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[LOGO OF FUND FOR GOVERNMENT INVESTORS APPEARS HERE]
A MONEY MARKET FUND
SEMI-ANNUAL REPORT
June 30, 1996
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Dear Shareholders:
On June 30, 1996, Fund for Government Investors net assets were $580
million. Net income as a percentage of net assets averaged 4.37% for the six
months ended June 30, 1996, down from the 4.93% for the year ended December
31, 1995.
The economy's vitality was a pleasant surprise during the first half of
1996. The Federal Reserve lowered the Federal Funds rate 25 basis points to
5.50% in January 1996. Inflation remained moderate and consumer spending lead
to continued strong growth in the economy for the first half of 1996.
For the remainder of the year we look for the economy to grow at a slower
rate. Moderation in consumer spending will hold the key to the second half
slowdown. However, if the economy continues its first half growth rate, it is
inevitable the Federal Reserve will have to raise interest rates. This
increase could come as early as August. The Federal Reserve has some very
difficult decisions to make over the balance of the year.
Going forward, Fund for Government Investors will continue its conservative
investment philosophy, and as always, safety of assets will be our primary
concern. Thank you for your continued support.
/s/ Daniel L. O'Connor /s/ Richard J. Garvey
Daniel L. O'Connor Richard J. Garvey
Chairman of the Board President
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4922 Fairmont Avenue Bethesda, Maryland 20814 800-621-7874 301-657-1517
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FUND FOR GOVERNMENT INVESTORS
PORTFOLIO OF INVESTMENTS
June 30, 1996
<TABLE>
<CAPTION>
PAYABLE AT MATURITY YIELD AT DATE VALUE
MATURITY DATE OF PURCHASE (%) (NOTE 1)
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UNITED STATES TREASURY BILLS -- 100.00%
<S> <C> <C> <C>
$ 25,000,000 ........... July 5, 1996 ........... 5.21 ........... $ 24,985,945
50,000,000 ........... July 11, 1996 ........... 5.15 ........... 49,930,486
50,000,000 ........... July 18, 1996 ........... 5.03 ........... 49,884,660
50,000,000 ........... July 25, 1996 ........... 5.12 ........... 49,834,333
25,000,000 ........... August 1, 1996 ........... 5.14 ........... 24,892,576
25,000,000 ........... August 8, 1996 ........... 5.15 ........... 24,868,056
75,000,000 ........... August 15, 1996 ........... 5.15 ........... 74,530,625
25,000,000 ........... August 22, 1996 ........... 5.17 ........... 24,818,722
25,000,000 ........... August 29, 1996 ........... 5.17 ........... 24,794,319
50,000,000 ........... September 5, 1996 ........... 5.23 ........... 49,534,333
50,000,000 ........... September 12, 1996 ........... 5.29 ........... 49,479,115
50,000,000 ........... September 19, 1996 ........... 5.23 ........... 49,435,556
50,000,000 ........... September 26, 1996 ........... 5.22 ........... 49,387,375
- ------------ ------------
$550,000,000 Total Investments--100.00% (Cost $546,376,101*) ........... $546,376,101
============ ============
</TABLE>
*Same cost is used for Federal income tax purposes.
Weighted Average Maturity of Portfolio: 45 Days
See Notes to Financial Statements.
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FUND FOR GOVERNMENT INVESTORS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
<TABLE>
<S> <C>
ASSETS
Securities at Value (Note 1, see portfolio for cost information). $546,376,101
Cash in Custodian Bank........................................... 377,518
Receivable for Securities Sold................................... 30,367,409
Receivable for Shares Sold....................................... 4,196,126
Interest Receivable.............................................. 13,159
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Total Assets.................................................... 581,330,313
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LIABILITIES
Dividends Payable................................................ 56,930
Investment Advisory Fee Payable.................................. 231,536
Administration Fee Payable....................................... 117,247
Liability for Shares Redeemed.................................... 712,740
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Total Liabilities............................................... 1,118,453
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NET ASSETS........................................................ $580,211,860
============
Shares Outstanding................................................ 580,211,860
============
Net Asset Value Per Share......................................... $1.00
=====
</TABLE>
See Notes to Financial Statements.
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FUND FOR GOVERNMENT INVESTORS
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
<TABLE>
<S> <C> <C>
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS:
INVESTMENT INCOME (Note 1)........................................ $14,513,276
EXPENSES
Investment Advisory Fee (Note 2).................. $1,400,352
Administrative Fee (Note 2)....................... 708,908 2,109,260
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NET INVESTMENT INCOME............................................. $12,404,016
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</TABLE>
See Notes to Financial Statements.
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FUND FOR GOVERNMENT INVESTORS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
--------------------------------
1996 1995
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<S> <C> <C>
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS AND DECLARED AS DIVIDENDS TO
SHAREHOLDERS (Note 1)......................... $ 12,404,016 $ 13,465,954
=============== ===============
FROM SHARE TRANSACTIONS
(at constant net asset value of $1)
Shares Purchased............................ $ 1,487,421,715 $ 1,236,855,106
Dividends Reinvested........................ 12,022,929 13,016,151
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Total....................................... 1,499,444,644 1,249,871,257
Shares Redeemed............................. (1,496,427,215) (1,194,940,573)
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Increase in Net Assets...................... 3,017,429 54,930,684
NET ASSETS - Beginning of Period.............. 577,194,431 524,153,554
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NET ASSETS - End of Period.................... $ 580,211,860 $ 579,084,238
=============== ===============
</TABLE>
See Notes to Financial Statements.
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FUND FOR GOVERNMENT INVESTORS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended December 31,
June 30, -------------------------------------------
1996 1995 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value -
Beginning of Period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income. 0.022 0.049 0.033 0.023 0.030 0.053
Net Realized and
Unrealized Gains on
Securities........... -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total from Investment
Operations........... 0.022 0.049 0.033 0.023 0.030 0.053
------- ------- ------- ------- ------- -------
Distributions to
Shareholders:
From Net Investment
Income............... (0.022) (0.049) (0.033) (0.023) (0.030) (0.053)
From Net Realized
Capital Gains........ -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total Distributions to
Shareholders......... (0.022) (0.049) (0.033) (0.023) (0.030) (0.053)
------- ------- ------- ------- ------- -------
Net Increase in Net
Asset Value........... 0.00 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- ------- -------
Net Asset Value - End
of Period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN. 4.41%A 5.04% 3.38% 2.37% 3.02% 5.38%
RATIOS TO AVERAGE NET
ASSETS:
Expenses............... 0.74%A 0.74% 0.75% 0.75% 0.71% 0.69%
Net Investment Income.. 4.37%A 4.93% 3.31% 2.32% 3.00% 5.29%
SUPPLEMENTARY DATA:
Portfolio Turnover
Rate.................. -- -- -- -- -- --
Number of Shares
Outstanding at End of
Period with a Net
Asset Value of $1
(000's omitted)....... 580,212 577,194 524,154 600,766 751,925 796,655
</TABLE>
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AAnnualized.
See Notes to Financial Statements.
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FUND FOR GOVERNMENT INVESTORS
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
Fund for Government Investors (the "Fund") is registered with the Securities
and Exchange Commission under the Investment Company Act of 1940 and invests
only in U.S. Government Securities. The Fund is authorized to issue an
unlimited number of shares. At a special meeting of the shareholders of the
Fund held on May 24, 1996, shareholders approved an agreement to change the
domicile and business form of the Fund from a Maryland corporation to a
Delaware business trust effective May 31, 1996. The investment objectives and
policies of the Fund remain the same. The financial statements have been
prepared in conformity with generally accepted accounting principles which
permit management to make certain estimates and assumptions at the date of the
financial statements. The following is a summary of significant accounting
policies which the Fund consistently follows:
(a) Investments are valued at amortized cost, which approximates market
value. Amortized cost is the purchase price of the security plus
accumulated discount or minus amortized premium from the date of
purchase.
(b) Investment income is recorded as earned.
(c) Net investment income is computed, and dividends are declared daily.
Dividends are paid monthly and reinvested in additional shares
unless shareholders request payment.
(d) The Fund complies with the provisions of the Internal Revenue Code
applicable to regulated investment companies and distributes all net
investment income to its shareholders. Therefore, no Federal income
tax provision is required.
2. INVESTMENT ADVISER AND SHAREHOLDER SERVICING AGENT
Investment advisory and management services are provided by Money Management
Associates under an agreement whereby the Fund pays a fee at an annual rate
based on the Fund's net assets as follows: 0.50% of the first $500 million;
0.45% of the next $250 million; 0.40% of the next $250 million; and 0.35% of
the net assets that exceed $1 billion. Certain Officers and Directors of the
Fund are affiliated with Money Management Associates.
Rushmore Trust and Savings, FSB, a majority-owned subsidiary of Money
Management Associates, provides custodial services, transfer agency, dividend
disbursing and other shareholder services to the Fund. Rushmore Trust is paid
an administrative fee of 0.25% of average net assets to cover the cost of
these services as well as other expenses of the Fund except for interest and
extraordinary legal expenses.
3. ACQUISITION
On May 31, 1996, the Fund acquired all the net assets of the Rushmore Money
Market Portfolio ("Portfolio"), a series of The Rushmore Fund, Inc., pursuant
to a plan of reorganization approved by the Portfolio's shareholders on May
24, 1996. The transferred Portfolio's net assets at that date were $21,852,849
(valued at $1 per share).
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FUND
FOR
GOVERNMENT
INVESTORS
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SEMI-ANNUAL REPORT
June 30, 1996
[LOGO OF RUSHMORE APPEARS HERE]
