<PAGE>
[LOGO]
- -----------------------------------------------
SEMI-ANNUAL REPORT
- -----------------------------------------------
THE RESERVE FUND
PRIMARY FUND
U.S. GOVERNMENT FUND
U.S. TREASURY FUND
NOVEMBER 30, 1999
[LOGO] BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 8898
BRONX, N.Y.
1250 BROADWAY, NEW YORK, NY 10001-3701
(212) 401-5500
GENERAL INFORMATION AND 24-HOUR YIELD AND BALANCE INFORMATION
800-637-1700
This literature is not authorized for distribution to
prospective investors unless preceded or accompanied
by an appropriate current prospectus.
Distributor--Resrv Partners, Inc.
RF/SEMI-ANNUAL 01/00
<PAGE>
THE RESERVE FUND--PRIMARY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NEGOTIABLE BANK CERTIFICATES OF DEPOSIT -- 81.6% (NOTE 1)
- ------------ -------------------------------------------------------------------------------------- --------------
<S> <C> <C>
DOMESTIC -- 22.1%
$150,000,000 American Express Centurion Bank, 6.05%, 2/14/00.............................................. $ 150,000,000
100,000,000 BankBoston, NA, 5.85%, 2/14/00............................................................... 100,000,000
50,000,000 Chase Manhattan Bank, 5.85%, 2/14/00......................................................... 50,000,000
150,000,000 Morgan Guaranty Trust Co., N.Y., 5.65%, 2/3/00............................................... 150,000,000
150,000,000 Regions Bank, 6.03%, 4/4/00.................................................................. 150,000,000
50,000,000 Southtrust Bank NA, 5.93%, 2/15/00........................................................... 50,000,000
150,000,000 Wilmington Trust Co., 5.88%, 2/22/00......................................................... 150,000,000
--------------
800,000,000
--------------
EURO -- 12.5%
150,000,000 Bank of Scotland, 6.14%, 1/31/00............................................................. 150,000,000
150,000,000 ING Bank, NV, 5.87%, 3/27/00................................................................. 150,000,000
150,000,000 Norddeutsche Landesbank Girozentrale, 6.065%, 2/7/00......................................... 150,001,394
--------------
450,001,394
--------------
YANKEES -- 47.0%
50,000,000 Bank Austria, 6.08%, 2/22/00................................................................. 50,000,000
50,000,000 Banque Nationale de Paris, 5.25%, 12/8/99.................................................... 50,000,000
100,000,000 Banque Nationale de Paris, 6.00%, 2/29/00.................................................... 100,000,000
150,000,000 Bayerische Hypo-und Vereinsbank, AG, 6.04%, 2/8/00........................................... 150,005,634
150,000,000 Bayerische Landesbank Girozentrale, 6.01%, 2/7/00............................................ 150,001,394
150,000,000 Commerzbank, AG, 5.79%, 2/10/00.............................................................. 150,000,000
150,000,000 Credit Communal De Belgique SA, 6.03%, 2/4/00................................................ 150,000,000
150,000,000 Credit Suisse First Boston, 5.73%, 2/7/00.................................................... 150,002,752
150,000,000 Deutsche Bank, AG, 6.00%, 3/2/00............................................................. 150,000,000
150,000,000 Landesbank Hessen-Thueringen Girozentrale, 6.025%, 2/3/00.................................... 150,001,313
150,000,000 Lloyds TSB Bank PLC, 5.90%, 2/15/00.......................................................... 150,000,000
150,000,000 National Westminster Bank, PLC, 5.5425%, 11/22/00............................................ 149,899,341
150,000,000 Westdeutsche Landesbank Girozentrale, 6.00%, 3/1/00.......................................... 150,000,000
--------------
1,699,910,434
--------------
Total Negotiable Bank Certificates of Deposit (Cost $2,949,911,828).......................... 2,949,911,828
--------------
COLLATERALIZED PROMISSORY NOTES -- 1.4% (b)
50,000,000 ABN/AMRO, 5.73%, 2/23/00 (Cost $49,331,500).................................................. 49,331,500
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
THE RESERVE FUND--PRIMARY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT REPURCHASE AGREEMENTS -- 19.7% (NOTE 1)
- ------------ -------------------------------------------------------------------------------------- --------------
<S> <C> <C>
$512,000,000 Bear, Stearns & Co. Inc., 5.74%,12/1/99 (collateralized by FGPC 7.0% due 8/1/29 valued at
$9,294,133, FGSI 0% due 1/1/24 to 9/1/29 valued $208,581,038, FGRA 0% due 7/15/08 to 7/15/24
valued at $63,216,879, FGRM 6.0% to 7.0% due 8/15/14 to 3/15/26 valued at $50,910,203, FNST
0% due 4/1/23 to 5/1/28 valued at $62,726,386, FNRA 0% due 8/25/21 to 7/25/26 valued at
$77,151,181, FNRM 0% due 2/25/14 to 9/25/28 valued at $37,557,053, FRRA 0% due 3/25/23 valued
at $23,100,504).............................................................................. $ 512,000,000
100,000,000 Prudential Securities Inc., 5.71%, 12/1/99 (collateralized by TPRN 6.375% due 8/15/02 valued
at $33,324,323, RFIN 0% due 7/15/05 valued at $15,974,860, FNRM 0% due 12/25/21 TO 10/25/28
valued at $13,202,591, FXRM 0% due 7/18/28 valued at $5,140,839, FGRM 0% due 4/15/24 to
6/15/28 valued at $50,910,203)............................................................... 100,000,000
100,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 5.72%, 12/1/99 (collateralized by FGPC 9.50%
due 8/1/26 valued at $6,270,990, FNMS 6.00% to 7.59% due 4/1/19 to 11/29/29 valued at
$96,731,599)................................................................................. 100,000,000
--------------
Total Repurchase Agreements (Cost $712,000,000).............................................. 712,000,000
--------------
TAXABLE MUNICIPAL BONDS -- 0.7% (A) (NOTE 1)
25,100,000 Illinois Student Assistance, 5.52% (LOC Sallie Mae), 12/1/22 (Cost $25,100,000).............. 25,100,000
--------------
TOTAL INVESTMENTS (COST $3,736,343,328)............................................... 103.4% 3,736,343,328
LIABILITIES, LESS OTHER ASSETS........................................................ (3.4) (122,840,656)
------ --------------
NET ASSETS............................................................................ 100.0% $3,613,502,672
------ --------------
------ --------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED ON 3,613,502,672 SHARES
OF BENEFICIAL INTEREST $.001 PAR VALUE OUTSTANDING.................................... $1.00
-----
-----
</TABLE>
- ------------
(a) The interest rates, as reported November 30, 1999, are subject to change
periodically. Securities are payable on demand and are collateralized by
letters of credit, other bank credit agreements or financial guaranty
assurance agencies.
(b) Collateralized by bank letters of credit.
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
THE RESERVE FUND--U.S. GOVERNMENT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT REPURCHASE AGREEMENTS -- 100.8% (NOTE 1)
- ------------ --------------------------------------------------------------------------------------- ------------
<S> <C> <C>
$190,000,000 Bear, Stearns & Co. Inc., 5.72%, 12/1/99 (collateralized by GNMA, 5.50%--9.50%, due from
8/14/15 to 8/15/29 valued at $198,149,361).................................................... $190,000,000
200,000,000 DLJ Securities Corporation, 5.72%, 12/1/99 (collateralized by GNMA, 5.50%--15.00%, due from
4/15/01 to 12/15/31 valued at $200,004,524)................................................... 200,000,000
165,000,000 Prudential Securities Inc., 5.68%, 12/1/99 (collateralized by GNMA, 5.00%--6.625%, due from
5/20/28 to 8/24/20 valued at $165,000,000).................................................... 165,000,000
173,000,000 Lehman Brothers Inc., 5.68%, 12/1/99 (collateralized by GNMA, 6.00%--9.50% due from 11/15/06
to 12/20/28 valued at $173,000,257)........................................................... 173,000,000
------------
TOTAL REPURCHASE AGREEMENTS (COST $728,000,000)........................................ 100.8% 728,000,000
LIABILITIES, LESS OTHER ASSETS......................................................... (0.8) (5,436,021)
------ ------------
NET ASSETS............................................................................. 100.0% $722,563,979
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE BASED ON 722,563,979 SHARES
OF BENEFICIAL INTEREST, $.001 PAR VALUE OUTSTANDING.................................... $1.00
-----
-----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
THE RESERVE FUND--U.S. TREASURY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT U.S. TREASURY BILLS -- 99.7% (NOTE 1)
- ------------ ------------------------------------------------------------------------------------------ ------------
<S> <C> <C>
$31,500,000 4.57%--4.86%, 12/2/99............................................................................ $ 31,495,888
16,500,000 4.58%--4.83%, 12/9/99............................................................................ 16,482,651
13,000,000 4.68%, 12/23/99.................................................................................. 12,962,820
27,500,000 4.76%--4.88%, 1/6/00............................................................................. 27,368,365
35,000,000 4.93%--5.25%, 1/13/00............................................................................ 34,787,538
40,500,000 4.96%--5.20%, 1/20/00............................................................................ 40,213,115
25,000,000 4.70%, 1/27/00................................................................................... 24,813,958
24,500,000 4.83%, 2/3/00.................................................................................... 24,289,844
25,900,000 4.65%--4.84%, 2/10/00............................................................................ 25,657,682
40,000,000 4.89%--4.91%, 2/17/00............................................................................ 39,575,767
13,000,000 5.13%--5.14%, 2/24/00............................................................................ 12,842,502
22,500,000 5.11%--5.12%, 4/27/00............................................................................ 22,027,633
------------
TOTAL U.S. TREASURY BILLS (COST $312,517,763)............................................. 99.7% 312,517,763
OTHER ASSETS, LESS LIABILITIES............................................................ 0.3 939,926
------ ------------
NET ASSETS................................................................................ 100.0% $313,457,689
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE BASED ON 313,457,689 SHARES OF
BENEFICIAL INTEREST, $.001 PAR VALUE OUTSTANDING.......................................... $1.00
-----
-----
</TABLE>
<TABLE>
<CAPTION>
GLOSSARY
<S> <C>
FGPC -- FHLMC Gold Mortgage-Backed Pass-Through Participation Certificates
FGRA -- Federal Home Loan Mortgage Corp. ("FHLMC") Gold Adjustable Rate REMIC
FGRM -- FHLMC Gold REMIC Mortgage-Backed Pass-Through Participation Certificates
FGSI -- Freddie MAC Gold Strip Interest Portion
FNMS -- FNMA Mortgage-Backed Pass-Through Securities
FNRA -- FNMA REMIC Adjustable Rate Mortgage-Backed Pass-Through Securities
FNRM -- Federal National Mortgage Association ("FNMA") REMIC Mortgage-Backed Pass-Through Securities
FRRA -- FHLMC REMIC Adjustable Rate
FNST -- FNMA Stripped Mortgage-Backed Pass-Through Securities
FXRM -- FNMA REMIC Fixed Rate
RFIN -- Resolution Funding Corp. STRIPS
TPRN -- U.S. Treasury Principal STRIPS
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
THE RESERVE FUND
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
U.S. U.S.
PRIMARY GOVERNMENT TREASURY
FUND FUND FUND
----------- ----------- ----------
<S> <C> <C> <C>
INTEREST INCOME (Note 1)....................................................... $89,696,064 $19,238,089 $7,557,124
----------- ----------- ----------
EXPENSES (Note 2)
Management fee............................................................... 11,759,709 2,652,920 --
Comprehensive fee............................................................ 4,995,594 1,065,920 1,536,148
Other........................................................................ 674 674 674
----------- ----------- ----------
Total Expenses before waiver............................................... 16,755,977 3,719,514 1,536,822
Less: expenses waived (Note 2)............................................. -- -- (227,097)
----------- ----------- ----------
Net Expenses............................................................... 16,755,977 3,719,514 1,309,725
----------- ----------- ----------
NET INVESTMENT INCOME, representing net increase in Net Assets
from Investment Operations................................................... $72,940,087 $15,518,575 $6,247,399
----------- ----------- ----------
----------- ----------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
THE RESERVE FUND
STATEMENTS OF CHANGES IN NET ASSETS--(UNAUDITED)
<TABLE>
<CAPTION>
PRIMARY FUND U.S. GOVERNMENT FUND
---------------------------------- ---------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
1999 1999 1999 1999
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income..... $ 72,940,087 $ 134,365,969 $ 15,518,575 $ 29,798,286
-------------- --------------- -------------- --------------
DIVIDENDS PAID TO
SHAREHOLDERS FROM:
Net investment income
(Note 1)................ (72,940,087) (134,365,969) (15,518,575) (29,798,286)
-------------- --------------- -------------- --------------
FROM CAPITAL SHARE
TRANSACTIONS (at net asset
value of $1.00 per share):
Net proceeds from sale of
shares.................. 8,680,401,351 16,224,681,639 1,771,942,718 3,450,382,930
Dividends reinvested...... 72,940,086 134,365,969 15,518,576 29,798,286
Cost of shares redeemed... (8,469,901,856) (15,736,604,580) (1,781,091,243) (3,416,454,910)
-------------- --------------- -------------- --------------
Net increase derived from
capital share transactions
and from investment
operations.................. 283,439,581 622,443,028 6,370,051 63,726,306
NET ASSETS:
Beginning of period......... 3,330,063,091 2,707,620,063 716,193,928 652,467,622
-------------- --------------- -------------- --------------
End of period............... $3,613,502,672 $ 3,330,063,091 $ 722,563,979 $ 716,193,928
-------------- --------------- -------------- --------------
-------------- --------------- -------------- --------------
<CAPTION>
U.S. TREASURY FUND
-----------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
1999 1999
----------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income..... $ 6,247,399 $ 11,017,000
----------------- --------------
DIVIDENDS PAID TO
SHAREHOLDERS FROM:
Net investment income
(Note 1)................ (6,247,399) (11,017,000)
----------------- --------------
FROM CAPITAL SHARE
TRANSACTIONS (at net asset
value of $1.00 per share):
Net proceeds from sale of
shares.................. 624,360,658 1,315,560,422
Dividends reinvested...... 6,247,399 11,017,000
Cost of shares redeemed... (603,852,433) (1,279,635,650)
----------------- --------------
Net increase derived from
capital share transactions
and from investment
operations.................. 26,755,624 46,941,772
NET ASSETS:
Beginning of period......... 286,702,065 239,760,293
----------------- --------------
End of period............... $ 313,457,689 $ 286,702,065
----------------- --------------
----------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES:
The Reserve Fund (the "Fund") is registered under the Investment
Company Act of 1940 as a non-diversified, open-end investment company.
The policies summarized below are consistently followed in the
preparation of its financial statements in conformity with generally
accepted accounting principles.
A. The Fund's authorized shares of beneficial interest are unlimited
and divided into four (4) series: Primary Fund, U.S. Government Fund,
U.S. Treasury Fund and the Strategist Money Market Fund (collectively,
the "Funds"). The financial statements and notes apply only to Primary,
U.S. Government and U.S. Treasury Funds.
B. Securities are valued at amortized cost, which approximates market
value. The amortized cost method values a security at cost plus accrued
interest at the time of purchase, and thereafter assumes a constant
amortization to maturity of any discount or premium, irrespective of
intervening changes in interest rates or market values. The maturity of
floating or variable rate instruments in which the Fund may invest will
be deemed to be, for floating rate instruments, (1) the notice period
required before the Fund is entitled to receive of payment of principal
amount of the instruments; and for variable rate instruments the longer
of (1) above or (2) the period remaining until the instrument's next
rate adjustment, for purpose of Rule 2a-7 and for computing the
portfolio's average weighted life to maturity.
C. It is the Fund's policy to comply with Subchapter M of the Internal
Revenue Code and to distribute all of its taxable income to its
shareholders. Accordingly, no Federal income tax provision is required.
D. Security transactions are recorded on a trade date basis; interest
income is accrued daily and security premium or discount is amortized
or accreted daily. Net investment income is distributed to shareholders
daily and automatically reinvested in additional Fund shares.
E. Funds may enter into repurchase agreements with financial
institutions and securities dealers who are deemed creditworthy
pursuant to guidelines established by the Funds' Board of Trustees. The
Investment Adviser will follow procedures intended to provide that all
repurchase agreements are at least 100% collateralized as to principal
and interest. The Funds' custodian holds the securities subject to
repurchase agreements.
(2) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
Pursuant to an Investment Management Agreement (the "Agreement")
between Reserve Management Company, Inc. ("RMCI") and the Fund, RMCI
serves as the Fund's Investment Adviser subject to the policies adopted
by the Board of Trustees. Under the Agreement, RMCI is responsible for
the supervision of the day-to-day operations, manages the Fund's
investments, effects purchases and sales thereof, and absorbs certain
promotional expenses. For its services as Investment Adviser prior to
June 26, 1999, RMCI received a management fee calculated at an 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%
in excess of $2 billion of average daily net assets of both Primary
Fund and U.S. Government Fund. Effective June 26, 1999, the Primary and
U.S. Government Funds entered into a new Investment Management
Agreement with RMCI, which is substantially similar to the Investment
Management Agreement previously in effect with regard to each Fund,
except for a new comprehensive management fee. The U.S. Treasury Fund,
since inception, has been subject to a comprehensive management fee.
The Agreement provides that RMCI will furnish continuous investment
advisory and management services to the Funds.
For its services, RMCI receives a fee of 0.80% per year of the average
daily net assets of each Fund. RMCI pays all employee and customary
operating expenses of the Fund. Excluded from the definition of
customary operating expenses are interest, taxes, brokerage fees,
extraordinary legal and accounting fees and expenses, and the fees of
the disinterested Trustees, for which each Fund pays its direct or
allocated share.
DISTRIBUTION ASSISTANCE:
Pursuant to a Plan of Distribution, each Fund may make assistance
payments, at a rate of .20% per annum of the 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 from its own resources. RMCI also has voluntarily
agreed to reduce the payments made by U.S. Treasury Fund to an annual
rate of .17%. During the six months ended November 30, 1999, RMCI
voluntarily reimbursed the Fund a total of $47,638 pursuant to the
undertaking.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(3) MANAGEMENT'S USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the dates of the financial statements and the reported
amounts of income and expenses during the reporting periods. Actual
results could differ from those estimates.
(4) COMPOSITION OF NET ASSETS:
At November 30, 1999, the composition of each Fund's net assets was as
follows:
<TABLE>
<CAPTION>
PRIMARY U.S. GOVERNMENT U.S. TREASURY
-------------- --------------- -------------
<S> <C> <C> <C>
Par Value........................................................... $ 3,613,503 $ 722,564 $ 313,458
Paid-in-Capital..................................................... 3,609,889,169 721,841,415 313,144,231
-------------- ------------- -------------
Net Assets.......................................................... $3,613,502,672 $ 722,563,979 $ 313,457,689
-------------- ------------- -------------
-------------- ------------- -------------
</TABLE>
(5) FINANCIAL HIGHLIGHTS:
Contained below is per share operating performance data for a share of
beneficial interest outstanding for each of the periods as indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ----------------------------------------------------
1999 1999 1998 1997 1996 1995
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PRIMARY FUND
Net asset value beginning of period..................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
Net investment income from investment operations........ .0219 .0438 .0483 .0457 .0490 .0450
Less dividends from net investment income............... (.0219) (.0438) (.0483) (.0457) (.0490) (.0450)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........................ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total Return............................................ 4.38%(b) 4.38% 4.83% 4.57% 4.90% 4.50%
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (millions)..................... $3,613.5 $3,330.1 $2,707.6 $2,104.1 $1,664.1 $1,602.5
Ratio of expenses to average net assets................. 1.00%(b) 1.00% .94% .98% .98% .97%
Ratio of net investment income to average net assets.... 4.34%(b) 4.26% 4.71% 4.47% 4.79% 4.42%
U.S. GOVERNMENT FUND
Net asset value beginning of period..................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.000
-------- -------- -------- -------- -------- --------
Net investment income from investment operations........ .0210 .0426 .0471 .0449 .0484 .0441
Less dividends from net investment income............... (.0210) (.0426) (.0471) (.0449) (.0484) (.0441)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........................ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total Return............................................ 4.20%(b) 4.26% 4.71% 4.49% 4.84% 4.41%
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (millions)..................... $ 722.6 $ 716.2 $ 652.5 $ 611.8 $ 568.5 $ 721.8
Ratio of expenses to average net assets................. 1.00%(b) 1.00% .99% .99% 1.00% .99%
Ratio of net investment income to average net assets.... 4.16%(b) 4.16% 4.63% 4.40% 4.75% 4.31%
</TABLE>
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
(5) FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------
SIX MONTHS
ENDED FOR FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ----------------------------------------------------
1999 1999 1998 1997 1996 1995
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
U.S. TREASURY FUND
Net asset value beginning of period..................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
Net investment income from investment operations........ .0199 .0410 .0456 .0443 .0466 .0456
Less dividends from net investment income............... (.0199) (.0410) (.0456) (.0443) (.0466) (.0456)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........................ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total Return............................................ 3.97%(b) 4.10% 4.56% 4.43% 4.66% 4.56%
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (millions)..................... $ 313.5 $ 286.7 $ 239.8 $ 169.2 $ 142.8 $ 95.2
Ratio of expenses to average net assets(a).............. 1.00%(b) 1.00% .97% .97% .99% .93%
Ratio of net investment income to average net
assets(a)............................................. 4.08%(b) 3.76% 4.26% 4.13% 4.33% 4.44%
</TABLE>
- ---------------
(a) Due to the voluntary waiver of certain expenses by RMCI, the actual expense
ratios and net investment income of the U.S. Treasury Fund amounted to:
<TABLE>
<CAPTION>
NET
EXPENSE INVESTMENT
FISCAL YEAR RATIO INCOME
----------- ------- ----------
<S> <C> <C> <C>
11/99(c) .82% 3.93%
5/99 .77 3.99
5/98 .77 4.46
5/97 .77 4.33
5/96 .79 4.53
5/95 .68 4.64
</TABLE>
(b) Annualized
(c) For the period June 1, 1999 to November 30, 1999
10
<PAGE>
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<PAGE>
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