<PAGE>
[Graphic Omitted]
REPUBLIC
U.S. GOVERNMENT
MONEY MARKET
FUND
ANNUAL REPORTS
OCTOBER 31 AND
SEPTEMBER 30, 1998
<PAGE>
PRESIDENT'S LETTER
November 1998
DEAR SHAREHOLDER:
We are very pleased to present you with the annual report for the Republic
U.S. Government Money Market Fund (the "Fund") for the one month period ended
October 31, 1998 and the year ended September 30, 1998. Going forward, the
fiscal year end of the Fund will be changed to October 31 of each year. This
will bring the fiscal year end of the Fund in line with the other six funds in
the Trust.
In this report we have provided you with a commentary from the Fund's
Investment Adviser, Republic National Bank of New York. We hope you find this
commentary 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, including portfolio holdings for the U.S. Government
Money Market Fund for the one month period ended October 31, 1998 and the year
ended September 30, 1998 also follow. We look forward to servicing your
financial needs and appreciate your continued support.
Respectfully submitted,
/s/ Walter B. Grimm
Walter B. Grimm
President
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
ANNUAL REPORT -- SEPTEMBER 30, AND OCTOBER 31, 1998
CONTENTS
PAGE
President's Letter .................................................... 1
Commentary from the Investment Adviser ................................ 3
Statement of Net Assets as of October 31, 1998 ........................ 5
Statement of Net Assets as of September 30, 1998 ...................... 8
Statements of Operations .............................................. 11
Statements of Changes in Net Assets ................................... 12
Notes to Financial Statements ......................................... 13
Financial Highlights .................................................. 17
Report of KPMG Peat Marwick LLP, Independent Auditors ................. 20
<PAGE>
COMMENTARY FROM THE INVESTMENT ADVISER --
REPUBLIC NATIONAL BANK OF NEW YORK
DEAR SHAREHOLDER:
We are pleased to present you with the annual report for the Republic U.S.
Government Money Market Fund for the fiscal year ended September 30, 1998 and
one month ended October 31, 1998.
The close of the fiscal year was characterized by an unprecedented flight
to quality as nervous investors, foreign as well as domestic, sought a safe
haven from a simultaneous sell-off in global equity markets. As a result long
term U.S. Treasury rates hit record lows (4.96%) for the 30-year bond during
that period. In light of declining expectations for the domestic economy, the
Federal Open Market Committee took an active stance and cut the federal funds
rate by 25 basis points in September. Investors, expecting a greater easing,
deemed this cut as a compromise between inflationary fears and conditions in
financial markets. Subsequently, the Fed surprised the markets by cutting the
federal funds rate, as well as the discount rate, by an additional 25 basis
points between meetings of the Federal Open Market Committee in October.
In announcing the lastest rate cut, the Fed made it clear that it's focus
is on the domestic economy. In determining monetary policy, the Fed considers
the effects of international events through the prism of their impact on
domestic growth and inflation. Given the recent changes in the global economy
and the consequent adjustments in U.S. financial markets, a lower fed funds
rate should now be consistent with keeping inflation low and sustaining
economic growth going forward. Therefore, the Fed is likely to move with
caution in the near future until economic indicators confirm that the economy
is slowing down.
The Republic U.S. Government Money Market Fund returned 5.00%(2) (Class A
Shares) for the twelve months ended September 30, 1998, and 0.39% (Class A
shares) for one month ended October 31, 1998 compared to 5.08% and 0.39%
respectively for the Lipper U.S. Government Money Market Fund Average(3). For
the period from inception of the Fund's current objective (February 1,
1994)(4), the Fund outperformed the average annual return for comparable funds
ranked by Lipper Analytical Services, returning 4.85%(5) (Class A Shares)
versus 4.80% through September 30, 1998 and 4.85% (Class A Shares) versus
4.84% through October 31, 1988.
As of September 30, 1998, the Fund's average maturity was 51 days. The
ratings on the portfolio holdings were AAA, consisting of 52% U.S. Treasury
bills and notes, 24% U.S. Agencies and 24% Repurchase Agreements.(6) The
Fund's annualized compounded 7 day yield through September 30, 1998 was
4.74%(7) for Class A Shares, 3.99% for Class B Shares and 4.99% for Class Y
Shares.
As of October 31, 1998, the Fund's average maturity was 50 days. The
ratings on the Portfolio holdings were AAA, consisting of 53% U.S. Treasury
bills and notes, 23% U.S. Agencies and 24% Repurchase Agreements.(6) The
Fund's annualized compounded 7 days yield through October 31, 1998 was
4.65%(8) for Class A Shares, 3.90% for Class B shares and 4.90% for Class Y
Shares.
- ----------
(1) An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that the Fund will be able to maintain
a stable net asset value of $1 per share.
(2) Total return for Class B Shares for the period from September 11, 1998 to
September 30, 1998 and Class Y Shares for the fiscal year ended September
30, 1998 is 0.22% and 5.27%, respectively, and for the one month period
ended October 31, 1998 is 0.32%, and 0.41%, respectively.
(3) The Lipper U.S. Government Money Market Fund Average measures the
performance of funds which invest principally in financial instruments
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities with dollar-weighted average maturities of less than 90
days.
(4) On February 1, 1994 the Fund changed from a general money market fund to a
U.S. Government money market fund.
(5) The average annual return for the Class B Shares for the period from
inception of the Fund's current objective (February 1, 1994) was 4.80% to
September 30, and 4.77% to October 31, 1998. This represents the average
annual return for Class A Shares for the period from February 1, 1994 to
September 10, 1998 plus the average annual return for the Class B Shares for
the period September 11, 1998 to September 30, 1998, and October 31, 1998.
The average annual return for the Class Y Shares for the period from
inception of the Fund's current objective (February 1, 1994) was 4.97% to
September 30, 1998 and 4.97% to October 31, 1998. This represents the
average annual return for Class A Shares for the period from February 1,
1994 to June 30, 1996 plus the average annual return for the Class Y Shares
for the period July 1, 1996 to September 30, 1998, and October 31, 1998.
(6) Portfolio composition is subject to change.
(7) Past performance is not predictive of future performance as yields on money
market funds fluctuate daily. Some of the fees of the Fund are currently
being waived, resulting in higher yields in the Fund than would occur if
full fees were charged. If full fees had been charged, the 7 day yield for
the Class A Shares, Class B Shares and Class Y Shares would have been 4.64%,
3.89% and 4.89%, as of September 30, 1998.
(8) If full fees had been charged, the 7 day yield for the Class A Shares, Class
B Shares and Class Y Shares would have been 4.55%, 3.80% and 4.80%,
respectively, as of October 31, 1998.
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- OCTOBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MATURITY AMORTIZED
AMOUNT DESCRIPTION RATE DATE COST
------ ----------- ---- ---- ----
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND GOVERNMENT AGENCY
OBLIGATIONS -- (79.24% OF NET ASSETS)
$ 1,000,000 Federal Farm Credit Bank .......... 5.500% 11/02/98 $ 1,000,000
10,000,000 Federal Farm Credit Bank .......... 5.540% 01/04/99 9,998,914
10,000,000 Federal Farm Credit Bank .......... 5.533% 08/03/99 10,000,000
10,000,000 Federal Farm Credit Bank .......... 5.500% 10/01/99 10,000,000
10,000,000 Federal Home Loan Bank ............ 4.500%* 12/03/98 9,999,516
8,100,000 Federal Home Loan Bank ............ 4.620%* 12/24/98 8,099,010
20,000,000 Federal Home Loan Bank ............ 5.030% 01/04/99 19,818,361
10,052,000 Federal Home Loan Bank ............ 5.360% 01/06/99 9,951,726
10,000,000 Federal Home Loan Bank ............ 4.840% 01/22/99 9,888,411
10,000,000 Federal Home Loan Bank ............ 4.520%* 02/26/99 9,998,353
10,000,000 Federal Home Loan Bank ............ 5.580% 03/11/99 10,001,149
5,000,000 Federal Home Loan Bank ............ 4.605%* 03/26/99 5,000,000
10,000,000 Federal Home Loan Bank ............ 4.635%* 08/18/99 9,997,210
10,000,000 Federal Home Loan Bank ............ 4.700%* 09/09/99 9,998,945
20,000,000 Federal Home Loan Bank ............ 5.300% 11/02/99 19,994,111
19,000,000 Student Loan Marketing Assn. ...... 4.405%* 11/06/98 18,998,715
10,000,000 Student Loan Marketing Assn. ...... 4.360%* 11/10/98 9,999,862
10,000,000 Student Loan Marketing Assn. ...... 4.470%* 12/17/98 9,996,814
5,000,000 Student Loan Marketing Assn. ...... 4.380%* 01/13/99 4,998,759
1,250,000 Student Loan Marketing Assn. ...... 4.520%* 01/21/99 1,249,262
10,000,000 Student Loan Marketing Assn. ...... 4.545%* 02/05/99 9,998,829
10,000,000 Student Loan Marketing Assn. ...... 4.770%* 03/18/99 10,000,000
10,000,000 Student Loan Marketing Assn. ...... 5.120%* 04/15/99 10,000,000
13,000,000 Student Loan Marketing Assn. ...... 4.920%* 04/16/99 13,015,563
15,000,000 Student Loan Marketing Assn. ...... 4.161%* 08/02/99 14,988,871
15,000,000 U.S. Treasury Bills ............... 5.140% 11/12/98 14,974,300
15,000,000 U.S. Treasury Bills ............... 5.170% 11/12/98 14,974,150
10,000,000 U.S. Treasury Bills ............... 5.173% 11/12/98 9,982,759
15,000,000 U.S. Treasury Bills ............... 5.165% 11/12/98 14,974,174
25,000,000 U.S. Treasury Bills ............... 5.105% 12/03/98 24,883,010
15,000,000 U.S. Treasury Bills ............... 5.140% 12/03/98 14,929,325
10,000,000 U.S. Treasury Bills ............... 5.100% 12/10/98 9,943,334
10,000,000 U.S. Treasury Bills ............... 5.095% 12/10/98 9,943,389
10,000,000 U.S. Treasury Bills ............... 5.135% 12/10/98 9,942,945
10,000,000 U.S. Treasury Bills ............... 5.100% 12/17/98 9,933,417
10,000,000 U.S. Treasury Bills ............... 5.120% 12/17/98 9,933,155
45,000,000 U.S. Treasury Bills ............... 4.405% 01/07/99 44,625,575
5,000,000 U.S. Treasury Bills ............... 5.083% 01/07/99 4,951,998
10,000,000 U.S. Treasury Bills ............... 5.040% 01/07/99 9,904,800
15,000,000 U.S. Treasury Bills ............... 5.050% 01/07/99 14,856,917
65,000,000 U.S. Treasury Bills ............... 5.030% 01/14/99 64,318,541
65,000,000 U.S. Treasury Bills ............... 4.480% 01/21/99 64,386,161
10,000,000 U.S. Treasury Bills ............... 5.045% 02/04/99 9,865,467
40,000,000 U.S. Treasury Bills ............... 5.040% 02/04/99 39,462,400
20,000,000 U.S. Treasury Bills ............... 4.800% 02/18/99 19,706,667
25,000,000 U.S. Treasury Bills ............... 4.175% 04/08/99 24,539,011
10,000,000 U.S. Treasury Notes ............... 5.125% 11/30/98 9,997,188
20,000,000 U.S. Treasury Notes ............... 5.625% 11/30/98 20,002,939
35,000,000 U.S. Treasury Notes ............... 5.750% 12/31/98 35,042,561
30,000,000 U.S. Treasury Notes ............... 6.375% 01/15/99 30,060,872
15,000,000 U.S. Treasury Notes ............... 6.250% 03/31/99 15,077,249
10,000,000 U.S. Treasury Notes ............... 5.875% 03/31/99 10,021,994
45,000,000 U.S. Treasury Notes ............... 6.375% 04/30/99 45,430,387
--------------
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS ........................................... 863,657,066
--------------
REPURCHASE AGREEMENTS -- (24.82% OF NET ASSETS)
45,480,600 Cantor Fitzgerald dated 11/02/98,
with a maturity value of
$45,500,687 (collaterized by
$42,905,000 5.625% U.S. Treasury
Note, 02/15/06, market value
$46,391,031) .................... 5.300% 11/02/98 45,480,600
45,000,000 First Boston dated 11/02/98, with a
maturity value of $45,019,875
(collaterized by $47,713,000 U.S.
Treasury Bill, 10/14/99, market
value $45,899,906) 5.300% 11/02/98 45,000,000
48,000,000 First Union dated 11/02/98, with a
maturity value of $48,021,400
(collaterized by $46,965,000
6.500% U.S. Treasury Note, 04/30/
99, market value $48,961,013) ... 5.350% 11/02/98 48,000,000
47,000,000 Societe Generale dated 11/02/98,
with a maturity value of
$47,020,837 (collaterized by
$46,815,000 6.000% U.S. Treasury
Note, 08/15/99, market value
$48,014,634) .................... 5.320% 11/02/98 47,000,000
40,000,000 UBS - Warburg dated 11/02/98, with
a maturity value of $40,017,667
(collaterized by $39,231,000
5.875% U.S. Treasury Note, 11/15/
99, market value $40,800,240) ... 5.300% 11/02/98 40,000,000
45,000,000 Wertheim dated 11/02/98, with a
maturity value of $45,020,063
(collaterized by $44,030,000
5.875% U.S. Treasury Note, 11/15/
99, market value $45,901,275) ... 5.350% 11/02/98 45,000,000
--------------
TOTAL REPURCHASE AGREEMENTS .................................... 270,480,600
--------------
TOTAL INVESTMENTS AT AMORTIZED COST**........................... 1,134,137,666
--------------
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- OCTOBER 31, 1998 (CONTINUED)
INTEREST RECEIVABLE ......................................................... $ 5,457,688
DIVIDENDS PAYABLE ........................................................... (3,896,184)
PAYABLE FOR INVESTMENTS PURCHASED ........................................... (44,561,550)
SHAREHOLDER SERVICES FEES PAYABLE - (INVESTOR SHARES) ....................... (570,982)
ADVISORY FEES PAYABLE ....................................................... (505,425)
ADMINISTRATION FEES PAYABLE ................................................. (359,614)
OTHER NET ASSETS ............................................................ 190,474
--------------
NET ASSETS .................................................................. $1,089,892,073
==============
Represented by:
Paid-in capital ........................................................... $1,089,785,144
Accumulated net realized gains ............................................ 106,929
--------------
NET ASSETS .................................................................. $1,089,892,073
==============
NET ASSETS:
Class A (Investor Shares) -- Applicable to 1,055,081,339 shares of
beneficial interest outstanding .............. $1,055,162,712
Class B -- Applicable to 112,760 shares of beneficial
interest outstanding ......................... 112,764
Class Y (Adviser Shares) -- Applicable to 34,614,822 shares of beneficial
interest outstanding ......................... 34,616,597
--------------
$1,089,892,073
==============
Net Asset Value, Offering Price and Redemption Price Per Share
Class A (Investor Shares), Class B Shares and Class Y (Adviser Shares) .... $1.00
=====
* Variable rate notes. Interest rate resets weekly.
** Represents the aggregate cost of securities for federal income tax purposes.
</TABLE>
See notes to financial statements.
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL MATURITY AMORTIZED
AMOUNT DESCRIPTION RATE DATE COST
------ ----------- ---- ---- ----
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND GOVERNMENT AGENCY
OBLIGATIONS -- (76.56% OF NET ASSETS)
$ 1,000,000 Federal Farm Credit Bank .......... 5.530% 10/01/98 $ 1,000,000
1,000,000 Federal Farm Credit Bank .......... 5.500% 11/02/98 1,000,000
10,000,000 Federal Farm Credit Bank .......... 5.540% 01/04/99 9,998,412
10,000,000 Federal Farm Credit Bank .......... 5.533%* 08/03/99 10,000,000
10,000,000 Federal Farm Credit Bank .......... 5.500%* 10/01/99 10,000,000
5,000,000 Federal Home Loan Bank ............ 5.690% 10/02/98 5,000,004
10,000,000 Federal Home Loan Bank ............ 5.400% 10/02/98 9,998,500
15,000,000 Federal Home Loan Bank ............ 5.410% 10/02/98 14,997,746
20,000,000 Federal Home Loan Bank ............ 5.420% 10/09/98 19,975,911
10,000,000 Federal Home Loan Bank ............ 4.873%* 12/03/98 9,999,076
8,100,000 Federal Home Loan Bank ............ 4.993%* 12/24/98 8,098,461
10,052,000 Federal Home Loan Bank ............ 5.360% 01/06/99 9,906,827
10,000,000 Federal Home Loan Bank ............ 4.893%* 02/26/99 9,997,934
10,000,000 Federal Home Loan Bank ............ 5.580% 03/11/99 10,001,434
5,000,000 Federal Home Loan Bank ............ 4.978%* 03/26/99 5,000,000
10,000,000 Federal Home Loan Bank ............ 5.008%* 08/18/99 9,996,922
10,000,000 Federal Home Loan Bank ............ 5.073%* 09/09/99 9,998,844
19,000,000 Student Loan Marketing Assn. ...... 4.778%* 11/06/98 18,996,695
10,000,000 Student Loan Marketing Assn. ...... 4.733%* 11/10/98 9,999,433
10,000,000 Student Loan Marketing Assn. ...... 4.843%* 12/17/98 9,994,781
5,000,000 Student Loan Marketing Assn. ...... 4.753% 01/13/99 4,998,256
1,250,000 Student Loan Marketing Assn. ...... 4.893%* 01/21/99 1,248,992
10,000,000 Student Loan Marketing Assn. ...... 4.918%* 02/05/99 9,998,468
10,000,000 Student Loan Marketing Assn. ...... 5.143%* 03/18/99 10,000,000
13,000,000 Student Loan Marketing Assn. ...... 5.293%* 04/16/99 13,018,359
15,000,000 Student Loan Marketing Assn. ...... 4.763%* 08/02/99 14,987,657
10,000,000 U.S. Treasury Bills ............... 5.025% 10/15/98 9,980,458
30,000,000 U.S. Treasury Bills ............... 5.070% 10/15/98 29,940,850
10,000,000 U.S. Treasury Bills ............... 5.173% 11/12/98 9,939,655
15,000,000 U.S. Treasury Bills ............... 5.140% 11/12/98 14,910,050
15,000,000 U.S. Treasury Bills ............... 5.165% 11/12/98 14,909,612
15,000,000 U.S. Treasury Bills ............... 5.170% 11/12/98 14,909,525
10,000,000 U.S. Treasury Bills ............... 5.170% 11/19/98 9,929,630
10,000,000 U.S. Treasury Bills ............... 5.135% 11/19/98 9,930,107
15,000,000 U.S. Treasury Bills ............... 5.140% 12/03/98 14,865,075
25,000,000 U.S. Treasury Bills ............... 5.105% 12/03/98 24,776,656
10,000,000 U.S. Treasury Bills ............... 5.100% 12/10/98 9,900,834
10,000,000 U.S. Treasury Bills ............... 5.095% 12/10/98 9,900,931
10,000,000 U.S. Treasury Bills ............... 5.135% 12/10/98 9,900,153
10,000,000 U.S. Treasury Bills ............... 5.120% 12/17/98 9,890,489
10,000,000 U.S. Treasury Bills ............... 5.100% 12/17/98 9,890,917
15,000,000 U.S. Treasury Bills ............... 5.050% 01/07/99 14,793,792
10,000,000 U.S. Treasury Bills ............... 5.040% 01/07/99 9,862,800
5,000,000 U.S. Treasury Bills ............... 5.083% 01/07/99 4,930,821
45,000,000 U.S. Treasury Bills ............... 4.405% 01/07/99 44,460,388
65,000,000 U.S. Treasury Bills ............... 5.030% 01/14/99 64,045,958
10,000,000 U.S. Treasury Bills ............... 5.045% 02/04/99 9,823,425
40,000,000 U.S. Treasury Bills ............... 5.040% 02/04/99 39,294,400
20,000,000 U.S. Treasury Bills ............... 4.799% 02/18/99 19,626,667
10,000,000 U.S. Treasury Notes ............... 5.125% 11/30/98 9,994,375
20,000,000 U.S. Treasury Notes ............... 5.625% 11/30/98 20,005,877
35,000,000 U.S. Treasury Notes ............... 5.750% 12/31/98 35,063,493
30,000,000 U.S. Treasury Notes ............... 6.375% 01/15/99 30,084,900
15,000,000 U.S. Treasury Notes ............... 6.250% 03/31/99 15,092,596
10,000,000 U.S. Treasury Notes ............... 5.875% 03/31/99 10,026,364
--------------
TOTAL U.S.. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS ........................................... 778,893,510
------------
REPURCHASE AGREEMENTS -- (24.61% OF NET ASSETS)
17,824,400 Cantor Fitzgerald dated 10/01/98,
with a maturity value of
$17,827,034 (collaterized by
$18,181,000 4.500% U.S. Treasury
Bill, 09/30/00, market value
$18,249,179) .................... 5.320% 10/01/98 17,824,400
17,565,000 Cantor Fitzgerald dated 10/01/98,
with a maturity value of
$17,567,596 (collaterized by
$17,416,000 5.625% U.S. Treasury
Bill, 02/28/01, market value
$17,982,020) .................... 5.320% 10/01/98 17,565,000
35,000,000 Commerzbank dated 10/01/98, with a
maturity value of $35,005,250
(collaterized by $33,600,000
5.750% U.S. Treasury Bill, 08/31/
03, market value $35,700,000) ... 5.400% 10/01/98 35,000,000
45,000,000 First Union dated 11/01/98, with a
maturity value of $45,006,788
(collaterized by $40,800,000
7.500% U.S. Treasury Bill, 05/15/
02, market value $45,291,672) ... 5.430% 10/01/98 45,000,000
45,000,000 Societe Generale dated 10/01/98,
with a maturity value of
$45,006,863 (collaterized by
$34,096,000 7.625% U.S. Treasury
Bond, 11/15/22, market value
$45,986,980) .................... 5.490% 10/01/98 45,000,000
45,000,000 UBS - Warburg dated 10/01/98, with
a maturity value of $45,006,750
(collaterized by $43,099,000
6.250% U.S. Treasury Bill, 08/31/
02, market value $46,008,183) ... 5.400% 10/01/98 45,000,000
45,000,000 Wertheim dated 10/01/98, with a
maturity value of $45,006,938
(collaterized by $46,700,000
4.35%, U.S. Treasury Bill, 02/04/
99, market value $45,941,125) 5.550% 10/01/98 45,000,000
--------------
TOTAL REPURCHASE AGREEMENTS .................................... 250,389,400
--------------
TOTAL INVESTMENTS AT AMORTIZED COST**.................... 1,029,282,910
INTEREST RECEIVABLE .......................................................... 3,074,263
DIVIDENDS PAYABLE ............................................................ (4,074,569)
PAYABLE FOR INVESTMENTS PURCHASED ............................................ (10,000,000)
SHAREHOLDER SERVICES FEES PAYABLE - (INVESTOR SHARES) ........................ (362,064)
ADVISORY FEES PAYABLE ........................................................ (419,330)
ADMINISTRATION FEES PAYABLE .................................................. (273,519)
OTHER NET ASSETS ............................................................. 144,586
--------------
NET ASSETS ................................................................... $1,017,372,277
==============
Represented by:
Paid-in capital ............................................................ $1,017,298,061
Accumulated net realized gains ............................................. 74,216
--------------
NET ASSETS ................................................................... $1,017,372,277
==============
NET ASSETS:
Class A (Investor Shares) -- Applicable to 988,186,065 shares of beneficial
interest outstanding .......................... $ 988,236,067
Class B -- Applicable to 112,752 shares of beneficial
interest outstanding .......................... 112,752
Class Y (Adviser Shares) -- Applicable to 29,023,014 shares of beneficial
interest outstanding .......................... 29,023,458
--------------
$1,017,372,277
==============
Net Asset Value, Offering Price and Redemption Price Per Share
Class A (Investor Shares), Class B Shares and Class Y (Adviser Shares) ..... $1.00
=====
* Variable rate notes. Interest rate resets weekly.
** Represents the aggregate cost of securities for federal income tax purposes.
</TABLE>
See notes to financial statements.
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENTS OF OPERATIONS
ONE MONTH
PERIOD ENDED YEAR ENDED
OCTOBER 31, SEPTEMBER 30,
1998 1998
---------- -----------
INVESTMENT INCOME:
Interest income ........................ $4,327,530 $41,428,152
EXPENSES:
Shareholder service fees --
Class A and Class B Shares ........... 208,918 1,854,804
Administration fees .................... 86,095 767,296
Advisory fees .......................... 172,190 1,534,571
Custodian fees and expenses ............ 15,875 151,050
Fund accounting fees ................... 3,690 42,927
Legal fees ............................. 8,970 110,447
Registration and filing fees ........... 6,150 74,249
Transfer agent fees .................... 3,300 38,630
Reports to shareholders ................ 2,970 38,231
Audit fees ............................. 1,320 17,740
Trustees fees .......................... 720 8,728
Other expenses ......................... 4,650 62,096
---------- -----------
Total expenses ........................... 514,848 4,700,769
Voluntary fee reductions ................. (86,095) (767,275)
---------- -----------
Total net expenses ................... 428,753 3,933,494
---------- -----------
Net Investment income .................... 3,898,777 37,494,658
---------- -----------
REALIZED GAINS ON INVESTMENTS:
Net realized gains on investments ...... 32,707 60,937
---------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................ $3,931,484 $37,555,595
========== ===========
See notes to financial statements.
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ONE MONTH
PERIOD ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, SEPTEMBER 30, SEPTEMBER 30,
1998 1998 1997
-------------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income .......... $ 3,898,777 $ 37,494,658 $ 17,772,733
Net realized gains on investment
transactions ................. 32,707 60,937 94,763
-------------- -------------- --------------
Net Increase in net assets
resulting from operations ...... 3,931,484 37,555,595 17,867,496
-------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A (Investor) Shares .... (3,776,704) (36,222,464) (17,185,034)
Class B Shares (a) ........... (350) (246) 0
Class Y (Adviser) Shares ..... (121,717) (1,303,322) (556,345)
Net realized gains:
Class A (Investor) Shares .... 0 (101,952) 0
Class B Shares (a) ........... 0 0 0
Class Y (Adviser) Shares ..... 0 (3,282) 0
-------------- -------------- --------------
Decrease in net assets from
shareholder distributions ...... (3,898,771) (37,631,266) (17,741,379)
-------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued .... 190,913,781 2,582,611,123 1,488,350,023
Dividends reinvested ........... 3,791,950 32,959,918 14,616,566
Cost of shares redeemed ........ (122,218,648) (2,120,005,796) (1,228,991,877)
-------------- -------------- --------------
Net increase in net assets from
capital share transactions ..... 72,487,083 495,565,245 273,974,712
-------------- -------------- --------------
NET INCREASE IN NET ASSETS ....... 72,519,796 495,489,574 274,100,829
NET ASSETS:
Beginning of period ............ 1,017,372,277 521,882,703 247,781,874
-------------- -------------- --------------
End of period .................. $1,089,892,073 $1,017,372,277 $ 521,882,703
============== ============== ==============
(a) The Fund commenced offering Class B Shares on February 2, 1998.
</TABLE>
See notes to financial statements.
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31 AND SEPTEMBER 30, 1998
1. ORGANIZATION: Republic U.S. Government Money Market Fund (the "Fund") is a
separate series of Republic Funds (the "Trust"), a Massachusetts business
trust organized on April 22, 1987, which as of October 31 and September 30,
consisted of seven funds, each of which has different investment objectives
and policies. This report contains the financial statements for the Republic
U.S. Government Money Market Fund only. Financial statements for the other
six funds are published separately. The Trust is registered under the
Investment Company Act of 1940, as amended (the "Act"), as an open-end,
management investment company.
The Financial Statements presented herein reflect the activities of the
Fund for the one month period ended October 31, 1998 and the year ended
September 30, 1998. Going forward, the fiscal year end of the Fund will be
changed to October 31 of each year. This will bring the fiscal year end of
the Fund in line with the other funds in the Trust.
The investment objective of the Fund is to provide it's shareholders
with liquidity and as high a level of current income as is consistent with
the preservation of capital.
The Fund is authorized to issue three classes of shares, Class A Shares
("Investor Shares"), Class B Shares and Class Y Shares ("Adviser Shares").
Prior to February 1, 1998, the Class A Shares were known as Class C Shares.
Each class of shares in the Fund has identical rights and privileges, except
with respect to fees paid under shareholder servicing or distribution plans,
expenses allocable exclusively to each class of shares, voting rights on
matters affecting a single class of shares, and the exchange privilege of
each class of shares.
The Trust retains Republic National Bank of New York ("Republic") as
Investment Adviser ("Adviser") and BISYS Fund Services ("BISYS") as
Administrator, Distributor and Sponsor ("Sponsor").
2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles. The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expenses for the year. Actual results could differ from those
estimates.
SECURITIES VALUATION:
Investments of the Fund are valued at amortized cost, which approximates
market value. Under the amortized cost method, discount or premium is
accreted or amortized, respectively, on a constant ("straight-line") basis to
the maturity of the security. In addition, the Fund may not (a) purchase any
instrument with a remaining maturity greater than 397 days unless such
investment is subject to a demand feature, or (b) maintain a dollar-weighted
average portfolio maturity which exceeds 90 days.
SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is purchased
or sold (trade date). Interest income is recognized on the accrual basis and
includes, where applicable, the amortization of premium or accretion of
discount. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
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 seven funds are allocated in proportion to the net
asset levels of each fund, except where allocations of direct expenses to
each fund can otherwise be made fairly. Expenses are allocated to each class
in proportion to their respective net asset levels except for expenses
allocable exclusively to a particular class.
FEDERAL INCOME TAXES: The Fund is a separate taxable entity for federal
income 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 and net realized gains, if any, to its shareholders.
Accordingly, no provision for federal income or excise tax is required.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly.
Distributions from net realized capital gains, if any, are declared and paid
at least annually by the Fund.
REPURCHASE AGREEMENTS:
The Fund may acquire repurchase agreements with an entity which is a member
of the Federal Reserve System or which is a "primary dealer" (as designated
by the Federal Reserve Bank of New York) in U.S. Government obligations. The
repurchase price generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates, which may be more or
less than the rate on the underlying portfolio securities. The seller, under
a repurchase agreement, is required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest). Securities subject to repurchase agreements are held by
the Fund's custodian, either physically or in book entry form.
3. RELATED PARTY TRANSACTIONS:
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. For the one month period ended October 31, 1998 and the year ended
September 30, 1998, the advisory fees were $172,190 and $1,534,571,
respectively, of which $86,095 and $767,275 were voluntarily waived,
respectively.
ADMINISTRATION:
The Fund retains BISYS to serve as Administrator, Distributor and Sponsor.
BISYS 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, BISYS receives from the Fund a fee, payable
monthly, at the annual rate of 0.10% of the first $1 billion of the Fund's
average daily net assets; 0.08% of the next $1 billion of the Fund's average
daily net assets, and 0.07% of such assets in excess of $2 billion. For the
one month period ended October 31, 1998 and the year ended September 30,
1998, the administration fees were $86,095 and $767,296, respectively.
CUSTODY
The Custody function was transferred to Republic National Bank of New York
effective from December 1, 1997.
DISTRIBUTION PLAN:
The Trust 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 for amounts representing actual expenses
incurred by the Sponsor for marketing costs and services rendered in
distributing the Funds shares at a rate not to exceed 0.25% and 0.75% of the
average daily net assets of Class A Shares and Class B Shares of the Fund,
respectively.
SHAREHOLDER SERVICING PLANS:
The Trust has entered into a Shareholder Servicing agreement with its
Shareholder Servicing Agents (which currently consists of Republic and its
affiliates) for providing various shareholder services. The aggregate fees
paid to the Distributor pursuant to the Distribution Plan and to Shareholder
Servicing Agents pursuant to the Shareholder Servicing Agreement,
historically have not exceeded 0.25% and 1.00% per annum of the Fund's
average daily net assets of Class A Shares and Class B Shares, respectively.
For the one month period ended October 31, 1998 and the year ended September
30, 1998 the shareholder servicing fees were $208,918 and $1,856,804,
respectively.
4. CAPITAL SHARE TRANSACTIONS: All capital share transactions have been effected
at a value of $1.00 per share. Transactions in dollars and shares of
beneficial interest for the Fund were as follows:
<TABLE>
<CAPTION>
ONE MONTH PERIOD ENDED OCTOBER 31, 1998
--------------------------------------------------------------
CLASS A CLASS Y
(INVESTOR) SHARES CLASS B SHARES (ADVISER) SHARES
----------------- -------------- ----------------
<S> <C> <C> <C>
Shares issued ................................. 137,826,807 0 53,086,981
Shares reinvested ............................. 3,747,827 8 44,115
Shares redeemed ............................... (74,679,360) 0 (47,539,288)
----------- ------ ----------
Net increase .................................. 66,895,274 8 5,591,808
=========== ====== ==========
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1998
-------------------------------------------------------------
CLASS A CLASS Y
(INVESTOR) SHARES CLASS B SHARES (ADVISER) SHARES
----------------- -------------- ----------------
<S> <C> <C> <C>
Shares issued ................................. 2,040,187,992 112,952 542,310,179
Shares reinvested ............................. 32,415,205 0 544,713
Shares redeemed ............................... (1,589,996,582) (200) (530,009,014)
-------------- ------- ------------
Net increase .................................. 482,606,615 112,752 12,845,878
============== ======= ============
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1997
-------------------------------------------------------------
CLASS A CLASS Y
(INVESTOR) SHARES CLASS B SHARES (ADVISER) SHARES
----------------- -------------- ----------------
<S> <C> <C> <C>
Shares issued ................................. 1,275,373,473 0 212,976,550
Shares reinvested ............................. 14,323,724 0 292,842
Shares redeemed ............................... (1,030,486,243) 0 (198,505,634)
-------------- ------- ------------
Net increase .................................. 259,210,954 0 14,763,758
============== ======= ============
*The Fund first began offering Class B Shares on February 2, 1998.
</TABLE>
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS -- CLASS A (INVESTOR) SHARES
<TABLE>
<CAPTION>
ONE MONTH
PERIOD ENDED YEARS ENDED SEPTEMBER 30,
OCTOBER 31, -------------------------------------------------------------------------------
1998 1998 1997 1996 1995 1994
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE,
BEGINNING OF PERIOD .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income .. 0.004 0.048 0.048 0.049 0.052 0.035
Net realized gains on
investment transactions 0.000* 0.000* 0.000* -- -- --
------- ------- ------- ------- ------- -------
Total income from
investment operations .. 0.004 0.048 0.048 0.049 0.052 0.035
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends to shareholders
from net investment
income ............... (0.004) (0.048) (0.048) (0.049) (0.052) (0.035)
Distributions from
realized gains ....... 0.000 0.000* -- -- -- --
------- ------- ------- ------- ------- -------
Total dividends and
distributions .......... (0.004) (0.048) (0.048) (0.049) (0.052) (0.035)
------- ------- ------- ------- ------- -------
NET ASSET VALUE PER SHARE,
END OF PERIOD .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total return ............. 0.39%(b) 5.00% 4.89% 4.98% 5.27% 3.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of
year (000) ............. $1,055,163 $988,236 $505,702 $246,368 $113,218 $100,443
Ratio of expenses to
average net assets ... 0.50%(c) 0.52% 0.59% 0.57% 0.58% 0.24%
Ratio of net investment
income to average net
assets ............... 4.40%(c) 4.89% 4.80% 4.80% 5.17% 3.50%
Ratio of expenses to
average net assets (a) 0.60%(c) 0.62% 0.71% 0.75% 0.78% 0.67%
Ratio of net investment
income to average net
assets (a) ........... 4.30%(c) 4.79% 4.68% 4.62% 4.97% 3.08%
- ----------
(a) During the year, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratios would
have been as indicated.
(b) Not annualized.
(c) Annualized.
* Less than $0.001 per share.
See notes to financial statements.
</TABLE>
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS -- CLASS B SHARES
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 11, 1998
ONE MONTH (COMMENCEMENT
PERIOD ENDED OF OFFERING) TO
OCTOBER 31, SEPTEMBER 30,
1998 1998
------- -------
<S> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD .................. $ 1.00 $ 1.00
------- -------
Income from investment operations:
Net investment income ......................................... 0.003 0.002
Net realized gains on investment transactions ................. 0.000* 0.000
------- -------
Total income from investment operations ......................... 0.003 0.002
------- -------
Less dividends and distributions:
Dividends to shareholders from net investment income .......... (0.003) (0.002)
Distributions from realized gains ............................. 0.000 0.000
------- -------
Total dividends and distributions ............................... (0.003) (0.002)
------- -------
NET ASSET VALUE PER SHARE, END OF PERIOD ........................ $ 1.00 $ 1.00
======= =======
Total return .................................................... 0.32%(b) 0.22%(b)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of year (000) .............................. $ 113 $ 113
Ratio of expenses to average net assets ....................... 1.25%(c) 1.27%(c)
Ratio of net investment income to average net assets .......... 3.65%(c) 4.14%(c)
Ratio of expenses to average net assets (a) ................... 1.35%(c) 1.37%(c)
Ratio of net investment income to average net assets (a) ...... 3.55%(c) 4.04%(c)
- ----------
(a) During the year, certain fees were voluntarily reduced. If such voluntary fee reductions had not
occurred, the ratios would have been as indicated.
(b) Not annualized.
(c) Annualized.
* Less than $0.001 per share.
See notes to financial statements.
</TABLE>
<PAGE>
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS -- CLASS Y (ADVISER) SHARES
<TABLE>
<CAPTION>
FOR THE
PERIOD
JULY 1, 1996
ONE MONTH YEAR ENDED (COMMENCEMENT
PERIOD ENDED SEPTEMBER 30, OF OFFERING) TO
OCTOBER 31, ---------------------------- SEPTEMBER 30,
1998 1998 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING OF PERIOD ... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Income from investment operations:
Net investment income .......................... 0.004 0.058 0.050 0.012
Net realized gains on investment transactions .. 0.000 0.000* 0.000* --
------- ------- ------- -------
Total income from investment operations .......... 0.004 0.058 0.050 0.012
------- ------- ------- -------
Less dividends and distributions:
Dividends to shareholders from net investment
income ....................................... (0.004) (0.058) (0.050) (0.012)
Distributions from realized gains .............. 0.000 0.000* -- --
------- ------- ------- -------
Total dividends and distributions ................ (0.004) (0.058) (0.050) (0.012)
------- ------- ------- -------
NET ASSET VALUE PER SHARE, END OF PERIOD ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total return ..................................... 0.41%(c) 5.27% 5.15% 1.24%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of year (000) ............... $34,617 $29,023 $16,180 $ 1,413
Ratio of expenses to average net assets ........ 0.25%(b) 0.27% 0.33% 0.43%(b)
Ratio of net investment income to average net
assets ....................................... 4.65%(b) 5.14% 5.06% 4.90%(b)
Ratio of expenses to average net assets (a) .... 0.35%(b) 0.37% 0.45% 0.61%(b)
Ratio of net investment income to average net
assets (a) ................................... 4.55%(b) 5.04% 4.94% 4.72%(b)
- ----------
(a) During the year, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratios
would have been as indicated.
(b) Annualized.
(c) Not annualized.
* Less than $0.001 per share.
See notes to financial statements.
</TABLE>
<PAGE>
KPMG Peat Marwick LLP
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
Republic Funds:
We have audited the accompanying statements of net assets of the Republic U.S.
Government Money Market Fund (the "Fund") as of October 31, 1998 and September
30, 1998 and the related statements of operations for the one-month period
ended October 31, 1998 and the year ended September 30, 1998, statements of
changes in net assets for the one-month period ended October 31, 1998 and each
of the years in the two-year period ended September 30, 1998 and financial
highlights for the one-month period ended October 31, 1998 and each of the
years in the three-year period ended September 30, 1998 for Class A Shares
(Investor Shares), for the one-month-period ended October 31, 1998 and the
period from February 2, 1998 (date of initial offering) to September 30, 1998
for Class B Shares and for the one-month period ended October 31, 1998, each
of the years in the two-year period ended September 30, 1998 and the period
from July 1, 1996 (date of initial offering) to September 30, 1996 for Class Y
Shares (Adviser Shares). These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for each of the years in the
two-year period ended September 30, 1995 for Investor Shares were audited by
other auditors whose report thereon, dated November 10, 1995, expressed an
unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1998 and September 30, 1998
by correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Republic U.S. Government Money Market Fund, as of October 31, 1998 and
September 30, 1998, the results of its operations for the one-month period
ended October 31, 1998 and the year ended September 30, 1998, changes in its
net assets for the one-month period ended October 31, 1998 and each of the
years in the two-year period ended September 30, 1998 and financial highlights
for the years or periods indicated in the first paragraph above in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
November 20, 1998
<PAGE>
REPUBLIC
U.S. GOVERNMENT
MONEY MARKET
FUND
INVESTMENT ADVISER AND CUSTODIAN
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
ADMINISTRATOR, DISTRIBUTOR AND SPONSOR
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
(614) 470-8000
TRANSFER AGENT
Investors Bank & Trust Company
200 Clarendon Street 16th Floor
Boston, MA 02116
(800) 782-8183
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
99 High Street
Boston, MA 02110
LEGAL COUNSEL
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, D.C. 20006
REPUBLIC FAMILY OF FUNDS
CUSTOMER SERVICE
Republic National Bank of New York
Republic Bank for Savings
452 Fifth Avenue
New York, NY 10018
(800) 522-5214
FOR NON-REPUBLIC CLIENTS:
Investors Bank & Trust Company
200 Clarendon Street 16th Floor
Boston, MA 02116
(800) 782-8183 11/98
