<PAGE> 1
---------------------------------------------------------------------------
ANNUAL REPORT TO SHAREHOLDERS MAY 31, 1995
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[NAVIGATOR MONEY MARKET FUND LOGO]
A member of the NAVIGATOR GROUP of FUNDS
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<PAGE> 2
CHAIRMAN'S LETTER
July 24, 1995
Dear Shareholder:
-As you know, the Central Bank had raised interest rates seven times
since February, 1994, in a concerted effort to slow the economy and
head off inflation which so often accompanies an economic boom. Since
our last semi-annual report, the Federal Reserve's rate increases have
had their desired effect. In fact, growth in first quarter '95 slowed
to a 2.7% rate, and current estimates for second quarter show growth
falling below 1%.
In an effort to soften the landing and avoid a recession, the Federal
Reserve reversed course at the recent July meeting and eased monetary
policy by 25 basis points. This lowered the fed funds target rate to
5.75%, with the more symbolic discount rate left at 5.25%. It remains
uncertain whether this modest adjustment is the beginning of a series
of easing moves designed to bolster faltering growth, or, simply an
effort to fine tune an economy in the midst of an economic lull.
Should inflationary pressures remain low, and the economy fail to
resume moderate growth, we would anticipate that the Federal Reserve
will move to continue to lower interest rates through the balance of
1995 to improve economic growth.
I'd like to also take another opportunity to thank you for your
continued support and confidence in the Navigator Money Market Fund.
Please be assured of our commitment to continue to provide you with a
high quality portfolio and competitive returns.
Sincerely,
/s/ ROBERT J. WALKER, JR.
Robert J. Walker, Jr.
Chairman
1
<PAGE> 3
INVESTMENT REPORT
With the start of the second half of the Fund's fiscal year, we saw
short-term interest rates still rising, and, the yield on the 30-year
bond reaching the 8% level. And, with the calendar year-end
approaching, the U.S. economy was very strong and further Fed
tightening was expected. Some forecasts actually had Fed Funds peaking
at 7 1/2-8% during 1995. We had targeted the Navigator Money Market
Fund at an average maturity of less than 30 days.
Then, in early February '95 the Fed did raise interest rates again
bringing the discount rate to 5.25%, and the Fed Funds rate to 6%. This
was the 7th, and the final, tightening by the Fed in that 14 month
cycle. The market perceived that interest rates had probably peaked,
and that yields would likely decline. In early January '95, the
Navigator Money Market Fund began to extend our average maturity, from
29 days at year-end, to 50 days by March '95. During the Fund's fiscal
year, our average monthly yield increased from 3.75% to 5.83%, or, 208
basis points.
With the Fed's recent move in early July to lower interest rates, the
Navigator Money Market Fund will be targeting an average maturity in
the 30-40 day range, with the expectation of further rate cuts. As
we've traditionally done, primary emphasis will continue to be on
portfolio quality. Each of our investment decisions are tested for
credit quality and liquidity.
2
<PAGE> 4
PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
Average Average
Monthly Compound Maturity
Month Yield Yield* (Month-end)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 June 4.00% 4.08% 39 days
July 4.14 4.22 25
August 4.23 4.31 20
September 4.42 4.51 29
October 4.63 4.73 23
November 4.95 5.07 33
December 5.43 5.57 29
1995 January 5.64 5.79 35
February 5.82 5.98 37
March 5.86 6.02 50
April 5.82 5.98 47
May 5.83 5.99 41
-------------------- ------- ------- --------
Average Annualized
Yields and Maturity 5.06% 5.19% 34 days
------- ------- --------
------- ------- --------
</TABLE>
*Compound yields assume reinvestment of dividends.
MATURITY DIVERSIFICATION SCHEDULE
AS OF MAY 31, 1995
<TABLE>
<CAPTION>
Amount
(Amortized Cost) % of Portfolio % Cumulative
--------------------------------------------------------------------------
<S> <C> <C> <C>
One Day $ 45,990,783 19.3% 19.3%
2-7 days 22,748,235 9.5 28.8
8-30 days 53,206,140 22.3 51.1
31-60 days 40,209,197 16.8 67.9
61-90 days 49,882,732 20.9 88.8
Over 90 days 26,860,977 11.2 100.0
--------------
Total $238,898,064
--------------
--------------
</TABLE>
SHAREHOLDER MEETING RESULTS
A special meeting of shareholders of the Fund was held on May 17, 1995.
At the meeting, 207,844,655.09 shares voted on a proposal to elect
directors of the fund. The shares voted unanimously to elect Robert J.
Walker, Jr., Richard G. Gilmore and Robert E. Keith as directors.
207,606,223.16 shares voted to reelect Philip D. Croll and Jan J.
Wieckowski, with 238,431.93 shares withholding their authority to vote
for the reelection of either director.
3
<PAGE> 5
FINANCIAL STATEMENTS
Statement of Net Assets
May 31, 1995
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 65.21%
AUTOMOBILE MANUFACTURER -- 3.33%
$ 5,000,000 Ford Motor Credit Corp......................... 06/29/95 5.98% $ 4,976,744
3,000,000 Ford Motor Credit Corp......................... 08/15/95 6.20% 2,961,250
------------
TOTAL AUTOMOBILE MANUFACTURER.......................................... 7,937,994
-------------------------------------------------------------------------------------------------------
AUTOMOTIVE, FINANCE -- 2.09%
5,000,000 USL Capital Corporation........................ 07/12/95 5.92% 4,966,289
------------
TOTAL AUTOMOTIVE, FINANCE.............................................. 4,966,289
-------------------------------------------------------------------------------------------------------
CONGLOMERATE -- 4.16%
5,000,000 General Electric Capital....................... 06/30/95 5.93% 4,976,115
5,000,000 General Electric Capital....................... 08/14/95 5.92% 4,939,156
------------
TOTAL CONGLOMERATE..................................................... 9,915,271
-------------------------------------------------------------------------------------------------------
CONSUMER ELECTRONICS -- 2.89%
5,000,000 Sharp Electronics.............................. 09/15/95 6.15% 4,909,458
2,000,000 Sharp Electronics.............................. 09/15/95 6.08% 1,964,196
------------
TOTAL CONSUMER ELECTRONICS............................................. 6,873,654
-------------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES -- 4.26%
2,625,000 Hasbro, Inc.................................... 10/02/95 6.16% 2,569,753
4,000,000 Hasbro, Inc.................................... 10/04/95 6.12% 3,915,000
3,750,000 Hasbro, Inc.................................... 10/13/95 6.14% 3,664,296
------------
TOTAL CONSUMER NON-DURABLES............................................ 10,149,049
-------------------------------------------------------------------------------------------------------
FINANCE, CORPORATE RECEIVABLES -- 11.83%
4,000,000 Asset Securitization Coop...................... 06/29/95 5.98% 3,981,396
5,000,000 Asset Securitization Coop...................... 07/31/95 5.99% 4,950,083
5,000,000 Corporate Asset Funding........................ 06/14/95 6.03% 4,989,113
5,000,000 Corporate Asset Funding........................ 08/21/95 5.92% 4,933,400
4,350,000 Preferred Receivables Fund..................... 06/08/95 5.97% 4,344,950
5,000,000 Preferred Receivables Fund..................... 07/11/95 5.94% 4,967,000
------------
TOTAL FINANCE, CORPORATE RECEIVABLES................................... 28,165,942
-------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES, DIVERSIFIED -- 6.64%
7,500,000 John Deere Capital............................. 08/02/95 5.94% 7,423,275
3,500,000 Marsh & McLennon............................... 07/24/95 6.10% 3,468,568
5,000,000 Marsh & McLennon............................... 08/22/95 6.08% 4,930,756
------------
TOTAL FINANCIAL SERVICES, DIVERSIFIED.................................. 15,822,599
-------------------------------------------------------------------------------------------------------
INDUSTRIAL & COMMERCIAL SERVICES -- 4.19%
5,000,000 PHH............................................ 06/21/95 5.95% 4,983,472
5,000,000 PHH............................................ 06/23/95 5.94% 4,981,850
------------
TOTAL INDUSTRIAL & COMMERCIAL SERVICES................................. 9,965,322
-------------------------------------------------------------------------------------------------------
INDUSTRIAL DIVERSIFIED -- 4.14%
5,000,000 Hanson Finance (U.K.) PLC...................... 08/17/95 5.95% 4,936,368
5,000,000 Hanson Finance (U.K.) PLC...................... 08/31/95 5.90% 4,925,431
------------
TOTAL INDUSTRIAL DIVERSIFIED........................................... 9,861,799
-------------------------------------------------------------------------------------------------------
INSURANCE, FULL LINE -- 2.06%
5,000,000 Prudential Funding............................. 09/15/95 5.92% 4,912,844
------------
TOTAL INSURANCE, FULL LINE............................................. 4,912,844
-------------------------------------------------------------------------------------------------------
MEDIA-PUBLISHING -- 4.18%
5,000,000 McGraw-Hill.................................... 06/06/95 6.13% 4,995,743
5,000,000 McGraw-Hill.................................... 07/18/95 6.07% 4,960,376
------------
TOTAL MEDIA-PUBLISHING................................................. 9,956,119
-------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
<C> <S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT -- 4.16%
4,000,000 Xerox Corporation.............................. 07/13/95 6.00% $ 3,972,000
6,000,000 Xerox Corporation.............................. 08/15/95 5.93% 5,925,875
------------
TOTAL OFFICE EQUIPMENT................................................. 9,897,875
-------------------------------------------------------------------------------------------------------
OIL, INTEGRATED MAJORS -- 1.25%
3,000,000 Repsol International Financial B.V............. 07/10/95 6.19% 2,979,883
------------
TOTAL OIL, INTEGRATED MAJORS........................................... 2,979,883
-------------------------------------------------------------------------------------------------------
POLLUTION CONTROL -- 1.66%
4,000,000 WMX Technologies (Waste Management)............ 08/09/95 6.30% 3,951,700
------------
TOTAL POLLUTION CONTROL................................................ 3,951,700
-------------------------------------------------------------------------------------------------------
SECURITIES DEALER -- 2.09%
5,000,000 Goldman Sachs Group L.P........................ 07/07/95 6.24% 4,968,800
------------
TOTAL SECURITIES DEALER................................................ 4,968,800
-------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 2.09%
5,000,000 U.S. West Capital Funding Inc.................. 07/11/95 5.99% 4,966,722
------------
TOTAL TELECOMMUNICATIONS............................................... 4,966,722
-------------------------------------------------------------------------------------------------------
TOBACCO -- 4.19%
5,000,000 Philip Morris Companies........................ 06/16/95 6.00% 4,987,500
5,000,000 Philip Morris Companies........................ 06/19/95 6.00% 4,985,000
------------
TOTAL TOBACCO.......................................................... 9,972,500
-------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER................................................. 155,264,362
-------------------------------------------------------------------------------------------------------
MEDIUM TERM NOTES, VARIABLE -- 3.36%
SECURITIES DEALER -- 3.36%
8,000,000 Merrill Lynch & Co., Inc....................... 06/01/95* 6.27% 8,000,000
------------
TOTAL SECURITIES DEALER................................................ 8,000,000
-------------------------------------------------------------------------------------------------------
TOTAL MEDIUM TERM NOTES, VARIABLE...................................... 8,000,000
-------------------------------------------------------------------------------------------------------
U.S. AGENCIES -- 17.13%
2,000,000 Federal Home Loan Bank......................... 06/01/95* 4.43% 1,993,509
10,000,000 Federal Home Loan Mortgage Corporation......... 06/25/95* 5.08% 10,000,000
2,715,000 Student Loan Marketing Association............. 06/06/95* 6.27% 2,721,479
1,200,000 Student Loan Marketing Association............. 06/01/95* 4.43% 1,197,274
5,000,000 Student Loan Marketing Association............. 06/02/95 6.12% 5,000,013
10,000,000 Student Loan Marketing Association............. 06/06/95* 6.04% 10,000,000
5,000,000 Federal National Mortgage Association.......... 07/17/95 6.33% 4,959,558
5,000,000 Federal National Mortgage Association.......... 08/22/95 6.07% 4,930,869
-------------------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES.................................................... 40,802,702
-------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 7
Statement of Net Assets (Cont.)
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
<C> <S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 14.63%
11,000 First Boston
dated 05/30/95, due 06/05/95
(collateralized by
U.S. Treasury Notes; market value $11,241).............. 5.82% $ 11,000
10,000 Goldman Sachs
dated 05/30/95, due 06/05/95
(collateralized by
U.S. Treasury Bonds; market value $10,289).............. 5.82% 10,000
10,000 Merrill Lynch
dated 05/30/95, due 06/05/95
(collateralized by
U.S. Treasury Notes; market value $10,235).............. 5.80% 10,000
34,800,000 Paine Webber
dated 05/31/95, due 06/01/95
(collateralized by
U.S. Government Agency-issued,
Mortgage-backed Securities;
Market value $35,745,494)............................... 6.18% 34,800,000
-------------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS............................................ 34,831,000
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
TOTAL VALUE OF SECURITIES OWNED -- 100.33%
(which approximates cost for federal income tax purposes)............ $238,898,064
LESS LIABILITIES REDUCED BY OTHER ASSETS -- (0.33%).................... (789,198)
------------
NET ASSETS APPLICABLE TO 238,111,095 SHARES OUTSTANDING;
EQUIVALENT TO $1.00 PER SHARE -- 100.00%............................. $238,108,866
------------
------------
</TABLE>
------------------------------------
* = The interest rate shown for each
of these obligations is the rate
as of May 31, 1995 and the
maturity shown is the next
interest re-adjustment date.
See accompanying notes.
6
<PAGE> 8
Statement of Operations
For the Year Ended May 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest....................................................... $14,740,203
-----------
EXPENSES:
Investment Advisory Fees....................................... 557,258
Less Investment Advisory Fees Waived by Management............. (402,425)
Administrative Fees............................................ 278,512
Custodian and Transfer Agent Fees.............................. 154,899
Insurance...................................................... 19,053
Professional Fees.............................................. 59,495
Registration and Filing Fees................................... 24,090
Taxes -- other than Income..................................... 65,773
Miscellaneous.................................................. 35,551
-----------
Total Expenses.............................................. 792,206
-----------
NET INVESTMENT INCOME............................................ 13,947,997
Net Realized Loss on Securities Sold........................... (2,706)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $13,945,291
-----------
-----------
</TABLE>
See accompanying notes.
7
<PAGE> 9
Statements of Changes in Net Assets
For the Years Ended May 31, 1995
and May 31, 1994
<TABLE>
<CAPTION>
6/01/94 6/01/93
TO 5/31/95 TO 5/31/94
------------ ------------
<S> <C> <C>
OPERATIONS:
Net Investment Income........................... $ 13,947,997 $ 11,611,668
Net Realized Gain (Loss) on Securities Sold..... (2,706) 17,430
------------ ------------
Net Increase in Net Assets
Resulting from Operations.................... 13,945,291 11,629,098
------------ ------------
DIVIDENDS DISTRIBUTED FROM:
Net Investment Income........................... (13,947,997) (11,611,668)
Net Realized Gain............................... (3,406) --
------------ ------------
Total Dividends Distributed..................... (13,951,403) (11,611,668)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold....................... 876,669,817 659,817,872
Net Asset Value of Shares Issued
upon Reinvestment of Dividends............... 179,501 573,376
Cost of Shares Repurchased...................... (979,870,062) (736,387,276)
------------ ------------
Net Decrease in Net Assets
Derived from Capital Share Transactions...... (103,020,744) (75,996,028)
------------ ------------
NET DECREASE IN NET ASSETS................... (103,026,856) (75,978,598)
NET ASSETS:
Beginning of Period............................. 341,135,722 417,114,320
------------ ------------
End of Period................................... $238,108,866 $341,135,722
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
8
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
May 31, 1995
NOTE 1 -- ORGANIZATION
Navigator Money Market Fund -- Prime Obligations Portfolio (the "Fund")
is a portfolio offered by Navigator Money Market Fund, Inc. (the
"Company"), a no-load, diversified, open-end investment company
registered under the Investment Company Act of 1940, as amended.
Shares of the Fund are sold by Fairfield Group, Inc. ("Fairfield"), the
Manager, only to banks and other institutional investors for the
investment of their own funds, or funds for which they act in a
fiduciary, agency, or custodial capacity.
As Manager of the Company, Fairfield, a wholly-owned subsidiary of Legg
Mason, Inc., serves as the Fund's Investment Adviser, Administrator,
and Distributor.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
Interest income and expenses are recorded on an accrual basis. Interest
income includes, when applicable, the pro rata amortization of premiums
and discounts.
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Investment securities are valued at
amortized cost, which approximates market value. Realized gains and
losses are determined by using the specific identification method. The
net realized capital loss of $2,706 for the year ended May 31, 1995
resulted from sales of securities with proceeds and costs of
$39,943,222 and $39,945,928, respectively.
The fair value of securities for which prices cannot be determined
using established procedures will be valued in good faith by the Board
of Directors. No investments were so valued at May 31, 1995.
Net investment income, determined as gross income less expenses, is
declared as a dividend each day. Declared dividends are distributable
to shareholders monthly on the first business day of the next month.
Dividends payable at May 31, 1995 amounted to $1,283,114.
No provision for federal income taxes is made since it is the intention
of the Fund to qualify as a regulated investment company under the
provisions of the Internal Revenue Code and to make requisite
distributions to shareholders which will relieve it from Federal income
and excise taxes.
For federal income tax purposes, net realized capital losses generated
in the Fund may be carried forward and applied against future capital
gains.
NOTE 3 -- INVESTMENT ADVISORY AND ADMINISTRATIVE FEES
As Manager, Fairfield provides investment advisory and administrative
services to the Fund pursuant to a Management Agreement dated April 17,
1993. Under the terms of such Agreement, the Manager is entitled to
receive an annual fee for investment advisory services of .20% on the
first $500 million of the average net assets of the Fund; .15% on the
next $1 billion; and .10% on average net assets in excess of $1.5
billion. Such fee is computed daily and paid monthly.
The Manager is also entitled to receive an administrative fee at the
annual rate of .10% on the first $1.5 billion of the average net assets
of the Fund and .05% thereafter. Such fee is computed daily and paid
monthly.
During the year ended May 31, 1995, the management fees (investment
advisory and administrative) earned by Fairfield totalled $835,770. Of
the investment advisory fees earned, $402,425 was voluntarily waived by
the Manager in order to assist the Fund in maintaining a competitive
expense ratio. At May 31, 1995, Fairfield was owed $13,227 (after
partial fee waiver) for investment advisory services and $22,045 in
administrative fees.
9
<PAGE> 11
NOTE 4 -- CUSTODIAN AND TRANSFER AGENT FEES
Custodial services are provided to the Fund by CoreStates Bank, N.A.
Fund/Plan Services, Inc. is the Fund's Transfer Agent and, as such,
provides transfer agency, dividend disbursing, and bookkeeping
services.
NOTE 5 -- OTHER TRANSACTIONS WITH AFFILIATES
Fairfield also serves as the Company's exclusive Distributor; however,
it receives no fees for providing distribution services.
Certain officers and directors of the Company are also officers and
directors of Fairfield. Such officers and directors are paid no fees by
the Fund for serving as officers and directors.
The Fund has paid legal fees to a law firm with which the Secretary of
the Company is associated.
NOTE 6 -- REPURCHASE AGREEMENTS
The investment policies of the Fund permit participation in repurchase
agreements. Collateral for such agreements is held by the Fund's
Custodian in the Federal Reserve's book-entry system. The Fund monitors
its repurchase agreements on a daily basis to ensure that the market
value of the collateral underlying the agreements is maintained at not
less than 100% of the repurchase price.
The Fund may participate in repurchase agreements arranged by Fairfield
for a fee not to exceed 1% of the purchase or sale price of the
transaction. During the year ended May 31, 1995, Fairfield received
$24,211 in fees with respect to such transactions.
NOTE 7 -- CAPITAL SHARES
At May 31, 1995, there were 2 billion shares of $.001 par value common
stock authorized with respect to the Fund. Transactions in capital
shares of the Fund during the periods indicated were as follows:
<TABLE>
<CAPTION>
6/01/94 6/01/93
TO 5/31/95 TO 5/31/94
------------ ------------
<S> <C> <C>
Shares sold....................................... 876,669,817 659,817,872
Shares issued upon reinvestment of dividends...... 179,501 573,376
Shares repurchased................................ (979,870,062) (736,387,276)
------------ ------------
Net decrease...................................... (103,020,744) (75,996,028)
Outstanding at beginning of period................ 341,131,839 417,127,867
------------ ------------
Outstanding at end of period...................... 238,111,095 341,131,839
------------ ------------
------------ ------------
</TABLE>
10
<PAGE> 12
NOTE 8 -- FINANCIAL HIGHLIGHTS
Financial highlights for a share of the Fund outstanding
throughout the periods indicated
were as follows:
<TABLE>
<CAPTION>
6/01/94 6/01/93 6/01/92 6/01/91 6/01/90 6/01/89
TO TO TO TO TO TO
5/31/95 5/31/94 5/31/93 5/31/92 5/31/91 5/31/90
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
Income from
Investment Operations:
Net Investment Income............. .0501 .0314 .0323 .0499 .0728 .0853
Net Gain on Securities (both
realized and unrealized)........ -- -- -- .0001 -- --
------ ------ ------ ------ ------ ------
Total Income
from Investment
Operations................... .0501 .0314 .0323 .0500 .0728 .0853
------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from
Net Investment Income........... (.0501) (.0314) (.0323) (.0499) (.0728) (.0853)
Dividends from
Capital Gains................... -- -- -- (.0001) -- --
------ ------ ------ ------ ------ ------
Total Distributions........... (.0501) (.0314) (.0323) (.0500) (.0728) (.0853)
------ ------ ------ ------ ------ ------
Net Asset Value,
end of period....................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return......................... 5.19% 3.18% 3.28% 5.12% 7.53% 8.87%
Net Assets,
end of period (000)................. $238,109 $341,136 $417,114 $443,368 $563,265 $508,859
Ratios and Supplemental Data:
Ratio of Expenses
to Average Net Assets............. .28% .27% .26% .22% .21% .22%
Ratio of Expenses
to Average Net Assets,
excluding Fee Waivers............. .43% .42% .41% .37% .35% .37%
Ratio of Net Investment Income
to Average Net Assets............. 5.01% 3.14% 3.23% 4.99% 7.28% 8.53%
Ratio of Net Investment Income
to Average Net Assets,
excluding Fee Waivers............. 4.86% 2.99% 3.08% 4.84% 7.14% 8.38%
------------------------------
* Commencement of Operations
(+) Annualized
<CAPTION>
6/01/88 6/01/87 6/01/86 7/22/85*
TO TO TO TO
5/31/89 5/31/88 5/31/87 5/31/86
------ ------ ------ ------
<S> <C><C> <C> <C> <C>
Net Asset Value,
beginning of period................. $1.00 $1.00 $1.00 $ 1.00
------ ------ ------ -------
Income from
Investment Operations:
Net Investment Income............. .0859 .0686 .0614 .0645
Net Gain on Securities (both
realized and unrealized)........ -- -- -- --
------ ------ ------ -------
Total Income
from Investment
Operations................... .0859 .0686 .0614 .0645
------ ------ ------ -------
Less Distributions:
Dividends from
Net Investment Income........... (.0859) (.0686) (.0614) (.0645)
Dividends from
Capital Gains................... -- -- -- --
------ ------ ------ -------
Total Distributions........... (.0859) (.0686) (.0614) (.0645)
------ ------ ------ -------
Net Asset Value,
end of period....................... $1.00 $1.00 $1.00 $ 1.00
------ ------ ------ -------
------ ------ ------ -------
Total Return......................... 8.94% 7.08% 6.32% 7.50% (+)
Net Assets,
end of period (000)................. $464,483 $326,406 $234,560 $177,519
Ratios and Supplemental Data:
Ratio of Expenses
to Average Net Assets............. .22% .23% .17% .19% (+)
Ratio of Expenses
to Average Net Assets,
excluding Fee Waivers............. .38% .39% .43% .49% (+)
Ratio of Net Investment Income
to Average Net Assets............. 8.59% 6.86% 6.14% 7.50% (+)
Ratio of Net Investment Income
to Average Net Assets,
excluding Fee Waivers............. 8.43% 6.69% 5.88% 7.20% (+)
------------------------------
* Commencement of Operations
(+) Annualized
</TABLE>
11
<PAGE> 13
Report of Independent Auditors
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
NAVIGATOR MONEY MARKET FUND -- PRIME OBLIGATIONS PORTFOLIO
We have audited the accompanying statement of net assets of the
Navigator Money Market Fund -- Prime Obligations Portfolio as of May
31, 1995, and the related statement 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 nine years in the period then ended and for the period July 22,
1985 (commencement of operations) to May 31, 1986. These financial
statements and financial highlights are the responsibility of the
Fund's 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 investments owned as of May 31, 1995, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of the Navigator Money Market Fund -- Prime
Obligations Portfolio at May 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the
two years in the period then ended, and the financial highlights for
each of the nine years in the period then ended and for the period July
22, 1985 (commencement of operations) to May 31, 1986, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
July 10, 1995
12
<PAGE> 14
INVESTMENT ADVISER,
ADMINISTRATOR,
AND DISTRIBUTOR
Fairfield Group, Inc.
Horsham, PA 19044
LEGAL COUNSEL
Morgan, Lewis & Bockius
Philadelphia, PA 19103
AUDITORS
Ernst & Young LLP
Philadelphia, PA 19103
DIRECTORS
Robert J. Walker, Jr.
Philip D. Croll
Richard G. Gilmore
Jan J. Wieckowski
Robert E. Keith
[NAVIGATOR MONEY MARKET FUND LOGO]
200 Gibraltar Road
Horsham, PA 19044
1-800-441-3885
