<PAGE>
EVERGREEN(SM)
MONEY MARKET FUNDS
(Photos of a $100 bill, an eagle, and coins appear here)
SEMI-ANNUAL
REPORT
FEBRUARY 29, 1996
(Evergreen logo appears here)
Evergreen
Funds
<PAGE>
EVERGREEN MONEY MARKET FUNDS
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
Economic Overview......................................................... 1
(Photo of a $100 bill) MONEY MARKET A Report From Your Portfolio Manager...................................... 3
FUND Statement of Investments.................................................. 4
Statement of Assets and Liabilities....................................... 8
Statement of Operations................................................... 9
Statement of Changes in Net Assets........................................ 10
Financial Highlights...................................................... 11
(Photo of an eagle) TAX-EXEMPT A Report From Your Portfolio Manager...................................... 13
MONEY MARKET FUND Statement of Investments.................................................. 14
Statement of Assets and Liabilities....................................... 25
Statement of Operations................................................... 26
Statement of Changes in Net Assets........................................ 27
Financial Highlights...................................................... 28
(Photo of coins) TREASURY A Report From Your Portfolio Manager...................................... 29
MONEY MARKET FUND Statement of Investments.................................................. 30
Statement of Assets and Liabilities....................................... 31
Statement of Operations................................................... 32
Statement of Changes in Net Assets........................................ 33
Financial Highlights...................................................... 34
Combined Notes to Financial Statements.................................... 36
Trustees and Officers...................................... Inside Back Cover
</TABLE>
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.
<PAGE>
EVERGREEN MONEY MARKET FUNDS
ECONOMIC OVERVIEW
BY EVERGREEN ASSET MANAGEMENT CHAIRMAN
STEPHEN A. LIEBER
The volatility of investment markets during the first (Photo of Stephen
quarter of 1996 reflected a virtually constant A. Lieber)
reappraisal of economic prospects. The prospects of sporadic
commodity inflation, evidence of resurgent employment trends, failure of
political negotiations to achieve a balanced budget agreement, declining
demand in personal computer-based technological products, sizable consumer
credit growth and greater credit card losses, the increase in imports without
concomitant increases in exports, and the rise of the dollar, all drove the
markets to mirror the fast changing trends of new statistics. The question of
whether inflation might be reappearing was central to the investor reaction to
these concerns. Fears of inflation increased through the first quarter, as
evidenced by the sizable rise in bond market yields. By early April, long-term
U.S. Treasury bond yields reached 7%, a level last seen in August 1995, and up
more than one full percentage point from the beginning of the year. Clearly,
investors were demanding more of an inflation premium in interest rates.
The background with which this year has begun is inconclusive in its trends.
We have previously held to the view that a wage-driven inflation is unlikely in
the present economic environment due to the easy substitution of imported goods
for many domestic goods, while competitive pressures for U.S. and world markets
mount from the broadening dispersion of technology, capital, and capital goods.
The strength of American industry, it is generally held, must come from its
product innovation, its quality, and the rising productivity of its work force.
These internal and external pressures have had a major impact in restraining
wage-driven inflation. Monetary inflation has shown improving trends as the
budget deficit, as a percentage of gross domestic product, continues to decline.
Attention, however, must still be given to the longer term issues of potentially
destabilized Federal budgeting due to entitlements. While no solution to this
issue of government deficit control emerged from this years political
negotiations, it is at least better established on the political agenda than
ever before.
Investment markets demand a risk premium when faced with elements of
uncertainty. The risk premium lately built into the fixed income markets not
only reflects the arguable issue of whether there is a risk of wage inflation in
the United States, but also the sharp recent increases in some key commodity
prices. The combination of a dearth of rainfall and reduced acreage in key
agricultural states has spiked up major food commodity prices. Similarly, the
draining of oil inventories because of the heat requirements of the abnormally
long and cold winter in northern states, together with the cautious inventory
policies of the oil industry faced with the possibility that Iraqi supplies
might return to the market, has caused prices of oil and refined products to
rise. Many watchers for inflationary trends have jumped on these commodity
rises, which have lead them to conclude that the inflation rate will rise and,
therefore, that bond yields have to go up. The dissent is widespread, arguing
that these are temporary interruptions, which will in the long run serve more to
shrink profit margins than to raise prices and arguing that these are only
interruptions to a fundamentally steady low inflation trend. They point to the
2.8% increase in the Consumer Price Index for the twelve months ended March 31.
More important in the analysis of the potentials for bond yields, many
economists argue, is the current trend toward the reduction of interest rates in
Europe, led by the recent half percent discount rate cut by the German
Bundesbank. The revival of economic growth in Europe, it is felt, requires lower
interest rates which in turn will facilitate a decline in rates in the United
States, merely from reduced competitive investment pressures. We conclude that
negative trends which have dominated the bond market in the first months of the
year, as marked by the sharp rise in yields, may well reflect shorter-term
factors rather than long-term trends. Federal Reserve Bank Governors in numerous
recent speeches and interviews have made the point that they are confident
1
<PAGE>
EVERGREEN MONEY MARKET FUNDS
ECONOMIC OVERVIEW -- (CONTINUED)
about the underlying trend of well-controlled inflation, suggesting that they
are not aiming to increase the discount rates or to put any pressures to slow
the economy. We conclude that the Federal Reserve is not aiming to stimulate the
economy at this time, but will act to sustain a reasonable growth in the better
than 2% range if there is any further evidence of broadly slowing economic
activity. International competitive interest rate pressures are diminishing, the
trade balance is improving and the economy has remained resilient in the recent
period of inventory correction. These are all factors suggesting a period of
comparative stability for the months ahead.
The tax-exempt securities markets in late 1994 and 1995, and again in early
1996, were negatively affected by the flat tax proposals. The differential
between the yields of taxable fixed income debt and tax-exempt debt shrank to
record lows for recent years. For those who were convinced that a flat tax, or a
substantially reduced income tax level, was not to be expected in the near-term,
the tax-exempt fixed income market presented an outstanding comparative
investment opportunity. The loss in the Presidential primaries of the one
candidacy which featured a flat tax has already restored considerable confidence
in the continuation of the present tax structure, and increased the spread
between taxable and tax-exempt bonds. As the fall election campaign nears, the
comparative strength of the tax-exempt market will reflect the positions of the
candidates. Unless there is a major surprise in the conventions, tax-exempt
obligations seem favorably situated.
Credit issues in the tax-exempt market have not been paramount since the rare
case of the Orange County, California default. The ripple effect of that default
was shorter lived than many expected, and the resolution of Orange County's
fiscal difficulties is well underway. Its positive impact was to develop
pressure for many municipalities and agencies to tighten their controls on cash
management policies and shift to a more prudent, credit worthy structure than
had often been used.
With our overall expectation of a gradual reduction in interest rates as the
inflation premium recently built into the market is reduced, we anticipate an
attractive total return for high-quality fixed income investments, and further
relative gains for the tax-exempt securities market.
2
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of a $100 bill)
A REPORT FROM YOUR
PORTFOLIO MANAGER
ETHEL SUTTON
We are pleased to present the Semi-Annual Report for
Evergreen Money Market Fund. During the six months under review, (Photo of
the Federal Reserve lowered the Fed Funds rate twice by 25 basis Ethel
points: once in December and again in January. This brought the Sutton)
basic inter-bank lending rate to 5 1/4%, down from the 6% level
prior to the 25-basis-point rate cut in July. At its January 31
meeting, the Fed also lowered its discount rate, the rate at
which member banks can borrow from the Federal Reserve, to
5 1/4%, and commercial banks immediately dropped the prime
lending rate to 8 1/4%. At his semi-annual Congressional
testimony in February, Federal Reserve Board Chairman, Alan
Greenspan, commented that Federal Reserve Board members had wanted to ease
interest rates as insurance against the risk of sub-par economic performance in
the months ahead, adding that the odds of such a move's boosting inflation
seemed low.
The employment report released March 8 clearly altered the economic horizon,
as the Labor Department reported an unemployment rate drop to 5 1/2% for
February, more than retracing January's run-up to 5.8%. Since the financial
markets had started the year by pricing to the expectation of continued economic
weakness and further Fed ease, the dramatic rebound in job growth jolted
investors. Some economists are suggesting, however, that the job statistics were
skewed because of weather-related problems in January, coupled with a partial
government shut-down, and that it will take more weeks of data to determine
whether we are seeing an actual trend that could lead to tighter labor markets
and possible inflation, or whether we are continuing in the "soft landing" that
the Fed has tried to engineer. In the meantime, our educated guess is that the
Fed will make no change in interest rates, at least until second quarter
economic data can be evaluated.
We have consistently maintained a longer weighted average portfolio maturity
for Evergreen Money Market Fund than the monthly averages of all tier one money
market funds reported in Donoghue's*, because we seek to capitalize on the
declining interest rate trend in effect since last summer. We will be carefully
monitoring economic data to see how we can best enhance value for our
shareholders.
*MONTHLY AVERAGES AS REPORTED IN THE MONTHLY DONOGHUE'S MONEY FUND REPORT. AS OF
2/29/96, THERE WERE 269 TIER ONE MONEY MARKET FUNDS TRACKED BY DONOGHUE'S.
DONOGHUE'S IS AN INDEPENDENT MONEY MARKET MUTUAL FUND PERFORMANCE MONITOR.
AN INVESTMENT IN THE 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.
YIELDS FLUCTUATE.
3
<PAGE>
EVERGREEN MONEY MARKET FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of a $100 bill)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
BANKERS' ACCEPTANCES* -- 10.0%
Bank of Montreal:
$13,000 5.14%, 4/4/96...................... $ 12,936,892
11,000 5.31%, 5/9/96...................... 10,888,047
1,000 5.20%, 5/28/96..................... 987,289
Bank of Tokyo, Ltd.:
5,500 5.53%, 3/5/96...................... 5,496,621
7,700 5.55%, 4/4/96...................... 7,659,639
10,000 5.70%, 4/4/96...................... 9,946,167
39,100 5.21%, 5/1/96...................... 38,754,823
10,000 5.20%, 7/8/96...................... 9,813,667
6,000 Chemical Bank of New York,
5.00%, 7/29/96..................... 5,875,000
12,000 Dai-Ichi Kangyo Bank, Ltd.,
5.43%, 5/8/96...................... 11,876,920
Industrial Bank of Japan, Ltd.:
10,000 5.52%, 3/26/96..................... 9,961,667
29,000 5.23%, 4/8/96...................... 28,839,904
Mitsubishi Bank, Ltd.:
3,500 5.78%, 3/5/96...................... 3,497,752
5,250 5.51%, 3/11/96..................... 5,241,965
1,800 5.78%, 3/15/96..................... 1,795,954
4,550 5.51%, 3/25/96..................... 4,533,286
1,000 5.78%, 3/25/96..................... 996,147
Sanwa Bank, Ltd.:
10,000 5.77%, 3/11/96..................... 9,983,972
5,000 5.53%, 3/28/96..................... 4,979,262
10,000 5.70%, 4/4/96...................... 9,946,167
5,000 5.53%, 4/5/96...................... 4,973,118
8,200 5.67%, 4/11/96..................... 8,147,048
8,700 5.20%, 4/30/96..................... 8,624,600
TOTAL BANKERS' ACCEPTANCES
(COST $215,755,907)................ 215,755,907
CERTIFICATES OF DEPOSITS -- 7.3%
25,000 Bayerische Landesbank Girozentrale:
5.71%, 12/11/96.................... 25,000,000
Bayerische Vereinsbank AG:
3,000 5.75%, 4/30/96..................... 3,000,234
25,000 5.53%, 1/22/97..................... 25,000,000
20,000 Canadian Imperial Bank of Commerce,
5.50%, 1/9/97...................... 20,000,000
10,000 Commerzbank AG NY Branch,
5.435%, 4/16/96.................... 10,000,925
PRINCIPAL
AMOUNT
(000) VALUE
CERTIFICATES OF DEPOSITS -- CONTINUED
$ 2,000 Rabobank Nederland N.V.,
5.73%, 3/18/96..................... $ 2,000,028
Societe Generale:
10,000 5.88%, 3/1/96...................... 10,000,000
10,000 5.51%, 3/8/96...................... 9,989,286
20,000 5.50%, 1/9/97...................... 20,000,000
20,000 5.21%, 2/24/97..................... 20,000,000
Westdeutsche Landesbank
Girozentrale:
10,000 5.43%, 4/9/96...................... 10,000,177
2,000 6.10%, 5/13/96..................... 2,000,968
TOTAL CERTIFICATES OF DEPOSITS
(COST $156,991,618)................ 156,991,618
COMMERCIAL PAPER* -- 78.9%
BANK HOLDING COMPANIES -- 18.8%
ABN-AMRO North America Finance
Inc.:
10,000 5.51%, 3/8/96...................... 9,989,286
10,000 5.10%, 7/24/96..................... 9,794,583
10,000 Banco Espirito Santo North America
Capital Corp.,
5.31%, 5/9/96...................... 9,898,225
Bankers Trust New York Corp.:
20,000 5.47%, 5/20/96..................... 19,756,889
10,000 5.27%, 7/3/96...................... 9,818,478
20,000 B.B.V. Finance (DE) Inc.,
5.55%, 4/22/96..................... 19,839,667
10,000 BCI Funding Corp.,
5.64%, 3/1/96...................... 10,000,000
6,300 BEX America Finance Inc.,
5.01%, 6/6/96...................... 6,214,955
BHF Finance (DE) Inc.:
18,000 5.60%, 4/22/96..................... 17,854,400
50,000 5.17%, 6/20/96..................... 49,202,958
15,000 Canadian Imperial Holdings Inc.,
5.185%, 4/2/96..................... 14,930,867
Compagnie Bancaire USA
Finance Corp.:
5,000 5.54%, 3/15/96..................... 4,989,228
19,000 5.30%, 4/19/96..................... 18,864,426
Den Danske Corp. Inc.:
7,000 5.58%, 3/5/96...................... 6,995,660
2,000 5.61%, 4/10/96..................... 1,987,533
15,000 Dresdner U.S. Finance Inc.,
5.22%, 3/4/96...................... 14,993,475
</TABLE>
4
<PAGE>
EVERGREEN MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of a $100 bill)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
COMMERCIAL PAPER* -- CONTINUED
BANK HOLDING COMPANIES -- CONTINUED
$25,000 Generale Bank Inc.,
5.29%, 4/18/96..................... $ 24,823,667
MPS U.S. Commercial Paper Corp.:
20,000 5.11%, 5/7/96...................... 19,809,794
19,000 5.12%, 5/8/96...................... 18,816,249
20,000 Royal Bank of Canada,
5.02%, 7/1/96...................... 19,659,756
Svenska Handelsbanken Inc.:
30,000 5.12%, 5/3/96...................... 29,731,200
20,000 5.01%, 8/1/96...................... 19,574,150
25,000 4.92%, 8/23/96..................... 24,402,083
5,000 UBS Finance (DE) Inc.,
5.38%, 3/8/96...................... 4,994,769
18,000 Unifunding Inc.,
5.13%, 5/2/96...................... 17,840,970
404,783,268
CHEMICALS -- 3.0%
Akzo Nobel America Inc.:
5,000 5.53%, 3/11/96..................... 4,992,319
15,000 5.35%, 4/12/96..................... 14,906,375
10,000 5.07%, 5/1/96...................... 9,914,092
25,300 U.S. Borax & Chemical Corp.,
5.22%, 5/7/96...................... 25,054,211
10,000 Zeneca Wilmington Inc.,
5.35%, 4/17/96..................... 9,930,153
64,797,150
DIVERSIFIED -- 8.0%
American Home Products Corp.:
16,000 5.35%, 3/29/96..................... 15,933,422
25,000 5.21%, 4/4/96...................... 24,876,986
Daewoo International Corp.,
(America), (LOC: Korean Development
Bank):
10,000 5.70%, 3/29/96..................... 9,955,667
9,000 5.30%, 5/7/96...................... 8,911,225
6,000 5.32%, 5/7/96...................... 5,940,593
20,000 5.18%, 5/23/96..................... 19,761,144
(LOC: Credit Suisse),
10,000 5.10%, 5/28/96..................... 9,875,333
First Brands Commercial Inc.:
10,000 5.35%, 3/25/96..................... 9,964,333
(Credit Support: Westdeutsche
Landesbank Girozentrale),
14,262 5.20%, 4/12/96..................... 14,175,477
PRINCIPAL
AMOUNT
(000) VALUE
DIVERSIFIED -- CONTINUED
Mitsubishi International Corp.:
$ 8,200 5.67%, 3/6/96...................... $ 8,193,543
8,000 5.20%, 6/6/96...................... 7,887,911
Mitsui & Co. (USA) Inc.:
12,000 5.40%, 4/8/96...................... 11,931,600
19,000 5.36%, 4/12/96..................... 18,881,187
5,000 Sunkyong America Inc.,
(LOC: Credit Suisse),
5.59%, 3/11/96..................... 4,992,236
171,280,657
ELECTRIC POWER -- 1.1%
10,500 IES Utilities Inc.,
5.22%, 4/1/96...................... 10,452,803
13,700 National Rural Utilities
Cooperative Finance Corp.,
5.60%, 3/8/96...................... 13,685,082
24,137,885
ELECTRONICS -- 2.6%
42,000 Hewlett-Packard Co.,
5.15%, 5/24/96..................... 41,495,300
7,715 Hitachi Credit America Corp.,
5.40%, 3/27/96..................... 7,684,912
7,000 IBM Credit Corp.,
5.57%, 3/6/96...................... 6,994,585
56,174,797
FINANCE -- 16.8%
10,000 Asset Securitization
Cooperative Corp.,
5.36%, 4/18/96..................... 9,928,533
6,000 Broadway Capital Corp.,
(LOC: Bank of Tokyo, Ltd.),
5.50%, 4/9/96...................... 5,964,250
15,000 Ciesco L.P.,
5.375%, 3/25/96.................... 14,946,250
11,000 Diamond Asset Funding Corp.,
(LOC: Mitsuibishi Bank Ltd.),
5.40%, 4/4/96...................... 10,943,900
Finova Capital Corp.:
8,000 5.76%, 3/11/96..................... 7,987,200
36,100 5.24%, 4/3/96...................... 35,926,600
10,000 5.24%, 4/11/96..................... 9,940,322
10,000 5.26%, 4/30/96..................... 9,912,333
2,000 Ford Motor Credit Co.,
5.42%, 3/27/96..................... 1,992,171
</TABLE>
5
<PAGE>
EVERGREEN MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of a $100 bill)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
COMMERCIAL PAPER* -- CONTINUED
FINANCE -- CONTINUED
$ 6,200 General Electric Capital Corp.,
5.50%, 4/26/96..................... $ 6,146,956
General Motors Acceptance Corp.:
25,000 5.05%, 6/13/96..................... 24,635,278
25,000 4.89%, 8/14/96..................... 24,436,292
2,000 Goldman Sachs Group L.P.,
5.62%, 3/19/96..................... 1,994,380
Hanson Finance (U.K.) PLC.:
30,000 5.25%, 3/19/96..................... 29,921,250
10,000 5.20%, 4/30/96..................... 9,913,333
41,000 5.12%, 5/22/96..................... 40,521,849
Island Finance Puerto Rico Inc.:
5,000 5.66%, 3/8/96...................... 4,994,497
20,000 5.18%, 4/18/96..................... 19,861,867
23,573 Ruby Asset Funding Corp.,
(LOC: Mitsubishi Bank, Ltd.),
5.50%, 3/29/96..................... 23,472,160
Special Purpose Accounts Receivable
Cooperative Corp.:
(Surety Bond: Capital Markets
Assurance Corp.),
17,500 5.25%, 3/28/96..................... 17,431,094
5,000 5.38%, 4/18/96..................... 4,964,133
10,000 Stanford University, Board of
Trustees (Leland),
5.46%, 5/17/96..................... 9,883,217
1,000 Transamerica Finance Corp.,
5.38%, 4/4/96...................... 994,919
20,000 Twin Towers Inc.,
(LOC: Deutsche Bank AG, New York
Branch),
5.50%, 3/15/96..................... 19,957,222
15,000 Wood Street Funding Corp.,
(LOC: PNC Bank N.A.),
5.24%, 5/16/96..................... 14,834,067
361,504,073
FOOD & BEVERAGES -- 2.7%
American Home Food
Products Inc.:
8,700 5.25%, 4/12/96..................... 8,646,713
13,000 5.21%, 5/29/96..................... 12,832,556
15,000 Coca-Cola Enterprises Inc.,
5.15%, 5/8/96...................... 14,854,083
10,000 Golden Managers Acceptance Corp.,
(LOC: Republic National Bank of New
York),
5.22%, 3/20/96..................... 9,972,450
PRINCIPAL
AMOUNT
(000) VALUE
FOOD & BEVERAGES -- CONTINUED
Golden Peanut Co.:
$10,000 5.53%, 4/4/96...................... $ 9,947,772
2,000 5.00%, 5/22/96..................... 1,977,222
58,230,796
INSURANCE -- .7%
14,130 Allianz of America Finance Corp.,
5.27%, 4/29/96..................... 14,007,960
LEASING -- 2.2%
International Lease Finance Corp.:
21,800 5.10%, 5/16/96..................... 21,565,287
25,250 5.15%, 6/5/96...................... 24,903,233
46,468,520
MACHINERY, EQUIPMENT
& AUTOS -- 7.0%
American Honda Finance Corp.:
15,000 5.70%, 3/14/96..................... 14,969,125
26,100 5.20%, 4/19/96..................... 25,915,270
4,650 5.20%, 4/22/96..................... 4,615,073
15,000 5.32%, 4/30/96..................... 14,867,000
20,000 5.35%, 4/30/96..................... 19,821,667
9,550 5.13%, 5/8/96...................... 9,457,461
15,000 Browning-Ferris Industries Inc.,
5.10%, 5/7/96...................... 14,857,625
Whirlpool Corp.,
20,700 5.32%, 4/26/96..................... 20,528,696
Whirlpool Financial Corp.,
25,000 5.27%, 5/8/96...................... 24,751,139
149,783,056
NATURAL GAS -- 4.3%
British Gas Capital Corp.:
20,000 5.12%, 5/23/96..................... 19,763,911
40,000 5.11%, 5/23/96..................... 39,528,744
25,000 5.10%, 5/30/96..................... 24,681,250
7,500 Southern California Gas Co.,
5.60%, 3/1/96...................... 7,500,000
91,473,905
OIL -- .9%
Pemex Capital Inc.,
(LOC: Credit Suisse):
6,600 5.17%, 4/9/96...................... 6,563,035
7,000 5.37%, 4/10/96..................... 6,958,233
6,000 5.17%, 4/12/96..................... 5,963,810
19,485,078
</TABLE>
6
<PAGE>
EVERGREEN MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of a $100 bill)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
COMMERCIAL PAPER* -- CONTINUED
REAL ESTATE -- 1.7%
$26,919 Copley Financing Corp.,
(Surety Bond: Aetna Casualty &
Surety Co.),
5.22%, 3/21/96..................... $ 26,840,935
10,400 Kamehameha Schools-Bishop Estate,
5.58%, 3/12/96..................... 10,382,268
37,223,203
TELECOMMUNICATIONS -- 4.3%
2,000 Ameritech Corp.,
5.54%, 3/5/96...................... 1,998,769
12,000 AT&T Corp.,
5.47%, 5/3/96...................... 11,885,130
20,000 GTE Corp.,
5.25%, 3/28/96..................... 19,921,250
NYNEX Corp.:
20,000 5.46%, 3/21/96..................... 19,939,333
20,000 5.10%, 5/6/96...................... 19,813,000
20,000 5.15%, 5/20/96..................... 19,771,111
93,328,593
TEXTILE & APPAREL -- 1.4%
Calcot Ltd.:
5,000 5.57%, 3/4/96...................... 4,997,679
10,000 5.63%, 3/8/96...................... 9,989,053
4,000 5.52%, 3/14/96..................... 3,992,026
5,000 5.43%, 3/26/96..................... 4,981,146
7,000 5.23%, 4/19/96..................... 6,950,170
30,910,074
TRANSPORTATION -- 3.4%
BMW U.S. Capital Corp.:
11,000 5.60%, 3/11/96..................... 10,982,889
28,598 5.07%, 6/4/96...................... 28,215,383
Consolidated Rail Corp.:
10,000 5.17%, 5/1/96...................... 9,912,397
15,000 5.07%, 5/2/96...................... 14,869,025
10,000 Norfolk Southern Corp.,
5.22%, 3/29/96..................... 9,959,400
73,939,094
TOTAL COMMERCIAL PAPER
(COST $1,697,528,109).............. 1,697,528,109
PRINCIPAL
AMOUNT
(000) VALUE
CORPORATE NOTES -- 5.0%
$25,000 Federal National Mortgage
Association,
5.245%, 4/11/97 (VR)............... $ 24,988,250
5,000 General Motors Acceptance Corp.,
6.025%, 3/1/96 (VR)................ 5,000,000
25,000 Merrill Lynch & Co. Inc.,
6.32%, 9/16/96 (VR)................ 25,000,000
5,000 Morgan (J.P.) & Co., Inc.,
6.20%, 5/13/96..................... 5,000,000
10,000 Oakland Alameda County,
(LOC: Canadian Imperial Bank
of Commerce),
5.28%, 3/15/96..................... 10,000,000
15,000 PNC Bank NA Pittsburgh Pa.,
6.23%, 10/4/96 (VR)................ 14,995,053
10,000 Society National Bank
Cleveland Oh.
6.305%, 3/20/96 (VR)............... 9,999,872
12,456 Student Loan Marketing Association,
6.08%, 7/1/96...................... 12,476,009
TOTAL CORPORATE NOTES
(COST $107,459,184)................ 107,459,184
U.S. GOVERNMENT OBLIGATIONS -- .0%+
130 United States Treasury Bills
5.46%, 5/30/96
(COST $128,248).................... 128,248
SHARES
(000)
MUTUAL FUND SHARES -- .1%
1,501 Lehman Prime Value Money Market
Fund Series A
(at net asset value)
(COST $1,500,992).................. 1,500,992
TOTAL INVESTMENTS
(COST $2,179,364,058)....... 101.3% 2,179,364,058
OTHER ASSETS AND
LIABILITIES -- NET.......... (1.3) (28,274,483)
NET ASSETS.................. 100.0% $2,151,089,575
</TABLE>
LOC -- Letter of Credit
VR -- Variable rate issue
* These securities held by the Fund at February 29, 1996 are traded on a
discount basis; the interest rate shown is the discount rate to be earned at
the time of purchase by the Fund.
+ Less than one-tenth of a percent.
See accompanying notes to financial statements.
7
<PAGE>
EVERGREEN MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of a $100 bill)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (amortized cost $2,179,364,058)........................................................ $2,179,364,058
Cash........................................................................................................ 638,585
Interest and dividends receivable........................................................................... 2,438,114
Receivable for Fund shares sold............................................................................. 2,132,039
Other assets................................................................................................ 124,187
Total assets.......................................................................................... 2,184,696,983
LIABILITIES:
Payable for investment securities purchased................................................................. 24,988,250
Dividend payable............................................................................................ 5,649,120
Payable for Fund shares repurchased......................................................................... 1,232,582
Accrued expenses............................................................................................ 1,189,895
Accrued advisory fee........................................................................................ 547,561
Total liabilities..................................................................................... 33,607,408
NET ASSETS..................................................................................................... $2,151,089,575
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................. $2,151,610,283
Accumulated net realized loss on investment transactions.................................................... (520,708)
Net assets............................................................................................ $2,151,089,575
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($1,667,986,163 (division sign) 1,667,972,942 shares of beneficial interest outstanding)........................$1.00
Class B Shares ($7,905,575 (division sign) 7,905,417 shares of beneficial interest outstanding)................................$1.00
Class Y Shares ($475,197,837 (division sign) 475,729,875 shares of beneficial interest outstanding)............................$1.00
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
EVERGREEN MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Photo of a $100 bill)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest....................................................................................... $37,165,996
EXPENSES:
Advisory fee................................................................................... $3,200,042
Distribution fee -- Class A Shares............................................................. 1,425,207
Distribution fee -- Class B Shares............................................................. 30,212
Shareholder services fee -- Class B Shares..................................................... 10,071
Registration and filing fees................................................................... 313,344
Transfer agent fee............................................................................. 274,612
Custodian fee.................................................................................. 164,102
Reports and notices to shareholders............................................................ 63,634
Professional fees.............................................................................. 24,587
Insurance...................................................................................... 16,929
Trustees' fees and expenses.................................................................... 11,013
Miscellaneous.................................................................................. 6,666
5,540,419
Less advisory fee waiver....................................................................... (1,133,446)
Net expenses............................................................................. 4,406,973
Net investment income............................................................................. 32,759,023
Net realized gain on investment transactions...................................................... 1,968
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................................. $32,760,991
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
EVERGREEN MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
(Photo of a $100 bill)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 29, YEAR ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................................................... $ 32,759,023 $ 19,245,941
Net realized gain on investments.................................................... 1,968 19,987
Net increase in net assets resulting from operations............................. 32,760,991 19,265,928
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares...................................................................... (23,995,389) (4,909,735)
Class B Shares...................................................................... (175,957) (56,561)
Class Y Shares...................................................................... (8,587,677) (14,279,645)
Total distributions to shareholders.............................................. (32,759,023) (19,245,941)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold........................................................... 2,126,832,444 1,749,914,977
Proceeds from shares issued from acquisition
of FFB Cash Management Fund...................................................... 592,358,355 --
Proceeds from shares issued from acquisition
of FFB Lexicon Cash Management Fund.............................................. 95,834,929 --
Proceeds from shares issued from acquisition of
First Union Money Market Portfolio............................................... -- 642,287,528
Proceeds from reinvestment of distributions......................................... 11,164,961 14,341,469
Payments for shares redeemed........................................................ (1,650,853,309) (1,703,929,225)
Net increase resulting from Fund share transactions.............................. 1,175,337,380 702,614,749
Net increase in net assets....................................................... 1,175,339,348 702,634,736
NET ASSETS:
Beginning of period................................................................. 975,750,227 273,115,491
End of period....................................................................... $ 2,151,089,575 $ 975,750,227
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS Y SHARES
FINANCIAL HIGHLIGHTS
(Photo of a $100 bill)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED TEN MONTHS
FEBRUARY 29, YEAR ENDED ENDED
1996 AUGUST 31, AUGUST 31, YEAR ENDED OCTOBER 31,
(UNAUDITED) 1995 1994# 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income.................. .03 .05 .03 .03 .04 .07
Less distributions to shareholders from
net investment income............... (.03) (.05) (.03) (.03) (.04) (.07)
Net asset value, end of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+.......................... 2.7% 5.4% 2.9% 3.2% 4.2% 6.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)..................... $475,198 $ 282,668 $273,115 $299,418 $357,917 $437,933
Ratios to average net assets:
Expenses**.......................... .46%* .53% .32%* .39% .36% .30%
Net investment income**............. 5.34%* 5.26% 3.46%* 3.19% 4.18% 6.53%
</TABLE>
# The Fund changed its fiscal year end from October 31 to August 31.
+ Total return is calculated for the periods indicated and is not annualized.
* Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED TEN MONTHS
FEBRUARY 29, YEAR ENDED ENDED
1996 AUGUST 31, AUGUST 31, YEAR ENDED OCTOBER 31,
(UNAUDITED) 1995 1994# 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Expenses............................... .64%* .73% .71%* .71% .72% .70%
Net investment income.................. 5.16%* 5.06% 3.07%* 2.87% 3.82% 6.13%
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS A AND B SHARES
FINANCIAL HIGHLIGHTS
(Photo of a $100 bill)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS JANUARY 4, SIX MONTHS JANUARY 26,
ENDED 1995* ENDED 1995*
FEBRUARY 29, THROUGH FEBRUARY 29, THROUGH
1996 AUGUST 31, 1996 AUGUST 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.......................... $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income......................................... .03 .03 .02 .03
Less distributions to shareholders from net investment
income..................................................... (.03) (.03) (.02) (.03)
Net asset value, end of period................................ $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+................................................. 2.6% 3.5% 2.2% 2.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)..................... $ 1,667,986 $685,155 $7,906 $7,927
Ratios to average net assets:
Expenses**................................................. .76%++ .81%++ 1.46%++ 1.51%++
Net investment income**.................................... 5.05%++ 5.26%++ 4.37%++ 4.54%++
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value. Contingent deferred sales
charge is not reflected. Total return is calculated for the periods indicated
and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS JANUARY 4, SIX MONTHS JANUARY 26,
ENDED 1995* ENDED 1995*
FEBRUARY 29, THROUGH FEBRUARY 29, THROUGH
1996 AUGUST 31, 1996 AUGUST 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
<S> <C> <C> <C> <C>
Expenses...................................................... .94%++ 1.02%++ 1.64%++ 2.39%++
Net investment income......................................... 4.87%++ 5.05%++ 4.19%++ 3.66%++
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of an eagle)
A REPORT FROM YOUR
PORTFOLIO MANAGER
STEVEN C. SHACHAT
We are pleased to present the Evergreen Tax Exempt Money
Market Fund Semi-Annual Report. As you know, effective January (Photo of
19, 1996, First Fidelity Tax Free Money Market Fund was combined Steven C.
into Evergreen Tax Exempt Money Market Fund. As of February 29, Shachat)
the combined assets of the Fund totaled $1,179,182,666.
The past six months have proven to be an exhilarating but challenging ride
for market participants. Evidence that economic activity remained sluggish and
that inflation continued to be under control moved the Federal Reserve Board
to further ease the Federal Funds rate, the rate at which the nation's banks
borrow money from each other and on which all other short-term rates are
based, in January. This was the third reduction for this important rate in the
past eight months, the first occurring in July. The latest 25-basis-point
reduction in January put the rate at 5 1/4%. In addition, at its January
meeting, the Fed also lowered its discount rate, the rate at which the Federal
Reserve lends to member banks, to 5 1/4%, and, subsequently, commercial banks
dropped the prime lending rate to 8 1/4%.
More recently, however, economic strength has been reflected in some of the
indicators released. In his semi-annual Humphrey-Hawkins testimony before
Congress in February, Federal Reserve Board Chairman Alan Greenspan shocked the
markets by making comments that indicated the Fed is probably not going to
aggressively ease interest rates any time soon, barring more evidence that the
economy is faltering badly. In addition, an unusual combination of circumstances
had kept the true tempo of activity somewhat opaque as important economic
statistics were first delayed by the government shutdown, and then skewed as a
giant blizzard smothered the East Coast. Exceptionally weak data for January
kept alive notions that the economy might be downsizing, but the unknown impact
of the blizzard left a lot of doubt. Although everyone expected some rebound
when the weather cleared, the avalanche of new jobs that appeared in February
took the market by surprise.
Since the February employment data, the financial markets have adjusted to
the possibility of quickened economic growth and the absence of an accommodative
Fed. We do not expect any further pronounced trend movement in interest rates
until more solid statistics and distortion-free data become available. For now,
it looks as if the Fed is on hold until it can evaluate the true, underlying
tempo of economic activity.
Although short-term interest rates fell in response to the Federal Reserve's
reduction of the Federal Funds rate, the short-term municipal market continues
to be influenced by market technicals (i.e. supply/demand). It is for this
reason, along with a flat yield curve, that we continued to maintain a short
maturity structure. The weighted average maturity as of February 29, 1996, was
21 days. The significant position in variable rate securities (79% of the total
investments) allowed the Fund to benefit from the high returns available from
the short-term maturity sector of the money market yield curve.
As always, we remain dedicated to our effort of providing superior investment
results, and look forward to maintaining the Fund's commitment to solid
performance and quality service.
* THE FUND'S YIELD MAY VARY, AND THERE CAN BE NO GUARANTEE THAT THE FUND WILL
ACHIEVE ITS OBJECTIVE OR ANY PARTICULAR TAX EXEMPT YIELD. INCOME MAY BE SUBJECT
TO SOME STATE OR LOCAL TAXES, AND THE FEDERAL ALTERNATIVE MINIMUM TAX FOR
CERTAIN INVESTORS. AN INVESTMENT IN THE 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.
13
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
<CAPTION>
SHORT-TERM MUNICIPAL SECURITIES -- 99.6%
ALABAMA -- 3.7%
$ 3,170 Alabama Hsg. Fin. Auth. MHRB
(Westshore Landing Apts.)
Ser. H 1995, 3.45%-VRDN
(LOC: Southtrust Bk. of Alabama,
N.A.).............................. $ 3,170,000
2,420 Alabama IDA-IDRB
(Air-Dro Cylinders, Inc.),
3.65%-VRDN
(LOC: Southtrust Bk. of Alabama,
N.A.).............................. 2,420,000
3,700 Alabama IDA-IDRB
(Automation Technologies Ind.
Inc.), 3.65%-VRDN
(LOC: Columbus Bk. & Tr. Co.)...... 3,700,000
5,860 City of Northport Multifamily
Hsg. Ref. Rev. Wt. Ser. A 1993
(Northbrook I), 3.45%-VRDN
(LOC: Southtrust Bk. of Alabama,
N.A.).............................. 5,860,000
2,265 City of Northport Multifamily
Hsg. RRB (River Run Apt.)
Series A, 3.60%-VRDN
(LOC: Amsouth Bk., N.A.)........... 2,265,000
Coml. Dev. Auth. of the City
of Birmingham RB,
3.70%-VRDN
(LOC: Amsouth Bk., N.A.)
1,230 (Avondale Comm. Park, Phase II).... 1,230,000
705 (Southside Business Ctr.).......... 705,000
7,115 Ed. Bldg. Auth. of the City of
Homewood RB (Samford Univ.)
Ser. 1988C, 3.40%-VRDN
(LOC: Amsouth Bk., N.A.)........... 7,115,000
3,500 IDB of Mobile Cnty. RB
(Sherman Intl. Corp.)
Ser. 1994-A, 3.65%-VRDN
(LOC: Columbus Bk. & Tr. Co.)...... 3,500,000
3,000 IDB of Prattville IDRB
(Kuhnash Ppty.), 3.65%-VRDN
(LOC: PNC Bk.)..................... 3,000,000
2,475 IDB of the City of Foley IDRB
(Vulcan, Inc.), 3.45%-VRDN
(LOC: Amsouth Bk., N.A.)........... 2,475,000
1,100 IDB of the City of Livingston
IDRB (Toin Corp. U.S.A.)
Ser. 1989, 3.90%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 1,100,000
PRINCIPAL
AMOUNT
(000) VALUE
ALABAMA -- CONTINUED
$ 2,300 IDB of the City of Pell IDRB
(Reh Kinder/Gorbel),
3.70%-VRDN
(LOC: Key Bk. of New York)......... $ 2,300,000
1,000 IDB of the City of Tuscaloosa
RRB (Field Container Corp.)
Ser. 1992, 3.35%-VRDN
(LOC: Amer. Natl. Bk. & Tr.
Co. of Chicago).................... 1,000,000
4,200 Port City Med. Clinic Brd. Mobile
Hosp. RB
(Mobile Infirmary Assn.)
Ser. A, 3.75%-VRDN
(LOC: Fuji Bk., Ltd.).............. 4,200,000
44,040,000
ARKANSAS -- .3%
3,700 City of Pine Bluff IDRB
(Camden Wire), 3.45%-VRDN
(LOC: Chemical Bk.)................ 3,700,000
ARIZONA -- 5.5%
200 Cnty. of Maricopa IDA-IDRB
(McClane Co.) Ser. 1984,
3.50%-VRDN
(LOC: Barclay's Bk. PLC)........... 200,000
9,000 IDA of the City of Phoenix
Arpt. Fac. RB
(Amer. West Airlines, Inc.)
Ser. 1986, 3.75%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 9,000,000
Maricopa Cnty.
PCRB Ref.-VRDN
(El Paso Electric Co. Palo Verde)
26,400 1984 Ser. E, 3.40%
(LOC: Cr. Suisse).................. 26,400,000
5,000 1985 Ser. A, 3.55%
(LOC: Westpac Bkg. Corp.).......... 5,000,000
24,800 1994 Ser. A, 3.50%
(LOC: Citibank, N.A.).............. 24,800,000
65,400,000
CALIFORNIA -- 11.3%
22,500 California Rev. Antic. Wt. Ser. C,
5.75%, 4/25/96..................... 22,573,231
1,400 City of Barstow MHRB (Mercury
Svgs. & Ln. Assn./Rimrock Vlg.
Apts.) 1988 Ser. A,
3.70%-VRDN
(LOC: Mercury Svgs. & Ln.,
Coll: US Treas. Bills)............. 1,400,000
</TABLE>
14
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
CALIFORNIA -- CONTINUED
$ 4,500 City of Corona MHRB
(Household Bk.) 1985 Ser. B,
3.525%-VRDN
(LOC: Household Bk.-Gtd. by
Household Fin. Corp.).............. $ 4,500,000
1,500 City of Hemet MHRB (Mercury
Svgs. & Ln. Assn. Sunwest Resort
Vlg.) 1986 Ser. B, 3.50%-VRDN
(LOC: Mercury Svgs. & Ln.,
Coll: U.S. Treas. Bills)........... 1,500,000
4,250 City of Paramount Hsg. Auth.
MHRB (Century Pl. Apts.),
4.08%-VRDN
(LOC: Heller Finl., Inc.)**........ 4,250,000
8,525 Cmnty. Dev. Commn. of the City of
Oceanside MHRB
(Parcwood Apt.) Ser. 1985A,
3.525%-VRDN (LOC: Western Fed.
Svgs. & Ln. Assn.,
Coll: U.S. Treas. Bills)........... 8,525,000
800 Cnty. of Contra Costa TRANS
(Contra Costa Public Fac. Corp.),
4.50%, 7/3/96...................... 802,067
13,995 Cnty. of Orange Irvine Coast Assmt.
Dist. No. 88-1 Ltd.
Oblig. Impt. Bds. 3.75%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.,
Fuji Bk., Ltd., & Mitsubishi Bk.,
Ltd., 1/3 each).................... 13,995,000
6,500 Cnty. of San Bernadino Multifamily
Loan RB
(Mercury Svgs. & Ln. Assn./Pooled)
1985 Ser. A,
3.95%-VRDN
(LOC: Mercury Svgs. & Ln.,
Coll: U.S. Treas. Bills)........... 6,500,000
1,900 Glenn Cnty. IDA-PCRB
(Land O'Lakes, Inc.)
Ser. 1995, 3.90%-VRDN
(LOC: Sanwa Bk., Ltd.)............. 1,900,000
4,500 Hsg. Auth. of the City of San Diego
MHRB (Oro Vista Apt.)
Ser. 1987A, 3.65%-VRDN
(LOC: Mercury Svgs. & Ln.,
Coll: U.S. Treas. Bills)........... 4,500,000
5,000 Hsg. Auth. of the City of Santa Ana
MHRB (Villa Verde Apt.)
Ser. 1985B, 3.60%-VRDN
(LOC: Mercury Svgs. & Ln.,
Coll: U.S. Treas. Bills)........... 5,000,000
PRINCIPAL
AMOUNT
(000) VALUE
CALIFORNIA -- CONTINUED
$ 2,600 IDA of the City of Simi Vly. IDRB
(Wambold Furniture)
Ser. 1984, 4.00%-VRDN
(LOC: Wells Fargo Bk., N.A.)....... $ 2,600,000
8,500 Lancaster Redev. Agy. MHRB
(Far West Svgs. & Ln. Assn./20th
St. Apts.) 1985 Ser. R,
3.70%-VRDN (LOC: Far West Svgs. &
Ln. Assn., Coll: U.S. Treas.
Bills)............................. 8,500,000
21,831 Pitney Bowes Cr. Corp. Leasetops
Trs. (Bart Telesystem Lease),
3.65%-VRDN
(LOC: ABN Amro Bk.)**.............. 21,831,000
15,375 San Bernadino Cnty. COP
Ser. 1995, 3.40%-VRDN
(LIQ: Merrill Lynch Cap. Svcs.)**.. 15,375,000
4,300 San Bernadino Cnty. MHRB
(Ontario), 3.65%-VRDN
(LOC: Sanwa Bk., Ltd.)............. 4,300,000
1,000 San Diego TANS Ser. A,
4.75%, 7/3/96...................... 1,002,632
4,000 Santa Paula Pub. Fin. Auth. RB
(Wtr. Sys. Acquisition) Ser. 1996,
3.70%-VRDN
(LOC: Bk. of California
& Sumitomo Bk., Ltd.).............. 4,000,000
133,053,930
COLORADO -- 3.0%
5,000 Adams Cnty. IDRB
(Yellow Fght. Sys., Inc.)
Ser. 1983, 3.60%-VRDN
(LOC: Union Bk. of Switzerland).... 5,000,000
5,000 Arapahoe Cnty. MHRB Ref.
(Stratford Sta.) Ser. 1994,
4.30%-VRDN
(LOC: Heller Finl., Inc.).......... 5,000,000
2,680 Arapahoe Cnty. Parkview Met.
Dist. GO Ser. 1993,
3.60%-VRDN (LOC: Cent. Bk./
Bk. Western, N.A.)................. 2,680,000
550 Boulder Cnty. Dev. RB
(The Geological Society of Amer.,
Inc.) Ser. 1992-ARB,
4.25%, 12/1/96
(LOC: Banc One Boulder)............ 550,000
City and Cnty. of Denver Arpt. Sys.
RB.-TECP
(LOC: Sanwa Bk., Ltd.)
11,000 3.60%, 3/1/96...................... 11,000,000
5,000 3.55%, 4/9/96...................... 5,000,000
</TABLE>
15
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
COLORADO -- CONTINUED
$ 6,340 Colorado Hsg. Fin. Auth. RB
MERLOTS Ser. C-ARB,
4.125%, 2/1/97
(LIQ: Meridian Bk.)**.............. $ 6,340,000
35,570,000
DELAWARE -- 1.0%
3,000 Delaware EDA- IDRB
(Arlon, Inc.) Ser. 1989,
3.75%-VRDN
(LOC: Bk. of Amer., Illinois)...... 3,000,000
5,740 Delaware Hsg. Auth. RB
MERLOTS Ser. G-ARB,
4.125%, 12/1/96 (FGIC)**........... 5,740,000
2,480 New Castle IDA-IDRB
(Toys R Us), 3.40%-VRDN
(LOC: Bankers Tr. Co.)............. 2,480,000
11,220,000
DISTRICT OF COLUMBIA -- 2.9%
Dist. of Columbia GO Gen. Fd.
Recovery Bd. Ser. B,
3.55%-VRDN
10,600 (LOC: Westdeutsche Landesbank)..... 10,600,000
7,800 (LOC: Union Bk. of Switzerland).... 7,800,000
5,120 Dist. of Columbia GO RB
(Puttable Floating Opt.
Tax-Exmp. Rcpt., Ser. PA-64)
Ser. 1993C, 3.70%-VRDN
(LIQ: Merrill Lynch Cap. Svs.)**... 5,120,000
Dist. of Columbia GO RFB,
3.50%-VRDN
3,800 Ser. 1992A-1
(LOC: Natl. Westminster Bk.)....... 3,800,000
3,400 Ser. 1992A-4
(LOC: Toronto Dominion Bk.)........ 3,400,000
3,100 Ser. 1992A-5
(LOC: Bk. of Nova Scotia).......... 3,100,000
33,820,000
PRINCIPAL
AMOUNT
(000) VALUE
FLORIDA -- .7%
$ 2,500 Florida Hsg. Fin. Auth. Long
Option Mode Ser. 2-CR-25C
ARB, 3.70%, 6/15/96 (FGIC)......... $ 2,500,000
500 Monroe Cnty. Sch. Dist. TANS,
4.00%, 6/5/96...................... 500,000
2,800 Orange Cnty. Hsg. Fin. Auth.
MHRB Ser. E, (Oakwood)-ARB,
4.20%, 10/1/96
(LOC: Fleet Bk. N.A.).............. 2,800,000
1,070 Palm Beach Cnty. Hsg. RB
(Meridian Hsg.) Ser. 1985,
4.075%-VRDN (LOC: Bk. of
California, N.A.).................. 1,070,000
1,000 Putnam Cnty. Dev. Auth. PCRB
(Seminole Elec. Coop)
Ser. D-ARB, 3.30%, 6/15/96
(Coop Fin. Corp.).................. 1,000,000
7,870,000
GEORGIA -- 1.5%
1,000 Albany Dougherty Cnty. Hosp. RB
Ser. 1984A, 3.65%-VRDN
(Gtd. by Merck & Co., Inc.)........ 1,000,000
5,000 Albany Dougherty Payroll,
3.65%-VRDN
(Gtd. by Merck & Co., Inc.)........ 5,000,000
2,550 Clayton Cnty. Hsg. Auth. RB
(Oxford Townhomes),
3.50%-VRDN
(LOC: Amsouth Bk., N.A.)........... 2,550,000
6,000 Dev. Auth. of Polk Cnty. RB
(Kimoto Tech, Inc.)
Ser. 1985, 3.65%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 6,000,000
2,200 Hsg. Auth. of Columbus MHRB Ref.
(Quail Ridge) Ser. 1988,
3.75%-VRDN
(LOC: Columbus Bk. & Tr. Co.)...... 2,200,000
1,000 Hsg. Auth. of Marietta MHRB
(Falls at Bells Ferry)-ARB,
3.55%, 7/15/96
(LOC: Guardian Svgs. & Ln.,
Houston)........................... 1,000,000
17,750,000
</TABLE>
16
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
ILLINOIS -- 12.9%
$ 9,740 Aurora MHRB
(Fox Vly. Vlg.), 3.95%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... $ 9,740,000
15,660 Central Lake Cnty. Joint Action
Wtr. Agy. (MSTR 1995 SG-11)
Wtr. RRB Ser. 1993,
3.40%-VRDN
(LIQ: Societe Generale)**.......... 15,660,000
1,000 Chicago Arpt. Spl. Fac. RB
(CSX Beckett Aviation),
3.43%-VRDN
(LOC: Barclay's Bk. PLC)........... 1,000,000
4,200 City of Chicago IDRB
(Fed. Marine Term.),
3.60%-VRDN
(LOC: Royal Bk. of Canada)......... 4,200,000
6,680 City of Chicago (MSTR 1995 SGA-8)
GO Bds. Ser. 1993B,
3.40%-VRDN
(LIQ: Societe Generale)**.......... 6,680,000
2,640 City of Jacksonville Indl. Proj. RB
(AGI, Inc.) Ser. 1995,
3.60%-VRDN
(LOC: Bk. of Amer., Illinois)...... 2,640,000
15,000 City of Oakbrook Terrace
Multifamily Hsg. Mtg. RB
(Renaissance) Ser. 1985A
Subser. III-ARB, 4.75%, 4/1/96
(Invt. Agreement: Bayerische
Landesbank, Girozentrale).......... 15,000,000
5,900 City of West Chicago IDRB
(Acme Printing Inc.),
3.65%-VRDN
(LOC: Bk. of Tokyo, Ltd.).......... 5,900,000
3,400 Illinois Dev. Fin. Auth. EDRB
(MTI Corp.), 3.90%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 3,400,000
Illinois Dev. Fin. Auth.
IDRB-VRDN (LOC: Amer. Natl. Bk. &
Tr. Co. of Chicago)
2,000 (Prairie Packaging), 3.55%......... 2,000,000
2,500 (Uhlich Children's Home), 3.35%.... 2,500,000
1,395 (Saint Xavier Univ.)
Ser. 1992, 3.35%................... 1,395,000
1,000 (Camcraft, Inc.) Ser. 1993, 3.55%.. 1,000,000
3,250 (Icon Metalcraft, Inc.)
Ser. 1995, 3.70%**................. 3,250,000
6,800 Illinois Dev. Fin. Auth. RB
(Gen. Accident Ins. Co. of Amer.)
Ser. 1985-ARB, 4.10%, 3/1/96
(Gtd. by Gen. Accident Ins.
Co. of Amer.)...................... 6,800,000
PRINCIPAL
AMOUNT
(000) VALUE
ILLINOIS -- CONTINUED
$ 3,010 Illinois Health. Fac. Auth. RB
(Elmhurst Mem. Hosp.)
Ser. A, 3.65%-VRDN
(LOC: Sanwa Bk., Ltd.)............. $ 3,010,000
1,000 Illinois Hlth. Fac. Auth. RB
(Highland Park Hosp.)-ARB,
4.00%, 6/1/96 (SBPA: FGIC)......... 1,000,000
5,045 Illinois Hsg. Dev. Auth. RB
(Illinois Ctr. Apts.),
3.65%-VRDN
(LIQ: Fuji Bk., Ltd.).............. 5,045,000
14,184 LaSalle Natl. Bk. Leasetops Trs.
Ser. 1995B 1995, 3.65%-VRDN
(LIQ: LaSalle Natl. Bk.)**......... 14,183,741
3,000 Vlg. of Carol Stream IDRB
(MI Enterprises, Inc.),
3.45%-VRDN
(LOC: Amer. Natl. Bk. & Tr.,
Chicago)........................... 3,000,000
16,640 Vlg. of Hazel Crest Retirement
Ctr. RB (Waterford Estates)
Ser. A 1992, 3.95%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... 16,640,000
1,200 Vlg. of Palatine IDRB
(Lightner Land Holdings LLC)
Ser. 1995, 3.85%-VRDN
(LOC: Bk. One, Chicago, N.A.)...... 1,200,000
10,000 Vlg. of Schaumburg MHRB
(Treehouse II Apt.),
3.95%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... 10,000,000
2,000 Vlg. of Skokie EDRB
(Skokie Fashion Square Assn.)
Ser. 1984, 3.65%-VRDN
(LOC: Bankers Tr. New York Co.).... 2,000,000
15,210 Vlg. of Vernon Hills MHRB
(Hawthorn Lakes) Ser. 1991,
4.20%-VRDN
(SBPA: Fuji Bk., Ltd.)............. 15,210,000
152,453,741
INDIANA -- 2.4%
16,000 City of Fort Wayne PCRB
(Gen. Mtrs. Corp.), 3.75%-VRDN
(Gty. Gen. Mtrs. Corp.)............ 16,000,000
2,750 City of Hammond EDRB
of 1994 (Lear Seating Corp.),
3.95%-VRDN
(LOC: Chemical Bk.)................ 2,750,000
1,000 Custer Cnty. PCRB
(Amoco Oil Corp.)-ARB,
3.80%, 4/1/96...................... 1,000,000
</TABLE>
17
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
INDIANA -- CONTINUED
$ 3,150 Indianapolis EDA-EDRB
(Sutton Pl. Apt.) Ser. A-ARB,
4.30%, 10/1/96
(Gtd. Inv. Contract: Berkshire
Hathaway).......................... $ 3,150,000
3,500 Mishawaka EDA-EDRB
(Elco Ind., Inc.), 4.00%-VRDN
(LOC: First Chicago NBD Corp.)..... 3,500,000
2,000 South Bend IDB Multifamily RB
(Maple Lane Assn.) Ser. 1987,
3.75%-VRDN
(LOC: Society Bk. of Cleveland).... 2,000,000
28,400,000
KANSAS -- 1.3%
8,500 City of Lenexa MHRB Ref.
(Charter House Apts.)
Ser. 1988-ARB, 4.35%, 4/2/96
(LOC: Home Svgs. Assn. of Kansas
City, Coll: Fed. Home
Ln. Bk.)........................... 8,500,000
City of Salina RB (Salina Central
Mall L.P.) Ser. 1984,
3.40%-VRDN
(LOC: Boatmen's Bancshares, Inc.)
1,105 Dillard's.......................... 1,105,000
1,200 Penney's........................... 1,200,000
3,000 City of Wichita IDRB
(Brenner Tank Inc.),
3.55%-VRDN
(LOC: Banc One, Milwaukee)......... 3,000,000
1,800 Prairie Vlg. MHRB
(J.C. Nichol's Co.),
3.70%-VRDN
(Gtd. by Bankers Life Ins. Co.).... 1,800,000
15,605,000
KENTUCKY -- 1.6%
1,000 Clark Cnty. PCRB
(East Kentucky Co.)-ARB,
3.70%, 4/15/96
(Gtd. by Coop Fin. Corp.).......... 1,000,000
10,300 Cnty. of Ohio PCRB
(Big Rivers Elec. Corp.)
Ser. 1985, 3.70%-VRDN
(LOC: Chemical Bk.)................ 10,300,000
PRINCIPAL
AMOUNT
(000) VALUE
KENTUCKY -- CONTINUED
$ 904 Jefferson Cnty. IDRB
(Belknap Inc.), 3.65%-VRDN
(LOC: Chemical Bk.)................ $ 904,000
5,900 Kentucky Pollution Abatement
Wtr. Res. Fin. Auth. RB
(Toyota Motors), 5.60%-VRDN
(LIQ: Sanwa Bk., Ltd.)............. 5,900,000
1,000 Pendleton Cnty. RB
Self Ins. Fndg. Kentucky Assn.
Cnty. Fund-ARB, 4.00%, 7/1/96
(LOC: PNC Bk.)..................... 1,000,000
19,104,000
LOUISIANA -- 1.6%
19,000 Parish of West Feliciana PCRB
(Gulf St. Util. Co.) Ser. 1986,
4.20%-VRDN
(LOC: Long-Term Cr. Bk. of Japan,
Ltd.).............................. 19,000,000
MARYLAND -- .6%
1,000 Howard Cnty. MHRB
(Sherwood Crossing L.P.)
Ser. A 1985-ARB, 4.25%, 6/1/96
(LOC: Guardian Svgs. & Ln.
Assn.)............................. 1,000,000
5,715 Maryland Cmnty. Dev. Admin. Dept.
Single Family Prog.
Bds.-ARB, 3.90%, 4/1/96
(LOC: First Natl. Bk. of
Chicago)........................... 5,715,000
1,300 Mayor & City Council of Baltimore
Economic Dev.
RRB (Field Container Corp.),
Ser. 1992, 3.35%-VRDN
(LOC: Amer. Natl. Bk. &
Tr. Co. of Chicago)................ 1,300,000
8,015,000
MASSACHUSETTS -- 1.5%
460 City of Lowell Indl. RB
(Oak Realty Tr.) Ser. 1985,
4.075%-VRDN
(LOC: First Natl. Bk. of Boston)... 460,000
15,000 Massachusetts Bay Transn. Auth.
TRANS Ser A. 1995,
5.50%, 3/1/96...................... 15,000,000
500 Massachusetts Indl. Finl. Agy.
(Copley Pharmac),
4.325%-VRDN
(LOC: First Natl. Bk. of Boston)... 500,000
</TABLE>
18
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
MASSACHUSETTS -- CONTINUED
$ 855 Massachusetts Indl. Finl. Auth.
IDRB (Jencoat Metal)
Ser. 1994, 4.075%-VRDN
(LOC: Bk. of Boston)............... $ 855,000
700 Massachusetts Indl. Finl. Auth.
IDRB (Portland Causeway Rlty.)
Ser. 1988, 4.075%-VRDN
(LOC: Citibank, N.A.).............. 700,000
17,515,000
MICHIGAN -- 1.0%
2,909 Economic Dev. Corp. of the City of
Battle Creek RB (Michigan
Carton & Paperboard Co.)
Ser. 1992, 3.35%-VRDN
(LOC: Amer. Natl. Bk. & Tr. Co. of
Chicago)........................... 2,909,000
2,000 Economic Dev. Corp. of the Twp. of
Van Buren Economic RB
(Daikin Clutch USA, Inc.)
3.65%-VRDN
(LOC: Sanwa Bk., Ltd.)............. 2,000,000
6,800 Michigan Strategic Fund Ltd. Oblig.
RB (Dow Chem. Co.),
3.70%-VRDN
(Gtd. by Dow Chem. Co.)............ 6,800,000
500 Western Sch. Dist. Refunding
GO, 3.70%, 5/1/96 (MBIA)........... 500,000
12,209,000
MINNESOTA -- 1.6%
2,500 Eagle Tax-Exmp. Tr. Cl. A- COP
(Minnesota Hsg. Fin. Agy.)
Ser. 94C2302, 3.42%-VRDN
(LOC: Citibank, N.A.)**............ 2,500,000
14,905 Eden Prairie MHRB
(Park at City West Apt.),
3.95%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... 14,905,000
890 Minneapolis St. Paul Hsg.
Fin. Brd. RB Single Family Mtg.
(Minneapolis/Saint Paul Family Hsg.
Pgm., Phase VI)
Ser. B 1988-ARB,
4.125%, 8/1/96 (Coll: GNMA)........ 890,000
18,295,000
PRINCIPAL
AMOUNT
(000) VALUE
MISSISSIPPI -- .3%
$ 3,000 Lee Cnty. IDRB (Hunter Douglas
Inc.) Ser. 1985, 3.75%-VRDN
(LOC: Bk. of Amer. Natl. Tr. & Svg.
Assn.)............................. $ 3,000,000
MISSOURI -- 1.4%
IDA of the City of Kansas MHRB
Ser. A 1988-ARB, 4.35%, 4/1/96
(LOC: Home Svgs. Assn.
of Kansas City)
3,890 (President Gardens Apt.)........... 3,890,000
3,000 (Twin Oaks I Apt.)................. 3,000,000
3,000 (Twin Oaks II Apt.)................ 3,000,000
2,175 Indl. Dev. Hosp. of Kansas City
Hosp. RB (Health. Svc. Sys.)
3.55%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... 2,175,000
4,415 Missouri Dev. Fin. Brd. IDRB
(Cook Composites & Polymers Co.)
Ser. 1994 3.60%-VRDN
(LOC: Societe Generale)............ 4,415,000
500 Missouri Environmental Impt.
& Energy RB (Union Elec. Co.)
Ser. 1984B-ARB, 4.00%, 6/1/96
(LOC: Union Bk. of Switzerland).... 500,000
16,980,000
MONTANA -- .3%
760 Butte Silver Bow City & Cnty.
(Copper City Assn.),
5.00%-VRDN
(LOC: Bank of America)............. 760,000
3,200 Chesterfield Cnty. IDA-PCRB
(VA Elec. & Pwr. Co.)-ARB,
4.10%, 4/1/96...................... 3,200,000
3,960,000
NEBRASKA -- .4%
4,200 Lancaster Cnty. IDRB
(AS Mid-Amer., Inc.) Ser. 1994,
4.30%-VRDN
(LOC: Heller Finl., Inc.).......... 4,200,000
NEW HAMPSHIRE -- .4%
3,645 New Hampshire Higher Ed. & Health
Fac. Auth. RB
(MSTR 1995 SG-19)
Dartmouth College Issue Ser. 1993,
3.40%-VRDN
(LIQ: Societe Generale)**.......... 3,645,000
</TABLE>
19
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
NEW HAMPSHIRE -- CONTINUED
$ 1,500 New Hampshire Hsg. Fin. Auth. MHRB
(Oxford), 3.60%-VRDN
(Ins. by Contl. Cas. Co.).......... $ 1,500,000
5,145,000
NEW JERSEY -- .1%
1,000 New Jersey GO,
5.20%, 3/1/96...................... 1,000,000
NEW MEXICO -- 2.7%
31,300 City of Farmington PCRB
(El Paso Elec. Co. Four Corners)
1994 Ser. A, 3.50%-VRDN
(LOC: Citibank, N.A.).............. 31,300,000
NEW YORK -- 5.4%
8,000 Eagle Tax-Exmp. Tr. Cl. A-COP
(New York State Environment Facs.
Corp.) Ser. 943205,
3.42%-VRDN
(LOC: Citibank, N.A.)**............ 8,000,000
9,500 Eagle Tax-Exmp. Tr. Cl. A-COP
(Niagara Mohawk Pwr. Corp.)
Ser. 943208, 3.42%-VRDN
(LOC: Citibank, N.A.)**............ 9,500,000
1,000 Nassau Cnty. Indl. Dev. Agy.
IDRB (Crane Plumbing, Inc.),
3.65%-VRDN
(LOC: Amer. Natl. Bk. & Tr. of
Chicago)........................... 1,000,000
10,000 New York City GO Periodic Floats,
3.50%-VRDN......................... 10,000,000
7,150 New York City GO
Subser. E2, 3.50%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 7,150,000
New York City GO
Subser. H3-TECP, 3.50%
(LIQ: Banque Paribas)
3,000 8/9/96............................. 3,000,000
11,900 8/19/96............................ 11,900,000
12,500 New York City GO
Subser. E5, 3.50%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... 12,500,000
1,000 New York Energy Resh. and Dev.
Auth. (Long Island Lighting Co.)
Ser. B 1985-ARB, 4.70%, 3/1/96
(LOC: Deutsche Bk. AG)............. 1,000,000
64,050,000
PRINCIPAL
AMOUNT
(000) VALUE
NORTH CAROLINA -- 1.0%
$ 7,700 Columbus Cnty. Indl. Fac. &
Pollution Ctl. Fin. Auth.
Solid Waste Disposal RB
(Fed. Paper Brd. Co., Inc.)
Ser. 1992, 3.80%-VRDN
(LOC: Dai-Ichi Kangyo Bk., Ltd.)... $ 7,700,000
3,000 Guilford Cnty. Indl. Fac. &
Pollution Control Fing. Auth.
RB Sewage Disp.
(High Pt. Chem.), 3.90%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... 3,000,000
1,020 NCNB Pooled Tax-Exmp. Tr.
COP Ser. 1990A, 4.125%-VRDN
(LOC: NationsBank of North
Carolina)**........................ 1,020,000
11,720,000
NORTH DAKOTA -- .9%
10,100 Grand Forks Hosp. Fac. RB
(United Hosp. Oblig. Gp.),
3.45%-VRDN
(LOC: LaSalle Natl. Bk.)........... 10,100,000
OHIO -- 1.4%
5,000 Dayton Ohio Spec. Fac. RB
(Emery Air Fght. Corp.) Ser. 1993E,
3.60%-VRDN
(LOC: Mellon Bk., N.A.)............ 5,000,000
3,000 Ohio Hsg. Fin. Agy. MHRB
Ser. B, 4.20%-VRDN................. 3,000,000
(LIQ: Fuji Bk., Ltd.)
4,200 Summit Cnty. IDA-IDRB
(Shin-Etsu Silicones of Amer. Inc.)
Ser. 1994, 3.70%-VRDN
(LOC: Bk. of Tokyo, Ltd.
& Mitsubishi Bk., Ltd.)............ 4,200,000
4,800 Stark Cnty. IDRB (Crane
Plumbing, Inc.), 3.65%-VRDN
(LOC: Amer. Natl. Bk. & Tr. Co. of
Chicago)........................... 4,800,000
17,000,000
OKLAHOMA -- .4%
1,190 Tulsa IDA-IDRB Ref.
(Hillcrest Partnership)
3.50%-VRDN
(LOC: Bk. of Tokyo, Ltd.).......... 1,190,000
3,000 Tulsa IDA Health Care
Fac. RB (Medical Support Svcs.)
3.50%-VRDN
(Gtd. by Medical Support Svcs.).... 3,000,000
4,190,000
</TABLE>
20
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
OREGON -- 1.0%
Oregon EDRB Series CLVI,
3.85%-VRDN
(LOC: Bk. of California, N.A.)
$ 1,960 (Pacific Coast Seafoods Co.)....... $ 1,960,000
1,210 (Pacific Oyster Co.)............... 1,210,000
2,300 Oregon EDRB (Stagg Foods, Inc.)
Ser. 75, 3.60%-VRDN
(LOC: Bk. of Amer.)................ 2,300,000
5,050 Oregon Health Hsg. Ed. & Culture
Fac. Auth. RB
(Evangelical Lutheran)
Ser A, 3.40%-VRDN
(LOC: First Natl. Bk. Sys.)........ 5,050,000
1,000 Port Portland IDA-IDRB
(Schnitzer Steel), 3.30%-VRDN
(LOC: Westpak Bkg. Corp.).......... 1,000,000
11,520,000
PENNSYLVANIA -- 3.5%
1,430 Chester Cnty. IDA Coml. Dev. RB
(Plaza Assn.) Ser. A,
3.70%-VRDN
(LOC: First Fed. Svgs. & Ln.)...... 1,430,000
3,000 Chester Cnty. IDA Mfg. Fac. RB
(Devault Packing Co., Inc.)
Ser. 1995, 3.85%-VRDN
(LOC: Meridian Bk.)................ 3,000,000
4,300 Delaware Cnty. IDA-IDRB
(Scott Paper Co.) Ser. 1984C,
3.85%-VRDN
(LOC: Fuji Bk., Ltd.).............. 4,300,000
500 Elk Cnty. IDA-IDRB Ref.
(Stackpole Corp.) Ser. 1989,
4.075%-VRDN
(LOC: First Natl. Bk. of Boston)... 500,000
Emmaus Gen. Auth. Local Govt. RB
Series 1989E, 3.90%-VRDN
(LOC: Fuji Bk., Ltd.)
7,000 (City of Harrisburg) Subser. E7.... 7,000,000
10,000 (Dover Area Sch. Dist.) Subser.
B11................................ 10,000,000
650 Lawrence Cnty. IDA-PCRB
(Calgon Carbon) 1983 Ser. A,
3.65%-VRDN
(LOC: The Bk. of New York)......... 650,000
4,000 Mercer Cnty. IDA-IDRB
(Penntecq, Inc.), 3.85%-VRDN
(LOC: Dai-Ichi Kangyo Bk., Ltd.)... 4,000,000
PRINCIPAL
AMOUNT
(000) VALUE
PENNSYLVANIA -- CONTINUED
$ 1,500 Montgomery Cnty. IDA-RB
(Laneko Engineering Co.)
Ser. 1995, 3.85%-VRDN
(LOC: Meridian Bk.)................ $ 1,500,000
3,000 Moon IDRB (One Thorn Run Ctr.) Ser.
A 1995, 3.65%-VRDN
(LOC: Integra Bk.)................. 3,000,000
1,300 Pennsylvania Economic
Dev. Fin. Auth. RB
(C.F. Martin & Co., Inc.) Ser. H,
3.85%-VRDN
(LOC: Meridian Bk.)**.............. 1,300,000
2,050 West Cornwall Twp. Mun. Auth. RB
(Lebanon Vly. Brethren
Home) Ser. 1995, 3.625%-VRDN
(LOC: Meridian Bk.)................ 2,050,000
2,995 Westmoreland Cnty. IDA-IDRB
(White Consolidated Ind., Inc.)
ARB, 4.18%, 6/1/96
(LOC: Chemical Bk.)................ 2,996,325
41,726,325
RHODE ISLAND -- .4%
5,000 Rhode Island Solid Waste Mgmt.
Corp. Landfill Lease Notes
Ser. A 1995, 4.75%, 8/1/96......... 5,007,002
SOUTH CAROLINA -- 2.2%
3,500 Darlington Cnty. IDA-IDRB
(Hobart Corp.), 4.20%-VRDN
(LOC: Fuji Bk., Ltd.).............. 3,500,000
4,000 South Carolina Jobs EDA-EDRB
(B.F. Shaw, Inc.) Ser. 1995,
3.80%-VRDN (LOC: Mercantile
Bk. of St. Louis N.A.)............. 4,000,000
South Carolina Jobs EDA-EDRB
Ser. 1989B, 3.55%-VRDN
(LOC: Cr. Coml. de France)
650 (Ridge Pallets).................... 650,000
800 (Tuttle Co., Inc.)................. 800,000
2,700 South Carolina Jobs EDA-EDRB
(Roller Bearing Co.) Ser. 1994A,
4.17%-VRDN
(LOC: Cr. Coml. de France)**....... 2,700,000
8,355 South Carolina Pub. Svs. Auth. RRB
(MSTR 1994 SG-2)
Ser. 1993A, 3.40%-VRDN
(LIQ: Societe Generale)**.......... 8,355,000
</TABLE>
21
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
SOUTH CAROLINA -- CONTINUED
$ 5,049 State Cap. Impt. Bd.
(Ser. BTP-27 Ctf. ) Ser. V,
3.45%-VRDN
(LOC: Bankers Tr. Co.)............. $ 5,049,000
1,000 York Cnty. PCRB
(North Carolina Elec.)
NRU 84N Subser. 5-ARB,
3.75%, 3/15/96..................... 1,000,000
26,054,000
SOUTH DAKOTA -- .3%
3,500 South Dakota Hsg. Dev. Auth. RB
(Homeownership Mtg. Bd.)
Ser. E 1995, 4.05%, 10/24/96....... 3,500,000
TENNESSEE -- 3.8%
1,000 Blount Cnty. IDB-IDRB
(Advanced Crystal, Inc.)
Ser. 1988, 3.90%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 1,000,000
5,000 City of Morristown IDB-IDRB
(Camvac Intl., Inc.) Ser. 1983,
3.525%-VRDN
(LOC: ABN Amro Bk.)................ 5,000,000
3,700 IDB of Rutherford Cnty. IDRB
Ref. (Outboard Marine Corp.)
Ser. 1987, 3.70%-VRDN
(LOC: First Chicago NBD Corp.)..... 3,700,000
3,200 IDB of the City of Chattanooga
RRB (Radisson Read House)
Ser. 1995, 4.00%-VRDN
(LOC: Heller Finl., Inc.)**........ 3,200,000
3,610 IDB of the Met. Govt. of Nashville
& Davidson Cnty.
IDRB Ref. (Perimeter Two)
3.65%-VRDN
(LOC: Lincoln Natl. Corp.)......... 3,610,000
3,300 IDB of the Met. Govt. of Nashville
& Davidson Cnty.
MHRB (Hickory Terrace Apts.)
Ser. 1995, 3.45%-VRDN
(LOC: Natl. City Bk.).............. 3,300,000
IDB of the Met. Govt. of Nashville
& Davidson Cnty.
RB, 3.95%-VRDN
(LOC: Sumitomo Bk.)
4,680 (Belle Vly.)....................... 4,680,000
6,710 (Graybrook Apts.).................. 6,710,000
8,995 (Beechwood)........................ 8,995,000
PRINCIPAL
AMOUNT
(000) VALUE
TENNESSEE -- CONTINUED
$ 4,285 Smyrna Hsg. Assn. MFHR
(Imperial Gardens Apts.)
3.95%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... $ 4,285,000
44,480,000
TEXAS -- 6.5%
1,250 Austin Texas Util. Sys. RFB
7.75%, 5/15/96 (LIQ: FGIC)......... 1,271,863
1,000 Bexar Cnty. Hsg. Fin. Corp. Gtd.
Mtg. Multifamily RFB Ser. A 1988
(Creightons Mill Dev.),
3.55%-VRDN (Cr. Support: N.E.
Mut. Life Ins. Co.)................ 1,000,000
5,800 City of Austin Higher Ed. Auth. RB
(Saint Edward's Univ.)
Ser. 1995, 3.45%-VRDN
(LOC: NationsBank of Texas)........ 5,800,000
4,250 City of Dallas Indl. Dev. Corp.
IDRB (Crane Plumbing Inc.),
3.65%-VRDN
(LOC: Amer. Natl. Bk.
& Tr. Co. of Chicago).............. 4,250,000
6,000 Eagle Tax-Exmp. Tr. Cl. A COP
(Harris Cnty.) Ser. 1994E,
3.42%-VRDN
(LOC: Citibank, N.A.)**............ 6,000,000
1,200 El Paso, Wtr. and Swr. RB
10.00%, 3/1/96
(Coll: US Govt. Sec.)**............ 1,200,000
6,225 Galveston Hsg. Fin. Corp. MHRB
Ref. (Vlg. by the Sea Apt.)
Ser. 1993, 3.70%-VRDN
(LOC: Sumitomo Bk., Ltd.).......... 6,225,000
1,000 Harris Cnty. Health Fac. Hosp.
(Methodist Hosp.) 3.45%-VRDN
(LIQ: Morgan Guaranty, New York)... 1,000,000
1,000 Harris Cnty. Hsg. Fin. Corp, MHRB
(Arbor II Ltd.)-ARB,
3.95%, 10/1/96
(LOC: Guardian Svgs. & Ln.,
Houston)........................... 1,000,000
5,000 Harris Cnty. Toll Road Unlimited
Tax and Sub Lien RB
Ser. 1994A, 3.42%-VRDN
(LIQ: Citibank, N.A.).............. 5,000,000
</TABLE>
22
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
TEXAS -- CONTINUED
$ 1,000 Hockley Cnty. IDA-PCRB
(Amoco Corp./Std. Oil Corp.)
ARB 3.65%, 3/1/96.................. $ 1,000,000
1,000 Hockley Cnty. IDA-PCRB
(Amoco Corp.)-ARB
3.75%, 5/1/96...................... 1,000,000
2,000 Houston, Wtr. and Swr. Sys.
TECP, 3.30%, 4/11/96
(LOC: Westdeutsche Landesbank)..... 2,000,000
Lone Star TX Apt. Impt. Auth.
RB 3.50%-VRDN
(LOC: Royal Bk of Canada)
1,800 Ser. A............................. 1,800,000
2,800 Ser. B............................. 2,800,000
3,950 NCNB Pooled Tax Empt.-Tr.
COP Sers. 1990B,
4.125%-VRDN
(LOC: NationsBank of Texas)**...... 3,950,000
3,000 North Cent. Health Fac. Dev. Corp.
RB (Methodist Hosp.
of Dallas) Ser. A 1991-TECP,
3.75%, 3/14/96
(SPA: Fuji Bk., Ltd.).............. 3,000,000
4,000 Port of Corpus Christi Auth.
Nueces Cnty. RRB ser. 1989
(Union Pacific Corp.)-TECP,
3.75%, 4/1/96
(Gtd. by Union Pacific Corp.)...... 4,000,000
1,345 Robertson Cnty. IDRB
(Crane Plumbing Inc.) Ser. 1990,
3.65%-VRDN (LOC: Amer
Natl. Bk. & Tr. Co. of Chicago).... 1,345,000
1,000 San Antonio Wtr. RRB,
5.20%, 5/15/96 (FGIC).............. 1,003,431
4,380 Tarrant Cnty. Hsg. Fin. Corp.
MHRB Ref. (Lincoln Meadows)
Ser. 1988-ARB, 4.30%, 12/1/96
(Surety Bond: Contl. Cas. Corp.)... 4,380,000
17,000 Texas Ser. A TRANS,
4.75%, 8/30/96..................... 17,057,573
1,000 Tyler Health Fac. Dev. Corp. RB
(East Texas Med. Ctr. Regl. Hlth.)
TECP, 3.50%, 4/12/96
(LOC: Banque Paribas).............. 1,000,000
77,082,867
PRINCIPAL
AMOUNT
(000) VALUE
UTAH -- 4.5%
$ 3,900 City of Provo Multifamily Rent.
Hsg. RRB (Branbury Park)
Ser. A 1987, 3.60%-VRDN
(LOC: Dai-Ichi Kangyo Bk., Ltd.)... $ 3,900,000
2,200 Intermountain Pwr. Agy. Pwr. Sup.
RB Ser. A,
Prerefunded @102,
7.75%, 7/1/96...................... 2,270,141
2,900 Summit Cnty. IDRB
(Hornes' Kimball Junction L.P.)
Ser. 1985, 3.65%-VRDN
(LOC: West One Tr.)................ 2,900,000
Tooele Cnty. Hazardous Waste
Treatment RB Ser. A-TECP
(Union Pacific Corp.)
(Gtd. by Union Pacific Corp.)
3,990 3.60%, 3/1/96...................... 3,990,000
22,200 3.60%, 4/8/96...................... 22,200,000
12,300 3.60%, 4/29/96..................... 12,300,000
5,000 Utah Cnty. IDRB
(McWane Inc.), 3.60%-VRDN
(LOC: Amsouth Bk., N.A.)........... 5,000,000
52,560,141
VIRGINIA -- .6%
6,200 Amelia Cty. RB (Chambers
Waste Sys. of Virginia, Inc.)
Ser. 1991, 3.60%-VRDN
(LOC: NationsBank)................. 6,200,000
1,000 Rockingham Cnty. Indl. Dev.
PCRB (Merck & Co., Inc. )
Ser. A 1982, 3.40%-VRDN............ 1,000,000
7,200,000
WASHINGTON -- 4.6%
8,450 Pilchuck Dev. Pub. Corp. IDRB
(Crystal Creek Lot #11)
Ser. III, 3.65%-VRDN
(LOC: Mitsubishi Bk., Ltd.)........ 8,450,000
3,000 Port Pasco EDRB
(Douglas Fruit Co.),
3.70%-VRDN
(LOC: US Bk. of Washington)........ 3,000,000
5,725 Washington Cmnty. Econ. Brd.
Revitalization Bond,
3.80%-VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 5,725,000
15,020 Washington GO
Ser. A 1995, 3.42%-VRDN
(LIQ: Citibank, N.A.).............. 15,020,000
</TABLE>
23
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
WASHINGTON -- CONTINUED
$ 5,335 Washington Hsg. Fin. MHRB
(Canyon Lakes II)
Ser. 1994 3.60%-VRDN
(LOC: U.S. Bk. of Washington)...... $ 5,335,000
6,410 Washington Pub. Pwr. Sup. Sys.
Nuclear Proj. No. 2 RB (CR-145)
Ser. 1990, 3.42%-VRDN
(LOC: Citibank, N.A.).............. 6,410,000
8,240 Washington Pub. Pwr. Sup. Sys.
(MSTR 1995 SG-13)
Nuclear Proj. No. 3 RRB
Ser.1993B, 3.40%-VRDN
(LIQ: Societe Generale)**.......... 8,240,000
1,500 Washington GO Ser. 1995C,
5.50%, 7/1/96...................... 1,507,920
53,687,920
WEST VIRGINIA -- .1%
1,000 Marshall Cnty. PCRB
(Allied Signal Co.), 3.40%-VRDN
(Gtd. by Allied Signal, Co.)....... 1,000,000
WISCONSIN -- .3%
3,000 City of Whitewater IDRB
(Maclean-Fogg Co.)
Ser. 1989, 3.70%-VRDN
(LOC: Bk. of Amer. Illinois)....... 3,000,000
1,000 Wisconsin GO Ser.1986B,
7.75%, 8/1/96 Prefunded @101.5..... 1,032,003
4,032,003
WYOMING -- .3%
2,600 Converse Cnty. PCRB Ref.
(Pacific Corp.), 3.55%-VRDN
(SBPA: The Bank of New York)....... 2,600,000
OTHER -- 2.4%
28,100 Puttable Floating Opt. Tax-Empt.
PPT4, 3.45%-VRDN
(LIQ: Cr. Suisse)**................ 28,100,000
TOTAL INVESTMENTS
(COST $1,174,215,929).............. 99.6% 1,174,215,929
OTHER ASSETS AND
LIABILITIES -- NET................. .4 4,966,737
NET ASSETS......................... 100.0% $1,179,182,666
</TABLE>
Summary of Abbreviations:
ARB -- Adjustable Rate Bonds
COP -- Certificates of Participation
EDA -- Economic Development Authority
EDRB -- Economic Development Revenue Bond
FGIC -- Insured by Financial Guaranty Insurance Co.
GO -- General Obligations
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDRB -- Industrial Development Revenue Bond
LIQ -- Liquidity Provider
LOC -- Letter of Credit
MBIA -- Insured by Municipal Bond Investors
Assurance Corp.
MERLOTS -- Municipal Exempt Receipts
Liquidity Option Tenders
MHRB -- Multifamily Housing Revenue Bond
MSTR -- Municipal Securities Trust Receipt
PCRB -- Pollution Control Revenue Bond
RB -- Revenue Bonds
RFB -- Refunding Bonds
RRB -- Refunding Revenue Bonds
SBPA -- Standby Bond Purchase Agreement
TANS -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TRANS -- Tax Revenue Anticipation Notes
VRDN -- Variable Rate Demand Notes
Adjustable Rate Bonds are putable back to the issuer or other parties not
affiliated with the issuer at par quarterly, semi-annually or annually depending
upon the terms of the security. Interest rates are determined and set by the
issuer on such put dates. Interest rates presented for these securities are
those in effect at February 29, 1996. These securities represent 8% of total
investments at February 29, 1996.
Variable Rate Demand Notes are payable on demand on no more than seven calendar
days notice given by the Fund to the issuer or other parties not affiliated with
the issuer. Interest rates are determined and reset by the issuer daily, weekly
or monthly depending upon the terms of the security. Interest rates presented
for these securities are those in effect at February 29, 1996. These securities
represent 79% of total investments at February 29, 1996.
Adjustable rate bonds and variable rate demand notes held in the portfolio may
be considered derivative securities. Management has determined that these
securities comply with the standards imposed by the Securities and Exchange
Commission under Rule 2a-7 which were designed to minimize both credit and
market risk.
** Rule 144A security which is restricted in resale to qualified institutions
and are considered liquid.
See accompanying notes to financial statements.
24
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $1,174,215,929)....................................................... $1,174,215,929
Cash........................................................................................................ 530,730
Dividends and interest receivable........................................................................... 7,861,164
Receivable for Fund shares sold............................................................................. 293,036
Other assets................................................................................................ 93,693
Total assets.......................................................................................... 1,182,994,552
LIABILITIES:
Dividends payable........................................................................................... 1,643,342
Payable for Fund shares repurchased......................................................................... 1,378,937
Accrued expenses............................................................................................ 441,673
Accrued advisory fee........................................................................................ 347,934
Total liabilities..................................................................................... 3,811,886
NET ASSETS..................................................................................................... $1,179,182,666
NET ASSETS CONSISTS OF:
Paid-in capital............................................................................................. $1,179,439,195
Accumulated net realized loss on investment transactions.................................................... (256,529)
Net assets............................................................................................ $1,179,182,666
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($669,382,207 (division sign) 669,501,114 shares of beneficial interest outstanding)......... $ 1.00
Class Y Shares ($509,800,459 (division sign) 509,900,991 shares of beneficial interest outstanding)......... $ 1.00
</TABLE>
See accompanying notes to financial statements.
25
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Photo of an eagle)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest....................................................................................... $20,471,323
EXPENSES:
Advisory fee................................................................................... $2,504,390
Distribution fee -- Class A Shares............................................................. 865,546
Registration and filing fees................................................................... 232,977
Transfer agent fee............................................................................. 89,750
Custodian fee.................................................................................. 82,902
Reports and notices to shareholders............................................................ 19,868
Insurance...................................................................................... 11,552
Professional fees.............................................................................. 11,517
Trustees' fees and expenses.................................................................... 9,199
Miscellaneous.................................................................................. 11,554
3,839,255
Less advisory fee waiver....................................................................... (580,141)
Net expenses................................................................................ 3,259,114
Net investment income............................................................................. 17,212,209
Net realized loss on investments.................................................................. (6,583)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................................. $17,205,626
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
(Photo of an eagle)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 29, YEAR ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................................... $ 17,212,209 $ 16,223,403
Net realized loss on investments........................................................ (6,583) (374,299)
Net increase in net assets resulting from operations................................. 17,205,626 15,849,104
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares.......................................................................... (9,532,236) (2,645,739)
Class Y Shares.......................................................................... (7,679,973) (13,577,664)
Total distributions to shareholders.................................................. (17,212,209) (16,223,403)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold............................................................... 975,036,045 523,419,419
Proceeds from shares issued from acquisition of FFB Tax-Free Money Market Fund.......... 103,129,021 --
Proceeds from shares issued from acquisition of First Union Tax-Free Money Market
Portfolio............................................................................. -- 604,010,226
Proceeds from reinvestment of distributions............................................. 7,529,549 13,277,476
Payments for shares redeemed............................................................ (882,919,196) (566,638,173)
Net increase resulting from Fund share transactions.................................. 202,775,419 574,068,948
CAPITAL CONTRIBUTION (NOTE 4).............................................................. -- 300,000
Net increase in net assets........................................................... 202,768,836 573,994,649
NET ASSETS:
Beginning of period..................................................................... 976,413,830 402,419,181
End of period........................................................................... $1,179,182,666 $976,413,830
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(Photo of an eagle)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
SIX MONTHS JANUARY 5, SIX MONTHS
ENDED 1995* ENDED
FEBRUARY 29, THROUGH FEBRUARY 29,
1996 AUGUST 31, 1996 YEAR ENDED AUGUST 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income...................... .02 .02 .02 .04 .02 .03 .04
Less distributions to shareholders from net
investment income........................ (.02) (.02) (.02) (.04) (.02) (.03) (.04)
Net asset value, end of period............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+.............................. 1.7% 2.2% 1.8% 3.6% 2.5% 2.6% 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)................................. $669,382 $554,924 $509,800 $421,490 $402,419 $401,376 $416,924
Ratios to average net assets:
Expenses**............................... .78%++ .78%++ .48%++ .50% .34% .34% .32%
Net investment income**.................. 3.31%++ 3.28%++ 3.61%++ 3.53% 2.47% 2.58% 3.72%
</TABLE>
<TABLE>
<CAPTION>
1991
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period....... $1.00
Income from investment operations:
Net investment income...................... .05
Less distributions to shareholders from net
investment income........................ (.05)
Net asset value, end of period............. $1.00
TOTAL RETURN+.............................. 5.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)................................. $510,160
Ratios to average net assets:
Expenses**............................... .28%
Net investment income**.................. 5.23%
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursement. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
SIX MONTHS JANUARY 5, SIX MONTHS
ENDED 1995* ENDED
FEBRUARY 29, THROUGH FEBRUARY 29,
1996 AUGUST 31, 1996 YEAR ENDED AUGUST 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses........................ .90%++ .90%++ .60%++ .63% .64% .63% .63% .66%
Net investment income........... 3.19%++ 3.16%++ 3.49%++ 3.40% 2.17% 2.29% 3.41% 4.85%
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of coins)
A REPORT FROM YOUR
PORTFOLIO MANAGER
KELLIE ALLEN
Expectations for economic growth and interest rates underwent (Photo of
a significant shift during the past six months. This created Kellie Allen)
considerable turbulence in the fixed income markets during the
first quarter of 1996, and also drove rates on short-term
investments higher.
During the fourth quarter of 1995, interest rates continued to decline as
investors and the Federal Reserve saw weakness in the economy and indications
that inflation continued to be subdued. In December, the Federal Reserve
reduced the Fed Funds rate from 5.75% to 5.5% in an effort to bolster the
apparently weak economy. At year-end, the yield on two-year treasury notes
stood at 5.15%, 35 basis points below the Fed Funds rate. This reflected
investor expectations that the Fed would ease further based continued signs of
low inflation, economic weakness, and expectations for a balanced budget.
After falling briefly in January, interest rates reversed course and rose
sharply during the quarter. Investors were surprised to see signs of an economy
on the mend after several months of anemic growth. Federal Reserve Chairman,
Alan Greenspan, confirmed bond investors' concerns in his semi-annual economic
outlook in February, indicating the country was "on track for sustained growth".
The recent rise in yields, in all probability, discounted the improvement in the
economy. The Fed will likely be on hold over the short-term to demonstrate their
resolve to fight potential inflationary pressures. Our analysis indicates that
the strengthening in the economy will prove to be temporary, resulting in an
environment where interest rates stay relatively unchanged until the secular
theme of slow-growth and low inflation becomes more apparent in the early
summer.
Within the Fund, we are maintaining a maturity at the longer end of our
normal range in an attempt to lock in higher, more attractive rates. Thus far,
we have accomplished this by investing in U.S. Treasury notes, bonds and bills.
In addition, the Fund invests in overnight repurchase agreements which are fully
collateralized by treasury obligations. This combination helps to give the Fund
a competitive yield advantage, and locks in longer maturities on a portion of
the Fund should rates continue to decline.
AN INVESTMENT IN THE 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.
YIELDS FLUCTUATE.
29
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of coins)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
U.S. TREASURY BILLS -- 6.7%
$ 20,170 4.96% to 5.20%, 4/11/96............ $ 20,050,355
42,543 4.92% to 5.08%, 4/18/96............ 42,255,348
30,817 5.16% to 5.24%, 4/25/96............ 30,569,432
31,233 4.97% to 5.26%, 5/2/96............. 30,955,639
56,325 5.02% to 5.03%, 5/9/96............. 55,781,210
21,600 4.92% to 5.21%, 5/16/96............ 21,374,246
1,500 5.03%, 5/23/96..................... 1,482,604
1,129 4.94%, 6/13/96..................... 1,116,195
TOTAL U.S.TREASURY BILLS
(COST $203,585,029)................ 203,585,029
U.S. TREASURY NOTES -- 32.0%
25,000 7.75%, 3/31/96..................... 25,042,159
170,000 9.375%, 4/15/96.................... 170,793,703
70,000 5.50%, 4/30/96..................... 70,000,579
25,000 7.375%, 5/15/96.................... 170,574,438
120,000 5.875%, 5/31/96.................... 120,059,389
85,000 7.875%, 7/15/96.................... 25,252,195
20,000 6.50%, 9/30/96..................... 20,075,968
30,000 8.00%, 10/15/96.................... 30,406,620
150,000 6.875%, 10/31/96................... 151,691,410
125,000 7.50%, 1/31/97..................... 127,764,571
65,000 6.875%, 2/28/97.................... 66,100,500
TOTAL U.S. TREASURY NOTES
(COST $977,761,532)................ 977,761,532
*REPURCHASE AGREEMENTS -- 60.5%
90,000 Barclays Bank PLC, 5.35%, dated
2/29/96, due 3/1/96 (1)............ 90,000,000
200,000 Daiwa Securities Co., Ltd., 5.44%,
dated 2/29/96, due 3/1/96 (2)...... 200,000,000
100,000 Dean Witter Reynolds, Inc., 5.40%,
dated 2/26/96, due 3/4/96 (3)...... 100,000,000
120,000 Donaldson, Lufkin & Jenrette
Securities Corp., 5.375%, dated
2/29/96, due 3/1/96 (4)............ 120,000,000
141,834 Dresdner Bank AG, 5.375%, dated
2/29/96, due 3/1/96 (5)............ 141,834,000
PRINCIPAL
AMOUNT
(000) VALUE
$ 50,000 Dresdner Bank AG, 5.375%, dated
2/27/96, due 3/4/96 (6)............ $ 50,000,000
100,000 Goldman, Sachs Group L.P., 5.70%,
dated 2/29/96, due 3/1/96 (7)...... 100,000,000
100,000 HSBC Securities, Inc., 5.35%, dated
2/29/96, due 3/1/96 (8)............ 100,000,000
150,000 Merrill Lynch, Pierce, Fenner &
Smith, 5.375%, dated 3/1/96, due
3/1/96 (9)......................... 150,000,000
200,000 Morgan Guaranty Trust Co. of New
York, 5.43%, dated 2/29/96, due
3/1/96 (10)........................ 200,000,000
200,000 Morgan Stanley Co., 5.42%, dated
2/29/96, due 3/1/96(11)............ 200,000,000
100,000 NationsBank, 5.43%, dated 2/29/96,
due 3/1/96 (12).................... 100,000,000
200,000 Nikko Securities Co. International,
Inc., 5.43%, dated 2/26/96, due
3/4/96 (13)........................ 200,000,000
100,000 State Street Bank & Trust Co.,
5.35%, dated 2/29/96, due 3/1/96
(14)............................... 100,000,000
TOTAL REPURCHASE AGREEMENTS
(COST $1,851,834,000).............. 1,851,834,000
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
<C> <S> <C> <C>
MUTUAL FUND SHARES -- .5%
16,634 Fidelity U.S. Treasury, Inc.
Portfolio
(COST $16,633,541)................. 16,633,541
TOTAL INVESTMENTS
(COST $3,049,814,102)....... 99.7% 3,049,814,102
OTHER ASSETS AND
LIABILITIES -- NET.......... .3 8,230,108
NET ASSETS.................. 100.0% $3,058,044,210
</TABLE>
See accompanying notes to financial statements.
* Collateralized by:
(1) $47,790,000 U.S. Treasury Bonds, 8.75% to 11.25%, 2/15/15 to 8/15/17; value
including accrued interest -- $66,642,558 and $24,855,000 U.S. Treasury
Notes, 7.25%, 11/30/96; value including accrued interest -- $26,142,315.
(2) $205,405,000 U.S. Treasury Bills, 4/18/96; value -- $204,000,030.
(3) $292,063,500 U.S. Treasury Strips, 5/15/96 to 2/15/23; value --
$102,000,164.
(4) $67,502,000 U.S. Treasury Notes, 8.00% to 8.50%, 10/15/96 to 7/15/97; value
including accrued interest -- $72,408,352 and $47,896,000 U.S. Treasury
Bonds, 7.25%, 8/15/22; value including accrued interest -- $48,887,334.
(5) $141,239,000 U.S. Treasury Notes, 4.25% to 9.375%, 4/15/96 to 2/15/06;
value including accrued interest -- $144,016,502.
(6) $48,545,000 U.S. Treasury Notes, 6.75%, 6/30/99; value including accrued
interest -- $51,588,395.
(7) $94,822,000 U.S. Treasury Notes, 5.875% to 7.50%, 4/30/97 to 11/15/01;
value including accrued interest -- $102,000,433.
(8) $100,935,000 U.S. Treasury Notes, 5.125% to 8.875%, 7/31/97 to 2/15/99;
value including accrued interest -- $103,213,673.
(9) $127,951,000 U.S. Treasury Bonds, 7.875% to 8.75%, 8/15/20 to 2/15/21;
value including accrued interest -- $153,000,631.
(10) $208,943,000 U.S. Treasury Bills, 5/2/96 to 12/12/96, value --
$204,002,816.
(11) $80,805,000 U.S. Treasury Bonds, 7.875%, 2/15/21; value including accrued
interest -- $205,557,559.
(12) $102,800,000 U.S. Treasury Bills, 4/18/96; value including accrued
interest -- $102,095,820.
(13) $194,100,000 U.S. Treasury Notes, 4.75% to 8.50%, 5/1/97 to 5/1/00; value
including accrued interest -- $200,497,162.
(14) $80,805,000 U.S. Treasury Notes, 8.75%, 5/15/97; value including accrued
interest -- $104,082,994.
30
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Photo of coins)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in repurchase agreements........................................................................ $1,851,834,000
Investments in securities................................................................................... 1,197,980,102
Investments at value (identified cost $3,049,814,102).................................................... 3,049,814,102
Cash........................................................................................................ 5,450,383
Interest receivable......................................................................................... 14,518,094
Prepaid expenses............................................................................................ 47,228
Total assets.......................................................................................... 3,069,829,807
LIABILITIES:
Dividends payable........................................................................................... 9,210,202
Accrued expenses............................................................................................ 1,961,765
Accrued advisory fee........................................................................................ 580,743
Payable for Fund shares repurchased......................................................................... 32,887
Total liabilities..................................................................................... 11,785,597
NET ASSETS..................................................................................................... $3,058,044,210
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................. $3,057,991,406
Accumulated net realized gain on investment transactions.................................................... 52,804
Net assets............................................................................................ $3,058,044,210
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($2,681,601,405 (division sign) 2,681,567,200 shares of beneficial interest
outstanding)............................................................................................. $ 1.00
Class Y Shares ($376,442,805 (division sign) 376,440,757 shares of beneficial interest outstanding)......... $ 1.00
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Photo of coins)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest...................................................................................... $52,840,421
EXPENSES:
Advisory fee.................................................................................. $ 3,261,622
Administrative personnel and services fees.................................................... 475,758
Distribution fee -- Class A Shares............................................................ 2,310,524
Registration and filing fees.................................................................. 534,077
Custodian fee................................................................................. 190,431
Reports and notices to shareholders........................................................... 33,340
Professional fees............................................................................. 31,899
Transfer agent fee............................................................................ 27,092
Trustees' fees and expenses................................................................... 25,440
Insurance..................................................................................... 2,523
Miscellaneous................................................................................. 12,068
6,904,774
Less advisory fee waiver...................................................................... (1,098,626)
Net expenses............................................................................... 5,806,148
Net investment income............................................................................ 47,034,273
Net realized gain on investments................................................................. 164,838
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................. $47,199,111
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
(Photo of coins)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................................................... $ 47,034,273 $ 43,113,269
Net realized gain (loss) on investments............................................. 164,838 (7,403)
Net increase in net assets resulting from operations............................. 47,199,111 43,105,866
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME:
Class A Shares...................................................................... (38,531,004) (33,495,553)
Class Y Shares...................................................................... (8,503,269) (9,617,716)
Total distributions to shareholders from net investment income................... (47,034,273) (43,113,269)
IN EXCESS OF NET INVESTMENT INCOME:
Class A Shares...................................................................... -- (67,232)
Class Y Shares...................................................................... -- (15,822)
Total distributions to shareholders in excess of net
investment income............................................................. -- (83,054)
Total distributions to shareholders........................................... (47,034,273) (43,196,323)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold........................................................... 2,273,580,540 2,358,670,175
Proceeds from shares issued from acquisition
of FFB U.S. Treasury Fund........................................................ 1,070,672,333 --
Proceeds from shares issued from acquisition
of FFB U.S. Government Fund...................................................... 327,532,054 --
Proceeds from shares issued from acquisition
of FFB 100% Treasury Fund........................................................ 28,227,573 --
Proceeds from reinvestment of distributions......................................... 6,269,464 5,178,570
Payments for shares redeemed........................................................ (2,103,663,451) (1,826,468,286)
Net increase resulting from Fund share transactions.............................. 1,602,618,513 537,380,459
Net increase in net assets....................................................... 1,602,783,351 537,290,002
NET ASSETS:
Beginning of period................................................................. 1,455,260,859 917,970,857
End of period....................................................................... $ 3,058,044,210 $ 1,455,260,859
</TABLE>
See accompanying notes to financial statements.
33
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(Photo of coins)
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS EIGHT
ENDED MONTHS
FEBRUARY 29, ENDED YEAR ENDED
1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 1992
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income...................................... .03 .03 .04 .03 .03
Less distributions to shareholders from net investment
income................................................... (.03) (.03) (.04) (.03) (.03)
Net asset value, end of period............................. $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+.............................................. 2.5% 3.6% 3.8% 2.7% 3.4%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions).................... $2,682 $1,178 $755 $261 $209
Ratios to average net assets:
Expenses**............................................... .67%++ .63%++ .50% .48% .48%
Net investment income**.................................. 5.00%++ 5.30%++ 3.91% 2.70% 3.22%
</TABLE>
<TABLE>
<CAPTION>
MARCH 6,
1991*
THROUGH
DECEMBER 31,
1991
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $1.00
Income from investment operations:
Net investment income...................................... .04
Less distributions to shareholders from net investment
income................................................... (.04)
Net asset value, end of period............................. $1.00
TOTAL RETURN+.............................................. 4.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions).................... $100
Ratios to average net assets:
Expenses**............................................... .47%++
Net investment income**.................................. 4.95%++
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS EIGHT MARCH 6,
ENDED MONTHS 1991*
FEBRUARY 29, ENDED YEAR ENDED THROUGH
1996 AUGUST 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Expenses...................................... .79%++ .79%++ .78% .82% .82% 1.08%++
Net investment income......................... 4.88%++ 5.14%++ 3.63% 2.36% 2.88% 4.34%++
</TABLE>
See accompanying notes to financial statements.
34
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(Photo of coins)
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS EIGHT
ENDED MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31, YEAR ENDED DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 1992
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income...................................... .03 .04 .04 .03 .04
Less distributions to shareholders from net investment
income................................................... (.03) (.04) (.04) (.03) (.04)
Net asset value, end of period............................. $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+.............................................. 2.7% 3.8% 4.1% 3.0% 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions).................... $376 $277 $163 $366 $286
Ratios to average net assets:
Expenses**............................................... .37%++ .33%++ .20% .18% .17%
Net investment income**.................................. 5.30%++ 5.60%++ 3.78% 3.00% 3.61%
</TABLE>
<TABLE>
<CAPTION>
MARCH 6,
1991*
THROUGH
DECEMBER 31,
1991
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $1.00
Income from investment operations:
Net investment income...................................... .05
Less distributions to shareholders from net investment
income................................................... (.05)
Net asset value, end of period............................. $1.00
TOTAL RETURN+.............................................. 4.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions).................... $265
Ratios to average net assets:
Expenses**............................................... .20%++
Net investment income**.................................. 5.53%++
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS EIGHT MARCH 6,
ENDED MONTHS 1991*
FEBRUARY 29, ENDED THROUGH
1996 AUGUST 31, YEAR ENDED DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Expenses............................................... .49%++ .49%++ .48% .52% .52% .52%++
Net investment income................................... 5.18%++ 5.44%++ 3.50% 2.66% 3.26% 5.21%++
</TABLE>
See accompanying notes to financial statements.
35
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND NATURE OF OPERATIONS
The Evergreen Money Market Funds (the "Funds") are separate series of
open-end management companies registered under the Investment Company Act of
1940, as amended (the "Act"). The Evergreen Money Market Funds consist of
Evergreen Money Market Fund ("Money Market"), Evergreen Tax-Exempt Money Market
Fund ("Tax-Exempt") and Evergreen Treasury Money Market Fund ("Treasury"), known
collectively as the Funds. Money Market is the sole series of the Evergreen
Money Market Trust, Tax-Exempt is a series of the Evergreen Municipal Trust and
Treasury is a series of the Evergreen Investment Trust.
The investment objective of Money Market is to achieve as high a level of
current income as is consistent with preserving capital and providing liquidity.
The investment objective of Tax-Exempt is to achieve as high a level of current
income exempt from Federal income tax, as is consistent with preserving capital
and providing liquidity. Treasury's investment objective is to maintain
stability of principal while earning current income.
NOTE 2 -- ACQUISITION INFORMATION
Effective January 1, 1996, First Union Corporation, the corporate parent of
First Union National Bank of North Carolina ("First Union") consummated a merger
with First Fidelity Bancorporation through a non-taxable exchange. On January
19, 1996, the Funds noted below acquired substantially all of the net assets of
the following management investment companies previously advised by a subsidiary
of First Fidelity Bancorporation through a non-taxable exchange. The net assets
acquired and class of shares exchanged are as follows:
<TABLE>
<CAPTION>
CLASS OF SHARES NET ASSETS
ACQUIRED FUND ACQUIRING FUND EXCHANGED ACQUIRED
<S> <C> <C> <C>
FFB Cash Management Fund Money Market Class A $ 592,358,355
FFB Lexicon Cash Management Fund Money Market Class Y 95,834,929
FFB Tax-Free Money Market Fund Tax-Exempt Class A 103,129,021
FFB U.S. Treasury Fund Treasury Class A 1,070,672,333
FFB U.S. Government Fund Treasury Class A 327,532,054
FFB 100% U.S. Treasury Fund Treasury Class A 28,227,573
</TABLE>
The aggregate net assets of Money Market, Tax-Exempt and Treasury
immediately after the acquisitions were $1,865,328,722, $1,141,961,188 and
$3,053,739,559, respectively.
Effective July 7, 1995, Money Market acquired substantially all of First
Union Money Market Portfolio's net assets, valued at $1.00 per share through a
non-taxable exchange for 642,283,253 shares of Money Market. The aggregate net
assets of Money Market immediately after the acquisition were $884,502,198.
In addition, effective July 7, 1995, Tax-Exempt acquired substantially all
of First Union Tax-Free Money Market Portfolio's net assets, valued at $1.00 per
share through a non-taxable exchange for 604,175,076 shares of Tax-Exempt. The
aggregate net assets of Tax-Exempt immediately after the acquisition were
$952,382,736.
NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. These policies are
in conformity with generally accepted accounting principles.
SECURITY VALUATIONS -- Portfolio securities are valued at amortized cost
which approximates market value. The amortized cost method involves valuing a
security at cost on the date of purchase and thereafter assuming a straight-line
amortization of any discount or premium to maturity.
36
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
SECURITY TRANSACTIONS -- Security transactions are accounted for on the
date purchased or sold. Net realized gains or losses are determined on the
identified cost basis.
INVESTMENT INCOME AND EXPENSES -- Interest income and expenses are accrued
daily. Premiums and discounts paid on securities are amortized or accreted into
interest income.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the Federal Reserve Bank and are designated as being held
on each Fund's behalf by its custodian under a book-entry system. Each Fund
monitors the adequacy of the collateral on a daily basis, and can require the
seller to provide additional collateral in the event the market value of the
securities pledged falls below the carrying value of the repurchase agreement,
including accrued interest. Each Fund will only enter into repurchase agreements
with banks and other financial institutions which are deemed by the investment
adviser to be creditworthy pursuant to guidelines established by each Funds'
Trustees.
WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds record
when-issued or delayed delivery transactions on the trade date and maintain
security positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis begin earning interest on the settlement date.
DIVIDENDS TO SHAREHOLDERS -- Dividends from net investment income are
declared daily and paid monthly. Dividends from net realized capital gains on
investments, if any, will be distributed at least annually. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from the amounts available for distribution under
generally accepted accounting principles. To the extent these differences are
permanent in nature, such amounts are reclassified within the components of net
assets.
INCOME TAXES -- It is each Fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable and other net income to its
shareholders. Accordingly, no provisions for Federal income or excise taxes are
necessary. To the extent that realized capital gains can be offset by capital
loss carryforwards, it is each Fund's policy not to distribute such gains.
At August 31, 1995 each fund's most recent fiscal year end, the Funds had
capital loss carryforwards in the following amounts:
<TABLE>
<CAPTION>
EXPIRATION
2001 2002 2003
<S> <C> <C> <C>
Money Market..................... -- $ 2,036 $522,676
Tax-Exempt....................... $175,647 -- 15,847
Treasury......................... -- 83,054 21,577
</TABLE>
Capital losses incurred after October 31 within the Fund's fiscal year are
deemed to arise on the first business day of the following fiscal year for tax
purposes. Tax-Exempt and Treasury have incurred and will elect to defer $58,452
and $7,403, respectively of such capital losses.
ALLOCATION OF EXPENSES -- Expenses specifically identifiable to a class of
shares are charged to that class. Expenses common to a Trust as a whole are
allocated to the funds in that Trust. Net investment income (other than class
specific expenses) and realized and unrealized gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
of each class.
USE OF ESTIMATES -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
37
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENTS -- First Union is entitled to an annual fee
of .35 of 1% of Treasury's average daily net assets pursuant to the fund's
investment advisory agreement. For the six-month period ended February 29, 1996,
First Union voluntarily waived $1,098,626 of its advisory fee. First Union can
modify or terminate this voluntary waiver at any time.
Pursuant to an agreement with Money Market's and Tax-Exempt's investment
adviser, Evergreen Asset Management Corp. (Evergreen Asset), a wholly owned
subsidiary of First Union, Evergreen Asset is entitled to an annual fee based on
Money Market's and Tax-Exempt's average daily net assets, for the six months
ended February 29, 1996, in accordance with the following schedule:
<TABLE>
<CAPTION>
ADVISORY FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.50% on the first $1 billion
0.45% in excess of $1 billion
</TABLE>
Evergreen Asset has agreed to reimburse Money Market and Tax-Exempt to the
extent that either Fund's operating expenses (including the investment advisory
fee but excluding interest, taxes, brokerage commissions, 12b-1 distribution and
shareholder services fees and extraordinary expense) exceeds 1.00% of its
average daily net assets for any fiscal year. For the six months ended February
29, 1996, the expenses of Money Market and Tax-Exempt did not exceed this limit.
For the six months ended February 29, 1996, Evergreen Asset voluntarily waived
$1,133,446 and $580,141 of its advisory fee for Money Market and Tax-Exempt,
respectively. Evergreen Asset can modify or terminate these voluntary waivers at
any time.
Lieber & Company, an affiliate of First Union is the investment sub-adviser
to Money Market and Tax-Exempt. Lieber & Company is reimbursed by Evergreen
Asset at no additional expense to the Funds.
During the year ended August 31, 1995, Tax-Exempt entered into stand-by
purchase agreements ("agreements") with First Union with regards to securities
issued by Orange County, California. The agreements enabled the securities to be
valued at par, which was $300,000 in excess of the securities fair market value
on the date of the issuance. The increase in the value is deemed to be a
voluntary contribution of capital to offset the loss in value. The agreements
were exercised during the year and accordingly, the securities were sold to
First Union at par.
ADMINISTRATION AGREEMENT -- Evergreen Asset furnishes Money Market and
Tax-Exempt with administrative services as part of their advisory agreements and
accordingly, these Funds do not pay a separate administration fee. Furman Selz
LLC ("Furman Selz") is each of Fund's sub-administrator. As sub-administrator,
Furman Selz provides the officers of the funds. For Money Market and Tax-Exempt,
Furman Selz' fee is paid by Evergreen Asset and is not a fund expense. Evergreen
Asset is also Treasury's Administrator and Furman Selz is the sub-administrator.
Evergreen Asset's and Furman Selz' fees for Treasury are based on the average
daily net assets of all the funds administered by Evergreen Asset for which
First Union or Evergreen Asset is also investment adviser. These are calculated
at the following annual rates:
<TABLE>
<CAPTION>
ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.050% on the first $7 billion
0.035% on the next $3 billion
0.030% on the next $5 billion
0.020% on the next $10 billion
0.015% on the next $5 billion
0.010% in excess of $30 billion
SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
0.0100% on the first $7 billion
0.0075% on the next $3 billion
0.0050% on the next $15 billion
0.0040% in excess of $25 billion
</TABLE>
38
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
At February 29, 1996, assets for which Evergreen Asset was the
administrator for which either Evergreen Asset or First Union was investment
adviser totaled approximately $14.4 billion.
PLANS OF DISTRIBUTION -- The Funds have adopted for their Class A Shares
and Class B Shares (Money Market only) Distribution Plans (the "Plans") pursuant
to Rule 12b-1 under the Act. (See Note 5) Under the terms of the Plans, the
Funds may incur distribution-related and shareholder servicing expenses which
may not exceed .75 of 1% for Class A shares for Money Market and Tax-Exempt and
.35 of 1% for Class A shares for Treasury. The payments for Class A for each of
the Funds were voluntarily limited to .30 of 1% of average daily net assets.
Money Market may incur distribution-related and shareholder servicing expenses,
which may not exceed an annual fee of 1% for its Class B Shares. Such fees are
accrued daily and paid monthly.
In connection with their Plans, the Funds have entered into distribution
agreements with Evergreen Funds Distributor, Inc. ("EFD"), a subsidiary of
Furman Selz whereby each Fund will compensate EFD for its services at a rate
which may not exceed .30 of 1% of its Class A average daily net assets and 1% of
its Class B average daily net assets (Money Market only). A portion of Money
Market's Class B Plan, up to .25 of 1% of average daily net assets may
constitute a shareholder service fee. EFD has entered into a Shareholder
Services Agreement with First Union Brokerage Services ("FUBS"), an affiliate of
First Union, whereby EFD will compensate FUBS for certain services provided to
shareholders and/or maintenance of shareholder accounts relating to Money
Market's Class B shares.
NOTE 5 -- SHARES OF BENEFICIAL INTEREST
Money Market and Tax-Exempt have an unlimited number of $0.0001 par value
shares of beneficial interest authorized. Treasury has an unlimited number of
$.001 par value shares of beneficial interest authorized. The shares are divided
into classes which are designated Class Y, Class A and Class B Shares (Money
Market only). Class Y shares are available only to investment advisory clients
of First Union and its affiliates, certain institutional investors or Class Y
shareholders of record of certain other funds managed by the First Union and its
affiliates as of December 30, 1994. The classes have identical voting, dividend,
liquidation and other rights, except that Class A and Class B shares bear
distribution expenses (see Note 4) and have exclusive voting rights with respect
to their distribution plans.
39
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
Transactions in shares of beneficial interest (valued at $1.00 per share)
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 29, YEAR ENDED
1996 AUGUST 31,
MONEY MARKET (UNAUDITED) 1995*
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 1,263,316,721 263,807,185
Shares issued from acquisition of FFB Cash Management Fund................................... 592,362,245 --
Shares issued from acquisition of First Union Money Market Portfolio......................... -- 577,090,623
Shares issued from reinvestment of distributions............................................. 4,604,551 1,073,970
Shares redeemed.............................................................................. (877,451,570) (156,830,783)
Net increase................................................................................. 982,831,947 685,140,995
CLASS B
Shares sold.................................................................................. 2,643,416 1,222,632
Shares issued from acquisition of First Union Money Market Portfolio......................... -- 8,848,122
Shares issued from reinvestment of distributions............................................. 135,037 41,082
Shares redeemed.............................................................................. (2,799,783) (2,185,089)
Net increase (decrease)...................................................................... (21,330) 7,926,747
CLASS Y
Shares sold.................................................................................. 860,872,307 1,484,885,160
Shares issued from acquisition of FFB Lexicon Cash Management Fund........................... 95,834,876 --
Shares issued from acquisition of First Union Money Market Portfolio......................... -- 56,344,508
Shares issued from reinvestment of distributions............................................. 6,425,373 13,226,417
Shares redeemed.............................................................................. (770,601,956) (1,544,913,353)
Net increase................................................................................. 192,530,600 9,542,732
Total net increase resulting from Fund share transactions.................................... 1,175,341,217 702,610,474
</TABLE>
* The Fund share activity for Class A reflects the period from January 4, 1995
(commencement of class operations) through August 31, 1995. The Fund share
activity for Class B reflects the period from January 26, 1995 (commencement
of class operations) through August 31, 1995.
40
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 29, YEAR ENDED
1996 AUGUST 31,
TAX-EXEMPT (UNAUDITED) 1995*
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 613,354,245 126,822,267
Shares issued from acquisition of FFB Tax-Free Money Market Fund............................. 103,102,728 --
Shares issued from acquisition of First Union Tax-Free Money Market Portfolio................ -- 529,834,393
Shares issued from reinvestment of distributions............................................. 1,584,081 499,871
Shares redeemed.............................................................................. (603,605,089) (102,091,382)
Net increase................................................................................. 114,435,965 555,065,149
CLASS Y
Shares sold.................................................................................. 361,681,800 396,597,152
Shares issued from acquisition of First Union Tax-Free Money Market Portfolio................ -- 74,340,683
Shares issued from reinvestment of distributions............................................. 5,945,468 12,777,605
Shares redeemed.............................................................................. (279,314,107) (464,546,791)
Net increase................................................................................. 88,313,161 19,168,649
Total net increase resulting from Fund share transactions.................................... 202,749,126 574,233,798
</TABLE>
* The Fund share activity for Class A reflects the period from January 5, 1995
(commencement of class operations) through August 31, 1995.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
TREASURY (UNAUDITED) 1995
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 1,712,364,282 1,854,109,537
Shares issued from acquisition of FFB U.S. Treasury Fund..................................... 1,070,688,429 --
Shares issued from acquisition of FFB U.S. Government Fund................................... 327,554,031 --
Shares issued from acquisition of FFB 100% U.S. Treasury Fund................................ 28,227,628 --
Shares issued from reinvestment of distributions............................................. 6,114,776 5,178,018
Shares redeemed.............................................................................. (1,641,334,969) (1,436,384,809)
Net increase................................................................................. 1,503,614,177 422,902,746
CLASS Y
Shares sold.................................................................................. 561,216,258 504,560,638
Shares issued from reinvestment of distributions............................................. 154,688 552
Shares redeemed.............................................................................. (462,328,482) (390,083,477)
Net increase................................................................................. 99,042,464 114,477,713
Total net increase resulting from Fund share transactions.................................... 1,602,656,641 537,380,459
</TABLE>
41
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 6 -- CONCENTRATION OF CREDIT RISK
Each Fund maintains a diversified portfolio of money market instruments
which are deemed, under Rule 2a-7 of the Act to have a maturity of 397 days or
less and whose ratings are determined to be of eligible quality under Securities
and Exchange Commission rules. The ability of the issuers of the securities held
by the Funds to meet their obligations may be affected by economic developments
in a specific industry, state, region or country. Certain instruments may be
entitled to the benefit of standby letters of credit or other guarantees of
banks or other financial institutions.
42
<PAGE>
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43
<PAGE>
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44
<PAGE>
TRUSTEES AND OFFICERS
TRUSTEES:
Laurence B. Ashkin*
Foster Bam*
James S. Howell, Chairman
Robert J. Jeffries*
Gerald M. McDonnell
Thomas L. McVerry
William W. Pettit
Russell A. Salton, III M.D.
Michael S. Scofield
OFFICERS:
John J. Pileggi
President and Treasurer
Joan V. Fiore
Secretary
Sheryl Hirschfeld
Assistant Secretary
Donald E. Brostrom
Assistant Treasurer
Stephen W. St. Clair
Assistant Treasurer
* Not a Trustee for Evergreen Treasury Money Market Fund.
<PAGE>
NOT May lose value
FDIC No bank guarantee
INSURED
42608 Evergreen Funds Distributor, Inc. 538357
4/96
