<PAGE>
SIERRA MONEY FUNDS
SEMI-ANNUAL REPORT for the six months ended December 31, 1997
[Graphic Omitted]
---------------
SIERRA
TRUST FUNDS
---------------
A Family of Mutual Funds
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES 1
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS 3
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 4
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY 6
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS:
Global Money Fund 8
---------------------------------------------------------------------------
U.S. Government Money Fund 11
---------------------------------------------------------------------------
California Money Fund 14
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS:
Global Money Fund 17
---------------------------------------------------------------------------
U.S. Government Money Fund 19
---------------------------------------------------------------------------
California Money Fund 20
---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 22
- --------------------------------------------------------------------------------
----------------
SIERRA
TRUST FUNDS
----------------
A Family of Mutual Funds
<PAGE>
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
We are pleased to bring you the SIERRA TRUST MONEY FUNDS semi-annual report for
the six-months ended December 31, 1997.
I would like to take this opportunity to thank you, our shareholders, for your
support and trust in the momentous undertakings of the last six months. As you
know, the merger of GREAT WESTERN FINANCIAL CORPORATION, SIERRA'S former parent
company, and WASHINTGON MUTUAL, INC. on July 1, 1997, has provided opportunities
to benefit from increased assets under management while pursuing greater
operating efficiencies. I am confident that the results of these initiatives
will begin to be realized in the coming months. This year has proved a momentous
year also for the U.S. financial markets as well. Against a backdrop of
shrinking budget deficits, the lowest unemployment rate in a quarter of a
century, and continued moderate inflation, the U.S. stock market achieved its
third consecutive year of 20%+ returns.
Some market watchers suggest that the stock market's record-setting returns
may reflect a new reality in economic and corporate efficiency. Nevertheless, we
believe that the 10% to 12% annual return that stocks have produced during
longer periods will remain the rule rather than the exception. Investors should
realize that average annual returns in excess of 20% are exceptional and
unlikely to continue indefinitely. Future short-term volatility could be sparked
by a wide range of developments, including uncertainty in foreign markets and
non-financial events such as worldwide weather patterns and the so-called Year
2000 problem (when computer programs could be thrown off by a technical glitch).
MARKET HIGHLIGHTS
- --------------------------------------------------------------------------------
Throughout 1997, the U.S. financial markets turned in some of the best
perfomance around the globe. Stocks rose to record highs while bond yields fell
as bond values rose. More people than ever are investing in mutual funds. New
investment inflows into stock mutual funds continued to climb in 1997. During
1990, net new cash flow into stock mutual funds was $12.8 billion, according the
Investment Company Institute (ICI). In comparison, during 1996 net new
investment reached $221.60 billion, and totaled $176.85 billion through the
first nine months of 1997. Overall bond in-flows have also risen, to $24.13
billion through the first nine months of 1997, compared with $9.38 billion for
the same time period during 1996, according to ICI.
Returns from foreign markets reflected difficult times in some regions, and
showed the path to recovery in others. With the Asian market volatility as a
backdrop, the average emerging market fund in the Morningstar universe dropped
17.8% during the fourth quarter, down 7.1% on the year. Diversified foreign
funds dropped an average of 4.4% during the quarter, but rose 3.3% for the year.
Funds that invest solely in Japan were off 18.7% in 1997, while funds dedicated
to the emerging and newly emergent markets of the Pacific Rim dropped 35.4%.+
TAKE A LOOK AT TAX RELIEF
- --------------------------------------------------------------------------------
One of the major events of the year occurred in August, when President Clinton
signed The Taxpayer Relief Act of 1997. Among other things, this will reduce the
top long-term capital gains tax rate from 28% to 20%. Other provisions of this
important legislation introduced new IRA rules and several new types of IRAs.
One, called the Roth IRA, allows withdrawals of non-deductible contributions and
investment earnings tax and penalty free after five years.
The change in tax legislation may have a significant impact on your personal
financial plan and long-term strategy for achieving your financial goals. Your
investment professional can help you assess how the new capital gains rules may
affect your after-tax portfolio returns. He or she can also assist you in
evaluating new strategies for achieving long-term retirement and
education-related financial goals. Of course, should you have any questions
about your investments, particularly during periods of market volatility, I urge
you to speak with your investment professional before making changes to your
portfolio.
We at SIERRA AND COMPOSITE welcome the opportunity to continue to serve you in
the coming years -- years that we believe will present both challenges and
significant opportunities for wealth accumulation.
Sincerely,
KEITH B. PIPES
President
+ Source: Morningstar
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------------------------------------
SIERRA TRUST FUNDS
DECEMBER 31, 1997 (UNAUDITED)
<CAPTION>
U.S.
GLOBAL GOVERNMENT CALIFORNIA
MONEY MONEY MONEY
FUND FUND FUND
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Note 2)
See portfolios of investments (a) ........... $180,010,011 $36,780,635 $40,353,337
Cash (b) ....................................... 367,943 28,948 63,404
Interest receivable ............................ 1,049,538 41,351 301,681
Receivable for Fund shares sold ................ 4,598,205 387,200 158,286
Prepaid expenses and other assets .............. 7,689 1,413 6,338
------------ ----------- -----------
Total Assets ............................... 186,033,386 37,239,547 40,883,046
------------ ----------- -----------
LIABILITIES:
Payable for Fund shares redeemed ............... 3,482,892 58,686 100,703
Investment advisory fee payable (Note 3) ....... 15,815 1,486 4,339
Administration fee payable (Note 3) ............ 47,484 11,629 10,410
Shareholder servicing and distribution fees
payable (Note 5) ............................. 27,904 8,379 8,715
Dividends payable .............................. 770,385 2,436 97,049
Accrued legal and audit fees ................... 15,190 10,390 11,133
Accrued transfer agent fees .................... 76,115 9,940 7,924
Accrued Trustees' fees and expenses (Note 4) ... 2,286 560 501
Accrued registration and filing fees payable ... 1,837 1,823 498
Accrued expenses and other payables ............ 35,582 9,238 7,296
------------ ----------- -----------
Total Liabilities ......................... 4,475,490 114,567 248,568
------------ ----------- -----------
NET ASSETS ..................................... $181,557,896 $37,124,980 $40,634,478
============ =========== ===========
- ----------------
(a) INVESTMENTS, AT COST (NOTE 2) .............. $180,010,011 $36,780,635 $40,353,337
(b) CASH, AT COST (NOTE 2) ..................... $ 367,943 $ 28,948 $ 63,404
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
- --------------------------------------------------------------------------------------------
SIERRA TRUST FUNDS
DECEMBER 31, 1997 (UNAUDITED)
<CAPTION>
U.S.
GLOBAL GOVERNMENT CALIFORNIA
MONEY MONEY MONEY
FUND FUND FUND
------------ ------------ -----------
<S> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income/
(distributions in excess of
net investment income) ................... $ (18,040) $ 7,450 $ 2,364
Accumulated net realized gain/(loss) on
investments sold ......................... 20,637 (14,400) (40,974)
Paid-in capital ............................ 181,555,299 37,131,930 40,673,088
------------ ------------ -----------
Total Net Assets ....................... $181,557,896 $ 37,124,980 $40,634,478
============ ============ ===========
NET ASSETS:
Class A Shares ............................. $ 97,095,640 $ 22,220,073 $40,569,917
============ ============ ===========
Class B Shares ............................. $ 1,082,408 $ 1,743,093 $ 62,352
============ ============ ===========
Class S Shares ............................. $ 7,200,375 $ 376,719 $ 1,165
============ ============ ===========
Class I Shares ............................. $ 76,179,473 $ 12,785,095 $ 1,044
============ ============ ===========
SHARES OUTSTANDING:
Class A Shares ............................. 97,195,667 22,226,785 40,611,655
============ ============ ===========
Class B Shares ............................. 1,081,148 1,743,619 62,417
============ ============ ===========
Class S Shares ............................. 7,191,990 376,832 1,166
============ ============ ===========
Class I Shares ............................. 76,090,756 12,788,957 1,045
============ ============ ===========
CLASS A SHARES:
Net asset value and offering price per share
of beneficial interest outstanding* ...... $1.00 $1.00 $1.00
============ ============ ===========
CLASS B SHARES:
Net asset value and offering price per share
of beneficial interest outstanding* ...... $1.00 $1.00 $1.00
============ ============ ===========
CLASS S SHARES:
Net asset value and offering price per share
of beneficial interest outstanding* ...... $1.00 $1.00 $1.00
============ ============ ===========
CLASS I SHARES:
Net asset value, offering and redemption
price per share of beneficial interest
outstanding ............................... $1.00 $1.00 $1.00
============ ============ ===========
- --------------
* Redemption price per share is equal to Net Asset Value less any applicable contingent
deferred sales charge.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------------------
SIERRA TRUST FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<CAPTION>
U.S.
GLOBAL GOVERNMENT CALIFORNIA
MONEY MONEY MONEY
FUND FUND FUND
---------- -------- --------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ................................... $5,427,732 $983,608 $768,512
---------- -------- --------
EXPENSES:
Investment advisory fee (Note 3) ........... 381,013 70,803 84,624
Administration fee (Note 3) ................ 285,760 53,102 63,468
Custodian fees ............................. 6,015 3,451 1,860
Legal and audit fees ....................... 18,482 7,469 10,109
Trustees' fees and expenses (Note 4) ....... 5,358 1,751 1,864
Registration and filing fees ............... 17,696 12,572 4,438
Transfer agent fees ........................ 132,418 16,544 11,933
Other ...................................... 23,198 7,356 5,935
Shareholder servicing and distribution fees
(Note 5):
Class A Shares ........................... 125,571 35,833 52,804
Class B Shares ........................... 6,377 7,084 330
Class S Shares ........................... 37,422 1,840 6
Fees waived by investment advisor (Note 3) . (293,029) (68,570) (57,056)
---------- -------- --------
Subtotal ............................... 746,281 149,235 180,315
Credits allowed by the custodian (Note 3) .. (5,601) (502) (160)
---------- -------- --------
Net expenses ........................... 740,680 148,733 180,155
---------- -------- --------
NET INVESTMENT INCOME ...................... 4,687,052 834,875 588,357
---------- -------- --------
NET REALIZED GAIN ON INVESTMENTS
(Notes 2 and 6):
Realized gains from security transactions .. 198 87 --
---------- -------- --------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ............................... $4,687,250 $834,962 $588,357
========== ======== ========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
SIERRA TRUST FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<CAPTION>
U.S.
GLOBAL GOVERNMENT CALIFORNIA
MONEY MONEY MONEY
FUND FUND FUND
------------ ----------- -----------
<S> <C> <C> <C>
Net investment income .............................................. $ 4,687,052 $ 834,875 $ 588,357
Net realized gain on investments sold during the period ............ 198 87 --
------------ ----------- -----------
Net increase in net assets resulting from operations ............... 4,687,250 834,962 588,357
Distributions to shareholders from:
Net investment income:
Class A Shares ................................................... (2,447,628) (676,033) (587,657)
Class B Shares ................................................... (26,508) (28,380) (673)
Class S Shares ................................................... (154,763) (7,287) (12)
Class I Shares ................................................... (2,076,561) (123,169) (14)
Net increase/(decrease) in net assets from Fund share transactions:
Class A Shares ................................................... (7,458,802) (8,302,350) (2,353,310)
Class B Shares ................................................... (227,639) (58,477) (5,256)
Class S Shares ................................................... 312,305 31,060 12
Class I Shares ................................................... (2,577,327) 12,787,911 16
------------ ----------- -----------
Net increase/(decrease) in net assets .............................. (9,969,673) 4,458,237 (2,358,537)
NET ASSETS:
Beginning of period ................................................ 191,527,569 32,666,743 42,993,015
------------ ----------- -----------
End of period ...................................................... $181,557,896 $37,124,980 $40,634,478
============ =========== ===========
Undistributed net investment income/
(distributions in excess of net investment
income) at end of period ......................................... $ (18,040) $ 7,450 $ 2,364
============ =========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
SIERRA TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 1997
<CAPTION>
U.S.
GLOBAL GOVERNMENT CALIFORNIA
MONEY MONEY MONEY
FUND FUND FUND
------------ ----------- -----------
<S> <C> <C> <C>
Net investment income ............................................. $ 8,358,725 $ 1,538,677 $ 1,285,640
Net realized gain on investments sold during the year ............ 28,755 1,221 --
------------ ----------- -----------
Net increase in net assets resulting from operations .............. 8,387,480 1,539,898 1,285,640
Distributions to shareholders from:
Net investment income:
Class A Shares ................................................... (6,014,055) (1,489,830) (1,284,111)
Class B Shares ................................................... (35,704) (34,499) (1,373)
Class S Shares ................................................... (524,764) (14,303) (125)
Class I Shares ................................................... (1,791,867) (45) (31)
Net realized gains on investments:
Class A Shares ................................................... (6,663) -- --
Class B Shares ................................................... (47) -- --
Class S Shares ................................................... (689) -- --
Class I Shares ................................................... (1,886) -- --
Net increase/(decrease) in net assets from Fund share transactions:
Class A Shares ................................................... (49,022,567) (8,514,104) (8,287,958)
Class B Shares ................................................... 887,004 1,690,377 (79,592)
Class S Shares ................................................... (14,073,140) (93,121) (9,276)
Class I Shares ................................................... 78,668,083 1,045 1,029
------------ ----------- -----------
Net increase/(decrease) in net assets .............................. 16,471,185 (6,914,582) (8,375,797)
NET ASSETS:
Beginning of year .................................................. 175,056,384 39,581,325 51,368,812
End of year ........................................................ $191,527,569 $32,666,743 $42,993,015
============ =========== ===========
Undistributed net investment income at end of year ................. $ 368 $ 7,444 $ 2,363
============ =========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS -- CAPITAL STOCK ACTIVITY
- ------------------------------------------------------------------------------------------------------------------
SIERRA TRUST FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
Since the Funds have sold, issued as reinvestment of dividends and redeemed shares only at a constant net asset
value of $1.00 per share, the number of shares represented by such sales, reinvestments and redemptions is the
same as the amounts shown below for such transactions.
<CAPTION>
U.S.
GLOBAL GOVERNMENT CALIFORNIA
MONEY MONEY MONEY
FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
AMOUNT
CLASS A:
Sold ............................................................. $247,096,254 $168,843,699 $ 17,464,645
Issued as reinvestment of dividends .............................. 2,256,260 597,436 568,467
Redeemed ......................................................... (256,811,316) (177,743,485) (20,386,422)
------------ ------------ ------------
Net decrease ..................................................... $ (7,458,802) $ (8,302,350) $ (2,353,310)
============ ============ ============
CLASS B:
Sold ............................................................. $ 922,179 $ 16,411,036 $ 100
Issued as reinvestment of dividends .............................. 22,523 20,871 671
Redeemed ......................................................... (1,172,341) (16,490,384) (6,027)
------------ ------------ ------------
Net decrease ..................................................... $ (227,639) $ (58,477) $ (5,256)
============ ============ ============
CLASS S:
Sold ............................................................. $ 2,462,912 $ 408,432 $ --
Issued as reinvestment of dividends .............................. 147,234 7,995 12
Redeemed ......................................................... (2,297,841) (385,367) --
------------ ------------ ------------
Net increase ..................................................... $ 312,305 $ 31,060 $ 12
============ ============ ============
CLASS I:
Sold ............................................................. $ 8,096,073 $ 12,665,000 $ --
Issued as reinvestment of dividends .............................. -- 122,911 16
Redeemed ......................................................... (10,673,400) -- --
------------ ------------ ------------
Net increase/(decrease) .......................................... $ (2,577,327) $ 12,787,911 $ 16
============ ============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS -- CAPITAL STOCK ACTIVITY
- ------------------------------------------------------------------------------------------------------------------
SIERRA TRUST FUNDS
FOR THE YEAR ENDED JUNE 30, 1997*
Since the Funds have sold, issued as reinvestment of dividends and redeemed shares only at a constant net asset
value of $1.00 per share, the number of shares represented by such sales, reinvestments and redemptions is the
same as the amounts shown below for such transactions.
<CAPTION>
U.S.
GLOBAL GOVERNMENT CALIFORNIA
MONEY MONEY MONEY
FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
AMOUNT
CLASS A:
Sold ............................................................. $432,669,575 $195,434,265 $ 33,810,325
Issued as reinvestment of dividends .............................. 5,643,238 1,372,176 1,243,547
Redeemed ......................................................... (487,335,380) (205,320,545) (43,341,830)
------------ ------------ ------------
Net decrease ..................................................... $(49,022,567) $ (8,514,104) $ (8,287,958)
============ ============ ============
CLASS B:
Sold ............................................................. $ 2,657,885 $ 28,086,537 $ 2,200
Issued as reinvestment of dividends .............................. 29,526 25,185 1,341
Redeemed ......................................................... (1,800,407) (26,421,345) (83,133)
------------ ------------ ------------
Net increase/(decrease) .......................................... $ 887,004 $ 1,690,377 $ (79,592)
============ ============ ============
CLASS S:
Sold ............................................................. $ 7,644,275 $ 4,927,941 $ --
Issued as reinvestment of dividends .............................. 506,468 13,781 124
Redeemed ......................................................... (22,223,883) (5,034,843) (9,400)
------------ ------------ ------------
Net decrease ..................................................... $(14,073,140) $ (93,121) $ (9,276)
============ ============ ============
CLASS I:
Sold ............................................................. $ 81,006,393 $ 1,000 $ 1,000
Issued as reinvestment of dividends .............................. -- 45 29
Redeemed ......................................................... (2,338,310) -- --
------------ ------------ ------------
Net increase ..................................................... $ 78,668,083 $ 1,045 $ 1,029
============ ============ ============
------------
- --------------
* The Funds began selling Class I shares, in addition to Class A, Class B and Class S shares, on July 25, 1996.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------------
GLOBAL MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS A SHARES
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
12/31/97 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95 06/30/94 06/30/93
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- -------- -------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.025 0.048 0.051 0.049 0.030 0.031
Net realized gain on investments .............. 0.000# 0.000# 0.000# 0.000# 0.000# --
------- -------- -------- -------- ------- -------
Total from investment operations .............. 0.025 0.048 0.051 0.049 0.030 0.031
LESS DISTRIBUTIONS:
Dividends from net investment income .......... (0.025) (0.048) (0.051) (0.049) (0.030) (0.031)
Distributions from net realized gains ......... -- (0.000)# (0.000)# (0.000)# (0.000)# --
------- -------- -------- -------- ------- -------
Total distributions ........................... (0.025) (0.048) (0.051) (0.049) (0.030) (0.031)
------- -------- -------- -------- ------- -------
Net asset value, end of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======== ======== ======== ======= =======
TOTAL RETURN+ ................................. 2.49% 4.88% 5.22% 5.06% 3.04% 3.17%
======= ======== ======== ======== ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......... $97,096 $104,302 $153,786 $110,012 $53,973 $48,283
Ratio of operating expenses to average net
assets ....................................... 0.85%** 0.75% 0.65% 0.54% 0.45% 0.41%
Ratio of net investment income to average net
assets ....................................... 4.85%** 4.78% 5.04% 5.08% 2.99% 3.15%
Ratio of operating expenses to average net
assets without credits allowed by the
custodian .................................... 0.86%**(a) 0.75%(a) 0.65%(a) N/A N/A N/A
Ratio of operating expenses to average net
assets without fee waivers, expenses absorbed
and/or credits allowed by the custodian ...... 1.16%**(a) 1.15%(a) 1.15%(a) 1.18% 1.35% 1.32%
Net investment income per share without fee
waivers, expenses absorbed and/or credits
allowed by the custodian ..................... $ 0.023(a) $ 0.044(a) $ 0.046(a) $ 0.043 $ 0.021 $ 0.022
- ----------------
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if
certain fees had not been waived and/or expenses absorbed by the investment advisor and/or administrator or without
credits allowed by the custodian.
# Amount represents less than $0.001 per share.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by amended
disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------
GLOBAL MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS B SHARES
---------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR
12/31/97 ENDED ENDED ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95*
----------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................... 0.021 0.040 0.043 0.042
Net realized gain on investments ......... 0.000# 0.000# 0.000# 0.000#
------ ------ ------ ------
Total from investment operations ......... 0.021 0.040 0.043 0.042
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.021) (0.040) (0.043) (0.042)
Distributions from net realized gains .... -- (0.000)# (0.000)# (0.000)#
------ ------ ------ ------
Total distributions ...................... (0.021) (0.040) (0.043) (0.042)
------ ------ ------ ------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
TOTAL RETURN+ ............................ 2.11% 4.11% 4.40% 4.29%
====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Net assets, end of period (in 000's) ..... $1,082 $1,314 $ 422 $ 241
Ratio of operating expenses to average net
assets .................................. 1.60%** 1.50% 1.40% 1.29%
Ratio of net investment income to average
net assets .............................. 4.10%** 4.03% 4.29% 4.33%
Ratio of operating expenses to average net
assets without credits allowed by the
custodian ............................... 1.61%**(a) 1.50%(a) 1.40%(a) N/A
Ratio of operating expenses to average net
assets without fee waivers, expenses
absorbed and/or credits allowed by the
custodian ............................... 1.91%**(a) 1.90%(a) 1.90%(a) 1.93%
Net investment income per share without
fee waivers, expenses absorbed and/or
credits allowed by the custodian ........ $0.019(a) $0.036(a) $0.038(a) $0.036
- ----------------
* On July 1, 1994 the Fund commenced selling Class B shares in addition to Class A shares. Those shares in
existence prior to July 1, 1994 were designated Class A shares.
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have
been lower if certain fees had not been waived and/or expenses absorbed by the investment advisor
and/or administrator or without credits allowed by the custodian.
# Amount represents less than $0.001 per share.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as
required by amended disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------
GLOBAL MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS S SHARES CLASS I SHARES
----------------------------------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR YEAR YEAR ENDED PERIOD
12/31/97 ENDED ENDED ENDED 12/31/97 ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95* (UNAUDITED) 06/30/97*
----------- -------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------- ------ ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............ 0.021 0.040 0.043 0.042 0.026 0.047
Net realized gain on investments . 0.000# 0.000# 0.000# 0.000# 0.000# 0.000#
------ ------ ------- ------ ------- -------
Total from investment operations . 0.021 0.040 0.043 0.042 0.026 0.047
LESS DISTRIBUTIONS:
Dividends from net investment
income .......................... (0.021) (0.040) (0.043) (0.042) (0.026) (0.047)
Distributions from net realized
gains ........................... -- (0.000)# (0.000)# (0.000)# -- (0.000)#
------ ------ ------- ------ ------- -------
Total distributions .............. (0.021) (0.040) (0.043) (0.042) (0.026) (0.047)
------ ------ ------- ------ ------- -------
Net asset value, end of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ======= ====== ======= =======
TOTAL RETURN+ .................... 2.11% 4.11% 4.40% 4.29% 2.61% 4.79%
====== ====== ======= ====== ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) .......................... $7,200 $6,909 $20,848 $7,399 $76,179 $79,002
Ratio of operating expenses to
average net assets .............. 1.60%** 1.50% 1.40% 1.29% 0.60%** 0.50%**
Ratio of net investment income to
average net assets .............. 4.10%** 4.03% 4.29% 4.33% 5.10%** 5.03%**
Ratio of operating expenses to
average net assets without
credits allowed by the
custodian ....................... 1.61%**(a) 1.50%(a) 1.40%(a) N/A 0.61%**(a) 0.50%**(a)
Ratio of operating expenses to
average net assets without fee
waivers, expenses absorbed and/
or credits allowed by the
custodian ....................... 1.91%**(a) 1.90%(a) 1.90%(a) 1.93% 0.91%**(a) 0.90%**(a)
Net investment income per share
without fee waivers, expenses
absorbed and/ or credits
allowed by the custodian ........ $0.019(a) $0.036(a) $ 0.038(a) $0.036 $ 0.024(a) $ 0.043(a)
- ----------------
* On July 1, 1994 the Fund commenced selling Class S shares in addition to Class A shares. Those shares in existence
prior to July 1, 1994 were designated Class A shares. On July 25, 1996 the Fund commenced selling Class I shares.
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if
certain fees had not been waived and/or expenses absorbed by the investment advisor and/or administrator or without
credits allowed by the custodian.
# Amount represents less than $0.001 per share.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by amended
disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.GOVERNMENT MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS A SHARES
-------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
12/31/97 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95 06/30/94 06/30/93
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.024++ 0.046 0.047 0.046 0.027 0.027
------- ------- ------- ------- ------- -------
Total from investment operations ............... 0.024 0.046 0.047 0.046 0.027 0.027
LESS DISTRIBUTIONS:
Dividends from net investment income ........... (0.024) (0.046) (0.047) (0.046) (0.027) (0.027)
------- ------- ------- ------- ------- -------
Total distributions ............................ (0.024) (0.046) (0.047) (0.046) (0.027) (0.027)
------- ------- ------- ------- ------- -------
Net asset value, end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
TOTAL RETURN+ .................................. 2.40% 4.66% 4.81% 4.67% 2.67% 2.70%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........... $22,220 $30,519 $39,031 $47,492 $30,180 $36,802
Ratio of operating expenses to average net
assets ........................................ 0.85%** 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of net investment income to average net
assets ........................................ 4.72%** 4.56% 4.70% 4.63% 2.68% 2.69%
Ratio of operating expenses to average net
assets without credits allowed by the
custodian ..................................... 0.85%**(a) 0.85%(a) 0.85%(a) N/A N/A N/A
Ratio of operating expenses to average net
assets without fee waivers, and/or credits
allowed by the custodian ...................... 1.24%**(a) 1.19%(a) 1.22%(a) 1.25% 1.32% 1.34%
Net investment income per share without fee
waivers, and/or credits allowed by the
custodian ..................................... $ 0.022++(a) $ 0.043(a) $ 0.043(a) $ 0.042 $ 0.022 $ 0.022
- ---------------
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if certain
fees had not been waived by the investment advisor and/or administrator or without credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by amended
disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
U.S GOVERNMENT MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS B SHARES
-------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR
12/31/97 ENDED ENDED ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95*
----------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................... 0.020++ 0.038 0.040 0.038
------ ------ ------ ------
Total from investment operations ........................ 0.020 0.038 0.040 0.038
LESS DISTRIBUTIONS:
Dividends from net investment income .................... (0.020) (0.038) (0.040) (0.038)
------ ------ ------ ------
Total distributions ..................................... (0.020) (0.038) (0.040) (0.038)
------ ------ ------ ------
Net asset value, end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
TOTAL RETURN+ ........................................... 2.01% 3.87% 4.02% 3.91%
====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................... $1,743 $1,801 $ 112 $ 123
Ratio of operating expenses to average net assets ....... 1.60%** 1.60% 1.60% 1.60%
Ratio of net investment income to average net assets .... 3.97%** 3.81% 3.95% 3.88%
Ratio of operating expenses to average net assets
without credits allowed by the custodian ............... 1.60%**(a) 1.60%(a) 1.60%(a) N/A
Ratio of operating expenses to average net assets
without fee waivers and/or credits allowed by the
custodian .............................................. 1.99%**(a) 1.94%(a) 1.97%(a) 2.00%
Net investment income per share without fee waivers
and/or credits allowed by the custodian ................ $0.018++(a) $0.035(a) $0.036(a) $0.034
- ----------------
* On July 1, 1994 the Fund commenced selling Class B shares in addition to Class A shares. Those shares in existence prior to July
1, 1994 were designated Class A shares.
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if certain
fees had not been waived by the investment advisor and/or administrator or without credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by amended
disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS S SHARES CLASS I SHARES
----------------------------------------------- --------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR YEAR YEAR ENDED PERIOD
12/31/97 ENDED ENDED ENDED 12/31/97 ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95* (UNAUDITED) 06/30/97*
----------- -------- -------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.020++ 0.038 0.040 0.038 0.025++ 0.045
------ ------ ------ ------ ------ ------
Total from investment operations .................... 0.020 0.038 0.040 0.038 0.025 0.045
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.020) (0.038) (0.040) (0.038) (0.025) (0.045)
------ ------ ------ ------ ------ ------
Total distributions ................................. (0.020) (0.038) (0.040) (0.038) (0.025) (0.045)
------ ------ ------ ------ ------ ------
Net asset value, end of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
TOTAL RETURN+ ....................................... 2.01% 3.87% 4.02% 3.91% 2.53% 4.60%
====== ====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ................ $ 377 $ 346 $ 439 $ 737 $12,785 $ 1
Ratio of operating expenses to average net assets ... 1.60%** 1.60% 1.60% 1.60% 0.60%** 0.60%**
Ratio of net investment income to average net assets 3.97%** 3.81% 3.95% 3.88% 4.97%** 4.81%**
Ratio of operating expenses to average net assets
without credits allowed by the custodian .......... 1.60%**(a) 1.60%(a) 1.60%(a) N/A 0.60%**(a) 0.60%**(a)
Ratio of operating expenses to average net assets
without fee waivers and/or credits allowed by the
custodian .......................................... 1.99%**(a) 1.94%(a) 1.97%(a) 2.00% 0.99%**(a) 0.94%**(a)
Net investment income per share without fee waivers
and/or credits allowed by the custodian ............ $0.018++(a) $0.035(a) $0.036(a) $0.034 $0.023++(a) $0.042(a)
- ----------------
* On July 1, 1994 the Fund commenced selling Class S shares in addition to Class A shares. Those shares in existence prior to July
1, 1994 were designated Class A shares. On July 25, 1996 the Fund commenced selling Class I shares.
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if certain
fees had not been waived by the investment advisor and/or administrator or without credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by amended
disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS A SHARES
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
12/31/97 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95 06/30/94 06/30/93
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................... 0.014++ 0.028 0.029 0.028 0.018 0.021
------- ------- ------- ------- ------- -------
Total from investment operations ................ 0.014 0.028 0.029 0.028 0.018 0.021
LESS DISTRIBUTIONS:
Dividends from net investment income ............ (0.014) (0.028) (0.029) (0.028) (0.018) (0.021)
------- ------- ------- ------- ------- -------
Total distributions ............................. (0.014) (0.028) (0.029) (0.028) (0.018) (0.021)
------- ------- ------- ------- ------- -------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
TOTAL RETURN+ ................................... 1.41% 2.81% 3.00% 2.79% 1.81% 2.07%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............ $40,570 $42,923 $51,211 $48,836 $62,500 $68,404
Ratio of operating expenses to average net
assets ......................................... 0.85%** 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of net investment income to average net
assets ......................................... 2.78%** 2.75% 2.94% 2.73% 1.80% 2.06%
Ratio of operating expenses to average net
assets without credits allowed by the
custodian ...................................... 0.85%**(a) 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of operating expenses to average net assets
without fee waivers and/or credits allowed by
the custodian .................................. 1.12%**(a) 1.14% 1.14% 1.15% 1.27% 1.29%
Net investment income per share without fee
waivers and/or credits allowed by the custodian. $ 0.013++(a) $ 0.025 $ 0.026 $ 0.025 $ 0.014 $ 0.016
- ----------------
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if certain
fees had not been waived by the investment advisor and/or administrator.
++ Per share numbers have been calculated using the average shares method.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by amended
disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------
CALIFORNIA MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS B SHARES
-----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR
12/31/97 ENDED ENDED ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95*
----------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................... 0.010++ 0.020 0.022 0.020
------ ------ ------ ------
Total from investment operations ......... 0.010 0.020 0.022 0.020
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.010) (0.020) (0.022) (0.020)
------ ------ ------ ------
Total distributions ...................... (0.010) (0.020) (0.022) (0.020)
------ ------ ------ ------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
TOTAL RETURN+ ............................ 1.01% 2.03% 2.22% 2.04%
====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Net assets, end of period (in 000's) ..... $ 62 $ 68 $ 147 $ 79
Ratio of operating expenses to average net
assets .................................. 1.60%** 1.60% 1.60% 1.60%
Ratio of net investment income to average
net assets .............................. 2.03%** 2.00% 2.19% 1.98%
Ratio of operating expenses to average net
assets without credits allowed by the
custodian ............................... 1.60%**(a) 1.60% 1.60% 1.60%
Ratio of operating expenses to average net
assets without fee waivers and/or credits
allowed by the custodian ................ 1.87%**(a) 1.89% 1.89% 1.90%
Net investment income per share without
fee waivers and/or credits allowed by the
custodian ............................... $0.009++(a) $0.017 $0.019 $0.017
- ----------------
* On July 1, 1994 the Fund commenced selling Class B shares in addition to Class A shares. Those shares in existence
prior to July 1, 1994 were designated Class A shares.
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if
certain fees had not been waived by the investment advisor and/or administrator.
++ Per share numbers have been calculated using the average shares method.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by
amended disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
CLASS S SHARES CLASS I SHARES
---------------------------------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR YEAR YEAR ENDED PERIOD
12/31/97 ENDED ENDED ENDED 12/31/97 ENDED
(UNAUDITED) 06/30/97 06/30/96 06/30/95* (UNAUDITED) 06/30/97*
----------- -------- -------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................... 0.010++ 0.020 0.022 0.020 0.015++ 0.028
------ ------ ------ ------ ------ ------
Total from investment operations ................ 0.010 0.020 0.022 0.020 0.015 0.028
LESS DISTRIBUTIONS:
Dividends from net investment income ............ (0.010) (0.020) (0.022) (0.020) (0.015) (0.028)
------ ------ ------ ------ ------ ------
Total distributions ............................. (0.010) (0.020) (0.022) (0.020) (0.015) (0.028)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
TOTAL RETURN+ ................................... 1.01% 2.03% 2.22% 2.04% 1.54% 2.89%
====== ====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............ $ 1 $ 1 $ 10 $ 10 $ 1 $ 1
Ratio of operating expenses to average net
assets ......................................... 1.60%** 1.60% 1.60% 1.60% 0.60%** 0.60%**
Ratio of net investment income to average net
assets ......................................... 2.03%** 2.00% 2.19% 1.98% 3.03%** 3.00%**
Ratio of operating expenses to average net
assets without credits allowed by the
custodian ...................................... 1.60%**(a) 1.60% 1.60% 1.60% 0.60%**(a) 0.60%**
Ratio of operating expenses to average net
assets without fee waivers and/or credits
allowed by the custodian ....................... 1.87%**(a) 1.89% 1.89% 1.90% 0.87%**(a) 0.89%**
Net investment income per share without fee
waivers and/or credits allowed by the custodian. $0.009++(a) $0.017 $0.019 $0.017 $0.014++(a) $0.025
- ----------------
* On July 1, 1994 the Fund commenced selling Class S shares in addition to Class A shares. Those shares in existence prior to July
1, 1994 were designated Class A shares. On July 25, 1996 the Fund commenced selling Class I shares.
** Annualized.
+ Total return represents aggregate total return for the periods indicated. The total returns would have been lower if certain
fees had not been waived by the investment advisor and/or administrator.
++ Per share numbers have been calculated using the average shares method.
(a) The ratio and per share number includes custodian fees without credits allowed by the custodian as required by amended
disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
GLOBAL MONEY FUND
DECEMBER 31, 1997 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------- --------
COMMERCIAL PAPER -- (DOMESTIC) - 29.0%
$8,000,000 American Express Credit Corporation,
6.450% due 01/02/1998++ .......................... $ 7,998,567
8,000,000 Associates Corporation of North America,
5.720% due 03/10/1998++ ......................... 7,913,564
9,000,000 Bayer Company,
5.750% due 02/24/1998++ ......................... 8,922,375
General Electric Capital Corporation:
3,000,000 5.700% due 01/23/1998++ ......................... 2,989,550
2,000,000 5.700% due 02/06/1998++ ......................... 1,988,600
9,000,000 NationsBank Corporation,
5.750% due 02/23/1998++ ......................... 8,923,812
9,000,000 Pfizer Inc.,
5.950% due 01/28/1998++ ......................... 8,959,837
5,000,000 Southern Corporation,
5.700% due 02/23/1998++ ......................... 4,958,042
------------
Total Commercial Paper -- (Domestic) (Cost
$52,654,347) ..................................... 52,654,347
------------
U.S. GOVERNMENT AGENCY DISCOUNT NOTES -- 22.3%
40,513,000 Federal Home Loan Bank (FHLB):
4.500% due 01/02/1998++ (Cost $40,507,936) ....... 40,507,936
------------
CERTIFICATES OF DEPOSIT -- (YANKEE) -- 20.9%
9,000,000 Bank of Tokyo -- Mitsubishi Bank
6.500% due 03/04/1998 ........................... 9,000,000
3,000,000 Barclays Bank Plc,
5.940% due 06/19/1998 ........................... 2,999,389
5,000,000 Deutsche Bank,
5.700% due 02/06/1998 ........................... 4,999,811
5,000,000 Norinchukin Bank, New York,
6.020% due 02/13/1998 ........................... 5,000,059
2,000,000 Rabobank Nederland,
5.990% due 03/24/1998 ........................... 1,999,786
5,000,000 Swiss Bank Corporation,
5.980% due 03/19/1998 ........................... 4,999,799
9,000,000 Westdeutsche Landesbank Girozentra,
5.900% due 01/12/1998 ........................... 9,000,000
------------
Total Certificates of Deposit -- (Yankee) (Cost
$37,998,844) ..................................... 37,998,844
------------
MEDIUM-TERM NOTES -- 15.4%
$5,000,000 BankBoston,
6.140% due 10/06/1998+ .......................... $ 4,997,955
9,000,000 Bayerische Landesbank,
5.870% due 06/26/1998+ .......................... 8,996,624
5,000,000 CoreStates Bank,
6.009% due 03/16/1998+ .......................... 5,000,000
9,000,000 Key Bank,
6.120% due 07/31/1998+ .......................... 8,996,446
------------
Total Medium-Term Notes (Cost $27,991,025) ........ 27,991,025
------------
COMMERCIAL PAPER -- (FOREIGN) -- 9.3%
8,000,000 Abbey National North America Corporation,
5.735% due 03/10/1998++ ......................... 7,913,338
KFW International Finance Inc.:
7,000,000 5.700% due 02/12/1998++ ......................... 6,953,450
2,000,000 5.740% due 01/29/1998++ ......................... 1,991,071
------------
Total Commerical Paper -- (Foreign) (Cost
$16,857,859) ..................................... 16,857,859
------------
CERTIFICATES OF DEPOSIT -- (DOMESTIC) -- 2.2%
4,000,000 CoreStates Bank,
5.598% due 04/21/1998 (Cost $4,000,000) .......... 4,000,000
------------
TOTAL INVESTMENTS (COST $180,010,011*) ............... 99.1% 180,010,011
OTHER ASSETS AND LIABILITIES (NET) ................... 0.9% 1,547,885
---- ------------
NET ASSETS ........................................... 100.0% $181,557,896
===== ============
- ----------------
* Aggregate cost for federal tax purposes.
+ Variable rate security. The interest rate shown reflects the rate currently
in effect.
++ Rate represents annualized yield at date of purchase.
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
- -------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY FUND
DECEMBER 31, 1997 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------- --------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 99.1%
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) -- 52.9%
$ 520,000 Discount Note, 5.63% due 01/16/1998++ ..... $ 518,780
630,000 Discount Note, 5.64% due 01/26/1998++ ..... 627,533
2,000,000 Discount Note, 5.74% due 01/27/1998++ ..... 1,991,709
2,000,000 Discount Note, 5.66% due 02/17/1998++ ..... 1,985,221
2,000,000 Discount Note, 5.65% due 02/18/1998++ ..... 1,984,933
850,000 Discount Note, 5.65% due 02/24/1998++ ..... 843,051
1,800,000 Discount Note, 5.63% due 03/09/1998++ ..... 1,781,139
1,000,000 Discount Note, 5.63% due 03/13/1998++ ..... 988,896
1,500,000 Discount Note, 5.60% due 03/20/1998++ ..... 1,481,800
1,500,000 Discount Note, 5.59% due 03/27/1998++ ..... 1,480,202
2,000,000 Discount Note, 5.57% due 04/13/1998++ ..... 1,968,437
2,000,000 Floating Rate Note 5.894% due 10/20/1998+ . 1,999,304
2,000,000 Floating Rate Note 5.944% due 11/04/1998+ . 1,999,022
-----------
Total FNMAs (Cost $19,650,027) ............ 19,650,027
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) -- 40.2%
4,800,000 Discount Note, 6.00% due 01/02/1998++ ..... 4,799,200
1,525,000 Discount Note, 5.70% due 01/26/1998++ ....... 1,518,964
1,900,000 Discount Note, 5.70% due 01/30/1998++ ....... 1,891,276
1,500,000 Discount Note, 5.65% due 02/12/1998++ ....... 1,490,113
1,500,000 Discount Note, 5.65% due 02/19/1998++ ....... 1,488,465
1,000,000 Discount Note, 5.65% due 02/20/1998++ ....... 992,153
1,250,000 Discount Note, 5.65% due 02/23/1998++ ....... 1,239,602
1,500,000 Discount Note, 5.60% due 03/06/1998++ ....... 1,485,066
-----------
Total FHLMCs (Cost $14,904,839) ............. 14,904,839
-----------
FEDERAL HOME LOAN BANK (FHLB) -- 6.0%
2,241,000 5.69% due 02/13/1998 (Cost $2,225,769)++ .... 2,225,769
-----------
Total U.S. Government Agency Obligations
(Cost $36,780,635) ......................... 36,780,635
-----------
TOTAL INVESTMENTS (COST $36,780,635*) ................... 99.1% 36,780,635
OTHER ASSETS AND LIABILITIES (NET) ...................... 0.9 344,345
----- -----------
NET ASSETS .............................................. 100.0% $37,124,980
===== ===========
- ----------------
* Aggregate cost for federal tax purposes.
+ Variable rate securities payable upon not more than seven calendar days'
notice. The interest rate shown reflects the rate currently in effect.
++ Rate represents annualized yield at date of purchase.
See Notes to Financial Statements.
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
- ----------------------------------------------------------------------------------------------
CALIFORNIA MONEY FUND
DECEMBER 31, 1997 (UNAUDITED)
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------- --------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 99.3%
CALIFORNIA-99.3%
Alameda County, IDR:
$1,945,000 Heat and Control Inc., Series 95A,
3.700% due 11/01/2025++ .............................. $1,945,000
2,000,000 JMS Family Partnership, Series 95A,
3.700% due 10/01/2025++ .............................. 2,000,000
2,000,000 Berkley, GO, Unified School District, TRAN,
4.250% due 06/30/1998 ................................ 2,003,570
California Housing Finance Agency, SFMR, Home Mortgage
Revenue, Series 15A:
2,000,000 3.950% due 08/01/1998 ................................ 2,000,000
2,100,000 4.200% due 08/01/2025++ .............................. 2,100,000
California Pollution Control Financing Authority:
2,000,000 Pacific Gas & Electric, Series 96A,
3.450% due 12/01/2016++ .............................. 2,000,000
2,000,000 Sanifill Inc., Series 94A,
3.850% due 08/01/2007++ .............................. 2,000,000
2,000,000 Shell Oil Company-Martinez Project, Series 94A,
4.900% due 10/01/2024 ................................ 2,000,000
2,000,000 Southern California Edison Co., Series A,
4.200% due 02/28/2008+ ............................... 2,000,000
2,000,000 California State Economic Development Authority, IDR,
Tri-Valley Growers., Series 95F,
3.850% due 12/01/2010++ .............................. 2,000,000
500,000 California Statewide Communities Projects, Chevron Corp.,
Series 97G,
4.950% due 12/15/2024+ ............................... 500,000
1,200,000 California Statewide Communities Projects, MFHR, Sunrise
of Moraga, Series 97G,
3.950% due 07/01/2027++ .............................. 1,200,000
2,000,000 Irvine Ranch, Water District, Series B
4.750% due 08/01/2009+ ............................... 2,000,000
2,000,000 Livermore, MFHR, Portola Meadows Apartments, Series 89A,
3.800% due 05/01/2019++ .............................. 2,000,000
3,500,000 Los Angeles County, MFHR, Series 85K,
3.600% due 7/01/2010++ ............................... 3,500,000
800,000 Los Angeles County, Unified School District, Belmont
Learning Complex, Series 97A,
3.350% due 12/01/2017++ .............................. 800,000
2,000,000 Orange County, Apartment Development Revenue, Wood Canyon
Villas,
3.500% due 12/01/2021++ .............................. 2,000,000
$2,000,000 Orange County, Fire Authority, TRAN,
4.250% due 09/17/1998 ................................ 2,004,767
1,100,000 Orange County, Sanitation Districts,
5.000% due 08/01/2016+ ............................... 1,100,000
900,000 Palm Springs, Community Redevelopment Agency,
3.850% due 12/01/2014++ .............................. 900,000
300,000 San Bernardino County, IDR, Master Holco Inc.,
3.650% due 12/01/2006++ .............................. 300,000
2,000,000 San Leandro, MFHR, Carlton Plaza, Series 97A,
4.000% due 10/01/2027++ .............................. 2,000,000
2,000,000 Southern California Public Power Authority, Southern
Transmission Project,
3.350% due 07/01/2019++ .............................. 2,000,000
-----------
TOTAL INVESTMENTS (COST $40,353,337*) ............................. 99.3% 40,353,337
OTHER ASSETS AND LIABILITIES (NET) ................................ 0.7 281,141
----- -----------
NET ASSETS ........................................................ 100.0% $40,634,478
===== ===========
- ----------------
* Aggregate cost for federal tax purposes.
+ Variable rate demand notes payable upon not more than one business day's notice. The
interest rate shown reflects the rate currently in effect.
++ Variable rate demand notes payable upon not more than seven calendar days' notice. The
interest rate shown reflects the rate currently in effect.
GLOSSARY OF TERMS
-------------------------------------------------------
IDR -- Industrial Development Revenue
MFHR -- Multi-family Housing Revenue
SFMR -- Single Family Mortgage Revenue
TRAN -- Tax and Revenue Anticipation Note
-------------------------------------------------------
See notes to Financial Statements.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
SIERRA TRUST FUNDS
1. ORGANIZATION AND BUSINESS
Sierra Trust Funds (the "Trust") was organized under the laws of the
Commonwealth of Massachusetts on February 22, 1989 as a business entity
commonly known as a "Massachusetts business trust." The Trust is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company. The Trust offers sixteen managed
investment funds: the Global Money, U.S. Government Money and California Money
Funds (the "Money Funds"); the Short Term High Quality Bond, Short Term Global
Government, U.S. Government and Corporate Income Funds (the "Bond Funds"); the
California Municipal, Florida Insured Municipal, California Insured
Intermediate Municipal and National Municipal Funds (the "Municipal Funds");
the Growth and Income, Growth, Emerging Growth and International Growth Funds
(the "Equity Funds"); and the Target Maturity 2002 Fund. Information presented
in these financial statements pertains only to the Money Funds, hereafter
referred to as the "Funds." The financial statements for the Bond Funds,
Municipal Funds, Equity Funds and Target Maturity 2002 Fund are presented in a
separate report.
Each of the Funds consists of four classes of shares, Class A Shares, Class B
Shares, Class S Shares and Class I Shares. Class A Shares of the Funds are not
subject to an initial sales charge; however, certain Class A Shares received
in exchange for such shares may be subject to a contingent deferred sales
charge ("CDSC") if redeemed within one year or two years of purchase,
depending on the circumstances. Class B Shares and Class S Shares are not
subject to an initial sales charge. Class B and Class S Shares are subject to
a CDSC if redeemed within six years of purchase. Class B Shares of the Funds
are not available for purchase directly and may be purchased only by exchange
for Class B Shares of the Bond Funds, the Municipal Funds or the Equity Funds.
Class I Shares are sold exclusively to the various investment portfolios of
Sierra Asset Management Portfolios, an open-end management investment company,
and are not available for direct purchase by investors. Class I Shares are not
subject to an initial sales charge or CDSC, but are subject to other annual
operating expenses of the Funds. Class I Shares for the U.S. Government Money
and California Money Funds represents seed shares owned by Sierra Fund
Administration Corporation ("Sierra Administration").
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. The following is a summary
of significant accounting policies consistently followed by the Funds in the
preparation of their financial statements.
PORTFOLIO VALUATION:
The investments of each Fund are valued on the basis of amortized cost so long
as the Trust's Board of Trustees (the "Board of Trustees") determines that
this method constitutes fair value. Amortized cost involves valuing a
portfolio instrument at its cost initially and, thereafter, assuming a
constant amortization to maturity of any discount or premium, regardless of
the impact of fluctuating interest rates on the market value of the
instrument. Each Fund attempts to maintain a constant net asset value of $1.00
per share.
REPURCHASE AGREEMENTS:
Each Fund may engage in repurchase agreement transactions. Under the terms of
a typical repurchase agreement, the Fund through its custodian takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed upon
price and time, thereby determining the yield during the Fund's holding
period. This arrangement results in a fixed rate of return that is not subject
to market fluctuations during the Fund's holding period. The value of the
collateral is at least equal at all times to the total amount of the
repurchase obligation, including interest. In the event of counterparty
default, the Fund has the right to use the collateral to offset losses
incurred. There is potential loss to the Fund in the event the Fund is delayed
or prevented from exercising its right to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. Each Fund's respective Sub-advisor, acting under the supervision of
the Trust's investment advisor, Sierra Investment Advisors Corporation
("Sierra Advisors"), and the Board of Trustees, reviews the value of the
collateral and the creditworthiness of those banks and dealers with which the
Fund enters into repurchase agreements to evaluate potential risks.
ILLIQUID INVESTMENTS:
Up to 10% of the assets of each Fund may be invested in securities that are
not readily marketable, including: (1) repurchase agreements with maturities
greater than seven calendar days; (2) time deposits maturing in more than
seven calendar days; (3) certain variable rate demand notes having a demand
period of more than seven days; and (4) securities, the disposition of which
are restricted under Federal securities laws, excluding certain Rule 144A
securities, as defined below.
Illiquid securities generally cannot be sold or disposed of in the ordinary
course of business within seven days at approximately the value at which the
Funds have valued the investments. This may have an adverse effect on the
Fund's ability to dispose of particular illiquid securities at fair market
value and may limit the Fund's ability to obtain accurate market quotations
for purposes of valuing the securities and calculating the net asset value of
shares of the Fund. The Funds may also purchase securities that are not
registered under the Securities Act of 1933, as amended (the "Act"), but that
can be sold to qualified institutional buyers in accordance with Rule 144A
under that Act ("Rule 144A Securities"). Rule 144A securities generally may be
resold only to other qualified institutional buyers. If a particular
investment in Rule 144A securities is not determined to be liquid under the
guidelines established by the Board of Trustees, that investment will be
included within the 10% limitation on investments in illiquid securities.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date (the date the order
to buy or sell is executed). Realized gains and losses from securities sold
are recorded on the identified cost basis. Interest income is recorded on the
accrual basis and consists of interest accrued and, if applicable, discount
earned less premiums amortized. Each Fund's investment income and realized
gains and losses are allocated among the classes of that Fund based upon the
relative average net assets of each class.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income of each Fund are declared daily and paid
monthly. Distributions of any net long-term capital gains earned by a Fund are
made annually. Distributions of any net short-term capital gains earned by a
Fund are distributed no less frequently than annually at the discretion of the
Board of Trustees. Additional distributions of net investment income and
capital gains for each Fund may be made at the discretion of the Board of
Trustees in order to avoid the application of a 4% non-deductible excise tax
on certain undistributed amounts of ordinary income and capital gains.Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to timing differences and
differing characterization of distributions made by each Fund as a whole.
FEDERAL INCOME TAXES:
It is each Fund's policy to qualify as a regulated investment company by
complying with the requirements of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies and by, among other
things, distributing substantially all of its taxable and tax-exempt earnings
to its shareholders. Therefore, no Federal income tax provision is required.
EXPENSES:
General expenses of the Trust are allocated to all the Funds based upon
relative net assets of each Fund. Operating expenses directly attributable to
a class of shares are charged to the operations of that class of shares.
Expenses of each Fund not directly attributable to the operations of any class
of shares are prorated among the classes to which the expenses relate based on
the relative average net assets of each class of shares.
3. INVESTMENT ADVISORY, SUB-ADVISORY, ADMINISTRATION FEES AND OTHER
TRANSACTIONS
Sierra Advisors, an indirect wholly-owned subsidiary of Washington Mutual,
Inc. ("Washington Mutual"), a publicly held corporation, serves as investment
advisor to the Trust. J.P. Morgan Investment Management Inc. ("J.P. Morgan"),
a wholly-owned subsidiary of J.P. Morgan & Co. Incorporated, a publicly traded
company, serves as the Sub-advisor to the Global Money Fund. Alliance Capital
Management L.P. ("Alliance Capital"), a limited partnership whose general
partner is Alliance Capital Management Corporation, an indirect wholly-owned
subsidiary of The Equitable Life Assurance Society of the United States,
serves as the Sub-advisor to the U.S. Government Money and California Money
Funds.
Sierra Advisors is entitled to a monthly fee, in arrears, based on a
percentage of the average daily net assets of each Fund during the month, out
of which Sierra Advisors pays the Sub-advisor of each Fund a monthly fee, in
arrears, at annual rates as follows:
FEES ON ASSETS
EQUAL TO OR FEES ON ASSETS
LESS THAN EXCEEDING
$500 MILLION $500 MILLION
-------------- --------------
Sierra Advisors+ .............................. .35% .25%
Sub-advisor ................................... .15% .15%
--- ---
Total fees paid to Sierra Advisors* ....... .50% .40%
=== ===
- ---------------
*Sierra Advisors retains only the net amount of the fees after sub-advisory
fees have been paid.
+Fees paid to Sierra Advisors are based on aggregate assets in the three
Funds.
For each Fund, Sierra Advisors has contractually agreed to limit the annual
management fees that are payable under the investment advisory agreements with
the Funds to.40%.
Fees voluntarily waived by Sierra Advisors for the six months ended December
31, 1997 are as follows:
NAME OF FUND FEES WAIVED
------------ -----------
Global Money Fund ......................................... $293,029
U.S. Government Money Fund ................................ 68,570
California Money Fund ..................................... 57,056
Sierra Administration, an indirect wholly-owned subsidiary of Washington
Mutual, serves as administrator to each Fund.First Data Investor Services
Group, Inc., a wholly-owned subsidiary of First Data Corporation, serves as
sub-administrator and transfer agent to each Fund. For its services as
administrator to each Fund, Sierra Administration is entitled to a monthly fee
at an annual rate of .30% of each Fund's average daily net assets. Out of its
fee, Sierra Administration pays First Data Investor Services Group, Inc. for
its services as sub-administrator and transfer agent. First Data Investor
Services Group, Inc., as sub-administrator, is paid a gross annual fee of
$1.71 million on the first $1.6 billion of aggregate average daily net assets
of the Trust, plus fees at the annual rate of .0452% on the next $1.3 billion
aggregate average daily net assets of the Trust, .0429% on the next $1.7
billion aggregate average daily net assets of the Trust and .0362% on the next
$3.1 billion aggregate average daily net assets of the Trust. The Trust pays
First Data Investor Services Group, Inc. certain out-of-pocket expenses as
transfer agent.
The Trust also pays Boston Safe Deposit and Trust Company ("Boston Safe"), the
Trust's custodian, certain custodial transaction charges. Boston Safe is a
wholly-owned subsidiary of Mellon Bank Corporation.
Custodian fees for certain Funds have been reduced by credits allowed by
Boston Safe for the six month ended December 31, 1997 as follows:
CREDITS ALLOWED BY
NAME OF FUND THE CUSTODIAN
------------ ------------------
Global Money Fund .......................................... $5,601
U.S. Government Money Fund ................................. 502
California Money Fund ...................................... 160
For the six months ended December 31, 1997, Sierra Services and Funds
Distributor Inc. informed the Funds that they received $53,970 from CDSC fees.
4. TRUSTEES' FEES
No director, officer or employee of Washington Mutual or its subsidiaries, the
Sub-advisors or First Data Investor Services Group, Inc., or any of their
affiliates receives any compensation from the Trust for serving as an officer
or Trustee of the Trust. The Trust pays each Trustee who is not a director,
officer or employee of Washington Mutual or its subsidiaries, the Sub-advisors
or First Data Investor Services Group, Inc., or any of their affiliates,
$7,500 per annum plus $1,500 per board meeting attended, $1,000 per audit and/
or nominating committee meeting attended and reimbursement for travel and out-
of-pocket expenses. The Lead Trustee receives one and a half times the normal
Trustee's compensation. The Chairman of the Audit Committee receives $1,500
per audit committee meeting attended.
For the six months ended December 31, 1997, Sierra Advisors reimbursed the
Funds for Trustees' fees paid in connection with all special meetings held
with regards to the contemplation of the sale of Sierra Capital Management
Corporation, as well as, to the proposed merger between GWFC and Washington
Mutual.
Pursuant to an exemptive order granted by the Securities and Exchange
Commission, the Trust's eligible Trustees may participate in a deferred
compensation plan (the "Plan") which may be terminated at any time. Under the
Plan, Trustees may elect to defer receipt of all or a portion of their fees
which, in accordance with the Plan, are invested in mutual fund shares. Upon
termination of the Plan, Trustees that have deferred accounts under the Plan
will be paid benefits not later than the time the payments would otherwise
have been made without regard to such termination. All benefits provided under
the Plan are funded and any payments to Plan participants are paid solely out
of the Trust's assets.
5. DISTRIBUTION PLANS
Sierra Investment Services Corporation ("Sierra Services"), an indirect
wholly-owned subsidiary of Washington Mutual, serves as distributor for Class
A Shares, Class B Shares and Class S Shares of the Funds.
The Trust has adopted a Distribution Plan (the "Class A Plan"), as amended,
pursuant to Rule 12b-1 under the 1940 Act. Under the Class A Plan, Sierra
Services is paid an annual distribution fee of up to .25% of the average daily
net assets of the Class A Shares of each Fund for activities primarily
intended to result in the sale of Fund shares. (The Class A Plan applies to
all Class A Shares of the Funds and all shares of the Funds that were
outstanding at the time of commencement of the offering of Class B Shares or
Class S Shares, which outstanding shares are treated for all purposes as Class
A Shares.) Class B Shares and Class S Shares of the Trust have also adopted a
Rule 12b-1 distribution plan for each of the Class B Shares (the "Class B
Plan") and Class S Shares (the "Class S Plan") of the Funds. Under the Class B
Plan and the Class S Plan, Sierra Services is paid an annual distribution fee
of up to .75% of the average daily net assets of the Class B Shares and Class
S Shares of a Fund for activities primarily intended to result in the sale of
Class B Shares and Class S Shares of the Fund, respectively. In addition,
under the Class B Plan and the Class S Plan, Class B Shares and Class S Shares
are also subject to a service fee at an annual rate of .25% of the average
daily net assets of the Class B Shares and Class S Shares of the Fund,
respectively. The service fee is paid by the Fund to Sierra Services, which in
turn, pays a portion of the service fee to broker/dealers, including GW
Securities, that sell Class B Shares and Class S Shares and provide services,
such as, accepting telephone inquiries and transaction requests and processing
correspondences, new account applications and subsequent purchases by check,
for the shareholders. Under their terms each of the Class A Plan, Class B Plan
and Class S Plan shall remain in effect from year to year, provided such
continuance is approved annually by vote of the Board of Trustees, including a
majority of those Trustees who are not "interested persons" of the Trust, as
defined in the 1940 Act, and who have no direct or indirect financial interest
in the operation of such distribution plans, or any agreements related to such
plans, respectively. Class I Shares are not subject to a Rule 12b-1
distribution plan.
For the six months ended December 31, 1997, the Funds incurred the following
fees pursuant to the respective distribution plans described above:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS S
------------ ------------------------- -------------------------
DISTRIBUTION DISTRIBUTION SERVICE DISTRIBUTION SERVICE
NAME OF FUND FEE FEE FEE FEE FEE
------------ ------------ ------------ ------- ------------ -------
<S> <C> <C> <C> <C> <C>
Global Money Fund ............. $125,571 $4,783 $1,594 $28,066 $9,356
U.S. Government Money Fund .... 35,833 5,313 1,771 1,380 460
California Money Fund ......... 52,804 247 83 5 1
</TABLE>
6. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest, each
without par value.
As of December 31, 1997, Sierra Administration owned greater than five percent
of the following Funds:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
FUND SHARES TOTAL FUND SHARES
-------------------------- -------------------------
NAME OF FUND CLASS S CLASS I CLASS S CLASS I
------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
U.S. Government Money Fund ........................ -- 5,009,113 --% 39%
California Money Fund ............................. 1,166 1,045 100% 100%
</TABLE>
As of December 31, 1997, Sierra Advisors owned greater than five percent of
the following Fund:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
FUND SHARES TOTAL FUND SHARES
-------------------------- -------------------------
NAME OF FUND CLASS S CLASS I CLASS S CLASS I
------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
U.S. Government Money Fund ........................ -- 2,921,414 -- 23%
</TABLE>
As of December 31, 1997, Sierra Services owned greater than five percent of
the following Fund:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
FUND SHARES TOTAL FUND SHARES
-------------------------- -------------------------
NAME OF FUND CLASS S CLASS I CLASS S CLASS I
------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
U.S. Government Money Fund ........................ -- 4,858,430 -- 38%
</TABLE>
7. CAPITAL LOSS CARRYFORWARDS
At December 31, 1997, the following Funds had available for federal income tax
purposes unused capital losses as follows:
<TABLE>
<CAPTION>
EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING
NAME OF FUND IN 2000 IN 2001 IN 2002 IN 2003 IN 2004 IN 2005
------------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Money Fund ...................... $ -- $ -- $9,246 $1,367 $ 2,404 $1,470
California Money Fund ........................... 7,635 5,715 7,549 1,294 18,781 --
</TABLE>
8. GEOGRAPHIC AND INDUSTRY CONCENTRATION
There are certain risks arising from the California Money Fund's concentration
in California municipal securities. Certain California constitutional
amendments, legislative measures, executive orders, administrative
regulations, court decisions and voter initiatives could result in certain
adverse consequences including impairing the ability of certain issuers of
California municipal securities to pay principal and interest on their
obligations.
In addition, the Global Money Fund may invest at least 25% of its assets in
bank obligations. As a result of this concentration policy, the Fund's
investments may be subject to greater risk than a fund that does not
concentrate in the banking industry. In particular, bank obligations may be
subject to the risks associated with interest rate volatility, changes in
Federal and state laws and regulations governing the banking industry and the
inability of borrowers to pay principal and interest when due. In addition,
foreign banks present risks similar to those investing in foreign securities
generally and are not subject to the same reserve requirements and other
regulations as U.S. banks.
The Global Money Fund invests in securities of foreign companies and foreign
governments. There are certain risks involved in investing in foreign
securities that are in addition to the usual risks inherent in domestic
investments. These risks include those resulting from future adverse political
and economic developments and the possible imposition of currency exchange
blockages or other foreign governmental laws or restrictions.
