Tax Free
Short/Intermediate
Fixed Income Fund
SEMI-ANNUAL REPORT
December 31, 1998
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998
(unaudited)
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- ------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS (98.9%)
ESCROWED TO MATURITY (a) (4.9%)
$ 500,000 Chicago, Illinois......................................... 1/1/03 6.500% $ 550,245
1,570,000 Mashantucket Western Pequot Tribe,
Connecticut, Revenue.................................... 9/1/03 6.250 1,728,036
2,150,000 New Jersey State Transportation Authority................. 6/15/00 6.000 2,230,668
-----------
TOTAL ESCROWED TO MATURITY ............................ $ 4,508,949
-----------
GENERAL OBLIGATIONS (17.9%)
$1,170,000 Allen, Texas, School District............................. 2/15/03 6.000% $ 1,267,297
350,000 Du Page County, Illinois.................................. 1/1/03 5.000 365,848
1,000,000 El Paso, Texas............................................ 8/15/01 7.000 1,083,510
200,000 Florida State............................................. 7/1/99 6.875 203,894
1,000,000 Hawaii State.............................................. 11/1/01 5.850 1,057,630
1,000,000 Honolulu, Hawaii, City & County........................... 7/1/02 7.250 1,110,170
500,000 Illinois State............................................ 4/1/01 5.000 514,865
710,000 Kentucky Infrastructure Authority......................... 8/1/99 7.625 742,468
500,000 Maryland State............................................ 7/15/99 6.400 509,115
1,000,000 Massachusetts State....................................... 11/1/01 5.500 1,051,790
1,000,000 Milwaukee, Wisconsin, Sewer Revenue, Series A............. 10/1/02 6.700 1,102,600
1,065,000 Mississippi State......................................... 7/1/03 5.000 1,117,409
585,000 New Jersey State.......................................... 9/15/99 6.250 598,180
1,000,000 Pittsburgh, Pennsylvania.................................. 3/1/03 5.000 1,044,770
1,000,000 Richmond, Virginia........................................ 1/15/03 5.000 1,045,060
1,075,000 Round Rock, Texas, Independent School District............ 8/1/01 7.000 1,162,140
2,000,000 San Antonio, Texas........................................ 8/1/02 8.000 2,278,120
275,000 Washington State.......................................... 1/1/01 6.500 290,749
-----------
TOTAL GENERAL OBLIGATIONS .............................. $16,545,615
-----------
PRE-REFUNDED (a) (60.4%)
$1,275,000 Akron, Ohio, Bath Copley Township Hospital................ 11/15/00 7.250% $ 1,388,029
500,000 Anchorage, Alaska, Telephone Revenue...................... 11/1/00 7.100 542,385
900,000 Arizona State............................................. 7/1/02 7.000 1,004,895
500,000 Arizona State Transportation.............................. 7/1/01 6.350 539,705
515,000 Augusta, Georgia, Water and Sewer Revenue................. 5/1/02 6.500 568,004
125,000 Aurora, Illinois.......................................... 1/1/99 7.000 125,000
300,000 Austin, Texas, Utility System Revenue..................... 9/1/99 7.000 307,791
200,000 Berkeley County, South Carolina,
Water & Sewer Revenue................................... 6/1/01 7.000 219,428
550,000 Boston, Massachusetts..................................... 2/1/00 7.375 584,958
250,000 Bucks County, Pennsylvania,
Water and Sewer Authority............................... 12/1/02 6.750 277,457
</TABLE>
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998 (continued)
(unaudited)
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
- ------------ -------- ----------- -----------
<S> <C> <C> <C>
PRE-REFUNDED (continued)
$ 1,000,000 Burke County, Georgia, Development
Authority Pollution Control............................. 1/1/03 7.700% $ 1,170,910
275,000 Cache County, Utah, School District....................... 6/15/03 5.900 300,690
1,000,000 Chicago, Illinois......................................... 7/1/02 6.850 1,115,370
500,000 Chicago, Illinois Center Public Library................... 7/1/02 6.850 557,685
1,000,000 Cook County, Illinois..................................... 11/15/02 6.300 1,109,910
1,500,000 Delaware County, Pennsylvania............................. 11/15/02 6.000 1,621,080
210,000 Delaware County, Pennsylvania,
Hospital Revenue........................................ 8/15/99 7.125 219,360
105,000 Delaware County, Pennsylvania,
Hospital Revenue........................................ 8/15/99 7.200 109,726
465,000 Delaware Transportation Authority
System Revenue.......................................... 7/1/01 6.000 491,682
1,500,000 Denver, Colorado, City and County......................... 11/15/02 7.500 1,728,045
250,000 District of Columbia, General Obligation.................. 6/1/00 6.875 266,840
200,000 Downtown Savannah Authority,
Georgia Revenue......................................... 1/1/99 6.800 204,000
500,000 Florida State Board of Education.......................... 6/1/01 5.500 522,610
500,000 Florida State Department of
National Resource Preservation.......................... 7/1/01 6.700 546,520
1,050,000 Fort Worth, Texas......................................... 3/1/00 6.500 1,089,123
200,000 Greensburg-Salem, Pennsylvania,
School District......................................... 1/1/99 7.100 200,000
1,000,000 Harris County, Texas...................................... 10/1/02 5.750 1,069,660
365,000 Harrisburg, Pennsylvania, City & County................... 9/1/03 5.875 401,230
900,000 Hawaii State.............................................. 11/1/01 6.000 964,260
590,000 Illinois Health Facility Authority........................ 4/1/99 7.375 607,989
2,100,000 Illinois Health Facility Authority........................ 5/1/02 7.250 2,357,271
415,000 Illinois State Sales Tax Revenue.......................... 6/15/01 6.000 438,219
1,007,000 Indiana Transportation Finance Authority.................. 11/1/02 6.250 1,112,372
1,000,000 Indianapolis, Indiana, Public Improvement................. 1/1/02 6.700 1,103,570
500,000 Kentucky State Property &
Building Commission..................................... 2/1/01 6.875 542,790
600,000 Kentucky State Property &
Building Commission..................................... 8/1/01 6.500 653,790
1,000,000 Kentucky State Turnpike Authority......................... 5/15/00 7.250 1,067,150
250,000 King County, Washington................................... 12/1/00 6.750 265,515
100,000 Maine Municipal Bond Bank................................. 11/1/99 7.100 103,310
1,000,000 Martinsville, Virginia, Industrial
Development Authority................................... 1/1/01 7.000 1,065,050
</TABLE>
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998 (continued)
(unaudited)
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
- ------------ -------- ----------- -----------
<S> <C> <C> <C>
PRE-REFUNDED (continued)
$ 500,000 Maryland State Health Facilities Authority................ 7/1/01 6.750% $ 546,735
575,000 Maryland Water Quality Financing Authority................ 9/1/00 7.250 622,029
1,150,000 Massachusetts State Health &
Education Facility...................................... 7/1/00 8.000 1,249,130
500,000 Massachusetts State Industrial
Finance Agency Revenue.................................. 9/1/99 7.250 523,570
155,000 Massachusetts State Water
Resources Authority..................................... 4/1/00 7.625 166,168
230,000 Middlesex County, New Jersey,
Utilities Authority Sewer Revenue....................... 3/15/01 6.500 248,446
1,550,000 Nebraska Public Power District Revenue.................... 1/1/03 5.700 1,687,423
1,000,000 Nebraska Public Power District Revenue.................... 1/1/03 6.125 1,104,300
465,000 New York State Dormitory Authority Revenue................ 7/1/00 7.700 503,558
400,000 New York State Dormitory Authority Revenue................ 5/15/02 6.750 445,732
165,000 New York State Local Government
Assistance Corp......................................... 4/1/01 7.250 181,051
140,000 New York State Medical Care Facilities
Finance Agency Revenue.................................. 2/15/01 7.500 153,814
145,000 Ohio State Building Authority,
Correctional Facility, Series A......................... 8/1/99 7.350 151,436
225,000 Ohio State Building Authority,
Correctional Facility, Series A......................... 10/1/03 5.000 236,421
350,000 Pennsylvania State Higher
Educational Revenue..................................... 5/1/00 7.250 367,885
200,000 Philadelphia, Pennsylvania,
Gas Works Revenue....................................... 1/1/99 6.750 204,000
500,000 Phoenix, Arizona, General Obligation...................... 7/1/99 6.750 519,010
500,000 Price Elliot Resh Park, Arizona........................... 7/1/01 7.000 549,700
305,000 Rhode Island, Convention Center Authority................. 5/15/01 6.700 331,794
950,000 Rhode Island, Depositors Economic
Protection Corp......................................... 8/1/01 7.500 1,057,654
1,000,000 Richland County, South Carolina........................... 3/1/00 6.750 1,058,540
300,000 Richland County, South Carolina........................... 10/1/00 6.500 321,147
625,000 Seattle, Washington Sewer Revenue......................... 1/1/03 6.300 694,219
1,000,000 Springfield, Illinois..................................... 12/1/99 6.300 1,029,150
1,200,000 St. Louis, Missouri....................................... 2/1/02 6.250 1,289,904
1,000,000 Sullivan County, Tennessee, Health,
Education & Housing Facility............................. 2/15/00 7.200 1,063,150
1,000,000 Tennessee State........................................... 5/1/03 5.500 1,070,580
115,000 Texas State............................................... 4/1/00 7.125 122,610
</TABLE>
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998 (continued)
(unaudited)
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
- ------------ -------- ----------- -----------
<S> <C> <C> <C>
PRE-REFUNDED (continued)
$ 400,000 Texas State............................................... 10/1/00 6.500% $ 421,148
1,000,000 Tucson, Arizona, Street & Highway
User Revenue............................................ 7/1/00 6.750 1,058,550
1,000,000 Tucson, Arizona, Street & Highway
User Revenue............................................ 7/1/00 6.875 1,060,360
1,000,000 Tucson, Arizona, Street &
Highway User Revenue.................................... 7/1/00 6.875 1,060,360
1,000,000 University of Arizona, Revenue............................ 6/1/00 6.900 1,068,280
755,000 University of Pittsburg, Pennsylvania..................... 6/1/02 6.125 826,370
2,000,000 Washington State.......................................... 2/1/02 6.375 2,172,520
400,000 Washington Suburban Sanitation
District, Maryland...................................... 6/1/01 6.900 437,840
100,000 Wisconsin Health & Educational
Facility Authority Revenue.............................. 8/15/99 7.400 104,622
270,000 Wisconsin Public Power System,
Power Revenue........................................... 7/1/00 7.400 291,006
500,000 Wisconsin State........................................... 5/1/02 6.000 535,675
555,000 Wisconsin State........................................... 5/1/02 6.300 599,772
-----------
TOTAL PRE-REFUNDED .................................... $55,699,038
-----------
SALES TAX (4.7%)
$ 1,000,000 Inland Protection Financing Corp., Florida................ 1/1/03 5.000% $ 1,046,410
2,000,000 Municipal Assistance Corp., New York...................... 7/1/02 5.000 2,081,300
1,110,000 Municipal Assistance Corp., New York...................... 7/1/03 5.250 1,174,114
-----------
TOTAL SALES TAX ....................................... $ 4,301,824
-----------
TRANSPORTATION (3.7%)
$ 750,000 Illinois State Toll Highway............................... 1/1/99 4.400% $ 750,000
550,000 Illinois State Toll Highway............................... 1/1/99 4.400 550,000
2,000,000 New York State Thruway Authority,
Highway & Bridge........................................ 4/1/02 5.250 2,085,900
-----------
TOTAL TRANSPORTATION .................................. $ 3,385,900
-----------
UTILITIES (4.8%)
$ 740,000 Long Island Power Authority, New York..................... 12/1/02 5.250% $ 776,756
500,000 Michigan Municipal Bond Authority Revenue................. 10/1/01 5.000 518,280
1,000,000 Washington State Public Power Supply...................... 7/1/99 7.200 1,020,360
1,000,000 Washington State Public Power Supply...................... 7/1/01 7.625 1,090,610
1,000,000 Washington State Public Power Supply...................... 7/1/02 5.000 1,036,000
-----------
TOTAL UTILITIES ........................................ $ 4,442,006
-----------
</TABLE>
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998 (continued)
(unaudited)
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
- ------------ -------- ----------- -----------
<S> <C> <C> <C>
WATER/SEWER (2.5%)
$ 1,000,000 Dearborn, Michigan, Sewer Disposal System................. 4/1/03 6.500% $ 1,102,910
180,000 Houston, Texas, Water & Sewer Systems..................... 12/1/99 5.250 183,494
500,000 Houston, Texas, Water & Sewer Systems..................... 12/1/01 5.600 525,765
275,000 Massachusetts State Water Resources Authority............. 12/1/01 6.300 294,602
150,000 Ocean County, New Jersey, Utilities Authority............. 1/1/01 6.125 157,675
-----------
TOTAL WATER/SEWER ..................................... $ 2,264,446
-----------
TOTAL INVESTMENTS, (identified cost $89,973,460) (b) ............................ 98.9% $91,147,778
CASH AND OTHER ASSETS LESS LIABILITIES .......................................... 1.1 1,122,858
------ -----------
NET ASSETS ..................................................................... 100.0% $92,270,636
====== ===========
</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 originally stated maturity date.
(b) The aggregate cost for federal income tax purposes is $89,973,460. The
aggregate gross unrealized appreciation is $1,182,607, and the aggregate
gross unrealized depreciation is $8,289 resulting in net unrealized
appreciation of $1,174,318.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
(unaudited)
ASSETS:
Investments in securities, at value (identified cost
$89,973,460) (Note 1) ................................. $91,147,778
Cash ................................................. 665,753
Interest Receivable .................................. 1,796,289
-----------
Total Assets ..................................... 93,609,820
-----------
LIABILITIES:
Payables for:
Investments purchased ................................. 1,272,469
Fund shares repurchased ............................... 3,000
Investment advisory fee (Note 2) ...................... 19,670
Administrative fee (Note 2) ........................... 11,802
Shareholder servicing/eligible institution fee (Note 2) 19,670
Accrued expenses and other liabilities ................ 12,573
-----------
Total Liabilities ................................ 1,339,184
-----------
NET ASSETS .................................................... $92,270,636
===========
Net Assets Consist of:
Paid-in capital ......................................... $91,265,109
Accumulated net realized loss on investments ............ (168,791)
Net unrealized appreciation on investments .................... 1,174,318
-----------
Net Assets .................................................... $92,270,636
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($92,270,636 / 8,808,499 shares) ........................ $10.48
======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF OPERATIONS
For the six months ended December 31, 1998
(unaudited)
NET INVESTMENT INCOME:
Income:
Interest ................................................ $ 1,942,738
-----------
Expenses:
Investment advisory fee (Note 2) ........................ 115,962
Shareholder servicing/eligible institution fees (Note 2) 115,962
Administrative fee (Note 2) ............................. 69,577
Professional fees ....................................... 12,677
Custodian fee ........................................... 53,004
Trustees fees and expenses (Note 2) ..................... 2,570
Miscellaneous expenses .................................. 12,452
-----------
Total Expenses .......................................... 382,204
Fees paid indirectly (Note 3) ......................... (1,399)
-----------
Net Expenses ....................................... 380,805
-----------
Net Investment Income .............................. 1,561,933
-----------
NET REALIZED AND UNREALIZED GAIN (Notes 1 and 3):
Net realized gain on investments .......................... 71,094
Net change in unrealized appreciation on investments ............ 620,301
-----------
Net Realized and Unrealized Gain ................... 691,395
-----------
Net Increase in Net Assets Resulting from Operations ...... $ 2,253,328
===========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the
six months ended For the
December 31, 1998 year ended
(unaudited) June 30, 1998
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income...................................... $ 1,561,933 $ 2,667,396
Net realized gain (loss) on investments.................... 71,094 (18,372)
Net change in unrealized appreciation on investments....... 620,301 401,133
------------ ------------
Net increase in net assets resulting from operations .. 2,253,328 3,050,157
------------ ------------
Dividends declared from net investment income................ (1,561,933) (2,667,396)
------------ ------------
Shares of beneficial interest transactions (Note 4):
Net proceeds from sales of shares of beneficial interest... 48,501,723 70,988,470
Net asset value of shares of beneficial interest
issued to shareholders in reinvestment of
dividends ............................................... 548,627 1,067,737
Net cost of shares of beneficial interest repurchased...... (37,630,652) (47,993,037)
------------ ------------
Net increase in net assets resulting from shares of
beneficial interest transactions ...................... 11,419,698 24,063,170
------------ ------------
Total increase in net assets......................... 12,111,093 24,445,931
NET ASSETS:
Beginning of year............................................ 80,159,543 55,713,612
------------ ------------
End of year ................................................. $ 92,270,636 $ 80,159,543
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding
throughout each period
<TABLE>
<CAPTION>
For the
six months ended For the years ended June 30,
December 31, 1998 ------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
----------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $10.40 $10.33 $10.26 $10.28 $10.11 $10.29
Income from investment operations:
Net investment income................... 0.18 0.36 0.37 0.37 0.37 0.34
Net realized and unrealized
gain (loss) on investments............ 0.08 0.07 0.07 (0.02) 0.17 (0.18)
Less dividends and distributions:
Dividends to shareholders from
net investment income................. (0.18) (0.36) (0.37) (0.37) (0.37) (0.34)
Dividends to shareholders from net
realized gains on investments......... -- -- -- -- -- (0.00)(1)
------ ------ ------ ------ ------ ------
Net asset value, end of period............. $10.48 $10.40 $10.33 $10.26 $10.28 $10.11
====== ====== ====== ====== ====== ======
Total return ............................. 3.16% 4.25% 4.34% 3.60% 5.42% 1.59%
Ratios/Supplemental Data:
Net assets, end of period
(000's omitted)...................... $92,271 $80,160 $55,714 $44,776 $51,828 67,253
Ratio of expenses to average net
assets (Note 2):
Expenses paid by the Fund............... 0.82%(3) 0.78% 0.70%(2) 0.70%(2) 0.70%(2) 0.70%
Expense offset arrangement.............. 0.00%(3)(4) 0.02 n/a n/a n/a n/a
----- ----- ----- ----- ----- -----
Total expenses...................... 0.82%(3) 0.80% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income
to average net assets................. 3.37%(3) 3.49% 3.55% 3.51% 3.67% 3.32%
Portfolio turnover rate................. 17% 20% 48% 48% 39% 27%
</TABLE>
- --------------
(1) The distribution to shareholders from net realized gains was less than
$0.01 per share.
(2) 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, 1995 and
1994, would have been 0.96%, 0.90%, 0.99%, and 1.01%, respectively. For
the same periods, the total return of the Fund would have been 4.16%,
3.40%, 5.13%, and 1.28%, respectively. The expense payment agreement will
terminate on July 1, 1997.
(3) Annualized.
(4) Less than 0.01%.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
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 December 31, 1998,
there were three 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
taxable 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 six months
ended December 31, 1998, the Fund incurred $115,962 for advisory services.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
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 six months ended December 31, 1998, the Fund incurred
$69,577 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 six months ended
December 31, 1998, the Fund incurred $115,962 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
six months ended December 31, 1998, the Fund incurred $2,570 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 0.01% to
11.6% of investments. At December 31, 1998, the five largest holdings by state
were Texas 11.6%; Illinois 10.4%; Arizona 6.1; Washington 5.9%; and New York
5.6%. For the six months ended December 31, 1998, the cost of purchases and the
proceeds of sales of investment securities other than short-term investments
were $29,347,668 and $15,487,546, respectively. Custody fees for the Fund were
reduced by $1,399 as a result of 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
six months ended year ended
December 31, 1998 June 30, 1998
----------------- ------------
<S> <C> <C>
Shares beneficial interest sold ........................ 4,651,753 6,840,210
Shares of beneficial interest issued in connection
with reinvestment of dividends....................... 52,494 101,307
Shares of beneficial interest repurchased............... (3,606,369) (4,624,564)
--------- ---------
Net increase ........................................... 1,097,878 2,316,953
========= =========
</TABLE>
5. Federal Income Tax Status. At June 30, 1998, the Fund had a net capital
loss carryover of approximately $220,000, 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>
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.
