Housing & Economic Development Authority, (Series B),
4.00% TOBs (FSA INS)/(Meridian Bank, Reading, PA LIQ), Optional
Tender 9/1/1996 NR(3) 9,120,000
------------------------------------------------------------------- ----------------
Total 25,112,829
------------------------------------------------------------------- ----------------
WYOMING--0.1%
-------------------------------------------------------------------
1,830,000 Sweetwater County, WY IDA Weekly VRDNs (FMC Gold Co.)/(Wachovia
Bank of NC, NA, Winston-Salem LOC) A-1+ 1,830,000
------------------------------------------------------------------- ----------------
OTHER--0.6%
-------------------------------------------------------------------
10,303,330 (a)LaSalle National Bank Leasetops Trust, (Series 1995A) Leasetops
Certificates Weekly VRDNs (Lasalle National Bank, Chicago LOC) A-1+ 10,303,330
------------------------------------------------------------------- ----------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 1,766,957,887
------------------------------------------------------------------- ----------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 20% of the
Portfolio as calculated based upon total portfolio market value.
(a) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these securities
amounted to $149,265,172 which represents 8.4% of net assets.
(b) Cost for federal tax purposes $1,766,847,127.
*Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
Note: The categories of investments are shown as a percentage of net assets
($1,769,848,681) at March 31, 1996.
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
AMBAC-- American Municipal Bond Assurance Corporation
IDFA--Industrial Development Finance
Authority
BANs-- Bond Anticipation Notes
IFA--Industrial Finance Authority
CP-- Commercial Paper
INS--Insured
EDA--Economic Development Authority
LIQ--Liquidity Agreement
EDC--Economic Development Commission
LOCs--Letter(s) of Credit
EDRB--Economic Development Revenue Bonds
LOC--Letter of Credit
FGIC--Financial Guaranty Insurance Company
MBIA--Municipal Bond Investors
Assurance
FHA--Federal Housing Administration
PCA--Pollution Control Authority
FSA--Financial Security Assurance
PCR--Pollution Control Revenue
GIC--Guaranteed Investment Contract
PCFA--Pollution Control Finance
Authority
GO--General Obligation
PLC--Public Limited Company
GTD--Guaranty
PRF--Prerefunded
HEFA--Health and Education Facilities Authority
RANs--Revenue Anticipation Notes
HFA--Housing Finance Authority
TANs--Tax Anticipation Notes
HFDC--Health Facility Development Corporation
TOBs--Tender Option Bonds
IDA--Industrial Development Authority
TRANs--Tax and Revenue Anticipation
Notes
IDB--Industrial Development Bond
UT--Unlimited Tax
IDC--Industrial Development Corporation
VRDNs--Variable Rate Demand Notes
IDR--Industrial Development Revenue
VRNs--Variable Rate Notes
IDRB--Industrial Development Revenue Bond
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
March 31, 1996
<TABLE>
<S> <C> <C>
ASSETS:
-----------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value (tax cost $1,766,847,127) $ 1,766,957,887
-----------------------------------------------------------------------------------------------
Cash 5,972,917
-----------------------------------------------------------------------------------------------
Income receivable 16,182,274
-----------------------------------------------------------------------------------------------
Receivable for shares sold 9,674,357
----------------------------------------------------------------------------------------------- ----------------
Total assets 1,798,787,435
-----------------------------------------------------------------------------------------------
LIABILITIES:
-----------------------------------------------------------------------------------------------
Payable for investments purchased $ 18,453,750
--------------------------------------------------------------------------------
Payable for shares redeemed 8,219,822
--------------------------------------------------------------------------------
Income distribution payable 1,858,202
--------------------------------------------------------------------------------
Accrued expenses 406,980
-------------------------------------------------------------------------------- -------------
Total liabilities 28,938,754
----------------------------------------------------------------------------------------------- ----------------
Net Assets for 1,770,521,727 shares outstanding $ 1,769,848,681
----------------------------------------------------------------------------------------------- ----------------
NET ASSETS CONSIST OF:
-----------------------------------------------------------------------------------------------
Paid in capital $ 1,770,521,727
-----------------------------------------------------------------------------------------------
Undistributed net investment income 277,807
-----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (950,853)
----------------------------------------------------------------------------------------------- ----------------
Total Net Assets $ 1,769,848,681
----------------------------------------------------------------------------------------------- ----------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Investment Shares $1,465,332,621 / 1,465,798,672 shares outstanding $1.00
----------------------------------------------------------------------------------------------- ----------------
Institutional Service Shares $304,516,060 / 304,723,055 shares outstanding $1.00
----------------------------------------------------------------------------------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Statement of Operations
--------------------------------------------------------------------------------
Year Ended March 31, 1996
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
--------------------------------------------------------------------------------------------------
Interest $ 68,891,501
--------------------------------------------------------------------------------------------------
EXPENSES:
--------------------------------------------------------------------------------------------------
Investment advisory fee $ 8,657,750
-----------------------------------------------------------------------------------
Administrative personnel and services fee 1,310,182
-----------------------------------------------------------------------------------
Custodian fees 178,277
-----------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 1,503,785
-----------------------------------------------------------------------------------
Directors'/Trustees' fees 19,260
-----------------------------------------------------------------------------------
Auditing fees 17,907
-----------------------------------------------------------------------------------
Legal fees 11,261
-----------------------------------------------------------------------------------
Portfolio accounting fees 135,852
-----------------------------------------------------------------------------------
Shareholder services fee--Investment Shares 3,461,950
-----------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 866,925
-----------------------------------------------------------------------------------
Share registration costs 83,996
-----------------------------------------------------------------------------------
Printing and postage 182,169
-----------------------------------------------------------------------------------
Insurance premiums 24,282
-----------------------------------------------------------------------------------
Taxes 28,133
-----------------------------------------------------------------------------------
Miscellaneous 17,664
----------------------------------------------------------------------------------- -------------
Total expenses 16,499,393
-----------------------------------------------------------------------------------
Waivers--
--------------------------------------------------------------------
Waiver of investment advisory fee $ (2,483,925)
--------------------------------------------------------------------
Waiver of shareholder services fee--Investment Shares (1,384,780)
--------------------------------------------------------------------
Waiver of shareholder services fee--Institutional
Service Shares (866,925)
-------------------------------------------------------------------- -------------
Total waivers (4,735,630)
----------------------------------------------------------------------------------- -------------
Net expenses 11,763,763
-------------------------------------------------------------------------------------------------- -------------
Net investment income 57,127,738
-------------------------------------------------------------------------------------------------- -------------
Net realized gain on investments 32,047
-------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ 57,159,785
-------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
----------------------------------------------------------------------------
OPERATIONS--
----------------------------------------------------------------------------
Net investment income $ 57,127,738 $ 44,660,920
----------------------------------------------------------------------------
Net realized gain (loss) on investments ($932,829 net loss and
$18,024 net loss, respectively, as computed for federal income
tax purposes) 32,047 (972,359)
---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from operations 57,159,785 43,688,561
---------------------------------------------------------------------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
----------------------------------------------------------------------------
Distributions from net investment income
----------------------------------------------------------------------------
Investment Shares (44,999,576) (33,105,372)
----------------------------------------------------------------------------
Institutional Service Shares (11,850,355) (11,555,548)
---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from distributions to
shareholders (56,849,931) (44,660,920)
---------------------------------------------------------------------------- ----------------- -----------------
SHARE TRANSACTIONS--
----------------------------------------------------------------------------
Proceeds from sale of shares 5,662,886,235 6,059,965,359
----------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of distributions
declared 45,012,727 32,944,709
----------------------------------------------------------------------------
Cost of shares redeemed (5,575,079,915) (6,173,177,132)
---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from share transactions 132,819,047 (80,267,064)
---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets 133,128,901 (81,239,423)
----------------------------------------------------------------------------
NET ASSETS:
----------------------------------------------------------------------------
Beginning of period 1,636,719,780 1,717,959,203
---------------------------------------------------------------------------- ----------------- -----------------
End of period (including undistributed net investment income of $277,807 and
$0, respectively) $ 1,769,848,681 $ 1,636,719,780
---------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Financial Highlights--Investment Shares
--------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------
INCOME FROM INVESTMENT
OPERATIONS
--------------------------
Net investment income 0.03 0.03 0.02 0.02 0.04 0.05 0.06 0.05 0.04
-------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
--------------------------
Distributions from net
investment income (0.03) (0.03) (0.02) (0.02) (0.04) (0.05) (0.06) (0.05) (0.04)
-------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (a) 3.32% 2.70% 2.01% 2.42% 3.84% 5.40% 5.88% 5.28% 4.29%
--------------------------
RATIOS TO AVERAGE NET
ASSETS
--------------------------
Expenses 0.71% 0.70% 0.61% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
--------------------------
Net investment income 3.27% 2.66% 2.00% 2.38% 3.73% 5.25% 5.73% 5.14% 4.19%
--------------------------
Expense waiver/
reimbursement (b) 0.24% 0.17% 0.14% 0.10% 0.11% 0.12% 0.11% 0.08% 0.06%
--------------------------
SUPPLEMENTAL DATA
--------------------------
Net assets, end
of period (000 omitted) $1,465,333 $1,277,894 $1,327,506 $1,619,531 $1,440,970 $1,214,045 $1,142,022 $1,313,391 $1,552,460
--------------------------
<CAPTION>
<S> <C>
1987
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00
--------------------------
INCOME FROM INVESTMENT
OPERATIONS
--------------------------
Net investment income 0.04
-------------------------- ---------
LESS DISTRIBUTIONS
--------------------------
Distributions from net
investment income (0.04)
-------------------------- ---------
NET ASSET VALUE, END OF
PERIOD $ 1.00
-------------------------- ---------
TOTAL RETURN (a) 3.84%
--------------------------
RATIOS TO AVERAGE NET
ASSETS
--------------------------
Expenses 0.55%
--------------------------
Net investment income 3.74%
--------------------------
Expense waiver/
reimbursement (b) 0.06%
--------------------------
SUPPLEMENTAL DATA
--------------------------
Net assets, end
of period (000 omitted)
$
--------------------------
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Financial Highlights--Institutional Service Shares
--------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
<S> <C> <C> <C>
1996 1995 1994(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
---------------------------------------------------------------------------------
Net investment income 0.03 0.03 0.01
--------------------------------------------------------------------------------- --------- --------- -----------
LESS DISTRIBUTIONS
---------------------------------------------------------------------------------
Distributions from net investment income (0.03) (0.03) (0.01)
--------------------------------------------------------------------------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------------- --------- --------- -----------
TOTAL RETURN (b) 3.47% 2.85% 0.92%
---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
---------------------------------------------------------------------------------
Expenses 0.56% 0.55% 0.55%*
---------------------------------------------------------------------------------
Net investment income 3.43% 2.82% 1.99%*
---------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.40% 0.17% 0.14%*
---------------------------------------------------------------------------------
SUPPLEMENTAL DATA
---------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $304,516 $358,826 $390,453
---------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from October 15, 1993 (date of initial
public investment) to March 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Notes to Financial Statements
--------------------------------------------------------------------------------
March 31, 1996
(1) ORGANIZATION
Tax-Free Instruments Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, open-end
management investment company. The Trust offers two classes of shares:
Investment Shares and Institutional Service Shares. The investment objective of
the Trust is current income which is exempt from federal income tax including
the alternative minimum tax consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Trust's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Trust's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary. At March 31, 1996, the Trust, for
federal tax purposes, had a capital loss carryforward of $950,853, which
will reduce the Trust's taxable income arising from future net realized
gain on investments, if any, to the extent permitted by the Code, and thus
will reduce the amount of the distributions to shareholders which would
otherwise be necessary to relieve the Trust of any liability for federal
tax. Pursuant to the Code, such capital loss carryforward will expire in
2003 ($18,024) and 2004 ($932,829).
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities may
be resold in the secondary market in transactions exempt from registration.
In some cases, the restricted securities may be resold without registration
upon exercise of a demand feature. Such restricted securities may be
determined to be liquid under criteria established by the Board of
Trustees. The Trust will not incur any
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
registration costs upon such resales. Restricted securities are valued at
amortized cost in accordance with Rule 2a-7 under the Investment Company
Act of 1940. Additional information on each restricted security held at
March 31, 1996, is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
California Public Capital Improvements Financing Authority 3-7-96/3-20-96 $ 39,985,000
Thornton, CO, Multifamily Housing Refunding Revenue
Bonds 10-4-95/10-19-95 5,365,000
Clipper Connecticut Tax Exempt Trust 5-6-94 4,966,585
Clipper, MA Tax Exempt Trust 1-4-95 11,067,700
New York State Mortgage Agency 2-7-96 4,000,000
VRDC/IVRC Trust, (Series 1992A) 10-31-96 3,000,000
VRDC/IVRC Trust, (Series 1993B) 12-22-95 7,000,000
VRDC/IVRC Trust, (Series 1993G) 2-29-96 2,600,000
Charlotte-Mecklenburg Hospital Authority, NC 6-30-95 44,392,557
NCNB Pooled Tax-Exempt Trust, (Series 1990A) 1-3-92 1,110,000
NCNB Pooled Tax-Exempt Trust, (Series 1990B) 12-4-90 4,095,000
North Carolina Eastern Municipal Power Agency 11-22-93 2,260,000
Wisconsin Housing & Economic Development Authority 03-01-96 9,120,000
LaSalle National Bank Leasetops Trust 10-11-95 10,303,330
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At March 31, 1996, capital paid-in aggregated $1,770,521,727.
Transactions in Trust shares were as follows:
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------
1996 1995
---------------- ----------------
INVESTMENT SHARES SHARES SHARES
---------------- ----------------
<S> <C> <C>
Shares sold 4,705,771,360 4,729,351,464
------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 43,656,277 31,475,054
------------------------------------------------------------------------------
Shares redeemed (4,562,229,196) (4,809,739,688)
------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from Investment share transactions 187,198,441 (48,913,170)
------------------------------------------------------------------------------ ---------------- ----------------
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------
1996 1995
---------------- ----------------
INSTITUTIONAL SERVICE SHARES SHARES SHARES
---------------- ----------------
<S> <C> <C>
Shares sold 957,114,875 1,330,613,895
------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 1,356,450 1,469,655
------------------------------------------------------------------------------
Shares redeemed (1,012,850,719) (1,363,437,444)
------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from Institutional Service share transactions (54,379,394) (31,353,894)
------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from share transactions 132,819,047 (80,267,064)
------------------------------------------------------------------------------ ---------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Trust's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.50% of the Trust's average daily net assets. The Adviser may
volunarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion
ADMINISTRATIVE PERSONNEL AND SERVICES FEE--Federated Services Company ("FServ"),
under the Administrative Services Agreement, provides the Trust with
administrative personnel and services. The fee paid to FServ is based on the
level of average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least $125,000
per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Trust will pay FSS up to 0.25%
of average daily net assets
Tax-Free Instruments Trust
--------------------------------------------------------------------------------
of the Trust for the period. The fee paid to FSS is used to finance certain
services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive any portion of its fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through
its subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Trust. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Trust's accounting records for
which it receives a fee. The fee is based on the level of the Trust's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the year ended March 31, 1996, the Trust engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $2,820,394,429
and $3,043,295,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
Report of Independent Public Accountants
--------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
TAX-FREE INSTRUMENTS TRUST:
We have audited the accompanying statement of assets and liabilities of Tax-Free
Instruments Trust (a Massachusetts business trust), including the schedule of
portfolio investments, as of March 31, 1996, and the related statement of
operations for the year then ended, and the statement of changes in net assets
for each of the two years in the period then ended, and the financial highlights
for each of the periods presented. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
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 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, 1996, by correspondence with the custodian and broker. 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 referred to
above present fairly, in all material respects, the financial position of
Tax-Free Instruments Trust as of March 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
May 10, 1996
Trustees Officers
-----------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Peter E. Madden Executive Vice President
Gregor F. Meyer John W. McGonigle
John E. Murray, Jr. Executive Vice President and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government, the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Trust's prospectuses which contain facts
concerning its objective and policies, management fees, expenses and other
information.
[LOGO] Federated Investors
Since 1955
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 876924101
Cusip 876924200
