<PAGE>
Cash Management Funds - 1998 Semiannual Report
1998 Semiannual Report
MONEY MARKET FUND
- --------------------------
U.S. GOVERNMENT
MONEY MARKET FUND
- --------------------------
TAX-EXEMPT
MONEY MARKET FUND
- --------------------------
[LOGO]
CASH
MANAGEMENT
FUNDS
[GRAPHIC]
<PAGE>
[LOGO]
CONTENTS
Glossary***. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Money Market Fund
Portfolio Managers' Letter . . . . . . . . . . . . . . . . . . . . . . . .2
Financial Statements and Notes. . . . . . . . . . . . . . . . . . . . . . 8
Investments in Securities. . . . . . . . . . . . . . . . . . . . . . . . 24
U.S. Government Money Market Fund
Portfolio Managers' Letter . . . . . . . . . . . . . . . . . . . . . . . .2
Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . .8
Investments in Securities. . . . . . . . . . . . . . . . . . . . . . . . 32
Tax-Exempt Money Market Fund
Portfolio Managers' Letter . . . . . . . . . . . . . . . . . . . . . . . .5
Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . .8
Investments in Securities. . . . . . . . . . . . . . . . . . . . . . . . 36
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.
***This report includes a glossary to help you understand financial terms used
in the portfolio managers' letters. When you see this symbol, it indicates a
word that is defined in the glossary.
INTERNATIONAL GROWTH FUNDS
- -----------------------------------------
Emerging Markets Growth Fund
Pacific-European Growth Fund
U.S. GROWTH FUNDS
- -----------------------------------------
Small Company Growth Fund
Emerging Growth Fund
Growth Fund
GROWTH AND INCOME FUNDS
- -----------------------------------------
Growth and Income Fund
Balanced Fund
INCOME FUNDS
- -----------------------------------------
Government Income Fund
Intermediate Bond Fund
Adjustable Rate Mortgage Securities Fund
TAX-EXEMPT INCOME FUNDS
- -----------------------------------------
National Tax-Exempt Fund
Minnesota Tax-Exempt Fund
CASH MANAGEMENT FUNDS*
- --------------------------------------------------------------------------------
MONEY MARKET FUND An investment staple, cash
U.S. GOVERNMENT MONEY MARKET FUND management funds can help
TAX-EXEMPT MONEY MARKET FUND you organize your finances
Institutional Money Market Fund and build your assets.
Piper Funds provide you with the flexibility to help you pursue your investment
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 Piper Capital Mutual Fund Services
at 800 866-7778. Please read the prospectuses carefully before investing.
*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.
<PAGE>
30-Day Effective Yields
- --------------------------------------------------------------------------------
[EDGAR REPRESENTATION OF GRAPHIC DATA]
<TABLE>
<CAPTION>
U.S.
Money Money Government Tax-Exempt
Market Market Money Money
Fund Fund Market Market
Class A Class B Fund Fund
---------- --------- ------------ ------------
<S> <C> <C> <C> <C>
4/97 4.91 4.06 4.74 2.90
5/97 4.96 4.11 4.77 3.10
6/97 4.98 4.14 4.79 3.00
7/97 5.01 4.16 4.79 2.81
8/97 5.00 4.15 4.81 2.70
9/97 5.00 4.15 4.85 2.89
10/97 4.99 4.15 4.83 2.91
11/97 5.01 4.17 4.80 2.91
12/97 5.14 4.30 4.91 2.96
1/98 5.14 4.30 4.93 2.85
2/98 5.07 4.24 4.86 2.66
3/98 4.94 4.13 4.92 2.70
</TABLE>
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 CERTAIN
12B-1 FEES. WITHOUT WAIVERS, 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 4.84%, 4.82% AND 2.60%, RESPECTIVELY, ON MARCH 31, 1998.
- --------------------------------------------------------------------------------
1998 Semiannual Report 1 Cash Management Funds
<PAGE>
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
[PHOTO]
NANCY S. OLSEN
is primarily responsible for the management of Money Market Fund and U.S.
Government Money Market Fund. She has 20 years of financial experience.
- --------------------------------------------------------------------------------
May 7, 1998
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
THE SEVEN-DAY CURRENT YIELD FOR MONEY MARKET FUND CLASS A DECREASED AND THE U.S.
GOVERNMENT MONEY MARKET FUND INCREASED SINCE WE REPORTED TO YOU SIX MONTHS AGO.
The seven-day current yield for Money Market Fund Class A decreased from 4.88%
on September 30, 1997, to 4.32% on March 31, 1998. U.S. Government Money Market
Fund's seven-day current yield is up from 4.87% on September 30, 1997, to 4.89%
on March 31, 1998.
SHORT-TERM INTEREST RATES FLUCTUATED DURING THE PERIOD WITH CHANGING
EXPECTATIONS ABOUT ECONOMIC GROWTH. In the fourth quarter of 1997, the financial
woes of economies in Asia and the potential spillover effects on the U.S.
economy dominated headlines and
* 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 4.22% and 4.79%,
respectively, on March 31, 1998. As of March 31, 1998, the seven-day current
yield for Money Market Fund Class B was 3.59%.
- --------------------------------------------------------------------------------
MONEY MARKET FUND PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1998.
[EDGAR REPRESENTATION OF PIE CHART]
Commercial Paper.............................. 80%
Certificates of Deposit....................... 14%
U.S. Government Agency Securities............. 4%
Bank Notes.................................... 1%
U.S. Treasury Securities...................... 1%
- --------------------------------------------------------------------------------
1998 Semiannual Report 2 Cash Management Funds
<PAGE>
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
[PHOTO]
SHAISTA B. TAJAMAL
assists with the management of Money Market Fund and U.S. Government Money
Market Fund. She has eight years of financial experience.
- --------------------------------------------------------------------------------
influenced U.S. domestic bond and money markets. At the same time, reports on
the U.S. economic environment portrayed a strong economy as evidenced by
continued gains in manufacturing, employment, and consumption, but also lower
than expected inflation as indicated by declines in crude oil, industrial
commodity prices and gold.
YIELDS ON MONEY MARKET SECURITIES DECLINED BY .10% TO .15% IN THE FIRST PART OF
THE FOURTH QUARTER. In the last part of the fourth quarter, money market yields
rose significantly due to year-end window dressing*** by corporations. Early in
l998, bond and money market yields declined as the window dressing effects went
away. In addition, Federal Reserve Board (Fed) Chairman Alan Greenspan hinted at
the reduced need for Fed restraint. Since then, the bond and money markets have
continued to grapple with the opposite effects of a vigorous, expanding economy
and a secular backdrop of low inflation, federal debt reduction and productivity
enhancing technological advances.
WE PROVIDED YOU WITH A COMPETITIVE RETURN DURING THE REPORTING PERIOD BY
MANAGING THE FUNDS' AVERAGE WEIGHTED MATURITY*** AND MAKING SOME CHANGES TO THE
STRUCTURE OF THE FUNDS. We lengthened the average weighted maturities of the
funds as we moved closer to year-end l997 to take advantage of the higher rates
available at
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1998.
[EDGAR REPRESENTATION OF PIE CHART]
U.S. Treasury Securities............................ 3%
Federal Farm Credit Bank............................ 7%
Federal Home Loan Mortgage Corporation.............. 29%
Federal Home Loan Bank.............................. 11%
Federal National Mortgage Association............... 26%
U.S. Government Agency-Backed Securities............ 5%
Student Loan Marketing Association.................. 7%
Repurchase Agreements............................... 12%
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
- --------------------------------------------------------------------------------
1998 Semiannual Report 3 Cash Management Funds
<PAGE>
MONEY MARKET FUND &
U.S. GOVERNMENT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
that time. We continued to position both the Money Market Fund and U.S.
Government Money Market Fund long to their benchmarks*** throughout most of the
first quarter of l998. This strategy worked well given the decline in money
market yields since the end of the fourth quarter of l997. We also continued to
add securities in the one-year area, thereby maintaining the barbell
structure*** we put on in the third quarter of l997. A barbell structure
clusters maturities at both the short end of the yield curve*** (one to three
months) and at the longer end (l0 to l3 months). This structure works well when
the difference between yields on short- and longer-term securities decreases,
which is what happened during the fourth quarter of l997 and the first quarter
of l998.
GOING FORWARD, WE BELIEVE ECONOMIC GROWTH WILL MODERATE AND INFLATION WILL
REMAIN UNDER CONTROL. Any changes in Federal Reserve Board policy will depend on
economic releases in the coming months. We will continue to monitor those
releases carefully 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 yield curve (l3 months
or less), investing in high-quality securities and managing the funds' average
weighted maturity based on our interest rate forecast.
Thank you for your investment in Money Market Fund and/or U.S. Government Money
Market Fund. We remain committed to providing investments that help you achieve
your investment goals.
Sincerely,
/s/ Nancy Shellenberger Olsen
Nancy Shellenberger Olsen
Portfolio Manager
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
- --------------------------------------------------------------------------------
1998 Semiannual Report 4 Cash Management Funds
<PAGE>
TAX-EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
[PHOTO]
DOUGLAS J. WHITE, CFA
shares responsibility for the management of Tax-Exempt Money Market Fund. He has
15 years of financial experience.
- --------------------------------------------------------------------------------
May 7, 1998
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
THE SEVEN-DAY CURRENT YIELD ON TAX-EXEMPT MONEY MARKET FUND WAS 3.22%* ON MARCH
31, 1998. This represents an increase from our last report to you six months
ago, when the seven-day current yield was 3.01%.
SHORT-TERM INTEREST RATES FLUCTUATED DURING THE PERIOD WITH CHANGING
EXPECTATIONS ABOUT ECONOMIC GROWTH. In the fourth quarter of 1997, the financial
woes of economies in Asia and the potential spillover effects on the U.S.
economy dominated headlines and influenced U.S. domestic bond and money markets.
At the same time, reports on the U.S. economic environment portrayed a strong
economy as evidenced by continued gains in manufacturing, employment, and
consumption, but also lower than expected inflation as indicated by declines in
crude oil, industrial commodity prices and gold.
* 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
3.12% on March 31, 1998.
- -------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
As a percentage of total assets on March 31, 1998.
[EDGAR REPRESENTATION OF PIE CHART]
Sales/Excise Tax Revenue........................ 3%
Hospital Revenue................................ 6%
Housing Revenue................................. 8%
Health Services Loan Pool Revenue............... 2%
Electric Revenue................................ 1%
Other Assets.................................... 1%
General Obligations............................. 22%
Health Services Revenue......................... 12%
Nursing Home Revenue............................ 1%
Leasing Revenue................................. 4%
Education Revenue............................... 7%
Other Revenue................................... 8%
Industrial Development Revenue.................. 25%
- --------------------------------------------------------------------------------
1998 Semiannual Report 5 Cash Management Funds
<PAGE>
TAX-EXEMPT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
[PHOTO]
CATHERINE STIENSTRA
shares responsibility for the management of Tax-Exempt Money Market Fund. She
has seven years of financial experience.
- --------------------------------------------------------------------------------
IN THIS ENVIRONMENT, YIELDS ON TAX-EXEMPT MONEY MARKET SECURITIES DECLINED
DURING THE EARLY PART OF THE REPORTING PERIOD. In the last part of the fourth
quarter, however, yields rose significantly due to year-end window dressing***
by corporations. Early in l998, bond and money market yields declined as the
window dressing effects went away. In addition, Federal Reserve Board (Fed)
Chairman Alan Greenspan hinted at the reduced need for Fed restraint. Since
then, the bond and money markets have continued to grapple with the opposite
effects of a vigorous, expanding economy and a secular backdrop of low
inflation, federal debt reduction and productivity enhancing technological
advances.
THROUGHOUT THE SIX-MONTH PERIOD, WE FELT COMFORTABLE MAINTAINING THE FUND'S
AVERAGE WEIGHTED MATURITY*** AT LEVELS AT OR SLIGHTLY HIGHER THAN COMPARABLE
BENCHMARKS. Monetary policy, as set by the Fed, remained constant during the
period, and allowed us to add high-quality, fixed-rate securities to the fund's
portfolio as they became available at attractive prices. This strategy seeks to
lock in higher yields, and extends the average maturity of the fund.
AS OF MARCH 31, 1998, 46% OF THE FUND'S ASSETS WERE INVESTED IN FIXED-RATE
SECURITIES, AND 64% WERE VARIABLE-RATE. This allowed the fund to benefit from
any rises in short-term rates throughout the period, while providing liquidity
for money flow fluctuations in response to volatility in the equity markets.
SUPPLY OF HIGH-QUALITY, SHORT-TERM MUNICIPAL SECURITIES DECREASED IN FEBRUARY,
WHICH CAUSED US TO MAKE SOME TEMPORARY CHANGES TO OUR INVESTMENT STRATEGY. This
seasonal shortage occurred due to increased assets in municipal money market
funds and not only caused a decreased supply, but higher prices and lower
yields. To counter this, we invested excess cash in overnight taxable
investments as a temporary measure until more supply became available. The
supply of tax-exempt issues is beginning to pick up
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
- --------------------------------------------------------------------------------
1998 Semiannual Report 6 Cash Management Funds
<PAGE>
TAX-EXEMPT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
again, as investors move assets out of tax-exempt money markets to meet tax
deadlines. We will keep a sizable portion of the fund in daily liquid securities
to meet these outflows.
Thank you for investing in Tax-Exempt Money Market Fund. We appreciate the
opportunity to help you manage your assets and work toward your investment
goals.
Sincerely,
/s/ Douglas J. White
Douglas J. White
Portfolio Manager
/s/ Catherine M. Stienstra
Catherine M. Stienstra
Portfolio Manager
- --------------------------------------------------------------------------------
1998 Semiannual Report 7 Cash Management Funds
<PAGE>
Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES March 31, 1998
................................................................................
<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 $0; $38,611,000 and $0, respectively) ...... $2,534,279,254 $ 303,698,878 $ 224,769,287
Cash in bank on demand deposit ............................. 50,488 20,861 36,786
Accrued interest receivable ................................ 11,250,742 1,599,180 1,947,417
--------------- --------------- ---------------
Total assets ............................................. 2,545,580,484 305,318,919 226,753,490
--------------- --------------- ---------------
LIABILITIES:
Dividends payable to shareholders .......................... 3,505,908 447,820 205,792
Accrued investment management fee .......................... 801,429 130,114 100,501
Accrued distribution and service fees ...................... 428,448 52,045 40,200
--------------- --------------- ---------------
Total liabilities ........................................ 4,735,785 629,979 346,493
--------------- --------------- ---------------
Net assets applicable to outstanding capital stock ....... $2,540,844,699 $ 304,688,940 $ 226,406,997
--------------- --------------- ---------------
--------------- --------------- ---------------
COMPOSITION OF NET ASSETS:
Capital stock and additional paid-in capital ............... $2,540,844,699 $ 304,688,940 $ 226,406,997
--------------- --------------- ---------------
Total - representing net assets applicable to outstanding
capital stock .......................................... $2,540,844,699 $ 304,688,940 $ 226,406,997
--------------- --------------- ---------------
--------------- --------------- ---------------
NET ASSET VALUE AND OFFERING PRICE:
CLASS A (NOTE 1):
Net assets ................................................. $2,540,834,247 $ 304,688,940 $ 226,406,997
Shares outstanding (authorized 80 billion, 100 billion and
100 billion shares, respectively, of $0.01 par value) .... 2,540,834,247 304,688,940 226,406,997
Net asset value and offering price per share ............... $ 1.00 $ 1.00 $ 1.00
CLASS B:
Net assets ................................................. $ 10,452 -- --
Shares outstanding (authorized 10 billion shares of $0.01
par value) ............................................... 10,452 -- --
Net asset value and offering price per share ............... $ 1.00 -- --
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1998 Semiannual Report 8 Cash Management Funds
<PAGE>
Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS For The Six Months Ended March 31, 1998
................................................................................
<TABLE>
<CAPTION>
U.S. GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
--------------- --------------- ---------------
<S> <C> <C> <C>
INCOME:
Interest ................................................... $ 68,064,599 $ 8,331,433 $ 4,306,454
--------------- --------------- ---------------
EXPENSES (NOTE 5):
Investment management fee .................................. 4,500,902 737,625 588,799
Distribution and service fees:
CLASS A .................................................. 3,566,448 442,575 353,280
CLASS B .................................................. 51 -- --
Custodian and accounting fees .............................. 354,194 85,052 71,380
Transfer agent and dividend disbursing agent fees .......... 1,783,213 108,186 64,835
Registration fees .......................................... 184,585 32,398 36,422
Reports to shareholders .................................... 122,736 16,708 13,675
Directors' fees ............................................ 4,036 4,036 4,036
Audit and legal fees ....................................... 29,369 22,369 22,369
Other expenses ............................................. 51,519 7,033 6,146
--------------- --------------- ---------------
Total expenses ........................................... 10,597,053 1,455,982 1,160,942
Less Class A expenses waived by the distributor ........ (1,188,816) (147,525) (117,760)
--------------- --------------- ---------------
Net expenses before expenses paid indirectly ............. 9,408,237 1,308,457 1,043,182
Less expenses paid indirectly .......................... (3,187) (6,411) (1,716)
--------------- --------------- ---------------
Total net expenses ....................................... 9,405,050 1,302,046 1,041,466
--------------- --------------- ---------------
Net investment income .................................... $ 58,659,549 $ 7,029,387 $ 3,264,988
--------------- --------------- ---------------
--------------- --------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1998 Semiannual Report 9 Cash Management Funds
<PAGE>
Financial Statements (continued)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
................................................................................
<TABLE>
<CAPTION>
MONEY MARKET FUND
---------------------------------
Six Months
Ended 3/31/98 Year Ended
(Unaudited) 9/30/97
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 58,659,549 $ 100,349,040
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
CLASS A:
From net investment income ............................... (58,659,336) (100,348,789)
CLASS B:
From net investment income ............................... (213) (251)
--------------- ---------------
Total distributions ...................................... (58,659,549) (100,349,040)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
CLASS A .................................................... 275,012,519 300,021,720
CLASS B .................................................... 213 10,239
--------------- ---------------
Increase in net assets from capital share transactions ... 275,012,732 300,031,959
--------------- ---------------
Total increase in net assets ............................. 275,012,732 300,031,959
Net assets at beginning of period .......................... 2,265,831,967 1,965,800,008
--------------- ---------------
Net assets at end of period ................................ $ 2,540,844,699 $ 2,265,831,967
--------------- ---------------
--------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1998 Semiannual 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 3/31/98 Year Ended
(Unaudited) 9/30/97
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 7,029,387 $ 13,476,301
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. (7,029,387) (13,476,301)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Increase (decrease) in net assets from capital share
transactions ............................................. 19,874,990 (6,207,861)
--------------- ---------------
Total increase (decrease) in net assets .................. 19,874,990 (6,207,861)
Net assets at beginning of period .......................... 284,813,950 291,021,811
--------------- ---------------
Net assets at end of period ................................ $ 304,688,940 $ 284,813,950
--------------- ---------------
--------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1998 Semiannual 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 3/31/98 Year Ended
(Unaudited) 9/30/97
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 3,264,988 $ 6,126,749
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. (3,264,988) (6,126,749)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Increase (decrease) in net assets from capital share
transactions ............................................. (8,114,432) 24,582,439
--------------- ---------------
Total increase (decrease) in net assets .................. (8,114,432) 24,582,439
Net assets at beginning of period .......................... 234,521,429 209,938,990
--------------- ---------------
Net assets at end of period ................................ $ 226,406,997 $ 234,521,429
--------------- ---------------
--------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- ---------------------------------------------------------------------
1998 Semiannual 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 fund 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 that date were classified
as Class A shares. Key features of each class are:
CLASS A:
- Lower distribution fees than Class B
CLASS B:
- Subject to a contingent deferred sales charge upon redemption
- Higher distribution fees than Class A
- Automatic conversion to Class A shares at the beginning of the
sixth calendar year after issuance
- Available for purchase only in exchange for Class B shares of
another fund managed by the advisor
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
- ---------------------------------------------------------------------
1998 Semiannual Report 13 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
denominated foreign commercial paper, repurchase agreements,
obligations of domestic and foreign banks (time deposits,
certificates of deposit and bankers' acceptances), U.S.
government securities and short-term corporate obligations.
U.S. Government Money Market Fund invests in 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.
- ---------------------------------------------------------------------
1998 Semiannual 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 (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.
- ---------------------------------------------------------------------
1998 Semiannual Report 15 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
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, 1998, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
-------------- ---------------- -------------
<S> <C> <C> <C>
Purchases .............................. $8,982,724,769 $ 2,417,289,775 $ 726,897,131
Proceeds from sales .................... $8,724,087,262 $ 2,401,482,211 $ 735,704,000
</TABLE>
(4) CAPITAL SHARE
TRANSACTIONS
................................
Capital share transactions for the funds at net asset value of $1
per share were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
1998 1997 (a)
--------------- ----------------
<S> <C> <C>
MONEY MARKET FUND:
CLASS A
Sales of fund shares ................................ $10,024,545,525 $ 16,997,576,820
Issued for reinvested distributions . 55,807,153 97,113,763
Redemptions of fund shares .......................... (9,805,340,159) (16,794,668,863)
--------------- ----------------
$ 275,012,519 $ 300,021,720
--------------- ----------------
--------------- ----------------
CLASS B
Sales of fund shares ................................ $ 4,572 $ 11,044
Issued for reinvested distributions . 213 240
Redemptions of fund shares .......................... (4,572) (1,045)
--------------- ----------------
$ 213 $ 10,239
--------------- ----------------
--------------- ----------------
</TABLE>
(a) Period from February 18, 1997 (commencement of offering)
to September 30, 1997 for Class B shares.
- ---------------------------------------------------------------------
1998 Semiannual Report 16 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
1998 1997
---------------- ----------------
<S> <C> <C>
U.S. GOVERNMENT MONEY MARKET FUND:
Sales of fund shares ................. $ 672,766,484 $ 1,179,382,187
Issued for reinvested
distributions ...................... 6,758,403 13,081,170
Redemptions of fund shares ........... (659,649,897) (1,198,671,218)
---------------- ----------------
$ 19,874,990 $ (6,207,861)
---------------- ----------------
---------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
1998 1997
---------------- ----------------
<S> <C> <C>
TAX-EXEMPT MONEY MARKET FUND:
Sales of fund shares ................. $ 1,043,126,545 $ 1,905,106,004
Issued for reinvested
distributions ...................... 3,120,737 5,907,226
Redemptions of fund shares ........... (1,054,361,714) (1,886,430,791)
---------------- ----------------
$ (8,114,432) $ 24,582,439
---------------- ----------------
---------------- ----------------
</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. For the six months ended March 31, 1998, the effective
investment management fee paid by the funds was .38%, .50% and
.50% on an annual basis for Money Market Fund, U.S. Government
Money Market Fund and Tax-Exempt Money Market Fund, respectively.
- ---------------------------------------------------------------------
1998 Semiannual Report 17 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE FEES
Each fund also pays Piper Jaffray Inc. (Piper Jaffray), the
funds' distributor, fees accrued daily and paid quarterly for
providing shareholder services and distribution-related services.
The fees for each class, which are being voluntarily limited for
U.S. Government Money Market Fund, Tax-Exempt Money Market Fund
and Class A of Money Market Fund for the year ending September
30, 1998, are stated below as a percent of average daily net
assets attributable to such shares.
<TABLE>
<CAPTION>
MONEY MARKET
FUND U.S. GOVERNMENT TAX-EXEMPT
----------------- MONEY MARKET MONEY MARKET
CLASS A CLASS B FUND 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, 1998, Piper Jaffray and Piper
Trust received the following amounts in connection with the
shareholder account servicing agreements:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY
MARKET MARKET MARKET
FUND FUND FUND
----------- ----------- -----------
<S> <C> <C> <C>
Piper Jaffray .......................... $1,768,565 $ 100,686 $ 57,335
Piper Trust ............................ 4,644 -- --
----------- ----------- -----------
$1,773,209 $ 100,686 $ 57,335
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
- ---------------------------------------------------------------------
1998 Semiannual 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.
(6) PENDING
ACQUISITION
................................
On December 15, 1997, Piper Jaffray Companies Inc., the parent
company of the funds' investment advisor, announced that it had
entered into an agreement to be acquired by U.S. Bancorp. It is
anticipated that this acquisition will be completed in the second
quarter of 1998, subject to regulatory approval, the approval of
Piper Jaffray Companies shareholders and the satisfaction of
customary closing conditions.
U.S. Bancorp is a multi-state bank holding company headquartered
in Minneapolis, Minnesota with a geographic service area spanning
17 states. As of December 31, 1997, U.S. Bancorp was the 15th
largest U.S. commercial bank holding company, with assets of
nearly $71.3 billion. U.S. Bank National Association ("U.S.
Bank"), a wholly owned subsidiary of U.S. Bancorp, currently acts
as the investment advisor to 32 mutual funds (the "First American
Funds"). As of December 31, 1997, U.S. Bank, acting through its
First American Asset Management group, managed more than $55
billion in assets, including approximately $20.5 billion in
assets of the First American Funds.
Effective as of the date of the acquisition, SEI Investments
Distribution Company will assume the role of the principal
distributor for the funds.
Under the Investment Company Act of 1940, as amended (the "1940
Act"), consummation of the acquisition of Piper Jaffray
- ---------------------------------------------------------------------
1998 Semiannual Report 19 Cash Management Funds
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
Companies by U.S. Bancorp will result in the assignment and
automatic termination of the funds' investment advisory
agreements with Piper Capital Management Incorporated. The 1940
Act requires that any new investment advisory agreements for the
funds be approved by the funds' board of directors and
shareholders.
(7) SUBSEQUENT
EVENT
................................
CLASS B SHARES NO LONGER OFFERED
Effective April 21, 1998, the Money Market Fund will no longer
offer Class B shares. Any outstanding Class B shares will be
automatically converted to Class A shares as of the close of
business on April 27, 1998. No contingent deferred sales charges
or other fees will be imposed in connection with this conversion.
- ---------------------------------------------------------------------
1998 Semiannual Report 20 Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
(8) 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
------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 -----------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
---------------- ------- ------- ------- ------- -------
<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 0.05 0.03 0.02
Distributions to shareholders:
From net investment income ............................... (0.02) (0.05) (0.05) (0.05) (0.03) (0.02)
-------- ------- ------- ------- ------- -------
Net asset value, end of period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- ------- -------
-------- ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (a) ........................................... 2.48% 4.84% 4.79% 5.05% 2.98% 2.45%
Net assets at end of period (in millions) .................. $2,541 $ 2,266 $ 1,966 $ 1,703 $ 1,185 $ 1,106
Ratio of expenses to average daily net assets .............. 0.79%(c) 0.82% 0.84% 0.92% 0.93% 0.96%
Ratio of net investment income to average daily net
assets ................................................... 4.93%(c) 4.76% 4.73% 4.94% 2.90% 2.42%
Ratios before waivers by the distributor:
Ratio of expenses to average daily net assets before
waivers ................................................ 0.89%(c) 0.92% 0.94% 1.02% 1.03% 1.06%
Ratio of net investment income to average daily net assets
before waivers ......................................... 4.83%(c) 4.66% 4.63% 4.84% 2.80% 2.32%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------
Six Months Ended
March 31, 1998 Period Ended
(Unaudited) September 30, 1997(b)
---------------- ----------------------
<S> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period .......................... $ 1.00 $ 1.00
------- -------
Operations:
Net investment income ....................................... 0.02 0.02
Distributions to shareholders:
From net investment income .................................. (0.02) (0.02)
------- -------
Net asset value, end of period ............................ $ 1.00 $ 1.00
------- -------
------- -------
SELECTED INFORMATION
Total return (a) .............................................. 2.05% 2.39%
Net assets at end of period (in thousands) .................... $ 10 $ 10
Ratio of expenses to average daily net assets ................. 1.59%(c) 1.63%(c)
Ratio of net investment income to average daily net assets .... 4.14%(c) 4.00%(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.
- ---------------------------------------------------------------------
1998 Semiannual Report 21 Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
(8) 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>
Six Months Ended Year Ended September 30,
March 31, 1998 -----------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
---------------- ------- ------- ------- ------- -------
<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 0.05 0.03 0.02
Distributions to shareholders:
From net investment income ............................... (0.02) (0.05) (0.05) (0.05) (0.03) (0.02)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (a) ........................................... 2.38% 4.71% 4.72% 4.99% 2.98% 2.51%
Net assets at end of period (in millions) .................. $ 305 $ 285 $ 291 $ 256 $ 185 $ 195
Ratio of expenses to average daily net assets .............. 0.89%(b) 0.90% 0.90% 0.91% 0.92% 0.93%
Ratio of net investment income to average daily net
assets ................................................... 4.77%(b) 4.61% 4.62% 4.90% 2.88% 2.41%
Ratios before waivers by the distributor:
Ratio of expenses to average daily net assets before
waivers ................................................ 0.99%(b) 1.00% 1.00% 1.01% 1.02% 1.03%
Ratio of net investment income to average daily net assets
before waivers ......................................... 4.67%(b) 4.51% 4.52% 4.80% 2.78% 2.31%
</TABLE>
(a) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(b) ANNUALIZED.
- ---------------------------------------------------------------------
1998 Semiannual Report 22 Cash Management Funds
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
(8) 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>
Six Months Ended Year Ended September 30,
March 31, 1998 -----------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
---------------- ------- ------- ------- ------- -------
<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 0.03 0.02 0.02
Distributions to shareholders:
From net investment income (a) ........................... (0.01) (0.03) (0.03) (0.03) (0.02) (0.02)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return (b) ........................................... 1.38% 2.77% 2.80% 3.02% 1.82% 1.87%
Net assets at end of period (in millions) .................. $ 226 $ 235 $ 210 $ 206 $ 178 $ 169
Ratio of expenses to average daily net assets .............. 0.89%(c) 0.90% 0.90% 0.91% 0.90% 0.92%
Ratio of net investment income to average daily net
assets ................................................... 2.77%(c) 2.75% 2.76% 2.97% 1.80% 1.83%
Ratios before waivers by the distributor:
Ratio of expenses to average daily net assets before
waivers ................................................ 0.99%(c) 1.00% 1.00% 1.01% 1.00% 1.02%
Ratio of net investment income to average daily net assets
before waivers ......................................... 2.67%(c) 2.65% 2.66% 2.87% 1.70% 1.73%
</TABLE>
(a) INCLUDES DISTRIBUTIONS WHICH ARE TAXABLE FOR FEDERAL AND STATE INCOME TAX
PURPOSES OF $0.0001 AND $0.0001 PER SHARE FOR FISCAL 1997 AND 1995,
RESPECTIVELY.
(b) TOTAL RETURN ASSUMES REINVESTMENT OF DISTRIBUTIONS AND DOES NOT REFLECT A
SALES CHARGE.
(c) ANNUALIZED.
- ---------------------------------------------------------------------
1998 Semiannual Report 23 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET FUND March 31, 1998
...........................................................................................
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 (4.1%):
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (b) (1.0%):
5.63%, 10/20/98 ..................................... $ 25,000,000 $ 24,995,973
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION COUPON NOTES (0.2%):
5.89%, 5/29/98 ...................................... 6,000,000 5,999,032
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES (0.3%):
5.60%, 4/13/98 ...................................... 8,135,000 8,119,815
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION FLOATING RATE NOTES (b) (1.4%):
5.28%, 6/2/99 ....................................... 9,000,000 8,975,526
5.53%, 4/1/99 ....................................... 10,375,000 10,350,164
5.28%, 6/2/99 ....................................... 9,000,000 8,965,643
5.27%, 5/11/98 ...................................... 8,500,000 8,499,372
--------------
36,790,705
--------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE NOTES (b) (0.7%):
5.60%, 10/6/98 ...................................... 17,000,000 16,994,484
--------------
U.S. TREASURY NOTES (0.5%):
5.50%, 2/28/99 ...................................... 12,433,000 12,435,087
--------------
Total U.S. Government and Agency Securities
(cost: $105,335,096) ........................... 105,335,096
--------------
U.S. GOVERNMENT AGENCY - BACKED SECURITIES (0.4%):
Downey Savings & Loan Association, LOC Federal Home
Loan Bank of San Francisco, 5.64%, 5/18/98
(cost: $8,903,951) ................................ 8,970,000 8,903,951
--------------
BANK NOTES (1.0%):
LaSalle National Bank, 6.27%, 4/27/98
(cost: $24,999,661) ............................... 25,000,000 24,999,661
--------------
CERTIFICATES OF DEPOSIT - YANKEE (c) (14.1%):
ABN-AMRO, 5.63%, 3/12/99 ............................ 31,000,000 30,962,701
Bank of Montreal, 5.81%, 11/9/98 .................... 4,400,000 4,403,203
Bank of Montreal, 5.87%, 11/25/98 ................... 35,000,000 34,995,633
Bank of Nova Scotia, 5.95%, 6/29/98 ................. 29,000,000 28,996,617
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
Barclays Bank PLC, 5.90%, 10/22/98 .................. $ 20,000,000 $ 20,003,414
Bayerische Vereinsbank AG, 5.85%, 12/18/98 .......... 25,500,000 25,528,002
Commerzbank, 5.64%, 3/2/99 .......................... 27,500,000 27,487,903
Deutsche Bank, 5.67%, 1/8/99 ........................ 29,500,000 29,493,446
Generale Bank, 5.96%, 6/18/98 ....................... 17,000,000 16,998,958
Rabobank, 5.81%, 5/19/98 ............................ 35,000,000 35,000,907
Royal Bank of Canada, 5.88%, 9/17/98 ................ 17,000,000 17,003,411
Societe Generale, 6.00%, 6/16/98 .................... 21,000,000 20,998,287
Societe Generale, 5.97%, 10/27/98 ................... 15,000,000 14,995,076
Swiss Bank Corp., 6.05%, 5/22/98 .................... 12,400,000 12,402,641
Swiss Bank Corp., 5.65%, 3/24/99 .................... 15,000,000 14,992,969
Swiss Bank Corp., 5.69%, 1/7/99 ..................... 25,000,000 24,994,467
--------------
Total Certificates Of Deposit - Yankee
(cost: $359,257,635) ........................... 359,257,635
--------------
COMMERCIAL PAPER (79.7%):
ASSET-BACKED SECURITIES (4.8%):
Asset Securitization Cooperative Corp., 5.48%,
4/3/98 ............................................ 30,000,000(d) 29,990,867
Asset Securitization Cooperative Corp., 5.50%,
4/24/98 ........................................... 5,600,000(d) 5,580,322
Enterprise Funding Corp., 5.69%, 4/15/98 ............ 6,686,000(d) 6,671,205
Four Winds Funding Corp., 5.48%, 4/14/98 ............ 20,000,000(d) 19,960,422
Four Winds Funding Corp., 5.52%, 4/2/98 ............. 16,600,000(d) 16,597,455
Four Winds Funding Corp., 5.50%, 4/7/98 ............. 4,000,000(d) 3,996,333
Kitty Hawk Funding, 5.55%, 4/9/98 ................... 9,430,000(d) 9,418,370
Kitty Hawk Funding, 5.55%, 4/21/98 .................. 31,310,000(d) 31,213,461
--------------
123,428,435
--------------
BUSINESS CREDIT INSTITUTIONS (14.7%):
BellSouth Capital Funding Corp., 5.50%, 4/9/98 ...... 5,535,000 5,528,234
BellSouth Capital Funding Corp., 5.51%, 4/13/98 ..... 32,600,000 32,540,125
BTR Dunlop Finance Inc., 5.50%, 6/17/98 ............. 22,901,000(d) 22,631,595
BTR Dunlop Finance Inc., 5.38%, 8/12/98 ............. 19,700,000(d) 19,308,441
Caterpillar Financial Services Corp., 5.70%,
4/8/98 ............................................ 7,400,000 7,391,798
Caterpillar Financial Services Corp., 5.57%,
4/21/98 ........................................... 7,040,000 7,018,215
Caterpillar Financial Services Corp., 5.51%,
4/27/98 ........................................... 4,916,000 4,896,437
Caterpillar Financial Services Corp., 5.50%,
7/9/98 ............................................ 18,700,000 18,417,163
Ford Motor Credit Co., 5.47%, 4/10/98 ............... 25,831,000 25,795,676
Ford Motor Credit Co., 5.47%, 4/10/98 ............... 9,360,000 9,347,200
General Electric Capital Corp., 5.58%, 4/30/98 ...... 15,000,000 14,932,575
General Electric Capital Corp., 5.50%, 6/5/98 ....... 35,000,000 34,652,431
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
John Deere Capital Corp., 5.52%, 4/22/98 ............ $ 42,984,000 $ 42,845,592
Novartis Finance Corp., 5.46%, 4/13/98 .............. 16,000,000 15,970,880
Novartis Finance Corp., 5.51%, 4/30/98 .............. 12,000,000 11,946,737
Novartis Finance Corp., 5.54%, 5/15/98 .............. 16,100,000 15,990,985
St. Michael Finance PLC, 5.45%, 4/28/98 ............. 24,179,000(c) 24,080,168
St. Michael Finance PLC, 5.44%, 5/5/98 .............. 15,000,000(c) 14,922,933
Teco Finance Inc., 5.45%, 4/6/98 .................... 10,000,000(d) 9,992,431
Teco Finance Inc., 5.45%, 4/23/98 ................... 10,700,000(d) 10,664,363
Toyota Motor Credit Corp., 5.70%, 4/8/98 ............ 25,000,000 24,972,292
--------------
373,846,271
--------------
CONSUMER NON-DURABLES (0.9%):
Clorox Co., 5.49%, 6/24/98 .......................... 10,000,000 9,871,900
Toys "R" Us Inc., 5.53%, 4/13/98 .................... 12,300,000 12,277,327
--------------
22,149,227
--------------
DIVERSIFIED CHEMICALS (4.7%):
Akzo Nobel Inc., 5.71%, 4/14/98 ..................... 5,000,000 4,989,689
Akzo Nobel Inc., 5.46%, 7/28/98 ..................... 12,150,000 11,932,556
Bayer Corp., 5.50%, 4/7/98 .......................... 5,200,000 5,195,233
Bayer Corp., 5.50%, 4/7/98 .......................... 30,000,000 29,972,500
BOC Group Inc. (DE), 5.50%, 4/3/98 .................. 15,000,000(d) 14,995,417
BOC Group Inc. (DE), 5.55%, 4/6/98 .................. 5,764,000(d) 5,759,557
Dupont (E.I.) de Nemours & Co., 5.50%, 4/2/98 ....... 25,000,000(d) 24,996,181
Dupont (E.I.) de Nemours & Co., 5.50%, 5/4/98 ....... 5,500,000(d) 5,472,271
Dupont (E.I.) de Nemours & Co., 5.50%, 5/12/98 ...... 4,867,000(d) 4,836,514
Dupont (E.I.) de Nemours & Co., 5.57%, 6/26/98 ...... 1,809,000(d) 1,784,929
Hoechst Corp., 6.12%, 4/1/98 ........................ 8,981,000(d) 8,981,000
--------------
118,915,847
--------------
DIVERSIFIED TECHNOLOGY (1.3%):
EDS Finance PLC, 5.51%, 5/22/98 ..................... 12,470,000(c)(d) 12,372,661
EDS Finance PLC, 5.66%, 6/5/98 ...................... 8,300,000(c)(d) 8,215,179
IBM Credit Corp., 5.52%, 4/20/98 .................... 11,694,000 11,659,931
--------------
32,247,771
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
ELECTRIC UTILITIES (2.1%):
National Cooperative Services Corp., 5.52%,
5/8/98 ............................................ $ 4,155,000(d) $ 4,131,428
National Rural Utilities Cooperative Finance Corp.,
5.43%, 5/22/98 .................................... 11,220,000 11,133,690
National Rural Utilities Cooperative Finance Corp.,
5.48%, 6/12/98 .................................... 25,000,000 24,726,000
Wisconsin Electric Power Co., 5.47%, 4/9/98 ......... 14,073,000 14,055,893
--------------
54,047,011
--------------
ELECTRIC AND GAS UTILITIES (0.4%):
Florida Power & Light Co., 5.57%, 4/20/98 ........... 10,500,000 10,469,133
--------------
ELECTRICAL EQUIPMENT (0.6%):
Siemens Capital Corp., 5.64%, 4/9/98 ................ 10,000,000 9,987,467
Siemens Capital Corp., 5.48%, 6/12/98 ............... 6,000,000 5,934,240
--------------
15,921,707
--------------
FINANCIAL AND REAL ESTATE INSTITUTIONS (5.9%):
Caisse des Depots et Consignations, 5.53%,
4/16/98 ........................................... 30,000,000(c)(d) 29,930,874
Commercial Credit Company, 5.51%, 6/4/98 ............ 20,000,000 19,804,267
Eksportfinans A/S, 5.45%, 8/21/98 ................... 1,920,000(c) 1,878,725
KFW International Finance, 5.55%, 4/17/98 ........... 24,000,000 23,940,800
Swedish Export Credit Corp., 5.64%, 5/15/98 ......... 16,477,000(c) 16,363,419
Swedish Export Credit Corp., 5.65%, 5/15/98 ......... 5,149,000(c) 5,113,443
U.S. Prime Property Inc., LOC ABN-AMRO Bank N.V.,
5.53%, 4/24/98 .................................... 13,000,000 12,954,070
U.S. Prime Property Inc., LOC Westpac Banking Corp.,
5.52%, 4/24/98 .................................... 6,424,000 6,401,345
U.S. Prime Property Inc., LOC Westpac Banking Corp.,
5.58%, 4/30/98 .................................... 13,990,000 13,927,115
USAA Capital Corp., 5.49%, 6/19/98 .................. 15,000,000 14,819,288
Western Australia Treasury Corp., 5.52%, 6/23/98 .... 3,600,000(c) 3,554,184
--------------
148,687,530
--------------
FOOD AND BEVERAGE PRODUCTS (3.1%):
Coca-Cola Co., 5.44%, 5/5/98 ........................ 43,500,000 43,276,507
Golden Peanut Co., 5.67%, 4/10/98 ................... 5,580,000 5,572,090
Golden Peanut Co., 5.69%, 4/14/98 ................... 10,000,000 9,979,453
Golden Peanut Co., 5.69%, 4/28/98 ................... 4,500,000 4,480,796
Golden Peanut Co., 5.45%, 7/17/98 ................... 1,800,000 1,770,843
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
Heinz (H.J.) Co., 5.62%, 6/22/98 .................... $ 14,029,000 $ 13,849,413
--------------
78,929,102
--------------
FULL LINE INSURANCE (0.4%):
Associates Financial Services Corp of PR., 5.47%,
4/6/98 ............................................ 8,900,000 8,893,238
--------------
INDUSTRIAL CONGLOMERATE (1.0%):
Minnesota Mining & Manufacturing Co., 5.52%,
4/3/98 ............................................ 21,500,000 21,493,407
Minnesota Mining & Manufacturing Co., 5.46%,
4/20/98 ........................................... 3,903,000 3,891,753
--------------
25,385,160
--------------
INDUSTRIAL EQUIPMENT (1.5%):
Dover Corp., 5.55%, 4/6/98 .......................... 13,000,000(d) 12,989,980
Dover Corp., 5.70%, 4/9/98 .......................... 6,730,000(d) 6,721,475
Dover Corp., 5.54%, 4/16/98 ......................... 11,000,000(d) 10,974,608
Dover Corp., 5.54%, 4/20/98 ......................... 7,500,000(d) 7,478,071
--------------
38,164,134
--------------
INSURANCE COMPANIES (1.3%):
Allianz of America Finance Corp., 5.55%, 5/5/98 ..... 6,800,000(d) 6,764,357
Allianz of America Finance Corp., 5.50%, 6/4/98 ..... 11,300,000(d) 11,189,511
Allianz of America Finance Corp., 5.51%, 6/4/98 ..... 5,700,000(d) 5,644,165
Allianz of America Finance Corp., 5.52%, 6/22/98 .... 10,200,000(d) 10,071,752
--------------
33,669,785
--------------
MINING AND MINERAL RELATED (1.7%):
Rio Tinto America Inc., 5.45%, 5/22/98 .............. 25,000,000(d) 24,806,980
Rio Tinto America Inc., 5.52%, 6/25/98 .............. 4,309,000(d) 4,252,839
U.S. Borax Inc., 5.51%, 5/20/98 ..................... 15,000,000(d) 14,887,504
--------------
43,947,323
--------------
MONEY CENTER BANKS (14.1%):
Abbey National North America, 5.42%, 4/7/98 ......... 30,610,000 30,582,348
Bank of New York Co. Inc., 5.51%, 5/11/98 ........... 5,658,000 5,623,360
Bank of New York Co. Inc., 5.55%, 6/2/98 ............ 30,000,000 29,713,250
Bank One Corp., 5.57%, 4/1/98 ....................... 13,290,000(d) 13,290,000
Bayerische Landesbank Girozentrale, 5.51%,
5/27/98 ........................................... 35,000,000(c) 34,700,011
Den Danske Corp. Inc., 5.46%, 4/13/98 ............... 24,700,000 24,655,046
Den Norske Bank, 5.47%, 7/1/98 ...................... 20,000,000(c) 19,723,461
Den Norske Bank, 5.46%, 8/4/98 ...................... 20,000,000(c) 19,620,833
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
Generale Bank Inc., 5.40%, 7/30/98 .................. $ 11,000,000(c) $ 10,802,000
Generale Bank Inc., 5.50%, 4/24/98 .................. 16,000,000(c) 15,943,778
Lloyds Bank PLC, 5.67%, 6/8/98 ...................... 28,500,000(c) 28,194,765
National Australia Funding (DE) Inc., 5.42%,
4/17/98 ........................................... 25,000,000 24,939,778
National Australia Funding (DE) Inc., 5.65%,
6/5/98 ............................................ 10,000,000 9,897,986
National Bank of Canada, 5.57%, 7/24/98 ............. 30,000,000(c) 29,470,850
Societe Generale N.A. Inc., 5.64%, 5/22/98 .......... 4,552,000(c) 4,515,630
Svenska Handelsbanken Inc., 5.53%, 4/6/98 ........... 17,800,000 17,786,329
Svenska Handelsbanken Inc., 5.51%, 5/18/98 .......... 17,132,000 17,008,759
Toronto-Dominion Holdings USA Inc., 5.62%, 6/2/98 ... 23,000,000 22,777,386
--------------
359,245,570
--------------
OFFICE AND INDUSTRIAL SERVICES (1.0%):
First Data Corp., 5.45%, 5/27/98 .................... 17,625,000 17,475,579
First Data Corp., 5.68%, 6/2/98 ..................... 8,000,000 7,921,742
--------------
25,397,321
--------------
OIL INTEGRATED INTERNATIONAL (4.8%):
American Petrofina Holding Company, 5.57%, 4/8/98 ... 8,375,000(d) 8,365,929
American Petrofina Holding Company, 5.57%,
4/15/98 ........................................... 9,000,000(d) 8,980,505
American Petrofina Holding Company, 5.57%,
4/16/98 ........................................... 8,980,000(d) 8,959,159
Arco British Ltd., 5.53%, 4/27/98 ................... 15,000,000(c)(d) 14,940,092
Arco Coal Australia Inc., 5.52%, 4/28/98 ............ 9,572,000(d) 9,532,372
Arco Coal Australia Inc., 5.54%, 4/29/98 ............ 15,000,000(d) 14,935,367
Arco Coal Australia, Inc., 5.55%, 4/29/98 ........... 7,462,000(d) 7,429,789
Petrofina (DE) Inc., 5.56%, 4/22/98 ................. 9,389,000 9,358,548
Repsol International Finance B.V., 5.47%, 5/1/98 .... 38,500,000(c) 38,324,504
--------------
120,826,265
--------------
PHARMACEUTICALS (2.1%):
Abbott Laboratories, 5.53%, 4/2/98 .................. 7,300,000 7,298,879
Merck & Co. Inc., 5.53%, 4/21/98 .................... 5,000,000 4,984,639
Pfizer Inc., 5.50%, 5/7/98 .......................... 27,000,000(d) 26,851,500
Pfizer Inc., 5.50%, 4/23/98 ......................... 15,000,000(d) 14,949,583
--------------
54,084,601
--------------
REGIONAL BANKS (2.4%):
First Chicago Financial Corp., 5.46%, 6/8/98 ........ 13,269,000 13,132,153
Norwest Corp., 5.51%, 5/21/98 ....................... 48,350,000 47,979,988
--------------
61,112,141
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
SECURITIES BROKER (6.9%):
Goldman Sachs Group L.P., 5.58%, 4/1/98 ............. $ 20,000,000 $ 20,000,000
Goldman Sachs Group L.P., 5.65%, 5/8/98 ............. 10,000,000 9,941,931
Goldman Sachs Group L.P., 5.65%, 6/12/98 ............ 30,000,000 29,661,000
Merrill Lynch & Co. Inc., 5.60%, 4/6/98 ............. 10,000,000 9,992,222
Merrill Lynch & Co. Inc., 5.69%, 4/29/98 ............ 15,000,000 14,933,617
Merrill Lynch & Co. Inc., 5.38%, 8/3/98 ............. 15,000,000 14,722,033
Morgan Stanley, Dean Witter & Discover, 5.48%,
4/17/98 ........................................... 10,000,000 9,975,644
Morgan Stanley, Dean Witter & Discover, 5.38%,
7/28/98 ........................................... 31,000,000 30,453,332
Salomon Smith Barney, 5.54%, 4/24/98 ................ 36,900,000 36,769,395
--------------
176,449,174
--------------
SEMICONDUCTORS/ELECTRONICS (0.2%):
Motorola Credit Corp., 5.51%, 4/7/98 ................ 4,237,000 4,233,109
--------------
STAPLE CONGLOMERATES (1.6%):
Diageo PLC, 5.46%, 8/26/98 .......................... 11,500,000(c) 11,243,608
Grand Metropolitan Capital Corp., 5.68%, 4/8/98 ..... 8,384,000 8,374,740
Grand Metropolitan Capital Corp., 5.55%, 4/15/98 .... 15,000,000 14,967,625
Grand Metropolitan Capital Corp., 5.65%, 4/15/98 .... 6,211,000 6,197,353
--------------
40,783,326
--------------
TELECOMMUNICATIONS (1.4%):
Ameritech Corp., 5.40%, 6/9/98 ...................... 15,000,000 14,844,749
AT&T Corp., 5.57%, 7/9/98 ........................... 15,000,000 14,770,238
Bell South Telecommunications Inc., 5.53%,
4/28/98 ........................................... 5,000,000 4,979,263
--------------
34,594,250
--------------
TIRES/AUTO PARTS (0.8%):
Denso International, 5.65%, 4/15/98 ................. 20,400,000 20,355,176
--------------
Total Commercial Paper
(cost: $2,025,782,607) ......................... 2,025,782,607
--------------
DEPOSIT NOTES (0.4%):
Westpac Capital Corp., 5.91%, 11/19/98
(cost: $10,000,304) ............................... 10,000,000 10,000,304
--------------
Total Investments in Securities
(cost: $2,534,279,254) (e) ..................... $2,534,279,254
--------------
--------------
</TABLE>
- ---------------------------------------------------------------------
1998 Semiannual Report 30 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
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, 1998. 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 ARE DENOMINATED IN U.S. DOLLARS. THE
AGGREGATE VALUE OF THESE SECURITIES AT MARCH 31, 1998, IS $703,168,753,
WHICH REPRESENTS 27.7% 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 ONLY TO DEALERS IN THAT PROGRAM OR
OTHER QUALIFIED INSTITUTIONAL BUYERS. SUBJECT TO THE OVERSIGHT OF THE BOARD
OF DIRECTORS, THESE SECURITIES ARE TREATED AS LIQUID AFTER HAVING BEEN
DETERMINED TO BE LIQUID BY THE ADVISOR. THE AGGREGATE VALUE OF THESE
SECURITIES AT MARCH 31, 1998, IS $551,516,814, WHICH REPRESENTS 21.7% OF
NET ASSETS.
(e) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
- ---------------------------------------------------------------------
1998 Semiannual Report 31 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND March 31, 1998
............................................................................................
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 (82.1%):
FEDERAL FARM CREDIT BANK DISCOUNT NOTES (2.4%):
5.43%, 4/13/98 ...................................... $ 7,500,000 $ 7,486,425
-------------
FEDERAL FARM CREDIT BANK FLOATING RATE NOTES (b) (1.6%):
5.51%, 11/2/98 ...................................... 5,000,000 4,997,149
-------------
FEDERAL FARM CREDIT BANK MEDIUM TERM NOTES (2.9%):
5.70%, 12/1/98 ...................................... 3,690,000 3,687,632
5.80%, 8/21/98 ...................................... 5,000,000 5,000,000
-------------
8,687,632
-------------
FEDERAL HOME LOAN BANK COUPON NOTES (6.6%):
5.80%, 6/12/98 ...................................... 2,475,000 2,474,716
5.72%, 7/21/98 ...................................... 5,200,000 5,199,462
5.78%, 10/30/98 ..................................... 1,745,000 1,744,787
5.69%, 9/24/98 ...................................... 1,670,000 1,669,339
5.63%, 3/2/99 ....................................... 4,025,000 4,025,000
5.50%, 3/26/99 ...................................... 5,000,000 4,992,722
-------------
20,106,026
-------------
FEDERAL HOME LOAN BANK DISCOUNT NOTES (2.5%):
5.47%, 4/13/98 ...................................... 5,590,000 5,579,808
5.59%, 5/19/98 ...................................... 2,080,000 2,064,497
-------------
7,644,305
-------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES (b) (1.3%):
5.54%, 2/26/99 ...................................... 4,000,000 3,998,223
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION COUPON NOTES (2.3%):
5.89%, 5/29/98 ...................................... 7,000,000 6,998,870
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION DISCOUNT NOTES (26.7%):
5.38%, 4/10/98 ...................................... 8,157,000 8,146,029
5.45%, 4/13/98 ...................................... 5,000,000 4,990,917
5.47%, 4/17/98 ...................................... 5,900,000 5,885,656
5.46%, 4/23/98 ...................................... 6,000,000 5,979,980
5.46%, 4/24/98 ...................................... 5,000,000 4,982,558
5.37%, 4/30/98 ...................................... 5,000,000 4,978,371
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
5.38%, 4/30/98 ...................................... $ 5,500,000 $ 5,476,164
5.46%, 4/30/98 ...................................... 5,000,000 4,978,008
5.47%, 5/7/98 ....................................... 5,000,000 4,972,650
5.44%, 5/8/98 ....................................... 15,000,000 14,916,133
5.46%, 5/8/98 ....................................... 5,000,000 4,971,942
5.50%, 5/8/98 ....................................... 4,377,000 4,352,258
5.50%, 5/11/98 ...................................... 3,682,000 3,659,499
5.34%, 5/29/98 ...................................... 3,000,000 2,974,190
-------------
81,264,355
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES (15.6%):
5.43%, 5/4/98 ....................................... 10,000,000 9,950,225
5.60%, 4/13/98 ...................................... 5,000,000 4,990,667
5.55%, 4/24/98 ...................................... 5,000,000 4,982,271
5.51%, 4/30/98 ...................................... 5,000,000 4,977,807
5.37%, 5/6/98 ....................................... 10,777,000 10,720,735
5.40%, 6/12/98 ...................................... 10,000,000 9,892,000
5.55%, 6/12/98 ...................................... 2,000,000 1,977,800
-------------
47,491,505
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION FLOATING RATE NOTES (b) (3.9%):
5.53%, 4/1/99 ....................................... 5,000,000 4,988,030
5.28%, 6/2/99 ....................................... 3,000,000 2,991,842
5.27%, 5/11/98 ...................................... 4,000,000 3,999,705
-------------
11,979,577
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION MEDIUM TERM NOTES (6.1%):
5.71%, 9/9/98 ....................................... 4,000,000 4,000,681
6.08%, 5/6/98 ....................................... 5,715,000 5,715,069
5.89%, 5/21/98 ...................................... 1,500,000 1,500,286
5.35%, 1/20/99 ...................................... 3,990,000 3,985,376
5.33%, 2/12/99 ...................................... 3,300,000 3,295,328
-------------
18,496,740
-------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE NOTES (b) (3.3%):
5.38%, 8/20/98 ...................................... 6,000,000 5,996,871
5.60%, 10/6/98 ...................................... 4,000,000 3,998,702
-------------
9,995,573
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual Report 33 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>
STUDENT LOAN MARKETING ASSOCIATION MEDIUM TERM NOTES (3.6%):
5.74%, 11/16/98 ..................................... $ 5,000,000 $ 4,999,968
5.74%, 12/17/98 ..................................... 6,000,000 5,995,470
-------------
10,995,438
-------------
U.S. TREASURY NOTES (3.3%):
5.13%, 11/30/98 ..................................... 7,000,000 6,976,665
5.50%, 2/28/99 ...................................... 3,000,000 3,000,635
-------------
9,977,300
-------------
Total U.S. Government and Agency Securities
(cost: $250,119,118) ........................... 250,119,118
-------------
U.S. GOVERNMENT AGENCY-BACKED SECURITIES (4.9%):
Downey Savings & Loan Association, LOC Federal Home
Loan Bank of San Francisco, 5.64%, 5/18/98 ........ 3,000,000 2,977,910
USA Group Secondary Market Services Inc., LOC Student
Loan Marketing Association, 5.49%, 4/6/98 ......... 12,000,000 11,990,850
-------------
Total U.S. Government Agency-Backed Securities
(cost: $14,968,760) ............................ 14,968,760
-------------
REPURCHASE AGREEMENTS (12.7%):
Repurchase agreement with ABN/AMRO, acquired on
3/26/98, interest of $3,568, 5.63%, 4/2/98 ........ 3,259,000(c) 3,259,000
Repurchase agreement with ABN/AMRO, acquired on
3/31/98, interest of $914, 6.05%, 4/1/98 .......... 5,436,000(c) 5,436,000
Repurchase agreement with Goldman Sachs, acquired on
3/5/98, interest of $43,089, 5.54%, 4/2/98 ........ 10,000,000(d) 10,000,000
Repurchase agreement with Morgan Stanley, acquired on
1/7/98, interest of $69,125, 5.53%, 4/7/98 ........ 5,000,000(d) 5,000,000
Repurchase agreement with Morgan Stanley, acquired on
1/8/98, interest of $37,495, 5.52%, 4/8/98 ........ 2,717,000(d)(e) 2,717,000
Repurchase agreement with Morgan Stanley, acquired on
1/9/98, interest of $68,875, 5.51%, 4/9/98 ........ 5,000,000(d)(e) 5,000,000
Repurchase agreement with Morgan Stanley, acquired on
2/12/98, interest of $30,667, 5.52%, 4/3/98 ....... 4,000,000(d) 4,000,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual Report 34 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>
Repurchase agreement with Morgan Stanley, acquired on
3/27/98, interest of $3,502, 5.63%, 4/3/98 ........ $ 3,199,000(d) $ 3,199,000
-------------
Total Repurchase Agreements
(cost: $38,611,000) ............................ 38,611,000
-------------
Total Investments in Securities
(cost: $303,698,878) (f) ....................... $ 303,698,878
-------------
-------------
</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, 1998. 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 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 THESE SECURITIES AT MARCH 31,
1998, IS $7,717,000, WHICH REPRESENTS 2.5% OF NET ASSETS.
(f) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
- ---------------------------------------------------------------------
1998 Semiannual Report 35 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY MARKET FUND March 31, 1998
.........................................................................................
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%):
EDUCATION REVENUE (6.6%):
Illinois Development and Finance Authority, VRDN,
3.70%, 8/1/26 ..................................... $ 4,000,000(c) $ 4,000,000
Minnesota State Higher Education Facilities
Authority, VRDN, 3.65%, 3/1/24 .................... 3,430,000(c) 3,430,000
Orange County, FL, School District Tax Anticipation
Notes, 4.25%, 9/15/98 ............................. 2,700,000 2,708,024
Santa Cruz County, CA, Office of Education TRANS,
4.50%, 7/30/98 .................................... 5,000,000 5,010,298
------------
15,148,322
------------
ELECTRIC REVENUE (0.9%):
York County, SC, Pollution Control Revenue, 3.45%,
8/15/98 ........................................... 2,000,000 2,000,000
------------
GENERAL OBLIGATIONS (22.3%):
California State, 4.50%, 6/30/98 .................... 6,000,000 6,010,398
Chicago, IL, Equipment Notes, 3.80%, 12/3/98 ........ 4,000,000 4,000,000
Cook Kane Lake & McHenry Counties, IL, Community
College District 512, 4.50%, 12/1/98 .............. 755,000 759,667
Dallas Denton & Collin Counties, TX, 4.45%,
2/15/99 ........................................... 6,225,000 6,272,453
District of Columbia Refunding, Series B, 6.63%,
6/1/98 ............................................ 1,000,000 1,004,328
Litchfield, MN, Independent School District No. 465,
Tax Anticipation Certificates, 3.68%, 3/31/99 ..... 970,000 971,211
Mankato, MN, VRDN, 3.50%, 2/1/18 .................... 300,000(c) 300,000
Michigan State General Obligation Notes, 4.50%,
9/30/98 ........................................... 5,000,000 5,018,115
Milwaukee, WI, Revenue Anticipation Notes, Series A,
5.00%, 2/25/99 .................................... 3,000,000 3,038,304
New York City, NY, Series B, VRDN, 3.80%, 10/1/20 ... 2,600,000(c) 2,600,000
New York City, NY, Series B, VRDN, 3.80%, 10/1/22 ... 700,000(c) 700,000
New York City, NY, Subseries A-10, VRDN, 3.70%,
8/1/17 ............................................ 800,000(c) 800,000
New York City, NY, Subseries B-2, VRDN, 3.80%,
8/15/19 ........................................... 1,500,000(c) 1,500,000
New York City, NY, Subseries B-3, VRDN, 3.80%,
8/15/18 ........................................... 600,000(c) 600,000
New York City, NY, Subseries B-4, VRDN, 3.80%,
8/15/22 ........................................... 4,400,000(c) 4,400,000
New York City, NY, Subseries B-4, VRDN, 3.80%,
8/15/21 ........................................... 1,400,000(c) 1,400,000
Olathe, KS, Temporary Notes, Series A, 4.50%,
6/1/98 ............................................ 2,000,000 2,002,268
Richfield, MN, ISD, VRDN, 3.85%, 2/1/10 ............. 1,200,000(c)(d) 1,200,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual 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>
Utah State Highway, 3.20%, 5/4/98 ................... $ 8,000,000 $ 8,000,000
------------
50,576,744
------------
HEALTH SERVICE/HMO'S (2.4%):
Colorado Health Facilities Authority, Boulder
Hospital, VRDN, 3.70%, 10/1/14 .................... 5,350,000(c) 5,350,000
------------
HEALTH/HOSPITAL/NURSING HOME (14.8%):
Alaska Industrial Development Authority, VRDN, 3.40%,
6/1/10 ............................................ 3,540,000(c) 3,540,000
Illinois Health Facilities Authority, Franciscan
Eldercare, VRDN, 3.75%, 5/15/17 ................... 1,150,000(c) 1,150,000
Illinois Health Facilities Authority, VRDN, 3.70%,
1/1/16 ............................................ 950,000(c) 950,000
Illinois Health Facilities Authority, VRDN, 3.70%,
1/1/16 ............................................ 6,200,000(c) 6,200,000
Indiana Health Facilities Authority, VRDN, 3.70%,
12/1/10 ........................................... 770,000(c) 770,000
Indiana Hospital Equipment Finance Authority, VRDN,
3.70%, 12/1/15 .................................... 5,100,000(c) 5,100,000
Wisconsin Health and Education Facilities Authority,
VRDN, 3.80%, 6/1/19 ............................... 7,815,000(c) 7,815,000
Wisconsin Health and Education Facilities Authority,
VRDN, 3.70%, 8/15/16 .............................. 625,000(c) 625,000
Wisconsin State Health Facilities, VRDN, 3.65%,
1/1/16 ............................................ 7,320,000(c) 7,320,000
------------
33,470,000
------------
HOSPITAL REVENUE (3.8%):
Grand Forks, ND, Health Care, United Hospital, VRDN,
3.80%, 12/1/16 .................................... 2,050,000(c) 2,050,000
Grand Forks, ND, Health Care, United Hospital, VRDN,
3.80%, 12/1/25 .................................... 1,350,000(c) 1,350,000
Illinois Development and Finance Authority, VRDN,
3.70%, 3/1/15 ..................................... 200,000(c) 200,000
Minnesota Agriculture and Economic Development Board,
VRDN, 3.50%, 9/1/20 ............................... 2,000,000(c) 2,000,000
Mississippi Hospital Equipment & Facilities
Authority, VRDN, 3.65%, 7/1/12 .................... 600,000(c) 600,000
Wisconsin State Health & Education Facilities
Authority, VRDN, 3.75%, 4/1/27 .................... 2,300,000(c) 2,300,000
------------
8,500,000
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual Report 37 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 (8.1%):
Iowa HFA, 3.85%, 5/1/98 ............................. $ 3,735,000 $ 3,735,000
Iowa HFA, VRDN, 4.25%, 1/1/15 ....................... 1,330,000(c) 1,330,000
Minnesota State Housing Finance Agency, Series G,
4.15%, 12/1/98 .................................... 2,000,000 2,003,200
New Hampshire State HFA, AMT, VRDN, 3.75%, 5/1/25 ... 6,200,000(c)(d) 6,200,000
Virginia State Housing Authority, 3.80%, 6/10/98 .... 5,000,000 5,000,000
------------
18,268,200
------------
IDR - POLLUTION CONTROL (2.7%):
Clark County, KY, 3.70%, 4/15/98 .................... 2,090,000 2,090,000
Putnam County, FL, Pollution Control, 3.65%,
6/15/98 ........................................... 4,000,000 4,000,000
------------
6,090,000
------------
IDR - SOLID WASTE DISPOSAL (3.5%):
Delaware State Economic Development Authority, Series
C, AMT, VRDN, 3.80%, 8/1/29 ....................... 8,000,000(c)(d) 8,000,000
------------
INDUSTRIAL DEVELOPMENT REVENUE (7.6%):
Evansville, IN, VRDN, 3.80%, 9/1/04 ................. 2,500,000(c) 2,500,000
Henderson, NV, Public Improvement, AMT, VRDN, 4.05%,
4/1/07 ............................................ 1,300,000(c)(d) 1,300,000
Illinois Development and Finance Authority, AMT,
VRDN, 3.85%, 10/1/06 .............................. 745,000(c)(d) 745,000
Illinois Development and Finance Authority, AMT,
VRDN, 4.00%, 4/1/15 ............................... 2,125,000(c)(d) 2,125,000
Minneapolis Commercial Development Revenue,
International, VRDN, 3.70%, 9/1/13 ................ 1,100,000(c) 1,100,000
Tremonton, UT, AMT, VRDN, 4.05%, 6/1/00 ............. 1,800,000(c)(d) 1,800,000
Warren County, OH, VRDN, 3.95%, 9/1/15 .............. 7,650,000(c) 7,650,000
------------
17,220,000
------------
LEASING REVENUE (3.9%):
Pendleton County, KY, Multi-County Lease Revenue,
3.80%, 4/6/98 ..................................... 6,500,000 6,500,000
Pendleton County, KY, Multi-County Lease Revenue,
3.50%, 6/9/98 ..................................... 2,390,000 2,390,000
------------
8,890,000
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1998 Semiannual Report 38 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>
OTHER REVENUE (8.2%):
Texas State TRANS, Series A, 4.75%, 8/31/98 ......... $ 7,000,000 $ 7,026,551
Wisconsin State Operating Notes, 4.50%, 6/15/98 ..... 3,000,000 3,003,885
Wyoming State General Fund TRANS, 4.50%, 6/26/98 .... 3,500,000 3,505,547
Wyoming State General Fund TRANS, 4.25%, 6/26/98 .... 5,000,000 5,005,086
------------
18,541,069
------------
SALES TAX REVENUE (3.2%):
Bloomington, MN, Port Authority, VRDN, 3.70%,
2/1/09 ............................................ 900,000(c) 900,000
Bloomington, MN, Port Authority, VRDN, 3.70%,
2/1/09 ............................................ 1,700,000(c) 1,700,000
Bloomington, MN, Port Authority, VRDN, 3.70%,
2/1/13 ............................................ 4,600,000(c) 4,600,000
------------
7,200,000
------------
WATER/POLLUTION CONTROL REVENUE (11.3%):
Allegheny County, PA, 3.25%, 5/12/98 ................ 3,900,000 3,900,000
Converse County, WY, 3.15%, 5/11/98 ................. 2,400,000 2,400,000
East Baton Rouge Parish, LA, VRDN, 3.70%, 10/1/99 ... 1,000,000(c) 1,000,000
Gillette, WY, 3.15%, 5/12/98 ........................ 2,000,000 2,000,000
Illinois Development and Finance Authority, VRDN,
3.65%, 11/1/28 .................................... 3,900,000(c) 3,900,000
New York City, NY, Municipal Water Authority, VRDN,
4.00%, 6/15/25 .................................... 6,310,000(c) 6,310,000
New York City, NY, Water Finance Authority Series 5A,
3.45%, 5/8/98 ..................................... 3,000,000 3,000,000
Texas State Water Development Board, 5.00%,
8/1/98 ............................................ 1,000,000 1,004,952
York County, SC, Pollution Control Revenue, 3.50%,
9/15/98 ........................................... 2,000,000 2,000,000
------------
25,514,952
------------
Total Tax-Exempt Securities
(cost: $224,769,287) ........................... 224,769,287
------------
Total Investments in Securities
(cost: $224,769,287) (e) ....................... $224,769,287
------------
------------
</TABLE>
- ---------------------------------------------------------------------
1998 Semiannual Report 39 Cash Management Funds
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
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:
AMT - ALTERNATIVE MINIMUM TAX. AS OF MARCH 31, 1998, THE AGGREGATE
MARKET VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS
$20,170,000, WHICH REPRESENTS 8.9% OF NET ASSETS.
HFA - HOUSING FINANCE AUTHORITY
ISD - INDEPENDENT SCHOOL DISTRICT
TRANS - TAX AND REVENUE ANTICIPATION NOTE
VRDN - VARIABLE RATE DEMAND NOTE
(c) INTEREST RATE VARIES TO REFLECT CURRENT MARKET CONDITIONS; RATE SHOWN IS
THE EFFECTIVE RATE ON MARCH 31, 1998. THE MATURITY DATE REPRESENTS FINAL
MATURITY. HOWEVER, FOR PURPOSES OF RULE 2a-7, MATURITY DATE IS THE NEXT
INTEREST RATE RESET DATE.
(d) SECURITIES SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT FROM
REGISTRATION UNDER 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 QUALIFIED INSTITUTIONAL BUYERS. SUBJECT TO THE OVERSIGHT OF THE BOARD
OF DIRECTORS, THESE SECURITIES ARE TREATED AS LIQUID AFTER HAVING BEEN
DETERMINED TO BE LIQUID BY THE ADVISOR. THE AGGREGATE VALUE OF THESE
SECURITIES AT MARCH 31, 1998, IS $21,370,000, WHICH REPRESENTS 9.4% OF NET
ASSETS.
(e) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
- ---------------------------------------------------------------------
1998 Semiannual Report 40 Cash Management Funds
<PAGE>
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- --------------------------------------------------------------------------------
1998 Semiannual Report 41 Cash Management Funds
<PAGE>
THIS PAGE WAS INTENTIONALLY LEFT BLANK.
- --------------------------------------------------------------------------------
1998 Semiannual Report 42 Cash Management Funds
<PAGE>
THIS PAGE WAS INTENTIONALLY LEFT BLANK.
- --------------------------------------------------------------------------------
1998 Semiannual Report 43 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 long- and short-term
maturities 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.
BENCHMARK: MONEY MARKET FUND
IBC's MONEY FUND REPORT AVERAGES-TM--First Tier, as reported by IBC's
MONEY FUND REPORT-TM-, which is an average of money market funds investing
exclusively in first tier securities (securities in the highest rating category
for short-term debt obligations).
BENCHMARK: U.S. GOVERNMENT MONEY MARKET
IBC's MONEY FUND REPORT AVERAGES-TM--U.S. Government & Agencies, as reported by
IBC's MONEY FUND REPORT-TM-, which is an average of money market funds investing
in U.S. Treasury securities, government agency obligations, and repurchase
agreements backed by U.S. Treasury and agency securities.
BENCHMARK: TAX-EXEMPT MONEY MARKET FUND
IBC's MONEY FUND REPORT AVERAGES-TM--All Tax-Free, as reported by IBC's
MONEY FUND REPORT-TM-, which is an average of tax-free money funds that are
tax-free at the Federal level for the majority of investors.
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.
WINDOW DRESSING
Trading activity near the end of a quarter or fiscal year that is designed to
make a portfolio appear more favorable. For example, a corporation may sell
losing positions in a portfolio so only positions that have gained in value will
be displayed.
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
- --------------------------------------------------------------------------------
1998 Semiannual Report 44 Cash Management Funds
<PAGE>
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, Retired 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 DOW, President
ROBERT H. NELSON, Vice President and Treasurer
SUSAN SHARP MILEY, Secretary
INVESTMENT ADVISOR
- --------------------------------------------------------------------------------
PIPER CAPITAL MANAGEMENT INCORPORATED
222 South Ninth Street, Minneapolis, MN 55402-3804
TRANSFER AND DIVIDEND DISBURSING AGENTS
- --------------------------------------------------------------------------------
INVESTORS FIDUCIARY TRUST COMPANY
1004 Baltimore, Kansas City, MO 64105-1614
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
801 Pennsylvania, Kansas City, MO 64105-1307
LEGAL COUNSEL
- --------------------------------------------------------------------------------
DORSEY & WHITNEY LLP
220 South Sixth Street, Minneapolis, MN 55402
FOR MORE INFORMATION
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press 5, ask a service representative to mail you additional literature,
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In an effort to reduce costs to our shareholders, we have implemented a process
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<PAGE>
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SEI INVESTMENTS DISTRIBUTION CO., FUND DISTRIBUTOR AND NASD MEMBER.
- ---------------------------------------------------------------------------
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