<PAGE>
PIPER CASH
MANAGEMENT
FUNDS
1995
ANNUAL REPORT
<PAGE>
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
MONEY MARKET FUND
The fund's investment objective is to provide maximum current income consistent
with preservation of capital and maintenance of liquidity. To realize this
objective, the fund invests in a variety of high-quality money market
instruments such as high-grade domestic and U.S. dollar denominated foreign
commercial paper, repurchase agreements, obligations of domestic and foreign
banks (time deposits, certificates of deposit and bankers' acceptances), U.S.
government securities and short-term corporate obligations. The fund's Nasdaq
symbol is PJMXX.
Average Annualized Monthly Yield . . . 1
Letter to Shareholders . . . . . . . . 2
Investments in Securities. . . . . . . 9
Financial Statements and Notes . . . 26
Independent Auditor's Report . . . . 35
Federal Tax Information. . . . . . . 36
U.S. GOVERNMENT MONEY MARKET FUND
The fund's investment objective is to provide maximum current income consistent
with preservation of capital and maintenance of liquidity. To realize this
objective, the fund invests in securities that are issued or guaranteed as to
payment of principal and interest by the U.S. government, its agencies or
instrumentalities, and repurchase agreements backed by such securities. The U.S.
government securities held by the fund, not the fund's shares, are guaranteed as
to payment of principal and interest. The fund's Nasdaq symbol is PJGXX.
Average Annualized Monthly Yield . . . 1
Letter to Shareholders . . . . . . . . 4
Investments in Securities. . . . . . 18
Financial Statements and Notes . . . 26
Independent Auditor's Report . . . . 35
Federal Tax Information. . . . . . . 36
TAX-EXEMPT MONEY MARKET FUND
The fund's investment objective is to provide a high level of current income
exempt from federal income taxes consistent with preservation of capital and
maintenance of liquidity. To realize this objective, the fund invests primarily
in high-quality, tax-exempt securities with short-term maturities, including
municipal bonds, notes and commercial paper. The fund's Nasdaq symbol is PTMXX.
Average Annualized Monthly Yield . . . 1
Letter to Shareholders . . . . . . . . 6
Investments in Securities. . . . . . 22
Financial Statements and Notes . . . 26
Independent Auditor's Report . . . . 35
Federal Tax Information. . . . . . . 36
THIS REPORT IS INTENDED FOR SHAREHOLDERS OF MONEY MARKET FUND, U.S. GOVERNMENT
MONEY MARKET FUND AND TAX-EXEMPT MONEY MARKET FUND, BUT IT MAY ALSO BE USED AS
SALES LITERATURE IF PRECEDED OR ACCOMPANIED BY A PROSPECTUS. THE PROSPECTUS
GIVES DETAILS ABOUT THE CHARGES, INVESTMENT RESULTS, RISKS AND OPERATING
POLICIES OF THE FUNDS.
<PAGE>
AVERAGE ANNUALIZED MONTHLY YIELD
- -------------------------------------------------------------------------------
[GRAPH]
THIS CHART SHOWS THE AVERAGE ANNUALIZED MONTHLY YIELDS FOR MONEY MARKET FUND,
U.S. GOVERNMENT MONEY MARKET FUND AND TAX-EXEMPT MONEY MARKET FUND. THESE
AVERAGE YIELDS ARE CALCULATED USING THE 30-DAY CURRENT YIELD, NET OF FEES, AT
THE END OF EACH MONTH.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE RETURN OF YOUR
INVESTMENT WILL FLUCTUATE. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1 PER SHARE.
1
<PAGE>
MONEY MARKET FUND
- -------------------------------------------------------------------------------
November 15, 1995
Dear Shareholders:
DURING THE PAST YEAR, WE HAVE WITNESSED A VOLATILE INTEREST RATE ENVIRONMENT. In
response to economic reports indicating the U.S. economy had started to slow,
the Federal Reserve Board (Fed) lowered the federal funds rate from 6% to 5.75%
in July. This interest rate cut came just six months after the Fed raised the
federal funds rate for the seventh time in an effort to subdue inflation and
slow the economy's growth rate, which was well above the Fed's target of 2.5%.
Since July, the Fed has held the federal funds rate steady. In the past few
months, economic data has shown unexpected signs of strength in many sectors;
however, estimates for the remainder of the year have been for below average
growth. If this slow growth trend continues, we may experience a further decline
in interest rates during the remainder of the year.
SINCE WE LAST REPORTED TO YOU IN MARCH, MONEY MARKET FUND'S SEVEN-DAY CURRENT
YIELD HAS DROPPED FROM 5.28% ON MARCH 31 TO 4.87%* ON SEPTEMBER 30. This decline
reflects the lower interest rates brought about by the Fed easing in July.
During the year ended September 30, 1995, the asset size of Money Market Fund
increased 41%, growing from $1.2 billion to $1.7 billion. This compares to a
national increase of about 23% in the asset size of taxable money market funds.
We believe this increase is largely a result of 1994's volatile economic
environment which caused investors to move their money into more stable
investments, such as money market funds.
GIVEN THE FED'S RECENT ACTION, THE SLOWING ECONOMY AND OUR INTEREST RATE
OUTLOOK, we positioned the fund to benefit from an anticipated reduction in
short-term interest rates by lengthening the average weighted maturity of the
fund. During
[PHOTO]
FPO
65%
NANCY S. OLSEN, (ABOVE)
IS PRIMARILY RESPONSIBLE FOR THE MANAGEMENT OF MONEY MARKET FUND. SHE HAS 16
YEARS OF FINANCIAL EXPERIENCE.
SHAISTA B. TAJAMAL,
(PICTURED ON PAGE 4)
ASSISTS WITH THE MANAGEMENT OF MONEY MARKET FUND. SHE HAS FIVE YEARS OF
FINANCIAL EXPERIENCE.
* PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE RETURN OF YOUR
INVESTMENT WILL FLUCTUATE. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE
FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1 PER SHARE.
SINCE THE FUND'S INCEPTION, THE FUND'S DISTRIBUTOR VOLUNTARILY LIMITED 12B-
1 FEES. HAD THE LIMITATION NOT BEEN IN EFFECT, THE FUND'S YIELDS WOULD HAVE
BEEN 5.18% AND 4.89%, RESPECTIVELY.
2
<PAGE>
MONEY MARKET FUND
- -------------------------------------------------------------------------------
the second quarter of 1995, we increased the fund's average weighted maturity
from 31 days at the end of March to 51 days by the end of September. We attained
this longer average weighted maturity by buying longer-term (nine- to 13- month)
fixed rate securities. By focusing on longer maturity fixed rate securities, we
have been able to lock in higher yields for your assets. As of October 16, we
had extended the average weighted maturity of your Money Market Fund to 59 days.
In anticipation of stable to slightly lower short-term interest rates in the
next few months, we will continue to lengthen the fund's average weighted
maturity.
OUR PRIMARY CONCERN IN MANAGING THE FUND IS THE SAFETY OF YOUR PRINCIPAL. We
will continue to use a fundamental approach to identify high-quality, liquid
money market securities that provide competitive yields. Our strategy is
designed to add value by active positioning of the portfolio on the short end
(13 months or less) of the yield curve, investing in high-quality securities and
by managing the fund's average weighted maturity based on our interest rate
forecast.
Thank you for your investment in Money Market Fund. We look forward to meeting
your financial needs in the next year.
Sincerely,
/s/ Nancy S. Olsen
Nancy S. Olsen
Portfolio Manager
PORTFOLIO COMPOSITION
SEPTEMBER 30, 1995
[PIE GRAPH]
INVESTMENT CATEGORIES REFLECT PERCENTAGE OF INVESTMENTS IN SECURITIES.
3
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
- -------------------------------------------------------------------------------
November 15, 1995
Dear Shareholders:
WE HAVE EXPERIENCED A VOLATILE INTEREST RATE ENVIRONMENT DURING THE PAST YEAR.
In response to economic reports indicating the U.S. economy had started to slow,
the Federal Reserve Board (Fed) lowered the federal funds rate from 6% to 5.75%
in July. This interest rate cut came just six months after the Fed raised the
federal funds rate for the seventh time in an effort to subdue inflation and
slow the economy's growth rate, which was well above the Fed's target of 2.5%.
Since July, the Fed has held the federal funds rate steady. Economic data for
the third quarter ended September, showed unexpected signs of strength in many
sectors; however, fourth quarter estimates have been for below average growth.
If this slow growth trend continues, we may experience a further decline in
interest rates during the remainder of the year.
SINCE WE LAST REPORTED TO YOU, THE FUND'S SEVEN-DAY CURRENT YIELD DROPPED FROM
5.18% ON MARCH 31 TO 4.85%* ON SEPTEMBER 30. This drop reflects the lower
interest rates brought about by the Fed easing in July.
GIVEN THE FED'S RECENT ACTION, THE SLOWING ECONOMY AND OUR INTEREST RATE
OUTLOOK, we positioned the fund to benefit from an anticipated reduction in
short-term interest rates by lengthening the average weighted maturity of the
fund. During the second quarter in particular, we increased the fund's average
weighted maturity from 35 days at the end of March to 72 days by the end of
September. We attained this longer average weighted maturity by buying longer-
term (nine- to 13-month) fixed rate securities. As of October 16, we had
extended the fund's average weighted
[PHOTO]
SHAISTA B. TAJAMAL, (ABOVE)
ASSISTS WITH THE MANAGEMENT OF U.S. GOVERNMENT MONEY MARKET FUND. SHE HAS FIVE
YEARS OF FINANCIAL EXPERIENCE.
Nancy S. Olsen
(pictured on page 2)
IS PRIMARILY RESPONSIBLE FOR THE MANAGEMENT OF U.S. GOVERNMENT MONEY MARKET
FUND. SHE HAS 16 YEARS OF FINANCIAL EXPERIENCE.
* PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE RETURN OF YOUR
INVESTMENT WILL FLUCTUATE. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE
FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1 PER SHARE.
SINCE THE FUND'S INCEPTION, THE FUND'S DISTRIBUTOR VOLUNTARILY LIMITED 12b-
1 FEES. HAD THE LIMITATION NOT BEEN IN EFFECT, THE FUND'S YIELDS WOULD HAVE
BEEN 5.08% AND 4.75%, RESPECTIVELY.
4
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
- -------------------------------------------------------------------------------
maturity to 69 days. In anticipation of stable to slightly lower short-term
interest rates in the next few months, we will continue to lengthen the fund's
average weighted maturity.
OUR PRIMARY CONCERN IN MANAGING THE FUND CONTINUES TO BE THE SAFETY OF YOUR
PRINCIPAL. During the past year, all of the fund's investments were in
securities issued or guaranteed by the U.S. government and its agencies or
instrumentalities and repurchase agreements. We will continue to use a
fundamental approach to identify high-quality, liquid money market securities
that provide competitive yields. Our strategy is designed to add value by active
positioning of the portfolio on the yield curve, investing in high-quality
securities and by managing the fund's average weighted maturity based on our
interest rate forecast.
Thank you for your investment in U.S. Government Money Market Fund. It is our
pleasure to serve your financial needs, and we look forward to another
successful year in 1996.
Sincerely,
/s/ Nancy S. Olsen
Nancy S. Olsen
Portfolio Manager
PORTFOLIO COMPOSITION
SEPTEMBER 30, 1995
[PIE GRAPH]
INVESTMENT CATEGORIES REFLECT PERCENTAGE OF INVESTMENTS
IN SECURITIES.
5
<PAGE>
TAX-EXEMPT MONEY MARKET FUND
- -------------------------------------------------------------------------------
November 15, 1995
Dear Shareholders:
SINCE WE LAST REPORTED TO YOU IN MARCH, TAX-EXEMPT MONEY MARKET FUND'S YIELD HAS
REMAINED FAIRLY STABLE. The fund's seven-day current yield dropped from 3.16% on
March 31 to 3.08%* on September 30. This slight decline was a result of the
Federal Reserve Board's (Fed) move to ease credit by lowering the federal funds
rate from 6% to 5.75% in July and an increase in demand for short-term tax-
exempt securities. For investors in the 36% federal tax bracket, the September
30 tax-exempt yield translates to an equivalent taxable yield of 4.81%.
IN THE PAST SEVERAL MONTHS, THE ASSETS IN THE FUND HAVE INCREASED BY 7%,
COMPARED TO 4.3% NATIONALLY. The primary reason for this increase in short-term,
tax-exempt money market assets is the lingering concern over tax reform and its
potentially negative impact on the value of longer maturity municipal bonds. As
a result, many investors are moving their money out of longer-term municipal
investments into shorter-term holdings until the tax reform issue is resolved.
We believe this trend will continue until fears over tax reform diminish.
ECONOMIC SIGNS DURING THE SECOND QUARTER OF 1995 INDICATED THE ECONOMY WAS
SLOWING. Therefore, in anticipation of lower interest rates that typically
follow this type of environment, we
[PHOTOS]
DOUGLAS J. WHITE, CFA
IS PRIMARILY RESPONSIBLE FOR THE MANAGEMENT OF TAX-EXEMPT MONEY MARKET FUND. HE
HAS 12 YEARS OF FINANCIAL EXPERIENCE.
CATHERINE STIENSTRA
ASSISTS WITH THE MANAGEMENT OF TAX-EXEMPT MONEY MARKET FUND. SHE HAS FOUR YEARS
OF FINANCIAL EXPERIENCE.
* PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE RETURN OF YOUR
INVESTMENT WILL FLUCTUATE. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE
FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1 PER SHARE.
SINCE THE FUND'S INCEPTION, THE FUND'S DISTRIBUTOR VOLUNTARILY LIMITED
12b-1 FEES. HAD THE LIMITATION NOT BEEN IN EFFECT, THE FUND'S YIELDS WOULD
HAVE BEEN 3.06% AND 2.98%, RESPECTIVELY.
6
<PAGE>
TAX-EXEMPT MONEY MARKET FUND
- -------------------------------------------------------------------------------
lengthened the average weighted maturity of the fund by investing in longer-
term, fixed rate municipal securities. As of September 30, the fund's average
weighted maturity was 54 days, which compares to 34 days on December 31, 1994.
These high-quality, fixed rate municipal securities account for 50% of total
assets as of September 30. Because we expect the new issuance of these municipal
securities -- specifically municipal notes -- will fall from current levels in
the fourth quarter and because demand for these securities is increasing, we
believe they will perform well over the next year.
IN RECENT MONTHS WE HAVE WITNESSED A FLATTENING OF THE SHORT-TERM, TAX-EXEMPT
YIELD CURVE, WHICH MEANS THERE IS LITTLE DIFFERENCE BETWEEN YIELDS ON SHORT-TERM
VARIABLE RATE DEMAND OBLIGATIONS AND THOSE ON LONGER-TERM FIXED RATE MUNICIPAL
NOTES. In this environment, it may not appear rewarding to continue to extend
the average weighted maturity of the fund; however, we believe the yields we
lock in today could potentially protect the fund's
PORTFOLIO COMPOSITION
SEPTEMBER 30, 1995
[PIE GRAPH]
INVESTMENT CATEGORIES REFLECT PERCENTAGE OF INVESTMENTS
IN SECURITIES.
7
<PAGE>
TAX-EXEMPT MONEY MARKET FUND
- -------------------------------------------------------------------------------
yield for a longer period of time from further easing by the Fed. Therefore, we
may continue to lengthen the fund's average weighted maturity until we see signs
that the Fed is done easing credit.
Thank you for your investment in Tax-Exempt Money Market Fund. We remain
committed to providing you with quality service and look forward to helping
you reach your financial goals.
Sincerely,
/s/ Douglas J. White
Douglas J. White
Portfolio Manager
8
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
U.S. GOVERNMENT AND AGENCY SECURITIES (8.8%):
FEDERAL FARM CREDIT COUPON NOTES (0.4%):
6.56%, 11/14/95 ..................................... $ 7,000,000 6,998,300
-------------
FEDERAL FARM CREDIT FLOATING RATE NOTES (B) (1.0%):
5.83%, 5/24/96 ........................................ 17,840,000 17,832,094
-------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (B) (0.8%):
5.20%, 3/8/96 ......................................... 13,200,000 13,191,602
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION DISCOUNT NOTES (1.0%):
5.70%, 10/2/95 ........................................ 10,000,000 9,998,417
5.60%, 11/6/95 ........................................ 7,000,000 6,960,800
-------------
16,959,217
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION COUPON NOTES (0.3%):
5.66%, 3/15/96 ........................................ 5,000,000 5,000,356
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES (1.4%):
5.88%, 11/13/95 ....................................... 9,000,000 8,936,790
5.63%, 1/29/96 ........................................ 15,000,000 14,725,500
-------------
23,662,290
-------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE NOTES (B) (3.9%):
6.08%, 7/1/96 ......................................... 15,000,000 15,000,000
5.64%, 11/20/97 ....................................... 10,000,000 10,009,470
5.51%, 4/16/96 ........................................ 5,500,000 5,502,096
6.13%, 6/30/97 ........................................ 15,000,000 14,989,086
5.50%, 12/20/96 ....................................... 20,000,000 20,000,000
-------------
65,500,652
-------------
Total U.S. Government and Agency Securities
(cost: $149,144,511) ............................... 149,144,511
-------------
OTHER U.S. GOVERNMENT AGENCY-BACKED (1.8%):
Downey Savings and Loan Association Discount Notes, LOC
Federal Home Loan Bank, 6.08%, 10/2/95 ............... 16,115,000 16,112,278
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
9
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
Fidelity Federal Bank, LOC Federal Home Loan Bank,
5.70%, 11/30/95 .................................... $ 15,000,000 14,857,500
-------------
Total Other U.S. Government Agency-Backed
(cost: $30,969,778) ................................ 30,969,778
-------------
CERTIFICATES OF DEPOSIT - EURODOLLAR (0.9%):
Morgan Guaranty, 5.76%, 1/22/96
(cost: $15,000,915) ................................. 15,000,000 15,000,915
-------------
CERTIFICATES OF DEPOSIT - YANKEE (2.6%):
Bayerische Landesbank, 6.08%, 7/5/96 .................. 18,000,000 17,973,886
Credit Suisse, 6.28%, 10/13/95 ........................ 15,000,000 15,002,321
Deutsche Bank, 6.07%, 9/13/96 ......................... 11,000,000 11,000,000
-------------
Total Certificates Of Deposit - Yankee
(cost: $43,976,207) ................................ 43,976,207
-------------
COMMERCIAL PAPER (82.8%):
AERODEFENSE/ELECTRONICS (0.2%):
Rockwell International Corporation, 5.75%, 11/13/95 ... 3,700,000(c) 3,674,588
-------------
AUTOMOBILES (1.0%):
Daimler Benz N.A., 5.88%, 2/12/96 ..................... 8,000,000 7,824,907
Daimler Benz N.A., 5.90%, 11/13/95 .................... 10,000,000 9,929,527
-------------
17,754,434
-------------
BUSINESS CREDIT INSTITUTIONS (8.6%):
American Express Credit Corporation, 5.60%, 2/8/96 .... 20,000,000 19,595,556
Ameritech Capital Funding, 5.68%, 1/16/96 ............. 10,000,000(c) 9,831,178
Ameritech Capital Funding, 5.60%, 1/19/96 ............. 9,650,000(c) 9,484,878
BTR Dunlop Finance, 5.71%, 11/17/95 ................... 5,762,000(c) 5,719,046
BTR Dunlop Finance, 5.63%, 12/15/95 ................... 10,149,000(c) 10,029,961
Ford Motor Credit, 5.70%, 10/10/95 .................... 4,734,000 4,727,254
Ford Motor Credit, 5.70%, 10/13/95 .................... 17,000,000 16,967,700
General Electric Capital, 5.71%, 10/6/95 .............. 20,000,000 19,984,139
Mobil Austrailia Financial Corporation, 5.68%,
10/26/95 ............................................. 5,025,000(c) 5,005,179
Pitney Bowes Credit, 5.67%, 11/10/95 .................. 8,000,000 7,949,600
Pitney Bowes Credit, 5.67%, 12/1/95 ................... 9,850,000 9,755,366
Southwestern Bell Capital Corporation, 5.72%,
10/17/95 ............................................. 5,000,000(c) 4,987,289
Southwestern Bell Capital Corporation, 5.77%,
10/25/95 ............................................. 4,800,000(c) 4,781,536
Toyota Motor Credit Corporation, 5.73%, 10/10/95 ...... 8,773,000 8,760,433
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
10
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
Toyota Motor Credit Corporation, 5.68%, 10/13/95 .... $ 10,000,000 9,981,065
-------------
147,560,180
-------------
CONSUMER ELECTRONICS (1.9%):
TDK USA Corporation, 5.73%, 10/17/95 .................. 14,250,000 14,213,710
Toshiba America Inc., 5.70%, 11/17/95 ................. 9,090,000 9,022,355
Toshiba America Inc., 5.70%, 11/20/95 ................. 10,000,000 9,920,834
-------------
33,156,899
-------------
CONSUMER HEALTH (1.8%):
Allergan Inc., 5.72%, 10/27/95 ........................ 10,000,000 9,958,689
Allergan Inc., 5.62%, 12/12/95 ........................ 7,475,000 7,390,981
Becton Dickinson & Company, 5.71%, 10/18/95 ........... 14,000,000(c) 13,962,250
-------------
31,311,920
-------------
CONSUMER NON-DURABLES (0.9%):
Toys 'R' Us, 5.70%, 10/26/95 .......................... 15,000,000 14,940,625
-------------
DEPARTMENT STORES (1.1%):
Wal-Mart Stores Inc., 5.70%, 10/23/95 ................. 3,500,000 3,487,808
Wal-Mart Stores Inc., 5.70%, 11/2/95 .................. 15,470,000 15,391,619
-------------
18,879,427
-------------
DIVERSIFIED CHEMICALS (3.7%):
Akzo Nobel Inc., 5.67%, 11/13/95 ...................... 5,000,000 4,966,138
Akzo Nobel Inc., 5.61%, 12/13/95 ...................... 8,250,000 8,156,149
DuPont E.I. DeNemours & Company, 6.05%, 10/12/95 ...... 15,000,000(c) 14,972,271
DuPont E.I. DeNemours & Company, 5.67%, 10/27/95 ...... 20,000,000 19,918,100
U.S. Borax Inc., 5.67%, 11/16/95 ...................... 15,000,000(c) 14,891,325
-------------
62,903,983
-------------
ELECTRIC UTILITIES (3.9%):
Central Louisiana Electric Company, 5.67%, 11/14/95 ... 7,000,000 6,951,490
Commed Fuel Company, LOC CIBC, 5.73%, 10/13/95 ........ 4,549,000 4,540,311
Commed Fuel Company, LOC Credit Suisse, 5.80%,
11/9/95 .............................................. 8,907,000 8,851,034
Electricity Corporation of New Zealand, 5.72%,
10/30/95 ............................................. 12,900,000 12,840,560
Electricity Corporation of New Zealand, 5.72%,
10/31/95 ............................................. 3,420,000 3,403,698
National Rural Utilities Cooperative Services
Corporation, 5.72%, 11/17/95 ......................... 12,000,000 11,910,387
National Rural Utilities Cooperative Services
Corporation, 5.71%, 10/6/95 .......................... 7,102,000 7,096,368
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
11
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
Wisconsin Electric Power Company, 5.72%, 10/16/95 ... $ 10,000,000 9,976,168
-------------
65,570,014
-------------
ELECTRIC AND GAS UTILITIES (0.7%):
Florida Power & Light, 5.68%, 11/2/95 ................. 6,000,000 5,969,707
South Carolina Electric & Gas, 5.73%, 10/24/95 ........ 5,785,000(c) 5,763,822
-------------
11,733,529
-------------
ELECTRICAL EQUIPMENT (1.1%):
Hitachi America Ltd., 6.00%, 10/18/95 ................. 1,300,000 1,296,317
Hitachi America Ltd., 5.76%, 1/30/96 .................. 3,350,000 3,285,144
Hitachi America Ltd., 5.67%, 12/5/95 .................. 14,500,000 14,351,556
-------------
18,933,017
-------------
FINANCIAL AND REAL ESTATE INSTITUTIONS (12.4%):
75 State Street Capital Corporation, LOC Banque
Paribas, 5.74%, 10/23/95 ............................. 11,439,000 11,398,875
Banco Real S.A. Grand Cayman, LOC Barclay's Bank,
6.11%, 10/11/95 ...................................... 7,549,000 7,536,188
Bass Finance Ltd., 5.75%, 11/30/95 .................... 18,000,000 17,827,500
Caisse des Depots et Consignations, 5.70%, 11/1/95 .... 20,000,000(c) 19,901,833
Eksportfinans A/S, 5.78%, 10/26/95 .................... 8,350,000 8,316,513
Eksportfinans A/S, 5.75%, 12/11/95 .................... 4,420,000 4,369,876
Eksportfinans A/S, 5.93%, 12/22/95 .................... 3,400,000 3,354,075
Enterprise Capital Funding, LOC Swiss Bank, 5.77%,
10/27/95 ............................................. 16,900,000(c) 16,829,574
Hahn Issuing Corporation, LOC CIBC, 5.75%, 10/4/95 .... 10,000,000 9,995,208
New South Wales Treasury Corporation, 5.70%,
11/20/95 ............................................. 10,000,000 9,920,833
New South Wales Treasury Corporation, 5.61%,
12/21/95 ............................................. 10,000,000 9,873,775
Prudential Funding, 5.72%, 10/10/95 ................... 14,999,000 14,977,551
River Fuel Funding #3, LOC UBS, 5.74%, 10/13/95 ....... 7,000,000(c) 6,986,607
Student Loan Corporation, 5.71%, 11/3/95 .............. 16,560,000 16,473,322
Sunkyong America Inc., LOC Credit Suisse, 5.68%,
11/27/95 ............................................. 6,000,000 5,946,040
Sunkyong America Inc., LOC Credit Suisse, 5.69%,
12/4/95 .............................................. 4,170,000 4,127,818
USAA Capital Corporation, 5.70%, 10/26/95 ............. 18,000,000 17,928,750
Western Australia Treasury Corporation, 5.73%,
10/5/95 .............................................. 9,500,000 9,493,952
Western Australia Treasury Corporation, 5.67%,
12/28/95 ............................................. 10,000,000 9,861,400
Weyerhauser Mortgage Company, 5.72%, 10/5/95 .......... 6,478,000 6,473,884
-------------
211,593,574
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
12
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
FOOD AND BEVERAGE PRODUCTS (5.6%):
Allied Domecq N.A., 5.74%, 10/5/95 .................. $ 4,500,000 4,497,130
Campbell's Soup, 5.72%, 10/20/95 ...................... 5,000,000 4,984,906
Campbell's Soup, 5.67%, 12/6/95 ....................... 15,000,000(c) 14,844,075
Canadian Wheat Board, 5.67%, 10/12/95 ................. 10,000,000 9,982,675
CPC International, 5.66%, 11/14/95 .................... 9,250,000(c) 9,186,011
General Mills, 5.76%, 10/31/95 ........................ 9,600,000 9,553,920
Golden Peanut Company, 5.75%, 10/3/95 ................. 10,150,000 10,146,758
Pepsico Inc., 5.47%, 4/8/96 ........................... 7,900,000 7,671,931
Pepsico Inc., 5.68%, 11/2/95 .......................... 10,000,000 9,949,511
Sysco Corporation, 5.70%, 10/5/95 ..................... 9,000,000(c) 8,994,300
Sysco Corporation, 5.70%, 10/6/95 ..................... 5,000,000(c) 4,996,041
-------------
94,807,258
-------------
FULL LINE INSURANCE (1.2%):
International Nederlanden U.S. Insurance Holdings Inc.,
5.68%, 11/10/95 ...................................... 15,000,000 14,905,333
International Nederlanden U.S. Insurance Holdings Inc.,
5.68%, 12/11/95 ...................................... 5,000,000 4,943,989
-------------
19,849,322
-------------
GAS UTILITIES (0.3%):
Questar Corporation, 5.75%, 10/5/95 ................... 5,000,000 4,996,806
-------------
HOTELS AND MOTELS (1.2%):
Accor S.A., LOC Banque de Paris, 5.70%, 11/3/95 ....... 20,000,000 19,895,593
-------------
INDUSTRIAL CONGLOMERATE (0.8%):
Sandoz Corporation, 5.65%, 11/14/95 ................... 5,000,000 4,965,472
Sandoz Corporation, 5.67%, 11/29/95 ................... 9,000,000 8,916,368
-------------
13,881,840
-------------
INDUSTRIAL EQUIPMENT (1.0%):
Vermont American Corporation, 5.70%, 10/11/95 ......... 10,700,000(c) 10,683,058
Vermont American Corporation, 5.70%, 10/25/95 ......... 7,000,000(c) 6,973,400
-------------
17,656,458
-------------
MONEY CENTER BANKS (15.9%):
Abbey National North America, 5.66%, 12/7/95 .......... 20,000,000 19,789,322
ABN/AMRO N.A. Finance, 5.57%, 2/5/96 .................. 12,000,000 11,764,203
ABN/AMRO N.A. Finance, 5.67%, 11/3/95 ................. 8,000,000 7,958,420
Banc One, 5.64%, 12/12/95 ............................. 18,500,000 18,291,320
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
13
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
Bank of Nova Scotia, 5.65%, 10/19/95 ................ $ 13,000,000 12,963,275
Commerzbank U.S. Finance, 5.73%, 10/10/95 ............. 8,800,000 8,787,394
Commerzbank U.S. Finance, 5.71%, 10/25/95 ............. 7,200,000 7,172,592
Commonwealth Bank of Australia, 5.70%, 11/21/95 ....... 20,000,000 19,838,500
Credit Agricole USA, 5.69%, 11/15/95 .................. 14,500,000 14,396,869
Den Danske Corporation, 5.70%, 12/18/95 ............... 16,500,000 16,296,225
Deutsche Bank Financial, 5.69%, 10/25/95 .............. 13,000,000 12,950,687
Dresdner U.S. Finance, 5.72%, 10/2/95 ................. 20,000,000 19,996,822
Generale Bank, 5.65%, 10/16/95 ........................ 10,000,000 9,976,458
Generale Bank, 5.67%, 12/13/95 ........................ 9,300,000 9,193,073
Kredietbank N.A. Finance Corporation, 5.68%,
2/13/96 .............................................. 14,000,000 13,701,800
National Australia Funding (De) Inc., 5.71%,
10/23/95 ............................................. 8,505,000 8,475,322
Royal Bank of Canada, 6.15%, 12/29/95 ................. 12,000,000 11,817,550
SBNSW (De) Inc., 5.67%, 11/14/95 ...................... 9,250,000 9,185,898
Societe Generale Canada, 5.65%, 11/27/95 .............. 5,000,000 4,955,271
Societe Generale N.A., 5.55%, 3/8/96 .................. 13,400,000 13,071,533
Toronto Dominion Holdings, 5.65%, 11/14/95 ............ 20,000,000 19,861,888
-------------
270,444,422
-------------
OIL INTEGRATED INTERNATIONAL (4.1%):
Arco Coal Australia Inc., 5.71%, 10/24/95 ............. 11,345,000 11,303,613
Arco Coal Australia Inc., 5.68%, 12/5/95 .............. 13,889,000(c) 13,746,561
Mobil Oil Corporation, 5.73%, 10/3/95 ................. 9,005,000(c) 9,002,133
Repsol International Finance, 6.12%, 10/3/95 .......... 15,000,000 14,994,900
Shell Oil Company, 5.68%, 10/31/95 .................... 20,000,000 19,905,333
-------------
68,952,540
-------------
OIL REFINING AND EXPLORATION (0.7%):
Koch Industries, 5.72%, 10/10/95 ...................... 12,250,000(c) 12,232,483
-------------
PHARMACEUTICALS (2.3%):
Amgen Inc., 5.76%, 10/13/95 ........................... 9,900,000 9,880,992
Pfizer Inc., 5.69%, 10/23/95 .......................... 10,000,000(c) 9,965,228
Smith Kline Beecham Corp., 5.70%, 10/20/95 ............ 19,000,000 18,942,841
-------------
38,789,061
-------------
PRINT MEDIA/PUBLISHING (1.6%):
Pearson Inc., 5.75%, 10/5/95 .......................... 11,000,000 10,992,972
Pearson Inc., 5.73%, 10/18/95 ......................... 6,500,000 6,482,412
R.R. Donnelley & Sons Company, 5.73%, 10/10/95 ........ 10,150,000(c) 10,135,460
-------------
27,610,844
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
14
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
REGIONAL BANKS (1.4%):
Norwest Corporation, 5.70%, 10/23/95 ................ $ 15,000,000 14,947,750
Norwest Corporation, 5.63%, 12/22/95 .................. 8,285,000 8,178,754
-------------
23,126,504
-------------
SECURITIES BROKER (3.4%):
CS First Boston, 5.76%, 10/6/95 ....................... 6,956,000 6,950,435
CS First Boston, 5.73%, 10/20/95 ...................... 13,740,000(c) 13,698,448
Goldman Sachs Group L.P., 5.65%, 12/19/95 ............. 15,000,000 14,814,024
Merrill Lynch & Company, 5.84%, 1/26/96 ............... 15,000,000(b) 15,000,000
Merrill Lynch & Company, 5.67%, 12/5/95 ............... 7,000,000 6,928,338
-------------
57,391,245
-------------
SEMICONDUCTORS/ELECTRONICS (1.2%):
Motorola, 5.80%, 11/9/95 .............................. 20,000,000 19,874,333
-------------
SOVEREIGN CREDITS (1.1%):
Province of Quebec, 5.95%, 11/15/95 ................... 12,000,000 11,910,750
Province of Quebec, 5.65%, 12/6/95 .................... 6,040,000 5,977,436
-------------
17,888,186
-------------
TELECOMMUNICATIONS (2.0%):
AT&T, 5.65%, 10/2/95 .................................. 14,490,000 14,487,726
Bell South Telecommunications, 5.70%, 10/5/95 ......... 6,987,000 6,982,575
Bell South Telecommunications, 6.06%, 10/10/95 ........ 5,500,000 5,491,668
British Telecommunications PLC, 5.68%, 11/30/95 ....... 7,147,000 7,079,341
-------------
34,041,310
-------------
TEXTILES/APPAREL (0.6%):
Wool International, 5.60%, 2/2/96 ..................... 10,000,000 9,807,111
-------------
TIRES/AUTO PARTS (0.9%):
Nippondenso America, 5.73%, 12/20/95 .................. 16,000,000 15,798,813
-------------
TRADING COMPANIES (0.2%):
Mitsubishi International Inc., 6.85%, 10/2/95 ......... 4,056,000 4,055,228
-------------
Total Commercial Paper
(cost: $1,409,111,547) ............................. 1,409,111,547
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
15
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -------------
<S> <C> <C>
REPURCHASE AGREEMENTS (4.1%):
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 8/2/95, accrued interest at
repurchase date of $201,250, 5.75%, 10/4/95 ........ $ 20,000,000(d) 20,000,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/12/95, accrued interest at
repurchase date of $69,238, 5.73%, 10/11/95 .......... 15,000,000(d)(e) 15,000,000
Repurchase agreement with Morgan Stanley in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/22/95, accrued interest at
repurchase date of $27,858, 5.78%, 10/4/95 ........... 14,459,000(d) 14,459,000
Repurchase agreement with Morgan Stanley in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/26/95, accrued interest at
repurchase date of $11,297, 5.81%, 10/3/95 ........... 10,000,000(d) 10,000,000
Repurchase agreement with Morgan Stanley in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/26/95, accrued interest at
repurchase date of $12,911, 5.81%, 10/4/95 ........... 10,000,000(d) 10,000,000
-------------
Total Repurchase Agreements
(cost: $69,459,000) ................................ 69,459,000
-------------
Total Investments in Securities (101.0%)
(cost: $1,717,661,958) (f) ......................... 1,717,661,958
-------------
Liabilities in excess of other assets (-1.0%) ....... (14,949,287)
-------------
Net assets (100.0%) ................................ $ 1,702,712,671
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
16
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) INTEREST RATE VARIES TO REFLECT CURRENT MARKET CONDITIONS; RATE SHOWN IS
THE EFFECTIVE RATE ON SEPTEMBER 30, 1995. THE MATURITY DATE SHOWN
REPRESENTS FINAL MATURITY. HOWEVER, FOR U.S. GOVERNMENT AND AGENCY
SECURITIES, FOR PURPOSES OF RULE 2A-7, THE MATURITY DATE USED IS THE NEXT
INTEREST RATE RESET DATE.
(C) SECURITIES SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM ARE EXEMPT
FROM REGISTRATION UNDER SECTION 4(2) AND UNDER RULE 144A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR
OTHER "ACCREDITED INVESTORS." SECURITIES ARE TREATED AS LIQUID AFTER HAVING
BEEN DETERMINED TO BE LIQUID BY THE BOARD OF DIRECTORS.
(D) TRI-PARTY REPURCHASE AGREEMENTS REPRESENT AGREEMENTS WHERE UNINVESTED CASH
BALANCES ARE TRANSFERRED TO AN INDEPENDENT THIRD-PARTY CUSTODIAN (BANK OF
NEW YORK) AND THE COLLATERAL PLEDGED BY THE COUNTERPARTY TO THE AGREEMENT
IS HELD AT THE SAME THIRD-PARTY CUSTODIAN FOR THE BENEFIT OF THE FUND.
(E) REPURCHASE AGREEMENTS WITH GREATER THAN SEVEN DAYS TO MATURITY ARE
CONSIDERED ILLIQUID. THE AGGREGATE VALUE OF SUCH REPURCHASE AGREEMENTS
REPRESENTS 0.9% OF NET ASSETS.
(F) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
17
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
US GOVERNMENT MONEY MARKET FUND
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
U.S. GOVERNMENT AND AGENCY SECURITIES (63.0%):
FEDERAL FARM CREDIT BANK DISCOUNT NOTES (4.6%):
5.60%, 11/17/95 ..................................... $ 3,000,000 2,978,067
5.65%, 11/28/95 ....................................... 5,000,000 4,954,486
5.65%, 11/29/95 ....................................... 2,000,000 1,981,481
5.59%, 1/3/96 ......................................... 2,000,000 1,970,808
-----------
11,884,842
-----------
FEDERAL FARM CREDIT FLOATING RATE NOTES (B) (2.3%):
5.83%, 5/24/96 ........................................ 6,000,000 5,997,341
-----------
FEDERAL HOME LOAN BANK DISCOUNT NOTES (3.6%):
5.50%, 2/2/96 ......................................... 5,000,000 4,905,278
5.45%, 3/1/96 ......................................... 4,435,000 4,332,946
-----------
9,238,224
-----------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (B) (1.9%):
5.52%, 3/8/96 ......................................... 5,000,000 4,996,819
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION DISCOUNT NOTES (18.2%):
5.70%, 10/2/95 ........................................ 3,000,000 2,999,525
5.69%, 10/12/95 ....................................... 3,100,000 3,094,610
5.64%, 10/23/95 ....................................... 3,000,000 2,989,660
5.60%, 11/6/95 ........................................ 10,000,000 9,944,000
5.81%, 11/9/95 ........................................ 5,000,000 4,968,529
5.58%, 11/30/95 ....................................... 4,000,000 3,962,800
5.59%, 12/1/95 ........................................ 2,580,000 2,555,562
5.58%, 12/5/95 ........................................ 3,000,000 2,969,775
5.51%, 1/19/96 ........................................ 5,000,000 4,915,819
5.59%, 2/15/96 ........................................ 2,325,000 2,275,540
5.49%, 12/18/95 ....................................... 6,000,000 5,928,630
-----------
46,604,451
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION COUPON NOTES (2.0%):
5.66%, 3/15/96 ........................................ 5,000,000 5,000,356
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES (20.0%):
5.70%, 10/11/95 ....................................... 4,000,000 3,993,667
5.90%, 10/13/95 ....................................... 4,000,000 3,992,133
5.88%, 11/13/95 ....................................... 6,000,000 5,957,860
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
18
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
US GOVERNMENT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
5.56%, 11/17/95 ..................................... $ 3,600,000 3,573,868
5.62%, 11/22/95 ....................................... 5,000,000 4,959,411
5.50%, 12/8/95 ........................................ 4,900,000 4,849,094
5.61%, 12/12/95 ....................................... 4,155,000 4,108,381
5.53%, 12/22/95 ....................................... 2,570,000 2,537,628
5.53%, 12/27/95 ....................................... 5,000,000 4,933,179
5.63%, 1/29/96 ........................................ 5,000,000 4,908,500
5.49%, 2/28/96 ........................................ 5,500,000 5,374,188
5.54%, 11/17/95 ....................................... 2,000,000 1,985,534
-----------
51,173,443
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION FLOATING RATE
NOTES (B) (2.7%):
5.81%, 10/4/96 ........................................ 7,000,000 7,000,000
-----------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE
NOTES (B) (7.7%):
6.08%, 7/1/96 ......................................... 3,300,000 3,300,126
5.40%, 11/24/97 ....................................... 7,400,000 7,400,000
6.13%, 6/30/97 ........................................ 4,000,000 3,997,089
5.50%, 12/20/96 ....................................... 5,000,000 5,000,000
-----------
19,697,215
-----------
Total U.S. Government and Agency Securities
(cost: $161,592,691) ............................... 161,592,691
-----------
OTHER GOVERNMENT AGENCIES (9.0%):
Downey Savings and Loan Association Discount Notes, LOC
Federal Home Loan Bank, 5.50%, 1/16/96 ............... 1,800,000 1,770,575
Downey Savings and Loan Association Discount Notes, LOC
Federal Home Loan Bank, 5.55%, 3/1/96 ................ 5,000,000 4,882,833
Downey Savings and Loan Association Discount Notes, LOC
Federal Home Loan Bank, 6.08%, 10/2/95 ............... 3,000,000 2,999,493
Downey Savings and Loan Association Discount Notes, LOC
Federal Home Loan Bank, 6.00%, 10/17/95 .............. 1,495,000 1,491,014
Fidelity Federal Bank, LOC Federal Home Loan Bank,
5.70%, 11/30/95 ...................................... 12,000,000 11,886,000
-----------
Total Other Government Agencies
(cost: $23,029,915) ................................ 23,029,915
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
19
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
US GOVERNMENT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENTS (30.7%):
Repurchase agreement with Goldman Sachs in a joint
trading account, collateralized by U.S. government
acency securities, acquired on 9/29/95, accrued
interest at repurchase date of $9,013, 6.44%,
10/2/95 ............................................ $ 16,795,000 16,795,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 8/3/95, accrued interest at
repurchase date of $23,383, 5.75%, 10/3/95 ........... 2,400,000(c) 2,400,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 8/4/95, accrued interest at
repurchase date of $49,514, 5.75%, 10/5/95 ........... 5,000,000(c) 5,000,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/13/95, accrued interest at
repurchase date of $72,961, 5.71%, 12/14/95 .......... 5,000,000(c)(d) 5,000,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/18/95, accrued interest at
repurchase date of $71,663, 5.67%, 12/18/95 .......... 5,000,000(c)(d) 5,000,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/27/95, accrued interest at
repurchase date of $34,953, 5.73%, 11/27/95 .......... 3,600,000(c)(d) 3,600,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/28/95, accured interest at
repurchase date of $38,837, 5.73%, 11/28/95 .......... 4,000,000(c)(d) 4,000,000
Repurchase agreement with Goldman Sachs in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/8/95, accrued interest at
repurchase date of $66,967, 5.74%, 11/7/95 ........... 7,000,000(c)(d) 7,000,000
Repurchase agreement with Morgan Stanley in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/26/95, accrued interest at
repurchase date of $16,946, 5.81%, 10/3/95 ........... 15,000,000(c) 15,000,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
20
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
US GOVERNMENT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
Repurchase agreement with Morgan Stanley in a tri-party
agreement, collateralized by U.S. government agency
securities, acquired on 9/28/95, accrued interest at
repurchase date of $14,675, 5.87%, 10/4/95 ......... $ 15,000,000(c) 15,000,000
-----------
Total Repurchase Agreements
(cost: $78,795,000) ................................ 78,795,000
-----------
Total Investments in Securities (102.7%)
(cost: $263,417,606) (e) ........................... 263,417,606
-----------
Liabilities in excess of other assets (-2.7%) ....... (6,970,459)
-----------
Net assets (100.0%) ................................ $ 256,447,147
-----------
-----------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) INTEREST RATE VARIES TO REFLECT CURRENT MARKET CONDITIONS; RATE SHOWN IS
THE EFFECTIVE RATE ON SEPTEMBER 30, 1995. THE MATURITY DATE SHOWN
REPRESENTS FINAL MATURITY. HOWEVER, FOR PURPOSES OF RULE 2A-7, THE MATURITY
DATE USED IS THE NEXT INTEREST RATE RESET DATE.
(C) TRI-PARTY REPURCHASE AGREEMENTS REPRESENT AGREEMENTS WHERE UNINVESTED CASH
BALANCES ARE TRANSFERRED TO AN INDEPENDENT THIRD-PARTY CUSTODIAN (BANK OF
NEW YORK) AND THE COLLATERAL PLEDGED BY THE COUNTERPARTY TO THE AGREEMENT
IS HELD AT THE SAME THIRD-PARTY CUSTODIAN FOR THE BENEFIT OF THE FUND.
(D) REPURCHASE AGREEMENTS WITH GREATER THAN SEVEN DAYS TO MATURITY ARE
CONSIDERED ILLIQUID. THE AGGREGATE VALUE OF SUCH REPURCHASE AGREEMENTS
REPRESENTS 9.6% OF NET ASSETS.
(E) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
21
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
TAX-EXEMPT MONEY MARKET FUND
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
TAX-EXEMPT SECURITIES (B) (97.6%):
ELECTRIC REVENUE (1.6%):
Jacksonville, FL, 3.75%, 12/11/95 ................... $ 1,200,000 1,200,000
Jacksonville, FL, 3.50%, 10/2/95 ...................... 2,000,000 2,000,000
-----------
3,200,000
-----------
HEALTH/HOSPITAL/NURSING HOME (21.3%):
Alaska Industrial Development Authority, VRDN, 3.70%,
6/1/10 5,690,000(c) 5,690,000
Colorado Health Facilities Authority, Boulder Hospital,
VRDN, 4.40%, 10/1/14 ................................. 2,700,000(c) 2,700,000
Idaho Health Facilities Authority, VRDN, 4.80%,
5/1/22 ............................................... 1,800,000(c) 1,800,000
Illinois Dev Finance Authority,VRDN, 4.50%, 3/1/15 .... 5,700,000(c) 5,700,000
Illinois Health Facilities Authority, VDRN, 4.50%,
1/1/16 ............................................... 2,060,000(c) 2,060,000
Illinois Health Facilities Authority, VRDN, 4.50%,
1/1/16 ............................................... 1,200,000(c) 1,200,000
Indiana Health Facilities Finance Authority, VRDN,
4.50%, 11/1/09 ....................................... 2,500,000(c) 2,500,000
Indiana Hospital Equipment Finance Authority, VRDN,
4.40%, 12/1/15 ....................................... 5,875,000(c) 5,875,000
Rochester, MN Health Care, Mayo Medical Center, 3.40%,
10/2/95 .............................................. 3,800,000 3,800,000
Wisconsin Health and Education Facilities Authority,
VRDN, 4.40%, 6/1/19 .................................. 7,915,000(c) 7,915,000
Wisconsin State Health Facility, VRDN, 4.40%,
1/1/16 ............................................... 4,630,000(c) 4,630,000
-----------
43,870,000
-----------
GENERAL OBLIGATIONS (11.9%):
Idaho State Tax Anticipation Notes, 4.50%, 6/27/96 .... 3,000,000 3,014,930
Mankato, MN, VRDN, 4.00%, 2/1/18 ...................... 1,700,000(c) 1,700,000
Minneapolis, MN Arena, VRDN, 4.30%, 10/1/24 ........... 2,800,000(c) 2,800,000
Orlando, FL, 3.60%, 11/7/95-12/7/95 ................... 7,500,000 7,500,000
Texas Public Finance Authority, 4.15%, 10/5/95 ........ 6,500,000 6,500,000
Texas State TRANS, 4.75%, 8/30/96 ..................... 3,000,000 3,017,920
-----------
24,532,850
-----------
COMMUNITY/ECONOMIC DEVELOPMENT REVENUE (6.9%):
Battery Park City Authority N.Y., 4.40%, 5/1/20 ....... 3,000,000(c)(d) 3,000,000
Broward County, FL School District, 4.50%, 4/29/96 .... 1,200,000 1,206,368
Denver Urban Renewal Authority, 4.20%, 2/15/96 ........ 5,240,000 5,240,000
Illinois Development and Finance Authority, Series 9,
VRDN, 5.03%, 11/7/04 ................................. 1,000,000(c) 1,000,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
22
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
Indianapolis, IN, VRDN, 4.50%, 4/1/05 ............... $ 3,825,000(c) 3,825,000
-----------
14,271,368
-----------
SINGLE-FAMILY HOUSING (14.8%):
Dakota County, MN Housing & Redevelopment Authority,
VRDN, 4.30%, 12/1/16 ................................. 6,000,000(c) 6,000,000
Iowa HFA, 4.30%, 11/1/95 .............................. 560,000 560,000
Iowa HFA, 4.30%, 11/1/17 .............................. 3,205,000 3,205,000
Iowa HFA, VRDN, 4.38%, 1/1/15 ......................... 1,595,000(c) 1,595,000
Jefferson Parish, LA Home Morgage Authority, 3.90%,
10/26/95 3,235,000 3,235,000
Minnesota HFA, Series A, VRDN, 4.22%,
2/1/15-2/15/15 ....................................... 9,090,000(c) 9,090,000
Montana Board of Housing, 4.30%, 10/1/95 .............. 990,000 990,000
Utah State HFA, 4.05%, 1/1/96 ......................... 810,000 810,000
Virginia State HDA, 3.60%, 2/15/96 .................... 2,000,000 2,000,000
Virginia State HDA, 3.65%, 3/21/96 .................... 3,000,000 3,000,000
-----------
30,485,000
-----------
INDUSTRIAL DEVELOPMENT REVENUE (10.6%):
Evansville, IN, VRDN, 4.50%, 9/1/04 ................... 2,500,000(c) 2,500,000
Henderson, NV Public Improvement, VRDN, 4.75%,
4/1/07 ............................................... 1,700,000(c)(d) 1,700,000
Illinois Development and Finance Authority, VRDN,
4.55%, 10/1/06 ....................................... 895,000(c)(d) 895,000
Illinois Development and Finance Authority, VRDN,
4.85%, 4/1/15 ........................................ 2,500,000(c) 2,500,000
Indiana State Employment, VDRN, 3.75%,
2/1/09-3/1/09 ........................................ 4,000,000(c) 4,000,000
Tremonton, VT, VRDN, 4.75%, 6/1/00 .................... 1,600,000(c)(d) 1,600,000
Warren County, OH, VRDN, 4.85%, 9/1/15 ................ 7,650,000(c) 7,650,000
Wells, MN, 4.50%, 12/1/95 ............................. 1,060,000 1,060,000
-----------
21,905,000
-----------
HIGHWAY REVENUE (0.9%):
Arizona State Transportation Board, 8.00%, 7/1/96 ..... 1,700,000 1,788,220
-----------
EDUCATION (9.9%):
Coconino County, AZ University School District, 4.45%,
7/31/96 .............................................. 2,000,000 2,008,473
Iowa School Corps CTFS, 5.75%, 2/1/96 ................. 1,000,000 1,002,406
Iowa School Corps Wt. CTFS, 4.75%, 6/28/96 ............ 3,000,000 3,019,237
Minneapolis, MN Special School District, 5.75%,
1/25/96 .............................................. 3,000,000 3,005,892
Minnesota School District Tax and Aid Anticipation
Notes, 5.10%, 3/15/96 ................................ 840,000 840,726
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
23
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
Minnesota School District Tax and Aid Anticipation
Notes, 4.30%, 9/13/96 .............................. $ 500,000 501,366
Minnesota State Higher Education Facilities Authority,
VDRN, 4.30%, 3/1/24 .................................. 1,560,000(c) 1,560,000
Red Wing, MN ISD, 4.63%, 3/28/96 ...................... 2,740,000 2,740,764
South Dakota School District, 4.75%, 7/30/96 .......... 1,000,000 1,006,765
Spring Lake Park, MN ISD, 4.82%, 3/14/96 .............. 2,115,000 2,115,629
University of Illinois Auxillary Facility, 4.56%,
4/1/96 ............................................... 1,140,000 1,113,592
University of Minnesota, 3.65%, 2/1/96 ................ 1,500,000 1,500,000
-----------
20,414,850
-----------
AIRPORT REVENUE (0.5%):
Clark County, NV, VRDN, 4.30%, 7/1/25 ................. 1,000,000(c) 1,000,000
-----------
OTHER REVENUE (0.3%):
Northwest Mutual Life, Tax-Exempt Trust, 4.25%,
2/15/96 .............................................. 710,000 710,000
-----------
SALES TAX REVENUE (0.5%):
Rapid City, SD, 3.60%, 12/1/95 ........................ 1,025,000 1,025,000
-----------
POLLUTION CONTROL REVENUE (8.1%):
Burlington, KS, 3.60%, 12/13/95 ....................... 1,215,000 1,215,000
Custer County, ID, 4.20%, 10/1/95 ..................... 1,500,000 1,500,000
East Baton Rouge Parish, LA, VRDN, 4.35%, 10/1/99 ..... 1,000,000(c) 1,000,000
Green River, WY, VRDN, 4.77%, 12/1/12 ................. 1,000,000(c) 1,000,000
Hockley County, TX, 3.65%, 3/1/96 ..................... 1,000,000 999,382
Houston, TX, 5.55%, 12/1/95 ........................... 3,000,000 3,010,044
Illinois Development Financial Authority VRDN, 4.25%,
11/1/28 .............................................. 1,000,000(c) 1,000,000
Jackson County, OR, VRDN, 4.25%, 8/1/22 ............... 1,500,000(c) 1,500,000
Jasper County, IN, 3.60%, 12/4/95 ..................... 1,600,000 1,600,000
York County, SC, 3.75%, 3/15/96 ....................... 1,000,000 1,000,000
York County, SC, 3.80%, 2/15/96 ....................... 2,950,000 2,950,000
-----------
16,774,426
-----------
MULTIFAMILY HOUSING REVENUE (4.0%):
New Hampshire State HFA, VRDN, 4.75%, 5/1/25 .......... 4,000,000(c)(d) 4,000,000
South Dakota HDA, 4.25%, 11/1/95 ...................... 4,290,000 4,290,000
-----------
8,290,000
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
24
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------- ---------- -----------
<S> <C> <C>
LEASING REVENUE (6.3%):
Metro Government Nashville and Davidson Counties, TN,
VRDN, 3.90%, 12/1/14 ............................... $ 2,500,000(c) 2,500,000
Pendleton County, KY, 3.50%, 10/10/95 ................. 3,000,000 3,000,000
Pendleton County, KY, 3.70%, 10/3/95 .................. 3,500,000 3,500,000
Pendleton County, KY, 3.65%, 10/3/95 .................. 3,000,000 3,000,000
South Louisiana Port Commission, VRDN, 4.40%,
7/1/21 ............................................... 1,000,000(c) 1,000,000
-----------
13,000,000
-----------
Total Tax-Exempt Securities
(cost: $201,266,714) ............................... 201,266,714
-----------
Total Investments in Securities (97.6%)
(cost: $201,266,714) (e) ........................... 201,266,714
-----------
Other assets in excess of liabilities (2.4%) ........ 4,944,920
-----------
Net assets (100.0%) ................................ $ 206,211,634
-----------
-----------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) PORTFOLIO ABBREVIATIONS:
CTFS - CERTIFICATES
HDA - HOUSING DEVELOPMENT AUTHORITY
HFA - HOUSING FINANCE AUTHORITY
ISD - INDEPENDENT SCHOOL DISTRICT
TRANS - TAX AND REVENUE ANTICIPATION NOTE SECURITIES
VRDN - VARIABLE RATE DEMAND NOTE
(C) INTEREST RATE VARIES TO REFLECT CURRENT MARKET CONDITIONS; RATE SHOWN IS
THE EFFECTIVE RATE ON SEPTEMBER 30, 1995. THE MATURITY DATE SHOWN
REPRESENTS FINAL MATURITY. HOWEVER, FOR PURPOSES OF RULE 2A-7, MATURITY
DATE IS THE NEXT INTEREST RATE RESET DATE.
(D) SECURITIES SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT FROM
REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR OTHER "ACCREDITED
INVESTORS." SECURITIES ARE TREATED AS LIQUID AFTER HAVING BEEN DETERMINED
TO BE LIQUID BY THE BOARD OF DIRECTORS.
(E) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
25
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
U.S.
Government Tax-Exempt
Money Money Money
Market Fund Market Fund Market Fund
------------- ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments in securities at amortized cost which
approximates market value (note 2) (including repurchase
agreements of $69,459,000; $78,795,000 and $0,
respectively) ........................................ $ 1,717,661,958 263,417,606 201,266,714
Cash in bank on demand deposit ........................... 100,501 25,120 140,979
Receivable for investment securities sold ................ -- -- 3,501,457
Receivable for fund shares sold .......................... 4,248,836 137,355 127,524
Accrued interest receivable .............................. 2,176,580 380,647 1,506,403
------------- ------------ ------------
Total Assets ......................................... 1,724,187,875 263,960,728 206,543,077
------------- ------------ ------------
LIABILITIES:
Dividends payable to shareholders ........................ 2,327,040 360,759 205,984
Payable for investment securities purchased .............. 15,798,813 7,000,000 --
Payable for fund shares redeemed ......................... 2,504,776 4,456 8,985
Accrued investment management fee ........................ 565,885 105,976 83,196
Accrued distribution fee ................................. 278,690 42,390 33,278
------------- ------------ ------------
Total Liabilities .................................... 21,475,204 7,513,581 331,443
------------- ------------ ------------
Net assets applicable to outstanding capital stock ....... $ 1,702,712,671 256,447,147 206,211,634
------------- ------------ ------------
------------- ------------ ------------
REPRESENTED BY:
Capital stock - authorized 10 billion shares of $0.01 par
value; outstanding: 1,702,848,750; 256,447,147 and
206,211,634, respectively ............................ $ 17,028,488 2,564,471 2,062,116
Additional paid-in capital ............................... 1,685,820,262 253,882,676 204,149,518
Distributions in excess of net investment income ......... (136,079) -- --
------------- ------------ ------------
Total - representing net assets applicable to
outstanding capital stock ........................ $ 1,702,712,671 256,447,147 206,211,634
------------- ------------ ------------
------------- ------------ ------------
Net asset value per share of outstanding capital stock ... $ 1.00 1.00 1.00
------------- ------------ ------------
------------- ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
U.S.
Government Tax-Exempt
Money Money Money
Market Fund Market Fund Market Fund
----------- ------------ -----------
<S> <C> <C> <C>
INCOME:
Interest ........................................... $ 81,503,213 12,852,555 7,510,192
----------- ------------ -----------
EXPENSES (NOTE 4):
Investment management fee ................................ 5,857,287 1,105,123 966,676
Distribution fee ......................................... 4,169,602 663,196 580,015
Custodian, accounting and transfer agent fees ............ 712,405 193,250 178,320
Shareholder account servicing fees ....................... 2,944,581 177,755 126,307
Registration fees ........................................ 32,262 19,674 21,232
Reports to shareholders .................................. 361,411 26,020 30,285
Directors' fees .......................................... 15,925 3,058 2,411
Audit and legal fees ..................................... 69,743 38,069 37,451
Other expenses ........................................... 88,206 14,024 15,013
----------- ------------ -----------
Total expenses ....................................... 14,251,422 2,240,169 1,957,710
Less expenses waived by the distributor .................. (1,444,070 ) (219,535) (198,108)
----------- ------------ -----------
Net expenses before expenses paid indirectly ......... 12,807,352 2,020,634 1,759,602
Less expenses paid indirectly ............................ (11,985 ) (1,082) (15,372)
----------- ------------ -----------
Total net expenses ................................... 12,795,367 2,019,552 1,744,230
----------- ------------ -----------
Net investment income .............................. $ 68,707,846 10,833,003 5,765,962
----------- ------------ -----------
----------- ------------ -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
MONEY MARKET FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
9/30/95 9/30/94
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income .................................. $ 68,707,846 35,484,831
Net realized loss on investments ......................... -- (80,193)
----------------- ---------------
Net increase in net assets resulting from operations ... 68,707,846 35,404,638
----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ............................... (68,707,846) (35,404,638)
In excess of net investment income ....................... (136,079) --
----------------- ---------------
Total distributions .................................... (68,843,925) (35,404,638)
----------------- ---------------
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE OF $1 PER
SHARE:
Proceeds from sales ...................................... 6,985,072,700 5,905,511,871
Proceeds from shares issued for reinvestment of net
investment income distributions ........................ 65,537,313 34,081,063
Payments for shares redeemed ............................. (6,533,100,552) (5,859,915,587)
----------------- ---------------
Increase in net assets from capital share
transactions ......................................... 517,509,461 79,677,347
----------------- ---------------
Total increase in net assets ......................... 517,373,382 79,677,347
Net assets at beginning of year ............................ 1,185,339,289 1,105,661,942
----------------- ---------------
Net assets at end of year ................................ $ 1,702,712,671 1,185,339,289
----------------- ---------------
----------------- ---------------
Distributions in excess of net investment income ......... $ (136,079) --
----------------- ---------------
----------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
U.S. GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
9/30/95 9/30/94
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................ $ 10,833,003 5,731,979
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .................................. (10,833,003) (5,731,979)
-------------- -------------
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE
OF $1 PER SHARE:
Proceeds from sales ...................................... 1,029,910,025 904,802,165
Proceeds from shares issued for reinvestment of net
investment income distributions ........................ 10,341,681 5,542,504
Payments for shares redeemed ............................. (968,477,790) (920,292,088)
-------------- -------------
Increase (decrease) in net assets from capital share
transactions ......................................... 71,773,916 (9,947,419)
-------------- -------------
Total increase (decrease) in net assets .............. 71,773,916 (9,947,419)
Net assets at beginning of year ............................ 184,673,231 194,620,650
-------------- -------------
Net assets at end of year ................................ $ 256,447,147 184,673,231
-------------- -------------
-------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
TAX-EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
9/30/95 9/30/94
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................ $ 5,765,962 3,501,332
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .................................. (5,765,962) (3,501,332)
------------ -------------
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE
OF $1 PER SHARE:
Proceeds from sales ...................................... 957,075,626 916,959,531
Proceeds from shares issued for reinvestment of net
investment income distributions ........................ 5,499,553 3,390,781
Payments for shares redeemed ............................. (934,321,084) (911,437,827)
------------ -------------
Increase in net assets from capital share
transactions ......................................... 28,254,095 8,912,485
------------ -------------
Total increase in net assets ......................... 28,254,095 8,912,485
Net assets at beginning of year ............................ 177,957,539 169,045,054
------------ -------------
Net assets at end of year ................................ $ 206,211,634 177,957,539
------------ -------------
------------ -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Piper Funds Inc. (the company) was incorporated on November 12,
1986, and is registered under the Investment Company Act of 1940
(as amended) as a single open-end management investment company
and currently includes a series of 13 funds including the Money
Market Fund, U.S. Government Money Market Fund and Tax-Exempt
Money Market Fund (the funds), which are classified as
diversified funds. The company's articles of incorporation
permit the board of directors to create additional funds in the
future.
(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
INVESTMENTS IN SECURITIES
Pursuant to Rule 2a-7 of the Investment Company Act of 1940 (as
amended), securities are valued at amortized cost, which
approximates market value, in order to maintain a constant net
asset value of $1 per share.
Security transactions are accounted for on the date the
securities are purchased or sold. Interest income, including
amortization of discount and premium on a straight-line basis,
is accrued daily.
FEDERAL TAXES
The funds' policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and to distribute all taxable income to shareholders.
Therefore, no income tax provision is required. Each fund is
treated as a separate entity for federal income tax purposes. In
addition, on a calendar-year basis, each fund intends to
distribute substantially all of its taxable net investment
income and realized gains, if any, to avoid payment of any
federal excise taxes.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income are
declared daily and paid monthly in shares.
REPURCHASE AGREEMENTS
The funds, along with other affiliated registered investment
companies, may transfer uninvested cash balances into an
individual, joint or tri-party trading account, the daily
aggregate of which is invested in repurchase agreements secured
by U.S. government or agency obligations. Securities pledged as
collateral for all individual and joint repurchase agreements
are held by the funds' custodian bank until maturity of the
repurchase agreement. Securities pledged as collateral for all
tri-party repurchase agreements are held by a third party
custodian until maturity of the repurchase agreement.
31
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Procedures for all agreements ensure that the daily market value
of the collateral is in excess of the repurchase agreement to
protect the funds in the event of default.
(3) INVESTMENT
SECURITY
TRANSACTIONS
Cost of purchases and proceeds from sales of securities for the
year ended September 30, 1995, were as follows:
<TABLE>
<CAPTION>
Purchases Sales Proceeds
-------------- --------------
<S> <C> <C>
Money Market Fund ............ $ 17,293,056,174 16,758,953,840
U.S. Government Money Market
Fund ........................ $ 6,052,929,327 5,973,772,870
Tax-Exempt Money Market
Fund ........................ $ 1,332,370,538 1,307,907,548
</TABLE>
(4) FEES AND
EXPENSES
The company has entered into an investment management agreement
with Piper Capital Management Incorporated (Piper Capital) under
which Piper Capital manages each fund's assets and furnishes
related office facilities, equipment, research and personnel.
The agreement requires each fund to pay Piper Capital a monthly
fee based upon average daily net assets. The fee for each fund
is equal to an annual rate of 0.50% of the first $500 million in
net assets, 0.425% of the next $250 million, 0.375% of the next
$250 million, 0.35% of the next $500 million, 0.325% of the next
$500 million and then decreasing in reduced percentages to
0.275% of net assets in excess of $2.5 billion.
Each fund also pays Piper Jaffray Inc. (Piper Jaffray), the
funds' distributor, a monthly fee in connection with the
servicing of each fund's shareholder account and in connection
with distribution-related services provided to each fund. Such
fee is charged on a monthly basis and is limited to a maximum of
1/12 of 0.30% of average daily net assets for each of the funds.
During the year ended September 30, 1995, Piper Jaffray
voluntarily agreed to limit the fee to an annual rate of 0.20%
of average daily net assets for each of the funds.
Each of the three funds has also entered into shareholder
account servicing agreements under which Piper Jaffray performs
various transfer and dividend disbursing agent services. The
fee, which is paid monthly to Piper Jaffray for providing such
service, is equal to an annual rate of $9 per active shareholder
account and $6 per inactive account.
In addition to the investment management fee, distribution fee
and shareholder account servicing fee, each fund is responsible
for paying
32
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
most other operating expenses including outside directors' fees
and expenses, custodian fees, registration fees, printing and
shareholder reports, transfer agent fees and expenses, legal,
auditing and accounting services, organization costs, insurance,
interest and other miscellaneous expenses.
Expenses paid indirectly represent a reduction of custodian fees
for earnings on cash balances maintained by the fund.
(5) FINANCIAL
HIGHLIGHTS
Per-share data for a share of common stock outstanding
throughout each period and selected information for each period
are as follows:
MONEY MARKET FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
---------------------------------
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ... $ 1.00 1.00 1.00 1.00 1.00
----- ----- ----- ----- -----
Operations:
Net investment income................. 0.05 0.03 0.02 0.04 0.06
Distributions from net investment
income................................ (0.05) (0.03) (0.02) (0.04) (0.06)
----- ----- ----- ----- -----
Net asset value, end of year ......... $ 1.00 1.00 1.00 1.00 1.00
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return*........................... 5.05% 2.98% 2.45% 3.87% 6.34%
Net assets, end of year
(in millions) ...................... $ 1,703 1,185 1,106 1,096 1,242
Ratio of expenses to average daily net
assets**.............................. 0.92% 0.93% 0.96% 0.90% 0.89%
Ratio of net investment income to
average daily net assets**............ 4.94% 2.90% 2.42% 3.66% 6.06%
</TABLE>
* TOTAL RETURN IS BASED ON THE CHANGE IN NET ASSET VALUE DURING THE PERIOD,
ASSUMES REINVESTMENT OF ALL DISTRIBUTIONS AND DOES NOT REFLECT A SALES
CHARGE.
** DURING THE YEARS REFLECTED ABOVE, THE FUND'S DISTRIBUTION FEE WAS VOLUNTARILY
LIMITED. HAD THE MAXIMUM FEE BEEN IN EFFECT, THE RATIOS OF EXPENSES AND NET
INVESTMENT INCOME TO AVERAGE DAILY NET ASSETS WOULD HAVE BEEN: 1.02%/4.84% IN
FISCAL 1995, 1.03%/2.80% IN FISCAL 1994, 1.06%/2.32% IN FISCAL 1993,
1.00%/3.56% IN FISCAL 1992 AND 0.98%/5.97% IN FISCAL 1991. BEGINNING IN
FISCAL 1995, THE EXPENSE RATIOS REFLECT THE EFFECT OF GROSS EXPENSES PAID
INDIRECTLY BY THE FUNDS. PRIOR PERIOD EXPENSE RATIOS HAVE NOT BEEN ADJUSTED.
33
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
U.S. GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
---------------------------------
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ... $ 1.00 1.00 1.00 1.00 1.00
----- ----- ----- ----- -----
Operations:
Net investment income................. 0.05 0.03 0.02 0.04 0.06
Distributions from net investment
income................................ (0.05) (0.03) (0.02) (0.04) (0.06)
----- ----- ----- ----- -----
Net asset value, end of year ......... $ 1.00 1.00 1.00 1.00 1.00
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return*........................... 4.99% 2.98% 2.51% 3.78% 6.05%
Net assets, end of year
(in millions) ...................... $ 256 185 195 191 199
Ratio of expenses to average daily net
assets++.............................. 0.91% 0.92% 0.93% 0.90% 0.88%
Ratio of net investment income to
average daily net assets++............ 4.90% 2.88% 2.41% 3.58% 5.84%
</TABLE>
TAX-EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
---------------------------------
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ... $ 1.00 1.00 1.00 1.00 1.00
----- ----- ----- ----- -----
Operations:
Net investment income................. 0.03 0.02 0.02 0.03 0.04
Distributions from net investment
income+............................... (0.03) (0.02) (0.02) (0.03) (0.04)
----- ----- ----- ----- -----
Net asset value, end of year ......... $ 1.00 1.00 1.00 1.00 1.00
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return*........................... 3.02% 1.82% 1.87% 3.07% 4.54%
Net assets, end of year
(in millions) ...................... $ 206 178 169 158 134
Ratio of expenses to average daily net
assets++.............................. 0.91% 0.90% 0.92% 0.88% 0.87%
Ratio of net investment income to
average daily net assets++............ 2.97% 1.80% 1.83% 2.91% 4.37%
</TABLE>
* TOTAL RETURN IS BASED ON THE CHANGE IN NET ASSET VALUE DURING THE PERIOD,
ASSUMES REINVESTMENT OF ALL DISTRIBUTIONS AND DOES NOT REFLECT A SALES
CHARGE.
+ TAX-EXEMPT MONEY MARKET FUND DISTRIBUTIONS FROM NET INVESTMENT INCOME THAT
ARE TAXABLE FOR FEDERAL AND STATE INCOME TAX PURPOSES WERE $0.0001, $0.0000,
$0.0000, $0.0001 AND $0.0002 PER SHARE FOR THE YEARS ENDED SEPTEMBER 30,
1995, 1994, 1993, 1992 AND 1991, RESPECTIVELY.
++ DURING THE YEARS REFLECTED ABOVE, THE FUND'S DISTRIBUTION FEE WAS VOLUNTARILY
LIMITED. HAD THE MAXIMUM FEE BEEN IN EFFECT, THE RATIOS OF EXPENSES AND NET
INVESTMENT INCOME TO AVERAGE DAILY NET ASSETS WOULD HAVE BEEN: 1.01%/4.80% IN
FISCAL 1995, 1.02%/2.78% IN FISCAL 1994, 1.03%/2.31% IN FISCAL 1993,
1.00%/3.48% IN FISCAL 1992 AND 0.97%/5.75% IN FISCAL 1991 FOR U.S. GOVERNMENT
MONEY MARKET FUND, AND 1.01%/2.87% IN FISCAL 1995, 1.00%/1.70% IN FISCAL
1994, 1.02%/1.73% IN FISCAL 1993, 0.98%/2.81% IN FISCAL 1992 AND 0.96%/4.28%
IN FISCAL 1991 FOR TAX-EXEMPT MONEY MARKET FUND. BEGINNING IN FISCAL 1995,
THE EXPENSE RATIOS REFLECT THE EFFECT OF GROSS EXPENSES PAID INDIRECTLY BY
THE FUNDS. PRIOR PERIOD EXPENSE RATIOS HAVE NOT BEEN ADJUSTED.
34
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND SHAREHOLDERS
PIPER FUNDS INC.:
We have audited the accompanying statements of assets and liabilities, including
the schedule of investments in securities, of Money Market Fund, U.S. Government
Money Market Fund and Tax-Exempt Money Market Fund (funds within Piper Funds
Inc.) as of September 30, 1995 and the related statements of operations for the
year then ended, the statements of changes in net assets for each of the years
in the two-year period then ended and the financial highlights for each of the
years in the five-year period then ended. These financial statements and the
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
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 the 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. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased or sold but not received or delivered, we
request confirmations from brokers and where replies are not received, we carry
out other appropriate auditing procedures. 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 the financial highlights referred
to above present fairly, in all material respects, the financial position of
Money Market Fund, U.S. Government Money Market Fund and Tax-Exempt Money Market
Fund at September 30, 1995, the results of their operations for the year then
ended, the changes in their net assets for each of the years in the two-year
period then ended and the financial highlights for the periods stated in the
first paragraph above, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 3, 1995
35
<PAGE>
- --------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
Information for federal tax purposes is presented as an aid to shareholders in
reporting the distributions shown below. Each shareholder should consult a tax
adviser about reporting this income for state and local tax purposes.
By February 1996, shareholders of Money Market Fund and U.S. Government Money
Market Fund will receive from the funds a breakdown of income earned by
investment category on a calendar-year basis. At the same time, Tax-Exempt Money
Market Fund shareholders will receive from the funds information regarding the
percentage of distributions exempt from federal income taxes and a breakdown
setting forth states from which income was earned.
Distributions paid during the fiscal year ended September 30, 1995:
<TABLE>
<CAPTION>
Tax-Exempt
Money Market U.S. Government Money Market
Payable Date Fund Money Market Fund Fund
- ------------------------------ ------------- ----------------- ---------------
<S> <C> <C> <C>
October 21, 1994 ........... $ 0.0032 0.0033 0.0020
November 21, 1994 ............ 0.0035 0.0035 0.0021
December 21, 1994 ............ 0.0039 0.0039 0.0022
January 5, 1995 .............. 0.0015 0.0015 0.0010
January 23, 1995 ............. 0.0027 0.0027 0.0015
February 21, 1995 ............ 0.0043 0.0043 0.0024
March 21, 1995 ............... 0.0040 0.0039 0.0024
April 21, 1995 ............... 0.0045 0.0044 0.0028
May 22, 1995 ................. 0.0045 0.0044 0.0030
June 21, 1995 ................ 0.0044 0.0044 0.0026
July 21, 1995 ................ 0.0044 0.0043 0.0026
August 21, 1995 .............. 0.0042 0.0042 0.0025
September 21, 1995 ........... 0.0041 0.0041 0.0025
------------- ------- -------
$ 0.0492 0.0489 0.0296
------------- ------- -------
------------- ------- -------
</TABLE>
SOURCE OF DISTRIBUTIONS
Income distributions from Money Market Fund and U.S. Government Money Market
Fund are taxable as dividend income, and none qualify for the corporate
dividends received deduction.
During the year ended September 30, 1995, 99.81% of Tax-Exempt Money Market Fund
distributions were derived from interest on municipal securities and qualify as
exempt-interest dividends for federal tax purposes. Exempt-interest dividends
are exempt from federal income taxes and should not be included in the
shareholder's gross income, but need to be reported for informational purposes.
36
<PAGE>
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
<TABLE>
<S> <C>
DIRECTORS David T. Bennett, CHAIRMAN, HIGHLAND HOMES, INC., USL PRODUCTS
INC., KIEFER BUILT, INC., OF COUNSEL, GRAY, PLANT, MOOTY,
MOOTY & BENNETT, P.A.
Jaye F. Dyer, PRESIDENT, DYER MANAGEMENT COMPANY
William H. Ellis, PRESIDENT, PIPER CAPITAL MANAGEMENT
INCORPORATED, PIPER JAFFRAY COMPANIES, INC.
Karol D. Emmerich, PRESIDENT, THE PARACLETE GROUP
Luella G. Goldberg, DIRECTOR, TCF FINANCIAL, RELIASTAR
FINANCIAL CORP., HORMEL FOODS CORP.
George Latimer, DIRECTOR, SPECIAL ACTIONS OFFICE, OFFICE OF
THE SECRETARY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
OFFICERS William H. Ellis, CHAIRMAN OF THE BOARD
Paul A. Dow, PRESIDENT
Worth Bruntjen, SENIOR VICE PRESIDENT
Richard W. Filippone, SENIOR VICE PRESIDENT
Marijo A. Goldstein, SENIOR VICE PRESIDENT
Steven V. Markusen, SENIOR VICE PRESIDENT
Robert H. Nelson, SENIOR VICE PRESIDENT
Edward P. Nicoski, SENIOR VICE PRESIDENT
Nancy S. Olsen, SENIOR VICE PRESIDENT
Ronald R. Reuss, SENIOR VICE PRESIDENT
Maxine D. Rossini, SENIOR VICE PRESIDENT
Bruce Salvog, SENIOR VICE PRESIDENT
Sandra K. Shrewsbury, SENIOR VICE PRESIDENT
David Steele, SENIOR VICE PRESIDENT
Douglas J. White, SENIOR VICE PRESIDENT
J. Bradley Stone, VICE PRESIDENT
Marcy K. Winson, VICE PRESIDENT
David E. Rosedahl, SECRETARY
Charles N. Hayssen, TREASURER
INVESTMENT Piper Capital Management Incorporated
ADVISER 222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402
DISTRIBUTOR Piper Jaffray Inc.
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402
CUSTODIAN AND Investors Fiduciary Trust Company
TRANSFER AGENT 127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
INDEPENDENT KPMG Peat Marwick LLP
AUDITORS 4200 NORWEST CENTER, MINNEAPOLIS, MN 55402
LEGAL COUNSEL Dorsey & Whitney P.L.L.P.
220 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402
</TABLE>
37
<PAGE>
- ----------------
PIPER CAPITAL
MANAGEMENT
- ----------------
----------------
Bulk Rate
U.S. Postage
PAID
Permit No. 3008
Mpls., MN
----------------
PIPER CAPITAL MANAGEMENT INCORPORATED
222 SOUTH NINTH STREET
MINNEAPOLIS, MN 55402-3804
PIPER JAFFRAY INC., FUND DISTRIBUTOR AND NASD MEMBER.
THIS DOCUMENT IS PRINTED ON PAPER MADE FROM
100% TOTAL RECOVERED FIBER, INCLUDING 15% POST-CONSUMER WASTE.
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015-96 XMM-01 11/95
STAPLES
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