<PAGE>
1997 Semiannual Report
[LOGO]
CASH
MANAGEMENT
FUNDS
MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
<PAGE>
CONTENTS
MONEY MARKET FUND
Letter to Shareholders. . . . 2
Financial Statements
and Notes . . . 8
Investments in Securities . .31
Directors and Officers. . . .38
Shareholder Services. . . . .39
Glossary . . . . .41
U.S. GOVERNMENT
MONEY MARKET FUND
Letter to Shareholders. . . . 2
Financial Statements
and Notes . . . 8
Investments in Securities . .23
Directors and Officers. . . .38
Shareholder Services. . . . .39
Glossary . . . . . . . . . . 41
TAX-EXEMPT MONEY MARKET FUND
Letter to Shareholders. . . . 5
Financial Statements
and Notes . . . 8
Investments in Securities . .34
Directors and Officers. . . .38
Shareholder Services. . . . .39
Glossary . . . . . . . . . . 41
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
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Government Income Fund
Intermediate Bond Fund
Adjustable Rate Mortgage Securities Fund
TAX-EXEMPT INCOME FUNDS
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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. Please read the prospectuses carefully before investing.
<PAGE>
30-DAY EFFECTIVE YIELDS
[GRAPH]
This chart shows the 30-day effective yields as of the end of each month for
Money Market Fund Class A, U.S. Government Money Market Fund and Tax-Exempt
Money Market Fund. 30-day effective yield refers to the income generated by the
fund over a 30-day period. This income is annualized and assumed to be
reinvested.
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' inceptions, the funds' distributor voluntarily waived 12b-1
fees. Had fees not been waived, 30-day effective yields for Money Market Fund
Class A, U.S. Government Money Market Fund and Tax-Exempt Money Market Fund
would have been 4.68%, 4.54% and 2.39%, respectively, on March 31, 1997.
As of March 31, 1997, the 30-day effective yield for Money Market Fund Class B
was 3.89%.
1997 Semiannual Report 1 Cash Management Funds
<PAGE>
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND
April 30, 1997
NANCY S. OLSEN is primarily responsible for the management of Money Market
Fund and U.S. Government Money Market Fund. She has 19 years of financial
experience.
Dear Shareholders:
THE SEVEN-DAY CURRENT YIELDS FOR BOTH MONEY MARKET FUND CLASS A AND U.S.
GOVERNMENT MONEY MARKET FUND HAVE INCREASED SINCE WE LAST REPORTED TO YOU SIX
MONTHS AGO. The seven-day current yield for Money Market Fund Class A increased
from 4.63% on September 30, 1996, to 4.72%* on March 31, 1997. The yield also is
up from a year ago on March 31, 1996, when the seven-day current yield was
4.48%. U.S. Government Money Market Fund's seven-day current yield is up from
4.55% on September 30, 1996, to 4.63%* on March 31, 1997. The fund's seven-day
current yield was 4.45% on March 31, 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 certain 12b-1 fees.
Had fees not been waived, seven-day current yields for Money Market Fund Class A
and U.S. Government Money Market Fund would have been 4.62% and 4.53%,
respectively, on March 31, 1997. As of March 31, 1997, the seven-day current
yield for Money Market Fund Class B was 3.91%.
MONEY MARKET FUND PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.
[CHART]
Repurchase Agreements 4%
Commercial Paper A1/P1 76%
Certificates of Deposit 9%
U.S. Agency Securities 7%
Bankers Acceptances 1%
Bank Notes 3%
1997 Semiannual Report 2 Cash Management Funds
<PAGE>
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
SHAISTA B. TAJAMAL assists with the management of Money Market Fund and U.S.
Government Money Market Fund. She has seven years of financial experience.
SHORT-TERM INTEREST RATES REMAINED VOLATILE DURING THE PERIOD, AS THE ECONOMY
APPEARED TO WEAKEN AND THEN LATER PICKED UP STRENGTH. During fourth quarter
1996, slow growth and benign inflation numbers led the markets to trade based on
expectations that the Federal Reserve Board (Fed) would not change the federal
funds rate. However, by late February economic reports began to portray an
economy that was picking up steam. On March 25, the Fed announced a 0.25%
increase in the federal funds rate, citing the potential for inflation from
stronger than desired economic conditions. Economic reports since the rate
increase have been strong, raising the possibility of an additional Fed rate
hike in the next few weeks.
WE PROVIDED YOU WITH A COMPETITIVE RATE OF RETURN DURING THE PAST SIX MONTHS BY
MANAGING THE FUNDS' AVERAGE MATURITIES AND MAKING SOME CHANGES TO THE FUNDS'
COMPOSITIONS. The funds' average weighted maturities were shorter at the
beginning of the period; we gradually lengthened them toward year end to take
advantage of higher short-term interest rates. We shortened the average weighted
maturities again in the first part of 1997 and then lengthened them toward the
end of the period to capture attractive yields. We also added some government
agency
U.S. GOVERNMENT MONEY MARKET FUND PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.
[CHART]
U.S. Treasury Securities 10%
Federal Farm Credit Bank 10%
Federal Home Loan Mortgage Corporation 10%
Other Government-Backed Securities 8%
Federal National Mortgage Association 13%
Student Loan Marketing Association 6%
Federal Agricultural Mortgage Corporation 7%
Tennessee Valley Authority 2%
Repurchase Agreements 27%
1997 Semiannual Report 3 Cash Management Funds
<PAGE>
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
floating rate securitites to each fund. These securities have adjustable
interest rates and have performed well in the rising interest rate environment.
LOOKING AHEAD, WE ARE POSITIONING THE AVERAGE WEIGHTED MATURITIES OF THE
FUNDS SO THEY ARE NEUTRAL COMPARED TO THEIR RESPECTIVE BENCHMARKS. The
average weighted maturity of both Money Market Fund and U.S. Government Money
Market Fund was 61 days as of March 31, 1997. In addition, we are positioning
the funds in somewhat of a barbell structure.v We are focusing on securities
with shorter maturities (seven to 90 days) and longer maturities (10 to 13
months), while de-emphasizing securities in between. This strategy allows us
to capture higher yields available from longer maturities; and if rates
increase, the securities with shorter maturities can be reinvested at higher
rates more quickly. Going forward, we believe we will see more volatility in
short-term markets in response to new economic data. We will continue to
watch these reports for clues on the economy's direction and formulate our
strategy accordingly.
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 actively positioning the portfolios on the short end (13 months or
less) of the yield curvev and by managing the funds' average weighted maturities
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 achieve your financial goals.
Sincerely,
/s/ Nancy Shellenberger Olsen
Nancy Shellenberger Olsen
Portfolio Manager
1997 Semiannual Report 4 Cash Management Funds
<PAGE>
TAX-EXEMPT MONEY MARKET FUND
DOUGLAS J. WHITE, CFA shares responsibility for the management of Tax-Exempt
Money Market Fund. He has 14 years of financial experience.
April 30, 1997
Dear Shareholders:
THE YIELD ON TAX-EXEMPT MONEY MARKET FUND HAS DECREASED SLIGHTLY SINCE WE
REPORTED TO YOU IN THE ANNUAL REPORT. The fund's seven-day current yield
decreased from 2.81% on September 30, 1996, to 2.63%* on March 31, 1997. That
compares to a yield of 2.56% a year ago on March 31, 1996. Yields fluctuated
from month to month as a result of changing expectations of Federal Reserve
Board activity and seasonal technical imbalances. We'll discuss these factors
- -- and how they affected the fund -- below.
SHORT-TERM INTEREST RATES REMAINED VOLATILE DURING THE PERIOD, AS THE ECONOMY
APPEARED TO WEAKEN AND THEN STRENGTHEN. In late March, the Federal Reserve
raised the federal funds rate from 5.25% to 5.50% -- the first action taken by
the board since its rate reduction in January 1996. The move caused both short-
and long-term yields to increase.
* 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 certain 12b-1 fees.
Had the fees not been waived, the fund's seven-day current yield would have been
2.53% on March 31, 1997.
TAX-EXEMPT MONEY MARKET FUND PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1997.
[CHART]
General Obligations 23%
Sales/Excise Tax Revenue 2%
Water/Sewer/Pollution Control Revenue 8%
Economic Development Revenue 3%
Electric Revenue 2%
Industrial Development Revenue 10%
Health Service/HMOs 2%
Multifamily Housing Revenue 7%
Single Family Housing Revenue 5%
Leasing Revenue 6%
Education Revenue 4%
Miscellaneous Revenue 8%
Hospital Revenue 20%
1997 Semiannual Report 5 Cash Management Funds
<PAGE>
TAX-EXEMPT MONEY MARKET FUND (CONTINUED)
CATHERINE STIENSTRA shares responsibility for the management of Tax-Exempt Money
Market Fund. She has six years of financial experience.
THE FUND EXPERIENCED GROWTH IN NET ASSETS OF 7% DURING THE PERIOD. This is
typical during the end of the first calendar quarter, as corporations and
individuals prepare for tax payment deadlines. However, it also may have been
caused by some other factors as well, such as stock market jitters and/or
investors reallocation of assets to cash due to fears of further interest rate
increases by the Federal Reserve. With the assets of other tax-exempt money
market funds growing as well, the increased demand heightened the scarcity of
fixed-rate, tax-exempt money market eligible securities. Consequently, the
fund's percentage of fixed-rate securities continued to decrease to
approximately 40% on March 31, 1997, and the variable-rate note portion of the
fund increased to 60%. The lower proportion of fixed-rate securities, in
addition to a larger asset base, caused the fund's average weighted maturity to
fall to 50 days by the end of the period.
WE ANTICIPATE THAT THE FEDERAL RESERVE COULD RAISE THE FEDERAL FUNDS RATE
ANOTHER 0.25% - 0.50% AS EARLY AS ITS NEXT MEETING IN MAY. Due to the Fed's
statement, "The slight firming of monetary conditions is viewed as a prudent
step that affords greater assurance of prolonging the current economic expansion
by sustaining the existing low-inflation environment through the rest of this
year and next," we believe there may be more rate
1997 Semiannual Report 6 Cash Management Funds
<PAGE>
TAX-EXEMPT MONEY MARKET FUND (CONTINUED)
increases. Our goal is to position the fund conservatively with about 40%-50%
fixed-rate securities and 50%-60% variable-rate securities. This position in
variable-rate securities should help the fund capture any further rate increases
instituted by the Fed.
WITH OUR FIXED-RATE/VARIABLE-RATE STRATEGY, WE BELIEVE THE FUND IS POSITIONED
WELL FOR THE COMING MONTHS. We will continue to employ our fundamental approach
to identify high-quality, liquid money market securities that will provide your
fund with competitive yields.
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
achieve your financial goals.
Sincerely,
/s/ Douglas J. White
Douglas J. White
Portfolio Manager
/s/ Catherine M. Stienstra
Catherine M. Stienstra
Portfolio Manager
1997 Semiannual Report 7 Cash Management Funds
<PAGE>
Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES March 31, 1997
..................................................................
<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 $84,337,000; $80,555,000 and $0,
respectively) ............................................ $ 2,116,772,971 $ 295,891,294 $ 223,518,621
Cash in bank on demand deposit ............................. 26,930 25,241 53,716
Accrued interest receivable ................................ 4,069,001 921,780 1,883,447
---------------- -------------- --------------
Total assets ............................................. 2,120,868,902 296,838,315 225,455,784
---------------- -------------- --------------
LIABILITIES:
Dividends payable to shareholders .......................... 3,001,484 418,367 192,567
Payable for investment securities purchased ................ 14,569,950 -- --
Accrued investment management fee .......................... 701,344 127,701 97,296
Accrued distribution and service fees ...................... 371,932 51,081 38,919
---------------- -------------- --------------
Total liabilities ........................................ 18,644,710 597,149 328,782
---------------- -------------- --------------
Net assets applicable to outstanding capital stock ....... $ 2,102,224,192 $ 296,241,166 $ 225,127,002
---------------- -------------- --------------
---------------- -------------- --------------
COMPOSITION OF NET ASSETS:
Capital stock and additional paid-in capital ............... $ 2,102,224,192 $ 296,241,166 $ 225,127,002
---------------- -------------- --------------
Total - representing net assets applicable to outstanding
capital stock .......................................... $ 2,102,224,192 $ 296,241,166 $ 225,127,002
---------------- -------------- --------------
---------------- -------------- --------------
NET ASSET VALUE AND OFFERING PRICE:
CLASS A (NOTE 1):
Net assets ................................................. $ 2,102,214,160 $ 296,241,166 $ 225,127,002
Shares outstanding ......................................... 2,102,214,160 296,241,166 225,127,002
Net asset value and offering price per share ............... $ 1.00 $ 1.00 $ 1.00
CLASS B:
Net assets ................................................. $ 10,032 -- --
Shares outstanding ......................................... 10,032 -- --
Net asset value and offering price per share ............... $ 1.00 -- --
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 8 Cash Management Funds
<PAGE>
Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
STATEMENTS OF OPERATIONS For The Six Months Ended March 31, 1997
..................................................................
<TABLE>
<CAPTION>
U.S.
GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
------------ ------------- -----------
<S> <C> <C> <C>
INCOME:
Interest ................................................... $56,459,242 $ 8,148,834 $3,920,516
------------ ------------- -----------
EXPENSES (NOTE 5):
Investment management fee .................................. 4,026,231 749,436 555,332
Distribution and service fees:
Class A .................................................. 3,091,864 449,662 333,199
Class B .................................................. 12 -- --
Custodian and accounting fees .............................. 370,633 100,064 70,243
Transfer agent and dividend disbursing agent fees .......... 1,702,893 111,382 68,608
Registration fees .......................................... 112,461 21,307 19,631
Reports to shareholders .................................... 62,259 24,543 22,286
Directors' fees ............................................ 3,619 3,619 3,619
Audit and legal fees ....................................... 29,170 24,170 24,170
Other expenses ............................................. 104,431 21,787 13,212
------------ ------------- -----------
Total expenses ........................................... 9,503,573 1,505,970 1,110,300
Less Class A expenses waived by the distributor ........ (1,038,042) (152,854) (112,949)
------------ ------------- -----------
Net expenses before expenses paid indirectly ............. 8,465,531 1,353,116 997,351
Less expenses paid indirectly .......................... (3,879) (2,309) (6,066)
------------ ------------- -----------
Total net expenses ....................................... 8,461,652 1,350,807 991,285
------------ ------------- -----------
Net investment income .................................... $47,997,590 $ 6,798,027 $2,929,231
------------ ------------- -----------
------------ ------------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 9 Cash Management Funds
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
MONEY MARKET FUND
---------------------------------
Six Months
Ended 3/31/97 Year Ended
(Unaudited) 9/30/96
---------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 47,997,590 $ 89,634,259
---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Class A:
From net investment income ............................... (47,997,546) (89,498,180)
Class B:
From net investment income ............................... (44) --
---------------- ---------------
Total distributions ...................................... (47,997,590) (89,498,180)
---------------- ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Class A .................................................... 136,414,152 262,951,258
Class B .................................................... 10,032 --
---------------- ---------------
Increase in net assets from capital share transactions ... 136,424,184 262,951,258
---------------- ---------------
Total increase in net assets ............................. 136,424,184 263,087,337
Net assets at beginning of period .......................... 1,965,800,008 1,702,712,671
---------------- ---------------
Net assets at end of period ................................ $ 2,102,224,192 $ 1,965,800,008
---------------- ---------------
---------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 10 Cash Management Funds
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET
FUND
-----------------------------
Six Months
Ended 3/31/97 Year Ended
(Unaudited) 9/30/96
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 6,798,027 $ 13,649,679
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. (6,798,027) (13,649,679)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Increase in net assets from capital share transactions ..... 5,219,355 34,574,664
------------- -------------
Total increase in net assets ............................. 5,219,355 34,574,664
Net assets at beginning of period .......................... 291,021,811 256,447,147
------------- -------------
Net assets at end of period ................................ $296,241,166 $ 291,021,811
------------- -------------
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 11 Cash Management Funds
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY MARKET FUND
-----------------------------
Six Months
Ended 3/31/97 Year Ended
(Unaudited) 9/30/96
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 2,929,231 $ 6,199,461
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. (2,929,231) (6,199,461)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Increase in net assets from capital share transactions ..... 15,188,012 3,727,356
------------- -------------
Total increase in net assets ............................. 15,188,012 3,727,356
Net assets at beginning of period .......................... 209,938,990 206,211,634
------------- -------------
Net assets at end of period ................................ $225,127,002 $ 209,938,990
------------- -------------
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 12 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited)
- ---------------------------------------------------------------------
(1) ORGANIZATION
................................
Piper Funds Inc. (the company) is registered under the Investment
Company Act of 1940 (as amended) as a single open-end management
investment 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 commenced offering Class B shares on February
18, 1997. All shares existing prior to this date were classified
as Class A shares. Key features of each class are:
CLASS A:
- Lower annual expenses than Class B
CLASS B:
- Subject to a contingent deferred sales charge upon redemption
- Higher annual expenses than Class A
- Automatic conversion to Class A shares at the begininning of
the sixth calendar year after issuance
- Available for purchase only in exchange for Class B shares of
another fund managed by the adviser
The classes of shares of Money Market Fund have the same rights
and are identical in all respects except that each class bears
different distribution expenses, has exclusive voting rights with
respect to matters affecting that class and has different
exchange privileges. U.S. Government Money Market Fund and
Tax-Exempt Money Market Fund each have a single class of shares,
which are shown as Class A in the financial statements.
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,
- ---------------------------------------------------------------------
1997 Semi-Annual Report 13 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
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 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.
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. The funds also intend to distribute their
taxable net investment income and realized gains, if any, to
avoid the payment of any federal excise taxes.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 14 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income for
Money Market Fund are declared separately for each class daily
and reinvested in additional shares of the same class monthly.
Distributions to shareholders from net investment income for U.S.
Government Money Market Fund and Tax-Exempt Money Market Fund 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.
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES
Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses for Money Market Fund
are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class.
Class-specific expenses, which include distribution and service
fees, are charged directly to such class.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
- ---------------------------------------------------------------------
1997 Semi-Annual Report 15 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (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
six months ended March 31, 1997, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
--------------- --------------- -------------
<S> <C> <C> <C>
Purchases ................................... $ 7,641,778,526 $ 2,356,087,078 $ 613,961,018
Proceeds from sales ......................... $ 7,488,875,132 $ 2,349,849,165 $ 598,856,615
</TABLE>
For the six months ended March 31, 1997, no brokerage commissions
were paid to Piper Jaffray Inc., an affiliated broker.
(4) CAPITAL SHARE
TRANSACTIONS
................................
Capital share transactions at net asset value of $1 per share for
the funds were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS ENDED SEPTEMBER 30,
MARCH 31, 1997 1996
----------------- -----------------
<S> <C> <C>
MONEY MARKET FUND:
CLASS A (authorized 80 billion shares of $0.01 par value)
Purchase of fund shares.................... $ 7,959,225,230 $ 8,148,803,714
Issued for reinvested distributions........ 46,113,826 86,341,691
Redemptions of fund shares................. (7,868,924,904) (7,972,194,147)
----------------- -----------------
$ 136,414,152 $ 262,951,258
----------------- -----------------
----------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31, 1997(A)
-------------------
<S> <C>
CLASS B (authorized 10 billion shares of
$0.01 par value)
Purchase of fund shares.................... $ 10,000
Issued for reinvested distributions........ 32
Redemptions of fund shares................. --
----------
$ 10,032
----------
----------
</TABLE>
(a) Commencement of offering of Class B shares was February
18, 1997.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 16 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED SEPTEMBER 30,
MARCH 31, 1997 1996
--------------- -----------------
<S> <C> <C>
U.S. GOVERNMENT MONEY MARKET FUND:
(authorized 100 billion shares of $0.01 par value)
Purchase of fund shares.................... $ 630,040,043 $ 1,241,641,588
Issued for reinvested distributions........ 6,542,668 13,290,413
Redemptions of fund shares................. (631,363,356) (1,220,357,337)
--------------- -----------------
$ 5,219,355 $ 34,574,664
--------------- -----------------
--------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED SEPTEMBER 30,
MARCH 31, 1997 1996
--------------- -----------------
<S> <C> <C>
TAX-EXEMPT MONEY MARKET FUND:
(authorized 100 billion shares of $0.01 par value)
Purchase of fund shares.................... $ 950,601,085 $ 1,478,505,358
Issued for reinvested distributions........ 2,816,203 6,041,943
Redemptions of fund shares................. (938,229,276) (1,480,819,945)
--------------- -----------------
$ 15,188,012 $ 3,727,356
--------------- -----------------
--------------- -----------------
</TABLE>
(5) EXPENSES
................................
INVESTMENT MANAGEMENT FEE
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.
DISTRIBUTION AND SERVICE FEES
Each fund also pays Piper Jaffray Inc. (Piper Jaffray), the
funds' distributor, a fee accrued daily and paid quarterly for
providing shareholder services and distribution-related services.
The fee for
- ---------------------------------------------------------------------
1997 Semi-Annual Report 17 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
each class, which is being voluntarily limited for Class A of
Money Market Fund, U.S. Government Money Market Fund and Tax-
Exempt Money Market Fund for the year ending September 30, 1997,
is stated below as a percent of average daily net assets
attributable to such class.
<TABLE>
<CAPTION>
MONEY MARKET FUND
------------------------ U.S. GOVERNMENT TAX-EXEMPT MONEY
CLASS A CLASS B MONEY MARKET FUND MARKET FUND
----------- ----------- ------------------- -----------------
<S> <C> <C> <C> <C>
Distribution fee.......... 0.05% 0.75% 0.05% 0.05%
Service fee............... 0.25% 0.25% 0.25% 0.25%
----- ----- ----- -----
Total distribution and
service fees........... 0.30% 1.00% 0.30% 0.30%
----- ----- ----- -----
----- ----- ----- -----
Total distribution and
service fees after
voluntary limitation... 0.20% 1.00% 0.20% 0.20%
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
SHAREHOLDER ACCOUNT SERVICING FEES
The company has also entered into shareholder account servicing
agreements under which Piper Jaffray and Piper Trust Company
(Piper Trust) 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 for
providing these services, are equal to an annual rate of $9.00
per active shareholder account and $6.00 per inactive account.
For the six months ended March 31, 1997, Piper Jaffray and Piper
Trust received the following amounts in connection with the
shareholder account servicing agreements:
<TABLE>
<CAPTION>
TAX-EXEMPT
MONEY MARKET U.S. GOVERNMENT MONEY MARKET
FUND MONEY MARKET FUND FUND
-------------- ----------------- --------------
<S> <C> <C> <C>
Piper Jaffray............... $ 1,690,040 $ 103,882 $ 61,108
Piper Trust................. 5,353 -- --
-------------- ----------------- --------------
$ 1,695,393 $ 103,882 $ 61,108
-------------- ----------------- --------------
-------------- ----------------- --------------
</TABLE>
- ---------------------------------------------------------------------
1997 Semi-Annual Report 18 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
OTHER FEES AND EXPENSES
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 miscellaneous cash balances maintained by the
funds.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 19 Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(6) 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>
CLASS A
-------------------------------------------------------------------
(Unaudited)
Six
Months
Ended
March Year Ended September 30,
31, -------------------------------------------------------
1997 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Operations:
Net investment income ..................... 0.02 0.05 0.05 0.03 0.02 0.04
Distributions to shareholders:
From net investment income ................ (0.02) (0.05) (0.05) (0.03) (0.02) (0.04)
------- ------- ------- ------- ------- -------
Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (a) ............................ 2.33% 4.79% 5.05% 2.98% 2.45% 3.87%
Net assets at end of period (in millions) ... $2,102 $ 1,966 $ 1,703 $ 1,185 $ 1,106 $ 1,096
Ratio of expenses to average daily net
assets .................................... 0.82%(c) 0.84% 0.92% 0.93% 0.96% 0.90%
Ratio of net investment income to average
daily net assets .......................... 4.66%(c) 4.73% 4.94% 2.90% 2.42% 3.66%
Ratios before waivers by the distributor:
Ratio of expenses to average daily net
assets before waivers ................... 0.92%(c) 0.94% 1.02% 1.03% 1.06% 1.00%
Ratio of net investment income to average
daily net assets before waivers ......... 4.56%(c) 4.63% 4.84% 2.80% 2.32% 3.56%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------
(Unaudited)
Period
Ended
March
31,
1997(b)
-------
<S> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 1.00
-------
Operations:
Net investment income ..................... 0.01
Distributions to shareholders:
From net investment income ................ (0.01)
-------
Net asset value, end of period .............. $ 1.00
-------
-------
SELECTED INFORMATION
Total return (a) ............................ 0.32%
Net assets at end of period (in
thousands) ................................ $ 10
Ratio of expenses to average daily net
assets .................................... 1.63%(c)
Ratio of net investment income to average
daily net assets .......................... 3.85%(c)
</TABLE>
(A) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(B) COMMENCEMENT OF OFFERING OF CLASS B SHARES WAS FEBRUARY 18, 1997.
(C) ANNUALIZED.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 20 Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
................................
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>
(Unaudited)
Six
Months
Ended
March Year Ended September 30,
31, -------------------------------------------------------
1997 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Operations:
Net investment income ..................... 0.02 0.05 0.05 0.03 0.02 0.04
Distributions to shareholders:
From net investment income ................ (0.02) (0.05) (0.05) (0.03) (0.02) (0.04)
------- ------- ------- ------- ------- -------
Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (a) ............................ 2.27% 4.72% 4.99% 2.98% 2.51% 3.78%
Net assets at end of period (in millions) ... $ 296 $ 291 $ 256 $ 185 $ 195 $ 191
Ratio of expenses to average daily net
assets .................................... 0.90%(b) 0.90% 0.91% 0.92% 0.93% 0.90%
Ratio of net investment income to average
daily net assets .......................... 4.54%(b) 4.62% 4.90% 2.88% 2.41% 3.58%
Ratios before waivers by the distributor:
Ratio of expenses to average daily net
assets before waivers ................... 1.00%(b) 1.00% 1.01% 1.02% 1.03% 1.00%
Ratio of net investment income to average
daily net assets before waivers ......... 4.44%(b) 4.52% 4.80% 2.78% 2.31% 3.48%
</TABLE>
(A) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(B) ANNUALIZED.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 21 Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
................................
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>
(Unaudited)
Six
Months
Ended
March Year Ended September 30,
31, -------------------------------------------------------
1997 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Operations:
Net investment income ..................... 0.01 0.03 0.03 0.02 0.02 0.03
Distributions to shareholders:
From net investment income (a) ............ (0.01) (0.03) (0.03) (0.02) (0.02) (0.03)
------- ------- ------- ------- ------- -------
Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (b) ............................ 1.31% 2.80% 3.02% 1.82% 1.87% 3.07%
Net assets at end of period (in millions) ... $ 225 $ 210 $ 206 $ 178 $ 169 $ 158
Ratio of expenses to average daily net
assets .................................... 0.90%(c) 0.90% 0.91% 0.90% 0.92% 0.88%
Ratio of net investment income to average
daily net assets .......................... 2.64%(c) 2.76% 2.97% 1.80% 1.83% 2.91%
Ratios before waivers by the distributor:
Ratio of expenses to average daily net
assets before waivers ................... 1.00%(c) 1.00% 1.01% 1.00% 1.02% 0.98%
Ratio of net investment income to average
daily net assets before waivers ......... 2.54%(c) 2.66% 2.87% 1.70% 1.73% 2.81%
</TABLE>
(A) INCLUDES DISTRIBUTIONS WHICH ARE TAXABLE FOR FEDERAL AND STATE INCOME TAX
PURPOSES OF $0.0001 AND $0.0001 PER SHARE FOR FISCAL 1995 AND 1992,
RESPECTIVELY.
(B) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(C) ANNUALIZED.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 22 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET FUND March 31, 1997
............................................................................................
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 (6.7%):
FEDERAL FARM CREDIT BANK FLOATING RATE NOTES (B) (1.8%):
5.55%, 2/20/98 ...................................... $22,000,000 $ 421,988,509
5.46%, 11/3/97 ...................................... 17,000,000 16,995,900
---------------
38,984,409
---------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (B) (0.5%):
5.85%, 1/29/98 ...................................... 10,000,000 10,010,080
---------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION FLOATING RATE NOTES (B) (2.8%):
5.55%, 6/2/99 ....................................... 9,000,000 8,954,605
5.61%, 5/1/97 ....................................... 20,000,000 19,999,171
5.55%, 6/2/99 ....................................... 9,000,000 8,936,275
5.52%, 6/20/97 ...................................... 21,000,000 20,995,455
---------------
58,885,506
---------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE NOTES (B) (1.4%):
5.76%, 11/20/97 ..................................... 10,000,000 10,002,826
5.76%, 11/20/97 ..................................... 4,375,000 4,375,000
5.87%, 6/30/97 ...................................... 15,000,000 14,998,460
---------------
29,376,286
---------------
U.S. TREASURY NOTES AND BONDS (0.2%):
5.75%, 9/30/97 ...................................... 3,601,000 3,596,788
---------------
Total U.S. Government and Agency Securities
(cost: $140,853,069) ........................... 140,853,069
---------------
U.S. GOVERNMENT AGENCY-BACKED SECURITIES (0.1%):
Downey Savings & Loan Association, LOC Federal Home
Loan Bank of San Francisco, 5.50%, 12/5/97
(cost: $2,886,333) .............................. 3,000,000 2,886,333
---------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 23 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ---------------
<S> <C> <C>
BANK NOTES (3.1%):
American Express Centurion Bank, 5.41%, 9/12/97 ..... $15,000,000(b) $ 15,000,000
Bank One Columbus N.A., 5.69%, 10/28/97 ............. 21,000,000 20,992,992
First National Bank of Chicago, 6.00%, 3/24/98 ...... 30,000,000 29,988,936
---------------
Total Bank Notes
(cost: $65,981,928) ............................ 65,981,928
---------------
BANKERS ACCEPTANCES - YANKEE (C) (0.6%):
ABN-AMRO Bank N.V., 5.24%, 4/4/97 ................... 7,000,000 6,996,944
ABN-AMRO Bank N.V., 5.24%, 4/7/97 ................... 5,000,000 4,995,633
---------------
Total Bankers Acceptances - Yankee
(cost: $11,992,577) ............................ 11,992,577
---------------
CERTIFICATES OF DEPOSIT (2.0%):
Mellon Bank Corp., 6.03%, 9/23/97 ................... 13,000,000 13,007,636
Regions Bank N.A., 5.52%, 8/4/97 .................... 30,000,000 30,000,000
---------------
Total Certificates Of Deposit
(cost: $43,007,636) ............................ 43,007,636
---------------
CERTIFICATES OF DEPOSIT - YANKEE (C) (7.0%):
Canadian Imperial Bank of Commerce, 5.69%, 3/2/98 ... 15,000,000 14,990,945
Deutsche Bank AG, 5.52%, 7/28/97 .................... 22,000,000 22,002,279
Landesbank Hessen-Thueringen Girozentrale, 5.80%,
1/13/98 ........................................... 25,000,000 24,990,593
National Bank of Canada, 5.56%, 8/29/97 ............. 30,000,000 30,000,000
National Westminster Bank PLC, 5.66%, 2/11/98 ....... 20,000,000 19,984,447
Royal Bank of Canada, 5.73%, 8/13/97 ................ 6,000,000 6,002,050
Royal Bank of Canada, 5.80%, 3/3/98 ................. 15,000,000 14,997,357
Societe Generale, 5.87%, 3/4/98 ..................... 15,000,000 14,996,025
---------------
Total Certificates Of Deposit - Yankee
(cost: $147,963,696) ........................... 147,963,696
---------------
COMMERCIAL PAPER (76.5%):
AERODEFENSE/ELECTRONICS (1.4%):
Rockwell International Corp., 5.57%, 4/16/97 ........ 30,000,000 29,930,375
---------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 24 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ---------------
<S> <C> <C>
BUSINESS CREDIT INSTITUTIONS (8.4%):
BTR Dunlop Finance Inc., 5.35%, 4/7/97 .............. $10,000,000(d) $ 9,991,083
BTR Dunlop Finance Inc., 5.42%, 9/2/97 .............. 20,000,000(d) 19,536,289
Caterpillar Financial Services Corp., 5.70%,
4/17/97 ........................................... 7,000,000 6,982,267
Caterpillar Financial Services Corp., 5.35%,
4/28/97 ........................................... 10,000,000 9,959,875
Deere (John) Capital Corp., 5.24%, 4/1/97 ........... 30,000,000 30,000,000
Ford Motor Credit Co., 5.29%, 4/9/97 ................ 25,000,000 24,970,611
General Electric Capital Corp., 5.30%, 4/3/97 ....... 8,850,000 8,847,394
Mobil Australia Finance Co., 5.57%, 5/21/97 ......... 30,000,000(d) 29,767,917
Siemens Capital Corp., 5.28%, 4/10/97 ............... 5,000,000 4,993,400
Siemens Capital Corp., 5.30%, 4/15/97 ............... 10,000,000 9,979,389
Toyota Motor Credit Corp., 5.26%, 4/15/97 ........... 15,000,000 14,969,317
Toyota Motor Credit Corp., 5.53%, 5/21/97 ........... 7,073,000 7,018,675
---------------
177,016,217
---------------
CONSUMER HEALTH (0.3%):
Allergan Inc., 5.32%, 4/8/97 ........................ 5,000,000 4,994,828
---------------
CONSUMER NON-DURABLES (1.6%):
Clorox Co., 5.34%, 4/11/97 .......................... 20,500,000 20,469,592
Clorox Co., 5.29%, 4/14/97 .......................... 13,500,000 13,474,211
---------------
33,943,803
---------------
DIVERSIFIED CHEMICALS (4.5%):
Akzo Nobel Inc., 5.32%, 4/28/97 ..................... 10,000,000 9,960,100
Akzo Nobel Inc., 5.44%, 6/19/97 ..................... 15,000,000 14,820,933
BOC Group Inc. (DE), 5.35%, 4/2/97 .................. 16,905,000(d) 16,902,488
duPont (E.I.) de Nemours & Co., 5.23%, 4/10/97 ...... 2,300,000 2,296,993
duPont (E.I.) de Nemours & Co., 5.48%, 5/19/97 ...... 24,834,000(d) 24,652,546
Great Lakes Chemical Corp., 5.30%, 4/10/97 .......... 6,000,000(d) 5,992,050
Great Lakes Chemical Corp., 5.60%, 4/18/97 .......... 4,674,000(d) 4,661,640
Great Lakes Chemical Corp., 5.54%, 4/25/97 .......... 9,425,000(d) 9,390,190
Great Lakes Chemical Corp., 5.51%, 5/23/97 .......... 4,702,000(d) 4,664,577
---------------
93,341,517
---------------
DIVERSIFIED TECHNOLOGY (0.5%):
EDS Finance PLC, 5.33%, 4/30/97 ..................... 4,500,000(c)(d) 4,480,679
Electronic Data Systems Corp., 5.28%, 4/4/97 ........ 6,000,000(d) 5,997,360
---------------
10,478,039
---------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 25 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ---------------
<S> <C> <C>
ELECTRIC UTILITIES (2.6%):
Electricity Corp. of New Zealand Ltd., 5.35%,
8/11/97 ........................................... $ 1,665,000(c) $ 1,632,338
Electricity Corp. of New Zealand Ltd., 5.33%,
8/11/97 ........................................... 17,000,000(c) 16,667,763
National Cooperative Services Corp., 5.32%,
4/17/97 ........................................... 19,250,000(d) 19,204,484
National Rural Utilities Cooperative Finance Corp.,
5.26%, 4/14/97 .................................... 4,745,000 4,735,989
National Rural Utilities Cooperative Finance Corp.,
5.55%, 5/6/97 ..................................... 7,000,000 6,962,229
Tampa Electric Co., 5.55%, 4/28/97 .................. 5,500,000 5,477,106
---------------
54,679,909
---------------
ELECTRIC AND GAS UTILITIES (1.4%):
Citizens Utilities Co., 5.55%, 5/28/97 .............. 30,000,000(d) 29,736,375
---------------
ELECTRICAL EQUIPMENT (2.8%):
Dover Corp., 5.50%, 4/23/97 ......................... 25,685,000(d) 25,598,670
Dover Corp., 5.31%, 4/3/97 .......................... 4,700,000(d) 4,698,614
Hitachi America Ltd., 5.67%, 4/23/97 ................ 9,000,000 8,968,815
Hitachi America Ltd., 5.28%, 5/7/97 ................. 10,000,000 9,947,200
Hitachi America Ltd., 5.57%, 5/28/97 ................ 7,600,000 7,532,974
---------------
56,746,273
---------------
FINANCIAL AND REAL ESTATE INSTITUTIONS (7.9%):
Bass Finance (C.I.) Ltd., 5.33%, 5/8/97 ............. 23,000,000(c) 22,874,005
Bass Finance (C.I.) Ltd., 5.29%, 5/14/97 ............ 7,000,000(c) 6,955,770
Caisse des Depots et Consignations, 5.25%,
4/16/97 ........................................... 13,718,000(c)(d) 13,687,992
Caisse des Depots et Consignations, 5.30%,
4/18/97 ........................................... 12,000,000(c)(d) 11,969,967
Eksportfinans A/S, 5.38%, 4/9/97 .................... 10,000,000(c) 9,988,044
Eksportfinans A/S, 5.58%, 5/12/97 ................... 7,571,000(c) 7,522,886
Eksportfinans A/S, 5.44%, 6/18/97 ................... 16,290,000(c) 16,097,995
Hahn Issuing Corp., LOC Canadian Imperial Bank of
Commerce, 5.35%, 5/1/97 ........................... 8,000,000 7,964,333
Midwest Commercial Paper I, LOC First Bank N.A.,
Minneapolis, 5.43%, 6/2/97 ........................ 3,635,000(d) 3,601,007
U.S. Prime Property Inc., LOC ABN-AMRO Bank N.V.,
5.33%, 4/8/97 ..................................... 6,000,000 5,993,782
U.S. Prime Property Inc., LOC ABN-AMRO Bank N.V.,
5.33%, 6/13/97 .................................... 9,000,000 8,902,728
U.S. Prime Property Inc., LOC Westpac Banking Corp.,
5.32%, 5/20/97 .................................... 20,425,000 20,277,100
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 26 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ---------------
<S> <C> <C>
USAA Capital Corp., 5.24%, 4/24/97 .................. $30,000,000 $ 29,899,566
---------------
165,735,175
---------------
FOOD STORES (0.2%):
Albertson's Inc., 5.50%, 4/11/97 .................... 3,700,000 3,694,347
---------------
FOOD AND BEVERAGE PRODUCTS (4.4%):
Campbell Soup Co., 5.28%, 11/14/97 .................. 16,100,000(d) 15,563,977
General Mills Inc., 5.30%, 4/4/97 ................... 28,000,000 27,987,634
Heinz (H.J.) Co., 5.30%, 4/15/97 .................... 7,000,000 6,985,572
Heinz (H.J.) Co., 5.30%, 4/16/97 .................... 17,000,000 16,962,458
Heinz (H.J.) Co., 5.30%, 4/16/97 .................... 6,235,000 6,221,231
Sysco Corp., 5.55%, 4/22/97 ......................... 19,562,000(d) 19,498,668
---------------
93,219,540
---------------
HEALTH CARE SERVICES (1.4%):
Abbott Laboratories, 5.26%, 4/11/97 ................. 30,000,000 29,956,167
---------------
INDUSTRIAL CONGLOMERATE (4.0%):
Minnesota Mining & Manufacturing Co., 5.25%,
4/21/97 ........................................... 25,000,000 24,927,083
Novartis Finance Corp., 5.32%, 4/2/97 ............... 30,000,000 29,995,567
Warner-Lambert Co., 5.53%, 6/16/97 .................. 30,000,000(d) 29,649,767
---------------
84,572,417
---------------
INDUSTRIAL EQUIPMENT (0.5%):
Vermont American Corp., 5.48%, 4/15/97 .............. 10,451,000(d) 10,428,728
---------------
INSURANCE COMPANIES (1.5%):
Allianz of America Finance Corp., 5.65%, 4/8/97 ..... 6,735,000(d) 6,727,601
Allianz of America Finance Corp., 5.50%, 7/16/97 .... 23,935,000(d) 23,547,386
---------------
30,274,987
---------------
MINING AND MINERAL RELATED (1.5%):
RTZ America Inc., 5.60%, 9/17/97 .................... 12,000,000(d) 11,684,533
U.S. Borax Inc., 5.31%, 4/2/97 ...................... 8,000,000(d) 7,998,820
U.S. Borax Inc., 5.31%, 4/30/97 ..................... 8,800,000(d) 8,762,358
U.S. Borax Inc., 5.32%, 5/7/97 ...................... 4,109,000(d) 4,087,140
---------------
32,532,851
---------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 27 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ---------------
<S> <C> <C>
MONEY CENTER BANKS (17.7%):
Abbey National North America, 5.37%, 6/11/97 ........ $15,000,000 $ 14,841,134
Abbey National North America, 5.64%, 10/1/97 ........ 15,000,000 14,569,950
ABN-AMRO North America Finance Inc., 5.83%,
4/3/97 ............................................ 8,000,000 7,997,411
Bank of Montreal, 5.27%, 4/3/97 ..................... 30,000,000(c) 29,991,217
Bank of New York Co. Inc., 5.29%, 4/7/97 ............ 9,200,000 9,191,889
Bank of New York Co. Inc., 5.40%, 4/4/97 ............ 20,000,000 19,991,000
Barclay's Bank PLC, 5.33%, 4/7/97 ................... 30,000,000 29,973,350
Chase Manhattan Corp., 5.40%, 7/14/97 ............... 15,000,000 14,766,000
Commerzbank U.S. Finance Inc., 5.55%, 4/25/97 ....... 22,957,000 22,872,059
Commerzbank U.S. Finance Inc., 5.58%, 6/27/97 ....... 9,000,000 8,878,635
Den Danske Corp. Inc., 5.49%, 4/22/97 ............... 25,000,000 24,919,938
Den Danske Corp. Inc., 5.30%, 4/11/97 ............... 4,565,000 4,558,279
Deutsche Bank Financial Inc., 5.35%, 5/8/97 ......... 3,900,000 3,878,555
Generale Bank Inc., 5.58%, 5/19/97 .................. 20,000,000 19,851,200
Kredietbank N.A. Finance Corp., 5.31%, 4/8/97 ....... 15,000,000 14,984,513
Kredietbank N.A. Finance Corp., 5.26%, 4/21/97 ...... 15,000,000 14,956,167
Morgan (J.P.) & Co. Inc., 5.41%, 9/3/97 ............. 27,440,000 26,800,839
Rabobank USA Financial Corp., 5.35%, 4/17/97 ........ 25,000,000 24,940,556
Royal Bank of Canada, 5.40%, 7/14/97 ................ 10,000,000(c) 9,844,000
Societe Generale N.A. Inc., 5.30%, 4/24/97 .......... 13,000,000 12,955,981
Toronto-Dominion Holdings USA Inc., 5.33%,
7/15/97 ........................................... 10,705,000 10,538,582
UBS Finance (DE) Inc., 5.78%, 4/3/97 ................ 30,000,000 29,990,367
---------------
371,291,622
---------------
OFFICE AND INDUSTRIAL SERVICES (1.4%):
First Data Corp., 5.31%, 4/1/97 ..................... 30,000,000 30,000,000
---------------
OIL INTEGRATED INTERNATIONAL (3.3%):
ARCO British Ltd., 5.32%, 4/9/97 .................... 13,573,000(c)(d) 13,556,954
Repsol International Finance B.V., 5.28%, 6/13/97 ... 10,000,000 9,892,933
Repsol International Finance B.V., 5.35%, 4/15/97 ... 15,000,000(c) 14,968,792
Shell Oil Co., 5.26%, 4/2/97 ........................ 30,000,000 29,995,616
---------------
68,414,295
---------------
PAPER (0.6%):
Sonoco Products Co., 5.26%, 5/22/97 ................. 13,700,000 13,597,912
---------------
PRINT MEDIA/PUBLISHING (0.8%):
Gannett Co., 5.27%, 4/2/97 .......................... 17,246,000(d) 17,243,475
---------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 28 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ---------------
<S> <C> <C>
REGIONAL BANKS (0.9%):
Norwest Corp., 5.34%, 4/3/97 ........................ $18,905,000 $ 18,899,392
---------------
SECURITIES BROKER (2.8%):
Goldman Sachs Group L.P., 5.33%, 7/2/97 ............. 30,000,000 29,591,367
Merrill Lynch & Co. Inc., 5.34%, 4/9/97 ............. 12,000,000 11,985,760
Merrill Lynch & Co. Inc., 5.34%, 8/5/97 ............. 5,972,000 5,860,383
Merrill Lynch & Co. Inc., 5.32%, 8/12/97 ............ 12,000,000 11,764,147
---------------
59,201,657
---------------
SOVEREIGN CREDITS (1.9%):
Canadian Wheat Board, 5.33%, 4/7/97 ................. 6,000,000(c) 5,994,670
Quebec (Province of), 5.40%, 8/27/97 ................ 2,660,000(c) 2,600,948
Swedish Export Credit Corp., 5.35%, 4/17/97 ......... 20,147,000(c) 20,099,095
Western Australian Treasury Corp., 5.29%, 6/11/97 ... 11,470,000(c) 11,350,333
---------------
40,045,046
---------------
TELECOMMUNICATIONS (1.9%):
Ameritech Capital Funding Corp., 5.27%, 4/8/97 ...... 12,020,000(d) 12,007,683
British Telecommunications PLC, 5.28%, 5/22/97 ...... 25,000,000(c) 24,813,000
British Telecommunications PLC, 5.35%, 5/27/97 ...... 4,000,000(c) 3,966,711
---------------
40,787,394
---------------
TIRES/AUTO PARTS (0.3%):
Denso International America Inc., 5.38%, 4/10/97 .... 7,000,000 6,990,585
---------------
Total Commercial Paper
(cost: $1,607,752,926) ......................... 1,607,752,926
---------------
CORPORATE NOTES AND BONDS (0.6%):
Ameritech Capital Funding Corp., 5.56%, 5/2/97 ...... 7,000,000(b) 7,000,610
Associates Corp. of North America, 5.88%, 8/15/97 ... 5,000,000 4,997,196
---------------
Total Corporate Notes and Bonds
(cost: $11,997,806) ............................ 11,997,806
---------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 29 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ---------------
<S> <C> <C>
REPURCHASE AGREEMENTS (4.0%):
Repurchase agreement with Goldman Sachs, acquired on
3/31/97, interest of $6,335, 6.53%, 4/1/97 ........ $34,927,000(e) $ 34,927,000
Repurchase agreement with Morgan Stanley, acquired on
3/5/97, interest of $92,982, 5.32%, 4/8/97 ........ 18,506,000(f)(g) 18,506,000
Repurchase agreement with Morgan Stanley, acquired on
3/6/97, interest of $159,842, 5.32%, 4/10/97 ...... 30,904,000(f)(g) 30,904,000
---------------
Total Repurchase Agreements
(cost: $84,337,000) ............................ 84,337,000
---------------
Total Investments in Securities
(cost: $2,116,772,971) (h) ..................... $ 2,116,772,971
---------------
---------------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) INTEREST RATE VARIES TO REFLECT CURRENT MARKET CONDITIONS; RATE SHOWN IS
THE EFFECTIVE RATE ON MARCH 31, 1997. THE MATURITY DATE REPRESENTS FINAL
MATURITY. HOWEVER, FOR PURPOSES OF RULE 2A-7, MATURITY DATE IS THE NEXT
INTEREST RATE RESET DATE.
(C) SECURITIES OF FOREIGN ISSUERS WHICH ARE DENOMINATED IN U.S. DOLLARS. THE
AGGREGATE VALUE OF THESE SECURITIES AT MARCH 31, 1997, IS $409,019,432,
WHICH REPRESENTS 19.5% OF NET ASSETS.
(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 THE OVERSIGHT OF THE BOARD OF
DIRECTORS, THESE SECURITIES ARE TREATED AS LIQUID AFTER HAVING BEEN
DETERMINED TO BE LIQUID BY THE ADVISER. THE AGGREGATE VALUE OF THESE
SECURITIES AT MARCH 31, 1997, IS $425,291,018, WHICH REPRESENTS 20.2% OF
NET ASSETS.
(E) REPURCHASE AGREEMENT IN A JOINT TRADING ACCOUNT WHICH IS COLLATERALIZED BY
U.S. GOVERNMENT AGENCY SECURITIES. ACCRUED INTEREST SHOWN REPRESENTS
INTEREST DUE AT MATURITY OF THE REPURCHASE AGREEMENT.
(F) 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.
(G) REPURCHASE AGREEMENTS WITH GREATER THAN SEVEN DAYS TO MATURITY ARE
CONSIDERED ILLIQUID. THE AGGREGATE VALUE OF SUCH REPURCHASE AGREEMENTS
REPRESENTS 2.4% OF NET ASSETS.
(H) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 30 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND March 31, 1997
.........................................................................................
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 (63.0%):
FEDERAL AGRICULTURAL MORTGAGE CORPORATION DISCOUNT NOTES (6.8%):
5.32%, 4/15/97 ...................................... $10,204,000 $ 10,182,889
5.45%, 4/21/97 ...................................... 10,000,000 9,969,722
------------
20,152,611
------------
FEDERAL FARM CREDIT BANK DISCOUNT NOTES (6.4%):
5.24%, 4/1/97 ....................................... 10,000,000 10,000,000
5.18%, 4/11/97 ...................................... 4,000,000 3,994,244
5.47%, 6/5/97 ....................................... 5,000,000 4,950,619
------------
18,944,863
------------
FEDERAL FARM CREDIT BANK FLOATING RATE NOTES (B) (3.7%):
5.25%, 12/17/97 ..................................... 7,000,000 6,995,585
5.50%, 3/19/98 ...................................... 4,000,000 3,996,832
------------
10,992,417
------------
FEDERAL HOME LOAN BANK COUPON NOTES (1.7%):
5.88%, 2/5/98 ....................................... 5,000,000 4,999,575
------------
FEDERAL HOME LOAN BANK DISCOUNT NOTES (3.7%):
5.27%, 4/22/97 ...................................... 4,225,000 4,212,024
5.48%, 4/24/97 ...................................... 1,575,000 1,569,486
5.25%, 4/30/97 ...................................... 5,160,000 5,138,178
------------
10,919,688
------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (B) (1.7%):
5.39%, 3/19/98 ...................................... 5,000,000 4,996,484
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION DISCOUNT NOTES (9.6%):
5.21%, 4/4/97 ....................................... 6,148,000 6,145,331
5.23%, 4/7/97 ....................................... 6,000,000 5,994,770
5.27%, 4/14/97 ...................................... 5,000,000 4,990,485
5.50%, 4/15/97 ...................................... 4,100,000 4,091,231
5.18%, 5/20/97 ...................................... 7,300,000 7,248,531
------------
28,470,348
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 31 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (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 DISCOUNT NOTES (7.0%):
5.26%, 4/8/97 ....................................... $ 3,000,000 $ 2,996,932
5.22%, 4/16/97 ...................................... 3,575,000 3,567,224
5.18%, 4/30/97 ...................................... 6,355,000 6,328,482
5.24%, 5/2/97 ....................................... 4,000,000 3,981,951
5.22%, 5/16/97 ...................................... 4,000,000 3,973,900
------------
20,848,489
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION FLOATING RATE NOTES (B) (6.4%):
5.65%, 6/11/97 ...................................... 7,000,000 6,999,750
5.61%, 5/1/97 ....................................... 5,000,000 4,999,793
5.55%, 6/2/99 ....................................... 3,000,000 2,984,868
5.52%, 6/20/97 ...................................... 4,000,000 3,999,134
------------
18,983,545
------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE NOTES (B) (5.5%):
5.58%, 11/24/97 ..................................... 7,400,000 7,400,000
5.76%, 11/20/97 ..................................... 5,000,000 5,000,000
5.87%, 6/30/97 ...................................... 4,000,000 3,999,589
------------
16,399,589
------------
U.S. TREASURY NOTES AND BONDS (10.5%):
5.13%, 2/28/98 ...................................... 7,000,000 6,958,245
7.88%, 4/15/98 ...................................... 5,000,000 5,094,281
6.00%, 11/30/97 ..................................... 5,000,000 5,017,749
5.13%, 3/31/98 ...................................... 7,000,000 6,959,385
6.00%, 8/31/97 ...................................... 7,000,000 7,007,593
------------
31,037,253
------------
Total U.S. Government and Agency Securities
(cost: $186,744,862) ........................... 186,744,862
------------
OTHER U.S. GOVERNMENT AGENCY SECURITIES (2.0%):
Tennessee Valley Authority, 5.48%, 4/9/97
(cost: $5,992,693) .............................. 6,000,000 5,992,693
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 32 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (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 SECURITIES (7.6%):
Downey Savings & Loan Association, LOC Federal Home
Loan Bank of San Francisco, 5.50%, 12/5/97 ........ $10,000,000 $ 9,621,111
USA Group Secondary Market Services Inc., LOC Student
Loan Marketing Association, 5.40%, 4/3/97 ......... 6,000,000 5,998,200
USA Group Secondary Market Services Inc., LOC Student
Loan Marketing Association, 5.29%, 4/21/97 ........ 7,000,000 6,979,428
------------
Total Other U.S. Government Agency-Backed
Securities
(cost: $22,598,739) ............................ 22,598,739
------------
REPURCHASE AGREEMENTS (27.2%):
Repurchase agreement with Goldman Sachs, acquired on
3/31/97, interest of $6,725, 6.53%, 4/1/97 ........ 37,074,000(c) 37,074,000
Repurchase agreement with Goldman Sachs, acquired on
2/14/97, interest of $59,723, 5.33%, 5/15/97 ...... 4,482,000(d)(e) 4,482,000
Repurchase agreement with Goldman Sachs, acquired on
2/19/97, interest of $73,150, 5.32%, 5/20/97 ...... 5,500,000(d)(e) 5,500,000
Repurchase agreement with Goldman Sachs, acquired on
2/25/97, interest of $114,292, 5.32%, 5/27/97 ..... 8,499,000(d)(e) 8,499,000
Repurchase agreement with Morgan Stanley, acquired on
3/14/97, interest of $14,013, 5.31%, 4/2/97 ....... 5,000,000(d) 5,000,000
Repurchase agreement with Morgan Stanley, acquired on
3/24/97, interest of $10,675, 5.49%, 4/7/97 ....... 5,000,000(d) 5,000,000
Repurchase agreement with Morgan Stanley, acquired on
3/27/97, interest of $16,479, 5.65%, 4/3/97 ....... 15,000,000(d) 15,000,000
------------
Total Repurchase Agreements
(cost: $80,555,000) ............................ 80,555,000
------------
Total Investments in Securities
(cost: $295,891,294)(f) ........................ $295,891,294
------------
------------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) INTEREST RATE VARIES TO REFLECT CURRENT MARKET CONDITIONS; RATE SHOWN IS
THE EFFECTIVE RATE ON MARCH 31, 1997. 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 JOINT TRADING ACCOUNT WHICH IS COLLATERALIZED BY
U.S. GOVERNMENT AGENCY SECURITIES. ACCRUED INTEREST SHOWN REPRESENTS
INTEREST DUE AT MATURITY OF THE REPURCHASE AGREEMENT.
(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) REPURCHASE AGREEMENTS WITH GREATER THAN SEVEN DAYS TO MATURITY ARE
CONSIDERED ILLIQUID. THE AGGREGATE VALUE OF SUCH REPURCHASE AGREEMENTS
REPRESENTS 6.2% OF NET ASSETS.
(F) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 33 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY MARKET FUND March 31, 1997
..........................................................................................
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 (2.9%):
Indianapolis, IN, VRDN, 3.45%, 4/1/05 ............... $ 6,405,000(c) $ 6,405,000
-------------
EDUCATION REVENUE (4.0%):
Illinois Development and Finance Authority, VRDN,
3.25%, 8/1/26 ..................................... 4,000,000(c) 4,000,000
Orange County, FL, School District, 4.25%,
4/15/97 ........................................... 5,000,000 5,001,193
-------------
9,001,193
-------------
ELECTRIC REVENUE (1.8%):
Jacksonville, FL, 3.50%, 4/4/97 ..................... 2,000,000 2,000,000
Putnam County, FL, Pollution Control, 3.45%,
6/15/97 ........................................... 2,000,000 2,000,000
-------------
4,000,000
-------------
GENERAL OBLIGATIONS (22.6%):
Baltimore County, MD, Public Improvement, 6.80%,
9/1/97 ............................................ 1,000,000 1,013,950
Boston, MA, 5.00%, 8/1/97 ........................... 3,205,000 3,220,155
Georgia State, Series B, 6.25%, 4/1/97 .............. 5,000,000 5,000,000
Hammond, IN, Advance Funding Program Note, 3.50%,
7/10/97 3,000,000 3,000,000
Hammond, IN, Advance Funding Program Note, 4.20%,
1/8/98 ............................................ 6,000,000 6,022,312
Mankato, MN, VRDN, 3.25%, 2/1/18 .................... 200,000(c) 200,000
Massachusetts State, 5.70%, 3/1/98 .................. 5,620,000 5,722,497
Metropolitan Council, Minneapolis & St. Paul, MN,
Area Transit, 4.25%, 2/1/98 ....................... 2,655,000 2,670,076
Milwaukee County, WI, 5.13%, 12/1/97 ................ 1,475,000 1,490,106
Montgomery County, MD, 7.30%, 4/1/97 ................ 500,000 500,000
New York City, NY, Series B, VRDN, 3.70%, 10/1/20 ... 1,200,000(c) 1,200,000
New York City, NY, Series B, VRDN, 3.70%, 10/1/21 ... 3,300,000(c) 3,300,000
New York City, NY, Subseries A-10, VRDN, 3.70%,
8/1/16 ............................................ 1,000,000(c) 1,000,000
New York City, NY, Subseries B-2, VRDN, 3.70%,
8/15/19 ........................................... 1,000,000(c) 1,000,000
New York City, NY, Subseries B-3, VRDN, 3.70%,
8/15/18 ........................................... 400,000(c) 400,000
New York City, NY, Subseries B-4, VRDN, 3.70%,
8/15/22 ........................................... 1,200,000(c) 1,200,000
New York City, NY, Subseries B-4, VRDN, 3.70%,
8/15/23 ........................................... 2,300,000(c) 2,300,000
New York City, NY, Subseries B-4, VRDN, 3.70%,
8/15/21 ........................................... 1,000,000(c) 1,000,000
Olathe, KS, 4.50%, 6/1/97 ........................... 3,600,000 3,603,483
Omaha, NE, 5.00%, 12/1/97 ........................... 1,080,000 1,089,458
Pierce County, WA, School District, 3.90%, 6/1/97 ... 900,000 900,144
San Antonio, TX, 8.63%, 8/1/97 ...................... 1,200,000 1,220,204
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 34 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- -------------
<S> <C> <C>
South Carolina State, 5.75%, 8/1/97 ................. $ 1,000,000 $ 1,007,182
Washington State, 7.75%, 9/1/97 ..................... 1,075,000 1,093,739
Wisconsin State, Series C, 4.50%, 5/1/97 ............ 1,700,000 1,700,945
-------------
50,854,251
-------------
HEALTH/HOSPITAL/NURSING HOME (22.4%):
Alaska Industrial Development Authority, VRDN, 3.50%,
6/1/10 3,675,000(c) 3,675,000
Colorado Health Facilities Authority, Boulder
Hospital, VRDN, 3.45%, 10/1/14 .................... 5,500,000(c) 5,500,000
Grand Forks, ND, Health Care, United Hospital, VRDN,
3.85%, 12/1/16 .................................... 350,000(c) 350,000
Grand Forks, ND, Health Care, United Hospital, VRDN,
3.85%, 12/1/25 .................................... 1,000,000(c) 1,000,000
Illinois Development and Finance Authority, VRDN,
3.45%, 3/1/15 ..................................... 4,500,000(c) 4,500,000
Illinois Health Facilities Authority, VRDN, 3.85%,
5/1/22 ............................................ 3,715,000(c) 3,715,000
Illinois Health Facilities Authority, VRDN, 3.45%,
1/1/16 ............................................ 550,000(c) 550,000
Illinois Health Facilities Authority, VRDN, 3.45%,
1/1/16 ............................................ 605,000(c) 605,000
Illinois Health Facilities Authority, VRDN, 3.45%,
1/1/16 ............................................ 1,900,000(c) 1,900,000
Illinois Health Facilities Authority, VRDN, 3.40%,
12/1/15 ........................................... 500,000(c) 500,000
Illinois Health Facilities Authority, VRDN, 3.75%,
11/1/20 ........................................... 1,320,000(c) 1,320,000
Indiana Health Facilities Authority, VRDN, 3.45%,
11/1/09 ........................................... 900,000(c) 900,000
Indiana Health Facilities Authority, VRDN, 3.45%,
12/1/10 ........................................... 1,870,000(c) 1,870,000
Indiana Hospital Equipment Finance Authority, VRDN,
3.45%, 12/1/15 .................................... 3,760,000(c) 3,760,000
Minnesota Agriculture and Economic Development Board,
VRDN, 3.45%, 9/1/20 ............................... 2,000,000(c) 2,000,000
Washington State Healthcare Facilities Authority
Revenue, VRDN, 3.85%, 1/1/23 ...................... 2,880,000(c) 2,880,000
Wisconsin Health and Education Facilities Authority,
VRDN, 3.50%, 6/1/19 ............................... 100,000(c) 100,000
Wisconsin Health and Education Facilities Authority,
VRDN, 3.50%, 6/1/19 ............................... 7,720,000(c) 7,720,000
Wisconsin Health and Education Facilities Authority,
VRDN, 3.35%, 8/15/16 .............................. 7,300,000(c) 7,300,000
Wisconsin State Health Facilities, VRDN, 3.35%,
1/1/16 ............................................ 300,000(c) 300,000
-------------
50,445,000
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 35 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- -------------
<S> <C> <C>
HOUSING REVENUE (11.7%):
Iowa HFA, 3.70%, 5/1/97 ............................. $ 2,570,000 $ 2,570,000
Iowa HFA, VRDN, 4.13%, 1/1/15 ....................... 1,435,000(c) 1,435,000
Minnesota HFA, Series A, VRDN, 3.15%, 2/15/15 ....... 6,075,000(c) 6,075,000
Minnesota HFA, Series A, VRDN, 3.15%, 2/1/15 ........ 2,725,000(c) 2,725,000
New Hampshire State HFA, VRDN, 3.50%, 5/1/25 ........ 9,900,000(c)(d) 9,900,000
South Dakota HDA, Homeownership Series B, 3.75%,
5/1/97 ............................................ 3,650,000 3,650,000
-------------
26,355,000
-------------
INDUSTRIAL DEVELOPMENT REVENUE (9.8%):
Evansville, IN, VRDN, 3.55%, 9/1/04 ................. 2,500,000(c) 2,500,000
Henderson, NV, Public Improvement, VRDN, 3.85%,
4/1/07 ............................................ 1,500,000(c)(d) 1,500,000
Illinois Development and Finance Authority, VRDN,
3.65%, 10/1/06 .................................... 810,000(c)(d) 810,000
Illinois Development and Finance Authority, VRDN,
3.85%, 4/1/15 ..................................... 2,315,000(c) 2,315,000
Indiana State Development Financial Authority, VRDN,
3.50%, 3/1/09 ..................................... 2,000,000(c) 2,000,000
Indiana State Development Financial Authority, VRDN,
3.50%, 2/1/09 ..................................... 2,000,000(c) 2,000,000
Indiana State Employment, VRDN, 3.60%, 9/1/30 ....... 2,000,000(c) 2,000,000
Minneapolis and St. Paul, MN, Metropolitan Airport
Commission, VRDN, 3.25%, 9/1/13 ................... 100,000(c) 100,000
Tremonton, UT, VRDN, 3.85%, 6/1/00 .................. 1,100,000(c)(d) 1,100,000
Warren County, OH, VRDN, 3.85%, 9/1/15 .............. 7,650,000(c) 7,650,000
-------------
21,975,000
-------------
LEASING REVENUE (5.9%):
Metro Government Nashville and Davidson Counties, TN,
VRDN, 3.35%, 12/1/14 .............................. 2,500,000(c) 2,500,000
Pendleton County, KY, Multi-County Lease Revenue,
3.55%, 5/9/97 ..................................... 4,390,000 4,390,000
Pendleton County, KY, Multi-County Lease Revenue,
3.25%, 4/4/97 ..................................... 6,500,000 6,500,000
-------------
13,390,000
-------------
OTHER REVENUE (7.7%):
Colorado State General Fund, 4.50%, 6/27/97 ......... 3,675,000 3,680,300
Orange Country, FL, School District, 4.00%,
9/15/97 ........................................... 5,000,000 5,010,190
Texas State TRANS, 4.75%, 8/29/97 ................... 3,660,000 3,672,110
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 36 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- -------------
<S> <C> <C>
Wisconsin State Operating Notes, 4.50%, 6/16/97 ..... $ 5,000,000 $ 5,006,729
-------------
17,369,329
-------------
SALES TAX REVENUE (2.3%):
Bloomington, MN, Port Authority, VRDN, 3.15%,
2/1/09 ............................................ 500,000(c) 500,000
Bloomington, MN, Port Authority, VRDN, 3.30%,
2/1/09 ............................................ 700,000(c) 700,000
Illinois State, 6.95%, 6/15/97 ...................... 2,500,000 2,515,020
Maryland State Department of Transportation, 5.70%,
9/1/97 ............................................ 1,500,000 1,513,828
-------------
5,228,848
-------------
WATER/POLLUTION CONTROL REVENUE (8.2%):
East Baton Rouge Parish, LA, VRDN, 3.45%, 10/1/99 ... 1,000,000(c) 1,000,000
Illinois Development and Finance Authority, VRDN,
3.50%, 11/1/28 .................................... 1,600,000(c) 1,600,000
Jacksonville, FL, 3.55%, 5/12/97 .................... 2,200,000 2,200,000
Moffat County, CO, VRDN, 3.40%, 7/1/10 .............. 2,000,000(c) 2,000,000
New York City, NY, Municipal Water Authority, VRDN,
3.70%, 6/15/25 .................................... 8,800,000(c) 8,800,000
York County, SC, 3.65%, 8/15/97 ..................... 2,895,000 2,895,000
-------------
18,495,000
-------------
Total Tax-Exempt Securities
(cost: $223,518,621) ........................... 223,518,621
-------------
Total Investments in Securities
(cost: $223,518,621) (e) ....................... $ 223,518,621
-------------
-------------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(A) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(B) PORTFOLIO ABBREVIATIONS AND DEFINITIONS:
HDA - HOUSING DEVELOPMENT AUTHORITY
HFA - HOUSING FINANCE AUTHORITY
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 MARCH 31, 1997. THE MATURITY DATE REPRESENTS FINAL
MATURITY. HOWEVER, FOR PURPOSES OF RULE 2A-7, 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 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 5.9% OF NET ASSETS ON
MARCH 31, 1997.
(E) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
- ---------------------------------------------------------------------
1997 Semi-Annual Report 37 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
TRANSFER AND DIVIDEND DISBURSING AGENTS
Investors Fiduciary Trust Company
127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
Piper Jaffray Inc.
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804
Piper Trust Company
222 SOUTH NINTH STREET, MINNEAPOLIS, MN 55402-3804
CUSTODIAN AND ACCOUNTING AGENT
Investors Fiduciary Trust Company
127 WEST 10TH STREET, KANSAS CITY, MO 64105-1716
LEGAL COUNSEL
Dorsey & Whitney LLP
220 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402
- ---------------------------------------------------------------------
1997 Semi-Annual Report 38 Cash Management Funds
<PAGE>
SHAREHOLDER SERVICES
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.
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.
1997 Semiannual Report 39 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.
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
Piper Jaffray is a member of Securities Investor Protection Company (SIPC),
which protects securities customers of its members in liquidation up to $500,000
(limited to $100,000 on claims for cash). An explanatory brochure is available
from your Investment Executive. Piper Jaffray provides clients who are protected
by SIPC with additional protection through The Aetna Casualty and Surety
Company. Every Piper Jaffray securities client has protection up to $25 million.
Clients with a Piper Jaffray PRIME or PAT Plus account have protection up to $50
million. Both amounts include SIPCprotection. These protection plans do 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.
1997 Semiannual Report 40 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. 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.
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 SECURITIES
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 security, 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
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
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
http://www.piperjaffray.com/
1997 Semiannual Report 41 Cash Management Funds
<PAGE>
CASH MANAGEMENT FUNDS
[LOGO]
PIPER CAPITAL MANAGEMENT INCORPORATED
222 SOUTH NINTH STREET
MINNEAPOLIS, MN 55402-3804
[LOGO]
PIPER JAFFRAY INC., FUND DISTRIBUTOR AND NASD MEMEBER
#20600 5/1997 156-97
