<PAGE>
- -------------------------------------------------------------------
1996 Annual Report
----------------------
MONEY MARKET FUND
[LOGO] --------------------
TAX-EXEMPT MONEY
MARKET FUND
---------------------
U.S. GOVERNMENT
MONEY MARKET FUND
----------------------
CASH
MANAGEMENT
FUNDS
<PAGE>
CONTENTS
MONEY MARKET FUND
Letter to Shareholders . . . . . . . . . . .4
Financial Statements
and Notes. . . . . . . . . . . . . . . . . 10
Investments in Securities. . . . . . . . . 22
Independent Auditors'
Report . . . . . . . . . . . . . . . . . . 40
Federal Tax Information . . . . . . . . . 41
Shareholder Services . . . . . . . . . . . 43
Glossary . . . . . . . . . . . . . . . . . 45
U.S. GOVERNMENT
MONEY MARKET FUND
Letter to Shareholders . . . . . . . . . . .4
Financial Statements
and Notes. . . . . . . . . . . . . . . . . 10
Investments in Securities. . . . . . . . . 31
Independent Auditors'
Report . . . . . . . . . . . . . . . . . . 40
Federal Tax Information . . . . . . . . . 41
Shareholder Services . . . . . . . . . . . 43
Glossary . . . . . . . . . . . . . . . . . 45
TAX-EXEMPT MONEY MARKET FUND
Letter to Shareholders . . . . . . . . . . .7
Financial Statements
and Notes. . . . . . . . . . . . . . . . . 10
Investments in Securities. . . . . . . . . 35
Independent Auditors'
Report . . . . . . . . . . . . . . . . . . 40
Federal Tax Information . . . . . . . . . 41
Shareholder Services . . . . . . . . . . . 43
Glossary . . . . . . . . . . . . . . . . . 45
This report is intended for shareholders
of Money Market Fund, U.S.
Government Money Market Fund and
Tax-Exempt Money Market Fund, but
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.
*An investment in a money market
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.
[LOGO]
INTERNATIONAL GROWTH FUNDS
- --------------------------
Emerging Markets Growth Fund
Pacific-European Growth Fund
U.S. GROWTH FUNDS
- -----------------
Small Company Growth Fund
Emerging Growth Fund
Growth Fund
GROWTH AND INCOME FUNDS
- -----------------------
Growth and Income Fund
Balanced Fund
INCOME FUNDS
- ------------
Government Income Fund
Intermediate Bond Fund
Adjustable Rate Mortgage Securities Fund
TAX-EXEMPT INCOME FUNDS
- -----------------------
National Tax-Exempt Fund
Minnesota Tax-Exempt Fund
CASH MANAGEMENT FUNDS*
- ----------------------
Money Market Fund
Tax-Exempt Money Market Fund
U.S. Government Money Market Fund
Institutional Money Market Fund
An investment staple, cash management funds can help you organize your finances
and build your assets.
Piper Funds provide you with the flexibility to help you pursue your lifelong
goals. Among our funds, we offer a spectrum of investment objectives and
convenient shareholder services to meet the varied needs of today's investors.
Contact your Piper Jaffray Investment Executive for more information about the
Piper Funds, including prospectuses, or call Mutual Fund Services at 1 800
866-7778.
<PAGE>
WILLIAM H. ELLIS
President
Piper Capital
Management
- ------------------
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
Oct. 31, 1996
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
Check out the best sellers, list at your local bookstore. You'll notice a number
of books about companies that have gone through dramatic changes in recent
years. Surprising? Not really. Every company experiences change periodically.
And we're no exception. At Piper Capital Management, we've recently made
significant changes to enhance our ability to achieve consistent, competitive
performance and provide a higher level of quality service.
We've restructured our fund family to offer you a broader range of mutual
funds - from small company to emerging markets. We've renamed certain funds so
it's easier to identify how they invest. Take a look at the names, and you'll
see what I mean.
We've upgraded our toll-free telephone system so you spend less time
listening to voice response and more time receiving information you can put to
use. When calling our toll-free number, you'll now have the option to listen to
our portfolio managers talk about their current investment strategies and market
outlook. Find out the many ways to reach us, including our toll-free number, on
the back page of this report.
Take a close look at the annual report in your hand. You'll see that the
format is simpler and more inviting. The report has less jargon and is easier to
read. We've even added a glossary of terms at the back of the book to help you
better understand commonly used financial terms. Whenever you see this symbol
(***), it indicates a term that is defined in the glossary. In addition, we've
developed more literature that clearly spells out each fund's investment process
with succinct content that you can easily grasp. Flip to the back page for more
information on how to order literature.
(*** Symbol is Graduation Cap indicating a term that is defined in the
glossary.)
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1 1996 Annual Report - Cash Management Funds
<PAGE>
PRESIDENT'S LETTER (continued)
- --------------------------------------------------------------------------------
You'll hear the word "team" more often when we talk about our portfolio
managers. We've reorganized our investment management group so managers interact
more frequently, sharing their best ideas to improve the investment capabilities
of Piper Capital.
There is one thing that hasn't changed at Piper Capital, and that's the
value we place on your Investment Executive. He or she plays an integral part
in helping you build your wealth. Rely on your Piper Jaffray Investment
Executive to give you the support and guidance that you need in working
toward your financial goals.
The recent changes we have made represent a new way of doing business at
Piper Capital - an approach we believe will enable us to establish an
unparalleled reputation for prudent investing and high-quality service.
That said, we look forward to serving your future financial needs and
exceeding your expectations in every way we can.
Thank you for your investment.
Sincerely,
/s/ William H. Ellis
William H. Ellis
- -------------------------------------------------------------------------------
2 1996 Annual Report - Cash Management Funds
<PAGE>
30-DAY EFFECTIVE YIELDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[GRAPH]
Money Market Fund
U.S. Government Money Market Fund
Tax-Exempt Money Market Fund
This chart shows the 30-day effective 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.
Since the funds' inception, the funds' distributor voluntarily waived 12b-1
fees. Had fees not been waived, Money Market Fund's, U.S. Government Money
Market Fund's and Tax-Exempt Money Market Fund's 30-day yields would have been
4.61%, 4.53% and 2.63%, respectively, on September 30, 1996.
- -------------------------------------------------------------------------------
3 1996 Annual Report - Cash Management Funds
<PAGE>
NANCY S. OLSEN
is primarily
responsible for the
management of
Money Market
Fund and U.S.
Government Money
Market Fund. She
has 18 years of
financial experience.
- ----------------------
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
October 31, 1996
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
THE SEVEN-DAY CURRENT YIELDS FOR BOTH MONEY MARKET FUND AND U.S. GOVERNMENT
MONEY MARKET FUND HAVE INCREASED SINCE WE LAST REPORTED TO YOU SIX MONTHS AGO.
Money Market Fund's seven-day current yield increased from 4.48% on March 31 to
4.63%* on September 30. However, that is down from a year ago, when the seven-
day current yield was 4.87% on September 30, 1995. U.S. Government Money Market
Fund's seven-day current yield is up from 4.45% on March 31 to 4.55%* on
September 30. Its seven-day current yield was 4.85% on September 30, 1995.
INTEREST RATES FELL AT THE END OF 1995 AND ROSE AGAIN DURING THE SPRING AND
SUMMER OF 1996. In response to a slowing economy, the Federal Reserve Board
(Fed) lowered the federal funds rate(***) from 6.0% to 5.5% in late 1995 and to
5.25% in January 1996.
* 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
funds' inception, the funds' distributor voluntarily waived 12b-1 fees. Had fees
not been waived, Money Market Fund's and U.S. Government Money Market Fund's
seven-day yield would have been 4.53% and 4.45%, respectively, on September 30,
1996.
- -------------------------------------------------------------------------------
MONEY MARKET FUND PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
As a percentage of total assets on September 30, 1996.
[GRAPH]
(*** Symbol is Graduation Cap indicating a term that is defined in the
glossary.)
- -------------------------------------------------------------------------------
4 1996 Annual Report - Cash Management Funds
<PAGE>
SHAISTA B. TAJAMAL
assists with the
management
of Money Market
Fund and U.S.
Government Money
Market Fund.
She has six years
of financial
experience.
- ------------------------
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
Since then, the economy has shown signs of strength, creating speculation that
the next Fed action would be to raise the federal funds rate. As a result,
short-term rates moved up again until the end of September, when the Fed chose
not to raise the federal funds rate at its September Federal Open Market
Committee meeting. That action caused interest rates to drop slightly in the
last week of the quarter.
WE PROVIDED YOU WITH A COMPETITIVE RATE OF RETURN THIS PAST YEAR BY MANAGING THE
FUNDS' AVERAGE WEIGHTED MATURITY(***) AND BY MAKING SOME CHANGES TO THEIR
COMPOSITION. We lengthened the average weighted maturities of both funds in the
fourth quarter of 1995 and the first quarter of 1996 to lock in higher yields
when interest rates were declining. We began shortening the funds' average
weighted maturities in the second quarter to take advantage of rising short-term
rates. In addition, we added some certificates of deposit(***) to Money Market
Fund in the first and second quarters of 1996, taking advantage of the more
competitive yields offered by these securities. In both funds, we increased our
holdings of floating rate notes(***), which are securities with adjustable
interest rates. These securities worked very well in the rising interest rate
environment we experienced in the second and third quarters of this year.
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As a percentage of total assets on September 30, 1996.
[GRAPH]
(*** Symbol is Graduation Cap indicating a term that is defined in the
glossary.)
- -------------------------------------------------------------------------------
5 1996 Annual Report - Cash Management Funds
<PAGE>
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
- -------------------------------------------------------------------------------
LOOKING AHEAD, WE ARE POSITIONING THE AVERAGE WEIGHTED MATURITIES OF THE FUNDS
NEUTRALLY COMPARED TO THEIR RESPECTIVE BENCHMARKS UNTIL WE SEE A CLEARER TREND
IN THE ECONOMY. Money Market Fund's average weighted maturity is 54 days and
U.S. Government Money Market Fund's average weighted maturity is 61 days as of
September 30, 1996. In addition, we are positioning the funds in somewhat of a
barbell structure(***). We are focusing on securities with shorter maturities
(seven to 30 days) and longer maturities (10 to 13 months), while de-emphasizing
securities in between. This strategy allows us to maintain higher yields for
longer periods of time if interest rates decrease; if rates increase, the
securities with shorter maturities can be reinvested at higher rates more
quickly.
OUR PRIMARY CONCERN IN MANAGING BOTH FUNDS IS THE SAFETY OF YOUR PRINCIPAL. We
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 funds' average weighted maturity based on our interest rate
forecast.
Thank you for your investment in Money Market Fund and U.S. Government Money
Market Fund. We are committed to providing you with high-quality investments and
will continue working to help you meet your financial goals.
Sincerely,
/s/ Nancy Shellenberger Olsen
Nancy Shellenberger Olsen
Portfolio Manager
(*** Symbol is Graduation Cap indicating a term that is defined in the
glossary.)
- -------------------------------------------------------------------------------
6 1996 Annual Report - Cash Management Funds
<PAGE>
DOUGLAS J. WHITE,
CFA
shares responsibility
for the management
of Tax-Exempt
Money Market Fund.
He has 13 years
of financial experience.
- -------------------------
TAX-EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
October 31, 1996
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
THE YIELD ON TAX-EXEMPT MONEY MARKET FUND HAS INCREASED SLIGHTLY SINCE WE
REPORTED TO YOU IN THE SEMIANNUAL REPORT. The fund's seven-day current yield
rose from 2.56% on March 31 to 2.81%* on September 30, 1996. That compares to a
yield of 3.08% on September 30, 1995. Yields fluctuated from month to month as a
result of changing expectations of Federal Reserve Board (Fed) activity and
supply/demand imbalances. We'll discuss both of these factors - and how they
affected the fund - below.
INTEREST RATES FELL AT THE END OF 1995 AND ROSE AGAIN DURING THE SPRING AND
SUMMER OF 1996. In response to a slowing economy, the Fed lowered the federal
funds rate(***) from 6.0% to 5.5% in late 1995 and to 5.25% in January 1996.
Shortly after the last rate cut, a
* 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 waived 12b-1 fees. Had the
fees not been waived, the fund's seven-day current yields would have been 2.71%
on September 30, 1996.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
As a percentage of total assets on September 30, 1996.
[GRAPH]
(*** Symbol is Graduation Cap indicating a term that is defined in the
glossary.)
- -------------------------------------------------------------------------------
7 1996 Annual Report - Cash Management Funds
<PAGE>
CATHERINE STIENSTRA
shares responsibility
for the management
of Tax-Exempt
Money Market Fund.
She has five years of
financial experience.
- -----------------------
TAX-EXEMPT MONEY MARKET FUND (CONTINUED)
- -----------------------------------------------------------------------
stronger-than-expected employment number in the spring and other surprising
signs of economic strength created speculation that the next Fed action would be
to raise the federal funds rate. As a result, short-term rates increased
slightly. The current interest rate environment remains speculative in nature.
DUE TO THE INTEREST RATE ENVIRONMENT DESCRIBED ABOVE, WE HAVE MANAGED THE
FUND BY INVESTING IN APPROXIMATELY A 50/50 MIX OF FIXED RATE AND VARIABLE
RATE SECURITIES. In the first quarter of 1996, the fund's position in fixed
rate securities was somewhat lower due to a shortage in the supply of
high-quality municipal notes. During September, the fixed rate portion dipped
again, this time because we did not replace some of the fund's commercial
paper when it matured, as we felt new issues were too expensive. This,
combined with a continued short supply of high-quality notes, caused the
fixed rate portion to decline to about 45%. September's level of new
municipal note issuance was down 39% from the same time last year. These
factors decreased the fund's average weighted maturity(***) to 59 days on
September 30. In the coming months, we will look for fixed rate securities to
add to the fund as they become available to return the fixed rate portion of
the fund to approximately 50%.
(*** Symbol is Graduation Cap indicating a term that is defined in the
glossary.)
- -------------------------------------------------------------------------------
8 1996 Annual Report - Cash Management Funds
<PAGE>
TAX-EXEMPT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
WITH OUR EQUALLY PROPORTIONED FIXED RATE/VARIABLE RATE STRATEGY, WE BELIEVE THE
FUND IS POSITIONED APPROPRIATELY FOR THE COMING MONTHS. Keeping part of the fund
in variable rate securities that are reset daily, weekly and monthly benefits
the fund by providing flexibility when we anticipate interest rate fluctuations
caused by Fed changes. This strategy, along with our active positioning of 50%
of the fund in fixed rate securities, is important to our primary goals of
providing you with high income and preservation of principal. We plan to manage
the average weighted maturity of the fund accordingly.
Thank you for investing in Tax-Exempt Money Market Fund. We are dedicated to
providing you with quality management services and look forward to helping you
reach your financial goals.
Sincerely,
/s/ Douglas J. White
Douglas J. White
Portfolio Manager
/s/ Catherine M. Stienstra
Catherine M. Stienstra
Portfolio Manager
- -------------------------------------------------------------------------------
9 1996 Annual Report - Cash Management Funds
<PAGE>
Financial Statements
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES September 30, 1996
..................................................................
<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 $10,852,000; $76,800,000 and $0,
respectively) ............................................ $1,963,869,577 $289,653,381 $208,414,218
Cash in bank on demand deposit ............................. 1,751,745 58,386 196,579
Other assets ............................................... 71,040 10,952 7,955
Accrued interest receivable ................................ 3,974,431 1,843,892 1,617,111
-------------- ------------ ------------
Total assets ............................................. 1,969,666,793 291,566,611 210,235,863
-------------- ------------ ------------
LIABILITIES:
Dividends payable to shareholders .......................... 2,901,598 377,919 171,076
Accrued investment management fee .......................... 640,432 119,201 89,855
Accrued distribution fee ................................... 324,755 47,680 35,942
-------------- ------------ ------------
Total liabilities .......................................... 3,866,785 544,800 296,873
-------------- ------------ ------------
Net assets applicable to outstanding capital stock ......... $1,965,800,008 $291,021,811 $209,938,990
-------------- ------------ ------------
-------------- ------------ ------------
REPRESENTED BY:
Capital stock - authorized 100 billion shares of $0.01 par
value; outstanding: 1,965,800,008; 291,021,811 and
209,938,990, respectively ................................ $ 19,658,000 $ 2,910,218 $ 2,099,390
Additional paid-in capital ................................. 1,946,142,008 288,111,593 207,839,600
-------------- ------------ ------------
Total - representing net assets applicable to outstanding
capital stock .......................................... $1,965,800,008 $291,021,811 $209,938,990
-------------- ------------ ------------
-------------- ------------ ------------
Net asset value per share of outstanding capital stock ..... $ 1.00 $ 1.00 $ 1.00
-------------- ------------ ------------
-------------- ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
10 1996 Annual Report - Cash Management Funds
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF OPERATIONS For The Year Ended September 30, 1996
..................................................................
<TABLE>
<CAPTION>
U.S.
GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
----------- ------------ ------------
<S> <C> <C> <C>
INCOME:
Interest ................................................... $105,491,751 $16,304,434 $ 8,211,429
----------- ------------ ------------
EXPENSES (NOTE 4):
Investment management fee .................................. 7,536,110 1,477,604 1,122,039
Distribution and servicing fee ............................. 5,655,508 881,309 669,220
Custodian and accounting fees .............................. 690,408 207,671 164,047
Transfer agent and dividend disbursing agent fees .......... 3,269,584 225,930 143,984
Registration fees .......................................... 230,506 53,247 45,595
Reports to shareholders .................................... 213,914 41,984 39,164
Directors' fees ............................................ 2,888 2,791 2,791
Audit and legal fees ....................................... 38,873 34,051 34,109
Other expenses ............................................. 106,847 25,252 22,450
----------- ------------ ------------
Total expenses ........................................... 17,744,638 2,949,839 2,243,399
Less expenses waived by the distributor .................... (1,881,240) (293,347) (222,639)
----------- ------------ ------------
Net expenses before expenses paid indirectly ............. 15,863,398 2,656,492 2,020,760
Less expenses paid indirectly .............................. (5,906) (1,737) (8,792)
----------- ------------ ------------
Total net expenses ....................................... 15,857,492 2,654,755 2,011,968
----------- ------------ ------------
Net investment income .................................... $89,634,259 $13,649,679 $ 6,199,461
----------- ------------ ------------
----------- ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
11 1996 Annual Report - Cash Management Funds
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
MONEY MARKET FUND
----------------------------------
Year Ended Year Ended
9/30/96 9/30/95
---------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 89,634,259 $ 68,707,846
---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. (89,498,180) (68,707,846)
In excess of net investment income ......................... -- (136,079)
---------------- ---------------
Total distributions ...................................... (89,498,180) (68,843,925)
---------------- ---------------
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE OF $1 PER
SHARE:
Proceeds from sales ........................................ 8,148,803,714 6,985,072,700
Proceeds from shares issued for reinvestment of net
investment income distributions .......................... 86,341,691 65,537,313
Payments for shares redeemed ............................... (7,972,194,147) (6,533,100,552)
---------------- ---------------
Increase in net assets from capital share transactions ... 262,951,258 517,509,461
---------------- ---------------
Total increase in net assets ............................. 263,087,337 517,373,382
Net assets at beginning of year ............................ 1,702,712,671 1,185,339,289
---------------- ---------------
Net assets at end of year .................................. $ 1,965,800,008 $ 1,702,712,671
---------------- ---------------
---------------- ---------------
Distributions in excess of net investment income ........... $ -- $ (136,079)
---------------- ---------------
---------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
12 1996 Annual Report - Cash Management Funds
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
U.S. GOVERNMENT
MONEY MARKET FUND
-------------------------------
Year Ended Year Ended
9/30/96 9/30/95
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 13,649,679 $ 10,833,003
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. (13,649,679) (10,833,003)
-------------- --------------
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE OF $1 PER
SHARE:
Proceeds from sales ........................................ 1,241,641,588 1,029,910,025
Proceeds from shares issued for reinvestment of net
investment income distributions .......................... 13,290,413 10,341,681
Payments for shares redeemed ............................... (1,220,357,337) (968,477,790)
-------------- --------------
Increase in net assets from capital share transactions ... 34,574,664 71,773,916
-------------- --------------
Total increase in net assets ............................. 34,574,664 71,773,916
Net assets at beginning of year ............................ 256,447,147 184,673,231
-------------- --------------
Net assets at end of year .................................. $ 291,021,811 $ 256,447,147
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
13 1996 Annual Report - Cash Management Funds
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY MARKET FUND
------------------------------
Year Ended Year Ended
9/30/96 9/30/95
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 6,199,461 $ 5,765,962
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. (6,199,461) (5,765,962)
-------------- -------------
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE OF $1 PER
SHARE:
Proceeds from sales ........................................ 1,478,505,358 957,075,626
Proceeds from shares issued for reinvestment of net
investment income distributions .......................... 6,041,943 5,499,553
Payments for shares redeemed ............................... (1,480,819,945) (934,321,084)
-------------- -------------
Increase in net assets from capital share transactions ... 3,727,356 28,254,095
-------------- -------------
Total increase in net assets ............................. 3,727,356 28,254,095
Net assets at beginning of year ............................ 206,211,634 177,957,539
-------------- -------------
Net assets at end of year .................................. $ 209,938,990 $ 206,211,634
-------------- -------------
-------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
14 1996 Annual Report - Cash Management Funds
<PAGE>
Notes to Financial Statements
- ----------------------------------------
(1) ORGANIZATION
................................................................................
Piper Funds Inc. (the company) is registered under the Investment
Company Act of 1940 (as amended) as a single open-end investment
management company. The company currently has 12 series,
including Money Market Fund, U.S. Government Money Market Fund
and Tax-Exempt Money Market Fund (the funds), each of which is
classified as a diversified series. The company's articles of
incorporation permit the board of directors to create additional
series in the future.
Money Market 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.
U.S. Government Money Market Fund invests in short-term
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.
Tax-Exempt Money Market Fund invests primarily in high-quality,
tax-exempt securities with short-term maturities, including
municipal bonds, notes and commercial paper.
There is no assurance that the funds will be able to maintain a
stable net asset value of $1.00 per share.
(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 on the basis of amortized cost,
which approximates market value.
Security transactions are accounted for on the date the
securities are purchased or sold. Interest income, including
amortization of discount and premium computed on a straight line
basis, is accrued daily.
- ---------------------------------------------------------------------
15 1996 Annual Report - Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
FEDERAL TAXES
Each fund is treated separately for federal income tax purposes.
Each fund intends to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and not
be subject to federal income tax. Therefore, no income tax
provision is required. In addition, on a calendar-year basis, the
funds will distribute substantially all of their taxable net
investment income and realized gains, if any, to avoid the
payment of any federal excise taxes.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income are
declared daily and reinvested in additional shares of the funds
monthly.
REPURCHASE AGREEMENTS
For repurchase agreements entered into with certain
broker-dealers, 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. Provisions
for all agreements ensure that the daily market value of the
collateral is in excess of the repurchase amount, including
accrued interest, to protect the funds in the event of a default.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
- ---------------------------------------------------------------------
16 1996 Annual Report - Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
make estimates and assumptions that affect the reported amounts
in the financial statements. Actual results could differ from
these estimates.
(3) INVESTMENT SECURITY TRANSACTIONS
................................................................................
Cost of purchases and proceeds from sales of securities for the
year ended September 30, 1996, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
---------------- --------------- ---------------
<S> <C> <C> <C>
Purchases ................................... $ 12,693,239,983 $ 4,991,309,840 $ 1,465,996,641
Proceeds from sales ......................... $ 12,447,032,364 $ 4,965,074,065 $ 1,458,849,137
</TABLE>
For the year ended September 30, 1996, no brokerage commissions
were paid to Piper Jaffray Inc., an affiliated broker.
(4) 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 on 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 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 quarterly fee for providing shareholder
services and distribution-related services. The fee is limited to
an annual rate of 0.30% of average daily net assets for each fund
and includes 0.25% payable as a servicing fee and 0.05% payable
as a distribution fee. For the year ended September 30, 1996,
Piper Jaffray voluntarily agreed to limit the fee to an annual
rate of 0.20% of each fund's average daily net assets.
- ---------------------------------------------------------------------
17 1996 Annual Report - Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
The company has also entered into shareholder account servicing
agreements under which Piper Jaffray and Piper Trust Company
perform various transfer and dividend disbursing agent services
for accounts held at the respective company. The fees, which are
paid monthly to Piper Jaffray and Piper Trust Company for
providing these services, are equal to an annual rate of $9.00
per active shareholder account and $6.00 per inactive account.
In addition to the investment management, distribution and
shareholder account servicing fees, each fund is responsible for
paying 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; insurance;
interest; taxes and other miscellaneous expenses.
Expenses paid indirectly represent a reduction of custodian fees
for earnings on cash balances maintained by the funds.
- ---------------------------------------------------------------------
18 1996 Annual Report - Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(5) FINANCIAL HIGHLIGHTS
................................................................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
MONEY MARKET FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Operations:
Net investment income ..................... 0.05 0.05 0.03 0.02 0.04
Distributions from net investment income .... (0.05) (0.05) (0.03) (0.02) (0.04)
-------- -------- -------- -------- --------
Net asset value, end of year ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return (a) ............................ 4.79% 5.05% 2.98% 2.45% 3.87%
Net assets at end of period (in millions) ... $ 1,966 $ 1,703 $ 1,185 $ 1,106 $ 1,096
Ratio of expenses to average daily net assets
(b) ....................................... 0.84% 0.92% 0.93% 0.96% 0.90%
Ratio of net investment income to average
daily net assets (b) ...................... 4.73% 4.94% 2.90% 2.42% 3.66%
</TABLE>
(A) 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.
(B) DURING THE YEARS REFLECTED ABOVE, THE DISTRIBUTOR VOLUNTARILY WAIVED FEES.
HAD THE MAXIMUM DISTRIBUTION FEE BEEN IN EFFECT, THE RATIOS OF EXPENSES AND
NET INVESTMENT INCOME TO AVERAGE DAILY NET ASSETS WOULD HAVE BEEN AS
FOLLOWS: 0.94%/4.63%, 1.02%/4.84%, 1.03%/2.80%, 1.06%/2.32% AND 1.00%/3.56%
IN FISCAL 1996, 1995, 1994, 1993 AND 1992, RESPECTIVELY. BEGINNING IN
FISCAL 1995, THE EXPENSE RATIOS REFLECT THE EFFECT OF GROSS EXPENSES PAID
INDIRECTLY BY THE FUND. PRIOR PERIOD EXPENSE RATIOS HAVE NOT BEEN ADJUSTED.
- ---------------------------------------------------------------------
19 1996 Annual Report - Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(5) FINANCIAL HIGHLIGHTS
(CONTINUED)
................................................................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
U.S. GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
-------------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Operations:
Net investment income ..................... 0.05 0.05 0.03 0.02 0.04
Distributions from net investment income .... (0.05) (0.05) (0.03) (0.02) (0.04)
------- ------- ------- ------- -------
Net asset value, end of year ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total return (a) ............................ 4.72% 4.99% 2.98% 2.51% 3.78%
Net assets at end of period (in millions) ... $ 291 $ 256 $ 185 $ 195 $ 191
Ratio of expenses to average daily net assets
(b) ....................................... 0.90% 0.91% 0.92% 0.93% 0.90%
Ratio of net investment income to average
daily net assets (b) ...................... 4.62% 4.90% 2.88% 2.41% 3.58%
</TABLE>
(A) 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.
(B) DURING THE YEARS REFLECTED ABOVE, THE DISTRIBUTOR VOLUNTARILY WAIVED FEES.
HAD THE MAXIMUM DISTRIBUTION FEE BEEN IN EFFECT, THE RATIOS OF EXPENSES AND
NET INVESTMENT INCOME TO AVERAGE DAILY NET ASSETS WOULD HAVE BEEN AS
FOLLOWS: 1.00%/4.52%, 1.01%/4.80%, 1.02%/2.78%, 1.03%/2.31% AND 1.00%/3.48%
IN FISCAL 1996, 1995, 1994, 1993 AND 1992, RESPECTIVELY. BEGINNING IN
FISCAL 1995, THE EXPENSE RATIOS REFLECT THE EFFECT OF GROSS EXPENSES PAID
INDIRECTLY BY THE FUND. PRIOR PERIOD EXPENSE RATIOS HAVE NOT BEEN ADJUSTED.
- ---------------------------------------------------------------------
20 1996 Annual Report - Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(5) FINANCIAL HIGHLIGHTS
(CONTINUED)
................................................................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
TAX-EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
-------------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Operations:
Net investment income ..................... 0.03 0.03 0.02 0.02 0.03
Distributions from net investment income
(a) ....................................... (0.03) (0.03) (0.02) (0.02) (0.03)
------- ------- ------- ------- -------
Net asset value, end of year ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total return (b) ............................ 2.80% 3.02% 1.82% 1.87% 3.07%
Net assets at end of period (in millions) ... $ 210 $ 206 $ 178 $ 169 $ 158
Ratio of expenses to average daily net assets
(c) ....................................... 0.90% 0.91% 0.90% 0.92% 0.88%
Ratio of net investment income to average
daily net assets (c) ...................... 2.76% 2.97% 1.80% 1.83% 2.91%
</TABLE>
(A) TAX-EXEMPT MONEY MARKET FUND DISTRIBUTIONS FROM NET INVESTMENT INCOME THAT
ARE TAXABLE FOR FEDERAL AND STATE INCOME TAX PURPOSES ARE $0.0001 AND
$0.0001 PER SHARE FOR FISCAL 1995 AND 1992, RESPECTIVELY.
(B) 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.
(C) DURING THE YEARS REFLECTED ABOVE, THE DISTRIBUTOR VOLUNTARILY WAIVED FEES.
HAD THE MAXIMUM DISTRIBUTION FEE BEEN IN EFFECT, THE RATIOS OF EXPENSES AND
NET INVESTMENT INCOME TO AVERAGE DAILY NET ASSETS WOULD HAVE BEEN AS
FOLLOWS: 1.00%/2.66%, 1.01%/2.87%, 1.00%/1.70%, 1.02%/1.73% AND 0.98%/2.81%
IN FISCAL 1996, 1995, 1994, 1993 AND 1992, RESPECTIVELY. BEGINNING IN
FISCAL 1995, THE EXPENSE RATIOS REFLECT THE EFFECT OF GROSS EXPENSES PAID
INDIRECTLY BY THE FUND. PRIOR PERIOD EXPENSE RATIOS HAVE NOT BEEN ADJUSTED.
- ---------------------------------------------------------------------
21 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET FUND September 30, 1996
.........................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
U.S. GOVERNMENT AND AGENCY SECURITIES (11.7%):
FEDERAL FARM CREDIT COUPON NOTES (0.6%):
4.95%, 3/3/97 ....................................... $12,000,000 $ 11,986,433
--------------
FEDERAL FARM CREDIT FLOATING RATE NOTES (B) (1.5%):
5.53%, 11/3/97 ...................................... 17,000,000 16,992,446
5.19%, 2/13/97 ...................................... 13,500,000 13,497,108
--------------
30,489,554
--------------
FEDERAL HOME LOAN BANK COUPON NOTES (0.2%):
5.31%, 12/12/96 ..................................... 4,305,000 4,303,450
--------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (B) (0.5%):
5.60%, 1/29/98 ...................................... 10,000,000 10,016,134
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION COUPON NOTES (0.4%):
7.88%, 12/20/96 ..................................... 8,000,000 8,039,580
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES (0.5%):
5.11%, 11/22/96 ..................................... 10,000,000 9,926,189
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION FLOATING RATE NOTES (B) (3.0%):
5.52%, 5/1/97 ....................................... 20,000,000 19,994,145
5.52%, 6/2/99 ....................................... 18,000,000 17,865,806
5.46%, 6/20/97 ...................................... 21,000,000 20,985,112
--------------
58,845,063
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION MEDIUM TERM NOTES (0.7%):
5.47%, 11/14/96 ..................................... 13,000,000 12,997,843
--------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE NOTES (B) (2.5%):
5.67%, 11/20/97 ..................................... 14,375,000 14,380,032
5.87%, 6/30/97 ...................................... 15,000,000 14,995,347
5.53%, 12/20/96 ..................................... 20,000,000 20,000,000
--------------
49,375,379
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
22 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
U.S. TREASURY NOTES AND BONDS (1.8%):
6.00%, 8/31/97 ...................................... $31,000,000 $ 31,068,655
5.75%, 9/30/97 ...................................... 3,601,000 3,592,576
--------------
34,661,231
--------------
Total U.S. Government and Agency Securities
(cost: $230,640,856) ........................... 230,640,856
--------------
OTHER U.S. GOVERNMENT AGENCY-BACKED (0.3%):
Downey Savings & Loan Association, LOC Federal Home
Loan Bank of San Francisco, 5.45%, 2/10/97
(cost: $5,390,092) ................................ 5,500,000 5,390,092
--------------
BANK NOTES (0.8%):
American Express Centurion Bank, 5.45%, 9/12/97
(cost: $15,000,000) ............................... 15,000,000(b) 15,000,000
--------------
BANKERS ACCEPTANCES (0.5%):
First Bank N.A., 5.30%, 11/12/96
(cost: $9,838,785) ................................ 9,900,000 9,838,785
--------------
CERTIFICATES OF DEPOSIT (3.2%):
Fifth Third Bancorp, 5.31%, 10/31/96 ................ 25,000,000 25,000,000
First Alabama Bank, 5.40%, 11/5/96 .................. 25,000,000 25,000,000
Mellon Bank Corp., 6.03%, 9/23/97 ................... 13,000,000 13,015,578
--------------
Total Certificates Of Deposit
(cost: $63,015,578) ............................ 63,015,578
--------------
CERTIFICATES OF DEPOSIT - YANKEE (6.6%):
Bank of Nova Scotia, 5.43%, 12/16/96 ................ 25,000,000 25,000,000
Bank of Scotland, 5.40%, 11/12/96 ................... 20,000,000 20,000,000
Bayerische Vereinsbank NY, 5.31%, 3/24/97 ........... 20,000,000 20,000,000
Canadian Imperial Bank of Commerce, 5.75%,
9/16/97 ........................................... 22,000,000 22,000,000
Deutsche Bank AG, 5.53%, 1/22/97 .................... 15,000,000 15,000,000
Swiss Bank, 5.53%, 12/18/96 ......................... 27,000,000 27,000,577
--------------
Total Certificates Of Deposit - Yankee
(cost: $129,000,577) ........................... 129,000,577
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
23 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
COMMERCIAL PAPER (76.1%):
AERODEFENSE/ELECTRONICS (1.6%):
Raytheon Co., 5.45%, 10/21/96 ....................... $11,500,000 $ 11,465,181
Rockwell International Corp., 5.30%, 10/29/96 ....... 20,000,000(c) 19,917,555
--------------
31,382,736
--------------
BUSINESS CREDIT INSTITUTIONS (9.5%):
Bell Atlantic Financial Services Inc., 5.48%,
10/8/96 ........................................... 15,000,000 14,984,017
BTR Dunlop Finance, Inc., 5.33%, 11/6/96 ............ 5,000,000(c) 4,973,350
BTR Dunlop Finance, Inc., 5.50%, 12/24/96 ........... 20,000,000(c) 19,743,333
Caterpillar Financial Services Corp., 5.30%,
10/28/96 .......................................... 3,500,000 3,486,088
Ford Motor Credit Co., 5.35%, 10/4/96 ............... 15,000,000 14,993,313
General Electric Capital Corp., 5.29%, 10/3/96 ...... 20,000,000 19,994,122
General Electric Capital Corp., 5.27%, 10/10/96 ..... 10,000,000 9,986,825
Mobil Australia Finance Co., 5.28%, 11/19/96 ........ 14,152,000(c) 14,050,294
Mobil Australia Finance Co., 5.30%, 10/31/96 ........ 15,000,000(c) 14,933,750
Pitney Bowes Credit Corp., 5.03%, 10/2/96 ........... 5,000,000 4,999,301
Pitney Bowes Credit Corp., 5.50%, 3/12/97 ........... 20,500,000 19,992,625
TECO Finance, Inc., 5.42%, 12/3/96 .................. 4,100,000(c) 4,061,112
TECO Finance, Inc., 5.35%, 12/13/96 ................. 13,500,000(c) 13,353,544
Toyota Motor Credit Corp., 5.30%, 10/16/96 .......... 9,910,000 9,888,115
Toyota Motor Credit Corp., 5.27%, 10/7/96 ........... 6,000,000 5,994,730
Toyota Motor Credit Corp., 5.33%, 10/21/96 .......... 12,000,000 11,964,467
--------------
187,398,986
--------------
CONSUMER HEALTH (0.5%):
Allergan, Inc., 5.37%, 10/15/96 ..................... 4,900,000 4,889,767
Allergan, Inc., 5.35%, 10/24/96 ..................... 5,500,000 5,481,201
--------------
10,370,968
--------------
CONSUMER NON-DURABLES (1.0%):
Sara Lee Corp., 5.30%, 10/15/96 ..................... 10,000,000 9,979,388
Sara Lee Corp., 5.30%, 10/21/96 ..................... 10,000,000 9,970,556
--------------
19,949,944
--------------
DIVERSIFIED CHEMICALS (4.7%):
Akzo Nobel, Inc., 5.27%, 10/31/96 ................... 14,000,000 13,938,516
Akzo Nobel, Inc., 5.56%, 12/11/96 ................... 15,000,000 14,835,516
duPont (E.I.) de Nemours & Co., 5.42%, 10/2/96 ...... 12,000,000(c) 11,998,193
duPont (E.I.) de Nemours & Co., 5.32%, 10/21/96 ..... 3,797,000(c) 3,785,778
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
24 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
Great Lakes Chemical Corp., 5.35%, 10/9/96 .......... $ 3,500,000(c) $ 3,495,839
Great Lakes Chemical Corp., 5.31%, 10/25/96 ......... 10,000,000(c) 9,964,600
Great Lakes Chemical Corp., 5.31%, 10/28/96 ......... 15,000,000(c) 14,940,263
Hoechst Corp., 5.85%, 10/1/96 ....................... 15,000,000(c) 15,000,000
Sinochem American C.P., Inc., LOC Credit Suisse,
5.40%, 10/15/96 ................................... 4,500,000 4,490,550
--------------
92,449,255
--------------
DIVERSIFIED ELECTRONICS (0.9%):
Minnesota Mining & Manufacturing Co., 5.30%,
10/1/96 ........................................... 17,200,000 17,200,000
--------------
ELECTRIC UTILITIES (2.5%):
Commed Fuel Co., Inc., LOC Canadian Imperial Bank of
Commerce, 5.30%, 10/24/96 ......................... 4,179,000 4,164,850
Commed Fuel Co., Inc., LOC Canadian Imperial Bank of
Commerce, 5.28%, 10/28/96 ......................... 6,601,000 6,574,860
Electricity Corp. of New Zealand, Ltd., 5.62%,
2/4/97 ............................................ 8,500,000 8,332,805
National Cooperative Services Corp., 5.42%,
11/18/96 .......................................... 10,000,000(c) 9,927,733
National Rural Utilities Cooperative Finance
Corporation, 5.33%, 11/13/96 ...................... 3,700,000 3,676,444
National Rural Utilities Cooperative Finance
Corporation, 5.27%, 10/7/96 ....................... 10,000,000 9,991,217
Wisconsin Electric Power Co., 5.30%, 10/29/96 ....... 6,000,000 5,975,267
--------------
48,643,176
--------------
ELECTRICAL EQUIPMENT (2.1%):
Dover Corp., 5.40%, 10/18/96 ........................ 8,000,000(c) 7,979,600
Dover Corp., 5.32%, 10/23/96 ........................ 14,225,000(c) 14,178,753
Dover Corp., 5.35%, 10/30/96 ........................ 7,000,000(c) 6,969,832
Hitachi America, Ltd., 5.27%, 10/8/96 ............... 10,000,000 9,989,753
Hitachi America, Ltd., 5.35%, 10/15/96 .............. 3,000,000 2,993,758
--------------
42,111,696
--------------
FINANCIAL AND REAL ESTATE INSTITUTIONS (11.0%):
Bass Finance (C.I.), Ltd., 5.47%, 12/9/96 ........... 13,934,000 13,787,913
Bass Finance (C.I.), Ltd., 5.48%, 12/9/96 ........... 10,851,000 10,737,028
Caisse des Depots et Consignations, 5.29%,
10/8/96 ........................................... 6,000,000(c) 5,993,828
Caisse des Depots et Consignations, 5.31%,
11/6/96 ........................................... 18,220,000(c) 18,123,252
Eksportfinans A/S, 5.37%, 12/9/96 ................... 8,400,000 8,313,543
Eksportfinans A/S, 5.58%, 12/18/96 .................. 5,121,000 5,059,143
Eksportfinans A/S, 5.47%, 12/20/96 .................. 9,676,000 9,558,383
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
25 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
Fletcher Challenge Finance USA, Inc., LOC National
Westminster Bank PLC, 5.30%, 10/25/96 ............. $10,000,000 $ 9,964,667
Hahn Issuing Corp., LOC Canadian Imperial Bank of
Commerce, 5.38%, 10/4/96 .......................... 5,900,000 5,897,355
Hahn Issuing Corp., LOC Canadian Imperial Bank of
Commerce, 5.35%, 10/9/96 .......................... 5,000,000 4,994,056
Hunt Resources, Inc., LOC Societe Generale, 5.30%,
10/28/96 .......................................... 3,000,000 2,988,075
JMG Funding L.P., LOC Societe Generale, 5.30%,
10/1/96 ........................................... 8,102,000 8,102,000
JMG Funding L.P., LOC Societe Generale, 5.46%,
10/9/96 ........................................... 7,923,000 7,913,387
Sunkyong America, Inc., LOC Credit Suisse,
5.33%, 11/8/96 .................................... 12,890,000 12,817,479
Sunkyong America, Inc., LOC Credit Suisse, 5.40%,
12/17/96 .......................................... 15,000,000 14,826,910
U.S. Prime Property, Inc., LOC ABN-AMRO Bank N.V.,
5.43%, 12/13/96 ................................... 20,622,000 20,394,935
U.S. Prime Property, Inc., LOC Westpac Banking Corp,
5.57%, 12/11/96 ................................... 3,860,000 3,817,597
U.S. Prime Property, Inc., LOC Westpac Banking Corp,
5.34%, 11/18/96 ................................... 22,500,000 22,339,800
USAA Capital Corp., 5.32%, 12/3/96 .................. 15,000,000 14,860,350
Weyerhaeuser Mortgage Co., 5.35%, 10/2/96 ........... 15,000,000 14,997,770
--------------
215,487,471
--------------
FOOD STORES (0.8%):
Albertson's, Inc., 5.30%, 10/18/96 .................. 15,000,000 14,962,458
--------------
FOOD AND BEVERAGE PRODUCTS (1.2%):
Campbell Soup Co., 5.43%, 10/4/96 ................... 10,000,000(c) 9,995,475
CPC International, Inc., 5.37%, 10/11/96 ............ 9,000,000(c) 8,986,575
PepsiCo, Inc., 5.35%, 10/15/96 ...................... 4,305,000(c) 4,296,043
--------------
23,278,093
--------------
FULL LINE INSURANCE (0.4%):
Associates Corp. of North America, 5.27%, 10/8/96 ... 7,000,000 6,992,827
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
26 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
GAS UTILITIES (1.3%):
Questar Corp., 5.31%, 10/15/96 ...................... $ 5,875,000 $ 5,862,868
Questar Corp., 5.35%, 10/23/96 ...................... 15,000,000 14,950,958
Questar Corp., 5.50%, 11/1/96 ....................... 4,300,000 4,279,635
--------------
25,093,461
--------------
HOTELS AND MOTELS (0.9%):
Accor, LOC Banque Nationale de Paris, 5.45%,
10/29/96 .......................................... 18,000,000 17,923,700
--------------
INDUSTRIAL CONGLOMERATE (3.4%):
Illinois Tool Works, Inc., 5.28%, 10/15/96 .......... 5,000,000 4,989,734
Illinois Tool Works, Inc., 5.33%, 10/22/96 .......... 8,500,000 8,473,572
Saint-Gobain (Compagnie de) S.A., 5.31%, 10/25/96 ... 30,000,000 29,893,800
Sandoz Corp., 5.34%, 12/2/96 ........................ 10,520,000 10,423,251
Sandoz Corp., 5.36%, 10/4/96 ........................ 3,915,000(c) 3,913,251
Sandoz Corp., 5.29%, 10/16/96 ....................... 10,000,000(c) 9,977,958
--------------
67,671,566
--------------
INSURANCE COMPANIES (1.7%):
Allianz of America Finance Corp., 5.36%, 10/10/96 ... 7,895,000(c) 7,884,421
Allianz of America Finance Corp., 5.32%, 10/11/96 ... 8,445,000(c) 8,432,520
Allianz of America Finance Corp., 5.45%, 10/17/96 ... 11,700,000(c) 11,671,660
Allianz of America Finance Corp., 5.45%, 12/2/96 .... 6,000,000(c) 5,943,683
--------------
33,932,284
--------------
MINING AND MINERAL RELATED (1.6%):
RTZ America, Inc., 5.36%, 10/17/96 .................. 18,000,000(c) 17,957,120
U.S. Borax, Inc., 5.45%, 12/3/96 .................... 13,000,000(c) 12,876,013
--------------
30,833,133
--------------
MONEY CENTER BANKS (11.2%):
Abbey National North America, 5.32%, 11/4/96 ........ 15,000,000 14,924,633
Abbey National North America, 5.44%, 3/26/97 ........ 14,202,000 13,824,290
ABN-AMRO North America Finance, Inc., 5.09%,
10/11/96 .......................................... 11,000,000 10,984,447
Banc One Corp., 5.85%, 10/1/96 ...................... 8,208,000(c) 8,208,000
Banc One Corp., 5.29%, 10/24/96 ..................... 17,500,000(c) 17,440,855
Bank of New York Co., Inc., 5.28%, 10/1/96 .......... 7,370,000 7,370,000
Bank of New York Co., Inc., 5.30%, 10/2/96 .......... 15,000,000 14,997,792
Bank of New York Co., Inc., 5.35%, 10/10/96 ......... 8,236,000 8,224,984
Bayerische Vereinsbank AG, 5.45%, 11/19/96 .......... 4,600,000 4,565,877
BNP Canada, 5.30%, 11/25/96 ......................... 5,000,000 4,959,514
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
27 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
Commerzbank U.S. Finance, Inc., 5.60%, 2/6/97 ....... $ 5,000,000 $ 4,900,444
Commonwealth Bank of Australia, 5.30%, 11/14/96 ..... 20,943,000 20,807,336
Commonwealth Bank of Australia, 5.29%, 11/15/96 ..... 8,135,000 8,081,207
Den Danske Corp., Inc., 5.33%, 10/21/96 ............. 4,495,000 4,481,690
Den Danske Corp., Inc., 5.45%, 2/24/97 .............. 10,000,000 9,778,972
Dresdner U.S. Finance, Inc., 5.31%, 10/16/96 ........ 5,285,000 5,273,307
Generale Bank, Inc., 5.47%, 12/10/96 ................ 5,000,000 4,946,819
Kredietbank N.A. Finance Corp., 5.35%, 11/18/96 ..... 8,000,000 7,942,933
National Westminister Bank of Canada, 5.35%,
12/16/96 .......................................... 6,405,000 6,332,659
National Westminister Bank of Canada, 5.60%,
1/16/97 ........................................... 13,350,000 13,127,797
Royal Bank of Canada, 5.38%, 12/31/96 ............... 7,000,000 6,904,804
Royal Bank of Canada, 5.62%, 1/23/97 ................ 8,650,000 8,496,059
Western Australian Treasury Corp., 5.33%,
11/20/96 .......................................... 3,200,000 3,176,311
Western Australian Treasury Corp., 5.30%,
12/18/96 .......................................... 10,000,000 9,885,168
--------------
219,635,898
--------------
OFFICE AND INDUSTRIAL SERVICES (1.2%):
WMX Technologies, Inc., 5.44%, 11/19/96 ............. 8,400,000(c) 8,337,802
WMX Technologies, Inc., 5.35%, 11/21/96 ............. 14,620,000(c) 14,509,193
--------------
22,846,995
--------------
OIL INTEGRATED INTERNATIONAL (2.7%):
Petrofina (De), Inc., 5.33%, 10/25/96 ............... 11,465,000 11,424,261
Petrofina (De), Inc., 5.44%, 12/10/96 ............... 10,000,000 9,894,222
Repsol International Finance B.V., 5.48%,
12/30/96 .......................................... 20,000,000 19,726,000
Shell Oil Co., 5.34%, 10/9/96 ....................... 12,000,000 11,985,760
--------------
53,030,243
--------------
PAPER (1.0%):
Sonoco Products Co., 5.34%, 10/22/96 ................ 20,000,000 19,937,700
--------------
PHARMACEUTICALS (3.7%):
Lilly (Eli) & Co., 5.28%, 10/29/96 .................. 25,000,000 24,897,333
Lilly (Eli) & Co., 5.30%, 10/1/96 ................... 23,400,000(c) 23,400,000
Merck & Co., Inc., 5.32%, 10/23/96 .................. 3,300,000(c) 3,289,271
Pfizer, Inc., 5.34%, 10/11/96 ....................... 22,000,000(c) 21,967,367
--------------
73,553,971
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
28 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
PRINT MEDIA/PUBLISHING (0.8%):
Gannett Co., 5.47%, 10/16/96 ........................ $12,000,000(c) $ 11,972,650
Gannett Co., 5.50%, 10/22/96 ........................ 4,700,000(c) 4,684,921
--------------
16,657,571
--------------
SECURITIES BROKER (4.6%):
Goldman Sachs Group, L.P., 5.37%, 10/3/96 ........... 20,000,000 19,994,032
Goldman Sachs Group, L.P., 5.33%, 10/16/96 .......... 10,000,000 9,977,792
Merrill Lynch & Co., Inc., 5.44%, 3/7/97 ............ 10,000,000 9,762,756
Merrill Lynch & Co., Inc., 5.35%, 10/30/96 .......... 20,000,000 19,913,806
Merrill Lynch & Co., Inc., 5.47%, 2/12/97 ........... 1,900,000 1,861,315
Morgan Stanley Group, Inc., 5.29%, 11/19/96 ......... 11,965,000 11,878,849
Morgan Stanley Group, Inc., 5.32%, 10/7/96 .......... 17,111,000 17,095,828
--------------
90,484,378
--------------
SEMICONDUCTORS/ELECTRONICS (0.9%):
Motorola, Inc., 5.33%, 10/8/96 ...................... 16,842,000 16,824,545
--------------
SOVEREIGN CREDITS (1.2%):
Quebec (Province of), 5.34%, 12/17/96 ............... 9,500,000 9,391,494
Quebec (Province of), 5.32%, 10/1/96 ................ 15,000,000 15,000,000
--------------
24,391,494
--------------
TELECOMMUNICATIONS (1.1%):
Ameritech Capital Funding Corp., 5.40%, 10/28/96 .... 9,748,000(c) 9,708,521
Ameritech Capital Funding Corp., 5.30%, 10/30/96 .... 12,670,000(c) 12,615,906
--------------
22,324,427
--------------
TEXTILES/APPAREL (0.2%):
Wool International, 5.48%, 12/4/96 .................. 3,200,000 3,168,825
--------------
TIRES/AUTO PARTS (1.7%):
Echlin, Inc., 5.37%, 10/7/96 ........................ 10,000,000 9,991,050
Echlin, Inc., 5.31%, 10/18/96 ....................... 10,000,000 9,974,925
Nippondenso America, Inc., 5.35%, 11/25/96 .......... 13,000,000 12,893,743
--------------
32,859,718
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
29 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- --------------
<S> <C> <C>
TRANSPORTATION (0.7%):
Norfolk Southern Corp., 5.45%, 10/16/96 ............. $13,772,000(c) $ 13,740,726
--------------
Total Commercial Paper
(cost: $1,495,138,245) ......................... 1,495,138,245
--------------
CORPORATE BONDS (0.3%):
Associates Corp. of North America, 5.88%, 8/15/97
(cost: $4,993,444) ................................ 5,000,000 4,993,444
--------------
REPURCHASE AGREEMENTS (0.6%):
Repurchase agreement with Morgan Stanley, acquired on
9/27/96, interest of $11,268, 5.34%, 10/4/96
(cost: $10,852,000) ............................... 10,852,000(d) 10,852,000
--------------
Total Investments in Securities
(cost: $1,963,869,577) (e) ..................... $1,963,869,577
--------------
--------------
</TABLE>
<TABLE>
<S> <C>
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, 1996. THE MATURITY DATE REPRESENTS
FINAL MATURITY. HOWEVER, FOR PURPOSES OF RULE 2A-7, MATURITY DATE IS THE
NEXT INTEREST RATE RESET DATE.
(C) SECURITIES SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM, 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". SUBJECT TO APPROVAL BY THE BOARD OF
DIRECTORS, THESE SECURITIES ARE TREATED AS LIQUID AFTER HAVING BEEN
DETERMINED TO BE LIQUID BY THE ADVISER AND REPRESENT 23.7% OF NET ASSETS ON
SEPTEMBER 30, 1996.
(D) REPURCHASE AGREEMENT IN A TRI-PARTY ACCOUNT WHICH IS COLLATERALIZED BY U.S.
GOVERNMENT AGENCY SECURITIES. ACCRUED INTEREST SHOWN REPRESENTS INTEREST
DUE AT MATURITY OF THE REPURCHASE AGREEMENT. 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) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES.
</TABLE>
- ---------------------------------------------------------------------
30 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND September 30, 1996
.......................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- --------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
U.S. GOVERNMENT AND AGENCY SECURITIES (65.6%):
FEDERAL FARM CREDIT BANK DISCOUNT NOTES (3.2%):
5.21%, 10/29/96 ..................................... $9,340,000 $ 9,302,152
------------
FEDERAL FARM CREDIT FLOATING RATE NOTES (B) (1.4%):
5.19%, 2/13/97 ...................................... 4,000,000 3,999,143
------------
FEDERAL HOME LOAN BANK COUPON NOTES (3.5%):
5.56%, 11/1/96 ...................................... 3,720,000 3,719,859
5.71%, 5/29/97 ...................................... 6,500,000 6,496,110
------------
10,215,969
------------
FEDERAL HOME LOAN BANK DISCOUNT NOTES (5.1%):
5.25%, 10/28/96 ..................................... 3,395,000 3,381,632
5.24%, 11/20/96 ..................................... 4,000,000 3,970,889
5.40%, 12/20/96 ..................................... 2,600,000 2,568,800
5.48%, 1/14/97 ...................................... 3,000,000 2,952,050
5.48%, 1/17/97 ...................................... 2,000,000 1,967,120
------------
14,840,491
------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (B) (2.7%):
5.35%, 11/21/96 ..................................... 8,000,000 7,999,733
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION COUPON NOTES (4.2%):
7.69%, 12/16/96 ..................................... 2,000,000 2,010,168
7.88%, 12/20/96 ..................................... 7,090,000 7,125,467
5.56%, 11/7/96 ...................................... 3,000,000 2,999,870
------------
12,135,505
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION DISCOUNT NOTES (7.6%):
5.70%, 10/1/96 ...................................... 2,601,000 2,601,000
5.36%, 10/7/96 ...................................... 3,000,000 2,997,320
5.22%, 10/10/96 ..................................... 3,000,000 2,996,085
5.23%, 10/21/96 ..................................... 3,650,000 3,639,395
5.40%, 12/13/96 ..................................... 5,000,000 4,945,250
5.41%, 12/24/96 ..................................... 5,000,000 4,936,883
------------
22,115,933
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
31 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- --------- ------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION COUPON NOTES (0.5%):
7.05%, 10/10/96 ..................................... $1,580,000 $ 1,580,543
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES (13.3%):
5.36%, 10/17/96 ..................................... 4,000,000 3,990,471
5.12%, 11/20/96 ..................................... 5,000,000 4,964,444
5.23%, 11/21/96 ..................................... 5,000,000 4,962,954
5.42%, 12/2/96 ...................................... 5,000,000 4,953,328
5.36%, 12/13/96 ..................................... 5,000,000 4,945,656
5.40%, 12/19/96 ..................................... 8,000,000 7,905,200
5.41%, 12/27/96 ..................................... 5,000,000 4,934,629
5.11%, 11/22/96 ..................................... 2,000,000 1,985,238
------------
38,641,920
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION FLOATING RATE NOTES (B) (6.5%):
5.51%, 10/4/96 ...................................... 7,000,000 7,000,000
5.52%, 5/1/97 ....................................... 5,000,000 4,998,536
5.52%, 6/2/99 ....................................... 3,000,000 2,981,391
5.46%, 6/20/97 ...................................... 4,000,000 3,997,165
------------
18,977,092
------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE NOTES (B) (7.4%):
5.49%, 11/24/97 ..................................... 7,400,000 7,400,000
5.67%, 11/20/97 ..................................... 5,000,000 5,000,000
5.87%, 6/30/97 ...................................... 4,000,000 3,998,759
5.53%, 12/20/96 ..................................... 5,000,000 5,000,000
------------
21,398,759
------------
U.S. TREASURY NOTES AND BONDS (10.2%):
8.75%, 10/15/97 ..................................... 4,000,000 4,109,868
6.88%, 2/28/97 ...................................... 12,000,000 12,073,942
6.63%, 3/31/97 ...................................... 3,000,000 3,015,364
6.00%, 8/31/97 ...................................... 7,000,000 7,016,686
8.50%, 4/15/97 ...................................... 3,300,000 3,349,410
------------
29,565,270
------------
Total U.S. Government and Agency Securities
(cost: $190,772,510) ........................... 190,772,510
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
32 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- --------- ------------
<S> <C> <C>
OTHER U.S. GOVERNMENT AGENCY-BACKED (7.6%):
Downey Savings & Loan Association, LOC Federal Home
Loan Bank of San Francisco, 5.45%, 2/10/97 ........ $5,000,000 $ 4,900,083
Fidelity Federal Bank, LOC Federal Home Loan Bank of
San Francisco, 5.35%, 10/1/96 ..................... 2,700,000 2,700,000
Western Financial Savings Bank, LOC Federal Home Loan
Bank of San Francisco, 5.30%, 10/10/96 ............ 14,500,000 14,480,788
------------
Total Other U.S. Government Agency-Backed
(cost: $22,080,871) ............................ 22,080,871
------------
REPURCHASE AGREEMENTS (26.4%):
Repurchase agreement with Goldman Sachs, acquired on
8/21/96, interest of $63,840, 5.32%, 11/19/96 ..... 4,800,000(c)(d) 4,800,000
Repurchase agreement with Goldman Sachs, acquired on
9/4/96, interest of $40,573, 5.37%, 10/8/96 ....... 8,000,000(c)(d) 8,000,000
Repurchase agreement with Morgan Stanley, acquired on
8/12/96, interest of $44,417, 5.33%, 10/11/96 ..... 5,000,000(c)(d) 5,000,000
Repurchase agreement with Morgan Stanley, acquired on
8/5/96, interest of $67,871, 5.37%, 11/4/96 ....... 5,000,000(c)(d) 5,000,000
Repurchase agreement with Morgan Stanley, acquired on
9/12/96, interest of $12,413, 5.32%, 10/3/96 ...... 4,000,000(c) 4,000,000
Repurchase agreement with Morgan Stanley, acquired on
9/26/96, interest of $13,350, 5.34%, 10/2/96 ...... 15,000,000(c) 15,000,000
Repurchase agreement with Morgan Stanley, acquired on
9/26/96, interest of $20,767, 5.34%, 10/3/96 ...... 20,000,000(c) 20,000,000
Repurchase agreement with Morgan Stanley, acquired on
9/27/96, interest of $15,575, 5.34%, 10/4/96 ...... 15,000,000(c) 15,000,000
------------
Total Repurchase Agreements
(cost: $76,800,000) ............................ 76,800,000
------------
Total Investments in Securities
(cost: $289,653,381) (e) ....................... $289,653,381
------------
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
33 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
<TABLE>
<S> <C> <C>
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, 1996. THE MATURITY DATE REPRESENTS
FINAL MATURITY. HOWEVER, FOR PURPOSES OF RULE 2A-7, MATURITY DATE IS THE
NEXT INTEREST RATE RESET DATE.
(C) REPURCHASE AGREEMENT IN A TRI-PARTY ACCOUNT WHICH IS COLLATERALIZED BY U.S.
GOVERNMENT AGENCY SECURITIES. ACCRUED INTEREST SHOWN REPRESENTS INTEREST
DUE AT MATURITY OF THE REPURCHASE AGREEMENT. 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 7.8% OF NET ASSETS.
(E) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES.
</TABLE>
- ---------------------------------------------------------------------
34 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY MARKET FUND September 30, 1996
.........................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
TAX-EXEMPT SECURITIES (B) (99.3%):
ECONOMIC DEVELOPMENT REVENUE (2.7%):
Bloomington, MN, Port Authority, VRDN, 3.90%,
2/1/13 ............................................ $ 800,000(c) $ 800,000
Denver, CO, Urban Renewal Authority, 4.00%,
2/15/97 ........................................... 2,790,000 2,790,000
Illinois Development and Finance Authority, Series 9,
VRDN, 4.15%, 11/7/04 .............................. 1,000,000(c) 1,000,000
Indianapolis, IN, VRDN, 3.85%, 4/1/05 ............... 995,000(c) 995,000
------------
5,585,000
------------
EDUCATION REVENUE (4.9%):
Illinois Development and Finance Authority, VRDN,
3.90%, 8/1/26 ..................................... 4,000,000(c) 4,000,000
Minnesota State Higher Education Facilities
Authority, VRDN, 3.80%, 3/1/24 .................... 1,250,000(c) 1,250,000
Orange County, FL, School District, 4.25%,
4/15/97 ........................................... 5,000,000 5,016,696
------------
10,266,696
------------
ELECTRIC REVENUE (1.6%):
Jacksonville, FL, 3.60%, 12/13/96 ................... 2,000,000 2,000,000
Texas Municipal Power Agency, 14.63%, 3/1/97 ........ 1,185,000 1,238,640
------------
3,238,640
------------
GENERAL OBLIGATIONS (19.2%):
Georgia State, 5.80%, 3/1/97 ........................ 3,000,000 3,025,432
Georgia State, Series B, 6.25%, 4/1/97 .............. 5,000,000 5,069,758
Mankato, MN, VRDN, 3.60%, 2/1/18 .................... 1,000,000(c) 1,000,000
Missouri State Health and Educational Facilities
Authority, 4.50%, 1/15/97 ......................... 5,000,000 5,006,932
Montgomery County, MD, 7.30%, 4/1/97 ................ 500,000 509,074
New York City, NY, Series B, VRDN, 4.00%, 10/1/20 ... 100,000(c) 100,000
New York City, NY, Subseries A-10, VRDN, 4.00%,
8/1/16 ............................................ 2,600,000(c) 2,600,000
New York City, NY, Subseries A-10, VRDN, 4.00%,
8/1/17 ............................................ 1,500,000(c) 1,500,000
New York City, NY, Subseries A-10, VRDN, 4.00%,
8/15/17 ........................................... 500,000(c) 500,000
New York City, NY, Subseries B-4, VRDN, 4.00%,
8/15/22 ........................................... 4,100,000(c) 4,100,000
New York City, NY, Subseries B-4, VRDN, 4.00%,
8/15/23 ........................................... 300,000(c) 300,000
New York City, NY, Subseries B-4, VRDN, 4.00%,
8/15/21 ........................................... 600,000(c) 600,000
Olathe, KS, 4.50%, 6/1/97 ........................... 3,600,000 3,613,874
Orlando, FL, 3.70%, 10/9/96 ......................... 3,500,000 3,500,000
Pierce County, WA, School District, 3.90%, 6/1/97 ... 900,000 900,573
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
35 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
Red Wing, MN, ISD, 3.57%, 3/27/97 ................... $1,410,000 $ 1,410,661
Richfield, MN, ISD, VRDN, 4.10%, 2/1/10 ............. 1,200,000(c)(d) 1,200,000
Richfield, MN, ISD, VRDN, 4.10%, 2/1/12 ............. 1,000,000(c)(d) 1,000,000
Roswell, GA, 4.50%, 2/1/97 .......................... 1,000,000 1,003,413
Wisconsin State, 3.30%, 11/1/96 ..................... 1,750,000 1,750,000
Wisconsin State, Series C, 4.50%, 5/1/97 ............ 1,700,000 1,706,679
------------
40,396,396
------------
HEALTH/HOSPITAL/NURSING HOME (27.0%):
Alaska Industrial Development Authority, VRDN,
3.70%, 6/1/10 ..................................... 3,675,000(c) 3,675,000
Colorado Health Facilities Authority, Boulder
Hospital, VRDN, 3.80%, 10/1/14 .................... 5,640,000(c) 5,640,000
Flint, MI, Hospital Building Authority, VRDN, 3.85%,
7/1/15 ............................................ 2,100,000(c) 2,100,000
Grand Forks, ND, Health Care, United Hospital, VRDN,
3.95%, 12/1/16 .................................... 1,500,000(c) 1,500,000
Grand Forks, ND, Health Care, United Hospital, VRDN,
3.95%, 12/1/25 .................................... 1,400,000(c) 1,400,000
Idaho Health Facilities Authority, St. Luke's, VRDN,
3.95%, 5/1/22 ..................................... 4,515,000(c) 4,515,000
Illinois Development and Finance Authority, VRDN,
3.85%, 3/1/15 ..................................... 1,800,000(c) 1,800,000
Illinois Health Facilities Authority, VDRN, 3.85%,
1/1/16 ............................................ 1,950,000(c) 1,950,000
Illinois Health Facilities Authority, VDRN, 3.85%,
1/1/16 ............................................ 305,000(c) 305,000
Illinois Health Facilities Authority, VRDN, 3.85%,
1/1/16 ............................................ 1,900,000(c) 1,900,000
Illinois Health Facilities Authority, VRDN, 3.80%,
12/1/15 ........................................... 1,300,000(c) 1,300,000
Indiana Health Facilities Authority, VRDN, 3.85%,
11/1/09 ........................................... 900,000(c) 900,000
Indiana Health Facilities Authority, VRDN, 3.85%,
12/1/10 ........................................... 2,070,000(c) 2,070,000
Indiana Hospital Equipment Finance Authority, VRDN,
3.85%, 12/1/15 .................................... 7,835,000(c) 7,835,000
Minneapolis and St. Paul, MN, Housing & Redevelopment
Authority, 3.70%, 11/15/96 ........................ 3,000,000 2,999,278
Minnesota Agriculture and Economic Development Board,
VRDN, 3.85%, 9/1/20 ............................... 2,000,000(c) 2,000,000
Rochester, MN, Health Care, Mayo Medical Center,
3.40%, 10/24/96 ................................... 3,800,000 3,800,000
Washington State Health Care Facilities Authority,
VRDN, 3.95%, 1/1/18 ............................... 2,850,000(c) 2,850,000
Wisconsin Health and Education Facilities Authority,
VRDN, 3.85%, 6/1/19 ............................... 7,820,000(c) 7,820,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
36 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
Wisconsin State Health Facilities, VRDN, 3.75%,
1/1/16 ............................................ $ 300,000(c) $ 300,000
------------
56,659,278
------------
INDUSTRIAL DEVELOPMENT REVENUE (12.1%):
Evansville, IN, VRDN, 3.95%, 9/1/04 ................. 2,500,000(c) 2,500,000
Henderson, NV, Public Improvement, VRDN, 4.25%,
4/1/07 ............................................ 1,500,000(c)(d) 1,500,000
Illinois Development and Finance Authority, VRDN,
4.05%, 10/1/06 .................................... 840,000(c)(d) 840,000
Illinois Development and Finance Authority, VRDN,
4.25%, 4/1/15 ..................................... 2,315,000(c) 2,315,000
Indiana State Development Financial Authority, VRDN,
4.00%, 9/1/30 ..................................... 2,000,000(c) 2,000,000
Indiana State Employment, VRDN, 3.60%, 2/1 -
3/1/09 ............................................ 4,000,000(c) 4,000,000
Minneapolis, MN, Commercial Development, VRDN, 3.60%,
9/1/13 ............................................ 1,300,000(c) 1,300,000
Port Kalama, WA, VRDN, 3.80%, 1/1/04 ................ 1,195,000(c) 1,195,000
Tremonton, UT, VRDN, 4.25%, 6/1/00 .................. 1,100,000(c)(d) 1,100,000
Warren County, OH, VRDN, 4.25%, 9/1/15 .............. 7,650,000(c) 7,650,000
Wells, MN, 4.00%, 12/1/96 ........................... 995,000 995,000
------------
25,395,000
------------
LEASING REVENUE (6.4%):
Metro Government Nashville and Davidson Counties, TN,
VRDN, 3.50%, 12/1/14 .............................. 2,500,000(c) 2,500,000
Pendleton County, KY, Multi-County Lease Revenue,
3.60%, 10/7/96 .................................... 4,390,000 4,390,000
Pendleton County, KY, Multi-County Lease Revenue,
3.70%, 12/4/96 .................................... 6,500,000 6,500,000
------------
13,390,000
------------
MULTIFAMILY HOUSING (2.9%):
New Hampshire State HFA, VRDN, 3.90%, 5/1/25 ........ 2,500,000(c)(d) 2,500,000
South Dakota HDA, Homeownership Series B, 3.65%,
11/1/96 ........................................... 3,650,000 3,650,000
------------
6,150,000
------------
OTHER REVENUE (5.9%):
Colorado State General Fund, 4.50%, 6/27/97 ......... 3,675,000 3,691,388
Texas State TRANS, 4.75%, 8/29/97 ................... 3,660,000 3,686,803
Wisconsin State Operating Notes, 4.50%, 6/16/97 ..... 5,000,000 5,022,841
------------
12,401,032
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
37 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------- ------------
<S> <C> <C>
SALES TAX REVENUE (1.2%):
Illinois State, 6.95%, 6/15/97 ...................... $2,500,000 $ 2,551,468
------------
SINGLE FAMILY HOUSING (7.1%):
Iowa HFA, 3.70%, 11/1/96 ............................ 510,000 510,000
Iowa HFA, 3.70%, 11/1/96 ............................ 2,955,000 2,955,000
Iowa HFA, VRDN, 4.13%, 1/1/15 ....................... 1,540,000(c) 1,540,000
Minnesota HFA, Series A, VRDN, 3.69%, 2/15/15 ....... 8,800,000(c) 8,800,000
Montana Board of Housing, 3.60%, 10/1/96 ............ 605,000 605,000
Utah State HFA, 3.90%, 1/1/97 ....................... 495,000 495,000
------------
14,905,000
------------
TRANSPORTATION REVENUE (0.2%):
Maryland State Department of Transportation, 6.80%,
11/15/96 .......................................... 500,000 505,708
------------
WATER/POLLUTION CONTROL REVENUE (8.1%):
Clairborne County, MS, 3.50%, 10/4/96 ............... 1,925,000 1,925,000
Clark County, KY, 3.50%, 10/15/96 ................... 3,000,000 3,000,000
Custer County, ID, 3.25%, 10/1/96 ................... 1,500,000 1,500,000
East Baton Rouge Parish, LA, VRDN, 3.80%, 10/1/99 ... 1,000,000(c) 1,000,000
Illinois Development and Finance Authority, VRDN,
3.90%, 11/1/28 .................................... 1,100,000(c) 1,100,000
Jacksonville, FL, 3.60%, 12/12/96 ................... 2,200,000 2,200,000
Moffat County, CO, VRDN, 3.95%, 7/1/10 .............. 2,000,000(c) 2,000,000
New York City, NY, Municipal Water Authority, VRDN,
4.00%, 6/15/25 .................................... 1,350,000(c) 1,350,000
York County, SC, 3.65%, 2/15/97 ..................... 2,895,000 2,895,000
------------
16,970,000
------------
Total Tax-Exempt Securities
(cost: $208,414,218) (e) ....................... 208,414,218
------------
Total Investments in Securities
(cost: $208,414,218) ........................... $208,414,218
------------
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
38 1996 Annual Report - Cash Management Funds
<PAGE>
Investments in Securities (continued)
- ---------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) PORTFOLIO ABBREVIATIONS AND DEFINITIONS:
HDA - HOUSING DEVELOPMENT AUTHORITY
HFA - HOUSING FINANCE AUTHORITY
ISD - INDEPENDENT SCHOOL DISTRICT
TRANS - TAX AND REVENUE ANTICIPATION NOTE
VRDN - VARIABLE RATE DEMAND NOTE
(C) INTEREST RATE VARIES TO REFLECT CURRENT MARKET CONDITIONS; RATE SHOWN IS
THE EFFECTIVE RATE ON SEPTEMBER 30, 1996. THE MATURITY DATE REPRESENTS
FINAL MATURITY. HOWEVER, FOR PURPOSES OF RULE 2A-7, THE MATURITY DATE IS
EQUAL TO THE LONGER OF THE PERIOD REMAINING UNTIL THE NEXT READJUSTMENT OF
THE INTEREST RATE OR THE PERIOD REMAINING UNTIL THE PRINCIPAL AMOUNT CAN BE
RECOVERED THROUGH DEMAND.
(D) SECURITIES SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT FROM
REGISTRATION UNDER SECTION 4(2) AND UNDER RULE 144A OF THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY BE SOLD TO ONLY TO DEALERS IN THAT PROGRAM OR
OTHER "ACCREDITED INVESTORS". SUBJECT TO APPROVAL BY THE BOARD OF
DIRECTORS, THESE SECURITIES ARE TREATED AS LIQUID AFTER HAVING BEEN
DETERMINED TO BE LIQUID BY THE ADVISER AND REPRESENTS 3.9% OF NET ASSETS ON
SEPTEMBER 30, 1996.
(E) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES.
</TABLE>
- ---------------------------------------------------------------------
39 1996 Annual Report - Cash Management Funds
<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 schedules 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, 1996, 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 funds'
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. 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, 1996, and the results of their operations, the changes in
their net assets 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
October 25, 1996
- ---------------------------------------------------------------------
40 1996 Annual Report - Cash Management Funds
<PAGE>
Federal Income Tax Information
- ----------------------------------------
The following per-share information describes the federal tax
treatment of distributions made during the fiscal year.
Distributions for the calendar year will be reported to you on
Form 1099-DIV. Please consult a tax adviser on how to report
these distributions at the state and local levels.
INCOME DISTRIBUTIONS
<TABLE>
<CAPTION>
U.S.
GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY
MARKET MARKET MARKET
PAYABLE DATE FUND (A) FUND (A) FUND (B)
- --------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
October 21, 1995 ............................ $0.0042 $0.0041 $0.0025
November 21, 1995 ........................... 0.0040 0.0040 0.0024
December 21, 1995 ........................... 0.0040 0.0040 0.0024
January 5, 1996 ............................. 0.0015 0.0014 0.0010
January 22, 1996 ............................ 0.0026 0.0026 0.0016
February 20, 1996 ........................... 0.0040 0.0039 0.0022
March 20, 1996 .............................. 0.0036 0.0036 0.0020
April 20, 1996 .............................. 0.0038 0.0038 0.0022
May 20, 1996 ................................ 0.0037 0.0037 0.0024
June 20, 1996 ............................... 0.0039 0.0038 0.0023
July 20, 1996 ............................... 0.0038 0.0037 0.0020
August 20, 1996 ............................. 0.0039 0.0039 0.0023
September 20, 1996 .......................... 0.0039 0.0038 0.0023
-------- -------- --------
Total ................................... $0.0469 $0.0463 $0.0276
-------- -------- --------
-------- -------- --------
</TABLE>
(A) TAXABLE AS ORDINARY DIVIDENDS, NONE QUALIFYING FOR DEDUCTION BY
CORPORATIONS
(B) INCOME FROM TAX-EXEMPT SECURITIES, 100.00% QUALIFYING AS EXEMPT-INTEREST
DIVIDENDS.
- ---------------------------------------------------------------------
41 1996 Annual Report - Cash Management Funds
<PAGE>
Directors and Officers
- ----------------------------------------
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 JAFFRAY COMPANIES INC., PIPER
CAPITAL MANAGEMENT INCORPORATED
Karol D. Emmerich, PRESIDENT, THE PARACLETE GROUP
Luella G. Goldberg, DIRECTOR, TCF FINANCIAL, RELIASTAR FINANCIAL
CORP., HORMEL FOODS CORP.
David A. Hughey, RETIRED EXECUTIVE VICE PRESIDENT AND CHIEF
ADMINISTRATIVE OFFICER OF DEAN WITTER INTERCAPITAL INC. AND
DEAN WITTER TRUST CO.
George Latimer, CHIEF EXECUTIVE OFFICER, NATIONAL EQUITY FUNDS
OFFICERS
William H. Ellis,
CHAIRMAN OF THE BOARD
Paul A. Dow,
PRESIDENT
Robert H. Nelson,
VICE PRESIDENT AND TREASURER
Susan Sharp Miley,
SECRETARY
INVESTMENT ADVISER
Piper Capital Management Incorporated
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804
DISTRIBUTOR
Piper Jaffray Inc.
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804
CUSTODIAN AND TRANSFER AGENT
Investors Fiduciary Trust Company
127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
4200 NORWEST CENTER, MINNEAPOLIS, MN 55402
LEGAL COUNSEL
Dorsey & Whitney LLP
220 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402
- --------------------------------------------------------------------------------
42 1996 Annual Report - Cash Management Funds
<PAGE>
AS A SHAREHOLDER IN
PIPER FUNDS, YOU
HAVE ACCESS TO A
FULL RANGE OF
SERVICES AND
BENEFITS. CHECK
YOUR PROSPECTUS FOR
DETAILS ABOUT
SERVICES AND ANY
LIMITATIONS THAT
MIGHT APPLY TO
YOUR FUND.
- ----------------------
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
LOW MINIMUM INVESTMENTS
You can open a Piper Fund account with a minimum investment of $250.
QUANTITY DISCOUNTS
If your initial investment exceeds a specified amount, if an investment combined
with the value of your existing Piper shares exceeds a specified amount, or if
your investments combined during a 13-month period exceed a specified amount,
you can reduce or even eliminate the front-end sales charge.
WAIVER OF SALES CHARGES
Money market funds carry no sales charges.* Sales charges on other Piper Funds
are waived on purchases of $500,000 or more. However, a contingent deferred
sales charge may be imposed. See your prospectus for details.
AUTOMATIC REINVESTMENT OF DIVIDENDS
For maximum growth of your assets, you can reinvest dividends and capital gains
automatically in additional shares of your fund without a sales charge.
CROSS-REINVESTMENT OF DISTRIBUTIONS
Diversify your holdings by reinvesting dividends and capital gains from one
Piper Fund to another.
CASH DISTRIBUTIONS
If you prefer, take your dividends and/or capital gains in cash.
AUTOMATIC MONTHLY INVESTMENT PROGRAM
You may automatically transfer $25 or more each month from any Piper money
market fund* into many other Piper funds.
AUTOMATIC MONTHLY MONEY TRANSFER PROGRAM
If you are starting a savings discipline or seeking a convenient way to invest,
you can transfer a minimum of $100 automatically from your bank, savings and
loan or other financial institution into many of the Piper funds.
- -------------------------------------------------------------------------------
43 1996 Annual Report - Cash Management Funds
<PAGE>
SHAREHOLDER SERVICES (CONTINUED)
- -------------------------------
EXCHANGE PRIVILEGES
Revise your investment plan without incurring a sales charge by moving assets
from one Piper Fund to another with the same fee structure. See your prospectus
for restrictions involving exchanges between funds with different sales charges.
REINVESTMENT PRIVILEGES
If you buy a fund with a sales charge and later redeem your shares, you may
reinvest all or part of the proceeds in shares of that fund or another Piper
Fund within 30 days and pay no additional sales charge, subject to each fund's
minimum investment requirements.
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of $5,000 or more, you can elect to receive
periodic payments of $100 or more, at no cost, excluding money market funds.
ACCOUNT STATEMENTS
Whenever you add to or withdraw money from your account, you'll receive a
monthly statement from Piper Jaffray. Accounts with no activity receive a
quarterly statement instead. Periodic dividend and capital gain distributions,
if any, also appear on your statement.
CONFIRMATION OF TRANSACTIONS
You receive a confirmation statement following every transaction, except in the
money market funds. All transactions are reflected on your account statement.
$50 MILLION SHAREHOLDER PROTECTION
If you have a Piper Jaffray PRIME or PAT Plus account, you are protected up to
$50 million in the unlikely event that Piper Jaffray were to fail financially.
Other securities clients of Piper Jaffray are protected up to $25 million. This
protection does not cover market loss.
* An investment in a Piper money market 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.
- -------------------------------------------------------------------------------
44 1996 Annual Report - Cash Management Funds
<PAGE>
GLOSSARY OF TERMS (***)
- --------------------------------------------------------------------------------
AVERAGE WEIGHTED MATURITY
The average maturity is the mean of the maturity dates of a group of securities.
The term is used to describe the average time before the securities in a fund
mature (or when the issuers repay their loans to investors). Average weighted
maturity takes into account the size of each holding represented.
BARBELL STRUCTURE
A barbell investment structure emphasizes securities with maturities on the
long- and short-term ends of the yield curve and de-emphasizes securities with
intermediate-range maturities. This enables a manager to take advantage of the
high yields associated with long-term maturities, while still providing
liquidity with short-term maturities.
CERTIFICATE OF DEPOSIT (CD)
A CD is a debt instrument issued by a bank or savings and loan association that
usually pays a fixed rate of interest. Maturities can range from a few weeks to
several years.
FEDERAL FUNDS RATE
The federal funds rate is the interest rate charged by banks with excess
reserves at a Federal Reserve district bank to banks needing overnight loans to
meet reserve requirements. The federal funds rate is the most sensitive
indicator of the direction of interest rates, since it is set daily by the
market, unlike the prime rate and the discount rate, which are periodically
changed by banks and by the Federal Reserve Board, respectively.
FLOATERS/FLOATING RATE NOTE
Floaters are debt instruments that have an adjustable interest rate tied to
another interest rate -- for example, the rate paid by Treasury bills. A
floating rate note, for instance, provides a holder with additional interest if
the applicable interest rate rises and less interest if the rate falls. It is
generally best to buy floaters if it appears that interest rates will rise. If
the outlook is for falling rates, investors typically concentrate on fixed-rate
instruments.
YIELD CURVE
A graph that shows the relationship between the interest rates paid on bonds and
their maturities, ranging from the shortest maturities to the longest available
(assuming the bonds are all of the same quality). The resulting curve indicates
whether short-term interest rates are higher or lower than long-term rates.
FOR MORE INFORMATION
By Phone [GRAPHIC]
1 800 866-7778
FOR GENERAL INFORMATION
press 5, our Mutual Fund Services
representatives are ready to answer
your questions.
TO ORDER LITERATURE
press 5, ask a service
representative to mail you
additional literature, including a
Quarterly Update. You can also
request to be put on a mailing list to
receive this information
automatically each quarter.
By Mail [GRAPHIC]
Piper Capital Management
Attn: Mutual Fund Services
222 South Ninth Street
Minneapolis, MN 55402-3804
In an effort to reduce costs to our
shareholders, we have implemented
a process to reduce duplicate
mailings of the funds' shareholder
reports. This householding process
should allow us to mail one report to
each address where one or more
registered shareholders with the
same last name reside. If you would
like to have additional reports
mailed to your address, please call
our Mutual Fund Services area at
1 800 866-7778, or mail a
request to us.
On-Line [GRAPHIC]
http://www.piperjaffray.com/
money_management/
(***-Symbol is Graduation Cap indicating a term that is defined in the
glossary.)
- -------------------------------------------------------------------------------
45
<PAGE>
- -----------------------------------------------------------------------------
[LOGO] PIPER FUNDS 222 South Ninth Street
Minneapolis, MN 55402-3804
PIPER JAFFRAY INC., FUND DISTRIBUTOR AND NASD MEMBER.
#10600 11/1996 236-96
