<PAGE>
[LOGO OF TRUST FOR CREDIT UNIONS]
Annual Report
------------------------
August 31, 2000
<PAGE>
Dear TCU Investor:
We want to thank you for your support of the Trust for Credit Unions (TCU).
We are pleased to report that the TCU Portfolios performed well during the 12-
month period under review, with each TCU Portfolio outperforming its
respective benchmark. In addition, TCU has utilized its credit union industry
expertise to assist credit unions in several new ways.
During the past twelve months, credit unions have placed an increased focus
on liquidity. This started in September, 1999 with credit unions focused on
building liquidity in preparation for Y2K. However, this focus has continued
this year, as credit unions' loan demand outpaced share growth.
TCU responded by assisting credit unions in several important ways:
. Increased Investor Communication. In late 1999, TCU held monthly
conference calls with investors to increase communication between credit
unions and the TCU Portfolio managers. This program was so successful
that we have elected to continue these conference calls on a bi-monthly
basis to share information between credit union investors and our TCU
Portfolio managers. TCU has also increased the amount of information
about the TCU Portfolios available to investors on-line through our
website www.trustcu.com.
. Increased Pledging Options. TCU worked with a variety of organizations
that lend to credit unions to obtain the approval of the TCU Portfolios
as a source of collateral. As a result, the Federal Reserve
Bank, the Federal Home Loan Bank of San Francisco and several corporate
credit unions have accepted TCU Portfolios as a source of collateral to
support credit union borrowing needs. Credit unions continue to utilize
this new option to pledge their TCU Portfolios to support borrowings.
. TCU Provides Input to NCUA Prompt Corrective Action. Another important
issue facing credit unions in 2000 related to a proposal by the National
Credit Union Association (NCUA) to establish the definition of a
"complex" credit union under the new system of Prompt Corrective Action.
TCU provided comments and worked with NCUA staff to ensure that the final
rule would reflect the unique aspects of mutual funds. As proposed, the
rule would have required credit unions to categorize all mutual funds,
except money market funds, as long-term investments. As a result of the
comments, the final rule permits a credit union to categorize mutual fund
holdings based upon the duration specified in the prospectus.
Thank you again for selecting the Trust for Credit Unions. We look forward
to serving your credit union's investment needs for many years to come.
Sincerely,
/s/ Judith E. Sandberg /s/ Dan Dumont
Judith E. Sandberg
President Dan Dumont
Callahan Financial Services, Inc. Vice President
And Trust for Credit Unions Goldman Sachs Assets Management
October 20, 2000
<PAGE>
Economic Summary
Indications of Slower Economic Growth
Despite repeated attempts by the Federal Reserve Board (the "Fed") to slow
economic growth, the U.S. economy continued to expand at a rapid pace during
much of the reporting period. GDP grew 5.4% during the first quarter of 2000,
and the economic expansion hit a record nine years in February. However, the
Fed was not in a celebratory mood, and it vowed to remain steadfast in its
resolve to cool the economy and pre-empt inflation.
Then, following six consecutive rate hikes, the economy finally began to show
signs of moderating during the summer. This led investors to believe that
interest rate hikes would end sooner than later. However, this optimism was
diluted by equity market weakness and a sharp drop in technology spending.
Together, these dynamics led some investors to fear that the economy might
lapse into a weaker state than economists had forecasted.
The Bond Market: Rising Rates and an Inverted Yield Curve
During most of the reporting period bond prices faltered, as rising interest
rates and negative market sentiment led to lower prices. Then, in June, it
appeared that the worst might be over. Consumer spending appeared to be
moderating, while employee productivity was strong and inflation, aside from
energy prices, was not a concern. With the Fed choosing to hold interest rates
steady during the summer the price of many bonds rallied.
While the bond market was generally weak during the initial nine months of
the fiscal year, there was one notable exception--the performance of long-term
Treasuries. Investors have aggressively purchased 30-year securities, as the
U.S. Treasury Department has moved to limit their supply. By repurchasing these
bonds with higher relative yields the Treasury is attempting to lower the
government's borrowing costs. This supply/demand trend caused long-term
Treasury prices to rise sharply. This also created an inverted yield curve,
where interest rates for short-term securities were higher than their longer-
term counterparts. Normally, investments with longer maturities command higher
yields, due to interest rate risks.
Outlook
Despite holding interest rates steady in recent months, the Fed continues to
warn investors that the tight labor market and rising energy costs could lead
to future rate hikes. We expect the Fed to keep its current policy stance
unchanged for the balance of the year. And we continue to believe that some
market participants are overly optimistic in discounting lower interest rates
next year.
2
<PAGE>
TCU Money Market Portfolio
Objective
The objective of the TCU Money Market Portfolio ("MMP" or the "Portfolio")
is to seek to maximize current income to the extent consistent with the
preservation of capital and maintenance of liquidity through investments in
high-quality money market instruments authorized under the Federal Credit
Union Act.
Performance Review
For the year ended August 31, 2000, the MMP had an average annual total
return of 5.95%. This compared favorably to the 5.81% return of the iMoneyNet
(formerly known as the IBC Financial Data, Inc.) Money Fund Report Averages
for all taxable money market funds. As of August 31, 2000, the Portfolio had a
seven-day current yield of 6.56% and an effective yield of 6.78% As of that
date, the Portfolio's seven-day current and effective yields without fee
waivers would have been 6.37% and 6.57%, respectively.
Portfolio Composition and Investment Strategies
During the reporting period, the Federal Reserve Board (the "Fed") shifted
its monetary policy from one of tightening to a more neutral stance. From June
1999 to May 2000, the Fed increased its federal funds target rate on six
different occasions, due to continued economic strength and the fear of
possible inflationary pressures. Subsequently, during this period, we
increased the floating rate securities position in the Portfolio to take
advantage of opportunities in the current rising interest rate environment. In
June and August, the Fed chose not to raise rates further, because data
indicated that economic growth was slowing. As a result, the short-term yield
curve flattened considerably and we increased our overnight position and our
weighting in shorter-dated fixed income securities.
---------------------
Please note that an investment in the Portfolio is neither insured nor
guaranteed by the National Credit Union Share Insurance Fund, the National
Credit Union Administration, or any other government agency, such as the FDIC.
Although the Portfolio seeks to preserve the value of your investment at $1.00
per unit, it is possible to lose money by investing in the Portfolio.
3
<PAGE>
Portfolio Composition as of August 31, 2000*
[GRAPH]
Variable Rate Obligations 31.3%
Government Agency Securities 22.5%
Repurchase Agreements 15.4%
Certificates of Deposit 14.6%
Bank Notes 7.9%
Euro Bank Notes 4.9%
Time Deposits 3.4%
* These percentages may differ from those in the accompanying Statement of
Investments, which reflect Portfolio holdings as a percentage of net assets.
Looking Forward
As August came to a close, the market was beginning to discount the view that
the next move by the Fed would be an easing of rates. However, we maintain our
view that the bias in Fed policy remains toward tightening rather than easing.
As such, we look for a 50 basis point increase in the federal funds rate target
during the first half of 2001. However, this projection is contingent upon
evidence that the economy is growing fast enough to put a strain on the labor
market, and that inflation is accelerating in response.
We expect to continue to target a short-to neutral-weighted average maturity
until the market more favorably prices in our expectations for growth in the
economy and interest rates.
4
<PAGE>
TCU Government Securities Portfolio
Objective
The TCU Government Securities Portfolio ("GSP" or the "Portfolio") seeks to
achieve a high level of current income, consistent with low volatility of
principal, by investing in obligations authorized under the Federal Credit
Union Act. The Portfolio invests primarily in adjustable rate mortgage
securities ("ARMs") issued by the U.S. government, its agencies or
instrumentalities. An investment in the Portfolio is neither insured nor
guaranteed by the U.S. government. GSP's maximum duration is equal to that of a
two-year U.S. Treasury security, and its target duration is to be no shorter
than that of a six-month U.S. Treasury security and no longer than that of a
one-year U.S. Treasury security. As of August 31, 2000, its actual duration was
0.83 years, compared to 0.72 years for a nine-month Treasury security.
Performance Review
For the one year period that ended August 31, 2000, the total return of GSP
was 5.90% versus the 5.54% total return for the nine-month Treasury average.
(The nine-month Treasury security, as reported by Merrill Lynch, represents a
hypothetical average weighted return of the six-month and one-year Treasury
securities. The nine-month Treasury security does not reflect any fees or
expenses.)
The Portfolio's net asset value was relatively steady during the review
period, closing at $9.63, versus $9.65 from its level a year earlier. As of
August 31, 2000, the Portfolio's 30-day distribution rate was 6.50% and its
Standardized 30-day yield was 6.09%.
Portfolio Composition and Investment Strategies
Earlier in the period under review, low interest rates and a persistently
flat yield curve encouraged ARM prepayment activity as borrowers sought to lock
in attractive long-term fixed-rate financing. As a result, spreads widened as
investors demanded greater compensation for accepting the sector's heightened
prepayment risk. In response, we gradually reduced the Portfolio's exposure to
ARMs. During the middle of the period, the prepayment environment improved
significantly. Actual prepayments have slowed and projections indicate this
trend could continue. As such, we emphasized fully-indexed, seasoned issues
that provide stable cash flows and limited cap risk. As the reporting period
drew to a close, interest rates stabilized as investors believed that the
Federal Reserve Board had completed its cycle of interest rate increases for
the time being.
5
<PAGE>
Portfolio Composition* as of August 31, 2000
[GRAPH]
ARMs 61.2%
Floaters 17.7%
Sequentials 7.3%
U.S. Treasuries 6.4%
Agency Debentures 3.7%
Fixed Rate Mortgage Pass-Throughs 2.8%
PACs 0.8%
Support 0.1%
* The percentages shown are of total Portfolio investments that have settled
and include an offset to cash equivalents relating to unsettled trades. These
percentages may differ from those in the accompanying Statement of
Investments, which reflect Portfolio holdings as a percentage of net assets.
Looking Forward
In general, we believe the recent positive tone in the mortgage market will
continue due to tighter swap spreads and a favorable pre-payment environment.
Our expectation is that the Federal Reserve Board will be less active in the
year ahead, which should, in turn, promote a more stable spread environment.
6
<PAGE>
TCU Mortgage Securities Portfolio
Objective
The TCU Mortgage Securities Portfolio ("MSP" or the "Portfolio") seeks to
achieve a high level of current income, consistent with relatively low
volatility of principal, by investing in obligations authorized under the
Federal Credit Union Act. The Portfolio invests in adjustable rate and fixed
rate mortgage securities issued by the U.S. government, its agencies or
instrumentalities and in mortgage securities rated AA or better by nationally
recognized rating agencies. An investment in the Portfolio is neither insured
nor guaranteed by the U.S. government. MSP invests in obligations authorized
under the Federal Credit Union Act with a maximum portfolio duration not to
exceed that of a three-year U.S. Treasury security and a target duration equal
to that of its benchmark, the two-year U.S. Treasury security. As of August 31,
2000, the Portfolio's actual duration was 1.95 years, versus 1.85 years for its
benchmark.
Performance Review
The Portfolio's total return for the year ended August 31, 2000 was 6.30%,
versus a 4.76% return for the two-year U.S. Treasury note. The Portfolio's net
asset value edged slightly lower during the review period, closing at $9.56
versus $9.57 a year earlier. As of August 31, 2000, the Portfolio's 30-day
distribution rate was 6.72% and the Standardized 30-day yield was 6.38%.
Portfolio Composition and Investment Strategies
During the reporting period we experienced several shifts in mortgage
prepayment activity. Initially, low interest rates and a persistently flat
yield curve encouraged ARM prepayment activity, as borrowers sought to lock in
attractive long-term fixed-rate financing. Because of this, spreads widened, as
investors looked for greater compensation for accepting the sector's heightened
prepayment risk. In response, we gradually reduced the Portfolio's exposure to
ARMs. However, the prepayment environment has improved during the middle of the
period as interest rates steadily increased. Actual prepayments slowed
significantly and projections indicate this trend could continue. As a result,
we decreased the Portfolio's exposure to Treasuries in favor of CMOs. As the
reporting period drew to a close, interest rates stabilized, as investors
believed that the Federal Reserve Board had completed its cycle of interest
rate increases for the time being.
7
<PAGE>
Portfolio Composition* as of August 31, 2000
[GRAPH]
PACs 28.0%
Sequentials 22.0%
U.S. Treasuries 13.2%
Agency Debentures 12.6%
ARMs 9.1%
Fixed Rate Mortgage Pass-Through 8.3%
Floaters 3.8%
TAC 2.1%
Support 0.9%
* These percentages may differ from those in the accompanying Statement of
Investments, which reflect Portfolio holdings as a percentage of net assets.
Looking Forward
In general, we believe the recent positive tone in the mortgage market will
continue due to tighter swap spreads and a favorable pre-payment environment.
Our expectation is that the Federal Reserve Board will be less active in the
year ahead, which should, in turn, promote a more stable spread environment.
TCU Portfolio Distribution Policy
As required by tax law, all mutual funds, including the three TCU Portfolios,
must distribute substantially all of the taxable income they generate each
year.
For the TCU Money Market Portfolio, substantially all of the net investment
income and net short-term capital gains will be declared as a dividend on a
daily basis and paid monthly. If the Portfolio were to realize any net long-
term capital gains, they would be distributed at calendar year-end.
For the TCU Government Securities Portfolio and the TCU Mortgage Securities
Portfolio, dividends are declared daily and paid monthly based on the income
each Portfolio is expected to generate during the month. The amount of the
dividend will reflect changes in interest rates (i.e., as interest rates
increase, dividends will increase and as interest rates decline, dividends will
be reduced). In addition, because these TCU Portfolios invest in mortgage
securities that are subject to prepayments, we cannot precisely predict the
amount of principal and interest that a Portfolio will receive. Therefore, at
times, a Portfolio may distribute amounts above or below current income levels.
Any excess income, over-distributions or net capital gains generated will be
paid in a special distribution or adjusted at calendar year-end.
8
<PAGE>
We appreciate your confidence in the TCU Portfolios and we look forward to
continuing to serve your investment needs in the future.
Goldman Sachs Money Market Portfolio Management Team
Goldman Sachs U.S. Fixed Income Investment Management Team
October 20, 2000
9
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TRUST FOR CREDIT UNIONS
PERFORMANCE COMPARISON
In accordance with the requirements of the Securities and Exchange Commission,
the following data for the Government Securities and Mortgage Securities
Portfolios is supplied for the years ended August 31, 2000. Each of the two
Trust for Credit Union Portfolios is compared to its benchmarks assuming the
following initial investment:
<TABLE>
<CAPTION>
Initial
Portfolio Investment Compare to:
--------------------- ---------- ------------------------------------------------
<S> <C> <C>
Government Securities $10,000 Lehman Brothers Mutual Fund Adjustable Rate
("GSP"): Mortgage Index ("Lehman ARM Index")(c); Lehman
Brothers Mutual Fund Short (1-2) Government
Index ("Lehman 1-2 Gov't Index"); 1-Year U.S.
Treasury Bill ("1-year T-Bill"); 6-Month U.S.
Treasury Bill ("6-month T-Bill").
Mortgage Securities $10,000 Lehman ARM Index; Lehman Brothers Mutual Fund
("MSP"): Short (1-3) Government Index ("Lehman 1-3 Gov't
Index"); 2-Year U.S. Treasury Note ("2-year T-
Note").
</TABLE>
All performance data shown represents past performance and should not be
considered indicative of future performance, which will fluctuate as market
conditions change. The investment return and principal value of an investment
will fluctuate with changes in market conditions so that an investor's units,
when redeemed, may be worth more or less than their original cost.
Government Securities Portfolio
[GRAPH]
Lehman ARM Lehman 1-2 1-year 6-
Month GSP ARM Index(c) Gov't Index T-bill(g) T-Bill
August 1, 1991(b) $10,000 N/A* $10,000 $10,000 $10,000
August 31, 1991 $10,057 N/A* $10,125 $10,083 $10,060
August 31, 1992 $10,730 $10,818 $11,061 $10,776 $10,617
August 31, 1993 $11,166 $11,496 $11,610 $11,187 $10,985
August 31, 1994 $11,427 $11,587 $11,878 $11,485 $11,369
August 31, 1995 $12,092 $12,540 $12,713 $12,228 $12,054
August 31, 1996 $12,851 $13,348 $13,393 $12,890 $12,706
August 31, 1997 $13,763 $14,411 $14,298 $13,712 $13,424
August 31, 1998 $14,533 $15,351 $15,277 $14,543 $14,183
August 31, 1999 $15,151 $15,940 $15,914 $15,206 $14,849
August 31, 2000 $16,044 $17,116 $16,810 $16,006 $15,713
------------------------------------------------------------
-
60.42% 65.96% 68.10% 60.06% 57.13%
Average Annual Total Return
One Year Five Year Since inception(a)
5.90% 5.81% 5.35%
[GRAPH]
Mortgage Securities Portfolio
Lehman Lehman 1-3 2-year
MSP ARM Index Gov't Index T-Bill
--- --------- ----------- ------
November 1, 1992(b)
August 31, 1993 6.51% 6.57% 5.22% 5.27%
August 31, 1994 1.00% 0.79% 1.70% 1.47%
August 31, 1995 8.20% 8.23% 7.41% 7.55%
August 31, 1996 5.68% 6.43% 5.23% 4.87%
August 31, 1997 7.89% 7.97% 7.03% 6.96%
August 31, 1998 8.10% 6.53% 7.31% 7.26%
August 31, 1999 2.51% 3.83% 3.90% 2.74%
August 31, 2000 6.28% 7.38% 5.69% 4.76%
November 1, 1992(b) $ 10,000 $ 10,000 $ 10,000 $ 10,000
August 31, 1993 $ 10,651 $ 10,657 $ 10,522 $ 10,527
August 31, 1994 $ 10,757 $ 10,741 $ 10,701 $ 10,681
August 31, 1995 $ 11,640 $ 11,625 $ 11,494 $ 11,488
August 31, 1996 $ 12,301 $ 12,373 $ 12,095 $ 12,047
August 31, 1997 $ 13,272 $ 13,359 $ 12,945 $ 12,885
August 31, 1998 $ 14,347 $ 14,231 $ 13,891 $ 13,820
August 31, 1999 $ 14,707 $ 14,776 $ 14,433 $ 14,199
August 31, 2000 $ 15,634 $ 15,867 $ 15,254 $ 14,875
-------------------------------------------------------
56.31% 58.67% 52.54% 48.75%
Average Annual Return
One Year Five Year Since Inception
-------- --------- ---------------
6.30% 6.07% 5.79%
(a) The Government Securities and Mortgage Securities Portfolios commenced
operations July 10, 1991 and October 9, 1992, respectively.
(b) For comparative purposes, initial investments are assumed to be made on the
first day of the month following each Portfolio's inception.
(c) The calculation of the Lehman ARM Index was initiated for the month ended
January 31, 1992. For comparative purposes in this graph, an initial
investment for this index is assumed on January 1, 1992, at a value equal
to the Government Securities Portfolio's investment at such date.
10
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TRUST FOR CREDIT UNIONS
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MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C>
Bank Notes (7.8%)
Bank One, N.A.
$ 10,000 6.38% 09/22/2000 $ 10,000
Southtrust Bank, N.A.
25,000 6.30 09/01/2000 25,000
--------
Total Bank Notes.................................. $ 35,000
--------
Bank Note-Eurodollar (4.9%)
Huntington National Bank
22,000 6.72%# 09/28/2000 $ 22,007
--------
Total Bank and Medium-Term Note-Eurodollar........ $ 22,007
--------
Certificates of Deposit (14.6%)
American Express Centurion Bank
$15,000 6.54% 09/28/2000 $ 15,000
Citibank, N.A.
20,000 6.73 09/12/2000 20,000
Morgan Guaranty Trust Co.
15,000 6.76 01/31/2001 15,000
U.S. Bank, N.A.
15,000 6.59 11/02/2000 15,000
--------
Total Certificates of Deposit..................... $ 65,000
--------
Government Agency Security (22.4%)
Federal Home Loan Bank
$100,000 6.57% 09/01/2000 $100,000
--------
Total Government Agency Securities................ $100,000
--------
Time Deposit (3.4%)
Wachovia Bank, N.A.
$ 15,000 6.52% 09/01/2000 $ 15,000
--------
Total Time Deposit................................ $ 15,000
--------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
--------- -------- -------- ---------
<S> <C> <C> <C>
Variable Rate Obligations# (31.1%)
Bank of America, N.A.
$15,000 6.65% 10/27/2000 $ 15,000
10,000 6.74 11/03/2000 10,004
First Union National Bank
4,000 6.86 09/27/2000 4,000
5,000 6.89 11/13/2000 5,003
First USA Bank
10,000 6.77 10/31/2000 10,005
Fleet National Bank
25,000 6.79 11/01/2000 25,010
Huntington National Bank
10,000 6.69 11/09/2000 10,002
Key Bank, N.A.
5,000 6.71 10/30/2000 5,000
National City Bank
15,000 6.76 10/23/2000 15,006
20,000 6.83 11/27/2000 20,009
PNC Bank, N.A.
10,000 6.52 09/26/2000 9,997
Southtrust Bank, N.A.
10,000 6.65 10/04/2000 10,000
--------
Total Variable Rate Obligations................... $139,036
--------
Repurchase Agreement (15.4%)
Joint Account I*
$ 68,500 6.59% 09/01/2000 $ 68,500
--------
Total Repurchase Agreement........................ $ 68,500
--------
Total Investments................................. $444,543
========
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
# Variable rate securities. Coupon rates disclosed are those which are in
effect at August 31, 2000. Maturity date shown is the date of the next
coupon rate reset or actual maturity.
* Repurchase agreement was entered into on August 31, 2000.
The accompanying notes are an integral
part of these financial statements.
11
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TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations (89.8%)
Adjustable Rate Federal Home Loan Mortgage Corp. (FHLMC) # (18.7%)
$ 2,149 8.13% 08/01/2017 $ 2,169
2,043 6.73 02/01/2018 2,008
665 8.36 04/01/2018 671
3,926 7.61 05/01/2018 3,995
1,318 7.62 07/01/2018 1,340
2,933 7.60 11/01/2018 2,953
3,781 7.67 08/01/2019 3,851
4,443 7.86 08/01/2019 4,481
20,585 7.95 11/01/2019 20,997
2,623 7.76 07/01/2021 2,662
3,320 7.60 11/01/2021 3,344
2,161 7.68 02/01/2022 2,177
13,363 7.88 02/01/2022 13,643
10,319 8.06 04/01/2022 10,538
1,442 7.71 11/01/2022 1,436
7,001 7.81 11/01/2022 7,126
2,056 8.09 11/01/2022 2,064
4,364 7.87 06/01/2024 4,446
951 8.47 10/01/2024 960
2,507 7.79 10/01/2025 2,527
1,361 7.50 02/01/2028 1,374
2,249 7.63 04/01/2028 2,266
1,083 7.98 07/01/2029 1,102
2,771 8.20 05/01/2031 2,793
--------
Total Adjustable Rate Federal Home Loan Mortgage
Corp. (FHLMC) ................................... $100,923
--------
</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) # (38.3%)
$ 1,810 7.13% 10/01/2013 $ 1,829
1,834 7.22 03/01/2017 1,851
1,040 7.35 07/01/2017 1,052
1,047 7.27 11/01/2017 1,056
1,299 8.02 11/01/2017 1,321
1,063 8.27 11/01/2017 1,072
7,524 7.31 12/01/2017 7,624
1,694 7.59 03/01/2018 1,710
997 7.44 04/01/2018 1,016
912 7.33 05/01/2018 921
1,563 7.85 06/01/2018 1,579
577 8.63 06/01/2018 584
5,275 7.86 08/01/2018 5,396
2,039 7.73 09/01/2018 2,065
4,314 7.80 09/01/2018 4,399
680 5.58 11/01/2018 692
3,462 7.71 12/01/2018 3,530
1,428 7.41 05/01/2019 1,450
11,017 7.44 06/01/2019 11,157
1,929 7.58 07/01/2019 1,966
4,313 7.01 12/01/2019 4,210
1,979 7.86 01/01/2020 1,997
2,854 7.86 03/01/2020 2,912
690 7.65 05/01/2020 692
9,666 7.90 05/01/2020 9,860
3,722 7.61 12/01/2020 3,793
20,720 7.82 01/01/2021 21,137
8,351 7.43 04/01/2021 8,505
35,487 7.72 09/01/2021 36,189
786 7.76 10/01/2021 794
1,762 7.96 11/01/2021 1,798
10,697 7.76 02/01/2022 10,987
3,650 7.60 05/01/2022 3,719
</TABLE>
The accompanying notes are an integral
part of these financial statements.
12
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Adjustable Rate FNMA--(Continued)
$16,617 7.86% 09/01/2022 $ 16,958
2,066 7.96 01/01/2023 2,103
2,103 7.21 03/01/2024 2,123
8,990 7.72 09/01/2025 9,170
2,860 7.71 10/01/2025 2,880
2,356 7.84 07/01/2027 2,403
1,765 7.57 10/01/2027 1,792
9,776 7.26 07/01/2028 9,940
377 7.84 01/01/2031 386
--------
Total Adjustable Rate Federal National Mortgage
Association (FNMA) .............................. $206,618
--------
Adjustable Rate Government National Mortgage Association (GNMA) # (4.1%)
$ 1,790 7.13% 11/20/2020 $ 1,790
656 6.75 09/20/2021 664
3,867 7.38 05/20/2022 3,927
2,943 6.75 09/20/2022 2,981
3,372 7.38 03/20/2023 3,424
3,610 6.75 07/20/2023 3,657
2,637 6.75 09/20/2023 2,672
3,267 6.75 09/20/2025 3,310
--------
Total Adjustable Rate Government National
Mortgage Association (GNMA) ..................... $ 22,425
--------
Fixed Rate Federal Home Loan Mortgage Corp. (FHLMC) (0.5%)
$ 2,755 6.50% 11/01/2010 $ 2,702
--------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Fixed Rate Federal National Mortgage Association (FNMA)
(2.3%)
$5,526 7.00% 10/01/2002 $ 5,500
2,696 7.00 03/01/2004 2,685
268 7.00 04/01/2004 267
3,971 6.00 06/01/2004 3,863
--------
Total Fixed Rate Federal National Mortgage
Association (FNMA)................................. $ 12,315
--------
Collateralized Mortgage Obligations (CMOs) (25.9%)
Regular Floater CMOs # (17.7%)
FHLMC Series 1009, Class D
$ 817 7.22% 10/15/2020 $ 822
FHLMC Series 1066, Class P
2,524 7.53 04/15/2021 2,559
FHLMC Series 1448, Class F
3,000 8.02 12/15/2022 3,143
FHLMC Series 1555, Class FA
2,432 7.82 08/15/2008 2,497
FHLMC Series 1575, Class FA
3,000 8.00 08/15/2008 3,060
FHLMC Series 1592, Class N
932 7.32 12/15/2022 928
FHLMC Series 16, Class FC
2,474 7.72 08/25/2023 2,501
FHLMC Series 1631, Class FB
8,095 7.68 12/15/2023 8,213
FHLMC Series 1698, Class FA
2,966 7.43 03/15/2009 2,994
FNMA REMIC Trust Series 1990-145, Class A
6,238 6.77 12/25/2020 6,218
FNMA REMIC Trust Series 1992-137, Class F
18,469 7.63 08/25/2022 18,763
</TABLE>
The accompanying notes are an integral
part of these financial statements.
13
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Regular Floater CMOs--(Continued)
FNMA REMIC Trust Series 1992-155, Class FC
$ 3,000 7.48% 09/25/2007 $ 3,050
FNMA REMIC Trust Series 1993-27, Class F
18,785 7.78 02/25/2023 19,036
FNMA REMIC Trust Series 1993-180, Class FA
183 7.03 09/25/2000 183
FNMA REMIC Trust Series 1996-54, Class FB
11,616 7.38 08/25/2023 11,670
FNMA REMIC Trust Series 1997-70, Class FA
1,274 7.08 07/18/2020 1,273
FNMA REMIC Trust Series G93-27, Class F
8,254 7.78 08/25/2023 8,375
--------
Total Regular Floater CMOs ....................... $ 95,285
--------
Planned Amortization Class (PAC) CMOs (0.8%)
FHLMC Series 1693, Class K
$ 527 6.00% 03/15/2001 $ 525
FHLMC Series 2055, Class OA
3,838 6.00 12/15/2005 3,805
--------
Total Planned Amortization Class (PAC) CMOs....... $ 4,330
--------
Sequential Fixed Rate CMOs (7.3%)
FHLMC Series 1398, Class G
$5,000 7.00% 06/15/2006 $ 4,986
FHLMC Series 1465, Class E
2,148 6.50 09/15/2006 2,138
FHLMC Series 1869, Class G
1,000 8.00 02/15/2024 999
FHLMC REMIC Series 1369, Class G
3,254 6.50 03/15/2006 3,237
FNMA REMIC Trust Series 1990-24, Class E
523 9.00 03/25/2020 528
FNMA REMIC Trust Series 1992-19, Class K
1,146 7.50 12/25/2004 1,141
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Sequential Fixed Rate CMOs--(Continued)
FNMA REMIC Trust Series 1992-22, Class HA
$2,880 7.00% 11/25/2005 $ 2,868
FNMA REMIC Trust Series 1992-193, Class GB
2,545 7.00 01/25/2006 2,535
FNMA REMIC Trust Series 1993-31, Class G
3,216 6.70 04/25/2019 3,195
FNMA REMIC Trust Series 1993-8, Class G
2,147 7.00 08/25/2006 2,137
FNMA REMIC Trust Series 1996-9, Class B
1,383 6.50 06/25/2018 1,372
FNMA REMIC Trust Series 1997-23, Class C
7,000 7.00 10/18/2021 6,978
FNMA REMIC Trust Series 1998-1, Class BA
5,796 9.50 04/20/2024 6,132
GNMA REMIC Trust Series 1997-8, Class DB
888 7.25 10/16/2022 886
--------
Total Sequential Fixed Rate CMOs.................. $ 39,132
--------
Support CMOs (0.1%)
FNMA REMIC Trust Series 1997-90, Class A
$ 655 7.00% 04/18/2026 $ 653
--------
Total Collateralized Mortgage Obligations (CMOs).... $139,400
--------
Total Mortgage Backed Obligations (cost $489,752)... $484,383
--------
</TABLE>
The accompanying notes are an integral
part of these financial statements.
14
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
GOVERNMENT SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Agency Debentures (3.7%)
Federal National Mortgage Association
$10,000 6.63% 01/15/2002 $ 9,989
Sri Lanka Aid
10,000 6.96# 11/01/2024 9,999
--------
Total Agency Debentures (cost $19,982).............. $ 19,988
--------
U.S. Treasury Obligations (6.4%)
United States Treasury Notes
$18,800 5.75% 11/30/2002 $ 18,630
7,000 7.88 11/15/2004 7,462
United States Treasury Bond
6,500 8.75 08/15/2020 8,596
--------
Total U.S. Treasury Obligations (cost $34,400)...... $ 34,688
--------
Total Investments (cost $544,134)................... $539,059
========
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
# Variable rate securities. Coupon rates disclosed are those which are in
effect at August 31, 2000.
The accompanying notes are an integral
part of these financial statements.
15
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations (73.9%)
Fixed Rate Federal Home Loan Mortgage Corp. (FHLMC) Gold (4.6%)
$ 4,497 6.50% 04/01/2013 $ 4,388
2,516 6.50 05/01/2013 2,458
797 6.50 06/01/2013 778
7,901 6.50 07/01/2013 7,707
2,520 6.50 06/01/2014 2,457
3,313 8.50 05/01/2028 3,388
--------
Total Fixed Rate Federal Home Loan Mortgage Corp.
(FHLMC) Gold..................................... $ 21,176
--------
Fixed Rate Federal National Mortgage Association (FNMA) (0.3%)
$ 1,002 6.00% 09/01/2007 $ 985
645 6.00 11/01/2009 626
--------
Total Fixed Rate Federal National Mortgage
Association (FNMA)............................... $ 1,611
--------
Fixed Rate Government National Mortgage Association (GNMA) (3.3%)
$ 340 6.00% 07/15/2008 $ 331
91 6.00 08/15/2008 88
2,056 6.00 09/15/2008 2,000
1,475 6.00 10/15/2008 1,435
426 6.00 11/15/2008 414
328 6.00 12/15/2008 319
398 6.00 01/15/2009 386
172 6.00 02/15/2009 166
175 6.00 05/15/2009 170
16 8.50 07/15/2009 16
8 8.50 09/15/2009 8
10 8.50 12/15/2009 11
698 8.50 01/15/2010 717
602 8.50 02/15/2010 618
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Fixed Rate GNMA--(Continued)
$ 455 8.50% 03/15/2010 $ 468
227 8.50 04/15/2010 233
202 8.50 05/15/2010 208
826 8.50 06/15/2010 848
160 8.50 07/15/2010 164
147 8.50 08/15/2010 151
131 8.50 10/15/2010 134
745 8.50 11/15/2010 765
591 8.50 12/15/2010 607
631 8.50 09/15/2011 649
413 8.50 10/15/2011 425
487 8.50 03/15/2012 500
547 8.50 07/15/2012 562
2,517 6.50 08/15/2027 2,421
--------
Total Fixed Rate Government National Mortgage
Association (GNMA)............................... $ 14,814
--------
Collateralized Mortgage Obligations (CMOs) (65.7%)
Adjustable Rate CMOs # (9.1%)
Chase Mortgage Finance Corp. Series 1995-A, Class A
$13,032 6.28% 04/25/2025 $ 13,133
Citicorp Mortgage Securities, Inc. Series 1992-17, Class A
2,520 7.55 09/25/2022 2,557
CMC Securities Corp. II Series 1993-21, Class A2
683 7.44 09/25/2023 675
Federal National Mortgage Association
6,570 7.82 01/01/2021 6,702
Imperial Savings Association Series 1988-3, Class A
802 7.16 01/25/2018 799
Independent National Mortgage Corp. Series 1994-W, Class A1
58 7.72 12/25/2024 58
</TABLE>
The accompanying notes are an integral
part of these financial statements.
16
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Adjustable Rate CMOs--(Continued)
Merrill Lynch Mortgage Investors, Inc. Series 1994-1, Class A1
$ 753 8.43% 01/25/2005 $ 751
Resolution Trust Corp. Series 1994-1, Series M3
2,827 7.91 09/25/2029 2,815
Resolution Trust Corp. Series 1995-1, Class A3
4,420 7.30 10/25/2028 4,433
Resolution Trust Corp. Series 1995-1, Class M3
1,473 7.30 10/25/2028 1,476
Ryland Mortgage Securities Corp. Series 1989-FN1,
Class A
190 8.08 11/01/2018 189
Salomon Brothers Mortgage Securities VII Series
1990-3A, Class 1
502 7.14 11/25/2020 500
Salomon Brothers Mortgage Securities VII Series 1993-2, Class A1A
2,743 8.40 03/25/2023 2,845
Salomon Brothers Mortgage Securities VII Series 1994-20, Class A
3,068 8.42 01/12/2024 3,133
Saxon Mortgage Securities Corp. Series 1994-11, Class A
1,159 8.44 12/25/2024 1,164
--------
Total Adjustable Rate CMOs ....................... $ 41,230
--------
Regular Floater CMOs # (3.8%)
CMC Securities Corp. III Series 1994-A, Class A17
$ 4,867 7.78% 02/25/2024 $ 4,969
Countrywide Funding Corp. Series 1993-10, Class A9
4,931 7.63 01/25/2024 4,990
FHLMC Series 1448, Class F
7,000 8.02 12/15/2022 7,334
--------
Total Regular Floater CMOs ....................... $ 17,293
--------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Planned Amortization Class (PAC) CMOs (27.9%)
Chase Mortgage Finance Corp. Series 1994-G, Class A7
$10,152 7.00% 04/25/2025 $ 9,959
Chemical Mortgage Securities Inc. Series 1994-1, Class A1
2,209 6.25 01/25/2009 2,175
Countrywide Funding Corp. Series 1993-2, Class A4
12,019 6.50 10/25/2008 11,888
Countrywide Funding Corp. Series 1993-9, Class A3
2,671 6.50 01/25/2009 2,649
Countrywide Funding Corp. Series 1994-13, Class A4
2,797 6.50 06/25/2009 2,782
Countrywide Funding Corp. Series 1994-2, Class A10A
6,284 6.50 02/25/2009 6,159
Countrywide Home Loans Series 1998-11, Class A10
8,737 6.25 08/25/2028 8,607
FHLMC Series 1301, Class F
8,000 7.00 03/15/2007 7,984
FHLMC Series 1556, Class G
5,000 6.35 10/15/2010 4,946
FHLMC Series 1987, Class L
10,000 6.20 08/25/2022 9,603
FNMA REMIC Trust Series 1993-71, Class PJ
11,037 6.50 05/25/2007 10,887
FNMA REMIC Trust Series 1997-84, Class PA
14,000 5.90 11/25/2021 13,384
FNMA REMIC Trust Series 1997-84, Class PB
7,000 5.50 01/25/2008 6,611
GE Capital Mortgage Services, Inc. Series 1994-15, Class A8
99 6.00 04/25/2009 98
Housing Securities, Inc. Series 1993-E, Class E8
473 10.00 02/25/2008 475
Norwest Asset Securities Corp. Series 1998-17, Class A2
10,720 6.25 08/25/2028 10,579
</TABLE>
The accompanying notes are an integral
part of these financial statements.
17
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
PAC CMOs--(Continued)
Paine Webber Mortgage Acceptance Corp. Series 1993-6, Class A3
$ 1,566 6.90% 08/25/2008 $ 1,558
PNC Mortgage Securities Corp. Series 1998-2, Class 5A2
3,610 6.63 03/25/2028 3,555
Prudential Home Mortgage Securities Series 1993-36, Class A12
7,343 7.25 10/25/2023 7,307
Residential Funding Mortgage Securities I Series
1993-S45, Class A1
1,840 6.50 12/25/2023 1,820
Salomon Brothers Mortgage Securities VII Series
1996-6K, Class A1
2,277 7.00 10/30/2003 2,240
Structured Mortgage Securities Corp. Series 1994-1,
Class A2
2,000 6.60 05/25/2009 1,980
--------
Total Planned Amortization Class (PAC) CMOs....... $127,246
--------
Sequential Fixed Rate CMOs (21.9%)
American Housing Trust Series VI, Class 1-I
$ 7,350 9.15% 05/25/2020 $ 7,647
CMC Securities Corp. Series 1993-C, Class C3
956 9.55 04/25/2008 952
Countrywide Funding Corp. Series 1994-3, Class A10
18,365 6.75 03/25/2024 17,638
Federal Home Loan Mortgage Corp. Series 1997-84, Class G
2,459 9.50 10/18/2022 2,522
Federal National Mortgage Association REMIC Series 1988-12, Class A
1,715 10.00 02/25/2018 1,786
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Sequential Fixed Rate CMOs--(Continued)
Federal National Mortgage Association REMIC Trust Series 1993-131, Class Z
$ 8,198 7.00% 07/25/2008 $ 8,057
Federal National Mortgage Association REMIC Trust Series 1993-G41, Class
ZA
15,068 6.50 06/25/2019 14,879
GE Capital Mortgage Services, Inc. REMIC Series
1994-7, Class A12
12,942 6.00 02/25/2009 12,538
GE Capital Mortgage Services, Inc. Series 1996-11,
Class A3
707 7.50 07/25/2026 704
Independent National Mortgage Corp. Series 1994-Q, Class A11
3,728 7.50 09/25/2014 3,734
Norwest Asset Securities Corp. Series 1997-5, Class A5
7,234 7.00 04/25/2012 7,050
PNC Mortgage Securities Corp. Series 1997-4, Class 1PP4
10,644 7.00 07/25/2027 10,369
Prudential Home Mortgage Securities Series 1995-7,
Class A7
3,753 7.00 11/25/2025 3,708
Residental Asset Securitization Trust Series 1997-A3, Class A5
1,311 7.75 05/25/2027 1,320
Residential Funding Mortgage Securities I Series
1997-S13, Class A1
183 7.25 09/25/2027 183
Structured Asset Securities Corp. Series 1995-3A,
Class 1A1
6,863 7.00 01/28/2024 6,801
--------
Total Sequential Fixed Rate CMOs.................. $ 99,888
--------
</TABLE>
The accompanying notes are an integral
part of these financial statements.
18
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
MORTGAGE SECURITIES PORTFOLIO--(Continued)
STATEMENT OF INVESTMENTS
August 31, 2000
($ in Thousands)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
Mortgage Backed Obligations--(Continued)
Support CMOs (0.9%)
Countrywide Mortgage Backed Securities, Inc. Series 1993-A, Class A9
$ 2,435 6.50% 10/25/2008 $ 2,420
GE Capital Mortgage Services, Inc. Series 1994-6, Class A9
1,511 6.50 09/25/2022 1,449
--------
Total Support CMOs................................ $ 3,869
--------
Targeted Amortization Class (TAC) CMO (2.1%)
Paine Webber Mortgage Acceptance Corp. Series 1994-6, Class A7
$10,000 6.00% 04/25/2009 $ 9,500
--------
Total Collateralized Mortgage Obligations (CMOs).... $299,026
--------
Total Mortgage Backed Obligations (cost $342,080)... $336,627
--------
Agency Debentures (12.6%)
Federal Farm Credit Bank
$ 7,060 5.88% 07/02/2001 $ 7,008
Federal Home Loan Bank
6,000 5.33 03/20/2001 5,954
Federal National Mortgage Association
4,500 5.00 11/15/2000 4,484
6,000 5.21 12/10/2001 5,864
25,000 6.63 01/15/2002 24,972
3,700 5.55 11/15/2002 3,611
5,500 5.62 11/18/2002 5,340
--------
Total Agency Debentures (cost $57,173)............ $ 57,233
--------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
--------- -------- -------- -----
<S> <C> <C> <C>
U.S. Treasury Obligations (13.2%)
United States Treasury Notes
$ 2,000 5.75% 10/31/2002 $ 1,982
55,400 5.75 11/30/2002 54,898
3,000 7.88 11/15/2004 3,198
--------
Total U.S. Treasury Obligations (cost $59,950).... $ 60,078
--------
Repurchase Agreement (0.0%)
Joint Account II*
$ 100 6.65% 09/01/2000 $ 100
--------
Total Repurchase Agreement (cost $100)............ $ 100
--------
Total Investments
(cost $459,303).................................. $454,038
========
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
# Variable rate securities. Coupon rates disclosed are those which are in
effect at August 31, 2000.
* Repurchase agreement was entered into on August 31, 2000.
The accompanying notes are an integral
part of these financial statements.
19
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF ASSETS AND LIABILITIES
August 31, 2000
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Investment in securities, at value
(identified cost $376,042,518,
$544,133,706, $459,302,988,
respectively)........................ $376,042,518 $539,059,168 $454,038,481
Repurchase agreements................. 68,500,000 -- --
Cash.................................. 76,771 -- 118,106
Receivables:
Investment securities sold........... -- 1,737,969 --
Fund shares sold..................... 1,312,618 -- --
Interest............................. 2,334,830 3,868,125 3,554,141
Other assets.......................... 1,873 2,504 2,473
------------ ------------ ------------
Total assets...................... 448,268,610 544,667,766 457,713,201
------------ ------------ ------------
LIABILITIES
Due to Bank........................... -- 147,944 --
Payables:
Investment securities purchased...... -- 2,026,065 --
Dividends............................ 1,481,603 2,488,680 2,244,514
Advisory fees........................ 29,332 92,697 58,424
Administration fees.................. 8,381 46,349 38,910
Accrued expenses and other
liabilities.......................... 275,272 62,945 88,804
------------ ------------ ------------
Total liabilities................. 1,794,588 4,864,680 2,430,652
------------ ------------ ------------
NET ASSETS
Paid-in capital....................... 446,474,022 570,438,437 475,770,942
Accumulated undistributed
(distributions in excess of) net
investment income.................... -- (211,258) 76,536
Accumulated net realized loss on
investment transactions.............. -- (25,349,555) (15,300,422)
Net unrealized loss on investments.... -- (5,074,538) (5,264,507)
------------ ------------ ------------
Net assets........................ $446,474,022 $539,803,086 $455,282,549
============ ============ ============
Net asset value & public offering
price per unit (net assets/units
outstanding)......................... $ 1.00 $ 9.63 $ 9.56
============ ============ ============
UNITS OUTSTANDING
Total units outstanding, $0.001 par
value (unlimited number of units
authorized).......................... 446,474,022 56,047,953 47,621,129
============ ============ ============
</TABLE>
The accompanying notes are an integral
part of these financial statements.
20
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF OPERATIONS
For the Year Ended August 31, 2000
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Investment Income:
Interest Income.................... $44,613,168 $38,760,382 $31,599,316
----------- ----------- -----------
Expenses:
Advisory fees...................... 1,296,940 1,193,506 961,683
Administration fees................ 764,626 596,753 240,421
Custodian fees..................... 165,289 108,796 112,113
Professional fees.................. 25,600 60,138 57,365
Trustees' fees..................... 32,341 27,517 20,300
Transfer Agent fees................ -- 4,681 1,566
Other expenses..................... 39,407 51,911 48,229
----------- ----------- -----------
Total expenses..................... 2,324,203 2,043,302 1,441,677
Less--expense reductions............ (1,376,250) (5,005) (5,001)
----------- ----------- -----------
Net expenses....................... 947,953 2,038,297 1,436,676
----------- ----------- -----------
Net investment income............... 43,665,215 36,722,085 30,162,640
Net realized gain (loss) on
investment transactions............ 194 (2,508,663) (3,423,629)
Net change in unrealized gain (loss)
on investments..................... -- (169,180) 2,304,094
----------- ----------- -----------
Net increase in net assets resulting
from operations.................... $43,665,409 $34,044,242 $29,043,105
=========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
21
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended August 31, 2000
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
--------------- ------------- ------------
<S> <C> <C> <C>
From Operations:
Net investment income.......... $ 43,665,215 $ 36,722,085 $ 30,162,640
Net realized gain (loss) from
investment transactions....... 194 (2,508,663) (3,423,629)
Net change in unrealized gain
(loss) on investments......... -- (169,180) 2,304,094
--------------- ------------- ------------
Net increase in net assets
resulting from operations..... 43,665,409 34,044,242 29,043,105
--------------- ------------- ------------
Distributions to Unitholders:
From net investment income..... (43,665,409) (35,373,732) (29,917,879)
--------------- ------------- ------------
Total distribution to
unitholders................... (43,665,409) (35,373,732) (29,917,879)
--------------- ------------- ------------
From Unit Transactions:
Proceeds from sales of units... 8,197,440,600 8,229,902 15,000,000
Reinvestment of dividends and
distributions................. 23,176,037 6,769,182 5,703,372
Cost of units repurchased...... (8,842,511,128) (167,023,584) (57,150,582)
--------------- ------------- ------------
Net decrease in net assets
resulting from unit
transactions.................. (621,894,491) (152,024,500) (36,447,210)
--------------- ------------- ------------
Total decrease................. (621,894,491) (153,353,990) (37,321,984)
--------------- ------------- ------------
Net assets:
Beginning of year.............. 1,068,368,513 693,157,076 492,604,533
--------------- ------------- ------------
End of year.................... $ 446,474,022 $ 539,803,086 $455,282,549
=============== ============= ============
Accumulated undistributed (dis-
tributions in excess of) net
investment income.............. $ -- $ (211,258) $ 76,536
=============== ============= ============
Summary of Unit Transactions:
Units sold..................... 8,197,440,600 813,367 1,569,623
Reinvestment of dividends and
distributions................. 23,176,037 701,572 598,466
Units repurchased.............. (8,842,511,128) (17,266,357) (6,014,834)
--------------- ------------- ------------
Decrease in units outstanding.. (621,894,491) (15,751,418) (3,846,745)
=============== ============= ============
</TABLE>
The accompanying notes are an integral
part of these financial statements.
22
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended August 31, 1999
<TABLE>
<CAPTION>
Money Government Mortgage
Market Securities Securities
Portfolio Portfolio Portfolio
---------------- ------------ ------------
<S> <C> <C> <C>
From Operations:
Net investment income.......... $ 75,311,202 $ 39,184,168 $ 27,571,614
Net realized loss from
investment transactions....... -- (5,238,318) (4,446,414)
Net change in unrealized gain
(loss) on investments......... -- (3,975,668) (11,671,755)
---------------- ------------ ------------
Net increase in net assets
resulting from operations..... 75,311,202 29,970,182 11,453,445
---------------- ------------ ------------
Distributions to Unitholders:
From net investment income..... (75,311,202) (39,184,168) (27,571,614)
In excess of net investment
income........................ -- (86,230) (22,899)
---------------- ------------ ------------
Total distributions to
unitholders................... (75,311,202) (39,270,398) (27,594,513)
---------------- ------------ ------------
From Unit Transactions:
Proceeds from sales of units... 11,014,710,870 119,880,996 125,600,000
Reinvestment of dividends and
distributions................. 36,490,252 9,163,079 5,859,291
Cost of units repurchased...... (10,955,689,385) (81,239,325) (65,263,486)
---------------- ------------ ------------
Net increase in net assets
resulting from unit
transactions.................. 95,511,737 47,804,750 66,195,805
---------------- ------------ ------------
Total increase................. 95,511,737 38,504,534 50,054,737
---------------- ------------ ------------
Net assets:
Beginning of year.............. 972,856,776 654,652,542 442,549,796
---------------- ------------ ------------
End of year.................... $ 1,068,368,513 $693,157,076 $492,604,533
================ ============ ============
Accumulated distributions in ex-
cess of net investment income.. $ -- $ (1,559,611) $ (169,159)
================ ============ ============
Summary of Unit Transactions:
Units sold..................... 11,014,710,870 12,332,391 12,758,107
Reinvestment of dividends and
distributions................. 36,490,252 943,969 601,593
Units repurchased.............. (10,955,689,385) (8,370,969) (6,596,683)
---------------- ------------ ------------
Increase in units outstanding.. 95,511,737 4,905,391 6,763,017
================ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
TRUST FOR CREDIT UNIONS
---------
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Income from Ratio information
investment Distributions to assuming no expense
operations(a) unitholders reductions
------------- ---------------- -------------------
Ratio of
net Ratio of
Ratio of invest- net
Net Net net ment Net Ratio of investment
asset From asset expenses income assets expenses income
value at Net net value to to at end to to
begin- invest- invest- at average average of average average
ning of ment ment end of Total net net period net net
period income income period return(b) assets assets (000's) assets assets
-------- ------------- ---------------- ------ --------- -------- -------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended:
8/31/00......... $1.00 $0.06 $(0.06) $1.00 5.95% 0.12% 5.71% $ 446,474 0.30% 5.53%
8/31/99......... 1.00 0.05 (0.05) 1.00 5.09 0.13 4.94 1,068,369 0.30 4.77
8/31/98......... 1.00 0.06 (0.06) 1.00 5.67 0.11 5.52 972,857 0.30 5.33
8/31/97......... 1.00 0.05 (0.05) 1.00 5.43 0.18 5.31 441,205 0.33 5.16
8/31/96......... 1.00 0.05 (0.05) 1.00 5.51 0.19 5.37 426,710 0.31 5.25
</TABLE>
(a) Calculated based on average units outstanding methodology.
(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.
The accompanying notes are an integral part of these financial statements.
24
<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
realized Ratio of invest-
Net and In Net net ment
asset unrealized Total From excess asset expenses income
value at Net gain Income net of net value to to
begin- invest- (loss) from invest- invest- at average average
ning of ment on invest- investment ment ment Total end of Total net net
period income ments operations income income Distributions period return(b) assets assets
-------- ------- ---------- ---------- ------- ------- ------------- ------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended:
8/31/00......... $9.65 $0.59(a) $(0.04) $0.55 $(0.57) $ -- $(0.57) $9.63 5.90% 0.34% 6.15%
8/31/99......... 9.79 0.54 (0.14) 0.40 (0.54) -- (0.54) 9.65 4.25 0.33 5.60
8/31/98......... 9.84 0.58 (0.04) 0.54 (0.58) (0.01) (0.59) 9.79 5.60 0.34 5.83
8/31/97......... 9.76 0.59 0.08 0.67 (0.59) -- (0.59) 9.84 7.09 0.34 6.02
8/31/96......... 9.76 0.60 -- 0.60 (0.60) -- (0.60) 9.76 6.26 0.35 6.16
<CAPTION>
Ratio information
assuming no expense
reductions
-------------------
Ratio of
net
Net Ratio of investment
assets expenses income Port-
at end to to folio
of average average turn-
period net net over
(000's) assets assets rate(c)
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
Year ended:
8/31/00......... $539,803 0.34% 6.15% 61.41%
8/31/99......... 693,157 0.33 5.60 152.70
8/31/98......... 654,653 0.34 5.83 93.77
8/31/97......... 564,642 0.34 6.02 88.02
8/31/96......... 535,702 0.35 6.16 149.66
</TABLE>
(a) Calculated based on average units outstanding methodology.
(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, if any.
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
TRUST FOR CREDIT UNIONS
---------
MORTGAGE SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Distributions
Income from to
investment operations unitholders
-------------------------------- -------------
Ratio of
net
Net Ratio of invest-
Net realized Net net ment Net
asset and Total From asset expenses income assets
value at Net unrealized Income net value to to at end
begin- invest- gain (loss) from invest- at average average of
ning of ment on invest- investment ment end of Total net net period
period income ments operations income period return(b) assets assets (000's)
-------- ------- ----------- ---------- ------------- ------ --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended:
8/31/00......... $9.57 $0.60(a) $(0.02) $0.58 $(0.59) $9.56 6.30% 0.30% 6.27% $455,283
8/31/99......... 9.90 0.57 (0.33) 0.24 (0.57) 9.57 2.51 0.29 5.87 492,605
8/31/98......... 9.75 0.64 0.13 0.77 (0.62) 9.90 8.10 0.30 6.44 442,550
8/31/97......... 9.65 0.64 0.10 0.74 (0.64) 9.75 7.89 0.30 6.57 350,315
8/31/96......... 9.74 0.66 (0.12) 0.54 (0.63) 9.65 5.67 0.28 6.64 332,546
<CAPTION>
Ratio information
assuming no
expense reductions
-------------------
Ratio of
net
Ratio of investment
expenses income Port-
to to folio
average average turn-
net net over
assets assets rate(c)
-------- ---------- --------
<S> <C> <C> <C> <C> <C>
Year ended:
8/31/00......... 0.30% 6.27% 83.74%
8/31/99......... 0.29 5.87 168.44
8/31/98......... 0.30 6.44 108.76
8/31/97......... 0.30 6.57 106.10
8/31/96......... 0.30 6.62 163.42
</TABLE>
(a) Calculated based on average units outstanding methodology.
(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, if any.
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS
August 31, 2000
1. Organization
Trust for Credit Unions 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
collectively, "the Portfolios" or individually a "Portfolio." Units of the
Portfolios 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
Portfolios. 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. Actual results could
differ from those estimates.
A. Investment Valuation
For the Government Securities and Mortgage Securities Portfolios, 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, pricing matrices or
other sources, under valuation procedures established by the Portfolios' 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.
B. Security Transactions and Investment Income
Security transactions are recorded as of the trade date. Realized gains and
losses on sales of portfolio securities are calculated using 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 effective yield basis over
the expected life of the respective securities. 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
27
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
August 31, 2000
2. Summary of Significant Accounting Policies--(Continued)
Statements of Operations. Original issue discounts ("OID") 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. OID amortization on
mortgage-backed REMIC securities is initially recorded based on estimates of
principal paydowns using the most recent OID factors available from the issuer.
Recorded amortization amounts are adjusted when actual OID factors are
received. Market discounts and market premiums on debt securities, other than
mortgage-backed securities, are amortized to interest income over the life of
the security with a corresponding adjustment 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. 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 and capital gains
to its unitholders. Accordingly, no federal tax provisions are required. Income
distributions are declared daily and paid monthly by the Portfolios. The
characterization of distributions to unitholders for financial reporting
purposes is determined in accordance with income tax rules. Therefore, the
source of a Portfolio's distributions may be shown in the accompanying
financial statements as either from or in excess of net investment income or
net realized gains on investment transactions, or from paid-in capital
depending on the type of book/tax differences that may exist.
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... $23,187,578 2001 through 2008
Mortgage Securities..... 12,384,261 2002 through 2008
</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.
28
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
August 31, 2000
2. Summary of Significant Accounting Policies--(Continued)
At August 31, 2000, the Portfolio's aggregate cost of portfolio securities,
gross unrealized gain on investments and gross unrealized loss on investments
for federal income tax purposes are as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Portfolio Tax Cost Gain (Loss) (Loss)
-------------------------- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
Money Market Portfolio.... $444,542,518 $ -- $ -- $ --
Government Securities
Portfolio................ 544,158,743 702,053 (5,801,628) (5,099,575)
Mortgage Securities
Portfolio................ 459,302,988 1,045,642 (6,310,149) (5,264,507)
</TABLE>
E. Expenses
Expenses incurred by the Portfolios that do not specifically relate to an
individual Portfolio are generally allocated to the Portfolios based on each
Portfolio's relative average net assets for the period.
F. Repurchase Agreements
Repurchase agreements involve the purchase of securities subject to the
sellers agreement to repurchase them at a mutually agreed upon date and price.
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 by a bank custodian.
3. Agreements
Goldman Sachs Asset Management ("GSAM"), a unit of the Investment Management
Division of Goldman, Sachs & Co. ("Goldman Sachs"), serves as investment
adviser pursuant to an Advisory Agreement with the Portfolios. Under the
Advisory Agreement, GSAM, subject to the general supervision of the Portfolios'
Trustees, manages the Portfolios and provides certain administrative services.
As compensation for services rendered under the Advisory Agreement and the
assumption of the expenses related thereto, GSAM 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>
29
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
August 31, 2000
3. Agreements--(Continued)
Effective October 1, 1998, Goldman Sachs voluntarily agreed to limit its
advisory fee with respect to the Money Market Portfolio to 0.07% of average
daily net assets. This voluntary limitation may be modified or eliminated by
GSAM in the future at its discretion. For the year ended August 31, 2000, GSAM
waived advisory fees amounting to approximately $762,000.
Callahan Credit Union Financial Services Limited Partnership ("CUFSLP")
serves as the Portfolios' 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
Portfolios' Trustees, provides certain administrative services to the
Portfolios. 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 0.02% of average daily net
assets. For the year ended August 31, 2000, CUFSLP waived administration fees
amounting to approximately $611,000.
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 year ended
August 31, 2000, no expenses were required to be reimbursed by CUFSLP under
this agreement.
CUFSLP and GSAM have each voluntarily agreed to limit the other annualized
ordinary expenses (excluding advisory fees, administration fees, interest,
taxes, brokerage and extraordinary expenses) of the Government Securities
Portfolio such that CUFSLP will reimburse expenses that exceed 0.05% up to
0.10% of the Government Securities Portfolio's average daily net assets, and
GSAM will reimburse expenses that exceed 0.10% up to 0.15% of the Government
Securities Portfolio's average daily net assets. For the year ended August 31,
2000, no expenses were required to be reimbursed by CUFSLP or GSAM under this
agreement.
30
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
August 31, 2000
3. Agreements--(Continued)
In addition, the Portfolios have entered into certain expense offset
arrangements with the custodian resulting in a reduction in the Portfolios'
expenses. For the year ended August 31, 2000, custody fee reductions for Money
Market, Government Securities and Mortgage Securities Portfolios' amounted to
approximately $3,000, $5,000 and $5,000, respectively.
Callahan Financial Services, Inc. and Goldman Sachs serve as exclusive
distributors of units of the Portfolios. For the year ended August 31, 2000,
neither party received any compensation for this service. Goldman Sachs also
serves as Transfer Agent of the Portfolios for a fee.
4. Investment Transactions
The cost of purchases and proceeds of sales and maturities of long-term
securities for the Government Securities Portfolio and Mortgage Securities
Portfolio for the year ended August 31, 2000 were as follows ($ in thousands):
<TABLE>
<CAPTION>
Government Mortgage
Securities Securities
Portfolio Portfolio
---------- ----------
<S> <C> <C>
Purchases of U.S. Government and agency obligations...... $342,456 $321,187
Purchases (excluding U.S. Government and agency obliga-
tions).................................................. 10,000 49,055
Sales or maturities of U.S. Government and agency obliga-
tions................................................... 478,256 272,131
Sales or maturities (excluding U.S. Government and agency
obligations)............................................ 10,000 116,029
</TABLE>
5. Line of Credit Facility
Effective May 31, 2000, the Portfolios participate in a $350,000,000
committed, unsecured revolving line of credit facility. Prior thereto, the
Money Market Portfolio participated in a $250,000,000 uncommitted, unsecured
revolving line of credit facility and the Government Securities and Mortgage
Securities Portfolios participated in a $250,000,000 uncommitted and a
$250,000,000 committed, unsecured revolving line of credit facility. Under the
most restrictive arrangement, each Portfolio must own securities having a
market value in excess of 400% of the total bank borrowings. This facility is
to be used solely for temporary or emergency purposes. The interest rate on
borrowings is based on the Federal Funds rate. The committed facility also
requires a fee to be paid by the Portfolios based on the amount of the
commitment which has not been utilized. During the year ended August 31, 2000,
the Portfolios did not have any borrowings under any of these facilities.
31
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
August 31, 2000
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.
As of August 31, 2000, the Money Market Portfolio had an undivided interest
in the repurchase agreements in Joint Account I which equaled $68,500,000 in
principal amount. As of August 31, 2000, the repurchase agreements in this
joint account were fully collateralized by U.S. Treasury obligations.
<TABLE>
<CAPTION>
Principal Amount Interest Maturity Amortized Cost Maturity Value
Joint Account I ($ in thousands) Rate Date ($ in thousands) ($ in thousands)
--------------- ---------------- -------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
ABN/AMRO, Inc........... $ 800,000 6.61% 09/01/2000 $ 800,000 $ 800,147
Bear Stearns Companies,
Inc.................... 400,000 6.63 09/01/2000 400,000 400,074
Deutsche Bank
Securities, Inc........ 550,000 6.60 09/01/2000 550,000 550,101
Deutsche Bank
Securities, Inc........ 500,000 6.45 09/01/2000 500,000 500,090
Donaldson, Lufkin &
Jenrette, Inc.......... 1,000,000 6.62 09/01/2000 1,000,000 1,000,184
Salomon Smith Barney
Holdings, Inc. ........ 825,000 6.62 09/01/2000 825,000 825,152
UBS Warburg LLC......... 833,000 6.62 09/01/2000 833,000 833,153
UBS Warburg LLC......... 250,000 6.45 09/01/2000 250,000 250,045
---------- ----------
Total Joint Repurchase
Agreement Account I... $5,158,000 $5,158,946
========== ==========
</TABLE>
32
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
August 31, 2000
6. Joint Repurchase Agreement Accounts--(Continued)
As of August 31, 2000, the Mortgage Securities Portfolio had undivided
interests in the repurchase agreements in Joint Account II which equaled
$100,000 in principal amount. As of August 31, 2000, the repurchase agreements
in this joint account were fully collateralized by Federal Agency obligations.
<TABLE>
<CAPTION>
Amortized Maturity
Principal Amount Interest Maturity Cost Value
Joint Account II ($ in thousands) Rate Date ($ in thousands) ($ in thousands)
---------------- ---------------- -------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
ABN/AMRO, Inc. ......... $ 814,100 6.66% 09/01/2000 $ 814,100 $ 814,251
Banc of America
Securities LLC......... 900,000 6.67 09/01/2000 900,000 900,167
Barclays Capital, Inc. . 500,000 6.67 09/01/2000 500,000 500,093
Bear Stearns Companies,
Inc. .................. 300,000 6.67 09/01/2000 300,000 300,056
Chase Securities, Inc. . 450,000 6.67 09/01/2000 450,000 450,083
Donaldson, Lufkin &
Jenrette, Inc. ........ 1,000,000 6.67 09/01/2000 1,000,000 1,000,185
J.P. Morgan & Co.,
Inc. .................. 800,000 6.65 09/01/2000 800,000 800,148
Morgan Stanley Dean
Witter & Co. .......... 750,000 6.65 09/01/2000 750,000 750,139
Morgan Stanley Dean
Witter & Co. .......... 300,000 6.60 09/01/2000 300,000 300,055
UBS Warburg LLC......... 800,000 6.65 09/01/2000 800,000 800,148
---------- ----------
Total Joint Repurchase
Agreement Account II.. $6,614,100 $6,615,325
========== ==========
</TABLE>
7. Certain Reclassifications
In accordance with AICPA Statement of Position 93-2, the Government
Securities Portfolio reclassified $71,412 from paid-in capital to accumulated
net realized loss on investments. In addition, the Mortgage Securities
Portfolio reclassified $934 and $10 from paid-in capital to accumulated
undistributed net investment income and accumulated net realized loss on
investments, respectively. These reclassifications have no impact on the net
asset values of each Portfolio and are designed to present each Portfolio's
capital accounts on a tax basis.
8. Other Matters
Pursuant to an SEC exemptive order, the Money Market Portfolio may enter into
certain principal transactions, including repurchase agreements with Goldman
Sachs 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.
33
<PAGE>
TRUST FOR CREDIT UNIONS
---------------
NOTES TO FINANCIAL STATEMENTS--(Continued)
August 31, 2000
9. Change in Independent Accountants
On October 26, 1999, the Board of Trustees of the Portfolios, upon the
recommendation of the Board's audit committee, determined not to retain Arthur
Andersen LLP and approved a change of the Portfolios' independent accountants
to PricewaterhouseCoopers LLP. For the fiscal years ended August 31, 1999 and
August 31, 1998, Arthur Andersen LLP's audit reports contained no adverse
opinion or disclaimer of opinion; nor were their reports qualified or modified
as to uncertainty, audit scope, or accounting principles. Further, there were
no disagreements between the Portfolios and Arthur Andersen LLP on accounting
principles or practices, financial statement disclosure or audit scope or
procedure, which if not resolved to the satisfaction of Arthur Andersen LLP
would have caused them to make reference to the disagreement in their reports.
34
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Unitholders and Trustees of
Trust for Credit Unions:
In our opinion, the accompanying statements of assets and liabilities,
including the statements of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Trust for Credit
Unions (a Massachusetts business trust comprising the Money Market Portfolio,
the Government Securities Portfolio and the Mortgage Securities Portfolio,
collectively the "Portfolios"), at August 31, 2000, the results of its
operations, the changes in its net assets and the financial highlights for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolios' management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at August 31, 2000 by correspondence with the custodian and
brokers, provides a reasonable basis for our opinion. The statements of changes
in net assets of the Portfolios for the year ended August 31, 1999, and the
financial highlights for each of the four years in the period then ended were
audited by other independent accountants whose report dated October 13, 1999
expressed an unqualified opinion thereon.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 23, 2000
35
<PAGE>
This Annual 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 Portfolio's objectives and policies, management,
expenses and other information.
<PAGE>
[LOGO OF GOLDMAN SACHS]
TCANN00
[LOGO OF TRUST FOR CREDIT UNIONS]
Trustees
John T. Collins, Chairman
Thomas S. Condit, Vice-Chairman
Gene R. Artemenko
James C. Barr
Edgar F. Callahan
Robert M. Coen
Douglas C. Grip
Betty G. Hobbs
Gary Oakland
D. Michael Riley
Wendell A. Sebastian
Officers
Judith E. Sandberg, President
Jesse Cole, Vice President
Dan Dumont, Vice President
Charles W. Filson, Vice President
James A. Fitzpatrick, Vice President
Christopher Keller, Vice President
John M. Perlowski, Treasurer
Peter W. Fortner, Assistant Treasurer
Philip V. Giuca, Jr., Assistant Treasurer
Elizabeth Anderson, Assistant Secretary
Howard B. Surloff, Secretary
Kaysie Uniacke, Assistant Secretary
Administrator
Callahan Credit Union Financial Services, Inc.
Limited Partnership
Investment Advisor
Goldman Sachs Asset Management,
a business unit of the Investment Management Division
of Goldman, Sachs & Co.
Transfer Agent
Goldman, Sachs & Co.
Distributors
Callahan Financial Services, Inc.
Goldman, Sachs & Co.
Independent Accountants
PricewaterhouseCoopers LLP
