<PAGE>
---------------------
TRUST
-----
for Credit Unions
---------------------
Semiannual Report
---------------------
February 28, 1997
<PAGE>
TRUST FOR CREDIT UNIONS
------------------
MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
- ------------ ---------- ----------- ------------
<S> <C> <C> <C>
Bank Notes (3.4%)
Bank of America, Illinois
$ 10,000 5.49% 04/07/97 $ 10,000
First National Bank of Boston
10,000 5.46 08/11/97 10,000
-----------
Total Bank Notes...................... $ 20,000
-----------
Bankers' Acceptances (3.8%)
Corestates Bank, N.A.
$ 7,000 5.42/(a)/% 03/19/97 $ 6,981
First National Bank of Boston
5,000 5.30/(a)/ 03/14/97 4,991
Wachovia Bank of Georgia, N.A.
5,100 5.50/(a)/ 04/04/97 5,074
Wachovia Bank of North Carolina, N.A.
5,000 5.38/(a)/ 03/11/97 4,993
-----------
Total Bankers' Acceptances............ $ 22,039
-----------
Certificates of Deposit (9.4%)
Crestar Bank
$ 10,000 5.35% 05/14/97 $ 10,000
First Alabama Bank
10,000 5.48 04/07/97 10,000
Mellon Bank, N.A.
5,000 5.50 04/07/97 5,000
Morgan Guaranty Trust Co.
15,000 5.31 03/06/97 15,000
Union Bank of California
10,000 5.54 08/27/97 10,000
Wachovia Bank of North Carolina, N.A.
5,000 5.31 03/12/97 5,000
-----------
Total Certificates of Deposit......... $ 55,000
-----------
Certificates of Deposit - Eurodollar (1.7%)
Bankers Trust Co., London
$ 10,000 5.42% 04/08/97 $ 10,000
-----------
Federal Funds (5.1%)
American Express Centurion Bank
$ 5,000 5.34% 03/07/97 $ 5,000
10,000 5.29 03/25/97 10,000
Bank of Hawaii
15,000 5.34 03/05/97 15,000
-----------
Total Federal Funds................... $ 30,000
-----------
U.S. Government Agency Obligations (8.6%)
Federal Farm Credit Bank
$ 50,000 5.42/(a)/% 03/03/97 $ 49,985
-----------
Repurchase Agreements (68.0%)
Goldman, Sachs & Co., dated 12/11/96, repurchase
price $50,679 (FHLMC: $509, 7.00%, 09/01/26)
(FNMA: $51,374, 6.12%, 10/01/32)
$ 50,000 5.38% 03/11/97 $ 50,000
Joint Repurchase Agreement Accounts
222,600 5.37 03/03/97 222,600
100,000 5.41 03/03/97 100,000
Salomon Brothers, Inc., dated 02/28/97,
repurchase price $25,011 (U.S. Treasury Note:
$25,509, 6.63%, 03/31/97)
25,000 5.46 03/03/97 25,000
-----------
Total Repurchase Agreements........... $ 397,600
-----------
Total Investments .................... $ 584,624/(b)/
===========
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
/(a)/ The rate disclosed for this security represents the yield to maturity.
/(b)/ The amount stated also represents aggregate cost for federal
income tax purposes.
The accompanying notes are an integral
part of these financial statements.
3
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -------
<S> <C> <C> <C>
Mortgage Backed Obligations (79.0%)
Adjustable Rate Federal Home Loan Mortgage Corp.
(FHLMC)(a) (28.8%)
$ 1,912 7.37% 08/01/17 $ 1,966
1,210 7.75 04/01/18 1,250
8,177 7.68 05/01/18 8,489
2,732 7.38 07/01/18 2,827
18,740 7.58 11/01/19 19,551
8,518 7.39 11/01/21 8,806
4,914 7.35 02/01/22 5,078
27,294 7.73 02/01/22 28,505
24,261 7.68 04/01/22 25,349
4,830 6.87 11/01/22 4,856
2,065 7.17 11/01/22 2,089
13,116 7.61 11/01/22 13,647
10,485 7.63 06/01/24 10,929
3,289 7.23 02/01/28 3,387
5,919 7.18 04/01/28 6,086
2,608 7.54 07/01/29 2,659
7,439 7.67 05/01/31 7,621
----------
Total Adjustable Rate FHLMC........... $ 153,095
----------
Adjustable Rate Federal National Mortgage Association
(FNMA)(a) (41.7%)
$ 3,724 6.55% 03/01/17 $ 3,773
2,396 7.62 11/01/17 2,491
15,832 7.43 12/01/17 16,346
4,867 7.09 08/01/18 5,024
4,469 7.57 09/01/18 4,659
1,543 7.44 11/01/18 1,593
2,243 7.34 05/01/19 2,314
24,186 7.31% 06/01/19 24,946
2,466 7.35 07/01/19 2,546
6,395 7.00 12/01/19 6,304
4,358 7.73 03/01/20 4,565
1,882 7.36 05/01/20 1,949
16,539 7.32 04/01/21 17,069
34,985 7.53 09/01/21 36,417
2,018 7.34 10/01/21 2,056
2,425 7.58 02/01/22 2,528
39,618 7.59 09/01/22 41,382
21,197 7.51 09/01/25 22,071
5,371 7.32 07/01/27 5,545
3,696 7.42 10/01/27 3,819
14,959 6.09 02/01/31 14,833
----------
Total Adjustable Rate FNMA............ $ 222,230
----------
Adjustable Rate Government National Mortgage
Association (GNMA)/(a)/ (3.2%)
$ 10,000 6.00% TBA(b) $ 9,967
6,883 6.50 02/20/23 7,058
----------
Total Adjustable Rate GNMA............ $ 17,025
----------
Fixed Rate FNMA (1.8%)
$ 9,810 6.50% 04/01/03 $ 9,690
Collateralized Mortgage Obligations (CMOs) (3.5%)
Adjustable Rate CMOs/(a)/ (2.7%)
FNMA REMIC Trust 1990-145, Class A
$ 14,339 6.54% 12/25/20 $ 14,473
</TABLE>
The accompanying notes are an integral
part of these financial statements.
4
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
GOVERNMENT SECURITIES PORTFOLIO - Continued
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -------
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Super Floater CMOs/(a)/ (0.8%)
FNMA REMIC Trust 1992-157, Class FA
$ 4,442 1.13% 03/25/04 $ 4,334
----------
Total CMOs ........................... $ 18,807
----------
Total Mortgage Backed Obligations
(cost $421,749) ................... $ 420,847
----------
U.S. Treasury Obligations (18.7%)
U.S. Treasury Notes
$ 13,300 5.63% 10/31/97 $ 13,302
44,500 5.88 04/30/98 44,514
24,300 6.88 08/31/99 24,680
17,000 6.13 07/31/00 16,912
----------
Total U.S. Treasury Obligations
(cost $99,796) .................... $ 99,408
----------
Repurchase Agreement (3.7%)
Joint Repurchase Agreement Account /(c)/
$ 19,900 5.41% 03/03/97 $ 19,900
----------
Total Repurchase Agreement
(cost $19,900) .................... $ 19,900
----------
Total Investments (cost $541,445/(d)/). $ 540,155
==========
- -------------------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in
which value exceeds cost .................. $ 1,611
Gross unrealized loss for investments in
which cost exceeds value .................. (2,948)
==========
Net unrealized loss .......................... $ (1,337)
==========
- -------------------------------------------------------------------
</TABLE>
The percentage shown for each investment category reflects
the value of investments in that category as a percentage of
total net assets.
/(a)/ Variable rate security. Coupon rate disclosed is that which is in effect
at February 28, 1997.
/(b)/ TBA (To Be Assigned) securities are purchased on a forward commitment
basis with an approximate (generally +/- 2.5%) principal amount and no
definite maturity date. The actual principal amount and maturity date will
be determined upon settlement when the specific mortgage pools are
assigned.
/(c)/ A portion of this security is being segregated for open TBA purchases.
/(d)/ The aggregate cost for federal income tax purposes is $541,492.
The accompanying notes are an integral
part of these financial statements.
5
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- ------------ ---------- ----------- -----------
Mortgage Backed Obligations (81.3%)
Fixed Rate Federal National Mortgage Association
(FNMA) (4.1%)
<S> <C> <C> <C>
$ 3,159 6.00% 09/01/07 $ 3,090
1,475 6.00 10/01/08 1,426
3,179 6.00 06/01/09 3,074
6,228 6.00 10/01/09 6,023
----------
Total Fixed Rate FNMA................. $ 13,613
----------
Collateralized Mortgage Obligations CMOs (77.2%)
Adjustable Rate CMOs(a) (26.3%)
Citicorp Mortgage Securities, Inc. 1992-17,
Class A
$ 7,101 7.46% 10/25/22 $ 7,251
CMC Securities Corp. II 1993-I, Class A2
3,830 7.07 09/25/23 3,887
Imperial Savings Association 1987-3, Class A1
2,046 7.45 06/15/17 2,045
Imperial Savings Association 1988-3, Class A
1,933 7.42 01/25/18 1,944
Independent National Mortgage Corp. 1994-W, Class A1
2,944 8.21 12/25/24 3,020
Merrill Lynch Mortgage Investors, Inc. 1994-I, Class A1
6,378 7.92 01/25/05 6,521
Prudential Home Mortgage 1992-8, Class A1
1,204 8.08 04/25/22 1,216
Prudential Home Mortgage 1992-24, Class A1
2,681 8.21 09/25/22 2,739
Resolution Trust Corp. 1992-4, Class B2
4,500 7.36 07/25/28 4,575
Resolution Trust Corp. 1992-11, Class A2
2,766 7.44 10/25/24 2,804
Resolution Trust Corp. 1992-11, Class B2
10,201 7.44 10/25/24 10,317
Resolution Trust Corp. 1994-1, Class M3
5,839 7.98 09/25/29 6,020
Resolution Trust Corp. 1995-1, Class A3
9,966 7.26 10/25/28 10,175
Resolution Trust Corp. 1995-1, Class M3
2,953 7.26 10/25/28 3,002
Ryland Mortgage Securities Corp. 1989-FN1, Class A
1,348 7.65 11/01/18 1,362
Ryland Mortgage Securities Corp. 1991-4, Class A1
1,877 7.23 02/25/20 1,877
Ryland Mortgage Securities Corp. 1991-B1, Class 1
1,614 7.30 03/25/20 1,640
Ryland Mortgage Securities Corp. 1992-3, Class A2
344 7.39 06/25/20 346
Salomon Brothers Mortgage Securities 1990-3A, Class 1
1,741 6.59 11/25/20 1,741
</TABLE>
The accompanying notes are an integral
part of these financial statements.
6
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- ---------- -------- ----------- -----------
Mortgage Backed Obligations -- (Continued)
Adjustable Rate CMOs--(Continued)
Salomon Brothers Mortgage Securities 1994-20, Class A
<S> <C> <C> <C>
$ 5,568 8.10% 12/25/24 $ 5,703
Saxon Mortgage Securities Corp. 1992-1, Class B1
6,800 7.70 09/25/22 6,856
Saxon Mortgage Securities Corp. 1994-11, Class A
1,679 7.88 12/25/24 1,732
----------
Total Adjustable Rate CMOs............ $ 86,773
----------
Planned Amortization Class (PAC) CMOs (25.4%)
CMC Securities Corp. 1993-F, Class A2
$ 5,000 6.75% 11/25/23 $ 5,006
FHLMC Series 1526, Class E
6,500 5.75 03/15/16 6,386
FHLMC Series 1584, Class E
8,800 5.75 10/15/16 8,635
FHLMC Series 1684, Class F
14,000 5.75 08/15/20 13,337
FNMA REMIC Trust 1993-77, Class E
11,068 6.00 07/25/16 10,967
GE Capital Mortgage Services, Inc. 1994-7, Class A6
2,163 5.50 02/25/09 2,105
GE Capital Mortgage Services, Inc. 1994-11, Class A1
9,883 6.50 03/25/24 9,812
GE Capital Mortgage Services, Inc. 1994-13, Class A1
3,097 6.50 04/25/24 3,080
GNMA REMIC Trust 1996-6, Class PB
1,500 6.50 06/16/09 1,500
Housing Securities, Inc. 1993-E, Class E8
9,150 10.00 02/25/08 9,515
PaineWebber Mortgage Acceptance Corp. 1993-6, Class A3
6,800 6.90 08/25/08 6,837
Prudential Home Mortgage 1993-54, Class A4
4,721 6.50 01/25/24 4,674
Residential Funding Mortgage Securities 1994-S12, Class A3
1,913 6.50 04/25/09 1,903
----------
Total PAC CMOs........................ $ 83,757
----------
Sequential Fixed Rate CMOs (25.5%)
Bear Stearns Secured Investors Trust 1987-2, Class D
$ 2,151 9.95% 10/20/18 $ 2,297
CMC Securities Corp. 1993-C, Class C3
3,666 9.55 04/25/08 3,852
Collateralized Mortgage Obligation Trust Series 64, Class Y
12,352 9.00 05/20/06 12,807
FHLMC Series 1293, Class Z
2,499 7.50 07/15/99 2,535
FNMA REMIC Trust 1988-12, Class A
3,633 10.00 02/25/18 3,836
FNMA REMIC Trust 1989-12, Class X
5,890 10.00 12/25/14 6,069
</TABLE>
The accompanying notes are an integral
part of these financial statements.
7
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- ------------ ---------- ----------- -----------
Mortgage Backed Obligations--(Continued)
<S> <C> <C> <C>
Sequential Fixed Rate CMOs--(Continued)
FNMA REMIC Trust 1989-59, Class H
$ 12,191 7.75% 10/25/18 $ 12,317
Housing Securities, Inc. 1994-2, Class A1
11,620 6.50 07/25/09 11,393
Prudential Home Mortgage 1992-A, Class 1B1
6,046 7.20 04/28/22 6,012
Prudential Home Mortgage 1993-38, Class A4
12,441 9.55 09/25/23 13,234
Ryland Mortgage Securities Corp. 72, Class D
1,358 9.85 12/01/16 1,392
Salomon Brothers Mortgage Securities 1984-2, Class Z
7,937 10.00 12/01/14 8,442
-----------
Total Sequential Fixed Rate CMOs...... $ 84,186
-----------
Total CMOs ........................... $ 254,716
-----------
Total Mortgage Backed Obligations
(cost $267,229) ................... $ 268,329
-----------
U.S. Treasury Obligations (14.2%)
U.S. Treasury Notes
$ 12,800 6.88% 08/31/99 $ 13,000
4,400 6.13 07/31/00 4,377
9,100 7.88 11/15/04 9,818
2,450 7.50 02/15/05 2,590
U.S. Treasury Principal-Only Strip /(b)/
29,000 6.67 05/15/05 16,931
===========
Total U.S. Treasury Obligations
(cost $46,931) ..................... $ 46,716
-----------
Repurchase Agreement (0.2%)
Joint Repurchase Agreement Account
$ 800 5.41% 03/03/97 $ 800
-----------
Total Repurchase Agreement
(cost $800) ........................ $ 800
-----------
Total Investments (cost $314,960/(c)/). $ 315,845
===========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
8
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
- --------------------------------------------------------------------
<S> <C>
Federal Income Tax Information:
Gross unrealized gain for investments in
which value exceeds cost .................. $ 1,982
Gross unrealized loss for investments in
which cost exceeds value .................. (1,112)
-----------
Net unrealized gain .......................... $ 870
===========
- --------------------------------------------------------------------
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
/(a)/Variable rate security. Coupon rate disclosed is that which is in effect at
February 28, 1997.
/(b)/The interest rate disclosed for this security represents effective yield to
maturity.
/(c)/The aggregate cost for federal income tax purposes is $314,975.
The accompanying notes are an integral
part of these financial statements.
9
<PAGE>
TRUST FOR CREDIT UNIONS
--------------------
TARGET MATURITY PORTFOLIO (MAY 97)
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- ---------- -------- ---------- ---------
Mortgage Backed Obligations (70.4%)
<S> <C> <C> <C>
Adjustable Rate Federal Home Loan Mortgage Corp.
(FHLMC)/(a)/ (3.4%)
$ 2,057 7.64% 07/01/30 $ 2,139
---------
Collateralized Mortgage Obligations CMOs (67.0%)
Adjustable Rate CMOs/(a)/ (13.0%)
Capstead Securities Corp. 1992-14, Class A
$ 1,542 7.17% 10/25/22 $ 1,559
Imperial Savings Association 1987-3, Class A1
16 7.45 06/25/17 16
Prudential Home Mortgage 1992-24, Class A1
1,903 8.21 09/25/22 1,943
Resolution Trust Corp. 1992-11, Class A2
1,976 7.43 10/25/24 2,003
Resolution Trust Corp. 1994-1, Class M3
1,103 7.98 09/25/29 1,137
Ryland Mortgage Securities Corp. 1992-L1, Class A1
1,544 7.02 02/25/22 1,546
---------
Total Adjustable Rate CMOs........ $ 8,204
---------
Inverse Floater/(a)/ (6.4%)
FHLMC Series 1266, Class F
$ 2,310 9.83% 05/15/97 $ 2,314
FHLMC Series 1284, Class E
1,742 8.75 05/15/97 1,742
---------
Total Inverse Floater............. $ 4,056
---------
Planned Amortization Class (PAC) CMOs (10.0%)
FNMA REMIC Trust 1990-24, Class E
$ 3,500 9.00% 03/25/20 $ 3,640
Prudential Home Mortgage 1993-35, Class A3
2,654 6.75% 09/25/08 2,653
---------
Total PAC CMOs.................... $ 6,293
---------
Regular Floater CMOs/(a)/ (17.6%)
Collateralized Mortgage Securities Corp.
1990-6, Class H
$ 3,000 6.14% 10/20/20 $ 3,029
Collateralized Mortgage Securities Corp.
Series T, Class 1
1,240 6.24 10/20/18 1,240
FBC Mortgage Securities Trust Series A,
Class 1
270 6.13 01/20/18 270
FBC Mortgage Securities Trust Series B,
Class 1
819 6.03 01/25/17 819
Residential Funding Mortgage Securities
1993-S13, Class A5
2,827 6.13 03/25/08 2,836
Salomon Brothers Mortgage Securities 1996,
Class A
2,904 5.80 11/25/26 2,904
---------
Total Regular Floater CMOs........ $ 11,098
---------
Sequential Fixed Rate CMOs (19.4%)
FHLMC Series 1028, Class F
$ 77 9.30% 05/15/05 $ 77
FNMA Remic Trust 1989-10, Class D
4,092 9.50 07/25/09 4,209
FNMA Remic Trust 1989-80, Class E
4,896 9.00 09/25/18 5,039
</TABLE>
The accompanying notes are an integral
part of these financial statements.
10
<PAGE>
TRUST FOR CREDIT UNIONS
------------------
TARGET MATURITY PORTFOLIO (MAY 97) - (Continued)
STATEMENT OF INVESTMENTS
February 28, 1997
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- ---------
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Sequential Fixed Rate CMOs--(Continued)
Prudential Home Mortgage 1993-38, Class A4
$ 2,830 9.55% 09/25/23 $ 2,996
--------
Total Sequential Fixed Rate CMOs..
$ 12,321
--------
Targeted Amortization Class (TAC) CMOs (0.6%)
FNMA REMIC Trust G-35, Class K
$ 391 8.00% 06/25/20 $ 390
--------
Total CMOs ....................... $ 42,362
--------
Total Mortgage Backed Obligations
(cost $44,360) ................. $ 44,501
--------
Repurchase Agreement (27.7%)
Joint Repurchase Agreement Account
$ 17,500 5.41% 03/03/97 $ 17,500
--------
Total Repurchase Agreement
(cost $17,500) ................. $ 17,500
--------
Total Investments
(cost $61,860/(b)/) ............ $ 62,001
========
- ----------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in
which value exceeds cost .............. $ 331
Gross unrealized loss for investments in
which cost exceeds value .............. (190)
--------
Net unrealized gain ..................... $ 141
========
- ----------------------------------------------------------
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of
total net assets.
/(a)/ Variable rate security. Coupon rate disclosed is that which is in effect
at February 28, 1997.
/(b)/ The amount stated also represents aggregate cost for federal income tax
purposes.
The accompanying notes are an integral
part of these financial statements
11
<PAGE>
TRUST FOR CREDIT UNIONS
----------------
STATEMENTS OF ASSETS AND LIABILITIES
February 28, 1997
(Unaudited)
<TABLE>
<CAPTION>
Target
Money Government Mortgage Maturity
Market Securities Securities Portfolio
Portfolio Portfolio Portfolio (May 97)
------------------- ---------------- ----------------- ---------------
ASSETS
<S> <C> <C> <C> <C>
Investments in securities, at value (cost: $584,623,679,
$541,444,726, $314,960,404, $61,860,056,
respectively) ......................................... $ 584,623,679 $ 540,155,463 $ 315,844,529 $ 62,001,200
Cash ..................................................... 74,993 80,749 46,732 24,374
Receivables:
Investment securities sold ............................ -- 13,967,900 14,219,588 1,297,320
Interest .............................................. 1,475,972 4,608,114 2,176,403 275,996
Deferred organization expenses, net ...................... -- -- 5,523 386
Other assets ............................................. 36,236 91,913 3,980 1,567
------------------- ---------------- ----------------- ---------------
Total assets .............................. 586,210,880 558,904,139 332,296,755 63,600,843
------------------- ---------------- ----------------- ---------------
LIABILITIES
Payables:
Investment securities purchased ....................... -- 24,350,984 958,491 27,069
Dividends ............................................. 1,812,628 2,030,389 1,309,587 321,593
Advisory fees ......................................... 38,732 80,951 50,312 12,136
Administration fees ................................... 17,442 40,474 12,578 2,428
Accrued expenses and other liabilities ................... 30,948 25,433 28,331 22,803
------------------- ---------------- ----------------- ---------------
Total liabilities ......................... 1,899,750 26,528,231 2,359,299 386,029
------------------- ---------------- ----------------- ---------------
NET ASSETS
Paid-in capital .......................................... 584,311,130 551,877,124 340,839,680 63,532,452
Accumulated undistributed (distributions in excess of)
net investment income ................................. -- (232,535) (995,703) (39,650)
Accumulated net realized loss on investment
transactions .......................................... -- (17,979,418) (10,790,646) (419,132)
Net unrealized gain (loss) on investments ................ -- (1,289,263) 884,125 141,144
------------------- ---------------- ----------------- ---------------
Net assets ................................ $ 584,311,130 $ 532,375,908 $ 329,937,456 $ 63,214,814
=================== ================ ================= ===============
Net asset value per unit
(net assets/units outstanding) ........................ $1.00 $9.80 $9.73 $9.96
=================== ================ ================= ===============
Redemption price per unit (Note 7) ....................... $1.00 $9.80 $9.73 $9.91
=================== ================ ================= ===============
UNITS OUTSTANDING
Total units outstanding, $0.001 par value
(unlimited number of units authorized)................. 584,311,130 54,337,557 33,904,064 6,350,000
=================== ================ ================= ===============
</TABLE>
The accompanying notes are an integral
part of these financial statements.
12
<PAGE>
TRUST FOR CREDIT UNIONS
----------------
STATEMENTS OF OPERATIONS
For The Six Months Ended February 28, 1997
(Unaudited)
<TABLE>
<CAPTION>
Target
Money Government Mortgage Maturity
Market Securities Securities Portfolio
Portfolio Portfolio Portfolio (May 97)
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Investment Income:
Interest income ........................................ $10,397,220 $16,817,830 $11,365,659 $2,215,847
------------ ------------ ------------ -----------
Expenses:
Advisory fees .......................................... 362,811 525,186 325,920 78,473
Administration fees .................................... 192,285 262,593 81,480 15,695
Custodian fees ......................................... 41,615 38,699 30,375 18,183
Professional fees ...................................... 29,317 39,662 32,368 26,444
Trustees' fees ......................................... 9,233 8,907 5,444 961
Amortization of deferred organization expenses ......... -- -- 4,481 934
Other expenses ......................................... 21,184 23,929 14,983 3,933
------------ ------------ ------------ -----------
Total expenses ....................................... 656,445 898,976 495,051 144,623
Less--Fee waivers and expense reimbursements ............. (272,291) -- -- --
------------ ------------ ------------ -----------
Net expenses ......................................... 384,154 898,976 495,051 144,623
------------ ------------ ------------ -----------
Net investment income ..................................... 10,013,066 15,918,854 10,870,608 2,071,224
Net realized gain (loss) on investment transactions ....... -- (987,012) 367,910 55,113
Net change in unrealized gain (loss) on investments ....... -- 2,753,159 2,001,845 (959)
------------ ------------ ------------ -----------
Net increase in net assets resulting from operations ...... $10,013,066 $17,685,001 $13,240,363 $2,125,378
============ ============ ============ ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
13
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended February 28, 1997
(Unaudited)
<TABLE>
<CAPTION>
Target
Money Government Mortgage Maturity
Market Securities Securities Portfolio
Portfolio Portfolio Portfolio (May 97)
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income .......................................... $ 10,013,066 $ 15,918,854 $ 10,870,608 $ 2,071,224
Net realized gain (loss) from investment transactions .......... -- (987,012) 367,910 55,113
Net change in unrealized gain (loss) on investments ............ -- 2,753,159 2,001,845 (959)
---------------- ------------- ------------- -------------
Net increase in net assets resulting from operations ........... 10,013,066 17,685,001 13,240,363 2,125,378
---------------- ------------- ------------- -------------
Distributions to Unitholders:
From net investment income ..................................... (10,013,066) (15,755,582) (10,592,410) (2,071,224)
In excess of net investment income ............................. -- -- -- (8,309)
---------------- ------------- ------------- -------------
Total distributions to unitholders ............................. (10,013,066) (15,755,582) (10,592,410) (2,079,533)
---------------- ------------- ------------- -------------
From Unit Transactions:
Proceeds from sale of units .................................... 2,227,463,412 21,443,856 5,633,912 --
Reinvestment of dividends and distributions .................... 5,249,510 2,452,674 1,927,121 --
Cost of units repurchased ...................................... (2,075,111,618) (29,152,476) (12,817,960) --
---------------- ------------- ------------- -------------
Net increase (decrease) in net assets from unit transactions ... 157,601,304 (5,255,946) (5,256,927) --
---------------- ------------- ------------- -------------
Total increase (decrease) .................................... 157,601,304 (3,326,527) (2,608,974) 45,845
Net Assets:
Beginning of period ............................................ 426,709,826 535,702,435 332,546,430 63,168,969
---------------- ------------- ------------- -------------
End of period .................................................. $ 584,311,130 $532,375,908 $329,937,456 $63,214,814
================ ============= ============= =============
Accumulated undistributed (distributions in excess of) net
investment income .............................................. -- $ (232,535) $ (995,703) $ (39,650)
================ ============= ============= =============
Summary of Unit Transactions:
Units sold ..................................................... 2,227,463,412 2,184,672 577,738 --
Reinvestment of dividends and distributions .................... 5,249,510 250,192 197,634 --
Units repurchased .............................................. (2,075,111,618) (2,972,135) (1,314,894) --
---------------- ------------- ------------- -------------
Increase (decrease) in units outstanding ....................... 157,601,304 (537,271) (539,522) --
================ ============= ============= =============
</TABLE>
The accompanying notes are an integral
part of these financial statements.
14
<PAGE>
TRUST FOR CREDIT UNIONS
----------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended August 31, 1996
<TABLE>
<CAPTION>
Target
Money Government Mortgage Maturity
Market Securities Securities Portfolio
Portfolio Portfolio Portfolio (May 97)
----------------- --------------- ---------------- -------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income..................................... $ 26,593,606 $ 32,865,667 $ 20,402,162 $ 4,462,235
Net realized gain (loss) from investment transactions .... -- (2,540,339) (1,362,172) 194,087
Net change in unrealized gain (loss) on investments ...... -- 2,123,885 (2,371,245) (512,792)
----------------- --------------- ---------------- --------------
Net increase in net assets resulting from operations ..... 26,593,606 32,449,213 16,668,745 4,143,530
----------------- --------------- ---------------- --------------
Distributions to Unitholders:
From net investment income ............................... (26,593,606) (32,575,731) (19,872,792) (4,433,542)
----------------- --------------- ---------------- --------------
Total distributions to unitholders ....................... (26,593,606) (32,575,731) (19,872,792) (4,433,542)
----------------- --------------- ---------------- --------------
From Unit Transactions:
Proceeds from sale of units .............................. 4,407,395,102 71,305,733 84,209,886 --
Reinvestment of dividends and distributions .............. 14,016,210 5,926,024 3,681,644 --
Cost of units repurchased ................................ (4,376,797,402) (71,061,723) (16,550,279) --
----------------- --------------- ---------------- --------------
Net increase in net assets from unit transactions ........ 44,613,910 6,170,034 71,341,251 --
----------------- --------------- ---------------- --------------
Total increase (decrease)............................... 44,613,910 6,043,516 68,137,204 (290,012)
Net Assets:
Beginning of year ........................................ 382,095,916 529,658,919 264,409,226 63,458,981
----------------- --------------- ---------------- --------------
End of year .............................................. $ 426,709,826 $ 535,702,435 $ 332,546,430 $ 63,168,969
================= =============== ================ ==============
Accumulated undistributed (distributions in excess of) net
investment income ........................................... $ -- $ (395,807) $ (1,273,901) $ (31,341)
================= =============== ================ ==============
Summary of Unit Transactions:
Units sold ............................................... 4,407,395,102 7,283,062 8,597,649 --
Reinvestment of dividends and distributions .............. 14,016,210 606,093 377,883 --
Units repurchased ........................................ (4,376,797,402) (7,267,669) (1,692,128) --
================= =============== ================ ==============
Increase in units outstanding ............................ 44,613,910 621,486 7,283,404 --
================= =============== ================ ==============
</TABLE>
The accompanying notes are an integral
part of these financial statements.
15
<PAGE>
TRUST FOR CREDIT UNIONS
----------------
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Income from Distributions to
investment operations unitholders
-------------------------------------------------
Ratio of
net
From invest-
Net In net Net Ratio of ment
asset Net From excess real- asset net income
value at Net realized net of net ized value expenses to
begin- invest- gain on invest- invest- gain on at to average average
ning of ment invest- ment ment invest- end of Total net net
period income ments/(a)/ income income ments period return/(b)/ assets assets
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/97 ...$1.00 $0.0258 $ -- $(0.0258) $ -- $ -- $1.00 5.33%/(d)/ 0.20%/(d)/ 5.21%/(d)/
Year ended: 8/31/96 ... 1.00 0.0539 -- (0.0539) -- -- 1.00 5.51 0.19 5.37
8/31/95 ... 1.00 0.0555 -- (0.0553) -- -- 1.00 5.56 0.20 5.55
8/31/94 ... 1.00 0.0329 0.0002 (0.0342) (0.0001) (0.0002) 1.00 3.50 0.25 3.29
8/31/93 ... 1.00 0.0305 0.0004 (0.0305) -- (0.0005) 1.00 3.14 0.25 3.05
8/31/92 ... 1.00 0.0416 0.0008 (0.0416) -- (0.0007) 1.00 4.39 0.25 4.16
8/31/91 ... 1.00 0.0641 -- (0.0641) -- -- 1.00 6.93 0.25 6.41
8/31/90 ... 1.00 0.0824 -- (0.0824) -- -- 1.00 8.58 0.25 8.24
8/31/89 ... 1.00 0.0899 -- (0.0899) -- -- 1.00 9.28 0.25 8.99
5/17/88/(c)/ to 8/31/88 ... 1.00 0.0214 -- (0.0214) -- -- 1.00 7.40/(d)/ 0.25/(d)/ 7.27/(d)/
<CAPTION>
Ratio information
assuming no waiver
of fees or expense
reimbursements
------------------------------
Net Ratio of
assets net
at end Ratio of investment
of expenses to income
period average net to average
(000's) assets net assets
---------- ----------------------------
<S> <C> <C> <C>
Six months ended (unaudited):
2/28/97 .... $ 584,311 0.34%/(d)/ 5.07%/(d)/
Year ended: 8/31/96 .... 426,710 0.31 5.25
8/31/95 .... 382,096 0.33 5.42
8/31/94 .... 216,989 0.34 3.20
8/31/93 .... 616,229 0.33 2.97
8/31/92 .... 864,924 0.29 4.12
8/31/91 .... 654,977 0.25 6.41
8/31/90 .... 258,304 0.25 8.24
8/31/89 .... 167,331 0.25 8.99
5/17/88/(c)/ to 8/31/88 .... 106,739 0.25/(d)/ 7.27/(d)/
</TABLE>
/(a)/ May include the balancing effect of calculating per share amounts.
/(b)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
/(c)/ Commencement of operations.
/(d)/ Annualized.
The accompanying notes are an integral
part of these financial statements.
16
<PAGE>
TRUST FOR CREDIT UNIONS
----------------
GOVERNMENT SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Income from Distributions to
investment unitholders
operations
------------------ ---------------------
Ratio of
Net net
realized Ratio of invest-
Net and In Net net ment Net
asset unreal- From excess asset expenses income Port- assets
value at Net ized gain net of net value to to folio at end
begin- invest- (loss) on invest- invest- at average average turn- of
ning of ment invest- ment ment end of Total net net over period
period income ments /(a)/ income income period return/(b)/ assets assets rate/(c)/ (000's)
-------- ------- ------------ ------- -------- ------ ----------- -------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/97 ... $ 9.76 $0.2945 $0.0371 $(0.2916) $ -- $ 9.80 3.43% 0.34%/(e)/ 6.06%/(e)/ 48.49% $ 532,376
Year ended: 8/31/96 ... 9.76 0.6024 (0.0055) (0.5969) -- 9.76 6.26 0.35 6.16 149.66 535,702
8/31/95 ... 9.78 0.5515 (0.0011) (0.5582) (0.0122) 9.76 5.82 0.34 5.65 70.58 529,659
8/31/94 ... 9.97 0.4286 (0.1974) (0.4212) -- 9.78 2.33 0.35 4.25 42.27 594,331
8/31/93 ... 10.03 0.4641 (0.0599) (0.4630) (0.0012) 9.97 4.06 0.34 4.58 67.38 1,122,484
8/31/92 ... 10.00 0.5588 0.0311 (0.5594) -- 10.03 6.68 0.36 5.91 195.53 1,153,410
7/10/91/(d)/to 8/31/91 ... 10.00 0.0873 (0.0016) (0.0857) -- 10.00 7.02/(e)/ 0.48/(e)/ 7.16/(e)/ 3.56 94,139
</TABLE>
<TABLE>
<CAPTION>
Ratio information
assuming no waiver
of fees or expense
reimbursements
--------------------------
Ratio of Ratio of
expenses net
to investment
average income
net to average
assets net assets
--------- ----------------
<S> <C> <C> <C>
Six months ended (unaudited):
2/28/97 ... 0.34%/(e)/ 6.06%/(e)/
Year ended: 8/31/96 ... 0.35 6.16
8/31/95 ... 0.34 5.65
8/31/94 ... 0.37 4.23
8/31/93 ... 0.47 4.45
8/31/92 ... 0.59 5.68
7/10/91/(d)/to 8/31/91 ... 0.73/(e)/ 6.91/(e)/
</TABLE>
/(a)/ Includes balancing effect of calculating per share amounts.
/(b)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
/(c)/ May include the effect of mortgage dollar roll transactions.
/(d)/ Commencement of operations.
/(e)/ Annualized.
The accompanying notes are an integral
part of these financial statements.
17
<PAGE>
TRUST FOR CREDIT UNIONS
--------------------
MORTGAGE SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Income from Distributions to
investment operations unitholders
----------------------- ------------------------------------
Net
realized In excess
Net and In of net Net
asset unreal- From excess real- asset
value at Net ized gain net of net ized value
begin- invest- (loss) on invest- invest- gain on From at
ning of ment invest- ment ment invest- paid-in end of
period income ments/(a)/ income income ments capital period
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/97....................... $ 9.65 $0.3217 $0.0724 $(0.3141) $ -- $ -- $ -- $ 9.73
Year ended: 8/31/96....................... 9.74 0.6604 (0.1195) (0.6309) -- -- -- 9.65
8/31/95....................... 9.62 0.6075 0.1539 (0.6075) (0.0175) -- (0.0164) 9.74
8/31/94....................... 10.13 0.5533 (0.4530) (0.5719) (0.0340) (0.0044) -- 9.62
10/9/92 /(d)/to 8/31/93....................... 10.00 0.4895 0.1144 (0.4702) -- -- -- 10.13
<CAPTION>
Ratio information
assuming no waiver
Ratio of of fees
net --------------------------
Ratio of invest-
net ment Net Ratio of
expenses income Port- assets net
to to folio at end Ratio of investment
average average turn- of expenses to income
Total net net over period average net to average
return/(b)/ assets assets rate/(c)/ (000's) assets net assets
---------------------------------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/97..................... 4.12% 0.30%/(e)/ 6.67%/(e)/ 58.30% $329,937 0.30%/(e)/ 6.67%/(e)/
Year ended: 8/31/96..................... 5.67 0.28 6.64 163.42 332,546 0.30 6.62
8/31/95..................... 8.20 0.26 6.36 130.98 264,409 0.32 6.30
8/31/94..................... 1.00 0.28 5.66 188.58 283,886 0.29 5.65
10/9/92 /(d)/to 8/31/93..................... 6.27 0.33/(e)/ 5.64/(e)/ 146.24 213,510 0.38/(e)/ 5.59/(e)/
</TABLE>
/(a)/ Includes balancing effect of calculating per share amounts.
/(b)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
/(c)/ May include the effect of mortgage dollar roll transactions.
/(d)/ Commencement of operations.
/(e)/ Annualized.
The accompanying notes are an integral
part of these financial statements.
18
<PAGE>
TRUST FOR CREDIT UNIONS
--------------
TARGET MATURITY PORTFOLIO (MAY 97)
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Income from Distributions to
investment operations unitholders
--------------------------- ------------------------
Net
realized
Net and In
asset unreal- From excess
value at Net ized gain net of net
begin- invest- (loss) on invest- invest-
ning of ment invest- ment ment
period income ments/(a)/ income income
---------- ---------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/97 ................. $ 9.95 $ 0.3262 $ 0.0113 $(0.3262) $(0.0013)
Year ended: 8/31/96 ................. 9.99 0.7028 (0.0446) (0.6982) --
8/31/95 ................. 9.91 0.6674 0.0673 (0.6547) --
5/23/94/(e)/to 8/31/94 ................. 10.00 0.1594 (0.0674) (0.1594) (0.0226)
</TABLE>
<TABLE>
<CAPTION>
Ratio of
net
invest-
Net Ratio of ment Net
asset net income Port- assets
value expenses to folio at end
at to average average turn of
end of Total net net over period
period return/(b)/ assets assets rate/(c)/ (000's)
----------- ------------- -------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/97 ................. $9.96 3.43% 0.46%/(d)/ 6.59%/(d)/ 98.50% $ 63,215
Year ended: 8/31/96 ................. 9.95 6.77 0.43 7.03 190.34 63,169
8/31/95 ................. 9.99 7.70 0.45 6.77 147.76 63,459
5/23/94/(e)/to 8/31/94 ................. 9.91 0.92 0.48/(d)/ 5.80/(d)/ 74.63 68,867
</TABLE>
/(a)/ Includes balancing effect of calculating per share amounts.
/(b)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions and a complete redemption
of the investment at the net asset value at the end of the period. Total
return would be reduced if a redemption fee were taken into account.
/(c)/ May include the effect of mortgage dollar roll transactions.
/(d)/ Annualized.
/(e)/ Commencement of operations.
The accompanying notes are an integral
part of these financial statements.
19
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS
February 28, 1997
(Unaudited)
1. Organization
Trust for Credit Unions (the "Fund") is a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company consisting of four diversified portfolios: the
Money Market Portfolio, Government Securities Portfolio, Mortgage Securities
Portfolio and Target Maturity Portfolio (May 97). Units of the Fund are offered
for sale solely to state and federally chartered credit unions. Unless extended
by appropriate action of the Fund's Board of Trustees and by the unitholders,
Target Maturity Portfolio (May 97) (the "Target Maturity Portfolio") will be
liquidated on or about May 15, 1997, (the "Termination Date") at which time all
units of this portfolio that are outstanding as of the close of business on the
Termination Date will be redeemed by the Fund at their net asset value.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by
the Fund which are in conformity with those generally accepted in the investment
company industry. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that may affect the reported amounts.
A. Investment Valuation
-------------------------
For the Government Securities Portfolio, Mortgage Securities Portfolio and
Target Maturity Portfolio, investments in mortgage backed, asset backed and U.S.
Treasury obligations for which accurate market quotations are readily available
are valued on the basis of quotations furnished by a pricing service or provided
by dealers in such securities. Other securities are valued based on yield
equivalents, a pricing matrix or other sources, under valuation procedures
established by the Fund's Board of Trustees. Portfolio securities for which
accurate market quotations are not readily available are valued based on yield
equivalents, pricing matrix or other sources, under valuation procedures
established by the Fund's Board of Trustees. Securities of the Money Market
Portfolio and short-term debt obligations maturing in sixty days or less for the
Government Securities Portfolio, Mortgage Securities Portfolio and Target
Maturity Portfolio are valued at amortized cost, which approximates market
value. Under this method, all investments purchased at a discount or premium are
valued by amortizing the difference between the original purchase price and
maturity value of the issue over the period to maturity.
20
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1997
(Unaudited)
2. Summary of Significant Accounting Policies -- (Continued)
B. Security Transactions and Investment Income
------------------------------------------------
Security transactions are recorded on the trade date. Realized gains and
losses on sales of portfolio securities are calculated on the identified cost
basis. For the Money Market Portfolio, interest income is determined on the
basis of interest accrued, premium amortized and discount earned. The Mortgage
Securities Portfolio and the Target Maturity Portfolio amortize market discounts
and premiums on certain mortgage backed securities and treasury obligations.
For the Government Securities Portfolio, Mortgage Securities Portfolio and
Target Maturity Portfolio, premiums on interest-only securities and on
collateralized mortgage obligations with nominal principal amounts are amortized
on an effective yield basis over the expected life of the respective securities,
taking into account actual principal prepayment experience and estimates of
future principal prepayments. Certain mortgage security paydown gains and losses
are taxable as ordinary income. Such paydown gains and losses increase or
decrease taxable ordinary income available for distribution and are classified
as interest income in the accompanying Statements of Operations. Original issue
discounts on debt securities are amortized to interest income over the life of
the security with a corresponding increase in the cost basis of that security.
C. Mortgage Dollar Rolls
--------------------------
The Government Securities, Mortgage Securities and Target Maturity
Portfolio may enter into mortgage "dollar rolls" in which the portfolios sell
securities in the current month for delivery and simultaneously contract with
the same counterparty to repurchase similar (same type, coupon and maturity) but
not identical securities on a specified future date. The portfolios will hold
and maintain cash or liquid debt securities in an amount equal to the forward
purchase price in a segregated account until the settlement date. For financial
reporting and tax reporting purposes, the portfolios treat mortgage dollar rolls
as two separate transactions: one involving the purchase of a security and a
separate transaction involving a sale.
21
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1997
(Unaudited)
2. Summary of Significant Accounting Policies -- (Continued)
D. Federal Taxes
------------------
It is each portfolio's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute each year substantially all investment company taxable income to its
unitholders. Accordingly, no federal tax provisions are required. The
characterization of distributions to unitholders for financial reporting
purposes is determined in accordance with income tax rules and is based upon the
best available information. Therefore, in the accompanying financial statements,
the source of a portfolio's distributions may be shown as (i) from net
investment income, (ii) in excess of net investment income, (iii) from net
realized gains on investment transactions, (iv) in excess of net realized gains
on investment transactions, and/or (v) from capital.
As of each portfolio's most recent tax year-end, the portfolios had
approximately the following amounts of capital loss carryforward for U.S.
federal tax purposes:
<TABLE>
<CAPTION>
Portfolio Amount Years of Expiration
---------------------------------------------- ---------------------------------------------- ---------------------------
<S> <C> <C>
Government Securities........................ $17,941,000 1999 - 2004
Mortgage Securities.......................... 10,753,000 2001 - 2004
Target Maturity (May 97)..................... 398,000 1997*
</TABLE>
* Represents earlier of Termination Date or actual expiration date of
capital loss carry forward.
These amounts are available to be carried forward to offset future capital
gains of the corresponding portfolios to the extent permitted by applicable laws
or regulations.
E. Deferred Organization Expenses
-----------------------------------
Organization-related costs are being amortized on a straight-line basis
over a period of five years for the Mortgage Securities Portfolio, and over
three years for the Target Maturity Portfolio.
22
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1997
(Unaudited)
2. Summary of Significant Accounting Policies -- (Continued)
F. Expenses
-------------
Expenses incurred by the Fund that do not specifically relate to an
individual portfolio of the Fund are allocated to the portfolios based on each
portfolio's relative average net assets for the period.
3. Agreements
Goldman Sachs Asset Management ("GSAM"), a separate operating division of
Goldman, Sachs & Co. ("Goldman Sachs"), acts as investment adviser pursuant to
an Advisory Agreement with the Fund. Under the Advisory Agreement, Goldman
Sachs, subject to the general supervision of the Fund's Trustees, manages the
Fund's portfolios and provides certain administrative services for the Fund. As
compensation for services rendered under the Advisory Agreement and the
assumption of the expenses related thereto, Goldman Sachs is entitled to a fee,
computed daily and payable monthly, at the following annual rates as a
percentage of each respective portfolio's average daily net assets:
<TABLE>
<CAPTION>
Portfolio Asset levels Fee
----------------------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
Money Market................................. up to $300 million 0.20%
in excess of $300 million 0.15%
Government Securities........................ all 0.20%
Mortgage Securities.......................... all 0.20%
Target Maturity Portfolio.................... up to $75 million 0.25%
in excess of $75 million 0.20%
</TABLE>
Effective July 1, 1995, Goldman Sachs voluntarily agreed to limit its
advisory fee with respect to the Money Market Portfolio to .12% of the first
$250 million, .10% of the next $250 million, .09% of the next $250 million and
.08% over $750 million of the portfolio's average daily net assets. For the
period ended February 28, 1997, Goldman Sachs waived advisory fees amounting to
$145,962.
23
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1997
(Unaudited)
3. Agreements -- (Continued)
Callahan Credit Union Financial Services Limited Partnership ("CUFSLP")
serves as the Fund's administrator pursuant to an Administration Agreement.
Callahan Financial Services, Inc. serves as a general partner to CUFSLP, and 39
major credit unions are limited partners. Under the Administration Agreement,
CUFSLP, subject to general supervision of the Fund's Trustees, provides certain
administrative services to the Fund. As compensation for services rendered under
the Administration Agreement, CUFSLP is entitled to the following fees, computed
daily and payable monthly, at the following annual rates as a percentage of each
respective portfolio's average daily net assets:
<TABLE>
<CAPTION>
Portfolio Fee
--------------------------------- ------------
<S> <C>
Money Market..................... 0.10%
Government Securities............ 0.10%
Mortgage Securities.............. 0.05%
Target Maturity Portfolio........ 0.05%
</TABLE>
For the period ended February 28, 1997, CUFSLP voluntarily agreed to limit
its administration fee with respect to the Money Market Portfolio to .05% of the
first $500 million, .04% of the next $250 million and .03% over $750 million of
the portfolio's average daily net assets. For the period ended February 28,
1997, CUFSLP waived administration fees amounting to $96,270.
Effective July 1, 1995, CUFSLP has agreed that to the extent the total
annualized expenses (excluding interest, taxes, brokerage and extraordinary
expenses) (the "Expenses") of the Money Market Portfolio exceed 0.20% of the
average daily net assets of the Money Market Portfolio, CUFSLP will either
reduce the administration fees otherwise payable or pay such Expenses of the
Money Market Portfolio. The amount reimbursable to the Money Market Portfolio at
February 28, 1997 was $30,059, and is reflected in "Other Assets" in the
accompanying Statements of Assets and Liabilities.
The Government Securities Portfolio bears the fees payable under the
Administration Agreement and the Advisory Agreement as well as other expenses
incurred in its operations. CUFSLP and Goldman Sachs have each voluntarily
agreed to limit the other annualized ordinary expenses (excluding advisory fees,
administration fees, interest, taxes, brokerage and extraordinary expenses) of
the Government Securities Portfolio such that CUFSLP will reimburse expenses
that exceed .05% up to .10% of the Government Securities Portfolio's average
daily net assets, and Goldman Sachs will reimburse expenses that exceed .10% up
to .15% of the Government Securities Portfolio's average daily net assets. For
the period ended February 28, 1997, no expenses were required to be reimbursed
by CUFSLP and Goldman Sachs.
24
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1997
(Unaudited)
3. Agreements -- (Continued)
Callahan Financial Services, Inc. and Goldman Sachs serve as exclusive
distributors of units of the Fund. For the period ended February 28, 1997,
neither received any compensation for this service. Goldman Sachs also serves as
Transfer Agent of the Fund for a fee.
4. Investment Transactions
Purchases and proceeds of sales or maturities of long-term securities
for the Government Securities Portfolio, Mortgage Securities Portfolio and
Target Maturity Portfolio for the period ended February 28, 1997 were as follows
($ in thousands):
<TABLE>
<CAPTION>
Government Mortgage Target
Securities Securities Maturity
Portfolio Portfolio Portfolio
-------------- --------------- ---------------
<S> <C> <C> <C>
Purchases of U.S. Government and agency
obligations................................................ $252,779 $111,274 $29,099
Purchases (excluding U.S. Government and agency
obligations)............................................... -- 77,394 22,609
Sales or maturities of U.S. Government and agency
obligations................................................ 266,170 167,239 33,506
Sales or maturities (excluding U.S. Government and
agency obligations)........................................ -- 34,627 29,112
</TABLE>
5. Repurchase Agreements
During the term of a repurchase agreement, the value of the underlying
securities, including accrued interest, is required to equal or exceed the value
of the repurchase agreement. The underlying securities for all repurchase
agreements are held in safekeeping in the customer-only account of State Street
Bank and Trust Company, the Fund's custodian, or at subcustodians. GSAM monitors
the market value of the underlying securities by pricing them daily.
25
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1997
(Unaudited)
6. Joint Repurchase Agreement Accounts
The portfolios, together with other registered investment companies having
advisory agreements with GSAM, transfer uninvested cash balances into joint
accounts, the daily aggregate balances of which are invested in repurchase
agreements. The underlying securities for the repurchase agreements include U.S.
Treasury obligations and mortgage-related securities issued by the U.S.
Government, its agencies or instrumentalities.
As of February 28, 1997, the Money Market, Government Securities, Mortgage
Securities and Target Maturity Portfolios had a 7.53%, 1.50%, 0.06% and 1.32%
undivided interest, respectively, in the repurchase agreements in the following
joint account which equaled $100,000,000, $19,900,000, $800,000 and $17,500,000
in principal amount, respectively. As of February 28, 1997, the repurchase
agreements in this joint account, along with the corresponding underlying
securities (including the type of security, market value, interest rate and
maturity date), were as follows ($ in thousands):
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
Bear Stearns Companies, Inc., dated 02/28/97, repurchase price $1,200,541
(FHLMC: $388,027, 6.50-8.00%, 07/01/26-01/01/27) (FNMA: $849,804,
6.50-8.00%, 12/01/10-02/01/27)........................................... $1,200,000 5.41% 03/03/97 $1,200,000
CS First Boston Corp., dated 02/28/97, repurchase price $27,812 (U.S.
Treasury Note: $28,422, 8.50%, 02/15/00)................................. 27,800 5.36 03/03/97 27,800
Nomura Securities, Inc., dated 02/28/97, repurchase price $100,045 (FHLMC:
$51,542, 6.50-8.00%, 02/01/04-01/01/27) (FNMA: $17,959, 6.00-8.50%,
03/01/03-04/01/23) (U.S. Treasury Note: $32,499, 8.50%, 02/15/00)........ 100,000 5.43 03/03/97 100,000
-------
Total Joint Repurchase Agreement Account................................................................... $1,327,800
==========
</TABLE>
26
<PAGE>
TRUST FOR CREDIT UNIONS
-------------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1997
(Unaudited)
6. Joint Repurchase Agreement Accounts -- (Continued)
As of February 28, 1997 the Money Market Portfolio had a 5.93% undivided
interest in the repurchase agreements in the following joint account, which
equaled $222,600,000 in principal amount. As of February 28, 1997, the
repurchase agreements in this joint account, along with the corresponding
underlying securities (including the type of security, market value, interest
rate and maturity date), were as follows ($ in thousands):
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
Canadian Imperial Bank Securities, dated 02/28/97, repurchase price $150,067
(U.S. Treasury Bills: $46,594, 07/31/97-02/05/98) (U.S. Treasury Notes:
$106,408, 5.50-6.63%, 02/15/00-02/28/02) ................................. $150,000 5.35% 03/03/97 $150,000
Chase Manhattan Securities, dated 02/28/97, repurchase price $1,000,448
(U.S. Treasury Notes: $1,020,004, 5.25-8.88%, 01/15/00-07/31/01) ......... 1,000,000 5.38 03/03/97 1,000,000
CS First Boston Corp., dated 02/28/97, repurchase price $489,218 (U.S.
Treasury Notes: $499,943, 5.50-9.13%, 05/15/97-09/30/00) ................. 489,000 5.36 03/03/97 489,000
Daiwa Securities, dated 02/28/97, repurchase price $500,224 (U.S. Treasury
Notes: $510,000, 5.88-7.75%, 07/31/97-01/31/00) .......................... 500,000 5.37 03/03/97 500,000
J.P. Morgan Securities, Inc., dated 02/28/97, repurchase price $500,223
(U.S. Treasury Notes: $510,031, 6.25-7.50%, 02/29/00-11/15/01) ........... 500,000 5.35 03/03/97 500,000
Sanwa Securities, Inc., dated 02/28/97, repurchase price $100,045 (U.S.
Treasury Notes: $102,001, 5.63-5.88%, 06/30/97-06/30/00) ................. 100,000 5.37 03/03/97 100,000
Smith Barney Corp., dated 02/28/97, repurchase price $200,089 (U.S. Treasury
Bills: $5,754, 05/15/97-06/19/97) (U.S. Treasury Interest-Only Strips:
$34,796, 05/15/97-02/15/07) (U.S. Treasury Principal-Only Strips: $5,332,
6.38-8.50% 05/15/97-08/15/02) (U.S. Treasury Notes: $158,119, 5.13-9.25%,
10/15/97-07/15/06) ....................................................... 200,000 5.35 03/03/97 200,000
Swiss Bank Corp., dated 02/28/97, repurchase price $815,965 (U.S. Treasury
Notes: $831,916, 4.75-8.88%, 05/15/97-02/15/03)........................... 815,600 5.37 03/03/97 815,600
----------
Total Joint Repurchase Agreement Account.................................................................... $3,754,600
==========
</TABLE>
7. Redemption Fees
Unitholders of the Target Maturity Portfolio who redeem their units prior
to the Termination Date will be charged a redemption fee equal to .50% of the
net asset value of the redeemed units at the time of the redemption. The
redemption fee is not a sales charge, but is kept by the respective portfolio
for the benefit of continuing unitholders.
27
<PAGE>
TRUST FOR CREDIT UNIONS
-----------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 29, 1996
(Unaudited)
8. Other Matters
Pursuant to an SEC exemptive order, the Money Market Portfolio may enter
into certain principal transactions, including repurchase agreements with
Goldman Sachs, subject to certain limitations as follows: 25% of eligible
security transactions, as defined, and 10% of repurchase agreement transactions
on an annual basis.
28
<PAGE>
This Semiannual Report is authorized for distribution to prospective
investors only when preceded or accompanied by the Trust for Credit Unions
Prospectus which contains facts concerning the Fund's objectives and
policies, management, expenses and other information.
<PAGE>
----------------------------
TRUST
for Credit Unions
----------------------------
TRUSTEES
Rudolf J. Hanley, Chairman
Robert M. Coen, Vice-Chairman
Gene R. Artemenko
James C. Barr
Edgar F. Callahan
John T. Collins
Thomas S. Condit
Betty G. Hobbs
John P. McNulty
John L. Ostby
Wendell A. Sebastian
OFFICERS
Wendell A. Sebastian
President
Charles W. Filson
Vice President
John W. Mosior
Vice President
Nancy L. Mucker
Vice President
Pauline Taylor
Vice President
Scott M. Gilman
Treasurer
John M. Perlowski
Assistant Treasurer
Michael J. Richman
Secretary
Howard B. Surloff
Assistant Secretary
ADMINISTRATOR
Callahan Credit Union Financial Services
Limited Partnership
INVESTMENT ADVISOR
Goldman Sachs Asset Management,
a separate operating division
of Goldman, Sachs & Co.
TRANSFER AGENT
Goldman, Sachs & Co.
[LOGO OF GOLDMAN SACHS APPEARS HERE]
DISTRIBUTORS
Callahan Financial Services, Inc.
Goldman, Sachs & Co.
