<PAGE> 1
[NAVIGATOR MONEY MARKET FUND LOGO] [NAVIGATOR TAX-FREE MONEY MARKET FUND LOGO]
CHART
THE RIGHT
COURSE
FOR YOUR
CASH
MANAGEMENT
SERVICES.
ANNUAL REPORT TO SHAREHOLDERS
February 29, 1996
<PAGE> 2
As a trust banker, you demand cash management services that provide safety of
principal, competitive rates of return, and exceptional personal service. The
Fairfield Group understands these requirements, and delivers investment options
that fulfill these important cash management objectives.
Our total resources are dedicated to finding imaginative solutions to the
complex issues facing you in today's ever-changing, competitive marketplace.
With the performance history of the Navigator Funds, the Fairfield Group has
become a recognized innovator in providing cost-effective investment products
for the trust industry with some of the lowest expense ratios in the industry.
Consistent with our founding principles, we provide an individually tailored,
highly personalized service that has been developed through the more than 200
years of combined trust and securities management experience of our
professional staff.
INVESTMENT FLEXIBILITY
The Navigator Group of Funds can assist you in meeting all of the cash
management requirements of your accounts. The Funds provide high levels of
current income, liquidity and that indispensable fiduciary requirement - safety
of principal. With a variety of investment choices, you can construct a cash
management program that satisfies the risk and return requirements of virtually
all your clients. At the same time, Navigator enables you to develop a
"private-label" designation for your cash management program. This gives you
the significant advantage of assigning your bank's own identity to each
investment vehicle. The Fairfield Group will provide the marketing support
necessary to assist you in communicating with your customers on the advantages
and operation of this innovative program.
LOW EXPENSE RATIO STRATEGY
Cost-effective management is one of the hallmarks of the Navigator Funds. This
arises from a business strategy that was developed to operate the Navigator
Funds with a significantly lower expense ratio than most of our competitors.
We believe that
<PAGE> 3
CHAIRMAN'S LETTER
April 12, 1996
Dear Shareholder:
Events of Importance
- Year-End Consolidation -- Fairfield is proud to present a new format
for the Annual Report to Shareholders, which reflects both the Navigator
Money Market Fund results and the Navigator Tax-Free Money Market Fund
results into one report. We will also be including the Navigator Money
Market and Navigator Tax-Free Money Market in the same prospectus. As a
result of the decision to make the Funds year-ends consistent, this will
translate into lower operating costs for the Funds.
- 2A-7 Revisions -- Recently, the Securities and Exchange Commission
announced some revisions to rule 2a-7; the rule that governs money fund
investment parameters. These amendments are an attempt by the governing
body to reduce the possibility of a money fund's net asset value
deviating from $1.00. (You may recall that the SEC's first pass in early
1991 was largely directed at taxable money funds.) These new rules are
directed toward tax-exempt money market funds and will be phased in over
the coming months. Many of the new limitations will be non-events for
the Navigator fund. It is the Fund's advisor's opinion that the changes
should serve to level the playing field for the industry. For the most
part, the more aggressively managed funds will be forced to diversify
more, to limit that diversification in some instances, and to require a
more formal review process for issues that have not been rated by one of
the nationally recognized rating organizations. Your Fund's advisor is
pleased to see that the SEC shares in the conservative investment
philosophy Navigator has been practicing for the last decade.
We have continued to follow our time-tested philosophy of quality
investing. In this continuing period of low interest rates, with
speculation of rates going even lower, some investment managers have
found it tempting to reduce investment standards in order to stretch for
a few more basis points of yield. I can assure you that is not the
practice with the Navigator Money Market or Navigator Tax-Free Money
Market Funds. Quality is something we take very seriously every day at
our organization.
Fairfield was built on a quality tradition, and that philosophy remains
unchanged. We will always strive to provide all our shareholders with a
very high quality portfolio, while still delivering industry-competitive
returns.
I'd like to thank you again for your continued confidence in the
Navigator Money Market and Navigator Tax-Free Money Market Funds. Our
decade-long commitment of providing a competitive product with a minimal
degree of risk remains unchanged.
Sincerely,
/s/ ROBERT J. WALKER, JR.
-------------------------
Robert J. Walker, Jr.
Chairman
1
<PAGE> 4
INVESTMENT REPORT
Navigator Money Market Fund
- Since our last Investment Report to you in November '95, the Federal
Reserve approved another slight easing of monetary policy, and lowered
the target federal funds rate 25 basis points to 5.25% at the January
FOMC meeting. The discount rate was also reduced a similar amount to
5.0%. The Fed cited moderating economic expansion and subdued
inflationary pressures in its decision to reduce the two key interest
rates.
During the past three months, while some market participants assumed
that the Fed would continue to ease, the Navigator Money Market Fund
benefitted by continuing with the strategy of focusing on investments on
the shorter end of the yield curve, which offered a substantial yield
advantage over longer maturing alternatives. However, recently the Fund
changed course and began a program to extend the average maturity of the
portfolio. Following the release of a surprisingly strong employment
report in early March, the likelihood that the Fed would not lower
interest rates at their March and most likely May meetings, pushed rates
on short-term money market instruments to higher levels. The Fund was
well positioned at that time to take advantage of the backup in rates,
and lengthened the average maturity of the portfolio, locking in highly
attractive rates with maturities ranging from six to nine months. We
believe the timing of this extension will result in a very positive
impact on the Fund's performance.
The Fund's objective remains to provide a high-quality investment
portfolio which offers a yield which is competitive with that of its
peers. All commercial paper held in the Navigator Money Market portfolio
is rated "A-1+ or A-1" by Standard & Poor's and "P-1" by Moody's, the
highest commercial paper quality ratings of both rating agencies. The
Fund will continue to diversify by taking advantage of opportunities
that occasionally present themselves in the U.S. Government and Agency
markets.
2
<PAGE> 5
PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
Average Average
Monthly Compound Maturity
Month Yield Yield* (Month-end)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 June 5.79% 5.95% 32 days
July 5.64 5.79 34
August 5.52 5.66 27
September 5.48 5.62 27
October 5.50 5.64 30
November 5.54 5.68 22
December 5.42 5.56 18
1996 January 5.31 5.44 23
February 5.12 5.24 23
--------------------- ------- ------- --------
Average Annualized
Yields and Maturity 5.48% 5.62% 26 days
======= ======= ========
</TABLE>
*Compound yields assume reinvestment of dividends.
MATURITY DIVERSIFICATION SCHEDULE
AS OF FEBRUARY 29, 1996
<TABLE>
<CAPTION>
Amount
(Amortized Cost) % of Portfolio % Cumulative
-------------------------------------------------------------------
<S> <C> <C> <C>
One Day $ 34,895,958 20.7% 20.7%
2-7 days 17,954,753 10.7 31.4
8-30 days 81,459,264 48.4 79.8
31-60 days 29,957,999 17.8 97.6
61-90 days 0 0.0 97.6
Over 90 days 3,923,640 2.4 100.0
---------------
Total $ 168,191,614
===============
</TABLE>
3
<PAGE> 6
INVESTMENT REPORT
Navigator Tax-Free Money Market Fund
Economic Overview
- The economy began to show signs of changing momentum over the last
twelve month period; personal income rose in eleven months; business
inventories rose ten of the eleven months for which data is available;
durable goods orders were positive in only four months, yet they were
positive for the year; retail sales rose seven of twelve months; and
consumer confidence ended mixed to down slightly. In early July the
Federal Reserve interpreted the economy as beginning to slow, and the
first of three moves to lower interest rates and fuel economic expansion
was undertaken. Inflation, meanwhile, continued to be well under control
by remaining below 2.5% annually. Late in the calendar year Congress and
the White House, using all their political savvy, vocalized their
disagreement over a balanced budget amendment by shutting-down the
federal government twice. As if that were not enough, Mother Nature
decided to supplement one of the slowest Holiday seasons in several
years, by paralyzing the East coast with snow in early January. Barring
any political pressures, the Fed is expected to maintain rates for the
summer before pushing rates higher in an effort to control inflationary
expectations.
Market and Fund Specifics
The Navigator Tax Free Money Market Fund enjoyed a consistently stable
year as the Fund approached the end of its first full decade serving
shareholders. During the latest annual period, technical pressures
prevailed over the movements of the Federal Reserve. The Fund's weighted
average maturity started at 40 days, declined to a low of 18 days in
early May, increased steadily to a high of almost 60 in mid-November,
before ending February at 32 days. The Fund's yield also exhibited
volatility; trending upward from 3.70% in March to the 4.00% area by
early May, declining to the 2.80% area by early July, then steadily
increasing to the 3.50% area by mid-November. The annual year-end
"spike" pushed the Fund's yield from 3.10% in early December to almost
4.30% by year-end. Each calendar year-end, the Wall Street dealer
community manipulates the markets in preparation of the calendar
year-end. Investors are enticed into very short-maturity issues with
relatively high yields. Of course, broker-dealers are very sensitive
when it comes to maintaining business, and relatively low rates are
often required to accomplish this. The result for the tax-exempt money
markets is an increase in rates in late December followed by a reversal
in early January to levels lower than those experienced prior to the
increase. Outside of an aberration in mid-January, the Fund's yield
retreated to the 3.00%-3.25% area during most of the last two months of
the Fund's fiscal year. Recently, new issue supply has been light, and
expectations are for more of the same until early June.
4
<PAGE> 7
PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
Average Average
Monthly Compound Maturity
Month Yield Yield* (Month-end)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 March 3.64% 3.70% 28 days
April 3.82 3.89 22
May 3.96 4.04 31
June 3.58 3.64 25
July 3.26 3.31 34
August 3.41 3.47 50
September 3.56 3.62 51
October 3.49 3.55 50
November 3.53 3.59 50
December 3.76 3.83 48
1996 January 3.26 3.31 36
February 3.11 3.16 32
--------------------- ------- ------- --------
Average Annualized
Yields and Maturity 3.53% 3.59% 38 days
======= ======= ========
</TABLE>
*Compound yields assume reinvestment of dividends.
PORTFOLIO COMPOSITION
AS OF FEBRUARY 29, 1996
<TABLE>
<CAPTION>
Amount
(Face Value) % of Portfolio
-----------------------------------------------------------------------
<S> <C> <C>
Floating Rate Securities:
Daily Liquidity $13,900,000 14.5%
7-Day Liquidity 40,750,000 42.6
Notes and Bonds 11,524,882 12.0
Tax-Exempt Commercial Paper 28,400,000 29.7
Put Bonds 1,170,000 1.2
----------- ------------
$95,744,882 100.0%
=========== ============
</TABLE>
PORTFOLIO QUALITY
AS OF FEBRUARY 29, 1996
<TABLE>
<CAPTION>
Moody's Ratings % of Portfolio
--------------------------------------------------------------------------------------------
<S> <C> <C>
"MIG-1/VMIG-1" Highest Quality Short-term Instruments 43.3%
"Prime-1" Highest Quality
Tax-Exempt Commercial Paper 55.1
"Aaa" Best Quality Bonds 0.0
"Aa" High Quality Bonds 1.6
------------
100.0%
============
</TABLE>
5
<PAGE> 8
FINANCIAL STATEMENTS
Statement of Net Assets
Navigator Money Market Fund
February 29, 1996
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 65.78%
AUTOMOBILE MANUFACTURER -- 4.75%
$ 5,000,000 Ford Motor Credit Corporation.................... 03/29/96 5.20% $ 4,979,778
3,000,000 Ford Motor Credit Corporation.................... 04/04/96 5.20% 2,985,266
-----------
TOTAL AUTOMOBILE MANUFACTURER............................................ 7,965,044
--------------------------------------------------------------------------------------------------------
AUTOMOTIVE, FINANCE -- 2.99%
3,000,000 USL Capital Corporation.......................... 03/20/96 5.20% 2,991,767
2,030,000 USL Capital Corporation.......................... 03/20/96 5.21% 2,024,418
-----------
TOTAL AUTOMOTIVE, FINANCE................................................ 5,016,185
--------------------------------------------------------------------------------------------------------
CONGLOMERATE -- 4.72%
4,000,000 General Electric Capital......................... 03/21/96 5.18% 3,988,489
4,000,000 General Electric Capital......................... 07/17/96 4.98% 3,923,640
-----------
TOTAL CONGLOMERATE....................................................... 7,912,129
--------------------------------------------------------------------------------------------------------
CONSUMER ELECTRONICS -- 1.86%
3,150,000 Sharp Electronics................................ 04/19/96 5.40% 3,126,848
-----------
TOTAL CONSUMER ELECTRONICS............................................... 3,126,848
--------------------------------------------------------------------------------------------------------
FINANCE, CORPORATE RECEIVABLES -- 12.51%
1,185,000 Asset Securitization Cooperative................. 03/22/96 5.22% 1,181,392
4,000,000 Asset Securitization Cooperative................. 03/29/96 5.20% 3,983,822
3,000,000 Asset Securitization Cooperative................. 04/29/96 5.28% 2,974,040
5,000,000 Corporate Asset Funding.......................... 03/08/96 5.27% 4,994,876
2,787,000 Preferred Receivables Fund....................... 03/11/96 5.22% 2,782,959
2,075,000 Preferred Receivables Fund....................... 03/12/96 5.22% 2,071,690
3,000,000 Preferred Receivables Fund....................... 03/15/96 5.25% 2,993,875
-----------
TOTAL FINANCE, CORPORATE RECEIVABLES..................................... 20,982,654
--------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES, DIVERSIFIED -- 5.95%
5,000,000 Associates Corp. of North America................ 03/27/96 5.19% 4,981,258
5,000,000 John Deere Capital Corp. ........................ 03/06/96 5.42% 4,996,236
-----------
TOTAL FINANCIAL SERVICES, DIVERSIFIED.................................... 9,977,494
--------------------------------------------------------------------------------------------------------
FOREST PRODUCTS -- 4.16%
5,000,000 Weyerhaeuser Company............................. 03/25/96 5.20% 4,982,667
2,000,000 Weyerhaeuser Company............................. 03/28/96 5.23% 1,992,155
-----------
TOTAL FOREST PRODUCTS.................................................... 6,974,822
--------------------------------------------------------------------------------------------------------
INDUSTRIAL & COMMERCIAL SERVICES -- 4.16%
7,000,000 PHH.............................................. 03/19/96 5.19% 6,981,835
-----------
TOTAL INDUSTRIAL & COMMERCIAL SERVICES................................... 6,981,835
--------------------------------------------------------------------------------------------------------
INSURANCE, FULL LINE -- 4.75%
5,000,000 Prudential Funding............................... 03/27/96 5.18% 4,981,294
3,000,000 Prudential Funding............................... 04/19/96 5.15% 2,978,971
-----------
TOTAL INSURANCE, FULL LINE............................................... 7,960,265
--------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT -- 4.51%
4,600,000 Xerox Corporation................................ 03/22/96 5.32% 4,585,725
3,000,000 Xerox Credit Corporation......................... 04/04/96 5.20% 2,985,266
-----------
TOTAL OFFICE EQUIPMENT................................................... 7,570,991
--------------------------------------------------------------------------------------------------------
SECURITIES DEALER -- 9.49%
3,000,000 Bear Stearns Companies........................... 03/26/96 5.20% 2,989,167
5,000,000 Bear Stearns Companies........................... 03/28/96 5.48% 4,979,450
3,000,000 Merrill Lynch.................................... 04/12/96 5.20% 2,981,800
5,000,000 Merrill Lynch.................................... 04/19/96 5.18% 4,964,747
-----------
TOTAL SECURITIES DEALER.................................................. 15,915,164
--------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TELECOMMUNICATIONS -- 1.78%
$ 3,000,000 US West Capital Funding Inc..................... 03/18/96 5.19% $ 2,992,648
------------
TOTAL TELECOMMUNICATIONS................................................ 2,992,648
--------------------------------------------------------------------------------------------------------
TOBACCO -- 4.15%
7,000,000 Philip Morris Companies......................... 04/08/96 5.27% 6,961,061
------------
TOTAL TOBACCO........................................................... 6,961,061
--------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER.................................................. 110,337,140
--------------------------------------------------------------------------------------------------------
U.S. AGENCIES -- 15.45%
2,000,000 Federal Home Loan Bank.......................... 03/01/96* 4.62% 1,997,153
10,000,000 Federal Home Loan Mortgage Corporation.......... 03/25/96* 3.71% 10,000,000
2,715,000 Student Loan Marketing Association.............. 03/05/96* 5.44% 2,717,516
1,200,000 Student Loan Marketing Association.............. 03/01/96* 4.62% 1,198,805
10,000,000 Student Loan Marketing Association.............. 03/05/96* 5.21% 10,000,000
--------------------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES..................................................... 25,913,474
--------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 19.04%
11,000 First Boston Variable
dated 02/26/96, due 03/04/96
(collateralized by
U.S. Treasury Bonds;
market value $11,290)......................... 03/04/96 5.02% 11,000
220,000 Goldman Sachs Variable
dated 02/26/96, due 03/04/96
(collateralized by
U.S. Treasury Bonds;
market value $224,224)........................ 03/04/96 5.05% 220,000
10,000 Merrill Lynch
dated 02/26/96, due 03/04/96
(collateralized by
U.S. Treasury Notes;
market value $10,221)......................... 03/04/96 5.00% 10,000
31,700,000 Paine Webber Tri-Party
dated 02/29/96, due 03/01/96
(collateralized by
U.S. Government Agency-issued,
Mortgage-backed Securities;
market value, $32,545,163).................... 03/01/96 5.47% 31,700,000
--------------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS............................................. 31,941,000
========================================================================================================
TOTAL VALUE OF SECURITIES OWNED -- 100.27%
(which approximates cost for federal income tax purposes)............... $168,191,614
LESS LIABILITIES REDUCED BY OTHER ASSETS -- (0.27%)..................... (459,289)
------------
NET ASSETS APPLICABLE TO 167,734,554 SHARES OUTSTANDING;
EQUIVALENT TO $1.00 PER SHARE -- 100.00%.............................. $167,732,325
============
</TABLE>
-------------------------------------
* = The interest rate shown for each
of these obligations is the rate
as of February 29, 1996 and the
maturity shown is the next
interest re-adjustment date.
See accompanying notes.
7
<PAGE> 10
FINANCIAL STATEMENTS
Statement of Net Assets
Navigator Tax Free Money Market Fund
February 29, 1996
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ALASKA -- 1.58%
$ 1,500,000 Valdez, Marine Terminal Rev. Bonds (Exxon
Pipeline Company), VRDO........................ 03/01/96 3.35% $ 1,500,000
-----------
TOTAL ALASKA............................................................. 1,500,000
--------------------------------------------------------------------------------------------------------
COLORADO -- 2.42%
2,300,000 Moffat County, PCR Rfdg. Bonds (Colorado UTE
Electric Assn. Inc Project), VRDO.............. 03/06/96 3.30% 2,300,000
-----------
TOTAL COLORADO........................................................... 2,300,000
--------------------------------------------------------------------------------------------------------
FLORIDA -- 6.86%
3,000,000 Broward County, HFA, MFHR Bonds (Landings of
Inverrary), VRDO............................... 03/07/96 3.35% 3,000,000
3,500,000 West Orange, Memorial Hospital Tax Dist. Rev.
Bonds (West Orange Hospital), Series A-1, CP... 03/06/96 3.15% 3,500,000
-----------
TOTAL FLORIDA............................................................ 6,500,000
--------------------------------------------------------------------------------------------------------
ILLINOIS -- 4.22%
4,000,000 Illinois HFDC Rev. Bonds (Hospital Sisters
Service), Series E, VRDO....................... 03/06/96 3.30% 4,000,000
-----------
TOTAL ILLINOIS........................................................... 4,000,000
--------------------------------------------------------------------------------------------------------
INDIANA -- 9.18%
4,100,000 Gary, Environmental Improvement Rev. Rfdg. Bonds
(USX), VRDO.................................... 03/15/96 3.40% 4,100,000
4,600,000 Mt. Vernon, Pollution Control and Solid Waste
Disposal Rev. Rfdg. Bonds (GE), Series A, CP... 03/14/96 3.65% 4,600,000
-----------
TOTAL INDIANA............................................................ 8,700,000
--------------------------------------------------------------------------------------------------------
IOWA -- 0.95%
900,000 Waterloo, IA IDR Bonds (Waterloo Civic Center
Hotel), VDRO................................... 03/01/96 3.35% 900,000
-----------
TOTAL IOWA............................................................... 900,000
--------------------------------------------------------------------------------------------------------
LOUISIANA -- 5.27%
2,900,000 Louisiana Recovery District Sales Tax Bonds,
VRDO........................................... 03/01/96 3.50% 2,900,000
1,300,000 Louisiana Recovery District Sales Tax Bonds,
VRDO........................................... 03/01/96 3.50% 1,300,000
800,000 Parish of East Baton Rouge, PCR Bonds (Exxon),
VRDO........................................... 03/01/96 3.45% 800,000
-----------
TOTAL LOUISIANA.......................................................... 5,000,000
--------------------------------------------------------------------------------------------------------
MASSACHUSETTS -- 8.65%
2,200,000 Massachusetts Dedicated Income Tax Bonds Fiscal
Recovery Loan, Series B, VRDO.................. 03/01/96 3.35% 2,200,000
2,000,000 Massachusetts Health & Educational Fac. Auth.
Rev. Bonds (Harvard University), Series L,
CP............................................. 03/28/96 3.20% 2,000,000
2,000,000 Massachusetts Industrial Fin. Agency PCR Rfdg.
Bonds (New England Power), Series B, CP........ 04/10/96 3.20% 2,000,000
2,000,000 Massachusetts Industrial Fin. Agency PCR Rfdg.
Bonds (New England Power), Series B, CP........ 05/07/96 3.20% 2,000,000
-----------
TOTAL MASSACHUSETTS...................................................... 8,200,000
--------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MINNESOTA -- 3.16%
$ 3,000,000 Regents of the University of Minnesota Commercial
Paper Certificates Series B, CP................ 05/15/96 3.25% $ 3,000,000
-----------
TOTAL MINNESOTA.......................................................... 3,000,000
--------------------------------------------------------------------------------------------------------
MISSISSIPPI -- 4.43%
4,200,000 Jackson County, Port Fac. Rfdg. Rev. Bonds
(Chevron USA Inc Project), VRDO................ 03/01/96 3.35% 4,200,000
-----------
TOTAL MISSISSIPPI........................................................ 4,200,000
--------------------------------------------------------------------------------------------------------
MISSOURI -- 2.82%
1,500,000 Missouri Environmental Improvement & Energy
Resources Auth. PCR Bonds (Monsanto Company
Project), VRDA................................. 03/06/96 3.30% 1,500,000
1,170,000 Missouri Environmental Improvement & Energy
Resources Auth. PCR Bonds (Union Electric),
Series A, Put.................................. 06/01/96 4.00% 1,170,000
-----------
TOTAL MISSOURI........................................................... 2,670,000
--------------------------------------------------------------------------------------------------------
PENNSYLVANIA -- 18.46%
2,000,000 Beaver County, IDA PCR Rfdg. Bonds (Duquesne
Light), Series B, VRDO......................... 03/06/96 3.25% 2,000,000
3,000,000 City of Philadelphia, TRAN Series A.............. 06/27/96 4.50% 3,005,126
1,800,000 Delaware County, IDA Solid Waste Rev. Bonds
(Scott Paper), Series D, VRDO.................. 03/06/96 3.30% 1,800,000
1,900,000 Lackawanna County, IDA IDR Bonds (National Book
Co Inc), VRDO.................................. 03/06/96 4.13% 1,900,000
4,000,000 Montgomery County, IDA PCR Rfdg. Bonds (PECO),
Series A, CP................................... 05/22/96 3.10% 4,000,000
2,800,000 Northeast Pennsylvania Hospital Auth. Rev. Bonds
(Hospital Central Service), Series B, CP....... 03/05/96 3.25% 2,800,000
2,000,000 Temple University of the Commonwealth System of
Higher Educational University Funding
Obligation Series 1995......................... 05/22/96 5.00% 2,003,006
-----------
TOTAL PENNSYLVANIA....................................................... 17,508,132
--------------------------------------------------------------------------------------------------------
SOUTH DAKOTA -- 4.53%
4,300,000 Lawrence County, PCR Bonds (Homestake Mining),
VDRO........................................... 03/06/96 3.20% 4,300,000
-----------
TOTAL SOUTH DAKOTA....................................................... 4,300,000
--------------------------------------------------------------------------------------------------------
TEXAS -- 16.58%
4,500,000 Board of Regents of Texas A&M University
Permanent Univ. Fund Sub. Lien Notes, Series B,
CP............................................. 03/13/96 3.25% 4,500,000
2,200,000 Brazos River Auth., Variable Rate Demand PCR
Rfdg. Bonds (Monsanto), VRDO................... 03/06/96 3.30% 2,200,000
1,000,000 North Central, HFDC Hospital Rev. Bonds
(Presbyterian Medical Center), Series D, VRDO.. 03/01/96 3.50% 1,000,000
1,500,000 Port of Corpus Christi Authority of Neuces
County, Marine Term Rev. Bonds (Reynolds
Metals), VRDO.................................. 03/06/96 3.20% 1,500,000
1,500,000 Terrant County, COPs............................. 07/15/96 3.80% 1,500,000
5,000,000 Texas State TRAN Series A........................ 08/30/96 4.75% 5,016,750
-----------
TOTAL TEXAS.............................................................. 15,716,750
--------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
Statement of Net Assets (Cont.)
<TABLE>
<CAPTION>
MATURITY INTEREST
PAR SECURITY DATE RATE VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VIRGINIA -- 4.22%
$ 4,000,000 Roanoke, IDA Hospital Rev. Bonds (Carilion
Health System/Roanoke Hospital), Series C,
VRDO.......................................... 03/07/96 3.30% $ 4,000,000
------------
TOTAL VIRGINIA.......................................................... 4,000,000
--------------------------------------------------------------------------------------------------------
WASHINGTON -- 7.65%
5,000,000 Port of Seattle, IDC Rev. Bonds (Sysco Food
Service Project), VRDO........................ 03/06/96 3.40% 5,000,000
2,250,000 Washington HFC MFMR Rfdg. Bonds, Series B,
VRDO.......................................... 03/06/96 3.40% 2,250,000
------------
TOTAL WASHINGTON........................................................ 7,250,000
========================================================================================================
TOTAL VALUE OF SECURITIES OWNED -- 100.98%
(which approximates cost for income tax purposes)....................... 95,744,882
LESS LIABILITIES REDUCED BY OTHER ASSETS -- (0.98%)..................... (929,451)
------------
NET ASSETS APPLICABLE TO 94,842,661 SHARES OUTSTANDING;
EQUIVALENT TO $1.00 PER SHARE -- 100.00%.............................. $ 94,815,431
============
</TABLE>
-------------------------------------
BANs = Bond Anticipation Notes
CP = Commercial Paper
HFA = Housing Finance Agency/Authority
HFC = Housing Finance Commission/Corporation
HFDC = Health Facility Development Corporation
IDA = Industrial Development Authority
IDR = Industrial Development Revenue
MFHR = Multi-Family Housing Revenue
MFMR = Multi-Family Mortgage Revenue
PCR = Pollution Control Revenue
TRAN = Tax and Revenue Anticipation Notes
VRDO = Variable Rate Demand Obligations --
The rate shown for each of these
obligations is the rate as of
February 29, 1996 and the maturity
shown is the date of the next
interest rate adjustment.
See accompanying notes.
10
<PAGE> 13
Statements of Operations
Navigator Funds
For the Period Ended February 29, 1996
<TABLE>
<CAPTION>
MONEY TAX-FREE
MARKET MONEY
FUND(a) MARKET(b)
---------- ----------
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................... $8,373,567 $3,868,400
---------- ----------
EXPENSES:
Investment Advisory Fees.................................... 387,603 251,408
Administrative Fees......................................... 193,801 100,563
Less Investment Advisory & Administration Fees
Waived by Management..................................... (431,687) (200,707)
Custodian and Transfer Agent Fees........................... 88,380 77,875
Professional Fees........................................... 37,746 22,090
Taxes -- Other than Income.................................. 42,382 16,480
Registration and Filing Fees................................ 17,714 13,719
Insurance................................................... 8,034 5,009
Miscellaneous............................................... 24,944 28,063
---------- ----------
Total Expenses........................................... 368,917 314,500
---------- ----------
NET INVESTMENT INCOME......................................... 8,004,650 3,553,900
Net Realized Gain on Securities Sold........................ -- 2,352
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... $8,004,650 $3,556,252
========== ==========
</TABLE>
-----------------------
(a) Fiscal year end changed to February 29. Prior to this, fiscal year
end was May 31. The numbers reflected are for the period June 1,
1995 through February 29, 1996.
(b) The numbers reflected are for the fiscal year March 1, 1995 through
February 29, 1996.
See accompanying notes.
11
<PAGE> 14
Statements of Changes in Net Assets
Navigator Money Market Fund
For the Nine-Month Period Ended February 29, 1996
and for the Year Ended May 31, 1995
<TABLE>
<CAPTION>
6/01/95 6/01/94
TO 2/29/96 TO 5/31/95
------------- -------------
<S> <C> <C>
OPERATIONS:
Net Investment Income................................ $ 8,004,650 $ 13,947,997
Net Realized Gain (Loss) on Securities Sold.......... -- (2,706)
------------- -------------
Net Increase in Net Assets
Resulting from Operations......................... 8,004,650 13,945,291
------------- -------------
DIVIDENDS DISTRIBUTED FROM:
Net Investment Income................................ (8,004,650) (13,947,997)
Net Realized Gain (Loss)............................. -- (3,406)
------------- -------------
Total Dividends Distributed.......................... (8,004,650) (13,951,403)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold............................ 539,968,847 876,669,817
Net Asset Value of Shares Issued
upon Reinvestment of Dividends.................... 151,635 179,501
Cost of Shares Repurchased........................... (610,497,023) (979,870,062)
------------- -------------
Net Decrease in Net Assets
Derived from Capital Share Transactions........... (70,376,541) (103,020,744)
------------- -------------
NET DECREASE IN NET ASSETS........................ (70,376,541) (103,026,856)
NET ASSETS:
Beginning of Period.................................. 238,108,866 341,135,722
------------- -------------
End of Period........................................ $ 167,732,325 $ 238,108,866
============= =============
</TABLE>
See accompanying notes.
12
<PAGE> 15
Statements of Changes in Net Assets
Navigator Tax Free Money Market Fund
For the Years Ended February 29, 1996 and February 28, 1995
<TABLE>
<CAPTION>
3/01/95 3/01/94
TO 2/29/96 TO 2/28/95
------------- -------------
<S> <C> <C>
OPERATIONS:
Net Investment Income................................ $ 3,553,900 $ 3,612,046
Net Realized Gain (Loss) on Securities Sold.......... 2,352 (32,421)
------------- -------------
Net Increase in Net Assets
Resulting from Operations......................... 3,556,252 3,579,625
------------- -------------
DIVIDENDS DISTRIBUTED FROM:
Net Investment Income................................ (3,553,900) (3,612,046)
Net Realized Gain.................................... -- --
------------- -------------
Total Dividends Distributed.......................... (3,553,900) (3,612,046)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold............................ 341,728,593 292,394,559
Net Asset Value of Shares Issued
upon Reinvestment of Dividends.................... 183,353 7,912
Cost of Shares Repurchased........................... (354,456,269) (337,285,543)
------------- -------------
Net Decrease in Net Assets
Derived from Capital Share Transactions........... (12,544,323) (44,883,072)
------------- -------------
NET DECREASE IN NET ASSETS........................ (12,541,971) (44,915,493)
NET ASSETS:
Beginning of Period.................................. 107,357,402 152,272,895
------------- -------------
End of Period........................................ $ 94,815,431 $ 107,357,402
============= =============
</TABLE>
See accompanying notes.
13
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
NOTE 1 -- ORGANIZATION
Navigator Money Market Fund -- Prime Obligations Portfolio ("Prime
Obligations") is a portfolio offered by Navigator Money Market Fund, Inc.
and Navigator Tax-Free Money Market Fund ("Tax-Free Money Market") is a
portfolio offered by Navigator Tax-Free Money Market Fund, Inc. (each
separately referred to as a "Fund" and collectively referred to as the
"Funds"). Navigator Money Market Fund, Inc. and Navigator Tax-Free Money
Market Fund, Inc. (each separately referred to as the "Company" and
collectively referred to as the "Companies"), are no-load, diversified,
open-end investment companies registered under the Investment Company Act
of 1940, as amended.
Shares of the Funds 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 for the Companies, Fairfield, a wholly-owned subsidiary of
Legg Mason, Inc., serves as the Funds' Investment Adviser, Administrator,
and Distributor.
Prime Obligations changed its fiscal year from May 31 to February 29.
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 gain of $2,352 by Tax-Free Money Market for the year
ended February 29, 1996 resulted from sales of securities with proceeds
and costs of $319,579,170 and $319,576,818, 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 February 29, 1996.
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 February 29, 1996 amounted to $648,758 and $232,660
for Prime Obligations and Tax-Free Money Market, respectively.
No provision for federal income taxes is made since it is the intention
of the Funds to qualify as regulated investment companies under the
provisions of the Internal Revenue Code and to make requisite
distributions to shareholders which will relieve them from Federal income
and excise taxes.
For federal income tax purposes, net realized capital losses generated in
the Funds 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 Funds pursuant to Management Agreements dated April 17,
1993. Under the terms of the Agreement for Prime Obligations, 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. Under the Agreement for Tax-Free Money Market, the Manager
is entitled to receive an annual fee for investment advisory services of
.25% on the first $1 billion of the average net assets of the Fund; .20%
on the next $1 billion; and .15% on average net assets in excess of $2
billion. Such fees are computed daily and paid monthly.
For Prime Obligations, 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. For Tax-Free
Money Market, the Manager is entitled to receive an administrative fee at
the annual rate of .10% on the Fund's average net assets. Such fees are
computed daily and paid monthly.
14
<PAGE> 17
For Prime Obligations, during the nine-month period ended February 29,
1996, the management fees (investment advisory and administrative)
earned by Fairfield totalled $581,404. Of the investment advisory and
administrative fees earned, $431,687 was voluntarily waived by the
Manager in order to assist the Fund in maintaining a competitive expense
ratio.
For Tax-Free Money Market, during the year ended February 29, 1996, the
management fees (investment advisory and administrative) earned by
Fairfield totalled $351,971. Of the investment advisory fees earned,
$200,707 was voluntarily waived by the Manager in order to assist the
Fund in maintaining a competitive expense ratio. At February 29, 1996,
Fairfield was owed $4,022 (after partial fee waiver) for investment
advisory services and $8,044 in administrative fees.
NOTE 4 -- CUSTODIAN AND TRANSFER AGENT FEES
Custodial services are provided to the Funds 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 Companies' exclusive Distributor; however,
it receives no fees for providing distribution services.
Certain officers and directors of the Companies are also officers and
directors of Fairfield. Such officers and directors are paid no fees by
the Funds for serving as officers and directors.
The Funds have paid legal fees to a law firm with which the Secretary of
the Companies is associated.
NOTE 6 -- REPURCHASE AGREEMENTS
The investment policies of Prime Obligations 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.
Prime Obligations 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 period ended February 29, 1996, Fairfield
received $5,426 in fees with respect to such transactions.
NOTE 7 -- CAPITAL SHARES
At February 29, 1996, Prime Obligations had 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>
6/01/95 6/01/94
TO 2/29/96 TO 5/31/95
------------ ------------
<S> <C> <C>
Shares sold............................................... 539,968,847 876,669,817
Shares issued upon reinvestment of dividends.............. 151,635 179,501
Shares repurchased........................................ (610,497,023) (979,870,062)
------------ ------------
Net decrease.............................................. (70,376,541) (103,020,744)
Outstanding at beginning of period........................ 238,111,095 341,131,839
------------ ------------
Outstanding at end of period.............................. 167,734,554 238,111,095
============ ============
</TABLE>
15
<PAGE> 18
NOTE 7 -- CAPITAL SHARES (CONT.)
At February 29, 1996, Tax-Free Money Market had 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>
3/01/95 3/01/94
TO 2/29/96 TO 2/28/95
------------ ------------
<S> <C> <C>
Shares sold.............................................. 341,728,593 292,394,559
Shares issued upon reinvestment of dividends............. 183,353 7,912
Shares repurchased....................................... (354,456,269) (337,285,543)
------------ ------------
Net decrease............................................. (12,544,323) (44,883,072)
Outstanding at beginning of period....................... 107,386,984 152,270,056
------------ ------------
Outstanding at end of period............................. 94,842,661 107,386,984
============ ============
</TABLE>
NOTE 8 -- INVESTMENT COMPOSITION
Tax-Free Money Market invests in securities which may include revenue,
general, and escrowed obligations. At February 29, 1996, the revenue
sources by purpose were as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO
INVESTMENTS
-------------
<S> <C>
Revenue Bonds:
Industrial Development.................................................... 25%
Pollution Control......................................................... 15
Educational Facilities.................................................... 12
Health Care Facilities.................................................... 12
Housing Facilities........................................................ 6
State Government.......................................................... 5
Chemicals................................................................. 4
Oil....................................................................... 6
Basic Metals.............................................................. 4
Local government.......................................................... 3
General Obligations......................................................... 6
Moral Obligations........................................................... 2
-----------
100%
===========
</TABLE>
In addition, certain investments (12.5%) are covered by insurance issued
by several private insurers who guarantee the payment of interest and
principal at final maturity in the event of default. Such insurance,
however, does not guarantee the market value of the securities or the
value of the Fund's shares. None of these insurers individually insure
more than 9.5% of the insured investments in the portfolio.
16
<PAGE> 19
NOTE 9 -- FINANCIAL HIGHLIGHTS
Financial highlights for a share of Prime Obligations outstanding
throughout the periods indicated were as follows:
<TABLE>
<CAPTION>
6/01/95 6/01/94 6/01/93 6/01/92 6/01/91
TO TO TO TO TO
2/29/96 5/31/95 5/31/94 5/31/93 5/31/92
-------- -------- -------- -------- --------
<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.................... .0413 .0501 .0314 .0323 .0499
Net Gain/(Loss) on Securities
(both realized and unrealized)......... -- -- -- -- .0001
-------- -------- -------- -------- --------
Total Income from Investment
Operations........................ .0413 .0501 .0314 .0323 .0500
-------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income..... (.0413) (.0501) (.0314) (.0323) (.0499)
Dividends from Capital Gains............. -- -- -- -- (.0001)
-------- -------- -------- -------- --------
Total Distributions................. (.0413) (.0501) (.0314) (.0323) (.0500)
-------- -------- -------- -------- --------
Net Asset Value,
end of period.............................. $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
Total Return................................. 5.62%(a) 5.19% 3.18% 3.28% 5.12%
Net Assets,
end of period (000)........................ $167,132 $238,109 $341,136 $417,114 $443,368
Ratios and Supplemental Data:
Ratio of Expenses to Average Net Assets.... .25%(b) .28% .27% .26% .22%
Ratio of Expenses to Average
Net Assets, excluding Fee Waivers........ .55%(b) .43% .42% .41% .37%
Ratio of Net Investment Income to Average
Net Assets............................... 5.51%(b) 5.01% 3.14% 3.23% 4.99%
Ratio of Net Investment Income to Average
Net Assets, excluding Fee Waivers........ 5.21%(b) 4.86% 2.99% 3.08% 4.84%
</TABLE>
----------------------
(a) Not annualized
(b) Annualized
17
<PAGE> 20
NOTE 9 -- FINANCIAL HIGHLIGHTS (CONT.)
Financial highlights for a share of Tax-Free Money Market outstanding
throughout the periods indicated were as follows:
<TABLE>
<CAPTION>
3/01/95 3/01/94 3/01/93 3/01/92 3/01/91
TO TO TO TO TO
2/29/96 2/28/95 2/28/94 2/28/93 2/29/92
-------- -------- -------- -------- --------
<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.................... .0353 .0286 .0227 .0273 .0407
Net Gain/(Loss) on Securities
(both realized and unrealized)......... -- (.0003) -- -- .0001
-------- -------- -------- -------- --------
Total Income from Investment
Operations........................ .0353 .0283 .0227 .0273 .0408
-------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income..... (.0353) (.0286) (.0227) (.0273) (.0407)
-------- -------- -------- -------- --------
Total Distributions................. (.0353) (.0286) (.0227) (.0273) (.0407)
-------- -------- -------- -------- --------
Net Asset Value,
end of period.............................. $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
Total Return................................. 3.59% 2.94% 2.29% 2.76% 4.15%
Net Assets,
end of period (000)........................ $ 94,815 $107,357 $152,273 $202,245 $227,249
Ratios and Supplemental Data:
Ratio of Expenses to Average Net Assets.... .31% .29% .28% .23% .23%
Ratio of Expenses to Average
Net Assets, excluding Fee Waivers........ .51% .49% .48% .43% .45%
Ratio of Net Investment Income to Average
Net Assets............................... 3.53% 2.86% 2.27% 2.73% 4.07%
Ratio of Net Investment Income to Average
Net Assets, excluding Fee Waivers........ 3.33% 2.66% 2.07% 2.53% 3.85%
</TABLE>
18
<PAGE> 21
Report of Independent Auditors
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
NAVIGATOR MONEY MARKET FUND -- PRIME OBLIGATIONS PORTFOLIO
NAVIGATOR TAX-FREE MONEY MARKET FUND
We have audited the accompanying statements of net assets of Navigator
Money Market Fund -- Prime Obligations Portfolio and of Navigator
Tax-Free Money Market Fund as of February 29, 1996, and the related
statements of operations for the periods indicated therein, the
statements of changes in net assets for each of the two periods
indicated therein, and the financial highlights for each of the five
periods indicated therein. 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, 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 Navigator Money Market Fund -- Prime Obligations
Portfolio and of Navigator Tax-Free Money Market Fund at February 29,
1996, the results of their operations for the periods indicated therein,
the changes in their net assets for each of the two periods indicated
therein, and the financial highlights for each of the five periods
indicated therein, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
April 12, 1996
19
<PAGE> 22
INVESTMENT ADVISER,
ADMINISTRATOR,
AND DISTRIBUTOR
Fairfield Group, Inc.
Horsham, PA 19044
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
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
<PAGE> 23
keeping costs within reasonable boundaries is a primary responsibility that
produces economic benefits for both our client banks and their trust accounts
in the form of consistently higher yields. It is especially important in a
period of low interest rates.
ADVANCED TECHNOLOGY
Institutional investors are linked to the Navigator Funds through an advanced
communications systems called NAVCOM. This state-of-the-art network utilizes
digital facsimile technology to simplify the routine and time consuming task of
communicating purchase and redemption orders to the Fairfield Investment
Center. NAVCOM provides fast transmission capabilities, ease of operation, and
the important advantage of having an instantaneous, hard-copy record of each
transaction.
EXCEPTIONAL PERSONALIZED SERVICE
The emergence and growth of the Navigator Funds has been a direct result of
consistently above-average performance, combined with an unfaltering commitment
to client service. Our high level of performance comes from personal
dedication, experience, investment skills, good judgement and old-fashioned
hard work. We understand the special responsibilities that accompany a
relationship with a bank's trust department. At all times, we maintain the
highest standards of integrity that are so important to your image and
reputation. And, you always have access to a senior executive of the
organization.
FINANCIAL COMMITMENT
As a wholly-owned subsidiary of Legg Mason, Inc., we have the financial
resources of a company that traces its roots back to 1899. Legg Mason provides
securities brokerage, investment advisory, investment banking and mortgage
banking services through its wholly owned subsidiaries. And today, Legg Mason
is one of the strongest regional securities firms in the country, with over
$190 million in capital, and annual revenues over $300 million.
<PAGE> 24
[NAVIGATOR LOGO]
FAIRFIELD GROUP, INC.
200 Gibraltar Road
Horsham, PA 19044-9898
1-800-441-3885
PROVIDING
PREMIER
CASH MANAGEMENT
SERVICES
TO BANK TRUST
DEPARTMENTS
