GALAXY INTITUTIONAL GOVERNMENT MONEY MARKET FUND
GALAXY FUNDS
SEMI-ANNUAL REPORT
APRIL 30, 2000
GALAXY INSTITUTIONAL GOVERNMENT
MONEY MARKET FUND
[GRAPHIC OMITTED]
GALAXY
FUNDS
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INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 80.25%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 26.57%
$10,000,000 5.88%, 05/01/00 (A) $10,000,000
5,000,000 5.90%, 05/04/00(A) 4,997,542
10,000,000 5.90%, 05/16/00 (A) 9,975,417
10,000,000 5.90%, 05/23/00 (A) 9,963,944
5,000,000 6.08%, 07/20/00 (A) 4,932,444
4,000,000 5.97%, 07/26/00 (B), MTN 3,999,413
5,000,000 5.92%, 08/04/00 (B), MTN 4,999,221
10,000,000 5.93%, 12/08/00 (B), MTN 9,994,083
5,000,000 6.47%, 02/16/01, MTN 4,998,849
------------
63,860,913
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION- 24.85%
6,200,000 5.89%, 05/02/00 (A) 6,198,986
10,000,000 5.88%, 05/09/00(A) 9,986,933
5,000,000 5.89%, 05/18/00 (A) 4,986,093
3,640,000 6.54%, 05/19/00 3,641,822
10,000,000 5.90%, 05/23/00 (A) 9,963,944
10,000,000 5.84%, 05/25/00 (A) 9,961,067
10,000,000 5.94%, 12/20/00 (B), MTN 9,992,042
5,000,000 6.35%, 01/05/01, MTN 4,993,002
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59,723,889
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FEDERAL HOME LOAN BANK - 20.76%
10,000,000 5.90%, 05/22/00 (A) 9,965,583
2,000,000 5.20%, 05/26/00 1,999,950
13,000,000 5.85%, 05/26/00 (A) 12,947,233
5,000,000 6.00%, 07/28/00 (B) 4,999,279
5,000,000 5.71%, 08/09/00 4,999,139
5,000,000 6.13%, 10/04/00 (B) 4,998,534
5,000,000 5.92%, 10/13/00 4,997,926
5,000,000 6.45%, 03/16/01 4,995,324
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49,902,968
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FEDERAL FARM CREDIT BANK - 6.41%
5,000,000 5.97%, 09/01/00 (B) 4,999,496
5,000,000 5.87%, 11/08/00, MTN 5,480,888
5,000,000 5.13%, 04/02/01 4,939,457
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15,419,841
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STUDENT LOAN MARKETING ASSOCIATION - 1.66%
4,000,000 6.05%, 11/03/00, MTN 3,990,399
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TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS 192,898,010
------------
(Cost $192,898,010)
SEE NOTES TO FINANCIAL STATEMENTS.
1
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INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
REPURCHASE AGREEMENT - 21.01%
$50,494,000 Repurchase Agreement with:
Merrill Lynch
5.70%, Due 05/01/2000, dated 04/28/2000,
Repurchase Price $50,517,985
(Collateralized by U.S. Treasury Bonds & Notes,
5.63% - 8.13%, Due 11/15/01 through 05/15/21,
Total Par $50,942,000
Market Value $51,507,193) $ 50,494,000
------------
Total Repurchase Agreement 50,494,000
------------
(Cost $50,494,000)
SHARES
------
INVESTMENT COMPANY - 0.07%
166,699 Federated U.S. Treasury Cash Reserve 166,699
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TOTAL INVESTMENT COMPANY 166,699
------------
(Cost $166,699)
TOTAL INVESTMENTS - 101.33% 243,558,709
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(Cost $243,558,709)*
NET OTHER ASSETS AND LIABILITIES - (1.33)% (3,197,932)
------------
NET ASSETS - 100.00% $240,360,777
============
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* Aggregate cost for federal tax purposes.
(A) Discount yield at time of purchase.
(B) Interest is reset at various time intervals. The interest rate shown
reflects the rate in effect at April 30, 2000.
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
2
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INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
ASSETS:
Investments
Investments at amortized cost (Note 2)............... $ 193,064,709
Repurchase agreement................................. 50,494,000
--------------
Total Investments at value......................... 243,558,709
Cash................................................... 994
Interest and dividends receivable...................... 1,044,074
--------------
Total Assets......................................... 244,603,777
--------------
LIABILITIES:
Dividends payable........................................ 1,052,144
Payable for shares repurchased........................... 3,107,299
Advisory fee payable (Note 3)............................ 17,654
Payable to Administrator (Note 3)........................ 14,333
Trustees' fees and expenses payable (Note 3)............. 11,906
Accrued expenses and other payables...................... 39,664
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Total Liabilities...................................... 4,243,000
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NET ASSETS.................................................. $ 240,360,777
==============
NET ASSETS consist of:
Par value (Note 5)........................................ $ 240,361
Paid-in capital in excess of par value.................... 240,120,418
Undistributed net investment income....................... 5,152
Accumulated net realized (loss) on investments sold....... (5,154)
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TOTAL NET ASSETS............................................. $ 240,360,777
==============
SHARES OF BENEFICIAL INTEREST OUTSTANDING.................... 240,360,779
--------------
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding)......................... $ 1.00
==============
SEE NOTES TO FINANCIAL STATEMENTS.
3
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Institutional Government Money Market Fund
Statement of Operations
For the period ended April 30, 2000 (unaudited)
INVESTMENT INCOME:
Interest (Note 2)........................................ $ 6,622,297
Dividends (Note 2)....................................... 4,253
--------------
Total investment income................................ 6,626,550
--------------
EXPENSES:
Investment advisory fee (Note 3)......................... 230,264
Administration fee (Note 3).............................. 103,619
Custodian fee ........................................... 7,113
Fund accounting fee (Note 3)............................. 26,696
Professional fees (Note 3)............................... 12,654
Transfer agent fee (Note 3).............................. 2,450
Trustees' fees and expenses (Note 3)..................... 5,043
Reports to shareholders.................................. 5,387
Miscellaneous............................................ 22,634
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Total expenses before reimbursement/waiver (Note 4).... 415,860
--------------
Less: reimbursement/waiver (Note 4)..................... (185,596)
--------------
Total expenses net of reimbursement/waiver.............. 230,264
--------------
NET INVESTMENT INCOME........................................ 6,396,286
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......... $ 6,396,286
==============
SEE NOTES TO FINANCIAL STATEMENTS.
4
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INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
------------------ ----------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD...................................... $ 222,442,738 $ 200,319,062
------------------ ----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................................... 6,396,286 10,831,855
Net realized gain on investments sold............................... -- --
------------------ ----------------
Net increase in net assets resulting from operations.............. 6,396,286 10,831,855
------------------ ----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income............................................... (6,396,286) (10,831,855)
------------------ ----------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares................................... 328,805,497 545,832,680
Issued to shareholders in reinvestment of dividends................. 525,278 1,271,007
Cost of shares repurchased.......................................... (311,412,736) (524,980,011)
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Net increase from share transactions.............................. 17,918,039 22,123,676
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Net increase in net assets........................................ 17,918,039 22,123,676
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NET ASSETS AT END OF PERIOD (INCLUDING LINE A)......................... $ 240,360,777 $ 222,442,738
================== ================
(A) Undistributed net investment income................................ $ 5,152 $ 5,152
------------------ ----------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold................................................................ 328,805,497 545,832,680
Issued to shareholders in reinvestment of dividends................. 525,278 1,271,007
Repurchased......................................................... (311,412,736) (524,980,011)
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Net increase in shares outstanding.................................. 17,918,039 22,123,676
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</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
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INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 2000 YEARS ENDED OCTOBER 31,
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(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- --------- --------- ---------- ---------- ---------
Income from Investment Operations:
Net investment income (A)............................ $ 0.03 0.05 0.05 0.05 0.05 0.05
---------- --------- --------- --------- ---------- ---------
Less Dividends:
Dividends from net investment income................. (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
---------- --------- --------- --------- ---------- ---------
Net increase (decrease) in net asset value............. -- -- -- -- -- --
---------- --------- --------- --------- ---------- ---------
Net Asset Value, End of Period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========= ========= ========= ========== =========
Total Return........................................... 2.80%** 4.92% 5.32% 5.09% 5.12% 5.53%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $ 240,361 $ 222,443 $ 200,319 $ 175,141 $ 500,927 $ 506,692
Ratios to average net assets:
Net investment income including
reimbursement/waiver............................... 5.55%* 4.82% 5.17% 4.94% 5.00% 5.38%
Operating expenses including reimbursement/waiver.... 0.20%* 0.20% 0.20% 0.19% 0.19% 0.17%
Operating expenses excluding reimbursement/waiver.... 0.36%* 0.38% 0.36% 0.33% 0.33% 0.33%
<FN>
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* Annualized
** Not Annualized
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for the six months ended April 30,
2000 (unaudited) and for the years ended October 31, 1999, 1998, 1997, 1996
and 1995 were $0.03, $0.05, $0.05, $ 0.05, $0.05 and $ 0.05, respectively.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
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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-nine managed investment portfolios. The accompanying financial
statements and financial highlights are those of the Institutional Government
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 its 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.
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.
REPURCHASE AGREEMENTS: The Fund may engage in repurchase agreement
transactions with institutions that the Trust's investment advisor has
determined are creditworthy. Each repurchase agreement transaction is recorded
at cost plus accrued interest. The Fund requires that the securities
collateralizing a repurchase agreement transaction be transferred to the Trust's
custodian in a manner that is intended to enable the Fund to obtain those
securities in the event of a counterparty default. The value of the collateral
securities is monitored daily to ensure that the value of the collateral,
including accrued interest, equals or exceeds the repurchase price. Repurchase
agreement transactions involve certain risks in the event of default or
insolvency of the counterparty, including possible delays or restrictions upon a
Fund's ability to dispose of the underlying securities, and a possible decline
in the value of the underlying securities during the period while the Fund seeks
to assert its rights.
3. INVESTMENT ADVISORY, ADMINISTRATION AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor"), an
indirect wholly-owned subsidiary of FleetBoston Financial Corporation, are
parties to an investment advisory agreement under which the Investment Advisor
provides advisory 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 Note 4).
The Trust and PFPC Inc.(formerly known as First Data Investor Services Group,
Inc.), a member of PNC Financial Services Group (formerly known as PNC Bank
Corp.), are parties to an administration agreement under which PFPC Inc. (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
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
net assets, 0.075% of the next $7 billion of combined average daily net assets,
0.065% of the next $3 billion of combined average daily net assets, 0.06% of the
next $3 billion of combined average daily net assets and 0.0575% of combined
average daily net assets in excess of $18 billion. Prior to December 1, 1999,
the services described above were provided by First Data Investor Services
Group, Inc., a wholly-owned subsidiary of First Data Corp. On that date, PFPC
Trust Co., a wholly-owned subsidiary of PFPC Worldwide, Inc., and an indirect
wholly-owned subsidiary of PNC Bank Corp., acquired all of the outstanding stock
of First Data Investor Services Group, Inc. As part of that transaction, PFPC
Inc., also an indirect wholly-owned subsidiary of PNC Bank Corp., was merged
into First Data Investor Services Group, Inc., which then changed its name to
PFPC Inc.
In addition, PFPC Inc. also provides certain fund accounting, custody
administration and transfer agency services pursuant to certain fee
arrangements. In accordance with such fee arrangements, PFPC Inc. compensates
the Trust's custodian bank, The Chase Manhattan Bank, for its services.
Provident Distributors, Inc. (the "Distributor")serves as the distributor of
the Trust's shares. Prior to December 1, 1999, First Data Distributors, Inc., a
wholly-owned subsidiary of First Data Investor Services Group, Inc., acted as
the exclusive distributor of the Trust's shares.
Certain officers of the Trust may be officers of the Administrator. Such
officers receive no compensation from the Trust for serving in their respective
roles. No officer, director or employee of the Investment Advisor 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 $45,000 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.
In addition, each Trustee is eligible to participate in The Galaxy Fund/The
Galaxy VIP Fund/Galaxy Fund II 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.
Expenses for the six months ended April 30, 2000 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary of the Trust.
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Advisor and Administrator voluntarily agreed to waive a
portion of their fees and/or to reimburse certain expenses so that total
expenses of the Fund would not exceed certain expense limitations. For the six
months ended April 30, 2000, the Investment Advisor and Administrator waived
fees totaling $115,132 and $46,053, respectively, and the Investment Advisor
reimbursed expenses of $24,411 with respect to the Fund. The Investment Advisor
and Administrator, at their discretion, may revise or discontinue the voluntary
fee waivers and/or expense reimbursements at any time.
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 forty classes of shares
consisting of one or more series of shares.
6. CAPITAL LOSS CARRYFORWARD
As of October 31, 1999, the Fund had capital loss carryforwards of $5,154
expiring in 2004.
8
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[GRAPHIC OMITTED]
GALAXY
FUNDS
4400 COMPUTER DRIVE
P.O. BOX 5108
WESTBOROUGH, MA 01581-5108
SAINSMM (7/1/00)
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