THE TREASURER'S FUND
ANNUAL REPORT
OCTOBER 31, 1998(a)
TO OUR SHAREHOLDERS,
As the seasons change, are we witnessing a shift in the U.S. Treasury
markets, which have had a record run in the third quarter? Recent stability in
the worldwide equity markets resulting from three rate cuts by the Federal Open
Market Committee ("FOMC") (the latest coming on November 17) has driven yields
across the entire curve higher, reflecting a near term change. The Federal
Reserve Board, signaling its readiness to react to spreading contagion from the
East, gave those who fled to the liquidity and safety of the Treasury market a
sense that indeed some measure of risk is acceptable. Credit and swap spreads
had widened to record levels, showing not only an aversion to risk, but also a
need by most investors to be in the most liquid holdings. Of major concern to
Federal Reserve Board Chairman Alan Greenspan was the spread between on-the-run
Treasuries ("current" Treasuries) and off-the-run Treasuries ("non-current"
Treasuries). Reflecting the flight to liquidity frenzy, the roll to the new,
more liquid 30-year Treasury was at one point giving 17 basis points (normally
the spread is one to two basis points). To stem the possibility of a deepening
credit crunch, Fed Chairman Greenspan shrugged off stronger economic news and
eased rates, sending a strong signal that the Fed was acting pro-actively.
Continuing to underscore the FOMC's concern over the "unusual strains" in
the financial system, the policy making arm of the Fed lowered its Federal Funds
target and discount rate by 25 basis points at its November 17 meeting.
Our fundamental view of the world and markets has not changed. We still
view the Treasury market as expensive in relation to current Fed policy.
However, since the global economic problems have yet to be fully solved, we feel
a minor trading stake in the Treasury market is warranted. We still believe that
the overall impact of the Asian crisis on the U.S. economy will be less drastic
than projected and consumer momentum will continue, albeit at a slower rate. We
believe that a slowdown from the torrid economic pace of early 1998 is taking
place, but a full-blown recession is not in the cards. We thus
- ----------------------------------------
(a) The Fund's fiscal year ends October 31.
<PAGE>
remain cautious longer term, pointing to continued strength in the domestic
labor markets and a strong rise in the third quarter Employment Cost Index
("ECI"). With most of the curve trading through the Fed Funds target, something
has to give, whether from further easings or an upward adjustment in yields. We
see both of these paths converging.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, IRAs, 401(k)s, quarterly reports, closing prices and other
current news. You can send us e-mail at [email protected].
CONCLUSION
We thank you for your loyalty and as always, pledge our best efforts on
your behalf as we seek to provide you with competitive returns. Please call us
at 1-800-GABELLI (1-800-422-3554) or 1-800-TSR-FUND (1-800-877-3863) during the
business day for further information.
Sincerely,
/s/JUDITH A. RANERI
--------------------
JUDITH A. RANERI
Portfolio Manager
November 30, 1998
- --------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Total returns and average
annual returns, which reflect changes in investment income, are net of expenses.
Investment returns and yields will fluctuate. An investment in The Treasurer's
Fund Portfolios are neither insured nor guaranteed by the U.S. Government or the
Federal Deposit Insurance Corporation. Although the Fund seeks to preserve the
value of an investment at $1.00 per share, there can be no assurance that the
Fund will maintain a stable $1.00 per share net asset value, so it is possible
to lose money by investing in the Fund. The Fund's prospectus contains more
complete information, including fees and expenses. The prospectus should be read
carefully before investing or sending money.
2
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
DOMESTIC PRIME MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS -- OCTOBER 31, 1998
========================================================================================================
PRINCIPAL CREDIT MARKET
AMOUNT RATINGS* VALUE
- -------- ------- ------
<S> <C> <C> <C>
COMMERCIAL PAPER - 21.2%
$ 5,000,000 First Chicago Financial Corp., 5.43%, 11/09/98 ............ A1/P1 $ 4,993,967
12,000,000 Island Finance Puerto Rico, Inc., 5.47%, 11/09/98 ......... A1/P1 11,985,413
10,000,000 Louis Dreyfus Corp., 5.16%, 11/13/98 ...................... A1+/P1 9,982,800
5,000,000 Avnet Inc., 5.29%, 11/20/98 ............................... A1/P1 4,986,040
12,000,000 Republic Industries Funding Corp., 5.23%, 11/25/98 ........ A1/P1 11,958,160
12,000,000 Transamerica Corp., 5.48%, 11/30/98 ....................... A1+/P1 11,947,027
10,050,000 International Lease Finance Corp., 5.48%, 12/02/98 ........ A1/P1 10,002,575
10,000,000 Avco Financial Services Inc., 5.41%, 12/17/98 ............. A1+/P1 9,930,872
-----------
TOTAL COMMERCIAL PAPER 75,786,854
-----------
MEDIUM TERM AND SENIOR NOTES - 4.2%
10,000,000 Travelers Life & Annuity Funding Agreement, 5.41%,
11/15/98, 04/15/99+ ..................................... NR/NR 10,000,000
5,000,000 Morgan Guaranty Trust (JPM), 5.24%,
11/30/98, 11/29/99+ ..................................... Aa2/AA+ 4,999,496
-----------
TOTAL MEDIUM TERM AND SENIOR NOTES 14,999,496
-----------
ADJUSTABLE RATE SECURITIES - 5.8%
7,000,000 Maine Finance Authority Electric Rate Stabilization,
Series 1998-A, 5.50%, 11/04/98, AMBAC Insured, SPA
- Fleet Bank, 06/01/08+ .............................. NR/VMIG1 7,000,000
9,300,000 Health Insurance Plan of Greater New
York, Series B, 5.25%, 11/04/98, Letter of Credit
- Morgan Guaranty Trust, 07/01/16+ ................ A1+/NR 9,300,000
4,600,000 New Jersey Economic Development Authority, 5.36%, 11/02/98,
10/01/21+ ................................................. A1+/P1 4,600,000
-----------
TOTAL ADJUSTABLE RATE SECURITIES 20,900,000
-----------
LOAN PARTICIPATIONS - 4.2%
15,000,000 Pacific Financial Asset Management, 5.58%, 11/04/98 ....... NR/NR 15,000,000
-----------
U.S. GOVERNMENT AGENCY MORTGAGES - 24.0%
10,000,000 Federal Farm Credit Bank, 5.50%, 11/02/98 ................. 10,000,000
10,000,000 Federal Farm Credit Bank, 5.48%, 12/01/98 ................. 10,000,000
10,000,000 Federal Farm Credit Bank, 5.32%, 01/04/99 ................. 10,000,000
10,000,000 Federal Farm Credit Bank, 4.85%, 02/01/99 ................. 10,000,000
5,000,000 Federal Home Loan Bank, 5.68%, 11/04/98 ................... 5,000,000
5,000,000 Federal Home Loan Bank, 4.61%, 11/04/98, 04/01/99+ ........ 4,999,483
5,000,000 Federal Home Loan Bank, 5.15%, 09/30/99 ................... 5,000,000
10,000,000 Federal Home Loan Bank, 5.13%, 10/13/99 ................... 10,000,000
5,000,000 Federal Home Loan Bank, 5.00%, 10/27/99 .................... 5,000,000
2,000,000 Federal Home Loan Bank, 4.94%, 10/27/99 ................... 2,000,000
5,000,000 Federal Home Loan Bank, 5.03%, 10/29/99 ................... 5,000,000
4,000,000 Federal Home Loan Bank, 5.03%, 11/05/99 ................... 4,000,000
5,000,000 Student Loan Marketing Assoc., 4.90%, 10/27/99 ............ 5,000,000
-----------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGES ................... 85,999,483
-----------
REPURCHASE AGREEMENTS - 45.9%
70,000,000 ABN AMRO, 5.55%, dated 10/30/98,
due 11/02/98, proceeds at maturity $70,032,375 (a) ..... 70,000,000
50,000,000 Citibank, 5.35%, dated 10/30/98,
due 11/02/98, proceeds at maturity $50,022,292 (b) ..... 50,000,000
44,035,509 Bear Stearns & Co., Inc., 5.39%, dated 10/30/98,
due 11/02/98, proceeds at maturity $44,055,288 (c) ..... 44,035,509
------------
TOTAL REPURCHASE AGREEMENTS .............................. 164,035,509
------------
See accompanying notes to financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
DOMESTIC PRIME MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS (CONTINUED) -- OCTOBER 31, 1998
================================================================================================
<S> <C> <C>
TOTAL INVESTMENTS (Cost $376,721,342) (d) ............................. 105.3% $376,721,342
PAYABLE TO MANAGER .................................................... (0.0)% (94,006)
PAYABLE TO ADMINISTRATOR .............................................. (0.0)% (28,393)
PAYABLE FOR SECURITIES PURCHASED ...................................... (5.3)% (18,999,493)
DIVIDENDS PAYABLE ..................................................... (0.1)% (487,185)
OTHER ASSETS AND LIABILITIES (NET) .................................... 0.1% 737,364
----- -----------
NET ASSETS (357,886,830 shares of beneficial interest outstanding,
$0.001 par value, two billion shares authorized) .................... 100.0% $357,849,629
===== ============
COMPOSITION OF NET ASSETS
Paid-in-capital ....................................................... $357,805,679
Undistributed net investment income ................................... 46,175
Accumulated net realized loss on investments .......................... (2,225)
------------
NET ASSETS ............................................................ $357,849,629
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE .............. $1.00
=====
</TABLE>
- --------------------------------------------
+ Variable rate security. The short term date shown reflects the next rate
change.
(a) Collateralized by Federal Farm Credit Bank Note, 6.52%, due 01/08/08, market
value $71,400,961.
(b) Collateralized by U.S. Treasury Bond, 9.25%, due 02/15/16, market value
$51,004,688.
(c) Collateralized by U.S. Treasury STRIPS, 8.125% to 11.25%, due 08/15/01 to
05/15/21, market value $44,916,926.
(d) Aggregate cost for Federal tax purposes.
AMBAC - AMBAC Indemnity Corporation, SPA - Standby Purchase Agreement.
* Credit ratings issued by Standard & Poor's Corporation, Moody's Investors
Services Inc. and Fitch Investors Service Inc.(Unaudited). Standard & Poor's
credit rating of A1,Moody's credit rating of P1 and VMIG1 and Fitch's credit
rating of F1 reflect instruments of the highest quality.Credit ratings of NR
indicate that the security is not rated. In the opinion of the Manager, such
instruments are judged to be of comparable investment quality to rated
securities which may be purchased by the Portfolios.
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS -- OCTOBER 31, 1998
================================================================================
PRINCIPAL CREDIT MARKET
AMOUNT RATINGS* VALUE
--------- ------- ------
SHORT-TERM MUNICIPAL OBLIGATIONS - 99.6%
ALABAMA - 5.7%
<S> <C> <C> <C>
$4,600,000 Columbia Alabama Industrial Development Board, Pollution
Control Revenue, Alabama Power Company Project,
Series D, 3.60%, 11/02/98, 10/01/22+ ................................ VMIG1/A1 $ 4,600,000
1,000,000 Huntsville Industrial Development Board, Avco Corporation Project,
Series 1982, 3.60%, 11/05/98, LOC - Wachovia Bank of
Georgia, 11/01/99+ .................................................. NR/NR 1,000,000
6,500,000 Stevenson Alabama Industrial Development Board,
Environmental Improvement Revenue, Mead Corporation
Project, Series B, 3.80%, 11/02/98, LOC - First National
Bank of Chicago, 04/01/33+ .......................................... A1+/NR 6,500,000
-----------
TOTAL ALABAMA 12,100,000
-----------
ARIZONA - 5.3%
500,000 Arizona Health Facility, Pooled Loan Program, Series 1985,
3.20%, 11/04/98, FGIC Insured, 10/01/15+ ............................ VMIG1/A1 500,000
3,000,000 Maricopa County Pollution Control, 3.70%, 11/02/98, LOC -
Bank of America, 05/01/29+ .......................................... A1+/P1 3,000,000
5,000,000 Maricopa County Pollution Control, El Paso Electric
Company Project, Series A, 3.20%, 11/04/98, FGIC Insured,
SPA - Chemical Bank, 07/01/14+ ...................................... VMIGI/A1 5,000,000
2,900,000 Scottsdale Industrial Development Authority Revenue,
Scottsdale Memorial Health Systems Project,
Series B, 3.05%, 11/04/98, AMBAC Insured, SPA -
Credit Local de France, 09/01/22+ ................................... VMIG1/A1+ 2,900,000
-----------
TOTAL ARIZONA ........................................................................ 11,400,000
-----------
COLORADO - 0.5%
1,085,000 Colorado Health Facilities Authority, Boulder Community
Hospital Project, Series C, 3.00%, 11/05/98, MBIA Insured,
SPA - Rabobank Nederland, 10/01/14+ ............................... VMIG1/A1+ 1,085,000
-----------
CONNECTICUT - 1.4%
3,000,000 Connecticut State Special Assessment Unemployment Compensation,
Series C, 3.60%, 07/01/99, FGIC Insured, 11/15/01+ ................ VMIG1/A1+/F1+ 3,000,000
-----------
FLORIDA - 5.5%
2,910,000 Broward County Florida Housing Financial Authority
Multi-family Housing Revenue, Lake Park Associates Limited
Partnership, 3.10%, 11/04/98, 12/01/10+ ......................... NR/A1 2,910,000
1,000,000 Dade County Health Facilities Authority, Miami Children's
Hospital Project, Series 1990, 3.75%, 11/02/98, LOC -
Barnett Bank of South Florida, 09/01/20+ .......................... VMIG1/NR 1,000,000
4,500,000 Florida Gulf Coast University, 3.10%, 11/05/98, LOC -
First Union National Bank, 08/01/27+ .............................. NR/A1 4,500,000
1,225,000 Indian Trace Community Development, Updates-Basin 1
Water Management, Series A, 3.05%, 11/04/98, MBIA
Insured, SPA - Swiss Bank Corp., 05/01/11+ ....................... VMIG1/A1+ 1,225,000
2,000,000 Lee County Industrial Development Authority, Health Care
Facilities Revenue, Var-Cypress Cove, 3.10%, 11/04/98,
LOC - Kredietbank N.V.,10/01/04+ .................................. VMIG1/NR 2,000,000
-----------
TOTAL FLORIDA ........................................................................ 11,635,000
-----------
See accompanying notes to financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS -- OCTOBER 31, 1998
================================================================================
PRINCIPAL CREDIT MARKET
AMOUNT RATINGS* VALUE
--------- ------- ------
<S> <C> <C> <C>
GEORGIA - 7.2%
$1,615,000 Atlanta Georgia Water & Sewer Revenue, 5.00%, 01/01/99,
FGIC Insured .................................................... Aaa/AAA $ 1,618,679
1,800,000 Burke County Development Authority, Pollution Control
Revenue, Georgia Power Company, 3.60%, 11/02/98, 07/01/24+ ...... VMIG1/A1/F1 1,800,000
7,040,000 Burke County Development Authority, Pollution Control
Revenue, Ogelthorpe Power Corporation, Series A, 3.05%,
11/04/98, FGIC Insured, SPA - Canadian Imperial Bank,
01/01/16+ ....................................................... VMIG1/A1+ 7,040,000
2,700,000 DeKalb Private Hospital Authority, Egleston Children's Hospital,
Series A, 3.10%, 11/04/98, LOC - Suntrust Bank, 03/01/24+ ....... VMIG1/A1+ 2,700,000
2,500,000 Monroe County Development Authority Pollution Control
Revenue, Georgia Power Company Project, 3.70%,
11/02/98, 09/01/29+ ............................................. VMIG1/A1 2,500,000
-----------
TOTAL GEORGIA ................................................................ 15,658,679
-----------
ILLINOIS - 4.5%
2,600,000 Illinois Health Facilities Authority Revenue Updates, Hospital
Sisters Service, Series E, 3.20%, 11/04/98, MBIA Insured,
SPA - Morgan Guaranty Trust, 12/01/15+ .......................... VMIG1/AAA 2,600,000
1,650,000 Illinois State, 3.90%, 12/01/98 ................................. Aa2/AA 1,650,851
2,900,000 Illinois State Toll Highway Authority, Series B, 3.05%,
11/04/98, MBIA Insured, LOC - Societe Generale,
01/01/10+ .......... ............................................ VMIG1/A1+/F1+ 2,900,000
2,400,000 Will County Solid Waste Disposal Revenue, BASF
Corporation Project, 3.85%, 11/02/98, 07/01/32+ ................. P1/NR 2,400,000
-----------
TOTAL ILLINOIS 9,550,851
-----------
INDIANA - 1.0%
2,000,000 Franklin Township Marion County, Multiple School Building
Corporation, 7.50%, 01/15/99, State Aid Withholding Insured,
07/15/09+ ....................................................... Aaa/AAA 2,040,000
-----------
KENTUCKY - 0.6%
1,255,000 Kentucky Development Finance Authority, Pooled Loan
Program, Series A, 3.00%, 11/05/98, FGIC Insured, SPA -
Landesbank Hessen, 12/01/15+ .................................... VMIG1/A1+ 1,255,000
-----------
LOUISIANA - 5.3%
5,000,000 East Baton Rouge Mortgage Financial Authority, Single
Family Auth., Series C-4, 3.55%, 12/03/98, 10/01/27+ ............ VMIG1/NR 5,000,000
1,700,000 Louisiana State Offshore Term Authority, Deepwater Port
Revenue ACES, Loop Inc. 1st Stage, 3.70%, 11/02/98,
LOC - Union Bank of Switzerland, 09/01/06+ ...................... VMIG1/NR 1,700,000
3,600,000 Parish of East Baton Rouge, Pollution Control Revenue,
Exxon Corporation Project, Series 1989, 3.70%, 11/02/98,
11/01/19+ ....................................................... P1/A1+ 3,600,000
1,000,000 Placquemines Louisiana Port Harbor & Term District Marine
Facility, Electro-Coal Transfer, Series B, 3.45%, 12/09/98,
09/01/07+ ....................................................... P1/A1+ 1,000,000
-----------
TOTAL LOUISIANA ................................................................. 11,300,000
-----------
See accompanying notes to financial statements.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS -- OCTOBER 31, 1998
================================================================================
PRINCIPAL CREDIT MARKET
AMOUNT RATINGS* VALUE
--------- ------- ------
MARYLAND - 0.5%
<S> <C> <C> <C>
$1,100,000 Northeast Maryland Waste Disposal Authority, Hartford
County Resource Recovery Revenue, 2.95%, 11/04/98,
AMBAC Insured, SPA - Credit Local de France, 01/01/08+ ............ VMIG1/A1+ $ 1,100,000
------------
MASSACHUSETTS - 1.6%
3,350,000 Massachusetts State Industrial Finance Agency, Showa
Women's Institute Inc., 3.55%, 11/02/98, 03/15/04+ ................ VMIG1/A1+ 3,350,000
-----------
MICHIGAN - 3.2%
4,000,000 Michigan Higher Education Student Loan, Series XII B,
3.15%, 11/04/98, AMBAC Insured, SPA - Kredietbank N.V.,
10/01/13+ ......................................................... VMIG1/A1 4,000,000
1,500,000 Midland County Economic Development Corp. Revenue,
Dow Chemical Company Project, Series B, 3.75%,
11/02/98, 12/01/15+ ............................................... P1/A1 1,500,000
1,400,000 Wayne Charter County Airport, Detroit Metropolitan County
Project, Series B, 3.15%, 11/04/98, LOC - Bayerische
Landesbank, 12/01/16+ ............................................. VMIG1/A1+ 1,400,000
-----------
TOTAL MICHIGAN ..................................................... 6,900,000
-----------
MINNESOTA - 3.6%
2,300,000 Rochester Minnesota Health Care, Mayo Foundation, Mayo
Medical Center, Series A, 3.55%, 11/16/98, 11/15/18+ ........... NR/A1+ 2,300,000
2,800,000 Rochester Minnesota Health Care, Mayo Foundation, Mayo
Medical Center, Series C, 3.15%, 02/10/99, 11/15/21+ ............ NR/A1+ 2,800,000
2,500,000 Rochester Minnesota Health Care, Mayo Foundation, Mayo
Medical Center, Series A, 3.05%, 12/03/98, 11/15/18+ .......... NR/A1+ 2,500,000
-----------
TOTAL MINNESOTA .................................................... 7,600,000
-----------
MISSOURI - 1.2%
2,500,000 Missouri State Health & Educational Facilities Authority,
Christian Health Service, Series A, 2.95%, 11/04/98, LOC -
Morgan Guaranty Trust, 11/01/19+ .................................. NR/A1+ 2,500,000
-----------
NEVADA - 2.1%
4,402,000 Clark County Nevada Airport Improvement Revenue,
Series A, 3.05%, 11/04/98, MBIA Insured, SPA - National
Westminster, 07/01/12+ .......................................... VMIG1/A1+ 4,402,000
-----------
NEW JERSEY - 1.4%
2,500,000 New Jersey Economic Development Authority, El Dorado
Term-1984, Dow Chemical Company Project, Series A,
3.50%, 11/02/98, 05/01/01+ ....................................... P1/NR 2,500,000
500,000 New Jersey Economic Development Authority, Water
Facilities Revenue, United Water New Jersey Inc. Project,
Series B, 3.55%, 11/02/98, AMBAC Insured, SPA - Bank of
New York, 11/01/25+ ............................................... VMIG1/A1+ 500,000
-----------
TOTAL NEW JERSEY ................................................... 3,000,000
-----------
NEW MEXICO - 1.4%
2,900,000 Albuquerque New Mexico, Gross Receipts Lodgers Tax
Revenue, Series A, 3.10%, 11/04/98, LOC - Canadian
Imperial Bank, 07/01/22+ .......................................... VMIG1/A1+ 2,900,000
-----------
See accompanying notes to financial statements.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS (CONTINUED) -- OCTOBER 31, 1998
================================================================================================================
PRINCIPAL CREDIT MARKET
AMOUNT RATINGS* VALUE
--------- ------- ------
NEW YORK - 6.6%
<S> <C> <C> <C>
$4,000,000 Long Island Power Authority, Electric Systems Revenue,
Series 6, 3.60%, 11/02/98, 05/01/33+ .............................. VMIG1/A1+ $ 4,000,000
4,300,000 New York City Municipal Water Finance Authority, Water &
Sewer Systems Revenue, Series C, 3.70%, 11/02/98, FGIC
Insured, SPA, 06/15/23+ ........................................... VMIG1/A1+ 4,300,000
2,000,000 New York City Subser A-5, 3.70%, 11/02/98, LOC
Kredietbank N.V., 08/01/16+ ....................................... VMIG1/A1+ 2,000,000
1,925,000 New York State Job Development Authority, Series
A-1-A-42, 3.65%, 11/02/98, State Guaranteed, 03/01/05+ ............ VMIG1/A 1,925,000
1,300,000 New York State Local Government Assistance Corporation,
Series G, 2.70%, 11/04/98, LOC - Bank of Nova Scotia,
04/01/25+ ......................................................... VMIG1/A1+ 1,300,000
500,000 State of New York Dormitory Authority, Beverwyck Inc.
Project, 2.90%, 11/04/98, LOC - Banque Paribas, 07/01/25+ ......... VMIG1/A1 500,000
-----------
TOTAL NEW YORK ..................................................... 14,025,000
-----------
NORTH CAROLINA - 6.6%
3,900,000 Charlotte Airport Revenue, Series A, 3.15%, 11/04/98,
MBIA Insured, SPA - Chase Manhattan Bank, 07/01/17+ ............... VMIG1/A1+ 3,900,000
5,000,000 Charlotte-Mecklenberg Hospital Authority, Series D, 3.10%,
11/05/98, 01/15/26, Liquidity Facility - NationsBank+ ............. VMIG1/A1+ 5,000,000
1,000,000 Lenoir County Industrial Facilities & Pollution Control, Series
1983, Texasgulf Inc. Project, 3.23%, 11/05/98,
LOC - Bank of Nova Scotia, 12/01/03+ .............................. A1/NR 1,000,000
3,100,000 North Carolina Eastern Municipal Power Agency, Series 1988 B, 3.50%,
01/13/99, AMBAC Insured, 01/01/26+ .............................. A1+/NR 3,100,000
1,100,000 North Carolina Educational Facilities Finance Authority
Revenue, Elon College Project, 3.10%, 11/04/98, AMBAC
Insured, SPA Credit Local de France, 01/01/19+ ............... VMIG1/A1+ 1,100,000
-----------
TOTAL NORTH CAROLINA ............................................... 14,100,000
-----------
OREGON - 4.2%
3,925,000 Oregon State Housing & Community Services, Series C,
3.75%, 05/13/99 ................................................... NR/NR 3,925,000
5,100,000 Port of Portland, Horizon Air Industries Inc. Project, 3.75%,
11/04/98, LOC - Bank of Montreal, 06/15/27+ ....................... NR/A1+ 5,100,000
-----------
TOTAL OREGON ....................................................... 9,025,000
-----------
PENNSYLVANIA - 4.8%
1,000,000 Delaware County Industrial Development Authority, Airport
Facilities Revenue, United Parcel Service Project, 3.60%,
11/02/98, 12/01/15+ Aaa/A-1+ 1,000,000
1,300,000 Pennsylvania Energy Development Authority, Ebensburg Project,
3.15%, 11/04/98, LOC - Swiss Bank Corp., 12/01/11+ ............... Aa1/NR 1,300,000
7,000,000 Philadephia Water & Waste Water Revenue, Series B,
3.05%, 11/04/98, AMBAC Insured, SPA - Commerzbank
A.G., 08/01/27+ .................................................. VMIG1/A1 7,000,000
1,000,000 Quakertown General Authority Revenue, Pooled Financing,
Series A, 3.25%, 11/04/98, LOC - PNC Bank National
Association, 06/01/28+ ........................................... VMIG1/A1+ 1,000,000
-----------
TOTAL PENNSYLVANIA ................................................................. 10,300,000
-----------
See accompanying notes to financial statements.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS (CONTINUED) -- OCTOBER 31, 1998
================================================================================================================
PRINCIPAL CREDIT MARKET
AMOUNT RATINGS* VALUE
--------- ------- ------
SOUTH CAROLINA - 1.2%
<S> <C> <C> <C>
$2,600,000 South Carolina Educational Facilities Authority for Non-profit
Instns. Furman University Project, Series B, 2.95%, 11/05/98,
MBIA Insured, SPA - Wachovia Bank of South Carolina,
10/01/26+ ......................................................... VMIG1/AAA/F1+ $ 2,600,000
------------
TENNESSEE - 5.3%
700,000 Clarksville Public Building Authority, Pooled Financing, Series
1990, 3.05%, 11/04/98, MBIA Insured, SPA - Credit Suisse First
Boston, 07/01/13+ ................................................. VMIG1/A1+ 700,000
7,400,000 Johnson City Health & Educational Facilities Board Revenue,
Johnson City Medical Center Project, Series A, 3.20%,
11/04/98, MBIA Insured, SPA - Credit Suisse First Boston,
11/01/99+ ......................................................... VMIG1/A1+ 7,400,000
3,300,000 Metropolitan Nashville Airport Authority, Special Facilities
Revenue, American Airlines Inc. Project, Series B, 3.65%,
11/02/98, LOC - Bayerische Landesbank, 10/01/12+ .................. NR/A1+ 3,300,000
------------
TOTAL TENNESSEE .................................................... 11,400,000
------------
TEXAS - 6.3%
1,000,000 Brazos River Harbor Navigation District, Series 1990, 3.00%,
12/09/98 .......................................................... A1/P1 1,000,000
1,000,000 Brazos River Harbor Navigation District, Series 1990, 3.50%,
12/09/98 .......................................................... A1/P1 1,000,000
2,930,000 Harris County Health Facilities Development Corporation
Revenue, St. Lukes Episcopal Hospital Project, Series B,
3.65%, 11/02/98, SPA - Morgan Guaranty Trust, 02/15/27+ ........... NR/A1+ 2,930,000
2,750,000 Harris County Housing Financial Corporation, Multi Family
Housing Revenue, Idlewood Park Development, Series A,
3.30%, 11/04/98, LOC - New England Mutual Life,
06/01/05+ ......................................................... NR/A1+ 2,750,000
1,000,000 North Central Health Facilities Development, Presbyterian
Medical Center Project, Series C, 3.65%, 11/02/98, MBIA
Insured, SPA - Nationsbank of Texas, 12/01/15+ .................... VMIG1/A1+ 1,000,000
700,000 North Central Texas Health Facility Development Corporation
Presbyterian Medical Center Project, Series D, 3.65%,
11/02/98, MBIA Insured, SPA - Nationsbank of Texas,
12/01/15+ ......................................................... VMIG1/A1+ 700,000
3,950,000 South Texas Higher Education Authority Incorporated,
3.15%, 11/04/98, MBIA Insured, SPA - Student Loan
Marketing Association, 12/01/27+ .................................. VMIG1/NR 3,950,000
-----------
TOTAL TEXAS ........................................................ 13,330,000
-----------
UTAH - 0.4%
900,000 Utah State Board of Regents Student Loan Revenue,
Series C, 3.10%, 11/04/98, AMBAC Insured, SPA - Dresdner
Bank, 11/01/13+ .................................................... VMIG1/A1+ 900,000
-----------
VIRGINIA - 2.7%
5,750,000 Alexandria Industrial Development Authority, Ogden
Corporation Project, 3.80%, 11/02/98, LOC - Westdeutsche
Landesbank, 12/01/16+ .............................................. VMIG1/A1+ 5,750,000
-----------
See accompanying notes to financial statements.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS (CONTINUED) -- OCTOBER 31, 1998
================================================================================================================
PRINCIPAL CREDIT MARKET
AMOUNT RATINGS* VALUE
--------- ------- ------
WASHINGTON - 4.1%
<S> <C> <C> <C>
$1,500,000 Seattle Washington Municipal Light & Power Revenue,
3.05%, 11/04/98, SPA - Morgan Guaranty Trust, 06/01/21+ ........... VMIG1/A1+ $ 1,500,000
2,200,000 Washington State Health Care Facilities Authority, Virginia
Mason Medical Center Project, Series B, 3.65%, 11/02/98,
MBIA Insured, 02/15/27+ VMIG1/A1+ 2,200,000
5,000,000 Washington State Public Power Supply System, Project
Number 2, Electric Revenue, 3.05%, 11/04/98, MBIA
Insured, SPA - C.S. First Boston, 07/01/12+ ....................... VMIG1/A1+ 5,000,000
------------
TOTAL WASHINGTON ................................................... 8,700,000
------------
WYOMING - 5.4%
2,000,000 Lincoln County Pollution Control Revenue, Exxon Corporation
Project, Series B, 3.45%, 12/10/98, 11/01/14+ ..................... NR/NR 2,000,000
1,250,000 Lincoln County Pollution Control Revenue, Exxon Corporation
Project, Series C, 3.70%, 11/02/98, 11/01/14+ ..................... P1/A1+ 1,250,000
4,700,000 Lincoln County Pollution Control Revenue, Exxon Corporation
Project, Series D, 3.70%, 11/02/98, 11/01/14+ ..................... P1/A1+ 4,700,000
3,500,000 Lincoln County Pollution Control Revenue, Pacific Corporation
Project, 3.40%, 11/18/98, LOC - Union Bank of Switzerland,
01/01/06+ ......................................................... VMIG1/A1+ 3,500,000
------------
TOTAL WYOMING ...................................................... 11,450,000
------------
TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS ............................. 212,356,530
------------
TOTAL INVESTMENTS (Cost $212,356,530) (a) .......................................... 99.6% 212,356,530
PAYABLE TO MANAGER ................................................................. (0.0)% (51,161)
PAYABLE TO ADMINISTRATOR ........................................................... (0.0)% (15,452)
DIVIDENDS PAYABLE .................................................................. (0.1)% (172,153)
OTHER ASSETS AND LIABILITIES (Net) ................................................. 0.5% 1,472,293
................................................................................... ----- ------------
NET ASSETS (213,627,325 shares of beneficial interest outstanding,
$0.001 par value, two billion shares authorized) ................................ 100.0% $213,590,057
===== ============
COMPOSITION OF NET ASSETS
Paid-in-capital ................................................................................... $213,586,627
Undistributed net investment income 3,430
------------
NET ASSETS ....................................................................................... $213,590,057
============
NET ASSET VALUE, Offering and Redemption Price Per Share ......................................... $1.00
=====
</TABLE>
- -------------------------------------
+ Variable rate security. The short term date shown reflects the next rate
change.
(a) Aggregate cost for Federal tax purposes.
ACES Adjustable Convertible Extendable Securities, AMBAC - AMBAC
Indemnity Corporation, FGIC - Financial Guaranty Insurance Company,
LOC - Letter of Credit, MBIA - Municipal Bond Insurance Association,
SPA - Standby Purchase Agreement.
* Credit ratings issued by Standard & Poor's Corporation, Moody's
Investors Services Inc. and Fitch Investors Service Inc. (Unaudited).
Standard & Poor's credit rating of A1, Moody's credit rating of P1 and
VMIG1 and Fitch's credit rating of F1 reflect instruments of the highest
quality. Credit ratings of NR indicate that the security is not rated. In
the opinion of the Manager, such instruments are judged to be of
comparable investment quality to rated securities which may be purchased
by the Portfolios.
See accompanying notes to financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
U.S. TREASURY MONEY MARKET PORTFOLIO -- PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 1998
================================================================================================================
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
U.S. TREASURY OBLIGATIONS - 35.9%
<S> <C> <C>
$30,000,000 U.S. Treasury Bills, 4.36% due 12/24/98 ................................. $ 29,807,433
10,000,000 U.S. Treasury Bills, 4.85% due 11/12/98 ................................. 9,985,181
------------
TOTAL U.S. TREASURY OBLIGATIONS ......................................... 39,792,614
------------
REPURCHASE AGREEMENTS - 41.8%
20,000,000 ABN AMRO, 5.55%, dated 10/30/98,
due 11/02/98, proceeds at maturity $20,009,250 (a) ..................... 20,000,000
11,349,520 Bear Stearns & Co., Inc., 5.39%, dated 10/30/98,
due 11/02/98, proceeds at maturity $11,354,618 (b) ..................... 11,349,520
15,000,000 Citibank, 5.35%, dated 10/30/98,
due 11/02/98, proceeds at maturity $15,006,688 (c) ..................... 15,000,000
------------
TOTAL REPURCHASE AGREEMENTS ............................................. 46,349,520
------------
TOTAL INVESTMENTS (Cost $86,142,134) (d) ................................................ 77.7% 86,142,134
OTHER ASSETS AND LIABILITIES (Net) ...................................................... 22.3% 24,737,345
----- ------------
NET ASSETS (110,879,479 shares of beneficial interest outstanding,
$0.001 par value, two billion shares authorized) ...................................... 100.0% $110,879,479
===== ============
U.S. TREASURY MONEY MARKET PORTFOLIO -- STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 1998
=================================================================================================================
ASSETS:
Investments, at value (Cost $86,142,134) .............................................. $ 86,142,134
Receivable for securities sold ........................................................ 24,959,861
Interest receivable ................................................................... 92,999
------------
TOTAL ASSETS ........................................................................ 111,194,994
------------
LIABILITIES:
Payable to manager .................................................................... 28,941
Payable to administrator .............................................................. 8,741
Dividends payable ..................................................................... 161,571
Other accrued expenses ................................................................ 116,262
------------
TOTAL LIABILITIES ................................................................... 315,515
------------
NET ASSETS applicable to 110,879,479 shares outstanding ................................. $110,879,479
============
NET ASSETS CONSIST OF:
Paid-in-capital ....................................................................... $110,879,500
============
Distributions in excess of net investment income (21)
------------
TOTAL NET ASSETS .................................................................... $110,879,479
============
NET ASSET VALUE, offering and redemption price per share ($110,879,479 /
110,879,479 shares outstanding; two billion shares authorized of $0.001 par
value) $1.00 .......................................................................... $1.00
=====
</TABLE>
- ----------------------------------------------------
(a) Collateralized by FNMA Medium Term Note, 5.10%, due 09/28/00, market value
$20,300,000.
(b) Collateralized by U.S. Treasury Notes and Bills, 4.94% to 5.50%, due
11/05/98 to 05/31/03, market value $11,577,761.
(c) Collateralized by U.S. Treasury Bond, 8.12%, due 05/15/21, market value
$15,301,025.
(d) Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
STATEMENT OF OPERATIONS -- YEAR ENDED OCTOBER 31, 1998
================================================================================================================
DOMESTIC PRIME TAX EXEMPT U.S. TREASURY
MONEY MARKET MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------ ------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest ............................................. $16,449,492 $6,758,217 $5,281,654
----------- ---------- ----------
EXPENSES:
Investment advisory fees ............................. 886,379 575,919 296,590
Administration fees .................................. 283,544 185,110 94,993
Shareholder services fees ............................ 163,370 42,068 25,437
Custodian fees ....................................... 75,443 44,553 19,959
Legal and audit fees ................................. 48,018 29,870 20,514
Directors' fees ...................................... 32,224 15,140 6,727
Miscellaneous expenses ............................... 99,394 62,652 39,390
----------- ---------- ----------
Total Expenses ..................................... 1,588,372 955,312 503,610
Custodian fee credits ................................ -- (30,201) --
----------- ---------- ----------
TOTAL NET EXPENSES ................................. 1,588,372 925,111 503,610
----------- ---------- ----------
NET INVESTMENT INCOME ................................. 14,861,120 5,833,106 4,778,044
NET REALIZED GAIN ON INVESTMENTS ...................... 2,459 14,353 100,398
----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .. $14,863,579 $5,847,459 $4,878,442
=========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND
STATEMENT OF CHANGES IN NET ASSETS
=================================================================================================================================
DOMESTIC PRIME TAX EXEMPT U.S. TREASURY
MONEY MARKET PORTFOLIO MONEY MARKET PORTFOLIO MONEY MARKET PORTFOLIO
----------------------- ---------------------- ----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1998 1997 1998 1997
-------------- ------------ ------------ ------------ ------------ ------------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income ................ $14,861,120 $13,759,453 $5,833,106 $5,549,927 $4,778,044 $4,920,996
Net realized gain
on investments ..................... 2,459 77,010 14,353 -- 100,398 70,988
-------------- ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations ........ 14,863,579 13,836,463 5,847,459 5,549,927 4,878,442 4,991,984
-------------- ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................ (14,861,120) (13,759,453) (5,833,106) (5,549,927) (4,778,044) (4,920,996)
Net realized gain on
investment transactions ........... (4,256) (224,251) (346) -- (100,398) (70,988)
-------------- ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders ................... (14,865,376) (13,983,704) (5,833,452) (5,549,927) (4,878,442) (4,991,984)
-------------- ------------ ------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS
($1.00 PER SHARE):
Proceeds from shares sold ............ 1,781,729,609 958,464,195 688,316,889 545,916,653 805,182,983 410,743,301
Proceeds from reinvestment
of dividends ....................... 14,377,159 13,704,346 5,768,277 5,441,069 4,291,497 4,767,017
Cost of shares redeemed .............. (1,718,594,158) (928,494,124) (673,343,550) (517,030,222) (783,799,470) (421,067,311)
-------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets from
share transactions ............... 77,512,610 43,674,417 20,741,616 34,327,500 25,675,010 (5,556,993)
-------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets ....................... 77,510,813 43,527,176 20,755,623 34,327,500 25,675,010 (5,556,993)
NET ASSETS:
Beginning of period .................. 280,338,816 236,811,640 192,834,434 158,506,934 85,204,469 90,761,462
-------------- ------------ ------------ ------------ ------------ ------------
End of period ........................ $357,849,629 $280,338,816 $213,590,057 $192,834,434 $110,879,479 $85,204,469
============== ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND -- FINANCIAL HIGHLIGHTS
DOMESTIC PRIME MONEY MARKET PORTFOLIO
====================================================================================================================================
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Net investment income ................................... 0.050 0.050 0.049(a) 0.054(a) 0.035(a)
Net realized and unrealized gain
(loss) on investments ................................. -- -- -- (0.002) --
------ ------ ------ ------ ------
Total from investment operations ........................ 0.050 0.050 0.049 0.052 0.035
------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................................... (0.050) (0.049) (0.049) (0.054) (0.035)
Net realized gain on investments ........................ -- (0.001) -- -- --
------ ------ ------ ------ ------
Total distributions ..................................... (0.050) (0.050) (0.049) (0.054) (0.035)
------ ------ ------ ------ ------
Contributions from affiliate .............................. -- -- -- 0.002(b) --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .......................... $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ======
Total return+ ........................................... 5.15% 5.19% 5.12% 5.50% 3.56%
====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ....................$357,850 $280,339 $236,812 $169,297 $143,744
Ratio of net investment income to average net assets .... 5.03% 4.99% 4.93% 5.33% 3.49%
Ratio of operating expenses to average net assets ....... 0.54% 0.52% 0.54%(c) 0.53%(c) 0.53%(c)
Ratio of interest expense to average net assets ......... -- -- 0.01% 0.02% 0.13%
- --------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(a) Net investment income before fees waived by the administrator for the
years ended October 31, 1996, 1995 and 1994 was $0.048, $0.053 and
$0.034, respectively.
(b) During the year ended October 31, 1995, the Portfolio realized losses
on the sale of certain securities. Pursuant to an undertaking, losses
in the amount of $262,913 were reimbursed to the Portfolio by the
former Adviser.
(c) Operating expense ratios after custodian fee credits on cash balances
maintained with the custodian and fees waived by the administrator for
the year ended October 31, 1996 and 1995 were 0.52% and 0.50%,
respectively. The operating expense ratio after fees waived by the
administrator for the year ended October 31, 1994 was 0.53%.
TAX EXEMPT MONEY MARKET PORTFOLIO
====================================================================================================================================
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
OPERATING PERFORMANCE:
Net asset value, beginning of period .................... $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Net investment income ................................... 0.030 0.031 0.030 0.034(a) 0.022(a)
------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................................... (0.030) (0.031) (0.030) (0.034) (0.022)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .......................... $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ======
Total return+ ........................................... 3.08% 3.12% 3.04% 3.42% 2.21%
====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ....................$213,590 $192,834 $158,507 $140,826 $133,951
Ratio of net investment income to average net assets .... 3.04% 3.07% 3.00% 3.35% 2.18%
Ratio of operating expenses to average net assets (b) ... 0.50% 0.53% 0.54% 0.53% 0.54%
</TABLE>
- ----------------------------------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(a) Net investment income before fees waived by the administrator for the
years ended October 31, 1995 and 1994 was $0.033 and $0.021,
respectively.
(b) Operating expense ratios after custodian fee credits on cash balances
maintained with the custodian for the years ended October 31, 1998, 1997
and 1996 were 0.48%, 0.52% and 0.52%, respectively. The operating
expense ratio after custodian fee credits on cash balances maintained
with the custodian and fees waived by the administrator for the year
ended October 31, 1995 was 0.50%. The operating expense ratio after fees
waived by the administrator for the year ended October 31, 1994 was
0.53%.
See accompanying notes to financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
THE TREASURER'S FUND -- FINANCIAL HIGHLIGHTS
DOMESTIC PRIME MONEY MARKET PORTFOLIO
====================================================================================================================================
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Net investment income .................................. 0.048 0.047 0.047 0.051 0.033
Net realized and unrealized gain on investments ......... 0.001 0.001 -- -- --
------ ------ ------ ------ ------
Total from investment operations ........................ 0.049 0.048 0.047 0.051 0.033
------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................................... (0.048) (0.047) (0.047) (0.051) (0.033)
Net realized gain on investments ........................ (0.001) (0.001) -- -- --
------ ------ ------ ------ ------
Total distributions ..................................... (0.049) (0.048) (0.047) (0.051) (0.033)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return+ ........................................... 5.03% 4.91% 4.83% 5.27% 3.31%
====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................... $110,879 $85,204 $90,761 $94,834 $138,205
Ratio of net investment income to average net assets .... 4.83% 4.74% 4.70% 5.10% 3.07%
Ratio of operating expenses to average net assets ....... 0.51% 0.61%(a) 0.63%(a) 0.56%(a) 0.49%
</TABLE>
- ----------------------------------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(a) Operating expense ratios after custodian fee credits on securities
lending income for the year ended October 31, 1997 was 0.60%. Operating
expense ratios after custodian fee credits on cash balances maintained
with the custodian for the years ended October 31, 1996 and 1995 were
0.60% and 0.54%, respectively.
See accompanying notes to financial statements.
15
<PAGE>
THE TREASURER'S FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. DESCRIPTION. The Treasurer's Fund, Inc. (the "Fund") was organized as a
Maryland corporation. The Fund is a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Fund currently consists of six separately managed portfolios,
three of which are active: the Domestic Prime Money Market Portfolio, the Tax
Exempt Money Market Portfolio and the U.S. Treasury Money Market Portfolio
(collectively, the "Portfolios"). The Global Money Market Portfolio, the Limited
Term Portfolio and the Tax Exempt Limited Term Portfolio still remain inactive.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
SECURITY VALUATION. Investments are valued at amortized cost (which approximates
market value) whereby a portfolio instrument is valued at cost and any discount
or premium is amortized on a constant basis to the maturity of the instrument.
REPURCHASE AGREEMENTS. Each Portfolio may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Bank of
New York, with member banks of the Federal Reserve System or with other brokers
or dealers that meet credit guidelines established by the Directors. Under the
terms of a typical repurchase agreement, the Portfolio takes possession of an
underlying debt obligation subject to an obligation of the seller to repurchase,
and the Portfolio to resell, the obligation at an agreed-upon price and time,
thereby determining the yield during the Portfolio's holding period. The
Portfolio will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 100% of the dollar
amount invested by the Fund in each agreement. The Portfolio will make payment
for such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on sales of
investments determined by using the identified cost method. Interest income
(including amortization of premium and accretion of discount) is recorded as
earned. When-issued securities are recorded on the date on which the priced
transaction confirmation is issued.
EXPENSES. Certain administrative expenses are common to, and allocated among,
the Portfolios. Such allocations are made on the basis of each Portfolio's
average net assets or other criteria directly affecting the expenses as
determined by the Adviser.
The Tax Exempt Money Market Portfolio maintains a cash balance with its
custodian and receives a reduction of its custody fees and expenses for the
amount of interest earned on such uninvested cash balances. For financial
reporting purposes for the year ended October 31, 1998, custodian fees were
increased by $30,201. There was no effect on net investment income. The
Portfolio could have invested such amounts
16
<PAGE>
THE TREASURER'S FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
in an income producing asset if it had not agreed to a reduction of fees or
expenses under the expenses offset arrangement with its custodian.
DIVIDENDS AND DISTRIBUTIONS. Dividends from investment income (including short
term capital gains and losses) are declared daily and paid monthly.
Distributions of long term capital gains, if any, are paid annually. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the Fund.
For the year ended October 31, 1998, the following reclassifications were made
to increase (decrease) such accounts with offsetting adjustments to
paid-in-capital:
Accumulated
Undistributed Net Realized Gain
Investment Income On Investments
----------------- --------------
Domestic Prime Money Market Portfolio $32,603 $(32,603)
U.S. Treasury Money Market Portfolio (21) --
As of October 31, 1998, the Domestic Prime Money Market Portfolio had net
capital loss carryforwards for Federal income tax purposes of $2,225 expiring in
2006.
PROVISION FOR INCOME TAXES. Each Portfolio has qualified and intends to continue
to qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
3. AGREEMENT WITH AFFILIATED PARTIES. The Fund has entered into an investment
Advisory agreement (the "Advisory Agreement") with Gabelli Fixed Income, LLC
(the "Adviser") which provides that the Fund will pay the Adviser a fee,
computed daily and paid monthly, at the annual rate of 0.30% of the value of
each Portfolio's average daily net assets. In accordance with the Advisory
Agreement, the Adviser provides a continuous investment program for the Fund's
portfolios, oversees the administration of all aspects of the Fund's business
and affairs and pays the compensation of all Officers and Directors of the Fund
who are its affiliates.
Gabelli Funds, Inc. (the "Administrator") serves as the Administrator to the
Fund pursuant to an Administrative Services Agreement with each of the
Portfolios under which the Administrator provides services for a fee that is
computed daily and paid monthly in accordance with the following schedule: i)
0.10% of the first $500 million of aggregate average daily net assets of the
Fund, (ii) 0.065% of the next $250 million of aggregate average daily net assets
of the Fund, (iii) 0.055% of the next $250 million of aggregate average daily
net assets of the Fund, and (iv) 0.050% of all aggregate average daily net
assets of the Fund over $1 billion.
The Fund has adopted a distribution and service plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940 for each Portfolio of the
Fund. There are no fees or expenses chargeable to the Fund under the Plan and
the Fund's Board of Directors has adopted the Plan in case certain expenses of
the Fund might be considered to constitute indirect payment by the Fund of
distribution expenses. Gabelli Fixed Income Distributors, Inc. (the
"Distributor") serves as the exclusive Distributor of the shares of each
Portfolio pursuant to its Distribution Agreement with the Fund. Gabelli Fixed
Income Distributors, Inc. became the successor Distributor to GOC Fund
Distributors, Inc. effective December 14, 1997.
17
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<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
================================================================================
SHAREHOLDERS AND BOARD OF DIRECTORS
THE TREASURER'S FUND, INC.
We have audited the accompanying statements of net assets of the Domestic Prime
Money Market and the Tax Exempt Money Market Portfolios and the statement of
assets and liabilities, including the portfolio of investments, of the U.S.
Treasury Money Market Portfolio (each a portfolio of The Treasurer's Fund, Inc.)
as of October 31, 1998, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the years
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1998 by correspondence with the custodian and
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting The Treasurer's Fund, Inc. at October
31, 1998, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
December 10, 1998
================================================================================
1998 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
For the fiscal year ended October 31, 1998, none of the ordinary income
dividends qualify for the dividend received deduction available to corporations.
For the fiscal year ended October 31, 1998, 100.0% of the ordinary income
dividends paid by the Tax Exempt Money Market Portfolio are exempt from Federal
taxation. These dividends may not be exempt from state and local taxation. Due
to the diversity in state and local tax laws, it is recommended that you consult
your personal tax advisor for the applicability of the information provided as
to your specific situation.
U.S. GOVERNMENT INCOME:
The percentage of ordinary income dividend paid by the Domestic Prime Money
Market Portfolio, Tax Exempt Money Market Portfolio and U.S. Treasury Money
Market Portfolio during the period from November 1, 1997 through October 31,
1998 which was derived from U.S. Treasury securities was 3.7%, 0.0% and 57.5%,
respectively. Such income may be exempt from state and local tax in all states.
However, many states, including New York and California, allow a tax exemption
for a portion of the income earned only if a mutual fund has invested at least
50% of its assets at the end of each quarter of the Fund's fiscal year in U.S.
Treasury securities. The U.S. Treasury Money Market Portfolio derived 57.5% of
its ordinary income from U.S. Treasury securities during fiscal year 1998. The
Domestic Prime Money Market Portfolio and Tax Exempt Money Market Portfolio did
not meet this strict requirement in fiscal year 1998.
================================================================================
<PAGE>
THE
TREASURER'S
FUND
Money Market Portfolios
- -----------------------
Domestic Prime
Tax Exempt
U.S. Treasury
ANNUAL REPORT
OCTOBER 31, 1998
<PAGE>
THE TREASURER'S FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
FAX: 1-914-921-5118
HTTP://WWW.GABELLI.COM
E-MAIL: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
BOARD OF DIRECTORS
Felix J. Christiana
FORMER SENIOR VICE PRESIDENT
DOLLAR DRY DOCK SAVINGS BANK
Anthony J. Colavita
ATTORNEY-AT-LAW
ANTHONY J. COLAVITA, P.C.
Richard N. Daniel
FORMER CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
HANDY & HARMAN
Mary E. Hauck
(RETIRED) SENIOR PORTFOLIO MANAGER
GABELLI-O'CONNOR FIXED INCOME
MUTUAL FUND MANAGEMENT CO.
Robert C. Kolodny, MD
PHYSICIAN, AUTHOR AND LECTURER
GENERAL PARTNER OF KBS PARTNERSHIP
Thomas E. O'Connor
CONSULTANT
GABELLI FIXED INCOME LLC
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT
PROFESSOR, PACE UNIVERSITY
Werner J. Roeder, MD
DIRECTOR OF SURGERY
LAWRENCE HOSPITAL
Anthonie C. Van Eckris
MANAGING DIRECTOR
BALMAC INTERNATIONAL, INC.
OFFICERS
Ronald S. Eaker
PRESIDENT AND
CHIEF INVESTMENT OFFICER
Henley L. Smith
VICE PRESIDENT AND
INVESTMENT OFFICER
Georgette Horton
VICE PRESIDENT
Judith A. Raneri
SECRETARY, TREASURER AND
PORTFOLIO MANAGER
Bruce N. Alpert
VICE PRESIDENT
DISTRIBUTOR
Gabelli Fixed Income
Distributors, Inc.
CUSTODIAN
Custodial Trust Company
LEGAL COUNSEL
Battle Fowler LLP
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Treasurer's Fund. It is not authorized for distribution to prospective investors
unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
