EVERGREEN
INSTITUTIONAL
MONEY MARKET
FUNDS
1997 SEMI-ANNUAL REPORT
(Evergreen Tree Logo Appears Here)
Since 1932
<PAGE>
EVERGREEN
(Evergreen Icon Appears Here)---------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Evergreen Institutional Money Market Fund Report..... 1
Evergreen Institutional Tax Exempt Money Market Fund
Report............................................. 2
Evergreen Institutional Treasury Money Market Fund
Report............................................. 3
Financial Highlights
EVERGREEN INSTITUTIONAL MONEY
MARKET FUND..................................... 4
EVERGREEN INSTITUTIONAL TAX EXEMPT MONEY MARKET
FUND............................................ 5
EVERGREEN INSTITUTIONAL TREASURY MONEY MARKET
FUND............................................ 6
Schedules of Investments
EVERGREEN INSTITUTIONAL MONEY
MARKET FUND..................................... 7
EVERGREEN INSTITUTIONAL TAX EXEMPT MONEY MARKET
FUND............................................ 10
EVERGREEN INSTITUTIONAL TREASURY MONEY MARKET
FUND............................................ 15
Statements of Assets and Liabilities................. 17
Statements of Operations............................. 18
Statements of Changes in Net Assets.................. 19
Combined Notes to Financial Statements............... 21
</TABLE>
ABOUT EVERGREEN KEYSTONE
Since 1971, the Evergreen Funds have been providing investors with a proven,
value-driven approach to equity investment management. For over 60 years of
changing economic conditions, Keystone has taken pride in helping investors meet
their financial goals through a broad range of financial products and services.
Combined, Evergreen Keystone offers over 70 funds designed to meet a broad range
of objectives, including fixed-income, balanced, growth and income, and
aggressive growth. Assets under management total more than $30 billion.
<PAGE>
EVERGREEN
INSTITUTIONAL MONEY MARKET FUND
- ----------------------------------------------------(Evergreen Icon Goes Here)
MANAGEMENT REPORT
August 1997
Dear Fellow Shareholders:
We are pleased to report on the Evergreen Institutional Money Market Fund for
the six-month period ending August 31, 1997.
PERFORMANCE
Institutional Shares returned 2.80% for the six-month period and Institutional
Service Shares returned 2.67% for the six-month period.
ECONOMIC AND INTEREST RATE ENVIRONMENT
After more than six years of steady expansion, the U.S. economy continued its
strong performance. Unemployment neared 24-year lows, Gross Domestic Product
continued to grow, and consumer confidence soared. The fact that inflation
remained low, despite exceptional growth and low unemployment, was impressive.
This near-perfect environment was interrupted briefly in March when Federal
Reserve Board Chairman, Alan Greenspan recommended a Fed-induced interest rate
hike to curb potential inflationary pressure. The Federal Reserve Board
responded to inflationary fears on March 25 by increasing the Fed Funds rate 25
basis points, from 5.25% to 5.50%. Subsequently, the economy continued its
healthy, non-inflationary pace of growth, allowing the Fed to leave interest
rates unchanged during the ensuing five months.
Despite only one instance of Fed intervention, rates experienced volatility
throughout the March-through-August period. Interest rates jumped in March, in
anticipation of the Fed-induced rate hike, and then declined by 56 basis points
over the next two months. As measured by the three-month Treasury Bill, interest
rates bottomed out at 4.84% on June 2, then climbed steadily before closing at
5.22% on August 29.
PORTFOLIO COMPOSITION AND STRATEGY
As of August 31, the portfolio was comprised of approximately 18.5% corporates,
23.0% floating rate notes, 58.5% commercial paper and other money market
equivalents.
The portfolio maintained a longer maturity structure throughout most of the
six-month period, and ended the period with a weighted average maturity of 72
days. An extended maturity structure generally enhances performance during
periods of steady, or falling, interest rates. Due primarily to moderate
economic growth and contained inflation, we anticipated an environment which
would allow interest rates to maintain their low levels.
Consistent with our analysis and despite intermittent volatility, interest rates
ended the period almost precisely where they began. Consequently, our strategy
proved timely as the portfolio's maturity structure aided performance during the
six-month period in which interest rates remained essentially unchanged.
OUTLOOK
The Fund's objective continues to be to achieve as high a level of current
income as is consistent with preserving capital and providing liquidity. We feel
the Fund's longer average maturity should continue to benefit the portfolio in
the coming months.
Going forward, any dips in the market will be viewed as opportunities to buy and
to extend the portfolio's average maturity. If interest rates increase in the
coming months, the Fund's exposure to higher-yielding instruments will be
increased accordingly.
Thank you for your investment in the Evergreen Institutional Money Market Fund.
<TABLE>
<S> <C>
Sincerely,
/s/ KELLIE ALLEN
KELLIE ALLEN (Photo of Kellie Allen Goes Here)
VICE PRESIDENT,
FIXED INCOME PORTFOLIO MANAGER
</TABLE>
AN INVESTMENT IN THE FUND IS NEITHER INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NAV OF $1.00 PER SHARE.
1
<PAGE>
EVERGREEN
INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
(Evergreen Icon Appears Here)---------------------------------------------------
MANAGEMENT REPORT
August 1997
Dear Fellow Shareholders:
We are pleased to report on the Evergreen Institutional Tax-Exempt Money Market
Fund for the six-month period ending August 31, 1997.
PERFORMANCE
Institutional Shares returned 1.83% for the six-month period and Institutional
Service Shares returned 1.70% for the six-month period.
ECONOMIC AND INTEREST RATE ENVIRONMENT
After more than six years of steady expansion, the U.S. economy continued its
strong performance. Unemployment neared 24-year lows, Gross Domestic Product
continued to grow, and consumer confidence soared. The fact that inflation
remained low, despite exceptional growth and low unemployment, was impressive.
On March 25, the Federal Reserve Board responded to exceptionally strong
economic growth by increasing the Fed Funds rate 25 basis points, from 5.25% to
5.50%. Currently, the consensus within the market is that the Fed is likely to
leave rates unchanged, at least until year end. Technological advances,
globalization and deregulation have created an economic environment which has
contained inflation, allowing prices to remain stable, or even decline, while
productivity continues to rise.
Despite only one instance of Fed intervention, rates experienced volatility
throughout the March-through-August period. The yield on tax-exempt notes
maturing on June 30 was approximately 3.75% after the Federal Reserve Board
raised key short-term interest rates in late March. Following the Fed-induced
rate hike, a twenty basis point correction transpired by the end of May,
resulting in the yield rising to 3.95%.
MARKET ACTIVITY
Within the market, weekly variable rate demand notes ("floaters") have been
relatively attractive because of the scarcity of money in the market and an
increase in the supply of derivative floaters. Due primarily to the lack of
yield spread between floaters and notes, we currently see no reason to extend
the Fund's average maturity.
The note market, conversely, was rather static during July as a result of heavy
supply preparing to enter the market in August. Large cash outflows from a
soaring stock market and concerns over the repeal of the 2% DE MINIMUS corporate
tax provision were two other factors contributing to inactivity in the note
market.
PORTFOLIO COMPOSITION AND STRATEGY
Cash flows into the Fund rose during the March-through-August period. Over the
past two months alone, net assets grew over 22%, and currently stand at
approximately $362 million. As of August 31, the Fund was comprised of 73%
floaters, 12% cash equivalents, 8% notes, 6% bonds and 1% commercial paper.
The Fund's objective continues to be to achieve current income, stability of
principal and liquidity. We will seek to increase the Fund's yield by monitoring
the attractiveness of available tax-exempt instruments. Going forward, we will
look for opportunities to extend average maturity should our market analysis
deem it necessary.
Thank you for your investment in the Evergreen Institutional Tax Exempt Money
Market Fund.
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<S> <C>
Sincerely,
/s/ RICHARD K. MARRONE
RICHARD K. MARRONE
VICE PRESIDENT, (Photo of Richard K. Marrone Goes Here)
SENIOR FIXED INCOME PORTFOLIO
MANAGER
</TABLE>
AN INVESTMENT IN THE FUND IS NEITHER INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NAV OF $1.00 PER SHARE.
2
<PAGE>
EVERGREEN
INSTITUTIONAL TREASURY MONEY MARKET FUND
- -------------------------------------------------- (Evergreen Icon Goes Here)
MANAGEMENT REPORT
August 1997
Dear Fellow Shareholders:
We are pleased to report on the Evergreen Institutional Treasury Money Market
Fund for the six-month period ending August 31, 1997.
PERFORMANCE
Institutional Shares returned 2.72% for the six-month period and Institutional
Service Shares returned 2.59% for the six-month period.
ECONOMIC AND INTEREST RATE ENVIRONMENT
After more than six years of steady expansion, the U.S. economy continued its
strong performance. Unemployment neared 24-year lows, Gross Domestic Product
continued to grow, and consumer confidence soared. The fact that inflation
remained low, despite exceptional growth and low unemployment, was impressive.
This near-perfect environment was interrupted briefly in March when Federal
Reserve Board Chairman, Alan Greenspan, recommended a Fed-induced interest rate
hike to curb potential inflationary pressure. The Federal Reserve Board
responded to inflationary fears on March 25 by increasing the Fed Funds rate 25
basis points, from 5.25% to 5.50%. Subsequently, the economy continued its
healthy, non-inflationary pace of growth, allowing the Fed to leave interest
rates unchanged during the ensuing five months.
Despite only one instance of Fed intervention, rates experienced volatility
throughout the March-through-August period. Interest rates jumped in March, in
anticipation of the Fed-induced rate hike, and then declined by 56 basis points
over the next two months. As measured by the three-month Treasury Bill, interest
rates bottomed out at 4.84% on June 2, then climbed steadily before closing at
5.22% on August 29.
PORTFOLIO COMPOSITION AND STRATEGY
As of August 31, the portfolio was comprised of approximately 75% repurchase
agreements and 25% Treasuries.
We continue to maintain a maturity at the longer end of our normal range in an
effort to capture higher, more attractive rates. The Fund also continues to
enter into securities lending agreements to enhance the portfolio's return. This
process provides an opportunity to gain a couple of basis points as reward, and
is a contributing factor in the Fund's relative outperformance of its peers.
The Fund invests exclusively in short-term U.S. Government obligations which are
fully guaranteed, as to principal and interest, by the U.S. Government and
repurchase agreements, fully collateralized by such U.S. Government obligations.
Thank you for your investment in the Evergreen Institutional Treasury Money
Market Fund.
<TABLE>
<S> <C>
Sincerely,
/s/ KELLIE ALLEN
KELLIE ALLEN
VICE PRESIDENT, (Photo of Kellie Allen Goes Here)
FIXED INCOME PORTFOLIO MANAGER
</TABLE>
AN INVESTMENT IN THE FUND IS NEITHER INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NAV OF $1.00 PER SHARE.
3
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EVERGREEN
INSTITUTIONAL MONEY MARKET FUND
(Evergreen Icon Appears Here)-------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
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<CAPTION>
NOVEMBER 19, 1996
(COMMENCEMENT OF
SIX MONTHS ENDED CLASS OPERATIONS)
AUGUST 31, 1997 THROUGH
(UNAUDITED) FEBRUARY 28, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
NET ASSET VALUE BEGINNING OF PERIOD............................................... $ 1.000 $ 1.000
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................................................. 0.028 0.015
-------- --------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME..................................... (0.028) (0.015)
-------- --------
NET ASSET VALUE END OF PERIOD..................................................... $ 1.000 $ 1.000
-------- --------
TOTAL RETURN...................................................................... 2.80% 1.57%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Total expenses.................................................................. 0.19% 0.07%
Total expenses excluding indirectly paid expenses............................... 0.19% --
Total expenses excluding waivers and/or reimbursements.......................... 0.23% 0.43%
Net investment income........................................................... 5.55% 5.48%
NET ASSETS END OF PERIOD (THOUSANDS).............................................. $868,086 $ 575,331
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 26, 1996
(COMMENCEMENT OF
SIX MONTHS ENDED CLASS OPERATIONS)
AUGUST 31, 1997 THROUGH
(UNAUDITED) FEBRUARY 28, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES
NET ASSET VALUE BEGINNING OF PERIOD............................................... $ 1.000 $ 1.000
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................................................. 0.026 0.014
-------- --------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME..................................... (0.026) (0.014)
-------- --------
NET ASSET VALUE END OF PERIOD..................................................... $ 1.000 $ 1.000
-------- --------
TOTAL RETURN...................................................................... 2.67% 1.40%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Total expenses.................................................................. 0.44% 0.32%
Total expenses excluding indirectly paid expenses............................... 0.44% --
Total expenses excluding waivers and/or reimbursements.......................... 0.46% 0.68%
Net investment income........................................................... 5.24% 5.24%
NET ASSETS END OF PERIOD (THOUSANDS).............................................. $741,131 $ 867,294
</TABLE>
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
4
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EVERGREEN
INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
-------------------------------------------------(Evergreen Icon Goes Here)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NOVEMBER 20, 1996
(COMMENCEMENT OF
SIX MONTHS ENDED CLASS OPERATIONS)
AUGUST 31, 1997 THROUGH
(UNAUDITED) FEBRUARY 28, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
NET ASSET VALUE BEGINNING OF PERIOD............................................... $ 1.000 $ 1.000
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................................................. 0.018 0.010
-------- --------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME..................................... (0.018) (0.010)
-------- --------
NET ASSET VALUE END OF PERIOD..................................................... $ 1.000 $ 1.000
-------- --------
TOTAL RETURN...................................................................... 1.83% 0.96%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Total expenses.................................................................. 0.10% 0.05%
Total expenses excluding indirectly paid expenses............................... 0.10% --
Total expenses excluding waivers and/or reimbursements.......................... 0.29% 0.45%
Net investment income........................................................... 3.64% 3.50%
NET ASSETS END OF PERIOD (THOUSANDS).............................................. $337,360 $ 206,124
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 25, 1996
(COMMENCEMENT OF
SIX MONTHS ENDED CLASS OPERATIONS)
AUGUST 31, 1997 THROUGH
(UNAUDITED) FEBRUARY 28, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES
NET ASSET VALUE BEGINNING OF PERIOD............................................... $ 1.000 $ 1.000
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................................................. 0.017 0.008
------- -------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME..................................... (0.017) (0.008)
------- -------
NET ASSET VALUE END OF PERIOD..................................................... $ 1.000 $ 1.000
------- -------
TOTAL RETURN...................................................................... 1.70% 0.85%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Total expenses.................................................................. 0.35% 0.30%
Total expenses excluding indirectly paid expenses............................... 0.35% --
Total expenses excluding waivers and/or reimbursements.......................... 0.53% 0.70%
Net investment income........................................................... 3.37% 3.19%
NET ASSETS END OF PERIOD (THOUSANDS).............................................. $ 24,186 $14,295
</TABLE>
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
EVERGREEN
INSTITUTIONAL TREASURY MONEY MARKET FUND
(Evergreen Icon Appears Here)---------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NOVEMBER 20, 1996
(COMMENCEMENT OF
SIX MONTHS ENDED CLASS OPERATIONS)
AUGUST 31, 1997 THROUGH
(UNAUDITED) FEBRUARY 28, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
NET ASSET VALUE BEGINNING OF PERIOD............................................... $ 1.000 $ 1.000
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................................................. 0.027 0.015
-------- --------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME..................................... (0.027) (0.015)
-------- --------
NET ASSET VALUE END OF PERIOD..................................................... $ 1.000 $ 1.000
-------- --------
TOTAL RETURN...................................................................... 2.72% 1.49%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Total expenses.................................................................. 0.17% 0.06%
Total expenses excluding indirectly paid expenses............................... 0.16% --
Total expenses excluding waivers and/or reimbursements.......................... 0.25% 0.45%
Net investment income........................................................... 5.38% 5.24%
NET ASSETS END OF PERIOD (THOUSANDS).............................................. $797,644 $ 367,771
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 27, 1996
(COMMENCEMENT OF
SIX MONTHS ENDED CLASS OPERATIONS)
AUGUST 31, 1997 THROUGH
(UNAUDITED) FEBRUARY 28, 1997
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES
NET ASSET VALUE BEGINNING OF PERIOD............................................... $ 1.000 $ 1.000
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................................................. 0.026 0.013
-------- --------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME..................................... (0.026) (0.013)
-------- --------
NET ASSET VALUE END OF PERIOD..................................................... $ 1.000 $ 1.000
-------- --------
TOTAL RETURN...................................................................... 2.59% 1.33%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Total expenses.................................................................. 0.41% 0.31%
Total expenses excluding indirectly paid expenses............................... 0.41% --
Total expenses excluding waivers and/or reimbursements.......................... 0.49% 0.70%
Net investment income........................................................... 5.13% 4.98%
NET ASSETS END OF PERIOD (THOUSANDS).............................................. $582,390 $ 509,369
</TABLE>
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
EVERGREEN
INSTITUTIONAL MONEY MARKET FUND
- ------------------------------------------------------(Evergreen Icon Goes Here)
SCHEDULE OF INVESTMENTS
August 31, 1997
(unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
<CAPTION>
ASSET-BACKED SECURITIES-- 5.3%
<C> <S> <C>
Restructured Asset Certificates
FRN,
$25,000,000 5.65%, 9/15/97................... $ 24,997,268
25,000,000 5.72%, 11/18/97.................. 24,992,755
35,000,000 Asset Backed Securities
Investment,
5.70%, 9/15/97................. 35,000,000
--------------
TOTAL ASSET-BACKED SECURITIES
(COST $84,990,023)............. 84,990,023
--------------
<CAPTION>
CORPORATE BONDS-- 37.5%
<C> <S> <C>
BANKS-- 13.2%
30,000,000 Bankers Trust FRN,
5.69%, 9/2/97.................. 29,992,557
20,000,000 Banque Nationale De Paribas,
5.84%, 1/6/98.................. 20,000,000
25,000,000 Huntington National Bank FRN,
5.84%, 9/2/97.................. 25,000,000
61,900,000 ING Barings Bank FRN,
5.97%, 1/7/98.................. 61,900,633
19,000,000 Landesbank Hessen Thuringen,
5.93%, 6/30/98................. 18,980,911
20,000,000 PNC Bank FRN,
5.63%, 9/2/97.................. 19,990,573
15,000,000 Societe Generale,
6.11%, 5/26/98................. 14,997,344
20,000,000 SouthTrust Bank,
5.70%, 1/6/98.................. 19,996,667
2,000,000 Wells Fargo & Company FRN,
5.88%, 11/27/97................ 2,000,858
--------------
212,859,543
--------------
FINANCE-- 18.8%
9,140,000 Associates Corporation North
America,
7.30%, 3/15/98................. 9,205,275
Bear Stearns Company Incorporated
FRN,
5,000,000 5.83%, 9/17/97................... 5,000,500
7,000,000 5.85%, 9/17/97................... 7,007,160
Beneficial Corporation MTN,
10,000,000 7.02%, 12/5/97................... 10,030,463
3,600,000 9.13%, 2/15/98................... 3,651,147
25,000,000 Centauri Corporation FRN,
5.66%, 9/2/97.................. 25,000,257
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<CAPTION>
CORPORATE BONDS-- CONTINUED
<C> <S> <C>
FINANCE-- CONTINUED
Chrysler Financial Corporation
MTN,
$ 5,000,000 5.56%, 3/2/98.................... $ 4,985,396
13,000,000 6.45%, 8/7/98.................... 13,057,764
3,000,000 6.74%, 5/20/98................... 3,014,236
10,000,000 Dean Witter Discover & Company,
6.00%, 3/1/98.................. 10,017,858
GMAC MTN,
11,750,000 6.75%, 2/25/98................... 11,807,720
5,000,000 7.63%, 2/27/98................... 5,037,078
18,000,000 7.75%, 3/2/98.................... 18,165,600
10,000,000 7.85%, 11/17/97.................. 10,042,014
4,700,000 Household Finance Corporation
MTN,
7.91%, 2/6/98.................. 4,740,270
Lehman Brothers Holdings, Inc.,
13,334,000 5.75%, 2/15/98................... 13,319,602
7,000,000 6.38%, 6/1/98.................... 7,010,920
11,500,000 6.54%, 1/5/98.................... 11,517,416
1,720,000 7.63%, 8/1/98.................... 1,741,919
11,400,000 7.85%, 5/11/98................... 11,528,025
4,000,000 8.06%, 3/10/98................... 4,043,496
4,500,000 8.10%, 3/17/98................... 4,554,603
25,000,000 Merrill Lynch & Co., Inc. FRN,
5.68%, 9/2/97.................. 25,000,270
1,306,850 Money Store Auto Trust FRN,
5.51%, 1/15/98................. 1,306,850
6,850,000 Nomura Limited,
5.98%, 5/15/98................. 6,850,000
PHH Corporation FRN,
22,800,000 5.60%, 9/29/97................... 22,797,322
30,000,000 5.63%, 9/15/97................... 29,997,823
Shearson Lehman Holdings MTN,
1,000,000 6.08%, 7/9/98.................... 1,000,965
6,435,000 6.13%, 6/30/98................... 6,429,447
15,000,000 Sigma,
5.93%, 8/7/98.................. 15,000,000
--------------
302,861,396
--------------
INDUSTRIALS-- 4.0%
45,000,000 IBM Credit Corporation FRN,
5.82%, 9/2/97.................... 45,000,000
20,000,000 Johnson Controls Inc. MTN,
7.18%, 10/3/97................. 20,021,318
--------------
65,021,318
--------------
</TABLE>
(CONTINUED)
7
<PAGE>
EVERGREEN
INSTITUTIONAL MONEY MARKET FUND
(Evergreen Icon Appears Here)------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
August 31, 1997
(unaudited)
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
CORPORATE BONDS-- CONTINUED
RETAIL-- 0.3%
<C> <S> <C>
$ 4,000,000 Sears Roebuck & Company MTN,
7.40%, 3/16/98................. $ 4,032,066
--------------
TELECOMMUNICATIONS-- 0.3%
4,000,000 GTE Corporation,
8.85%, 3/1/98.................. 4,057,882
--------------
UTILITIES-- 0.9%
Public Service Electric & Gas
Company,
6,000,000 6.00%, 1/1/98.................... 6,000,917
9,000,000 7.13%, 11/1/97................... 9,019,433
--------------
15,020,350
--------------
TOTAL CORPORATE BONDS
(COST $603,852,555)............ 603,852,555
--------------
<CAPTION>
CERTIFICATES OF DEPOSIT-- 1.3%
<C> <S> <C>
10,000,000 Bankers Trust,
5.98%, 8/12/98................. 9,999,910
10,000,000 First America Bank of Michigan,
5.95%, 8/13/98................. 9,998,078
--------------
TOTAL CERTIFICATES OF DEPOSIT
(COST $19,997,988)............. 19,997,988
--------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
COMMERCIAL PAPER-- 47.0%
<C> <S> <C>
BANKS-- 8.5%
5,000,000 Chase Manhattan Bank,
5.97%, 11/26/97................ 5,003,174
Industrial Bank Korea,
10,000,000 5.70%, 10/15/97.................. 9,930,334
20,000,000 5.70%, 10/16/97.................. 19,857,500
26,550,000 5.77%, 9/12/97................... 26,503,191
11,450,000 5.80%, 9/12/97................... 11,429,708
Korea Development Bank,
30,000,000 5.60%, 9/22/97................... 29,902,000
25,000,000 5.80%, 10/7/97................... 24,855,000
10,000,000 5.82%, 10/22/97.................. 9,917,550
--------------
137,398,457
--------------
DIVERSIFIED-- MACHINERY-- 5.3%
Dealers Capital Access Trust
Inc.,
35,500,000 5.62%, 9/2/97.................... 35,494,458
12,600,000 5.65%, 9/2/97.................... 12,598,023
<CAPTION>
Principal Amount Value
COMMERCIAL PAPER-- CONTINUED
<C> <S> <C>
Mitsubishi Motors Credit of
America, Inc.,
$15,000,000 5.67%, 9/9/97.................... $ 14,981,100
11,350,000 5.68%, 9/11/97................... 11,332,092
10,000,000 5.69%, 9/8/97.................... 9,988,936
--------------
84,394,609
--------------
FINANCE-- 33.2%
9,000,000 Anchor Funding Corp.,
5.60%, 11/21/97................ 8,886,600
Aristar, Inc.,
27,135,000 5.59%, 9/9/97.................... 27,101,292
7,000,000 5.59%, 9/10/97................... 6,990,218
30,000,000 5.60%, 9/23/97................... 29,897,333
Astro Capital Corp.,
15,000,000 5.62%, 10/31/97.................. 14,859,500
35,000,000 5.65%, 10/31/97.................. 34,670,417
Banner Receivables Corp.,
10,000,000 5.59%, 10/6/97................... 9,945,653
8,704,000 5.59%, 10/10/97.................. 8,651,290
14,675,000 5.60%, 10/17/97.................. 14,569,992
24,112,000 Broadway Capital Corp.,
5.56%, 9/17/97................. 24,052,416
Dynamic Funding Corp.,
10,953,000 5.60%, 9/9/97.................... 10,939,370
19,115,000 5.62%, 9/11/97................... 19,085,159
35,000,000 5.65%, 9/10/97................... 34,950,562
16,332,000 Export-Import Bank of Korea,
5.82%, 10/6/97................. 16,239,588
FP Funding Corp.,
13,000,000 5.60%, 9/30/97................... 12,941,355
8,150,000 5.81%, 9/24/97................... 8,119,748
5,945,000 5.81%, 9/25/97................... 5,921,973
20,300,000 GMAC,
5.80%, 11/14/97................ 20,057,979
Green Tree Financial Corp.,
10,000,000 5.70%, 9/12/97................... 9,982,583
45,000,000 5.70%, 9/15/97................... 44,900,250
23,420,000 5.70%, 10/17/97.................. 23,249,425
28,500,000 Kubota Finance USA Inc.,
5.60%, 9/12/97................. 28,451,233
</TABLE>
(CONTINUED)
8
<PAGE>
EVERGREEN
INSTITUTIONAL MONEY MARKET FUND
- ----------------------------------------------------(Evergreen Icon Goes Here)
SCHEDULE OF INVESTMENTS (CONTINUED)
August 31, 1997
(unaudited)
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMERCIAL PAPER-- CONTINUED
FINANCE-- CONTINUED
<C> <S> <C>
Oak Funding Corp.,
$16,000,000 5.60%, 9/11/97................... $ 15,975,111
23,300,000 5.64%, 9/5/97.................... 23,285,399
Progress Funding Corp.,
4,500,000 5.65%, 10/20/97.................. 4,465,394
30,000,000 5.68%, 10/10/97.................. 29,815,400
Strategic Asset Funding Corp.,
15,612,000 5.70%, 9/30/97................... 15,540,315
2,000,000 5.90%, 11/12/97.................. 1,976,400
Tri Lateral Capital,
8,495,000 5.60%, 11/14/97.................. 8,397,213
7,775,000 5.70%, 9/11/97................... 7,762,690
8,675,000 5.72%, 9/11/97................... 8,661,216
4,269,000 Working Capital Management Corp.,
5.63%, 9/3/97.................. 4,267,665
--------------
534,610,739
--------------
TOTAL COMMERCIAL PAPER
(COST $756,403,805)............ 756,403,805
--------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<CAPTION>
GOVERNMENT AGENCY OBLIGATIONS-- 4.3%
<C> <S> <C>
$14,250,000 California Housing Finance Agency
FRN,
5.78%, 11/3/97................. $ 14,250,000
Virginia State Housing
Development Authority,
20,125,000 5.75%, 10/2/97................... 20,125,000
34,500,000 5.75%, 11/6/97................... 34,494,579
--------------
TOTAL GOVERNMENT AGENCY
OBLIGATIONS
(COST $68,869,579)............. 68,869,579
--------------
<CAPTION>
YANKEE OBLIGATIONS-- 1.9%
<C> <S> <C>
12,000,000 Korea Development Bank,
9.25%, 6/15/98................. 12,263,588
18,000,000 Societe Generale,
5.85%, 3/3/98.................. 17,998,285
--------------
TOTAL YANKEE OBLIGATIONS
(COST $30,261,873)............. 30,261,873
--------------
<CAPTION>
REPURCHASE AGREEMENT-- 2.2% (COST $35,996,339)
<C> <S> <C>
35,996,339 Aubrey G. Lanston Co.,
5.55%, 9/2/97 (1).............. 35,996,339
--------------
<CAPTION>
SHARES
- -----------
<C> <S> <C>
MUTUAL FUND SHARES-- 0.3%
5,384,241 Fidelity Institutional Fund...... 5,384,241
41,188 Fidelity U.S. Treasury Fund...... 41,188
--------------
TOTAL MUTUAL FUND SHARES
(COST $5,425,429).............. 5,425,429
--------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS--
(COST $1,605,797,591)... 99.8% 1,605,797,591
OTHER ASSETS AND
LIABILITIES-- NET....... 0.2 3,420,203
------- --------------
NET ASSETS--.............. 100.0% $1,609,217,794
------- --------------
------- --------------
</TABLE>
(1) Collateralized by $13,520,000 U.S. Treasury Bill, due 8/20/98;
value-- $12,814,796 and $20,413,000 U.S. Treasury Bonds, 6.00% to 13.875%,
due 8/15/04 to 11/15/26: value including interest-- $23,904,332.
MTN Medium Term Note
FRN Floating Rate Notes are putable back to the issuer or other parties not
affiliated with the issuer at par on interest reset dates. Interest rates
are determined and set by the issuer quarterly, semi-annually, or annually
depending upon the terms of the security. Interest rates presented for
these securities are those in effect at August 31, 1997.
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
EVERGREEN
INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
(Evergreen Icon Appears Here)---------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1997
(unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------
MUNICIPAL SECURITIES-- 102.4%
<C> <C> <S> <C>
ARIZONA-- 3.8%
$ 2,000,000 Apache County IDA, Tucson
Electric Power,
(LOC: Barclays Bk. PLC),
3.40%, VRDN.................... $ 2,000,000
3,000,000 Chandler IDA, IDR, SMP II Ltd.
Partnership, (LOC: Bank One,
AZ),
3.35%, VRDN.................... 3,000,000
2,600,000 Health Facilities Authority,
Hospital RB, Northern Arizona
Healthcare, Ser. B, (SPA: Chase
Manhattan Bk. & Ins. by MBIA),
3.30%, VRDN.................... 2,600,000
2,900,000 Phoenix IDA, MFHRB, Paradise
Shadows Apts.,
(LOC: Citibank),
3.35%, VRDN.................... 2,900,000
3,100,000 Pinal County PCRB, Magna Copper
Co. Proj.,
(LOC: Banque National de
Paris),
3.35%, VRDN.................... 3,100,000
------------
13,600,000
------------
ARKANSAS-- 1.0%
Little Rock School District
TRANS:
2,375,000 3.85%, 12/30/97.................. 2,381,436
1,185,000 4.25%, 12/31/97.................. 1,186,594
------------
3,568,030
------------
CALIFORNIA-- 3.3%
5,000,000 Los Angeles County TRANS, Ser. A,
4.50%, 6/30/98................. 5,025,803
3,000,000 Los Angeles Unified School
District TRANS,
4.50%, 7/1/98.................. 3,016,785
4,000,000 San Bernardino County TRANS, Ser.
A,
3.85%, 6/30/98................. 4,020,709
------------
12,063,297
------------
COLORADO-- 2.4%
3,800,000 Moffat County PCRB, Pacificorp
Projs.,
(SPA: Bank of New York & Ins.
by AMBAC),
3.75%, VRDN.................... 3,800,000
5,000,000 State General Fund TRANS, Ser. A,
4.50%, 6/26/98................. 5,025,951
------------
8,825,951
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------
<C> <C> <S> <C>
<CAPTION>
MUNICIPAL SECURITIES-- CONTINUED
<C> <C> <S> <C>
DISTRICT OF COLUMBIA-- 1.9%
$ 4,000,000 District of Columbia MSTR, Ser.
SGA62, (SPA: Societe Generale),
3.90%, VRDN.................... $ 4,000,000
3,000,000 District of Columbia TRANS, Ser.
A,
(LOC: Nat. West/Societe
Generale),
3.98%, 9/30/97................. 3,001,218
------------
7,001,218
------------
FLORIDA-- 2.8%
3,000,000 Eagle Tax Exempt Trust, Orange
Cnty. Hsg. Fin. Auth.,
(SPA: Citibank),
3.41%, VRDN.................... 3,000,000
2,000,000 Escambia County SFHRB,
(SPA: Merrill Lynch),
3.50%, VRDN.................... 2,000,000
5,000,000 Indian Trace Cmnty. Dev.
District, Basin 1 Wtr. Mgt.,
Ser. A, Prefunded 11/1/99 @
100, (COLL: US Govt.
Securities),
3.25%, VRDN.................... 5,000,000
------------
10,000,000
------------
GEORGIA-- 5.3%
3,250,000 Atlanta Water & Sewer MSTR,
Ser. SGA57,
3.85%, VRDN.................... 3,250,000
2,000,000 Burke County Dev. Auth. PCRB,
Oglethorpe Power Corp.,
(Ins. by AMBAC),
3.60%, VRDN.................... 2,000,000
5,800,000 Eagle Tax Exempt Trust, Georgia
HFA, FHA/VA, Class A,
(SPA: Citibank),
3.41%, VRDN.................... 5,800,000
5,000,000 Georgia GO, Ser. B,
6.75%, VRDN.................... 5,073,105
3,000,000 Municipal Gas Auth. RB, Georgia
Muni Gas, Ser. A,
(LOC: Morgan Gty. Tr. Co. of
NY),
3.30%, VRDN.................... 3,000,000
------------
19,123,105
------------
HAWAII-- 0.7%
2,600,000 Hawaii GO, Ser. CN,
(SPA: Merrill Lynch),
3.45%, VRDN.................... 2,600,000
------------
</TABLE>
(CONTINUED)
10
<PAGE>
EVERGREEN
INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
(Evergreen Icon Appears Here)---------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
August 31, 1997
(unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <C> <S> <C>
<CAPTION>
MUNICIPAL SECURITIES-- CONTINUED
<C> <C> <S> <C>
ILLINOIS-- 7.6%
$ 5,985,000 Chicago Board Of Education
Certificates,
(SPA: Bank of New York),
3.50%, VRDN.................... $ 5,985,000
5,000,000 Chicago MFHRB, Waveland
Associates Proj. D, (LOC: Swiss
Bank),
3.35%, VRDN.................... 5,000,000
5,150,000 Chicago O'Hare International
Airport RB, (SPA: Merrill
Lynch),
3.50%, VRDN.................... 5,150,000
4,000,000 Educational Fac. Auth. RB, Natl.
College Education,
(LOC: Harris Bank),
3.40%, VRDN.................... 4,000,000
7,440,000 Illinois State Option
Certificates, (LOC: Bank of New
York),
3.50%, VRDN.................... 7,440,000
------------
27,575,000
------------
INDIANA-- 1.7%
6,000,000 Petersburg PCRB, Indiana Power &
Light Co., Ser. B,
(Ins. by AMBAC),
3.40%, VRDN.................... 6,000,000
------------
IOWA-- 1.8%
6,400,000 Louisa County PCRB, Iowa-Illinois
Gas & Electric Co., Ser. A,
3.45%, VRDN.................... 6,400,000
------------
KENTUCKY-- 5.0%
1,000,000 Higher Education Student Loan RB,
Kentucky Higher Ed., Ser. A,
(Credit Support: Guaranteed
Student Loans),
4.45%, 6/1/98.................. 1,002,152
5,000,000 Louisville & Jefferson County
Airport BAN, Ser. AA-1, (LOC:
National City Bk. KY),
3.55%, VRDN.................... 5,000,000
12,000,000 State Turnpike Authority Trust
Receipts, Ser. 17, (LIQ:
Commerz Bk. & Ins. by FSA),
3.35%, 7/1/98.................. 12,000,000
------------
18,002,152
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <C> <S> <C>
<CAPTION>
MUNICIPAL SECURITIES-- CONTINUED
<C> <C> <S> <C>
MAINE-- 1.4%
$ 5,000,000 Educational Marketing Corp.
Student Loans, Ser. A-1,
(SPA: Credit Suisse),
3.35%, VRDN.................... $ 5,000,000
------------
MASSACHUSETTS-- 1.4%
5,000,000 Health & Educational Facilities
MSTR, Ser. SGA-65,
3.50%, VRDN.................... 5,000,000
------------
MICHIGAN-- 2.8%
2,300,000 Kent HFA-ACES, Butterworth
Hospital, Ser. A,
(LOC: Rabobank Nederland),
3.20%, VRDN.................... 2,300,000
5,000,000 Michigan GO,
4.50%, 9/30/97................. 5,003,029
3,000,000 University of Michigan Hospital
RB, Ser. A,
3.75%, VRDN.................... 3,000,000
------------
10,303,029
------------
MINNESOTA-- 0.5%
2,000,000 St. Cloud Health Care Facilities,
Ser. A,
(LOC: Rabobank Nederland),
3.40%, VRDN.................... 2,000,000
------------
MISSOURI-- 1.1%
4,000,000 State Hsg. Dev. Com. SFHRB,
Homeownership Loan Prog., (SPA:
Merrill Lynch),
3.50%, VRDN.................... 4,000,000
------------
NEBRASKA-- 1.4%
5,245,000 Higher Education Loan Prog.,
(SPA: Banque National de
Paris),
3.50%, VRDN.................... 5,245,000
------------
NEW HAMPSHIRE-- 5.0%
New Hampshire Business Fin. PCRB,
5,000,000 CT Light & Power Proj. A,
(LOC: CIBC)
3.35%, VRDN.................. 5,000,000
5,000,000 United Illuminating Co., Ser A,
(LOC: Barclays PLC)
3.40%, VRDN.................. 5,000,000
</TABLE>
(CONTINUED)
11
<PAGE>
EVERGREEN
INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
(Evergreen Icon Appears Here)-------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
August 31, 1997
(unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <C> <S> <C>
<CAPTION>
MUNICIPAL SECURITIES-- CONTINUED
<C> <C> <S> <C>
NEW HAMPSHIRE-- CONTINUED
$ 8,000,000 New Hampshire HFA SFHRB, (LIQ:
Rabobank Nederland),
3.50%, VRDN.................... $ 8,000,000
------------
18,000,000
------------
NEW JERSEY-- 2.1%
7,500,000 Eagle Tax Exempt Trust, NJ HFA,
Ser. 97-C3001,
(SPA: Citibank),
3.41%, VRDN.................... 7,500,000
------------
NEW MEXICO-- 2.8%
Farmington PCRB,
2,000,000 El Paso Electric, Ser. A,
(LOC: Citibank)
3.40%, VRDN.................... 2,000,000
4,000,000 Public Service Co. of San Juan,
Ser. B,
(LOC: Societe Generale)
3.35%, VRDN.................... 4,000,000
4,000,000 Public Service Co. of San Juan,
Ser. C,
(LOC: Morgan Gnty.)
3.40%, VRDN.................... 4,000,000
------------
10,000,000
------------
NEW YORK-- 7.0%
New York City GO,
7,000,000 Ser. A&B, (SPA: Merrill Lynch)
3.50%, VRDN.................... 7,000,000
5,000,000 Ser. D, (SPA: FGIC-SPI)
3.35%, VRDN.................... 5,000,000
3,705,000 New York City MSTR, Ser. SGA 63,
3.85%, VRDN.................... 3,705,000
2,495,000 State Hsg. Fin. Agency, Ser. A,
(SPA: Merrill Lynch),
3.55%, VRDN.................... 2,495,000
5,000,000 State Thruway MSTR, Ser. D,
(SPA: Societe Generale),
3.80%, VRDN.................... 5,000,000
2,000,000 Suffolk County GO, Prerefunded
3/1/98 @ 101, (COLL: US Govt.
Securities),
7.38%, 3/1/98.................. 2,054,574
------------
25,254,574
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <C> <S> <C>
<CAPTION>
MUNICIPAL SECURITIES-- CONTINUED
<C> <C> <S> <C>
OHIO-- 0.8%
$ 3,000,000 State Environmental Improvement
RB, Newark Group Proj.,
(LOC: Chase Manhattan Bank),
3.50%, VRDN.................... $ 3,000,000
------------
OREGON-- 1.7%
1,775,000 Clackamas County Hospital Fac.
Auth. RB, Kaiser Permanente,
3.55%, VRDN.................... 1,775,000
4,500,000 State Housing & Community
Services SFHRB, Ser. K,
3.65%, 12/11/97................ 4,500,000
------------
6,275,000
------------
PENNSYLVANIA-- 9.9%
3,200,000 Delaware Valley Regional Fin.
Auth. RB, Ser. B,
(LOC: Credit Suisse First
Boston),
3.25%, VRDN.................... 3,200,000
4,300,000 Delaware Valley Regional Fin.
Auth., Ser. C,
(LOC: Credit Suisse First
Boston),
3.25%, VRDN.................... 4,300,000
2,000,000 Emmaus Gen. Auth. RB, Ser. B,
(GIC: Goldman),
3.35%, VRDN.................... 2,000,000
4,899,000 New Castle Area Hosp. Auth. RB,
(SPA: PNC Bk. & Ins. by FSA),
3.40%, VRDN.................... 4,899,000
1,380,000 Pennsylvania HFA,
4.00%, VRDN.................... 1,380,000
5,000,000 Philadelphia Airport MSTR,
3.55%, VRDN.................... 5,000,000
7,705,000 Pittsburgh GO,
(SPA: Societe Generale),
3.45%, VRDN.................... 7,705,000
Schuylkill Cnty. IDA-RRB,
(LOC: Credit Locale de France),
300,000 Northeastern Power Co., Ser. A
3.75%, VRDN.................. 300,000
3,600,000 Northeastern Power Co., Ser. B
3.80%, VRDN.................. 3,600,000
3,340,000 State Higher Education RB,
Allegheny Delaware Valley
Obligation, Ser. A,
(Ins. by MBIA),
4.50%, 11/15/97................ 3,345,228
------------
35,729,228
------------
</TABLE>
(CONTINUED)
12
<PAGE>
EVERGREEN
INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
(Evergreen Icon Appears Here)--------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
August 31, 1997
(unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------
<C> <C> <S> <C>
<CAPTION>
MUNICIPAL SECURITIES-- CONTINUED
<C> <C> <S> <C>
TENNESSEE-- 2.4%
$ 8,550,000 Tennessee GO,
(SPA: Bank of New York),
3.50%, VRDN.................... $ 8,550,000
------------
TEXAS-- 15.9%
7,600,000 Calhoun Cnty. IDA-RB, Formosa
Plastics Corporation Proj.,
(LOC: Bank of America),
3.35%, VRDN.................... 7,600,000
1,500,000 Fort Worth Water & Sewer TECP,
3.90%, 9/2/97.................. 1,500,000
5,400,000 Harris County Health Facilities
Hosp. RB, Memorial Hospital
Proj. Ser. B,
(SPA: Societe Generale),
3.25%, VRDN.................... 5,400,000
3,400,000 Harris County Health Facilities
Hospital RB, St. Lukes
Episcopal,
Ser. D, Prerefunded to 9/16/97
@ 100,
(COLL: US Treasury
Obligations),
3.70%, VRDN.................... 3,400,000
4,000,000 Harris County Ind. Dev. Corp. RB,
Shell Oil,
3.65%, VRDN.................... 4,000,000
5,900,000 Panhandle Plains High Education
RB, Student Loans, Ser. X,
(LOC: SLMA),
3.35%, VRDN.................... 5,900,000
5,000,000 Red River Auth. PCRB,
Southwestern Public Service
Co.,
3.40%, VRDN.................... 5,000,000
5,000,000 San Antonio Gas & Electric RB,
(SPA: Societe Generale),
3.55%, VRDN.................... 5,000,000
7,000,000 South Texas Higher Education
Auth. RB,
(LIQ: SLMA & Ins. by MBIA),
3.35%, VRDN.................... 7,000,000
2,700,000 Texas State RRB, Ser. A,
4.625%, 10/1/97................ 2,701,620
10,000,000 Texas State TRANS, Ser. A,
3.85%, 8/31/98................. 10,086,200
------------
57,587,820
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <C> <S> <C>
<CAPTION>
MUNICIPAL SECURITIES-- CONTINUED
<C> <C> <S> <C>
VIRGINIA-- 4.2%
$ 7,650,000 Arlington County, RB, Ballston
Public Parking,
(LOC: Citibank),
3.35%, VRDN.................... $ 7,650,000
2,400,000 Lynchburg IDA, VHA Mid
Atlantic/Cap., Ser. D,
(SPA: FNB Ohio & Ins. by
AMBAC),
3.35%, VRDN.................... 2,400,000
5,000,000 State Resources Auth. Water &
Sewer RB, Henrico Cnty. Proj.,
(SPA: Crestar),
3.35%, VRDN.................... 5,000,000
------------
15,050,000
------------
WASHINGTON-- 0.6%
2,000,000 Pierce County Economic Dev. Spec.
RB, Weyerhaeuser Real Estate,
(LOC: ABN-AMRO Bk.),
3.30%, VRDN.................... 2,000,000
------------
WISCONSIN-- 1.1%
4,000,000 Wisconsin Hsg. & Economic Dev.
Trust Receipts, Home Ownership,
Ser. 18,
3.50%, VRDN.................... 4,000,000
------------
WYOMING-- 0.8%
3,000,000 Sweetwater County PCRB,
Pacificorp Co.,
(LOC: Credit Suisse First
Boston),
3.30%, VRDN.................... 3,000,000
------------
OTHER-- 2.2%
8,000,000 Puttable Fltg. Option Tax
Exempted Rcpt., IBM Corp.,
3.95%, VRDN.................... 8,000,000
------------
TOTAL MUNICIPAL SECURITIES
(COST $370,253,404)............ 370,253,404
------------
</TABLE>
<TABLE>
<C> <C> <S> <C> <C>
TOTAL INVESTMENTS--
(COST $370,253,404)..... 102.4% 370,253,404
OTHER ASSETS AND
LIABILITIES-- NET....... (2.4) (8,706,810)
-------- ------------
NET ASSETS--.............. 100.0% $361,546,594
-------- ------------
-------- ------------
</TABLE>
(CONTINUED)
13
<PAGE>
EVERGREEN
INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
(Evergreen Icon Appears Here)-------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
August 31, 1997
(unaudited)
SUMMARY OF ABBREVIATIONS:
ACES Adjustable Convertible Extendable Securities
AMBAC American Municipal Bond Assurance Corp.
BAN Bond Anticipation Note
COLL Collateral
FGIC Financial Guaranty Insurance Co.
FHA Federal Housing Authority
FSA Financial Security Assurance Inc.
GIC Guaranteed Investment Contract
GO General Obligations
HFA Housing Finance Authority
IDA Industrial Development Authority
LIQ Liquidity Provider
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance Corp.
MFHRB Multifamily Housing Revenue Bond
MSTR Municipal Securities Trust Receipt
PCRB Pollution Control Revenue Bond
RB Revenue Bonds
RRB Refunding Revenue Bonds
SFHRB Single Family Housing Revenue Bond
SLMA Student Loan Marketing Association
SPA Securities Purchase Agreement
SPI Security Purchase, Inc.
TECP Tax Exempt Commercial Paper
TRANS Tax Revenue Anticipation Notes
VA Veterans Authority
VRDN Variable Rate Demand Notes
Variable Rate Demand Notes are payable on demand on no more than seven calendar
days notice given by the Fund to the issuer or other parties not affiliated with
the issuer. Interest rates are determined and reset by the issuer daily, weekly,
or monthly depending upon the terms of the security. Interest rates presented
for these securities are those in effect at August 31, 1997.
Certain obligations held in the portfolio have credit enhancements or liquidity
features that may, under certain circumstances, provide for repayment of
principal and interest on the obligation upon demand date, interest rate reset
date or final maturity. These enhancements include: letters of credit; liquidity
guarantees; standby bond purchase agreements; tender option purchase agreements;
and third party insurance (i.e. AMBAC, FGIC and MBIA). Adjustable rate bonds and
variable rate demand notes held in the portfolio may be considered derivative
securities within the standards imposed by the Securities and Exchange
Commission under Rule 2a-7 which were designed to minimize both credit and
market risk.
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
EVERGREEN
INSTITUTIONAL TREASURY MONEY MARKET FUND
- ----------------------------------------------------(Evergreen Icon Goes Here)
SCHEDULE OF INVESTMENTS
August 31, 1997
(unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------
UNITED STATES TREASURY BILLS-- 3.5%
(COST $48,876,207)
<C> <C> <S> <C>
$ 49,000,000 5.35%, 9/18/97**.............. $ 48,876,207
--------------
<CAPTION>
UNITED STATES TREASURY
NOTES-- 24.3%
<C> <C> <S> <C>
60,000,000 5.75%, 9/30/97**.............. 60,012,852
15,000,000 6.00%, 11/30/97**............. 15,005,034
50,000,000 5.25%, 12/31/97**............. 49,949,903
60,000,000 6.13%, 3/31/98................ 60,111,567
25,000,000 5.88%, 4/30/98................ 24,997,310
50,000,000 6.25%, 6/30/98................ 50,200,660
30,000,000 4.75%, 8/31/98................ 29,707,921
30,000,000 6.13%, 8/31/98................ 30,145,602
15,000,000 6.00%, 9/30/98................ 15,034,891
--------------
TOTAL UNITED STATES TREASURY
NOTES
(COST $335,165,740)......... 335,165,740
--------------
<CAPTION>
EPURCHASE AGREEMENTS*-- 83.9%
<C> <C> <S> <C>
22,524,756 Aubrey G. Lanston, Co.,
5.55%, dated 8/29/97, due
9/2/97 (1).................. 22,524,756
60,000,000 Barclays Bank, PLC.,
5.56%, dated 8/29/97, due
9/2/97 (2).................. 60,000,000
60,000,000 Deutsche Bank AG,
5.57%, dated 8/29/97, due
9/2/97 (3).................. 60,000,000
60,000,000 Donaldson, Lufkin & Jenrette
Securities Corp.,
5.53%, dated 8/29/97, due
9/2/97 (4).................. 60,000,000
100,000,000 Dresdner Bank AG,
5.53%, dated 8/29/97, due
9/2/97 (5).................. 100,000,000
48,693,750 Dresdner Bank AG,
5.50%, dated 8/1/97, due
9/18/97 (6) ***............. 48,693,750
60,300,000 Dresdner Bank AG,
5.70%, dated 5/1/97, due
9/30/97 (7) ***............. 60,300,000
15,112,500 Dresdner Bank AG,
5.45%, dated 7/10/97, due
12/1/97 (8) ***............. 15,112,500
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
REPURCHASE AGREEMENTS-- CONTINUED
<C> <C> <S> <C>
$ 50,812,500 Dresdner Bank AG,
5.85%, dated 5/14/97, due
12/30/97 (9) ***............ $ 50,812,500
60,000,000 First Boston Corp.,
5.53%, dated 8/29/97, due
9/2/97 (10)................. 60,000,000
40,000,000 Goldman, Sachs Group L.P.,
5.52%, dated 8/29/97, due
9/2/97 (11)................. 40,000,000
60,000,000 HSBC Securities, Inc.,
5.57%, dated 8/29/97, due
9/2/97 (12)................. 60,000,000
60,000,000 Merrill Lynch & Co., Inc.,
5.55%, dated 8/29/97, due
9/2/97 (13)................. 60,000,000
60,000,000 Morgan Guaranty Trust Co. of
New York,
5.56%, dated 8/29/97, due
9/2/97 (14)................. 60,000,000
60,000,000 Shearson Lehman Brothers,
Inc.,
5.50%, dated 8/29/97, due
9/2/97 (15)................. 60,000,000
280,000,000 Smith Barney,
5.57%, dated 8/29/97, due
9/2/97 (16)................. 280,000,000
60,000,000 Union Bank Switzerland,
5.59%, dated 8/29/97, due
9/2/97 (17)................. 60,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(COST $1,157,443,506)....... 1,157,443,506
--------------
<CAPTION>
SHARES
- ------------
MUTUAL FUND SHARES-- 0.9% (COST $12,181,336)
<C> <C> <S> <C>
12,181,336 Fidelity U.S. Treasury
Portfolio................... 12,181,336
--------------
</TABLE>
<TABLE>
<C> <C> <S> <C> <C>
TOTAL INVESTMENTS--
(COST
$1,553,666,789)...... 112.6% 1,553,666,789
OTHER ASSETS AND
LIABILITIES-- NET.... (12.6) (173,633,007)
-------- --------------
NET ASSETS--........... 100.0% $1,380,033,782
-------- --------------
-------- --------------
</TABLE>
(CONTINUED)
15
<PAGE>
EVERGREEN
INSTITUTIONAL TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
August 31, 1997
(unaudited)
* Collateralized by:
(1) $22,434,000 U.S. Treasury Notes, 5.13% to 8.25%, 8/31/97 to 5/15/07; value
including interest-- $22,977,443
(2) $57,781,000 U.S. Treasury Bonds, 6.25% to 11.25%, 2/15/15 to 11/15/26;
value including interest-- $61,200,509
(3) $58,721,000 U.S. Treasury Notes, 4.75% to 7.88%, 8/31/98 to 8/15/02; value
including interest-- $61,200,423
(4) $41,445,000 U.S. Treasury Notes, 5.88% to 6.50%, 11/15/99 to 8/15/05; value
including interest-- $42,001,239 and $20,250,000 US Treasury Bill, 8/20/97;
value-- $19,199,288
(5) $13,067,000 US Treasury Bonds 6.00% to 7.13%, due 2/15/23 to 8/15/27; value
including interest-- $12,661,168 and $85,391,000 US Treasury Notes, 5.25%
to 7.88%, due 1/15/00 to 7/15/06; value including interest-- $89,342,334
(6) $49,600,000 Government National Mortgage Association Note, 6.00% due
6/20/27; value including interest-- $49,867,322
(7) $66,077,856 Government National Mortgage Association Note, 6.50% to 7.00%,
due 4/15/26 to 5/15/26; value including interest-- $62,361,126
(8) $15,600,000 Government National Mortgage Association Note, 6.00% due
6/20/27; value including interest-- $15,684,077
(9) $1,300,000 U.S. Treasury Note, 6.13%, due 9/30/00; value including
interest-- $1,334,879, $500,000 U.S. Treasury Bond, 9.25% due 2/15/16;
value including interest-- $639,730 and $67,440,000 Government National
Mortgage Association Note, 6.88% to 7.00%, due 1/15/23 to 1/20/24; value
including interest-- $50,549,633
(10) $51,035,000 U.S. Treasury Notes, 5.50% to 5.75%, 11/15/98 to 10/31/00;
value including interest-- $61,649,998
(11) $40,987,000 U.S. Treasury Note, 6.25%, 2/15/07; value including
interest-- $40,800,211
(12) $61,087,000 U.S. Treasury Bills, due 9/4/97 to 10/23/97;
value-- $60,655,829 and $559,000 U.S. Treasury Note, 5.88%, due 2/15/04;
value-- $548,896
(13) $40,030,000 U.S. Treasury Bonds, 10.38% to 14.00%, 11/15/11 to 11/15/14;
value including interest-- $61,201,190
(14) $59,371,000 U.S. Treasury Notes, 6.75% to 8.25%, 7/15/98 to 6/30/99; value
including interest-- $61,200,147
(15) $66,390,564 Government National Mortgage Association Notes, 6.00% to 9.00%,
5/15/09 to 11/15/26; value including interest-- $61,194,799
(16) $37,008,000 U.S. Treasury Notes, 5.88% to 6.00%, 11/15/99 to 7/31/02; value
including interest-- $37,111,423, $18,916,000 U.S. Treasury Bill, 2/5/98;
value-- $18,480,989, $146,065,000 U.S. Treasury Strips, 5/15/01 to
11/15/01; value-- $56,014,885 and $215,685,475 Government National Mortgage
Association Notes, 4.50% to 9.00%, 1/1/00 to 9/20/27; value including
interest-- $173,992,703
(17) $76,122,975 Government National Mortgage Association Notes, 6.00% to 9.00%,
11/15/23 to 12/15/25; value including interest-- $61,202,023
** Securities on loan (see Note 3).
*** Represents investment of cash collateral received from securities on loan.
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
EVERGREEN
- ----------------------------------------------------(Evergreen Icon Goes Here)
STATEMENTS OF ASSETS AND LIABILITIES
August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
MONEY MARKET TAX EXEMPT TREASURY
FUND FUND FUND
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities.............................................. $1,569,801,252 $ 370,253,404 $ 396,223,283
Investments in repurchase agreements................................... 35,996,339 0 1,157,443,506
- -----------------------------------------------------------------------------------------------------------------------------------
Investments at market value (identified cost-- $1,605,797,591,
$370,253,404 and $1,553,666,789 respectively)........................ $1,605,797,591 $ 370,253,404 $1,553,666,789
Cash................................................................... 0 58,772 0
Interest receivable.................................................... 10,404,231 2,259,243 9,634,184
Receivable for Fund shares sold........................................ 0 0 6,477,490
Unamortized organization expenses...................................... 11,561 11,561 11,561
Prepaid expenses and other assets...................................... 24,917 26,107 29,217
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets......................................................... 1,616,238,300 372,609,087 1,569,819,241
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for securities on loan......................................... 0 0 177,250,301
Payable for investments purchased...................................... 0 10,086,200 0
Payable for Fund shares redeemed....................................... 997,361 0 6,504,489
Dividends payable...................................................... 5,370,631 888,079 5,477,989
Distribution fee payable............................................... 284,179 9,644 202,799
Accrued Trustees' fees and expenses.................................... 6,095 2,848 5,875
Due to related parties................................................. 230,685 9,861 177,206
Accrued expenses and other liabilities................................. 131,555 65,861 166,800
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities.................................................... 7,020,506 11,062,493 189,785,459
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS............................................................... $1,609,217,794 $ 361,546,594 $1,380,033,782
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS REPRESENTED BY
Paid-in capital........................................................ $1,609,351,600 $ 361,578,711 $1,380,033,782
Accumulated net realized loss on investments........................... (133,806) (32,117) 0
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS..................................................... $1,609,217,794 $ 361,546,594 $1,380,033,782
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Institutional Shares................................................... $ 868,086,320 $ 337,360,380 $ 797,643,521
Institutional Service Shares........................................... 741,131,474 24,186,214 582,390,261
- -----------------------------------------------------------------------------------------------------------------------------------
$1,609,217,794 $ 361,546,594 $1,380,033,782
- -----------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
Institutional Shares................................................... 868,136,637 337,389,547 797,643,521
Institutional Service Shares........................................... 741,214,963 24,189,164 582,390,261
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Institutional Shares................................................... $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Service Shares........................................... $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
EVERGREEN
(Evergreen Icon Appears Here)---------------------------------------------------
STATEMENTS OF OPERATIONS
Six Months ended August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
MONEY MARKET TAX EXEMPT TREASURY
FUND FUND FUND
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest.................................................................. $41,302,364 $ 5,007,379 $31,408,361
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fee............................................................ 1,086,227 201,366 850,167
Distribution Plan expenses................................................ 922,620 22,716 598,628
Administrative services fees.............................................. 257,554 48,073 201,817
Custodian fees............................................................ 140,202 42,193 136,240
Registration and filing fees.............................................. 71,195 65,398 150,742
Professional fees......................................................... 11,720 9,822 10,823
Transfer agent fees....................................................... 11,593 6,648 7,315
Trustees' fees and expenses............................................... 7,036 2,495 5,946
Organization expenses..................................................... 1,381 1,381 1,381
Other..................................................................... 20,501 5,846 19,323
Fee waivers and/or expense reimbursements................................. (230,366 ) (249,533) (461,779)
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses.......................................................... 2,299,663 156,405 1,520,603
Less: Indirectly paid expenses............................................ (15,593 ) (6,081) (9,741)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses............................................................ 2,284,070 150,324 1,510,862
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income....................................................... 39,018,294 4,857,055 29,897,499
Net realized loss on investments............................................ (131,956 ) (20,697) 0
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $38,886,338 $ 4,836,358 $29,897,499
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
EVERGREEN
- ----------------------------------------------------(Evergreen Icon Goes Here)
STATEMENTS OF CHANGES IN NET ASSETS
Six Months ended August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
MONEY MARKET TAX EXEMPT TREASURY
FUND FUND FUND
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income.................................................. $ 39,018,294 $ 4,857,055 $ 29,897,499
Net realized loss on investments....................................... (131,956) (20,697) 0
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations................. 38,886,338 4,836,358 29,897,499
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME
Institutional Shares................................................... (19,688,580) (4,553,396) (17,608,374)
Institutional Service Shares........................................... (19,329,714) (303,659) (12,289,125)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders.................................. (39,018,294) (4,857,055) (29,897,499)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold.............................................. 4,366,452,876 526,826,791 2,609,682,090
Proceeds from reinvestment of distributions............................ 10,207,328 110,715 2,866,523
Payment for shares redeemed............................................ (4,209,935,389) (385,789,129) (2,109,655,703)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase from capital share transactions......................... 166,724,815 141,148,377 502,892,910
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets....................................... 166,592,859 141,127,680 502,892,910
NET ASSETS
Beginning of period.................................................... 1,442,624,935 220,418,914 877,140,872
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD.......................................................... $1,609,217,794 $ 361,546,594 $1,380,033,782
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income...................................... $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
EVERGREEN
(Evergreen Icon Appears Here)---------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Period Ended February 28, 1997
<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
MONEY MARKET TAX EXEMPT TREASURY
FUND* FUND** FUND**
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income.................................................. $ 12,167,807 $ 1,737,234 $ 6,801,751
Net realized loss on investments....................................... (1,850) (11,420) 0
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations................. 12,165,957 1,725,814 6,801,751
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME
Institutional Shares................................................... (5,904,325) (1,587,125) (3,493,244)
Institutional Service Shares........................................... (6,263,482) (150,109) (3,308,507)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders.................................. (12,167,807) (1,737,234) (6,801,751)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold.............................................. 2,578,642,264 462,534,674 1,671,272,107
Proceeds from reinvestment of distributions............................ 3,216,759 2,873 809,212
Payment for shares redeemed............................................ (1,139,232,248) (242,107,223) (794,940,457)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions....................................................... 1,442,626,775 220,430,324 877,140,862
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets....................................... 1,442,624,925 220,418,904 877,140,862
NET ASSETS
Beginning of period.................................................... 10 10 10
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD.......................................................... $1,442,624,935 $ 220,418,914 $ 877,140,872
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income...................................... $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Fund commenced operations on November 19, 1996.
** The Fund commenced operations on November 20, 1996.
SEE COMBINED NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
EVERGREEN
- ----------------------------------------------------(Evergreen Icon Goes Here)
COMBINED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Evergreen Institutional Money Market Funds consist of Evergreen
Institutional Money Market Fund ("Institutional Money Market Fund"), Evergreen
Institutional Tax Exempt Money Market Fund ("Institutional Tax Exempt Fund") and
Evergreen Institutional Treasury Money Market Fund ("Institutional Treasury
Fund"), known collectively as the "Funds". The Funds are registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as diversified
series of open-end management investment companies. Institutional Money Market
Fund and Institutional Treasury Fund are separate investment series of Evergreen
Money Market Trust. Institutional Tax Exempt Fund is a separate investment
series of The Evergreen Municipal Trust.
The Funds offer Institutional Shares and Institutional Service Shares sold at
net asset value. Institutional Service Shares pay an ongoing distribution fee.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles, which
require management to make estimates and assumptions that affect amounts
reported herein. Actual results could differ from these estimates.
A. VALUATION OF SECURITIES
Portfolio securities are valued at amortized cost which approximates market
value. The amortized cost method involves valuing a security at cost on the date
of purchase and thereafter assuming a straight-line amortization of any discount
or premium.
B. REPURCHASE AGREEMENTS
Each Fund may enter in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held by the custodian on the Fund's behalf. Each
Fund monitors the adequacy of the collateral daily and will require the seller
to provide additional collateral in the event the market value of the securities
pledged falls below the carrying value of the repurchase agreement, including
accrued interest. Each Fund will only enter into repurchase agreements with
banks and other financial institutions which are deemed by the investment
adviser to be creditworthy pursuant to guidelines established by the Board of
Trustees.
C. SECURITIES LENDING
In order to generate income and to offset expenses, the Funds may lend portfolio
securities to brokers, dealers and other financial organizations. The Funds'
investment adviser will monitor the creditworthiness of such borrowers. Loans of
securities may not exceed 30% of a Fund's total assets and will be
collateralized by cash, letters of credit or U.S. Government securities that are
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities, including accrued interest. While such
securities are on loan, the borrower will pay a Fund any income accruing
thereon, and the Fund may invest the collateral in portfolio securities, thereby
increasing its return. A Fund will have the right to call any such loan and
obtain the securities loaned at any time on five days' notice. Any gain or loss
in the market price of the loaned securities which occurs during the term of the
loan would affect a Fund and its investors. A Fund may pay reasonable fees in
connection with such loans.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Funds record when-issued or delayed delivery transactions on the trade date
and will establish and maintain a segregated account with the custodian
containing qualifying assets having a value sufficient to make payment for the
securities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked-to-market daily and begin earning interest on the settlement
date. Losses may arise due to changes in the market value of the underlying
securities or if the counterparty does not perform under the contract.
E. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums.
F. FEDERAL INCOME TAXES
The Funds have qualified and intend to continue to qualify as regulated
investment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable
income, net tax-exempt income and net capital gains, if any, to their
shareholders. The Funds also intend to avoid any excise tax liability by making
the required distributions under the Code. Accordingly, no provision for federal
income taxes is required. To the extent that realized capital gains can be
offset by capital loss carryforwards, it is each Fund's policy not to distribute
such gains.
G. DISTRIBUTIONS
Distributions from net investment income for the Funds are declared daily and
paid monthly. Distributions from net realized capital gains, if any, are paid at
least annually. Distributions to shareholders are recorded at the close of
business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles.
H. CLASS ALLOCATIONS
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the relative
net assets of each class. Currently, class specific expenses are limited to
expenses incurred under a distribution plan for the Institutional Service
Shares.
21
<PAGE>
EVERGREEN
(Evergreen Icon Appears Here)---------------------------------------------------
COMBINED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
I. ORGANIZATION EXPENSES
Organization expenses are amortized to operations over a five-year period on a
straight-line basis from commencement of operations. In the event any of the
initial shares of the Funds are redeemed by any holder during the five-year
amortization period, redemption proceeds will be reduced by any unamortized
organization expenses in the same proportion as the number of initial shares
being redeemed bears to the number of initial shares outstanding at the time of
the redemption.
2. CAPITAL SHARE TRANSACTIONS
The Funds have an unlimited number of shares of beneficial interest with a par
value of $0.001 authorized. Shares of beneficial interest of the Funds are
currently divided into Institutional Shares and Institutional Service Shares.
Transactions in shares of beneficial interest (valued at $1.00 per share) for
each Fund were as follows:
INSTITUTIONAL MONEY MARKET FUND
<TABLE>
<CAPTION>
NOVEMBER 19, 1996
SIX MONTHS (COMMENCEMENT OF
ENDED CLASS OPERATIONS) TO
AUGUST 31, 1997 FEBRUARY 28, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
Shares sold................................................... 1,728,770,162 850,921,063
Shares issued in reinvestment of distributions................ 1,820,451 24,669
Shares redeemed............................................... (1,437,785,836 ) (275,613,872)
- --------------------------------------------------------------------------------------------------------
Net increase.................................................. 292,804,777 575,331,860
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 26, 1996
SIX MONTHS (COMMENCEMENT OF
ENDED CLASS OPERATIONS) TO
AUGUST 31, 1997 FEBRUARY 28, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES
Shares sold................................................... 2,637,682,714 1,727,721,201
Shares issued in reinvestment of distributions................ 8,386,877 3,192,090
Shares redeemed............................................... (2,772,149,553 ) (863,618,376)
- --------------------------------------------------------------------------------------------------------
Net increase (decrease)....................................... (126,079,962 ) 867,294,915
- --------------------------------------------------------------------------------------------------------
</TABLE>
INSTITUTIONAL TAX EXEMPT FUND
<TABLE>
<CAPTION>
NOVEMBER 20, 1996
SIX MONTHS (COMMENCEMENT OF
ENDED CLASS OPERATIONS) TO
AUGUST 31, 1997 FEBRUARY 28, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
Shares sold................................................... 461,961,155 356,334,234
Shares issued in reinvestment of distributions................ 83,081 --
Shares redeemed............................................... (330,788,280 ) (150,200,643)
- --------------------------------------------------------------------------------------------------------
Net increase.................................................. 131,255,956 206,133,591
- --------------------------------------------------------------------------------------------------------
<CAPTION>
NOVEMBER 25, 1996
SIX MONTHS (COMMENCEMENT OF
ENDED CLASS OPERATIONS) TO
AUGUST 31, 1997 FEBRUARY 28, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES
Shares sold................................................... 64,865,636 106,200,440
Shares issued in reinvestment of distributions................ 27,634 2,873
Shares redeemed............................................... (55,000,849 ) (91,906,580)
- --------------------------------------------------------------------------------------------------------
Net increase.................................................. 9,892,421 14,296,733
- --------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
EVERGREEN
- ----------------------------------------------------(Evergreen Icon Goes Here)
COMBINED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
INSTITUTIONAL TREASURY FUND
<TABLE>
<CAPTION>
NOVEMBER 20, 1996
SIX MONTHS (COMMENCEMENT OF
ENDED CLASS OPERATIONS) TO
AUGUST 31, 1997 FEBRUARY 28, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
Shares sold................................................... 1,338,878,666 684,739,426
Shares issued in reinvestment of distributions................ 110,960 29,404
Shares redeemed............................................... (909,117,509 ) (316,997,426)
- --------------------------------------------------------------------------------------------------------
Net increase.................................................. 429,872,117 367,771,404
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 27, 1996
SIX MONTHS (COMMENCEMENT OF
ENDED CLASS OPERATIONS) TO
AUGUST 31, 1997 FEBRUARY 28, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES
Shares sold................................................... 1,270,803,424 986,532,681
Shares issued in reinvestment of distributions................ 2,755,563 779,808
Shares redeemed............................................... (1,200,538,194 ) (477,943,031)
- --------------------------------------------------------------------------------------------------------
Net increase.................................................. 73,020,793 509,369,458
- --------------------------------------------------------------------------------------------------------
</TABLE>
3. SECURITIES TRANSACTIONS
The Institutional Treasury Money Market Fund loaned securities during the six
months ended August 31, 1997 to certain brokers who paid the Fund a negotiated
lenders' fee. These fees are included in interest income. The Fund received cash
as collateral against the loaned securities in an amount at least equal to 100%
of the market value of the loaned securities at the inception of each loan. The
Fund monitors the adequacy of the collateral daily and will require the broker
to provide additional collateral in the event the value of the collateral falls
below 100% of the market value of the securities on loan. At August 31, 1997,
the value of securities on loan and the value of collateral amounted to
$173,843,996 and $174,918,750, respectively. During the six months ended August
31, 1997, the Fund earned $91,935 in income from securities lending
transactions.
As of February 28, 1997, the Institutional Money Market and Institutional Tax
Exempt Funds had capital loss carryovers for federal income tax purposes of
$1,850 and $11,420, respectively, expiring in the year 2005.
4. DISTRIBUTION PLANS
Evergreen Keystone Distributor, Inc. ("EKD"), a wholly-owned subsidiary of The
BISYS Group Inc. ("BISYS"), serves as the principal underwriter to the Funds.
Each Fund has adopted a Distribution Plan (the "Plan") for its Institutional
Service Shares as allowed by Rule 12b-1 of the 1940 Act. The Plan permits each
Fund to reimburse its principal underwriter for costs related to selling shares
of the Fund and for various other services. These costs, which consist primarily
of commissions and services fees to broker-dealers who sell shares of the Fund,
are paid by shareholders through expenses called "Distribution Plan expenses".
Under the terms of the Plan, the Funds incur distribution-related and
shareholder servicing expenses which may not exceed 0.25% of the average daily
net asset value of each Fund's outstanding Institutional Service Shares.
Distribution Plan expenses are calculated daily and paid monthly.
EKD intends, but is not obligated, to continue to pay distribution costs that
exceed the current annual payments from the Fund. EKD intends to seek full
payment of such distribution costs from the Fund at such time in the future as,
and to the extent that, payment thereof by the Institutional Service Shares
would be within permitted limits.
23
<PAGE>
EVERGREEN
(Evergreen Icon Appears Here)---------------------------------------------------
COMBINED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
5. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
The Capital Management Group ("CMG") of First Union National Bank of North
Carolina ("FUNB") serves as the investment adviser to the Funds. FUNB is a
subsidiary of First Union Corporation ("First Union"). CMG is paid a fee
computed daily and paid monthly at an annual rate of 0.15% of the average daily
net asset value of each Fund.
For the six months ended August 31, 1997, CMG voluntarily waived and reimbursed
expenses as follows:
<TABLE>
<CAPTION>
MANAGEMENT ADMINISTRATION EXPENSES
FEE WAIVER FEE WAIVER REIMBURSED
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Institutional Money Market Fund........................ $230,366 $ 0 $ 0
Institutional Tax Exempt Fund.......................... 201,366 39,282 8,885
Institutional Treasury Fund............................ 461,779 0 0
</TABLE>
CMG can modify or discontinue these voluntary waivers and reimbursements at any
time.
Evergreen Keystone Investment Services, Inc. ("EKIS"), a wholly-owned subsidiary
of FUNB, serves as the administrator for each Fund. Prior to March 11, 1997,
Evergreen Asset Management Corp. ("Evergreen Asset"), a wholly-owned subsidiary
of FUNB, was the administrator. Furman Selz LLC ("Furman Selz") was the
sub-administrator through December 31, 1996. Effective January 1, 1997, BISYS
acquired Furman Selz' mutual fund unit and accordingly BISYS became
sub-administrator. The administrator and sub-administrator for each Fund is
entitled to an annual fee based on the average daily net assets of the funds
administered by EKIS for which First Union or its investment advisory
subsidiaries are also the investment advisers. The administration fee is
calculated by applying percentage rates, which start at 0.05% and decline to
0.01% per annum as net assets increase, to the average daily net asset value of
each Fund. The sub-administration fee is calculated by applying percentage
rates, which start at 0.01% and decline to .004% as net assets increase, to the
average daily net asset value of each Fund.
Officers of the Funds and affiliated Trustees receive no compensation directly
from the Funds. As sub-administrator, BISYS compensates the officers of the
Funds.
During the six months ended August 31, 1997, the Funds paid or accrued to EKIS
the following amounts for certain administrative services:
<TABLE>
<S> <C>
Institutional Money Market Fund.............................. $212,261
Institutional Tax Exempt Fund................................ 39,282
Institutional Treasury Fund.................................. 166,110
</TABLE>
Effective May 5, 1997, Evergreen Keystone Service Company ("EKSC"), a
wholly-owned subsidiary of FUNB, serves as the transfer and dividend disbursing
agent for the Funds. Prior to that date, State Street Bank and Trust Company
("State Street") provided the transfer and dividend disbursing services.
6. EXPENSE OFFSET ARRANGEMENT
The Funds have entered into an expense offset arrangement with their custodian.
The assets deposited with the custodian under this expense offset arrangement
could have been invested in income-producing assets.
7. DEFERRED TRUSTEES' FEES
Each Independent Trustee of the Funds may defer any or all compensation related
to performance of duties as a Trustee. Each Trustee's deferred balances are
allocated to deferral accounts which are included in the accrued expenses for
each Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Keystone Funds. Any gains earned or
losses incurred in the deferral accounts are reported in each Fund's Trustees's
fees and expenses. Trustees will be paid either in one lump sum or in quarterly
installments for up to ten years at their election, not earlier than either the
year in which the Trustee ceases to be a member of the Board of Trustees or
January 1, 2000. As of August 31, 1997, the value of the Trustees deferral
account was as follows:
<TABLE>
<S> <C>
Institutional Money Market Fund................................ $4,096
Institutional Tax Exempt Fund.................................. 2,348
Institutional Treasury Fund.................................... 3,672
</TABLE>
8. FINANCING AGREEMENT
On October 31, 1996, a financing agreement between all of the Evergreen Funds
and State Street, Societe Generale and ABN Amro Bank N.V. (collectively, the
"Banks") became effective. Under this agreement, the Banks provide an unsecured
credit facility in the aggregate amount of $225 million ($112.5 million
committed and $112.5 million uncommitted) allocated evenly between the Banks.
Borrowings under this facility bear interest at 0.75% per annum above the
Federal Funds rate. A commitment fee of 0.10% per annum will be incurred on the
unused portion of the committed facility which will be allocated to all
participating funds. State Street acts as agent for the Banks, and as agent is
entitled to a fee of $15,000 which is allocated to all of the Evergreen Funds.
During the six months ended August 31, 1997, the Funds had no borrowings under
this agreement.
24
<PAGE>
This brochure must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
-----------------------------
|
NOT | May lose value
FDIC | No bank guarantee
INSURED |
-------------------------------
Evergreen Funds Distributor, Inc.
540713 Rev.01
10/97
