-------------------
INSTITUTIONAL CLASS
-------------------
INSTITUTIONAL MONEY MARKET FUND
SEMI-ANNUAL REPORT
APRIL 30, 1998
TO GET THERE, START HERE.(SM)
FIRSTAR
FUNDS
(logo)
NOTICE TO INVESTORS
- - Shares of Firstar Funds:
- ARE NOT INSURED BY THE FDIC, the US Government or any other governmental
agency;
- are not bank deposits or obligations of or guaranteed by Firstar Bank,
its parent company or its affiliates;
- are subject to investment risks, including possible loss of principal; and
- are offered by B.C. Ziegler and Company, member NASD, SIPC, and
an independent third-party distributor.
- - Firstar Bank affiliates serve as investment adviser, custodian, transfer
agent, administrator, and accounting services agent and receive compensation
for such services as disclosed in the current prospectus.
- - There can be no assurance that the money market fund will be able to maintain
a stable net asset value of $1.00 per share.
TABLE OF CONTENTS
Page(s)
SHAREOWNER LETTER.........................................................1
FIRSTAR INSTITUTIONAL MONEY MARKET FUND YIELD COMPARISONS.................2
LOOKING AHEAD - THE FORECAST..............................................2
STATEMENT OF ASSETS AND LIABILITIES.......................................3
STATEMENT OF OPERATIONS...................................................4
STATEMENT OF CHANGES IN NET ASSETS........................................4
FINANCIAL HIGHLIGHTS......................................................5
SCHEDULE OF INVESTMENTS..................................................6-7
NOTES TO FINANCIAL STATEMENTS.............................................8
FIRSTAR
FUNDS
June 1998
DEAR SHAREOWNER:
INVESTMENT REVIEW
Short-term interest rates were virtually unchanged over the past six months as
the Federal Reserve held the Fed Funds rate steady at 5.5%. With the
continuation of very low domestic inflation rates, money market investors were
rewarded with exceptionally high real, or inflation-adjusted, yields. As more
mergers and acquisitions occur throughout the corporate world, the constant
monitoring of the credit quality of the Funds remains a top priority. Firstar
Institutional Money Market Fund continues to offer a haven for those seeking
principal stability, superior credit quality and attractive inflation-adjusted
returns.
Firstar Institutional Money Market Fund is managed with quality and safety of
principal as our primary goals. All securities purchased by the Fund must meet
strict guidelines set by the SEC for presenting minimal credit risk as well as
our own high internal standards. Our credit research team closely monitors all
investments to ensure quality standards are met.
7-DAY YIELD<F1>
PERIOD ENDED APRIL 30, 1998
- --------------------------------------------------------------
INSTITUTIONAL MONEY MARKET FUND CURRENT EFFECTIVE
5.27% 5.41%
- --------------------------------------------------------------
<F1> After fee waivers. Had fees not been waived, the current and effective
yields would have been 4.97% and 5.11%, respectively. Reflects past
performance; yields will vary. An investment in Firstar Institutional Money
Market Fund is neither insured nor guaranteed by the U.S. Government nor is
there any assurance the Fund will be able to maintain a stable net asset
value of $1.00 per share.
Current yield refers to income earned by a fund's investments over a 7-day
period. It is then annualized and stated as a percentage of the investment.
Effective yield is the same as current yield except that it assumes the
income earned by an investment in a fund will be reinvested.
FIRSTAR
FUNDS
YIELD COMPARISONS<F1>
AVERAGE
MONTHLY FIRSTAR INSTITUTIONAL IBC'S INSTITUTIONAL
RATES MONEY MARKET FUND AVERAGE(TM) / ALL TAXABLE
1998
April 5.26% 5.19%
- -----------------------------------------------------------------------
March 5.28% 5.21%
- -----------------------------------------------------------------------
February 5.30% 5.22%
- -----------------------------------------------------------------------
January 5.40% 5.27%
- -----------------------------------------------------------------------
1997
December 5.46% 5.29%
- -----------------------------------------------------------------------
November 5.34% 5.24%
- -----------------------------------------------------------------------
October 5.29% 5.20%
- -----------------------------------------------------------------------
September 5.28% 5.21%
- -----------------------------------------------------------------------
August 5.31% 5.23%
- -----------------------------------------------------------------------
July 5.35% 5.21%
- -----------------------------------------------------------------------
June 5.36% 5.20%
- -----------------------------------------------------------------------
May 5.29% 5.17%
- -----------------------------------------------------------------------
We compare the Firstar Institutional Money Market Fund to the IBC's
Institutional Average(TM)/All Taxable, which is a composite of professionally
managed money market investment funds with similar objectives.
<F1> After fee waivers. Had fees not been waived, performance would have been
reduced. Reflects past performance; yields will vary. An investment in
Firstar Institutional Money Market Fund is neither insured nor guaranteed
by the U.S. Government nor is there any assurance the Fund will be able to
maintain a stable net asset value of $1.00 per share.
LOOKING AHEAD - THE FORECAST
Looking ahead, we expect continued above-average market volatility in both the
stock and bond markets, moderate economic growth, low levels of inflation
averaging around 1.5% for 1998, and consequently very attractive real, or
inflation-adjusted, rates of returns. We anticipate maintaining at least an
average maturity in Firstar Institutional Money Market Fund comparable to its
respective benchmark. As always, our goal is to maintain the high credit quality
of the Fund while closely monitoring corporate credit quality.
We continue to pride ourselves on meeting three important objectives for our
money market shareowners: preservation of principal, liquidity and competitive
investment income. We believe these principles, combined with a disciplined
approach to quality, continue to be appropriate for our money market investors.
We appreciate your continued confidence in Firstar Institutional Money Market
Fund and look forward to working with you in the future.
Jane T. Keelan
Carl J. Smith
Margaret Radske
Portfolio Managers
Firstar Investment Research & Management Company, LLC (FIRMCO)
FIRSTAR
FUNDS
INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
APRIL 30, 1998
(UNAUDITED)
ASSETS:
Investments, at amortized cost $1,189,949
Interest receivable 2,035
Other 15
----------
Total Assets 1,191,999
----------
LIABILITIES:
Dividends payable 5,153
Payable to affiliates 422
Accrued expenses and other liabilities 57
----------
Total Liabilities 5,632
----------
NET ASSETS $1,186,367
==========
CAPITAL STOCK, $.0001 par value
Authorized 5,000,000
Issued and outstanding 1,186,367
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $1.00
=====
See notes to the financial statements.
FIRSTAR
FUNDS
INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
INVESTMENT INCOME:
Interest income $35,046
-------
EXPENSES:
Investment advisory fees 3,078
Administration fees 680
Custody fees 111
Federal and state registration fees 48
Shareowner servicing and accounting costs 45
Professional fees 12
Reports to shareowners 6
Directors' fees and expenses 4
Other 12
-------
Total expenses before waiver 3,996
Less: Waiver of expenses (1,842)
-------
Net Expenses 2,154
-------
NET INVESTMENT INCOME $32,892
=======
STATEMENT OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
Six months Year
ended ended
April 30, 1998 Oct. 31, 1997
-------------- -------------
(Unaudited)
OPERATIONS:
Net investment income $ 32,892 $ 50,238
---------- ----------
Increase in net assets resulting
from operations 32,892 50,238
---------- ----------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 1,358,632 2,907,787
Shares issued to owners in
reinvestment of dividends 2,940 6,088
Shares redeemed (1,376,546) (2,462,585)
---------- ----------
Net increase (decrease) (14,974) 451,290
---------- ----------
DIVIDENDS PAID FROM:
Net investment income (32,892) (50,238)
---------- ----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (14,974) 451,290
NET ASSETS:
Beginning of period 1,201,341 750,051
---------- ----------
End of period $1,186,367 $1,201,341
========== ==========
See notes to the financial statements.
FIRSTAR
FUNDS
<TABLE>
<CAPTION>
INSTITUTIONAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Six months ended
April 30, Year ended October 31,
----------------- ----------------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------
<C> <C> <C> <C> <C> <C>
Per Share Data:
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income 0.03 0.05 0.05 0.06 0.04 0.03
-------- -------- -------- -------- -------- --------
Total from investment operations 0.03 0.05 0.05 0.06 0.04 0.03
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.03) (0.05) (0.05) (0.06) (0.04) (0.03)
-------- -------- -------- -------- -------- --------
Total distributions (0.03) (0.05) (0.05) (0.06) (0.04) (0.03)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- -------- --------
Total Return <F1> 2.65% 5.38% 5.32% 5.77% 3.65% 2.92%
Supplemental data and ratios:
Net assets, in thousands,
end of period $1,186,367 $1,201,341 $750,051 $716,566 $754,636 $588,301
Ratio of net expenses to average
net assets <F2> 0.35% 0.35% 0.35% 0.35% 0.37% 0.38%
Ratio of net investment income
to average net assets <F2> 5.34% 5.23% 5.19% 5.63% 3.64% 2.87%
<F1> Not annualized for the period ended April 30, 1998.
<F2> Annualized for the period ended April 30, 1998.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
INSTITUTIONAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- --------------
COMMERCIAL PAPER 84.1%
ASSET BACKED 13.5%
Ciesco L.P.,
$15,000 5.52%, 7/22/98 $ 14,811
Corporate Asset Funding Co., Inc.:
15,000 5.50%, 5/27/98 14,940
15,000 5.49%, 7/21/98 14,815
15,000 5.49%, 7/22/98 14,812
12,000 5.49%, 8/11/98 11,813
CXC, Inc.:
15,000 5.52%, 5/21/98 14,954
15,000 5.51%, 5/29/98 14,936
15,000 5.50%, 6/17/98 14,892
15,000 5.50%, 6/18/98 14,890
New Center Asset Trust:
15,000 5.51%, 5/12/98 14,975
15,000 5.50%, 8/20/98 14,746
-----------
160,584
-----------
AUTO & TRUCKS 5.0%
Ford Credit Europe PLC:
15,000 5.52%, 5/08/98 14,984
15,000 5.50%, 6/12/98 14,904
15,000 5.47%, 7/10/98 14,840
15,000 5.44%, 9/11/98 14,698
-----------
59,426
-----------
BANKING - DOMESTIC 2.5%
Barclays US Funding Corporation:
15,000 5.43%, 5/01/98 15,000
15,000 5.44%, 5/19/98 14,959
-----------
29,959
-----------
BANKING - FOREIGN 3.8%
Deutsche Bank Financial, Inc.:
15,000 5.49%, 6/23/98 14,879
15,000 5.67%, 2/26/99 14,994
Dresdner US Financial,
15,000 5.51%, 5/11/98 14,977
-----------
44,850
-----------
BASIC INDUSTRY 4.8%
Monsanto Company:
17,600 5.43%, 5/13/98 17,568
12,400 5.35%, 6/19/98 12,310
15,000 5.46%, 7/24/98 14,809
12,500 5.44%, 8/07/98 12,315
-----------
57,002
-----------
BEVERAGES 1.2%
Bass Finance (C.I.) Ltd.,
14,022 5.60%, 6/11/98 13,933
-----------
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- --------------
CAPITAL GOODS 3.0%
Johnson Controls, Inc.:
$20,000 5.55%, 5/01/98 $ 20,000
15,000 5.51%, 5/27/98 14,940
-----------
34,940
-----------
COMMUNICATION 8.3%
GTE Funding, Inc.:
15,000 5.53%, 5/05/98 14,991
15,000 5.51%, 5/26/98 14,943
15,000 5.51%, 6/03/98 14,924
15,000 5.51%, 6/04/98 14,922
MCI Communications Corporation:
10,000 5.47%, 5/21/98 9,970
15,000 5.47%, 5/22/98 14,952
14,000 5.47%, 5/28/98 13,943
-----------
98,645
-----------
ENERGY 1.2%
Arco Coal Australia, Inc.,
15,000 5.51%, 7/27/98 14,800
-----------
FINANCE 12.4%
ABB Treasury Center, Inc.,
15,000 5.43%, 6/24/98 14,878
American General Finance Corporation:
15,000 5.43%, 6/11/98 14,907
15,000 5.52%, 8/26/98 14,731
Associates Corporation of North America,
15,000 5.49%, 7/31/98 14,792
Avco Financial Services, Inc.:
8,500 5.51%, 5/01/98 8,500
15,000 5.42%, 5/05/98 14,991
Beneficial Corporation,
10,000 5.50%, 7/20/98 9,878
General Electric Capital Corporation:
10,000 5.43%, 6/12/98 9,937
15,000 5.42%, 6/25/98 14,876
15,000 5.46%, 10/16/98 14,618
National Rural Utilities CFC,
15,000 5.43%, 6/04/98 14,923
-----------
147,031
-----------
FINANCE - SERVICES 12.0%
Goldman Sachs Group, L.P.:
15,000 5.70%, 5/06/98 14,988
13,000 5.52%, 5/15/98 12,972
Merrill Lynch & Company, Inc.:
15,000 5.43%, 5/14/98 14,971
15,000 5.43%, 6/05/98 14,921
15,000 5.50%, 6/10/98 14,908
-----------
15,000 5.40%, 6/26/98 14,874
-----------
See notes to the financial statements.
FIRSTAR
FUNDS
INSTITUTIONAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- --------------
FINANCE - SERVICES 12.0% (CONT.)
Morgan Stanley, Dean Witter, Discovery & Co.:
$15,000 5.47%, 5/07/98 $ 14,986
15,000 5.43%, 5/29/98 14,937
17,000 5.50%, 6/15/98 16,883
8,000 5.40%, 7/29/98 7,893
-----------
142,333
-----------
INSURANCE 8.3%
American Family Financial Services, Inc.:
15,600 5.52%, 5/22/98 15,550
15,000 5.53%, 5/28/98 14,938
9,400 5.51%, 6/02/98 9,354
Prudential Funding Corporation:
15,000 5.43%, 5/08/98 14,984
15,000 5.51%, 5/20/98 14,956
15,000 5.52%, 6/09/98 14,910
14,000 5.43%, 9/24/98 13,692
-----------
98,384
-----------
PRINTING AND PUBLISHING 0.8%
McGraw-Hill Cos., Inc.,
10,000 5.43%, 8/25/98 9,825
-----------
RETAIL 4.8%
J.C. Penney Funding Corporation:
15,000 5.46%, 5/18/98 14,961
15,000 5.50%, 7/28/98 14,798
12,000 5.54%, 8/05/98 11,823
15,000 5.54%, 8/06/98 14,776
-----------
56,358
-----------
SOVEREIGN 2.5%
The Canadian Wheat Board,
15,000 5.33%, 7/13/98 14,838
Quebec (Province of) Canada,
15,000 5.41%, 10/09/98 14,636
-----------
29,474
-----------
Total Commercial Paper 997,544
-----------
FUNDING AGREEMENTS 5.0%
Travelers Insurance Company:
23,000 5.71%, 6/30/98<F1> 23,000
36,000 5.67%, 2/18/99<F1> 36,000
-----------
Total Funding Agreements 59,000
-----------
U.S. TREASURY NOTES 1.7%
20,000 9.00%, 5/15/98 20,025
-----------
Total U.S. Treasuries 20,025
-----------
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- --------------
VARIABLE RATE DEMAND NOTES 3.2%
$10,000 Wisconsin Power & Light Company $0,010,000
28,000 WPL Holdings 28,000
-----------
Total Variable Rate Demand Notes 38,000
-----------
Number
of Shares
(in thousands)
INVESTMENT COMPANIES 6.3%
16,214 Financial Square Prime Obligation Fund 16,214
59,166 Short-Term Investments Co.
Liquid Assets Portfolio 59,166
-----------
Total Investment Companies 75,380
-----------
Total Investments 100.3% 1,189,949
-----------
Liabilities, less Other Assets (0.3)% (3,582)
-----------
NET ASSETS 100.0% $1,186,367
==========
<F1> Variable rate security
See notes to the financial statements.
FIRSTAR
FUNDS
INSTITUTIONAL MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Firstar Funds, Inc. (the "Company") was incorporated on February 15, 1988,
as a Wisconsin Corporation and is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended. The
Institutional Money Market Fund (the "Fund") which commenced operations on April
26, 1991, is a separate, diversified investment portfolio of the Company.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in preparation of its financial statements. These policies
are in conformity with generally accepted accounting principles.
a) Investment Valuation - The securities are valued on the basis of amortized
cost for financial reporting purposes and federal income tax purposes, which
approximates market value. Variable rate demand notes and funding agreements are
valued at cost which approximates market value.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Fund has complied with the provisions of the Internal Revenue Code
available to regulated investment companies and intends to continue to so comply
in future years.
c) Expenses - The Fund is charged for those expenses that are directly
attributable to it, such as advisory, administration, service organization fees
and certain shareowner service fees. Expenses that are not directly attributable
to a portfolio are typically allocated among the Company's portfolios in
proportion to their respective net assets, number of shareowner accounts or net
sales, where applicable.
d) Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
e) Distributions to Shareowners - Dividends from net investment income are
declared daily and paid monthly. Distributions of net realized capital gains, if
any, will be declared at least annually.
f) Other - The Fund recognizes interest income on the accrual basis. Discounts
and premiums are amortized over the life of the respective security. Investment
and shareowner transactions are recorded on trade date. Realized gains and
losses from investment transactions are reported on an identified cost basis
which is the same basis the Fund uses for federal income tax purposes.
Transactions in capital shares at $1.00 per share are shown in the Statement of
Changes in Net Assets. Generally accepted accounting principles require that
permanent financial reporting and tax differences be reclassified to capital
stock.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Fund has entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company, LLC ("FIRMCO"). FIRMCO is a subsidiary
of Firstar Corporation, a publicly held bank holding company. Pursuant to its
Advisory Agreement with the Fund, FIRMCO is entitled to receive a fee,
calculated daily and payable monthly, at the annual rate of 0.50% of the Fund's
first $2 billion of average daily net assets, and 0.40% of the Fund's average
daily net assets in excess of $2 billion. For the six months ended April 30,
1998, FIRMCO voluntarily waived $1,297 of its advisory fees, in thousands, for
the Fund.
Firstar Trust Company, an affiliate of FIRMCO, serves as custodian, transfer
agent and accounting services agent for the Fund.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.125% of the Company's first $2 billion
of average aggregate daily net assets, plus 0.10% of the Company's average
aggregate daily net assets in excess of $2 billion. For the six months ended
April 30, 1998, $545 of administration fees, in thousands, were voluntarily
waived for the Fund.
Each Director of the Company who is not affiliated with FIRMCO receives a
fee from the Company for service as a Director and is eligible to participate in
a deferred compensation plan with respect to these fees. Participants in the
plan may designate their deferred Director's fees as if invested in any one of
the Firstar Funds (with the exception of the MicroCap Fund) or in 90-day U.S.
Treasury bills. The value of each Director's deferred compensation account will
increase or decrease as if it were invested in shares of the selected Firstar
Funds or 90-day U.S.Treasury bills. The Fund maintains its proportionate share
of the Company's liability for deferred fees.
FIRSTAR FUNDS ARE AVAILABLE THROUGH:
- - THE FIRSTAR FUNDS CENTER,
- - INVESTMENT SPECIALISTS WHO ARE REGISTERED
REPRESENTATIVES OF FIRSTAR INVESTMENT SERVICES, INC.
A REGISTERED BROKER/DEALER, NASD AND SIPC MEMBER,
- - AND THROUGH SELECTED SHAREHOLDER ORGANIZATIONS.
This report is authorized for distribution only when preceded or
accompanied by a current prospectus.
TO OPEN AN ACCOUNT OR REQUEST INFORMATION
1-800-982-8909
1-414-287-3710
FOR ACCOUNT BALANCES AND INVESTOR SERVICES
1-800-228-1024
1-414-287-3808
FIRSTAR FUNDS CENTER
615 EAST MICHIGAN STREET
P.O. BOX 3011
MILWAUKEE, WI 53201-3011
WWW.FIRSTARFUNDS.COM
TO GET THERE, START HERE.(SM)
FIRSTAR
FUNDS
(logo)
FORM #40-0244 6/98
-------------------
Money Market Funds
-------------------
MONEY MARKET FUND
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
SEMI-ANNUAL REPORT
APRIL 30, 1998
TO GET THERE, START HERE.(SM)
FIRSTAR
FUNDS
(logo)
NOTICE TO INVESTORS
- - Shares of Firstar Funds:
- ARE NOT INSURED BY THE
FDIC, the US Government or any
other governmental agency;
- are not bank deposits or obligations
of or guaranteed by Firstar Bank, its parent company or its affiliates;
- are subject to investment risks,
includ ing possible loss of principal; and
- are offered by B.C. Ziegler and Company, member NASD, SIPC, and
an independent third-party distributor.
- -There can be no assurance that the money market funds will be able to maintain
a stable net asset value of $1.00 per share.
- -Firstar Bank affiliates serve as invest ment adviser, custodian, transfer
agent, administrator, and accounting services agent and receive compensation
for such services as disclosed in the current prospectus.
FIRSTAR
FUNDS
(logo)
TABLE OF CONTENTS
Page(s)
SHAREOWNER LETTER.........................................................1
FIRSTAR MONEY MARKET FUNDS YIELD COMPARISONS..............................2
LOOKING AHEAD - THE FORECAST..............................................2
STATEMENT OF ASSETS AND LIABILITIES.......................................3
STATEMENT OF OPERATIONS...................................................4
STATEMENT OF CHANGES IN NET ASSETS........................................5
FINANCIAL HIGHLIGHTS.....................................................6-7
SCHEDULE OF INVESTMENTS..................................................8-13
NOTES TO FINANCIAL STATEMENTS...........................................14-15
FIRSTAR
FUNDS
(logo)
June 1998
DEAR SHAREOWNER:
INVESTMENT REVIEW
Short-term interest rates were virtually unchanged over the past six months as
the Federal Reserve held the Fed Funds rate steady at 5.5%. With the
continuation of very low domestic inflation rates, money market investors were
rewarded with exceptionally high real, or inflation-adjusted, yields. As more
mergers and acquisitions occur throughout the corporate world, the constant
monitoring of the credit quality of the Funds remains a top priority. The
Firstar money market funds continue to offer a haven for those seeking principal
stability, superior credit quality and attractive inflation-adjusted returns.
The Firstar money market funds are managed with quality and safety of principal
as our primary goals. All securities purchased by the Funds must meet strict
guidelines set by the SEC for presenting minimal credit risk as well as our own
high internal standards. Our credit research team closely monitors all
investments to ensure quality standards are met.
FIRSTAR MONEY MARKET FUNDS 7-DAY YIELDS<F1>
PERIOD ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
U.S. TREASURY U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
<C> <C> <C> <C> <C> <C> <C> <C>
CURRENT EFFECTIVE CURRENT EFFECTIVE CURRENT EFFECTIVE CURRENT EFFECTIVE
5.02% 5.14% 4.68% 4.79% 4.92% 5.04% 3.51% 3.58%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> After fee waivers. Had fees not been waived, current and effective yields
would have been 4.76% and 4.88% for the Money Market Fund; 4.50% and 4.61%
for the U.S. Treasury Money Market Fund; 4.80% and 4.92% for the U.S.
Government Money Market Fund; and 3.35% and 3.42% for the Tax-Exempt Money
Market Fund, respectively. Reflects past performance; yields will vary. An
investment in any one of the Firstar money market funds is neither insured
nor guaranteed by the U.S. Government nor is there any assurance the Funds
will be able to maintain a stable net asset value of $1.00 per share.
Current yield refers to income earned by a fund's investments over a 7-day
period. It is then annualized and stated as a percentage of the investment.
Effective yield is the same as current yield except that it assumes the
income earned by an investment in a fund will be reinvested.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FIRSTAR MONEY MARKET FUNDS YIELD COMPARISONS<F1>
AVERAGE IBC'S
MONTHLY MONEY
RATES FIRSTAR FUND
FIRSTAR TAX-EXEMPT AVERAGE_/
IBC'S FIRSTAR IBC'S FIRSTAR IBC'S TAX- IBC'S MONEY ALL TAX-FREE
FIRSTAR MONEY FUNDU.S. TREASURYMONEY FUND U.S. GOV'T. MONEY FUND EXEMPT MONEY FUND MARKET TAX TAX
MONEY AVERAGE_/ MONEY AVERAGE_/ MONEY AVERAGE_/ MONEY AVERAGE_/ EQUIVALENT EQUIVALENT
MARKET ALL TAXABLE MARKET U.S. TREASURY MARKET GOV'T. MARKET ALL TAX-FREE YIELD<F2> YIELD<F2>
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998
April 5.02% 5.02% 4.75% 4.73% 4.90% 4.84% 3.30% 3.23% 5.16% 5.05%
- ------------------------------------------------------------------------------------------------------------------------------------
March 5.04% 5.03% 4.73% 4.76% 4.89% 4.86% 2.86% 2.80% 4.47% 4.38%
- ------------------------------------------------------------------------------------------------------------------------------------
February 5.09% 5.04% 4.62% 4.72% 4.92% 4.86% 2.78% 2.77% 4.34% 4.33%
- ------------------------------------------------------------------------------------------------------------------------------------
January 5.20% 5.10% 4.78% 4.76% 4.99% 4.90% 3.10% 2.99% 4.84% 4.67%
- ------------------------------------------------------------------------------------------------------------------------------------
1997
December 5.19% 5.12% 4.78% 4.75% 5.02% 4.91% 3.35% 3.23% 5.23% 5.05%
- ------------------------------------------------------------------------------------------------------------------------------------
November 5.09% 5.05% 4.64% 4.57% 4.62% 4.85% 3.22% 3.24% 5.03% 5.06%
- ------------------------------------------------------------------------------------------------------------------------------------
October 5.06% 5.01% 4.64% 4.68% 4.95% 4.83% 3.08% 3.14% 4.81% 4.91%
- ------------------------------------------------------------------------------------------------------------------------------------
September 5.06% 5.02% 4.75% 4.74% 4.91% 4.84% 3.12% 3.15% 4.88% 4.92%
- ------------------------------------------------------------------------------------------------------------------------------------
August 5.07% 5.04% 4.80% 4.76% 4.91% 4.85% 2.90% 2.96% 4.53% 4.63%
- ------------------------------------------------------------------------------------------------------------------------------------
July 5.10% 5.02% 4.68% 4.72% 4.94% 4.82% 3.12% 3.08% 4.88% 4.81%
- ------------------------------------------------------------------------------------------------------------------------------------
June 5.11% 5.02% 4.68% 4.71% 4.94% 4.82% 3.30% 3.28% 5.16% 5.13%
- ------------------------------------------------------------------------------------------------------------------------------------
May 5.05% 4.98% 4.67% 4.73% 4.91% 4.78% 3.35% 3.37% 5.23% 5.27%
- ------------------------------------------------------------------------------------------------------------------------------------
We compare our Funds to the IBC's Money Fund Averages, which are composites of professionally managed money market investment funds
with similar objectives.
<F1> After fee waivers. Had fees not been waived, performance would be reduced. Reflects past performance; yields will vary. An
investment in any one of the Firstar money market funds is neither insured nor guaranteed by the U.S. Government nor is there
any assurance the Funds will be able to maintain a stable net asset value of $1.00 per share.
<F2> Assumes a 36% tax bracket.
</TABLE>
LOOKING AHEAD - THE FORECAST
Looking ahead, we expect continued above-average market volatility in both the
stock and bond markets, moderate economic growth, low levels of inflation
averaging around 1.5% for 1998, and consequently very attractive real, or
inflation-adjusted, rates of returns. We anticipate maintaining at least an
average maturity in the Firstar money market funds comparable to their
respective benchmarks. As always, our goal is to maintain the high credit
quality of the Funds while closely monitoring corporate credit quality.
We continue to pride ourselves on meeting three important objectives for our
money market shareowners: preservation of principal, liquidity and competitive
investment income. We believe these principles, combined with a disciplined
approach to quality, continue to be appropriate for our money market investors.
We appreciate your continued confidence in the Firstar money market funds and
look forward to working with you in the future.
Jane T. Keelan
Carl J. Smith
Margaret Radske
Portfolio Managers
Firstar Investment Research & Management Company, LLC (FIRMCO)
FIRSTAR
FUNDS
(logo)
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
APRIL 30, 1998
(UNAUDITED)
U.S. U.S.
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
------------------------ ------------------------
ASSETS:
Investments, at amortized
cost $248,256 $71,908 $198,486 $95,621
Interest receivable 146 649 477 943
Capital shares sold 2,070 _ _ _
Cash _ _ _ 2
Other 19 15 10 9
--------- --------- -------- ---------
Total Assets 250,491 72,572 198,973 96,575
--------- --------- -------- ---------
LIABILITIES:
Capital shares redeemed 308 _ _ _
Dividends payable 1,055 279 766 274
Payable to affiliates 120 48 122 58
Accrued expenses and
other liabilities 29 22 23 20
--------- --------- -------- ---------
Total Liabilities 1,512 349 911 352
--------- --------- -------- ---------
NET ASSETS $248,979 $72,223 $198,062 $96,223
========= ========= ========= =========
CAPITAL STOCK, $.0001
par value
Authorized 5,000,000 5,000,000 5,000,000 5,000,000
Issued and outstanding 248,979 72,223 198,062 96,223
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $1.00 $1.00 $1.00 $1.00
========= ========= ========= =========
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
U.S. U.S.
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
------------ ----------- ------------------------
INVESTMENT INCOME:
Interest income $7,340 $1,878 $5,373 $2,102
--------- --------- -------- ---------
EXPENSES:
Investment advisory fees 644 176 483 284
Administration fees 142 39 107 62
Service organization fees 42 _ _ _
Custody fees 26 9 24 14
Shareowner servicing and
accounting costs 164 27 43 34
Professional fees 12 11 12 12
Reports to shareowners 49 2 7 2
Federal and state
registration fees 21 6 8 10
Directors' fees and expenses 4 4 4 4
Other 4 1 3 1
--------- --------- -------- ---------
Total expenses before waiver 1,108 275 691 423
Less: Waiver of expenses (335) (63) (111) (83)
--------- --------- -------- ---------
Net Expenses 773 212 580 340
--------- --------- -------- ---------
NET INVESTMENT INCOME $6,567 $1,666 $4,793 $1,762
========= ========= ========= =========
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
U.S. TREASURY U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
------------------------ ------------------------ ----------------------- ------------------------
Six months Year Six months Year Six months Year Six months Year
ended ended ended ended ended ended ended ended
April 30, Oct. 31, April 30, Oct. 31, April 30, Oct. 31, April 30, Oct. 31,
1998 1997 1998 1997 1998 1997 1998 1997
---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 6,567 $ 11,670 $ 1,666 $ 3,114 $ 4,793 $ 9,505 $ 1,762 $ 2,795
-------- -------- -------- -------- -------- -------- -------- ---------
Increase in net assets
resulting from
operations 6,567 11,670 1,666 3,114 4,793 9,505 1,762 2,795
-------- -------- -------- -------- -------- -------- -------- ---------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 307,019 592,970 103,005 297,822 482,096 881,303 144,783 171,346
Shares issued to
owners in reinvestment
of dividends 5,927 11,726 207 415 1,462 2,881 603 1,152
Shares redeemed (324,984) (567,715) (109,467) (273,189) (484,151) (883,864) (157,802) (143,187)
-------- -------- -------- -------- -------- -------- -------- ---------
Net increase (decrease) (12,038) 36,981 (6,255) 25,048 (593) 320 (12,416) 29,311
-------- -------- -------- -------- -------- -------- -------- ---------
DIVIDENDS PAID FROM:
Net investment income (6,567) (11,670) (1,666) (3,114) (4,730) (9,567) (1,762) (2,795)
-------- -------- -------- -------- -------- -------- -------- ---------
TOTAL INCREASE
(DECREASE) IN
NET ASSETS (12,038) 36,981 (6,255) 25,048 (530) 258 (12,416) 29,311
NET ASSETS:
Beginning of period 261,017 224,036 78,478 53,430 198,592 198,334 108,639 79,328
-------- -------- -------- -------- -------- -------- -------- ---------
End of period $248,979 $261,017 $ 72,223 $ 78,478 $198,062 $198,592 $ 96,223 $108,639
======== ======== ======== ======== ======== ======== ======== ========
See notes to the financial statements.
</TABLE>
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
U.S. TREASURY
MONEY MARKET FUND MONEY MARKET FUND
---------------------------------------------------- ----------------------------------------------------
Six Six
months months
ended Year ended October 31, ended Year ended October 31,
April 30, ------------------------------------------ April 30,------------------------------------------
1998 1997 1996 1995 1994 1993 1998 1997 1996 1995 1994 1993
------- ------- ------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Per Share Data: (Unaudited) (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment
income <F1> 0.03 0.05 0.05 0.05 0.03 0.03 0.02 0.05 0.05 0.05 0.03 0.03
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Total from investment
operations 0.03 0.05 0.05 0.05 0.03 0.03 0.02 0.05 0.05 0.05 0.03 0.03
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Less distributions:
Dividends from net
investment income (0.03) (0.05) (0.05) (0.05) (0.03) (0.03) (0.02) (0.05) (0.05) (0.05) (0.03) (0.03)
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Total distributions (0.03) (0.05) (0.05) (0.05) (0.03) (0.03) (0.02) (0.05) (0.05) (0.05) (0.03) (0.03)
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======= ======== ======== ======== ======= ======== ======== ======== =======
Total Return <F2> 2.53% 5.12% 5.06% 5.51% 3.42% 2.71% 2.34% 4.80% 4.80% 5.16% 3.20% 2.59%
Supplemental data
and ratios:
Net assets, in
thousands, end
of period $248,979 $261,017 $224,036$172,261 $165,018 $132,568 $72,223 $78,478 $53,430 $64,655 $56,020 $40,744
Ratio of net
expenses to
average net
assets <F3> 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net
investment income
to average net
assets <F3> 5.10% 4.98% 4.94% 5.36% 3.44% 2.67% 4.72% 4.67% 4.70% 5.04% 3.14% 2.55%
<F1> For the Tax-Exempt Money Market Fund, substantially all investment income is exempt from Federal income tax.
<F2> Not annualized for the period ended April 30, 1998 for all Funds.
<F3> Annualized for the period ended April 30, 1998 for all Funds.
See notes to the financial statements.
</TABLE>
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND
---------------------------------------------------- ----------------------------------------------------
Six Six
months months
ended Year ended October 31, ended Year ended October 31,
April 30, ------------------------------------------ April 30,------------------------------------------
1998 1997 1996 1995 1994 1993 1998 1997 1996 1995 1994 1993
------- ------- ------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Per Share Data: (Unaudited) (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment
income <F1> 0.02 0.05 0.05 0.05 0.03 0.03 0.02 0.03 0.03 0.03 0.02 0.02
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Total from investment
operations 0.02 0.05 0.05 0.05 0.03 0.03 0.02 0.03 0.03 0.03 0.02 0.02
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Less distributions:
Dividends from net
investment income (0.02) (0.05) (0.05) (0.05) (0.03) (0.03) (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Total distributions (0.02) (0.05) (0.05) (0.05) (0.03) (0.03) (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
-------- -------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======= ======== ======== ======== ======= ======== ======== ======== =======
Total Return <F2> 2.42% 4.99% 4.96% 5.37% 3.35% 2.63% 1.53% 3.12% 3.13% 3.42% 2.25% 2.17%
Supplemental data
and ratios:
Net assets, in
thousands,
end of period $198,062 $198,592 $198,334$163,068 $183,591 $203,165 $96,223$108,639 $79,328 $84,084 $70,436 $73,621
Ratio of net
expenses to
average net
assets <F3> 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net
investment
income to
average
net assets <F3> 4.97% 4.83% 4.84% 5.24% 3.29% 2.59% 3.11% 3.06% 3.09% 3.36% 2.23% 2.12%
<F1> For the Tax-Exempt Money Market Fund, substantially all investment income is exempt from Federal income tax.
<F2> Not annualized for the period ended April 30, 1998 for all Funds.
<F3> Annualized for the period ended April 30, 1998 for all Funds.
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
COMMERCIAL PAPER 92.0%
ASSET BACKED SECURITY 9.9%
Ciesco L.P.,
$5,000 5.52%, 7/22/98 $ 4,937
Corporate Asset Funding Co., Inc.:
5,000 5.48%, 6/19/98 4,963
5,000 5.49%, 8/11/98 4,922
CXC, Inc.:
5,000 5.52%, 5/11/98 4,992
5,000 5.50%, 6/18/98 4,963
----------
24,777
----------
AUTOS & TRUCKS 3.9%
Ford Credit Europe PLC:
5,000 5.47%, 7/09/98 4,948
5,000 5.44%, 9/11/98 4,899
----------
9,847
----------
BANKING - FOREIGN 6.0%
Deutsch Bank Financial, Inc.:
5,000 5.49%, 6/23/98 4,959
5,000 5.49%, 7/06/98 4,950
Dresdner US Financial,
5,000 5.40%, 5/18/98 4,987
----------
14,896
----------
BASIC INDUSTRY 4.0%
Monsanto Company:
5,000 5.45%, 5/12/98 4,992
5,000 5.41%, 6/22/98 4,961
----------
9,953
----------
CAPITAL GOODS 4.0%
Johnson Controls, Inc.:
5,000 5.55%, 5/01/98 5,000
5,000 5.51%, 5/27/98 4,980
----------
9,980
----------
COMMUNICATION 4.0%
GTE Funding, Inc.:
5,000 5.50%, 6/01/98 4,976
5,000 5.51%, 6/03/98 4,975
----------
9,951
----------
FINANCE - MISCELLANEOUS 23.9%
American Express Co.,
5,000 5.45%, 8/12/98 4,922
American General Finance Corporation:
5,000 5.43%, 6/11/98 4,969
5,000 5.52%, 8/26/98 4,910
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
FINANCE - MISCELLANEOUS 23.9% (CONT.)
Avco Financial Services, Inc.:
$ 4,500 5.51%, 5/01/98 $ 4,500
5,000 5.42%, 5/05/98 4,997
Beneficial Corporation:
5,000 5.50%, 7/17/98 4,941
5,000 5.50%, 7/28/98 4,933
CIT Group Holdings, Inc.,
5,000 5.53%, 5/4/98 4,998
General Electric Capital Corporation:
5,000 5.50%, 5/29/98 4,979
5,000 5.44%, 8/04/98 4,928
Household Finance Corporation,
5,500 5.43%, 6/10/98 5,467
National Rural Utilities CFC,
5,000 5.43%, 6/05/98 4,974
----------
59,518
----------
FINANCE - SERVICES 10.0%
Goldman Sachs Group, L.P.,
5,000 5.70%, 5/14/98 4,990
Merrill Lynch and Co., Inc.:
5,000 5.43%, 5/13/98 4,991
5,000 5.53%, 5/15/98 4,989
Morgan Stanley, Dean Witter, Discover & Co.:
5,000 5.41%, 7/27/98 4,935
5,000 5.40%, 7/29/98 4,933
----------
24,838
----------
INSURANCE 8.0%
American Family Financial Services, Inc.:
5,000 5.52%, 5/22/98 4,984
5,145 5.49%, 6/09/98 5,114
Metlife Funding, Inc.,
5,000 5.50%, 5/20/98 4,985
Prudential Funding Corporation,
5,000 5.43%, 5/07/98 4,995
----------
20,078
----------
MACHINERY - AGRICULTURE AND CONSTRUCTION 2.0%
Caterpillar, Inc.,
5,000 5.42%, 9/18/98 4,895
----------
MISCELLANEOUS 2.0%
International Lease Finance Corporation,
5,000 5.46%, 7/20/98 4,939
----------
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
PRINTING & PUBLISHING 4.0%
McGraw-Hill Cos., Inc.,
$5,000 5.43%, 8/25/98 $ 4,913
Reed Elsevier, Inc.,
5,000 5.48%, 6/12/98 4,968
----------
9,881
----------
RETAIL 4.4%
J.C. Penney Funding Corporation:
6,000 5.45%, 5/08/98 5,994
5,000 5.46%, 6/04/98 4,974
----------
10,968
----------
SOVEREIGN 5.9%
The Canadian Wheat Board,
5,000 5.33%, 7/13/98 4,946
Quebec (Province of) Canada:
5,000 5.47%, 10/21/98 4,869
5,000 5.52%, 1/15/98 4,801
----------
14,616
----------
Total Commercial Paper 229,137
----------
FUNDING AGREEMENTS 4.4%
Travelers Insurance Company:
7,000 5.71%, 6/30/98<F1> 7,000
4,000 5.67%, 2/18/99<F1> 4,000
----------
Total Funding Agreements 11,000
----------
VARIABLE RATE DEMAND NOTES 0.8%
1,000 Wisconsin Power & Light Company 1,000
1,000 WPL Holdings 1,000
----------
Total Variable Rate Demand Notes 2,000
----------
Number Amortized
of Shares Cost
(in thousands) (in thousands)
- -------------- ---------------
INVESTMENT COMPANIES 2.5%
10 Financial Square Prime Obligation Fund $ 10
6,109 Short-Term Investments Co. -
Liquid Assets Portfolio 6,109
----------
Total Investment Companies 6,119
----------
Total Investments 99.7% 248,256
----------
Other Assets, Less Liabilities 0.3% 723
----------
NET ASSETS 100.0% $248,979
=========
<F1> Variable rate security
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
U.S. TREASURY MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- --------------
U.S. TREASURIES 89.8%
U.S. Treasury Notes 49.9%
$10,500 9.00%, 5/15/98 $10,514
2,000 6.00%, 5/31/98 2,001
5,000 5.25%, 7/31/98 4,999
2,000 6.25%, 7/31/98 2,003
4,000 4.75%, 8/31/98 3,992
2,000 6.00%, 9/30/98 2,005
2,000 4.75%, 10/31/98 1,992
8,500 5.88%, 10/31/98 8,513
----------
36,019
----------
U.S. Treasury Bills 39.9%
2,000 4.72%, 5/21/98 1,994
11,000 4.73%, 5/28/98 10,960
9,000 4.67%, 6/11/98 8,951
7,000 4.80%, 7/02/98 6,941
----------
28,846
----------
Total U.S. Treasuries 64,865
----------
Number
of Shares
(in thousands)
- --------------
INVESTMENT COMPANIES 9.8%
3,500 Financial Square
Treasury Obligation Portfolio 3,500
3,543 Short-Term Investments Co.
Treasury Tax Advantage Portfolio 3,543
----------
Total Investment Companies 7,043
----------
Total Investments 99.6% 71,908
----------
Other Assets, less Liabilities 0.4% 315
----------
NET ASSETS 100.0% $72,223
=========
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
U.S. GOVERNMENTMONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- ---------------
U.S. GOVERNMENT AGENCIES 83.7%
FEDERAL FARM CREDIT BANK 19.9%
Federal Farm Credit Bank Discount Notes:
$ 5,000 5.40%, 5/05/98 $ 4,997
5,000 5.34%, 5/07/98 4,996
9,000 5.52%, 5/08/98 8,991
3,789 5.40%, 5/13/98 3,782
4,000 5.34%, 6/10/98 3,976
4,000 5.34%, 6/17/98 3,972
5,000 5.37%, 9/04/98 4,906
4,000 5.22%, 3/05/99 3,821
----------
39,441
----------
FEDERAL HOME LOAN BANK 5.0%
Federal Home Loan Bank Discount Notes:
5,000 5.41%, 5/06/98 4,996
5,000 5.40%, 6/19/98 4,963
----------
9,959
----------
FEDERAL HOME LOAN MORTGAGE CORPORATION 18.6%
Federal Home Loan Mortgage Corporation Discount Notes:
5,000 5.42%, 5/15/98 4,990
4,000 5.42%, 5/26/98 3,985
5,000 5.35%, 5/29/98 4,979
5,000 5.40%, 6/04/98 4,975
6,000 5.41%, 6/16/98 5,959
3,054 5.42%, 6/17/98 3,032
4,000 5.44%, 6/30/98 3,964
Federal Home Loan Mortgage Corporation Debenture,
5,000 5.51%, 3/12/99 4,994
----------
36,878
----------
FEDERAL NATIONAL MORTGAGE ASSN. 23.1%
Federal National Mortgage Assn. Discount Notes:
5,000 5.36%, 5/01/98 5,000
4,000 5.43%, 5/13/98 3,993
4,000 5.37%, 5/21/98 3,988
4,000 5.36%, 5/22/98 3,988
10,000 5.36%, 5/27/98 9,961
4,000 5.41%, 6/12/98 3,975
5,000 5.19%, 7/07/98 4,952
5,000 5.13%, 7/14/98 4,947
5,000 5.23%, 7/22/98 4,940
----------
45,744
----------
OTHER 17.1%
Tennessee Valley Authority Discount Notes:
4,000 5.34%, 5/12/98 3,993
3,000 5.37%, 5/20/98 2,992
5,000 5.40%, 5/22/98 4,984
5,000 5.34%, 6/02/98 4,976
5,000 5.41%, 6/11/98 4,969
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- ---------------
OTHER 17.1% (CONT.)
Tennessee Valley Authority Discount Notes (cont.):
$5,000 5.34%, 6/22/98 $ 4,962
7,000 5.34%, 7/16/98 6,921
----------
33,797
----------
Total U.S. Government Agencies 165,819
----------
U.S. TREASURIES 8.1%
U.S. Treasury Notes:
7,000 9.00%, 5/15/98 7,009
4,000 5.38%, 5/31/98 4,000
5,000 5.88%, 10/31/98 5,007
----------
Total U.S. Treasuries 16,016
----------
Number
of Shares
(in thousands)
INVESTMENT COMPANIES 8.4%
7,274 Financial Square Government Obligation Fund 7,274
9,377 Short-Term Investments Co. Treasury Portfolio 9,377
----------
Total Investment Companies 16,651
----------
Total Investments 100.2% 198,486
----------
Liabilities, less Other Assets (0.2)% (424)
----------
NET ASSETS 100.0% $198,062
=========
See notes to the financial statements.
FIRSTAR
FUNDS
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TAX-EXEMPTMONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- ---------------
GENERAL OBLIGATION 3.1%
Georgia State,
$1,000 6.50%, 12/01/98 $ 1,017
Gwinnett County, Georgia, Water & Sewer,
1,000 Certificate of Participation, 8.05%, 8/01/98 1,011
Northwestern Mutual Life,
201 4.50%, 2/15/09<F1><F2> 201
St. Clair County, Illinois, Certificate of
Participation,
740 7.60%, 12/01/98 756
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Total General Obligation 2,985
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NOTES AND BONDS 1.0%
MISCELLANEOUS 1.0%
Ohio State, Special Obligation, Elementary and
1,000 Secondary Education, 4.10%, 12/01/98 1,001
----------
Total Notes and Bonds 1,001
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PREREFUNDED AND ESCROWED
TO MATURITY 27.2%
Austin, Texas, Electric Waterworks,
1,565 6.60%, 10/01/01, Prerefunded 10/01/98 1,583
California Health Facilities Finance Authority,
1,425 7.63%, 10/01/15, Prerefunded 10/01/98 1,478
Detroit, Michigan Water Supply System,
1,000 7.88%, 7/01/08, Prerefunded 7/01/98 1,026
Hawaii State,
510 7.10%, 6/01/09, Prerefunded 6/01/98 519
Holland, Michigan, School District,
1,000 7.38%, 5/01/19, Prerefunded 5/01/98 1,010
Honolulu, Hawaii, City & County,
1,000 7.00%, 10/01/05, Prerefunded 10/01/98 1,029
Massachusetts State,
2,605 7.00%, 2/01/09, Prerefunded 2/01/99 2,669
Mercer County, New Jersey, Import Authority,
1,000 7.20%, 12/15/12, Prerefunded 12/15/98 1,042
Milwaukee County, Wisconsin,
1,000 6.20%, 12/01/01, Prerefunded 12/01/98 1,013
Mississippi Hospital Equipment and Facilities Authority,
3,165 9.00%, 5/01/05, Prerefunded 5/01/98 3,251
Montgomery County, Texas,
1,000 7.40%, 8/01/01, Prerefunded 9/01/98 1,011
New York State Housing Finance Agency,
1,000 6.35%, 5/01/98, Escrowed to Maturity 1,000
Tuscon, Arizona, Water Revenue,
4,000 6.00%, 7/01/98, Escrowed to Maturity 4,014
University of Arizona,
1,000 6.00%, 6/01/98, Escrowed to Maturity 1,002
West Valley City, Utah, Municipal Building Authority,
3,305 7.70%, 1/15/10, Prerefunded 1/15/99 3,461
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- ---------------
PREREFUNDED AND ESCROWED
TO MATURITY 27.2% (CONT.)
York County, South Carolina, School District,
$1,000 7.60%, 6/01/03, Prerefunded 6/01/98 $ 1,023
----------
Total Prerefunded and Escrowed to Maturity 26,131
----------
REVENUE BONDS 68.0%
ELECTRIC REVENUE 6.1%
County of Mason, Kentucky, Series 1984B,
2,050 4.10%, 10/15/14<F1> 2,050
Putnam County, Florida Development Authority -
3,835 Seminole Electric, 4.10%, 3/15/14<F1> 3,835
----------
5,885
----------
HOSPITAL REVENUE 11.4%
Indiana Health Facilities Finance Authority,
1,400 4.15%, 1/01/12<F1> 1,400
Jefferson Parish, Louisiana, Hospital,
4,600 4.05%, 12/01/15<F1> 4,600
Wisconsin State Health & Educational Facilities -
1,900 Blood Center, 4.20%, 6/01/19<F1> 1,900
Wisconsin State Health & Educational Facilities -
3,100 Marshfield Clinic, 4.15%, 6/01/10<F1> 3,100
----------
11,000
----------
HOUSING REVENUE 14.3%
Clayton County, Georgia Housing Authority,
1,400 Kimberly Forest, 4.05%, 1/01/21<F1> 1,400
Clayton County, Georgia Housing Authority,
1,000 Chateau Forest, 4.05%, 1/01/21<F1> 1,000
Cook County Illinois Catholic Charities,
2,000 4.20%, 1/01/28<F1> 2,000
Illinois Development Finance Authority -
1,620 St. Paul's House, 4.20%, 2/01/25<F1> 1,620
Orland Hills, Illinois, Multi-Family,
2,470 4.20%, 12/01/04<F1> 2,470
Washington State Housing Finance - Community
5,230 Multifamily Mortgage, 4.00%, 10/01/20<F1> 5,230
----------
13,720
----------
INDUSTRIAL DEVELOPMENT/POLLUTION
CONTROL REVENUE 15.3%
Mason County, Kentucky, Pollution Control,
3,000 4.10%, 10/15/14<F1> 3,000
Moffat County, Colorado, Pollution Control,
5,000 4.10%, 7/01/10<F1> 5,000
Oakbrook Terrace, Illinois, Industrial Development,
4,100 3.90%, 12/01/25<F1> 4,100
Oklahoma County, Oklahoma Finance Authority -
2,600 Perrine Office Project, 3.80%, 12/01/14<F1> 2,600
----------
14,700
----------
See notes to the financial statements.
FIRSTAR
FUNDS
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TAX-EXEMPTMONEY MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- ---------------
MISCELLANEOUS 11.9%
Cook County, Illinois,
$3,955 4.20%, 5/1/20<F1> $ 3,955
Illinois Development Finance Authority,
4,000 Rest Haven, 4.20%, 1/01/27<F1> 4,000
Illinois Development Finance Authority,
1,500 Presbyterian Home Lake-A, 4.20%, 9/01/31<F1> 1,500
Illinois Education Facilities, Chicago Zoological
2,000 Society, 4.20%, 12/15/25<F1> 2,000
----------
11,455
----------
UNIVERSITY REVENUE 9.0%
Illinois Development Finance Authority -
5,000 St. Ignatius College Prep, 4.20%, 6/01/24<F1> 5,000
Illinois Development Finance Authority -
2,100 Lake Forest Academy, 4.20%, 12/01/24<F1> 2,100
Texas Higher Education Authority,
1,555 4.05%, 12/01/25<F1> 1,555
----------
8,655
----------
Total Revenue Bonds 65,415
Number Amortized
of Shares Cost
(in thousands) (in thousands)
INVESTMENT COMPANIES 0.1%
30 Financial Square Tax-Exempt Money Market Fund $ 30
59 Tax Free Cash Reserves 59
----------
Total Investment Companies 89
----------
Total Investments 99.4% 95,621
----------
Other Assets, less Liabilities 0.6% 602
----------
NET ASSETS 100.0% $96,223
==========
<F1> Variable rate security
<F2> Stated maturity with option to put
See notes to the financial statements.
FIRSTAR
FUNDS
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MONEY MARKET FUND
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
1.ORGANIZATION
Firstar Funds, Inc. (the "Company") was incorporated on February 15, 1988, as
a Wisconsin Corporation and is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended. The Money Market,
U.S. Treasury Money Market (formerly the U.S. Federal Money Market Fund), U.S.
Government Money Market and Tax-Exempt Money Market Funds (the "Funds") are
separate, diversified investment portfolios of the Company. The Money Market,
U.S. Treasury Money Market, U.S. Government Money Market and Tax-Exempt Money
Market Funds commenced operations on March 16, 1988, April 29, 1991, August 1,
1988 and June 27, 1988, respectively.
2.SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - The securities are valued on the basis of amortized
cost for financial reporting purposes and federal income tax purposes, which
approximates market value. Variable rate demand notes and funding agreements are
valued at cost which approximates market value.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Funds have complied with the provisions of the Internal Revenue Code
available to regulated investment companies and intend to continue to so comply
in future years.
c) Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
d) Expenses - The Funds are charged for those expenses that are directly
attributable to each portfolio such as advisory, administration, service
organization fees and certain shareowner service fees. Expenses that are not
directly attributable to a portfolio are typically allocated among the Company's
portfolios in proportion to their respective net assets, number of shareowner
accounts or net sales, where applicable.
e) Distributions to Shareowners - Dividends from net investment income are
declared daily and paid monthly. Distributions of net realized capital gains, if
any, will be declared at least annually.
f) Other - The Funds recognize interest income on the accrual basis. For
securities with put provisions, discounts and premiums are amortized to the
earlier of the put date or maturity. For the remainder of securities, discounts
and premiums are amortized over the life of the respective securities.
Investment and shareowner transactions are recorded on trade date. Realized
gains and losses from investment transactions are reported on an identified cost
basis which is the same basis the Funds use for federal income tax purposes. The
U.S. Government Money Market Fund has investments in floating rate government
agency notes. The notes have weekly interest rate reset provisions which are
tied to the 90-day Treasury bill rate. The Fund values the securities at
amortized cost, which approximates market. Transactions in capital shares at
$1.00 per share are shown in the Statement of Changes in Net Assets. Generally
accepted accounting principles require that permanent financial reporting and
tax differences be reclassified to capital stock.
3.INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company, LLC ("FIRMCO"). FIRMCO is a subsidiary
of Firstar Corporation, a publicly held bank holding company. Pursuant to its
Advisory Agreement with the Funds, FIRMCO is entitled to receive a fee,
calculated daily and payable monthly, at the annual rate of 0.50% on the first
$2 billion of each Fund's average daily net assets, and 0.40% of each Fund's
average daily net assets in excess of $2 billion. For the six months ended April
30, 1998, FIRMCO voluntarily waived $238, $36, $38 and $40 of its advisory fees,
in thousands, for the Money Market, U.S. Treasury Money Market, U.S. Government
Money Market and Tax-Exempt Money Market Funds, respectively.
Firstar Trust Company, an affiliate of FIRMCO, serves as custodian, transfer
agent and accounting services agent for the Funds.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.125% of the Company's first $2 billion
of average aggregate daily net assets plus 0.10% of the Company's average
aggregate daily net assets in excess of $2 billion. For the six months ended
April 30, 1998, $97, $27, $73 and $43 of administration fees, in thousands, were
voluntarily waived for the Money Market, U.S. Treasury Money Market, U.S.
Government Money Market and Tax-Exempt Money Market Funds, respectively.
See notes to the financial statements.
FIRSTAR
FUNDS
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The Funds have adopted a Service and Distribution Plan pursuant to Rule 12b-1 of
the Investment Company Act of 1940 and incurred expenses of $42, in thousands,
for the Money Market Fund for the six months ended April 30, 1998. No expenses
were incurred for the U.S. Government Money Market, U.S. Treasury Money Market
or Tax-Exempt Money Market Funds for the six months ended April 30, 1998.
Each Director of the Company who is not affiliated with FIRMCO receives a fee
from the Company for service as a Director and is eligible to participate in a
deferred compensation plan with respect
to these fees. Participants in the plan may designate their deferred Director's
fees as if invested in any one of the Firstar Funds (with the exception of the
MicroCap Fund)or in 90-day U.S. Treasury bills. The value of each Director's
deferred compensation account will increase or decrease as if it were invested
in shares of the selected Firstar Funds or 90-day U.S. Treasury bills. The Funds
maintain their proportionate share of the Company's liability for deferred fees.
This page intentionally left blank.
FIRSTAR FUNDS ARE AVAILABLE THROUGH:
- - THE FIRSTAR FUNDS CENTER,
- - INVESTMENT SPECIALISTS WHO ARE REGISTERED
REPRESENTATIVES OF FIRSTAR INVESTMENT SERVICES, INC.
A REGISTERED BROKER/DEALER, NASD AND SIPC MEMBER,
- - AND THROUGH SELECTED SHAREHOLDER ORGANIZATIONS.
This report is authorized for distribution only when preceded or
accompanied by a current prospectus.
TO OPEN AN ACCOUNT OR REQUEST INFORMATION
1-800-982-8909
1-414-287-3710
FOR ACCOUNT BALANCES AND INVESTOR SERVICES
1-800-228-1024
1-414-287-3808
FIRSTAR FUNDS CENTER
615 EAST MICHIGAN STREET
P.O. BOX 3011
MILWAUKEE, WI 53201-3011
WWW.FIRSTARFUNDS.COM
TO GET THERE, START HERE.(SM)
FIRSTAR
FUNDS
(logo)
FORM #40-0245 6/98
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