[ FRONT COVER ]
[ WOODWARD FUNDS LOGO ART AND LOGOTYPE ]
-----------------
Semi-Annual Report
June 30, 1996
-----------------
Woodward Money Market Fund
Woodward Government Fund
Woodward Treasury Money Market Fund
Woodward Tax-Exempt Money Market Fund
Woodward Michigan Tax-Exempt Money Market Fund
Investment Adviser
[ NBD BANK LOGOTYPE ]
24 Hour yield information:
Purchase and Redemption orders:
(800) 688-3350
<PAGE>
Dear Shareholder:
As you know, the Woodward Funds have embarked on some exciting
changes over the last several months. Following the proxy solicitation, we are
pleased to report that the reorganization of the Woodward Funds has been
approved by shareholders. The reorganization is expected to be completed on or
around September 23,1996.
What does this mean to you?
First Chicago NBD Investment Management Company, the adviser to
the Prairie Funds, has joined forces with NBD Bank, the adviser to the
Woodward Mutual Fund Family, to create a powerful new fund group, soon to be
renamed the Pegasus Funds. As a shareholder, this means that the resources of
a stronger organization will be working for you.
o Strength in management -- With more than $12 billion in total assets, the
Pegasus Funds will be one of the largest bank-managed mutual fund
families in the country.
o Depth of experience -- Continuing a century-old tradition of asset
management for individuals and institutions, the Pegasus Funds' adviser
is comprised of more than 70 investment professionals who are dedicated
to the Funds' management.
o Breadth of investment choices -- Shareholders can select from a complete
array of 25 mutual funds to meet virtually any investment objective.
Pegasus Funds bring you "Strength in Investing"
In addition to offering you a wide range of investment
opportunities, we pride ourselves on delivering superior service and
convenience. We have added features such as systematic withdrawals and
cross-reinvestment of dividends -- allowing you to invest dividends from one
Pegasus Fund in another -- so that you can have more options for your
investment dollars.
Thank you for your patience throughout this transition. If you
have any questions, please speak with your Investment Professional or call
Shareholder Services toll-free at 1-800-688-3350.
Sincerely,
/s/ Marco Hanig
Marco Hanig
Managing Director
First Chicago NBD Investment Management Company
August 30, 1996
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD FUNDS
MONEY MARKET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
MONEY MARKET
FUND
------------
<S> <C>
ASSETS:
Investment in securities:
At cost .................................... $1,772,609,649
==============
At amortized cost (Note 2) ................. $1,777,778,166
Cash ............................................ 673
Interest receivable ............................. 11,065,470
Deferred organization costs, net (Note 2) ....... --
Prepaids and other .............................. 56,399
--------------
TOTAL ASSETS .......................... 1,788,900,708
--------------
LIABILITIES:
Payable for securities purchased ................ --
Accrued investment advisory fee ................. 667,725
Accrued distribution fees ....................... 16,674
Accrued custodial fee ........................... 4,419
Dividends payable ............................... 736,554
Accounts payable and accrued expenses ........... 48,836
--------------
TOTAL LIABILITIES ..................... 1,474,208
--------------
NET ASSETS ............................ $1,787,426,500
==============
Net assets consist of:
Capital shares (unlimited number of
shares authorized, par value
$.10 per share) ............................... $ 178,742,650
Additional paid-in capital ...................... 1,608,683,850
--------------
TOTAL NET ASSETS ...................... $1,787,426,500
==============
Net asset value and redemption price per share .. $ 1.00
==============
<FN>
See accompanying notes to financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD FUNDS
MONEY MARKET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
MICHIGAN
TREASURY TAX-EXEMPT TAX-EXEMPT
GOVERNMENT MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in securities:
At cost ................................. $ 452,125,686 $1,903,960,229 $ 659,705,849 $ 125,805,756
============== ============== ============== ==============
At amortized cost (Note 2) .............. $ 452,342,691 $1,903,422,954 $ 658,657,350 $ 125,498,009
Cash ......................................... 714 797 337,134 75,114
Interest receivable .......................... 4,500,168 9,005,620 5,632,355 1,109,283
Deferred organization costs, net (Note 2) .... -- 4,547 -- --
Prepaids and other ........................... 948 1,808 1,173 82,919
-------------- -------------- -------------- --------------
TOTAL ASSETS ....................... 456,844,521 1,912,435,726 664,628,012 126,765,325
-------------- -------------- -------------- --------------
LIABILITIES:
Payable for securities purchased ............. -- -- 29,645,400 --
Accrued investment advisory fee .............. 177,915 517,713 234,452 53,331
Accrued distribution fees .................... 3,076 8,611 3,935 1,278
Accrued custodial fee ........................ 762 1,321 2,160 575
Dividends payable ............................ 183,792 771,922 157,668 28,891
Accounts payable and accrued expenses ........ 19,440 24,367 86,988 11,870
-------------- -------------- -------------- --------------
TOTAL LIABILITIES .................. 384,985 1,323,934 30,130,603 95,945
-------------- -------------- -------------- --------------
NET ASSETS ......................... $ 456,459,536 $1,911,111,792 $ 634,497,409 $ 126,669,380
============== ============== ============== ==============
Net assets consist of:
Capital shares (unlimited number of
shares authorized, par value
$.10 per share) ............................ $ 45,645,954 $ 191,111,179 $ 63,449,741 $ 12,666,938
Additional paid-in capital ................... 410,813,582 1,720,000,613 571,047,668 114,002,442
-------------- -------------- -------------- --------------
TOTAL NET ASSETS ................... $ 456,459,536 $1,911,111,792 $ 634,497,409 $ 126,669,380
============== ============== ============== ==============
Net asset value and redemption price per share $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ==============
<FN>
See accompanying notes to financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD FUNDS
MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1996
(Unaudited)
MONEY MARKET
FUND
------------
<S> <C>
INVESTMENT INCOME (Note 2) ..................... $52,683,846
-----------
EXPENSES (Note 2, 3 and 5):
Investment advisory fee ...................... 4,179,855
Distribution fees ............................ 101,577
Professional fees ............................ 15,542
Custodial fee ................................ 22,041
Shareholder servicing agent fees ............. 227,976
Marketing expenses ........................... 24,264
Amortization of deferred organization expenses --
Registration, filing fees and other expenses . 388,044
-----------
TOTAL EXPENSES ........................ 4,959,299
-----------
NET INVESTMENT INCOME .......................... $47,724,547
===========
RATIO OF TOTAL EXPENSES TO TOTAL INVESTMENT
INCOME ....................................... 9.4%
===========
<FN>
See accompanying notes to financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
MICHIGAN
TREASURY TAX-EXEMPT FUND TAX-EXEMPT FUND
GOVERNMENT MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND
---------- ------------ -------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (Note 2) ..................... $13,255,055 $29,356,208 $11,116,055 $ 2,359,814
----------- ----------- ----------- -----------
EXPENSES (Note 2, 3 and 5):
Investment advisory fee ...................... 1,094,699 2,435,093 1,410,446 327,785
Distribution fees ............................ 19,572 39,740 24,207 7,736
Professional fees ............................ 15,543 15,543 15,543 15,543
Custodial fee ................................ 4,677 7,027 16,585 4,669
Shareholder servicing agent fees ............. 31,638 126,432 41,789 75,451
Marketing expenses ........................... 14,007 13,951 14,836 14,082
Amortization of deferred organization expenses -- 1,516 -- --
Registration, filing fees and other expenses . 111,284 352,318 112,143 10,650
----------- ----------- ----------- -----------
TOTAL EXPENSES ........................ 1,291,420 2,991,620 1,635,549 455,916
----------- ----------- ----------- -----------
NET INVESTMENT INCOME .......................... $11,963,635 $26,364,588 $ 9,480,506 $ 1,903,898
=========== =========== =========== ===========
RATIO OF TOTAL EXPENSES TO TOTAL INVESTMENT
INCOME ....................................... 9.7% 10.2% 14.7% 19.3%
=========== =========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD FUNDS
MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
MONEY MARKET FUND GOVERNMENT FUND
---------------------------------- --------------------------------------
Six Months Ended Six Months Ended
June 30, 1996 Year Ended June 30, 1996 Year Ended
(Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995
----------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income .................... $ 47,724,547 $ 89,976,159 $ 11,963,635 $ 24,002,544
Distributions to shareholders
from net investment income ............. (47,724,547) (89,976,159) (11,963,635) (24,002,544)
---------------- ---------------- ---------------- ----------------
Net increase in net assets from operations -- -- -- --
---------------- ---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS
(at $1.00 per share ):
Proceeds from shares sold ................ 8,553,109,246 15,430,620,141 3,796,315,912 7,866,220,550
Net asset value of shares issued
in reinvestment of
distributions to shareholders .......... 11,115,893 20,938,255 3,359,903 5,511,007
---------------- ---------------- ---------------- ----------------
8,564,225,059 15,451,558,396 3,799,675,815 7,871,731,557
Less: payments for shares redeemed ....... (8,416,493,403) (15,134,903,898) (3,817,593,134) (7,818,562,738)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets from
capital share transactions ............. 147,731,686 316,654,498 (17,917,319) 53,168,819
---------------- ---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS ...... 147,731,686 316,654,498 (17,917,319) 53,168,819
NET ASSETS:
Beginning of period ...................... 1,639,694,814 1,323,040,316 474,376,855 421,208,036
---------------- ---------------- ---------------- ----------------
End of period ............................ $ 1,787,426,500 $ 1,639,694,814 $ 456,459,536 $ 474,376,855
================ ================ ================ ================
<FN>
See accompanying notes to financial statements.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD FUNDS
MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
TREASURY TAX-EXEMPT MICHIGAN TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
----------------------------------- --------------------------------- ------------------------------
Six Months Ended Six Months Ended Six Months Ended
June 30, 1996 Year Ended June 30, 1996 Year Ended June 30, 1996 Year Ended
(Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995
------------------ ------------- ----------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income . $ 26,364,588 $ 38,914,036 $ 9,480,506 $ 18,301,140 $ 1,903,898 $ 3,236,772
Distributions to
shareholders from
net investment
income .............. (26,364,588) (38,914,036) (9,480,506) (18,301,140) (1,903,898) (3,236,772)
--------------- --------------- --------------- --------------- ------------- -------------
Net increase in net
assets from
operations .......... -- -- -- -- -- --
--------------- --------------- --------------- --------------- ------------- -------------
FROM CAPITAL SHARE
TRANSACTIONS (at $1.00
per share):
Proceeds from
shares sold ......... 7,190,887,883 6,284,582,300 1,896,067,951 2,777,275,094 203,133,863 293,836,102
Net asset value of
shares issued in
reinvestment of
distributions to
shareholders ........ 1,794,497 5,449,979 1,107,268 2,421,757 1,178,657 2,029,545
--------------- --------------- --------------- --------------- ------------- -------------
7,196,682,380 6,290,032,279 1,897,175,219 2,779,696,851 204,312,520 295,865,647
Less: payments for
shares redeemed ..... (6,209,266,090) (6,148,030,955) (1,827,091,286) (2,766,019,376) (199,700,082) (252,448,579)
--------------- --------------- --------------- --------------- ------------- -------------
Net increase (decrease)
in net assets from
capital share
transactions ........ 983,416,290 142,001,324 70,083,933 13,677,475 4,612,438 43,417,068
--------------- --------------- --------------- --------------- ------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS ......... 983,416,290 142,001,324 70,083,933 13,677,475 4,612,438 43,417,068
NET ASSETS:
Beginning of period ... 927,695,502 785,694,178 564,413,476 550,736,001 122,056,942 78,639,874
--------------- --------------- --------------- --------------- ------------- -------------
End of period ......... $ 1,911,111,792 $ 927,695,502 $ 634,497,409 $ 564,413,476 $ 126,669,380 $ 122,056,942
=============== =============== =============== =============== ============= =============
<FN>
See accompanying notes to financial statements.
</TABLE>
7
<PAGE>
THE WOODWARD FUNDS
WOODWARD MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
AMORTIZED
FACE COST
DESCRIPTION AMOUNT (Note 2)
----------- ------ ---------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS - 10.54%
Allstate Life Insurance Co. Master Note, 5.65%, 7/1/96 .............. $ 5,000,000 $ 5,000,000
American General Finance, Inc. Master Note, 5.60%, 7/1/96 ........... 15,000,000 15,000,000
Commonwealth Life Insurance Co. Master Note, 5.67%, 7/1/96 .......... 5,000,000 5,000,000
Peoples Security Life Insurance Co. Master Note, 5.67%, 7/1/96 ...... 5,000,000 5,000,000
Sun Life Insurance Co. of America Master Note, 5.74%, 7/1/96 ........ 10,000,000 10,000,000
Transamerica Finance Group, Inc. Master Note, 5.60%, 7/1/96 ......... 25,000,000 25,000,000
Lehman Brothers, Inc., Revolving Repurchase Agreement, 5.55%,
7/1/96 (secured by various U.S. Treasury Bills with maturities
ranging from 12/19/96 through 6/26/97, all held at Chemical
Bank) ........................................................... 56,817,000 56,817,000
NationsBank Capital Markets, Inc., Revolving Repurchase
Agreement, 5.50%, 7/1/96 (secured by various U.S. Treasury
Obligations with maturities ranging from 5/15/00 through 5/15/06
at various interest rates ranging from 0.00% to 7.875%, all held
at Chemical Bank) ............................................... 5,078,492 5,078,492
Salomon Brothers, Revolving Repurchase Agreement, 5.53%,
7/1/96 (secured by various U.S. Treasury Strips with maturities
ranging from 2/15/99 through 8/15/00, all held at Chemical Bank) 60,481,000 60,481,000
--------------
187,376,492
--------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 5.56
U.S. Treasury Securities - 3.23%
U.S. Treasury Bill, 5.32%, 3/6/97 ................................... 25,000,000 24,116,500
U.S. Treasury Notes:
7.50%, 1/31/97 .................................................. 10,000,000 10,134,477
6.75%, 2/28/97 .................................................. 10,000,000 10,103,313
6.875%, 2/28/97 ................................................. 13,000,000 13,136,164
--------------
57,490,454
--------------
U.S. Agency Obligations - 2.33%
Federal Farm Credit Bank, 5.60%, 7/1/96 ............................. 13,950,000 13,950,000
Student Loan Marketing Assn., 5.87%, 6/30/96 ........................ 27,500,000 27,518,981
--------------
41,468,981
--------------
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C>
COMMERCIAL PAPER - 34.78%
AESOP Funding Corp.:
5.40%, 7/1/96 ................................................... 8,500,000 8,500,000
5.37%, 7/2/96 ................................................... 10,000,000 9,998,508
Alcatel Alsthom. Inc., 5.19%, 7/5/96 ................................ 22,350,000 22,337,111
Asset Securitization Coop Corp., 5.31%, 7/17/96 ..................... 20,000,000 19,952,889
Banco Mercantile Del North S.A., 5.21%, 8/8/96 ...................... 6,000,000 5,967,193
Banco Nacional De Comerico Exterior:
5.21%, 7/11/96 .................................................. 19,980,000 19,951,140
5.21%, 7/16/96 .................................................. 14,000,000 13,969,667
BCI Funding Corp., 5.32%, 7/10/96 ................................... 16,975,000 16,952,466
Bemis Co. Inc., 5.37%, 7/18/96 ...................................... 20,000,000 19,949,378
Clipper Receivables Corp.:
5.31%, 7/2/96 ................................................... 12,000,000 11,998,230
5.45%, 7/16/96 .................................................. 15,000,000 14,966,000
CSR Finance Ltd, 5.32%, 9/25/96 ..................................... 8,000,000 7,899,667
Electronic Data Systems Corp., 5.36%, 8/7/96 ........................ 10,000,000 9,945,219
English China Clays PLC:
5.45%, 8/8/96 ................................................... 13,887,000 13,807,551
5.34%, 8/15/96 .................................................. 8,000,000 7,947,000
Enterprise Funding Corp.:
5.30%, 7/1/96 ................................................... 13,638,000 13,638,000
Equipment Intermediation Partnership, 5.32%, 7/8/96 ................. 20,000,000 19,979,350
Explorer Pipeline Co., 5.36%, 7/10/96 ............................... 9,000,000 8,987,962
Ford Motor Credit Corp., 5.17%, 7/3/96 .............................. 10,560,000 10,556,967
Greenwich Funding Corp.:
5.41%, 7/15/96 .................................................. 15,000,000 14,968,500
Hercules, Inc., 5.36%, 7/10/96 ...................................... 10,000,000 9,986,625
McCormick & Co. Inc., 5.08%, 10/17/96 ............................... 22,500,000 22,162,500
Mobil Australia Finance Corp., 5.32%, 7/31/96 ....................... 15,000,000 14,933,750
National Cooperative Services Corp., 5.32%, 7/23/96 ................. 34,448,000 34,336,427
Pacific Dunlop Holdings, Inc., 5.33%, 8/21/96 ....................... 20,000,000 19,850,117
Pacific Dunlop Ltd, 5.50%, 10/10/96 ................................. 4,250,000 4,185,374
Pooled Accounts Receivable Capital:
5.39%, 7/9/96 ................................................... 9,000,000 8,989,240
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C>
5.34%, 7/12/96 .................................................. 10,000,000 9,983,714
Premex Capital, Inc., 5.48%, 9/12/96 ................................ 14,918,000 14,754,043
Premium Funding, Inc.:
Series E, 5.46%, 7/25/96 ........................................ 18,000,000 17,934,720
Series L, 5.34%, 7/11/96 ........................................ 10,000,000 9,985,194
Quebec (Province of):
5.33%, 9/23/96 .................................................. 10,000,000 9,877,267
5.35%, 9/25/96 .................................................. 10,000,000 9,873,867
Royal Bank of Canada, 5.48%, 1/17/97 ................................ 11,380,000 11,043,658
Sunbelt-Dix, Inc., 5.36%, 8/6/96 .................................... 16,975,000 16,884,523
TI Group, Inc.
5.33%, 7/8/96 ................................................... 10,000,000 9,989,655
5.34%, 7/22/96 .................................................. 10,000,000 9,968,967
5.53%, 9/12/96 .................................................. 10,000,000 9,889,080
Transamerica Finance Corp., 4.93%, 7/12/96 .......................... 10,000,000 9,984,967
Travelers Aetna Casualty Corp., 5.35%, 7/2/96 ....................... 17,000,000 16,997,474
Triple A One Funding Corp., 5.39%, 7/10/96 .......................... 8,879,000 8,867,058
Vattenfall Treasury Inc., 5.32%, 7/22/96 ............................ 10,000,000 9,969,083
Warner Lambert Co., 5.05%, 8/14/96 .................................. 5,400,000 5,366,868
Westpac Capital, 5.24%, 7/9/96 ...................................... 17,970,000 17,949,115
WMX Technologies, Inc., 5.36%, 9/9/96 ............................... 15,480,000 15,320,470
Wood Street Funding Corp., 5.40%, 7/15/96 ........................... 17,000,000 16,964,366
--------------
618,320,920
--------------
CORPORATE NOTES - 14.97%
Associates Corp. of North America Debenture, 7.50%,
10/15/96 ........................................................ 28,850,000 28,987,277
Comerica Bank, 5.70%, 9/3/96 ........................................ 13,000,000 12,997,679
Comerica Bank, 5.55% (A/R), 2/14/97 ................................. 10,000,000 10,000,000
Ford Motor Credit Co. Medium Term Notes:
14.00%, 7/5/96 .................................................. 5,000,000 5,004,262
9.10%, 7/18/96 .................................................. 5,000,000 5,007,154
General Electric Capital Corp. Medium Term Notes:
7.625%, 1/10/97 ................................................. 5,635,000 5,700,072
5.24%, 1/17/97 .................................................. 22,980,000 22,972,444
Household Bank, 5.40%, 7/30/96 ...................................... 8,000,000 8,000,000
Huntington National Bank, 5.42% (A/R), 8/29/96 ...................... 30,000,000 29,997,082
</TABLE>
10
<PAGE>
<TABLE>
<S> <C> <C>
J.P. Morgan, 5.75%, 8/7/96 .......................................... 29,980,000 29,981,181
PHH Corp., 5.54%, 1/23/97 ........................................... 25,000,000 24,995,893
PNC Bank, 5.65%, 9/18/96 ............................................ 20,000,000 19,998,854
Society National Bank of Cleveland, 7.13%, 4/15/97 .................. 12,250,000 12,390,659
Society National Bank of Cleveland Ohio Medium Term Note,
6.875%, 10/15/96 ................................................ 23,500,000 23,567,656
U S Capital Funding, Inc., 8.00%, 10/15/96 .......................... 7,000,000 7,051,070
Xerox Credit Medium Term Note, 5.67% (A/R), 8/9/96 .................. 19,500,000 19,502,074
--------------
266,153,357
--------------
CERTIFICATES OF DEPOSIT - 7.82%
Banque Nationale De Paris, 5.51%, 1/8/97 ............................ 10,000,000 9,986,072
Canadian Imperial Bank of Commerce, 5.50%, 1/9/97 ................... 10,000,000 10,000,000
Dresdner Bank AG, 5.80%, 5/1/97 ..................................... 10,000,000 10,000,000
First Union National Bank of NC, 5.70%, 4/29/97 ..................... 15,000,000 15,000,000
Household Bank, 5.36%, 8/21/96 ...................................... 8,000,000 8,000,000
Huntington National Bank, 5.28%, 1/10/97 ............................ 7,000,000 7,000,000
Mellon Bank, 5.78%, 9/26/96 ......................................... 14,980,000 14,997,806
PNC Bank Corp., 5.74%, 9/30/96....................................... 20,000,000 19,995,128
Rabobank Nederland NV, 5.93%, 6/4/97 ................................ 10,000,000 10,000,799
Royal Bank of Canada, 5.75%, 5/14/97 ................................ 24,000,000 23,989,647
Societe Generale, 5.78%, 4/11/97 .................................... 10,000,000 9,998,510
--------------
138,967,962
--------------
TIME DEPOSITS - 26.33%
Banco Bilbao Vizcaya, 5.63%, 7/1/96 ................................. 75,000,000 75,000,000
Bank Brussel Lambert, 5.69%, 7/1/96 ................................. 75,000,000 75,000,000
Bank of Tokyo-Mitsubishi Ltd, 5.69%, 7/1/96 ......................... 85,000,000 85,000,000
Bank One Columbus, 5.50%, 7/1/96 .................................... 55,000,000 55,000,000
Dresdner Bank AG, 5.13%, 7/1/96 ..................................... 28,000,000 28,000,000
Kai-Ichi Kangyo Bank Ltd, 5.66%, 7/1/96 ............................. 80,000,000 80,000,000
Mellon Bank, 5.63%, 7/1/96 .......................................... 45,000,000 45,000,000
Societe Generale, 5.63%, 7/2/96 ..................................... 25,000,000 25,000,000
--------------
468,000,000
--------------
TOTAL INVESTMENTS ......................................................... $1,777,778,166
==============
<FN>
(A/R) - Adjustable Rate
</TABLE>
11
<PAGE>
THE WOODWARD FUNDS
WOODWARD GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
AMORTIZED
FACE COST
DESCRIPTION AMOUNT (Note 2)
----------- ------ ----------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS - 59.39%
Daiwa Securities America, Inc., Revolving Repurchase
Agreement, 5.50%, 7/1/96 (secured by U. S. Treasury
Bills due 12/19/96, held at The Bank of New York) ................ $ 20,000,000 $ 20,000,000
Eastbridge Capital, Inc., Revolving Repurchase Agreement
5.55%, 7/1/96 (secured by U. S. Treasury Securities with
maturities ranging from 10/17/96 through 8/15/04 at various
interest rates ranging from 0.00% to 9.00%, all held at The
Bank of New York) ................................................ 70,000,000 70,000,000
Lehman Brothers, Inc., Revolving Repurchase Agreement,
5.55%, 7/1/96 (secured by various U. S. Treasury Bills with
maturities ranging from 12/19/96 through 6/26/97, all held at
Chemical Bank) ................................................... 20,000,000 20,000,000
London Global Securities, Revolving Repurchase Agreement,
5.53%, 7/1/96 (secured by various U. S. Treasury Securities
with maturities ranging from 10/17/96 through 5/15/06 at
various interest rates ranging from 0.00% to 6.875%, all
held at Bankers Trust Company) ................................... 20,000,000 20,000,000
NationsBank Capital Markets, Inc., Revolving Repurchase
Agreement, 5.50%, 7/1/96 (secured by various U.S. Treasury
Securities with maturities ranging from 5/15/00 through 5/15/06 at
various interest rates ranging from 0.00%
to 7.875%, all held at Chemical Bank) ............................ 90,000,000 90,000,000
Salomon Brothers, Inc., Revolving Repurchase Agreement,
5.53%, 7/1/96 (secured by various U.S. Treasury Strips with
maturities ranging from 2/15/99 through 8/15/00, all held at
Chemical Bank) ................................................... 48,634,000 48,634,000
------------
268,634,000
------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 40.61%
U.S. Treasury Securities - 9.92%
U.S. Treasury Bill, 5.32%, 3/6/97 .................................... 10,000,000 9,646,600
U.S. Treasury Notes:
4.375%, 8/15/96 .................................................. 5,000,000 4,991,510
7.000%, 9/30/96 .................................................. 15,000,000 15,050,050
7.500%, 1/31/97 .................................................. 9,480,000 9,607,484
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C>
6.875%, 2/28/97 .................................................. 5,500,000 5,570,149
------------
44,865,793
------------
Agency Obligations - 30.69%
Federal Farm Credit Bank:
5.28%, A/R, 8/2/96 ............................................... 5,000,000 4,976,622
5.60%, 11/1/96 ................................................... 10,000,000 10,001,108
Federal Home Loan Bank:
4.84%, 8/26/96 ................................................... 5,000,000 4,994,526
5.03%, 3/6/97 .................................................... 5,000,000 4,991,666
5.43%, 1/10/97 ................................................... 5,000,000 5,000,000
4.75%, 2/24/97 ................................................... 4,000,000 3,987,297
Federal Home Loan Mortgage Corp., 7.86%, 1/15/97 ..................... 1,000,000 1,013,952
Federal National Mortgage Assn.:
5.03%, 7/19/96 ................................................... 8,000,000 7,979,920
5.24%, 8/29/96 ................................................... 10,000,000 9,914,778
Federal National Mortgage Assn. Debenture. 8.00%, 7/10/96 ............ 9,000,000 9,005,248
Federal National Mortgage Assn. Medium Term Note:
5.27%, 7/5/96 .................................................... 40,000,000 39,999,733
4.37%, 1/21/97 ................................................... 2,800,000 2,784,274
Student Loan Marketing Assn.:
5.87%, A/R, 6/30/96 .............................................. 12,500,000 12,493,774
6.06%, A/R, 7/1/96 ............................................... 11,700,000 11,700,000
5.46%, A/R, 10/4/96 .............................................. 10,000,000 10,000,000
------------
138,842,898
------------
TOTAL INVESTMENTS .......................................................... $452,342,691
============
<FN>
(A/R) - Adjustable Rate
</TABLE>
13
<PAGE>
THE WOODWARD FUNDS
WOODWARD TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
AMORTIZED
FACE COST
DESCRIPTION AMOUNT (Note 2)
----------- ------ ---------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS - 89.82%
Aubrey Langston Revolving Repurchase Agreement, 5.45%,
7/1/96 (secured by various U.S. Treasury Bills with
maturities ranging from 7/11/96 through 5/29/97, all held at
Chemical Bank) ................................................. $ 92,000,000 $ 92,000,000
Barclays DeZoete Wedd Securities, Inc., Revolving Repurchase
Agreement, 5.40%, 7/1/96 (secured by various U.S. Treasury
Securities with maturities ranging from 2/15/97 through 8/15/02
at various interest rates ranging from 0.00% to 5.125%, all held
at the Bank of New York) ....................................... 50,000,000 50,000,000
Bear Stearns & Co., Inc., Revolving Repurchase Agreement,
5.35%, 7/1/96 (secured by various U.S. Treasury
Strips with maturities ranging from 8/15/96 through
2/15/04, all held at the Custodial Trust Co.) .................. 458,100,000 458,100,000
Daiwa Securities America, Inc., Revolving Repurchase
Agreement, 5.50%, 7/1/96 (secured by U.S. Treasury
Bills due 12/19/96, held at the Bank of New York) .............. 92,000,000 92,000,000
Donaldson Lufkin Jenrette, Revolving Repurchase Agreement,
5.40%, 7/1/96 (secured by various U. S. Treasury Securities
with maturities ranging from 8/31/96 through 3/15/96 at various
interest rates from 0.00% to 8.875%, all held at the Bank of
New York) ...................................................... 90,000,000 90,000,000
First Boston, Inc., Revolving Repurchase Agreement, 5.35%,
7/1/96 (secured by various U.S. Treasury Notes with
maturities ranging from 9/30/96 through 11/15/01 at
various interest rates ranging from 6.50% to 7.50%, all
held at Chemical Bank) ......................................... 49,000,000 49,000,000
H.S.B.C. Securities, Inc., Revolving Repurchase Agreement, 5.40%
7/1/96 (secured by various U.S. Treasury Bills with maturities
ranging from 3/6/97 through 6/26/97, all held at Chemical Bank) 82,824,000 82,824,000
Lehman Brothers, Inc., Revolving Repurchase Agreement, 5.55%,
7/1/96 (secured by various U.S. Treasury Bills with maturities
ranging from 12/19/96 through 6/26/97, all held at Chemical
Bank) .......................................................... 433,801,000 433,801,000
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C>
Morgan Stanley & Co., Inc., Revolving Repurchase Agreement,
5.35%, 7/1/96 (secured by U.S. Treasury Notes, 7.25%,
2/15/98, held at the Bank of New York) ......................... 90,000,000 90,000,000
NationsBank Capital Markets, Inc., Revolving Repurchase
Agreement, 5.50%, 7/1/96 (secured by various U.S.
Treasury securities with maturities ranging from 5/15/00
through 5/15/06 at various interest rates ranging from
0.00% to 7.875%, all held at Chemical Bank) .................... 92,000,000 92,000,000
Sanwa BGK Securities Co., L.P., Revolving Repurchase
Agreement, 5.40%, 7/1/96 (secured by various U.S. Treasury
Securities with maturities ranging from 11/14/96 through
5/15/99 at various interest rates ranging from 0.00% to 6.375%,
all held at the Bank of New York) .............................. 90,000,000 90,000,000
Smith Barney, Inc. Revolving Repurchase Agreement, 5.35%,
7/1/96 (secured by various U.S. Treasury Securities with
maturities ranging from 10/31/97 through 11/15/04 at various
interest rates ranging from 0.00% to 8.25%, all held at the
Bank of New York) .............................................. 90,000,000 90,000,000
--------------
1,709,725,000
--------------
U.S. GOVERNMENT OBLIGATIONS - 10.18%
U.S. Treasury Securities - 10.18%
U.S. Treasury Bills:
4.68%, 2/6/97 .............................................. 25,000,000 24,304,097
5.32%, 3/6/97 .............................................. 5,500,000 5,305,630
U.S. Treasury Notes:
7.875%, 7/15/6 ............................................. 2,000,000 2,001,556
6.125%, 7/31/96 ............................................ 7,000,000 7,001,970
7.875%, 7/31/96 ............................................ 4,000,000 4,006,593
4.375%, 8/15/96 ............................................ 14,000,000 13,974,940
8.000%, 10/15/96 ........................................... 15,000,000 15,094,337
6.875%, 10/31/96 ........................................... 33,980,000 34,158,953
4.375%, 11/15/96 ........................................... 5,000,000 4,975,939
7.250%, 11/15/96 ........................................... 6,000,000 6,037,300
7.410%, 12/31/96 ........................................... 40,000,000 40,463,269
7.400%, 1/31/97 ............................................ 5,000,000 5,067,238
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C>
6.875%, 2/28/97 ............................................ 21,000,000 21,259,961
6.500%, 4/30/97 ............................................ 10,000,000 10,046,171
--------------
193,697,954
--------------
TOTAL INVESTMENTS ........................................................ $1,903,422,954
==============
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD FUNDS
WOODWARD TAX-EXEMPT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
AMORTIZED
INTEREST FACE COST
DESCRIPTION RATING* RATE*** AMOUNT (Note 2)
----------- ------- -------- ----- ---------
<S> <C> <C> <C> <C>
Alabama - 0.77%
Alabama Public School College Authority,
12/1/96....................................... Aa 3.70% $ 5,050,000 $ 5,054,053
Alaska - 3.28%
Valdez Marine Terminal-Arco Transportation:
CP, 5/1/31..................................... VMIG 1 3.30% 9,700,000 9,700,000
CP, 5/1/31..................................... VMIG 1 3.50% 3,900,000 3,900,000
VRDB, 5/1/31 .................................. VMIG 1 3.45% 8,000,000 8,000,000
Arizona - 1.90%
Chandler IDR VRDB-Parsons Municipal Services,
12/15/09....................................... A 1+ 3.70% 4,500,000 4,500,000
Maricopa Co. GO TAN, 7/31/96 .................... MIG 1 4.50% 6,000,000 6,003,100
Maricopa Co. School District GO Unlimited Tax
Series A, 7/1/96 .............................. Aa 3.75% 2,000,000 2,000,000
California - 0.62%
Contra Costa Transportion Authority (FGIC
Insured) Sales Tax Series A, 3/1/97........... Aaa 5.00% 4,015,000 4,051,414
Colorado - 1.25%
Lakewood Multi-Family Housing (FGIC Insured)
VRDB-St. Moritz & Diamond Head, 10/1/07........ VMIG 1 3.95% 8,250,000 8,250,000
Connecticut - 0.68%
Connecticut State Special Assessment (FGIC
Insured), 7/1/97 ............................. VMIG 1 3.90% 4,500,000 4,500,000
Delaware - 1.15%
Delaware EDC VRDB-Hospital Billing Series B,
12/1/15........................................ VMIG 1 3.50% 7,600,000 7,600,000
District of Columbia - 2.96% District of
Columbia GO Refunding, VRDB:
A-1, 10/1/07 ................................. VMIG 1 3.80% 6,000,000 6,000,000
A-3, 10/1/07 ................................. VMIG 1 3.80% 7,000,000 7,000,000
A-4, 10/1/07 ................................. VMIG 1 3.80% 6,500,000 6,500,000
Florida - 4.90%
Florida GO Unlimited Tax, 7/1/08 ................ Aaa 7.20% 3,270,000 3,270,000
Putnam Co. PCR Seminole Electric Coop-D,
12/15/96 ..................................... MIG 1 3.50% 7,000,000 7,000,000
</TABLE>
17
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
St. Lucie Co. CP Florida Power & Light,
7/16/96 ....................................... P 1 3.40% 4,500,000 4,500,000
St. Lucie Co. CP:
8/9/96 ........................................ P 1 3.15% 3,500,000 3,500,000
10/18/96 ...................................... P 1 3.60% 6,500,000 6,500,000
Sunshine St. Governmental Revenue CP,
10/24/96 ...................................... VMIG 1 3.65% 7,500,000 7,500,000
Georgia - 2.73%
Cobb Co. Housing Multi-Family VRDB-Pittco
Frey Associates Project, 6/1/23 ............... VMIG 1 3.15% 5,900,000 5,900,000
De Kalb Private Hospital Authority VRDB,
3/1/24 ........................................ VMIG 1 3.30% 7,000,000 7,000,000
Georgia GO Unlimited Tax, 3/1/97 ................ Aaa 6.75% 5,000,000 5,102,163
Hawaii - 2.06%
Hawaii Dept. of Budget & Finance Mortgage:
VRDN-Kuakini Medical Center, 7/1/04 ........... VMIG 1 3.65% 4,000,000 4,000,000
VRDB-Wilcox Memorial Hospital, 7/1/18 ......... VMIG 1 3.90% 2,100,000 2,100,000
Hawaii State Housing Finance & Development
Corp. VRDB-Rental Housing Systems, 7/1/24 ..... VMIG 1 3.50% 7,500,000 7,500,000
Idaho - 2.29%
Idaho GO TAN, 6/30/97 ........................... MIG 1 4.50% 15,000,000 15,086,100
Illinois - 2.95%
Chicago GO Tender Notes, 10/31/96 ............... VMIG 1 3.65% 6,400,000 6,400,000
Illinois HCF (FGIC Insured) Highland Park
Hospital VRDB, 10/1/12 ........................ VMIG 1 3.40% 5,400,000 5,400,000
Illinois HCF (MBIA Insured) Sisters Hospital
VRDB, 12/1/14 ............................... VMIG 1 3.40% 7,600,000 7,600,000
Indiana - 3.10%
Fort Wayne Community School General
Fund, 12/31/96 ................................ SP 1+ 3.75% 3,500,000 3,504,380
Mt. Vernon PCR CP-General Electric Project,
12/1/04 ...................................... P 1 3.30% 10,000,000 10,000,000
12/1/04 ...................................... P 1 3.40% 6,900,000 6,900,000
Maine - 1.53%
Maine GO TAN Unlimited Tax, 6/27/97 ............. MIG 1 4.50% 10,000,000 10,059,300
</TABLE>
18
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Maryland - 0.92%
Montgomery Co. GO Unlimited Tax, 4/1/97 ......... Aaa 5.10% 6,000,000 6,068,816
Massachusetts - 1.23%
Clairborne Co. PCR CP, 7/12/96................... VMIG 1 3.55% 8,100,000 8,100,000
Michigan - 11.28%
Chelsea EDC Ltd. Obligation VRDB, 5/1/28 ........ VMIG 1 3.30% 3,000,000 3,000,000
Delta Co. EDC-Mead Escanaba Paper:
Series F, 12/1/13 ............................. P 1 3.60% 1,700,000 1,700,000
Detroit Downtown Development Authority VRDB
Millender Center Project, 12/1/10 ........... VMIG 1 3.50% 2,800,000 2,800,000
Farmington Hills EDR VRDB-Brookfield Building
Associates, 11/1/10 ........................... A 1 3.55% 4,455,000 4,455,000
Flint Hospital Building Authority VRDB-Hurley
Medical Center Series A, 7/1/08............... Aaa 7.75% 4,665,000 4,758,300
Ingham Co. EDC VRDB-Martin Luther
Memorial Home, Inc., 4/1/22 .................. A 1+ 3.40% 2,600,000 2,600,000
Meridian Limited Obligation EDC VRDN-
Service Merchandise Co., 12/15/99 ............. A 1+ 3.60% 500,000 500,000
Michigan State Building Authority Series I,
10/1/96 ..................................... A 1 3.75% 5,000,000 5,001,779
Michigan State Hospital VRDB-Hospital
Equipment Loan Program:
12/1/23 .................................... VMIG 1 3.55% 3,600,000 3,600,000
12/1/23 .................................... VMIG 1 3.55% 1,200,000 1,200,000
12/1/23 .................................... VMIG 1 3.55% 8,000,000 8,000,000
Michigan State HDA VRDB, 4/1/19 ................. A 1+ 3.25% 1,000,000 1,000,000
Michigan State HDA Ltd. Obligation VRDB:
Laurel Valley, 12/1/07 ..................... VMIG 1 3.40% 2,600,000 2,600,000
Pine Ridge, 10/1/07 ........................ VMIG 1 3.40% 600,000 600,000
Michigan State Job Development Authority
VRDN-Sugar Sebewa, 9/1/00 .................... Aa 3 3.35% 300,000 300,000
VRDB-Gordon Food Service, 8/1/15 ............. Aaa 3.30% 5,200,000 5,200,000
PCR VRDB-Mazda Motor Corp., 10/1/08 .......... A1 3.55% 3,200,000 3,200,000
</TABLE>
19
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Michigan State Strategic Building Authority
CP, 8/28/96 ................................. P 1 3.70% 20,000,000 20,000,000
Plymouth Township EDC VRDN-Key
International Manufacturing, Inc., 7/1/04 .... ** N/R 3.55% 3,750,000 3,750,000
Minnesota - 4.73%
Hennepin Co. GO, 12/1/06 ........................ VMIG 1 3.35% 5,000,000 5,000,000
Hennepin Co. GO Unlimited Tax, 12/1/96........... Aaa 3.65% 3,000,000 3,003,611
Minnesota GO Unlimited Tax, 5/1/97............... Aaa 4.50% 10,390,000 10,457,108
Rochester GO Various Sales Tax, 11/1/99 ......... ** N/R 3.25% 12,700,000 12,700,000
Mississippi - 2.21%
Mississippi Hospital Equipment, 5/15/16 ........ P 1 8.25% 6,000,000 6,351,237
Perry Co. PCR VRDB-Leaf River Forest,
10/1/12 ....................................... P 1 3.40% 8,200,000 8,200,000
Missouri - 2.49%
Missouri State Environmental Improvement
Energy Research PCR-Union Electric Co.:
Series A, 6/1/14 ............................ P 1 3.65% 10,000,000 10,000,000
Series B, 6/1/14 ............................ P 1 3.65% 6,430,000 6,430,000
Nevada - 0.96%
Clark Co. PCR VRDB-Nevada Power Co.
10/1/23 ...................................... A 1+ 3.30% 6,300,000 6,300,000
New Hampshire - 0.27%
New Hampshire IDR VRDB-Oerlikon-Burlhe
USA, 7/1/13 ................................... A 1+ 3.65% 1,800,000 1,800,000
New Jersey - 0.61%
North Brunswick Township TAN, 8/6/96 ............ ** N/R 4.00% 4,000,000 4,002,326
New Mexico - 1.20%
Hurley PCR VRDB-Kennecott Santa Fe,
12/1/15 ...................................... P 1 3.60% 7,900,000 7,900,000
New York - 1.56%
New York City GO VRDB, 8/15/23................... VMIG 1 3.75% 4,200,000 4,200,000
New York City GO Unlimited Tax (MBIA Insured)
VRDN, 8/15/03 ............................... VMIG 1 3.60% 6,100,000 6,100,000
</TABLE>
20
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
North Carolina - 0.64%
Raleigh Durham Airport Authority VRDB,
11/1/15 ...................................... A 1+ 3.60% 4,200,000 4,200,000
Ohio - 3.95%
Cincinnati/Hamilton Co. EDR, 8/1/15 ............. ** N/R 3.90% 3,150,000 3,150,000
Columbus Electric System VRDB, 9/1/09 ........... A 1 3.55% 1,400,000 1,400,000
Franklin Co. IDR VRDB-Capital South
Community Redevelopment, 12/1/05 .............. ** N/R 3.80% 700,000 700,000
Hamilton Co. Health System Revenue VRDB
Franciscan Sisters, 3/1/17 ................... VMIG 1 3.75% 2,500,000 2,500,000
Montgomery Co. Hospital Revenue CP, 7/9/96 ...... VMIG 1 3.50% 10,000,000 10,000,000
Ohio Environmental Improvements CP, U.S.
Steel Corp., 5/1/11 ......................... P 1 3.45% 8,300,000 8,300,000
Oklahoma - 1.98%
Oklahoma Co. GO Unlimit Tax , 2/1/97 ............ Aa 6.50% 6,420,000 6,539,533
Tulsa Industrial Revenue (MBIA Insured)
VRDB, 10/1/26 ................................ VMIG 1 3.10% 6,500,000 6,500,000
Oregon - 1.27%
Port Morrow VRDB-General Electric, 10/1/13 ...... P 1 3.75% 8,340,000 8,340,000
Pennsylvania - 6.14%
Allegheny Co. IDR VRDB-United Jewish
Federation, 10/1/25 .......................... VMIG 1 3.55% 9,930,000 9,930,000
Montgomery Co. Higher Education Health
Authority VRDB-Philadelphia Presbytery
7/1/25 .................................... VMIG 1 3.55% 5,000,000 5,000,000
Pennsylvania Intergovernment Coop Authority
6/15/97 ...................................... Aaa 5.00% 5,000,000 5,060,182
Schuylkill Co. IDR VRDB-Westwood Energy
11/1/09 ...................................... P 1 3.85% 15,900,000 15,900,000
Temple University of the Commonwealth,
5/20/97....................................... SP 1+ 4.63% 4,500,000 4,533,582
</TABLE>
21
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
South Carolina - 1.26%
Charleston Co. School District GO, 2/1/03........ ** N/R 7.00% 3,200,000 3,325,648
York Co. PCR VRDB-Electric Project,
9/15/14 ...................................... MIG 1 3.25% 5,000,000 5,000,000
Tennessee - 2.40%
Franklin IDR VRDB-Landings Project,
12/1/06 ...................................... A 1+ 3.35% 9,900,000 9,900,000
Knox Co. Board IDR VRDB-Service
Merchandise Co., Inc., 12/15/08 ............... A 1+ 3.60% 800,000 800,000
Metropolitan Government Nashville &
Davidson Co., VRDB-Nashville Apartments
9/1/15 ................................... Aa 3 3.35% 5,100,000 5,100,000
Texas - 10.20%
Austin Utilities System CP, 9/10/96 ............ P 1 3.50% 5,400,000 5,400,000
Dallas Area Rapid Transit CP:
10/21/96 ..................................... P 1 3.60% 5,000,000 5,000,000
10/21/96 ..................................... P 1 3.65% 4,000,000 4,000,000
Harris Co. Health Facilities Development Corp.
VRDB-St. Lukes Episcopal Hospital, 2/15/21 ... A 1+ 3.70% 6,850,000 6,850,000
Houston Water & Sewer System (MBIA Insured)
12/1/16 ....................................... Aaa 7.13% 3,000,000 3,068,711
North Central HCFA VRDB-YMCA Dallas
6/1/21 ........................................ VMIG 1 3.50% 5,600,000 5,600,000
Port Arthur Navigational District VRDB-Texaco
Inc. Project, 10/1/24 ........................ VMIG 1 3.65% 2,600,000 2,600,000
Texas Hospital Equipment Finance Council
(MBIA Insured) VRDN, 4/7/05 ................... VMIG 1 3.40% 7,870,000 7,870,000
Texas State Public Finance Authority,
10/1/96 ....................................... Aa 6.40% 3,000,000 3,020,545
Texas TRAN, 8/30/96 ............................. MIG 1 4.75% 12,750,000 12,765,450
Texas Transportation CP, 8/20/96 ................ P 1 3.65% 5,000,000 5,000,000
Tyler Health Facilities Development Corp. CP-
East Texas Medical Center Regional Health,
11/1/25 ....................................... VMIG 1 4.00% 6,000,000 6,000,000
Utah - 1.30%
Intermountain Power Agency:
7/1/17 ....................................... Aaa 7.75% 4,700,000 4,794,000
7/1/21 ....................................... VMIG 1 3.93% 3,750,000 3,750,000
</TABLE>
22
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Vermont - 1.57%
Vermont Educational Health Agency, 11/1/27 ...... A 1+ 3.80% 5,975,000 5,975,000
Vermont Student Assistance Corp. VRDN,
1/1/04 ........................................ VMIG 1 3.65% 4,400,000 4,400,000
Washington - 4.79%.
Port Townsend IDR VRDB-Townsend Paper
Corp., 3/1/09 ................................. VMIG 1 3.45% 5,100,000 5,100,000
Seattle Municipal Light & Power Co., 11/1/15 .... VMIG 1 3.55% 5,500,000 5,500,000
Washington GO (MBIA Insured), 10/1/96 ........... Aaa 10.00% 3,000,000 3,051,215
Washington GO Unlimited Tax VRDB, 6/1/20 ........ VMIG 1 3.25% 17,900,000 17,900,000
Wisconsin - 4.87%
Milwaukee School Order Notes
Series B, 8/22/96 ............................ MIG 1 4.50% 15,000,000 15,010,233
Waukesha School District TRAN, 8/23/96 .......... SP 1+ 4.25% 14,000,000 14,004,564
Wisconsin State Transportation Transit
Improvements, 7/1/02 .......................... AAA 7.90% 3,000,000 3,060,000
------------
TOTAL INVESTMENTS ............................... $658,657,350
============
</TABLE>
23
<PAGE>
THE WOODWARD FUNDS
WOODWARD TAX-EXEMPT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS - (Continued)
June 30, 1996
Investment Abbreviations
------------------------
AMBAC - AMBAC Indemnity Corp.
BIGI - Bond Investors Guaranty Insurance Co.
CP - Commercial Paper
EDC - Economic Development Corporation
FGIC - Financial Guaranty Insurance Company
FSA - Financial Securities Assurance Corp.
GO - General Obligation
HCF - Health Care Facilities
HR - Housing Revenue
HDA - Housing Development Authority
HFA - Housing Finance Authority
IDA - Individual Development & Export Authority
IDR - Industrial Development Revenue
MBIA - Municipal Bond Insurance Association
PCR - Pollution Control Revenue
PFA - Public Facilities Authority
TAN - Tax Anticipation Note
TRAN - Tax Revenue Anticipation Note
UPDATE - Unit Priced Daily Adjustable Tax Exempt Securities
VRDB - Variable Rate Demand Bond
VRDN - Variable Rate Demand Note
* Moody's when rated, otherwise Standard & Poor's.
** N/R investment is not rated, yet deemed by the Investment Advisor as an
acceptable credit and having characteristics equivalent to obligations
rated AA or MIG 1 by Moody's, AA or A-1+ by Standards & Poor's.
24
<PAGE>
THE WOODWARD FUNDS
WOODWARD MICHIGAN TAX-EXEMPT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
AMORTIZED
INTEREST FACE COST
DESCRIPTION RATING* RATE*** AMOUNT (Note 2)
----------- ------- -------- ------ ---------
<S> <C> <C> <C> <C>
Michigan - 99.26%
Ann Arbor EDC Ltd. Obligation VRDN-Webers
Industries, 5/1/00............................ **N/R 3.50% $ 765,000 $ 765,000
Bruce Township Hospital (MBIA Insured) VRDB-
Sisters of Charity St. Joseph,
Series A, 5/1/18 ............................. VMIG 1 3.65% 2,840,000 2,840,000
Cornell EDC IDR, 3/1/15 ............................. A 1+ 3.50% 1,900,000 1,900,000
Delta Co. EDC-Mead Escanaba Paper Co.,
Series F, 12/1/13 ........................... P 1 3.60% 400,000 400,000
Detroit Downtown Development Authority VRDB-
Millender Center Project, 12/1/10 ........... VMIG 1 3.50% 4,100,000 4,100,000
Detroit Sewage Disposal (MBIA Insured) Series B,
7/1/96 ....................................... Aaa 5.00% 4,750,000 4,750,000
Detroit State Aid GO, 5/1/97......................... Aaa 5.63% 6,000,000 6,088,429
Detroit Water Supply Sustem (FDIC Insured), 7/1/96... Aaa 5.00% 300,000 300,000
Farmington Hills EDR Ltd. Obligation VRDB-
Brookfield Building Assn., L P, 11/1/10....... A 1 3.55% 355,000 355,000
Flint Hospital Building Authority VRDB-Hurley
Medical Center, Series A, 7/1/00 ............. Aaa 7.75% 2,000,000 2,040,000
Grand Traverse Hospital VRDB-Munson Medical
Center Series A, 12/1/15 ..................... Aaa 7.63% 1,000,000 1,023,177
Holland EDC VRDB-Thrifty Holland, Inc.,
3/1/13 ....................................... A 1 3.70% 2,300,000 2,300,000
Ingham Co. EDC VRDB-Martin Luther
Memorial Home, Inc., 4/1/22 .................. A 1+ 3.40% 3,770,000 3,770,000
Kalamazoo Co. EDC VRDB-Industrial &
Economic Development WBC Properties Ltd.,
9/1/15 ....................................... **N/R 3.80% 1,000,000 1,000,000
Kalamazoo EDC Ltd Obligation, 6/1/20 ................ A 1 3.45% 1,575,000 1,575,000
Kent Hospital VRDB-Butterworth Hospital
Series A, 1/15/20............................. VMIG 1 3.75% 2,900,000 2,900,000
</TABLE>
25
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Leelanau Co. EDC Ltd. Obligation-American
Community Mutual Insurance Co., 6/15/06 ...... **N/R 3.85% 995,000 995,000
Macomb Township EDC Ltd. Obligation
VRDN-ACR Industries, 1/1/03 .................. VMIG 1 3.40% 850,000 850,000
Meridian EDC Ltd. Obligation VRDB-Hannah
Technologies, 11/15/14........................ A 1+ 3.70% 3,200,000 3,200,000
Michigan Municipal Bond Authority Series B,
7/3/96 ....................................... SP 1+ 4.50% 4,000,000 4,000,154
Michigan State Building Authority:
Series I, 10/1/96 ........................... A 1 3.75% 2,000,000 2,000,000
University & College Improvements, 10/1/96 ... A 1 4.30% 5,235,000 5,241,360
University of Michigan Hospital, 12/1/96 ..... Aaa 7.88% 665,000 689,382
Michigan State GO, 9/30/96 .......................... MIG 1 4.00% 6,000,000 6,013,787
Michigan State Hospital Henry Ford Health Series A,
11/15/96 ..................................... Aa 4.00% 1,070,000 1,071,546
7/1/13 ....................................... Aaa 7.50% 1,000,000 1,039,963
Michigan State Hospital VRDB-Hospital
Equipment Loan Program, 12/1/23 .............. VMIG 1 3.55% 400,000 400,000
Michigan State HDA Ltd. Obligation VRDB-
Pine Ridge, 10/1/07........................... VMIG 1 3.40% 3,000,000 3,000,000
Laurel Valley, 12/1/07 ....................... VMIG 1 3.40% 1,000,000 1,000,000
Woodland Meadows, 3/1/13 ..................... VMIG 1 3.60% 2,000,000 2,000,000
Michigan State Job Development Authority PCR:
VRDN-Sugar Sebewa, 9/1/00 .................... Aa 3 3.35% 2,300,000 2,300,000
VRDN-Hitachi Metals, 1/1/04 .................. Aa 3 3.90% 1,800,000 1,800,000
VRDB-Mazda Motors Mfg. USA Corp., 10/1/08 .... A 1 3.55% 2,800,000 2,800,000
VRDB-Gordon Food Service, 8/1/15 ............. Aaa 3.30% 2,800,000 2,800,000
Michigan State South Central (AMBAC) Power
Supply System, 11/1/06 ....................... Aaa 7.25% 1,000,000 1,032,906
Michigan State Strategic Fund PCR VRDN-
Consumers Power Co., 9/1/00 .................. A 1+ 3.45% 3,000,000 3,000,000
</TABLE>
26
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Michigan State Strategic Fund Ltd. Obligation AMT:
VRDN-Alpha Tech, Inc., 10/1/97 ............. **N/R 3.65% 6,000,000 6,000,000
VRDN-Michigan & Wayne Disposal Inc.,
4/1/99 ................................... A 1 3.60% 1,100,000 1,100,000
VRDB-Dennenlease L C, 4/1/10 ............... **N/R 3.45% 2,210,000 2,210,000
VRDB-Ironwood Plastics, Inc., 11/1/11 ...... **N/R 3.45% 1,275,000 1,275,000
VRDB-Molmec Inc., 12/1/14 .................. **N/R 3.65% 1,500,000 1,500,000
VRDB-CEC Products Co., 6/1/15 .............. **N/R 3.65% 3,300,000 3,300,000
VRDB-Detroit Edison Co., 9/1/30 ............ P 1 3.55% 2,000,000 2,000,000
Michigan State Strategic Fund Ltd. Obligation
VRDN-Freezer Services, 10/1/97................ **N/R 3.60% 760,000 760,000
Michigan State Strategic Fund PCR VRDB-
Consumers Power, 4/15/18 ..................... P 1 3.55% 1,200,000 1,200,000
Michigan State Trunk Line Highway & Transit
Improvements:
7/1/96 ..................................... A 1 7.00% 500,000 500,000
11/15/96 ................................... A 1 5.25% 500,000 502,635
Michigan State Underground Storage Tank
CP, 7/17/96 .................................. P 1 3.65% 5,000,000 5,000,000
VRDN, 12/1/04 ................................ VMIG 1 3.45% 10,000,000 10,000,000
Oakland Co. EDC Ltd. Obligation VRDB:
Corners Shopping Center, 8/1/15............... A 1+ 3.65% 630,000 630,000
Orchard Maple Project, 11/15/16 .............. **N/R 7.80% 745,000 745,000
St. Clair Shores EDC-Borman's Inc., 10/15/06......... **N/R 3.70% 1,120,000 1,119,670
Van Buren Township EDC AMT VRDN-Daikin
Clutch USA Inc., 3/1/97....................... Aa 3 3.80% 3,000,000 3,000,000
Utica Community Schools (FDIC Insured) Unlimited
Tax, 5/1/97 .................................. Aaa 3.65% 2,390,000 2,390,000
------------
124,573,009
------------
PUERTO RICO - 0.74%
Commonwealth of Puerto Rico (FGIC Insured)
GO Unlimited Tax, 7/1/00 ..................... Aaa 7.80% 500,000 500,000
Puerto Rico Public Buildings Authority-Public
Education & Health Facilities, 7/1/12......... Aaa 8.00% 425,000 425,000
------------
925,000
------------
$125,498,009
TOTAL INVESTMENTS ============
</TABLE>
27
<PAGE>
THE WOODWARD FUNDS
WOODWARD MICHIGAN TAX-EXEMPT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS - (Continued)
June 30, 1996
Investment Abbreviations
------------------------
AMBAC - AMBAC Indemnity Corp.
BIGI - Bond Investors Guaranty Insurance Co.
CP - Commercial Paper
EDC - Economic Development Corporation
EDR - Economic Development Revenue
FGIC - Financial Guaranty Insurance Company
FSA - Financial Securities Assurance Corp.
GO - General Obligation
HCFA - Health Care Facilities
HR - Housing Revenue
HDA - Housing Development Authority
HFA - Housing Finance Authority
IDA - Industrial Development & Export Authority
IDR - Industrial Development Revenue
MBIA - Municipal Bond Insurance Association
PCR - Pollution Control Revenue
PFA - Public Facilities Authority
TAN - Tax Anticipation Note
TRAN - Tax Revenue Anticipation Note
UPDATE - Unit Priced Daily Adjustable Tax-Exempt Securities
VRDB - Variable Rate Demand Bond
VRDN - Variable Rate Demand Note
* Moody's when rated, otherwise Standard & Poor's.
** N/R investment is not rated, yet deemed by the Investment Advisor
as an acceptable credit and having characteristics equivalent to
obligations rated AA or MIG 1 by Moody's, AA or A-1+ by Standards &
Poor's.
29
<PAGE>
THE WOODWARD FUNDS
MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) Organization and Commencement of Operations
The Woodward Funds (Woodward) was organized as a Massachusetts business
trust on April 21, 1987 and registered under the Investment Company Act of
1940, as amended, as an open-end investment company. As of June 30, 1996
Woodward consisted of seventeen separate series of which there were five money
market funds (Money Market Funds), as described below.
Woodward Money Market Fund
Woodward Government Fund
Woodward Treasury Money Market Fund
Woodward Tax-Exempt Money Market Fund
Woodward Michigan Tax-Exempt Money Market Fund
The Money Market Funds commenced operations on January 4, 1988, except
for the Michigan Tax-Exempt Money Market Fund and the Treasury Money Market
Fund, which commenced operations on January 23, 1991 and January 1, 1993,
respectively.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies followed
by the Money Market Funds in preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies. Following generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Investments
Pursuant to Rule 2a-7 of the Investment Company Act of 1940, the Money
Market Funds utilize the amortized cost method to determine the carrying value
of investment securities. Under this method, investment securities are valued
for both financial reporting and federal tax purposes at amortized cost and
any discount or premium is amortized from the date of acquisition to maturity.
The use of this method results in a carrying value which approximates market
value. Market value is determined based upon quoted market prices or dealer
quotes.
Investment security purchases and sales are accounted for on the trade date.
Woodward invests in securities subject to repurchase agreements. Such
transactions are entered into only with institutions included on the Federal
Reserve System's list of institutions with whom the Federal Reserve open
market desk will do business. NBD Bank (NBD), acting under the supervision of
30
<PAGE>
the Board of Trustees, has established the following additional policies and
procedures relating to Woodward's investments in securities subject to
repurchase agreements: 1) the value of the underlying collateral is required
to equal or exceed 102% of the funds advanced under the repurchase agreement
including accrued interest; 2) collateral is marked to market daily by NBD to
assure its value remains at least equal to 102% of the repurchase agreement
amount; and 3) funds are not disbursed by Woodward or its agent unless
collateral is presented or acknowledged by the collateral custodian.
The Tax-Exempt and Michigan Tax-Exempt Funds invest in a majority of
instruments whose stated maturity is greater than one year, but whose rate of
interest is readjusted no less frequently than annually, or which possess
demand features and may therefore be deemed to have a maturity equal to the
period remaining until the next interest adjustment date or the demand date,
whichever is longer.
Investment Income
Interest income is recorded daily on the accrual basis adjusted for
amortization of premium and accretion of discount. Premiums and discounts are
amortized/accreted as required by the Internal Revenue Code.
Federal Income Taxes
It is Woodward's policy to comply with the requirements of Subchapter M
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to distribute net investment income and realized gains to its
shareholders. Therefore, no federal income tax provision is required in the
accompanying Financial Statements.
Shareholder Dividends
On each business day except those holidays the New York Stock Exchange
(Exchange), NBD or its bank affiliates observe, net investment income is
declared as a dividend, at the close of the Exchange, to shareholders of
record at such close. Such dividends are paid monthly.
Deferred Organization Costs
Organization costs are being amortized on a straight-line basis over
the five year period beginning with the commencement of operations of each
series.
Expenses
Expenses are charged daily as a percentage of the respective Fund's net
assets. Woodward monitors the rate at which expenses are charged to ensure
that a proper amount of expense is charged to income each year. This
percentage is subject to revision if there is a change in the estimate of the
future net assets of the funds or a change in expectations as to the level of
actual expenses.
31
<PAGE>
(3) Transactions with Affiliates
First of Michigan Corporation (FoM) and Essex National Securities, Inc.
(Essex) act as sponsors and co-distributors of Woodward's shares. Pursuant to
their Distribution Agreement with Woodward, FoM is entitled to receive a fee
at the annual rate of .025% of the aggregate average net assets invested in
the Money Market Funds' first $400 million and .005% of such assets in excess
of $400 million. Fees of FoM under the Distribution Agreement are allocated
among the Funds based on the relative net asset values. Essex is entitled to
receive a fee at the annual rate of10% of the aggregate average net assets of
Woodward's investment portfolios, attributable to investments by clients of
Essex.
NBD is the investment advisor pursuant to the Advisory Agreement. For
its advisory services to Woodward, NBD is entitled to a fee, computed daily
and payable monthly. Under the Advisory Agreement, NBD also provides Woodward
with certain administrative services, such as maintaining Woodward's general
ledger and assisting in the preparation of various regulatory reports. NBD
receives no additional compensation for such services.
NBD, FoM, and Essex have agreed that they may waive their fees in whole
or in part; and, if in part, may specify the particular fund to which such
waiver relates as may be required to satisfy any expense limitation imposed by
state securities laws or other applicable laws. At present, no restrictive
expense limitation is imposed on Woodward. Restrictive limitations could be
imposed as a result of changes in current state laws and regulations in those
states where Woodward has qualified its shares, or by a decision of the
Trustees to qualify the shares in other states having restrictive expense
limitations.
NBD is also compensated for its services as Woodward's Custodian,
Transfer Agent and Dividend Disbursing Agent, and is reimbursed for certain
out of pocket expenses incurred on behalf of Woodward.
On March 10, 1994, Woodward adopted The Woodward Funds Deferred
Compensation Plan (the "Plan"), an unfunded, nonqualified deferred
compensation plan. The Plan allows an individual Trustee to elect to defer
receipt of all or a percentage of fees which otherwise would be payable for
services performed.
See Note 5 for a summary of fee rates and expenses pursuant to these
agreements.
32
<PAGE>
(4) Investment Securities Transactions
Information with respect to investment securities and security
transactions is as follows:
<TABLE>
<CAPTION>
Michigan
Treasury Tax-Exempt Tax-Exempt
Money Market Government Money Market Money Market Money Market
Fund Fund Fund Fund Fund
------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Purchases .......... $34,681,928,167 $3,976,689,569 $7,424,906,980 $1,715,943,245 $222,384,532
Sales & Maturities . $34,529,084,117 $3,994,052,496 $6,442,551,377 $1,647,237,203 $217,854,981
</TABLE>
(5) Expenses
Following is a summary of total expense rates charged, advisory fee
rates payable to NBD, and amounts paid to NBD, FoM, and Essex pursuant to the
agreements described in Note 3 for the six months ended June 30, 1996. The
rates shown are stated as a percentage of each Fund's average net assets.
<TABLE>
<CAPTION>
Michigan
Treasury Tax-Exempt Tax-Exempt
Money Market Government Money Market Money Market Money Market
Effective Date Fund Fund Fund Fund Fund
- -------------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Expense Rates:
January 1 ....................... 0.52% 0.52% 0.55% 0.53% 0.69%
March 18 ........................ 0.52% 0.54% 0.55% 0.52% 0.70%
May 21 .......................... 0.52% 0.54% 0.55% 0.51% 0.70%
NBD Advisory Fee:
Net Assets---
Up to $1.0 billion .......... 0.45% 0.45% 0.45% 0.45% 0.50%
$1.0 to $2.0 billion ........ 0.425% 0.425% 0.425% 0.425% 0.50%
Over $2.0 billion ........... 0.40% 0.40% 0.40% 0.40% 0.50%
Amounts Paid:
Advisory Fee to NBD ............. $4,179,855 $1,094,699 $2,435,093 $1,410,446 $327,785
Distribution Fee to FoM and Essex $ 101,577 $ 19,572 $ 39,740 $ 24,207 $ 7,736
Other Fees & Out of Pocket
Expenses to NBD .............. $ 280,305 $ 41,096 $ 128,552 $ 62,999 $ 38,150
</TABLE>
33
<PAGE>
(6) Portfolio Composition
Although the Tax-Exempt Money Market Fund has a diversified investment
portfolio, the Fund has investments in excess of 10% of its total investments
in the States of Michigan and Texas. The Michigan Tax-Exempt Money Market Fund
does not have a diversified portfolio since 99% of its investments are within
the State of Michigan. Such concentrations within particular state may subject
the funds more significantly to economic changes occurring within those
states.
(7) Subsequent Event
On or about September 13, 1996, the Woodward Money Market Fund and
Woodward Tax-Exempt Money Market Fund will merge with the Prairie Money
Market Fund, and Prairie Municipal Money Market Fund respectively. Also,
on or about September 13, 1996, the Woodward Treasury Money Market Fund,
Woodward Government Fund and the Prairie U.S. Government Money Market
Fund will all merge into one portfolio. The transaction is intended to
be effected as a tax-free reorganization under the Internal Revenue
Code, so that none of the Funds' shareholders recognize taxable gains
or losses as a result of the reorganization.
34
<PAGE>
THE WOODWARD FUNDS
MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS
The Financial Highlights present a per share analysis of net
investment income and distributions from net investment income for the Money
Market Funds. Additional quantitiative measures expressed in ratio form
analyze important relationships between certain items presented in the
financial statements. These financial highlights have been derived from the
financial statements of the Money Market Funds and other information for the
periods presented.
<TABLE>
<CAPTION>
Money Market Fund
------------------------------------------------------------------------------------------
Six Months
Ended
June 30, 1996 Year ended Year ended Year ended Year ended Year Ended
(Unaudited) Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income ...... $ 0.0249 $ 0.0549 $ 0.0378 $ 0.0281 $ 0.0347 $ 0.0579
Distributions from Net
Investment Income ........ $ (0.0249) $ (0.0549) $ (0.0378) $ (0.0281) $ (0.0347) $ (0.0579)
Net Asset Value at Beginning
and End of Period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return ............... 5.02% 5.63%(a) 3.86% 2.85% 3.58% 5.95%
Ratios to Average Net Assets
Expenses ............... 0.52% 0.51%(a) 0.47% 0.49% 0.52% 0.50%
Net Investment Income .. 4.98% 5.49%(a) 3.78% 2.81% 3.47% 5.79%
Net Assets, End of Period
(in 000's) .............. $1,787,427 $1,639,695 $1,323,040 $1,326,693 $1,095,354 $ 775,521
<CAPTION>
Government Fund
-------------------------------------------------------------------------------------------
Six Months
Ended
June 30, 1996 Year ended Year ended Year ended Year ended Year Ended
(Unaudited) Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income ...... $ 0.0245 $ 0.0544 $ 0.0372 $ 0.0277 $ 0.0357 $ 0.0564
Distributions from Net
Investment Income ........ $ (0.0245) $ (0.0544) $ (0.0372) $ (0.0277) $ (0.0357) $ (0.0564)
Net Asset Value at Beginning
and End of Period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return ............... 4.94% 5.57% 3.77% 2.81% 3.63% 5.79%
Ratios to Average Net Assets
Expenses ............... 0.53% 0.51% 0.51% 0.51% 0.51 0.50%
Net Investment Income .. 4.90% 5.44% 3.72% 2.77% 3.57% 5.64%
Net Assets, End of Period
(in 000's) .............. $ 456,460 $ 474,377 $ 421,208 $ 346,665 $ 261,614 $ 288,369
<FN>
(a) Annualized for periods less than one year for comparability purposes.
Actual annual values may be less than or greater than those shown.
See accompanying notes to financial statements.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
Treasury Money Market Fund
------------------------------------------------------------------------
Six Months Ended
June 30, 1996 Year ended Year ended Year ended
(Unaudited) Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993
---------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Net Investment Income ...... $ 0.0241 $ 0.0539 $ 0.0370 $ 0.0273
Distributions from Net
Investment Income ........ (0.0241) (0.0539) (0.0370) (0.0273)
Net Asset Value at Beginning
and End of Period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return ............... 4.88% 5.53% 3.77% 2.77%
Ratios to Average Net Assets
Expenses ............... 0.55% 0.53% 0.50% 0.50%
Net Investment Income .. 4.82% 5.39% 3.70% 2.73%
Net Assets, End of Period
(in 000's) .............. $ 1,911,112 $ 927,696 $ 785,694 $ 854,873
<CAPTION>
Tax-Exempt Money Market Fund
---------------------------------------------------------------------------------------------
Six Months
Ended
June 30, 1996 Year ended Year ended Year ended Year ended Year ended
(Unaudited) Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income ...... $ 0.0151 $ 0.0335 $ 0.0242 $ 0.0196 $ 0.0264 $ 0.0422
Distributions from Net
Investment Income ........ $ (0.0151) $(0.0335) $(0.0242) $ (0.0196) $ (0.0264) $ (0.0422)
Net Asset Value at Beginning
and End of Period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return ............... 3.04% 3.41% 2.45% 1.98% 2.70% 4.30%
Ratios to Average Net Assets
Expenses ............... 0.53% 0.53% 0.51% 0.51% 0.53% 0.52%
Net Investment Income .. 3.02% 3.35% 2.42% 1.96% 2.64% 4.22%
Net Assets, End of Period
(in 000's) .............. $ 634,497 $564,413 $550,736 $ 498,706 $ 379,431 $ 227,808
<FN>
(a) Annualized for periods less than one year for comparability purposes.
Actual annual values may be less than or greater than those shown.
See accompanying notes to financial statements.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Michigan Tax-Exempt Money Market Fund
--------------------------------------------------------------------------------------------
Six Months
Ended
June 30, 1996 Year ended Year ended Year ended Year ended Year Ended
(Unaudited) Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income .......... $ 0.0145 $ 0.0329 $ 0.0235 $ 0.0181 $ 0.0237 $ 0.0353
Distributions from Net
Investment Income ............ $ (0.0145) $ (0.0329) $(0.0235) $ (0.0181) $ (0.0237) $ (0.0353)
Net Asset Value at Beginning
and End of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return ................... 2.92% 3.32% 2.38% 1.83% 2.40% 3.83%(a)
Ratios to Average Net Assets
Expenses ................... 0.70% 0.69% 0.67% 0.65% 0.64% 0.65%(a)
Net Investment Income ...... 2.90% 3.30% 2.35% 1.81% 2.37% 3.77%(a)
Expenses without fee waiver -- 0.76% 0.75% -- -- --
Net Investment Income
without fee waiver ........ -- 3.23% 2.28% -- -- --
Net Assets, End of Period
(in 000's) ................... $ 126,669 $ 122,057 $ 78,640 $ 52,557 $ 52,960 $ 38,885
<FN>
(a) Annualized for periods less than one year for comparability purposes.
Actual annual values may be less than or greater than those shown.
See accompanying notes to financial statements.
</TABLE>
37
<PAGE>
RESULTS OF SPECIAL SHAREHOLDER MEETING (Unaudited)
On July 10, 1996, July 31, 1996, and August 14, 1996 special meetings of
the shareholders of The Woodward Money Market, Treasury, Tax-Exempt , and MI
Tax-Exempt were held to approve the following proposals.
The shareholders approved these proposals with respect to The Woodward
Money Market, Treasury, Tax-Exempt, and MI Tax-Exempt Funds are as follows:
1. To approve a new investment advisory agreement ("New Advisory
Agreement") between each Trust, NBD Bank ("NBD") and First Chicago
Investment Management Company ("FCIMCO")
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 936,322,650 64,741,343 68,426,239
Treasury 456,504,552 1,952,066 10,925,959
Tax-Exempt 314,896,479 3,313,184 14,976,075
Michigan Tax-Exempt 68,341,861 771,929 5,896,467
</TABLE>
2. To approve a change to the fundamental investment limitations of each
Fund of the Trust with regard to the following:
a) investment in commodities
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 846,320,301 114,850,323 108,319,607
Treasury 428,178,559 21,392,078 19,811,940
Tax-Exempt 306,093,137 7,646,534 19,446,067
Michigan Tax-Exempt 65,621,541 3,178,712 6,210,005
</TABLE>
b) expanded power to borrow
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 881,778,057 108,278,486 79,433,689
Treasury 431,394,226 18,023,528 19,964,823
Tax-Exempt 305,087,260 7,603,266 20,495,212
Michigan Tax-Exempt 65,591,662 3,177,581 6,241,014
</TABLE>
c) issuing senior securities
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 886,505,221 105,126,847 77,858,164
Treasury 433,332,306 16,199,342 19,850,928
Tax-Exempt 308,314,577 5,959,401 18,911,760
Michigan Tax-Exempt 65,357,341 3,441,136 6,211,450
</TABLE>
<PAGE>
3. To approve a change to the fundamental investment policies and
limitations of certain Funds of the Trusts, as follows:
b) to approve the removal of the 20% limitation of AMT paper
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Tax-Exempt 311,152,730 5,536,403 16,496,606
Michigan Tax-Exempt 56,880,035 2,569,689 15,560,533
</TABLE>
c) to approve a change to the fundamental investment limitation
concerning concentration of investments in a particular industry
with respect to the Funds
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 897,055,114 91,845,846 80,589,271
Treasury 428,546,374 12,412,894 28,423,309
Tax-Exempt 310,652,220 5,815,054 16,718,464
Michigan Tax-Exempt 56,146,364 3,020,538 15,843,356
</TABLE>
4. To approve a change of the following fundamental policies and
limitations to non-fundamental policies and limitations:
a) limitation prohibiting investing, with respect to 50% of its
total assets, more than 5% of its assets in the securities of any
one issuer
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Michigan Tax-Exempt 47,637,700 3,459,262 4,716,742
</TABLE>
b) limitation on investment in other investment companies
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 882,003,997 109,442,958 78,043,275
Treasury 442,421,624 15,876,053 11,084,899
Tax-Exempt 305,335,242 10,954,357 16,896,140
Michigan Tax-Exempt 64,907,261 3,543,482 6,559,514
</TABLE>
c) limitation on illiquid securities
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 872,895,499 120,190,299 76,404,432
Treasury 442,576,602 15,998,066 10,807,909
Tax-Exempt 304,764,612 12,010,758 16,410,368
Michigan Tax-Exempt 64,128,485 4,322,180 6,559,592
</TABLE>
d) limitation on purchasing securities on margin
<PAGE>
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 871,631,343 120,611,928 77,246,960
Treasury 442,229,685 16,367,416 10,785,476
Tax-Exempt 305,187,685 11,599,145 16,398,908
Michigan Tax-Exempt 55,291,069 13,126,597 6,592,591
</TABLE>
e) limitation on purchasing securities of companies for the purpose
of exercising control
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 881,736,173 110,883,347 76,870,711
Treasury 442,386,469 16,090,300 10,905,808
Tax-Exempt 304,860,746 11,449,240 16,875,752
Michigan Tax-Exempt 64,325,093 4,117,714 6,567,449
</TABLE>
6. To ratify the appointment of two Trustees to the Board of Trustees of
each Trust.
Elected Trustees Current Trustees
Ms. Marilyn McCoy Mr. Will M. Caldwell
Mr. John P. Gould Dr. Nicholas J. DeGrazia Mr. Donald B. Sutherland
Mr. Julius L. Pallone Mr. Donald L. Tuttle
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 975,166,997 12,929,509 81,393,726
Treasury 457,594,396 407,313 11,380,867
Tax-Exempt 315,275,707 3,309,685 14,600,347
Michigan Tax-Exempt 68,024,518 1,612,984 5,372,756
7. To approve amendments to the Amended and Restated Declaration of
Trust of The Woodward Funds.
</TABLE>
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Treasury 630,328,765 10,247,517 15,262,028
Tax-Exempt 440,413,090 12,038,558 30,729
</TABLE>
8. To transact such other business as may properly come before the
Meetings or any adjournment thereof.
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
Money Market 931,428,940 61,125,006 76,926,285
Treasury 446,428,731 11,471,112 11,482,734
Tax-Exempt 313,969,842 2,357,881 16,858,016
Michigan Tax-Exempt 57,291,162 2,286,358 15,432,737
</TABLE>
<PAGE>
On July 31, 1996 and August 14, 1996 special meetings of the
shareholders of The Woodward Government Fund was held to approve the following
proposals.
The shareholders approved these proposals with respect to The Woodward
Government Fund are as follows:
1. Proposal to approve a Plan of Reorganization and the transactions
contemplated thereby, including the transfer of substantially all of the
assets and liabilities of the Trust's Government Fund to the Trust's Treasury
Money Market Fund (the "Treasury Fund"), in exchange for Class A or Class I
shares, as applicable, of the Treasury Fund, and a liquidating distribution of
such shares so received to shareholders of the Government Fund according to
their respective interests.
Affirmative Against Abstain
378,134,412 422,366 8,299,510
<PAGE>
[ BACK COVER ]
Investment Adviser:
NBD Bank
Detroit, Michigan 48226
Sponsors and Co-Distributors:
First of Michigan Corporation
Detroit, Michigan 48243
Essex National Securities, Inc.
Napa, California 94558
Custodian and Transfer Agent:
NBD Bank
Troy, Michigan 48007-7058
Legal Counsel:
Drinker Biddle & Reath
Philadelphia, Pennsylvania 19107-3496 [ WOODWARD FUNDS LOGO ]
- -------------------------------------------------------------------------------
The Woodward Funds ------------
P.O. Box 7058 BULK RATE
Troy, MI 48007-7058 U.S. POSTAGE
PAID
Detroit, MI
Permit No. 2
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