<PAGE> 1
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INVESTMENT ADVISER AND MANAGER
Cardinal Management Corp.
155 East Broad Street
Columbus, Ohio 43215
DISTRIBUTOR
The Ohio Company
155 East Broad Street
Columbus, Ohio 43215
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Cardinal Management Corp.
215 East Capital Street
Columbus, Ohio 43215
CUSTODIAN
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
LEGAL COUNSEL
Baker & Hostetler
65 East State Street
Columbus, Ohio 43215
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
------------------------
This report has been prepared for the information of shareholders of Cardinal
Tax Exempt Money Trust and is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective Prospectus.
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CARDINAL FUNDS [LOGO]
CARDINAL
TAX EXEMPT
MONEY
TRUST
----------------------------------
SEMI-ANNUAL REPORT
----------------------------------
MARCH 31, 1995
THE OHIO COMPANY
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DEAR SHAREHOLDER:
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Each day brings new challenges, and the past six months have been no exception.
During the first half of our fiscal year, we witnessed the stabilization of
interest rates, improved corporate profitability, record highs for the stock
market and moderate inflation. Our outlook for the next six months calls for a
continuation of this favorable investment environment.
Against this backdrop, assets invested in mutual funds continued to rise.
According to recent industry studies, about one-fourth of Americans own mutual
funds today. Most cite investing for retirement and college education as their
primary goals. Over eight out of ten mutual fund investors rely upon a financial
advisor for mutual fund advice.
As a shareholder of Cardinal Tax Exempt Money Trust, your investment seeks to
maximize current income exempt from federal income tax while preserving capital
and maintaining liquidity. We remain dedicated to achieving these objectives and
will continue to work hard on your behalf.
The challenges Cardinal Tax Exempt Money Trust faces today seem more exciting
than ever. We have a sound operations staff, a strong portfolio management team,
dedicated employees and an excellent shareholder base. By maintaining our focus
on providing consistent performance and quality service, we hope to meet your
investment needs in the years to come.
Thank you for your investment in Cardinal Tax Exempt Money Trust.
/S/ Walter R. Chambers /S/ Frank W. Siegel
Walter R. Chambers Frank W. Siegel
Chairman President
1
<PAGE> 3
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MESSAGE FROM THE TRUST'S PORTFOLIO MANAGER
On Behalf of the Trustees and Officers of Cardinal Tax Exempt Money Trust, we
are pleased to present our March 31, 1995 Semi-Annual Report which includes
financial statements as well as the portfolio of investments.
Since we last wrote to you, your Trust produced an annualized adjusted yield for
the six month period October 1994 through March of this year of 2.9% and at this
writing, April 26, 1995, the 30 day adjusted yield is 3.35%.
It would appear that the Federal Reserve, after raising short term rates seven
times, is through for a while. They would conclude that nominal growth has
probably peaked based on the following annualized data for the 3 month period
ending March 31.
Nominal retail sales have slowed from a 14% pace to -2%.
Nominal manufacturing activity has slowed from a 15% pace to 3%.
Nominal consumer income has slowed from a 12% pace to 4%.
Nominal money supply (M1) has slowed from a 15% pace to 0%.
The Fed must, however, be watchful of the weak U.S. dollar and rising import
prices. Total import prices are now rising at a 5.7% year-over-year rate which
is more than double the inflation rate of domestically produced goods. In our
view the Fed will remain on hold, focused on the degree and speed of the
economic downshift in progress. However, this downshift follows five quarters of
4.5% growth and probably won't be enough to counteract the inflationary
pressures of a plunging dollar and the associated import inflation.
This would lead us to believe that the Fed could boost the Fed Funds rate 1/2
point later this summer, in either August or September.
In the meantime, we are focusing on maintaining a portfolio of securities with
great emphasis on safety, stability and high quality. We will continue to pursue
our objective of maximizing current income exempt from Federal income tax while
preserving capital and maintaining liquidity.
We look forward to serving you in the future and value your continued
confidence.
/S/ Hannibal L. Godwin
Hannibal L. Godwin
Vice President
As portfolio manager for Cardinal Tax Exempt Money Trust, Hannibal L. Godwin is
primarily responsible for the day-to-day management of the Trust's portfolio.
Mr. Godwin has 25 years of investment management experience and has been the
portfolio manager for Cardinal Tax Exempt Money Trust since its inception in
1983.
2
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CARDINAL TAX EXEMPT MONEY TRUST
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STATEMENT OF INVESTMENTS (AMOUNTS IN THOUSANDS)
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MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
2A-7* FINAL PRINCIPAL VALUE
SECURITIES MATURITY MATURITY AMOUNT (NOTE 1)
- ---------- -------- -------- --------- --------
<S> <C> <C> <C> <C>
MUNICIPAL SECURITIES 99.56%
Arapahoe County, Colorado Capital Improvement, ARN, currently 4.40%.... 9/01/95 8/31/26 $ 3,905 $ 3,905
Arapahoe County, Colorado Capital Improvement, ARN, currently 4.45%.... 9/01/95 8/31/26 800 800
Ashtabula County, Ohio, Brighton Manor Project, VRN, currently 4.30%... 4/05/95 12/01/16 2,200 2,200
Birmingham, Michigan, VRN, currently 4.50%............................. 4/06/95 12/01/18 1,000 1,000
Connecticut Development (Light & Power Co.), VRN, currently 4.10%...... 4/05/95 9/01/28 3,400 3,400
Cornell, Michigan, VRN, currently 3.60%................................ 4/03/95 3/01/15 3,100 3,100
Erie County, Ohio, Brighton Manor Project, VRN, currently 4.30%........ 4/05/95 11/01/16 600 600
Florida Housing Agency, VRN, currently 4.25%........................... 4/05/95 12/01/11 3,400 3,400
Grand Prairie, Texas Housing Finance Authority, VRN, currently 4.10%... 4/05/95 6/01/10 1,800 1,800
Greater East Texas Higher Education, VRN, currently 3.95%.............. 4/06/95 9/01/02 2,300 2,300
Hillsborough County, Florida, VRN, currently 3.90%..................... 4/03/95 9/01/25 3,300 3,300
Hockley County, Texas, PCRB, currently 4.75%........................... 9/01/95 3/01/14 1,750 1,750
Lincoln County, Wyoming, PCRB, currently 4.10%......................... 4/03/95 11/01/14 3,000 3,000
Lisle, Illinois, VRN, currently 4.10%.................................. 4/06/95 12/15/15 2,500 2,500
Louisiana Public Facilities Authority (Kenner Hotels), IRB, currently
4.15%................................................................ 4/03/95 12/01/15 2,000 2,000
Louisiana Public Facilities Authority, VRN, currently 4.05%............ 4/05/95 10/01/22 1,000 1,000
Marion County, West Virginia Waste Disposal, RB, currently 4.35%....... 4/05/95 10/01/17 1,000 1,000
Marion County, West Virginia Waste Disposal, RB, currently 4.25%....... 4/05/95 10/01/17 2,200 2,200
Marion County, West Virginia Waste Disposal, RB, currently 4.25%....... 4/05/95 10/01/17 1,000 1,000
Muldrow, Oklahoma Public Wks. Authority, IRB, currently 4.05%.......... 4/04/95 2/01/15 3,000 3,000
Ohio, Higher Education, RB, currently 4.00%............................ 4/06/95 12/01/06 1,280 1,280
Ohio, State of, Economic Development, VRN, currently 4.375%............ 4/06/95 10/01/98 1,000 1,000
Platte County, Wyoming, VRN, currently 4.15%........................... 4/03/95 9/26/96 2,500 2,500
Port of Anacortes, Washington, IRB, currently 3.85%.................... 5/09/95 6/15/19 3,000 3,000
Private College and University, Georgia, RB, currently 3.80%........... 4/13/95 10/01/15 3,000 3,000
Saint Charles, Louisiana, PCRB, currently 3.80%........................ 4/05/95 6/01/05 3,200 3,200
Sandusky County, Ohio, Brighton Manor Project, IRB, currently 4.30%.... 4/05/95 12/01/16 500 500
Springfield, Illinois, Second and Adams Project, RB, currently 4.25%... 4/04/95 12/01/15 1,200 1,200
Washington State Fin. Commiss. Rev., RB, currently 4.20%............... 4/04/95 1/01/10 4,000 4,000
West Feliciana, Louisiana, VRN, currently 3.90%........................ 4/03/95 12/01/15 1,200 1,200
--------- --------
TOTAL MUNICIPAL SECURITIES.................................... 64,135 64,135
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CASH EQUIVALENTS 0.38%
Federated Tax-Free Trust, currently 3.75%.............................. 4/07/95 N/A 246 246
--------- --------
TOTAL INVESTMENTS AT AMORTIZED COST 99.94%.................... $64,381 $64,381
======= ========
ARN -- Adjustable Rate Notes
VRN -- Variable Rate Notes
IRB -- Variable Rate Industrial Revenue Bonds
RB -- Variable Rate Revenue Bonds
PCRB -- Variable Rate Pollution Control Revenue Bonds
</TABLE>
* Rule 2a-7, of the Investment Company Act of 1940, defines maturity as the
longer of the period remaining until the next readjustment of the interest rate
or the period remaining until the principal amount can be recovered through
demand.
Cost also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
3
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CARDINAL TAX EXEMPT MONEY TRUST
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STATEMENT OF ASSETS & LIABILITIES (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
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MARCH 31, 1995 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities at amortized cost...................................... $64,381
Interest receivable.............................................................. 260
Receivable for investment securities sold........................................ 30
Other assets..................................................................... 41
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Total assets........................................................... 64,712
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LIABILITIES
Payable for Trust shares redeemed................................................ 232
Accrued investment management, accounting and transfer agent fees (note 2)....... 42
Other accrued expenses........................................................... 17
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Total liabilities...................................................... 291
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COMMITMENTS AND CONTINGENCIES (NOTE 3)
NET ASSETS -- applicable to 64,421,138 outstanding $.10 par value shares of
beneficial interest (unlimited number of shares authorized).................... $64,421
=================
NET ASSET VALUE PER SHARE........................................................ $ 1.00
=================
</TABLE>
See accompanying notes to financial statements.
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CARDINAL TAX EXEMPT MONEY TRUST
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STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS)
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SIX MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest................................................................. $1,310
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EXPENSES:
Investment management fees (note 2)...................................... 179
Transfer agent fees and expenses (note 2)................................ 29
Accounting fees (note 2)................................................. 9
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Total affiliated expenses...................................... 217
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Custodian fees........................................................... 6
Professional fees........................................................ 23
Reports to shareholders.................................................. 16
Trustees' fees........................................................... 11
Other expenses........................................................... 11
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Total non-affiliated expenses.................................. 67
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Total expenses................................................. 284
------
Net increase in net assets from operations..................... $1,026
======
</TABLE>
See accompanying notes to financial statements.
5
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CARDINAL TAX EXEMPT MONEY TRUST
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STATEMENTS OF CHANGES IN NET ASSETS (AMOUNTS IN THOUSANDS)
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FOR THE SIX MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
AND FOR THE YEAR ENDED SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
1995 1994
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<S> <C> <C>
FROM OPERATIONS:
Net increase in net assets from operations...................... $ 1,026 $ 1,601
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FROM DISTRIBUTIONS TO SHAREHOLDERS:
Total distributions to shareholders............................. (1,026) (1,601)
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FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from sale of shares.................................... 77,602 164,948
Reinvestment of distributions to shareholders................... 952 1,510
Cost of shares redeemed......................................... (94,664) (177,086)
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Decrease in net assets derived from capital share
transactions............................................... (16,110) (10,628)
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Net decrease in net assets.................................... (16,110) (10,628)
NET ASSETS -- beginning of period............................... 80,531 91,159
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NET ASSETS -- end of period..................................... $ 64,421 $ 80,531
========== ==============
</TABLE>
See accompanying notes to financial statements.
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CARDINAL TAX EXEMPT MONEY TRUST
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NOTES TO FINANCIAL STATEMENTS
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MARCH 31, 1995 (UNAUDITED)
(1) -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cardinal Tax Exempt Money Trust (the Trust) is a diversified, open-end
investment company created under the laws of Ohio by a Declaration of Trust
dated January 13, 1983 and is registered under the Investment Company Act of
1940. The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles for investment
companies.
Security Valuation--Securities are valued at amortized cost which approximates
fair value (premiums and discounts are amortized on a straight-line basis). The
use of this method requires the Trust to maintain a dollar-weighted average
portfolio maturity of 90 days or less and purchase only securities having a
remaining maturity of thirteen months or less.
Variable Rate Demand Municipal Securities--Variable and adjustable rate demand
municipal securities are tax-exempt obligations that provide for a periodic
adjustment in the interest rate paid on the securities and permit the holder to
demand payment of the unpaid principal balance, plus accrued interest, at
redemption dates provided by contract upon a specified number of days notice
either from the issuer or by drawing on a bank letter of credit or comparable
guarantee issued with respect to such security. The interest rates shown for
variable rate securities are the rates in effect on March 31, 1995.
Security Transactions and Investment Income--Security transactions are recorded
on the trade date. Interest income is recorded on the accrual basis.
Federal Income Taxes--No provision has been made for Federal taxes on the
Trust's income, since it is the policy of the Trust to comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies and to make sufficient distributions of taxable income and capital
gains within the required time to relieve it from all, or substantially all,
Federal income taxes.
Dividends to Shareholders--Dividends are declared and accrued daily and (for
those shareholders not electing cash distribution of dividends) automatically
reinvested monthly in additional shares from the sum of net investment income
and net realized short-term gains.
(2) -- TRANSACTIONS WITH AFFILIATES
As investment manager for the Trust, Cardinal Management Corp. (CMC), an
affiliated company, is allowed an annual fee of 0.5% of the average daily net
assets of the Trust. CMC has agreed that if the aggregate expenses of the Trust,
as defined, for any fiscal year exceed the expense limitation of any state
having jurisdiction over the Trust, CMC will refund to the Trust, or otherwise
bear, such excess. This limitation did not affect the calculation of the
management fee during the six months ended March 31, 1995.
(continued)
7
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CARDINAL TAX EXEMPT MONEY TRUST
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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MARCH 31, 1994 (UNAUDITED)
CMC also serves as the Trust's transfer agent and fund accountant. Transfer
agent service fees are based on a monthly charge per shareholder account plus
out-of-pocket expenses. Accounting service fees are based on the monthly average
net assets of the Trust. For the six months ended March 31, 1995 the Trust paid
or accrued $29,293 and $8,582 for transfer agent and fund accounting services,
respectively.
The Ohio Company, sole shareholder of CMC, serves as the Trust's distributor
and, in connection therewith receives purchase orders and redemption requests
relating to Trust shares. During the six months ended March 31, 1995 the Trust
incurred no expenses relating to the distribution of its shares.
(3) -- COMMITMENTS AND CONTINGENCIES
The Trust has an available $5,000,000 line of credit with its custodian, Fifth
Third Bank, which was unused at March 31, 1995. When used, borrowings under this
arrangement are secured by portfolio securities and can be used only for short
term needs of the Trust. No compensating balances are required and the
arrangement bears an interest rate of 106% of the custodian's prime lending
rate.
Fidelity Bond and Errors and Omissions insurance coverage for the Trust and its
officers and trustees has been obtained through ICI Mutual Insurance Company
(ICI Mutual), an industry-sponsored mutual insurance company. Included in other
assets of the Trust is a deposit of $13,291 for the initial capital of ICI
Mutual. The Trust is also committed to provide $39,873 should ICI Mutual
experience the need for additional capital contributions.
Included in other assets is a $27,000 certificate of deposit which
collateralizes a standby letter of credit in connection with the Trust's
participation in ICI Mutual. This amount is not available for investment.
(4) -- CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
1995 1994
----------- -------------
<S> <C> <C>
Shares sold..................................................... 77,601,794 164,947,710
Shares issued in connection with reinvestment of distributions
to shareholders............................................... 951,775 1,509,540
----------- -------------
78,553,569 166,457,250
Shares repurchased.............................................. (94,663,477) (177,085,583)
----------- -------------
Net decrease.................................................... (16,109,908) (10,628,333)
Shares outstanding:
Beginning of period............................................. 80,531,046 91,159,379
----------- -------------
End of period................................................... 64,421,138 80,531,046
============ ==============
</TABLE>
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CARDINAL TAX EXEMPT MONEY TRUST
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FINANCIAL HIGHLIGHTS
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Selected Data for Each Share of Capital Stock Outstanding Throughout Each
Period:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED SEPTEMBER 30,
MARCH 31, --------------------------------------------------------
1995 1994 1993 1992 1991 1990
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income............. 0.02 0.02 0.02 0.03 0.04 0.05
Less distributions:
Dividends......................... (0.02) (0.02) (0.02) (0.03) (0.04) (0.05)
---------- -------- -------- -------- -------- --------
Net Asset Value, ending............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======== ======== ========
Ratios/Supplemental Data:
Total return........................ 2.85% 1.78% 1.81% 2.62% 4.40% 5.41%
========== ======== ======== ======== ======== ========
Net assets, ending (000)............ $ 64,421 $ 80,531 $ 91,159 $ 70,054 $ 85,488 $ 82,988
========== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets............................ 0.78% 0.76% 0.77% 0.76% 0.72% 0.76%
========== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets................ 2.81% 1.78% 1.80% 2.59% 4.31% 5.26%
========== ======== ======== ======== ======== ========
</TABLE>
See Accompanying Notes to Financial Statements.
9
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[LOGO]
THE CARDINAL FUND INC.
CARDINAL GOVERNMENT SECURITIES TRUST
CARDINAL TAX EXEMPT MONEY TRUST
CARDINAL GOVERNMENT OBLIGATIONS FUND
CARDINAL BALANCED FUND
CARDINAL AGGRESSIVE GROWTH FUND
155 E. Broad St. Columbus, Ohio 43215
<TABLE>
<S> <C>
New Accounts and Toll-free Lines
General Information: In Ohio 800-282-9446
(614) 464-5511 Outside Ohio 800-848-7734
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000716313
<NAME> CARDINAL TAX EXEMPT MONEY TRUST
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 64,381
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 290
<ASSETS-OTHER> 41
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 64,712
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 291
<TOTAL-LIABILITIES> 291
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 64,421
<SHARES-COMMON-PRIOR> 80,531
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 64,421
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,310
<OTHER-INCOME> 0
<EXPENSES-NET> 284
<NET-INVESTMENT-INCOME> 1,026
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,026
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,026
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 77,602
<NUMBER-OF-SHARES-REDEEMED> 94,664
<SHARES-REINVESTED> 952
<NET-CHANGE-IN-ASSETS> (16,110)
<ACCUMULATED-NII-PRIOR> 1,601
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 179
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 284
<AVERAGE-NET-ASSETS> 72,956
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.02
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
