Tax Free
Short/Intermediate
Fixed Income Fund
ANNUAL REPORT
June 30, 2000
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 2000
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
--------- ---------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (98.6%)
EDUCATION (1.9%)
$ 1,460,000 University of Missouri Revenue ............................ 11/01/2003 5.500% $ 1,496,033
-----------
ESCROWED TO MATURITY (a) (5.4%)
$ 500,000 Chicago, Illinois ......................................... 01/01/2003 6.500% $ 520,300
1,000,000 Honolulu, Hawaii City & County ............................ 11/01/2003 5.250 1,015,810
1,570,000 Mashantucket Western Pequot Tribe, Connecticut,
Revenue ................................................. 09/01/2003 6.250 1,635,139
1,000,000 Milwaukee, Wisconsin, Sewer Revenue, Series A ............ 10/01/2002 6.700 1,042,840
-----------
TOTAL ESCROWED TO MATURITY (a) .......................... $ 4,214,089
-----------
GENERAL OBLIGATIONS (25.1%)
$ 1,440,000 Chattanooga, Tennessee .................................... 09/01/2003 5.250% $ 1,462,550
2,000,000 Dade County, Florida, Public Facility Revenue ............. 08/01/2003 6.500 2,102,780
1,000,000 Delaware State ............................................ 04/01/2002 5.000 1,007,090
1,000,000 Denver, Colorado, City and County ......................... 08/01/2003 5.000 1,007,630
350,000 Du Page County, Illinois .................................. 01/01/2003 5.000 352,125
1,000,000 El Paso, Texas ............................................ 08/15/2001 7.000 1,028,180
1,000,000 Hawaii State .............................................. 11/01/2001 5.850 1,016,380
1,000,000 Honolulu, Hawaii, City & County ........................... 07/01/2002 7.250 1,047,950
1,000,000 Illinois State ............................................ 04/01/2004 5.500 1,024,040
1,000,000 Massachusetts State ....................................... 11/01/2001 5.500 1,013,620
1,000,000 Mississippi State ......................................... 06/01/2003 5.000 1,006,970
1,000,000 Pittsburgh, Pennsylvania .................................. 03/01/2003 5.000 1,005,880
250,000 Rhode Island State ........................................ 06/15/2002 6.000 256,525
1,075,000 Round Rock, Texas, Independent School District ............ 08/01/2001 7.000 1,103,649
2,000,000 San Antonio, Texas ........................................ 08/01/2002 8.000 2,129,580
1,000,000 Tennessee State ........................................... 05/01/2003 5.500 1,021,740
2,000,000 Wisconsin State ........................................... 05/01/2004 6.000 2,084,440
-----------
TOTAL GENERAL OBLIGATIONS ............................... $19,671,129
-----------
MISCELLANEOUS (5.3%)
$ 500,000 Chicago, Illinois, Public Building Community Revenue ...... 02/01/2002 5.000% $ 502,525
1,000,000 Greater Detroit, Michigan ................................. 12/13/2004 5.500 1,027,340
1,000,000 Kentucky State Property & Building Commission ............. 02/01/2003 5.500 1,018,980
1,390,000 Ohio State Building Authority, Arts Facility .............. 10/01/2002 5.000 1,401,968
225,000 Ohio State Building Authority, Correctional Facility,
Series A ................................................ 10/01/2003 5.000 226,998
-----------
TOTAL MISCELLANEOUS ..................................... $ 4,177,811
-----------
PRE-REFUNDED (a) (43.6%)
$ 900,000 Arizona State ............................................. 07/01/2002 7.000% $ 948,384
500,000 Arizona State Transportation .............................. 07/01/2001 6.350 516,840
515,000 Augusta, Georgia, Water and Sewer Revenue ................. 05/01/2002 6.500 540,446
200,000 Berkeley County, South Carolina, Water & Sewer
Revenue ................................................. 06/01/2001 7.000 208,580
</TABLE>
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 2000
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
--------- ---------- -------- -----------
<S> <C> <C> <C> <C>
PRE-REFUNDED (a) (CONTINUED)
$ 250,000 Bucks County, Pennsylvania, Water and Sewer Authority ..... 12/01/2002 6.750% $ 261,930
1,000,000 Burke County, Georgia, Development Authority
Pollution Control ....................................... 01/01/2003 7.700 1,095,520
275,000 Cache County, Utah, School District ....................... 06/15/2003 5.900 286,096
1,000,000 Charlotte, North Carolina ................................. 02/01/2004 5.800 1,050,760
1,000,000 Chicago, Illinois ......................................... 07/01/2002 6.850 1,055,210
500,000 Chicago, Illinois Center Public Library ................... 07/01/2002 6.850 527,605
1,500,000 Connecticut State ......................................... 08/15/2004 5.900 1,574,475
1,500,000 Delaware County, Pennsylvania ............................. 11/15/2002 6.000 1,544,265
465,000 Delaware Transportation Authority System Revenue .......... 07/01/2001 6.000 472,356
1,500,000 Denver, Colorado, City and County ......................... 11/15/2002 7.500 1,620,795
1,000,000 Harris County, Texas ...................................... 10/01/2002 5.750 1,022,760
365,000 Harrisburg, Pennsylvania, City & County ................... 09/01/2003 5.875 382,002
900,000 Hawaii State .............................................. 11/01/2001 6.000 925,569
2,100,000 Illinois Health Facilities Authority ...................... 05/01/2002 7.250 2,224,257
415,000 Illinois State Sales Tax Revenue .......................... 06/15/2001 6.000 421,296
1,007,000 Indiana Transportation Finance Authority .................. 11/01/2002 6.250 1,060,290
1,000,000 Indianapolis, Indiana, Public Improvement ................. 01/01/2002 6.700 1,048,090
600,000 Kentucky State Property & Building Commission ............. 08/01/2001 6.500 624,720
500,000 Maryland State Health Facilities Authority ................ 07/01/2001 6.750 521,125
500,000 Mesa, Arizona ............................................. 07/01/2003 5.700 519,945
1,000,000 Nebraska Public Power District Revenue .................... 01/01/2003 6.125 1,050,110
1,550,000 Nebraska Public Power District Revenue .................... 01/01/2003 5.700 1,612,295
1,705,000 Nevada State .............................................. 10/01/2002 6.250 1,777,190
400,000 New York State Dormitory Authority Revenue ................ 05/15/2002 6.750 423,044
165,000 New York State Local Government Assistance Corp. .......... 04/01/2001 7.250 171,773
140,000 New York State Medical Care Facilities Finance
Agency Revenue .......................................... 02/15/2001 7.500 145,440
1,400,000 Phoenix, Arizona Civic Improvement Waste and Water ........ 07/01/2003 6.125 1,478,414
500,000 Price Elliot Resh Park, Arizona ........................... 07/01/2001 7.000 522,390
305,000 Rhode Island, Convention Center Authority ................. 05/15/2001 6.700 316,932
625,000 Seattle, Washington Sewer Revenue ......................... 01/01/2003 6.300 658,875
1,200,000 St. Louis, Missouri ....................................... 02/01/2002 6.250 1,229,340
755,000 University of Pittsburgh, Pennsylvania .................... 06/01/2002 6.125 788,733
2,000,000 Washington State, General Obligation ...................... 02/01/2002 6.375 2,069,720
400,000 Washington Suburban Sanitation District ................... 06/01/2001 6.900 416,804
500,000 Wisconsin State ........................................... 05/01/2002 6.000 511,800
555,000 Wisconsin State ........................................... 05/01/2002 6.300 570,995
-----------
TOTAL PRE-REFUNDED (a) .................................. $34,197,171
-----------
SALES TAX (4.0%)
$ 2,000,000 Municipal Assistance Corp., New York ...................... 07/01/2002 5.000% $ 2,016,280
1,110,000 Municipal Assistance Corp., New York ...................... 07/01/2003 5.250 1,127,838
-----------
TOTAL SALES TAX ......................................... $ 3,144,118
-----------
</TABLE>
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 2000
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
--------- ---------- -------- -----------
<S> <C> <C> <C> <C>
TRANSPORTATION (6.5%)
$ 1,000,000 Illinois State Toll Highway ............................... 01/01/2004 5.000% $ 1,005,100
1,000,000 Kansas City, Missouri, Highway Revenue .................... 03/01/2003 5.100 1,009,610
1,000,000 Massachusetts Bay Transportation Authority ................ 03/01/2005 5.300 1,022,300
2,000,000 Springfield, Missouri, Transportation Revenue ............. 08/01/2002 5.250 2,024,700
-----------
TOTAL TRANSPORTATION .................................... $ 5,061,710
-----------
UTILITIES (4.5%)
$ 740,000 Long Island Power Authority, New York ..................... 12/01/2002 5.250% $ 747,659
700,000 Memphis, Tennessee Electric Systems Revenue ............... 01/01/2004 5.900 725,242
1,000,000 Washington State Public Power Supply ...................... 07/01/2001 7.625 1,029,750
1,000,000 Washington State Public Power Supply ...................... 07/01/2002 5.000 1,004,720
-----------
TOTAL UTILITIES ......................................... $ 3,507,371
-----------
WATER/SEWER (2.3%)
$ 1,000,000 Dearborn, Michigan, Sewer Disposal System ................. 04/01/2003 6.500% $ 1,044,300
500,000 Houston, Texas, Water & Sewer Systems ..................... 12/01/2001 5.600 506,710
275,000 Massachusetts State Water Resources Authority ............. 12/01/2001 6.300 281,853
-----------
TOTAL WATER/SEWER ....................................... $ 1,832,863
-----------
TOTAL INVESTMENTS, (identified cost $77,935,194) (b) ..................................... 98.6% $77,302,295
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ........................................... 1.4 1,079,027
----- -----------
NET ASSETS ............................................................................... 100.0% $78,381,322
===== ===========
</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 $77,935,194. The
aggregate gross unrealized appreciation is $47,981, and the aggregate
gross unrealized depreciation is $680,880 resulting in net unrealized
depreciation of $632,899.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $77,935,194) (Note 1) .......... $77,302,295
Interest receivable ................................................................. 1,501,720
-----------
Total Assets .................................................................. $78,804,015
-----------
LIABILITIES:
Due to bank ......................................................................... 270,020
Payables for:
Dividends declared (Note 1) ....................................................... 5,778
Investment advisory fee (Note 2) .................................................. 32,908
Administrative fee (Note 2) ....................................................... 19,745
Shareholder servicing/eligible institution fee (Note 2) ........................... 32,908
Accrued expenses and other liabilities ............................................ 61,334
-----------
Total Liabilities ............................................................. 422,693
-----------
NET ASSETS ................................................................................ $78,381,322
===========
Net Assets Consist of:
Paid-in capital ..................................................................... $79,129,235
Distribution in excess of net investment income ..................................... (5,778)
Accumulated net realized loss on investments ........................................ (109,236)
Net unrealized depreciation on investments .......................................... (632,899)
-----------
Net Assets ................................................................................ $78,381,322
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($78,381,322 / 7,657,133 shares) .................................................... $10.24
======
</TABLE>
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF OPERATIONS
For the year ended June 30, 2000
NET INVESTMENT INCOME:
Income:
Interest ............................................... $3,020,021
----------
Expenses:
Investment advisory fee (Note 2) ....................... 182,242
Shareholder servicing/eligible institution fees (Note 2) 182,242
Administrative fee (Note 2) ............................ 109,345
Custodian fee .......................................... 55,609
Professional fees ...................................... 22,523
Trustees fees and expenses (Note 2) .................... 12,527
Miscellaneous expenses ................................. 79,721
----------
Total Expenses ......................................... 644,209
Expense offset arrangement (Note 3) ................ (20,876)
----------
Net Expenses ....................................... 623,333
----------
Net Investment Income .............................. 2,396,688
----------
NET REALIZED AND UNREALIZED GAIN/LOSS (Notes 1 and 3):
Net realized gain on investments ......................... 18,939
Net change in unrealized depreciation on investments ..... (408,816)
----------
Net Realized and Unrealized Loss .................. (389,877)
----------
Net Increase in Net Assets Resulting from Operations ..... $2,006,811
==========
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 years ended June 30,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ..................................... $ 2,396,688 $ 3,072,518
Net realized gain on investments .......................... 18,939 111,710
Net change in unrealized appreciation (depreciation)
on investments ........................................ (408,816) (778,100)
------------ ------------
Net increase in net assets resulting from operations .... 2,006,811 2,406,128
------------ ------------
Dividends declared from net investment income ............... (2,437,884) (3,080,799)
Shares of beneficial interest transactions (Note 4):
Net proceeds from sales of shares of beneficial interest .. 47,551,838 70,953,619
Net asset value of shares of beneficial interest issued to
shareholders in reinvestment of dividends .............. 927,176 1,100,833
Net cost of shares of beneficial interest repurchased ..... (45,385,249) (75,820,694)
------------ ------------
Net increase (decrease) in net assets resulting from
shares of beneficial interest transactions ........... 3,093,765 (3,766,242)
------------ ------------
Total increase (decrease) in net assets ............. 2,662,692 (4,440,913)
NET ASSETS:
Beginning of year ........................................... 75,718,630 80,159,543
------------ ------------
End of year ................................................. $ 78,381,322 $ 75,718,630
============ ============
</TABLE>
See Notes to Financial Statements.
<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 year
<TABLE>
<CAPTION>
For the years ended June 30,
------------------------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................ $10.30 $10.40 $10.33 $10.26 $10.28
Income from investment operations:
Net investment income .......................... 0.34 0.35 0.36 0.37 0.37
Net realized and unrealized
gain (loss) on investments ................... (0.06) (0.10) 0.07 0.07 (0.02)
Less dividends and distributions (Note 1):
Dividends to shareholders from net
investment income ............................ (0.34) (0.35) (0.36) (0.37) (0.37)
------ ------ ------ ------ ------
Net asset value, end of year ...................... $10.24 $10.30 $10.40 $10.33 $10.26
====== ====== ====== ====== ======
Total return ...................................... 2.88% 2.44% 4.25% 4.34%(1) 3.60%(1)
Ratios/Supplemental Data:
Net assets, end of year
(000's omitted) .............................. $78,381 $75,719 $80,160 $55,714 $44,776
Ratio of expenses to average
net assets (Note 2):
Expenses paid by Fund .......................... 0.85% 0.82% 0.78% 0.70%(1) 0.70%(1)
Expense offset arrangement ..................... 0.03% 0.01% 0.02% n/a n/a
------- ------- ------- ------- ------
Total expenses .............................. 0.88% 0.83% 0.80% 0.70% 0.70%
Ratio of net investment income
to average net assets ....................... 3.29% 3.37% 3.49% 3.55% 3.51%
Portfolio turnover rate ........................ 22% 44% 20% 48% 48%
</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 and 1996, would
have been 0.96% and 0.90%, respectively. For the same periods, the total
return of the Fund would have been 4.16% and 3.40%, 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, 2000 there
were four series of the Trust.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, 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, 2000, the Fund incurred $182,242 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, 2000, the Fund incurred $109,345 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,
2000, the Fund incurred $182,242 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, 2000, the Fund incurred $12,527 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 0.3% to 9.9%
of investments. At June 30, 2000, the five largest holdings by state were
Illinois 9.9%; Texas 7.5%; Missouri 7.5%; Washington 6.2%; and New York 6.0%.
For the year ended June 30, 2000, the cost of purchases and the proceeds of
sales of investment securities other than short-term investments were
$20,663,405 and $15,607,090, respectively. Custody fees for the Fund were
reduced by $20,876 as a result of an expense 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, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Shares of beneficial interest sold .................... 4,652,873 6,798,407
Shares of beneficial interest issued in connection
with reinvestment of dividends ...................... 90,586 105,396
Shares of beneficial interest repurchased ............. (4,435,666) (7,265,083)
---------- ----------
Net increase (decrease) ............................... 307,793 (361,280)
========== ==========
</TABLE>
5. Federal Income Tax Status. At June 30, 2000, the Fund had a net capital
loss carryover of approximately $107,000, 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) (the
"Fund") as of June 30, 2000, the related statement of operations for the year
then ended, the statement of changes in net assets for the years ended June 30,
2000 and 1999, and the financial highlights for each of the years in the
five-year period ended June 30, 2000. 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 auditing standards generally
accepted in the United States of America. 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, 2000, 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, 2000, the results of
its operations, the changes in its net assets, and its financial highlights for
the respective stated periods in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 18, 2000
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
During the fiscal year ended June 30, 2000, U.S. economic activity
continued at the robust pace established in earlier periods. The Fund's
Investment advisor remained cautious throughout the year, expecting the Federal
Reserve to move towards a less accommodating monetary policy stance by raising
the overnight Federal Funds rate. To protect against the price erosion caused by
higher interest rates, the Fund's advisor maintained the weighted average
maturity of the Fund in the neutral category, targeting a range of 2.30 to 2.70
years. As Y2K passed without any serious developments, The Fed continued it's
vigilant effort to cool the US. economy by raising short-term interest rates.
Since June 30 1999, the Fed has raised interest rates on five occasions by a
total of 150 basis points in an effort to ease the domestic growth rate down to
a sustainable level.
Municipal rates rose for the period in light of the Federal Reserve policy
actions. In all, yields rose 50 to 100 basis points on representative short and
intermediate maturity municipal securities. The material yield curve inversion
experienced by U.S. Treasury securities, together with rising short term
interest rates, caused the municipal yield curve to flatten significantly.
During the period, yields on 1 year maturities rose 100 basis points, while
yields on 5 year maturities rose 50 basis points. The ninth consecutive year of
the economic expansion has generated healthy balance sheets and strong revenue
growth for most municipalities. For the second quarter of 2000, Moody's reported
their highest upgrade/downgrade ratio in history at 14:1.
Portfolio holdings are concentrated in various municipal bond sectors,
including those which are 100% collateralized by U.S. Treasuries held in escrow
accounts (the highest credit quality available in the municipal market). The
Fund is geographically diversified and generally purchases premium coupon bonds
with sufficient call protection in order to lock in a higher tax free yield and
avoid the tax liability of discount bonds. The Fund has no derivative securities
or leverage exposure in its portfolio. We manage our sales transactions to
minimize the net capital gains tax liability for our shareholders.
<PAGE>
THE 59 WALL STREET TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
Comparative Aaa Municipal Yield Curve
[The following table represents a line chart in the printed report.]
Years 6/30/1999 6/30/200
----- --------- --------
0 4.00% 4.75%
1 3.33% 4.33%
2 3.93% 4.56%
3 4.10% 4.67%
4 4.23% 4.7%
5 4.33% 4.74%
Tax free Short/Intermediate Fixed Income Fund Growth of $10,000
[The following table represents a line chart in the printed report.]
<TABLE>
<CAPTION>
59 Wall Tax Free IBC/Donoghue Composite
Short/Intermediate Bond Buyer Tax Free Money Market
Fixed Income Fund* 1 Year Index Funds Average*
------------------ ------------ ----------------------
<S> <C> <C> <C>
07/23/92 ................... $10,000 $10,000 $10,000
(Inception)
06/30/93 ................... $10,617 $10,260 $10,200
06/30/94 ................... $10,784 $10,419 $10,404
06/30/95 ................... $11,364 $10,782 $10,727
06/28/96 ................... $11,777 $11,100 $11,066
06/30/97 ................... $12,283 $11,417 $11,404
06/30/98 ................... $12,799 $11,759 $11,758
06/30/99 ................... $13,111 $12,044 $12,079
06/30/00 ................... $13,489 $12,308 $12,472
</TABLE>
Total Return
------------------------------------------
One year Five years Inception to
Ended Ended 6/30/00
6/30/00 6/30/00 (Annualized)
------------------------------------------
2.88% 4.39% 3.84%
------------------------------------------
* net of fees and expenses.
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.
