DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
INVESTMENTS OCTOBER 31, 1996
Showing Percentage of Total Value of Investments
U.S. TREASURY OBLIGATIONS - 16.8%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
U.S. TREASURY BILLS - 14.7%
4/3/97 5.54% $ 22,000,000 $ 21,508,657
4/3/97 5.55 47,000,000 45,949,315
4/3/97 5.59 40,000,000 39,099,000
5/29/97 5.71 18,000,000 17,435,700
5/29/97 5.74 36,000,000 34,866,175
7/24/97 5.73 13,000,000 12,481,337
8/21/97 5.63 10,000,000 9,566,197
8/21/97 5.66 10,000,000 9,564,570
8/21/97 5.67 36,000,000 34,429,391
9/18/97 5.68 12,000,000 11,424,340
9/18/97 5.70 16,000,000 15,231,027
9/18/97 5.71 16,000,000 15,229,243
266,784,952
U.S. TREASURY NOTES - 2.1%
4/30/97 5.30 38,000,000 38,259,340
TOTAL U.S. TREASURY OBLIGATIONS 305,044,292
REPURCHASE AGREEMENTS - 83.2%
MATURITY
AMOUNT
In a joint trading account
(U.S. Treasury Obligations)
dated 10/31/96 due 11/1/96
(Notes 2 and 3):
At 5.56% $ 1,376,212,623 1,376,000,000
At 5.57% 49,287,619 49,280,000
(U.S. Treasury Obligations)
dated 10/10/96 due 12/26/96:*
At 5.30% 80,906,889 80,000,000
TOTAL REPURCHASE AGREEMENTS 1,505,280,000
TOTAL INVESTMENTS - 100% $ 1,810,324,292
Total Cost for Income Tax Purposes $ 1,810,324,292
*Payable on seven-day demand.
INCOME TAX INFORMATION
At October 31, 1996 the fund had a capital loss carryforward of
approximately $421,000 which will expire on October 31, 2001.
A total of 18.96% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1996
1.ASSETS 2. 3.
4.Investment in securities, at value (including repurchase agreements of $1,505,280,000) - 5. $ 1,810,324,292
See accompanying schedule
6.Cash 7. 14,264,202
8.Interest receivable 9. 273,802
10. 11.TOTAL ASSETS 12. 1,824,862,296
13.LIABILITIES 14. 15.
16.Distributions payable $ 2,418,868 17.
18.Accrued management fee 717,545 19.
20.Other payables and accrued expenses 407,926 21.
22. 23.TOTAL LIABILITIES 24. 3,544,339
25.26.NET ASSETS 27. $ 1,821,317,957
28.Net Assets consist of: 29. 30.
31.Paid in capital 32. $ 1,821,688,864
33.Accumulated net realized gain (loss) on investments 34. (370,907)
35.36.NET ASSETS 37. $ 1,821,317,957
38.INITIAL CLASS : 40. $1.00
39.NET ASSET VALUE, offering price and redemption price per share
($1,800,907,401 (divided by) 1,801,274,152 shares)
41.CLASS B: 43. $1.00
42.NET ASSET VALUE, offering price and redemption price per share
($20,410,556 (divided by) 20,414,712 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
THREE MONTHS ENDED OCTOBER 31, 1996
44.45.INTEREST INCOME 46. $ 24,710,091
47.EXPENSES 48. 49.
50.Management fee $ 2,327,773 51.
52.Transfer agent fees 53.
54. Initial Class 779,481 55.
56. Class B 18,354 57.
58.Distribution fees - Class B 48,497 59.
60.Accounting fees and expenses 47,493 61.
62.Non-interested trustees' compensation 3,466 63.
64.Registration fees - Initial Class 14,662 65.
66.Registration fees - Class B 14,142 67.
68.Legal 9,833 69.
70.Miscellaneous 3,394 71.
72. Total expenses before reductions 3,267,095 73.
74. Expense reductions (193,438) 3,073,657
75.76.NET INTEREST INCOME 77. 21,636,434
78.79.NET REALIZED GAIN (LOSS) ON INVESTMENTS 80. 17,244
81.82.NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 83. $ 21,653,678
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THREE MONTHS YEAR ENDED YEAR ENDED
ENDED JULY 31, JULY 31,
OCTOBER 31, 1996 1995
1996
84.INCREASE (DECREASE) IN NET ASSETS
85.Operations $ 21,636,434 $ 98,814,880 $ 95,675,780
Net interest income
86. Net realized gain (loss) 17,244 37,646 29,208
87. 88.NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 21,653,678 98,852,526 95,704,988
89.Distributions to shareholders (21,367,372) (98,286,345) (95,473,806)
From net interest income
90. Initial Class
91. Class B (269,062) (528,535) (201,974)
92. 93.TOTAL DISTRIBUTIONS (21,636,434) (98,814,880) (95,675,780)
94.Share transactions - net increase (decrease) (19,697,315) 10,109,349 (194,955,395)
95. 96.TOTAL INCREASE (DECREASE) IN NET ASSETS (19,680,071) 10,146,995 (194,926,187)
97.NET ASSETS 98. 99. 100.
101. Beginning of period 1,840,998,028 1,830,851,033 2,025,777,220
102. End of period $ 1,821,317,957 $ 1,840,998,028 $ 1,830,851,033
</TABLE>
FINANCIAL HIGHLIGHTS - INITIAL CLASS
103. THREE MONTHS YEARS ENDED JULY 31,
ENDED OCTOBER 31,
104. 1996 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
105.SELECTED PER-SHARE DATA
106.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
107.Income from Investment Operations
108. Net interest income .012 .049 .049 .029 .027 .042
109.Less Distributions
110. From net interest income (.012) (.049) (.049) (.029) (.027) (.042)
111.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
112.TOTAL RETURN B, C 1.19% 5.06% 5.02% 2.89% 2.78% 4.25%
113.RATIOS AND SUPPLEMENTAL DATA
114.Net assets, end of period (in millions) $ 1,801 $ 1,801 $ 1,828 $ 2,025 $ 2,949 $ 3,094
115.Ratio of expenses to average net assets .65% A, .65% .65% .60% .57% .59%
C C C
116.Ratio of net interest income to average 4.66% A 4.94% 4.89% 2.81% 2.73% 4.14%
net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
117. THREE MONTHS YEARS ENDED JULY 31, JULY 1, 1994
ENDED (COMMENCEMENT
OCTOBER 31, OF OPERATIONS) TO
</TABLE>
118. 1996 1996 1995 JULY 31, 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
119.SELECTED PER-SHARE DATA
120.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
121.Income from Investment Operations
122. Net interest income .010 .043 .042 .002
123.Less Distributions
124. From net interest income (.010) (.043) (.042) (.002)
125.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
126.TOTAL RETURN B, C 1.01% 4.33% 4.28% .25%
127.RATIOS AND SUPPLEMENTAL DATA
128.Net assets, end of period (000 omitted) $ 20,411 $ 39,956 $ 3,154 $ 628
129.Ratio of expenses to average net assets 1.35% A, 1.35% 1.35% 1.35% A,
D D D D
130.Ratio of net interest income to average net assets 3.96% A 4.13% 4.22% 3.03% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE LEVIED
ON CLASS B SHARE REDEMPTIONS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
DAILY MONEY FUND: MONEY MARKET PORTFOLIO
INVESTMENTS OCTOBER 31, 1996
Showing Percentage of Total Value of Investments
BANKERS' ACCEPTANCES - 0.6%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
DOMESTIC BANKERS' ACCEPTANCES - 0.4%
Chase Manhattan Bank, NA
11/5/96 5.44% $ 1,393,542 $ 1,392,707
11/13/96 5.42 4,805,126 4,796,558
12/19/96 5.52 2,565,276 2,546,636
1/29/97 5.69 2,609,065 2,573,138
11,309,039
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.2%
Sanwa Bank, Ltd.
11/4/96 5.42 5,000,000 4,997,754
TOTAL BANKERS' ACCEPTANCES 16,306,793
CERTIFICATES OF DEPOSIT - 47.4%
DOMESTIC CERTIFICATES OF DEPOSIT - 7.7%
Chase Manhattan Bank (USA)
3/11/97 5.75 20,000,000 20,000,000
First Tennessee Bank, NA Memphis
11/5/96 5.34 10,000,000 10,000,000
Harris Trust & Savings Bank, Chicago
12/16/96 5.32 75,000,000 75,000,000
Morgan Guaranty Trust, NY
11/15/96 5.27 100,000,000 100,000,388
205,000,388
CHICAGO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.7%
ABN-AMRO Bank
12/2/96 5.51 12,000,000 12,000,000
3/18/97 5.80 5,000,000 4,992,208
16,992,208
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 32.2%
ABN-AMRO Bank
1/16/97 5.55 35,000,000 35,000,000
Bank of Montreal
11/1/96 5.25 50,000,000 50,000,000
Bank of Nova Scotia
1/9/97 5.40 50,000,000 50,000,000
Banque Nationale de Paris
11/4/96 5.37 20,000,000 20,000,000
12/2/96 5.30 5,000,000 5,000,000
Barclays Bank, PLC
11/12/96 5.27 22,000,000 22,000,000
Bayerische Hypotheken-und Weschel
11/18/96 5.28 12,000,000 12,000,000
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
Bayerische Landesbank Girozentrale
11/13/96 5.27% $ 25,000,000 $ 25,000,000
1/22/97 5.53 (a) 18,000,000 18,000,000
Caisse Nationale de Credit Agricole
1/17/97 5.54 40,000,000 40,000,000
2/18/97 5.41 30,000,000 30,000,000
3/24/97 5.62 30,000,000 30,000,000
Canadian Imperial Bank of Commerce
12/5/96 5.63 6,000,000 6,000,000
Credit Suisse
12/30/96 5.31 25,000,000 25,000,000
Deutsche Bank, Germany
11/15/96 5.27 20,000,000 20,000,000
11/18/96 5.27 50,000,000 50,000,000
12/2/96 5.28 40,000,000 40,000,000
12/23/96 5.52 18,000,000 18,000,000
National Westminster Bank, PLC
11/4/96 5.28 8,000,000 8,000,027
2/24/97 5.42 5,000,000 4,999,976
Royal Bank of Canada
1/15/97 5.76 8,000,000 7,999,762
Sanwa Bank, Ltd.
11/4/96 5.69 16,000,000 16,000,000
11/15/96 5.37 13,000,000 13,000,000
11/18/96 5.36 3,000,000 3,000,000
Societe Generale, France
11/6/96 5.36 9,000,000 9,000,024
12/2/96 5.52 15,000,000 15,000,000
12/13/96 5.30 8,000,000 8,000,172
12/16/96 5.45 35,000,000 35,000,000
12/20/96 5.45 45,000,000 45,000,000
2/7/97 5.42 15,000,000 15,000,875
Sumitomo Bank, Ltd.
11/14/96 5.50 5,000,000 5,000,000
11/18/96 5.37 10,000,000 10,000,000
1/17/97 5.53 5,000,000 5,000,000
1/21/97 5.54 8,000,000 8,000,000
Westdeutsche Landesbank
11/5/96 5.32 40,000,000 40,000,000
11/25/96 5.28 56,000,000 56,000,000
12/16/96 5.31 30,000,000 30,000,000
Westpac Banking Corp.
3/10/97 5.76 25,000,000 25,000,000
855,000,836
LONDON BRANCH, EURODOLLAR, DOMESTIC BANKS - 0.3%
Morgan Guaranty Trust, NY
3/27/97 5.45 7,000,000 7,003,852
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 6.5%
Abbey National, Treasury Services
12/3/96 5.52% $ 25,000,000 $ 25,000,000
12/16/96 5.33 30,000,000 30,000,000
12/30/96 5.34 19,000,000 19,000,000
2/18/97 5.42 10,000,000 10,000,000
Bank of Tokyo - Mitsubishi, Ltd.
1/28/97 5.50 3,000,000 3,000,364
Bayerische Hypotheken-und Weschel
11/27/96 5.50 15,000,000 14,999,684
Bayerische Vereinsbank A.G.
3/10/97 5.80 8,000,000 8,000,000
Rabobank Nederland, N.V.
12/3/96 5.50 20,000,000 20,000,174
Sanwa Bank, Ltd.
1/31/97 5.51 5,000,000 5,000,125
1/31/97 5.53 4,000,000 4,000,191
Sumitomo Bank, Ltd.
1/6/97 5.52 6,000,000 6,000,218
1/6/97 5.55 3,000,000 3,000,383
Toronto-Dominion Bank
12/3/96 5.30 25,000,000 25,002,416
173,003,555
TOTAL CERTIFICATES OF DEPOSIT 1,257,000,839
COMMERCIAL PAPER - 27.8%
ABN-AMRO North America Finance, Inc.
3/6/97 5.68 10,541,000 10,338,599
Associates Corp. of North America
11/1/96 5.75 20,000,000 20,000,000
11/8/96 5.43 10,000,000 9,989,597
12/31/96 5.45 13,000,000 12,883,650
1/24/97 5.40 5,000,000 4,937,875
Bank of Nova Scotia
12/2/96 5.32 3,900,000 3,882,268
Bank of Scotland Treasury Services
2/25/97 5.75 2,000,000 1,963,911
Bear Stearns Cos., Inc.
11/6/96 5.33 5,000,000 4,996,320
CIESCO, L.P.
11/6/96 5.29 10,000,000 9,992,680
11/20/96 5.29 10,000,000 9,972,239
CIT Group Holdings, Inc.
11/12/96 5.33 10,000,000 9,983,806
12/2/96 5.40 7,000,000 6,967,751
12/4/96 5.40 5,000,000 4,975,479
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
Caisse D'Amortissement de la Dette Sociale
12/6/96 5.47% $ 10,000,000 $ 9,947,792
2/24/97 5.42 25,000,000 24,575,139
Caisse des Depots et Consignations
11/7/96 5.27 10,000,000 9,991,250
2/19/97 5.41 5,000,000 4,918,722
Citibank Credit Card Master Trust I (Dakota Certificate Program)
11/12/96 5.39 5,000,000 4,991,872
11/15/96 5.33 2,000,000 1,995,878
11/19/96 5.31 4,000,000 3,989,440
1/23/97 5.43 5,000,000 4,938,211
Dresdner U.S. Finance Inc.
12/9/96 5.30 47,000,000 46,739,542
Eiger Capital Corp.
12/5/96 5.31 23,393,000 23,276,347
Enterprise Funding Corp.
11/5/96 5.38 9,000,000 8,994,650
11/13/96 5.29 4,998,000 4,989,220
11/18/96 5.31 7,000,000 6,982,547
11/18/96 5.42 9,924,000 9,898,834
Ford Motor Credit Corp.
11/14/96 5.30 50,000,000 49,904,847
General Electric Capital Corp.
11/1/96 5.65 40,000,000 40,000,000
11/25/96 5.37 35,000,000 34,875,867
2/18/97 5.42 30,000,000 29,516,766
3/12/97 5.76 17,000,000 16,653,578
General Electric Co.
11/20/96 5.30 5,550,000 5,534,563
Glaxo Wellcome PLC
11/12/96 5.41 4,215,000 4,208,083
IBM Credit Corp.
11/25/96 5.38 12,000,000 11,957,360
Lucent Technologies, Inc.
11/12/96 5.36 17,800,000 17,771,065
Merrill Lynch & Co., Inc.
11/6/96 5.28 19,000,000 18,986,120
2/4/97 5.43 20,000,000 19,717,903
3/11/97 5.76 9,000,000 8,818,000
3/12/97 5.68 4,000,000 3,919,580
Morgan Stanley Group, Inc.
1/27/97 5.40 20,000,000 19,742,867
2/4/97 5.40 9,000,000 8,873,650
National Australia Funding, Inc.
1/27/97 5.78 15,000,000 14,796,456
New Center Asset Trust
11/13/96 5.31 25,000,000 24,956,000
3/11/97 5.79 3,000,000 2,939,062
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
Philip Morris Cos., Inc.
11/1/96 5.32% $ 6,000,000 $ 6,000,000
11/5/96 5.33 5,000,000 4,997,056
Royal Bank of Canada
1/31/97 5.40 25,000,000 24,663,805
SBC Finance (DE), Inc.
3/11/97 5.76 20,000,000 19,595,556
Toronto Dominion Holdings USA, Inc.
3/5/97 5.80 11,000,000 10,786,306
Unifunding, Inc.
12/6/96 5.33 10,000,000 9,948,667
Wool International
12/6/96 5.41 20,000,000 19,896,556
Woolwich Equitable Building Society
11/29/96 5.31 32,000,000 31,868,586
TOTAL COMMERCIAL PAPER 738,041,918
FEDERAL AGENCIES - 14.4%
FEDERAL HOME LOAN BANK - AGENCY COUPONS (A) - 0.8%
12/13/96 5.51 11,000,000 10,999,206
12/20/96 5.51 11,000,000 10,999,073
21,998,279
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 1.0%
1/21/97 5.54 18,000,000 17,783,325
2/3/97 5.62 10,000,000 9,857,434
27,640,759
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 3.3%
11/1/96 5.36 5,820,000 5,820,000
11/4/96 5.47 23,000,000 22,989,669
12/2/96 5.47 9,270,000 9,227,533
2/24/97 5.34 50,000,000 49,161,459
87,198,661
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS (A) - 5.2%
11/1/96 5.59 25,000,000 24,988,160
11/2/96 5.37 50,000,000 49,980,639
11/5/96 5.33 10,000,000 9,991,544
12/20/96 5.51 33,000,000 32,996,578
1/17/97 5.42 19,000,000 18,996,900
136,953,821
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 4.1%
11/1/96 5.36% $ 34,000,000 $ 34,000,000
11/7/96 5.47 25,000,000 24,977,542
1/16/97 5.31 50,000,000 49,446,888
108,424,430
TOTAL FEDERAL AGENCIES 382,215,950
BANK NOTES - 1.4%
Bank of America NW, NA
11/4/96 5.43 (a) 12,000,000 11,998,715
First Union National Bank of North Carolina, NA
12/27/96 5.56 (a) 12,000,000 11,999,111
Household Bank, FSB
11/15/96 5.42 3,000,000 3,000,000
Wachovia Bank of North Carolina, NA
11/3/96 5.51 (a) 10,000,000 10,000,163
TOTAL BANK NOTES 36,997,989
MEDIUM-TERM NOTES (A) - 1.6%
Exxon Shipping Co.
11/1/96 5.36 18,100,000 18,100,000
11/1/96 5.39 25,000,000 25,000,000
TOTAL MEDUIM-TERM NOTES 43,100,000
SHORT-TERM NOTES (A)(B) - 1.7%
CSA Funding - B
11/4/96 5.47 22,000,000 22,000,000
CSA Funding - C
11/4/96 5.47 23,000,000 23,000,000
TOTAL SHORT-TERM NOTES 45,000,000
TIME DEPOSITS - 1.2%
Bank of Tokyo
11/4/96 5.47 10,000,000 10,000,000
11/12/96 5.38 7,000,000 7,000,000
12/2/96 5.38 15,000,000 15,000,000
TOTAL TIME DEPOSITS 32,000,000
REPURCHASE AGREEMENTS - 3.9%
MATURITY VALUE
AMOUNT (NOTE 1)
In a joint trading account
(U.S. Treasury Obligations)
dated 10/31/96 due 11/1/96:
At 5.57% $ 18,378,841 $ 18,376,000
(U.S. Government Obligations)
dated 10/8/96 due 11/12/96:
At 5.30% 35,180,347 35,000,000
(U.S. Government Obligations)
dated 10/21/96 due 11/12/96:
At 5.30% 50,220,833 50,000,000
TOTAL REPURCHASE AGREEMENTS 103,376,000
TOTAL INVESTMENTS - 100% $ 2,654,039,489
Total Cost for Income Tax Purposes $ 2,654,039,489
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(b) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
CSA Funding - B 10/28/93 $ 22,000,000
CSA Funding - C 10/28/93 $ 23,000,000
INCOME TAX INFORMATION
At October 31, 1996, the fund had a capital loss carryforward of
approximately $764,000 of which $7,000, $125,000, $584,000 and $48,000 will
expire on October 31, 2000, 2001, 2002 and 2003, respectively.
A total of 6.68% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
DAILY MONEY FUND: MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1996
131.ASSETS 132. 133.
134.Investment in securities, at value (including repurchase agreements of $103,376,000) - 135. $ 2,654,039,489
See accompanying schedule
136.Cash 137. 26,957,445
138.Interest receivable 139. 9,605,801
140. 141.TOTAL ASSETS 142. 2,690,602,735
143.LIABILITIES 144. 145.
146.Payable for investments purchased $ 25,001,023 147.
148.Distributions payable 558,164 149.
150.Accrued management fee 857,854 151.
152.Other payables and accrued expenses 776,501 153.
154. 155.TOTAL LIABILITIES 156. 27,193,542
157.158.NET ASSETS 159. $ 2,663,409,193
160.Net Assets consist of: 161. 162.
163.Paid in capital 164. $ 2,664,173,321
165.Accumulated net realized gain (loss) on investments 166. (764,128)
167.168.NET ASSETS, for 2,664,173,321 shares outstanding 169. $ 2,663,409,193
170.171.NET ASSET VALUE, offering price and redemption price per share 172. $1.00
($2,663,409,193 (divided by) 2,664,173,321 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
THREE MONTHS ENDED OCTOBER 31, 1996
173.174.INTEREST INCOME 175. $ 35,246,828
176.EXPENSES 177. 178.
179.Management fee $ 3,212,443 180.
181.Transfer agent fees 1,654,901 182.
183.Accounting fees and expenses 60,667 184.
185.Non-interested trustees' compensation 3,538 186.
187.Registration fees 42,876 188.
189.Audit 11,306 190.
191.Legal 4,598 192.
193.Reports to shareholders 3,524 194.
195.Miscellaneous 1,330 196.
197. Total expenses before reductions 4,995,183 198.
199. Expense reductions (819,075) 4,176,108
200.201.NET INTEREST INCOME 202. 31,070,720
203.204.NET REALIZED GAIN (LOSS) ON INVESTMENTS 205. 57,797
206.207.NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 208. $ 31,128,517
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
THREE MONTHS YEAR ENDED YEAR ENDED
ENDED JULY 31, JULY 31,
OCTOBER 31, 1996 1995
1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
209.INCREASE (DECREASE) IN NET ASSETS
210.Operations $ 31,070,720 $ 121,708,868 $ 94,283,195
Net interest income
211. Net realized gain (loss) 57,797 (48,294) (583,736)
212. 31,128,517 121,660,574 93,699,459
213.NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
214.Distributions to shareholders from net interest income (31,070,720) (121,708,868) (94,283,195)
215.Share transactions at net asset value of $1.00 per share 3,213,788,949 13,231,538,511 9,812,791,289
Proceeds from sales of shares
216. Reinvestment of distributions from net interest income 28,781,415 112,618,012 85,047,974
217. Cost of shares redeemed (3,159,725,660) (12,902,990,749) (9,282,734,518)
218.219. 82,844,704 441,165,774 615,104,745
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES RESULTING
FROM SHARE TRANSACTIONS
220. 82,902,501 441,117,480 614,521,009
221.TOTAL INCREASE (DECREASE) IN NET ASSETS
222.NET ASSETS 223. 224. 225.
226. Beginning of period 2,580,506,692 2,139,389,212 1,524,868,203
227. End of period $ 2,663,409,193 $ 2,580,506,692 $ 2,139,389,212
</TABLE>
FINANCIAL HIGHLIGHTS - INITIAL CLASS
228. THREE MONTHS YEARS ENDED JULY 31,
ENDED
OCTOBER 31,
229. 1996 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
230.SELECTED PER-SHARE DATA
231.Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
232.Income from Investment .012 .050 .050 .029 .028 .041
Operations
Net interest income
233.Less Distributions
234. From net interest income (.012) (.050) (.050) (.029) (.028) (.041)
235.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
236.TOTAL RETURN B 1.22% 5.13% 5.16% 2.98% 2.82% 4.21%
237.RATIOS AND SUPPLEMENTAL DATA
238.Net assets, end of period (in $ 2,663 $ 2,581 $ 2,139 $ 1,525 $ 1,451 $ 1,531
millions)
239.Ratio of expenses to average net .65% A, .65% .65% .65% .61% .59%
assets C C C C
240.Ratio of net interest income to 4.85% A 5.00% 5.11% 2.96% 2.76% 4.19%
average
net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
DAILY TAX-EXEMPT MONEY FUND
INVESTMENTS OCTOBER 31, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
ALABAMA - 1.4%
Alabama Hsg. Fin. Auth. Multi-Family Hsg. Rev. Rfdg. (Rime Village Proj.)
Series 1996 B,
3.55% (FNMA Guaranteed) VRDN $ 3,775,000 $ 3,775,000
Jefferson County Swr. Rev. Series 1995 A, 3.60%, LOC Bayerische Landesbank
Girozentale,
VRDN 3,000,000 3,000,000
6,775,000
ALASKA - 1.7%
Valdez Marine Terminal Rev. Rfdg. Series 1994 B, 3.65%, VRDN 8,300,000
8,300,000
ARIZONA - 3.0%
Apache County Ind. Dev. Auth. Rev., VRDN:
(Tucson Elec. Pwr. Co. Proj.):
(Springerville Proj.) Series 1983 A, 3.55%, LOC Barclays Bank PLC
12,300,000 12,300,000
Series 1981 B, 3.65%, LOC Bank of Tokyo - Mitsubishi Ltd 1,000,000
1,000,000
Arizona Health Facs. Auth. Rev. (Samaritan Health Care) Series 1986, 3.55%
(FGIC Insured) (BPA Chase Manhattan Bank), VRDN 1,710,000 1,710,000
15,010,000
ARKANSAS - 0.5%
Arkansas Hosp. Equip. Fin. Auth. Rev. (Baptist Health Proj.) Series 1995,
3.60%, LOC
Credit Suisse, VRDN 1,575,000 1,575,000
University of Arkansas Rev. (UAM Campus) 3.60%, LOC Credit Suisse, VRDN
1,000,000 1,000,000
2,575,000
CALIFORNIA - 6.0%
Alameda County TRAN 4.50% 6/30/97 1,400,000 1,404,889
California Facs. Lease Reg'l. Impt. Corp. Rev. (Los Angeles Int'l. Arpt.
Air France) 3.70%, LOC
Societe Generale, VRDN 3,100,000 3,100,000
California Gen. Oblig. RAN Series 1996-97, 4.50% 6/30/97 7,850,000
7,880,340
California School Cash Reserves Auth. Prog. TRAN Series 1996 A, 4.75%
7/2/97 2,700,000 2,715,573
Fresno TRAN 4.50% 6/30/97 1,000,000 1,003,811
Los Angeles Commty. College Dist. TRAN Series 1996-97, 4.50% 7/1/97
1,000,000 1,003,182
Los Angeles County TRAN Series 1996-97, 4.50% 6/30/97 2,000,000
2,006,940
Los Angeles TRAN Series 1996, 4.50% 6/19/97 8,000,000 8,027,047
Oakland TRAN Series 1996, 4.75% 6/30/97 1,500,000 1,508,293
Ventura County TRAN Series 1996, 4.75% 7/2/97 1,300,000 1,306,131
29,956,206
COLORADO - 0.6%
El Paso County School Dist. Gen. Oblig. Participating VRDN, Series 1996 D,
3.75%
(Liquidity Facility Norwest Bank NA, Minnesota) (b) 1,250,000 1,250,000
Fort Lupton Water Util. Wtr. Rev. BAN 4.10% 1/10/97 700,000 700,000
Smith Creek County Metropolitan Dist. Rev.
Series 1995, 3.55%, LOC NationsBank, VRDN 900,000 900,000
2,850,000
DELAWARE - 2.4%
Delaware Econ. Dev. Auth. Multi-Family Rev. (Schoolhouse Trust Prog.)
3.80%, LOC Marine
Midland Bank, VRDN 1,150,000 1,150,000
Delaware Econ. Dev. Auth. Rev., VRDN:
(Hosp. Billing & Collection Svcs. Proj.) Series 1985 B, 3.65% (MBIA
Insured)
(BPA Morgan Stanley Group, Inc.) 6,000,000 6,000,000
(Peninsula United Methodist Homes Inc.) Series 1992 B,3.65%, LOC
Corestates Bank 4,710,000 4,710,000
11,860,000
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
FLORIDA - 5.9%
Broward County Hsg. Fin. Auth. Multi-Family Hsg. Rev. (Landings Inverrary
Apts.) 3.60%,
LOC PNC Bank, VRDN $ 2,000,000 $ 2,000,000
Duval County Hsg. Fin. Auth. Multi-Family Rev. (Lakes of Mayport Apts.)
Series 1985 F,
3.65%, LOC SunTrust Bank of Atlanta, VRDN 1,300,000 1,300,000
Florida Local Gov't. Finance Auth. Rev. Series A, 3.65% 2/26/97, LOC First
Union Nat'l. Bank, CP 1,600,000 1,600,000
Florida State Board of Ed. Participating VRDN, Series CR-163, 3.70%
(Liquidity Facility Citibank) (b) 2,000,000 2,000,000
Indian River County Hosp. Dist. Hosp. Rev. Rfdg. Series 1985, 3.60%, LOC
Kredietbank, VRDN 3,000,000 3,000,000
Lee County Hosp. Board Hosp. Rev. Bonds (Lee Memorial Hosp. Proj.) Series
1992 B,
3.65%, tender 11/7/96, LOC SunTrust Bank 5,500,000 5,500,000
Orange County Ind. Dev. Board Rev. (Blood Bank Proj.) Series 1988, 3.60%,
LOC SunTrust Bank, VRDN 1,145,000 1,145,000
St. Lucie County Poll. Cont. Rev. Rfdg. Bonds (Florida Pwr. & Light Co.
Proj.) Series 1994 A:
3.65%, tender 12/6/96 2,600,000 2,600,000
3.60%, tender 2/21/97 2,500,000 2,500,000
Sunrise Util. Sys. Participating VRDN, Series SGB-16,
3.65% (Liquidity Facility Societe Generale) (b) 600,000 600,000
Sunshine State Gov't. Fing. Commission Rev. Series 1994, CP:
3.65% 12/6/96 2,000,000 2,000,000
3.60% 2/20/97 5,000,000 5,000,000
29,245,000
GEORGIA - 6.0%
Atlanta Gen. Oblig. Participating VRDN, Series SG-58, 3.65%
(Liquidity Facility Societe Generale) (b) 2,785,000 2,785,000
Atlanta Arpt. Facs. Rev. Rfdg. Bonds Series 1996, 5% 1/1/97 (AMBAC Insured)
2,500,000 2,505,057
Cherokee County Wtr. & Swr. Auth. Participating VRDN, Series 1993,
3.60% (MBIA Insured) (Liquidity Facility Merrill Lynch & Co.) (b)
1,495,000 1,495,000
Clayton County Hsg. Auth. Multi-Family Hsg. Rev. Rfdg. (Kings Arms Apts.
Proj.) Series 1990 D,
3.55% (FSA Insured) (BPA Barclays Bank) VRDN 1,100,000 1,100,000
Fulton County Hsg. Auth. Multi-Family Hsg. Rev. Rfdg., VRDN:
(Champions Green Apts. Proj.) Series 1994 B, 3.60%, LOC Southtrust Bank
5,670,000 5,670,000
(Holcomb's Landing Apts. Proj.) 3.60%, LOC First Union Nat'l. Bank
1,000,000 1,000,000
Georgia Muni. Elec. Auth. Participating VRDN, Series SG-40,
3.65% (Liquidity Facility Societe Generale) (b) 3,000,000 3,000,000
Georgia Muni. Elec. Auth. Pwr. Rev. Bonds Series L, 7.75% 1/1/97
1,000,000 1,026,402
Gwinnett County Hsg. Auth. Multi-Family Hsg. Rev. (Post Corners Proj.)
Series 1996, 3.55% (FNMA Guaranteed) VRDN 4,760,000 4,760,000
Newton County Ind. Dev. Auth. Rev. Rfdg. (John H. Harland Co. Proj.) 3.65%,
LOC NationsBank, VRDN 2,000,000 2,000,000
Rockdale County Hosp. Auth. Rev. Series 1994, 3.60%, LOC SunTrust Bank of
Atlanta, VRDN 2,700,000 2,700,000
Savannah Econ. Dev. Auth. Rev. Rfdg. (La Quinta Motor Inns)
Series 1991, 3.70%, LOC NationsBank, VRDN 1,700,000 1,700,000
29,741,459
IDAHO - 0.3%
Caribou County Ind. Dev. Poll. Cont. Rev. Rfdg. (Monsanto Co.) Series 1990,
3.65%, VRDN 1,500,000 1,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
ILLINOIS - 9.9%
Chicago Gen. Oblig. Bonds Series 1996,
3.10%, tender 2/4/97, LOC Landesbank Hessen-Thuringen $ 1,907,000 $
1,907,000
Chicago Gen. Oblig. Participating VRDN, Series 96-BB, 3.70%
(Liquidity Facility Bank of America) (b) 2,400,000 2,400,000
Chicago Metropolitan Wtr. Recycling Dist. Bonds 6.75% 1/1/97 340,000
341,908
Cook County Rev. (Catholic Charities Hosp.) Series 1988 A-1,
3.60%, LOC Nat'l. Westminster Bank, VRDN 1,800,000 1,800,000
Decatur Wtr. Rev. Bonds Series 1985, 3.65% tender 11/20/96, LOC Sumitomo
Bank, Ltd. 1,100,000 1,100,000
East Hazel Crest Multi-Family Hsg. Rev. (I-80 & Halstead Proj.)
Series 1985 A, 3.80%, LOC Marine Midland Bank, VRDN 2,945,000 2,945,000
Illinois Dev. Fin. Auth. Mutil-Family Hsg. Rev. Rfdg. (Garden Glen Apts.)
Series 1993, 3.80%,
VRDN 910,000 910,000
Illinois Dev. Fin. Auth. Poll. Cont. Rev. Rfdg. Bonds (Commonwealth Edison
Proj.) Series 1996 A,
3.65% (AMBAC Insured) VRDN 10,000,000 10,000,000
Illinois Dev. Fin. Auth. Rev. (Presbyterian Home Lake Forest) Series 1996
A, 3.60%, LOC LaSalle
Nat'l. Bank, VRDN 1,400,000 1,400,000
Illinois Edl. Facs. Auth. Rev. (Art Instiute of Chicago) Series 1996, 3.65%
(Liquidity Facility
Bank of America Illinois) VRDN 2,000,000 2,000,000
Illinois Health Facs. Auth. Rev:
Bonds:
(Evanston Hosp. Corp. Proj.) Series 1985 B, 3.15%, tender 1/31/97
1,900,000 1,900,000
(Univ. of Chicago Proj.) Series 1985 A, 3.75%, tender 1/30/97 1,000,000
1,000,000
VRDN:
Rfdg. (Franciscan Eldercare Commty. Svc.) Series 1996 C, 3.65%,
LOC LaSalle Bank 1,200,000 1,200,000
(Children's Mem. Hosp.) Series 1985 B, 3.60%, LOC First Nat'l Bank of
Chicago 3,600,000 3,600,000
(Evangelical Hosp. Corp.) Series 1985 B, 3.60%, LOC Barclays Bank
1,425,000 1,425,000
(Gottlieb Health Resources Inc.)
3.60%, LOC Harris Trust & Savings Bank of Chicago 2,500,000 2,500,000
(Methodist Med. Ctr. Proj.) Series 1985 B, 3.75%, LOC Sumitomo Bank, Ltd
400,000 400,000
Illinois Reg'l. Trans. Auth. Participating VRDN (b):
Series SG-10, 3.65% (Liquidity Facility Societe Generale) 1,645,000
1,645,000
Series SG-82, 3.65% (Liquidity Facility Societe Generale) 1,000,000
1,000,000
Lombard Ind. Proj. (B&H Partnership Proj.) 3.875%, LOC Comerica Bank, VRDN
3,375,000 3,375,000
Mundelein Ind. Dev. Rev. Rfdg. (1200 Town Line Rd. Proj.) 3.60%, LOC Harris
Trust &
Savings Bank, VRDN 1,100,000 1,100,000
Schaumburg Gen. Oblig. Rev. Series 1996 A, 3.60% (BPA Credit Suisse) VRDN
2,000,000 2,000,000
Schaumberg Ind. Dev. Rev. Rfdg. (La Quinta Motor Inns Inc. Proj.)
3.70%, LOC NationsBank,VRDN 1,785,000 1,785,000
Springfield Commty. Impt. Rev. (Kent Family, Inc. Proj.) 3.70%, LOC PNC
Bank, VRDN 1,400,000 1,400,000
49,133,908
INDIANA - 2.5%
Indiana Ed. Facs. Auth. Rev. (Tri-State Univ. Proj.) 3.65%, LOC Bank One,
Indianapolis, VRDN 2,585,000 2,585,000
Indiana Health Facs. Fing. Auth. Hosp. Rev. (Methodist Hosp. of Indiana)
Series 1992 C, 3.35%
(Liquidity Facility Credit Suisse) VRDN 2,200,000 2,200,000
Indiana Hsg. & Fin. Auth. Single Family Mtg. Rev. Bonds
Series 1995 D-1, 3.85%, tender 11/1/96 1,500,000 1,500,000
Indianapolis Pub. Impt. TAN Series 1996 A, 4.25% 1/1/97 1,400,000
1,401,166
Noblesville Econ. Dev. Rev. Rfdg. (River's Edge Apt. Proj.) Series 1992,
3.60%,
LOC Bank One, VRDN 3,110,000 3,110,000
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
INDIANA - CONTINUED
Sullivan Poll. Cont. Rev. Bonds (Hoosier Energy Rural Elec. Coop.):
Series 1985 L-3, 3.65%, tender 12/2/96 $ 1,200,000 $ 1,200,000
Series 1985 L-5, 3.65%, tender 12/2/96 500,000 500,000
12,496,166
IOWA - 0.2%
Iowa Hsg. Fin. Auth. Multi-Family Hsg. Rev. (Small Bus. Loan Prog.) Series
1985 A,
4.05%, LOC Federal Home Loan Bank, VRDN 1,100,000 1,100,000
KANSAS - 1.4%
Burlington Poll. Cont. Rev. Bonds (Kansas Elec. Pwr.) Series 1985 C-1:
3.65%, tender 12/2/96 400,000 400,000
3.60%, tender 2/19/97 4,665,000 4,665,000
Olathe Edl. Facs. Rev. (Independent College Assoc. Pooled Ed. Loan Prog.)
Series 1989 A, 3.60%,
LOC Midland Bank, VRDN 1,790,000 1,790,000
6,855,000
KENTUCKY - 0.3%
Georgetown Ed. Inst. Rev. (Georgetown College Proj.)
Series 1992, 3.65%, LOC PNC Bank, VRDN 1,600,000 1,600,000
LOUISIANA - 0.8%
Louisiana Pub. Facs. Auth. Wtr. Rev. Rfdg. (Louisiana Wtr. Co. Proj.)
Series 1993, 3.60%, LOC Bank One Texas, VRDN 2,185,000 2,185,000
West Baton Rouge Ind. Dev. Rev. Bonds (Dow Chemcial #3) 3.65%, tender
1/27/97 2,000,000 2,000,000
4,185,000
MARYLAND - 0.5%
Baltimore County Hsg. Mtg. Rev. (Spring Hill Apt.) Series 1991, 3.55%,
LOC Sumitomo Bank Ltd., VRDN 900,000 900,000
Baltimore Gen. Oblig. Participating VRDN, Series SG-20, 3.70% (Liquidity
Facility Societe Generale) (b) 1,500,000 1,500,000
2,400,000
MASSACHUSETTS - 0.6%
Massachusetts Bay Transit Auth. RAN Series 1996 A, 3.75% 2/28/97
1,000,000 1,000,203
Massachusetts Gen. Oblig. BAN Series 1996 A, 4.25% 6/10/97 2,000,000
2,004,067
3,004,270
MICHIGAN - 2.7%
Detroit School Dist. RAN 4.50% 5/1/97 3,100,000 3,108,189
Kent County Hosp. Fin. Auth. Rev. (Butterworth Hosp. Proj.)
Series 1991 A, 3.85%, LOC Sanwa Bank, VRDN 3,500,000 3,500,000
Michigan Hosp. Fin. Auth. Rev. (Hosp. Equip. Loan Prog.)
Series 1995 A, 3.55%, LOC First of America Bank, VRDN 2,000,000
2,000,000
Michigan Strategic Fund Ind. Dev. Rev. (Michigan Sugar Co.-Croswell Proj.)
3.60%, LOC SunTrust Bank of Atlanta, VRDN 2,500,000 2,500,000
Michigan Strategic Fund Ltd. Oblig. Rev. (Michigan Sugar Co.-Caro Proj.)
Series 1991, 3.60%, LOC SunTrust Bank of Atlanta, VRDN 1,500,000
1,500,000
Michigan Strategic Fund Poll. Cont. Rev. Bonds (Dow Chemcial Proj.)
Series 1986, 3.60%, tender 12/11/96 1,000,000 1,000,000
13,608,189
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
MINNESOTA - 2.4%
Bloomington Port Auth. Spl. Tax Rev. Rfdg. Bonds (Mall of America Proj.)
3.60%
(FSA Insured) VRDN $ 2,000,000 $ 2,000,000
Minnesota Hsg. Fin. Agcy. Single Family Mtg. Rev. Bonds Series M, 3.50%,
tender 12/12/96 790,000 790,000
Olmsted County (COP Human Services Campus Infrastructure Proj.)
3.60%, LOC Toronto Dominion Bank, VRDN 2,335,000 2,335,000
Osseo Independent School Dist. Participating VRDN (b):
Series 94-T1, 3.75% (Liquidity Facility First Bank NA, MN) 1,000,000
1,000,000
Series A, 3.75% (FGIC Insured) (Liquidity Facility Norwest Bank NA,
Minnesota) 1,260,000 1,260,000
Red Wing Poll. Cont. Rev. (Northern States Pwr. Co.) 3.65%, VRDN
2,000,000 2,000,000
Rochester Health Care Facs. Rev. Bonds (Mayo Med. Center.) 3.60%, tender
2/11/97 1,200,000 1,200,000
St. Paul Hsg. and Redev. Auth. Participating VRDN, Series 1996 E, 3.75%
(FSA Insured)
(Liquidity Facility Norwest Bank NA, Minnesota) (b) 1,250,000 1,250,000
11,835,000
MISSISSIPPI - 0.2%
Mississippi Bus. Fin. Corp. Rev. (Mississippi Coll. Proj.) Series 1996,
3.65%,
LOC NationsBank, VRDN 1,000,000 1,000,000
MISSOURI - 1.4%
Missouri Health & Ed. Health Facs. Auth. Rev. (Lutheran Sr. Svcs. ) 3.625%,
LOC Lasalle Nat'l. Bank, VRDN 4,000,000 4,000,000
St. Louis Planned Expansion Auth. Ind. Dev. Rfdg. Rev. (Alumax Foils Proj.)
Series 1992, 3.60%, LOC PNC Bank, VRDN 2,000,000 2,000,000
Univ. of Missouri BAN Series 1996-97, 4.75% 6/30/97 1,000,000 1,005,720
7,005,720
NEBRASKA - 0.6%
Omaha Pub. Pwr. Dist. Participating VRDN, Series 1993 D, 3.60%
(Liquidity Facility Merrill Lynch & Co. Inc.) (b) 3,070,000 3,070,000
NEVADA - 1.7%
Clark County Gen. Oblig. Participating VRDN
Series BTP-192, 3.65%, LOC Barclays Bank PLC (b) 1,000,000 1,000,000
Clark County Ind. Dev. Rev. (Nevada Pwr. Co. Proj.)
Series 1995 C, 3.60%, LOC Barclays Bank PLC 4,290,000 4,290,000
Nevada Participating VRDN, Series 962801, 3.70% (Liquidity Facility
Citibank) (b) 3,200,000 3,200,000
8,490,000
NEW HAMPSHIRE - 1.2%
New Hampshire Higher Ed. & Health Facs. Auth. Rev., VRDN:
(St. Paul's School) 3.55%, LOC State Street Bank & Trust Co. 1,000,000
1,000,000
(VHA of New England) Series 1985 F, 3.50% (AMBAC Insured) (BPA First
Nat'l. Bank of Chicago) 5,050,000 5,050,000
6,050,000
NEW JERSEY - 0.6%
New Jersey Gen. Oblig. Participating VRDN, Series 943005, 3.65% (Liquidity
Facility Citibank (b) 2,000,000 2,000,000
Washington Township BAN 4% 12/13/96 1,000,000 1,000,497
3,000,497
NEW YORK - 4.6%
Nassau County BAN:
4% 11/15/96 3,400,000 3,400,307
4.50% 3/14/97 1,167,000 1,169,903
New York City RAN Series 1996-B, 4.50% 6/30/97 15,150,000 15,222,965
New York State Pwr. Auth. Bonds 3.70%, tender 3/1/97 3,000,000 3,000,000
22,793,175
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
NORTH DAKOTA - 1.1%
Oliver County Poll. Cont. Rev. Rfdg. (Square Butte Elec. Coop.) Series 1996
B, 3.55%
(AMBAC Insured) (BPA Bank of New York, NA) VRDN $ 5,375,000 $ 5,375,000
OHIO - 0.4%
Chillicothe Wastewtr. Treatment BAN 4.41% 9/19/97 900,000 902,357
Toledo BAN 4.25% 5/15/97 1,000,000 1,001,671
1,904,028
OKLAHOMA - 1.0%
Cushing Muni. Auth. Correctional Facs. Rev. Series 1996, 3.60%, LOC First
Union
Nat'l Bank, VRDN 3,000,000 3,000,000
Tulsa Ind. Auth. Rev. Rfdg. (University of Tulsa) Series 1996 B, 3.55%
(MBIA Insured) (BPA
Credit Locale de France) VRDN 1,200,000 1,200,000
Tulsa International Arpt. Gen. Rev. Series 1996, 3.70% (FGIC Insured) (BPA
FGIC Security
Purchase Inc.) VRDN 1,000,000 1,000,000
5,200,000
PENNSYLVANIA - 7.5%
Allegheny County Hosp. Dev. Auth. Rev. (St. Margaret Mem. Hosp.) Series
1992 A, 3.85%, LOC
Mellon Bank, VRDN 2,590,000 2,590,000
Dauphin County Gen. Auth. Hosp. Rev. (Reading Hosp. & Med. Ctr.) Series
1994 A,
3.65%, VRDN 1,200,000 1,200,000
Delaware Valley Reg'l. Fin. Auth. Local Gov't. Rev., VRDN:
Series 1985 C, 3.65%, LOC Marine Midland Bank 2,500,000 2,500,000
Series 1986, 3.65%, LOC Marine Midland Bank 1,700,000 1,700,000
Montgomery County Higher Ed. & Health. Auth. Rev. (Pottstown Healthcare
Corp. Proj.)
Series 1992, 3.75%, LOC Meridian Bank, VRDN 2,565,000 2,565,000
North Lebanon Township Rev. (Grace Commty. Inc. Proj.) Series 1992 B,
3.75%, LOC
Meridian Bank, VRDN 1,895,000 1,895,000
Northeastern Hosp. & Ed. Auth. Rev. (Allhealth Pool Fing.) 3.70%,
LOC Chase Manhattan Bank, VRDN 5,000,000 5,000,000
North Pennsylvania Wtr. Auth. Participating VRDN, Series SG-30, 3.70%
(Liquidity Facility Societe Generale) (b) 1,030,000 1,030,000
Pennsylvania TAN Series 1996-97, 4.50% 6/30/97 8,100,000 8,138,345
Philadelphia School Dist. TRAN Series 1996-97, 4.50% 6/30/97 1,000,000
1,003,179
Philadelphia TRAN Series 1996-97, 4.50% 6/30/97 1,000,000 1,003,488
Pittsburgh Wtr. & Swr. Sys. Participating VRDN, Series BTP-181, 3.65%
(Liquidity Facility Bankers Trust Co.) (b) 1,000,000 1,000,000
Schuylkill County Ind. Dev. Auth. Resource Recovery Rev. (Gilberton Pwr.)
3.65%, LOC Mellon Bank, VRDN 2,000,000 2,000,000
York City Gen. Auth. Pooled Fing. Rev. Series 1996, 3.55%,
LOC First Union Nat'l. Bank, VRDN 5,600,000 5,600,000
37,225,012
SOUTH CAROLINA - 6.0%
South Carolina Hsg. Fin. & Dev. Auth. Multi-Family Hsg. Rev. (Spartanburg
Oxford Proj.)
Series 1990 D, 3.85% (Continental Casualty Co. Guaranteed) VRDN 9,415,000
9,415,000
South Carolina Pub. Svc. Auth. Rev., CP:
3.60% 2/18/97 7,895,000 7,895,000
3.60% 2/24/97 3,000,000 3,000,000
South Carolina Pub. Svc. Auth. Tender Option Bonds Series CR-183, 3.65%
(Liquidity Facility
Citibank) VRDN (b) 1,100,000 1,100,000
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
SOUTH CAROLINA - CONTINUED
Walhalla Rev. Rfdg. (Avondale Mills Inc. Proj.) Series 1990, 3.60%, LOC
SunTrust Bank of
Atlanta, VRDN $ 3,000,000 $ 3,000,000
York County Poll. Cont. Rev. (Carolina Elec. Proj.) Series 1984 N-2, 3.60%,
VRDN 1,700,000 1,700,000
York County Poll. Cont. Rev. Bonds (Carolina Elec. Co.) Series 1984 N-3,
3.80%,
tender 3/15/97 4,000,000 4,000,000
30,110,000
TENNESSEE - 2.0%
Clarksville Pub. Bldg. Auth. Pooled Fing. Rev. Series 1995, 3.65%, LOC
NationsBank, VRDN 2,000,000 2,000,000
Metropolitan Govt. of Nashville & Davidson County Pooled Loan Ed. Prog.
Rev.
Series A, 3.65%, LOC NationsBank, VRDN 4,100,000 4,100,000
Nashville Metropolitan Arpt. Auth. Spl. Facs. Rev. (American Airlines
Proj.)
Series A, 3.65%, LOC Credit Suisse, VRDN 400,000 400,000
Rutherford County (Cumberland-Swan Inc. Proj.) Series 1987,
3.60%, LOC Third Nat'l Bank, VRDN 925,000 925,000
Shelby County Gen. Oblig. Participating VRDN, Series SGB-21,
3.65% (Liquidity Facility Societe Generale) (b) 2,500,000 2,500,000
9,925,000
TEXAS - 9.7%
Austin Hsg. Fin. Corp. Multi-Family Hsg. Rev. (Riverchase Proj.) Series
1985 A, 3.875%, LOC
Household Finance Corp., VRDN 1,000,000 1,000,000
Brazos River Harbor Navigation Dist. of Brazoria County Rev. Bonds (Dow
Chemical Co.)
Series 1991:
3.60%, tender 11/7/96 2,750,000 2,750,000
3.75%, tender 12/12/96 1,000,000 1,000,000
Dallas Area Rapid Transit Sales Tax Rev. Series A, CP:
3.65% 12/16/96, LOC Credit Suisse, LOC Swiss Bank Corp 1,700,000
1,700,000
3.65% 1/28/97, LOC Credit Suisse, LOC Swiss Bank Corp 1,000,000
1,000,000
El Paso Ind. Dev. Auth. Rev. Rfdg. (La Quinta Motor Inns Inc. Proj.) Series
1991, 3.70%, LOC
NationsBank, VRDN 1,415,000 1,415,000
Farmers Branch Ind. Dev. Corp. Rev. Rfdg. (PPG Ind. Inc. Proj.) Series
1992, 3.55%, VRDN 2,300,000 2,300,000
Guadalupe-Blanco River Auth. Ind. Dev. Rev. (BOC Group Inc. Proj.) Series
1993, 3.60%, LOC
Wachovia Bank, VRDN 1,500,000 1,500,000
Harris County Dev. Corp. Rev. Series 1996 A0 3.55%, LOC Texas Commerce Bank
Houston,
VRDN 1,000,000 1,000,000
Hockley County Ind. Dev. Corp. Poll. Cont. Rev. Bonds (Amoco Proj.) 3.75%,
tender 3/1/97 1,000,000 1,000,154
Houston Wtr. & Swr. Sys. Participating VRDN, Series SG-77, 3.65% (Liquidity
Facility Societe
Generale) (b) 1,000,000 1,000,000
Houston Wtr. & Swr. Series A, 3.65% (Liquidity Facility Westdeutsche
Landesbanken/
Swiss Bank Corp.) CP 1,000,000 1,000,000
Pantego Ind. Dev. Corp. (Minyard Properties) Series 1984, 3.75%, LOC
Citibank, VRDN 2,000,000 2,000,000
Tarrant County Hsg. Fin. Auth. Multi-Family Hsg. Rev. (Windcastle Proj.)
3.60%, LOC Swiss
Bank Corp., VRDN 2,100,000 2,100,000
Texarkana Ind. Dev. Corp. Rev. Rfdg. (La Quinta Motor Inns Inc. Proj.)
3.70%, LOC
NationsBank, VRDN 2,240,000 2,240,000
Texas Gen. Oblig. TRAN Series 1996, 4.75% 8/29/97 16,600,000 16,705,530
Texas Higher Ed. Auth. Rev. Series B, 3.55% (BPA FGIC Security Purchase
Inc.) VRDN 3,910,000 3,910,000
Texas Muni. Pwr. Agcy. BAN 3.60% 2/18/97 (Liquidity Facility Bank of
America) 2,500,000 2,500,000
Texas Pub. Ed. Fin. Auth. Participating VRDN, Series CR-170, 3.65%
(Liquidity Facility
Citibank) (b) 2,000,000 2,000,000
48,120,684
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
UTAH - 0.4%
Intermountain Pwr. Agcy. Pwr. Rev. Bonds Series F, 3.65%, tender 12/6/96 $
1,000,000 $ 1,000,000
Timpanogos Spl. Svc. Dist. Participating VRDN, Series SG-83, 3.65%
(Liquidity Facility Societe
Generale) (b) 1,000,000 1,000,000
2,000,000
VERMONT - 0.9%
Vermont Edl. & Health Bldgs. Fin. Agcy. Hosp. Rev. (VHA New England) Series
E, 3.50%,
(AMBAC Insured) (BPA First Nat'l. Bank of Chicago) VRDN 2,855,000
2,855,000
Vermont Student Assistance Corp. Student Loan Rev. Series 1985, 3.75%, LOC
Nat'l.Westminster
Bank, VRDN 1,600,000 1,600,000
4,455,000
VIRGINIA - 3.1%
Louisa County Ind. Dev. Auth. Rev. Series 1995, 3.65%, LOC NationsBank,
VRDN 3,100,000 3,100,000
Suffolk Redev. & Hsg. Auth. Multi-Family Rental Hsg. Rev. (Windsor at
Fieldstone Proj.)
3.65%, LOC NationsBank, VRDN 7,492,000 7,492,000
Virginia Beach Dev Auth. Rev. Rfdg. (La Quinta Inns) Series 1993, 3.70%,
LOC NationsBank,
VRDN 2,500,000 2,500,000
Virginia Hsg. Dev. Auth. Commonwealth Mtg. Bonds Series 1996 C, 3.70%,
tender 12/5/96 2,600,000 2,600,000
15,692,000
WASHINGTON - 6.5%
Washington Gen. Oblig. Participating VRDN (b):
Series 1993 C, 3.70% (Liquidity Facility Citibank) 4,000,000 4,000,000
Series SGA-35, 3.70% (Liquidity Facility Societe Generale) 1,000,000
1,000,000
Series SGA-36, 3.70% (Liquidity Facility Societe Generale) 2,260,000
2,260,000
Series SGB-9, 3.65% (Liquidity Facility Societe Generale) 900,000
900,000
Washington Pub. Pwr. Supply Participating VRDN (b):
Series 94 B, 3.70% (Liquidity Facility Citibank 10,600,000 10,600,000
(Nuclear Proj. No.3) Series BT-126, 3.70% (BPA Bankers Trust Co.)
2,774,400 2,774,400
Washington Pub. Pwr. Supply Sys. Rev. Rfdg. (Nuclear Proj. #1) Series
1993-1A1, 3.55%, LOC
Bank of America Nat'l. Trust & Savings, VRDN 11,000,000 11,000,000
32,534,400
WISCONSIN - 1.1%
Beaver Dam Unified School Dist. BAN 4.10% 10/14/97 1,000,000 1,001,572
Kenosha Unified School Dist. TRAN 4.25% 9/26/97 1,000,000 1,003,124
Milwaukee Redev. Auth. Dev. Rev. (Bradley Ctr. Parking Facs. Proj.) Series
1986, 3.50%, LOC
Nat'l. Westminster Bank, VRDN 25,000 25,000
Wisconsin Health & Ed. Facs. Auth. Rev. (Daughters of Charity - St. Mary's)
Series 1992 A, 3.55%,
VRDN 3,740,000 3,740,000
5,769,696
WYOMING - 0.2%
Sweetwater County Poll. Cont. Rev. Bonds (Pacificorp) Series 1988 A, 3.60%,
tender 12/16/96, LOC Union Bank of Switzerland 1,200,000 1,200,000
MUNICIPAL SECURITIES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
MULTIPLE STATES - 0.7%
Stephens Equity Trust I Participating VRDN, Series 1996, 3.70%, LOC
Bayerische Hypotheken (b) $ 2,782,035 $ 2,782,035
Participating VRDN, Series 1990 A, 4.125%, LOC NationsBank (b) 747,500
747,500
3,529,535
TOTAL INVESTMENTS - 100% $ 498,479,945
Total Cost for Income Tax Purposes $ 498,479,945
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At October 31, 1996 the fund had a capital loss carryforward of
approximately $98,000 of which $24,000 and $74,000 will expire on October
31, 2000 and 2004.
DAILY TAX-EXEMPT MONEY FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1996
241.ASSETS 242. 243.
244.Investment in securities, at value - See accompanying schedule 245. $ 498,479,945
246.Cash 247. 6,273
248.Receivable for investments sold 249. 1,000,883
250.Interest receivable 251. 2,735,491
252. 253.TOTAL ASSETS 254. 502,222,592
255.LIABILITIES 256. 257.
258.Payable for investments purchased $ 1,200,000 259.
260.Share transactions in process 525,472 261.
262.Distributions payable 132,103 263.
264.Accrued management fee 161,613 265.
266.Other payables and accrued expenses 109,078 267.
268. 269.TOTAL LIABILITIES 270. 2,128,266
271.272.NET ASSETS 273. $ 500,094,326
274.Net Assets consist of: 275. 276.
277.Paid in capital 278. $ 500,191,814
279.Accumulated net realized gain (loss) on investments 280. (97,488)
281.282.NET ASSETS, for 500,191,814 shares outstanding 283. $ 500,094,326
284.285.NET ASSET VALUE, offering price and redemption price per share 286. $1.00
($500,094,326 (divided by) 500,191,814 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1996
287.288.INTEREST INCOME 289. $ 18,924,895
290.EXPENSES 291. 292.
293.Management fee $ 2,607,230 294.
295.Transfer agent, accounting and custodian fees and expenses 1,078,032 296.
297.Non-interested trustees' compensation 3,661 298.
299.Registration fees 213,395 300.
301.Audit 23,181 302.
303.Legal 7,476 304.
305.Miscellaneous 154 306.
307. Total expenses before reductions 3,933,129 308.
309. Expense reductions (548,302) 3,384,827
310.311.NET INTEREST INCOME 312. 15,540,068
313.314.NET REALIZED GAIN (LOSS) ON INVESTMENTS 315. (74,164)
316.317.NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 318. $ 15,465,904
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
319.INCREASE (DECREASE) IN NET ASSETS
320.Operations $ 15,540,068 $ 16,108,406
Net interest income
321. Net realized gain (loss) (74,164) 32,560
322. Increase (decrease) in net unrealized gain from accretion of market discount - (317)
323. 15,465,904 16,140,649
324.NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
325.Distributions to shareholders from net interest income (15,540,068) (16,108,406)
326.Share transactions at net asset value of $1.00 per share 1,958,241,067 1,737,542,023
Proceeds from sales of shares
327. Reinvestment of distributions from net interest income 13,605,676 14,101,845
328. Cost of shares redeemed (2,030,851,443) (1,646,761,931)
329.330. (59,004,700) 104,881,937
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES RESULTING FROM SHARE TRANSACTIONS
331. (59,078,864) 104,914,180
332.TOTAL INCREASE (DECREASE) IN NET ASSETS
333.NET ASSETS 334. 335.
336. Beginning of period 559,173,190 454,259,010
337. End of period $ 500,094,326 $ 559,173,190
</TABLE>
FINANCIAL HIGHLIGHTS - INITIAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
338. YEARS ENDED OCTOBER 31,
339. 1996 1995 1994 1993 1992
340.SELECTED PER-SHARE DATA
341.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
342.Income from Investment Operations .030 .033 .022 .021 .029
Net interest income
343.Less Distributions
344. From net interest income (.030) (.033) (.022) (.021) (.029)
345.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
346.TOTAL RETURN A 3.02% 3.36% 2.21% 2.11% 2.93%
347.RATIOS AND SUPPLEMENTAL DATA
348.Net assets, end of period (000 omitted) $ 500,094 $ 559,173 $ 454,259 $ 538,756 $ 484,999
349.Ratio of expenses to average net assets .65% .65% .65% .61% .63%
B B B
350.Ratio of net interest income to average net assets 2.98% 3.31% 2.17% 2.09% 2.86%
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
U.S. Treasury Portfolio (U.S. Treasury) and Money Market Portfolio (Money
Market)(collectively referred to as "the taxable funds") are funds of Daily
Money Fund (a trust). Fidelity Daily-Tax-Exempt Money Fund (Daily
Tax-Exempt) is a fund of Daily Tax-Exempt Money Fund (a trust). Each trust
is registered under the Investment Company Act of 1940, as amended (the
1940 Act), as an open-end management investment company organized as a
Delaware business trust, and is authorized to issue an unlimited number of
shares.
On October 17, 1996, the Board of Trustees approved a change in the fiscal
year-end of the taxable funds from July 31 to October 31. Accordingly,
their financial statements include the results of operations and changes in
net assets for the three-month period ended October 31, 1996.
U.S. Treasury offers two classes of shares, Initial Class and Class B, each
of which has equal rights as to assets and voting privileges. Each class
has exclusive voting rights with respect to its distribution plan. Interest
income, realized and unrealized capital gains and losses, and the common
expenses of the fund are allocated on a pro rata basis to each class based
on the relative net assets of each class to the total net assets of the
fund. Each class of shares differs in its respective distribution, transfer
agent, registration, and certain other class-specific fees and expenses.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the funds:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of discount, is accrued as earned. For Daily Tax-Exempt,
accretion of market discount represents unrealized gain until realized at
the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the taxable funds, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements for U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the funds'
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. Money Market and Daily Tax-Exempt are permitted to
invest in securities that are subject to legal or contractual restrictions
on resale. These securities generally may be resold in transactions exempt
from registration or to the public if the securities are registered.
Disposal of these
2. OPERATING POLICIES - CONTINUED
RESTRICTED SECURITIES - CONTINUED
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $45,000,000 or
1.7% of net assets for Money Market. Daily Tax-Exempt had no investments in
restricted securities (excluding 144A issues).
3. JOINT TRADING ACCOUNT.
At the end of the period, U.S. Treasury had 20% or more of its total
investments in repurchase agreements through a joint trading account. These
repurchase agreements were with entities whose creditworthiness has been
reviewed and found satisfactory by FMR. The maturity values of the joint
trading account investments were $1,376,212,623 at 5.56%, $49,287,619 at
5.57% and $80,906,889 at 5.30%. The investments in repurchase agreements
through the joint trading account are summarized as follows:
SUMMARY OF JOINT TRADING
DATED OCTOBER 31, 1996, DUE NOVEMBER 1, 1996 AT 5.56%
Number of dealers or banks 18
Maximum amount with one dealer or bank 23.4%
Aggregate principal amount of agreements $8,555,723,000
Aggregate maturity amount of agreements $8,557,045,050
Aggregate market value of transferred assets $8,730,452,846
Coupon rates of transferred assets 0.0% to 15.75%
Maturity dates of transferred assets 11/7/96 to 8/15/26
DATED OCTOBER 31, 1996, DUE NOVEMBER 1, 1996 AT 5.57%
Number of dealers or banks 4
Maximum amount with one dealer or bank 40.4%
Aggregate principal amount of agreements $470,000,000
Aggregate maturity amount of agreements $470,072,661
Aggregate market value of transferred assets $479,671,311
Coupon rates of transferred assets 0.0% to 15.75%
Maturity dates of transferred assets 11/15/96 to 8/15/26
DATED OCTOBER 10, 1996, DUE DECEMBER 26, 1996 AT 5.30%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100.0%
Aggregate principal amount of agreements $500,000,000
Aggregate maturity amount of agreements $505,668,056
Aggregate market value of transferred assets $510,107,174
Coupon rates of transferred assets 0.0% to 8.125%
Maturity dates of transferred assets 4/10/97 to 8/15/19
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a fee that
is computed daily at an annual rate of .50% of the fund's average net
assets.
SUB-ADVISER FEE. As each fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans) adopted by Initial Class shares of each fund, and in
accordance with Rule 12b-1 of the 1940 Act, FMR or the funds' distributor,
Fidelity Distributors Corporation (FDC), an affiliate of FMR, may use their
resources to pay administrative and promotional expenses related to the
sale of each fund's Initial Class shares. Subject to the approval of each
Board of Trustees, the Plans also authorize payments to third parties that
assist in the sale of each fund's Initial Class shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $1,284,231,
$1,411,317 and $1,352,100 for the Initial Class of U.S. Treasury, Money
Market, and Daily Tax-Exempt, respectively, for the period.
In accordance with Rule 12b-1 of the 1940 Act, the Trustees have adopted a
separate distribution plan with respect to U.S. Treasury's Class B shares
(Class B Plan). Under the Class B Plan, the fund pays FDC a distribution
and service fee.
This fee is based on an annual rate of 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
average net assets of the Class B shares. For the period, the fund paid
FDC $48,497 under the Class B Plan, of which $16,950 was paid to securities
dealers, banks and other financial institutions for the distribution of
Class B shares and providing shareholder support services.
In addition, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the Class B shares. Subject to
the approval of the Board of Trustees, the Class B Plan also authorizes
payments to third parties that assist in the sale of the fund's Class B
shares or render shareholder support services. FMR or FDC has informed the
fund that payments made to third parties under the Class B Plan amounted to
$19,007 for the period.
SALES LOAD. FDC receives the proceeds of a contingent deferred sales charge
levied on U. S. Treasury Class B share redemptions occurring within five
years of purchase. The charge is based on declining rates which range from
4% to 1% of the lesser of the cost of shares at the initial date of
purchase or the net asset value of the redeemed shares, excluding any
reinvested dividends and capital gains. For the period, FDC received
contingent deferred sales charges of $26,013 on Class B share redemptions
from the fund. When Class B shares are sold, FDC pays commissions from its
own resources to dealers through which the sales are made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and
shareholder servicing agent for the funds except for Daily Tax-Exempt. UMB
Bank, n.a. (UMB) is the custodian and transfer and shareholder servicing
agent for Daily Tax-Exempt. UMB has entered into a sub-contract with FIIOC
to perform the activities associated with the transfer and shareholder
servicing agent functions for Daily Tax-Exempt. FIIOC receives account fees
and asset-based fees that vary according to account size. FIIOC pays for
typesetting and mailing of all shareholder reports, except proxy
statements. For the period, the transfer agent fees were equivalent to an
annualized rate of .17%, .27%, and .26% of the average net assets for U.S.
Treasury Initial Class, U.S. Treasury Class B and Money Market Initial
Class, respectively. For the period, the transfer agent fees were
equivalent to an annual rate of .18% of average net assets for Daily
Tax-Exempt Initial Class.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the accounting records for the taxable funds. UMB also has a sub-contract
with FSC to maintain Daily Tax-Exempt's accounting records. The accounting
fee is based on the level of average net assets for the month plus
out-of-pocket expenses. For the period, FSC received accounting fees
amounting to $107,140 for Daily Tax-Exempt.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets.
U.S. TREASURY INITIAL CLASS. For the period, this expense
limitation was .65% of average net assets and the reimbursement reduced
expenses by $169,465.
U.S. TREASURY CLASS B. For the period, this expense limitation was 1.35% of
average net assets and the reimbursement reduced expenses by $23,973.
MONEY MARKET INITIAL CLASS. For the period, this expense limitation was
.65% of average net assets and the reimbursement reduced expenses by
$819,006.
DAILY TAX-EXEMPT INITIAL CLASS. For the period, this expense limitation was
.65% of average net assets and the reimbursement reduced expenses by
$543,729.
In addition, each fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of each fund's expenses. During the period, the custodian fees were
reduced by $69 and $4,573 for Money Market and Daily Tax-Exempt,
respectively, under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, 2 shareholders were each record owners of more
than 10% of the total outstanding shares of U.S. Treasury totaling
approximately 41% of Initial Class shares.
7. SHARE TRANSACTIONS.
Share transactions for both classes of U.S. Treasury at net asset value of
$1.00 per share were as follows:
INITIAL CLASS THREE MONTHS YEAR ENDED YEAR ENDED
ENDED JULY 31, JULY 31,
OCTOBER 31, 1996 1996 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Shares sold $ 2,052,601,018 $ 11,030,210,151 $ 10,338,354,217
Reinvestment of distributions from net interest income 12,481,771 56,208,793 49,283,595
Shares redeemed (2,065,230,596) (11,113,118,785)
(10,585,120,039)
Net increase (decrease) $ (147,806) $ (26,699,841) $ (197,482,227)
</TABLE>
CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Shares sold $ 10,395,134 $ 82,859,473 $ 17,802,599
Reinvestment of distributions from net interest income 257,070 472,884 185,089
Shares redeemed
(30,201,713) (46,523,167) (15,460,856)
Net increase (decrease) $ (19,549,509) $ 36,809,190 $ 2,526,832
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Daily Money Fund and the Shareholders of U.S. Treasury
Portfolio and Money Market Portfolio:
We have audited the accompanying statements of assets and liabilities of
Daily Money Fund: U.S. Treasury Portfolio and Money Market Portfolio,
including the schedules of portfolio investments as of October 31, 1996,
the related statements of operations for the three months then ended, the
statements of changes in net assets for the three months then ended and for
each of the two years in the period ended July 31, 1996 and the financial
highlights of the U.S. Treasury Portfolio (Initial Class) and the Money
Market Portfolio (Initial Class) for the three months ended October 31,
1996 and for each of the five years in the period ended July 31, 1996 and
of the U. S. Treasury Portfolio (Class B) for the three months ended
October 31, 1996, for each of the two years in the period ended July 31,
1996, and for the period July 1, 1994 (commencement of operations) to July
31, 1994. These financial statements and financial highlights are the
responsibility of the funds' management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with 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
securities owned as of October 31, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Daily Money Fund: U.S. Treasury Portfolio and Money Market Portfolio as
of October 31, 1996, the results of their operations for the three months
then ended, the changes in their net assets for the three months then ended
and for each of the two years in the period ended July 31, 1996, and the
financial highlights of the U.S. Treasury Portfolio (Initial Class) and the
Money Market Portfolio (Initial Class) for the three months ended October
31, 1996 and for each of the five years in the period ended July 31, 1996
and of the U. S. Treasury Portfolio (Class B) for the three months ended
October 31, 1996, for each of the two years in the period ended July 31,
1996, and for the period July 1, 1994 (commencement of operations) to July
31, 1994, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
December 2 , 1996
To the Trustees and Shareholders of Daily Tax-Exempt Money Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of Daily
Tax-Exempt Money Fund at October 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years then ended, and its financial highlights for the periods indicated,
in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of Daily Tax-Exempt Money
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities owned at October 31, 1996 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion
expressed above.
Price Waterhouse, LLP
Dallas, Texas
December 10, 1996
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
Leland Barron, VICE PRESIDENT
Robert Duby, VICE PRESIDENT
Scott Orr, VICE PRESIDENT
Sarah H. Zenoble, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Kenneth A. Rathgeber, TREASURER
Thomas D. Maher, ASSISTANT VICE PRESIDENT
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
Thomas J. Simpson, ASSISTANT TREASURER
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company
Boston, MA
UMB Bank, n.a.
Kansas City, MO
DAILY TAX-EXEMPT MONEY FUND
CUSTODIANS
The Bank of New York
New York, NY
UMB Bank, n.a.
Kansas City, MO
DAILY TAX-EXEMPT MONEY FUND
