THE BEDFORD FAMILY
THE RBB FUND, INC.
ANNUAL INVESTMENT ADVISER'S REPORT
Economic growth continued to slow during the second quarter as the impact
from the interest rate rise during 1994 worked its way through the system. The
most recent revision to second quarter real GDP growth was 1.1%, a dramatic
change from the 5.1% experienced in the fourth quarter of 1994 and the 2.7% in
the first quarter of the year.
While the Fed is concerned about the deceleration in growth, they cannot
overlook the 100 basis point decline in interest rates at the front end of the
yield curve that has occurred in 1995 and the possibility that it has
re-stimulated the economy. A reacceleration in consumer spending could
significantly reduce inventories and lead to a resumption in manufacturing
activity. In fact, there are several indications that economic growth may be
rekindling. Factory orders, durable goods orders, retail sales and housing all
rebounded in mid-summer. Existing home sales rose 4.7% while new home sales
jumped 19.9%, the largest increase since January 1992. Lastly, consumer
confidence remains relatively high, buoyed by a soaring stock market.
The year-long rise in short-term interest rates ended in July, when the Fed
lowered the federal funds rate from 6% to 5.75%. This reversal in monetary
policy was widely anticipated and represented the Fed's belief that
"inflationary pressures have receded enough to accommodate a modest adjustment
in monetary conditions." The Fed's move also helped to flatten the short end of
the yield curve, correcting a sharply inverted position where one day
investments offered the highest yields at 6%, while six-month investments were
sometimes lower by 50 basis points or more. The Fed did not ease policy again at
its August meeting, and it's uncertain that they will do so in September. The
Fund's taxable money market portfolio extended their maturities this year to be
positioned for declining short-term interest rates.
Although the technical factors that shape the rate cycle in the short-term
municipal money market remained largely in place, there were a number of issues
over the last year that created a higher than usual degree of uncertainty during
this period. The significant issues included the potential for imposition of new
regulations by the Securities and Exchange Commission, speculation about the
possibility of a flat tax, national sales tax, or other major changes in the tax
code, and, of course, the Orange County, California debacle. All of these
factors tended to argue in favor of increased caution on the part of portfolio
managers. In terms of portfolio strategy, this translated into an emphasis on
shorter average weighted maturities. In addition, underlying and reinforcing
this cautious policy was a string of interest rate increases by the Federal
Reserve that offered little incentive to extend maturities. Currently, as the
economic indicators have turned more mixed, the extent and direction of future
Fed policy moves has become the subject of much debate in the marketplace.
Average maturities of money market funds have been increasing recently, but it
remains to be seen whether or not the Federal Reserve has successfully
engineered a soft landing for the economy.
As the year enters its final quarter, the outlook for the economy is
improving and inflation remains subdued. A return to a long-term growth rate of
2.5%, coupled with low inflation pressures, should give the Fed enough comfort
to ease policy again before the end of the year.
PNC Institutional Management Corporation
(Please dial toll-free 800-797-6706 for questions
regarding your account or contact your broker.)
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of The RBB Fund, Inc.:
We have audited the accompanying statement of net assets of the Money Market
Portfolio of The RBB Fund, Inc., as of August 31, 1995, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments held as of
August 31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Money Market Portfolio of The RBB Fund, Inc. as of August 31, 1995, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and its financial highlights for
each of the periods presented, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 16, 1995
2
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
AUGUST 31, 1995
<TABLE>
<CAPTION>
Par
(000) Value
------------ --------------
<S> <C> <C>
AGENCY OBLIGATIONS--4.4%
Student Loan Marketing Association
Variable Rate Notes (DAGGER)
5.650% 09/05/1995 .......................... $ 25,000 $ 25,000,000
5.690% 09/05/1995 .......................... 20,000 20,000,000
5.700% 09/05/1995 .......................... 10,000 10,000,000
5.710% 09/05/1995 .......................... 25,000 24,989,366
-------------
TOTAL AGENCY OBLIGATIONS
(Cost $79,989,366) ..................... 79,989,366
-------------
BANK NOTES--6.9%
Huntington National Bank of Ohio
(Huntington Bankshare Inc.)
5.760% 11/02/1995 .......................... 25,000 24,999,961
First National Bank of Boston
5.750% 11/01/1995 .......................... 30,000 30,000,000
5.630% 01/08/1996 .......................... 50,000 50,000,000
Mellon Bank
6.220% 11/01/1995 .......................... 19,500 19,500,320
-------------
TOTAL BANK NOTES
(Cost $124,500,281) .................... 124,500,281
-------------
CERTIFICATES OF DEPOSIT--7.5%
Yankee Certificates of Deposit--7.5%
ABN-Amro Bank NV
5.660% 10/11/1995 .......................... 25,000 24,842,778
Commerzbank
7.320% 01/24/1996 .......................... 13,000 13,034,170
Credit Suisse
5.630% 12/11/1995 .......................... 50,000 50,000,000
Societe Generale
5.770% 01/08/1996 .......................... 25,000 25,000,000
Westpac Banking Corp.
5.850% 06/04/1996 .......................... 25,000 25,000,000
-------------
137,876,948
-------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $137,876,948) .................... 137,876,948
-------------
COMMERCIAL PAPER--32.4%
Agricultural Services--0.8%
Golden Peanut Company
5.600% 11/08/1995 .......................... 15,000 14,841,333
-------------
</TABLE>
<TABLE>
<CAPTION>
Par
(000) Value
------------- --------------
<S> <C> <C>
Automobiles--0.3%
Ford Motor Credit Corp.
6.070% 01/08/1996 .......................... $ 5,000 $ 4,891,246
-------------
Banks--4.1%
Abbey National North America Corp.
5.620% 10/03/1995 .......................... 25,000 24,875,111
Amro N.A. Finance, Inc.
5.520% 10/02/1995 .......................... 20,000 19,904,933
6.160% 01/02/1996 .......................... 10,000 9,789,533
National City Corp.
6.180% 10/02/1995 .......................... 20,000 19,893,567
-------------
74,463,144
-------------
Books Publishing & Printing--1.2%
McGraw Hill, Inc.
5.900% 12/05/1995 .......................... 22,500 22,149,688
-------------
Chemicals & Allied Products--0.8%
U.S. Borax & Chemical Co.
5.620% 10/10/1995 .......................... 15,600 15,505,022
-------------
Finance Services--0.3%
American Express Credit Corp.
6.050% 10/30/1995 .......................... 5,000 4,950,424
-------------
Food & Kindred Products--0.2%
McCormick & Company
5.910% 09/21/1995 .......................... 4,000 3,986,867
-------------
Glass, Glassware, Pressed or Blown--0.5%
Newell Co.
5.980% 10/10/1995 .......................... 10,000 9,935,217
-------------
Guided Missiles & Space Vehicles--2.2%
Rockwell International Corp.
6.150% 09/06/1995 .......................... 40,000 39,965,833
-------------
Natural Gas Transmission--1.4%
Southern California Gas
5.560% 05/03/1996 .......................... 26,155 25,165,324
-------------
Newspaper: Publishing & Printing--0.5%
Dow Jones and Company, Inc.
5.600% 11/10/1995 .......................... 10,000 9,891,111
-------------
</TABLE>
See Accompanying Notes to Financial Statements.
3
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
Par
(000) Value
------------- --------------
<S> <C> <C>
Personal Credit Institutions--6.0%
BMW U.S. Capital Corp.
5.720% 10/23/1995 .......................... $ 50,000 $ 49,586,889
5.700% 11/01/1995 .......................... 25,000 24,758,542
5.750% 11/21/1995 .......................... 15,000 14,805,937
Toyota Motor Credit Corp.
6.120% 12/29/1995 .......................... 20,000 19,595,400
-------------
108,746,768
-------------
Pharmaceutical Preparations--5.1%
American Home Products Corp.
5.730% 11/10/1995 .......................... 33,500 33,126,754
5.740% 09/14/1995 .......................... 22,000 21,954,399
5.740% 09/18/1995 .......................... 14,800 14,759,884
Glaxo Wellcome PLC
5.710% 11/22/1995 .......................... 23,000 22,700,859
-------------
92,541,896
-------------
Plastic Mail, Synthetic Resin/rubber--3.5%
du Pont (E.I.) de Nemours & Co.
6.040% 10/03/1995 .......................... 20,000 19,892,622
6.070% 01/10/1996 .......................... 20,000 19,558,239
5.580% 07/18/1996 .......................... 25,000 23,756,125
-------------
63,206,986
-------------
Retail Department Stores--0.6%
St. Michael Finance Ltd.
5.630% 02/28/1996 .......................... 11,194 10,878,889
-------------
Security Brokers & Dealers--1.3%
Merrill Lynch & Co.
5.920% 02/02/1996 .......................... 25,000 24,366,889
-------------
Short-Term Business Credit Institutions--3.6%
Corporate Asset Funding, Inc.
6.060% 11/06/1995 .......................... 10,000 9,888,900
CXC, Inc.
6.080% 10/17/1995 .......................... 5,200 5,159,602
McKena Triangle National Corp.
5.710% 11/20/1995 .......................... 20,000 19,746,222
Sears Roebuck Acceptance Corp.
6.200% 09/11/1995 .......................... 30,000 29,948,333
-------------
64,743,057
-------------
TOTAL COMMERCIAL PAPER
(Cost $590,229,694) .................... 590,229,694
-------------
</TABLE>
<TABLE>
<CAPTION>
Par
(000) Value
------------- --------------
<S> <C> <C>
MUNICIPAL BONDS--6.4%
California--1.2%
Adventist Health Systems West Series
1988 (First Interstate Bank of
California LOC) (DAGGER)
5.900% 09/06/1995 .......................... $ 13,225 $ 13,225,000
San Bernardino County Certificate of
Participation County Center
Refinancing Project, Series 1995 (DAGGER)
5.850% 09/07/1995 .......................... 8,100 8,100,000
-------------
21,325,000
-------------
Georgia--0.1%
Richmond County IDA (Monsanto
County Project) VRDN (DAGGER)
6.270% 06/01/1996 .......................... 1,300 1,300,000
-------------
Illinois--1.0%
Baylis Group Partnership Weekly
Demand Taxable Bond Series
1992 (Societe Genrale LOC) (DAGGER)
6.050% 09/06/1995 .......................... 600 600,000
Barton Healthcare Taxable Revenue
Bonds Series 1995 (American
National Bank LOC) (DAGGER)
5.900% 09/06/1995 .......................... 13,200 13,200,000
Illinois Health Facilities Authority
Convertible VRDN (The Streeterville
Corp. Project) Series 1993-B (First
National Bank of Chicago LOC) (DAGGER)
5.900% 09/06/1995 .......................... 4,400 4,400,000
-------------
18,200,000
-------------
Kentucky--0.2%
Boone County Taxable IDR Refunding
Bonds (Square D Company Project)
Series 1994-B (Credit Lyonnais
LOC) VRDN (DAGGER)
5.850% 09/06/1995 .......................... 4,200 4,200,000
-------------
</TABLE>
See Accompanying Notes to Financial Statements.
4
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
Par
(000) Value
------------- --------------
<S> <C> <C>
Minnesota--0.3%
Fairview Hospital and Healthcare
Services Taxable Adjustable
Convertible Extendable Securities
Series 1994 (MBIA Insured) VRDN (DAGGER)
5.900% 09/07/1995 .......................... $ 5,200 $ 5,200,000
-------------
Mississippi--1.1%
Hinds County IDR Bonds VRDN (DAGGER)
5.950% 09/06/1995 .......................... 1,500 1,500,000
5.950% 09/06/1995 .......................... 2,410 2,410,000
Mississippi Business Finance Corp.
Taxable IDR Bonds VRDN (DAGGER)
5.950% 09/07/1995 .......................... 2,500 2,500,000
Mississippi Business Finance Corp.
Taxable IDR Bonds (Bryan Foods
Project) Series 1994 (Sara Lee
Corporation Guaranty) VRDN (DAGGER)
5.850% 09/06/1995 .......................... 14,000 14,000,000
-------------
20,410,000
-------------
New York--0.9%
Health Insurance Plan of Greater
New York Adjustable/Convertible
Extendable Securities 1990 B-1
(Morgan Guaranty Trust Co. LOC)
VRDN (DAGGER)
5.850% 09/06/1995 .......................... 6,800 6,800,000
Health Insurance Plan of Greater
New York Adjustable/Convertible
Extendable Securities VRDN (DAGGER)
5.850% 09/06/1995 .......................... 5,500 5,500,000
New York City (DAGGER)
6.020% 11/21/1995 .......................... 5,000 5,000,000
-------------
17,300,000
-------------
North Carolina--0.8%
Community Health Systems, Inc.
Taxable First National Bank of
North Carolina Series 1991-A (DAGGER)
6.050% 09/06/1995 .......................... 400 400,000
City of Asheville, North Carolina
Tax Corp. (DAGGER)
5.850% 09/06/1995 .......................... 13,500 13,500,000
-------------
13,900,000
-------------
</TABLE>
<TABLE>
<CAPTION>
Par
(000) Value
------------- --------------
<S> <C> <C>
Texas--0.8%
South Central Texas Industrial
Development Corp. Taxable IDR
Bonds (Rohr Industries Project)
Series 1990 (Citibank N.A. LOC) (DAGGER)
5.900% 09/06/1995 .......................... $ 14,800 $ 14,800,000
-------------
TOTAL MUNICIPAL BONDS
(Cost $116,635,000) .................... 116,635,000
-------------
TIME DEPOSITS--4.1%
Z-Laenderbank, Bank of Austria AG
5.750% 09/01/1995 .......................... 50,000 50,000,000
Huntington National Bank of Ohio
5.770% 09/08/1995 .......................... 25,000 25,000,000
-------------
TOTAL TIME DEPOSITS
(Cost $75,000,000) ..................... 75,000,000
-------------
CORPORATE OBLIGATIONS--24.1%
Automobiles--0.2%
American Honda Corp. (DAGGER)
5.975% 11/09/1995 .......................... 4,500 4,497,522
-------------
Banks--5.7%
Boatman's Bankshares of
South Missouri (DAGGER)
5.934% 11/14/1995 .......................... 5,000 5,000,000
First Union National Bank of
North Carolina (DAGGER)
5.590% 09/01/1995 .......................... 40,000 40,000,000
Morgan Guaranty Trust (DAGGER)
5.920% 09/01/1995 .......................... 50,000 49,971,598
Society Corporation
4.755% 03/11/1996 .......................... 3,300 3,271,557
Comerica Bank (DAGGER)
5.610% 09/05/1995 .......................... 5,000 4,998,980
-------------
103,242,135
-------------
Finance Lessors--3.0%
IBM Credit Corp. (DAGGER)
5.770% 09/01/1995 .......................... 5,000 4,999,736
IBM Credit Corp.
5.880% 08/08/1996 .......................... 25,000 24,997,898
6.000% 08/28/1996 .......................... 25,000 24,998,022
-------------
54,995,656
-------------
</TABLE>
See Accompanying Notes to Financial Statements.
5
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
Par
(000) Value
------------- --------------
<S> <C> <C>
Natural Gas Transmisson--0.3%
Southern California Gas
5.050% 09/01/1995 .......................... $ 5,000 $ 5,000,000
-------------
Personal Credit Institutions--1.3%
Associates Corporation of
North America
8.750% 02/01/1996 .......................... 4,500 4,547,190
General Motors Acceptance Corp.
8.750% 02/01/1996 .......................... 5,000 5,041,587
5.950% 02/23/1996 .......................... 3,700 3,686,341
8.250% 08/01/1996 .......................... 5,000 5,104,080
General Motors Acceptance Corp. (DAGGER)
6.175% 09/01/1995 .......................... 5,000 4,997,915
-------------
23,377,113
-------------
Security Brokers & Dealers--13.6%
Bear Stearns & Co., Inc. (DAGGER)
5.920% 09/01/1995 .......................... 20,000 20,000,000
5.950% 09/01/1995 .......................... 50,000 50,000,000
Goldman Sachs Group, LP (DAGGER)
6.188% 09/06/1995 .......................... 53,000 53,000,000
Lehman Brothers Holdings, Inc. (DAGGER)
6.025% 09/07/1995 .......................... 50,000 50,000,000
Merrill Lynch & Co.
4.750% 06/24/1996 .......................... 9,135 9,050,470
Merrill Lynch & Co. (DAGGER)
6.100% 09/01/1995 .......................... 20,000 20,002,991
Merrill Lynch & Co.
6.440% 05/15/1996 .......................... 15,000 15,000,000
6.050% 08/19/1996 .......................... 15,000 15,000,000
Morgan Stanley Group (DAGGER)
5.975% 01/03/1996 .......................... 15,000 15,000,000
-------------
247,053,461
-------------
TOTAL CORPORATE OBLIGATIONS
(Cost $438,165,887) .................... 438,165,887
-------------
</TABLE>
<TABLE>
<CAPTION>
Par
(000) Value
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS--14.0%
Goldman Sachs & Co.
5.850% 09/01/1995 .......................... $ 75,000 $ 75,000,000
(Agreement dated 08/31/95 to
be repurchased at $75,012,188,
collateralized by $81,381,406
Federal National Mortgage Assoc.
6.31% due 04/01/34. Market
value of collateral is $77,250,000).
Goldman Sachs & Co.
5.950% 09/01/1995 .......................... 25,000 25,000,000
(Agreement dated 08/31/95 to be
repurchased at $25,004,132,
collateralized by $23,072,000
U.S. Treasury Notes 7.875%
to 8.75% due 04/15/98 to
08/15/00. Market value of
collateral is $25,500,530).
Morgan Stanley & Co.
5.875% 09/01/1995 .......................... 150,000 150,000,000
(Agreement dated 08/31/95 to be
repurchased at $150,024,479,
collateralized by $72,370,070
Federal National Mortgage Assoc.
6.50% to 7.50% due 5/25/08 to
3/25/24 and $117,471,933
Federal Home Loan Mortgage
Corp. 0.00% to 12.50% due
6/15/00 to 3/15/24. Market
value of collateral is
$153,773,069).
PaineWebber Incorporated
5.875% 09/01/1995 .......................... 4,900 4,900,000
(Agreement dated 08/31/95 to be
repurchased at $4,900,800,
collateralized by $10,655,000
Federal National Mortgage Assoc.
Strip due 04/01/24. Market value
of collateral is $5,047,523).
-------------
TOTAL REPURCHASE AGREEMENTS
(Cost $254,900,000) .................... 254,900,000
-------------
</TABLE>
See Accompanying Notes to Financial Statements.
6
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONCLUDED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
Value
--------------
<S> <C>
TOTAL INVESTMENTS AT VALUE--99.8%
(Cost $1,817,297,176*) ................... $1,817,297,176
OTHER ASSETS IN EXCESS
OF LIABILITIES--0.2% ..................... 4,074,512
--------------
NET ASSETS (Applicable to 935,832,262 Bedford
shares, 235,665 Cash Preservation
shares, 443,649,097 Janney Montgomery
Scott shares, 55,401 RBB shares,
441,618,989 Sansom Street shares
and 800 other shares)--100.0% ............ $1,821,371,688
==============
NET ASSET VALUE, offering and
redemption price per share
($1,821,371,688 / 1,821,392,214).......... $1.00
=====
<FN>
* Also cost for Federal income tax purposes.
(DAGGER) Variable Rate Obligations -- The interest rate shown is the rate as
of August 31, 1995 and the maturity date shown is the longer of the
next interest rate readjustment date or the date the principal amount
shown can be recovered through demand.
INVESTMENT ABBREVIATIONS
VRDN ..................................................Variable Rate Demand Note
LOC ............................................................Letter of Credit
IDR...............................................Industrial Development Revenue
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
AUGUST 31, 1995
<S> <C>
INVESTMENT INCOME
Interest ............................ $ 75,047,617
------------
EXPENSES
Investment advisory fees ............ 4,864,529
Distribution fees ................... 5,212,833
Service organization fees ........... 391,361
Directors' fees ..................... 11,538
Custodian fees ...................... 219,718
Transfer agent fees ................. 1,536,138
Legal fees .......................... 66,236
Audit fees .......................... 73,717
Registration fees ................... 165,999
Insurance expense ................... 37,784
Printing expense .................... 236,808
Miscellaneous ....................... 70
------------
12,816,731
Less fees waived .................... (2,670,396)
Less expense reimbursement by advisor (12,047)
------------
TOTAL EXPENSES ................... 10,134,288
------------
NET INVESTMENT INCOME .................. 64,913,329
------------
REALIZED LOSS ON INVESTMENTS ........... (18,463)
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ..................... $ 64,894,866
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the For the
Year Ended Year Ended
August 31, 1995 August 31, 1994
--------------- ---------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income ...... $ 64,913,329 $ 32,169,184
Net loss on investments .... (18,463) (2,062)
--------------- ---------------
Net increase in net assets
resulting from operations 64,894,866 32,167,122
--------------- ---------------
Distributions to shareholders:
Dividends to shareholders from
net investment income:
Bedford shares ($.0486 and
$.0278, respectively,
per share) ............... (38,765,552) (21,525,364)
Cash Preservation shares
($.0487 and $.0278,
respectively, per share) . (11,336) (26,296)
Janney Montgomery Scott
shares ($.0112 per share
for 1995) ................ (4,784,092) --
RBB shares ($.0482 and
$.0273, respectively,
per share) ............... (2,530) (1,576)
Sansom Street shares ($.0543
and $.0334, respectively,
per share) ............... (21,349,819) (10,615,948)
Distributions to shareholders
from net realized
short-term gains:
Bedford shares ............. -- (48,280)
Cash Preservation shares ... -- (40)
Janney Montgomery Scott
shares ................... -- --
RBB shares ................. -- (5)
Sansom Street shares ....... -- (15,323)
--------------- ---------------
Total distributions to
shareholders ........... (64,913,329) (32,232,832)
--------------- ---------------
Net capital share
transactions ............... 736,630,198 110,590,287
--------------- ---------------
Total increase in net assets .. 736,611,735 110,524,577
Net Assets:
Beginning of year .......... 1,084,759,953 974,235,376
--------------- ---------------
End of year ................ $ 1,821,371,688 $ 1,084,759,953
=============== ===============
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (B)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Money Market Portfolio
-------------------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
August 31, 1995 August 31, 1994 August 31, 1993 August 31, 1992 August 31, 1991
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........... .0486 .0278 .0243 .0375 .0629
Net gains on securities (both
realized and unrealized)....... -- -- -- .0007 --
------------ ------------ ------------ ------------ ------------
Total from investment
operations.................. .0486 .0278 .0243 .0382 .0629
------------ ------------ ------------ ------------ ------------
Less distributions
Dividends (from net investment
income)........................ (.0486) (.0278) (.0243) (.0375) (.0629)
Distributions (from capital
gains)......................... -- -- -- (.0007) --
------------ ------------ ------------ ------------ ------------
Total distributions.......... (.0486) (.0278) (.0243) (.0382) (.0629)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============ ============
Total Return...................... 4.97% 2.81% 2.46% 3.89% 6.48%
Ratios /Supplemental Data
Net assets, end of year......... $935,821,424 $710,737,481 $782,153,438 $736,841,928 $747,530,400
Ratios of expenses to average
net assets..................... .96%(a) .95%(a) .95%(a) .95%(a) .92%(a)
Ratios of net investment income
to average net assets ......... 4.86% 2.78% 2.43% 3.75% 6.29%
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for the Money Market Portfolio would have been 1.17%, 1.16%, 1.19%, 1.20%
and 1.17% for the years ended August 31, 1995, 1994, 1993, 1992 and 1991,
respectively.
(b) Financial Highlights relate solely to the Bedford Class of shares within
the portfolio.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
9
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,1995
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The RBB Fund, Inc. (the "Fund") is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The Fund
was incorporated in Maryland on February 29, 1988.
The Fund has authorized capital of thirty billion shares of common stock of
which 12.2 billion shares are currently classified into sixty-one classes. Each
class represents an interest in one of seventeen investment portfolios of the
Fund, fifteen of which are currently in operation. The classes have been grouped
into fifteen separate "families", eight of which have begun investment
operations: the RBB Family, the BEA Family, the Sansom Street Family, the
Bedford Family, the Cash Preservation Family, the Janney Montgomery Scott Money
Funds, the Warburg Pincus Family, and the Bradford Family. The Bedford Family
represents interests in the four portfolios, one of which is covered in this
report.
A) SECURITY VALUATION -- Portfolio securities are valued under the
amortized cost method, which approximates current market value. Under this
method, securities are valued at cost when purchased and thereafter a
constant proportionate amortization of any discount or premium is recorded
until maturity of the security. Regular review and monitoring of the
valuation is performed in an attempt to avoid dilution or other unfair
results to shareholders. The Portfolio seeks to maintain net asset value
per share at $1.00.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security
transactions are accounted for on the trade date. The cost of investments
sold is determined by use of the specific identification method for both
financial reporting and income tax purposes. Interest income is recorded on
the accrual basis. Certain expenses, principally distribution, transfer
agency and printing, are class specific expenses and vary by class.
Expenses not directly attributable to a specific portfolio or class are
allocated based on relative net assets of each portfolio and class,
respectively.
C) DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment
income are declared daily and paid monthly. Any net realized capital gains
are distributed at least annually. Income distributions and capital gain
distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principals.
D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes
as it is the Fund's intention to have each portfolio continue to qualify
for and elect the tax treatment applicable to regulated investment
companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it
from Federal income and excise taxes.
E) REPURCHASE AGREEMENTS -- Money market instruments may be
purchased subject to the seller's agreement to repurchase them at an agreed
upon date and price. The seller will be required on a daily basis to
maintain the value of the securities subject to the agreement at not less
than the repurchase price. The agreements are conditioned upon the
collateral being deposited under the Federal Reserve book-entry system or
with the Fund's custodian or a third party sub-custodian.
10
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31,1995
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to Investment Advisory Agreements, PNC Institutional Management
Corporation ("PIMC"), a wholly owned subsidiary of PNC Asset Management Group,
Inc., which is in turn a wholly-owned subsidiary of PNC Bank, National
Association ("PNC Bank"), serves as investment advisor for the portfolio
described herein. PNC Bank serves as the sub-advisor for the Money Market
Portfolio.
For its advisory services, PIMC is entitled to receive the following fees,
computed daily and payable monthly based on the portfolio's average daily net
assets:
.45% of first $250 million of net assets;
.40% of next $250 million of net assets;
.35% of net assets in excess of $500 million.
PIMC may, at its discretion, voluntarily waive all or any portion of its
advisory fee for this portfolio. For each class of shares within a respective
portfolio, the net advisory fee charged to each class is the same on a relative
basis. For the year ended August 31, 1995, advisory fees and waivers for the
investment portfolio were as follows:
Gross Net
Advisory Advisory
Fee Waiver Fee
----------- ------------ -----------
$ 4,864,529 $(2,589,832) $ 2,274,697
PNC Bank, as sub-advisor, receives a fee directly from PIMC, not the
portfolio. In addition, PNC Bank serves as custodian for the Fund's portfolios.
PFPC Inc. ("PFPC"), an indirect wholly owned subsidiary of PNC Bank Corp.,
serves as each class's transfer and dividend disbursing agent.
PFPC may, at its discretion, voluntarily waive all or any portion of its
transfer agency fee for any class of shares. For the year ended August 31, 1995,
transfer agency fees and waivers for each class of shares within the investment
portfolio were as follows:
<TABLE>
<CAPTION>
Gross Net
Transfer Agency Transfer Agency
Fee Waiver Fee
--------------- ----------- ---------------
<S> <C> <C> <C>
Bedford Class $1,329,085 $ -- $1,329,085
Cash Preservation Class 8,313 (7,540) 773
Janney Montgomery Scott Class 175,935 (65,014) 110,921
RBB Class 8,210 (8,010) 200
Sansom Street Class 14,595 -- 14,595
---------- -------- ----------
Total $1,536,138 $(80,564) $1,455,574
========== ======== ==========
</TABLE>
The Fund, on behalf of each class of shares within this investment
portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, and has entered into Distribution
Contracts with Counsellors Securities Inc. ("Counsellors"), which provide for
each class to make monthly payments, based on average net assets, to Counsellors
of up to .65% on an annualized basis for the Bedford, Cash Preservation, Janney
Montgomery Scott and RBB Classes and up to .20% on an annualized basis for the
Sansom Street Class.
11
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31,1995
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
For the year ended August 31, 1995, distribution fees for each class were
as follows:
Distribution
FEE
------------
Bedford Class $4,414,365
Cash Preservation Class 931
Janney Montgomery Scott Class 569,268
RBB Class 209
Sansom Street Class 228,060
----------
Total $5,212,833
==========
The Fund has entered into service agreements with banks affiliated with PNC
Bank who render support services to customers who are the beneficial owners of
the Sansom Street Class in consideration of the payment of .10% of the daily net
asset value of such shares. For the year ended August 31, 1995 service
organization fees were $391,361 for the Money Market Portfolio.
NOTE 3. CAPITAL SHARES
Transactions in capital shares (at $1.00 per capital share) for each year
were as follows:
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
August 31, 1995 August 31, 1994
--------------- ---------------
Value Value
--------------- ---------------
<S> <C> <C>
Shares sold:
Bedford Class $ 2,966,911,277 $ 2,789,452,640
Bradford Class -- --
Cash Preservation Class 84,527 908,824
Janney Montgomery Scott Class 855,058,809 --
RBB Class 31,504 43,426
Sansom Street Class 1,864,628,110 1,517,145,765
Shares issued in reinvestment of dividends:
Bedford Class 37,681,204 20,973,730
Bradford Class -- --
Cash Preservation Class 11,226 26,123
Janney Montgomery Scott Class 4,534,944 --
RBB Class 2,500 1,551
Sansom Street Class 16,689,941 7,714,640
Shares repurchased:
Bedford Class (2,779,499,052) (2,881,789,878)
Bradford Class -- --
Cash Preservation Class (91,268) (1,932,859)
Janney Montgomery Scott Class (415,944,656) --
RBB Class (23,917) (57,526)
Sansom Street Class (1,813,444,951) (1,341,896,149)
--------------- ---------------
Net increase $ 736,630,198 $ 110,590,287
=============== ===============
Bedford Shares authorized 1,500,000,000 1,500,000,000
=============== ===============
</TABLE>
12
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31,1995
NOTE 4. NET ASSETS
At August 31, 1995, net assets consisted of the following:
Capital paid-in:
Bedford Class $ 935,832,262
Cash Preservation Class 235,665
Janney Montgomery Scott Class 443,649,097
RBB Class 55,401
Sansom Street Class 441,618,989
Other Classes 800
Accumulated net realized gain (loss)
on investments
Bedford Class (10,838)
Cash Preservation Class (2)
Janney Montgomery Scott Class (4,498)
RBB Class --
Sansom Street Class (5,188)
--------------
$1,821,371,688
==============
NOTE 5. CAPITAL LOSS CARRYOVERS
At August 31, 1995, $20,526 capital loss carryovers were available to
offset future realized gains of which $2,062 expires in 2002 and $18,464 expires
in 2003.
13
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31,1995
NOTE 6. OTHER FINANCIAL HIGHLIGHTS
The Fund currently offers four other classes of shares representing
interest in the Money Market Portfolio: Cash Preservation, Janney Montgomery
Scott, RBB and Sansom Street. Each class is marketed to different types of
investors. Financial Highlights of the RBB and Cash Preservation classes are not
presented in this report due to their immateriality. Such information is
available in the annual reports of each respective family. The financial
highlights of certain of the other classes are as follows:
<TABLE>
<CAPTION>
THE JANNEY MONTGOMERY SCOTT FAMILY
For the Period
June 12, 1995
(Commencement of
Operations) to
August 31, 1995
---------------
<S> <C>
Net asset value, beginning of period ............. $ 1.00
------------
Income from investment operations:
Net investment income .......................... 0.0112
------------
Total from investment operations ............. 0.0112
------------
Less distributions
Dividends (from net investment income) ......... (0.0112)
------------
Total distributions .......................... (0.0112)
------------
Net asset value, end of period ................... $ 1.00
============
Total Return ..................................... 5.30%(b)
Ratios /Supplemental Data
Net assets, end of period ...................... $443,644,599
Ratios of expenses to average net assets ....... 1.00%(a)(b)
Ratios of net investment income to average
net assets .................................. 5.04%(b)
<FN>
(a) Without the waiver of advisory and transfer agent fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Money Market Portfolio would have been 1.23%
annualized for the period ended August 31, 1995.
(b) Annualized.
</FN>
</TABLE>
14
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
AUGUST 31,1995
NOTE 6. OTHER FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
THE SANSOM STREET FAMILY
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
August 31, 1995 August 31, 1994 August 31, 1993 August 31, 1992 August 31, 1991
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- -------------
Income from investment operations:
Net investment income .................... 0.0543 0.0334 0.0304 0.0435 0.0684
Net gains on securities (both realized
and unrealized) ......................... -- -- -- 0.0007 --
------------- ------------- ------------- ------------- -------------
Total from investment operations ...... 0.0543 0.0334 0.0304 0.0442 0.0684
------------- ------------- ------------- ------------- -------------
Less distributions
Dividends (from net investment income) ... (0.0543) (0.0334) (0.0304) (0.0435) (0.0684)
Distributions (from capital gains) ....... -- -- -- (0.0007) --
------------- ------------- ------------- ------------- -------------
Total distributions ................... (0.0543) (0.0334) (0.0304) (0.0442) (0.0684)
------------- ------------- ------------- ------------- -------------
Net asset value, end of year ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
Total Return ............................... 5.57% 3.39% 3.08% 4.51% 7.06%
Ratios /Supplemental Data
Net assets, end of year .................. $ 441,613,801 $ 373,745,178 $ 190,794,098 $ 228,078,764 $ 138,417,995
Ratios of expenses to average net assets . .39%(a) .39%(a) .34%(a) .35%(a) .37%(a)
Ratios of net investment income to average
net assets .............................. 5.43% 3.34% 3.04% 4.35% 6.84%
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for the Money Market Portfolio would have been .59%, .60%, .60%, .61% and
.61% for the years ended August 31, 1995, 1994, 1993, 1992 and 1991,
respectively.
</FN>
</TABLE>
15
<PAGE>
[LOGO]
VALLEY FORGE
VALLEY FORGE CAPITAL
HOLDINGS, INC.
MONEY MARKET PORTFOLIO
ANNUAL REPORT
AUGUST 31, 1995
