<TABLE>
<CAPTION>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 1999
Principal Maturity Interest
Amount Date Rate Value
---------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (97.5%)
ESCROWED TO MATURITY (a) (7.2%)
$ 500,000 Chicago, Illinois......................................... 1/1/03 6.500% $ 534,580
1,000,000 Honolulu, Hawaii City & County............................ 11/1/03 5.250 1,034,760
1,570,000 Mashantucket Western Pequot Tribe, Connecticut............ 9/1/03 6.250 1,678,817
2,150,000 New Jersey State Transportation Authority................. 6/15/00 6.000 2,200,762
-----------
TOTAL ESCROWED TO MATURITY ............................. $ 5,448,919
-----------
GENERAL OBLIGATIONS (13.5%)
$ 350,000 Du Page County, Illinois.................................. 1/1/03 5.000% $ 356,748
1,000,000 El Paso, Texas............................................ 8/15/01 7.000 1,056,920
1,000,000 Hawaii State.............................................. 11/1/01 5.850 1,035,160
1,000,000 Honolulu, Hawaii, City & County........................... 7/1/02 7.250 1,077,540
1,000,000 Massachusetts State....................................... 11/1/01 5.500 1,031,500
1,000,000 Milwaukee, Wisconsin, Sewer Revenue...................... 10/1/02 6.700 1,072,670
1,000,000 Pittsburgh, Pennsylvania.................................. 3/1/03 5.000 1,018,130
1,075,000 Round Rock, Texas, Independent School District............ 8/1/01 7.000 1,134,910
2,000,000 San Antonio, Texas........................................ 8/1/02 8.000 2,207,980
275,000 Washington State.......................................... 1/1/01 6.500 284,361
-----------
TOTAL GENERAL OBLIGATIONS .............................. $10,275,919
-----------
PRE-REFUNDED (a) (64.3%)
$1,275,000 Akron, Ohio, Bath Copley Township Hospital................ 11/15/00 7.250% $ 1,358,372
900,000 Arizona State............................................. 7/1/02 7.000 977,283
500,000 Arizona State Transportation.............................. 7/1/01 6.350 528,930
515,000 Augusta, Georgia, Water and Sewer......................... 5/1/02 6.500 553,754
200,000 Berkeley County, South Carolina, Water & Sewer............ 6/1/01 7.000 214,612
250,000 Bucks County, Pennsyvania, Water and Sewer Authority...... 12/1/02 6.750 269,850
1,000,000 Burke County, Georgia, Development Authority
Pollution Control....................................... 1/1/03 7.700 1,133,210
275,000 Cache County, Utah, School District....................... 6/15/03 5.900 292,556
1,000,000 Charlotte, North Carolina................................. 2/1/04 5.800 1,071,750
1,000,000 Chicago, Illinois......................................... 7/1/02 6.850 1,086,380
500,000 Chicago, Illinois Center Public Liabrary.................. 7/1/02 6.850 543,190
1,500,000 Delaware County, Pennsylvania............................. 11/15/02 6.000 1,580,190
465,000 Delaware Transportation Authority System.................. 7/1/01 6.000 482,637
1,500,000 Denver, Colorado, City and County......................... 11/15/02 7.500 1,676,190
500,000 Florida State Department of National
Resource Preservation................................... 7/1/01 6.700 534,875
1,000,000 Harris County, Texas...................................... 10/1/02 5.750 1,044,120
365,000 Harrisburg, Pennsylvania, City & County................... 9/1/03 5.875 389,780
900,000 Hawaii State.............................................. 11/1/01 6.000 945,027
2,100,000 Illinois Health Facility Authority........................ 5/1/02 7.250 2,291,940
415,000 Illinois State Sales Tax Revenue.......................... 6/15/01 6.000 430,255
1,007,000 Indiana Transportation Finance Authority.................. 11/1/02 6.250 1,086,462
1,000,000 Indianapolis, Indiana, Public Improvement................. 1/1/02 6.700 1,075,840
600,000 Kentucky State Property & Building Commission............. 8/1/01 6.500 640,632
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 1999 (continued)
Principal Maturity Interest
Amount Date Rate Value
---------- -------- -------- -----------
<S> <C> <C> <C> <C>
PRE-REFUNDED (continued)
$ 500,000 Kentucky State Property & Building Commission............. 2/1/01 6.875% $ 531,305
1,000,000 Kentucky State Turnpike Authority......................... 5/15/00 7.250 1,047,440
250,000 King County, Washington................................... 12/1/00 6.750 260,373
1,000,000 Martinsville, Virginia, Industrial Developement
Authority............................................... 1/1/01 7.000 1,041,110
500,000 Maryland State Health Facilities Authority................ 7/1/01 6.750 535,350
575,000 Maryland Water Quality Financing Authority................ 9/1/00 7.250 610,052
1,150,000 Massachusetts State Health & Education Facility........... 7/1/00 8.000 1,222,657
700,000 Memphis, Tennesse Electric Systems Revenue................ 1/1/04 5.900 739,487
500,000 Mesa, Arizona............................................. 7/1/03 5.700 530,485
230,000 Middlesex County, New Jersey, Utilities Authority......... 3/15/01 6.500 243,694
1,000,000 Nebraska Public Power District Revenue.................... 1/1/03 6.125 1,074,970
1,550,000 Nebraska Public Power District Revenue.................... 1/1/03 5.700 1,645,015
1,705,000 Nevada State.............................................. 10/1/02 6.250 1,820,173
400,000 New York State Dormitory Authority........................ 5/15/02 6.750 434,884
165,000 New York State Local Government Assistance Corp........... 4/1/01 7.250 177,085
140,000 New York State Medical Care Facilities
Finance Agency.......................................... 2/15/01 7.500 150,171
225,000 Ohio State Building Authority, Correctional Facility...... 10/1/03 5.000 229,907
1,400,000 Phoenix, Arizona Civic Improvement Waste and Water........ 7/1/03 6.125 1,512,882
500,000 Price Elliot Resh Park, Arizona........................... 7/1/01 7.000 537,430
305,000 Rhode Island, Convention Center Authority................. 5/15/01 6.700 325,063
950,000 Rhode Island, Depositors Economic Protection Corp......... 8/1/01 7.500 1,031,757
300,000 Richland County, South Carolina........................... 10/1/00 6.500 315,726
625,000 Seattle, Washington Sewer Revenue......................... 1/1/03 6.300 674,956
1,200,000 St. Louis, Missouri....................................... 2/1/02 6.250 1,259,244
1,000,000 Tennessee State........................................... 5/1/03 5.500 1,042,680
115,000 Texas State............................................... 4/1/00 7.125 120,418
400,000 Texas State............................................... 10/1/00 6.500 413,728
1,000,000 Tucson, Arizona, Street & Highway User Revenue............ 7/1/00 6.875 1,042,130
1,000,000 Tucson, Arizona, Street & Highway User Revenue............ 7/1/00 6.875 1,042,130
1,000,000 Tucson, Arizona, Street & Highway User Revenue............ 7/1/00 6.750 1,040,900
1,000,000 University of Arizona, Revenue............................ 6/1/00 6.900 1,049,960
755,000 University of Pittsburgh, Pennsylvania.................... 6/1/02 6.125 807,238
2,000,000 Washington State.......................................... 2/1/02 6.375 2,119,740
400,000 Washington Suburban Sanitation District, Maryland......... 6/1/01 6.900 428,572
270,000 Wisconsin Public Power System, Power Revenue.............. 7/1/00 7.400 285,557
500,000 Wisconsin State........................................... 5/1/02 6.000 523,385
555,000 Wisconsin State........................................... 5/1/02 6.300 585,364
-----------
TOTAL PRE-REFUNDED ....................................... $48,660,853
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 1999 (continued)
Principal Maturity Interest
Amount Date Rate Value
---------- -------- -------- -----------
<S> <C> <C> <C> <C>
RECREATION (1.9%)
$1,390,000 Ohio State Building Authority............................. 10/1/02 5.000% $ 1,419,579
-----------
SALES TAX (4.2%)
$1,110,000 Municipal Assistance Corp., New York...................... 7/1/03 5.250% $ 1,144,277
2,000,000 Municipal Assistance Corp., New York...................... 7/1/02 5.000 2,041,300
-----------
TOTAL SALES TAX .......................................... $ 3,185,577
-----------
UTILITIES (3.7%)
$ 740,000 Long Island Power Authority, New York..................... 12/1/02 5.250% $ 758,086
1,000,000 Washington State Public Power Supply...................... 7/1/01 7.625 1,062,840
1,000,000 Washington State Public Power Supply...................... 7/1/02 5.000 1,016,140
-----------
TOTAL UTILITIES .......................................... $ 2,837,066
-----------
WATER/SEWER (2.7%)
$1,000,000 Dearborn, Michigan, Sewer Disposal System................. 4/1/03 6.500% $ 1,070,050
500,000 Houston, Texas, Water & Sewer Systems..................... 12/1/01 5.600 515,230
275,000 Massachusetts State Water Resources Authority............. 12/1/01 6.300 288,002
150,000 Ocean County, New Jersey, Utilities Authority............. 1/1/01 6.125 154,494
-----------
TOTAL WATER/SEWER ........................................ $ 2,027,776
-----------
TOTAL INVESTMENTS, (identified cost $74,079,772) (b) ............................ 97.5% $73,855,689
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES .................................. 2.5 1,862,941
----- -----------
NET ASSETS ..................................................................... 100.0% $75,718,630
===== ===========
</TABLE>
- ----------
(a) General obligation or revenue bonds that have been fully secured or
collateralized by an escrow fund consisting of U.S. Government obligations
that can adequately meet interest and principal payments. For pre-refunded
obligations, the stated maturity date represents the date of redemption
which, pursuant to the terms of the escrow agreement, has been accelerated
from the orginally stated maturity date.
(b) The aggregate cost for federal income tax purposes is $74,079,772. The
aggregate gross unrealized appreciation is $198,685, and the aggregate gross
unrealized depreciation is $422,768 resulting in net unrealized depreciation
of $224,083.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $74,079,772) (Note 1)............. $73,855,689
Receivables for:
Investments sold.................................................................... 1,286,419
Fund shares sold.................................................................... 150,000
Interest............................................................................ 1,534,166
-----------
Total Assets ................................................................... $76,826,274
-----------
LIABILITIES:
Due to Bank............................................................................ 990,521
Payables for:
Fund shares repurchased.............................................................. 50,000
Investment advisory fee (Note 2)..................................................... 16,434
Administrative fee (Note 2).......................................................... 9,861
Shareholder servicing/eligible institution fee (Note 2).............................. 16,434
Accrued expenses and other liabilities............................................... 24,394
-----------
Total Liabilities .............................................................. 1,107,644
-----------
NET ASSETS ................................................................................ $75,718,630
===========
Net Assets Consist of:
Paid-in capital........................................................................ $76,070,888
Accumulated net realized loss on investments........................................... (128,175)
Net unrealized depreciation on investments............................................. (224,083)
-----------
Net Assets ................................................................................ $75,718,630
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($75,718,630 / 7,349,340 shares) ...................................................... $10.30
======
</TABLE>
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the year ended June 30, 1999
<S> <C>
INVESTMENT INCOME:
Income:
Interest............................................................................. $3,821,849
----------
Expenses:
Investment advisory fee (Note 2)..................................................... 227,713
Shareholder servicing/eligible institution fees (Note 2)............................. 227,713
Administrative fee (Note 2).......................................................... 136,628
Professional fees ................................................................... 27,729
Custodian fee ....................................................................... 95,624
Trustees fees and expenses (Note 2).................................................. 9,530
Miscellaneous expenses............................................................... 34,215
----------
Total Expenses....................................................................... 759,152
Expense offset arrangement...................................................... (9,821)
----------
Net Expenses ................................................................... 749,331
----------
Net Investment Income .......................................................... 3,072,518
----------
NET REALIZED AND UNREALIZED GAIN/LOSS (Notes 1 and 3):
Net realized gain on investments....................................................... 111,710
Net change in unrealized appreciation on investments................................... (778,100)
----------
Net Realized and Unrealized Loss ............................................... (666,390)
----------
Net Increase in Net Assets Resulting from Operations .................................. $2,406,128
==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the For the
year ended year ended
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 3,072,518 $ 2,667,396
Net realized gain (loss) on investments................... 111,710 (18,372)
Net change in unrealized appreciation (depreciation)
on investments........................................ (778,100) 401,133
------------ ------------
Net increase in net assets resulting from operations . 2,406,128 3,050,157
------------ ------------
Dividends declared from net investment income............... (3,080,799) (2,667,396)
Shares of beneficial interest transactions (Note 4):
Net proceeds from sales of shares of beneficial interest.. 70,953,619 70,988,470
Net asset value of shares of beneficial interest issued to
shareholders in reinvestment of dividends .............. 1,100,833 1,067,737
Net cost of shares of beneficial interest repurchased..... (75,820,694) (47,993,037)
------------ ------------
Net increase (decrease) in net assets resulting from
shares of beneficial interest transactions ........... (3,766,242) 24,063,170
------------ ------------
Total increase (decrease) in net assets............. (4,440,913) 24,445,931
NET ASSETS:
Beginning of year........................................... 80,159,543 55,713,612
------------ ------------
End of year ................................................ $ 75,718,630 $ 80,159,543
============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each year
For the years ended June 30,
------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year......... $ 10.40 $ 10.33 $ 10.26 $ 10.28 $ 10.11
Income from investment operations:
Net investment income................... 0.35 0.36 0.37 0.37 0.37
Net realized and unrealized
gain (loss) on investments............ (0.10) 0.07 0.07 (0.02) 0.17
Less dividends and distributions (Note 1):
Dividends to shareholders from net
investment income..................... (0.35) (0.36) (0.37) (0.37) (0.37)
------- ------- ------- ------ -------
Net asset value, end of year............... $ 10.30 $ 10.40 $ 10.33 $ 10.26 $ 10.28
======= ======= ======= ======= =======
Total return ............................ 2.44% 4.25% 4.34% 3.60% 5.42%
Ratios/Supplemental Data:
Net assets, end of year
(000's omitted).................... $75,719 $80,160 $55,714 $44,776 $51,828
Ratio of expenses to average
net assets (Note 2):
Total Expenses paid by Fund........ 0.82% 0.78% 0.70%(1) 0.70%(1) 0.70%(1)
Expense offset arrangement......... 0.01% 0.02% n/a n/a n/a
------- ------- ------- ------- -------
Net expenses....................... 0.83% 0.80% 0.70% 0.70% 0.70%
Ratio of net investment income to
average net assets................. 3.37% 3.49% 3.55% 3.51% 3.67%
Portfolio turnover rate.............. 44% 20% 48% 48% 39%
</TABLE>
- ----------
(1) Had the expense payment agreement not been in place, the ratio of expenses
to average net assets for the years ended June 30, 1997, 1996 and 1995,
would have been 0.96%, 0.90% and 0.99%, respectively. For the same periods,
the total return of the Fund would have been 4.16%, 3.40% and 5.13%,
respectively. The expense payment agreement terminated on July 1, 1997.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies. The 59 Wall Street
Tax Free Short/Intermediate Fixed Income Fund (the "Fund") is a separate,
diversified series of The 59 Wall Street Trust (the "Trust") which is registered
under the Investment Company Act of 1940, as amended. The Trust is an open-end
management investment company organized as a Massachusetts business trust on
June 7, 1983. The Fund commenced operations on July 23, 1992. The Declaration of
Trust permits the Trustees to create an unlimited number of series, each of
which issues a separate class of shares. The Trustees have authorized the
issuance of an unlimited number of shares of the Fund. At June 30, 1999, there
were four series of the Trust.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles, which require management to make certain
estimates and assumptions at the date of the financial statements and are based,
in part, on the following accounting policies. Actual results could differ from
those estimates.
A. Valuation of Investments. Bonds and other fixed income securities
(other than short-term obligations but including listed issues) are valued
on the basis of valuations furnished by a pricing service, use of which
has been approved by the Board of Trustees. In making such valuations, the
pricing service utilizes both dealer-supplied valuations and electronic
data processing techniques which take into account appropriate factors
such as institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and
other market data, without exclusive reliance upon quoted prices or
exchange or over-the-counter prices, since such valuations are believed to
reflect more accurately the fair value of such securities.
Securities or other assets for which market quotations are not
readily available are valued at fair value in accordance with procedures
established by and under the general supervision and responsibility of the
Trustees. Such procedures include the use of independent pricing services,
which use prices based upon yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to the value from
dealers; and general market conditions. Short-term investments which
mature in 60 days or less are valued at amortized cost if their original
maturity was 60 days or less, or by amortizing their value on the 61st day
prior to maturity, if their original maturity when acquired by the Fund
was more than 60 days, unless this is determined not to represent fair
value by the Trustees.
B. Accounting for Investments. Investment transactions are accounted
for on the trade date. Realized gains and losses, if any, from investment
transactions are determined on the basis of identified cost. Interest
income is accrued daily and consists of interest accrued, discount earned
(including both original issue and market discount) and premium
amortization on the investments of the Fund.
C. Federal Income Taxes. Each series of the Trust is treated as a
separate entity for Federal income tax purposes. It is the Fund's policy
to comply with the provisions of the Internal Revenue Code (the "Code")
applicable to regulated investment companies and to distribute all of its
net income to its shareholders. Accordingly, no Federal income tax
provision is required.
D. Dividends and Distributions to Shareholders. Dividends to
shareholders from net investment income are declared daily and paid
monthly. Distributions from net capital gains, if any, are paid annually
and are recorded on the ex-dividend date. Distributions paid by the Fund
from net interest received on tax-exempt bonds are not includable by
shareholders as gross income for Federal income tax purposes because the
Fund intends to meet certain requirements of the Code applicable to
regulated investment companies which will enable the Fund to pay
tax-exempt interest dividends.
2. Transactions with Affiliates.
Investment Advisory Fee. The Trust has an investment advisory agreement
with Brown Brothers Harriman & Co. (the "Adviser") for which the Adviser
receives a fee from the Fund calculated daily and paid monthly at an annual rate
equivalent to 0.25% of the Fund's average daily net assets. For the year ended
June 30, 1999, the Fund incurred $227,713 for advisory services.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
Administrative Fee. The Trust has an administrative agreement with Brown
Brothers Harriman & Co. (the "Administrator") for which it pays the
Administrator a fee calculated daily and paid monthly at an annual rate
equivalent to 0.15% of the Fund's average daily net assets. The Administrator
has a subadministration services agreement with 59 Wall Street Administrators,
Inc. for which 59 Wall Street Administrators, Inc. receives such compensation as
is from time to time agreed upon, but not in excess of the amount paid to the
Administrator. For the year ended June 30, 1999, the Fund incurred $136,628 for
administrative services.
Shareholder Servicing/Eligible Institution Agreement. The Trust has a
shareholder servicing agreement and an eligible institution agreement with Brown
Brothers Harriman & Co. for which Brown Brothers Harriman & Co. receives a fee
from the Fund calculated daily and paid monthly at an annual rate equivalent to
0.25% of the average daily net assets of the Fund. For the year ended June 30,
1999, the Fund incurred $227,713 for shareholder servicing/eligible institution
services.
Trustees' Fees and Expenses. Each Trustee receives an annual fee as well
as reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 1999, the Fund incurred $9,530 for these fees.
3. Investment Transactions. The Fund invests primarily in debt securities
issued by municipalities. The ability of the issuers of the debt securities to
meet their obligation may be affected by economic developments in a specific
state or municipality. The aggregate holdings by state ranged from 0.6% to 11.5%
of investments. At June 30, 1999, the five largest holdings by state were
Arizona 11.2%; Texas 8.8%; Washington 7.3%; Illinois 7.1%; and New York 6.4%.
For the year ended June 30, 1999, the cost of purchases and the proceeds of
sales of investment securities other than short-term investments were
$39,316,581 and $42,583,864, respectively. Custody fees for the Fund were
reduced by $9,821 as an offset arrangement with the Fund's custodian.
4. Shares of Beneficial Interest. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
For the For the
year ended year ended
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
Shares beneficial interest sold.................................. 6,798,407 6,840,210
Shares of beneficial interest issued in connection
with reinvestment of dividends................................... 105,396 101,307
Shares of beneficial interest repurchased........................ (7,265,083) (4,624,564)
--------- ---------
Net increase (decrease).......................................... (361,280) 2,316,953
========= =========
</TABLE>
5. Federal Income Tax Status. At June 30, 1999, the Fund had a net capital
loss carryover of approximately $128,000, which is available through June 30,
2004, to offset future capital gains to the extent provided by regulations. To
the extent that this net capital loss carryover is used to offset future capital
gains, it is probable that the gains so offset will not be distributed to
shareholders since any such distributions may be taxable to shareholders as
ordinary income.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Trustees and Shareholders
The 59 Wall Street Tax Free Short/Intermediate Fixed Income Fund
(a series of The 59 Wall Street Trust):
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund (a series of The 59 Wall Street Trust) as
of June 30, 1999, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended June 30, 1999 and
1998, and the financial highlights for each of the years in the five-year period
ended June 30, 1999. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at June 30,
1999 by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The 59 Wall Street
Tax Free Short/Intermediate Fixed Income Fund at June 30, 1999, and the results
of its operations, the changes in its net assets, and its financial highlights
for the respective stated periods in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
August 13, 1999
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
During the fiscal year ended June 30, 1999, U. S. economic activity
powered ahead as strong income growth and improved consumer confidence fed
domestic demand. With the global economy on the mend, business investment
contributed to overall growth. Impressive productivity gains and the strong U.S.
dollar kept inflation contained below 2.0%. The strong economy improved state
and local finances, with municipal credit upgrades outnumbering credit
downgrades by about 4:1. The pace of market issuance contracted as somewhat
higher market rates reduced the economic incentive to refinance older
indebtedness. For the period, yields fell 0.20% for the one year maturity but
rose 0.15% to 0.25% for two through five year maturities. As bond price
decreases subtracted from coupon interest income, the Fund produced a total
return of 2.44% for its fiscal year.
On September 24, 1998, the Fund's investment advisor anticipated that the
deterioration in foreign economies would lower U.S. growth prospects by reducing
U.S. exports; keep U.S. inflation in check by reducing import prices; and that
interest rates were likely to decline. To lock in the prevailing level of
interest rates and to benefit from their expected decline, the Fund's investment
advisor extended the weighted average maturity of the Fund from a range of 2.3
to 2.7 years to a range of 2.7 to 3.0 years. Subsequently, on June 10, 1999, the
Fund's investment advisor anticipated that the surprisingly strong U.S. economic
growth would increase inflationary pressures and lead to higher interest rates.
To protect against the price erosion of higher interest rates, the Fund's
advisor reduced the weighted average life of the Fund back to a range of 2.3 to
2.7 years.
Portfolio holdings are concentrated in municipal bonds, which are 100%
collateralized by U.S. Treasuries held in escrow accounts (the highest possible
credit quality available in the municipal market). Holdings are geographically
diversified. In order to lock in a higher tax-free yield and avoid the tax
liability of market discount bonds, the portfolio is skewed toward premium
coupon bonds with call protection. The Fund has no derivative securities or
leverage exposure in its portfolio. We managed our sales transactions so as to
incur no net capital gains tax liability.
<PAGE>
Comparative Aaa Municipal Yield Curves
[Graph Omitted]
Tax Free Short / Intermediate Fixed Income Fund Growth of $10,000
[The following table represents a line graph in the printed report.]
Tax Free Short / Intermediate Fixed Income Fund* $13,111
Merrill Lynch 0--3 Year General Obligation Municipal
Bond Index** $13,522
IBC / Donoghue Composite Tax Free Money Market Funds
Average* $12,079
- ----------
* Net of fees and expenses.
** The Merrill Lynch Index started 4/1/93. Therefore, for performance
purposes the starting point used is the same amount as the Fund.
Past performance is not predictive of future performance.
<PAGE>
The 59 Wall Street Trust
Investment Adviser and
Administrator
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Distributor
59 Wall Street Distributors, Inc.
21 Milk Street
Boston, Massachusetts 02109
Shareholder Servicing Agent
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
(800) 625-5759
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of The
59 Wall Street Tax Free Short/Intermediate Fixed Income Fund. Such offering is
made only by prospectus, which includes details as to offering price and other
material information.
Tax Free
Short/Intermediate
Fixed Income Fund
ANNUAL REPORT
June 30, 1999
