<PAGE> 1
AMERICAN EXPRESS
MONEY MARKET ACCOUNTS
OFFERED BY
THE RESERVE FUNDS
PRIMARY FUND
U.S. GOVERNMENT FUND
U.S. TREASURY FUND
INTERSTATE TAX-EXEMPT FUND
American Express Money Market Account is a CALIFORNIA TAX-EXEMPT FUND
cash management service offered by The Reserve CONNECTICUT TAX-EXEMPT FUND
Funds through American Enterprise Investment FLORIDA TAX-EXEMPT FUND
Services Inc., a subsidiary of American Express MASSACHUSETTS TAX-EXEMPT FUND
Financial Corporation. Shares offered are shares NEW JERSEY TAX-EXEMPT FUND
of The Reserve Funds. NEW YORK TAX-EXEMPT FUND
OHIO TAX-EXEMPT FUND
PENNSYLVANIA TAX-EXEMPT FUND
American Enterprise Investment Services Inc.
A subsidiary of American Express Financial Corporation
IDS TOWER 10
MINNEAPOLIS, MN 55440
www.americanexpress.com
(c) 1998 American Express Financial Corporation
All rights reserved.
[Recycle Logo] recycled paper with a minimum SEMI-ANNUAL REPORT
of 10% post-consumer waste NOVEMBER 30, 1998
This literature is not authorized for distribution to [AMERICAN EXPRESS LOGO]
prospective investors unless preceded or accompanied
by an appropriate current prospectus.
Distributor -- Resrv Partners, Inc.
AMEX/SEMI-ANNUAL 01/99
<PAGE> 2
THE RESERVE FUND--PRIMARY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NEGOTIABLE BANK CERTIFICATES OF DEPOSIT -- 76.36% (NOTE 1)
--------- ------------------------------------------------- --------
<C> <S> <C>
DOMESTIC -- 16.90%
$ 87,000,000 BankBoston, NA, 5.20%, 2/16/1999............................ $ 87,000,000
150,000,000 The Chase Manhattan Bank, 5.28%, 2/16/1999.................. 150,000,000
150,000,000 Chase Manhattan Bank U.S.A., Delaware, 5.20%, 2/15/1999..... 150,000,000
68,000,000 Morgan Guaranty Trust Co., N.Y., 5.26%, 2/12/1999........... 68,000,000
100,000,000 PNC Bank N.A., 4.99%, 7/27/1999(a).......................... 99,953,083
--------------
554,953,083
--------------
EURO -- 22.53%
150,000,000 Abbey National PLC, 5.20%, 2/8/1999......................... 150,000,000
150,000,000 ABN/AMRO, 5.25%, 2/12/1999.................................. 150,000,000
50,000,000 Bayerische Hypo-und Vereinsbank, 5.31, 12/9/1998............ 50,000,296
100,000,000 Bayerische Hypo-und Vereinsbank, 5.32%, 2/16/1999........... 100,002,109
150,000,000 Norddeutsche Landesbank, Girozentrale, 5.31%, 2/17/1999..... 150,003,206
140,000,000 Svenska Handelsbanken, 5.31%, 12/2/1998..................... 140,000,039
--------------
740,005,650
--------------
YANKEE -- 36.93%
50,000,000 Banque Nationale de Paris, 5.13%, 2/3/1998.................. 50,000,000
57,000,000 Banque Nationale de Paris, 5.27%, 12/7/1998................. 57,001,262
43,000,000 Banque Nationale de Paris, 5.14%, 2/26/1999................. 43,000,000
150,000,000 BHF Bank AG, 5.23%, 12/7/1998............................... 150,000,000
140,000,000 Canadian Imperial Bank of Commerce, 5.20%, 2/16/1999........ 140,000,000
150,000,000 Commerzbank AG, 5.21%, 2/5/1999............................. 150,000,000
150,000,000 Deutsche Bank, 5.25%, 2/8/1999.............................. 150,000,000
145,000,000 Dresdner Bank, 5.12%, 12/3/1998............................. 145,000,000
73,000,000 Lloyds Bank PLC, 5.31%, 2/16/1999........................... 73,000,770
110,000,000 UBS AG, 5.31%, 2/16/1999.................................... 110,002,320
145,000,000 Westdeutsche Landesbank Girozentrale, 5.12%, 12/3/1998...... 145,000,000
--------------
1,213,004,352
--------------
Total Negotiable Bank Certificates of Deposit............... 2,507,963,085
--------------
COLLATERALIZED PROMISSORY NOTES -- 13.34%(B)
150,000,000 International Nederlanden (US) Funding Corp., 5.07%,
2/26/1999................................................... 148,160,312
150,000,000 Societe Generale North America, Inc., 5.20%, 12/4/1998...... 149,935,063
140,000,000 Toronto-Dominion Holdings (U.S.A.), Inc., 5.26%,
12/2/1998................................................... 139,979,544
--------------
Total Collateralized Promissory Notes,...................... 438,074,919
--------------
REPURCHASE AGREEMENT -- 7.61%
250,000,000 Bear, Stearns & Co. Inc., 5.52%, 12/1/98 (collateralized by
$72,249,304 FGRA, $86,747,837 FGRM, $13,335,849 FNRA,
$75,293,853 FNRA and $13,066,749 FXRA, 5.00% to 7.50%, due
9/15/08 to 8/18/28)......................................... 250,000,000
--------------
TAXABLE MUNICIPAL BONDS -- 2.12%(A)
39,700,000 Florida Housing Finance Agency Housing Revenue Bonds 1993
Series A (LOC UBS AG) 4.96%, 1/1/2034....................... 39,700,000
25,100,000 Illinois Student Assistance, 4.93% (LOC Sallie Mae),
12/1/2022................................................... 25,100,000
5,000,000 New Hampshire Business Finance Authority Revenue Bonds 1992
Series B, 5.49%, 11/1/2017.................................. 5,000,000
--------------
Total Taxable Municipal Bonds............................... 69,800,000
--------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $3,264,135,014)..................... 99.43% 3,265,838,004
OTHER ASSETS, LESS LIABILITIES.............................. .57 18,722,018
------ --------------
NET ASSETS.................................................. 100.00% $3,284,560,022
====== ==============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
BASED ON 3,284,560,022 SHARES OF BENEFICIAL INTEREST $.001
PAR VALUE OUTSTANDING...................................... $1.00
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 3
THE RESERVE FUND--U.S. GOVERNMENT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- REPURCHASE AGREEMENTS -- 99.37% --------
<C> <S> <C>
$205,000,000 Bear, Stearns & Co. Inc., 4.86%, 12/1/1998 (collateralized
by $215,282 GNMA, 6.00% - 7.50%,
due from 11/15/2005 to 11/15/2028)......................... $205,000,000
268,000,000 DLJ Securities Corporation, 5.45%, 12/1/1998 (collateralized
by $276,040,619 GNMA, 6.00% - 10.00%,
due from 9/15/1999 to 9/15/2038)........................... 268,000,000
196,000,000 Prudential Securities Inc., 5.45%, 12/1/1998 (collateralized
by $201,880,000 GNMA, 6.50% - 9.00%,
due from 11/15/2011 to 11/20/2028)......................... 196,000,000
8,000,000 Prudential Securities Inc., 5.45%, 12/1/1998 (collateralized
by $8,240,000 GNMA, 6.50% - 8.00%,
due from 9/15/2011 to 11/15/2028).......................... 8,000,000
50,000,000 Lehman Brothers Inc., 5.42%, 12/1/1998 (collateralized by
$51,494,154 GNMA, 6.76% - 12.00%
due from 6/15/2000 to 11/15/2028).......................... 50,000,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $727,000,000)....................... 99.37% 727,000,000
OTHER ASSETS, LESS LIABILITIES.............................. .63 4,616,574
------ --------------
NET ASSETS.................................................. 100.00% $ 731,616,574
====== ==============
</TABLE>
<TABLE>
<C> <S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE
BASED ON 731,616,574 SHARES OF BENEFICIAL
INTEREST $.001 PAR VALUE OUTSTANDING....................... $1.00
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
THE RESERVE FUND--U.S. TREASURY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- U.S. GOVERNMENT SECURITIES -- 98.95% --------
<C> <S> <C>
U.S. TREASURY BILLS -- 90.34%
$17,000,000 3.73% - 3.98%, 12/24/1998................................... $ 16,958,147
43,700,000 4.23% - 4.30%, 1/07/1999.................................... 43,510,389
22,500,000 3.89% - 4.58%, 1/21/1999.................................... 22,361,269
24,300,000 3.88% - 4.56%, 2/04/1999.................................... 24,114,053
2,500,000 4.40%, 2/11/1999............................................ 2,478,250
31,000,000 4.48% - 5.12%, 2/18/1999.................................... 30,673,960
40,000,000 4.51%, 2/25/1999............................................ 39,573,822
27,500,000 4.42% - 4.44%, 3/04/1999.................................... 27,188,825
20,000,000 4.57%, 3/11/1999............................................ 19,750,000
20,400,000 4.53%, 4/01/1999............................................ 20,096,593
------------
Total U.S. Treasury Bills................................... 246,705,308
------------
U.S. TREASURY NOTES -- 8.61%
20,000,000 5.13%, 12/31/1998........................................... 20,001,753
3,500,000 6.25%, 3/31/1999............................................ 3,514,324
------------
Total U.S. Treasury Notes................................... 23,516,077
------------
</TABLE>
<TABLE>
<C> <S> <C>
TOTAL INVESTMENTS (COST $270,271,385)....................... 98.95% $270,221,385
OTHER ASSETS, LESS LIABILITIES.............................. 1.05 2,867,415
------ ------------
NET ASSETS.................................................. 100.00% $273,088,800
====== ============
</TABLE>
<TABLE>
<C> <S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
BASED ON 273,088,800 SHARES OF BENEFICIAL
INTEREST $.001 PAR VALUE OUTSTANDING....................... $1.00
---
---
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates reported are
those as of November 30, 1998. Securities which are payable on demand and
are collateralized by letter of credit, other bank credit agreements or
financial guaranty assurance agencies.
(b) Collateralized by bank letter of credit.
GLOSSARY
<TABLE>
<S> <C> <C>
FNRA and FXRA = Federal National Mortgage Association Adjustable Rate REMIC
FGRM = Federal Home Loan Mortgage Corp. Gold REMIC
FGRA = Federal Home Loan Mortgage Corp. Gold Adjustable Rate REMIC
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 5
RESERVE TAX-EXEMPT TRUST--CALIFORNIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 99.02% (NOTE 1)
--------- -------------------------------- --------
<C> <S> <C>
Alameda Contra Costa School Finance Authority Series A,
$ 1,500,000 2.50%, 6/1/22(a)............................................ $ 1,500,000
Alameda Contra Costa School Finance Authority Series B,
2,000,000 2.50%, 7/1/23(a)............................................ 1,900,000
Alameda Contra Costa School Finance Authority Series C,
3,400,000 2.50%, 7/1/25(a)............................................ 3,400,000
Alameda Contra Costa School Finance Authority Series D,
4,575,000 2.50%, 7/1/18(a)............................................ 4,575,000
250,000 Anaheim COP, 2.60%, 8/1/19(a)............................... 250,000
California CDA for N. Cal. Retired Officers Community,
4,300,000 3.20%, 6/7/26(a)............................................ 4,300,000
2,000,000 California EDA for ISO Corp., Series B, 3.20%, 4/1/08(a).... 2,000,000
600,000 California EDA for ISO Corp., Series D, 3.25%, 4/1/08(a).... 600,000
California PCR for Pacific Gas and Electric, A, 3.25%,
2,000,000 12/1/18..................................................... 2,000,000
California PCR for Pacific Gas and Electric, F, 3.25%,
10,275,000 11/1/26..................................................... 10,275,000
5,000,000 California RAN, 4.00%, 6/30/99.............................. 5,023,970
California Modesto Santa Clara Redding Public Power, 2.65%,
300,000 7/1/22(a)................................................... 300,000
California School Cash Reserve Program, GOB, 4.50%,
2,000,000 7/2/99...................................................... 2,008,543
1,500,000 Elk Grove USD Tran., 4.50%, 6/30/99......................... 1,507,530
Foothill/Eastern Trans. Toll Road Bonds, Series 95C, 2.55%,
1,000,000 1/2/35(a)................................................... 1,000,000
Foothill/Eastern Transportation Toll Road Revenue Bonds,
500,000 2.60%, 1/2/35(a)............................................ 500,000
Fremont Public Finance Authority for Family Resource Center,
1,500,000 2.55%, 8/1/28(a)............................................ 1,500,000
Grand Terrace HFA CRA for Mt. Vernon Villas, 4.70%, 12/1/11
5,300,000 (a)......................................................... 5,300,000
1,500,000 Hemet MHR for Sunwest Resort Village, 2.80%, 7/1/06(a)...... 1,500,000
Irvine Improvement Bond Assessment District 85, 2.50%,
1,800,000 9/2/11(a)................................................... 1,800,000
Irvine Public Finance Authority for Infrastructure Project,
1,900,000 2.50%, 11/1/10(a)........................................... 1,900,000
1,000,000 Irvine Ranch Water District Series A, 3.10%, 5/1/09(a)...... 1,000,000
1,100,000 Irvine Ranch Water District Series B, 3.10%, 10/1/04(a)..... 1,100,000
2,000,000 Irvine Ranch Water District Series B, 3.10%, 10/1/09(a)..... 2,000,000
Irvine Ranch Water District Election, #282, 3.10%,
1,900,000 11/15/13(a)................................................. 1,900,000
Irvine Ranch Water District, Cons. Impt. Districts 3.10%,
2,000,000 6/1/15(a)................................................... 2,000,000
Lancaster MHR for Westwood Park Apartments 1985, 2.55%,
500,000 12/1/07(a).................................................. 500,000
400,000 Los Angeles CRA for Baldwin Hills, 2.60%, 12/1/14(a)........ 400,000
Los Angeles CRA for Promenade Towers Series 1989, 2.65%,
3,095,000 4/1/09(a)................................................... 3,095,000
5,890,000 Los Angeles Custodial Receipts, 3.24%, 7/1/05(a)............ 5,890,000
3,500,000 Los Angeles Department of Water, COP, 3.00%, 3/8/99......... 3,500,000
Los Angeles IDA for International Airport Authority, 3.25%,
1,300,000 12/1/25(a).................................................. 1,300,000
1,000,000 Los Angeles IDA for Wastewater Project, 7.00%, 6/1/21(a).... 1,035,347
Los Angeles Multi Family Mortgage for Valencia Village
900,000 Project C, 2.50%, 10/1/14................................... 900,000
2,500,000 Millbrae School District TRAN, 3.75%, 6/30/99............... 2,502,087
Orange County Apartment Development Revenue Bonds Issue A of
1,000,000 1991, the Lakes Project 2.75%, 12/1/06(a)................... 1,000,000
Orange County HFA for Lantern Pines Apartments, 2.55%,
1,500,000 12/1/27(a).................................................. 1,500,000
Orange County Sanitation District, Series C 3.20%,
2,700,000 8/1/17(a)................................................... 2,700,000
Orange County Water District, 1990 Project B, 3.00%,
1,100,000 8/15/15(a).................................................. 1,100,000
Pasadena COP for Rose Bowl Improvement Project, 2.95%,
600,000 12/1/11(a).................................................. 600,000
Pico Rivera CRA for Rainer Fund Crossroads Plaza Project,
700,000 2.70%, 12/1/10(a)........................................... 700,000
3,000,000 Puerto Rico COP, 2.80% 12/17/98............................. 3,000,000
Redlands COP for Water Treatment Facility, 2.70%,
930,000 9/1/15(a)................................................... 930,000
Redondo Beach for MHR for McCandless Senior Housing Proj.,
2,000,000 2.95%, 12/1/25(a)........................................... 2,000,000
1,000,000 Sacramento GOB, 4.00%, 2/1/99............................... 1,000,856
4,000,000 San Bernadino MHR for Alta Park Project, 4.70%, 5/1/06(a)... 4,000,000
San Bernadino IDA for Gate City Beverage, 4.10%,
200,000 3/1/05(a)................................................... 200,000
San Francisco MHR for Bayside Village Series 85D, 4.60%,
5,700,000 12/1/05(a).................................................. 5,700,000
San Francisco HFR for Yerba Buena Gardens, 2.60%,
575,000 9/1/06(a)................................................... 575,000
3,000,000 San Jose HFR Redevelopment Agency, 2.50%, 7/1/26(a)......... 3,000,000
Santa Clara Electric Revenue Bonds Series 85C, 2.65%,
300,000 7/1/10(a)................................................... 300,000
100,000 Santa Clara El Camino Hospital District, 2.50%, 8/1/15(a)... 100,000
Santa Clara El Camino Hospital District, Series A, 2.50%,
500,000 8/1/15(a)................................................... 500,000
Southern California Public Power Authority, GOB, 5.30%,
1,000,000 7/1/99...................................................... 1,009,022
Southern California Public Power Authority, Southern
1,600,000 Transmission B, 2.65%, 7/1/23............................... 1,600,000
</TABLE>
5
<PAGE> 6
RESERVE TAX-EXEMPT TRUST--CALIFORNIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
$ 925,000 Turlock Irrigation District Series 88A, 2.50%, 1/1/14(a).... $ 925,000
2,200,000 Union City MHR for Skylark Apartments, 2.500%, 11/1/07(a)... 2,200,000
Upland MHR CRA Bonds, Series A for Northwood Project, 2.85%,
150,000 3/1/14(a)................................................... 150,000
Upland MHR CRA Bonds Series B for Northwood Project, 2.85%,
2,100,000 3/1/14(a)................................................... 2,100,000
Upland Community Redevelopment Agency GOB, 3.10%,
485,000 9/1/99(a)................................................... 485,000
5,000,000 Watereuse Finance Authority, 2.60%, 5/1/28.................. 5,000,000
------------
TOTAL INVESTMENTS (COST $122,684,520)....................... 99.02% 122,637,355
OTHER ASSETS, LESS LIABILITIES.............................. .98 1,211,609
------- ------------
NET ASSETS.................................................. 100.00% $123,848,964
======= ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED ON
123,848,964 SHARES OF BENEFICIAL INTEREST, $.001 PAR VALUE
OUTSTANDING............................................................ $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
RESERVE TAX-EXEMPT TRUST--CONNECTICUT TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 95.79% (NOTE 1)
--------- -------------------------------- --------
<C> <S> <C>
$ 1,400,000 Connecticut DAI for Allen Group Inc., 3.25%, 2/1/13 (a)..... $ 1,400,000
Connecticut DAI for Conco Medical Co. Project Series 85,
700,000 3.00%, 11/1/05 (a).......................................... 700,000
Connecticut DAI for General Accident Insurance Co., 3.80%,
1,700,000 12/1/13 (a)................................................. 1,700,000
Connecticut DAI for Regional YMCA Project, 3.20%, 6/1/08
487,000 (a)......................................................... 487,000
Connecticut DAI for Trudy Corporation Project, 3.60%, 9/1/09
500,000 (a)......................................................... 500,000
Connecticut DAI for Zotos International Project, 4.35%,
1,450,000 12/1/04 (a)................................................. 1,450,000
Connecticut Development Authority Health Care Revenue Bonds
1,865,000 for Independent Living Project, 2.90%, 7/1/15 (a)........... 1,865,000
Connecticut Development Authority PCR for Central Vermont
1,400,000 Public Service, 2.95%, 12/1/15 (a).......................... 1,400,000
Connecticut HEF for Bradley Health Care Series B, 2.70%,
1,000,000 7/1/29 (a).................................................. 1,000,000
Connecticut HEF for Charlotte Hospital Series B, 2.90%,
1,500,000 7/1/13 (a).................................................. 1,500,000
Connecticut HEF for Kingswood Oxford School Issue Series A,
350,000 3.20%, 2/1/09 (a)........................................... 350,000
Connecticut HEF for New Haven Hospital RAW Series E, 3.70%,
365,000 6/1/12 (a).................................................. 365,000
Connecticut HEF for Pomfret School Issue Series A, 3.05%,
1,200,000 7/1/24 (a).................................................. 1,200,000
Connecticut HEF for Yale University Series T, 2.90%, 7/1/29
1,000,000 (a)......................................................... 1,000,000
1,000,000 Connecticut State GOB Series C, 3.50%, 10/15/99............. 1,004,249
Connecticut State GOB Economic Recovery Notes, 4.75%,
1,900,000 6/15/99..................................................... 1,910,409
Conn. Special Asmt Unemployment Comp Series A, 4.50%,
1,650,000 5/15/99..................................................... 1,656,453
Connecticut State HEFA for Quinnipiac College Series B,
500,000 7.25%, 7/1/19............................................... 519,655
Connecticut State HEFA for Yale University Series T-2,
1,000,000 2.80%, 7/1/29............................................... 1,000,000
1,980,000 Connecticut State GOB Series 97B, 2.85%, 5/15/14 (a)........ 1,980,000
Conn. Special Asmt Unemployment Comp RAW Series C, 3.60%,
1,500,000 11/15/01 (a)................................................ 1,500,000
Connecticut State Special Tax Transportation Infrastructure
2,000,000 Second Lien Revenue Bonds, 3.10%, 12/1/10 (a)............... 2,000,000
Hartford Redev. Agency MHR for Underwood Towers, 3.05%,
2,100,000 6/1/20 (a).................................................. 2,100,000
1,500,000 Ledyard BAN, 4%, 2/4/99..................................... 1,501,020
1,200,000 Puerto Rico Electric Power Authority, 3.03%, 7/1/22 (a)..... 1,200,000
Puerto Rico Government Development Bank COP, 2.95%,
3,400,000 12/10/98.................................................... 3,400,000
Puerto Rico Highway & Transportation Series A, 2.75%,
500,000 7/1/28...................................................... 500,000
Puerto Rico Ind. Med. and Envir. RAW for Reynolds Metals,
1,200,000 3.60%, 9/1/13 (a)........................................... 1,200,000
1,000,000 Shelton BAN, 3.75%, 12/8/98................................. 1,000,022
500,000 Shelton HFA for Crosby Commons Project, 3%, 1/1/11 (a)...... 500,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $37,917,154)........................ 95.79% $37,888,808
OTHER ASSETS, LESS LIABILITIES.............................. 4.21 1,665,057
------ -----------
NET ASSETS.................................................. 100.00% $39,553,865
====== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED ON
39,553,865 SHARES OF BENEFICIAL INTEREST, $.001 PAR VALUE
OUTSTANDING........................................................... $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 102.38% (NOTE 1)
--------- --------------------------------- --------
<C> <S> <C>
FLORIDA -- 75.17%
Boca Raton IDA for Parking Garage Project, 3.775%, 12/1/14
$ 1,300.000 (a)......................................................... $ 1,300.000
Brevard County MHR for Malabar Lakes Proj., 3.30%,
925,000 12/1/10..................................................... 925,000
Broward MHR for Welleby Apartment Project Series 1984,
800,000 3.10%, 12/1/06 (a).......................................... 800,000
Collier IDA HFA for Retirement Rental Housing Revenue Bonds,
300,000 3.20%, 12/1/15 (a).......................................... 300,000
Dade County for HFA -- Miami Children's Hospital, 3.85%,
200,000 3/1/25...................................................... 200,000
Dade IDA for Aviation Authority Facilities Series 84A,
100,000 3.15%, 10/1/09 (a).......................................... 100,000
1,000,000 Dade IDA for Dolphin Stadium Project, 2.90%, 1/1/16 (a)..... 1,000,000
Dade HFA Rev. Bonds for Miami Children's Hospital, 3%,
200,000 9/1/25 (a).................................................. 200,000
Duval HFA for Lakes of Mayport Apartment Project, 3.15%,
900,000 12/1/09 (a)................................................. 900,000
Florida Local Gov. Authority for Lake Wales Medical Center,
1,500,000 3.10%, 3/1/15 (a)........................................... 1,500,000
100,000 Florida Gulf Coast GOB, Series 97, 3.10%, 8/1/27 (a)........ 100,000
500,000 Florida Inland GOB, 4.25%, 1/1/99........................... 500,268
Gulf Breeze IDA Revenue Bonds Series 85, 3.10%, 12/1/15
305,000 (a)......................................................... 305,000
Jacksonville IDR for Coastal Islands Project, 3.35%, 8/1/08
130,000 (a)......................................................... 130,000
Jacksonville IDR for University Medical Center, 4.60%,
900,000 2/1/19 (a).................................................. 900,000
Manatee PCR for Florida Power and Light, 3.95%, 9/1/24
100,000 (a)......................................................... 100,000
700,000 Martin PCR for Florida Power & Light, 3.35%, 9/1/24......... 700,000
605,000 Miami-Dade County GOB, 6.00%, 11/1/99....................... 620,391
Florida State Turnpike Auth -- Turnpike Revenue Bonds,
1,015,000 7.50%, 7/1/19............................................... 1,061,104
Palm Beach PCR for Water and Sewer Project, 4.20%, 10/1/11
500,000 (a)......................................................... 500,000
100,000 Putnam PCR for Florida Power and Light, 3.35%, 9/1/24 (a)... 100,000
Port St. Lucie PCR for Florida Power and Light, 3.45%,
200,000 1/1/11 (a).................................................. 200,000
500,000 Sea Coast RAW, 7.25%, 3/1/09 (a)............................ 514,110
200,000 Tampa Occupational License Tax Bonds, 3.15%, 10/1/18 (a).... 200,000
University of North Florida Capital Improvement Project,
300,000 3.15%, 11/1/24 (a).......................................... 300,000
Pinnellas County -- Chi Chi Rodriguez Foundation , 3.25%,
900,000 8/1/16...................................................... 900,000
Hillsborough County IDA PCR for Gannon Coal, 3,25%,
300,000 5/15/18..................................................... 300,000
Palm Beach County -- Florida Airport System, 5.50%,
200,000 10/1/99..................................................... 203,911
Palm Beach County HFA for Hospital Ser. 1985, 3.01%,
1,000,000 1/7/99...................................................... 1,000,000
-----------
15,859,784
-----------
CALIFORNIA -- 4.74%
Grand Terrace HFA Community Redevelopment Agency for Mt.
1,000,000 Vernon Villas, 4.70%, 12/1/11............................... 1,000,000
-----------
ILLINOIS -- 2.37%
Illinois HFC for Central Healthcare Corp. & Northwest Comm.
500,000 Hosp., 3.15%, 10/1/15 (a)................................... 500,000
-----------
MARYLAND -- 2.37%
Baltimore IDA for Mayor and City Counsel Project, 3.15%,
500,000 8/1/16 (a).................................................. 500,000
-----------
MISSOURI -- 2.09%
Cole IDA for Mobine Manufacturing Series 85, 4.85%, 12/1/15
440,000 (a)......................................................... 440,000
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
NEW JERSEY -- 1.42%
New Jersey EDA for Volvo of America Corp., 3.69%, 12/1/04
$ 300,000 (a)......................................................... 300,000
-----------
NEW YORK -- 2.37%
500,000 New York City GOB Series B1, 3.30%, 8/15/18................. 500,000
-----------
PENNSYLVANIA -- 7.11%
Allegheny Hospital Development Authority for St. Francis
500,000 Health Systems, 3.10%, 11/1/27.............................. 500,000
Clarion County IDA for Special Development Revenue Bonds for
500,000 Meritcare Project, Series A, 3.30%, 12/1/12................. 500,000
500,000 Emmaus General Authority Revenue Bonds, 3.15%, 3/1/24 (a)... 500,000
-----------
1,500,000
-----------
TEXAS -- 4.74%
Harris County HCF for Greater Houston Project 3.20%,
1,000,000 11/1/25..................................................... 1,000,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $21,615,847)........................ 102.38% $21,599,784
LIABILITIES, NET OF OTHER ASSETS............................ (2.38) (503,111)
------ -----------
NET ASSETS.................................................. 100.00% $21,096,673
====== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
BASED ON 21,096,673 SHARES OF BENEFICIAL INTEREST $.001 PAR
VALUE OUTSTANDING........................................... $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 102.65% (NOTE 1)
--------- --------------------------------- ------------
<C> <S> <C>
ALABAMA -- .14%
Pell City IDA for General Signal Corporation, 3.50% (a),
$ 500,000 10/1/2000.................................................. $ 500,000
------------
ARIZONA -- 4.99%
Apache IDA for Tucson Electric Power Company Series 83B,
1,500,000 3.20% (a), 12/15/2018...................................... 1,500,000
Apache IDA for Tucson Electric Power Company Series 83A,
2,000,000 3.15% (a), 12/15/2018...................................... 1,900,000
1,100,000 Arizona HFA for Pooled Loan Program, 3.20% , 10/1/2015...... 1,100,000
Pima IDA PCR for Tucson Electric Project, 3.20% (a),
5,100,000 10/1/2022.................................................. 5,100,000
Pima IDA PCR for Tucson Electric Project, 3.15%,
6,500,000 10/1/2022.................................................. 6,500,000
2,225,000 Yavapai IDA for Regional Medical Center, 3.15%, 12/1/2026... 2,225,000
------------
18,325,000
------------
CALIFORNIA -- 1.72%
1,000,000 California EDA for ISO Corp. Series B, 3.20%, 4/1/2008...... 1,000,000
California School District Cash Reserves Program, 4.50%,
2,000,000 7/2/1999................................................... 2,008,543
Grand Terrace Community Redevelopment Agency, 4.70% (a),
100,000 12/1/2011.................................................. 100,000
San Francisco MFHRB for Bayside Village Series 85D, 4.60%
3,200,000 (a), 12/1/2005............................................. 3,200,000
------------
6,308,543
------------
CONNECTICUT -- 3.37%
Connecticut HEF for Yale University Series T, 2.90%,
1,000,000 7/1/2029................................................... 1,000,000
Connecticut HEF for Sharon Hospital Issue Series A, 3.00%,
1,000,000 9/1/2029................................................... 1,000,000
Connecticut HFA for Housing Mortgage Finance Program Series
1,400,000 G, 3.05%, 5/15/2018........................................ 1,400,000
Connecticut Special Tax Obligation for Second Lien, 3/10%,
1,470,000 12/1/2010.................................................. 1,470,000
Connecticut Develop. Authority HCR for Independent Living
2,600,000 Project, 2.90% (a), 7/1/2015............................... 2,600,000
Connecticut HEF for Yale University Series T, 3.80% (a),
1,000,000 7/1/2029................................................... 1,000,000
2,500,000 Connecticut State GOB Series B, 3.85% (a), 5/15/2014........ 2,500,000
Hartford Redevelopment Agency MHR for Underwood Towers
1,400,000 Project, 3.05% (a), 6/1/2020............................... 1,400,000
------------
12,370,000
------------
DISTRICT OF COLUMBIA -- 5.91%
Washington, D.C. American University, 3.15% (a),
3,065,000 10/1/2015.................................................. 3,065,000
5,000,000 Washington, D.C. Consortium Issue, 3.60%, 7/1/2023.......... 5,000,000
Washington, D.C. Housing Finance Agency RAW, 2.85%,
2,200,000 7/1/2027................................................... 2,200,000
Washington, D.C. George Washington University, 3.20%,
10,200,000 3/1/2006................................................... 10,200,000
Washington, D.C. National Children's Center, 3.20%,
1,220,000 2/1/2020................................................... 1,220,000
------------
21,685,000
------------
</TABLE>
10
<PAGE> 11
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- (CONTINUED) (NOTE 1)
--------- ------------------------------------- ------------
<C> <S> <C>
FLORIDA -- 4.34%
Boca Raton IDA for Parking Garage Project, 3.78% (a),
$ 1,200,000 12/1/2014.................................................. $ 1,200,000
Brevard HFA for Malabar Lakes & Park Village, 3.30%,
500,000 12/1/2010.................................................. 500,000
100,000 Dade County Hospital Revenue Bonds, 3.85% (a), 9/1/2025..... 100,000
Dade County IDA for Dolphin Stadium Project Series B, 2.90%
1,000,000 (a), 1/1/2016.............................................. 1,000,000
Dade County IDA for Dolphin Stadium Project Series D, 2.90%,
4,000,000 1/1/2016................................................... 4,000,000
Florida Local Gov't Financial Authority for Lake Wells
700,000 Medical Centers, 3.10%, 3/1/2015........................... 700,000
Gulf Breeze Series 85 A Revenue Bonds, 3.10% (a),
10,000 12/1/2015.................................................. 10,000
Jacksonville Hospital Revenue Bonds for University Medical
2,100,000 Center, 4.60% (a), 2/1/2018................................ 2,100,000
Jacksonville Hospital Revenue Bonds for University Medical
3,000,000 Center, 4.60% (a), 2/1/2019................................ 3,000,000
Orange IDA for Lake Highland Prep School, 3.10%,
2,000,000 10/1/2018.................................................. 2,000,000
Pinnellas Industrial Council -- Chi Chi Rodriguez Youth
200,000 Foundation, 3.25%, 8/1/2016................................ 200,000
1,000,000 Sarasota Bay Village Project, 3.20%, 12/1/2023.............. 1,000,000
University of North Florida HEF for Capital Improvement
100,000 Project, 3.15% (a), 11/1/2024.............................. 100,000
------------
15,910,000
------------
GEORGIA -- 2.13%
Clayton County MFHRB for Rivers Edge Development, 3.25% (a),
3,925,000 8/1/2006................................................... 3,925,000
Clayton Housing Authority for Rainwood Development, 3.53% ,
2,000,000 5/1/2006................................................... 2,000,000
Elbert County Industrial Building Authority Revenue Bonds
1,800,000 for Seaboard Farms of Elberton, 3.25% (a), 7/1/2005........ 1,800,000
Hapeville IDA for Hapeville Hotel Partnership Project, 3.25%
100,000 (a), 11/1/2015............................................. 100,000
------------
7,825,000
------------
IOWA -- 2.02%
Buffalo IDA for Linwood Mining & Materials, 4.20% (a),
805,000 1/1/2000................................................... 805,000
Des Moines Methodist System Inc. -- Iowa Methodist Med.
3,000,000 Project, 3.15%, 8/1/2015................................... 3,000,000
Iowa Finance Authority Bonds for Health Care Systems Series
3,400,000 B, 3.15% (a), 7/1/2020..................................... 3,400,000
Polk County IDA for Convalescence Center Series 88, 3.45%
200,000 (a), 1/1/2011.............................................. 200,000
------------
7,405,000
------------
ILLINOIS -- 1.94%
3,000,000 Chicago MFH for Waveland Associates, 3.45%, 11/1/2010....... 3,000,000
Illinois Health Facility Authority Revolving Fund
1,600,000 Pooled -- F, 3.10%, 8/1/2015............................... 1,600,000
Illinois HFA for Community Hospital Center, 3.15% (a),
900,000 10/1/2015.................................................. 900,000
Streamwood IDA for Olde Church Centre Project, 3.25% (a),
1,635,000 12/1/2014.................................................. 1,635,000
------------
7,135,000
------------
INDIANA -- 2.82%
Indiana Muni Power Authority Revenue Bonds Series A, 3.10%
1,600,000 (a), 1/1/2018.............................................. 1,600,000
Tippecanoe County PCR for Caterpillar Inc., 3.25% (a),
8,750,000 11/1/2006.................................................. 8,750,000
------------
10,350,000
------------
KANSAS -- 1.64%
6,000,000 Olathe GO Temp Notes Series A, 4.125%, 6/1/1999............. 6,010,833
------------
KENTUCKY -- .30%
Lexington Fayette Rev Bonds for Richmond Place Associate
1,100,000 Project, 3.70% (a), 4/1/2015............................... 1,100,000
------------
</TABLE>
11
<PAGE> 12
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- (CONTINUED) (NOTE 1)
--------- ------------------------------------- ------------
<C> <S> <C>
LOUISIANA -- .95%
$ 1,500,000 Calcasieu Parish Sales Tax District 4A, 3.10%, 1/1/2000..... $ 1,500,000
Lake Charles Harbor & Terminal District -- Citgo Pete Corp.,
1,500,000 3.20%, 8/1/2007............................................ 1,500,000
Louisiana Public Facilities Authority W. Knighton Project,
500,000 3.25% (a), 9/1/2025........................................ 500,000
------------
3,500,000
------------
MARYLAND -- 1.33%
Baltimore IDA for Mayor and City Council Project, 3.15% (a),
2,000,000 8/1/2016................................................... 2,000,000
1,000,000 Baltimore Sheppard & Enoch Hospital, 3.15%, 7/1/2021........ 1,000,000
Montgomery County IDA for Info Systems and Network
400,000 Corporation, 3.40% (a), 4/1/2014........................... 400,000
Prince George's County IDA for Frank Parsons Paper Co.,
1,500,000 3.55% (a), 1/1/2013........................................ 1,500,000
------------
4,900,000
------------
MASSACHUSETTS -- 3.10%
Boston Water & Sewer Commission Rev. Bonds, 2.75%,
500,000 11/1/2024.................................................. 500,000
1,000,000 Massachusetts HEF Capital Asset Program, 2.75%, 1/1/2001.... 1,000,000
Massachusetts HEF Brigham & Women's Hospital, 3.00%,
300,000 7/1/2017................................................... 300,000
1,100,000 Massachusetts GOB Series B, 3.05% (a), 8/1/2015............. 1,100,000
Massachusetts HEF for Harvard University, 3.00% (a),
1,087,000 2/1/2016................................................... 1,087,000
Massachusetts HEF for Partners Health Care Systems, 3.00%
600,000 (a), 7/1/2027.............................................. 600,000
Massachusetts IFA for Gordon College Series 97, 3.05% (a),
1,500,000 12/1/ 2027................................................. 1,500,000
Massachusetts IFA for Governor Dummer Academy, 3.05% (a),
700,000 7/1/2026................................................... 700,000
500,000 Massachusetts IFA for Milton Academy, 3.00% (a), 3/1/2027... 500,000
Massachusetts Muni Wholesale Electric Co., 3.00% (a),
600,000 7/1/2019................................................... 600,000
3,500,000 Ware BAN, 4.00%, 12/18/1998................................. 3,500,395
------------
11,387,395
------------
MICHIGAN -- 5.10%
Bruce Hospital Finance Authority for St. Joseph B, 3.05%,
800,000 5/11/2018.................................................. 800,000
400,000 Delta EDC for Mead-Escanaba Paper E, 3.30%, 12/1/2023....... 400,000
Farmington Hills Economic Development Corp for Carrefour,
3,025,000 3.53%, 9/1/2015............................................ 3,025,000
2,895,000 Garden City Hospital Finance Authority, 3.25%, 9/1/2026..... 2,895,000
1,700,000 Grand Rapids Water Supply System, 3.05% (a), 1/1/2020....... 1,700,000
Jackson EDC for Thrifty Leoni Inc. Project, 3.53% (a),
2,700,000 12/1/2014.................................................. 2,700,000
Michigan Hospital Finance Authority St. Mary Hospital of
400,000 Linonia, 3.10%, 7/1/2017................................... 400,000
Michigan Job Development Authority for Hitachi Metals, 3.40%
700,000 (a), 1/1/2004.............................................. 700,000
Michigan Housing Development Authority Harbortown Ltd.,
2,000,000 3.53%, 6/1/2004............................................ 2,000,000
Michigan Job Development Authority for Gordon Food Service,
2,500,000 8/1/2015................................................... 2,500,000
Royal Oak HFA for William Beaumont Hospital Series L, 3.25%,
1,600,000 1/1/2027................................................... 1,600,000
------------
18,720,000
------------
MINNESOTA -- 2.37%
5,480,000 Eagan MHR for Aspen Woods, 3.30% (a), 1/1/2026.............. 5,480,000
New Brighton Refunding Bonds for Taylor Corp. Series 1988,
321,000 4.96% (a), 11/1/1999....................................... 320,545
New Hope Commercial Dev. Bonds for Nat. Beauty Project
740,000 Series 1994, 3.45% (a), 5/1/2010........................... 740,000
New Ulm Commercial Dev. Authority for Robert H. Bradley
2,140,000 Project, 3.45% (a), 10/1/2011.............................. 2,140,000
------------
8,680,545
------------
</TABLE>
12
<PAGE> 13
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- (CONTINUED) (NOTE 1)
--------- ------------------------------------- ------------
<C> <S> <C>
MISSOURI -- 1.53%
Cole IDA for Mobine Manufacturing Series 85, 4.85% (a),
$ 2,000,000 12/1/2015.................................................. $ 2,000,000
Kansas IDA Hospital Revenue for Baptist Health Series 88A,
625,000 3.15% (a), 8/1/2018........................................ 625,000
Missouri State Environmental Authority RAW Series A, 3.80%
3,000,000 (a), 6/1/2014.............................................. 3,000,000
------------
5,625,000
------------
MONTANA -- .16%
Great Falls Comm. Dev. Bonds for Liberty Development
570,000 Partners, 3.70% (a), 12/1/2007............................. 570,000
------------
NEBRASKA -- 3.20%
2,900,000 Buffalo IDR for Agrex Inc. Project, 3.70%, 2/1/2015......... 2,900,000
Nebraska EFA for Creighton University Project, 3.20% (a),
3,750,000 12/15/2012................................................. 3,750,000
5,100,000 Nuckolls IDA for Agrex Inc Project, 3.70% (a), 2/1/2015..... 5,100,000
------------
11,750,000
------------
NEW JERSEY -- 10.30%
3,100,000 Burlington BAN, 3.63%, 10/18/1999........................... 3,108,557
12,500,000 East Orange BAN, 4.37%, 7/1/1999............................ 12,526,137
1,460,000 Englewood Temp Notes, 3.70%, 7/2/1999....................... 1,460,872
4,000,000 Jersey City School Promissory Note, 4.13%, 3/5/1999......... 4,005,217
New Jersey EDA for Public Service Electric and Gas Series A,
200,000 3.00% (a), 9/1/2012........................................ 200,000
New Jersey EDA for Volvo of America Corp., 3.69% (a),
1,100,000 12/1/2004.................................................. 1,100,000
New Jersey Sports Expo Authority Series C, 3.15% (a),
1,200,000 9/1/2024................................................... 1,200,000
Port Authority of New York & New Jersey, Special Obligation
1,000,000 Rev. Bonds, 3.25%, 5/1/2019................................ 1,000,000
1,350,000 Rutgers University GOB, 7.00% (a), 5/1/2019................. 1,394,638
1,000,000 Trenton School Temporary Note, 3.70%, 3/10/1999............. 1,000,312
8,000,000 Vernon School District Temp Notes, 3.50%, 5/4/1999.......... 8,014,800
2,800,000 Vernon School District Temp Notes, 3.20%, 12/3/1999......... 2,803,248
------------
37,813,781
------------
NEW YORK -- 14.06%
4,300,000 Babylon UFSD TAN, 3.75%, 6/28/1999.......................... 4,302,847
5,000,000 Harrison CSD TAN, 3.75%, 6/30/1999.......................... 5,003,324
1,000,000 New York City GOB Series A4, 3.35% (a), 8/1/2022............ 1,000,000
1,750,000 New York City GOB Series F2, 2.90% (a), 2/15/2012........... 1,750,000
2,400,000 New York City GOB Series E5, 3.30% (a), 8/1/2018............ 2,400,000
1,700,000 New York City GOB Series E5, 3.30% (a), 8/1/2009............ 1,700,000
3,350,000 New York City GOB Series E2, 3.30% (a), 8/1/2020............ 3,350,000
5,000,000 New York City GOB Series A7, 3.30% (a), 8/1/2020............ 5,000,000
3,200,000 New York City COP, 3.20%, 12/9/1998......................... 3,200,000
2,000,000 New York City COP, 3.20%, 12/9/1998......................... 2,000,000
New York State Energy R&D Central Hudson Gas & Elec. Corp.
1,200,000 3.25%, 2/1/2029............................................ 1,200,000
New York State R&D Authority for NY Electric, 3.25%,
500,000 2/1/2029................................................... 500,000
3,234,405 North Hempstead BAN, 3.50%, 10/29/1998...................... 3,243,327
2,642,000 Oyster Bay BAN, 4.00%, 4/30/1999............................ 2,645,451
6,000,000 Riverhead CSD TAN 3.75%, 6/25/1999.......................... 6,003,565
5,000,000 Rochester BAN, 3.75%, 3/9/1999.............................. 5,002,329
3,300,000 Williamson CSD RAN, 3.70%, 6/25/1999........................ 3,301,062
------------
51,601,905
------------
NORTH DAKOTA -- .16%
600,000 Minot IDR for Finance Project, 4.20% (a), 12/1/2002......... 600,000
------------
</TABLE>
13
<PAGE> 14
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- (CONTINUED) (NOTE 1)
--------- ------------------------------------- ------------
<C> <S> <C>
OHIO -- 5.46%
Brunswick IDA for Kinder-Care Learning Centers Project
$ 325,000 Series A, 3.45% (a), 6/1/2002.............................. $ 325,000
Claremont Hospital Facilities Revenue for Mercy Health
900,000 Systems, 3.10% (a), 12/1/2021.............................. 900,000
Columbus ERD for Electric Systems Revenue Bonds, 3.30% (a),
700,000 9/1/2009................................................... 700,000
Cuyahoga IDA for Allen Group Project, 3.10% (a),
900,000 12/1/2015.................................................. 900,000
1,400,000 Cuyahoga IDA for Cleveland Clinic, 1/1/2016................. 1,400,000
900,000 Cuyahoga IDA for Edgecomb Metals Co., 3.40% (a), 9/1/2009... 900,000
Franklin County Bonds for Kinder-Care Project Series A,
1,080,000 3.45% (a), 6/1/2002........................................ 1,080,000
Franklin County Hospital Revenue for US Health Corp Series
3,500,000 A, 3.15% (a), 12/1/2021.................................... 3,440,000
Lucas County HFR for Lutheran Homes Society Project, 3.15%
900,000 (a), 11/1/2019............................................. 900,000
Mohoning Hospital Facilities Revenue for Forum Health Group
2,800,000 Series B, 3.15%(a), 12/1/2028.............................. 2,800,000
2,100,000 Ohio COP, 2.90%, 3/9/1999................................... 2,100,000
Ottawa Hospital Facilities Luther Home of Mercy Project,
1,580,000 3.30%, 10/1/2017........................................... 1,580,000
Sharonville IDA for Edgecomb Metals Inc., 3.10% (a),
1,610,000 11/1/2009.................................................. 1,610,000
Toledo Special Obligation Assessment Notes, 3.15%,
1,400,000 12/1/1998.................................................. 1,400,000
------------
20,035,000
------------
OKLAHOMA -- .95%
3,500,000 Oklahoma IDA for Christian College, 4.63% (a), 7/1/2015..... 3,500,000
------------
OREGON -- 1.61%
2,000,000 Oregon Series 73F, 3.15%, 12/1/2017......................... 2,000,000
3,900,000 Portland MFR for South Park Project, 3.10% (a), 12/1/2011... 3,900,000
------------
5,900,000
------------
PENNSYLVANIA -- 7.13%
Allegheny Hospital Dev. Auth. for Children's Hospital Series
800,000 B, 3.35% (a), 12/1/2015.................................... 800,000
Allegheny Hospital Dev. Auth. for Allegheny Hospital Series
1,400,000 B, 4.00% (a), 9/1/2010..................................... 1,400,000
Allegheny Hospital Dev. Auth. for Allegheny Hospital Series
3,000,000 B, 4.00% (a), 9/1/2010..................................... 3,000,000
Allegheny University Project Series 85, 3.00% (a),
900,000 7/1/2015................................................... 900,000
Chartier Valley IDA Bonds for 1133 Penn Ave. Series A, 3.30%
564,000 (a), 8/1/2007.............................................. 564,000
Clarion County IDA Bonds for Meritcare Project Series A,
700,000 3.30% (a), 12/1/2012....................................... 700,000
1,800,000 Dallastown Area School District GOB, 3.29% (a), 2/1/2018.... 1,800,000
Dauphin General Authority Revenue Bonds, 3.29% (a),
100,000 11/1/2017.................................................. 100,000
Delaware IDA PCR for Philadelphia Electric Company, 3.30%
400,000 (a), 8/1/2016.............................................. 400,000
Delaware Valley Finance Authority Rev. Bonds Series 85D,
3,350,000 3.05% (a), 12/1/2020....................................... 3,350,000
Delaware Valley Regional Financing Authority Revenue Bonds
1,000,000 Series B, 3.05%, 12/1/2020................................. 1,000,000
Emmaus GOB Local Government Revenue Bonds, 3.15% (a),
4,000,000 12/1/2028.................................................. 4,000,000
Northeastern HEF Wyoming Valley HCF Revenue Bonds, 3.10%
200,000 (a), 1/1/2024.............................................. 200,000
Philadelphia MHR for Harbor View Tower Project, 3.30% (a),
2,250,000 11/1/2027.................................................. 2,250,000
2,500,000 Philadelphia TRAN, 4.25%, 6/30/1999......................... 2,508,564
2,000,000 Sayre Health Care Facilities, 3.20%, 12/1/2020.............. 2,000,000
1,200,000 York General Authority Pooled Financing, 3.25%, 9/1/2026.... 1,200,000
------------
26,172,564
------------
PUERTO RICO -- .54%
Puerto Rico Electric Power Authority Series 11, 3.03% (a),
500,000 7/1/2022................................................... 500,000
Puerto Rico Highway & Transportation Authority, 2.75%,
1,500,000 7/1/2028................................................... 1,500,000
------------
2,000,000
------------
SOUTH CAROLINA -- .62%
South Carolina HFA for Waverly Place Project, 3.15% (a),
2,270,000 11/1/2007.................................................. 2,270,000
------------
</TABLE>
14
<PAGE> 15
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- (CONTINUED) (NOTE 1)
--------- ------------------------------------- ------------
<C> <S> <C>
TENNESSEE -- .34%
Chattanooga IDA for Baylor School Project, 3.20% (a),
$ 375,000 11/1/2016.................................................. $ 375,000
Franklin HEF for Franklin Health Care Center, 5.00% (a),
865,000 6/1/2005................................................... 865,000
------------
1,240,000
------------
TEXAS -- 1.58%
Harris HCF for Greater Houston Project, 3.20% (a),
1,700,000 11/1/2025.................................................. 1,700,000
Midlothian IDC for Box-Crow Cement Co. Project, 3.15%,
1,400,000 12/1/2009.................................................. 1,400,000
Texas Small Business IDC for Public Access Project, 3.20%
2,700,000 (a), 7/1/2026.............................................. 2,700,000
------------
5,800,000
------------
UTAH -- 1.85%
1,300,000 Emery County PCR for Pacificorp Project, 3.10%, 7/1/2015.... 1,300,000
Salt Lake City IDR for Parkview Plaza Project, 3.28% (a),
5,475,000 12/1/2014.................................................. 5,475,000
------------
6,775,000
------------
VIRGINIA -- 2.68%
375,000 Bristol IDA for Healthcare Center, 5.00%, 3/1/2010.......... 375,000
Capital Region Airport Commission for Richmond International
1,000,000 Airport, 3.05%, 7/1/2025................................... 1,000,000
3,960,000 Hampton MHR for Avalon at Hampton, 3.10%, 6/15/2026......... 3,960,000
Louisa IDA for Pooled Financing Municipal Bond Fund, 3.20%,
1,900,000 1/1/2020................................................... 1,900,000
Lynchburg IDA HRB for VHA Mid Atlantic States Inc., 3.60%,
1,000,000 12/1/2025.................................................. 1,000,000
Newport News MHR for Newport -- Oxford Project, 3.45%,
200,000 11/1/2006.................................................. 200,000
Waynesborough IDA for Residential Care Facilities, 3.35%,
1,400,000 12/1/2028.................................................. 1,400,000
------------
9,835,000
------------
WASHINGTON -- 2.23%
Port of Seattle IDC for Douglas Management Corporation,
3,200,000 3.35% (a), 12/1/2005....................................... 3,200,000
Washington Public Power Supply System Number 3 Rev. Ref.
5,000,000 Bonds, 3.00%, 7/1/2018..................................... 5,000,000
------------
8,200,000
------------
WISCONSIN -- 3.59%
Green Bay IDA for St. Mary Cement Company Ltd., 4.00% (a),
3,500,000 11/1/2000.................................................. 3,500,000
1,000,000 Wisconsin GOB, 6.50%, 5/1/1999.............................. 1,021,034
8,650,000 Wisconsin COP, 3.20%, 2/9/1999.............................. 8,650,000
------------
13,171,034
------------
WYOMING -- .49%
Sweetwater County IDA PCR for Pacificorp Project Series A,
1,800,000 3.05% (a), 7/1/2015........................................ 1,800,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $376,899,416)....................... 102.65% 376,771,600
OTHER ASSETS, LESS LIABILITIES.............................. (2.65) (9,730,206)
------ ------------
NET ASSETS.................................................. 100.00% $367,041,394
====== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE, BASED ON
367,041,394 SHARES OF BENEFICIAL INTEREST, $.001 PAR VALUE
OUTSTANDING......................................................... $1.00
---
---
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1998. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
15
<PAGE> 16
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)--(CONTINUED)
SECURITY TYPE ABBREVIATIONS:
<TABLE>
<S> <C> <C>
BAN -- Bond Anticipation Notes
COP -- Certificates of Participation
CSD -- Central School District
DAI -- Development Authority Industrial Development Refunding Bonds
EDA -- Economic Development Authority Revenue Bonds
EDC -- Economic Development Corporation
EFA -- Economic Finance Authority
ERD -- Energy Research and Development Authority
GOB -- General Obligation Bonds
HCF -- Health Care Facility
HCR -- Housing Corporation Revenue Bonds
HDA -- Hospital Development Authority
HAD -- Housing Development Authority
HEF -- Health and Educational Facilities Revenue Bonds
HEFA -- Health & Education Facilities Authority
HFA -- Health Facilities Authority Revenue Bonds
HFA -- Hospital Finance Authority
HFA -- Housing Finance Authority
HFDC -- Housing Finance Development Corp
HFR -- Health Facilities Revenue Bonds
HRB -- Hospital Revenue Bonds
IDA -- Industrial Development Authority Revenue Bonds
IDC -- Industrial Development Corporation Revenue Bonds
IDR -- Industrial Development Agency Revenue Bonds
IFA -- Industrial Finance Agency Revenue Bonds
MFHRB -- Multi-family Housing Revenue Bonds
MHR -- Multi-family Housing Revenue Bonds
PCR -- Pollution Control Revenue Bonds
RAN -- Revenue Anticipation Notes
RAW -- Revenue Anticipation Warrants
TRAN -- Tax & Revenue Anticipation Notes
UFSD -- Union Free School District
USD -- Unified School District Bonds
VHA -- Veterans' Hospital Administration
VHA -- Veterans' Housing Authority
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 17
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 98.24% (NOTE 1)
- --------- -------------------------------- --------
<C> <S> <C>
$ 327,000 Greenfield GOB, 5.00%, 11/15/99............................. $ 332,725
300,000 Framingham IDA for Perrini Corp., 3.35%, 9/30/05 (a)........ 300,000
Massachusetts HEF for Capital Asset Program A, 2.75%,
1,000,000 1/1/01...................................................... 1,000,000
Massachusetts HEF for Partnership Healthcare System, P1,
400,000 3.00%, 7/1/27............................................... 400,000
Massachusetts HEF for Partnership Healthcare System, P2,
1,000,000 3.00%, 7/1/27............................................... 1,000,000
1,700,000 Massachusetts HEF for Harvard University, 3.00%, 9/1/40..... 1,700,000
500,000 Massachusetts IFA for Milton Academy, 3.00%, 3/1/27......... 500,000
1,490,000 Massachusetts Turnpike Authority BAN, 5.00%, 6/11/99........ 1,503,832
Massachusetts, Municipal Wholesale Electric Series 1994 C,
900,000 3%, 7/1/19 (a).............................................. 900,000
4,215,000 Massachusetts GOB, 7.50%, 4/1/09 (a)........................ 4,352,608
900,000 Massachusetts GOB Series 97, 3.05%, 8/1/15 (a).............. 900,000
Massachusetts HEFA for Endicott College Series A, 3.80%,
500,000 10/1/18 (a)................................................. 500,000
Massachusetts HEFA for Clark University, 3.05%, 12/1/04
100,000 (a)......................................................... 100,000
Massachusetts HEFA for Boston University Series H, 3.40%,
1,000,000 12/1/15 (a)................................................. 1,000,000
Massachusetts HEFA for Hallmark Health Systems, 3.05%,
500,000 7/1/27 (a).................................................. 500,000
Massachusetts HEFA for Brigham and Women's Hospital, 3%,
1,100,000 7/1/17 (a).................................................. 1,100,000
Massachusetts HEFA for Eastern Nazarene College Series 97,
1,000,000 3.05%, 10/1/27 (a).......................................... 1,000,000
500,000 Massachusetts HEFA for Harvard University, 3%, 2/1/16 (a)... 500,000
100,000 Massachusetts HEFA for Harvard University, 3%, 8/1/17 (a)... 100,000
Massachusetts HEFA Capital Assistance Program Series G-1,
300,000 2.75%, 1/1/19 (a)........................................... 300,000
Massachusetts HEFA Capital Asset Series D, 2.95%, 1/1/35
400,000 (a)......................................................... 400,000
Massachusetts HEFA for Williams College Series E, 2.85%,
400,000 8/1/14 (a).................................................. 400,000
Massachusetts HEFA for Wellesley College Series B, 2.90%,
400,000 7/1/22 (a).................................................. 400,000
Massachusetts IDA for KRH Rolls Inc. Project Series 1988,
400,000 3.85%, 5/1/06 (a)........................................... 400,000
Massachusetts IFA for Composite Easy Day, 3.05%, 7/1/06
150,000 (a)......................................................... 140,000
500,000 Massachusetts IFA for Emerson College, 3.05%, 11/1/25 (a)... 500,000
Massachusetts IFA for Governor Dummer Academy, 3.05%, 7/1/26
800,000 (a)......................................................... 800,000
Massachusetts IFA for Holyoke Water Power Project, 2.80%,
300,000 5/1/22 (a).................................................. 300,000
1,000,000 Massachusetts IFA for Quamco Series B, 2.90%, 9/1/01 (a).... 1,000,000
Massachusetts IFA for Whitehead Bio-Medical, 3%, 7/1/26
1,000,000 (a)......................................................... 1,000,000
Massachusetts Showa Women's Institute of Boston, 3.30%,
100,000 3/15/04 (a)................................................. 100,000
1,500,000 Massachusetts Water Resource Authority, 6.50%, 4/1/28....... 1,500,000
1,040,000 Quincy GOB, 6.00%, 3/1/99................................... 1,046,036
230,000 Southborough GOB, 6.50%, 11/15/99........................... 237,021
475,000 Tewksbury GOB, 6.00%, 3/15/99............................... 478,161
500,000 Ware BAN, 4.00%, 12/18/98................................... 500,057
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $27,337,933)........................ 98.24% $27,190,440
OTHER ASSETS, LESS LIABILITIES.............................. 1.76 488,244
------ --------
NET ASSETS.................................................. 100.00% $27,678,684
------ --------
------ --------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED ON
27,678,684 SHARES OF BENEFICIAL INTEREST, $.001 PAR VALUE
OUTSTANDING........................................................... $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 18
RESERVE TAX-EXEMPT TRUST--NEW JERSEY TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 103.50% (NOTE 1)
- --------- --------------------------------- --------
<C> <S> <C>
Essex County Improvement Authority -- Children's Institute,
$3,000,000 3.15%, 2/1/20............................................... $ 3,000,000
2,000,000 Atlantic City Pooled Loan Program, 2.65%, 7/1/26 (a)........ 2,000,000
277,000 Berkley GOB, 4.40%, 4/1/99.................................. 277,579
420,000 East Rutherford GOB, 4.20%, 1/15/99......................... 420,175
2,000,000 Essex County Improvement Authority, 3.15%, 12/01/25 (a)..... 2,000,000
1,560,000 East Orange County BAN, 4.375%, 7/1/99...................... 1,563,262
700,000 New Jersey EDA for Market Transition Bonds, 5.00%, 7/1/99... 707,163
New Jersey State EFA for Princeton University Series E,
385,000 4.00%, 7/1/95............................................... 385,636
100,000 Monmouth BAN, 2.65%, 8/1/16 (a)............................. 100,000
Englewood School Qualified Temporary Notes, 3.70%,
2,000,000 7/16/99..................................................... 2,001,194
Wharton Board of Education Temporary Notes, 3.70%,
2.000,000 8/30/99..................................................... 2,005,037
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds,
1,700,000 3.20%, 12/1/27 (a).......................................... 1,700,000
New Jersey EDA for Economic Growth Bond Series F2.70%,
710,000 8/1/14 (a).................................................. 710,000
New Jersey EDA for Lawrenceville School Series B, 3.00%,
1,000,000 7/1/26 (a).................................................. 1,000,000
New Jersey EDA for Natural Gas Project Series A, 2.75%,
1,000,000 1/1/28 (a).................................................. 1,000,000
800,000 New Jersey EDA PCR for PSE&G Co., 3.00%, 9/1/12 (a)......... 800,000
New Jersey EDA for A.R.C. -- Monmouth Unit Project, 3.10%,
900,000 12/1/09 (a)................................................. 900,000
New Jersey EDA for St. James Preparatory School, 3.00%,
900,000 12/1/27 (a)................................................. 900,000
New Jersey EDA for St. Peters School Series 1995, 3.05,
1,125,000 1/1/10 (a).................................................. 1,125,000
2,200,000 New Jersey EDA for Stolthaven Proj., 3.25%, 1/15/18 (a)..... 2,200,000
New Jersey EDA for Trailer Marine Corps Project, 3.30%,
400,000 2/1/02 (a).................................................. 400,000
New Jersey EDA for Volvo of American Corp, 3.685%, 12/1/04
3,400,000 (a)......................................................... 3,400,000
New Jersey EDA for RJB Associate Project, 3.15%, 8/1/08
900,000 (a)......................................................... 900,000
1,000,000 New Jersey GOB Series C, 6.50%, 1/15/05..................... 1,018,278
New Jersey HCF Hospital Capital Asset Ser. C, 2.95%, 7/01/35
400,000 (a)......................................................... 400,000
New Jersey Sports Expo Authority Series, 3.15%, 9/01/24
1,700,000 (a)......................................................... 1,700,000
New Jersey Turnpike Authority General Series 91D, 2.90%,
3,700,000 1/01/18 (a)................................................. 3,700,000
2,000,000 Vernon Board of Education Temporary Note, 3.50%, 5/4/99..... 2,003,700
1,000,000 Vernon Board of Education Temporary Note, 3.20%, 12/3/99.... 1,001,160
Port Authority NY and NJ Special Obligation Rev. Bonds,
1,800,000 3.25%, 5/1/19 (a)........................................... 1,800,000
500,000 Rutgers University GOB, 7.00%, 5/1/99....................... 516,532
400,000 Sayerville GOB, 4.45%, 12/15/98............................. 400,082
1,675,000 Trenton School Temp Notes, 3.70%, 3/10/98................... 1,675,523
550,000 Willingboro Township GOB, 4/40%, 1/15/99.................... 550,406
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $44,300,842)........................ 103.50% $44,260,727
LIABILITIES LESS OTHER ASSET................................ (3.50) (1,494,886)
------ --------
NET ASSETS.................................................. 100.00% $42,765,841
------ --------
------ --------
NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE
BASED ON 42,765,841 SHARES OF BENEFICIAL INTEREST $.001 PAR VALUE
OUTSTANDING............................................................ $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 19
RESERVE NEW YORK TAX-EXEMPT TRUST--NEW YORK TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 99.04% (NOTE 1)
--------- -------------------------------- --------
<C> <S> <C>
$ 2,000,000 Babylon UFSD TAN, 3.75%, 6/28/99............................ $ 2,001,324
2,470,000 Bleecker HDC Terrace Apt Project S85, 3.10%, 7/1/15 (a)..... 2,420,000
800,000 Buffalo GOB Series A, 3.70%, 2/1/99......................... 800,000
3,500,000 Deer Park UFSD TAN, 4.00%, 6/25/99.......................... 3,507,635
3,000,000 Eagle Tax-Exempt Trust NYS Med Care, 3.23%, 8/15/24 (a)..... 3,000,000
2,740,000 Greece CSD RAN, 4.00%, 6/25/99.............................. 2,744,619
Guilderland IDA for North Eastern Industrial Park Series
3,500,000 1993 A, 3.10%, 12/1/08 (a).................................. 3,300,000
3,165,000 Hempstead GOB, 4.00%, 8/15/99............................... 3,185,228
4,000,000 Ithaca CSD RAN, 3.87%, 6/29/99.............................. 4,404,634
Jefferson IDA for Watertown Carthage Project, 3.50%, 12/1/12
3,500,000 (a)......................................................... 3,500,000
2,000,000 Kendall CSD TAN, 4.00%, 6/30/99............................. 2,002,779
Long Island Power Authority, NY Electric System SER 1,
3,000,000 3.00%, 5/1/33............................................... 3,000,000
Montgomery County IDA for Service Merchandise Co., 3.40%,
1,600,000 12/31/24 (a)................................................ 1,600,000
Municipal Assistance Corp. for New York City Sub Series K-1,
2,000,000 2.70%, 7/1/08............................................... 2,000,000
1,060,000 Nassau County GOB, 4.50%, 9/1/99............................ 1,071,666
5,000,000 New York City COP, 3.15%, 9/22/98........................... 5,000,000
New York City GOB Custodial Receipts Series A31, 3.29%,
4,000,000 7/2/00 (a).................................................. 4,000,000
1,000,000 New York City GOB Fiscal 1994 Series A, 3.35%, 8/1/22....... 1,000,000
1,950,000 New York City GOB Series E5, 3.30%, 8/1/15.................. 1,950,000
1,500,000 New York City GOB Series E5, 3.30%, 8/1/16.................. 1,500,000
1,000,000 New York City GOB Series B7, 3.30%, 8/15/18................. 1,000,000
2,900,000 New York City GOB Fiscal 1993 Series A, 3.30%, 8/1/21....... 2,900,000
7,600,000 New York City GOB Series B8, 2.90%, 8/15/24................. 7,600,000
1,000,000 New York City GOB Series A7, 3.30%, 8/1/20 (a).............. 925,000
New York City GOB Fiscal 1993 Series E2, 3.30%, 8/1/21
2,275,000 (a)......................................................... 2,275,000
New York City GOB Fiscal 1993 Series E4, 3.30%, 8/1/21
4,100,000 (a)......................................................... 4,100,000
11,475,000 New York City GOB Series B1, 2.90%, 8/15/24 (a)............. 11,475,000
300,000 New York City GOB Series D, 3.05%, 2/1/20 (a)............... 300,000
3,000,000 New York City GOB Series D, 3.10%, 2/1/22 (a)............... 3,000,000
5,000,000 New York City GOB Series E4, 3.30%, 8/1/22 (a).............. 5,000,000
New York City HDC Multifamily Mortgage for James Tower
5,900,000 Project, 2.85%, 7/1/05 (a).................................. 5,900,000
966,000 New York City IDC Union Foundation, 3.40%, 6/1/12........... 966,000
1,045,000 New York City IDA for Goodwill Project, 3.00%, 3/1/00 (a)... 1,045,000
New York City IDA for Stroheim & Romann, 3.05%, 12/1/15
1,500,000 (a)......................................................... 1,500,000
New York State Dormitory Authority for Public Library
1,000,000 Revenue Bonds Series 1992B, 2.75%, 7/1/22 (a)............... 1,000,000
New York State ERD for Brooklyn Union Gas, 2.85%, 12/1/20
2,000,000 (a)......................................................... 2,000,000
New York State ERD/PCR for LILCO Project Series A, 3.58%,
3,000,000 3/1/16 (a).................................................. 3,000,000
NY State HFA Service Contract Rev. Bonds Series A, 2.90%
8,700,000 3/15/27 (a)................................................. 8,700,000
New York State HFA for Normandie Court Series 91, 2.85%,
7,300,000 5/15/15 (a)................................................. 7,300,000
New York State HFA for Mt. Sinai School, 2.85%, 11/1/14
1,700,000 (a)......................................................... 1,700,000
New York State Job Development Authority Series D, 3.00%,
1,055,000 3/1/99...................................................... 1,055,000
New York State Job Development Authority Series F, 3.00%,
1,355,000 3/1/99...................................................... 1,355,000
New York State Job Development Authority Series 84E, 3.00%,
2,485,000 3/1/99...................................................... 2,485,000
New York State Local Government Assistance 1993A, 2.90%,
5,120,000 4/1/22 (a).................................................. 5,120,000
New York State Local Government Assistance Series B, 2.80%,
3,900,000 4/1/25 (a).................................................. 3,900,000
3,000,000 North Hempstead RAN, 4.00%, 10/29/98........................ 3,002,401
4,000,000 North Hempstead BAN, 3.50%, 10/28/99........................ 4,015,130
Onondaga County IDR for Edgecomb Metals Project, 3.60%,
1,100,000 11/1/09 (a)................................................. 1,100,000
Onondaga County IDR for McLane Co. Project, 3.60%, 11/1/04
3,200,000 (a)......................................................... 3,200,000
3,000,000 Oyster Bay BAN, 4.00%, 4/30/99.............................. 3,003,919
3,050,000 Penfield CSD BAN, 3.90%, 5/19/99............................ 3,052,175
4,000,000 Riverhead CSD TAN, 3.75%, 6/25/99........................... 4,002,377
5,000,000 Rochester BAN, 3.75%, 3/9/99................................ 5,002,329
Suffolk County IDR for Target Rock Corporation Revenue
4,000,000 Bonds, 2.70%, 2/1/07 (a).................................... 4,000,000
Suffolk County IDR for Satellite Transmission Systems, Inc.,
1,330,000 3.10%, 11/1/07 (a).......................................... 1,330,000
</TABLE>
19
<PAGE> 20
RESERVE NEW YORK TAX-EXEMPT TRUST--NEW YORK TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED) -- CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
Syracuse IDA for General Accident Insurance Co. Project,
$ 4,550,000 3.80%, 12/1/03 (a).......................................... 4,550,000
Yonkers IDR for Civic Revenue Bonds for Consumers Union,
1,300,000 2.85%, 7/1/19 (a)........................................... 1,300,000
Yonkers IDR for Consumers Union Facility, 2.85%, 7/1/21
4,500,000 (a)......................................................... 4,500,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $79,686,281)........................ 99.04% 179,647,216
OTHER ASSETS, LESS LIABILITIES.............................. .96 1,746,159
------ ---------
NET ASSETS.................................................. 100.00% $181,393,375
------ ---------
------ ---------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
BASED ON 181,393,375 SHARES OF BENEFICIAL INTEREST,
$.001 PAR VALUE OUTSTANDING................................. $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 21
RESERVE TAX-EXEMPT TRUST--OHIO TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 75.71% (NOTE 1)
- --------- -------------------------------- --------
<C> <S> <C>
$ 100,000 Brunswick IDA for Kinder-Care Learning Centers Project $ 100,000
Series A, 3.45% 6/1/02(a)..................................
100,000 Claremont HEF for Mercy Health Systems, 3.10% 12/1/21(a).... 100,000
200,000 Columbus ERD Electric Systems Revenue Bonds, 3.75% 200,000
9/1/09(a)..................................................
100,000 Cuyahoga IDA for Allen Group Project, 3.10% 12/1/15(a)...... 100,000
100,000 Cuyahoga HFA for Cleveland Clinic Series A, 3.15% 100,000
1/1/16(a)..................................................
100,000 Cuyahoga IDA for Edgecomb Metals Co., 3.40% 9/1/09(a)....... 100,000
195,000 Franklin County Industrial Development Refunding Revenue 195,000
Bonds for Kinder-Care Learning Centers Project Series 96A,
3.15% 12/1/21(a)...........................................
100,000 Lucas County EDA for Lutheran Home's Project, 3.15% 100,000
11/1/19(a).................................................
200,000 Mahoning County Forum Health Obligation Group, 3.15% 200,000
12/1/28(a).................................................
200,000 Port Authority of Cincinnati and Hamilton Counties for 200,000
Kenwood Office Association, 3.30% 9/1/25(a)................
200,000 Ottawa County, HFR Luther Home of Mercy 3.30%, 10/1/17...... 200,000
100,000 Toledo Special Obligation Assessment Notes, 3.15%, 100,000
12/1/98....................................................
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $1,695,000)......................... 75.71% 1,695,000
OTHER ASSETS, LESS LIABILITIES.............................. 24.29 543,921
------ ----------
NET ASSETS.................................................. 100.00% $2,238,921
====== ==========
</TABLE>
------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<C> <S> <C>
ASSETS:
Investments in securities, at value (cost $1,695,000)....... $1,695,000
Cash........................................................ 538,993
Interest receivable......................................... 4,989
----------
Total Assets................................................ 2,238,982
----------
LIABILITIES
Other payable and accrued expenses.......................... 61
----------
NET ASSETS.................................................. $2,238,921
==========
NET ASSET VALUE, offering and redemption prices per share,
based on 2,238,921 shares of beneficial interest, $.001 par
value outstanding.......................................... $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 22
RESERVE TAX-EXEMPT TRUST--PENNSYLVANIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS -- 97.92% (NOTE 1)
- --------- -------------------------------- --------
<C> <S> <C>
$ 210,000 Allegheny GOB for Presbyterian Hospital, 4.35%, 4/1/99...... $ 210,437
1,000,000 Allegheny Hospital Dev. Auth. for Allegheny Hospital Series 1,000,000
B, 4.00%, 9/1/10...........................................
700,000 Allegheny Hospital Dev. Auth., Childrens' Hospital Pitt. 700,000
Series B, 3.35%, 12/1/15...................................
600,000 Allegheny IDA for Longwood at Oakmont, 3.25%, 7/1/27(a)..... 600,000
500,000 Allegheny IDA for St. Francis Health Systems, 3.10%, 500,000
11/1/27(a).................................................
700,000 Allegheny University of Pittsburgh Project Series 85, 3.60%, 700,000
3/1/13(a)..................................................
500,000 Allegheny University Project Series 85, 3.00%, 7/1/15(a).... 500,000
1,000,000 Beaver COP, 3.20%, 1/8/99................................... 1,000,000
1,030,000 Bucks IDA for Edgecomb Metals Co., 3.70%, 10/1/09(a)........ 1,030,000
1,000,000 Chartier Valley Industrial and Commercial Development 1,000,000
Authority Revenue Bonds for 1133 Penn Ave. Associates
Project Series A, 3.30%, 10/1/09...........................
400,000 Chester IDA for Archdiocese of Philadelphia, 7/1/27......... 400,000
300,000 Clarion IDA for Meritcare Project Series A, 3.30%, 300,000
12/01/12...................................................
400,000 Dauphin General Authority Revenue Bonds, 3.29%, 400,000
11/1/17(a).................................................
1,000,000 Delaware County COP, 3.10%, 3/11/99......................... 1,000,000
1,000,000 Delaware Valley Regional Finance Authority Series 85, 3.05%, 1,000,000
12/1/20(a).................................................
100,000 Delaware County PCR for Philadelphia Electric Co., 3.30%, 100,000
8/1/16(a)..................................................
500,000 Emmaus GOB Local Government Revenue Bonds, 3.95%, 500,000
3/1/24(a)..................................................
1,000,000 Emmaus GOB Local Government Revenue Bonds, 3.15%, 12/1/28... 1,000,000
1,255,000 Mercersburg General Purpose Authority Series 97, 3.20%, 1,255,000
11/1/27(a).................................................
1,000,000 Montgomery County COP, 3.00%, 2/16/99....................... 1,000,000
800,000 Northeastern HEF Wyoming Valley HCS Revenue Bonds, 3.10%, 800,000
11/1/24....................................................
585,000 Philadelphia Higher Education for Temple University, 3.30%, 585,000
10/1/09(a).................................................
260,000 Philadelphia IDR for Educational Foreign MED Graduates, 260,123
3.90%, 6/1/99..............................................
590,000 Philadelphia MHR for Harbor View Tower Project, 3.30%, 590,000
11/1/27(a).................................................
500,000 Philadelphia TRAN, 4.25%, 6/30/99........................... 501,713
500,000 University of Pittsburgh Higher Education Capital Project 500,000
Bonds, 3.00%, 1/1/19.......................................
1,000,000 York County for Philadelphia Electric Corp., 3.30%, 1,000,000
8/1/16.....................................................
1,325,000 York County General Auth. For Pooled Financing Prog. Ser. A, 1,325,000
3.40%, 9/1/26..............................................
500,000 York County General Auth. For Pooled Financing Prog., 3.20%, 500,000
9/1/26(a)..................................................
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL FUND INVESTMENTS (COST $20,259,584)................... 97.92% 20,257,273
OTHER ASSETS, LESS LIABILITIES.............................. 2.08 430,794
------ -----------
NET ASSETS.................................................. 100.00% $20,688,067
====== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE, BASED ON
20,688,067 SHARES OF BENEFICIAL INTEREST, $.001 PAR VALUE
OUTSTANDING......................................................... $1.00
---
---
</TABLE>
22
<PAGE> 23
SECURITY TYPE ABBREVIATIONS:
<TABLE>
<S> <C> <C>
BAN = Bond Anticipation Notes
CDA = Community Development Authority
COP = Certificate of Participation
CSD = Central School District
CRA = Community Redevelopment Authority
DAI = Development Authority Industrial Development
Refunding Bonds
EDA = Economic Development Authority Revenue Bonds
EFA = Education Facilities Authority
ERD = Energy Research and Development Authority
GOB = General Obligation Bonds
HCF = Health Care Facilities Revenue Bonds
HDC = Housing Development Corporation Bonds
HEF = Health and Educational Facilities Revenue Bonds
HEFA = Health & Education Facilities Authority
HFA = (also) Housing Finance Authority
HFA = Health Facilities Authority Revenue Bonds
HFC = Hospital Finance Corp.
HFR = Housing Finance Revenue Bonds
IDA = Industrial Development Authority Revenue Bonds
IDR = Industrial Development Agency Revenue Bonds
IFA = Industrial Finance Authority
MHR = Multifamily Housing Revenue Bonds
PCR = Pollution Control Revenue Bonds
RAN = Revenue Anticipation Notes
RAW = Revenue Anticipation Warrants
TAN = Tax Anticipation Notes
TRAN = Tax & Revenue Anticipation Notes
UFSD = Union Free School District
USD = Unified School District
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1998. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 24
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
THE RESERVE FUND
----------------------------------------
U.S. U.S.
PRIMARY GOVERNMENT TREASURY
FUND FUND FUND
----------- ----------- ----------
<S> <C> <C> <C>
INTEREST INCOME (Note 1).................................... $81,432,778 $19,183,409 $6,482,710
----------- ----------- ----------
EXPENSES (Note 2)
Management fee............................................ 6,530,130 1,733,303 --
Comprehensive fee......................................... 1,017,871
Shareholder servicing, administration and general office
expenses................................................ 3,470,751 844,544 --
Distribution assistance................................... 2,660,138 631,329 226,510
Equipment expense......................................... 681,794 100,670 --
Occupancy costs........................................... 676,068 36,962 --
Professional fees......................................... 393,925 90,606 --
Stationery, printing and supplies......................... 218,583 53,391 --
Trustee fees.............................................. 21,083 5,062 --
Other..................................................... 17,192 29,514 --
----------- ----------- ----------
Total Expenses.......................................... 14,669,664 3,525,381 1,244,381
Less: expenses waived (Note 2)............................ -- -- (256,573)
----------- ----------- ----------
Net Expenses............................................ 14,669,664 3,525,381 987,808
----------- ----------- ----------
NET INVESTMENT INCOME, representing Net Increase in Net
Assets from Investment Operations......................... $66,763,114 $15,658,028 $5,494,902
=========== =========== ==========
</TABLE>
24
<PAGE> 25
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
---------------------------------------------------
CALIFORNIA CONNECTICUT FLORIDA INTERSTATE
FUND FUND FUND FUND
---------- ----------- -------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME (Note 1).................................... $1,641,131 $754,493 $305,916 $6,583,225
---------- -------- -------- ----------
EXPENSES (Note 2)
Management fee............................................ 257,780 112,082 44,026 934,893
Shareholder servicing, administration and general office
expenses................................................ 108,041 56,894 18,759 387,508
Distribution assistance (Note 3).......................... 102,192 35,107 17,090 356,454
Equipment expense......................................... 14,978 6,575 2,481 54,345
Professional fees......................................... 16,010 6,759 2,669 54,201
Occupancy costs........................................... 5,502 2,397 931 19,918
Stationery, printing and supplies......................... 5,393 2,324 896 31,587
Trustee fees.............................................. 703 335 117 2,677
Other expenses............................................ 3,328 1,691 1,082 28,204
---------- -------- -------- ----------
Total Expenses.......................................... 513,927 224,164 88,051 1,869,787
---------- -------- -------- ----------
NET INVESTMENT INCOME, REPRESENTING NET INCOME IN NET ASSETS
FROM INVESTMENT OPERATIONS................................ $1,127,204 $530,329 $217,865 $4,713,438
========== ======== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
RESERVE NEW
YORK TAX-
RESERVE TAX-EXEMPT TRUST EXEMPT TRUST
------------------------------------------------------ ------------
MASSACHUSETTS NEW JERSEY OHIO PENNSYLVANIA NEW YORK
FUND FUND FUND FUND FUND
------------- ---------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME (Note 1)................. $428,336 $716,639 $37,353 $287,408 $3,096,333
-------- -------- ------- -------- ----------
EXPENSES (Note 2)
Management fee......................... 64,915 108,315 5,608 41,887 466,306
Shareholder servicing, administration
and general office expenses.......... 49,317 47,599 3,561 17,194 222,457
Office expenses
Distribution assistance (Note 3)....... 3,220 41,122 54 16,776 161,995
Equipment expense...................... 3,795 6,369 325 2,352 27,309
Professional fees...................... 3,953 6,564 656 2,609 28,059
Occupancy costs........................ 1,398 2,316 119 856 10,016
Stationery, printing and supplies...... 1,349 2,254 116 879 9,676
Trustee fees........................... 188 306 16 115 1,330
Other expenses......................... 1,694 1,784 730 1,106 5,463
-------- -------- ------- -------- ----------
Total Expenses.................. 129,829 216,629 11,185 83,774 932,611
-------- -------- ------- -------- ----------
NET INVESTMENT INCOME, REPRESENTING NET
INCOME IN NET ASSETS FROM INVESTMENT
OPERATIONS............................. $298,507 $500,010 $26,168 $203,634 $2,163,722
======== ======== ======= ======== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 26
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
THE RESERVE FUND
----------------------------------------------------------------------------
PRIMARY FUND U.S. GOVERNMENT FUND
------------------------------------- ------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1998* MAY 31, 1998 NOVEMBER 30, 1998* MAY 31, 1998
------------------ ------------ ------------------ ------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income paid
to shareholders as
dividends (Note 1)........ $ (66,763,114) $ (115,231,501) $ (15,658,028) $ (29,697,721)
--------------- ---------------- --------------- ---------------
FROM CAPITAL SHARE
TRANSACTIONS
(at net asset value of $1.00
per share):
Net proceeds from sale of
shares.................... 6,900,672,837 11,543,024,341 1,683,839,171 3,252,798,210
Dividends reinvested........ 66,763,114 115,231,501 15,658,028 29,697,721
Cost of shares redeemed..... (6,390,495,992) (11,054,744,831) (1,620,348,247) (3,241,872,625)
--------------- ---------------- --------------- ---------------
Net increase derived from
capital share transactions and
from investment operations.... 576,939,959 603,511,011 79,148,952 40,623,306
NET ASSETS:
Beginning of period........... 2,707,620,063 2,104,109,052 652,467,622 611,844,316
--------------- ---------------- --------------- ---------------
End of period................. $ 3,284,560,022 $ 2,707,620,063 $ 731,616,574 $ 652,467,622
=============== ================ =============== ===============
<CAPTION>
THE RESERVE FUND
------------------------------------
U.S. TREASURY FUND
------------------------------------
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1998* MAY 31, 1998
------------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income paid
to shareholders as
dividends (Note 1)........ $ (5,494,902) $ (9,908,933)
------------- ---------------
FROM CAPITAL SHARE
TRANSACTIONS
(at net asset value of $1.00
per share):
Net proceeds from sale of
shares.................... 534,650,275 1,135,200,601
Dividends reinvested........ 5,494,902 9,908,933
Cost of shares redeemed..... (506,816,670) (1,074,527,046)
------------- ---------------
Net increase derived from
capital share transactions and
from investment operations.... 33,328,507 70,582,488
NET ASSETS:
Beginning of period........... 239,760,293 169,177,805
------------- ---------------
End of period................. $ 273,088,800 $ 239,760,293
============= ===============
</TABLE>
- ---------------
* Unaudited.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 27
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
---------------------------------------------------------------
CALIFORNIA FUND CONNECTICUT FUND
------------------------------ -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
1998* 1998 1998* 1998
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT
OPERATIONS:
Net investment income paid to shareholders as dividends
(Note 1)............................................... $ (1,127,204) $ (1,260,626) $ (530,329) $ (981,381)
------------- ------------- ------------ -------------
FROM CAPITAL SHARE TRANSACTIONS (at net asset value of
$1.00 per share):
Net proceeds from sale of shares......................... 438,083,016 332,373,143 90,242,774 141,307,597
Dividends reinvested..................................... 1,127,204 1,260,626 530,329 981,381
Cost of shares redeemed.................................. (382,293,968) (297,653,453) (88,005,915) (138,998,804)
------------- ------------- ------------ -------------
Net increase in net assets derived from capital share
transactions and from investment operations................ 56,916,252 35,980,316 2,767,188 3,290,174
NET ASSETS:
Beginning of period........................................ 66,932,712 30,952,396 36,786,677 33,496,503
------------- ------------- ------------ -------------
End of period.............................................. $123,848,964 $ 66,932,712 $39,553,865 $ 36,786,677
============= ============= ============ =============
</TABLE>
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
-------------------------------------------------------------------------------------------
FLORIDA FUND INTERSTATE FUND MASSACHUSETTS FUND
--------------------------- ------------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
1998* 1998 1998* 1998 1998* 1998
------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income paid to
shareholders as dividends (Note
1)............................. $ (217,865) $ (266,695) $ (4,713,438) $ (9,250,843) $ (298,507) $ (507,543)
------------ ------------ ------------- --------------- ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (at
net asset value of $1.00 per
share):
Net proceeds from sale of
shares......................... 51,187,570 99,350,457 740,895,658 1,583,012,502 34,282,194 72,967,159
Dividends reinvested............. 217,865 266,695 4,713,438 9,250,843 298,507 507,543
Cost of shares redeemed.......... (41,126,001) (92,909,297) (731,436,559) (1,545,546,354) (32,285,005) (61,126,323)
------------ ------------ ------------- --------------- ------------ ------------
Net increase in net assets derived
from capital share transactions and
from investment operations......... 10,279,434 6,707,855 14,172,537 46,716,991 2,295,696 12,348,379
NET ASSETS:
Beginning of period................ 10,817,239 4,109,384 352,868,857 306,151,866 25,382,988 13,034,609
------------ ------------ ------------- --------------- ------------ ------------
End of period...................... $21,096,673 $ 10,817,239 $367,041,394 $ 352,868,857 $27,678,684 $ 25,382,988
============ ============ ============= =============== ============ ============
</TABLE>
- ---------------
* Unaudited.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 28
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
---------------------------------------------------------------------
NEW JERSEY FUND OHIO FUND
--------------------------------- ---------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
1998* 1998 1998* 1998(A)
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income paid to
shareholders as dividends (Note
1)............................. $ (500,010) $ (991,619) $ (26,168) $ (10,949)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
(at net asset value of $1.00 per
share):
Net proceeds from sale of
shares......................... 119,084,351 234,261,239 1,850,308 4,357,301
Dividends reinvested............. 500,010 991,619 26,168 10,949
Cost of shares redeemed.......... (114,418,960) (237,104,518) (2,144,160) (1,861,645)
------------- ------------- ------------- -------------
Net increase in net assets derived
from capital share transactions and
from investment operations......... 5,165,401 (1,851,660) (267,684) 2,506,605
NET ASSETS:
Beginning of period................ 37,600,440 39,452,100 2,506,605 --
------------- ------------- ------------- -------------
End of period...................... $ 42,765,841 $ 37,600,440 $ 2,238,921 $ 2,506,605
============= ============= ============= =============
<CAPTION>
RESERVE TAX-EXEMPT TRUST
---------------------------------
PENNSYLVANIA FUND
---------------------------------
SIX MONTHS
ENDED YEAR ENDED
NOVEMBER 30, MAY 31,
1998* 1998(B)
------------ ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income paid to
shareholders as dividends (Note
1)............................. $ (203,634) $ (239,733)
------------ -------------
FROM CAPITAL SHARE TRANSACTIONS
(at net asset value of $1.00 per
share):
Net proceeds from sale of
shares......................... 33,850,248 56,580,287
Dividends reinvested............. 203,634 239,733
Cost of shares redeemed.......... (26,552,953) (43,632,882)
------------ -------------
Net increase in net assets derived
from capital share transactions and
from investment operations......... 7,500,929 13,187,138
NET ASSETS:
Beginning of period................ 13,187,138 --
------------ -------------
End of period...................... $ 20,688,067 $ 13,187,138
============ =============
</TABLE>
<TABLE>
<CAPTION>
RESERVE NEW YORK
TAX-EXEMPT TRUST
------------------------------
NEW YORK FUND
------------------------------
SIX MONTHS
ENDED YEAR ENDED
NOVEMBER 30, MAY 31,
1998* 1998
------------ ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT
OPERATIONS:
Net investment income paid to shareholders as dividends
(Note 1)............................................... $ (2,163,722) $ (4,696,211)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (at net asset value of
$1.00 per share):
Net proceeds from sale of shares......................... 355,277,979 748,322,717
Dividends reinvested..................................... 2,163,722 4,696,211
Cost of shares redeemed.................................. (347,260,565) (734,986,773)
------------- -------------
Net increase (decrease) in net assets derived from capital
share transactions and from investment operations.......... 10,181,136 18,032,155
NET ASSETS:
Beginning of period........................................ 171,212,239 153,180,084
------------- -------------
End of period.............................................. $181,393,375 $ 171,212,239
============= =============
</TABLE>
- ---------------
* Unaudited.
(a) For the period April 1, 1998 (Commencement of Operations) to May 31, 1998.
(b) For the period September 12, 1997 (Commencement of Operations) to May 31,
1998.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 29
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------
The Reserve Fund (the "Fund") the Reserve New York Tax-Exempt Trust and the
Reserve Tax-Exempt Trust (collectively, the "Trusts") are register under the
Investment Company Act of 1940 as non-diversified open-end investment
companies. The policies summarized below are in conformity with generally
accepted accounting principles.
A. The Fund are Trusts authorized shares of beneficial interest are
unlimited. The shares of Reserve Fund are divided into four series: Primary
Fund, U.S. Government Fund, U.S. Treasury Fund and Strategist Money Market
Fund. The shares of Reserve Tax-Exempt Trust are divided into nine series:
California Tax-Exempt Fund, Connecticut Tax-Exempt Fund, Florida Tax-Exempt
Fund, Interstate Tax-Exempt Fund, Massachusetts Tax-Exempt Fund, Michigan
Tax-Exempt Fund, New Jersey Tax-Exempt Fund, Ohio Tax-Exempt Fund and
Pennsylvania Tax-Exempt Fund. Each series mentioned above and the New
Tax-Exempt Trust shall hereafter be called the "Funds". These financial
statements and notes apply to all Funds mentioned above except Strategist
Money Market Fund and Michigan Tax-Exempt Fund.
B. Securities are valued at amortized cost, which approximates market value.
The amortized cost method values a security at cost, at the time of
purchase, and thereafter assumes a constant amortization of any discount or
premium, irrespective of intervening changes in interest rates or market
values. Pursuant to Rule 2a-7, for the purpose of computing the
average-weighted life to maturity, floating rate instruments in which the
Funds may invest, will be deemed to be: (1) the notice period require before
the Funds are entitled to receive payment of principal or, (2) the period
remaining until the instrument's next interest rate adjustment.
C. It is the Fund and each Trust's policy to comply with Subchapter M of the
Internal Revenue Code and to distribute all of its taxable income to its
shareholders. Therefore, no Federal income tax provision is required.
D. Security transactions are recorded on a trade date basis; interest income
is accrued daily. Net investment income is distributed to shareholders daily
and automatically invested in additional Fund shares.
E. Expenses are allocated based on a Fund's net assets or number of
shareholder accounts. Those expenses recognized as directly attributable to
a specific Fund are charged to that Fund directly.
F. Each Fund may enter into repurchase agreements with financial
institutions and securities dealer who are deemed credit-worthy pursuant to
guidelines established by the Funds' Board of Trustees. The Funds'
Investment Adviser has established procedures intended to provide that all
repurchase agreements are at least 100% collateralized as to principal and
interest. However, in the event of default or bankruptcy by the seller,
realization and/or retention of the collateral may be subject to legal
proceedings. The Funds' custodian holds the underlying securities subject to
repurchase agreements.
(2) MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
---------------------------------------------------------
Pursuant to an Investment Management Agreement (the "Agreement") between
Reserve Management Company, Inc. ("RMCI") and each Fund, RMCI serves as the
Funds' Investment Adviser subject to the direction of the Board of Trustees.
Under the Agreement, RMCI is responsible for the supervision of the
day-to-day operations of each Fund. RMCI manages the Funds' investments,
effects purchases and sales thereof, and absorbs certain promotional
expenses. For its services as Investment Adviser, RMCI receives a management
fee from each Fund, except U.S. Treasury Fund, calculated at a annual rate
of .50% of the first $500 million, .475% of the next $500 million, .45% of
the next $500 million, .425% of the next $500 million and .40% of any excess
over $2 billion of each Fund's average daily net assets. For its services as
Investment Adviser to U.S. Treasury Fund, RMCI receives a comprehensive fee
calculated at an annual rate of .80% of the Fund's average daily net assets.
Under the current Agreement, each Fund, except U.S. Treasury Fund,
reimburses RMCI for expenditures made by RMCI on behalf of the Funds. During
the six months ended November 30, 1998, RMCI was reimbursed the following
amounts:
<TABLE>
<S> <C> <C> <C>
Primary Fund $5,479,396 Massachusetts $ 61,694
U.S. Government Fund 1,160,749 New Jersey 61,192
California 153,955 New York 304,310
Connecticut 76,975 Ohio 5,523
Florida 26,935 Pennsylvania 25,111
Interstate 578,440
</TABLE>
The operating expenses charged the Funds are limited to an annual rate of
1.00% (excluding brokerage fees and commissions, interest charges, taxes and
extraordinary legal fees and expenses) of each Fund's average daily net
assets. However, RMCI has voluntarily agreed to reduce the comprehensive fee
of U.S. Treasury Fund to an annual rate of .60% of average net assets. For
the six months ended November 30, 1998, RMCI voluntarily reduced its fee by
$256,573.
29
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DISTRIBUTION ASSISTANCE:
- ---------------------
Pursuant to a Plan of Distribution, each Fund may make assistance payments,
at a rate of .20% per annum of each Fund's average net asset value, to firms
for distribution assistance and administrative services provided to Fund
shareholders. The plan requires RMCI to pay an equivalent amount form its
own resources.
(3) MANAGEMENT'S USE OF ESTIMATES:
----------------------------------
The preparation of financial statements in conformity with generally
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the reported
amounts of income and expenses during the reporting periods. Actual results
may differ from those estimates.
(4) INVESTMENT CONCENTRATION:
---------------------------
The tax-exempt Funds invest substantially all of their assets in tax-exempt
debt obligations issued by states, territories and possession of the United
States. The single-state Funds invest primary in debt obligations consisting
of issuers in each of their respective states. The issuers' ability to meet
their obligations may be affected by economic, regional or political
developments. In order to reduce the credit risk associated with such
factors, the Funds invest substantially in obligations backed by letters of
credit, bond insurance of financial institutions, or financial guaranty
assurance agencies. At November 30, 1998, the percentages invested in such
obligations amounted to:
<TABLE>
<S> <C> <C> <C>
California 91% New Jersey 74%
Connecticut 75% New York 76%
Florida 95% Ohio 100%
Interstate 75% Pennsylvania 98%
Massachusetts 71%
</TABLE>
(5) COMPOSITION OF NET ASSETS:
-----------------------------
At November 30, 1998, the composition of each Fund's net assets was as
follows:
<TABLE>
<CAPTION>
PRIMARY U.S. GOVERNMENT U.S. TREASURY CALIFORNIA
-------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Par Value.................................... $ 3,284,560 $ 731,617 $ 273,089 $ 123,849
Paid-in Capital.............................. 3,281,275,462 730,884,957 273,815,711 123,725,115
-------------- ------------ ------------ ------------
Net Assets................................... $3,284,560,022 $731,616,574 $273,088,800 $123,848,964
============== ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT FLORIDA INTERSTATE MASSACHUSETTS
-------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Par Value.................................... $ 39,554 $ 21,097 $ 367,041 $ 27,679
Paid-in Capital.............................. 39,514,311 21,075,576 366,674,353 27,651,005
-------------- ------------ ------------ ------------
Net Assets................................... $ 39,553,865 $ 21,096,673 $367,041,394 $ 27,678,684
============== ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK OHIO PENNSYLVANIA
-------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Par Value.................................... $ 42,766 $ 181,393 $ 2,239 $ 20,688
Paid-in Capital.............................. 42,723,075 181,211,982 2,236,682 20,667,379
-------------- ------------ ------------ ------------
Net Assets................................... $ 42,765,841 $181,393,375 $ 2,238,921 $ 20,688,067
============== ============ ============ ============
</TABLE>
30
<PAGE> 31
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(6) FINANCIAL HIGHLIGHTS:
----------------------
Contained below is per share operating performance data for a share of
beneficial interest outstanding of each Fund for the periods as indicated.
The information should be read in conjunction with the accompanying
financial data and related notes.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, --------------------------------------------------------
PRIMARY FUND 1998(A) 1998 1997 1996 1995 1994
------------ ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period........ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
Net investment income from investment
operations............................... .0227 .0483 .0457 .0490 .0450 .0246
Less dividends from net investment
income................................... (.0227) (.0483) (.0457) (.0490) (.0450) (.0246)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ======== ========
Total Return............................... 4.69%(b) 4.83% 4.57% 4.90% 4.50% 2.46%
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------
Net assets end of period (millions)........ $3,284.6 $2,707.6 $2,104.1 $1,664.1 $1,602.5 $1,415.4
Ratio of expenses to average net assets.... .99%(b) .94% .98% .98% .97% .97%
Ratio of net investment income to average
net assets............................... 4.52%(b) 4.71% 4.47% 4.79% 4.42% 2.44%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ---------------------------------------------------
U.S. GOVERNMENT FUND 1998(A) 1998 1997 1996 1995 1994
-------------------- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period........... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Net investment income from investment
operations.................................. .0224 .0471 .0449 .0484 .0441 .0237
Less dividends from net investment income..... (.0224) (.0471) (.0449) (.0484) (.0441) (.0237)
------- ------- ------- ------- ------- -------
Net asset value at end of period.............. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return.................................. 4.61%(b) 4.71% 4.49% 4.84% 4.41% 2.37%
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------
Net assets end of period (millions)........... $ 731.6 $ 652.5 $ 611.8 $ 568.5 $ 721.8 $ 740.7
Ratio of expenses to average net assets....... 1.00%(b) .99% .99% 1.00% .99% .99%
Ratio of net investment income to average net
assets...................................... 4.45%(b) 4.63% 4.40% 4.75% 4.31% 2.35%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ---------------------------------------------------
U.S. TREASURY FUND 1998(A) 1998 1997 1996 1995 1994
------------------ ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period........... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Net investment income from investment
operations.................................. .0215 .0456 .0443 .0466 .0456 .0240
Less dividends from net investment income..... (.0215) (.0456) (.0443) (.0466) (.0456) (.0240)
------- ------- ------- ------- ------- -------
Net asset value at end of period.............. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return.................................. 4.29%(b) 4.56% 4.43% 4.66% 4.56% 2.40%
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------
Net assets end of period (millions)........... $ 273.1 $ 239.8 $ 169.2 $ 142.8 $ 95.2 $ 7.4
Ratio of expenses to average net assets(c).... .77%(b) .77% .77% .79% .68% .73%
Ratio of net investment income to average net
assets...................................... 4.28%(b) 4.46 4.33 4.53 4.64 2.38
</TABLE>
- ---------------
(a) Unaudited.
(b) Annualized.
(c) Net of fees and other expenses. Had RMCI not undertaken to reduce expenses,
the actual expense ratios would have amounted to .97%, .97%, .99%, .93% and
.85% for the years ended May 31, 1998, 1997, 1996, 1995 and 1994,
respectively.
31
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(6) FINANCIAL HIGHLIGHTS (CONTINUED)
----------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ----------------------------------------
CALIFORNIA TAX-EXEMPT FUND 1998* 1998 1997 1996 1995(B)
-------------------------- ------------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- -------
Net investment income.................................. .0110 .0260 .0239 .0273 .0181
Dividends from net investment income................... (.0110) (.0260) (.0239) (.0273) (.0181)
------- ------- ------- ------- -------
Net asset value, end of period......................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
Total Return........................................... 2.24% (a) 2.60% 2.39% 2.73% 1.81%(a)
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------
Net assets end of period (millions).................... $ 123.8 $ 66.9 $ 31.0 $ 12.6 $ 11.1
Ratio of expenses to average net assets................ 1.00%(a) .96% 1.03% 1.04% 1.02%(a)
Ratio of net investment income to average net assets... 2.19%(a) 2.55% 2.40% 2.67% 2.95%(a)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, -----------------------------------------------------
CONNECTICUT TAX-EXEMPT FUND 1998* 1998 1997 1996 1995 1994
--------------------------- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Net investment income....................... .0119 .0267 .0243 .0266 .0254 .0164
Dividends from net investment income........ (.0119) (.0267) (.0243) (.0266) (.0254) (.0164)
------- ------- ------- ------- ------- -------
Net asset value, end of period.............. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return................................ 2.41%(a) 2.67% 2.43% 2.66% 2.54% 1.64%
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------
Net assets end of period (millions)......... $ 39.6 $ 36.8 $ 33.5 $ 34.8 $ 26.6 $ 128.7
Ratio of expenses to average net assets..... 1.00%(a) .89% .97% 1.01% 89%(d) .85%(d)
Ratio of net investment income to average
net assets................................ 2.37%(a) 2.64% 2.39% 2.61% 2.33% 1.62%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FISCAL YEARS ENDED
ENDED MAY 31,
NOVEMBER 30, ------------------
FLORIDA TAX-EXEMPT FUND 1998* 1998 1997(C)
----------------------- ------------ ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $1.0000 $1.0000 $1.0000
------- ------- -------
Net investment income....................................... .0125 .0269 .0228
Dividends from net investment income........................ (.0125) (.0269) (.0228)
------- ------- -------
Net asset value, end of period.............................. $1.0000 $1.0000 $1.0000
======= ======= =======
Total Return................................................ 2.53%(a) 2.69% 2.42%(a)
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------
Net assets end of period (millions)......................... $ 21.1 $ 10.8 $ 4.1
Ratio of expenses to average net assets..................... 1.00%(a) .94% 1.04%(a)
Ratio of net investment income to average net assets........ 2.47%(a) 2.62% 2.39%(a)
</TABLE>
32
<PAGE> 33
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(6) FINANCIAL HIGHLIGHTS (CONTINUED)
----------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ---------------------------------------------------------
MASSACHUSETTS TAX-EXEMPT FUND 1998* 1998 1997 1996 1995 1994
----------------------------- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 1.000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Net investment income..................... .0115 .0284 .0259 .0276 .0265 .0175
Dividends from net investment income...... (.0115) (.0284) (.0259) (.0276) (.0265) (.015)
------- ------- ------- ------- ------- -------
Net asset value, end of period............ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return.............................. 2.34%(a) 2.84% 2.59% 2.76% 2.65% 1.75%
RATIOS/SUPPLEMENTAL DATA
------------------------------------------
Net assets end of period (millions)....... $ 27.7 $ 25.4 $ 13.0 $ 9.0 $ 10.2 $ 14.8
Ratio of expenses to average net assets... 1.00%(a) .75% .79%(d) .84%(d) .69%(d) 61%(d)
Ratio of net investment income to average
net assets.............................. 2.30%(a) 2.78% 2.58% 2.71% 2.60% 1.73%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ----------------------------------------
NEW JERSEY TAX-EXEMPT FUND 1998* 1998 1997 1996 1995(B)
-------------------------- ------------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- -------
Net investment income.................................. .0116 .0254 .0236 .0263 .0243
Dividends from net investment income................... (.0116) (.0254) (.0236) (.0263) (.0243)
------- ------- ------- ------- -------
Net asset value, end of period......................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
Total Return........................................... 2.35%(a) 2.54% 2.36% 2.63% 2.43%(a)(d)
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------
Net assets end of period (millions).................... $ 42.8 $ 37.6 $ 39.5 $ 41.0 $ 21.6
Ratio of expenses to average net assets................ 1.00%(a) .99% 1.06% 1.04% 1.01%(a)(d)
Ratio of net investment income to average net assets... 2.31%(a) 2.50% 2.33% 2.59% 2.82%(a)(d)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ---------------------------------------------------
NEW YORK TAX-EXEMPT FUND 1998* 1998 1997 1996 1995 1994
------------------------ ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Net investment income......................... .0117 .0268 .0247 .0276 .0253 .0150
Dividends from net investment income.......... (.0117) (.0268) (.0247) (.0276) (.0253) (.0150)
------- ------- ------- ------- ------- -------
Net asset value, end of period................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return.................................. 2.36%(a) 2.68% 2.47% 2.76% 2.53% 1.50%
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------
Net assets end of period (millions)........... $ 181.4 $ 171.2 $ 153.2 $ 125.5 $ 152.9 $ 148.4
Ratio of expenses to average net assets....... 1.00%(a) .94% 1.04% 1.04% .98% .98%
Ratio of net investment income to average net
assets...................................... 2.32%(a) 2.63% 2.43% 2.72% 2.48% 1.48%
</TABLE>
33
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(6) FINANCIAL HIGHLIGHTS (CONTINUED)
----------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
NOVEMBER 30, ENDED MAY 31,
OHIO TAX-EXEMPT FUND 1998* 1998(E)
-------------------- ------------ -------------
<S> <C> <C>
Net asset value, beginning of period........................ $1.0000 $1.0000
------- -------
Net investment income....................................... .0117 .0048
Dividends from net investment income........................ (.0117) (.0048)
------- -------
Net asset value, end of period.............................. $1.0000 $1.0000
------- -------
Total Return................................................ 2.37%(a) 2.87%(a)
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------
Net assets end of period (millions)......................... $ 2.2 $ 2.5
Ratio of expenses to average net assets..................... 1.00%(a) 1.00%(a)
Ratio of net investment income to average net assets........ 2.33%(a) 2.86%(a)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
NOVEMBER 30, MAY 31,
PENNSYLVANIA FUND 1998* 1998(F)
----------------- ------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income paid to shareholders as dividends
(Note 1).................................................. $ (203,634) $ (239,733)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (at net asset value of $1.00
per share):
Net proceeds from sale of shares............................ 33,850,248 56,580,287
Dividends reinvested........................................ 203,634 239,733
Cost of shares redeemed..................................... (26,552,953) (43,632,882)
------------ ------------
Net increase (decrease) in net assets derived from capital
share transactions and from investment operations......... 7,500,929 13,187,138
NET ASSETS:
Beginning of period......................................... 13,187,138 --
------------ ------------
End of period............................................... $ 20,688,067 $ 13,187,138
============ ============
</TABLE>
- ----------------
* Unaudited.
(a) Annualized.
(b) From October 17, 1994 (Commencement of Operations) to May 31, 1996.
(c) From June 24, 1996 (Commencement of Operations) to May 31, 1997.
(d) RMCI waived a portion of its fee or reimbursed the Funds for other
expenses. Has RMCI not pursued such undertaking, the following Fund expense
rations would have been higher: Connecticut Fund: 0.10% higher for each of
the two years ended May 31, 1994 and May 31, 1995; Massachusetts Fund:
0.04%, 0.05%, 0.11% and 0.43% higher for fiscal years ended May 31, 1997,
1996, 1995 and 1994, respectively; New Jersey Fund: .0.1%, for period ended
May 31, 1996.
(e) From April 1, 1998 (Commencement of Operations) to May 31, 1998.
(f) From September 12, 1997 (Commencement of Operations) to May 31, 1998.
34
