<PAGE> 1
- -------------------------------------------------------------------------------
M
PROVIDENT
- -------------------------------------------------------------------------------
400 Bellevue Parkway, Wilmington, DE 19809 M Phone:
302-792-2555 M Fax: 302-792-5876
INSTITUTIONAL
FUNDS
M
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
September 8, 1997
Dear Shareholder:
We are pleased to present the Semi-Annual Report to Shareholders of
Municipal Fund for California Investors, Inc. for the period ended July 31,
1997.
Commentary on California's improving economy and on recent developments in
our Fund are contained in the accompanying Investment Adviser's Report.
Provident Institutional Funds offers a variety of high quality Taxable and
Tax-Exempt Money Market Funds to meet the varied needs of our investors. Please
contact your Provident Distributors, Inc. account representative or call 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.
SEMI-ANNUAL REPORT OF THE INVESTMENT ADVISER
California passed its annual budget in mid-August, with a total general
fund of $53.1 billion, up 8.4% from fiscal 1997. The State's economy continued
its recovery and financials continued to improve. Unemployment for July, for
example, was 6.1%, the lowest since September 1990 and total employment
increased by 50,000 jobs to 14.9 million, an all-time high. The State's debt
issuance for fiscal year 1997 totaled $5.3 billion, up 56% from the prior year,
and of that total, $3 billion was short-term debt which was up 50% from the
prior year. Credit ratings activity for the first six months of 1997 took a
positive step as the Los Angeles Unified School District and the Sacramento
Municipal Utility District were upgraded to A from A-.
For most of the reporting period, economic reports showed strong momentum
and put pressure on the Federal Reserve to raise short-term interest rates. The
Fed's only move, however, was on March 25, when they raised the federal funds
rate from 5.25% to 5.50% in a widely expected move. The minutes from the Federal
Open Market Committee (FOMC) meeting indicated that the action was taken "in
light of persisting strength in demand, which is increasing the risk of
inflationary imbalances." The Fed stated that "the experience of the last
several years has reinforced the conviction that low inflation is necessary to
realizing the economy's fullest growth potential."
During the first half of the year, CalMoney experienced strong asset
growth, rising to $572 million from $452 million last January 31. This compares
favorably to the growth of all tax-free money market funds, which according to
IBC's Money Fund Report, rose from $144 billion to $149 billion in the same
period. CalMoney did experience some asset decline in April, associated with the
tax season, but this was easily met through the use of demand notes. In the last
few months, as the likelihood of further Fed tightening diminished, the Fund's
average maturity was extended to 45 days to capture attractive yield
opportunities. One of the notes purchased was the Los Angeles County Tax and
Revenue Anticipation Notes, a one-year security offering good return.
Even with the State's fiscal improvement, there are areas of credit quality
concern and the careful selection of high quality securities will remain,
therefore, a primary objective in the management of the Fund's portfolio. For
the one-year period ended July 31, 1997, the CalMoney Fund remained competitive
within its peer group, ranking #3 among 54 California tax-exempt money market
funds, according to Lipper Analytical Services.
PNC INSTITUTIONAL MANAGEMENT CORPORATION
2
<PAGE> 3
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statement of Net Assets
July 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- ------- ------------
<S> <C> <C> <C>
CALIFORNIA -- 95.86%
Alameda-Contra Costa School
Financing Authority RB (Capital
Improvements Financing Projects)
Series D DN (A-1+)**
3.45%....................08/07/97 $ 5,000 $ 5,000,000
California GO Notes Series B
TECP (Credit Suisse LOC) (A-1,
P-1)
3.55%................. 08/13/97 13,100 13,100,000
3.70%................. 08/27/97 12,900 12,900,000
California GO Notes TECP
(Morgan Guaranty LOC) (A-1,
P-1)
3.75%................. 10/10/97 6,600 6,600,000
California Health Facilities
Financing Authority (Adventist
Health System West-Sutter
Health) Series 1991B DN
(Toronto Dominion LOC) (A-1+,
VMIG-1)**
3.45%.................08/07/97 2,500 2,500,000
California Health Facilities
Financing Authority (Catholic
Healthcare West) Series 1988B
DN (MBIA Insurance) (A-1+,
VMIG-1)**
3.35%.................08/07/97 1,000 1,000,000
California Health Facilities
Financing Authority (Enloe
Memorial Hospital) DN (Bank of
America LOC) (A-1)**
3.50%.................08/07/97 600 600,000
California Health Facilities
Financing Authority (Pooled
Loan Program) Series 1987A DN
(Sanwa Bank LOC) (VMIG-1)**
3.45%.................08/07/97 4,700 4,700,000
California Health Facilities
Financing Authority (Scripps
Memorial Hospital) Series
1985B DN (MBIA Insurance)**
(A-1+, VMIG-1)
3.45%.................08/07/97 2,800 2,800,000
California Health Facilities
Financing Authority (St.
Francis Hospital) DN (MBIA
Insurance) (A-1+, VMIG-1)**
3.25%.................08/07/97 4,800 4,800,000
California Health Facilities
Financing Authority (St.
Joseph's Health System) Series
1985B DN (A-1+, VMIG-1)**
3.50%.................08/01/97 3,950 3,950,000
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- --------- -----------
<S> <C> <C> <C>
California Health Facilities
Financing Authority (St.
Joseph's Health System) Series
1991B DN (A-1+, VMIG-1)**
3.50%.................08/07/97 $ 8,700 $ 8,700,000
California Health Facilities
Financing Authority RB (Sutter
CHS) Series 1996C DN (FSA
Insurance) (A-1+)**
3.50%.................08/01/97 9,600 9,600,000
California Pollution Control
Financing Authority PCRB
(Pacific Gas & Electric
Company) Series E (A-1+)
3.75%.................10/10/97 8,300 8,300,000
California Health Facilities
Revenue Bonds (Long Beach
Memorial Health Services)
Series 1991 DN (A-1+,
VMIG-1)**
3.45%................. 08/07/97 4,900 4,900,000
California Pollution Control
Financing Authority (Pacific
Gas & Electric Company) Series
D (Union Bank of Switzerland
LOC) (A-1+)
3.50%.................09/09/97 2,000 2,000,000
California Pollution Control
Financing Authority (Southern
California Edison Company)
Series B DN (National
Westminster LOC) (A-1+, P-1)**
3.40%.................08/01/97 7,600 7,600,000
California Pollution Control
Financing Authority DN
(Societe Generale LOC) (A-1+,
VMIG-1)**
3.60%.................08/15/97 2,200 2,200,000
California Pollution Control
Financing Authority PCRB
(Pacific Gas & Electric
Company) Series 1996C DN (Bank
of America LOC) (A-1+,
VMIG-1)**
3.45%.................08/01/97 4,600 4,600,000
California Pollution Control
Financing Authority PCRB
(Southern California Edison
Company) DN (A-1+, P-1)**
3.40%.................08/01/97 15,100 15,100,000
</TABLE>
3
<PAGE> 4
CALIFORNIA MONEY FUND
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- --------- -----------
<S> <C> <C> <C>
California Statewide Communities
Development Authority
Certificates of Participation
(Covenant Retirement Communities,
Inc.) DN (ABN-AMRO Bank N.V. LOC)
(A-1+, VMIG-1)**
3.60%................. 08/07/97 $ 8,000 $ 8,000,000
California Statewide
Communities Development
Authority Series 1995A-2 DN
(Federal National Mortgage
Association) (A-1+)**
3.40%.................08/07/97 2,530 2,530,000
California Statewide
Communities Development
Authority Series 1995A-4 DN
(Federal National Mortgage
Association) (A-1+)**
3.40%.................08/07/97 10,000 10,000,000
California Statewide
Communities Development
Authority Series 1995A-5 DN
(Federal National Mortgage
Association) (A-1+)**
3.40%.................08/07/97 4,000 4,000,000
California Statewide
Communities Development
Authority Series 1996A DN
(Federal National Mortgage
Association) (A-1+)**
3.40%.................08/07/97 1,300 1,300,000
California Water Management
Certificates of Participation
(Monterey Peninsula Wastewater
Reclamation Project) DN
Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.55%.................08/07/97 8,600 8,600,000
City of Chula Vista IDRB (San
Diego Gas & Electric) Series
1996A DN (A-1, VMIG-1)**
3.45%.................08/01/97 4,900 4,900,000
City of Stockton IDRB (La
Quinta Motor Inns) DN
(NationsBank LOC) (A-1)**
3.75%.................08/07/97 1,990 1,990,000
Contra Costa Multifamily
Housing Revenue Bonds
(Riverside Apartments) Series
1992B DN (Federal National
Mortgage Association) (A-1+)**
3.45%.................08/07/97 3,900 3,900,000
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- --------- -----------
Corona Multifamily Housing
Revenue Refunding Bonds
(Country Hills Apartment
Project) Series 1995A DN (Bank
of America LOC) (A-1)**
3.30%.................08/07/97 $ 6,865 $ 6,865,000
Eastern Municipal Water
District Facilities
Corporation Certificates of
Participation (Riverside
County Project) DN (FGIC
Insurance) (A-1+, VMIG-1)**
3.35%................. 08/07/97 900 900,000
Fremont Multifamily Housing
Bonds (Creekside Village
Apartments) Series D DN (Fuji
Bank LOC) (VMIG-1)**
3.35%.................08/07/97 1,000 1,000,000
Fremont Multifamily Housing
Bonds (Mission Wells Project)
Series 1985E DN (Industrial
Bank of Japan LOC) (A-1+,
VMIG-1)**
3.55%.................08/07/97 5,100 5,100,000
Golden Empire Schools Financing
Authority (Kern High School
District Project) Series B DN
(National Westminster LOC)
(A-1+)**
3.50%.................08/07/97 4,800 4,800,000
Hayward Multifamily Housing
Bonds (Shorewood Apartment
Project) Series A DN (FGIC
Insurance) (VMIG-1)**
3.35%.................08/07/97 12,000 12,000,000
Los Angeles County Asset Lease
Revenue Bonds TECP
(Westdeutsche Landesbank
Girozentrale LOC) (A-1+, P-1)
3.40%.................08/11/97 12,000 12,000,000
3.75%................. 10/17/97 11,550 11,550,000
Los Angeles County Metropolitan
Transportation Authority RB
TECP (National Westminster
LOC) (A-1, P-1)
3.85%.................09/04/97 5,000 5,000,000
Los Angeles County Metropolitan
Transportation Authority
Second Subordinate Sales Tax
Revenue Notes Series A DN
(Industrial Bank of Japan LOC)
(A-1+)**
3.35%................. 08/07/97 19,250 19,250,000
</TABLE>
4
<PAGE> 5
CALIFORNIA MONEY FUND
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- --------- -----------
<S> <C> <C> <C>
Los Angeles County Pension
Obligation Revenue Refunding
Bonds Series C DN (Bank of Nova
Scotia LOC) (A-1+, VMIG-1)**
3.35%....................08/07/97 $ 8,400 $ 8,400,000
Los Angeles County TRAN (SP-1+,
MIG-1)
4.50%.................06/30/98 37,500 37,714,072
Los Angeles County Union School
District TRAN Series 1997-98
(SP-1+, MIG-1)
4.50%.................07/01/98 7,000 7,043,173
Los Angeles County
Transportation Commission
Sales Tax Revenue Refunding
Bonds Series 1992 DN (FGIC
Insurance) (A-1+, VMIG-1)**
3.35%.................08/07/97 4,200 4,200,000
Los Angeles Department of Water
& Power (Bank of Nova Scotia
LOC) (A-1+, P-1)
3.90%.................10/15/97 6,000 6,000,000
Los Angeles Wastewater
Authority TECP (Morgan
Guaranty LOC) (A-1, P-1)
3.80%.................08/11/97 2,000 2,000,000
Metropolitan Water District of
Southern California Series A
DN (ABN-AMRO Bank N.V. LOC)
(A-1+, VMIG-1)**
3.35%.................08/07/97 1,000 1,000,000
Metropolitan Water District of
Southern California Series B
(Westdeutsche Landesbank
Girozentrale LOC) (A-1+, P-1)
3.50%.................09/11/97 16,500 16,500,000
Northern California Public
Power Agency (Geothermal
Project #3-A) DN (Bank of Nova
Scotia LOC) (A-1+, VMIG-1)**
3.35%.................08/07/97 15,800 15,800,000
Oakland Certificates of
Participation (Capital
Improvement Project) DN
(Mitsubishi Bank LOC) (A-1+,
VMIG-1)**
3.70%.................08/07/97 5,300 5,300,000
Oakland Economic Development
Revenue Bonds (Leamington
Project) Series 1994A DN
(First Interstate LOC) (A-1)**
3.45%.................08/07/97 4,190 4,190,000
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- --------- -----------
Redlands Certificates of
Participation (Water Treatment
Facilities Project) DN (FGIC
Insurance) (A-1+, VMIG-1)**
3.40%.................08/07/97 $ 2,500 $ 2,500,000
Redlands City Multifamily
Revenue Refunding Bonds
(Parkview Terrace Project)
Series 1991A DN (Bank of
America LOC) (VMIG-1)**
3.40%.................08/07/97 3,000 3,000,000
Regents of the University of
California Series A TECP (Bank
of America LOC)
3.60%.................08/20/97 4,000 4,000,000
Riverside County Certificates
of Participation (Riverside
County Public Facility) Series
1985A DN (Sanwa Bank LOC)
(A-1+, VMIG-1)**
3.55%.................08/07/97 2,900 2,900,000
Riverside County Certificates
of Participation (Riverside
County Public Facility) Series
1985B DN (Sanwa Bank LOC)
(A-1+, VMIG-1)**
3.35%.................08/07/97 17,125 17,125,000
Riverside County Multifamily
Housing Bonds (Sierra Pines
Apartments Project) Series
1991A DN (Swiss Bank LOC)
(A-1+)**
3.65%.................08/07/97 4,715 4,715,000
Rohnert Park Multifamily
Housing Bonds (Crossbrook
Apartments) Series A DN
(Federal National Mortgage
Association) (A-1+)**
3.45%................. 08/07/97 2,500 2,500,000
Sacramento County (Courthouse
Project -- Administration
Center) DN (Union Bank of
Switzerland LOC) (A-1+,
VMIG-1)**
3.30%................. 08/07/97 8,000 8,000,000
San Diego Multifamily Housing
Bonds (Las Flores Project)
Series 1991A DN (Swiss Bank
LOC) (A-1+)**
3.45%.................08/07/97 16,800 16,800,000
San Francisco City & County
Housing Authority Multifamily
Housing RB (Winterland
Project) Series 1985C DN
(Citibank LOC) (A-1, VMIG-1)**
3.35%.................08/07/97 7,400 7,400,000
</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> <C>
San Francisco City & County
Redevelopment Agency Multifamily
Housing RB (Bayside Village
Project) Series B DN (Industrial
Bank of Japan LOC) (A-1+,
VMIG-1)**
3.70%....................08/07/97 $ 6,400 $ 6,400,000
San Francisco City & County
Redevelopment Agency
Multifamily Housing RB (South
Harbor Project) DN (VMIG-1)**
3.475%................08/07/97 12,300 12,300,000
San Jose Multifamily Housing
Bonds DN (FGIC Insurance)
(VMIG-1)**
3.35%.................08/07/97 4,980 4,980,000
San Jose Multifamily Housing
Bonds (Timberwood Apartments
Project) Series 1995A DN
(Wells Fargo Bank LOC)
(VMIG-1)**
3.40%................. 08/07/97 4,065 4,065,000
San Juan-Modesto-Santa Clara-
Redding Public Power Agency
(San Juan Project) Subordinate
Lien RB Series 1995B DN (AMBAC
Insurance) (A-1+, VMIG-1)**
3.35%.................08/07/97 8,000 8,000,000
San Juan-Modesto-Santa Clara-
Redding Public Power Agency
(San Juan Project) Subordinate
Lien RB Series 1997D DN
(National Westminster LOC)
(A-1+, VMIG-1)**
3.40%.................08/07/97 21,500 21,500,000
San Juan-Modesto-Santa Clara-
Redding Public Power Agency
(San Juan Project) Subordinate
Lien RB Series 1997E DN
(National Westminster LOC)
(A-1+, VMIG-1)**
3.35%.................08/07/97 16,000 16,000,000
Santa Clara Multifamily Housing
Bonds (Fox Chase Project) DN
(FGIC Insurance) (VMIG-1)**
3.35%.................08/07/97 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)**
3.50%.................08/07/97 5,700 5,700,000
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- ------- ------------
Southern California Public
Power Authority Subordinated
Refunding RB (FSA Insurance
LOC) (Southern Transmission
Project) Series B DN (A-1+,
VMIG-1)**
3.35%................. 08/07/97 $23,600 $ 23,600,000
Southern California Public
Power Authority Subordinated
Refunding RB (Palo Verde
Project) Series 1996B DN
(Morgan Guaranty LOC) (A-1+,
VMIG-1)**
3.35%.................08/07/97 1,600 1,600,000
Southern California Public
Power Authority Subordinated
Refunding RB (Palo Verde
Project) Series 1996C DN
(AMBAC Insurance) (A-1,
VMIG-1)**
3.35%................. 08/07/97 3,200 3,200,000
Southern California Public
Power Authority Subordinate
Refunding RB (Transportation
Project) Series 1991 DN (FGIC
Insurance) (A-1+, VMIG-1)**
3.35%.................08/07/97 2,700 2,700,000
Ventura County TRAN Series 1997
(SP-1+, MIG-1)
4.50%.................07/01/98 10,000 10,057,138
West Basin Municipal Water
Authority (Phase II Recycled
Water Project) Series B DN
(Bayerische Landesbank
Girozentrale LOC) (VMIG-1)**
3.35%.................08/07/97 5,200 5,200,000
-----------
548,624,383
-----------
PUERTO RICO -- 4.14%
Puerto Rico Government
Development Bank Series 1985
DN (Credit Suisse LOC) (A-1+,
VMIG-1)**
3.25%................. 08/07/97 2,200 2,200,000
Puerto Rico Government
Development Bank TECP
3.45%................. 08/08/97 7,000 7,000,000
3.75%................. 08/11/97 3,350 3,350,000
3.55%................. 09/11/97 2,214 2,214,000
3.75%................. 09/12/97 5,000 5,000,000
Puerto Rico Industrial Medical
Higher Education &
Environmental Pollution
Control Facilities Authority
(Ana G. Mendez Education
Foundation Project) RB (A-1+,
VMIG-1)
3.65%................. 08/27/97 2,200 2,200,000
</TABLE>
6
<PAGE> 7
CALIFORNIA MONEY FUND
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- ------- ------------
<S> <C> <C> <C>
Puerto Rico Industrial Medical
Higher Education & Environmental
Pollution Control Facilities
Authority (Ana G. Mendez
Education Foundation Project) DN
(Bank of Tokyo LOC) (A-1+)**
3.65%................. 08/07/97 1,700 $ 1,700,000
-----------
23,664,000
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $572,288,383*)........... 100.00% 572,288,383
OTHER ASSETS IN EXCESS OF
LIABILITIES.................... 0.00 16,967
-----------
NET ASSETS (Equivalent to $1.00
per share based on 426,818,561
California Money Shares and
145,632,292 California Dollar
Shares outstanding)............ 100.00% $572,305,350
NET ASSET VALUE OFFERING AND
REDEMPTION PRICE PER SHARE
($572,305,350 / 572,450,853)............. $1.00
- -------------
* Aggregate cost for federal income tax purposes is
substantially the same.
** Variable rate demand notes -- the interest rate shown
is as of July 31, 1997, 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 Investor Service, Inc. and Standard &
Poor's Ratings Group ratings are believed to be the
most recent ratings available at July 31, 1997.
- --------------------------------------------------------
</TABLE>
CALIFORNIA MONEY FUND
SUPPLEMENTARY INFORMATION
Maturity Schedule of Portfolio
July 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C> <C> <C>
1-30 Days $454,310,000 79.4%
31-60 Days 30,714,000 5.4%
61-90 Days 32,450,000 5.7%
Over 150 Days 54,500,000 9.5%
Average Weighted Maturity of Portfolio -- 44
days
- --------------------------------------------------------
INVESTMENT ABBREVIATIONS:
DN Demand Notes (Variable Rate)
GO General Obligation
IDRB Industrial Development Revenue Bond
LOC Letter of Credit
PCRB Pollution Control Revenue Bond
RB Revenue Bonds
TECP Tax-Exempt Commercial Paper
TRAN Tax and Revenue Anticipation Notes
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statement of Operations
Six Months Ended July 31, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest................................................................ $9,078,121
----------
Expenses:
Investment advisory fee................................................. 509,372
Administration fee...................................................... 509,372
Custodian fees.......................................................... 64,601
Legal fees.............................................................. 13,500
Transfer agent fees..................................................... 21,426
Audit fees.............................................................. 23,555
Directors' and Officer's fees and expenses.............................. 23,593
Registration and filing fees............................................ 3,000
Printing................................................................ 7,768
Shareholder computer access program..................................... 1,945
Other................................................................... 11,701
----------
1,189,833
Fees waived by Investment Adviser and Administrators.................... (680,471)
----------
509,362
Service Organization fees: Dollar Shares................................ 154,227
----------
Total expenses....................................................... 663,589
----------
Net investment income.............................................. 8,414,532
Realized gain (loss) on investments:
Net realized loss on investments sold................................... (11,410)
----------
Net increase in net assets resulting from operations...................... $8,403,122
==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JULY 31, 1997 JANUARY 31, 1997
------------- ----------------
(UNAUDITED)
<S> <C> <C>
Net investment income..................................... $ 8,414,532 $ 13,841,009
Net realized gain (loss) on investments................... (11,410) 3,647
------------ ------------
Net increase in net assets resulting from operations...... 8,403,122 13,844,656
------------ ------------
Distributions to shareholders from:
Net investment income:
Money Shares......................................... (6,504,084) (11,634,731)
Plus Shares.......................................... -- --
Dollar Shares........................................ (1,910,448) (2,206,278)
------------ ------------
Total distributions....................................... (8,414,532) (13,841,009)
------------ ------------
Increase in net assets from capital share transactions.... 119,474,603 31,792,547
------------ ------------
Net increase in net assets................................ 119,463,193 31,796,194
Net assets:
Beginning of period..................................... 452,842,157 421,045,963
------------ ------------
End of period........................................... $ 572,305,350 $452,842,157
============ ============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY SHARES
-----------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
07/31/97 01/31/97 01/31/96 01/31/95 01/31/94 01/31/93
----------- ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ----------
Income From Investment Operations:
Net Investment Income........................ 0.0167 0.0316 0.0356 0.0281 0.0223 0.0251
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders From Net Investment
Income..................................... (0.0167) (0.0316) (0.0356) (0.0281) (0.0223) (0.0251)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
Total Return...................................... 3.39%(2) 3.21% 3.62% 2.84% 2.25% 2.54%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................ 426,677 326,521 389,883 385,824 356,501 359,193
Ratio of Expenses to Average Daily Net
Assets(1).................................... .20%(2) .20% .20% .20% .20% .30%
Ratio of Net Investment Income to Average Daily
Net Assets................................... 3.37%(2) 3.15% 3.55% 2.79% 2.23% 2.52%
</TABLE>
- ---------------
(1) Operating expense ratios before waivers of Investment Adviser and
Administrators fees for Money Shares for the six months ended July 31, 1997
and for the years ended January 31, 1997, 1996, 1995, 1994 and 1993 were
.47% (annualized), .48%, .48%, .48%, .49% and .48%, respectively.
(2) Annualized.
See accompanying notes to financial statements.
10
<PAGE> 11
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PLUS SHARES
----------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
07/31/97(2) 01/31/97(2) 01/31/96(2) 01/31/95(2) 01/31/94(2) 01/31/93(2)
------------ --------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- - ------- - ------- - ------- - --------
Income From Investment
Operations:
Net Investment Income...... -- -- -- -- -- 0.0191
-------- ------- - ------- - ------- - ------- - --------
Less Distributions:
Dividends to Shareholders
From Net Investment
Income................... -- -- -- -- -- (0.0191)
-------- ------- - ------- - ------- - ------- - --------
Net Asset Value, End of
Period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return................... -- -- -- -- -- 1.93%
Ratios/Supplemental Data:
Net Assets,
End of Period $(000)....... -- -- -- -- -- --
Ratio of Expenses to Average
Daily Net Assets(1)........ -- -- -- -- -- .55%
Ratio of Net Investment
Income to Average Daily Net
Assets..................... -- -- -- -- -- 2.27%
<CAPTION>
DOLLAR SHARES
----------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
07/31/97 01/31/97 01/31/96 01/31/95 01/31/94 01/31/93
------------ --------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period...........$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income...... 0.0154 0.0291 0.0331 0.0256 0.0198 0.0226
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders
From Net Investment
Income................... (0.0154) (0.0291) (0.0331) (0.0256) (0.0198) (0.0226)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period.......................$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return................... 3.14%(3) 2.96% 3.37% 2.59% 2.00% 2.29%
Ratios/Supplemental Data:
Net Assets,
End of Period $(000)....... 145,628 126,321 31,163 11,026 19,098 11,750
Ratio of Expenses to Average
Daily Net Assets(1)........ .45%(3) .45% .45% .45% .45% .55%
Ratio of Net Investment
Income to Average Daily Net
Assets..................... 3.12%(3) 2.90% 3.30% 2.54% 1.98% 2.27%
</TABLE>
- ---------------
(1) Operating expense ratio before waivers of Investment Adviser and
Administrators fees for Plus Shares for the year ended January 31, 1993 was
.64%. Operating expense ratios before waivers of Investment Adviser and
Administrator fees for Dollar Shares for the six months ended July 31, 1997
and for the years ended January 31, 1997, 1996, 1995, 1994 and 1993 were
.72% (annualized), .73%, .73%, .73%, .74% and .73%, respectively.
(2) Only 100 Plus Shares were outstanding during the period from December 1,
1992 to July 12, 1995. Since July 13, 1995 no Plus Shares have been
outstanding.
(3) Annualized.
See accompanying notes to financial statements.
11
<PAGE> 12
Notes to Financial Statements
(Unaudited)
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 offers three series of
shares: California Money ("Money"), California Money Dollar ("Dollar"), and
California Money Plus ("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 bear the service fees described below and
are entitled to vote separately on matters relating to these fees. The
California Intermediate Municipal Fund Portfolio was liquidated on April 17,
1997.
Dollar Shares are sold pursuant to a non-12b-1 shareholder services plan to
institutions other than broker/dealers, and Plus Shares are sold pursuant to a
12b-1 services plan only to broker/dealers which enter into agreements with the
Company requiring them to provide certain support services to their customers in
consideration of the Company'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 may be
requested to provide assistance in connection with the distribution of such
shares. Money Shares are sold to institutional investors who choose not to enter
into such servicing agreements with the Company.
Certain California municipal obligations in the Company's portfolio 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
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statement and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates. The following is a summary of significant accounting policies
consistently followed by the Company in the preparation of its financial
statements.
Portfolio valuation--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.
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 the
Company 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.
Federal taxes--No provision is made for federal income or excise taxes
because the Company intends to 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
12
<PAGE> 13
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 Company'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 the Company'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
Company for its operating expenses to the extent necessary to ensure that its
annual operating expense ratio (excluding fees paid to Service Organizations
pursuant to Servicing Agreements) does not exceed .20% of the Company's average
daily net assets.
For the six months ended July 31, 1997, the Investment Adviser and the
Administrators voluntarily waived fees, on an equal basis, totaling $680,471.
Expenses include legal fees paid to counsel to the Company, a partner of
which is secretary of the Company.
PNC Bank is the Company's custodian and PFPC is transfer agent.
Service Organization fees of $1,226 were paid to affiliates of PNC Bank for
the six months ended July 31, 1997.
4. Fund Shares
Since the Company 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>
SIX MONTHS YEAR
ENDED ENDED
JULY 31, JANUARY 31,
1997 1997
------------- ---------------
(UNAUDITED)
<S> <C> <C>
Sold
Money Shares......... $ 808,440,803 $ 1,314,241,799
Plus Shares.......... -- --
Dollar Shares........ 291,827,441 509,290,689
Issued as reinvestments
of dividends
Money Shares......... 497,922 1,127,557
Plus Shares.......... -- --
Dollar Shares........ -- --
Redeemed
Money Shares......... (708,774,205) (1,378,733,746)
Plus Shares.......... -- --
Dollar Shares........ (272,517,358) (414,133,752)
------------- ---------------
Net increase........... $ 119,474,603 $ 31,792,547
============= ===============
</TABLE>
The authorized capital of the Company consists of 2.3 billion Money Shares,
300 million Dollar Shares, and 300 million Plus Shares, each with a par value of
$.001 per share.
5. Capital Loss Carryover
At January 31, 1997, California Money Fund had a capital loss carryover
amounting to $134,093 expiring at various times from 2001 to 2004, and is
available to offset possible future capital gains.
6. Net assets
At July 31, 1997, net assets consisted of the following:
<TABLE>
<S> <C>
Paid-in capital.......................... $572,450,853
Accumulated net realized loss on
investments............................ (145,503)
------------
Total Net Assets......................... $572,305,350
============
</TABLE>
13
<PAGE> 14
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
W. Bruce McConnel, III
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.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
Distributor
Provident Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA 19428
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-T-011
CALIFORNIA MONEY FUND
An Investment Portfolio
Offered by
Municipal Fund for
California Investors, Inc.
[PROVIDENT, INSTITUTIONAL FUNDS LOGO]
Semi-Annual Report
to Shareholders
July 31, 1997
