<PAGE>
PRESIDENT'S MESSAGE
June 1996
Dear Shareholder:
We are very pleased to present you with the semi-annual report for the
Republic New York Tax Free Bond Fund for the six months ended April 30, 1996. In
this report, we have provided you with a letter from the Investment Adviser,
Republic National Bank of New York.
We hope you find this letter and accompanying financial summaries
informative and as always we would be delighted to hear from you to answer any
questions you might have or provide you with additional information.
Financial statements and portfolio holdings for the six months ended April
30, 1996 also follow. We look forward to servicing your financial needs and
appreciate your continued support.
Respectfully submitted,
/s/ Philip Coolidge
Philip W. Coolidge
President
<PAGE>
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
June 1996
DEAR SHAREHOLDER:
We are pleased to present the semi-annual report for the Republic New York
Tax Free Bond Fund (the "Fund") for the period ending April 30, 1996. For the
six month period, the Fund produced a total return of 0.64%, outpacing the 0.32%
advance of the Lipper NY Municipal Bond Fund Index. For the latest twelve
months, the Fund returned 7.07% versus 6.46% for the Lipper Index.
The fiscal year began with expectations of further easing by the Federal
Reserve to stimulate what appeared to be a softening US economy. While the Fed
did lower short-term rates by 25 basis points in December 1995, and an
additional 25 basis points in January 1996, subsequently released economic
reports were brighter than expected, reducing the prospects for further Fed
easing. During this period, both the taxable and tax free bond markets
experienced great volatility.
Due to our view that the economy was stronger than prevailing opinion
indicated, and that interest rates were likely to rise, the Fund's duration (a
measure of interest rate sensitivity) was shortened by the end of the period
from 8.07 to 7.09 years. The quality of the portfolio remained high at AA3
according to Moody's Rating Service.
The near term expectation for municipal bonds looks positive. The decrease
in new issue volume along with the recently seen high tax-exempt yields will
help the municipal bond market and should lead to increased investor interest.
We thank you for your continued support.
Sincerely,
Republic National Bank
Standardized Total Returns
Since
As of March 31, 1996 Inception*
- ------------------------------ --------
Republic New York Tax Free Bond Fund 7.48%
Lipper NY Municipal Bond Fund Index 6.94%
*May 1, 1995
Lipper NY Municipal Bond Fund Index: is an equally weighted index composed of
the 30 largest mutual funds in this universe.
As with any fund, the performance data quoted represents past performance and is
no guarantee of future results.
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
APRIL 30, 1996
<TABLE>
<CAPTION>
RATINGS
PRINCIPAL MOODY'S/
AMOUNT DESCRIPTION(c) RATE MATURITY S&P(d) VALUE
--------- -------------- ---- -------- -------- -----
NEW YORK MUNICIPAL OBLIGATIONS -- 86.6%(a)
<C> <S> <C> <C> <C> <C>
$250,000 Battery Park City Authority, New
York, Revenue Refunding, Series A 5.000% 11/01/08 A1/AA $ 233,125
300,000 Dutchess County, New York Industrial
Development Agency, Revenue,
Laerdal Medical Corp., AMT, VRDN . 4.300% 8/1/15 NR/NR 300,000
250,000 Erie County, New York, General
Obligation, FGIC Insured ......... 5.375% 6/15/07 Aaa/AAA 253,855
300,000 Islip, New York, General Obligation,
FGIC Insured ..................... 5.600% 11/1/01 Aaa/AAA 315,106
150,000 Metropolitan Transit Authority of
New York, Revenue, Prerefunded
7/1/96 @ 100 ..................... 8.500% 7/1/05 Aaa/AAA 154,220
135,000 Metropolitan Transit Authority of
New York, Revenue, Prerefunded
7/1/96 @ 100 ..................... 8.375% 7/1/16 Aaa/AAA 138,769
250,000 New York Industrial Development
Agency, Terminal One, AMT ........ 6.000% 1/1/19 A/A 242,305
200,000 New York City Municipal Water and
Sewer Finance Authority, Revenue,
Series A, FGIC Insured, VRDN ..... 4.100% 6/15/25 VMIG1/A1+ 200,000
200,000 New York City, General Obligation,
Prerefunded 8/1/96 @ 102 ......... 8.500% 8/1/12 Aaa/BBB+ 206,432
300,000 New York City, General Obligation,
Series D ......................... 6.000% 2/15/12 Baa1/BBB+ 289,014
400,000 New York State Dormitory Authority,
City University, Revenue, Series A 5.750% 7/1/07 Baa1/BBB 394,144
250,000 New York State Dormitory Authority,
City University, Revenue, FSA
Insured .......................... 5.750% 7/1/07 Aaa/AAA 257,878
225,000 New York State Dormitory Authority,
Revenue, Mental Health Service
Facility ......................... 6.500% 8/15/11 Baa1/BBB+ 232,029
300,000 New York State Energy Research &
Development Authority, ConEd, MBIA
Insured .......................... 6.100% 8/15/20 Aaa/AAA 304,215
300,000 New York State Local Government
Assistance Corporation, Series A .. 6.875% 4/1/19 A/A 327,885
300,000 New York State Medical Care
Facilities, Revenue, Mental
Health, FGIC Insured ............. 5.250% 2/15/08 Aaa/AAA 294,933
400,000 New York State Power Authority,
Revenue & General Purpose,
Series CC ........................ 5.250% 1/1/18 Aa/AA- 365,436
300,000 New York State Thruway Authority,
General Revenue, Series A, FGIC
Insured .......................... 5.700% 1/1/05 Aaa/AAA 311,958
200,000 New York State Thruway Authority,
Highway and Bridge Trust Fund,
Series A, MBIA Insured ........... 6.250% 4/1/06 Aaa/AAA 217,478
300,000 New York State Urban Development
Corporation, Revenue ............. 5.500% 4/1/07 Baa1/BBB 293,964
300,000 New York State Urban Development
Corporation, Revenue, Center for
Industrial Innovation ............ 5.500% 1/1/13 Baa1/BBB 279,963
300,000 New York State Urban Development
Corporation, Revenue, Correctional
Facilities, Series 6 ............. 5.250% 1/1/07 Baa1/BBB 284,470
300,000 Orange County, New York, General
Obligation ....................... 5.300% 11/15/10 Aa/NR 293,421
300,000 Port Authority of New York & New
Jersey, Ninety-Eighth Series, AMT 5.900% 8/1/07 A1/AA- 310,060
250,000 Port Authority of New York & New
Jersey, Series 71 ................ 6.500% 1/15/26 A1/AA- 259,997
250,000 Suffolk County New York Water
Authority, Series C, AMBAC Insured 5.750% 6/1/10 Aaa/AAA 253,615
250,000 Triborough Bridge & Tunnel
Authority, New York, General
Purpose, Revenue, Series Y ....... 5.750% 1/1/05 Aa/A+ 262,592
175,000 Westchester County New York
Industrial Development Agency,
Resource Recovery, Resco Company
Project, Revenue, Series A, AMBAC
Insured .......................... 5.600% 7/1/07 Aaa/AAA 178,204
250,000 Yonkers, New York, General
Obligation, FGIC Insured ......... 6.500% 2/15/12 Aaa/AAA 264,945
----------
TOTAL NEW YORK MUNICIPAL OBLIGATIONS (COST $7,782,482)....................... 7,720,013
----------
OTHER BONDS AND NOTES -- 11.3%(a)
250,000 Puerto Rico Commonwealth, General
Obligation,
MBIA Insured ...................... 7.50% 07/01/04 Aaa/AAA 293,580
300,000 Puerto Rico Public Buildings
Authority, Public Education &
Health Facilities, Series M ...... 5.50% 7/1/21 Baa1/A 274,275
400,000 Puerto Rico Public Buildings
Authority, Revenue Series A, AMBAC
Insured .......................... 6.25% 7/1/08 Aaa/AAA 439,196
----------
TOTAL OTHER BONDS AND NOTES (COST $1,006,911) ............................... 1,007,051
----------
SHORT-TERM INVESTMENTS -- 0.1%(a)
11,643 Provident New York Tax Free Money Market Fund ............................... 11,643
(COST $11,643) ----------
TOTAL INVESTMENTS -- 98.0% (COST $8,801,036)(b) ................................................ 8,738,707
OTHER ASSETS LESS LIABILITIES -- 2.0%........................................................... 177,041
----------
NET ASSETS -- 100.0%............................................................................ $8,915,748
==========
<FN>
(a) Percentages indicated are based on net assets of $8,915,748, which correspond to a net asset value per share
of $10.13.
(b) The aggregate identified cost for federal income tax purposes is $8,801,036 resulting in gross unrealized
appreciation and depreciation of $63,625 and $125,954, respectively, or net unrealized depreciation of
$62,329.
(c) Approximately 46% of the municipal securities held by the Fund have credit enhancement features backing them,
which the Fund relies on, such as letters of credit, insurance or guarantees, without these credit
enhancement features the securities may or may not meet the quality standards of the Fund.
(d) The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available at
April 30, 1996 for the securities listed. Ratings are generally ascribed to securities at the time of
issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do
so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at April
30, 1996. These ratings are unaudited.
Moody's Investors Service, Inc. and Standard & Poor's Corp. are the leading independent rating agencies for
debt securities. Moody's uses the designation "Moody's Investment Grade", or "MIG" for most short-term
municipal obligations, adding a "V" ("VMIG") for bonds with a demand or variable feature; the designation "P"
is used for tax-exempt commercial paper. Standard & Poor's uses "SP" for notes maturing in three years or
less, "A" for bonds with a demand or variable feature.
</TABLE>
See accompanying notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1996
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S LONG-TERM RATINGS
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and generally are referred
to as "gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other
elements present which make the long-term risks appear somewhat larger than in
Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Note: Those bonds in the Aa, A and Baa groups which Moody's believes possess
the strongest investment attributes are designated by the symbol Aa 1, A
1 and Baa 1, respectively.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S TWO HIGHEST RATINGS OF STATE
AND MUNICIPAL NOTES:
Moody's ratings for state and municipal short-term obligations will be
designated Moody's Investment Grade ("MIG"). Such ratings recognize the
differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in
bond risk, such as long-term secular trends, may be less important over the
short run. A short-term rating may also be assigned on an issue having a
demand feature. Such ratings will be designated as "VMIG" or, if the demand
feature is not rated, as "NR". Short-term ratings on issues with demand
features are differentiated by the use of the "VMIG" symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to the
external liquidity with no or limited legal recourse to the issuer in the
event the demand is not met. Symbols used are as follows:
MIG 1/VMIG 1 -- Notes bearing this designation are of the best quality,
with strong protection from established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2 -- Notes bearing this designation are of high quality, with
margins of protection ample although not so large as in the preceding group.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S LONG-TERM DEBT RATINGS:
AAA -- Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A -- Debt rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic condtions than debts in higher rated
categories.
BBB -- Debt rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debts in this category than for debts in higher rated
categories.
Plus (+) or Minus (-): The AA to BBB ratings may be modified by the
addition of a plus or minus sign to show relative standing within the rating
category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S TWO HIGHEST RATINGS OF STATE
AND MUNICIPAL NOTES:
A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes. Notes due in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating.
Note rating symbols are as follows:
SP-1 -- Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming
safety characteristics are given a plus (+) designation.
SP-2 -- Satisfactory capacity to pay principal and interest.
FGIC = Financial Guaranty Insurance Corp.
AMT = Alternative Minimum Tax
AMBAC = American Bond Assurance Corp.
FSA = Financial Securities Assurance
MBIA = Municipal Bond Insurance Association
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1996
ASSETS
Investments at value (cost $8,801,036)(Note 2) ............ $8,738,707
Interest receivable ....................................... 152,455
Receivable from affiliate (Note 3) ........................ 64,319
Deferred organization expense (Note 2) .................... 23,781
----------
Total Assets ........................................ 8,979,262
----------
LIABILITIES
Dividends payable to shareholders ......................... 29,210
Distribution expenses payable (note 3) .................... 1,503
Accrued expenses and other liabilities .................... 32,801
----------
Total Liabilities ................................... 63,514
----------
NET ASSETS FOR 880,112 SHARES OF BENEFICIAL INTEREST
OUTSTANDING (UNLIMITED NUMBER OF SHARES AUTHORIZED)...... $8,915,748
==========
NET ASSETS CONSIST OF:
Paid-in Capital ........................................... $8,899,755
Accumulated net realized gain on investments .............. 78,322
Net unrealized depreciation on investments ................ (62,329)
----------
Total ............................................... $8,915,748
==========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE .. $10.13
======
See accompanying notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1996
INCOME:
Tax exempt interest income (Note 2) ................... $ 209,912
EXPENSES (NOTE 2):
Fund accounting fees ..................... $ 17,500
Transfer agent fees ...................... 15,405
Audit .................................... 13,631
Investment Management fees (Note 3) ...... 9,861
Distribution expenses and shareholder
services fees (Note 3) ................. 9,861
Printing ................................. 9,842
Custodian fees and expenses .............. 8,536
Administration fees (Note 3) ............. 7,889
Trustees' fees and expenses .............. 3,737
Amortization of organization expenses .... 2,968
Insurance ................................ 2,501
Registration fees ........................ 1,100
Legal .................................... 500
Other expenses ........................... 1,429
--------
Total expenses ......................... 104,760
Less: reimbursement of expenses (Note 3) (64,319)
Less: waiver of fees (Note 3) .......... (20,730)
--------
Net expenses ........................................ 19,711
---------
NET INVESTMENT INCOME ................................... 190,201
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain from investment transactions .......... 78,975
Net change in unrealized depreciation of investments .... (248,695)
---------
Net realized and unrealized loss on investments ......... (169,720)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 20,481
=========
See accompanying notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE PERIOD
SIX MONTHS MAY 1, 1995
ENDED (COMMENCEMENT
APRIL 30, 1996 OF OPERATIONS) TO
(UNAUDITED) OCTOBER 31, 1995
---------------- --------------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ............. $ 190,201 $ 177,970
Net realized gain on investment
transactions ................... 78,975 48,739
Net change in unrealized
appreciation/(depreciation) .... (248,695) 186,366
---------- ----------
Net increase in net assets
resulting from operations ...... 20,481 413,075
---------- ----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ............. (190,201) (177,970)
Net realized gains ................ (49,392) --
---------- ----------
(239,593) (177,970)
---------- ----------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST:
Proceeds from sales of shares ..... 2,597,460 8,334,583
Net asset value of shares issued in
reinvestment of dividends ...... 71,495 18,315
Cost of shares repurchased ........ (442,149) (1,679,949)
---------- ----------
Net increase in net assets
resulting from capital share
transactions ................... 2,226,806 6,672,949
---------- ----------
NET INCREASE IN NET ASSETS ........ 2,007,694 6,908,054
NET ASSETS:
Beginning of period ............... 6,908,054 0
---------- ----------
End of period ..................... $8,915,748 $6,908,054
========== ==========
ANALYSIS OF FUND SHARE TRANSACTIONS:
Shares sold ....................... 250,788 826,343
Issued in reinvestment of dividends 6,845 1,784
Shares redeemed ................... (42,799) (162,849)
---------- ----------
Net increase in shares outstanding 214,834 665,278
========== ==========
See accompanying notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
FOR THE FOR THE PERIOD
SIX MONTHS MAY 1, 1995
ENDED (COMMENCEMENT
APRIL 30, 1996 OF OPERATIONS) TO
(UNAUDITED) OCTOBER 31, 1995
----------------- --------------------
FOR A SHARE OUTSTANDING THROUGHOUT
THE PERIOD:
Net Asset Value, beginning of
period ......................... $10.38 $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........... 0.25 0.25
Net realized and unrealized gain
(loss) on investments .......... (0.18) 0.38
------ ------
Total from investment operations 0.07 0.63
------ ------
Less dividends and distributions from:
Net investment income ........... (0.25) (0.25)
Net realized gains .............. (0.07) --
------ ------
Total from dividends and distributions (0.32) (0.25)
------ ------
Net asset value, end of period .... $10.13 $10.38
====== ======
Total return ...................... 0.64%(a) 6.39%(a)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $8,916 $6,908
Ratio of expenses to average net
assets (b) .................... 0.50%(c) 0.50%(c)
Ratio of net investment income to
average net assets (b) ........ 4.82%(c) 4.91%(c)
Portfolio turnover (%) .......... 103%(a) 130%
- ------------------------------------------------------------------------------
(a) Not Annualized.
(b) Reflects a voluntary expense limitation and waiver of fees by affiliated
parties of the Fund. If this limitation had not been in effect, the
annualized ratios of expenses and net investment income to average net
assets for the six months ended April 30, 1996, and the period May 1, 1995
(commencement of operations) to October 31, 1995 would have been:
Ratio of expenses to average
net assets ................ 2.66% 2.40%
Ratio of net investment income
to average net assets ..... 2.67% 3.01%
(c) Annualized.
See accompanying notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX FREE BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1996
1. DESCRIPTION AND SHARES OF THE FUND. Republic New York Tax Free Bond Fund
(the "Fund") is a non-diversified separate series (portfolio) of the
Republic Funds (the "Trust"), a Massachusetts business trust organized on
April 22, 1987, which currently consists of six portfolios, each of which
has different and distinct investment objectives and policies. The Fund
commenced operations on May 1, 1995. The financial statements for the other
five portfolios are presented separately. The Declaration of Trust permits
the Trustees to create additional portfolios. The Trust is registered under
the Investment Company Act of 1940, as amended (the "Act"), as an open-end,
management investment company.
The Fund's investment objective is to provide shareholders of the Fund
with monthly dividends exempt from regular federal, New York State and New
York City personal income taxes as well as protect the value of its
shareholders' investment.
The Trust retains Republic National Bank of New York ("Republic") as
Investment Adviser ("Adviser") and Signature Broker-Dealer Services, Inc.
("Signature") as Administrator, Distributor and Sponsor ("Sponsor").
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
conformity with generally accepted accounting principals 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 revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The following is a summary of the Fund's significant accounting
policies:
(A) Security Valuation. Bonds and other fixed income securities (other
than short-term obligations but including listed issues) in the Fund's
portfolio are valued on the basis of valuations furnished by a pricing
service, which utilizes both dealer-supplied valuations and electronic data
processing techniques which take into account appropriate factors such as
institutional-size trading in similar groups of yield, quality, coupon rate,
maturity, type of issue, trading characteristics other than market data and
without exclusive reliance upon quoted prices or exchanges or
over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Short-term debt obligations
are valued at amortized cost, which approximates market value, as determined
by the Board of Trustees. Futures Contracts are normally valued at the
settlement price on the exchange on which they are traded. Portfolio
securities for which there are no such valuations are valued at fair market
value as determined in good faith by or at the direction of the Board of
Trustees.
(B) Income. Interest income on long-term obligations in the Fund's
portfolio is determined on the basis of interest plus accretion of "original
issue discount" (generally, the difference between issue price and stated
redemption price at maturity) and less amortization of premiums.
(C) Federal Income Taxes. The Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code, as amended (the "Code"). By so qualifying, the Fund will be exempt
from regular federal income taxes to the extent that it distributes
substantially all of its net investment income and net realized capital
gains to its shareholders.
(D) Dividends and Distributions. It is intended that the Fund's assets
will be sufficiently invested in municipal securities to qualify to pay
"exempt-interest dividends" (as defined in the Code) to shareholders. The
Fund's dividends payable from net tax-exempt interest earned from municipal
securities will qualify as exempt-interest dividends if, at the close of
each quarter of its taxable year, at least 50% of the value of its total
assets consists of securities the interest on which is exempt from the
regular federal income tax. Exempt-interest dividends distributed to
shareholders are not included in shareholders' gross income for regular
federal income tax purposes. If the Fund earns income which is not eligible
to be so designated, the Fund, nonetheless, intends to distribute such
income. Such distributions will be subject to federal, state, and local
taxes, as applicable.
(E) Security Transactions and Related Investment Income. Investment
transactions are accounted for on the trade date. Interest income is accrued
as earned. Identified cost is used to calculate securities' gains and
losses. Distributions to shareholders and shares issuable to shareholders
electing to receive distributions in shares are recorded on the ex-dividend
date.
(F) Expense Allocation. The Fund bears all costs of its operations other
than expenses specifically assumed by the Adviser or Sponsor. Expenses
directly attributable to the Fund are charged to the Fund. Expenses incurred
by the Trust with respect to any two or more of the Trust's six portfolios
are allocated in proportion to the net asset level of each portfolio, except
where allocations of direct expenses to each portfolio can otherwise be made
fairly.
(G) Organization Expenses. Cost incurred in connection with the
organization and initial registration of the Fund have been deferred and are
being amortized on a straight-line basis over a five year period beginning
with the commencement of operations for the Fund. The aggregate amount of
such cost was $29,746.
3. ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
(A) Advisory Fees. Republic serves as Investment Adviser to the Fund.
Republic is responsible for the investment management of the Fund's assets,
including the responsibility for making investment decisions and placing
orders for the purchase and sale of the Fund's investments directly with the
issuers or with brokers or dealers selected by it in its discretion.
Republic does not place orders with the Distributor. Republic also furnishes
to the Board of Trustees, which has overall responsibility for the business
affairs of the Trust, periodic reports on the investment performance of the
Fund. For its services as Investment Adviser, Republic receives a fee
payable monthly, at the annual rate of 0.25% of the Fund's average daily net
assets. For the six months ended April 30, 1996, Advisory fees aggregated
$9,861, of which the entire amount was waived.
(B) Administration. The Fund retains Signature to serve as
Administrator, Distributor, and Sponsor. Signature provides management and
administrative services necessary for the operation of the Fund, furnishes
office space and facilities required for conducting business of the Fund and
pays the compensation of the Fund's officers.
For these services, Signature receives from the Fund a fee, payable
monthly, at an annual rate of 0.20% of the first $100 million of the Fund's
average daily net assets; 0.17% of the next $100 million of such assets;
0.13% of the next $300 million of such assets; and 0.10% of such assets in
excess of $500 million. For the six months ended April 30, 1996, the
administration fees were $7,889, of which the entire amount was waived.
(C) Distribution expenses and Shareholder Service Fees. The Trust has
adopted a non-compensatory Distribution Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 of the Act. Pursuant to the Plan, Signature, the
distributor is reimbursed by the Fund for marketing costs and services
rendered in distributing the Fund. The Fund has also entered into a
shareholder servicing agreement pursuant to which shareholder servicing
agents may be paid for certain services provided to its customers. It is
currently intended that distribution expenses and shareholder service fees
in the aggregate not exceed, on an annual basis, 0.25% of average daily net
assets which, for the six months ended April 30, 1996, totaled $9,861. Of
this amount Signature was reimbursed $6,091 for distribution expenses, $790
was paid to unaffiliated shareholder servicing agents and the balance of
$2,980 was waived.
(D) Trustees' Fees and Expenses. The fees paid and the out-of-pocket
expenses reimbursed to the Trustees amounted to $3,737 for the six months
ended April 30, 1996.
(E) Expense Reimbursement and Waivers. The Adviser and Sponsor have
voluntarily agreed to waive all or a portion of their fees and, to the
extent necessary, reimburse the Fund for additional expenses during the six
months ended April 30, 1996. Expenses for the Fund have been voluntarily
limited to no more than 0.50% of average daily net assets on an annualized
basis. For the six months ended April 30, 1996, the Adviser and sponsor
voluntarily waived and reimbursed expenses aggregating $85,049.
4. INVESTMENT TRANSACTIONS. Purchases and proceeds from sales and maturities of
investments excluding short-term securities for the six months ended April
30, 1996 were $10,477,519 and $8,089,342, respectively.
5. SUBSEQUENT EVENT. On January 15, 1996, the Trustees approved a Multiple
Class Plan pursuant to Rule 18f-3 under the 1940 Act, pursuant to which the
Fund is authorized to issue two classes of shares, Class C shares and Class
Y shares, effective May 22, 1996. The existing shares of the Fund have been
designated as Class C shares. The Class C shares are subject to the terms of
the Distribution and Administration Services Plans previously adopted by the
Board pursuant to Rule 12b-1 under the 1940 Act for the existing shares of
the Fund.
<PAGE>
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REPUBLIC
NEW YORK
TAX FREE
BOND FUND
INVESTMENT ADVISER
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
ADMINISTRATOR, DISTRIBUTOR AND SPONSOR
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, MA 02116
CUSTODIAN AND TRANSFER AGENT
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
INDEPENDENT AUDITORS
KPMGPeat Marwick LLP
99 High Street
Boston, MA 02110
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
SHAREHOLDER SERVICING AGENTS:
Republic National Bank of New York
Republic Bank for Savings
452 Fifth Avenue
New York, NY 10018
(800) 782-8183
FOR NON-REPUBLIC CLIENTS:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
(800) 782-8183
[graphic omitted]
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REPUBLIC
NEW YORK
TAX FREE
BOND FUND
SEMI-ANNUAL REPORT
APRIL 30, 1996
