<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
Cash Management Fund
Treasury Cash Management Fund
Treasury Prime
Cash Management Fund
U.S. Government Securities
Cash Management Fund
Municipal Cash Management Fund
SEMI-ANNUAL REPORT
June 30, 1998
PLEASE READ CAREFULLY: THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
SHARES OF THE TRUST ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED OR OTHERWISE SUPPORTED BY, FIRST CHICAGO NBD CORPORATION OR ITS
AFFILIATES, AND ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY GOVERNMENTAL AGENCY.
INVESTMENT IN THE TRUST INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT EACH FUND WILL BE ABLE TO MAINTAIN A
CONSTANT NET ASSET VALUE OF $1.00 PER SHARE.
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders............................. 1
Statements of Assets and Liabilities............... 3
Statements of Operations........................... 4
Statements of Changes in Net Assets................ 5
Portfolio of Investments........................... 7
Notes to Financial Statements...................... 20
Financial Highlights............................... 28
</TABLE>
INVESTMENT ADVISER
First Chicago NBD Investment Management Company (FCNIMCO)
Three First National Plaza, Chicago, IL 60670
----------------
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
<PAGE>
June 30, 1998
Dear Pegasus Shareholder,
We are pleased to present your Semi-Annual Report for the Pegasus Cash
Management Funds dated June 30, 1998. As of June 30, 1998 the seven-day
annualized SEC yields for the following Pegasus Funds were:
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE
SHARES SHARES
------------- -------
<S> <C> <C>
Cash Management Fund................................... 5.42% 5.17%
Treasury Cash Management Fund.......................... 5.45% 5.20%
Treasury Prime Cash Management Fund.................... 4.87% 4.62%
U.S. Government Securities Cash Management Fund........ 5.52% 5.27%
Municipal Cash Management Fund*........................ 3.41% 3.16%
</TABLE>
This report contains the portfolios and financial statements for the Pegasus
Cash Management Funds. All of the Funds purchase high quality money market
securities in accordance with their investment objectives and respective
management policies.
As of June 30, 1998, the Pegasus Cash Management Fund, the Pegasus Treasury
Cash Management Fund, the Pegasus Treasury Prime Cash Management Fund, the
Pegasus U.S. Government Securities Cash Management Fund and the Municipal Cash
Management Fund were each assigned a "AAAm" rating by Standard & Poor's Rating
Group and a "Aaa" rating by Moody's Investors Service, Inc. These ratings
reflect the Funds' capacity to maintain principal and limit exposure to loss.
These ratings are historical and are based upon the Cash Management Funds'
credit quality, market price exposure and management. They signify that the
Cash Management Funds' safety is excellent and that they have a superior
capacity to maintain a $1.00 net asset value per share.
The investment adviser to the Pegasus Funds, First Chicago NBD Investment
Management Company, brings you the expertise and heritage of an institution
that has been managing money for over 100 years. We thank you for the
confidence you have expressed by investing in the Pegasus Funds. We will
continue to earn your trust by pursuing an investment strategy which seeks to
provide competitive yields while protecting the value of your principal.
LOGO
Deborah Edwards
Managing Director
First Chicago NBD Investment Management Company
*The fund's income may be subject to the federal alternative minimum tax.
<PAGE>
A MESSAGE FROM THE INVESTMENT ADVISER
June 30, 1998
Dear Pegasus Funds Shareholder,
The year has proven both exciting and rewarding thus far:
Both the stock and bond markets continue to provide excellent returns with the
S&P 500* advancing almost 18 percent, the foreign markets, as measured by the
Morgan Stanley EAFE Index**, advancing 16 percent and Lehman Brothers Aggregate
Index*** (bonds) providing a 4% return. We believe the domestic economic
picture remains healthy as does the European outlook. The primary dark cloud
remains the troubled Asian arena. We look for a continued good domestic
environment although we do not expect the market to advance as sharply in the
second half of the year.
The Pegasus Family continues to grow with the recent launch of the Short
Municipal Bond Fund and the launch of an extended index fund in August of this
year. At that time the family will offer 9 equity funds, 10 fixed income funds,
9 money market funds, 3 managed asset funds (balanced funds) as well as a fixed
annuity and a group of variable annuity funds.
In May of this year, the parent of the advisor, First Chicago NBD Corp.,
announced plans to merge with BANC ONE CORPORATION. BANC ONE also has a strong
and proven investment management organization which, when combined with your
adviser, should provide an increased variety of investment options supported by
a stronger, more experienced combined organization. As the merger progresses we
will provide you with more information.
The investment adviser to the Pegasus Funds, First Chicago NBD Investment
Management Company, brings to you the expertise and heritage of an institution
that has been managing money for over 100 years. Our investment philosophy is a
simple one: a disciplined investment approach that seeks above average
performance over time while maintaining average risk.
I would like to thank you for the opportunity to serve your investment needs,
we appreciate that there are few greater trusts than the granting of ones
investments funds to an advisor.
LOGO
George F. Abel
Chief Investment Officer
First Chicago NBD Investment Management Company
* The S&P 500 Index is an unmanaged index generally representative of the
U.S. stock market as a whole.
** The Morgan Stanley EAFE Index is an unmanaged index generally
representative of the foreign equity market as a whole.
*** The Lehman Brothers Aggregate Bond Index is an unmanaged index generally
representative of the bond market as a whole.
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY TREASURY PRIME
CASH CASH CASH U.S. GOVERNMENT MUNICIPAL CASH
MANAGEMENT MANAGEMENT MANAGEMENT SECURITIES CASH MANAGEMENT
FUND FUND FUND MANAGEMENT FUND FUND
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securi-
ties:
At cost $2,114,400,253 $301,014,125 $439,334,900 $1,259,430,533 $419,690,964
- -----------------------------------------------------------------------------------------------------
At amortized cost $2,117,339,931 $309,896,236 $439,716,112 $1,259,645,464 $419,438,267
Cash 676 208 462 500 36,300
Interest receivable 9,582,253 1,801,228 5,117,257 4,635,545 2,296,680
Deferred organization
costs, net 54,225 15,838 24,469 49,950 15,040
Prepaids and other 210,697 22,136 38,445 27,499 18,189
- -----------------------------------------------------------------------------------------------------
TOTAL ASSETS 2,127,187,782 311,735,646 444,896,745 1,264,358,958 421,804,476
- -----------------------------------------------------------------------------------------------------
LIABILITIES:
Accrued investment advi-
sory fees 348,181 57,970 69,039 259,077 71,367
Accrued administration
fees 261,136 43,478 52,168 171,939 53,525
Shareholder service fees
payable (Service
Shares) 678,542 188,479 181,292 260,071 37,168
Accrued custodian fees 3,317 1,409 877 840 402
Dividends payable 8,532,927 1,449,582 1,500,060 5,807,903 1,131,523
Other payable and ac-
crued expenses 9,426 2,302 3,222 80,781 10,136
- -----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 9,833,529 1,743,220 1,806,658 6,580,611 1,304,121
- -----------------------------------------------------------------------------------------------------
NET ASSETS $2,117,354,253 $309,992,426 $443,090,087 $1,257,778,347 $420,500,355
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE AND RE-
DEMPTION PRICE PER
SHARE:
INSTITUTIONAL SHARES:
Net Assets $ 928,341,028 $ 22,868,856 $ 92,324,603 $ 810,685,995 $352,314,800
Capital shares 928,500,029 22,868,856 92,323,956 811,092,142 352,314,800
- -----------------------------------------------------------------------------------------------------
Net asset value and re-
demption price per
share $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
SERVICE SHARES:
Net assets $1,189,013,225 $287,123,570 $350,765,484 $ 447,092,352 $ 68,185,555
Capital shares 1,189,056,122 287,123,570 350,757,019 447,193,168 68,185,555
- -----------------------------------------------------------------------------------------------------
Net asset value and re-
demption price per
share $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital shares
(unlimited number of
shares authorized, par
value $.01 per share) $ 21,175,561 $ 3,099,924 $ 4,430,809 $ 12,582,853 $ 4,205,004
Additional paid-in cap-
ital 2,096,380,592 306,892,502 438,650,166 1,245,702,457 416,295,351
Accumulated
undistributed net
realized gains
(losses) (201,900) -- 9,112 (506,963) --
- -----------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $2,117,354,253 $309,992,426 $443,090,087 $1,257,778,347 $420,500,355
- -----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
Pegasus Funds
3
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY TREASURY PRIME U.S. GOVERNMENT MUNICIPAL
CASH MANAGEMENT CASH MANAGEMENT CASH MANAGEMENT SECURITIES CASH CASH MANAGEMENT
FUND FUND FUND MANAGEMENT FUND FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME $55,390,037 $7,630,824 $8,478,172 $32,398,064 $6,258,664
- --------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee 1,932,803 273,502 323,595 1,106,548 346,324
Administration fees 1,449,603 205,126 242,696 861,304 259,743
Service plan fees
(Service Shares) 1,276,216 331,355 328,348 506,132 69,817
Custodial fees 20,842 183 3,969 4,630 167
Registration and filing
fees 59,533 8,782 11,528 36,727 10,371
Professional fees 35,818 14,406 14,774 25,536 14,720
Amortization of de-
ferred organization
costs 17,195 4,959 12,670 15,928 4,959
Transfer Agent Fee 89,106 3,738 4,336 18,203 4,577
Other expenses 102,055 11,205 22,624 20,707 18,689
Less: Expense reim-
bursements (324,469) (43,271) (69,905) (79,681) (52,111)
- --------------------------------------------------------------------------------------------------------
NET EXPENSES 4,658,702 809,985 894,635 2,516,034 677,256
- --------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $50,731,335 $6,820,839 $7,583,537 $29,882,030 $5,581,408
- --------------------------------------------------------------------------------------------------------
NET REALIZED GAINS ON
INVESTMENTS -- -- 7,371 4,388 --
- --------------------------------------------------------------------------------------------------------
NET INCREASE IN NET AS-
SETS FROM OPERATIONS $50,731,335 $6,820,839 $7,590,908 $29,886,418 $5,581,408
</TABLE>
- --------------------------------------------------------------------------------
See accompanying Notes to Financial Statements.
Pegasus Funds
4
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY
CASH MANAGEMENT
CASH MANAGEMENT FUND FUND
-----------------------------------------------------------------------
Six Months Six Months
Ended Ended
June 30, 1998 Year Ended June 30, 1998 Period Ended
(Unaudited) December 31, 1997 (Unaudited) December 31, 1997(a)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 50,731,335 $ 50,222,489 $ 6,820,839 $ 3,335,785
Net realized gains
(losses) on invest-
ments -- -- -- --
- ------------------------------------------------------------------------------------------------
Net increase in net as-
sets from operations 50,731,335 50,222,489 6,820,839 3,335,785
- ------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARE-
HOLDERS FROM NET IN-
VESTMENT INCOME:
Institutional Shares (24,360,340) (25,209,373) (220,311) (25,600)
Service Shares (26,370,995) (25,013,116) (6,600,528) (3,310,185)
- ------------------------------------------------------------------------------------------------
Total distributions to
shareholders (50,731,335) (50,222,489) (6,820,839) (3,335,785)
- ------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold 6,448,793,600 9,535,537,549 924,102,453 569,961,617
Net asset value of
shares issued in rein-
vestment of distribu-
tions to shareholders 2,319,699 4,462,385 -- --
- ------------------------------------------------------------------------------------------------
6,451,113,299 9,539,999,934 924,102,453 569,961,617
Less: payments for
shares redeemed (6,031,791,884) (8,960,162,558) (820,682,032) (363,389,612)
- ------------------------------------------------------------------------------------------------
Net increase in net as-
sets from capital
share transactions 419,321,415 579,837,376 103,420,421 206,572,005
- ------------------------------------------------------------------------------------------------
NET INCREASE IN NET AS-
SETS 419,321,415 579,837,376 103,420,421 206,572,005
NET ASSETS:
Beginning of period 1,698,032,838 1,118,195,462 206,572,005 --
- ------------------------------------------------------------------------------------------------
End of period $ 2,117,354,253 $ 1,698,032,838 $ 309,992,426 $ 206,572,005
</TABLE>
- --------------------------------------------------------------------------------
(a)For the period from September 12, 1997 (commencement of operations) through
December 31, 1997.
See accompanying Notes to Financial Statements.
Pegasus Funds
5
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY PRIME U.S. GOVERNMENT SECURITIES MUNICIPAL CASH MANAGEMENT
CASH MANAGEMENT FUND CASH MANAGEMENT FUND FUND
------------------------------------------------------------------------------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Period Ended
June 30, 1998 December 31, June 30, 1998 December 31, June 30, 1998 December 31,
(Unaudited) 1997 (Unaudited) 1997 (Unaudited) 1997(b)
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 7,583,537 $ 11,652,050 $ 29,882,030 $ 37,744,030 $ 5,581,408 $ 2,483,210
Net realized gains
(losses) on
investments 7,371 (507) 4,388 4,536 -- --
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets from operations 7,590,908 11,651,543 29,886,418 37,748,566 5,581,408 2,483,210
- --------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM NET
INVESTMENT INCOME:
Institutional Shares (1,485,031) (1,457,277) (19,628,548) (24,156,026) (4,721,874) (1,845,036)
Service Shares (6,098,506) (10,194,773) (10,253,482) (13,588,004) (859,534) (638,174)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders (7,583,537) (11,652,050) (29,882,030) (37,744,030) (5,581,408) (2,483,210)
- --------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold 962,434,225 2,338,002,420 3,646,681,674 5,164,514,378 809,863,158 523,029,206
Net asset value of
shares issued in
reinvestment of
distributions to
shareholders 413,689 395,431 874,240 1,116,975 42,128 13,719
- --------------------------------------------------------------------------------------------------------------------------
962,847,914 2,338,397,851 3,647,555,914 5,165,631,353 809,905,286 523,042,925
Less: payments for
shares redeemed (844,168,160) (2,299,154,786) (3,281,809,475) (4,849,816,940) (647,643,686) (264,804,170)
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net as-
sets from capital
share transactions 118,679,754 39,243,065 365,746,439 315,814,413 162,261,600 258,238,755
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET AS-
SETS 118,687,125 39,242,558 365,750,827 315,818,949 162,261,600 258,238,755
NET ASSETS:
Beginning of period 324,402,962 285,160,404 892,027,520 576,208,571 258,238,755 --
- --------------------------------------------------------------------------------------------------------------------------
End of period $ 443,090,087 $ 324,402,962 $ 1,257,778,347 $ 892,027,520 $ 420,500,355 $ 258,238,755
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(b)For the period from August 18, 1997 (commencement of operations) through
December 31, 1997.
See accompanying Notes to Financial Statements.
Pegasus Funds
6
<PAGE>
PEGASUS CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE AMORTIZED COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ --------------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS -- 7.19%
Lehman Brothers Agency Revolving Repurchase
Agreement, 6.10%, 7/1/98 (secured by various U.S.
Treasury obligations with maturities ranging from
7/1/98 through 5/12/04 at various interest rates
ranging from 0.00% to 9.05%, all held at Chase
Bank.............................................. $56,882,000 $ 56,882,000
Nomura Agency Revolving Repurchase Agreement,
6.00%, 7/1/98 (secured by various U.S. Treasury
Notes with maturities ranging from 2/15/00 through
2/15/08 at various interest rates ranging from
0.00% to 6.25%, all held at The Bank of New York). 36,000,000 36,000,000
Prudential Revolving Repurchase Agreement, 5.45%,
7/1/98 (secured by U.S. Treasury Note with a
maturity of 8/15/01 at an interest rate of 7.875%,
held at The Bank of New York)..................... 7,279,000 7,279,000
Smith Barney Inc., Revolving Repurchase Agreement,
6.10%, 7/1/98%, (secured by U.S. Treasury & Agency
obligations with maturities ranging from 7/7/98
through 4/25/08 at various interest rates ranging
from 0.00% to 9.00%, all held at The Bank of New
York)............................................. 52,200,000 52,200,000
--------------
152,361,000
--------------
COMMERCIAL PAPER -- 38.00%
Apreco, Inc. 5.56%, 7/21/98........................ 25,000,000 24,922,778
Aspen Funding Corp., 6.50%, 7/1/98................. 90,000,000 90,000,000
Banca Serafin S.A., 5.65%, 8/31/98................. 20,000,000 19,808,528
Barton Capital Corp., 5.55%, 7/13/98............... 20,000,000 19,963,000
Bell Atlantic Network Funding Corp., 5.56%, 8/3/98. 18,000,000 17,908,260
Cassie Des Depots ET Cosignations, 6.25%, 7/1/98... 56,000,000 56,000,000
Centric Capital Corporation, 5.54%, 7/30/98........ 20,000,000 19,910,744
Centric Capital Corporation, 5.55%, 7/14/98........ 10,000,000 9,979,958
Charta Corporation, 5.55%, 7/10/98................. 35,000,000 34,951,438
Corporate Receivables Corp., 5.54%, 7/8/98......... 50,000,000 49,946,138
FPL Group Capital, Inc., 6.40%, 7/1/98............. 65,000,000 65,000,000
Glencore Asset Funding Corp., 5.55%, 7/7/98........ 30,871,000 30,842,444
Greenwich Funding Corporation, 5.50%, 7/15/98...... 25,000,000 24,946,528
Harris Trust and Savings Bank, 5.56%, 7/27/98...... 25,000,000 25,000,000
Kitty Hawk Funding Corp., 5.50%, 7/15/98........... 10,138,000 10,116,316
Market Street Funding Corp., 5.55%, 7/16/98........ 35,000,000 34,919,063
Mont Blanc Capital Corp., 5.60%, 7/21/98........... 25,000,000 24,922,222
Oyster Creek Fuel Corp., 5.60%, 7/2/98............. 20,045,000 20,041,882
Province of Quebec, 5.44%, 1/14/99................. 35,000,000 33,958,089
Ranger Funding Corporation, 5.53%, 7/15/98......... 10,000,000 9,978,494
San Paolo Financial Co., 6.25%, 7/1/98............. 90,000,000 90,000,000
</TABLE>
Pegasus Funds
7
<PAGE>
PEGASUS CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE AMORTIZED COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ --------------
<S> <C> <C>
TMI-1 Fuel Corp., 5.55%, 7/9/98,................... $27,498,000 $ 27,464,086
Variable Funding Capital Corp., 6.40%, 7/1/98...... 39,000,000 39,000,000
Windmill Funding Corporation, 5.50%, 7/17/98....... 25,000,000 24,938,889
--------------
804,518,857
--------------
NOTES -- 15.37%
Abbey National Treasury Securities Bank Note,
5.72%, 6/11/9..................................... 25,000,000 24,981,898
Associates Corp. of North America, Senior Note,
6.50%, 9/9/98..................................... 8,000,000 8,008,621
CIT Group Holdings Medium Term Note, 5.875%,
12/15/98.......................................... 20,000,000 20,018,501
General American Life Funding Agreement, 5.93%,
7/31/98........................................... 30,000,000 30,000,000
GE Engine Receivable Trust, VR Note, 5.73%,
2/14/00........................................... 6,877,112 6,877,112
Key Auto Finance, 5.835%, 1/5/99................... 1,153,141 1,153,141
KBL Capital Funding, Series A, V/R, 5/1/27......... 2,935,000 2,935,000
North Jersey Health Care, Inc., V/R, 12/01/27...... 5,110,000 5,110,000
Pennsylvania Economic Devlopment Funding Authority
Revenue, V/R, 8/1/10.............................. 6,200,000 6,200,000
Providian Life and Health Insurance Co., 5.89%,
7/31/98........................................... 35,000,000 35,000,000
Saegertown Co. PA, V/R, 12/1/03.................... 4,815,000 4,815,000
Sigma Finance Medium Term Note, 5.84%, 8/4/98...... 2,000,000 2,000,000
Sigma Finance Medium Term Note, 5.95%, 10/20/98.... 15,000,000 15,000,000
Strats Trust 1998-C, 144A, V/R, 4/13/99............ 35,000,000 34,999,857
SunAmerica Life Insurance Company, 5.82%, 11/19/98. 25,000,000 25,000,000
Travelers Insurance Company, 5.85%, 11/6/98........ 25,000,000 25,000,000
Travelers Insurance Company, 5.75%, 12/11/98....... 25,000,000 25,000,000
Wachovia Bank, Medium Term Note, 5.895%, 10/2/98... 10,000,000 9,998,157
Western and Southern Life Insurance Co., 5.73%,
1/29/03........................................... 25,000,000 25,000,000
Wilmington Trust Co., Series B Amtrak 93-B, V/R,
1/1/13............................................ 18,403,050 18,403,050
--------------
325,500,337
--------------
CERTIFICATES OF DEPOSIT -- 9.44%
Bank of Nova Scotia, 5.65%, 3/23/99................ 20,000,000 19,982,823
Banque National De Paris, 5.65%, 2/26/99........... 20,000,000 19,993,688
Bayerische Landesbank Girozentrale, 5.635%,
3/15/99........................................... 15,000,000 14,992,782
Canadian Imperial Bank of Commerce, 5.65%, 2/4/99.. 25,000,000 25,000,000
Commerzbank AG , 5.89%, 7/9/98..................... 5,000,000 5,000,003
Credit Commercial De France, 5.90%, 9/17/98........ 20,000,000 19,997,957
Credit Suisse First Boston Bank, 5.80%, 6/11/99.... 10,000,000 10,000,000
Morgan Guaranty Trust, 5.80%, 7/28/98.............. 2,000,000 1,999,995
</TABLE>
Pegasus Funds
8
<PAGE>
PEGASUS CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE AMORTIZED COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ --------------
<S> <C> <C>
Norddeutsche Landesbank Girozentrale, 5.9175%,
10/21/98......................................... $ 10,000,000 $ 9,998,460
Royal Bank of Canada, 5.88%, 9/17/98.............. 15,000,000 15,000,920
Societe Generale, 5.945%, 8/28/98................. 3,000,000 2,999,749
Societe Generale, 5.96%, 9/15/98.................. 20,000,000 20,003,510
Swiss Bank Corp., 5.88%, 11/19/98................. 10,000,000 9,999,262
Swiss Bank Corp., 5.74%, 6/11/99.................. 10,000,000 9,994,569
Westpac Banking Corp., 5.73%, 4/16/99............. 15,000,000 14,996,019
--------------
199,959,737
--------------
TIME DEPOSITS -- 30.00%
ABN-Amro Bank N. V., 6.375%, 7/1/98............... 90,000,000 90,000,000
Banco Bilbao Vizcaya, 6.75%, 7/1/98............... 45,000,000 45,000,000
Bank of Tokyo -- Mitsubishi, 6.75%, 7/1/98........ 35,000,000 35,000,000
Cassa Di Risparmio Delle Provincie Lomarde,
6.1875%, 7/1/98.................................. 90,000,000 90,000,000
Deutsche Bank, 6.00%, 7/1/98...................... 90,000,000 90,000,000
First National Bank of Boston, 7/1/98, 6.125%..... 90,000,000 90,000,000
National Australia Bank, 5.8125%, 7/2/98.......... 50,000,000 50,000,000
Norddeutsche Landesbank, 6.25%, 7/1/98............ 80,000,000 80,000,000
Republic National Bank of New York, 6.50%, 7/1/98. 65,000,000 65,000,000
--------------
635,000,000
--------------
TOTAL INVESTMENTS.................................. $2,117,339,931
==============
</TABLE>
V/R -- Variable Rate
Pegasus Funds
9
<PAGE>
PEGASUS TREASURY CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
FACE COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ ---------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS -- 85.40%
Bear Stearns & Co., Inc., Revolving Repurchase
Agreement, 5.90%, 7/1/98 (secured by various U.S.
Treasury Obligations with maturities ranging from
8/15/98 through 5/15/08 at various interest rates
ranging from 0.00% to 8.875%, all held at the
Custodial Trust Company)............................ $75,000,000 $ 75,000,000
Dresdner Inc., Revolving Repurchase Agreement, 5.40%,
7/1/98 (secured by U.S. Treasury Note maturing
9/30/98 at an interest rate of 4.75%, held at Chase
Bank)............................................... 14,000,000 14,000,000
First Union Capital Markets, Revolving Repurchase
Agreement, 6.00%, 7/1/98 (secured by various U.S.
Treasury Notes with maturities ranging from 12/31/98
through 2/15/07 at various interest rates ranging
from 5.75% to 6.25%, all held at the Bankers Trust
Company)............................................ 13,000,000 13,000,000
Goldman Sachs Agency, Revolving Repurchase Agreement,
5.50%, 7/1/98, (secured by U.S. Treasury Note
maturing 5/15/03 at an interest rate at 5.625%, held
at The Bank of New York)............................ 14,000,000 14,000,000
Greenwich Capital Markets, Inc., Revolving Repurchase
Agreement, 5.80%, 7/1/98 (secured by various U.S.
Treasury Obligations with maturities ranging from
8/15/98 through 2/15/08 at an interest rate of
0.00%, all held at Chase Bank)...................... 13,000,000 13,000,000
H.S.B.C. Treasury, Revolving Repurchase Agreement,
5.70%, 7/1/98 (secured by various U.S. Treasury
Notes with maturities ranging from 8/31/98 to
3/31/00 at interest rates ranging from 5.875% to
6.875%, all held at Chase Bank)..................... 14,000,000 14,000,000
Morgan Stanley Government Collateralized, Revolving
Repurchase Agreement, 5.70%, 7/1/98 (secured by U.S.
Treasury Bill with a maturity of 12/10/98 at an
interest rate of 0.00%, held at The Bank of New
York)............................................... 14,000,000 14,000,000
Nationsbank Capital Markets, Inc., Revolving
Repurchase Agreement, 5.90%, 7/1/98 (secured by
various U.S. Treasury Obligations with maturities
ranging from 8/15/03 through 5/15/08, at various
interest rates ranging from 0.00% to 12.00%, all
held at Chase Bank)................................. 75,000,000 75,000,000
Nomura Revolving Repurchase Agreement, 6.00%, 7/1/98
(secured by various U.S. Treasury Obligations with
maturities ranging from 2/15/00 through 2/15/08, at
various interest rates ranging from 0.00% to 6.25%,
all held at the Bank of New York)................... 13,000,000 13,000,000
</TABLE>
Pegasus Funds
10
<PAGE>
PEGASUS TREASURY CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
FACE COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ ---------
<S> <C> <C>
Prudential Revolving Repurchase Agreement, 5.45%,
7/1/98 (secured by U.S. Treasury Note with a
maturity of 8/15/01 at an interest rate of 7.875%,
held at The Bank of New York)....................... $ 5,636,000 $ 5,636,000
Salomon Brothers, Inc., Revolving Repurchase
Agreement, 5.95%, 7/1/98 (secured by various U.S.
Treasury Obligations with maturities ranging from
8/15/98 through 5/15/08, at various interest rates
ranging from 0.00% to 12.00%, all held at Chase
Bank)............................................... 14,000,000 14,000,000
------------
264,636,000
------------
U.S. GOVERNMENT OBLIGATIONS -- 14.60%
U.S. Treasury Notes -- 14.60%
8.875%, 2/15/99..................................... 10,000,000 10,199,842
6.50%, 4/30/99...................................... 10,000,000 10,074,543
6.125%, 08/31/98.................................... 5,000,000 5,003,082
6.00%, 09/30/98..................................... 10,000,000 10,005,492
5.125%, 11/30/98.................................... 10,000,000 9,977,277
------------
45,260,236
------------
TOTAL INVESTMENTS..................................... $309,896,236
============
</TABLE>
See accompanying Notes to Financial Statements.
Pegasus Funds
11
<PAGE>
PEGASUS TREASURY PRIME CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
FACE COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ ---------
<S> <C> <C>
U.S. TREASURY SECURITIES -- 100.00%
U.S. Treasury Bills:
4.85%, 7/2/98........................................ 54,948,000 $ 54,940,653
4.78%, 7/9/98........................................ 35,376,000 35,339,305
5.16%, 7/23/98....................................... 71,980,000 71,766,488
4.91%, 8/6/98........................................ 20,773,000 20,670,381
4.97%, 8/20/98....................................... 5,021,000 4,985,504
4.91%, 9/3/98........................................ 10,000,000 9,912,711
------------
197,615,042
------------
U.S. Treasury Notes:
8.250%, 7/15/98...................................... 42,181,000 42,231,348
5.250%, 7/31/98...................................... 19,672,000 19,673,346
6.250%, 7/31/98...................................... 24,254,000 24,275,650
4.750%, 8/31/98...................................... 26,628,000 23,604,586
6.125%, 8/31/98...................................... 39,938,000 39,986,805
6.000%, 9/30/98...................................... 44,936,000 45,009,968
7.125%, 10/15/98..................................... 14,595,000 14,670,994
5.125%, 11/30/98..................................... 9,737,000 9,725,055
5.125%, 12/31/98..................................... 6,667,000 6,659,786
6.375%, 1/15/99...................................... 5,000,000 5,023,096
6.250%, 3/31/99...................................... 6,722,000 6,757,472
7.000%, 4/15/99...................................... 4,000,000 4,044,643
6.500%, 4/30/99...................................... 435,000 438,321
------------
242,101,070
------------
TOTAL INVESTMENTS...................................... $439,716,112
============
</TABLE>
See accompanying Notes to Financial Statements.
Pegasus Funds
12
<PAGE>
PEGASUS U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ --------------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS -- 67.30%
Barclays Inc., Revolving Repurchase Agreement,
5.50%, 7/1/98 (secured by various U.S. Treasury
Notes with maturities ranging from 6/30/99 through
7/31/00 at various interest rates ranging from
6.125% to 6.75%, all held at The Bank Of New
York)............................................. $30,000,000 $ 30,000,000
Bear Stearns & Co., Inc., Revolving Repurchase
Agreement, 5.90% 7/1/98 (secured by various U.S.
Treasury Obligations with maturities ranging from
8/15/98 through 5/15/08 at various interest rates
ranging from 0.00% to 8.875% all held at the
Custodial Trust Company).......................... 52,000,000 52,000,000
Donaldson Lufkin, Revolving Repurchase Agreement,
5.85%, 7/1/98, (secured by U.S. Treasury and
Agency Obligations with maturities ranging from
11/15/98 to 2/5/08 at various interest rates
ranging from 0.00 to 6.70%, all held at The Bank
of New York)...................................... 55,000,000 55,000,000
First Union Capital Markets, Revolving Repurchase
Agreement, 6.00%, 7/1/98 (secured by various U.S.
Treasury Notes with maturities ranging from
12/31/98 through 2/15/07 at various interest rates
ranging from 5.75% to 6.25%, all held at Bankers
Trust Company).................................... 100,000,000 100,000,000
Greenwich Capital Markets, Inc., Revolving
Repurchase Agreement, 5.80%, 7/1/98 (secured by
various U.S. Treasury Obligations with maturities
ranging from 8/15/98 through 2/15/08 at an
interest rate of 0.00%, all held at Chase Bank)... 49,000,000 49,000,000
H.S.B.C. Treasury, Revolving Repurchase Agreement,
5.70%, 7/1/98 (secured by U.S. Treasury Notes with
maturities ranging from 8/31/98 to 3/31/00 at
interest rates ranging from 5.875% to 6.875%, all
held at Chase Bank)............................... 55,000,000 55,000,000
NationsBank Capital Markets, Inc., Revolving
Repurchase Agreement, 5.90%, 7/1/98 (secured by
various U.S. Treasury Obligations with maturities
ranging from 8/15/03 through 5/15/08, at various
interest rates ranging from 0.00% to 12.00%, all
held at Chase Bank)............................... 27,000,000 27,000,000
Nomura Revolving Repurchase Agreement, 6.00%,
7/1/98 (secured by various U.S. Treasury
Obligations with maturities ranging from 2/15/00
through 2/15/08 at various interest rates ranging
from 0.00% to 6.25%, all held at The Bank of New
York)............................................. 269,000,000 269,000,000
Prudential Revolving Repurchase Agreement, 5.45%,
7/1/98 (secured by U.S. Treasury Note with a
maturity of 8/15/01 at an interest rate of 7.875%,
held at The Bank of New York)..................... 200,000,000 200,000,000
Societe Generale Treasury, Revolving Repurchase
Agreement, 6.00% 7/1/98 (secured by various U.S.
Treasury Obligations with maturities ranging from
7/1/98 through 5/12/04 at various interest rates
ranging from 0.00% to 9.05%, all held at Chase
Bank)............................................. 55,000,000 55,000,000
</TABLE>
Pegasus Funds
13
<PAGE>
PEGASUS U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE AMORTIZED COST
DESCRIPTION AMOUNT (NOTE 2)
----------- ------ --------------
<S> <C> <C>
Smith Barney Inc., Revolving Repurchase Agreement,
6.10%, 7/1/98 (secured by U.S. Treasury and Agency
Obligations with maturities ranging from 7/7/98
through 4/25/08 at various interest rates ranging
from 0.00% to 9.00%, all held at The Bank of New
York)............................................. $20,618,000 $ 20,618,000
--------------
912,618,000
--------------
AGENCY OBLIGATIONS -- 32.70%
Federal Farm Credit Bank Medium Term Note, 5.625%,
08/03/98.......................................... 8,000,000 7,999,663
Federal Farm Credit Bank Note, 5.70%, 09/02/98..... 10,000,000 9,997,897
Federal Home Loan Bank Discount Notes:
07/01/98.......................................... 30,000,000 30,000,000
08/05/98.......................................... 38,315,000 38,112,542
Federal Home Loan Bank:
5.72%, 07/21/98................................... 10,000,000 9,999,807
5.73%, 09/08/98................................... 4,500,000 4,498,958
5.80%, 09/18/98................................... 6,000,000 6,000,432
5.04%, 10/01/98................................... 3,000,000 2,993,567
5.54% VR, 10/20/98................................ 26,000,000 25,997,699
5.30%, 11/18/98................................... 4,400,000 4,389,824
5.71%, 3/4/99..................................... 15,000,000 15,000,000
5.58%, VR, 3/26/99................................ 35,000,000 34,988,436
5.50%, 3/26/99.................................... 25,000,000 24,980,529
5.72%, 5/6/99..................................... 15,000,000 14,994,763
Federal Home Loan Mortgage Corp. 5.605%, 3/12/99... 20,000,000 19,997,216
Federal National Mortgage Assn. Discount Notes:
5.71%, 09/09/98................................... 6,000,000 5,998,493
08/31/98....................................... 31,000,000 30,713,724
Federal National Mortgage Assn. Medium Term Notes:
5.19%, 07/20/98................................... 1,000,000 999,672
4.875%, 10/15/98.................................. 13,450,000 13,413,190
5.23%, 11/25/98................................... 6,005,000 5,990,253
5.37%, 02/26/99................................... 20,000,000 19,969,718
5.63%, 05/05/99................................... 10,000,000 9,989,486
Student Loan Marketing Assn. Medium Term Notes:
5.82%, 09/16/98................................... $10,000,000 $ 10,001,595
--------------
347,027,464
--------------
TOTAL INVESTMENTS................................... $1,259,645,464
==============
</TABLE>
VR = Variable rate security, rate disclosed represents 6/30/98 rate.
Pegasus Funds
14
<PAGE>
PEGASUS MUNICIPAL CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
INTEREST FACE COST
DESCRIPTION RATING* RATE*** AMOUNT (NOTE 2)
----------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C>
ALABAMA -- 1.55%
Decatur Industrial Development,
"AMT", 1/1/27...................... VMIG 1 3.65% $ 900,000 $ 900,000
Stevenson Industrial Development,
6/1/32............................. 4.05% 5,600,000 5,600,000
------------
6,500,000
------------
ALASKA -- 2.38%
City of Valdez, 9/10/98............. VMIG 1 3.60% 10,000,000 10,000,000
------------
ARIZONA -- 0.50%
Maricopa Pollution Central Corp.,
5/1/29............................. 3.80% 2,100,000 2,100,000
------------
DELAWARE -- 0.43%
Delaware State Education "AMT",
8/1/29............................. A1+ 3.65% 1,800,000 1,800,000
------------
DISTRICT OF COLUMBIA -- 0.33%
District of Columbia American Uni-
versity, 10/1/15................... VMIG 1 3.60% 900,000 900,000
District of Columbia General Obliga-
tion, 10/1/07...................... 3.99% 500,000 500,000
------------
1,400,000
------------
FLORIDA -- 7.31%
Florida State Municipal Power, C/P,
8/7/98............................. P1 3.55% 11,500,000 11,500,000
Sarasota County Public Hospital
Florida,10/8/98.................... VMIG 1 3.65% 4,500,000 4,500,000
Sarasota County Public Hospital
Florida,10/8/98.................... VMIG 1 3.65% 4,800,000 4,800,000
St. Lucie Co. Pollution Control Rev-
enue 94A, 9/9/98................... VMIG 1 3.55% 4,850,000 4,850,000
St. Lucie Co. FLA, C/P, 8/13/98..... 3.60% 5,000,000 5,000,000
------------
30,650,000
------------
GEORGIA -- 6.39%
Burke Co. Pollution Control, 7/1/24. Aaa 3.95% 10,000,000 10,000,000
Columbus GA Hospital, 1/1/18........ A1+ 3.60% 8,600,000 8,600,000
Georgia Muni Gas, 11/1/06........... 3.40% 5,200,000 5,200,000
Gwinett Co. Georgia Hospital,
9/1/27............................. 3.55% 3,000,000 3,000,000
------------
26,800,000
------------
ILLINOIS -- 6.47%
Chicago Illinois General Obligation,
2/4/99............................. VMIG 1 3.55% 10,000,000 10,000,000
Chicago Illinois General Obligation,
1/1/99............................. 4.40% 4,000,000 4,017,626
Illinois Health Facilities Authori-
ties Revenue, 1/1/16............... VMIG 1 3.60% 6,100,000 6,100,000
Madison County Revenue Illinois,
3/1/33............................. 3.90% 2,300,000 2,300,000
Southwestern Development Authority
"AMT", 11/1/25..................... 3.90% 4,700,000 4,700,000
------------
27,117,626
------------
</TABLE>
Pegasus Funds
15
<PAGE>
PEGASUS MUNICIPAL CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
INTEREST FACE COST
DESCRIPTION RATING* RATE*** AMOUNT (NOTE 2)
----------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C>
INDIANA -- 3.93%
Indiana DFA Solid Waste, 7/10/98.... VMIG 1 3.60% $ 5,000,000 $ 5,000,000
Jasper County PCR Series B, C/P,
8/13/98............................ P1 3.60% 7,000,000 7,000,000
Whiting Industrial Sewer & Solid
Revenue, 1/1/26.................... 3.90% 4,500,000 4,500,000
------------
16,500,000
------------
IOWA -- 1.45%
Iowa Finance Authority, 6/1/19...... 3.65% 2,200,000 2,200,000
Iowa Finance Authority MF & P,
12/1/17............................ 3.60% 3,900,000 3,900,000
------------
6,100,000
------------
KANSAS -- 3.55%
Butler County Solid Waste, KS "AMT",
8/1/24............................. VMIG 1 4.00% 3,900,000 3,900,000
Clark Co. Pollution Control,
10/15/98........................... VMIG 1 3.70% 11,000,000 11,000,000
------------
14,900,000
------------
LOUISIANA -- 5.38%
Louisiana Public Facilities,
12/1/15............................ P1 4.00% 3,065,000 3,065,000
Plaquiemines Parish "AMT", 5/1/25... P1 3.95% 3,800,000 3,800,000
St. Charles "AMT", 11/1/21.......... 3.90% 15,700,000 15,700,000
------------
22,565,000
------------
MASSACHUSETTS -- 2.58%
Massachusetts St Industrial Finance
Agency, 12/1/06.................... 3.40% 10,800,000 10,800,000
------------
MICHIGAN -- 6.91%
Jackson County Economic Development
"AMT", 6/1/17...................... A1 3.70% 3,300,000 3,300,000
Kent Hospital Financial Authority,
1/15/20............................ VMIG 1 3.65% 2,300,000 2,300,000
Michigan St. Hospital Financial Au-
thority, 11/1/11................... VMIG 1 3.40% 1,900,000 1,900,000
Michigan St. Hospital Financial Au-
thority, 12/1/23................... VMIG 1 3.60% 900,000 900,000
Michigan St. Housing Development Au-
thority, 7/9/98.................... VMIG 1 3.80% 5,000,000 5,000,000
Michigan Underground C/P, 8/10/98... P1 3.70% 6,250,000 6,250,000
Regents of the Univ. of Michigan,
9/9/98............................. A1+ 3.60% 4,200,000 4,200,000
Wayne Charter Co. "AMT", 12/1/16.... VMIG 1 3.50% 300,000 300,000
Wayne Charter Co. "AMT", 12/1/16.... 3.60% 4,850,000 4,850,000
------------
29,000,000
------------
</TABLE>
Pegasus Funds
16
<PAGE>
PEGASUS MUNICIPAL CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
INTEREST FACE COST
DESCRIPTION RATING* RATE*** AMOUNT (NOTE 2)
----------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C>
MINNESOTA -- 4.72%
Hennepin Co. Minnesota Series C,
12/1/02............................ VMIG 1 3.40% $ 5,300,000 $ 5,300,000
Minneapolis Convention Center,
12/1/17............................ NR 3.50% 3,500,000 3,500,000
Minneapolis MN General Obligation,
12/1/07............................ 3.40% 4,900,000 4,900,000
Minnesota St. Higher Education,
11/1/12............................ 3.40% 6,100,000 6,100,000
------------
19,800,000
------------
NEVADA -- 0.48%
Clark County Industrial Revenue
"AMT", 12/1/22..................... A1+ 3.95% 2,000,000 2,000,000
------------
NEW YORK -- 4.05%
New York City Muni Water C/P,
7/10/98............................ VMIG 1 3.90% 10,000,000 10,000,000
New York City Water C/P, 7/15/98.... 3.60% 7,000,000 7,000,000
------------
17,000,000
------------
NORTH CAROLINA -- 1.19%
Mecklenburg County General Obliga-
tion, 2/1/17....................... VMIG 1 3.50% 5,000,000 5,000,000
------------
OHIO -- 0.48%
Ohio St. Air Quality Development Au-
thority C/P, 2/1/99................ 3.65% 2,000,000 2,000,000
------------
OREGON -- 2.79%
Oregon St. Housing & Community Serv-
ices, 5/13/99...................... 3.75% 10,000,000 10,000,000
Port Morrow Environmental Impact
Revenue, "AMT", 12/1/31............ VMIG 1 4.00% 1,700,000 1,700,000
------------
11,700,000
------------
PENNSYLVANIA -- 7.22%
Alleghany County Hospital Develop-
ment Authority, 10/1/21............ VMIG 1 3.60% 6,900,000 6,900,000
Alleghany County IDA, Jewish Federa-
tion, 10/01/25..................... 3.60% 7,700,000 7,700,000
Carbon County IDA PA C/P, 9/9/98.... 3.70% 6,000,000 6,000,000
New Castle Area Hospital Authority,
7/1/26............................. 3.60% 6,890,000 6,890,000
Penn St. Higher Education Facility,
4/1/17............................. 3.60% 2,800,000 2,800,000
------------
30,290,000
------------
PUERTO RICO -- 2.39%
Puerto Rico Commonwealth, 7/30/98... MIG 1 4.50% 10,000,000 10,005,836
------------
SOUTH CAROLINA -- 2.77%
Florence Co. Solid Waste Disposal,
"AMT", 4/1/27...................... A1+ 3.90% 4,000,000 4,000,000
Florence Co. Solid Waste Disposal,
4/1/28............................. 3.90% 7,600,000 7,600,000
------------
11,600,000
------------
</TABLE>
Pegasus Funds
17
<PAGE>
PEGASUS MUNICIPAL CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
INTEREST FACE COST
DESCRIPTION RATING* RATE*** AMOUNT (NOTE 2)
----------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C>
TENNESSEE -- 1.29%
Metropolitan Gov't Nashville
Davison, 11/15/98.................. Aa2 5.13% $ 5,375,000 $ 5,401,315
------------
TEXAS -- 14.42%
Austin Combined Util. Series A, DTD
6/12/98, 7/14/98................... A1+ 3.65% 7,890,000 7,890,000
Austin Util. System, DTD 6/11/98,
9/3/98............................. A1+ 3.65% 9,000,000 9,000,000
Brazos River Authority TX "AMT", DTD
2/12/97, 2/1/32.................... VMIG 1 4.30% 5,600,000 5,600,000
Gulf Coast Waste, 6/1/20............ VMIG 1 3.80% 2,600,000 2,600,000
Gulf Coast, "AMT", 5/1/25........... VMIG 1 4.00% 1,500,000 1,500,000
Gulf Coast, "AMT", 4/1/28........... VMIG 1 3.90% 3,000,000 3,000,000
North Central Methodist, 7/10/98.... VMIG 1 3.40% 900,000 900,000
North Central Methodist Series A,
7/16/98............................ A1+ 3.65% 15,000,000 15,000,000
North Cent Hlth Fac Dev, 12/1/15.... VMIG 1 4.00% 8,700,000 8,700,000
Sabine River Auth PCR, 3/1/26....... VMIG 1 4.30% 3,000,000 3,000,000
South Texas High Ed Au Inc "AMT",
12/1/03............................ VMIG 1 3.55% 3,300,000 3,300,000
------------
60,490,000
------------
UTAH -- 4.78%
Intermountain Power Agency, 9/9/98.. VMIG 1 3.55% 9,800,000 9,800,000
Internmountain Power Agency, Rev,
9/15/98............................ VMIG 1 3.45% 5,000,000 5,000,000
Utah St. School District Financial,
8/15/98............................ Aaa 8.38% 5,225,000 5,253,490
------------
20,053,490
------------
VIRGINIA -- 2.47%
King George Co. IDA. Revenue, "AMT",
3/1/27............................. A1+ 3.95% 3,800,000 3,800,000
Peninsula Ports Auth Rev, 5/1/22.... A1+ 3.90% 2,000,000 2,000,000
Roanoke Indl Dev Auth Rev, 7/1/19... VMIG1 3.50% 4,565,000 4,565,000
------------
10,365,000
------------
WASHINGTON -- .0.53%
Port Seattle Revenue, "AMT", 9/1/22. VMIG 1 3.65% 500,000 500,000
Washington St. Hlth, 2/15/27........ VMIG 1 4.00% 1,700,000 1,700,000
------------
2,200,000
------------
WISCONSIN -- 1.19%
Wisconsin Trans Rev, 8/11/98........ A1+ 3.65% 5,000,000 5,000,000
------------
WYOMING -- 0.07%
Converse Co. "AMT", 11/1/25......... VMIG 1 4.15% 300,000 300,000
------------
TOTAL INVESTMENTS.................... $419,438,267
============
</TABLE>
Pegasus Funds
18
<PAGE>
PEGASUS MUNICIPAL CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
June 30, 1998
- --------------------------------------------------------------------------------
INVESTMENT ABBREVIATIONS
AMBAC-- AMBAC Indemnity Corp.
AMT-- Alternative Minimum Tax
BIGI-- Bond Investors Guaranty Insurance Co.
CP-- Commercial Paper
DFA-- Development Finance Authority
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
* Rating (not covered by the report of independent public accountants) --
Moody's when available, 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 Standard & Poor's.
***Interest rates on variable rate securities are adjusted periodically based
on appropriate indexes. The interest rates shown are the rates in effect at
December 31, 1997. The interest rate for all securities with maturity greater
than thirteen months has an automatic reset feature resulting in an effective
maturity of thirteen months or less.
See accompanying Notes to Financial Statements.
Pegasus Funds
19
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
(1)GENERAL
The Pegasus Funds (Pegasus) was organized as a Massachusetts business trust on
April 21, 1987 and registered under the Investment Company Act of 1940 (the
Act), as amended, as an open-end investment company. As of June 30, 1998,
Pegasus consisted of thirty separate portfolios of which there were five cash
management funds (the Cash Management Funds or the Funds), as described below.
PEGASUS CASH MANAGEMENT FUND
PEGASUS TREASURY CASH MANAGEMENT FUND
PEGASUS TREASURY PRIME CASH MANAGEMENT FUND
PEGASUS U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
PEGASUS MUNICIPAL CASH MANAGEMENT FUND
The Cash Management Fund commenced operations on July 30, 1992, the Treasury
Cash Management Fund commenced operations on September 12, 1997, the Treasury
Prime Cash Management Fund commenced operations on March 22, 1995, the U.S.
Government Securities Cash Management Fund commenced operations on June 2, 1992
and the Municipal Cash Management Fund commenced operations on August 18, 1997.
The Cash Management Funds each offer two classes of shares, Institutional
Shares and Service Shares. Institutional Shares and Service Shares are
substantially the same except that Service Shares are subject to fees payable
under a Distribution and Service Plan adopted pursuant to Rule 12b-1 under the
Act (the Service Plan) at an annual rate of 0.25% of the average daily net
asset value of the outstanding Services Shares.
(2)SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Cash Management 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 income and
expenses during the reporting period. Actual results could differ from those
estimates.
Pegasus Funds
20
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
- --------------------------------------------------------------------------------
Investments
Pursuant to Rule 2a-7 of the Act, the Cash Management 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.
Realized gains and losses from security transactions are recorded on the
identified cost basis.
Pegasus invests in securities subject to repurchase agreements. First Chicago
NBD Investment Management Company (FCNIMCO), acting under the supervision of
the Board of Trustees, has established the following additional policies and
procedures relating to Pegasus' 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 FCNIMCO to assure
its value remains at least equal to 102% of the repurchase agreement amount;
and 3) funds are not disbursed by Pegasus or its agent unless collateral is
presented or acknowledged by the collateral custodian.
The Municipal Cash Management Fund invests 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, as amended (the
Code), and generally accepted accounting principles.
Federal Income Taxes
It is Pegasus' policy to comply with the requirements of Subchapter M of the
Code, 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.
As of December 31, 1997, the Cash Management Funds had capital loss
carryforwards and related expiration dates as follows:
<TABLE>
<CAPTION>
FUND 2001 2002 2003 TOTAL
---- -------- --------- -------- ---------
<S> <C> <C> <C> <C>
U.S. Government Securities
Cash Management Fund......... $ -- $453,000 $58,000 $511,000
Cash Management Fund.......... 19,000 151,000 32,000 202,000
</TABLE>
Pegasus Funds
21
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
- --------------------------------------------------------------------------------
Shareholder Dividends
On each business day except those holidays the New York Stock Exchange
(Exchange), FCNIMCO 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. Distributions from net realized
capital gains, if any, are normally declared and paid annually, but each Fund
may make distributions on a more frequent basis to comply with the distribution
requirements of the Code. To the extent that net realized capital gains can be
offset by capital loss carryforwards, it is the policy of each Fund not to
distribute such gains.
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 portfolio.
Expenses
Expenses directly attributable to a Cash Management Fund are charged to that
Cash Management Fund's operations; expenses which are applicable to all Cash
Management Funds are allocated among them on the basis of relative net assets.
Fund expenses directly attributable to a class of shares are charged to that
class; expenses which are applicable to all classes are allocated among them.
Pegasus 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.
(3)CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Cash Management Funds are summarized below (at
$1.00 per share):
<TABLE>
<CAPTION>
CASH MANAGEMENT FUND
-------------------------------
Six Months Ended
June 30, 1998 Year Ended
(Unaudited) Dec. 31, 1997
---------------- --------------
<S> <C> <C>
Institutional Shares:
Shares issued........................... 3,878,101,885 6,087,058,701
Dividends reinvested.................... 2,319,221 4,462,385
Shares redeemed......................... (3,657,349,639) (6,272,197,824)
-------------- --------------
Net increase (decrease)................. 223,071,467 (180,676,738)
============== ==============
Service Shares:
Shares issued........................... 2,570,691,715 3,448,478,848
Dividends reinvested.................... 478 --
Shares redeemed......................... (2,374,442,245) (2,687,964,734)
-------------- --------------
Net increase............................ 196,249,948 760,514,114
============== ==============
Net increase in Fund..................... 419,321,415 579,837,376
============== ==============
</TABLE>
Pegasus Funds
22
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY CASH MANAGEMENT FUND
--------------------------------------
Six Months Ended
June 30, 1998 Period Ended
(Unaudited) Dec. 31, 1997(a)
----------------- ------------------
<S> <C> <C>
Institutional Shares:
Shares issued................... 26,735,570 6,838,921
Dividends reinvested............ -- --
Shares redeemed................. (4,716,864) (5,988,771)
---------------- ------------------
Net increase.................... 22,018,706 850,150
================ ==================
Service Shares:
Shares issued................... 897,366,883 563,122,696
Dividends reinvested............ -- --
Shares redeemed................. (815,965,168) (357,400,841)
---------------- ------------------
Net increase.................... 81,401,715 205,721,855
================ ==================
Net increase in Fund............. 103,420,421 206,572,005
================ ==================
<CAPTION>
TREASURY PRIME CASH MANAGEMENT FUND
--------------------------------------
Six Months Ended
June 30, 1998 Year Ended
(Unaudited) Dec. 31, 1997
----------------- ------------------
<S> <C> <C>
Institutional Shares:
Shares issued................... 220,718,447 686,151,852
Dividends reinvested............ 342,216 345,903
Shares redeemed................. (219,550,915) (665,804,296)
---------------- ------------------
Net increase.................... 1,509,748 20,693,459
================ ==================
Service Shares:
Shares issued................... 741,715,778 1,651,850,568
Dividends reinvested............ 71,473 49,528
Shares redeemed................. (624,617,245) (1,633,350,490)
---------------- ------------------
Net increase.................... 117,170,006 18,549,606
================ ==================
Net increase in Fund............. 118,679,754 39,243,065
================ ==================
</TABLE>
- --------
(a) For the period from September 12, 1997 (commencement of operations) through
December 31, 1997.
Pegasus Funds
23
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES
CASH MANAGEMENT FUND
---------------------------------
Six Months Ended
June 30, 1998 Year Ended
(Unaudited) Dec. 31, 1997
---------------- ----------------
<S> <C> <C>
Institutional Shares:
Shares issued.......................... 2,425,284,745 3,117,508,597
Dividends reinvested................... 806,549 1,026,989
Shares redeemed........................ (2,149,772,985) (2,953,336,804)
-------------- --------------
Net increase........................... 276,318,309 165,198,782
============== ==============
Service Shares:
Shares issued.......................... 1,221,396,929 2,047,005,781
Dividends reinvested................... 67,691 89,986
Shares redeemed........................ (1,132,036,490) (1,896,480,136)
-------------- --------------
Net increase........................... 89,428,130 150,615,631
============== ==============
Net increase in Fund.................... 365,746,439 315,814,413
============== ==============
<CAPTION>
MUNICIPAL CASH MANAGEMENT FUND
---------------------------------
Six Month Ended
June 30, 1998 Period Ended
(Unaudited) Dec. 31, 1997(b)
---------------- ----------------
<S> <C> <C>
Institutional Shares:
Shares issued.......................... 591,490,629 322,413,470
Dividends reinvested................... 42,128 13,719
Shares redeemed........................ (440,922,782) (120,722,364)
-------------- --------------
Net increase........................... 150,609,975 201,704,825
============== ==============
Service Shares:
Shares issued.......................... 218,372,529 200,615,736
Dividends reinvested................... -- --
Shares redeemed........................ (206,720,904) (144,081,806)
-------------- --------------
Net increase........................... 11,651,625 56,533,930
============== ==============
Net increase in Fund.................... 162,261,600 258,238,755
============== ==============
</TABLE>
- --------------
(b)For the period from August 18, 1997 (commencement of operations) through
December 31, 1997.
(4)MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Pegasus has an Investment Advisory Agreement with FCNIMCO pursuant to which
FCNIMCO has agreed to provide the day-to-day management of each Cash Management
Fund for an advisory fee at a annual rate of 0.20% of each Cash Management
Fund's average daily net assets.
Pegasus Funds
24
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
- --------------------------------------------------------------------------------
Pegasus has entered into a Co-Administration Agreement with FCNIMCO and BISYS
Fund Services (BISYS) (collectively the Co-Administrators) pursuant to which
the Co-Administrators have agreed to assist in all aspects of each Cash
Management Fund's operations for an administration fee at an annual rate of
0.15% of each Cash Management Fund's average daily net assets.
For the period ended June 30, 1998, FCNIMCO agreed to limit each Cash
Management Fund's expenses to an annual amount not to exceed 0.35% of average
daily net assets for Institutional Shares and 0.60% of average daily net assets
for Service Shares. As a result, the Cash Management Fund, Treasury Cash
Management Fund, Treasury Prime Cash Management Fund, U.S. Government
Securities Cash Management Fund and the Municipal Cash Management Fund were
reimbursed for expenses of $324,469, $43,271, $69,905, $79,681, and $52,111,
respectively.
Pegasus has adopted a Distribution and Services Plan pursuant to Rule 12b-1
under the Act. Under the terms of such Plan, each Fund pays BISYS, the
Distributor, an annual fee of 0.25% of the average daily net assets of the
outstanding Service Shares for advertising, marketing, and distributing each
Cash Management Fund's Service Shares and for the provision of certain services
to the holders of Service Shares. The Distributor may make payments to others,
including FCNIMCO, First Chicago NBD (FCNBD) and their affiliates, for the
provision of these services. For the period ended June 30, 1998, the Cash
Management Fund, the Treasury Cash Management Fund, the Treasury Prime Cash
Management Fund, the U.S. Government Securities Cash Management Fund and the
Municipal Cash Management Fund paid fees under the Service Plan in the amount
of $1,276,216, $331,355, $328,348, $506,132, and $69,817, respectively.
NBD Bank (an affiliate of FCNIMCO) is also compensated for its services as
Pegasus' custodian, and is reimbursed for certain out of pocket expenses
incurred on behalf of Pegasus.
Pegasus maintains 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.
On April 10, 1998, First Chicago NBD Investment Management Company's parent
company, First Chicago NBD Corporation, entered into an agreement and plan of
merger with BANC ONE CORPORATION pursuant to which First Chicago NBD
Corporation will merge with and into BANC ONE CORPORATION. The merger is
conditioned upon, among other things, approval by holders of a majority of the
BANC ONE CORPORATION common stock, approval by holders of a majority of the
First Chicago NBD Corporation common stock, and receipt of certain regulatory
and governmental approvals.
(5)ILLIQUID SECURITIES
The Pegasus Cash Management Funds may invest not more than 10% of the value of
their respective net assets in securities that are illiquid. Illiquid
investments may include securities having legal or contractual restrictions on
resale or no readily available market. At June 30, 1998, the Pegasus Cash
Management Fund
Pegasus Funds
25
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
- --------------------------------------------------------------------------------
owned the following restricted securities (constituting 2.4% of net assets)
which may not be publicly sold without registration under the Securities Act of
1933 (the 1933 Act). The Fund does not have the right to demand that such
securities be registered. The value of these securities is determined by
valuations supplied by a pricing service or brokers or, if not available, in
good faith by or at the direction of the Trustees. Certain of these securities
may be offered and sold to "qualified institutional buyers" under Rule 144A of
the 1933 Act.
<TABLE>
<CAPTION>
ACQUISITION PAR VALUE PER 6/30/98 PERCENTAGE OF
SECURITY DATE VALUE UNIT VALUE NET ASSETS COST
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SunAmerica Life Insur-
ance Company........... 11/19/97 $25,000,000 $1.00 $25,000,000 1.2% $25,000,000
Travelers Insurance Com-
pany................... 11/6/97 25,000,000 1.00 25,000,000 1.2 25,000,000
- -------------------------------------------------------------------------------------------------
$50,000,000 2.4% $50,000,000
- -------------------------------------------------------------------------------------------------
</TABLE>
(6)PORTFOLIO COMPOSITION
Although the Municipal Cash Management Fund has a diversified investment
portfolio, the fund has investments in excess of 10% of its total investments
in the State of Texas.
Pegasus Funds
26
<PAGE>
[INTENTIONALLY LEFT BLANK]
Pegasus Funds
27
<PAGE>
PEGASUS CASH MANAGEMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
The Financial Highlights present a per share analysis of net investment income
and distributions from net investment income for the Cash Management Funds.
Additional quantitative 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 Cash Management Funds and other information for the periods presented.
<TABLE>
<CAPTION>
NET REALIZED DISTRIBUTIONS INCREASE DUE TO CAPITAL
NET ASSET VALUE NET GAINS TOTAL FROM FROM NET CONTRIBUTION FROM AN
BEGINNING OF INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT AFFILIATE OF THE TOTAL
PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENT ADVISER DISTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited) 0.9997 0.0264 0.0001 0.0265 (0.0264) -- (0.0264)
1997 0.9998 0.0528 (0.0001) 0.0527 (0.0528) -- (0.0528)
1996 0.9996 0.0508 0.0002 0.0510 (0.0508) -- (0.0508)
1995(/5/) 0.9994 0.0277 0.0002 0.0279 (0.0277) -- (0.0277)
1995(/6/)(/1//1/) 0.9993 0.0507 (0.0059) 0.0448 (0.0507) 0.0060 (0.0507)
1994(/1//1/) 0.9999 0.0333 (0.0006) 0.0327 (0.0333) -- (0.0333)
1993(/7/) 1.0000 0.0297 (0.0001) 0.0296 (0.0297) -- (0.0297)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited) 0.9999 0.0252 -- 0.0252 (0.0252) -- (0.0252)
1997 0.9998 0.0503 0.0001 0.0504 (0.0503) -- (0.0503)
1996 0.9996 0.0484 0.0002 0.0486 (0.0484) -- (0.0484)
1995(/5/) 0.9994 0.0264 0.0002 0.0266 (0.0264) -- (0.0264)
1995(/8/) 1.0000 0.0245 (0.0006) 0.0239 (0.0245) -- (0.0245)
- ---------------------------------------------------------------------------------------------------------------------------------
TREASURY CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
06/30/98 (Unaudited) 1.0000 0.0259 -- 0.0259 (0.0259) -- (0.0259)
1997(/1//0/) 1.0000 0.0159 -- 0.0159 (0.0159) -- (0.0159)
SERVICE SHARES
For the period ended
06/30/98 (Unaudited) 1.0000 0.0247 -- 0.0247 (0.0247) -- (0.0247)
1997(/1//0/) 1.0000 0.0152 -- 0.0152 (0.0152) -- (0.0152)
- ---------------------------------------------------------------------------------------------------------------------------------
TREASURY PRIME CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited) 0.9999 0.0243 0.0001 0.0244 (0.0243) -- (0.0243)
1997 0.9999 0.0479 -- 0.0479 (0.0479) -- (0.0479)
1996 1.0000 0.0474 (0.0001) 0.0473 (0.0474) -- (0.0474)
1995(/4/) 1.0000 0.0399 -- 0.0399 (0.0399) -- (0.0399)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited) 1.0000 0.0230 -- 0.0230 (0.0230) -- (0.0230)
1997 1.0000 0.0454 -- 0.0454 (0.0454) -- (0.0454)
1996 1.0000 0.0449 -- 0.0449 (0.0449) -- (0.0449)
1995(/4/) 1.0000 0.0380 -- 0.0380 (0.0380) -- (0.0380)
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited) 0.9992 0.0261 0.0002 0.0263 (0.0261) -- (0.0261)
1997 0.9988 0.0521 0.0004 0.0525 (0.0521) -- (0.0521)
1996 0.9990 0.0502 (0.0002) 0.0500 (0.0502) -- (0.0502)
1995(/1/) 0.9989 0.0320 0.0001 0.0321 (0.0320) -- (0.0320)
1995(/1//2/) 0.9999 0.0492 (0.0010) 0.0482 (0.0492) -- (0.0492)
1994(/1//2/) 1.0000 0.0302 (0.0001) 0.0301 (0.0302) -- (0.0302)
1993(/2/) 1.0000 0.0319 -- 0.0319 (0.0319) -- (0.0319)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited) 0.9997 0.0249 -- 0.0249 (0.0249) -- (0.0249)
1997 0.9995 0.0496 0.0002 0.0498 (0.0496) -- (0.0496)
1996 0.9990 0.0478 0.0005 0.0483 (0.0478) -- (0.0478)
1995(/1/) 0.9989 0.0305 0.0001 0.0306 (0.0305) -- (0.0305)
1995(/3/) 1.0000 0.0199 (0.0011) 0.0188 (0.0199) -- (0.0199)
- ---------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited) 1.0000 0.0161 -- 0.0161 (0.0161) -- (0.0161)
1997(/9/) 1.0000 0.0125 -- 0.0125 (0.0125) -- (0.0125)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited) 1.0000 0.0149 -- 0.0149 (0.0149) -- (0.0149)
1997(/9/) 1.0000 0.0116 -- 0.0116 (0.0116) -- (0.0116)
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited)
1997
1996
1995(/5/)
1995(/6/)(/1//1/)
1994(/1//1/)
1993(/7/)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited)
1997
1996
1995(/5/)
1995(/8/)
- ---------------------------------------------------------------------------------------------------------------------------------
TREASURY CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
06/30/98 (Unaudited)
1997(/1//0/)
SERVICE SHARES
For the period ended
06/30/98 (Unaudited)
1997(/1//0/)
- ---------------------------------------------------------------------------------------------------------------------------------
TREASURY PRIME CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited)
1997
1996
1995(/4/)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited)
1997
1996
1995(/4/)
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited)
1997
1996
1995(/1/)
1995(/1//2/)
1994(/1//2/)
1993(/2/)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited)
1997
1996
1995(/1/)
1995(/3/)
- ---------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL CASH MANAGEMENT FUND
INSTITUTIONAL SHARES
For the period ended
6/30/98 (Unaudited)
1997(/9/)
SERVICE SHARES
For the period ended
6/30/98 (Unaudited)
1997(/9/)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
Pegasus Funds
28
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS RATIO OF RATIO OF NET RATIO OF EXPENSES TO
NET ASSET END OF EXPENSES TO INVESTMENT INCOME AVERAGE NET ASSETS
VALUE END TOTAL PERIOD AVERAGE NET TO AVERAGE (EXCLUDING FEE WAIVERS
OF PERIOD RETURN (000) ASSETS NET ASSETS AND REIMBURSEMENTS)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0.9998 5.36%+ $ 928,341 0.35%+ 5.29%+ 0.38%+
0.9997 5.41% $ 705,270 0.35% 5.36% 0.38%
0.9998 5.23% $ 885,946 0.35% 5.19% 0.42%
0.9996 2.80%++ $ 389,127 0.35%+ 5.51%+ 0.43%+
0.9994 5.19%(/6/) $ 319,214 0.35% 5.11% 0.44%
0.9993 3.38% $ 143,820 0.31% 3.33% 0.43%
0.9999 3.25%+ $ 175,713 0.05%+ 3.19%+ 0.56%+
0.9999 5.10%+ $1,189,013 0.60%+ 5.04%+ 0.63%+
0.9999 5.15% $ 992,763 0.60% 5.11% 0.63%
0.9998 4.98% $ 232,249 0.60% 4.94% 0.67%
0.9996 2.68%++ $ 121,750 0.60%+ 5.25%+ 0.69%+
0.9994 2.47%++ $ 11,372 0.60%+ 5.46%+ 0.71%+
- -------------------------------------------------------------------------------------
1.0000 5.24%+ $ 22,869 0.35%+ 5.22%+ 0.38%+
1.0000 5.29%+ $ 850 0.35%+ 5.28%+ 0.41%+
1.0000 5.00%+ $ 287,124 0.60%+ 4.97%+ 0.63%+
1.0000 5.04%+ $ 205,722 0.60%+ 5.03%+ 0.66%+
- -------------------------------------------------------------------------------------
1.0000 4.92%+ $ 92,325 0.35%+ 4.85%+ 0.39%+
0.9999 4.90% $ 90,813 0.35% 4.79% 0.40%
0.9999 4.86% $ 70,120 0.35% 4.84% 0.46%
1.0000 4.06%++ $ 14,008 0.35%+ 5.16%+ 1.23%+
1.0000 4.66%+ $ 350,765 0.60%+ 4.60%+ 0.64%+
1.0000 4.64% $ 233,590 0.60% 4.54% 0.65%
1.0000 4.60% $ 215,040 0.60% 4.59% 0.71%
1.0000 3.86%++ $ 130,559 0.60%+ 4.72%+ 0.74%+
- -------------------------------------------------------------------------------------
0.9994 5.30%+ $ 810,686 0.35%+ 5.23%+ 0.36%+
0.9992 5.34% $ 534,364 0.35% 5.27% 0.36%
0.9969 5.15% $ 369,163 0.35% 5.09% 0.43%
0.9990 3.24%++ $ 489,395 0.35%+ 5.46%+ 0.42%+
0.9989 5.03% $ 475,248 0.34% 4.94% 0.41%
0.9999 3.06% $ 413,634 0.30% 3.02% 0.41%
1.0000 3.25%+ $ 264,527 0.02%+ 3.10%+ 0.49%+
0.9997 5.04%+ $ 447.092 0.60%+ 4.98%+ 0.61%+
0.9997 5.08% $ 357,663 0.60% 5.02% 0.61%
0.9995 4.89% $ 207,046 0.60% 4.84% 0.68%
0.9990 3.09%++ $ 56,000 0.60%+ 5.17%+ 0.69%+
0.9989 2.01%++ $ 16,702 0.57%+ 5.48%+ 0.66%+
- -------------------------------------------------------------------------------------
1.0000 3.26%+ $ 352,315 0.35%+ 3.24%+ 0.38%+
1.0000 3.39%+ $ 201,705 0.35%+ 3.37%+ 0.41%+
1.0000 3.00%+ $ 68,186 0.60%+ 2.99%+ 0.63%+
1.0000 3.14%+ $ 56,534 0.60%+ 3.12%+ 0.66%+
- -------------------------------------------------------------------------------------
</TABLE>
Pegasus Funds
29
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
(/1/For)the period June 1, 1995 through December 31, 1995. Effective June 1,
1995, the Fund changed its fiscal year end from May 31 to December 31.
(/2/)For the period June 2, 1992 (commencement of operations) through May 31,
1993.
(/3/)For the period January 17, 1995 (initial offering date of Service Shares)
through May 31, 1995.
(/4/)For the period March 22, 1995 (commencement of operations) through
December 31, 1995.
(/5/For)the period July 1, 1995 through December 31, 1995. Effective July 1,
1995 the Fund changed its fiscal year end from June 30 to December 31.
(/6/If)the Fund had not a capital contribution by an Affiliate of the
Investment Adviser during the period, the total return would have been
4.51%.
(/7/)For the period July 30, 1992 (commencement of operations) through June 30,
1993.
(/8/)For the period January 17, 1995 (initial offering date of Service Shares)
through June 30, 1995.
(/9/)For the period August 18, 1997 (commencement of operations) through
December 31, 1997.
(/1//0/)For the period September 12, 1997 (commencement of operations) through
December 31, 1997.
(/1//1/)For the year ended June 30.
(/1//2/)For the year ended May 31.
+Annualized.
++Not Annualized.
Pegasus Funds
30
<PAGE>
PEG-0059-0898
