<PAGE>
M.S.D.&T.
FUNDS, INC.
- -------------------
Semi-Annual Report
- -------------------
November 30, 1995
INVESTMENT ADVISER AND ADMINISTRATOR:
[LOGO OF MERCANTILE-SAFE DEPOSIT
& TRUST COMPANY APPEARS HERE]
Affiliate Mercantille Bankshares Corporation
Baltimore, MD
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C>
Chairman's Letter................................................... i
Statements of Net Assets
Prime Money Market Fund............................................ 1
Government Money Market Fund....................................... 7
Tax-Exempt Money Market Fund....................................... 11
Tax-Exempt Money Market Fund (Trust)............................... 17
Value Equity Fund.................................................. 23
International Equity Fund.......................................... 29
Intermediate Fixed Income Fund..................................... 35
Maryland Tax-Exempt Bond Fund...................................... 40
Investment Abbreviations........................................... 46
Statements of Operations............................................ 47
Statements of Changes in Net Assets................................. 49
Financial Highlights................................................ 53
Notes to Financial Statements....................................... 61
Important Tax Information........................................... 68
</TABLE>
<PAGE>
Dear Shareholder:
It is a pleasure to send you the semi-annual report for the M.S.D.&T. Funds,
Inc. (the "Company") for the six months ended November 30, 1995.
The report includes financial information on the Value Equity, International
Equity, Intermediate Fixed Income and Maryland Tax-Exempt Bond Funds as well
as the Prime, Government, Tax- Exempt and Tax-Exempt (Trust) Money Market
Funds.
The six month period covered in this report was an exceptionally fruitful one
for both equity and fixed income investors. The S&P 500 Index posted a total
return of 14.9% while the Lehman Government/Corporate Intermediate Bond Index
rose 4.8%. Three trends converged to create a positive investment climate.
First, slower economic growth and inflation readings allowed the Federal Re-
serve to begin reducing short-term interest rates in early July. Second, the
U.S. and many European nations charted paths toward reduced government defi-
cits. Third, the dollar staged a major rally, erasing weakness early in the
year and bolstering confidence in U.S. financial markets.
The M.S.D.&T. Value Equity Fund advanced 8.5% in the six months ending Novem-
ber 30, 1995(1). Since its inception in early 1991, the Fund has earned an an-
nual average total return of 11.5%(1). Throughout 1995, international stock
markets have underperformed the U.S. market. The M.S.D.&T. International Eq-
uity Fund(2) was up 3.3% in the six month period ended November 30, 1995 while
the MSCI Europe, Australia, Far East Index rose 2.5%(1).
The past six months were positive for the fixed income markets as interest
rates fell about 0.5 percentage points within the intermediate area of the
yield curve. Market participants were encouraged by statistics pointing to a
slowing economy, lower inflation and an improving outlook on Federal fiscal
policy. Additionally, the Federal Reserve reversed its restrictive monetary
policy in July and began lowering short term rates. Over the six month period
ended November 30, 1995, the Intermediate Fixed Income Fund enjoyed a strong
4.5% total return(1).
Also benefiting from the drop in interest rates, investors in the Maryland
Tax-Exempt Bond Fund experienced a total return of 4.2% for the six month pe-
riod ended November 30, 1995(1). Volatility in the municipal markets remains
high due to the heightened concern of a proposed Federal flat tax and the de-
fault by Orange County, California. These events have kept municipal investors
skittish, although tax-exempt bonds are currently inexpensive relative to tax-
able securities.
Money market yields declined as the Federal Reserve made its first move toward
monetary accommodation and the markets anticipated further interest rate re-
ductions. The M.S.D.&T. Money Market Funds continued to generate competitive
yields while providing stability of principal. The seven-day yields for each
Fund as of November 30, 1995 are detailed below:
<TABLE>
<CAPTION>
PRIME(3) GOVERNMENT(3) TAX-EXEMPT(3) TAX-EXEMPT (TRUST)(3)
-------- ------------- ------------- ---------------------
<S> <C> <C> <C>
5.41% 5.43% 3.36% 3.54%
5.56%(4) 5.86%(4)
</TABLE>
<PAGE>
The consensus economic forecast for 1996 calls for moderate 2.5% growth with a
similarly moderate rate of inflation. The investment adviser's expectation is
less optimistic regarding economic growth and more optimistic on the outlook
for low inflation. A slowing job market, a more cautious credit environment
and the lingering effects of restrictive monetary policy are expected to pro-
duce anemic real GDP growth. Meanwhile, lessened cyclical price pressures and
higher productivity trends should produce a decline in the inflation rate next
year. As the economy and inflation slow, the investment adviser expects the
Federal Reserve to take a more aggressive approach to lowering interest rates.
The pages that follow discuss the performance, structure and strategy of
each Fund, as well as providing a detailed list of assets held(5). We appreci-
ate your investment in the M.S.D.&T. Funds and welcome any comments or ques-
tions regarding the Funds.
Sincerely,
Leslie B. Disharoon
Chairman and President
ii
<PAGE>
SHARES OF THE M.S.D.&T. FUNDS, INC. ARE NOT BANK DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED, ENDORSED, OR OTHERWISE SUPPORTED BY MERCANTILE-SAFE DEPOSIT AND
TRUST COMPANY, ITS PARENT COMPANY OR ITS AFFILIATES, AND SUCH SHARES ARE NOT
FEDERALLY INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPO-
RATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT
IN THE FUNDS INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. FOR MORE
COMPLETE INFORMATION ON THE M.S.D.&T. FUNDS, INC., PLEASE CALL (800) 551-2145
TO RECEIVE A PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING.
BISYS FUNDS SERVICES SERVES AS DISTRIBUTOR.
(1) Total return and principal value of investments will fluctuate with market
changes and shares, when redeemed, may be worth more or less than their origi-
nal cost. Figures for the period indicated reflect fee waivers in effect, re-
investment of dividends, distributions, and capital gains as well as changes
in share price. Fee waivers may result in higher total returns than would oc-
cur if full fees were charged. Past performance is not a guarantee of future
results.
<TABLE>
<CAPTION>
MARYLAND
VALUE INTERNATIONAL INTERMEDIATE TAX-EXEMPT
EQUITY EQUITY FIXED INCOME BOND
FUND FUND FUND FUND
------ ------------- ------------ ----------
<S> <C> <C> <C> <C>
Total Return for the one year
ended
December 31, 1995.............. 24.1% 8.0% 14.4% 14.6%
Inception Date.................. 2/28/91 7/2/93 3/14/91 6/2/92
Average annual total return
since inception to December 31,
1995........................... 11.7% 10.5% 7.1% 6.7%
</TABLE>
(2) International investing is subject to certain factors such as currency ex-
change rate volatility, possible political, social or economic instability,
foreign taxation and/or differences in auditing and other financial standards.
(3) Investments in the money market portfolios are neither insured nor guaran-
teed by the U.S. Government and there is no assurance that a money market fund
will be able to maintain a stable net asset value of $1.00 per share. Yields
will fluctuate as market conditions change. Past performance is not a guaran-
tee of future results.
Figures for the period indicated reflect fee waivers in effect. Fee waivers
may result in higher yields than would occur if full fees were charged. Absent
fee waivers, the seven-day yields for each Fund for the 7-day period ended No-
vember 30, 1995 would have been:
<TABLE>
<CAPTION>
PRIME GOVERNMENT TAX-EXEMPT TAX-EXEMPT (TRUST)
----- ---------- ---------- ------------------
<S> <C> <C> <C>
5.35% 5.35% 3.28% 3.47%
</TABLE>
(4) Taxable Equivalent Yield. Assumes 39.6% tax bracket. A portion of income
may be subject to some state and/or local taxes and for certain investors a
portion of income may be subject to the Federal alternative minimum tax.
(5) The composition of the Funds' holdings is subject to change.
- --------
iii
<PAGE>
THE M.S.D.&T. VALUE EQUITY FUND
The S&P 500 Index enjoyed a powerful 14.9% advance for the first half of the
fiscal year. The stock market was buoyed by rising earnings, a huge rally in
bonds and very strong cash flows into equity mutual funds. The early months of
the period were dominated by soaring technology share prices. During the fall
returns were more broad-based across sectors, with small capitalization issues
posting the strongest gains.
The total return of the Value Equity Fund for the semi-annual period was 8.5%.
Large holdings in financial stocks along with significant exposure to stable
consumer product companies bolstered portfolio returns. However, a less than
market-weight position in technology stocks and moderate cash reserve holdings
led the Fund to underperform the major market averages in this time frame. As
we enter the late stages of the business and earnings cycle, the investment
adviser believes that stocks with more predictable revenue streams and lower
multiples of earnings and book value are most likely to outperform in a fully
valued market. The financial, consumer product and utility sectors are in-
creasingly represented in the portfolio.
In order to achieve the Fund's objectives, the investment adviser employs a
value oriented strategy. So far in 1995, the equity market has rewarded most
handsomely investment strategies based on momentum and rapid sector rotation.
Over the years, though, the value style has excelled at generating strong re-
turns while assuming moderate risk. The M.S.D.&T. Value Equity Fund will con-
tinue to invest in companies with strong franchises and solid balance sheets
that are valued at discounts versus the market and the company's historic val-
uation.
iv
<PAGE>
THE M.S.D.&T. INTERNATIONAL EQUITY FUND
For the six months ended November 30, 1995 the International Equity Fund re-
turned 3.3% which compares favorably to the gain in the MSCI EAFE Index of
2.5%. European stocks posted the strongest returns. In the U.K., continued
high levels of corporate activity, combined with a supportive bond market,
boosted equities to new highs. The French market, hobbled by a strike by gov-
ernment workers and politics, struggled throughout much of the period. Inter-
est rate cuts in Germany pushed stocks higher. This was also the case with the
other hard currency markets of the Netherlands and Switzerland. Spanish equi-
ties performed well as falling bond yields prompted investors to shift assets
into stocks.
Having fallen initially, the Japanese market picked up towards the end of the
period, leaving it flat for the six months. Export stocks continued to do well
given the relative strength of the U.S. dollar. The International Equity
Fund's Japanese exposure was increased to approximately 45% of assets during
the six months, slightly higher than the benchmark's allocation. Australia was
the best performing market in the region returning 8.1% over the period. The
market was primarily supported by metal and banking stocks. Hong Kong also
provided positive returns, although many of the other Asian markets such as
Malaysia declined on concerns of economic overheating.
The sub-adviser remains supportive of most world equity markets. The sub-ad-
viser believes inflationary pressures remain limited and expects to see im-
provements in the global economy. European markets should continue to perform
well going forward. Optimism remains on Asian markets, particularly Japan,
where the portfolio is overweight relative to the MSCI EAFE index. Approxi-
mately one third of the exposure to Japan remains hedged back into U.S. dol-
lars.
v
<PAGE>
THE M.S.D.&T. INTERMEDIATE FIXED INCOME FUND
Over the past six months, interest rates have been tracking the economic sta-
tistics. When the statistics revealed stronger than expected economic growth,
interest rates rose. Alternately, when the statistics showed a weakening econ-
omy and the inflation rate subsiding, interest rates fell. By the close of the
semi-annual period, interest rates were down roughly 0.5 percentage points
across the Treasury yield curve.
During the period, investment quality remained essentially the same with a
slight increase in the Treasury sector. Combined Treasury, Government Agency
and Government Mortgage exposure totaled 88% of the Fund. At this late stage
in the economic cycle, the investment adviser continues to emphasize such high
quality credits. Corporate yield spreads have been narrowing and do not offer
much incremental yield pick up to the Treasury market. If the economy slows in
1996, these spreads should begin to widen and offer more attractive yields.
The average maturity of the Fund was increased by 0.5 years to 4.5 years, with
emphasis being placed in the 5 to 10 year sector of the yield curve. This
helps provide a stream of steady income should short term interest rates fall
in response to an easing of monetary policy by the Federal Reserve.
As a result of the decline in interest rates, the Fund enjoyed a strong rise
in NAV over the period, increasing $0.16 to $10.60 per share. The Fund's 30
day SEC yield was 5.36% at November 30. Looking out over the next twelve to
eighteen months, the investment adviser is forecasting interest rates trending
lower as economic growth is expected to slow further in 1996. As such, invest-
ments in longer term securities will be continued to be made on price weakness
to ensure a continuous stream of high current income.
vi
<PAGE>
THE M.S.D.&T. MARYLAND TAX-EXEMPT BOND FUND
As the economy showed signs of weakening during the six month period ending
November 30, 1995, municipal bond yields plummeted from their December 1994
highs. The market reached its new lows in November. A drastic 1.40 percentage
point decline in interest rates, along with the corresponding rise in bond
prices, resulted in a total return of 4.2% for the six month period ended No-
vember 30, 1995 for the Maryland Tax-Exempt Bond Fund.
Even though the economic and financial condition of the State of Maryland, its
counties, and agencies may not seem as bleak as during the recession of 1991-
1993, the current cutbacks in government expenditures have had a negative ef-
fect on the State's economy. While unemployment remains lower than the na-
tional average, economic activity is still lagging that of many other parts in
the Mid Atlantic region. However, tax rates remain relatively high, and the
counties which increased the local "piggyback" taxes during the recession
still have not rolled them back.
As a result, Maryland bond investors remain subject to relatively high Feder-
al, State, and local taxes. This makes municipal bonds extremely attractive in
order to achieve a similar high level of after tax income. While many state
and local governments have refunded much of their higher cost debt, others are
currently looking to take advantage of the present low rates. This may result
in a decreased supply, relative to past fiscal years, in the months ahead.
The portfolio management philosophy of the investment adviser has been to max-
imize the portfolio's after tax income while maintaining high credit quality
standards. This has resulted in a 13.2 year average life for the portfolio se-
curities. The investment adviser closely monitors the credit quality of all
issuers of securities held by the portfolio for signs of deterioration. While
the portfolio is permitted to hold securities that have a minimum rating of
Baa, the adviser has thus far chosen to invest only in securities rated A or
better.
vii
<PAGE>
M.S.D.&T. FUNDS, INC.
PRIME MONEY MARKET FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
AGENCY OBLIGATIONS....... 25.6%
FEDERAL FARM CREDIT
BANK.................... 2.6%
Discount Notes
5.71%................... 01/18/96 $6,000,000 $5,954,320
Floating Rate Notes**
5.66%................... 02/12/96 4,000,000 4,000,000
----------
9,954,320
----------
FEDERAL HOME LOAN BANK... 2.6%
Floating Rate Notes**
5.61%................... 12/20/95 10,000,000 9,994,085
----------
FEDERAL HOME LOAN
MORTGAGE CORP. ......... 1.4%
Discount Notes
5.53%................... 05/24/96 5,445,000 5,298,892
----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION............. 10.3%
Floating Rate Notes**
5.90%................... 12/01/95 15,000,000 15,000,000
5.67%................... 12/01/95 10,000,000 9,997,153
5.66%................... 12/02/95 14,250,000 14,220,253
----------
39,217,406
----------
STUDENT LOAN MARKETING
ASSOCIATION............. 6.1%
Floating Rate Notes**
5.65%................... 12/05/95 11,000,000 10,995,803
5.65%................... 12/07/95 12,560,000 12,519,426
----------
23,515,229
----------
TENNESSEE VALLEY
AUTHORITY............... 2.6%
Discount Notes
4.19%................... 09/09/96 10,000,000 9,884,157
----------
TOTAL AGENCY
OBLIGATIONS
(Cost $97,864,089)... 97,864,089
----------
</TABLE>
See Accompanying Notes to Financial Statements.
1
<PAGE>
M.S.D.&T. FUNDS, INC.
PRIME MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
BANKERS' ACCEPTANCES...... 9.8%
CoreStates Financial Corp.
5.48%.................... 01/09/96 $6,000,000 $5,964,380
5.66%.................... 02/02/96 5,000,000 4,950,475
5.65%.................... 02/05/96 5,000,000 4,948,208
Republic National Bank New
York
5.60%.................... 01/24/96 7,000,000 6,941,200
5.60%.................... 02/14/96 6,000,000 5,930,000
Union Bank of
Switzerland--New York
Branch
5.57%.................... 01/03/96 9,000,000 8,954,047
----------
TOTAL BANKERS'
ACCEPTANCES
(Cost $37,688,310).... 37,688,310
----------
CERTIFICATES OF DEPOSIT... 16.7%
DOMESTIC.................. 8.9%
National Bank of Detroit
5.75%.................... 12/29/95 10,500,000 10,500,000
5.85%.................... 06/05/96 6,500,000 6,496,530
Wachovia Bank of North
Carolina, N.A.
5.75%.................... 01/19/96 17,000,000 17,000,000
----------
33,996,530
----------
EURODOLLAR................ 7.8%
Morgan Guaranty Trust Co.
5.76%.................... 01/22/96 6,000,000 6,000,245
5.76%.................... 01/31/96 10,000,000 10,000,165
Swissbank
5.78%.................... 04/03/96 7,000,000 7,000,000
Union Bank of Switzerland
5.82%.................... 02/20/96 7,000,000 7,000,306
----------
30,000,716
----------
TOTAL CERTIFICATES OF
DEPOSIT
(Cost $63,997,246).... 63,997,246
----------
</TABLE>
See Accompanying Notes to Financial Statements.
2
<PAGE>
M.S.D.&T. FUNDS, INC.
PRIME MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
COMMERCIAL PAPER......... 23.0%
CHEMICALS................ 2.6%
E.I. DuPont
5.59%................... 02/16/96 $10,000,000 $9,880,436
----------
COMPUTER EQUIPMENT....... 1.8%
Hewlett Packard Co.
5.60%................... 02/29/96 7,000,000 6,902,000
----------
CONSUMER GOODS........... 1.6%
Proctor & Gamble Corp.
5.63%................... 12/20/95 6,000,000 5,982,172
----------
FINANCE.................. 2.3%
Norwest Financial Corp.
5.65%................... 02/22/96 9,000,000 8,882,763
----------
FINANCIAL SERVICES....... 2.6%
Associates Corp.
5.69%................... 02/28/96 10,000,000 9,859,331
----------
FOODS.................... 1.0%
Campbells Soup Corp. (4-2
Paper)***
5.45%................... 10/04/96 4,000,000 3,813,489
----------
INSURANCE................ 4.4%
Marsh & McLennan Corp.
(4-2 Paper)***
5.87%................... 12/01/95 17,000,000 17,000,000
----------
PRINTING & PUBLISHING.... 4.4%
Dun & Bradstreet Corp.
5.66%................... 01/30/96 10,000,000 9,905,667
5.63%................... 03/12/96 7,000,000 6,888,537
----------
16,794,204
----------
UTILITIES--ELECTRIC...... 2.3%
Northern States Power Co.
5.71%................... 12/08/95 9,000,000 8,990,007
----------
TOTAL COMMERCIAL PAPER
(Cost $88,104,402)... 88,104,402
----------
</TABLE>
See Accompanying Notes to Financial Statements.
3
<PAGE>
M.S.D.&T. FUNDS, INC.
PRIME MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
CORPORATE BONDS........... 5.9%
CONSUMER GOODS............ 0.8%
Gillette
4.75%.................... 08/15/96 $3,000,000 $2,980,746
----------
FINANCE................... 3.3%
General Electric Capital
Corp.
8.65%.................... 05/01/96 5,500,000 5,561,673
5.86%.................... 08/22/96 7,000,000 7,002,851
----------
12,564,524
----------
OIL....................... 1.8%
Exxon Corp.
7.75%.................... 02/14/96 7,000,000 7,024,075
----------
TOTAL CORPORATE BONDS
(Cost $22,569,345).... 22,569,345
----------
REPURCHASE AGREEMENTS..... 19.0%
Goldman, Sachs & Co.
(Agreement dated 11/30/95
to be repurchased at
$866,138 collateralized
by $630,000 (Value
$891,000) U.S. Treasury
Notes, 13.375%, due
8/15/01)
5.75%................... 12/01/95 866,000 866,000
J.P. Morgan Securities,
Inc.
(Agreement dated 11/30/95
to be repurchased at
$19,003,101
collateralized by
$14,185,000 (Value
$19,487,000) U.S.
Treasury Notes, 9.125%,
due 2/15/16)
5.875%.................. 12/01/95 19,000,000 19,000,000
Merrill Lynch Government
Securities, Inc.
(Agreement dated 11/30/95
to be repurchased at
$15,002,425
collateralized by
$15,170,000 (Value
$15,311,000) U.S.
Treasury Notes, 5.625%,
due 10/31/97)
5.82%................... 12/01/95 15,000,000 15,000,000
</TABLE>
See Accompanying Notes to Financial Statements.
4
<PAGE>
M.S.D.&T. FUNDS, INC.
PRIME MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS --
CONTINUED
Republic National Bank New
York
(Agreement dated 11/30/95 to
be repurchased at $19,003,082
collateralized by $16,950,000
(Value $19,455,000) U.S.
Treasury Notes, 7.875%, due
11/15/04)
5.84%....................... 12/01/95 $19,000,000 $ 19,000,000
Wachovia Bank of North
Carolina, N.A.
(Agreement dated 11/30/95 to
be repurchased at $19,003,088
collateralized by $19,075,000
(Value $19,400,000) U.S.
Treasury Notes, 7.25%, due
11/30/96)
5.85%....................... 12/01/95 19,000,000 19,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $72,866,000)........ 72,866,000
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $383,089,392*)... 100.0% 383,089,392
LIABILITIES IN EXCESS OF OTHER
ASSETS ...................... 0.0 (110,614)
-----
------------
NET ASSETS (equivalent to
$1.00 per share based on
383,057,578 shares
outstanding)................. 100.0% $382,978,778
=====
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($382,978,778 / 383,057,578).. $1.00
=====
</TABLE>
- --------
* Aggregate cost for Federal income tax purposes.
** The rate shown is as of November 30, 1995 and the maturity date shown is
the longer of (i) the next interest readjustment date or (ii) the date on
which the principal amount can be recovered through demand.
*** Security was purchased pursuant to Section 4(2) of the Securities Act of
1933 and may not be resold subject to that rule except to qualified insti-
tutional buyers.
See Accompanying Notes to Financial Statements.
5
<PAGE>
M.S.D.&T. FUNDS, INC.
PRIME MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
-------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
MATURITY SCHEDULE OF PORTFOLIO
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
MATURITY
PERIOD AMOUNT PAR PERCENTAGE OF PORTFOLIO
------------- ------------ ---------------------------------------
(CUM)
<S> <C> <C> <C>
1- 7 days $152,676,000 39.70% 39.70%
8- 14 days 9,000,000 2.34% 42.04%
15- 30 days 26,000,000 6.76% 48.80%
31- 60 days 51,000,000 13.25% 62.05%
61- 90 days 83,000,000 21.58% 83.63%
91-120 days 14,000,000 3.64% 87.27%
Over 120 days 48,945,000 12.73% 100.00%
------------ -------
$384,621,000 100.00%
------------ -------
</TABLE>
Average Weighted Maturity -- 56 days
-------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
6
<PAGE>
M.S.D.&T. FUNDS, INC.
GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PECENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------ -------- --- -----
<S> <C> <C> <C> <C>
AGENCY OBLIGATIONS....... 85.1%
FEDERAL FARM CREDIT
BANK.................... 9.8%
Discount Notes
5.71%................... 01/18/96 $ 5,800,000 $ 5,755,843
5.59%................... 02/05/96 6,000,000 5,938,510
Floating Rate Notes**
5.66%................... 02/12/96 6,000,000 6,000,000
5.54%................... 02/26/96 10,000,000 10,000,000
-----------
27,694,353
-----------
FEDERAL HOME LOAN BANK... 16.0%
Discount Notes
5.65%................... 12/12/95 5,100,000 5,091,195
5.65%................... 12/26/95 5,105,000 5,084,970
6.10%................... 01/02/96 6,800,000 6,765,547
5.49%................... 04/01/96 5,000,000 4,906,458
4.80%................... 07/12/96 5,000,000 4,979,808
4.50%................... 09/23/96 3,500,000 3,459,075
Floating Rate Notes**
5.61%................... 12/20/95 15,000,000 14,991,127
-----------
45,278,180
-----------
FEDERAL HOME LOAN
MORTGAGE CORP........... 15.8%
Discount Notes
5.80%................... 12/01/95 15,000,000 15,000,000
5.65%................... 12/04/95 15,000,000 14,993,025
5.54%................... 12/19/95 7,500,000 7,479,225
Notes
5.98%................... 05/10/96 7,300,000 7,300,000
-----------
44,772,250
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION............. 15.9%
Discount Notes
5.60%................... 11/01/96 10,000,000 9,987,680
Floating Rate Notes**
5.67%................... 12/01/95 20,000,000 19,988,451
5.90%................... 12/01/95 15,000,000 15,000,000
-----------
44,976,131
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
M.S.D.&T. FUNDS, INC.
GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PECENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------ -------- --- -----
<S> <C> <C> <C> <C>
AGENCY OBLIGATIONS --
CONTINUED
PRIVATE EXPORT FINANCE
CORPORATION............. 1.9%
Notes
9.00%................... 01/31/96 $5,200,000 $ 5,225,702
-----------
STUDENT LOAN MARKETING
ASSOCIATION............. 10.3%
Discount Notes
5.80%................... 12/01/95 15,000,000 15,000,000
Floating Rate Notes**
5.83%................... 12/07/95 10,000,000 10,000,000
5.65%................... 12/07/95 4,000,000 3,987,085
-----------
28,987,085
-----------
TENNESSEE VALLEY
AUTHORITY............... 15.4%
Discount Notes
5.56%................... 01/18/96 12,800,000 12,704,766
5.60%................... 01/24/96 4,500,000 4,462,200
4.38%................... 03/04/96 10,000,000 9,963,098
Medium Term Notes
4.13%................... 01/12/96 8,500,000 8,484,383
4.19%................... 09/09/96 8,000,000 7,905,523
-----------
43,519,970
-----------
TOTAL AGENCY
OBLIGATIONS
(Cost $240,453,671).. 240,453,671
-----------
U.S. TREASURY
OBLIGATIONS............. 1.8%
U.S. Treasury Notes
4.375%.................. 08/15/96 5,000,000 4,950,176
-----------
TOTAL U.S. TREASURY
OBLIGATIONS (Cost
$4,950,176).......... 4,950,176
-----------
REPURCHASE AGREEMENTS.... 13.2%
Goldman, Sachs & Co.
(Agreement dated
11/30/95 to be
repurchased at
$2,745,000
collateralized by
$2,055,000 (Value
$2,661,000) U.S.
Treasury Notes, 9.00%,
due 11/15/18)
5.75%.................. 12/01/95 2,661,000 2,661,000
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
M.S.D.&T. FUNDS, INC.
GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PECENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------ -------- --- -----
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS --
CONTINUED
J.P. Morgan Securities, Inc.
(Agreement dated 11/30/95 to
be repurchased at $9,232,000
collateralized by $6,720,000
(Value $9,000,000) U.S.
Treasury Notes, 9.25%, due
2/15/16)
5.88%....................... 12/01/95 $9,000,000 $ 9,000,000
Merrill Lynch Government
Securities, Inc.
(Agreement dated 11/30/95 to
be repurchased at $8,171,833
collateralized by $7,975,000
(Value $8,000,000) U.S.
Treasury Notes, 6.00%, due
8/31/97)
5.82%....................... 12/01/95 8,000,000 8,000,000
Republic National Bank New
York
(Agreement dated 11/30/95 to
be repurchased at $9,217,000
collateralized by $8,030,000
(Value $9,000,000) U.S.
Treasury Notes, 7.875%, due
11/15/04)
5.84%....................... 12/01/95 9,000,000 9,000,000
Wachovia Bank of North
Carolina, N.A.
(Agreement dated 11/30/95 to
be repurchased at $9,189,000
collateralized by $9,035,000
(Value $9,000,000) U.S.
Treasury Notes, 7.25%, due
11/30/96)
5.85%....................... 12/01/95 9,000,000 9,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $37,661,000)........ 37,661,000
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $283,064,847*)... 100.1% 283,064,847
LIABILITIES IN EXCESS OF OTHER
ASSETS....................... (0.1) (379,378)
------ ------------
NET ASSETS (equivalent to
$1.00 per share based on
282,833,782 shares
outstanding)................. 100.00% $282,685,469
====== ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($282,685,469 / 282,833,782).. $1.00
=====
</TABLE>
See Accompanying Notes to Financial Statements.
9
<PAGE>
M.S.D.&T. FUNDS, INC.
GOVERNMENT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
- --------
* Aggregate cost for Federal income tax purposes.
** The rate shown is as of November 30, 1995 and the maturity date shown is the
longer of (i) the next interest readjustment date or (ii) the date on which
the principal amount can be re covered through demand.
-------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
MATURITY SCHEDULE OF PORTFOLIO
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
MATURITY
PERIOD AMOUNT PAR PERCENTAGE OF PORTFOLIO
------------- ------------ ---------------------------------------
(CUM)
<S> <C> <C> <C>
1- 7 days $131,661,000 46.40% 46.40%
8- 14 days 5,100,000 1.79% 48.19%
15- 30 days 27,605,000 9.73% 57.92%
31- 60 days 38,400,000 13.54% 71.46%
61- 90 days 27,200,000 9.58% 81.04%
91-120 days 10,000,000 3.52% 84.56%
Over 120 days 43,800,000 15.44% 100.00%
------------ -------
$283,766,000 100.00%
------------ -------
</TABLE>
Average Weighted Maturity -- 58 days
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
10
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
ALABAMA................... 2.4%
City of Montgomery, MPB,
PCR,
(General Electric Co.)
(Aaa/P-1, AAA/A-1+)
3.85%................... 01/30/96 $1,500,000 $1,500,000
----------
ARKANSAS.................. 1.0%
City of Valdez, VRDN,
(Exxon)
(Aaa/P-1, AAA/A-1+)**
3.70%................... 12/01/95 600,000 600,000
----------
ARKANSAS.................. 1.3%
Pulaski County, VRDN
(Minnesota Mining &
Manufacturing) (Aaa/P-1,
AAA/A-1+)**
3.75%................... 12/07/95 800,000 800,000
----------
COLORADO.................. 2.6%
Fort Collins, GO (Aaa, AA)
7.30%................... 12/01/95 1,545,000 1,583,625
----------
CONNECTICUT............... 4.0%
Connecticut Health &
Educational Facilities,
MPB, (Yale University)
(Aaa/VMIG1, AAA/A-1+)
3.55%................... 12/14/95 2,500,000 2,500,000
----------
FLORIDA................... 4.5%
Jacksonville Electic
Authority, TECP, LA:
Morgan Guaranty (Aa/P-1,
AA/A-1+)
3.60%................... 03/14/96 2,800,000 2,800,000
----------
ILLINOIS.................. 6.0%
Illinois Educational
Facilities, VRDN,
(Northwestern
University), LIC:
Northern Trust Co.
(Aa/VMIG1, AA-/A-1+)**
3.75%................... 12/07/95 3,626,000 3,626,000
Village of Bedford Park,
VRDN,
(Minnesota Mining &
Manufacturing)
(Aaa/P-1, AAA/A-1+)**
3.75%................... 12/07/95 100,000 100,000
----------
3,726,000
----------
</TABLE>
See Accompanying Notes to Financial Statements.
11
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
INDIANA................. 3.0%
City of Mount Vernon,
MPB, PCR,
(General Electric Co.)
(Aa/VMIG1, AAA/A-1+)
3.70%................. 02/13/96 $ 1,860,000 $ 1,860,000
-----------
KENTUCKY................ 4.9%
County of Jefferson, RB,
(Kentucky LG&E)
(Aa2/VMIG1, AA/A-1+)
3.75%................. 02/14/96 1,000,000 1,000,000
Trimble County,
Pollution Control
(Aa2/VMIG1, AA/A-1+)
3.75%................. 02/28/96 2,000,000 2,000,000
-----------
3,000,000
-----------
LOUISIANA............... 2.3%
Plaquemine Parish Port &
Harbor Terminal
District, MPB, (TECO
Energy, Inc.)
(Aa2/VMIG1, NA/NA)
3.60%................. 02/12/96 1,450,000 1,450,000
-----------
MARYLAND................ 1.6%
Montgomery County, GO,
Consolidated Public
Improvement
(Aaa, AAA)
3.65%................. 12/01/95 1,000,000 1,000,000
-----------
MICHIGAN................ 2.1%
Board of Regents of the
University of Michigan
Hospital, VRDN
(Aa/VMIG1, NA/NA)**
3.80%................. 12/01/95 1,300,000 1,300,000
-----------
MINNESOTA............... 4.4%
City of Rochester, MPB,
(Mayo Foundation/Mayo
Clinic), SPA: Credit
Suisse (NA/NA, AA+/A-
1+)
3.70%................. 02/13/96 2,700,000 2,700,000
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
12
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
MISSISSIPPI................. 0.8%
Jackson County, Pollution
Control, VRDN, (Chevron)
(Aa2/P-1, NA/NA)**
3.65%..................... 12/01/95 $ 500,000 $ 500,000
---------
MISSOURI.................... 6.4%
Health & Educational
Facilities Authority, VRDN,
(Washington University
Project), LA: Morgan
Guaranty (Aa/VMIG1, AA-/A-
1+)**
3.80%..................... 12/01/95 1,000,000 1,000,000
3.55%..................... 12/07/95 1,900,000 1,900,000
Industrial Development
Authority of Boone County,
VRDN,
(Minnesota Mining &
Manufacturing) (Aaa/P-1,
AAA/A-1+)**
3.75%..................... 12/07/95 1,000,000 1,000,000
---------
3,900,000
---------
NORTH CAROLINA.............. 15.9%
City of Durham, Certificates
of Participation, SPA:
Wachovia Bank of North
Carolina (Aa1/VMIG1, AAA/A-
1+)**
3.55%..................... 12/07/95 3,000,000 3,000,000
City of Winston-Salem, COP,
VRDN, SPA:
Credit Suisse (Aa1/VMIG1,
AA+/A-1+)**
3.75%..................... 12/07/95 3,850,000 3,850,000
North Carolina Educational
Facilities, VRDN, (Duke
University)
(Aa1/VMIG1, AAA/A-1+)**
3.70%..................... 12/07/95 3,000,000 3,000,000
---------
9,850,000
---------
OREGON...................... 3.9%
State of Oregon, GO, VRDN,
Veterans Welfare Board,
LOC: Mitsubishi Bank
(Aa3/VMIG1, NA/A-1+)**
4.05%..................... 12/07/95 2,400,000 2,400,000
---------
</TABLE>
See Accompanying Notes to Financial Statements.
13
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
PENNSYLVANIA................ 3.7%
City of Pittsburgh, Water
and Sewer, FGIC, Escrowed
to Maturity (Aaa, AAA)
5.90%..................... 09/01/96 $ 500,000 $ 507,828
Delaware County, VRDN, IDA,
Airport Facility RB,
(United Parcel Service)
(Aaa/P-1, AAA/A-1+)
3.80%..................... 12/01/95 1,800,000 1,800,000
---------
2,307,828
---------
SOUTH CAROLINA.............. 4.5%
York County, MPB, PCR, (Duke
Power) (Aa2/VMIG1, AA-/A-
1+)
3.65%..................... 02/21/96 2,400,000 2,400,000
York County, MPB, PCR, (Duke
Power) (Aa2/VMIG1, AA-/A-
1+)
3.55%..................... 02/28/96 400,000 400,000
---------
2,800,000
---------
TEXAS....................... 11.3%
Harris County, Health
Facilities Development,
VRDN, (Methodist Hospital)
(NA/NA, AA/A-1+)**
3.80%..................... 12/01/95 1,000,000 1,000,000
Harris County, Health
Facilities Development,
VRDN, (St. Luke's Episcopal
Hospital Project), LA:
Morgan Guaranty (NA/NA,
AA/A-1+)**
3.80%..................... 12/01/95 1,550,000 1,550,000
Lower Colorado River, Texas
Authority Revenue (Aaa,
AAA)
8.38%..................... 01/01/96 900,000 921,409
State of Texas, TAN RAN
(NA/MIG1, NA/SP-1+)
4.75%..................... 08/30/96 3,500,000 3,517,404
---------
6,988,813
---------
</TABLE>
See Accompanying Notes to Financial Statements.
14
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
VIRGINIA................ 1.7%
Virginia State, GO (Aaa,
AAA)
6.75%................. 06/30/96 $ 1,000,000 $ 1,036,815
-----------
WISCONSIN............... 8.9%
Oak Creek, VRDN, PCR,
(Wisconsin Electric
Power Co.)
(Aa3/P-1, AA/A-1+)**
3.75%................. 12/07/95 2,100,000 2,100,000
State of Wisconsin, GO
Notes
(NA/MIG1, NA/SP-1+)
6.50%................. 05/01/96 2,000,000 2,023,290
Wausau, VRDN, PCR,
(Minnesota Mining &
Manufacturing) (Aaa/P-
1, AAA/A-1+)**
4.10%................. 12/07/95 1,300,000 1,300,000
-----------
5,423,290
-----------
WYOMING................. 1.3%
Lincoln County, VRDN,
(Exxon Corp.)
(Aaa/P-1, AAA/A-1+)**
3.70%................. 12/01/95 800,000 800,000
-----------
TOTAL MUNICIPAL BONDS
(Cost $60,826,371).. 60,826,371
-----------
<CAPTION>
PERCENTAGE OF NUMBER OF
NET ASSETS SHARES VALUE
------------- --------- -----
<S> <C> <C> <C> <C>
INVESTMENT COMPANIES.... 1.3%
Goldman Sachs ITA Tax
Exempt Fund............ 771,544 771,544
Municipal Fund for
Temporary
Intestments --
MuniFund............... 36,357 36,357
-----------
TOTAL INVESTMENT
COMPANIES
(Cost $807,901)..... 807,901
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS VALUE
------------- -----
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $61,634,272*)........................... 99.8% $61,634,272
OTHER ASSETS IN EXCESS OF LIABILITIES............. 0.2 144,422
----- -----------
NET ASSETS (equivalent to $1.00 per share based on
61,786,520 shares outstanding)................... 100.0% $61,778,694
===== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE
($61,778,694 / 61,786,520)....................... $1.00
=====
</TABLE>
- --------
* Aggregate cost for Federal income tax purposes.
** The rate shown is as of November 30, 1995 and the maturity date shown is the
longer of (i) the next interest readjustment date or (ii) the date on which
the principal amount can be recovered through demand.
-------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
MATURITY SCHEDULE OF PORTFOLIO
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
MATURITY PERIOD AMOUNT PAR PERCENTAGE OF PORTFOLIO
--------------- ----------- -----------------------------------------
(CUM)
<S> <C> <C> <C>
1-- 7 days $34,978,901 56.89% 56.89%
8-- 14 days 2,500,000 4.06% 60.95%
15-- 30 days 0 0.00% 60.95%
31-- 60 days 900,000 1.47% 62.42%
61-- 90 days 13,310,000 21.64% 84.06%
91--120 days 2,800,000 4.56% 88.62%
Over 120 days 7,000,000 11.38% 100.00%
----------- -----------
$61,488,901 100.00%
----------- -----------
</TABLE>
Average Weighted Maturity -- 52 days
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
16
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND (TRUST)
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
ALABAMA................. 3.9%
City of Montgomery, MPB,
PCR,
(General Electric Co.)
(Aaa/P-1, AAA/A-1+)
3.65%................. 01/31/96 $ 2,000,000 $ 2,000,000
-----------
ARKANSAS................ 2.0%
Pulaski County, VRDN
(Minnesota Mining &
Manufacturing) (Aaa/P-
1, AAA/A-1+)**
3.75%................. 12/07/95 1,100,000 1,100,000
-----------
COLORADO................ 2.0%
Mesa County, VRDN, MBIA
(Aaa/NA, AAA/NA)
9.00%................. 12/01/95 1,000,000 1,020,000
-----------
CONNECTICUT............. 3.9%
Connecticut Health &
Educational Facilities,
MPB, (Yale University)
(Aaa/VMIG1, AAA/A-1+)
3.55%................. 12/14/95 2,000,000 2,000,000
-----------
FLORIDA................. 3.9%
Jacksonville Electric
Authority, TECP, LA:
Morgan Guaranty (Aa/P-
1, AA/A-1+)
3.70%................. 01/31/96 500,000 500,000
3.60%................. 03/14/96 1,500,000 1,500,000
-----------
2,000,000
-----------
ILLINOIS................ 8.2%
City of Chicago, MBIA,
Prerefunded
(Aaa, AAA)
7.63%................. 05/31/96 1,500,000 1,559,536
Illinois Educational
Facilities, VRDN,
(Northwestern
University), LIC:
Northern Trust Co.
(Aa/VMIG1, AA-/A-1+)**
3.75%................. 12/07/95 2,093,000 2,093,000
Village of Bedford Park,
VRDN,
(Minnesota Mining &
Manufacturing) (Aaa/P-
1, AAA/A-1+)**
3.75%................. 12/07/95 600,000 600,000
-----------
4,252,536
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND (TRUST)
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
KENTUCKY.................. 5.7%
City of Cynthiana, VRDN,
PCR,
(Minnesota Mining &
Manufacturing) (Aaa/P-1,
AAA/A-1+)**
3.75%................... 12/07/95 $ 100,000 $ 100,000
County of Jefferson, RB,
(Kentucky LG&E)
(Aa2/VMIG1, AA/A-1+)
3.75%................... 02/14/96 1,850,000 1,850,000
Trimble County, Pollution
Control
(Aa2/VMIG1, AA/A-1+)
3.75%................... 02/28/96 1,000,000 1,000,000
---------
2,950,000
---------
LOUISIANA................. 3.5%
East Baton Rouge Parish,
MPB, PCR,
(Exxon Corp.) (Aaa/P-1,
AAA/A-1+)**
3.80%................... 12/01/95 1,000,000 1,000,000
Lake Charles, Harbor &
Terminal District, VRDN,
(Conoco Inc. Project),
(E.I. DuPont) (Aa2/P-1,
AA/A-1+)**
3.75%................... 12/01/95 800,000 800,000
---------
1,800,000
---------
MARYLAND.................. 1.9%
Montgomery County, GO,
Consolidated Public
Improvement (Aaa, AAA)
3.65%................... 12/01/95 1,000,000 1,000,000
---------
MICHIGAN.................. 2.1%
Board of Regents of the
University of Michigan
Hospital, VRDN (Aa/VMIG1,
NA/NA)**
3.80%................... 12/01/95 1,100,000 1,100,000
---------
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND (TRUST)
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
MINNESOTA............... 5.8%
City of Rochester, MPB,
(Mayo Foundation/Mayo
Clinic), SPA:
Credit Suisse (NA/NA,
AA+/A-1+)
3.75%................. 01/24/96 $ 1,000,000 $ 1,000,000
3.70%................. 02/13/96 1,000,000 1,000,000
Southern Minnesota
Municipal Power
(Aaa, AAA)
7.13%................. 01/01/96 1,000,000 1,022,896
-----------
3,022,896
-----------
MISSISSIPPI............. 6.4%
Harrison County,
Pollution Control,
VRDN, RB, (E.I. DuPont)
(Aa3/P-1, AA-/A-1+)**
3.80%................. 12/01/95 1,500,000 1,500,000
Jackson County,
Pollution Control,
VRDN, (Chevron) (Aa2/P-
1, NA/NA)**
3.65%................. 12/01/95 1,800,000 1,800,000
-----------
3,300,000
-----------
MISSOURI................ 3.5%
Health & Educational
Facilities Authority,
VRDN, (Washington
University Project),
LA: Morgan Guaranty
(Aa/VMIG1, AA-.A-1+)**
3.80%................. 12/01/95 500,000 500,000
3.55%................. 12/07/95 1,300,000 1,300,000
-----------
1,800,000
-----------
NORTH CAROLINA.......... 10.4%
City of Durham,
Certificates of
Participation, SPA:
Wachovia Bank of North
Carolina (Aa1/VMIG1,
AAA/A-1+)**
3.55%................. 12/07/95 2,000,000 2,000,000
City of Winston-Salem,
COP, VRDN, SPA:
Credit Suisse
(Aa1/VMIG1, AA+/A-1+)**
3.75%................. 12/07/95 1,500,000 1,500,000
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND (TRUST)
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
NORTH CAROLINA --
CONTINUED
North Carolina Educational
Facilities, VRDN,
(Duke University)
(Aa1/VMIG1, AAA/A-1+)**
3.70%................... 12/07/95 $1,900,000 $1,900,000
----------
5,400,000
----------
OREGON.................... 2.7%
State of Oregon, GO, VRDN,
Veterans Welfare Board,
LOC: Sanwa Bank
(Aa3/VMIG1, NA/A-1+)**
4.05%................... 12/07/95 1,400,000 1,400,000
----------
PENNSYLVANIA.............. 4.8%
City of Pittsburgh, Water
and Sewer, FGIC,
Escrowed to Maturity
(Aaa, AAA)
5.90%................... 09/01/96 500,000 507,828
Delaware County, VRDN,
IDA, Airport Facility RB,
(United Parcel Service)
(Aaa/P-1, AAA/A-1+)**
3.80%................... 12/01/95 2,000,000 2,000,000
----------
2,507,828
----------
SOUTH CAROLINA............ 6.8%
City of Charlestown, Water
and Sewer, RB
(Aaa, AAA)
7.50%................... 01/01/96 1,000,000 1,018,953
York County, MPB, PCR,
(Duke Power) (Aa2/VMIG1,
AA-/A-1+)
3.65%................... 02/21/96 1,500,000 1,500,000
3.55%................... 02/28/96 1,000,000 1,000,000
----------
3,518,953
----------
TEXAS..................... 12.6%
Harris County, Health
Facilities Development,
VRDN, (St. Luke's
Episcopal Hospital
Project), LA: Morgan
Guaranty (NA/NA, AA/A-
1+)**
3.80%................... 12/01/95 2,500,000 2,500,000
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND (TRUST)
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
TEXAS -- CONTINUED
Harris County, Health
Facilities Development,
VRDN, RB, (Methodist
Hospital)
(A/NA, A-/NA)**
3.80%................... 12/01/95 $1,500,000 $1,500,000
State of Texas, TAN, RAN
(NA/MIG1, NA/SP-1+)
4.75%................... 08/30/96 2,500,000 2,513,114
----------
6,513,114
----------
WISCONSIN................. 8.3%
Oak Creek, VRDN, PCR,
(Wisconsin Electric Power
Co.)
(Aa3/P-1, AA/A-1+)
3.75%................... 12/07/95 2,100,000 2,100,000
State of Wisconsin, GO
Notes
(NA/MIG1, NA/SP-1+)
6.50%................... 05/01/96 2,000,000 2,023,290
Wausau, VRDN, PCR,
(Minnesota Mining &
Manufacturing) (Aaa/P-1,
AAA/A-1+)**
4.10%................... 12/07/95 200,000 200,000
----------
4,323,290
----------
WYOMING................... 1.0%
Lincoln County, VRDN,
(Exxon Corp.)
(Aaa/P-1, AAA/A-1+)**
3.80%................... 12/01/95 500,000 500,000
----------
TOTAL MUNICIPAL BONDS
(Cost $51,508,617).... 51,508,617
----------
<CAPTION>
NUMBER
OF SHARES
---------
<S> <C> <C> <C> <C>
INVESTMENT COMPANIES...... 0.2%
Goldman Sachs ITA Tax
Exempt Fund.............. 94,969 94,969
Municipal Fund for
Temporary Intestments --
MuniFund................. 20,062 20,062
----------
TOTAL INVESTMENT
COMPANIES
(Cost $115,031)....... 115,031
----------
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
M.S.D.&T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND (TRUST)
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS VALUE
------------- -----
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $51,623,648*)................. 99.6% $51,623,648
OTHER ASSETS IN EXCESS OF LIABILITIES... 0.4 181,688
----- -----------
NET ASSETS (equivalent to $1.00 per
share based on 51,808,363 shares
outstanding)........................... 100.0% $51,805,336
===== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($51,805,336 / 51,808,363)............. $1.00
=====
</TABLE>
- --------
* Aggregate cost for Federal income tax purposes.
** The rate shown is as of November 30, 1995 and the maturity date shown is the
longer of (i) the next interest readjustment date or (ii) the date on which
the principal amount can be re covered through demand.
- -------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND (TRUST)
MATURITY SCHEDULE OF PORTFOLIO
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
MATURITY
PERIOD AMOUNT PAR PERCENTAGE OF PORTFOLIO
-------- ---------- ------------------------------------------
(CUM)
<S> <C> <C> <C>
1-- 7 days $29,608,031 57.54% 57.54%
8-- 14 days 0 0.00% 57.54%
15-- 30 days 2,000,000 3.88% 61.42%
31-- 60 days 3,000,000 5.83% 67.25%
61-- 90 days 8,850,000 17.20% 84.45%
91--120 days 1,500,000 2.92% 87.37%
Over 120 days 6,500,000 12.63% 100.00%
----------- -------
$51,458,031 100.00%
----------- -------
</TABLE>
Average Weighted Maturity -- 49 days
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
22
<PAGE>
M.S.D.&T. FUNDS, INC.
VALUE EQUITY FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF
NET ASSETS SHARES VALUE
------------- --------- -----
<S> <C> <C> <C>
COMMON STOCK......................... 87.9%
AUTOMOTIVE........................... 1.1%
General Motors Corp. .............. 22,000 $ 1,067,000
------------
BANKS................................ 4.7%
Barnett Banks, Inc................. 23,100 1,388,888
CoreStates Financial Corp.......... 34,900 1,352,375
J.P. Morgan........................ 27,000 2,119,500
------------
4,860,763
------------
BEVERAGES............................ 3.1%
Adolph Coors Co.................... 49,000 992,250
Pepsico Inc........................ 37,500 2,071,875
------------
3,064,125
------------
CHEMICALS............................ 3.0%
Betz Laboratories Inc. ............ 44,000 1,771,000
Imperial Chemical ADR.............. 25,500 1,192,125
------------
2,963,125
------------
COMPUTER EQUIPMENT................... 1.2%
Apple Computer Co.................. 32,000 1,220,000
------------
COMPUTER SOFTWARE.................... 1.6%
Novell Inc.*....................... 92,500 1,560,932
------------
COSMETICS............................ 2.3%
Tambrands, Inc..................... 44,500 2,319,563
------------
DRUGS................................ 7.0%
Bristol-Myers Squibb Co. .......... 31,500 2,527,875
Pfizer Inc. ....................... 39,400 2,285,200
Warner Lambert Co. ................ 25,500 2,275,875
------------
7,088,950
------------
ELECTRICAL EQUIPMENT................. 4.0%
ASEA ADR........................... 12,000 1,158,000
General Electric Co................ 26,000 1,748,500
Hubbell, Inc. "B".................. 17,900 1,094,138
------------
4,000,638
------------
</TABLE>
See Accompanying Notes to Financial Statements.
23
<PAGE>
M.S.D.&T. FUNDS, INC.
VALUE EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
PERCENTAGE OF OF
NET ASSETS SHARES VALUE
------------- ------ -----
<S> <C> <C> <C>
COMMON STOCK -- CONTINUED
FINANCIAL SERVICES........................ 1.5%
HF Amhanson............................. 57,000 $1,524,750
----------
FOOD PROCESSING........................... 1.4%
Universal Foods......................... 41,500 1,447,313
----------
FOODS..................................... 3.6%
McCormick & Co., Inc. .................. 78,000 1,862,250
Nestle Registered ADR................... 32,000 1,708,077
----------
3,570,327
----------
HOME FURNISHINGS.......................... 1.5%
Maytag Corp............................. 73,000 1,487,375
----------
INSURANCE................................. 7.0%
Chubb Corp.............................. 24,000 2,334,000
First Colony Corp. ..................... 68,700 1,786,200
Lincoln National Corp................... 29,200 1,365,100
Unum Corp............................... 30,000 1,623,750
----------
7,109,050
----------
IRON/STEEL................................ 1.4%
Worthington Industries.................. 70,500 1,383,563
----------
MACHINERY & HEAVY EQUIPMENT............... 3.4%
Giddings & Lewis Inc.................... 117,500 1,850,625
Illinois Tool Works, Inc. .............. 24,400 1,546,350
----------
3,396,975
----------
MEDICAL INSTRUMENTS & SUPPLIES............ 2.2%
Johnson & Johnson....................... 25,000 2,165,625
----------
MULTI-INDUSTRY............................ 2.9%
Hanson PLC ADR.......................... 92,000 1,403,000
Minnesota Mining & Manufacturing Co..... 22,500 1,473,750
----------
2,876,750
----------
</TABLE>
See Accompanying Notes to Financial Statements.
24
<PAGE>
M.S.D.&T. FUNDS, INC.
VALUE EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
PERCENTAGE OF OF
NET ASSETS SHARES VALUE
------------- ------ -----
<S> <C> <C> <C>
COMMON STOCK -- CONTINUED
NATURAL GAS.............................. 3.1%
Equitable Resources Inc................ 52,825 $1,624,369
Questar Corp........................... 45,400 1,469,825
----------
3,094,194
----------
OIL...................................... 5.8%
Amoco Corp............................. 29,025 1,966,444
Atlantic Richfield Co.................. 16,350 1,771,931
Exxon Corp............................. 26,900 2,081,388
----------
5,819,763
----------
OIL EQUIPMENT & SERVICES................. 2.6%
Landmark Graphics Corp.*............... 62,500 1,250,000
Schlumberger Ltd. ADR.................. 21,300 1,352,550
----------
2,602,550
----------
PAPER & FOREST PRODUCTS.................. 0.9%
Glatfelter (P.H.) Co................... 46,500 889,313
----------
PRINTING & PUBLISHING.................... 1.9%
Dun & Bradstreet Corp.................. 29,900 1,865,013
----------
RETAIL DEPARTMENT STORES................. 1.8%
May Department Stores Co............... 41,300 1,801,713
----------
RETAIL MERCHANDISING..................... 1.3%
Pier 1 Imports, Inc.................... 122,325 1,330,284
----------
SHOES.................................... 1.3%
Stride Rite............................ 145,500 1,273,125
----------
TECHNOLOGY............................... 2.4%
Motorola, Inc.......................... 40,000 2,450,000
----------
TECHNOLOGY-SOFTWARE...................... 1.5%
Auto Desk.............................. 42,350 1,492,838
----------
TELECOMMUNICATIONS....................... 2.4%
GTE Corp............................... 55,750 2,376,344
----------
</TABLE>
See Accompanying Notes to Financial Statements.
25
<PAGE>
M.S.D.&T. FUNDS, INC.
VALUE EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
PERCENTAGE OF OF
NET ASSETS SHARES VALUE
------------- ------ -----
<S> <C> <C> <C>
COMMON STOCK -- CONTINUED
TEXTILES & APPAREL........................ 0.3%
Delta Woodside Corp..................... 53,600 $ 348,400
----------
UTILITIES-ELECTRIC........................ 5.2%
Dayton Power & Light Co................. 64,500 1,548,000
Northeast Utilities, Inc................ 81,875 1,954,766
Texas Utilities......................... 43,500 1,674,750
----------
5,177,516
----------
UTILITIES-TELEPHONE....................... 4.5%
BellSouth Corp.......................... 66,000 2,565,750
MCI Communications...................... 72,300 1,934,025
----------
4,499,775
----------
TOTAL COMMON STOCK
(Cost $74,907,886).................... 88,127,652
----------
PREFERRED STOCK........................... 1.3%
News Corp. Ltd.......................... 70,000 1,321,250
----------
TOTAL PREFERRED STOCK
(Cost $1,409,551)..................... 1,321,250
----------
</TABLE>
See Accompanying Notes to Financial Statements.
26
<PAGE>
M.S.D.&T. FUNDS, INC.
VALUE EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
CORPORATE BONDS................ 1.5%
AUTOMOBILES
Ford Motor Credit Corp. FRN***
5.88%........................ 03/14/97 $1,500,000 $ 1,500,000
------------
TOTAL CORPORATE BONDS
(Cost $1,500,000).......... 1,500,000
------------
U.S. TREASURY OBLIGATIONS...... 2.8%
U.S. Treasury Notes
7.25%......................... 11/30/96 2,750,000 2,798,180
------------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $2,743,304).......... 2,798,180
------------
REPURCHASE AGREEMENT........... 6.3%
Goldman Sachs & Co.
(Agreement dated 11/30/95 to
be repurchased at $6,472,000,
collateralized by $5,140,000
(Value $6,286,000) U.S.
Treasury Notes, 8.125%, due
8/15/21)
5.75%........................ 12/01/95 6,286,000 6,286,000
------------
TOTAL REPURCHASE AGREEMENT
(Cost $6,286,000).......... 6,286,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
27
<PAGE>
M.S.D.&T. FUNDS, INC.
VALUE EQUITY FUND
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS VALUE
------------- -----
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $86,846,741**).......................... 99.8% $100,033,082
OTHER ASSETS IN EXCESS OF LIABILITIES.......... 0.2% 238,916
----- ------------
NET ASSETS (equivalent to $14.36 per share
based on 6,982,520 shares outstanding)........ 100.0% $100,271,998
===== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE
($100,271,998 / 6,982,520).................... $14.36
======
</TABLE>
- --------
*Non-income producing securities.
**Cost for Federal income tax purposes is $86,918,612. . The aggregate gross
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Excess of value over tax cost........ $14,828,414
Excess of tax cost over value........ $(1,570,202)
</TABLE>
***The rate shown is as of November 30, 1995 and the maturity date shown is the
longer of (i) the next interest readjustment date or (ii) the date on which
the principal amount can be recovered through demand.
See Accompanying Notes to Financial Statements.
28
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF
NET ASSETS SHARES VALUE
------------- --------- -----
<S> <C> <C> <C>
COMMON STOCK,
PREFERRED STOCK,
WARRANTS & RIGHTS....... 98.6%
AUSTRALIA............... 2.6%
AAPC Ltd................ 398,000 $ 221,930
Australian Gas and
Light.................. 90,000 316,502
Australian National In-
dustries............... 583,000 468,129
Broken Hill Proprie-
tary................... 37,400 509,413
QNI Ltd*................ 169,000 353,074
-----------
1,869,048
-----------
DENMARK................. 0.8%
Tele Danmark 'B'*....... 10,000 545,127
-----------
FRANCE.................. 7.3%
Alcatel Alsthom......... 2,400 200,404
Christian Dior.......... 5,500 531,274
Cie de Suez............. 9,470 355,824
CMB Packaging*.......... 11,500 506,694
Danone.................. 2,800 439,157
Lafarge Coppee S.A.
Bearer................. 10,040 639,152
Pinault Printemps La
Redoute................ 2,500 471,932
Societe Generale........ 15,600 363,407
Societe Generale
D'Enterprises (SGE).... 5,200 608,812
Societe Nationale Elf
Aquitaine.............. 8,500 596,250
TV Francaise 1.......... 5,500 544,529
-----------
5,257,435
-----------
GERMANY................. 5.2%
Asko Deutsche Kaufhaus.. 600 278,155
Bilfinger & Berger...... 1,000 384,710
Commerzbank AG.......... 2,200 507,208
Deutsche Bank........... 8,800 411,612
Linde AG................ 700 410,969
Mannesman AG............ 2,020 648,807
Siemens Bearer.......... 1,000 520,327
Veba.................... 14,000 571,045
-----------
3,732,833
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
29
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF
NET ASSETS SHARES VALUE
------------- --------- -----
<S> <C> <C> <C>
COMMON STOCK, PREFERRED STOCK,
WARRANTS & RIGHTS -- CONTINUED
HONG KONG.............................. 5.3%
Hong Kong Electric..................... 219,000 $ 734,705
HSBC Holdings.......................... 65,600 966,808
Hutchinson Whampoa..................... 140,000 790,936
Sun Hung Kai Properties................ 71,000 571,386
Swire Pacific.......................... 95,000 718,474
---------
3,782,309
---------
ITALY.................................. 3.2%
Ente Nazionale Idrocarburi (ENI)....... 150,000 492,350
Fiat Preferred*........................ 170,000 295,473
Istituto Nazionale delle Assicurazioni
(INA)*................................ 380,000 456,151
Telecom Italia......................... 340,000 548,432
Unicem Ordinary........................ 90,000 493,757
---------
2,286,163
---------
JAPAN.................................. 44.8%
18th Bank.............................. 87,000 778,055
Canon Inc.............................. 48,000 846,252
Dowa Fire & Marine..................... 68,000 344,923
Eisai Co............................... 46,000 810,991
Fuji Machine Mfg....................... 17,000 641,288
Fuji Photo Film........................ 38,000 943,169
Hirose Electric........................ 13,650 832,202
Hitachi Limited........................ 100,000 1,014,478
Ito Yokado Co.......................... 15,000 830,296
Itochu Corp............................ 105,000 698,069
Kamigumi Co............................ 70,000 639,121
Kurimoto Iron.......................... 46,000 466,660
Mabuchi Motors......................... 11,000 682,557
Mitsubishi Bank........................ 40,000 874,618
Mitsubishi Heavy Industries............ 135,000 1,078,351
Mitsui Fudosan......................... 72,000 893,529
Mitsui Petrochemical Ind............... 68,000 567,280
Mitubishi Electric..................... 140,000 1,042,450
</TABLE>
See Accompanying Notes to Financial Statements.
30
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF
NET ASSETS SHARES VALUE
------------- --------- -----
<S> <C> <C> <C>
COMMON STOCK, PREFERRED STOCK,
WARRANTS & RIGHTS -- CONTINUED
JAPAN -- CONTINUED
NGK Spark Plug Co..................... 67,000 $ 864,473
Nippon Comsys Corp.................... 57,000 600,709
Nippondenso........................... 39,000 722,151
NKK Corp*............................. 350,000 965,232
Nomura Securities..................... 36,000 709,150
NTN Corp.............................. 105,000 696,001
Rinnai Corp........................... 47,300 1,001,625
Ryobi................................. 110,000 568,797
Sanwa Bank............................ 46,000 892,544
Shikoku Electric Power................ 26,520 626,888
Shimachu.............................. 37,000 991,234
Shimano Industries.................... 48,000 841,524
Shin-Etsu Chemical.................... 38,000 785,974
Shizuoka Bank......................... 44,000 559,046
Sony Corp............................. 17,000 904,166
Sumitomo Bank......................... 48,000 926,622
Sumitomo Electric Industries.......... 55,000 644,637
Sumitomo Forestry..................... 47,000 634,197
Suzuki Motor.......................... 110,000 1,224,268
TDK Corp.............................. 19,000 965,626
Tokyo Ohka Kogyo...................... 12,000 346,301
Toppan Printing Co.................... 55,000 715,059
Toyota Motor Co....................... 48,000 950,261
----------
32,120,774
----------
MALAYSIA.............................. 1.3%
Aluminium Co. of Malaysia............. 104,000 159,937
Malaysia International Shipping
Corp................................. 119,666 292,560
Malaysian Airline Systems............. 55,000 161,574
Sime Darby Berhad..................... 132,000 340,932
----------
955,003
----------
</TABLE>
See Accompanying Notes to Financial Statements.
31
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF
NET ASSETS SHARES VALUE
------------- --------- -----
<S> <C> <C> <C>
COMMON STOCK, PREFERRED STOCK,
WARRANTS & RIGHTS -- CONTINUED
NETHERLANDS............................. 4.2%
Akzo Nobel.............................. 2,600 $ 294,142
Hagemeyer............................... 13,000 657,399
ING..................................... 8,720 571,419
Philips Electronics..................... 10,000 393,796
Vendex.................................. 17,000 492,895
Ver Ned Uitgev Ver Bezit (VNU).......... 4,350 614,480
---------
3,024,131
---------
SINGAPORE............................... 2.6%
Development Bank of Singapore........... 45,750 535,173
Jurong Shipyard......................... 34,000 232,608
Singapore Airlines...................... 59,000 552,134
United Overseas Bank.................... 61,244 551,425
---------
1,871,340
---------
SPAIN................................... 2.5%
Acerinox................................ 4,000 401,545
Argentaria.............................. 14,250 558,880
Iberdrola SA............................ 68,000 574,842
Telefonica de Espana.................... 19,000 262,548
---------
1,797,815
---------
SWEDEN.................................. 2.6%
Atlas Copco AB Series A................. 32,000 482,630
Electrolux AB 'B'....................... 20,600 883,434
Stora Kopparbergs....................... 40,000 502,739
---------
1,868,803
---------
SWITZERLAND............................. 4.6%
Brown Boveri & Cie Bearer............... 480 552,092
Ciba Geigy A.G. Registered.............. 1,000 892,890
Nestle SA Registered.................... 500 533,774
Roche Holdings 1/10 PC Non-Voting....... 90 680,914
Swiss Bank Corp. Bearer................. 1,575 628,005
---------
3,287,675
---------
</TABLE>
See Accompanying Notes to Financial Statements.
32
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF
NET ASSETS SHARES VALUE
------------- --------- -----
<S> <C> <C> <C>
COMMON STOCK, PREFERRED STOCK,
WARRANTS & RIGHTS -- CONTINUED
UNITED KINGDOM......................... 11.5%
Albright & Wilson*..................... 105,000 $ 252,939
BAT Industries......................... 35,000 298,444
British Gas............................ 77,400 288,264
British Pretroleum..................... 40,760 320,752
British Telecom........................ 90,000 519,648
BTR Warrants*.......................... 988 363
Coats Viyella.......................... 100,000 273,781
Grand Metropolitan..................... 45,000 304,218
Greenalls Group........................ 60,000 492,805
Guardian Royal Exchange................ 90,000 371,669
Hanson................................. 95,000 284,067
Hillsdown Holdings..................... 87,000 206,253
Inchcape............................... 60,000 217,495
Ladbroke Group......................... 117,000 257,690
Lex Service............................ 55,666 246,058
Lloyds Abbey Life...................... 40,000 280,205
MEPC................................... 50,000 298,253
National Westminster Bank.............. 50,000 511,618
North West Water....................... 33,200 303,153
Peninsular & Oriental Steam
Navigation............................ 41,000 304,768
Powergen............................... 38,000 128,448
Racal Electronics...................... 76,000 292,930
Sears.................................. 245,000 374,728
Siebe.................................. 27,000 311,789
T&N.................................... 108,461 216,488
Tesco.................................. 60,000 265,215
Tomkins................................ 78,000 317,341
Unigate................................ 45,000 287,011
----------
8,226,393
----------
UNITED STATES.......................... 0.1%
U.S. Industries........................ 1,000 16,250
----------
TOTAL COMMON STOCK, PREFERRED STOCK,
WARRANTS & RIGHTS
(Cost $70,023,774)................... 70,641,099
----------
</TABLE>
See Accompanying Notes to Financial Statements.
33
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS............. 1.2%
Eurodollar Time Deposit
State Street Bank & Trust Co.
3.25............................. 12/01/95 $825,000 $ 825,000
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost
$825,000)........................ 825,000
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $70,848,774**).............. 99.8% 71,466,099
OTHER ASSETS IN EXCESS OF
LIABILITIES....................... 0.2 165,289
----- -----------
NET ASSETS (equivalent to $11.97
per share based on 5,983,345
shares outstanding)............... 100.0% $71,631,388
===== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($71,631,388 / 5,983,345)......... $11.97
======
</TABLE>
- --------
* Non-income producing securities.
** Aggregate cost for Federal income tax purposes. The aggregate gross
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Excess of value over tax cost....... $ 5,092,366
Excess of tax cost over value....... $ (4,475,041)
</TABLE>
See Accompanying Notes to Financial Statements.
34
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERMEDIATE FIXED INCOME FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
AGENCY OBLIGATIONS............... 20.5%
FEDERAL HOME LOAN BANK........... 2.4%
Medium Term Notes
6.34%.......................... 06/13/05 $1,000,000 $1,023,640
----------
FEDERAL HOME LOAN MORTGAGE
CORP............................ 5.3%
Medium Term Notes
7.31%.......................... 09/03/99 1,000,000 1,008,810
8.14%.......................... 05/20/04 1,000,000 1,042,710
Mortgage Backed Securities
6.50%.......................... 03/01/08 188,918 188,682
----------
2,240,202
----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION..................... 5.0%
Medium Term Notes
6.08%.......................... 09/03/03 500,000 490,870
Mortgage Backed Securities
6.00% (Pool #227994)........... 07/01/08 804,856 790,514
7.50% (Pool #282608)........... 05/01/09 828,028 847,950
----------
2,129,334
----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION..................... 7.8%
Mortgage Backed Securities
8.00% (Pool #312726)........... 10/15/06 69,423 72,134
8.00% (Pool #308751)........... 11/15/06 311,457 323,622
8.00% (Pool #319511)........... 12/15/06 90,090 93,609
6.50% (Pool #351994)........... 12/15/08 271,541 272,388
6.50% (Pool #359462)........... 01/15/09 302,692 303,636
6.00% (Pool #372668)........... 01/15/09 918,891 905,677
8.00% (Pool #389481)........... 04/15/09 312,694 324,908
8.00% (Pool #401484)........... 11/15/09 983,731 1,022,157
----------
3,318,131
----------
TOTAL AGENCY OBLIGATIONS
(Cost $8,562,108)............ 8,711,307
----------
</TABLE>
See Accompanying Notes to Financial Statements.
35
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERMEDIATE FIXED INCOME FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
CORPORATE BONDS................... 10.1%
BEVERAGES......................... 0.5%
Coca-Cola Co., Inc. (Aa3, AA)
7.875%........................... 09/15/98 $200,000 $ 211,000
-----------
CHEMICALS......................... 0.6%
E.I. DuPont de Nemours & Co. (Aa3,
AA-)
6.00%............................ 12/01/01 250,000 251,250
-----------
FINANCE........................... 1.9%
General Electric Capital Corp.
(Aaa, AAA)
6.125%........................... 04/15/97 500,000 503,750
Norwest Financial Inc. (Aa3, AA-)
6.125%........................... 08/01/03 300,000 298,875
-----------
802,625
-----------
FOODS............................. 0.6%
Kellogg Corp. (Aaa, AAA)
5.90%............................ 07/15/97 250,000 251,875
-----------
OIL............................... 0.6%
Exxon Capital Corp. (Aaa, AAA)
7.875%........................... 04/15/96 250,000 252,090
-----------
PHARMACEUTICALS................... 0.6%
SmithKline Beecham (Aa3, A+)
5.25%............................ 01/26/96 250,000 249,708
-----------
RETAIL MERCHANDISING.............. 0.6%
Wal-Mart Stores, Inc. (Aa1, AA)
5.50%............................ 09/15/97 250,000 249,375
-----------
UTILITIES -- GAS.................. 2.9%
Consolidated Natural Gas Co. (A1,
AA-)
5.75%............................ 08/01/03 475,000 462,531
Northern Illinois Gas Co. (Aa1,
AA)
5.875%........................... 05/01/00 500,000 497,500
Wisconsin Natural Gas Co. (Aa3,
AA)
6.125%........................... 09/01/97 260,000 262,275
-----------
1,222,306
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
36
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERMEDIATE FIXED INCOME FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
CORPORATE BONDS -- CONTINUED
UTILITIES -- TELEPHONE............ 1.8%
New England Telephone & Telegraph
Co.
(Aa2, AA-)
5.05%........................... 10/01/98 $500,000 $ 490,000
General Telephone Co. Illinois 1st
Mortgage
(Aa3, AA)
7.50%........................... 02/01/02 250,000 254,375
-----------
744,375
-----------
TOTAL CORPORATE BONDS**
(Cost $4,243,508)............. 4,234,604
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
37
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERMEDIATE FIXED INCOME FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS....... 67.7%
U.S. Treasury Notes
6.00%.......................... 06/30/96 $1,000,000 $ 1,003,430
6.125%......................... 07/31/96 3,000,000 3,013,380
4.375%......................... 08/15/96 1,000,000 993,060
7.00%.......................... 09/30/96 1,000,000 1,012,460
4.375%......................... 11/15/96 1,000,000 990,730
6.50%.......................... 05/15/97 1,000,000 1,015,430
6.75%.......................... 05/31/97 300,000 305,760
7.375%......................... 11/15/97 1,000,000 1,036,330
6.00%.......................... 11/30/97 1,000,000 1,011,960
7.125%......................... 10/15/98 1,000,000 1,045,230
5.125%......................... 12/31/98 1,000,000 991,380
5.00%.......................... 01/31/99 1,000,000 986,980
7.00%.......................... 04/15/99 1,000,000 1,046,440
6.50%.......................... 04/30/99 1,000,000 1,031,610
6.875%......................... 07/31/99 1,000,000 1,044,980
5.75%.......................... 10/31/00 1,000,000 1,008,860
7.50%.......................... 11/15/01 450,000 492,777
6.25%.......................... 02/15/03 1,300,000 1,343,953
7.25%.......................... 05/15/04 3,000,000 3,295,740
7.25%.......................... 08/15/04 2,300,000 2,528,459
7.875%......................... 11/15/04 1,000,000 1,144,050
7.50%.......................... 02/15/05 1,100,000 1,232,616
6.50%.......................... 05/15/05 1,000,000 1,052,580
-----------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $27,561,643).......... 28,628,195
-----------
REPURCHASE AGREEMENT............ 1.1%
Goldman, Sachs & Co.
(Agreement dated 11/30/95 to be
repurchased at $467,000
collateralized by $330,000
(Value $452,000) U.S. Treasury
Notes, 13.375%, due 8/15/01)
5.75%......................... 12/01/95 452,000 452,000
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $452,000)............. 452,000
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
38
<PAGE>
M.S.D.&T. FUNDS, INC.
INTERMEDIATE FIXED INCOME FUND
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PECENTAGE OF
NET ASSETS VALUE
------------ -----
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $40,819,259*)........................ 99.4% $42,026,106
OTHER ASSETS IN EXCESS OF LIABILITIES....... 0.6 257,075
----- -----------
NET ASSETS (equivalent to $10.60 per share
based on 3,989,753 shares outstanding)..... 100.0% $42,283,181
===== ===========
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER SHARE
($42,283,181 / 3,989,753).................. $10.60
======
</TABLE>
- --------
* Aggregate cost for Federal income tax purposes. The aggregate gross
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Excess of value over tax cost......... $1,307,697
Excess of tax cost over value......... $ (100,850)
</TABLE>
- --------------------------------------------------------------------------------
INTERMEDIATE FIXED INCOME FUND
MATURITY SCHEDULE OF PORTFOLIO
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
MATURITY PERIOD AMOUNT PAR PERCENTAGE OF PORTFOLIO
--------------- ----------- -----------------------------------------
(CUM)
<S> <C> <C> <C>
1- 6 months $ 952,000 2.34% 2.34%
7-12 months 7,000,000 17.19% 19.53%
13-18 months 2,800,000 6.88% 26.41%
19-24 months 2,760,000 6.77% 33.18%
25-36 months 1,700,000 4.18% 37.36%
37-48 months 5,000,000 12.28% 49.64%
49-60 months 3,300,000 8.10% 57.74%
Over 60 months 17,207,321 42.26% 100.00%
----------- -----------
$40,719,321 100.00%
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
Average Weighted Maturity -- 4.5 years
See Accompanying Notes to Financial Statements.
39
<PAGE>
M.S.D.&T. FUNDS, INC.
MARYLAND TAX-EXEMPT BOND FUND
STATEMENT OF NET ASSETS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
MARYLAND.......................... 95.8%
Allegheny County, PCR, RB,
(Westvaco Corp. Project) (A1, A)
5.875%.......................... 09/01/02 $ 70,000 $ 70,090
Annapolis, GO, Public Improvement
RB
(Aa, A+)
6.20%........................... 11/01/02 200,000 209,750
Anne Arundel County, GO,
Consolidated General Improvement
Water & Sewer
(Aa1, AA+)
5.30%........................... 07/15/12 500,000 497,500
Baltimore City, RB, Wastewater,
INS: MBIA Prerefunded @ 102 on
07/01/00
(Aaa, AAA)
7.00%........................... 07/01/00 100,000 113,000
Baltimore County, GO, Metropolitan
District (Aaa, AA+)
6.125%.......................... 07/01/07 175,000 189,875
Baltimore County, GO, Refunding --
Consolidated Public Improvement
Unlimited Tax (Aaa, AA+)
5.20%........................... 04/01/09 500,000 504,375
Baltimore, Port Facilities, RB,
GTD: E.I. DuPont (Aa2, AA)
6.50%........................... 10/01/11 300,000 329,625
Charles County, GO, Consolidated
Public Improvement, Unlimited
Tax, INS: FGIC
(Aaa, AAA)
5.50%........................... 01/01/06 230,000 239,488
Dorchester County, GO, Public
Facilities, INS: MBIA (Aaa, AAA)
5.875%.......................... 02/01/10 215,000 227,631
Harford County, GO, Public
Improvement Unlimited Tax (Aa,
AA-)
5.60%........................... 09/01/06 325,000 340,438
</TABLE>
See Accompanying Notes to Financial Statements.
40
<PAGE>
M.S.D.&T. FUNDS, INC.
MARYLAND TAX-EXEMPT BOND FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
MARYLAND--CONTINUED
Howard County, GO, Consolidated
Public Improvement (Aa1, AA+)
5.25%........................... 08/15/09 $750,000 $ 750,313
Laurel, GO, INS: MBIA
(Aaa, AAA)
6.40%........................... 07/01/01 200,000 220,750
Maryland Community Development
Administration, RB, Multi Family
Mortgage
(Aa, NA)
6.60%........................... 05/15/12 145,000 152,613
Maryland Community Development
Administration, RB, Single Family
Mortgage
(Aa, NA)
5.80%........................... 04/01/05 170,000 179,138
Maryland Community Development
Administration, RB, Single Family
Mortgage
(Aa, NA)
6.55%........................... 04/01/17 190,000 198,075
Maryland National Capital Park &
Planning Commission -- Montgomery
County, GO
(Aaa, AAA)
6.00%........................... 07/01/06 150,000 162,750
Maryland National Capital Park &
Planning Commission -- Prince
George's County, GO
(Aa, AA)
5.15%........................... 07/01/11 300,000 294,375
Maryland State Health & Higher
Educational Facilities Authority,
RB, Johns Hopkins Hospital (Aa,
AA-)
7.00%........................... 07/01/23 110,000 124,300
Maryland State Health & Higher
Educational Facilities Authority,
RB, Johns Hopkins Hospital (Aa,
AA-)
7.50%........................... 07/01/98 400,000 436,500
</TABLE>
See Accompanying Notes to Financial Statements.
41
<PAGE>
M.S.D.&T. FUNDS, INC.
MARYLAND TAX-EXEMPT BOND FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
MARYLAND--CONTINUED
Maryland State Health & Higher
Educational Facilities Authority,
RB, Johns Hopkins Hospital,
Escrowed in U.S. Treasury
Securities (Aaa, AAA)
6.625%.......................... 07/01/08 $430,000 $ 495,038
Maryland State Health & Higher
Educational Facilities Authority,
RB, University of Maryland
Medical System, INS: FGIC (Aaa,
AAA)
5.40%........................... 07/01/07 300,000 308,625
Maryland State Transportation
Authority, RB
(A1, A+)
5.75%........................... 07/01/15 350,000 354,375
Maryland State Transportation
Authority, RB, Escrowed in U.S.
Treasury Securities
(Aaa, AAA)
6.80%........................... 07/01/16 590,000 680,713
Maryland State, GO (Aaa, AAA)
6.60%........................... 03/01/01 500,000 544,375
Maryland State, GO (Aaa, AAA)
5.90%........................... 10/15/04 260,000 280,800
Maryland State, RB, Certificates
of Participation, St. Mary's
Multi Service Center (Aa, AA)
5.70%........................... 06/01/03 200,000 208,750
Maryland Water Quality Financing
Administration, RB, Revolving
Loan Fund
(Aa, AA)
5.90%........................... 09/01/01 170,000 182,963
Maryland Water Quality Financing
Administration, RB, Revolving
Loan Fund
(Aa, AA)
5.40%........................... 09/01/12 300,000 301,125
Montgomery County Revenue
Authority, RB, Olney Indoor Swim
Project (NA, AA-)
5.25%........................... 10/01/04 250,000 250,625
</TABLE>
See Accompanying Notes to Financial Statements.
42
<PAGE>
M.S.D.&T. FUNDS, INC.
MARYLAND TAX-EXEMPT BOND FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
MARYLAND--CONTINUED
Montgomery County, GO,
Refunding -- Consolidated Public
Improvement Unlimited Tax (Aaa,
AAA)
5.80%........................... 07/01/07 $250,000 $ 274,063
Montgomery County, RB, (Olney
Indoor Swim Center Project)
(NA/A+)
6.05%........................... 07/15/00 100,000 108,875
Montgomery County, RB, Silver
Spring Parking Lot, INS: FGIC
(Aaa, AAA)
5.80%........................... 06/01/01 135,000 144,788
Prince George's County, GO,
Consolidated Public Improvement
Limited Tax, INS: AMBAC
(Aaa, AAA)
5.75%........................... 03/15/10 175,000 182,875
Prince George's County, GO,
Refunding -- Consolidated Public
Improvement Limited Tax
(A, AA-)
4.90%........................... 10/01/02 300,000 308,620
University of Maryland, RB (Aa,
AA+)
5.60%........................... 04/01/05 500,000 513,750
Washington County, GO, Refunding
-- Consolidated Public
Improvement Unlimited Tax, INS:
FGIC (Aaa, AAA)
5.25%........................... 01/01/06 200,000 207,250
Washington Suburban Sanitation
District, GO
(Aa1, AA)
5.50%........................... 06/01/12 280,000 284,900
Washington Suburban Sanitation
District, GO, Sewage Disposal,
Escrowed in U.S. Treasury
Obligations, Prerefunded @ 102 on
11/01/01
(Aaa, AAA)
6.50%........................... 11/01/01 500,000 563,125
-----------
11,436,221
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
43
<PAGE>
M.S.D.&T. FUNDS, INC.
MARYLAND TAX-EXEMPT BOND FUND
STATEMENT OF NET ASSETS -- CONTINUED
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS MATURITY PAR VALUE
------------- -------- --- -----
<S> <C> <C> <C> <C>
PUERTO RICO...................... 1.9%
Puerto Rico New Public Housing
Authority, RB (Aaa, AAA)
6.00%.......................... 06/01/09 $215,000 $ 222,370
-----------
TOTAL MUNICIPAL BONDS
(Cost $11,136,169)........... 11,658,591
-----------
INVESTMENT COMPANIES............. 1.0%
<CAPTION>
NUMBER
OF SHARES
---------
<S> <C> <C> <C> <C>
Goldman Sachs ITA Tax Exempt
Fund............................ 122,207 122,207
Municipal Fund for Temporary
Intestments -- MuniFund........ 349 349
-----------
TOTAL INVESTMENT COMPANIES
(Cost $122,556).............. 122,556
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $11,258,725*)............. 98.7% 11,781,147
OTHER ASSETS IN EXCESS OF LIABIL-
ITIES........................... 1.3 152,027
----- -----------
NET ASSETS (equivalent to $10.58
per share based on 1,128,296
shares outstanding)............. 100.0% $11,933,174
===== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($11,933,174 / 1,128,296)...... $10.58
======
</TABLE>
- --------
* Aggregate cost for Federal income tax purposes. The aggregate gross
unrealized appreciation (depreciation) for all securities is as follows:
<TABLE>
<S> <C>
Excess of value over tax cost........... $526,042
Excess of tax cost over value........... $ (3,620)
</TABLE>
See Accompanying Notes to Financial Statements.
44
<PAGE>
M.S.D.&T. FUNDS, INC.
MARYLAND TAX-EXEMPT BOND FUND
STATEMENT OF NET ASSETS -- CONCLUDED
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
MARYLAND TAX-EXEMPT BOND FUND
MATURITY SCHEDULE OF PORTFOLIO
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
MATURITY PERIOD AMOUNT PAR PERCENTAGE OF PORTFOLIO
--------------- ----------- -----------------------------------------
(CUM)
<S> <C> <C> <C>
1-- 6 months $ 122,556 1.10% 1.10%
7--12 months 0 0.00% 1.10%
13--18 months 0 0.00% 1.10%
19--24 months 0 0.00% 1.10%
25--36 months 0 0.00% 1.10%
37--48 months 0 0.00% 1.10%
49--60 months 310,000 2.78% 3.88%
Over 60 months 10,725,000 96.12% 100.00%
----------- -----------
$11,157,556 100.00%
----------- -----------
</TABLE>
Average Weighted Maturity -- 13.2 years
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
45
<PAGE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
ADR American Depository Receipt
BAN Bond Anticipation Notes
FRN Floating Rate Notes
GO General Obligation
GTD Guaranteed
IDA Industrial Development Authority
INS Insured
LA Liquidity Agreement
LIC Line of Credit
LOC Letter of Credit
MB Municipal Bonds
MPB Municipal Put Bonds
PCR Pollution Control Revenue
PCRB Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
RB Revenue Bonds
SPA Standby Purchase Agreement
TAN Tax Anticipation Notes
TECP Tax-Exempt Commercial Paper
TRAN Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
</TABLE>
See Accompanying Notes to Financial Statements.
46
<PAGE>
M.S.D.&T. FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRIME GOVERNMENT TAX-EXEMPT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND (TRUST)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................ $10,907,705 $9,182,813 $1,393,048 $1,025,220
----------- ---------- ---------- ----------
EXPENSES:
Investment advisory
fee.................... 455,825 391,466 93,386 --
Administration fee...... 227,912 195,733 46,693 34,763
Accounting agent fee.... 54,699 46,976 14,942 11,124
Custodian fees.......... 17,694 18,253 8,449 7,829
Directors' fees......... 8,841 7,578 1,809 1,349
Transfer agent fees..... 37,381 31,492 10,100 9,250
Legal................... 32,437 27,743 6,565 4,924
Audit................... 19,450 16,671 3,980 2,967
Printing................ 12,378 10,609 2,533 1,888
Registration fees....... 1,870 3,932 1,200 1,400
Other................... 6,160 5,165 1,870 1,510
----------- ---------- ---------- ----------
874,647 755,618 191,527 77,004
Fees waived by Invest-
ment Adviser........... (18,233) (31,317) (7,471) --
Fees waived by Adminis-
trator................. (72,395) (50,979) (23,431) (15,821)
----------- ---------- ---------- ----------
TOTAL EXPENSES........ 784,019 673,322 160,625 61,183
----------- ---------- ---------- ----------
NET INVESTMENT INCOME.... 10,123,686 8,509,491 1,232,423 964,037
----------- ---------- ---------- ----------
REALIZED LOSS ON INVEST-
MENTS:
Net realized loss on in-
vestments sold......... (18,175) (11,486) (5,161) (1,622)
----------- ---------- ---------- ----------
Net loss on invest-
ments.................. (18,175) (11,486) (5,161) (1,622)
----------- ---------- ---------- ----------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS.............. $10,105,511 $8,498,005 $1,227,262 $ 962,415
=========== ========== ========== ==========
</TABLE>
See Accompanying Notes to Financial Statements.
47
<PAGE>
M.S.D.&T. FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
INTERMEDIATE MARYLAND
VALUE EQUITY INTERNATIONAL FIXED INCOME TAX-EXEMPT
FUND EQUITY FUND FUND BOND FUND
------------ ------------- ------------ ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.................. $ 325,745 $ 87,657 $1,348,133 $326,818
Dividends................. 1,218,163 667,111(1) -- --
---------- ---------- ---------- --------
TOTAL INVESTMENT IN-
COME................... 1,543,908 754,768 1,348,133 326,818
---------- ---------- ---------- --------
EXPENSES:
Investment advisory fees.. 288,607 289,278 75,379 30,398
Administration fee........ 60,127 45,200 26,921 7,599
Accounting agent fees..... 19,240 18,080 8,615 3,040
Custodian fees............ 7,437 27,116 5,630 2,753
Directors' fees........... 2,332 1,753 1,045 295
Transfer agent fees....... 21,300 17,856 16,763 10,100
Legal..................... 8,557 6,417 3,819 1,080
Audit..................... 5,129 3,856 2,299 648
Registration fees......... 2,268 982 1,850 1,350
Amortization of organiza-
tional costs............. 3,318 2,428 3,318 3,386
Printing.................. 3,264 2,453 1,463 413
Pricing service fees...... 975 757 3,525 3,244
Other..................... 1,461 1,101 674 207
---------- ---------- ---------- --------
424,015 417,277 151,301 64,513
Fees waived by Investment
Advisers................. (72,876) (19,519) (21,537) (21,279)
Fees waived by Administra-
tor...................... -- (18,080) (544) (5,541)
---------- ---------- ---------- --------
TOTAL EXPENSES.......... 351,139 379,678 129,220 37,693
---------- ---------- ---------- --------
NET INVESTMENT INCOME...... 1,192,769 375,090 1,218,913 289,125
---------- ---------- ---------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss)
from:
Investments.............. 2,320,935 2,010,052 (12,335) 70,331
Foreign currency transac-
tions................... -- (328,792) -- --
Forward foreign currency
contracts............... -- 543,426 -- --
---------- ---------- ---------- --------
2,320,935 2,224,686 (12,335) 70,331
---------- ---------- ---------- --------
Net unrealized
appreciation
(depreciation):
Investments.............. 4,315,037 (1,850,041) 647,701 138,775
Translation of assets and
liablilities in foreign
currencies.............. -- (8,827) -- --
Forward foreign currency
contracts............... -- 1,469,198 -- --
---------- ---------- ---------- --------
4,315,037 (389,670) 647,701 138,775
---------- ---------- ---------- --------
Net gain on investments
and foreign currency
transactions............. 6,635,972 1,835,016 635,366 209,106
---------- ---------- ---------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS................ $7,828,741 $2,210,106 $1,854,279 $498,231
========== ========== ========== ========
</TABLE>
- --------
(1)Net of witholding taxes of $67,452
See Accompanying Notes to Financial Statements.
48
<PAGE>
M.S.D.&T. FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIME PRIME GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET GOVERNMENT
FUND FOR THE FUND FOR THE FUND FOR THE SIX MONEY MARKET
SIX MONTHS ENDED YEAR ENDED MONTHS ENDED FUND FOR THE YEAR
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 ENDED MAY 31, 1995
----------------- ------------ ----------------- ------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS:
Operations:
Net investment income.. $ 10,123,686 $ 17,151,984 $ 8,509,491 $ 13,495,684
Net gain (loss) on
investments........... (18,175) (60,625) (11,486) (131,318)
------------ ------------ ------------ ------------
Net increase in net
assets resulting from
operations............ 10,105,511 17,091,359 8,498,005 13,364,366
------------ ------------ ------------ ------------
Distributions to
shareholders from:
Net investment income
($.03, $.05, $.03, and
$.05 per share,
respectively)......... (10,123,686) (17,151,984) (8,509,491) (13,495,684)
Net realized capital
gains................. -- (1,797) -- --
------------ ------------ ------------ ------------
Total distributions
to shareholders..... (10,123,686) (17,153,781) (8,509,491) (13,495,684)
------------ ------------ ------------ ------------
Increase (decrease) in
net
assets derived from
capital share
transactions........... 938,071 35,427,702 18,944,617 (9,906,280)
------------ ------------ ------------ ------------
TOTAL INCREASE
(DECREASE) IN NET
ASSETS................. 919,896 35,365,280 18,933,131 (10,037,598)
NET ASSETS:
Beginning of period.... 382,058,882 346,693,602 263,752,338 273,789,936
------------ ------------ ------------ ------------
End of period.......... $382,978,778 $382,058,882 $282,685,469 $263,752,338
============ ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements.
49
<PAGE>
M.S.D.&T. FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET FUND MONEY MARKET FUND
FUND FOR THE SIX FUND FOR THE (TRUST) FOR THE SIX (TRUST) FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 MAY 31, 1995
----------------- ------------ ------------------- -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
Operations:
Net investment income.. $ 1,232,423 $ 2,310,790 $ 964,037 $ 1,824,586
Net loss on
investments........... (5,161) (1,165) (1,622) (255)
----------- ------------ ----------- ------------
Net increase in net
assets resulting from
operations............ 1,227,262 2,309,625 962,415 1,824,331
----------- ------------ ----------- ------------
Distributions to
shareholders from:
Net investment income
($.02, $.03, $.02, and
$.03 per share,
respectively)......... (1,232,423) (2,310,790) (964,037) (1,824,586)
Decrease in net assets
derived from capital
share transactions..... (7,315,824) (13,121,407) (3,236,260) (18,186,250)
----------- ------------ ----------- ------------
TOTAL DECREASE IN NET
ASSETS................. (7,320,985) (13,122,572) (3,237,882) (18,186,505)
NET ASSETS:
Beginning of period.... 69,099,679 82,222,251 55,043,218 73,229,723
----------- ------------ ----------- ------------
End of period.......... $61,778,694 $ 69,099,679 $51,805,336 $ 55,043,218
=========== ============ =========== ============
</TABLE>
See Accompanying Notes to Financial Statements.
50
<PAGE>
M.S.D.&T. FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VALUE VALUE INTERNATIONAL INTERNATIONAL
EQUITY FUND EQUITY FUND EQUITY FUND EQUITY FUND
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE
MONTHS ENDED ENDED MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 MAY 31, 1995
----------------- ------------ ----------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS:
Operations:
Net investment income.. $ 1,192,769 $ 2,324,502 $ 375,090 $ 739,139
Net realized gain on
investments and
foreign currency...... 2,320,935 2,649,128 2,224,686 1,653,228
Net increase (decrease)
in unrealized
appreciation
(depreciation) on
investments and
translation of assets
and liabilities in
foreign currency...... 4,315,037 7,369,860 (389,670) (2,312,652)
------------ ------------ ----------- -----------
Net increase in net
assets resulting
from operations....... 7,828,741 12,343,490 2,210,106 79,715
------------ ------------ ----------- -----------
Distributions to
shareholders from:
Net investment income
($.19,
$.34, $.00, and $.04
per share,
respectively)......... (1,310,478) (2,063,461) -- (145,995)
Net realized capital
gains
($.00, $.28, $.00 and
$.28 per share,
respectively)......... -- (1,856,680) -- (1,505,558)
------------ ------------ ----------- -----------
Total distributions
to shareholders..... (1,310,478) (3,920,141) 0 (1,651,553)
------------ ------------ ----------- -----------
Capital Share
Transactions:
Proceeds of shares
sold.................. 9,126,910 43,358,779 3,963,997 29,008,624
Cost of shares
redeemed.............. (7,424,108) (15,427,649) (3,715,038) (5,966,953)
Value of shares issued
in reinvestment
of dividends.......... 773,544 1,682,665 -- 230,530
------------ ------------ ----------- -----------
Increase in net assets
derived from capital
share transactions..... 2,476,346 29,613,795 248,959 23,272,201
------------ ------------ ----------- -----------
TOTAL INCREASE IN NET
ASSETS................. 8,994,609 38,037,144 2,459,065 21,700,363
NET ASSETS:
Beginning of period.... 91,277,389 53,240,245 69,172,323 47,471,960
------------ ------------ ----------- -----------
End of period.......... $100,271,998 $ 91,277,389 $71,631,388 $69,172,323
============ ============ =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements.
51
<PAGE>
M.S.D.&T. FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE INTERMEDIATE MARYLAND MARYLAND
FIXED FIXED TAX-EXEMPT TAX-EXEMPT
INCOME FUND INCOME FUND BOND FUND BOND FUND
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 MAY 31, 1995
----------------- ------------ ----------------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS:
Operations:
Net investment income.. $ 1,218,913 $ 2,274,051 $ 289,125 $ 802,877
Net loss on
investments........... 635,366 1,327,498 209,106 (129,142)
----------- ------------ ----------- -----------
Net increase in net
assets resulting from
operations............ 1,854,279 3,601,549 498,231 673,735
----------- ------------ ----------- -----------
Distributions to
shareholders from net
investment income
($.30, $.56, $.25,
and $.49 per share,
respectively).......... (1,218,913) (2,274,051) (289,125) (802,877)
----------- ------------ ----------- -----------
Capital Share
Transactions:
Proceeds of shares
sold.................. 4,058,967 19,879,026 595,552 1,287,287
Cost of shares
redeemed.............. (7,604,768) (12,149,096) (1,314,348) (9,025,879)
Value of shares issued
in reinvestment of
dividends............. 541,855 586,531 82,803 139,793
----------- ------------ ----------- -----------
Increase (decrease) in
net assets derived from
capital share
transactions........... (3,003,946) 8,316,461 (635,993) (7,598,799)
----------- ------------ ----------- -----------
TOTAL INCREASE
(DECREASE)
IN NET ASSETS.......... (2,368,580) 9,643,959 (426,887) (7,727,941)
NET ASSETS:
Beginning of period.... 44,651,761 35,007,802 12,360,061 20,088,002
----------- ------------ ----------- -----------
End of period.......... $42,283,181 $ 44,651,761 $11,933,174 $12,360,061
=========== ============ =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements.
52
<PAGE>
M.S.D.&T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PRIME MONEY MARKET FUND
-------------------------------------------------------------------------------------------
FOR THE FOR THE YEARS
SIX MONTHS ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 MAY 31, 1994 MAY 31, 1993 MAY 31, 1992 MAY 31, 1991
----------------- ------------ ------------ ------------- ------------ ------------
(UNAUDITED)
<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.. 0.0278 0.0491 0.0296 0.0297 0.0467 0.0712
-------- -------- -------- -------- -------- --------
Total From
Investment
Operations......... 0.0278 0.0491 0.0296 0.0297 0.0467 0.0712
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends to
Shareholders from Net
Investment Income..... (0.0278) (0.0491) (0.0296) (0.0297) (0.0467) (0.0712)
-------- -------- -------- -------- -------- --------
Total
Distributions...... (0.0278) (0.0491) (0.0296) (0.0297) (0.0467) (0.0712)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------
Total Return............ 2.81% 5.02% 3.00% 3.01% 4.77% 7.35%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Period (000).......... $382,979 $382,059 $346,694 $432,415 $402,745 $311,839
Ratio of Expenses to
Average Net Assets.... 0.43%(2) 0.43%(1) 0.38%(1) 0.37%(1) 0.35%(1) 0.38%(1)
Ratio of Net Income to
Average Net Assets.... 5.55%(2) 4.92% 2.95% 2.96% 4.55% 6.96%
</TABLE>
- --------
(1) Without the waiver of advisory fees and administration fees, the ratio of
expenses to average net assets for the six month period ended November 30,
1995 and the years ended May 31, 1995, May 31, 1994, May 31, 1993, May 31,
1992, and May 31, 1991 would have been .48%, .48%, .47%, .43%, .42%, and
.45%, respectively.
(2) Annualized
See Accompanying Notes to Financial Statements.
53
<PAGE>
M.S.D.&T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
---------------------------------------------------------------------------------------
FOR THE SIX FOR THE YEARS
MONTHS ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 MAY 31, 1994 MAY 31, 1993 MAY 31, 1992 MAY 31, 1991
----------------- ------------ ------------ ------------- ------------ ------------
(UNAUDITED)
<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............... 0.0272 0.0485 0.0294 0.0293 0.0465 0.0700
-------- -------- -------- -------- -------- --------
Total From
Investment
Operations......... 0.0272 0.0485 0.0294 0.0293 0.0465 0.0700
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends to
Shareholders from Net
Investment Income..... (0.0272) (0.0485) (0.0294) (0.0293) (0.0465) (0.0700)
-------- -------- -------- -------- -------- --------
Total
Distributions...... (0.0272) (0.0485) (0.0294) (0.0293) (0.0465) (0.0700)
-------- -------- -------- -------- -------- --------
Net Asset Value,
End of Period.......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ======== ========
- ------------------------------------------------------------------------------------------------------------------
Total Return............ 2.75% 4.95% 2.98% 2.97% 4.75% 7.23%
- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Period (000).......... $282,685 $263,752 $273,790 $255,637 $293,450 $333,121
Ratio of Expenses to
Average Net Assets.... 0.43%(2) 0.43%(1) 0.38%(1) 0.37%(1) 0.34%(1) 0.37%(1)
Ratio of Net Income to
Average Net Assets.... 5.43%(2) 4.85% 2.94% 2.93% 4.64% 6.97%
</TABLE>
- --------
(1) Without the waiver of advisory fees and administration fees, the ratio of
expenses to average net assets for the six months ended November 30, 1995
and the years ended May 31, 1995, May 31, 1994, May 31, 1993, May 31,
1992, and May 31, 1991 would have been .48%, .48%, .47%, .44%, .41%, and
.45%, respectively.
(2) Annualized.
See Accompanying Notes to Financial Statements.
54
<PAGE>
M.S.D.&T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY MARKET FUND
--------------------------------------------------------------------------------------
FOR THE SIX FOR THE YEARS
MONTHS ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 MAY 31, 1994 MAY 31, 1993 MAY 31, 1992 MAY 31, 1991
----------------- ------------ ------------ ------------- ------------ ------------
(UNAUDITED)
<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.. 0.0165 0.0303 0.0202 0.0217 0.0346 0.0494
Net Realized Gain on
Investments........... -- -- 0.0004 -- -- --
------- ------- ------- ------- ------- -------
Total From
Investment
Operations......... 0.0165 0.0303 0.0206 0.0217 0.0346 0.0494
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends to
Shareholders from Net
Investment Income..... (0.0165) (0.0303) (0.0202) (0.0217) (0.0346) (0.0494)
Distributions to
Shareholders from Net
Capital Gains......... -- -- (0.0004) -- -- --
------- ------- ------- ------- ------- -------
Total
Distributions...... (0.0165) (0.0303) (0.0206) (0.0217) (0.0346) (0.0494)
------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------
Total Return............ 1.66% 3.08% 2.08% 2.19% 3.51% 5.05%
- ----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Period (000).......... $61,779 $69,100 $82,222 $81,838 $72,687 $67,328
Ratio of Expenses to
Average Net Assets.... 0.43%(2) 0.43%(1) 0.38%(1) 0.37%(1) 0.38%(1) 0.38%(1)
Ratio of Net Income to
Average Net Assets.... 3.30%(2) 3.01% 2.02% 2.16% 3.42% 4.91%
</TABLE>
- --------
(1) Without the waiver of advisory fees and administration fees, the ratio of
expenses to average net assets for the six months ended November 30, 1995
and the years ended May 31, 1995, May 31, 1994, May 31, 1993, May 31,
1992, and May 31, 1991 would have been .50%, .52%, .50%, .44%, .46%, and
.47%, respectively.
(2) Annualized
See Accompanying Notes to Financial Statements.
55
<PAGE>
M.S.D.&T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY MARKET FUND (TRUST)
--------------------------------------------------------------------------------------
FOR THE SIX FOR THE YEARS
MONTHS ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 MAY 31, 1994 MAY 31, 1993 MAY 31, 1992 MAY 31, 1991
----------------- ------------ ------------ ------------- ------------ ------------
(UNAUDITED)
<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.. 0.0173 0.0320 0.0219 0.0238 0.0362 0.0512
Net Realized Gain on
Investments........... -- -- 0.0003 -- -- --
------- ------- ------- ------- ------- -------
Total From
Investment
Operations......... 0.0173 0.0320 0.0222 0.0238 0.0362 0.0512
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends to
Shareholders from Net
Investment Income..... (0.0173) (0.0320) (0.0219) (0.0238) (0.0362) (0.0512)
Distributions to
Shareholders from Net
Capital Gains......... -- -- (0.0003) -- -- --
------- ------- ------- ------- ------- -------
Total
Distributions...... (0.0173) (0.0320) (0.0222) (0.0238) (0.0362) (0.0512)
------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------
Total Return............ 1.75% 3.25% 2.24% 2.40% 3.68% 5.24%
- ----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Period (000).......... $51,805 $55,043 $73,230 $55,975 $62,502 $91,315
Ratio of Expenses to
Average Net Assets.... 0.22%(2) 0.22%(1) 0.20%(1) 0.20%(1) 0.20%(1) 0.20%(1)
Ratio of Net Income to
Average Net Assets.... 3.47%(2) 3.14% 2.19% 2.38% 3.63% 5.08%
</TABLE>
- --------
(1) Without the waiver of administration fees, the ratio of expenses to average
net assets for the six months ended November 30, 1995 and the years ended
May 31, 1995, May 31, 1994, May 31, 1993, May 31, 1992, and May 31, 1991
would have been .28%, .28%, .26%, .21%, .21%, and .21%, respectively.
(2) Annualized
See Accompanying Notes to Financial Statements.
56
<PAGE>
M.S.D.&T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
VALUE EQUITY FUND
-------------------------------------------------------------------------------------------------
FOR THE
FOR THESIX FOR THE FOR THE FOR THE FOR THE PERIOD
MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED FEBRUARY 28, 1991 (1)
NOVEMBER 30, 1995 MAY 31, 1995 MAY 31, 1994 MAY 31, 1993 MAY 31, 1992 TO MAY 31, 1991
----------------- ------------ ------------ ------------ ------------ ---------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $13.42 $12.14 $12.39 $11.36 $10.69 $10.00
-------- ------- ------- ------- ------- ------
Income From Investment
Operations:
Net Investment Income.. 0.17 0.35 0.29 0.29 0.33 0.09
Net Realized and
Unrealized Gain (Loss)
on Investments........ 0.96 1.55 (0.18) 1.13 0.66 0.60
-------- ------- ------- ------- ------- ------
Total From
Investment
Operations......... 1.13 1.90 0.11 1.42 0.99 0.69
-------- ------- ------- ------- ------- ------
Less Distributions:
Dividends to
Shareholders from Net
Investment Income..... (0.19) (0.34) (0.28) (0.30) (0.32) --
Distributions to
Shareholders from Net
Capital Gains......... -- (0.28) (0.08) (0.09) -- --
-------- ------- ------- ------- ------- ------
Total
Distributions...... (0.19) (0.62) (0.36) (0.39) (0.32) 0.00
-------- ------- ------- ------- ------- ------
Net Asset Value, End of
Period................. $14.36 $13.42 $12.14 $12.39 $11.36 $10.69
======== ======= ======= ======= ======= ======
- ---------------------------------------------------------------------------------------------------------------------------
Total Return............ 8.48% 16.22% 0.87% 12.87% 9.51% 6.90%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Period (000).......... $100,272 $91,277 $53,240 $46,754 $17,463 $4,801
Ratio of Expenses to
Average Net Assets.... 0.73%(2)(3) 0.73%(2) 0.68%(2) 0.68%(2) 0.68%(2) 0.68%(2)(3)
Ratio of Net Income to
Average Net Assets.... 2.48%(3) 2.99% 2.41% 2.68% 3.05% 4.10%(3)
Portfolio turnover
rate................... 20.32% 33.26% 61.16% 11.99% 9.57% 1.98%
</TABLE>
- --------
(1) Commencement of operations.
(2) Without the waiver of advisory fees and administration fees, the ratio of
expenses to average net assets for the six months ended November 30, 1995
and the years ended May 31, 1995, May 31, 1994, May 31, 1993, and May 31,
1992, and the period ended May 31, 1991 would have been .88%, .89%, .87%,
.88%, .96%, and 1.20% (annualized), respectively.
(3) Annualized.
See Accompanying Notes to Financial Statements.
57
<PAGE>
M.S.D. &T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
------------------------------------------------------------------
FOR THE SIX FOR THE FOR THE PERIOD
MONTHS ENDED YEAR ENDED JULY 2, 1993 (1)
NOVEMBER 30, 1995 MAY 31, 1995 TO MAY 31, 1994
----------------- ------------ ----------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 11.60 $ 11.81 $ 10.00
------- ------- -------
Income From Investment
Operations:
Net Investment Income...... 0.06 0.03 0.08
Net Realized and Unrealized
Gain on Investments and
Foreign Currency.......... 0.31 0.08 1.81
------- ------- -------
Total From Investment
Operations............. 0.37 0.11 1.89
------- ------- -------
Less Distributions:
Dividends to Shareholders
from Net Investment
Income.................... -- (0.04) (0.07)
Distributions to
Shareholders from Net
Capital Gains............. -- (0.28) (0.01)
------- ------- -------
Total Distributions..... -- (0.32) (0.08)
------- ------- -------
Net Asset Value, End of
Period..................... $ 11.97 $ 11.60 $ 11.81
======= ======= =======
- -----------------------------------------------------------------------------------------------
Total Return................ 3.28% 0.82% 18.98%
- -----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period
(000)..................... $71,631 $69,172 $47,472
Ratio of Expenses to
Average Net Assets........ 1.05%(2)(3) 1.05%(2) 1.00%(2)(3)
Ratio of Net Income to
Average Net Assets........ 1.04%(3) 0.06% 0.82%(3)
Portfolio turnover rate.... 20.85% 42.15% 39.49%
</TABLE>
- --------
(1) Commencement of operations.
(2) Without the waiver of advisory fees and administration fees, the
annualized ratio of expenses to average net assets for the six months
ended November 30, 1995 and the year ended May 31, 1995 and the period
ended May 31, 1994 would have been 1.15%, 1.16% and 1.20%, respectively.
(3) Annualized.
See Accompanying Notes to Financial Statements.
58
<PAGE>
M.S.D.&T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
INTERMEDIATE FIXED INCOME FUND
---------------------------------------------------------------------------------------------
FOR THE SIX FOR THE FOR THE FOR THE FOR THE FOR THE PERIOD
MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED MARCH 14, 1991 (1)
NOVEMBER 30, 1995 MAY 31, 1995 MAY 31, 1994 MAY 31, 1993 MAY 31, 1992 TO MAY 31, 1991
----------------- ------------ ------------ ------------ ------------ ------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.43 $10.10 $10.55 $10.31 $9.97 $10.00
------- ------- ------- ------- ------- ------
Income From Investment
Operations:
Net Investment Income.. 0.30 0.56 0.50 0.56 0.60 0.13
Net Realized and
Unrealized Gain (Loss)
on Investments........ 0.17 0.33 (0.39) 0.24 0.34 (0.03)
------- ------- ------- ------- ------- ------
Total From Invest-
ment Operations.... 0.47 0.89 0.11 0.80 0.94 0.10
------- ------- ------- ------- ------- ------
Less Distributions:
Dividends to
Shareholders from Net
Investment Income..... (0.30) (0.56) (0.50) (0.56) (0.60) (0.13)
Distributions to
Shareholders from Net
Capital Gains......... -- -- (0.06) -- -- --
------- ------- ------- ------- ------- ------
Total
Distributions...... (0.30) (0.56) (0.56) (0.56) (0.60) (0.13)
------- ------- ------- ------- ------- ------
Net Asset Value, End of
Period................. $10.60 $10.43 $10.10 $10.55 $10.31 $9.97
======= ======= ======= ======= ======= ======
- -----------------------------------------------------------------------------------------------------------------------
Total Return............ 4.54% 9.13% 0.94% 7.94% 9.68% 4.78%(3)
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Period (000).......... $42,283 $44,652 $35,008 $28,078 $17,549 $1,298
Ratio of Expenses to
Average Net Assets.... 0.60%(2)(3) 0.60%(2) 0.55%(2) 0.55%(2) 0.55%(2) 0.55%(2)(3)
Ratio of Net Income to
Average Net Assets.... 5.66%(3) 5.56% 4.75% 5.32% 5.76% 6.17%(3)
Portfolio turnover
rate................... 25.01% 22.01% 48.58% 12.29% 13.76% 34.73%
</TABLE>
- --------
(1) Commencement of operations.
(2) Without the waiver of advisory fees and administration fees, the ratio of
expenses to average net assets for the six months ended November 30, 1995
and the years ended May 31, 1995, May 31, 1994, May 31, 1993, and May 31,
1992, and the period ended May 31, 1991 would have been .70%, .70%, .66%,
.64%, .72%, and .97% (annualized), respectively.
(3) Annualized.
See Accompanying Notes to Financial Statements.
59
<PAGE>
M.S.D.&T. FUNDS, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
MARYLAND TAX-EXEMPT BOND FUND
---------------------------------------------------------------
FOR THE FOR THE YEAR FOR THE YEAR FOR THE PERIOD
SIX MONTHS ENDED ENDED ENDED JUNE 2, 1992 (1)
NOVEMBER 30, 1995 MAY 31, 1995 MAY 31, 1994 TO MAY 31, 1993
----------------- ------------ ------------ ----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $10.40 $10.25 $10.55 $10.00
------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income.. 0.25 0.49 0.50 0.48
Net Realized and
Unrealized
Gain (Loss) on Invest-
ments................ 0.18 0.15 (0.28) 0.55
------- ------- ------- -------
Total From
Investment
Operations......... 0.43 0.64 0.22 1.03
------- ------- ------- -------
Less Distributions:
Dividends to
Shareholders from Net
Investment Income..... (0.25) (0.49) (0.50) (0.48)
Distributions to
Shareholders from Net
Capital Gains......... -- -- (0.02) --
------- ------- ------- -------
Total Distribu-
tions.............. (0.25) (0.49) (0.52) (0.48)
------- ------- ------- -------
Net Asset Value, End of
Period................. $10.58 $10.40 $10.25 $10.55
======= ======= ======= =======
- ------------------------------------------------------------------------------------------
Total Return............ 4.17% 6.48% 1.99% 10.59%(3)
- ------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Pe-
riod (000)............ $11,933 $12,360 $20,008 $15,707
Ratio of Expenses to
Average Net Assets.... 0.62%(2)(3) 0.62%(2) 0.55%(2) 0.55%(2)(3)
Ratio of Net Income to
Average Net Assets.... 4.76%(3) 4.83% 4.66% 4.78%(3)
Portfolio turnover
rate................... 10.78% 36.80% 33.89% 17.59%
</TABLE>
- --------
(1) Commencement of operations.
(2) Without the waiver of advisory fees and administration fees, the ratio of
expenses to average net assets for the six months ended November 30, 1995
and the years ended May 31, 1995 and May 31, 1994 and the period ended May
31, 1993 would have been 1.06%, .97%, .86%, and .94% (annualized), respec-
tively.
(3) Annualized.
See Accompanying Notes to Financial Statements.
60
<PAGE>
M.S.D.&T. FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
M.S.D.&T. Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended, as an open-end management company. The Com-
pany was incorporated in Maryland on March 7, 1989. The Articles of Incorpora-
tion of the Company authorize ten billion shares, having a par value of $.001
per share. The Company is a series fund which is currently authorized to issue
eight classes of common stock, each of which corresponds to shares in one of
eight investment portfolios: the Prime Money Market Fund (Class A), the Gov-
ernment Money Market Fund (Class B), the Tax-Exempt Money Market Fund (Class
C), the Tax-Exempt Money Market Fund (Trust) (Class D), the Value Equity Fund
(Class E), the Intermediate Fixed Income Fund (Class F), the Maryland Tax-Ex-
empt Bond Fund (Class G) and the International Equity Fund (Class H)-(the
"Funds").
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements.
A) Security Valuation: Investment securities held by the Prime Money Market
Fund, Government Money Market Fund, Tax-Exempt Money Market Fund and Tax-
Exempt Money Market Fund (Trust) (the "Money Market Funds") are valued
under the amortized cost method, which approximates current market value.
Under this method, securities are valued at cost when purchased and,
thereafter, a constant proportionate amortization of any discount or pre-
mium is recorded until maturity of the security. Regular review and moni-
toring of the valuation is performed pursuant to procedures adopted by
the Company's Board of Directors in an attempt to avoid dilution or other
unfair results to shareholders. The Money Market Funds each seek to main-
tain a stable net asset value of $1.00 per share, but there can be no as-
surance that they will be able to do so.
Investments held by the Value Equity Fund, International Equity Fund,
Intermediate Fixed Income Fund and Maryland Tax-Exempt Bond Fund are
valued at market value or, in the absence of a market value with respect
to any portfolio securities, at fair value. A security that is primarily
traded on a domestic security exchange (including securities traded
through the National Market System) is valued at the last sale price on
that exchange or, if there were no sales during the day, at the current
quoted bid price. Portfolio securities that are primarily traded on for-
eign exchanges are generally valued at the closing values of such secu-
rities on their respective exchanges, provided that if such securities
are not traded on the valuation date, they will be valued at the preced-
ing closing values and provided further, that when an occurrence subse-
quent to the time of valuation is likely to have changed the value, then
the fair value of those securities will be determined through considera-
tion of other factors by or under the direction of the Company's Board
of Directors. Over-the-counter securities and securities listed or
traded on foreign exchanges with operations similar to the U.S. over-
the- counter market are valued at the mean of the most recent available
quoted bid and asked prices in the over-the-counter market. Market or
fair value may be determined on the basis of valuations provided by one
or more recognized pricing services approved by the Board of
61
<PAGE>
M.S.D.&T. FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
Directors, which may rely on matrix pricing systems, electronic data
processing techniques and/or quoted bid and asked prices provided by in-
vestment dealers. Short-term investments with maturities of 60 days or
less are valued at amortized cost which approximates fair value. The net
asset value per share of the Value Equity Fund, International Equity
Fund, Intermediate Fixed Income Fund and Maryland Tax-Exempt Bond Fund
will fluctuate as the values of their respective investment portfolios
change.
B) Security Transactions and Investment Income: Security transactions are
accounted for on the trade date. The cost of investments sold is deter-
mined by use of the specific identification method for both financial re-
porting and income tax purposes. Interest income is recorded on the ac-
crual basis; dividend income is recorded on the ex-dividend date.
Expenses not directly attributable to a specific Fund are allocated based
on the relative net assets of each Fund.
C) Dividends and Distributions to Shareholders: Dividends from net invest-
ment income are declared daily and paid monthly to shareholders of the
Money Market Funds, Intermediate Fixed Income Fund and the Maryland Tax-
Exempt Bond Fund; are declared and paid quarterly to shareholders of the
Value Equity Fund; and are declared and paid semiannually to shareholders
of the International Equity Fund. Any net realized capital gains are dis-
tributed annually.
Income distributions and capital gains distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principals. These differences are primarily due to
differing treatments for foreign currency transactions.
D) Federal Income Taxes: Each of the Funds is a separate taxable entity and
intends to qualify for tax treatment applicable to regulated investment
companies under the Internal Revenue Code, as amended, and, among other
things, is required to make the requisite distributions to its sharehold-
ers which will relieve it from Federal income or excise taxes. Therefore,
no provision has been recorded for Federal income or excise taxes.
Under current tax law, capital losses and foreign currency losses real-
ized after October 31 may be deferred and treated as occurring on the
first day of the following fiscal year. The following losses will be
treated as arising on the first day of fiscal year ended May 31, 1996.
<TABLE>
<CAPTION>
CAPITAL LOSSES FOREIGN CURRENCY
DEFERRED LOSSES DEFERRED
-------------- ----------------
<S> <C> <C>
Tax-Exempt Money Market Fund.............. $ 70 --
International Equity Fund................. -- $1,795,678
Intermediate Fixed Income Fund............ 25,645
Maryland Tax-Exempt Bond Fund............. 567,203 --
</TABLE>
62
<PAGE>
M.S.D.&T. FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
E) Organizational Costs: Costs incurred in connection with the registration
and initial public offering of shares of the Funds have been deferred and
are being amortized on a straight-line basis for a five-year period. The
Company's previous distributor has agreed that in the event it redeems
any of its shares during such period, it will reimburse the Company for
any unamortized organizational costs in the same proportion as the number
of shares to be redeemed bears to the number of shares that were ini-
tially purchased by the distributor and remain outstanding at the time of
redemption.
F) Repurchase Agreements: The Prime Money Market Fund, Government Money Mar-
ket Fund, Value Equity Fund, International Equity Fund, Intermediate
Fixed Income Fund and Maryland Tax-Exempt Bond Fund may agree to purchase
portfolio securities from financial institutions, such as banks and bro-
ker-dealers, subject to the seller's agreement to repurchase them at an
agreed upon date and price. In the case of the Prime Money Market Fund
and Government Money Market Fund, collateral for repurchase agreements
may have longer maturities than the maximum permissible remaining matu-
rity of portfolio investments. The seller will be required on a daily ba-
sis to maintain the value of the securities subject to the repurchase
agreement at not less than the repurchase price (including accrued inter-
est), plus the transaction costs the Funds could expect to incur if the
seller defaults, marked-to-market daily.
G) Foreign Currency Translation: Foreign currency amounts are translated
into U.S. dollars at prevailing exchange rates as follows: assets and li-
abilities at the rate of exchange prevailing at the end of the respective
period, purchases and sales of securities and income and expenses at the
rate of exchange prevailing on the dates of such transactions. The Inter-
national Equity Fund does not isolate that portion of the results of op-
erations resulting from changes in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
H) Forward Foreign Currency Contracts: The International Equity Fund enters
into forward foreign currency contracts in order to hedge its exposure to
changes in foreign currency exchange rates on its foreign portfolio hold-
ings. All commitments are marked-to-market daily at the applicable for-
eign exchange rate and any resulting unrealized gains or losses are re-
corded currently. The gain or loss arising from the difference between
the original contracts and the closing of such contracts is included in
income as a component of realized gain or loss on foreign currency.
Such contracts, which protect the value of a Fund's investment securi-
ties against a decline in the value of currency, do not eliminate fluc-
tuations in the underlying prices of the securities, but merely estab-
lish an exchange rate at a future date. Also, although such contracts
tend to minimize the risk of loss due to a decline in the value of a
hedged currency, at the same time they tend to limit any potential gain
that might be realized should the value of such foreign currency in-
crease.
63
<PAGE>
M.S.D.&T. FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
(UNAUDITED)
2. INVESTMENT ADVISER, DISTRIBUTOR AND OTHER RELATED PARTY TRANSACTIONS
Mercantile-Safe Deposit and Trust Company ("Mercantile") provides investment
advisory and administration services to each Fund pursuant to Investment Advi-
sory Agreements and an Administration Agreement. For its services the Adviser,
Mercantile receives an advisory fee computed daily and payable monthly at an
annual rate of .25% of the average daily net assets of each of the Prime Money
Market Fund, Government Money Market Fund, and Tax-Exempt Money Market Fund;
.60% of the average daily net assets of the Value Equity Fund; .80% of the av-
erage daily net assets of the International Equity Fund (.45% of which fee
Mercantile pays to Dunedin Fund Managers Ltd., as sub-adviser; .35% of the av-
erage daily net assets of the Intermediate Fixed Income Fund; and .50% of the
average daily net assets of the Maryland Tax-Exempt Bond Fund. For its serv-
ices as Administrator, Mercantile receives an administration fee computed
daily and payable monthly at an annual rate of .125% of the average daily net
assets of each Fund. Mercantile may, at its discretion, voluntarily waive any
portion of its advisory fee or its administration fee for any Fund. Mercantile
does not receive a fee for advisory services provided to the Tax-Exempt Money
Market Fund (Trust).
Shares in each Fund are sold on a continuous basis without a sales load by
the Company's distributor, BISYS Funds Services ("the Distributor"). The Dis-
tributor receives no fee for these services.
Directors of the Company each receive from the Company an annual fee of
$3,500 and a fee of $1,625 for each Board meeting attended and are reimbursed
for all out-of-pocket expenses relating to attendance at meetings. Officers of
the Company do not receive compensation from the Company for serving as offi-
cers. No person who is a director, officer or employee of the Adviser serves
as a director, officer or employee of the Company. During the six months ended
November 30, 1995, the Funds paid legal fees to a law firm, a partner of which
serves as Secretary of the Company.
3. NET ASSETS
At November 30, 1995, net assets consisted of the following:
<TABLE>
<CAPTION>
PRIME GOVERNMENT TAX-EXEMPT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND (TRUST)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Capital Paid-In......... $383,057,578 $282,833,782 $61,786,520 $51,808,363
Accumulated Realized
Loss on Investments.... (78,800) (148,313) (7,826) (3,027)
------------ ------------ ----------- -----------
$382,978,778 $282,685,469 $61,778,694 $51,805,336
============ ============ =========== ===========
</TABLE>
64
<PAGE>
M.S.D.&T. FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
(UNAUDITED)
3. NET ASSETS -- CONTINUED
<TABLE>
<CAPTION>
VALUE INTERNATIONAL INTERMEDIATE MARYLAND
EQUITY EQUITY FIXED INCOME TAX-EXEMPT
FUND FUND FUND BOND FUND
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
Capital Paid-In........... $ 81,751,369 $66,767,521 $41,198,682 $12,134,903
Accumulated Realized Gain
(Loss) on Investments.... 4,898,156 4,084,559 (115,652) (724,151)
Net Unrealized
Appreciation on
Investments and Foreign
Currency................. 13,186,341 632,522 1,206,847 522,422
Undistributed Net
Investment Income
(Distribution in Excess
of Net Investment
Income).................. 436,132 146,786 (6,696) --
------------ ----------- ----------- -----------
$100,271,998 $71,631,388 $42,283,181 $11,933,174
============ =========== =========== ===========
</TABLE>
4. CAPITAL STOCK
Transactions in shares of the Company are summarized as follows:
<TABLE>
<CAPTION>
PRIME MONEY MARKET FUND GOVERNMENT MONEY MARKET FUND
------------------------------ ------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 MAY 31, 1995
----------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C>
Shares Sold............. 235,571,575 492,510,690 273,656,599 467,743,955
Shares Redeemed......... (235,137,961) (457,766,048) (254,787,196) (477,734,723)
Shares Reinvested....... 504,457 683,060 75,214 84,488
------------ ------------ ------------ ------------
Net Increase (Decrease)
in Shares.............. 938,071 35,427,702 18,944,617 (9,906,280)
Shares Outstanding:
Beginning of Period.... 382,119,507 346,691,805 263,889,165 273,795,445
------------ ------------ ------------ ------------
End of Period.......... 383,057,578 382,119,507 282,833,782 263,889,165
============ ============ ============ ============
</TABLE>
65
<PAGE>
M.S.D.&T. FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
(UNAUDITED)
4. CAPITAL STOCK -- CONTINUED
<TABLE>
<CAPTION>
TAX-EXEMPT TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND (TRUST)
------------------------------ ------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 MAY 31, 1995
----------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C>
Shares Sold............. 51,987,589 93,743,923 19,133,261 46,932,392
Shares Redeemed......... (59,305,536) (106,897,393) (22,369,521) (65,118,642)
Shares Reinvested....... 2,123 32,063 0 0
----------- ------------ ----------- -----------
Net Increase (Decrease)
in Shares.............. (7,315,824) (13,121,407) (3,236,260) (18,186,250)
Shares Outstanding:
Beginning of Period.... 69,102,344 82,223,751 55,044,623 73,230,873
----------- ------------ ----------- -----------
End of Period.......... 61,786,520 69,102,344 51,808,363 55,044,623
=========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
VALUE EQUITY FUND INTERNATIONAL EQUITY FUND
------------------------------ ------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 MAY 31, 1995
----------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C>
Shares Sold............. 661,762 3,524,889 333,795 2,447,856
Shares Redeemed......... (536,969) (1,245,712) (311,104) (527,850)
Shares Reinvested....... 55,807 137,627 0 20,340
--------- ---------- --------- ---------
Net Increase in Shares.. 180,600 2,416,804 22,691 1,940,346
Shares Outstanding:
Beginning of Period.... 6,801,920 4,385,116 5,960,654 4,020,308
--------- ---------- --------- ---------
End of Period.......... 6,982,520 6,801,920 5,983,345 5,960,654
========= ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE FIXED INCOME FUND MARYLAND TAX-EXEMPT BOND FUND
------------------------------ ------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
NOVEMBER 30, 1995 MAY 31, 1995 NOVEMBER 30, 1995 MAY 31, 1995
----------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C>
Shares Sold............. 387,551 1,968,576 57,682 127,758
Shares Redeemed......... (730,034) (1,215,322) (126,176) (912,593)
Shares Reinvested....... 51,925 60,963 7,992 14,372
--------- ---------- --------- ---------
Net Increase (Decrease)
in Shares.............. (290,558) 814,217 (60,502) (770,463)
Shares Outstanding:
Beginning of Period.... 4,280,311 3,466,094 1,188,798 1,959,261
--------- ---------- --------- ---------
End of Period.......... 3,989,753 4,280,311 1,128,296 1,188,798
========= ========== ========= =========
</TABLE>
66
<PAGE>
M.S.D.&T. FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONCLUDED
(UNAUDITED)
5. FORWARD FOREIGN CURRENCY CONTRACTS
A summary of forward foreign currency contracts which were outstanding at
November 30, 1995 is as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
CONTRACTS TO APPRECIATION/
SETTLEMENT DATES DELIVER/RECEIVE IN EXCHANGE FOR (DEPRECIATION)
---------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Foreign Currency Sales.. 2/16/96 JY 1,278,851,900 $12,700,000 $14,688
----------- -------
$12,700,000 $14,688
----------- -------
Foreign Currency Pur-
chases................. 12/5/95 IT 787,500,000 493,730 (1,380)
----------- -------
$ 493,730 $(1,380)
=========== -------
$13,308
=======
</TABLE>
Currency Legend
ITItalian Lira
JYJapanese Yen
6. PURCHASES & SALES OF SECURITIES
For the six months ended November 30, 1995, total aggregate purchases and
proceeds from sales of investment securities (excluding short-term securities)
were as follows:
<TABLE>
<CAPTION>
U.S. U.S.
GOVERNMENT GOVERNMENT
PURCHASES * SALES * PURCHASES SALES
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Value Equity Fund.............. $19,548,511 $14,244,978 0 $ 4,011,250
International Equity Fund...... 21,831,579 14,370,543 0 0
Intermediate Fixed Income
Fund.......................... 0 1,488,815 10,440,791 11,965,259
Maryland Tax-Exempt Bond Fund.. 1,264,702 1,912,180 0 0
</TABLE>
*(excluding short-term and U.S. Government securities)
7. CAPITAL LOSS CARRYOVERS
At May 31, 1995, the following Funds had capital loss carryovers:
<TABLE>
<CAPTION>
CAPITAL LOSS EXPIRATION
CARRYOVER YEAR
------------ ----------
<S> <C> <C>
Prime Money Market Fund........................... $ 60,625 2003
Government Money Market Fund...................... 136,826 2003
Tax-Exempt Money Market Fund...................... 2,596 2003
Tax-Exempt (Trust) Money Market Fund.............. 1,405 2003
Intermediate Fixed Income Fund.................... 77,671 2003
Maryland Tax-Exempt Bond Fund..................... 227,043 2003
</TABLE>
The capital loss carryovers are available to offset possible future capital
gains, if any, of the respective Funds.
67
<PAGE>
IMPORTANT TAX INFORMATION
During the calendar year ended December 31, 1995:
100.0% of the distributions paid by the Prime Money Market Fund, the
Government Money Market Fund and the Intermediate Fixed Income Fund
were derived from net investment income and are taxable as ordinary in-
come.
43.8% of the distributions paid by the Value Equity Fund were derived
from net investment income and short-term capital gains and are taxable
as ordinary income and 56.2% were derived from long term capital gains
and are taxable at the long term capital gain rate. Of such distribu-
tions derived from net investment income and short-term capital gains,
100% qualify for the dividends received deduction available to corpo-
rate shareholders.
100.0% of the distributions paid by the Tax-Exempt Money Market Fund
and the Tax-Exempt Money Market Fund (Trust) were exempt-interest divi-
dends, excludable from gross income for Federal income tax purposes.
99.5% of the distributions paid by the Maryland Tax-Exempt Bond Fund
were exempt-interest dividends, excludable from gross income for Fed-
eral income tax purposes and 0.5% were derived from market discount on
tax exempt bonds and are taxable as ordinary income.
48.7% of the distributions paid by the International Equity Fund were
derived from net investment income and short-term capital gains and are
taxable as ordinary income and 51.3% were derived from long term capi-
tal gains and are taxable at the long term capital gain rate.
CAPITAL GAIN DISTRIBUTIONS
During the calendar year of 1995, the M.S.D.&T. Funds distributed capital
gains to shareholders of the Value Equity Fund and the International Equity
Fund. The Securities and Exchange Commission requires mutual funds to disclose
to shareholders the composition of the capital gain distribution. Pursuant to
this requirement, these percentages are listed below:
<TABLE>
<CAPTION>
SHORT-TERM LONG-TERM
---------- ---------
<S> <C> <C>
Value Equity Fund (on 12/1/95)....................... 15.6% 84.4%
International Equity Fund (on 12/27/95).............. 43.0% 57.0%
</TABLE>
Short-term capital gain distributions are taxable to you as ordinary income.
Long-term capital gain distributions are taxable to you as long term capital
gains.
68
<PAGE>
CUSTODIAN (EXCEPT FOR THE INTERNATIONAL EQUITY FUND)
Fifth Thrift Bank
Cincinnati, OH
DISTRIBUTOR
BISYS Funds Services
Columbus, Ohio
CUSTODIAN FOR THE INTERNATIONAL EQUITY FUND AND TRANSFER AGENT:
State Street Bank and Trust Company
Boston, MA
This report is submitted for the general information of the shareholders of
M.S.D.& T. Funds, Inc. It is not authorized for distribution to prospective
investors unless accompanied or preceded by current Prospectuses for the Funds
which contain information concerning the Funds' investment policies and ex-
penses as well as other pertinent information.
Shares of the Funds are not bank deposits or obligations of, or guaranteed,
endorsed or otherwise supported by Mercantile Safe Deposit and Trust Company,
its parent company or its affiliates and are not federally insured or guaran-
teed by the U.S. Government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other governmental agency. Investment in the
Funds involves investment risks, including possible loss of principal.
