<PAGE>
EVERGREEN
MONEY MARKET FUNDS
(Photo of currency)
(Photo of coins)
(Photo of building)
(Photo of eagle)
SEMIANNUAL
REPORT
FEBRUARY 28, 1997
Evergreen Keystone
[logo] FUNDS(sm) [logo]
<PAGE>
EVERGREEN MONEY MARKET FUNDS
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
(Photo of currency) Economic Overview......................................................... 1
MONEY MARKET A Report From Your Portfolio Manager...................................... 2
FUND Statement of Investments.................................................. 3
Statement of Assets and Liabilities....................................... 8
Statement of Operations................................................... 9
Statement of Changes in Net Assets........................................ 10
Financial Highlights...................................................... 11
(Photo of building) PENNSYLVANIA A Report From Your Portfolio Manager...................................... 13
TAX-FREE MONEY Statement of Investments.................................................. 14
MARKET FUND Statement of Assets and Liabilities....................................... 18
Statement of Operations................................................... 19
Statement of Changes in Net Assets........................................ 20
Financial Highlights...................................................... 21
(Photo of coins) TAX EXEMPT A Report From Your Portfolio Manager...................................... 22
MONEY MARKET FUND Statement of Investments.................................................. 23
Statement of Assets and Liabilities....................................... 34
Statement of Operations................................................... 35
Statement of Changes in Net Assets........................................ 36
Financial Highlights...................................................... 37
(Photo of eagle) TREASURY A Report From Your Portfolio Manager...................................... 38
MONEY MARKET FUND Statement of Investments.................................................. 39
Statement of Assets and Liabilities....................................... 41
Statement of Operations................................................... 42
Statement of Changes in Net Assets........................................ 43
Financial Highlights...................................................... 44
Combined Notes to Financial Statements.................................... 46
Trustees and Officers...................................... Inside Back Cover
</TABLE>
<PAGE>
EVERGREEN MONEY MARKET FUNDS
ECONOMIC OVERVIEW
BY STEPHEN A. LIEBER, CHAIRMAN
EVERGREEN ASSET MANAGEMENT CORP.
The strong momentum of the United States economy
at the end of 1996 was well sustained through the [photo]
first quarter of 1997. Industrial production rose in
each month of the first quarter, 0.10% in January,
0.60% in February, and 0.90% in March. Industrial
capacity utilization reflected the dynamic economy,
rising to 84.1%, the highest level since March 1995.
Despite the sustained growth in the U.S. economy, the
rate of inflation continues to be moderate. The Consumer
Price Index increase was 1.8% on an annual rate basis
during the first quarter, well below the moderate 3.3%
rise during 1996. These recent economic figures combine
to offset the fearful expectations of many economists and
participants in the fixed income markets that the economy
might not be capable of significant overall growth without
inciting inflation. Most observers, however, are very
reluctant to assume that the major driving force of inflation,
rising wages, is unlikely to appear. They point to record low
inventory-to-sales ratios, low level of inventories on the
retailing and wholesaling level, and the rising operating
rate of industrial production. While arguing over whether the
recent 6% growth in consumer spending is sustainable, and
whether consumer credit card debt is over-extended, there are
few who would project any near-term significant decline in
overall domestic demand.
The many aspects of domestic economic growth have led to an intense watch on
the trends of wage levels. The rise in average hours worked, some gradual creep
in compensation, and the sustained jobless level at just over 5%, have led many
key observers to conclude that any further acceleration in the economy's
momentum will lead to some breakout in wage compensation, especially in areas of
labor shortage. The Federal Reserve has clearly concluded that this risk
justifies the slowing effort of the recent 0.25% increase in the discount rate.
The majority of observers expect that the economic figures published through
April will probably lead to another 0.25% rise in May. There is widespread
discussion about whether there will be more increases of 0.25%, or even a rise
of 0.50% over the next few months. In initiating the recent discount rate
increase, Federal Reserve Chairman, Alan Greenspan, described the move as "pre-
emptive". Consequently, most observers conclude that the Federal Reserve policy
is going to be one of pre-emptive moves when inflationary signs appear in the
economy. Higher short-term interest rates will be the Fed's first line of
defense. The real return in long-term fixed income investments today is in the
area of 5%. This is strikingly higher than the "normal" real return of 3% to 4%,
and well above the 3.6% yield of the new ten-year U.S. Treasury Inflation
Indexed Bonds, which are an appropriate proxy for the real return. This
extremely high rate of real return suggests either that the long-term interest
rate structure in the United States is forecasting a much higher rate of
inflation than presently seen, or is at a level which discounts expectations of
a higher rate of inflation. Many bond market observers believe that the
discounting has been done and, therefore, has provided the better than 7% yields
now available in long-term United States Treasuries.
The fixed income markets currently provide a combination of short-term
uncertainty, and increased long-term confidence. Over the short-term, the data
on economic strength and trends are being read with anxiety as indicators of
whether or not interest rates will rise. Over the longer term, the demonstrated
readiness of the Federal Reserve Open Market Committee to act "pre-emptively" to
ensure the longer term control of inflation, and to maintain stability in the
economy, is highly encouraging for fixed income investment.
1
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
A REPORT FROM YOUR
PORTFOLIO MANAGER
ETHEL SUTTON
We are happy to present you with the Semiannual Report for
Evergreen Money Market Fund. In a pre-emptive strike against
inflation, the Federal Reserve Board raised the overnight
Federal Funds rate to 5 1/2% from 5 1/4% at its Open Market
Committee meeting on March 25, 1997, finally deciding to act on
a policy bias that had been in effect since July.
Although the economy turned in a strong performance in the [Photo]
fourth quarter of last year and appears to be equally as strong
so far this year, inflation has been remarkably subdued, owing
to the strong U.S. dollar. The latest Producer Price Index
actually showed a decline from the previous period. The
sustained job growth of the past several months, however, has
not produced lower unemployment rates, leading to a belief that
a growing economy could manage to accommodate tighter labor markets without
driving up unemployment costs and overheating the economy. In his most recent
Congressional testimony, Federal Reserve Chairman, Alan Greenspan, emphasized
that, historically, most policy mistakes occurred because rate hikes were
started too late, putting the Fed "behind the curve" in coping with inflation
and necessitating a more drastic response than the gentle one-quarter point
nudge of March 25. Many economists think that this is the first of a series of
one-quarter point increases that will lead to a Federal Funds rate of 6% by
year-end.
Our approach since the beginning of 1997 has been to "barbell" the portfolio,
moving out on the yield curve to longer maturities when nervousness over strong
economic data causes rates to steepen. Our average maturities are, consequently,
longer than they would be if we had adopted a strictly "laddered" approach. On
February 28, for instance, the Fund's weighted average maturity was 79 days, as
compared with a 61-day average for the 275 first tier money market funds as
tracked by IBC's Money Fund Report* during that time.
As we search for attractive value, we not only monitor the latest economic
data, we constantly review credit quality in our quest to match stability of
principal with competitive yield.
* MONTHLY AVERAGES AS REPORTED IN THE MONTHLY IBC'S MONEY FUND REPORT. IBC 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 PER SHARE. YIELDS FLUCTUATE.
2
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
BANKERS' ACCEPTANCES* -- 0.2%
(COST $4,987,689)
$ 5,000 Suntrust Bank, Inc.,
5.54%, 3/17/97..................... $ 4,987,689
BANKERS' ACCEPTANCES
-- YANKEE & EURO DOLLAR* -- 1.0%
18,000 Bank of Tokyo-Mitsubishi,
5.43%, 5/21/97..................... 17,780,085
5,000 Dai-Ichi Kangyo Bank Ltd.,
5.45%, 5/2/97...................... 4,953,070
5,000 Sanwa Bank Ltd.,
5.45%, 6/5/97...................... 4,927,333
TOTAL BANKERS' ACCEPTANCES --
YANKEE & EURO DOLLAR
(COST $27,660,488)............ 27,660,488
CERTIFICATES OF DEPOSIT -- 10.1%
25,000 Bank Brussels Lambert,
5.85%, 1/9/98...................... 25,000,000
25,000 Banque National de Paris,
5.86%, 1/23/98..................... 25,000,000
25,000 Bayerische Vereinsbank AG,
5.76%, 12/19/97.................... 25,000,000
Canadian Imperial Bank of Commerce:
25,000 5.70%, 1/2/98...................... 25,000,000
25,000 5.75%, 12/23/97.................... 25,000,000
25,000 5.85%, 2/27/98..................... 25,000,000
25,000 National Bank of Canada,
5.50%, 11/14/97.................... 25,000,000
Societe Generale:
25,000 5.70%, 12/16/97.................... 25,000,000
25,000 5.70%, 1/2/98...................... 25,000,000
25,000 5.80%, 1/9/98...................... 25,000,000
25,000 Societe Generale (New York),
5.66%, 2/23/98..................... 25,000,000
TOTAL CERTIFICATES OF DEPOSIT
(COST $275,000,000)........... 275,000,000
COMMERCIAL PAPER* -- 86.6%
BANK HOLDING COMPANIES -- 24.0%
15,000 Banca CRT Financial Corp.,
5.45%, 7/15/97..................... 14,691,167
25,000 BankAmerica Corp.,
5.40%, 8/13/97..................... 24,381,250
Bankers Trust New York Corp.:
25,000 5.48%, 10/20/97.................... 24,113,306
25,000 5.51%, 10/10/97.................... 24,146,715
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
BANK HOLDING COMPANIES -- CONTINUED
BHF Finance (De), Inc.:
$20,565 5.30%, 4/11/97..................... $ 20,440,867
30,000 5.35%, 4/16/97..................... 29,794,917
Chiao Tung Bank:
20,000 5.37%, 4/22/97..................... 19,844,867
20,000 5.40%, 4/3/97...................... 19,901,000
10,000 5.44%, 7/23/97..................... 9,782,400
50,000 Compagnie Bancaire USA
Finance Corp.,
5.42%, 7/21/97..................... 48,931,055
10,000 Deutsche Bank Financial Inc.,
5.46%, 5/1/97...................... 9,907,483
HSBC Americas, Inc.:
20,000 5.31%, 4/21/97..................... 19,849,550
50,000 5.38%, 3/14/97..................... 49,902,861
33,485 Indosuez N.A., Inc.,
5.40%, 4/9/97...................... 33,289,113
Industrial Bank Korea:
5,000 5.35%, 3/7/97...................... 4,995,542
25,000 5.37%, 4/24/97..................... 24,798,625
15,000 5.38%, 8/11/97..................... 14,634,608
10,000 5.40%, 4/18/97..................... 9,928,000
2,858 5.41%, 4/14/97..................... 2,839,102
Korea Development Bank:
20,600 5.31%, 5/13/97..................... 20,378,189
46,500 5.45%, 3/17/97..................... 46,387,367
10,000 Nordbanken N.A., Inc.,
5.40%, 6/23/97..................... 9,829,000
6,700 Societe Generale (Canada),
5.30%, 5/5/97...................... 6,635,885
Sumitomo Bank Capital
Markets, Inc.:
39,000 5.42%, 3/10/97..................... 38,947,155
25,000 5.45%, 3/4/97...................... 24,988,646
20,000 5.48%, 6/10/97..................... 19,692,511
Unifunding, Inc.:
11,800 5.31%, 5/12/97..................... 11,674,684
10,300 5.33%, 4/21/97..................... 10,222,227
50,000 5.39%, 7/2/97...................... 49,079,208
10,000 5.42%, 5/14/97..................... 9,888,589
653,895,889
CHEMICALS -- 2.5%
2,500 Burmah Castrol Finance PLC,
5.50%, 3/18/97..................... 2,493,507
7,300 Great Lakes Chemical Corp.,
5.34%, 3/21/97..................... 7,278,343
</TABLE>
3
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
COMMERCIAL PAPER* -- CONTINUED
CHEMICALS -- CONTINUED
<C> <S> <C>
Hercules, Inc.:
$15,500 5.30%, 3/24/97..................... $ 15,447,515
13,920 5.35%, 3/19/97..................... 13,882,764
4,200 Sherwin Williams Co.,
5.37%, 4/8/97...................... 4,176,193
WMX Technologies, Inc.:
14,613 5.37%, 3/25/97..................... 14,560,686
10,000 5.77%, 3/25/97..................... 9,961,533
67,800,541
DIVERSIFIED -- 8.8%
Daewoo International
(America) Corp.,
(LOC: Korean Development Bank):
10,000 5.35%, 5/27/97..................... 9,870,708
20,000 5.41%, 5/7/97...................... 19,798,628
15,000 Green Tree Financial Corp.,
5.42%, 3/10/97..................... 14,979,675
Mitsubishi International Corp.:
20,000 5.34%, 4/1/97...................... 19,908,033
10,000 5.35%, 3/12/97..................... 9,983,653
Mitsui & Co. (USA), Inc.:
15,000 5.30%, 3/7/97...................... 14,986,750
4,680 5.30%, 3/19/97..................... 4,667,598
19,760 5.55%, 3/17/97..................... 19,711,259
28,725 5.55%, 3/18/97..................... 28,649,716
Progress Funding Corp.,
(LOC: Fuji Bank Ltd.):
17,500 5.45%, 3/7/97...................... 17,484,104
10,000 5.47%, 4/11/97..................... 9,937,703
4,920 Rubbermaid, Inc.,
5.44%, 4/3/97...................... 4,895,466
Sumitomo Corp. of America:
16,000 5.32%, 3/11/97..................... 15,976,356
11,100 5.32%, 3/18/97..................... 11,072,114
16,000 5.36%, 3/24/97..................... 15,945,209
19,300 5.37%, 3/27/97..................... 19,225,148
237,092,120
ELECTRICAL POWER -- 0.6%
16,608 Fpl Fuels, Inc.,
(LOC: Sumitomo Bank),
5.35%, 3/20/97..................... 16,561,106
ELECTRONICS -- 4.0%
5,000 Avnet, Inc.,
5.33%, 3/18/97..................... 4,987,415
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
ELECTRONICS -- CONTINUED
Hitachi Credit America Corp.:
$ 8,500 5.50%, 3/25/97..................... $ 8,468,833
9,000 5.50%, 3/27/97..................... 8,964,250
15,500 5.55%, 3/27/97..................... 15,437,871
10,000 5.55%, 3/31/97..................... 9,953,750
Orix America, Inc.,
(LOC: Sanwa Bank Ltd.):
25,000 5.43%, 3/17/97..................... 24,939,666
11,500 5.46%, 6/30/97..................... 11,288,956
13,700 Sharp Electronics Corp.,
5.32%, 3/14/97..................... 13,673,681
10,000 Toshiba America, Inc.,
5.35%, 4/1/97...................... 9,953,931
107,668,353
FINANCE -- 22.2%
12,423 Apex Funding Corp.,
(LOC: Bank of
Tokyo-Mitsubishi Ltd.),
5.57%, 3/31/97..................... 12,365,337
Aristar, Inc.:
8,700 5.32%, 4/3/97...................... 8,657,573
5,500 5.35%, 3/10/97..................... 5,492,644
19,279 Astro Capital Corp.,
5.40%, 3/31/97..................... 19,192,244
30,000 Atlas Funding Corp.,
(LOC: Dai-Ichi Kangyo Bank Ltd.),
5.41%, 3/31/97..................... 29,864,750
6,001 Barton Capital Corp.,
5.32%, 4/17/97..................... 5,959,320
Dynamic Funding Corp.,
(LOC: Fuji Bank Ltd.):
5,000 5.42%, 3/5/97...................... 4,996,989
56,311 5.42%, 4/2/97...................... 56,039,706
20,000 5.46%, 4/11/97..................... 19,875,633
17,200 5.60%, 3/12/97..................... 17,170,569
5,740 Enterprise Funding Corp.,
(LOC: NationsBank),
5.40%, 3/5/97...................... 5,736,556
15,159 Gotham Funding Corp.,
(LOC: Bank of
Tokyo-Mitsubishi Ltd.),
5.42%, 4/16/97..................... 15,054,015
20,600 Island Finance Puerto Rico, Inc.,
(LOC: Norwest Corp.),
5.43%, 3/14/97..................... 20,559,607
</TABLE>
4
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
COMMERCIAL PAPER* -- CONTINUED
FINANCE -- CONTINUED
<C> <S> <C>
Jet Funding Corp.:
$18,968 5.43%, 3/31/97..................... $ 18,882,170
8,317 5.47%, 4/30/97..................... 8,241,177
18,600 5.48%, 6/2/97...................... 18,336,686
12,435 5.50%, 3/31/97..................... 12,378,006
25,000 Lehman Brothers Holdings, Inc.,
5.53%, 3/26/97..................... 24,903,993
31,620 Market Street Funding Corp.,
5.30%, 3/27/97..................... 31,498,966
9,000 Oak Funding Corp.,
(LOC: Sumitomo Bank),
5.60%, 3/19/97..................... 8,974,800
Premium Funding, Inc.,
(LOC: Citibank):
13,067 5.30%, 4/3/97...................... 13,003,516
12,000 5.30%, 4/18/97..................... 11,915,200
21,900 Rembrandt International Co., Inc.,
5.35%, 3/14/97..................... 21,857,690
52,075 Sigma Finance Corp.,
(LOC: Deutsche Bank),
5.35%, 3/27/97..................... 51,873,788
7,000 Stanford University,
5.38%, 7/23/97..................... 6,849,360
11,054 Strait Capital Corp.,
(LOC: Sumitomo Bank),
5.42%, 3/31/97..................... 11,004,073
31,590 Tri-Lateral Capital (USA), Inc.,
(LOC: Industrial Bank of Japan
Ltd.),
5.40%, 4/1/97...................... 31,443,106
Twin Towers, Inc.,
(LOC: Deutsche Bank):
34,000 5.30%, 4/24/97..................... 33,729,700
14,716 5.30%, 7/31/97..................... 14,386,689
Wood Street Funding Corp.,
(LOC: PNC Bank):
7,886 5.32%, 4/7/97...................... 7,842,881
25,000 5.37%, 3/21/97..................... 24,925,417
25,000 Working Capital Management Corp.
II, (LOC: Industrial Bank of Japan
Ltd.),
5.45%, 4/4/97...................... 24,871,319
6,300 Yale University,
5.35%, 4/21/97..................... 6,252,251
604,135,731
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
FOOD & BEVERAGE -- 0.3%
$10,000 Cargill Financial Services Corp.,
5.40%, 10/10/97.................... $ 9,665,500
INSURANCE -- 2.6%
9,988 Allianz of America Finance Corp.,
5.39%, 4/10/97..................... 9,928,183
16,320 Equitable Life Assurance Society of
the U.S.,
5.32%, 3/10/97..................... 16,298,295
Equitable of Iowa:
5,000 5.34%, 4/2/97...................... 4,976,267
5,000 5.35%, 3/21/97..................... 4,985,139
13,100 5.35%, 4/8/97...................... 13,026,021
12,500 John Hancock Capital Corp.,
5.32%, 3/31/97..................... 12,444,583
10,000 Swiss RR Financial Prods. Corp.,
5.25%, 4/15/97..................... 9,934,375
71,592,863
LEASING -- 0.6%
JLUS Funding Corp.,
(LOC: Norinchukin Bank):
7,000 5.42%, 3/5/97...................... 6,995,784
8,252 5.45%, 4/28/97..................... 8,179,543
15,175,327
MACHINERY, EQUIPMENT &
AUTOS -- 7.4%
10,200 BTR Dunlop Finance, Inc.,
5.35%, 4/7/97...................... 10,143,914
General Motors Acceptance Corp.:
20,000 5.31%, 8/22/97..................... 19,486,700
25,000 5.32%, 8/18/97..................... 24,371,944
20,000 5.50%, 4/1/97...................... 19,905,278
25,000 5.50%, 5/16/97..................... 24,709,722
15,000 Hyundai Motor Finance Co.,
(LOC: Bank of America),
5.30%, 4/25/97..................... 14,878,542
Mitsubishi Motors Credit of
America, Inc., (LOC: The Bank of
Tokyo-Mitsubishi Ltd.):
21,000 5.36%, 4/25/97..................... 20,828,033
10,000 5.40%, 4/10/97..................... 9,940,000
20,000 5.45%, 4/17/97..................... 19,857,695
(LOC: Norinchukin Bank),
25,000 5.45%, 4/29/97..................... 24,776,701
</TABLE>
5
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
COMMERCIAL PAPER* -- CONTINUED
MACHINERY, EQUIPMENT &
AUTOS -- CONTINUED
<C> <S> <C>
Ryobi Finance Corp.,
(LOC: Sumitomo Bank):
$ 7,000 5.42%, 3/6/97...................... $ 6,994,730
5,730 5.42%, 3/18/97..................... 5,715,334
201,608,593
PHARMACEUTICALS & HEALTH
CARE -- 3.9%
AC Acquisition Holding CO.:
4,100 5.32%, 3/4/97...................... 4,098,182
20,000 5.32%, 3/27/97..................... 19,923,156
Holy Cross Health System Corp.:
58,200 5.34%, 4/7/97...................... 57,880,579
6,500 5.35%, 4/10/97..................... 6,461,361
8,743 Massachusetts College of Pharmacy
and Allied Health Services,
5.40%, 4/1/97...................... 8,702,345
10,000 Metrocrest Hospital Authority,
(LOC: Bank of New York),
5.41%, 3/3/97...................... 9,996,997
107,062,620
REAL ESTATE -- 4.5%
Copley Financing Corp.,
(Aetna Surety Bond):
3,500 5.28%, 4/3/97...................... 3,483,060
6,656 5.30%, 3/21/97..................... 6,636,402
21,000 Mec Finance USA, Inc.,
5.38%, 3/5/97...................... 20,987,447
PHH Corp.:
20,300 5.28%, 3/18/97..................... 20,249,385
41,535 5.30%, 3/19/97..................... 41,424,932
28,500 5.32%, 3/6/97...................... 28,478,942
121,260,168
RETAIL -- 0.3%
8,100 Southland Corp.,
5.30%, 4/14/97..................... 8,047,530
TELECOMMUNICATIONS -- 0.3%
7,820 Frontier Corp.,
5.34%, 4/18/97..................... 7,764,322
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
TEXTILES & APPAREL -- 3.0%
$20,000 B.I. Funding, Inc.,
5.30%, 4/30/97..................... $ 19,823,334
Calcot Ltd.:
4,000 5.38%, 4/18/97..................... 3,971,307
5,000 5.40%, 3/5/97...................... 4,997,000
5,000 5.40%, 3/7/97...................... 4,995,500
5,000 5.40%, 3/11/97..................... 4,992,500
8,000 5.40%, 3/21/97..................... 7,976,000
8,000 5.40%, 3/27/97..................... 7,968,800
5,000 5.40%, 4/9/97...................... 4,970,750
5,000 5.40%, 4/17/97..................... 4,964,750
5,000 5.40%, 5/6/97...................... 4,950,500
4,000 5.42%, 5/9/97...................... 3,958,447
8,000 5.42%, 5/13/97..................... 7,912,075
81,480,963
TRANSPORTATION -- 1.6%
9,000 Harper Group, Inc. (The),
5.37%, 3/10/97..................... 8,987,917
Norfolk Southern Corp.:
6,850 5.27%, 4/24/97..................... 6,795,851
18,600 5.32%, 4/24/97..................... 18,451,572
10,000 Yamaha Motor Finance Corp. USA,
(LOC: Dai-Ichi Kangyo Bank Ltd.),
5.38%, 3/6/97...................... 9,992,528
44,227,868
TOTAL COMMERCIAL PAPER
(COST $2,355,039,494)......... 2,355,039,494
CORPORATE NOTES -- 2.0%
4,000 Federal Home Loan Bank,
5.35%, 3/14/97..................... 4,000,000
25,000 Federal National Mortgage
Association,
5.245%, 4/11/97, (VR).............. 24,998,783
25,000 Student Loan Marketing Association,
5.76%, 1/14/98..................... 25,000,000
TOTAL CORPORATE NOTES
(COST $53,998,783)............ 53,998,783
</TABLE>
6
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
TAXABLE MUNICIPALS -- 0.2%
(COST $6,000,000)
$ 6,000 Brittany Acres,
5.875%, 4/1/97..................... $ 6,000,000
<CAPTION>
SHARES
(000)
<C> <S> <C>
MUTUAL FUND SHARES -- 0.0%
(COST $53,419)
53 Federated Prime Value Obligation
Fund............................... 53,419
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS --
(COST $2,722,739,873) 100.1% 2,722,739,873
NET OTHER ASSETS AND
LIABILITIES --........ (0.1) (1,720,515)
NET ASSETS --............ 100.0% $2,721,019,358
</TABLE>
Summary of Abbreviations:
LOC -- Letter of Credit
VR -- Variable-rate issue. Rate shown is the rate in effect at February 28,
1997.
* -- These securities held by the Fund at February 28, 1997 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.
See accompanying notes to financial statements.
7
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (cost $2,722,739,873).................................................................. $2,722,739,873
Cash........................................................................................................ 99,255
Receivable for Fund shares sold............................................................................. 5,181,649
Interest receivable......................................................................................... 2,493,496
Prepaid expenses and other assets........................................................................... 126,825
Total assets.......................................................................................... 2,730,641,098
LIABILITIES:
Dividends payable........................................................................................... 6,410,848
Payable for Fund shares redeemed............................................................................ 1,058,365
Distribution fee payable.................................................................................... 935,913
Accrued advisory fee........................................................................................ 767,763
Accrued expenses............................................................................................ 448,851
Total liabilities..................................................................................... 9,621,740
NET ASSETS..................................................................................................... $2,721,019,358
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................. $2,721,622,178
Accumulated net realized loss on investment transactions.................................................... (602,820)
Net assets............................................................................................ $2,721,019,358
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($1,916,360,422)(1,916,403,945 shares of beneficial interest outstanding)..................... $ 1.00
Class B Shares ($11,333,510)(11,333,722 shares of beneficial interest outstanding)........................... $ 1.00
Class Y Shares ($793,325,426)(793,880,420 shares of beneficial interest outstanding)......................... $ 1.00
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1997
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
Interest...................................................................................... $71,580,270
EXPENSES:
Advisory fee.................................................................................. $ 6,061,353
Distribution fee -- Class A Shares............................................................ 2,698,374
Distribution fee -- Class B Shares............................................................ 39,539
Shareholder services fee -- Class B Shares.................................................... 13,180
Transfer agent fee............................................................................ 294,153
Custodian fee................................................................................. 261,156
Registration and filing fees.................................................................. 117,104
Reports and notices to shareholders........................................................... 110,915
Professional fees............................................................................. 20,465
Trustees' fees and expenses................................................................... 16,820
Insurance..................................................................................... 11,362
Other......................................................................................... 8,149
9,652,570
Less advisory fee waiver...................................................................... (1,255,415)
Net expenses............................................................................ 8,397,155
Net investment income............................................................................ 63,183,115
Net realized loss on investments................................................................. (51,967)
NET INCREASE IN ASSETS RESULTING FROM OPERATIONS................................................. $63,131,148
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of currency)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................................ $ 63,183,115 $ 85,949,891
Net realized loss on investment transactions......................................... (51,967) (26,141)
Net increase in net assets resulting from operations.............................. 63,131,148 85,923,750
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares....................................................................... (43,236,799) (63,327,347)
Class B Shares....................................................................... (215,992) (382,116)
Class Y Shares....................................................................... (19,730,324) (22,240,428)
Total distributions to shareholders from net investment income.................... (63,183,115) (85,949,891)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold............................................................ 4,338,016,279 6,275,701,649
Proceeds from shares issued from acquisition of FFB Cash Management Fund............. -- 592,358,361
Proceeds from shares issued from acquisition of FFB Lexicon Cash Management Fund..... -- 95,834,929
Proceeds from reinvestment of distributions.......................................... 19,150,157 28,242,023
Payments for shares redeemed......................................................... (4,072,764,478) (5,531,191,681)
Net increase resulting from Fund share transactions............................... 284,401,958 1,460,945,281
Net increase in net assets........................................................ 284,349,991 1,460,919,140
NET ASSETS:
Beginning of period.................................................................. 2,436,669,367 975,750,227
End of period........................................................................ $2,721,019,358 $ 2,436,669,367
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS A AND B SHARES
(Photo of currency)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS JANUARY 4, SIX MONTHS
ENDED 1995* ENDED
FEBRUARY 28, YEAR ENDED THROUGH FEBRUARY 28, YEAR ENDED
1997 AUGUST 31, AUGUST 31, 1997 AUGUST 31,
(UNAUDITED) 1996 1995 (UNAUDITED) 1996
<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
Net investment income............................... 0.02 0.05 0.03 0.02 0.04
Less distributions to shareholders from net
investment income................................. (0.02) (0.05) (0.03) (0.02) (0.04)
Net asset value, end of period...................... $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+....................................... 2.4% 5.0% 3.5% 2.1% 4.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $1,916,360 $1,755,267 $685,155 $11,334 $10,218
Ratios to average net assets:
Expenses**........................................ 0.74%++ 0.75% 0.81%++ 1.44%++ 1.45%
Net investment income**........................... 4.81%++ 4.86% 5.26%++ 4.10%++ 4.18%
<CAPTION>
JANUARY 26,
1995*
THROUGH
AUGUST 31,
1995
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................ $1.00
Net investment income............................... 0.03
Less distributions to shareholders from net
investment income................................. (0.03)
Net asset value, end of period...................... $1.00
TOTAL RETURN+....................................... 2.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $7,927
Ratios to average net assets:
Expenses**........................................ 1.51%++
Net investment income**........................... 4.54%++
</TABLE>
+ Total return is calculated on net asset value for the periods indicated and
is not annualized. Contingent deferred sales charge is not reflected.
++ Annualized.
* Commencement of class operations.
** 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
ENDED 1995* ENDED
FEBRUARY 28, YEAR ENDED THROUGH FEBRUARY 28, YEAR ENDED
1997 AUGUST 31, AUGUST 31, 1997 AUGUST 31,
(UNAUDITED) 1996 1995 (UNAUDITED) 1996
<S> <C> <C> <C> <C> <C>
Expenses.............................................. 0.83%++ 0.89% 1.02%++ 1.53%++ 1.59%
Net investment income................................. 4.71%++ 4.72% 5.05%++ 4.00%++ 4.04%
<CAPTION>
JANUARY 26,
1995*
THROUGH
AUGUST 31,
1995
<S> <C>
Expenses.............................................. 2.39%++
Net investment income................................. 3.66%++
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS Y SHARES
(Photo of currency)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED TEN MONTHS ENDED
FEBRUARY 28, YEAR ENDED AUGUST ENDED OCTOBER
1997 31, AUGUST 31, 31,
(UNAUDITED) 1996 1995 1994# 1993
<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
Net investment income.................................. 0.03 0.05 0.05 0.03 0.03
Less distributions to shareholders from net investment
income............................................... (0.03) (0.05) (0.05) (0.03) (0.03)
Net asset value, end of period......................... $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+.......................................... 2.6% 5.3% 5.4% 2.9% 3.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).............. $793,325 $671,185 $282,668 $273,115 $299,418
Ratios to average net assets:
Expenses**........................................... 0.44%++ 0.45% 0.53% 0.32%++ 0.39%
Net investment income**.............................. 5.10%++ 5.16% 5.26% 3.46%++ 3.19%
<CAPTION>
YEAR ENDED
OCTOBER 31,
1992
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................... $1.00
Net investment income.................................. 0.04
Less distributions to shareholders from net investment
income............................................... (0.04)
Net asset value, end of period......................... $1.00
TOTAL RETURN+.......................................... 4.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).............. $357,917
Ratios to average net assets:
Expenses**........................................... 0.36%
Net investment income**.............................. 4.18%
</TABLE>
# The Fund changed its fiscal year end from October 31 to August 31.
+ 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>
SIX MONTHS YEAR
ENDED TEN MONTHS ENDED
FEBRUARY 28, YEAR ENDED ENDED OCTOBER
1997 AUGUST 31, AUGUST 31, 31,
(UNAUDITED) 1996 1995 1994# 1993
<S> <C> <C> <C> <C> <C>
Expenses............................................................ 0.53%++ 0.59% 0.73% 0.71%++ 0.71%
Net investment income............................................... 5.00%++ 5.02% 5.06% 3.07%++ 2.87%
<CAPTION>
YEAR ENDED
OCTOBER 31,
1992
<S> <C>
Expenses............................................................ 0.72%
Net investment income............................................... 3.82%
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
A REPORT FROM YOUR
PORTFOLIO MANAGER
DIANE BEAVER
We are pleased to present the Semiannual Report for Evergreen
Pennsylvania Tax-Free Money Market Fund for the six-month period
ended February 28, 1997. The Fund's total return (Class Y,
no-load shares) for the six-month period was 1.54%* as compared
with 1.52% for the average of the 15 Pennsylvania Tax-Free Money [Photo]
Market funds tracked by Lipper Analytical Services** during that
time. The six-month total return at net asset value for the
Fund's Class A shares was 1.49%*. At February 28, the seven-day
current, effective and tax-equivalent yields*** were 3.03%,
3.08% and 4.95%, respectively for the Fund's Class Y shares and
2.88%, 2.93% and 4.71%, respectively, for the Fund's Class A
shares.
As the fourth quarter of 1996 progressed, talk of a
Fed-induced rate hike circulated but never transpired, in part due to economic
data that supported a low inflation environment. Although the Federal Reserve
Board has neither raised nor lowered interest rates in well over a year, Fed
Chairman, Alan Greenspan, has twice shaken the financial markets with his
comments. In December, Mr. Greenspan expressed his concern that "irrational
exuberance" may have driven the stock markets to overpriced levels. The
financial markets were again jolted in February when Greenspan suggested raising
interest rates as a "pre-emptive strike" against inflation. In both instances,
interest rates rose. Despite the rhetoric, the Federal Reserve Board had not
interfered with interest rates, economic indicators portray a healthy economy
promoting strong corporate earnings growth with little inflationary pressure.
The seasonal back-up in interest rates, which usually occurs in December as a
result of year-end redemptions, never materialized. Likewise, the "January
effect" of large cash inflows such as coupon payments and maturities, which
causes rates to decline, did not occur. Although strategic adjustments in
maturity and asset allocation are more of a challenge in a state-specific fund
due to lack of supply and liquidity, the Fund will continue to look for yield
opportunities such as those found in smaller instruments where yield can be
enhanced. At February 28, the Fund's weighted average maturity was 54 days and
total net assets stood at $73.2 million.
Thank you for your investment in the Evergreen Pennsylvania Tax-Free Money
Market Fund.
FIGURES REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS.
* PERFORMANCE FIGURES INCLUDE THE REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS, IF ANY.
DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED TO VOLUNTARILY WAIVE
A PORTION OF ITS ADVISORY FEE AND ABSORB A PORTION OF THE FUND'S OTHER
EXPENSES. HAD FEE NOT BEEN WAIVED OR EXPENSES ABSORBED, PERFORMANCE AND
YIELDS WOULD HAVE BEEN LOWER. FEE WAIVER MAY BE REVISED AT ANY TIME.
THE FUND MAY INCUR 12B-1 EXPENSES UP TO AN ANNUAL MAXIMUM OF .35 OF 1% OF
ITS AVERAGE DAILY NET ASSETS OF ITS CLASS A SHARES.
DURING THE PERIOD UNDER REVIEW, SUCH PAYMENTS TOTALLED .09 OF 1% OF THE
FUND'S DAILY NET ASSETS OF ITS CLASS A SHARES.
** SOURCE: LANA (LIPPER ANALYTICAL NEW APPLICATIONS) LIPPER ANALYTICAL SERVICES
INC., IS AN INDEPENDENT MUTUAL FUNDS PERFORMANCE MONITOR. LIPPER AVERAGE
DOES NOT INCLUDE SALES CHARGES, AND IF INCLUDED PERFORMANCE MAY BE LOWER AND
THE FUND'S RANKINGS MAY BE DIFFERENT.
*** TAX-EQUIVALENT YIELDS ASSUME A 36% FEDERAL TAX BRACKET AND A 2.8%
PENNSYLVANIA STATE TAX BRACKET. TAX-EQUIVALENT YIELDS WOULD BE LOWER FOR
INVESTORS IN LOWER TAX BRACKETS AND HIGHER FOR INVESTORS IN HIGHER TAX
BRACKETS. SOME INCOME MAY BE SUBJECT TO 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 PER SHARE. YIELDS FLUCTUATE.
13
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
STATEMENT OF INVESTMENTS
(Photo of building)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- 100.6%
PENNSYLVANIA -- 99.4%
$ 1,500 Allegheny Cnty. Higher Ed.
Bldg. Auth. RB, Allegheny
Cnty. Cmnty. College,
Prerefunded @ 100, (Ins. by
MBIA),
6.65%, 11/1/97........................ $ 1,529,905
1,000 Allegheny Cnty. Hosp. Dev.
Auth. RB Allegheny Gen. Hosp.,
Ser. 1995B, (LOC: Morgan Gty. Tr.
Co. of NY),
3.30%, VRDN........................... 1,000,000
1,200 Allegheny Health Ed. & Resh.
Corp., Ser. A-ACES, (LOC: PNC
Bk., Pittsburgh),
3.30%, VRDN........................... 1,200,000
1,100 Allegheny Health Ed. & Resh.
Corp., Ser. C-ACES, (LOC: PNC
Bk., Pittsburgh),
3.30%, VRDN........................... 1,100,000
Allegheny Cnty. IDA Envir.
RRB, US Steel Corp., TECP,
(LOC: The Long-Term Cr. Bk.
of Japan):
1,500 3.35%, 3/5/97......................... 1,500,000
1,300 3.35%, 3/11/97........................ 1,300,000
2,000 3.40%, 4/8/97......................... 2,000,000
300 Beaver Cnty. IDA-PCRR
Duquesne Light Co., Beaver
Vly., Ser. A, (LOC: Barclays
Bk. PLC),
3.25%, VRDN........................... 300,000
500 Berks Cnty. Muni. Auth. RB,
Pooled Fin. Prog.,
Prerefunded @100,
7.00%, 9/1/97......................... 508,344
240 Big Spring School Dist.
Cumberland Cnty. GO Bds.,
Ser. 1992, (Ins. by FGIC),
4.35%, 3/1/97......................... 240,000
250 Brandywine Heights Area Dist.
GO Bds., (Ins. by MBIA),
4.40%, 4/1/97......................... 250,044
1,000 Bucks Cnty. IDA Environmental
Impt., RB, USX Corp., ARB,
(LOC: Wachovia Bk. N.C.),
3.65%, 3/3/97......................... 1,000,000
100 Bucks Cnty. IDA-RRB, SHV Real
Estate, Inc., Ser. 1984, (LOC:
ABN-AMRO Bk.),
3.25%, VRDN........................... 100,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
PENNSYLVANIA -- CONTINUED
$ 1,000 Cnty. of Chester Hlth. & Ed.
Fac. Auth. RB, Barclays
Friends, Ser. A, (LOC: Bk. of
Ireland),
3.30%, VRDN........................... $ 1,000,000
435 Coudersport School Dist. GO
Bds., Ins. by FSA,
3.75%, 9/1/97......................... 435,000
Delaware Cnty. IDA Solid Waste
RB, Scott Paper Co., 1984,
3.30%, VRDN:
700 Ser. C................................ 700,000
400 Ser. D................................ 400,000
1,000 Delaware Cnty. IDA-PCRR,
Philadelphia Electric Co.,
Ser. 1988B -- TECP, (SPA: FGIC),
3.40%, 4/7/97......................... 1,000,000
Delaware Vly. Regl. Fin. Auth.
Local Govt. RB:
1,000 Ser. 1985A, (LOC: Midland Bk.
PLC),
3.40%, VRDN........................... 1,000,000
250 Ser. 1986A, (Ins. by AMBAC),
3.80%, 4/15/97........................ 250,000
500 Downingtown Area School Dist.
GO Bds., Ser. 1986A,
4.00%, 3/1/97......................... 500,000
445 East Hempfield Township GO
Bds., (Ins. by AMBAC),
4.25%, 11/1/97........................ 446,322
Emmaus Gen. Auth. Local Govt.
RB Ser. 1989, Bd. Pool Pgm., VRDN:
4,300 Subsrs. B-12, (LOC: Midland
Bk. PLC),
3.40%............................... 4,300,000
2,000 Subsrs. C-8, (LOC: Midland Bk.
PLC),
3.40%............................... 2,000,000
1,400 Subsrs. D-11, (LOC: Midland
Bk. PLC),
3.40%............................... 1,400,000
400 Subsrs. E-8, (LOC: Canadian
Imperial Bk. of Commerce),
3.35%............................... 400,000
425 Subsrs. E-9, (LOC: Midland Bk.
PLC),
3.40%............................... 425,000
</TABLE>
14
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
(Photo of building)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
PENNSYLVANIA -- CONTINUED
<C> <S> <C>
Emmaus Gen. Auth. Local Govt.
RB Ser. 1989, Bd. Pool Pgm.,
VRDN:
$ 2,000 Subsrs. F-5, (LOC: Midland Bk.
PLC),
3.40%................................. $ 2,000,000
300 Geisinger Auth. Health Sys.
RB, Montour Cnty., Ser. B,
7.10%, 7/1/97......................... 302,920
400 Health Care Facs. Auth. of
Sayre RB, VHA of PA, Inc.,
Capital Asset Fin. Prog., Ser. A,
(SPA: Mellon Bk. PLC),
3.30%, VRDN........................... 400,000
475 Lancaster Higher Ed. Auth.
College RB, Franklin &
Marshall College, Ser. 1995,
3.45%, VRDN........................... 475,000
500 Lancaster School Dist. GO
Bds., (Ins. by FGIC),
4.00%, 2/15/98........................ 500,650
200 Lehigh Cnty. IDA-PCRB, Ser.
1985A, (LOC: Rabobank Nederland),
3.25%, VRDN........................... 200,000
470 Lehigh Cnty. Auth. Wtr. RB,
Ser. 1984, (SPA: ABN-Amro Bk.),
3.25%, VRDN........................... 470,000
200 Mars Area School Dist. GO
Bds., Ser. C, (Ins. by FGIC),
4.30%, 3/1/97......................... 200,000
660 Montgomery Cnty. GO Bds., Ser. A,
4.00%, 7/15/97........................ 660,419
Montgomery Cnty. IDA-PCRR,
PECO Energy Co., Ser. 1994A --
TECP, (LOC: Deutsche Bk. AG, NY):
2,000 3.30%, 4/7/97......................... 2,000,000
1,000 3.50%, 3/5/97......................... 1,000,000
2,000 New Castle Area Hosp. Auth.
RB, Jameson Mem. Hosp., (SPA:
PNC Bk.),
3.30%, VRDN........................... 2,000,000
1,000 North Penn Water Auth. RB,
Prerefunded @ 102, (Ins. by FGIC),
6.90%, 11/1/97........................ 1,035,738
1,000 Northeastern Hosp. & Ed. Auth.
Rev., Health Care Rev. Wyoming
Vly., Ser. A, (LOC: Industrial
Bk. of Japan Ltd., NY),
3.25%, VRDN........................... 1,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
PENNSYLVANIA -- CONTINUED
$ 2,800 Northeastern Pwr. Co., Ser. 1985,
(LOC: Sumitomo Bk., Ltd.),
3.50%, 3/3/97......................... $ 2,800,000
500 Penn Manor School Dist. GO
Bds., Series A, (Ins. by FGIC),
5.50%, 6/1/97......................... 501,838
1,000 Pennsylvania Higher Ed. Fac.
Auth. RB:
Allegheny Delaware Vly., Ser. D,
(LOC: PNC),
3.35%, VRDN........................... 1,000,000
2,300 Carnegie Mellon Univ., Ser. B,
(SPA: Union Bk. of Switzerland
& Morgan Gty.),
3.45%, VRDN........................... 2,300,000
2,000 Allegheny College, (LOC:
Mellon Bk. PLC),
3.35%, VRDN........................... 2,000,000
565 LaSalle Univ., Ser. 1996, (Ins.
by MBIA),
4.00%, 5/1/97......................... 565,273
2,000 The Univ. of Pennsylvania
Health Svs., (SPA: Credit
Suisse, NY),
3.20%, VRDN........................... 2,000,000
500 The Univ. of Pennsylvania
Health Svs., Ser. 1994B-ACES,
3.20%, VRDN........................... 500,000
2,900 Pennsylvania TRANS,
4.50%, 6/30/97........................ 2,908,307
2,000 Pennsylvania State Ser. 1997A,
3.30%, 4/22/97........................ 2,000,000
1,500 Philadelphia Gas Wks. RB, Ser.10,
(Ins. by BIG),
6.90%, 7/1/97......................... 1,516,308
3,000 Philadelphia Hosp. & Higher
Ed. Facs. Auth. RB, Children's
Hosp. of Philadelphia, Ser. B,
(SPA: Morgan Guaranty),
3.45%, VRDN........................... 3,000,000
700 Philadelphia Municipal Auth.
Municipal Svs. Building Lease
Rental Bds., Ser. 1990, (Ins.
by FSA),
6.80%, 3/15/97........................ 700,798
3,500 Philadelphia TRANS, Ser. A,
4.50%, 6/30/97........................ 3,506,130
500 Pittsburgh School Dist. GO
Bds., Ser. C, (Ins. by FGIC),
5.50%, 8/1/97......................... 503,254
</TABLE>
15
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
PENNSYLVANIA -- CONTINUED
<C> <S> <C>
$ 665 Pottstown Borough Auth. Swr.
RB, (Ins. by AMBAC),
4.00% 11/1/97......................... $ 666,500
400 Presbyterian Univ. Hosp.,
Ser. 1988B3-ACES, (LOC: PNC Bk.,
Pittsburgh),
3.35%, VRDN........................... 400,000
5 Presbyterian Univ. Hosp., Ser.
B2-ACES, (LOC: PNC Bk.,
Pittsburgh),
3.35%, VRDN........................... 5,000
4,200 Schuylkill Cnty. IDA Res.
Recovery RB
Gilberton Pwr., (LOC: Mellon
Bk. PLC),
3.35%, VRDN........................... 4,200,000
2,000 The Toledo Edison Co.
Mansfield, Ser. 1992E-TECP,
(LOC: Toronto Dominion Bk.),
3.70%, 12/4/97........................ 2,000,000
1,000 University Pittsburgh Higher
Ed. RB, Univ. Capital., Ser. A
Prerefunded @ 102,
8.375%, 6/1/97........................ 1,031,708
160 Upper Merion Township GO Bds.,
3.80%, 11/1/97........................ 160,000
72,794,458
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
PUERTO RICO -- 1.2%
$ 875 Puerto Rico Indl., Med. &
Environmental Pollution
Control Facs. Fin. Auth. RB,
Merck & Co., Inc.,
Ser. 1983A-ARB,
4.00%, 12/1/97........................ $ 875,000
TOTAL SHORT-TERM MUNICIPAL SECURITIES
(COST $73,669,458).................. 73,669,458
</TABLE>
<TABLE>
<C> <S> <C> <C>
SHARES
(000)
MUTUAL FUND SHARES -- 0.1%
(COST $100,000)
100 Federated Pennsylvania
Municipal Cash Trust........... 100,000
TOTAL INVESTMENTS --
(COST $73,769,458)........... 100.7% 73,769,458
OTHER ASSETS AND
LIABILITIES -- (NET)......... (0.7) (523,462)
NET ASSETS --.................. 100.0% $73,245,996
</TABLE>
16
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
Summary of Abbreviations:
ACES -- Adjustable Convertible Extendable Securities
AMBAC -- American Municipal Bond Assurance Corp.
ARB -- Adjustable Rate Bonds
COP -- Certificates of Participation
EDA -- Economic Development Authority
EDRB -- Economic Development Revenue Bond
FGIC -- Financial Guaranty Insurance Co.
FSA -- Financial Security Assurance Inc.
GO -- General Obligations
IDA -- Industrial Development Authority
LIQ -- Liquidity Provider
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
MFHR -- Multifamily Housing Revenue
MHRB -- Multifamily Housing Revenue Bond
PCRB -- Pollution Control Revenue Bond
PCRR -- Pollution Control Revenue Refunding Bonds
RB -- Revenue Bonds
RRB -- Refunding Revenue Bonds
SPA -- Securities Purchase Agreement
TECP -- Tax Exempt Commercial Paper
TRANS -- Tax Revenue Anticipation Notes
Adjustable Rate Bonds are putable back to the issuer or other
parties not affiliated with the issuer at par on the interest reset
dates. Interest rates are determined and set by the issuer
quarterly, semi-annually or annually depending upon the terms of the
security. Interest rates presented for these securities are those in
effect at February 28, 1997. These securities represent 3% of
total investments at February 28, 1997.
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 28,
1997. These securities represent 54% of total investments at
February 28, 1996.
Certain obligations held in the portfolio have credit
enhancements or liquidity features that may, under certain
circumstances, provide for repayment of principal and interest on the
obligation upon demand date, interest rate reset date or final
maturity. These enhancements include: letters of credit; liquidity
guarantees; standby bond purchase agreements; tender option
purchase agreements; and third party insurance (i.e. AMBAC,
FGIC and MBIA). Adjustable rate bonds and variable rate
demand notes held in the portfolio may be considered derivative
securities within 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 are restricted in resale to qualified
institutions and are considered liquid.
See accompanying notes to financial statements.
17
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (amortized cost $73,769,458)............... $73,769,458
Cash............................................................ 1,543
Interest receivable............................................ 511,583
Receivable for Fund shares sold................................. 75,000
Prepaid expenses................................................ 9,902
Total assets.............................................. 74,367,486
LIABILITIES:
Payable for investment securities purchased..................... 947,345
Dividends payable............................................... 87,431
Accrued advisory fee............................................ 15,228
Distribution fee payable........................................ 8,297
Accrued expenses................................................ 63,189
Total liabilities......................................... 1,121,490
NET ASSETS......................................................... $73,245,996
NET ASSETS CONSIST OF:
Paid-in capital................................................. $73,256,123
Undistributed net investment income............................. 90
Accumulated net realized loss on investment transactions........ (10,217)
Net assets................................................ $73,245,996
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($34,138,308)(34,139,945 shares of beneficial
interest outstanding)....................................... $ 1.00
Class Y Shares ($39,107,688)(39,116,178 shares of beneficial
interest outstanding)....................................... $ 1.00
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.............................................. $1,268,443
EXPENSES:
Advisory fee.......................................... $141,458
Distribution fee -- Class A Shares.................... 41,509
Custodian fee......................................... 24,518
Administration fee.................................... 15,535
Professional fees..................................... 15,182
Transfer agent fee.................................... 14,224
Reports and notices to shareholders................... 6,668
Registration and filing fees.......................... 5,993
Insurance............................................. 5,705
Trustees' fees and expenses........................... 1,180
Other................................................. 796
272,768
Less advisory and distribution fee waivers............ (83,065)
Net expenses.................................... 189,703
Net investment income.................................... 1,078,740
Net realized loss on investments......................... --
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..... $1,078,740
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
FEBRUARY 28, ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income...................................................................... . $ 1,078,740 $ 1,091,227
Net realized loss on investment transactions................................................ -- (378)
Net increase in net assets resulting from operations..................................... 1,078,740 1,090,849
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares.............................................................................. (414,887) (242,309)
Class Y Shares.............................................................................. (667,563) (848,918)
Total distributions to shareholders...................................................... (1,082,450) (1,091,227)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................... 71,827,918 61,460,030
Proceeds from reinvestment of distributions................................................. 540,006 621,908
Payments for shares redeemed................................................................ (69,633,636) (79,296,671)
Net increase (decrease) resulting from Fund share transactions........................... 2,734,288 (17,214,733)
Net increase (decrease) in net assets.................................................... 2,730,578 (17,215,111)
NET ASSETS:
Beginning of period......................................................................... 70,515,418 87,730,529
End of period (including undistributed net investment income of $90 and $3,800 at February
28, 1997 and August 31, 1996, respectively)............................................... $ 73,245,996 $ 70,515,418
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
(Photo of building) MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
SIX MONTHS MARCH 1, AUGUST 22, SIX MONTHS MARCH 1,
ENDED 1996 1995* ENDED 1996
FEBRUARY 28, THROUGH THROUGH FEBRUARY 28, THROUGH YEAR ENDED
1997 AUGUST 31, FEBRUARY 29, 1997 AUGUST 31, FEBRUARY 29, FEBRUARY 28,
(UNAUDITED) 1996# 1996 (UNAUDITED) 1996# 1996 1995
<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
Net investment
income................. 0.01 0.01 0.02 0.02 0.01 0.03 0.03
Less distributions to
shareholders from net
investment income...... (0.01) (0.01) (0.02) (0.02) (0.01) (0.03) (0.03)
Net asset value, end of
period................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+............ 1.5% 1.5% 1.7% 1.5% 1.5% 3.5% 2.8%
RATIOS & SUPPLEMENTAL
DATA:
Net assets, end of period
(000's omitted)........ $34,138 $22,196 $4,333 $39,108 $48,319 $83,398 $43,539
Ratios to average net
assets:
Expenses**............. 0.59%++ 0.55%++ 0.47%++ 0.50%++ 0.50%++ 0.37% 0.33%
Net investment
income**............... 2.99%++ 2.97%++ 3.14%++ 3.09%++ 2.92%++ 3.42% 3.09%
<CAPTION>
YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 28,
1994 1993
<S> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of period.... $1.00 $1.00
Net investment
income................. 0.02 0.03
Less distributions to
shareholders from net
investment income...... (0.02) (0.03)
Net asset value, end of
period................. $1.00 $1.00
TOTAL RETURN+............ 2.1% 2.7%
RATIOS & SUPPLEMENTAL
DATA:
Net assets, end of period
(000's omitted)........ $14,383 $15,999
Ratios to average net
assets:
Expenses**............. 0.47% 0.35%
Net investment
income**............... 2.10% 2.62%
</TABLE>
# The Fund changed its fiscal year end from February 28 to August 31.
+ Total return is calculated for the periods indicated and is not annualized.
++ Annualized.
* Commencement of class operations.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the 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 MARCH 1, AUGUST 22, SIX MONTHS MARCH 1,
ENDED 1996 1995* ENDED 1996
FEBRUARY 28, THROUGH THROUGH FEBRUARY 28, THROUGH YEAR ENDED
1997 AUGUST 31, FEBRUARY 29, 1997 AUGUST 31, FEBRUARY 29, FEBRUARY 28,
(UNAUDITED) 1996# 1996 (UNAUDITED) 1996# 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses................. 0.95%++ 0.96%++ 1.08%++ 0.65%++ 0.66%++ 0.73% 1.05%
Net investment income.... 2.63%++ 2.56%++ 2.53%++ 2.94%++ 2.76%++ 3.06% 2.37%
<CAPTION>
YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 28,
1994 1993
<S> <C> <C>
Expenses................. 1.26% 1.07%
Net investment income.... 1.31% 1.90%
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
A REPORT FROM YOUR
PORTFOLIO MANAGER
STEVEN C. SHACHAT
We are pleased to present the Evergreen Tax Exempt Money
Market Fund Semiannual Report. Despite the presidential election
last November, the Federal Reserve and Chairman, Alan Greenspan
commanded the spotlight for fixed income markets. At the end of
the period under review, the Fed did not raise short-term
interest rates, thereby, in the view of some participants, [Photo]
gambling that the economy would slow. Since much of the economic
data released during the six-month period supported a consumer
pullback, the debt markets enjoyed a rally and the stock market
roared to new highs. Just as the economic, fiscal and political
scenario and financial market backdrop couldn't look better,
some statements made by Fed Chairman Alan Greenspan in a speech
in December prompted the market to re-think the gamble. Traders
and investors had fully priced in continued non-inflationary slow
growth without a glimmer of a risk premium and the phrase
"irrational exuberance" caught their attention. This added some
uncertainty and volatility into the market through the end of February.
Despite the mixed news on the strength of the economy, the municipal market
generally experienced strong demand, perhaps because of the absence of tax
reform and credit scares. Retail investors', insurance companies' and mutual
funds' preference to buy and hold securities through 1996 also contributed to
stability in municipal markets.
We began the six-month period with an aggressive approach to the market,
allowing the Fund's weighted average portfolio maturity to fluctuate in the
55-day to 60-day range. The strategy was based on a technical weakness in the
market due to supply combined with our belief that the Federal Board was not
going to tighten monetary policy. We purchased short-term bonds and municipal
notes as well as tax exempt commercial paper. At the close of the period,
economic statistics started to indicate that the economy was indeed growing and
concerns that the Federal Reserve Board may begin to tighten monetary policy
began to creep into the market. We changed our strategy to a neutral one,
allowing the Fund's weighted average maturity to decline to the 40-day range.
As of February 28, over 60% of the Fund's net assets were invested in tax
exempt variable rate demand notes. These short-term securities pay interest at
current market levels and return their entire face value when redeemed, which
helps afford the Fund a great deal of liquidity and price stability.
In the coming months, we will maintain a neutral approach to the market while
positioning the Fund for the upcoming period of supply imbalances in the
short-term municipal market. We anticipate taking advantage of attractively
priced short-term municipal notes as opportunities become available. Diversity
and credit quality are paramount to the Fund, and we will seek to offer an
attractive tax exempt yield to our shareholders.
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 PER SHARE. YIELDS FLUCTUATE.
THE FUND'S INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES. SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX FOR CERTAIN INVESTORS.
22
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- 100.2%
ALABAMA -- 1.5%
Alabama IDA-IDRB,
$ 2,290 Air-Dro Cylinders, Inc., (LOC:
Southtrust Bk. of Alabama, N.A.),
3.79%, VRDN........................ $ 2,290,000
3,590 Automation Technologies Ind., Inc.,
(LOC: Columbus Bk. & Tr. Co.),
3.70%, VRDN........................ 3,590,000
Coml. Dev. Auth. of the City
of Birmingham RB,
3.60%, VRDN:
1,140 Avondale Comm. Park,
Phase II,
(LOC: Amsouth Bk., N.A.)......... 1,140,000
665 Southside Business Ctr.,
(LOC: Amsouth Bk., N.A).......... 665,000
1,100 IDB of the City of Livingston
IDRB, Toin Corp. U.S.A., Ser.
1987, (LOC: Indl. Bk. of Japan,
Ltd. NY),
3.75%, VRDN........................ 1,100,000
3,235 IDB of Mobile Cnty. RB,
Sherman Intl. Corp., Ser.
1994A, (LOC: Columbus Bk. & Tr.
Co.),
3.70%, VRDN........................ 3,235,000
2,140 IDB of the City of Pell IDRB,
Reh Kinder/Gorbel, (LOC: Key
Bk. of NY),
3.60%, VRDN........................ 2,140,000
3,000 IDB of the City of Prattville
IDRB, Kuhnash Ppty./Arkay
Plastics, (LOC: PNC Bank),
3.60%, VRDN........................ 3,000,000
17,160,000
ALASKA -- 2.1%
20,465 Alaska State Dept. Admin. COP,
Ser. PT-94, (LIQ: Credit Suisse
& Ins. by Cap. Mkt. Assurance),
3.45%, VRDN........................ 20,465,000
4,025 North Slope Boro. Capital
Appreciation Bds. GO, Ser.
1996 B, (Ins. by MBIA),
zero coupon (4.00% YTM),
6/30/97............................ 3,972,789
24,437,789
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
ARIZONA -- 0.8%
$ 7,400 IDA of the City of Glendale
RB, Thunderbird Gardens, (LOC:
Sumitomo Trust & Bk. Co. Ltd., NY),
3.70%, VRDN........................ $ 7,400,000
200 IDA of the Cnty. of Maricopa,
McLane Co., Inc., Ser. 1984,
(LOC: Vly. Natl. Bk.),
3.80%, VRDN........................ 200,000
1,800 Maricopa Cnty. School Dist.
#006 TRANS, Ser. 1996A,
4.25%, 7/31/97..................... 1,801,812
9,401,812
ARKANSAS -- 0.3%
City of Jonesboro Residential
Housing & Hlth. Care Fac. Brd.
Hosp. RRB, St. Bernards Regnl.
Medical Ctr., (Ins. by AMBAC)
4.10%, 7/1/97:
425 Ser. 1996A....................... 425,000
605 Ser. 1996B....................... 605,000
2,800 Fayetteville Public Facilities
Brd. RB, Charter Vista Hosp.,
(LOC: Bank of Tokyo),
3.50%, 3/4/97...................... 2,800,000
3,830,000
CALIFORNIA -- 7.6%
6,000 California Higher Ed. Loan
Auth. Inc., Ser. A-1, (Gtd. by
SLMA),
3.95%, 7/1/97...................... 6,000,000
2,975 California TRANS, Ser. A,
4.50%, 6/30/97..................... 2,980,185
1,900 Glenn Cnty. IDA RB, Land
O'Lakes, Inc., Ser. 1995, (LOC:
Sanwa Bk., Ltd.),
3.70%, VRDN........................ 1,900,000
4,250 Hsg. Auth. of the City of
Paramount MFHR, Century Place
Apt., Ser. 1989A, (LOC: Heller
Finl. Inc.),**
3.95%, VRDN........................ 4,250,000
5,000 Hsg. Auth. of the City of
Santa Ana MFHR, Villa Verde
Apt., Ser. 1985B, (LOC: Mercury
Svgs. & Ln.) Coll: U.S. Treas.
Bills,
3.55%, VRDN........................ 5,000,000
</TABLE>
23
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
CALIFORNIA -- CONTINUED
<C> <S> <C>
$ 2,500 IDA of the City of Simi Vly.
IDRB, Wambold Furniture, Ser.
1984, (LOC: Wells Fargo Bk.,
N.A.),
3.75%, VRDN........................ $ 2,500,000
4,200 North Cnty. School Fin. Auth.
TRANS, Orange Cnty., Ser. 1996,
4.75%, 7/1/97...................... 4,208,080
Pitney Bowes Cr. Corp.
Leasetops Trs., 3.50%, VRDN:
22,846 Bart Telesystem Lease, (LOC:
ABN-Amro Bk., N.V.),**........... 22,845,645
12,831 San Diego Regl. Comm. Sys.
Lease, Ser. 1996A, (LOC:
Landesbank Hessen)............... 12,831,200
15,375 San Bernardino Cnty. COP, Ser.
1995, (Ins. by MBIA),
3.55%, VRDN........................ 15,375,000
6,000 South Coast Local Ed. Agy.
Pooled TRANS Prog., Ser.
1996A,
4.75%, 6/30/97..................... 6,013,185
5,000 Stanislaus Cnty. Office of
Ed., 1996 TRANS,
4.50%, 6/30/97..................... 5,007,961
88,911,256
COLORADO -- 4.8%
6,055 Arapahoe Cnty. MFHR Ref.,
Stratford Sta., Ser. 1994,
(LOC: Heller Finl., Inc.),
3.70%, VRDN........................ 6,055,000
5,080 Colorado Hsg. Fin. Auth. RB
MERLOTS, Ser. C-ARB,
4.20%, 8/1/97...................... 5,080,000
3,000 Dove Valley Metropolitan Dist.
Arapahoe Cnty. GO Bds., Ser.
1996C, (LOC: Dai-Ichi Kangyo
Bk., Ltd.),
4.15%, 11/1/97..................... 3,000,000
23,700 Eagle Tax Exempt Trust, Nevada
State Colorado River
Commission, (LIQ: Citibank, N.A.),
3.40%, VRDN........................ 23,700,000
15,000 El Paso Cnty. School Dist.
#011 TRANS,
4.25%, 6/30/97..................... 15,014,520
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
COLORADO -- CONTINUED
$ 2,680 Parkview Met. Dist. Arapahoe
Cnty. GO Bds., Ser. 1993,
(LOC: Cent Bk./Bk. Western,
N.A.),
3.55%, VRDN........................ $ 2,680,000
55,529,520
DELAWARE -- 1.1%
5,100 Delaware Economic Dev. Auth.
RB, Delmarva P&L CO, (Gtd. by
Delmarva P&L),
3.60%, VRDN........................ 5,100,000
3,000 Delaware EDA-IDRB, Arlon,
Inc., Ser. 1989, (LOC: Bk. of
Amer., IL),
3.70%, VRDN........................ 3,000,000
2,640 Delaware Hsg. Auth. RB
MERLOTS, Ser. G ARB, (Ins. by
FGIC),
4.20%, 6/1/97...................... 2,640,000
2,480 New Castle Cnty. EDRB, Toys R
Us, (LOC: Bankers Tr. Co., NY),
3.55%, VRDN........................ 2,480,000
13,220,000
DISTRICT OF COLUMBIA -- 5.1%
Dist. of Columbia GO Gen. Fd.
Recovery Bd., 3.50%, VRDN:
8,700 Ser. B, (LOC: Union Bk. of
Switzerland)..................... 8,700,000
2,800 Ser. B-2, (LOC: Westdeutsche
Landesbank)...................... 2,800,000
5,000 Ser. B-3, (LOC: Landesbank
Hessen).......................... 5,000,000
5,120 Dist. of Columbia GO RB,
Puttable Floating Opt.
Tax-Exmp. Rcpt., Ser. PA-64,
Ser. 1993C, (LIQ: Merrill Lynch
Cap. Svs., Inc.),
3.65%, VRDN........................ 5,120,000
Dist. of Columbia GO RFB,
3.55%, VRDN:
14,300 Ser. 1992A-1, (LOC: Natl.
Westminster Bk.)................. 14,300,000
3,600 Ser. 1992A-2, (LOC: Bk. of
Nova Scotia)..................... 3,600,000
7,900 Ser. 1992A-4, (LOC: Toronto
Dominion Bk.).................... 7,900,000
1,400 Ser. 1992A-5, (LOC: Bk. of
Nova Scotia)..................... 1,400,000
</TABLE>
24
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
DISTRICT OF COLUMBIA -- CONTINUED
<C> <S> <C>
$ 6,000 District of Columbia, Ser. A-3,
(LOC: Toronto Dominion Bk.),
3.55%, VRDN........................ $ 6,000,000
5,000 District of Columbia Hsg. Fin.
Agy. Mortgage RB, Ser. 1996 C,
(Invest. Agreement: Trinity
Funding Corp.),
3.90%, 12/1/97..................... 5,000,000
59,820,000
FLORIDA -- 1.2%
3,500 Escambia Cnty. Indl. Dev. RB,
Daws Manufacturing Co., Inc.,
(LOC: Amsouth Bk., Birmingham),
3.50%, VRDN........................ 3,500,000
1,010 Florida COP, Consolidated
Equipment Fin. Prog.,
6.05%, 5/15/97..................... 1,014,512
2,800 Orange Cnty. Hsg. Fin. Auth.
MHRB, Oakwood, Ser. E, (LOC:
Fleet Bk., N.A.),
4.15%, 10/1/97..................... 2,800,000
1,005 Palm Beach Cnty. Hsg. RB,
Meridian Hsg., Ser. 1985, (LOC:
Bk. of California, N.A.),
4.21%, VRDN........................ 1,005,000
5,875 Palm Beach Cnty. School Brd.,
MSTR Ser. 1996B, (LIQ: Norwest
Bk., MN & Ins. by AMBAC),
3.50%, VRDN........................ 5,875,000
14,194,512
GEORGIA -- 1.2%
1,000 Albany Dougherty Cnty. Hosp.
RB, Ser. 1984A, (Gtd. By Merck
& Co.),
3.80%, VRDN........................ 1,000,000
5,000 Albany Dougherty Payroll, (Gtd.
By Merck & Co.),
3.55%, VRDN........................ 5,000,000
6,000 Dev. Auth. of Polk Cnty. RB,
Kimoto Tech. Inc., Ser. 1985,
(LOC: Indl. Bk. of Japan, Ltd.),
3.75%, VRDN........................ 6,000,000
2,200 Hsg. Auth. of Columbus MHRB
Ref., Quail Ridge, Ser. 1988,
(LOC: Columbus Bk. & Tr. Co.),
3.70%, VRDN........................ 2,200,000
14,200,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
ILLINOIS -- 10.8%
$ 9,670 City of Aurora MHRB, Fox Valley
Vlg. Apts, Ser. 1993, (LOC:
Sumitomo Bk., Ltd.),
3.65% VRDN......................... $ 9,670,000
2,900 City of Chicago GO Bds., MSTR
SAK-13, Ser. 1984, (LIQ:
Societe Generale & Ins. by
AMBAC),
3.55%, VRDN........................ 2,900,000
1,000 City of Chicago, Cook Cnty.
RB, CSX Beckett Aviation, Ser.
1984, (LOC: Barclay's Bk. PLC),
3.54%, 3/14/97..................... 1,000,000
29,000 City of Oakbrook Terrace
Multifamily Hsg. Mtg. RB,
Renaissance, Ser. 1985A, (LOC:
Bayerische Landesbank,
Girozentrale),
4.90%, 11/3/97..................... 29,000,000
4,000 City of Peoria Solid Waste
Disposal RB, PMP Fermentation
Products, Inc., Ser. 1996,
(LOC: Sanwa Bk., Ltd.),
3.75% VRDN......................... 4,000,000
5,900 City of West Chicago IDRB,
Acme Printing Inc., Ser. 1989,
(LOC: Bk. of Tokyo, Ltd.),
3.925%, VRDN....................... 5,900,000
3,400 Illinois Dev. Fin. Auth. EDRB,
MTI Corp., (LOC: Indl. Bk. of
Japan, Ltd.),
4.05%, VRDN........................ 3,400,000
3,040 Illinois Dev. Fin. Auth. IDRB,
Uhlich Children's Home, (LOC:
American Natl. Bk. & Tr.,
Chicago),
3.60%, VRDN........................ 3,040,000
1,200 Illinois Dev. Fin. Auth. PCRB,
Diamond Star Motor, (LOC: Bk.
of Tokyo),
3.55%, VRDN........................ 1,200,000
Illinois Dev. Fin. Auth. RB,
Gen. Accident Ins. Co., Ser.
1985 ARB, (Gtd. by Gen.
Accident Ins. Co. of America):
6,800 3.70%, 9/1/97.................... 6,800,000
6,800 3.80%, 3/1/97.................... 6,800,000
</TABLE>
25
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
ILLINOIS -- CONTINUED
<C> <S> <C>
$ 8,705 LaSalle Natl. Bk. Leasetops
Trs., Ser. 1995A, (LOC: LaSalle
Natl. Bk.),**
3.50%, VRDN........................ $ 8,705,128
16,640 Vlg. of Hazel Crest Retirement
Ctr. RB, Waterford Estates,
Ser. 1992A, (LOC: Sumitomo Bk.),
3.65%, VRDN........................ 16,640,000
10,000 Vlg. of Schaumburg MFHR,
Treehouse II Apt., Ser. 1989,
(LOC: Sumitomo Bk.),
3.65%, VRDN........................ 10,000,000
2,000 Vlg. of Skokie EDRB, Skokie
Fashion Square Assn., Ser.
1984, (LOC: LaSalle Natl. Bk.),
3.625%, VRDN....................... 2,000,000
15,210 Vlg. of Vernon Hills MFHR,
Hawthorn Lakes, Ser. 1991,
(LIQ: Fuji Bk., Ltd. & Ins. by
FSA), 3.80%, VRDN.................. 15,210,000
126,265,128
INDIANA -- 2.5%
6,500 Avilla Economic Development
RB, Pent Assemblies Inc., Ser.
1996, (LOC: Fort Wayne Natl. Bk.),
4.30%, 8/1/97...................... 6,500,000
15,580 City of Fort Wayne PCRB, Gen.
Mtrs. Corp., (Gtd. by Gen.
Mtrs. Corp.),
3.45%, VRDN........................ 15,580,000
City of New Albany EDRB,
(LOC: PNC Bk.) 3.60%, VRDN:
2,000 Bert R. Huncilman & Son. Inc.,
Ser. 1996A....................... 2,000,000
2,000 Gordon L. & Jeffery
Huncilman-Partner., Ser.
1996B............................ 2,000,000
2,000 City of South Bend MFHR, Maple Lane
Assn., Ser. 1987, (LOC: Society Bk.
of Cleveland),
3.60%, VRDN........................ 2,000,000
925 Decatur Indl. EDA-RB,
Silberline Mfg. Co. Inc., (LOC:
Corestates Capital Mkt., Inc.),
4.20%, 6/1/97...................... 925,000
29,005,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
IOWA -- 0.4%
$ 5,000 City of Council Bluffs RB
Catholic Hlth. Corp., Mercy
Hosp., Council Bluffs, Ser.
1985, (LOC: Fuji Bk., Ltd., LA),
4.00%, 4/1/97...................... $ 5,000,000
KANSAS -- 0.5%
1,000 City of Fredonia RB, Systech
Envir. Corp., Ser. 1989, (LOC:
Banque Natl. de Paris, NY),
3.65%, VRDN........................ 1,000,000
540 City of Manhattan Tax
Increment RRB, Central
Business Distr. Tax Increment
Redev., Ser. 1996A,
4.10%, 12/1/97..................... 540,000
1,800 City of Praire Vlg. MFHR, J.C.
Nichol's Co., Ser. 1985, (Gtd.
by Bankers Life Ins. Co.),
3.90%, VRDN........................ 1,800,000
City of Salina RB (Salina
Central Mall L.P.), Ser. 1984,
(LOC: Boatmen's Bancshares,
Inc.),
3.50%, VRDN:
1,200 Dillard's........................ 1,200,000
1,105 Penny's.......................... 1,105,000
5,645,000
KENTUCKY -- 1.8%
20,300 Cnty. of Ohio PCRB, Big Rivers
Elec. Corp., Ser. 1985, (LOC:
Chemical Bk.),
3.90%, VRDN........................ 20,300,000
856 Jefferson Cnty. IDRB, Belknap
Inc., (LOC: Chemical Bk.),
3.65%, VRDN........................ 856,000
21,156,000
LOUISIANA -- 2.1%
7,000 Ascension Parish RB, Basf
Corp., (Gtd. by BASF Corp.),
3.55%, VRDN........................ 7,000,000
3,050 IDB of the Parish
of Bossier, Inc., H. J. Wilson
Co., Inc., Ser. 1982, (LOC:
First Natl. Bk. of Chicago),
4.00%, 12/1/97..................... 3,050,000
</TABLE>
26
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
LOUISIANA -- CONTINUED
<C> <S> <C>
$15,000 Louisiana HFA
Mortgage RB, Ser. 1996D-4,
4.10%, 9/15/97..................... $ 15,000,000
25,050,000
MARYLAND -- 0.2%
2,035 Community Dev. Admin. State of
Maryland Dept. of Hsg. & Comm.
Dev., Single Family Prog.,
Ser. 1987 Fourth ARB, (LOC:
First Natl. Bk. of Boston),
3.75%, 4/1/97...................... 2,035,000
MASSACHUSETTS -- 0.2%
360 City of Lowell Indl. RB, Oak
Realty Tr., Ser. 1985, (LOC:
First Natl. Bk. of Boston),
4.21%, VRDN........................ 360,000
500 Massachusetts Indl. Finl.
Agy., Copley Pharmac, (LOC:
First Natl. Bk. of Boston),
4.46%, VRDN........................ 500,000
600 Massachusetts Indl. Finl.
Auth. IDRB, Leavy Realty &
Jencoat Metal, Ser. 1994, (LOC:
First Natl. Bk. of Boston),
4.21%, VRDN........................ 600,000
700 Massachusetts Indl. Finl.
Auth. Indl. RB, Portland
Causeway Rlty., Ser. 1988,
(LOC: Citibank, N.A.),
4.21%, VRDN........................ 700,000
2,160,000
MICHIGAN -- 1.4%
2,000 Economic Dev. Corp. of the
Twp. of Van Buren Economic RB,
Daikin Clutch USA, Inc., Ser.
1987, (LOC: Sanwa Bk., Ltd.),
3.75%, VRDN........................ 2,000,000
4,645 Sault. Ste. Marie Tribe Bldg.
Auth. RB, Ser. 1996A ARB, (LOC:
First of Amer. Bk., N.A.),
4.22%, 6/1/97...................... 4,645,000
10,000 School Dist. of the City of
Detroit Wayne Cnty. GO Bds.,
State School Aid Nts., Ser. 1996,
4.50%, 5/1/97...................... 10,008,902
16,653,902
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
MINNESOTA -- 9.1%
$50,000 Capital Investors Tax Exempt
Fund Ltd., Partnership, Ser.
1996-5,
3.60%, VRDN........................ $ 50,000,000
14,905 City of Eden Prairie MFHR,
Park at City West Apt., Ser.
1990, (LOC: Sumitomo Bank),
3.65%, VRDN........................ 14,905,000
2,300 City of Robbinsdale IDR,
Unicare Homes, Inc., Ser.
1984, (LOC: Banque Paribas),
3.60%, VRDN........................ 2,300,000
4,420 Dakota & Washington Cnties.
Hsg. & Redev. Auth. MERLOTS,
Ser. J, (LOC: Corestates Bk.,
N.A.),
4.20%, 3/1/97...................... 4,420,000
4,220 Minneapolis GO (Sports Arena),
MSTR Ser. 1996A, (LIQ: Norwest
Bk.),
3.50%, VRDN........................ 4,220,000
800 Minneapolis/Saint Paul Hsg.
Fin. Brd. RB,
Minneapolis/Saint Paul Fam.
Hsg. Prog., Phase VI, (COLL:
GNMA),
4.20%, 8/1/97...................... 800,000
2,550 Minnesota Agric. & EDRB, Como
Partnership, Ser. 1996, (LOC:
First Bk. Natl. Assn.),
3.65%, VRDN........................ 2,550,000
1,510 Richfield Independent School
Dist. #280, MSTR Ser. 1994P,
(Ins. by FGIC),
3.50%, VRDN........................ 1,510,000
750 Southern Minnesota Muni. Pwr.
Agy. Supply Sys., MSTR Ser.
1996I, (LIQ: Norwest Bk., MN &
Ins. by FGIC),
3.50%, VRDN........................ 750,000
1,000 Spring Lake Park I.S.D. No.
16, MSTR Ser. 1996G, (LIQ:
Norwest Bk., MN & Ins. by
FGIC),
3.50%, VRDN........................ 1,000,000
24,200 St. Louis Park Hlth. Care Fac.
RB Fltg. Tr. Cert., (LIQ:
Norwest Bk., & Ins. by AMBAC),
3.50%, VRDN........................ 24,200,000
106,655,000
</TABLE>
27
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
<C> <S> <C>
MISSISSIPPI -- 0.3%
$ 3,000 Lee Cnty. IDRB, Hunter Douglas
Inc., Ser. 1985, (LOC: Bk. of
Amer. Natl. Tr. & Svg. Assn.),
3.95%, VRDN........................ $ 3,000,000
MISSOURI -- 1.5%
4,000 Boatmens St. Louis Grantor
Tr., Cert. Partn., Ser.
1996A-1, (LOC: Boatmens Natl.
Bk., St. Louis),
3.55%, VRDN........................ 4,000,000
8,375 City of St. Louis TRANS,
4.75%, 6/30/97..................... 8,395,268
4,330 Missouri Dev. Fin. Brd. IDRB,
Cook Composites & Polymers
Co., Ser. 1994, (LOC: Societe
Generale),
3.75%, VRDN........................ 4,330,000
825 School District of North Kansas
GO School Bldg. Bds.,
Missouri Direct Deposit Prog.,
Ser. 1996,
7.00%, 3/1/97...................... 825,000
17,550,268
MONTANA -- 0.1%
710 Butte Silver Bow City & Cnty.,
Copper City Assn., Ser. 1988,
(LOC: Bank of America),
3.55%, VRDN........................ 710,000
NEBRASKA -- 0.4%
4,200 Lancaster Cnty. IDRB, AS
Mid-Amer., Inc., Ser. 1994,
(LOC: Heller Finl., Inc.),
3.85%, VRDN........................ 4,200,000
NEVADA -- 0.4%
4,450 Nevada Housing Division RB,
Oakmont at Reno, (LOC: Banque
Paribas),
3.55%, VRDN........................ 4,450,000
NEW HAMPSHIRE -- 0.1%
1,500 New Hampshire Hsg. Fin. Auth.
MFHR, Nashua-Oxford, Ser.
1990, (Surety Bond: Contl. Cas.
Corp.),
3.50%, VRDN........................ 1,500,000
NEW JERSEY -- 3.2%
15,000 County of Essex TRANS, Ser. A,
4.50%, 9/17/97..................... 15,035,454
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
NEW JERSEY -- CONTINUED
$ 3,000 Jersey City Promissory Notes,
4.00%, 4/3/97...................... $ 3,000,973
4,220 Jersey City Refunding Notes,
4.125%, 1/16/98.................... 4,224,405
10,000 Jersey City TRANS, 4.75%,
9/26/97............................ 10,038,470
2,585 New Jersey EDA-EDRB, Wood
Hollow Assn. L.L.C., (LOC:
Corestates Bk.),
3.55%, VRDN........................ 2,585,000
2,800 Newark Healthcare Fac. RB, New
Community Urban Renewal, Ser.
1995, (COLL: GNMA),
3.40%, VRDN........................ 2,800,000
37,684,302
NEW MEXICO -- 0.5%
4,855 Cnty. of Sandoval MFHR,
Arrowhead Ridge Apt., Ser.
1996, (LIQ: FGIC),
4.65%, 7/1/97...................... 4,855,000
1,000 Rio Arriba Cnty. IDRB,
Franklin Industries, (LOC:
NationsBank),
3.60%, VRDN........................ 1,000,000
5,855,000
NEW YORK -- 3.2%
Battery Park City Auth. Hsg.
RB, Marina Towers Tender
Corp., (LOC: Sumitomo Bk.)
3.90%, VRDN:
8,560 Ser. A........................... 8,560,000
7,765 Ser. B........................... 7,765,000
6,400 City of New Rochelle NY School
Dist. TRANS,
4.25%, 6/30/97..................... 6,404,989
6,000 New York City GO, Ser. 1993B,
(Ins. by FGIC),
3.55%, VRDN........................ 6,000,000
2,500 New York City GO Subser. B5,
(Ins. by MBIA),
3.50%, VRDN........................ 2,500,000
6,000 New York City Mun. Wtr. Fin.
Auth. RB, Ser. 1995A, (Ins by
FGIC),
3.55%, VRDN........................ 6,000,000
37,229,989
</TABLE>
28
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
<C> <S> <C>
NORTH CAROLINA -- 0.6%
$ 3,600 Cabarrus Cnty. Indl. Fac.
PCRB, Oiles America Corp.,
Ser. 1989, (LOC: Indl. Bk. of
Japan, Ltd., NY),
4.05%, VRDN........................ $ 3,600,000
3,000 Guilford Cnty. Indl. Fac. &
Pollution Control Fing. Auth.
RB Sewage Disp., High Pt.
Chem., Ser. 1994, (LOC:
Sumitomo Bk., Ltd., NY),
3.65%, VRDN........................ 3,000,000
570 NCNB Pooled Tax-Empt. Tr. COP, Ser.
1990A,
(LOC: NationsBank of NC),**
4.125%, VRDN....................... 570,000
7,170,000
OHIO -- 1.0%
4,200 Cnty. of Summit IDA-IDRB,
Shin-Etsu Silicones of Amer.
Inc., Ser. 1994, (LOC: Bk of
Tokyo, Ltd. & Mitsubishi Bk.,
Ltd.),
3.70%, VRDN........................ 4,200,000
4,250 Dayton Ohio Airport Impt. Nts.,
4.50%, 3/25/97..................... 4,251,360
3,000 Ohio Hsg. Fin. Agy. MFHR, 10
Wilmington Place, Ser. 1991B,
(LIQ: Fuji Bk., Ltd. & Ins. by
FSA),
3.80%, VRDN........................ 3,000,000
11,451,360
OREGON -- 0.3%
Oregon EDRB Series CLVI,
(LOC: Bk. of California, N.A.)
3.75%, VRDN:
1,960 Pacific Coast Seafoods Co........ 1,960,000
1,210 Pacific Oyster Co................ 1,210,000
3,170,000
PENNSYLVANIA -- 7.9%
2,855 Chester Cnty. IDA Mfg. Fac.
RB, Devault Packing Co., Inc.,
Ser. 1995, (LOC: Meridian Bk.),
3.75%, VRDN........................ 2,855,000
10,000 City of Philadelphia GO Bds.,
Ser 1990, (LOC: Fuji Bk., Ltd.,
NY),
3.50%, 4/7/97...................... 10,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
PENNSYLVANIA -- CONTINUED
$ 500 Elk Cnty. IDA-IDRB Ref.,
Stackpole Corp., Ser. 1989,
(LOC: First Natl. Bk. of
Boston),
4.21%, VRDN........................ $ 500,000
39,865 Emmaus General Auth. RB,
Pennsylvania Variable Rate Ln.
Prog., (Ins by FSA),
3.40%, VRDN........................ 39,865,000
855 Fayette Cnty. Hosp. Auth. RB,
Uniontown Hosp., Ser. 1996,
(Ins. by Connie Lee),
4.25%, 6/15/97..................... 855,337
650 Lawrence Cnty. IDA-PCRB,
Calgon Carbon, Ser. 1983A,
(Gtd. by Merck & Co.),
3.80%, VRDN........................ 650,000
1,990 Monroe Cnty. IDA-RB, United
Steel, Ser. A, (LOC: Corestates
Bk., N.A.),
3.75%, VRDN........................ 1,990,000
1,500 Montgomery Cnty. IDA-RB,
Laneko Engineering Co., Ser.
1995, (LOC: Meridian Bk.),
3.75%, VRDN........................ 1,500,000
3,200 Pennsylvania Higher Ed. Fac.
Auth. RB, Carnegie Mellon
Univ., Ser. 1995D,
3.45%, VRDN........................ 3,200,000
1,235 Pennsylvania Econ. Dev. Fin.
Auth. RB, C.F. Martin & Co.,
Inc., Ser. H, (LOC: Meridian
Bk.),
3.75%, VRDN........................ 1,235,000
3,880 Pennsylvania Hsg. Fin. Agy.
MERLOTS, Ser. I, (LIQ:
Corestates Bk., N.A.),
4.125%, 4/1/97..................... 3,880,000
8,100 Philadelphia Hosp. & Higher
Ed. Fac. Auth. RB., Children
Hosp., Ser. A, (SPA: Morgan
Guaranty, NY),
3.45%, VRDN........................ 8,100,000
920 Reading School Dist. GO, Ser.
1997, 3.95%, 1/15/98............... 920,736
9,400 School Dist. of Philadelphia
TRANS, Ser. 1996,
4.50%, 6/30/97..................... 9,415,002
</TABLE>
29
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
PENNSYLVANIA -- CONTINUED
<C> <S> <C>
$ 2,000 Schuylkill Cnty. IDA-RB,
Craftex Mills, Inc., (LOC:
Corestates Bk.),
3.75%, 3/5/97...................... $ 2,000,000
2,010 West Cornwall Twp. Muni. Auth.
RB, Lebanon Vly. Brethren
Home, Ser. 1995, (LOC: Meridian
Bk.),
3.50%, VRDN........................ 2,010,000
3,040 Westmoreland Cnty. IDA-IDRB,
White Consolidated Ind., Inc.,
(LOC: Chemical Bk.),
3.96%, 6/1/97...................... 3,041,936
92,018,011
RHODE ISLAND -- 0.3%
3,000 Rhode Island Solid Waste Mgmt.
Corp. Landfill Lease Nts.,
Ser. 1995A,
4.50%, 8/1/97...................... 3,004,225
SOUTH CAROLINA -- 0.9%
3,500 Darlington Cnty. IDA-IDRB,
B.F. Shaw, Inc., Ser. 1995,
(LOC: Mercantile Bk. of St.
Louis N.A.),
3.90%, VRDN........................ 3,500,000
2,225 Lexington Cnty. RB, Charter
Rivers Hosp., (LOC: Bk. of
Tokyo),
3.50%, VRDN........................ 2,225,000
250 South Carolina Jobs EDA Hosp.
Facs. RB, Beloit Corp., (LOC:
Cr. Coml. de France),
3.60%, VRDN........................ 250,000
South Carolina Jobs EDA-EDRB,
(LOC: Cr. Coml. de France):
600 Ridge Pallets, Ser. B
3.70%............................ 600,000
2,700 Roller Bearing Co., Ser. 1994A,
4.10%............................ 2,700,000
750 Tuttle Co., Inc., Ser. A,
3.70%............................ 750,000
10,025,000
SOUTH DAKOTA -- 0.5%
5,285 Rapid City EDRB, Civic
Center Assoc., (LOC: Bayerische
Vereinsbank AG),
3.65%, VRDN........................ 5,285,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
TENNESSEE -- 3.2%
$ 1,000 IDB of Blount Cnty. IDRB,
Advance Crystal, Inc., Ser.
1988, (LOC: Indl. Bk. of Japan,
Ltd.),
3.75%, VRDN........................ $ 1,000,000
IDB of Met. Govt. of
Nashville, Ser. 1989, (LOC:
Sumitomo Bk.),
3.65%, VRDN:
8,995 Beechwood........................ 8,995,000
4,680 Belle Valley..................... 4,680,000
6,710 Graybrook Apts................... 6,710,000
3,200 IDB of the City Chattanooga
RRB, Radisson Read House, Ser.
1995, (LOC: Heller Finl. Inc.),
4.15%, VRDN........................ 3,200,000
5,000 IDB of the City of Morristown
IDRB, Camvac Intl., Inc., Ser.
1983, (LOC: ABN-Amro Bk.),
3.625%, VRDN....................... 5,000,000
500 Monroe Cnty. Indl. Dev. Brd.
IDRB, Amer. Transit Corp.,
(LOC: Bk. of New York),
3.60%, VRDN........................ 500,000
3,405 Shelby Cnty. Hlth. Edl. & Hsg.
Fac. Brd., Methodist Hlth.
Sys., Ser. C, (LIQ: Sanwa Bk.,
Ltd & Ins. by MBIA),
4.05%, 8/1/97...................... 3,405,000
4,285 Smyrna Hsg. Assn. MFHR,
Imperial Gardens Apts., Ser.
1989, (LOC: Sumitomo Bk.),
3.65%, VRDN........................ 4,285,000
37,775,000
TEXAS -- 5.5%
2,500 Brazos River Harbor Navigation
Dist. RB, BASF Corp., (Gtd. by
Basf Corp.),
3.55%, VRDN........................ 2,500,000
5,985 Galveston Hsg. Fin. Corp. MFHR
Ref., Vlg. by the Sea Apt.,
Ser. 1993, (LOC: Sumitomo Bk.),
3.75%, VRDN........................ 5,985,000
3,400 Gulf Coast Waste Disposal
Auth. RB, Amoco Oil Co., (Gtd.
by Amoco Oil),
3.55%, VRDN........................ 3,400,000
</TABLE>
30
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
TEXAS -- CONTINUED
<C> <S> <C>
$ 2,600 Harris Cnty. Hsg. Fin. Corp.,
MFHR, Methodist Hosp., Ser.
1994, (LOC: Morgan Guaranty,
NY),
3.45%, VRDN........................ $ 2,600,000
7,000 Matagorda Cnty. Nav. Dist. #1
CDC Certificates, Ser. 97D,
(LIQ: Caisse Depots & Ins. by
FGIC),
3.50%, VRDN........................ 7,000,000
7,905 NCNB Pooled Tax-Empt. Tr. COP, Ser.
1990B, (LOC: NationsBank of Texas),
4.125%, VRDN....................... 7,905,000
4,000 Port of Corpus Christi Auth.
Nueces Cnty. RRB, Union
Pacific Corp., Ser. 1989 TECP,
(Gtd. by Union Pacific Corp.),
3.85%, 5/21/97..................... 4,000,000
4,800 Southwest Higher Ed. Auth. RB,
Southern Methodist Univ., (LOC:
Morgan Guaranty, NY),
3.45%, VRDN........................ 4,800,000
4,380 Tarrant Cnty. Hsg. Fin. Corp.
MFHR Ref., Lincoln Meadows,
Ser. 1988 ARB, (Surety: Contl.
Cas. Corp.),
4.10%, 12/1/97..................... 4,379,636
15,000 Texas TRANS, 4.75%, 8/29/97........ 15,055,196
6,000 Tyler Health Fac. Dev. Corp.
RB, East Texas Med. Ctr. Regl.
Hlth., Ser. 1993C TECP, (LOC:
Banque Paribas),
3.50%, 3/12/97..................... 6,000,000
63,624,832
UTAH -- 4.8%
2,800 Summit Cnty. IDRB, Hornes'
Kimball Junction L.P., Ser.
1985, (LOC: West One Tr.),
3.80%, VRDN........................ 2,800,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
UTAH -- CONTINUED
Tooele Cnty. Hazardous Waste
Treatment RB, Union Pacific
Corp., Ser. A TECP, (Gtd. by
Union Pacific Corp.):
$ 7,000 3.80%, 3/10/97................... $ 7,000,000
6,290 3.80%, 4/10/97................... 6,290,000
10,000 3.80%, 4/24/97................... 10,000,000
15,400 3.80%, 4/28/97................... 15,400,000
15,000 3.85%, 4/7/97.................... 15,000,000
56,490,000
VERMONT -- 0.2%
2,000 Burlington Wastwater Revenue
TRANS,
5.60%, 1/30/98..................... 2,028,545
VIRGINIA -- 0.9%
2,900 Henrico Cnty. IDA RB,
(LOC: Tokai Bk., Ltd.),
3.95%, VRDN........................ 2,900,000
3,000 Richmond Cnty. Indl. Fac.
PCRB, Cogentrix of Richmond,
(LOC: Banque Paribas),
3.90%, VRDN........................ 3,000,000
3,500 Richmond IDA-RB, Cogentrix of
Richmond, (LOC: Banque Paribas),
3.90%, VRDN........................ 3,500,000
1,000 Rockingham Cnty. Indl. Dev.
PCRB, Merck & Co., Inc., Ser.
1983A, (Gtd. by Merck & Co.),
3.55%, VRDN........................ 1,000,000
10,400,000
WASHINGTON -- 1.8%
2,200 Klickitat Cnty. Pub. Corp. RB,
Mercer Ranches, Ser. 1996,
(LOC: U.S. Bk. of Washington,
N.A.),
3.80%, VRDN........................ 2,200,000
2,000 Pierce Cnty. Econ. Dev. Corp.,
McFarland Cascade, (LOC: U.S.
Bk. of Washington, N.A.),
3.80%, VRDN........................ 2,000,000
</TABLE>
31
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
WASHINGTON -- CONTINUED
<C> <S> <C>
$ 410 Pierce Cnty. Econ. Dev. Corp.
IDRB, Pickering Industries,
Ser. 1990, (LOC: Indl. Bk. of
Japan, Ltd.),
3.50%, VRDN........................ $ 410,000
Pilchuck Dev. Pub. Corp. IDRB,
(LOC: Bk. of California, N.A.),
VRDN:
1,455 Canyon Park Assn., 3.65%,........ 1,455,000
1,047 Hillside Assn., 3.65%,........... 1,047,000
1,312 Omni Assn., 3.65%,............... 1,312,000
8,450 Romac Industries, Inc., Ser.
1995,
3.70%,........................... 8,450,000
Washington Pub. Pwr. Sup. Sys.
Nuclear RRB No. 1:
1,000 7.10%, 7/1/97.................... 1,010,070
1,635 Ser. A, 4.50%, 7/1/97............ 1,637,631
1,525 Washington Pub. Pwr. Sup. Sys.
Nuclear RRB No. 2, Ser. A,
4.50%, 7/1/97...................... 1,527,449
21,049,150
WISCONSIN -- 2.3%
27,230 Southeast Pro. Baseball Park
Dist. Sales Tax RB, Ser. 1996,
(Invest. Agreement: Bayrland),
4.10%, 12/15/97.................... 27,230,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
OTHER -- 5.6%
Puttable Floating Opt.
Tax-Empt., (LIQ: Credit
Suisse),
3.55%, VRDN:
$51,780 IBM Grantor Trust, Ser.
1996C............................ $ 51,780,000
10,370 KOCH Fin. Corp................... 10,370,000
3,340 Puttable Floating Opt.
Tax-Empt. PPT-5W, (LIQ: Credit
Suisse),
3.55%, VRDN........................ 3,340,000
65,490,000
TOTAL SHORT-TERM MUNICIPAL
SECURITIES
(COST $1,168,720,601).............. 1,168,720,601
<CAPTION>
SHARES
(000)
<C> <S> <C>
MUTUAL FUND SHARES -- 0.0%
(COST $300,000)
300 Federated Tax-Free Obligation
Fund............................. 300,000
TOTAL INVESTMENTS --
(COST $1,169,020,601).... 100.2 % 1,169,020,601
OTHER ASSETS AND
LIABILITIES, NET......... (0.2) (2,452,126)
NET ASSETS --.............. 100.0 % $1,166,568,475
</TABLE>
32
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
Summary of Abbreviations:
ACES -- Adjustable Convertible Extendable Securities
AMBAC -- American Municipal Bond Assurance Corp.
ARB -- Adjustable Rate Bonds
COLL -- Collateral
COP -- Certificates of Participation
EDA -- Economic Development Authority
EDRB -- Economic Development Revenue Bond
FGIC -- Financial Guaranty Insurance Co.
FSA -- Financial Security Assurance Inc.
GNMA -- Government National Mortgage Association
GO -- General Obligations
HFA -- Housing Finance Agency
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bond
LIQ -- Liquidity Provider
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
MERLOTS -- Municipal Exempt Receipts Liquidity Option
Tenders
MFHR -- Multifamily Housing Revenue
MSTR -- Municipal Securities Trust Receipt
PCRB -- Pollution Control Revenue Bond
RB -- Revenue Bonds
RRB -- Refunding Revenue Bonds
SLMA -- Student Loan Marketing Association
SPA -- Securities Purchase Agreement
TECP -- Tax Exempt Commercial Paper
TRANS -- Tax Revenue Anticipation Notes
VRDN -- Variable Rate Demand Notes
YTM -- Yield To Maturity
Adjustable Rate Bonds are putable back to the issuer or other
parties not affiliated with the issuer at par on the interest reset
dates. Interest rates are determined and set by the issuer
quarterly, semi-annually or annually depending upon the terms of the
security. Interest rates presented for these securities are those in
effect at February 28, 1997. These securities represent 2% of
total investments at February 28, 1997.
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 28,
1997. These securities represent 66% of total investments at
February 28, 1996.
Certain obligations held in the portfolio have credit
enhancements or liquidity features that may, under certain
circumstances, provide for repayment of principal and interest on the
obligation upon demand date, interest rate reset date or final
maturity. These enhancements include: letters of credit; liquidity
guarantees; standby bond purchase agreements; tender option
purchase agreements; and third party insurance (i.e. AMBAC,
FGIC and MBIA). Adjustable rate bonds and variable rate
demand notes held in the portfolio may be considered derivative
securities within 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 securities which are restricted in resale to
qualified institutions and are considered liquid.
See accompanying notes to financial statements.
33
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $1,169,020,601)....................................................... $1,169,020,601
Cash........................................................................................................ 394,307
Interest receivable......................................................................................... 7,498,626
Receivable for Fund shares sold............................................................................. 544,063
Prepaid expenses and other assets........................................................................... 55,690
Total assets.......................................................................................... 1,177,513,287
LIABILITIES:
Payable for investments securities purchased................................................................ 8,025,581
Dividends payable........................................................................................... 1,488,403
Accrued advisory fee........................................................................................ 418,469
Payable for Fund shares redeemed............................................................................ 331,387
Distribution fee payable.................................................................................... 326,010
Accrued expenses............................................................................................ 354,962
Total liabilities..................................................................................... 10,944,812
NET ASSETS..................................................................................................... $1,166,568,475
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................. $1,166,826,346
Accumulated net realized loss on investment transactions.................................................... (257,871)
Net assets............................................................................................ $1,166,568,475
</TABLE>
<TABLE>
<S> <C>
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($689,576,557)(689,695,276 shares of beneficial interest outstanding)..................................... $1.00
Class Y Shares ($476,991,918)(477,092,273 shares of beneficial interest outstanding)..................................... $1.00
</TABLE>
See accompanying notes to financial statements.
34
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest....................................................................................... $22,596,170
EXPENSES:
Advisory fee................................................................................... $2,892,482
Distribution fee -- Class A Shares............................................................. 965,960
Custodian fee.................................................................................. 135,426
Transfer agent fee............................................................................. 91,314
Reports and notices to shareholders............................................................ 53,351
Registration and filing fees................................................................... 37,198
Interest expense............................................................................... 28,513
Professional fees.............................................................................. 23,109
Insurance...................................................................................... 9,341
Trustees' fees and expenses.................................................................... 7,250
Other.......................................................................................... 11,094
4,255,038
Less advisory fee waiver....................................................................... (283,470)
Net expenses................................................................................ 3,971,568
Net investment income............................................................................. 18,624,602
Net realized gain on investments.................................................................. 9
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................................. $18,624,611
</TABLE>
See accompanying notes to financial statements.
35
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................................ $ 18,624,602 $ 36,638,019
Net realized gain (loss) on investment transactions.................................. 9 (6,227)
Net increase in net assets resulting from operations.............................. 18,624,611 36,631,792
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares....................................................................... (9,787,172) (19,837,670)
Class Y Shares....................................................................... (8,837,430) (16,800,349)
Total distributions to shareholders from net investment income.................... (18,624,602) (36,638,019)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold............................................................ 1,266,527,489 2,572,408,736
Proceeds from shares issued from aquisition of FFB Tax-Free Money Market Fund........ -- 103,129,021
Proceeds from reinvestment of distributions.......................................... 8,133,007 16,202,992
Payments for shares redeemed......................................................... (1,385,441,253) (2,390,799,129)
Net increase (decrease) resulting from Fund share transactions................. (110,780,757) 300,941,620
Net increase (decrease) in net assets.......................................... (110,780,748) 300,935,393
NET ASSETS:
Beginning of period.................................................................. 1,277,349,223 976,413,830
End of period........................................................................ $1,166,568,475 $ 1,277,349,223
</TABLE>
See accompanying notes to financial statements.
36
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
SIX MONTHS JANUARY 5, SIX MONTHS
ENDED 1995* ENDED
FEBRUARY 28, YEAR ENDED THROUGH FEBRUARY 28,
1997 AUGUST 31, AUGUST 31, 1997 YEAR ENDED AUGUST 31,
(UNAUDITED) 1996 1995 (UNAUDITED) 1996 1995 1994 1993
<S> <C> <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 $1.00
Net investment income.............. 0.01 0.03 0.02 0.02 0.03 0.04 0.02 0.03
Less distributions to shareholders
from net investment income....... (0.01) (0.03) (0.02) (0.02) (0.03) (0.04) (0.02) (0.03)
Net asset value, end of period..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+...................... 1.5% 3.2% 2.2% 1.7% 3.5% 3.6% 2.5% 2.6%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted).................. $689,577 $660,516 $ 554,924 $476,992 $ 616,833 $421,490 $402,419 $401,376
Ratios to average net assets:
Expenses**....................... .82%++ .79% .78%++ .52%++ .49% .50% .34% .34%
Net investment income**.......... 3.06%++ 3.14% 3.28%++ 3.37%++ 3.44% 3.53% 2.47% 2.58%
<CAPTION>
CLASS Y SHARES
YEAR ENDED AUGUST 31, 1992
<S> <C>
PER SHARE DATA:
Net asset value, beginning of
period........................... $1.00
Net investment income.............. 0.04
Less distributions to shareholders
from net investment income....... (0.04)
Net asset value, end of period..... $1.00
TOTAL RETURN+...................... 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted).................. $416,924
Ratios to average net assets:
Expenses**....................... .32%
Net investment income**.......... 3.72%
</TABLE>
# The Fund changed its fiscal year end from February 28 to August 31.
+ Total return is calculated on the net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
* Commencement of class operations.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the 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 28, YEAR ENDED THROUGH FEBRUARY 28,
1997 AUGUST 31, AUGUST 31, 1997 YEAR ENDED AUGUST 31,
(UNAUDITED) 1996 1995 (UNAUDITED) 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses...................................... .87%++ .90% .90%++ .56%++ .60% .63% .64% .63%
Net investment income......................... 3.01%++ 3.03% 3.16%++ 3.32%++ 3.33% 3.40% 2.17% 2.29%
<CAPTION>
CLASS Y SHARES
YEAR ENDED AUGUST 31, 1992
<S> <C>
Expenses...................................... .63%
Net investment income......................... 3.41%
</TABLE>
See accompanying notes to financial statements.
37
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of eagle)
A REPORT FROM YOUR
PORTFOLIO MANAGER
KELLIE ALLEN
We are pleased to present the Semiannual Report for the
Evergreen Treasury Money Market Fund for the six-month period
ended February 28, 1997. The total return for the Fund's Class A
shares for the six months was 2.34%*. This return was ahead of
the Lipper average of 97 U.S. Treasury Money Market funds
tracked by Lipper Analytical Services during that period**. The
seven-day current and effective yields as of February 28, for
the Fund's Class A shares were 4.61% and 4.72%, respectively.
The past six months have proven to be a roller coaster ride [Photo]
for fixed income investors. The bond market rallied throughout
the second half of calendar 1996 as interest rates declined, but
was stifled as rates jumped in December then steadily increased
throughout the first two months of 1997. The yield on the benchmark thirty-year
treasury bond began the six-month period at 7.1%, declined, then rebounded and
settled at 6.8% on February 28. Short-term rates also fluctuated rather
dramatically during the six-month period. The yield on the three-month treasury
bill began the fiscal year at 5.3%, declined steadily through mid-December, then
climbed sharply to finish at 5.2% on February 28.
In the final week of February, Federal Reserve Chairman, Alan Greenspan,
rocked the financial markets in an appearance before Congress. Mr. Greenspan,
while acknowledging that inflation remains in check, suggested that the best
course of action may be to raise rates as a preventative measure to curb
inflation before it actually appears. The Federal Reserve Board had neither
raised nor lowered interest rates in well over a year. As of February 28, the
yield on two-year treasury notes stood at 6.09%, 84 basis points above the Fed
Funds rate.
The Fund invests exclusively in short-term U.S. Government obligations which
are fully guaranteed as to principal and interest by the U.S. Government. Within
the Fund, we continue to maintain a maturity at the longer end of our normal
range in an attempt to lock in higher, more attractive rates. The Fund also
utilizes reverse repurchase agreements to help enhance the portfolio's return.
This process, relatively risk-free, provides the Fund an opportunity gain a
couple of basis points as a reward, which can help it to outperform similar
funds. The Fund's longer-term performance continues to be impressive as its
five-year average annual compound return ended March 31, 1997, ranked number one
among the 49 Treasury money market funds tracked by Lipper during that time**.
The Fund's one-year total return ended March 31, ranked number four out of the
96 Treasury money market funds tracked by Lipper during that time.
Thank you for your investment in the Evergreen Treasury Money Market Fund.
FIGURES REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS.
* PERFORMANCE FIGURES INCLUDE THE REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS, IF ANY.
DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED TO VOLUNTARILY WAIVE A
PORTION OF ITS ADVISORY FEE. HAD FEE NOT BEEN WAIVED, PERFORMANCE AND YIELDS
WOULD HAVE BEEN LOWER. FEE WAIVER MAY BE REVISED AT ANY TIME.
THE FUND MAY INCUR 12B-1 EXPENSES UP TO AN ANNUAL MAXIMUM OF .35 OF 1% OF ITS
AVERAGE DAILY NET ASSETS OF ITS CLASS A SHARES. FOR THE FORESEEABLE FUTURE,
HOWEVER, MANAGEMENT INTENDS TO LIMIT SUCH PAYMENTS TO .30 OF 1% OF THE FUND'S
DAILY NET ASSETS OF ITS CLASS A SHARES.
** SOURCE: LANA (LIPPER ANALYTICAL NEW APPLICATIONS) LIPPER ANALYTICAL SERVICES
INC., IS AN INDEPENDENT MUTUAL FUNDS PERFORMANCE MONITOR. LIPPER AVERAGE DOES
NOT INCLUDE SALES CHARGES, AND IF INCLUDED PERFORMANCE MAY BE LOWER AND THE
FUND'S RANKINGS MAY BE DIFFERENT.
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 PER SHARE. YIELDS FLUCTUATE.
38
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of eagle)
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
U.S. TREASURY BILLS -- 3.4%
(COST $99,358,750)
$100,000 5.130%, 4/17/97.................... $ 99,358,750
U.S. TREASURY NOTES -- 27.9%
25,000 6.125%, 3/31/97.................... 25,120,850
50,000 6.875%, 4/30/97++.................. 50,353,066
50,000 6.500%, 4/30/97++.................. 50,055,643
70,000 8.500%, 5/15/97++.................. 70,365,276
150,000 6.375%, 6/30/97++.................. 150,532,859
110,000 6.000%, 8/31/97.................... 109,999,538
135,000 5.750%, 9/30/97.................... 135,140,293
50,000 5.750%, 10/31/97................... 50,037,723
175,000 5.250% 12/31/97.................... 174,566,568
TOTAL U.S. TREASURY NOTES
(COST $816,171,816)................ 816,171,816
REPURCHASE AGREEMENTS* -- 80.4%
120,000 Barclays Bank, PLC,
5.350%, dated 2/28/97, due 3/03/97
(1)................................ 120,000,000
120,000 Daiwa Securities Co., Ltd.,
5.360%, dated 2/28/97, due 3/03/97
(2)................................ 120,000,000
150,000 Dean Witter Reynolds, Inc.,
5.350%, dated 2/24/97, due 3/03/97
(3)................................ 150,000,000
120,000 Donaldson, Lufkin & Jenrette
Securities Corp.,
5.350%, dated 2/28/97, due 3/03/97
(4)................................ 120,000,000
100,000 Dresdner Bank AG,
5.350%, dated 2/24/97, due 3/03/97
(5)................................ 100,000,000
102,062 Dresdner Bank AG,
5.250%, dated 2/03/97, due 4/30/97
(6)**+............................. 102,062,500
151,500 Dresdner Bank AG,
5.330%, dated 2/04/97, due 6/30/97
(7)**+............................. 151,500,000
120,000 First Boston Corp.,
5.350%, dated 2/28/97, due 3/03/97
(8)................................ 120,000,000
120,000 Goldman, Sachs Group L.P.,
5.350%, dated 2/28/97, due 3/03/97
(9)................................ 120,000,000
120,000 HSBC Securities, Inc.,
5.350%, dated 2/28/97, due 3/3/97
(10)............................... 120,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
$130,000 Lehman Brothers Inc.,
5.370%, dated 2/28/97, due 3/03/97
(11)............................... $ 130,000,000
120,000 Merrill Lynch, Pierce, Fenner
& Smith,
5.350%, dated 2/28/97, due 3/03/97
(12)............................... 120,000,000
120,000 Morgan Guaranty Trust Co.
of New York,
5.375%, dated 2/28/97, due 3/03/97
(13)............................... 120,000,000
120,000 Morgan Stanley Co.,
5.300%, dated 2/28/97, due 3/03/97
(14)............................... 120,000,000
50,000 NationsBank, Charlotte, NC,
5.350%, dated 2/28/97, due 3/03/97
(15)............................... 50,000,000
200,000 Nikko Securities Co.
International, Inc.,
5.360%, dated 2/24/97, due 3/03/97
(16)............................... 200,000,000
150,000 Smith Barney Shearson, Inc.,
5.280%, dated 2/20/97, due 3/06/97
(17)............................... 150,000,000
72,100 Smith Barney Shearson, Inc.,
5.330%, dated 2/20/97, due 5/15/97
(18)**+............................ 72,100,000
50,000 State Street Bank & Trust Co.,
5.100%, dated 2/28/97, due 3/03/97
(19)............................... 50,000,000
120,000 Union Bank Switzerland,
5.370%, dated 2/28/97, due 3/03/97
(20)............................... 120,000,000
TOTAL REPURCHASE AGREEMENTS
(COST $2,355,662,500).............. 2,355,662,500
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
<C> <S> <C> <C>
MUTUAL FUND SHARES -- 2.7%
(COST $79,540,717)
79,540 Fidelity U.S. Treasury, Inc.
Portfolio................... 79,540,717
TOTAL INVESTMENTS --
(COST $3,350,733,783)..... 114.4% 3,350,733,783
OTHER ASSETS AND
LIABILITIES -- NET........ (14.4) (422,364,779)
NET ASSETS.................. 100.0% $2,928,369,004
</TABLE>
39
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of eagle)
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 28, 1997
(UNAUDITED)
* Collateralized by:
(1) $35,364,000 U.S. Treasury Notes, 6.00% to 6.50%, 12/31/97 to 5/15/05; value
including accrued interest -- $35,858,189 and $78,736,000 U.S. Treasury
Bonds, 6.625% to 6.875%, 8/15/25 to 2/15/27; value including accrued
interest -- $77,342,181 and $39,800,000 U.S. Treasury Strips, 5/15/12 to
8/15/24; value including accrued interest -- $9,200,121.
(2) $104,613,000 U.S. Treasury Bonds, 11/15/08 to 11/15/22; value including
accrued interest -- $122,400,222.
(3) $14,513,000 U.S. Treasury Notes, 5.875% to 8.875%, 7/31/97 to 11/15/01;
value including accrued interest -- $15,532,303 and $40,149,000 U.S.
Treasury Bills, 7/3/97 to 1/8/98; value including accrued
interest -- $38,906,229 and $341,077,033 U.S. Treasury Strips, 5/15/97 to
8/15/26; value including accrued interest -- $98,561,942.
(4) $8,010,000 U.S. Treasury Notes, 5.75%, 8/15/03; value including accrued
interest -- $7,724,915 and $282,041,000 U.S. Treasury Strips, 5/15/97 to
2/15/25; value including accrued interest -- $114,675,597.
(5) $500,000 U.S. Treasury Notes, 6.875%, 7/3/99; value including accrued
interest -- $510,629 and $103,014,000 U.S. Treasury Bills, 3/6/97 to
6/26/97; value including accrued interest -- $101,489,538.
(6) $1,715,000 U.S. Treasury Notes, 5.25%, 12/31/97; value including accrued
interest -- $1,724,856 and $107,037,087 GNMA, 5.50% to 6.50%; value
including accrued interest -- $102,330,270.
(7) $152,875,000 U.S. Treasury Notes, 5.25% to 6.625%, 12/31/97 to 6/30/01;
value including accrued interest -- $154,741,951.
(8) $123,190,000 U.S. Treasury Notes, 2/28/98 to 8/15/03; value including
accrued interest -- $122,646,400.
(9) $137,751,000 U.S. Treasury Bills, 6.00%, 02/15/26; value including accrued
interest -- $122,400,124.
(10) $127,303,835 GNMA, 5.50% to 7.125%; value including
interest -- $122,402,557.
(11) $249,009,000 U.S. Treasury Strips, 5/15/05 to 11/15/08; value including
accrued interest -- $132,602,012.
(12) $60,486,000 U.S. Treasury Bills, 10.375% to 14.00%, 11/15/11 to 8/15/13;
value including accrued interest -- $91,040,470 and $205,105,000 U.S.
Treasury Strips, 6.00% to 8.75%, 8/15/20 to 8/15/26; value including
accrued interest -- $31,364,202.
(13) $123,139,000 U.S. Treasury Notes, 6.25%, 2/28/02; value including accrued
interest -- $122,400,659.
(14) $108,632,000 U.S. Treasury Bills, 8.125%, 8/15/19; value including accrued
interest -- $123,326,067.
(15) $51,000,000 U.S. Treasury Notes, 6.00%, 9/30/98; value including accrued
interest -- $51,023,904.
(16) $200,645,000 U.S. Treasury Notes, 5.50% to 8.75%, 6/30/97 to 12/31/00;
value including accrued interest -- $204,341,172.
(17) & (18) $226,089,367 GNMA, 4.50% to 8.50%, 1/1/00 to 2/20/27; value
including accrued interest -- $220,209,709 and $21,771,000 U.S. Treasury
Strips, 11/15/14; value including accrued interest -- $6,339,998.
(19) $50,000,000 U.S. Treasury Bills, 7.50%, 11/15/16; value including accrued
interest -- $49,989,386.
(20) $193,243,000 U.S. Treasury Strips, 5/15/02 to 5/15/05; value including
accrued interest -- $122,402,760.
** Repurchase agreements are puttable back to the issuer on no more than seven
calendar days notice given by the Fund.
+ Represents investment of cash collateral received from securities on loan.
++ Securities on loan (See Note 3).
See accompanying notes to financial statements.
40
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of eagle)
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in repurchase agreements........................................................................ $2,355,662,500
Investments in securities................................................................................... 995,071,283
Investments at value (identified cost $3,350,733,783).................................................... 3,350,733,783
Cash........................................................................................................ 28
Interest receivable......................................................................................... 14,047,611
Receivable for Fund shares sold............................................................................. 262,629
Prepaid expenses and other assets........................................................................... 79,363
Total assets.......................................................................................... 3,365,123,414
LIABILITIES:
Securities on loan.......................................................................................... 326,686,987
Payable for investments purchased........................................................................... 99,358,750
Dividends payable........................................................................................... 8,210,392
Accrued expenses............................................................................................ 1,639,593
Accrued advisory fee........................................................................................ 771,366
Payable for Fund shares redeemed............................................................................ 2,393
Administration fee payable.................................................................................. 84,929
Total liabilities..................................................................................... 436,754,410
NET ASSETS..................................................................................................... $2,928,369,004
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................. $2,928,319,364
Accumulated net realized gain on investment transactions.................................................... 49,640
Net assets............................................................................................ $2,928,369,004
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($2,298,842,953)(2,298,816,515 shares of beneficial interest outstanding)..................... $ 1.00
Class Y Shares ($629,526,051)(629,519,400 shares of beneficial interest outstanding)......................... $ 1.00
</TABLE>
See accompanying notes to financial statements.
41
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of eagle)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest..................................................................................... $87,318,975
EXPENSES:
Advisory fee................................................................................. $ 5,686,866
Distribution fee -- Class A Shares........................................................... 3,745,455
Administration fee........................................................................... 723,741
Custodian fee................................................................................ 258,368
Transfer agent fee........................................................................... 75,860
Reports and notices to shareholders.......................................................... 55,295
Trustees' fees and expenses.................................................................. 28,363
Registration and filing fees................................................................. 18,433
Professional fees............................................................................ 16,914
Insurance.................................................................................... 10,514
Other........................................................................................ 11,197
10,631,006
Less advisory fee waiver..................................................................... (210,020)
Net expenses.............................................................................. 10,420,986
Net investment income........................................................................... 76,897,989
Net realized gain on investments................................................................ --
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................ $76,897,989
</TABLE>
See accompanying notes to financial statements.
42
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of eagle)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................................................... $ 76,897,989 $ 121,967,383
Net realized gain (loss) on investment transactions................................. -- 161,674
Net increase in net assets resulting from operations............................. 76,897,989 122,129,057
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares...................................................................... (58,225,400) (101,441,299)
Class Y Shares...................................................................... (18,672,589) (20,526,084)
Total distributions to shareholders from net investment income................... (76,897,989) (121,967,383)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold........................................................... 4,033,715,063 6,442,829,718
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% U.S. Treasury Fund................................................... -- 28,227,573
Proceeds from reinvestment of distributions......................................... 10,668,847 17,972,077
Payments for shares redeemed........................................................ (4,483,678,594) (5,974,992,600)
Net increase (decrease) resulting from Fund share transactions................... (439,294,684) 1,912,241,155
Net increase (decrease) in net assets............................................ (439,294,684) 1,912,402,829
NET ASSETS:
Beginning of period................................................................. 3,367,663,688 1,455,260,859
End of period....................................................................... $ 2,928,369,004 $ 3,367,663,688
</TABLE>
See accompanying notes to financial statements.
43
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
CLASS A SHARES
(Photo of eagle)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS EIGHT
ENDED MONTHS
FEBRUARY 28, YEAR ENDED ENDED YEAR ENDED
1997 AUGUST 31, AUGUST 31, DECEMBER 31,
(UNAUDITED) 1996 1995# 1994 1993
<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
Net investment income......................................... 0.02 0.05 0.03 0.04 0.03
Less distributions to shareholders from net investment
income...................................................... (0.02) (0.05) (0.03) (0.04) (0.03)
Net asset value, end of period................................ $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+................................................. 2.3% 5.0% 3.6% 3.8% 2.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions)....................... $2,299 $2,608 $1,178 $755 $261
Ratios to average net assets:
Expenses**.................................................. 0.71%++ 0.69% 0.63%++ 0.50% 0.48%
Net investment income**..................................... 4.66%++ 4.76% 5.30%++ 3.91% 2.70%
<CAPTION>
YEAR ENDED
DECEMBER 31,
1992
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.......................... $1.00
Net investment income......................................... 0.03
Less distributions to shareholders from net investment
income...................................................... (0.03)
Net asset value, end of period................................ $1.00
TOTAL RETURN+................................................. 3.4%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions)....................... $209
Ratios to average net assets:
Expenses**.................................................. 0.48%
Net investment income**..................................... 3.22%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
+ 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>
SIX MONTHS EIGHT
ENDED MONTHS
FEBRUARY 28, YEAR ENDED ENDED YEAR ENDED
1997 AUGUST 31, AUGUST 31, DECEMBER 31,
(UNAUDITED) 1996 1995# 1994 1993
<S> <C> <C> <C> <C> <C>
Expenses......................................................... 0.72%++ 0.77% 0.79%++ 0.78% 0.82%
Net investment income............................................ 4.65%++ 4.68% 5.14%++ 3.63% 2.36%
<CAPTION>
YEAR ENDED
DECEMBER 31,
1992
<S> <C>
Expenses......................................................... 0.82%
Net investment income............................................ 2.88%
</TABLE>
See accompanying notes to financial statements.
44
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
CLASS Y SHARES
(Photo of eagle)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS EIGHT
ENDED MONTHS
FEBRUARY 28, YEAR ENDED ENDED YEAR ENDED
1997 AUGUST 31, AUGUST 31, DECEMBER 31,
(UNAUDITED) 1996 1995# 1994 1993
<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
Net investment income........................................ 0.02 0.05 0.04 0.04 0.03
Less distributions to shareholders from net investment
income..................................................... (0.02) (0.05) (0.04) (0.04) (0.03)
Net asset value, end of period............................... $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+................................................ 2.5% 5.3% 3.8% 4.1% 3.0%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions)...................... $630 $760 $277 $163 $366
Ratios to average net assets:
Expenses**................................................. 0.41%++ 0.39% 0.33%++ 0.20% 0.18%
Net investment income**.................................... 4.96%++ 5.12% 5.60%++ 3.78% 3.00%
<CAPTION>
YEAR ENDED
DECEMBER 31,
1992
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period......................... $1.00
Net investment income........................................ 0.04
Less distributions to shareholders from net investment
income..................................................... (0.04)
Net asset value, end of period............................... $1.00
TOTAL RETURN+................................................ 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions)...................... $286
Ratios to average net assets:
Expenses**................................................. 0.17%
Net investment income**.................................... 3.61%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
+ 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>
SIX MONTHS EIGHT
ENDED MONTHS
FEBRUARY 28, YEAR ENDED ENDED YEAR ENDED
1997 AUGUST 31, AUGUST 31, DECEMBER 31,
(UNAUDITED) 1996 1995# 1994 1993
<S> <C> <C> <C> <C> <C>
Expenses........................................................ 0.43%++ 0.47% 0.49%++ 0.48% 0.52%
Net investment income........................................... 4.95%++ 5.04% 5.44%++ 3.50% 2.66%
<CAPTION>
YEAR ENDED
DECEMBER 31,
1992
<S> <C>
Expenses........................................................ 0.52%
Net investment income........................................... 3.26%
</TABLE>
See accompanying notes to financial statements.
45
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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 Pennsylvania Tax-Free
Money Market Fund ("Pennsylvania"), 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 Evergreen Money
Market Trust, Pennsylvania is a series of Evergreen Tax-Free Trust, Tax Exempt
is a series of Evergreen Municipal Trust and Treasury is a series of Evergreen
Investment Trust.
The investment objective of Money Market and Pennsylvania 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"), the Funds' current
investment advisor, consummated a merger with First Fidelity Bancorporation.
Effective on the close of business 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 non-taxable exchanges. The net assets acquired, valued at
$1 per share, 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 $ 592,358,361
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.
Also, effective January 19, 1996, the FFB Pennsylvania Tax-Free Money
Market Fund was renamed Evergreen Pennsylvania Tax-Free Money Market Fund.
Shares of the FFB Pennsylvania Tax-Free Money Market Fund's class previously
known as the institutional class and service class were redesignated
Pennsylvania's Class Y Shares and Class A Shares, respectively. Pennsylvania
subsequently changed its fiscal year end to August 31.
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.
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.
46
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
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.
LENDING SECURITIES -- In order to generate income and to offset expenses,
the Funds may lend portfolio securities to brokers, dealers and other financial
organizations. The Funds' investment adviser will monitor the creditworthiness
of such borrowers. Loans of securities may not exceed 30% of a Fund's total
assets and will be collateralized by cash, letters of credit or United States
Government securities that are maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities, including
accrued interest. While such securities are on loan, the borrower will pay a
Fund any income accruing thereon, and the Fund may invest the collateral in
portfolio securities, thereby increasing its return. A fund will have the right
to call any such loan and obtain the securities loaned at any time on five days'
notice. Any gain or loss in the market price of the loaned securities which
occurs during the term of the loan would affect a Fund and its investors. A Fund
may pay reasonable fees in connection with such loans.
At February 28, 1997, Treasury had $321,306,844 in Treasury Notes on loan
and held $326,754,310 (including interest) in repurchase agreements as
collateral.
The average daily balance of reverse repurchase agreements outstanding
during the six months ended February 28, 1997 for Treasury was $90,199,804 at a
weighted average interest rate of 5.14%. The maximum amount of borrowing during
the six months ended February 28, 1997 was $151,500,000.
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.
47
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
At August 31, 1996, the Funds had capital loss carryforwards in the
following amounts:
<TABLE>
<CAPTION>
EXPIRATION
2001 2002 2003 2004
<S> <C> <C> <C> <C>
Money Market.................. -- -- $516,766 --
Pennsylvania.................. $ 3,800 -- 6,039 $ 378
Tax Exempt.................... 177,088 $266 15,847 64,670
</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. Money Market and Tax Exempt have incurred and elected to defer $34,087
and $9, respectively, of such capital losses from the prior fiscal year end to
the current fiscal year.
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.
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 months ended February 28, 1997, First
Union voluntarily waived $210,020 of its advisory fee.
For Pennsylvania, First Union is entitled to an annual advisory fee based
on the Fund's net assets in accordance with the following schedule:
<TABLE>
<CAPTION>
ADVISORY FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.40% on the first $500 million
0.36% on the next $500 million
0.32% on the next $500 million
0.28% in excess of $1.5 billion
</TABLE>
For the six months ended February 28, 1997, First Union voluntarily waived
$54,465 of its advisory fee for Pennsylvania. First Union can modify or
terminate voluntary fee waivers at any time.
Pursuant to an agreement with Money Market 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 and Tax Exempt's average daily net assets 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 expenses) exceeds 1.00% of its
average daily net assets for any fiscal year. For the six months ended February
28, 1997, the expenses of Money Market and Tax Exempt did not exceed this limit.
For the
48
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
six months ended February 28, 1997, Evergreen Asset voluntarily waived
$1,255,415 and $283,470 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
for Money Market and Tax Exempt. Lieber & Company is reimbursed by Evergreen
Asset at no additional expense to the Funds.
ADMINISTRATION AGREEMENT -- Evergreen Asset furnished Money Market and Tax
Exempt with administrative services as part of their advisory agreements and
accordingly, these Funds did not pay a separate administration fee. Furman Selz
LLC ("Furman Selz") was each Fund's sub-administrator through December 31, 1996.
Effective January 1, 1997, the BISYS Group Inc. ("BISYS") acquired Furman Selz'
mutual fund unit and accordingly, BISYS became sub-administrator for each Fund.
For Money Market and Tax Exempt, the sub-administration fee is paid by Evergreen
Asset and is not a fund expense.
For Pennsylvania and Treasury, Evergreen Asset served as administrator and
Furman Selz was each Fund's sub-administrator through December 31, 1996.
Effective January 1, 1997, BISYS became sub-administrator. The administrator and
sub-administrator to the Funds are each entitled an annual fee based on the
average daily net assets of the Funds administered by Evergreen Asset or
Evergreen Keystone Investment Services ("EKIS"), a subsidiary of First Union,
for which First Union or its investment advisory subsidiaries is also the
investment adviser. These fees 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
in excess of $30 billion
0.010%
</TABLE>
<TABLE>
<CAPTION>
SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.0100% on the first $7 billion
0.0075% on the next $3 billion
0.0050% on the next $15 billion
in excess of $25 billion
0.0040%
</TABLE>
Effective March 11, 1997, EKIS began providing the administrative services
to the funds that were formerly provided by Evergreen Asset. The administrative
fees are unchanged from those charged by Evergreen Asset.
As sub-administrator, Furman Selz/BISYS provided the officers of the Funds.
At February 28, 1997, assets for which EKIS was the administrator for which
either Evergreen Asset or First Union was investment adviser totaled
approximately $29 billion.
State Street Bank & Trust Company ("State Street") serves as transfer
agent, dividend disbursing agent and shareholder servicing agent for each of the
Funds. For certain accounts, First Union has been sub-contracted by State Street
to maintain shareholder sub-account records, take Fund purchase and redemption
orders and answer inquiries. First Union was entitled to a monthly fee which
totaled $6,782, $60, $2,019 and $1,031 for the six months ended February 28,
1997 for Money Market, Pennsylvania, Tax Exempt and Treasury, respectively.
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 . 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 Pennsylvania and Treasury. The payments for Class A Shares for
49
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
Money Market, Tax Exempt and Treasury were voluntarily limited to .30 of 1% and
for Pennsylvania were limited to .09 of 1% of average daily net assets for the
six-months ended February 28, 1997. Money Market may incur distribution-related
and shareholder servicing expenses, which may not exceed an annual fee of 1% for
its Class B Shares.
In connection with their Plans, the Funds have entered into distribution
agreements with Evergreen Keystone Distributor, Inc. (formerly, Evergreen Funds
Distributor, Inc.) ("EKD"), a wholly owned subsidiary of BISYS whereby each Fund
will compensate EKD 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. EKD
has entered into a Shareholder Services Agreement with First Union Brokerage
Services ("FUBS"), an affiliate of First Union, whereby EKD 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. Pennsylvania and Treasury have 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 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.
50
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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 YEAR ENDED
FEBRUARY 28, AUGUST 31,
MONEY MARKET 1997 1996
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 2,013,783,946 3,360,065,151
Shares issued from acquisition of FFB Cash Management Fund................................... -- 592,362,245
Shares issued from reinvestment of distributions............................................. 9,207,708 13,630,468
Shares redeemed.............................................................................. (1,861,861,977) (2,895,924,591)
Net increase................................................................................. 161,129,677 1,070,133,273
CLASS B
Shares sold.................................................................................. 6,906,195 13,107,126
Shares issued from reinvestment of distributions............................................. 184,749 307,330
Shares redeemed.............................................................................. (5,975,312) (11,123,113)
Net increase................................................................................. 1,115,632 2,291,343
CLASS Y
Shares sold.................................................................................. 2,317,326,138 2,902,529,372
Shares issued from acquisition of FFB Lexicon Cash Management Fund........................... -- 95,834,876
Shares issued from reinvestment of distributions............................................. 9,757,700 14,304,225
Shares redeemed.............................................................................. (2,204,927,189) (2,624,143,977)
Net increase................................................................................. 122,156,649 388,524,496
Total net increase resulting from Fund share transactions.................................... 284,401,958 1,460,949,112
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
FEBRUARY 28, AUGUST 31,
PENNSYLVANIA 1997 1996
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 46,555,951 40,205,338
Shares issued from reinvestment of distributions............................................. 83,686 35,417
Shares redeemed.............................................................................. (34,695,876) (22,377,383)
Net increase................................................................................. 11,943,761 17,863,372
CLASS Y
Shares sold.................................................................................. 25,271,967 21,254,692
Shares issued from reinvestment of distributions............................................. 456,320 586,491
Shares redeemed.............................................................................. (34,937,760) (56,919,288)
Net decrease................................................................................. (9,209,473) (35,078,105)
Total net increase (decrease) resulting from Fund share transactions......................... 2,734,288 (17,214,733)
</TABLE>
51
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, AUGUST 31,
TAX EXEMPT 1997 1996
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 634,739,465 1,329,098,871
Shares issued from acquisition of FFB Tax-Free Money Market Fund............................. -- 103,102,728
Shares issued from reinvestment of distributions............................................. 1,666,950 3,435,421
Shares redeemed.............................................................................. (607,345,858) (1,330,067,450)
Net increase................................................................................. 29,060,557 105,569,570
CLASS Y
Shares sold.................................................................................. 631,788,024 1,243,309,865
Shares issued from reinvestment of distributions............................................. 6,466,057 12,767,571
Shares redeemed.............................................................................. (778,095,395) (1,060,731,679)
Net increase (decrease)...................................................................... (139,841,314) 195,345,757
Total net increase (decrease) resulting from Fund share transactions......................... (110,780,757) 300,915,327
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, AUGUST 31,
TREASURY 1997 1996
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 2,499,162,543 4,828,856,886
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............................................. 9,220,141 16,836,594
Shares redeemed.............................................................................. (2,817,240,630) (4,842,442,130)
Net increase (decrease)...................................................................... (308,857,946) 1,429,721,438
CLASS Y
Shares sold.................................................................................. 1,534,552,520 1,613,972,832
Shares issued from reinvestment of distributions............................................. 1,448,706 1,135,483
Shares redeemed.............................................................................. (1,666,437,964) (1,132,550,470)
Net increase (decrease)...................................................................... (130,436,738) 482,557,845
Total net increase (decrease) resulting from Fund share transactions......................... (439,294,684) 1,912,279,283
</TABLE>
NOTE 6 -- DEFERRED TRUSTEE'S FEES
Each Trustee may defer any or all compensation related to performance of
duties as a Trustee of the Funds. Each Trustee's deferred balances are allocated
to deferral accounts which are included in the accrued expenses for each Fund.
The investment performance of the deferral accounts are based on the investment
performance of certain Evergreen Funds. Any gains earned or losses incurred in
the deferral accounts are reported to each Fund's Trustee's fees and expenses.
Trustees will
52
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 6 -- DEFERRED TRUSTEE'S FEES -- continued
be paid either in one lump sum or in quarterly installments for up to ten years
at their election, not earlier that either the year in which the Trustee ceases
to be a member of the Board of Trustees or January 1, 2000. As of February 28,
1997, the value of the Trustees deferral accounts was $29,732, $3,448, $14,406,
and $76,505 for Money Market, Pennsylvania, Tax Exempt and Treasury,
respectively.
NOTE 7 -- 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 Pennsylvania and Tax Exempt 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.
NOTE 8 -- LINE OF CREDIT
A financing agreement was in place with all of the Evergreen Funds and
State Street Bank. Under this agreement, State Street provided an unsecured line
of credit facility, in the aggregate amount of $50 million, to be accessed by
the Evergreen Funds for temporary or emergency purposes only and is subject to
each participating Fund's borrowing restrictions. Effective October 31, 1996, a
new financing agreement was put in place with all of the Evergreen Funds and
State Street, Societe Generale and ABN Amro Bank N.V. (collectively, the
"Banks"). Under this agreement, the Banks provided an unsecured credit facility
in the aggregate amount of $225 million ($112.5 million committed and $112.5
million uncommitted) allocated evenly between the Banks. Borrowings under this
facility bear interest at .75% per annum above the Federal Funds rate. A
commitment fee of 0.10% per annum will be incurred on the unused portion of the
committed facility which would be allocated to all participating funds.
During the six months ended February 28, 1997, Tax Exempt had borrowings
outstanding for 3 days under the line of credit and incurred $28,513 in interest
charges related to these borrowings. The Fund's average amount of debt
outstanding during the six months ended February 28, 1997 aggregated $47,400,000
at a weighted average interest rate of 7.32%. The Funds had no outstanding
borrowings at February 28, 1997.
53
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<PAGE>
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<PAGE>
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<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
George O. Martinez
Secretary
Sheryl Hirschfeld
Assistant Secretary
Stephen W. St. Clair
Assistant Treasurer
* Not a Trustee for Evergreen Treasury Money Market Fund.
+ Trustee Emeritus
<PAGE>
This brochure must be preceeded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully
before investing or sending money.
NOT May lose value
FDIC No bank guarantee
INSURED
Evergreen Keystone Distributor, Inc.
Evergreen Keystone(SM) is a Service Mark of Evergreen Keystone Investment
Services, Inc. Copyright 1997.
48465 540710
4/97
