Dear Shareholders,
I'm pleased to report on the positive performance of your Blanchard 100%
Treasury Money Market Fund for the fiscal year ended April 30, 1995.
Although past performance is no guarantee of future results, I believe the
past fiscal year's results demonstrate the Fund's ability to seek solid monthly
income while placing special emphasis on capital preservation.
The Year In Review
During 1994 and into the first quarter of 1995, the Federal Reserve
aggressively raised interest rates seven times. The final tightening was on
February 1, 1995, when the Federal Reserve raised the Fed Funds level by 50
basis points (.50%) to 6.00%. The period represented a well-balanced economic
expansion that reflected few imminent signs of substantial weakening, and the
Federal Reserve was acting to forestall potential inflation.
The domestic bond market suffered negative consequences this past year, as
the increase in interest rates caused the prices of fixed income securities to
decline. Consequently, in an interest rate environment reflecting higher rates,
the Blanchard 100% Treasury Money Market Fund generated an increase in yields
paid, while preserving your principal investment.
Looking ahead to the upcoming year, we feel that the substantial slowdown in
economic growth will cause the Federal Reserve to hold interest rates stable
until the fourth quarter. Furthermore, we believe that the economy is heading
toward a "soft landing," which is defined as a gradual slowdown in economic
growth without incurring a recession.
Because your Fund invests strictly in U.S. Treasury securities, it will
continue to offer you a potentially "safe harbor" from any market volatility,
while generating monthly income that is exempt from state and local taxes
(except in Pennsylvania) _ so you'll keep more of what you earn. Additionally,
the Fund's convenient free check writing privilege offers you immediate access
at all times to the cash in your account.
We look forward to being of continued service to you throughout this new
fiscal year 1995. Rest assured that our highest priorities remain quality,
safety, and performance for your investment with the Fund.
Thank you for your continued confidence and support.
Sincerely,
EM:ml Edward J. Merkle
Managing Director
HSBC Asset Management Americas, Inc
Portfolio Managers of the Blanchard 100% Treasury Money Market Fund
The Fund is not guaranteed by the U.S. government. Yield is historic and
will fluctuate, and there is no absolute guarantee that the Fund will be able to
maintain a constant $1.00 share price.
Distributed by Sheffield Investments, Inc. (1551) 02ARSL0695
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
April 30, 1995
<TABLE>
<CAPTION>
Principal Value
--------- -----
<S> <C> <C>
U.S. Government Obligations (97.1%)
U.S. Treasury Bill 5.548% 5/04/95................ $48,000,000 $ 47,977,820
U.S. Treasury Bill 5.724% 5/11/95................ 2,210,000 2,206,492
U.S. Treasury Bill 5.923% 5/25/95................ 1,600,000 1,593,706
U.S. Treasury Bill 5.680% 6/01/95................ 87,170,000 86,745,708
U.S. Treasury Bill 5.773% 6/22/95................ 3,300,000 3,272,705
U.S. Treasury Bill 5.343% 8/24/95................ 18,950,000 18,632,462
------------
Total Investments
(Amortized Cost $160,428,893)(a)(97.1%)........ 160,428,893
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES (2.9%)................... 4,725,666
------------
NET ASSETS (100%)................................ $165,154,559
============
<FN>
(a) The amortized cost for book purposes and cost for federal income tax
purposes are the same.
</FN>
</TABLE>
See notes to financial statements.
2
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(Amortized Cost $160,428,893) (note 1)...................... $160,428,893
Cash.......................................................... 223,138
Receivables for:
Investments sold............................................ 3,375,000
Shares of beneficial interest sold.......................... 1,719,677
Interest.................................................... 65,390
------------
Total assets.............................................. 165,812,098
------------
Liabilities:
Payables for:
Shares of beneficial interest repurchased................... 366,426
Dividends to shareholders................................... 33,415
Accrued expenses and other liabilities........................ 257,698
------------
Total liabilities......................................... 657,539
------------
Net assets (unlimited authorized shares of beneficial interest,
$.01 par value, 165,260,846 shares outstanding)............... $165,154,559
============
Net asset value per share....................................... $1.00
=====
</TABLE>
See notes to financial statements.
3
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
For the Year Ended April 30, 1995
<TABLE>
<S> <C> <C>
Investment income:
Interest......................................................... $9,612,788
Expenses
Investment management fee (note 2)................... $1,005,077
Transfer agent fees.................................. 497,100
Trustees' fees, retirement plan curtailment and
other expenses (note 4)............................ 237,009
Accounting fees...................................... 160,800
Professional fees.................................... 90,383
Shareholder reports and notices...................... 60,499
Registration fees.................................... 47,500
Custodian fees....................................... 35,499
Other................................................ 6,067
----------
Total expenses................................... 2,139,934
Less: Fund expenses voluntarily waived
by Manager (note 2)............................ (166,695)
----------
Net expenses..................................................... 1,973,239
----------
Investment income--net increase in net assets
resulting from operations...................................... $7,639,549
==========
</TABLE>
See notes to financial statements.
4
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year For the Year
Ended Ended
April 30, 1995 April 30, 1994
-------------- --------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income-net increase resulting from
operations................................. $ 7,639,549 $ 4,716,947
Dividends to shareholders from:
Investment income-net........................ (7,639,549) (4,716,947)
------------ ------------
--- ---
Transactions in shares of beneficial
interest-net increase (decrease) (note 5).... (65,636,404) 65,816,563
------------ ------------
Net increase (decrease) in net assets...... (65,636,404) 65,816,563
Net assets:
Beginning of year............................ 230,790,963 164,974,400
------------ ------------
End of year.................................. $165,154,559 $230,790,963
============ ============
</TABLE>
See notes to financial statements.
5
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1995
NOTE 1-Organization and Accounting Policies:
Blanchard 100% Treasury Money Market Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. It is a series of Blanchard Funds which
was organized as a Massachusetts business trust on January 24, 1986. The Fund
commenced operations on February 24, 1989.
A. Valuation of Investments-Portfolio securities are valued at amortized
cost, which approximates market value.
B. Accounting for Investments-Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). In computing net
investment income, the Fund amortizes any premiums or accretes any discounts on
securities owned. Realized gains and losses on security transactions are
determined on the identified cost method.
C. Federal Income Tax Status-It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. Dividends and Distributions to Shareholders-The Fund records dividends
and distributions to its shareholders on the record date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
E. Other-Certain expenses for the Blanchard Funds are allocated among the
Funds based upon their relative average net assets.
NOTE 2-Investment Management Agreement:
Pursuant to a management agreement (the "Agreement"), Sheffield Management
Company, the Manager manages the Fund and the investment of the Fund's assets
subject at all times to the supervision of the Fund's Trustees. In addition to
providing overall business management and administrative services, the Manager
selects, monitors and evaluates the portfolio adviser, HSBC Asset Management
Americas, Inc. (formerly named Marinvest, Inc.), (the "Portfolio Adviser"). The
Manager receives from the Fund an advisory fee payable monthly at an annual rate
of .5% of the first $500 million of the Fund's average daily net assets, .475%
of the Fund's average daily net assets in excess of $500 million but not
exceeding $1 billion, plus .45% of the Fund's average daily net assets in excess
of $1 billion. The Manager pays all fees of the Portfolio Adviser for its
services. The Manager advised the Fund that it paid $200,998 to the Portfolio
Adviser during the year ended April 30, 1995.
6
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 1995
The Manager voluntarily waived a portion of its advisory fee, which amounted
to $166,695, for the year ended April 30, 1995.
Pursuant to the Agreement, the Manager provides continuous supervision of
the investment portfolio, furnishes office space and facilities, maintains
certain of the Fund's books and records, and pays the salaries and expenses of
all personnel, including officers of the Fund, who are employees of the Manager
and its affiliates. The Manager has advised the Fund that for the year ended
April 30, 1995 it incurred costs, which were reimbursed by the Fund, amounting
to $220,924 for performing internal accounting and transfer agency functions for
the Fund.
Expenses of the Fund, exclusive of taxes, interest, brokerage commissions,
and extraordinary expenses, are subject to the expense limitations imposed by
one of the states in which shares of the Fund are offered for sale. For the year
ended April 30, 1995 the Fund's expenses did not exceed such limitation.
Certain officers and/or Trustees of the Fund are officers and/or directors
of the Manager.
NOTE 3-Acquisition Agreement:
Sheffield Management Company ("the Manager") and Sheffield Investments, Inc.
(the "Distributor"), have entered into an acquisition agreement (the
"Acquisition Agreement") with Signet Banking Corporation and two of its
subsidiaries ("Signet"), dated February 15, 1995, pursuant to which Sheffield
will sell to Signet the assets relating to, and the ability to succeed to
contracts with, the Blanchard Funds, including Blanchard 100% Treasury Money
Market Fund (collectively, the "Funds"). The transactions contemplated by the
Acquisition Agreement which have been approved by the Board of Trustees of the
Funds are conditioned upon the approval of the shareholders of each Fund, of (1)
a new investment management agreement with Signet, (2) a new distribution
agreement with Federated Securities Corp., and (3) certain other conditions.
No material changes are contemplated in the operation of the Funds and no
management or distribution and administration fee increases are being proposed.
NOTE 4-Transaction with Affiliates:
The Funds have adopted an unfunded noncontributory pension plan (the "Plan")
covering all independent directors/trustees of the Funds who will have served as
an independent director/trustee for at least five years at the time of
retirement. Benefits under this plan are based on an annual amount equal to 75%
of the director/trustee fee at the time of retirement, plus 5% for each year of
service in excess of five years of service but not in excess of ten years of
service. Net periodic pension expense included in Trustee fees, retirement plan
curtailment and other expenses in the Statement of Operations for the year ended
April 30, 1995 was $52,296. As indicated in Note 3, the Manager has entered into
an agreement which provides for the acquisition of the Manager by Signet.
Following the acquisition, the independent directors/trustees for the Funds will
not stand for re-election. As a result, the Plan was curtailed and additional
pension expense of $154,090 was recorded to reflect previously unrecognized
prior service costs of the independent director/trustees. Included in accrued
expenses and other liabilities at April 30, 1995 is $206,386 of accrued pension
expense.
7
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (continued)
April 30, 1995
NOTE 5-Shares of Beneficial Interest:
Transactions in shares of beneficial interest, all at $1 per share, were as
follows:
<TABLE>
<CAPTION>
For the Year For the Year
Ended Ended
April 30, 1995 April 30, 1994
-------------- --------------
<S> <C> <C>
Sold........................................ 212,621,088 340,832,974
Reinvestment of dividends................... 7,175,266 4,285,831
----------- -----------
219,796,354 345,118,805
Repurchased................................ (285,432,758) (279,302,242)
----------- -----------
Net increase (decrease).................... (65,636,404) 65,816,563
=========== ===========
</TABLE>
NOTE 6-Financial Highlights:
Selected ratios and per share data for a share of beneficial interest
outstanding:
<TABLE>
<CAPTION>
For the Year Ended April 30,
-----------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Per Share Operating Performance:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................ $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Income from investment operations:
Net investment income........................... .04 .03 .03 .04 .07
Net gains or losses on securities
(both realized and unrealized)................ .00 .00 .00 .00 .00
----- ----- ----- ----- -----
Net income from investment operations......... .04 .03 .03 .04 .07
----- ----- ----- ----- -----
Less Dividends to Shareholders:
Dividends from investment income-net............ (.04) (.03) (.03) (.04) (.07)
----- ----- ----- ----- -----
Change in net asset value..................... .00 .00 .00 .00 .00
----- ----- ----- ----- -----
Net asset value, end of year...................... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total return...................................... 4.02% 2.76% 3.42% 4.60% 6.80%
Ratios/Supplemental Data:
Net assets, end of year ($ Million)............. $165 $231 $165 $58 $38
Ratios of expenses to average net assets*(1).... .99% .41% .08% .86% 1.11%
Ratios of net investment income
to average net assets*(1)..................... 3.83% 2.80% 3.27% 4.52% 6.62%
<FN>
* The ratios of expenses to average net assets and net investment income to
average net assets would have been 1.07% and 3.75%, respectively, for the year
ended April 30, 1995, .93% and 2.29%, respectively, for the year ended April
30, 1994, .92% and 2.43%, respectively, for the year ended April 30, 1993,
1.46% and 3.92%, respectively, for the year ended April 30, 1992, 1.23% and
6.50%, respectively, and for the year ended April 30, 1991, if a portion of
the Fund's expenses had not been voluntarily waived by the Manager.
(1)Net of expenses waived and absorbed by Manager.
</FN>
</TABLE>
8
<PAGE>
BLANCHARD 100% TREASURY MONEY MARKET FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
Blanchard 100% Treasury Money Market Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Blanchard 100% Treasury Money
Market Fund (the "Fund") at April 30, 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 five years in
the period then ended, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these finanical
statements based on our audits. We conducted our audits of these finanical
statements in accordance with generally acepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, asssessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at April 30, 1995 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
June 20, 1995
9
<PAGE>
(Left Column)
Portfolio Advisers
Calveti Capital Management, Ltd.
Custodian and Transfer Agent
United States Trust Company
of New York
Independent Accountants
Price Waterhouse LLP
Legal Counsel
Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel
Blanchard Precious
Metals Fund, Inc.
41 Madison Ave., 24th Floor
New York, NY 10010-2267
(Right Column)
Blanchard
Precious Metals
Fund, Inc.
Annual Report
April 30, 1995
Managed by: Sheffield Management Company
41 Madison Ave., 24th Floor
New York, NY 10010-2267
1-800-922-7771