<PAGE>
PRESIDENT'S MESSAGE
May 1996
Dear Shareholder:
We are very pleased to present you with the Republic U.S. Government Money
Market Fund (the "Fund") semi-annual report for the six months ended March 31,
1996. In this report, we have provided you with a detailed investment review of
the six-month period from Republic National Bank of New York, the Fund's
adviser.
We hope you find this letter and the accompanying financial statements
informative. As always, we would be delighted to hear from you to answer any
questions you might have or to provide you with additional information.
We look forward to serving your financial needs and appreciate your
continued support.
Respectfully submitted,
/s/ Philip Coolidge
Philip W. Coolidge
President
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
SEMI-ANNUAL REPORT -- MARCH 31, 1996
TABLE OF CONTENTS
PAGE
----
President's Message .............................................. 1
Letter to Shareholders from Investment Adviser ................... 3
Statement of Net Assets .......................................... 4
Statement of Operations .......................................... 6
Statement of Changes in Net Assets ............................... 7
Financial Highlights ............................................. 8
Notes to Financial Statements .................................... 9
<PAGE>
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
May, 1996
DEAR SHAREHOLDER:
We are pleased to present the semi-annual report for the Republic US
Government Money Market Fund. For the periods indicated, the Fund outperformed
the average US Government Money Market Fund tracked by Lipper Analytical
Services. For the twelve months ending March 31, 1996, the Fund returned 5.32%
versus 5.14%, and since the current investment objective was adopted (February
1, 1994) the Fund returned 4.77% versus 4.54% on an annualized basis.*
The new year began with expectations of further easings 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 January, subsequently released
economic reports were brighter than expected, reducing fears of a recession and
the prospects for further Fed easings. We feel that the Fed is now unlikely to
change rates for at least the next several months.
During the period, the Fund's maturity structure remained considerably below
the 90-day limit permitted by its guidelines. As of March 31, the portfolio was
invested in the highest quality issues, consisting of 62.0% US Treasury
instruments, 13.8% US Government Repurchase Agreements and 24.2% US Government
Agencies. The Fund's annualized compounded 7-day yield through March 31, 1996
was 4.65%.
Unaudited financial statements and portfolio holdings as of March 31, 1996
are included in this report. Thank you for your continued support.
Sincerely,
Republic National Bank
- --------------------
*As with any fund, the performance data quoted represents past performance and
is no guarantee of future results.
<PAGE>
<TABLE>
<CAPTION>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- MARCH 31, 1996
(UNAUDITED)
PRINCIPAL MATURITY VALUE
AMOUNT DESCRIPTION DATE (NOTE 2)
- -------- ----------- --------- --------
<C> <S> <C> <C>
U.S. GOVERNMENT AND GOVERNMENT AGENCY
OBLIGATIONS --(85.7% OF NET ASSETS)
$ 1,000,000 Federal Farm Credit Bank 5.25% .......... 05/01/96 $ 1,000,000
1,000,000 Federal Farm Credit Bank 5.125% ......... 06/03/96 1,000,000
10,000,000 Federal Farm Credit Bank 5.31% .......... 11/03/97** 9,994,300
5,000,000 Student Loan Marketing Assn. 5.34% .... 04/11/96* 4,999,414
5,000,000 Student Loan Marketing Assn. 5.87% ...... 05/01/96* 5,001,675
3,000,000 Student Loan Marketing Assn. 6.08% ...... 07/01/96*** 3,000,092
5,000,000 Student Loan Marketing Assn. 5.31% ...... 09/28/98* 4,998,438
5,000,000 Student Loan Marketing Assn. 5.31% ...... 11/10/98* 4,998,047
5,000,000 Student Loan Marketing Assn. 5.33% ...... 01/13/99* 4,982,770
10,000,000 Student Loan Marketing Assn. 5.34% ...... 08/02/99* 9,954,100
5,000,000 U.S. Treasury Bills 5.01% ............... 04/18/96 4,970,078
10,000,000 U.S. Treasury Bills 4.84% ............... 05/02/96 9,883,033
10,000,000 U.S. Treasury Bills 4.885% .............. 05/02/96 9,876,518
10,000,000 U.S. Treasury Bills 4.89% ............... 05/02/96 9,876,392
50,000,000 U.S. Treasury Bills 4.965% .............. 05/02/96 49,358,688
25,000,000 U.S. Treasury Bills 5.875% .............. 05/31/96 25,035,363
10,000,000 U.S. Treasury Bills 4.9% ................ 06/06/96 9,876,139
5,000,000 U.S. Treasury Bills 4.735% .............. 08/15/96 4,883,598
3,000,000 U.S. Treasury Note 6.5% ................. 09/30/96 3,018,449
-----------
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS .................... 176,707,094
-----------
<CAPTION>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- MARCH 31, 1996 (CONTINUED)
(UNAUDITED)
PRINCIPAL VALUE
AMOUNT DESCRIPTION (NOTE 2)
- -------- ----------- --------
<C> <S> <C>
REPURCHASE AGREEMENT -- (13.8% OF NET ASSETS)
$28,408,625 Repurchase Agreement with Yamaichi Securities dated
03/29/96, due 4/01/96, 5.45% (collateralized by
$28,575,000 U.S. Treasury Bills 5.45%, due
08/22/96, repurchase proceeds of $28,421,527) ........ $ 28,408,625
------------
TOTAL INVESTMENTS AT AMORTIZED COST**** ........ 205,115,719
INTEREST RECEIVABLE ................................................. 1,799,494
DIVIDENDS PAYABLE ................................................... (717,533)
ADVISORY FEE PAYABLE (NOTE 3 & 4) ................................... (48,441)
ADMINISTRATIVE SERVICE FEE PAYABLE (NOTE 3 & 4) ..................... (20,224)
DISTRIBUTION EXPENSE PAYABLE (NOTE 3 & 4) ........................... (9,356)
LIABILITIES LESS OTHER ASSETS ....................................... (9,182)
------------
NET ASSETS .......................................................... $206,110,477
============
Represented by:
Paid-in capital ..................................................... $206,089,334
Undistributed net investment income ................................. 21,143
------------
$206,110,477
------------
NET ASSETS -- Applicable to 206,110,477 shares of beneficial interest
outstanding (unlimited number of shares authorized) ... $206,110,477
============
Net Asset Value, Offering Price and Redemption Price Per Share ...... $1.00
=====
<FN>
*Variable rate notes. Interest resets weekly.
**Variable rate notes. Interest resets monthly.
***Variable rate notes. Interest resets semi-annually.
****Cost is approximately the same for Federal income tax purposes.
</TABLE>
See accompanying notes to financial statements
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF OPERATIONS -- SIX MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
Investment income (note 2) ...................................... $4,364,619
Expenses:
Advisory fee (note 3) ............................. $160,436
Transfer agent .................................... 26,600
Distribution fees (note 3) ........................ 12,765
Shareholder servicing fee (note 3) ................ 120,357
Administrative services fee (note 3) .............. 160,436
Fund accounting ................................... 22,500
Audit ............................................. 7,536
Reports to shareholders ........................... 11,097
Custodian fees and expenses ....................... 37,179
Legal ............................................. 3,000
Registration fees ................................. 10,509
Trustees' fees (note 3) ........................... 3,946
Insurance ......................................... 2,107
Miscellaneous ..................................... 2,716
---------
Total expenses before waiver ........................ 581,184
Waiver of fees (note 4) ............................. (144,393)
---------
Net expenses ................................................ 436,791
----------
Net investment income ........................................... $3,927,828
==========
See accompanying notes to financial statements
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
MARCH 31, YEAR ENDED
1996 SEPTEMBER 30,
(UNAUDITED) 1995
----------- ------------
INCREASE (DECREASE) IN NET ASSETS:
Net investment income ........................ $ 3,927,828 $ 5,734,776
----------- -----------
Net increase in net assets resulting from
operations ................................. 3,927,828 5,734,776
----------- -----------
Dividends to shareholders from net investment
income ..................................... (3,927,828) (5,727,567)
----------- -----------
Capital share transactions at net asset value
of $1.00 per share:
Proceeds from sales of shares ............ 387,129,359 366,028,959
Net asset value of shares issued in
connection with reinvestment of
distributions .......................... 3,296,406 3,048,453
Cost of shares repurchased ............... (297,533,330) (356,309,344)
----------- -----------
Net increase in net assets from capital share
transactions ............................... 92,892,435 12,768,068
----------- -----------
Total Increase in Net Assets ................. 92,892,435 12,775,277
Net Assets:
Beginning of period ...................... 113,218,042 100,442,765
----------- -----------
End of period (Each includes undistributed
net income of $21,143) ................. $206,110,477 $113,218,042
============ ============
See accompanying notes to financial statements
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30,
1996 --------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period .... $ 1.000000 $ 1.000000 $ 1.000000 $ 1.000000 $ 1.000000 $ 1.000000
---------- ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ................. 0.025232 0.051501 0.034570 0.026678 0.037513 0.061880
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations .... 0.025232 0.051501 0.034570 0.026678 0.037513 0.061880
---------- ---------- ---------- ---------- ---------- ----------
Less dividends:
Dividends to shareholders from
net investment income ............... (0.025232) (0.051501) (0.034570) (0.026678) (0.037513) (0.061880)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions ................. (0.025232) (0.051501) (0.034570) (0.026678) (0.037513) (0.061880)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of year ............ $ 1.000000 $ 1.000000 $ 1.000000 $ 1.000000 $ 1.000000 $ 1.000000
========== ========== ========== ========== ========== ==========
Total return ............................ 5.15%<F2> 5.27% 3.51% 2.70% 3.82% 6.36%
Ratios/supplemental data:
Net assets, end of period (in 000's) .. $206,110 $113,218 $100,443 $73,284 $46,499 $55,795
Ratio of expenses to average net assets<F1> 0.54%<F2> 0.58% 0.24% 0.56% 0.70% 0.70%
Ratio of net investment income to
average net assets<F1>* ............. 4.90%<F2> 5.17% 3.50% 2.66% 3.76% 5.96%
- -------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Reflects a voluntary expense limitation and waiver of fees by affiliated parties of the Fund. If this limitation and waiver
had not been in effect, the ratios of expenses and net investment income to average net assets for the six months ended March
31, 1996 and the years ended September 30, 1995, 1994, 1993, 1992, and 1991 would have been:
Ratio of expenses to average net
assets ........................... 0.72% 0.78% 0.67% 0.93% 0.91% 0.98%
Ratio of net investment income to
average net assets 4.72% 4.97% 3.08% 2.28% 3.54% 5.68%
<F2> Annualized.
</TABLE>
See accompanying notes to financial statements
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 1996 (UNAUDITED)
1. DESCRIPTION AND SHARES OF THE FUND. Republic U.S. Government Money Market
Fund (the "Fund") is a separate series (portfolio) of Republic Funds (the
"Trust"), a Massachusetts business trust organized on April 22, 1987, which
currently consists of six portfolios, each of which has different investment
objectives and policies. The financial statements for the other five of the
portfolios are presented separately. The Fund's investment objective is
liquidity and high income consistent with preservation of capital. 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, diversified management investment
company.
The Trust retains Republic National Bank of New York (formerly
Republic Asset Management Corporation) ("Republic") as Investment Adviser
("Adviser") and Signature Broker-Dealer Services, Inc. ("Signature") as
Administrator, Distributor and Sponsor ("Sponsor").
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the Fund's
significant accounting policies:
(A) Security Valuation. Money market instruments are valued at amortized
cost, which the Trustees have determined in good faith constitutes fair
value. The Fund's use of amortized cost is subject to compliance with
certain conditions as specified under Rule 2a-7 of the Act.
(B) Security Transactions and Investment Income. Investment transactions
are accounted for on the trade date. Interest income is accrued as earned.
Identified cost of investments sold is used to calculate gains and losses
for both financial statement and federal income tax purposes.
(C) 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 levels of each portfolio,
except where allocations of direct expenses to each portfolio can otherwise
be made fairly.
(D) Federal Income Taxes. The Fund is treated as a separate taxable
entity for federal tax purposes. The Fund has qualified and intends to
continue to qualify as a "regulated investment company" under Subchapter M
of the Internal Revenue Code, as amended, and to distribute substantially
all of its taxable income, including any net realized gains, to its
shareholders. Accordingly, no provision for federal income or excise tax is
required.
(E) Distributions to Shareholders. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
amortizing organization expenses.
Permanent book and tax differences relating to shareholder distributions
will result in reclassifications to paid-in capital. Undistributed net
investment income may include temporary book and tax differences which will
reverse in a subsequent period. Any taxable gain or income remaining at
fiscal year end is distributed in the following year.
(F) Repurchase Agreements. The Fund's custodian takes possession,
through the Federal book-entry system, of securities collateralizing
repurchase agreements. Collateral is marked-to-market daily to ensure that
the market value of the underlying assets remains sufficient to protect the
Fund in the event of default by the seller. In connection with transactions
in repurchase agreements, if the seller defaults and the collateral declines
in value, or if the seller enters an insolvency proceeding, realization of
the collateral by the Fund may be limited or delayed.
3. ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
(A) Advisory Fees. The Fund retains Republic to act as Investment
Adviser. 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 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 from the Fund a fee, payable monthly,
at the annual rate of 0.20% of average daily net assets. During the six
months ended March 31, 1996, the advisory fee was $160,436, of which $80,218
was waived (note 4).
(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 the 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 the annual rate
of 0.20% of the Fund's average daily net assets. During the six months ended
March 31, 1996, the administration fee was $160,436, of which $64,175 was
waived (note 4).
(C) Rule 12b-1 Plan Expenses. The Fund has adopted a noncompensatory
Distribution Plan and Agreement (the "Plan") pursuant to Rule 12b-1 of the
Act. The Plan provides for a monthly payment by the Fund to the Sponsor in
amounts representing actual expenses incurred by the Sponsor for marketing
costs and services rendered in distributing Fund shares at a rate not to
exceed 0.25% of the average daily net assets of the Fund. During the six
months ended March 31, 1996, the Fund reimbursed Signature for distribution
expenses of $12,765.
(D) Shareholder Servicing Expenses. The Fund has entered into a
Shareholder Servicing Agreement with each shareholder servicing agent
pursuant to the Administrative Services Plan. Each shareholder servicing
agent receives a fee from the Fund, which may be paid periodically,
determined by a formula based upon the number of accounts serviced, the
level of activity in such accounts and the expenses incurred by the
shareholder servicing agent. During the six months ended March 31, 1996,
shareholder servicing fees were $120,357.
(E) Trustees' Fees. The fees paid and the amount of out-of-pocket
expenses reimbursed to the Trustees amounted to $3,946 for the six months
ended March 31, 1996.
4. WAIVER OF FEES. The Adviser and Sponsor have voluntarily agreed to waive a
portion of their fees. There can be no assurance that fees will be waived in
the future. For the six months ended March 31, 1996, the Adviser and Sponsor
waived fees aggregating $144,393.
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 U.S.
Government Money Market Fund will 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 shall be
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>
- ----------- ------------
R E P U B L I C
U. S. G O V E R N M E N T
M O N E Y M A R K E T -----------------------------------
F U N D
[Graphic Omitted]
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
KPMG Peat Marwick LLP
99 High Street R E P U B L I C
Boston, MA 02110
U. S. G O V E R N M E N T
LEGAL COUNSEL
Dechert Price & Rhoads M O N E Y M A R K E T F U N D
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 S E M I - A N N U A L R E P O R T
Boston, MA 02111 M A R C H 3 1, 1 9 9 6
(800) 782-8183
