<PAGE> 1
- -------------------------------------------------------------------------------
-
PROVIDENT
- -------------------------------------------------------------------------------
INSTITUTIONAL
FUNDS
-
------------------------------------------------------------------
400 Bellevue Parkway, Wilmington, DE 19809 - Phone:
302-792-2555 - Fax: 302-792-5876
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
September 8, 1998
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,
1998.
Commentary of California's improving economy and on recent developments in
our Fund are contained in the accompanying Investment Adviser's Report.
Provident Institutional Funds offer a variety of high quality Taxable and
Tax-Exempt Money Market Funds to meet the varied needs of our investors. Please
contact your 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's economy continued to gain momentum as non-farm employment rose
3.3% in the year ended July, 1998. Construction led the way as residential
housing permits in July were up 32% from the prior year, while sales of existing
family homes were up 19%. The median home price rose 11.3% from the prior year.
New home construction was particularly strong in San Diego and Riverside
counties, where housing starts were ahead of last year's pace by 25%. The
State's unemployment rate was 5.6% in July, the lowest level since 1990.
The good economic news had a positive impact upon the State's fiscal
picture. Unaudited results for the fiscal year ended June 30, 1998 indicate the
General Fund produced a surplus of $2.1 billion compared with $264 million for
fiscal 1997. The improvement was the result of a 10.9% increase in receipts
versus a 7.2% increase in disbursements. Personal income tax revenues were up
19% from the prior year while retail sales and use taxes were up 7%. On the
disbursement side, funding for public schools was up 9.1%.
Credit rating activity for the first seven months of 1998 reflected the
improving economic and fiscal pictures for the State. Moody's upgraded 19
California credits, including Alameda County pension obligations and San Diego
County Certificates of Participation, while downgrading only one credit, a
taxable hospital foundation.
The yield curve in the short-term municipal market remained relatively flat
during the period. At the same time, the market experienced greater cash flow
volatility, increasing the focus on liquidity. Under these conditions, there was
little opportunity to extend the Fund's average weighted maturity. During the
summer's fiscal note season, some longer-dated obligations were purchased to
take advantage of temporarily higher rates. Even with the State's fiscal
improvement, credit quality concerns remain and the prudent selection of high
quality securities will remain a primary objective in the management of the
Fund. For the one-year period ended July 31, 1998, CalMoney remained very
competitive within its peer group, ranking #4 among 55 California tax-exempt
money market funds, according to Lipper Analytical Services.
BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION
2
<PAGE> 3
CALIFORNIA MONEY FUND
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
Statement of Net Assets
July 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
-------------- -------- ------- ------------
<S> <C> <C> <C>
CALIFORNIA -- 97.52%
California Educational
Facilities Authority (Stanford
University) Series 1993L DN
(A-1+, VMIG-1)**
2.90%................. 08/07/98 $ 3,300 $ 3,300,000
California Educational
Facilities Authority (Stanford
University) Series 1996L DN
(A-1+, VMIG-1)**
2.90%................. 08/07/98 7,275 7,275,000
California GO Notes TECP(Morgan
Guaranty LOC) (A-1, P-1)
3.00%................. 08/06/98 5,600 5,600,000
California GO Notes TECP Series
B (Westdeutsche Landesbank
Girozentrale LOC) (A-1, P-1)
3.30%................. 09/04/98 10,000 10,000,000
California Health Facilities
Financing Authority (Adventist
Health System West-Sutter
Health) Series 1991B DN
(Toronto Dominion LOC)
(A-1+, VMIG-1)**
3.05%................. 08/07/98 2,000 2,000,000
California Health Facilities
Financing Authority (Catholic
Healthcare West) Series 1988C
DN (MBIA Insurance)
(A-1+, VMIG-1)**
3.00%................. 08/07/98 2,200 2,200,000
California Health Facilities
Financing Authority (Pooled
Loan Program) Series 1985B DN
(Morgan Guaranty LOC)
(A-1+, VMIG-1)**
2.95%................. 08/07/98 4,000 4,000,000
California Health Facilities
Financing Authority (Pooled
Loan Program) Series 1987A DN
(Sanwa Bank LOC)(VMIG-1)**
2.95%................. 08/07/98 4,400 4,400,000
California Health Facilities
Financing Authority (Scripps
Memorial Hospital) Series A DN
(A-1+, VMIG-1)**
3.20%................. 08/07/98 5,000 5,000,000
California Health Facilities
Financing Authority (Scripps
Memorial Hospital) Series 1985B
DN (MBIA Insurance)
(A-1+, VMIG-1)**
3.20%................. 08/07/98 2,800 2,800,000
</TABLE>
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
-------------- -------- ------- ------------
<S> <C> <C> <C>
California Health Facilities
Financing Authority RB
(Catholic Health Care) Series C
DN
(A-1+, VMIG-1)**
3.00%................. 08/07/98 $ 4,000 $ 4,000,000
California Pollution Control
Financing Authority PCRB
(Pacific Gas & Electric
Company) Series 1996D (Union
Bank of Switzerland LOC) (A-1+)
3.05%................. 08/07/98 1,000 1,000,000
California Pollution Control
Financing Authority PCRB
(Pacific Gas & Electric
Company) Series 1996D (Union
Bank of Switzerland LOC) (A-1+)
3.50%................. 10/08/98 19,600 19,600,000
California Pollution Control
Financing Authority PCRB
(Southern California Edison
Company) Series B (A-1, P-1)
3.10%................. 09/09/98 2,000 2,000,000
California Pollution Control
Financing Authority PCRB
(Southern California Edison
Company) Series 1985D
(A-1, P-1)
3.40%................. 08/19/98 1,300 1,300,000
California Statewide Communities
Development Authority
Certificates of Participation
(Covenant Retirement
Communities, Inc.) DN (ABN-AMRO
Bank N.V. LOC) (A-1+, VMIG-1)**
3.25%................. 08/07/98 7,900 7,900,000
California Statewide Communities
Development Authority
Certificates of Participation
(St. Joseph Health System) DN
(A-1+, VMIG-1)**
3.05%................. 08/07/98 5,000 5,000,000
California Statewide Communities
Development Authority Trust
Receipts Series 1998A-23 DN
(Bank of New York LOC) (A-1+)**
3.60%................. 08/07/98 56,100 56,100,000
City of Stockton IDRB (La Quinta
Motor Inns) DN (NationsBank
LOC)(A-1)**
3.60%................. 08/07/98 1,625 1,625,000
</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>
Corona Multifamily Housing RB
(Country Hills Apartment Project)
Series 1995A DN (Bank of America
LOC)(A-1)**
3.10%................. 08/07/98 $ 6,775 $ 6,775,000
East Bay Municipal Utility
District Water RB (Westdeutsche
Landesbank Girozentrale LOC)
(A-1+, P-1)
3.50%................. 09/08/98 14,000 14,000,000
Eastern Municipal Water District
Facilities Corporation
Certificates of Participation
(Riverside County Project) DN
(FGIC Insurance)
(A-1+, VMIG-1)**
3.00%................. 08/07/98 4,200 4,200,000
Foothill Eastern Corridor Agency
(California Toll Road Project)
Series D DN (Industrial Bank of
Japan LOC)(A-1+)**
3.00%................. 08/07/98 1,400 1,400,000
Fremont Multifamily Housing
Bonds (Creekside Village
Apartments) Series D DN
(Kredietbank LOC)(VMIG-1)**
2.95%................. 08/07/98 4,000 4,000,000
Golden Empire Schools Financing
Authority (Kern High School
District Project) Series B DN
(National Westminster LOC)
(A-1+)**
3.00%................. 08/07/98 4,700 4,700,000
Golden Empire Schools Financing
Authority (Kern High School
District Project) Series A DN
(Canadian Imperial Bank LOC)
(A-1+)**
3.00%................. 08/07/98 8,200 8,200,000
Irvine Assessment District
Improvement Bonds Series 1997
DN (Bayerische Landesbank
Girozentrale LOC) (VMIG-1)**
3.50%................. 08/01/98 2,700 2,700,000
Kern County Certificates of
Participation (Kern Public
Facilities Project) Series B DN
(Sanwa Bank LOC) (VMIG-1)**
3.00%................. 08/07/98 4,300 4,300,000
Long Beach Health Facilities RB
(Memorial Health Services)
Series 1991 DN (A-1+, VMIG-1)**
3.10%................. 08/07/98 13,600 13,600,000
</TABLE>
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
-------------- -------- ------- ------------
<S> <C> <C> <C>
Los Angeles Convention &
Exposition Center Authority
Lease RB Series D DN (Bank of
New York LOC) (A-1+, VMIG-1)**
3.60%................. 08/07/98 $22,025 $ 22,025,000
Los Angeles County Asset Lease
RB TECP Notes (Westdeutsche
Landesbank Girozentrale LOC)
(A-1+, P-1)
3.00%................. 08/06/98 1,000 1,000,000
3.55%................. 08/07/98 5,000 5,000,000
3.55%................. 09/04/98 11,550 11,550,000
3.50%................. 09/09/98 12,000 12,000,000
Los Angeles County Housing
Authority Multifamily Housing
RB (Malibu Meadows Project)
Series 1998B DN (Federal
National Mortgage
Association)(A-1+)**
2.95%................. 08/07/98 3,000 3,000,000
Los Angeles County Metropolitan
Transportation Authority Second
Subordinate Sales Tax Revenue
Notes Series A (National
Westminster LOC) (A-1+, P-1)
3.40%................. 09/29/98 2,900 2,900,000
Los Angeles County Multifamily
Housing RB (Valencia Village
Project) Series 1984C DN
(Bayerische Landesbank
Girozentrale LOC)(A-1+)**
3.20%................. 08/07/98 9,900 9,900,000
Los Angeles County TRAN (SP-1+,
MIG-1)
4.50%................. 06/30/99 31,000 31,226,028
Los Angeles County
Transportation Commission Sales
Tax Revenue Refunding Bonds
Series 1992 DN (FGIC Insurance)
(A-1+, VMIG-1)**
2.90%................. 08/07/98 16,300 16,300,000
Los Angeles Unified School
District TRAN Series 1998-1999
(SP-1+, MIG-1)
4.50%................. 07/01/99 9,000 9,069,180
Los Angeles Wastewater Authority
Revenue Notes TECP (A-1, P-1)
3.50%................. 09/15/98 10,000 10,000,000
Metropolitan Water District of
Southern California Series A DN
(ABN-AMRO Bank N.V. LOC) (A-1+,
VMIG-1)**
3.05%................. 08/07/98 1,000 1,000,000
</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>
Metropolitan Water District of
Southern California Series B
(Westdeutsche Landesbank
Girozentrale LOC) (A-1+, P-1)
3.55%................. 08/07/98 $18,000 $ 18,000,000
Monterey County Financing
Authority RB (Reclamation &
Distribution Projects) DN (Dai-
Ichi Kangyo LOC)(VMIG-1)**
3.90%................. 08/07/98 6,100 6,100,000
Northern California Public Power
Agency (Geothermal Project
#3-A) DN (Bank of Nova Scotia
LOC) (A-1+, VMIG-1)**
2.90%................. 08/07/98 15,695 15,695,000
Oakland Certificates of
Participation (Capital
Improvement Project) DN
(National Westminster LOC)**
3.35%................. 08/07/98 29,500 29,500,000
Pomona Redevelopment Agency
Multifamily RB Series A DN
(Federal National Mortgage
Association)(A-1+)**
2.95%................. 08/07/98 2,400 2,400,000
Redlands City Multifamily
Revenue Refunding Bonds
(Parkview Terrace Project)
Series 1991A DN (Bank of
America LOC) (VMIG-1)**
3.05%................. 08/07/98 3,000 3,000,000
Riverside County Certificates of
Participation (Riverside County
Public Facility) Series 1985A
DN (Sanwa Bank LOC) (A-1+,
VMIG-1)**
3.05%................. 08/07/98 6,800 6,800,000
Riverside County Certificates of
Participation (Riverside County
Public Facility) Series 1985C
DN (Sanwa Bank LOC) (A-1+,
VMIG-1)**
3.00%................. 08/07/98 7,900 7,900,000
Riverside County Multifamily
Housing Bonds (Sierra Pines
Apartments Project) Series
1991A DN (Swiss Bank LOC)
(A-1+)**
3.00%................. 08/07/98 4,715 4,715,000
</TABLE>
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
-------------- -------- ------- ------------
<S> <C> <C> <C>
Rohnert Park Multifamily Housing
Bonds (Crossbrook Apartments)
Series A DN (Federal National
Mortgage Association) (A-1+)**
2.95%................. 08/07/98 $ 2,500 $ 2,500,000
San Diego Area Local Government
Trust Receipts Certificates of
Participation Series-A25 DN
(A-1+)**
3.60%................. 08/07/98 15,000 15,000,000
San Diego County Metropolitan
Water Authority Series I TECP
(Bayerische Landesbank
Girozentrale LOC) (A-1, P-1)
3.25%................. 08/26/98 6,600 6,600,000
San Diego Multifamily Housing
Bonds (Las Flores Project)
Series 1991A DN (Swiss Bank
LOC) (A-1+)**
3.00%................. 08/07/98 16,800 16,800,000
San Diego Multifamily Housing RB
(University Tour Center
Apartments Project) DN (Bank of
America LOC) (A-1, VMIG-1)**
3.05%................. 08/07/98 2,900 2,900,000
San Francisco City & County
Housing Authority Multifamily
Housing RB (Winterland Project)
Series 1985C DN (Citibank LOC)
(A-1, VMIG-1)**
3.10%................. 08/07/98 4,800 4,800,000
San Francisco City & County
Redevelopment Agency
Multifamily Housing RB (Bayside
Village Project) Series B DN
(Industrial Bank of Japan LOC)
(A-1+, VMIG-1)**
4.25%................. 08/07/98 6,400 6,400,000
San Francisco City & County
Redevelopment Agency
Multifamily Housing RB (South
Harbor Project) DN (VMIG-1)**
4.00%................. 08/07/98 12,300 12,300,000
San Jose Multifamily Housing
Bonds (Fairway Glen Project)
Series A DN (FGIC Insurance)
(VMIG-1)**
3.00%................. 08/07/98 4,980 4,980,000
</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 Jose Multifamily Housing Bonds
(Timberwood Apartments Project)
Series 1995A DN (Wells Fargo Bank
LOC) (VMIG-1)**
3.05%................. 08/07/98 $ 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)**
2.95%................. 08/07/98 10,000 10,000,000
Santa Clara County Financing
Authority Lease Revenue
Refunding Bonds (VMC Facilities
Replacement Project) Series B
DN (Union Bank of Switzerland
LOC) (A-1, VMIG-1)**
3.00%................. 08/07/98 6,500 6,500,000
Santa Clara Multifamily Housing
Bonds (Fox Chase Project) DN
(FGIC Insurance) (VMIG-1)**
3.00%................. 08/07/98 4,700 4,700,000
Southeast California Lease
Revenue Refunding Bonds
(Resource Recovery Facility
Authority) DN (Industrial Bank
of Japan LOC) (A-1, VMIG-1)**
4.05%................. 08/07/98 34,500 34,500,000
Southern California Public Power
Authority Subordinated
Refunding RB (Southern
Transmission Project) Series B
DN (FSA Insurance)(A-1+,
VMIG-1)**
2.95%................. 08/07/98 20,800 20,800,000
Southern California Public Power
Authority Subordinated
Refunding RB (Southern
Transmission Project) Series
1991 DN (FGIC Insurance)(A-1+,
VMIG-1)**
2.90%................. 08/07/98 7,300 7,300,000
Vacaville Multifamily Housing
Mortgage RB (Quail Run Project)
Series A DN (Federal National
Mortgage Association) (A-1+)**
2.95%................. 08/07/98 5,700 5,700,000
</TABLE>
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
-------------- -------- ------- ------------
<S> <C> <C> <C>
Vallecitos Water District
Certificates of Participation
(Twin Oaks Reservoir Project)
DN (Credit Locale de France
LOC) (A-1+, VMIG-1)**
3.15%................. 08/07/98 $ 2,700 $ 2,700,000
------------
606,600,208
------------
PUERTO RICO -- 2.41%
Puerto Rico Government
Development Bank Series 1985 DN
(Credit Suisse LOC) (A-1+,
VMIG-1)**
3.20%................. 08/07/98 8,200 8,200,000
Puerto Rico Highway &
Transportation Authority
Highway Revenue Bonds Series X
DN (Landesbank Hessen-Thuringen
LOC) (A-1+, VMIG-1)**
3.20%................. 08/07/98 1,085 1,085,000
Puerto Rico Highway &
Transportation Authority
Transportation Revenue Bonds
Series 1998A DN (AMBAC
Insurance) (A-1+, VMIG-1)**
3.15%................. 08/07/98 3,700 3,700,000
Puerto Rico Industrial, Tourist,
Education, Medical, and
Environmental Control Financing
Authority (Ana G. Mendez
University System Project) DN
(Banco de Santarder LOC)
(A-1+)**
2.95%................. 08/07/98 2,000 2,000,000
------------
14,985,000
------------
</TABLE>
6
<PAGE> 7
CALIFORNIA MONEY FUND
Statement of Net Assets (Concluded)
<TABLE>
<CAPTION>
VALUE
------------
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $621,585,208*)........... 99.93% $621,585,208
OTHER ASSETS IN EXCESS OF
LIABILITIES.................... 0.07 433,179
------ ------------
NET ASSETS (Equivalent to $1.00
per share based on 513,929,789
California Money Shares and
108,224,137 California Dollar
Shares outstanding)............ 100.00% $622,018,387
------ ------------
------ ------------
NET ASSET VALUE OFFERING AND
REDEMPTION PRICE PER SHARE
($622,018,387 / 622,153,926)............. $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, 1998, 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's Service, Inc. and Standard &
Poor's Ratings Service ratings are believed to be the
most recent ratings available at July 31, 1998.
</TABLE>
---------------------------------------------------------
<TABLE>
<S> <C> <C>
</TABLE>
CALIFORNIA MONEY FUND
SUPPLEMENTARY INFORMATION
Maturity Schedule of Portfolio
July 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C> <C> <C>
1-30 Days $499,240,000 80.4%
31-60 Days 62,450,000 10.0%
61-90 Days 19,600,000 3.2%
Over 150 Days 40,000,000 6.4%
Average Weighted Maturity -- 34 days
- --------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
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 31,1998
(Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest.................................................. $10,494,524
-----------
Expenses:
Investment advisory fee................................... 618,462
Administration fee........................................ 618,462
Custodian fees............................................ 65,126
Legal fees................................................ 16,615
Transfer agent fees....................................... 12,822
Audit fees................................................ 16,099
Directors' and officer's fees and expenses................ 17,120
Registration and filing fees.............................. 2,328
Printing.................................................. 6,118
Other..................................................... 7,846
-----------
1,380,998
Fees waived by Investment Adviser and Administrators...... (762,538)
-----------
618,460
Service Organization fees: Dollar Shares.................. 138,339
-----------
Total expenses......................................... 756,799
-----------
Net investment income................................ 9,737,725
Realized gain (loss) on investments:
Net realized gain on investments sold..................... 13,414
-----------
Net increase in net assets resulting from operations........ $ 9,751,139
===========
</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
ENDED YEAR ENDED
JULY 31, 1998 JANUARY 31, 1998
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
Net investment income....................................... $ 9,737,725 $ 18,095,184
Net realized gain (loss) on investments..................... 13,414 (14,860)
------------ ------------
Net increase in net assets resulting from operations........ 9,751,139 18,080,324
------------ ------------
Distributions to shareholders from:
Net investment income:
Money Shares........................................... (8,100,106) (14,302,548)
Dollar Shares.......................................... (1,637,619) (3,792,636)
------------ ------------
Total distributions......................................... (9,737,725) (18,095,184)
------------ ------------
Increase in net assets from capital share transactions...... 31,118,525 138,059,151
------------ ------------
Net increase in net assets.................................. 31,131,939 138,044,291
Net assets:
Beginning of period....................................... 590,886,448 452,842,157
------------ ------------
End of period............................................. $622,018,387 $590,886,448
============ ============
</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
07/31/98 01/31/98 01/31/97 01/31/96 01/31/95 01/31/94
----------- -------- -------- -------- -------- --------
(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................. 0.0159 0.0334 0.0316 0.0356 0.0281 0.0223
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders From Net
Investment Income................... (0.0159) (0.0334) (0.0316) (0.0356) (0.0281) (0.0223)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return............................... 3.23%(2) 3.39% 3.21% 3.62% 2.84% 2.25%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)......... 513,797 460,339 326,521 389,883 385,824 356,501
Ratio of Expenses to Average Daily Net
Assets(1)............................. .20%(2) .20% .20% .20% .20% .20%
Ratio of Net Investment Income to Average
Daily Net Assets...................... 3.19%(2) 3.34% 3.15% 3.55% 2.79% 2.23%
</TABLE>
- ---------------
(1) Operating expense ratios before waivers of Investment Adviser and
Administrators fees for Money Shares for the six months ended July 31, 1998
and for the years ended January 31, 1998, 1997, 1996, 1995 and 1994 were
.45% (annualized), .46%, .48%, .48%, .48% and .49%, 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>
DOLLAR SHARES
------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
07/31/98 01/31/98 01/31/97 01/31/96 01/31/95 01/31/94
----------- -------- -------- -------- -------- --------
(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......................... 0.0147 0.0309 0.0291 0.0331 0.0256 0.0198
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders From Net Investment
Income...................................... (0.0147) (0.0309) (0.0291) (0.0331) (0.0256) (0.0198)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return....................................... 2.98%(2) 3.14% 2.96% 3.37% 2.59% 2.00%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................. 108,221 130,547 126,321 31,163 11,026 19,098
Ratio of Expenses to Average Daily Net
Assets(1)..................................... .45%(2) .45% .45% .45% .45% .45%
Ratio of Net Investment Income to Average Daily
Net Assets.................................... 2.94%(2) 3.09% 2.90% 3.30% 2.54% 1.98%
</TABLE>
- ---------------
(1) Operating expense ratios before waivers of Investment Adviser and
Administrators fees for Dollar Shares for the six months ended July 31, 1998
and for the years ended January 31, 1998, 1997, 1996, 1995 and 1994 were
.70% (annualized), .71%, .73%, .73%, .73% and .74%, respectively.
(2) 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.
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
BlackRock Institutional Management Corporation ("BIMC"),
12
<PAGE> 13
a majority-owned subsidiary of PNC Bank, National Association ("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.
PNC Bank serves as the Company's sub-investment adviser pursuant to a
Sub-Advisory Agreement between the Investment Adviser and PNC Bank.
In March 1998, BIMC assumed the responsibilities of PNC Bank, as
sub-advisor, to provide research, credit analysis and recommendations with
respect to the Fund's investments and supply certain computer facilities,
personnel and other services. The personnel and facilities related to these
services were transferred to BIMC and BIMC's obligation to pay to PNC Bank a
portion of the advisory fee was terminated.
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.
BIMC 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, 1998, BIMC and the Administrators
voluntarily waived fees, on an equal basis, totaling $762,538.
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 the transfer agent.
No Service Organization fees were paid to affiliates for the six months
ended July 31, 1998.
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>
CALIFORNIA MONEY FUND
---------------------------------
SIX MONTHS YEAR ENDED
JULY 31, JANUARY 31,
1998 1998
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
Sold
Money Shares................. $ 2,053,152,037 $ 2,337,571,092
Dollar Shares................ 198,978,236 559,243,481
Issued as reinvestments of
dividends
Money Shares................. 386,729 1,014,667
Dollar Shares................ -- --
Redeemed
Money Shares................. (2,000,092,829) (2,204,755,948)
Dollar Shares................ (221,305,648) (555,014,141)
--------------- ---------------
Net increase.................. $ 31,118,525 $ 138,059,151
=============== ===============
</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.
On July 31, 1998, three shareholders held approximately 51% of the
outstanding shares of the California Money Fund.
13
<PAGE> 14
5. Capital Loss Carryover
At January 31, 1998, California Money Fund had a capital loss carryover
amounting to $146,216 expiring at various times from 2000 to 2005, and is
available to offset possible future capital gains.
6. Net assets
At July 31, 1998, net assets consisted of the following:
<TABLE>
<S> <C>
Paid-in capital.............. $622,153,926
Accumulated net realized loss
on investments............. (135,539)
------------
Total Net Assets............. $622,018,387
============
</TABLE>
14
<PAGE> 15
Directors
G. Willing Pepper
Chairman
William R. Howell
Rodney D. Johnson
Rudolph A. Peterson
Anthony M. Santomero
Officers
Thomas H. Nevin
President
Lisa M. Buono
Treasurer
W. Bruce McConnel, III
Secretary
Investment Adviser
BlackRock 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-SA-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, 1998
