[LOGO OF FEDERATED INVESTORS]
Tax-Free
Instruments
Trust
14th Semi-Annual Report
September 30, 1996
Established 1981
MONEY MARKETS
President's Message
Dear Shareholder:
Tax-Free Instruments Trust was established in 1981, and I'm pleased to present
the 14th Semi-Annual Report to shareholders that covers the six-month period
from April 1, 1996, through September 30, 1996. The report begins with an
interview with the fund's portfolio manager, Jeff A. Kozemchak, Vice President,
Federated Management, and follows with a complete list of the fund's holdings
and its financial statements.
Your cash has been at work pursuing daily tax-free income* from a portfolio of
short-term money market securities issued by municipalities across the U.S. In
addition, the fund is managed to keep the value of your principal stable, while
giving you daily access to your invested cash.** The fund has done so since its
inception.
Dividends paid to shareholders during the entire six-month period totaled $0.01
per Investment Share and $0.02 per Institutional Service Share. At the end of
the period, the fund's net assets stood at $1.6 billion.
Thank you for selecting Tax-Free Instruments Trust as a convenient way to help
keep more of what your cash can earn.
As always, we welcome your comments and suggestions.
Sincerely,
Glen R. Johnson
President
November 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 per share, 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, what is your analysis of the interest rate environment during the six-
month reporting period?
A.
Although the Federal Reserve Board (the `Fed') kept monetary policy on hold over
the six months ended September 30, 1996, the period was characterized by shifts
in market sentiment regarding the strength of the U.S. economy and the extent
and direction of future monetary policy changes. The last move in monetary
policy took place at the end of January 1996, when the Fed lowered the fed funds
target rate by 25 basis points to the current 5.25% amid slowing economic growth
and benign inflationary pressures. In early March, however, the market was
stunned by the release of a much larger than expected increase in non-farm
payroll jobs for the month of February. The solid employment gains continued and
when combined with signs of strength in consumer spending and housing in the
ensuing months, painted a picture of an economy that was clearly more robust
than previously thought. Fears that the economy might be growing faster than the
non-inflationary potential rate of growth surfaced, and sparked market
expectations that the Fed might be inclined to raise the fed funds target rate
to ward off potential inflationary pressures. The market relaxed for a period of
time as signs of the long-awaited slowdown in economic growth began to emerge,
grew nervous again in the face of tight labor market conditions, and then
receded once more.
Movements in short-term interest rates bounced back and forth with the shifts in
market sentiment. Rates rose fairly steadily from the beginning of the reporting
period through early June, as conviction that the next policy move might be a
tightening grew. The yield on the one-year Treasury bill, for example, rose from
5.40% to 5.88%. Market volatility increased over the remainder of the period, as
sentiment regarding the timing of a move by the Fed swayed back and forth with
each economic release. Rates rose in early July as job growth continued to be
strong, then fell again as signs of a long-awaited economic slowdown began to
emerge, but rose once more as fears of developing wage pressures gripped the
market. Finally, rates declined toward the end of the quarter as the Fed emerged
from its September 24 Federal Open Market Committee meeting with monetary policy
unchanged.
Over this latter period, the yield on the one-year Treasury bill rose to 5.98%
in early July, fell to 5.58% by early August, rose to 5.98% by early September,
and ultimately fell to 5.71% by the end of the period.
Q.
What were your strategies for Tax-Free Instruments Trust during the period?
A.
The fund's average maturity at the beginning of the period was approximately 57
days, reflecting our belief that further rate cuts were likely. As the signs of
strength in the economy became more apparent, we lowered the average maturity
target range of the fund from between 55 and 60 days to between 40 and 45 days.
In June and July, two factors combined to present the fund with an attractive
buying opportunity. The first factor was the upward surge in interest rates and
the second was the start of the annual municipal note borrowing season. By early
July, we allowed the purchase of one-year fixed-rate notes to extend the
maturity to between 55 and 60 days. Several months later, in September, the
average maturity was around 54 days, reflecting our neutral to positive outlook
on interest rates.
Q.
How has the fund performed?
A.
The 7-day net yield* for the fund's Institutional Service Shares on September
30, 1996, was 3.20% compared to 3.03% on March 31, 1996. The latest yield was
the equivalent of a 5.30% taxable rate of return for investors in the highest
federal tax bracket. Over the six-month period, the tax-exempt yield averaged
3.05%, which is equivalent to a pre-tax yield of 5.05% for those same
investors.**
For the Investment Shares, the 7-day net yield* on September 30, 1996 was 3.05%
compared to 2.88% on March 31, 1996. The latest yield was equivalent to a 5.05%
pre-tax yield. The average tax-exempt yield over the period was 2.90%, which is
comparable to a taxable yield of 4.80% for those investors in the highest
federal tax bracket.**
* The 7-day net yield is calculated daily, based on the income dividends for
the seven days ending on the date of calculation.
** Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
Q.
As we approach the close of 1996, what is your outlook for rates?
A.
Amid some speculation to the contrary, the Fed voted to keep the fed funds
target rate unchanged at the September Federal Open Market Committee meeting.
Such a decision implies that the Fed is reasonably comfortable with the present
balance between economic growth and the potential for price pressures; however,
it does not preclude the Fed from tightening before the end of 1996, should they
see early signs of inflation. If the Fed does not feel the need to tighten
monetary policy, however, it is likely to be a fine-tuning of the current stance
rather than a prolonged cycle. We expect market volatility in the near term to
remain high, as participants continue to focus close attention on each upcoming
economic release for its impact on monetary policy.
Given this uncertain market environment, we will likely maintain the fund's
average maturity in a neutral range between 50 and 60 days, while taking
advantage of any market volatility that presents buying opportunities.
Tax-Free Instruments Trust
Portfolio of Investments
- --------------------------------------------------------------------------------
September 30, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--99.4%
- -----------------------------------------------------------------------------------------------
ALABAMA--2.2%
--------------------------------------------------------------------------------
$ 3,650,000 Arab, AL IDB, (Series 1989) Weekly VRDNs (SCI Manufacturing, Inc.)/(Bank of
Tokyo-Mitsubishi Ltd. LOC) $ 3,650,000
--------------------------------------------------------------------------------
6,000,000 Homewood, AL IDA Weekly VRDNs (Mountain Brook Inn (Homewood AL))/(SouthTrust
Bank of Alabama, Birmingham LOC) 6,000,000
--------------------------------------------------------------------------------
1,000,000 Madison, AL IDA, (Series A) Weekly VRDNs (Executive Inn)/ (Amsouth Bank N.A.,
Birmingham LOC) 1,000,000
--------------------------------------------------------------------------------
25,400,000 Mobile, AL Port City Medical Clinic Board, Revenue Bonds (Series 1992-A), 3.70%
CP (Mobile, AL Infirmiary Association)/(Rabobank Nederland, Utrecht LOC),
Mandatory Tender 10/8/1996 25,400,000
-------------------------------------------------------------------------------- ----------------
Total 36,050,000
-------------------------------------------------------------------------------- ----------------
ARIZONA--2.3%
--------------------------------------------------------------------------------
15,415,000 Arizona Agricultural Improvement & Power District, 3.70% CP (Salt River Project,
AZ Agricultural Improvement & Power District), Mandatory Tender 12/12/1996 15,415,000
--------------------------------------------------------------------------------
5,180,000 Cochise County, AZ Pollution Control Corp., (Pooled Series 1994A), 3.70% TOBs
(Arizona Electric Power Cooperative, Inc. Project)/ (National Rural Utilities
Cooperative Finance Corp. GTD), Optional Tender 3/1/1997 5,176,115
--------------------------------------------------------------------------------
447,200 Gilbert, AZ IDA Weekly VRDNs (Foxworth-Galbraith Lumber Co.)/ (Bank One, Arizona
N.A. LOC) 447,200
--------------------------------------------------------------------------------
9,725,000 Maricopa County, AZ, IDA (Series 1984) Weekly VRDNs (Gannett Co., Inc.) 9,725,000
--------------------------------------------------------------------------------
1,549,000 Maricopa County, AZ, IDA Weekly VRDNs (Chaparral City Water Services)/(Bank One,
Arizona N.A. LOC) 1,549,000
--------------------------------------------------------------------------------
1,655,000 Pima County, AZ IDA Weekly VRDNs (A & P Investments)/(Bank One, Arizona N.A.
LOC) 1,655,000
--------------------------------------------------------------------------------
5,203,000 Pima County, AZ IDA Weekly VRDNs (BJR Investments, Inc.)/(Bank One, Arizona N.A.
LOC) 5,203,000
-------------------------------------------------------------------------------- ----------------
Total 39,170,315
-------------------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
ARKANSAS--0.5%
--------------------------------------------------------------------------------
$ 5,300,000 Pine Bluff, AR, (Series 1985) Weekly VRDNs (Camden Wire Project)/(Chase
Manhattan Bank N.A., New York LOC) $ 5,300,000
--------------------------------------------------------------------------------
2,500,000 Pocahontas, AR , IDRB (Series 1995) Weekly VRDNs (MacLean ESNA L.P.
Project)/(Northern Trust Co., Chicago, IL LOC) 2,500,000
-------------------------------------------------------------------------------- ----------------
Total 7,800,000
-------------------------------------------------------------------------------- ----------------
CALIFORNIA--7.3%
--------------------------------------------------------------------------------
1,900,000 Barstow Unified School District, CA, 4.25% TRANs, 6/30/1997 1,905,864
--------------------------------------------------------------------------------
9,875,000 (a)California HFA, CDC Municipal Products, Inc. Class A Certificates (Series
1996A) Weekly VRDNs (CDC Municipal Products, Inc. LIQ) 9,875,000
--------------------------------------------------------------------------------
14,000,000 California HFA, Home Mortgage Revenue Bonds (1995 Series E), 3.50% TOBs
(Bayerische Landesbank Girozentrale INV), Mandatory Tender 2/1/1997 14,000,000
--------------------------------------------------------------------------------
1,000,000 California PCFA, (1996 Series C) Daily VRDNs (Pacific Gas & Electric Co.)/(Bank
of America NT and SA, San Francisco LOC) 1,000,000
--------------------------------------------------------------------------------
35,700,000 (a)California Public Capital Improvements Financing Authority, Trust Receipts
(Series 1996 FR-3) Weekly VRDNs (MBIA INS)/(Bank of New York, New York LIQ) 35,700,000
--------------------------------------------------------------------------------
20,000,000 California School Cash Reserve Program Authority, (Series A), 4.75% TRANs (MBIA
INS), 7/2/1997 20,130,075
--------------------------------------------------------------------------------
7,000,000 California State, (Series A), 4.50% RANs, 6/30/1997 7,026,586
--------------------------------------------------------------------------------
21,000,000 California Statewide Communities Development Authority, (1996 Series A), 4.75%
TRANs (FSA INS), 6/30/1997 21,117,540
--------------------------------------------------------------------------------
6,000,000 Orange County, CA Local Transportation Authority, Sales Tax Revenue Notes, 3.80%
CP (Industrial Bank of Japan Ltd., Tokyo LOC), Mandatory Tender 10/16/1996 6,000,000
--------------------------------------------------------------------------------
1,600,000 Riverside County, CA, (Series A) Weekly VRDNs (Riverside, CA Public Facility
Finance)/(Commerzbank AG, Frankfurt and National Westminster Bank, PLC, London
LOCs) 1,600,000
--------------------------------------------------------------------------------
4,000,000 Victor Valley Community College District, CA, 4.00% TRANs (Union Bank of
California LOC), 1/17/1997 4,004,557
-------------------------------------------------------------------------------- ----------------
Total 122,359,622
-------------------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
COLORADO--0.9%
--------------------------------------------------------------------------------
$ 4,000,000 Denver (City & County), CO, (Series 1991-B) Weekly VRDNs (Denver, CO City &
County Airport Authority)/(Sanwa Bank Ltd, Osaka LOC) $ 4,000,000
--------------------------------------------------------------------------------
4,900,000 Mesa County, CO, (Series 1996) Weekly VRDNs (3D Systems Corp.)/(Norwest Bank
Minnesota, Minneapolis LOC) 4,900,000
--------------------------------------------------------------------------------
5,365,000 (a)Thornton, CO, Multifamily Housing Refunding Revenue Bonds (1989 Series A)
Weekly VRDNs (Quail Ridge Project)/(General Electric Capital Corp. LOC) 5,365,000
-------------------------------------------------------------------------------- ----------------
Total 14,265,000
-------------------------------------------------------------------------------- ----------------
CONNECTICUT--0.7%
--------------------------------------------------------------------------------
2,966,585 (a)Clipper Connecticut Tax Exempt Trust, (Series 1994-1) Weekly VRDNs (State
Street Bank and Trust Co. LIQ) 2,966,585
--------------------------------------------------------------------------------
6,000,000 Connecticut Development Health Care Facilities Weekly VRDNs (Independence
Living)/(Chase Manhattan Bank N.A., New York LOC) 6,000,000
--------------------------------------------------------------------------------
300,000 Connecticut Development Health Care Facilities Weekly VRDNs (Independence
Living)/(Credit Local de France LOC) 300,000
--------------------------------------------------------------------------------
2,800,000 Connecticut State Transportation Infrastructure Authority Weekly VRDNs
(Connecticut State)/(Commerzbank AG, Frankfurt LOC) 2,800,000
-------------------------------------------------------------------------------- ----------------
Total 12,066,585
-------------------------------------------------------------------------------- ----------------
FLORIDA--4.3%
--------------------------------------------------------------------------------
6,895,000 Florida State Board of Education Administration, (CR 48)/(Series 1989A), 3.65%
TOBs (Citibank NA, New York LIQ), Optional Tender 12/1/1996 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 12/1/1996 7,340,000
--------------------------------------------------------------------------------
6,900,000 Florida State Board of Education Administration, (CR 49)/(Series 1989A), 3.65%
TOBs (Citibank NA, New York LIQ), Optional Tender 12/1/1996 6,900,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
FLORIDA--CONTINUED
--------------------------------------------------------------------------------
$ 5,000,000 Gulf Breeze, FL, Variable Rate Demand Revenue Bonds (Series 1995A) Weekly VRDNs
(Florida Municipal Bond Fund)/(Barnett Bank, N.A. LOC) $ 5,000,000
--------------------------------------------------------------------------------
1,000,000 Hillsborough County, FL IDA, (Series 1988) Weekly VRDNs (Florida Steel
Corp.)/(Bankers Trust Co., New York LOC) 1,000,000
--------------------------------------------------------------------------------
1,120,000 Jacksonville, FL HFDC Daily VRDNs (River Garden Project)/ (Banque Paribas, Paris
LOC) 1,120,000
--------------------------------------------------------------------------------
2,780,000 Lee County, FL IDA, (Series 1985) Weekly VRDNs (Christian & Missionary Alliance
Foundation )/(Banque Paribas, Paris LOC) 2,780,000
--------------------------------------------------------------------------------
11,650,000 Orange County, FL, 3.65% CP (NationsBank, South LOC), Mandatory Tender
12/17/1996 11,650,000
--------------------------------------------------------------------------------
3,415,000 Orange County, FL, Health Facilities Authority Weekly VRDNs (Mayflower
Retirement Community)/(Rabobank Nederland, Utrecht LOC) 3,415,000
--------------------------------------------------------------------------------
7,400,000 Orange County, FL, Health Facilities Authority, Revenue Bonds (Series 1992)
Weekly VRDNs (Adventist Health System)/(Banque Paribas, Paris LOC) 7,400,000
--------------------------------------------------------------------------------
3,200,000 Pinellas County, FL Health Facility Authority Daily VRDNs (Chase Manhattan Bank
N.A., New York LOC) 3,200,000
--------------------------------------------------------------------------------
15,000,000 Putnam County, FL Development Authority, (Series 1984D), 3.50% TOBs (Seminole
Electric Cooperative, Inc (FL))/(National Rural Utilities Cooperative Finance
Corp. GTD), Optional Tender
12/15/1996 14,977,500
-------------------------------------------------------------------------------- ----------------
Total 71,677,500
-------------------------------------------------------------------------------- ----------------
GEORGIA--8.1%
--------------------------------------------------------------------------------
6,200,000 Atlanta, GA, Urban Residential Finance Authority, Multifamily Rental Housing
Revenue Refunding Bonds (Series 1988A), 3.90% TOBs (West Paces Club Towers
Project)/(Sanwa Bank Ltd, Osaka LOC), Optional Tender 11/1/1996 6,200,000
--------------------------------------------------------------------------------
1,700,000 Bartow County, GA IDA, (First Series 1996) Daily VRDNs (Georgia Power Company
Plant Bowen Project)/(Georgia Power Co. LOC) 1,700,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
GEORGIA--CONTINUED
--------------------------------------------------------------------------------
$ 3,285,000 Cobb County, GA IDA Weekly VRDNs (Atlanta RDC Co.)/(First Union National Bank,
Charlotte, N.C. LOC) $ 3,285,000
--------------------------------------------------------------------------------
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) 6,300,000
--------------------------------------------------------------------------------
2,679,000 Douglas County, GA, 3.74% TANs, 12/30/1996 2,679,895
--------------------------------------------------------------------------------
5,000,000 Floyd County, GA, (Series 1996), 3.49% TANs, 12/31/1996 5,001,080
--------------------------------------------------------------------------------
3,000,000 Franklin County, GA Industrial Building Authority, (Series 1995) Weekly VRDNs
(Bosal Industries, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) 3,000,000
--------------------------------------------------------------------------------
2,200,000 Fulton County, GA IDA Weekly VRDNs (Automatic Data Processing, Inc.) 2,200,000
--------------------------------------------------------------------------------
3,835,000 Georgia State HFA, (Series 1987B), 3.60% TOBs (Citibank NA, New York LIQ),
Optional Tender 12/1/1996 3,835,000
--------------------------------------------------------------------------------
2,775,000 Glynn County, GA, 3.60% TANs, 12/31/1996 2,776,339
--------------------------------------------------------------------------------
1,800,000 Gwinnett County, GA IDA Daily VRDNs (Volvo)/(Union Bank of Switzerland, Zurich
LOC) 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) 1,280,000
--------------------------------------------------------------------------------
1,370,000 (a)Marietta, GA Housing Authority, Multifamily Housing Revenue Bonds (Series
1995) Weekly VRDNs (Chalet Apartments Project)/ (General Electric Capital Corp.
LOC) 1,370,000
--------------------------------------------------------------------------------
2,400,000 Metropolitan Atlanta Rapid Transit Authority, Tender Option Custodial Receipts
(BT-69), 3.80% TOBs (AMBAC INS)/(Bankers Trust Co., New York LIQ), Mandatory
Tender 10/3/1996 2,400,000
--------------------------------------------------------------------------------
1,600,000 Municipal Electric Authority of Georgia, (Series 1985A), 3.60% CP (Bayerische
Landesbank Girozentrale, Credit Suisse, Zurich and Morgan Guaranty Trust Co.,
New York LOCs), Mandatory Tender 10/7/1996 1,600,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
GEORGIA--CONTINUED
--------------------------------------------------------------------------------
$ 10,000,000 Municipal Electric Authority of Georgia, (Series 1985A), 3.70% CP (Bayerische
Landesbank Girozentrale, Credit Suisse, Zurich and Morgan Guaranty Trust Co.,
New York LOCs), Mandatory Tender 12/10/1996 $ 10,000,000
--------------------------------------------------------------------------------
20,000,000 Municipal Electric Authority of Georgia, (Series 1994B), 3.80% CP (ABN AMRO Bank
N.V., Amsterdam LOC), Mandatory Tender
1/15/1997 20,000,000
--------------------------------------------------------------------------------
32,250,000 Municipal Electric Authority of Georgia, (Series 1994D), 3.60% CP (ABN AMRO Bank
N.V., Amsterdam LOC), Mandatory Tender
11/12/1996 32,250,000
--------------------------------------------------------------------------------
6,800,000 Richmond County, GA Development Authority, Solid Waste Disposal Revenue Bonds,
(Series 1995) Weekly VRDNs (Federal Paper Board Co., Inc.)/(Wachovia Bank of
Georgia NA, Atlanta LOC) 6,800,000
--------------------------------------------------------------------------------
2,400,000 Rockdale County, GA Development Authority, (Series 1995) Weekly VRDNs (Great
Southern Wood Preserving Co.)/(SunTrust Bank, Central Florida LOC) 2,400,000
--------------------------------------------------------------------------------
2,500,000 Rockdale County, GA Hospital Authority, Revenue Anticipation Certificates
(Series 1994) Weekly VRDNs (Rockdale Hospital)/ (SunTrust Bank, Atlanta LOC) 2,500,000
--------------------------------------------------------------------------------
4,600,000 Roswell, GA Housing Authority, Multifamily Housing Refunding Revenue Bonds
(Series 1988A) Weekly VRDNs (Belcourt Ltd. Project)/(Northern Trust Co.,
Chicago, IL LOC) 4,600,000
--------------------------------------------------------------------------------
11,250,000 Savannah, GA EDA, (Series 1995A) Weekly VRDNs
(Home Depot, Inc.) 11,250,000
-------------------------------------------------------------------------------- ----------------
Total 135,227,314
-------------------------------------------------------------------------------- ----------------
ILLINOIS--7.8%
--------------------------------------------------------------------------------
1,550,000 Champaign, IL, IDRB Weekly VRDNs (Christie Clinic)/(National City Bank, Indiana
LOC) 1,550,000
--------------------------------------------------------------------------------
4,200,000 Chicago O'Hare International Airport, Bonds (Series 1983A) Daily VRDNs (American
Airlines)/(Westdeutsche Landesbank Girozentrale LOC) 4,200,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
ILLINOIS--CONTINUED
--------------------------------------------------------------------------------
$ 1,033,000 Illinois Development Finance Authority Weekly VRDNs (Newlywed Food)/(Mellon Bank
NA, Pittsburgh LOC) $ 1,033,000
--------------------------------------------------------------------------------
2,400,000 Illinois Development Finance Authority, EDRB (Series 1995) Weekly VRDNs (Evapco,
Inc. Project)/(Nationsbank, N.A. LOC) 2,400,000
--------------------------------------------------------------------------------
3,800,000 Illinois Development Finance Authority, IDRB (Series 1995) Weekly VRDNs (Dickson
Weatherproof Nail Co. Project)/(Lasalle National Bank, Chicago LOC) 3,800,000
--------------------------------------------------------------------------------
10,100,000 Illinois Development Finance Authority, PCR Daily VRDNs (Diamond Star Motors
Corp.)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 10,100,000
--------------------------------------------------------------------------------
11,000,000 Illinois Development Finance Authority, PCR, (Series 1996A) Weekly VRDNs
(Commonwealth Edison Co.)/(AMBAC INS)/(Bank of New York, New York LIQ) 11,000,000
--------------------------------------------------------------------------------
24,100,000 Illinois Development Finance Authority, Variable/Fixed Rate Demand Revenue
Bonds, (Series 1996) Weekly VRDNs (Chicago Symphony Orchestra Project)/(Bank of
America Illinois LOC) 24,100,000
--------------------------------------------------------------------------------
7,500,000 Illinois Educational Facilities Authority, 3.65% CP (Field Museum of Natural
History)/(Northern Trust Co., Chicago, IL LOC), Mandatory Tender 11/21/1996 7,500,000
--------------------------------------------------------------------------------
40,000,000 Illinois Health Facilities Authority, Revenue Bonds (Series 1985B) Weekly VRDNs
(OSF Health Care Systems)/(Bank of America Illinois and Rabobank Nederland,
Utrecht LIQs) 40,000,000
--------------------------------------------------------------------------------
2,200,000 Martinsville, IL, IDRB (Series 1995) Weekly VRDNs (PAP-R Products Company
Project)/(Bank One, Chicago LOC) 2,200,000
--------------------------------------------------------------------------------
4,250,000 Mendota, IL, IDRB (Series 1995) Weekly VRDNs (Minnesota Diversified Products,
Inc. Project)/(Norwest Bank Minnesota, Minneapolis LOC) 4,250,000
--------------------------------------------------------------------------------
1,900,000 Naperville, IL, Economic Development Revenue Refunding Bonds (Series 1994)
Weekly VRDNs (Independence Village Associates, Ltd Project)/(First Bank NA,
Minneapolis LOC) 1,900,000
--------------------------------------------------------------------------------
2,500,000 Oakbrook Terrace, IL, IDR (Series 1993) Weekly VRDNs (La Quinta Inns,
Inc.)/(Nationsbank of Texas, N.A. LOC) 2,500,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
ILLINOIS--CONTINUED
--------------------------------------------------------------------------------
$ 3,000,000 Peoria, IL, (Series 1996) Weekly VRDNs (J.T. Fennell Company, Inc.
Project)/(Bank One, Chicago LOC) $ 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 2,550,000
--------------------------------------------------------------------------------
7,750,000 Winnebago & Boone County, IL, 4.35% TANs (School District Number 205)/(FSA INS),
10/30/1996 7,757,242
-------------------------------------------------------------------------------- ----------------
Total 129,840,242
-------------------------------------------------------------------------------- ----------------
INDIANA--1.7%
--------------------------------------------------------------------------------
2,200,000 Bluffton, IN, Economic Development Refunding Revenue Bonds Weekly VRDNs (Blount,
Inc.)/(Morgan Guaranty Trust Co., New York LOC) 2,200,000
--------------------------------------------------------------------------------
3,165,000 Hamilton County, IN, EDRB (Series 1995) Weekly VRDNs (Fabcon L.L.C.
Project)/(Norwest Bank Minnesota, Minneapolis LOC) 3,165,000
--------------------------------------------------------------------------------
5,860,000 Huntington County, IN Community School Corp., 3.50% TANs,
12/31/1996 5,861,416
--------------------------------------------------------------------------------
2,440,000 Kendallville, IN, IDRB (Series 1995) Weekly VRDNs (Rivnut Real Estate, Ltd.
Project)/(National City, Northeast LOC) 2,440,000
--------------------------------------------------------------------------------
5,000,000 Muncie, IN Community Schools, 3.90% TANs, 12/31/1996 5,003,609
--------------------------------------------------------------------------------
7,000,000 Richmond, IN EDA Weekly VRDNs (Gannett Co., Inc.) 7,000,000
--------------------------------------------------------------------------------
3,250,000 Wayne Township, IN Metro School District, Tax Anticipation Warrants, 4.18% TANs,
12/31/1996 3,251,414
-------------------------------------------------------------------------------- ----------------
Total 28,921,439
-------------------------------------------------------------------------------- ----------------
IOWA--0.3%
--------------------------------------------------------------------------------
5,500,000 Iowa Finance Authority, (Series 1996) Weekly VRDNs (Wittern Realty, Inc.
Project)/(Norwest Bank Minnesota, Minneapolis LOC) 5,500,000
-------------------------------------------------------------------------------- ----------------
KANSAS--0.5%
--------------------------------------------------------------------------------
6,000,000 Kansas Development Finance Authority, Multifamily Housing Revenue Bonds (Series
1995) Weekly VRDNs (First Kansas State Partnership, L.P.)/(Boatmen's National
Bank of St. Louis LOC) 6,000,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
KANSAS--CONTINUED
--------------------------------------------------------------------------------
$ 2,000,000 Olathe, KS, Industrial Revenue Bonds (Series 1995) Weekly VRDNs (Garmin
International, Inc. Project)/(Boatmen's National Bank of St. Louis LOC) $ 2,000,000
-------------------------------------------------------------------------------- ----------------
Total 8,000,000
-------------------------------------------------------------------------------- ----------------
KENTUCKY--4.7%
--------------------------------------------------------------------------------
1,800,000 Boone County, KY, (Series 1996) Weekly VRDNs (Western States Envelope
Company)/(Bank One, Milwaukee, WI N.A. LOC) 1,800,000
--------------------------------------------------------------------------------
5,000,000 Clark County, KY, Industrial Building Revenue Refunding Bonds (Series 1995)
Weekly VRDNs (International Processing Corp)/(Bank One, Lexington, NA LOC) 5,000,000
--------------------------------------------------------------------------------
10,000,000 (a)Clipper KentuckyTax-Exempt Trust Class A Certificates of Participation,
(Series 1996-4) Weekly VRDNs (Kentucky Turnpike Authority)/(State Street Bank
and Trust Co. LIQ) 10,000,000
--------------------------------------------------------------------------------
5,740,000 Henderson County, KY, (Series 1996) Weekly VRDNs (Audubon Metals LLC
Project)/(Harris Trust & Savings Bank, Chicago LOC) 5,740,000
--------------------------------------------------------------------------------
2,060,000 Jefferson County, KY, Industrial Building Revenue Bonds (Series 1995) Weekly
VRDNs (Derby Industries, Inc. Project)/(Liberty National Bank & Trust Co. LOC) 2,060,000
--------------------------------------------------------------------------------
12,000,000 Kentucky Interlocal School Transportation Association, (Series A), 4.05% TRANs,
6/30/1997 12,000,000
--------------------------------------------------------------------------------
6,200,000 Kentucky Pollution Abatement & Water Resource Finance Authority Daily VRDNs
(Toyota Motor Credit Corp.) 6,200,000
--------------------------------------------------------------------------------
34,000,000 Owensboro, KY, (Series 1996) Weekly VRDNs (Owensboro Mercy Health System, Inc.
Project)/(Bank of America Illinois LOC) 34,000,000
--------------------------------------------------------------------------------
1,800,000 Owensboro, KY, Limited Obligation Revenue Bonds, 3.70% TOBs (Dart Polymers)/(NBD
Bank, Michigan LOC), Optional Tender
12/1/1996 1,800,000
-------------------------------------------------------------------------------- ----------------
Total 78,600,000
-------------------------------------------------------------------------------- ----------------
MAINE--0.4%
--------------------------------------------------------------------------------
5,000,000 Cumberland County, ME, 3.50% TANs, 12/31/1996 5,000,841
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
MAINE--CONTINUED
--------------------------------------------------------------------------------
$ 2,250,000 Gardiner, ME IDB Weekly VRDNs (Associated Grocers)/(Westpac Banking, Corp.,
Sydney LOC) $ 2,250,000
-------------------------------------------------------------------------------- ----------------
Total 7,250,841
-------------------------------------------------------------------------------- ----------------
MARYLAND--1.7%
--------------------------------------------------------------------------------
1,000,000 Maryland Health & Higher Educational Facilities Authority, (Series 1992A) Weekly
VRDNs (Carroll County, MD General Hospital)/ (Nationsbank, N.A. LOC) 1,000,000
--------------------------------------------------------------------------------
6,300,000 Maryland State Community Development Administration, (1987 Series 4), 3.60% TOBs
(First National Bank of Chicago LIQ), Optional Tender 10/1/1996 6,300,000
--------------------------------------------------------------------------------
10,220,000 Maryland State Department of Transportation, 3.625% Bonds,
6/15/1997 10,197,005
--------------------------------------------------------------------------------
1,805,000 Maryland State IDFA, (Series 1991) Weekly VRDNs (Maryland Academy of Sciences
Facility)/(Nationsbank, N.A. LOC) 1,805,000
--------------------------------------------------------------------------------
9,000,000 Montgomery County, MD Housing Opportunities Commission, Multifamily Housing
Revenue Bonds (1995 Series B), 3.90% BANs, 11/14/1996 9,000,000
-------------------------------------------------------------------------------- ----------------
Total 28,302,005
-------------------------------------------------------------------------------- ----------------
MASSACHUSETTS--2.7%
--------------------------------------------------------------------------------
10,300,450 (a)Clipper, MA Tax Exempt Trust Weekly VRDNs (State Street Bank and Trust Co.
LIQ) 10,300,450
--------------------------------------------------------------------------------
3,000,000 Mashpee, MA, 4.00% BANs, 2/7/1997 3,003,067
--------------------------------------------------------------------------------
3,000,000 Massachusetts HEFA Weekly VRDNs (Harvard University) 3,000,000
--------------------------------------------------------------------------------
5,700,000 Massachusetts IFA Weekly VRDNs (Kendall Square Entity)/(State Street Bank and
Trust Co. LOC) 5,700,000
--------------------------------------------------------------------------------
2,000,000 Massachusetts IFA, (Series 1992A) Weekly VRDNs (Ogden Haverhill)/(Union Bank of
Switzerland, Zurich LOC) 2,000,000
--------------------------------------------------------------------------------
5,000,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Goddard House)/ (Fleet Bank of
New York LOC) 5,000,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
--------------------------------------------------------------------------------
$ 4,100,000 Massachusetts IFA, IDRB (Series 1995) Weekly VRDNs (Dunsirn Industries, Inc.
Project)/(Bank One, Milwaukee, WI N.A. LOC) $ 4,100,000
--------------------------------------------------------------------------------
5,800,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue
Bonds (1994 Series C) Weekly VRDNs (Canadian Imperial Bank of Commerce, Toronto
LOC) 5,800,000
--------------------------------------------------------------------------------
5,480,000 Springfield, MA , 4.25% BANs (Fleet National Bank, Providence, R.I. LOC),
2/14/1997 5,488,872
-------------------------------------------------------------------------------- ----------------
Total 44,392,389
-------------------------------------------------------------------------------- ----------------
MICHIGAN--1.1%
--------------------------------------------------------------------------------
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) 3,500,000
--------------------------------------------------------------------------------
850,000 Dearborn, MI Economic Development Corp, (Series 1990) Weekly VRDNs (Exhibit
Productions, Inc. Project)/(First of America Bank-- Illinois LOC) 850,000
--------------------------------------------------------------------------------
1,200,000 Garden City, MI School District, State Aid Notes, 4.30% RANs (NBD Bank, Michigan
LOC), 4/15/1997 1,203,104
--------------------------------------------------------------------------------
2,290,000 Michigan State Hospital Finance Authority, (Series 1994) Weekly VRDNs (Mt.
Clemens General Hospital)/(Comerica Bank, Detroit, MI LOC) 2,290,000
--------------------------------------------------------------------------------
2,300,000 Michigan State Hospital Finance Authority, (Series A) Weekly VRDNs (OSF Health
Care Systems) 2,300,000
--------------------------------------------------------------------------------
900,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1991) Weekly
VRDNs (Martin Luther Memorial Home, Inc.)/ (National Australia Bank, Ltd.,
Melbourne LOC) 900,000
--------------------------------------------------------------------------------
3,300,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly
VRDNs (Wellness Plan Project)/(NBD Bank, Michigan LOC) 3,300,000
--------------------------------------------------------------------------------
1,750,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds, Series 1995 Weekly
VRDNs (Welch Properties Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) 1,750,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
MICHIGAN--CONTINUED
--------------------------------------------------------------------------------
$ 1,500,000 Michigan Strategic Fund, Obligation Revenue Bonds (Series 1995) Weekly VRDNs
(Wayne Disposal-Oakland, Inc. Project)/(Comerica Bank, Detroit, MI LOC) $ 1,500,000
-------------------------------------------------------------------------------- ----------------
Total 17,593,104
-------------------------------------------------------------------------------- ----------------
MINNESOTA--1.4%
--------------------------------------------------------------------------------
1,345,000 Byron, MN IDB Weekly VRDNs (Schmidt Printing)/(Norwest Bank Minnesota,
Minneapolis LOC) 1,345,000
--------------------------------------------------------------------------------
7,000,000 Minnesota State Higher Education Coordinating Board, 1992 (Series B) Weekly
VRDNs (First Bank NA, Minneapolis LIQ) 7,000,000
--------------------------------------------------------------------------------
10,000,000 Rochester, MN Health Care Facility Authority Weekly VRDNs (Mayo Foundation) 10,000,000
--------------------------------------------------------------------------------
4,500,000 Rochester, MN Health Care Facility Authority Weekly VRDNs (Mayo Foundation) 4,500,000
-------------------------------------------------------------------------------- ----------------
Total 22,845,000
-------------------------------------------------------------------------------- ----------------
MISSISSIPPI--0.2%
--------------------------------------------------------------------------------
4,000,000 Warren County, MS IDA Weekly VRDNs (Vesper Corp.)/(PNC Bank, N.A. LOC) 4,000,000
-------------------------------------------------------------------------------- ----------------
MISSOURI--0.6%
--------------------------------------------------------------------------------
4,840,000 Missouri Development Finance Board, (Series 1995) Weekly VRDNs (Wilson Trailer
Sales, Inc. Project)/(Norwest Bank Minnesota, Minneapolis LOC) 4,840,000
--------------------------------------------------------------------------------
5,000,000 Missouri State Environmental Improvement & Energy Authority, 3.75% CP (Kansas
City Power And Light Co.), Mandatory Tender 11/6/1996 5,000,000
--------------------------------------------------------------------------------
600,000 Sedalia, MO IDA Weekly VRDNs (Cooper Industries, Inc.)/(Sanwa Bank Ltd, Osaka
LOC) 600,000
-------------------------------------------------------------------------------- ----------------
Total 10,440,000
-------------------------------------------------------------------------------- ----------------
MONTANA--0.4%
--------------------------------------------------------------------------------
6,000,000 Forsyth, Rosebud County MT, PCR Daily VRDNs (Pacificorp)/ (Deutsche Bank, AG
LOC) 6,000,000
-------------------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
NEBRASKA--0.7%
--------------------------------------------------------------------------------
$ 1,880,000 Douglas County, NE Weekly VRDNs (Majors Plastics, Inc.)/ (Norwest Bank
Minnesota, Minneapolis LOC) $ 1,880,000
--------------------------------------------------------------------------------
1,205,000 Douglas County, NE, Industrial Development Revenue Refunding Bonds (Series 1994)
Weekly VRDNs (Omaha Fixture Manufacturing Project)/(NBD Bank, Michigan LOC) 1,205,000
--------------------------------------------------------------------------------
2,065,000 Douglas County, NE, Subordinated IDRB (Series 1995) Weekly VRDNs (Aksarben
Foods, Inc. Project)/(Norwest Bank Minnesota, Minneapolis LOC) 2,065,000
--------------------------------------------------------------------------------
6,500,000 Lincoln, NE, (Series 1995), 3.65% CP (Lincoln Electric System)/ (Morgan Guaranty
Trust Co., New York LIQ), Mandatory Tender 12/13/1996 6,500,000
-------------------------------------------------------------------------------- ----------------
Total 11,650,000
-------------------------------------------------------------------------------- ----------------
NEW HAMPSHIRE--2.2%
--------------------------------------------------------------------------------
4,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.70% CP (New
England Power Co.), Mandatory Tender 10/23/1996 4,000,000
--------------------------------------------------------------------------------
9,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.75% CP (New
England Power Co.), Mandatory Tender 10/21/1996 9,000,000
--------------------------------------------------------------------------------
7,100,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.80% CP (New
England Power Co.), Mandatory Tender 10/17/1996 7,100,000
--------------------------------------------------------------------------------
10,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.85% CP (New
England Power Co.), Mandatory Tender 1/24/1997 10,000,000
--------------------------------------------------------------------------------
7,000,000 Rockingham County, NH, 4.00% TANs, 12/31/1996 7,006,825
-------------------------------------------------------------------------------- ----------------
Total 37,106,825
-------------------------------------------------------------------------------- ----------------
NEW JERSEY--1.9%
--------------------------------------------------------------------------------
3,399,864 Haddonfield, NJ, 3.94% BANs, 6/6/1997 3,401,363
--------------------------------------------------------------------------------
7,875,000 Manchester Township, NJ, (Series 1996B), 4.25% BANs, 12/5/1996 7,879,768
--------------------------------------------------------------------------------
8,300,000 New Jersey EDA Weekly VRDNs (Center-For-Aging--Applewood Estates)/(Banque
Paribas, Paris LOC) 8,300,000
--------------------------------------------------------------------------------
301,677 New Jersey EDA Weekly VRDNs (H.L. Bhasin)/(Ford Motor Credit Corp. LIQ)/(Chase
Manhattan Bank N.A., New York LOC) 301,677
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
NEW JERSEY--CONTINUED
--------------------------------------------------------------------------------
$ 1,000,000 New Jersey EDA Weekly VRDNs (YM-YWHA of Bergen County, NJ)/(Bank of New York,
New York LOC) $ 1,000,000
--------------------------------------------------------------------------------
4,100,000 New Jersey EDA, (Series 1985) Weekly VRDNs (Seton Co.)/(Banque Paribas, Paris
LOC) 4,100,000
--------------------------------------------------------------------------------
3,500,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Hillcrest Health Service System,
Inc.)/(Industrial Bank of Japan Ltd., Tokyo LOC) 3,500,000
--------------------------------------------------------------------------------
2,947,500 Sparta Township, NJ, 4.125% BANs, 6/13/1997 2,952,951
-------------------------------------------------------------------------------- ----------------
Total 31,435,759
-------------------------------------------------------------------------------- ----------------
NEW MEXICO--1.4%
--------------------------------------------------------------------------------
6,500,000 Albuquerque, NM, (Series 1996) Weekly VRDNs (Rose's Southwest Papers, Inc.
Project)/(Norwest Bank Minnesota, Minneapolis LOC) 6,500,000
--------------------------------------------------------------------------------
2,000,000 Albuquerque, NM, (Series 1996A) Weekly VRDNs (El Encanto, Inc. Project)/(Norwest
Bank Minnesota, Minneapolis LOC) 2,000,000
--------------------------------------------------------------------------------
3,300,000 Albuquerque, NM, Refunding Revenue Bonds (Series 1992) Weekly VRDNs (Charter
Hospital of Albuquerque, Inc.)/(Bankers Trust Co., New York LOC) 3,300,000
--------------------------------------------------------------------------------
6,300,000 Las Cruces, NM, IDRB (Series 1994A) Weekly VRDNs (F & A Dairy Products, Inc.
Project)/(Norwest Bank Minnesota, Minneapolis LOC) 6,300,000
--------------------------------------------------------------------------------
5,000,000 New Mexico Mortgage Finance Authority, Single Family Mortgage Program Bonds
(Series 1996A), 3.25% TOBs (Westdeutsche Landesbank Girozentrale INV), Mandatory
Tender 12/31/1996 5,000,000
-------------------------------------------------------------------------------- ----------------
Total 23,100,000
-------------------------------------------------------------------------------- ----------------
NEW YORK--9.9%
--------------------------------------------------------------------------------
10,000,000 Albany County, NY, (Series C), 3.50% BANs, 2/19/1997 10,013,054
--------------------------------------------------------------------------------
10,000,000 Clyde-Savannah Central School District, NY, 4.625% BANs,
6/27/1997 10,038,946
--------------------------------------------------------------------------------
5,000,000 Nassau County, NY, (Series 1996A), 4.00% RANs, 3/5/1997 5,012,931
--------------------------------------------------------------------------------
13,300,000 New York City Municipal Water Finance Authority, Water and Sewer System Revenue
Bonds (Series 1995 A) Daily VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc.
LIQ) 13,300,000
--------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
NEW YORK--CONTINUED
--------------------------------------------------------------------------------
$ 16,000,000 New York City, NY, (Series A), 4.50% TANs, 2/12/1997 $ 16,041,121
14,500,000 New York City, NY, UT GO Fiscal 1994 (Series H-3), 3.65% CP (FSA INS)/(State
Street Bank and Trust Co. LIQ), Mandatory Tender
11/12/1996 14,500,000
--------------------------------------------------------------------------------
9,500,000 New York State Energy Research & Development Authority, (Series 1985A), 3.25%
TOBs (Long Island Lighting Co.)/(Deutsche Bank, AG LOC), Optional Tender
3/1/1997 9,471,500
--------------------------------------------------------------------------------
14,000,000 New York State Energy Research & Development Authority, 3.30% TOBs (New York
State Electric and Gas Corp.)/(J.P. Morgan Delaware, Wilmington LOC), Optional
Tender 3/15/1997 13,941,900
--------------------------------------------------------------------------------
6,400,000 New York State HFA Weekly VRDNs (Special Surgery Hospital)/ (Chase Manhattan
Bank N.A., New York LOC) 6,400,000
--------------------------------------------------------------------------------
3,300,000 New York State HFA, Revenue Bonds Weekly VRDNs (Normandie Corp.)/(Societe
Generale, Paris LOC) 3,300,000
--------------------------------------------------------------------------------
15,500,000 New York State Local Government Assistance Corp., (Series B) Weekly VRDNs (Bank
of Nova Scotia, Toronto LOC) 15,500,000
--------------------------------------------------------------------------------
6,000,000 New York State, (Series A), 4.50% Bonds, 7/15/1997 6,028,736
--------------------------------------------------------------------------------
4,500,000 Niagara County, NY IDA Weekly VRDNs (Allegheny Ludlum Corp.)/(PNC Bank, N.A.
LOC) 4,500,000
--------------------------------------------------------------------------------
4,000,000 South Country Central School District, NY, 4.50% TANs, 6/25/1997 4,012,640
--------------------------------------------------------------------------------
2,700,000 Sullivan County, NY, Custodial Receipts (2nd Series 1996-B), 4.50% BANs (State
Street Bank and Trust Co. LOC), 3/20/1997 2,710,275
--------------------------------------------------------------------------------
6,035,000 Sullivan County, NY, Custodial Receipts (2nd Series 1996-C), 4.50% TANs (State
Street Bank and Trust Co. LOC), 3/20/1997 6,057,967
--------------------------------------------------------------------------------
3,768,000 Syracuse, NY, 3.60% BANs, 2/28/1997 3,759,183
--------------------------------------------------------------------------------
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) 3,000,000
--------------------------------------------------------------------------------
7,000,000 (a)VRDC/IVRC Trust, (Series 1993B) Weekly VRDNs (Metropolitan Transportation
Authority, New York)/(AMBAC INS)/(Hong Kong & Shanghai Banking Corp. LIQ) 7,000,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
NEW YORK--CONTINUED
--------------------------------------------------------------------------------
$ 11,600,000 (a)VRDC/IVRC Trust, (Series 1993G) Weekly VRDNs (St. Lukes Roosevelt Hospital
Center)/(FHA INS)/(Hong Kong & Shanghai Banking Corp. LIQ) $ 11,600,000
-------------------------------------------------------------------------------- ----------------
Total 166,188,253
-------------------------------------------------------------------------------- ----------------
NORTH CAROLINA--4.5%
--------------------------------------------------------------------------------
1,000,000 Alamance County, NC Industrial Facilities & Pollution Control Financing
Authority, (Series A) Weekly VRDNs (Culp, Inc.)/ (Wachovia Bank of NC, NA,
Winston-Salem LOC) 1,000,000
--------------------------------------------------------------------------------
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) 4,600,000
--------------------------------------------------------------------------------
1,000,000 Cleveland County, NC Industrial Facilities and Pollution Control Financing
Authority Weekly VRDNs (PPG Industries, Inc.) 1,000,000
--------------------------------------------------------------------------------
2,400,000 Greensboro, NC , Certificates of Participation 1994 Equipment Project Weekly
VRDNs (Greensboro, NC Center City Corp.)/ (Wachovia Bank of Georgia NA, Atlanta
LIQ) 2,400,000
--------------------------------------------------------------------------------
3,825,000 Guilford County, NC Industrial Facilities & PCFA, (Series 1989) Weekly VRDNs
(Culp, Inc.)/(Wachovia Bank of NC, NA, Winston-Salem LOC) 3,825,000
--------------------------------------------------------------------------------
3,600,000 Lee County, NC Industrial Facility & PCFA, (Series 1989) Weekly VRDNs (Avondale
Mills, Inc.)/(SunTrust Bank, Atlanta LOC) 3,600,000
--------------------------------------------------------------------------------
14,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs (Weyerhaeuser Co.) 14,000,000
--------------------------------------------------------------------------------
3,680,000 Mecklenberg County, NC Industrial Facility & PCFA, (Series 1988) Weekly VRDNs
(Florida Steel Corp.)/(Bankers Trust Co., New York LOC) 3,680,000
--------------------------------------------------------------------------------
1,010,000 (a)NCNB Pooled Tax-Exempt Trust , (Series 1990A) Weekly VRDNs (NCNB Tax Exempt
Trust 1990a)/(Nationsbank, N.A. LOC) 1,010,000
--------------------------------------------------------------------------------
3,695,000 (a)NCNB Pooled Tax-Exempt Trust , (Series 1990B) Weekly VRDNs (NCNB Tax-Exempt
Trust 1990b)/(Nationsbank, N.A. LOC) 3,695,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
--------------------------------------------------------------------------------
$ 4,000,000 New Hanover County, NC PCFA, (Series 1984) Weekly VRDNs (American Hoist &
Derrick Company Project)/(First Union National Bank, Charlotte, N.C. LOC) $ 4,000,000
--------------------------------------------------------------------------------
2,250,000 New Hanover County, NC, GO School Bonds, (Series 1995) Weekly VRDNs (Wachovia
Bank of NC, NA, Winston-Salem LIQ) 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) 2,250,000
--------------------------------------------------------------------------------
3,000,000 North Carolina Agricultural Finance Authority, (Series 1996) Weekly VRDNs
(Coastal Carolina Gin L.L.C. Project)/(Branch Banking & Trust Co, Wilson LOC) 3,000,000
--------------------------------------------------------------------------------
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) 2,260,000
--------------------------------------------------------------------------------
2,000,000 North Carolina Educational Facilities Finance Agency, (Series 1990) Weekly VRDNs
(Bowman Gray School of Medicine)/(Wachovia Bank of NC, NA, Winston-Salem LOC) 2,000,000
--------------------------------------------------------------------------------
6,500,000 North Carolina Medical Care Commission Hospital , Revenue Bonds (Series 1992B)
Weekly VRDNs (North Carolina Baptist) 6,500,000
--------------------------------------------------------------------------------
1,200,000 North Carolina Medical Care Commission Hospital , Revenue Bonds (Series 1993)
Weekly VRDNs (Moses H. Cone Memorial ) 1,200,000
--------------------------------------------------------------------------------
2,100,000 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) 2,100,000
--------------------------------------------------------------------------------
2,500,000 Onslow County, NC Industrial Facilities & Pollution Control Financing Authority
Weekly VRDNs (Mine Safety Appliances Co.)/ (Sanwa Bank Ltd, Osaka LOC) 2,500,000
--------------------------------------------------------------------------------
2,200,000 Rutherford County, NC, Industrial Facilities Pollution Control Financing
Authority Weekly VRDNs (Spring-Ford Knitting Co.)/ (Branch Banking & Trust Co,
Wilson LOC) 2,200,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <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) $ 6,350,000
-------------------------------------------------------------------------------- ----------------
Total 75,420,000
-------------------------------------------------------------------------------- ----------------
NORTH DAKOTA--0.2%
--------------------------------------------------------------------------------
3,275,000 Fargo, ND, IDRB (Series 1994) Weekly VRDNs (Pan-O-Gold Baking Co.
Project)/(Norwest Bank Minnesota, Minneapolis LOC) 3,275,000
-------------------------------------------------------------------------------- ----------------
OHIO--0.0%
--------------------------------------------------------------------------------
300,000 Cuyahoga County, OH IDA Weekly VRDNs (Health Hill)/(Union Bank of Switzerland,
Zurich LOC) 300,000
--------------------------------------------------------------------------------
500,000 Oakwood Village, OH IDA Weekly VRDNs (Oak Leaf Industries)/ (First Union
National Bank, Charlotte, N.C. LOC) 500,000
-------------------------------------------------------------------------------- ----------------
Total 800,000
-------------------------------------------------------------------------------- ----------------
OKLAHOMA--0.7%
--------------------------------------------------------------------------------
8,000,000 Broken Arrow, OK EDA Weekly VRDNs (Blue Bell Creameries)/ (Banque Nationale de
Paris LOC) 8,000,000
--------------------------------------------------------------------------------
2,295,000 Claremore, OK IDA Weekly VRDNs (Baldor Electric Co.)/(Wachovia Bank of Georgia
NA, Atlanta LOC) 2,295,000
--------------------------------------------------------------------------------
2,080,000 Oklahoma County, OK Finance Authority, (Series 1996) Weekly VRDNs (Avalon
Project)/(Bank One, Texas N.A. LOC) 2,080,000
-------------------------------------------------------------------------------- ----------------
Total 12,375,000
-------------------------------------------------------------------------------- ----------------
PENNSYLVANIA--5.6%
--------------------------------------------------------------------------------
6,850,000 Berks County, PA, (Series 1996), 4.50% TRANs, 12/31/1996 6,858,186
--------------------------------------------------------------------------------
3,000,000 Erie County, PA Hospital Authority Weekly VRDNs (St. Mary's Hospital Erie,
PA)/(PNC Bank, N.A. LOC) 3,000,000
--------------------------------------------------------------------------------
2,000,000 Montgomery County, PA IDA Weekly VRDNs (Plymouth Woods)/ (PNC Bank, N.A. LOC) 2,000,000
--------------------------------------------------------------------------------
3,500,000 Montgomery County, PA IDA, (Series 1984) Weekly VRDNs (Seton Co.)/(Banque
Paribas, Paris LOC) 3,500,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------------------------------
$ 6,835,000 Montgomery County, PA IDA, Commercial Development Revenue Bonds (Series 1992)
Weekly VRDNs (Hickory Pointe Project)/(First Union National Bank, North LOC) $ 6,835,000
--------------------------------------------------------------------------------
1,100,000 Pennsylvania Education Development Authority, (1995 Series E) Weekly VRDNs (Home
Nursing Agency Affiliates Project)/(PNC Bank, N.A. LOC) 1,100,000
--------------------------------------------------------------------------------
6,900,000 Philadelphia Redevelopment Authority, Multi-Family Revenue Bonds (Series 1985)
Weekly VRDNs (Franklin Town Towers)/ (Marine Midland Bank N.A., Buffalo, NY LOC) 6,900,000
--------------------------------------------------------------------------------
15,600,000 Philadelphia, PA, GO (Series 1990), 3.60% CP (Fuji Bank, Ltd., Tokyo LOC),
Mandatory Tender 10/10/1996 15,600,000
--------------------------------------------------------------------------------
10,000,000 Philadelphia, PA, GO (Series 1990), 3.65% CP (Fuji Bank, Ltd., Tokyo LOC),
Mandatory Tender 10/15/1996 10,000,000
--------------------------------------------------------------------------------
38,300,000 Philadelphia, PA, GO (Series 1990), 3.65% CP (Fuji Bank, Ltd., Tokyo LOC),
Mandatory Tender 10/22/1996 38,300,000
-------------------------------------------------------------------------------- ----------------
Total 94,093,186
-------------------------------------------------------------------------------- ----------------
RHODE ISLAND--0.3%
--------------------------------------------------------------------------------
5,695,000 Cranston, RI, Custodial Receipts (2nd Series 1996E), 4.625% BANs (State Street
Bank and Trust Co. LOC), 3/3/1997 5,712,427
-------------------------------------------------------------------------------- ----------------
SOUTH CAROLINA--2.3%
--------------------------------------------------------------------------------
2,790,000 Berkeley, SC IRB, (Series 1989) Weekly VRDNs (W.W. Williams Company
Project)/(Bank One, Columbus, N.A. LOC) 2,790,000
--------------------------------------------------------------------------------
6,000,000 Georgetown County, SC, Pollution Control Facilities Adjustable Rate Bonds
(Series A), 4.00% TOBs (International Paper Co.), Optional Tender 9/1/1997 6,000,000
--------------------------------------------------------------------------------
5,125,000 Greenville County, SC Hospital Authority, (Series 1989) Weekly VRDNs (Charter
Hospital St. Louis)/(Bankers Trust Co., New York LOC) 5,125,000
--------------------------------------------------------------------------------
2,400,000 South Carolina Education Facilities Authority, Educational Facilities Revenue
Bonds (Series 1993) Weekly VRDNs (Presbyterian College Project)/(Wachovia Bank
of SC, NA, Columbia LOC) 2,400,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
SOUTH CAROLINA--CONTINUED
--------------------------------------------------------------------------------
$ 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) $ 5,255,000
--------------------------------------------------------------------------------
17,892,000 South Carolina State Public Service Authority, 3.65% CP (Nationsbank, N.A. LIQ),
Mandatory Tender 12/13/1996 17,892,000
-------------------------------------------------------------------------------- ----------------
Total 39,462,000
-------------------------------------------------------------------------------- ----------------
SOUTH DAKOTA--2.8%
--------------------------------------------------------------------------------
665,000 Mitchell, SD, IDR Weekly VRDNs (Holiday Inn)/(First Bank NA, Minneapolis LOC) 665,000
--------------------------------------------------------------------------------
1,325,000 Rapid City, SD Weekly VRDNs (Gillette Dairy Black Hills, Inc.)/ (Bank of
Tokyo-Mitsubishi Ltd. LOC) 1,325,000
--------------------------------------------------------------------------------
20,000,000 (a)South Dakota Housing Development Authority, CDC Municipal Products, Inc.
Class A Certificates (Series 1996C) Weekly VRDNs (CDC Municipal Products, Inc.
LIQ) 20,000,000
--------------------------------------------------------------------------------
10,000,000 South Dakota Housing Development Authority, Homeownership Mortgage Bonds (Series
1995E), 4.05% TOBs, Mandatory Tender
10/24/1996 10,000,000
--------------------------------------------------------------------------------
14,000,000 (a)South Dakota Housing Development Authority, PT-85 (1988 Series A) Weekly
VRDNs (Rabobank Nederland, Utrecht LIQ) 14,000,000
--------------------------------------------------------------------------------
1,630,000 Watertown, SD, (Series 1991) Weekly VRDNs (Tescom Corp.)/ (Norwest Bank
Minnesota, Minneapolis LOC) 1,630,000
-------------------------------------------------------------------------------- ----------------
Total 47,620,000
-------------------------------------------------------------------------------- ----------------
TENNESSEE--0.4%
--------------------------------------------------------------------------------
3,000,000 Chattanooga-Hamilton County, TN Hospital Authority Daily VRDNs (Erlanger Medical
Center)/(Morgan Guaranty Trust Co., New York SA) 3,000,000
--------------------------------------------------------------------------------
3,500,000 Tennessee Housing Development Agency, Homeownership Program Bonds (Issue
1996-3), 3.85% TOBs, Optional Tender
5/29/1997 3,500,000
-------------------------------------------------------------------------------- ----------------
Total 6,500,000
-------------------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
TEXAS--7.4%
--------------------------------------------------------------------------------
$ 900,000 Corpus Christi, TX IDC Weekly VRDNs (Grainger (W.W.), Inc.) $ 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 18,453,750
--------------------------------------------------------------------------------
2,250,000 Harris County, TX Cultural Education Facilities Finance Corp. Weekly VRDNs
(Houston Museum of Natural Sciences)/(Bank One, Texas N.A. LOC) 2,250,000
--------------------------------------------------------------------------------
10,400,000 Harris County, TX HFDC, (Series 1994) Daily VRDNs (Methodist Hospital, Harris
County, TX) 10,400,000
--------------------------------------------------------------------------------
2,300,000 Harris County, TX HFDC, (Series B) Daily VRDNs (St. Luke's Episcopal Hospital) 2,300,000
--------------------------------------------------------------------------------
4,800,000 Harris County, TX HFDC, (Series C) Daily VRDNs (St. Luke's Episcopal Hospital) 4,800,000
--------------------------------------------------------------------------------
955,000 Harris County, TX IDC Weekly VRDNs (Grainger (W.W.), Inc.) 955,000
--------------------------------------------------------------------------------
2,380,000 Liberty County, TX IDA Weekly VRDNs (Insteel Industries, Inc.)/ (First Union
National Bank, Charlotte, N.C. LOC) 2,380,000
--------------------------------------------------------------------------------
3,300,000 Lubbock, TX IDC Daily VRDNs (McLane Co., Inc.)/(Nationsbank, N.A. LOC) 3,300,000
--------------------------------------------------------------------------------
1,780,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol, Inc.)/ (Nationsbank, N.A.
LOC) 1,780,000
--------------------------------------------------------------------------------
6,000,000 Tarrant County, TX IDC Weekly VRDNs (Holden Business Forms)/ (Norwest Bank
Minnesota, Minneapolis LOC) 6,000,000
--------------------------------------------------------------------------------
15,000,000 Texas State Public Finance Authority, (Series 1993A), 3.55% CP (Texas State),
Mandatory Tender 10/8/1996 15,000,000
--------------------------------------------------------------------------------
27,200,000 Texas State, 4.75% TRANs, 8/29/1997 27,382,159
--------------------------------------------------------------------------------
9,200,000 Tyler, TX Health Facilities Development Corp., (Series 1993C), 4.00% CP (East
Texas Medical Center)/(Banque Paribas, Paris LOC), Mandatory Tender 12/9/1996 9,200,000
--------------------------------------------------------------------------------
11,700,000 Tyler, TX Health Facilities Development Corp., (Series 1993C), 4.05% CP (East
Texas Medical Center)/(Banque Paribas, Paris LOC), Mandatory Tender 11/12/1996 11,700,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
TEXAS--CONTINUED
--------------------------------------------------------------------------------
$ 9,145,000 Tyler, TX Health Facilities Development Corp., Hospital Revenue Bonds (Series
1994) Weekly VRDNs (East Texas Medical Center)/ (Nationsbank of Texas, N.A. LOC) $ 9,145,000
-------------------------------------------------------------------------------- ----------------
Total 125,945,909
-------------------------------------------------------------------------------- ----------------
UTAH--0.4%
--------------------------------------------------------------------------------
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) 7,400,000
-------------------------------------------------------------------------------- ----------------
VIRGINIA--6.0%
--------------------------------------------------------------------------------
4,500,000 Alexandria, VA Redevelopment and Housing Authority Weekly VRDNs (Crystal City
Apartments)/(Safeco Insurance Co. of America INS)/(Sumitomo Bank Ltd., Osaka
LIQ) 4,500,000
--------------------------------------------------------------------------------
6,575,000 Alexandria, VA Redevelopment and Housing Authority, (Series 1996A) Weekly VRDNs
(Glebe Park Apartments Project)/ (Kredietbank N.V., Brussels LOC) 6,575,000
--------------------------------------------------------------------------------
4,600,000 Campbell County, VA IDA, Solid Waste Disposal Facilities Revenue Aces Weekly
VRDNs (Georgia-Pacific Corp.)/(Industrial Bank of Japan Ltd., Tokyo LOC) 4,600,000
--------------------------------------------------------------------------------
2,000,000 Carroll County, VA IDA, IDRB (Series 1995) Weekly VRDNs (Kentucky Derby Hosiery
Co, Inc Project)/(Liberty National Bank & Trust Co. LOC) 2,000,000
--------------------------------------------------------------------------------
4,000,000 Chesapeake, VA IDA, IDRB (Series 1988) Weekly VRDNs (Sumitomo Machinery Corp. of
America Corp.)/(Sumitomo Bank Ltd., Osaka LOC) 4,000,000
--------------------------------------------------------------------------------
14,100,000 Chesterfield County, VA IDA, 3.80% CP (Virginia Electric Power Co.), Mandatory
Tender 1/23/1997 14,100,000
--------------------------------------------------------------------------------
5,298,975 (a)Equity Trust III, (1996 Series) Weekly VRDNs (Bayerische Hypotheken-Und
Wechsel-Bank Ag LOC) 5,298,975
--------------------------------------------------------------------------------
11,000,000 Fairfax County, VA EDA, (Series 1995) Weekly VRDNs (American Society of Civil
Engineers Foundation, Inc. Project)/(Mellon Bank NA, Pittsburgh LOC) 11,000,000
--------------------------------------------------------------------------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
VIRGINIA--CONTINUED
--------------------------------------------------------------------------------
$ 1,230,000 Fairfax County, VA EDA, Facilities Revenue Refunding Bonds (Series 1993) Weekly
VRDNs (Future Homemakers of America)/ (Nationsbank, N.A. LOC) $ 1,230,000
--------------------------------------------------------------------------------
7,000,000 Fairfax County, VA Housing Authority Weekly VRDNs (Chase Commons
Associates)/(Bankers Trust Co., New York LOC) 7,000,000
--------------------------------------------------------------------------------
2,500,000 Fauquier County, VA IDA, Refunding Revenue Bonds Weekly VRDNs (Warrenton
Development Co.)/(Nationsbank, N.A. LOC) 2,500,000
--------------------------------------------------------------------------------
3,350,000 Hampton, VA Redevelopment & Housing Authority, (Series 1984) Weekly VRDNs
(Nationsbank, N.A. LOC) 3,350,000
--------------------------------------------------------------------------------
3,740,000 King George County IDA, VA, (Series 1996) Weekly VRDNs (Garnet of Virginia, Inc.
Project)/(Morgan Guaranty Trust Co., New York LOC) 3,740,000
--------------------------------------------------------------------------------
8,150,000 Richmond, VA Redevelopment & Housing Authority, (Series 1989) Weekly VRDNs
(Belmont Apartment)/(First Union National Bank, Charlotte, N.C. LOC) 8,150,000
--------------------------------------------------------------------------------
7,900,000 Roanoke, VA IDA, Hospital Revenue Bonds (Series 1995C) Weekly VRDNs (Carilion
Health System)/(Morgan Guaranty Trust Co., New York LIQ) 7,900,000
--------------------------------------------------------------------------------
4,520,000 Suffolk, VA Redevelopment & Housing Authority Weekly VRDNs (Terry/Peterson
Development Corp.)/(Nationsbank, N.A. LOC) 4,520,000
--------------------------------------------------------------------------------
3,105,000 Suffolk, VA Redevelopment & Housing Authority, (Series 1994) Weekly VRDNs
(Terry/Peterson Associates II Project)/(Nationsbank, N.A. LOC) 3,105,000
--------------------------------------------------------------------------------
1,100,000 Virginia Peninsula Port Authority Daily VRDNs (Kinyo Virginia, Inc.)/(Industrial
Bank of Japan Ltd., Tokyo LOC) 1,100,000
--------------------------------------------------------------------------------
1,500,000 Virginia State Housing Development Authority, (Series 1987A) Weekly VRDNs (AHC
Service Center)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 1,500,000
--------------------------------------------------------------------------------
4,000,000 Williamsburg, VA IDA, (Series 1988) Weekly VRDNs (Colonial Williamsburg
Foundation Museum)/(Nationsbank, N.A. LOC) 4,000,000
-------------------------------------------------------------------------------- ----------------
Total 100,168,975
-------------------------------------------------------------------------------- ----------------
</TABLE>
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- -------------------------------------------------------------------------------- ----------------
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------------------
WEST VIRGINIA--0.2%
--------------------------------------------------------------------------------
$ 3,040,000 Berkeley County, WV County Commission, Industrial Development Bonds (Series
1994) Weekly VRDNs (Brentwood Industries, Inc. Project)/(Corestates Bank N.A.,
Philadelphia, PA LOC) $ 3,040,000
-------------------------------------------------------------------------------- ----------------
WISCONSIN--1.8%
--------------------------------------------------------------------------------
2,000,000 Green Bay, WI IDA, IDRB (Series 1985) Weekly VRDNs (St. Mary's Holdings,
Inc.)/(Mellon Bank NA, Pittsburgh LOC) 2,000,000
--------------------------------------------------------------------------------
12,000,000 Milwaukee, WI, (Series 1996-A), 3.50% RANs, 2/27/1997 12,023,709
--------------------------------------------------------------------------------
940,000 Spooner, WI, (Series 1994) Weekly VRDNs (Nash Finch Co.)/(First Bank NA,
Minneapolis LOC) 940,000
--------------------------------------------------------------------------------
10,000,000 Wisconsin HEFA Weekly VRDNs (St. Luke's Medical Center)/ (Sumitomo Bank Ltd.,
Osaka LOC) 10,000,000
--------------------------------------------------------------------------------
4,360,000 (a)Wisconsin Housing & Economic Development Authority, (Series B), 4.20% TOBs
(FSA INS)/(Corestates Bank N.A., Philadelphia, PA LIQ), Optional Tender 3/1/1997 4,360,000
-------------------------------------------------------------------------------- ----------------
Total 29,323,709
-------------------------------------------------------------------------------- ----------------
WYOMING--0.4%
--------------------------------------------------------------------------------
5,060,000 Lincoln County, WY, PCR Refunding Bonds (Series 1994) Daily VRDNs
(Pacificorp)/(AMBAC INS)/(Bank of New York, New York LIQ) 5,060,000
--------------------------------------------------------------------------------
1,830,000 Sweetwater County, WY IDA Weekly VRDNs (FMC Gold Co.)/ (Wachovia Bank of NC, NA,
Winston-Salem LOC) 1,830,000
-------------------------------------------------------------------------------- ----------------
Total 6,890,000
-------------------------------------------------------------------------------- ----------------
OTHER--0.5%
--------------------------------------------------------------------------------
8,006,003 (a)LaSalle National Bank Leasetops Trust, Series 1995A Leasetops Certificates
Weekly VRDNs (Lasalle National Bank, Chicago LOC) 8,006,003
-------------------------------------------------------------------------------- ----------------
TOTAL INVESTMENTS (AT AMORTIZED COST) (B) $ 1,665,814,402
-------------------------------------------------------------------------------- ----------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 20% of the
Portfolio as calculated based upon total portfolio market value.
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
(a) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At September 30, 1996, these securities
amounted to $155,807,013 which represents 9.3% of net assets.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($1,674,975,409) at September 30, 1996.
The following acronyms are used throughout this portfolio:
ACES--Adjustable Convertible Extendable Securities
AMBAC--American Municipal Bond Assurance Corporation
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
CP--Commercial Paper
EDA--Economic Development Authority
EDC--Economic Development Commission
EDRB--Economic Development Revenue Bonds
FGIC--Financial Guaranty Insurance Company
FHA--Federal Housing Administration
FSA--Financial Security Assurance
GO--General Obligation
GTD--Guaranty
HEFA--Health and Education Facilities Authority
HFA--Housing Finance Authority
HFDC--Health Facility Development Corporation
IDA--Industrial Development Authority
IDB--Industrial Development Bond
IDC--Industrial Development Corporation
IDR--Industrial Development Revenue
IDRB-- Industrial Development Revenue Bond
IDFA-- Industrial Development Finance Authority
IFA-- Industrial Finance Authority
INS-- Insured
LIQ-- Liquidity Agreement
LOCs-- Letter(s) of Credit
LOC-- Letter of Credit
MBIA-- Municipal Bond Investors Assurance
PCR-- Pollution Control Revenue
PCFA-- Pollution Control Finance Authority
PLC-- Public Limited Company
PRF-- Prerefunded
RANs-- Revenue Anticipation Notes
SA-- Support Agreement
TANs-- Tax Anticipation Notes
TOBs-- Tender Option Bonds
TRANs-- Tax and Revenue Anticipation Notes
UT-- Unlimited Tax
VRDNs-- Variable Rate Demand Notes
The Trust may only invest in securities rated in one of the two highest short-
term rating categories by nationally recognized statistical rating organizations
("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest
rating categories are determined without regard for sub-categories and
gradations. For example, securities, rated SP-1+, SP-1 or SP-2 by Standard &
Poor's Corporation, MIG-1 or MIG-2 by Moody's Investors Service, Inc., or FIN-
1+, FIN-1 and FIN-2 by Fitch Investors Service, Inc. are all considered rated in
one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated
securities of comparable quality) are identified as First Tier securities.
Securities rated in the second highest short-term rating category (and unrated
securities of comparable quality) are identified as Second Tier securities. The
Trust follows applicable regulations in determining whether a security is rated
and whether a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security. At September 30, 1996,
tier rating percentages were as follows:
TIER RATING PERCENTAGES BASED ON
TOTAL MARKET VALUE
<TABLE>
<CAPTION>
First
First Tier Second Tier
--------------------------
<S> <C>
98.43% 1.57%
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
September 30, 1996 (unaudited)
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 1,665,814,402
- ------------------------------------------------------------------------------------------------
Cash 1,105,051
- ------------------------------------------------------------------------------------------------
Income receivable 10,602,368
- ------------------------------------------------------------------------------------------------ ----------------
Total assets 1,677,521,821
- ------------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------------
Income distribution payable $ 1,967,961
- ----------------------------------------------------------------------------------
Accrued expenses 578,451
- ---------------------------------------------------------------------------------- ------------
Total liabilities 2,546,412
- ------------------------------------------------------------------------------------------------ ----------------
NET ASSETS for 1,675,595,986 shares outstanding $ 1,674,975,409
- ------------------------------------------------------------------------------------------------ ----------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------
Paid in capital $ 1,675,595,986
- ------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (898,384)
- ------------------------------------------------------------------------------------------------
Undistributed net investment income 277,807
- ------------------------------------------------------------------------------------------------ ----------------
Total Net Assets $ 1,674,975,409
- ------------------------------------------------------------------------------------------------ ----------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Investment Shares ($1,402,886,905 / 1,403,310,627 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------ ----------------
Institutional Service Shares ($272,088,504 / 272,285,359 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------ ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Statement of Operations
- --------------------------------------------------------------------------------
Six Months Ended September 30, 1996 (unaudited)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 32,232,047
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $ 4,472,356
- ------------------------------------------------------------------------------------
Administrative personnel and services fee 676,220
- ------------------------------------------------------------------------------------
Custodian fees 88,132
- ------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 218,751
- ------------------------------------------------------------------------------------
Directors'/Trustees' fees 11,940
- ------------------------------------------------------------------------------------
Auditing fees 8,384
- ------------------------------------------------------------------------------------
Legal fees 4,638
- ------------------------------------------------------------------------------------
Portfolio accounting fees 72,074
- ------------------------------------------------------------------------------------
Shareholder services fee--Investment Shares 1,801,896
- ------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 434,281
- ------------------------------------------------------------------------------------
Share registration costs 49,803
- ------------------------------------------------------------------------------------
Printing and postage 95,626
- ------------------------------------------------------------------------------------
Insurance premiums 11,429
- ------------------------------------------------------------------------------------
Taxes 14,203
- ------------------------------------------------------------------------------------
Miscellaneous 8,039
- ------------------------------------------------------------------------------------ -------------
Total expenses 7,967,772
- ------------------------------------------------------------------------------------
Waivers--
- -----------------------------------------------------------------------
Waiver of investment advisory fee $ (722,557)
- -----------------------------------------------------------------------
Waiver of shareholder services fee--Investment Shares (720,759)
- -----------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service Shares (434,281)
- ----------------------------------------------------------------------- -----------
Total waivers (1,877,597)
- ------------------------------------------------------------------------------------ -------------
Net expenses 6,090,175
- --------------------------------------------------------------------------------------------------- -------------
Net investment income 26,141,872
- --------------------------------------------------------------------------------------------------- -------------
Net realized gain on investments 52,469
- --------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ 26,194,341
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Tax-Free Instruments Trust
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
SEPTEMBER 30, 1996 MARCH 31, 1996
- --------------------------------------------------------------------- ------------------ --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------
Net investment income $ 26,141,872 $ 57,127,738
- ---------------------------------------------------------------------
Net realized gain on investments ($52,469 net gain and $18,024 net
loss, respectively, as computed for federal income tax purposes) 52,469 32,047
- --------------------------------------------------------------------- ----------------------- ------------------
Change in net assets resulting from operations 26,194,341 57,159,785
- --------------------------------------------------------------------- ----------------------- ------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------
Distributions from net investment income
- ---------------------------------------------------------------------
Investment Shares (20,878,659) (44,999,576)
- ---------------------------------------------------------------------
Institutional Service Shares (5,263,213) (11,850,355)
- --------------------------------------------------------------------- ----------------------- ------------------
Change in net assets resulting from distributions to
shareholders (26,141,872) (56,849,931)
- --------------------------------------------------------------------- ----------------------- ------------------
SHARE TRANSACTIONS--
- ---------------------------------------------------------------------
Proceeds from sale of shares 2,565,318,488 5,662,886,235
- ---------------------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 21,366,699 45,012,727
- ---------------------------------------------------------------------
Cost of shares redeemed (2,681,610,928) (5,575,079,915)
- --------------------------------------------------------------------- ----------------------- ------------------
Change in net assets resulting from share transactions (94,925,741) 132,819,047
- --------------------------------------------------------------------- ----------------------- ------------------
Change in net assets (94,873,272) 133,128,901
- --------------------------------------------------------------------- ----------------------- ------------------
NET ASSETS:
- ---------------------------------------------------------------------
Beginning of period 1,769,848,681 1,636,719,780
- --------------------------------------------------------------------- ----------------------- ------------------
End of period (including undistributed net investment income of
$277,807 and $277,807, respectively) $ 1,674,975,409 $ 1,769,848,681
- --------------------------------------------------------------------- ----------------------- ------------------
</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>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED MARCH 31,
SEPTEMBER 30, --------------------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992 1991 1990 1989
------------ ---- ---- ---- ---- ---- ---- ---- ----
<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 0.01 0.03 0.03 0.02 0.02 0.04 0.05 0.06 0.05
- --------------------- -------- --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- ---------------------
Distributions from
net investment
income (0.01) (0.03) (0.03) (0.02) (0.02) (0.04) (0.05) (0.06) (0.05)
- --------------------- -------- --------- --------- --------- --------- --------- --------- --------- ---------
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) 1.47% 3.32% 2.70% 2.01% 2.42% 3.84% 5.40% 5.88% 5.28%
- ---------------------
RATIOS TO AVERAGE
NET ASSETS
- ---------------------
Expenses 0.71%* 0.71% 0.70% 0.61% 0.55% 0.55% 0.55% 0.55% 0.55%
- ---------------------
Net investment
income 2.90%* 3.27% 2.66% 2.00% 2.38% 3.73% 5.25% 5.73% 5.14%
- ---------------------
Expense waiver/
reimbursement (b) 0.18%* 0.24% 0.17% 0.14% 0.10% 0.11% 0.12% 0.11% 0.08%
- ---------------------
SUPPLEMENTAL DATA
- ---------------------
Net assets, end of
period (000 omitted) $1,402,887 $1,465,333 $1,277,894 $1,327,506 $1,619,531 $1,440,970 $1,214,045 $1,142,022 $1,313,391
- --------------------
<CAPTION>
1988
<S> <C>
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) 4.29%
- ---------------------
RATIOS TO AVERAGE
NET ASSETS
- ---------------------
Expenses 0.55%
- ---------------------
Net investment
income 4.19%
- ---------------------
Expense waiver/
reimbursement (b) 0.06%
- ---------------------
SUPPLEMENTAL DATA
- ---------------------
Net assets, end of
period (000 omitted) $1,552,460
- ---------------------
</TABLE>
* Computed on an annualized basis.
(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>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED MARCH 31,
SEPTEMBER 30, -------------------------------
1996 1996 1995 1994(A)
------------- --------- -------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
Net investment income 0.02 0.03 0.03 0.01
- ------------------------------------------------------------ ------- --------- --------- -----------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
Distributions from net investment income (0.02) (0.03) (0.03) (0.01)
- ------------------------------------------------------------ ------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------ ------- --------- --------- -----------
TOTAL RETURN (B) 1.54% 3.47% 2.85% 0.92%
- ------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
Expenses 0.56%* 0.56% 0.55% 0.55%*
- ------------------------------------------------------------
Net investment income 3.04%* 3.43% 2.82% 1.99%*
- ------------------------------------------------------------
Expense waiver/reimbursement (c) 0.35%* 0.40% 0.17% 0.14%*
- ------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
Net assets, end of period (000 omitted) $272,089 $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
- --------------------------------------------------------------------------------
September 30, 1996 (unaudited)
(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 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. Investments in other open-end regulated investment companies are
valued at net asset value.
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
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
liquid under criteria established by the Board of Trustees (the
"Trustees"). The Trust will not incur any registration costs upon such
resales. Restricted securities are valued at amortized cost in accordance
with Rule 2a-7 under the Act. Additional information on each restricted
security held at September 30, 1996, is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
- -------------------------------------------------------------------- ------------------- --------------
<S> <C> <C>
California HFA, CDC Municipal Products, Inc. 8-20-96 $ 9,875,000
California Public Capital Improvements
Financing Authority 7-30-96/9-30-96 35,700,000
Thorton, CO, Multifamily Housing Refunding
Revenue Bonds 10-4-95/10-19/95 5,365,000
Clipper Connecticut Tax Exempt Trust 5-6-94 2,966,585
Marietta, GA Housing Authority, Multifamily Housing Revenue Bonds 6-28-96 1,370,000
Clipper Kentucky Tax Exempt Trust 7-3-96 10,000,000
Clipper Massachusetts Tax Exempt Trust 1-4-95 10,300,450
VRDC/IVRC Trust, (Series 1990A) 10-31-95 3,000,000
VRDC/IVRC Trust, (Series 1993B) 12-22-95 7,000,000
VRDC/IVRC Trust, (Series 1993G) 7-7-96/9-20-96 11,600,000
NCNB Pooled Tax-Exempt Trust, (Series 1990A) 1-3-92 1,010,000
NCNB Pooled Tax-Exempt Trust, (Series 1990B) 11-29-90 3,695,000
North Carolina Eastern Municipal Power Agency 11-22-93 2,260,000
South Dakota Housing Development Authority,
CDC Municipal Products, Inc. 8-22-96 20,000,000
South Dakota Housing Development Authority 9-19-96 14,000,000
Equity Trust III 6-10-96 5,298,975
Wisconsin Housing & Economic Development Authority 8-28-96 4,360,000
Lasalle National Bank Leasetops Trust 10-11-95 8,006,003
</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 September 30, 1996, capital paid-in aggregated
$1,675,595,986. Transactions in shares were as follows:
Tax-Free Instruments Trust
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1996 MARCH 31, 1996
INVESTMENT SHARES SHARES SHARES
- --------------------------------------------------------------------- ------------------- ----------------
<S> <C> <C>
Shares sold 2,005,459,071 4,705,771,360
- ---------------------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 20,230,364 43,656,277
- ---------------------------------------------------------------------
Shares redeemed (2,088,177,481) (4,562,229,196)
- --------------------------------------------------------------------- ----------------------- ------------------
Net change resulting from Investment share
transactions (62,488,046) 187,198,441
- --------------------------------------------------------------------- ----------------------- ------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1996 MARCH 31, 1996
INSTITUTIONAL SERVICE SHARES SHARES SHARES
- --------------------------------------------------------------------- ------------------- ----------------
<S> <C> <C>
Shares sold 559,859,417 957,114,875
- ---------------------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,136,335 1,356,450
- ---------------------------------------------------------------------
Shares redeemed (593,433,447) (1,012,850,719)
- --------------------------------------------------------------------- ----------------------- ------------------
Net change resulting from Institutional Service share
transactions (32,437,695) (54,379,394)
- --------------------------------------------------------------------- ----------------------- ------------------
Net change resulting from share transactions (94,925,741) 132,819,047
- --------------------------------------------------------------------- ----------------------- ------------------
</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
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE 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 daily average 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 AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC") serves as transfer
and dividend disbursing agent for the Trust. The fee paid to FSSC 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 period ended September 30, 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 $1,309,265,000 and $1,537,477,850, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
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, Treasurer and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
S. Elliott Cohan
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 FDIC, the Federal Reserve Board,
or any other governmental agency. Investment in mutual funds involves 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.
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[LOGO OF FEDERATED INVESTORS]
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
8110107 (11/96)
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