<PAGE>
-------------------------------------
TRUST
for Credit Unions
-------------------------------------
SEMIANNUAL REPORT
-------------------------
FEBRUARY 28, 1998
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1998
(UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
AMOUNT RATE DATE COST
--------- -------- -------- ---------
<S> <C> <C> <C>
BANK NOTES (12.9%)
Bank of America
$ 15,000 5.50% 04/24/98 $ 15,000
Corestates Bank, N.A.
7,000 5.56 08/26/98 7,000
FCC National Bank
10,000 5.82 06/02/98 10,000
5,000 5.79 06/17/98 5,000
5,000 5.65 03/03/99 4,998
Fifth Third Bank
20,000 5.51 03/23/98 20,000
Greenwood Trust
15,000 5.53 03/25/98 15,000
5,000 5.55 04/08/98 5,000
Huntington National Bank
3,000 5.82 11/13/98 2,999
Nationsbank, N.A.
20,000 5.50 05/13/98 20,000
Wachovia Bank, N.A.
10,000 5.50 03/11/98 10,000
--------
Total Bank Notes................................ $114,997
--------
BANKERS' ACCEPTANCES(A) (2.3%)
Mellon Bank, N.A.
$ 20,000 5.48% 03/17/98 $ 19,951
PNC Bank, N.A.
1,000 5.65 04/01/98 995
--------
Total Bankers' Acceptances...................... $ 20,946
--------
CERTIFICATES OF DEPOSIT (10.7%)
Bank of America
$ 5,000 5.63% 02/26/99 $ 4,997
BankBoston, N.A.
8,500 5.79 03/16/98 8,501
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
AMOUNT RATE DATE COST
--------- -------- -------- ---------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--(CONTINUED)
Bankers Trust Co., New York
$ 10,000 5.77% 06/18/98 $ 10,000
Chase Manhattan Bank U.S.A.
17,000 5.65 04/06/98 17,001
Corestates Bank, N.A.
5,000 5.63 04/09/98 5,001
Crestar Bank
15,000 5.55 04/09/98 15,001
5,000 5.57 08/24/98 5,000
First Tennessee Bank
15,000 5.50 03/05/98 15,000
PNC Bank, N.A.
5,000 5.55 04/08/98 5,000
Wachovia Bank, N.A.
10,000 5.53 04/07/98 10,000
--------
Total Certificates of Deposit................... $ 95,501
--------
FEDERAL FUNDS (1.7%)
American Express Centurion Bank
$ 15,000 5.52% 03/04/98 $ 15,000
--------
TIME DEPOSIT (1.7%)
Suntrust Bank Atlanta
$ 15,000 5.50% 05/20/98 $ 15,000
--------
VARIABLE RATE DEMAND NOTES(B) (6.5%)
Bank One
$ 5,000 5.89% 03/19/98 $ 5,001
Comerica Bank
10,000 5.80 03/11/98 9,997
Corestates Bank, N.A.
5,000 5.59 03/02/98 5,000
3,000 5.58 03/05/98 3,000
Keybank National Association
15,000 5.50 05/20/98 14,992
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MONEY MARKET PORTFOLIO--(CONTINUED)
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1998
(UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
AMOUNT RATE DATE COST
--------- -------- -------- ---------
<S> <C> <C> <C>
VARIABLE RATE DEMAND NOTES(B)--(CONTINUED)
PNC Bank, N.A.
$ 10,000 5.52% 03/30/98 $ 9,997
Southtrust Bank of Alabama, N.A.
10,000 5.53 03/09/98 9,997
--------
Total Variable Rate Demand Notes.............. $ 57,984
--------
REPURCHASE AGREEMENTS (64.9%)
Joint Account I(c)
$154,300 5.64% 03/02/98 $154,300
Joint Account II
425,000 5.68 03/02/98 425,000
--------
Total Repurchase Agreements................... $579,300
--------
Total Investments............................. $898,728(d)
========
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
(a) The rate disclosed for these securities represents the yield to maturity.
(b) Variable rate securities. Coupon rates disclosed are those which are in
effect at February 28, 1998.
(c) A portion of this security is being segregated for an open purchase.
(d) The amount stated also represents aggregate cost for federal income tax
purposes.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1998
(UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
MORTGAGE BACKED OBLIGATIONS (76.6%)
Adjustable Rate Federal Home Loan Mortgage Corp.
(FHLMC)(a) (23.8%)
$ 1,560 7.76% 08/01/17 $ 1,610
1,034 8.02 04/01/18 1,075
6,777 7.59 05/01/18 7,090
2,245 7.48 07/01/18 2,319
16,778 7.76 11/01/19 17,526
7,143 7.54 11/01/21 7,451
4,284 7.54 02/01/22 4,465
22,965 7.81 02/01/22 24,021
19,976 7.86 04/01/22 20,880
3,974 7.08 11/01/22 4,030
1,741 7.29 11/01/22 1,786
10,776 7.72 11/01/22 11,209
8,668 7.74 06/01/24 9,093
5,780 8.21 10/01/25 6,030
2,730 7.34 02/01/28 2,814
4,796 7.41 04/01/28 4,976
2,044 7.34 07/01/29 2,097
6,409 7.53 05/01/31 6,632
--------
Total Adjustable Rate FHLMC....................... $135,104
--------
Adjustable Rate Federal National Mortgage Association
(FNMA)(a) (37.1%)
$ 3,143 6.86% 03/01/17 $ 3,181
1,816 7.60 11/01/17 1,870
13,250 7.34 12/01/17 13,682
1,291 7.11 06/01/18 1,336
3,965 7.47 08/01/18 4,119
3,699 7.67 09/01/18 3,859
1,287 7.50 11/01/18 1,335
2,176 7.37 05/01/19 2,256
20,549 7.37 06/01/19 21,176
2,032 7.42 07/01/19 2,108
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
MORTGAGE BACKED OBLIGATIONS--(CONTINUED)
Adjustable Rate Federal National Mortgage Association
(FNMA)(a)--(Continued)
$ 5,719 7.00% 12/01/19 $ 5,722
3,798 7.78 03/01/20 3,972
1,503 7.57 05/01/20 1,558
11,687 6.68 12/25/20 11,745
14,140 7.36 04/01/21 14,608
29,534 7.63 09/01/21 30,992
1,949 7.41 10/01/21 2,001
2,032 7.65 02/01/22 2,119
32,416 7.73 09/01/22 33,771
17,127 7.64 09/01/25 17,814
1,997 7.11 10/01/25 2,062
7,290 6.20 11/01/26 7,315
4,436 7.53 07/01/27 4,590
3,167 7.36 10/01/27 3,268
13,549 6.21 02/01/31 13,596
--------
Total Adjustable Rate FNMA........................ $210,055
--------
Adjustable Rate Government National Mortgage Association (GNMA)(a) (8.5%)
$10,108 7.37% 04/20/22 $ 10,391
2,778 7.38 05/20/22 2,857
12,791 7.10 10/20/22 13,110
5,748 7.02 02/20/23 5,902
6,229 7.37 06/20/23 6,389
9,408 5.50 09/20/27 9,471
--------
Total Adjustable Rate GNMA........................ $ 48,120
--------
Fixed Rate FHLMC (3.1%)
$ 9,337 7.00% 01/01/00 $ 9,459
8,173 6.50 12/01/00 8,203
--------
Total Fixed Rate FHLMC............................ $ 17,662
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO--(CONTINUED)
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1998
(UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
Collateralized Mortgage Obligations (CMOs) (4.1%)
Planned Amortization Class (PAC) CMOs (0.9%)
FHLMC Series 1560, Class X
$ 5,236 6.00% 11/15/16 $ 5,229
--------
Regular Floater CMOs(a) (0.9%)
FHLMC REMIC Trust 1009, Class D
$ 2,085 6.29% 10/15/20 $ 2,103
FHLMC REMIC Trust 1698, Class FA
2,966 6.49 03/15/09 2,991
--------
Total Regular Floater CMOs........................ $ 5,094
--------
Sequential Fixed Rate CMOs (2.2%)
FNMA REMIC Trust 1989-10, Class D
$ 2,226 9.50% 07/25/09 $ 2,275
FNMA REMIC Trust 1989-80, Class E
3,024 9.00 09/25/18 3,098
FNMA REMIC Trust 1990-24, Class E
2,639 9.00 03/25/20 2,741
FNMA REMIC Trust G92-43, Class D
4,546 7.50 01/25/03 4,562
--------
Total Sequential Fixed Rate CMOs....................... $ 12,676
--------
Super Floater CMOs(a) (0.1%)
FNMA REMIC Trust 1992-157, Class FA
$ 568 1.97% 03/25/04 $ 565
--------
Total CMOs........................................ $ 23,564
--------
Total Mortgage Backed Obligations (cost
$434,387)........................................ $434,505
--------
AGENCY DEBENTURES(A) (1.8%)
Sri Lanka Aid
$10,000 6.35% 11/01/24 $ 10,025
--------
Total Agency Debentures
(cost $10,000)..................................... $ 10,025
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS (15.4%)
U.S. Treasury Notes
$55,500 5.63% 11/30/00 $ 55,578
30,500 6.63 07/31/01 31,463
--------
Total U.S. Treasury Obligations (cost $87,297).... $ 87,041
--------
REPURCHASE AGREEMENT (7.0%)
Joint Account II
$39,700 5.68% 03/02/98 $ 39,700
--------
Total Repurchase Agreement (cost $39,700)......... $ 39,700
--------
Total Investments
(cost $571,384(b))............................... $571,271
========
- -------------------------------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in which value
exceeds cost....................................... $ 1,742
Gross unrealized loss for investments in which cost
exceeds value...................................... (1,877)
--------
Net unrealized loss................................. $ (135)
========
- -------------------------------------------------------------------------------------------------------
</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 securities. Coupon rates disclosed are those which are in
effect at February 28, 1998.
(b) The aggregate cost for federal income tax purposes is $571,406.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1998
(UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
MORTGAGE BACKED OBLIGATIONS (75.5%)
Fixed Rate Federal National Mortgage Association (FNMA) (1.7%)
$ 2,553 6.00% 09/01/07 $ 2,540
1,243 6.00 10/01/08 1,233
2,740 6.00 06/01/09 2,718
--------
Total Fixed Rate FNMA............................. $ 6,491
--------
Collateralized Mortgage Obligations (CMOs) (73.8%)
Adjustable Rate CMOs(a) (16.5%)
Citicorp Mortgage Securities, Inc. 1992-17, Class A
$ 5,498 7.57% 10/25/22 $ 5,631
CMC Securities Corp. II 1993-I, Class A2
2,745 7.26 09/25/23 2,764
DLJ Mortgage Acceptance Corp. 1992-12, Class A1
3,350 7.91 12/25/22 3,438
Imperial Savings Association 1988-3, Class A
1,515 7.44 01/25/18 1,516
Independent National Mortgage Corp. 1994-W, Class A1
1,883 8.12 12/25/24 1,905
Merrill Lynch Mortgage Investors, Inc. 1994-I, Class A1
4,708 8.05 01/25/05 4,788
Prudential Home Mortgage 1992-8, Class A1
773 8.09 04/25/22 785
Resolution Trust Corp. 1992-04, Class B2
4,500 7.51 07/25/28 4,560
Resolution Trust Corp. 1992-11, Class B2
10,201 7.52 10/25/24 10,234
Resolution Trust Corp. 1994-1, Class M3
5,624 7.97 09/25/29 5,787
Resolution Trust Corp. 1995-1, Class A3
8,165 7.25 10/25/28 8,317
Resolution Trust Corp. 1995-1, Class M3
2,419 7.25 10/25/28 2,470
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
MORTGAGE BACKED OBLIGATIONS--(CONTINUED)
Adjustable Rate CMOs(a)--(Continued)
Ryland Mortgage Securities Corp.
1989-FN1, Class A
$ 951 7.61% 11/01/18 $ 959
Ryland Mortgage Securities Corp. 1991-B1, Class 1
1,189 7.45 03/25/20 1,203
Ryland Mortgage Securities Corp. 1992-3, Class A2
273 7.51 06/25/20 273
Salomon Brothers Mortgage Securities 1990-3A, Class 1
1,376 6.74 11/25/20 1,373
Salomon Brothers Mortgage Securities 1994-20, Class A
3,973 8.18 12/25/24 4,054
Saxon Mortgage Securities Corp. 1994-11, Class A
1,260 8.11 12/25/24 1,290
-------
Total Adjustable Rate CMOs........................ $61,347
-------
Planned Amortization Class (PAC) CMOs (33.9%)
Chemical Mortgage Securities, Inc.
Series 1994-1, Class A1
$ 4,465 6.25% 01/25/09 $ 4,405
CMC Securities Corp. III 1993-F, Class A2
5,000 6.75 11/25/23 4,984
CMC Securities Corp. IV 1997-2,
Class IA13
1,238 6.60 11/25/27 1,243
Countrywide Funding Corp. 1993-9,
Class A3
3,000 6.50 01/25/09 3,016
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO--(CONTINUED)
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1998
(UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
MORTGAGE BACKED OBLIGATIONS--(CONTINUED)
Planned Amortization Class (PAC) CMOs--(Continued)
Countrywide Funding Corp. 1993-11, Class A9
$10,750 6.25% 02/25/09 $ 10,674
Countrywide Mortgage Backed Securities,
Inc. Series 1994-I, Class A4
7,280 6.25 07/25/09 7,269
FHLMC Series 21, Class Z
9,788 5.40 05/25/16 9,659
FHLMC Series 1560, Class X
5,236 6.00 11/15/16 5,229
FHLMC Series 1645, Class ZA
704 5.50 04/15/05 695
FHLMC Series 1985, Class PC
18,000 6.35 05/17/18 18,146
FHLMC Series 1987, Class L
10,000 6.20 08/25/22 9,925
FNMA REMIC Trust G1993-31, Class PZ
4,380 5.75 08/25/16 4,346
FNMA REMIC Trust X-188B, Class ZA
6,411 5.75 09/25/10 6,337
GE Capital Mortgage Services, Inc.
1994-07, Class A6
1,576 5.50 02/25/09 1,553
GE Capital Mortgage Services, Inc.
1994-13, Class A1
2,127 6.50 04/25/24 2,133
GE Capital Mortgage Services, Inc.
1994-15, Class A8
5,362 6.00 04/25/09 5,202
GE Capital Mortgage Services, Inc.
1997-8, Class A13
13,722 7.25 10/25/27 14,035
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
MORTGAGE BACKED OBLIGATIONS--(CONTINUED)
Planned Amortization Class (PAC) CMOs--(Continued)
Housing Securities, Inc. 1993-E, Class E8
$ 5,966 10.00% 02/25/08 $ 6,279
Paine Webber Mortgage Acceptance Corp.
1993-6, Class A3
5,966 6.90 08/25/08 6,005
Prudential Home Mortgage
1993-54, Class A4
4,721 6.50 01/25/24 4,725
--------
Total PAC CMOs.................................... $125,860
--------
Regular Floater CMOs(a) (2.7%)
CMC Securities Corp. III 1994-A,
Class A17
$ 4,867 6.84% 02/25/24 $ 4,996
Countrywide Funding Corp.
1993-10, Class A9
4,931 6.57 01/25/24 5,008
--------
Total Regular Floater CMOs........................ $ 10,004
--------
Sequential Fixed Rate CMOs (19.3%)
Bear Stearns Secured Investors Trust
1987-2, Class D
$ 1,856 9.95% 10/20/18 $ 1,962
CMC Securities Corp. 1993-C, Class C3
2,972 9.55 04/25/08 3,230
Collateralized Mortgage Obligation Trust
Series 12, Class D
3,948 9.50 02/01/17 4,019
Collateralized Mortgage Obligation Trust
Series 64, Class Y
13,510 9.00 05/20/06 13,696
Collateralized Mortgage Obligation Trust
Series 64, Class Z
3,860 9.00 11/20/20 4,194
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO--(CONTINUED)
STATEMENT OF INVESTMENTS
FEBRUARY 28, 1998
(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)
FHLMC Series 1293, Class Z
$ 2,499 7.50% 07/15/99 $ 2,529
FNMA REMIC Trust 1988-12, Class A
3,076 10.00 02/25/18 3,250
FNMA REMIC Trust 1989-12, Class X
3,384 10.00 12/25/14 3,480
FNMA REMIC Trust 1989-59, Class H
5,913 7.75 10/25/18 5,938
Paine Webber Mortgage Acceptance Corp. 1993-5, Class
A5
4,505 6.25 06/25/08 4,469
Prudential Home Mortgage 1992-A,
Class 1B1
397 7.20 11/29/22 397
Prudential Home Mortgage 1993-38, Class A4
16,774 9.55 09/25/23 17,796
Salomon Brothers Mortgage Securities 1984-2, Class Z
6,276 10.00 12/01/14 6,745
--------
Total Sequential Fixed Rate
CMOs............................................. $ 71,705
--------
Support CMO (1.4%)
Countrywide Mortgage Backed Securities, Inc. 1993-A,
Class A9
$ 5,379 6.50% 10/25/08 $ 5,381
--------
Total CMOs........................................ $274,297
--------
Total Mortgage Backed Obligations (cost
$279,341)........................................ $280,788
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- --------- -------- -------- -----
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS (20.7%)
U.S. Treasury Notes
$23,000 5.63% 11/30/00 $ 23,004
17,100 6.63 07/31/01 17,640
U.S. Treasury Principal Only Stripped Securities(b)
31,340 5.54 11/15/04 21,515
22,150 5.58 05/15/05 14,754
--------
Total U.S. Treasury Obligations (cost $76,445).... $ 76,913
--------
REPURCHASE AGREEMENT (11.6%)
Joint Account II(c)
$43,000 5.68% 03/02/98 $ 43,000
--------
Total Repurchase Agreement (cost $43,000)........... $ 43,000
--------
Total Investments
(cost $398,786(d))............................... $400,701
========
</TABLE>
<TABLE>
- -----------------------
<S> <C> <C> <C>
FEDERAL INCOME
TAX
INFORMATION:
Gross
unrealized
gain for
investments
in which
value
exceeds
cost........ $ 3,297
Gross
unrealized
loss for
investments
in which
cost exceeds
value....... (1,382)
-------
Net
unrealized
gain........ $ 1,915
=======
- -----------------------
</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 securities. Coupon rates disclosed are those which are in
effect at February 28, 1998.
(b) The interest rate disclosed for these securities represents effective
yields to maturity.
(c) A portion of this security is being segregated for an open purchase.
(d) The amount stated also represents aggregate cost for federal income tax
purposes.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MONEY GOVERNMENT MORTGAGE
MARKET SECURITIES SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Investment in securities, at value
(identified cost $898,727,622,
$571,384,125, $398,786,000,
respectively).................... $898,727,622 $571,271,017 $400,700,836
Cash.............................. 53,670 4,921 40,480
Receivables:
Investment securities sold....... -- 1,683,371 49,101
Fund shares sold................. -- 10,000,000 5,000,000
Interest......................... 1,990,801 4,446,317 2,260,104
Deferred organization expenses,
net.............................. -- -- 488
Other assets...................... 6,282 77,897 --
------------ ------------ ------------
Total assets.................. 900,778,375 587,483,523 408,051,009
------------ ------------ ------------
LIABILITIES
Payables:
Investment securities purchased.. 4,997,605 18,387,024 34,952,735
Dividends........................ 3,187,325 1,938,469 1,243,515
Advisory fees.................... 34,703 83,079 52,888
Administration fees.............. 11,563 41,538 13,223
Accrued expenses and other
liabilities...................... 67,766 38,709 32,604
------------ ------------ ------------
Total liabilities............. 8,298,962 20,488,819 36,294,965
------------ ------------ ------------
NET ASSETS
Paid-in capital................... 892,479,413 584,943,365 379,323,706
Accumulated distributions in
excess of net investment income.. -- (495,125) (922,509)
Accumulated net realized loss on
investment transactions.......... -- (17,340,428) (8,559,989)
Net unrealized gain (loss) on
investments...................... -- (113,108) 1,914,836
------------ ------------ ------------
Net assets.................... $892,479,413 $566,994,704 $371,756,044
============ ============ ============
Net asset value and public
offering price per unit (net
assets/units outstanding)........ $ 1.00 $ 9.83 $ 9.82
============ ============ ============
UNITS OUTSTANDING
Total units outstanding, $0.001
par value (unlimited number of
units authorized)................ 892,479,413 57,708,132 37,843,661
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MONEY GOVERNMENT MORTGAGE
MARKET SECURITIES SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income..................... $14,580,601 $17,471,175 $11,968,189
----------- ----------- -----------
EXPENSES:
Advisory fees....................... 461,240 544,597 344,799
Administration fees................. 257,904 272,298 86,200
Custodian fees...................... 45,877 54,662 37,868
Professional fees................... 30,514 27,982 28,164
Trustees' fees...................... 12,377 11,743 7,416
Amortization of deferred
organization expenses.............. -- -- 479
Other expenses...................... 24,471 18,606 21,322
----------- ----------- -----------
Total expenses...................... 832,383 929,888 526,248
Less--Fee waivers.................... (512,821) -- --
----------- ----------- -----------
Net expenses........................ 319,562 929,888 526,248
----------- ----------- -----------
NET INVESTMENT INCOME................ 14,261,039 16,541,287 11,441,941
NET REALIZED GAIN ON INVESTMENT
TRANSACTIONS........................ -- 1,123,059 1,696,918
NET CHANGE IN UNREALIZED GAIN (LOSS)
ON INVESTMENTS...................... -- (1,848,942) 592,094
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS..................... $14,261,039 $15,815,404 $13,730,953
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MONEY GOVERNMENT MORTGAGE
MARKET SECURITIES SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------- ------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income.......... $ 14,261,039 $ 16,541,287 $ 11,441,941
Net realized gain on investment
transactions.................. -- 1,123,059 1,696,918
Net change in unrealized gain
(loss) on investments......... -- (1,848,942) 592,094
--------------- ------------- ------------
Net increase in net assets
resulting from operations..... 14,261,039 15,815,404 13,730,953
--------------- ------------- ------------
DISTRIBUTIONS TO UNITHOLDERS:
From net investment income..... (14,261,039) (16,455,790) (11,063,770)
--------------- ------------- ------------
FROM UNIT TRANSACTIONS:
Proceeds from sales of units... 3,208,301,663 126,300,000 48,672,553
Reinvestment of dividends and
distributions................. 6,515,266 3,690,042 2,812,376
Cost of units repurchased...... (2,763,542,192) (126,996,713) (32,711,287)
--------------- ------------- ------------
Net increase in net assets
resulting from unit
transactions.................. 451,274,737 2,993,329 18,773,642
--------------- ------------- ------------
Total increase................. 451,274,737 2,352,943 21,440,825
NET ASSETS:
Beginning of period............ 441,204,676 564,641,761 350,315,219
--------------- ------------- ------------
End of period.................. $ 892,479,413 $ 566,994,704 $371,756,044
=============== ============= ============
ACCUMULATED DISTRIBUTIONS IN
EXCESS OF NET INVESTMENT
INCOME......................... $ -- $ (495,125) $ (922,509)
=============== ============= ============
SUMMARY OF UNIT TRANSACTIONS:
Units sold..................... 3,208,301,663 12,833,045 4,949,256
Reinvestment of dividends and
distributions................. 6,515,266 374,800 286,506
Units repurchased.............. (2,763,542,192) (12,897,177) (3,317,314)
--------------- ------------- ------------
Increase in units outstanding.. 451,274,737 310,668 1,918,448
=============== ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
MONEY GOVERNMENT MORTGAGE
MARKET SECURITIES SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------ ------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income........... $ 22,889,935 $ 32,571,231 $ 21,988,908
Net realized gain (loss) on
investment transactions........ -- (1,471,081) 901,649
Net change in unrealized gain on
investments.................... -- 5,778,256 2,440,462
--------------- ------------ ------------
Net increase in net assets
resulting from operations...... 22,889,935 36,878,406 25,331,019
--------------- ------------ ------------
DISTRIBUTION TO UNITHOLDERS:
From net investment income...... (22,889,935) (32,571,231) (21,988,908)
In excess of net investment
income......................... -- (184,815) (35,416)
--------------- ------------ ------------
Total distributions to
unitholders.................... (22,889,935) (32,756,046) (22,024,324)
--------------- ------------ ------------
FROM UNIT TRANSACTIONS:
Proceeds from sales of units.... 4,961,231,607 107,339,190 39,341,948
Reinvestment of dividends and
distributions.................. 11,661,004 6,072,657 4,572,906
Cost of units repurchased....... (4,958,397,761) (88,594,881) (29,452,760)
--------------- ------------ ------------
Net increase in net assets
resulting from unit
transactions................... 14,494,850 24,816,966 14,462,094
--------------- ------------ ------------
Total Increase.................. 14,494,850 28,939,326 17,768,789
NET ASSETS:
Beginning of year............... 426,709,826 535,702,435 332,546,430
--------------- ------------ ------------
End of year..................... $ 441,204,676 $564,641,761 $350,315,219
=============== ============ ============
ACCUMULATED UNDISTRIBUTED
(DISTRIBUTIONS IN EXCESS OF) NET
INVESTMENT INCOME............... $ -- $ (580,622) $ (1,300,680)
=============== ============ ============
SUMMARY OF UNIT TRANSACTIONS:
Units sold...................... 4,961,231,607 10,921,160 4,039,134
Reinvestment of dividends and
distributions.................. 11,661,004 618,333 469,421
Units repurchased............... (4,958,397,761) (9,016,857) (3,026,928)
--------------- ------------ ------------
Increase in units outstanding... 14,494,850 2,522,636 1,481,627
=============== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<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 RATIO OF INVEST-
NET IN NET NET NET MENT
ASSET NET FROM EXCESS REAL- ASSET EXPENSES INCOME
VALUE AT NET REALIZED NET OF NET IZED VALUE TO TO
BEGIN- INVEST- GAIN ON INVEST- INVEST- GAIN ON AT 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):
2/28/98......... $1.00 $0.0274 $ -- $(0.0274) $ -- $ -- $1.00 5.59%(d) 0.12%(d) 5.53%(d)
Year ended:8/31/97.. 1.00 0.0530 -- (0.0530) -- -- 1.00 5.43 0.18 5.31
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
----------------------
RATIO OF
NET
NET RATIO OF INVESTMENT
ASSETS EXPENSES INCOME
AT END TO TO
OF AVERAGE AVERAGE
PERIOD NET NET
(000'S) ASSETS ASSETS
-------- ---------- -----------
<S> <C> <C> <C>
Six months ended
(unaudited):
2/28/98......... $892,479 0.32%(d) 5.33%(d)
Year ended:8/31/97.. 441,205 0.33 5.16
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) Includes 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.
12
<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 OPERATIONS UNITHOLDERS
----------------------- ------------------
RATIO OF
NET
NET RATIO OF INVEST-
NET REALIZED IN NET NET MENT
ASSET AND FROM EXCESS ASSET EXPENSES INCOME PORT-
VALUE AT NET UNREALIZED NET OF NET VALUE TO TO FOLIO
BEGIN- INVEST- GAIN (LOSS) INVEST- INVEST- AT AVERAGE AVERAGE TURN-
NING OF MENT ON INVEST- MENT MENT END OF TOTAL NET NET OVER
PERIOD INCOME MENTS(A) INCOME INCOME PERIOD RETURN(B) ASSETS ASSETS RATE(C)
-------- ---------- ------------ -------- -------- ------ --------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended
(unaudited):
2/28/98......... $ 9.84 $ 0.2967 $ (0.0115) $(0.2951) $ -- $ 9.83 2.93% 0.34%(e) 6.07%(e) 48.95%
Year ended: 8/31/97. 9.76 0.5911 0.0829 (0.5911) (0.0029) 9.84 7.09 0.34 6.02 88.02
8/31/96......... 9.76 0.6024 (0.0055) (0.5969) -- 9.76 6.26 0.35 6.16 149.66
8/31/95......... 9.78 0.5515 (0.0011) (0.5582) (0.0122) 9.76 5.82 0.34 5.65 70.58
8/31/94......... 9.97 0.4286 (0.1974) (0.4212) -- 9.78 2.33 0.35 4.25 42.27
8/31/93......... 10.03 0.4641 (0.0599) (0.4630) (0.0012) 9.97 4.06 0.34 4.58 67.38
8/31/92......... 10.00 0.5588 0.0311 (0.5594) -- 10.03 6.68 0.36 5.91 195.53
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
<CAPTION>
RATIO INFORMATION
ASSUMING NO WAIVER
OF FEES OR EXPENSE
REIMBURSEMENTS
----------------------
RATIO OF
NET
NET RATIO OF INVESTMENT
ASSETS EXPENSES INCOME
AT END TO TO
OF AVERAGE AVERAGE
PERIOD NET NET
(000'S) ASSETS ASSETS
---------- ---------- -----------
<S> <C> <C> <C>
Six months ended
(unaudited):
2/28/98......... $ 566,995 0.34%(e) 6.07%(e)
Year ended: 8/31/97. 564,642 0.34 6.02
8/31/96......... 535,702 0.35 6.16
8/31/95......... 529,659 0.34 5.65
8/31/94......... 594,331 0.37 4.23
8/31/93......... 1,122,484 0.47 4.45
8/31/92......... 1,153,410 0.59 5.68
7/10/91(d) to
8/31/91............. 94,139 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) Includes the effect of mortgage dollar roll transactions.
(d) Commencement of operations.
(e) Annualized.
The accompanying notes are an integral part of these financial statements.
13
<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 IN RATIO OF
NET REALIZED IN EXCESS NET NET
ASSET AND FROM EXCESS OF NET ASSET EXPENSES
VALUE AT NET UNREALIZED NET OF NET REALIZED VALUE TO
BEGIN- INVEST- GAIN (LOSS) INVEST- INVEST- GAIN ON FROM AT AVERAGE
NING OF MENT ON INVEST- MENT MENT INVEST- PAID-IN END OF TOTAL NET
PERIOD INCOME MENTS(A) INCOME INCOME MENTS CAPITAL PERIOD RETURN(B) ASSETS
-------- ---------- ------------ -------- -------- -------- ------- ------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended
(unaudited):
2/28/98......... $ 9.75 $ 0.3244 $ 0.0581 $(0.3125) $ -- $ -- $ -- $ 9.82 3.96% 0.31%(e)
Year ended: 8/31/97. 9.65 0.6399 0.1011 (0.6399) (0.0011) -- -- 9.75 7.89 0.30
8/31/96......... 9.74 0.6604 (0.1195) (0.6309) -- -- -- 9.65 5.67 0.28
8/31/95......... 9.62 0.6075 0.1539 (0.6075) (0.0175) -- (0.0164) 9.74 8.20 0.26
8/31/94......... 10.13 0.5533 (0.4530) (0.5719) (0.0340) (0.0044) -- 9.62 1.00 0.28
10/9/92(d) to
8/31/93............. 10.00 0.4895 0.1144 (0.4702) -- -- -- 10.13 6.27 0.33(e)
<CAPTION>
RATIO INFORMATION
ASSUMING NO WAIVER
OF FEES
----------------------
RATIO OF
NET RATIO OF
INVEST- NET
MENT NET RATIO OF INVESTMENT
INCOME PORT- ASSETS EXPENSES INCOME
TO FOLIO AT END TO TO
AVERAGE TURN- OF AVERAGE AVERAGE
NET OVER PERIOD NET NET
ASSETS RATE(C) (000'S) ASSETS ASSETS
---------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Six months ended
(unaudited):
2/28/98......... 6.64%(e) 50.57% $371,756 0.31%(e) 6.64%(e)
Year ended: 8/31/97. 6.57 106.10 350,315 0.30 6.57
8/31/96......... 6.64 163.42 332,546 0.30 6.62
8/31/95......... 6.36 130.98 264,409 0.32 6.30
8/31/94......... 5.66 188.58 283,886 0.29 5.65
10/9/92(d) to
8/31/93............. 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) Includes the effect of mortgage dollar roll transactions.
(d) Commencement of operations.
(e) Annualized.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1998
(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 three diversified portfolios: the
Money Market Portfolio, Government Securities Portfolio and Mortgage Securities
Portfolio. Units of the Fund are offered for sale solely to state and federally
chartered credit unions.
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 and Mortgage Securities 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, a 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 and Mortgage Securities 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.
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 amortizes market discounts and premiums on certain
mortgage backed securities and treasury obligations.
For the Government Securities Portfolio and Mortgage Securities Portfolio,
premiums on interest-only securities and on collateralized mortgage obligations
with nominal principal amounts are amortized on an
15
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FEBRUARY 28, 1998
(UNAUDITED)
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
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 and Mortgage Securities 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.
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 following 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... $18,980,000 1999 - 2005
Mortgage Securities..... 10,116,000 2002 - 2005
</TABLE>
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.
16
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FEBRUARY 28, 1998
(UNAUDITED)
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
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.
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%
</TABLE>
Effective July 1, 1997, Goldman Sachs voluntarily agreed to limit its
advisory fee with respect to the Money Market Portfolio to .06% of average
daily net assets; prior thereto, Goldman Sachs voluntarily agreed to limit its
advisory fee 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 six months ended February 28, 1998, Goldman
Sachs waived advisory fees amounting to $306,498.
17
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FEBRUARY 28, 1998
(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 the 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%
</TABLE>
Effective July 1, 1997, CUFSLP voluntarily agreed to limit its administration
fee with respect to the Money Market Portfolio to .02% of average daily net
assets; prior thereto, CUFSLP voluntarily agreed to limit its administration
fee 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 six
months ended February 28, 1998, CUFSLP waived administration fees amounting to
$206,323.
CUFSLP has agreed that to the extent the total annualized expenses (excluding
interest, taxes, brokerage and extraordinary expenses) (the "Expenses") of the
Money Market Portfolio exceed .20% of the average daily net assets of the Money
Market Portfolio, CUFSLP will either reduce the administration fees otherwise
payable or pay such Expenses of the Money Market Portfolio. Effective July 1,
1997-August 31, 1997, the expense limitation of the portfolio remained at .20%
on a daily basis. For the six months ended February 28, 1998, no expenses were
required to be reimbursed by CUFSLP under this agreement.
CUFSLP and Goldman Sachs have each voluntarily agreed to limit the other
annualized ordinary expenses (excluding advisory, administration, interest,
taxes, brokerage and extraordinary expenses) of the Government Securities
Portfolio such that CUFSLP will reimburse expenses that exceed .05% up to .10%
of the Government Securities Portfolio's average daily net assets, and Goldman
Sachs will reimburse expenses that exceed .10% up to .15% of the Government
Securities Portfolio's average daily net assets. For the six months ended
February 28, 1998, no expenses were required to be reimbursed by CUFSLP and
Goldman Sachs under this agreement.
18
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FEBRUARY 28, 1998
(UNAUDITED)
3.AGREEMENTS--(CONTINUED)
Callahan Financial Services, Inc. and Goldman Sachs serve as exclusive
distributors of units of the Fund. For the six months ended February 28, 1998,
neither received any compensation for this service. Goldman Sachs also serves
as Transfer Agent of the Fund for a fee.
4.INVESTMENT TRANSACTIONS
Purchases and proceeds of sales or maturities of long-term securities for the
Government Securities Portfolio and Mortgage Securities Portfolio for the six
months ended February 28, 1998 were as follows ($ in thousands):
<TABLE>
<CAPTION>
GOVERNMENT MORTGAGE
SECURITIES SECURITIES
PORTFOLIO PORTFOLIO
---------- ----------
<S> <C> <C>
Purchases of U.S. Government and agency obligations...... $262,910 $152,992
Purchases (excluding U.S. Government and agency obliga-
tions).................................................. -- 43,589
Sales or maturities of U.S. Government and agency obliga-
tions................................................... 288,911 135,972
Sales or maturities (excluding U.S. Government and agency
obligations)............................................ -- 36,390
</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.
19
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FEBRUARY 28, 1998
(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, 1998, the Money Market Portfolio had a 3.27% undivided
interest in the repurchase agreements in the following joint account which
equaled $4,720,100,000 in principal amount. As of February 28, 1998, the
repurchase agreements in this joint account, along with the corresponding
underlying securities (including the type of security, market value, interest
rate and maturity date), were as follows ($ in thousands):
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
JOINT ACCOUNT I AMOUNT RATE DATE COST
--------------- --------- -------- -------- ----------
<S> <C> <C> <C> <C>
Barclays Bank, dated 2/27/98,
repurchase price $200,094 (U.S.
Treasury Bill: $12,875, 4/30/98) (U.S.
Treasury Notes: $181,709, 5.00-9.25%,
4/15/98-5/15/00) (U.S. Treasury
Principal Strip: $8,307, 8/15/02)
(U.S. Treasury Strip: $1,109,
2/15/99).............................. $200,000 5.65% 3/2/98 $ 200,000
Bear Stearns Companies, Inc, dated
2/27/98, repurchase price $500,236
(U.S. Treasury Strips: $500,236,
5/15/00-2/15/08)...................... 500,000 5.66 3/2/98 500,000
Deutsche Bank, dated 2/27/98,
repurchase price $910,428 (U.S.
Treasury Bill: $11,960, 8/20/98) (U.S.
Treasury Notes: $916,240, 5.50-6.88%,
7/31/99-2/15/08)...................... 910,000 5.65 3/2/98 910,000
Donaldson, Lufkin & Jenrette, Inc.,
dated 2/27/98, repurchase price
$650,306 (U.S. Treasury Bill: $397,
4/30/98) (U.S. Treasury Notes:
$151,282, 5.875-6.375%, 9/30/01-
2/15/04) (U.S. Treasury Principal
Strips: $58,575, 11/15/98-11/15/04)
(U.S. Treasury Strips: $452,746,
5/15/98-2/15/05)...................... 650,000 5.64 3/2/98 650,000
<CAPTION>
First Boston, dated 2/27/98, repurchase
price $550,258 (U.S. Treasury Bills:
$204,503, 4/30/98-11/12/98) (U.S.
Treasury Principal Strips: $2,178,
2/15/01-5/15/01) (U.S. 200,000 5.58 3/2/98 200,000
Treasury Strips: $355,333, 5/15/98-
8/15/04)............................. 350,000 5.65 3/2/98 350,000
<S> <C> <C> <C> <C>
Salomon Brothers, Inc, dated 2/27/98,
repurchase price $900,425 (U.S.
Treasury Notes: $114,853, 6.125-
7.125%, 3/31/98-5/15/05) (U.S.
Treasury Principal Strips: $185,467,
5.75-12.00%, 5/15/98-8/15/05) (U.S.
Treasury Strips: $617,851, 5/15/98-
8/15/07).............................. 900,000 5.66 3/2/98 900,000
<CAPTION>
Swiss Bank Corp., dated 2/27/98,
repurchase price $1,010,571 (U.S.
Treasury Bills: $10,959, 5/28/98-
11/12/98) (U.S. Treasury Bonds:
$12,243, 10.75-15.75%, 11/15/01-
5/15/03) (U.S. Treasury Infl. Index
Notes: $510,501, 3.375-3.625%,
7/15/02-1/15/08) (U.S. Treasury Notes: 200,000
$496,603, 4.75-9.25%, 2/28/98- 200,000 5.48 3/2/98 810,100
10/15/06)............................. 810,100 5.63 3/2/98 ----------
<S> <C> <C> <C> <C>
Total Joint Repurchase Agreement
Account............................... $4,720,100
==========
</TABLE>
20
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FEBRUARY 28, 1998
(UNAUDITED)
6.JOINT REPURCHASE AGREEMENT ACCOUNTS--(CONTINUED)
As of February 28, 1998 the Money Market Portfolio, Government Securities
Portfolio and the Mortgage Securities Portfolio had a 22.15%, 2.07% and 2.24%
undivided interest, respectively, in the repurchase agreements in the following
joint account, which equaled $1,918,500,000 in principal amount. As of February
28, 1998, the repurchase agreements in this joint account, along with the
corresponding underlying securities (including the type of security, market
value, interest rate and maturity date), were as follows ($ in thousands):
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
JOINT ACCOUNT II AMOUNT RATE DATE COST
---------------- --------- -------- -------- ----------
<S> <C> <C> <C> <C>
Bear Stearns Companies, Inc., dated
2/27/98, repurchase price $450,214
(GNMA: $350,046, 6.50-8.00%, 8/15/17-
2/15/28) (FHLMC: $71,342, 6.50-7.00%,
10/1/27-2/1/28) (FNMA: $38,242, 6.00-
7.50%, 3/1/13-12/1/25)................. $450,000 5.70% 3/2/98 $ 450,000
Canadian Imperial Bank of Commerce,
dated 2/27/98, repurchase price
$245,116 (FNMA: $237,739, 6.50-7.50%,
6/1//09-1/1/28)........................ 245,000 5.70 3/2/98 245,000
Canadian Imperial Bank of Commerce,
dated 2/27/98, repurchase price
$100,046 (FHLMC: $52,824, 7.00%,
6/1/24-12/1/27) (FNMA: $49,245, 6.50%,
11/1/27)............................... 100,000 5.56 3/2/98 100,000
Lehman Brothers, dated 2/27/98,
repurchase price $200,093 (FHLMC:
$42,412, 6.50-9.50%, 5/1/06-12/1/22)
(FHLMC Gold: $21,571, 7.25-12.50%,
7/1/00-11/1/16) (FNMA: $139,999, 6.00-
11.00%, 8/1/99-1/1/28)................. 200,000 5.55 3/2/98 200,000
Nationsbank, dated 2/27/98, repurchase
price $200,095 (FNMA: $204,191, 7.50%,
6/1/12)................................ 200,000 5.70 3/2/98 200,000
Nomura Securities Inc., dated 2/27/98,
repurchase price $400,190 (FCSB:
$4,145, 6.46%, 8/27/07) (FHLB: $57,885,
5.61-6.49%, 3/5/98-12/24/07) (FMAC:
$108,243, 7.05-7.12%, 10/3/05-11/13/07)
(FNMA: $209,407, 6.28-7.70%, 7/24/01-
2/12/08) (U.S. Treasury Bond: $821,
8.25%, 5/15/05) (U.S. Treasury Notes:
$27,500, 5.50-7.125%, 8/15/99-5/31/01). 400,000 5.70 3/2/98 400,000
Nomura Securities Inc., dated 2/27/98,
repurchase price $200,095 (FMAC:
$43,291, 5.00-9.00%, 3/15/98-2/1/28)
(FNMA: $160,709, 5.50-11.00%, 12/1/98-
2/1/28)................................ 200,000 5.71 3/2/98 200,000
<CAPTION>
Salomon Brothers, Inc, dated 2/27/98,
repurchase price $123,558 (U.S. 123,500
Treasury Strips: $126,024, 2/15/05).... 123,500 5.66 3/2/98 ----------
<S> <C> <C> <C> <C>
Total Joint Repurchase Agreement
Account................................ $1,918,500
==========
</TABLE>
7.OTHER MATTERS
Pursuant to an SEC exemptive order, the Money Market Portfolio may enter into
certain principal transactions, including repurchase agreements with Goldman
Sachs or its affiliates, subject to certain limitations as follows: 25% of
eligible security transactions, as defined, and 10% of repurchase agreement
transactions on an annual basis.
21
<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>
[GOLDMAN SACHS LOGO]
TCUSEM98
- -----------------------------
TRUST
for Credit Unions
- -----------------------------
TRUSTEES
Robert M. Coen, Chairman
John T. Collins, Vice-Chairman
Gene R. Artemenko
James C. Barr
Edgar F. Callahan
Thomas S. Condit
Douglas Grip
Rudolf J. Hanley
Betty G. Hobbs
Wendell A. Sebastian
OFFICERS
Charles W. Filson
President
James A. Fitzpatrick
Vice President
Gordon Linke
Vice President
Nancy L. Mucker
Vice President
John M. Perlowski
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.
DISTRIBUTORS
Callahan Financial Services, Inc.
Goldman, Sachs & Co.
