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Previous: CALVERT CASH RESERVES, 24F-2NT, 1998-12-21 |
Next: VERMONT FINANCIAL SERVICES CORP, 8-K, 1998-12-21 |
(2_FIDELITY_LOGOS)
FIDELITY CASH MANAGEMENT
FUNDS
TREASURY FUND
PRIME FUND
TAX-EXEMPT FUND
ANNUAL REPORT
OCTOBER 31, 1998
CONTENTS
SCHEDULES OF INVESTMENTS & FINANCIAL STATEMENTS
TREASURY FUND 3
PRIME FUND 12
TAX-EXEMPT FUND 27
NOTES TO THE FINANCIAL STATEMENTS 49
REPORT OF INDEPENDENT ACCOUNTANTS 60
EACH FUND SEEKS TO OBTAIN AS HIGH A LEVEL OF CURRENT INCOME AS IS
CONSISTENT WITH THE PRESERVATION OF CAPITAL AND LIQUIDITY BY INVESTING
IN HIGH-QUALITY, SHORT-TERM MONEY MARKET SECURITIES. PRIME FUND
INVESTS IN A BROAD RANGE OF MONEY MARKET SECURITIES. TREASURY FUND
INVESTS IN MONEY MARKET SECURITIES ISSUED BY THE U.S. TREASURY AND
BACKED BY THE FULL FAITH AND CREDIT OF THE U.S. GOVERNMENT. TAX-EXEMPT
FUND SEEKS TO OBTAIN CURRENT INCOME, EXEMPT FROM FEDERAL INCOME TAXES.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
TREASURY FUND
INVESTMENTS OCTOBER 31, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
U.S. TREASURY OBLIGATIONS - 17.7%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
U.S. TREASURY BILLS - 0.5%
4/29/99 4.25% $ 10,000,000 $ 9,793,166
U.S. TREASURY NOTES - 2.3%
11/30/98 5.64 10,000,000 9,995,544
11/30/98 5.66 10,000,000 9,995,369
6/30/99 5.42 20,000,000 20,063,019
40,053,932
U.S. TREASURY NOTES - PRINCIPAL ONLY STRIPS - 14.9%
11/15/98 5.45 10,000,000 9,977,526
2/15/99 5.46 10,000,000 9,846,281
2/15/99 5.47 20,000,000 19,693,030
2/15/99 5.50 25,000,000 24,614,669
2/15/99 5.51 20,000,000 19,689,781
2/15/99 5.53 15,000,000 14,769,087
2/15/99 5.54 15,000,000 14,768,253
5/15/99 5.49 10,000,000 9,715,022
5/15/99 5.50 42,000,000 40,802,898
5/15/99 5.51 50,000,000 48,569,683
5/15/99 5.58 10,000,000 9,707,456
8/15/99 4.21 10,000,000 9,674,446
8/15/99 4.23 10,000,000 9,672,839
8/15/99 5.00 5,000,000 4,808,868
11/15/99 4.11 10,000,000 9,585,026
11/15/99 4.25 10,000,000 9,571,878
265,466,743
TOTAL U.S. TREASURY OBLIGATIONS 315,313,841
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
REPURCHASE AGREEMENTS - 82.3%
MATURITY
AMOUNT
In a joint trading account
(Notes 2 and 3) (U.S. Treasury Obligations) dated:
8/14/98 due:
11/5/98 At 5.5% $ 50,634,028 50,000,000
11/9/98 At 5.5% 50,664,583 50,000,000
9/11/98 due 12/9/98 At 5.36% 64,848,071 64,000,000
10/14/98 due 12/14/98 At 5.02% 5,042,531 5,000,000
10/15/98 due 11/16/98 At 5.08% 16,072,249 16,000,000
REPURCHASE AGREEMENTS - CONTINUED
MATURITY VALUE
AMOUNT (NOTE 1)
In a joint trading account
(Notes 2 and 3)
(U.S. Treasury Obligations) dated: - continued
10/29/98 due:
2/23/99 At 4.72% $ 43,659,620 $ 43,000,000
3/29/99 At 4.7% 43,847,697 43,000,000
10/30/98 due 11/2/98 At:
5.4% 38,190,166 38,173,000
5.41% 1,152,519,738 1,152,000,000
TOTAL REPURCHASE AGREEMENTS 1,461,173,000
TOTAL INVESTMENTS - 100% $ 1,776,486,841
Total Cost for Income Tax Purposes $ 1,776,486,841
</TABLE>
INCOME TAX INFORMATION
At October 31, 1998, the fund had a capital loss carryforward of
approximately $391,000 all of which will expire on October 31, 2001.
A total of 23.88% 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 (unaudited).
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
TREASURY FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
ASSETS
Investment in securities, at value (including repurchase $ 1,776,486,841
agreements of $1,461,173,000) -
See accompanying schedule
Cash 2,215
Receivable for investments sold 76,807,000
Receivable for fund shares sold 10,498,943
Interest receivable 5,184,326
TOTAL ASSETS 1,868,979,325
LIABILITIES
Payable for fund shares redeemed $ 33,498,272
Distributions payable 1,339,934
Accrued management fee 231,651
Distribution fees payable 518,746
Other payables and accrued expenses 393,554
TOTAL LIABILITIES 35,982,157
NET ASSETS $ 1,832,997,168
Net Assets consist of:
Paid in capital $ 1,833,388,405
Accumulated net realized gain (loss) on investments (391,237)
NET ASSETS $ 1,832,997,168
</TABLE>
CALCULATION OF MAXIMUM OFFERING PRICE $1.00
DAILY MONEY CLASS:
NET ASSET VALUE, offering price and redemption price per
share ($1,261,148,309 (divided by) 1,261,381,824 shares)
CAPITAL RESERVES CLASS: $1.00
NET ASSET VALUE, offering price and redemption price per
share ($479,839,701 (divided by) 479,928,550 shares)
ADVISOR B CLASS: $1.00
NET ASSET VALUE and offering price per share
($76,109,682 (divided by) 76,123,775 shares) A
ADVISOR C CLASS: $1.00
NET ASSET VALUE and offering price per share
($15,899,476 (divided by) 15,902,420 shares) A
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
INTEREST INCOME $ 89,359,523
EXPENSES
Management fee $ 4,006,033
Transfer agent fees 3,692,726
Distribution fees 5,168,177
Accounting fees and expenses 171,942
Non-interested trustees' compensation 1,405
Custodian fees and expenses 8,027
Registration fees 320,478
Audit 48,552
Legal 9,631
Miscellaneous 6,589
Total expenses before reductions 13,433,560
Expense reductions (1,852,995) 11,580,565
NET INTEREST INCOME 77,778,958
NET REALIZED GAIN (LOSS) ON INVESTMENTS 48,136
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 77,827,094
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 77,778,958 $ 71,379,383
Net interest income
Net realized gain (loss) 48,136 28,174
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 77,827,094 71,407,557
FROM OPERATIONS
Distributions to shareholders from net interest income (77,778,958) (71,379,383)
Share transactions - net increase (decrease) 238,198,887 (493,517,833)
Net asset value of Capital Reserves Class shares issued in - 266,921,847
exchange for the net assets of Capital Reserves:
U.S. Government Portfolio
TOTAL SHARE TRANSACTIONS 238,198,887 (226,595,986)
TOTAL INCREASE (DECREASE) IN NET ASSETS 238,247,023 (226,567,812)
NET ASSETS
Beginning of period 1,594,750,145 1,821,317,957
End of period $ 1,832,997,168 $ 1,594,750,145
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - DAILY MONEY CLASS
YEARS ENDED THREE MONTHS YEARS ENDED
OCTOBER 31, ENDED JULY 31,
OCTOBER 31,
1998 1997 1996 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
Income from
Investment
Operations
Net interest .049 .049 .012 .049 .049 .029
income
Less Distributions
From net inter- (.049) (.049) (.012) (.049) (.049) (.029)
est income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B, C 5.04% 4.97% 1.19% 5.06% 5.02% 2.89%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end $ 1,261 $ 1,284 $ 1,801 $ 1,801 $ 1,828 $ 2,025
of period
(in millions)
Ratio of expenses .65% D .65% D .65% A, D .65% D .65% D .60%
to average net
assets
Ratio of net 4.93% 4.88% 4.66% A 4.94% 4.89% 2.81%
interest income
to average net
assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CAPITAL RESERVES CLASS
YEARS ENDED
OCTOBER 31,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 1.000 $ 1.000000
Income from Investment Operations
Net interest income .047 .000134
Less Distributions
From net interest income (.047) (.000134)
Net asset value, end of period $ 1.000 $ 1.000000
TOTAL RETURN B, C 4.78% .01%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 480 $ 265
Ratio of expenses to average net assets .90% D .90% A, D
Ratio of net interest income to average net assets 4.67% 4.93% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E FOR OCTOBER 31, 1997 (COMMENCEMENT OF SALE OF CAPITAL RESERVES CLASS
SHARES).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - ADVISOR B CLASS
YEARS ENDED THREE MONTHS YEARS ENDED
OCTOBER 31, ENDED JULY 31,
OCTOBER 31,
1998 1997 1996 1996 1995 1994 E
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
Income from
Investment
Operations
Net interest .042 .041 .010 .043 .042 .002
income
Less Distributions
From net interest (.042) (.041) (.010) (.043) (.042) (.002)
income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B, C 4.26% 4.20% 1.01% 4.33% 4.28% .25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end $ 76 $ 46 $ 20 $ 40 $ 3 $ 1
of period
(in millions)
Ratio of expenses 1.40% D 1.39% D 1.35% A, D 1.35% D 1.35% D 1.35% A, D
to average net
assets
Ratio of net interest 4.16% 4.24% 3.96% A 4.13% 4.22% 3.03% A
income to
average net
assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E FOR THE PERIOD JULY 1, 1994 (COMMENCEMENT OF SALE OF ADVISOR B CLASS
SHARES) TO JULY 31, 1994.
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - ADVISOR C CLASS
YEAR ENDED
OCTOBER 31,
1998 E
SELECTED PER-SHARE DATA
Income from Investment Operations
Net asset value at beginning of period $ 1.000
Net interest income .041
Less Distributions
From net interest income (.041)
Net asset value, end of period $ 1.000
TOTAL RETURN B, C 4.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 16
Ratio of expenses to average net assets 1.40% A, D
Ratio of net interest income to average net assets 4.24% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF ADVISOR C
CLASS SHARES) TO OCTOBER 31, 1998.
PRIME FUND
INVESTMENTS OCTOBER 31, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 36.2%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
DOMESTIC CERTIFICATES OF DEPOSIT - 2.4%
Bank of America National Trust & Savings Association
3/24/99 5.34% $ 30,000,000 $ 30,000,000
Chase Manhattan Bank
3/22/99 4.95 57,000,000 57,000,000
Chase Manhattan Bank (USA)
2/22/99 5.00 10,000,000 10,000,000
CoreStates Bank NA, Philadelphia
11/9/98 5.38 (b) 5,000,000 5,000,000
Morgan Guaranty Trust Co., NY
12/8/98 5.29 34,000,000 34,000,000
136,000,000
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 13.8%
Abbey National Treasury Services PLC
12/3/98 5.50 50,000,000 50,000,000
12/10/98 5.50 50,000,000 50,000,534
12/28/98 5.43 35,000,000 35,000,000
3/15/99 5.15 80,000,000 80,000,000
ABN-AMRO Bank NV
11/12/98 5.33 75,000,000 75,000,000
12/22/98 5.12 20,000,000 20,000,000
Bank of Scotland Treasury Services
11/30/98 5.35 10,000,000 10,000,296
2/22/99 5.03 15,000,000 15,000,463
Barclays Bank PLC
12/10/98 5.42 11,000,000 11,001,259
12/14/98 5.28 20,000,000 20,000,000
Bayerische Hypo-und Vereinsbank AG
12/18/98 5.26 10,000,000 9,999,861
Halifax PLC
11/9/98 5.33 75,000,000 75,000,166
11/30/98 5.24 35,000,000 35,000,000
12/1/98 5.19 35,000,000 35,000,000
12/31/98 5.20 60,000,000 60,001,900
RaboBank Nederland Coop. Central
11/10/98 5.33 50,000,000 50,000,000
2/26/99 5.60 25,000,000 24,993,139
Societe Generale, France
11/2/98 5.29 10,000,000 10,000,003
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - CONTINUED
Svenska Handelsbanken
12/1/98 5.19% $ 20,000,000 $ 20,000,000
12/17/98 5.41 20,000,000 20,000,000
12/29/98 5.13 25,000,000 25,000,200
Toronto Dominion Bank
11/5/98 5.28 50,000,000 50,000,000
Westpac Banking Corp.
12/14/98 5.30 5,000,000 5,000,030
785,997,851
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 19.5%
Bank of Montreal, Canada
11/9/98 5.30 25,000,000 25,000,000
Bank of Nova Scotia
5/28/99 5.75 30,000,000 29,996,792
Banque Nationale de Paris
12/14/98 5.41 25,000,000 25,000,271
Barclays Bank PLC
11/12/98 5.33 10,000,000 10,000,000
3/23/99 5.45 30,000,000 30,004,035
Bayerische Landesbank Girozentrale
12/1/98 5.56 125,000,000 125,000,000
2/26/99 5.32 50,000,000 50,001,587
Canadian Imperial Bank of Commerce
11/4/98 5.55 40,000,000 40,000,000
12/1/98 5.54 30,000,000 30,000,000
12/2/98 5.26 22,000,000 21,999,942
12/21/98 5.12 10,000,000 10,000,000
3/2/99 5.70 20,000,000 19,995,869
Credit Agricole Indosuez
11/9/98 5.33 20,000,000 20,000,000
Credit Communale de Belgique
2/3/99 5.64 10,000,000 10,000,000
2/12/99 5.61 40,000,000 40,002,225
Deutsche Bank AG
2/11/99 5.60 15,000,000 15,000,000
3/2/99 5.70 15,000,000 14,997,617
Dresdner Bank AG
2/16/99 5.34 35,000,000 35,000,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Landesbank Hessen-Thuringen
11/9/98 5.30% $ 49,000,000 $ 49,002,146
National Westminster Bank PLC
12/4/98 5.51 16,000,000 16,000,000
2/26/99 5.70 20,000,000 19,997,542
3/2/99 5.70 20,000,000 19,996,823
RaboBank Nederland Coop. Central
12/10/98 5.41 5,000,000 5,000,214
2/2/99 5.54 20,000,000 19,998,002
3/2/99 5.50 30,000,000 30,000,000
3/17/99 5.76 50,000,000 49,961,167
4/2/99 4.93 25,000,000 25,009,323
6/1/99 5.75 10,000,000 9,996,105
Royal Bank of Canada
11/3/98 5.25 15,000,000 15,000,108
2/10/99 5.60 15,000,000 14,997,212
2/26/99 5.70 13,500,000 13,497,097
Royal Bank of Scotland PLC
11/25/98 5.58 30,000,000 30,000,000
11/30/98 5.56 50,000,000 50,000,000
Societe Generale, France
11/18/98 5.63 15,000,000 15,000,348
Swiss Bank Corp.
3/19/99 5.70 20,000,000 19,994,927
5/7/99 5.50 12,000,000 12,008,842
6/3/99 5.75 30,000,000 29,988,204
Toronto Dominion Bank
2/11/99 5.60 25,000,000 25,000,000
Westdeutsche Landesbank Girozentrale
12/21/98 5.12 40,000,000 40,000,000
2/8/99 5.18 25,000,000 25,000,000
2/8/99 5.61 20,000,000 20,000,000
2/9/99 5.18 10,000,000 10,000,000
117,446,398
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
SAN FRANCISCO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.5%
Banque Nationale de Paris
12/1/98 5.56% $ 30,000,000 30,000,000
TOTAL CERTIFICATES OF DEPOSIT 2,069,444,249
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COMMERCIAL PAPER - 41.7%
Aspen Funding Corp.
11/23/98 5.60 15,000,000 14,949,446
Asset Securitization Coop. Corp.
11/16/98 5.38 50,000,000 49,888,542
11/19/98 5.38 25,000,000 24,933,125
12/7/98 5.59 10,000,000 9,945,000
12/9/98 5.28 8,000,000 7,955,667
12/9/98 5.59 30,000,000 29,825,833
1/28/99 5.31 25,000,000 24,679,778
Associates Corp. of North America
11/23/98 5.58 100,000,000 99,663,889
12/14/98 5.41 50,000,000 49,681,083
2/10/99 5.08 40,000,000 39,438,889
2/17/99 5.59 50,000,000 49,184,000
BBV Finance, Inc.
2/12/99 5.62 45,000,000 44,297,025
CIT Group, Inc.
12/7/98 5.59 75,000,000 74,587,500
Citibank Credit Card Master Trust I (Dakota Certificate Program)
12/10/98 5.49 5,000,000 4,970,642
2/8/99 5.30 10,000,000 9,856,450
Commonwealth Bank of Australia
11/30/98 5.15 20,000,000 19,917,431
Cregem North America, Inc.
12/23/98 5.10 20,000,000 19,853,822
Delaware Funding Corp.
11/3/98 5.55 5,033,000 5,031,459
11/17/98 5.53 10,879,000 10,852,504
11/24/98 5.23 12,301,000 12,260,055
11/25/98 5.23 6,602,000 6,579,069
11/25/98 5.25 56,271,000 56,074,802
12/1/98 5.28 3,726,000 3,709,699
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
Delaware Funding Corp. - continued
12/16/98 5.22% $ 10,000,000 $ 9,935,250
Deutsche Bank Financial, Inc.
11/12/98 5.59 83,000,000 82,860,260
11/13/98 5.59 75,000,000 74,862,250
11/16/98 5.36 65,000,000 64,855,646
11/19/98 5.17 10,000,000 9,974,250
12/23/98 5.15 20,000,000 19,852,667
du Pont (E.I.) de Nemours & Co.
11/5/98 5.28 15,000,000 14,991,250
Enterprise Funding Corp.
11/9/98 5.23 75,000,000 74,913,000
11/9/98 5.24 10,000,000 9,988,378
11/10/98 5.53 15,000,000 14,979,450
11/12/98 5.42 6,000,000 5,990,100
12/17/98 5.24 12,000,000 11,920,267
1/22/99 5.32 5,154,000 5,092,367
Fleet Funding Corp.
12/1/98 5.23 11,829,000 11,777,741
General Electric Capital Corp.
11/3/98 5.43 30,000,000 29,991,000
11/4/98 5.43 30,000,000 29,986,500
11/5/98 5.43 30,000,000 29,982,000
11/12/98 5.59 40,000,000 39,932,656
11/19/98 5.63 5,100,000 5,085,924
12/17/98 5.49 16,000,000 15,889,396
2/1/99 5.62 25,000,000 24,650,528
2/17/99 5.60 15,000,000 14,754,750
2/18/99 5.04 80,000,000 78,801,000
General Electric Capital Services, Inc.
11/3/98 5.59 35,000,000 34,989,267
11/23/98 5.58 30,000,000 29,899,167
General Electric Co.
2/10/99 5.11 40,000,000 39,435,522
General Motors Acceptance Corp.
11/6/98 5.44 50,000,000 49,962,500
11/12/98 5.62 25,000,000 24,957,833
11/18/98 5.58 25,000,000 24,934,951
1/26/99 5.67 25,000,000 24,671,528
1/28/99 5.13 40,000,000 39,505,244
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
General Motors Acceptance Corp. - continued
2/10/99 5.16% $ 50,000,000 $ 49,287,389
Generale de Banque SA
12/10/98 5.50 10,000,000 9,941,283
12/29/98 5.14 40,000,000 39,671,978
2/16/99 5.61 25,000,000 24,595,035
2/22/99 5.50 25,000,000 24,579,389
Halifax PLC
2/24/99 5.55 25,000,000 24,568,750
Kitty Hawk Funding Corp.
11/25/98 5.27 5,000,000 4,982,500
12/4/98 5.23 50,000,000 49,761,667
Lloyds Bank PLC
2/24/99 5.55 50,000,000 49,137,500
Merrill Lynch & Co., Inc.
11/30/98 5.65 15,000,000 14,933,300
11/30/98 5.66 65,000,000 64,712,014
Morgan Stanley, Dean Witter & Co.
11/12/98 5.36 (b) 15,000,000 15,000,000
1/21/99 5.22 50,000,000 49,420,625
National Rural Utility Coop. Finance Corp.
12/14/98 5.42 24,405,000 24,249,045
NationsBank Corp.
11/16/98 5.60 10,000,000 9,977,042
Nationwide Building Society
12/10/98 5.42 10,000,000 9,942,042
Preferred Receivables Funding Corp.
11/2/98 5.54 5,000,000 4,999,236
11/17/98 5.32 10,000,000 9,976,533
12/10/98 5.21 25,000,000 24,859,979
12/17/98 5.21 8,055,000 8,001,788
Salomon Smith Barney Holdings, Inc.
12/2/98 5.52 20,000,000 19,906,139
Societe Generale North America, Inc.
11/5/98 5.29 29,000,000 28,983,035
Southern Co.
11/24/98 5.52 20,000,000 19,930,106
Three Rivers Funding Corp.
11/16/98 5.48 7,000,000 6,984,104
11/18/98 5.43 5,940,000 5,924,853
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
Triple A One Funding Corp.
11/10/98 5.25% $ 43,487,000 $ 43,430,032
11/19/98 5.24 10,131,000 10,104,558
11/23/98 5.45 7,590,000 7,564,860
12/2/98 5.25 4,860,000 4,838,154
12/3/98 5.25 2,000,000 1,990,720
UBS Finance (Delaware), Inc.
12/15/98 5.29 60,000,000 59,615,733
12/28/98 5.13 25,000,000 24,798,877
3/1/99 5.05 25,000,000 24,586,750
TOTAL COMMERCIAL PAPER 2,388,813,368
</TABLE>
FEDERAL AGENCIES - 2.2%
FEDERAL HOME LOAN BANK - 2.2%
<TABLE>
<CAPTION>
<S> <C> <C>
Agency Coupons - 2.2%
3/11/99 5.45 125,000,000 125,047,932
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
BANK NOTES - 7.7%
Abbey National Treasury Services PLC
11/17/98 5.54 (a)(b) 30,000,000 29,979,335
CoreStates Bank NA, Philadelphia
11/13/98 5.37 (b) 5,000,000 5,000,000
First Union National Bank of North Carolina
11/2/98 5.16 (b) 25,000,000 24,998,701
1/20/99 5.22 (b) 50,000,000 50,000,000
3/15/99 5.50 20,000,000 20,000,000
Fleet National Bank, Providence
2/4/99 5.22 (b) 22,000,000 21,989,000
Key Bank NA
11/2/98 5.13 (b) 10,000,000 9,998,784
11/23/98 5.10 (b) 20,000,000 19,989,233
NationsBank NA
2/22/99 5.05 25,000,000 25,000,000
2/23/99 5.04 50,000,000 50,000,000
3/17/99 5.30 50,000,000 50,000,000
3/22/99 4.95 25,000,000 25,000,000
BANK NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
NationsBank NA - continued
4/13/99 5.05% $ 30,000,000 $ 30,000,000
4/20/99 4.90 25,000,000 25,000,000
PNC Bank NA, Pittsburgh
1/19/99 5.23 (b) 30,000,000 29,996,262
2/3/99 5.22 (b) 22,000,000 21,996,755
TOTAL BANK NOTES 438,948,070
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MASTER NOTES - 1.5%
Goldman Sachs Group L.P. (The)
11/4/98 5.27 (b) 5,000,000 5,000,000
12/8/98 5.56 (b)(c) 80,000,000 80,000,000
TOTAL MASTER NOTES 85,000,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MEDIUM-TERM NOTES - 2.3%
Exxon Shipping Co.
11/29/98 5.37 (b) 39,000,000 39,000,000
General Electric Capital Corp.
12/9/98 5.54 (b) 9,000,000 9,000,000
Merrill Lynch & Co., Inc.
12/4/98 5.53 (b) 20,000,000 19,997,689
Morgan Guaranty Trust Co., NY
11/30/98 5.17 (b) 30,000,000 29,986,837
Morgan Stanley, Dean Witter, Discover & Co.
11/2/98 5.26 (b) 25,000,000 25,000,000
Norwest Corp.
1/22/99 5.21 (b) 8,000,000 8,000,000
TOTAL MEDIUM-TERM NOTES 130,984,526
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHORT-TERM NOTES - 4.8%
New York Life Insurance Co.
11/6/98 5.29 (b) 25,000,000 25,000,000
11/6/98 5.64 (b) 17,000,000 17,000,000
Peoples Security Life Insurance Co.
11/2/98 5.48 (b)(c) 18,000,000 18,000,000
SHORT-TERM NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
SMM Trust (1997-P)
11/16/98 5.41% (a)(b) $ 27,000,000 $ 27,000,000
SMM Trust (1997-X)
11/12/98 5.41 (a)(b) 75,000,000 75,000,000
SMM Trust (1998-I)
11/30/98 5.22 (a)(b) 12,000,000 12,000,000
Strategic Money Market Trust (1997-A)
12/16/98 5.50 (a)(b) 94,000,000 94,000,000
Strategic Money Market Trust (1998-B)
11/5/98 5.38 (a)(b) 8,000,000 8,000,000
TOTAL SHORT-TERM NOTES 276,000,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
TIME DEPOSITS - 2.6%
Bayerische Hypo und Vereinsbank AG
11/2/98 5.75 25,000,000 25,000,000
Deutsche Bank AG
11/2/98 5.69 123,000,000 123,000,000
TOTAL TIME DEPOSITS 148,000,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
REPURCHASE AGREEMENTS - 1.0%
MATURITY
AMOUNT
In a joint trading account (Note 2) (U.S. Treasury Obligations) $ 60,688,278 60,661,000
dated 10/30/98 due 11/2/98 At 5.4%
TOTAL INVESTMENTS - 100% $ 5,722,899,145
Total Cost for Income Tax Purposes $ 5,722,899,145
</TABLE>
LEGEND
(a) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $245,979,335 or 4.4% of net assets.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when
applicable, the final maturity date.
(c) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
SECURITY ACQUISITION DATE COST
Goldman Sachs Group L.P. (The) 5.56% 3/10/98 $ 80,000,000
12/8/98
Peoples Security Life Insurance Co. 5.48% 7/31/98 18,000,000
INCOME TAX INFORMATION
At October 31, 1998, the fund had a capital loss carryforward of
approximately $737,000 of which $103,000, $584,000, $48,000, and
$2,000 will expire on October 31, 2001, 2002, 2003 and 2005,
respectively.
A total of 0.37% 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 (unaudited).
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
PRIME FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
ASSETS
Investment in securities, at value (including repurchase $ 5,722,899,145
agreements of $60,661,000) -
See accompanying schedule
Cash 229
Receivable for fund shares sold 88,081,931
Interest receivable 27,770,081
TOTAL ASSETS 5,838,751,386
LIABILITIES
Payable for investments purchased $ 53,985,755
Payable for fund shares redeemed 126,463,641
Distributions payable 1,240,003
Accrued management fee 712,576
Distribution fees payable 1,678,470
Other payables and accrued expenses 1,564,075
TOTAL LIABILITIES 185,644,520
NET ASSETS $ 5,653,106,866
Net Assets consist of:
Paid in capital $ 5,653,843,783
Accumulated net realized gain (loss) on investments (736,917)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSETS $ 5,653,106,866
DAILY MONEY CLASS: $1.00
NET ASSET VALUE, offering price and redemption price per
share ($3,396,651,670 (divided by) 3,397,087,118 shares)
CAPITAL RESERVES CLASS: $1.00
NET ASSET VALUE, offering price and redemption price per
share ($2,256,455,196 (divided by) 2,256,744,471 shares)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
INTEREST INCOME $ 285,003,107
EXPENSES
Management fee $ 12,530,658
Transfer agent fees 11,326,984
Distribution fees 17,571,089
Accounting fees and expenses 430,180
Non-interested trustees' compensation 23,399
Custodian fees and expenses 91,179
Registration fees 1,002,504
Audit 53,526
Legal 23,530
Miscellaneous 16,652
Total expenses before reductions 43,069,701
Expense reductions (5,449,252) 37,620,449
NET INTEREST INCOME 247,382,658
NET REALIZED GAIN (LOSS) ON INVESTMENTS 54,807
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 247,437,465
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 247,382,658 $ 125,407,369
Net interest income
Net realized gain (loss) 54,807 (1,985)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 247,437,465 125,405,384
FROM OPERATIONS
Distributions to shareholders from net interest income (247,382,658) (125,407,369)
Share transactions - net increase (decrease) 1,202,246,692 63,675,775
Net asset value of Capital Reserves Class shares issued in - 1,723,722,384
exchange for the net assets of Capital Reserves:
Money Market Portfolio
TOTAL SHARE TRANSACTIONS 1,202,246,692 1,787,398,159
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,202,301,499 1,787,396,174
NET ASSETS
Beginning of period 4,450,805,367 2,663,409,193
End of period $ 5,653,106,866 $ 4,450,805,367
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - DAILY MONEY CLASS
YEARS ENDED THREE MONTHS YEARS ENDED
OCTOBER 31, ENDED JULY 31,
OCTOBER 31,
1998 1997 1996 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
Income from
Investment
Operations
Net interest .050 .050 .012 .050 .050 .029
income
Less Distributions
From net (.050) (.050) (.012) (.050) (.050) (.029)
interest income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B, C 5.15% 5.06% 1.22% 5.13% 5.16% 2.98%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end $ 3,397 $ 2,687 $ 2,663 $ 2,581 $ 2,139 $ 1,525
of period
(in millions)
Ratio of expenses .65% D .65% D .65% A, D .65% D .65% D .65% D
to average net
assets
Ratio of net 5.03% 4.95% 4.85% A 5.00% 5.11% 2.96%
interest income
to average net
assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CAPITAL RESERVES CLASS
YEARS ENDED
OCTOBER 31,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 1.000 $ 1.000000
Income from Investment Operations
Net interest income .048 .000131
Less Distributions
From net interest income (.048) (.000131)
Net asset value, end of period $ 1.000 $ 1.000000
TOTAL RETURN B, C 4.89% .01%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 2,256 $ 1,764
Ratio of expenses to average net assets .90% D .90% A, D
Ratio of net interest income to average net assets 4.79% 4.78% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E FOR OCTOBER 31, 1997 (COMMENCEMENT OF SALE OF CAPITAL RESERVES CLASS
SHARES).
TAX-EXEMPT FUND
INVESTMENTS OCTOBER 31, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ALABAMA - 0.4%
Birmingham Pub. Park & Recreation Board Rev. (McWane Ctr. $ 2,800,000 $ 2,800,000
Proj.) Series 1997, 3.2%, LOC Amsouth Bank, Birmingham,
VRDN (a)
ALASKA - 0.3%
Valdez Marine Term. Rev. Rfdg. Bonds (Atlantic Richfield Co.) 1,800,000 1,800,000
Series 1994 A, 3.25% 3/12/99, CP mode
ARIZONA - 2.4%
Arizona Trans. Board Hwy. Rev. Bonds Series A, 5.9% 7/1/99 1,000,000 1,016,280
Maricopa County Poll. Cont. Rev. Bonds (Southern California 1,000,000 1,000,000
Edison Co.) Series 1985 E, 3.35% 2/2/99, CP mode
Pima County Ind. Dev. Auth. Multi-family Rev. (La Cholla Apt. 2,000,000 2,000,000
Proj.) Series 1996, 3.15%, LOC Chase Bank of Texas NA,
VRDN (a)
Pinal County Ind. Dev. Hosp. Rev. (Casa Grande Med. Ctr. 7,000,000 7,000,000
Proj.) Series 1995, 3.3%, LOC Chase Manhattan Bank,
VRDN (a)
Salt River Proj. Agric. Impt. & Pwr. Dist. Elec. Sys. Rev.:
Series 1997, 3.45% 2/10/99, CP 4,400,000 4,400,000
3.4% 12/7/98, CP 1,400,000 1,400,000
16,816,280
ARKANSAS - 0.6%
Arkansas Univ. Rev. (UAMS Campus) Series 1998, 3.2% 3,900,000 3,900,000
(MBIA Insured), (BPA CS First Boston, Inc.), VRDN (a)
CALIFORNIA - 1.6%
Long Beach Gen. Oblig. TRAN Series 89-99, 4% 10/5/99 2,000,000 2,015,080
Los Angeles Reg'l. Arpts. Impt. Corp. Lease Rev. (Los Angeles 3,100,000 3,100,000
Int'l. Air France) 3.3%, LOC Societe Generale, France,
VRDN (a)
Riverside County Gen. Oblig. TRAN 4.5% 9/30/99 6,000,000 6,083,569
11,198,649
COLORADO - 1.0%
Colorado Hsg. Fin. Auth. Multi-family Rev. (Saint Moritz Proj.) 5,000,000 5,000,000
3.15% (Fannie Mae Guaranteed), VRDN (a)
Colorado Springs Util. Sys. Rev. Participating VRDN Series 1,000,000 1,000,000
SGB 28, 3.31% (Liquidity Facility Societe Generale,
France) (a)(c)
Larimer County Poudre School Dist. # R 1 TAN 3.3% 6/30/99 1,200,000 1,200,076
7,200,076
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
DELAWARE - 0.5%
Delaware Econ. Dev. Auth. Multi-family Rev. (Schoolhouse Trust $ 850,000 $ 850,000
Prog.) 3.3%, LOC Marine Midland Bank NA, VRDN (a)
Delaware Econ. Dev. Auth. Rev.:
(Peninsula United Methodist Homes, Inc.) Series 1992 B, 1,450,000 1,450,000
3.15%, LOC PNC Bank NA, VRDN (a)
(Peninsula United Methodist Homes, Inc.) Series 1997 B, 860,000 860,000
3.15%, LOC PNC Bank NA, VRDN (a)
3,160,000
DISTRICT OF COLUMBIA - 1.7%
District of Columbia Rev. (American Assoc. Med. College) 3,575,000 3,575,000
3.2% (AMBAC Insured), VRDN (a)
District of Columbia Wtr. & Swr. Auth.:
Participating VRDN Series 985201, 3.26% (Liquidity Facility 6,600,000 6,600,000
Citibank, New York NA) (a)(c)
Participating VRDN Series 1998 29, 3.31% (Liquidity Facility 1,000,000 1,000,000
Morgan Stanley, Dean Witter & Co.) (a)(c)
11,175,000
FLORIDA - 12.5%
Dade County Spl. Rev. (Young Fair & Exposition Proj.) 3.15%, 2,570,000 2,570,000
LOC SunTrust Bank, Miami NA, VRDN (a)
Eustis Multi-Purp. Rev. Series 1997 A, 3.15%, LOC SunTrust 1,300,000 1,300,000
Bank, Central FL NA, VRDN (a)
Florida Board of Ed. Lottery Rev. Bonds Series B, 2,390,000 2,407,474
4.5% 7/1/99 (FGIC Insured)
Florida Cap. Projs. Fin. Auth. Rev.:
(Cap. Proj. Ln. Prog.) Series 1997 A, 3.1% (FSA Insured), 8,400,000 8,400,000
(BPA CS First Boston, Inc.), VRDN (a)
(Florida Hosp. Assoc. Cap. Proj.) Series 1998 A, 3.25% 5,100,000 5,100,000
(FSA Insured), VRDN (a)
Florida Division Board Fin. Dept. Gen. Svcs. Rev. Participating 2,000,000 2,000,000
VRDN Series RI A18, 3.4% (Liquidity Facility Nat'l.
Westminster Bank PLC) (a)(c)
Florida Local Govt. Fin. Commission Auth. Rev.:
Series A, 3.65% 11/5/98, LOC First Union Nat'l. Bank of 4,633,000 4,633,000
North Carolina, CP
3.4% 2/9/99, LOC First Union Nat'l. Bank of North 3,698,000 3,698,000
Carolina, CP
Gulf Breeze Rev. Series 1995 A, 3.2%, LOC Barnett Bank NA, 3,200,000 3,200,000
VRDN (a)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Highlands County Health Facilities Auth. Rev. (Adventist Health $ 4,000,000 $ 4,000,000
Sys. Sunbelt Proj.) 3.15% (MBIA Insured), (BPA First Nat'l.
Bank of Chicago), VRDN (a)
Indian River County Hosp. Dist. Hosp. Rev. Bonds Series 1988, 2,200,000 2,200,000
3.15% 3/11/99, LOC Kredietbank NV, CP mode
Jacksonville Health Facilities Auth. Hosp. Rev. Participating 2,875,000 2,875,000
VRDN Series 1996 M, 3.28% (Liquidity Facility Caisse des
Depots et Consignations) (a)(c)
Lee County Hosp. Board of Directors Hosp. Rev. Bonds (Lee 1,100,000 1,100,000
Memorial Hosp. Proj.) Series 1997 B, 3.25% 2/12/99
(Liquidity Facility SunTrust Bank, Central FL NA), CP mode
Mount Dora Health Facilities Auth. Health Facilities Rev. 4,000,000 4,000,000
(Waterman Village Proj.) Series 1996 A, 3.125%, LOC
Barnett Bank NA, VRDN (a)
Orange County School Dist. TAN 3.1% 9/15/99 4,200,000 4,206,740
Orlando Util. Commission Wtr. & Elec. Rev. Bonds Sub-Series C, 1,000,000 1,053,845
7% 10/1/23 (Pre-Refunded to 10/1/99 @102) (b)
Pasco County Hsg. Fin. Auth. Multi-family Hsg. Rev. (Carlton 2,000,000 2,000,000
Arms of Magnolia Valley) Series 1985, 3.225%, LOC First
Union Nat'l. Bank of North Carolina, VRDN (a)
Pensacola Rev. (Harborview Corp. Proj.) 3.2%, LOC Amsouth 2,805,000 2,805,000
Bank, Birmingham, VRDN (a)
Sarasota County Pub. Hosp. Dist. Hosp. Rev. Bonds (Sarasota
Memorial Hosp.):
Series 1993 A, 3.65% 12/10/98, CP mode 3,900,000 3,900,000
Series 1996 A:
3.3% 3/12/99, CP mode 1,000,000 1,000,000
3.35% 2/26/99, CP mode 1,300,000 1,300,000
Sunrise Util. Sys. Rev. Participating VRDN Series SGB 16, 1,800,000 1,800,000
3.31% (Liquidity Facility Societe Generale, France) (a)(c)
Sunshine Govt. Fing. Commission Rev.:
Bonds Series 1986, 3.35% 2/24/99 (AMBAC Insured), 3,000,000 3,000,000
CP mode
Series 1994 A:
3.25% 3/12/99 (Liquidity Facility Bank of Nova Scotia), CP 13,978,000 13,978,000
3.35% 2/19/99 (Liquidity Facility Bank of Nova Scotia), CP 1,000,000 1,000,000
3.4% 12/7/98 (Liquidity Facility Bank of Nova Scotia), CP 3,295,000 3,295,000
86,822,059
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
GEORGIA - 5.2%
Bartow County Dev. Auth. Poll. Cont. Rev. (Georgia Pwr. Co.) $ 5,700,000 $ 5,700,000
Series 1998, 3.7%, VRDN (a)
Brooks County Dev. Auth. Rev. (Presbyterian Home, Inc. Proj.) 2,400,000 2,400,000
3.15%, LOC SunTrust Bank of Atlanta, VRDN (a)
Fulton County Hsg. Auth. Multi-family Hsg. Rev. (Champions 5,670,000 5,670,000
Green Apts. Proj.) Series 1994 B, 3.3%, LOC South Trust
Bank, Alabama NA, VRDN (a)
Georgia Muni. Elec. Auth.:
Bonds (Gen. Resolution Proj.):
Series 1985 A:
3.1% 3/11/99, LOC Morgan Guaranty Trust Co., NY, 1,000,000 1,000,000
CP mode
3.35% 2/23/99, LOC Morgan Guaranty Trust Co., NY, 1,000,000 1,000,000
CP mode
Series 1985 B:
3.35% 2/23/99, LOC Morgan Guaranty Trust Co., NY, 3,100,000 3,100,000
CP mode
3.45% 2/17/99, LOC Morgan Guaranty Trust Co., NY, 1,865,000 1,865,000
CP mode
Series B, 3.2% 12/9/98, LOC Morgan Guaranty Trust Co., 2,655,000 2,655,000
NY, LOC Bayerische Landesbank Girozentrale, CP
Marietta Hsg. Auth. Multi-family Hsg. Rev. Rfdg. (Wood Pointe 2,900,000 2,900,000
Apts.) Series 1993, 3.2%, LOC First Union Nat'l. Bank of
North Carolina, VRDN (a)
Metropolitan Atlanta Rapid Transit Sales Tax Rev. Participating 5,125,000 5,125,000
VRDN 3.35% (Liquidity Facility Merrill Lynch & Co.) (a)(c)
Richmond County Board of Ed. Participating VRDN Series 3,600,000 3,600,000
1997 C, Class A, 3.28% (Liquidity Facility Caisse des Depots
et Consignations) (a)(c)
Savannah Econ. Dev. Auth. Rev. Rfdg. (La Quinta Motor Inns, 1,400,000 1,400,000
Inc. Proj.) Series 1991, 3.2%, LOC NationsBank NA,
VRDN (a)
36,415,000
IDAHO - 0.2%
Caribou County Poll. Cont. Rev. Rfdg. (Monsanto Co. Proj.) 1,500,000 1,500,000
Series 1990, 3.2%, VRDN (a)
ILLINOIS - 9.5%
Chicago Board of Ed. Participating VRDN:
Series 1996 BB, 3.26% (Liquidity Facility Bank of America 3,400,000 3,400,000
Nat'l. Trust & Savings Assoc.) (a)(c)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ILLINOIS - CONTINUED
Chicago Board of Ed. Participating VRDN: - continued
Series FR/RI 98 39, 3.4% (Liquidity Facility Commerzbank $ 1,900,000 $ 1,900,000
AG) (a)(c)
Chicago Gen. Oblig. Participating VRDN Series PT 1031, 7,920,000 7,920,000
3.35% (Liquidity Facility Merrill Lynch & Co.) (a)(c)
Chicago Sales Tax Rev. Participating VRDN Series RI 24, 3.4% 4,900,000 4,900,000
(Liquidity Facility Bank of New York NA) (a)(c)
Chicago Tax Increment Allocation Rev. (Stockyards Southeast 2,800,000 2,800,000
Quad) Series 1996 B, 3.25%, LOC Northern Trust Co.,
Chicago, VRDN (a)
Chicago Wtr. Rev. Participating VRDN:
Series 1997 V, 3.25% (Liquidity Facility First Union Nat'l. 1,800,000 1,800,000
Bank of North Carolina) (a)(c)
Series PT 129, 3.28% (Liquidity Facility Merrill Lynch & 1,905,000 1,905,000
Co.) (a)(c)
Illinois Edl. Facilities Auth. Rev. (Art Institute of Chicago) Series 1,400,000 1,400,000
1996, 3.15% (Liquidity Facility Bank of America Nat'l. Trust
& Savings Assoc.), VRDN (a)
Illinois Health Facilities Auth. Rev.:
(Little Co. of Mary Hosp.) Series 1997 B, 3.15% (MBIA 20,600,000 20,599,999
Insured), VRDN (a)
Participating VRDN Series PT 113, 3.28% (Liquidity Facility 3,350,000 3,350,000
RaboBank Nederland Coop. Central) (a)(c)
Rfdg. (Franciscan Eldercare Cmnty. Svc.) Series 1996 C, 1,200,000 1,200,000
3.2%, LOC LaSalle Nat'l. Bank, Chicago, VRDN (a)
Series 1998, 3.7% (MBIA Insured), VRDN (a) 1,000,000 1,000,000
Illinois Hsg. Dev. Auth. Homeowner Mtg. Rev. Bonds Series 1,475,000 1,475,000
1998 F1, 3.4%, tender 10/7/99
Illinois Reg'l. Trans. Auth. Participating VRDN:
Series SGB 10, 3.31% (Liquidity Facility Societe Generale, 1,645,000 1,645,000
France) (a)(c)
Series SGB 19, 3.31% (Liquidity Facility Societe Generale, 1,000,000 1,000,000
France) (a)(c)
Lisle Village Multi-family Hsg. Rev. (Four Lakes Phase V-Lisle) 3,500,000 3,500,000
Series 1996, 3.2% (Fannie Mae Guaranteed), VRDN (a)
Lombard Ind. Proj. Rev. Rfdg. (B&H Partnership Proj.) Series 3,375,000 3,375,000
1995, 3.45%, LOC Comerica Bank, Detroit, VRDN (a)
Schaumberg Ind. Dev. Rev. Rfdg. (La Quinta Motor Inns, Inc. 1,520,000 1,520,000
Proj.) Series 1991, 3.2%, LOC NationsBank NA, VRDN (a)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ILLINOIS - CONTINUED
Springfield Cmnty. Impt. Rev. (Kent Family, Inc. Proj.) 3.15%, $ 550,000 $ 550,000
LOC PNC Bank NA, VRDN (a)
Winnebago County Rev. (Mill Proj.) Series 1996, 3.15%, LOC 810,000 810,000
Bank One, Illinois NA, VRDN (a)
66,049,999
INDIANA - 2.4%
Fort Wayne Poll. Cont. Rev. (Gen. Motors Corp. Proj.) 3.35%, 6,700,000 6,700,000
VRDN (a)
Richmond Econ. Dev. Rev. (Friends Fellowship Cmnty. Proj.) 6,150,000 6,150,000
Series 1997, 3.15%, LOC Bank One, Indiana NA, VRDN (a)
Sullivan Poll. Cont. Rev. Bonds:
Series 85 L3, 3.25% 3/12/99 (Nat'l. Rural Util. Coop. Fin. 1,000,000 1,000,000
Corp. Guaranteed), CP mode
Series 85 L4, 3.65% 11/13/98 (Nat'l. Rural Util. Coop. Fin. 1,790,000 1,790,000
Corp. Guaranteed), CP mode
Series 85 L5, 3.25% 3/12/99 (Nat'l. Rural Util. Coop. Fin. 1,000,000 1,000,000
Corp. Guaranteed), CP mode
16,640,000
IOWA - 0.3%
Iowa Fin. Auth. Rev. (Wheaton Franciscan Svcs.) Series 1998 2,000,000 2,000,000
B, 3.2% (MBIA Insured), VRDN (a)
KANSAS - 0.4%
La Cygne Envir. Impt. Rev. Rfdg. (Kansas City Pwr. & Lt.) 2,500,000 2,500,000
Series 1994, 3.3%, VRDN (a)
KENTUCKY - 3.4%
Georgetown Edl. Institution Impt. Rev. (Georgetown College 1,315,000 1,315,000
Proj.) Series 1992, 3.15%, LOC PNC Bank NA, VRDN (a)
Jefferson County Poll. Cont. Rev. Bonds (Louisville Gas & Elec. 3,000,000 3,000,000
Co. Proj.) Series 1996 A, 3.35% 3/1/99, CP mode
Kentucky Asset/Liability Commission Gen. Fund TRAN 2,700,000 2,711,429
Series B, 4% 6/25/99
Kentucky Econ. Dev. Auth. Hosp. Facilities Rev. (Health 1,000,000 1,000,000
Alliance of Cincinnati) Series 1997 C, 3.2% (MBIA Insured),
VRDN (a)
Kentucky Econ. Dev. Fin. Auth. Rev. Participating VRDN Series 1,800,000 1,800,000
PT 1103, 3.35% (Liquidity Facility Merrill Lynch & Co.) (a)(c)
Louisville & Jefferson County Visitors & Convention 2,840,000 2,840,000
Commission Dedicated Tax Rev. Participating VRDN Series
PT 69, 3.28% (Liquidity Facility Merrill Lynch & Co.) (a)(c)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
KENTUCKY - CONTINUED
Middletown Rev. (Christian Academy Proj.) Series 1997, $ 5,500,000 $ 5,500,000
3.15%, LOC Bank One, Kentucky NA, VRDN (a)
Trimble County Poll. Cont. Rev. Bonds (Louisville Gas & Elec.
Co. Proj.) Series 1992 A:
3.15% 3/9/99, CP mode 1,565,000 1,565,000
3.35% 3/1/99, CP mode 4,000,000 4,000,000
23,731,429
LOUISIANA - 2.1%
Calcasieu Ind. Dev. Board Poll. Cont. Rev. Rfdg. (PPG 4,450,000 4,450,000
Industries) Series 1992, 3.2%, VRDN (a)
Louisiana Pub. Facilities Auth. Rev. Bonds (Sisters Charity 1,000,000 1,000,000
Incarnate Word) Series 1997 D, 3.15% (BPA Toronto
Dominion Bank), CP mode
Saint James Parish Poll. Cont. Rev. Rfdg. Bonds (Texaco Proj.) 5,500,000 5,500,000
Series 1988 B, 3.2% 11/24/98, CP mode
West Baton Rouge Parish Ind. Dist. #3 Rev.:
(Dow Chemical Co. Proj.) Series 1994 B, 3.75%, VRDN (a) 2,600,000 2,600,000
Rfdg. Bonds (Dow Chemical Co. Proj.) Series 1991, 3.6% 1,000,000 1,000,000
11/2/98, CP mode
14,550,000
MARYLAND - 0.8%
Baltimore County Econ. Dev. Rev. Rfdg. (Blue Circle, Inc. Proj.) 400,000 400,000
Series 1992, 3.15%, LOC Den Danske Bank Group AS,
VRDN (a)
Maryland Cmnty. Dev. Administration Hsg. Dept. & Cmnty. 1,800,000 1,800,000
Dev. Participating VRDN Series 1997 P, 3.28% (Liquidity
Facility Caisse des Depots et Consignations) (a)(c)
Montgomery County Hsg. Opportunity Commission Single 3,315,000 3,315,000
Family Mtg. Rev. Participating VRDN 3.3% (Liquidity Facility
Merrill Lynch & Co.) (a)(c)
5,515,000
MASSACHUSETTS - 2.8%
Hingham Gen. Oblig. BAN 3.75% 9/30/99 2,000,000 2,007,591
Massachusetts Bay Trans. Auth. RAN Series 1998 B, 4.25% 15,000,000 15,111,921
9/3/99
Massachusetts Tpk. Auth. Western Tpk. Rev. Participating 2,100,000 2,100,000
VRDN Series 1997 N, 3.29% (Liquidity Facility Bank of
America Nat'l. Trust & Savings Assoc.) (a)(c)
19,219,512
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - 0.1%
Michigan Strategic Fund Ind. Dev. Rev. (Michigan Sugar $ 1,000,000 $ 1,000,000
Co.-Croswell Proj.) Series 1985, 3.15%, LOC SunTrust Bank
of Atlanta, VRDN (a)
MINNESOTA - 0.9%
Bloomington Port Auth. Spl. Tax Rev. Rfdg. (Mall of America 1,200,000 1,200,000
Proj.) Series 1996 B, 3.2% (FSA Insured), VRDN (a)
Minnesota Hsg. Fin. Agcy. Participating VRDN Series PT 114, 1,900,000 1,900,000
3.28% (Liquidity Facility RaboBank Nederland Coop.
Central) (a)(c)
Minnetonka Multi-family Hsg. Rev. Rfdg. (Cliffs at Ridgedale 1,300,000 1,300,000
Proj.) Series 1995, 3.2% (Fannie Mae Guaranteed),
VRDN (a)
Red Wing Poll. Cont. Rev. (Northern States Pwr. Co.) 3.3%, 2,000,000 2,000,000
VRDN (a)
6,400,000
MISSISSIPPI - 0.4%
Jackson County Port Facilities Rev. Rfdg. (Chevron U.S.A., Inc.) 2,500,000 2,500,000
Series 1993, 3.7%, VRDN (a)
MISSOURI - 1.0%
Kansas City Ind. Dev. Auth. Multi-family Hsg. Rev. Rfdg. 1,100,000 1,100,000
(Sleepy Hollow Apts.) Series 1996, 3.2% (Fannie Mae
Guaranteed), VRDN (a)
Missouri Health & Edl. Facilities Auth. Rev. (Lutheran Senior 5,800,000 5,800,000
Svcs.) Series 1996 B, 3.2%, LOC LaSalle Nat'l. Bank,
Chicago, VRDN (a)
6,900,000
NEBRASKA - 1.1%
Nebraska Pub. Pwr. Dist. Rev. Series A:
3.4% 2/5/99, CP 1,575,000 1,575,000
3.45% 12/8/98, CP 6,200,000 6,200,000
7,775,000
NEVADA - 1.8%
Clark County Rev. Participating VRDN Series SG 18, 3.31% 10,000,000 10,000,000
(Liquidity Facility Societe Generale, France) (a)(c)
Las Vegas Valley Wtr. Dist. Series 1998 A, 3.4% 3/10/99, 2,400,000 2,400,000
LOC Union Bank of Switzerland, LOC Westdeutsche
Landesbank Girozentrale, CP
12,400,000
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 0.9%
New Jersey Gen. Oblig.:
3.3% 11/9/98 (Liquidity Facility Bank of Nova Scotia), $ 3,500,000 $ 3,500,000
(Liquidity Facility Commerzbank AG), CP
3.3% 11/16/98 (Liquidity Facility Bank of Nova Scotia), 2,700,000 2,700,000
(Liquidity Facility Commerzbank AG), CP
6,200,000
NEW MEXICO - 1.4%
Bernalillo County Gross Receipt Tax Rev. Participating VRDN 1,600,000 1,600,000
Series SGB 22, 3.31% (Liquidity Facility Societe Generale,
France) (a)(c)
Farmington Poll. Cont. Rev. Participating VRDN Series PT 133, 8,295,000 8,295,000
3.35% (Liquidity Facility CS First Boston, Inc.) (a)(c)
9,895,000
NEW YORK - 5.1%
Long Island Pwr. Auth. Elec. Sys. Gen. Rev. Participating
VRDN:
Series PA 420, 3.35%, (Liquidity Facility Merrill 1,200,000 1,200,000
Lynch & Co.) (a)(c)
Series PA 421, 3.35% (Liquidity Facility Merrill Lynch & 1,200,000 1,200,000
Co.) (a)(c)
New York City Gen. Oblig. Series 1994 E4, 3.7%, LOC State 1,500,000 1,500,000
St Bank & Trust Co., VRDN (a)
New York City Muni. Wtr. Fin. Auth. Wtr. & Swr. Sys. Rev.
Participating VRDN:
Series PT 1032, 3.35% (Liquidity Facility Merrill Lynch & 7,180,000 7,180,000
Co.) (a)(c)
Series SGB 25, 3.31% (Liquidity Facility Societe Generale, 9,400,000 9,400,000
France) (a)(c)
New York State Energy Research & Dev. Auth. Participating 10,300,000 10,300,000
VRDN Series 943202, 3.26% (Liquidity Facility Citibank,
New York NA) (a)(c)
New York State Hsg. Fin. Agcy. Hsg. Proj. Mtg. Rev. 2,745,000 2,745,000
Participating VRDN Series PT 107, 3.6% (Liquidity Facility
Banco Santander SA) (a)(c)
New York State Local Gov't. Assistance Corp. Participating 1,000,000 1,000,000
VRDN Series SG 99, 3.28% (Liquidity Facility Societe
Generale, France) (a)(c)
New York State Pwr. Auth. Rev. Series 1, 3% 3/10/99, CP 1,200,000 1,200,000
35,725,000
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - 2.4%
Clinton County Hosp. Rev. (Cap., Inc. Pooled Fing. Prog.) $ 2,000,000 $ 2,000,000
Series 1998, 3.25%, LOC Fifth Third Bank, Cincinnati,
VRDN (a)
Columbus Gen. Oblig. Bonds 6.3% 9/15/99 2,125,000 2,177,303
Harrison County Econ. Dev. Rev. Rfdg. (Carriage of 1,665,000 1,665,000
Cadiz Proj.) 3.18%, LOC Key Bank, NA, VRDN (a)
Ohio Higher Edl. Facilities Commission Rev. (Pooled Fing. 1,225,000 1,225,000
Prog.) Series 1998, 3.15%, LOC Fifth Third Bank, Cincinnati,
VRDN (a)
Ohio Univ. Gen. Receipts 3%, VRDN (a) 6,050,000 6,050,000
Ohio Wtr. Dev. Auth. Poll. Cont. Facilities Rev. Rfdg. Bonds 1,000,000 1,000,000
(Cleveland Elec. Proj.) Series 1988 A, 3.55% (FGIC Insured),
CP Mode
Wyoming Gen. Oblig. BAN 3.6% 3/25/99 2,603,000 2,605,237
16,722,540
PENNSYLVANIA - 4.2%
Berks County Ind. Dev. Auth. Rev. (Construction Fasteners Proj.) 530,000 530,000
Series 1996 A, 3.25%, LOC First Union Nat'l. Bank of
North Carolina, VRDN (a)
Dauphin County Gen. Auth. Rev.:
(All-Health Pooled Fing. Prog.):
Series 1997 A, 3.25% (FSA Insured), VRDN (a) 5,000,000 5,000,000
Series 1997 B, 3.25% (FSA Insured), (BPA CS First 5,000,000 5,000,000
Boston, Inc.), VRDN (a)
(School Dist. Pooled Fing. Prog.) 3.2% (AMBAC Insured), 7,600,000 7,600,000
(BPA Commerzbank AG), VRDN (a)
North Lebanon Township Muni. Auth. (Grace Cmnty., Inc. 1,945,000 1,945,000
Proj.) Series 1992 B, 3.15%, LOC First Union Nat'l. Bank of
North Carolina, VRDN (a)
North Pennsylvania Wtr. Auth. Wtr. Rev. Participating VRDN 1,030,000 1,030,000
Series SGA 30, 3.27% (Liquidity Facility Societe Generale,
France) (a)(c)
Pennsylvania Econ. Dev. Fing. Auth. Econ. Dev. Rev. (Lutheran 500,000 500,000
Youth & Family Svcs.) Series 1993 A, 3.15%, LOC PNC
Bank NA, VRDN (a)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Hsg. Fin. Agcy. Single Family Mtg. Rev. $ 4,010,000 $ 4,010,000
Participating VRDN Series PT 119A, 3.25% (Liquidity Facility
CS First Boston, Inc.) (a)(c)
Philadelphia Auth. Ind. Dev. Rev. Rfdg. (Paper Corp. of 3,565,000 3,565,000
America Proj.) 3.15%, LOC SunTrust Bank of Atlanta,
VRDN (a)
29,180,000
SOUTH CAROLINA - 2.3%
South Carolina Edl. Facilities Auth. for Private Nonprofit 5,780,000 5,780,000
Institutions Higher Learning Edl. Facilities Rev. (Claflin
College) Series 1997, 3.2%, LOC NationsBank NA,
VRDN (a)
South Carolina Hsg. Fin. & Hsg. Dev. Auth. Multi-family Rev. 9,415,000 9,415,000
Rfdg. (Spartanburg-Oxford Proj.) Series 1990 D, 3.25%
(Continental Casualty Co. Guaranteed), VRDN (a)
South Carolina Pub. Svcs. Auth. Rev. (Santee Coop. Proj.) 1,000,000 1,000,000
3.15% 3/8/99, CP
16,195,000
TENNESSEE - 2.1%
Memphis Ctr. City Rev. Fin. Multi-family Hsg. Rev. (Arbors of 1,000,000 1,000,000
Hbr. Town Proj.) Series 1990, 3.15% (Northwestern Mutual
Life Ins. Guaranteed), VRDN (a)
Memphis Gen. Impt. Participating VRDN Series SGB 23, 1,200,000 1,200,000
3.31% (Liquidity Facility Societe Generale, France) (a)(c)
Metropolitan Govt. Nashville & Davidson County Health & Edl. 7,330,000 7,330,000
Facilities Board Rev. Rfdg. (McKendree Village, Inc. Proj.)
3.15%, LOC SunTrust Bank, Nashville NA, VRDN (a)
Sevier County Pub. Bldg. Auth. Rev. Series 2D3, 3.1% 1,250,000 1,250,000
(AMBAC Insured), VRDN (a)
Shelby County Pub. Impt. Rev.:
Participating VRDN Series SGB 21, 3.31% (Liquidity Facility 2,600,000 2,600,000
Societe Generale, France) (a)(c)
3.6% 12/11/98, CP 1,500,000 1,499,955
14,879,955
TEXAS - 14.9%
Austin Higher Ed. Auth., Inc. Univ. Rev. (Saint Edward's Univ.) 800,000 800,000
Series 1995, 3.2%, LOC NationsBank NA, VRDN (a)
Austin Hsg. Fin. Corp. Multi-family Hsg. Rev. (Riverchase Proj.) 1,000,000 1,000,000
Series 1985 A, 3.3%, LOC Household Fin. Corp., VRDN (a)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
TEXAS - CONTINUED
Austin Independent School Dist. School Bldg. Variable Rate $ 1,050,000 $ 1,050,000
TRAN Series 1998, 3.088% 8/31/99 (a)(d)
Brazos Hbr. Ind. Dev. Dev. Corp. Poll. Cont. Rev. Bonds (Dow 1,300,000 1,300,000
Chemical Co. Proj.) Series 1986, 3.4% 3/1/99, CP mode
Brazos River Hbr. Navigation Dist. Hbr. Rev. Bonds (Dow
Chemical Co. Proj.) Series 1991:
3.4% 12/1/98, CP mode 4,000,000 4,000,000
3.65% 11/10/98, CP mode 2,000,000 2,000,000
Brownsville Util. Sys. Rev. Series A, 3.6% 11/2/98, LOC 1,500,000 1,500,000
Toronto Dominion Bank, CP
Coastal Wtr. Auth. Wtr. Conveyance Sys. Rev. Participating 1,060,000 1,060,000
VRDN Series 1997 J, Class A, 3.28% (Liquidity Facility
Caisse des Depots et Consignations) (a)(c)
Colorado River Muni. Wtr. Dist. Wtr. Rev. Participating VRDN 2,030,000 2,030,000
Series PA 187, 3.35% (Liquidity Facility Merrill
Lynch & Co.) (a)(c)
Comal County Health Facilities Dev. Rev. (McKenna Memorial 2,200,000 2,200,000
Health Sys.) 3.15%, LOC Chase Bank of Texas NA,
VRDN (a)
Dallas Area Rapid Transit Sales Tax Rev.:
Series A, 3.45% 3/25/99, LOC Westdeutsche Landesbank 1,000,000 1,000,000
Girozentrale, LOC Bayerische Landesbank
Girozentrale, CP
3.35% 2/2/99, LOC Westdeutsche Landesbank 2,835,000 2,835,000
Girozentrale, LOC Bayerische Landesbank
Girozentrale, CP
Dallas Civic Ctr. Convention Complex Rev. Participating VRDN 8,000,000 8,000,000
Series PT 1059, 3.35% (Liquidity Facility Merrill
Lynch & Co.) (a)(c)
Denton Util. Sys. Rev. Rfdg. Participating VRDN Series SGA 32, 1,000,000 1,000,000
3.27% (Liquidity Facility Societe Generale, France) (a)(c)
El Paso Ind. Dev. Auth. Rev. Rfdg. (La Quinta Motor Inns, Inc. 1,050,000 1,050,000
Proj.) Series 1991, 3.2%, LOC NationsBank NA, VRDN (a)
Farmers Branch Ind. Dev. Corp. Rev. Rfdg. (PPG Ind., Inc. 1,300,000 1,300,000
Proj.) Series 1992, 3.2%, VRDN (a)
Georgetown Health Facilities Dev. Corp. Rev. (Georgetown 1,900,000 1,900,000
Healthcare Sys. Proj.) Series 1997 B, 3.15%, LOC Chase
Bank of Texas NA, VRDN (a)
Greater East Texas Higher Ed. Auth. Student Ln. Rev. Rfdg. 1,000,000 1,000,000
Bonds Series 1992 A, 3.55%, tender 9/1/99,
LOC Student Ln. Marketing Assoc.
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
TEXAS - CONTINUED
Harris County Gen. Oblig. Series A:
3.35% 12/8/98, CP $ 1,339,000 $ 1,339,000
3.6% 11/2/98, CP 1,904,000 1,904,000
Harris County Ind. Dev. Corp. Ind. Dev. Rev. (Johann 1,500,000 1,500,000
Haltermann) Series 1996 A, 3.15%, LOC Chase Bank of
Texas NA, VRDN (a)
Houston Gen. Oblig. Series A, 3.2% 12/1/98, CP 4,000,000 4,000,000
Houston Higher Ed. Fin. Corp. Higher Ed. Rev. (The Graduate 9,500,000 9,500,000
Apts., Inc. Proj.) 3.15%, LOC Chase Bank of Texas NA,
VRDN (a)
Houston Wtr. & Swr. Sys. Rev. Participating VRDN Series RI 32, 1,720,000 1,720,000
3.4% (Liquidity Facility Bank of New York NA) (a)(c)
Hunt Memorial Hosp. Dist. Rev. Series 1998, 3.2% 6,000,000 6,000,000
(FSA Insured), VRDN (a)
North Central Health Facilities Dev. Corp. Hosp. Rev. Bonds 9,000,000 9,000,000
(Dallas Methodist Hosp. Proj.) Series 1998, 3.4% (AMBAC
Insured), CP Mode
San Antonio Arpt. Sys. Rev. Bonds Participating VRDN Series 6,800,000 6,800,000
96C4305, 3.26% (Liquidity Facility Citibank, New York
NA) (a)(c)
San Antonio Elec. & Gas Rev.:
Participating VRDN Series SG 105, 3.28% (Liquidity Facility 1,000,000 1,000,000
Societe Generale, France) (a)(c)
Series A:
3.25% 12/17/98, CP 5,000,000 5,000,000
3.4% 1/12/99, CP 1,100,000 1,100,000
San Antonio Wtr. Rev. Bonds Participating VRDN Series 1,000,000 1,000,000
964306, Class A, 3.26% (Liquidity Facility Citibank, New
York NA) (a)(c)
San Antonio Wtr. Rev. Series 1995:
3% 3/8/99, CP 1,000,000 1,000,000
3.25% 3/12/99, CP 2,500,000 2,500,000
Spring Branch Independent School Dist. Rev. Participating 1,000,000 1,000,000
VRDN Series PA 285, 3.35% (Liquidity Facility Merrill Lynch
& Co.) (a)(c)
Texarkana Ind. Dev. Corp. Ind. Dev. Rev. (La Quinta Motor 1,840,000 1,840,000
Inns, Inc. Proj.) Series 1991, 3.2%, LOC NationsBank NA,
VRDN (a)
Texas Assoc. School Board Ctfs. of Prtn. TAN Series 1998 A, 1,900,000 1,900,000
4% 8/31/99
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
TEXAS - CONTINUED
Texas Muni. Pwr. Agcy. Rev.:
3.15% 12/9/98, CP $ 4,000,000 $ 4,000,000
3.35% 2/11/99, CP 2,600,000 2,600,000
Texas Small Bus. Ind. Dev. Corp. Ind. Dev. Rev. (Texas Pub. 2,345,000 2,345,000
Facilities Cap. Access Prog.) 3.2%, LOC KBC Bank, NV, LOC
Nat'l. Westminster Bank PLC, VRDN (a)
Univ. of Texas Rev. Series A, 3.35% 3/1/99, CP 1,627,000 1,627,000
103,700,000
UTAH - 4.6%
Intermountain Pwr. Agcy. Pwr. Supply Rev.:
Bonds:
Series 1998 F, 3.35% 2/5/99, LOC Bank of America 3,200,000 3,200,000
Nat'l. Trust & Savings Assoc., CP mode
Series F, 3.35% 2/5/99 (AMBAC Insured), CP mode 1,000,000 1,000,000
Rfdg. Bonds Series E, 3.35% 2/11/99, LOC Bank of 3,700,000 3,700,000
America Nat'l. Trust & Savings Assoc., CP mode
Series 1997 B1:
3.35% 2/5/99, CP 2,300,000 2,300,000
3.35% 3/5/99, CP 1,000,000 1,000,000
Series 1997 B2:
3.15% 12/8/98, CP 8,500,000 8,500,000
3.15% 12/9/98, CP 2,700,000 2,700,000
3.6% 11/12/98, CP 1,000,000 1,000,000
Timpanogos Spl. Svcs. Dist. Swr. Rev. Participating VRDN 6,150,000 6,150,000
Series SG 83, 3.28% (Liquidity Facility Societe Generale,
France) (a)(c)
Utah Gen. Oblig. Hwy. Series 1998 B, 3.4% 12/9/98, CP 2,400,000 2,400,000
31,950,000
VERMONT - 0.2%
Vermont Edl. & Health Bldg. Fin. Bonds (Middlebury College 1,500,000 1,500,000
Proj.) Series 1988 A, 3.1%, tender 11/1/99
VIRGINIA - 3.3%
Alexandria Redev. & Hsg. Auth. Residential Care Facilities 1st 2,750,000 2,750,000
Mtg. Rev. (Goodwyn House) Series 1996 B, 3.7%, LOC First
Union Nat'l. Bank of North Carolina, VRDN (a)
Chesapeake Ind. Dev. Auth. Poll. Cont. Rev. Bonds (Virginia 1,000,000 1,000,000
Elec. Pwr. Co. Proj.) 3.65% 1/15/99, CP mode
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
VIRGINIA - CONTINUED
Chesterfield County Ind. Dev. Auth. Poll. Cont. Rev. Bonds
(Virginia Elec. Pwr. Co. Proj.):
Series 1987 A:
3.4% 2/18/99, CP mode $ 3,600,000 $ 3,600,000
3.65% 11/12/98, CP mode 1,000,000 1,000,000
Series 1987 B:
3.1% 2/19/99, CP mode 1,000,000 1,000,000
3.4% 12/16/98, CP mode 1,000,000 1,000,000
Series B, 3.15% 3/8/99, CP mode 2,335,000 2,335,000
Fairfax County Pub. Impt. Participating VRDN Series PA 149, 1,000,000 1,000,000
3.3% (Liquidity Facility Merrill Lynch & Co.) (a)(c)
Louisa Ind. Dev. Auth. Poll. Cont. Rev. Bonds (Virginia Elec.
Pwr. Co. Proj.):
Series 1985, 3.15% 3/8/99, CP mode 2,000,000 2,000,000
Series 1987, 3.15% 3/11/99, CP mode 1,000,000 1,000,000
Peninsula Ports Auth. Port Facilities Rev. Rfdg. Bonds (CSX 1,000,000 1,000,000
Trans. Proj.) Series 1992, 3.15%, LOC Bank of Nova Scotia,
CP mode
Roanoke Ind. Dev. Auth. Hosp. Rev. (Carilion Health Sys.) 3,500,000 3,500,000
Series 1997 A, 3.7%, VRDN (a)
Virginia Beach Dev. Auth. Rev. Rfdg. (La Quinta Inns, Inc. Proj.) 1,825,000 1,825,000
Series 1993, 3.2%, LOC NationsBank NA, VRDN (a)
23,010,000
WASHINGTON - 3.4%
Port Seattle Rev. Series A:
3.2% 3/12/99, LOC Bank of America Nat'l. Trust & Savings 2,065,000 2,065,000
Assoc., CP
3.4% 2/17/99, LOC Bank of America Nat'l. Trust & Savings 1,040,000 1,040,000
Assoc., CP
3.6% 12/18/98, LOC Bank of America Nat'l. Trust & 2,300,000 2,300,000
Savings Assoc., CP
Seattle Ltd. Tax Gen. Oblig. Participating VRDN Series SGB 12, 5,000,000 5,000,000
3.31% (Liquidity Facility Societe Generale, France) (a)(c)
Washington Gen. Oblig. Participating VRDN:
Series 1993 C, Class A, 3.26% (Liquidity Facility Citibank, 4,000,000 4,000,000
New York NA) (a)(c)
Series SGA 35, 3.27% (Liquidity Facility Societe Generale, 1,000,000 1,000,000
France) (a)(c)
Series SGA 36, 3.27% (Liquidity Facility Societe Generale, 2,260,000 2,260,000
France) (a)(c)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
WASHINGTON - CONTINUED
Washington Gen. Oblig. Participating VRDN: - continued
Series SGB 9, 3.31% (Liquidity Facility Societe Generale, $ 900,000 $ 900,000
France) (a)(c)
Series SGB 11, 3.31% (Liquidity Facility Societe Generale, 1,000,000 1,000,000
France) (a)(c)
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #1 Rev. 4,100,000 4,100,000
Participating VRDN Series PT 180, 3.35% (a)(c)
23,665,000
WISCONSIN - 0.3%
Milwaukee Gen. Oblig. RAN Series 1998 A, 5% 2/25/99 1,300,000 1,306,347
Wisconsin Gen. Oblig. Series 1997 B, 3.2% 12/9/98, CP 1,037,000 1,037,000
2,343,347
WYOMING - 1.1%
Converse County Poll. Cont. Rev. Bonds 3.3% 11/25/98, LOC 5,485,000 5,485,000
Union Bank of Switzerland, CP mode
Lincoln County Poll. Cont. Rev. Rfdg. Bonds (Pacificorp Proj.)
Series 1991:
2.95% 4/8/99, LOC Union Bank of Switzerland, CP mode 1,000,000 1,000,000
3.2% 4/8/99, LOC Union Bank of Switzerland, CP mode 1,100,000 1,100,000
Wyoming Cmnty. Dev. Auth. Hsg. Rev. Participating VRDN 400,000 400,000
Series PT 112, 3.28% (Liquidity Facility Merrill Lynch &
Co.) (a)(c)
7,985,000
MULTIPLE STATES - 0.4%
Stephens Equity Trust I Participating VRDN Series 1996, 2,782,035 2,782,035
3.26%, LOC Bayerische Hypotheken-und Wechselbank AG,
LOC Bayerische Hypo-und Vereinsbank AG (a)(c)
TOTAL INVESTMENTS - 100% $ 695,700,881
</TABLE>
Total Cost for Income Tax Purposes $ 695,700,923
SECURITY TYPE ABBREVIATION
BAN - Bond Anticipation Note
CP - Commercial Paper
RAN - Revenue Anticipation Note
TAN - Tax Anticipation Note
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Note
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Security collateralized by an amount sufficient to pay interest
and principal.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
SECURITY ACQUISITION DATE COST
Austin Independent School Dist. School 10/20/98 $ 1,050,000
Bldg. Variable Rate TRAN Series 1998,
3.088% 8/31/99
INCOME TAX INFORMATION
At October 31, 1998, the fund had a capital loss carryforward of
approximately $68,000 of which $65,000 and $3,000 will expire on
October 31, 2004 and 2005, respectively.
During the fiscal year ending October 31, 1998, 100% of the fund's
income dividends were free from federal income tax and none of the
fund's income dividends were subject to the federal alternative
minimum tax (unaudited).
TAX-EXEMPT FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 695,700,881
SEE ACCOMPANYING SCHEDULE
CASH 160,032
RECEIVABLE FOR INVESTMENTS SOLD 5,058,640
RECEIVABLE FOR FUND SHARES SOLD 11,122,716
INTEREST RECEIVABLE 3,881,642
TOTAL ASSETS 715,923,911
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 2,500,000
PAYABLE FOR FUND SHARES REDEEMED 7,890,515
DISTRIBUTIONS PAYABLE 213,677
ACCRUED MANAGEMENT FEE 89,887
DISTRIBUTION FEES PAYABLE 191,344
OTHER PAYABLES AND ACCRUED EXPENSES 201,725
TOTAL LIABILITIES 11,087,148
NET ASSETS $ 704,836,763
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 704,904,667
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (67,934)
UNREALIZED GAIN FROM ACCRETION OF DISCOUNT 30
NET ASSETS $ 704,836,763
</TABLE>
DAILY MONEY CLASS: $1.00
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE ($518,536,189 (DIVIDED BY) 518,585,922 SHARES)
CAPITAL RESERVES CLASS: $1.00
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE ($186,300,574 (DIVIDED BY) 186,318,442 SHARES)
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
INTEREST INCOME $ 24,686,452
EXPENSES
MANAGEMENT FEE $ 1,697,118
TRANSFER AGENT FEES 1,487,982
DISTRIBUTION FEES 2,146,029
ACCOUNTING FEES AND EXPENSES 126,054
NON-INTERESTED TRUSTEES' COMPENSATION 1,920
CUSTODIAN FEES AND EXPENSES 39,088
REGISTRATION FEES 272,517
AUDIT 34,738
LEGAL 13,124
TOTAL EXPENSES BEFORE REDUCTIONS 5,818,570
EXPENSE REDUCTIONS (959,197) 4,859,373
NET INTEREST INCOME 19,827,079
REALIZED AND UNREALIZED GAIN (LOSS) 55,913
NET REALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
INCREASE (DECREASE) IN NET UNREALIZED GAIN FROM 30
ACCRETION OF DISCOUNT
NET GAIN (LOSS) 55,943
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 19,883,022
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 19,827,079 $ 14,434,163
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 55,913 (661)
INCREASE (DECREASE) IN NET UNREALIZED GAIN FROM ACCRETION 30 -
OF DISCOUNT
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 19,883,022 14,433,502
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (19,827,079) (14,434,163)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 59,546,704 (35,374,966)
NET ASSET VALUE OF CAPITAL RESERVES CLASS SHARES ISSUED IN - 180,515,417
EXCHANGE FOR THE NET ASSETS OF CAPITAL RESERVES:
MUNICIPAL MONEY MARKET PORTFOLIO
TOTAL SHARE TRANSACTIONS 59,546,704 145,140,451
TOTAL INCREASE (DECREASE) IN NET ASSETS 59,602,647 145,139,790
NET ASSETS
BEGINNING OF PERIOD 645,234,116 500,094,326
END OF PERIOD $ 704,836,763 $ 645,234,116
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - DAILY MONEY CLASS
YEARS ENDED OCTOBER 31,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INTEREST INCOME .030 .031 .030 .033 .022
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.030) (.031) (.030) (.033) (.022)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 3.03% 3.10% 3.02% 3.36% 2.21%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 519 $ 469 $ 500 $ 559 $ 454
(IN MILLIONS)
RATIO OF EXPENSES TO AVERAGE .65% B .65% B .65% B .65% B .65% B
NET ASSETS
RATIO OF NET INTEREST INCOME TO 2.99% 3.06% 2.98% 3.31% 2.17%
AVERAGE NET ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CAPITAL RESERVES CLASS
YEARS ENDED OCTOBER 31,
1998 1997 E
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000000
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .027 .000078
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.027) (.000078)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000000
TOTAL RETURN B, C 2.78% .01%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 186 $ 177
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% D .90% A, D
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 2.73% 2.81% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E FOR OCTOBER 31, 1997 (COMMENCEMENT OF SALE OF CAPITAL RESERVES CLASS
SHARES).
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Treasury Fund (Treasury), Prime Fund (Prime) and Tax-Exempt Fund
(Tax-Exempt) (collectively referred to as "the funds") are funds of
Newbury Street Trust (the trust). The 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. Each fund is authorized to issue an unlimited number
of shares.
Prime and Tax-Exempt each offer two classes of shares, Daily Money
Class and Capital Reserves Class whereas Treasury offers four classes
of shares, Daily Money Class, Capital Reserves Class, Advisor B Class,
and Advisor C Class, each of which has equal rights as to assets and
voting privileges. Each class of the funds has exclusive voting rights
with respect to its distribution plan. Interest income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require 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 the
Tax-Exempt fund, accretion of discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among 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, Treasury and Prime, 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. Prime and 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 securities may involve time-consuming
negotiations and expense, and prompt sale at an acceptable price may
be difficult. Information regarding restricted securities is included
under the caption "Other Information" at the end of each applicable
fund's schedule of investments.
3. JOINT TRADING ACCOUNT.
At the end of the period, Treasury had 20% or more of it's 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 having variable rates are
calculated based on the rate at period end for Treasury fund. The
investments in repurchase agreements through the joint trading account
are summarized as follows:
SUMMARY OF JOINT TRADING
DATED AUGUST 14, 1998, DUE NOVEMBER 5, 1998 AT 5.5%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $500,000,000
Aggregate maturity amount of agreements $506,340,278
Aggregate market value of transferred assets $513,739,881
Coupon rates of transferred assets 5.5% to 12.75%
Maturity dates of transferred assets 4/30/01 to 11/15/16
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
DATED AUGUST 14, 1998, DUE NOVEMBER 9, 1998 AT 5.5%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $300,000,000
Aggregate maturity amount of agreements $303,987,500
Aggregate market value of transferred assets $308,243,929
Coupon rates of transferred assets 5.5% to 12.75%
Maturity dates of transferred assets 4/30/01 to 11/15/16
DATED SEPTEMBER 11, 1998, DUE DECEMBER 9, 1998 AT 5.36%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $180,000,000
Aggregate maturity amount of agreements $182,385,200
Aggregate market value of transferred assets $184,946,357
Coupon rates of transferred assets 5.5% to 12.75%
Maturity dates of transferred assets 4/30/01 to 11/15/16
DATED OCTOBER 14, 1998, DUE DECEMBER 14, 1998 AT 5.02%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $250,000,000
Aggregate maturity amount of agreements $252,126,528
Aggregate market value of transferred assets $255,763,855
Coupon rates of transferred assets 5.38% to 13.75%
Maturity dates of transferred assets 3/31/99 to 5/15/21
DATED OCTOBER 15, 1998, DUE NOVEMBER 16, 1998 AT 5.08%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $100,000,000
Aggregate maturity amount of agreements $100,451,556
Aggregate market value of transferred assets $104,399,082
Coupon rates of transferred assets 6.38% to 6.50%
Maturity dates of transferred assets 1/15/00 to 5/15/05
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
DATED OCTOBER 29, 1998, DUE FEBRUARY 23, 1999 AT 4.72%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $250,000,000
Aggregate maturity amount of agreements $253,835,000
Aggregate market value of transferred assets $256,869,941
Coupon rates of transferred assets 5.5% to 12.75%
Maturity dates of transferred assets 4/30/01 to 11/15/16
DATED OCTOBER 29, 1998, DUE MARCH 29, 1999 AT 4.7%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $250,000,000
Aggregate maturity amount of agreements $254,928,472
Aggregate market value of transferred assets $255,000,284
Coupon rates of transferred assets 6.25% to 11.75%
Maturity dates of transferred assets 3/31/99 to 2/15/10
DATED OCTOBER 30, 1998, DUE NOVEMBER 2, 1998 AT 5.4%
Number of dealers or banks 7
Maximum amount with one dealer or bank 25.5%
Aggregate principal amount of agreements $677,500,000
Aggregate maturity amount of agreements $677,804,658
Aggregate market value of transferred assets $691,950,667
Coupon rates of transferred assets 0% to 13.25%
Maturity dates of transferred assets 11/5/98 to 11/15/27
DATED OCTOBER 30, 1998, DUE NOVEMBER 2, 1998 AT 5.41%
Number of dealers or banks 14
Maximum amount with one dealer or bank 20.7%
Aggregate principal amount of agreements $4,831,921,000
Aggregate maturity amount of agreements $4,834,100,978
Aggregate market value of transferred assets $4,932,289,485
Coupon rates of transferred assets 0% to 13.38%
Maturity dates of transferred assets 10/31/98 to 11/15/27
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 .25% of the fund's average
net assets.
SUB-ADVISER FEE. As each fund's investment sub-adviser, Fidelity
Investments Money Management, 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. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each fund's class of shares (collectively referred to as
"the Plans"). A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each fund's class of shares and providing shareholder support
services. Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. For the period, this fee was based on the following
annual rates of the average net assets of each applicable class:
DAILY MONEY CLASS .25%
CAPITAL RESERVES CLASS .50%
ADVISOR B CLASS 1.00%*
ADVISOR C CLASS 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each fund's class paid FDC the following amounts, a
portion of which was paid to securities dealers, banks and other
financial institutions for the distribution of each fund's class'
applicable shares, and providing shareholder support services:
PAID TO RETAINED BY
FDC FDC
TREASURY - DAILY MONEY CLASS $ 3,096,114 $ 730
TREASURY - CAPITAL RESERVES CLASS 1,567,615 28,826
TREASURY - ADVISOR B CLASS 432,174 324,448
TREASURY - ADVISOR C CLASS 72,274 71,881
$ 5,168,177 $ 425,885
PRIME - DAILY MONEY CLASS $ 7,490,235 $ 242,735
PRIME - CAPITAL RESERVES CLASS 10,080,854 135,667
$ 17,571,089 $ 378,402
TAX-EXEMPT - DAILY MONEY CLASS $ 1,248,208 $ 82,002
TAX-EXEMPT - CAPITAL RESERVES CLASS 897,821 15,498
$ 2,146,029 $ 97,500
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each fund's applicable
class of shares. The Plans also authorize payments to third parties
that assist in the sale of each class' shares or render shareholder
support services. For the period, the following amounts were paid to
third parties under the Plans:
TREASURY - DAILY MONEY CLASS $ 216,786
TREASURY - ADVISOR B CLASS $ 329
TREASURY - ADVISOR C CLASS $ 1,726
PRIME - DAILY MONEY CLASS $ 51,424
TAX-EXEMPT - DAILY MONEY CLASS $ 32,872
SALES LOAD. FDC receives the proceeds of contingent deferred sales
charges levied on Treasury - Advisor B Class share redemptions
occurring within six years of purchase and Treasury - Advisor C Class
share redemptions occurring within one year of purchase. Contingent
deferred sales charges are based on declining rates ranging from 5% to
0% for Treasury - Advisor B Class and 1% for Advisor C Class, 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. When Advisor B Class shares and Advisor C
Class shares are initially sold, FDC pays commissions from its own
resources to dealers through which the sales are made. For the period,
FDC received contingent deferred sales charges of $290,208 and $22,524
for Treasury - Advisor B Class and Treasury - Advisor C Class,
respectively.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for the funds except for
Tax-Exempt. UMB Bank n.a. (UMB) is the custodian and transfer and
shareholder servicing agent for Tax-Exempt. UMB has entered into a
sub-contract with FIIOC to perform the activities associated with
Tax-Exempt's transfer and shareholder servicing agent functions.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
shareholder reports, except proxy statements. For the period, the
following amounts were paid to each transfer agent:
TRANSFER % OF AVERAGE
AGENT AMOUNT NET ASSETS
TREASURY - DAILY MONEY CLASS FIIOC $ 2,871,038 .23
TREASURY - CAPITAL RESERVES CLASS FIIOC 694,858 .22
TREASURY - ADVISOR B CLASS FIIOC 105,488 .24
TREASURY - ADVISOR C CLASS* FIIOC 21,342 .30 *
$ 3,692,726
PRIME - DAILY MONEY CLASS FIIOC $ 6,800,546 .23
PRIME - CAPITAL RESERVES CLASS FIIOC 4,526,438 .23
$ 11,326,984
TAX-EXEMPT - DAILY MONEY CLASS UMB $ 1,095,339 .22
TAX-EXEMPT - CAPITAL RESERVES CLASS UMB 392,643 .22
$ 1,487,982
* ANNUALIZED
ACCOUNTING FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, maintains each fund's accounting records. The fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each class:
<TABLE>
<CAPTION>
<S> <C> <C>
FMR EXPENSE REIMBURSEMENT
LIMITATIONS
TREASURY - DAILY MONEY CLASS 0.65% $ 1,392,964
TREASURY - CAPITAL RESERVES CLASS 0.90% 350,189
TREASURY - ADVISOR B CLASS 1.40% 67,651
TREASURY - ADVISOR C CLASS 1.40% 42,191
$ 1,852,995
PRIME - DAILY MONEY CLASS 0.65% $ 3,248,969
PRIME - CAPITAL RESERVES CLASS 0.90% 2,200,283
$ 5,449,252
TAX-EXEMPT - DAILY MONEY CLASS 0.65% $ 699,858
TAX-EXEMPT - CAPITAL RESERVES CLASS 0.90% 257,199
$ 957,057
</TABLE>
5. EXPENSE REDUCTIONS - CONTINUED
In addition, each fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
custodian fees were reduced by $2,140 for Tax-Exempt under the
custodian arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, two shareholders were record owners of
approximately 16% and 10%, respectively, of the total outstanding
shares of Treasury.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
FROM NET INTEREST INCOME YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 A 1997 B
TREASURY - DAILY MONEY CLASS $ 61,024,076 $ 70,366,580
TREASURY - CAPITAL RESERVES CLASS 14,650,449 35,929
TREASURY - ADVISOR B CLASS 1,800,162 976,874
TREASURY - ADVISOR C CLASS 304,271 -
TOTAL $ 77,778,958 $ 71,379,383
PRIME - DAILY MONEY CLASS $ 150,820,165 $ 125,179,829
PRIME - CAPITAL RESERVES CLASS 96,562,493 227,540
TOTAL $ 247,382,658 $ 125,407,369
TAX-EXEMPT - DAILY MONEY CLASS $ 14,919,060 $ 14,420,492
TAX-EXEMPT - CAPITAL RESERVES CLASS 4,908,019 13,671
TOTAL $ 19,827,079 $ 14,434,163
</TABLE>
A DISTRIBUTIONS FOR TREASURY-ADVISOR C CLASS ARE FOR THE PERIOD
NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1998.
B DISTRIBUTIONS FOR CAPITAL RESERVES CLASS ARE FOR OCTOBER 31, 1997
(COMMENCEMENT OF SALE OF SHARES).
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 A 1997 B
TREASURY - DAILY MONEY CLASS $ 6,183,446,431 $ 7,946,018,718
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 51,096,751 50,873,842
SHARES REDEEMED (6,257,475,931) (8,513,852,139)
NET INCREASE (DECREASE) $ (22,932,749) $ (516,959,579)
TREASURY - CAPITAL RESERVES CLASS $ 1,993,751,534 $ 14,297,304
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 11,646,305 33,861
SHARES REDEEMED (1,790,313,607) (16,453,498)
215,084,232 (2,122,333)
ISSUED IN EXCHANGE FOR THE NET ASSETS OF CAPITAL - 266,966,651
RESERVES: U.S. GOVERNMENT PORTFOLIO
NET INCREASE (DECREASE) $ 215,084,232 $ 264,844,318
TREASURY - ADVISOR B CLASS $ 154,354,745 $ 103,033,399
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 1,654,170 852,624
SHARES REDEEMED (125,863,931) (78,321,944)
NET INCREASE (DECREASE) $ 30,144,984 $ 25,564,079
TREASURY - ADVISOR C CLASS $ 77,740,029
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 247,692
SHARES REDEEMED (62,085,301)
NET INCREASE (DECREASE) $ 15,902,420
PRIME - DAILY MONEY CLASS $ 17,264,760,055 $ 14,359,821,343
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 140,399,598 116,267,349
SHARES REDEEMED (16,695,204,676) (14,453,129,872)
NET INCREASE (DECREASE) $ 709,954,977 $ 22,958,820
PRIME - CAPITAL RESERVES CLASS $ 45,041,695,815 $ 157,340,539
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 290,194,746 225,744
SHARES REDEEMED (44,839,598,846) (116,849,328)
492,291,715 40,716,955
ISSUED IN EXCHANGE FOR THE NET ASSETS OF CAPITAL - 1,723,735,801
RESERVES: MONEY MARKET PORTFOLIO
NET INCREASE (DECREASE) $ 492,291,715 $ 1,764,452,756
</TABLE>
A SHARE TRANSACTIONS FOR TREASURY - ADVISOR C CLASS ARE FOR THE PERIOD
NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1998.
B SHARE TRANSACTIONS FOR CAPITAL RESERVES CLASS ARE FOR OCTOBER 31,
1997 (COMMENCEMENT OF SALE OF SHARES).
8. SHARE TRANSACTIONS - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 A 1997 B
TAX-EXEMPT - DAILY MONEY CLASS $ 2,154,461,152 $ 1,868,631,417
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 13,276,012 12,904,553
SHARES REDEEMED (2,117,850,043) (1,913,028,983)
NET INCREASE (DECREASE) $ 49,887,121 $ (31,493,013)
TAX-EXEMPT - CAPITAL RESERVES CLASS $ 828,007,955 $ 5,020,244
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 4,306,467 425,720
SHARES REDEEMED (822,654,839) (9,327,917)
9,659,583 (3,881,953)
ISSUED IN EXCHANGE FOR THE NET ASSETS OF CAPITAL - 180,540,812
RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
NET INCREASE (DECREASE) $ 9,659,583 $ 176,658,859
</TABLE>
A SHARE TRANSACTIONS FOR TREASURY - ADVISOR C CLASS ARE FOR THE
PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF SHARES) TO OCTOBER
31, 1998.
B SHARE TRANSACTIONS FOR CAPITAL RESERVES CLASS ARE FOR OCTOBER 31,
1997 (COMMENCEMENT OF SALE OF SHARES).
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
TREASURY - DAILY MONEY CLASS $ 188,004
TREASURY - CAPITAL RESERVES CLASS 80,145
TREASURY - ADVISOR B CLASS 22,350
TREASURY - ADVISOR C CLASS 29,979
$ 320,478
PRIME - DAILY MONEY CLASS $ 560,482
PRIME - CAPITAL RESERVES CLASS 442,022
$ 1,002,504
TAX-EXEMPT - DAILY MONEY CLASS $ 200,197
TAX-EXEMPT - CAPITAL RESERVES CLASS 72,320
$ 272,517
10. MERGER INFORMATION
On October 30, 1997, Treasury Fund acquired all of the assets and
assumed all of the liabilities of Capital Reserves: U.S. Government
Portfolio (U.S. Government Portfolio). The acquisition, which was
approved by the shareholders of U.S. Government Portfolio on September
17, 1997, was accomplished by an exchange of 266,966,651 shares of
Treasury Fund for the 266,966,651 shares then outstanding (each valued
at $1.00) of U.S. Government Portfolio. Based on the opinion of fund
counsel, the reorganization qualified as a tax-free reorganization for
federal income tax purposes with no gain or loss recognized to the
funds or their shareholders. U.S. Government Portfolio's net assets
were combined with Treasury Fund for total net assets after the
acquisition of $1,586,154,631.
On October 30, 1997, Prime Fund acquired all of the assets and assumed
all of the liabilities of Capital Reserves: Money Market Portfolio
(Money Market Portfolio). The acquisition, which was approved by the
shareholders of Money Market Portfolio on September 17, 1997, was
accomplished by an exchange of 1,723,735,801 shares of Prime Fund for
the 1,723,735,801 shares then outstanding (each valued at $1.00) of
Money Market Portfolio. Based on the opinion of fund counsel, the
reorganization qualified as a tax-free reorganization for federal
income tax purposes with no gain or loss recognized to the funds or
their shareholders. Money Market Portfolio's net assets were combined
with Prime Fund for total net assets after the acquisition of
$4,415,315,333.
On October 30, 1997, Tax-Exempt Fund acquired all of the assets and
assumed all of the liabilities of Capital Reserves: Municipal Money
Market Portfolio (Municipal Money Market Portfolio). The acquisition,
which was approved by the shareholders of Municipal Money Market
Portfolio on September 17, 1997, was accomplished by an exchange of
180,540,812 shares of Tax-Exempt Fund for the 180,540,812 shares then
outstanding (each valued at $1.00) of Municipal Money Market
Portfolio. Based on the opinion of fund counsel, the reorganization
qualified as a tax-free reorganization for federal income tax purposes
with no gain or loss recognized to the funds or their shareholders.
Municipal Money Market Portfolio's net assets were combined with
Tax-Exempt Fund for total net assets after the acquisition of
$652,028,340.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Newbury Street Trust and the Shareholders of Prime
Fund, Treasury Fund and Tax-
Exempt Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules 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
Prime Fund, Treasury Fund , and Tax-Exempt Fund (funds of Newbury
Street Trust) at October 31, 1998, the results of their operations,
the changes in their net assets and the 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 the Newbury Street Trust'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 at October 31, 1998 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed
above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 10,1998
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Boyce I. Greer, Vice President
Fred L. Henning, Jr., Vice President
John J. Todd, Vice President
Robert A. Litterst, Vice President
Scott A. Orr, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT TRUSTEES
DMFI-ANN-1298 66848
1.538749.101
GENERAL DISTRIBUTOR
Fidelity Distributions Corporation (FDC)
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA (Prime Fund &
Treasury Fund)
UMB Bank, n.a.
Kansas City, MO (Tax-Exempt Fund)
CUSTODIAN
The Bank of New York
New York, NY (Prime Fund &
Treasury Fund)
UMB Bank, n.a.
Kansas City, MO (Tax-Exempt Fund)
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
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