TABLE OF CONTENTS
USAA Family of Funds 1
Message from the President 2
Investment Review 4
Message from the Manager 5
Financial Information:
Independent Auditors' Report 7
Statement of Assets and Liabilities 8
Portfolio of Investments in Securities 9
Notes to Portfolio of Investments in Securities 10
Statement of Operations 11
Statements of Changes in Net Assets 12
Notes to Financial Statements 13
IMPORTANT INFORMATION
Through our ongoing efforts to reduce expenses and respond to shareholder
requests, your annual and semiannual report mailings are "streamlined." One copy
of each report is sent to each address, rather than to every registered owner.
For many shareholders and their families, this eliminates duplicate copies,
saving paper and postage costs to the Fund.
If you are the primary shareholder on at least one account, prefer not to
participate in streamlining, and would like to continue receiving one report per
registered account owner, you may request this in writing to:
USAA Investment Management Company
Attn: Report Mail
9800 Fredericksburg Road
San Antonio, TX 78284-8916
or phone a Mutual Fund Representative at 1-800-531-8448 during business hours.
This report is for the information of the shareholders and others who have
received a copy of the currently effective prospectus of the USAA Treasury Money
Market Trust, managed by USAA Investment Management Company (IMCO). It may be
used as sales literature only when preceded or accompanied by a current
prospectus which gives further details about the Fund.
USAA with the eagle is registered in the U.S. Patent & Trademark Office.
(Copyright)1997, USAA. All rights reserved.
<TABLE>
USAA Family of Funds Performance Summary
If you own only one or two USAA funds, you may not be aware of the performance
of our other funds. This summary is a snapshot of the performance of all 33
funds by investment objective as of June 30, 1997.
<CAPTION>
Average Annual Total Return(%)*
Investment Inception Since
Objective Date 1 yr 5 yrs 10 yrs Inception
--------- ---- ---- ----- ------ ---------
<S> <C> <C> <C> <C> <C>
Capital Appreciation
====================
Aggressive Growth 10/19/81 -1.72 18.38 10.88 -
Emerging Markets(1) 11/7/94 15.35 - - 10.25
Gold(1) 8/15/84 -22.26 3.54 -4.75 -
Growth 4/5/71 21.60 16.94 11.97 -
Growth & Income 6/1/93 31.29 - - 18.53
International(1) 7/11/88 21.81 15.39 - 11.77
S&P 500 Index(4)(+) 5/1/96 34.59 - - 33.24
World Growth(1) 10/1/92 21.85 - - 15.50
Asset Allocation
=================
Balanced Strategy(1) 9/1/95 22.38 - - 15.48
Cornerstone Strategy(1) 8/15/84 20.45 14.33 9.22 -
Growth and Tax Strategy(2)** 1/11/89 15.72 11.23 - 10.45
Growth Strategy(1) 9/1/95 15.37 - - 21.37
Income Strategy 9/1/95 14.48 - - 10.36
Income - Taxable
================
GNMA 2/1/91 9.37 6.85 - 7.67
Income 3/4/74 8.21 7.44 9.45 -
Income Stock 5/4/87 20.77 14.21 12.89 -
Short-Term Bond 6/1/93 7.71 - - 5.69
Income - Tax Exempt
===================
Long-Term(2)** 3/19/82 9.22 6.71 8.09 -
Intermediate-Term(2)** 3/19/82 8.20 6.76 7.54 -
Short-Term(2)** 3/19/82 5.50 4.80 5.59 -
California Bond(2)** 8/1/89 8.90 7.13 - 7.58
Florida Tax-Free Income(2)** 10/1/93 9.79 - - 4.29
New York Bond(2)** 10/15/90 8.86 6.46 - 8.31
Texas Tax-Free Income(2)** 8/1/94 10.37 - - 9.24
Virginia Bond(2)** 10/15/90 8.50 6.93 - 8.08
Money Market
============
Money Market(3) 2/2/81 5.28 4.48 5.80 -
Tax Exempt Money Market(2),(3)** 2/6/84 3.36 3.04 4.15 -
Treasury Money Market Trust(3) 2/1/91 5.13 4.28 - 4.38
California Money Market(2),(3)** 8/1/89 3.29 2.94 - 3.62
Florida Tax-Free Money Market(2),(3)** 10/1/93 3.26 - - 3.04
New York Money Market(2),(3)** 10/15/90 3.21 2.82 - 3.08
Texas Tax-Free Money Market(2),(3)** 8/1/94 3.31 - - 3.33
Virginia Money Market(2),(3)** 10/15/90 3.22 2.87 - 3.20
</TABLE>
Non-deposit investment products offered by USAA Investment Management Company
are not insured by the FDIC, are not deposits or other obligations of, or
guaranteed by, USAA Federal Savings Bank, and are subject to investment risks,
including possible loss of the principal amount invested.
For more complete information about the mutual funds managed and
distributed by USAA IMCO, including charges and expenses, please call
1-800-531-8181 for a prospectus. Read it carefully before you invest.
(1) Foreign investing is subject to additional risks, which are discussed in
the Funds' prospectuses.
(2) Some income may be subject to state or local taxes or the federal
alternative minimum tax.
(3) An investment in a money market fund is neither insured nor guaranteed by
the U.S. government and there is no assurance that any of the funds will be
able to maintain a stable net asset value of $1 per share.
(4) S&P 500(Registered Trademark) is a trademark of The McGraw-Hill Companies,
Inc., and has been licensed for use. The product is not sponsored, sold
or promoted by Standard & Poor's, and Standard & Poor's makes no
representation regarding the advisability of investing in the product.
* Total return equals income return plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No adjustment
has been made for taxes payable by shareholders on their reinvested dividends
and capital gain distributions. The performance data quoted represent past
performance and are not an indication of future results. Investment return
and principal value of an investment will fluctuate, and an investor's
shares, when redeemed, may be worth more or less than their original cost.
** IRAs are not available for tax-exempt funds. The Growth and Tax Strategy Fund
is not available as an investment for your IRA because the majority of its
income is tax-exempt. California, Florida, New York, Texas, and Virginia
funds available to residents only.
+ Includes account maintenance fee through December 31, 1996.
MESSAGE FROM THE PRESIDENT
(PHOTO OF THE PRESIDENT, MICHAEL J. C. ROTH, APPEARS HERE.)
I HAVE A FEELING
THAT WE WILL REMEMBER 1997
The year began with an atmosphere of looking over your shoulder. The market had
risen about 61% in two years and all history told us that was unusual. Then it
advanced another 10% in January and February, before it encountered a loss of
confidence. By April it had lost all of the advance for this year(1) and it felt
so shaky that I sent shareholders a letter encouraging them to remember how
important we think asset allocation is in establishing your level of risk. But
by the time that letter arrived in early May the market was again setting record
highs. Indeed, one shareholder wrote me asking, "Why did you send this letter?"
The market has now driven upward to a return of 20% for the year, but
as I write this, it has fallen 192 points on the Dow; its second worst one-day
decline in points.
It would not be unusual if the market were to finish 1997 with a return well
below that of '95 and '96. We believe that the long-term return on the stock
market is around 10% to 12%.(2) Years such as '95 and '96 are necessary to
achieve such a long-term record, but by themselves they are exceptional. It is
important that investors have a position in stocks, but the risk that such a
position carries should, for most people, be offset by holding some different
assets including fixed income securities. Most of the funds in the USAA
Investment Trust are structured like that.
The Roth family will remember 1997 for another reason. We have a new
granddaughter, Katharine Sophia Broyles, who was born on January 3. She now has
an InveStart(Registered Trademark) account in the Cornerstone Strategy Fund,
our oldest asset strategy fund. I am confident that our monthly additions to
that account has the potential to build a meaningful college fund for her,
regardless of what 1997 serves up.
Sincerely,
Michael J.C. Roth
PRESIDENT AND
VICE CHAIRMAN OF THE BOARD
Past performance is no guarantee of future results.
A systematic plan, such as InveStart, does not assure a profit or protect
against loss in declining markets. Since such a plan involves continuous
investment in securities regardless of fluctuating price levels, you should
consider your financial ability to continue purchases through periods of low and
high price levels.
(1) S&P 500 Index is an unmanaged index representing the average performance of
a group of 500 widely held publicly traded stocks. It is not possible to
invest directly in the S&P 500 Index.
(2) Source: (Copyright) Computed using data from Stocks, Bonds, Bills &
Inflation 1997 Yearbook(TM), Ibbotson Associates, Chicago (annually
updates work by Roger G. Ibbotson and Rex Sinquefield). Used with
permission. All rights reserved.
For more complete information about the mutual funds managed and distributed by
USAA IMCO, including charges and expenses please call for a prospectus. Read it
carefully before you invest.
INVESTMENT REVIEW
TREASURY MONEY MARKET TRUST
OBJECTIVE: Provide investors with maximum current income while maintaining the
highest degree of safety and liquidity.
TYPES OF INVESTMENTS: Securities with maturities of 397 days or less that are
backed by the full faith and credit of the U.S. government and repurchase
agreements collateralized by such securities.
5/31/97 5/31/96
Net Assets............................ $88.6 MILLION $76.8 MILLION
Net Asset Value Per Share............. $1.00 $1.00
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/97
1 Year.............................................................5.06%
5 Years............................................................4.25%
Since Inception on February 1, 1991................................4.37%
The Fund's simple yield was 5.10% for the 7-day period ended May 31, 1997, and
the weighted average maturity was 65 days.
[A graph is shown here which is a comparison of the 7-day yield of the USAA
Treasury Money Market Trust to the IBC/Donoghue's Money Fund Averages/U.S.
Treasury & Repo from 5/96 to 5/97. The vertical axis shows the yield and the
horizontal axis shows the time period. The 7-day yield as of 5/31/97 for the
USAA Treasury Money Market Trust is 5.08% and 7-day yield as of 5/31/97 for the
IBC/Donoghue's Money Fund Averages/U.S. Treasury & Repo is 4.73%.]
Total return equals income yield and assumes reinvestment of all dividends and
capital gain distributions. No adjustment has been made for taxes payable
by shareholders on their reinvested income dividends. An investment in this
Fund is neither insured nor guaranteed by the U.S. government, and there can be
no assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share. The graph above tracks the Fund's 7-day yield against
IBC/Donoghue's Money Fund Averages/U.S. Treasury & Repo, an average of all major
treasury money market fund yields. While past performance is no guarantee of
future results, the Fund appears to remain competitive in the money market
industry.
MESSAGE FROM THE MANAGER
(PHOTOGRAPH OF THE MANAGER APPEARS HERE: PAMELA K. BLEDSOE, CFA)
STRATEGY
In his book, On War, Carl von Clausewitz wrote of a phenomenon termed "friction
in war." Friction, as described by Clausewitz, results from a variety of unknown
and unforeseen factors. Given this, the friction phenomenon could be adapted to
explain the uncertainty and irrationality that pervades the financial markets.
At any given time, a portfolio manager must make investing decisions based upon
available information since the economic environment is constantly changing.
Will interest rates remain stable? . . . Or move up? . . . Or move down? Will
money invested today provide as good of return as the opportunities available
tomorrow? As an investment professional, one must understand and prepare for the
influence this friction can have on the portfolios under management.
The Treasury Money Market Trust is managed to reduce the impact that unforeseen
market forces may have on performance. My goal is to provide a reasonable return
without undue risks, regardless of economic activity. The use of a "barbell
strategy" concentrates securities in both long and short maturities. As of May
31, 1997, 50.2% of the Fund's securities matured in less than seven days, while
35.1% of the holdings matured in 70 days or longer. The advantage of this
strategy is to provide ample liquidity during periods of rising rates while
anchoring the balance of the Fund in longer dated maturities to provide yield
stability and downside protection.
PERFORMANCE
The combination of this strategy with one of the lowest expense ratios in its
peer group has contributed to the Fund's strong performance ranking. For the
twelve months ending May 31, 1997, the Treasury Money Market Trust's yield or
return ranked 5 out of 112 treasury money market funds according to IBC
Donoghue's Money Fund Vision Report.
[A graph is shown here showing the growth of $10,000, from 2/1/91 to 5/31/97,
invested in the USAA Treasury Money Market Trust. The vertical axis shows the
dollar amount and the horizontal axis shows the time period. The ending value is
$13,114.]
Past performance is no guarantee of future results and the value of your
investment may vary according to the Fund's performance. Income may be subject
to federal, state or local taxes, or to the alternative minimum tax.
An investment in this Fund is neither insured nor guaranteed by the U.S.
government, and there can be no assurance that the Fund will be able to
maintain a stable net asset value of $1 per share.
See page 9 for a complete listing of the Portfolio of Investments in Securities.
INDEPENDENT AUDITORS' REPORT
The Shareholders and the Board of Trustees
USAA INVESTMENT TRUST:
We have audited the accompanying statement of assets and liabilities and
portfolio of investments in securities of the Treasury Money Market Trust of
USAA Investment Trust as of May 31, 1997, the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended, and the financial highlights
information presented in note 8 to the financial statements for each of the
periods in the five-year period then ended. These financial statements and the
financial highlights information are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights information 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 the financial
highlights information 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 as of May 31, 1997, by correspondence with the custodian and brokers. 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, the financial statements and the financial highlights
information referred to above present fairly, in all material respects, the
financial position of the Treasury Money Market Trust of USAA Investment Trust
as of May 31, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the years in the two-year period then
ended, and the financial highlights information for each of the periods in the
five-year period then ended, in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
San Antonio, Texas
July 9, 1997
TREASURY MONEY MARKET TRUST
STATEMENT OF ASSETS AND LIABILITIES
(IN THOUSANDS)
May 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments in securities $ 45,739
Repurchase agreements 42,021
Cash 137
Receivables:
Capital shares sold 522
Interest 450
---------
Total assets 88,869
---------
LIABILITIES
Capital shares redeemed 177
USAA Investment Management Company 35
USAA Transfer Agency Company 7
Accounts payable and accrued expenses 15
Dividends on capital shares 23
---------
Total liabilities 257
---------
Net assets applicable to capital shares outstanding $ 88,612
=========
REPRESENTED BY:
Paid-in capital $ 88,612
=========
Capital shares outstanding, unlimited number of shares authorized,
no par value 88,612
=========
Net asset value, redemption price, and offering price per share $ 1.00
=========
</TABLE>
See accompanying notes to financial statements.
TREASURY MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS IN SECURITIES
(IN THOUSANDS)
May 31, 1997
<TABLE>
<CAPTION>
Principal
Amount Security Value
--------- -------- -----
<C> <C> <C>
U.S. GOVERNMENT GUARANTEED NOTES (1.4%)
$ 1,250 6.28%, 8/01/97 (cost: $1,251) $ 1,251
--------
U.S. TREASURY BILLS (23.6%)
2,000 5.02%, 6/05/97 1,998
2,000 5.05%, 6/19/97 1,995
2,250 5.06%, 7/24/97 2,233
1,500 5.07%, 8/07/97 1,486
1,500 5.14%, 8/21/97 1,482
1,500 5.39%, 9/11/97 1,477
1,000 5.27%, 9/18/97 984
2,000 5.34%, 10/09/97 1,961
1,500 5.41%, 10/16/97 1,469
2,000 5.33%, 10/23/97 1,957
2,000 5.46%, 11/13/97 1,950
2,000 5.30%, 1/08/98 1,935
--------
Total U.S. treasury bills (cost: $20,927) 20,927
--------
U.S. TREASURY NOTES (26.6%)
4,000 5.63%, 6/30/97 4,000
2,000 5.88%, 7/31/97 2,000
1,000 6.50%, 8/15/97 1,002
2,000 6.00%, 8/31/97 2,003
1,000 5.50%, 9/30/97 1,000
2,250 5.63%, 10/31/97 2,250
2,775 7.38%, 11/15/97 2,793
3,000 5.38%, 11/30/97 2,996
2,000 5.25%, 12/31/97 1,995
2,250 7.88%, 1/15/98 2,278
1,250 5.13%, 2/28/98 1,244
--------
Total U.S. treasury notes (cost: $23,561) 23,561
--------
Total U.S. government obligations (cost: $45,739) 45,739
--------
REPURCHASE AGREEMENTS (47.4%)
21,021 Bankers Trust Securities Corp., 5.45%, acquired on 5/30/97 and due
6/02/97 at $21,031 (collateralized by a $20,895 U.S. Treasury Note,
7.88%, due 4/15/98; market value $21,444) 21,021
21,000 State Street Bank & Trust Co., 5.43%, acquired on 5/30/97 and due
6/02/97 at $21,010 (collateralized by a $21,415 U.S. Treasury Note,
5.75%, due 9/30/97; market value of $21,634) 21,000
--------
Total repurchase agreements (cost: $42,021) 42,021
--------
Total investments (cost: $87,760) $ 87,760
========
</TABLE>
TREASURY MONEY MARKET TRUST
NOTES TO PORTFOLIO OF INVESTMENTS IN SECURITIES
May 31, 1997
GENERAL NOTES
Values of securities are determined by procedures and practices discussed in
note 1 to the financial statements.
The cost of securities for federal income tax purposes is approximately the same
as that reported in the financial statements.
The percentages shown represent the percentage of the investments to net assets.
See accompanying notes to financial statements.
TREASURY MONEY MARKET TRUST
STATEMENT OF OPERATIONS
(IN THOUSANDS)
Year ended May 31, 1997
<TABLE>
<S> <C>
Net investment income:
Interest income $ 4,490
-------
Expenses:
Management fees 105
Transfer agent's fees 85
Custodian's fees 50
Postage 7
Shareholder reporting fees 10
Trustees' fees 4
Registration fees 43
Audit fees 18
Legal fees 4
Other 5
-------
Total expenses before reimbursement 331
Expenses reimbursed (16)
-------
Total expenses after reimbursement 315
-------
Net investment income $ 4,175
=======
</TABLE>
See accompanying notes to financial statements.
TREASURY MONEY MARKET TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(IN THOUSANDS)
Years ended May 31,
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
From operations:
Net investment income $ 4,175 $ 3,954
--------- ---------
Distributions to shareholders from:
Net investment income (4,175) (3,954)
--------- ---------
From capital share transactions:
Proceeds from shares sold 83,247 90,846
Shares issued for dividends reinvested 3,896 3,694
Cost of shares redeemed (75,308) (85,639)
--------- ---------
Increase in net assets from capital share transactions 11,835 8,901
--------- ---------
Net increase in net assets 11,835 8,901
Net assets:
Beginning of period 76,777 67,876
--------- ---------
End of period $ 88,612 $ 76,777
========= =========
Change in shares outstanding:
Shares sold 83,247 90,846
Shares issued for dividends reinvested 3,896 3,694
Shares redeemed (75,308) (85,639)
--------- ---------
Increase in shares outstanding 11,835 8,901
========= =========
</TABLE>
See accompanying notes to financial statements.
TREASURY MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
May 31, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USAA INVESTMENT TRUST (the Trust), registered under the Investment Company Act
of 1940, as amended, is a diversified, open-end management investment company
organized as a Massachusetts business trust consisting of eleven separate funds.
The information presented in this annual report pertains only to the Treasury
Money Market Trust (the Fund). The Fund's investment objective is to provide
maximum current income while maintaining the highest degree of safety and
liquidity.
A. Security valuation -- The value of each security is determined (as of the
close of trading on the New York Stock Exchange on each business day the
Exchange is open) as set forth below:
1. Pursuant to Rule 2a-7 of the Investment Company Act of 1940, as amended,
securities in the Fund are stated at amortized cost which approximates market
value. Repurchase agreements are valued at cost.
2. Securities which cannot be valued by the methods set forth above, and all
other assets, are valued in good faith at fair value, using methods determined
by the Manager under the general supervision of the Board of Trustees.
B. Federal taxes -- The Fund's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its income to its shareholders. Therefore, no
federal income or excise tax provision is required.
C. Investments in securities -- Security transactions are accounted for on the
date the securities are purchased or sold (trade date). Interest income is
recorded on the accrual basis. Discounts and premiums on securities are
amortized over the life of the respective securities. Gain or loss from sales of
investment securities is computed on the identified cost basis.
D. Use of estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that may affect the reported amounts in the financial
statements.
(2) LINES OF CREDIT
The Fund participates with other USAA funds in two joint short-term revolving
loan agreements totaling $850 million through January 13, 1998, one with USAA
Capital Corporation (CAPCO), an affiliate of the Manager ($750 million
uncommitted), and one with an unaffiliated bank ($100 million committed). The
purpose of the agreements is to meet temporary or emergency cash needs,
including redemption requests that might otherwise require the untimely
disposition of securities. Subject to availability under these agreements, the
Fund may borrow up to a maximum of 25% of its total assets, of which only 5% may
be borrowed from CAPCO, at the lending institution's borrowing rate plus a
markup. The Fund had no borrowings under either of these agreements during the
year ended May 31, 1997.
(3) DISTRIBUTIONS
Net investment income is accrued daily as dividends and distributed to
shareholders monthly. All net investment income available for distribution was
distributed as of May 31, 1997. Distributions of realized gains from security
transactions not offset by capital losses are made in the succeeding fiscal year
or as otherwise required to avoid the payment of federal taxes.
The Treasury Money Market Trust earned 54.1% of its income from investments in
U.S. Treasury securities during the fiscal year.
As required to be disclosed by Federal Law (Internal Revenue Code of 1986, as
amended, and the Regulations thereunder), the distributions related to earnings
for the fiscal year ended May 31, 1997 were $.05 per share, which were entirely
derived from taxable interest income.
(4) INVESTMENT TRANSACTIONS
Purchases and sales/maturities of securities for the year ended May 31, 1997
were $9,799,014,830 and $9,788,988,000, respectively.
(5) TRANSACTIONS WITH MANAGER
A. Management fees -- The investment policies of the Fund and management of the
Fund's portfolio are carried out by USAA Investment Management Company (the
Manager). The Fund's management fees are computed at .125% of its annual average
net assets.
The Manager has voluntarily agreed to limit the annual expenses of the Fund to
.375% of its annual average net assets.
B. Transfer agent's fees -- USAA Transfer Agency Company, d/b/a USAA Shareholder
Account Services, an affiliate of the Manager, provides transfer agent services
to the Fund based on an annual charge per shareholder account plus out-of-pocket
expenses.
C. Underwriting services -- The Manager provides exclusive underwriting and
distribution of the Fund's shares on a continuing best efforts basis. The
Manager receives no commissions or fees for this service.
(6) TRANSACTIONS WITH AFFILIATES
Certain trustees and officers of the Fund are also directors, officers, and/or
employees of the Manager. None of the affiliated trustees or Fund officers
received any compensation from the Fund.
(7) REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with commercial banks or
recognized security dealers. These agreements are secured by obligations backed
by the full faith and credit of the U.S. Government. Obligations pledged as
collateral are required to maintain a value equal to or in excess of the resale
price of the repurchase agreement and are held by the Fund's custodian until
maturity of the repurchase agreement. The Fund's Manager monitors the
creditworthiness of sellers with which the Fund may enter into repurchase
agreements.
(8) FINANCIAL HIGHLIGHTS
Per share operating performance for a share outstanding throughout each period
is as follows:
<TABLE>
<CAPTION>
Eight-month
Period Ended Year Ended
Year Ended May 31, May 31, September 30,
------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income .05 .05 .05 .02 .03
Distributions from net
investment income (.05 ) (.05) (.05) (.02) (.03)
-------- --------- --------- --------- ---------
Net asset value at
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ========= ========= =========
Total return (%) * 5.06 5.38 4.88 1.96 2.84
Net assets at end
of period (000) $ 88,612 $ 76,777 $ 67,876 $ 37,984 $ 30,448
Ratio of expenses to
average net assets (%) .375 (b) .375(b) .375(b) .375(a,b) .375(b)
Ratio of net investment
income to average
net assets (%) 4.95 (b) 5.23(b) 4.91(b) 2.94(a,b) 2.81(b)
* Assumes reinvestment of all dividend income distributions during the period.
(a) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(b) The information contained in the above table is based on actual expenses for
the period, after giving effect to reimbursements of expenses by the
Manager. Absent such reimbursements the Fund's ratios would have been:
Eight-month
Period Ended Year Ended
Year Ended May 31, May 31, September 30,
------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Ratio of expenses to
average net assets (%) .39 .40 .49 .62(a) .54
Ratio of net investment
income to average
net assets (%) 4.94 5.21 4.80 2.69(a) 2.65
</TABLE>
