<PAGE> 1
[PHOTO OF PAUL MARANDETT]
Paul Marandett
Portfolio Manager
California Tax Exempt
Money Fund
[FREEDOM LOGO]
TO OUR SHAREHOLDERS
As was the case in mid-1997, a sharp slowdown in economic activity during the
second quarter caused long term interest rates to remain at historically low
levels. This year the short-term or money market sector has followed suit.
Yields offered by tax exempt money funds fluctuated very little during the
first half of the year. The seven day average yield on the Freedom California
Tax Exempt Money Fund fluctuated within a relatively narrow range (2.85% to
3.00%) from December of last year until the end of the second quarter. These
yields remain fairly comparable to most other California money funds. There was
some yield volatility caused by the "January effect," which saw cash inflows
into the Fund, and cash outflows occurred before "tax time" in late March and
early April. Overall, however, the fundamentals of supply and demand remained
fairly equal for the first quarter of 1998.
June, historically the heaviest in terms of tax exempt note issuance, saw new
issue volume in California decline by over 10% (from $6.0 billion last year to
$5.2 billion in June of 1998). Favorable economic conditions continue to allow
governmental units to operate more on a pay-as-you-go basis thus lessening
their need to issue notes except to ameliorate cash flow imbalances. Many
California borrowers also began issuing 15-month notes, taking advantage of the
low interest rate environment. Because 15-month notes are not money fund
eligible, the reduced supply along with consistent demand combined in the
second quarter to create an imbalance in the fundamentals thus driving interest
rates even lower for California investors. Money fund assets have continued to
grow, however, as investors reallocate some funds into the safety and liquidity
of money market funds thereby exacerbating the supply/demand imbalance in the
short term California market.
The average maturity for California tax exempt money funds has been around 43
days so far this year (the maximum allowed is 90 days). This historically short
average maturity is a direct result of the short term markets' flat yield
curve, a condition that has persisted for quite some time. Interest rates on
1-, 7- and 30-day variable rate securities have, on average, matched those
offered by 3-, 6-, and 12-month securities for the last several quarters. The
Freedom California Tax Exempt Money Fund has continued to maintain a shorter
than average maturity in response to the flat yield curve. We anticipate very
little change in this strategy for the near term. Should the short term yield
curve begin to steepen, the Fund's present liquidity affords us the flexibility
to lengthen the average maturity thus locking in higher yields. Our greatest
concern, however, continues to be that of maintaining the superior credit
quality of the individual securities which comprise the Freedom California Tax
Exempt Money Fund.
Sincerely,
/s/ Paul Marandett
Paul Marandett
Portfolio Manager
<PAGE> 2
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
- ---------- ----------- -----
<C> <S> <C>
MUNICIPAL SECURITIES -- 103.96%
$2,890,000 Alameda County Multi-Family
Mortgage Bonds (Quail Run
Apts.) (FNMA) 3.00%
7-01-98................... $ 2,890,000
2,000,000 California C.P.
(Commerzebank/Bank of
America/Bank of Nova
Scotia/National
Westminster LOC's) 3.80%
7-07-98................... 2,000,000
1,000,000 California EDA (Bank of
America LOC) 3.50% 7-01-
98........................ 1,000,000
California Health Facilities
Authority (Catholic Health
Care)
900,000 (MBIA/Morgan Guaranty)
3.00% 7-01-98............. 900,000
3,000,000 (MBIA/Rabobank) 3.00%
7-01-98................... 3,000,000
3,200,000 (Morgan Guaranty LOC) 3.00%
7-01-98................... 3,200,000
2,000,000 California Health Facilities
Authority (Scripps)
(MBIA/FNB Chicago) 3.20%
7-01-98................... 2,000,000
2,000,000 Carlsbad Multi-Family
Mortgage Bonds (La Costa
Apartments) (Bank of
America LOC) 3.05% 7-01-
98........................ 2,000,000
1,500,000 Concord Multi-Family
Mortgage Bonds (Crossroads
Apartments) (FNMA) 3.00%
7-01-98................... 1,500,000
1,300,000 Duarte Redevelopment Agency
Series A (Bank of America
LOC) 3.15% 7-02-98........ 1,300,000
1,000,000 Fremont MFHA (Creekside)
(Kredietbank LOC) 3.10%
7-02-98................... 1,000,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
- ---------- ----------- -----
<C> <S> <C>
Irvine Assessment District
Improvement Bonds
$1,000,000 (Bayerische Vereinsbank
LOC) 3.30% 7-01-98........ $ 1,000,000
1,200,000 (Kredeitbank NV LOC) 3.30%
7-01-98................... 1,200,000
Irvine Ranch Water District
Revenue Bonds
7,600,000 (Bank of America LOC)
3.30% 7-01-98............. 7,600,000
1,400,000 (Toronto Dominion LOC) 3.30%
7-01-98................... 1,400,000
8,000,000 Kern County Public
Facilities Proj. (Union
Bank of Switzerland LOC)
3.00% 7-01-98............. 8,000,000
Los Angeles Capital Asset
Leasing Corp. (West
Deutsche Landesbank/
Bayerische Landesbank/
Morgan Guaranty LOC)
1,000,000 3.50% 7-22-98............... 1,000,000
2,000,000 3.55% 7-29-98............... 2,000,000
2,580,000 Los Angeles County IDA (Hon
Industries) (Morgan
Guaranty LOC) 3.20% 7-01-
98........................ 2,580,000
700,000 Los Angeles County Pension
(AMBAC/Bank of Nova
Scotia) 3.10% 7-01-98..... 700,000
5,000,000 Los Angeles County TRANS
4.50% 6-30-99............. 5,039,850
Los Angeles DWAP (Toronto
Dominion/Bank of Nova
Scotia LOC)
1,000,000 3.40% 7-06-98............... 1,000,000
2,000,000 3.55% 9-04-98............... 2,000,000
1,000,000 Los Angeles Wastewater
System (Escrowed in U.S.
Government Securities)
7.625% 8-01-98............ 1,023,392
</TABLE>
See Notes to Financial Statements.
2
<PAGE> 3
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 1998 -- (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
- ---------- ----------- -----
<C> <S> <C>
MUNICIPAL SECURITIES -- (CONTINUED)
$1,000,000 Los Angeles Wastewater
System (Union Bank of
Switzerland/Morgan
Guaranty LOC) 3.55% 10-
07-98..................... $ 1,000,000
1,400,000 Orange County Health Systems
Certificates of
Participation (Flo.
Crittenton) (Swiss Bank
LOC) 3.20% 7-01-98........ 1,400,000
1,000,000 Orange County Housing
Authority (Bear Brano
Apartments) (Kredeitbank
LOC) 3.10% 7-02-98........ 1,000,000
2,000,000 Orange County Housing
Authority (Costa Mesa
Project) (FNMA) 3.25% 7-
01-98..................... 2,000,000
6,400,000 Orange County Sanitation
District (National
Westminster LOC) 3.30% 7-
01-98..................... 6,400,000
2,000,000 Orange County Water District
(National Westminster LOC)
3.55% 7-01-98............. 2,000,000
7,300,000 Palm Springs Community
Redevelopment Agency
(Citibank LOC) 3.25% 7-
01-98..................... 7,300,000
3,900,000 Puerto Rico Highway and
Transportation Authority
(AMBAC/Bank of Nova
Scotia) 3.00% 7-01-98..... 3,900,000
1,000,000 Sacramento County MFHA
Revenue Bonds (Grouse Run)
(Bank of America LOC)
3.05% 7-02-98............. 1,000,000
2,195,000 Sacramento County MFHA
Revenue Bonds (Smoketree)
(FNMA) 3.00% 7-01-98...... 2,195,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
- ---------- ----------- -----
<C> <S> <C>
$2,000,000 Sacramento Municipal
Utilities District
(Escrowed in U.S.
Government Securities)
7.875% 8-15-98............ $ 2,050,486
6,500,000 San Bernadino County
Certificates of
Participation (Canadian
Imperial Bank of Commerce
LOC) 3.15% 7-01-98........ 6,500,000
2,400,000 San Diego County TRANS
(Canadian Imperial Bank of
Commerce/Bank of Nova
Scotia LOC) 4.50% 9-
30-98..................... 2,404,056
2,000,000 San Diego County USD TRANS
4.50% 10-01-98............ 2,005,043
1,000,000 San Mateo County TRANS 4.50%
7-01-98................... 1,000,000
3,200,000 Santa Clara Electric Revenue
Bonds (National
Westminster LOC) 3.15% 7-
01-98..................... 3,200,000
Southern California MWD
(WestDeutsche Landesbank
LOC)
2,000,000 3.65% 7-13-98............... 2,000,000
2,000,000 3.50% 8-06-98............... 2,000,000
2,000,000 3.40% 9-02-98............... 2,000,000
1,000,000 Tulare County TRANS 4.25%
6-30-99................... 1,005,480
2,385,000 Vallejo Multi-Family
Mortgage Bonds (FNMA)
3.00% 7-01-98............. 2,385,000
------------
TOTAL INVESTMENTS -- 103.96%.............. 110,078,307(a)
Other Assets & Liabilities, (4,196,107)
Net -- (3.96)%..........................
------------
TOTAL NET ASSETS -- 100.0%................ $105,882,200
============
</TABLE>
See Notes to Financial Statements.
3
<PAGE> 4
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 1998 -- (CONTINUED)
(UNAUDITED)
Legend:
C.P. -- Commercial Paper
DWAP -- Department of Water & Power
EDA -- Economic Development Authority
IDA -- Industrial Development Authority
LOC -- Letter of Credit
MFHA -- Multifamily Housing Authority
MWD -- Metropolitan Water District
TRANS -- Tax and Revenue Anticipation Notes
USD -- Unified School District
Insurance Abbreviations:
AMBAC -- American Municipal Bond Assurance Corporation
FNMA -- Federal National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
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
<PAGE> 5
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments, at amortized cost......................... $110,078,307
Cash................................................... 245,049
Receivable for Fund shares sold........................ 1,288,489
Interest receivable.................................... 578,626
Prepaid expenses....................................... 922
------------
TOTAL ASSETS...................................... 112,191,393
------------
LIABILITIES
Payable for investments purchased...................... 6,045,330
Payable for Fund shares redeemed....................... 84,822
Dividends payable...................................... 121,829
Accrued expenses:
Investment adviser's fee............................ 39,882
Transfer agent and shareholder servicing fee........ 9,530
Trustees' fee....................................... 1,259
Other............................................... 6,541
------------
TOTAL LIABILITIES................................. 6,309,193
------------
NET ASSETS.................................................. $105,882,200
============
NET ASSETS CONSIST OF:
Capital paid in........................................ $105,879,992
Accumulated net realized gain.......................... 2,208
------------
$105,882,200
============
SHARES ISSUED AND OUTSTANDING (UNLIMITED SHARES
AUTHORIZED)................................................ 105,879,992
------------
NET ASSET VALUE PER SHARE................................... $ 1.00
============
</TABLE>
See Notes to Financial Statements.
5
<PAGE> 6
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INTEREST INCOME............................................. $1,869,071
--------
EXPENSES
Investment adviser's fee............................... 279,817
Transfer agent & shareholder services.................. 21,915
Custodian.............................................. 15,001
Compensation of Trustees............................... 5,705
Audit.................................................. 8,975
Legal.................................................. 8,555
Printing, postage and stationery....................... 10,195
Membership dues........................................ 1,681
Registration expense................................... 1,640
Insurance expense...................................... 1,761
Other.................................................. 363
--------
TOTAL EXPENSES BEFORE WAIVER........................... 355,608
LESS: FEES WAIVED BY ADVISER........................... (42,997)
--------
TOTAL EXPENSES......................................... 312,611
LESS: EXPENSE REDUCTIONS............................... (13,601)
--------
NET EXPENSES................................................ 299,010
--------
NET INVESTMENT INCOME....................................... 1,570,061
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $1,570,061
========
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 7
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1998* DECEMBER 31, 1997
-------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income................................... $ 1,570,061 $ 3,300,407
--------------- ---------------
Net increase in net assets resulting from operations.... 1,570,061 3,300,407
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS.................................. (1,570,061) (3,300,407)
--------------- ---------------
-- --
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
(At Net Asset Value of $1 per share)
Proceeds from sale of shares............................ 162,771,646 336,774,555
Net asset value of shares issued to shareholders in
reinvestment of dividends.............................. 1,425,706 3,231,270
Cost of shares redeemed................................. (173,043,701) (340,613,921)
--------------- ---------------
Net decrease from capital share transactions............ (8,846,349) (608,096)
--------------- ---------------
Net decrease in net assets.............................. (8,846,349) (608,096)
NET ASSETS:
Beginning of period..................................... 114,728,549 115,336,645
--------------- ---------------
End of period........................................... $ 105,882,200 $ 114,728,549
=============== ===============
DIVIDENDS TO SHAREHOLDERS PER SHARE......................... $ 0.0139 $ 0.0297
=============== ===============
</TABLE>
- ------------
*Unaudited.
See Notes to Financial Statements.
7
<PAGE> 8
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
<PAGE> 9
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
(A SERIES OF FREEDOM GROUP OF TAX EXEMPT FUNDS)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
The Fund has an agreement with the custodian bank under which $13,601 of
custodian fees have been reduced by balance credits applied during the period
ended June 30, 1998. If the Fund had not entered into this agreement, the assets
not invested, on which these balance credits were earned, could have produced
taxable income.
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"), Tucker
Anthony Incorporated ("Tucker Anthony") and Freedom Services Corp. All are
wholly owned subsidiaries of Freedom Securities Corporation ("Freedom
Securities").
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 period ended June 30, 1998 and may be discontinued at any time.
Sutro, Tucker Anthony and Freedom Distributors Corporation act as
distributors of the Fund's shares and receive no compensation for such services.
As sub-transfer agent, Freedom Services
9
<PAGE> 10
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
(A SERIES OF FREEDOM GROUP OF TAX EXEMPT FUNDS)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
Corporation received reimbursements of $8,837 for maintaining and servicing
certain shareholder accounts for the period ended June 30, 1998.
Effective as of June 16, 1998, Freedom Services Corporation succeeded John
Hancock Signature Services, Inc. as transfer and shareholder services agent for
the Fund.
NOTE 3. Purchases and sales (including maturities) of investments for the
period ended June 30, 1998 were as follows:
<TABLE>
<S> <C>
Purchases of investments......................... $164,650,980
Sales of investments............................. $168,445,000
</TABLE>
NOTE 4. CHANGE OF CONTROL TRANSACTION. On April 2, 1998, 7,400,000 shares
of common stock of Freedom Securities were sold to the public in an initial
public offering. As a consequence of this offering of stock, as well as an
acquisition by Freedom Securities and the implementation of certain incentive
and stock option plan, the previous controlling shareholder of Freedom
Securities, Thomas H. Lee Equity Fund II, L.P. (and certain related entity
shareholders), owns less than 25% of Freedom Securities stock. As a result of
the occurrence of these transactions, Thomas H. Lee Equity Fund II, L.P. may no
longer be deemed to control Freedom Securities and indirectly the Adviser.
Accordingly, on May 20, 1998, a Special Meeting of Shareholders of the Fund was
held to approve a new Advisory Agreement on behalf of the Fund.
10
<PAGE> 11
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>
RATIO OF NET
NET ASSET DIVIDENDS RATIO OF INVESTMENT
VALUE FROM NET ASSET NET ASSETS EXPENSES INCOME
BEGINNING NET NET VALUE END TO AVERAGE TO AVERAGE
OF INVESTMENT INVESTMENT END OF TOTAL OF PERIOD DAILY DAILY
PERIOD ENDED PERIOD INCOME(a) INCOME PERIOD RETURN** (THOUSANDS) NET ASSETS(a) NET ASSETS
------------ --------- ---------- ---------- --------- -------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998++...... $1.00 $0.0139 $(0.0139) $1.00 1.41% $105,882 0.53%+(b) 2.81%+(c)
December 31, 1997.... 1.00 0.0297 (0.0297) 1.00 3.02% 114,729 0.52% 2.97%
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%+
</TABLE>
- ------------
+ Annualized.
++ Unaudited.
(a) Net of fees waived by the Adviser which amounted to $.0004, $.0010, $.0011,
$.0015, $.0018, $.0020, $.0028, $.0033 and $.0042 per share, respectively.
(b) Ratio of expenses to average daily net assets prior to expense credits was
0.56% and 0.55% for the periods ended June 30, 1998 and December 31, 1997,
respectively.
(c) Ratio of net investment income to average daily net assets prior to expense
credits was 2.78% and 2.94% for the periods ended June 30, 1998 and
December 31, 1997, respectively.
* From commencement of operations, August 27, 1990.
** Total return would have been lower had the Adviser not waived fees and
without credits allowed by the custodian. Periods less than a year are not
annualized.
11
<PAGE> 12
NO SALES OR REDEMPTION CHARGES
DISTRIBUTOR
Sutro & Co. Incorporated
201 California Street
San Francisco, California 94111
Telephone Toll Free
800-453-8206
INVESTMENT ADVISER
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
TRANSFER AND SHAREHOLDER
SERVICES AGENT
Freedom Services Corporation
One World Financial Center
200 Liberty Street
New York, New York 10281
Telephone Toll Free
800-453-8206
[FREEDOM
GROUP OF MONEY FUNDS LOGO]
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.
--FREEDOM--
CALIFORNIA
[CALIFORNIA REPUBLIC LOGO]
TAX EXEMPT
MONEY FUND
SEMI-ANNUAL REPORT
JUNE 30, 1998
