NEW YORK MUNICIPAL CASH TRUST
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of New York Municipal Cash Trust (the "Trust")
offered by this prospectus represent interests in a non-diversified portfolio of
securities (the "Fund"). The Trust is an open-end management investment company
(a mutual fund).
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY.
The investment objective of the Fund is to provide current income exempt from
federal regular income tax and the personal income taxes imposed by New York
State and New York municipalities consistent with stability of principal. The
Fund invests primarily in short-term New York municipal securities.
Institutional Service Shares are sold at net asset value.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information for
Institutional Service Shares and Cash II Shares dated December 31, 1993, with
the Securities and Exchange Commission. The information contained in the
Combined Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Combined Statement of Additional
Information free of charge by calling 1-800-235-4669. To obtain other
information, or make inquiries about the Fund, contact the Fund at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated December 31, 1993
TABLE OF CONTENTS
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SUMMARY OF FUND EXPENSES 1
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FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES 2
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GENERAL INFORMATION 3
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INVESTMENT INFORMATION 3
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Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Variable Rate Demand Notes 4
Participation Interests 4
Ratings 4
Credit Enhancement 5
Demand Features 5
Restricted and Illiquid Securities 5
When-Issued and Delayed Delivery
Transactions 5
Temporary Investments 5
New York Municipal Securities 6
Standby Commitments 6
New York Investment Risks 6
Non-Diversification 7
Investment Limitations 7
Regulatory Compliance 7
TRUST INFORMATION 8
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Management of the Trust 8
Board of Trustees 8
Investment Adviser 8
Advisory Fees 8
Adviser's Background 8
Distribution of Institutional Service Shares 9
Distribution Plan 9
Shareholder Servicing Arrangements 9
Administration of the Fund 9
Administrative Services 9
Custodian 10
Transfer Agent and Dividend
Disbursing Agent 10
Legal Counsel 10
Independent Auditors 10
Expenses of the Fund and
Institutional Service Shares 10
NET ASSET VALUE 10
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INVESTING IN INSTITUTIONAL SERVICE SHARES 11
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Share Purchases 11
By Wire 11
By Mail 11
Minimum Investment Required 11
What Shares Cost 11
Subaccounting Services 12
Certificates and Confirmations 12
Dividends 12
Capital Gains 12
REDEEMING INSTITUTIONAL SERVICE SHARES 12
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Telephone Redemption 12
Written Requests 13
Signatures 13
Receiving Payment 13
Redemption Before Purchase
Instruments Clear 13
Accounts with Low Balances 14
Redemption in Kind 14
SHAREHOLDER INFORMATION 14
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Voting Rights 14
Massachusetts Partnership Law 14
TAX INFORMATION 15
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Federal Income Tax 15
New York State Tax Considerations 16
Other State and Local Taxes 16
PERFORMANCE INFORMATION 16
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OTHER CLASSES OF SHARES 17
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Financial Highlights--Cash II Shares 18
FINANCIAL STATEMENTS 19
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INDEPENDENT AUDITORS' REPORT 37
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ADDRESSES INSIDE BACK COVER
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SUMMARY OF FUND EXPENSES--
INSTITUTIONAL SERVICE SHARES
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<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)......................................................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)......................................................... None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, as applicable)....................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)............................ None
Exchange Fee.................................................................................. None
ANNUAL INSTITUTIONAL SERVICE SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1)............................................................. 0.23%
12b-1 Fee (2)................................................................................. 0.08%
Other Expenses................................................................................ 0.23%
Total Institutional Service Shares Operating Expenses (3)................................. 0.54%
</TABLE>
(1)The management fee has been reduced to reflect the waiver of a portion of the
management fee. The maximum management fee is 0.40%.
(2)The maximum 12b-1 fee is 0.10%.
(3)The Total Institutional Service Shares Operating Expenses would have been
0.71% absent the waiver of a portion of the management fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN INSTITUTIONAL
SERVICE SHARES" AND "TRUST INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS
THAN $5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1)
5% annual return and (2) redemption at the end of each time period. As
noted in the table above, the Fund charges no redemption fee for
Institutional Service Shares............................................. $6 $17 $30 $68
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Institutional Service Shares of the Fund. The Fund offers another class of
shares called Cash II Shares. Institutional Service Shares and Cash II Shares
are subject to certain of the same expenses; however, Cash II Shares are subject
to a 12b-1 fee of 0.25%. See "Other Classes of Shares."
NEW YORK MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES
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(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Independent Auditors' Report on page 37.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
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Net investment income 0.02 0.03 0.04 0.05 0.06 0.05 0.04 0.04 0.05
- ---------------------------
LESS DISTRIBUTIONS
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Dividends to shareholders
from net investment
income (0.02) (0.03) (0.04) (0.05) (0.06) (0.05) (0.04) (0.04) (0.05)
- --------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN* 2.16% 3.01% 4.59% 5.51% 5.70% 4.66% 3.90% 4.35% 4.88%
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RATIOS/SUPPLEMENTAL DATA
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Ratio of expenses to
average net assets 0.54% 0.57% 0.52% 0.54% 0.55% 0.51% 0.47% 0.47% 0.47%
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Ratio of net investment
income to average net
assets 2.14% 2.99% 4.48% 5.36% 5.56% 4.57% 3.81% 4.18% 4.75%
- ---------------------------
Expense waiver/
reimbursement (a) 0.17% -- -- -- -- -- -- -- --
- ---------------------------
Net assets, end of period
(000 omitted) $274,357 $164,492 $191,616 $197,213 $245,542 $212,786 $141,040 $183,941 $83,085
- ---------------------------
<CAPTION>
1984
<S> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------
Net investment income 0.06
- ---------------------------
LESS DISTRIBUTIONS
- ---------------------------
Dividends to shareholders
from net investment
income (0.06)
- --------------------------- ---------
NET ASSET VALUE, END OF
PERIOD $ 1.00
- --------------------------- ---------
TOTAL RETURN* 5.94%
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RATIOS/SUPPLEMENTAL DATA
- ---------------------------
Ratio of expenses to
average net assets 0.12%
- ---------------------------
Ratio of net investment
income to average net
assets 5.65%
- ---------------------------
Expense waiver/
reimbursement (a) 0.36
- ---------------------------
Net assets, end of period
(000 omitted) $58,969
- ---------------------------
</TABLE>
* Based on net asset value, which does not reflect the sales load or
redemption fee, if applicable.
(a) This expense decrease is reflected in both the expense and net investment
income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
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The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated
March 17, 1982. The Declaration of Trust permits the Trust to offer separate
series of shares of beneficial interest representing interests in separate
portfolios of securities. The shares in any one portfolio may be offered in
separate classes. As of the date of this prospectus, the Trustees have
established two classes of shares of the Fund, known as Institutional Service
Shares and Cash II Shares. This prospectus relates only to Institutional Service
Shares of the Fund.
Institutional Service Shares ("Shares") of the Fund are designed primarily for
banks and other institutions that hold assets for individuals, trusts, estates,
or partnerships. A minimum initial investment of $25,000 over a 90-day time
period is required. The Fund may not be a suitable investment for non-New York
taxpayers or retirement plans since it invests primarily in New York municipal
securities.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
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INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal regular income tax and the personal income taxes imposed by New York
State and New York municipalities consistent with stability of principal.
Interest income of the Fund that is exempt from these income taxes retains its
tax-free status when distributed to the Fund's shareholders.
While there is no assurance that the Fund will achieve its investment objective,
it endeavors to do so by following the investment policies described in this
prospectus. The investment objective and the policies and limitations described
below cannot be changed without approval of shareholders. Income distributed by
the Fund may not necessarily be exempt from state or municipal taxes in states
other than New York.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing primarily in a portfolio
of short-term New York Municipal Securities (as defined below), with remaining
maturities of one year or less at the time of purchase by the Fund. The Fund
invests its assets so that at least 80% of its annual interest income is exempt
from federal regular, New York State, and New York municipal income taxes. The
average maturity of the securities in the Fund's portfolio, computed on a dollar
weighted basis, will be 120 days or less. As a matter of operating policy, the
Fund will limit the average maturity of portfolio securities to 90 days or less
to meet certain regulatory requirements.
ACCEPTABLE INVESTMENTS. The Fund invests primarily in debt obligations issued
by or on behalf of New York and its political subdivisions and financing
authorities, and obligations of other states, territories and possessions of the
United States, including the District of Columbia, and any political subdivision
or financing authority of any of these, the income from which is, in the opinion
of qualified legal counsel, exempt from both federal regular income tax and New
York state income tax imposed
upon non-corporate taxpayers ("Municipal Securities"). Examples of Municipal
Securities include, but are not limited to:
tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;
bond anticipation notes ("BANs") that are intended to be refinanced
through a later issuance of longer-term bonds;
municipal commercial paper and other short-term notes;
variable rate demand notes;
municipal bonds (including bonds having serial maturities and
pre-refunded bonds) and leases;
construction loan notes insured by the Federal Housing Administration and
financed by the Federal or Government National Mortgage Associations; and
participation, trust, and partnership interests in any of the foregoing
obligations.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term
Municipal Securities that have variable or floating interest rates and
provide the Fund with the right to tender the security for repurchase at
its stated principal amount plus accrued interest. Such securities
typically bear interest at a rate that is intended to cause the securities
to trade at par. The interest rate may float or be adjusted at regular
intervals (ranging from daily to annually), and is normally based on a
municipal interest index or a stated percentage of a prime rate or another
published rate. Most variable rate demand notes allow the Fund to demand
the repurchase of the security on not more than seven days prior notice.
Other notes only permit the Fund to tender the security at the time of each
interest rate adjustment or at other fixed intervals. See "Demand
Features." The Fund treats variable rate demand notes as maturing on the
later of the date of the next interest adjustment or the date on which the
Fund may next tender the security for repurchase.
PARTICIPATION INTERESTS. The Fund may purchase interests in Municipal
Securities from financial institutions such as commercial and investment
banks, savings and loan associations, and insurance companies. These
interests may take the form of participations, beneficial interests in a
trust, partnership interests, or any other form of indirect ownership that
allows the Fund to treat the income from the investment as exempt from
federal income tax. The Fund invests in these participation interests in
order to obtain credit enhancement or demand features that would not be
available through direct ownership of the underlying Municipal Securities.
RATINGS. The Municipal Securities in which the Fund invests must either be
rated in one of the two highest short-term rating categories by one or more
nationally recognized statistical rating organizations ("NRSROs") or be of
comparable quality to securities having such ratings. A NRSRO's two highest
rating categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard &
Poor's Corporation ("S&P"), MIG-1 or MIG-2 by Moody's Investors Service, Inc.
("Moody's"), or FIN-1+, FIN-1 and FIN-2 by Fitch Investors Service, Inc.
("Fitch") are all considered rated in one of the two highest short-term rating
categories. The Fund will follow applicable regulations in determining whether a
security rated by more than one NRSRO can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two NRSROs in one of their two highest categories. See "Regulatory
Compliance."
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may have been
credit enhanced by a guaranty, letter of credit, or insurance. The Fund
typically evaluates the credit quality and ratings
of credit enhanced securities based upon the financial condition and ratings of
the party providing the credit enhancement (the "credit enhancer"), rather than
the issuer. The bankruptcy, receivership, or default of the credit enhancer will
adversely affect the quality and marketability of the underlying security.
The Fund may have more than 25% of its total assets invested in securities
credit enhanced by banks.
DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
invest pursuant to its investment objective and policies, but which are subject
to restrictions on resale under federal securities laws. Under criteria
established by the Board of Trustees, certain restricted securities are
considered liquid. To the extent restricted securities are deemed to be
illiquid, the Fund will limit their purchase, together with other securities
considered to be illiquid, to 10% of its net assets.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase Municipal
Securities on a when-issued or delayed delivery basis. In when-issued and
delayed delivery transactions, the Fund relies on the seller to complete the
transaction. The seller's failure to complete the transaction may cause the Fund
to miss a price or yield considered to be advantageous.
TEMPORARY INVESTMENTS. From time to time on a temporary basis, or when the
investment adviser determines that market conditions call for a temporary
defensive posture, the Fund may invest in short-term temporary investments.
Interest income from temporary investments may be taxable to shareholders as
ordinary income. All temporary investments will satisfy the same credit quality
standards as the Fund's acceptable investments. See "Ratings" above. Temporary
investments include: obligations issued by or on behalf of municipal or
corporate issuers; marketable obligations issued or guaranteed by the U.S.
government, its agencies, or instrumentalities; instruments issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment;
repurchase agreements; and prime commercial paper rated A-1 by S&P, Prime-1 by
Moody's, or F-1 by Fitch.
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax
or personal income taxes imposed by New York and New York municipalities.
NEW YORK MUNICIPAL SECURITIES
New York Municipal Securities are generally issued to finance public works, such
as airports, bridges, highways, housing, hospitals, mass transportation
projects, schools, streets, and water and sewer
works. They are also issued to repay outstanding obligations, to raise funds for
general operating expenses, and to make loans to other public institutions and
facilities.
New York Municipal Securities include industrial development bonds issued by or
on behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.
The two principal classifications of Municipal Securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
STANDBY COMMITMENTS
Some securities dealers are willing to sell Municipal Securities to the Fund
accompanied by their commitments to repurchase the Municipal Securities prior to
maturity, at the Fund's option, for the amortized cost of the Municipal
Securities at the time of repurchase. These arrangements are not used to protect
against changes in the market value of Municipal Securities. They permit the
Fund, however, to remain fully invested and still provide liquidity to satisfy
redemptions. The cost of Municipal Securities accompanied by these "standby"
commitments could be greater than the cost of Municipal Securities without such
commitments. Standby commitments are not marketable or otherwise assignable and
have value only to the Fund. The default or bankruptcy of a securities dealer
giving such a commitment would not affect the quality of the Municipal
Securities purchased. However, without a standby commitment, these securities
could be more difficult to sell. The Fund enters into standby commitments only
with those dealers whose credit the investment adviser believes to be of high
quality.
NEW YORK INVESTMENT RISKS
Yields on New York Municipal Securities depend on a variety of factors,
including: the general conditions of the short-term municipal note market and of
the municipal bond market; the size of the particular offering; the maturity of
the obligations; and the rating of the issue. Further, any adverse economic
conditions or developments affecting the State or City of New York could impact
the Fund's portfolio. The ability of the Fund to achieve its investment
objective also depends on the continuing ability of the issuers of New York
Municipal Securities and demand features for such securities, or the credit
enhancers of either, to meet their obligations for the payment of interest and
principal when due. Investing in New York Municipal Securities which meet the
Fund's quality standards may not be possible if the State and City of New York
do not maintain their current credit ratings. An expanded discussion of the
current economic risks associated with the purchase of New York Municipal
Securities is contained in the Combined Statement of Additional Information.
NON-DIVERSIFICATION
The Fund is a non-diversified investment portfolio. As such, there is no limit
on the percentage of assets which can be invested in any single issuer. An
investment in the Fund, therefore, will entail greater risk than would exist in
a diversified investment company because the higher percentage of
investments among fewer issuers may result in greater fluctuation in the total
market value of the Fund's portfolio. Any economic, political, or regulatory
developments affecting the value of the securities in the Fund's portfolio will
have a greater impact on the total value of the portfolio than would be the case
if the portfolio were diversified among more issuers.
The Fund will attempt to minimize the risks associated with a non-diversified
portfolio so as not to impair its ability to stabilize its net asset value at
$1.00 per share by limiting, with respect to 75% of the Fund's total assets,
investments in one issuer to not more than 10% of the value of its total assets.
The total amount of the remaining 25% of the value of the Fund's total assets
would be invested in a single issuer if the investment adviser believes such a
strategy to be prudent. In addition, the Fund intends to comply with Subchapter
M of the Internal Revenue Code, as amended. This undertaking requires that at
the end of each quarter of the taxable year, the aggregate value of all
investments in any one issuer (except U.S. government obligations, cash, and
cash items) which exceed 5% of the Fund's total assets not exceed 50% of the
value of its total assets; beyond that, no more than 25% of its total assets are
invested in the securities of a single issuer.
INVESTMENT LIMITATIONS
The Fund will not:
borrow money or pledge securities except, under certain circumstances,
the Fund may borrow up to one-third of the value of its total assets and
pledge up to 10% of the value of total assets to secure such borrowings;
with respect to securities comprising 75% of its assets, invest more than
10% of its total assets in the securities of any one issuer;
invest more than 5% of its total assets in securities of issuers (or in
the alternative, guarantors, where applicable) that have records of less
than three years of continuous operations; or
commit more than 10% of its total assets to illiquid obligations,
including repurchase agreements with maturities longer than seven days.
Certain instruments in which the Fund may invest, such as certain
collateralized municipal notes, could be considered illiquid.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended. In particular, the Fund
will comply with the various requirements of Rule 2a-7, which regulates money
market mutual funds. The Fund will determine the effective maturity of its
investments, as well as its ability to consider a security as having received
the requisite short-term ratings by NRSROs, according to Rule 2a-7. The Fund may
change these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
TRUST INFORMATION
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MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Board of
Trustees is responsible for managing the business affairs of the Trust and for
exercising all the powers of the Trust except those reserved for the
shareholders. The Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Fund are made by Federated Management, the Fund's
investment adviser, subject to direction by the Trustees. The adviser
continually conducts investment research and supervision for the Fund and is
responsible for the purchase or sale of portfolio instruments, for which it
receives an annual fee from the Fund.
ADVISORY FEES. The Fund's adviser receives an annual investment advisory
fee equal to .40 of 1% of the Fund's average daily net assets. Under the
investment advisory contract, the adviser will reimburse the Fund the
amount, limited to the amount of the investment advisory fee, by which the
Fund's aggregate annual operating expenses, including its investment
advisory fee and organizational expenses, but excluding interest, taxes,
brokerage commissions, distribution fees paid pursuant to the Fund's Plan
adopted in accordance with Investment Company Act Rule
12b-1, expenses of registering and qualifying the Fund and its shares under
federal and state laws and regulations, expenses of withholding taxes, and
extraordinary expenses, exceed .45 of 1% of its average daily net assets.
(If the fee paid pursuant to the Rule 12b-1 Plan were included in the
calculation, the aggregate annual operating expenses of Shares would be
limited to .55 of 1%). This does not include reimbursement to the Fund of
any expenses incurred by shareholders who use the transfer agent's
subaccounting facilities. The adviser has also undertaken to reimburse the
Fund for operating expenses in excess of limitations established by certain
states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on
April 11, 1989, is a registered investment adviser under the Investment
Advisers Act of 1940. It is a subsidiary of Federated Investors. All of the
Class A (voting) shares of Federated Investors are owned by a trust, the
Trustees of which are John F. Donahue, Chairman and Trustee of Federated
Investors, Mr. Donahue's wife, and Mr. Donahue's son, J. Christopher
Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
DISTRIBUTION OF INSTITUTIONAL SERVICE SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service Shares. It is a Pennsylvania corporation organized on November 14, 1969,
and is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
DISTRIBUTION PLAN. Pursuant to the provisions of a distribution plan adopted in
accordance with Investment Company Act Rule 12b-1 (the "Plan"), the distributor
may select financial institutions (such as broker/dealers and depository
institutions, such as commercial banks and savings and loan associations) to
provide sales and administrative services as agents for their clients.
Administrative services may include, but are not limited to, the following
functions: providing office space, equipment, telephone facilities, and various
personnel including clerical, supervisory, computer, and other personnel as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client inquiries
regarding the Shares; assisting clients in changing dividend options; account
designations, and addresses; and providing such other services as the Fund
reasonably requests.
The distributor will pay administrators an annual fee not to exceed .10 of 1% of
the average daily net asset value of Shares owned by their clients or customers
for which they perform sales and administrative services. Any fees paid by the
distributor under the distribution plan will be reimbursed from the assets of
Shares of the Fund.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings and loan association) from being an underwriter or distributor
of securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the administrative capacities described
above or should Congress relax current restrictions on depository institutions,
the Board of Trustees will consider appropriate changes in the administrative
services.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state law.
SHAREHOLDER SERVICING ARRANGEMENTS. The distributor may also pay administrators
a fee based upon the average aggregate net asset value of their customers'
Shares for providing distribution and administrative services. This fee is in
addition to the amounts paid under the distribution plan for administrative
services, and, if paid, will be reimbursed by the adviser and not the Fund.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, Inc., a subsidiary
of Federated Investors, provides the Fund with the administrative personnel and
services necessary to operate the Fund. Such services include shareholder
servicing and certain legal and accounting services. Federated Administrative
Services, Inc. provides these at approximate cost.
CUSTODIAN. State Street Bank and Trust Company, Boston, Massachusetts, is
custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. _Federated Services Company,
Pittsburgh, Pennsylvania, is transfer agent for the shares of the Fund, and
dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro & Morin, Washington, D.C.
Special New York tax counsel to the Fund is White & Case, New York, New York.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Deloitte &
Touche, Boston, Massachusetts.
EXPENSES OF THE FUND AND INSTITUTIONAL SERVICE SHARES
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and continuing
its existence; registering the Trust with federal and state securities
authorities; Trustees' fees; auditors' fees; the cost of meetings of Trustees;
legal fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and shares of the Fund;
investment advisory services; taxes and commissions; custodian fees; insurance
premiums; auditors' fees; and such non-recurring and extraordinary items as may
arise.
At present, the only expenses allocated to the Shares as a class are expenses
under the Fund's 12b-1 Plan which relate to the Shares. However, the Board of
Trustees reserves the right to allocate certain other expenses to holders of
Shares as it deems appropriate ("Class Expenses"). In any case, Class Expenses
would be limited to: transfer agent fees as identified by the transfer agent as
attributable to holders of Shares; printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses,
and proxies to current shareholders; registration fees paid to the Securities
and Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares; and
Trustees' fees incurred as a result of issues relating solely to Shares.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of its Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net asset
value per Share is determined by adding the interest of the Shares in the value
of all securities and other assets of the Fund, subtracting the interest of the
Shares in the liabilities of the Fund and those attributable to Shares, and
dividing the remainder by the total number of Shares outstanding.
The Fund cannot guarantee that its net asset value will always remain at $1.00
per Share.
INVESTING IN INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve Wire System are open. Shares may be purchased either by wire or mail.
The Fund reserves the right to reject any purchase request.
To purchase Shares, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken over the telephone.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Fund before 3:00
P.M. (Boston time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 P.M. (Boston
time) that same day. Federal funds should be wired as follows: State Street Bank
and Trust Company, Boston, Massachusetts; Attention: EDGEWIRE; For Credit to:
New York Municipal Cash Trust--Institutional Service Shares; Fund Number (this
number can be found on the account statement or by contacting the Fund); Group
or Order Number; Nominee or Institution Name; ABA Number 011000028. Shares
cannot be purchased on days on which the New York Stock Exchange is closed and
on federal holidays restricting wire transfers.
BY MAIL. To purchase Shares by mail, send a check made payable to New York
Municipal Cash Trust--Institutional Service Shares to State Street Bank and
Trust Company, P.O. Box 8602, Boston, Massachusetts 02266-8602. Orders by mail
are considered received after payment by check is converted by State Street Bank
into federal funds. This is normally the next business day after State Street
Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000. However, an account may be
opened with a smaller amount as long as the $25,000 minimum is reached within 90
days. An institutional investor's minimum investment will be calculated by
combining all accounts it maintains with the Fund.
Individual accounts established through a non-affiliated bank or broker may be
subject to a different minimum investment requirement.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund.
The net asset value is determined at 12:00 noon (Boston time), 3:00 p.m. (Boston
time), and 4:00 p.m. (Boston time), Monday through Friday, except on: (i) days
on which there are not sufficient changes in the value of the Fund's portfolio
securities that its net asset value might be materially affected; (ii) days
during which no Shares are tendered for redemption and no orders to purchase
Shares are received; and (iii) the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements.
The transfer agent charges a fee based on the level of subaccounting services
rendered. Institutions holding Shares in a fiduciary, agency, custodial, or
similar capacity may charge or pass through subaccounting fees as part of or in
addition to normal trust or agency account fees. They may also charge fees for
other services provided which may be related to the ownership of Shares. This
prospectus should, therefore, be read together with any agreement between the
customer and the institution with regard to the services provided, the fees
charged for those services, and any restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund.
Monthly confirmations are sent to report transactions, such as purchases and
redemptions, as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Shares purchased by wire before
3:00 p.m. (Boston time) begin earning dividends that day. Shares purchased by
check begin earning dividends on the day after the check is converted, upon
instruction of the transfer agent, into federal funds. Dividends are
automatically reinvested on payment dates in additional Shares unless cash
payments are requested by contacting the Fund.
CAPITAL GAINS
Capital gains, if any, could result in an increase in dividends. Capital losses,
if any, could result in a decrease in dividends. If for some extraordinary
reason the Fund realizes net long-term or short-term capital gains, it will
distribute them at least once every 12 months.
REDEEMING INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Fund before 12:00 noon
(Boston time). Telephone redemption instructions may be recorded. The proceeds
will be wired the same day to the shareholder's account at a domestic commercial
bank that is a member of the Federal Reserve System. If, at any time, the Fund
shall determine it necessary to terminate or modify this method of redemption,
shareholders would be promptly notified.
A daily dividend will be paid on shares redeemed if the redemption request is
received after 12:00 noon (Boston time). However, the proceeds are not wired
until the following business day. Redemption requests received before 12:00 noon
(Boston time) will be paid the same day, but will not be entitled to that day's
dividend.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "Written Requests," should be considered. If
reasonable procedures are not followed by the Fund, it may be liable for losses
due to unauthorized or fraudulent telephone instructions.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Fund. Call the
Fund for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Fund name, his account number,
and the share or dollar amount requested. If share certificates have been
issued, they must be properly endorsed and should be sent by registered or
certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Fund, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
any other "eligible guarantor institution," as defined in the Seurities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
REDEMPTION BEFORE PURCHASE INSTRUMENTS CLEAR
When Shares are purchased by check, the proceeds from the redemption of those
shares are not available, and the shares may not be exchanged until the Fund or
its agents are reasonably certain that the purchase check has cleared, which
could take up to ten calendar days.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem Shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 due to
shareholder redemptions.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.
REDEMPTION IN KIND
The Trust is obligated to redeem shares solely in cash up to $250,000 or 1% of
the respective class' net asset value, whichever is less, for any one
shareholder within a 90-day period. To the extent available, such securities
will be readily marketable.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Trust will pay
all or a portion of the remainder of the redemption in portfolio instruments,
valued in the same way that net asset value is determined. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving their securities and selling them before their
maturity could receive less than the redemption value of their securities and
could incur certain transaction costs.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
all portfolios of the Trust have equal voting rights except that, in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote.
As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or the Fund's operation and for the election of Trustees
under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
shareholders of the Fund, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of its shareholders for acts or
obligations of the Trust. These documents require notice of this disclaimer to
be given in each agreement, obligation, or instrument the Trust or its Trustees
enter into or sign on behalf of the Fund.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required to use its property to protect or compensate
the shareholder. On request, the Trust will defend any claim made and pay any
judgment against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them from its assets.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act of 1986, dividends
representing net interest earned on some municipal bonds may be included in
calculating the federal individual alternative minimum tax or the federal
alternative minimum tax for corporations.
The alternative minimum tax, equal to up to 28% of alternative minimum taxable
income for individuals and 20% for corporations, applies when it exceeds the
regular tax for the taxable year. Alternative minimum taxable income is equal to
the regular taxable income of the taxpayer increased by certain "tax preference"
items not included in regular taxable income and reduced by only a portion of
the deductions allowed in the calculation of the regular tax.
The Tax Reform Act of 1986 treats interest on certain "private activity" bonds
issued after August 7, 1986, as a tax preference item for both individuals and
corporations. Unlike traditional governmental purpose municipal bonds, which
finance roads, schools, libraries, prisons, and other public facilities, private
activity bonds provide benefits to private parties. The Fund may purchase all
types of municipal bonds, including private activity bonds. Thus, should it
purchase any such bonds, a portion of the Fund's dividends may be treated as a
tax preference item.
In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends are included in a corporation's
"adjusted current earnings." The corporate alternative minimum tax treats 75% of
the excess of the taxpayer's pre-tax "adjusted current earnings" over the
taxpayer's alternative minimum taxable income as a tax preference item.
"Adjusted current earnings" is based upon the concept of a corporation's
"earnings and profits." Since "earnings and profits" generally includes the full
amount of any Fund dividend, and alternative minimum taxable income does not
include the portion of the Fund's dividend attributable to municipal bonds which
are not private activity bonds, the difference will be included in the
calculation of the corporation's alternative minimum tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional Shares. Information on the tax status of dividends and distributions
is provided annually.
NEW YORK STATE TAX CONSIDERATIONS
In the opinion of White & Case, special New York tax counsel to the Fund, income
to the Fund that is exempt from New York State personal income tax and personal
income taxes imposed by New York municipalities will retain its exempt status
when distributed to New York shareholders. Dividends of the Fund are not exempt
from the New York taxes payable by corporations.
OTHER STATE AND LOCAL TAXES
Distributions representing net interest received on tax-exempt municipal
securities are not necessarily free from regular state income taxes of any state
or local taxing authority. State laws differ on this issue, and shareholders are
urged to consult their own tax advisers regarding the status of their accounts
under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its yield, effective yield, and
tax-equivalent yield for Institutional Service Shares.
The yield of Institutional Service Shares represents the annualized rate of
income earned on an investment in Institutional Service Shares over a seven-day
period. It is the annualized dividends earned during the period on the
investment, shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but, when annualized, the income earned by an
investment in Institutional Service Shares is assumed to be reinvested daily.
The effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment. The tax-equivalent yield of
Institutional Service Shares is calculated similarly to the yield, but is
adjusted to reflect the taxable yield that Institutional Service Shares would
have had to earn to equal their actual yield, assuming a specific tax rate.
Advertisements and other sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value of
an investment in Institutional Service Shares after reinvesting all income
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
Yield, effective yield, and tax-equivalent yield will be calculated separately
for Institutional Service Shares and Cash II Shares. Because Institutional
Service Shares and Cash II Shares are subject to different 12b-1 fees, the
yield, effective yield, and tax-equivalent yield for each class of shares for
the same period will differ. Specifically, because the 12b-1 fee for Cash II
Shares exceeds the 12b-1 fee for Institutional Service Shares, the yield,
effective yield, and tax-equivalent yield for the same period will be lower than
that of Institutional Service Shares based upon the difference in the amount of
the 12b-1 fee.
From time to time, the Fund may advertise its performance using certain
reporting services and/or compare its performance to certain indices.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Cash II Shares are sold to corporations, municipalities, and individual accounts
seeking a high level of cash management services from the participating
institutions. Cash II Shares are sold at net asset value, without a sales
charge. Investments in Cash II Shares are also subject to a minimum initial
investment of $25,000.
Like Institutional Service Shares, Cash II Shares are distributed pursuant to a
12b-1 Plan adopted by the Trust. The distributor is paid a fee of .25 of 1% of
the average daily net assets of the Cash II Shares.
Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of shares
of the Fund is sold. The distributor may, in addition to fees paid pursuant to
the Rule 12b-1 Plan, pay an administrative fee to a financial institution or
broker for administrative services provided to the Institutional Service class.
Any fee paid by the distributor for administrative services will not be an
expense of the class but will be reimbursed to the distributor by the investment
adviser.
The difference between class expenses and distribution expenses borne by shares
of each respective class will cause the amount of dividends payable to a
particular class of shares to exceed the amount of dividends payable to another
class of shares whose distribution expenses are greater. Thus, because
Institutional Service Shares are subject to a lower 12b-1 fee than are Cash II
Shares, the Institutional Service Shares' dividends will exceed the dividends
for the Cash II Shares.
The stated advisory fee is the same for each class of shares.
NEW YORK MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--
CASH II SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Independent Auditors' Report on page 37.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C> <C>
1993 1992 1991*
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------
Net investment income 0.02 0.03 0.02
- ---------------------------------------------------------------------------- --------- --------- ---------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.02) (0.03) (0.02)
- ---------------------------------------------------------------------------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------
TOTAL RETURN** 1.98% 2.86% 2.20%
- ----------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------
Ratio of expenses to average net assets 0.71% 0.73% 0.46 (a)
- ----------------------------------------------------------------------------
Ratio of net investment income to average net assets 1.96% 2.46% 4.08 (a)
- ----------------------------------------------------------------------------
Expense waiver/reimbursement (b) 0.17% -- --
- ----------------------------------------------------------------------------
Net assets, end of period (000 om $58,884 $4,641 $56
- ----------------------------------------------------------------------------
</TABLE>
* For the period from April 25, 1991 (date of initial public investment) to
October 31, 1991.
** Based on net asset value which does not reflect the sales load or redemption
fee, if applicable.
(a) Computed on an annualized basis.
(b) This expense decrease is reflected in both the expense and net investment
income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--102.3%
- ------------------------------------------------------------------------------------
NEW YORK--1.01%
--------------------------------------------------------------------
$ 790,000 Amherst, NY, IDA Weekly VRDNs (Nanhardt/Alexander Inc.)/(Marine
Midland Bank LOC)/(Subject to AMT) A-2 $ 790,000
--------------------------------------------------------------------
620,000 Babylon, NY, IDA Weekly VRDNs (M. Goldfarb-My Florist)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 620,000
--------------------------------------------------------------------
3,500,000 Bethlehem, NY, 3.125% BANs, 3/1/94 NR(3) 3,503,683
--------------------------------------------------------------------
3,500,000 Binghamton, NY, 2.60% GO BANs, 5/20/94 NR(4) 3,502,800
--------------------------------------------------------------------
600,000 Campbell Savona, NY, 2.65% Central School District BANs, 3/11/94 NR 600,103
--------------------------------------------------------------------
4,700,000 Chautauqua County, NY, IDA Weekly VRDNs (Cliffstar Corp.)/(Union
Bank of Switzerland LOC)/
(Subject to AMT) P-1 4,700,000
--------------------------------------------------------------------
3,900,000 Chautauqua County, NY, IDA Weekly VRDNs (Mogen David Wine
Corp.)/(Mellon Bank N.A. LOC)/(Subject to AMT) P-1 3,900,000
--------------------------------------------------------------------
1,300,000 Colonie, NY, IDA Weekly VRDNs (Herbert S. Ellis)/ (Marine Midland
Bank N.A. LOC)/(Subject to AMT) A-2 1,300,000
--------------------------------------------------------------------
875,000 Colonie, NY, IDA Weekly VRDNs (Series 1988)/
(13 Green Mountain Drive)/(Marine Midland Bank N.A. LOC)/(Subject to
AMT) A-2 875,000
--------------------------------------------------------------------
2,000,000 Corning, NY, Community College, 3.00% RANS, 2/11/94 NR 2,002,076
--------------------------------------------------------------------
1,750,000 Cortland County, NY, IDA Weekly VRDNs (General Signal
Corp.)/(Wachovia Bank of Georgia N.A. LOC) A-1+ 1,750,000
--------------------------------------------------------------------
1,000,000 Dundee, NY, Central School District, 3.34% BANs,
12/7/93 NR 1,000,319
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 1,000,000 Dundee, NY, Central School District, 3.375% BANs (Yates & Schuyler
Counties), 12/7/93 NR $ 1,000,311
--------------------------------------------------------------------
4,600,000 Eastchester, NY, United Free School District, 3.00% TANs, 5/19/94 NR(3) 4,604,913
--------------------------------------------------------------------
1,440,000 Erie County, NY, IDA Weekly VRDNs (Data-Rex, Inc.)/ (Marine Midland
Bank N.A. LOC)/(Subject to AMT) A-2 1,440,000
--------------------------------------------------------------------
1,349,200 Fort Plain, NY, 2.74% BANs, 5/11/94 NR 1,349,680
--------------------------------------------------------------------
1,800,000 Franklin County, NY, IDA Weekly VRDNs (Series 1991A)/(KES
Chateaugay)/(Bank of Tokyo, Ltd. LOC) A-1+ 1,800,000
--------------------------------------------------------------------
1,500,000 Guilderland, NY, IDA Weekly VRDNs (Series 1993A)/ (Northeastern
Industrial Park, Inc.)/(Chemical Bank LOC) P-1 1,500,000
--------------------------------------------------------------------
1,900,000 Herkimer County, NY, IDA Weekly VRDNs (Granny's Kitchens,
Ltd.)/(Chemical Bank LOC)/(Subject to AMT) A-1 1,900,000
--------------------------------------------------------------------
10,975,000 Islip, NY, 3.125%, GO BANs, 11/20/93 NR(3) 11,010,998
--------------------------------------------------------------------
4,000,000 Islip, NY, 3.25% GO BANs, 11/12/93 NR(3) 4,000,292
--------------------------------------------------------------------
5,000,000 Longwood Central School District, NY, 3.25% TANs,
6/30/94 NR 5,004,798
--------------------------------------------------------------------
3,250,000 Lyons, NY, 2.43% Central School District BANs, 12/29/93 NR 3,250,150
--------------------------------------------------------------------
2,325,000 Madison County, NY, IDA Monthly VRDNs (Series 1989A)/(Upstate Metals
Corp.)/(Fleet Bank of New York, N.A. LOC)/(Subject to AMT) A-1 2,325,000
--------------------------------------------------------------------
15,000,000 Marine Midland, NY, Premium Tax-Exempt Bond & Loan Trust Weekly
VRDNs (Marine Midland Bank N.A. LOC) P-1 15,000,000
--------------------------------------------------------------------
3,295,000 Mechanicville and Town of Stillwater, NY, IDA Weekly VRDNs (1987
Tagsons Paper, Inc.)/(Marine Midland Bank N.A. LOC)/(Subject to AMT) A-2 3,295,000
--------------------------------------------------------------------
3,640,000 Monroe County, NY, 3.00% RANs, 4/29/94 NR(3) 3,644,218
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 6,300,000 Monroe County, NY, IDA Monthly VRDNs (Neu Lac DeVille Associates,
Inc.)/(Fleet Bank of New York,
N.A., LOC) A-1 $ 6,300,000
--------------------------------------------------------------------
3,000,000 Nassau County, NY, 3.25% BANs, 8/15/94 SP-1 3,005,724
--------------------------------------------------------------------
10,000,000 Nassau County, NY, 3.35% GO Notes (Sakura Bank, Ltd. LOC), 4/15/94 SP-1 10,028,749
--------------------------------------------------------------------
3,500,000 Nassau County, NY, 3.75% GO BANs (Series 1993A)/ (Mitsubishi Bank,
Ltd. LOC), 11/15/93 MIG1 3,501,645
--------------------------------------------------------------------
725,000 Nassau County, NY, IDA Weekly VRDNs (465 Endo Associates)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 725,000
--------------------------------------------------------------------
1,512,495 Nassau County, NY, IDA Weekly VRDNs (D.L. Blair Corp.)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit Co. BPA) P-1 1,512,495
--------------------------------------------------------------------
1,950,000 Nassau County, NY, IDA Weekly VRDNs (R.M. Pascucci Corp.)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 1,950,000
--------------------------------------------------------------------
5,500,000 New Rochelle, NY, IDA Weekly VRDNs (Charles Sadek Import Co.)/(Bank
of New York LOC) P-1 5,500,000
--------------------------------------------------------------------
3,700,000 New York City HDC Weekly VRDNs (Series 1993A)/
(Columbus Gardens)/(Citibank N.A. LOC) A-1 3,700,000
--------------------------------------------------------------------
6,000,000 New York City Municipal Water Finance Authority Weekly VRDNs (Series
1992A)/(MBIA Insured) VMIG1 6,000,000
--------------------------------------------------------------------
3,000,000 New York City Municipal Water Finance Authority, 2.45% Semi-Annual
TOBs (MBIA Insured), Optional Tender
12/15/93 NR(1) 3,000,000
--------------------------------------------------------------------
2,500,000 New York City, NY, 3.50% RANs, 4/15/94 SP-1 2,507,551
--------------------------------------------------------------------
416,667 New York City, NY, IDA Weekly VRDNs (David Rosen Bakers Supply,
Inc.)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 416,667
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 466,688 New York City, NY, IDA Weekly VRDNs (Feature Enterprise)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor
Credit BPA) P-1 $ 466,688
--------------------------------------------------------------------
626,668 New York City, NY, IDA Weekly VRDNs (Lomar Development
Corp.)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 626,668
--------------------------------------------------------------------
1,100,000 New York City, NY, IDA Weekly VRDNs (Mindel Associates)/(Chemical
Bank LOC)/(Subject to AMT) A-1 1,100,000
--------------------------------------------------------------------
297,929 New York City, NY, IDA Weekly VRDNs (MLN Associates)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 297,929
--------------------------------------------------------------------
1,900,000 New York City, NY, IDA Weekly VRDNs Special Facility Revenue Bonds
(Series 1990)/(Air France)/(Societe Generale LOC)/(Subject to AMT) A-1+ 1,900,000
--------------------------------------------------------------------
4,000,000 New York State Dormitory Authority Weekly VRDNs
(Series 1993A)/(Metropolitan Museum of Art Guaranty) A-1+ 4,000,000
--------------------------------------------------------------------
7,115,000 New York State Dormitory Authority Weekly VRDNs
(Series 1993B)/(Metropolitan Museum of Art Guaranty) A-1+ 7,115,000
--------------------------------------------------------------------
2,800,000 New York State Dormitory Authority, 2.60% CP (Series
1989A)/(Sloan-Kettering Memorial Cancer Center)/(Fuji Bank, Ltd.
LOC), Mandatory Tender 1/19/94 A-1 2,800,000
--------------------------------------------------------------------
1,100,000 New York State Energy Research & Development Authority, 2.50% TOBs
(Series 1985A)/(Long Island Lighting Co.)/(Deutsche Bank AG LOC),
Mandatory Tender 3/1/94 VMIG1 1,100,000
--------------------------------------------------------------------
7,395,000 New York State Energy Research & Development Authority, 3.10%
(Rochester Gas & Electric Co.)/(Westpac Banking Corp. LOC), Optional
Tender 11/15/93 A-1 7,395,000
--------------------------------------------------------------------
7,000,000 New York State Energy Research & Development, 2.50% Annual TOBs (New
York State Electrical & Gas)/(Morgan Bank, Delaware LOC), 3/15/94 P-1 7,000,000
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 8,000,000 New York State Floating Rate Trust Certificate Weekly VRDNs (Series
144A)/(AMBAC Insured) A-1+ $ 8,030,000
--------------------------------------------------------------------
1,000,000 New York State HFA Weekly VRDNs (Normandie Corp.)/ (Bankers Trust
Company LOC)/(Subject to AMT) VMIG1 1,000,000
--------------------------------------------------------------------
13,920,000 New York State HFA Weekly VRDNs (Special Surgery Hospital)/(Chemical
Bank LOC) VMIG1 13,920,000
--------------------------------------------------------------------
1,445,000 New York State Job Development Authority Weekly VRDNs (New York
State, Guaranty)/(Subject to AMT) VMIG1 1,445,000
--------------------------------------------------------------------
1,745,000 New York State Job Development Authority Weekly VRDNs (Sumitomo
Bank, Ltd. LOC)/(Subject to AMT) VMIG1 1,745,000
--------------------------------------------------------------------
8,000,000 New York State Medical Care Facilities Finance Agency Weekly VRDNs
(Series 1993G)/(St. Luke's-Roosevelt Hospital Center)/(FHA Insured,
Hong Kong & Shanghai
Banking Corp. BPA) A-1+ 8,000,000
--------------------------------------------------------------------
8,000,000 New York State Power Authority VRDC Trust Certificates Weekly VRDNs
(Series 1993H) A-1+ 8,000,000
--------------------------------------------------------------------
6,300,000 New York State, 2.50% CP (Series N), Mandatory Tender 1/13/94 A-1 6,300,000
--------------------------------------------------------------------
13,000,000 New York State, 2.75% TRANs, 12/31/93 SP-1+ 13,010,483
--------------------------------------------------------------------
6,000,000 Niagara County, NY, 3.25% BANs, 9/16/94 NR 6,017,754
--------------------------------------------------------------------
3,000,000 Niagara County, NY, IDA Weekly VRDNs (Allegheny Ludlum Steel
Corp.)/(PNC Bank N.A. LOC) A-1 3,000,000
--------------------------------------------------------------------
3,700,000 Niagara Falls, NY, Toll Bridge System Revenue Bonds Weekly VRDNs
(Series 1993A)/(FGIC Insured, Industrial Bank of Japan, Ltd. BPA) A-1+ 3,700,000
--------------------------------------------------------------------
923,000 Northville, NY, 2.78% Central School District BANs,
6/17/94 NR(4) 923,445
--------------------------------------------------------------------
1,725,000 Onondaga County, NY, IDA Weekly VRDNs (W.W.
Grainger, Inc.) A-1+ 1,725,000
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 1,240,000 Onondaga County, NY, IDA Weekly VRDNs (Beverage Corp.)/(Marine
Midland Bank N.A. LOC)/(Subject to AMT) A-2 $ 1,240,000
--------------------------------------------------------------------
1,175,000 Onondaga County, NY, IDA Weekly VRDNs (Series 1987)/(Southern
Container Corp.)/(Chemical Bank LOC)/ (Subject to AMT) VMIG1 1,175,000
--------------------------------------------------------------------
1,600,000 Ontario, NY, IDA Weekly VRDNs (Hillcrest Enterprises/ Buckey
Corrugated, Inc. Facility)/(National City Bank, Cleveland
LOC)/(Subject to AMT) P-1 1,600,000
--------------------------------------------------------------------
5,700,000 Oswego County, NY, IDA Weekly VRDNs (Copperweld Co.)/(PNC Bank, N.A.
LOC) P-1 5,700,000
--------------------------------------------------------------------
7,300,000 Plainview--Old Bethpage, NY, 3.00% TANs, 6/29/94 NR 7,299,678
--------------------------------------------------------------------
3,000,000 Port Authority of New York and New Jersey Special Project Bonds
Weekly VRDNs (Series 3)/(KIAC Partners)/ (Subject to AMT)/(Deutsche
Bank AG LOC) A-1+ 3,000,000
--------------------------------------------------------------------
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs A-1+ 15,000,000
--------------------------------------------------------------------
1,000,000 Port Authority of New York and New Jersey Weekly VRDNs (Series
1991-4)/(Subject to AMT) P-1 1,000,000
--------------------------------------------------------------------
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs (Subject to
AMT) A-1+ 15,000,000
--------------------------------------------------------------------
5,000,000 Rochester, NY, 3.05% GO BANs, 11/5/93 NR(2) 5,000,010
--------------------------------------------------------------------
886,875 Schenectady, NY, IDA Weekly VRDNs (McClellan Street
Associates)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor
Credit BPA) P-1 886,875
--------------------------------------------------------------------
960,000 Schuylerville, NY, Central School District, 2.74% BANs, 6/22/94 NR 960,534
--------------------------------------------------------------------
4,200,000 South Seneca, NY, Central School District, 2.65% BANs, 6/24/94 NR 4,201,301
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 1,000,000 Suffolk County, NY, 3.00% TANs (Series II)/
(Chemical Bank LOC) 9/15/94 MIG1 $ 1,001,270
--------------------------------------------------------------------
3,998,000 Suffolk County, NY, 3.25% RANs, 10/28/94 NR 4,013,343
--------------------------------------------------------------------
4,200,000 Suffolk County, NY, IDA Weekly VRDNs (C & J Realty Corp.)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 4,200,000
--------------------------------------------------------------------
725,833 Suffolk County, NY, IDA Weekly VRDNs (CS Property/ Tara Toy,
Inc.)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 725,834
--------------------------------------------------------------------
704,000 Suffolk County, NY, IDA Weekly VRDNs (D.A. Yaron)/ (Dai-Ichi Kangyo
Bank, Ltd. LOC, Ford Motor Credit BPA)/(Subject to AMT) P-1 704,000
--------------------------------------------------------------------
1,350,000 Suffolk County, NY, IDA Weekly VRDNs (Poly Research Corp.)/(Marine
Midland Bank N.A. LOC)/(Subject to AMT) A-2 1,350,000
--------------------------------------------------------------------
1,800,000 Suffolk County, NY, IDA, 3.90% Semi-Annual TOBs (W.W. Grainger, Inc.
Guaranty) Optional Tender 12/1/93 A-1+ 1,800,000
--------------------------------------------------------------------
6,495,000 Warren & Washington Counties, NY, IDA, Monthly VRDNs (Sandy Hill
Corp.)/(Fleet Bank of New York N.A. LOC)/(Subject to AMT) A-1 6,495,000
--------------------------------------------------------------------
2,500,000 Waterville, NY, Central School District, 2.75% BANs,
4/15/94 NR(3) 2,500,542
--------------------------------------------------------------------
1,665,000 Yates County, NY, IDA, Weekly VRDNs (Series 1992A)/ (Clearplass
Containers, Inc.)/(Norstar Bank of Upstate NY LOC)/(Subject to AMT) A-1 1,665,000
--------------------------------------------------------------------
4,000,000 Yonkers, NY, IDA Weekly VRDNs (Consumers Union
Facility)/(Industrial Bank of Japan Ltd. LOC) VMIG1 4,000,000
-------------------------------------------------------------------- ---------------
Total 334,953,526
-------------------------------------------------------------------- ---------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
PUERTO RICO--2.2%
--------------------------------------------------------------------
$ 3,100,000 Government Development Bank of Puerto Rico Weekly VRDNs (Credit
Suisse and Sumitomo Bank Ltd., LOCs) A-1+ $ 3,100,000
--------------------------------------------------------------------
4,275,000 Puerto Rico Industrial Medical and Environmental
Pollution Control Facilities Authority, 3.35% Annual
TOBs, (American Home Products Guaranty), Optional
Tender 12/1/93 P-1 4,275,000
-------------------------------------------------------------------- ---------------
Total 7,375,000
-------------------------------------------------------------------- ---------------
TOTAL INVESTMENTS, AT AMORTIZED COST $ 342,328,526\
-------------------------------------------------------------------- ---------------
</TABLE>
* See Notes to Portfolio of Investments.
\ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($333,241,974) at October 31, 1993.
The following abbreviations may be used in this portfolio:
AMBAC--American Municipal Bond
Assurance Corporation
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
BPA--Bond Purchase Agreement
CP--Commercial Paper
FGIC--Financial Guaranty Insurance Company
FHA--Federal Housing Administration
GO--General Obligation
HDC--Housing Development Corporation
HFA--Housing Finance Authority/Agency
IDA--Industrial Development Authority
LOC--Letter of Credit
LOCs--Letters of Credit
MBIA--Municipal Bond Investors Assurance
RANs--Revenue Anticipation Notes
TANs--Tax Anticipation Notes
TOBs--Tender Option Bonds
TRANs--Tax and Revenue Anticipation Notes
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
NOTE RATINGS
S&P
A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S
Moody's short-term ratings are designated Moody's Investment Grade (MIG OR VMIG
(SEE BELOW)). The purpose of the MIG of VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDN)
AND
TENDER OPTION BONDS (TOB)
S&P
Standard & Poor's assigns dual ratings to all long-term debt issues that have as
part of their provisions a variable rate demand feature. The first rating
(long-term rating) addresses the likelihood of repayment of principal and
interest when due, and the second rating (short-term rating) describes the
demand characteristics. Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The
definitions for the long-term and the short-term ratings are provided below.)
MOODY'S
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the second representing an evaluation of
the degree of risk associated with the demand feature. The VMIG
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
rating can be assigned a 1 or 2 designation using the same definitions described
above for the MIG rating.
COMMERCIAL PAPER (CP)
S&P
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
A-1 This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
A-2 Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated "A-1".
MOODY'S
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations.
LONG TERM DEBT
S&P
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
MOODY'S
Aaa Bonds that are rated AAA are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large margin and principal
is secure. While the various protective elements are likely to change, such
changes which can be foreseen are most unlikely to impair the fundamentally
strong position of such issues.
Aa Bonds that are rated AA are judged to be of high quality by all standards.
Together with the AAA group they comprise what are generally known as high
grade bonds. They are rated lower than the
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
best bonds because margins of protection may not be as large as in AAA
securities or fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term risks appear
somewhat larger than in AAA securities.
A Bonds that are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment some time in the future.
*Those securities marked with a single asterisk (*) in the Fund's portfolio have
not been rated by Moody's or S&P, but the rating given is either the Moody's or
S&P rating assigned to either short-term or long-term securities of the
guarantor.
NR indicates the bonds or notes are not rated by Moody's or Standard & Poor's.
(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by Standard & Poor's or "Aaa" by Moody's.
(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by Standard & Poor's or "Aa" by Moody's.
(3) The underlying issuer/obligor/guarantor has other outstanding debt rated "A"
by Standard & Poor's or Moody's.
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 1A) $ 342,328,526
- ------------------------------------------------------------------------------------------------
Cash 501,180
- ------------------------------------------------------------------------------------------------
Interest receivable 2,105,676
- ------------------------------------------------------------------------------------------------ ---------------
Total assets 344,935,382
- ------------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------------
Payable for investments purchased $ 11,010,998
- --------------------------------------------------------------------------------
Dividends payable 494,123
- --------------------------------------------------------------------------------
Accrued expenses and other liabilities 188,287
- -------------------------------------------------------------------------------- --------------
Total liabilities 11,693,408
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSETS for 333,259,904 shares of beneficial interest outstanding $ 333,241,974
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------
Paid-in capital $ 333,259,904
- ------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (17,930)
- ------------------------------------------------------------------------------------------------ ---------------
Total $ 333,241,974
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share--Institutional Service Shares
($274,357,415 / 274,375,542 shares of beneficial interest outstanding) $1.00
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share--Cash II Shares ($58,884,559 /
58,884,362 shares of beneficial interest outstanding) $1.00
- ------------------------------------------------------------------------------------------------ ---------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest Income (Note 1B) $ 7,135,989
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 1,065,970
- ------------------------------------------------------------------------------------
Trustees' fees 13,454
- ------------------------------------------------------------------------------------
Administrative personnel and services (Note 4) 329,428
- ------------------------------------------------------------------------------------
Custodian, transfer, dividend disbursing agent fees and expenses 169,411
- ------------------------------------------------------------------------------------
Distribution Services fees (Note 4) 264,066
- ------------------------------------------------------------------------------------
Trust share registration costs 28,939
- ------------------------------------------------------------------------------------
Legal fees 24,897
- ------------------------------------------------------------------------------------
Auditing fees 18,046
- ------------------------------------------------------------------------------------
Printing and postage 24,896
- ------------------------------------------------------------------------------------
Taxes 403
- ------------------------------------------------------------------------------------
Insurance premiums 10,078
- ------------------------------------------------------------------------------------
Miscellaneous 2,987
- ------------------------------------------------------------------------------------ -------------
Total expenses 1,952,575
- ------------------------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 460,455
- -----------------------------------------------------------------------
Waiver of distribution services fees (Note 4) 313 460,768
- ----------------------------------------------------------------------- ----------- -------------
Net expenses 1,491,807
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 5,644,182
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments--identified cost basis 1,437
- --------------------------------------------------------------------------------------------------- -------------
Net increase in net assets resulting from operations $ 5,645,619
- --------------------------------------------------------------------------------------------------- -------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1993 1992
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------------
Net investment income $ 5,644,182 $ 6,217,219
- -----------------------------------------------------------------------------
Net realized gain on investments--identified cost basis 1,437 1,089
- ----------------------------------------------------------------------------- ---------------- ----------------
Net increase in net assets resulting from operations 5,645,619 6,218,308
- ----------------------------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2)--
- -----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Institutional Service Shares (4,957,980) (5,805,237)
- -----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Cash Series Shares (2,054) (362,632)
- -----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Cash II Shares (684,148) (49,350)
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets resulting from distributions (5,644,182) (6,217,219)
- ----------------------------------------------------------------------------- ---------------- ----------------
TRUST SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -----------------------------------------------------------------------------
Proceeds from sales of shares 705,610,755 454,674,027
- -----------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 903,326 660,253
- -----------------------------------------------------------------------------
Cost of shares redeemed (553,583,683) (479,066,956)
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from Trust share transactions 152,930,398 (23,732,676)
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets 152,931,835 (23,731,587)
- -----------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------
Beginning of period 180,310,139 204,041,726
- ----------------------------------------------------------------------------- ---------------- ----------------
End of period $ 333,241,974 $ 180,310,139
- ----------------------------------------------------------------------------- ---------------- ----------------
(See Notes which are an integral part of the Financial Statements
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1993
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Trust is registered under the Investment Company Act of 1940, as amended, as
a non-diversified, open-end, management investment company. The following is a
summary of significant accounting policies consistently followed by the Trust in
the preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
New York Municipal Cash Trust provides two classes of shares ("Institutional
Service Shares" and "Cash II Shares"). Each class of shares is sold pursuant to
a distribution plan ("Plan") adopted in accordance with Investment Company Act
Rule 12b-1. Prior to August 27, 1992, the Trust had provided a third class of
shares ("Cash Series Shares"). On that date the Board of Trustees voted to
reduce the 12b-1 fee of the Cash Series Shares to 0.25 of 1% of average daily
net assets, and to combine these shares with Cash II Shares, both effective
November 9, 1992.
A. VALUATION OF INVESTMENTS--The Board of Trustees (the "Trustees") has
determined that the best method currently available for valuing portfolio
securities is amortized cost. The Trust's use of the amortized cost method
to value its portfolio securities is conditioned on its compliance with
Rule 2a-7 under the Investment Company Act of 1940, as amended.
Since the New York Municipal Cash Trust may invest a substantial portion of
its assets in issuers located in one state, it will be more susceptible to
factors adversely affecting issuers of that state, than would be a
comparable general tax-exempt mutual fund. In order to reduce the risk
associated with such factors, at October 31, 1993, 59.4% of the securities
in the portfolio were backed by various letters of credit. The aggregate by
financial institution ranges from 0.29% to 7.39% of total investments.
B. INCOME--Interest income is recorded on the accrual basis. Interest income
includes interest earned net of premium, and original issue discount as
required by the Internal Revenue Code.
C. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of
the Internal Revenue Code, as amended, (the "Code") applicable to
investment companies and to distribute to shareholders each year all of its
taxable income. Accordingly, no provision for federal income or excise tax
is necessary. Dividends paid by the Trust representing net interest
received on tax-exempt municipal securities are not includable by
shareholders as gross income for federal tax purposes because the Trust
intends to meet certain requirements of the Code applicable to regulated
investment companies which will enable the Trust to pay exempt interest
dividends. The portion of such interest, if any, earned on private activity
bonds issued after August 7, 1986, may be considered a tax preference item
to shareholders. At October 31, 1993, the Trust, for federal tax purposes,
has a capital loss carryforward of $17,930 which will reduce the Trust's
taxable income arising from future net realized gains on investments, if
any, to the extent permitted by the Code, and thus will reduce the amount
of the distributions to shareholders which would otherwise be necessary to
relieve the Trust of any liability for federal tax. Pursuant to the Code,
such capital loss carryforward will expire in 1996.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. To the extent the Trust
engages in such transactions, it will do so for the purposes of acquiring
portfolio securities consistent with its investment objectives and policies
and not for the purpose of investment leverage. The Trust will record a
when-issued security and the related liability on the trade date. Until the
securities are received and paid for, the Trust will maintain security
positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued
or delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
E. OTHER--Investment transactions are accounted for on the date of the
transaction.
F. EXPENSES--Expenses of the Fund (other than distribution services fees) and
waivers and reimbursements, if any, are allocated to each class of shares
based on its relative daily average net assets.
(2) DIVIDENDS
The Trust computes its net income daily and, immediately prior to the
calculation of its net asset value at the close of business, declares and
records dividends to shareholders of record at the time of the previous
computation of the Trust's net asset value. Payment of dividends is made monthly
in cash or in additional shares at the net asset value on the payable date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1993 1992
- -------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares outstanding, beginning of period 164,491,602 191,616,115
- --------------------------------------------------------------------------------
Shares sold 547,195,442 422,241,067
- --------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 399,406 301,103
- --------------------------------------------------------------------------------
Shares redeemed (437,710,908) (449,666,683)
- -------------------------------------------------------------------------------- --------------- ---------------
Shares outstanding, end of period 274,375,542 164,491,602
- -------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CASH SERIES SHARES* 1993 1992
- -------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares outstanding, beginning of period 11,196,839 12,390,511
- --------------------------------------------------------------------------------
Shares sold 34,712 20,649,454
- --------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared -- 357,566
- --------------------------------------------------------------------------------
Shares redeemed -- (22,200,692)
- --------------------------------------------------------------------------------
Shares exchanged for Cash II Shares (11,231,551) --
- -------------------------------------------------------------------------------- --------------- ---------------
Shares outstanding, end of period -- 11,196,839
- -------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CASH II SHARES* 1993 1992
- -------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares outstanding, beginning of period 4,641,065 55,556
- --------------------------------------------------------------------------------
Shares sold 147,149,050 11,783,506
- --------------------------------------------------------------------------------
Shares issued in exchange for Cash Series Shares 11,231,551
- --------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 503,920 1,584
- --------------------------------------------------------------------------------
Shares redeemed (104,641,224) (7,199,581)
- -------------------------------------------------------------------------------- --------------- ---------------
Shares outstanding, end of period 58,884,362 4,641,065
- -------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
*_ Beginning November 9, 1992, the Rule 12b-1 fee for Cash Series Shares was
reduced to 0.25 of 1% of average daily net assets, and these shares were
combined with Cash II Shares.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Federated Management, the Trust's investment adviser ("Adviser"), receives for
its services an annual investment advisory fee equal to .40 of 1% of the Trust's
average daily net assets, subject to an undertaking to reimburse the Trust to
the extent of its advisory fee, the amount, if any, by which the Trust's
aggregate annual operating expenses (excluding interest, taxes, brokerage
commissions, distribution service fees paid directly by the Trust, federal and
state registration expenses, and extraordinary expenses) exceed .45 of 1% of
average daily net assets. For the year ended October 31, 1993, Adviser earned an
investment advisory fee of $1,065,970 of which $460,455 was waived.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Trust will reimburse Federated
Securities Corp., ("FSC"), the principal distributor, from assets of the Trust,
for fees it paid which relate to the distribution and administration of the
Trust's Institutional Service Shares, Cash Series Shares, and Cash II Shares.
The Plan provides that the Trust may incur distribution expenses up to .10 of 1%
of the average daily net assets of the Trust's Institutional Service Shares, .50
of 1% of the average daily net assets of the Cash Series Shares, and .25 of 1%
of the average daily net assets of the Cash II Shares, annually, to pay
commissions, maintenance fees and to compensate the distributor. During the year
ended October 31, 1993, FSC was
paid $176,146 in distribution services fees for Institutional Service Shares and
$625 for Cash Series Shares of which $313 was voluntarily waived. The Cash II
Series Shares incurred $87,295 of distribution fees, none of which was waived.
Administrative personnel and services were provided at approximate cost by
Federated Administrative Services Inc. Certain of the Officers and Trustees of
the Trust are Officers and Directors of the above corporations.
During the year ended October 31, 1993 the Trust engaged in purchase and sale
transactions with other funds advised by the adviser pursuant to rule 17A-7 of
the Investment Company Act of 1940 amounting to $245,475,568 and $235,041,393,
respectively. These purchases and sales were conducted on an arms-length basis
insofar as they were transacted for cash consideration only, at independent
current market prices and without brokerage commission, fee or other
remuneration.
(5) CURRENT CREDIT RATINGS
Current credit ratings and related notes are unaudited.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
NEW YORK MUNICIPAL CASH TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of New York Municipal Cash Trust as of October 31,
1993, the related statement of operations for the year then ended, the statement
of changes in net assets for the years ended October 31, 1993 and 1992, and the
financial highlights (see pages 2 and 18 of the prospectus) for each of the
years in the ten-year period ended October 31, 1993. These financial statements
and financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
October 31, 1993 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of New York Municipal
Cash Trust as of October 31, 1993, the results of its operations, the changes in
its net assets, and its financial highlights for the respective stated periods
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
Boston, Massachusetts
December 17, 1993
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
New York Municipal Cash Trust Federated Investors Tower
Institutional Service Shares Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ---------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin 2101 L Street, N.W.
Washington, D.C. 20037
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
White & Case 1155 Avenue of the Americas
New York, New York 10036
- ---------------------------------------------------------------------------------------------------------------------
Independent Auditor
Deloitte & Touche 125 Summer Street
Boston, Massachusetts 02110-1617
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL
CASH TRUST
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A Non-Diversified Portfolio of New York
Municipal Cash Trust, an Open-End
Management Investment Company
December 31, 1993
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
8120103A-ISS (12/93)
NEW YORK MUNICIPAL CASH TRUST
CASH II SHARES
PROSPECTUS
The Cash II Shares of New York Municipal Cash Trust (the "Trust") offered by
this prospectus represent interests in a non-diversified portfolio of securities
(the "Fund"). The Trust is an open-end management investment company (a mutual
fund).
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
The shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank, and are not insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency.
The investment objective of the Fund is to provide current income exempt from
federal regular income tax and the personal income taxes imposed by New York
State and New York municipalities consistent with stability of principal. The
Fund invests primarily in short-term New York municipal securities. Cash II
Shares are sold at net asset value.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information for Cash
II Shares and Institutional Service Shares dated December 31, 1993, with the
Securities and Exchange Commission. The information contained in the Statement
of Additional Information is incorporated by reference into this prospectus. You
may request a copy of the Combined Statement of Additional Information free of
charge by calling 1-800-235-4669. To obtain other information, or make inquiries
about the Fund, contact the Fund at the address listed in the back of this
prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated December 31, 1993
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--CASH II SHARES 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 4
Variable Rate Demand Notes 4
Participation Interests 4
Ratings 4
Credit Enhancement 5
Demand Features 5
Restricted and Illiquid Securities 5
When-Issued and Delayed Delivery
Transactions 5
Temporary Investments 5
New York Municipal Securities 6
Standby Commitments 6
New York Investment Risks 6
Non-Diversification 7
Investment Limitations 7
Regulatory Compliance 8
TRUST INFORMATION 8
- ------------------------------------------------------
Management of the Trust 8
Board of Trustees 8
Investment Adviser 8
Advisory Fees 8
Adviser's Background 8
Distribution of Cash II Shares 9
Distribution Plan 9
Shareholder Servicing Arrangements 10
Administration of the Fund 10
Administrative Services 10
Custodian 10
Transfer Agent and Dividend
Disbursing Agent 10
Legal Counsel 10
Independent Auditors 10
Expenses of the Fund and
Cash II Shares 10
NET ASSET VALUE 11
- ------------------------------------------------------
INVESTING IN CASH II SHARES 11
- ------------------------------------------------------
Share Purchases 11
Through a Financial Institution 11
Directly from the Distributor 11
Minimum Investment Required 11
What Shares Cost 12
Subaccounting Services 12
Systematic Investment Program 12
Certificates and Confirmations 12
Dividends 12
Capital Gains 13
REDEEMING CASH II SHARES 13
- ------------------------------------------------------
Through a Financial Institution 13
Receiving Payment 13
By Check 13
By Wire 13
Directly from the Fund 14
By Mail 14
Signatures 14
Checkwriting 14
Debit Card 14
Redemption Before Purchase
Instruments Clear 14
Systematic Withdrawal Program 15
Accounts with Low Balances 15
Redemption in Kind 15
SHAREHOLDER INFORMATION 15
- ------------------------------------------------------
Voting Rights 15
Massachusetts Partnership Law 16
TAX INFORMATION 16
- ------------------------------------------------------
Federal Income Tax 16
New York State Tax Considerations 17
Other State and Local Taxes 17
PERFORMANCE INFORMATION 17
- ------------------------------------------------------
OTHER CLASSES OF SHARES 18
- ------------------------------------------------------
Financial Highlights--
Institutional Service Shares 19
FINANCIAL STATEMENTS 20
- ------------------------------------------------------
INDEPENDENT AUDITORS' REPORT 38
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES--CASH II SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)............................ None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).................................................................. None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, as applicable)................................................ None
Redemption Fees (as a percentage of amount redeemed, if applicable).................................... None
Exchange Fee........................................................................................... None
ANNUAL CASH II SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1)...................................................................... 0.23%
12b-1 Fee.............................................................................................. 0.25%
Other Expenses......................................................................................... 0.23%
Total Cash II Shares Operating Expenses (2)....................................................... 0.71%
</TABLE>
- ------------
(1) The management fee has been reduced to reflect the waiver of a portion of
the management fee. The maximum management fee is 0.40%.
(2) The total Cash II Shares operating expenses would have been 0.88% absent the
waiver of a portion of the investment advisory fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF CASH II SHARES WILL BEAR,
EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS
COSTS AND EXPENSES, SEE "TRUST INFORMATION" AND "INVESTING IN CASH II SHARES."
WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO ADDITIONAL
FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time
period. As noted in the table above, the Fund charges no redemption
fee for Cash II Shares................................................ $7 $23 $40 $88
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only
to Cash II Shares of the Fund. The Fund also offers one additional class of
shares, Institutional Service Shares. Institutional Service Shares are subject
to certain of the same expenses as Cash II Shares. However, Institutional
Service Shares are subject to a 12b-1 fee up to 0.10%. See "Other Classes of
Shares."
NEW YORK MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--
CASH II SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Independent Auditors' Report on page 38.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1993 1992 1991*
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------
Net investment income 0.02 0.03 0.02
- -------------------------------------------------------------------------------- --------- --------- ---------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.02) (0.03) (0.02)
- -------------------------------------------------------------------------------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------- --------- --------- ---------
TOTAL RETURN** 1.98% 2.86% 2.20%
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.71% 0.73% 0.46%(a)
- --------------------------------------------------------------------------------
Ratio of net investment income to average net assets 1.96% 2.46% 4.08%(a)
- --------------------------------------------------------------------------------
Expense waiver/reimbursement (b) 0.17% -- --
- --------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $58,884 $4,641 $56
- --------------------------------------------------------------------------------
</TABLE>
* For the period from April 25, 1991 (date of initial public investment) to
October 31, 1991.
** Based on net asset value, which does not reflect the sales load or
redemption fee, if applicable.
(a) Computed on an annualized basis.
(b) This expense decrease is reflected in both the expense and net investment
income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated
March 17, 1982. The Declaration of Trust permits the Trust to offer separate
series of shares of beneficial interest representing interests in separate
portfolios of securities. The shares in any one portfolio may be offered in
separate classes. As of the date of this prospectus, the Trustees have
established two classes of shares of the Fund, known as Cash II Shares and
Institutional Service Shares. This prospectus relates only to Cash II Shares of
the Fund.
Cash II Shares ("Shares") of the Fund are designed to provide a cash management
vehicle for certain customers of financial institutions which would include
corporations and municipalities, as well as larger individual accounts, seeking
a high level of cash management services from the participating institution. A
minimum initial investment of $25,000 over a 90-day period is required. The Fund
may not be a suitable investment for non-New York taxpayers or retirement plans
since it invests primarily in New York municipal securities.
The Fund attempts to stabilize the value of a Share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal regular income tax (federal regular income tax does not include the
federal individual alternative minimum tax) and the personal income taxes
imposed by New York State and New York municipalities consistent with stability
of principal. Interest income of the Fund that is exempt from these income taxes
retains its tax-free status when distributed to the Fund's shareholders.
While there is no assurance that the Fund will achieve its investment objective,
it endeavors to do so by following the investment policies described in this
prospectus. The investment objective and the policies and limitations described
below cannot be changed without approval of shareholders. Income distributed by
the Fund may not necessarily be exempt from state or municipal taxes in states
other than New York.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing primarily in a portfolio
of short-term New York Municipal Securities (as defined below) with remaining
maturities of one year or less at the time of purchase by the Fund. The Fund
invests its assets so that at least 80% of its annual interest income is exempt
from federal regular, New York State, and New York municipal income taxes. The
average maturity of the securities in the Fund's portfolio, computed on a dollar
weighted basis, will be 120 days or less. As a matter of operating policy, the
Trust will limit the average maturity of portfolio securities to 90 days or less
to meet certain regulatory requirements.
ACCEPTABLE INVESTMENTS. The Fund invests primarily in debt obligations issued
by or on behalf of New York and its political subdivisions and financing
authorities, and obligations of other states, territories and possessions of the
United States, including the District of Columbia, and any political
subdivision or financing authority of any of these, the income from which is, in
the opinion of qualified legal counsel, exempt from both federal regular income
tax and New York state income tax imposed upon non-corporate taxpayers
("Municipal Securities"). Examples of Municipal Securities include, but are not
limited to:
tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;
bond anticipation notes ("BANs") that are intended to be refinanced
through a later issuance of longer-term bonds;
municipal commercial paper and other short-term notes;
variable rate demand notes;
municipal bonds (including bonds having serial maturities and
pre-refunded bonds);
construction loan notes insured by the Federal Housing Administration and
financed by the Federal or Government National Mortgage Associations; and
participation, trust, and partnership interests in any of the foregoing
obligations.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term
Municipal Securities that have variable or floating interest rates and
provide the Fund with the right to tender the security for repurchase at
its stated principal amount plus accrued interest. Such securities
typically bear interest at a rate that is intended to cause the securities
to trade at par. The interest rate may float or be adjusted at regular
intervals (ranging from daily to annually), and is normally based on a
municipal interest index or a stated percentage of a prime rate or another
published rate. Most variable rate demand notes allow the Fund to demand
the repurchase of the security on not more than seven days prior notice.
Other notes only permit the Fund to tender the security at the time of each
interest rate adjustment or at other fixed intervals. See "Demand
Features." The Fund treats variable rate demand notes as maturing on the
later of the date of the next interest adjustment or the date on which the
Fund may next tender the security for repurchase.
PARTICIPATION INTERESTS. The Fund may purchase interests in Municipal
Securities from financial institutions such as commercial and investment
banks, savings and loan associations, and insurance companies. These
interests may take the form of participations, beneficial interests in a
trust, partnership interests, or any other form of indirect ownership that
allows the Fund to treat the income from the investment as exempt from
federal income tax. The Fund invests in these participation interests in
order to obtain credit enhancement or demand features that would not be
available through direct ownership of the underlying Municipal Securities.
RATINGS. The Municipal Securities in which the Fund invests must either be
rated in one of the two highest short-term rating categories by one or more
nationally recognized statistical rating organizations ("NRSROs") or be of
comparable quality to securities having such ratings. A NRSRO's two highest
rating categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard &
Poor's Corporation ("S&P"), MIG-1 OR MIG-2 by Moody's Investors Service, Inc.
("Moody's"), or FIN-1+, FIN-1 and FIN-2 by Fitch Investors Service, Inc.
("Fitch") are all considered rated in one of the two highest short-term rating
categories. The Fund will follow applicable regulations in determining whether a
security rated by more than one NRSRO can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two NRSROs in one of their two highest categories. See "Regulatory
Compliance."
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may have been
credit enhanced by a guaranty, letter of credit, or insurance. The Fund
typically evaluates the credit quality and ratings of credit enhanced securities
based upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. The bankruptcy,
receivership, or default of the credit enhancer will adversely affect the
quality and marketability of the underlying security.
The Fund may have more than 25% of its total assets invested in securities
credit enhanced by banks.
DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
invest pursuant to its investment objective and policies, but which are subject
to restrictions on resale under federal securities laws. Under criteria
established by the Board of Trustees, certain restricted securities are
considered liquid. To the extent restricted securities are deemed to be
illiquid, the Fund will limit their purchase, together with other securities
considered to be illiquid, to 10% of its net assets.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase Municipal
Securities on a when-issued or delayed delivery basis. In when-issued and
delayed delivery transactions, the Fund relies on the seller to complete the
transaction. The seller's failure to complete the transaction may cause the Fund
to miss a price or yield considered to be advantageous.
TEMPORARY INVESTMENTS. From time to time on a temporary basis, or when the
investment adviser determines that market conditions call for a temporary
defensive posture, the Fund may invest in short-term temporary investments.
Interest income from temporary investments may be taxable to shareholders as
ordinary income. All temporary investments will satisfy the same credit quality
standards as the Fund's acceptable investments. See "Ratings" above. Temporary
investments include: obligations issued by or on behalf of municipal or
corporate issuers; marketable obligations issued or guaranteed by the U.S.
government, its agencies, or instrumentalities; instruments issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment;
repurchase agreements; and prime commercial paper rated A-1 by S&P, Prime-1 by
Moody's or F-1 by Fitch.
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax
or personal income taxes imposed by New York and New York municipalities.
NEW YORK MUNICIPAL SECURITIES
New York Municipal Securities are generally issued to finance public works, such
as airports, bridges, highways, housing, hospitals, mass transportation
projects, schools, streets, and water and sewer works. They are also issued to
repay outstanding obligations, to raise funds for general operating expenses,
and to make loans to other public institutions and facilities.
New York Municipal Securities include industrial development bonds issued by or
on behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.
The two principal classifications of Municipal Securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
STANDBY COMMITMENTS
Some securities dealers are willing to sell Municipal Securities to the Fund
accompanied by their commitments to repurchase the Municipal Securities prior to
maturity, at the Fund's option, for the amortized cost of the Municipal
Securities at the time of repurchase. These arrangements are not used to protect
against changes in the market value of municipal securities. They permit the
Fund, however, to remain fully invested and still provide liquidity to satisfy
redemptions. The cost of Municipal Securities accompanied by these "standby"
commitments could be greater than the cost of Municipal Securities without such
commitments. Standby commitments are not marketable or otherwise assignable and
have value only to the Fund. The default or bankruptcy of a securities dealer
giving such a commitment would not affect the quality of the Municipal
Securities purchased. However, without a standby commitment, these securities
could be more difficult to sell. The Fund enters into standby commitments only
with those dealers whose credit the investment adviser believes to be of high
quality.
NEW YORK INVESTMENT RISKS
Yields on New York Municipal Securities depend on a variety of factors,
including: the general conditions of the short-term municipal note market and of
the municipal bond market; the size of the particular offering; the maturity of
the obligations; and the rating of the issue. Further, any adverse economic
conditions or developments affecting the State or City of New York could impact
the Fund's portfolio. The ability of the Fund to achieve its investment
objective also depends on the continuing ability of the issuers of New York
Municipal Securities and demand features for such securities, or the credit
enhancers of either, to meet their obligations for the payment of interest and
principal when due. Investing in New York Municipal Securities which meet the
Fund's quality standards may not be possible if the State and City of New York
do not maintain their current credit ratings. An expanded discussion of the
current economic risks associated with the purchase of New York Municipal
Securities is contained in the Combined Statement of Additional Information.
NON-DIVERSIFICATION
The Fund is a non-diversified investment portfolio. As such, there is no limit
on the percentage of assets which can be invested in any single issuer. An
investment in the Fund, therefore, will entail greater risk than would exist in
a diversified investment company because the higher percentage of investments
among fewer issuers may result in greater fluctuation in the total market value
of the Fund's portfolio. Any economic, political, or regulatory developments
affecting the value of the securities in the Fund's portfolio will have a
greater impact on the total value of the portfolio than would be the case if the
portfolio were diversified among more issuers.
The Fund will attempt to minimize the risks associated with a non-diversified
portfolio so as not to impair its ability to stabilize its net asset value at
$1.00 per share by limiting, with respect to 75% of the Fund's total assets,
investments in one issuer to not more than 10% of the value of its total assets.
The total amount of the remaining 25% of the value of the Fund's total assets
would be invested in a single issuer if the investment adviser believes such a
strategy to be prudent. In addition, the Fund intends to comply with Subchapter
M of the Internal Revenue Code, as amended. This undertaking requires that at
the end of each quarter of the taxable year, the aggregate value of all
investments in any one issuer (except U.S. government obligations, cash, and
cash items) which exceed 5% of the Fund's total assets not exceed 50% of the
value of its total assets; beyond that, no more than 25% of its total assets are
invested in the securities of a single issuer.
INVESTMENT LIMITATIONS
The Fund will not:
borrow money or pledge securities except, under certain circumstances,
the Fund may borrow up to one-third of the value of its total assets and
pledge up to 10% of the value of total assets to secure such borrowings;
with respect to securities comprising 75% of its assets, invest more than
10% of its total assets in the securities of any one issuer;
invest more than 5% of its total assets in securities of issuers (or in
the alternative, guarantors, where applicable) that have records of less
than three years of continuous operations; or
commit more than 10% of its total assets to illiquid obligations,
including repurchase agreements with maturities longer than seven days.
Certain instruments in which the Fund may invest, such as certain
collateralized municipal notes, could be considered illiquid.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended. In particular, the Fund
will comply with the various requirements of Rule 2a-7, which regulates money
market mutual funds. The Fund will determine the effective maturity of its
investments, as well as its ability to consider a security as having received
the requisite short-term ratings by NRSROs, according to Rule 2a-7. The Fund may
change these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Board of
Trustees is responsible for managing the business affairs of the Trust and for
exercising all the Trust's powers except those reserved for the shareholders.
The Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Fund are made by Federated Management, the Fund's
investment adviser, subject to direction by the Trustees. The adviser
continually conducts investment research and supervision for the Fund and is
responsible for the purchase or sale of portfolio instruments, for which it
receives an annual fee from the Fund.
ADVISORY FEES. The Fund's adviser receives an annual investment advisory
fee equal to .40 of 1% of the Fund's average daily net assets. Under the
investment advisory contract, the adviser will reimburse the Fund the
amount, limited to the amount of the investment advisory fee, by which the
Fund's aggregate annual operating expenses, including its investment
advisory fee and organizational expenses, but excluding interest, taxes,
brokerage commissions, distribution fees paid pursuant to the Fund's Plan
adopted in accordance with Investment Company Act Rule
12b-1, expenses of registering and qualifying the Fund and its shares under
federal and state laws and regulations, expenses of withholding taxes, and
extraordinary expenses, exceed .45 of 1% of its average daily net assets.
(If the fee paid pursuant to the Rule 12b-1 Plan were included in the
calculation, the aggregate annual operating expenses of Shares would be
limited to .70 of 1%). This does not include reimbursement to the Fund of
any expenses incurred by shareholders who use the transfer agent's
subaccounting facilities. The adviser has also undertaken to reimburse the
Fund for operating expenses in excess of limitations established by certain
states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on
April 11, 1989, is a registered investment adviser under the Investment
Advisers Act of 1940. It is a subsidiary of Federated Investors. All of the
Class A (voting) shares of Federated Investors are owned by a trust, the
Trustees of which are John F. Donahue, Chairman and Trustee of Federated
Investors, Mr. Donahue's wife, and Mr. Donahue's son, J. Christopher
Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
DISTRIBUTION OF CASH II SHARES
Federated Securities Corp. is the principal distributor for Cash II Shares. It
is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated Securities
Corp. is a subsidiary of Federated Investors.
DISTRIBUTION PLAN. Pursuant to the provisions of a distribution plan adopted in
accordance with Investment Company Act Rule 12b-1, (the "Plan"), the Fund will
pay to the distributor an amount computed at an annual rate of .25 of 1% of the
average daily net asset value of the Shares to finance any activity which is
principally intended to result in the sale of Shares subject to the Plan.
The distributor may from time to time and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plan to the extent
the expenses attributable to the Shares exceed such lower expense limitation as
the distributor may, by notice to the Fund, voluntarily declare to be effective.
The distributor may select financial institutions (such as broker/dealers and
depository institutions, such as commercial banks and savings and loan
associations) to provide sales and administrative services as agents for their
clients. Administrative services may include, but are not limited to, the
following functions: providing office space, equipment, telephone facilities,
and various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries regarding the
Shares; assisting clients in changing dividend options; account designations,
and addresses; and providing such other services as the Fund reasonably requests
for Shares.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings and loan association) from being an underwriter or distributor
of securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the administrative capacities described
above or should Congress relax current restrictions on depository institutions,
the Board of Trustees will consider appropriate changes in the services.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state law.
SHAREHOLDER SERVICING ARRANGEMENTS. The distributor may also pay financial
institutions a fee with respect to the average aggregate net asset value of
their customers' Shares for providing administrative services. This fee is in
addition to amounts paid under the Plan, and if paid, will be reimbursed by the
adviser and not the Fund.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, Inc., a subsidiary
of Federated Investors, provides the Fund with the administrative personnel and
services necessary to operate the Fund. Such services include shareholder
servicing and certain legal and accounting services. Federated Administrative
Services, Inc. provides these at approximate cost.
CUSTODIAN. State Street Bank and Trust Company, Boston, Massachusetts, is
custodian for the securities and cash of the Fund.
TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT. _Federated Services Company,
Pittsburgh, Pennsylvania, is transfer agent for the shares of the Fund, and
dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro & Morin, Washington, D.C.
Special New York tax counsel to the Fund is White & Case, New York.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Deloitte &
Touche, Boston, Massachusetts.
EXPENSES OF THE FUND AND CASH II SHARES
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and continuing
its existence; registering the Trust with federal and state securities
authorities; Trustees' fees; auditors' fees; the cost of meetings of Trustees;
legal fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and shares of the Fund;
investment advisory services; taxes and commissions; custodian fees; insurance
premiums; auditors' fees; and such non-recurring and extraordinary items as may
arise.
At present, the only expenses allocated to the Shares as a class are expenses
under the Fund's 12b-1 Plan which relate to the Shares. However, the Board of
Trustees reserves the right to allocate certain other expenses to holders of
Shares as it deems appropriate ("Class Expenses"). In any case, Class Expenses
would be limited to: transfer agent fees as identified by the transfer agent as
attributable to holders of Shares; printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses,
and proxies to current shareholders; registration fees paid to the Securities
and Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares; and
Trustees' fees incurred as a result of issues relating solely to Shares.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of Shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per Share is determined by adding the interest of the Shares in the value of all
securities and other assets of the Fund, subtracting the interest of the Shares
in the liabilities of the Fund and those attributable to Shares, and dividing
the remainder by the total number of Shares outstanding.
The Fund, of course, cannot guarantee that its net asset value will always
remain at $1.00 per Share.
INVESTING IN CASH II SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve Wire System are open for business. Shares may be purchased through a
financial institution which has a sales agreement with the distributor or
directly from the distributor, Federated Securities Corp. The Fund reserves the
right to reject any purchase request.
THROUGH A FINANCIAL INSTITUTION. An investor may call his financial institution
(such as a bank or an investment dealer) to place an order to purchase Shares.
Orders through a financial institution are considered received when the Fund
receives payment by wire or converts payment by check from the financial
institution into federal funds. It is the financial institution's responsibility
to transmit orders promptly.
DIRECTLY FROM THE DISTRIBUTOR. An investor may place an order to purchase
Shares directly from the distributor. To do so: complete and sign the new
account form available from the Fund; enclose a check payable to New York
Municipal Cash Trust--Cash II Shares; and mail both to New York Municipal Cash
Trust, P.O. Box 8604, Boston, MA 02266-8604.
The order is considered received after the check is converted by State Street
Bank and Trust Company into federal funds. This is generally the next business
day after State Street Bank receives the check.
To purchase Shares by wire, call the Fund. All information needed will be taken
over the telephone, and the order is considered received when State Street Bank
receives payment by wire. Federal funds should be wired as follows: State Street
Bank and Trust Company, Boston, Massachusetts; Attention: EDGEWIRE; For Credit
to: New York Municipal Cash Trust; Fund Number (this number can be found on the
account statement or by contacting the Fund); Group Number or Order Number;
Title or Name of Account; ABA Number 011000028. Shares cannot be purchased on
days on which the New York Stock Exchange is closed and on federal holidays
restricting wire transfers.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000. However, an account may be
opened with a smaller amount as long as the $25,000 minimum is reached within 90
days. An institutional investor's minimum investment will be calculated by
averaging all accounts it maintains with the Fund.
Individual accounts established through a bank or broker may be subject to a
different minimum investment requirement.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund.
The net asset value is determined at 12:00 noon (Boston time), 3:00 p.m. (Boston
time), and 4:00 p.m. (Boston time), Monday through Friday, except on: (i) days
on which there are not sufficient changes in the value of the Fund's portfolio
securities that its net asset value might be materially affected; (ii) days
during which no Shares are tendered for redemption and no orders to purchase
Shares are received; and (iii) the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Financial
institutions holding Shares in a fiduciary, agency, custodial, or similar
capacity may charge or pass through subaccounting fees as part of or in addition
to normal trust or agency account fees. They may also charge fees for other
services provided which may be related to the ownership of Shares. This
prospectus should, therefore, be read together with any agreement between the
customer and the financial institution with regard to the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
SYSTEMATIC INVESTMENT PROGRAM
Once an account has been opened, shareholders may add to their investment on a
regular basis in a minimum amount of $500. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account and
invested in Fund shares. A shareholder may apply for participation in this
program through his financial institution or directly through the Fund.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund.
Monthly confirmations are sent to report transactions, such as purchases and
redemptions, as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Shares purchased by wire before
3:00 p.m. (Boston time) begin earning dividends that day. Shares purchased by
check begin earning dividends on the next business day after the check is
converted, upon instruction of the transfer agent into federal funds. Unless
shareholders request cash payments on an application or by writing to Federated
Securities Corp., dividends are automatically reinvested on payment dates in
additional Shares.
CAPITAL GAINS
Capital gains, if any, could result in an increase in dividends. Capital losses,
if any, could result in a decrease in dividends. If, for some extraordinary
reason, the Fund realizes net long-term or short-term capital gains, it will
distribute them at least once every 12 months.
REDEEMING CASH II SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemptions can be made through a financial
institution or directly from the Fund. Redemption requests must be received in
proper form.
THROUGH A FINANCIAL INSTITUTION
A shareholder may redeem Shares by calling his financial institution (such as a
bank or an investment dealer) to request the redemption. Telephone redemption
instructions may be recorded. Shares will be redeemed at the net asset value
next determined after State Street Bank receives the redemption request from the
financial institution. The financial institution is responsible for promptly
submitting redemption requests and providing proper written redemption
instructions to the Fund. The financial institution may charge customary fees
and commissions for this service. If, at any time, the Fund shall determine it
necessary to terminate or modify this method of redemption, shareholders will be
promptly notified.
An authorization form permitting the Fund to accept redemption requests by
telephone must first be completed. Authorization forms and information on this
service are available from Federated Securities Corp.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If reasonable
procedures are not followed by the Fund, it may be liable for losses due to
unauthorized or fraudulent telephone instructions.
RECEIVING PAYMENT. Pursuant to instructions from the financial institution,
redemptions will be made by check or by wire.
BY CHECK. Normally, a check for the proceeds is mailed within one business
day, but in no event more than seven days, after receipt of a proper
redemption request. Dividends are paid up to and including the day that a
redemption request is processed.
BY WIRE. Proceeds for redemption requests received before 12:00 noon
(Boston time) will be wired the same day but will not be entitled to that
day's dividend. Redemption requests received after 12:00 noon (Boston time)
will receive that day's dividends and will be wired the following business
day.
DIRECTLY FROM THE FUND
BY MAIL. Any shareholder may redeem Shares by sending a written request to the
transfer agent. The written request should include the shareholder's name, the
Fund name and class of shares, the account number, and the share or dollar
amount requested. If share certificates have been issued, they must be properly
endorsed and should be sent by registered or certified mail with the written
request. Shareholders should contact the Fund for assistance in redeeming by
mail.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
SIGNATURES. Individual shareholders requesting a redemption of $50,000 or more,
a redemption of any amount to be sent to an address other than that on record
with the Fund, or a redemption payable other than to the shareholder of record
must have signatures on written redemption requests guaranteed by:
a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
CHECKWRITING. At the shareholder's request, the transfer agent will establish a
checking account for redeeming Shares. A fee is charged for this service. With a
Fund checking account, Shares may be redeemed simply by writing a check. The
redemption will be made at the net asset value on the date that the transfer
agent presents the check to the Fund. A check may not be written to close an
account. If a shareholder wishes to redeem Shares and have the proceeds
available, a check may be written and negotiated through the shareholder's bank.
Checks should never be sent to the transfer agent to redeem Shares. Cancelled
checks are sent to the shareholder each month. For further information, contact
the Fund.
DEBIT CARD. At the shareholder's request, a debit card is available. A fee may
be charged for this service. For further information, contact Federated
Securities Corp.
REDEMPTION BEFORE PURCHASE INSTRUMENTS CLEAR
When Shares are purchased by check, the proceeds from the redemption of those
shares are not available, and the shares may not be exchanged until, the Fund or
its agents are reasonably certain that the purchase check has cleared, which
would take up to ten calendar days.
SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $25,000, a Systematic
Withdrawal Program may be established whereby automatic redemptions are made
from the account and transferred electronically to any commercial bank, savings
bank, or credit union that is an Automated Clearing House ("ACH") member.
Depending upon the amount of the withdrawal payments and the amount of dividends
paid, with respect to Shares, redemptions may reduce, and eventually deplete,
the shareholder's investment in Shares. For this reason, payments under this
program should not be considered as yield or income on the shareholder's
investment in Shares.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem Shares in any account, except retirement plans, and pay the proceeds to
the shareholder if the account balance falls below a required minimum value of
$25,000 due to shareholder redemptions.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.
REDEMPTION IN KIND
The Trust is obligated to redeem Shares solely in cash up to $250,000 or 1% of
the respective class' net asset value, whichever is less, for any one
shareholder within a 90-day period. To the extent available, such securities
will be readily marketable.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that further cash payments will have a material adverse effect on
remaining shareholders. In such a case, the Trust will pay all or a portion of
the remainder of the redemption in portfolio instruments, valued in the same way
that net asset value is determined. The portfolio instruments will be selected
in a manner that the Trustees deem fair and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving their securities and selling them before their
maturity could receive less than the redemption value of their securities and
could incur certain transaction costs.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
all portfolios of the Trust have equal voting rights except that, in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote.
As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or the Fund's operation and for the election of Trustees
under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust. To
protect shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of shareholders for such acts or
obligations of the Trust. These documents require notice of this disclaimer to
be given in each agreement, obligation, or instrument that the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for obligations of
the Trust, the Trust is required to use its property to protect or compensate
the shareholder. On request, the Trust will defend any claim made and pay any
judgment against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them from its assets.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act of 1986, dividends
representing net interest earned on some municipal bonds may be included in
calculating the federal individual alternative minimum tax or the federal
alternative minimum tax for corporations.
The alternative minimum tax, equal to up to 28% of alternative minimum taxable
income for individuals and 20% for corporations, applies when it exceeds the
regular tax for the taxable year. Alternative minimum taxable income is equal to
the regular taxable income of the taxpayer increased by certain "tax preference"
items not included in regular taxable income and reduced by only a portion of
the deductions allowed in the calculation of the regular tax.
The Tax Reform Act of 1986 treats interest on certain "private activity" bonds
issued after August 7, 1986, as a tax preference item for both individuals and
corporations. Unlike traditional governmental purpose municipal bonds, which
finance roads, schools, libraries, prisons, and other public facilities, private
activity bonds provide benefits to private parties. The Fund may purchase all
types of municipal bonds, including private activity bonds. Thus, should it
purchase any such bonds, a portion of the Fund's dividends may be treated as a
tax preference item.
In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends are included in a corporation's
"adjusted current earnings." The corporate alternative minimum tax treats 75% of
the excess of the taxpayer's pre-tax "adjusted current earnings" over the
taxpayer's alternative minimum taxable income as a tax preference item.
"Adjusted current earnings" is based upon the concept of a corporation's
"earnings and profits." Since "earnings and profits" generally includes the full
amount of any Fund dividend, and alternative minimum taxable income does not
include the portion of the Fund's dividend attributable to municipal bonds which
are not private activity bonds, the difference will be included in the
calculation of the corporation's alternative minimum tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional Shares. Information on the tax status of dividends and distributions
is provided annually.
NEW YORK STATE TAX CONSIDERATIONS
In the opinion of White & Case, special New York tax counsel to the Fund, income
to the Fund that is exempt from New York State personal income tax and personal
income taxes imposed by New York municipalities will retain its exempt status
when distributed to New York shareholders. Dividends of the Fund are not exempt
from the New York taxes payable by corporations.
OTHER STATE AND LOCAL TAXES
Distributions representing net interest received on tax-exempt municipal
securities are not necessarily free from regular state income taxes of any state
or local taxing authority. State laws differ on this issue, and shareholders are
urged to consult their own tax advisers regarding the status of their accounts
under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its yield, effective yield, and
tax-equivalent yield for Cash II Shares.
The yield of Cash II Shares represents the annualized rate of income earned on
an investment in Cash II Shares over a seven-day period. It is the annualized
dividends earned during the period on the investment, shown as a percentage of
the investment. The effective yield is calculated similarly to the yield, but,
when annualized, the income earned by an investment in Cash II Shares is assumed
to be reinvested daily. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment. The
tax-equivalent yield of Cash II Shares is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that Cash II Shares would have had to
earn to equal their actual yield, assuming a specific tax rate.
Advertisements and other sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value of
an investment in Cash II Shares after reinvesting all income distributions. It
is calculated by dividing that change by the initial investment and is expressed
as a percentage.
Yield, effective yield and tax equivalent yield will be calculated separately
for Cash II Shares and Institutional Service Shares. Because Cash II Shares and
Institutional Service Shares are subject to different 12b-1 fees, the yield,
effective yield, and tax-equivalent yield for each class of shares for the same
period will differ. Specifically, because the 12b-1 fee for Cash II Shares
exceeds the 12b-1 fee for Institutional Service Shares, the yield, effective
yield, and tax-equivalent yield of Cash II Shares for the same period will be
lower than that of Institutional Service Shares based upon the difference in the
amount of the 12b-1 fee.
From time to time, the Fund may advertise its performance using certain
reporting services and/or compare its performance to certain indices.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Service Shares are sold to banks and other institutions that hold
assets for individuals, trusts, estates, or partnerships. Cash II shares are
sold at net asset value without a sales charge. Investments in Institutional
Service Shares are subject to a minimum initial investment of $25,000.
Like Cash II Shares, Institutional Service Shares are distributed pursuant to a
12b-1 Plan adopted by the Trust. The distributor is paid a fee of .10 of 1% of
the average daily net assets of the Institutional Service Shares.
Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of shares
of the Fund is sold. The distributor may pay an administrative fee to a
financial institution or broker for administrative services provided to the
Institutional Service Shares class. Any fee paid by the distributor for
administrative services will not be an expense of the class, but will be
reimbursed to the distributor by the investment adviser.
The difference between class expenses and distribution expenses borne by shares
of each respective class will cause the amount of dividends payable to a
particular class of shares to exceed the amount of dividends payable to another
class of shares whose distribution expenses are greater. Because Institutional
Service Shares are subject to a 12b-1 fee of .10 of 1%, the class's dividends
will exceed the dividends paid by Cash II Shares.
The stated advisory fee is the same for each class of shares.
NEW YORK MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Independent Auditors' Report on page 38.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income 0.02 0.03 0.04 0.05 0.06 0.05 0.04 0.04 0.05 0.06
- ---------------------------------
LESS DISTRIBUTIONS
- ---------------------------------
Dividends to shareholders from
net investment income (0.02) (0.03) (0.04) (0.05) (0.06) (0.05) (0.04) (0.04) (0.05) (0.06)
- --------------------------------- ------- ------- ------- ------- ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------- ------- ------- ------- ------- ------ ------ ------ ------ ------ ------
TOTAL RETURN* 2.16% 3.01% 4.59% 5.51% 5.70% 4.66% 3.90% 4.35% 4.88% 5.94%
- ---------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------
Ratio of expenses to average
net assets 0.54% 0.57% 0.52% 0.54% 0.55% 0.51% 0.47% 0.47% 0.47% 0.12%
- ---------------------------------
Ratio of net investment income
to average net assets 2.14% 2.99% 4.48% 5.36% 5.56% 4.57% 3.81% 4.18% 4.75% 5.65%
- ---------------------------------
Expense waiver/reimbursement (a) 0.17% -- -- -- -- -- -- -- -- 0.36%
- ---------------------------------
Net assets, end of period
(000 omitted $274,357 $164,492 $191,616 $197,213 $245,542 $212,786 $141,040 $183,941 $83,085 $58,969
- ---------------------------------
</TABLE>
* Based on net asset value which does not reflect the sales load or redemption
fee, if applicable.
(a) This expense decrease is reflected in both the expense and net investment
income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--102.3%
- ------------------------------------------------------------------------------------
NEW YORK--1.01%
--------------------------------------------------------------------
$ 790,000 Amherst, NY, IDA Weekly VRDNs (Nanhardt/Alexander Inc.)/(Marine
Midland Bank LOC)/(Subject to AMT) A-2 $ 790,000
--------------------------------------------------------------------
620,000 Babylon, NY, IDA Weekly VRDNs (M. Goldfarb-My Florist)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 620,000
--------------------------------------------------------------------
3,500,000 Bethlehem, NY, 3.125% BANs, 3/1/94 NR(3) 3,503,683
--------------------------------------------------------------------
3,500,000 Binghamton, NY, 2.60% GO BANs, 5/20/94 NR(4) 3,502,800
--------------------------------------------------------------------
600,000 Campbell Savona, NY, 2.65% Central School District BANs, 3/11/94 NR 600,103
--------------------------------------------------------------------
4,700,000 Chautauqua County, NY, IDA Weekly VRDNs (Cliffstar Corp.)/(Union
Bank of Switzerland LOC)/
(Subject to AMT) P-1 4,700,000
--------------------------------------------------------------------
3,900,000 Chautauqua County, NY, IDA Weekly VRDNs (Mogen David Wine
Corp.)/(Mellon Bank N.A. LOC)/(Subject to AMT) P-1 3,900,000
--------------------------------------------------------------------
1,300,000 Colonie, NY, IDA Weekly VRDNs (Herbert S. Ellis)/ (Marine Midland
Bank N.A. LOC)/(Subject to AMT) A-2 1,300,000
--------------------------------------------------------------------
875,000 Colonie, NY, IDA Weekly VRDNs (Series 1988)/
(13 Green Mountain Drive)/(Marine Midland Bank N.A. LOC)/(Subject to
AMT) A-2 875,000
--------------------------------------------------------------------
2,000,000 Corning, NY, Community College, 3.00% RANS, 2/11/94 NR 2,002,076
--------------------------------------------------------------------
1,750,000 Cortland County, NY, IDA Weekly VRDNs (General Signal
Corp.)/(Wachovia Bank of Georgia N.A. LOC) A-1+ 1,750,000
--------------------------------------------------------------------
1,000,000 Dundee, NY, Central School District, 3.34% BANs,
12/7/93 NR 1,000,319
--------------------------------------------------------------------
</TABLE>
20
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 1,000,000 Dundee, NY, Central School District, 3.375% BANs (Yates & Schuyler
Counties), 12/7/93 NR $ 1,000,311
--------------------------------------------------------------------
4,600,000 Eastchester, NY, United Free School District, 3.00% TANs, 5/19/94 NR(3) 4,604,913
--------------------------------------------------------------------
1,440,000 Erie County, NY, IDA Weekly VRDNs (Data-Rex, Inc.)/ (Marine Midland
Bank N.A. LOC)/(Subject to AMT) A-2 1,440,000
--------------------------------------------------------------------
1,349,200 Fort Plain, NY, 2.74% BANs, 5/11/94 NR 1,349,680
--------------------------------------------------------------------
1,800,000 Franklin County, NY, IDA Weekly VRDNs (Series 1991A)/ (KES
Chateaugay)/(Bank of Tokyo, Ltd. LOC) A-1+ 1,800,000
--------------------------------------------------------------------
1,500,000 Guilderland, NY, IDA Weekly VRDNs (Series 1993A)/ (Northeastern
Industrial Park, Inc.)/(Chemical Bank LOC) P-1 1,500,000
--------------------------------------------------------------------
1,900,000 Herkimer County, NY, IDA Weekly VRDNs (Granny's Kitchens,
Ltd.)/(Chemical Bank LOC)/(Subject to AMT) A-1 1,900,000
--------------------------------------------------------------------
10,975,000 Islip, NY, 3.125%, GO BANs, 11/20/93 NR(3) 11,010,998
--------------------------------------------------------------------
4,000,000 Islip, NY, 3.25% GO BANs, 11/12/93 NR(3) 4,000,292
--------------------------------------------------------------------
5,000,000 Longwood Central School District, NY, 3.25% TANs,
6/30/94 NR 5,004,798
--------------------------------------------------------------------
3,250,000 Lyons, NY, 2.43% Central School District BANs, 12/29/93 NR 3,250,150
--------------------------------------------------------------------
2,325,000 Madison County, NY, IDA Monthly VRDNs (Series 1989A)/(Upstate Metals
Corp.)/(Fleet Bank of New York, N.A. LOC)/(Subject to AMT) A-1 2,325,000
--------------------------------------------------------------------
15,000,000 Marine Midland, NY, Premium Tax-Exempt Bond & Loan Trust Weekly
VRDNs (Marine Midland Bank N.A. LOC) P-1 15,000,000
--------------------------------------------------------------------
3,295,000 Mechanicville and Town of Stillwater, NY, IDA Weekly VRDNs (1987
Tagsons Paper, Inc.)/(Marine Midland Bank N.A. LOC)/(Subject to AMT) A-2 3,295,000
--------------------------------------------------------------------
3,640,000 Monroe County, NY, 3.00% RANs, 4/29/94 NR(3) 3,644,218
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 6,300,000 Monroe County, NY, IDA Monthly VRDNs (Neu Lac DeVille Associates,
Inc.)/(Fleet Bank of New York,
N.A., LOC) A-1 $ 6,300,000
--------------------------------------------------------------------
3,000,000 Nassau County, NY, 3.25% BANs, 8/15/94 SP-1 3,005,724
--------------------------------------------------------------------
10,000,000 Nassau County, NY, 3.35% GO Notes (Sakura Bank, Ltd. LOC), 4/15/94 SP-1 10,028,749
--------------------------------------------------------------------
3,500,000 Nassau County, NY, 3.75% GO BANs (Series 1993A)/ (Mitsubishi Bank,
Ltd. LOC), 11/15/93 MIG1 3,501,645
--------------------------------------------------------------------
725,000 Nassau County, NY, IDA Weekly VRDNs (465 Endo Associates)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 725,000
--------------------------------------------------------------------
1,512,495 Nassau County, NY, IDA Weekly VRDNs (D.L. Blair Corp.)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit Co. BPA) P-1 1,512,495
--------------------------------------------------------------------
1,950,000 Nassau County, NY, IDA Weekly VRDNs (R.M. Pascucci Corp.)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 1,950,000
--------------------------------------------------------------------
5,500,000 New Rochelle, NY, IDA Weekly VRDNs (Charles Sadek Import Co.)/(Bank
of New York LOC) P-1 5,500,000
--------------------------------------------------------------------
3,700,000 New York City HDC Weekly VRDNs (Series 1993A)/
(Columbus Gardens)/(Citibank N.A. LOC) A-1 3,700,000
--------------------------------------------------------------------
6,000,000 New York City Municipal Water Finance Authority Weekly VRDNs (Series
1992A)/(MBIA Insured) VMIG1 6,000,000
--------------------------------------------------------------------
3,000,000 New York City Municipal Water Finance Authority, 2.45% Semi-Annual
TOBs (MBIA Insured), Optional Tender
12/15/93 NR(1) 3,000,000
--------------------------------------------------------------------
2,500,000 New York City, NY, 3.50% RANs, 4/15/94 SP-1 2,507,551
--------------------------------------------------------------------
416,667 New York City, NY, IDA Weekly VRDNs (David Rosen Bakers Supply,
Inc.)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 416,667
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 466,688 New York City, NY, IDA Weekly VRDNs (Feature Enterprise)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor
Credit BPA) P-1 $ 466,688
--------------------------------------------------------------------
626,668 New York City, NY, IDA Weekly VRDNs (Lomar Development
Corp.)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 626,668
--------------------------------------------------------------------
1,100,000 New York City, NY, IDA Weekly VRDNs (Mindel Associates)/(Chemical
Bank LOC)/(Subject to AMT) A-1 1,100,000
--------------------------------------------------------------------
297,929 New York City, NY, IDA Weekly VRDNs (MLN Associates)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 297,929
--------------------------------------------------------------------
1,900,000 New York City, NY, IDA Weekly VRDNs Special Facility Revenue Bonds
(Series 1990)/(Air France)/(Societe Generale LOC)/(Subject to AMT) A-1+ 1,900,000
--------------------------------------------------------------------
4,000,000 New York State Dormitory Authority Weekly VRDNs
(Series 1993A)/(Metropolitan Museum of Art Guaranty) A-1+ 4,000,000
--------------------------------------------------------------------
7,115,000 New York State Dormitory Authority Weekly VRDNs
(Series 1993B)/(Metropolitan Museum of Art Guaranty) A-1+ 7,115,000
--------------------------------------------------------------------
2,800,000 New York State Dormitory Authority, 2.60% CP (Series
1989A)/(Sloan-Kettering Memorial Cancer Center)/(Fuji Bank, Ltd.
LOC), Mandatory Tender 1/19/94 A-1 2,800,000
--------------------------------------------------------------------
1,100,000 New York State Energy Research & Development Authority, 2.50% TOBs
(Series 1985A)/(Long Island Lighting Co.)/(Deutsche Bank AG LOC),
Mandatory Tender 3/1/94 VMIG1 1,100,000
--------------------------------------------------------------------
7,395,000 New York State Energy Research & Development Authority, 3.10%
(Rochester Gas & Electric Co.)/(Westpac Banking Corp. LOC), Optional
Tender 11/15/93 A-1 7,395,000
--------------------------------------------------------------------
7,000,000 New York State Energy Research & Development, 2.50% Annual TOBs (New
York State Electrical & Gas)/(Morgan Bank, Delaware LOC), 3/15/94 P-1 7,000,000
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 8,000,000 New York State Floating Rate Trust Certificate Weekly VRDNs (Series
144A)/(AMBAC Insured) A-1+ $ 8,030,000
--------------------------------------------------------------------
1,000,000 New York State HFA Weekly VRDNs (Normandie Corp.)/ (Bankers Trust
Company LOC)/(Subject to AMT) VMIG1 1,000,000
--------------------------------------------------------------------
13,920,000 New York State HFA Weekly VRDNs (Special Surgery Hospital)/(Chemical
Bank LOC) VMIG1 13,920,000
--------------------------------------------------------------------
1,445,000 New York State Job Development Authority Weekly VRDNs (New York
State, Guaranty)/(Subject to AMT) VMIG1 1,445,000
--------------------------------------------------------------------
1,745,000 New York State Job Development Authority Weekly VRDNs (Sumitomo
Bank, Ltd. LOC)/(Subject to AMT) VMIG1 1,745,000
--------------------------------------------------------------------
8,000,000 New York State Medical Care Facilities Finance Agency Weekly VRDNs
(Series 1993G)/(St. Luke's-Roosevelt Hospital Center)/(FHA Insured,
Hong Kong & Shanghai
Banking Corp. BPA) A-1+ 8,000,000
--------------------------------------------------------------------
8,000,000 New York State Power Authority VRDC Trust Certificates Weekly VRDNs
(Series 1993H) A-1+ 8,000,000
--------------------------------------------------------------------
6,300,000 New York State, 2.50% CP (Series N), Mandatory Tender 1/13/94 A-1 6,300,000
--------------------------------------------------------------------
13,000,000 New York State, 2.75% TRANs, 12/31/93 SP-1+ 13,010,483
--------------------------------------------------------------------
6,000,000 Niagara County, NY, 3.25% BANs, 9/16/94 NR 6,017,754
--------------------------------------------------------------------
3,000,000 Niagara County, NY, IDA Weekly VRDNs (Allegheny Ludlum Steel
Corp.)/(PNC Bank N.A. LOC) A-1 3,000,000
--------------------------------------------------------------------
3,700,000 Niagara Falls, NY, Toll Bridge System Revenue Bonds Weekly VRDNs
(Series 1993A)/(FGIC Insured, Industrial Bank of Japan, Ltd. BPA) A-1+ 3,700,000
--------------------------------------------------------------------
923,000 Northville, NY, 2.78% Central School District BANs,
6/17/94 NR(4) 923,445
--------------------------------------------------------------------
1,725,000 Onondaga County, NY, IDA Weekly VRDNs (W.W.
Grainger, Inc.) A-1+ 1,725,000
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 1,240,000 Onondaga County, NY, IDA Weekly VRDNs (Beverage Corp.)/(Marine
Midland Bank N.A. LOC)/(Subject to AMT) A-2 $ 1,240,000
--------------------------------------------------------------------
1,175,000 Onondaga County, NY, IDA Weekly VRDNs (Series 1987)/(Southern
Container Corp.)/(Chemical Bank LOC)/ (Subject to AMT) VMIG1 1,175,000
--------------------------------------------------------------------
1,600,000 Ontario, NY, IDA Weekly VRDNs (Hillcrest Enterprises/ Buckey
Corrugated, Inc. Facility)/(National City Bank, Cleveland
LOC)/(Subject to AMT) P-1 1,600,000
--------------------------------------------------------------------
5,700,000 Oswego County, NY, IDA Weekly VRDNs (Copperweld Co.)/(PNC Bank, N.A.
LOC) P-1 5,700,000
--------------------------------------------------------------------
7,300,000 Plainview--Old Bethpage, NY, 3.00% TANs, 6/29/94 NR 7,299,678
--------------------------------------------------------------------
3,000,000 Port Authority of New York and New Jersey Special Project Bonds
Weekly VRDNs (Series 3)/(KIAC Partners)/ (Subject to AMT)/(Deutsche
Bank AG LOC) A-1+ 3,000,000
--------------------------------------------------------------------
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs A-1+ 15,000,000
--------------------------------------------------------------------
1,000,000 Port Authority of New York and New Jersey Weekly VRDNs (Series
1991-4)/(Subject to AMT) P-1 1,000,000
--------------------------------------------------------------------
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs (Subject to
AMT) A-1+ 15,000,000
--------------------------------------------------------------------
5,000,000 Rochester, NY, 3.05% GO BANs, 11/5/93 NR(2) 5,000,010
--------------------------------------------------------------------
886,875 Schenectady, NY, IDA Weekly VRDNs (McClellan Street
Associates)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor
Credit BPA) P-1 886,875
--------------------------------------------------------------------
960,000 Schuylerville, NY, Central School District, 2.74% BANs,
6/22/94 NR 960,534
--------------------------------------------------------------------
4,200,000 South Seneca, NY, Central School District, 2.65% BANs, 6/24/94 NR 4,201,301
--------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
$ 1,000,000 Suffolk County, NY, 3.00% TANs (Series II)/
(Chemical Bank LOC) 9/15/94 MIG1 $ 1,001,270
--------------------------------------------------------------------
3,998,000 Suffolk County, NY, 3.25% RANs, 10/28/94 NR 4,013,343
--------------------------------------------------------------------
4,200,000 Suffolk County, NY, IDA Weekly VRDNs (C & J Realty Corp.)/(Dai-Ichi
Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 4,200,000
--------------------------------------------------------------------
725,833 Suffolk County, NY, IDA Weekly VRDNs (CS Property/ Tara Toy,
Inc.)/(Dai-Ichi Kangyo Bank, Ltd. LOC, Ford Motor Credit BPA) P-1 725,834
--------------------------------------------------------------------
704,000 Suffolk County, NY, IDA Weekly VRDNs (D.A. Yaron)/ (Dai-Ichi Kangyo
Bank, Ltd. LOC, Ford Motor Credit BPA)/(Subject to AMT) P-1 704,000
--------------------------------------------------------------------
1,350,000 Suffolk County, NY, IDA Weekly VRDNs (Poly Research Corp.)/(Marine
Midland Bank N.A. LOC)/(Subject to AMT) A-2 1,350,000
--------------------------------------------------------------------
1,800,000 Suffolk County, NY, IDA, 3.90% Semi-Annual TOBs (W.W. Grainger, Inc.
Guaranty), Optional Tender 12/1/93 A-1+ 1,800,000
--------------------------------------------------------------------
6,495,000 Warren & Washington Counties, NY, IDA, Monthly VRDNs (Sandy Hill
Corp.)/(Fleet Bank of New York N.A. LOC)/(Subject to AMT) A-1 6,495,000
--------------------------------------------------------------------
2,500,000 Waterville, NY, Central School District, 2.75% BANs,
4/15/94 NR(3) 2,500,542
--------------------------------------------------------------------
1,665,000 Yates County, NY, IDA, Weekly VRDNs (Series 1992A)/ (Clearplass
Containers, Inc.)/(Norstar Bank of Upstate NY LOC)/(Subject to AMT) A-1 1,665,000
--------------------------------------------------------------------
4,000,000 Yonkers, NY, IDA Weekly VRDNs (Consumers Union
Facility)/(Industrial Bank of Japan Ltd. LOC) VMIG1 4,000,000
-------------------------------------------------------------------- ---------------
Total 334,953,526
-------------------------------------------------------------------- ---------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S
PRINCIPAL OR S&P*
AMOUNT (NOTE 5) VALUE
<C> <S> <C> <C>
- -------------- -------------------------------------------------------------------- ---------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
PUERTO RICO--2.2%
--------------------------------------------------------------------
$ 3,100,000 Government Development Bank of Puerto Rico Weekly VRDNs (Credit
Suisse and Sumitomo Bank Ltd., LOCs) A-1+ $ 3,100,000
--------------------------------------------------------------------
4,275,000 Puerto Rico Industrial Medical and Environmental
Pollution Control Facilities Authority, 3.35% Annual
TOBs, (American Home Products Guaranty), Optional
Tender 12/1/93 P-1 4,275,000
-------------------------------------------------------------------- ---------------
Total 7,375,000
-------------------------------------------------------------------- ---------------
TOTAL INVESTMENTS, AT AMORTIZED COST $ 342,328,526\
-------------------------------------------------------------------- ---------------
</TABLE>
* See Notes to Portfolio of Investments.
\ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($333,241,974) at
October 31, 1993.
The following abbreviations may be used in this portfolio:
AMBAC--American Municipal Bond
Assurance Corporation
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
BPA--Bond Purchase Agreement
CP--Commercial Paper
FGIC--Financial Guaranty Insurance Company
FHA--Federal Housing Administration
GO--General Obligation
HDC--Housing Development Corporation
HFA--Housing Finance Authority/Agency
IDA--Industrial Development Authority
LOC--Letter of Credit
LOCs--Letters of Credit
MBIA--Municipal Bond Investors Assurance
RANs--Revenue Anticipation Notes
TANs--Tax Anticipation Notes
TOBs--Tender Option Bonds
TRANs--Tax and Revenue Anticipation Notes
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
NOTE RATINGS
S&P
A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S
Moody's short-term ratings are designated Moody's Investment Grade (MIG OR VMIG
(SEE BELOW)). The purpose of the MIG of VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDN)
AND
TENDER OPTION BONDS (TOB)
S&P
Standard & Poor's assigns dual ratings to all long-term debt issues that have as
part of their provisions a variable rate demand feature. The first rating
(long-term rating) addresses the likelihood of repayment of principal and
interest when due, and the second rating (short-term rating) describes the
demand characteristics. Several examples are AAA/A-1+, AA/A-1K, A/A-1. (The
definitions for the long-term and the short-term ratings are provided below.)
MOODY'S
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the second representing an evaluation of
the degree of risk associated with the demand feature. The VMIG
rating can be assigned a 1 or 2 designation using the same definitions described
above for the MIG rating.
COMMERCIAL PAPER (CP)
S&P
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
A-1 This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
A-2 Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated "A-1".
MOODY'S
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations.
LONG TERM DEBT
S&P
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
MOODY'S
Aaa Bonds that are rated AAA are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large margin and principal
is secure. While the various protective elements are likely to change, such
changes which can be foreseen are most unlikely to impair the fundamentally
strong position of such issues.
Aa Bonds that are rated AA are judged to be of high quality by all standards.
Together with the AAA group they comprise what are generally known as high
grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in AAA
securities or fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term risks appear
somewhat larger than in AAA securities.
A Bonds that are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment some time in the future.
*Those securities marked with a single asterisk (*) in the Fund's portfolio have
not been rated by Moody's or S&P, but the rating given is either the Moody's or
S&P rating assigned to either short-term or long-term securities of the
guarantor.
NR indicates the bonds or notes are not rated by Moody's or Standard & Poor's.
(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by Standard & Poor's or "Aaa" by Moody's.
(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by Standard & Poor's or "Aa" by Moody's.
(3) The underlying issuer/obligor/guarantor has other outstanding debt rated "A"
by Standard & Poor's or Moody's.
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 1A) $ 342,328,526
- ------------------------------------------------------------------------------------------------
Cash 501,180
- ------------------------------------------------------------------------------------------------
Interest receivable 2,105,676
- ------------------------------------------------------------------------------------------------ ---------------
Total assets 344,935,382
- ------------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------------
Payable for investments purchased $ 11,010,998
- --------------------------------------------------------------------------------
Dividends payable 494,123
- --------------------------------------------------------------------------------
Accrued expenses and other liabilities 188,287
- -------------------------------------------------------------------------------- --------------
Total liabilities 11,693,408
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSETS for 333,259,904 shares of beneficial interest outstanding $ 333,241,974
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------
Paid-in capital $ 333,259,904
- ------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (17,930)
- ------------------------------------------------------------------------------------------------ ---------------
Total $ 333,241,974
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share--Institutional Service Shares
($274,357,415 / 274,375,542 shares of beneficial interest outstanding) $1.00
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share--Cash II Shares ($58,884,559 /
58,884,362 shares of beneficial interest outstanding) $1.00
- ------------------------------------------------------------------------------------------------ ---------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest Income (Note 1B) $ 7,135,989
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 1,065,970
- ------------------------------------------------------------------------------------
Trustees' fees 13,454
- ------------------------------------------------------------------------------------
Administrative personnel and services (Note 4) 329,428
- ------------------------------------------------------------------------------------
Custodian, transfer, dividend disbursing agent fees and expenses 169,411
- ------------------------------------------------------------------------------------
Distribution Services fees (Note 4) 264,066
- ------------------------------------------------------------------------------------
Trust share registration costs 28,939
- ------------------------------------------------------------------------------------
Legal fees 24,897
- ------------------------------------------------------------------------------------
Auditing fees 18,046
- ------------------------------------------------------------------------------------
Printing and postage 24,896
- ------------------------------------------------------------------------------------
Taxes 403
- ------------------------------------------------------------------------------------
Insurance premiums 10,078
- ------------------------------------------------------------------------------------
Miscellaneous 2,987
- ------------------------------------------------------------------------------------ -------------
Total expenses 1,952,575
- ------------------------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 460,455
- -----------------------------------------------------------------------
Waiver of distribution services fees (Note 4) 313 460,768
- ----------------------------------------------------------------------- ----------- -------------
Net expenses 1,491,807
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 5,644,182
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments--identified cost basis 1,437
- --------------------------------------------------------------------------------------------------- -------------
Net increase in net assets resulting from operations $ 5,645,619
- --------------------------------------------------------------------------------------------------- -------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
32
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1993 1992
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------------
Net investment income $ 5,644,182 $ 6,217,219
- -----------------------------------------------------------------------------
Net realized gain on investments--identified cost basis 1,437 1,089
- ----------------------------------------------------------------------------- ---------------- ----------------
Net increase in net assets resulting from operations 5,645,619 6,218,308
- ----------------------------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2)--
- -----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Institutional Service Shares (4,957,980) (5,805,237)
- -----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Cash Series Shares (2,054) (362,632)
- -----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Cash II Shares (684,148) (49,350)
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets resulting from distributions (5,644,182) (6,217,219)
- ----------------------------------------------------------------------------- ---------------- ----------------
TRUST SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -----------------------------------------------------------------------------
Proceeds from sales of shares 705,610,755 454,674,027
- -----------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 903,326 660,253
- -----------------------------------------------------------------------------
Cost of shares redeemed (553,583,683) (479,066,956)
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from Trust share transactions 152,930,398 (23,732,676)
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets 152,931,835 (23,731,587)
- -----------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------
Beginning of period 180,310,139 204,041,726
- ----------------------------------------------------------------------------- ---------------- ----------------
End of period $ 333,241,974 $ 180,310,139
- ----------------------------------------------------------------------------- ---------------- ----------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1993
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Trust is registered under the Investment Company Act of 1940, as amended, as
a non-diversified, open-end, management investment company. The following is a
summary of significant accounting policies consistently followed by the Trust in
the preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
New York Municipal Cash Trust provides two classes of shares ("Institutional
Service Shares" and "Cash II Shares"). Each class of shares is sold pursuant to
a distribution plan ("Plan") adopted in accordance with Investment Company Act
Rule 12b-1. Prior to August 27, 1992, the Trust had provided a third class of
shares ("Cash Series Shares"). On that date the Board of Trustees voted to
reduce the 12b-1 fee of the Cash Series Shares to 0.25 of 1% of average daily
net assets, and to combine these shares with Cash II Shares, both effective
November 9, 1992.
A. VALUATION OF INVESTMENTS--The Board of Trustees (the "Trustees") has
determined that the best method currently available for valuing portfolio
securities is amortized cost. The Trust's use of the amortized cost method
to value its portfolio securities is conditioned on its compliance with
Rule 2a-7 under the Investment Company Act of 1940, as amended.
Since the New York Municipal Cash Trust may invest a substantial portion of
its assets in issuers located in one state, it will be more susceptible to
factors adversely affecting issuers of that state, than would be a
comparable general tax-exempt mutual fund. In order to reduce the risk
associated with such factors, at October 31, 1993, 59.4% of the securities
in the portfolio were backed by various letters of credit. The aggregate by
financial institution ranges from 0.29% to 7.39% of total investments.
B. INCOME--Interest income is recorded on the accrual basis. Interest income
includes interest earned net of premium, and original issue discount as
required by the Internal Revenue Code.
C. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of
the Internal Revenue Code, as amended, (the "Code") applicable to
investment companies and to distribute to shareholders each year all of its
taxable income. Accordingly, no provision for federal income or excise tax
is necessary. Dividends paid by the Trust representing net interest
received on tax-exempt municipal securities are not includable by
shareholders as gross income for federal tax purposes because the Trust
intends to meet certain requirements of the Code applicable to regulated
investment companies which will enable the Trust to pay exempt interest
dividends. The portion of such interest, if any, earned on private activity
bonds issued after August 7, 1986, may be considered a tax preference item
to shareholders. At October 31, 1993, the Trust, for federal tax purposes,
has a capital loss carryforward of $17,930 which will reduce the Trust's
taxable income arising from future net realized gains on investments, if
any, to the extent permitted by the Code, and thus will reduce the amount
of the distributions to shareholders which would otherwise be necessary to
relieve the Trust of any liability for federal tax. Pursuant to the Code,
such capital loss carryforward will expire in 1996.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. To the extent the Trust
engages in such transactions, it will do so for the purposes of acquiring
portfolio securities consistent with its investment objectives and policies
and not for the purpose of investment leverage. The Trust will record a
when-issued security and the related liability on the trade date. Until the
securities are received and paid for, the Trust will maintain security
positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued
or delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
E. OTHER--Investment transactions are accounted for on the date of the
transaction.
F. EXPENSES--Expenses of the Fund (other than distribution services fees) and
waivers and reimbursements, if any, are allocated to each class of shares
based on its relative daily average net assets.
(2) DIVIDENDS
The Trust computes its net income daily and, immediately prior to the
calculation of its net asset value at the close of business, declares and
records dividends to shareholders of record at the time of the previous
computation of the Trust's net asset value. Payment of dividends is made monthly
in cash or in additional shares at the net asset value on the payable date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1993 1992
- -------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares outstanding, beginning of period 164,491,602 191,616,115
- --------------------------------------------------------------------------------
Shares sold 547,195,442 422,241,067
- --------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 399,406 301,103
- --------------------------------------------------------------------------------
Shares redeemed (437,710,908) (449,666,683)
- -------------------------------------------------------------------------------- --------------- ---------------
Shares outstanding, end of period 274,375,542 164,491,602
- -------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CASH SERIES SHARES* 1993* 1992
- -------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares outstanding, beginning of period 11,196,839 12,390,511
- --------------------------------------------------------------------------------
Shares sold 34,712 20,649,454
- --------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared -- 357,566
- --------------------------------------------------------------------------------
Shares redeemed -- (22,200,692)
- --------------------------------------------------------------------------------
Shares exchanged for Cash II Shares (11,231,551) --
- -------------------------------------------------------------------------------- --------------- ---------------
Shares outstanding, end of period -- 11,196,839
- -------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CASH II SHARES* 1993 1992
- -------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares outstanding, beginning of period 4,641,065 55,556
- --------------------------------------------------------------------------------
Shares sold 147,149,050 11,783,506
- --------------------------------------------------------------------------------
Shares issued in exchange for Cash Series Shares 11,231,551 --
- --------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 503,920 1,584
- --------------------------------------------------------------------------------
Shares redeemed (104,641,224) (7,199,581)
- -------------------------------------------------------------------------------- --------------- ---------------
Shares outstanding, end of period 58,884,362 4,641,065
- -------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
*_ Beginning November 9, 1992, the Rule 12b-1 fee for Cash Series Shares was
reduced to 0.25 of 1% of average daily net assets, and these shares were
combined with Cash II Shares.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Federated Management, the Trust's investment adviser ("Adviser"), receives for
its services an annual investment advisory fee equal to .40 of 1% of the Trust's
average daily net assets, subject to an undertaking to reimburse the Trust to
the extent of its advisory fee, the amount, if any, by which the Trust's
aggregate annual operating expenses (excluding interest, taxes, brokerage
commissions, distribution service fees paid directly by the Trust, federal and
state registration expenses, and extraordinary expenses) exceed .45 of 1% of
average daily net assets. For the year ended October 31, 1993, Adviser earned an
investment advisory fee of $1,065,970 of which $460,455 was waived.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Trust will reimburse Federated
Securities Corp., ("FSC"), the principal distributor, from assets of the Trust,
for fees it paid which relate to the distribution and administration of the
Trust's Institutional Service Shares, Cash Series Shares, and Cash II Shares.
The Plan provides that the Trust may incur distribution expenses up to .10 of 1%
of the average daily net assets of the Trust's Institutional Service Shares, .50
of 1% of the average daily net assets of the Cash Series Shares, and .25 of 1%
of the average daily net assets of the Cash II Shares, annually, to pay
commissions, maintenance fees and to compensate the distributor. During the year
ended October 31, 1993, FSC was
paid $176,146 in distribution services fees for Institutional Service Shares and
$625 for Cash Series Shares of which $313 was voluntarily waived. The Cash II
Series Shares incurred $87,295 of distribution fees, none of which was waived.
Administrative personnel and services were provided at approximate cost by
Federated Administrative Services Inc. Certain of the Officers and Trustees of
the Trust are Officers and Directors of the above corporations.
During the year ended October 31, 1993 the Trust engaged in purchase and sale
transactions with other funds advised by the adviser pursuant to rule 17A-7 of
the Investment Company Act of 1940 amounting to $245,475,568 and $235,041,393,
respectively. These purchases and sales were conducted on an arms-length basis
insofar as they were transacted for cash consideration only, at independent
current market prices and without brokerage commission, fee or other
remuneration.
(5) CURRENT CREDIT RATINGS
Current credit ratings and related notes are unaudited.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
NEW YORK MUNICIPAL CASH TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of New York Municipal Cash Trust as of October 31,
1993, the related statement of operations for the year then ended, the statement
of changes in net assets for the years ended October 31, 1993, and 1992, and the
financial highlights (see pages 2, and 19 of the prospectus) for each of the
years in the ten-year period ended October 31, 1993. These financial statements
and financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
October 31, 1993 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of New York Municipal
Cash Trust as of October 31, 1993, the results of its operations, the changes in
its net assets, and its financial highlights for the respective stated periods
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
Boston, Massachusetts
December 17, 1993
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
New York Municipal Cash Trust Federated Investors Tower
Cash II Shares Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8604
Trust Company Boston, Massachusetts 02266-8604
- ---------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin 2101 L Street, N.W.
Washington, D.C. 20037
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
White & Case 1155 Avenue of the Americas
New York, New York 10036
- ---------------------------------------------------------------------------------------------------------------------
Independent Auditor
Deloitte & Touche 125 Summer Street
Boston, Massachusetts 02110-1617
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL
CASH TRUST
CASH II SHARES
PROSPECTUS
A Non-Diversified Portfolio of New York
Municipal Cash Trust, An Open End,
Management Investment Company
December 31, 1993
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
A SUBSIDIARY OF FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
8120103A-CII (12/93)
NEW YORK MUNICIPAL CASH TRUST
CASH II SHARES
INSTITUTIONAL SERVICE SHARES
COMBINED STATEMENT OF ADDITIONAL INFORMATION
This Combined Statement of Additional Information should be read with
the respective prospectus for Cash II Shares and Institutional Service
Shares of New York Municipal Cash Trust (the "Trust") dated December
31, 1993. This Statement is not a prospectus itself. To receive a copy
of either prospectus, write or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated December 31, 1993
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE TRUST 1
- ---------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------------
Acceptable Investments 1
When-Issued and Delayed Delivery
Transactions 1
Temporary Investments 1
New York Investment Risks 2
Investment Limitations 2
Concentration of Investments 4
TRUST MANAGEMENT 4
- ---------------------------------------------------------------
Officers and Trustees 4
The Funds 6
Trust Ownership 7
Trustee Liability 7
INVESTMENT ADVISORY SERVICES 7
- ---------------------------------------------------------------
Adviser to the Fund 7
Advisory Fees 7
ADMINISTRATIVE ARRANGEMENTS 8
- ---------------------------------------------------------------
ADMINISTRATIVE SERVICES 8
- ---------------------------------------------------------------
BROKERAGE TRANSACTIONS 8
- ---------------------------------------------------------------
PURCHASING SHARES 8
- ---------------------------------------------------------------
Distribution Plan 9
Conversion to Federal Funds 9
DETERMINING NET ASSET VALUE 9
- ---------------------------------------------------------------
Use of the Amortized Cost Method 9
REDEEMING SHARES 10
- ---------------------------------------------------------------
Redemption in Kind 10
TAX STATUS 11
- ---------------------------------------------------------------
The Fund's Tax Status 11
YIELD 11
- ---------------------------------------------------------------
EFFECTIVE YIELD 11
- ---------------------------------------------------------------
TAX-EQUIVALENT YIELD 11
- ---------------------------------------------------------------
Tax Equivalency Table 11
PERFORMANCE COMPARISONS 12
- ---------------------------------------------------------------
APPENDIX 13
- ---------------------------------------------------------------
GENERAL INFORMATION ABOUT THE TRUST
- --------------------------------------------------------------------------------
New York Municipal Cash Trust was established as a Massachusetts business trust
under a Declaration of Trust dated March 17, 1982.
Shares of the Fund are offered in two classes, Cash II Shares and Institutional
Service Shares (individually and collectively referred to as "Shares"). This
combined statement of additional information relates to the above-
mentioned shares of the Fund.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide current income exempt from federal
regular income tax and the personal income taxes imposed by New York State and
New York municipalities consistent with stability of principal. The Fund invests
in New York Municipal Securities with remaining maturities of one year or less
at the time of purchase by the Fund. This investment policy and the objective
stated above cannot be changed without approval of shareholders.
ACCEPTABLE INVESTMENTS
The Fund invests primarily in debt obligations issued by or on behalf of New
York and of other states, territories and possessions of the United States,
including the District of Columbia, and any political subdivision or financing
authority of any of these, the income from which is, in the opinion of qualified
legal counsel, exempt from federal regular income tax and New York state income
tax imposed upon non-corporate taxpayers ("Municipal Securities"). When
determining whether a Municipal Security presents minimal credit risks, the
investment adviser considers the creditworthiness of the issuer of a New York
Municipal Security, the issuer of a demand feature if the Fund has the
unconditional right to demand payment for the Municipal Securities, or the
guarantor of payment by either of those issuers.
If a security loses its rating or the security's rating is reduced below the
required minimum after the Fund purchased it, the Fund is not required to sell
the security. The investment adviser considers this event, however, in its
determination of whether the Fund should continue to hold the security in its
portfolio. If ratings made by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("Standard & Poor's") change because of changes in
those organizations or in their rating systems, the Fund will try to use
comparable ratings or standards in accordance with the investment policies
described in the Fund's prospectus.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective and
policies, not for investment leverage.
These transactions are made to secure what is considered to be an advantageous
price and yield for the Fund. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices.
No fees or other expenses, other than normal transaction costs, are incurred.
However, liquid assets of the Fund sufficient to make payment for the securities
to be purchased are segregated on the Fund's records at the trade date. These
securities are marked to market daily and maintained until the transaction is
settled.
TEMPORARY INVESTMENTS
The Fund may also invest temporarily in high quality investments during times of
unusual market conditions for defensive purposes and to maintain liquidity.
During the last fiscal year, the Fund did not invest in temporary investments
and does not presently intend to do so in the current fiscal year.
REPURCHASE AGREEMENTS
Repurchase agreements are arrangements in which banks, broker/dealers,
and other recognized financial institutions sell U.S. government
securities or other securities to the Fund and agree at the time of sale
to repurchase them at a mutually agreed upon time and price within one
year from the date of acquisition. The Fund or its custodian will take
possession of the securities subject to repurchase agreements and these
securities will be marked to market daily. To the extent that the
original seller does not repurchase the securities from the Fund, the
Fund could receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller filed for
bankruptcy or became insolvent, disposition of such securities by the
Fund might be delayed pending court action. The Fund believes that under
the regular procedures normally in effect for custody of the Fund's
portfolio securities subject to repurchase agreements, a court of
competent jurisdiction would rule in favor of the Fund and allow
retention or disposition of such securities. The Fund will only enter
into repurchase agreements with banks and other recognized financial
institutions, such as broker/dealers, which are found by the Fund's
investment adviser to be creditworthy pursuant to guidelines established
by the Trustees.
From time to time, such as when suitable New York Municipal Securities are not
available, the Fund may invest a portion of its assets in cash. Any portion of
the Fund's assets maintained in cash will reduce the amount of assets in New
York Municipal Securities and thereby reduce the Fund's yield.
NEW YORK INVESTMENT RISKS
The Fund invests in obligations of New York issuers which results in the Fund's
performance being subject to risks associated with the overall conditions
present within the State. The following information is a brief summary of the
recent prevailing economic conditions and a general summary of the state's
financial status. This information is based on official statements relating to
securities that have been offered by New York issuers and from other sources
believed to be accurate but should not be relied upon as a complete description
of all relevant information.
The State of New York has experienced fiscal problems for several years as a
result of negligible growth, increased human service needs and the lingering
recession that hit the State harder than others. Though the State enjoyed good
growth throughout the early to mid-1980's, unemployment has risen drastically
and over 250,000 jobs have been lost in the past four years. The State's economy
is highly developed with a large emphasis in service, trade, financial services,
and real estate. While very diverse, extensive job losses in each of these areas
has placed a burden on the State to maintain employment, company development and
a stable tax base.
As reflected in the financial results, the State has a large accumulated deficit
that is over 20% of the 1993 budgeted revenues of the General Fund. The overall
wealth of the State's population as reflected by the per capita income offers a
positive credit enhancement and is among the highest in the nation. The debt per
capita, though, is also among the highest and poses a large burden on its
residents.
The importance of New York City to the State's economy is also an important
consideration since it represents a significant portion of the overall economy
of the State. The City has struggled to maintain fiscal stability and has
performed adequately in contrast to the difficult economic conditions in the New
York/New Jersey metropolitan area. Any major changes to the financial condition
of the City would ultimately have an effect on the State.
The overall financial condition of the State can also be illustrated by the
changes of its debt ratings. During the last several years during which the
State experienced its financial difficulties, its general obligation long-term
debt ratings as determined by Moody's declined from A1 to A in 1990 while S&P
downgraded the State's debt from A to A- in early 1992. The State has the second
lowest long term debt rating among those states with outstanding general
obligation ratings. The short-term debt ratings are within the top two rating
categories: MIG2 for Moody's and SP-1 for S&P.
The Fund's concentration in securities issued by the State and its political
subdivisions provides a greater level of risk than a fund which is diversified
across numerous states and municipal entities. The ability of the State or its
municipalities to meet their obligations will depend on the availability of tax
and other revenues; economic, political, and demographic conditions within the
State; and the underlying fiscal condition of the State and its municipalities.
INVESTMENT LIMITATIONS
The Fund will not change any of the investment limitations described below
without approval of shareholders.
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for the
clearance of transactions.
BORROWING MONEY
The Fund will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in
excess of 5% of the value of its total assets or in an amount up to one-
third of the value of its total assets, including the amount borrowed, in
order to meet redemption requests without immediately selling portfolio
instruments. This borrowing provision is not for investment leverage but
solely to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio instruments
would be inconvenient or disadvantageous.
Interest paid on borrowed funds will serve to reduce the Fund's income.
The Fund will liquidate any such borrowings as soon as possible and may
not purchase any portfolio instruments while any borrowings are
outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may pledge assets having
a market value not exceeding 10% of the value of total assets at the time
of the pledge.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate, although it may invest in
New York municipal securities secured by real estate or interests in real
estate.
INVESTING IN COMMODITIES AND MINERALS
The Fund will not purchase or sell commodities, commodity contracts, or
oil, gas, or other mineral exploration or development programs.
UNDERWRITING
The Fund will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations.
MAKING LOANS
The Fund will not make loans except that it may acquire publicly or
nonpublicly issued New York municipal securities, in accordance with its
investment objective, policies, and limitations.
ACQUIRING SECURITIES
The Fund will not acquire the voting securities of any issuer, except as
part of a merger, consolidation, reorganization, or acquisition of
assets. It will not invest in securities issued by any other investment
company or investment trust.
INVESTMENTS IN ANY ONE ISSUER
With respect to securities comprising 75% of its assets, the Fund will
not invest more than 10% of its total assets in the securities of any one
issuer.
Under this limitation, each governmental subdivision, including states
and the District of Columbia, territories, possessions of the United
States, or their political subdivisions, agencies, authorities,
instrumentalities, or similar entities, will be considered a separate
issuer if its assets and revenues are separate from those of the
governmental body creating it and the security is backed only by its own
assets and revenues.
Industrial development bonds backed only by the assets and revenues of a
nongovernmental user are considered to be issued solely by that user. If
in the case of an industrial development bond or government-issued
security, a governmental or other entity guarantees the security, such
guarantee would be considered a separate security issued by the guarantor
as well as the other issuer, subject to limited exclusions allowed by the
Investment Company Act of 1940.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers (or in the alternative, guarantors, where
applicable) which have records of less than three years of continuous
operations, including the operation of any predecessor.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS OF THE TRUST
The Fund will not purchase or retain the securities of any issuer if the
officers and Trustees or its investment adviser owning individually more
than 1/2 of 1% of the issuer's securities together own more than 5% of
the issuer's securities.
DEALING IN PUTS AND CALLS
The Fund will not purchase or sell puts, calls, straddles, spreads, or
any combination of them, except that the Fund may purchase municipal
securities accompanied by agreements of sellers to repurchase them at the
Fund's option.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 10% of the value of its total assets
in illiquid securities, including repurchase agreements maturing in more
than seven days.
ISSUING SENIOR SECURITIES
The Fund will not issue senior securities, except as permitted by the
investment objective and policies and investment limitations of the Fund.
In order to permit the sale of the Fund's shares in certain states, the Fund may
make commitments more restrictive than the investment limitations described
above. Accordingly, the Fund has undertaken not to invest in: real estate
limited partnerships; and oil, gas, or other mineral leases. Should the Fund
determine that any such commitment is no longer in the best interests of the
Fund and its shareholders, it will revoke the commitment by terminating sales of
its shares in the state involved.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
The Fund did not borrow money or pledge securities in excess of 5% of the value
of its total assets during the last fiscal year and has no present intent to do
so in the coming fiscal year.
The Fund does not consider the issuance of separate classes of shares to
constitute an issue of 'senior securities' within the meaning of the investment
limitations set forth above.
CONCENTRATION OF INVESTMENTS
With respect to temporary investments, the Fund will not purchase securities
(other than securities issued or guaranteed by the U.S. government, its
agencies, or instrumentalities) if, as a result of such purchase, more than 25%
of the value of the Fund's total assets would be invested in any one industry.
However, the Fund may invest more than 25% of the value of its assets in cash or
cash items (including time and demand deposits of U.S. branches of domestic
banks, such as certificates of deposit), securities issued or guaranteed by the
U.S. government, its agencies, or instrumentalities, or instruments secured by
these money market instruments, such as repurchase agreements.
TRUST MANAGEMENT
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, principal occupations,
and present positions, including any affiliation with Federated Management,
Federated Investors, Federated Securities Corp., and Federated Administrative
Services, Inc., and the Funds (as defined below).
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C>
John F. Donahue\* Chairman and Chairman and Trustee, Federated Investors; Chairman and Trustee,
Federated Investors Tower Trustee Federated Advisers, Federated Management, and Federated Research;
Pittsburgh, PA Director, AEtna Life and Casualty Company; Chief Executive Officer and
Director, Trustee, or Managing General Partner of the Funds; formerly,
Director, The Standard Fire Insurance Company. Mr. Donahue is the father
of J. Christopher Donahue, President of the Trust.
John T. Conroy, Jr. Trustee President, Investment Properties Corporation; Senior Vice-President,
Wood/IPC Commercial John R. Wood and Associates, Inc., Realtors; President, Northgate
Department Village Development Corporation; General Partner or Trustee in private
John R. Wood and real estate ventures in Southwest Florida; Director, Trustee, or
Associates Inc., Managing General Partner of the Funds; formerly President, Naples
Realtors Property Management, Inc.
3255 Tamiami Trail North
Naples, FL
William J. Copeland Trustee Director and Member of the Executive Committee; Michael Baker Inc.;
One PNC Plaza- Director, Trustee, or Managing General Partner of the Funds; formerly
23rd Floor Vice Chairman and Director, PNC Bank, N.A. and PNC Bank Corp. and
Pittsburgh, PA Director, Ryan Homes, Inc.
James E. Dowd Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
571 Hayward Mill Road Trustee, or Managing General Partner of the Funds; formerly, Director,
Concord, MA Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
3471 Fifth Avenue Hospitals; Clinical Professor of Medicine and Trustee, University of
Suite 1111 Pittsburgh; Director, Trustee, or Managing General Partner of the Funds.
Pittsburgh, PA
Edward L. Flaherty, Jr.\ Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park
5916 Penn Mall Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director,
Pittsburgh, PA Trustee, or Managing General Partner of the Funds; formerly Counsel,
Horizon Financial, F.A., Western Region.
Peter E. Madden Trustee Consultant; State Representative, Commonwealth of Massachusetts;
225 Franklin Street Director, Trustee or Managing General Partner of the Funds; formerly,
Boston, MA President, State Street Bank & Trust Company and State Street Boston
Corporation; and Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
5916 Penn Mall Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or Managing
Pittsburgh, PA General Partner of the Funds; formerly, Vice Chairman, Horizon
Financial, F.A.
Wesley W. Posvar Trustee Professor Foreign Policy and Management Consultant; Trustee, Carnegie
1202 Cathedral of Endowment for International Peace; RAND Corporation; Online Computer
Learning Library Center Inc.; and U.S. Space Foundation; Chairman, Czecho Slovak
University of Pittsburgh Management Center; Director, Trustee, or Managing General Partner of the
Pittsburgh, PA Funds; President, Emeritus University of Pittsburgh; formerly, Chairman,
National Advisory Council for Enironmental Policy and Technology.
Marjorie P. Smuts Trustee Public relations/marketing consultant; Director, Trustee, or Managing
4905 Bayard Street General Partner of the Funds.
Pittsburgh, PA
John A. Staley, IV* Vice President Vice President and Trustee, Federated Investors; Executive Vice
Federated Investors Tower and Trustee President, Federated Securities Corp.; President and Trustee, Federated
Pittsburgh, PA Advisers, Federated Management, and Federated Research; Vice President
of the Funds; Director, Trustee, or Managing General Partner of some of
the Funds; formerly, Vice President, The Standard Fire Insurance Company
and President of its Federated Research Division.
J. Christopher Donahue Vice President President and Trustee, Federated Investors; Trustee, Federated Advisers,
Federated Investors Tower Federated Management, and Federated Research; President and Director,
Pittsburgh, PA Federated Administrative Services, Inc.; President or Vice President of
the Funds; Director, Trustee or Managing General Partner of some of the
Funds; Mr. Donahue is the son of John F. Donahue, Chairman and Trustee
of the Trust.
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors; Chairman and
Federated Investors Tower Director, Federated Securities Corp.; President or Vice President of the
Pittsburgh, PA Funds; Director or Trustee of some of the Funds.
Edward C. Gonzales Vice President Vice President, Treasurer and Trustee, Federated Investors; Vice
Federated Investors Tower and Treasurer President and Treasurer, Federated Advisers, Federated Management, and
Pittsburgh, PA Federated Research; Executive Vice President, Treasurer, and Director,
Federated Securities Corp.; Chairman, Treasurer, and Director, Federated
Administrative Services, Inc.; Trustee or Director of some of the Funds;
Vice President and Treasurer of the Funds.
Glen R. Johnson President Trustee, Federated Investors; President and/or Trustee of some of the
Federated Investors Tower Funds; staff member, Federated Securities Corp. and Federated
Pittsburgh, PA Administrative Services, Inc.
John W. McGonigle Vice President Vice President, Secretary, General Counsel, and Trustee, Federated
Federated Investors Tower and Secretary Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Pittsburgh, PA Federated Management, and Federated Research; Executive Vice President,
Secretary, and Director, Federated Administrative Services, Inc.;
Director and Executive Vice President, Federated Securities Corp.; Vice
President and Secretary of the Funds.
</TABLE>
*This Trustee is deemed to be an "interested person" of the Trust as
defined in the Investment Company Act of 1940.
\Members of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of Trustees between
meetings of the Board.
THE FUNDS
"The Funds," and "Funds" mean the following investment companies: A.T. Ohio
Tax-Free Money Fund; American Leaders Fund, Inc.; Annuity Management Series;
Automated Cash Management Trust; Automated Government Money Trust; The Boulevard
Funds; California Municipal Cash Trust; Cash Trust Series Inc.; Cash Trust
Series II; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
FT Series, Inc.; Federated ARMs Fund; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated Growth Trust; Federated High
Yield Trust; Federated Income Trust; Federated Income Securities Trust;
Federated Index Trust; Federated Intermediate Government Trust; Federated Master
Trust; Federated Municipal Trust; Federated Short-Intermediate Government Trust;
Federated Short-Term U.S. Government Trust; Federated Stock Trust; Federated
Tax-Free Trust; Federated U.S. Government Bond Fund; First Priority Funds; Fixed
Income Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S.
Government Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust; Intermediate Municipal Trust; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty Term Trust, Inc.--1999;
Liberty U.S. Government Money Market Trust; Liberty Utility Fund, Inc.; Liquid
Cash Trust; Mark Twain Funds; Money Market Management Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust; New
York Municipal Cash Trust; 111 Corcoran Funds; The Planters Funds; Portage
Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term Municipal Trust;
Signet Select Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Trademark Funds; Trust for Financial Institutions; Trust for
Government Cash Reserves; Trust for Short-Term U.S. Government Securities; and
Trust for U.S. Treasury Obligations.
TRUST OWNERSHIP
Officers and Trustees own less than 1% of the Trust's outstanding shares.
As of November 29, 1993, the following shareholder of record owned 5% or more of
the outstanding Cash II Shares of the Fund: Charles Schwab & Co. Inc., San
Francisco, California, owned approximately 49,596,393 shares (71.07%); North
Fork Bank and Trust Company, Mattituck, New York, owned approximately 10,046,038
shares (15.32%).
As of November 29, 1993, the following shareholders of record owned 5% or more
of the outstanding Institutional Service Shares of the Fund: Fiduciary Trust
Company International, New York, New York, owned approximately 58,062,900 shares
(22.37%), Fleet Securities Corporation, Rochester, New York, owned approximately
55,474,786
shares (21.37%), The Bank of New York, New York, New York, owned approximately
42,005,313 shares (16.18%), Republic National Bank of New York, Brooklyn, New
York, owned approximately 21,875,072 shares (8.42%) and Schneider Mills, Inc.,
New York, New York owned approximately 14,549,283 shares (5.60%).
While such shares are held as nominee on behalf of numerous customers, to the
extent that the record holders may exercise voting rights over such shares, they
may be in a position to control the outcome of certain matters in the event that
any such matters are submitted for a vote of the shareholders.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE FUND
The Fund's investment adviser is Federated Management. It is a subsidiary of
Federated Investors. All of the voting securities of Federated Investors are
owned by a trust, the Trustees of which are John F. Donahue, his wife, and his
son J. Christopher Donahue. John F. Donahue, Chairman and Trustee of Federated
Management; Chairman and Trustee of Federated Investors; and Chairman and
Trustee of the Trust. John A. Staley, IV, President and Trustee of Federated
Management; Vice President and Trustee of Federated Investors; Executive Vice
President of Federated Securities Corp.; and Trustee and Vice President of the
Trust. J. Christopher Donahue is Trustee, Federated Management; President and
Trustee of Federated Investors; President and Director of Federated
Administrative Services, Inc.; and Vice President of the Trust. John W.
McGonigle is Vice President, Secretary and Trustee, Federated Management;
Trustee, Vice President, Secretary, and General Counsel, Federated Investors;
Director, Executive Vice President, and Secretary; Federated Administrative
Services, Inc.; Director and Executive Vice President; Federated Securities
Corp.; and Vice President and Secretary of the Trust.
The adviser shall not be liable to the Trust, the Fund or any shareholder of the
Fund for any losses that may be sustained in the purchase, holding, or sale of
any security, or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual investment
advisory fee as described in the prospectus. During the fiscal years ended
October 31, 1993, 1992, and 1991, the Fund's adviser earned $1,065,970,
$839,082, and $889,667, which was reduced by $460,455, $413,760, and $287,685,
respectively, because of undertakings to limit the Fund's expenses.
STATE EXPENSE LIMITATIONS
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2-1/2% per year of the first $30 million of average net assets, 2%
per year of the next $70 million of average net assets, and 1-1/2% per
year of the remaining average net assets, the adviser will reimburse the
Fund for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this expense
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the adviser will
be limited, in any single fiscal year, by the amount of the investment
advisory fee.
These arrangements are not part of the advisory contract and have been
established only to comply with applicable state authorities. They may be
amended or rescinded in the future.
ADMINISTRATIVE ARRANGEMENTS
- --------------------------------------------------------------------------------
For the fiscal years ended October 31, 1993 and 1992, the distributor paid
$286,080 and $254,888 to financial institutions for distribution and
administrative services. The administrative services include, but are not
limited to, providing office space, equipment, telephone facilities, and various
personnel, including clerical, supervisory, and computer, as is necessary or
beneficial to establish and maintain shareholders' accounts and records, process
purchase and redemption transactions, process automatic investments of client
account cash balances, answer routine client inquiries regarding the Fund,
assist clients in changing dividend options, account designations, and
addresses, and providing such other services as the Fund may reasonably request.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, Inc., a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund at approximate cost.
For the fiscal years ended October 31, 1993, 1992, and 1991, the Fund incurred
costs for administrative services of $329,428, $280,632, and $228,824,
respectively. John A. Staley, IV, an officer of the Fund, and Dr. Henry J.
Gailliot, an officer of Federated Management, the adviser to the Fund, each hold
approximately 15% and 20%, respectively, of the outstanding common stock and
serve as Directors of Commercial Data Services, Inc., a company which provides
computer processing services to Federated Administrative Services, Inc. For the
fiscal years ended October 31, 1993, 1992, and 1991, Federated Administrative
Services, Inc. paid approximately $165,431, $189,741, and $187,677,
respectively, for services provided by Commercial Data Services, Inc.
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the investment adviser will generally use those
who are recognized dealers in specific portfolio instruments, except when a
better price and execution of the order can be obtained elsewhere. The adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Board of Trustees.
The adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the adviser
and may include:
advice as to the advisability of investing in securities;
security analysis and reports;
economic studies;
industry studies;
receipt of quotations for portfolio evaluations; and
similar services.
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Research services provided by brokers may be used by the adviser or by
affiliates of Federated Investors in advising Federated Funds and other
accounts. To the extent that receipt of these services may supplant services for
which the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares are sold at their net asset value without a sales charge on days the New
York Stock Exchange and the Federal Reserve Wire System are open for business.
The procedure for purchasing Shares is explained in the respective prospectus
under "Investing in Cash II Shares" and "Investing in Institutional Service
Shares."
DISTRIBUTION PLAN
With respect to the Cash II Shares and Institutional Service Shares classes of
the Fund, the Trust has adopted a Plan pursuant to Rule 12b-1 which was
promulgated by the Securities and Exchange Commission pursuant to the Investment
Company Act of 1940. The Plan permits the payment of fees to administrators
(including broker/dealers and depository institutions such as commercial banks
and savings and loan associations) for distribution and administrative services.
The Plan is designed to stimulate administrators to provide distribution and
administrative support services to the Fund and its shareholders. The
administrative services are provided by a representative who has knowledge of
the shareholder's particular circumstances and goals, and include, but are not
limited to: communicating account openings; communicating account closings;
entering purchase transactions; entering redemption transactions; providing or
arranging to provide accounting support for all transactions, wiring funds and
receiving funds for Share purchases and redemptions, confirming and reconciling
all transactions, reviewing the activity in Fund accounts, and providing
training and supervision of broker personnel; posting and reinvesting dividends
to Fund accounts or arranging for this service to be performed by the Fund's
transfer agent; and maintaining and distributing current copies of prospectuses
and shareholder reports to the beneficial owners of shares of the Fund and
prospective shareholders.
By adopting the Plan, the Board of Trustees expects that the Fund will be able
to achieve a more predictable flow of cash for investment purposes and to meet
redemptions. This will facilitate more efficient portfolio management and assist
the Fund in seeking to achieve its investment objectives. By identifying
potential investors whose needs are served by the Fund's objective, and properly
servicing these accounts, the Fund may be able to curb sharp fluctuations in
rates of redemptions and sales.
Other benefits which the Fund hopes to achieve through the Plan include, but are
not limited to, the following: (1) an efficient and effective administrative
system; (2) a more efficient use of shareholder assets by having them rapidly
invested in the Fund, through an automatic transfer of funds from a demand
deposit account to an investment account, with a minimum of delay and
administrative detail; and (3) an efficient and reliable shareholder records
system and prompt responses to shareholder requests and inquiries concerning
their accounts.
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. State Street Bank acts as the
shareholder's agent in depositing checks and converting them to federal funds.
DETERMINING NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the value of a share at $1.00. The days on which
net asset value is calculated by the Fund are described in the prospectus.
USE OF THE AMORTIZED COST METHOD
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7, as amended (the
"Rule"), under the Investment Company Act of 1940. Under the Rule, the Trustees
must establish procedures reasonably designed to stabilize the net asset value
per share, as computed for purposes of distribution and redemption, at $1.00 per
share, taking into account current market conditions and the Fund's investment
objective.
Under the Rule, the Fund is permitted to purchase instruments which are subject
to demand features or standby commitments. As defined by the Rule as amended, a
demand feature entitles the Fund to receive the principal amount of the
instrument from the issuer or a third party (1) on no more than 30 days' notice
or (2) at specified intervals not exceeding one year on no more than 30 days'
notice. A standby commitment entitles the Fund to achieve same day settlement
and to receive an exercise price equal to the amortized cost of the underlying
instrument plus accrued interest at the time of exercise.
The Fund acquires instruments subject to demand features and standby commitments
to enhance the instruments' liquidity. The Fund treats demand features and
standby commitments as part of the underlying instruments, because the Fund does
not acquire them for speculative purposes and cannot transfer them separately
from the underlying instruments. Therefore, although the Rule defines demand
features and standby commitments as "puts", the Fund does not consider them to
be separate investments for purposes of its investment policies.
MONITORING PROCEDURES
The Trustees' procedures include monitoring the relationship between the
amortized cost value per share and the net asset value per share based
upon available indications of market value. The Trustees will decide
what, if any, steps should be taken if there is a difference of more than
.5 of 1% between the two values. The Trustees will take any steps they
consider appropriate (such as redemption in kind or shortening the
average portfolio maturity) to minimize any material dilution or other
unfair results arising from differences between the two methods of
determining net asset value.
INVESTMENT RESTRICTIONS
The Rule requires that the Fund limit its investments to instruments
that, in the opinion of the Trustees, present minimal credit risk and
have received the requisite rating from one or more nationally recognized
statistical rating organizations. If the instruments are not rated, the
Trustees must determine that they are of comparable quality. The Rule
also requires the Fund to maintain a dollar weighted average portfolio
maturity (not more than 90 days) appropriate to the objective of
maintaining a stable net asset value of $1.00 per share. In addition, no
instrument with a remaining maturity of more than one year can be
purchased by the Fund. For the treatment of variable rate municipal
securities with demand payment features, refer to "Variable Rate Demand
Notes" in the prospectus.
Should the disposition of a portfolio security result in a dollar
weighted average portfolio maturity of more than 90 days, the Fund will
invest its available cash to reduce the average maturity to 90 days or
less as soon as possible.
The Fund may attempt to increase yield by trading portfolio securities to
take advantage of short-term market variations. This policy may, from
time to time, result in high portfolio turnover. Under the amortized cost
method of valuation, neither the amount of daily income nor the net asset
value is affected by any unrealized appreciation or depreciation of the
portfolio.
In periods of declining interest rates, the indicated daily yield on shares of
the Fund computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above may tend to be higher than a
similar computation made by using a method of valuation based upon market prices
and estimates.
In periods of rising interest rates, the indicated daily yield on shares of the
Fund computed the same way may tend to be lower than a similar computation made
by using a method of calculation based upon market prices and estimates.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at the next computed net asset value after the Fund
receives the redemption request. Redemption procedures are explained in the
respective prospectus under "Redeeming Cash II Shares" and "Redeeming
Institutional Service Shares." Although the transfer agent does not charge for
telephone redemptions, it reserves the right to charge a fee for the cost of
wire-transferred redemptions of less than $5,000.
REDEMPTION IN KIND
Although the Trust intends to redeem Shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the respective Fund's portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.
The Trust has elected to be governed by Rule 18f-1 of the Investment Company Act
of 1940 under which the Trust is obligated to redeem Shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of the respective
class's net asset value during any 90-day period.
TAX STATUS
- --------------------------------------------------------------------------------
THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, the Fund must, among other
requirements:
derive at least 90% of its gross income from dividends, interest, and gains from
the sale of securities;
derive less than 30% of its gross income from the sale of securities held less
than three months;
invest in securities within certain statutory limits; and
distribute to its shareholders at least 90% of its net income earned during the
year.
YIELD
- --------------------------------------------------------------------------------
The Fund calculates its yield daily for all classes of shares, based upon the
seven days ending on the day of calculation, called the "base period." This
yield is computed by:
determining the net change in the value of a hypothetical account with a balance
of one share at the beginning of the base period, with the net change excluding
capital changes but including the value of any additional shares purchased with
dividends earned from the original one share and all dividends declared on the
original and any purchased shares;
dividing the net change in the account's value by the value of the account at
the beginning of the base period to determine the base period return; and
multiplying the base period return by (365/7).
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in either
class of shares, the performance will be reduced for those shareholders paying
those fees.
The Fund's yield for the Cash II Shares seven-day period ended October 31, 1993
was 1.89%. The yield for the Institutional Service Shares was 2.06% for the same
period.
EFFECTIVE YIELD
- --------------------------------------------------------------------------------
The Fund's effective yield for all classes of shares is computed by compounding
the unannualized base period return by:
adding 1 to the base period return;
raising the sum to the 365/7th power; and
subtracting 1 from the result.
The Fund's effective yield for Cash II Shares the seven-day period ended October
31, 1993 was 1.91%. The effective yield for the Institutional Service Shares was
2.08% for the same period.
TAX-EQUIVALENT YIELD
- --------------------------------------------------------------------------------
The tax-equivalent yield for all classes of shares of the Fund is calculated
similarly to the yield, but is adjusted to reflect the taxable yield that either
class of shares would have had to earn to equal its actual yield, assuming a 28%
or 31% federal tax rate and the regular personal income tax rate imposed by New
York, and assuming that income earned by the Fund is 100% tax-exempt on a
regular federal, state, and local basis.
The Fund's tax-equivalent yield for the Cash II Shares for the seven-day period
ended October 31, 1993 was 3.09%. The tax-equivalent yield for the Institutional
Service Shares was 3.37% for the same period. In each case, a combined federal
and state marginal tax rate of 38.9% was assumed.
TAX EQUIVALENCY TABLE
Each class of shares may also use a tax equivalency table in advertising and
sales literature for all classes of shares. The interest earned by the municipal
bonds in the Fund's portfolio generally remains free from federal regular income
tax, and from the regular personal income tax imposed by New York.* As the table
below indicates, a "tax-free" investment is an attractive choice for investors,
particularly in times of narrow spreads betwen "tax-free" and taxable yields.
<TABLE>
<S> <C> <C> <C> <C> <C>
TAXABLE YIELD EQUIVALENT FOR 1993
STATE OF NEW YORK
- -----------------------------------------------------------------------------------
COMBINED FEDERAL AND STATE
22.875% 35.875% 38.875% 43.875% 47.475%
- -----------------------------------------------------------------------------------
JOINT RETURN: $1- $36,901- $89,151- $140,001- OVER
36,900 89,150 140,000 250,000 $ 250,000
SINGLE RETURN: $1- $22,101- $53,501- $115,001- OVER
22,100 53,500 115,000 250,000 $ 250,000
- -----------------------------------------------------------------------------------
TAX-EXEMPT YIELD TAXABLE YIELD EQUIVALENT
- -----------------------------------------------------------------------------------
1.50% 1.94% 2.34% 2.45% 2.67% 2.86%
2.00 2.59 3.12 3.27 3.56 3.81
2.50 3.24 3.90 4.09 4.45 4.76
3.00 3.89 4.68 4.91 5.35 5.71
3.50 4.54 5.46 5.73 6.24 6.66
4.00 5.19 6.24 6.54 7.13 7.62
4.50 5.83 7.02 7.36 8.02 8.57
5.00 6.48 7.80 8.18 8.91 9.52
5.50 7.13 8.58 9.00 9.80 10.47
6.00 7.78 9.36 9.82 10.69 11.42
</TABLE>
Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Furthermore, additional state and local taxes paid on
comparable taxable investments were not used to increase federal deductions.
The chart above is for illustrative purposes only and only uses tax brackets
that went into effect beginning
January 1, 1993. It is not an indicator of past or future performance of either
class of shares.
*Some portion of the Fund's income may be subject to the federal alternative
minimum tax and state and local taxes.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The performance of all classes of shares depends upon such variables as:
portfolio quality;
average portfolio maturity;
type of instruments in which the portfolio is invested;
changes in interest rates on money market instruments;
changes in Fund expenses or either class of share's expenses; and
the relative amount of Fund cash flow.
From time to time the Fund may advertise the performance of any or all classes
of shares compared to similar funds or portfolios using certain indices,
reporting services, and financial publications. These may include the following:
LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all income dividends and capital gains distributions, if any.
From time to time, the Fund will quote its Lipper ranking in the "money market
instruments fund" category in advertising and sales literature.
Investors may use such reporting services in addition to the prospectuses of
either of the classes of shares of the Fund to obtain a more complete view of
the performance of that class before investing. Of course, when comparing
performance of either class to any index, factors such as composition of the
index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return and yield, investors should take into consideration any relevant
differences in funds such as permitted portfolio composition and methods used to
value portfolio securities and compute offering price.
Advertisements and other sales literature for all classes of shares may refer to
total return. Total return is the historic change in the value of an investment
in any of the classes based on the monthly reinvestment of dividends over a
specified period of time.
APPENDIX
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STANDARD AND POOR'S CORPORATION SHORT-TERM MUNICIPAL OBLIGATION RATING
DEFINITIONS
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC. SHORT-TERM MUNICIPAL OBLIGATION RATING
DEFINITIONS
MIG1/VMIG1--Notes which are rated MIG1/VMIG are of the best quality. There is
present strong protection by established cash flows, superior liquidity support,
or demonstrated broad-based access to the market for refinancing.
MIG2/VMIG2--Notes which are rated MIG2/VMIG2 are of high quality. Margins of
protection are ample although not so large as in MIG1/VMIG1 ratings.
FITCH INVESTORS SERVICE, INC. TAX-EXEMPT INVESTMENT NOTE RATING DEFINITIONS
FIN-1--Notes regarded as having the strongest degree of assurance for timely
payment.
FIN-2--Notes reflecting a degree of assurance for timely payment only slightly
less in degree than the highest category.
STANDARD & POOR'S CORPORATION COMMERCIAL PAPER RATING DEFINITIONS
A-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
A-2--Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
"A-1".
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATING DEFINITIONS
P-1--Issuers (or supporting institutions) rated Prime-1 (P-1) have a superior
ability for repayment of senior short-term debt obligations. P-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
Broad margins in earnings coverage of fixed financial charges and high internal
cash generation.
Well-established access to a range of financial markets and assured sources of
alternate liquidity.
P-2--Issuers (or supporting institutions) rated Prime-2 (P-2) have a strong
ability for repayment of senior short-term obligations. This will normally be
evidenced by many of the characteristics cited above, but to a lesser degree.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
FITCH INVESTORS SERVICE, INC. SHORT-TERM RATING DEFINITIONS
F-1+--(Exceptionally Strong Credit Quality). Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1--(Very Strong Credit Quality). Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".
F-2--(Good Credit Quality). Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as the "F-1+" and "F-1" categories.
8120103B (12/93)
