The California Muni Fund
Dear Fellow Shareholder:
Fixed income security prices began to recover in the first half of calendar
1995. The benchmark Treasury 7.5% "long bond" rose 15.9% after dropping 11.3%
last year. The Bond Buyer Index of forty actively traded investment grade
municipal bonds rose by a smaller 7.3% over this period.
After 1994's irrational decline in fixed income securities prices, sanity
began to return with the new year. Actually securities prices bottomed
coincidentally with the November 1994 Congressional elections, as financial
markets seemed to take heart from Republican promises to balance the federal
budget and reverse fifty years of "New Deal" legislation. As the new year
progressed, financial markets became increasingly secure upon mounting evidence
that legislators were actually keeping their promises.
Significant progress toward a balanced budget probably will not be evident
until 1998. But importantly, it appears that the glide path toward balance is
set. Meanwhile, economic growth slowed significantly during this year's first
half, and as growth has slowed, fears of a rise in inflation receded.
Interestingly, despite the bond market's fear of higher inflation in 1994, not
only did inflation not rise, but prospects began to improve for an actual
further decline in future price pressures.
These developments not only eliminated fears that the Federal Reserve would
endlessly tighten credit, but it actually gave rise to an expectation that some
of last year's restraint would be reversed. And indeed, the Federal Reserve
slightly eased its tight grip on credit early in July.
With interest rate pressures reversing, and bond prices appreciating,
California Muni Fund racked up a 20.7% total return for the six month period
ending June 30, 1995. This far exceeded the 7.3% increase in the Bond Buyer
municipal index, and it was the highest return of all municipal bond funds.
While the Fund's yield has been relatively low, the Fund's portfolio yield tends
to be sensitive to short term interest rates. So, with short term rates now
moving lower, the Fund's yield can be expected to rise in the period ahead.
California Muni Fund benefitted from the big decline in municipal issuance
that has been in progress over the past two years. But like all municipal bonds,
California state securities were negatively impacted during the spring as
government officials began discussing reforms to the federal income tax system.
The so-called "flat tax" seemed to receive the most attention. In a flat tax
system all income would be taxed at the same rate, and in its most extreme form
all deductions would be eliminated, including those for real estate taxes,
mortgage interest, municipal bond interest, and state and local income taxes.
The "Flat tax" is far from being enacted, and in our view it is unlikely to
ever be enacted. But merely mentioning the elimination of municipal bond
interest deductions hurt the municipal bond market, and it caused municipal
bonds to underperform. We think this is creating an opportunity for investors
because municipal bond prices have already adjusted to a flat tax. So, as tax
hysteria subsides, it is reasonable to believe that municipal bonds will perform
on a par with Treasuries, with the distinct possibility that municipals will
outperform Treasuries going forward.
1
<PAGE>
For California investors the Orange County default has cast a shadow over
all California issues. Indeed, California municipal securities are weaker than
ever before relative to other states' municipal credits. But the fact is that
California is fundamentally sound, and the Orange County default is likely to be
resolved with full payment to bondholders. California Muni Fund does not own any
securities directly affected by the Orange County situation. But because all
California credits have been affected indirectly, we believe they are grossly
undervalued. Thus, we expect California to outperform the municipal market
generally.
Easing fears of tax reform, a relative scarcity of tax-free securities, and
the positive fundamentals of slow economic growth and low inflation should
enable the fixed income market and the California Muni Fund to generate strong
returns for the remainder of the year. We thank you for your continued trust,
and we look forward to continuing to serve you in the future.
Sincerely,
Dr. Vincent J. Malanga
President
2
<PAGE>
The California Muni Fund
Portfolio Composition
June 30, 1995
By Type
(50.2%) FCLT
(6.7%) FCSI
(29.4%) LRIB
(4.7%) INLT
By Rating(D)
(51.8%) AAA
(1.7%) AA
(11.0%) A
(20.5%) BBB
(1.1%) BB
(4.4%) B
(9.6%) NR
FIXED COUPON BONDS
FCLT -- Long Term (maturity > 15 years) (includes long zero coupons)
FCSI -- Short or Intermediate Term - (maturity (LT) 15 years) (includes zero
coupon bonds)
VARIABLE RATE BONDS
RIB (Residential Interest Bond) type inverse floaters. These are leveraged bonds
whose coupon varies inversely with rates on short term companion issues, and
whose value will fluctuate by some multiple of the fluctuations in value of
a fixed rate bond with the same maturity and coupon as the underlying bond.
LRIB -- Long Term (maturity > 15 years)
SRIB -- Short or Intermediate Term ((LT) 15 year maturity)
IN (Index) based inverse floaters are bonds whose interest coupons vary
inversely with an index of short term interest rates and then revert to a
fixed rate mode. The duration and fluctuations on these bonds will be similar
to fixed rate bonds with the same maturity.
INLT -- Long Term (maturity > 15 years)
INSI -- Short or Intermediate Term (maturity (LT) 15 years)
(D)If a security has a split rating, the highest applicable rating is used,
including published ratings on identical credits for individual securities
not individually rated.
3
<PAGE>
Left Column
THE CALIFORNIA MUNI FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
ASSETS
Investment in securities
at value (cost $16,763,478) ........ $16,169,103
Interest receivable ................. 276,790
-----------
Total assets ..................... 16,445,893
-----------
LIABILITIES
Note payable (Note 6) ............... 2,517,039
Payables
Dividends .......................... 19,382
Investment securities purchased .... 1,574,330
Accrued expenses and other payables . 113,304
-----------
Total liabilities ................ 4,224,055
-----------
NET ASSETS consisting of:
Accumulated net realized loss ....... $ (406,401)
Unrealized depreciation of
securities ......................... (594,375)
Paid-in-capital applicable to
1,463,377 shares of beneficial
interest (Note 4) .................. 13,222,614
----------- -----------
$12,221,838
===========
NET ASSET VALUE PER SHARE ............. $8.35
=====
Right Column
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income .................................................. $ 525,145
EXPENSES (Notes 2 and 3)
Management fee ....................... $30,899
Custodian and accounting fees ........ 32,279
Transfer agent fees .................. 12,591
Professional fees .................... 49,398
Printing and postage ................. 14,317
Interest ............................. 24,769
Distribution expenses ................ 17,690
Shareholder communication ............ 6,000
Trustees' fees ....................... 2,533
Miscellaneous ........................ 12,257
-------
Total expenses .................... 202,733
----------
Net investment income ............. 321,412
----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments ..... 119,269
Unrealized appreciation of
investments for the period .......... 1,830,170
----------
Net gain on investments ........... 1,949,439
----------
NET INCREASE IN NET ASSETS FROM
OPERATIONS ........................... $2,270,851
==========
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 1995 December 31,
(Unaudited) 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment income .............................................. $ 321,412 $ 947,323
Net realized gain (loss) on investments ............................ 119,269 (525,670)
Unrealized appreciation (depreciation) of investments for the period 1,830,170 (3,571,076)
----------- -----------
Net increase (decrease) in net assets from operations ........... 2,270,851 (3,149,423)
DIVIDENDS PAID TO SHAREHOLDERS FROM
Investment income .................................................. (321,412) (947,323)
CAPITAL SHARE TRANSACTIONS (Note 4) ................................. (285,273) (1,625,159)
----------- -----------
Total increase (decrease) ....................................... 1,664,166 (5,721,905)
NET ASSETS:
Beginning of period ................................................ 10,557,672 16,279,577
----------- -----------
End of period ...................................................... $12,221,838 $10,557,672
=========== ===========
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
THE CALIFORNIA MUNI FUND
STATEMENT OF INVESTMENTS
June 30, 1995
(Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Issue(000) Type(0) Rating(00) Value
- ----------- ---------- ------- ---------- ------
<S> <C> <C> <C> <C>
$ 200,000 Albany, PFA, Library/Community Center Project, RB, 6.900, 9/01/12 ........ FCLT BAA1 $ 204,962
100,000 (DD)Arvin Development Corporation, COP, RB, 8.750, 9/01/18 ............... FCLT NR 24,015
9,395,000 (D)Bakersfield, COP, ETM, CAB, 4/15/21 ................................... FCLT AAA 1,999,538
200,000 (D)Beverly Hills, PFA, RB, IFRN*, MBIA Insured, 6/01/15 .................. LRIB AAA 178,318
250,000 Big Independent Cities, Pooled Insurance Program, RB, Series A,
8.250, 3/01/09 .......................................................... FCLT NR 259,233
100,000 CSAC Finance Corp, COP, Sutter County Health Facilities
Project, 7.800, 1/01/21 ................................................. FCLT BAA1 101,284
5,000 (D)California HFA, RB, Series A, 9.200, 8/01/15 .......................... FCLT AA 5,226
15,000 (D)California HFA, RB, Series A, CAB, 8/01/16 ............................ FCLT AA 1,572
710,000 California Health Facilities Authority, Valley Presbyterian
Hospital Project, RB, Series A, 9.000, 5/01/12 .......................... FCLT B- 709,950
200,000 (D)California Public Works Board, California State Universities
Project, 6.000, 9/01/15 FCLT A+ 193,846
70,000 (D)California State Military Department, RB, Series A, 9.750, 8/01/12 .... FCLT A+ 70,692
300,000 California Statewide Communities Development Authority,
Cedars Sinai Medical Project, COP, RB, IFRN*, 11/01/15 .................. LRIB A1 206,742
100,000 Capitola, Improvement Bonds, 8.100, 9/02/04 .............................. FCSI NR 103,243
20,000 Corona City, CRA, SFRM, RB, 9.000, 11/15/12 .............................. FCLT AA 20,302
300,000 (D)East Bay, Wastewater System Project, RB, Refunding, AMBAC
Insured, IFRN*, 6/01/20 ................................................. LRIB AAA 255,390
500,000 Foothill / Eastern Transportation Corridor Agency, Toll Road
Revenue, CAB, 1/01/26 ................................................... FCLT BBB- 57,800
250,000 Garden Grove, Community Development Agency, TAR, 5.875, 10/01/23 ......... FCLT A 225,265
1,170,000 Hawaiian Gardens, CRA, TAR, CAB, 12/01/16 ................................ FCLT BBB 251,889
250,000 Hawthorne, CRA, TAR, 6.750, 9/01/24 ...................................... FCLT BAA 251,243
200,000 Lake Elsinore, USD, Refunding, COP, 6.900, 2/01/20 ....................... FCLT BBB 202,638
2,250,000 Los Angeles, COP, Disney Parking Project, CAB, 9/01/16 ................... FCLT A- 516,893
1,125,343 Los Angeles, HFA, MFH Project C, CAB, RB, 12/01/29 ....................... FCLT NR 1,125,343
15,000 Los Angeles, Home Mortgage, RB, 9.000, 6/15/18 ........................... FCLT A 15,415
300,000 Los Angeles, Multiple Capital Facilities Project III, COP, IFRN*, 11/01/11 INLT A- 295,653
730,000 Madera, USD, COP, Educational Facilities Project, 5.750, 9/01/13 ......... FCLT BAA1 661,227
35,000 Modesto, Valley Oak Project, RB, 10.60, 5/01/09 .......................... FCSI NR 35,968
350,000 (D)New Haven, USD, AMBAC Insured, CAB, 8/01/16 ........................... FCLT AAA 95,606
225,000 New Haven, USD, COP, 7.500, 12/01/05 ..................................... FCSI BBB+ 237,737
250,000 (D)Northern California Power Agency, Multiple Capital Facilities,
RB, MBIA Insured, IFRN*, 8/01/25 ........................................ LRIB AAA 261,628
250,000 (D)Northern California Transmission Agency, CA-ORE
Transmission Project, RB, MBIA insured, IFRN*, 4/29/24 .................. LRIB AAA 210,085
250,000 Orange County, LTA, RB, IFRN*, 2/14/11 ................................... LRIB AA 253,433
250,000 Orange County, LTA, RB, IFRN*, 2/14/11 ................................... LRIB AAA 245,498
</TABLE>
5
<PAGE>
THE CALIFORNIA MUNI FUND
STATEMENT OF INVESTMENTS (continued)
June 30, 1995
(Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Issue(000) Type(0) Rating(00) Value
- ----------- ---------- ------- ---------- ------
<S> <C> <C> <C> <C>
$ 250,000 (D)Palmdale, SFRM, Series A, CAB, 3/01/17 ................................ FCLT AAA $ 62,908
200,000 Panoche, Water District, COP, 7.500, 12/01/08 ............................ FCSI BBB 215,290
250,000 (D)Rancho, Water District Financing Authority, RB, Prerefunded
@ 104, AMBAC Insured, IFRN*, 8/17/21 .................................... LRIB AAA 308,310
250,000 (D)Redding, Electric System, COP, Series A, FGIC Insured, IFRN*, 6/01/19 . LRIB AAA 222,970
500,000 (D)Rio, USD,COP, FSA Insured, Convertible, CAB, 9/01/28 .................. FCLT AAA 321,055
175,000 Riverside, HFA, Riverside Apartment Project, RB, 7.875, 1/01/19 .......... FCSI BB 181,675
300,000 Riverside, USD, 8.250, 11/01/08 .......................................... FCSI BBB 310,749
2,000,000 Salinas, Redevelopment Agency, TAB, CGIC Insured, Central
City Project, CAB, 11/01/22 ............................................. FCLT AAA 375,840
500,000 (D)San Bernardino, COP, Series B, MBIA Insured, IFRN*, 7/01/16 ........... INLT AAA 464,530
900,000 (D)San Bernardino, COP, Series PA-38, MBIA Insured, IFRN*, 7/01/16 ....... LRIB AAA 793,305
200,000 (D)San Diego Water Authority, COP, FGIC Insured, IFRN*, 4/22/09 LRIB AAA 201,074
250,000 San Joaquin Hills, RB, Transportation Corridor Agency, 7.000, 1/01/30 .... FCLT BBB 250,843
250,000 San Joaquin, COP, General Hospital Project, 6.625, 9/01/20 ............... FCLT A- 246,060
1,440,000 San Jose, CRA, TAB, MBIA Insured, IFRN*, 8/01/16 ......................... LRIB AAA 1,001,750
500,000 Santa Clara, HFA, MFH, Elana Gardens Project, GNMA
Collateralized, 6.40%, 6/20/35 .......................................... FCLT AAA 498,555
250,000 Solana County, IHFA, Northbay Hospital, COP, 7.750, 11/01/19 ............. FCLT BBB- 257,635
500,000 (D)Southern California Public Power Authority, AMBAC Insured,
IFRN*, 7/01/15 .......................................................... LRIB AAA 403,225
250,000 (D)Southern California Public Power Authority, FGIC Insured,
IFRN*, 7/01/17 .......................................................... LRIB AAA 215,345
250,000 (D)Tri City, HFA, FNMA/GNMA Collateralized, AMT, 6.450, 12/01/28 ......... FCLT AAA 253,578
200,000 (D)Trinity County, Public Uilities District, COP, AMT, 6.750, 4/01/23 .... FCLT BBB- 200,472
100,000 Upland, HFA, RB, 7.850, 7/01/20 .......................................... FCLT BBB 106,300
-----------
Total Investments (Cost $16,763,478**) ............................... $16,169,103
===========
</TABLE>
* Inverse Floating Rate Notes (IFRN) are instruments whose interest rates
bear an inverse relationship to the interest rate on another security or
the value of an index. (see Note 5).
** Cost is the same for Federal income tax purposes.
(D) Approximately $6,718,673 market value of securities are segregated in whole
or in part as collateral securing a line of credit.
(DD) Non-income producing security.
6
<PAGE>
THE CALIFORNIA MUNI FUND
STATEMENT OF INVESTMENTS (continued)
June 30, 1995
(Unaudited)
- -------------------------------------------------------------------------------
Legend
(0)Type FCLT -Fixed Coupon Long Term
FCSI -Fixed Coupon Short or Intermediate Term
LRIB -Residual Interest Bond Long Term
SRIB -Residual Interest Bond Short or Intermediate Term
INLT -Indexed Inverse Floating Rate Bond Long Term
INSI -Indexed Inverse Floating Rate Bond Short or Intermediate Term
(00)Ratings If a security has a split rating the highest applicable rating is
used, including published ratings on identicial credits for
individual securities not individually rated.
NR -Not Rated
(000)Issue AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
CAB Capital Appreciation Bond
CFA California Financing Authority
CGIC Capital Guaranty Insurance Company
COP Certificate of Participation
CRA California Redevelopment Agency
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
HFA Housing Finance Authority
IHFA Intercommunity Hospital Financing Authority
LTA Local Transportation Authority
MBIA Municipal Bond Insurance Assurance Corporation
MFH Multi Family Housing
PFA Public Financing Authority
RB Revenue Bond
SFRM Single Family Residential Mortgage
TAB Tax Allocation Bond
TAR Tax Allocation Refunding
USD Unified School District
7
<PAGE>
THE CALIFORNIA MUNI FUND
NOTES TO FINANICAL STATEMENTS
- -------------------------------------------------------------------------------
Left Column
1. Significant Accounting Policies
The California Muni Fund (the Fund) was organized as a
Massachusetts business trust and is registered as an open
end management investment company under the Investment
Company Act of 1940. The following is a summary of
significant accounting policies followed in the preparation
of its financial statements:
Valuation of Securities-Investments are stated at value
based on prices provided by a pricing service when such
prices are believed to reflect the fair market value of such
securities. Securities not priced in this manner are at the
mean of the last reported bid and asked prices provided by
principal market makers and recognized dealers in such
securities. Other assets and securities for which no
quotations are readily available are valued in good faith
using methods determined by the Board of Trustees.
Federal Income Taxes-It is the Fund's policy to comply
with the requirements of the Internal Revenue Code
applicable to "regulated investment companies" and to
distribute all of its taxable and tax exempt income to its
shareholders. Therefore, no provision for federal income tax
is required.
Distributions-The Fund declares dividends daily from its
net investment income and pays such dividends on the last
business day of each month. Distributions of net capital
gains, if any, realized on sales of investments are made
annually, as declared by the Fund's Board of Trustees.
Dividends are reinvested at the net asset value unless
shareholders request payment in cash.
General-Securities transactions are accounted for on a
trade date basis. Interest income is accrued as earned.
Premiums and original issue discount on securities purchased
are amortized over the life of the respective securities.
Realized gains and losses from the sale of securities are
recorded on an identified cost basis.
2. Investment Advisory Fees and Other Transactions With
Affiliates
Under a Management Agreement, the Fund pays an
investment management fee to Fundamental Portfolio Advisors,
Inc. (the Manager) equal to 0.5% of the Fund's average daily
net asset value up to $100 million and decreasing by .02% of
each $100 million increase in net assets down to 0.4% of net
assets in excess of $500 million.
Under the Agreement, the Manager is required to
reimburse to the Fund an amount not exceeding the amount of
fees payable to the Manager under the Agreement for any
fiscal year, if, and to the extent that the aggregate
operating expenses of the Fund for any fiscal year
(including the fees payable to the Manager, but excluding
interest expense, taxes, brokerage fees and commissions,
extraordinary expenses beyond the control of the Manager and
other fees and expenses properly excludable from the
definition of "aggregate annual expenses" under California
law) exceed any expense limitation imposed under California
law. No such reimbursements was required during the six
months ended June 30, 1995.
Right Column
Pursuant to a Distribution Plan (the Plan) adopted
pursuant to Rule12b-1, promulgated under the Investment
Company Act of 1940, the Fund may pay certain promotional
and advertising expenses and may compensate certain
registered securities dealers and financial institutions for
services provided in connection with the processing of
orders for purchase or redemption of the Fund's shares and
furnishing other shareholder services. Payments by the Fund
shall not in the aggregate, in any fiscal year, exceed 0.5%
of the average daily net assets of the Fund.
Under a Distribution Agreement with Fundamental Service
Corporation (FSC), an affiliate of the Manager, amounts are
paid under the Plan to compensate FSC for the services it
provides and the expenses it bears in distributing the
Fund's shares to investors. Fees for those services
aggregated $9,600 for the six months ended June 30, 1995.
The Fund compensates Fundamental Shareholder Services,
Inc., an affiliate of the Manager, for the services it
provides under a Transfer Agent and Service Agreement.
Transfer agent fees for the six months ended June 30, 1995
are set forth in the statement of operations.
3. Trustees' Fees
All of the Trustees of the Fund are also directors or
trustees of two other affiliated mutual funds for which the
Manager acts as investment adviser. For services and
attendance at board meetings and meetings of committees
which are common to each Fund, each Trustee who is not
affiliated with the Manager is compensated at the rate of
$6,500 per quarter pro rated among the funds based on their
respective average net assets. 4. Shares of Beneficial
Interest
As of June 30, 1995 there were an unlimited number of
shares of beneficial interest (no par value) authorized and
capital paid in amounted to $13,222,614. Transactions in
shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1995 December 31, 1994
---------------------------------- ---------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold ............................. 1,624,738 $13,314,100 1,971,607 $15,716,250
Shares issued on reinvestment of
dividends .............................. 31,024 244,827 69,822 570,507
Shares redeemed ......................... (1,679,320) (13,844,200) (2,270,355) (17,911,916)
---------- ----------- ---------- -----------
Net increase (decrease) ................. (23,558) ($285,273) (228,926) ($1,625,159)
========== =========== ========== ===========
</TABLE>
5. Complex Securities and Investment Transactions
Inverse Floating Rate Notes:
The Fund invests in variable rate securities commonly
called "inverse floaters". The interest rates on these
securities have an inverse relationship to the interest rate
of other securities or the value of an index. Changes in
interest rate on the other security or index inversely
affect the rate paid on the inverse floater, and the inverse
floater's price will be more volatile than that of a fixed
rate bond.
8
<PAGE>
THE CALIFORNIA MUNI FUND
NOTES TO FINANICAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
Left Column
Recent interest rate movements and other market factors have
substantially reduced the liquidity of certain IFRN's.
Investment Transactions:
During the six months ended June 30, 1995, the cost of
purchases and proceeds from sales of investment securities,
other than short-term obligations, were $6,390,036 and
$3,977,694 respectively.
As of June 30, 1995 the net unrealized depreciation of
portfolio securities amounted to $594,375 composed of
unrealized appreciation of $362,198 and unrealized
depreciation of $956,573.
6. Line of Credit
The Fund has a line of credit agreement with its
custodian bank collateralized by portfolio securities.
Borrowings under this agreement bear interest linked to the
bank's prime rate. The maximum month end and the average
borrowings outstanding during the period ended June 30,
1995, were $2,517,039 and $598,473, respectively. The
average interest rate for the period was 8.50%.
Right Column
7. Litigation
The Fund has been named as a defendant in a class action
lawsuit alleging that the Fund invested in certain
derivative financial instruments that were inconsistent with
the Fund's stated investment objectives. The suit claims
that the defendants, which include the Fund's advisor,
distributor, and certain control persons, are liable for
damages because there existed material misstatements or
omissions in the prospectuses that rendered them misleading.
Management has entered into negotiations with the
plaintiffs who have consented to a series of adjournments of
all operative dates in the litigation. Management is hopeful
that these negotiations will lead to a resolution; if that
is not possible, the Fund intends to contest the case
vigorously. This lawsuit is in a preliminary state and
involves significant complexities which result in an
inability to determine whether any liability will result and
if so, whether any such liability would be significant to
the financial position of the Fund. Accordingly, no amount
has been accrued in the financial statements with resect to
this matter.
9
<PAGE>
THE CALIFORNIA MUNI FUND
NOTES TO FINANICAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
8. Selected Financial Information
Six Months Years Ended December 31,
Ended ----------------------------------------
June 30, 1995 1994 1993 1992 1991
------------- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net Asset Value, Beginning of Period ........................ $ 7.10 $ 9.49 $ 8.81 $ 8.80 $ 8.64
------ ------ ------ ------ ------
Income from investment operations:
Net investment income ....................................... .208 .553 .563 .604 .571
Net realized and unrealized gains (losses)
on investments ............................................ 1.250 (2.390) .876 .010 .160
------ ------ ------ ------ ------
Total from investment operations .................... 1.458 (1.837) 1.439 .614 .731
------ ------ ------ ------ ------
Less Distributions:
Dividends from net investment income ........................ (.208) (.553) (.563) (.604) (.571)
Dividends from net realized gains ........................... - - (.196) - -
------ ------ ------ ------ ------
Total distributions ................................. (.208) (.553) (.759) (.604) (.571)
------ ------ ------ ------ ------
Net Asset Value, End of Period .............................. $ 8.35 $ 7.10 $ 9.49 $ 8.81 $ 8.80
====== ====== ====== ====== ======
Total Return ................................................ 20.69% (19.89%) 16.80% 7.23% 8.75%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) ............................. 12,222 10,558 16,280 11,549 9,669
Ratios to Average Net Assets:
Interest expense .......................................... .40%** .98% .39% .16% .14%
Operating expenses 2.88%** 2.50% 1.77%* 1.47%* 2.24%
------ ------ ------ ------ ------
Total expenses ...................................... 3.28%** 3.48% 2.16%* 1.63%* 2.38%
====== ====== ====== ====== ======
Net investment income ............................... 2.58% 6.80% 6.04%* 6.87%* 6.58%*
Portfolio turnover rate ..................................... 36.81% 15.88% 51.26% 18.91% 47.34%
BANK LOANS
Amount outstanding at end of period (000 omitted) ........... $2,517 $1,292 $3,714 $ 0 645
Average amount of bank loans outstanding during the period
(000 omitted) ............................................. $ 598 $1,690 $ 958 274 155(D)
Average number of shares outstanding during the period
(000 omitted) ............................................. 1,547 1,711 1,517 1,214 1,115(D)
Average amount of debt per share during the period .......... $ .39 $ .95 $ .63 $ .23 $ .14
<FN>
(D) Monthly average.
* These ratios are after expense reimbursement of .50% for each of the years
ended December 31, 1993, and 1992.
** Annualized.
</FN>
</TABLE>
10
<PAGE>
(Left Column)
THE CALIFORNIA MUNI FUND
90 Washington Street
New York NY 10006
1-800-322-6864
This report and the financial statements contained
herein are submitted for the general information of
the shareholders of the Fund. The report is not
authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an
effective prospectus.
(Right Column)
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THE CALIFORNIA MUNI FUND
Semi-Annual Report
June 30, 1995
(Unaudited)
THE CALIFORNIA (LOGO) MUNI FUND
Double
Tax-Free Investing
(LOGO) FUNDAMENTAL
Fundamental Family of Funds
