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GALAXY
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FUNDS
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[Graphic Omitted]
INSTITUTIONAL TREASURY MONEY MARKET FUND REPORT
SEMI-ANNUAL
REPORT
FOR THE SIX MONTHS ENDED
APRIL 30, 1997
<PAGE>
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Jylanne Dunne
Vice President &
Assistant Treasurer
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
DISTRIBUTOR
First Data
Distributors, Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581
ADMINISTRATOR
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581-5108
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THE GALAXY FUND
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INSTITUTIONAL TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
VALUE
PAR VALUE (NOTE 2)
---------- ------------
U.S. GOVERNMENT OBLIGATIONS - 95.74%
U.S. TREASURY BILLS (A) - 66.31%
$ 17,500,000 5.02%, 05/01/97 ................................. $ 17,500,000
15,000,000 5.02%, 05/08/97 ................................. 14,985,213
22,000,000 4.97%, 05/22/97 ................................. 21,933,103
15,000,000 5.19%, 05/29/97 ................................. 14,940,325
40,000,000 4.99%, 06/05/97 ................................. 39,804,632
25,000,000 5.15%, 06/12/97 ................................. 24,850,958
25,000,000 5.05%, 06/19/97 ................................. 24,826,799
12,775,000 5.07%, 06/26/97 ................................. 12,674,248
22,000,000 5.04%, 07/03/97 ................................. 21,806,152
25,000,000 5.11%, 07/10/97 ................................. 24,752,278
15,000,000 5.14%, 07/17/97 ................................. 14,834,931
14,700,000 5.19%, 07/24/97 ................................. 14,522,438
25,000,000 5.19%, 08/14/97 ................................. 24,621,563
10,000,000 5.30%, 08/21/97 ................................. 9,835,111
-------------
281,887,751
-------------
U.S. TREASURY NOTES - 29.43%
50,000,000 6.50%, 05/15/97 ................................. 50,022,963
25,000,000 6.75%, 05/31/97 ................................. 25,026,149
15,000,000 5.63%, 06/30/97 ................................. 15,005,551
35,000,000 5.88%, 07/31/97 ................................. 35,044,098
-------------
125,098,761
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TOTAL U.S. GOVERNMENT OBLIGATIONS ...................... 406,986,512
(Cost $406,986,512) -------------
SHARES
------
INVESTMENT COMPANY - 3.92%
16,672,083 Federated U.S. Treasury Cash Reserve ............. 16,672,083
-------------
TOTAL INVESTMENT COMPANY ......................... 16,672,083
(Cost $16,672,083) -------------
TOTAL INVESTMENTS - 99.66% ...................................... 423,658,595
(Cost $423,658,595)* -------------
NET OTHER ASSETS AND LIABILITIES - 0.34% ........................ 1,426,414
-------------
NET ASSETS - 100.00% ............................................ $ 425,085,009
=============
- -------------
* Aggregate cost for Federal tax purposes.
(A) Annualized yields at time of purchase.
See Notes to Financial Statements.
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THE GALAXY FUND
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INSTITUTIONAL TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
ASSETS:
Investments at value (Note 2) (cost $423,658,595) .......... $ 423,658,595
Interest and dividend receivable ........................... 3,049,764
Deferred organizational expense (Note 2) ................... 3,201
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Total Assets ............................................. 426,711,560
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LIABILITIES:
Dividends payable .......................................... 1,543,720
Advisory fee payable (Note 3) .............................. 34,315
Payable to FDISG (Note 3) .................................. 23,141
Trustees' fees and expenses payable (Note 3) ............... 5,110
Accrued expenses and other payables ........................ 20,265
-------------
Total Liabilities ........................................ 1,626,551
-------------
NET ASSETS .................................................... $ 425,085,009
=============
NET ASSETS CONSIST OF:
Par value (Note 5) ......................................... $ 425,135
Paid-in capital in excess of par value ..................... 424,710,054
Undistributed net investment income ........................ 4,970
Accumulated net realized (loss) on investments sold ........ (55,150)
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TOTAL NET ASSETS .............................................. $ 425,085,009
=============
SHARES OF BENEFICIAL INTEREST OUTSTANDING ..................... 425,135,189
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding) .......................... $ 1.00
=============
See Notes to Financial Statements.
<PAGE>
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THE GALAXY FUND
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INSTITUTIONAL TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
INVESTMENT INCOME:
Interest (Note 2) ............................................. $11,323,362
Dividends (Note 2) ............................................ 277,965
-----------
Total investment income ..................................... 11,601,327
-----------
EXPENSES:
Investment advisory fee (Note 3) .............................. 454,840
Administration fee (Note 3) ................................... 204,678
Fund accounting fee (Note 3) .................................. 21,168
Legal fee (Note 3) ............................................ 13,871
Registration fees ............................................. 4,056
Insurance ..................................................... 3,387
Custodian fee ................................................. 6,304
Audit fee ..................................................... 5,655
Trustees' fees and expenses (Note 3) .......................... 6,057
Reports to shareholders ....................................... 2,330
Transfer agent fee (Note 3) ................................... 2,589
Amortization of organization costs (Note 2) ................... 1,526
Miscellaneous ................................................. 8,522
-----------
Total expenses before waiver (Note 4) ....................... 734,983
Less: waiver (Note 4) ....................................... (318,388)
-----------
Total expenses net of waiver ................................ 416,595
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NET INVESTMENT INCOME ............................................ 11,184,732
-----------
NET REALIZED GAIN ON INVESTMENTS SOLD (NOTE 2) ................... 6,085
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $11,190,817
===========
See Notes to Financial Statements.
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THE GALAXY FUND
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INSTITUTIONAL TREASURY MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996
---------------- ----------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD .............................. $ 500,927,090 $ 506,691,864
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ....................................... 11,184,732 24,316,334
Net realized gain (loss) on investments sold ................ 6,085 (23,590)
--------------- ---------------
Net increase in net assets resulting from operations ...... 11,190,817 24,292,744
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ....................................... (11,184,732) (24,316,334)
--------------- ---------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares ........................... 953,832,764 1,824,149,469
Issued to shareholders in reinvestment of dividends ......... 927,774 1,914,180
Cost of shares repurchased .................................. (1,030,608,704) (1,831,804,833)
--------------- ---------------
Net (decrease) from share transactions .................... (75,848,166) (5,741,184)
--------------- ---------------
Net (decrease) in net assets ............................ (75,842,081) (5,764,774)
--------------- ---------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ................. $ 425,085,009 $ 500,927,090
=============== ===============
(A) Undistributed net investment income ........................ $ 4,970 $ 4,970
=============== ===============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ....................................................... 953,832,764 1,824,149,469
Issued to shareholders in reinvestment of dividends ......... 927,774 1,914,180
Repurchased ................................................. (1,030,608,704) (1,831,804,833)
--------------- ---------------
Net (decrease) in shares outstanding ...................... (75,848,166) (5,741,184)
=============== ===============
</TABLE>
See Notes to Financial Statements.
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THE GALAXY FUND
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Institutional Treasury Money Market Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1997 ---------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993(1)
----------- ---- ---- ---- -------
<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 (A) ............... 0.02 0.05 0.05 0.04 0.02
Net realized and unrealized
gain (loss) on investments ............ -- -- -- -- --
-------- -------- -------- -------- --------
Total from Investment Operations: ..... 0.02 0.05 0.05 0.04 0.02
-------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income .... (0.02) (0.05) (0.05) (0.04) (0.02)
Dividends from net realized capital gains -- -- -- -- --
-------- -------- -------- -------- --------
Total Dividends: ...................... (0.02) (0.05) (0.05) (0.04) (0.02)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of Period ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ............................... 2.48%** 5.12% 5.53% 3.56% 1.59%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......... $425,085 $500,927 $506,692 $326,225 $158,890
Ratios to average net assets:
Net investment income including
reimbursement/waiver .................. 4.92%* 5.00% 5.38% 3.63% 2.85%*
Operating expenses including
reimbursement/waiver .................. 0.18%* 0.19% 0.17% 0.17% 0.14%*
Operating expenses excluding
reimbursement/waiver .................. 0.32%* 0.33% 0.33% 0.39% 0.46%*
- -----------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on April 15, 1993.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Adviser and/or Administrator
for the period ended April 30, 1997, for the years ended October 31, 1996, 1995 and 1994 and for the period ended
October 31, 1993 were $0.02, $0.05, $0.05, $0.04 and $0.01, respectively.
</TABLE>
See Notes to Financial Statements.
<PAGE>
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THE GALAXY FUND
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company. As of the date of this report, the Trust
offered twenty-four managed investment portfolios. The accompanying financial
statements and financial highlights are those of the Institutional Treasury
Money Market Fund (the "Fund") only.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
PORTFOLIO VALUATION: Securities in the Fund are valued utilizing the amortized
cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act.
This method involves valuing a portfolio security initially at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are declared
daily and paid monthly. Net realized capital gains, if any, are distributed at
least annually.
Income dividends and capital gain dividends are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats the Fund as a separate entity for
federal income tax purposes. The Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, the Fund will not be subject to Federal
income taxes to the extent that it distributes substantially all of its taxable
or tax-exempt income, if any, for its tax year ending October 31. In addition,
by distributing in each calendar year substantially all of its net investment
income, capital gains, and certain other amounts, if any, the Fund will not be
subject to a Federal excise tax. Therefore, no Federal income or excise tax
provision is recorded.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of the Fund. Expenses directly attributable to the Fund are charged
to the Fund, while expenses which are attributable to more than one fund of the
Trust are allocated among the respective funds.
ORGANIZATION COSTS: The Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
initial shares for distribution under Federal and state securities laws. All
such costs are amortized using the straight-line method over a period of five
years beginning with the Fund's commencement of operation. In the event that any
of the initial shares purchased by the Fund's sponsor are redeemed during such
period, the Fund will be reimbursed by any holder for any unamortized
organization costs in the same proportion as the number of initial shares being
redeemed bears to the number of initial shares outstanding at the time of
redemption.
3. INVESTMENT ADVISORY, ADMINISTRATION AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Adviser"), an
indirect wholly-owned subsidiary of Fleet Financial Group, Inc., are parties to
an investment advisory agreement under which the Investment Adviser provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.20%
of the average daily net assets of the Fund (see also Note 4).
The Trust and First Data Investor Services Group, Inc. ("FDISG"), a
wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which FDISG (the "Administrator") provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.09%
of the first $2.5 billion of the combined average daily net assets of the Fund
and the other funds offered by the Trust (whose financial statements are
provided in separate reports), 0.085% of the next $2.5 billion of combined
average daily net assets and 0.075% of combined average daily net assets over $5
billion. In addition, FDISG also provides certain fund accounting, custody
administration and transfer agency services pursuant to certain fee
arrangements. Pursuant to these fee arrangements, FDISG compensates the Trust's
custodian bank, The Chase Manhattan Bank, for its services.
Prior to September 5, 1996, FDISG was entitled to receive administration fees,
computed daily and paid monthly, at the annual rate of 0.09% of the first $2.5
billion of the combined average daily net assets of the Fund and the other funds
offered by the Trust, 0.085% of the next $2.5 billion of combined average daily
net assets and 0.08% of combined average daily net assets over $5 billion.
First Data Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of FDISG and an indirect wholly-owned subsidiary of First Data Corporation, acts
as the exclusive distributor of the Trust's shares.
Certain officers of the Trust may be officers of the Administrator and/or
Distributor. Such officers receive no compensation from the Trust for serving in
their respective roles. No officer, director or employee of the Investment
Adviser serves as an officer, Trustee or employee of the Trust. Each Trustee is
entitled to receive for services as a trustee of the Trust, The Galaxy VIP Fund
("VIP") and Galaxy Fund II ("Galaxy II") an aggregate fee of $29,000 per annum
plus certain other fees for attending or participating in meetings as well as
reimbursement for expenses incurred in attending meetings. The Chairman of the
Boards of Trustees and the President and Treasurer of the Trust, VIP and Galaxy
II are also entitled to additional fees for their services in these capacities.
These fees are allocated among the funds of the Trust, VIP and Galaxy II, based
on their relative net assets. Prior to November 1, 1996, each Trustee was
entitled to receive for services as a trustee of the Trust and VIP an aggregate
fee of $18,000 per annum plus certain other fees for attending or participating
in meetings as well as reimbursement for expenses incurred in attending
meetings. The Chairman of the Boards of Trustees of the Trust and VIP and the
President and Treasurer of the Trust and VIP were entitled to additional annual
fees for their services in these capacities.
In addition, effective March 1, 1996, each Trustee became eligible to
participate in the Trust's Deferred Compensation Plan (the "Plan"), an unfunded,
non-qualified deferred compensation plan. The Plan allows each Trustee to defer
receipt of all or a percentage of fees which otherwise would be payable for
services performed. On January 1, 1997, the Plan was merged into a combined
Deferred Compensation Plan for the Trust, VIP and Galaxy II.
Expenses for the six months ended April 30, 1997 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is
Secretary of the Trust.
4. WAIVER OF FEES
The Investment Adviser and Administrator voluntarily agreed to waive a portion
of their fees for certain expenses so that total expenses of the Fund would not
exceed certain expense limitations. For the six months ended April 30, 1997, the
Investment Adviser and Administrator waived fees totaling $227,420 and $90,968,
respectively. The Investment Adviser and Administrator, at their discretion, may
revise or discontinue the voluntary fee waivers at anytime.
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited
number of shares of beneficial interest in the Fund, each with a par value of
$0.001. The Trust's shares are classified into twenty-four classes of shares
consisting of one or more series of shares including: Class S - Institutional
Treasury Money Market Fund.
6. CAPITAL LOSS CARRYFORWARD
As of October 31, 1996, the Fund had capital loss carryforwards of $37,645,
expiring in 2002 and $21,856 expiring in 2004.
TAX INFORMATION (UNAUDITED)
During the period ended April 30, 1997, 100% of the income earned by the Fund
was from direct obligations of the U.S. Government. Appropriate tax information
detailing this information on a calendar year basis will accompany your year-end
tax statement. As each state's rules on the exemption of this income differ,
please consult your tax advisor regarding specific tax treatment.
<PAGE>
This report is submitted for the general information of shareholders of The
Galaxy Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Fund, which
contains more information concerning the Fund's investment policies, as well as
fees and expenses and other pertinent information. Read the prospectus carefully
before you invest.
Shares of the funds are not deposits or obligations of, or guaranteed or
endorsed by Fleet Financial Group, Inc. or any of its affiliates, Fleet
Investment Advisors Inc., or any Fleet bank. Shares of the funds are not
federally insured by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. Investment return
and principal value will vary as a result of market conditions or other factors
so that shares of the funds, when redeemed, may be worth more or less than their
original cost. An investment in the funds involves investment risks, including
the possible loss of principal.
[Recycle Logo]
This report was printed on recycled paper.
<PAGE>
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GALAXY
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FUNDS
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4400 Computer Drive BULK RATE
Box 5108 U. S. POSTAGE
Westboro, MA 01581-5108 PAID
PERMIT NO. 105
N. READING, MA
---------------------
FN-191 (5/96)
