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Reich & Tang
Government Securities Trust
SEMI-ANNUAL REPORT
AUGUST 31, 1995
(UNAUDITED)
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This report is submitted for the general information of the shareholders of the
Trust. It is not authorized for distribution to prospective investors in the
Trust unless preceded or accompanied by an effective prospectus, which includes
information regarding the Trust's objectives and policies, experience of its
management, marketability of shares, and other information.
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REICH & TANG GOVERNMENT SECURITIES TRUST
600 Fifth Avenue
New York, New York 10020
MANAGER
Reich & Tang Asset Management, L.P.
600 Fifth Avenue
New York, New York 10020
CUSTODIAN, TRANSFER AND
DIVIDEND DISBURSING AGENT
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
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REICH & TANG GOVERNMENT SECURITIES TRUST
STATEMENT OF NET ASSETS
AUGUST 31, 1995
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date (Note 1)
------ ---- ------
U.S. Government Obligations (79.57%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,200,000 U.S. Treasury Notes, 4.375% 08/15/96 $ 1,185,375
--------------- --------------
1,200,000 Total U.S. Government Obligations (Cost $1,201,944) 1,185,375
- ---------------- --------------
Total Investments (79.57%) (Cost $1,201,944+) 1,185,375
Cash and Other Assets, Net of Liabilities (20.43%) 304,371
--------------
Net Assets (100.00%), 151,732 shares outstanding (Note 4) $ 1,489,746
==============
Net asset value, offering and redemption price per share $ 9.82
==============
+ Aggregate cost for federal income tax purposes is identical.
Aggregate unrealized depreciation of investments is $16,569.
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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REICH & TANG GOVERNMENT SECURITIES TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1995
(UNAUDITED)
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<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest....................................................................... $ 89,456
--------------------
Expenses: (Note 2)
Management fee................................................................. 6,917
Administration fee............................................................. 3,953
Shareholder servicing fee...................................................... 4,941
Custodian, shareholder servicing and related shareholder expenses.............. 18,919
Audit and accounting........................................................... 18,711
Legal, compliance and filing fees.............................................. 4,781
Trustees' fees................................................................. 3,030
Miscellaneous.................................................................. 1,010
--------------------
Total expenses............................................................ 62,262
Less: Fees waived and expenses reimbursed................................. ( 51,123)
--------------------
Net expenses.............................................................. 11,139
--------------------
Net investment income............................................................. 78,317
--------------------
<CAPTION>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments........................................... ( 54,997)
Change in unrealized appreciation (depreciation) of investments................... 81,916
--------------------
Net gain (loss) on investments................................................. 26,919
--------------------
Increase in net assets from operations............................................ $ 105,236
====================
</TABLE>
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See Notes to Financial Statements.
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REICH & TANG GOVERNMENT SECURITIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
Six Months Ended
August 31, 1995 Year Ended
(Unaudited) February 28, 1995
--------- -----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income....................................... $ 78,317 $ 909,491
Net realized gain (loss) on investments.......................... ( 54,997) ( 502,521)
Change in unrealized appreciation
(depreciation) of investments............................. 81,916 ( 166,365)
----------------- --------------
Increase (decrease) in net assets from operations........... 105,236 240,605
Distributions from:
Net investment income....................................... ( 78,319) ( 909,489)
Net realized gains on investments........................... ( -- ) ( 520,431)
Transactions in shares of beneficial interest (Note 4)............ ( 10,060,450) ( 6,603,335)
----------------- --------------
Total increase (decrease)................................... ( 10,033,533) ( 7,792,650)
Net assets:
Beginning of period......................................... 11,523,279 19,315,929
----------------- --------------
End of period............................................... $ 1,489,746 $ 11,523,279
================= ==============
</TABLE>
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See Notes to Financial Statements.
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REICH & TANG GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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1. Summary of Accounting Policies.
Reich & Tang Government Securities Trust is a no-load, diversified, open-end
management investment company registered under the Investment Company Act of
1940. Its financial statements are prepared in accordance with generally
accepted accounting principles for investment companies as follows:
a) Valuation of Securities -
Debt securities are normally valued at the last quoted bid price for those
debt securities for which the over-the-counter market is the primary
market. Short-term obligations having remaining maturities of less than 60
days are valued at amortized cost, which approximates market value. As
authorized by the Board of Trustees, debt securities (other than short-term
obligations) may be valued on the basis of valuations furnished by a
pricing service which determines valuations based upon market transactions
for normal, institutional-size trading units of such securities.
b) Federal Income Taxes -
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income to its shareholders. Therefore, no provision for
federal income tax is required.
c) General -
Securities transactions are recorded on the trade date basis. Interest
income is accrued as earned. Discount and premium on securities purchased
are amortized over the life of the respective securities. Realized gains
and losses from securities transactions are recorded on the identified cost
basis. Dividends and capital gain distributions to shareholders are
recorded on the ex-dividend date. It is the Trust's policy to take
possession of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient
to cover the value of the repurchase agreements.
2. Investment Advisory Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management L.P. ("The Manager") equal to .35% of the
Fund's average daily net assets. The Manager is required to reimburse the Fund
for its expenses (exclusive of interest, taxes, brokerage, and extraordinary
expenses) to the extent that such expenses, including the management fee, for
any fiscal year exceed 2 1/2% of the first $30 million of its average net
assets, 2% of the $70 million of its average net assets and 1 1/2% of its
average net assets in excess of $100 million.
Pursuant to an Administrative Services Agreement, the Fund pays to the Manager
an annual fee of .20% of the Fund's average daily net assets.
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Trust and Reich & Tang Distributors L.P. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement. For
its services under the Shareholder Servicing Agreement, the Distributor receives
from the Trust an annual fee equal to .25% of the Trust's average daily net
assets. There were no additional expenses borne by the Trust pursuant to the
Distribution Plan.
During the period ended August 31, 1995, the Manager waived investment
management fees and administration fees of $6,288, and $3,953 and the
Distributor waived shareholder servicing fees of $4,941 respectively. In
addition, although not required to do so, the Manager has agreed to reimburse
expenses amounting to $35,941.
3. Investment Transactions.
Purchases and sales of investment securities, other than short-term investments,
totaled $0 and $10,733,867, respectively. Accumulated undistributed realized
losses at August 31, 1995 amounted to $557,518.
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REICH & TANG GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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4. Transactions in Shares of Beneficial Interest.
At August 31, 1995, an unlimited number of shares of beneficial interest ($.01
par value) were authorized and capital paid in amounted to $2,063,833.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
August 31, 1995 February 28, 1995
----------------------------------- --------------------------------
Shares Amount Shares Amount
--------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C>
Sold.................................... 29,133 $ 283,982 378,277 $ 3,810,651
Issued on reinvestment of dividends..... 7,132 69,600 141,342 1,376,763
Redeemed................................ ( 1,069,664) ( 10,414,032) ( 1,196,489) ( 11,790,749)
--------------- ---------------- ------------- --------------
Net increase (decrease)................. ( 1,033,399) ($ 10,060,450) ( 676,870) ($ 6,603,335)
=============== ================ ============= ==============
</TABLE>
5. Selected Financial Information.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
Six Months Ended February 28, February 29, February 28,
---------------------------- ------------ ------------
August 31, 1995 1995 1994 1993 1992 1991
--------------- ------ ------ ------ ------ ------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.72 $10.37 $10.83 $10.27 $ 9.89 $9.58
----------- ------ ------ ------ -------- ------
Income from investment operations:
Net investment income............... .19 .48 0.49 0.68 0.75 0.77
Net realized and unrealized
gain(loss) on investments....... .10 ( .37) 0.09 0.66 0.38 0.31
----------- ------- ------ ------ -------- ------
Total from investment operations.... .29 .11 0.58 1.34 1.13 1.08
Less Distributions:
Dividends from net investment income ( .19) ( .48) ( 0.49) ( 0.68) ( 0.75) ( 0.77)
Dividends from net realized gain
on investments................ -- ( .28) ( 0.55) ( 0.10) -- --
------------ ------- ------- ------- -------- ------
Total Distributions............. ( .19) ( .76) ( 1.04) ( 0.78) ( 0.75) ( 0.77)
------------ ------- ------- ------- -------- -------
Net asset value, end of period...... $ 9.82 $ 9.72 $ 10.37 $ 10.83 $ 10.27 $ 9.89
============ ======= ======= ======= ======== =======
Total Return........................ 2.51% 1.23% 5.33% 13.60% 11.22% 11.78%
Ratios/Supplemental Data
Net assets, end of period (000)..... $ 1,490 $11,523 $19,316 $20,166 $ 14,576 $13,247
Ratios to average net assets:
Expenses.......................... .56%*+ .55%+ 0.55%+ 0.55%+ 0.55%+ 0.55%+
Net investment income............. 3.95%*+ 4.86%+ 4.47%+ 6.48%+ 7.49%+ 7.92%+
Portfolio turnover rate............. 0.00% 25.43% 83.55% 66.47% 19.86% 7.25%
* Annualized
+ Net of investment management, administration and shareholder servicing
fees waived equivalent to .77% of average net assets for the period ended
August 31, 1995, .73% of average net assets for the year ended February 28,
1995 and .80% of average net assets for each of the four years in the year
ending February 28, 1994, plus expenses reimbursed equivalent to 1.81%,
.01%, .002%, .05%, .20%, and .13% of average net assets, respectively.
</TABLE>
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