<PAGE> 1
GRADISON-McDONALD
ANNUAL REPORT
SEPTEMBER 30, 1996
A MONEY MARKET FUND INVESTING IN
U.S. GOVERNMENT SECURITIES
U.S. GOVERNMENT RESERVES
GRADISON-McDONALD
This material is intended for distribution to shareholders of the
Gradison-McDonald U.S. Government Reserves Fund. It may be distributed to other
persons only if it is preceded or accompanied by a current prospectus of the
Gradison-McDonald U.S. Government Reserves Fund.
McDonald & Company Securities, Inc.--Distributor
<PAGE> 2
GRADISON-MCDONALD
U.S. GOVERNMENT RESERVES
LETTER TO SHAREHOLDERS
November 7, 1996
Dear U.S. Government Reserves Shareholder:
ANNUAL REPORT September 30 marked the end of the Fund's twenty-first fiscal
year. When our Cash Reserves money market fund commenced operations in April
1976, it was one of only 37 money market funds in the nation. There are now more
than 1,200 money market funds. With each passing year, it has become more
apparent that our depth of experience in the money market fund industry sets us
apart from most of our competitors.
Audited financial statements for the 1996 fiscal year can be found on the
following pages. The Portfolio of Investments appears on pages 4 and 5. We are
gratified that U.S. Government Reserves ranks #12 in assets among 108 Government
and Agency funds.
TAX-ADVANTAGED INCOME U.S. Government Reserves money market fund has a policy of
investing, whenever possible, in securities of the U.S. Treasury and certain
U.S. Government sponsored entities (GSEs) such as the Federal Home Loan Bank,
the Student Loan Marketing Association, and the Tennessee Valley Authority. The
GSEs that the Fund favors provide investors with income that is exempt from
state and local taxes. In 1994, 1995, and so far in 1996, 100% of the Fund's
income was derived from such securities.
We believe that our investment focus has the effect of increasing the after tax
yield for taxpaying shareholders of U.S. Government Reserves without
disadvantaging non-taxable shareholders. At current interest rates, this benefit
is worth about 25 basis points on a pretax basis. (A basis point is 0.01%--so 25
basis points is 0.25%). A money market fund that does not produce any state and
local tax exempt income must deliver a pre-tax yield about 25 basis points
higher than that of U.S. Government Reserves in order to provide the same
after-tax result. This example assumes state and local taxes of 5%; consult your
tax advisor for your particular situation. At higher tax rates, the benefit
derived from U.S. Government Reserves is even greater.
MONEY MARKET DYNAMICS Short term interest rates have been remarkably steady over
the past 6 months. At the time of our Semiannual Report, the 7-day average yield
of the Fund was 4.55%. At September 30, it was 4.66%; and at this writing it
stands at 4.62%.
Economic growth over this period has slowed in the calendar quarter that ended
September 30 from the more rapid pace of the earlier 3 months. The current
growth trend suggests that the U.S. economy is growing at a near optimal rate.
Job growth has reduced the unemployment rate to a level that is generally
associated with full employment; and, still, there are few signs of wage
inflation. As a result, we believe that the Federal Open Market Committee (FOMC)
will hold short term interest rates steady into next year.
1-800-869-5999 [GRAPHIC]
<PAGE> 3
LETTER TO SHAREHOLDERS (CONTINUED)
However, if the economy picks up speed or early inflation indicators suggest
impending price increases, the FOMC action could come earlier than the current
economic data suggests. In either event, pressure would build for higher short
term rates.
Currently, we are targeting weighted average portfolio maturity between 40 and
50 days. We believe that this range provides a good balance between two factors
that strongly affect our portfolio management: protecting the value of portfolio
securities and providing a competitive yield.
As always, we welcome our shareholders' comments and suggestions.
Very truly yours,
/s/ Paul J. Weston /s/ C. Stephen Wesselkamper
Paul J. Weston C. Stephen Wesselkamper
Executive Vice President Executive Vice President and Portfolio Manager
<TABLE>
<CAPTION>
U.S. GOVERNMENT RESERVES AVERAGE
ANNUAL TOTAL RETURN PERIODS
ENDED SEPTEMBER 30, 1996 CONSUMER PRICE INDEX
<S> <C> <C>
10 Years 5.43% 3.68%
5 Years 3.86% 2.87%
3 Years 4.30% 2.88%
1 Year 4.86% 3.07%
Quarter* 1.18% 0.70%
<FN>
* Not annualized.
</TABLE>
The chart above is intended to compare the total return results of the U.S.
Government Reserves with the Consumer Price Index which is widely considered as
a measure of inflation. Total returns reflect the reinvestment and compounding
of actual daily dividends and distributions for each period noted above. Total
returns are historical and will fluctuate in the future.
Gradison-McDonald U.S. Government Reserves acquired all of the outstanding
shares of Gradison Cash Reserves (GCR), Gradison U.S. Government Trust, McDonald
Money Market Fund, Inc., and McDonald U.S. Government Money Market Fund, Inc. on
September 27, 1993. Returns prior to that date are those of GCR, which invested
in non-government obligations, the yields of which generally exceed yields of
government obligations.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share.
2
<PAGE> 4
FINANCIAL HIGHLIGHTS (For a share outstanding throughout each period) (Note 3)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------
1996 1995 1994 1993(2) 1992(2)
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- ------- -------
Net investment income .047 .050 .029 .025 .037
Dividends from net investment income (.047) (.050) (.029) (.025) (.037)
-------- -------- -------- ------- -------
Net asset value at end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======= =======
Total return 4.86% 5.10% 2.97% 2.55% 3.83%
======== ======== ======== ======= =======
RATIOS/SUPPLEMENTAL DATA:X
Net assets at end of period (in millions) $1,333.1 $1,224.1 $1,001.2 $979.8 $575.9
RATIOS NET OF EXPENSES WAIVED BY THE ADVISER:
Ratio of expenses to average net assets .75% .78% .80%(1) .81% .75%
Ratio of net investment income to
average net assets 4.72% 5.00% 2.90%(1) 2.53% 3.77%
<FN>
(1) During the year ended September 30, 1994, the adviser absorbed expenses of
the Fund through waiver of a portion of the investment advisory fee.
Assuming no waiver of expenses, the ratio of expenses to average net assets
was .81% and the ratio of net investment income to average net assets was
2.89%.
(2) Prior to September 27, 1993, the financial results are those of Gradison
Cash Reserves, the assets and liabilities of which were acquired by the Fund
effective September 27, 1993 (Note 1).
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 5
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
MATURITY, INTEREST PRINCIPAL
COUPON RATE RATE(2) AMOUNT VALUE
FEDERAL FARM CREDIT BANKS, DISCOUNT NOTES - 12.06%
<S> <C> <C> <C>
10/01/96 5.15% $ 5,000,000 $ 5,000,000
10/03/96 5.19 14,000,000 13,995,963
10/09/96 5.20 15,000,000 14,982,667
10/10/96 5.27 12,000,000 11,984,190
10/11/96 5.23 16,400,000 16,376,174
10/15/96 5.22 10,860,000 10,837,954
10/21/96 5.21 12,000,000 11,965,267
10/24/96 5.28 10,000,000 9,966,267
10/29/96 5.38 11,625,000 11,576,356
11/01/96 5.36 10,000,000 9,953,844
11/14/96 5.25 18,810,000 18,689,410
12/17/96 5.27 25,000,000 24,718,469
-----------
160,046,561
-----------
FEDERAL FARM CREDIT BANKS, BONDS - 1.77%
11/01/96, 5.60% 5.49 10,000,000 10,000,820
11/01/96, 5.45% 5.45 13,525,000 13,523,639
-----------
23,524,459
-----------
FEDERAL FARM CREDIT BANKS,
FLOATING RATE NOTES(1) - 18.01%
1/13/97 5.22 26,000,000 25,987,068
1/22/97 5.21 13,000,000 12,992,563
4/01/97 5.41 50,000,000 49,986,696
5/01/97 5.56 50,000,000 49,977,348
6/13/97 5.57 50,000,000 50,000,000
6/27/97 5.52 50,000,000 49,982,312
-----------
238,925,987
-----------
FEDERAL FARM CREDIT BANKS,
FLOATING RATE MASTER NOTE(1) - 7.91%
10/16/96 5.36 105,000,000 105,000,000
-----------
</TABLE>
<TABLE>
<CAPTION>
MATURITY, INTEREST PRINCIPAL
COUPON RATE RATE(2) AMOUNT VALUE
FEDERAL FARM CREDIT BANKS, DISCOUNT NOTES - 12.06%
<S> <C> <C> <C>
10/02/96 5.28% $ 7,915,000 $ 7,913,839
10/03/96 5.22 15,000,000 14,995,650
10/07/96 5.28 6,200,000 6,194,544
10/08/96 5.16 19,200,000 19,180,736
10/10/96 5.22 9,405,000 9,392,726
10/15/96 5.31 50,000,000 49,896,799
10/17/96 5.16 25,000,000 24,942,667
10/21/96 5.33 8,400,000 8,375,127
10/24/96 5.18 37,000,000 36,877,551
10/28/96 5.20 7,985,000 7,953,858
11/21/96 5.19 61,000,000 60,551,483
11/27/96 5.40 19,495,000 19,328,318
12/04/96 5.37 25,000,000 24,761,333
12/12/96 5.37 15,000,000 14,838,900
12/17/96 5.40 6,300,000 6,227,235
12/19/96 5.40 15,000,000 14,822,250
1/10/97 5.43 8,465,000 8,336,043
1/23/97 5.44 22,585,000 22,195,936
1/28/97 5.43 15,000,000 14,730,762
2/03/97 5.33 10,000,000 9,814,931
3/06/97 5.34 10,000,000 9,768,600
3/12/97 5.32 10,000,000 9,760,600
3/18/97 5.33 10,000,000 9,751,267
4/10/97 5.48 15,000,000 14,563,883
-----------
425,175,038
-----------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 6
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
MATURITY, INTEREST PRINCIPAL
COUPON RATE RATE(2) AMOUNT VALUE
FEDERAL HOME LOAN BANKS, BONDS - 6.75%
<S> <C> <C> <C>
1/02/97, 5.42% 5.42% $ 5,000,000 $ 5,000,000
1/03/97, 5.53% 5.56 5,400,000 5,399,567
1/29/97, 5.24% 5.30 25,000,000 24,994,918
3/05/97, 5.30% 5.30 25,000,000 25,000,000
3/06/97, 5.04% 5.25 20,000,000 19,982,562
6/20/97, 6.11% 6.11 9,150,000 9,150,000
-----------
89,527,047
-----------
FEDERAL HOME LOAN BANKS,
FLOATING RATE NOTES(1) - 8.29%
11/13/96 5.21 10,000,000 9,999,530
3/27/97 5.29 50,000,000 49,977,557
9/26/97 5.36 50,000,000 49,961,189
-----------
109,938,276
-----------
MATURITY, INTEREST PRINCIPAL
COUPON RATE RATE(2) AMOUNT VALUE
STUDENT LOAN MARKETING ASSOCIATION,
FLOATING RATE NOTES(1) - 3.02%
10/30/97 5.67% $ 20,000,000 $ 20,038,448
11/24/97 5.49 20,000,000 20,000,000
-------------
40,038,448
-------------
TENNESSEE VALLEY AUTHORITY, DISCOUNT NOTES - 6.35%
10/09/96 5.22 10,000,000 9,988,400
10/23/96 5.23 58,000,000 57,814,625
11/07/96 5.20 16,500,000 16,411,817
-------------
84,214,842
-------------
U.S. TREASURY NOTES - 3.79%
1/31/97, 7.50% 5.33 20,000,000 20,138,690
2/28/97, 6.88% 5.59 30,000,000 30,150,927
-------------
50,289,617
-------------
TOTAL INVESTMENTS, AT VALUE
(Cost $1,326,680,275) - 100% $1,326,680,275
==============
<FN>
(1) For regulatory purposes, the maturity date of floating rate securities
with market prices that approximate par is considered to be the date upon
which the next readjustment of the interest rate can occur.
(2) The interest rates disclosed in the portfolio of investments are as
follows:
- U.S. Government Agency discount notes - the discount rate at the time
of purchase;
- U.S. Treasury notes and U.S. Government Agency bonds - the
yield to maturity at the time of purchase;
- U.S. Government Agency floating rate notes - the nominal coupon rate at
September 30, 1996.
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 7
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
ASSET
<S> <C>
Investments in securities, at value (Note 1) (Cost $1,326,680,275) $1,326,680,275
Interest receivable 7,062,276
Prepaid expenses and other assets 691,123
-------------
TOTAL ASSETS 1,334,433,674
-------------
LIABILITIES
Accrued investment advisory fee (Note 2) 466,773
Payable for Fund shares redeemed 433,830
Other accrued expenses payable to adviser (Note 2) 291,706
Other accrued expenses and liabilities 178,182
-------------
TOTAL LIABILITIES 1,370,491
-------------
NET ASSETS
Equivalent to $1.00 per share on 1,333,063,183 outstanding shares (Note 1)
($.01 par value - unlimited number of shares authorized) $1,333,063,183
=============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 8
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1996
<S> <C> <C>
INTEREST INCOME $73,584,299
EXPENSES:
Investment advisory fee (Note 2) $ 6,078,331
Transfer agency fees (Note 2) 2,026,000
Distribution (Note 2) 1,334,962
Accounting services fees (Note 2) 153,364
Printing 115,801
Registration fees 100,564
ICI dues 53,232
Professional fees 50,529
Trustees' fees (Note 2) 43,822
Insurance 35,485
Other 103,914
----------
TOTAL EXPENSES 10,096,004
-----------
NET INVESTMENT INCOME $63,488,295
===========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 9
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------------
1996 1995
<S> <C> <C>
FROM NET INVESTMENT INCOME $ 63,488,295 $ 55,329,396
------------- -------------
FROM DIVIDENDS TO SHAREHOLDERS (63,488,295) (55,329,396)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
(at a constant net asset value of $1.00 per share)
Proceeds from shares sold 5,411,348,184 5,412,404,275
Net asset value of shares issued in reinvestment of dividends 63,488,295 55,329,396
Payments for shares redeemed (5,365,902,757) (5,244,837,425)
------------- -------------
Increase in net assets from Fund share transactions 108,933,722 222,896,246
------------- -------------
TOTAL INCREASE IN NET ASSETS 108,933,722 222,896,246
NET ASSETS:
Beginning of year 1,224,129,461 1,001,233,215
------------- -------------
End of year $1,333,063,183 $1,224,129,461
============= =============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
Gradison-McDonald Cash Reserves Trust (the Trust) is a no-load, diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended. Effective with the start of business on September 27,
1993 (the Reorganization Date) all of the outstanding shares of the Gradison
Cash Reserves (GCR) series of the Trust, Gradison U.S. Government Trust,
McDonald Money Market Fund, Inc., and McDonald U.S. Government Money Market
Fund, Inc. were acquired by a new series of the Trust, Gradison-McDonald U.S.
Government Reserves (the Fund).
The Fund's investment objective is to maximize current income to the extent
consistent with the preservation of capital and the maintenance of liquidity.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of the Fund's financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amount of income and expenses for that
period. Actual results could differ from those estimates.
SECURITIES VALUATION -- Investments are valued using the amortized cost method
which approximates market value. This involves initially valuing a security at
its original cost and thereafter assuming a constant amortization to maturity of
any discount or premium. This method of valuation is expected to enable the Fund
to maintain a constant net asset value per share.
SECURITIES TRANSACTIONS AND INTEREST INCOME -- Securities transactions are
accounted for on the trade date (the date the order to buy or sell is executed).
Interest income is accrued as earned and includes any immaterial gains or losses
realized from securities transactions during the year.
FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS -- Fund shares are sold and
redeemed on a continuing basis at the net asset value. The net asset value per
share is computed by dividing the net asset value of the Fund (total assets less
total liabilities) by the number of shares outstanding. All of the net
investment income of the Fund is declared as a dividend and paid in additional
shares once daily. Net investment income consists of all interest income accrued
on the portfolio securities of the Fund, plus or minus amortized purchase
discount or premium, less accrued expenses. Share purchases effective before
12:00 noon (Eastern time) earn dividends that day. Redemption requests received
before 12:00 noon will not receive that day's dividend.
TAXES -- It is the Trust's policy to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. As provided therein,
in any fiscal year in which the Trust so qualifies, and distributes at least 90%
of its taxable net income, the Trust will be relieved of federal income tax on
the income distributed. Accordingly, no provision for income taxes has been
made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Trust's intention to declare as dividends
in each calendar year, at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains, if any (earned
during the twelve months ended October 31) plus undistributed amounts from prior
years.
The tax basis of investments is equal to the amortized cost as shown on the
Portfolio of Investments.
NOTE 2 -- TRANSACTIONS WITH AFFILIATES
The Fund's investments are managed, subject to the general supervision and
control of the Trust's Board of Trustees, by McDonald & Company Securities, Inc.
(McDonald), a registered investment adviser and securities dealer, pursuant to
the
9
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996
terms of an Investment Advisory Agreement (the Agreement). Under the terms of
the Agreement, the Trust pays McDonald a fee computed and accrued daily and paid
monthly based upon the Fund's average daily net assets at the annual rate of
.50% on the first $400 million, .45% on the next $600 million, .40% on the next
$1 billion and .35% on any amounts in excess of $2 billion.
Under the terms of the Agreement, McDonald bears the costs of salaries and
related expenses of executive officers of the Trust who are necessary for the
management and operations of the Trust. In addition, McDonald bears the costs of
preparing, printing and mailing sales literature and other advertising
materials, and compensates the Trust's trustees who are affiliated with
McDonald.
Under the terms of a Transfer Agency, Accounting Services and Administrative
Services Agreement, McDonald provides transfer agent, dividend disbursing,
accounting services and administrative services to the Trust. The Trust pays
McDonald a monthly fee for transfer agency and administrative services at an
annual rate of $23.50 per shareholder account, plus out-of-pocket costs for
statement paper, statement and reply envelopes and reply postage. The Trust pays
McDonald a monthly fee for accounting services based on the Fund's average daily
net assets at an annual rate of .015% on the first $400 million, .0125% on the
next $300 million, .01% on the next $300 million and .0075% on any amount in
excess of $1 billion, with a minimum annual fee of $25,000.
Under the terms of a Distribution Service Plan adopted under Rule 12b-1 of the
Investment Company Act of 1940, the Trust has entered into an agreement with
McDonald pursuant to which the Trust pays McDonald a service fee in the annual
amount of .10% of the Fund's average daily net assets.
The officers of the Trust are also officers of McDonald.
Each trustee of the Trust who is not affiliated with McDonald receives fees from
the Trust for services as a trustee. The amounts of such fees for each trustee
are as follows: (a) an annual fee of $6,000 payable in quarterly installments
for service during each fiscal quarter, (b) $500 for each Board of Trustees
meeting attended and (c) $300 for each committee meeting attended. Each trustee
not serving on other Gradison-McDonald Mutual Fund Boards of Trustees receives
an additional $500 for each meeting attended.
10
<PAGE> 12
Grandison-McDonald
ARTHUR
ANDERSEN
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of the
Gradison-McDonald U.S. Government Reserves series
of the Gradison-McDonald Cash Reserves Trust:
We have audited the accompanying statement of assets and liabilities of the
Gradison-McDonald U.S. Government Reserves, a series of the Gradison-McDonald
Cash Reserves Trust (a Massachusetts business trust), including the portfolio
of investments, as of September 30, 1996, the related statement of operations
for the year then ended, and the statements of changes in net assets for the
periods indicated thereon, and the financial highlights for each of the four
periods in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for the year ended September 30,
1992, of the Gradison-McDonald U.S. Government Reserves series of the
Gradison-McDonald Cash Reserves Trust, was audited by other auditors whose
report dated October 22, 1992, expressed an unqualified opinion on these
financial highlights.
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 from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1996, 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Gradison-McDonald U.S. Government Reserves series of the Gradison-McDonald
Cash Reserves Trust as of September 30, 1996, the results of its operations for
the year then ended, the changes in its net assets for the periods indicated
thereon, and the financial highlights for each of the four periods in the period
then ended, in conformity with generally accepted accounting principles.
Cincinnati, Ohio,
October 25, 1996 /s/ Arthur Andersen LLP
11
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000042895
<NAME> GRADISON MCDONALD U.S. GOVERNMENT RESERVES
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 1,326,680,275
<INVESTMENTS-AT-VALUE> 1,326,680,275
<RECEIVABLES> 7,062,276
<ASSETS-OTHER> 691,123
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,334,433,674
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,370,491
<TOTAL-LIABILITIES> 1,370,491
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,333,063,183
<SHARES-COMMON-STOCK> 1,333,063,183
<SHARES-COMMON-PRIOR> 1,224,129,461
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,333,063,183
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 73,584,299
<OTHER-INCOME> 0
<EXPENSES-NET> 10,096,004
<NET-INVESTMENT-INCOME> 63,488,295
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 63,488,295
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 63,488,295
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,411,348,184
<NUMBER-OF-SHARES-REDEEMED> 5,365,902,757
<SHARES-REINVESTED> 63,488,295
<NET-CHANGE-IN-ASSETS> 108,933,722
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,078,331
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 10,096,004
<AVERAGE-NET-ASSETS> 1,344,582,687
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .047
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .047
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
