- --------------------------------------------------------------------------------
GALAXY PRIME RESERVES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
COMMERCIAL PAPER (A) - 51.88%
FINANCE - 27.81%
$100,000,000 ABB Treasury Center USA
5.82%, 02/01/00 (B).... $ 100,000,000
50,000,000 American Express Credit
Corp.
5.70%, 03/21/00........ 49,612,084
50,000,000 American Express Credit
Corp.
5.70%, 03/27/00........ 49,564,583
50,000,000 Associates Corp.
of North America
5.60%, 02/02/00........ 49,992,222
49,900,000 Associates Corp.
of North America
5.57%, 02/03/00........ 49,884,559
50,000,000 Associates Corp.
of North America
5.70%, 03/28/00........ 49,556,667
50,000,000 BellSouth Capital
Funding Corp.
5.77%, 02/03/00 (B).... 49,983,972
50,000,000 BellSouth Capital
Funding Corp.
5.70%, 03/24/00 (B).... 49,588,334
49,707,000 BMW U.S. Capital Corp.
5.55%, 02/03/00........ 49,691,674
50,000,000 BMW U.S. Capital Corp.
5.70%, 03/16/00........ 49,651,667
50,000,000 Cargill Global Funding Plc
5.83%, 02/01/00 (B).... 50,000,000
50,000,000 Cargill Global Funding Plc
5.61%, 03/23/00 (B).... 49,595,544
50,000,000 CDC Commercial
Paper Corp.
5.76%, 03/06/00 (B).... 49,728,000
50,000,000 Ford Motor Credit Corp.
5.71%, 03/22/00........ 49,603,472
50,000,000 Ford Motor Credit Corp.
5.71%, 03/23/00........ 49,595,542
70,200,000 General Electric Capital
Corp.
5.85%, 02/09/00........ 70,108,740
50,000,000 General Electric Capital
Corp.
5.83%, 02/22/00........ 49,829,958
50,000,000 General Electric Capital
Corp.
6.02%, 03/20/00........ 49,598,667
PAR VALUE VALUE
--------- -----
FINANCE (CONTINUED)
$50,000,000 General Motors
Acceptance Corp.
5.98%, 02/08/00........ $ 49,941,861
50,000,000 General Motors
Acceptance Corp.
5.83%, 02/14/00........ 49,894,736
50,000,000 General Motors
Acceptance Corp.
5.74%, 03/28/00........ 49,553,556
40,000,000 International Lease
Finance Corp.
5.78%, 02/18/00........ 39,890,822
39,826,000 Morgan (J.P.) & Co.
6.10%, 02/11/00........ 39,758,517
49,100,000 National Rural Utilities
Cooperative Finance Corp.
5.90%, 03/24/00........ 48,681,559
---------------
1,243,306,736
---------------
CONSUMER STAPLES - 14.59%
50,000,000 DaimlerChrysler NA
Holdings Corp.
5.87%, 03/07/00........ 49,714,653
70,000,000 Heinz (H.J.) Co.
5.63%, 03/01/00........ 69,682,530
44,200,000 Heinz (H.J.) Co.
5.75%, 03/09/00........ 43,938,791
50,000,000 Koch Industries, Inc.
5.81%, 02/01/00 (B).... 50,000,000
50,000,000 Koch Industries, Inc.
5.57%, 02/09/00 (B).... 49,938,111
50,000,000 Koch Industries, Inc.
5.57%, 02/10/00 (B).... 49,930,374
67,000,000 Proctor & Gamble Co.
5.76%, 03/17/00........ 66,517,600
45,000,000 Proctor & Gamble Co.
5.70%, 03/20/00........ 44,658,000
18,100,000 Proctor & Gamble Co.
5.70%, 03/21/00........ 17,959,574
43,000,000 Sara Lee Corp.
5.57%, 02/11/00........ 42,933,470
75,000,000 United Parcel Service
of America, Inc.
5.54%, 02/01/00........ 75,000,000
SEE NOTES TO FINANCIAL STATEMENTS.
1
<PAGE>
- --------------------------------------------------------------------------------
GALAXY PRIME RESERVES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
CONSUMER STAPLES (CONTINUED)
$50,000,000 United Parcel Service
of America, Inc.
5.55%, 02/03/00........ $ 49,984,583
25,000,000 Wal-Mart Stores, Inc.
5.75%, 02/24/00 (B).... 24,908,160
17,000,000 Wal-Mart Stores, Inc.
5.77%, 03/13/00 (B).... 16,888,286
---------------
652,054,132
---------------
UTILITIES - 3.89%
25,000,000 AT&T Corp.
5.68%, 03/10/00........ 24,850,111
25,000,000 AT&T Corp.
5.70%, 03/13/00........ 24,837,708
25,000,000 AT&T Corp.
5.70%, 03/16/00........ 24,825,833
50,000,000 Emerson Electric Co.
5.70%, 03/20/00 (B).... 49,620,000
50,000,000 SBC Communications, Inc..
5.50%, 02/03/00 (B).... 49,984,722
---------------
174,118,374
---------------
CHEMICAL AND DRUGS (B) - 3.53%
25,000,000 Bayer Corp.
5.70%, 03/08/00........ 24,857,500
15,750,000 Bayer Corp.
5.71%, 03/20/00........ 15,630,090
22,735,000 Bayer Corp.
5.68%, 03/21/00........ 22,559,233
50,000,000 Pfizer, Inc.
5.75%, 02/15/00........ 49,888,194
45,000,000 Pfizer, Inc.
5.64%, 02/22/00........ 44,851,950
---------------
157,786,967
---------------
TECHNOLOGY - 2.06%
54,700,000 Motorola, Inc.
5.61%, 02/24/00........ 54,503,946
38,000,000 Motorola, Inc.
6.00%, 03/14/00........ 37,734,000
---------------
92,237,946
---------------
TOTAL COMMERCIAL PAPER 2,319,504,155
---------------
(Cost $2,319,504,155)
PAR VALUE VALUE
--------- -----
CORPORATE NOTES AND BONDS - 28.82%
BANKING - 19.65%
$50,000,000 AllFirst Bank
6.03%, 10/26/00 (C).... $ 49,977,002
12,500,000 AllFirst Bank
6.34%, 12/04/00........ 12,522,444
35,000,000 American Express
Centurion, BN
5.74%, 02/14/00 (C).... 35,000,000
50,000,000 Bank of New York
6.52%, 01/22/01........ 49,974,517
50,000,000 Bank One Corp., BN
6.16%, 10/16/00........ 49,986,520
23,000,000 Comerica Bank, BN
5.75%, 02/08/00 (C).... 22,999,640
12,500,000 Comerica Bank, BN
5.86%, 09/25/00 (C).... 12,498,867
50,000,000 Comerica Bank, BN
5.79%, 11/24/00 (C).... 49,984,050
100,000,000 Fifth Third Bank
Senior Bank Note
5.75%, 02/28/00........ 100,000,000
50,000,000 First National Bank
of Chicago, BN
5.68%, 07/10/00........ 49,991,601
50,000,000 First National Bank
of Maryland
5.73%, 03/10/00 (C).... 49,997,952
88,500,000 First Union National
Bank, BN
5.79%, 11/24/00 (C).... 88,485,809
50,000,000 Huntington National
Bank, BN
6.03%, 12/13/00 (C).... 49,961,148
40,500,000 Key Bank N.A., BN
5.93%, 02/29/00 (C).... 40,499,587
37,500,000 Key Bank N.A., BN
5.75%, 06/26/00 (C).... 37,491,155
45,000,000 Key Bank N.A., BN
6.50%, 01/29/01........ 44,974,481
50,000,000 Mellon Bank N.A., BN
5.71%, 03/10/00 (C).... 49,997,965
15,000,000 National Bank of Canada
NY, Notes
6.32%, 03/10/00 (C).... 15,003,192
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
- --------------------------------------------------------------------------------
GALAXY PRIME RESERVES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
BANKING (CONTINUED)
$44,000,000 M & I Bank Northeast, BN
6.36%, 10/26/00........ $ 44,000,000
25,000,000 Old Kent Bank & Trust Co.
5.73%, 03/10/00 (C).... 24,998,976
---------------
878,344,906
---------------
FINANCE - 6.15%
100,000,000 Diageo Capital Plc
6.05%, 08/24/00 (C).... 99,969,754
20,000,000 IBM Credit Corp., MTN
5.90%, 08/07/00........ 19,995,800
55,000,000 National Rural Utilities
Cooperative Finance
Corp., MTN
6.14%, 06/26/00 (C).... 54,998,250
25,000,000 Texaco Capital, Inc., MTN
5.11%, 05/03/00........ 24,995,727
75,000,000 Texaco Capital, Inc., MTN
6.01%, 05/03/00 (C).... 74,982,279
---------------
274,941,810
---------------
UTILITIES - 1.68%
75,000,000 AT&T Corp.
5.99%, 07/13/00 (D).... 74,986,603
---------------
CONSUMER STAPLES - 1.34%
60,000,000 Anheuser-Busch Cos.
5.71%, 07/06/00 (C).... 59,972,000
---------------
TOTAL CORPORATE NOTES
AND BONDS ............. 1,288,245,319
---------------
(Cost $1,288,245,319)
CERTIFICATES OF DEPOSIT - 15.16%
100,000,000 Bayerische Landesbank
New York
5.71%, 12/15/00 (C).... 99,934,836
50,000,000 Bayerische Landesbank
New York
6.00%, 12/15/00 (C).... 49,956,557
50,000,000 Canadian Imperial
Bank, Yankee
5.81%, 03/06/00........ 50,000,000
PAR VALUE VALUE
--------- -----
CERTIFICATES OF DEPOSIT (CONTINUED)
$50,000,000 Canadian Imperial
Bank, Yankee
5.25%, 05/10/00........ $ 49,993,997
50,000,000 Key Bank N.A.
5.71%, 07/12/00........ 49,990,434
25,000,000 M & I Bank Northeast
6.17%, 10/12/00........ 25,000,000
50,000,000 Morgan Guaranty Trust Co.
5.75%, 07/10/00........ 50,000,000
75,000,000 Royal Bank of Canada, Yankee
5.27%, 03/02/00........ 74,996,739
50,000,000 Royal Bank of Canada, Yankee
6.52%, 01/18/01........ 49,977,086
47,000,000 SunTrust Bank
5.80%, 03/27/00........ 47,000,000
31,000,000 UBS AG, Yankee
5.29%, 03/01/00........ 30,999,171
100,000,000 UBS AG, Yankee
5.28%, 03/03/00........ 99,996,732
---------------
TOTAL CERTIFICATES
OF DEPOSIT ............ 677,845,552
---------------
(Cost $677,845,552)
U.S. AGENCY OBLIGATIONS - 3.52%
FEDERAL NATIONAL
MORTGAGE ASSOCIATION (A) - 1.73%
52,765,000 5.52%, 02/02/00........ 52,756,909
25,000,000 5.65%, 03/09/00........ 24,854,827
---------------
77,611,736
---------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION (A) - 0.92%
40,990,000 5.52%, 02/02/00........ 40,983,715
---------------
FEDERAL HOME LOAN BANK - 0.87%
25,000,000 5.65%, 03/15/00 (A).... 24,831,285
14,000,000 5.92%, 10/13/00........ 13,991,026
---------------
38,822,311
---------------
TOTAL U.S. AGENCY
OBLIGATIONS ........... 157,417,762
---------------
(Cost $157,417,762)
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
- --------------------------------------------------------------------------------
GALAXY PRIME RESERVES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
REPURCHASE AGREEMENT - 1.14%
$50,837,000 Morgan Stanley
Repurchase Agreement
5.70%, 02/01/00, Dated
01/31/00, Repurchase Price
$50,845,049 (Collateralized
by U.S. Treasury Notes,
6.63% - 9.88%, due
06/30/01 through 11/15/15,
Total Par $39,473,000,
Market Value $52,283,939) $ 50,837,000
--------------
TOTAL REPURCHASE AGREEMENT 50,837,000
--------------
(Cost $50,837,000)
SHARES
------
INVESTMENT COMPANIES - 0.22%
1,988,806 Dreyfus Cash
Management Fund........ 1,988,806
8,062,636 Federal Investors Prime
Obligation Money
Market Fund............ 8,062,636
--------------
TOTAL INVESTMENT
COMPANIES ............. 10,051,442
--------------
(Cost $10,051,442)
VALUE
TOTAL INVESTMENTS - 100.74%............ $4,503,901,230
--------------
(Cost $4,503,901,230)*
NET OTHER ASSETS AND LIABILITIES - (0.74)% (33,197,602)
---------------
NET ASSETS - 100.00%................... $4,470,703,628
==============
- ---------------------------------
* Aggregate cost for federal tax purposes.
(A) Discount yield at time of purchase.
(B) Securities exempt from registration under Section 4(2) of the Securities
Act of 1933, as amended. These securities may only be resold, in
transactions exempt from registration, to qualified buyers. At January
31, 2000, these securities amounted to $797,952,470 or 17.85% of net
assets.
(C) Variable rate securities. The rates shown reflect rates in effect at
January 31, 2000.
(D) Security exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. This security may only be resold, in transactions
exempt from registration, to qualified buyers. At January 31, 2000, this
security amounted to $74,986,603 or 1.68% of net assets.
BN Bank Note
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
- --------------------------------------------------------------------------------
GALAXY TAX-EXEMPT RESERVES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
MUNICIPAL SECURITIES - 97.65%
ALABAMA - 2.20%
$3,600,000 Chatom IDB, PCR
Alabama Electric
Cooperative
3.85%, 02/09/00........ $ 3,600,000
-------------
ALASKA - 3.12%
5,100,000 Valdez Marine Terminal
Revenue Exxon Pipeline
Co. Project
Series C
3.20%, 12/01/33 (A).... 5,100,000
-------------
ARIZONA - 2.93%
2,000,000 Maricopa County, PCR
Arizona Public Service Co.
Series A
3.20%, 05/01/29 (A)
LOC: Morgan Guaranty Trust 2,000,000
2,800,000 Maricopa County, PCR
Arizona Public Service Co.
Series F
2.95%, 05/01/29 (A)
LOC: Bank of America... 2,800,000
-------------
4,800,000
-------------
CALIFORNIA - 3.24%
1,000,000 Los Angeles Regional
Airports Improvement Corp.
American Airlines
Series E
3.15%, 12/01/24 (A)
LOC: Wachovia Bank, N.A. 1,000,000
1,400,000 Los Angeles Regional
Airports Improvement Corp.
American Airlines
Series F
3.15%, 12/01/24 (A)
LOC: Wachovia Bank, N.A. 1,400,000
PAR VALUE VALUE
--------- -----
CALIFORNIA (CONTINUED)
$1,200,000 Los Angeles Regional
Airports Improvement Corp.
American Airlines
Series G
3.15%, 12/01/24 (A)
LOC: Wachovia Bank, N.A. $ 1,200,000
1,700,000 Los Angeles Regional
Airports
Improvement Corp., LAX 2
3.15%, 12/01/25 (A)
LOC: Societe Generale.. 1,700,000
-------------
5,300,000
-------------
COLORADO - 1.69%
2,760,000 Colorado State Health
Facilities Authority Revenue
Boulder Community Hospital
Project, Series B
3.00%, 10/01/14 (A)
Insured: MBIA
SPA: Rabobank
Nederland N.V.......... 2,760,000
-------------
FLORIDA - 1.83%
2,900,000 University Athletic
Association, Inc., Capital
Improvement Revenue
University of Florida
Stadium Project
3.00%, 02/01/20 (A)
LOC: SunTrust Bank of
Central Florida........ 3,000,000
-------------
GEORGIA - 4.22%
3,900,000 Municipal Electric Authority
3.00%, 01/01/20 (A)
LOC: ABN AMRO Bank N.V. 3,900,000
3,000,000 Richmond County Board of
Education, GO
4.50%, 03/01/00........ 3,003,175
-------------
6,903,175
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
- --------------------------------------------------------------------------------
GALAXY TAX-EXEMPT RESERVES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
IDAHO - 1.83%
$3,000,000 Idaho State HFA
Pooled Financing Program
3.00%, 10/01/10 (A)
LOC: U.S Bank of Idaho. $ 3,000,000
-------------
ILLINOIS - 2.45%
4,000,000 Illinois Educational
Facilities Authority
Pooled Financing Program
Series 95
3.80%, 02/10/00
LOC: Northern Trust Co. 4,000,000
-------------
INDIANA - 1.22%
2,000,000 Indiana State Development
Finance Authority
Environmental Revenue
USX Corp. Project
3.45%, 12/01/22 (A)
LOC: Bank of Nova Scotia 2,000,000
-------------
IOWA - 0.61%
1,000,000 Iowa Finance Authority
Revenue Wheaton Franciscan
Services, Series A
2.98%, 08/15/12 (A)
Insured: MBIA
SPA: Toronto
Dominion Bank.......... 1,000,000
-------------
KENTUCKY - 3.07%
5,000,000 Kentucky State
Asset/Liability
Commission TRAN, Series A
4.25%, 06/28/00........ 5,017,103
-------------
LOUISIANA - 9.11%
4,200,000 Ascension Parish, PCR
Shell Oil Co.
2.85%, 05/01/26 (A).... 4,200,000
PAR VALUE VALUE
--------- -----
LOUISIANA (CONTINUED)
$4,600,000 Louisiana State Offshore
Terminal Authority
Deepwater Port Revenue
Loop, Inc.
1st Stage
3.20%, 09/01/08 (A)
LOC: SunTrust Bank..... $ 4,600,000
2,100,000 St. Charles Parish, PCR
Shell Oil Co. Project
3.00%, 10/01/25 (A).... 2,100,000
4,000,000 St. James Parish, PCR
Texaco Project
3.65%, 04/25/00........ 4,000,000
-------------
14,900,000
-------------
MARYLAND - 0.92%
1,500,000 Maryland State Health &
Higher Educational Facilities
Authority Pooled Loan Project
Series A
2.90%, 04/01/35 (A)
LOC: First National Bank
of Chicago............. 1,500,000
-------------
MASSACHUSETTS - 1.47%
1,000,000 Massachusetts State HEFA
Wellesley College, Series G
2.80%, 07/01/39 (A).... 1,000,000
1,400,000 Massachusetts State Water
Resource Authority
Subordinated General
Purpose, Series A
2.75%, 04/01/28 (A)
Insured: AMBAC
SPA: Bank
of Nova Scotia......... 1,400,000
-------------
2,400,000
-------------
MICHIGAN - 0.61%
1,000,000 Michigan State Building
Authority, Series 2
3.65%, 04/27/00
LOC: Canadian Imperial
Bank of Commerce....... 1,000,000
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
- --------------------------------------------------------------------------------
GALAXY TAX-EXEMPT RESERVES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
MINNESOTA - 2.08%
$3,400,000 New ULM, Hospital Facility
Revenue Health Central
System
3.00%, 08/01/14 (A)
LOC: Norwest Bank
Minnesota NA........... $ 3,400,000
-------------
MISSISSIPPI - 7.05%
3,925,000 Claiborne County, PCR
National Rural
Utilities Cooperative
3.80%, 02/09/00........ 3,925,000
4,100,000 Jackson County
Water System,
Chevron Corp. Project
3.90%, 11/01/24 (A).... 4,100,000
3,500,000 Mississippi State Highway
Revenue, Four Lane
Highway Program, Series 39
4.50%, 06/01/00........ 3,512,366
-------------
11,537,366
-------------
NEVADA - 0.61%
1,000,000 Reno Hospital Revenue
St. Mary's Regional Medical
Center, Series B
3.15%, 05/15/23 (A)
Insured: MBIA
SPA: ABN AMRO Bank..... 1,000,000
-------------
NEW HAMPSHIRE - 2.23%
3,650,000 New Hampshire Health &
Higher Education Facilities
Authority VHA of New England
Capital Asset Financing
Program, Series D
3.05%, 12/01/25 (A)
Insured: AMBAC
SPA: Mellon Bank, N.A.. 3,650,000
-------------
PAR VALUE VALUE
--------- -----
NEW MEXICO - 6.01%
$1,200,000 Farmington, PCR
Arizona Public Service Co.
Series A
3.10%, 05/01/24 (A)
LOC: Bank of America
NT & SA................ $ 1,200,000
4,620,000 Farmington, PCR
Arizona Public Service Co.
Series B
3.10%, 09/01/24 (A)
LOC: Barclays Bank Plc. 4,620,000
4,000,000 New Mexico State, TRAN
4.00%, 06/30/00........ 4,012,214
-------------
9,832,214
-------------
NEW YORK - 0.76%
1,250,000 New York State Energy
Research and Development
Authority, PCR
New York State Electric & Gas
Series B
3.20%, 10/15/15 (A)
LOC: UBS AG............ 1,250,000
-------------
NORTH CAROLINA - 0.80%
1,300,000 Wake County Industrial
Facilities & Pollution Control
Financing Authority
Carolina Power & Light Co.
Project, Series A
3.05%, 06/15/14 (A)
LOC: First National Bank
of Chicago............. 1,300,000
-------------
OHIO - 1.39%
2,280,000 Cuyahoga County Hospital
Improvement Revenue
University Hospital of
Cleveland Project
3.05%, 01/01/16 (A)
LOC: Chase Manhattan Bank 2,280,000
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
- --------------------------------------------------------------------------------
GALAXY TAX-EXEMPT RESERVES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
PENNSYLVANIA - 7.34%
$ 100,000 Delaware County, IDA
United Parcel Service
Project
3.05%, 12/01/15 (A).... $ 100,000
3,500,000 Delaware County, PCR
Philadelphia Electric Co.
Project
3.70%, 03/09/00
Insured: FGIC.......... 3,500,000
4,000,000 Delaware Valley Finance
Authority Local
Government Revenue
3.00%, 08/01/16 (A)
LOC: Credit Suisse
First Boston........... 4,000,000
2,000,000 Delaware Valley Finance
Authority Local Government
Revenue, Series D
3.00%, 12/01/20 (A)
LOC: Credit Suisse
First Boston........... 2,000,000
2,400,000 Lehigh County General
Purpose Authority Revenue
Lehigh Valley Hospital
Series B
3.10%, 07/01/29 (A)
Insured: MBIA
SPA: First Union
National Bank.......... 2,400,000
-------------
12,000,000
-------------
RHODE ISLAND - 1.57%
2,545,000 Rhode Island State, GO
Consolidated Capital
Development Loan, Series A
5.00%, 09/01/00........ 2,563,675
-------------
SOUTH CAROLINA - 1.83%
3,000,000 South Carolina State Jobs
Economic Development
Authority
St. Francis Hospital
3.70%, 07/01/22 (A)
LOC: Chase Manhattan
Bank, N.A.............. 3,000,000
-------------
PAR VALUE VALUE
--------- -----
TENNESSEE - 1.53%
$2,500,000 Tennessee State, BAN
Series C
2.95%, 07/02/01 (A).... $ 2,500,000
-------------
TEXAS - 17.54%
1,100,000 Dallas, GO
5.90%, 02/15/00........ 1,101,194
1,700,000 Gulf Coast Waste Disposal
Authority, PCR
Amoco Oil Co. Project
3.20%, 10/01/17 (A).... 1,700,000
5,300,000 Gulf Coast Waste Disposal
Authority, PCR
Exxon Project
2.90%, 10/01/24 (A).... 5,300,000
1,200,000 Harris County, IDC
Baytank Houston, Inc. Project
2.95%, 02/01/20 (A)
LOC: Rabobank
Nederland, N.V......... 1,200,000
700,000 Harris County Health
Facilities St. Luke's
Episcopal Hospital
Series B
3.15%, 02/15/27 (A)
SPA: Morgan Guaranty Trust 700,000
5,000,000 Hockley County IDC, PCR
Amoco Project
3.85%, 11/01/19 (A).... 5,002,309
2,500,000 Houston Higher Education
Rice University
3.75%, 05/10/00........ 2,500,000
770,000 Lone Star Airport
Improvement Authority
American Airlines
Series A-4
3.15%, 12/01/14 (A)
LOC: Royal Bank of Canada 770,000
1,000,000 Lone Star Airport
Improvement Authority
American Airlines
Series B-2
3.15%, 12/01/14 (A)
LOC: Royal Bank of Canada 1,000,000
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
- --------------------------------------------------------------------------------
GALAXY TAX-EXEMPT RESERVES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
TEXAS (CONTINUED)
$ 900,000 Lone Star Airport
Improvement Authority
American Airlines,
Series B-3
3.15%, 12/01/14 (A)
LOC: Royal Bank of Canada $ 900,000
3,000,000 Lower Neches Valley
Authority
Chevron, Inc. Project
3.45%, 02/15/17 (A).... 3,000,000
1,000,000 North Central HFDC
Hospital Revenue
Presbyterian Medical Center
Series C
3.15%, 12/01/15 (A)
Insured: MBIA
SPA: NationsBank, N.A.. 1,000,000
4,500,000 Texas State, TRAN, Series A
4.50%, 08/31/00........ 4,520,152
-------------
28,693,655
-------------
UTAH - 3.06%
5,000,000 Utah State, GO
Series C
2.95%, 07/01/16 (A)
SPA: Toronto
Dominion Bank.......... 5,000,000
-------------
VIRGINIA - 1.34%
2,200,000 Peninsula Port Authority
Dominion Terminal
Project, Series C
3.15%, 07/01/16 (A)
LOC: Barclays Bank Plc. 2,200,000
-------------
WASHINGTON - 1.99%
3,250,000 Seattle Municipal
Light & Power
3.75%, 02/09/00
SPA: Morgan Guaranty
Trust.................. 3,250,000
-------------
TOTAL MUNICIPAL SECURITIES 159,737,188
-------------
(Cost $159,737,188)
PAR VALUE VALUE
--------- -----
REPURCHASE AGREEMENT - 2.31%
$3,770,000 Morgan Stanley
Repurchase Agreement
5.70%, 02/01/00, Dated
1/31/00, Repurchase Price
$3,770,597 (Collateralized
by U.S. Treasury Bond 5.25%,
Due 11/15/28
Total Par $4,564,000
Market Value $3,825,362) $ 3,770,000
-------------
TOTAL REPURCHASE AGREEMENT 3,770,000
-------------
(Cost $3,770,000)
SHARES
------
INVESTMENT COMPANIES - 0.86%
1,269,263 Dreyfus Tax Exempt Cash
Management............. 1,269,263
140,690 Federated Investors Tax-Free
Obligations Fund....... 140,690
-------------
TOTAL INVESTMENT COMPANIES 1,409,953
-------------
(Cost $1,409,953)
TOTAL INVESTMENTS - 100.82%............ 164,917,141
-------------
(Cost $164,917,141)*
NET OTHER ASSETS AND LIABILITIES - (0.82)% (1,338,236)
-------------
NET ASSETS - 100.00%................... $ 163,578,905
=============
- ---------------------------------
* Aggregate cost for federal tax purposes.
(A) Variable rate demand notes are payable upon not more than one, seven or
thirty business days notice. Put bonds and notes have demand features
which mature within one year. The interest rate shown reflects the rate
in effect at January 31, 2000.
AMBAC American Municipal Bond Assurance Corp.
BAN Bond Anticipation Notes
GO General Obligation
HEFA Health and Educational Facilities Authority
HFA Health Facilities Authority
HFDC Health Facilities Development Corp.
IDA Industrial Development Authority
IDB Industrial Development Board
IDC Industrial Development Corp.
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SPA Stand-by Purchase Agreement
TRAN Tax and Revenue Anticipation Notes
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
- --------------------------------------------------------------------------------
GALAXY GOVERNMENT RESERVES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 2000 (UNAUDITED)
PAR VALUE VALUE
--------- -----
U.S. AGENCY OBLIGATIONS - 72.82%
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 25.29%
$10,000,000 5.60%, 02/01/00 (A).... $ 10,000,000
5,000,000 5.47%, 02/04/00 (A).... 4,997,721
10,000,000 5.67%, 03/09/00 (A).... 9,941,725
5,000,000 5.69%, 04/20/00 (A).... 4,937,568
6,000,000 6.54%, 05/19/00........ 6,018,019
10,000,000 5.89%, 12/20/00, MTN (B) 9,988,969
--------------
45,884,002
--------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 23.60%
4,000,000 4.86%, 02/10/00, MTN... 3,999,286
4,000,000 5.18%, 03/10/00, MTN... 3,996,925
7,000,000 5.72%, 03/30/00 (A).... 6,935,491
10,000,000 5.70%, 04/06/00 (A).... 9,897,083
3,000,000 5.64%, 07/26/00, MTN (B) 2,999,098
5,000,000 5.98%, 08/04/00, MTN (B) 4,998,484
10,000,000 5.59%, 12/08/00, MTN (B) 9,991,673
--------------
42,818,040
--------------
FEDERAL HOME LOAN BANK - 21.18%
8,000,000 5.16%, 03/08/00........ 7,999,319
5,000,000 5.83%, 03/22/00 (A).... 4,959,514
5,000,000 5.05%, 04/26/00........ 4,987,285
1,500,000 5.20%, 05/26/00........ 1,499,826
5,000,000 5.48%, 07/13/00........ 4,997,350
5,000,000 5.64%, 07/28/00 (B).... 4,998,541
5,000,000 5.84%, 10/04/00 (B).... 4,997,689
4,000,000 5.92%, 10/13/00........ 3,997,436
--------------
38,436,960
--------------
FEDERAL FARM CREDIT BANK (B) - 2.75%
5,000,000 5.67%, 09/01/00........ 4,999,127
--------------
TOTAL U.S. AGENCY
OBLIGATIONS ........... 132,138,129
--------------
(Cost $132,138,129)
PAR VALUE VALUE
--------- -----
REPURCHASE AGREEMENT - 22.83%
$41,436,000 Morgan Stanley
Repurchase Agreement
5.70%, 02/01/00, Dated
01/31/00, Repurchase Price
$41,442,561 (Collateralized
by U.S. Treasury Note,
5.88%, due 11/15/05;
Total Par $43,705,000
Market Value $42,520,502) $ 41,436,000
--------------
TOTAL REPURCHASE
AGREEMENT ............. 41,436,000
--------------
(Cost $41,436,000)
SHARES
------
INVESTMENT COMPANIES - 3.21%
2,838,081 Dreyfus Cash
Management Fund........ 2,838,081
2,978,717 Federated Investors
Government Obligation
Money Market Fund...... 2,978,717
--------------
TOTAL INVESTMENT
COMPANIES ............. 5,816,798
--------------
(Cost $5,816,798)
TOTAL INVESTMENTS - 98.86%............. 179,390,927
--------------
(Cost $179,390,927)*
NET OTHER ASSETS AND LIABILITIES - 1.14% 2,074,999
--------------
NET ASSETS - 100.00%................... $ 181,465,926
==============
- ----------------------------------
* 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 January 31, 2000.
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
10
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This page intentionally left blank.
<PAGE>
- --------------------------------------------------------------------------------
GALAXY MONEY MARKET PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRIME TAX-EXEMPT GOVERNMENT
RESERVES RESERVES RESERVES
-------- ----------- ----------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at amortized cost .............. $ 4,453,064,230 $ 161,147,141 $ 137,954,927
Repurchase agreements ...................... 50,837,000 3,770,000 41,436,000
---------------- --------------- ---------------
Total investments at value ............... 4,503,901,230 164,917,141 179,390,927
Cash ......................................... 228,537 1,047 118
Receivable for shares sold ................... 107,461,725 2,858,202 3,645,659
Interest and dividend receivables ............ 26,807,158 1,115,968 885,616
---------------- --------------- ---------------
Total Assets ............................... 4,638,398,650 168,892,358 183,922,320
---------------- --------------- ---------------
LIABILITIES:
Payable for shares repurchased ............... 163,430,718 5,150,198 2,284,740
Advisory fee payable (Note 3) ................ 1,352,605 57,444 60,002
Distribution and service fee payable (Note 3) 1,698,226 57,444 60,002
Payable to Administrator (Note 3) ............ 290,592 15,283 13,975
Trustees' fees and expenses payable (Note 3) . 59,329 2,283 2,672
Accrued expenses and other payables .......... 863,552 30,801 35,003
---------------- --------------- ---------------
Total Liabilities .......................... 167,695,022 5,313,453 2,456,394
---------------- --------------- ---------------
NET ASSETS ...................................... $ 4,470,703,628 $ 163,578,905 $ 181,465,926
================ =============== ===============
NET ASSETS CONSIST OF:
Par value (Note 4) ........................... $ 4,470,704 $ 163,579 $ 181,466
Paid-in capital in excess of par value ....... 4,466,232,924 163,415,326 181,284,460
---------------- --------------- ---------------
TOTAL NET ASSETS ................................ $ 4,470,703,628 $ 163,578,905 $ 181,465,926
================ =============== ===============
SHARES OF BENEFICIAL INTEREST OUTSTANDING ....... 4,470,703,628 163,578,905 181,465,926
NET ASSET VALUE:
offering and redemption price per share
(Net Assets / Shares Outstanding) ............ $ 1.00 $ 1.00 $ 1.00
================ =============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
- --------------------------------------------------------------------------------
GALAXY MONEY MARKET PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRIME TAX-EXEMPT GOVERNMENT
RESERVES RESERVES RESERVES
-------- ----------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ............................. $ 119,826,248 $ 3,216,558 $ 4,525,873
Dividends (Note 2) ............................ 255,649 74,104 152,959
---------------- --------------- ---------------
Total investment income ..................... 120,081,897 3,290,662 4,678,832
---------------- --------------- ---------------
EXPENSES:
Investment advisory fee (Note 3) .............. 7,787,991 386,027 345,772
Administration fee (Note 3) ................... 1,608,573 71,504 64,036
Custody fee ................................... 27,768 12,298 9,797
Fund accounting fee (Note 3) .................. 55,687 24,117 16,604
Professional fees ............................. 87,477 11,564 14,351
Trustees' fee (Note 3) ........................ 48,706 1,611 1,378
Transfer agent fee (Note 3) ................... 2,587 2,520 2,520
Distribution and service fee (Note 3) ......... 9,770,189 386,027 345,772
Reports to shareholders ....................... 770,483 15,540 13,684
Registration fees ............................. 41,281 22,390 14,589
Miscellaneous ................................. 40,282 1,886 4,854
---------------- --------------- ---------------
Total expenses .............................. 20,241,024 935,484 833,357
---------------- --------------- ---------------
NET INVESTMENT INCOME ............................ 99,840,873 2,355,178 3,845,475
---------------- --------------- ---------------
NET REALIZED GAIN ON INVESTMENTS ................. -- 1,486 --
---------------- --------------- ---------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ........................ $ 99,840,873 $ 2,356,664 $ 3,845,475
================ =============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
- --------------------------------------------------------------------------------
GALAXY MONEY MARKET PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIME RESERVES
-----------------------------------
SIX MONTHS ENDED PERIOD
JANUARY 31, 2000 ENDED
(UNAUDITED) JULY 31, 1999(1)
---------------- ----------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ................... $ 4,250,399,059 $ 10(2
---------------- ----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ............................ 99,840,873 134,875,896
Net realized gain (loss) on investments sold ..... -- --
---------------- ----------------
Net increase in net assets
resulting from operations .................... 99,840,873 134,875,896
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ............................ (99,840,873) (134,875,896)
---------------- ----------------
Total Dividends ................................ (99,840,873) (134,875,896)
---------------- ----------------
SHARE TRANSACTIONS:
Net proceeds from sale of shares ................. 11,870,429,983 21,244,865,186
Issued to shareholders in
reinvestment of dividends ...................... 107,750,495 127,220,074
Cost of shares repurchased ....................... (11,757,875,909) (17,121,686,211)
---------------- ----------------
Net increase (decrease) from share transactions 220,304,569 4,250,399,049
---------------- ----------------
Net increase (decrease) in net assets .......... 220,304,569 4,250,399,049
---------------- ----------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ...... $ 4,470,703,628 $ 4,250,399,059
================ ================
(A) Undistributed net investment income ............. $ -- $ --
================ ================
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ............................................. 11,870,429,983 21,244,865,186
Issued to shareholders in
reinvestment of dividends ...................... 107,750,495 127,220,074
Repurchased ...................................... (11,757,875,909) (17,121,686,211)
---------------- ----------------
Net increase (decrease) in shares outstanding .. 220,304,569 4,250,399,049
================ ================
</TABLE>
- ----------------------------------
(1) The Funds commenced operations on September 22, 1998.
(2) Amounts represent initial investment.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-EXEMPT RESERVES GOVERNMENT RESERVES
---------------------------------- --------------------------------
SIX MONTHS ENDED PERIOD SIX MONTHS ENDED PERIOD
JANUARY 31, 2000 ENDED JANUARY 31, 2000 ENDED
(UNAUDITED) JULY 31, 1999(1) (UNAUDITED) JULY 31, 1999(1)
---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ................... $ 177,839,867 $ 10(2) $ 156,852,991 $ 10(2)
---------------- ---------------- ---------------- --------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ............................ 2,355,178 2,635,072 3,845,475 5,466,065
Net realized gain (loss) on investments sold ..... 1,486 (1,486) -- --
---------------- ---------------- ---------------- --------------
Net increase in net assets
resulting from operations .................... 2,356,664 2,633,586 3,845,475 5,466,065
---------------- ---------------- ---------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ............................ (2,355,218) (2,635,032) (3,845,484) (5,466,056)
---------------- ---------------- ---------------- --------------
Total Dividends ................................ (2,355,218) (2,635,032) (3,845,484) (5,466,056)
---------------- ---------------- ---------------- --------------
SHARE TRANSACTIONS:
Net proceeds from sale of shares ................. 457,266,807 629,913,123 305,469,526 594,673,838
Issued to shareholders in
reinvestment of dividends ...................... 2,519,902 2,472,799 4,132,277 5,186,232
Cost of shares repurchased ....................... (474,049,117) (454,544,619) (284,988,859) (443,007,098)
---------------- ---------------- ---------------- --------------
Net increase (decrease) from share transactions (14,262,408) 177,841,303 24,612,944 156,852,972
---------------- ---------------- ---------------- --------------
Net increase (decrease) in net assets .......... (14,260,962) 177,839,857 24,612,935 156,852,981
---------------- ---------------- ---------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ...... $ 163,578,905 $ 177,839,867 $ 181,465,926 $ 156,852,991
================ ================ ================ ==============
(A) Undistributed net investment income ............. $ -- $ 40 $ -- $ 9
================ ================ ================ ==============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ............................................. 457,266,807 629,913,123 305,469,526 594,673,838
Issued to shareholders in
reinvestment of dividends ...................... 2,519,902 2,472,799 4,132,277 5,186,232
Repurchased ...................................... (474,049,117) (454,544,619) (284,988,859) (443,007,098)
---------------- ---------------- ---------------- --------------
Net increase (decrease) in shares outstanding .. (14,262,408) 177,841,303 24,612,944 156,852,972
================ ================ ================ ==============
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
GALAXY PRIME RESERVES
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD.
SIX MONTHS ENDED PERIOD ENDED
JANUARY 31, 2000 JULY 31,
(UNAUDITED) 1999(1)
------------ -----------
Net Asset Value, Beginning of Period ...... $ 1.00 $ 1.00
------------ -----------
Income from Investment Operations:
Net investment income .................. 0.02 0.04
------------ -----------
Less Dividends:
Dividends from net investment income ... (0.02) (0.04)
------------ -----------
Net increase (decrease) in net asset value -- --
------------ -----------
Net Asset Value, End of Period ............ $ 1.00 $ 1.00
============ ===========
Total Return .............................. 2.34%** 3.59%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ......... $ 4,470,704 $ 4,250,399
Ratios to average net assets:
Net investment income .................. 4.61%* 4.10%*
Operating expenses ..................... 0.93%* 0.96%*
- -----------------------------
* Annualized
** Not annualized
(1) The Fund commenced operations on September 22, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
- --------------------------------------------------------------------------------
GALAXY TAX-EXEMPT RESERVES
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD.
SIX MONTHS ENDED PERIOD ENDED
JANUARY 31, 2000 JULY 31,
(UNAUDITED) 1999(1)
------------ -----------
Net Asset Value, Beginning of Period ....... $ 1.00 $ 1.00
------------ -----------
Income from Investment Operations:
Net investment income ................... 0.01 0.02
------------ -----------
Less Dividends:
Dividends from net investment income .... (0.01) (0.02)
------------ -----------
Net increase (decrease) in net asset value . -- --
------------ -----------
Net Asset Value, End of Period ............. $ 1.00 $ 1.00
============ ===========
Total Return ............................... 1.24%** 1.82%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......... $ 163,579 $ 177,840
Ratios to average net assets:
Net investment income ................... 2.45%* 2.09%*
Operating expenses ...................... 0.97%* 0.99%*
- --------------------------------
* Annualized
** Not annualized
(1) The Fund commenced operations on September 22, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
- --------------------------------------------------------------------------------
GALAXY GOVERNMENT RESERVES
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD.
SIX MONTHS ENDED PERIOD ENDED
JANUARY 31, 2000 JULY 31,
(UNAUDITED) 1999(1)
------------ -----------
Net Asset Value, Beginning of Period ....... $ 1.00 $ 1.00
------------ -----------
Income from Investment Operations:
Net investment income ................... 0.02 0.03
------------ -----------
Less Dividends:
Dividends from net investment income .... (0.02) (0.03)
------------ -----------
Net increase (decrease) in net asset value . -- --
------------ -----------
Net Asset Value, End of Period ............. $ 1.00 $ 1.00
============ ===========
Total Return ............................... 2.26%** 3.49%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......... $ 181,466 $ 156,853
Ratios to average net assets:
Net investment income ................... 4.46%* 4.00%*
Operating expenses ...................... 0.97%* 0.99%*
- ------------------------------
* Annualized
** Not annualized
(1) The Fund commenced operations on September 22, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
- --------------------------------------------------------------------------------
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 Prime Reserves, Tax-Exempt
Reserves and Government Reserves (individually, a "Fund", collectively, the
"Funds") 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 Funds in the preparation of their
financial statements.
PORTFOLIO VALUATION: Securities in the Funds 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 and dividend
income is recorded on the accrual basis.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are declared and
paid daily. Net realized capital gains, if any, are distributed at least
annually.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
Federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code.
By so qualifying, each 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 July 31. In addition, by distributing in
each calendar year substantially all of its net investment income, capital
gains, and certain other amounts, if any, each Fund will not be subject to a
Federal excise tax. Therefore, no Federal income or excise tax provision is
recorded.
REPURCHASE AGREEMENTS: Each 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. Each 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,
19
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
and a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its rights.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributable to a 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.
3. INVESTMENT ADVISORY, ADMINISTRATION,
DISTRIBUTION, SHAREHOLDER SERVICES AND
OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor" or
"Fleet"), an indirect wholly-owned subsidiary of FleetBoston Financial Corpor-
ation, are parties to an investment advisory agreement under which the
Investment Advisor provides services for a fee, computed daily and paid monthly,
at the annual rate of 0.40% of the first $750,000,000 of each Fund's average
daily net assets, plus 0.35% of each Fund's average daily net assets in excess
of $750,000,000.
The Trust and PFPC Inc. (formerly known as First Data Investor Services Group,
Inc.), an indirect wholly-owned subsidiary of 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 combined average daily net assets of the Funds 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, 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.
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.
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 the
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.
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., served as
the exclusive distributor of the Trust's shares.
The Trust has adopted a distribution and services plan (the "Plan") with respect
to the Funds. Under the Plan, the Trust may pay (i) the Distributor or another
person for distribution services provided and expenses assumed and (ii)
broker-dealers or other financial institutions ("Service Organizations") for
shareholder administrative support services provided to shareholders of the
Funds. Payments by the Trust for distribution expenses may not exceed an annual
rate of 0.75% of the average daily net assets of a Fund and payments for
shareholder administrative support services may not exceed 0.25% of the average
daily net assets of a Fund's outstanding shares which are owned of record or
beneficially by a Service Organization's customers for whom the Service
Organization is the owner of record or shareholder of record or with whom it has
a
20
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
servicing relationship. The Trust is currently limiting payments under the Plan
to an aggregate fee of not more than 0.45% of the average daily net assets of
the Prime Reserves and not more than 0.40% of the average daily net assets of
the Tax-Exempt Reserves and Government Reserves.
For the period ended January 31, 2000, the Funds paid fees under the Plan as
follows:
SHAREHOLDER
FUND SERVICES DISTRIBUTION
---- ----------- ------------
Prime Reserves ........ $5,427,883 $4,342,306
Tax-Exempt Reserves ... 241,267 144,760
Government Reserves ... 216,108 129,664
Certain officers of the Trust are 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. Effective May 28, 1999, 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. Prior to May 28,
1999, each Trustee was entitled to receive for services as a trustee of the
Trust, VIP and Galaxy II an aggregate fee of $40,000 plus certain other fees for
attending or participating in meetings as well as reimbursements 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.
Each Trustee is eligible to participate in The Galaxy Fund/The Galaxy VIP
Fund/Galaxy Fund II Deferred Compensation Plan (the "Compensation Plan"), an
unfunded, non-qualified deferred compensation plan. The Compensation 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 period ended January 31, 2000 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary of the Trust.
4. 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 Funds, each with a par value of
$0.001. The Trust's shares are classified into thirty-eight classes of shares,
each consisting of one or more series.
Each share represents an equal proportionate interest in the respective Fund,
bears the same fees and expenses and is entitled to such dividends and
distributions of income earned as are declared at the discretion of the Trust's
Board of Trustees.
Shareholders are entitled to one vote for each full share held and a
proportionate fractional vote for each fractional share held, and will vote in
the aggregate and not by class or series, except as otherwise expressly required
by law or when the Board of Trustees determines that the matter to be voted on
affects only the interests of shareholders of a particular class or series.
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GALAXY MONEY MARKET PORTFOLIOS
THE GALAXY FUNDS
SEMI-ANNUAL REPORT
January 31, 2000
Galaxy Prime Reserves
Galaxy Tax-Exempt Reserves
Galaxy Government Reserves
{Logo for Galaxy Funds omitted]
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1/31/00
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