================================================================================
[PHOTO] [PHOTO]
------- -------
Michael M. Spencer Paul Marandett
Director of Fixed Portfolio Manager
Income Investments California Tax Exempt
Money Fund
TO OUR SHAREHOLDERS
One of the great benefits of our semi-annual communication to our shareholders
is the opportunity to step back from our day to day wrestling with market forces
and reflect over a longer time frame. In some respects, as we look at the first
six months of 1997, we see the mirror image of 1996. In 1996, we began the year
with widespread expectations of lower interest rates. These expectations were
met, as the Federal Reserve actually lowered interest rates in January of 1996.
As the year wore on, however, expectations changed and by the middle of last
year there was widespread anticipation that interest rates would move higher,
expectations which we shared.
Now look at 1997. We have had what appears to be a reverse replay. We began the
year with the widespread expectation that the Federal Reserve would move to
change rates, just as we had in 1996. And, just as in 1996, the Federal Reserve
fulfilled that expectation. This time, however, the expectation and the movement
were in the direction of higher rates, with the Federal Reserve raising the
federal funds rate (the rate charge by banks to other banks for overnight
borrowing) by 0.25% or 25 basis points. Also, just as in 1996, as the year has
worn on, expectations have reversed course. Most now expect the Federal Reserve
to at least remain neutral and refrain from either raising or lowering rates for
at least the next few months.
But the most remarkable thing about all these observations, is not that 1997
just looks like 1996 in reverse. Rather, the most remarkable thing has been the
continuing stability of the fixed income markets during these changes of
direction by the Federal Reserve. On June 30, 1996 the 91-day Treasury Bill was
priced to yield 5.20%; on December 31, 1996 it was priced to yield 5.19%, and on
June 30, 1997 it was priced to yield 5.17%. While less stable than the
short-term rate on the 91-day Treasury Bill, the long-term yield represented by
the 30- year Treasury Bond has also shown remarkably little fluctuation,
registering readings of 6.91%, 6.64%, and 6.78% on the three dates in question.
At least in the short term, we expect this stability to continue. Recent
testimony by Alan Greenspan, as well as other governors of the Federal Reserve
System, leads us to believe that the Federal Reserve is unlikely to move rates
in either direction over the next few months. In addition, the economy, in the
word of the Federal Reserve Chairman, remains exceptional. Economic growth
continues, but not at a pace that has yet been fast enough to accelerate
inflation.
As always, we will continue to maintain the highest quality investments in the
Freedom California Tax Exempt Money Fund. At the end of June, the Freedom
California Tax Exempt Money Fund offered a 7-day yield of 3.30% which represents
67% of yields offered by comparable taxable money funds. Six months ago that
ratio stood at 59% thus demonstrating the strong relative performance of the tax
exempt sector this year. The Funds annualized total return rose from a first
quarter average of 2.84% to 3.29% for the second quarter. This jump in rates was
initially caused by the Federal Reserve which raised the Federal Funds rate from
5.25% to 5.50% on March 25th of this year. At that time the Fed was in a
preemptive mode, anticipating inflationary pressures from tremendous first
quarter economic growth.
The economic slowdown during the second quarter, however, has seen long-term
interest rates decline to levels well below those of last March. Surprisingly,
this has not been the case in the short-term or money market sector. Strong
corporate profits along with stock market appreciation resulted in larger than
normal money fund redemption or outflows as shareholders made tax payments.
Those outflows coupled with an increase in the supply of variable rate
securities produced a supply/demand balance that kept short-term rates stable
but comparatively high.
The month of June is historically the heaviest in terms of tax exempt note
issuance as June 30th is year-end for California governmental units. Note
issuance this June is slightly lighter than normal, however, as better overall
economic conditions in California have produced greater tax revenues. The supply
side of the equation is also smaller as individual investors continue to focus
on the equity markets and corporations await word from Washington regarding the
limits to be imposed on their tax exempt investments. Interest rate volatility,
therefore, has been much lower than in past years.
These fundamental constraints have resulted in a fairly flat yield curve, a
condition that has persisted for some time. Interest rates on variable rate
securities have, on average, matched those offered by 3-month and 6-month
securities for the last few quarters. The annual California note season however,
created a temporary supply/demand imbalance resulting in higher interest rates
on 12-month notes. The Freedom California Tax Exempt Money Fund, therefore was
able to add to its note holdings as well as to replace maturing notes with
higher yields than were previously available. This activity caused the Funds
average maturity to jump from a low of 18-days to 60-days but as other
California money funds follow suit we remain only slightly above average. Our
general economic forecast as well as our outlook for interest rates dictates no
change in strategy at this time. We will endeavor to maintain for our
shareholders the highest rates of return consistent with our high standards of
superior credit quality.
Sincerely,
Michael M. Spencer
Director of Fixed Income
Investments
Paul Marandett
Portfolio Manager
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
<S> <C> <C>
MUNICIPAL SECURITIES -- 95.3%
$2,190,000 Alameda County Multi-Family
Mortgage Bonds (Quail Run Apts.)
(FNMA Insured) 4.00% 7-02-97 $2,190,000
1,500,000 Anaheim Certificates of
Participation (AMBAC Insured/ABN
Amro LOC) 3.90% 7-02-97 1,500,000
1,000,000 California C.P. (Morgan
Guaranty/Bayerische Landesbank/
Credit Suisse/Landesbank
Hessen/WestDeutche Bank LOC)
3.75% 8-12-97 1,000,000
4,300,000 California Health Facilities
Authority (St. Francis Hospital)
(Bank of America LOC) 4.05% 7-02-97 4,300,000
1,500,000 California Health Facilities
Authority (Sutter Health System)
(Morgan Guaranty LOC) 3.75%
7-01-97 1,500,000
3,000,000 California School Cash Reserve
Program 4.75% 7-02-97 3,000,071
2,000,000 Carlsbad Multi-Family Mortgage
Bonds (La Costa Apartments) (Bank
of America LOC) 4.05% 7-02-97 2,000,000
1,210,000 Central Coast Water Authority Series
96A (AMBAC Insured) 4.00% 10-01-97 1,211,028
1,500,000 Concord Multi-Family Mortgage Bonds
(Crossroads Apartments) (FNMA
Insured) 4.00% 7-02-97 1,500,000
1,300,000 Duarte Redevelopment Agency Series
A (Bank of America LOC) 3.95%
7-03-97 1,300,000
6,000,000 Foothill/Eastern Transportation
Agency Series 95B (Morgan Guaranty
LOC) 4.00% 7-03-97 6,000,000
1,250,000 Independent Cities (National
Westminster LOC) 4.00% 7-02-97 1,250,000
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
$1,200,000 Irvine Assessment District
Improvement Bonds (Kredeitbank NV
LOC) 3.75% 7-01-97 $1,200,000
1,000,000 Irvine Assessment District
Improvement Bonds (National
Westminster LOC) 3.75% 7-01-97 1,000,000
1,000,000 Irvine Ranch Water District Revenue
Bonds (Bank of America LOC) 3.75%
7-01-97 1,000,000
1,600,000 Irvine Ranch Water District Revenue
Bonds (Landesbank Hessen LOC)
3.75% 7-01-97 1,600,000
3,700,000 Kern County Public Facilities Proj.
Series A (Union Bank of Switzerland
LOC) 4.00% 7-02-97 3,700,000
3,000,000 Kern County Public Facilities Proj.
Series B (Union Bank of Switzerland
LOC) 4.00% 7-02-97 3,000,000
1,200,000 Kern County Public Facilities Proj.
Series D (Union Bank of Switzerland
LOC) 4.00% 7-02-97 1,200,000
2,700,000 Livermore Multi-Family Mortgage
Bonds (FNMA-Insured) 4.00%
7-02-97 2,700,000
1,000,000 Los Angeles County MTA (Bayerische
Verein/Canadian Imperial Bank of
Commerce/National Westminster
LOC) 3.70% 9-04-97 1,000,000
4,000,000 Los Angeles County TRANS 4.50%
6-30-98 4,024,960
1,100,000 Los Angeles DWAP (Toronto
Dominion/Bank of Nova Scotia LOC)
3.90% 10-06-97 1,100,000
1,000,000 Los Angeles USD TRANS 4.50% 9-30-97 1,001,232
3,300,000 Mountainview Multi-Family Housing
Revenue (Villa Mariposa Project)
(FGIC-SPI) 4.00% 7-03-97 3,300,000
</TABLE>
3
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 1997 - (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
<S> <C> <C>
MUNICIPAL SECURITIES -- 95.3%
$ 400,000 Orange County Health Systems
Certificates of Participation
(Flo. Crittenton) (Swiss Bank LOC)
3.90% 7-02-97 $ 400,000
1,000,000 Orange County Housing Authority
(Bear Brano Apartments) (Credit
Suisse LOC) 3.90% 7-03-97 1,000,000
1,500,000 Orange County Housing Authority
(Costa Mesa Project) (Chemical
Bank LOC) 3.90% 7-02-97 1,500,000
2,000,000 Orange County Sanitation District
(AMBAC Insured/Barclays Bank LOC)
4.00% 7-03-97 2,000,000
600,000 Orange County Water District
(National Westminster LOC) 3.75%
7-01-97 600,000
3,000,000 Palm Springs Community
Redevelopment Agency (Citibank
LOC) 3.90% 7-02-97 3,000,000
1,500,000 Puerto Rico Industrial, Medical &
Environmental PCFA (Shering
Plough) (Morgan Guaranty LOC)
3.75% 12-01-97 1,500,918
1,300,000 Riverside County IDB (Bank of America
LOC) 3.75% 7-03-97 1,300,000
2,000,000 Riverside County TRANS 4.50% 6-30-98 2,010,541
1,000,000 Sacramento County MFHA Revenue Bonds
(Grouse Run) (Bank of America LOC)
4.05% 7-03-97 1,000,000
2,600,000 San Bernadino County Certificates
of Participation (Canadian
Imperial Bank of Commerce LOC)
4.00% 7-02-97 2,600,000
3,000,000 San Bernadino County TRANS (Toronto
Dominion/Helaba LOC) 4.50%
6-30-98 3,018,720
2,785,000 San Diego County Certificates of
Participation (AMBAC Insured)
4.00% 6-15-98 2,788,856
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
$1,000,000 San Diego County TRANS (Canadian
Imperial Bank of Commerce LOC)
4.375% 9-30-97 $ 1,002,061
3,000,000 San Diego County TRANS Series A 4.50%
7-02-97 3,000,059
300,000 San Jose MFHA (Foxchase Apts.)
(FGIC-SPI Insured) 4.00% 7-03-97 300,000
500,000 San Jose MFHA (Fairway Glen Apts.)
(FGIC-SPI Insured) 4.00% 7-03-97 500,000
1,000,000 San Mateo County TRANS 4.50% 7-01-98 1,006,740
1,800,000 Santa Clara Electric Revenue Bonds
(National Westminster LOC) 4.00%
7-02-97 1,800,000
4,000,000 Santa Clara MFHA (Foxchase Apts.)
(FGIC-SPI Insured) 4.00% 7-03-97 4,000,000
2,385,000 Vallejo Multi-Family Mortgage Bonds
(FNMA Insured) 4.00% 7-02-97 2,385,000
1,000,000 West & Central Basin Finance
Authority (Toronto Dominion LOC)
3.70% 7/10/97 1,000,000
2,000,000 3.45% 7/21/97 2,000,000
---------
TOTAL INVESTMENTS -- 95.3% ............................. $92,290,186(a)
Other Assets & Liabilities, Net -- 4.7% ................ 4,571,987
-----------
TOTAL NET ASSETS -- 100.0% ............................. $96,862,173
===========
</TABLE>
Legend:
- -------
C.P. -- Commercial Paper DWAP -- Department of Water & Power IDB -- Industrial
Development Board LOC -- Letter of Credit MFHA -- Multifamily Housing Authority
MTA -- Metropolitan Transit Authority PCFA -- Pollution Control Finance
Authority TRANS -- Tax and Revenue Anticipation Notes USD -- Unified School
District
Insurance Abbreviations:
- ------------------------
AMBAC -- American Municipal Bond Assurance Corporation
FGIC-SPI -- Federal Guaranty Insurance Corporation-
Securities Purchased Inc.
FNMA -- Federal National Mortgage Association
Maturity dates for many bonds and notes represent the next scheduled date
at which the interest rate may be adjusted or a "demand" or "put" feature
may be exercised.
- -----------------------
(a) Cost for tax purposes is the same.
See Notes to Financial Statements
4
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments, at amortized cost $ 92,290,186
Cash 13,585,389
Receivable for Fund shares sold 737,124
Interest receivable 591,177
Prepaid expenses 961
------------
Total Assets 107,204,837
------------
LIABILITIES
Payable for Investments purchased 10,060,960
Payable for Fund shares redeemed 112,307
Dividends payable 131,518
Accrued expenses:
Investment adviser's fee 32,216
Transfer agent and shareholder servicing fee 5,663
------------
Total Liabilities 10,342,664
------------
NET ASSETS $ 96,862,173
============
NET ASSETS CONSIST OF:
Capital paid in $ 96,859,965
Accumulated net realized gain 2,208
------------
$ 96,862,173
============
SHARES ISSUED AND OUTSTANDING (UNLIMITED SHARES
AUTHORIZED) 96,859,965
------------
NET ASSET VALUE PER SHARE $ 1.00
============
</TABLE>
See Notes to Financial Statements
5
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
INTEREST INCOME $1,913,954
----------
EXPENSES
Investment adviser's fee 275,663
Transfer agent and shareholder services 27,475
Custodian 905
Compensation of Trustees 4,370
Audit 7,820
Legal 8,230
Printing, postage and stationery 8,640
Membership dues 2,665
Registration expense 4,440
Insurance expense 1,857
Other 362
----------
Total expenses before waiver 342,427
Less: fees waived by adviser (60,205)
----------
Net expenses 282,222
----------
NET INVESTMENT INCOME 1,631,732
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,631,732
==========
</TABLE>
See Notes to Financial Statements
6
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997* DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income $ 1,631,732 $ 3,024,843
------------- -------------
Net increase in net assets
resulting from operations 1,631,732 3,024,843
------------- -------------
DIVIDENDS TO SHAREHOLDERS (1,631,732) (3,024,843)
------------- -------------
-- --
------------- -------------
CAPITAL SHARE TRANSACTIONS:
(At Net Asset Value of $1 per share)
Proceeds from sale of shares 159,140,571 385,547,845
Net asset value of shares issued to
shareholders in reinvestment of
dividends 1,475,030 2,968,834
Cost of shares redeemed (179,090,073) (358,384,518)
------------- -------------
Net increase from capital share
transactions (18,474,472) 30,132,161
------------- -------------
Net increase/(decrease) in net
assets (18,474,472) 30,132,161
NET ASSETS:
Beginning of period 115,336,645 85,204,484
------------- -------------
End of period $ 96,862,173 $ 115,336,645
============= =============
DIVIDENDS TO SHAREHOLDERS PER SHARE $ 0.0147 $ 0.0286
============= =============
- ---------------
* Unaudited
</TABLE>
See Notes to Financial Statements.
7
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
(A SERIES OF FREEDOM GROUP OF TAX EXEMPT FUNDS)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. ACCOUNTING POLICIES. Freedom Group of Tax Exempt Funds (the
"Trust") is a Massachusetts business trust registered under the Investment
Company Act of 1940, as amended, as an open-end management company. The
Agreement and Declaration of Trust permits the issuance of an unlimited number
of shares of beneficial interest in separate series, with shares of each series
representing interests in a separate portfolio of assets and operating as a
separate distinct fund. The Trust consists of two series: the Freedom California
Tax Exempt Money Fund (the "Fund") and the Freedom Tax Exempt Money Fund. The
financial statements of the Freedom Tax Exempt Money Fund are included in a
separate semi-annual report for that Fund.
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
Security Valuation and Transactions. The Fund values its portfolio
securities utilizing the amortized cost valuation method. This method involves
valuing a portfolio security at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium. Cost is determined and
gains and losses are based upon the specific identification method for both
financial statement and federal income tax purposes. Investment securities
transactions are accounted for on the date the securities are purchased or sold.
The Fund may purchase or sell securities on a when-issued basis. Payment
and delivery may take place more than a week after the date of the transaction.
The price that will be paid for the underlying securities is fixed at the time
the transaction is negotiated.
Expenses. The majority of the expenses of the Trust are directly
identifiable to an individual Fund. Expenses which are not readily identifiable
as belonging to a specific fund are allocated in such a manner as deemed
equitable by the Trustees, taking into consideration, among other things, the
nature and type of expense and the relative size of the funds.
Trustees' fees of $6,000 per Trust, per year, plus $250 per meeting of the
Board of Trustees and $350 per meeting of any committee thereof, are paid by the
Trust to each Trustee who is not an interested person of the Trust. No
remuneration is paid by the Trust to any Trustee or officer of the Trust who is
affiliated with Freedom Capital Management Corporation, the Trust's advisor.
The Trust has entered into an insurance agreement with ICI Mutual Insurance
Company, under which the Trust pays both an annual insurance premium and a
one-time reserve premium, and is committed to provide additional funds of up to
300% of its initial annual premium if and when called upon.
8
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
(A SERIES OF FREEDOM GROUP OF TAX EXEMPT FUNDS)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
Federal Income Tax. It is the Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its income to its shareholders. It is also the intention of
the Fund to make sufficient distributions to shareholders to avoid imposition of
excise tax on undistributed amounts under the Internal Revenue Code. Therefore,
no federal income or excise tax provision is required.
Interest Income and Dividends to Shareholders. Interest income is accrued
as earned. Dividends to shareholders are declared daily from net investment
income, which consists of interest accrued or discount earned (including
original issue and market discount) less amortization of premium and the
estimated expenses of the Fund applicable to the dividend period.
Other. There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations. The Fund may focus its investments in certain industries. As
a result, the Fund may be subject to a greater risk than a fund that is more
fully diversified in various industries.
NOTE 2. INVESTMENT ADVISOR AND OTHER RELATED PARTY TRANSACTIONS. Freedom
Capital Management Corporation ("FCMC") is the parent of Freedom Distributors
Corporation as well as an affiliate of Sutro & Co., Inc. ("Sutro") and Tucker
Anthony Incorporated ("Tucker Anthony"). All are wholly owned subsidiaries of
Freedom Securities Corporation ("Freedom Securities"), formerly John Hancock
Freedom Securities. On November 29, 1996, John Hancock Subsidiaries, Inc. sold
approximately 95% of its interest in Freedom Securities to an investor group
which includes certain members of management and employees of Freedom Securities
and its subsidiaries, including FCMC. The consummation of the transaction
resulted in a change of control of the Advisor, causing the advisory agreement
between FCMC and the Trust, on behalf of each of the Funds, to be assigned, as
such term is defined under the Investment Company Act of 1940. Shareholders have
subsequently approved the new advisory agreement, as necessitated by this change
in control. The new advisory agreement is substantially the same as the prior
advisory agreement.
FCMC, the investment advisor of the Trust, furnishes the Fund with
administration and other services and office facilities in Boston. For these
services and facilities, the Fund pays a monthly fee, based upon the average
daily net asset value of the Fund, at the annual rate of one half of one percent
(.50%) on the first $500 million of average daily net assets and forty-five
hundredths of one percent (.45%) for average daily net assets in excess of that
amount. The Fund itself pays no salaries or compensation to any of its officers.
FCMC may voluntarily waive part or all of its management fee for a period
under the terms of the advisory agreement. Such waivers were provided to the
Fund for the six months ended June 30, 1997 and may be discontinued at any time.
9
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
(A SERIES OF FREEDOM GROUP OF TAX EXEMPT FUNDS)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
Sutro, Tucker Anthony and Freedom Distributors Corporation act as
distributors of the Fund's shares and receive no compensation for such services.
Freedom Services Corporation (formerly John Hancock Clearing Corporation)
received reimbursements of $11,045 for maintaining and servicing certain
shareholder accounts for the six months ended June 30, 1997.
John Hancock Signature Services, Inc. ("JHSS"), formerly John Hancock
Investor Services, Corp., a wholly-owned subsidiary of the Berkeley Financial
Group is transfer agent for the Fund. JHSS received $12,080 for the six months
ended June 30, 1997.
NOTE 3. Purchases and sales (including maturities) of investments for the
six months ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
Purchases of investments $136,940,536
Sales of investments $157,671,000
</TABLE>
10
OUR FINANCIAL HIGHLIGHTS
The table of FINANCIAL HIGHLIGHTS below represents a summary history of our
operations. The table expresses the information in terms of a single share
outstanding throughout each period:
<TABLE>
<CAPTION>
DIVIDENDS RATIO OF NET
NET ASSET FROM RATIO OF INVESTMENT
VALUE NET NET NET ASSET NET ASSETS EXPENSES INCOME
BEGINNING INVEST- INVEST- VALUE END TO AVERAGE TO AVERAGE
OF MENT MENT END OF TOTAL OF PERIOD DAILY DAILY
PERIOD ENDED PERIOD INCOME(A) INCOME PERIOD RETURN** (THOUSANDS) NET ASSETS NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1997++ $1.00 $0.0147 $(0.0147) $1.00 1.50% $ 96,862 0.51%+ 2.96%+
December 31, 1996 1.00 0.0286 (0.0286) 1.00 2.90% 115,337 0.46% 2.86%
December 31, 1995 1.00 0.0325 (0.0325) 1.00 3.29% 85,204 0.47% 3.25%
December 31, 1994 1.00 0.0228 (0.0228) 1.00 2.32% 72,659 0.46% 2.28%
December 31, 1993 1.00 0.0195 (0.0195) 1.00 1.96% 90,479 0.33% 1.95%
December 31, 1992 1.00 0.0241 (0.0241) 1.00 2.45% 67,929 0.29% 2.41%
December 31, 1991 1.00 0.0388 (0.0388) 1.00 3.94% 50,005 0.27% 3.89%
December 31, 1990* 1.00 0.0183 (0.0183) 1.00 1.84% 32,381 0.34%+ 5.28%+
- --------------
+ Annualized.
++ Unaudited.
(a) Net of fees waived by the Adviser which amounted to $.0011, $.0015, $.0018,
$.0020, $.0028, $.0033, $.0042 and $.0017 per share, respectively.
* From commencement of operations, August 27, 1990.
** Total return would have been lower had the Advisor not waived fees.
Periods less than a year are not annualized.
</TABLE>
11
NO SALES OR REDEMPTION CHARGES
DISTRIBUTORS
Sutro & Co. Incorporated
201 California Street
San Francisco, California 94111
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02108
Telephone Toll Free
800-453-8206
INVESTMENT ADVISER
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
TRANSFER AND SHAREHOLDER
SERVICES AGENT
John Hancock Signature
Services, Incorporated
P.O. Box 9102
Boston, Massachusetts 02205-9102
Telephone Toll Free
800-257-3336
[LOGO] FREEDOM
GROUP OF MONEY FUNDS
This report has been prepared for shareholders and may be distributed
to others only if preceded or accompanied by a current prospectus for
the Freedom California Tax Exempt Money Fund
FCTSA 0697 [Recycle Logo]
--FREEDOM--
CALIFORNIA
[LOGO]
TAX EXEMPT
MONEY FUND
----------
SEMI-ANNUAL REPORT
JUNE 30,1997
