<PAGE> 1
PROVIDENT
- -------------------------------------------------------------------------------
INSTITUTIONAL 400 Bellevue Parkway, Wilmington, DE 19809
FUNDS Phone: 302-792-2555 Fax: 302-792-5876
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
March 4, 1996
Dear Shareholder:
We are pleased to present the Annual Report to Shareholders of Municipal
Fund for California Investors, Inc. for the year ended January 31, 1996.
The accompanying Investment Adviser's Report presents interesting comments
on the economic situation in California which, while troublesome, seems to be
improving. The Advisers also discuss the municipal market generally.
Provident Institutional Funds offers a broad range of high quality Taxable
and Tax-Exempt Money Market and Fixed Income Funds to meet the varied needs of
our investors. Please feel free to contact your Provident Distributors, Inc.
account representative or our Client Service Center at (800) 821-7432 to discuss
your investment options. We welcome the opportunity to serve you.
Sincerely,
/s/ G. WILLING PEPPER
---------------------
G. Willing Pepper
Chairman
<PAGE> 2
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
ANNUAL INVESTMENT ADVISER'S REPORT
California's economy moved from recovery to expansion in 1995. After nearly
five years, the State rebounded to its 1990 peak level of employment of 12.6
million jobs. The State's job market grew by 3.1% last year, more than doubling
the overall U.S. rate of 1.5%. The industries that led the expansion included
international trade, computers and technology, and entertainment. The State's
unemployment rate declined last year, but is still significantly higher than the
overall U.S. rate. The California unemployment rate in January 1996 was 7.7%,
down from 8.2% in January 1995, but well above the U.S. unemployment rate of
5.8%. Over the last four years, the higher than average unemployment rate led to
consistent increases in net job migration to other western states; however, in
1995, the rate did begin to decelerate.
The Governor's proposed 1996-97 budget projects a third consecutive year of
surplus operations, but the general fund reserve will be less than 1% of annual
expenses. The latest budget estimates also indicate that the State will have no
short-term debt outstanding on June 30, 1996, after retiring $2 billion in
short-term issuance planned for April 1996. The Governor's budget projects $3.2
billion in short-term debt issuance in 1996-97. The 1996-97 budget also proposes
long-term debt issuance of $7 billion for new prisons, water projects and
education facilities. Expected acceleration in future funding requirements for
K-12 schools, combined with the Governor's proposed 15% reduction in personal
and corporate taxes over the next three years, could make future financial
balance difficult, unless economic activity continues to grow.
The news on California rating changes in 1995 indicates that, despite the
improvement in the State's economy, the structural problems that exist continue
to be troublesome. S&P had 73 downgrades and 23 upgrades, with volume of $13.9
billion down and $664 million up. There were 34 downgrades attributable to three
counties--Los Angeles, Riverside and Alameda. Los Angeles County continues to
have fiscal problems related to social service and health care expenses.
Riverside and Alameda Counties had weakened financials as a result of the shift
in property tax revenues from counties to school districts.
Orange County continues its efforts to structure a bond issue to repay
certain short-term obligations which were originally scheduled to mature in the
summer of 1995, but which were extended to June 1996. The key will be to fashion
a reliable revenue flow dedicated to the payment of debt service on such
repayment debt. Cooperation among the County, the bankruptcy court, the
investment pool participants and Sacramento is essential to the completion of a
successful financing.
The big municipal story early in 1995 was Orange County's bankruptcy. As
the year progressed, other events such as the credit quality deterioration of
Japanese banks and the debate over flat tax proposals overshadowed Orange County
in the municipal market. In this type of environment, the Fund pursued
conservative investment strategies, including the avoidance of all Orange County
securities and the purchase of California notes only if accompanied by credit
enhancements, such as letters of credit or insurance. In addition, our credit
research staff monitored the Japanese banks very closely and imposed
restrictions on investments in a select group of banks, to maturities of 30 days
and less.
The Federal Reserve eased monetary policy last year, as evidenced by three
reductions in the federal funds rate. As a result, the investment strategy of
the CalMoney Fund was to prudently extend maturities in an effort to lock in
attractive yields before further declines in rates, by buying tax-exempt
commercial paper and California-exempt notes.
Total municipal issuance volume totaled over $190 billion during 1995. The
volume of short-term tax-free obligations was $37.3 billion, which was down $2.5
billion from 1994. California represented $6.3 billion in new issuance, or 16.9%
of all short-term issuance, and only $1.55 billion California notes
2
<PAGE> 3
were enhanced with letters of credit or insurance. The two largest issues were
Los Angeles County and San Bernardino County TRANS which CalMoney purchased
selectively during the year.
Given the fiscal pressures which continue to impact California, the careful
selection of high quality securities will remain a primary objective in the
management of the Fund's two portfolios. On January 31, 1996, the California
Intermediate Municipal Fund had net assets of $14.9 million and CalMoney stood
at $421 million.
CalMoney ranked #7 among 48 California tax-exempt money market funds,
according to Lipper Analytical Serivces, Inc. for the year ended January 31,
1996.
The current strategy in the California Intermediate Municipal Fund is to
increase the current coupon and yield by purchasing additional high coupon
pre-refunded bonds. This would modestly increase the average maturity without
subjecting the Fund to undue risk during periods of market uncertainty. The Fund
continues to emphasize higher quality issues. Currently, 90% of the Fund's
assets are rated AA or higher.
PNC INSTITUTIONAL MANAGEMENT CORPORATION
March 1, 1996
3
<PAGE> 4
CALIFORNIA INTERMEDIATE MUNICIPAL FUND PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN CALIFORNIA INTERMEDIATE
MUNICIPAL FUND AND THE LEHMAN BROTHERS 5-YEAR BOND INDEX
(FOR EACH YEAR ENDED JANUARY 31)
<TABLE>
<CAPTION>
CALIFORNIA LEHMAN
INTERMEDIATE BROTHERS 5-
MEASUREMENT PERIOD MUNICIPAL YEAR BOND
(FISCAL YEAR COVERED) FUND INDEX
<S> <C> <C>
9/1/88 10000 10000
1989 10282 10335
1990 10971 11112
1991 12063 12140
1992 13124 13377
1993 14131 14526
1994 15438 15746
1995 15050 15596
1996 16760 17371
</TABLE>
4
<PAGE> 5
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statement of Net Assets
January 31, 1996
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ---------------------------------- ------- -----------
<S> <C> <C>
CALIFORNIA -- 96.04%
Bay Area Government Association
(Lease Revenue Pooled Projects)
Series 1987 DN (National
Westminster LOC) (VMIG-1)**
2.90%..................02/07/96 $ 6,527 $ 6,527,000
California Department of Water
Resources (Central Valley
Project) RB Series N-V2 DN
(Canadian Imperial Bank LOC)
(A-1+, VMIG-1)**
3.10%..................02/07/96 6,200 6,200,000
California Educational
Facilities Financing Authority
(Occidental College Project)
Series 1985B MB (Morgan
Guaranty LOC) (VMIG-1)
3.55%..................06/01/96 9,800 9,800,000
California Health Facilities
Financing Authority (Adventist
Health System West-Sutter
Health) Series 1991B DN
(Toronto Dominion LOC) (A-1+,
VMIG-1)**
2.80%..................02/07/96 2,500 2,500,000
California Health Facilities
Financing Authority (Catholic
Healthcare West) Series 1988A
DN (MBIA Insurance) (A-1+,
VMIG-1)**
2.85%..................02/07/96 4,800 4,800,000
California Health Facilities
Financing Authority (Catholic
Healthcare West) Series 1988B
DN (MBIA Insurance) (A-1+,
VMIG-1)**
2.85%..................02/07/96 1,000 1,000,000
California Health Facilities
Financing Authority (Catholic
Healthcare West) Series 1988C
DN (MBIA Insurance) (A-1+,
VMIG-1)**
2.85%..................02/07/96 4,600 4,600,000
California Health Facilities
Financing Authority (Huntington
Memorial Hospital) DN (Morgan
Guaranty LOC) (A-1+)**
2.80%..................02/07/96 3,700 3,700,000
California Health Facilities
Financing Authority (Pooled
Loan Program) Series 1985B DN
(Morgan Guaranty LOC) (A-1+,
VMIG-1)**
2.90%..................02/07/96 6,000 6,000,000
California Health Facilities
Financing Authority (Pooled
Loan Program) Series 1987A DN
(Sanwa Bank LOC) (VMIG-1)**
3.00%..................02/07/96 5,600 5,600,000
California Health Facilities
Financing Authority (Scripps
Memorial Hospital) Series 1985B
DN (MBIA Insurance) (A-1+,
VMIG-1)**
3.00%..................02/07/96 6,500 6,500,000
California Health Facilities
Financing Authority (St.
Francis Hospital) DN (MBIA
Insurance) (A-1+, VMIG-1)**
2.85%..................02/07/96 5,000 5,000,000
California Pollution Control
Financing Authority (Pacific
Gas & Electric) Series 1988C
(Credit Suisse LOC) (A-1+, P-1)
3.15%..................02/08/96 2,705 2,705,000
3.65%..................02/09/96 6,000 6,000,000
3.25%..................03/15/96 8,600 8,600,000
California Pollution Control
Financing Authority DN (Societe
Generale LOC) (A-1+, VMIG-1)**
2.60%..................02/15/96 3,100 3,100,000
California Pollution Control
Financing Authority PCRB
(Chevron Incorporated Project)
RB
4.00%..................11/15/96 2,720 2,726,228
California Pollution Control
Financing Authority PCRB
(Pacific Gas & Electric) Series
D (Bank of Tokyo LOC) (P-1)
3.10%..................02/07/96 1,200 1,200,000
California Pollution Control
Financing Authority PCRB (San
Diego Gas & Electric) Series
1984 TECP (VMIG-1)
4.00%..................09/01/96 6,500 6,500,000
California Statewide Communities
Development Authority
Certificates of Participation
(Covenant Retirement
Communities, Inc.) DN (ABN-AMRO
Bank N.V. LOC) (A-1+)**
3.25%..................02/07/96 8,000 8,000,000
California Statewide Communities
Development Authority
Certificates of Participation
(St. Joseph Health System) DN
(A-1+, VMIG-1)**
2.80%..................02/07/96 12,300 12,300,000
</TABLE>
5
<PAGE> 6
CALIFORNIA MONEY FUND
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ---------------------------------- ------- ------------
<S> <C> <C>
California Statewide Communities
Development Authority Series
1995A-2 DN (Federal National
Mortgage Association LOC)
(A-1+)**
2.80%..................02/07/96 $ 2,530 $ 2,530,000
California Statewide Communities
Development Authority Series
1995A-5 DN (Federal National
Mortgage Association LOC)
(A-1+)**
2.85%..................02/07/96 11,100 11,100,000
California Water Management
Certificates of Participation
(Monterey Peninsula Wastewater
Reclamation Project) DN
(Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.40%..................02/07/96 9,200 9,200,000
City of Stockton IDRB (La Quinta
Motor Inns) DN (NationsBank
LOC) (A-1)**
3.35%..................02/07/96 2,390 2,390,000
Contra Costa Multifamily Housing
Revenue Bonds (Riverside
Apartments) Series 1992B DN
(Federal National Mortgage
Association LOC) (A-1+)**
3.15%..................02/07/96 4,000 4,000,000
Corona Multifamily Housing
Revenue Refunding Bonds
(Country Hills Apartment
Project) Series 1995A DN (Bank
of America LOC) (A-1)**
2.95%..................02/07/96 7,045 7,045,000
Eastern Municipal Water District
Facilities Corporation
(Riverside County) Certificates
of Participation DN (FGIC
Insurance) (A-1+, VMG-1)**
2.90%..................02/07/96 900 900,000
Fremont Multifamily Housing
Bonds (Creekside Village
Apartments) Series D DN (Fuji
Bank LOC) (VMIG-1)**
3.80%..................02/07/96 1,000 1,000,000
Fremont Multifamily Housing
Bonds (Mission Wells Project)
Series 1985E DN (Industrial
Bank of Japan LOC)
(A-1+, VMIG-1)**
3.40%..................02/07/96 5,100 5,100,000
Golden Empire Schools Financing
Authority (Kern High School
District Project) Series B DN
(National Westminster LOC)
(A-1+)**
2.95%..................02/07/96 4,900 4,900,000
Kern County Certificates of
Participation (Kern Public
Facilities Project) Series A DN
(Sanwa Bank LOC) (VMIG-1)**
2.85%..................02/07/96 3,700 3,700,000
Kern County Certificates of
Participation (Kern Public
Facilities Project) Series D DN
(Sanwa Bank LOC) (VMIG-1)**
2.85%..................02/07/96 2,400 2,400,000
Los Angeles County Housing
Authority (Malibu Meadows
Project) Series A DN
(Sumitomo Bank LOC) (A-1)**
3.35%..................02/07/96 14,511 14,511,000
Los Angeles County Housing
Authority (Malibu Woods
Project) Series B DN (Sumitomo
Bank LOC) (A-1)**
3.35%..................02/07/96 7,929 7,929,000
Los Angeles County Metropolitan
Transportation Authority
General Revenue Bonds (Union
Gateway Project) Series 1985A
DN (Societe Generale LOC)
(VMIG-1)**
2.95%..................02/07/96 8,200 8,200,000
Los Angeles County Metropolitan
Transportation Authority Second
Subordinate Sales Tax Revenue
Notes Series A DN (Industrial
Bank of Japan LOC) (A-1+)**
2.90%..................02/07/96 3,600 3,600,000
Los Angeles County Multifamily
Mortgage Revenue Bonds Series
1984B DN (Citibank LOC) (A-1,
VMIG-1)**
3.91%..................02/07/96 3,700 3,700,000
Los Angeles County TRAN (Bank of
America LOC) (SP-1, MIG-1)
4.50%..................07/01/96 22,210 22,271,344
Los Angeles County
Transportation Commission Sales
Tax Revenue Refunding Bonds
Series 1992 DN (FGIC Insurance)
(A-1+, VMIG-1)**
2.75%..................02/07/96 4,400 4,400,000
</TABLE>
6
<PAGE> 7
CALIFORNIA MONEY FUND
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ---------------------------------- ------- ------------
<S> <C> <C>
Metropolitan Water District of
Southern California (Revolving
Credit Agreement With
Westdeutsche Landesbank
Girozentrale) Series B (A-1+,
P-1)
3.10%..................03/15/96 $ 4,200 $ 4,200,000
Oakland Certificates of
Participation (Capital
Improvement Project) DN
(Mitsubishi Bank LOC) (A-1+,
VMIG-1)**
3.30%..................02/07/96 25,600 25,600,000
Oakland Economic Development
Revenue Bonds (Leamington
Project) Series 1994A DN (First
Interstate LOC) (A-1)**
3.00%..................02/07/96 4,300 4,300,000
Pasadena Certificates of
Participation (Rose Bowl
Improvements) DN (Industrial
Bank of Japan LOC) (A-1,
VMIG-1)**
3.10%..................02/07/96 6,600 6,600,000
Redlands City Multifamily
Revenue Refunding Bonds
(Parkview Terrace Project)
Series 1991A DN (Bank of
America LOC) (VMIG-1)**
2.95%..................02/07/96 3,600 3,600,000
Riverside County Certificates of
Participation (Riverside County
Public Facility) Series 1985A
DN (Sanwa Bank LOC) (A-1+,
VMIG-1)**
2.80%..................02/07/96 3,000 3,000,000
Riverside County Certificates of
Participation (Riverside County
Public Facility) Series 1985B
DN (Sanwa Bank LOC) (A-1+,
VMIG-1)**
2.85%..................02/07/96 9,300 9,300,000
Riverside County Certificates of
Participation (Riverside County
Public Facility) Series 1985C
DN (Sanwa Bank LOC) (A-1+,
VMIG-1)**
2.85%..................02/07/96 5,600 5,600,000
Riverside County Multifamily
Housing Bonds (Sierra Pines
Apartments Project) Series
1991A DN (Swiss Bank LOC)
(A-1+)**
3.05%..................02/07/96 4,715 4,715,000
Sacramento County (Courthouse
Project -- Administration
Center) DN (Union Bank of
Switzerland LOC) (A-1+,
VMIG-1)**
2.85%..................02/07/96 8,900 8,900,000
Sacramento Municipal Utility
District Series I TECP
(Bayerische LB Girozentrale
LOC) (A-1+, P-1)
3.10%..................02/08/96 1,100 1,100,000
3.50%..................02/22/96 5,000 5,000,000
San Bernardino County TRAN
(Toronto Dominion LOC) (SP-1+)
4.50%..................07/05/96 11,000 11,024,903
San Diego Multifamily Housing
Bonds (Las Flores Project)
Series 1991A DN (Swiss Bank
LOC) (A-1+)**
2.95%..................02/07/96 8,200 8,200,000
San Francisco City & County
Housing Authority Multifamily
Housing Revenue Bonds
(Winterland Project) Series
1985C DN (Citibank LOC) (A-1,
VMIG-1)**
3.05%..................02/07/96 1,200 1,200,000
San Francisco City & County
Redevelopment Agency
Multifamily Housing Revenue
Bonds (Bayside Village Project)
Series B DN (Industrial Bank of
Japan LOC) (A-1+, VMIG-1)**
3.25%..................02/07/96 6,500 6,500,000
San Francisco City & County
Redevelopment Agency
Multifamily Housing Revenue
Bonds (South Harbor Project) DN
(VMIG-1)**
2.975%.................02/07/96 14,200 14,200,000
San Jose & Santa Clara Water
Financing Authority Sewer
Revenue Bonds Series B DN (FGIC
Insurance) (VMIG-1, A-1+)**
2.75%..................02/07/96 3,800 3,800,000
San Jose Multifamily Housing
Bonds DN (FGIC Insurance)
(VMIG-1)**
3.10%..................02/07/96 4,980 4,980,000
San Juan-Modesto-Santa Clara-
Redding Public Power Agency
(San Juan Project) Subordinate
Lien Revenue Bonds Series B DN
(AMBAC Insurance) (A-1+,
VMIG-1)**
2.90%..................02/07/96 2,000 2,000,000
</TABLE>
7
<PAGE> 8
CALIFORNIA MONEY FUND
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ---------------------------------- ------- -----------
<S> <C> <C>
Santa Clara Multifamily Housing
Bonds (Fox Chase Project) DN
(FGIC Insurance) (A-1+,
VMIG-1)**
3.10%..................02/07/96 $ 1,600 $ 1,600,000
Southeast California Lease
Revenue Refunding Bonds
(Resource Recovery Facility
Authority) DN (Industrial Bank
of Japan LOC) (A-1, VMIG-1)**
3.30%..................02/07/96 19,600 19,600,000
Triunfo Sanitation District
Revenue Bonds DN (Banque
Nationale de Paris LOC)
(A-1+)**
3.10%..................02/07/96 2,400 2,400,000
Vista Multifamily Housing Bonds
(Shadow Ridge Apartment
Project) DN (Swiss Bank LOC)
(A-1+)**
3.05%..................02/07/96 2,600 2,600,000
Washington Township Hospital
District (Alameda County) DN
(Industrial Bank of Japan LOC)
(VMIG-1)**
3.40%..................02/07/96 12,100 12,100,000
-----------
404,354,475
-----------
PUERTO RICO -- 3.75%
Puerto Rico Government
Development Bank TECP (A-1+,
P-1)
3.65%..................02/01/96 10,000 10,000,000
3.30%..................03/15/96 4,200 4,200,000
Puerto Rico Highway &
Transportation Authority
Highway Revenue Bonds Series X
DN (Landesbank Hessen-Thuringen
LOC) (A-1+, VMIG-1)**
2.80%..................02/07/96 1,000 1,000,000
Puerto Rico Industrial Medical
Higher Education and
Environmental Pollution Control
Facility Authority (Ana G.
Mendez Education Foundation
Project) DN (Bank of Tokyo LOC)
(A-1+)**
3.20%..................02/07/96 600 600,000
-----------
15,800,000
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
------------
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $420,154,475*)........... 99.79% $420,154,475
OTHER ASSETS IN EXCESS OF
LIABILITIES.................... 0.21 891,488
--- ------------
NET ASSETS (Equivalent to $1.00
per share based on 390,018,431
California Money and 31,165,272
California Dollar Shares
outstanding)................... 100.00% $421,045,963
====== ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($421,045,963 / 421,183,703)........... $1.00
=====
</TABLE>
- -------------
* Aggregate cost for federal income tax purposes is
$420,154,475.
** Variable rate demand notes -- the interest rate shown
is as of January 31, 1996, and the maturity date shown
is the longer of (i) the next interest readjustment
date or (ii) the date on which the principal amount
owed can be recovered through demand.
The Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group ratings are believed to be the
most recent ratings available at January 31, 1996. The
ratings have not been verified by the Independent
Accountants and, therefore, are not covered by the
Report of the Independent Accountants.
- ---------------------------------------------------------
CALIFORNIA MONEY FUND
SUPPLEMENTARY INFORMATION
Maturity Schedule of Portfolio
January 31, 1996
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1-30 Days..... $350,832,000 83.5%
31-60 Days.... 17,000,000 4.1%
121-150 Days.. 9,800,000 2.3%
Over 150
Days.......... 42,430,000 10.1%
</TABLE>
Average Weighted Maturity of Portfolio -- 28 days
- ---------------------------------------------------------
See accompanying notes to financial statements.
8
<PAGE> 9
CALIFORNIA INTERMEDIATE MUNICIPAL FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statement of Net Assets
January 31, 1996
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- ---------------------------------- ------- -----------
<S> <C> <C>
CALIFORNIA -- 94.99%
California Department of Water
Resources (Central Valley
Project) Series I (Pre-Refunded
06/01/00 @101.50) RB (Aaa)
6.60%..................12/01/19 $ 400 $ 447,000
California Education Authority
(Pepperdine University) RB
(MBIA Insurance) (Aaa)
6.80%..................11/01/00 500 557,500
California Education Authority
(Stanford University) RB (Aaa)
5.50%..................11/01/00 800 858,000
California Health Facilities
Financing Authority
(Cedars-Sinai Hospital) Series
1990 RB (Aa)
6.50%..................11/01/00 600 646,500
California Pollution Control
Financing Authority (Southern
California Edison Company)
Series 1986C DN (A-1)**
3.70%..................02/01/96 300 300,000
City of Sacramento Financing
Authority (Pre-Refunded
11/01/01 @ 102) RB (Aaa)
6.70%..................11/01/11 500 575,000
East Bay Municipal Utility
District RB (AMBAC Insurance)
(Aaa)
7.00%..................06/01/00 800 896,000
Elk Grove Unified School
District (Pre-Refunded 12/01/98
@ 103) RB (FGIC Insurance)
(Aaa)
9.00%..................12/01/07 700 815,500
Los Angeles County Public Works
RB (Aa1)
4.70%..................03/01/03 1,000 1,001,250
Los Angeles County
Transportation Commission Sales
Tax Revenue Series A
(Pre-Refunded 07/01/98 @ 102)
RB (Aaa)
8.00%..................07/01/18 800 891,000
Los Angeles Department of Water
and Power (Electric Plant) RB
(Aa)
9.00%..................02/01/01 500 606,250
Los Angeles Department of Water
and Power (Electric Plant)
Series 1990 RB (Aa)
6.75%..................05/15/99 500 541,875
Northern California Power Agency
Public Power Revenue Refunding
(Geothermal Project No. 3)
Series B RB (AMBAC Insurance)
(Aaa)
5.50%..................07/01/00 600 630,750
Sacramento Special Tax Refunding
Bonds (Laguna Community
Facilities District) RB (FGIC
Insurance) (Aaa)
5.40%..................12/01/01 640 679,200
San Francisco Bay Area Rapid
Transit District Sales Tax RB
(A1)
6.60%..................07/01/99 600 648,000
San Francisco Various Purpose
Unlimited Tax GO Series A RB
(Aa)
6.20%..................12/15/99 700 756,875
Southern California Public Power
Authority (Joint Power Project)
RB (A)
6.75%..................07/01/00 600 660,750
Southern California Public Power
Authority (Refunding Project)
Series A RB (Aaa)
6.00%..................07/01/00 500 541,250
State of California GO (Aa)
4.10%..................09/01/01 1,000 995,000
State of California Public Works
Board (Regents of The
University of California)
Series 1990A (Pre-Refunded
12/01/02 @ 102) RB (Aaa)
6.60%..................12/01/22 500 579,375
West Sacramento Redevelopment
Agency RB (MBIA Insurance)
(Aaa)
6.25%..................09/01/01 500 550,625
-----------
14,177,700
-----------
PUERTO RICO -- 3.92%
Puerto Rico Public Building
Authority (Public Education &
Health Facility) Series L
(Pre-Refunded 07/01/02 @
101.50) RB (Aaa)
6.875%.................07/01/21 500 585,000
-----------
VIRGIN ISLANDS -- 3.84%
Virgin Islands Public Finance
Authority (Pre-Refunded
10/01/00 @ 101) RB (Aaa)
7.25%..................10/01/07 500 573,750
-----------
</TABLE>
9
<PAGE> 10
CALIFORNIA INTERMEDIATE MUNICIPAL FUND
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
VALUE
-----------
<S> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $14,693,051*)............. 102.75% $15,336,450
LIABILITIES IN EXCESS OF
OTHER ASSETS.................... (2.75) (410,496)
----- ------------
NET ASSETS (Equivalent to $10.58
per share based on 1,410,308
California Intermuni shares
outstanding).................... 100.00% $14,925,954
====== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($14,925,954 / 1,410,308)............... $10.58
======
- -------------
* Aggregate cost for federal income tax purposes is
$14,693,051. Net unrealized appreciation for all
securities is as follows:
Excess of value over tax cost.......... $654,960
Excess of tax cost over value.......... (11,561)
--------
$643,399
========
</TABLE>
** Variable rate demand notes -- the interest rate shown
is as of January 31, 1996, and the maturity date shown
is the longer of (i) the next interest readjustment
date or (ii) the date on which the principal amount
owed can be recovered through demand.
The Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group ratings are believed to be the
most recent ratings available at January 31, 1996. The
ratings have not been verified by the Independent
Accountants and, therefore, are not covered by the
Report of the Independent Accountants.
---------------------------------------------------------
CALIFORNIA INTERMEDIATE
MUNICIPAL FUND
SUPPLEMENTARY INFORMATION
January 31, 1996
Average Weighted Maturity of Portfolio -- 4.67 years
- ---------------------------------------------------------
INVESTMENT ABBREVIATIONS:
DN Demand Notes (Variable Rate)
GO General Obligation
LOC Letter of Credit
MB Municipal Bonds
PCRB Pollution Control Revenue Bond
RB Revenue Bonds
TECP Tax-Exempt Commercial Paper
TRAN Tax and Revenue Anticipation Notes
See accompanying notes to financial statements.
10
<PAGE> 11
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statements of Operations
Year Ended January 31, 1996
<TABLE>
<CAPTION>
CALIFORNIA CALIFORNIA
MONEY INTERMEDIATE
FUND MUNICIPAL FUND
----------- --------------
<S> <C> <C>
Investment income:
Interest.................................................. $15,918,912 $ 805,813
----------- ----------
Expenses:
Investment advisory fee................................... 848,458 31,177
Administration fee........................................ 848,458 31,177
Service Organization fees:
Dollar shares.......................................... 59,647 --
Custodian fees............................................ 106,217 4,746
Legal fees................................................ 40,500 1,170
Transfer agent fees....................................... 45,000 1,980
Audit fees................................................ 55,650 2,035
Directors' and Officer's fees and expenses................ 40,300 1,240
Registration and filing fees.............................. 6,000 --
Printing.................................................. 16,650 2,275
Other..................................................... 30,073 5,486
----------- ----------
2,096,953 81,286
Fees waived by Investment Adviser and Administrators...... (1,188,580) (50,110)
----------- ----------
Total expenses......................................... 908,373 31,176
----------- ----------
Net investment income................................ 15,010,539 774,637
----------- ----------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on investments sold.............. (1,064) 122,647
Increase in unrealized appreciation of investments........ -- 819,650
Increase in amortized market discount..................... -- 111
----------- ----------
Net gain (loss) on investments......................... (1,064) 942,408
----------- ----------
Net increase in net assets resulting from operations........ $15,009,475 $1,717,045
============ ==========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
CALIFORNIA INTERMEDIATE
CALIFORNIA MONEY FUND MUNICIPAL FUND
----------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JANUARY 31, JANUARY 31, JANUARY 31, JANUARY 31,
1996 1995 1996 1995
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net investment income.......... $ 15,010,539 $ 11,572,454 $ 774,637 $ 944,558
Net realized and unrealized
gain (loss) on investments... (1,064) (39,944) 942,408 (1,455,564)
------------ ------------ ----------- -----------
Net increase (decrease) in net
assets resulting from
operations................... 15,009,475 11,532,510 1,717,045 (511,006)
------------ ------------ ----------- -----------
Distributions to shareholders
from:
Net investment income:
Money shares.............. (14,224,381) (11,142,146) -- --
Plus shares............... -- -- -- --
Dollar shares............. (786,158) (430,308) -- --
Intermuni shares.......... -- -- (774,637) (944,558)
Net realized capital gains... -- -- (55,495) (64,692)
------------ ------------ ----------- -----------
Total distributions............ (15,010,539) (11,572,454) (830,132) (1,009,250)
------------ ------------ ----------- -----------
Increase (decrease) in net
assets from capital share
transactions................. 24,197,013 21,291,148 (3,393,178) (1,108,779)
------------ ------------ ----------- -----------
Net increase (decrease) in net
assets....................... 24,195,949 21,251,204 (2,506,265) (2,629,035)
Net assets:
Beginning of period.......... 396,850,014 375,598,810 17,432,219 20,061,254
------------ ------------ ----------- -----------
End of period................ $421,045,963 $396,850,014 $14,925,954 $17,432,219
============ ============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
12
<PAGE> 13
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY SHARES
------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
01/31/96 01/31/95 01/31/94 01/31/93 01/31/92
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income From Investment Operations:
Net Investment Income........................................ 0.0356 0.0281 0.0223 0.0251 0.0375
-------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders From Net Investment Income......... (0.0356) (0.0281) (0.0223) (0.0251) (0.0375)
-------- -------- -------- -------- --------
Net Asset Value, End of Period................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return..................................................... 3.62% 2.84% 2.25% 2.54% 3.82%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)............................... 389,883 385,824 356,501 359,193 490,141
Ratio of Expenses to Average Daily Net Assets(1)............... .20% .20% .20% .30% .30%
Ratio of Net Investment Income to Average Daily Net Assets..... 3.55% 2.79% 2.23% 2.52% 3.75%
</TABLE>
- ---------------
(1) Operating expense ratios before waivers of Investment Adviser and
Administrator fees for Money shares for the years ended January 31, 1996,
1995, 1994, 1993 and 1992 were .48%, .48%, .49%, .48%, and .48%,
respectively.
See accompanying notes to financial statements.
13
<PAGE> 14
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PLUS SHARES
--------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
01/31/96(2) 01/31/95(2) 01/31/94(2) 01/31/93(2) 01/31/92
----------- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- -----
Income From
Investment
Operations:
Net Investment
Income........ -- -- -- 0.0191 0.0350
----- ----- ----- ----- -----
Less
Distributions:
Dividends to
Shareholders
From Net
Investment
Income........ -- -- -- (0.0191) (0.0350)
----- ----- ----- ----- -----
Net Asset Value,
End of Period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===== ===== ===== ===== =====
Total Return........ -- -- -- 1.93% 3.57%
Ratios/Supplemental
Data:
Net Assets, End of
Period $(000)... -- -- -- -- 27,656
Ratio of Expenses
to Average Daily
Net Assets1..... -- -- -- .55% .55%
Ratio of Net
Investment
Income to
Average Daily
Net Assets...... -- -- -- 2.27% 3.50%
</TABLE>
<TABLE>
<CAPTION>
DOLLAR SHARES
----------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
01/31/96 01/31/95 01/31/94 01/31/93 01/31/92
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income From
Investment
Operations:
Net Investment
Income........ 0.0331 0.0256 0.0198 0.0226 0.0350
------- ------- ------- ------- -------
Less
Distributions:
Dividends to
Shareholders
From Net
Investment
Income........ (0.0331) (0.0256) (0.0198) (0.0226) (0.0350)
------- ------- ------- ------- -------
Net Asset Value,
End of Period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return........ 3.37% 2.59% 2.00% 2.29% 3.57%
Ratios/Supplemental
Data:
Net Assets, End of
Period $(000)... 31,163 11,026 19,098 11,750 6,599
Ratio of Expenses
to Average Daily
Net Assets1..... .45% .45% .45% .55% .55%
Ratio of Net
Investment
Income to
Average Daily
Net Assets...... 3.30% 2.54% 1.98% 2.27% 3.50%
</TABLE>
- ---------------
(1) Operating expense ratios before waivers of Investment Adviser and
Administrator fees for Plus shares for the years ended January 31, 1993 and
1992 were .64%, and .73%, respectively. Operating expense ratios before
waivers of Investment Adviser and Administrator fees for Dollar shares for
the years ended January 31, 1996, 1995, 1994, 1993 and 1992 were .73%, .73%,
.74%, .73%, and .73%, respectively.
(2) Only 100 Plus shares were outstanding during the period from December 1,
1992 to July 12, 1995. As of July 13, 1995 no Plus shares were outstanding.
See accompanying notes to financial statements.
14
<PAGE> 15
CALIFORNIA INTERMEDIATE MUNICIPAL FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERMUNI SHARES
-------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
01/31/96 01/31/95 01/31/94 01/31/93 01/31/92
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 10.02 $ 10.85 $ 10.72 $ 10.61 $ 10.34
------- ------- ------- ------- -------
Income From Investment Operations:
Net Investment Income......................... 0.5164 0.5165 0.5480 0.5655 0.6070
Net Realized and Unrealized Gain (Loss) on
Investments................................. 0.5993 (0.7959) 0.4110 0.2219 0.3296
------- ------- ------- ------- -------
Total From Investment Operations............ 1.1157 (0.2794) 0.9590 0.7874 0.9366
------- ------- ------- ------- -------
Less Distributions:
Dividends From Net Investment Income.......... (0.5164) (0.5165) (0.5480) (0.5655) (0.6070)
Distributions From Net Capital Gains.......... (0.0393 (0.0341) (0.2810) (0.1119) (0.0596)
------- ------- ------- ------- -------
Total Distributions......................... (0.5557) (0.5506) (0.8290) (0.6774) (0.6666)
------- ------- ------- ------- -------
Net Asset Value, End of Period.................... $ 10.58 $ 10.02 $ 10.85 $ 10.72 $ 10.61
======= ======= ======= ======= =======
Total Return...................................... 11.36% (2.51)% 9.26% 7.68% 9.34%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................ 14,926 17,432 20,061 17,318 19,516
Ratio of Expenses to Average Daily Net
Assets(1)..................................... .20% .20% .20% .30% .30%
Ratio of Net Investment Income to Average Daily
Net Assets.................................... 4.97% 5.06% 5.06% 5.31% 5.80%
Portfolio Turnover Rate......................... 26% 3% 23% 52% 63%
</TABLE>
- ---------------
(1) Operating expense ratios before waivers of Investment Adviser and
Administrator fees for the years ended January 31, 1996, 1995, 1994, 1993
and 1992 were .52%, .53%, .51%, .48% and .53%, respectively.
See accompanying notes to financial statements.
15
<PAGE> 16
Notes to Financial Statements
1. General Information
Municipal Fund for California Investors, Inc. (the "Company") is a no-load,
non-diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Company consists of two separate
portfolios: California Money Fund and California Intermediate Municipal Fund.
California Money Fund offers three series of shares: California Money ("Money"),
California Money Dollar ("Dollar"), and California Money Plus ("Plus").
California Intermediate Municipal Fund also offers three series of shares:
California Intermuni ("Intermuni"), California Intermuni Dollar ("Intermuni
Dollar"), and California Intermuni Plus ("Intermuni Plus"). Shares of each
series represent equal pro rata interests in a single investment portfolio and
are identical in all respects except that the Dollar and Plus shares of each
portfolio bear the service fees described below and are entitled to vote
separately on matters relating to these fees.
Dollar shares and Intermuni Dollar shares are sold pursuant to a non-12b-1
shareholder services plan to institutions other than broker/dealers, and Plus
shares and Intermuni Plus shares are sold pursuant to a 12b-1 services plan only
to broker/dealers which enter into agreements with each portfolio requiring them
to provide certain support services to their customers in consideration of the
portfolio's payment of .25% (on an annualized basis) of the average daily net
asset value of such shares held by the institutions on behalf of their
customers. Dividends paid to Plus and Dollar shareholders are reduced by such
fees. In addition, broker/dealers purchasing Plus shares and Intermuni Plus
shares may be requested to provide assistance in connection with the
distribution of such shares. Money and Intermuni shares are sold to
institutional investors who choose not to enter into such servicing agreements
with the portfolio. No Intermuni Dollar shares or Intermuni Plus shares have
been sold as of January 31, 1996.
Certain California municipal obligations in the Company's portfolios may be
obligations of issuers which rely in whole or in part on California State
revenues, real property taxes, revenues from health care institutions, or
obligations secured by mortgages on real property. Consequently, the possible
effect of economic conditions in California or of California law on these
obligations must be considered.
2. Significant Accounting Policies
Portfolio valuation--California Money Fund: Portfolio securities are valued
at amortized cost which approximates market value. Amortized cost valuation
involves valuing an instrument at its cost initially and, thereafter, assuming a
constant amortization to maturity of any discount or premium.
Portfolio valuation--California Intermediate Municipal Fund: Portfolio
securities for which market quotations are readily available (other than debt
securities with remaining maturities of 60 days or less) are valued at the mean
of the most recent quoted bid and asked prices provided by investment dealers.
Market or fair value may be determined by a matrix pricing system which is used
to determine the value of municipal obligations based on factors such as yield,
price, maturities, call features and ratings on comparable securities. Debt
securities with remaining maturities of 60 days or less are valued on an
amortized cost basis.
Securities transactions and investment income: Securities transactions are
recorded on the trade date. Realized gains and losses on investments sold are
recorded on the identified cost basis. Interest income is recorded on the
accrual basis.
Dividends and distributions to shareholders: It is the policy of each
portfolio to declare dividends from net investment income daily and to pay such
dividends within five business days of the end of each month. Net realized
capital gains, if any, are distributed at least annually.
16
<PAGE> 17
Federal taxes: No provision is made for federal income or excise taxes
because the Company intends to have each portfolio continue to qualify as a
regulated investment company by complying with the applicable requirements of
the Internal Revenue Code and by distributing all of its earnings to its
shareholders.
3. Investment Advisory Fee, Administration Fee and Other Related Party
Transactions
The Company has entered into an Investment Advisory Agreement with PNC
Institutional Management Corporation (the "Investment Adviser"), an indirect
wholly-owned subsidiary of PNC Bank, National Association ("PNC Bank"). PNC Bank
serves as the Company's sub-investment adviser pursuant to a Sub-Advisory
Agreement between the Investment Adviser and PNC Bank. Under the Investment
Advisory Agreement, the Investment Adviser is entitled to receive a fee from the
Company, computed daily and payable monthly, at an annual rate of .20% of the
value of each portfolio's average daily net assets.
Provident Distributors, Inc. ("PDI"), serves as the Company's distributor.
No compensation is payable by the Company to PDI for its distribution services.
The Company has entered into an Administration Agreement with PFPC Inc.
("PFPC"), an indirect wholly-owned subsidiary of PNC Bank, and PDI (the
"Administrators"), for certain administrative services. Pursuant to their
administrative agreement with the Company, PFPC and PDI jointly are entitled to
receive a fee at an annual rate of .20% of each portfolio's average daily net
assets.
The Investment Adviser and the Administrators have agreed to reduce the
advisory and administration fees otherwise payable to them and to reimburse the
Portfolios for their operating expenses to the extent necessary to ensure that
their annual operating expense ratios (excluding fees paid to Service
Organizations pursuant to Servicing Agreements) do not exceed .20% of each
portfolio's average daily net assets.
For the year ended January 31, 1996, with respect to California Money Fund,
the Investment Adviser and the Administrators voluntarily waived fees, on an
equal basis, totaling $1,188,580.
For the year ended January 31, 1996, with respect to California
Intermediate Municipal Fund, the Investment Adviser and the Administrators
voluntarily waived fees, on an equal basis, totaling $50,110.
Expenses include legal fees paid to counsel to the Company, a partner of
which is secretary of the Company.
PNC Bank also serves as the Company's custodian and PFPC, a subsidiary of
PNC Bank, serves as transfer agent.
Service Organization fees of $2,244 were paid to affiliates of PNC Bank for
the year ended January 31, 1996.
4. Fund Shares
Since California Money Fund has sold, issued as reinvestments of dividends
and redeemed shares only at a constant net asset value of $1.00 per share, the
number of shares represented by such sales, reinvestments and redemptions is the
same as the dollar amounts shown below for such transactions.
<TABLE>
<CAPTION>
CALIFORNIA MONEY FUND
----------------------------------
YEAR YEAR
ENDED ENDED
JANUARY 31, JANUARY 31,
1996 1995
--------------- ---------------
<S> <C> <C>
Sold
Money shares....... $ 1,486,914,292 $ 1,362,734,998
Plus Shares........ -- --
Dollar Shares...... 231,371,826 175,135,239
Issued as
reinvestments of
dividends
Money Shares....... 762,526 412,873
Plus Shares........ -- --
Dollar Shares...... -- 308,417
Redeemed
Money Shares....... (1,483,616,508) (1,333,786,669)
Plus Shares........ (100) --
Dollar Shares...... (211,235,023) (183,513,710)
--------------- ---------------
Net increase......... $ 24,197,013 $ 21,291,148
=============== ===============
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
CALIFORNIA INTERMEDIATE MUNICIPAL FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
JANUARY 31, 1996 JANUARY 31, 1995
---------------------- ----------------------
SHARES VALUE SHARES VALUE
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Sold Intermuni
shares........... 260,587 $ 2,716,097 375,627 $ 3,840,132
Issued as
reinvestments of
dividends
Intermuni
shares........... 2,141 22,457 2,718 27,667
Redeemed Intermuni
shares........... (591,434) (6,131,732) (488,982) (4,976,578)
-------- ----------- -------- -----------
Net decrease...... (328,706) $(3,393,178) (110,637) $(1,108,779)
======== =========== ======== ===========
</TABLE>
The authorized capital of the Company consists of 2.3 billion Money shares,
300 million Dollar shares, and 300 million Plus shares, 80 million Intermuni
shares, 10 million Intermuni Dollar shares and 10 million Intermuni Plus shares,
each with a par value of $.001.
5. Capital Loss Carryover
At January 31, 1996, California Money Fund had a capital loss carryover
amounting to $137,740 expiring at various times from 2001 to 2004, and is
available to offset possible future capital gains.
6. Purchases and Sales of Securities
For the year ended January 31, 1996, purchases and sales of investment
securities (excluding short-term investments) of California Intermediate
Municipal Fund were $3,971,124 and $6,685,706, respectively.
7. Net assets
At January 31, 1996, net assets consisted of the following:
<TABLE>
<CAPTION>
CALIFORNIA
INTERMEDIATE
CALIFORNIA MUNICIPAL
MONEY FUND FUND
------------ -----------
<S> <C> <C>
Paid-in capital............. $421,183,703 $14,249,764
Accumulated net realized
gain (loss) on
investments............... (137,740) 24,097
Amortized market discount... -- 8,694
Net unrealized appreciation
of investments............ -- 643,399
----------- ----------
Total Net Assets............ $421,045,963 $14,925,954
=========== ==========
</TABLE>
18
<PAGE> 19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of Municipal Fund for California Investors, Inc.
We have audited the accompanying statements of net assets of Municipal Fund
for California Investors, Inc. (comprised of California Money Fund and
California Intermediate Municipal Fund Portfolios) as of January 31, 1996, and
the related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
January 31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios constituting Municipal Fund for California
Investors, Inc. as of January 31, 1996, the results of their operations for the
year then ended, the changes in their net assets for each of the two years in
the period then ended, and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 27, 1996
19
<PAGE> 20
Directors
G. Willing Pepper
Chairman
William R. Howell
Rodney D. Johnson
Rudolph A. Peterson
Anthony M. Santomero
Officers
G. Willing Pepper
President
Edward J. Roach
Vice President and
Treasurer
Morgan R. Jones
Secretary
Investment Adviser
PNC Institutional Management
Corporation
400 Bellevue Parkway
Wilmington, DE 19809
Co-Administrators
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Provident Distributors, Inc.
259 Radnor-Chester Road
Suite 120
Radnor, PA 19087
Distributor
Provident Distributors, Inc.
259 Radnor-Chester Road
Suite 120
Radnor, PA 19087
Transfer Agent
PFPC Inc.
P.O. Box 8950
Wilmington, DE 19885-9628
This report is submitted for
the general information of the
shareholders of the Company.
It is not authorized for
distribution to prospective
investors unless accompanied
or preceded by effective
prospectuses for each
portfolio of the Company,
which contain information
concerning the investment
policies of the portfolios as
well as other pertinent
information.
PIF-A-011
CALIFORNIA MONEY FUND
CALIFORNIA INTERMEDIATE
MUNICIPAL FUND
Investment Portfolios
Offered by
Municipal Fund for
California Investors, Inc.
[PROVIDENT INSTITUTIONAL FUNDS LOGO]
Annual Report to Shareholders
January 31, 1996
