<PAGE>
August 15, 1996
Fellow Shareowners:
It is a pleasure to welcome our many new shareowners who have joined us since
our last Report. We believe the Fund's approach of seeking the highest possible
income exempt from Federal income tax, consistent with the preservation of
principal, makes it a particularly attractive choice for conservative investors.
Bull & Bear Municipal Income Fund achieved an annual total return of 4.78% for
the year ended June 30, 1996. In addition, the Fund's current and compound yield
of 4.13% and 4.21%, respectively, translate into an appealing tax equivalent
yield in the 39.6% tax bracket of 6.84% and 6.97%.
Over the past five and ten years, and since inception on March 7, 1984, the
Fund's annual compound total returns were 5.60%, 6.45% and 8.45%. Reflecting
these consistent results, the ending value of $10,000 invested at the Fund's
inception and followed by regular $100 monthly investments was $49,456 at June
30, 1996, double the $24,700 invested over the period.
For investors in tax-exempt securities, we believe exaggerated concerns
regarding a major overhaul of the tax code that would negatively impact the
attraction of tax-free yields has caused municipal securities to be undervalued
relative to taxable assets. While such concerns have receded and some of the
differential between the two markets has been recouped, we continue to believe
that tax-exempt securities presently offer important incremental value versus
taxable securities.
On June 26, 1996, the Board of Directors approved a proposal to convert the
Fund from open-end to closed-end status. As a closed-end fund, it is expected
that the Fund's shares would be listed on the American Stock Exchange or
<PAGE>
traded on Nasdaq and they would no longer be redeemable at net asset value.
Proxy materials providing detailed information concerning the proposal will be
mailed to shareholders of record and available to investors in August 1996.
If you have any questions or would like information on any of the Bull & Bear
Funds, the Bull & Bear No-Fee IRA/(R)/ or opening a discount brokerage account
at Bull & Bear Securities, where you can earn American Airlines/(R)/
AAdvantage/(R)/ miles on every trade, we would be pleased to hear from you. Just
call 1-800-847-4200, and an Investor Service Representative will be glad to
assist you, as always, without any obligation on your part.
Sincerely,
[SIGNATURE OF ROBERT D. ANDERSON] [SIGNATURE OF STEVEN A. LANDIS]
Robert D. Anderson Steven A. Landis
Vice Chairman Senior Vice President
Portfolio Manager
2
<PAGE>
[LOGO OF BULL & BEAR APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------------------------------------------------
INCOME FUNDS-- MONEY . BULL & BEAR A high quality money
MARKET, DOLLAR RESERVES market fund investing in
U.S. GOVERNMENT, U.S. Government
MUNICIPAL AND securities. Income is
GLOBAL generally free from state
income and intangible
. Monthly Dividends personal property taxes.
(For Bull & Bear
. Free, Unlimited Performance Plus/(R)/
Check Writing -----
($250 minimum discount brokerage
per check) accounts, there is no
check writing minimum.)
. BULL & BEAR Investing for a high
U.S. GOVERNMENT level of current income,
SECURITIES FUND liquidity and safety of
principal.
. BULL & BEAR Investing for the highest
MUNICIPAL INCOME FUND possible income exempt
from Federal income tax
that is consistent with
preservation of
principal.
. BULL & BEAR Investing for a high
GLOBAL INCOME FUND level of income from a
global portfolio of
primarily investment
grade fixed income
securities.
- --------------------------------------------------------------------------------
GROWTH FUNDS-- . BULL & BEAR Invests worldwide for the
U.S., GLOBAL U.S. AND OVERSEAS FUND highest possible total
AND PRECIOUS return.
METALS
. BULL & BEAR Invests aggressively for
SPECIAL EQUITIES FUND maximum capital
appreciation.
. BULL & BEAR Seeks long term capital
GOLD INVESTORS appreciation in
investments with the
potential to provide a
hedge against inflation
and preserve the
purchasing power of the
dollar.
Call our toll-free number for a prospectus
containing more complete information, including
charges and expenses. Please read it carefully
before you invest.
- --------------------------------------------------------------------------------
DISCOUNT . BULL & BEAR Receive the investment
BROKERAGE SECURITIES, INC. information you need and
SERVICES the low commissions you
expect. Plus you can earn
CALL TOLL FREE American Airlines/(R)/
1-800-VIP-4200 AAdvantage/(R)/ miles
every time you trade. And
you can save an
additional 10% off our
already low commission
rates when you use Bull &
Bear PC OnLine Investment
Center/SM/ and/or Bull &
Bear TeleQuote/
TeleTrade/SM/. (There is
no check writing minimum
for Bull & Bear
Performance Plus/(R)/
-----
accounts.)
Total Return Performance. For the periods ended June
30, 1996, Bull & Bear Municipal Income Fund's total
return for one year was 4.63%; average annual total
return for the past five years was 5.55%, for the
past ten years was 6.29% assuming in each case that
the investment Manager had not voluntarily
reimbursed certain Fund expenses. Past Performance
does not guarantee future results. Investment return
will fluctuate, so shares when redeemed may be worth
more or less than their cost. Dollar cost averaging
does not assure a profit or protect against loss in
a declining market, and investors should consider
their ability to make purchases when prices are low.
</TABLE>
3
<PAGE>
BULL & BEAR MUNICIPAL INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--JUNE 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
STANDARD
PRINCIPAL & POOR'S MARKET
AMOUNT RATING VALUE
- --------- -------- ----------
<S> <C> <C> <C>
MUNICIPAL BONDS (100.0%)
ALASKA (3.2%)
$450,000 Alaska Energy Authority Power Revenue Bonds,
7.25%, due 7/1/ 21 . . . . . . . . . . . . AAA $ 494,523
---------
ARIZONA (7.3%)
755,000 Phoenix, Arizona General Obligation Bonds,
Series A, 6.25%, due 7/1/16 . . . . . . AA+ 816,940
300,000 Salt River Project Revenue Bonds, Series A,
5.75%, due 1/1/08. . . . . . . . . . . . . AA 312,174
---------
1,129,114
---------
COLORADO (3.3%)
480,000 Colorado Student Obligation Board Authority
Revenue Bonds Series A3, 7.25% due 9/1/05 A* 504,067
---------
FLORIDA (3.2%)
500,000 Putnam County Development Authority Revenue
Bonds, due 9/1/ 24 . . . . . . . . . . . . AA- 500,000
---------
GEORGIA (6.5%)
800,000 Georgia State Municipal Electric Authority
Power Revenue Bonds, 8.25%, due 1/1/11 . A 993,648
---------
HAWAII (9.5%)
500,000 Hawaii County General Obligation Bonds,
Series A, 5.60%, due 5/1/13 . . . . . . AAA 500,770
800,000 Honolulu City & County General Obligation
Bonds, Series A, 8.75%, due 1/1/03 . . . AA 964,672
---------
1,465,442
---------
LOUISIANA (3.4%)
500,000 Louisiana Public Facility Authority Revenue
Bonds, Series A2, 6.50%, due 3/1/02. . . . AAA* 524,785
---------
MICHIGAN (3.5%)
500,000 Monroe County Pollution Control Revenue
Bonds, Series I, 7.30%, due 9/1/19 . . . . AAA 544,990
---------
MISSISSIPPI (3.1%)
500,000 Mississippi State General Obligation Bonds,
5.10%, due 11/15/ 11 . . . . . . . . . . . AA- 480,750
---------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
STANDARD
PRINCIPAL & POOR'S MARKET
AMOUNT RATING VALUE
- ---------- --------- ----------
<S> <C> <C> <C>
MISSOURI (0.7%)
$100,000 Missouri State Health & Education Facility
Revenue Bonds, Series C, 0%, due 6/1/19 . AA $ 100,000
---------
NEVADA (3.3%)
500,000 Nevada Housing Division Single Family
Revenue Bonds, 6.35%, due 10/1/12 . . . . AAA 504,200
---------
NEW JERSEY (8.6%)
750,000 New Jersey Turnpike Authority Revenue
Bonds, Series C, 6.50%, due 1/01/16 . . . BBB+ 804,908
500,000 Union County Utilities Authority Solid
Waste Revenue Bonds Series A, 7.15%, due
6/15/09 . . . . . . . . . . . . . . . . . A- 512,765
---------
1,317,673
---------
NEW MEXICO (3.8%)
600,000 Las Cruces Revenue Bonds, 5.45%, due
12/1/08 . . . . . . . . . . . . . . . . . AAA 585,078
---------
NEW YORK (17.1%)
500,000 City of New York General Obligation Bonds,
Series D, 7.5%, due 2/ 1/16 . . . . . . . BBB+ 544,635
250,000 New York General Obligation Bonds, Series
A, 6.25%, due 8/1/13. . . . . . . . . . . BBB+ 245,868
500,000 New York State Dormitory Authority State
University Revenue Bonds, Series C,
7.375%, due 5/15/10 . . . . . . . . . . . BBB+ 569,440
750,000 New York State Energy Research &
Development Authority Revenue Bonds,
7.125%, due 12/1/29 . . . . . . . . . . . A+ 832,687
500,000 New York State Urban Development Revenue
Bonds, Series 4, 5.25%, due 1/1/13 . . . BBB 448,725
---------
2,641,355
---------
NORTH CAROLINA (3.2%)
500,000 North Carolina Municipal Power Agency
Revenue Bonds, 5.50%, due 1/1/13 . . . . AAA 491,275
---------
OKLAHOMA (3.2%)
500,000 McAlester, Oklahoma Public Works Authority
Revenue Bonds, 5.50%, due 12/1/09 . . . AAA 493,910
---------
PENNSYLVANIA (1.7%)
250,000 Philadelphia Water & Waste Revenue Bonds,
6.25%, due 8/1/11 . . . . . . . . . . . . AAA 268,113
---------
TEXAS (10.2%)
500,000 Austin, Texas Independent School District
General Obligation Bonds, 5.75%, due
8/1/16. . . . . . . . . . . . . . . . . . AAA 498,495
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
STANDARD
PRINCIPAL & POOR'S MARKET
AMOUNT RATING VALUE
- ---------- --------- ------------
<S> <C> <C> <C>
$500,000 Dallas-Fort Worth International Airport
Revenue Bonds, 7.25%, due 11/1/30 . . BB+ $ 527,145
500,000 Port Corpus Christi Authority Revenue
Bonds, 7.50%, due 8/1/12 . . . . . . . A 553,530
-----------
1,579,170
-----------
VIRGINIA (1.5%)
250,000 Virginia Research Authority Water & Sewer
System Revenue Bonds, Series A, 5.125%,
due 5/1/13 . . . . . . . . . . . . . . AA 232,882
-----------
WISCONSIN (3.7%)
500,000 Wisconsin Clean Water Revenue Bonds,
Series 1, 6.875%, due 6/1/ 11 . . . . . AA 567,430
-----------
TOTAL INVESTMENTS (COST: $15,124,107)
(100.0%) . . . . . . . . . . . . . . . $15,418,405
===========
</TABLE>
- ---------
* Moody's rating.
6
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value
(cost: $15,124,107) (note 1) . . . . . $15,418,405
Cash . . . . . . . . . . . . . . . . . . 216,843
Receivables:
Investment securities sold . . . . . . 707,862
Interest . . . . . . . . . . . . . . . 277,827
Fund shares sold . . . . . . . . . . . 101
-----------
Total assets . . . . . . . . . . . . 16,621,038
-----------
LIABILITIES:
Payables:
Investment securities purchased . . . . 1,753,328
Fund shares redeemed . . . . . . . . . 119,875
Distributions to shareholders . . . . . 15,466
Accrued management and distribution
fees . . . . . . . . . . . . . . . . . 4,595
Accrued expenses . . . . . . . . . . . . 24,607
-----------
Total liabilities . . . . . . . . . 1,917,871
-----------
NET ASSETS: (applicable to 902,653
outstanding shares: 50,000,000 shares of
$.01 par value authorized) . . . . . . . $14,703,167
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE ($14,703,167 / 902,653) $16.29
======
At June 30, 1996 net assets consisted of:
Paid-in capital . . . . . . . . . . . . $14,938,452
Net unrealized appreciation on
investments . . . . . . . . . . . . . . 294,298
Accumulated net realized loss on
investments . . . . . . . . . . . . . . (531,014)
Accumulated net investment income . . . 1,431
-----------
$14,703,167
===========
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest . . . . . . . . . . . . . . . . . . $ 433,909
---------
EXPENSES:
Investment management (note 3) . . . . . . . 45,323
Distribution (note 3) . . . . . . . . . . . . 26,439
Professional (note 3) . . . . . . . . . . . . 18,764
Registration (note 3) . . . . . . . . . . . . 15,928
Custodian . . . . . . . . . . . . . . . . . . 12,880
Transfer agent . . . . . . . . . . . . . . . 8,591
Shareholder administration (note 3) . . . . . 3,450
Interest (note 5) . . . . . . . . . . . . . . 676
Directors . . . . . . . . . . . . . . . . . . 296
Other . . . . . . . . . . . . . . . . . . . . 7,261
---------
Total expenses . . . . . . . . . . . . . . 139,608
Investment management fees waived (note 3) (18,500)
---------
Net expenses . . . . . . . . . . . . . . . 121,108
---------
Net investment income . . . . . . . . . . 312,801
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments . . . . . . 3,266
Unrealized depreciation of investments during
the period . . . . . . . . . . . . . . . . . (695,360)
---------
Net realized and unrealized loss on
investments . . . . . . . . . . . . . . . (692,094)
---------
Net decrease in net assets resulting from
operations. . . . . . . . . . . . . . . . $(379,293)
=========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1996 (Unaudited) and the Year Ended December
31, 1995
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . $ 312,801 $ 704,825
Net realized gain on investments . . . . . . . 3,266 732,969
Unrealized appreciation (depreciation) of
investments during the period . . . . . . . . . (695,360) 1,080,255
----------- -----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . (379,293) 2,518,049
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($.34
and $.69 per share, respectively) . . . . . . . (316,115) (700,080)
CAPITAL SHARE TRANSACTIONS:
Decrease in net assets resulting from capital
share transactions (a) . . . . . . . . . . . . (821,456) (1,519,230)
----------- -----------
Total change in net assets . . . . . . . . . . (1,516,864) 298,739
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . 16,220,031 15,921,292
----------- -----------
End of period (including accumulated net
investment income of $1,431 and $4,745,
respectively). . . . . . . . . . . . . . . . . $14,703,167 $16,220,031
=========== ===========
</TABLE>
- ---------
(a) Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
JUNE 30, 1996 DECEMBER 31, 1995
---------------------- -----------------------
SHARES VALUE SHARES VALUE
--------- ------------ --------- ---------------
<S> <C> <C> <C> <C>
Shares sold . . . . . . 47,149 $ 773,817 736,003 $ 11,827,618
Shares issued in
reinvestment of
distributions . . . . 13,573 223,962 29,906 487,921
Shares redeemed . . . . (110,143) (1,819,235) (857,584) (13,834,769)
-------- ----------- -------- ------------
Net decrease . . . . . (49,421) $ (821,456) (91,675) $ (1,519,230)
======== =========== ======== ============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) The Fund is a diversified series of common stock of Bull & Bear Municipal
Securities, Inc. (the "Company"), a Maryland corporation registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Fund is presently the only series of shares designated by the Board
of Directors of the Company. The investment objective of the Fund is to provide
investors with the maximum level of income exempt from Federal income tax that
is consistent with the preservation of capital. The Fund seeks to achieve its
objective by investing primarily in a diversified portfolio of municipal
securities, depending on the Investment Manager's evaluation of current and
anticipated market conditions, which pay interest that is exempt from Federal
income tax. The Fund is subject to the risk of price fluctuations of the
municipal securities held in its portfolio which is generally a function of the
underlying credit rating of an issuer, the maturity length of its securities,
the securities' yield, and general economic and interest rate conditions. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements. With respect to
security valuation, municipal securities which have remaining maturities of more
than 60 days and for which market quotations are readily available are valued at
the mean between the most recently quoted bid and asked prices. Money market
securities which have remaining maturities of more than 60 days and for which
market quotations are readily available are valued at the most recent bid price
or yield equivalent. Debt obligations with remaining maturities of 60 days or
less are valued at cost adjusted for amortization of premiums and accretion of
discounts. Securities for which quotations are not readily available or reliable
and other assets may be valued as determined in good faith by or under the
direction of the Board of Directors. Investment transactions are accounted for
on the trade date (date the order to buy or sell is executed). Interest income
is recorded on the accrual basis. In preparing financial statements in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(2) The Company intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable investment income and net capital gains, if
any, after utilization of any capital loss carryforward, to its shareholders and
therefore no Federal income tax provision is required. At December 31, 1995, the
Fund had an unused capital loss carryforward of approximately $534,000 which
expires in 2002. Based on Federal income tax cost of $15,124,107, gross
unrealized appreciation and gross unrealized depreciation were $435,247 and
$140,949, respectively, at June 30, 1996.
(3) The Fund retains Bull & Bear Advisers, Inc. as its Investment Manager. Under
the terms of the Investment Management Agreement, the Investment Manager
receives a management fee, payable monthly, based on the average daily net
assets of the Fund at the annual rate of 6/10 of 1% on the first $500 million
and 1/2 of 1% over $500 million. The Investment Manager has undertaken that the
operating expenses of the Fund for each fiscal year (including management fees
but excluding taxes, interest, brokerage commissions and distribution plan
expenses), expressed as a percentage of average daily net assets, will not
exceed the lowest rate prescribed by any state in which shares of the Fund are
qualified for sale. Currently such limitation is 2 1/2% of the first $30 million
of such assets, 2% of the next $70 million and 1 1/2% of the remaining net
assets. If the Fund's expenses exceed such rates, the Investment Manager will
reimburse the Fund for any excess. Currently, the Investment Manager has
9
<PAGE>
voluntarily agreed to waive its management fee to the extent, if any, that such
expenses exceed an annual rate of 1.25% of the average daily net assets of the
Fund. For the six months ended June 30, 1996, $18,500 of management fees were
waived. Certain officers and directors of the Fund are officers and directors of
the Investment Manager and Investor Service Center, Inc., the Fund's
Distributor. The Fund reimbursed the Investment Manager $4,561 for providing
certain administrative and accounting services at cost for the six months ended
June 30, 1996.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Plan"). Pursuant to the Plan, the Fund may
reimburse the Distributor in an amount up to one-half of one percent per annum
of the Fund's average daily net assets for expenditures which are primarily
intended to result in the sale of the Fund's shares. The Distributor has
voluntarily limited the amount of reimbursement to 0.35 of one percent per annum
of the Fund's daily net assets. Since the Distributor has incurred reimbursable
expenditures in excess of this limitation, it may be reimbursed by the Fund in
future periods to the extent that total expenditures do not exceed the amount
accrued by the Fund. At June 30, 1996, the reimbursable carryforward was
approximately $410,076. Investor Service Center also received $3,450 for
shareholder administration services it provided to the Fund at cost for the six
months ended June 30, 1996.
(4) Purchases and proceeds of sales of securities other than short term notes
aggregated $9,421,443 and $9,556,999, respectively, for the six months ended
June 30, 1996.
(5) The Fund has a committed bank line of credit for temporary or emergency
purposes. As part of the agreement, the Fund is required to pledge securities it
holds in its portfolio if there is an outstanding balance. At June 30, 1996,
there was no balance outstanding and the interest rate was equal to the Federal
Reserve Funds Rate plus 1.75 percent. For the six months ended June 30, 1996,
the weighted average interest rate was 7.12% based on the balances outstanding
during the period and the weighted average amount outstanding was $7,139.
10
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
JUNE 30, 1996 -------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value at
beginning of period. $ 17.04 $ 15.25 $ 17.63 $ 17.06 $ 17.27 $ 16.91
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income .34 .70 .68 .75 .89 1.02
Net realized and
unrealized gain
(loss)
on investments . . . (.75) 1.78 (2.38) 1.02 .11 1.23
------- ------- ------- ------- ------- -------
Total from investment
operations . . . . . (.41) 2.48 (1.70) 1.77 1.00 2.25
------- ------- ------- ------- ------- -------
Less distributions:
Distributions from net
investment income . (.34) (.69) (.68) (.75) (.89) (1.03)
Distributions from net
realized gains on
investments. . . . . -- -- -- (.45) (.32) (.86)
------- ------- ------- ------- ------- -------
Total distributions . (.34) (.69) (.68) (1.20) (1.21) (1.89)
------- ------- ------- ------- ------- -------
Net asset value at end
of period . . . . . $ 16.29 $ 17.04 $ 15.25 $ 17.63 $ 17.06 $ 17.27
======= ======= ======= ======= ======= =======
TOTAL RETURN. . . . . (2.39)% 16.58% (9.76)% 10.59% 6.04% 13.69%
======= ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL
DATA
Net assets at end of
period (000's
omitted) . . . . . . $14,703 $16,220 $15,921 $21,345 $20,781 $20,458
======= ======= ======= ======= ======= =======
Ratio of expenses to
average net assets
(a) (c) . . . . . . 1.60%* 1.78% 1.60% 1.61% 1.60% 1.60%
======= ======= ======= ======= ======= =======
Ratio of net
investment income to
average net assets
(b). . . . . . . . . 4.14%* 4.31% 4.23% 4.25% 5.19% 5.86%
======= ======= ======= ======= ======= =======
Portfolio turnover
rate . . . . . . . . 64% 172% 275% 74% 320% 511%
======= ======= ======= ======= ======= =======
</TABLE>
- ---------
* Annualized.
(a) Ratio prior to reimbursement by the Investment Manager was 1.84%, 1.95%,
1.71%, 1.62%, 1.62% and 1.63%, for the six months ended June 30, 1996 and
for the years ended December 31, 1995, 1994, 1993, 1992 and 1991,
respectively.
(b) Ratio prior to reimbursement by the Investment Manager was 3.90%, 4.14%,
4.12%, 4.24%, 5.84% and 5.81%, for the six months ended June 30, 1996 and
for the years ended December 31, 1995, 1994, 1993, 1992 and 1991,
respectively.
(c) Ratio after the reduction of custodian fees under a custodian agreement was
1.62% for 1995. Prior to 1995, such reductions were reflected in the expense
ratios.
11
