<PAGE> 1
[ZURICH LOGO]
98 ZURICH MONEY FUNDS
SEMI ANNUAL REPORT TO SHAREHOLDERS FOR THE PERIOD ENDED JANUARY 31, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SUBJECT PAGE
<S> <C>
FUND OBJECTIVES 1
- ------------------------------------------------------------------------
PERFORMANCE SUMMARY 2
- ------------------------------------------------------------------------
VARIABLES AFFECTING PERFORMANCE 5
- ------------------------------------------------------------------------
PERFORMANCE UPDATE 6
- ------------------------------------------------------------------------
TERMS TO KNOW 9
- ------------------------------------------------------------------------
SPECIAL SHAREHOLDERS' MEETING 10
- ------------------------------------------------------------------------
PORTFOLIO COMPOSITION 11
- ------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 12
- ------------------------------------------------------------------------
FINANCIAL STATEMENTS 28
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 34
- ------------------------------------------------------------------------
</TABLE>
<PAGE> 3
fund objectives
Zurich Money Funds is an open-end, diversified, management investment company
offering a choice of three investment funds. Each fund invests in high quality
short-term money market instruments consistent with its specific objective as
outlined below. Each Fund seeks to maintain a net asset value of $1.00 per
share, however there is no assurance that a $1.00 value will be maintained. An
investment in money market funds is neither insured nor guaranteed by the U.S.
Government.
ZURICH MONEY MARKET FUND
This fund seeks maximum current income to the extent consistent with stability
of principal by investing primarily in commercial paper, securities of the U.S.
Government, its agencies, and bank certificates of deposit.
ZURICH GOVERNMENT MONEY FUND
This fund seeks maximum current income to the extent consistent with stability
of principal by investing exclusively in obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
ZURICH TAX-FREE MONEY FUND
This fund seeks maximum current income that is exempt from federal income taxes
to the extent consistent with stability of principal from a portfolio of
short-term, high quality tax-exempt municipal securities.
--
1
<PAGE> 4
PERFORMANCE SUMMARY
ZURICH MONEY MARKET FUND
YIELD COMPARISON
Zurich Money Market Fund is compared to its IBC Financial Data category --
The First Tier Money Market Fund Average which consists of all
non-institutional taxable money market funds investing in only first tier
(highest rating) securities tracked by IBC Financial Data. Returns are
historical and do not guarantee future results. Fund yields fluctuate.
7-day yield is the annualized net investment income per share for the
period shown. Gains or losses are not included.
[FUND YIELD VS. FIRST TIER MONEY MARKET FUNDS GRAPH]
<TABLE>
<CAPTION>
Weekly 7-Day Average Yield
FIRST TIER
FUND YIELD MONEY MARKET FUNDS
<S> <C> <C>
8/5/97 5.27 4.95
8/26/97 5.24 4.93
9/30/97 5.25 4.95
10/28/97 5.2 4.93
11/25/97 5.28 4.96
12/30/97 5.47 5.07
1/27/98 5.34 4.99
</TABLE>
LIPPER RANKING
Lipper Analytical Services, Inc. rankings are based upon changes in net asset
value with all dividends reinvested for the periods indicated as of
1/31/98. Rankings are historical and do not reflect future performance. The
Lipper category used for comparison is the Lipper Money Market Instrument Fund
category.
[LIPPER RANKING GRAPH]
<TABLE>
<CAPTION>
<S> <C> <C>
Top 7% #21 of 303 funds 1 year
Top 12% #22 of 184 funds 5 years
Top 6% #7 of 110 funds 10 years
Top fund #1 of 29 funds 29 years
</TABLE>
10-YEAR PERFORMANCE
This chart shows the value of a hypothetical $10,000 investment in Zurich Money
Market Fund over the past 10 fiscal years with all dividends reinvested.
The returns shown are historical and do not represent future performance.
[10-YEAR PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Performance of a $10,000 Hypothetical Investment
<S> <C>
2/1/88 10,000
1/31/89 10,768
1/31/90 11,755
1/31/91 12,714
1/31/92 13,443
1/31/93 13,900
1/31/94 14,297
1/31/95 14,899
1/31/96 15,743
1/31/97 16,563
1/31/98 17,456
</TABLE>
- --
2
<PAGE> 5
ZURICH GOVERNMENT MONEY FUND
YIELD COMPARISON
Zurich Government Money Fund is compared to its IBC Financial Data category --
The Government Money Market Fund Average which consists of all
non-institutional government money market funds tracked by IBC Financial
Data. Returns are historical and do not guarantee future results. Fund yields
fluctuate.
7-day yield is the annualized net investment income per share for the period
shown. Gains or losses are not included.
[FUND YIELD VS. GOVERNMENT MONEY MARKET FUNDS GRAPH]
<TABLE>
<CAPTION>
Weekly 7-Day Average Yield
GOVERNMENT
FUND YIELD MONEY MARKET FUNDS
<S> <C> <C>
8/5/97 5.27 4.9
8/26/97 5.24 4.86
9/30/97 5.16 4.89
10/28/97 5.18 4.89
11/25/97 5.27 4.9
12/30/97 5.4 4.97
1/27/98 5.12 4.91
</TABLE>
LIPPER RANKING
Lipper Analytical Services, Inc. rankings are based upon changes in net asset
value with all dividends reinvested for the periods indicated as of 1/31/98.
Rankings are historical and do not reflect future performance. The Lipper
category used for comparison is the Lipper Government Money Market Fund
category.
[LIPPER RANKING GRAPH]
<TABLE>
<CAPTION>
<S> <C> <C>
Top 4% #5 of 118 funds 1 year
Top 6% #5 of 82 funds 5 years
Top 4% #2 of 45 funds 10 years
</TABLE>
10-YEAR PERFORMANCE
This chart shows the value of a hypothetical $10,000 investment in Zurich
Government Money Fund over the past 10 fiscal years, with all dividends
reinvested. The returns shown are historical and do not represent future
performance.
[10-YEAR PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Performance of a $10,000 Hypothetical Investment
<S> <C>
2/1/88 10,000
1/31/89 10,760
1/31/90 11,740
1/31/91 12,681
1/31/92 13,392
1/31/93 13,855
1/31/94 14,258
1/31/95 14,856
1/31/96 15,701
1/31/97 16,516
1/31/98 17,401
</TABLE>
--
3
<PAGE> 6
4
ZURICH MONEY FUNDS PERFORMANCE SUMMARY, CONTINUED
ZURICH TAX-FREE MONEY FUND
YIELD COMPARISON
Zurich Tax-Free Money Fund is compared to its IBC Financial Data
category -- The Tax-Free Money Market Fund Average which consists of all
non-institutional tax-free money market funds tracked by IBC Financial Data.
Returns are historical and do not guarantee future results. Fund yields
fluctuate. Income from Zurich Tax-Free Money Fund may be subject to state and
local taxes and the alternative minimum tax.
7-day yield is the annualized net investment income per share for
the period shown. Gains or losses are not included.
FUND YIELD VS. TAX-FREE MONEY MARKET FUNDS
[LINE GRAPH]
<TABLE>
<CAPTION>
WEEKLY 7-DAY AVERAGE YIELD
08/05/97 08/26/97 09/30/97 10/28/97 11/25/97 12/30/97 01/27/98
<S> <C> <C> <C> <C> <C> <C> <C>
Fund Yield 3.45 3.29 3.55 3.43 3.60 3.67 3.37
Tax-Free Money Market Funds 3.04 2.86 3.29 3.09 3.24 3.34 2.92
</TABLE>
LIPPER RANKING
Lipper Analytical Services, Inc. rankings are based upon changes in net asset
value with all dividends reinvested for the periods indicated as of 1/31/98.
Rankings are historical and do not reflect future performance. The Lipper
category used for comparison is the Lipper Tax-Free Money Fund category.
LIPPER RANKING
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
<C> <C> <C>
TOP 4% TOP 8% TOP 8%
#5 of 134 #8 of 98 funds #5 of 65 funds
</TABLE>
10-YEAR PERFORMANCE
This chart shows the value of a hypothetical $10,000 investment in
Zurich Tax-Free Money Fund over the past 10 fiscal year periods, with all
dividends reinvested. The returns shown are historical and do not represent
future performance.
10-YEAR PERFORMANCE
[LINE GRAPH]
PERFORMANCE OF A $10,000 HYPOTHETICAL INVESTMENT
<TABLE>
<CAPTION>
2/1/88 1/31/89 1/31/90 1/31/91 1/31/92 1/31/93 1/31/94 1/31/95 1/31/96 1/31/97 1/31/98
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10,000 10,524 11,185 11,826 12,335 12,674 12,958 13,323 13,820 14,279 14,775
</TABLE>
<PAGE> 7
variables affecting
performance
The investment manager invests in high-quality, short-term securities that are
consistent with each fund's specific objectives.
Our primary goal is to provide competitive yields while maintaining preservation
of principal and a high degree of liquidity. The specific securities portfolio
managers select have a major impact on reaching our goal. However, they must
continuously analyze other variables which affect share price stability and fund
performance. Traditionally, there are three important variables which are
factored into the decision-making process:
MONETARY POLICY
Monetary Policy is managed by the Federal Reserve Board (the "Fed") and has a
direct impact on short-term interest rates. If the Fed determines that inflation
is climbing, it will enact a policy to decrease or "tighten" the money supply.
With less money available, money lenders can command higher interest rates on
the money market securities they sell. On the other hand, if the Fed determines
the economy is heading toward a recession, it will increase or "ease" the money
supply. With more money for borrowers to access, the interest rates for money
market securities decline.
INTEREST RATES
Interest Rates will affect money fund yields because as investments mature, the
cash received will be reinvested at current money market rates which could be
either higher or lower. Reinvesting at higher interest rates generally means
higher yields for money funds and reinvesting at lower rates generally means
lower yields.
AVERAGE LENGTH OF MATURITY
Average Length of Maturity affects the timing of reinvesting cash from maturing
investments. If interest rates are expected to rise, decreasing the portfolio's
average length of maturity would enable the Fund to purchase higher-yielding
money market securities sooner. Conversely, if rates were expected to decrease,
the Fund would invest in money market securities with a longer length of
maturity in order to maintain higher yields longer.
(ALSO SEE "TERMS TO KNOW" SECTION)
--
5
<PAGE> 8
performance update
AN INTERVIEW WITH PORTFOLIO MANAGER FRANK RACHWALSKI
Although the U.S. economy rolled along at a very
healthy pace during the report period (8/1/97 to
1/31/98), the crisis in Asia caused considerable
[PHOTO FRANK RACHWALSKI] turmoil for American investors. The Federal Reserve
Board went into a holding pattern and most
investors wondered what to expect next. Portfolio
manager Frank Rachwalski discusses the market and
Zurich Money Funds' performance during that time.
---------------------------------------------------
FRANK RACHWALSKI IS A MANAGING DIRECTOR OF SCUDDER KEMPER INVESTMENTS AND
PORTFOLIO MANAGER OF ZURICH MONEY FUNDS. MR. RACHWALSKI HOLDS A B.B.A. AND AN
M.B.A. DEGREE FROM LOYOLA UNIVERSITY.
Q FRANK, DURING THE FIRST SIX MONTHS OF OUR FISCAL YEAR, THE DOMESTIC
ECONOMY SEEMED QUITE STRONG. HOW DID THE UNEXPECTED TURN OF EVENTS IN
ASIA IMPACT OUR ECONOMY?
-------------------------------------------------------------------------
A You're right about the domestic economy. During the last 6 months it had
shown exceedingly good strength and momentum. In fact, we had excellent
GDP (Gross Domestic Product) numbers with 4th quarter, 1997, exceeding
everybody's growth expectations. There was also a high level of job creation
with a low level of unemployment which signaled the possibility of wage and
inflation increases. In other words, if we just looked at the domestic economy,
the Federal Reserve Board ("the Fed") would have increased rates. However, in
October when the currencies in Thailand, Malaysia and Indonesia came under
speculative attack, followed by the stock market "crash" in those countries, we
started to see a slowdown in U.S. exports while U.S. imports started selling at
much lower prices. In all, this caused a slight drag on the U.S. economy and the
Fed was on hold to see what developments emerged before changing monetary
policy.
- --------------------------------------------------------------------------------
The views expressed in this report reflect those of the portfolio manager only
through the end of the period of the report, as stated on the cover. The
manager's views are subject to change at any time, based on market and other
conditions.
--
6
<PAGE> 9
Q WE SAW A LOT OF VOLATILITY IN THE U.S. STOCK MARKET SINCE THE ASIAN
CRISIS FIRST SURFACED. HOW WERE THE ZURICH MONEY FUNDS AFFECTED?
------------------------------------------------------------------------
A Zurich Money Funds' yields remained quite stable during this period as
the Funds continued to perform extremely well. Any exposure we might
have had to the Asian crisis would have been through holdings in banks
that had outstanding loans in the affected countries. However, our portfolios
had absolutely no investments in institutions that were seriously affected nor
did we have any direct holdings in these countries.
Q WHAT HAD YOUR STRATEGY BEEN FOR MANAGING THE FUNDS DURING THIS 6-MONTH
PERIOD?
------------------------------------------------------------------------
A We'd been keeping the average maturity of our investments on the shorter
side. When the Asian crisis hit, central banks in southeast Asia
liquidated their U.S. Treasury holdings in order to generate more
currency reserves. At the same time, many investors were flocking to U.S.
Treasuries since it is the safest investment you can have. This simultaneous
movement to sell and buy U.S. Treasuries provided an offset to the impact either
movement alone would have had on short-term interest rates. We also saw the
yield curve flatten, which meant that longer-maturity interest rates fell
relative to short-term interest rates. So, there was no incentive for us to
extend the Funds' maturities at that time.
Q WHAT DO YOU ANTICIPATE HAPPENING WITH INTEREST RATES DURING THE NEXT 6
MONTHS?
------------------------------------------------------------------------
A Although the Asian situation is still developing, it looks like it isn't
going to be as bad as we initially thought. Also, we see no reason why
the U.S. economy will not continue on a path of very decent growth.
Continued
--
7
<PAGE> 10
Consumer expectations are high, job creation is strong and housing numbers are
favorable. The big issue is, will there be any drag on the economy coming from
Asia. And, right now it's being counter-balanced by other countries' stronger
growth.
Q BASED ON THIS OUTLOOK, HOW WILL YOU MANAGE ZURICH MONEY FUNDS FOR THE
NEXT SIX MONTHS?
------------------------------------------------------------------------
A Well, I still don't think there is an incentive to extend maturity at
this point. As I mentioned, the Fed isn't positioned to increase rates
and the yield curve has flattened so there is no reward for longer
maturities. We will continue to closely monitor economic developments,
especially as affected by the Asian situation. We intend to stay in a somewhat
neutral maturity range which will allow us to take advantage of yield
differences that occur because of fluctuations in the market. And, as always, we
will continue to look for value.
--
8
<PAGE> 11
TERMS TO KNOW
YIELD Yield is the amount of net investment income (income
minus expenses including management fees) your investment
has produced over a specific period, expressed as a
percentage of your investment. Capital gains and losses,
which are infrequent in a money market fund, are not
included.
MATURITY Maturity is the time remaining before an issuer is
scheduled to repay the principal amount on a debt
security. Money market instruments are debt securities.
YIELD CURVE Yields tend to vary directly with a security's length of
time to maturity. The longer the maturity, the higher the
risk that interest rates could change, which is why
investors are typically rewarded with a higher yield. For
example, the yield on a 1-month Treasury bill is
typically lower than the yield on a 1-year Treasury note.
When the relationship between yield and maturity is
plotted on a graph it is called the YIELD CURVE. If
yields for long-term investments drop, the YIELD CURVE
will "flatten" since there will be less of a difference
in yield between shorter-term and longer-term
investments. When this happens, it also means longer-term
securities are relatively less attractive. When long-term
yields increase and the curve steepens, longer-term
securities become relatively more desirable.
[SAMPLE YIELD CURVE* GRAPH]
1 Mo. 5
3 Mo. 5.5
6 Mo. 5.85
1 Yr. 6.05
5 Mo. 6.17
10 Mo. 6.23
30 Mo. 6.25
* The yield curve shown is hypothetical and does not represent the past
or future performance of any security held by the Zurich Money Funds.
- --
9
<PAGE> 12
special shareholders'
meeting
A special shareholders' meeting was held on December 3, 1997 and adjourned as
necessary. Zurich Money Funds shareholders were asked to vote on five separate
issues: election of the nine members to the Board of Trustees, ratification of
Ernst & Young LLP as independent auditors, approval of a new investment
management agreement, approval of changes in the Fund's fundamental investment
policies and approval of an amendment to the Fund's Agreement and Declaration of
Trust. The following are the results for each issue:
1) ELECTION OF TRUSTEES
<TABLE>
<CAPTION>
FOR WITHHELD
------------- -----------
<S> <C> <C>
DAVID W. BELIN 2,900,450,890 98,924,506
LEWIS A. BURNHAM 2,907,619,622 91,755,775
DONALD L. DUNAWAY 2,906,526,036 92,846,360
ROBERT B. HOFFMAN 2,908,284,683 91,090,713
DONALD R. JONES 2,905,582,054 93,793,342
SHIRLEY D. PETERSON 2,899,187,419 100,187,977
DANIEL PIERCE 2,899,232,088 100,143,308
WILLIAM P. SOMMERS 2,907,770,614 91,604,782
EDMOND D. VILLANI 2,898,500,982 100,874,414
</TABLE>
2) RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
FOR THE FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
------------- ---------- ----------
<S> <C> <C>
2,880,124,795 54,846,165 64,404,436
</TABLE>
3) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT WITH SCUDDER KEMPER
INVESTMENTS, INC.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
------------- ---------- ----------
<S> <C> <C> <C>
MONEY MARKET FUND 2,087,746,039 88,885,449 82,379,756
GOVERNMENT MONEY FUND 322,546,370 13,810,553 11,965,782
TAX-FREE MONEY FUND 371,055,198 18,501,115 18,188,458
</TABLE>
4) APPROVAL OF CHANGES IN THE FUND'S FUNDAMENTAL INVESTMENT POLICIES TO PERMIT A
MASTER/FEEDER FUND STRUCTURE.
<TABLE>
<CAPTION>
BROKER
FOR AGAINST ABSTAIN NON-VOTES
------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
MONEY MARKET FUND 2,253,952,279 174,737,426 146,001,572 5,041,556
GOVERNMENT MONEY FUND 349,597,122 30,934,208 27,110,027 316,351
TAX-FREE MONEY FUND 418,080,971 35,105,311 28,994,695 2,548,401
</TABLE>
5) APPROVAL OF AN AMENDMENT TO THE FUND'S AGREEMENT AND DECLARATION OF TRUST
<TABLE>
<CAPTION>
BROKER
FOR AGAINST ABSTAIN NON-VOTES
------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
MONEY MARKET FUND 2,271,587,361 153,276,709 150,709,147 4,159,615
GOVERNMENT MONEY FUND 355,497,742 23,296,272 28,896,930 266,763
TAX-FREE MONEY FUND 419,229,894 31,254,005 31,715,134 2,530,346
</TABLE>
--
10
<PAGE> 13
portfolio composition
<TABLE>
<CAPTION>
------------------------------------------------------------
ZURICH MONEY MARKET FUND On 1/31/98*
------------------------------------------------------------
<S> <C> <C>
Commercial paper 62%
------------------------------------------------
Bank obligations 16
------------------------------------------------
[PIE CHART] Repurchase agreements 20
------------------------------------------------
U.S. Government agency notes 2
------------------------------------------------
100%
WEIGHTED AVERAGE MATURITY
Zurich Money Market Fund 30 days
------------------------------------------------
First Tier Money Fund Average+ 58 days
------------------------------------------------------------
ZURICH GOVERNMENT MONEY FUND On 1/31/98*
------------------------------------------------------------
Federal agencies 50%
------------------------------------------------
Repurchase agreements 50
[PIE CHART] ------------------------------------------------
100%
WEIGHTED AVERAGE MATURITY
Zurich Government Money Fund 24 days
------------------------------------------------
Government Money Fund Average+ 47 days
------------------------------------------------------------
ZURICH TAX-FREE MONEY FUND On 1/31/98*
------------------------------------------------------------
Tax-exempt commercial paper 57%
------------------------------------------------
Variable rate demand notes 40
------------------------------------------------
[PIE CHART] Tender securities 2
------------------------------------------------
General market obligations 1
------------------------------------------------
100%
WEIGHTED AVERAGE MATURITY
Zurich Tax-Free Money Fund 22 days
------------------------------------------------
Tax-Free Money Fund Average+ 44 days
</TABLE>
* Portfolio composition and holdings are subject to change.
+ The Funds are compared to their respective IBC Financial Data category: The
First Tier Money Fund Average consists of all non-institutional taxable money
market funds investing in only first tier (highest rating) securities and
tracked by IBC Financial Data; Government Money Fund Average includes all
non-institutional government money market funds tracked by IBC Financial Data;
Tax-Free Money Fund Average consists of all non-institutional tax-free money
market funds tracked by IBC Financial Data.
--
11
<PAGE> 14
Zurich Money Market Fund
portfolio of investments
January 31, 1998 (value in thousands) (unaudited)
<TABLE>
<CAPTION>
CORPORATE OBLIGATIONS
BANKING -- 2.8% RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
Nordbanken N.A., Inc. 5.83% 3/16/98 $ 49,665
--------------------------------------------------------------------------
Sumitomo Bank Capital
Markets, Inc. 5.90% - 7.13% 2/3/98 - 3/9/98 74,813
--------------------------------------------------------------------------
124,478
BUSINESS LOANS -- 19.8%
Ace Overseas Corp. 5.85% 3/6/98 19,897
--------------------------------------------------------------------------
Asset Securitization
Cooperative Corp. 5.86% 2/26/98 24,904
--------------------------------------------------------------------------
Banner Receivables Corp. 5.69% 4/17/98 49,423
--------------------------------------------------------------------------
(a)Beta Finance, Inc. 5.70% 2/2/98 25,000
--------------------------------------------------------------------------
Broadway Capital Corp. 5.68% - 5.69% 4/22/98 - 5/7/98 54,231
--------------------------------------------------------------------------
CXC, Inc. 5.86% 2/25/98 24,908
--------------------------------------------------------------------------
Centric Capital Corp. 5.59% 3/5/98 24,881
--------------------------------------------------------------------------
Corporate Receivables
Corp. 5.83% 2/26/98 49,808
--------------------------------------------------------------------------
Enterprise Capital
Funding Corp. 5.53% 3/2/98 49,786
--------------------------------------------------------------------------
Gotham Capital Corp. 5.73% 4/24/98 59,237
--------------------------------------------------------------------------
International
Securitization Corp. 5.83% 3/18/98 24,824
--------------------------------------------------------------------------
Jet Funding Corp. 5.89% - 6.09% 4/20/98 - 4/30/98 64,110
--------------------------------------------------------------------------
Kitty Hawk Funding Corp. 5.83% 3/17/98 24,828
--------------------------------------------------------------------------
Madison Funding Corp. 5.63% 3/10/98 24,861
--------------------------------------------------------------------------
Ranger Funding Corp. 5.84% 2/6/98 24,984
--------------------------------------------------------------------------
Sheffield Receivables
Corp. 5.86% 2/18/98 49,871
--------------------------------------------------------------------------
Sigma Finance, Inc. 5.81% 2/20/98 34,900
--------------------------------------------------------------------------
Strategic Asset Funding
Corp. 5.79% 2/2/98 40,000
--------------------------------------------------------------------------
Thunder Bay Funding, Inc. 5.55% - 5.96% 2/13/98 - 2/19/98 59,860
--------------------------------------------------------------------------
</TABLE>
--
12
<PAGE> 15
<TABLE>
<CAPTION>
RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
Windmill Funding Corp. 5.84% - 5.87% 2/13/98 - 3/26/98 $ 74,540
--------------------------------------------------------------------------
Working Capital Management
Co., L.P. 6.10% - 6.28% 2/25/98 - 4/17/98 64,449
--------------------------------------------------------------------------
869,302
CAPITAL AND EQUIPMENT LENDING -- 7.0%
(a)American Honda Finance
Corp. 5.61% - 5.83% 2/2/98 - 4/23/98 45,001
--------------------------------------------------------------------------
(a)Caterpillar Financial
Services Corp. 5.56% 5/18/98 25,000
--------------------------------------------------------------------------
Chrysler Financial Corp. 5.83% 3/2/98 49,776
--------------------------------------------------------------------------
(a)Ford Motor Credit Co. 5.70% 2/2/98 59,992
--------------------------------------------------------------------------
Golden Manager's
Acceptance Corp. 5.53% 3/4/98 24,885
--------------------------------------------------------------------------
(a)IBM Credit Corp. 5.70% 2/2/98 54,985
--------------------------------------------------------------------------
(a)John Deere Capital
Corp. 5.92% 3/16/98 15,011
--------------------------------------------------------------------------
(a)Sanwa Business Credit
Corp. 5.63% 2/17/98 29,999
--------------------------------------------------------------------------
304,649
CAPTIVE BUSINESS LENDING -- 5.0%
British Gas Capital, Inc. 5.82% - 5.83% 2/4/98 - 3/18/98 49,816
--------------------------------------------------------------------------
CSW Credit, Inc. 5.82% 2/18/98 19,949
--------------------------------------------------------------------------
(a)FINOVA Capital Corp. 5.65% 2/13/98 66,500
--------------------------------------------------------------------------
Oakland-Alameda County
Coliseum, California 5.87% 2/19/98 10,000
--------------------------------------------------------------------------
(a)Prudential Funding
Corp. 5.74% 2/10/98 10,001
--------------------------------------------------------------------------
Sony Capital Corp. 5.82% - 5.86% 2/20/98 - 2/27/98 64,776
--------------------------------------------------------------------------
221,042
CONSUMER LENDING -- 6.0%
Barton Capital Corp. 5.83% 2/27/98 24,900
--------------------------------------------------------------------------
(a)Beneficial Corp. 5.58% 2/17/98 30,000
--------------------------------------------------------------------------
</TABLE>
--
13
<PAGE> 16
ZURICH MONEY MARKET FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
<TABLE>
<CAPTION>
RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
Countrywide Home Loans 5.59% - 5.84% 2/6/98 - 2/12/98 $ 34,954
--------------------------------------------------------------------------
(b)GMAC Mortgage
Corporation of
Pennsylvania 5.90% 2/2/98 55,000
--------------------------------------------------------------------------
(a)Household Finance Corp. 5.63% 2/27/98 45,000
--------------------------------------------------------------------------
Household International,
Inc. 5.58% 4/27/98 24,679
--------------------------------------------------------------------------
Sears Roebuck Acceptance
Corp. 5.54% 3/10/98 49,725
--------------------------------------------------------------------------
264,258
CONSUMER PRODUCTS AND SERVICES -- 1.7%
Coca-Cola Enterprises,
Inc. 5.55% - 5.83% 2/23/98 - 3/24/98 49,725
--------------------------------------------------------------------------
Tribune Co. 5.55% 3/9/98 24,866
--------------------------------------------------------------------------
74,591
DIVERSIFIED FINANCE -- 6.0%
APEX Funding Corp. 5.74% 4/30/98 49,317
--------------------------------------------------------------------------
(a)CIT Group Holdings,
Inc. 5.58% 2/2/98 39,982
--------------------------------------------------------------------------
Dynamic Funding Corp. 6.08% 2/4/98 64,978
--------------------------------------------------------------------------
General Electric Capital
Corp. 5.81% 2/27/98 24,902
--------------------------------------------------------------------------
Heller Financial, Inc.
(a)5.74% 2/20/98 24,507
6.18% 2/27/98 9,958
--------------------------------------------------------------------------
Old Line Funding Corp. 5.54% - 5.89% 2/2/98 - 2/20/98 24,971
--------------------------------------------------------------------------
Progress Funding Corp. 6.09% 2/17/98 24,938
--------------------------------------------------------------------------
263,553
FINANCIAL SERVICES -- 8.2%
(a)Bear Stearns Cos., Inc. 5.59% - 5.70% 2/6/98 - 2/18/98 55,000
--------------------------------------------------------------------------
(a)CS First Boston, Inc. 5.67% 2/2/98 40,000
--------------------------------------------------------------------------
(a)Goldman Sachs Group,
L.P. 5.53% 2/10/98 55,000
--------------------------------------------------------------------------
(a,b)Lehman Brothers
Holdings, Inc. 5.58% 2/18/98 75,000
--------------------------------------------------------------------------
(a)Merrill Lynch & Co.,
Inc. 5.68% 2/4/98 25,000
--------------------------------------------------------------------------
</TABLE>
--
14
<PAGE> 17
<TABLE>
<CAPTION>
RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
(a)Morgan Stanley, Dean
Witter, Discover & Co. 5.59% - 6.01% 2/18/98 - 3/10/98 $ 50,024
--------------------------------------------------------------------------
Salomon, Inc.
(a)5.80% 2/4/98 30,000
5.86% 2/13/98 29,947
--------------------------------------------------------------------------
359,971
MANUFACTURING/INDUSTRIAL -- 1.0%
Cooper Industries, Inc. 5.62% 2/2/98 45,000
UTILITIES -- 4.5%
Brazos River Authority,
Texas 5.85% 4/7/98 50,000
--------------------------------------------------------------------------
GTE Corp. 6.04% - 6.16% 2/24/98 - 3/23/98 74,612
--------------------------------------------------------------------------
MCI Communications Corp. 5.84% 2/17/98 - 2/18/98 59,852
--------------------------------------------------------------------------
New Hampshire Industrial
Development Authority 5.87% 2/19/98 10,000
--------------------------------------------------------------------------
194,464
--------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS -- 62.0%
(AVERAGE MATURITY: 31 DAYS) 2,721,308
</TABLE>
--
15
<PAGE> 18
ZURICH MONEY MARKET FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands)
BANK OBLIGATIONS
<TABLE>
<CAPTION>
CERTIFICATES OF DEPOSIT
AND BANK NOTES --
U.S. BANKS -- 14.6% RATE MATURITY VALUE
- --------------------------------------------------------------------------
<S> <C> <C> <C>
(a)Amex Centurian Bank 5.68% 2/5/98 $ 25,000
- --------------------------------------------------------------------------
(a)AmSouth Bank of Alabama 5.51% 2/23/98 19,992
- --------------------------------------------------------------------------
(a)Bank One 5.61% 2/3/98 54,981
- --------------------------------------------------------------------------
(a)Bankers Trust Co. 5.69% 2/2/98 26,498
- --------------------------------------------------------------------------
(a)Comerica Bank 5.67% - 5.77% 2/2/98 - 3/23/98 64,989
- --------------------------------------------------------------------------
(a)CoreStates Bank, N.A. 5.57% - 5.69% 2/4/98 - 2/20/98 70,000
- --------------------------------------------------------------------------
(a)First National Bank of
Boston 5.65% 2/2/98 49,993
- --------------------------------------------------------------------------
(a)First USA Bank 6.02% 3/18/98 20,061
- --------------------------------------------------------------------------
(a)Key Bank, N.A. 5.58% 2/2/98 59,983
- --------------------------------------------------------------------------
MBNA America Bank, N.A. 5.87% 2/23/98 60,000
- --------------------------------------------------------------------------
(a)Mellon Bank Corp. 5.68% 2/9/98 54,992
- --------------------------------------------------------------------------
Morgan Guaranty Trust Co.
of New York
(a)5.63% 2/2/98 19,999
5.80% 3/23/98 10,000
- --------------------------------------------------------------------------
(a)Old Kent Bank 5.56% - 5.68% 2/2/98 - 4/13/98 49,991
- --------------------------------------------------------------------------
(a)PNC Bank, N.A. 5.58% 2/2/98 54,969
- --------------------------------------------------------------------------
641,448
CERTIFICATES OF DEPOSIT --
CANADIAN BANKS -- .6%
Toronto Dominion Bank 5.56% 4/9/98 25,000
- --------------------------------------------------------------------------
TOTAL BANK OBLIGATIONS -- 15.2%
(AVERAGE MATURITY: 15 DAYS) 666,448
</TABLE>
--
16
<PAGE> 19
<TABLE>
<CAPTION>
(c) REPURCHASE AGREEMENTS RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
(DATED 2/98 - 4/98, COLLATERALIZED BY FEDERAL HOME LOAN
MORTGAGE
CORPORATION AND FEDERAL NATIONAL MORTGAGE ASSOCIATION
SECURITIES)
CS First Boston, Inc.
(held at The Chase
Manhattan Bank) 5.50% - 5.51% 3/11/98 - 3/19/98 200,000
--------------------------------------------------------------------------
Chase Securities, Inc.
(held at The Chase
Manhattan Bank) 5.55% - 5.75% 2/11/98 - 4/8/98 410,000
--------------------------------------------------------------------------
Goldman, Sachs & Co.
(held at The Bank of New
York) 5.51% 3/26/98 25,000
--------------------------------------------------------------------------
Salomon Brothers, Inc.
(held at The Bank of New
York) 5.57% - 5.80% 2/10/98 - 3/31/98 250,000
--------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS -- 20.2%
(AVERAGE MATURITY: 42 DAYS) 885,000
U.S. GOVERNMENT AGENCY NOTES
(a)Federal National
Mortgage Association 5.23% 2/3/98 54,744
--------------------------------------------------------------------------
(a) Student Loan Marketing
Association 5.44% 2/3/98 43,907
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY NOTES -- 2.2%
(AVERAGE MATURITY: 4 DAYS) 98,651
--------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.6%
(AVERAGE MATURITY: 30 DAYS) 4,371,407
--------------------------------------------------------------------------
17,602
CASH AND OTHER ASSETS, LESS LIABILITIES -- .4%
--------------------------------------------------------------------------
NET ASSETS -- 100% $ 4,389,009
</TABLE>
SEE ACCOMPANYING NOTES TO PORTFOLIOS OF INVESTMENTS.
--
17
<PAGE> 20
Zurich Government Money Fund
portfolio of investments
January 31, 1998 (value in thousands) (unaudited)
<TABLE>
<CAPTION>
SHORT-TERM NOTES RATE MATURITY VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C>
(ISSUED OR GUARANTEED BY U.S. GOVERNMENT AGENCIES OR
INSTRUMENTALITIES)
(a)Agency for
International Development
Government of Israel 5.59% 2/3/98 $ 5,664
-------------------------------------------------------------------------
(a)Export-Import Bank of
the United States
Cathay Pacific Airways
Limited 5.69% 2/14/98 3,421
KA Leasing, Ltd. 5.69% 2/15/98 13,699
Kuwait Investment
Authority 5.58% 2/15/98 15,226
VARIG Brazilian Airlines 5.69% 4/16/98 3,810
-------------------------------------------------------------------------
(a)Federal Farm Credit
Banks 5.61% 2/2/98 17,999
-------------------------------------------------------------------------
(a)Federal Home Loan Bank 5.70% 2/2/98 14,100
-------------------------------------------------------------------------
(a)Federal Home Loan
Mortgage Corp. 5.66% - 5.69% 2/13/98 - 3/17/98 13,928
-------------------------------------------------------------------------
Federal National Mortgage
Association
(a)5.22% - 5.60% 2/2/98 - 2/3/98 60,301
5.68% - 5.71% 2/10/98 - 3/27/98 13,794
-------------------------------------------------------------------------
(a)Overseas Private
Investment Corp.
International Paper Co. 5.55% 4/15/98 4,800
Omolon 5.71% 2/3/98 24,667
-------------------------------------------------------------------------
(a)Student Loan Marketing
Association 5.43% 2/3/98 141,655
-------------------------------------------------------------------------
Tennessee Valley Authority 5.64% 3/26/98 4,960
-------------------------------------------------------------------------
TOTAL SHORT-TERM NOTES -- 49.7%
(AVERAGE MATURITY: 10 DAYS) 338,024
</TABLE>
--
18
<PAGE> 21
<TABLE>
<CAPTION>
(c) REPURCHASE AGREEMENTS RATE MATURITY VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C>
(DATED 2/98 - 4/98, COLLATERALIZED BY FEDERAL HOME LOAN
MORTGAGE CORPORATION, FEDERAL NATIONAL MORTGAGE ASSOCIATION AND
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION SECURITIES)
Bear, Stearns & Co. Inc. 5.55% - 5.87% 2/11/97 - 3/4/98 $ 95,000
-------------------------------------------------------------------------
Chase Securities, Inc.
(held at The Chase
Manhattan Bank) 5.55% 4/2/98 15,000
-------------------------------------------------------------------------
Morgan Stanley, Dean
Witter, Discover, & Co.
Incorporated
(held at The Bank of New
York) 5.58% - 5.74% 2/23/98 - 4/2/98 16,000
-------------------------------------------------------------------------
Nikko Securities Co. International, Inc.
(held at The Bank of New
York) 5.53% - 5.74% 3/11/98 - 4/15/98 83,000
-------------------------------------------------------------------------
Nomura Securities International, Inc.
(held at The Bank of
New York) 5.57% - 5.83% 2/4/98 - 4/6/98 100,000
-------------------------------------------------------------------------
Salomon Brothers Inc.
(held at The Bank of New
York) 5.54% - 5.81% 2/2/98 - 3/4/98 29,000
-------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS -- 49.7%
(AVERAGE MATURITY: 37 DAYS) 338,000
-------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.4%
(AVERAGE MATURITY: 24 DAYS)
676,024
-------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES --.6% 3,977
-------------------------------------------------------------------------
NET ASSETS -- 100% $ 680,001
</TABLE>
SEE ACCOMPANYING NOTES TO PORTFOLIOS OF INVESTMENTS.
--
19
<PAGE> 22
Zurich Tax-Free Money Fund
portfolio of investments
January 31, 1998 (value in thousands) (unaudited)
<TABLE>
<CAPTION>
(A) VARIABLE RATE DEMAND SECURITIES
-------------------------------------------------------------------------
ALABAMA RATE VALUE
-------------------------------------------------------------------------
<S> <C> <C>
Livingston,
Industrial Development Board 4.00% $ 6,000
-------------------------------------------------------------------------
CALIFORNIA
-------------------------------------------------------------------------
Los Angeles,
Harbor Improvement Corp. 3.70% 11,500
-------------------------------------------------------------------------
DISTRICT OF COLUMBIA
-------------------------------------------------------------------------
General Obligation 3.55% 8,000
-------------------------------------------------------------------------
FLORIDA
-------------------------------------------------------------------------
Dade County,
Aviation Facilities
Revenue 3.55% 7,000
Capital Assets Acquisition
Bond 3.90% 3,595
-------------------------------------------------------------------------
Hillsborough County,
Industrial Development
Authority 3.80% 4,600
-------------------------------------------------------------------------
GEORGIA
-------------------------------------------------------------------------
Cartersville,
Industrial Development
Revenue 3.90% 3,600
-------------------------------------------------------------------------
Fulton County,
Development Authority 3.65% 7,145
Morehouse College 3.55% 6,695
-------------------------------------------------------------------------
ILLINOIS
-------------------------------------------------------------------------
Chicago,
Industrial Development
Revenue 3.76% 4,000
-------------------------------------------------------------------------
Development Finance
Authority 3.72% 27,865
-------------------------------------------------------------------------
Health Facilities Authority 3.55% 8,285
-------------------------------------------------------------------------
Hillside,
Economic Development
Authority 3.70% 6,000
-------------------------------------------------------------------------
Mundelein,
Industrial Development
Revenue 3.70% 6,500
-------------------------------------------------------------------------
Springfield,
Industrial Development
Revenue 3.65% 6,500
-------------------------------------------------------------------------
Student Assistance
Commission 3.65% 6,500
-------------------------------------------------------------------------
Woodridge,
Industrial Development
Revenue 3.76% 5,100
</TABLE>
--
20
<PAGE> 23
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
INDIANA RATE VALUE
-------------------------------------------------------------------------
<S> <C> <C>
Health Facility
Financing Authority 3.60% $ 5,000
-------------------------------------------------------------------------
Ossian,
Economic Development Revenue 3.70% 4,000
-------------------------------------------------------------------------
KANSAS
-------------------------------------------------------------------------
Kansas City,
Pollution Control Revenue 3.70% 4,350
-------------------------------------------------------------------------
KENTUCKY
-------------------------------------------------------------------------
Development Finance
Authority 3.65% 7,720
-------------------------------------------------------------------------
Lexington-Fayette,
Urban County Government
Industrial Building Revenue 4.05% 4,500
-------------------------------------------------------------------------
Mayfield,
Multi-City Lease Revenue 3.60% 6,000
-------------------------------------------------------------------------
LOUISIANA
-------------------------------------------------------------------------
Caddo Parish,
Industrial Development Board 3.65% 8,500
-------------------------------------------------------------------------
Public Facilities Authority,
Hospital Equipment Financing
Revenue 3.90% 9,000
-------------------------------------------------------------------------
MINNESOTA
-------------------------------------------------------------------------
Minneapolis,
Community Development Agency 3.95% 5,000
-------------------------------------------------------------------------
MISSOURI
-------------------------------------------------------------------------
Kirksville,
Industrial Development
Authority 4.00% 6,900
-------------------------------------------------------------------------
NEVADA
-------------------------------------------------------------------------
Department of Commerce 3.75% 4,650
-------------------------------------------------------------------------
NEW HAMPSHIRE
-------------------------------------------------------------------------
Business Finance Authority 3.65% 8,000
-------------------------------------------------------------------------
NEW MEXICO
-------------------------------------------------------------------------
Belen,
Industrial Development
Revenue 3.65% 5,000
-------------------------------------------------------------------------
Farmington,
Pollution Control Revenue 3.55% 6,300
</TABLE>
--
21
<PAGE> 24
ZURICH TAX-FREE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands) (unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
NEW YORK RATE VALUE
-------------------------------------------------------------------------
<S> <C> <C>
Energy Research and
Development Authority 3.90% $ 4,000
-------------------------------------------------------------------------
NORTH CAROLINA
-------------------------------------------------------------------------
Medical Care Commission,
Retirement Community Revenue 3.55% 5,000
-------------------------------------------------------------------------
PENNSYLVANIA
-------------------------------------------------------------------------
Berks County, Redevelopment
Authority 3.95% 8,000
-------------------------------------------------------------------------
Emmaus,
General Authority Revenue 3.70% 20,200
-------------------------------------------------------------------------
Philadelphia,
Industrial Development
Authority 3.90% 13,470
-------------------------------------------------------------------------
TENNESSEE
-------------------------------------------------------------------------
Maury County,
Industrial Development Board 3.80% 2,500
TEXAS
Bexar County,
Housing Finance Corp. 4.13% 5,500
-------------------------------------------------------------------------
Brazos River Authority 4.00% 4,000
-------------------------------------------------------------------------
Trinity River Authority 3.70% 9,200
-------------------------------------------------------------------------
VIRGINIA
-------------------------------------------------------------------------
Loudoun County,
Industrial Development
Authority 3.70% 6,425
-------------------------------------------------------------------------
WASHINGTON
-------------------------------------------------------------------------
Port Angeles, Industrial
Development Corp. 4.00% 10,400
-------------------------------------------------------------------------
Port of Vancouver 4.00% 8,850
-------------------------------------------------------------------------
WISCONSIN
-------------------------------------------------------------------------
Eau Claire,
Solid Waste Disposal Revenue 3.65% 9,000
-------------------------------------------------------------------------
Lawrence,
Industrial Development
Revenue 3.65% 3,900
-------------------------------------------------------------------------
TOTAL VARIABLE RATE DEMAND SECURITIES -- 40.3%
(AVERAGE MATURITY: 7 DAYS) 324,250
</TABLE>
--
22
<PAGE> 25
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
OTHER SECURITIES
--------------------------------------------------------------------------
ALASKA RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
Valdez,
Marine Terminal Revenue 3.85% 2/13/98 $ 5,000
--------------------------------------------------------------------------
ARIZONA
--------------------------------------------------------------------------
Salt River Project,
Agricultural Improvement and
Power District 3.75% - 3.80% 2/24/98 - 3/25/98 24,000
--------------------------------------------------------------------------
COLORADO
--------------------------------------------------------------------------
Platte River Power Authority 3.80% 2/11/98 - 2/19/98 7,000
--------------------------------------------------------------------------
FLORIDA
--------------------------------------------------------------------------
Jacksonville,
Electric Authority 3.80% 2/12/98 - 3/18/98 19,000
--------------------------------------------------------------------------
Orange County 3.80% 2/19/98 6,700
--------------------------------------------------------------------------
GEORGIA
--------------------------------------------------------------------------
Municipal Electric Authority 3.80% - 3.85% 2/13/98 - 3/10/98 20,650
--------------------------------------------------------------------------
Municipal Gas Authority 3.80% 3/11/98 5,000
--------------------------------------------------------------------------
ILLINOIS
--------------------------------------------------------------------------
Development Finance
Authority 4.15% 2/2/98 4,505
--------------------------------------------------------------------------
Educational Facilities
Authority 3.80% 3/18/98 - 3/19/98 12,210
--------------------------------------------------------------------------
INDIANA
--------------------------------------------------------------------------
Jasper County,
Pollution Control Revenue 3.80% - 3.85% 2/11/98 - 3/24/98 32,450
--------------------------------------------------------------------------
Sullivan,
Pollution Control Revenue 3.80% 2/12/98 - 3/19/98 14,545
</TABLE>
--
23
<PAGE> 26
ZURICH TAX-FREE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands) (unaudited)
<TABLE>
<CAPTION>
KANSAS RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
Burlington,
--------------------------------------------------------------------------
Pollution Control Revenue 3.80% 2/12/98 - 2/23/98 $ 20,265
--------------------------------------------------------------------------
KENTUCKY
--------------------------------------------------------------------------
Danville,
Multi-City Lease Revenue 3.90% 2/6/98 - 3/10/98 15,890
--------------------------------------------------------------------------
Pendleton County,
Multi-County Lease Revenue 3.80% - 3.85% 2/13/98 - 3/10/98 19,040
--------------------------------------------------------------------------
MARYLAND
--------------------------------------------------------------------------
Anne Arundel County,
Port Facilities Revenue 3.80% - 3.90% 2/12/98 - 5/12/98 27,220
--------------------------------------------------------------------------
MISSISSIPPI
--------------------------------------------------------------------------
Claiborne County,
Pollution Control Revenue 3.80% 2/13/98 4,650
--------------------------------------------------------------------------
MISSOURI
--------------------------------------------------------------------------
Health and Educational
Facilities Authority 3.80% 3/12/98 3,600
--------------------------------------------------------------------------
Independence,
Water Utility Revenue 3.75% 2/20/98 10,050
--------------------------------------------------------------------------
NEBRASKA
--------------------------------------------------------------------------
Omaha, Public Power District 3.80% 2/12/98 3,000
--------------------------------------------------------------------------
NEW JERSEY
--------------------------------------------------------------------------
Transportation Authority 3.80% 3/18/98 4,900
--------------------------------------------------------------------------
NEW YORK
--------------------------------------------------------------------------
Nassau County,
Revenue Anticipation Notes 3.85% 4/10/98 8,006
--------------------------------------------------------------------------
New York City,
Municipal Water Finance
Authority 3.80% 3/11/98 - 3/20/98 13,000
</TABLE>
--
24
<PAGE> 27
<TABLE>
<CAPTION>
NORTH CAROLINA RATE MATURITY VALUE
---------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal Power Agency 3.80% 2/19/98 $ 6,000
---------------------------------------------------------------------------
OKLAHOMA
---------------------------------------------------------------------------
Oklahoma County, Industrial
Authority 4.20% 3/2/98 7,800
---------------------------------------------------------------------------
PENNSYLVANIA
---------------------------------------------------------------------------
Allegheny County,
Industrial Development
Authority 3.85% 2/10/98 4,600
---------------------------------------------------------------------------
Philadelphia,
Gas Works Revenue 3.80% 2/20/98 - 2/24/98 9,800
---------------------------------------------------------------------------
TEXAS
---------------------------------------------------------------------------
Austin,
Combined Utility Systems 3.80% 2/23/98 - 3/17/98 10,475
---------------------------------------------------------------------------
Brazoria County, Brazos River
Harbor Navigation District 3.90% 2/11/98 6,100
---------------------------------------------------------------------------
Dallas, Area Rapid Transit 3.80% 3/17/98 - 3/19/98 12,000
---------------------------------------------------------------------------
Harris County, Health
Facilities Development Corp. 3.90% 3/18/98 - 3/19/98 15,000
---------------------------------------------------------------------------
Houston, Water and Sewer
System 3.80% - 3.85% 2/11/98 - 3/12/98 28,930
---------------------------------------------------------------------------
Lower Colorado River
Authority 3.80% - 3.85% 2/24/98 - 3/24/98 10,600
---------------------------------------------------------------------------
Municipal Power Agency 3.80% - 3.85% 2/20/98 - 2/26/98 26,225
---------------------------------------------------------------------------
Port Development Corp. 4.30% 2/10/98 4,000
---------------------------------------------------------------------------
San Antonio,
Electric and Gas Systems 3.80% 2/11/98 - 3/12/98 20,800
</TABLE>
--
25
<PAGE> 28
ZURICH TAX-FREE MONEY FUND PORTFOLIO OF INVESTMENTS, CONTINUED
(value in thousands) (unaudited)
<TABLE>
<CAPTION>
UTAH RATE MATURITY VALUE
--------------------------------------------------------------------------
<S> <C> <C> <C>
Intermountain Power Agency 3.80% 2/12/98 - 2/20/98 $ 9,300
--------------------------------------------------------------------------
VIRGINIA
--------------------------------------------------------------------------
Chesterfield County,
Industrial Development
Authority 3.85% - 3.90% 2/13/98 - 5/12/98 17,350
--------------------------------------------------------------------------
Louisa County, Industrial
Development Authority 3.90% 2/11/98 3,400
--------------------------------------------------------------------------
WYOMING
--------------------------------------------------------------------------
Sweetwater, Pollution
Control Revenue 3.85% 2/10/98 3,000
--------------------------------------------------------------------------
TOTAL OTHER SECURITIES -- 59.2%
(AVERAGE MATURITY: 32 DAYS) 476,061
--------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.5%
(AVERAGE MATURITY: 22 DAYS) 800,311
--------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- .5% 4,236
--------------------------------------------------------------------------
NET ASSETS -- 100% $ 804,547
</TABLE>
--
26
<PAGE> 29
notes to
portfolios of investments
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in Note (a). For each security, cost (for
financial reporting and federal income tax purposes) and carrying value are the
same. Likewise, carrying value approximates principal amount.
(a) Variable rate securities. The rates shown are the current rates at January
31, 1998. The dates shown represent the demand date or the next interest
rate change date. Securities in the Zurich Tax-Free Money Fund shown without
a date are payable within five business days and are backed by credit
support agreements from banks or insurance institutions.
(b) Illiquid securities. At January 31, 1998, the value of illiquid securities
in the Zurich Money Market Fund was $130,000,000, which represented 3.0% of
net assets.
(c) Repurchase agreements are fully collateralized by U.S. Government
securities. All collateral is held at the Funds' custodian bank, Investors
Fiduciary Trust Company, or at subcustodian banks, as indicated. The
collateral is monitored daily by the Funds so that its market value exceeds
the carrying value of the repurchase agreement.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--
27
<PAGE> 30
financial statements
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1998 (in thousands) (unaudited)
<TABLE>
<CAPTION>
ASSETS MONEY MARKET GOVERNMENT TAX-FREE
--------------------------------------------------------------------
<S> <C> <C> <C>
Investments, at amortized
cost:
Short-term securities $3,486,407 338,024 800,311
--------------------------------------------------------------------
Repurchase agreements 885,000 338,000 --
--------------------------------------------------------------------
Cash 7,817 -- --
--------------------------------------------------------------------
Interest receivable 17,899 5,393 5,381
--------------------------------------------------------------------
TOTAL ASSETS 4,397,123 681,417 805,692
LIABILITIES AND NET ASSETS
Cash overdraft -- 120 8
--------------------------------------------------------------------
Payable for:
Dividends 5,723 872 674
--------------------------------------------------------------------
Management fee 1,027 156 159
--------------------------------------------------------------------
Custodian and transfer agent
fees and related expenses 875 143 156
--------------------------------------------------------------------
Trustees' fees and other 489 125 148
--------------------------------------------------------------------
TOTAL LIABILITIES 8,114 1,416 1,145
--------------------------------------------------------------------
NET ASSETS APPLICABLE TO
SHARES OUTSTANDING $4,389,009 680,001 804,547
THE PRICING OF SHARES
Shares outstanding 4,389,009 680,001 804,547
--------------------------------------------------------------------
Net asset value and redemption
price per share $1.00 1.00 1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--
28
<PAGE> 31
STATEMENT OF OPERATIONS
Six months ended January 31, 1998 (in thousands) (unaudited)
<TABLE>
<CAPTION>
NET INVESTMENT INCOME MONEY MARKET GOVERNMENT TAX-FREE
--------------------------------------------------------------------
<S> <C> <C> <C>
Interest income $131,109 19,392 15,259
--------------------------------------------------------------------
Expenses:
Management fee 6,060 911 1,066
--------------------------------------------------------------------
Custodian and transfer agent
fees and related expenses 4,290 478 318
--------------------------------------------------------------------
Reports to shareholders 201 35 35
--------------------------------------------------------------------
Registration costs 46 37 29
--------------------------------------------------------------------
Professional fees 54 8 12
--------------------------------------------------------------------
Trustees' fees and other 174 10 10
--------------------------------------------------------------------
Total expenses 10,825 1,479 1,470
--------------------------------------------------------------------
Net investment income $120,284 17,913 13,789
</TABLE>
--
29
<PAGE> 32
ZURICH MONEY FUNDS FINANCIAL STATEMENTS, CONTINUED
Six months ended January 31, 1998 (unaudited) and year ended July 31, 1997 (in
thousands)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
<S> <C>
----------------------------------------------------------------
Net investment income
----------------------------------------------------------------
Dividends to shareholders from net investment income
----------------------------------------------------------------
Capital share transactions
(dollar amounts and number of shares are the same):
Shares sold
----------------------------------------------------------------
Shares issued in reinvestment of dividends
================================================================
Shares redeemed
----------------------------------------------------------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS AND
TOTAL INCREASE (DECREASE) IN NET ASSETS
NET ASSETS
Beginning of period
----------------------------------------------------------------
END OF PERIOD
</TABLE>
--
30
<PAGE> 33
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
MONEY MARKET GOVERNMENT TAX-FREE
- --------------------------------------------------------------------------
1998 1997 1998 1997 1998 1997
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 120,284 223,327 17,913 36,194 13,789 25,635
- --------------------------------------------------------------------------
(120,284) (223,327) (17,913) (36,194) (13,789) (25,635)
- --------------------------------------------------------------------------
3,613,243 6,067,490 323,557 704,736 394,603 861,149
- --------------------------------------------------------------------------
114,961 215,732 17,109 34,766 13,250 25,063
- --------------------------------------------------------------------------
3,728,204 6,283,222 340,666 739,502 407,853 886,212
- --------------------------------------------------------------------------
(3,701,130) (6,147,062) (331,804) (740,404) (374,621) (843,915)
- --------------------------------------------------------------------------
27,074 136,160 8,862 (902) 33,232 42,297
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
4,361,935 4,225,775 671,139 672,041 771,315 729,018
- --------------------------------------------------------------------------
$ 4,389,009 4,361,935 680,001 671,139 804,547 771,315
</TABLE>
--
31
<PAGE> 34
notes to
financial statements
1. DESCRIPTION OF THE FUNDS
Zurich Money Funds (the Trust) is an open-end management investment company
organized as a business trust under the laws of Massachusetts currently offering
three investment funds ("Funds"). Zurich Money Market Fund invests primarily in
short-term high quality obligations of major banks and corporations. Zurich
Government Money Fund invests exclusively in obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities and repurchase agreements
thereon. Zurich Tax-Free Money Fund invests in short-term high quality municipal
securities.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION. Investments are stated at amortized cost, which
approximates market value. In the event that a deviation of 1/2 of 1% or more
exists between a Fund's $1.00 per share net asset value, calculated at amortized
cost, and the net asset value calculated by reference to market-based values, or
if there is any other deviation that the Board of Trustees believes would result
in a material dilution to shareholders or purchasers, the Board of Trustees will
promptly consider what action should be initiated.
INVESTMENT TRANSACTIONS AND INTEREST INCOME. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed).
Interest income is recorded on the accrual basis and includes amortization of
premium and discount on investments.
EXPENSES. Expenses arising in connection with a Fund are allocated to that Fund.
Other Trust expenses are allocated among the Funds in proportion to their
relative net assets.
FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS. Fund shares are sold and
redeemed on a continuous basis at net asset value. On each day that the New York
Stock Exchange is open for trading, each Fund determines its net asset value per
share (NAV) by dividing the total value of the Fund's investments and other
assets, less liabilities, by the number of Fund shares outstanding. The NAV is
determined at 11:00 a.m., 1:00 p.m. and 3:00 p.m. Chicago time for Zurich Money
Market Fund and Zurich Government Money
Fund and at 11:00 a.m. and 3:00 p.m. Chicago time for Zurich Tax-Free Money
Fund. Each Fund declares a daily dividend, equal to its net investment income
for that day, payable monthly. Net investment income consists of all
--
32
<PAGE> 35
interest income plus (minus) all realized gains (losses) on portfolio
securities, minus all expenses of the Fund.
FEDERAL INCOME TAXES. Each Fund has complied with the special provisions of the
Internal Revenue Code available to investment companies during the six months
ended January 31, 1998.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGER COMBINATION. Effective December 31, 1997, Zurich Insurance
Company, the parent of Zurich Kemper Investments, Inc. (ZKI), acquired a
majority interest in Scudder, Stevens & Clark, Inc. (Scudder), another major
investment manager. As a result of this transaction, the operations of ZKI were
combined with Scudder to form a new global investment organization named Scudder
Kemper Investments, Inc. (Scudder Kemper). The transaction resulted in the
termination of the Funds' investment management agreement with ZKI, however, a
new investment management agreement between the Funds and Scudder Kemper was
approved by the Funds' Board of Trustees and by the Funds' shareholders. The new
management agreement, which was effective December 31, 1997, is the same in all
material respects as the previous management agreement, except that Scudder
Kemper is the new investment adviser to the Funds. In addition, the names of the
Funds' principal underwriter and shareholder service agent were changed to
Kemper Distributors, Inc. (KDI) and Kemper Service Company (KSvC), respectively.
MANAGEMENT AGREEMENT. The Funds have a management agreement with Scudder Kemper
and pay a management fee at an annual rate of .50% of the first $215 million of
average daily net assets declining to .25% of average daily net assets in excess
of $800 million. During the six months ended January 31, 1998, the Funds
incurred management fees of $8,037,000.
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a services agreement with the Funds'
transfer agent, KSvC is the shareholder service agent of the Trust. Under the
agreement, KSvC received shareholder services fees of $3,122,000 for the six
months ended January 31, 1998.
OFFICERS AND TRUSTEES. Certain officers or trustees of the Trust are also
officers or directors of Scudder Kemper. During the six months ended January 31,
1998, the Trust made no payments to its officers and incurred trustees' fees of
$38,000 to independent trustees.
--
33
<PAGE> 36
FINANCIAL HIGHLIGHTS
ZURICH MONEY MARKET FUND
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1998 ------------------------------------
(UNAUDITED) 1997 1996 1995 1994
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 1.00 1.00 1.00 1.00
--------------------------------------------------------------------------------------
Net investment income
and dividends declared .03 .05 .05 .05 .03
--------------------------------------------------------------------------------------
Net asset value, end
of period $1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------
TOTAL RETURN
(NOT ANNUALIZED) 2.70% 5.27 5.34 5.34 3.20
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses .48% .45 .50 .52 .52
--------------------------------------------------------------------------------------
Net investment income 5.31% 5.14 5.20 5.19 3.14
SUPPLEMENTAL DATA
Net assets at end of
period (in thousands) $4,389,009 4,361,935 4,225,775 4,025,098 4,148,789
</TABLE>
Note: Zurich Money Market Fund's total return for the year ended July 31, 1995
includes the effect of a capital contribution from the investment manager.
Without the capital contribution, the total return would have been 4.62%.
--
34
<PAGE> 37
ZURICH GOVERNMENT MONEY FUND
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1998 ------------------------------
(UNAUDITED) 1997 1996 1995 1994
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------
Net investment income
and dividends
declared .03 .05 .05 .05 .03
------------------------------------------------------------------------------
Net asset value, end
of period $1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------
TOTAL RETURN
(NOT ANNUALIZED) 2.67% 5.26 5.34 5.36 3.20
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses .43% .44 .46 .46 .47
------------------------------------------------------------------------------
Net investment income 5.26% 5.13 5.20 5.21 3.15
SUPPLEMENTAL DATA
Net assets at end of
period (in thousands) $680,001 671,139 672,041 603,601 707,368
</TABLE>
--
35
<PAGE> 38
financial highlights, continued
ZURICH TAX-FREE MONEY FUND
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1998 ------------------------------
(UNAUDITED) 1997 1996 1995 1994
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------
Net investment income
and dividends
declared .02 .03 .03 .03 .02
------------------------------------------------------------------------------
Net asset value, end
of period $1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------
TOTAL RETURN
(NOT ANNUALIZED) 1.75% 3.39 3.44 3.53 2.33
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses .37% .37 .39 .40 .41
------------------------------------------------------------------------------
Net investment income 3.46% 3.33 3.38 3.46 2.30
SUPPLEMENTAL DATA
Net assets at end of
period (in thousands) $804,547 771,315 729,018 760,143 792,131
</TABLE>
--
36
<PAGE> 39
<PAGE> 40
trustees and officers
Trustees Officers
- --------------------------------------------------------------------------------
DANIEL PIERCE MARK S. CASADY LINDA J. WONDRACK
Chairman and Trustee President Vice President
DAVID W. BELIN PHILIP J. COLLORA JOHN R. HEBBLE
Trustee Vice President Assistant Treasurer
LEWIS A. BURNHAM Secretary and Treasurer MAUREEN E. KANE
Trustee JERARD K. HARTMAN Assistant Secretary
DONALD L. DUNAWAY Vice President CAROLINE PEARSON
Trustee THOMAS W. LITTANER Assistant Secretary
ROBERT B. HOFFMAN Vice President ELIZABETH C. WERTH
Trustee ANN M. MCCREARY Assistant Secretary
DONALD R. JONES Vice President
Trustee ROBERT C. PECK, JR.
SHIRLEY D. PETERSON Vice President
Trustee KATHYRN L. QUIRK
WILLIAM P. SOMMERS Vice President
Trustee FRANK J. RACHWALSKI, JR.
EDMOND D. VILLANI Vice President
Trustee
- --------------------------------------------------------------------------------
LEGAL COUNSEL VEDDER, PRICE, KAUFMAN & KAMMHOTZ
222 North LaSalle Street
Chicago, IL 60601
SHAREHOLDER SERVICE KEMPER SERVICE COMPANY
AGENT P.O. Box 419066
Kansas City, MO 64141-6066
CUSTODIAN AND INVESTORS FIDUCIARY TRUST COMPANY
TRANSFER AGENT 801 Pennsylvania
Kansas City, MO 64105
This report must be preceded or
accompanied by a Zurich Money Funds prospectus.
[RECYCLED LOGO]
Printed in the U.S.A. on recycled paper.
ZMF-3 (3/98) 1045040 [ZURICH LOGO]
