INDEPENDENCE
ONE
MONEY
MARKET
FUNDS
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1995
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Investor:
I am pleased to present the Semi-Annual Report of the Independence One Money
Market Funds for the six-month period ended October 31, 1995. Inside, you will
find complete financial information for each fund--beginning with the portfolio
manager's investment review, which is followed by a complete list of investments
and financial statements.
Each Independence One money market fund is a convenient, stable way to put your
cash to work pursuing competitive money market income--every day.*
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND, a portfolio of U.S. Treasury
money market securities, paid a total of $0.03 per share in dividends over the
reporting period. Assets in the fund increased over the period, reaching $278.3
million at its end.
INDEPENDENCE ONE PRIME MONEY MARKET FUND, a high-quality portfolio of money
market securities, paid a total of $0.03 per share in dividends over the
reporting period. Total assets in the fund grew considerably, from $233.6
million on the first day of the period to $362.7 million on the last day of the
period.
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND, a high-quality portfolio of
Michigan municipal money market securities, paid a total of $0.02 per share in
tax-free dividends over the reporting period.** Assets in the fund totaled $68.7
million on the last day of the period.
Thank you for keeping your ready cash working through one or more of the
Independence One Money Market Funds.
Sincerely,
Edward C. Gonzales
President
December 15, 1995
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
The shares of Independence One U.S. Treasury Money Market Fund represent
interests in the fund, which is one of a series of investment portfolios in the
Independence One Mutual Funds, an open-end, management investment company. The
investment objective of the fund is to provide current income consistent with
stability of principal. The fund pursues this investment objective by investing
exclusively in a portfolio of short-term U.S. Treasury obligations.
Short-term interest rates have fallen since April 30, 1995 (the date of our last
Annual Report). This trend in interest rates is reflected in the 7-day net yield
for the fund, which has ranged from 5.42% on April 30, 1995 to its current yield
of 5.26% on October 31, 1995.* Total net assets in the fund are approximately
$278 million. The average maturity for the fund as of October 31, 1995 was 35
days.
INDEPENDENCE ONE PRIME MONEY MARKET FUND
The shares of Independence One Prime Money Market Fund represent interests in
the fund, which is one of a series of investment portfolios in the Independence
One Mutual Funds, an open-end, management investment company. The investment
objective of the fund is to provide current income consistent with stability of
principal. The fund pursues this investment objective by investing in a variety
of high-quality money market instruments maturing in 397 days or less.
Short-term interest rates have fallen since April 30, 1995 (the date of our last
Annual Report). This trend in interest rates is reflected in the 7-day net yield
for the fund, which has ranged from 5.55% on April 30, 1995 to its current yield
of 5.26% on October 31, 1995 for Class A.* The 7-day net yield for Class B as of
October 31, 1995 was 5.51%.* Total net assets in the fund are approximately $363
million. The average maturity for the fund as of October 31, 1995 was 56 days.
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
The shares of Independence One Michigan Municipal Cash Fund represent interests
in the fund, which is one of a series of investment portfolios in the
Independence One Mutual Funds, an open-end, management investment company. The
investment objective of the fund is to provide stability of income and current
income exempt from federal regular income tax and Michigan state income tax
consistent with the stability of principal. The fund pursues this investment
objective by investing at least 80% of its assets in a portfolio of Michigan
municipal securities maturing in 397 days or less.
Short-term interest rates have fallen since April 30, 1995 (the date of our last
Annual Report). This trend in interest rates is reflected in the 7-day net yield
for the fund, which has ranged from 3.66% on April 30, 1995 to its current yield
of 3.32% on October 31, 1995.* Total net assets in the fund are approximately
$69 million. The average maturity for the fund as of October 31, 1995 was 33
days.
* Performance quoted represents past performance and is not indicative of future
results. Yields will vary.
ECONOMIC REVIEW
- --------------------------------------------------------------------------------
The Federal Reserve Open Market Committee (the "Committee") meets eight times a
year to deliberate monetary policy. The Committee has been inactive during most
of 1995. The year began with its federal funds target rate at 5.50% and its
official discount rate at 4.75%. On February 1, 1995, both benchmark rates were
increased by 50 basis points in response to continued signs of economic strength
and fears of building inflation pressures. This increase in managed interest
rates turned out to be the last in the Committee's twelve-month tightening
program that raised the federal funds rate a total of 300 basis points. When it
became apparent that the economy had indeed slowed its rate of growth the
Committee reversed its stance. It lowered the federal funds rate by 25 basis
points to 5.75% after its July 6th meeting. Federal Reserve (the "Fed")
policymakers have left this key rate unchanged since that time.
The pace of economic activity picked up during the second half of 1995. Gross
Domestic Product rose 4.2% during the third quarter and is expected to grow at a
2.8% annual rate during the fourth quarter. The unemployment rate has stayed
below 6% all year, and its most recent reading was 5.5% for the month of
October.
All in all, the Fed should be pleased with the overall health of the economy and
the strong performance of both the equity and credit markets. It is our opinion
that the Fed will need solid evidence to shift from their current posture of
"wait and see."
The funds' investment adviser will continue to monitor economic and market
developments to best serve our shareholders who seek a well-managed fund that
seeks a high degree of safety, liquidity and competitive yields.
RESULTS OF SPECIAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
A Special Meeting of Independence One Mutual Funds shareholders was held on
September 15, 1995. On June 5, 1995, the record date for shareholders voting at
the meeting, there were 544,073,517 total outstanding shares. The following
items were considered by shareholders and the results of their voting were as
follows:
<TABLE>
<CAPTION>
WITHHELD
AGENDA AUTHORITY
ITEM FOR AGAINST ABSTAIN TO VOTE
<S> <C> <C> <C> <C> <C>
1. Election of Trustee of the Trust.*
Thomas S. Wilson
242,098,318 4,562,052 44,281,883 0
2. Independence One Michigan Municipal Cash Fund
To approve or disapprove a new investment advisory contract between the Trust and Michigan National Bank.
27,036,672 738,198 6,324,767 N/A
3. Independence One Prime Money Market Fund
To approve or disapprove a new investment advisory contract between the Trust and Michigan National Bank.
110,974,501 6,767,335 14,869,998 N/A
4. Independence One U.S. Treasury Money Market Fund
To approve or disapprove a new investment advisory contract between the Trust and Michigan National Bank.
100,385,294 416,015 17,090,788 N/A
</TABLE>
* The following Trustees of the Trust continued their terms as Trustee of the
Trust: Robert E. Baker, Harold Berry, Clarence G. Frame, and Harry J.
Nederlander.
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) REPURCHASE AGREEMENTS--83.1%
- -------------------------------------------------------------------------------------------------
$ 13,054,000 Bank of America, 5.85%, dated 10/31/1995, due 11/1/1995 $ 13,054,000
----------------------------------------------------------------------------------
69,941,000 Daiwa Securities America, Inc., 5.85%, dated 10/31/1995,
due 11/1/1995 69,941,000
----------------------------------------------------------------------------------
13,054,000 Dean Witter Reynolds, Inc., 5.78%, dated 10/31/1995, due 11/1/1995 13,054,000
----------------------------------------------------------------------------------
13,054,000 Donaldson, Lufkin & Jenrette Securities Corp., 5.85%, dated
10/31/1995, due 11/1/1995 13,054,000
----------------------------------------------------------------------------------
69,941,000 First Chicago Capital Markets, Inc., 5.85%, dated 10/31/1995,
due 11/1/1995 69,941,000
----------------------------------------------------------------------------------
13,054,000 Goldman, Sachs & Co., 5.75%, dated 10/31/1995,
due 11/1/1995 13,054,000
----------------------------------------------------------------------------------
13,054,000 Merrill Lynch, Pierce, Fenner & Smith, Inc., 5.75%, dated 10/31/95, due 11/1/1995 13,054,000
----------------------------------------------------------------------------------
13,058,000 Prudential Securities, Inc., 5.70%, dated 10/31/1995, due 11/1/1995 13,058,000
----------------------------------------------------------------------------------
13,054,000 Union Bank of Switzerland, 5.85%, dated 10/31/1995, due 11/1/1995 13,054,000
---------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 231,264,000
---------------------------------------------------------------------------------- --------------
U.S. TREASURY OBLIGATIONS--17.4%
- -------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS--17.4%
----------------------------------------------------------------------------------
15,000,000 4/4/1996 14,648,990
----------------------------------------------------------------------------------
15,000,000 5/2/1996 14,584,819
----------------------------------------------------------------------------------
10,000,000 5/30/1996 9,674,122
----------------------------------------------------------------------------------
10,000,000 7/25/1996 9,589,858
---------------------------------------------------------------------------------- --------------
TOTAL U.S. TREASURY OBLIGATIONS 48,497,789
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (B) $ 279,761,789(A)
---------------------------------------------------------------------------------- --------------
</TABLE>
(a) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($278,352,567) at October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in repurchase agreements $ 231,264,000
- ---------------------------------------------------------------------------------
Investments in securities 48,497,789
- --------------------------------------------------------------------------------- --------------
Total investments in securities,
at amortized cost and value $ 279,761,789
- -------------------------------------------------------------------------------------------------
Cash 967
- -------------------------------------------------------------------------------------------------
Income receivable 37,428
- ------------------------------------------------------------------------------------------------- --------------
Total assets 279,800,184
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable 1,249,717
- ---------------------------------------------------------------------------------
Accrued expenses 197,900
- --------------------------------------------------------------------------------- --------------
Total liabilities 1,447,617
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 278,352,567 shares outstanding $ 278,352,567
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
$278,352,567 / 278,352,567 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 7,667,561
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 518,143
- ----------------------------------------------------------------------------------------
Administrative personnel and services fee 163,788
- ----------------------------------------------------------------------------------------
Custodian fees 29,405
- ----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 15,156
- ----------------------------------------------------------------------------------------
Directors'/Trustees' fees 8,290
- ----------------------------------------------------------------------------------------
Legal fees 1,036
- ----------------------------------------------------------------------------------------
Portfolio accounting fees 23,576
- ----------------------------------------------------------------------------------------
Share registration costs 7,901
- ----------------------------------------------------------------------------------------
Printing and postage 2,720
- ----------------------------------------------------------------------------------------
Insurance premiums 3,627
- ----------------------------------------------------------------------------------------
Miscellaneous 11,529
- ---------------------------------------------------------------------------------------- ----------
Total expenses 785,171
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 6,882,390
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 6,882,390 $ 10,827,606
- ------------------------------------------------------------------------- -------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Distributions from net investment income (6,882,390) (10,827,606)
- ------------------------------------------------------------------------- -------------------- -----------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of shares 1,170,694,342 1,859,720,057
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 3,363,168 5,250,905
- -------------------------------------------------------------------------
Cost of shares redeemed (1,140,592,132) (1,835,916,082)
- ------------------------------------------------------------------------- -------------------- -----------------
Change in net assets resulting from share transactions 33,465,378 29,054,880
- ------------------------------------------------------------------------- -------------------- -----------------
Change in net assets 33,465,378 29,054,880
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 244,887,189 215,832,309
- ------------------------------------------------------------------------- -------------------- -----------------
End of period $ 278,352,567 $ 244,887,189
- ------------------------------------------------------------------------- -------------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
1995 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------
Net investment income 0.03 0.04 0.03 0.03 0.05 0.07 0.08
- -----------------------------------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.03) (0.04) (0.03) (0.03) (0.05) (0.07) (0.08)
- ----------------------------------- ------ --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------- ------ --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.71% 4.49% 2.63% 2.92% 4.81% 7.17% 7.83%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.61%* 0.63% 0.61% 0.54% 0.57% 0.60% 0.35%*
- -----------------------------------
Net investment income 5.31%* 4.41% 2.60% 2.90% 4.55% 6.91% 8.17%*
- -----------------------------------
Expense waiver/ reimbursement (c) -- -- 0.00% 0.09% 0.12% 0.07% 0.32%*
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period
(000 omitted) $278,353 $244,887 $215,832 $214,069 $224,803 $131,263 $82,947
- -----------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from June 1, 1989 (date of initial
public investment) to April 30, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE PRIME MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
DEPOSIT--28.9% ----------------------------------------------------------------------------------
$ 10,000,000 Abbey National N. A. Corp. 5.75%, 11/8/1995 $ 10,000,010
----------------------------------------------------------------------------------
10,000,000 Bank of Montreal 5.79%, 1/12/1996 10,000,197
----------------------------------------------------------------------------------
10,000,000 Bank of Nova Scotia 5.72%, 1/25/1996 10,000,695
----------------------------------------------------------------------------------
5,000,000 Banque Nationale De Paris 5.74%, 12/18/1995 5,000,123
----------------------------------------------------------------------------------
5,000,000 Commerzbank 5.75%, 12/1/1995 5,000,041
----------------------------------------------------------------------------------
10,000,000 Commerzbank 5.79%, 1/24/1996 10,000,230
----------------------------------------------------------------------------------
5,000,000 Lloyd's Bank 5.78%, 1/8/1996 5,000,093
----------------------------------------------------------------------------------
10,000,000 National Westminster 5.77%, 11/27/1995 9,999,785
----------------------------------------------------------------------------------
5,000,000 National Westminster 5.80%, 1/24/1996 5,000,104
----------------------------------------------------------------------------------
10,000,000 Rabobank Nederland 5.77%, 11/17/1995 10,000,028
----------------------------------------------------------------------------------
15,000,000 Societe Generale North America, Inc. 5.77%, 11/21/1995 14,999,459
----------------------------------------------------------------------------------
10,000,000 Westdeutsche Landesbank 6.21%, 5/16/1996 10,000,515
---------------------------------------------------------------------------------- --------------
TOTAL CERTIFICATES OF DEPOSIT 105,001,280
---------------------------------------------------------------------------------- --------------
(A) COMMERCIAL PAPER--20.5%
- -------------------------------------------------------------------------------------------------
BANKING--4.1%
----------------------------------------------------------------------------------
15,000,000 Asset Securitization Cooperative Corp. 5.75%, 12/5/1995 14,918,967
---------------------------------------------------------------------------------- --------------
FINANCE--9.6%
----------------------------------------------------------------------------------
10,000,000 Fleet Funding Corp. 5.75%, 12/8/1995 9,941,211
----------------------------------------------------------------------------------
10,000,000 Paribas Banque Finance, Inc. 5.75%, 11/27/1995 9,958,978
----------------------------------------------------------------------------------
7,000,000 Transamerica Finance Corp. 5.78%, 11/10/1995 6,989,938
----------------------------------------------------------------------------------
8,000,000 Transamerica Finance Corp. 5.75%, 12/7/1995 7,954,240
---------------------------------------------------------------------------------- --------------
Total 34,844,367
---------------------------------------------------------------------------------- --------------
FINANCE-RETAIL--2.7%
----------------------------------------------------------------------------------
10,000,000 AT & T Capital Corp. 5.79%, 1/19/1996 9,874,697
---------------------------------------------------------------------------------- --------------
UTILITIES--4.1%
----------------------------------------------------------------------------------
$ 6,000,000 Pacificorp 5.73%, 11/28/1995 $ 5,974,260
----------------------------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <S> <C>
(A) COMMERCIAL PAPER--CONTINUED
- -------------------------------------------------------------------------------------------------
UTILITIES--CONTINUED
----------------------------------------------------------------------------------
5,000,000 Pacificorp 5.74%, 11/22/1995 4,983,346
----------------------------------------------------------------------------------
4,050,000 Pacificorp 5.75%, 11/30/1995 4,031,339
---------------------------------------------------------------------------------- --------------
Total 14,988,945
---------------------------------------------------------------------------------- --------------
TOTAL COMMERCIAL PAPER 74,626,976
---------------------------------------------------------------------------------- --------------
CORPORATE BONDS--19.3%
- -------------------------------------------------------------------------------------------------
BANKING--13.8%
----------------------------------------------------------------------------------
10,000,000 Bank America of Chicago 5.74%, 11/28/1995 10,000,000
----------------------------------------------------------------------------------
10,000,000 Banque National de Paris 6.27%, 8/28/1996 10,000,000
----------------------------------------------------------------------------------
5,000,000 NBD Bancorp 5.74%, 11/29/1995 5,000,000
----------------------------------------------------------------------------------
10,000,000 NBD Bancorp 5.78%, 1/5/1996 9,999,786
----------------------------------------------------------------------------------
15,000,000 Wachovia Bank of North Carolina 5.74%, 11/17/1995 14,999,994
---------------------------------------------------------------------------------- --------------
Total 49,999,780
---------------------------------------------------------------------------------- --------------
CHEMICALS--1.4%
----------------------------------------------------------------------------------
5,000,000 Monsato Co., Medium Term Note 5.73%, 12/22/1995 4,959,696
---------------------------------------------------------------------------------- --------------
FINANCE--1.4%
----------------------------------------------------------------------------------
5,000,000 Dean Witter Discover & Co., Medium Term Note 5.77%, 4/1/1996 4,984,282
----------------------------------------------------------------------------------
SERVICES--2.7%
----------------------------------------------------------------------------------
10,000,000 WMX Technologies 6.03%, 6/15/1996 9,930,053
---------------------------------------------------------------------------------- --------------
TOTAL CORPORATE BONDS 69,873,811
---------------------------------------------------------------------------------- --------------
GOVERNMENT AGENCY--2.8%
- -------------------------------------------------------------------------------------------------
10,000,000 Federal Home Loan Bank 6.00%, 10/4/1996 10,000,000
---------------------------------------------------------------------------------- --------------
(B) NOTE-VARIABLE--2.8%
- -------------------------------------------------------------------------------------------------
10,000,000 Comerica Bank Detroit, MI, Medium Term Note 5.85%, 11/7/1995 9,999,648
---------------------------------------------------------------------------------- --------------
(C) REPURCHASE AGREEMENTS--25.8%
- -------------------------------------------------------------------------------------------------
30,000,000 Daiwa Securities America, Inc., 5.85%, dated 10/31/1995,
due 11/1/1995 30,000,000
----------------------------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <S> <C>
(C) REPURCHASE AGREEMENTS--CONTINUED
- -------------------------------------------------------------------------------------------------
$ 30,000,000 Donaldson Lufkin & Jenrette Securities Corp., 5.85%,
dated 10/31/1995, due 11/1/1995 $ 30,000,000
----------------------------------------------------------------------------------
33,549,000 First Chicago Capital Markets, Inc., 5.85%, dated 10/31/1995,
due 11/1/1995 33,549,000
---------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 93,549,000
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (D) $ 363,050,715
---------------------------------------------------------------------------------- --------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase.
(b) Floating rate note with current rate and next reset date shown.
(c) The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of the
portfolio.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($362,709,024) at October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE PRIME MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in repurchase agreements $ 93,549,000
- ---------------------------------------------------------------------------------
Investments in securities 269,501,715
- --------------------------------------------------------------------------------- --------------
Total investments in securities,
at amortized cost and value $ 363,050,715
- -------------------------------------------------------------------------------------------------
Cash 936
- -------------------------------------------------------------------------------------------------
Income receivable 1,400,326
- ------------------------------------------------------------------------------------------------- --------------
Total assets 364,451,977
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable 1,551,782
- ---------------------------------------------------------------------------------
Accrued expenses 191,171
- --------------------------------------------------------------------------------- --------------
Total liabilities 1,742,953
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 362,709,024 shares outstanding $ 362,709,024
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
CLASS A SHARES:
- -------------------------------------------------------------------------------------------------
$283,664,099 / 283,664,099 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
CLASS B SHARES:
- -------------------------------------------------------------------------------------------------
$79,044,925 / 79,044,925 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE PRIME MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 9,037,022
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 602,516
- --------------------------------------------------------------------------------------
Administrative personnel and services fee 190,131
- --------------------------------------------------------------------------------------
Custodian fees 30,126
- --------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 24,703
- --------------------------------------------------------------------------------------
Directors'/Trustees' fees 10,092
- --------------------------------------------------------------------------------------
Auditing fees 6,628
- --------------------------------------------------------------------------------------
Legal fees 2,862
- --------------------------------------------------------------------------------------
Portfolio accounting fees 33,892
- --------------------------------------------------------------------------------------
Shareholder services fee--
Class A Shares 334,122
- --------------------------------------------------------------------------------------
Share registration costs 25,456
- --------------------------------------------------------------------------------------
Printing and postage 8,886
- --------------------------------------------------------------------------------------
Insurance premiums 3,615
- -------------------------------------------------------------------------------------- ------------
Total expenses 1,273,029
- --------------------------------------------------------------------------------------
Waiver--
- --------------------------------------------------------------------------------------
Waiver of investment advisory fee (376,572)
- -------------------------------------------------------------------------------------- ------------
Net expenses 896,457
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 8,140,565
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE PRIME MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 8,140,565 $ 12,028,855
- ------------------------------------------------------------------------- -------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Distributions from net investment income
- -------------------------------------------------------------------------
Class A Shares (7,176,444) (12,028,855)
- -------------------------------------------------------------------------
Class B Shares (964,121) 0
- ------------------------------------------------------------------------- -------------------- -----------------
Change in net assets resulting from distributions to shareholders (8,140,565) (12,028,855)
- ------------------------------------------------------------------------- -------------------- -----------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of shares 1,137,131,003 1,885,542,162
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 3,157,279 5,979,695
- -------------------------------------------------------------------------
Cost of shares redeemed (1,011,186,106) (1,968,503,461)
- ------------------------------------------------------------------------- -------------------- -----------------
Change in net assets resulting from share transactions 129,102,176 (76,981,604)
- ------------------------------------------------------------------------- -------------------- -----------------
Change in net assets 129,102,176 (76,981,604)
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 233,606,848 310,588,452
- ------------------------------------------------------------------------- -------------------- -----------------
End of period $ 362,709,024 $ 233,606,848
- ------------------------------------------------------------------------- -------------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE PRIME MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--CLASS A SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
1995 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------
Net investment income 0.03 0.05 0.03 0.03 0.05 0.07 0.08
- -----------------------------------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.03) (0.05) (0.03) (0.03) (0.05) (0.07) (0.08)
- ----------------------------------- ------ --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------- ------ --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.74% 4.66% 2.73% 2.99% 4.89% 7.55% 7.99%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.62%* 0.61% 0.59% 0.58% 0.54% 0.53% 0.40%*
- -----------------------------------
Net investment income 5.37%* 4.51% 2.70% 2.91% 4.73% 7.26% 8.24%*
- -----------------------------------
Expense waiver/ reimbursement (c) 0.25%* -- 0.02% 0.04% 0.08% 0.08% 0.23%*
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period
(000 omitted) $283,664 $233,607 $310,588 $423,355 $309,009 $371,994 $328,434
- -----------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from June 1, 1989 (date of initial
public investment) to April 30, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE PRIME MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--CLASS B SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED)
OCTOBER 31, 1995(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income 0.03
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------
Distributions from net investment income (0.03)
- ---------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00
- ---------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) 2.87%
- ----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------
Expenses 0.37%*
- ----------------------------------------------------------------------------------------
Net investment income 5.62%*
- ----------------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.25%*
- ----------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $79,045
- ----------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from June 13, 1995 (date of initial
public investment) to October 31, 1995.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING VALUE
<C> <S> <C> <C>
MUNICIPALS--93.9% --------------------------------------------------------------
KANSAS--4.4%
---------------------------------------------------------------
$ 1,000,000 Burlington, KS, PCR, 3.70% (Project A)/(Refunding Bonds
Pollution Control)/(Toronto Dominion Bank LOC), 11/16/1995 AA/A-1+ $ 1,000,000
---------------------------------------------------------------
2,000,000 Burlington, KS, PCR, 3.80% (Project A)/(Refunding Bonds
Pollution Control)/(Toronto Dominion Bank LOC), 11/2/1995 AA/A-1+ 2,000,000
--------------------------------------------------------------- -------------
Total 3,000,000
--------------------------------------------------------------- -------------
MICHIGAN--89.5%
---------------------------------------------------------------
2,800,000 Ann Arbor, MI, Public School District, 4.75% (School
Improvements Refunding Bonds)/(Qualified State Loan Bond Fund),
5/1/1996 AA 2,815,673
---------------------------------------------------------------
1,100,000 Delta County, MI, EDC, 3.45% (Mead Paper Pollution
Control)/(Swiss Bank LOC), 11/6/1995 Aa1/P-1 1,100,000
---------------------------------------------------------------
600,000 Delta County, MI, EDC, 3.45% (Mead Paper Pollution
Control)/(Union Bank of Switzerland LOC), 11/6/1995 Aaa/P-1 600,000
---------------------------------------------------------------
2,040,000 Delta County, MI, EDC, 3.45% (Mead Paper Pollution
Control)/(Union Bank of Switzerland LOC), 12/4/1995 Aaa/P-1 2,040,000
---------------------------------------------------------------
560,000 Delta County, MI, EDC, 3.55% (Mead Paper Pollution
Control)/(Union Bank of Switzerland LOC),
11/27/1995 Aaa/P-1 560,000
---------------------------------------------------------------
500,000 Delta County, MI, EDC, 3.70% (Mead Paper Pollution
Control)/(Union Bank of Switzerland LOC), 1/11/1996 Aaa/P-1 500,000
---------------------------------------------------------------
1,000,000 Delta County, MI, EDC, 3.75% (Mead Paper Pollution
Control)/(Union Bank of Switzerland LOC), 1/10/1996 Aaa/P-1 1,000,000
---------------------------------------------------------------
970,000 Farmington Hills, MI, EDC, 4.15% (Marketing
Display)/(Comerica Bank LOC) (Subject to AMT),
3/1/1996 NR 970,000
---------------------------------------------------------------
1,000,000 Grand Rapids, MI, EDC, Weekly VRDNs (Series C), (Calder
Refunding Bonds)/(Old Kent Bank LOC)/ (Subject to AMT) A/A-1 1,000,000
---------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------
MICHIGAN--CONTINUED
---------------------------------------------------------------
$ 300,000 Grand Rapids, MI, EDC, Weekly VRDNs (140 Monroe Ltd.
Partnership)/(Old Kent Bank LOC) NR $ 300,000
---------------------------------------------------------------
425,000 Grand Rapids, MI, EDC, Weekly VRDNs (140 Monroe Ltd.
Partnership)/(Old Kent Bank LOC) NR 425,000
---------------------------------------------------------------
1,000,000 Grand Rapids, MI, EDC, Weekly VRDNs (Amway Hotel Corp. Refund
Bonds)/(Old Kent Bank LOC) A/A-1 1,000,000
---------------------------------------------------------------
1,000,000 Grand Rapids, MI, EDC, Weekly VRDNs (Series C)/ (Amway Hotel
Corp. Refunding Bonds)/(Old Kent Bank LOC) A/A-1 1,000,000
---------------------------------------------------------------
920,000 Grand Rapids, MI, IDR, Weekly VRDNs (Classic Die, Inc.
Refunding Bonds)/(National Bank of Detroit LOC)/(Subject to
AMT) NR 920,000
---------------------------------------------------------------
400,000 Kalamazoo, MI, Hospital Finance Authority, 3.75% (Bronson
Methodist Hospital Refunding Bonds)/ (National Bank of Detroit
LOC), 12/1/1995 Aa2/VMIG1 400,000
---------------------------------------------------------------
700,000 Lapeer, MI, EDC, Weekly VRDNs (Rochester Gear)/ (Comerica Bank
LOC)/(Subject to AMT) NR 700,000
---------------------------------------------------------------
1,050,000 Livingston, MI, Educational Service Agency, 4.00% TAN (School
Improvements Special Education),
4/1/1996 NR 1,051,274
---------------------------------------------------------------
500,000 Michigan Higher Education Student Loan, Weekly VRDNs (Series
X11-B)/(Student Loan Refunding Bonds)/(AMBAC Insured)/(Subject
to AMT) Aaaa/VMIG1 500,000
---------------------------------------------------------------
2,500,000 Michigan Higher Education Student Loan, Weekly VRDNs (Series
X11-B)/(Student Loans Refunding Bonds)/(AMBAC Insured)/(Subject
to AMT) Aaa/VMIG1 2,500,000
---------------------------------------------------------------
1,700,000 Michigan Higher Education Student Loan, Weekly VRDNs (Student
Loans Refunding Bonds)/(AMBAC Insured)/(Subject to AMT) Aaa/VMIG1 1,700,000
---------------------------------------------------------------
2,000,000 Michigan Municipal Bond Authority, 4.50% (Series B)/(Cash Flow
Management Miscellaneous Purposes), 7/3/1996 Sp1+ 2,009,024
---------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------
MICHIGAN--CONTINUED
---------------------------------------------------------------
$ 1,500,000 Michigan Municipal Bond Authority, 5.00% (Series A)/(Cash Flow
Management Miscellaneous Purposes), 5/3/1996 Sp1+ $ 1,505,422
---------------------------------------------------------------
800,000 Michigan State Hospital Finance Authority, Weekly VRDNs (Mount
Clemens Hospital)/(Comerica Bank LOC) A1/VMIG1 800,000
---------------------------------------------------------------
1,800,000 Michigan State Hospital Finance Authority, Weekly VRDNs (Series
A)/(Hospital Equipment Loan Program)/(First of America LOC) A1/VMIG1 1,800,000
---------------------------------------------------------------
1,000,000 Michigan State Hospital Finance Authority, Weekly VRDNs (Series
A)/(Hospital Equipment Loan
Program)/(First of America LOC) A1/VMIG1 1,000,000
---------------------------------------------------------------
1,500,000 Michigan State Housing Authority Development Authority, 3.65%
(Series A)/(State Multi-Family
Housing)/(Sanwa Bank Ltd. LOC)/(Subject to AMT),
11/28/1995 Aa3/VMIG1 1,500,000
---------------------------------------------------------------
1,100,000 Michigan State Housing Development Authority, 3.65% (Series
A)/(State Multi-Family Housing)/ (Sanwa Bank Ltd. LOC)/(Subject
to AMT), 11/28/1995 Aa3/VMIG1 1,100,000
---------------------------------------------------------------
85,000 Michigan State Housing Development Authority, 4.65% (Series
A)/(Single Family Housing Refunding Bonds)/(FHA/VA Backed),
12/1/1995 AA+ 85,000
---------------------------------------------------------------
3,000,000 Michigan State Housing Development Authority, Weekly VRDNs
(Series C)/(Rental Housing Revenue Refunding Bonds)/(Credit
Suisse LOC) AA+/A-1+ 3,000,000
---------------------------------------------------------------
2,000,000 Michigan State Housing Development Authority, Weekly VRDNs
(Series C)/(Rental Housing Revenue Refunding Bonds)/(Credit
Suisse LOC) AA+/A-1+ 2,000,000
---------------------------------------------------------------
200,000 Michigan State Strategic Fund Limited Obligation Revenue, 4.60%
(Joseph E. Gesmundo Trust Project)/ (First of America
LOC)/(Subject to AMT), 11/15/1995 NR 200,000
---------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------
MICHIGAN--CONTINUED
---------------------------------------------------------------
$ 210,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Kay Screen Printing, Inc.)/ (Comerica Bank LOC) NR $ 210,000
---------------------------------------------------------------
2,000,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Louisiana Pacific Corp.) Aa2 2,000,000
---------------------------------------------------------------
500,000 Michigan State Strategic Fund Limited Obligation
Revenue, Weekly VRDNs (Pilot Industries, Inc.
Project)/(National Bank of Detroit LOC)/(Subject
to AMT) NR 500,000
---------------------------------------------------------------
320,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project B) NR 320,000
---------------------------------------------------------------
45,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project C) NR 45,000
---------------------------------------------------------------
390,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project D) NR 390,000
---------------------------------------------------------------
105,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project E) NR 105,000
---------------------------------------------------------------
25,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project F) NR 25,000
---------------------------------------------------------------
120,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project A) NR 120,000
---------------------------------------------------------------
15,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project A) NR 15,000
---------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------
MICHIGAN--CONTINUED
---------------------------------------------------------------
$ 800,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Riverfront Development Co. Project B) NR $ 800,000
---------------------------------------------------------------
35,000 Michigan State Strategic Fund Limited Obligation
Revenue, Weekly VRDNs (Riverfront Development
Co. Project B) NR 35,000
---------------------------------------------------------------
1,500,000 Michigan State Strategic Fund Limited Obligation
Revenue, Weekly VRDNs (Rood Industries, Inc.
Project)/(National Bank of Detroit Insured)/(Subject
to AMT) NR 1,500,000
---------------------------------------------------------------
1,500,000 Michigan State Strategic Fund Limited Obligation
Revenue, Weekly VRDNs (Rowe Thomas Co.
Project)/(Comerica Bank LOC)/(Subject to AMT) NR 1,500,000
---------------------------------------------------------------
350,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Series A)/(Whitehall Industries)/(Comerica Bank
LOC)/(Subject to AMT) VMIG1 350,000
---------------------------------------------------------------
350,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Series A-5)/(Sarbeth Investments)/(Comerica Bank
LOC)/(Subject to AMT) VMIG1 350,000
---------------------------------------------------------------
600,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Series C)/(Comerica Bank LOC) VMIG1 600,000
---------------------------------------------------------------
150,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Series A)/(Whitehall Industries)/(Comerica Bank
LOC)/(Subject to AMT) VMIG1 150,000
---------------------------------------------------------------
255,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Starboard Project)/ (Comerica Bank LOC)/(Subject
to AMT) NR 255,000
---------------------------------------------------------------
15,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Starboard Project)/ (Comerica Bank LOC)/(Subject
to AMT) NR 15,000
---------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------
MICHIGAN--CONTINUED
---------------------------------------------------------------
$ 500,000 Michigan State Strategic Fund Limited Obligation Revenue,
Weekly VRDNs (Waltec America Forgings)/ (Subject to AMT) NR $ 500,000
---------------------------------------------------------------
2,500,000 Michigan State Strategic Fund Limited Obligation
Revenue, Weekly VRDNs (Waste Systems, Inc.
Project)/(Bank of America LOC) A1/VMIG1 2,500,000
---------------------------------------------------------------
1,000,000 Michigan State Strategic Fund Limited Obligation
Revenue, Weekly VRDNs (Waste Systems, Inc.
Project)/(Bank of America LOC) A1/VMIG1 1,000,000
---------------------------------------------------------------
1,000,000 Michigan State Strategic Fund Solidwaste Disposal
Revenue, Weekly VRDNs (Grayling Generating
Project)/(Barclays Bank LOC)/(Subject to AMT) Aa2/VMIG1 1,000,000
---------------------------------------------------------------
1,400,000 Michigan State Strategic Fund Solidwaste Disposal
Revenue, Weekly VRDNs (Grayling Generating
Project)/(Barclays Bank LOC)/(Subject to AMT) Aa2/VMIG1 1,400,000
---------------------------------------------------------------
300,000 Michigan State Strategic Fund Solidwaste Disposal
Revenue, Weekly VRDNs (Grayling Generating
Project)/(Barclays Bank LOC)/(Subject to AMT) Aa2/VMIG1 300,000
---------------------------------------------------------------
1,500,000 Michigan State Strategic Fund, 3.55% (Dow Chemical Co.),
12/5/1995 A1/P-1 1,500,000
---------------------------------------------------------------
1,000,000 Michigan State Strategic Fund, IDR, Weekly VRDNs (Allen Group,
Inc. Project)/(Dresdner Bank A.G. LOC) Aaa/VMIG1 1,000,000
---------------------------------------------------------------
200,000 Michigan State Strategic Fund, IDR, Weekly VRDNs (Allen Group,
Inc. Project)/(Dresdner Bank A.G. LOC) Aaa/VMIG1 200,000
---------------------------------------------------------------
500,000 Michigan State Strategic Fund, PCR, 3.40% (Dow Chemical Co.
Project), 11/3/1995 A1/P-1 500,000
---------------------------------------------------------------
500,000 Michigan State Strategic Fund, PCR, 3.75% (Dow Chemical Co.
Project), 11/1/1995 A1/P-1 500,000
---------------------------------------------------------------
</TABLE>
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------
MICHIGAN--CONTINUED
---------------------------------------------------------------
$ 1,000,000 Michigan State Strategic Fund, PCR, 3.75% (Dow Chemical
Co.)/(North Carolina National Bank SPA), 1/24/1996 A1/P-1 $ 1,000,000
---------------------------------------------------------------
1,050,000 Michigan State Strategic Fund, PCR, Weekly VRDNs (General
Motors Corp. Project) A3/VMIG1 1,050,000
---------------------------------------------------------------
420,000 Michigan State Strategic Fund, PCR, Weekly VRDNs (General
Motors Corp. Project) A3/VMIG1 420,000
---------------------------------------------------------------
185,000 Michigan State Strategic Fund, PCR, Weekly VRDNs (General
Motors Corp. Project) A3/VMIG1 185,000
---------------------------------------------------------------
215,000 Michigan State Strategic Fund, PCR, Weekly VRDNs (General
Motors Corp. Project) A3/VMIG1 215,000
---------------------------------------------------------------
1,600,000 Michgan State Strategic Fund, PCR, Weekly VRDNs (General Motors
Corp. Project) A3/VMIG1 1,600,000
---------------------------------------------------------------
500,000 Michigan State Strategic Fund, PCR, Weekly VRDNs (General
Motors Corp. Project) A3/VMIG1 500,000
---------------------------------------------------------------
650,000 Michigan State Strategic Fund, PCR, Weekly VRDNs, (General
Motors Corp. Project) A3/VMIG1 650,000
---------------------------------------------------------------
150,000 Oakland County, MI, EDC, 4.60% (Orchard Maple Project)/(First
of America LOC), 11/15/1995 A-1+ 150,000
--------------------------------------------------------------- -------------
Total 61,536,393
--------------------------------------------------------------- -------------
TOTAL SHORT-TERM MUNICIPAL SECURITIES 64,536,393
--------------------------------------------------------------- -------------
</TABLE>
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C> <C>
MUTUAL FUNDS--6.0%
- --------------------------------------------------------------------------------
655,000 Dreyfus Tax-Exempt Money Market Fund $ 655,000
---------------------------------------------------------------
3,492,000 Nuveen Tax-Exempt Money Market 3,492,000
--------------------------------------------------------------- -------------
TOTAL MUTUAL FUNDS 4,147,000
--------------------------------------------------------------- -------------
TOTAL INVESTMENTS, AT AMORTIZED COST (A) $ 68,683,393
--------------------------------------------------------------- -------------
</TABLE>
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($68,765,175) at October 31, 1995.
The following acronym(s) are used throughout this portfolio:
AMBAC--American Municipal Bond
Assurance Corporation
AMT--Alternative Minimum Tax
EDC--Economic Development Commission
FHA--Federal Housing Administration
FHA/VA--Federal Housing Administration/
Veterans Administration
IDR--Industrial Development Revenue
LOC--Letter of Credit
PCR--Pollution Control Revenue
SPA--Standby Purchase Agreement
TAN--Tax Anticipation Note
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 68,683,392
- ---------------------------------------------------------------------------------------------------
Cash 5,722
- ---------------------------------------------------------------------------------------------------
Income receivable 334,668
- --------------------------------------------------------------------------------------------------- -------------
Total assets 69,023,782
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Income distribution payable $ 180,880
- ---------------------------------------------------------------------------------------
Accrued expenses 77,727
- --------------------------------------------------------------------------------------- ----------
Total liabilities 258,607
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 68,765,175 shares outstanding $ 68,765,175
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
$68,765,175 / 68,765,175 shares outstanding $1.00
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 1,349,875
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 140,118
- ----------------------------------------------------------------------------------------
Administrative personnel and services fee 44,383
- ----------------------------------------------------------------------------------------
Custodian fees 14,467
- ----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 14,712
- ----------------------------------------------------------------------------------------
Directors'/Trustees' fees 2,242
- ----------------------------------------------------------------------------------------
Auditing fees 7,111
- ----------------------------------------------------------------------------------------
Legal fees 1,962
- ----------------------------------------------------------------------------------------
Portfolio accounting fees 18,846
- ----------------------------------------------------------------------------------------
Share registration costs 7,041
- ----------------------------------------------------------------------------------------
Printing and postage 4,694
- ----------------------------------------------------------------------------------------
Insurance premiums 2,592
- ----------------------------------------------------------------------------------------
Miscellaneous 1,401
- ---------------------------------------------------------------------------------------- ----------
Total expenses 259,569
- ----------------------------------------------------------------------------------------
Waiver--
- ----------------------------------------------------------------------------------------
Waiver of investment advisory fee (70,059)
- ---------------------------------------------------------------------------------------- ----------
Net expenses 189,510
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 1,160,365
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 1,160,365 $ 1,741,700
- ------------------------------------------------------------------------- -------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Distributions from net investment income (1,160,365) (1,741,700)
- ------------------------------------------------------------------------- -------------------- ----------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of shares 243,812,780 397,857,305
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 762,359 1,275,765
- -------------------------------------------------------------------------
Cost of shares redeemed (242,666,367) (387,290,113)
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets resulting from share transactions 1,908,772 11,842,957
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets 1,908,772 11,842,957
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 66,856,403 55,013,446
- ------------------------------------------------------------------------- -------------------- ----------------
End of period $ 68,765,175 $ 66,856,403
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
1995 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------
Net investment income 0.02 0.03 0.02 0.02 0.04 0.05 0.05
- -----------------------------------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.02) (0.03) (0.02) (0.02) (0.04) (0.05) (0.05)
- ----------------------------------- ------ --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------- ------ --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 1.69% 2.81% 1.98% 2.27% 3.68% 5.18% 5.14%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.54%* 0.59% 0.50% 0.53% 0.50% 0.67% 0.44%*
- -----------------------------------
Net investment income 3.31%* 2.80% 1.96% 2.23% 3.51% 5.02% 0.00%*
- -----------------------------------
Expense waiver/ reimbursement (c) 0.20%* 0.21% 0.22% 0.20% 0.39% 0.19% 0.39%*
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period
(000 omitted) $68,765 $66,856 $55,013 $84,763 $71,745 $31,705 $28,921
- -----------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from June 14, 1989 (date of initial
public investment) to April 30, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE MONEY MARKET FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Independence One Mutual Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end management investment
company. The Trust consists of five diversified portfolios and two
non-diversified portfolios. The financial statements included herein present
only those of Independence One Michigan Municipal Cash Fund ("Michigan Municipal
Cash Fund"), Independence One Prime Money Market Fund ("Prime Money Market
Fund"), and Independence One U.S. Treasury Money Market Fund ("U.S. Treasury
Money Market Fund"), collectively referred to as the "Funds." The financial
statements of the other portfolios are presented seperately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held.
Effective May 1, 1995, Prime Money Markets Fund's existing shares (Investment
Shares) were designated "Class A" shares and a new class of shares was
designated "Class B" shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Funds use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Funds to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction. The Funds will only enter into repurchase agreements with
banks and other recognized financial institutions, such as broker/dealers,
which are deemed by the Funds' adviser to be creditworthy pursuant to the
guidelines and/or standards reviewed or established by the Board of
Trustees (the "Trustees"). Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
the Funds could receive less than the repurchase price on the sale of
collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Distributions to
shareholders are recorded on the ex-dividend date. Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the
"Code").
INDEPENDENCE ONE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by each Fund with respect to
registration of their shares in their first fiscal year, excluding the
initial expense of registering their shares, have been deferred and are
being amortized using the straight-line method over a period of five years
from each Funds' commencement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At
October 31, 1995, Prime Money Market Fund, Michigan Municipal Cash Fund, and
U.S. Treasury Money Market Fund, capital paid-in aggregated $362,709,024,
$68,765,175, and $278,352,567, respectively. Transactions in shares were as
follows:
<TABLE>
<CAPTION>
PRIME MONEY MARKET FUND
SIX MONTHS YEAR
ENDED ENDED
OCTOBER 31, APRIL 30,
CLASS A SHARES 1995 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 964,015,855 1,885,542,162
- -------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 3,128,125 5,979,695
- -------------------------------------------------------------------------------
Shares redeemed (917,086,480) (1,968,503,461)
- ------------------------------------------------------------------------------- -------------- ----------------
50,057,500 (76,981,604)
-------------- ----------------
</TABLE>
INDEPENDENCE ONE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD YEAR
ENDED ENDED
OCTOBER 31, APRIL 30,
CLASS B SHARES 1995* 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 173,115,148 --
- -------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 29,154 --
- -------------------------------------------------------------------------------
Shares redeemed (94,099,626) --
- ------------------------------------------------------------------------------- -------------- ----------------
79,044,676 --
-------------- ----------------
Net change resulting from share transactions 129,102,176 (76,981,604)
- ------------------------------------------------------------------------------- -------------- ----------------
</TABLE>
*For the period from June 13, 1995 (date of initial public investment) to
October 31, 1995.
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL U.S. TREASURY
CASH FUND MONEY MARKET FUND
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30,
1995 1995 1995 1995
<S> <C> <C> <C> <C>
- ---------------------------------------------
Shares sold 243,812,780 397,857,305 1,170,694,342 1,859,720,057
- ---------------------------------------------
Shares issued to shareholders in
payment of distributions declared 762,359 1,275,765 3,363,168 5,250,905
- ---------------------------------------------
Shares redeemed (242,666,367) (387,290,113) (1,140,592,132) (1,835,916,082)
- --------------------------------------------- -------------- -------------- ---------------- ----------------
Net change resulting from share
transactions 1,908,772 11,842,957 33,465,378 29,054,880
- --------------------------------------------- -------------- -------------- ---------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Michigan National Bank, the Funds' investment adviser
(the "Adviser") receives for its services an annual investment advisory fee of
0.40 of 1% of each of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive a portion of its fee. The Adviser
can modify or terminate this voluntary waiver any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Funds
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
INDEPENDENCE ONE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Michigan National Bank, the Prime Money Market Fund will pay Michigan
National Bank up to 0.25 of 1% of daily average net assets of the Class A shares
for the period. This fee is to obtain certain services for shareholders and to
maintain shareholder accounts.
TRANSFER AGENT FEES--Federated Services Company serves as transfer and dividend
disbursing agent for the Funds for which it receives a fee. This fee is based on
the size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--Federated Services Company maintains the Funds'
accounting records for which it receives a fee. The fee is based on the level of
each Fund's average daily net assets for the period, plus out-of-pocket
expenses.
CUSTODIAN FEES--Michigan National Bank is the Funds' custodian. The fee is based
on the level of each Fund's average daily net assets for the period, plus
out-of-pocket expenses.
GENERAL--Certain of the Officers of the Trust are Officers and Trustees of the
above companies.
(5) CONCENTRATION OF CREDIT RISK
Since the Michigan Municipal Cash Fund invests a substantial portion of its
assets in issuers located in one state, it will be more susceptible to factors
adversely affecting issuers of that state than would be a comparable general
tax-exempt mutual fund. In order to reduce the credit risk associated with such
factors, at October 31, 1995, 62% of the securities in the portfolio of
investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The value of
investments insured by or supported (backed) by a letter of credit from any one
institution or agency did not exceed 14% of total investments.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Robert E. Baker Edward C. Gonzales
Harold Berry President and Treasurer
Clarence G. Frame Jeffrey W. Sterling
Harry J. Nederlander Vice President and Assistant Treasurer
Thomas S. Wilson Jay S. Neuman
Secretary
Gail Cagney
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank,
and are not insured or guaranteed by the U.S. government, the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other government
agency.
Investment in mutual funds involves investment risk, including possible loss of
principal. Although money market funds seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
INDEPENDENCE
ONE
U.S. GOVERNMENT
SECURITIES
FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1995
[LOGO]
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of FEDERATED INVESTORS [LOGO]
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
453777807
G01200-05 (12/95) [LOGO]
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Investor:
I am pleased to present the Semi-Annual Report of Independence One U.S.
Government Securities Fund for the six-month period ended October 31, 1995.
Inside, you will find complete financial information for the fund--beginning
with the portfolio manager's investment review, which is followed by a complete
list of investments and financial statements.
The fund continued to put your money to work pursuing competitive income from a
portfolio of U.S. government securities. At the end of the period, 85.5% of fund
assets were invested in U.S. Treasury obligations, while the remaining assets
were invested in government agency securities and in a repurchase agreement
fully backed by U.S. government securities.+
Dividends paid to shareholders during the period totaled $0.30 per share. The
fund's net asset value increased from $9.79 on the first day of the period to
$10.28 on the last day of the period. The earnings and increase in share price
helped the fund deliver a total return of 8.19% over the period. Total assets in
the fund at the end of the period stood at $68.6 million.*
Thank you for putting your money to work through this portfolio of U.S.
government securities. As always, we welcome your questions, comments, or
suggestions.
Sincerely,
Edward C. Gonzales
President
December 15, 1995
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
+ Shares of the Fund are not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The shares of Independence One U.S. Government Securities Fund represent
interests in the fund, which is one of a series of investment portfolios in the
Independence One Mutual Funds, an open-end, management investment company. The
investment objective of the fund is to seek high current income. In pursuing
this objective, the fund's portfolio will also be managed in an effort to seek
total return. The fund invests only in U.S. government securities.
Intermediate-term interest rates have fallen since April 30, 1995 (the date of
our last Annual Report). For example, ten-year Treasury notes fell in yield over
100 basis points in this period, from 7.05% to 6.01%. This trend in interest
rates has led to an appreciation in the underlying assets of the Fund, as
reflected by the increase in the net asset value per share from $9.79 on April
30, 1995 to $10.28 on October 31, 1995. Total return for the six month period
ended October 31, 1995 was 8.19%.* Total net assets of the fund are
approximately $68.6 million. The average maturity for the fund as of October 31,
1995 was 7.7 years.
The Federal Reserve Open Market Committee (the "Committee") meets eight times a
year to deliberate monetary policy. The Committee has been inactive during most
of 1995. The year began with its federal funds target rate of 5.50% and its
official discount rate at 4.75%. On February 1, 1995, both benchmark rates were
increased by 50 basis points in response to continued signs of economic strength
and fears of building inflation pressures. This increase in managed interest
rates turned out to be the last in the Committee's twelve month tightening
program that raised the federal funds rate a total of 300 basis points. When it
became apparent that the economy had indeed slowed its rate of growth the
Committee reversed its stance. It lowered the federal funds rate by 25 basis
points to 5.75% after its July 6th meeting. Federal Reserve (the "Fed")
policymakers have left this key rate unchanged since that time.
The pace of economic activity picked up during the second half of 1995. Gross
Domestic Product rose 4.2% during the third quarter and is expected to grow at a
2.8% annual rate during the fourth quarter. The unemployment rate has stayed
below 6% all year, and its most recent reading was 5.5% for the month of
October.
All in all, the Fed should be pleased with the overall health of the economy and
the strong performance of both the equity and credit markets. It is our opinion
that the Fed will need solid evidence to shift from their current posture of
"wait and see."
The fund's investment adviser will continue to monitor economic and market
developments to best serve our shareholders.
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
RESULTS OF SPECIAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
A Special Meeting of Independence One Mutual Funds shareholders was held on
September 15, 1995. On June 5, 1995, the record date for shareholders voting at
the meeting, there were 544,073,517 total outstanding shares. The following
items were considered by shareholders and the results of their voting were as
follows:
<TABLE>
<CAPTION>
WITHHELD
AGENDA AUTHORITY
ITEM FOR AGAINST ABSTAIN TO VOTE
<S> <C> <C> <C> <C>
1. Election of Trustee of the Trust.*
Thomas S. Wilson
242,098,318 4,562,052 44,281,883 0
2. To approve or disapprove a new investment advisory contract between the Trust and Michigan National Bank.
5,604,341 151,697 582,643 N/A
3. To approve or disapprove a new sub-advisory agreement between Independence One Capital Management
Corporation and Michigan National Bank.
5,559,513 135,779 643,389 N/A
</TABLE>
* The following Trustees of the Trust continued their terms as Trustee of the
Trust: Robert E. Baker, Harold Berry, Clarence G. Frame, and Harry J.
Nederlander.
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ----------------------------------------------------------------------------------- -------------
GOVERNMENT AGENCIES--12.5%
- --------------------------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE CORPORATION--4.5%
-----------------------------------------------------------------------------------
$ 3,000,000 6.55%, 10/2/2002 $ 3,061,830
-----------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--8.0%
-----------------------------------------------------------------------------------
5,000,000 8.25%, 12/18/2000 5,490,800
----------------------------------------------------------------------------------- -------------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $8,389,165) 8,552,630
----------------------------------------------------------------------------------- -------------
U.S. TREASURY OBLIGATIONS--85.5%
- --------------------------------------------------------------------------------------------------
U.S. TREASURY BONDS--12.8%
-----------------------------------------------------------------------------------
5,500,000 7.125%, 2/15/2023 5,991,810
-----------------------------------------------------------------------------------
2,340,000 8.00%, 11/15/2021 2,799,623
----------------------------------------------------------------------------------- -------------
Total 8,791,433
----------------------------------------------------------------------------------- -------------
U.S. TREASURY NOTES--72.7%
-----------------------------------------------------------------------------------
14,000,000 6.375%, 7/15/1999 14,285,460
-----------------------------------------------------------------------------------
9,500,000 6.375%, 8/15/2002 9,745,765
-----------------------------------------------------------------------------------
7,650,000 7.00%, 4/15/1999 7,947,662
-----------------------------------------------------------------------------------
10,000,000 7.25%, 2/15/1998 10,335,300
-----------------------------------------------------------------------------------
7,000,000 7.25%, 8/15/2004 7,578,760
----------------------------------------------------------------------------------- -------------
Total 49,892,947
----------------------------------------------------------------------------------- -------------
TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST $56,269,323) 58,684,380
----------------------------------------------------------------------------------- -------------
</TABLE>
INDEPENDENCE ONE U.S. GOVERNMENT SECURITES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ----------------------------------------------------------------------------------- -------------
(A)REPURCHASE AGREEMENT--1.1%
- --------------------------------------------------------------------------------------------------
$ 770,000 First Chicago Capital Markets, Inc., 5.85%, dated 10/31/1995,
due 11/1/1995 (at amortized cost) $ 770,000
----------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $65,428,488)(B) $ 68,007,010
----------------------------------------------------------------------------------- -------------
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(b) The cost of investments for federal tax purposes amounts to $65,428,488. The
net unrealized depreciation on a federal tax basis amounts to $2,578,522
which is comprised of $2,578,522 appreciation and $0 depreciation at October
31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($68,641,681) at October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $65,428,488) $ 68,007,010
- ---------------------------------------------------------------------------------------------------
Cash 306
- ---------------------------------------------------------------------------------------------------
Income receivable 1,017,831
- ---------------------------------------------------------------------------------------------------
Deferred expenses 15,864
- --------------------------------------------------------------------------------------------------- -------------
Total assets 69,041,011
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Income distribution payable $ 343,305
- ---------------------------------------------------------------------------------------
Accrued expenses 56,025
- --------------------------------------------------------------------------------------- ----------
Total liabilities 399,330
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 6,675,138 shares outstanding $ 68,641,681
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid-in capital $ 67,082,228
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 2,578,522
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (1,019,069)
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 68,641,681
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
($68,641,681 / 6,675,138 shares outstanding) $10.28
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 2,095,623
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 227,068
- ---------------------------------------------------------------------------------------
Administrative personnel and services fees 41,063
- ---------------------------------------------------------------------------------------
Custodian fees 9,537
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 13,040
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 2,076
- ---------------------------------------------------------------------------------------
Auditing fees 5,579
- ---------------------------------------------------------------------------------------
Legal fees 2,498
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 22,772
- ---------------------------------------------------------------------------------------
Share registration costs 9,732
- ---------------------------------------------------------------------------------------
Printing and postage 3,957
- ---------------------------------------------------------------------------------------
Insurance premiums 2,530
- ---------------------------------------------------------------------------------------
Miscellaneous 4,347
- --------------------------------------------------------------------------------------- -----------
Total expenses 344,199
- ---------------------------------------------------------------------------------------
Waivers--
- --------------------------------------------------------------------------
Waiver of investment advisory fee ($ 194,418)
- --------------------------------------------------------------------------
Waiver of administrative personnel and services fee (18,725)
- -------------------------------------------------------------------------- -----------
Total waivers (213,143)
- --------------------------------------------------------------------------------------- -----------
Net expenses 131,056
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income 1,964,567
- ---------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------------------------
Net realized gain on investments 781,331
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 2,376,963
- ---------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 3,158,294
- ---------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 5,122,861
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 1,964,567 $ 4,075,165
- -----------------------------------------------------------------------
Net realized gain (loss) on investments ($781,331 net gain and $279,170
net loss, respectively, as computed for federal tax purposes) 781,331 (1,670,661)
- -----------------------------------------------------------------------
Net change in unrealized appreciation 2,376,963 1,212,851
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations 5,122,861 3,617,355
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income (1,964,567) (4,075,165)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 7,799,925 5,176,596
- -----------------------------------------------------------------------
Cost of shares redeemed (4,830,681) (15,070,811)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions 2,969,244 (9,894,215)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets 6,127,538 (10,352,025)
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 62,514,143 72,866,168
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 68,641,681 $ 62,514,143
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
1995 1995 1994 1993(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.79 $ 9.84 $ 10.31 $ 10.00
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------
Net investment income 0.30 0.60 0.55 0.33
- -------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.49 (0.05) (0.47) 0.31
- ------------------------------------------------------------- ------- --------- --------- -----------
Total from investment operations 0.79 0.55 0.08 0.64
- -------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------
Distributions from net investment income (0.30) (0.60) (0.55) (0.33)
- ------------------------------------------------------------- ------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 10.28 $ 9.79 $ 9.84 $ 10.31
- ------------------------------------------------------------- ------- --------- --------- -----------
TOTAL RETURN (B) 8.19 % 5.90% 0.66% 4.61 %
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 0.40 %* 0.35% 0.31% 0.17 %*
- -------------------------------------------------------------
Net investment income 6.04 %* 6.23% 5.32% 5.59 %*
- -------------------------------------------------------------
Expense waiver/reimbursement (c) 0.66 %* 0.70% 0.70% 0.83 %*
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $68,642 $62,514 $72,866 $87,704
- -------------------------------------------------------------
Portfolio turnover 61 % 75% 20% 0 %
- -------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from January 11, 1993 (date of initial
public investment) to April 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Independence One Mutual Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Trust consists of five diversified portfolios and two
non-diversified portfolios. The financial statements included herein are only
those of Independence One U.S. Government Securities Fund (the "Fund"). The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTION--Distributions to shareholders
are recorded on the ex-dividend date. Interest income and expenses are
accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
At April 30, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $290,986, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire as follows:
<TABLE>
<CAPTION>
EXPIRATION YEAR EXPIRATION AMOUNT
<S> <C>
2002 $ 11,816
2003 $279,170
</TABLE>
Additionally, net capital losses of $1,509,414 attributable to security
transactions incurred after October 31, 1994 were treated as arising on May
1, 1995, the first day of the Fund's next taxable year.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 769,620 534,859
- -----------------------------------------------------------------------
Shares redeemed (477,292) (1,558,503)
- ----------------------------------------------------------------------- ---------- ----------------
Net change resulting from share transactions 292,328 (1,023,644)
- ----------------------------------------------------------------------- ---------- ----------------
</TABLE>
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Michigan National Bank, the Fund's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.70 of 1% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
Under the terms of a sub-advisory agreement between the Adviser and Independence
One Capital Management Corporation ("Sub-Adviser"), the Sub-Adviser will assist
the Adviser in the purchase or sale of the Fund's portfolio instruments. The
Sub-Adviser will perform its duties at no cost to the Adviser or the Fund.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AGENT FEES--Federated Services Company serves as transfer and dividend
disbursing agent for the Fund. This fee is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--Federated Services Company maintains the Trust's
accounting records for which it receives a fee. The fee is based on the level of
the Trust's average daily net assets for the period, plus out-of-pocket
expenses.
CUSTODIAN FEES--Michigan National Bank is the Fund's custodian. The fee is based
on the level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $49,664 were borne initially
by Federated Administrative Services.
The Fund has agreed to reimburse Federated Administrative Services for the
organizational expenses during the five year period following the effective
date. For the period ended October 31, 1995, the Fund paid $4,886 pursuant to
this agreement.
GENERAL--Certain of the Officers and of the Trust are Officers and Trustees of
the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended
October 31, 1995, were as follows:
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
PURCHASES-- $ 40,670,607
- --------------------------------------------------------------------------------------------------- -------------
SALES-- $ 37,498,527
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Robert E. Baker Edward C. Gonzales
Harold Berry President and Treasurer
Clarence G. Frame Jeffrey W. Sterling
Harry J. Nederlander Vice President and Assistant Treasurer
Thomas S. Wilson Jay S. Neuman
Secretary
Gail Cagney
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or
any other government agency. Investment in mutual funds involves
investment risk, including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the fund's prospectus which contains facts concerning its
