<PAGE>
-------------------------------------
TRUST
for Credit Unions
-------------------------------------
Semiannual Report
-------------------------
February 28, 1999
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1999
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C>
Bank Notes (17.8%)
BankBoston, N.A.
$ 5,000 5.76% 03/31/99 $ 5,000
15,000 4.94 04/05/99 15,000
5,000 5.11 04/05/99 5,000
5,000 5.74 04/15/99 5,000
FCC National Bank
5,000 5.65 03/03/99 5,000
10,000 5.04 04/26/99 10,000
15,000 4.86 05/10/99 15,000
Fifth Third Bank
20,000 4.83 03/22/99 20,000
First Union National Bank
20,000 4.83 03/08/99 20,000
15,000 5.12 03/29/99 15,000
15,000 5.06 05/19/99 15,000
Greenwood Trust
35,000 4.84 04/26/99 35,000
Huntington National Bank
10,000 4.98 01/11/00 9,998
Mellon Bank, N.A.
10,000 5.13 05/10/99 10,000
National City Bank
15,000 5.08 02/11/00 14,995
NationsBank, N.A.
20,000 5.11 05/10/99 20,000
10,000 4.92 07/06/99 10,000
15,000 5.00 01/05/00 14,997
PNC Bank, N.A.
10,000 5.71 04/26/99 9,999
15,000 5.04 02/16/00 14,993
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C>
Bank Notes--(Continued)
Wachovia Bank, N.A.
$ 10,000 6.70% 04/14/99 $ 10,020
30,000 5.00 06/02/99 30,000
15,000 4.95 08/16/99 15,000
----------
Total Bank Notes................................ $ 325,002
----------
Certificates of Deposit (16.2%)
American Express Centurion Bank
$ 15,000 4.84% 03/08/99 $ 15,000
25,000 4.84 03/12/99 25,000
20,000 4.85 03/15/99 20,000
Chase Manhattan Bank, N.A.
6,000 4.90 03/18/99 6,000
15,000 4.94 03/29/99 15,000
30,000 5.05 04/05/99 30,000
Crestar Bank
20,000 4.93 04/05/99 20,000
FCC National Bank
25,000 5.71 03/05/99 25,000
First National Bank of Maryland
15,000 4.99 01/25/00 14,996
10,000 5.11 02/23/00 9,997
First Tennessee Bank, N.A.
25,000 4.90 03/15/99 25,000
Morgan Guaranty Trust Co.
20,000 4.93 04/13/99 20,000
10,000 5.14 04/19/99 10,000
Old Kent Bank
10,000 5.14 03/29/99 10,000
35,000 5.06 05/10/99 35,000
Regions Bank
15,000 5.15 02/18/00 15,000
----------
Total Certificates of Deposit................... $ 295,993
----------
</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, 1999
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C>
Euro Certificates of Deposit (0.8%)
Morgan Guaranty Trust London
$ 15,000 5.09% 02/14/00 $ 14,977
----------
Total Euro Certificates of Deposit.............. $ 14,977
----------
Medium Term Notes (0.5%)
Bank of New York
$ 4,000 5.57% 03/17/99 $ 4,000
BankBoston, N.A.
5,000 6.67 04/09/99 5,005
----------
Total Medium Term Notes......................... $ 9,005
----------
Variable Rate Notes(a) (13.2%)
American Express Centurion Bank
$ 10,000 4.91% 03/12/99 $ 10,000
Comerica Bank Detroit
20,000 4.88 03/02/99 19,995
10,000 5.11 03/10/99 9,998
10,000 4.82 03/17/99 9,998
First Tennessee Bank, N.A.
15,000 5.10 03/09/99 14,998
5,000 4.85 04/23/99 5,000
First Union National Bank
5,000 4.84 03/17/99 4,999
15,000 4.99 04/21/99 15,000
First USA Bank
10,000 5.32 04/21/99 10,034
Fleet National Bank
15,000 5.06 03/15/99 14,995
Key Bank National Association
20,000 5.24 03/04/99 20,000
20,000 4.91 03/10/99 20,001
Morgan Guaranty Trust Co.
20,000 4.89 03/29/99 19,995
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C>
Variable Rate Notes(a)--(Continued)
PNC Bank, N.A.
$ 15,000 4.82% 03/01/99 $ 14,996
10,000 4.81 03/29/99 9,997
Southtrust Bank of Alabama, N.A.
5,000 4.85 04/21/99 5,000
US Bank, N.A.
5,000 4.88 03/08/99 4,999
10,000 4.95 03/17/99 10,000
5,000 4.83 03/17/99 4,999
15,000 4.87 03/29/99 14,999
----------
Total Variable Rate Notes..................... $ 240,003
----------
Repurchase Agreements (52.2%)
Chase Securities Repurchase Agreement(b)
$100,000 4.81% 03/15/99 $ 100,000
Joint Account I(c)
201,900 4.77 03/01/99 201,900
Joint Account II(b)
650,000 4.86 03/01/99 650,000
----------
Total Repurchase Agreements $ 951,900
----------
Total Investments............................. $1,836,880(d)
==========
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
(a) Variable rate securities. Coupon rates disclosed are those which are in
effect at February 28, 1999. Maturity date shown is the date of the next
coupon rate reset or actual maturity.
(b) The repurchase agreement is fully collateralized by mortgage-related
securities issued by the U.S. Government.
(c) The repurchase agreement is fully collateralized by U.S. Treasury
obligations and a portion of this security is being segregated as
collateral for the settlement of a security purchase.
(d) The amount stated also represents aggregate cost for federal income tax
purposes.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1999
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations (74.8%)
Adjustable Rate Federal Home Loan Mortgage Corp. (FHLMC)(a) (19.9%)
$ 2,954 7.13% 08/01/17 $ 2,989
900 7.43 04/01/18 922
5,185 6.93 05/01/18 5,285
1,797 7.17 07/01/18 1,833
3,885 8.08 11/01/18 3,980
5,466 7.03 08/01/19 5,548
6,096 7.15 08/01/19 6,188
17,671 7.33 11/01/19 17,910
3,965 7.10 07/01/21 4,040
4,840 7.14 11/01/21 4,924
3,142 7.07 02/01/22 3,201
19,062 7.29 02/01/22 19,387
14,348 7.40 04/01/22 14,709
2,255 6.36 11/01/22 2,250
3,198 6.89 11/01/22 3,231
9,661 7.20 11/01/22 9,850
6,180 7.15 06/01/24 6,314
3,944 8.05 10/01/25 4,012
2,042 6.57 02/01/28 2,079
3,052 6.59 04/01/28 3,087
3,683 5.94 06/01/29 3,694
1,806 6.42 07/01/29 1,840
9,249 6.13 01/01/30 9,275
4,658 7.01 05/01/31 4,712
--------
Total Adjustable Rate FHLMC....................... $141,260
--------
Adjustable Rate Federal National Mortgage Association (FNMA)(a) (34.0%)
$ 2,620 7.18% 10/01/13 $ 2,669
2,426 6.43 03/01/17 2,437
1,414 7.27 11/01/17 1,472
10,260 6.74 12/01/17 10,484
1,317 6.85 04/01/18 1,342
</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)
$ 992 6.75% 06/01/18 $ 1,004
3,297 7.05 08/01/18 3,385
5,561 7.00 09/01/18 5,673
2,796 7.09 09/01/18 2,833
959 7.06 11/01/18 978
1,616 6.81 05/01/19 1,646
15,371 6.73 06/01/19 15,731
1,576 6.88 07/01/19 1,609
5,204 7.01 12/01/19 5,213
2,659 7.18 03/01/20 2,695
1,074 7.09 05/01/20 1,091
14,427 7.55 05/01/20 14,745
4,927 7.08 12/01/20 5,020
8,909 6.08 12/25/20 8,861
18,546 7.22 01/01/21 19,038
11,155 6.86 04/01/21 11,366
29,818 7.15 09/01/21 30,475
1,369 6.93 10/01/21 1,396
2,902 7.37 11/01/21 2,991
1,479 7.22 02/01/22 1,510
4,452 7.16 05/01/22 4,505
22,854 7.21 09/01/22 23,397
2,904 8.23 01/01/23 2,974
12,160 7.12 09/01/25 12,461
3,550 6.75 10/01/25 3,603
6,305 6.01 11/01/26 6,323
3,291 7.03 07/01/27 3,355
2,327 6.82 10/01/27 2,368
14,347 5.89 07/01/28 14,469
11,525 6.02 02/01/31 11,557
--------
Total Adjustable Rate FNMA........................ $240,676
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
February 28, 1999
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Adjustable Rate Government National Mortgage Association (GNMA)(a) (9.9%)
$ 876 6.63% 09/20/21 $ 891
8,542 6.88 04/20/22 8,674
9,362 6.88 04/20/22 9,531
4,143 6.63 09/20/22 4,209
5,702 6.88 02/20/23 5,797
2,663 6.88 03/20/23 2,707
10,475 6.88 04/20/23 10,658
5,790 6.63 07/20/23 5,886
5,064 6.63 07/20/23 5,159
3,645 6.63 09/20/23 3,698
4,941 6.63 09/20/25 4,978
3,277 6.50 09/20/27 3,331
4,567 5.50 05/20/28 4,605
--------
Total Adjustable Rate GNMA........................ $ 70,124
--------
Fixed Rate FHLMC Gold (2.8%)
$ 4,584 7.00% 01/01/00 $ 4,598
4,052 7.00 02/01/00 4,057
10,541 8.00 01/01/28 10,973
--------
Total Fixed Rate FHLMC Gold....................... $ 19,628
--------
Fixed Rate FNMA (3.1%)
$ 9,528 7.00% 10/01/02 $ 9,610
4,533 7.00 03/01/04 4,571
53 7.00 04/01/04 54
919 7.00 04/01/04 925
7,062 6.00 06/01/04 7,012
--------
Total Fixed Rate FNMA............................. $ 22,172
--------
Fixed Rate GNMA (0.7%)
$ 4,774 9.00% 12/15/17 $ 5,117
--------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Collateralized Mortgage Obligations (CMOs) (3.6%)
Regular Floater CMOs(a) (3.3%)
FHG Series 16, Class FC
$ 2,750 6.10% 08/25/23 $ 2,756
FHLMC REMIC Trust Series 1009, Class D
1,383 5.54 10/15/20 1,385
FHLMC REMIC Trust Series 1698, Class FA
2,966 5.74 03/15/09 2,977
FHLMC Series 1555, Class FA
2,877 6.14 08/15/08 2,905
FNMA Series 1992-137, Class F
10,000 5.97 08/25/22 10,172
FNMA Series 1997-70, Class FA
2,900 5.42 07/18/20 2,908
--------
Total Regular Floater CMOs........................ $ 23,103
--------
Sequential Fixed Rate CMOs (0.3%)
FNMA REMIC Trust Series 1990-24, Class E
$ 1,426 9.00% 03/25/20 $ 1,470
FNMA Series 1993-47, Class A
765 6.65 03/25/05 762
--------
Total Sequential Fixed Rate CMOs.................. $ 2,232
--------
Total CMOs........................................ $ 25,335
--------
Planned Amortization Class-- Principal Only(b) (0.8%)
FNMA Series 1993-241, Class PE
$ 5,475 6.50% 10/25/23 $ 5,333
--------
Total Mortgage Backed Obligations (cost $534,999)... $529,645
--------
Agency Debentures (3.0%)
Federal Home Loan Mortgage Corp.
$ 7,400 5.00% 02/15/01 $ 7,349
</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, 1999
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Agency Debentures--(Continued)
Federal National Mortgage Association
$ 4,000 5.44% 01/29/01 $ 4,001
Sri Lanka Aid(a)
10,000 5.30 11/01/24 10,000
--------
Total Agency Debentures
(cost $21,403)..................................... $ 21,350
--------
U.S. Treasury Obligations (18.0%)
United States Treasury Notes
$75,100 5.63% 11/30/00 $ 75,651
39,500 6.63 07/31/01 40,747
United States Treasury Principal Only Stripped Securities(b)
6,000 5.43 11/15/04 4,417
9,300 5.49 05/15/05 6,643
--------
Total U.S. Treasury Obligations
(cost $129,255).................................... $127,458
--------
Repurchase Agreement (3.4%)
Joint Account II(c)
$24,400 4.86% 03/01/99 $ 24,400
--------
Total Repurchase Agreement
(cost $24,400)..................................... $ 24,400
--------
Total Investments
(cost $710,057(d))................................. $702,853
========
</TABLE>
<TABLE>
- -----------------------
<S> <C> <C> <C>
Federal Income
Tax
Information:
Gross
unrealized
gain for
investments
in which
value
exceeds
cost........ $ 443
Gross
unrealized
loss for
investments
in which
cost exceeds
value....... (7,778)
-------
Net
unrealized
loss........ $(7,335)
=======
- -----------------------
</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, 1999.
(b) The interest rates disclosed for these securities represent effective
yields to maturity.
(c) The repurchase agreement is fully collateralized by mortgage-related
securities issued by the U.S. Government.
(d) The aggregate cost for federal income tax purposes is $710,188.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
February 28, 1999
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations (72.8%)
Adjustable Rate Federal National Mortgage Association (FNMA)(a) (2.1%)
$ 9,644 7.16% 01/01/21 $ 9,900
--------
Fixed Rate Federal Home Loan Mortgage Corp.(FHLMC) Gold (4.7%)
$ 1,905 6.50% 04/01/13 $ 1,918
1,094 6.50 04/01/13 1,102
1,931 6.50 04/01/13 1,944
1,915 6.50 05/01/13 1,928
883 6.50 05/01/13 889
975 6.50 06/01/13 982
979 6.50 07/01/13 985
3,901 6.50 07/01/13 3,928
1,458 6.50 07/01/13 1,468
2,689 6.50 07/01/13 2,708
3,092 8.50 05/01/28 3,254
1,141 8.50 05/01/28 1,201
--------
Total Fixed Rate FHLMC Gold....................... $ 22,307
--------
Fixed Rate FNMA (1.2%)
$ 1,795 6.00% 09/01/07 $ 1,788
992 6.00 10/01/08 985
2,150 6.00 06/01/09 2,135
879 6.00 11/01/09 873
--------
Total Fixed Rate FNMA............................. $ 5,781
--------
Fixed Rate Government National Mortgage Association (GNMA) (2.9%)
$ 13 8.50% 07/15/09 $ 14
15 8.50 07/15/09 16
19 8.50 09/15/09 19
16 8.50 12/15/09 16
238 8.50 01/15/10 249
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Fixed Rate Government National Mortgage Association (GNMA)--(Continued)
$ 317 8.50% 01/15/10 $ 332
369 8.50 01/15/10 386
238 8.50 02/15/10 249
262 8.50 02/15/10 274
183 8.50 02/15/10 192
225 8.50 02/15/10 236
73 8.50 02/15/10 77
51 8.50 03/15/10 53
609 8.50 03/15/10 637
281 8.50 04/15/10 295
40 8.50 04/15/10 42
118 8.50 05/15/10 123
15 8.50 05/15/10 16
152 8.50 05/15/10 159
335 8.50 06/15/10 351
512 8.50 06/15/10 537
147 8.50 06/15/10 154
280 8.50 06/15/10 293
199 8.50 07/15/10 208
217 8.50 08/15/10 227
238 8.50 10/15/10 249
935 8.50 11/15/10 981
595 8.50 12/15/10 623
585 8.50 12/15/10 613
784 8.50 09/15/11 817
610 8.50 10/15/11 636
779 8.50 03/15/12 818
709 8.50 07/15/12 739
3,183 9.00 12/15/17 3,412
--------
Total Fixed Rate GNMA............................. $ 14,043
--------
</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, 1999
(Unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Collateralized Mortgage Obligations (CMO) (61.9%)
Adjustable Rate CMOs(a) (10.8%)
Chase Mortgage Finance Corp. Series 1995-A, Class A
$ 8,274 6.21% 04/25/25 $ 8,266
Citicorp Mortgage Securities, Inc. Series 1992-17, Class A
3,570 7.00 09/25/22 3,586
CMC Securities Corp. II Series 1993-2I, Class A2
1,393 6.82 09/15/23 1,379
Imperial Savings Association Series 1988-3, Class A
1,135 6.79 01/25/18 1,132
Independent National Mortgage Corp. Series 1994-W, Class A1
797 7.78 12/25/24 798
Merrill Lynch Mortgage Investors, Inc. Series 1994-I, Class A1
2,139 7.53 01/25/05 2,145
Prudential Home Mortgage Series 1992-8, Class A1
355 7.39 04/25/22 354
Resolution Trust Corp. Series 1992-04, Class B2
4,500 7.01 07/25/28 4,498
Resolution Trust Corp. Series 1992-11, Class B2
10,201 7.01 10/25/24 10,172
Resolution Trust Corp. Series 1994-1, Class M3
4,141 7.58 09/25/29 4,157
Resolution Trust Corp. Series 1995-1, Class A3
6,432 6.90 10/25/28 6,476
Resolution Trust Corp. Series 1995-1, Class M3
2,159 6.90 10/25/28 2,160
Ryland Mortgage Securities Corp. Series 1989-FN1, Class A
421 7.38 11/01/18 420
Ryland Mortgage Securities Corp. Series 1991-B1, Class 1
697 7.15 03/25/20 696
</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. Series 1992-3, Class A2
$ 170 7.01% 06/25/20 $ 170
Salomon Brothers Mortgage Securities Series 1990-3A, Class 1
696 6.25 11/25/20 693
Salomon Brothers Mortgage Securities Series 1994-20, Class A
2,527 7.99 08/01/24 2,555
Saxon Mortgage Securities Corp. Series 1994-11, Class A
1,722 8.36 12/25/24 1,733
--------
Total Adjustable Rate CMOs........................ $ 51,390
--------
Planned Amortization Class (PAC) CMOs (38.8%)
Chase Mortgage Finance Corp. Series 1994-G, Class A7
$10,152 7.00% 04/25/25 $ 10,191
Chemical Mortgage Securities, Inc. Series 1994-1, Class A1
3,149 6.25 01/25/09 3,109
CMC Securities Corp. IV Series 1997-2, Class IA13
1,238 6.60 11/25/27 1,235
Countrywide Funding Corp. Series 1993-9, Class A3
3,000 6.50 01/25/09 3,002
Countrywide Funding Corp. Series 1993-11, Class A9
10,750 6.25 02/25/09 10,454
Countrywide Funding Corp. Series 1994-13, Class A4
10,097 6.50 06/25/09 10,110
Countrywide Home Loans Series 1998-11, Class A10
12,492 6.25 08/25/28 12,431
Countrywide Mortgage Backed Securities, Inc. Series 1994-I, Class A4
2,179 6.25 07/25/09 2,171
FHLMC Series 15, Class H
5,000 6.50 06/25/19 5,034
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
February 28, 1999
(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)
FHLMC Series 1556, Class G
$ 5,000 6.35% 10/15/10 $ 5,030
FHLMC Series 1985, Class PC
18,000 6.35 05/17/18 18,096
FHLMC Series 1987, Class L
10,000 6.20 08/25/22 9,695
FHLMC Series 2055, Class OD
15,000 6.00 12/15/07 14,714
FNMA REMIC Trust Series 1997-84, Class PA
14,000 5.90 11/25/21 13,680
FNMA REMIC Trust Series 1997-84, Class PB
7,000 5.50 01/25/08 6,711
GE Capital Mortgage Services, Inc. Series 1994-07, Class A6
844 5.50 02/25/09 831
GE Capital Mortgage Services, Inc. Series 1994-13, Class A1
1,231 6.50 04/25/24 1,231
GE Capital Mortgage Services, Inc. Series 1994-15, Class A8
4,604 6.00 04/25/09 4,580
GE Capital Mortgage Services, Inc. Series 1997-8, Class A13
13,722 7.25 10/25/27 13,797
Housing Securities, Inc. Series 1993-E, Class E8
2,289 10.00 02/25/08 2,347
Norwest Asset Securities Corp. Series 1998-17, Class A2
16,182 6.25 08/25/28 16,185
Paine Webber Mortgage Acceptance Corp. Series 1993-6, Class A3
4,727 6.90 08/25/08 4,747
PNC Mortgage Securities Corp. Series 1998-2, Class 5A2
4,752 6.63 03/25/28 4,766
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Planned Amortization Class (PAC) CMOs--(Continued)
Prudential Home Mortgage Securities Series 1993-54, Class A4
$ 3,514 6.50% 01/25/24 $ 3,520
Residential Funding Mortgage Securities I Series 1993-S32, Class A3
7,000 6.50 09/25/08 7,004
--------
Total PAC CMOs.................................... $184,671
--------
Regular Floater CMOs(a) (2.1%)
CMC Securities Corp. III Series 1994-A, Class A17
$ 4,867 6.09% 02/25/24 $ 4,950
Countrywide Funding Corp. Series 1993-10, Class A9
4,931 5.97 01/25/24 4,968
--------
Total Regular Floater CMOs........................ $ 9,918
--------
Sequential Fixed Rate CMOs (8.1%)
Bear Stearns Secured Investors Trust Series 1987-2, Class D
$ 1,296 9.95% 10/20/18 $ 1,320
CMC Securities Corp. Series 1993-C, Class C3
1,827 9.55 04/25/08 1,856
Collateralized Mortgage Obligation Trust Series 64, Class Z
8,093 9.00 11/20/20 8,322
FHLMC Series 1293, Class Z
2,499 7.50 07/15/99 2,498
FNMA REMIC Trust Series 1988-12, Class A
2,318 10.00 02/25/18 2,495
Norwest Asset Securities Corp. Series 1997-5, Class A5
7,844 7.00 04/25/12 7,869
Residential Asset Securitization Trust Series 1997-A3, Class A5
1,443 7.75 05/25/27 1,462
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
February 28, 1999
(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)
Salomon Brothers Mortgage Securities Series 1984-2, Class Z
$ 4,661 10.00% 12/01/14 $ 4,742
Structured Asset Securities Corp. Series 1995-3A, Class 1A1
8,000 7.00 01/28/24 8,060
------------
Total Sequential Fixed Rate CMOs................. $ 38,624
------------
Support CMO (1.1%)
Countrywide Mortgage Backed Securities, Inc. Series 1993-A, Class A9
$ 5,379 6.50% 10/25/08 $ 5,367
------------
Targeted Amortization Class (TAC) CMOs (1.0%)
Paine Webber Mortgage Acceptance Corp. Series 1994-6, Class A7
$ 5,000 6.00% 04/25/09 $ 4,890
------------
Total CMOs....................................... $ 294,860
------------
Total Mortgage Backed Obligations (cost
$349,432)....................................... $ 346,891
------------
U.S. Treasury Obligations (21.5%)
United States Treasury Notes
$ 5,000 5.63% 11/30/00 $ 5,037
35,600 6.63 07/31/01 36,723
10,200 5.75 10/31/02 10,351
United States Treasury Principal Only Stripped Securities(b)
48,500 5.43 11/15/04 35,703
20,500 5.49 05/15/05 14,643
------------
Total U.S. Treasury Obligations (cost $105,440).. $ 102,457
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
- --------- -------- -------- -----
<S> <C> <C> <C>
Repurchase Agreement (5.5%)
Joint Account II(c)
$26,200 4.86% 03/01/99 $ 26,200
--------
Total Repurchase Agreement (cost $26,200)......... $ 26,200
--------
Total Investments (cost $481,072(d)).............. $475,548
========
</TABLE>
<TABLE>
- --------------------------------
<S> <C> <C> <C>
Federal Income Tax
Information:
Gross unrealized gain
for
investments in which
value exceeds cost... $ 928
Gross unrealized loss
for investments in
which cost exceeds
value................ (6,680)
-------
Net unrealized loss... $(5,752)
=======
- --------------------------------
</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, 1999.
(b) The interest rates disclosed for these securities represent effective
yields to maturity.
(c) The repurchase agreement is fully collateralized by mortgage-related
securities issued by the U.S. Government.
(d) The aggregate cost for federal income tax purposes is $481,300.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF ASSETS AND LIABILITIES
February 28, 1999
(Unaudited)
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
-------------- ------------ ------------
<S> <C> <C> <C>
ASSETS
Investment in securities, at value
(identified cost $1,836,880,413,
$710,056,939, $481,072,126,
respectively)...................... $1,836,880,413 $702,853,003 $475,547,972
Cash................................ -- 29,032 54,303
Receivables:
Investment securities sold......... -- 9,365,907 --
Interest........................... 9,842,519 5,165,363 2,614,537
Other assets........................ 14,380 5,959 3,454
-------------- ------------ ------------
Total assets.................... 1,846,737,312 717,419,264 478,220,266
-------------- ------------ ------------
LIABILITIES
Payables:
Investment securities purchased.... 15,013,492 6,225,438 20,586
Dividends.......................... 6,338,659 2,382,543 1,671,401
Advisory fees...................... 91,940 108,686 71,690
Administration fees................ 26,269 54,345 17,923
Accrued expenses and other
liabilities........................ 254,626 46,686 40,236
-------------- ------------ ------------
Total liabilities............... 21,724,986 8,817,698 1,821,836
-------------- ------------ ------------
NET ASSETS
Paid-in capital..................... 1,825,012,326 735,996,948 489,942,696
Accumulated distributions in excess
of net investment income........... -- (1,563,512) (905,169)
Accumulated net realized loss on
investment transactions............ -- (18,627,934) (7,114,943)
Net unrealized loss on investments.. -- (7,203,936) (5,524,154)
-------------- ------------ ------------
Net assets...................... $1,825,012,326 $708,601,566 $476,398,430
============== ============ ============
Net asset value & public offering
price per unit (net assets/units
outstanding)....................... $ 1.00 $ 9.69 $ 9.70
============== ============ ============
UNITS OUTSTANDING
Total units outstanding, $0.001 par
value (unlimited number of units
authorized)........................ 1,825,012,326 73,154,083 49,115,279
============== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF OPERATIONS
For the Six Months Ended February 28, 1999
(Unaudited)
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Investment Income:
Interest Income.................... $34,580,121 $20,144,026 $13,522,441
----------- ----------- -----------
Expenses:
Advisory fees...................... 1,076,056 676,947 443,556
Administration fees................ 667,783 338,474 110,889
Custodian fees..................... 72,243 51,839 50,543
Professional fees.................. 46,982 31,020 26,671
Trustees' fees..................... 19,439 8,679 6,596
Other expenses..................... 153,702 10,290 14,843
----------- ----------- -----------
Total expenses..................... 2,036,205 1,117,249 653,098
Less--Fee waivers .................. (1,151,110) -- --
----------- ----------- -----------
Net expenses....................... 885,095 1,117,249 653,098
----------- ----------- -----------
Net investment income............... 33,695,026 19,026,777 12,869,343
Net realized gain (loss) on
investment transactions............ -- (440,495) 502,551
Net change in unrealized loss on
investments........................ -- (6,274,246) (9,627,308)
----------- ----------- -----------
Net increase in net assets resulting
from operations.................... $33,695,026 $12,312,036 $ 3,744,586
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended February 28, 1999
(Unaudited)
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
--------------- ------------ ------------
<S> <C> <C> <C>
From operations:
Net investment income........... $ 33,695,026 $ 19,026,777 $ 12,869,343
Net realized gain (loss) from
investment transactions........ -- (440,495) 502,551
Net change in unrealized loss on
investments.................... -- (6,274,246) (9,627,308)
--------------- ------------ ------------
Net increase in net assets
resulting from operations...... 33,695,026 12,312,036 3,744,586
--------------- ------------ ------------
Distributions to Unitholders:
From net investment income...... (33,695,026) (19,026,777) (12,869,343)
In excess of net investment
income......................... -- (220,360) (296,452)
--------------- ------------ ------------
Total distribution to
Unitholders.................... (33,695,026) (19,247,137) (13,165,795)
--------------- ------------ ------------
From Unit Transactions:
Proceeds from sales of units.... 5,641,641,255 80,837,246 102,600,000
Reinvestment of dividends and
distributions.................. 15,737,080 4,360,379 2,695,829
Cost of units repurchased....... (4,805,222,785) (24,313,500) (62,025,986)
--------------- ------------ ------------
Net increase in net assets
resulting from unit
transactions................... 852,155,550 60,884,125 43,269,843
--------------- ------------ ------------
Total increase.................. 852,155,550 53,949,024 33,848,634
Net assets:
Beginning of period............. 972,856,776 654,652,542 442,549,796
--------------- ------------ ------------
End of period................... $ 1,825,012,326 $708,601,566 $476,398,430
=============== ============ ============
Accumulated distributions in
excess of net investment income. $ -- $ (1,563,512) $ (905,169)
=============== ============ ============
Summary of Unit Transactions:
Units sold...................... 5,641,641,255 8,306,808 10,397,647
Reinvestment of dividends and
distributions.................. 15,737,080 448,273 273,947
Units repurchased............... (4,805,222,785) (2,494,978) (6,261,172)
--------------- ------------ ------------
Increase in units outstanding... 852,155,550 6,260,103 4,410,422
=============== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended August 31, 1998
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
--------------- ------------ ------------
<S> <C> <C> <C>
From Operations:
Net investment income........... $ 43,957,960 $ 34,453,785 $ 25,109,722
Net realized gain from
investment transactions........ -- 276,048 2,639,413
Net change in unrealized gain
(loss) on investments.......... -- (2,665,524) 2,780,412
--------------- ------------ ------------
Net increase in net assets
resulting from operations...... 43,957,960 32,064,309 30,529,547
--------------- ------------ ------------
Distributions to Unitholders:
From net investment income...... (43,957,960) (34,453,785) (24,417,759)
In excess of net investment
income......................... -- (762,530) --
--------------- ------------ ------------
Total distributions to
Unitholders.................... (43,957,960) (35,216,315) (24,417,759)
--------------- ------------ ------------
From Unit Transactions:
Proceeds from sales of units.... 7,453,527,751 286,851,659 123,443,287
Reinvestment of dividends and
distributions.................. 20,341,734 8,074,557 5,950,306
Cost of units repurchased....... (6,942,217,385) (201,763,429) (43,270,804)
--------------- ------------ ------------
Net increase in net assets re-
sulting from unit transactions. 531,652,100 93,162,787 86,122,789
--------------- ------------ ------------
Total Increase.................. 531,652,100 90,010,781 92,234,577
Net Assets:
Beginning of year............... 441,204,676 564,641,761 350,315,219
--------------- ------------ ------------
End of year..................... $ 972,856,776 $654,652,542 $442,549,796
=============== ============ ============
Accumulated distributions in ex-
cess of net investment income... $ -- $ (1,343,152) $ (608,717)
=============== ============ ============
Summary of Unit Transactions:
Units sold...................... 7,453,527,751 29,195,793 12,565,758
Reinvestment of dividends and
distributions.................. 20,341,734 822,455 605,881
Units repurchased............... (6,942,217,385) (20,521,732) (4,391,995)
--------------- ------------ ------------
Increase in units outstanding... 531,652,100 9,496,516 8,779,644
=============== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<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(b) 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 income income ments period return(a) assets assets
-------- ------------ ------------ -------- -------- -------- ------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/99......... $1.00 $0.0252 $ -- $(0.0252) $ -- $ -- $1.00 5.08%(c) 0.13%(c) 5.05%(c)
Year ended:8/31/98.. 1.00 0.0552 -- (0.0552) -- -- 1.00 5.67 0.11 5.52
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
<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):
2/28/99......... $1,825,012 0.31%(c) 4.87%(c)
Year ended:8/31/98.. 972,857 0.30 5.33
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
</TABLE>
(a) 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.
(b) Calculated based on average shares outstanding methodology.
(c) Annualized.
The accompanying notes are an integral part of these financial statements.
14
<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
value at Net unrealized net of net value to to
begin- invest- gain (loss) invest- invest- at average average
ning of ment on invest- ment ment end of Total net net
period income ments(a) income income period return(b) assets assets
-------- ---------- ------------ -------- -------- ------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended
(unaudited):
2/28/99......... $9.79 $0.2732 $ (0.0987) $(0.2732) $(0.0013) $9.69 1.80% 0.33%(d) 5.62%(d)
Year ended:
8/31/98. 9.84 0.5764 (0.0400) (0.5764) (0.0100) 9.79 5.60 0.34 5.83
8/31/97......... 9.76 0.5911 0.0829 (0.5911) (0.0029) 9.84 7.09 0.34 6.02
8/31/96......... 9.76 0.6024 (0.0055) (0.5969) -- 9.76 6.26 0.35 6.16
8/31/95......... 9.78 0.5515 (0.0011) (0.5582) (0.0122) 9.76 5.82 0.34 5.65
8/31/94......... 9.97 0.4286 (0.1974) (0.4212) -- 9.78 2.33 0.35 4.25
<CAPTION>
Ratio information
assuming no waiver
of fees or expense
reimbursements
----------------------
Ratio of
net
Net Ratio of investment
Port- assets expenses income
folio at end to to
turn- of average average
over period net net
rate(c) (000's) assets assets
-------- -------- ---------- -----------
<S> <C> <C> <C> <C>
Six months ended
(unaudited):
2/28/99......... 37.04% $708,602 0.33%(d) 5.62%(d)
Year ended:
8/31/98. 93.77 654,653 0.34 5.83
8/31/97......... 88.02 564,642 0.34 6.02
8/31/96......... 149.66 535,702 0.35 6.16
8/31/95......... 70.58 529,659 0.34 5.65
8/31/94......... 42.27 594,331 0.37 4.23
</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) Annualized.
The accompanying notes are an integral part of these financial statements.
15
<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
Net realized In excess Net
asset and From excess of net asset
value at Net unrealized net of net realized value
begin- invest- gain (loss) invest- invest- gain on From at
ning of ment on invest- ment ment invest- paid-in end of Total
period income ments(a) income income ments capital period return(b)
-------- ---------- ------------ -------- -------- -------- -------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/99......... $9.90 $ 0.2851 $ (0.1952) $(0.2851) $(0.0048) $ -- $ -- $9.70 0.90%
Year ended:
8/31/98. 9.75 0.6395 0.1272 (0.6167) -- -- -- 9.90 8.10
8/31/97......... 9.65 0.6399 0.1011 (0.6399) (0.0011) -- -- 9.75 7.89
8/31/96......... 9.74 0.6604 (0.1195) (0.6309) -- -- -- 9.65 5.67
8/31/95......... 9.62 0.6075 0.1539 (0.6075) (0.0175) -- (0.0164) 9.74 8.20
8/31/94......... 10.13 0.5533 (0.4530) (0.5719) (0.0340) (0.0044) -- 9.62 1.00
<CAPTION>
Ratio information
assuming no waiver
of fees
----------------------
Ratio of
net Ratio of
Ratio of invest- net
net ment Net Ratio of investment
expenses income Port- assets expenses income
to to folio at end to to
average average turn- of average average
net net over period net net
assets assets rate(c) (000's) assets assets
---------- ---------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Six months ended (unaudited):
2/28/99......... 0.29%(d) 5.80%(d) 54.17% $476,398 0.29%(d) 5.80%(d)
Year ended:
8/31/98. 0.30 6.44 108.76 442,550 0.30 6.44
8/31/97......... 0.30 6.57 106.10 350,315 0.30 6.57
8/31/96......... 0.28 6.64 163.42 332,546 0.30 6.62
8/31/95......... 0.26 6.36 130.98 264,409 0.32 6.30
8/31/94......... 0.28 5.66 188.58 283,886 0.29 5.65
</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) Annualized.
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS
February 28, 1999
(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. 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
17
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1999
(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 Portfolios 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 segregate and
maintain cash or liquid debt securities in an amount equal to the forward
purchase price 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... $19,235,536 1999 - 2005
Mortgage Securities..... 7,389,230 2002 - 2004
</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.
18
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1999
(Unaudited)
2.Summary of Significant Accounting Policies--(Continued)
E.Expenses
Expenses incurred by the Fund that do not specifically relate to an
individual portfolio of the Fund are generally 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 October 1, 1998, Goldman Sachs voluntarily agreed to limit its
advisory fee with respect to the Money Market Portfolio to .07% of average
daily net assets. From July 1, 1997 to September 30, 1998, 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. This voluntary limitation
may be modified or eliminated by Goldman Sachs in the future at its discretion.
For the six months ended February 28, 1999, Goldman Sachs waived advisory fees
amounting to $616,884.
19
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1999
(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 40
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, 1999, CUFSLP waived administration fees amounting to
$534,226.
CUFSLP has agreed that to the extent the total annualized expenses (excluding
interest, taxes, brokerage and extraordinary expenses) (the "Expenses") of the
Money Market Portfolio exceed .20% of the average daily net assets of the Money
Market Portfolio, CUFSLP will either reduce the administration fees otherwise
payable or pay such Expenses of the Money Market Portfolio. For the six months
ended February 28, 1999, no expenses were required to be reimbursed by CUFSLP
under this agreement.
CUFSLP and Goldman Sachs have each voluntarily agreed to limit the other
annualized ordinary expenses (excluding advisory, administration, interest,
taxes, brokerage and extraordinary expenses) of the Government Securities
Portfolio such that CUFSLP will reimburse expenses that exceed .05% up to .10%
of the Government Securities Portfolio's average daily net assets, and Goldman
Sachs will reimburse expenses that exceed .10% up to .15% of the Government
Securities Portfolio's average daily net assets. For the six months ended
February 28, 1999, no expenses were required to be reimbursed by CUFSLP and
Goldman Sachs under this agreement.
20
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1999
(Unaudited)
3.Agreements--(Continued)
Callahan Financial Services, Inc. and Goldman Sachs serve as exclusive
distributors of units of the Fund. For the six months ended February 28, 1999,
neither received any compensation for this service. Goldman Sachs also serves
as Transfer Agent of the Fund for a fee.
4.Investment Transactions
Purchases and proceeds of sales or maturities of long-term securities for the
Government Securities Portfolio and Mortgage Securities Portfolio for the six
months ended February 28, 1999 were as follows ($ in thousands):
<TABLE>
<CAPTION>
Government Mortgage
Securities Securities
Portfolio Portfolio
---------- ----------
<S> <C> <C>
Purchases of U.S. Government and agency obligations...... $419,134 $234,945
Purchases (excluding U.S. Government and agency obliga-
tions).................................................. -- 51,848
Sales or maturities of U.S. Government and agency obliga-
tions................................................... 319,272 232,638
Sales or maturities (excluding U.S. Government and agency
obligations)............................................ -- 36,964
</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.
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.
21
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
February 28, 1999
(Unaudited)
6.Joint Repurchase Agreement Accounts--(Continued)
As of February 28, 1999, the Money Market Portfolio had a 3.79% undivided
interest in the repurchase agreements in Joint Account I, which equaled
$5,324,400,000 in principal amount. As of February 28, 1999, the repurchase
agreements in this joint account were fully collateralized by U.S. Treasury
obligations.
<TABLE>
<CAPTION>
Principal Amortized
Amount Interest Maturity Cost
Joint Account I ($ in thousands) Rate Date ($ in thousands)
- --------------- ---------------- -------- -------- ----------------
<S> <C> <C> <C> <C>
Bear Stearns Companies,
Inc....................... $ 700,000 4.79% 3/1/99 $ 700,000
Credit Suisse First Boston
Corp...................... 1,000,000 4.77 3/1/99 1,000,000
Donaldson Lufkin &
Jenrette, Inc............. 1,180,000 4.77 3/1/99 1,180,000
Lehman Brothers, Inc....... 100,000 4.80 3/1/99 100,000
Salomon-Smith Barney, Inc.. 1,500,000 4.77 3/1/99 1,500,000
Warburg Dillon Read........ 844,400 4.76 3/1/99 844,400
----------
Total Joint Repurchase
Agreement Account I...... $5,324,400
==========
</TABLE>
As of February 28, 1999, the Money Market Portfolio, Government Securities
Portfolio and the Mortgage Securities Portfolio had a 17.20%, 0.65% and 0.69%
undivided interest, respectively, in the repurchase agreements in Joint Account
II, which equaled $3,778,900,000 in principal amount. As of February 28, 1999,
the repurchase agreements in this joint account were fully collateralized by
mortgage-related securities issued by the U.S. Government, its agencies or
instrumentalities.
<TABLE>
<CAPTION>
Principal Amortized
Amount Interest Maturity Cost
Joint Account II ($ in thousands) Rate Date ($ in thousands)
- ---------------- ---------------- -------- -------- ----------------
<S> <C> <C> <C> <C>
ABN........................ $1,000,000 4.86% 3/1/99 $1,000,000
Bear Stearns Companies,
Inc....................... 200,000 4.85 3/1/99 200,000
Bear Stearns Companies,
Inc....................... 400,000 4.86 3/1/99 400,000
Deutsche Bank.............. 700,000 4.86 3/1/99 700,000
Donaldson Lufkin &
Jenrette, Inc............. 300,000 4.85 3/1/99 300,000
NationsBank, N.A. ......... 800,000 4.86 3/1/99 800,000
Salomon-Smith Barney, Inc.. 378,900 4.86 3/1/99 378,900
----------
Total Joint Repurchase
Agreement Account II..... $3,778,900
==========
</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.
22
<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>
[LOGO]
Goldman
Sachs
TCUSEM99
- -----------------------------
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 C. Grip
Betty G. Hobbs
Wendell A. Sebastian
Officers
Judy Sandberg, President
Jesse Cole, Vice President
Charles W. Filson, Vice President
James A. Fitzpatrick, Vice President
Gordon F. Linke, Vice President
Anne Marcel, Vice President
Nancy L. Mucker, Vice President
John M. Perlowski, Treasurer
Philip V. Giuca, Assistant Treasurer
Michael J. Richman, Secretary
Elizabeth Anderson, Assistant Secretary
Howard B. Surloff, Assistant Secretary
Kaysie Uniacke, 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.
Independent Auditors
Arthur Andersen
225 Franklin Street
Boston, MA 02110
