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FUND FOR [LOGO]
GOVERNMENT INVESTORS
A MONEY MARKET FUND
SEMI-ANNUAL REPORT
June 30, 1997
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Dear Shareholders:
On June 30, 1997, Fund for Government Investors' net assets were $572
million. Net income as a percentage of net assets averaged 4.39% (annualized)
for the six months ended June 30, 1997.
So far 1997 has been characterized by a continuing expansion of the economy
without a significant rise in inflation. The Federal Reserve made one 25 basis
point increase in the Federal Funds rate during the first quarter, but the rapid
growth of that quarter slowed considerably during the second, leading the Fed to
make no further adjustments. The positive inflationary picture has helped fuel
new record highs in the stock market as well as a downward trend in overall
market interest rates. The rate for three-month U.S. Treasury Bills was 4.93% on
June 30, 1997.
In the first quarter of the year the economy exhibited strong productivity
growth, and the jobless rate continued to decline. The second quarter saw the
economy slow to a more sustainable pace, which enabled the Fed to leave rates
unchanged since the first quarter adjustment. Throughout both quarters, the lack
of inflationary pressure has had positive results on both the stock and bond
markets.
The remainder of the year appears to be heading in the same direction as the
second quarter. While a rate hike by the Fed would not be out of the question if
economic data begins to show signs of inflationary pressure, the current
atmosphere of growth without increasing inflation should keep the Fed on the
sidelines for the near future.
As always, Fund for Government Investors will continue its conservative
investment philosophy, with the safety of assets our primary concern. We thank
you for your continued support.
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<S> <C>
[SIGNATURE] [SIGNATURE]
Daniel L. O'Connor Richard J. Garvey
Chairman of the Board President
</TABLE>
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, 1997
(Unaudited)
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<CAPTION>
ANNUALIZED
PAYABLE AT MATURITY YIELD ON DATE VALUE
MATURITY DATE OF PURCHASE (NOTE 1)
<S> <C> <C> <C> <C> <C> <C> <C>
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UNITED STATES TREASURY BILLS -- 100.0% OF TOTAL INVESTMENTS
$ 20,000,000 ............. July 3, 1997 ............. 4.56% ............. $ 19,995,000
50,000,000 ............. July 10, 1997 ............. 5.26 ............. 49,935,969
75,000,000 ............. July 17, 1997 ............. 5.28 - 5.29 ............. 74,828,555
25,000,000 ............. July 24, 1997 ............. 5.33 ............. 24,917,104
50,000,000 ............. July 31, 1997 ............. 5.35 ............. 49,782,918
25,000,000 ............. August 7, 1997 ............. 5.29 ............. 24,867,802
75,000,000 ............. August 14, 1997 ............. 5.16 - 5.23 ............. 74,535,555
25,000,000 ............. August 21, 1997 ............. 5.29 ............. 24,817,604
50,000,000 ............. August 28, 1997 ............. 5.16 ............. 49,595,612
50,000,000 ............. September 4, 1997 ............. 5.06 - 5.07 ............. 49,554,479
50,000,000 ............. September 11, 1997 ............. 5.09 ............. 49,504,500
50,000,000 ............. September 18, 1997 ............. 5.01 ............. 49,464,556
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Total Investments (Cost $541,799,654*) $541,799,654
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</TABLE>
*Same cost is used for Federal income tax purposes.
Weighted Average Maturity of Portfolio: 41 Days
See Notes to Financial Statements.
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<PAGE>
FUND FOR GOVERNMENT INVESTORS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
(Unaudited)
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ASSETS
Securities at Value (Note 1) (Cost $541,799,654)............................................ $541,799,654
Cash in Custodian Bank...................................................................... 2,698,473
Receivable for Securities Sold.............................................................. 22,957,523
Receivable for Shares Sold.................................................................. 4,911,091
Interest Receivable......................................................................... 3,443
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Total Assets.............................................................................. 572,370,184
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LIABILITIES
Dividends Payable........................................................................... 46,242
Investment Advisory Fee Payable............................................................. 231,834
Administrative Fee Payable.................................................................. 117,381
Liability for Shares Redeemed............................................................... 9,731
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Total Liabilities......................................................................... 405,188
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NET ASSETS.................................................................................... $571,964,996
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Shares Outstanding............................................................................ 571,964,996
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Net Asset Value Per Share..................................................................... $1.00
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See Notes to Financial Statements.
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FUND FOR GOVERNMENT INVESTORS
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(Unaudited)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
INVESTMENT INCOME (Note 1).................................................................... $14,261,051
EXPENSES
Investment Advisory Fee (Note 2)................................................ $1,373,343
Administrative Fee (Note 2)..................................................... 694,095 2,067,438
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NET INVESTMENT INCOME......................................................................... $12,193,613
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See Notes to Financial Statements.
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<PAGE>
FUND FOR GOVERNMENT INVESTORS
STATEMENTS OF CHANGES IN NET ASSETS
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<CAPTION>
For the Six
Months Ended For the Year
June 30, 1997 Ended
(Unaudited) December 31, 1996
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NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS AND DECLARED AS DIVIDENDS TO
SHAREHOLDERS (Note 1)....................... $ 12,193,613 $ 25,210,604
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FROM SHARE TRANSACTIONS
(at constant net asset value of $1)
Shares Purchased........................ $ 1,531,585,111 $ 2,826,372,757
Dividends Reinvested.................... 11,960,424 24,524,702
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Total................................... 1,543,545,535 2,850,897,459
Shares Redeemed......................... (1,506,905,493) (2,892,766,936)
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Increase (Decrease) in Net Assets....... 36,640,042 (41,869,477)
NET ASSETS - Beginning of Period............ 535,324,954 577,194,431
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NET ASSETS - End of Period.................. $ 571,964,996 $ 535,324,954
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See Notes to Financial Statements.
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<PAGE>
FUND FOR GOVERNMENT INVESTORS
FINANCIAL HIGHLIGHTS
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<CAPTION>
For the Six
Months Ended
June 30, For the Years Ended December 31,
1997 -------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
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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
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Income from Investment Operations:
Net Investment Income............... 0.022 0.044 0.049 0.033 0.023 0.030
Net Realized and Unrealized Gains
on Securities..................... -- -- -- -- -- --
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Total from Investment
Operations...................... 0.022 0.044 0.049 0.033 0.023 0.030
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Distributions to Shareholders:
From Net Investment Income.......... (0.022) (0.044) (0.049) (0.033) (0.023) (0.030)
From Net Realized Capital Gains..... -- -- -- -- -- --
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Total Distributions to
Shareholders.................... (0.022) (0.044) (0.049) (0.033) (0.023) (0.030)
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Net Increase in Net Asset Value....... 0.00 0.00 0.00 0.00 0.00 0.00
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Net Asset Value - End of Period....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
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TOTAL INVESTMENT RETURN................. 4.43%(A) 4.50% 5.04% 3.38% 2.37% 3.02%
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................. 0.74%(A) 0.74% 0.74% 0.75% 0.75% 0.71%
Net Investment Income................. 4.39%(A) 4.41% 4.93% 3.31% 2.32% 3.00%
SUPPLEMENTARY DATA:
Number of Shares Outstanding at End of
Period with a Net Asset Value of $1
(000's omitted)..................... 571,965 535,325 577,194 524,154 600,766 751,925
(A) Annualized.
</TABLE>
See Notes to Financial Statements.
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<PAGE>
FUND FOR GOVERNMENT INVESTORS
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
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. 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 Trustees 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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