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[LOGO OF FUND FOR GOVERNMENT INVESTORS, INC. APPEARS HERE]
A MONEY MARKET FUND
ANNUAL REPORT
December 31, 1995
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Dear Shareholders:
Fund for Government Investors, Inc. ended the year with net assets of
$577.2 million on December 31, 1995, an increase of $53 million for the year.
Net income averaged 4.93% of net assets for the year.
After the Federal Reserve raised interest rates for more than a year, the
economy started to show signs of slowing in 1995. The slowing economy prompted
the Federal Reserve to reverse its course and reduce short-term rates in July by
25 basis points and again in December by an additional 25 basis points. This
reduction in short-term rates brought the Federal funds' rate down to 5.50%.
The near term outlook continues to look sluggish with no recession
anticipated in 1996. With low inflation and continued slow growth, expectations
are that the Federal Reserve will again lower interest rates in 1996. Also
during the year, we expect the Administration and Congress to reach a balanced
budget agreement which should bode well for the economy.
Going forward, Fund for Government Investors, Inc. 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
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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, INC.
STATEMENT OF NET ASSETS
December 31, 1995
<TABLE>
<CAPTION>
PAYABLE AT MATURITY YIELD AT DATE VALUE
MATURITY DATE OF PURCHASE (%) (NOTE 1)
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UNITED STATES TREASURY BILLS
<S> <C> <C> <C>
$ 25,000,000 ......... January 4, 1996 .............. 5.47 ................. $ 24,988,916
50,000,000 ......... January 11, 1996 .............. 5.44 ................. 49,926,528
50,000,000 ......... January 18, 1996 .............. 5.42 ................. 49,875,510
50,000,000 ......... February 1, 1996 .............. 5.40 ................. 49,773,743
75,000,000 ......... February 8, 1996 .............. 5.49 ................. 74,577,118
75,000,000 ......... February 15, 1996 .............. 5.56 ................. 74,492,812
50,000,000 ......... February 22, 1996 .............. 5.49 ................. 49,614,333
25,000,000 ......... February 29, 1996 .............. 5.46 ................. 24,782,233
50,000,000 ......... March 7, 1996 .............. 5.30 ................. 49,527,000
50,000,000 ......... March 14, 1996 .............. 5.31 ................. 49,475,819
25,000,000 ......... March 21, 1996 .............. 5.16 ................. 24,721,111
25,000,000 ......... March 28, 1996 .............. 4.94 ................. 24,709,396
23,000,000 ......... December 12, 1996 .............. 5.20 ................. 21,919,040
- ------------ ------------
$573,000,000 Total Investments -- 98.47% (Cost $568,383,559*) 568,383,559
============
Other Assets less Liabilities -- 1.53% 8,810,872
------------
Net Assets -- 100.0% $577,194,431
============
Net Asset value per share
(Based on 577,194,431
shares outstanding) $1.00
=====
</TABLE>
*Same cost is used for Federal income tax purposes.
Weighted Average Maturity of Portfolio: 57 Days
See Notes to Financial Statements.
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STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS:
INVESTMENT INCOME (Note 1) ................................. $31,976,884
EXPENSES
Investment Advisory Fee (Note 2) .................. $2,787,502
Administrative Fee (Note 2) .................. 1,409,761 4,197,263
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NET INVESTMENT INCOME ................................. $27,779,621
===========
</TABLE>
See Notes to Financial Statements.
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STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended
December 31,
--------------------------------
1995 1994
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<S> <C> <C>
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS
AND DECLARED AS DIVIDENDS TO
SHAREHOLDERS (Note 1)......................... $ 27,779,621 $ 18,389,220
=============== ===============
FROM SHARE TRANSACTIONS
(at constant net asset value of $1)
Shares Purchased............................ $ 2,611,795,994 $ 2,391,380,226
Dividends Reinvested........................ 26,793,106 17,600,081
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Total....................................... 2,638,589,100 2,408,980,307
Shares Redeemed............................. (2,585,548,223) (2,485,592,551)
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Increase (Decrease) in Net Assets........... 53,040,877 (76,612,244)
NET ASSETS - Beginning of Year................ 524,153,554 600,765,798
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NET ASSETS - End of Year...................... $ 577,194,431 $ 524,153,554
=============== ===============
</TABLE>
See Notes to Financial Statements.
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FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value - Beginning of
Year......................... $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
Net Investment Income......... 0.049 0.033 0.023 0.030 0.053
Net Realized and Unrealized
Gains on Securities.......... -- -- -- -- --
------- ------- ------- ------- -------
Net Increase in Net Asset
Value Resulting from
Operations................... 0.049 0.033 0.023 0.030 0.053
Dividends to Shareholders..... (0.049) (0.033) (0.023) (0.030) (0.053)
Distributions to Shareholders
from Net Realized Capital
Gains........................ -- -- -- -- --
------- ------- ------- ------- -------
Net Increase in Net Asset
Value........................ 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- -------
Net Asset Value - End of Year. $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total Investment Return........ 5.04% 3.38% 2.37% 3.02% 5.38%
Ratios to Average Net Assets:
Expenses...................... 0.74% 0.75% 0.75% 0.71% 0.69%
Net Investment Income......... 4.93% 3.31% 2.32% 3.00% 5.29%
Supplementary Data:
Portfolio Turnover Rate....... -- -- -- -- --
Number of Shares Outstanding
at End of Year
(000's omitted).............. 577,194 524,154 600,766 751,925 796,655
</TABLE>
See Notes to Financial Statements.
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NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Fund for Government Investors, Inc. is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 and invests only
in U.S. Government Securities. 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.
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INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors
of Fund for Government Investors, Inc.:
We have audited the statement of net assets of Fund for Government
Investors, Inc. (the Fund) as of December 31, 1995, the related statements of
operations for the year then ended and of changes in net assets for the years
ended December 31, 1995 and 1994, and the financial highlights for each of the
five years in the period ended December 31, 1995. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1995 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the net assets of Fund for Government
Investors, Inc. at December 31, 1995, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods in conformity with generally accepted accounting principles .
DELOITTE & TOUCHE LLP
Washington, D.C.
January 30, 1996
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FUND
FOR
GOVERNMENT
INVESTORS
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ANNUAL REPORT
December 31, 1995
[LOGO OF RUSHMORE APPEARS HERE]
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