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CONNECTICUT
DAILY
TAX FREE
INCOME
FUND, INC.
Semi-Annual Report
July 31, 1995
(Unaudited)
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<PAGE>
1
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CONNECTICUT
DAILY TAX FREE 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND, INC. 212/830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Connecticut Daily Tax Free
Income Fund, Inc. for the period February 1, 1995 through July 31, 1995.
The Fund had net assets of $90,826,664 and 592 active shareholders as of July
31, 1995. Dividends earned on a share held throughout the year were $.015 which,
when adjusted for the compounding effect of the reinvestment of dividends,
represents a 3.13% yield on an annual basis.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
/S/ Steven W. Duff
Steven W. Duff
President
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2
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CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS
JULY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Other Tax Exempt Investments (18.84%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Cheshire, CT BAN (a) 08/10/95 3.94% $ 1,000,058
500,000 Connecticut State HFA Single Family Housing
Mortgage Finance Project - Series A 11/15/95 3.93 503,532 Aa AA
1,000,000 Connecticut State Special Tax Obligation
Transportation Infrastructure
U.S. Government Guaranteed 10/15/95 3.79 1,028,269 Aaa AAA
3,000,000 East Lyme, CT BAN (a) 08/03/95 3.88 3,000,028
1,135,000 Montville, CT BAN (a) 10/05/95 3.99 1,135,077
2,000,000 Regional School District Number 15 of the State of Connecticut
(Towns of Middlebury and Southbury) (a) 02/15/96 3.43 2,000,520
1,685,000 Town of East Hartford, CT (a) 01/30/96 3.44 1,685,243
2,000,000 Town of Madison, CT BAN (a) 03/27/96 3.99 2,002,513
4,750,000 Town of Westport, CT BAN (a) 06/14/96 3.40 4,751,636
---------- ----------
17,070,000 Total Other Tax Exempt Investments 17,106,876
---------- ----------
<CAPTION>
Other Variable Rate Demand Investments (b) (58.07%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Connecticut Development Authority PCRB
(CT Light & Power) (a)
LOC Union Bank of Switzerland 09/01/28 3.95% $ 2,000,000
2,600,000 Connecticut HEFA (Bridgeport Hospital) - Series B
LOC Fuji Bank, Ltd. 07/01/25 3.45 2,600,000 VMIG-1 A1
5,000,000 Connecticut State Development Authority
(Corporation for Independent Living Project)
LOC Chemical Bank 07/01/15 3.70 5,000,000 VMIG-1
5,500,000 Connecticut State Development Authority
(Light & Power) - Series 93A
LOC Deutsche Bank A.G. 09/01/28 3.85 5,500,000 VMIG-1 A1+
3,500,000 Connecticut State Development Authority
(Western Mass Electric Co.) - Series 1993A
LOC Union Bank of Switzerland 09/01/25 3.65 3,500,000 VMIG-1 A1+
1,400,000 Connecticut State Development Authority IDRB
(Columbia Diamond Ring)
LOC Barclays Bank PLC 09/01/08 4.30 1,400,000 P1 A1+
</TABLE>
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<PAGE>
3
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<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Other Variable Rate Demand Investments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,000,000 Connecticut State Development Authority IDRB
(Gerber Scientific Inc.)
LOC Wachovia Bank & Trust Co., N.A. 12/01/14 3.80% $ 6,000,000 P1 A1+
3,500,000 Connecticut State Development Authority IDRB
(R.K. Bradley Assoc. Ltd.)
LOC Daiwa Bank, Ltd. and Royal Bank of Canada 12/01/20 4.75 3,500,000 VMIG-1
500,000 Connecticut State Development Authority IDRB
(Solid Waste Exeter Project)
LOC Sanwa Bank, Ltd. 12/01/19 3.90 500,000 A1+
1,500,000 Connecticut State Development Authority IDRB
(Rand Whitney Container Board L.P.)
LOC Sanwa Bank, Ltd. 08/01/23 3.50 1,500,000 P1 A1
1,400,000 Connecticut State Development Authority IDRB
(Vitta Corp. Project)
LOC Barclays Bank PLC 09/01/09 4.30 1,400,000 P1 A1+
3,800,000 Connecticut State Economic Recovery Note - Series B 06/01/96 3.75 3,800,000 VMIG-1 A1+
6,800,000 Connecticut State Special Tax Obligation RB
(Second Lien Trans. Infrastructure)
LOC Industrial Bank of Japan, Ltd. 12/01/10 3.85 6,800,000 VMIG-1 A1+
3,845,000 Hartford, CT RDA (Underwood Tower Project)
LOC Financial Security Assurance, Inc. 06/01/20 3.65 3,845,000 Aaa AAA
1,400,000 State of Connecticut HEFA - Series A
LOC Credit Locale de France 07/01/24 3.75 1,400,000 VMIG-1
4,000,000 State of Connecticut Special Assessment
Unemployment Compensation Advance Fund RB
LOC Mitsubishi Bank, Ltd. 11/01/01 3.90 4,000,000 VMIG-1 A1+
- ----------- ----------
52,745,000 Total Other Variable Rate Demand Instruments 52,745,000
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<CAPTION>
Put Bonds (13.05%)
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<C> <C> <C> <C> <C> <C> <C>
$ 1,800,000 Connecticut State HEFA (Yale University) - Series E
FGIC Insured 06/01/96 4.00% $ 1,800,000 VMIG-1 A1+
2,000,000 Connecticut State Housing Finance Co. - Series H-2 04/15/96 3.75 2,000,000 MIG-1 SP-1+
</TABLE>
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See Notes to Financial Statements.
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4
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CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JULY 31, 1995
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
<CAPTION>
Put Bonds (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 4,055,000 Connecticut State RRA
(Wallingford Resource Recovery) 86 Bond
LOC National Westminster Bank PLC 11/15/95 4.40% $ 4,055,000 P1 A1+
4,000,000 Connecticut State Special Assessment Unemployment
Compensation Advance Fund RB
FGIC Insured 07/01/96 3.90 4,000,000 VMIG-1 A1+
- ----------- ----------
11,855,000 Total Put Bonds 11,855,000
---------- ----------
<CAPTION>
Revenue Bonds (2.90%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Connecticut HFA Housing Mortgage
Finance Program Bonds 1993 - Series E-2 11/15/95 4.50% $ 1,000,000 VMIG-1 A1+
845,000 Connecticut HFA Housing Mortgage Finance
Program Bonds 1993 - Series H-1 09/01/95 4.30 845,000 VMIG-1 A1+
750,000 University of Puerto Rico RB (a)
U.S. Government Guaranteed 06/01/96 3.54 788,553
- ----------- ----------
2,595,000 Total Revenue Bonds 2,633,553
- ----------- ----------
<CAPTION>
Tax Exempt Commercial Paper (6.58%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 980,000 Connecticut HFA Mortgage Project 1989 - Series D 08/17/95 3.15% $ 980,000 A1+
1,000,000 Connecticut HFA Mortgage Project 1990 - Series C 09/14/95 3.20 1,000,000 VMIG-1 A1+
1,000,000 Connecticut State HEFA (Yale University) - Series L 08/14/95 3.00 1,000,000 VMIG-1 A1+
3,000,000 Connecticut State HEFA (Yale University) - Series M 09/07/95 3.55 3,000,000 VMIG-1 A1+
---------- ----------
5,980,000 Total Tax Exempt Commercial Paper 5,980,000
---------- ----------
<CAPTION>
Variable Rate Demand Instruments - Participations (b) (1.87%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 573,920 Connecticut State Development Authority IDRB (Finlay Bros.)
LOC Chemical Bank 10/01/00 5.69% $ 573,920 P1 A1
954,473 Connecticut State Development Authority IDRB (Nefco Holding)
LOC Chemical Bank 11/01/00 5.69 954,473 P1 A1
167,442 Puerto Rico - Darby Drug
LOC Chemical Bank 01/01/96 5.69 167,442 P1 A1
--------- ---------
1,695,835 Total Variable Rate Demand Instruments - Participations 1,695,835
--------- ---------
</TABLE>
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See Notes to Financial Statements.
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5
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<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Variable Rate Demand Instruments - Private Placements (b) (0.28%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 228,535 Connecticut State Development Authority IDRB
(Kanthal Finance Prod.)
LOC Chemical Bank 12/31/97 5.69% $ 228,535 P1 A1
29,670 Connecticut State Development Authority IDRB
(The Finlay Bros. Project)
LOC Chemical Bank 10/01/95 5.69 29,670 P1 A1
- ----------- --------
258,205 Total Variable Rate Demand Instruments - Private Placements 258,205
- ----------- --------
Total Investments (101.59%) (Cost $92,274,469+) 92,274,469
Liabilities, in Excess of Cash and Other Assets (-1.59%) ( 1,447,805)
-----------
Net Assets (100.00%), 90,841,828 Shares Outstanding (Note 3) $ 90,826,664
============
Net Asset Value, offering and redemption price per share $ 1.00
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
FOOTNOTES:
(a) The ratings noted for variable rate demand instruments are those of the
bank whose letter of credit secures such instruments or the guarantor of
the bond. P1 and A1+ are the highest ratings assigned for tax exempt
commercial paper. The Fund's Board of Directors has determined that
securities which are not rated are comparable quality to rated securities.
(b) Securities payable on demand at par including accrued interest (usually
with seven days notice) and unconditionally secured as to principal and
interest by bank letter of credit. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indices.
The rate shown is the rate in effect at the date of this statement.
<TABLE>
<CAPTION>
KEY:
<S> <C><C> <C> <C><C>
BAN = Bond Anticipation PCFA = Pollution Control Finance Authority
HEFA = Health and Education Facilities Authority PCRB = Pollution Control Revenue Bond
HFA = Housing Finance Authority RB = Revenue Bond
IDRB = Industrial Development Revenue Bond RDA = Revenue Development Authority
LOC = Letter of Credit RRA = Resource Recovery Authority
</TABLE>
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See Notes to Financial Statements.
<PAGE>
6
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CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JULY 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest...................................................................... $ 1,685,351
-------------------
Expenses: (Note 2)
Investment management fee.................................................... 126,611
Administration fee........................................................... 71,746
Shareholder servicing fee.................................................... 84,407
Custodian, shareholder servicing and related shareholder expenses............ 39,224
Legal, compliance and filing fees............................................ 14,947
Audit and accounting......................................................... 34,337
Directors' fees.............................................................. 7,612
Other........................................................................ 4,322
------------------
Total expenses........................................................... 383,206
------------------
Net investment income........................................................ 1,302,145
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments......................................... 5,472
------------------
Increase in net assets from operations.......................................... $ 1,307,617
==================
</TABLE>
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See Notes to Financial Statements.
<PAGE>
7
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CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
July 31, 1995 January 31, 1995
------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income...................................... $ 1,302,145 $ 1,801,080
Net realized gain (loss) on investments................... 5,472 2,109
------------------ ---------------
Increase (decrease) in net assets from operations............... 1,307,617 1,803,189
Dividends to shareholders from net investment income............ ( 1,302,145 )* ( 1,801,080)*
Capital share transactions (Note 3)............................. 9,020,332 ( 38,752,190)
------------------ ---------------
Total increase (decrease).................................. 9,025,804 ( 38,750,081)
Net assets:
Beginning of period........................................ 81,800,860 120,550,941
------------------ ---------------
End of period.............................................. $ 90,826,664 $ 81,800,860
================== ===============
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
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See Notes to Financial Statements.
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8
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CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
1. Summary of Accounting Policies.
Connecticut Daily Tax Free Income Fund, Inc. is a no-load, non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940. Its financial statements are prepared in accordance with generally
accepted accounting principles for investment companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management L.P. (Manager) at the annual rate of .30%
of the Fund's average daily net assets. The Manager has agreed to reimburse the
Fund for its expenses (exclusive of interest, taxes, brokerage, and
extraordinary expenses) which in any year exceed the limits on investment
company expenses prescribed by any state in which the Fund's shares are
qualified for sale. No such reimbursement was required for the period ended July
31, 1995.
Pursuant to an Administrative Services Contract the Fund pays to the Manager an
annual fee of .20% of the Fund's average daily net assets.
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9
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CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and Reich & Tang Distributors L.P. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement. For
its services under the Shareholder Servicing Agreement, the Distributor receives
from the Fund a fee equal to .20% of the Fund's average daily net assets. There
were no additional expenses borne by the Fund pursuant to the Distribution Plan.
During the period ended July 31, 1995, the Manager voluntarily waived
administration fees of $12,661.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$3,000 per annum plus $500 per meeting attended.
Included in the Statement of Operations under the caption "Custodian,
shareholder servicing and related shareholder expenses" are fees of $2,958 paid
to Fundtech Services L.P., an affiliate of the Manager, as servicing agent for
the Fund.
3. Capital Stock.
At July 31, 1995, 20,000,000,000 shares of $.001 par value stock were authorized
and capital paid in amounted to $90,841,828. Transactions in capital stock, all
at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
July 31, 1995 January 31, 1995
--------------- ----------------
<S> <C> <C>
Sold........................................... 78,739,306 190,586,219
Issued on investment of dividends.............. 1,182,185 1,674,156
Redeemed....................................... ( 70,901,159) ( 231,012,565)
------------------ -------------------
Net increase (decrease)........................ 9,020,332 ( 38,752,190)
================== ===================
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses at July 31, 1995 amounted to $15,164.
At July 31, 1995 the Fund had tax basis capital losses of $22,592 which may be
carried to offset future capital gains. Such losses expire January 31, 1996.
5.Concentration of Credit Risk.
The Fund invests primarily in obligations of political subdivisions of the State
of Connecticut and, accordingly, is subject to the credit risk associated with
the non-performance of such issuers. Approximately 60% of these investments are
further secured, as to principal and interest, by letters of credit issued by
financial institutions. The Fund maintains a policy of monitoring its exposure
by reviewing the creditworthiness of the issuers, as well as that of the
financial institutions issuing the letters of credit, and by limiting the amount
of holdings with letters of credit from one financial institution.
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10
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CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
6. Selected Financial Information.
<TABLE>
<CAPTION>
Six Months Year Ended January 31,
----------------------------------------------------------
Ended
July 31, 1995 1995 1994 1993 1992 1991
------------- ------ ------ ------ ------ -----
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income.............. 0.015 0.023 0.017 0.021 0.035 0.049
Less distributions:
Dividends from net investment income ( 0.015) ( 0.023) ( 0.017) ( 0.021) ( 0.035) ( 0.049)
------- -------- -------- -------- ------- -------
Net asset value, end of period........ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= =======
Total Return.......................... 3.13% 2.29% 1.70% 2.12% 3.56% 5.01%
Ratios/Supplemental Data
Net assets, end of period (000)....... $90,827 $81,801 $120,551 $129,297 $185,339 $178,335
Ratios to average net assets:
Expenses.......................... .91%*+ .88% 0.87% 0.86%+ 0.79% 0.80%
Net investment income............. 3.09%*+ 2.25% 1.68% 2.14%+ 3.51% 4.92%
* Annualized
+ Net of administration and shareholder servicing fees waived equivalent to .03%
and 0.06%, respectively, of average net assets.
</TABLE>
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[This Page Intentionally Left Blank.
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This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
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Connecticut Daily Tax Free Income Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10020
Custodian, Transfer & Dividend
Disbursing Agent
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
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