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ZURICH
Zurich Money Funds
report
Zurich Money Market Fund
Zurich Government
Money Fund
Zurich Tax-Free Money Fund
Annual Report to Shareholders
for the Period Ended July 31, 2000
<PAGE>
table of contents
1 Fund objectives
2 Performance summary
5 Variables affecting performance
6 Performance review
9 Terms to know
10 Portfolio composition
11 Portfolio of investments
27 Financial statements
32 Financial highlights
35 Notes to financial statements
38 Report of independent auditors
39 Tax information
<PAGE>
fund objectives
Zurich Money Funds (the "Trust") 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.
Like all money market funds, an investment in these funds is not insured or
guaranteed by the FDIC or any other government agency. Although money funds seek
to preserve your investment at $1.00 per share, it is possible to lose money.
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>
performance summary
Zurich Money Market Fund
Yield Comparison
Zurich Money Market Fund is compared to the First Tier Money Fund Average which
consists of all non-institutional taxable money market funds investing in only
first tier (highest rating) securities tracked by iMoneyNet, Inc. Returns are
historical and do not guarantee future results. Fund yields fluctuate.
7-day average 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 Fund Average
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
Weekly 7-Day Average Yield
Fund Yield First Tier Money Fund Average
8/3/1999 4.73 4.41
4.76 4.41
4.88 4.45
4.93 4.48
4.92 4.55
4.99 4.58
4.98 4.60
4.99 4.63
5.08 4.65
5.11 4.67
5.15 4.70
5.18 4.73
5.22 4.76
5.26 4.80
5.39 4.80
5.43 4.86
5.47 4.91
5.49 4.97
5.50 5.00
5.62 5.06
5.63 5.12
5.67 5.15
5.67 5.05
5.64 5.15
5.62 5.13
5.60 5.10
5.55 5.11
5.56 5.12
5.56 5.16
5.59 5.16
5.57 5.19
5.56 5.18
5.57 5.20
5.65 5.23
5.65 5.29
5.68 5.35
5.75 5.35
5.78 5.37
5.80 5.39
5.72 5.39
5.81 5.42
5.90 5.48
6.04 5.61
6.17 5.69
6.15 5.73
6.30 5.78
6.30 5.81
6.34 5.85
6.26 5.91
6.33 5.87
6.29 5.89
7/25/00 6.32 5.90
Lipper Ranking
Lipper, Inc. rankings are based upon changes in net asset value with all
dividends reinvested for the periods indicated as of 7/31/00. Rankings are
historical and do not guarantee future performance. The fund is compared to the
Lipper Money Market Instrument Fund category.
Lipper Ranking
--------------------------------------------------------------------------------
Top Fund #1 of 47 funds 20 years
--------------------------------------------------------------------------------
Top 11% #15 of 139 funds 10 years
--------------------------------------------------------------------------------
Top 9% #22 of 245 funds 5 years
--------------------------------------------------------------------------------
Top 3% #12 of 362 funds 1 year
--------------------------------------------------------------------------------
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 guarantee future performance.
10-Year Performance
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
Performance of a $10,000 Hypothetical Investment
7/31/1990 10000
10330
10951
11335
11661
12125
12812
13480
14201
14949
15689
7/31/2000 16235
2
<PAGE>
Zurich Government Money Fund
Yield Comparison
Zurich Government Money Fund is compared to the Government Money Fund Average
which consists of all non-institutional government money market funds tracked by
iMoneyNet, Inc. Returns are historical and do not guarantee future results. Fund
yields fluctuate.
7-day average yield is the annualized net investment income per share for the
period shown. Gains or losses are not included.
Fund Yield vs. Government Money Fund Average
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
Weekly 7-Day Average Yield
Fund Yield Government Money Fund Average
8/3/1999 4.58 4.30
4.60 4.28
4.63 4.32
4.66 4.32
4.74 4.45
4.76 4.48
4.82 4.49
4.81 4.47
4.88 4.48
4.87 4.52
4.80 4.50
4.91 4.52
4.95 4.51
4.91 4.57
4.99 4.57
4.93 4.63
5.04 4.71
5.11 4.80
5.16 4.77
5.16 4.79
5.26 4.80
5.33 4.81
5.30 4.49
5.29 4.83
5.30 4.85
5.31 4.84
5.22 4.90
5.40 4.95
5.47 5.01
5.51 5.03
5.59 5.07
5.59 5.07
5.59 5.10
5.61 5.13
5.74 5.20
5.81 5.30
5.81 5.29
5.74 5.29
5.74 5.25
5.73 5.24
5.77 5.26
5.84 5.34
6.02 5.47
6.04 5.53
6.13 5.59
6.20 5.63
6.26 5.65
6.16 5.67
6.21 5.73
6.24 5.68
6.25 5.70
7/25/2000 6.24 5.73
Lipper Ranking
Lipper, Inc. rankings are based upon changes in net asset value with all
dividends reinvested for the periods indicated as of 7/31/00. Rankings are
historical and do not guarantee future performance. The fund is compared to the
Lipper Government Money Market Fund category.
Lipper Ranking
--------------------------------------------------------------------------------
Top 6% #2 of 33 funds 15 years
--------------------------------------------------------------------------------
Top 8% #4 of 50 funds 10 years
--------------------------------------------------------------------------------
Top 7% #7 of 97 funds 5 years
--------------------------------------------------------------------------------
Top 6% #8 of 129 funds 1 year
--------------------------------------------------------------------------------
10-Year Performance
This chart shows the value of a hypothetical $10,000 investment in Zurich
Government Money Market Fund over the past 10 fiscal years with all dividends
reinvested. The returns shown are historical and do not guarantee future
performance.
10-Year Performance
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
Performance of a $10,000 Hypothetical Investment
7/31/1990 10000
10323
10927
11316
11646
12107
12797
13463
14179
14912
15627
7/31/2000 16162
3
<PAGE>
Zurich Tax-Free Money Fund
Yield Comparison
Zurich Tax-Free Money Fund is compared to the Tax-Free Money Fund Average which
consists of all non-institutional tax-free money market funds tracked by
iMoneyNet, Inc. 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 average 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 Fund Average
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
Weekly 7-Day Average Yield
Fund Yield Tax-Free Money Fund Average
8/3/1999 2.81 2.50
2.80 2.40
2.86 2.53
2.95 2.54
3.04 2.58
3.03 2.53
3.00 2.55
3.11 2.72
3.24 2.95
3.23 2.94
3.03 2.66
3.12 2.69
3.17 2.72
3.22 2.79
3.20 2.74
3.34 2.90
3.45 3.02
3.47 3.08
3.45 2.90
3.30 2.74
3.44 3.01
3.78 3.47
4.07 3.88
3.35 2.79
3.13 2.54
3.16 2.62
3.17 2.69
3.11 2.56
3.27 2.78
3.41 2.94
3.46 3.03
3.43 3.01
3.42 3.01
3.43 3.01
3.45 3.02
3.50 3.10
3.31 2.79
3.57 3.10
3.93 3.51
4.21 3.93
4.53 4.31
4.77 4.40
4.19 3.66
4.03 3.51
3.94 3.37
3.78 3.27
4.02 3.55
4.25 3.77
4.26 3.80
3.62 3.05
3.66 3.16
7/25/2000 3.96 3.46
Lipper Ranking
Lipper, Inc. rankings are based upon changes in net asset value with all
dividends reinvested for the periods indicated as of 7/31/00. Rankings are
historical and do not guarantee future performance. The fund is compared to the
Lipper Tax-Exempt Money Market Fund category.
Lipper Ranking
--------------------------------------------------------------------------------
Top 9% #7 of 74 funds 10 years
--------------------------------------------------------------------------------
Top 6% #7 of 115 funds 5 years
--------------------------------------------------------------------------------
Top 6% #8 of 134 funds 1 year
--------------------------------------------------------------------------------
10-Year Performance
This chart shows the value of a hypothetical $10,000 investment in Zurich
Tax-Exempt Money Fund over the past 10 fiscal years with all dividends
reinvested. The returns shown are historical and do not guarantee future
performance.
10-Year Performance
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
Performance of a $10,000 Hypothetical Investment
7/31/1990 10000
10240
10695
10999
11247
11551
11981
12380
12806
13229
13624
7/31/2000 13922
4
<PAGE>
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 selected by
our portfolio managers have a major impact on reaching this goal. Additionally,
our portfolio managers must continuously analyze other variables, which affect
share price stability and fund performance. Three of the most important
variables factored into the decision-making process are:
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 buy. 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>
performance review
An interview with portfolio manager Frank Rachwalski
Frank Rachwalski is a managing director of Scudder Kemper Investments, Inc. and
lead portfolio manager of Zurich Money Funds. Mr. Rachwalski holds a B.B.A. and
a M.B.A. degree from Loyola University. The following is Mr. Rachwalski's review
of the economic conditions and fund results during the report period and what
may happen in the months ahead.
--------------------------------------------------------------------------------
The U.S. Stock and Bond markets winced with each increase in short-term interest
rates over the 12-month period ended 7/31/00. With the U.S. economy strong,
unemployment at an all time low, and consumer confidence high, concerns over an
acceleration of inflation took center stage. Over the year, the Federal Reserve
(the "Fed") raised short-term rates 125 basis points. The increases directly
benefited money market securities and the fund's yield, which rose significantly
over the period.
Despite rising rates over the 12 months, the resiliency of the U.S. economy
continued to be impressive. In the first half of this year gross domestic
product grew at roughly 5.0%. Reflecting signs that inflationary pressures have
been building, over the 12 months ended 7/31/00, the consumer price index rose
3.5%.
While we think the Fed is closer to achieving its objectives of slowing the
economy and controlling inflation, we believe another rate hike is possible.
With recent consumer confidence numbers suggesting that consumers are not afraid
and are continuing their buying sprees, we think the Fed will be biased toward a
policy of monetary restraint for the near term. However, the Fed should take a
cautious approach to raising rates prior to the November elections.
--------------------------------------------------------------------------------
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
considerations.
6
<PAGE>
Portfolio Strategy
We pursued two strategies, reflecting the two distinct environments over the
past 12 months -- the period leading up to the end of 1999 and the year-to-date
period. Toward the end of 1999, we focused on maintaining high levels of
liquidity in the portfolio while taking advantage of what the market was
offering. Generally, this meant maintaining a shorter average maturity than our
peers did. This strategy was driven by our cautious approach to the Y2K
changeover. We maintained a higher than normal level of liquidity in the
portfolio in order to be prepared for potentially high investor demand for cash.
However, by maintaining a shorter maturity in the rising rate environment, our
existing holdings matured more quickly, which enabled us to invest in higher
yielding securities sooner than if we had maintained a longer average maturity.
A limitation of this strategy is that we gave up a small amount of current yield
by maintaining a shorter maturity. The reason was the yield curve had a sizeable
income reward for extension.
As it turned out, the Fed pumped a great deal of money into the financial system
by allowing monetary reserves to grow rapidly in the fourth quarter of 1999.
Some speculated that this super-liquid market helped to fuel the strong market
rally.
As time progressed and Y2K concerns essentially evaporated, we viewed this as an
opportunity to pick up some higher yielding paper by extending the portfolio's
average maturity slightly. However, the portfolio's maturity still remained
shorter than its peers, given our expectations that rates would continue to
rise.
In the portfolio, we invest in "first-tier" short-term securities --
specifically, issues with top ratings according to major credit rating agencies,
such as Fitch Investors Service, Moody's Investors Service, or Standard and
Poor's. The top ratings have the lowest risk and, while not insured by FDIC or
guaranteed, these securities rank among the safest available outside of U.S.
Treasury bills. Basically, our philosophy is that it does not pay to take on
additional credit risk given the relatively small yield advantage.
Our investment strategy focuses on maintaining the average life of the portfolio
within a target range and selecting floating-rate securities that, given current
interest rate trends, should benefit the portfolio. As a result, we generally do
not make big asset allocation shifts within the portfolio. We attempt to
maintain exposure to a broad selection of securities, including high quality
commercial paper, variable- and floating-rate securities, U.S. government agency
obligations, certificates of deposit, and repurchase agreements. The majority of
the portfolio remained invested in high
7
<PAGE>
quality commercial paper, which we maintained because of its attractive yield
and high quality.
Outlook
As we mentioned earlier, we think the Fed may raise rates at least one more time
this year. However, we think the Fed may eventually be able to ease off its
current policy of incremental monetary restraint because of recent signs that
the economy may be slowing in reaction to the higher rate environment. Knowing
when to stop raising rates is a tough job for the Fed since the rate increases
take time to work their way through the economy. Typically, it takes six months
for the effects to begin showing up, so the braking effects on growth of this
year's rate hikes are still yet to come. In any event, this is a great
environment for money market fund investors because interest rates have risen
and real yields (after subtracting inflation) are still providing investors with
very attractive returns.
8
<PAGE>
terms to know
7-Day Average Yield Every money market fund calculates its
yield daily according to a standardized method
prescribed by the Securities and Exchange Commission.
Each day's standardized yield is an average taken over
a 7-day period. This average helps to minimize the
effect of daily fluctuation in fund income, and
therefore yield.
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.
Federal Funds Commercial banks are required to keep these funds on
("Fed Funds") deposit at the Federal Reserve Bank in their district. In
order to meet these reserve requirements, occasionally
commercial banks need to borrow funds. These funds are
borrowed from banks that have an excess of the required
amount on hand in what is called the "Fed Funds
Market." The interest rate on these loans is called the
"Fed Funds Rate" and is the key money market rate which
influences all other short-term rates.
U.S. Treasuries These debt securities are issued by the U.S. Treasury and
include Treasury bills, Treasury notes and Treasury bonds.
They are considered to be the safest of all securities.
Their safety rests in the power of the U.S. government to
obtain tax revenues in order to repay its obligations, and
in its historical record of always having done so.
9
<PAGE>
portfolio composition
Zurich Money Market Fund
On 7/31/2000*
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Commercial paper 75%
Certificates of deposit 21%
Short-term and medium-term notes 4%
------------------------------------------------------
Total 100%
------------------------------------------------------
Weighted Average Maturity**
------------------------------------------------------
Zurich Money Market Fund 30 days
First Tier Money Fund Average 47 days
Zurich Government Money Fund
On 7/31/2000*
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Short-term and medium-term notes 54%
Repurchase agreements 46%
------------------------------------------------------
Total 100%
------------------------------------------------------
Weighted Average Maturity**
------------------------------------------------------
Zurich Government Money Fund 36 days
Government Money Fund Average 41 days
Zurich Tax-Free Money Fund
On 7/31/2000*
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Variable rate demand securities 62%
Tax-exempt commercial paper 38%
------------------------------------------------------
Total 100%
------------------------------------------------------
Weighted Average Maturity**
------------------------------------------------------
Zurich Tax-Free Money Fund 19 days
Tax-Free Money Fund Average 39 days
* Portfolio composition and holdings are subject to change.
** The Funds are compared to their respective iMoneyNet, Inc. 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 iMoneyNet, Inc.; Government Money Fund Average includes all
non-institutional government money market funds tracked by iMoneyNet, Inc.;
Tax-Free Money Fund Average consists of all non-institutional tax-free
money market funds tracked by iMoneyNet, Inc. Weighted average maturity
data is as of 7/25/00.
10
<PAGE>
portfolio of investments
July 31, 2000
Principal
Amount ($) Value ($)
--------------------------------------------------------------------------------
Zurich Money Market Fund
--------------------------------------------------------------------------------
Repurchase Agreements 0.1%
--------------------------------------------------------------------------------
State Street Bank and Trust Co., 6.53%, to be
repurchased at $7,252,315 on 8/1/2000** (Cost
$7,251,000) 7,251,000 7,251,000
--------------------------------------------------------------------------------
Commercial Paper 74.7%
--------------------------------------------------------------------------------
Allfirst Bank, 6.6%*, 8/16/2000 35,000,000 34,995,287
--------------------------------------------------------------------------------
Alpine Securitization, 6.61%, 8/24/2000 25,000,000 24,895,382
--------------------------------------------------------------------------------
Amsterdam Funding Corp., 6.57%, 8/2/2000 10,000,000 9,998,183
--------------------------------------------------------------------------------
Amsterdam Funding Corp., 6.59%, 8/11/2000 10,000,000 9,981,806
--------------------------------------------------------------------------------
Asset Portfolio Funding Corp., 6.57%, 8/15/2000 35,000,000 34,911,119
--------------------------------------------------------------------------------
Asset Portfolio Funding Corp., 6.59%, 8/25/2000 15,000,000 14,934,500
--------------------------------------------------------------------------------
Asset Portfolio Funding Corp., 6.66%, 10/23/2000 10,000,000 9,848,986
--------------------------------------------------------------------------------
Associates Corp., 6.53%*, 8/17/2000 25,000,000 24,987,608
--------------------------------------------------------------------------------
Associates Corp., 6.77%*, 9/15/2000 25,000,000 25,000,000
--------------------------------------------------------------------------------
Associates Corp., 6.77%*, 9/26/2000 50,000,000 50,000,000
--------------------------------------------------------------------------------
Associates First Capital, 6.67%, 8/1/2000 50,000,000 50,000,000
--------------------------------------------------------------------------------
Atlantis One Funding Corp., 6.67%, 8/1/2000 50,000,000 50,000,000
--------------------------------------------------------------------------------
Atlantis One Funding Corp., 6.67%, 8/17/2000 50,000,000 49,853,778
--------------------------------------------------------------------------------
Baltimore Gas & Electric Co., 6.73%*, 8/14/2000 20,000,000 20,000,000
--------------------------------------------------------------------------------
Barton Capital Corp., 6.57%, 8/14/2000 45,000,000 44,893,888
--------------------------------------------------------------------------------
Bavaria Finance Funding Corp., 6.6%, 8/04/2000 45,000,000 44,975,358
--------------------------------------------------------------------------------
Bavaria Finance Funding Corp., 6.59%, 8/10/2000 35,000,000 34,942,688
--------------------------------------------------------------------------------
Bavaria Universal Funding Corp., 6.59%, 8/01/2000 15,000,000 15,000,000
--------------------------------------------------------------------------------
Bavaria Universal Funding Corp., 6.58%, 8/16/2000 10,000,000 9,972,750
--------------------------------------------------------------------------------
Bavaria Universal Funding Corp., 6.58%, 8/17/2000 75,000,000 74,782,000
--------------------------------------------------------------------------------
Beta Finance, Inc., 6.65%, 10/16/2000 85,000,000 83,824,639
--------------------------------------------------------------------------------
Brazos River Authority, 6.66%, 8/16/2000 40,000,000 40,000,000
--------------------------------------------------------------------------------
CIT Group Holdings, Inc., 6.61%*, 8/1/2000 40,000,000 39,981,988
--------------------------------------------------------------------------------
CIT Group Holdings, Inc., 6.64%*, 8/1/2000 45,000,000 44,983,059
--------------------------------------------------------------------------------
CIT Group Holdings, Inc., 6.65%*, 8/1/2000 20,000,000 19,992,095
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Principal
Amount ($) Value ($)
--------------------------------------------------------------------------------
CIT Group Holdings, Inc., 6.89%*, 9/21/2000 15,000,000 15,014,977
--------------------------------------------------------------------------------
CIT Group Holdings, Inc., 6.68%*, 10/16/2000 35,000,000 34,967,735
--------------------------------------------------------------------------------
CXC Inc., 6.65%, 10/10/2000 50,000,000 49,363,194
--------------------------------------------------------------------------------
Capital One Funding, 6.70%*, 8/3/2000 16,962,000 16,962,000
--------------------------------------------------------------------------------
Caterpillar Financial Services Corp., 6.72%*,
8/14/2000 25,000,000 24,999,817
--------------------------------------------------------------------------------
Caterpillar Financial Services Corp., 6.86%*,
9/1/2000 55,000,000 55,000,000
--------------------------------------------------------------------------------
Caterpillar Financial Services Corp., 6.88%*,
9/15/2000 10,000,000 10,005,025
--------------------------------------------------------------------------------
Chrysler Financial Company, LLC, 6.74%*, 8/16/2000 10,000,000 10,000,000
--------------------------------------------------------------------------------
Citigroup, 6.58%, 8/24/2000 50,000,000 49,791,403
--------------------------------------------------------------------------------
Coca-Cola Enterprises, 6%, 3/15/2001 45,000,000 44,700,844
--------------------------------------------------------------------------------
Den Danske Corp., 6.64%, 8/9/2000 100,000,000 99,854,111
--------------------------------------------------------------------------------
Enterprise Funding Corp., 6.67%, 8/21/2000 25,000,000 24,908,611
--------------------------------------------------------------------------------
FCC National Bank, 6.77%*, 8/1/2000 30,000,000 30,015,861
--------------------------------------------------------------------------------
FCAR Owner Trust, 6.63%, 8/7/2000 50,000,000 49,945,333
--------------------------------------------------------------------------------
Falcon Asset Securities Corp., 6.66%, 8/4/2000 30,000,000 29,983,500
--------------------------------------------------------------------------------
Ford Motor Credit Corp., 6.73%*, 8/18/2000 30,000,000 29,998,871
--------------------------------------------------------------------------------
Ford Motor Credit Corp., 6.77%*, 9/30/2000 15,000,000 14,997,518
--------------------------------------------------------------------------------
Forrestal Funding Corp., 6.69%, 8/8/2000 45,000,000 44,942,163
--------------------------------------------------------------------------------
Forrestal Funding Corp., 6.6%, 9/5/2000 50,000,000 49,682,083
--------------------------------------------------------------------------------
Fountain Square Commercial Funding, 6.59%, 8/1/2000 20,000,000 20,000,000
--------------------------------------------------------------------------------
Fountain Square Commercial Funding, 6.57%, 8/17/2000 25,000,000 24,927,444
--------------------------------------------------------------------------------
Fountain Square Commercial Funding, 6.61%, 9/15/2000 15,000,000 14,877,188
--------------------------------------------------------------------------------
Fountain Square Commercial Funding, 6.66%,
10/27/2000 10,000,000 9,841,708
--------------------------------------------------------------------------------
Fountain Square Commercial Funding, 6.67%,
10/31/2000 20,000,000 19,668,356
--------------------------------------------------------------------------------
Four Winds Funding Corp., 6.61%, 8/31/2000 25,000,000 24,863,125
--------------------------------------------------------------------------------
Four Winds Funding Corp., 6.66%, 10/26/2000 75,000,000 73,826,458
--------------------------------------------------------------------------------
Galaxy Funding Corp., 6.69%, 8/21/2000 50,000,000 49,816,389
--------------------------------------------------------------------------------
Galaxy Funding Corp., 6.59%, 8/22/2000 50,000,000 49,809,250
--------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.73%*, 10/27/2000 35,000,000 34,999,836
--------------------------------------------------------------------------------
Giro Funding Corp., 6.57%, 8/15/2000 15,000,000 14,961,908
--------------------------------------------------------------------------------
Giro Funding Corp., 6.57%, 8/23/2000 55,161,000 54,940,877
--------------------------------------------------------------------------------
Goldman Sachs Group, 6.73%, 10/27/2000 25,000,000 25,000,000
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Principal
Amount ($) Value ($)
-----------------------------------------------------------------------------
Goldman Sachs Group., 6.75%*, 11/6/2000 30,000,000 30,014,865
----------------------------------------------------------------------------
Household Financial Corp., 6.83%*, 10/20/2000 15,000,000 15,011,156
----------------------------------------------------------------------------
Household Financial Corp., 6.72%*, 10/20/2000 85,000,000 84,935,079
----------------------------------------------------------------------------
International Securitization, 6.58%, 8/9/2000 15,000,000 14,978,200
----------------------------------------------------------------------------
International Securitization, 6.58%, 8/14/2000 15,000,000 14,964,575
----------------------------------------------------------------------------
International Securitization, 6.58%, 8/18/2000 45,000,000 44,861,025
----------------------------------------------------------------------------
International Securitization, 6.58%, 8/24/2000 10,000,000 9,958,281
----------------------------------------------------------------------------
International Securitization, 6.59%, 8/25/2000 15,000,000 14,934,600
----------------------------------------------------------------------------
Intrepid Funding, 6.68%, 8/21/2000 20,000,000 19,926,667
----------------------------------------------------------------------------
Kitty Hawk Funding Corp., 6.57%, 8/15/2000 50,000,000 49,873,028
----------------------------------------------------------------------------
Kitty Hawk Funding Corp., 6.59%, 9/1/2000 15,000,000 14,915,396
----------------------------------------------------------------------------
Merita North America, Inc., 6.63%, 8/7/2000 50,000,000 49,945,333
----------------------------------------------------------------------------
Merrill Lynch & Co., 6.61%*, 8/22/2000 70,000,000 69,995,081
----------------------------------------------------------------------------
Merrill Lynch & Co., 6.6%*, 8/30/2000 30,000,000 29,997,745
----------------------------------------------------------------------------
Moat Funding, LLC, 6.65%, 8/3/2000 50,000,000 49,981,694
----------------------------------------------------------------------------
Monte Rosa Capital Corp., 6.63%, 9/18/2000 25,000,000 24,781,667
----------------------------------------------------------------------------
National Rural Utilities Corp., 6.65%*, 8/2/2000 25,000,000 24,999,993
----------------------------------------------------------------------------
National Rural Utilities Corp., 6.71%*, 10/20/2000 60,000,000 60,000,000
----------------------------------------------------------------------------
New Hampshire Industrial Development Authority,
6.64%, 8/4/2000 35,000,000 35,000,000
----------------------------------------------------------------------------
Nordebanken North America, Inc., 6.68%, 8/28/2000 15,000,000 14,925,975
----------------------------------------------------------------------------
Northern Indiana Public Services, 6.56%, 8/8/2000 50,000,000 49,936,514
----------------------------------------------------------------------------
Norwest Financial, Inc., 6.65%*, 8/7/2000 60,000,000 59,996,420
----------------------------------------------------------------------------
Oakland Alameda County, 6.56%, 8/10/2000 30,000,000 30,000,000
----------------------------------------------------------------------------
Old Kent Bank, 6.67%*, 8/1/2000 10,000,000 10,000,000
----------------------------------------------------------------------------
Old Kent Bank, 6.64%, 7/3/2001 30,000,000 29,991,922
----------------------------------------------------------------------------
Preferred Receivable Funding, 6.65%, 08/09/2000 24,240,000 24,204,556
----------------------------------------------------------------------------
Quincy Capital Corp., 6.57%, 8/8/2000 20,000,000 19,974,606
----------------------------------------------------------------------------
Scaldis Capital, LLC, 6.76%, 8/30/2000 20,000,000 19,892,861
----------------------------------------------------------------------------
Scaldis Capital, LLC, 6.65%, 10/16/2000 40,000,000 39,446,889
----------------------------------------------------------------------------
Sigma Finance, Inc., 6.65%*, 8/3/2000 50,000,000 50,000,000
----------------------------------------------------------------------------
Sigma Finance, Inc., 6.65%, 10/13/2000 10,000,000 9,867,181
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
Principal
Amount ($) Value ($)
----------------------------------------------------------------------------
Sigma Finance, Inc., 6.65%, 10/19/2000 40,000,000 39,425,933
-----------------------------------------------------------------------------
Southern California Edison, 6.72%*, 8/25/2000 45,000,000 45,000,000
-----------------------------------------------------------------------------
Stellar Funding Group, 6.59%, 8/7/2000 15,000,000 14,983,625
-----------------------------------------------------------------------------
Stellar Funding Group, 6.57%, 8/24/2000 40,000,000 39,833,122
-----------------------------------------------------------------------------
Stellar Funding Group, 6.62%, 9/19/2000 10,000,000 9,910,847
-----------------------------------------------------------------------------
Stellar Funding Group, 6.66%, 10/27/2000 10,000,000 9,841,708
-----------------------------------------------------------------------------
SMM Trust, 6.65%*, 8/13/2000 90,000,000 90,000,000
-----------------------------------------------------------------------------
Superior Funding Capital, 6.61%, 8/2/2000 35,000,000 34,993,603
-----------------------------------------------------------------------------
Superior Funding Capital, 6.59%, 8/4/2000 50,000,000 49,972,708
-----------------------------------------------------------------------------
Superior Funding Capital, 6.58%, 8/30/2000 15,000,000 14,921,096
-----------------------------------------------------------------------------
Surrey Funding Corp., 6.57%, 8/4/2000 15,000,000 14,991,825
-----------------------------------------------------------------------------
Surrey Funding Corp., 6.58%, 8/22/2000 65,000,000 64,752,404
-----------------------------------------------------------------------------
Sweetwater Capital Corp., 6.59%, 8/4/2000 10,000,000 9,994,542
-----------------------------------------------------------------------------
Sweetwater Capital Corp., 6.56%, 8/16/2000 45,000,000 44,877,563
-----------------------------------------------------------------------------
Sweetwater Capital Corp., 6.57%, 8/18/2000 15,000,000 14,953,746
-----------------------------------------------------------------------------
State of Texas General Obligation, 6.60%*, 8/2/2000 20,000,000 20,000,000
-----------------------------------------------------------------------------
Thunder Bay Funding, Inc., 6.58%, 8/11/2000 20,000,000 19,963,667
-----------------------------------------------------------------------------
Thunder Bay Funding, Inc., 6.59%, 8/21/2000 15,000,000 14,945,500
-----------------------------------------------------------------------------
Transamerica Financial Corp., 6.94%*, 9/1/2000 45,000,000 45,000,000
-----------------------------------------------------------------------------
Variable Funding Corp., 6.65%, 8/10/2000 50,000,000 49,917,750
-----------------------------------------------------------------------------
WCP Funding, Inc., 6.59%, 8/8/2000 35,000,000 34,955,424
-----------------------------------------------------------------------------
WCP Funding, Inc., 6.58%, 8/24/2000 45,000,000 44,812,263
-----------------------------------------------------------------------------
Windmill Funding Corp., 6.63%, 10/6/2000 25,000,000 24,699,792
-----------------------------------------------------------------------------
Wood Street Funding Corp., 6.65%, 10/18/2000 25,000,000 24,645,208
-----------------------------------------------------------------------------
Xerox Credit Corp., 6.63%*, 8/8/2000 40,000,000 39,994,809
-----------------------------------------------------------------------------
Total Commercial Paper
(Cost $3,800,119,143) 3,800,119,143
-----------------------------------------------------------------------------
Certificates of Deposit 21.0%
-----------------------------------------------------------------------------
Allfirst Bank, 6.57%*, 8/31/2000 25,000,000 24,996,326
-----------------------------------------------------------------------------
Allfirst Bank, 6.85%*, 9/7/2000 45,000,000 44,998,219
-----------------------------------------------------------------------------
American Express Centurian Bank, 6.61%*, 8/5/2000 50,000,000 49,995,878
-----------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
------------------------------------------------------------------------------------
<S> <C> <C>
American Express Centurian Bank, 6.6%*, 8/19/2000 50,000,000 49,995,692
------------------------------------------------------------------------------------
AmSouth Bank NA, 6.72%*, 8/1/2000 20,000,000 19,996,393
------------------------------------------------------------------------------------
AmSouth Bank NA, 6.66%*, 8/11/2000 25,000,000 24,999,932
------------------------------------------------------------------------------------
AmSouth Bank NA, 6.88%*, 9/11/2000 40,000,000 40,000,000
------------------------------------------------------------------------------------
Bank of America NA, 6.67%*, 8/1/2000 80,000,000 80,000,000
------------------------------------------------------------------------------------
Bank of America NA, 7.4%, 5/25/2001 20,000,000 20,000,000
------------------------------------------------------------------------------------
CIT Group Holdings, Inc., 6.8%*, 9/6/2000 35,000,000 34,985,576
------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, 6.65%*, 8/1/2000 45,000,000 44,978,252
------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, 7.18%, 5/10/2001 25,000,000 24,998,175
------------------------------------------------------------------------------------
Comerica Bank, 6.64%*, 8/1/2000 50,000,000 49,983,763
------------------------------------------------------------------------------------
Comerica Bank, 6.58%*, 8/12/2000 35,000,000 34,993,824
------------------------------------------------------------------------------------
FCC National Bank, 6.9%*, 9/2/2000 40,000,000 40,006,204
------------------------------------------------------------------------------------
First Union National Bank, 6.67%*, 8/1/2000 25,000,000 25,000,000
------------------------------------------------------------------------------------
First Union National Bank, 6.68%*, 8/1/2000 35,000,000 35,000,000
------------------------------------------------------------------------------------
First Union National Bank, 6.87%*, 8/1/2000 20,000,000 20,002,374
------------------------------------------------------------------------------------
Fleet Boston National Bank, 6.77%*, 8/1/2000 15,000,000 15,012,491
------------------------------------------------------------------------------------
Harris Trust & Savings, 6.57%*, 8/12/2000 45,000,000 44,984,466
------------------------------------------------------------------------------------
Key Bank NA, 6.62%*, 8/8/2000 50,000,000 49,991,885
------------------------------------------------------------------------------------
Key Bank NA, 6.76%*, 8/25/2000 50,000,000 49,985,337
------------------------------------------------------------------------------------
Mellon Bank NA, 6.82%, 8/30/2000 55,000,000 54,998,693
------------------------------------------------------------------------------------
JP Morgan & Co., Inc., 6.62%*, 8/17/2000 35,000,000 35,000,000
------------------------------------------------------------------------------------
National Bank Canada, 6.8%*, 8/22/2000 45,000,000 44,993,206
------------------------------------------------------------------------------------
National City Bank, 6.38%*, 8/1/2000 45,000,000 45,001,434
------------------------------------------------------------------------------------
National City Bank, 6.58%*, 8/22/2000 20,000,000 20,001,659
------------------------------------------------------------------------------------
Old Kent Bank, 6.67%*, 8/1/2000 15,000,000 15,000,000
------------------------------------------------------------------------------------
US Bank NA, 6.74%*, 8/1/2000 30,000,000 29,997,315
------------------------------------------------------------------------------------
Total Certificates of Deposit
(Cost $1,069,897,094) 1,069,897,094
------------------------------------------------------------------------------------
Short-Term and Medium-Term Notes 4.2%
------------------------------------------------------------------------------------
American Honda Finance Corp., 6.62%*, 8/13/2000 25,000,000 24,998,257
------------------------------------------------------------------------------------
Bank One Corp., 6.65%*, 8/4/2000 10,000,000 9,999,829
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
--------------------------------------------------------------------------------------
<S> <C> <C>
Bank One Corp., 6.80%*, 10/5/2000 40,000,000 39,996,526
--------------------------------------------------------------------------------------
Capital One Funding, 6.7%*, 8/3/2000 19,866,000 19,866,000
--------------------------------------------------------------------------------------
Capital One Funding, 6.7%*, 8/3/2000 18,900,000 18,900,000
--------------------------------------------------------------------------------------
Capital One Funding, 6.7%*, 8/3/2000 26,022,000 26,022,000
--------------------------------------------------------------------------------------
Federal National Mortgage Association, 6.48%,
2/22/2001 25,000,000 24,975,750
--------------------------------------------------------------------------------------
Goldman Sachs Group, 6.65%*, 8/1/2000 25,000,000 25,000,000
--------------------------------------------------------------------------------------
Student Loan Marketing Association, 6.45%*, 8/1/2000 20,000,000 19,985,990
--------------------------------------------------------------------------------------
Total Short-Term and Medium-Term Notes
(Cost: $209,744,352) 209,744,352
--------------------------------------------------------------------------------------
Total Investment Portfolio
(Cost $5,087,011,589) (a) $5,087,011,589
--------------------------------------------------------------------------------------
</TABLE>
Interest rates represent annualized yield to date of maturity, except for
floating rate securities described below.
* Floating rate notes are securities whose yields vary with a designated
market index or market rate, such as the coupon-equivalent of the U.S.
Treasury bill rate. These securities are shown at their current rate as of
July 31, 2000. The dates shown represent the demand date or next interest
rate change date.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) Cost for federal income tax purposes was $5,087,011,589.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
portfolio of investments
July 31, 2000
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
---------------------------------------------------------------------------------
Zurich Government Money Fund
---------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 46.1%
---------------------------------------------------------------------------------
Bear Stearns Cos., Inc.
6.68%, to be repurchased at $60,011,133 on
8/1/2000 60,000,000 60,000,000
---------------------------------------------------------------------------------
Bear Stearns Cos., Inc.
6.53%, to be repurchased at $35,019,046 on
8/3/2000 35,000,000 35,000,000
---------------------------------------------------------------------------------
Chase Securities, Inc.
6.53%, to be repurchased at $55,019,953 on
8/2/0000 55,000,000 55,000,000
---------------------------------------------------------------------------------
First Boston
6.5%, to be repurchased at $80,014,444 on 8/1/2000 80,000,000 80,000,000
---------------------------------------------------------------------------------
Goldman Sachs
6.55%, to be repurchased at $42,053,492 on
8/7/2000 42,000,000 42,000,000
---------------------------------------------------------------------------------
Lehman Brothers
6.51%, to be repurchased at $30,021,700 on
8/4/2000 30,000,000 30,000,000
---------------------------------------------------------------------------------
State Street Bank and Trust Co.
6.53%, to be repurchased at $4,898,884 on 8/1/2000 4,898,000 4,898,000
---------------------------------------------------------------------------------
Total Repurchase Agreements
(Cost $306,898,000)** 306,898,000
---------------------------------------------------------------------------------
Short-Term and Medium-Term Notes 53.9%
---------------------------------------------------------------------------------
Export-Import Bank, 6.82%*, 9/21/2000 9,000,000 9,000,000
---------------------------------------------------------------------------------
Federal Agricultural Mortgage Corp., 6.59%*, 8/1/2000 15,000,000 15,000,000
---------------------------------------------------------------------------------
Federal Farm Credit Bank, 6.52%*, 8/1/2000 25,000,000 24,991,385
---------------------------------------------------------------------------------
Federal Farm Credit Bank, 6.67%*, 8/1/2000 10,000,000 9,998,278
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.49%*, 8/2/2000 10,000,000 10,000,000
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.49%*, 8/2/2000 15,000,000 15,000,000
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.49%*, 8/21/2000 35,000,000 34,998,559
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.5%, 9/21/2000 10,000,000 9,907,917
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.57%*, 8/27/2000 14,000,000 14,000,000
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.57%, 2/9/2001 7,500,000 7,500,675
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.6%*, 9/29/2000 30,000,000 29,996,654
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
Principal
Amount ($) Value ($)
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.69%, 5/2/2001 7,000,000 6,922,298
---------------------------------------------------------------------------------
Federal Home Loan Bank, 6.95%, 5/8/2001 5,000,000 4,990,334
---------------------------------------------------------------------------------
Federal Home Loan Bank, 7.13%, 5/18/2001 5,160,000 5,153,841
---------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation, 6.9%,
2/8/2001 5,000,000 4,983,900
---------------------------------------------------------------------------------
Federal National Mortgage Association, 5.24%,
5/24/2001 15,000,000 15,000,000
---------------------------------------------------------------------------------
Federal National Mortgage Association, 6.49%*, 20,000,000 19,985,917
8/1/2000
---------------------------------------------------------------------------------
Federal National Mortgage Association, 6.53%*,
8/1/2000 12,500,000 12,500,000
---------------------------------------------------------------------------------
Federal National Mortgage Association, 6.55%,
3/20/2001 7,000,000 6,999,867
---------------------------------------------------------------------------------
Federal National Mortgage Association, 6.58%,
2/22/2001 7,500,000 7,492,725
---------------------------------------------------------------------------------
Federal National Mortgage Association, 6.66%*,
9/6/2000 10,000,000 9,999,405
---------------------------------------------------------------------------------
Federal National Mortgage Association, 6.89%*,
8/1/2000 10,000,000 10,000,579
---------------------------------------------------------------------------------
Overseas Private Investment Corp., 6.84%*, 8/1/2000 3,334,000 3,334,000
---------------------------------------------------------------------------------
Overseas Private Investment Corp., 6.84%*, 8/1/2000 2,667,200 2,667,200
---------------------------------------------------------------------------------
Overseas Private Investment Corp., 6.84%*, 8/1/2000 833,500 833,500
---------------------------------------------------------------------------------
Overseas Private Investment Corp., 6.84%*, 8/1/2000 2,417,150 2,417,150
---------------------------------------------------------------------------------
Student Loan Marketing Association, 6.45%*, 8/1/2000 54,550,000 54,503,920
---------------------------------------------------------------------------------
Student Loan Marketing Association, 6.84%*, 8/1/2000 10,000,000 10,000,000
---------------------------------------------------------------------------------
Total Short-Term and Medium-Term Notes
(Cost $358,178,104) 358,178,104
---------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0%
(Cost $665,076,104) (a) $ 665,076,104
---------------------------------------------------------------------------------
</TABLE>
Interest rates represent annualized yield to date of maturity, except for
floating rate securities described below.
* Floating rate notes are securities whose yields vary with a designated
market index or market rate, such as the coupon-equivalent of the U.S.
Treasury bill rate. These securities are shown at their current rate as of
July 31, 2000. The dates shown represent the demand date or next interest
rate change date.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
(a) Cost for federal income tax purposes is $665,076,104.
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
portfolio of investments
July 31, 2000
Principal
Amount ($) Value ($)
----------------------------------------------------------------------------
Zurich Tax-Free Money Fund
----------------------------------------------------------------------------
Variable Rate Demand Securities* 61.5%
----------------------------------------------------------------------------
Alaska
----------------------------------------------------------------------------
City of Valdez
Exxon Pipeline Project, 4.2% 2,500,000 2,500,000
----------------------------------------------------------------------------
Alabama
----------------------------------------------------------------------------
Birmingham
Special Care Facilities Finance Authority, 4.5% 4,800,000 4,800,000
----------------------------------------------------------------------------
Mobile
Special Care Facilities Finance Authority, 4.5% 5,000,000 5,000,000
----------------------------------------------------------------------------
Arizona
----------------------------------------------------------------------------
Maricopa County
Pollution Control Revenue, 4.25%-4.4% 5,000,000 5,000,000
----------------------------------------------------------------------------
California
----------------------------------------------------------------------------
Los Angeles
Harbor Improvement Corp., 4.4% 11,200,000 11,200,000
----------------------------------------------------------------------------
Statewide Communities Development Authority
Poinsettia Apartments Project, 5.43% 5,000,000 5,000,000
----------------------------------------------------------------------------
Colorado
----------------------------------------------------------------------------
Health Facilities Authority
Bethesda Living Center Project, 4.33% 4,050,000 4,050,000
----------------------------------------------------------------------------
Covenant Retirement Project, 4.33% 5,000,000 5,000,000
----------------------------------------------------------------------------
Frasier Meadows Manor Project, 4.33% 3,940,000 3,940,000
----------------------------------------------------------------------------
District of Columbia
----------------------------------------------------------------------------
General Obligation, 4.35% 2,150,000 2,150,000
----------------------------------------------------------------------------
The Washington Home, Inc., 4.35% 7,475,000 7,475,000
----------------------------------------------------------------------------
Florida
----------------------------------------------------------------------------
Broward County
Industrial Development Authority, 4.55% 5,770,000 5,770,000
----------------------------------------------------------------------------
Orange County
Presbyterian Retirement Community, 4.3% 10,000,000 10,000,000
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
Principal
Amount ($) Value ($)
------------------------------------------------------------------------------
Putnam County
Pollution Control Revenue, 4.35% 1,200,000 1,200,000
------------------------------------------------------------------------------
Sarasota County
Health Facilities Authority, 4.3% 4,400,000 4,400,000
------------------------------------------------------------------------------
Sunshine State Government Finance Committee Revenue,
4.3% 13,700,000 13,700,000
------------------------------------------------------------------------------
University of N. Florida Capital Improvement
Revenue, 4.35% 11,500,000 11,500,000
------------------------------------------------------------------------------
Georgia
------------------------------------------------------------------------------
Burke County
Development Authority Pollution Control Revenue,
4.3% 6,400,000 6,400,000
------------------------------------------------------------------------------
Cartersville
Industrial Development Revenue, 4.65% 3,600,000 3,600,000
------------------------------------------------------------------------------
Fayette County
Educational Facilities Authority, 4.3% 7,035,000 7,035,000
------------------------------------------------------------------------------
Fulton County
Development Authority Pollution Control Revenue,
4.25% 5,970,000 5,970,000
------------------------------------------------------------------------------
Gainesville-Riverside
Redevelopment Authority Revenue, 4.3% 10,000,000 10,000,000
------------------------------------------------------------------------------
Willacoochie
Development Authority Pollution Control Revenue,
4.4% 7,000,000 7,000,000
------------------------------------------------------------------------------
Illinois
------------------------------------------------------------------------------
Chicago
Industrial Development Revenue, 4.5% 3,400,000 3,400,000
------------------------------------------------------------------------------
Cicero
Industrial Development Revenue, 4.5% 2,650,000 2,650,000
------------------------------------------------------------------------------
Development Finance Authority
Crane-Tripp Partners Project, 4.4% 4,290,000 4,290,000
------------------------------------------------------------------------------
Home Run Inn Frozen Foods, 4.4% 6,960,000 6,960,000
------------------------------------------------------------------------------
MC Productions LLC Project, 4.5% 3,965,000 3,965,000
------------------------------------------------------------------------------
Whitting Corporation Project, 4.5% 4,000,000 4,000,000
------------------------------------------------------------------------------
Health Facilities Authority 8,070,000 8,070,000
Lutheran Home Project, 4.5%
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
Principal
Amount ($) Value ($)
-------------------------------------------------------------------
Hillside
Economic Development Authority, 4.35% 5,520,000 5,520,000
-------------------------------------------------------------------
McHenry
Industrial Development Revenue, 4.35% 5,500,000 5,500,000
-------------------------------------------------------------------
Mundelein-MacLean
Industrial Development Revenue, 4.35% 6,500,000 6,500,000
-------------------------------------------------------------------
Springfield
Industrial Development Revenue, 4.5% 6,500,000 6,500,000
-------------------------------------------------------------------
Woodridge
Industrial Development Revenue, 4.5% 5,100,000 5,100,000
-------------------------------------------------------------------
Woodstock
Industrial Development Revenue, 4.5% 4,965,000 4,965,000
-------------------------------------------------------------------
Indiana
-------------------------------------------------------------------
Health Facilities Authority, 4.5% 9,000,000 9,000,000
-------------------------------------------------------------------
Jasper County
Pollution Control Revenue, 4.25% 1,900,000 1,900,000
-------------------------------------------------------------------
Rockport
Pollution Control Revenue, 4.35% 10,005,000 10,005,000
-------------------------------------------------------------------
Kentucky
-------------------------------------------------------------------
Jeffersontown
Lease Program Revenue, 4.3% 3,000,000 3,000,000
-------------------------------------------------------------------
Lexington-Fayette County
EPI Corporation Project, 4.65% 3,900,000 3,900,000
-------------------------------------------------------------------
Lexington Christian Academy Project, 4.4% 8,600,000 8,600,000
-------------------------------------------------------------------
Mason County
Pollution Control Revenue, 4.35% 18,000,000 18,000,000
-------------------------------------------------------------------
Mayfield
Multi-City Lease Revenue, 4.4% 3,590,000 3,590,000
-------------------------------------------------------------------
Louisiana
-------------------------------------------------------------------
Caddo Parish
Industrial Development Revenue, 4.45% 8,500,000 8,500,000
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
Principal
Amount ($) Value ($)
------------------------------------------------------------------------
Michigan
------------------------------------------------------------------------
Higher Education Authority 2,300,000 2,300,000
Student Loans, 4.3%
------------------------------------------------------------------------
University of Michigan Hospital Revenue, 4.25% 4,200,000 4,200,000
------------------------------------------------------------------------
Missouri
------------------------------------------------------------------------
St. Louis
Development Financial Authority, 4.43% 5,000,000 5,000,000
------------------------------------------------------------------------
Environmental Improvement and Energy Reserve
Authority, 4.35% 4,555,000 4,555,000
------------------------------------------------------------------------
Montana
------------------------------------------------------------------------
Forsyth
Pollution Control Revenue, 4.35% 1,000,000 1,000,000
------------------------------------------------------------------------
North Carolina
------------------------------------------------------------------------
Wingate University
Educational Facilities Authority, 4.3% 13,380,000 13,380,000
------------------------------------------------------------------------
North Dakota
------------------------------------------------------------------------
Mercer County
Pollution Control Revenue, 4.35% 6,200,000 6,200,000
------------------------------------------------------------------------
New Mexico
------------------------------------------------------------------------
Belen
Industrial Development Revenue, 4.5% 4,225,000 4,225,000
------------------------------------------------------------------------
Farmington
El Paso Electric Co. Project, 4.4% 6,300,000 6,300,000
------------------------------------------------------------------------
Pollution Control Revenue, 4.2% 4,100,000 4,100,000
------------------------------------------------------------------------
Nevada
------------------------------------------------------------------------
Department of Commerce, 4.35% 4,900,000 4,900,000
------------------------------------------------------------------------
Ohio
------------------------------------------------------------------------
Higher Education Facilities Authority, 4.4% 8,500,000 8,500,000
------------------------------------------------------------------------
Lorain
Port Authority, 4.5% 3,500,000 3,500,000
------------------------------------------------------------------------
Portage County 4,600,000 4,600,000
Industrial Development Revenue, 4.45%
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
Principal
Amount ($) Value ($)
------------------------------------------------------------------------------
Pennsylvania
------------------------------------------------------------------------------
Allentown
Area Hospital Authority, 4.35% 6,850,000 6,850,000
------------------------------------------------------------------------------
Emmaus
General Authority Revenue, 4.31% 13,000,000 13,000,000
------------------------------------------------------------------------------
Lancaster County
Hospital Finance Authority, 4.33% 5,000,000 5,000,000
------------------------------------------------------------------------------
Philadelphia
Industrial Development Authority, 4.55% 6,500,000 6,500,000
------------------------------------------------------------------------------
Multi-Family Development Authority, 4.35% 7,580,000 7,580,000
------------------------------------------------------------------------------
Tennesse
------------------------------------------------------------------------------
Maury County
Saturn Corp. Project, 4.35% 2,500,000 2,500,000
------------------------------------------------------------------------------
Texas
------------------------------------------------------------------------------
Brazos River Authority
Pollution Control Revenue, 4.4% 1,300,000 1,300,000
------------------------------------------------------------------------------
Harris County
Health Facilities Authority, 4.4% 12,200,000 12,200,000
------------------------------------------------------------------------------
Small Business Industrial Development Corp.
Industrial Development Revenue, 4.35% 15,260,000 15,260,000
------------------------------------------------------------------------------
Utah
------------------------------------------------------------------------------
Salt Lake County
Pollution Control Revenue, 4.25% 2,200,000 2,200,000
------------------------------------------------------------------------------
Vermont
------------------------------------------------------------------------------
Student Association Corp, 4.45% 7,000,000 7,000,000
------------------------------------------------------------------------------
Virginia
------------------------------------------------------------------------------
Loudoun County,
Industrial Development Authority, 4.4% 5,660,000 5,660,000
------------------------------------------------------------------------------
Wisconsin
------------------------------------------------------------------------------
Eau Claire
Solid Waste Disposal Revenue, 4.5% 10,000,000 10,000,000
------------------------------------------------------------------------------
Health and Education Facilities Authority
University of Wisconsin Medical Foundation, 4.25% 8,000,000 8,000,000
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
Principal
Amount ($) Value ($)
------------------------------------------------------------------------------
Manitowoc
Industrial Development Revenue, 4.5% 3,840,000 3,840,000
------------------------------------------------------------------------------
Total Variable Rate Demand Securities
(Cost $456,255,000) 456,255,000
------------------------------------------------------------------------------
Other Securities 38.5%
------------------------------------------------------------------------------
Alaska
------------------------------------------------------------------------------
City of Valdez
Atlantic Richfield Project, 4.1%, 8/11/2000 6,000,000 6,000,000
------------------------------------------------------------------------------
Arizona
------------------------------------------------------------------------------
Agricultural Improvement and Power District
Salt River Project, 4.25%-4.7%,
8/11/2000-8/14/2000 11,000,000 11,000,000
------------------------------------------------------------------------------
Colorado
------------------------------------------------------------------------------
Platte River Power Authority, 4.3%, 8/24/2000 7,900,000 7,900,000
------------------------------------------------------------------------------
Florida
------------------------------------------------------------------------------
Gainsville Utilities Authority, 4.7%, 8/11/2000 3,000,000 3,000,000
------------------------------------------------------------------------------
Municipal Power Agency, 4.15%, 8/28/2000 8,350,000 8,350,000
------------------------------------------------------------------------------
Orange County
Health Facilities Authority, 4.1%, 8/7/2000 8,700,000 8,700,000
------------------------------------------------------------------------------
Pinellas County
Educational Facilities Authority, 4.1%-4.35%,
8/8/2000-8/15/2000 11,900,000 11,900,000
------------------------------------------------------------------------------
Sarasota County
Sarasota Memorial Hospital Project, 4.25%,
8/9/2000 5,000,000 5,000,000
------------------------------------------------------------------------------
Illinois
------------------------------------------------------------------------------
Educational Facilities Authority, 4.65%, 9/12/2000 10,700,000 10,700,000
------------------------------------------------------------------------------
Health Facilities Authority, 4.4%, 10/2/2000 7,000,000 7,000,000
------------------------------------------------------------------------------
Indiana
------------------------------------------------------------------------------
Jasper County
Industrial Pollution Control Revenue, 4.3%,
8/7/2000 14,000,000 14,000,000
------------------------------------------------------------------------------
Kentucky
------------------------------------------------------------------------------
Roadfund First Series -- 4.7%, 8/10/2000 9,000,000 9,000,000
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
Principal
Amount ($) Value ($)
------------------------------------------------------------------------------
Danville County
Multi-City Lease Revenue, 4.25%, 10/10/2000 12,000,000 12,000,000
------------------------------------------------------------------------------
Pendleton County
Multi-City Lease Revenue, 4.25%, 10/10/2000 11,500,000 11,500,000
------------------------------------------------------------------------------
Louisiana
------------------------------------------------------------------------------
Industrial District of West Baton Rouge
Pollution Control Revenue, 4.45%-4.75%,
8/10/2000-8/15/2000 11,050,000 11,050,000
------------------------------------------------------------------------------
Maryland
------------------------------------------------------------------------------
Anne Arundel County
Baltimore Gas and Electric Co., 4.25%, 10/10/2000 12,600,000 12,600,000
------------------------------------------------------------------------------
Baltimore
Baltimore Gas and Electric Co., 4.2%, 9/8/2000 6,500,000 6,500,000
------------------------------------------------------------------------------
Michigan
------------------------------------------------------------------------------
Strategic Fund, 4.7%-4.75%, 8/10/2000-8/14/2000 11,050,000 11,050,000
------------------------------------------------------------------------------
Mississippi
------------------------------------------------------------------------------
Claiborne County
Pollution Control Revenue, 4.15%, 9/7/2000 3,700,000 3,700,000
------------------------------------------------------------------------------
Nebraska
------------------------------------------------------------------------------
Omaha
Public Power Agency, 4.25%-4.65%,
8/9/2000-9/7/2000 13,000,000 13,000,000
------------------------------------------------------------------------------
New Hampshire
------------------------------------------------------------------------------
General Obligation, 4.25%, 8/10/2000 6,000,000 6,000,000
------------------------------------------------------------------------------
Nevada
------------------------------------------------------------------------------
Las Vegas
Valley Water Project, 4.7%, 8/14/2000 4,000,000 4,000,000
------------------------------------------------------------------------------
New York
------------------------------------------------------------------------------
Nassau County
Long Island Power Service, 4.65%, 9/13/2000 4,000,000 4,000,000
------------------------------------------------------------------------------
Tax Anticipation Note, 4%, 8/31/2000 4,500,000 4,502,690
------------------------------------------------------------------------------
Oklahoma
------------------------------------------------------------------------------
Oklahoma City General Obligation, 4.65%, 8/14/2000 3,000,000 3,000,000
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
Principal
Amount ($) Value ($)
--------------------------------------------------------------------------------
Texas
--------------------------------------------------------------------------------
Brazos River Authority
Pollution Control Revenue, 4.75%, 8/14/2000 3,000,000 3,000,000
--------------------------------------------------------------------------------
Harris County
Health Facilities Authority, 4.25%, 8/9/2000 4,400,000 4,400,000
--------------------------------------------------------------------------------
Houston
Water & Sewer Authority, 4.7%, 8/14/2000 5,000,000 5,000,000
--------------------------------------------------------------------------------
San Antonio
Electric and Gas Revenue, 4.35%,
8/23/2000-9/12/2000 10,000,000 10,000,000
--------------------------------------------------------------------------------
Municipal Power Agency, 4.7%, 9/13/2000 6,000,000 6,000,000
--------------------------------------------------------------------------------
Tax and Revenue Anticipation Notes, 3.7%-3.72%,
8/31/2000 24,600,000 24,615,309
--------------------------------------------------------------------------------
University of Texas, 4.65%, 9/13/2000 4,000,000 4,000,000
--------------------------------------------------------------------------------
Utah
--------------------------------------------------------------------------------
Intermountain Power Agency, 4.3%-4.7%,
8/16/2000-9/13/2000 12,300,000 12,300,000
--------------------------------------------------------------------------------
Virginia
--------------------------------------------------------------------------------
Chesterfield County
Industrial Development Authority, 4.3%, 8/11/2000 4,300,000 4,300,000
--------------------------------------------------------------------------------
Louisa County
Industrial Development Authority, 4.4%-4.25%
8/28/2000-9/27/2000 6,000,000 6,000,000
--------------------------------------------------------------------------------
Total Other Securities
(Cost $285,067,999) 285,067,999
--------------------------------------------------------------------------------
Interest rates represent annualized yield to date of maturity, except for
variable rate demand securities described below.
* Variable rate demand securities are securities whose yields vary with a
designated market index or market rate, such as the coupon-equivalent of
the U.S. Treasury bill rate. These securities are shown at their current
rate as of July 31, 2000, and are payable within five business days.
(a) Cost for federal income tax purposes is $741,322,999.
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
financial statements
Statement of Assets and Liabilities
July 31, 2000 Money Market Government Tax-Free
-------------------------------------------------------------------------------
Assets
-------------------------------------------------------------------------------
Investments in securities,
at amortized cost:
Short-term securities $ 5,079,760,589 $ 358,178,104 $ 741,322,999
-------------------------------------------------------------------------------
Repurchase agreements 7,251,000 306,898,000 --
-------------------------------------------------------------------------------
Cash 8,356,342 -- 3,784,863
-------------------------------------------------------------------------------
Receivable for investments
sold -- -- 360,305
-------------------------------------------------------------------------------
Interest receivable 21,595,326 4,089,404 4,517,574
-------------------------------------------------------------------------------
Receivable for Fund shares
sold 22,002,681 2,165,349 1,884,357
-------------------------------------------------------------------------------
Total Assets 5,138,965,938 671,330,857 751,870,098
-------------------------------------------------------------------------------
Liabilities
-------------------------------------------------------------------------------
Due to custodian bank -- 416,626 --
-------------------------------------------------------------------------------
Dividends payable 5,221,155 680,433 484,791
-------------------------------------------------------------------------------
Payable for Fund shares
redeemed 26,466,073 1,641,267 5,550,983
-------------------------------------------------------------------------------
Accrued management fee 1,112,254 146,890 166,000
-------------------------------------------------------------------------------
Other accrued expenses and
payables 2,265,975 232,326 284,258
-------------------------------------------------------------------------------
Total Liabilities 35,065,457 3,117,542 6,486,032
-------------------------------------------------------------------------------
Net assets, at value $ 5,103,900,481 $ 668,213,315 $ 745,384,066
-------------------------------------------------------------------------------
Net Assets
-------------------------------------------------------------------------------
Shares outstanding 5,103,900,481 668,213,315 745,384,066
-------------------------------------------------------------------------------
Net asset value, offering
and redemption price per
share (Net asset value /
outstanding shares of
beneficial interest, no
par value, unlimited
number of shares
authorized) $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
Statement of Operations
Year ended July 31, 2000 Money Market Government Tax-Free
-------------------------------------------------------------------------------
Investment Income
-------------------------------------------------------------------------------
Income:
Interest $ 308,496,359 $ 39,881,794 $ 29,886,580
-------------------------------------------------------------------------------
Expenses:
Management fee 13,606,675 1,816,620 2,045,830
-------------------------------------------------------------------------------
Services to shareholders 7,873,170 857,269 703,571
-------------------------------------------------------------------------------
Custodian fees 168,757 55,337 42,104
-------------------------------------------------------------------------------
Auditing 75,555 9,437 32,397
-------------------------------------------------------------------------------
Legal 80,075 12,349 19,469
-------------------------------------------------------------------------------
Trustees' fees and expenses 54,750 27,994 24,584
-------------------------------------------------------------------------------
Reports to shareholders 78,257 82,731 28,125
-------------------------------------------------------------------------------
Registration fees 292,140 72,730 115,190
-------------------------------------------------------------------------------
Other 197,205 38,596 --
-------------------------------------------------------------------------------
Total expenses, before
expense reductions 22,426,584 2,973,063 3,011,270
-------------------------------------------------------------------------------
Expense reductions (241,070) (32,940) (47,713)
-------------------------------------------------------------------------------
Total expenses, after
expense reductions 22,185,514 2,940,123 2,963,557
-------------------------------------------------------------------------------
Net investment income 286,310,845 36,941,671 26,923,023
-------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $ 286,310,845 $ 36,941,671 $ 26,923,023
-------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
Statements of Changes in Net Assets
Money Market
Year ended July 31,
2000 1999
-------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
-------------------------------------------------------------------------------
Operations:
Net investment income $ 286,310,845 $ 232,624,260
-------------------------------------------------------------------------------
Distributions to shareholders from net
investment income (286,310,845) (232,624,260)
-------------------------------------------------------------------------------
Fund share transactions at net asset value of
$1 per share:
Proceeds from shares sold 7,683,681,521 8,713,747,186
-------------------------------------------------------------------------------
Reinvestment of distributions 275,652,792 223,034,726
-------------------------------------------------------------------------------
Cost of shares redeemed (7,964,964,771) (8,365,877,865)
-------------------------------------------------------------------------------
Net increase (decrease) from Fund share
transactions and total increase (decrease)
in net assets (5,630,458) 570,904,047
-------------------------------------------------------------------------------
Net Assets
-------------------------------------------------------------------------------
Beginning of period 5,109,530,939 4,538,626,892
-------------------------------------------------------------------------------
End of period $ 5,103,900,481 $ 5,109,530,939
-------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
Statements of Changes in Net Assets
Government
Year ended July 31,
2000 1999
-------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
-------------------------------------------------------------------------------
Operations:
Net investment income $ 36,941,671 $ 33,081,712
-------------------------------------------------------------------------------
Distributions to shareholders from net
investment income (36,941,671) (33,081,712)
-------------------------------------------------------------------------------
Fund share transactions at net asset value of
$1 per share:
Proceeds from shares sold 630,833,104 660,407,000
-------------------------------------------------------------------------------
Reinvestment of distributions 35,715,975 31,985,558
-------------------------------------------------------------------------------
Cost of shares redeemed (710,119,575) (667,480,000)
-------------------------------------------------------------------------------
Net increase (decrease) from Fund share
transactions and total increase (decrease)
in net assets (43,570,496) 24,912,558
-------------------------------------------------------------------------------
Net Assets
-------------------------------------------------------------------------------
Beginning of period 711,783,811 686,871,253
-------------------------------------------------------------------------------
End of period $ 668,213,315 $ 711,783,811
-------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
Statements of Changes in Net Assets
Tax-Free
Year ended July 31,
2000 1999
-------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
-------------------------------------------------------------------------------
Operations:
Net investment income $ 26,923,023 $ 23,615,669
-------------------------------------------------------------------------------
Distributions to shareholders from net
investment income (26,923,023) (23,615,669)
-------------------------------------------------------------------------------
Fund share transactions at net asset value of
$1 per share:
Proceeds from shares sold 873,623,983 908,119,338
-------------------------------------------------------------------------------
Reinvestment of distributions 26,054,482 22,976,444
-------------------------------------------------------------------------------
Cost of shares redeemed (950,353,847) (950,930,278)
-------------------------------------------------------------------------------
Net increase (decrease) from Fund share
transactions and total increase (decrease)
in net assets $ (50,675,382) $ (19,834,496)
-------------------------------------------------------------------------------
Net Assets
-------------------------------------------------------------------------------
Beginning of period 796,059,448 815,893,944
-------------------------------------------------------------------------------
End of period $ 745,384,066 $ 796,059,448
-------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
financial highlights
The following tables include selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
Zurich Money Market Fund
Year ended July 31, 2000 1999 1998 1997 1996
-------------------------------------------------------------------------------
Net asset value, beginning
of period $ 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Net investment income 0.06 0.05 0.05 0.05 0.05
-------------------------------------------------------------------------------
Less distributions from net
investment income (0.06) (0.05) (0.05) (0.05) (0.05)
-------------------------------------------------------------------------------
Net asset value, end of
period $ 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Total Return (%) 5.78 4.89 5.38 5.27 5.34
-------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
-------------------------------------------------------------------------------
Net assets, end of period
($ millions) 5,104 5,110 4,539 4,362 4,226
-------------------------------------------------------------------------------
Ratio of expenses before
expense reductions (%) 0.44 0.46 0.48 0.45 0.50
-------------------------------------------------------------------------------
Ratio of expenses after
expense reductions (%) 0.44 0.46 0.48 0.45 0.50
-------------------------------------------------------------------------------
Ratio of net investment
income (%) 5.61 4.78 5.24 5.14 5.20
-------------------------------------------------------------------------------
32
<PAGE>
Zurich Government Money Fund
Year ended July 31, 2000 1999 1998 1997 1996
-------------------------------------------------------------------------------
Net asset value, beginning
of period $ 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Net investment income 0.05 0.05 0.05 0.05 0.05
-------------------------------------------------------------------------------
Less distributions from net
investment income (0.05) (0.05) (0.05) (0.05) (0.05)
-------------------------------------------------------------------------------
Net asset value, end of
period $ 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Total Return (%) 5.59 4.78 5.33 5.26 5.34
-------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
-------------------------------------------------------------------------------
Net assets, end of period
($ millions) 668 712 687 671 672
-------------------------------------------------------------------------------
Ratio of expenses before
expense reductions (%) 0.44 0.43 0.43 0.44 0.46
-------------------------------------------------------------------------------
Ratio of expenses after
expense reductions (%) 0.43 0.43 0.43 0.44 0.46
-------------------------------------------------------------------------------
Ratio of net investment
income (%) 5.43 4.67 5.20 5.13 5.20
-------------------------------------------------------------------------------
33
<PAGE>
Zurich Tax-Free Money Fund
Year ended July 31, 2000 1999 1998 1997 1996
-------------------------------------------------------------------------------
Net asset value, beginning
of period $ 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Net investment income 0.04 0.03 0.03 0.03 0.03
-------------------------------------------------------------------------------
Less distributions from net
investment income (0.04) (0.03) (0.03) (0.03) (0.03)
-------------------------------------------------------------------------------
Net asset value, end of
period $ 1.00 1.00 1.00 1.00 1.00
-------------------------------------------------------------------------------
Total Return (%) 3.58 2.97 3.46 3.39 3.44
-------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
-------------------------------------------------------------------------------
Net assets, end of period
($ millions) 745 796 816 771 729
-------------------------------------------------------------------------------
Ratio of expenses before
expense reductions (%) 0.39 0.36 0.36 0.37 0.39
-------------------------------------------------------------------------------
Ratio of expenses after
expense reductions (%) 0.39 0.36 0.36 0.37 0.39
-------------------------------------------------------------------------------
Ratio of net investment
income (%) 3.51 2.93 3.39 3.33 3.38
-------------------------------------------------------------------------------
34
<PAGE>
notes to financial statements
1. Significant Accounting Policies
Zurich Money Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end diversified management
investment company organized as a Massachusetts business trust. The Trust
currently offers 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 or its agencies and repurchase
agreements thereon. Zurich Tax-Free Money Fund invests in short-term high
quality municipal securities.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which require the use of
management estimates. The policies described below are followed consistently by
the Fund in the preparation of its financial statements.
Security Valuation. The Funds value all portfolio securities utilizing the
amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act
and pursuant to which the Funds must adhere to certain conditions. Under this
method, which does not take into account unrealized gains or losses on
securities, an instrument is initially valued at its cost and thereafter assumes
a constant accretion/amortization to maturity of any discount/premium.
Repurchase Agreements. The Funds may enter into repurchase agreements with
certain banks and broker/dealers whereby the Funds, through their custodian or
sub-custodian bank, receive delivery of the underlying securities, the amount of
which at the time of purchase and each subsequent business day is required to be
maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Federal Income Taxes. Each Fund's policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, the Funds paid no federal income taxes and no federal
income tax provision was required.
Distribution of Income and Gains. All of the net investment income of the Funds
is declared as a daily dividend and is distributed to shareholders monthly. Net
investment income includes all realized gains (losses) on portfolio securities.
35
<PAGE>
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. All discounts and premiums are accreted/amortized for both tax and
financial reporting purposes.
Expenses. Expenses arising in connection with a specific Fund are allocated to
that Fund. Other Trust expenses are allocated between the Funds in proportion to
their relative net assets.
2. Transactions and Affiliates
Management Agreement. Each Fund has a management agreement with Scudder Kemper
Investments, Inc. ("Scudder Kemper") and pays a monthly investment management
fee of 1/12 of the annual rate of 0.50% of the first $215 million of average
daily net assets declining to 0.25% of average daily net assets in excess of
$800 million. During the year ended July 31, 2000, the Funds incurred the
following management fees:
Management fee Effective
Fund imposed ($) Rate (%)
--------------------------------------------------------------------------------
Zurich Money Market Fund 13,606,675 .27
--------------------------------------------------------------------------------
Zurich Government Money Fund 1,816,620 .27
--------------------------------------------------------------------------------
Zurich Tax-Free Money Fund 2,045,830 .27
--------------------------------------------------------------------------------
Shareholder Services Agreement. Pursuant to a services agreement with the Funds'
transfer agent, Kemper Service Company ("KSvC") is the shareholder service agent
of the Trust. For the year ended July 31, 2000, KSvC received shareholder
services fees as follows:
Unpaid at
Fund Fee imposed ($) July 31, 2000 ($)
--------------------------------------------------------------------------------
Zurich Money Market Fund 5,201,974 1,449,744
--------------------------------------------------------------------------------
Zurich Government Money Fund 631,503 41,827
--------------------------------------------------------------------------------
Zurich Tax-Free Money Fund 534,982 105,784
--------------------------------------------------------------------------------
Officers and Trustees. Certain officers or trustees of the Trust are also
officers or directors of Scudder Kemper. For the year ended July 31, 2000, the
Trust made no payments to its officers and incurred trustees' fees of $107,328
to independent trustees.
36
<PAGE>
3. Expense Off-Set Arrangement
Each Fund has entered into arrangements with their custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were used to
reduce a portion of each Fund's expenses. During the year ended July 31, 2000,
the Funds' custodian and transfer agent fees were reduced as follows:
Custodian Transfer agent
Fund fee ($) fee ($)
--------------------------------------------------------------------------------
Zurich Money Market Fund 24,217 216,853
--------------------------------------------------------------------------------
Zurich Government Money Fund 4,317 28,623
--------------------------------------------------------------------------------
Zurich Tax-Free Money Fund 14,994 32,719
--------------------------------------------------------------------------------
4. Line of Credit
The Funds and several Kemper funds (the "Participants") share in a $750 million
revolving credit facility with Chase Manhattan Bank for temporary or emergency
purposes, including the meeting of redemption requests that otherwise might
require the untimely disposition of securities. The Participants are charged an
annual commitment fee which is allocated, pro rata based on net assets, among
each of the Participants. Interest is calculated based on the market rates at
the time of the borrowing. The Funds may borrow up to a maximum of 33 percent of
its net assets under the agreement.
37
<PAGE>
report of independent auditors
The Board of Trustees and Shareholders of Zurich Money Funds
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Zurich Money Market Fund, Zurich Government
Money Fund and Zurich Tax-Free Money Fund, comprising Zurich Money Funds, as of
July 31, 2000, and the related statements of operations for the year then ended
and changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the fiscal years since 1996. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of July 31, 2000, 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 each
of the Funds comprising Zurich Money Funds at July 31, 2000, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended and the financial highlights for
each of the fiscal periods since 1996, in conformity with accounting principles
generally accepted in the United States.
Chicago, Illinois /s/Ernst & Young LLP
September 7, 2000
38
<PAGE>
tax information (unaudited)
Of the dividends paid from net investment income for the Zurich Tax-Free Fund
for the taxable year ended July 31, 2000, 100% are designated as exempt interest
dividends for federal income tax purposes.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your account, please call 1-888-ZURICH-1 (987-4241).
39
<PAGE>
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<PAGE>
(This page intentionally left blank)
<PAGE>
Trustees and officers
Trustees
--------------------------------------------------------------------------------
Thomas W. Littauer
John W. Ballantine Donald L. Dunaway Trustee and Vice
Trustee Trustee President
--------------------------------------------------------------------------------
Lewis A. Burnham Robert B. Hoffman Shirley D. Peterson
Trustee Trustee Trustee
--------------------------------------------------------------------------------
Linda C. Coughlin Donald R. Jones William P. Sommers
Trustee Trustee Trustee
Officers
--------------------------------------------------------------------------------
Mark S. Casady Frank J. Rachwalski, Jr. Maureen E. Kane
President Vice President Assistant Secretary
--------------------------------------------------------------------------------
Philip J. Collora Linda J. Wondrack Caroline Pearson
Vice President and Vice President Assistant Secretary
Secretary
--------------------------------------------------------------------------------
Ann M. McCreary John R. Hebble Brenda Lyons
Vice President Treasurer Assistant Treasurer
--------------------------------------------------------------------------------
Kathryn L. Quirk
Vice President
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Legal Counsel Chicago, IL 60601
--------------------------------------------------------------------------------
Kemper Service Company
Shareholder Service P.O. Box 219151
Agent Kansas City, MO 64121-9151
--------------------------------------------------------------------------------
State Street Bank and Trust Company
225 Franklin Street
Custodian Boston, MA 02110
--------------------------------------------------------------------------------
State Street Bank and Trust Company
225 Franklin Street
Transfer Agent Boston, MA 02110
--------------------------------------------------------------------------------
Independent Ernst & Young LLP
Auditors 233 South Wacker Drive
Chicago, IL 60606
This report must be preceded or accompanied by [LOGO]
a Zurich Money Funds prospectus. ZURICH
Scudder Kemper Investments, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
www.zurichfunds.com
1-888-987-4241
