<PAGE> 1
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[LOGO] TO OUR SHAREHOLDERS
[PHOTO]
Dexter A. Dodge
Chairman
Two themes have predominated in the fixed income markets in the first half of
this year. The first of these has been the ongoing tension between an economy
that has continued to grow apace and the increased resolve of the Federal
Reserve Bank's Open Market Committee (Fed) to slow the economy down. The second
has been the repercussions of the continuing budget surpluses being rung up in
the United States and their effect on the difference in yields between U.S.
Treasury securities and every other kind of security. Both of these themes have
been important to understanding the movement of the fixed income markets in the
first half of the year.
Starting in June of last year, the Federal Reserve began to increase short term
interest rates. As of this writing they have increased those rates by 1.75% in a
series of six interest rate moves. The reason for this change by the Fed has
been the continued strength in the economy. Indeed, in the first quarter of this
year, the economy appeared to be shrugging off any interest rate increases and
actually accelerating. Current estimates of gross domestic product (GDP) growth
in the first quarter show a growth of 5.4%. This rate actually understates the
real strength the economy showed. Aggregate demand, a favorite measure of the
Federal Reserve Board, rose even more quickly. Personal consumption expenditures
(PCE) rose by 7.5%, for example and business investment in equipment and
software rose by 26.6%. Faced with an economy that strong, the Fed raised rates
three times in 2000 for a total increase of 1.0%. An economy that seemed
unwilling to slow down despite these rate increases brought tremendous pressure
o n those securities that have some credit component to them. The result was a
widening, or "spread", of their yields over those offered by U.S. Treasury
securities. On the one hand, rates went up which hurt the current prices of all
long-term securities. On the other hand, the Federal Reserve seemed serious
which meant that the markets began to fear that they might overplay their hand,
sending the economy into recession. Bonds with a credit component, often called
"spread product", began to price in the risk of a recession.
Thankfully, the second quarter has provided some relief as the economy appears
to be slowing somewhat. Most forecasters now predict a second quarter GDP in the
range of 3.5%, with PCE slowing from 7.5% to 3.1% and business investment from
26.6% to 14%. Spread product has performed better through June.
The second theme has been the ongoing story of budget surpluses. In a perverse
sort of way these healthy surpluses also served to make spread product, and even
U.S. Government Agency debentures, suffer. Healthy surpluses mean both less new
issuance of U.S. Treasury debt and buybacks of currently outstanding securities.
As the supply of U.S. Treasury securities has dwindled those securities have
taken on a bit of scarcity value making them more dearly priced when compared to
non-Treasury securities.
<PAGE> 2
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[Photo]
Paul Marandett
Portfolio Manager
California Tax Exempt
Money Fund
With an election year upon us, and little agreement either within Congress or
between the Presidential candidates on what to do with the surpluses, it is
reasonable to expect that the scarcity value of U.S. Treasury securities will
continue. The Federal Reserve, meanwhile, is not likely to alter their bias at
this juncture. Until and unless there are more convincing signs of a slowing of
domestic economic growth, those two themes will remain predominate in the fixed
income markets.
The following comments by your portfolio manager detail the strategies used for
the Freedom California Tax Exempt Money Fund. As always, we appreciate the
opportunity to be of service to our investors, and we renew our commitment to
provide funds of high quality with service to match. Thank you.
Sincerely,
/s/ Dexter A. Dodge
------------------------
Dexter A. Dodge
Chairman
FINANCIAL REVIEW
FREEDOM CALIFORNIA TAX EXEMPT
MONEY FUND
Following the Federal Reserve's 100 basis point boost to short term interest
rates, tax exempt money market rates also rose approximately the same amount.
The first week in January saw rates at abnormally low
levels as fund managers unwound strategies implemented to ameliorate the Y2K
problems that never occurred. Short term tax exempt interest rates then settled
into a range of around 3.25% to 3.50% and followed the Federal Reserve's rate
hikes by ending the first half of this last year of the old millennium in a
range of 4.00% to 4.50%. Yields offered in the California market, however, are
markedly lower reflecting the continued supply/demand imbalance in the State's
tax exempt securities markets.
Yields offered by the Freedom California Tax Exempt Money Fund have remained
consistent with those of the average of California tax exempt money funds as
recorded by iMoneyNet, Inc. (formerly IBC Financial Data). Freedom's seven day
net yield was 3.54% at the June 26th reporting date. This rate compares
favorably with a net rate of 3.48% for the "average" California fund during the
same period. Those levels show an increase of 145 and 121 basis points,
respectively, since the end of January.
<PAGE> 3
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The short term yield curve (yields offered on securities maturing between 1 day
and 1 year) continues to remain comparatively flat. As a result we ended the
second quarter with a very short average maturity of 11 days for the Freedom
Fund, 35 days shorter than that of the "average" California fund. While we
expect this average maturity to lengthen somewhat as we replace maturing notes
in the portfolio, we will maintain our emphasis on liquidity until the shape of
the yield curve changes.
Going forward we don't foresee any significant changes in our investment
strategy. Moderate asset growth and a sharply reduced supply of short term
California securities coming into an already limited supply will continue to
depress interest rates for the foreseeable future. We will continue to be
aggressive in monitoring changes in the yield curve, spread relationships and
security selection in our efforts to provide shareholders with competitive
returns and to maintain the high quality standards we have set for the Freedom
California Tax Exempt Money Fund.
Sincerely,
/s/ Paul Marandett
-------------------------
Paul Marandett
Portfolio Manager
<PAGE> 4
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
<C> <S> <C>
MUNICIPAL SECURITIES -- 99.0%
$3,000,000 California C.P. 3.85%
8-09-00..................... $ 3,000,000
7,500,000 California EFA 4.30%
7-05-00..................... 7,500,000
California HFA
1,000,000 4.15% 7-03-00................. 1,000,000
2,000,000 4.25% 7-03-00................. 2,000,000
2,500,000 (MBIA/Morgan Guaranty) 4.25%
7-05-00..................... 2,500,000
California PCFA
2,300,000 3.90% 7-14-00................. 2,300,000
700,000 4.00% 7-14-00................. 700,000
5,000,000 (Bank of America LOC) 4.10%
7-03-00..................... 5,000,000
1,500,000 California Public Works
(Escrowed in U.S. Government
Securities) 6.25% 9-01-00... 1,536,357
4,000,000 California School Facilities
Financing Corp. (KBC LOC)
4.30% 7-06-00............... 4,000,000
California Statewide CDA
1,400,000 4.35% 7-05-00................. 1,400,000
770,000 (AMBAC/Chase) 4.00% 7-
03-00....................... 770,000
5,000,000 (MBIA/Bank of America) 4.00%
7-03-00..................... 5,000,000
2,000,000 Carlsbad Multi-Family Mortgage
Bonds (Bank of America LOC)
4.30% 7-05-00............... 2,000,000
2,150,000 Duarte Redevelopment Agency
(Bank of America LOC) 4.35%
7-06-00..................... 2,150,000
6,700,000 Elsinore Valley MWD (FGIC/
FGIC-SPI) 4.25% 7-05-00..... 6,700,000
4,700,000 Fremont MFHA (KBC LOC) 4.35%
7-06-00..................... 4,700,000
4,900,000 Fresno Housing Authority 4.30%
7-05-00..................... 4,900,000
3,000,000 Fresno TRANS (Bank of America
LOC) 5.00% 6-29-01.......... 3,020,760
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
<C> <S> <C>
$3,000,000 Golden Empire SFA (Canadian
Imperial Bank of Commerce
LOC) 4.25% 7-05-00.......... $ 3,000,000
Irvine Assessment District
Improvement Bonds
3,600,000 (Bayerische Hypo und
Vereinsbank LOC) 4.15% 7-
03-00....................... 3,600,000
3,200,000 (KBC LOC) 4.15% 7-03-00....... 3,200,000
2,600,000 (Bank of America LOC) 4.15%
7-03-00..................... 2,600,000
1,700,000 (Landesbank-Hessen LOC) 4.15%
7-03-00..................... 1,700,000
400,000 (Toronto Dominion LOC) 3.50%
7-03-00..................... 400,000
1,000,000 Long Beach Bond Finance
Authority (Banc One LOC)
4.30% 7-05-00............... 1,000,000
1,180,000 Los Angeles County IDA
(Northern Trust LOC) 4.65%
7-05-00..................... 1,180,000
6,000,000 Los Angeles County Pension
(AMBAC/Landesbank-Hessen)
4.30% 7-05-00............... 6,000,000
Los Angeles DWAP
4,000,000 4.25% 7-06-00................. 4,000,000
2,000,000 4.30% 7-06-00................. 2,000,000
2,000,000 (Bayerische Landesbank/ Bank
of America/Dexia CLF/ Morgan
Guaranty/ WestDeutsche
Landesbank) 3.75% 7-12-00... 2,000,000
1,200,000 (Bayerische Landesbank/ Bank
of America/Dexia CLF/ Morgan
Guaranty/ WestDeutsche
Landesbank) 4.25% 7-12-00... 1,200,000
3,480,000 Los Angeles USD (Commerzebank
LOC) 4.70% 7-05-00.......... 3,480,000
2,300,000 MWD of Southern California
(Bank of America LOC) 4.20%
7-06-00..................... 2,300,000
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 5
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 2000 -- (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
<C> <S> <C>
MUNICIPAL SECURITIES -- (CONTINUED)
$7,600,000 Oakland Joint Powers Financing
Authority (FSA/ Commerzbank)
4.25% 7-06-00............... $ 7,600,000
2,100,000 Orange County (Swiss Bank LOC)
4.65% 7-05-00............... 2,100,000
2,000,000 Orange County Housing
Authority (FNMA) 4.35% 7-
06-00....................... 2,000,000
4,800,000 Orange County Sanitation
District (National
Westminster LOC) 4.15% 7-
03-00....................... 4,800,000
1,400,000 Orange County Water District
(Bayerische Landesbank LOC)
4.00% 7-03-00............... 1,400,000
2,200,000 Pasadena Certificates of
Participation (Canadian
Imperial Bank of Commerce
LOC) 4.65% 7-05-00.......... 2,200,000
1,000,000 Puerto Rico Highway Revenue
Bonds (Escrowed in U.S.
Government Securities) 6.75%
7-01-00..................... 1,020,000
Sacramento County Municipal
Utility District (Bayerische
Landesbank/Morgan
Guaranty/West Deutche
Landesbank LOC's)
2,700,000 3.40% 7-07-00................. 2,700,000
3,000,000 3.75% 8-07-00................. 3,000,000
1,000,000 3.75% 8-18-00................. 1,000,000
7,600,000 San Bernardino County
Certificates of
Participation (Canadian
Imperial Bank of Commerce
LOC) 4.35% 7-05-00.......... 7,600,000
3,000,000 San Diego County C.P.
(Landesbank Hessen LOC)
3.875% 8-14-00.............. 3,000,000
2,915,000 Santa Clara Electric Revenue
Bonds (AMBAC/FNB Chicago)
3.30% 8-03-00............... 2,915,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
------ ----------- -----
<C> <S> <C>
$1,070,000 San Francisco Airport (Societe
Generale LOC) 3.85% 8-21-
00.......................... $ 1,070,000
San Francisco BART
1,000,000 (Morgan Guaranty LOC) 3.25%
7-11-00..................... 1,000,000
2,500,000 (Morgan Guaranty LOC) 3.70%
7-11-00..................... 2,500,000
3,000,000 (State Street LOC) 4.00% 9-
11-00....................... 3,000,000
2,000,000 (West Deutsche Landesbank/
Bayerische LOC's) 3.25% 7-
13-00....................... 2,000,000
2,000,000 (West Deutsche Landesbank/
Bayerische LOC's) 3.30% 7-
17-00....................... 2,000,000
1,200,000 San Leandro HFA (Bank of
America LOC) 4.30% 7-06-00.. 1,200,000
4,000,000 Southeast Resource Recovery
Facility Authority (State
Street/Morgan Guaranty
LOC's) 4.40% 7-05-00........ 4,000,000
Southern California MWD
4,300,000 (AMBAC/Barclays LOC) 4.30%
7-05-00..................... 4,300,000
1,100,000 (AMBAC/Morgan Guaranty LOC)
4.30% 7-05-00............... 1,100,000
------------
TOTAL INVESTMENTS -- 99.0%................. 161,342,117(a)
Other Assets & Liabilities, Net -- 1.0%.... 1,687,746
------------
TOTAL NET ASSETS -- 100.0%................. $163,029,863
============
</TABLE>
Legend:
BART-Bay Area Rapid Transit
CDA -- Community Development Authority
C.P. -- Commercial Paper
DWAP -- Department of Water & Power
EFA -- Educational Facilities Authority
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
LOC -- Letter of Credit
MFHA -- Multifamily Housing Authority
MWD -- Metropolitan Water District
See Notes to Financial Statements.
5
<PAGE> 6
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
INVESTMENTS AS OF JUNE 30, 2000 -- (CONTINUED)
(UNAUDITED)
PCFA -- Pollution Control Finance Authority
SFA -- School Finance Authority
TRANS -- Tax and Revenue Anticipation Notes
USD -- Unified School District
Insurance Abbreviations:
AMBAC -- American Municipal Bond Assurance Corporation
FNMA -- Federal National Mortgage Association
FGIC -- Financial Guaranty Insurance Corporation
FGIC -- SPI-Financial Guaranty Insurance Corporation-Securities Purchased Inc.
FSA -- Finanial Security Assurance Inc.
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.
6
<PAGE> 7
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments, at amortized cost........................... $161,342,117
Cash..................................................... 3,120,273
Receivable for Fund shares sold.......................... 1,435,950
Interest receivable...................................... 609,261
Prepaid expenses......................................... 747
------------
TOTAL ASSETS............................................. 166,508,348
------------
LIABILITIES
Payable for investments purchased........................ 3,020,760
Payable for Fund shares redeemed......................... 125,481
Dividends payable........................................ 234,812
Accrued expenses:
Investment adviser's fee............................. 59,865
Transfer agent and shareholder servicing fee......... 3,969
Trustees' fee........................................ 437
Other................................................ 33,161
------------
TOTAL LIABILITIES........................................ 3,478,485
------------
NET ASSETS.................................................. $163,029,863
============
NET ASSETS CONSIST OF:
Capital paid in.......................................... $163,030,442
Accumulated net realized gain............................ (579)
------------
$163,029,863
============
SHARES ISSUED AND OUTSTANDING
(UNLIMITED SHARES AUTHORIZED).............................. 163,027,655
------------
NET ASSET VALUE PER SHARE................................... $ 1.00
============
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 8
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
INTEREST INCOME............................................. $2,589,568
----------
EXPENSES
Investment adviser's fee................................. 386,448
Transfer agent & shareholder services.................... 25,940
Custodian................................................ 12,400
Compensation of Trustees................................. 5,010
Audit.................................................... 8,880
Legal.................................................... 7,520
Printing, postage and stationery......................... 17,360
Membership dues.......................................... 1,401
Registration expense..................................... 9,500
Insurance expense........................................ 1,205
Miscellaneous expense.................................... 911
----------
TOTAL EXPENSES BEFORE WAIVER............................. 476,575
LESS: FEES WAIVED BY ADVISER............................. (46,374)
----------
TOTAL EXPENSES........................................... 430,201
----------
LESS: EXPENSE REDUCTIONS................................. (6,260)
----------
NET EXPENSES................................................ 423,941
----------
NET INVESTMENT INCOME....................................... 2,165,627
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $2,165,627
==========
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 9
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2000* DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income.................................... $ 2,165,627 $ 3,215,436
------------- -------------
Net increase in net assets resulting from operations..... 2,165,627 3,215,436
------------- -------------
DIVIDENDS TO SHAREHOLDERS................................... (2,165,627) (3,215,436)
------------- -------------
-- --
------------- -------------
CAPITAL SHARE TRANSACTIONS:
(At Net Asset Value of $1 per share)
Proceeds from sale of shares............................. 308,950,951 495,007,815
Net asset value of shares issued to shareholders in
reinvestment of dividends.............................. 1,896,816 3,137,439
Cost of shares redeemed.................................. (293,733,249) (476,035,093)
------------- -------------
Net increase from capital share transactions......... 17,114,518 22,110,161
------------- -------------
Net increase in net assets............................... 17,114,518 22,110,161
NET ASSETS:
Beginning of period...................................... 145,915,345 123,805,184
------------- -------------
End of period............................................ $ 163,029,863 $ 145,915,345
============= =============
</TABLE>
------------
<TABLE>
<S> <C>
* Unaudited.
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 10
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 accounting principles generally accepted in the United States.
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
10
<PAGE> 11
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
(A SERIES OF FREEDOM GROUP OF TAX EXEMPT FUNDS)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
committed to provide additional funds of up to 300% of its initial annual
premium if and when called upon.
The Fund has an agreement with the custodian bank under which $6,260 of
custodian fees have been reduced by balance credits applied during the six
months ended June 30, 2000. 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.
As of December 31, 1999 the Fund had a $579 capital loss carryforward which
will expire on December 31, 2002.
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 Tucker Anthony Sutro (formerly Freedom Securities
Corporation).
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.
11
<PAGE> 12
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
(A SERIES OF FREEDOM GROUP OF TAX EXEMPT FUNDS)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
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, 2000 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 transfer agent, Freedom Services Corporation received reimbursements of
$25,940 for maintaining and servicing shareholder accounts for the six months
ended June 30, 2000.
NOTE 3. Purchases and sales (including maturities) of investments for the
six months ended June 30, 2000 were as follows:
<TABLE>
<S> <C>
Purchases of investments............................. $265,072,060
Sales of investments................................. $246,827,000
</TABLE>
12
<PAGE> 13
FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND
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 ASSET DIVIDENDS NET ASSET NET ASSETS EXPENSES
VALUE NET FROM NET VALUE END OF TO AVERAGE
BEGINNING INVESTMENT INVESTMENT END OF TOTAL PERIOD DAILY
PERIOD ENDED OF PERIOD INCOME(A) INCOME PERIOD RETURN** (THOUSANDS) NET ASSETS(A)
------------ --------- ---------- ---------- --------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
June 30, 2000++............. $1.00 $0.0139 $(0.0139) $1.00 1.39% $163,030 0.56%(b)+
December 31, 1999........... 1.00 0.0240 (0.0240) 1.00 2.42% 145,915 0.58%(b)
December 31, 1998........... 1.00 0.0260 (0.0260) 1.00 2.64% 123,805 0.55%(b)
December 31, 1997........... 1.00 0.0297 (0.0297) 1.00 3.02% 114,729 0.55%(b)
December 31, 1996........... 1.00 0.0286 (0.0286) 1.00 2.90% 115,337 0.46%
December 31, 1995........... 1.00 0.0325 (0.0325) 1.00 3.29% 85,204 0.47%
<CAPTION>
RATIO OF NET
INVESTMENT
INCOME TO
AVERAGE DAILY
PERIOD ENDED NET ASSETS
------------ -------------
<S> <C>
June 30, 2000++............. 2.79%(c)+
December 31, 1999........... 2.38%(c)
December 31, 1998........... 2.58%(c)
December 31, 1997........... 2.94%(c)
December 31, 1996........... 2.86%
December 31, 1995........... 3.25%
</TABLE>
------------
<TABLE>
<S> <C>
+ Annualized.
++ Unaudited.
(a) Net of fees waived by the Adviser which amounted to $.0006,
$.0006, $.0007, $.0010, $.0015, and $.0018 per share,
respectively.
(b) Ratio of expenses to average daily net assets after expense
credits was 0.55%, 0.56%, 0.53% and 0.52% for the six months
ended June 30, 2000 and for the years ended December 31,
1999, December 31, 1998 and December 31, 1997, respectively.
(c) Ratio of net investment income to average daily net assets
after expense credits was 2.79%, 2.40%, 2.60% and 2.97% for
the six months ended June 30, 2000 and for the years ended
December 31, 1999, December 31, 1998 and December 31, 1997,
respectively.
** Total return would have been lower had the Adviser not
waived fees and had the custodian not allowed credits.
</TABLE>
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NO SALES OR REDEMPTION CHARGES
DISTRIBUTOR
Sutro & Co. Incorporated
201 California Street
San Francisco, California 94111
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
[FLAG LOGO]FREEDOM
FAMILY OF MUTUAL 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 0600
[FREEDOM CALIFORNIA TAX EXEMPT MONEY FUND LOGO]
SEMI-ANNUAL REPORT
JUNE 30, 2000
