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RNC MONEY MARKET FUND
1996 Annual Report to Shareholders
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Dear Shareholder:
We are pleased to present the annual report on the operations of the
RNC Money Market Fund for the year ended September 30, 1996. Your Fund has
continued to exhibit a strong performance record. We sincerely appreciate the
confidence you have placed in your Fund's management and extend a special
welcome to all new shareholders.
The average dollar-weighted portfolio maturity of your Fund on
September 30, 1996 was 50 days. Purchases continue to be high quality, highly
liquid investments which allow adjustment to the portfolio's maturity in the
event of a change in the interest rate forecast. Each issue is monitored to
assure that it meets our demanding standards of creditworthiness.
The Fund's portfolio diversification and maturity range will continue
to be adjusted based upon the interest rate forecast under fluctuating market
conditions.
We assure you of our continuing dedication to achieve superior
investment results, and look forward to continued service to you. If you have
any questions concerning your investment, please feel free to contact us.
Sincerely,
/s/ ERIC M. BANHAZL /s/ DANIEL J. GENTER
ERIC M. BANHAZL DANIEL J. GENTER
President President
RNC Money Market Fund RNC Capital Management Co.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
RNC Money Market Fund
We have audited the accompanying statement of assets and liabilities of RNC
Money Market Fund, including the investment portfolio, as of September 30, 1996,
and the related statements of operations for the year then ended, the statement
of changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
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 securities owned as of
September 30, 1996, by correspondence with the custodian. 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 RNC
Money Market Fund as of September 30, 1996, and 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 five
years in the period then ended, in accordance with generally accepted accounting
principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
November 12, 1996
<PAGE>
RNC MONEY MARKET FUND
INVESTMENT PORTFOLIO
September 30, 1996
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<TABLE>
<CAPTION>
Principal
Amount Value
----------------- -----------------
<S> <C> <C>
Commercial Paper - 53.55%
Allomon Funding Corp., 5.39%, 10/11/96 $1,500,000 $1,497,754
American Trading & Production, 5.30%, 10/01/96 750,000 750,000
Banco Inbursa, 5.38%, 10/03/96 1,500,000 1,499,552
Delaware Funding Corp., 5.36%, 10/16/96 1,500,000 1,496,650
Enterprise Funding Corp., 5.38%, 10/24/96 1,500,000 1,494,844
Fingerhut Owner Trust, 5.38%, 10/02/96 1,500,000 1,499,776
Greenwich Asset Funding, 5.37%, 10/10/96 1,500,000 1,497,986
Holland Limited Securitization, 5.41%, 10/22/96 1,500,000 1,495,266
JHM Funding, 5.37%, 10/17/96 1,500,000 1,496,420
Midamerican Energy Co., 5.35%, 10/28/96 1,500,000 1,493,981
Parker - Hannifin Corp., 5.38%, 10/15/96 1,500,000 1,496,862
Receivables Capital Corp., 5.37%, 10/18/96 1,500,000 1,496,196
Reliaster Mortgage Company, 5.37%, 10/08/96 1,500,000 1,498,434
Triple A1 Funding Corp., 5.30%, 10/04/96 1,500,000 1,499,338
-----------------
20,213,059
-----------------
Federal Agency Securities - 10.79%
FNMA, 8.45%, 10/21/96 500,000 500,766
Student Loan Marketing Association, 5.52%, 2/17/98 2,000,000 2,000,000
Student Loan Marketing Association, 5.57%, 1/21/98 1,070,000 1,070,499
Tennessee Valley Authority, 6.00%, 1/15/97 500,000 500,000
-----------------
4,071,265
-----------------
Corporate Bonds - 22.62%
Associates Corp. North America Medium Term Note, 7.00%, 5/15/97 1,000,000 1,007,522
Dupont de Nemours & Co., 8.45%, 10/15/96 200,000 200,589
General Motors Acceptance Corp., 7.00%, 8/15/97 500,000 503,430
Golden West Financial, 10.25%, 5/15/97 1,000,000 1,025,781
General Motors Acceptance Corp. Medium Term Note, 7.45%, 6/2/97 1,000,000 1,008,578
Pepsico Inc., 6.875%, 5/15/97 1,000,000 1,005,812
PNC Bank N.A. Medium Term Note, 5.373%, 5/8/97 1,000,000 1,000,000
Sears Roebuck Co., 9.25%, 8/1/97 1,000,000 1,026,286
Security Pacific Corp., 7.75%, 12/1/96 1,250,000 1,256,674
Shawmut Corp., 8.125%, 2/1/97 500,000 504,330
-----------------
8,539,002
-----------------
Overnight Repurchase Agreement - 12.71%
GX Clarke Government Repo, 5.50%, 10/1/96
(Collaterized by $4,725,000 U.S. Treasury Note, 6.25%,
due 04/30/01, value of collateral $4,873,053) 4,797,000 4,797,000
-----------------
Total Investment Portfolio - 99.67% 37,620,326
Other Assets less Liabilities - 0.33% 123,338
-----------------
Net Assets - 100.0% $37,743,664
=================
</TABLE>
See "Notes to Financial Statements"
<PAGE>
RNC MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
------------------
Assets:
Investment Portfolio
(cost $37,620,326) $37,620,326
Cash 87
Interest Receivable 252,865
Prepaid Expenses 44,513
--------------
Total Assets 37,917,791
Liabilities:
Dividends Payable 146,536
Accrued Investment Advisory Fees 8,547
Other Accrued Expenses 19,044
--------------
Total Liabilities 174,127
--------------
Net Assets - (equivalent to $1.00 per share based on
37,743,664 shares of capital stock outstanding) $37,743,664
==============
See "Notes to Financial Statements"
<PAGE>
RNC MONEY MARKET FUND
STATEMENT OF OPERATIONS
For the Fiscal Year Ended September 30, 1996
------------------
Investment Income:
Interest Income $ 1,844,228
Expenses:
Advisory fees $ 93,294
Professional fees 56,517
Administration fees 48,128
Registration fees 24,254
Audit fees 14,037
Fund accounting fees 13,424
Custodian fees 12,100
Transfer Agent fees 9,456
Directors fees 8,643
Insurance expense 4,116
Printing & Other expenses 1,005
Miscellaeous expense 7,550
-------------
Total expenses 292,524
----------------
Net Investment Income 1,551,704
Net Increase in Net Assets Resulting
from Operations $ 1,551,704
================
See "Notes to Financial Statements"
<PAGE>
RNC MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
------------------
For the Years Ended
September 30,
----------------------------------
1996 1995
------------- --------------
Increase in Net Assets from Operations $ 1,551,704 $ 1,907,894
Distributions to Shareholder from Net
Investment Income (1,551,704) (1,907,894)
Capital Share Transactions (net) 6,677,622 (12,619,918)
------------- --------------
Total Increase (Decrease) in Net Assets 6,677,622 (12,619,918)
Net Assets
Beginning of year 31,066,042 43,685,960
------------- --------------
End of year $ 37,743,664 $ 31,066,042
============= ==============
See "Notes to Financial Statements"
<PAGE>
RNC MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
------------------
<TABLE>
<CAPTION>
For a share outstanding throughout the year
For the Years Ended September 30,
-------------------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value
at beginning of year $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment
operations:
Net investment income 0.041 0.051 0.032 0.026 0.038
Less distributions:
From net
investment income (0.041) (0.051) (0.032) (0.026) (0.038)
Net Asset Value
at end of year $1.000 $1.000 $1.000 $1.000 $1.000
=========== =========== =========== =========== ===========
Total Return 4.10% 5.10% 3.20% 2.65% 3.83%
Ratios/Supplemental Data:
Net Assets,
end of year (000's) $37,744 $31,066 $43,686 $29,527 $46,563
Ratio of expenses to
average net assets 0.9% 0.8% 0.7% 0.7% 0.8%
Ratio of net investment
income to average
net assets 4.7% 5.0% 3.2% 2.6% 3.9%
</TABLE>
See "Notes to Financial Statements"
<PAGE>
RNC MONEY MARKET FUND
Notes to Financial Statements
September 30, 1996
------------------
1. Significant Accounting Policies.
-------------------------------
RNC Money Market Fund ("the Fund"), formerly the RNC Liquid Assets Fund, Inc.,
is registered under the Investment Company Act of 1940 as a diversified,
open-end management company. The following is a summary of significant
accounting policies followed by the Fund. The Fund's investment objective is
high current income consistent with preservation of capital and liquidity.
Portfolio Valuation. Portfolio securities are valued using the amortized cost
method which approximates market.
Federal Income Tax. It is the Fund's policy to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income, including
any net realized gain on investments not offset by loss carryovers, to its
shareholders. Therefore, no Federal income tax provision is required.
Distributions to Shareholders. Distributions to shareholders are declared daily
from the total of net investment income and net realized gains on investments,
if any.
Use of Estimates in Financial Statements. In preparing financial statements in
conformity with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the reported
amounts of income and expenses during the reported period. Actual results may
differ from these estimates.
Other. As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Interest income is recognized on the accrual basis.
<PAGE>
RNC MONEY MARKET FUND
Notes to Financial Statements (Continued)
September 30, 1996
------------------
2. Capital Share Transactions.
--------------------------
As of September 30, 1996 there were 500,000,000 shares of $0.01 par value
capital stock authorized. Transactions in capital stock were as follows:
Shares and Dollar Amount
------------------------
For The Years Ended September 30,
---------------------------------
1996 1995
---- ----
Shares sold 127,532,902 107,322,974
Shares issued in reinvestment
of distributions 288,093 285,531
------------ --------------
127,820,995 107,608,505
Shares redeemed (121,143,373) (120,228.423)
------------- -------------
Net increase/(decrease) 6,677,622 (12,619,918)
============= ============
Amount (Net Asset Value = $1.00) $ 6,677,622 $ (12,619,918)
============= ================
3. Investment Advisory Fees and Other Transactions with Affiliates.
---------------------------------------------------------------
The investment advisory fee of $93,294 was paid pursuant to an agreement with
RNC Capital Management Co. (RNC). Under the agreement RNC is responsible for the
management of the Fund's portfolio and also provides personnel, facilities,
equipment and other services necessary to the management of the Fund. The
Agreement provides for monthly fees computed at an annual rate of .41% of the
Fund's average daily net assets. For the year ended September 30, 1996, RNC
voluntarily waived a portion of the fee which amounted to .13% of the Fund's
average daily net assets.
The agreement obligates RNC to reimburse the Fund to the extent that the Fund's
expenses (excluding interest, taxes, brokers fees and commissions, extraordinary
items and distribution expenses) exceed the expense limitations applicable to
the fund imposed by state securities laws or regulations. In addition, from time
to time, RNC may voluntarily reimburse a portion of the Fund's other expenses.
For the year ended September 30, 1996, the Fund's expenses did not exceed such
expense limitations and required no reimbursement by RNC.
Investment Company Administration Corporation (the "Administrator") acts as the
Fund's Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Fund; prepares reports and materials to be supplied to the trustees;
monitors the activities of the Fund's custodian, transfer agent and accountants;
coordinates the preparation and payment of Fund expenses and reviews the Fund's
expense accruals. For its services, the Administrator receives an annual fee up
to $60,000, payable monthly. The Fund paid the Administrator $48,128 for the
year ended September 30, 1996.
<PAGE>
RNC MONEY MARKET FUND
Notes to Financial Statements (Continued)
September 30, 1996
------------------
First Fund Distributors, Inc. (the "Underwriter") acts as the Fund's principal
underwriter in a continuous public offering of the Fund's shares. The
Underwriter is an affiliate of the Administrator.
Certain officers of the Fund are also officers of the Underwriter and
Administrator.
Midvale Securities Corporation (MSC), an affiliate of RNC, waived all fees, in
its capacity as Shareholder Servicing Agent, for shareholder related servicing
undertaken pursuant to a shareholder- approved plan. The maximum amount of
payment to MSC under this plan is .25%.
