MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
U.S. TREASURY MONEY MARKET FUND
ANNUAL REPORT
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
(LOGO) FIRSTAR FUNDS
-----------------------------------------------
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.
- 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
investment adviser, custodian, transfer
agent, administrator, and accounting
services agent and receive compensation
for such services as disclosed in the
current prospectus.
--------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page(s)
SHAREHOLDER 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 THE FINANCIAL STATEMENTS.......................................14-15
REPORT OF INDEPENDENT ACCOUNTANTS.........................................16
<PAGE>
December 1999
DEAR SHAREHOLDER:
INVESTMENT REVIEW
Money market funds generated strong total returns over the past 12 months and
continue to offer attractive inflation-adjusted yields. Short-term interest
rates were stable during much of the year but did succumb to volatility in the
financial markets over the past few months. Money market rates edged upward as
the Federal Reserve raised the Federal Funds rate .25% on June 30th and again on
August 24th. Overall, short-term yields rose from approximately 4.5% in October
of 1998 to 5.3% in October of 1999. During this time period, Firstar Money
Market Funds were managed similarly to their respective benchmarks, thereby
offering principal stability and superior credit quality.
Firstar Money Market Funds are managed with quality and safety of principal as
primary goals. All securities purchased by the Funds must meet our internal high
standards for minimal credit risk and must also meet the strict guidelines set
by the Securities and Exchange Commission ("SEC"). Our credit research team
closely monitors all investments to ensure quality standards are met.
- --------------------------------------------------------------------------------
FIRSTAR MONEY MARKET FUNDS 7-DAY YIELDS<F1>
- --------------------------------------------------------------------------------
PERIOD ENDED OCTOBER 31, 1999
-----------------------------------
MONEY MARKET FUND<F1>
CURRENT EFFECTIVE
4.82% 4.93%
-----------------------------------
-----------------------------------
TAX-EXEMPT
MONEY MARKET FUND
CURRENT EFFECTIVE
2.66% 2.70%
-----------------------------------
-----------------------------------
U.S. GOVERNMENT
MONEY MARKET FUND
CURRENT EFFECTIVE
4.60% 4.71%
-----------------------------------
-----------------------------------
U.S. TREASURY
MONEY MARKET FUND<F1>
CURRENT EFFECTIVE
4.12% 4.21%
-----------------------------------
<F1> After fee waivers. Had fees not been waived, current and effective yields
would have been 4.69% and 4.80% for the Money Market Fund, and 4.10% and
4.19% for the U.S. Treasury Money Market Fund. 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.
<PAGE>
(LOGO) FIRSTAR FUNDS
- --------------------------------------------------------------------------------
FIRSTAR MONEY MARKET FUNDS YIELD COMPARISONS<F1>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IBC'S
MONEY
FIRSTAR FUND
IBC'S IBC'S TAX-EXEMPT AVERAGE/TM IBC'S
MONEY FIRSTAR MONEY MONEY ALL FIRSTAR IBC'S FIRSTAR MONEY
FUND TAX- FUND MARKET TAX-FREE U.S. MONEY U.S. FUND
FIRSTAR AVERAGE/TM EXEMPT AVERAGE/TM TAX TAX GOV'T. FUND TREASURY AVERAGE/TM
MONEY /ALL MONEY /ALL EQUIVALENT EQUIVALENT MONEY AVERAGE/TM MONEY /U.S.
MARKET TAXABLE MARKET TAX-FEE YIELD<F2> YIELD<F2> MARKET /GOV'T. MARKET TREASURY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
1999
October 4.79% 4.77% 2.67% 2.80% 4.17% 4.38% 4.50% 4.52% 4.11% 4.25%
- ------------------------------------------------------------------------------------------------------------------------------------
September 4.60% 4.69% 2.67% 2.80% 4.17% 4.30% 4.50% 4.49% 4.15% 4.25%
- ------------------------------------------------------------------------------------------------------------------------------------
August 4.42% 4.55% 2.43% 2.59% 3.80% 4.05% 4.39% 4.35% 4.01% 4.12%
- ------------------------------------------------------------------------------------------------------------------------------------
July 4.30% 4.45% 2.43% 2.50% 3.80% 3.91% 4.28% 4.25% 3.96% 4.04%
- ------------------------------------------------------------------------------------------------------------------------------------
June 4.18% 4.32% 2.57% 2.69% 4.02% 4.20% 4.08% 4.13% 3.85% 3.98%
- ------------------------------------------------------------------------------------------------------------------------------------
May 4.18% 4.29% 2.70% 2.83% 4.22% 4.42% 4.09% 4.12% 3.81% 3.93%
- ------------------------------------------------------------------------------------------------------------------------------------
April 4.19% 4.32% 2.44% 2.58% 3.81% 4.03% 4.13% 4.14% 3.87% 3.98%
- ------------------------------------------------------------------------------------------------------------------------------------
March 4.24% 4.35% 2.28% 2.44% 3.56% 3.81% 4.15% 4.17% 3.85% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
February 4.31% 4.36% 2.00% 2.16% 3.13% 3.38% 4.17% 4.16% 3.76% 3.96%
- ------------------------------------------------------------------------------------------------------------------------------------
January 4.51% 4.46% 2.42% 2.56% 3.78% 4.00% 4.31% 4.21% 3.84% 3.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1998
December 4.75% 4.54% 2.79% 2.69% 4.36% 4.20% 4.44% 4.29% 4.08% 4.02%
- ------------------------------------------------------------------------------------------------------------------------------------
November 4.79% 4.60% 2.66% 2.69% 4.16% 4.20% 4.49% 4.35% 4.11% 4.09%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
LOOKING AHEAD - THE FORECAST
Looking ahead, we see continued economic growth and expect a slight increase in
short-term rates. We will maintain average maturities comparable to our industry
benchmarks. We continue to meet three important objectives for our money market
shareholders: preservation of principal, liquidity and competitive investment
income.
We appreciate your continued confidence in the Firstar Money Market Funds and
look forward to working with you in the future.
Carl J. Smith
Portfolio Manager
Firstar Investment Research & Management Company, LLC (FIRMCO)
<PAGE>
(LOGO) FIRSTAR FUNDS
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
OCTOBER 31, 1999
U.S. U.S.
TAX-EXEMPT GOVERNMENT TREASURY
MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
------------ ------------ ------------ -----------
ASSETS:
Investments, at
amortized cost $284,522 $152,314 $209,715 $86,136
Cash - 5 - -
Receivable for
securities matured - - - 8,000
Interest receivable 267 1,349 292 1,814
Other 39 6 2 6
---------- ---------- ---------- ----------
Total Assets 284,828 153,674 210,009 95,956
---------- ---------- ---------- ----------
LIABILITIES:
Dividends payable 1,119 354 805 329
Payable to affiliates 205 113 174 75
Accrued expenses and
other liabilities 23 18 15 13
---------- ---------- ---------- ----------
Total Liabilities 1,347 485 994 417
---------- ---------- ---------- ----------
NET ASSETS $283,481 $153,189 $209,015 $95,539
========== ========== ========== ==========
CAPITAL STOCK,
$.0001 par value
Authorized 5,000,000 5,000,000 5,000,000 5,000,000
Issued and
outstanding 283,481 153,189 209,015 95,539
NET ASSET VALUE,
REDEMPTION PRICE
AND OFFERING PRICE
PER SHARE $1.00 $1.00 $1.00 $1.00
========== ========== ========== ==========
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
YEAR ENDED OCTOBER 31, 1999
U.S. U.S.
TAX-EXEMPT GOVERNMENT TREASURY
MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
------------ ------------ ------------ -----------
INVESTMENT INCOME:
Interest income $14,699 $4,455 $12,469 $4,978
EXPENSES:
Investment advisory
fees 1,423 692 1,256 535
Administration fees 306 149 270 115
Service organization
fees 105 - - -
Custody fees 39 25 36 13
Transfer agent fees
and expenses 273 31 33 31
Fund accounting fees 49 35 46 31
Professional fees 39 37 37 33
Reports to shareowners 149 9 19 5
Federal and state
registration fees 32 20 24 18
Directors' fees
and expenses 8 8 8 8
Other 7 3 7 2
---------- ---------- ---------- ----------
Total expenses
before waiver 2,430 1,009 1,736 791
Less: Waiver
of expenses (371) (30) (37) (27)
---------- ---------- ---------- ----------
Net Expenses 2,059 979 1,699 764
---------- ---------- ---------- ----------
NET INVESTMENT INCOME $12,640 $3,476 $10,770 $ 4,214
========== ========== ========== ==========
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
STATEMENT OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
TAX-EXEMPT U.S. GOVERNMENT U.S. TREASURY
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
--------------------- --------------------- --------------------- ---------------------
Year Year Year Year Year Year Year Year
ended ended ended ended ended ended ended ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1999 1998 1999 1998 1999 1998 1999 1998
--------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $12,640 $13,157 $3,476 $3,271 $10,770 $9,683 $4,214 $3,579
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from
operations 12,640 13,157 3,476 3,271 10,770 9,683 4,214 3,579
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 1,076,363 630,330 257,973 249,502 891,590 829,540 345,253 266,098
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Shares issued to
owners in reinvestment
of dividends 12,321 11,254 1,319 1,158 1,870 2,532 422 390
Shares redeemed (1,094,291) (613,513) (228,554) (236,848) (917,621) (797,563) (342,008) (253,094)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) (5,607) 28,071 30,738 13,812 (24,161) 34,509 3,667 13,394
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
DIVIDENDS PAID FROM:
Net investment income (12,640) (13,157) (3,476) (3,271) (10,770) (9,608) (4,214) (3,579)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (5,607) 28,071 30,738 13,812 (24,161) 34,584 3,667 13,394
NET ASSETS:
Beginning of year 289,088 261,017 122,451 108,639 233,176 198,592 91,872 78,478
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
End of year $283,481 $289,088 $153,189 $122,451 $209,015 $233,176 $95,539 $91,872
========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Supplemental Data and Ratios
-----------------------------------
Net Ratio
Asset Dividends Net Net Ratio of Net
Value, from Asset Assets, of Net Investment
Beginning Net Net Value, End Expenses to Income to
of Investment Investment End of Period Average Average Total
PER SHARE DATA Period Income Income of Period (000s) Net Assets Net Assets Return
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1995 $1.00 $0.05 $(0.05) $1.00 $172,261 0.60%<F1> 5.36%<F1> 5.51%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 1.00 0.05 (0.05) 1.00 224,036 0.60%<F1> 4.94%<F1> 5.06%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.05 (0.05) 1.00 261,017 0.60%<F1> 4.98%<F1> 5.12%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.05 (0.05) 1.00 289,088 0.60%<F1> 5.05%<F1> 5.16%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.04 (0.04) 1.00 283,481 0.72%<F1> 4.44%<F1> 4.52%
- ----------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1995 1.00 0.03<F5> (0.03) 1.00 84,084 0.60%<F2> 3.36%<F2> 3.42%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 1.00 0.03<F5> (0.03) 1.00 79,328 0.60%<F2> 3.09%<F2> 3.13%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.03<F5> (0.03) 1.00 108,639 0.60%<F2> 3.06%<F2> 3.12%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.03<F5> (0.03) 1.00 122,451 0.60%<F2> 3.02%<F2> 3.04%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.03<F5> (0.03) 1.00 153,189 0.71%<F2> 2.51%<F2> 2.53%
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1995 1.00 0.05 (0.05) 1.00 163,068 0.60%<F3> 5.24%<F3> 5.37%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 1.00 0.05 (0.05) 1.00 198,334 0.60%<F3> 4.84%<F3> 4.96%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.05 (0.05) 1.00 198,592 0.60%<F3> 4.83%<F3> 4.99%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.05 (0.05) 1.00 233,176 0.60%<F3> 4.90%<F3> 4.97%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.04 (0.04) 1.00 209,015 0.68%<F3> 4.30%<F3> 4.37%
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1995 1.00 0.05 (0.05) 1.00 64,655 0.60%<F4> 5.04%<F4> 5.16%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 1.00 0.05 (0.05) 1.00 53,430 0.60%<F4> 4.70%<F4> 4.80%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.05 (0.05) 1.00 78,478 0.60%<F4> 4.67%<F4> 4.80%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.05 (0.05) 1.00 91,872 0.60%<F4> 4.62%<F4> 4.71%
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.04 (0.04) 1.00 95,539 0.71%<F4> 3.94%<F4> 4.01%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1999, 1998, 1997, 1996, 1995 would have been
0.85%, 0.86%, 0.84%, 0.81%, 0.90%, respectively; and ratios of net
investment income to average net assets for the fiscal years ended October
31, 1999, 1998, 1997, 1996, 1995 would have been 4.31%, 4.79%, 4.73%,
4.73%, 5.06%, respectively.
<F2> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1999, 1998, 1997, 1996, 1995 would have been
0.73%, 0.75%, 0.75%, 0.78%, 0.84%, respectively; and ratios of net
investment income to average net assets for the fiscal years ended October
31, 1999, 1998, 1997, 1996, 1995 would have been 2.49%, 2.87%, 2.91%,
2.91%, 3.12%, respectively.
<F3> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1999, 1998, 1997, 1996, 1995 would have been
0.69%, 0.71%, 0.70%, 0.71%, 0.75%, respectively; and ratios of net
investment income to average net assets for the fiscal years ended October
31, 1999, 1998, 1997, 1996, 1995 would have been 4.29%, 4.79%, 4.73%,
4.73%, 5.09%, respectively.
<F4> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1999, 1998, 1997, 1996, 1995 would have been
0.74%, 0.77%, 0.78%, 0.80%, 0.83%, respectively; and ratios of net
investment income to average net assets for the fiscal years ended October
31, 1999, 1998, 1997, 1996, 1995 would have been 3.91%, 4.45%, 4.49%,
4.50%, 4.81%, respectively.
<F5> For the Tax-Exempt Money Market Fund, substantially all investment income
is exempt from federal income tax.
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
COMMERCIAL PAPER 88.5%
ASSET BACKED SECURITY 23.0%
Ciesco L.P.:
$7,000 5.33%, 12/08/99 $6,962
7,000 5.35%, 12/10/99 6,959
Corporate Asset Funding Co., Inc.:
7,000 5.34%, 11/04/99 6,997
6,000 5.95%, 1/14/00 5,927
CXC, Inc.,
6,000 5.35%, 11/19/99 5,984
Edison Asset Securitization, L.L.C.:
5,400 6.13%, 1/12/00 5,334
9,000 5.73%, 2/14/00 8,849
New Center Asset Trust,
7,000 5.34%, 12/22/99 6,947
Sheffield Receivables Corp.,
7,000 5.35%, 11/02/99 6,999
Toyota Auto Receivables Owner Trust,
4,295 5.37%, 8/15/00 4,295
-----------
65,253
-----------
AUTOS & TRUCKS 9.4%
Daimler Chrysler Holding Company,
7,000 5.95%, 1/18/00 6,910
Ford Motor Credit Company,
6,000 5.67%, 1/11/00 5,933
General Motors Acceptance Corporation,
7,000 5.31%, 12/14/99 6,956
Paccar Financial Corp.
7,000 5.30%, 12/16/99 6,954
-----------
26,753
-----------
BANKING - FOREIGN 7.0%
Dresdner US Finance, Inc.:
7,000 5.33%, 12/13/99 6,956
6,000 5.75%, 2/02/00 5,911
UBS Finance (Delaware), Inc.,
7,000 5.34%, 12/07/99 6,963
-----------
19,830
-----------
BASIC INDUSTRY 4.6%
Monsanto Company:
7,000 5.30%, 11/10/99 6,991
6,000 5.32%, 11/30/99 5,974
-----------
12,965
-----------
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
COMMUNICATIONS 2.5%
Bellsouth Capital Funding,
$ 7,000 5.29%, 12/09/99 $ 6,961
-----------
FINANCE - MISCELLANEOUS 4.6%
CIT Group Holdings, Inc.,
6,000 5.32%, 11/22/99 5,981
National Rural Utilities CFC,
7,000 5.29%, 11/02/99 6,999
-----------
12,980
-----------
FINANCE - SERVICES 14.3%
Goldman Sachs Group, L.P.:
7,000 5.38%, 11/05/99 6,996
7,000 6.00%, 1/21/00 6,905
Merrill Lynch and Co., Inc.:
8,000 5.30%, 11/15/99 7,984
5,000 5.00%, 2/08/00 4,931
Morgan Stanley, Dean Witter, Discover & Co.:
7,000 5.88%, 1/10/00 6,920
7,000 5.81%, 1/28/00 6,900
-----------
40,636
-----------
INSURANCE 14.3%
American Family Financial Services, Inc.,
7,000 5.32%, 12/01/99 6,969
John Hancock Capital Corporation,
7,000 5.30%, 12/23/99 6,946
Metlife Funding Inc.:
7,000 5.31%, 11/01/99 7,000
6,850 5.29%, 11/18/99 6,833
Prudential Funding Corporation:
6,000 5.21%, 11/08/99 5,994
7,000 6.02%, 1/26/00 6,899
-----------
40,641
-----------
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
MACHINERY - AGRICULTURE AND CONSTRUCTION 2.1%
John Deere Capital Corporation,
$ 6,000 6.25%, 6/12/00 $6,017
-----------
MISCELLANEOUS 4.6%
Invensys PLC:
7,000 5.34%, 11/02/99 6,999
6,000 4.54%, 11/16/99 5,987
-----------
12,986
-----------
SOVEREIGN 2.1%
Quebec (Province of) Canada,
5,865 5.32%, 12/21/99 5,822
-----------
Total Commercial Paper 250,844
-----------
FUNDING AGREEMENTS 3.9%
Travelers Insurance Corporation:
4,000 5.52%, 2/18/00<F1> 4,000
7,000 6.10%, 6/30/00<F1> 7,000
-----------
Total Funding Agreements 11,000
-----------
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
INVESTMENT COMPANIES 8.0%
9,573 Financial Square Prime Obligation Fund $9,573
13,105 Short-Term Investments Co.
Liquid Assets Portfolio 13,105
-----------
Total Investment Companies 22,678
-----------
Total Investments 100.4% 284,522
-----------
Liabilities, less Other Assets (0.4)% (1,041)
-----------
NET ASSETS 100.0% $283,481
===========
<F1> Illiquid Security
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
TAX-EXEMPT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
GENERAL OBLIGATION 2.8%
Huntsville, Alabama,
$2,500 5.25%, 2/01/00 $ 2,513
Laredo, Texas,
1,630 6.75%, 8/01/00 1,664
Northwestern Mutual Life
Tax Exempt Mortgage Certificates
108 4.50%, 2/15/09<F1><F2> 108
-----------
Total General Obligation 4,285
-----------
PREREFUNDED AND ESCROWED
TO MATURITY 22.0%
Allegheny County, Pennsylvania,
1,000 6.65%, 12/01/02, Prerefunded 12/01/99 1,003
Boston, Massachusetts, Hospital Revenue,
2,500 7.63%, 2/15/21, Prerefunded 8/15/00 2,614
Central Arizona, Water Conservation District,
5,175 7.13%, 11/01/11, Prerefunded 11/01/00 5,441
Chicago, Illinois, Waste Water Transmission,
2,000 7.10%, 11/15/08, Prerefunded 11/15/99 2,043
Chicago, Illinois, Water Revenue,
1,000 7.20%, 11/15/16, Prerefunded 11/15/99 1,021
Chillicothe, Ohio, Sanitary Sewer System,
1,000 7.65%, 12/01/08, Prerefunded 12/01/99 1,004
District of Columbia, Association of American
3,000 Medical Colleges 7.50%, 2/15/20,
Prerefunded 2/15/00 3,096
Henrico County, Virginia, Hospital Revenue,
1,290 7.50%, 9/01/07, Prerefunded 8/01/00 1,350
Minneapolis, Minnesota,
1,500 5.30%, 11/01/99, Escrowed to Maturity 1,500
Mobile County, Alabama, General Obligation,
1,000 6.35%, 02/01/04, Prerefunded 2/01/00 1,028
Montgomery County, Pennsylvania,
1,580 8.63%, 7/01/07, Prerefunded 7/01/00 1,657
Northeast Independent School District, Texas,
1,900 6.00%, 6/15/00, Escrowed to Maturity 1,930
Pennsylvania State Turnpike,
1,000 7.50%, 12/01/12, Prerefunded 12/01/99 1,024
Rhode Island, Hospital Revenue,
1,000 7.75%, 7/01/16, Prerefunded 7/01/00 1,044
Scranton-Lackwana, Pennsylvania, Hospital Revenue,
1,520 7.25%, 6/15/05, Prerefunded 6/15/00 1,585
Tucson, Arizona, Street and Highway User Revenue,
1,000 6.88%, 7/01/08, Prerefunded 7/01/00 1,030
Walled Lake, Michigan, School District,
2,000 7.10%, 5/01/05, Prerefunded 5/01/00 2,077
Washington State Public Power, Revenue Bond,
3,225 7.25%, 7/01/15, Prerefunded 1/01/00 3,307
-----------
Total Prerefunded and Escrowed to Maturity 33,754
-----------
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
REVENUE BONDS 73.1%
ELECTRIC REVENUE 6.9%
Chelan County, Washington, Public Utility,
$ 4,800 3.50%, 6/01/15<F1><F2> $4,800
County of Mason, Kentucky, Series 1984B,
1,950 3.60%, 10/15/14<F1><F2> 1,950
Putnam County, Florida Development Authority -
3,735 Seminole Electric, 3.60%, 3/15/14<F1><F2> 3,735
-----------
10,485
-----------
HOSPITAL REVENUE 24.6%
Illinois Health Facilities Authority,
Southern Illinois Healthcare Enterprises,
2,500 3.55%, 3/01/21<F1><F2> 2,500
Illinois Health Facilities Authority,
5,970 Recreational Facilities,
3.45%, 12/01/25<F1><F2> 5,970
Illinois Health Facilities Authority,
660 Franciscan Eldercare, 3.50%, 5/15/27<F1><F2> 660
Indiana Health Facilities Finance Authority -
1,500 King's Daughters' Hospital,
3.50%, 12/01/02<F1><F2> 1,500
Indiana Health Facilities Finance Authority -
3,400 Henry County Memorial Hospital,
3.50%, 4/01/13<F1><F2> 3,400
Indiana Health Facilities Finance Authority -
4,700 Hospital Revenue, 3.50%, 1/01/12<F1><F2> 4,700
Indiana Hospital Equipment Finance Authority,
4,200 Nursing Home Improvements,
3.50%, 12/01/15<F1><F2> 4,200
Jefferson Parish, Louisiana, Hospital,
4,600 3.50%, 12/01/15<F1><F2> 4,600
Warren County, Ohio, Health Care Facilities:
975 3.60%, 7/01/21<F1><F2> 975
1,535 3.55%, 7/01/23<F1><F2> 1,535
Wisconsin State Health & Educational Facilities -
1,900 Blood Center, 3.50%, 6/01/19<F1><F2> 1,900
Wisconsin State Health & Educational Facilities -
3,700 Marshfield Clinic, 3.45%, 6/01/10<F1><F2> 3,700
Wisconsin State Health & Educational Facilities -
2,109 Sinai Samaritan, 3.55%, 9/01/19<F1><F2> 2,109
-----------
37,749
-----------
HOUSING REVENUE 8.2%
Florida Housing Finance Agency -
3,000 Carlton Multi-Family, 3.50%, 12/01/08<F1><F2> 3,000
Illinois Development Finance Authority -
3,230 St. Paul's House, 3.50%, 2/01/25<F1><F2> 3,230
Orland Hills, Illinois, Multi-Family,
2,470 3.50%, 12/01/04<F1><F2> 2,470
Washington State Housing Finance - Community
3,930 Multi-Family Mortgage,
3.50%, 10/01/20<F1><F2> 3,930
-----------
12,630
-----------
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
TAX-EXEMPT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
INDUSTRIAL DEVELOPMENT/POLLUTION
CONTROL REVENUE 7.4%
Mason County, Kentucky, Pollution Control,
$ 2,850 3.60%, 10/15/14<F1><F2> $2,850
Montgomery County, Ohio, Solid Waste Revenue,
1,785 5.00%, 11/01/99 1,785
Oakbrook Terrace, Illinois, Industrial Development,
4,100 3.70%, 12/01/25<F1><F2> 4,100
Oklahoma County, Oklahoma Finance Authority -
2,600 Perrine Office Project,
3.90%, 12/01/14<F1><F2> 2,600
-----------
11,335
-----------
MISCELLANEOUS 11.0%
Cleveland, Ohio
500 3.50%, 5/15/24<F1><F2> 500
Cook County, Illinois,
3,790 3.50%, 5/1/20<F1><F2> 3,790
Illinois Development Finance Authority,
3,900 Rest Haven, 3.50%, 1/01/27<F1><F2> 3,900
Illinois Development Finance Authority,
3,000 Presbyterian Home Lake-A, 3.50%, 9/01/31<F1><F2> 3,000
Illinois Education Facilities Authority,
2,000 Chicago Zoological Society,
3.50%, 12/15/25<F1><F2> 2,000
Jefferson County, Colorado,
School District No. R-1
3,695 Certificates of Participation, 3.75%, 12/15/99 3,698
-----------
16,888
-----------
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
UNIVERSITY REVENUE 15.0%
Illinois Development Finance Authority -
$ 5,000 St. Ignatius College Prep,
3.50%, 6/01/24<F1><F2> $ 5,000
Minnesota State Higher Educational Authority,
3,345 Bethel College, 3.50%, 4/01/28<F1><F2> 3,345
Ohio State University, General Receipts
2,400 3.50%, 12/01/07<F1><F2> 2,400
Texas Higher Education Authority,
2,290 3.55%, 12/01/25<F1><F2> 2,290
University of Illinois, Series 1990A,
720 Certificates of Participation, 7.25%, 8/15/00 739
University of Minnesota, Series A,
4,000 3.55%, 1/01/34<F1><F2> 4,000
University of North Carolina,
Chapel Hill Foundation
5,200 Certificates of Participation,
3.55%, 10/01/09<F1><F2> 5,200
-----------
22,974
-----------
Total Revenue Bonds 112,061
-----------
Number
of Shares
(in thousands)
- ---------------
INVESTMENT COMPANIES 1.5%
713 Financial Square Tax-Exempt Money Market Fund 713
299 Financial Square Treasury Obligations Fund 299
1,202 Tax Free Cash Reserves 1,202
-----------
Total Investment Companies 2,214
-----------
Total Investments 99.4% 152,314
-----------
Other Assets, less Liabilities 0.6% 875
-----------
NET ASSETS 100.0% $153,189
===========
<F1> Variable rate security
<F2> Stated maturity with option to put
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
U.S. GOVERNMENT AGENCIES 88.1%
FEDERAL FARM CREDIT BANK 28.3%
Federal Farm Credit Bank Discount Notes:
$ 9,641 5.20%, 11/04/99 $ 9,637
10,000 5.16%, 11/17/99 9,977
10,000 5.10%, 11/30/99 9,959
7,000 4.96%, 12/10/99 6,962
6,000 5.16%, 12/13/99 5,964
7,000 5.12%, 12/27/99 6,944
10,000 5.47%, 2/28/00 9,819
-----------
59,262
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION 30.3%
Federal Home Loan Mortgage
Corporation Discount Notes:
5,000 5.20%, 11/01/99 5,000
8,000 5.09%, 11/02/99 7,999
8,500 5.20%, 11/04/99 8,496
10,000 5.19%, 11/05/99 9,993
8,000 5.10%, 11/09/99 7,991
10,000 5.09%, 12/15/99 9,938
7,000 5.23%, 12/17/99 6,953
7,000 5.42%, 2/10/00 6,894
-----------
63,264
-----------
FEDERAL NATIONAL MORTGAGE ASSN. 29.5%
Federal National Mortgage Assn. Discount Notes:
8,000 5.04%, 11/12/99 7,988
10,000 5.22%, 11/19/99 9,974
8,000 5.22%, 12/03/99 7,963
8,000 5.22%, 12/20/99 7,943
8,250 5.40%, 1/20/00 8,151
7,000 5.53%, 2/04/00 6,898
5,000 4.73%, 3/07/00 4,917
8,000 5.52%, 4/26/00 7,783
-----------
61,617
-----------
Total U.S. Government Agencies 184,143
-----------
U.S. TREASURIES 5.7%
U.S. TREASURY NOTES:
12,000 5.63%, 12/31/99 12,008
-----------
Total U.S. Treasuries 12,008
-----------
Number Amortized
of shares Cost
(in thousands) (in thousands)
- --------------- ---------------
INVESTMENT COMPANIES 6.5%
7,476 Financial Square Government Obligation Fund $ 7,476
6,088 Short-Term Investments Co. Treasury Portfolio 6,088
-----------
Total Investment Companies 13,564
-----------
Total Investments 100.3% 209,715
-----------
Liabilities, less Other Assets (0.3)% (700)
-----------
NET ASSETS 100.0% $209,015
===========
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
U.S. TREASURY MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- --------------- ---------------
U.S. TREASURIES 88.1%
U.S. TREASURY NOTES 73.6%
$17,000 5.88%, 11/15/99 $ 17,007
11,000 5.63%, 12/31/99 11,009
8,000 7.75%, 12/31/99 8,033
20,000 7.75%, 1/31/00 20,126
8,000 8.50%, 2/15/00 8,073
6,000 7.13%, 2/29/00 6,042
-----------
70,290
-----------
U.S. TREASURY BILLS 14.5%
4,000 4.33%, 11/12/99 3,994
10,000 4.96%, 1/20/00 9,890
-----------
13,884
-----------
Total U.S. Treasuries 84,174
-----------
Number
of Shares
(in thousands)
- ---------------
INVESTMENT COMPANIES 2.1%
1,952 Financial Square
Treasury Obligation Portfolio 1,952
10 Short-Term Investments Co.
Treasury Tax Advantage Portfolio 10
-----------
Total Investment Companies 1,962
-----------
Total Investments 90.2% 86,136
-----------
Other Assets, less Liabilities 9.8% 9,403
-----------
NET ASSETS 100.0% $ 95,539
===========
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
U.S. TREASURY MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANIZATION
Firstar Funds, Inc. (the "Company"), formerly Portico Funds, Inc., 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, Tax-Exempt Money Market, U.S. Government
Money Market and U.S. Treasury Money Market Funds (the "Funds"), are separate,
diversified investment portfolios of the Company. The Money Market, Tax-Exempt
Money Market, U.S. Government Money Market and U.S. Treasury Money Market Funds
commenced operations on March 16, 1988, June 27, 1988, August 1, 1988 and April
29, 1991, 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. Investment companies are valued
at net asset value which approximates market value.
b) Federal Income Taxes - It is each Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and each
fund intends to distribute investment company net taxable income and net capital
gains to shareholders. Therefore, no federal income tax provision is required.
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 expected 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.
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 in the capital
accounts.
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 year ended October 31,
1999, FIRMCO voluntarily waived $336, $14, $7 and $15 of its advisory fees, in
thousands, for the Money Market, Tax-Exempt Money Market, U.S. Government Money
Market and U.S. Treasury Money Market Funds, respectively.
Firstar Bank Milwaukee, N.A. serves as custodian and Firstar Mutual Fund
Services, LLC serves as transfer agent and accounting services agent for the
Funds. Both companies are affiliates of FIRMCO.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Mutual Fund Services, LLC (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 year ended
October 31, 1999, $35, $16, $30 and $12 of administration fees, in thousands,
were voluntarily waived for the Money Market, Tax-Exempt Money Market, U.S.
Government Money Market and U.S. Treasury Money Market Funds, respectively.
<PAGE>
(LOGO) FIRSTAR FUNDS
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 $105, in
thousands, for the Money Market Fund, for the year ended October 31, 1999. No
expenses were incurred for the Tax-Exempt Money Market, U.S. Government Money
Market or U.S. Treasury Money Market Funds for the period ended October 31,
1999.
Each Director of the Company who is not affiliated with FIRMCO receives an
annual 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.
<PAGE>
(LOGO) FIRSTAR FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF THE FIRSTAR MONEY MARKET FUND, THE
FIRSTAR TAX-EXEMPT MONEY MARKET FUND, THE FIRSTAR U.S. GOVERNMENT MONEY MARKET
FUND AND THE FIRSTAR U.S. TREASURY MONEY MARKET FUND
In our opinion, the accompanying statement of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Firstar Money Market Fund, the
Firstar Tax-Exempt Money Market Fund, the Firstar U.S. Government Money Market
Fund and the Firstar U.S. Treasury Money Market Fund (four of the portfolios of
Firstar Funds, Inc. (the "Funds")) at October 31, 1999, the results of each of
their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended all in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
December 28, 1999
<PAGE>
FIRSTAR FUNDS ARE AVAILABLE THROUGH:
- - THE FIRSTAR FUNDS CENTER,
- - FINANCIAL CONSULTANTS WHO ARE EITHER REGISTERED
REPRESENTATIVES OF FIRSTAR INVESTMENT SERVICES, INC.
A REGISTERED BROKER/DEALER, NASD AND SIPC MEMBER,
OR REGISTERED REPRESENTATIVES OF MDS SECURITIES,
A DIVISION OF CONSECO FINANCIAL 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.
FOR ACCOUNT BALANCE AND INVESTOR SERVICES INFORMATION
1-800-677-FUND
1-414-287-3808
FIRSTAR FUNDS CENTER
615 EAST MICHIGAN STREET
P.O. BOX 3011
MILWAUKEE, WI 53201-3011
WWW.FIRSTARFUNDS.COM
(LOGO) FIRSTAR FUNDS
FORM # FFMMANN-99
