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[Logo]
ANNUAL REPORT
FEBRUARY 29, 1996
[ ] WARBURG PINCUS CASH RESERVE FUND
[ ] WARBURG PINCUS NEW YORK TAX EXEMPT FUND
A prospectus containing more complete information, including management fees and
expenses, may be obtained by calling 1-800-927-2874 or by writing to Warburg
Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030. Investors should read the
prospectus carefully before investing.
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The views of the Fund's management are as of the date of the letters and
portfolio holdings described in this annual report are as of February 29, 1996;
these views and positions may have changed subsequent to these dates.
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WARBURG PINCUS CASH RESERVE FUND
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April 18, 1996
Dear Shareholder:
Short-term interest rates declined during the year ended February 29, 1996,
helped by three 25-basis-point easings of the federal-funds rate by the Federal
Reserve. The first easing was in July, followed by an easing in December and a
final easing in January. The easings were in response to a slowing economy and
very little inflationary pressure. As a result of the Fed's easing, annualized
yields on 3-month Treasury bills decreased from 5.93% at the end of February
1995 to 4.99% at the end of February 1996. The nation's gross domestic product
grew by 0.5% in the final quarter of 1995, with the first quarter of 1996 also
under the Fed's long-term target of 2.5% annualized growth. As 1996 continues, a
resumption of moderate growth should develop with low inflation, placing the
Federal Reserve on hold.
For the seven-day period ended February 29, 1996, the annualized yield was
4.89%, down from 5.65% on February 28, 1995.* Net assets of Warburg Pincus Cash
Reserve Fund (the 'Fund') were $383.5 million, down from $403.2 million on
February 28, 1995. The Fund's average weighted maturity on February 29, 1996,
was 50 days, three days longer than at the end of 1995.
With employment beginning to increase and the inventory correction ending,
resumption of real gross domestic product growth is apt to keep Federal Reserve
policy on hold until the end of 1996. At that time, the Federal Reserve could
make a small increase in the federal-funds rate if inflation begins to increase.
In response, the Fund will continue to purchase only the highest-quality
securities in order to provide competitive returns without compromising
stability of principal. We appreciate your continued support and investment in
the Fund.
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* From time to time, the Fund's investment adviser and co-administrators may
waive some fees and/or reimburse some expenses, without which performance
would be lower. Waivers and/or reimbursements are subject to change. All
figures listed here represent past performance and do not guarantee future
results. Although the Fund seeks to maintain a constant value of $1.00 per
share, investments in Warburg Pincus Funds are neither insured or guaranteed
by the U.S. government and there can be no assurance that the Fund will be
able to maintain a constant value of $1.00 per share.
1
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WARBURG PINCUS NEW YORK TAX EXEMPT FUND
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April 18, 1996
Dear Shareholder:
Tax-exempt money fund yields continued to rise over the last six months,
peaking in January at 3.39%. The Donoghue's All Tax-Free 12-month total return
on February 29, 1996, was 3.36%, 11 basis points higher than in August. Because
of the high demand for New York-issued securities, New York state-specific
tax-exempt money fund yields tend to be 10 to 15 basis points lower than those
of national funds. According to Donoghue's, New York state-specific funds
averaged 3.21% for the year ended February 29, 1996. The current yield of
Warburg Pincus New York Tax Exempt Fund (the 'Fund') for the seven-day period
ended February 29, 1996, was 2.75%.*
Tax-exempt money funds experienced large cash inflows over the period due
to uncertainty in the stock and bond markets, the Washington budget impasse, and
the possibility of changes in the tax code. Total tax-exempt money fund assets
hit new all-time highs in virtually every month during the last year. At the end
of February, municipal money market assets reached a record level at $135.2
billion.
The economy of the state of New York remained sluggish over the past six
months, and as the state rolls into budget season, it faces another shortfall.
Governor Pataki continues to press hard for spending cuts, tax cuts, and job
cuts, aimed at revenue growth through a more favorable business climate and
leaner state government. Demand for short-term paper increased, causing
short-term tax-free rates to drop and the yield curve to remain flat.
The Fund had net assets of $96.6 million, up from $87.7 million on February
28, 1995. Its average weighted maturity was 24 days.
The Fund seeks to invest in high-quality issues, the income from which is
exempt from federal, New York state and New York City personal income taxes. The
Fund will continue to seek current income that is exempt from federal, New York
state and New York City personal income taxes, consistent with preservation of
capital and liquidity. We appreciate your continued support and investment in
the Fund.
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* From time to time, the Fund's investment adviser and co-administrators may
waive some fees and/or reimburse some expenses, without which performance
would be lower. Waivers and/or reimbursements are subject to change. All
figures listed here represent past performance and do not guarantee future
results. Although the Fund seeks to maintain a constant value of $1.00 per
share, investments in Warburg Pincus Funds are neither insured or guaranteed
by the U.S. government and there can be no assurance that the Fund will be
able to maintain a constant value of $1.00 per share.
2
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS
February 29, 1996
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------------------------------------- ------------- --------- ------ ------------
<C> <S> <C> <C> <C> <C>
AGENCY OBLIGATIONS (5.6%)
Federal Farm Credit Bank (5.6%)
$ 5,000,000 Federal Farm Credit Bank N/R 05/01/96 5.2500 $ 5,000,000
3,500,000 Federal Farm Credit Bank N/R 05/01/96 5.5800 3,500,000
5,000,000 Federal Farm Credit Bank N/R 06/03/96 5.1250 5,000,000
3,000,000 Federal Farm Credit Bank N/R 06/03/96 5.5200 3,000,000
3,000,000 Federal Farm Credit Bank N/R 08/01/96 5.1000 3,000,000
2,000,000 Federal Farm Credit Bank N/R 09/03/96 4.9800 2,000,000
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TOTAL AGENCY OBLIGATIONS (Cost $21,500,000) 21,500,000
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BANKERS' ACCEPTANCES (22.9%)
Domestic Bankers' Acceptances (21.3%)
2,000,000 Bank of America National Trust & Savings
Association (P-1, A-1) 03/04/96 5.6000 1,999,067
4,000,000 Bank of America National Trust & Savings
Association (P-1, A-1) 04/08/96 5.3500 3,977,411
1,000,000 Bank of America National Trust & Savings
Association (P-1, A-1) 04/11/96 5.4700 993,770
4,000,000 Bank of America National Trust & Savings
Association (P-1, A-1) 05/29/96 5.2400 3,948,182
2,000,000 Bank of America National Trust & Savings
Association (P-1, A-1) 07/10/96 5.1200 1,962,738
800,000 Chase Manhattan Bank (P-1, A-1) 03/11/96 5.6000 798,756
300,000 Chase Manhattan Bank (P-1, A-1) 03/13/96 5.6000 299,440
800,000 Chase Manhattan Bank (P-1, A-1) 03/15/96 5.6000 798,258
1,700,000 Chase Manhattan Bank (P-1, A-1) 03/19/96 5.6000 1,695,240
2,300,000 Chase Manhattan Bank (P-1, A-1) 03/20/96 5.6000 2,293,202
2,300,000 Chase Manhattan Bank (P-1, A-1) 03/25/96 5.5800 2,291,444
1,000,000 Chase Manhattan Bank (P-1, A-1) 03/27/96 5.2500 996,208
500,000 Chase Manhattan Bank (P-1, A-1) 03/27/96 5.6000 497,978
500,000 Chase Manhattan Bank (P-1, A-1) 03/29/96 5.5800 497,830
2,000,000 Chase Manhattan Bank (P-1, A-1) 04/03/96 5.3000 1,990,283
700,000 Chase Manhattan Bank (P-1, A-1) 04/30/96 5.0800 694,073
1,500,000 Chase Manhattan Bank (P-1, A-1) 05/15/96 5.0800 1,484,125
1,000,000 Citibank, N.A. (P-1, A-1) 03/06/96 5.1700 999,282
1,000,000 Citibank, N.A. (P-1, A-1) 04/19/96 5.1000 993,058
268,431 Citibank, N.A. (P-1, A-1) 04/26/96 5.4800 266,141
552,135 Citibank, N.A. (P-1, A-1) 04/29/96 5.4500 547,203
</TABLE>
See Accompanying Notes to Financial Statements.
3
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------------------------------------- ------------- --------- ------ ------------
<C> <S> <C> <C> <C> <C>
BANKERS' ACCEPTANCES (CONT'D)
$ 1,023,175 CoreStates Bank N.A. (P-1, A-1) 03/15/96 5.6100 $ 1,020,943
5,000,000 CoreStates Bank N.A. (P-1, A-1) 04/04/96 5.6000 4,973,556
1,000,000 CoreStates Bank N.A. (P-1, A-1) 04/09/96 5.1300 994,443
1,000,000 First National Bank of Chicago (P-1, A-1) 03/05/96 5.5500 999,383
1,000,000 First National Bank of Chicago (P-1, A-1) 05/17/96 5.4300 988,386
1,000,000 First National Bank of Chicago (P-1, A-1) 06/25/96 5.2100 983,212
500,000 First National Bank of Chicago (P-1, A-1) 08/02/96 4.8600 489,605
500,000 First National Bank of Chicago (P-1, A-1) 08/06/96 4.8600 489,335
500,000 First National Bank of Chicago (P-1, A-1) 08/13/96 4.8600 488,863
1,075,000 First Union National Bank of NC (P-1, A-1) 04/16/96 5.5100 1,067,431
1,000,000 First Union National Bank of NC (P-1, A-1) 04/19/96 5.2700 992,827
5,000,000 First Union National Bank of NC (P-1, A-1) 04/24/96 5.5200 4,958,600
1,539,364 First Union National Bank of NC (P-1, A-1) 05/28/96 5.4500 1,518,856
2,000,000 First Union National Bank of NC (P-1, A-1) 06/17/96 5.2100 1,968,740
1,000,000 First Union National Bank of NC (P-1, A-1) 06/18/96 5.2100 984,225
1,000,000 Mellon Bank N.A. (P-1, A-1) 05/03/96 5.5000 990,375
1,000,000 Mellon Bank N.A. (P-1, A-1) 05/31/96 5.4500 986,224
5,220,000 Mellon Bank N.A. (P-1, A-1) 06/07/96 5.4000 5,143,266
2,000,000 Mellon Bank N.A. (P-1, A-1) 07/26/96 4.9600 1,959,493
1,000,000 Mellon Bank N.A. (P-1, A-1) 08/02/96 4.8700 979,167
5,000,000 NationsBank of North Carolina (P-1, A-1) 08/05/96 4.8700 4,893,807
1,458,484 State Street Bank & Trust Co. (P-1, A-1+) 03/11/96 5.4500 1,456,276
2,246,608 State Street Bank & Trust Co. (P-1, A-1+) 03/25/96 5.5700 2,238,266
1,973,585 State Street Bank & Trust Co. (P-1, A-1+) 03/27/96 5.5700 1,965,646
2,455,450 State Street Bank & Trust Co. (P-1, A-1+) 04/16/96 5.5400 2,438,068
1,719,993 State Street Bank & Trust Co. (P-1, A-1+) 04/17/96 5.2000 1,708,316
3,191,865 State Street Bank & Trust Co. (P-1, A-1+) 05/17/96 5.2700 3,155,887
1,000,000 Suntrust Bank (P-1, A-1) 06/03/96 5.1900 986,448
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Total Domestic Bankers' Acceptances 81,843,333
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</TABLE>
See Accompanying Notes to Financial Statements.
4
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------------------------------------- ------------- --------- ------ ------------
<C> <S> <C> <C> <C> <C>
BANKERS' ACCEPTANCES (CONT'D)
Foreign Bankers' Acceptances (1.6%)
$ 3,000,000 Bank of Montreal (P-1, A-1+) 04/15/96 5.5000 $ 2,979,375
1,000,000 Societe Generale (P-1, A-1+) 03/01/96 5.6000 1,000,000
1,000,000 Societe Generale (P-1, A-1+) 03/04/96 5.6000 999,533
1,000,000 Societe Generale (P-1, A-1+) 03/11/96 5.6000 998,444
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Total Foreign Bankers' Acceptances 5,977,352
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TOTAL BANKERS' ACCEPTANCES (Cost $87,820,685) 87,820,685
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BANK NOTES (1.3%)
5,000,000 Mellon Bank (P-1, A-1) 05/01/96 5.7000 5,000,000
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TOTAL BANK NOTES (Cost $5,000,000) 5,000,000
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CERTIFICATES OF DEPOSIT (2.6%)
Domestic Certificates Of Deposit (1.3%)
5,000,000 Wilmington Trust Company (P-1, A-1) 05/15/96 5.1600 5,000,000
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Yankee Dollar Certificates Of Deposit (1.3%)
5,000,000 Societe Generale (P-1, A-1+) 05/01/96 5.2500 5,000,412
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TOTAL CERTIFICATES OF DEPOSIT (Cost $10,000,412) 10,000,412
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COMMERCIAL PAPER (47.9%)
Asset Backed Securities (0.6%)
2,500,000 Beta Finance Inc. (P-1, A-1+) 03/25/96 5.6300 2,490,617
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Banks (3.6%)
5,000,000 Morgan (J.P.) & Co. (P-1, A-1+) 08/20/96 4.8800 4,883,422
4,000,000 National City Corp. (P-1, A-1+) 04/01/96 5.4500 3,981,228
5,000,000 NationsBank Corp. (P-1, A-1) 04/11/96 5.3700 4,969,421
------------
13,834,071
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Books: Publishing & Printing (0.5%)
2,000,000 McGraw-Hill, Inc. (P-1, A-1) 04/22/96 5.5000 1,984,111
------------
Chemicals & Allied Products (5.4%)
14,000,000 Dow Chemical Co. (P-1, A-1) 03/01/96 5.5500 14,000,000
4,580,000 Monsanto Co. (P-1, A-1) 03/01/96 5.6500 4,580,000
2,000,000 Monsanto Co. (P-1, A-1) 06/11/96 5.2200 1,970,420
------------
20,550,420
------------
</TABLE>
See Accompanying Notes to Financial Statements.
5
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------------------------------------- ------------- --------- ------ ------------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONT'D)
Cigarettes (2.7%)
$10,400,000 Philip Morris Capital Corp. (P-1, A-1) 03/01/96 5.6500 $ 10,400,000
------------
Electric Services (1.1%)
4,450,000 Allegheny Power System (P-1, A-1) 03/27/96 5.3800 4,432,709
------------
Finance Lessors (3.6%)
2,000,000 General Electric Capital Corp. (P-1, A-1+) 03/28/96 5.6000 1,991,600
2,000,000 General Electric Capital Corp. (P-1, A-1+) 05/08/96 5.3000 1,979,978
2,000,000 General Electric Capital Corp. (P-1, A-1+) 05/09/96 5.3200 1,979,607
2,000,000 General Electric Capital Corp. (P-1, A-1+) 05/15/96 5.2700 1,978,042
5,000,000 General Electric Capital Corp. (P-1, A-1+) 07/09/96 5.1900 4,906,292
1,000,000 General Electric Capital Corp. (P-1, A-1+) 08/26/96 5.0300 975,129
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13,810,648
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Inorganic Chemicals (0.8%)
1,000,000 Air Products & Chemicals Inc. (P-1, A-1) 03/15/96 5.2500 997,958
2,000,000 Air Products & Chemicals Inc. (P-1, A-1) 04/17/96 5.3300 1,986,083
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2,984,041
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Life Insurance (0.3%)
1,000,000 Metlife Funding, Inc. (P-1, A-1+) 04/11/96 5.1500 994,135
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Metal Working Machine & Equipment (1.1%)
4,335,000 Vermont American Corp. (P-1, A-1+) 03/01/96 5.6500 4,335,000
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Motor Vehicles & Car Bodies (0.8%)
3,000,000 Daimler-Benz North America Corp. (P-1, A-1+) 03/15/96 5.5800 2,993,490
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National Commercial Banks (3.9%)
5,000,000 Citicorp (P-1, A-1) 03/01/96 5.4500 5,000,000
5,000,000 Citicorp (P-1, A-1) 03/01/96 5.5000 5,000,000
5,000,000 Royal Bank of Canada (P-1, A-1+) 08/26/96 5.0300 4,875,647
------------
14,875,647
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</TABLE>
See Accompanying Notes to Financial Statements.
6
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------------------------------------- ------------- --------- ------ ------------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONT'D)
Newspaper: Publishing & Printing (0.5%)
$ 2,000,000 Tribune Company (P-1, A-1) 03/01/96 5.3000 $ 2,000,000
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Personal Credit Institutions (3.6%)
1,000,000 Associates Corp. of North America (P-1, A-1+) 04/10/96 5.6000 993,778
2,000,000 Associates Corp. of North America (P-1, A-1+) 06/17/96 5.1500 1,969,100
3,000,000 Beneficial Corp. (P-1, A-1) 03/18/96 5.2300 2,992,591
3,000,000 Beneficial Corp. (P-1, A-1) 06/05/96 5.2200 2,958,240
5,000,000 Ford Motor Credit Corp. (P-1, A-1) 04/12/96 5.3700 4,968,675
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13,882,384
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Photographic Equipment & Supply (0.3%)
1,200,000 Xerox Corp. (P-1, A-1) 04/26/96 5.1500 1,190,387
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Plastic Syth. Resin/Rubber (1.3%)
5,000,000 Du Pont (E.I.) de Nemours & Co. (P-1, A-1+) 07/23/96 5.5300 4,889,400
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Printing & Publishing (0.5%)
2,000,000 Knight-Ridder, Inc. (P-1, A-1+) 05/13/96 5.0500 1,979,519
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Security Brokers & Dealers (8.8%)
5,000,000 Bear Stearns Companies, Inc. (P-1, A-1) 04/15/96 5.3500 4,966,563
5,000,000 CS First Boston Inc. (P-1, A-1) 06/18/96 5.0600 4,923,397
3,000,000 Goldman Sachs Group L.P. (P-1, A-1+) 04/09/96 5.6000 2,981,800
5,000,000 Goldman Sachs Group L.P. (P-1, A-1+) 04/16/96 5.6000 4,964,222
2,000,000 Goldman Sachs Group L.P. (P-1, A-1+) 06/10/96 5.2200 1,970,710
2,000,000 Merrill Lynch & Co. (P-1, A-1+) 03/04/96 5.6000 1,999,067
2,000,000 Merrill Lynch & Co. (P-1, A-1+) 03/29/96 5.6200 1,991,258
3,000,000 Merrill Lynch & Co. (P-1, A-1+) 06/28/96 5.2500 2,947,938
5,000,000 Merrill Lynch & Co. (P-1, A-1+) 07/25/96 5.1800 4,894,961
2,000,000 Morgan Stanley Group, Inc. (P-1, A-1+) 04/30/96 5.3200 1,982,267
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33,622,183
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Services -- Auto Rent & Lease (0.7%)
315,000 PHH Corp. (P-1, A-1) 04/04/96 5.1500 313,468
750,000 PHH Corp. (P-1, A-1) 04/08/96 5.1500 745,923
780,000 PHH Corp. (P-1, A-1) 04/10/96 5.1500 775,537
730,000 PHH Corp. (P-1, A-1) 04/12/96 5.1500 725,614
------------
2,560,542
------------
</TABLE>
See Accompanying Notes to Financial Statements.
7
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<PAGE>
<PAGE>
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------------------------------------- ------------- --------- ------ ------------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONT'D)
Short-Term Business Credit Institutions (7.3%)
$ 3,000,000 American Express Credit Corp. (P-1, A-1) 03/04/96 5.6000 $ 2,998,600
1,000,000 American Express Credit Corp. (P-1, A-1) 03/13/96 5.6400 998,120
1,000,000 American Express Credit Corp. (P-1, A-1) 03/22/96 5.6300 996,716
2,000,000 American Express Credit Corp. (P-1, A-1) 03/29/96 5.5500 1,991,367
1,200,000 American Express Credit Corp. (P-1, A-1) 03/29/96 5.6400 1,194,736
2,000,000 American Express Credit Corp. (P-1, A-1) 05/15/96 5.2500 1,978,125
1,000,000 American Express Credit Corp. (P-1, A-1) 06/07/96 5.2200 985,790
1,000,000 American Express Credit Corp. (P-1, A-1) 08/12/96 4.8800 977,769
2,000,000 American Express Credit Corp. (P-1, A-1) 08/26/96 5.0200 1,950,358
5,000,000 Corporate Receivables Corp. (P-1, A-1) 03/13/96 5.5800 4,990,700
5,000,000 CXC, Inc. (P-1, A-1+) 04/08/96 5.3750 4,971,632
1,120,000 McKena Triangle National Corp. (P-1, A-1+) 03/12/96 5.2300 1,118,210
2,000,000 Xerox Credit Corp. (P-1, A-1) 04/04/96 5.2000 1,990,178
814,000 Xerox Credit Corp. (P-1, A-1) 05/10/96 5.1500 805,849
------------
27,948,150
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Telephone Communications (0.5%)
2,000,000 American Telephone & Telegraph Co. (P-1, A-1+) 05/30/96 5.4400 1,972,800
------------
TOTAL COMMERCIAL PAPER (Cost $183,730,254) 183,730,254
------------
TIME DEPOSITS (2.5%)
Time Deposits (2.5%)
4,715,000 Bank of Hawaii (P-1, A-1) 03/01/96 5.9375 4,715,000
5,000,000 Banque Paribas (P-1, A-1) 03/11/96 5.2500 5,000,000
------------
TOTAL TIME DEPOSITS (Cost $9,715,000) 9,715,000
------------
VARIABLE RATE OBLIGATIONS (19.3%)
Banks (5.2%)
5,000,000 Boatmen's National Bank + (P-1, A-1+) 03/12/96 5.2925 5,000,000
10,000,000 Morgan Guaranty Trust Co. + (P-1, A-1+) 03/01/96 6.2000 9,997,673
5,000,000 Northwest Corp. + (P-1, A-1+) 03/28/96 5.3125 5,000,000
------------
19,997,673
------------
Security Brokers & Dealers (1.3%)
5,000,000 Bear Stearns & Co. Inc.+ (P-1, A-1) 05/16/96 5.3000 5,000,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
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<PAGE>
<PAGE>
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------------------------------------- ------------- --------- ------ ------------
<C> <S> <C> <C> <C> <C>
VARIABLE RATE OBLIGATIONS (CONT'D)
Student Loan Marketing Association (12.8%)
$15,000,000 Student Loan Marketing Association + 03/05/96 5.1700 $ 15,000,000
5,000,000 Student Loan Marketing Association + 03/05/96 5.3100 5,001,176
29,000,000 Student Loan Marketing Association + 03/05/96 5.3400 29,012,201
------------
49,013,377
------------
TOTAL VARIABLE RATE OBLIGATIONS (Cost $74,011,050) 74,011,050
------------
TOTAL INVESTMENTS AT VALUE (102.1%) (Cost $391,777,401*) 391,777,401
LIABILITIES IN EXCESS OF OTHER ASSETS (2.1%) (8,169,691)
------------
NET ASSETS (100.0%) (applicable to 383,608,358 shares) $383,607,710
------------
------------
NET ASSETS VALUE, offering and redemption price per share ($383,607,710[div]383,608,358)
$1.00
-----
-----
</TABLE>
N/R Not rated.
= Credit ratings given by Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group are unaudited.
+ The interest rate shown is the rate as of February 29, 1996 and the
maturity date shown is the next interest readjustment date.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE FUND
MATURITY SCHEDULE OF PORTFOLIO
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SCHEDULE
(DAYS) PAR AMOUNT PERCENTAGE OF PORTFOLIO
- ----------------- ------------ -----------------------------
(CUMULATIVE)
<S> <C> <C> <C>
1-7 $120,030,000 30.5% 30.5%
8-14 20,678,484 5.2 35.7
15-30 41,493,368 10.5 46.2
31-60 72,846,008 18.5 64.7
61-90 54,245,230 13.8 78.5
91-120 39,220,000 10.0 88.5
121-150 19,000,000 4.8 93.3
Over 150 26,500,000 6.7 100.0
------------
$394,013,090
------------
------------
</TABLE>
Average Weighted Maturity -- 50 days
See Accompanying Notes to Financial Statements.
10
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
----------- ------------------------------------- --------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
NEW YORK (100.4%)
$ 1,425,000 Chautauqua County Industrial
Development Agency Industrial
Development Revenue Bonds, Series
1995 (Belknap Business Forms, Inc.
Project) VRDN+ (NR, NR) 03/07/96 3.300 $ 1,425,000
700,000 Erie County New York Water Authority
Series B (AMBAC Insurance) VRDN+ (VMIG1, A-1+) 03/07/96 3.100 700,000
3,000,000 Massapequa New York Union Free School
District TANS (MIG1, NR) 06/28/96 4.250 3,004,696
200,000 Metropolitan Transportation Au-
thority Commuter Facility Series 1991
(Morgan Guaranty LOC) VRDN+ (VMIG1, A-1) 03/07/96 3.150 200,000
1,000,000 Monroe County Industrial Development
Agency Electronic Navigational
Industries Facility Series 1984 MB (Aa1, AA) 07/01/96 3.800 1,000,000
1,900,000 New York City General Obligation
(Union Bank of Switzerland LOC) VRDN+ (VMIG1, A-1+) 03/01/96 3.350 1,900,000
500,000 New York City General Obligation
Series B10 (Union Bank of Switzerland
LOC) VRDN+ (VMIG1, A-1+) 03/07/96 3.150 500,000
4,400,000 New York City General Obligation
(Mitsubishi Bank LOC) VRDN+ (VMIG1, A-1+) 03/07/96 3.500 4,400,000
3,400,000 New York City General Obligation
(FGIC Insurance) VRDN+ (MIG1, A-1+) 03/01/96 3.350 3,400,000
1,800,000 New York City General Obligation
Bonds (Mitsubishi Bank LOC) VRDN+ (VMIG1, A-1+) 03/07/96 3.450 1,800,000
2,000,000 New York City General Obligation
Series H-6 (MBIA Insurance) TECP (VMIG1, A-1+) 05/21/96 3.250 2,000,000
1,500,000 New York City General Obligation
Series B-9 (Chemical Bank LOC) TECP (NR, NR) 08/19/96 3.250 1,500,000
</TABLE>
See Accompanying Notes to Financial Statements.
11
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
----------- ------------------------------------- --------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
NEW YORK (CONT'D)
$ 400,000 New York City General Obligation
1994B (Dai-Ichi Kangyo LOC) VRDN+ (MIG1, A-1) 03/01/96 3.400 $ 400,000
2,100,000 New York City Housing Development
Authority (York Ave.) (Chemical Bank
LOC) VRDN+ (NR, A-1) 03/07/96 3.250 2,100,000
2,675,000 New York City Housing Development
Corporation (Parkgate Tower)
(Citibank LOC) VRDN+ (VMIG1, A-1) 03/07/96 3.100 2,675,000
1,000,000 New York City Housing Development
Corporation (Upper Fifth Avenue
Project) Series 1989A (Bankers Trust
LOC) VRDN+ (VMIG1, A-1) 03/07/96 3.000 1,000,000
500,000 New York City Industrial Development
Agency (La Guardia Project) Series
1985 (Banque Indosuez LOC) VRDN+ (NR, A-1) 03/07/96 3.150 500,000
1,000,000 New York City Industrial Development
Agency Columbia Grammar and
Preparatory School Civic Facility
Revenue Bonds 1994 (Chemical Bank
LOC) VRDN+ (NR, A-1) 03/07/96 3.150 1,000,000
600,000 New York City Industrial Development
Agency Japan Airlines (Morgan
Guaranty LOC) VRDN+ (NR, A-1) 03/01/96 3.450 600,000
400,000 New York City Industrial Development
Revenue Bonds Nippon Cargo Airlines
Company (Industrial Bank of Japan
LOC) VRDN+ (NR, A-1+) 03/07/96 4.100 400,000
1,000,000 New York City Municipal Water Finance
Authority Series 3 (Toronto Dominion
LOC) TECP (P-1, A-1+) 05/21/96 3.250 1,000,000
3,300,000 New York City Series E (Morgan
Guaranty LOC) RANS (MIG1, SP-1) 06/28/96 4.750 3,314,183
3,000,000 New York City Series 1996-A RANS (NR, NR) 04/11/96 4.500 3,002,455
</TABLE>
See Accompanying Notes to Financial Statements.
12
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
----------- ------------------------------------- --------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
NEW YORK (CONT'D)
$ 1,447,000 New York City Trust For Cultural
Resources (Carnegie Hall) (Dai-Ichi
Kangyo LOC) VRDN+ (VMIG1, A-1) 03/07/96 3.200 $ 1,447,000
1,000,000 New York City Trust For Cultural
Resources Adjustable Tender Revenue
Bonds (American Museum of Natural
History) Series 1991B (MBIA
Insurance) (Swiss Bank LOC) VRDN+ (VMIG1, A-1+) 03/07/96 2.900 1,000,000
1,900,000 New York City Trust For Cultural
Resources Museum of Broadcasting
Series 1989 (Sumitomo Bank LOC) VRDN+ (VMIG1, A-1) 03/07/96 3.400 1,900,000
2,400,000 New York Local Government Assistance
Corp. (Multiple Credit Enhancements
LOC) VRDN+ (NR, A-1+) 03/07/96 3.100 2,400,000
700,000 New York Local Government Assistance
Corp. (Canadian Imperial Bank LOC)
VRDN+ (VMIG1, A-1+) 03/07/96 3.150 700,000
1,700,000 New York Local Government Assistance
Corp. (Society Generale LOC) VRDN+ (VMIG1, A-1+) 03/07/96 3.150 1,700,000
2,500,000 New York State Dormitory Authority
Revenue Bonds (Chemical Bank LOC)
TECP (VMIG1, A-1) 03/21/96 3.300 2,500,000
600,000 New York State Dormitory
Authority Revenues Bonds (Beverwyck
Inc.) (Banque Paribas LOC) VRDN+ (VMIG1, A-1) 03/07/96 3.050 600,000
4,600,000 New York State Energy Research &
Development Authority Pollution
Control Refunding Revenue Bonds (New
York State Electric & Gas Corp.)
(Union Bank of Switzerland LOC) VRDN+ (VMIG1, A-1+) 03/01/96 3.500 4,600,000
</TABLE>
See Accompanying Notes to Financial Statements.
13
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
----------- ------------------------------------- --------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
NEW YORK (CONT'D)
$ 1,400,000 New York State Energy Research &
Development Authority Pollution
Control Revenue Refunding Bonds
(Rochester Gas & Electric) Series
1984 (Bank of New York LOC) VRDN+ (P-1, NR) 03/01/96 3.250 $ 1,400,000
2,000,000 New York State Energy Research and
Development Authority (New York State
Electric & Gas) Series 1985A (Morgan
Guaranty LOC) MB (P-1, A-1+) 03/15/96 4.650 2,000,000
2,000,000 New York State Energy Research and
Development Authority Electric
Facilities Revenue Bonds 1995 Series
A (Long Island Lighting Company
Project) (Union Bank of Switzerland
LOC) VRDN+ (VMIG1, NR) 03/07/96 3.250 2,000,000
2,500,000 New York State Energy Research and
Development Authority Pollution
Control Revenue Bonds (Long Island
Lighting Company) (Deutsche Bank LOC)
MB (VMIG1, A-1+) 03/01/96 4.700 2,500,000
2,000,000 New York State Housing Finance Agency
East 84th Street Housing Revenue
Bonds 1995 Series A (Fleet Bank LOC)
VRDN+ (VMIG1, NR) 03/07/96 3.200 2,000,000
100,000 New York State Housing Finance Agency
Housing Revenue Bonds (Mt. Sinai
School of Medicine) Series 1984A
(Golden State Sanwa Bank LOC) VRDN+ (VMIG1, NR) 03/07/96 3.100 100,000
100,000 New York State Housing Finance Agency
Housing Revenue Bonds (Normandie
Court) Series 1991A (Society Generale
LOC) VRDN+ (VMIG1, NR) 03/07/96 3.100 100,000
1,100,000 New York State Housing Finance Agency
Housing Revenue Bonds (Sloan Memorial
Kettering Cancer Center) Series 1985A
VRDN+ (MIG1, A1+) 03/07/96 3.000 1,100,000
</TABLE>
See Accompanying Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
----------- ------------------------------------- --------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
NEW YORK (CONT'D)
$ 1,200,000 New York State Housing Finance Agency
Multi-Family Housing (Pleasant Creek
Assoc.) 1988
Series A (AMBAC Insurance) VRDN+ (VMIG1, NR) 03/07/96 3.300 $ 1,200,000
230,000 New York State Job Development
Authority State Guaranteed Variable
Rate Special Purpose Bonds Series
1984C (Sumitomo Bank LOC) VRDN+ (VMIG1, A-1+) 03/01/96 3.650 230,000
110,000 New York State Job Development
Authority State Guaranteed Variable
Rate Special Purpose Bonds Series
1984F (Sumitomo Bank LOC) VRDN+ (VMIG1, A-1+) 03/01/96 3.650 110,000
640,000 New York State Job Development
Authority State Guaranteed Variable
Rate Special Purpose Bonds Series
1984G (Sumitomo Bank LOC) VRDN+ (VMIG1, A-1+) 03/01/96 3.650 640,000
810,000 New York State Job Development
Authority State Guaranteed Variable
Rate Special Purpose Bonds Series
1984H (Sumitomo Bank LOC) VRDN+ (VMIG1, A-1+) 03/01/96 3.650 810,000
1,200,000 New York State Local Government
Assistance Corporation Variable Rate
Revenue Bonds Series 1995F (Toronto
Dominion LOC) VRDN+ (VMIG1, A-1+) 03/07/96 3.150 1,200,000
500,000 New York State Medical Care
Facilities Finance Agency (Lenox Hill
Hospital Project) 1990
Series A (Chemical Bank LOC) VRDN+ (VMIG1, NR) 03/07/96 3.100 500,000
2,000,000 New York State Power Authority TECP (P-2, A-2) 03/26/96 3.350 2,000,000
2,120,000 New York State Power Authority TECP (P-1, A-1) 05/01/96 3.300 2,120,000
</TABLE>
See Accompanying Notes to Financial Statements.
15
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
----------- ------------------------------------- --------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
NEW YORK (CONT'D)
$ 1,000,000 North Hempstead New York Solid Waste
Management Authority Series A 1993
VRDN+ (VMIG1, A-1+) 03/07/96 3.250 $ 1,000,000
2,000,000 New York City General Obligation (MIG1, NR) 06/28/96 4.750 2,004,742
2,100,000 State of New York General Obligation
BANS (P-1, A-1) 03/13/96 3.250 2,100,000
2,600,000 State of New York Power MB (MIG1, NR) 03/01/96 3.850 2,600,000
4,000,000 State of New York Series R TECP (P-1, A-1) 03/07/96 3.100 4,000,000
3,700,000 Suffolk County Industrial Devel-
opment Authority (Nissequogue Cogen)
Series 1993 (Toronto Dominion LOC)
VRDN+ (VMIG1, A-1+) 03/07/96 3.200 3,700,000
3,000,000 Suffolk County Water Authority BAN
1994 VRDN+ (VMIG1, NR) 03/07/96 3.100 3,000,000
1,000,000 Town of Babylon Industrial De-
velopment Agency (J. D'addario &
Company, Inc Project) Series 1994
(National Westminster LOC) VRDN+ (VMIG1, NR) 03/07/96 3.300 1,000,000
100,000 Town of Montgomery Industrial
Development Agency Authority (Service
Merchandise Co., Inc.) (Industrial
Bank of Japan LOC) VRDN+ (NR, A-1) 03/15/96 3.350 100,000
700,000 Triborough Bridge and Tunnel
Authority (FGIC Insurance) VRDN+ (VMIG1, A-1+) 03/07/96 3.250 700,000
2,100,000 Trust For Cultural Resources City of
New York (Solomon R. Guggenheim
Foundation) (Swiss Bank LOC) VRDN+ (MIG1, A1+) 03/01/96 3.400 2,100,000
------------
TOTAL NEW YORK (Cost $96,983,076) 96,983,076
------------
</TABLE>
See Accompanying Notes to Financial Statements.
16
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE% VALUE
----------- ------------------------------------- --------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
PUERTO RICO (4.5%)
$ 2,400,000 Government Development Bank For
Puerto Rico Adjustable Refunding
Bonds Series 1985 (Credit Suisse LOC)
VRDN+ (VMIG1, NR) 03/07/96 2.800 $ 2,400,000
2,000,000 Government Development Bank For
Puerto Rico TECP (NR, A-1+) 03/05/96 3.000 2,000,000
------------
TOTAL PUERTO RICO (Cost $4,400,000) 4,400,000
------------
TOTAL INVESTMENTS AT VALUE (104.9%) (Cost $101,383,076*) 101,383,076
LIABILITIES IN EXCESS OF OTHER ASSETS (4.9%) (4,799,327)
------------
NET ASSETS (100.0%) (applicable to 96,596,868 common shares) $ 96,583,749
------------
------------
NET ASSET VALUE, offering and redemption price per common
share ($96,583,749[div]96,596,868) $1.00
-----
-----
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
BANS = Bond Anticipation Notes
FGIC = Financial Guaranty Insurance Company
LOC = Letter of Credit
MB = Municipal Bonds
MBIA = Municipal Bond Insurance Association
RANS = Revenue Anticipation Notes
TANS = Tax Anticipation Notes
TECP = Tax Exempt Commercial Paper
VRDN = Variable Rate Demand Notes
</TABLE>
= Credit ratings given by Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group are unaudited.
+ The interest rate shown is the rate as of February 29, 1996 and the maturity
date shown is the longer of the next interest readjustment date or the date
the principal amount owed can be recovered through demand.
* Also represents cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
17
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
MATURITY SCHEDULE OF PORTFOLIO
February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SCHEDULE
(DAYS) PAR AMOUNT PERCENTAGE OF PORTFOLIO
- ----------------- ------------ -----------------------------
(CUMULATIVE)
<S> <C> <C> <C>
1-7 $ 73,737,000 72.7% 72.7%
8-14 2,100,000 2.1 74.8
15-30 6,600,000 6.5 81.3
31-60 3,000,000 3.0 84.3
61-90 5,120,000 5.0 89.3
91-120 8,300,000 8.2 97.5
121-150 1,000,000 1.0 98.5
Over 150 1,500,000 1.5 100.0
------------
$101,357,000
------------
------------
</TABLE>
Average Weighted Maturity -- 24 days
See Accompanying Notes to Financial Statements.
18
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS
STATEMENTS OF OPERATIONS
For the Year Ended February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Cash Reserve New York Tax
Fund Exempt Fund
-------------- --------------
<S> <C> <C>
INTEREST INCOME $ 18,471,546 $3,402,663
-------------- --------------
EXPENSES:
Investment advisory 772,648 224,129
Sub-investment advisory and administration 772,648 224,129
Administrative services 309,059 89,652
Audit 32,135 31,210
Custodian 77,846 22,792
Directors' 19,500 19,500
Distribution 0 10,080
Insurance 14,987 5,480
Legal 51,866 55,571
Printing 16,489 (1,192)
Registration 9,338 15,529
Transfer agent 113,004 32,503
Miscellaneous 23,354 14,565
-------------- --------------
2,212,874 743,948
Less: fees waived (513,054) (240,784)
-------------- --------------
Total expenses 1,699,820 503,164
-------------- --------------
Net investment income 16,771,726 2,899,499
-------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS:
Net realized gain (loss) from security transactions (507) 645
-------------- --------------
Net increase in net assets resulting from operations $ 16,771,219 $2,900,144
-------------- --------------
-------------- --------------
</TABLE>
See Accompanying Notes to Financial Statements.
19
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Cash Reserve New York Tax
Fund Exempt Fund
---------------------------------- ------------------------------
For the Year Ended February 28 For the Year Ended February 28
or 29, or 29,
1996 1995 1996 1995
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 16,771,726 $ 14,018,197 $ 2,899,499 $ 2,138,667
Net realized gain (loss) from
security transactions (507) 9,641 645 (189)
Net decrease in unrealized market
discount 0 0 0 (6)
--------------- --------------- ------------- -------------
Net increase in net
assets resulting from
operations 16,771,219 14,027,838 2,900,144 2,138,472
--------------- --------------- ------------- -------------
FROM DISTRIBUTIONS:
Dividends from net investment
income:
Common Shares (16,771,726) (14,018,197) (2,810,063) (1,892,371)
Series 2 Shares 0 0 (89,436) (246,296)
--------------- --------------- ------------- -------------
Net decrease from
distributions (16,771,726) (14,018,197) (2,899,499) (2,138,667)
--------------- --------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
(AT $1 PER SHARE):
Proceeds from sale of shares 1,883,249,803 1,886,500,990 314,824,220 246,396,767
Reinvested dividends 10,583,684 8,456,201 1,142,300 1,066,251
Net asset value of shares redeemed (1,913,436,052) (1,769,313,517) (307,102,780) (237,850,988)
--------------- --------------- ------------- -------------
Net increase (decrease)
in net assets from
capital share
transactions (19,602,565) 125,643,674 8,863,740 9,612,030
--------------- --------------- ------------- -------------
Net increase (decrease)
in net assets (19,603,072) 125,653,315 8,864,385 9,611,835
NET ASSETS:
Beginning of year 403,210,782 277,557,467 87,719,364 78,107,529
--------------- --------------- ------------- -------------
End of year $ 383,607,710 $ 403,210,782 $ 96,583,749 $ 87,719,364
--------------- --------------- ------------- -------------
--------------- --------------- ------------- -------------
</TABLE>
See Accompanying Notes to Financial Statements.
20
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended February 28 or 29,
--------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net Investment Income .0543 .0426 .0273 .0322 .0542
Net Realized Gain on Securities 0 0 0 0 .0010
-------- -------- -------- -------- --------
Total from Investment Operations .0543 .0426 .0273 .0322 .0552
-------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income (.0543) (.0426) (.0273) (.0322) (.0542)
Distributions from capital gains 0 0 0 0 (.0010)
-------- -------- -------- -------- --------
Total Distributions (.0543) (.0426) (.0273) (.0322) (.0552)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return 5.57% 4.35% 2.76% 3.27% 5.66%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $383,607 $403,211 $277,557 $287,723 $426,479
Ratios to average daily net assets:
Operating expenses .55% .55% .54% .50% .50%
Net investment income 5.43% 4.41% 2.73% 3.22% 5.45%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .16% .19% .13% .17% .16%
</TABLE>
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Dividends paid by the Fund are taxable as ordinary income.
21
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON SHARES
------------------------------------------------------------
FOR THE YEAR ENDED FEBRUARY 28 OR 29,
------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment
Operations:
Net Investment Income .0326 .0246 .0175 .0224 .0329
Less Distributions:
Dividends from net investment
income (.0326) (.0246) (.0175) (.0224) (.0329)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return 3.31% 2.48% 1.77% 2.26% 3.34%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $ 96,584 $ 77,111 $ 65,984 $ 76,995 $ 65,438
Ratios to average daily net assets:
Operating expenses .55% .55% .54% .50% .50%
Net investment income 3.24% 2.46% 1.75% 2.23% 3.27%
Decrease reflected in above
operating expense ratios due
to waivers/reimbursements .27% .27% .19% .28% .23%
</TABLE>
(1) Series 2 Shares ceased being offered on June 9, 1995.
* Annualized
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Dividends paid by the Fund for the fiscal year will qualify as exempt interest
dividends.
22
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SERIES 2 SHARES
----------------------------------------------------------------------------------------------
FOR THE PERIOD APRIL 30, 1990
MARCH 1, 1995 FOR THE YEAR ENDED FEBRUARY 28 OR 29, (INITIAL ISSUANCE)
THROUGH JUNE 8, ----------------------------------------------- THROUGH
1995(1) 1995 1994 1993 1992 FEBRUARY 28, 1991
------------------ -------- -------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- -------- -------- -------- -------- ----------
.0085 .0211 .0140 .0189 .0295 .0391
(.0085) (.0211) (.0140) (.0189) (.0295) (.0391)
------- -------- -------- -------- -------- ----------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- -------- -------- -------- -------- ----------
------- -------- -------- -------- -------- ----------
3.15% 2.13% 1.41% 1.90% 2.99% 4.78%
$ 0 $ 10,608 $ 12,123 $ 10,165 $ 9,307 $ 15,151
.90%* .90% .89% .85% .85% .65%*
3.10%* 2.11% 1.40% 1.87% 2.95% 4.63%*
.30%* .27% .19% .28% .23% .42%*
</TABLE>
See Accompanying Notes to Financial Statements.
23
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Cash Reserve Fund (the 'Cash Reserve Fund') and the
Warburg Pincus New York Tax Exempt Fund (the 'New York Tax Exempt Fund') are
registered under the Investment Company Act of 1940, as amended (the '1940
Act'), as diversified and non-diversified, open-end management investment
companies, respectively.
Investment objectives for each Fund are as follows: the Cash Reserve Fund
is designed to provide investors with high current income consistent with
liquidity and stability of principal; the New York Tax Exempt Fund is designed
to provide investors with as high a level of current income that is exempt from
Federal, New York State, and New York City personal income taxes as is
consistent with preservation of capital and liquidity.
Issuers of New York tax-exempt securities (including issuers whose
obligations may be acquired by the New York Tax Exempt Fund) have experienced
serious financial difficulties in recent years. These difficulties have at times
jeopardized the credit standing and impaired the borrowing abilities of all New
York issuers and have generally contributed to higher interest costs for their
borrowings and fewer markets for their outstanding debt obligations. During the
recent past, several different issuers of Municipal Securities of New York State
and its agencies and instrumentalities and of New York City have been downgraded
by Standard & Poor's Ratings Group and Moody's Investors Service, Inc. A
recurrence of the financial difficulties experienced by certain issuers of New
York tax-exempt securities could result in defaults or declines in the market
values of their existing obligations and, possibly, in the obligations of other
issuers of New York tax-exempt securities.
The net asset value of each Fund is determined as of noon and the close of
regular trading on the New York Stock Exchange on each day, except on days when
the Exchange is closed. Each Fund's investments are valued under the amortized
cost method which approximates current market value. Under this method,
investments are valued at cost when purchased and thereafter a constant
proportionate amortization of any discount or premium is recorded until maturity
of the investment.
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. Income, expenses and
realized/unrealized gains/losses are allocated proportionately to each class of
shares based upon the relative net asset value of outstanding shares. The cost
of investments sold is determined by use of the specific identification method
for both financial reporting and income tax purposes.
Dividends from net investment income are declared daily and paid monthly.
Distributions of net capital gains, if any, are declared and paid annually,
although the Cash Reserve Fund may declare and pay short-term capital gains, if
any, periodically as the Board of Directors determines. To the extent that a net
realized capital gain can be reduced by a capital loss carryover, such gain will
not be distributed. Income and capital gain distributions are determined in
accordance with Federal income tax regulations which may differ from generally
accepted accounting principles.
No provision is made for Federal taxes as it is each Fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it from
Federal income and excise taxes.
24
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
Each Fund may enter into repurchase agreement transactions. Under the terms
of a typical repurchase agreement, a Fund acquires an underlying security
subject to an obligation of the seller to repurchase. The value of the
underlying security collateral will be maintained at an amount at least equal to
the total amount of the purchase obligation, including interest. The collateral
is in the Fund's possession. At February 29, 1996, no repurchase agreements were
held by either Fund.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amount of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
2. INVESTMENT ADVISER AND SUB-ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ('Warburg'), a wholly owned subsidiary of
Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as each Fund's
investment adviser. For its investment advisory services, Warburg receives a fee
calculated at an annual rate of .25% of each Fund's average daily net assets.
For the year ended February 29, 1996, investment advisory fees and waivers were
as follows:
<TABLE>
<CAPTION>
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
- -------------------------------------------------- ------------------ --------- ------------------
<S> <C> <C> <C>
Cash Reserve $772,648 $(205,222) $567,426
New York Tax Exempt 224,129 (96,389) 127,740
</TABLE>
PNC Institutional Management Corporation ('PIMC'), a wholly owned
subsidiary of PNC Bank, N.A., serves as each Fund's sub-investment adviser and
administrator. For its sub-investment advisory and administrative services, PIMC
receives a fee calculated at an annual rate of .25% of each Fund's average daily
net assets. For the year ended February 29, 1996, sub-investment advisory and
administration fees and waivers were as follows:
<TABLE>
<CAPTION>
GROSS SUB-ADVISORY NET SUB-ADVISORY
AND AND
FUND ADMINISTRATION FEE WAIVER ADMINISTRATION FEE
- -------------------------------------------------- ------------------ --------- ------------------
<S> <C> <C> <C>
Cash Reserve $772,648 $(307,832) $464,816
New York Tax Exempt 224,129 (144,395) 79,734
</TABLE>
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Warburg, serves as each Fund's co-administrator. For its administrative
services, CFSI currently receives a fee calculated at an
25
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
annual rate of .10% of each Fund's average daily net assets. For the year ended
February 29, 1996, administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
- ------------------------------------------------------------- ---------------------
<S> <C>
Cash Reserve $ 309,059
New York Tax Exempt 89,652
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Warburg, serves as each Fund's distributor. No compensation is payable by the
Funds to CSI for distribution services.
3. CAPITAL SHARE TRANSACTIONS
Each Fund is authorized to issue three billion full and fractional shares
of capital stock, $.001 par value per share, of which one billion shares of New
York Tax Exempt Fund are designated as Series 2 Shares. Series 2 Shares are
identical to Common Shares in all respects except that Series 2 Shares are sold
to institutions ('Service Organizations') that perform certain distribution,
shareholder servicing, accounting and/or administrative services for their
customers who are beneficial owners of Series 2 Shares. Series 2 Shares bear the
fees paid pursuant to a distribution plan adopted by each Fund in an amount not
to exceed .75 of 1.00% (on an annualized basis) of the average daily net asset
value of the shares held by the institutions for the benefit of their customers
and enjoy certain exclusive voting rights on matters relating to those fees.
Series 2 Shares ceased being offered on June 9, 1995.
With respect to Series 2 Shares, Service Organizations earned the following
distribution fees for the period March 1, 1995 through June 8, 1995:
<TABLE>
<CAPTION>
FUND DISTRIBUTION FEE
- ------------------------------------------------------------------- ----------------
<S> <C>
New York Tax Exempt $ 10,080
</TABLE>
Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
NEW YORK TAX NEW YORK TAX
CASH RESERVE FUND EXEMPT FUND EXEMPT FUND
------------------------------- --------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
Series 2 Shares
Common Shares Common Shares For the Period For the Year
For the Year Ended For the Year Ended March 1, 1995 Ended
February 28 or 29, February 28 or 29, through February 28,
1996 1995 1996 1995 June 8, 1995 1995
-------------- -------------- ------------ ------------ -------------- ---------------
Shares sold 1,883,249,027 1,886,500,990 300,237,798 204,764,017 14,586,422 41,632,750
Shares issued to shareholders on
reinvestment of dividends 10,583,684 8,456,201 1,048,655 822,241 93,645 244,010
Shares redeemed (1,913,436,052) (1,769,313,517) (281,813,622) (194,459,365) (25,289,158) (43,391,623)
-------------- -------------- ------------ ------------ -------------- ---------------
Net increase (decrease) in shares (19,603,341) 125,643,674 19,472,831 11,126,893 (10,609,091) (1,514,863)
-------------- -------------- ------------ ------------ -------------- ---------------
-------------- -------------- ------------ ------------ -------------- ---------------
</TABLE>
26
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 1996
- --------------------------------------------------------------------------------
4. NET ASSETS
Net Assets at February 29, 1996, consisted of the following:
<TABLE>
<CAPTION>
CASH RESERVE FUND NEW YORK TAX EXEMPT FUND
----------------- ------------------------
<S> <C> <C>
Capital contributed, net $ 383,608,146 $ 96,596,875
Accumulated net realized loss from security
transactions (436) (13,126)
----------------- ------------
Net assets $ 383,607,710 $ 96,583,749
----------------- ------------
----------------- ------------
</TABLE>
5. CAPITAL LOSS CARRYOVER
At February 29, 1996, the Cash Reserve Fund and the New York Tax Exempt
Fund have capital loss carryovers of $507 and $13,126, respectively, to offset
possible future capital gains of each Fund. These carryovers expire as follows:
<TABLE>
<CAPTION>
FUND YEAR AMOUNT
- -------------------------------------------- ---- ------
<S> <C> <C>
Cash Reserve 2004 $ 507
New York Tax Exempt 1997 4,822
1998 4,026
2000 4,089
2002 189
</TABLE>
27
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<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
WARBURG PINCUS CASH RESERVE AND NEW YORK TAX EXEMPT FUNDS:
We have audited the accompanying statements of net assets of Warburg Pincus Cash
Reserve Fund and Warburg Pincus New York Tax Exempt Fund as of February 29,
1996, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
February 29, 1996. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Warburg Pincus Cash Reserve Fund and Warburg Pincus New York Tax Exempt Fund as
of February 29, 1996, and the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 8, 1996
28
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<PAGE>
<PAGE>
WARBURG PINCUS FUNDS
P.O. BOX 9030
BOSTON, MASSACHUSETTS 02205-9030
SHAREHOLDER SERVICES
1-800-927-2874
PROSPECTUSES
1-800-927-2874
[LOGO]
ANNUAL REPORT
FEBRUARY 29, 1996
[ ] WARBURG PINCUS
CASH RESERVE FUND
[ ] WARBURG PINCUS
NEW YORK TAX EXEMPT FUND
COUNSELLORS SECURITIES INC., DISTRIBUTOR
WPCRNY-2-0296
STATEMENT OF DIFFERENCES
------------------------
The division sign shall be expressed as...................... [div].
