[LOGO]
NEW ENGLAND FUNDS
WHERE THE BEST MINDS MEET
SEMIANNUAL REPORT AND PERFORMANCE UPDATE
NEW ENGLAND
TAX EXEMPT MONEY MARKET TRUST
[ARTWORK APPEARS HERE]
DECEMBER 31, 1995
<PAGE>
JANUARY 31, 1996
DEAR SHAREHOLDER,
ItOs a real pleasure to present to you the 1995 Semiannual Report for
New England Money Market Funds, containing your portfolio managersO
commentaries and complete financial information.
FAVORABLE ECONOMIC CONDITIONS IN 1995
In 1995 subdued economic growth with little or no inflation created a
very favorable backdrop for the bond and stock markets. Long term
interest rates dipped on the positive inflation news, with the yield
on the 30-year Treasury bond falling to a low of 5.95% at year end.
The stock market, fueled by lower interest rates and solid corporate
earnings growth, advanced 37.6%, as measured by the Standard & PoorOs
500 Index,* for its best showing since 1958. As interest rates
declined throughout the year, money market yields stabilized, after
having risen sharply in 1994.
NEW ENGLAND FUNDS - WHERE THE BEST MINDS MEET
Over this past year we launched our new corporate identity - Where the
Best Minds Meet -which we believe reflects the essence of New England
Funds. Our unique multiple adviser structure brings together some of
the best investment minds in the business. As recent examples,
consider New England Star Advisers Fund, managed by four prominent
equity advisers, and New England Star Worldwide Fund, a global fund
introduced this January which builds off the Star Advisers concept.
In addition, last May we launched New England Strategic Income Fund,
under the management of Dan Fuss of Loomis Sayles. One of the
industryOs most respected managers, Dan Fuss was named 1995Os OBond
Fund Manager of the YearO by Morningstar(TM) for his past record of
accomplishment in fund management at Loomis Sayles.**
* Standard & PoorOs 500 is an unmanaged index representing 500 major
companies, the majority of which are listed on the New York Stock
Exchange.
** Morningstar is a third party, independent mutual fund rating
service.
<PAGE>
1995 DALBAR AWARD FOR SERVICE EXCELLENCE
Where the Best Minds Meet also refers to your financial adviser and
all the people at New England Funds who provide you with quality
service. We are proud to report that in recognition of our ongoing
quality initiatives, New England Funds has been named a 1995 Quality
Tested Service Seal Winner by DALBAR, an independent mutual fund
service rating company. The coveted DALBAR award was given to only
seven companies for Oproviding the highest tier of service excellence
in the mutual fund industry.O
OUTLOOK FOR 1996
Looking ahead, we believe interest rates are likely to remain flat as
the economy continues on its slow, steady, non-inflationary growth
path. In this benign interest rate environment, we do not expect to
see higher money market yields. As always, we recommend that you
review your asset allocation program with your financial adviser, then
remain committed to that program to carry out its objectives.
We believe you will find your portfolio managerOs commentary
informative. If you have any questions or comments, please contact
your financial adviser or New England Funds directly at 800-225-5478.
Also, please contact New England Funds for a prospectus on any of the
funds mentioned above. The prospectus details investment objectives
and risks, as well as management fees and expenses. You should read
it carefully before investing or sending money.
Sincerely,
/s/Peter S. Voss /s/Henry L.P. Schmelzer
Peter S. Voss Henry L.P. Schmelzer
Chairman President
<PAGE>
NEW ENGLAND MONEY MARKET FUNDS
NEW ENGLAND MONEY MARKET FUNDS
1995 ECONOMIC OVERVIEW
In 1995 money market yields stabilized, after sharply rising
throughout 1994 as short-term rates headed upwards. In 1994, the
Federal Reserve Board hiked short-term rates seven times in an effort
to slow down the economy. But by mid-1995, economic growth had
tapered off, easing inflationary pressures and leading the markets to
anticipate possible interest rate cuts by the Fed. Long-term rates,
which are market driven, dipped dramatically throughout the first half
of 1995, in anticipation of imminent Fed easing. Finally, in July and
then again in December, the Fed moved to lower short-term rates by one-
quarter of a percentage point, signalling its belief that the economy
was on a slow growth, non-inflationary path.
During the year, money market yields, which tend to lag short-term
rates, stabilized in a narrow range. Meanwhile, total assets in money
market funds continued to increase as investors sought out the safety
and liquidity that money market funds offer.(1)
<PAGE>
NEW ENGLAND MONEY MARKET FUNDS
[PHOTO]
NEW ENGLAND CASH MANAGEMENT TRUST - MONEY MARKET SERIES AND
U.S. GOVERNMENT SERIES
Portfolio Manager: J. Scott Nicholson,
Back Bay Advisors, L.P.(R)
HOW YOUR FUND PERFORMED
The year-end yields of New England Cash Management Trust reflect the
overall drop in interest rates since the beginning of 1995. As of
December 31, 1995, the 7-day yield for the Money Market Series was
4.92%, while the 7-day yield for the U.S. Government Series was 4.71%.
The current yields for both Series continue to compare favorably with
the average bank money market deposit accounts (MMDAs), which were
yielding 3.23% at year end. (Source: Wall Street Journal, 1/4/96).(1)
HOW WE POSITIONED YOUR FUND
Throughout the year we correctly anticipated a prolonged period of low
inflation and declining interest rates. Consequently, we lengthened
considerably the average maturities of both Series to allow us to lock
in higher yields for as long as possible. At year end, the average
maturity of the Money Market Series was about 76 days, compared to 26
days at the end of 1994. The U.S. Government SeriesO average maturity
was just a few days less than that of the Money Market Series.
No matter what the economic climate and portfolio maturity, we manage
both funds conservatively at all
<PAGE>
NEW ENGLAND MONEY MARKET FUNDS
times, following strict investment guidelines to seek high current
income and stability.1 The U.S. Government Series offers investors an
added measure of credit safety by investing solely in instruments
backed by the U.S. government. The U.S. government guarantee applies
to the underlying securities and not to shares of the Fund.
OUTLOOK FOR OUR SHAREHOLDERS
We believe that the combination of slow economic growth and benign
inflation will continue over the next several months, prompting the
Federal Reserve Board to lower rates in order to sustain the current
rate of growth. Indeed, the Fed moved to lower rates in early January
1996, shortly after the end of this reporting period. The balanced
budget agreement, if achieved, should lead to reduced federal
spending, helping to reduce inflationary pressures. With this outlook,
we will maintain longer average maturities for both series, to help
sustain current income and minimize the impact of declining interest
rates.
NEW ENGLAND TAX EXEMPT
MONEY MARKET TRUST
[PHOTO]
Portfolio Manager: John Maloney,
Back Bay Advisors, L.P.(R)
HOW YOUR FUND PERFORMED
We are pleased to report that your FundOs 1995 perfor-mance was
excellent compared to other tax exempt money market funds. At year
end, the yield of the Tax Exempt Money Market Trust was 4.18%, which
is equivalent to a 6.92% taxable yield for an investor in the maximum
federal tax bracket of 39.6%. This per-
<PAGE>
NEW ENGLAND MONEY MARKET FUNDS
formance placed the fund in the top third of the 125 tax exempt money
market funds tracked by Lipper Analytical Services, a leading mutual
fund monitoring service.(2)
PORTFOLIO POSITIONING
Throughout the year we managed the fund actively to help minimize the
impact of declining interest rates. Our primary strategy was to extend
the average maturity of the portfolio so that we could lock in the
higher yields for as long as possible. By the end of October, the
average maturity of the fund had risen to 65 days.
SUPPLY/DEMAND FORCES
As we explained in our June report, the tax exempt money market is
driven more by supply/demand dynamics than by interest rate moves.
This is especially apparent at year end, when dealers start offering
higher yields on their securities in order to clear out inventories.
As a result, the market can experience a brief increase in yields.
Your fund sought to capture that opportunity by increasing its
investment in Ofloaters,O securities whose yields reset daily or
weekly and that are very responsive to a changing yield environment.
This higher percentage of floaters in the portfolio had the effect of
shortening the FundOs average maturity to 44 days at year end.
OUTLOOK FOR OUR SHAREHOLDERS
Although it appears that slowing economic activity may translate to a
less robust 1996, our overall outlook for the economy is favorable. We
expect continued slow
<PAGE>
NEW ENGLAND MONEY MARKET FUNDS
but positive growth, with no threat of inflation. In this environment,
we anticipate that the Federal Reserve will maintain an accommodative
stance on interest rates. Indeed, the Fed moved to lower rates again
in early January, 1996 shortly after the end of this reporting period.
We will keep the maturity of the portfolio in the longer end of its
range, so that we can lock in higher yields for as long as possible.
We intend to maintain the FundOs high credit quality, investing only
in top tier municipal securities. You can have the peace of mind of
knowing that no matter what the direction of the political and
economic winds, your fund will continue offering a competitive level
of income free from federal income taxes.(3)
(1) Money Market Funds are not insured or guaranteed by the U.S.
government. There can be no assurance that the Funds will
maintain a stable net asset value of $1.00 per share. MMDAsare
insured and offer fixed rates for specified periods.
(2) Past performance is no guarantee of future results.
(3) If you receive Social Security benefits, federal taxes may apply.
Alternative minimum taxes may apply to certain shareholders.
<PAGE>
NEW ENGLAND MONEY MARKET FUNDS
INVESTMENT RESULTS THROUGH DECEMBER 31, 1995
[TABLE]
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED 12/31/95*
<TABLE><CAPTION>
<S> <C> <C> <C>
6-MONTH 1-YEAR 5-YEAR
(CLASS A&B) (CLASS A&B) (CLASS A)
- ----------------------------------------------------------------------
NEW ENGLAND CASH MANAGEMENT TRUST- 5.01% 5.30% 4.13%
MONEY MARKET SERIES
DonoghueOs All-Taxable
Peer Group Average 5.31 5.49 4.18
NEW ENGLAND CASH MANAGEMENT TRUST- 4.96 5.17 4.02
U.S. GOVERNMENT SERIES
DonoghueOs U.S. Treasury
Peer Group Average 5.13 5.28 4.05
NEW ENGLAND TAX EXEMPT 3.29 3.48 2.94
MONEY MARKET TRUST
DonoghueOs Tax Free
Peer Group Average 3.30 3.40 2.88
<FN>
* Investment results in this table are from IBC/DonoghueOs Money Fund
Report(R) for the period ended 12/31/95. DonoghueOs taxable, U.S.
Treasury and tax-free peer group averages are unmanaged indices
that rank the performance of several categories of money market
funds. Investment results in this table represent effective annual
yields assuming reinvestment of dividends. Figures quoted above
represent past performance and are not a guarantee of future
results. Yields will fluctuate with changes in market conditions.
The TrustOs annualized yields for Class A and B for the 7-day
period ended December 31, 1995 were 4.90% (Money Market Series),
4.71% (U.S. Government Series) and 4.19% (Tax Exempt Money Market
Trust).
</TABLE>
<PAGE>
NEW ENGLAND MONEY MARKET FUNDS
GLOSSARY FOR MUTUAL FUND INVESTORS
TOTAL RETURN - The change in value of a mutual fund investment over a
specific time period, assuming all earnings are reinvested in
additional shares of the fund. Expressed as a percentage.
INCOME DISTRIBUTIONS - Payments to shareholders resulting from the net
interest or dividend income earned by a fundOs portfolio.
CAPITAL GAINS DISTRIBUTIONS - Payments to shareholders of profits
earned from selling securities in a fundOs portfolio. Capital gains
distributions are usually paid once a year.
YIELD - The rate at which a fund pays income. Yield calculations for 7-
day periods are standardized among mutual funds, based on a formula
developed by the Securities and Exchange Commission.
MATURITY - Refers to the period of time before principal repayment on
a bond is due. A bond fundOs Oaverage maturityO refers to the weighted
average of the maturities of all the individual bonds in the
portfolio.
DURATION - A measure, stated in years, of a bond or bond fundOs
sensitivity to interest rates. Duration is a means to directly compare
the volatility of different instruments. As a general rule, for every
1% move in interest rates, a fund is expected to fluctuate in value as
indicated by its duration. For example, if interest rates fall by 1%,
a fund with a duration of 4 years should rise in value 4%. Conversely,
the fund should decline by 4% if interest rates rise 1%.
TREASURIES - Negotiable debt obligations of the U.S. government,
secured by its full faith and credit. The income from treasury
securities is exempt from state and local income taxes, but not from
federal income taxes. There are three types of treasuries: Bills
(maturity of 3-12 months), Notes (maturity of 1-10 years) and Bonds
(maturity of 10-30 years).
MUNICIPAL BOND - A debt security issued by a state or municipality to
finance public expenditures. Interest payments are exempt from federal
taxes and in most cases from state and local income taxes. The two
main types are General Obligation (GO) Bonds, which are backed by the
full faith and credit and taxing powers of the municipality; and
Revenue Bonds, supported by the revenues from a municipal enterprise,
such as airports and toll bridges.
<PAGE>
{LOGO}
NEW ENGLAND FUNDS
WHERE THE BEST MINDS MEET
SEMIANNUAL REPORT AND PERFORMANCE UPDATE
NEW ENGLAND
MONEY MARKET
FUNDS
DECEMBER 31, 1995
<PAGE>
CASH MANAGEMENT TRUST-MONEY MARKET SERIES
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
INVESTMENTS-100.5% OF TOTAL NET ASSETS
<TABLE><CAPTION>
FACE INTEREST MATURITY
AMOUNT DESCRIPTION RATE DATE VALUE(A)
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
BANKERS ACCEPTANCE-2.6%
$5,000,000Bank of Nova Scotia 5.600% 2/28/96 $4,954,889
5,500,000 Bank of Nova Scotia 5.600% 3/01/96 5,448,667
7,000,000 Bank of Montreal 5.490% 4/22/96 6,880,440
-----------
Total Bankers Acceptance (Cost $17,283,996) 17,283,996
-----------
BANK NOTE-1.5%
10,000,000 First Union National
Bank of North
Carolina (d) 5.510% 5/10/96 10,000,000
-----------
Total Bank Note
(Cost $10,000,000) 10,000,000
-----------
CERTIFICATES OF DEPOSIT-8.0%
10,000,000 National
Westminister Bank USA 5.810% 1/31/96 10,000,000
8,000,000 Swiss Bank 5.770% 2/03/96 8,000,130
10,000,000 Rabobank Nederland 5.750% 2/09/96 9,999,039
5,000,000 National
Westminister Bank USA 5.730% 2/21/96 5,000,000
5,000,000 Swiss Bank 5.570% 6/03/96 5,001,019
15,000,000 Bank One Columbus 6.000% 9/12/96 15,000,000
Total Certificates of Deposit
(Cost $53,000,188) 53,000,188
----------
CERTIFICATES OF DEPOSIT (EURODOLLARS)-3.4%
15,000,000 Morgan Guaranty
Trust London 5.800% 2/07/96 15,000,299
8,000,000 National
Westminister Bank 5.570% 6/04/96 8,000,670
----------
Total Certificates of Deposit
(Eurodollars) (Cost $23,000,969) 23,000,969
----------
COMMERCIAL PAPER-82.8%
AUTOMOBILES-6.9%
4,000,000 Ford Motor Credit Corp. 6.050% 1/09/96 3,995,295
5,000,000 General Motors
Acceptance Corp. 5.770% 1/22/96 4,983,171
5,000,000 General Motors
Acceptance Corp. 5.850% 1/30/96 4,976,438
6,000,000 Ford Motor
Credit Corp. 5.670% 2/01/96 5,970,703
6,000,000 General Motors
Acceptance Corp. 5.050% 2/01/96 5,969,775
4,000,000 General Motors
Acceptance Corp. 5.770% 2/02/96 3,979,482
5,000,000 Ford Motor
Credit Corp. 5.680% 2/09/96 4,969,233
6,000,000 General Motors
Acceptance Corp. 5.730% 3/01/96 5,942,700
5,000,000 General Motors
Acceptance Corp. 5.580% 3/04/96 4,951,175
----------
45,737,972
----------
BANKING-18.8%
10,000,000 Canadian Imperial
Holding, Inc. 5.720% 1/10/96 9,985,700
5,000,000 Toronto Dominion
Holdings USA, Inc. 5.690% 1/23/96 4,982,614
10,000,000 Canadian Imperial
Holding, Inc. 5.725% 1/24/96 9,963,424
8,000,000 Norwest Corp. 5.700% 1/26/96 7,968,333
10,000,000 First Union Corp. 5.700% 1/30/96 9,954,083
<PAGE>
CASH MANAGEMENT TRUST-MONEY MARKET SERIES-CONTINUED
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
INVESTMENTS-100.5% OF TOTAL NET ASSETS
FACE INTEREST MATURITY
AMOUNT DESCRIPTION RATE DATE VALUE(A)
- ----------------------------------------------------------------------
BANKING-(CONTINUED)
$10,000,000 ABN/Amro North
America Finance, Inc. 5.620% 2/16/96 $9,928,189
10,000,000 Barclays Bank
of Canada 5.675% 2/23/96 9,916,451
5,000,000 J.P. Morgan & Co.,Inc. 5.580% 3/11/96 4,945,750
5,000,000 J.P. Morgan & Co.,Inc. 5.580% 3/15/96 4,942,650
5,000,000 Toronto Dominion
Holdings USA, Inc. 5.560% 3/28/96 4,932,817
6,000,000 First Union Corp. 5.460% 3/29/96 5,919,920
8,000,000 ABN/Amro North America
Finance, Inc. 5.500% 4/25/96 7,859,445
4,000,000 First Union Corp. 5.430% 5/02/96 3,926,393
7,000,000 Dresdner US Finance 5.440% 5/16/96 6,856,142
10,000,000 Toronto Dominion
Holdings USA, Inc. 5.350% 6/04/96 9,769,653
5,000,000 Royal Bank of Canada 5.360% 6/07/96 4,882,378
8,000,000 Royal Bank of Canada 5.360% 6/17/96 7,799,893
-----------
124,533,835
-----------
BEVERAGES-2.2%
5,000,000 Pepsico, Inc. 5.620% 2/22/96 4,959,411
10,000,000 Pepsico, Inc. 5.290% 9/03/96 9,639,200
-----------
14,598,611
-----------
DIVERSIFIED-3.3%
5,000,000 Hanson Finance PLC 5.700% 1/12/96 4,991,292
8,000,000 Hanson Finance PLC 5.700% 2/15/96 7,943,000
4,500,000 Hanson Finance PLC 5.640% 2/22/96 4,463,340
4,600,000 Hanson Finance PLC 5.580% 3/04/96 4,555,081
-----------
21,952,713
-----------
DRUGS-1.5%
5,000,000 American Home
Products Corp. 5.750% 1/18/96 4,986,424
5,000,000 American Home
Products Corp. 5.800% 1/23/96 4,982,278
-----------
9,968,702
-----------
FINANCE-30.4%
5,000,000 Beneficial Corp. 5.660% 1/03/96 4,998,428
5,000,000 Avco Financial
Services Inc. 5.730% 1/05/96 4,996,817
8,000,000 Avco Financial
Services Inc. 5.700% 1/11/96 7,987,333
4,000,000 Transamerica
Financial Group 5.650% 1/12/96 3,993,095
5,000,000 Associates Corp. of
North America 5.690% 1/18/96 4,986,565
5,000,000 American Express
Credit Corp. 5.650% 1/25/96 4,981,167
5,000,000 Transamerica
Financial Group 5.680% 1/29/96 4,977,911
7,000,000 Household
Finance Corp. 5.670% 2/05/96 6,961,413
5,000,000 Associates Corp.
of North America 5.680% 2/08/96 4,970,022
4,000,000 Avco Financial
Services Inc. 5.660% 2/16/96 3,971,071
5,000,000 Avco Financial
Services Inc. 5.670% 2/20/96 4,960,625
<PAGE>
CASH MANAGEMENT TRUST-MONEY MARKET SERIES-CONTINUED
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
INVESTMENTS-100.5% OF TOTAL NET ASSETS
FACE INTEREST MATURITY
AMOUNT DESCRIPTION RATE DATE VALUE(A)
- ----------------------------------------------------------------------
FINANCE-(CONTINUED)
$10,000,000 CIT Group Holdings 5.600% 2/20/96 $9,922,222
10,000,000 Transamerica
Financial Group 5.600% 2/23/96 9,917,556
5,000,000 Avco Financial
Services Inc. 5.640% 2/26/96 4,956,133
6,000,000 CIT Group Holdings 5.660% 2/26/96 5,947,173
5,000,000 Associates Corp.
of North America 5.690% 2/27/96 4,954,954
7,000,000 CIT Group Holdings 5.660% 2/28/96 6,936,168
5,000,000 CIT Group Holdings 5.650% 2/29/96 4,953,701
10,000,000 General Electric
Capital Corp. 5.600% 2/29/96 9,908,222
5,000,000 Paccar Financial Corp. 5.600% 3/01/96 4,953,333
5,000,000 American Express
Credit Corp. 5.600% 3/06/96 4,949,445
5,000,000 Avco Financial
Services Inc. 5.600% 3/08/96 4,947,889
5,000,000 Beneficial Corp. 5.600% 3/11/96 4,945,556
10,000,000 Beneficial Corp. 5.550% 3/18/96 9,881,292
6,000,000 Beneficial Corp. 5.550% 3/19/96 5,927,850
5,000,000 Beneficial Corp. 5.530% 4/01/96 4,930,107
5,000,000 American Express
Credit Corp. 5.550% 4/22/96 4,913,667
8,000,000 American Express
Credit Corp. 5.540% 4/29/96 7,853,498
06,000,000 General Electric
Capital Corp. 5.450% 5/03/96 5,888,275
3,500,000 Associates Corp.
of North America 5.380% 5/17/96 3,428,341
6,000,000 American Express
Credit Corp. 5.580% 5/24/96 5,866,080
4,000,000 American Express
Credit Corp. 5.420% 6/11/96 3,902,440
6,000,000 General Electric
Capital Corp. 5.530% 6/11/96 5,850,690
8,000,000 General Electric
Capital Corp. 5.530% 6/12/96 7,799,691
-----------
201,318,730
-----------
FOOD-1.5%
10,000,000 Sysco Corp. 5.600% 3/13/96 9,888,000
-----------
INSURANCE-0.9%
6,000,000 Prudential
Funding Corp. 5.790% 1/09/96 5,992,280
-----------
RETAIL-1.7%
5,000,000 Sears Roebuck
Acceptance Corp. 5.780% 1/17/96 4,987,156
6,000,000 J.C. Penney
Funding Corp. 5.630% 2/29/96 5,944,639
-----------
10,931,795
-----------
MANAGEMENT SERVICES-1.5%
6,000,000 PHH Corp. 5.680% 1/19/96 5,982,960
4,000,000 PHH Corp. 5.740% 1/19/96 3,988,520
-----------
9,971,480
-----------
SECURITIES-11.4%
8,000,000 Merrill Lynch & Co. 5.720% 1/16/96 7,980,933
5,000,000 Merrill Lynch & Co. 5.750% 1/25/96 4,980,833
7,000,000 Merrill Lynch & Co. 5.730% 1/29/96 6,968,803
<PAGE>
CASH MANAGEMENT TRUST-MONEY MARKET SERIES-CONTINUED
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
INVESTMENTS-100.5% OF TOTAL NET ASSETS
FACE INTEREST MATURITY
AMOUNT DESCRIPTION RATE DATE VALUE(A)
- ----------------------------------------------------------------------
SECURITIES-(CONTINUED)
$8,000,000 Merrill Lynch & Co. 5.760% 1/31/96 $7,961,600
10,000,000 Morgan Stanley
Group, Inc. 5.700% 2/12/96 9,933,500
5,000,000 Goldman Sachs Group 5.520% 3/21/96 4,938,667
10,000,000 Goldman Sachs Group 5.530% 3/22/96 9,875,575
4,000,000 Merrill Lynch & Co. 5.450% 3/29/96 3,946,711
7,000,000 Goldman Sachs Group 5.600% 4/09/96 6,892,200
8,000,000 Goldman Sachs Group 5.600% 4/12/96 7,873,067
4,250,000 Morgan Stanley
Group, Inc. 5.400% 7/16/96 4,124,413
------------
75,476,302
------------
TOBACCO-0.9%
6,000,000 Philip Morris
Capital Corp. 5.730% 1/04/96 5,997,135
------------
UTILITIES-GAS-1.8%
7,000,000 Michigan Consolidated
Gas Co. 5.600% 3/18/96 6,916,156
5,000,000 Michigan Consolidated
Gas Co. 5.600% 3/27/96 4,933,111
------------
11,849,267
------------
Total Commercial Paper (Cost $548,216,822) 548,216,822
------------
GOVERNMENT AGENCY-2.2%
4,696,061 Small Business
Administration
Floating Rate Note (b) 6.750% 1/02/96 4,696,061
4,595,553 Small Business
Administration
Floating Rate Note (b) 6.875% 1/02/96 4,595,553
5,093,107 Small Business
Administration
Floating Rate Note (b) 6.625% 1/02/96 005,093,107
------------
Total Government Agency (Cost $14,384,721) 14,384,721
------------
Total Investments-100.5% (Cost $665,886,696) (c) 665,886,696
Cash and Receivables 5,255,622
Liabilities (8,392,340)
------------
Total Net Assets-100% $662,749,978
============
<FN>
(a) See note 1a.
(b) Variable rate interest certificates are instruments whose
interest rates vary with changes in a designated base rate on a
specific date. These certificates reset interest quarterly based
on the prime interest rate.
The maturity dates shown are the next interest reset dates. The
final maturity dates on these certificates are 8/25/18, 4/25/19
and 7/25/20, respectively.
(c) The aggregate cost for federal income tax purposes was
$665,886,696.
Percentage of Net Assets invested in obligations of foreign banks or
foreign branches of U.S. Banks at December 31, 1995:
Canada 9.01% Netherlands 4.03%
Germany 1.03% Switzerland 1.96%
Great Britain 2.70%
<PAGE>
CASH MANAGEMENT TRUST-MONEY MARKET SERIES-CONTINUED
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
INVESTMENTS-99.8% OF TOTAL NET ASSETS
FACE INTEREST MATURITY
AMOUNT DESCRIPTION RATE DATE VALUE(A)
- ----------------------------------------------------------------------
GOVERNMENT AGENCY-13.1%
$3,056,544 Small Business
Administration
Variable Rate
Interest Certificate (b) 7.125% 1/02/96 $E3,056,544
04,249,689 Small Business Administration
Variable Rate
Interest Certificate (b) 6.500% 1/02/96 4,249,689
------------
Total Government Agency (Cost $7,306,233) 7,306,233
------------
U.S. GOVERNMENT-42.1%
5,000,000 U.S. Treasury Bill 5.270% 4/04/96 04,931,197
5,000,000 U.S. Treasury Bill 5.145% 5/02/96 4,912,821
5,000,000 U.S. Treasury Bill 5.410% 5/02/96 4,908,331
5,000,000 U.S. Treasury Bill 5.310% 5/30/96 4,889,375
4,000,000 U.S. Treasury Bill 5.120% 9/19/96 03,850,951
------------
Total U.S. Government (Cost $23,492,675) 23,492,675
------------
REPURCHASE AGREEMENTS-44.6%
11,900,000 Repurchase Agreement with Goldman
Sachs & Co. dated 12/29/95 at 5.75% to be
repurchased at $11,907,669 on 1/02/96
collateralized by $8,835,000 U.S. Treasury
Bond, 8.875% due 2/15/19, with a value of
$12,148,125. 11,900,000
13,000,000 Repurchase Agreement with State Street
Bank & Trust Co. dated 12/29/95 at 5.75%
to be repurchased at $13,008,306 on 1/02/96
collateralized by $12,915,000 U.S. Treasury
Bond, 6.125% due 5/15/98, with a value
of $13,081,604 13,000,000
------------
Total Repurchase Agreements (Cost $24,900,000) 24,900,000
------------
Total Investments-99.8% (Cost $55,698,908) (c) 55,698,908
Cash and Receivables 468,677
Liabilities (346,125)
------------
Total Net Assets-100% $55,821,460
============
<FN>
(a) See note 1a.
(b) Variable rate interest certificates are instruments whose
interest rates vary with changes in a designated base rate on a
specific date. These certificates reset interest quarterly based
on the prime interest rate.
The maturity date shown is the next interest reset date. The
final maturity on these certificates are 5/25/16 and 9/25/18.
(c) The aggregate cost for federal income tax purposes was
$ 55,698,908.
</TABLE>
<PAGE>
TAX EXEMPT MONEY MARKET TRUST
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
<TABLE><CAPTION>
TAX EXEMPT OBLIGATIONS-99.7% OF TOTAL NET ASSETS
FACE
AMOUNT ISSUER VALUE(A)
- ----------------------------------------------------------------------
<C> <S> <C>
ALABAMA-3.9%
$1,500,000 Port City Medical Clinic Board
4.000%, 1/05/96 $1,500,000
1,100,000 Winfield Industrial Revenue Bond
Floating Rate 5.250% (b) 1,100,000
----------
2,600,000
----------
CALIFORNIA-7.5%
1,500,000 Los Angeles County Trans. 4.500%, 7/01/96 1,505,025
2,000,000 San Bernardino County Trans 4.500%, 7/05/96 2,005,376
1,500,000 Sacramento County Revenue Bond
Floating Rate 5.300% (b) 1,500,000
----------
5,010,401
----------
DISTRICT OF COLUMBIA-4.8%
3,200,000 District of Columbia Floating Rate 6.000% (b) 3,200,000
----------
FLORIDA-14.1%
1,000,000 Alachua County Health Facilities
Commercial Paper 3.700%, 1/04/96 1,000,000
1,200,000 Sarasota County Public Hospital
Commercial Paper 4.000%, 1/09/96 1,200,000
500,000 Alachua County Health Facilities
Commercial Paper 3.650%, 1/11/96 500,000
600,000 Alachua County Health Facilities
Commercial Paper 3.950%, 1/12/96 600,000
500,000 Sunshine State Governmental Financing
Commercial Paper 3.750%, 2/05/96 500,000
600,000 Alachua County Health Facilities
Commercial Paper 3.750%, 2/07/96 600,000
500,000 Alachua County Health Facilities
Commercial Paper 3.650%, 2/09/96 500,000
1,340,000 Dade County Special Obligation
Floating Rate 5.650% (b) 1,340,000
3,100,000 Broward County Housing Finance Authority
Floating Rate 5.400% (b) 3,100,000
----------
9,340,000
----------
HAWAII-5.4%
600,000 State Department of Budget and
Finance Floating Rate 5.950% (b) 600,000
3,000,000 State Housing Finance & Development Corp.
Floating Rate 5.200% (b) 3,000,000
----------
3,600,000
----------
ILLINOIS-10.5%
1,000,000 Development Finance Authority
Pollution Control Commercial Paper
3.800%, 1/10/96 1,000,000
1,000,000 City of Chicago Commercial Paper
3.750%, 5/01/96 1,000,000
2,000,000 Health Facilities Authority
Floating Rate 5.700% (b) 2,000,000
1,000,000 Health Facilities Authority
Floating Rate 5.200% (b) 1,000,000
2,000,000 Saint Charles Industrial Development
Revenue Floating Rate 5.150% (b) 2,000,000
----------
7,000,000
----------
<PAGE>
TAX EXEMPT MONEY MARKET TRUST
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
FACE
AMOUNT ISSUER VALUE(A)
- ----------------------------------------------------------------------
INDIANA-5.6%
$ 500,000 Jasper Industrial Pollution Control
Revenue Commercial Paper
3.850%, 2/08/96 $500,000
3,240,000 Fort Wayne Hospital Floating Rate 5.600% (b) 3,240,000
----------
3,740,000
----------
IOWA-8.3%
2,500,000 Iowa Municipalities Workers
Bond Anticipation Note 4.100%, 7/01/96 2,500,000
3,000,000 Iowa School Corps Warrant Certificates
4.750%, 6/28/96 3,012,706
----------
5,512,706
----------
KENTUCKY-0.8%
500,000 Pendleton County Revenue Bonds 4.500%, 7/01/96 500,000
----------
LOUISIANA-11.6%
1,500,000 Louisiana State Recovery Floating Rate 6.000%(b) 1,500,000
3,200,000 Louisiana Public Facilities
Hospital Authority Floating Rate 5.650% (b) 3,200,000
3,000,000 New Orleans Exhibition Hall
Floating Rate 5.500% (b) 3,000,000
----------
7,700,000
----------
MARYLAND-3.8%
2,500,000 State Health & Higher Educational
Facilities Floating Rate 5.250% (b) 2,500,000
----------
MICHIGAN-1.5%
1,000,000 State Underground Floating Rate 5.150% (b) 1,000,000
----------
MINNESOTA-4.9%
490,000 Owatonna Hospital Revenue Floating
Rate 5.250% (b) 490,000
1,770,000 Mendota Heights Floating Rate 5.250% (b) 1,770,000
1,000,000 Mendota Heights Floating Rate 5.950% (b) 1,000,000
----------
3,260,000
----------
OREGON-0.5%
300,000 Port Portland Pollution Control
Floating Rate 6.000% (b) 300,000
----------
PENNSYLVANIA-3.6%
1,000,000 Northeastern Hospital Authority
Revenue Commercial Paper
3.850%, 1/08/96 1,000,000
500,000 Northeastern Hospital Authority
Revenue Commercial Paper
3.850%, 2/09/96 500,000
900,000 Bucks County Industrial Development
Floating Rate 5.250% (b) 900,000
----------
2,400,000
----------
<PAGE>
TAX EXEMPT MONEY MARKET TRUST
INVESTMENTS AS OF DECEMBER 31, 1995
(UNAUDITED)
FACE
AMOUNT ISSUER VALUE(A)
- ----------------------------------------------------------------------
SOUTH CAROLINA-2.3%
$1,500,000 Florence County Hospital
Revenue Floating Rate 5.200% (b) $1,500,000
----------
TEXAS-10.6%
1,000,000 North Central Health Facilities
Development Commercial Paper
3.950%, 1/11/96 1,000,000
1,000,000 Austin Utility Service
Revenue Commercial Paper 3.850%, 2/06/96 1,000,000
500,000 Austin Utility Service Revenue
Commercial Paper 3.850%, 2/07/96 500,000
1,000,000 North Central Health Facilities
Development Commercial Paper
3.950%, 2/08/96 1,000,000
500,000 Austin Utility Service
Commercial Paper 3.900%, 2/09/96 500,000
1,000,000 Austin Utility Service
Commercial Paper 3.650%, 4/04/96 1,000,000
1,500,000 State Tax & Revenue Anticipation
Notes 4.750%, 8/30/96 1,506,681
500,000 Nueces Country Health Facilities
Floating Rate 5.200% (b) 500,000
----------
7,006,681
----------
Total Investments-99.7%
(Identified Cost $66,169,788) (c) 66,169,788
Cash and Receivables 743,271
Liabilities (531,527)
----------
Total Net Assets-100% $66,381,532
===========
<FN>
(a) See Note 1a.
(b) Floating rate notes are instruments whose interest rates vary
with changes in a designated base rate (such as the prime
interest rate) on a specified date (such as coupon date or
interest payment date). These instruments are payable on demand
and are secured by letters of credit or other credit support
agreements from major banks.
(c) The aggregate cost for federal income tax purposes was
$66,169,788.
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
(UNAUDITED)
<TABLE><CAPTION>
CASH MANAGEMENT TRUST
--------------------- TAX EXEMPT
MONEY MARKET U.S.GOVERNMENT MONEY MARKET
SERIES SERIES TRUST
- ----------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments at value:
Securities $665,886,696 $30,798,908 $66,169,788
Repurchase agreements - 24,900,000 -
------------- ------------ -----------
Total investments 665,886,696 55,698,908 66,169,788
Cash 0 253,643 83,933
Receivable for:
Shares of the Trust sold 3,640,494 74,817 89,905
Securities sold 6,626 0 0
Interest 1,606,502 138,217 479,632
Prepaid registration expenses 2,000 2,000 7,000
Other receivables 0 0 82,801
------------- ------------ -----------
671,142,318 56,167,585 66,913,059
------------- ------------ -----------
LIABILITIES
Payable for:
Shares of the Trust redeemed 6,519,063 264,442 339,076
Dividends declared 368,038 28,345 30,860
Payable other 0 0 82,801
Payable to Custodian Bank 1,130,775 0 0
Accrued expenses:
Management fees 236,187 20,788 22,463
Deferred trusteesO fees 28,168 26,683 31,678
Other expenses 110,109 5,867 24,649
------------- ------------ -----------
8,392,340 346,125 531,527
------------- ------------ -----------
NET ASSETS $662,749,978 $55,821,460 $66,381,532
============= =========== ===========
Net Assets consist of:
Capital paid in $662,749,978 $55,821,460 $66,381,532
------------- ------------ -----------
NET ASSETS $662,749,978 $55,821,460 $66,381,532
============= =========== ===========
Shares of beneficial interest
outstanding, no par value
Class A shares 656,142,246 55,027,352 65,934,921
Shares of beneficial interest
outstanding, no par value
Class B shares 6,607,732 794,108 446,611
============= =========== ===========
Shares of beneficial
interest outstanding 662,749,978 55,821,460 66,381,532
============= =========== ===========
Net asset value per share
Class A and Class B shares* $1.00 $1.00 $1.00
============= =========== ===========
Cost of investments $665,886,696 $55,698,908 $66,169,788
============= =========== ===========
<FN>
* Shares of the Series are sold and redeemed at net asset value.
(Net assets/Shares of beneficial interest outstanding)
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
SIX MONTHS ENDED DECEMBER 31, 1994
(UNAUDITED)
<TABLE><CAPTION>
CASH MANAGEMENT TRUST TAX EXEMPT
---------------------
MONEY MARKET U.S.GOVERNMENT MONEY MARKET
SERIES SERIES TRUST
- ----------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest
$19,596,344 $1,759,082$1,325,845
------------- ------------ -----------
Expenses
Management fees 1,379,803 126,103 134,552
TrusteesO fees 11,803 9,384 8,590
Custodian 55,300 15,356 25,001
Transfer agent 1,268,834 63,158 70,151
Audit and tax services 13,500 13,500 18,000
Legal 9,310 9,310 9,310
Printing 77,474 4,329 4,360
Registration 70,269 21,467 23,519
Insurance 7,761 697 817
Miscellaneous 3,259 3,738 3,757
------------- ------------ -----------
2,897,313 267,042 298,057
Less-waiver of fee by investment adviser -
- -
(108,843)
------------- ------------ -----------
Net investment income 16,699,031 1,492,040 1,136,631
REALIZED GAIN ON INVESTMENTS-NET 78 - 61
------------- ------------ -----------
NET INCREASE IN
NET ASSETS FROM OPERATIONS $16,699,109 $1,492,040 $1,136,692
============= =========== ===========
</TABLE>
<PAGE>
STATEMENTs OF CHANGES IN NET ASSETS
(unaudited)
[TABLE]
[S]
FROM OPERATIONS
Net investment income
Net realized gain (loss) from investments
Increase in net assets from operations
FROM DISTRIBUTIONS TO SHAREHOLDERS
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares
Net asset value of shares issued in
connection with the reinvestment of
dividends from net investment income
Cost of shares redeemed
Increase (decrease) in net assets
derived from capital share transactions
Total increase (decrease) in net assets
NET ASSETS
Beginning of the period
End of the period
<PAGE>
STATEMENTs OF CHANGES IN NET ASSETS-(continued)
(unaudited)
<TABLE><CAPTION>
CASH MANAGEMENT TRUST
- ---------------------------------------------------------------------
MONEY MARKET SERIES U.S.GOVERNMENT
SERIES
- ---------------------------------------------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDEDSIX MONTHS ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1995 1995 1995 1995
- ---------------------------------------------------------------------
<C> <C> <C> <C>
$031,204,115 $016,699,031 $2,727,079 $1,492,040
794 78 -- --
- ---------------------------------------------------------------------
31,204,909 16,699,109 2,727,079 1,492,040
- ---------------------------------------------------------------------
(31,204,909) (16,699,109) (2,727,079) (1,492,040)
- ---------------------------------------------------------------------
1,103,481,598 497,280,600 107,616,822 47,742,599
30,418,561 15,986,103 2,654,498 1,432,444
(1,183,461,017) (500,325,181) (109,491,682) (53,096,076)
- ---------------------------------------------------------------------
(49,560,858) 12,941,522 779,638 (3,921,033)
- ---------------------------------------------------------------------
(49,560,858) 12,941,522 779,638 (3,921,033)
699,369,3146 49,808,456 58,962,855 59,742,493
- ---------------------------------------------------------------------
$649,808,456 $662,749,978 $59,742,493 $55,821,460
============ ============ =========== ===========
==========
<PAGE>
STATEMENTs OF CHANGES IN NET ASSETS-(continued)
(unaudited)
TAX EXEMPT
MONEY MARKET TRUST
- ---------------------------------
YEAR ENDED SIX MONTHS ENDED
JUNE 30, DECEMBER 31,
1995 1995
- ----------------------------------
<C> <C>
$2,218,561 $1,136,631
(415) 61
- ----------------------------------
2,218,146 1,136,692
- ----------------------------------
(2,218,146) (1,136,692)
- ----------------------------------
114,083,133 42,536,783
2,176,771 1,087,663
(115,082,758) (45,040,227)
- ----------------------------------
1,177,146 (1,415,781)
- ----------------------------------
1,177,146 (1,415,781)
66,620,167 67,797,313
- ----------------------------------
$67,797,313 $66,381,532
=============== ===========
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
(unaudited)
<TABLE><CAPTION>
FROM INVESTMENT OPERATIONS
NET NET
ASSET REALIZED AND TOTAL
VALUE AT NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT
OF PERIOD INCOME ON INVESTMENTS OPERATIONS
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH MANAGEMENT TRUST-MONEY
MARKET SERIES
Year Ended June 30,
1992 $1.00 $0.0450 - $0.0450
1993 1.00 0.0275 - 0.0275
1994 1.00 0.0264 - 0.0264
1995 1.00 0.0469 - 0.0469
Six Months Ended
December 31, 1995 1.00 0.0247 - 0.0247
CASH MANAGEMENT TRUST-
U.S. GOVERNMENT SERIES
Year Ended June 30,
1992 1.00 0.0449 - 0.0449
1993 1.00 0.0271 - 0.0271
1994 1.00 0.0257 - 0.0257
1995 1.00 0.0454 - 0.0454
Six Months Ended
December 31, 1995 1.00 0.0245 - 024555
TAX EXEMPT MONEY MARKET TRUST
Year Ended June 30,
1992 1.00 0.0337 - 0.0337
1993 1.00 0.0214 - 0.0214
1994 1.00 0.0208 - 0.0208
1995 1.00 0.0314 - 0.0314
Six Months Ended December 31, 19951.00 0.0163 - 0.0163
<FN>
(a) Including net realized gain on investments.
(b) In the case of New England Tax Exempt Money Market Trust, the
ratio of
operating expenses to average net assets without giving effect
to the
voluntary expense limitation described in Note 3 to the
Financial Statements
would have been 0.76%, 0.76%, 0.83% and 0.89% for the years
ended June 30,
1992, 1993, 1994, and 1995, and 0.89% for the six monthsended
December 31,
1995.
(c) Computed on an annualized basis
<PAGE>
FINANCIAL HIGHLIGHTS-CONTINUED
(UNADITED)
LESS DISTRIBUTIONS RATIOS/SUPPLEMENTAL DATA
- ------------------ -------------------------
RATIO OF RATIO OF
NET NET OPERATING NET
DIVIDENDS ASSET ASSETS EXPENSES TO INCOME TO
FROM NET VALUE AT TOTAL END OF AVERAGE AVERAGE
INVESTMENT TOTAL END OF RETURN PERIOD NET ASSETS NET ASSETS
INCOME(A) DISTRIBUTIONSPERIOD (%) (000) (%)(B)
(%)
- ----------------------- -------- ------ ------ ---------- ----------
<C> <C> <C> <C> <C> <C> <C>
$(0.0450) $(0.0450) $1.00 4.58 $925,077 0.73 4.56
(0.0275) (0.0275) 1.00 2.84 775,914 0.79 2.78
(0.0264) (0.0264) 1.00 2.68 699,369 0.84 2.65
(0.0469) (0.0469) 1.00 4.79 649,808 0.88 4.67
(0.0247) (0.0247) 1.00 2.58 662,749 0.88(c) 5.07(c)
(0.0449) (0.0449) 1.00 4.57 79,218 0.73 4.50
(0.0271) (0.0271) 1.00 2.80 64,595 0.78 2.73
(0.0257) (0.0257) 1.00 2.60 58,963 0.84 2.54
(0.0454) (0.0454) 1.00 4.64 59,742 0.92 4.53
(0.0245) (0.0245) 1.00 2.55 55,821 0.90(c) 5.03(c)
(0.0337) (0.0337) 1.00 3.41 65,753 0.56 3.38
(0.0214) (0.0214) 1.00 2.20 56,555 0.56 2.14
(0.0208) (0.0208) 1.00 2.10 66,620 0.56 2.08
(0.0314) (0.0314) 1.00 3.18 67,797 0.56 3.15
(0.0163) (0.0163) 1.00 1.71 66,382 0.56(c) 3.38(c)
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(UNAUDITED)
1. New England Cash Management Trust and New England Tax Exempt Money
Market Trust (the OTrustsO) are registered under the Investment
Company Act of 1940, as amended, as diversified, open-end investment
companies.
NEW ENGLAND CASH MANAGEMENT TRUST- The TrustOs Agreement and
Declaration of Trust permits the issuance of an unlimited number of
shares of beneficial interest, no par value, in separate Series, with
shares of each Series representing interests in a separate portfolio
of assets. Effective September 13, 1993, each Series began offering
two classes of shares, Class A and Class B, in order to enable
investors in either class of the New England Stock or Bond Funds to
invest in money market shares. Class A and B shares are identical
except that Class B shares may be subject to a contingent deferred
sales charge upon redemption if the shares were acquired by exchange
of Class B shares of a stock or bond fund. Each Series is separately
managed and has its own objectives and policies. The Trust is
comprised of the Money Market Series and the
U.S. Government Series.
NEW ENGLAND TAX EXEMPT MONEY MARKET TRUST-The TrustOs Agreement and
Declaration of Trust permits the issuance of an unlimited number of
shares of beneficial interest, no par value. Effective September 13,
1993, the Trust began offering two classes of shares, Class A and
Class B, in order to enable investors in either class of the New
England Stock or Bond Funds to invest in money market shares. Class A
and B shares are identical except that Class B shares may be subject
to a contingent deferred sales charge upon redemption if the shares
were acquired by exchange of Class B shares of a stock or bond fund.
The following is a summary of significant accounting policies followed
by the Trusts in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting
principles for investment companies.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those
estimates.
A. SECURITY VALUATION.The Trusts employ the amortized cost method of
security valuation as set forth in Rule 2a-7 under the Investment
Company Act of 1940 which, in the opinion of the trustees of each
Trust, represents the fair value of the particular security. The
amortized cost of a security is determined by valuing it at original
cost and thereafter amortizing any discount or premium on a straight-
line basis.
B. REPURCHASE AGREEMENTS.The Trusts, through their custodian, receive
delivery of the underlying securities collateralizing repurchase
agreements. It is the TrustsO policy that the market value of the
collateral be at least equal to 100% of the repurchase price. Back Bay
<PAGE>
NOTES TO FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 1995
(UNAUDITED)
Advisors, L.P. (OBack Bay AdvisorsO) is responsible for determining
that the value of the collateral is at all times at least equal to the
repurchase price. In connection with transactions in repurchase
agreements, if the seller defaults and the value of the collateral
declines or if the seller enters an insolvency proceeding, realization
of the collateral by the Trusts may be delayed or limited.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT Income.Security
transactions are accounted for on the trade date (date the order to
buy or sell is executed) and interest income is recorded on the
accrual basis. In determining the net gain or loss on securities sold,
the cost of securities is determined on the identified cost basis.
D. WHEN-ISSUED SECURITIES.Delivery and payment for securities
purchased on a when-issued or delayed delivery basis can take place
one month or more after the date of the transaction. The securities so
purchased are subject to market fluctuation during this period. At
December 31, 1995, there were no when-issued purchase commitments for
the Tax Exempt Money Market Trust.
E. FEDERAL INCOME TAXES.Each Series of the Cash Management Trust and
the Tax Exempt Money Market Trust intends to meet the requirements of
the Internal Revenue Code applicable to regulated investment
companies, and to distribute to its shareholders all of its taxable
and tax exempt income. Accordingly, no provision for federal income
tax has been made.
F. DIVIDENDS TO SHAREHOLDERS.Dividends are declared daily to
shareholders of record at the time and are paid monthly.
G. OTHER.Each of the Trusts invests primarily in a portfolio of money
market instruments maturing in 397 days or less whose ratings are
within the two highest ratings categories of a nationally recognized
rating agency or, if not rated, are believed to be of comparable
quality. The ability of the issuers of the securities held by the
Trusts to meet their obligations may be affected by foreign economic,
political and legal developments in the case of foreign banks or of
foreign branches or subsidiaries of U.S. banks, or domestic economic
developments in a specific industry, state or region.
2. INVESTMENT TRANSACTIONS.
For the period ended December 31, 1995:
NEW ENGLAND CASH MANAGEMENT TRUST-Purchase and sales or maturities of
short-term obligations, including securities purchased subject to
repurchase agreements, aggregated $2,185,694,938 and $2,185,440,908,
respectively, for the Money Market Series. Purchases and sales or
maturities of United States government obligations, including
securities purchased subject to repurchase agreements, aggregated
$542,939,004 and $545,006,243, respectively, for the U.S. Government
Series.
<PAGE>
NOTES TO FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 1995
(UNAUDITED)
NEW ENGLAND TAX EXEMPT MONEY MARKET TRUST-Purchases and sales or
maturities of short-term obligations aggregated $108,839,330 and
$119,916,700, respectively.
3.INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
A.During the six months ended December 31, 1995, the Trusts incurred
management fees payable to the TrustsO investment adviser, Back Bay
Advisors, certain officers and directors of which are also officers
and trustees of the Trusts. Back Bay Advisors is a wholly-owned
subsidiary of New England Investment Companies, L.P. (ONEICO) which is
a majority owned subsidiary of New England Mutual Life Insurance
Company.
New England Cash Management Trust-Under the Management agreements,
each Series pays Back Bay Advisors a monthly fee based on the annual
percentage rates of the corresponding levels of that SeriesO average
daily net asset values as set forth below:
ANNUAL PERCENTAGE RATE ANNUAL NET ASSET VALUE LEVELS
.-----------------------------------------------------------
.425% the first $500 million
.400% the next $500 million
.350% the next $500 million
.300% the next $500 million
.250% amounts in excess of $2 billion
During the six months ended December 31, 1995, the Money Market Series
incurred management fees of $1,379,803 and the U.S. Government Series
incurred management fees of $126,103.
Effective January 1, 1996, New England Funds Management, L.P. became
the adviser for the Fund with the aforementioned adviser being
retained as the FundOs sub-adviser.
NEW ENGLAND TAX EXEMPT MONEY MARKET TRUST-The management agreement
provides for a fee at the annual rate of 4U10 of 1% on the first
$100,000,000 of the TrustOs average daily net assets and 3U10 of 1% on
average daily net assets above this amount. During the six months
ended December 31, 1995, the Trust incurred gross management fees of
$134,552.
Back Bay Advisors has voluntarily agreed, until further notice, to
reduce the management fee and, if necessary, to assume Trust expenses
in order to limit the expenses to 0.5625 of 1% of average net assets
per year. As a result of exceeding the expense limitation, management
fees for the six months ended December 31, 1995 were reduced by
$108,843.
Effective January 1, 1996, New Engand Funds Management, L.P. became
the adviser for the Fund with the aforementioned adviser being
retained as the FundOs sub-adviser.
<PAGE>
NOTES TO FINANCIAL STATEMENTS-CONTINUED
DECEMBER 31, 1995
(UNAUDITED)
B. TRANSFER AGENT FEES.New England Funds is the transfer and
shareholder servicing agent for the Trusts. For the period ended
December 31, 1995, the New England Cash Management Trust and Tax
Exempt Money Market Trust paid $967,664 and $48,682, repectively, to
New England Funds as compensation for its services in that capacity.
4. TRUSTEES FEES AND EXPENSES.The Trusts do not pay any compensation
to officers or trustees who are directors, officers, or employees of
Back Bay Advisors, NEIC, New England Funds or their affiliates, other
than registered investment companies.
Each disinterested trustee is compensated by each series of the Cash
Management Trust and by the Tax Exempt Money Market Trust as follows:
TAX EXEMPT MONEY
MONEY MARKET SERIES U.S. GOVOT SERIES MARKET TRUST
- ----------------------------------------------------------------------
Annual Retainer $2,400 $1,600 $1,600
Meeting Fee $125/meeting $125/meeting $125/meeting
Committee Meeting Fee $75/meeting $75/meeting $75/meeting
Committee Chairman
Annual Retainer $125 $125 $125
A deferred compensation plan is available to members of the boards of
trustees. A trusteeOs participation in the plan is voluntary. Each
participating trustee will receive an amount equal to the value that
such deferred compensation would have, had it been invested in the
relevant series or Trust on the normal payment date.
5. CONCENTRATION OF CREDIT.The Tax Exempt Money Market Trust had the
following industry and state concentrations in excess of 10% on
December 31, 1995 as a percentage of the TrustOs total net assets:
Florida (14.1%), Government (20%), Hospitals (33%), Housing (17%),
Illinois (10.5%), Louisiana (11.6%), Texas (10.6%), and Utilities
(18%).
<PAGE>
SHAREHOLDER MEETING
(unaudited)
At a special shareholdersO meeting held on December 28, 1995,
shareholders of the Cash Management Trust-Money Market Series voted
for the following proposals:
<TABLE>
VOTED FOR VOTED ABSTAINED
AGAINST VOTES
- ------------------------------------------------------------------------
<S> <C> <C> <C>
1. To approve new
investment advisory
arrangements to be
effective upon the
merger of New England
Mutual Life Insurance
Company into
Metropolitan Life
Insurance Company,
such arrangements to
be substantially
identical to the
investment advisory
arrangements in
effect for the Fund
immediately prior to
such merger. 312,739,751.104 9,868,692.419 15,299,810.739
=============== ============= ==============
2. To approve a new
Advisory Agreement
between the Fund and
New England Funds
Management, L.P.
(ONEFMO); and 306,557,541.180 14,922,008.483 16,428,704.599
=============== ============= ==============
3. To approve a related
Sub-Advisory
Agreement between
NEFM and such FundOs
current adviser. 304,724,130.090 15,359,185.483 17,824,929.689
=============== ============= ==============
<PAGE>
SHAREHOLDER MEETING (continued)
BROKER
NON-VOTES TOTAL VOTES
- --------------------------------------
<C> <C>
337,908,254.262
337,908,254.262
337,908,254.262
</TABLE>
<PAGE>
SHAREHOLDER MEETING
(unaudited)
At a special shareholdersO meeting held on December 28, 1995,
shareholders of the Cash Management Trust-U.S. Government Series voted
for the following proposals:
<TABLE>
VOTED ABSTAINED
VOTED FOR AGAINST VOTES
--------- -------- ---------
<S> <C> <C> <C>
1. To approve new
investment advisory
arrangements to be
effective upon the
merger of New
England Mutual
Life Insurance Company
into Metropolitan
Life Insurance
Company, such
arrangements to be
substantially identical
to the investment
advisory arrangements
in effect for the Fund
immediately prior to
such merger. 32,565,182.860 718,072.010 937,076.000
============== =========== ===========
2. To approve a new
Advisory Agreement
between the Fund
and New England
Funds Management,
L.P. (ONEFMO); and 32,384,877.610 903,595.930 931,857.330
============== =========== ===========
3. To approve a related
Sub-Advisory
Agreement between
NEFM and such FundOs
current adviser. 31,813,980.580 1,230,162.380 1,176,187.910
============== ============= =============
<PAGE>
SHAREHOLDER MEETING (continued)
BROKER
NON-VOTES TOTAL VOTES
- ----------------------------------------
<C> <C>
34,220,330.870
34,220,330.870
34,220,330.870
</TABLE>
<PAGE>
SHAREHOLDER MEETING
(unaudited)
At a special shareholdersO meeting held on December 28, 1995,
shareholders of the Tax Exempt Money Market Trust voted for the
following proposals:
<TABLE>
VOTED ABSTAINED
VOTED FOR AGAINST VOTES
---------- ------- --------
<S> <C> <C> <C>
1. To approve new
investment advisory
arrangements to be
effective upon the
merger of New
England Mutual
Life Insurance
Company into
Metropolitan Life
Insurance Company,
such arrangements
to be substantially
identical to the
investment advisory
arrangements in
effect for the Fund
immediately prior to
such merger. 31,078,895.015 882,749.810 1,046,552.020
============== =========== =============
2. To approve a new
Advisory Agreement
between the Fund and
New England Funds
Management, L.P.
(ONEFMO); and 29,915,356.545 1,917,726.870 1,175,113.430
============== =========== =============
3. To approve a related
Sub-Advisory
Agreement between
NEFM and such FundOs
current adviser. 29,791,995.055 1,867,447.480 1,348,754.310
============== =========== =============
<PAGE>
SHAREHOLDER MEETING (continued)
BROKER
NON-VOTES TOTAL VOTES
- --------------------------------------
<C> <C>
33,008,196.845
33,008,196.845
33,008,196.845
</TABLE>
<PAGE>
INFORMATION ON CALL
YOU CAN CALL NEW ENGLAND FUNDS DAY OR NIGHT
Do you like to keep on top of your New England Funds but canOt always
call us during regular business hours? With Tele#Facts, New England
FundsO 24-hours a day automated telephone system, you can call us any
time thatOs convenient for you - day or night!
By calling 1-800-346-5984 from any Touch-Tone(R) telephone, you can:
- - Check the current value of your New England Fund account
- - Find out the current yield and total return on any New England Fund
- - Buy, sell or exchange fund shares
Just remember to have these four items with you before calling:
1.Your personal identification number which is the last four digits
of your Social Security number
2.The fund number - two- or three-digit number listed on the
Tele#Facts wallet card
3. Function number - listed on the Tele#Facts wallet card
4. Account number - listed on all your statements
You can get the information you need to use Tele#Facts from the back
of your statement. If you need another Tele#Facts wallet card or have
questions about getting started, please call us at 1-800-225-5478.
So go ahead and give Tele#Facts a try. We think youOll enjoy this easy-
to-use and convenient service from New England Funds!
<PAGE>
REGULAR INVESTING PAYS
Five Good Reasons to Invest Regularly
1. ItOs an easy way to build assets
2. ItOs convenient and effortless
3. It requires a low minimum to get started
4. It can help you reach important long-term goals like retirement
or college funding
5. It can help you benefit from the ups and downs of the market
With Investment Builder, New England FundsO automatic investment
program, you can invest as little as $50 a month in your New England
Fund automatically - without even writing a check. And, as you can see
from the chart below, your monthly investments can really add up over
time.
THE POWER OF MONTHLY INVESTING
[A line graph appears here, illustrating the hypothetical accumulation
of monthly investments at an 8% annual rate of return. The data points
of the graph are as follows:]
Monthly investments of $50
Years Growth of Monthly Investments
0 $0
5 $3,661
10 $9,040
15 $16,943
20 $28,555
25 $45,618
Monthly investments of $100
Years Growth of Monthly Investments
0 $0
5 $7,322
10 $18,079
15 $33,886
20 $57,111
25 $91,236
Monthly investments of $200
Years Growth of Monthly Investments
0 $0
5 $14,643
10 $36,158
15 $67,772
20 $114,222
25 $182,472
Monthly investments of $500
Years Growth of Monthly Investments
0 $0
5 $36,608
10 $90,396
15 $169,429
20 $285,555
25 $456,181
For illustrative purposes only. These figures represent hypothetical
accumulation at an 8% annual rate of return, and are not indicative of
future performance of any New England Fund. The value of a New England
Fund will fluctuate with changing market conditions.
This program cannot assure a profit nor protect against a loss in a
declining market. It does, however, ensure that you buy more shares
when the price is low and fewer shares when the price is high.
You can start an Investment Builder program with your current New
England Fund account, or with any of our other funds. To open an
Investment Builder account today, call your financial representative
or New England Funds at
1-800-225-5478.
<PAGE>
[LOGO]
NEW ENGLAND FUNDS
Where the best Minds MeetTM
399 Boylston Street
Boston, Massachusetts
02116
[LOGO]
QUALITY
TESTED SERVICE
1996
DALBAR
HONORS COMMITMENT TO:
INVESTORS
MM56
[LOGO] Printed On Recycled
Paper
<PAGE>
STOCK FUNDS
Growth Fund of Israel
International Equity Fund
Star Worldwide Fund
Growth Fund
Star Advisers Fund
Capital Growth Fund
Value Fund
Growth Opportunities Fund
Balanced Fund
BOND FUNDS
High Income Fund
Strategic Income Fund
Government Securities Fund
Bond Income Fund
Limited Term U.S. Government Fund
Adjustable Rate U.S. Government Fund
TAX EXEMPT FUNDS
Municipal Income Fund
Massachusetts Tax Free Income Fund
Intermediate Term Tax Free Fund of California
Intermediate Term Tax Free Fund of New York
MONEY MARKET FUNDS
Cash Management Trust
- Money Market Series
- U.S. Government Series
Tax Exempt Money Market Trust
To learn more, and for a free prospectus,
contact your financial representative.
New England Funds, L.P.
399 Boylston Street
Boston, MA 02116
Toll Free 800-225-5478
This material is authorized for distribution to prospective investors
when it is preceded or accompanied by the FundOs current prospectus,
which contains information about distribution charges, management and
other items of interest. Investors are advised to read the prospectus
carefully before investing.
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS.
(1) Rule lines for tables are omitted.
(2) Italic typefaces is displayed in normal type.
(3) Boldface type is displayed in capital letters.
(4) Headers (e.g. the names of the fund) and footers (e.g. page
numbers and OSee accompanying notes to financial statementsO) are
omitted.
(5) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(6) Bullet points, leaders and similar graphic symbols are omitted.
(7) Page numbering is different.
