As filed with the Securities and Exchange Commission on November 24, 1997
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 *
(File No. 33-41395)
Pre-Effective Amendment No. __ *
Post-Effective Amendment No. 10 *
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 *
(File No. 811-6340)
Amendment No. 11 *
(Check appropriate box or boxes.)
GREAT HALL INVESTMENT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
60 South Sixth Street, Minneapolis, Minnesota 55402
(Address of Principal Executive Offices) (Zip Code)
(612) 371-7765
(Registrant's Telephone Number, including Area Code)
J. Scott Spiker
60 South Sixth Street, Minneapolis, Minnesota 55402
(Name and Address of Agent for Service)
Copies to:
Matthew L. Thompson John R. Houston
Faegre & Benson LLP Lindquist & Vennum PLLP
2200 Norwest Center 80 South Eighth Street
90 South Seventh Street Minneapolis, Minnesota 55402
Minneapolis, Minnesota 55402
It is proposed that this filing will become effective (check appropriate
box):
* immediately upon filing pursuant to paragraph (b) of Rule 485
* on December 1, 1997 pursuant to paragraph (b) of Rule 485
* 60 days after filing pursuant to paragraph (a) of Rule 485
* on [date] pursuant to paragraph (a) of Rule 485
The Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant's most recent Rule 24f-2 Notice was filed
with the Commission on or about September 24, 1997.
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CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
(Prime Money Market Fund, U.S. Government Money Market Fund, Tax-Free Money
Market Fund and Institutional Prime Money Market Fund)
Item No.
of Form N-1A Caption in each Prospectus
1 Cover Page
2 Fees and Expenses
3 Financial Highlights; Performance
4 Investment Objectives and Policies; Certain Investment
Strategies and Restrictions; Description of the Funds
5 Investment Management; Description of the Funds;
Custodian and Transfer Agent
5A Not Applicable
6 Description of the Funds; Distributions; Taxes
7 How to Invest; Net Asset Value
8 How to Redeem Shares; Net Asset Value
9 Not Applicable
Caption in Statement of Additional Information
10 Cover Page
11 Contents
12 Not Applicable
13 Investment Restrictions; Investment Policies
14 Directors and Officers
15 General Information
16 Management and Distribution Agreements
17 Portfolio Transactions
18 General Information
19 Determination of Net Asset Value
20 Taxes
21 Not Applicable
22 Calculation of Performance Data
23 Financial Statements
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A
PART A
Prospectuses
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A
PART A
Prospectus of Great Hall Prime Money Market Fund,
Great Hall U.S. Government Money Market Fund and
Great Hall Tax-Free Money Market Fund
(each, a series of Great Hall Investment Funds, Inc.)
GREAT HALL
PRIME MONEY MARKET FUND
---------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND [LOGO]
---------------------------------------
TAX-FREE MONEY MARKET FUND
---------------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
Great Hall Prime Money Market Fund ("Prime Fund"), Great Hall U.S.
Government Money Market Fund ("Government Fund") and Great Hall Tax-Free Money
Market Fund ("Tax-Free Fund") (collectively, the "Funds") are diversified
series of Great Hall Investment Funds, Inc. ("Great Hall"), an open-end
management investment company (commonly known as a mutual fund) which currently
offers its shares of common stock in four series.
Each Fund has its own policies designed to achieve as high a level of
current income obtainable from short-term securities as is consistent with
prudent investment management, the preservation of capital and the maintenance
of liquidity. Prime Fund invests in a variety of high quality money market
instruments. Government Fund invests only in U.S. Treasury bills, notes, bonds
and other obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities and repurchase agreements secured by such obligations.
Tax-Free Fund invests in high quality, tax-exempt municipal obligations. Each
Fund seeks to maintain a net asset value of $1.00 per share. However,
investments in the Funds are neither insured nor guaranteed by the U.S.
Government, and there is no assurance that the Funds will be able to maintain a
stable net asset value of $1.00 per share.
AS WITH ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus pertains only to the Funds and does not pertain to any
other series of Great Hall. This Prospectus sets forth concisely the
information about the Funds that a prospective investor should know before
investing. Please read this Prospectus carefully before investing and retain
it for future reference. A Statement of Additional Information containing more
information about the Funds, dated December 1, 1997 (which is incorporated
herein by reference), has been filed with the Securities and Exchange
Commission (the "SEC") and is available upon request and without charge by
calling Great Hall at the number listed above.
Prospectus dated December 1, 1997
The "Great Hall" name is a trademark of Interra Financial Incorporated,
which will be renamed Dain Rauscher Corporation on or about January 2, 1998
("DRC"). DRC licenses this trademark in connection with a number of investment
products and services (including the Great Hall Investment Funds, Inc.)
sponsored or distributed by DRC or its subsidiaries.
No person is authorized to give any information or to make any
representations not contained in this Prospectus or in the Funds' official
sales literature; and any information or representation not contained herein
must not be relied upon as having been authorized by the Funds. Great Hall is
registered as an open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"). Such registration does not imply that
the Funds or any of their shares have been guaranteed, sponsored, recommended
or approved by the United States or any state or any agency or officer thereof
This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, securities in any state to any person to whom it is not
lawful to make such an offer or solicitation in such state.
FEES AND EXPENSES
The Funds are sold without a sales charge or any deferred sales load, an
there are no redemption fees or exchange fees. The following table illustrates
all anticipated fees and estimated expenses that a shareholder of a Fund will
incur.
Prime Gov't Tax-Free
Fund Fund Fund
---- ---- ----
Annual Fund Operating Expenses
(as a percentage of average net assets):
Management Fees........................... 0.49% 0.46% 0.50%
12b-1 Fees................................ none none none
Other Expenses............................ 0.15% 0.14% 0.09%
Total Fund Operating Expenses............. 0.64% 0.60% 0.59%
Example
You would pay the following expenses on a $1,000 investment assuming (1) a
5% annual return and (2) redemption at the end of each time period.
One Year................................. $7 $6 $6
Three Years.............................. 21 20 19
Five Years............................... 37 34 33
Ten Years................................ 82 77 74
The purpose of the above fees and expenses table is to assist the
investor in understanding the various costs and expenses that an investor in a
Fund will bear directly or indirectly. The above example should not be
considered representative of past or future expenses. Actual expenses may be
greater or less than those shown. Each Fund's investment adviser, Insight
Investment Management, Inc. ("Insight"), and/or the Funds' distributor, from
time to time may voluntarily waive or absorb certain Fund fees and expenses.
Any such program may be instituted or discontinued at any time in the sole
discretion of Insight and/or the Funds' distributor.
FINANCIAL HIGHLIGHTS
The following tables show certain per share data for a share of capital
stock outstanding during the indicated periods and selected information for
such periods for each Fund. This information has been derived from the Fund's
financial statements (which have been audited by KPMG Peat Marwick LLP, the
Funds' independent auditors) included in the Statement of Additional
Information and should be read in conjunction therewith.
Prime Fund
- ----------
<TABLE>
Period from
Year ended Year ended Year ended Year ended Year ended 11/1/91 to
7/31/97 7/31/96 7/31/95 7/31/94 7/31/93 7/31/92
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beg. of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- -----------
Income from investment ops............. 0.05 0.05 0.05 0.03 0.03 0.03
Distributions to shareholders from
investment income.................... (0.05) (0.05) (0.05) (0.03) (0.03) (0.03)
---------- ---------- ---------- ---------- ---------- -----------
Net asset value, end of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ========== ===========
Total return........................... 4.9% 5.0% 4.9% 2.8% 2.7% 2.9%
Net assets at end of period
(000s omitted)....................... $3,129,854 $2,405,456 $1,598,925 $1,029,775 $861,670 $834,743
Ratio of expenses to average daily
net assets**......................... 0.64% 0.70% 0.77% 0.80% 0.78% 0.71%*
Ratio of net investment income to
average daily net assets**........... 4.90% 4.93% 4.93% 2.81% 2.68% 3.63%*
</TABLE>
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* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
Insight during the periods referred to above. Had the Fund paid all expenses,
the ratios of expenses and net investment income to average daily net assets
would have been the same for the years ended July 31, 1997, 1996 and 1995;
0.81% and 2.80%, respectively, for the year ended July 31, 1994; 0.82% and
2.64%, respectively, for the year ended July 31, 1993; and 0.79% and 3.55%,
respectively, for the period ended July 31, 1992.
Government Fund
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<TABLE>
Period from
Year ended Year ended Year ended Year ended Year ended 11/1/91 to
7/31/97 7/31/96 7/31/95 7/31/94 7/31/93 7/31/92
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beg. of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- -----------
Income from investment ops............. 0.05 0.05 0.05 0.03 0.03 0.03
Distributions to shareholders from
investment income.................... (0.05) (0.05) (0.05) (0.03) (0.03) (0.03)
---------- ---------- ---------- ---------- ---------- -----------
Net asset value, end of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ========== ===========
Total return........................... 4.8% 4.9% 4.8% 2.7% 2.6% 2.6%
Net assets at end of period
(000s omitted)....................... $182,155 $146,685 $122,249 $56,815 $66,558 $60,834
Ratio of expenses to average daily
net assets**......................... 0.60% 0.65% 0.73% 0.78% 0.79% 0.76%*
Ratio of net investment income to
average daily net assets**........... 4.85% 4.87% 4.94% 2.73% 2.57% 3.47%*
</TABLE>
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* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
Insight during the period ended July 31, 1992. Had the Fund paid all expenses,
the ratios of expenses and net investment income to average daily net assets
would have been 0.79% and 3.44%, respectively, for the period.
Tax-Free Fund
- -------------
<TABLE>
Period from
Year ended Year ended Year ended Year ended Year ended 11/1/91 to
7/31/97 7/31/96 7/31/95 7/31/94 7/31/93 7/31/92
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beg. of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- -----------
Income from investment ops............. 0.03 0.03 0.03 0.02 0.02 0.02
Distributions to shareholders from
investment income.................... (0.03) (0.03) (0.03) (0.02) (0.02) (0.02)
---------- ---------- ---------- ---------- ---------- -----------
Net asset value, end of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ========== ===========
Total return........................... 3.0% 3.0% 3.1% 2.0% 2.1% 2.2%
Net assets at end of period
(000s omitted)....................... $422,740 $359,153 $363,273 $275,278 $209,469 $187,205
Ratio of expenses to average daily
net assets**......................... 0.58% 0.59% 0.60% 0.65% 0.67% 0.62%*
Ratio of net investment income to
average daily net assets**........... 3.02% 3.03% 3.14% 1.98% 2.09% 2.81%*
</TABLE>
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* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
Insight during the period ended July 31, 1992. Had the Fund paid all expenses,
the ratios of expenses and net investment income to average daily net assets
would have been 0.65% and 2.78%, respectively, for the period.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each Fund (set forth on the cover page)
along with the investment policies identified as "fundamental" may not be
changed without the affirmative vote of the majority of the applicable Fund's
outstanding voting shares (as defined in the 1940 Act). All other policies of
a Fund may be changed by the Board of Directors of Great Hall without
shareholder approval. There can be no guarantee that the investment objective
of any Fund will be achieved.
The Funds are designed for investors with cash reserves or temporary cash
balances seeking to maximize current income with a minimum of capital risk and
inconvenience while maintaining liquidity on a day-to-day basis without
penalty. Each of the Funds has adopted procedures that are designed to
maintain a net asset value of $1.00 per share for purposes of purchases and
redemptions. However, there can be no assurance that the Funds will be able to
maintain a $1.00 per share net asset value.
The securities in which the Funds invest may not earn as high a level of
current income as long-term or lower quality securities that generally have
less liquidity, greater market risk and more fluctuation in market value.
Rule 2a-7 Standards
Each Fund is managed in accordance with Rule 2a-7 under the 1940 Act
("Rule 2a-7"), which imposes strict portfolio quality, maturity and
diversification standards on money market funds. Great Hall's Board of
Directors has adopted guidelines designed to ensure compliance with Rule 2a-7
by each Fund, and the Board oversees Insight's day-to-day determinations that
each Fund is in compliance with Rule 2a-7. In certain respects, as described
below, the Funds are managed in accordance with standards that are more strict
than those required by Rule 2a-7.
Quality Standards. Each Fund must invest exclusively in U.S. dollar-
denominated investments that present minimal credit risk and are within Rule
2a-7's definition of "Eligible Securities." Eligible Securities include, among
others, securities that are rated by two Nationally Recognized Statistical
Rating Organizations ("NRSROs") (or if only one NRSRO has rated such security,
then by that one NRSRO) in one of the two highest short-term rating categories
(such as A-1 or A-2 by Standard & Poors Corporation ("S&P") and/or Prime-1 or
Prime-2 by Moody's Investors Service, Inc. ("Moody's")), or unrated securities
that are deemed to be of comparable quality. Prime Fund and Government Fund
invest exclusively in securities with two NRSRO ratings, and Tax-Free Fund's
investments must have at least one NRSRO rating. The Funds currently do not
invest in unrated securities.
Maturity Standards. Each investment by a Fund must mature (or be deemed
by Rule 2a-7 to mature) within 397 days of the time of investment. In
addition, each Fund must maintain a dollar-weighted average portfolio maturity
of 90 days or less. Government Fund voluntarily maintains a shorter dollar-
weighted average portfolio maturity of 60 days or less.
Diversification Standards. Immediately after the purchase of any
investment by a Fund (other than a U.S. Government security or a security that
is subject to a certain form of unconditional demand feature), the Fund may not
have invested more than 5% of its total assets in securities issued by such
issuer, except for certain temporary investments. Although Tax-Free Fund
currently is permitted by Rule 2a-7 to ignore this standard with respect to 25%
of its portfolio, the Fund voluntarily adheres to the standard with respect to
its entire portfolio.
In addition, Rule 2a-7 imposes strict limits on Prime Fund's and
Government Fund's investments in "Second Tier Securities," generally requiring
that at least 95% of each such Fund's investments must be in "First Tier
Securities." The Funds currently invest exclusively in First Tier Securities.
"First Tier Securities" are defined generally as Eligible Securities rated by
two NRSROs (or if only one NRSRO has rated such security, then by that one
NRSRO) in the highest short-term rating categories (such as A-1 by S&P and/or
Prime-1 by Moody's), or unrated securities that are deemed to be of comparable
quality. Second Tier Securities are all Eligible Securities other than First
Tier Securities.
Prime Fund
The Prime Fund seeks to provide, through investment in high quality money
market instruments, as high a level of current income obtainable from short-
term securities as is consistent with prudent investment management, the
preservation of capital and the maintenance of liquidity.
The Prime Fund may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; corporate debt obligations rated
AA or better by S&P or Aa or better by Moody's; obligations of banks and
savings and loans that are members of the Federal Deposit Insurance Corporation
(the "FDIC"), which obligations may include, but are not limited to,
certificates of deposit, bankers acceptances (bills of exchange used to finance
foreign trade) and letters of credit (commercial paper backed by a commercial
bank or other financial institution); high grade commercial paper (unsecured
indebtedness of business or banking firms); and repurchase agreements secured
by the foregoing. The Prime Fund does not intend to concentrate its
investments in any one industry but reserves the freedom of action to
concentrate in government securities and securities issued or guaranteed by
domestic banks and United States branches of foreign banks that are subject to
the same regulation as United States banks.
The Prime Fund may invest in deposit obligations of banks and savings and
loans that are members of the FDIC. Such obligations are not necessarily
guaranteed by the FDIC. Deposit obligations of domestic banks and savings and
loans are insured by the FDIC up to a maximum of $100,000, which limitation
applies to all funds that the Prime Fund may have on deposit at any one bank or
savings and loan.
The Prime Fund may also invest in U.S. dollar-denominated commercial
paper and other short-term obligations issued by foreign entities and U.S.
dollar-denominated obligations of foreign depository institutions and their
foreign branches and subsidiaries, such as certificates of deposit, bankers'
acceptances, time deposits and deposit notes. Obligations of foreign branches
and subsidiaries of foreign deposit institutions may be the general obligation
of the parent institution or may be limited to the issuing branch or subsidiary
by the terms of the specific obligation or by government regulation. Prime
Fund will not invest more than 25% of its total assets (taken at market value
at the time of each investment) in the obligations specified in this
paragraph.
Obligations of states and their agencies, instrumentalities and political
subdivisions that bear interest generally includable in gross income for
federal income tax purposes (collectively, "taxable municipal securities") are
also permissible investments for the Prime Fund. Certain taxable municipal
securities are not "general obligations" (obligations secured by the full faith
and credit or taxing power of a governmental body) and, in those cases, are
repayable only from such revenues as may be pledged to repay such securities.
The Prime Fund will not invest more than 5% of its total assets (taken at
market value at the time of each investment) in taxable municipal securities.
Investments in foreign securities and taxable municipal securities are
subject to the same general credit review and credit quality standards as are
applicable to the securities in which the Prime Fund is permitted to invest.
However, the financial information available on these obligations may be more
limited than what is available for securities that are registered with the SEC
or that otherwise are issued by entities that are required to file reports
under the Securities Exchange Act of 1934, as amended. Foreign securities are
subject to other risks that may include unfavorable political and economic
developments and possible withholding taxes or other governmental restrictions
that might affect the principal or interest on securities owned by the Prime
Fund.
Government Fund
The Government Fund seeks to provide, through investment in U.S. Treasury
bills, notes, bonds and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and repurchase agreements secured
by such obligations, as high a level of current income obtainable from short-
term securities as is consistent with prudent investment management, the
preservation of capital and the maintenance of liquidity.
Tax-Free Fund
The Tax-Free Fund seeks to provide, through investment in a
professionally managed portfolio of high quality municipal obligations, as high
a level of current income exempt from federal income taxation obtainable from
short-term securities as is consistent with prudent investment management, the
preservation of capital and the maintenance of liquidity.
The Tax-Free Fund may invest in debt obligations issued by or on behalf
of any state, territory or possession of the United States or the District of
Columbia or their political subdivisions, agencies or instrumentalities and
participation interests therein, the interest on which, in the opinion of
counsel for the issuer, is exempt from federal taxation. Specific types of
obligations that the Tax-Free Fund may purchase include bond anticipation
notes, construction loan notes, revenue anticipation notes and tax anticipation
notes, along with municipal bonds and participation interests therein, that are
Eligible Securities. In addition, the Tax-Free Fund may purchase other types
of tax-exempt municipal obligations, such as short-term discount notes and
certain variable or floating rate demand securities, including participation
interests therein, that are Eligible Securities.
The Tax-Free Fund will attempt to invest 100%, and as a fundamental
policy under normal circumstances will invest at least 80%, of the value of its
net assets in securities that generate interest that is exempt from federal
income taxes, including the individual federal alternative minimum tax. For
defensive purposes, the Tax-Free Fund may temporarily invest more than 20% of
the value of its total assets in taxable money market securities and tax-exempt
securities the income on which is an item of tax preference for purposes of the
federal alternative minimum tax when, in the opinion of Insight, it is
advisable to do so in light of prevailing market and economic conditions for
the purpose of preserving liquidity or capital or when Insight believes that
suitable tax-exempt securities are not available. When the Tax-Free Fund is in
such a temporary defensive position, it is not necessarily pursuing its
investment objective of providing income exempt from federal income taxation.
The Tax-Free Fund does not expect that such investments will be necessary.
CERTAIN INVESTMENT STRATEGIES AND RESTRICTIONS
Repurchase Agreements (applicable to all Funds). Each Fund may invest in
repurchase agreements. A repurchase agreement involves the purchase by a Fund
of securities with the condition that, after a stated period of time, the
original seller (which must be approved by the Board of Directors of Great Hall
and which must be among the 100 largest commercial banks or a primary reporting
dealer that reports to the Federal Reserve Bank of New York) will repurchase
the security at a mutually agreed upon time and price. Risks associated with
investments in repurchase agreements are described in the Statement of
Additional Information.
When-Issued Securities (applicable to Tax-Free Fund). The Tax-Free Fund
may purchase securities on a when-issued or delayed delivery basis. Delivery
and payment normally take place within one week of the purchase of notes and
within one month of the purchase of bonds. There is no limit on the amount of
assets that the Tax-Free Fund may invest in when-issued obligations. No
interest accrues to the Tax-Free Fund on when-issued securities prior to the
time such Fund takes delivery and makes payment. Purchase of when-issued
securities involves the risk that yields available in the market when delivery
occurs may be higher than those available when the when-issued order is placed.
The Custodian (as defined below) will maintain on a daily basis cash or liquid
debt securities with a value at least equal to the amount of the Tax-Free
Fund's commitments to purchase when-issued securities. During periods when
interest rates fluctuate substantially and the Tax-Free Fund remains
substantially fully invested at the same time it purchases securities on an
when-issued basis, there will be a greater possibility that the market value of
the Tax-Free Fund's assets will vary from $1.00 per share. However, under
normal circumstances its net asset value or income should not be affected by
its purchase of securities on a when-issued basis.
Municipal Obligations (applicable to Tax-Free Fund). The Tax-Free Fund
may invest in variable or floating rate demand notes from municipal and non-
governmental issuers, including participation interests therein. These
obligations normally have a stated maturity in excess of one year, but permit
the holder to demand payment of principal plus accrued interest upon a
specified number of days notice. The demand feature of variable rate
obligations is frequently supported by a letter of credit or comparable
guarantee provided by the selling institution (generally, banks that are
members of the Federal Reserve Board or insurance companies). A change in the
credit quality of these institutions, therefore, could cause losses to the Fund
and affect its share price. Such obligations will not be purchased unless
accompanied by an opinion of seller's counsel, given at the time of purchase by
the Tax-Free Fund, that the interest payable in connection with such
obligations is exempt from federal income tax. To the extent the portfolio of
the Tax-Free Fund is invested in variable or floating rate securities, yields
can be expected to decline in periods of falling interest rates more rapidly
than if the portfolio of the Fund were invested solely in fixed rate
securities. Conversely, yields, under these circumstances, can be expected to
increase more rapidly in periods of rising interest rates. See Investment
Policies in the Statement of Additional Information.
Section 4(2) Commercial Paper. Each Fund may invest without limitation
in commercial paper issued pursuant to Section 4(2) of the Securities Act of
1933 provided that Insight has determined such paper to be liquid in accordance
with guidelines established by Great Hall's Board of Directors. For additional
information, see "Investment Policies-Illiquid Investments: Liquidity
Guidelines" in the Statement of Additional Information.
Fundamental Policies and Restrictions (applicable to all Funds). The
following policies and restrictions of the Funds are fundamental and may not be
changed without the affirmative vote of a majority of the outstanding voting
securities of the applicable Fund.
Except as otherwise provided in the next sentence, each Fund may invest
no more than 5% of its total assets in the securities of any one issuer, except
for securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Each Fund may invest more than 5% (but no more than 25%) of
the then current value of such Fund's total assets in the securities of a
single issuer for a period of up to three business days, provided that: (a) the
securities either are rated by two NRSROs in the highest short-term rating
category or are securities of issuers that have received such rating with
respect to other short-term debt securities or are comparable unrated
securities; and (b) such Fund does not make more than one such investment at
any one time.
Each Fund may invest no more than 25% of its total assets in any one
industry, except for securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, and except that: (a) with respect to the
Tax-Free Fund, this restriction does not apply to general obligation municipal
securities, and (b) with respect to the Prime Fund and the Tax-Free Fund, this
restriction does not apply to securities issued or guaranteed by domestic banks
or United States branches of foreign banks that are subject to the same
regulation as United States banks.
For a complete list of investment restrictions, see "Investment
Restrictions" in the Statement of Additional Information.
INVESTMENT MANAGEMENT
Insight, 60 South Sixth Street, Minneapolis, Minnesota 55402, serves as
each Fund's investment adviser. Pursuant to the investment advisory agreement
in effect between the Funds and Insight (the "Advisory Agreement"), Insight
manages the investment and reinvestment of each Fund's assets in accordance
with such Fund's investment objective, policies and limitations, subject to the
general supervision and control of Great Hall's Board of Directors. In
addition, Insight is responsible for the overall management of each Fund's
business affairs, subject to the authority of the Board of Directors of Great
Hall. Under the Advisory Agreement, Insight furnishes office facilities and
clerical and administrative services to the Funds and may also bear certain
promotional expenses, including a portion of the costs of printing and
distributing prospectuses utilized for promotional purposes. Insight also
performs and bears the internal costs of research, statistical analysis and
continuous supervision of the investment portfolios of each Fund. Insight
(formerly Insight Bond Management, Inc.) has been registered with the SEC as an
investment adviser since 1983, and has been a portfolio manager of publicly
offered investment companies since 1986. Insight is a wholly owned subsidiary
of DRC.
Under the Advisory Agreement, Insight is entitled to receive a monthly
advisory fee based upon a percentage of each Fund's average daily net assets.
During the year ended July 31, 1997, Prime Fund, Government Fund and Tax-Free
Fund accrued advisory fees equal to approximately 0.49%, 0.46% and 0.50%,
respectively, of their average daily net assets.
Each Fund pays all its expenses that are not expressly assumed by
Insight. These expenses include, among others, the advisory fee, the fees and
expenses of directors of Great Hall who are not "affiliated persons" of
Insight, interest expense, taxes, brokerage fees and commissions, fees and
expenses of registering and qualifying each Fund and its shares for
distribution under federal and state securities laws, expenses of preparing
prospectuses and of printing and distributing prospectuses annually to existing
shareholders, custodian and portfolio accounting charges, auditing and legal
expenses, insurance expense, association membership dues, and the expense of
shareholders' reports, meetings and proxy solicitations. Each Fund is also
liable for such nonrecurring expenses as may arise, including litigation to
which such Fund may be a party. Each Fund and/or Great Hall may have an
obligation to indemnify its directors and officers with respect to such
litigation.
HOW TO INVEST
You may purchase shares of each Fund at the net asset value next
determined following receipt of an order in federal funds. The Funds are sold
without a sales charge. You may open an account and make your initial
investment in a Fund by contacting your investment executive. See "Shareholder
Services."
The Funds are distributed by Dain Bosworth Incorporated ("Dain") and
Rauscher Pierce Refsnes, Inc. ("Rauscher"), each a member firm of the New York
Stock Exchange (the "NYSE"), the National Association of Securities Dealers,
Inc. and a wholly owned subsidiary of DRC. On or about January 2, 1998,
Rauscher will be merged into Dain, and the combined firm will be renamed Dain
Rauscher Incorporated ("Dain Rauscher"). Prior to January 2, 1998, Dain and
Rauscher together and, following January 2, 1998, the combined Dain Rauscher,
will be referred to as the "Distributor." Great Hall and the Distributor
reserve the right to reject in whole or in part any order to purchase shares of
the Funds. The Funds do not issue share certificates.
HOW TO REDEEM SHARES
You may redeem shares for cash through the Distributor at the net asset
value next computed after receipt of a redemption request in proper form. If
shares have been purchased by check and are being redeemed, the purchase check
must be collected before payment for the redemption can be made. Redemption
will be treated as a sale for federal income tax purposes. See "Taxes."
Under the 1940 Act, the right of redemption may be suspended or the date
of payment postponed for more than seven days at times when the NYSE is closed
other than customary weekend or holiday closings, or when trading on the NYSE
is restricted, or under certain emergency circumstances as determined by the
SEC.
NET ASSET VALUE
The net asset value of each Fund is determined as of the primary closing
time of the NYSE (currently 4:00 p.m. New York time), Monday through Friday,
except on: (a) days during which no Fund shares are tendered for redemption and
no order to purchase or sell Fund shares is received by the Fund; or (b) the
following national holidays: New Year's Day, Martin Luther King, Jr. Day,
Washington's Birthday, Good Friday, Memorial Day (observed), Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
The Board of Directors of Great Hall expects that the net asset value per
share for each of the Funds will ordinarily be $1.00. The net asset value per
share of each Fund is calculated by subtracting each Fund's liabilities from
the value of its assets (based on the amortized cost method) and dividing the
result by the number of outstanding shares of such Fund. The amortized cost
method values each Fund's portfolio securities at such Fund's acquisition cost
as adjusted for amortization of premium or accretion of discount rather than at
their value based on current market factors.
DISTRIBUTIONS
All dividends and distributions of each Fund will be reinvested in
additional shares of such Fund (including fractional shares where necessary) at
net asset value.
Each Fund will declare dividends from net investment income daily, Monday
through Friday (except on customary national business holidays or when the
Funds' transfer agent is not open for business) at 3:00 p.m. Central time,
immediately prior to the determination of net asset value. The Funds will
distribute such dividends monthly on the last business day of each month. The
Funds do not expect to realize any net long-term capital gains. If such gains
are realized, however, they will be distributed at least annually and will be
taxable as "long-term" capital gains, regardless of the length of time the
shareholder has held the shares. Each daily dividend is payable on "shares of
record" at the time of its declaration. For this purpose, "shares of record"
means shares purchased for which payment has been received by the Distributor
or the applicable Fund and excludes shares redeemed on the day of the dividend
declaration.
TAXES
Each Fund qualified as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"), during its last
taxable year and intends to continue to do so. If so qualified, the Fund will
not be subject to federal income taxes to the extent net investment income and
net capital gain are timely distributed to shareholders.
Prime Fund and Government Fund
All dividends other than capital gain dividends that will be paid to
shareholders will be taxable as ordinary income, even if reinvested in
additional shares. In the case of corporate shareholders, no dividends paid by
the Funds will qualify for the dividends received deduction for corporations.
Capital gain dividends will be taxable as capital gain, even if reinvested in
additional shares.
Under federal law, the income derived from obligations issued by the U.S.
Government and certain of its agencies and instrumentalities is exempt from
state individual income taxes. Most states that tax personal income permit
mutual funds to pass through this tax exemption to shareholders. The
Government Fund will report to its shareholders annually the percentage and
source of interest income earned on such Government obligations to permit
shareholders to claim the exemption from state income taxes where permitted.
Tax-Free Fund
The Tax-Free Fund will distribute substantially all of its investment
income and net capital gain to shareholders. Dividends derived from interest
earned on tax-exempt municipal obligations designated as exempt-interest
dividends by the Fund will not be subject to federal income taxation. Capital
gain dividends will be taxed as capital gains, even if reinvested in additional
shares. Dividends, if any, derived from sources other than tax-exempt interest
and net capital gains will be taxable to shareholders as ordinary income for
federal income tax purposes even if reinvested in additional shares.
For federal income tax purposes, an alternative minimum tax ("AMT") is
imposed on taxpayers to the extent that such tax exceeds a taxpayer's regular
income tax liability (with certain adjustments). Exempt-interest dividends
attributable to interest income on certain tax-exempt obligations issued after
August 7, 1986 to finance certain private activities are treated as an item of
tax preference that is included in alternative minimum taxable income for
purposes of computing the federal AMT for all taxpayers and the federal
environmental tax on corporations. The Tax-Free Fund may invest in such
obligations, provided that at least 80% of the value of such Fund's net assets
will, during normal market conditions, be invested in tax-exempt obligations
the interest on which is not an item of tax preference for purposes of the AMT.
In addition, all other tax-exempt interest received by a corporation, including
exempt-interest dividends, will be included in adjusted current earnings for
purposes of determining the federal corporate AMT.
The Tax-Free Fund anticipates that substantially all of its dividends
will be exempt from federal income taxes and will notify each shareholder
annually of the tax status of all distributions. Distributions by the Fund may
be subject to state and local taxes. You should consult your tax adviser
regarding the tax status of such distributions in the relevant state and
locality. The Tax-Free Fund will report to its shareholders annually the
percentage and source, on a state-by-state basis, of interest income earned on
municipal obligations held during the preceding year.
SHAREHOLDER SERVICES
Shareholder inquiries may be directed to Insight or your investment
executive. Written inquiries to Insight should be directed to Insight at the
address set forth on the cover of this Prospectus. You may call Insight, toll
free, at (800) 934-6674.
Each of the Funds intends to send to shareholders written notification of
their purchase or redemption transactions on a monthly basis in lieu of
immediate confirmation, within five business days after the end of each month.
If there is no purchase or redemption activity in a shareholder's account, a
quarterly statement will be sent.
PERFORMANCE
From time to time, each Fund may advertise its yield, which reflects the
rate of income the Fund earns on its investments as a percentage of its price
per share. All yield figures are based on historical earnings and are not
intended to indicate future performance.
The current yield of the Funds refers to the income generated over a
seven-day period (which period will be stated in the advertisement). The
income is then annualized. That is, the amount of income generated by the
investment that week is assumed to be generated each week over a 52-week period
and is shown as a percentage of the investment. The effective or compounded
yield of the Funds is calculated similarly, but, when annualized, the income
earned by an investment in a Fund is assumed to be reinvested. The effective
or compounded yield will be slightly higher than the current yield because of
the compounding effect of this assumed reinvestment.
The Tax-Free Fund may advertise its taxable equivalent yield, which will
be calculated by applying the stated income tax rate only to that portion of
the Tax-Free Fund's seven-day yield or effective yield that is exempt from
taxation. The stated income tax rate is subtracted from the number 1 (e.g., 1
minus 36% equals 64%), and the tax-exempt portion of the yield is divided by
the difference. The result is then added to that portion of the Funds yield,
if any, that is not tax-exempt.
Performance advertising by each Fund may include total return data. The
total return of a Fund refers to its overall change in value, assuming all
dividends and gains distributions are reinvested. Total return is calculated
by finding the average annual compounded rates of return of a hypothetical
investment, over one-, five- and ten-year periods of time, that would compare
the initial amount to the ending redeemable value of such investment.
A Fund may also use aggregate total return figures for various periods,
representing the cumulative change in value of an investment in such Fund for
the specific period (again reflecting change in Fund share prices and assuming
reinvestment of dividends and distributions). Aggregate total returns may be
shown by means of schedules, charts or graphs, and may indicate subtotals of
the various components of total return (i.e., change in value of initial
investment, income dividends and capital gains distributions).
The Funds performance from time to time in reports or promotional
literature may be compared to generally accepted indices or analyses such as
those provided by Lipper Analytical Service, Inc., S&P, Dow Jones, CDA
Investment Technologies, Inc., Morningstar and Investment Company Data
Incorporated. Performance ratings reported periodically in national financial
publications also may be used.
DESCRIPTION OF THE FUNDS
Great Hall was incorporated under the laws of the State of Minnesota in
June 1991 and is registered with the SEC under the 1940 Act as an open-end
management investment company (commonly known as a "mutual fund"). This
registration does not involve supervision of management or investment policy by
an agency of the federal government. Great Hall is authorized to issue shares
representing interests in separate series. Currently, Great Hall offers its
shares in four separate series. One hundred billion shares have been
designated for each of the Prime Fund, the Government Fund and the Tax-Free
Fund.
Great Hall is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend to
hold such meetings. The Board of Directors may convene shareholder meetings
when it deems appropriate and is required under Minnesota law to schedule
regular or special meetings in certain circumstances. Additionally, under
Section 16(c) of the 1940 Act, the Board of Directors of Great Hall must
promptly call a meeting of shareholders for the purpose of voting upon the
question of removal of any director when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares.
Under Minnesota law, the Board of Directors has overall responsibility
for managing Great Hall in good faith, in a manner reasonably believed to be in
the best interests of Great Hall, and with the care an ordinarily prudent
person in a like position would exercise in similar circumstances. The Articles
of Incorporation of Great Hall limit the liability of directors to the fullest
extent permitted by law.
CUSTODIAN AND ACCOUNTING SERVICES AGENTS
Norwest Bank Minnesota, N.A., 733 Marquette Avenue, Minneapolis,
Minnesota 55479-0040, serves as the custodian of the Funds. Rodney Square
Management Corporation, 1105 North Market Street, Fifth Floor, Wilmington,
Delaware 19890-0001 serves as the transfer agent of the Funds. Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri 64105-
1716, serves as the fund accounting agent of the Funds. Pursuant to a
Shareholder Account Services Agreement, the Distributor also performs certain
shareholder accounting services for the Funds.
TAX EXEMPT VS. TAXABLE INCOME
The table below shows the approximate yields that taxable securities must
earn to equal federally tax-exempt yields under selected federal income tax
brackets. The 39.6% federal rate is the highest rate currently in effect and
currently scheduled to be in effect for individuals in 1998.
Taxable Equivalent Yields
-----------------------------------
Federal Tax Brackets
-----------------------------------
Tax-Free Yields 28% 31% 36% 39.6%
--------------- ----- ----- ----- -----
2.0%.......... 2.78 2.90 3.13 3.31
2.5%.......... 3.47 3.62 3.91 4.14
3.0%.......... 4.17 4.35 4.69 4.97
3.5%.......... 4.86 5.07 5.47 5.79
4.0%.......... 5.56 5.80 6.25 6.62
4.5%.......... 6.25 6.52 7.03 7.45
5.0%.......... 6.94 7.25 7.81 8.28
This table does not take into consideration any federal alternative
minimum tax. In addition, the table is based upon yields that are
derived solely from tax-exempt income. To the extent that Tax-Free
Fund's actual yield is derived from taxable income, the Fund's equivalent
taxable yield will be less than set forth in the table. The tax-free
yields used in the table should not be considered as representations of
any particular rates of return and are for purposes of illustration only.
TABLE OF CONTENTS
Page
----
Fees and Expenses......................................................2
Financial Highlights...................................................3
Investment Objectives and Policies.....................................5
Certain Investment Strategies and Restrictions.........................8
Investment Management.................................................10
How To Invest.........................................................11
How To Redeem Shares..................................................11
Net Asset Value.......................................................11
Distributions.........................................................12
Taxes.................................................................12
Shareholder Services..................................................13
Performance...........................................................14
Description of the Funds..............................................15
Custodian and Accounting Services Agents..............................15
Tax Exempt vs. Taxable Income.........................................16
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A
PART A
Prospectus of Great Hall Institutional Prime Money Market Fund
(a series of Great Hall Investment Funds, Inc.) is not being
amended herewith and is therefore not being filed
as a part of this Post-Effective Amendment.
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A
PART B
Statements of Additional Information
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A
Statement of Additional Information
of Great Hall Prime Money Market Fund,
Great Hall U.S. Government Money Market Fund and
Great Hall Tax-Free Money Market Fund
(each, a series of Great Hall Investment Funds, Inc.)
GREAT HALL
PRIME MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
TAX-FREE MONEY MARKET FUND
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
-----------------------------------
STATEMENT OF ADDITIONAL INFORMATION
dated December 1, 1997
-----------------------------------
Great Hall Prime Money Market Fund ("Prime Fund"), Great Hall U.S.
Government Money Market Fund ("Government Fund") and Great Hall Tax-Free Money
Market Fund ("Tax-Free Fund") (collectively, the "Funds") are diversified
series of Great Hall Investment Funds, Inc. ("Great Hall"), an open-end
management investment company (commonly known as a mutual fund) which currently
offers its shares of common stock in four series. This Statement of Additional
Information relates only to the Funds and does not relate to any other series
of Great Hall.
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectus of the Funds, dated December 1,
1997, which has been filed with the Securities and Exchange Commission (the
"SEC"). To obtain a copy of the Prospectus, please call Great Hall or your
investment executive.
TABLE OF CONTENTS
-----------------
Page
----
Investment Policies......................................... B-2
Investment Restrictions..................................... B-8
Taxes....................................................... B-10
Portfolio Transactions...................................... B-11
Management and Distribution Agreements...................... B-12
Determination of Net Asset Value............................ B-13
Calculation of Performance Data............................. B-14
Directors and Officers...................................... B-16
General Information......................................... B-18
Counsel and Auditors........................................ B-19
Financial and Other Information............................. B-19
Appendix--Ratings of Investments............................ A-1
Financial Statements........................................ F-1
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information or the Prospectus dated December 1, 1997, and, if given or made,
such information or representations may not be relied upon as having been
authorized by Great Hall or the Distributor (as defined herein). This
Statement of Additional Information does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state or jurisdiction in
which such offering or solicitation may not lawfully be made. The delivery of
this Statement of Additional Information at any time shall not imply that there
has been no change in the affairs of any of the Funds since the date hereof.
INVESTMENT POLICIES
The following information supplements that set forth under "Investment
Objectives and Policies" and "Certain Investment Strategies" in the Prospectus
and does not, standing alone, present a complete explanation of the matters
disclosed. You must also refer to the Prospectus to obtain information on the
matters disclosed below.
All Funds
Government Securities. Each Fund may invest without limitation in
obligations of the United States Government or agencies or instrumentalities of
the United States Government ("Government Obligations"). Government Obligations
are backed in a variety of ways by the U.S. Government or its agencies or
instrumentalities. Some Government Obligations, such as U.S. Treasury bills,
notes and bonds and securities issued by the Government National Mortgage
Association ("GNMA"), are backed by the full faith and credit of the United
States Treasury. Others, such as those of the Federal Home Loan Banks, are
backed by the right of the issuer to borrow from the U.S. Treasury. Still
other Government Obligations, such as those issued by the Federal National
Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation
("FHLMC") and the Student Loan Marketing Association, are backed only by the
credit of the agency or instrumentality issuing the obligations and, in certain
instances, by the discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality. In none of these cases,
however, does the United States Government guarantee the value or yield of the
Government Obligations themselves or the net asset value of any Fund's shares.
Repurchase Agreements. Each Fund may enter into repurchase agreements
with respect to any of the securities in which the Fund may invest directly. A
repurchase agreement is an agreement under which a Fund will purchase a
security subject to resale to a bank or dealer at an agreed-upon price and
date. The transaction requires the collateralization of the seller's
obligation by the transfer to the Fund's custodian of eligible securities with
an initial market value, including accrued interest, equal to at least the
dollar amount invested by the Fund in each agreement, and with the value of the
underlying securities marked to market daily to maintain at least 100%
collateralization of the repurchase price (including accrued interest). A
default by the seller might cause the Fund to experience a loss or delay in the
liquidation of the collateral securing the repurchase obligation and might also
cause the Fund to incur disposition costs in liquidating the collateral.
However, each Fund intends to enter into repurchase agreements only with
primary dealers that report to the Federal Reserve Bank of New York or with the
100 largest U.S. commercial banks (as measured by domestic deposits).
Additionally, each Fund intends to follow the collateral custody, protection
and perfection guidelines recommended by the Comptroller of the Currency for
the use of national banks in their direct repurchase agreement activities. As
a non-fundamental policy, no Fund will invest more than 10% of its net assets
in repurchase agreements maturing in more than 7 days and other illiquid
investments.
Illiquid Investments; Liquidity Guidelines. Each Fund is permitted to
invest up to 10% of its assets in all forms of "illiquid" investments and may
invest without limitation in "restricted" securities which Insight Investment
Management, Inc., each Fund's investment adviser ("Insight"), pursuant to
liquidity standards established by Great Hall's Board of Directors, has
determined are liquid. An investment is generally deemed to be "illiquid" if
it cannot be disposed of within seven days in the ordinary course of business
at approximately the amount at which the investment company is valuing the
investment. "Restricted securities" are securities which were originally sold
in private placements and which have not been registered under the Securities
Act of 1933 (the "1933 Act"). Such securities generally have been considered
illiquid by the staff of the SEC, since such securities may be resold only
subject to statutory restrictions and delays or if registered under the 1933
Act. However, the SEC has acknowledged that a market exists for certain
restricted securities (for example, securities qualifying for resale to certain
"qualified institutional buyers" pursuant to Rule 144A under the 1933 Act).
Additionally, Insight believes that a similar market exists for commercial
paper issued pursuant to the private placement exemption of Section 4(2) of the
1933 Act. Each Fund may invest without limitation in these forms of restricted
securities if such securities are deemed by Insight to be liquid in accordance
with liquidity guidelines established by Great Hall's Board of Directors.
Under these guidelines, Insight must consider (a) the frequency of trades and
quotes for the security, (b) the number of dealers willing to purchase or sell
the security and the number of other potential purchasers, (c) dealer
undertakings to make a market in the security, and (d) the nature of the
security and the nature of the marketplace trades (for example, the time needed
to dispose of the security, the method of soliciting offers and the mechanics
of transfer). Investing in restricted securities could have the effect of
increasing the level of each Fund's illiquidity to the extent that qualified
purchasers of the securities become, for a time, uninterested in purchasing
these securities.
Great Hall Prime Money Market Fund
Prime Fund invests in high quality, domestic money market instruments,
including but not limited to marketable obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities (described below under
"Great Hall U.S. Government Money Market Fund"); corporate debt obligations
that are rated AA or better by Standard & Poor's Corporation ("S&P"), or Aa or
better by Moody's Investors Service, Inc. ("Moody's"); obligations of banks and
savings and loans that are members of the Federal Deposit Insurance Corporation
(the "FDIC"), which obligations may include, but are not limited to,
certificates of deposit, bankers' acceptances and documented discount notes and
letters of credit; high-grade commercial paper guaranteed or issued by domestic
corporations; and instruments (including repurchase agreements) secured by such
obligations. All securities mature within 397 days from the date of purchase
as required by Rule 2a-7 under the Investment Company Act of 1940 (the "1940
Act"), although repurchase agreements may be collateralized by securities
maturing in longer than 397 days.
Investments in obligations of banks and savings and loans are limited to:
(a) certificates of deposit issued by banks with assets in excess of
$500,000,000 or branches of such banks; (b) certificates of deposit or other
deposit obligations of savings and loans with assets in excess of $500,000,000;
and (c) bankers' acceptances, letters of credit or other obligations guaranteed
by banks meeting the above criteria. Bankers' acceptances are short-term
credit instruments used to finance the import, export, transfer or storage of
goods. They are termed "accepted" when a bank guarantees their payment at
maturity. Obligations issued or guaranteed by FDIC member institutions are not
necessarily guaranteed by the FDIC. Deposit obligations of domestic banks and
savings and loans are only insured by the FDIC up to a maximum of $100,000,
which limitation applies to all funds that Prime Fund may have on deposit at
any one bank or savings and loan. Bankers' acceptances and letters of credit
are not so insured. Deposit obligations of foreign banks or foreign branches
of domestic banks also are not covered by FDIC insurance; in addition, such
investments may involve other risks different from risks associated with
investments in deposit obligations of domestic banks, such as future political
and economic developments and the possible imposition of governmental
restrictions.
Permissible commercial paper investments generally consist of obligations
rated Prime-1 or A-1, or their subsequent equivalents, by Moody's or S&P, or
unrated commercial paper issued by companies with an unsecured debt issue
outstanding that is rated Aa or better by Moody's or AA or better by S&P.
Commercial paper constitutes unsecured indebtedness of business or banking
firms issued to finance their short-term financial needs. Prime Fund may also
purchase corporate debt obligations maturing within 397 days from the date of
acquisition with a minimum rating of Aa or AA.
Great Hall Tax-Free Money Market Fund
Tax-Free Fund invests in debt obligations issued by or on behalf of any
state, territory or possession of the United States or the District of Columbia
or their political subdivisions, agencies or instrumentalities, and
participation interests therein, the interest on which is, in the opinion of
counsel for the issuer, wholly exempt from federal income taxation.
The types of obligations that Tax-Free Fund may purchase include bond
anticipation notes, construction loan notes, revenue anticipation notes and tax
anticipation notes that are Eligible Securities. Tax-Free Fund may also invest
in municipal bonds and participation interests therein, including industrial
development revenue bonds and pollution control revenue bonds, and other types
of tax-exempt municipal obligations, such as short-term discount notes, all of
which must be Eligible Securities.
Securities purchased by Tax-Free Fund mature within 397 days from the
date of purchase or carry variable or floating rates that are adjusted at least
every 397 days and have demand features and quality characteristics that under
applicable law and interpretations of such law permit the securities to be
treated as if they mature in 397 days or less from the date of purchase.
Bond anticipation notes are issued in anticipation of a later issuance of
bonds and are usually payable from the proceeds of the sale of the bonds
anticipated or of renewal notes. Construction loan notes, issued to provide
construction financing for specific projects, are often redeemed after the
projects are completed and accepted with funds obtained from the Federal
Housing Administration under "Fannie Mae" (Federal National Mortgage
Association) or "Ginnie Mae" (Government National Mortgage Association).
Revenue anticipation notes are issued by governmental entities in anticipation
of revenues to be received later in the then current fiscal year. Tax
anticipation notes are issued by state and local governments in anticipation of
collection of taxes to finance the current operations of such governments.
These notes are generally repayable only from tax collections and often only
from the proceeds of the specific tax levy whose collection they anticipate.
Municipal bonds are usually issued to obtain funds for various public
purposes, to refund outstanding obligations, to meet general operating expenses
or to obtain funds to lend to other public institutions and facilities. They
are generally classified as either "general obligation" or "revenue" bonds and
frequently have maturities in excess of 397 days at the time of issuance,
although a number of such issues now have variable or floating interest rates
and demand features that may permit Tax-Free Fund to treat them as having
maturities of less than 397 days. There are many variations in the terms of,
and the underlying security for, the various types of municipal bonds. General
obligation bonds are issued by states, counties, regional districts, cities,
towns and school districts for a variety of purposes including mass
transportation, highway, bridge, school, road, and water and sewer system
construction, repair or improvement. Payment of these bonds is secured by a
pledge of the issuer's full faith and credit and taxing (usually property tax)
power.
Revenue bonds are payable solely from the revenues generated from the
operations of the facility or facilities being financed or from other non-tax
sources. These bonds are often secured by debt service revenue funds, rent
subsidies and/or mortgage collateral to finance the construction of housing,
highways, bridges, tunnels, hospitals, university and college buildings, port
and airport facilities, and electric, water, gas and sewer systems. Industrial
development revenue bonds and pollution control revenue bonds are usually
issued by local government bodies or their authorities to provide funding for
commercial or industrial facilities, privately operated housing, sports
facilities, health care facilities, convention and trade show facilities, port
facilities and facilities for controlling or eliminating air and water
pollution. Payment of principal and interest on such bonds is not secured by
the taxing power of the governmental body. Rather, payment is dependent solely
upon the ability of the users of the facilities financed by the bonds to meet
their financial obligations and the pledge, if any, of real and personal
property financed as security for payment.
Although Tax-Free Fund may invest more than 25% of its net assets in:
(a) municipal obligations whose issuers are in the same state; (b) municipal
obligations the interest upon which is paid solely from revenues of similar
projects; and (c) industrial development and pollution control revenue bonds
that are not variable or floating rate demand municipal obligations, it does
not presently intend to do so on a regular basis. The identification of the
issuer of a tax-exempt security for purposes of the 1940 Act depends on the
terms and conditions of the security. When the assets and revenues of an
agency, authority, instrumentality or other political subdivision are separate
from those of the government creating the subdivision and the security is
backed only by the assets and revenues of the subdivision, such subdivision
would be deemed to be the sole issuer. Similarly, in the case of an industrial
development bond, if that bond is backed by the assets and revenues of the non-
governmental user, then such non-governmental user would be deemed to be the
sole issuer. Generally, the District of Columbia, each state, each of its
political subdivisions, agencies, instrumentalities and authorities, and each
multi-state agency of which a state is a member, is a separate "issuer" as that
term is used in the Prospectus and this Statement of Additional Information
with respect to Tax-Free Fund, and the non-governmental user of facilities
financed by industrial development or pollution control revenue bonds is also
considered to be an issuer.
Legislation to restrict or eliminate the federal income tax exemption for
interest on certain municipal obligations that may be purchased by Tax-Free
Fund has been introduced in Congress; other such legislation also may be
introduced in the future by Congress or by state legislatures. If enacted, any
such legislation could adversely affect the availability of municipal
obligations for Tax-Free Fund's portfolio. Upon the effectiveness of any such
legislation that materially affects the Tax-Free Fund's ability to achieve its
investment objective, the Board of Directors of Great Hall will reevaluate the
Fund's investment objective and submit to its shareholders for approval
necessary changes in its objectives and policies.
Variable and Floating Rate Demand Municipal Obligations. Variable and
floating rate demand municipal obligations are tax-exempt obligations that
provide for a periodic adjustment in the interest rate paid on the obligations
and permit the holder to demand payment of the unpaid principal balance plus
accrued interest upon a specified number of days' notice either from the issuer
or by drawing on a bank letter of credit or comparable guarantee issued with
respect to such obligations. The issuer of such an obligation may have a
corresponding right to prepay in its discretion the outstanding principal of
the obligation plus accrued interest upon notice comparable to that required
for the holder to demand payment.
The variable or floating rate demand municipal obligations in which Tax-
Free Fund may invest are payable on demand at any time on no more than 30 days'
notice or at specified intervals not exceeding 397 days and upon no more than
30 days' notice. The terms of such obligations must provide that interest
rates are adjustable at intervals ranging from weekly up to annually. The
adjustments are based upon the prime rate of a bank or other appropriate
interest rate adjustment index as provided in the respective obligations. Such
obligations are subject to the quality characteristics for municipal
obligations set forth above and described in the Prospectus. Tax-Free Fund may
invest, without limitation, in such obligations.
The principal and accrued interest payable to Tax-Free Fund on demand
will be supported by an irrevocable letter of credit or comparable guarantee of
a financial institution (generally a commercial bank) whose short-term taxable
debt meets the quality criteria for investment by Tax-Free Fund in municipal
obligations, except in cases where the security itself meets the credit
criteria of the Fund without such letter of credit or comparable guarantee.
Thus, although the underlying variable or floating rate demand obligation may
be unrated, Tax-Free Fund in such cases will have at all times an alternate
credit source to draw upon for payment with respect to such security.
Tax-Free Fund may also purchase participation interests in variable or
floating rate obligations. Such participation interests will have, as part of
the participation agreement between the Fund and the selling financial
institution, a demand feature that permits Tax-Free Fund to demand payment from
the seller of the principal amount of the Fund's participation plus accrued
interest thereon. This demand feature always will be supported by a letter of
credit or comparable guarantee provided by the selling financial institution.
Such financial institution will retain a service fee, a letter of credit fee
and a fee for issuing commitments to purchase on demand in an amount equal to
the excess of the interest paid on the variable or floating rate obligation in
which Tax-Free Fund has a participation interest over the negotiated yield at
which the participation interest was purchased. Accordingly, Tax-Free Fund
will purchase such participation interests only when the yield to the Fund, net
of such fees, is equal to or greater than the yield then available on other
variable rate demand securities or short-term, fixed rate, tax-exempt
securities of comparable quality and where the fees are reasonable in relation
to the services provided by the financial institution and the security and
liquidity provided by the letter of credit or guarantee.
While variable and floating rate demand municipal obligations are
expected to have maturities in excess of 397 days, Great Hall currently expects
that Tax-Free Fund will exercise its right to demand payment of principal and
accrued interest on such an obligation if it no longer meets the Fund's quality
standards, unless, of course, the obligation can be sold for a greater amount
in the market.
Stand-By Commitments. Consistent with the requirement of Rule 2a-7, Tax-
Free Fund may also acquire "stand-by commitments" with respect to obligations
held in its portfolio. Under a "stand-by commitment," a dealer agrees to
purchase, at Tax-Free Fund's option, specified obligations at a specified
price. "Stand-by commitments" are the equivalent of a "put" option acquired by
Tax-Free Fund with respect to particular obligations held in its portfolio.
The amount payable to Tax-Free Fund upon its exercise of a "stand-by
commitment" will normally be: (a) Tax-Free Fund's acquisition cost of the
obligation (excluding any accrued interest that Tax-Free Fund paid on its
acquisition), less any amortized market premium or plus any amortized market or
original issue discount during the period Tax-Free Fund owned the obligation;
plus (b) all interest accrued on the obligations since the last interest
payment date during the period such obligation is owned by Tax-Free Fund.
"Stand-by commitments" may be acquired when the remaining maturity of the
underlying obligation is greater than 60 days, but will be exercisable by Tax-
Free Fund only during the 60 day period before the maturity of such obligation.
Absent unusual circumstances, Tax-Free Fund will value the underlying
obligation on an amortized cost basis. Accordingly, the amount payable by a
dealer during the time a "stand-by commitment" is exercisable is substantially
the same as the value of the underlying obligation. Tax-Free Fund's right to
exercise "stand-by commitments" must be unconditional and unqualified. A
"stand-by commitment" is not transferable by Tax-Free Fund, although it may
sell the underlying obligation to a third party at any time.
Tax-Free Fund expects that "stand-by commitments" will generally be
available without the payment of any direct or indirect consideration.
However, if necessary and advisable, it may pay for "stand-by commitments"
either separately in cash or by paying a higher price for obligations that are
acquired subject to such a commitment (thus reducing the yield to maturity
otherwise available for the same securities). The total amount paid in either
manner for outstanding "stand-by commitments" held in Tax-Free Fund's portfolio
may not exceed 1/2 of 1% of the value of Tax-Free Fund's total assets
calculated immediately after each "stand-by commitment" is acquired.
Tax-Free Fund intends to enter into "stand-by commitments" only with
dealers, banks and broker-dealers that, in the opinion of Insight, present
minimum credit risks. Tax-Free Fund's reliance upon the credit of these
dealers, banks and broker-dealers is secured by the value of the underlying
obligations that are subject to the commitment. However, the failure of a
party to honor a "stand-by commitment" could have an adverse impact on the
liquidity of Tax-Free Fund during periods of rising interest rates.
Tax-Free Fund intends to acquire "stand-by commitments" solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes. The acquisition of a "stand-by commitment"
will not affect the valuation or maturity of the underlying obligation, which
will continue to be valued in accordance with the amortized cost method.
"Stand-by commitments" will be valued at zero in determining net asset value.
Where Tax-Free Fund pays directly or indirectly for a "stand-by commitment,"
its cost will be reflected as unrealized depreciation for the period during
which the commitment is held. "Stand-by commitments" will not affect the
average weighted maturity of Tax-Free Fund's portfolio.
"When-lssued" Obligations. Tax-Free Fund may make commitments to
purchase municipal obligations on a "when-issued" basis, i.e., delivery and
payment for the obligations normally takes place at a date after the commitment
to purchase although the payment obligation and the coupon rate have been
established before the time the Fund enters into the commitment. The
settlement date usually occurs within one week of the purchase of notes and
within one month of the purchase of bonds. Great Hall intends that Tax-Free
Fund will make commitments to purchase obligations with the intention of
actually acquiring them, but may sell the obligations before settlement date if
such action is advisable or necessary as a matter of investment strategy. At
the time the Fund makes a commitment to purchase an obligation, it will record
the transaction and reflect the value of the obligation in determining its net
asset value. The Custodian will maintain on a daily basis a separate account
for the Fund consisting of cash or liquid debt securities with a value at least
equal to the amount of the Fund's commitments to purchase "when-issued"
obligations.
Obligations purchased on a "when-issued" basis or held in Tax-Free Fund's
portfolio are subject to changes in market value based not only upon the
public's perception of the creditworthiness of the issuer but also upon changes
in the level of interest rates. In the absence of a change in credit
characteristics, which, of course, will cause changes in value, the value of
portfolio investments can be expected to decline in periods of rising interest
rates and to increase in periods of declining interest rates. Therefore, if to
achieve higher interest income Tax-Free Fund remains substantially fully
invested at the same time that it has purchased obligations on a "when-issued"
basis, there will be a greater possibility that the market value of Tax-Free
Fund's assets will vary from $1.00 per share. See "Net Asset Value." However,
Tax-Free Fund does not believe that under normal circumstances its net asset
value or income will be affected by its purchase of obligations on a "when-
issued" basis.
When payment is made for "when-issued" securities, Tax-Free Fund will
meet its obligations from its then available cash flow, sale of securities held
in the separate account, sale of other securities or, although it would
normally not expect to do so, from sale of the "when-issued" securities
themselves (which may have a market value greater or less than the Fund's
obligation). Sale of securities to meet such obligations would involve a
greater potential for the realization of capital gains, which could cause Tax-
Free Fund to realize income not exempt from federal income taxation.
State and Municipal Lease Obligations. Tax-Free Fund is permitted to
invest in state and municipal lease obligations ("municipal leases").
Traditionally, municipal leases have been viewed by the SEC staff as illiquid
investments. However, subject to Board standards similar to the standards
applicable to restricted securities (as discussed in the Prospectus), Insight
may treat certain municipal leases as liquid investments and not subject to the
policy limiting investments in illiquid investments.
Municipal leases are issued by state and local governments or authorities
to finance the acquisition of equipment and facilities. Municipal leases may
take the form of a lease, an installment purchase or conditional sale contract
or a participation certificate in such a lease or contract. Municipal leases
frequently have the special risks described below which are not associated with
general obligation or revenue bonds issued by public bodies. In determining
municipal leases in which the Funds will invest, Insight will evaluate the
credit rating of the lessee and the terms of the lease. Additionally, Insight
may require that certain municipal leases be secured by a letter of credit or
put arrangement with an independent financial institution.
The constitution and statutes of many states contain requirements with
which the state and municipalities must comply whenever incurring debt. These
requirements may include approving voter referendums, debt limits, interest
rate limits and public sale requirements. Municipal leases have evolved as a
means for public bodies to acquire property and equipment without needing to
comply with all of the constitutional and statutory requirements for the
issuance of debt. The debt-issuance limitations may be inapplicable for one or
more of the following reasons: (a) the inclusion in many municipal leases of a
"nonappropriation clause" that provides that the public body has no obligation
to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly
or other periodic basis; (b) the exclusion of a municipal lease from the
definition of indebtedness under relevant state law; or (c) the provision in
the municipal lease for termination at the option of the public body at the end
of each fiscal year for any reason or, in some cases, automatically if not
affirmatively renewed.
If a municipal lease is terminated by the public body for
nonappropriation or other reason not constituting a default under the lease,
the rights of the lessor or holder of a participation interest therein are
limited to repossession of the leased property without any recourse to the
general credit of the public body. The disposition of the leased property by
the lessor in the event of termination of the lease might, in many cases, prove
difficult or result in a loss.
Municipal leases represent a relatively new type of financing that has
not yet developed the depth of marketability associated with more conventional
municipal obligations. Therefore, as mentioned above, municipal leases held by
Tax-Free Fund will be treated as illiquid unless they are determined to be
liquid pursuant to the aforementioned liquidity guidelines. Additionally, the
lack of an established trading market for municipal leases may make the
determination of fair market value more difficult.
INVESTMENT RESTRICTIONS
In addition to the investment objectives and those policies identified as
fundamental in the Prospectus, each of the Funds has adopted the following
investment restrictions and limitations, which may not be changed without
approval of shareholders owning a majority of the outstanding shares of each
such Fund, which as used in the Prospectus and this Statement of Additional
Information means the lesser of: (a) 67% or more of the shares present at a
shareholders' meeting if more than 50% of such Fund's shares are represented at
the meeting in person or by proxy; or (b) more than 50% of the outstanding
shares of such Fund.
None of the Funds may:
(1) purchase common stocks, preferred stocks, warrants or other equity
securities;
(2) purchase securities, if immediately after such purchase more than
5% of its total assets would be invested in the securities of any one issuer
(excluding securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities), except that, subject to applicable SEC rules (see the
discussion of Rule 2a-7 below), up to 25% of its total assets may be invested
without regard to this 5% limitation;
(3) invest more than 25% of its total assets in any one industry,
except that (i) with respect to Tax-Free Fund, this restriction shall not apply
to municipal obligations; (ii) with respect to Prime Fund and Tax-Free Fund
this restriction shall not apply to securities issued or guaranteed by domestic
banks or United States branches of foreign banks that are subject to the same
regulation as United States banks; and (iii) this restriction shall not apply
to securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities;
(4) invest more than 5% of its assets in securities of issuers which,
with their predecessors, have a record of less than three years continuous
operation. (Securities of such issuers will not be deemed to fall within this
limitation if they are guaranteed by an entity in continuous operation, with
its predecessor, for more than three years);
(5) borrow money, except for temporary or emergency non-investment
purposes such as to accommodate abnormally heavy redemption requests, and then
only in an amount not exceeding 5% of the value of its total assets at the time
of borrowing;
(6) pledge, mortgage or hypothecate its assets, except that to secure
borrowings permitted by (5) above, it may pledge securities having a market
value at the time of such pledge not exceeding 15% of its total assets;
(7) sell securities short or purchase any securities on margin, except
for such short-term credits as are necessary for clearance of portfolio
transactions;
(8) write, purchase or sell put or call options, straddles, spreads or
any combination thereof except that Tax-Free Fund may acquire rights to resell
obligations as set forth herein under "Great Hall Tax-Free Money Market Fund -
Variable and Floating Rate Demand Municipal Obligations" and "Stand-By
Commitments";
(9) underwrite any securities issued by others;
(10) purchase or sell real estate or real estate mortgage loans
(although the Funds may invest in obligations secured by interests in real
estate), commodities, commodity contracts (including futures contracts), real
estate partnership interests and oil, gas and mineral leases;
(11) make loans, other than by entering into repurchase agreements and
through the purchase of other permitted investments in accordance with its
investment objective and policies; provided, however, that it may not enter
into a repurchase agreement if, as a result thereof, more than 10% of its total
assets would be subject to repurchase agreements maturing in more than seven
days;
(12) invest in companies for the purpose of exercising control or
management of another company; or
(13) invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
With respect to the application of the 5% limitation contained in
investment restriction (2) above to Tax-Free Fund, the non-governmental user of
facilities financed by industrial development or pollution control revenue
bonds and a financial institution issuing a letter of credit or comparable
guarantee supporting a variable rate demand municipal obligation are considered
to be issuers. In addition to the above restrictions and limitations, Tax-Free
Fund may not purchase securities that are not municipal obligations and the
income from which is subject to federal income tax, if such purchase would
cause more than 20% of its total assets to be invested in such securities,
except that Tax-Free Fund may invest more than 20% of its total assets in such
securities during other than normal market conditions. Bonds subject to the
alternative minimum tax are considered taxable for this test.
With respect to the 25% exception referred to in restriction (2) above,
Rule 2a-7 of the 1940 Act permits a Fund to invest more than 5% (but no more
than 25%) of the then current value of such Fund's total assets in the
securities of a single issuer for a period of up to three business days,
provided that: (a) the securities either are rated by two Nationally Recognized
Statistical Rating Organizations in the highest short-term rating category or
are securities of issuers that have received such rating with respect to other
short-term debt securities or are comparable unrated securities; and (b) such
Fund does not make more than one such investment at any one time.
With respect to investment restriction (13) above, "investment companies"
refers only to companies registered as investment companies under the 1940 Act
In addition to the fundamental limitations set forth above, as a non-
fundamental policy, each Fund may not invest more than 10% of its net assets in
all forms of illiquid investments, as set forth in the Prospectus under
"Illiquid Investments."
With respect to each of the Funds, if a percentage restriction or
limitation is adhered to at the time of investment, a later increase or
decrease in such percentage resulting from a change in values or net assets
will not be considered a violation thereof.
TAXES
Taxation of the Funds-In General
Each of the Funds has qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
intends to continue to do so. To so qualify, a Fund must, among other things;
(a) derive in each taxable year at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, gains from the
sale or other disposition of stock, securities or foreign currencies, or other
income derived with respect to its business of investing in such stock,
securities or currencies (the "90% test"); and (b) satisfy certain
diversification requirements at the close of each quarter of such Fund's
taxable year. Furthermore, in order to be entitled to pay exempt-interest
dividends to shareholders, Tax-Free Fund must satisfy the requirement that, at
the close of each quarter of its taxable year, at least 50% of the value of its
total assets consists of obligations the interest on which is exempt from
federal income tax ("tax-exempt obligations").
As a regulated investment company, a Fund will not be liable for federal
income taxes on the part of its taxable net investment income and net capital
gains, if any, that it distributes to shareholders if at least 90% of its net
investment income (including tax-exempt income net of any disallowed deductions
relating thereto) and net short-term capital gain for the taxable year is
distributed. However, if for any taxable year a Fund does not satisfy the
requirements of Subchapter M of the Code, all of its taxable income will be
subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to
shareholders as ordinary income to the extent of such Fund's current or
accumulated earnings and profits.
Each Fund will be liable for a nondeductible 4% excise tax on amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement. To avoid the tax, during each calendar year a Fund must
distribute: (a) at least 98% of its ordinary income (not taking into account
any capital gains or losses) for the calendar year; (b) at least 98% of its
capital gain net income for the twelve-month period ending on October 31 (or
December 31, if such Fund so elects); and (c) any portion (not taxed to such
Fund) of the respective balances from the prior year. Each Fund intends to
make sufficient distributions to avoid this 4% excise tax.
If Tax-Free Fund disposes of a tax-exempt obligation that it acquired
after April 30, 1993 at a market discount, it must recognize any gain it
realizes on the disposition as ordinary income (and not as capital gain) to the
extent of the accrued market discount.
If a shareholder receives an exempt-interest dividend with respect to any
share and sells or exchanges such share after holding it for six months or
less, any loss on the sale or exchange of such share will be disallowed to the
extent of the amount of such exempt-interest dividend. In certain limited
instances, the portion of Social Security benefits received by shareholders
that are subject to federal income tax may be affected by the amount of tax-
exempt interest income, including exempt-interest dividends, received by
shareholders of the Fund.
Distributions of exempt-interest dividends by Tax-Free Fund may be
subject to state and local taxes even though a substantial portion of such
distributions may be derived from interest on tax-exempt obligations that, if
realized by the shareholder directly, would be exempt from such taxes. Tax-
Free Fund will report to its shareholders annually after the close of its
taxable year the percentage and source, on a state-by-state basis, of interest
income earned on tax-exempt obligations held by such Fund during the preceding
year. Shareholders of Tax-Free Fund are advised to consult their tax advisers
concerning the application of state and local taxes.
Under the Code, investors will not be allowed to deduct interest on
indebtedness incurred or continued to purchase or carry shares of an investment
company paying exempt-interest dividends, such as the Funds, to the extent such
interest expenses relate to exempt-interest dividends received by the
shareholder. State laws may also restrict the deductibility of interest on
indebtedness incurred or continued to purchase or carry shares of a Fund.
Indebtedness may be allocated to shares of a Fund even though not directly
traceable to the purchase of such shares.
Tax-Free Fund may acquire variable and floating rate demand municipal
obligations and "stand-by commitments" or "puts" from banks and municipal
securities dealers. See "Great Hall Tax-Free Money Market Fund - Variable and
Floating Rate Demand Municipal Obligations" and "Stand-By Commitments" in this
Statement of Additional Information. With respect to each such acquisition, an
opinion of issuer's counsel will be issued that Tax-Free Fund will be treated
for federal income tax purposes as the owner of the municipal obligations
acquired subject to such demand features or to such stand-by commitments; the
interest on such municipal obligations will be tax-exempt to Tax-Free Fund; and
the purchase prices of municipal obligations subject to stand-by commitments
must be allocated between such securities and stand-by commitments based upon
their relative fair market values.
A Fund, or a shareholder's broker with respect to a Fund, is required to
withhold federal income tax at a rate of 31% of the dividends, capital gains
distributions and proceeds of redemptions if a shareholder fails to furnish
such Fund with a correct taxpayer identification number ("TIN") or to certify
that the shareholder is exempt from such withholding or if the Internal Revenue
Service notifies such Fund or broker that the shareholder has provided such
Fund with an incorrect TIN or failed to properly report dividend or interest
income for federal income tax purposes. Any such withheld amount will be fully
creditable on each shareholder's individual federal income tax return. An
individual's TIN is his or her social security number.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Funds and their shareholders. No
attempt is made to present a detailed explanation of the federal or state
income tax treatment of the Funds or their shareholders, and this discussion is
not intended as a substitute for careful tax planning.
Each investor is advised to consult his or her tax adviser regarding
specific questions as to federal, state, local and foreign taxation.
PORTFOLIO TRANSACTIONS
As provided in the investment advisory agreement in effect between
Insight and the Funds, Insight makes investment decisions and decisions as to
the execution of portfolio transactions for the Funds, subject to the general
supervision of the Board of Directors of Great Hall. At times, investment
decisions may be made to purchase or sell the same investment security for more
than one Fund, in which case the transactions will be allocated as to amount
and price in a manner considered equitable to each Fund. In some cases this
procedure may possibly have a detrimental effect on the price or volume of the
security as far as one or more Funds are concerned. On the other hand, the
ability of the Funds to participate in volume transactions may produce better
executions for the Funds in some cases. It is the opinion of the Board of
Directors that the benefits available because of Insight's organization
outweigh any disadvantages that may arise from exposure to simultaneous
transactions.
Under the 1940 Act, persons affiliated with Great Hall are prohibited
from dealing with Great Hall as a principal in the purchase and sale of
investments. Since over-the-counter transactions are usually principal
transactions, affiliated persons of Great Hall may not serve as a dealer in
connection with such transfers or commitments. The 1940 Act also prohibits
Great Hall from purchasing a security being publicly underwritten from a
syndicate in which any affiliated person is a principal underwriter except in
accordance with certain limitations. Furthermore, Great Hall may not use any
affiliated person as a broker or dealer in executing portfolio transactions
without complying with the limitations imposed by the rules of the SEC, which
rules require the commissions, fees or other remuneration received by such
affiliated broker or dealer be: (a) reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers or dealers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period of time;
and (b) at least as favorable as commissions contemporaneously charged by such
affiliated broker or dealer on comparable transactions for its most favored
comparable unaffiliated customers.
Most purchase and sale transactions with respect to a Fund are with the
issuer or an underwriter or with major dealers of securities acting as
principals. Such transactions are normally on a net basis and generally do not
involve payment of brokerage commissions. However, the cost of securities
purchased from an underwriter normally includes a commission paid by the issuer
to the underwriter. Purchases or sales from or to dealers will normally
reflect the spread between bid and ask prices.
Insight, in effecting purchases and sales of portfolio securities for the
accounts of the Funds, will place orders in such manner as in its opinion will
offer the best price and market for the execution of each transaction. Given
the best price and market obtainable, it is the practice of the Funds when
purchasing through dealers to select them primarily on the basis of the
furnishing by such dealers, in addition to satisfactory execution of the
transaction, of research information and statistical and other services to
Insight. It is not always possible to place a dollar value on information and
services received from dealers. Since it is only supplementary to Insight's
own research efforts, the receipt of research information is not expected to
reduce significantly Insight's expenses. Such Funds may also consider, subject
to the requirement of best execution, dealers' sales of the Funds' shares when
selecting dealers to execute portfolio transactions. While Insight will be
primarily responsible for the placement of such Funds' business, the policies
and practices of the Funds in this regard must be consistent with the foregoing
and will at all times be subject to review by the Board of Directors of Great
Hall.
Because brokerage commissions as such are not usually paid in connection
with the purchase or sale of the securities in which the Funds invest and
because transactional costs are small, portfolio turnover is not expected to
materially affect net asset value or yields. None of the Funds paid any
brokerage commissions during the year ended July 31, 1997. Securities with
maturities of less than one year are excluded from required portfolio turnover
rate calculations, and therefore, each Fund's turnover rate for reporting
purposes will be zero.
MANAGEMENT AND DISTRIBUTION AGREEMENTS
Investment Adviser; Investment Advisory Agreement
Insight serves as each Fund's investment adviser. Insight is a wholly-
owned subsidiary of Interra Financial Incorporated, which will be renamed Dain
Rauscher Corporation on or about January 2, 1998 ("DRC").
Pursuant to an investment advisory agreement (the "Advisory Agreement"),
Insight performs and bears the internal cost of research, statistical analysis
and continuous supervision of the investment portfolio of each Fund and
furnishes office facilities and certain clerical and administrative services to
the Funds. In addition, Insight bears all promotional expenses, including the
cost of printing and distributing prospectuses utilized for promotional
purposes. Other expenses are borne by whichever Fund incurs the expense and
such expenses include, but are not limited to, taxes, interest, brokerage fees
and commissions, and costs and expenses associated with the following matters
and services: registration and qualification of Great Hall, the Funds and their
shares with the SEC and the various states; services of custodians, transfer
agent, dividend disbursing agent, accounting services agents, shareholder
services agents, independent auditors and outside legal counsel; maintenance of
corporate existence; preparation, printing and distribution of prospectuses to
existing Fund shareholders; services of Great Hall directors who are not
employees of Insight or of the Distributor or any of their affiliates;
directors' and shareholders' meetings, including the printing and mailing of
proxy materials; insurance premiums for fidelity and other coverage; issuance
and sale of Fund shares (to the extent not borne by the Distributor under its
agreement with Great Hall); redemption of Fund shares; printing and mailing of
stock certificates representing shares of the Funds; association membership
dues; preparation, printing and mailing of shareholder reports; and portfolio
pricing services, if any. Expenses borne by Great Hall and attributable to
only one Fund will be allocated to that Fund; expenses that are not
specifically allocable will be allocated to each Fund in a manner and on a
basis determined in good faith by the Board of Directors of Great Hall,
including a majority of the Directors who are not "interested" persons of Great
Hall or Insight, to be fair and equitable.
Under the Advisory Agreement, Insight receives a monthly advisory fee
based upon the average value of each Fund's daily net assets. The Tax-Free
Fund pays Insight a fee at an annual rate of .50% of its average daily net
assets. The Prime Fund and the Government Fund each pay an advisory fee that
is scaled downward as net assets increase. The fee for the Prime Fund is paid
at an annual rate of .55% on average daily net assets up to $700 million, .50%
on average daily net assets of over $700 million up to $1.2 billion, .45% on
average daily net assets of over $1.2 billion up to $2 billion, and .40% on
average daily net assets of over $2 billion. The fee for the Government Fund
is paid at an annual rate of .50% on average daily net assets up to $100
million, .40% on average daily net assets of over $100 million up to $300
million, and .35% on average daily net assets over $300 million. During the
year ended July 31, 1997, Prime Fund, Government Fund and Tax-Free Fund paid
advisory fees of $13,295,885, $796,320 and $2,007,198, respectively. During
the year ended July 31, 1996, Prime Fund, Government Fund and Tax-Free Fund
paid advisory fees of $9,571,808, $636,499 and $1,925,659, respectively.
During the year ended July 31, 1995, Prime Fund, Government Fund and Tax-Free
Fund paid advisory fees of $6,500,666, $414,653 and $1,521,807, respectively.
The Advisory Agreement continues in effect from year to year, if
specifically approved at least annually by a vote cast in person at a meeting
called for such purpose by a majority of the Directors of Great Hall, and a
majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of Great Hall or Insight ("Independent Directors"). The Advisory
Agreement may be terminated by either party thereto, by the Independent
Directors or by a vote of the holders of a majority of the outstanding
securities of Great Hall, at any time, without penalty, upon 60 days' written
notice, and automatically terminates in the event of an assignment.
Termination will not affect the right of Insight to receive payment of any
unpaid balance of the compensation earned prior to termination.
The Distributor
The Funds are distributed by Dain Bosworth Incorporated ("Dain") and
Rauscher Pierce Refsnes, Inc. ("Rauscher"), each a member firm of the New York
Stock Exchange (the "NYSE"), the National Association of Securities Dealers,
Inc. and a wholly owned subsidiary of DRC. On or about January 2, 1998,
Rauscher will be merged into Dain, and the combined firm will be renamed Dain
Rauscher Incorporated ("Dain Rauscher"). Prior to January 2, 1998, Dain and
Rauscher together and, following January 2, 1998, the combined Dain Rauscher,
will be referred to as the "Distributor." The Funds have agreed to indemnify
the Distributor and its affiliates, to the extent permitted by applicable law,
against certain liabilities under the Securities Act of 1933.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is calculated separately for
each Fund. The assets and liabilities of each Fund are determined in
accordance with generally accepted accounting principles and the applicable
rules and regulations of the SEC. Assets and liabilities attributable to a
specific Fund are allocated to that Fund. Assets and liabilities not readily
identifiable to a Fund will be allocated among the Funds in a manner and on a
basis determined in good faith pursuant to procedures established by the Board
of Directors, including a majority of the Directors who are not "interested
persons" of Great Hall or Insight, to be fair and equitable.
The Funds value their portfolio securities using the amortized cost
method. This method involves valuing a security at its cost and thereafter
accruing any discount or premium at a constant rate to maturity. By declaring
these accruals to a Fund's shareholders in the daily dividend, the value of
such Fund's assets and, thus, its net asset value per share, will generally
remain constant. Although this method provides certainty in valuation, it may
result in periods during which the value of a Fund's securities, as determined
by amortized cost, is higher or lower than the price such Fund would receive if
it sold the securities. During such periods, the yields on shares of such Fund
may differ somewhat from that obtained in similar funds with identical
investments utilizing a method of valuation based upon market prices and
estimates of market prices for all of their portfolio securities. For example,
if the use of amortized cost by any Fund resulted in lower aggregate portfolio
value on a particular day, prospective investors in such Fund would be able to
obtain a somewhat higher yield than would result from investments in a similar
fund utilizing solely market values. The converse would apply during a period
of rising interest rates.
In connection with the use of the amortized cost method, the Funds
maintain a dollar-weighted average portfolio maturity of 90 days or less and
purchase only portfolio securities having remaining maturities of 397 days or
less, except for the Government Fund, which voluntarily maintains a dollar-
weighted average portfolio maturity of 60 days or less. With respect to Tax-
Free Fund, and as described under "Great Hall Tax-Free Money Market Fund -
Variable and Floating Rate Demand Municipal Obligations" in this Statement of
Additional Information, securities having a stated maturity of more than 397
days may be purchased by Tax-Free Fund if they have demand and variable or
floating rate features, together with appropriate quality characteristics, that
permit determination that such securities may be deemed to have a maturity of
less than 397 days. The Board of Directors of Great Hall has also established
procedures designed to stabilize, to the extent reasonably possible, each
Fund's net asset value per share, as computed for purposes of sales and
redemptions, at $1.00. Such procedures include review of each Fund's portfolio
holdings by the Board of Directors of Great Hall at such intervals as it may
deem appropriate to determine whether each Fund's net asset value calculated by
using available market quotations deviates from $1.00 per share and, if so,
whether such deviation may result in material dilution or may be otherwise
unfair to existing shareholders. With respect to Tax-Free Fund, these
procedures also include a review by Insight, in accordance with policies
established by the Board of Directors of Great Hall and not less frequently
than monthly, of the quality of certain municipal obligations having variable
or floating interest rates and demand features that permit Tax-Free Fund to
calculate the maturity of such obligations to a point in time prior to their
stated maturity. In the event that the Board of Directors of Great Hall
determines that a material deviation from net asset value exists, the Board
will take such corrective action as it deems necessary and appropriate, which
action might include selling portfolio securities prior to maturity to realize
capital gains or losses or to shorten average portfolio maturity, withholding
dividends, or establishing net asset values per share by using available market
quotations.
The portfolio securities in which each Fund invests fluctuate in value,
and hence the net asset value per share (and therefore, the public offering
price) of each Fund may also fluctuate. On July 31, 1997, the net asset value
and the maximum public offering price per share for the Funds were calculated
as follows:
Prime Fund
Net Assets ($3,129,853,985) = Net Asset Value Per Share ($1.00)
------------------------------------
Shares Outstanding (3,129,853,985)
Government Fund
Net Assets ($182,155,495) = Net Asset Value Per Share ($1.00)
-----------------------------------
Shares Outstanding (182,155,495)
Tax-Free Fund
Net Assets ($422,740,409) = Net Asset Value Per Share ($1.00)
------------------------------------
Shares Outstanding (422,740,409)
CALCULATION OF PERFORMANCE DATA
Yield
As stated in the Prospectus, each Fund from time to time may advertise
its yield.
The current yield of the Funds is computed by determining the change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of a seven-day period,
and dividing the change by the value of the account at the beginning of the
base period to obtain the base period return, and then multiplying the base
period return by (365/7), with the resulting yield figure carried to at least
the nearest hundredth of one percent.
For the seven-day period ended July 31, 1997, the current yields of Prime
Fund, Government Fund and Tax-Free Fund were 5.03%, 4.99% and 3.14%,
respectively.
The effective or compounded yield for the Funds is computed by
determining the change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share at the
beginning of a seven-day period, and dividing the change by the value of the
account at the beginning of the base period to obtain the base period return,
and then compounding the base period return by adding 1, raising the sum to a
power equal to 365 divided by 7, and subtracting 1 from the result, according
to the following formula:
Effective yield = [(Base period return + 1) 365/7] - 1
For the seven-day period ended July 31, 1997, the effective yields of
Prime Fund, Government Fund and Tax-Free Fund were 5.16%, 5.12% and 3.19%,
respectively.
The taxable equivalent yield of Tax-Free Fund is calculated by applying
the stated income tax rate only to that portion of the Tax-Free Fund's seven-
day yield or effective yield that is exempt from taxation. The stated income
tax rate is subtracted from the number 1 (e.g., 1 minus 36% equals 64%), and
the tax-exempt portion of the yield is divided by the difference. The result
is then added to that portion of the Funds yield, if any, that is not tax-
exempt.
Assuming federal marginal tax rates of 28%, 31%, 36% and 39.6%, the
taxable equivalent current yields of Tax-Free Fund for the seven-day period
ended July 31, 1997 were 4.36%, 4.55%, 4.91% and 5.20%, respectively. Assuming
the same federal marginal tax rates, the taxable equivalent effective yields of
Tax-Free Fund for the seven-day period ended July 31, 1997 were 4.43%, 4.62%,
4.98% and 5.28%, respectively.
DIRECTORS AND OFFICERS
Directors and officers of Great Hall, together with information as to
their principal occupations during the past five years, are set forth below.
Except as otherwise set forth below, the address of each officer and director
is the same as that of Great Hall - 60 South Sixth Street, Minneapolis,
Minnesota 55402.
Principal Occupations During the
Name and Address Position Past Five Years and Other Affiliations
- ---------------- -------- --------------------------------------
T. Geron ("Jerry") Bell Director President of the Minnesota Twins
34 Puckett Place Baseball Club Incorporated since 1987.
Minneapolis, MN 55415
Sandra J. Hale Director President of Enterprise Management,
2308 West Lake of the Int'l. since 1991; Minnesota
Isles Pkwy. Commissioner of Administration from
Minneapolis, MN 55405 1982 to 1990.
Ron James* Director President and Chief Executive Officer
150 South Fifth Street, of Ceridian Corporation-Human
Suite 3300 Resources Group since January 1996;
Minneapolis, MN 55402 Vice-President - Minnesota of U.S.
West Communications from 1990 to
December 1995; Vice President and
General Manager-Large Business
Markets of U.S. West Communications
from 1987 to 1990; Director of The
St. Paul Companies since 1993.
Jay H. Wein Director Independent consultant since April
5305 Elm Ridge Circle 1995; Director of Information
Excelsior, MN 55331 Advantage, Inc. since 1992 and
Chairman from 1992 to April 1995;
Retired in August 1989 after 15 years
as Office Managing Partner of the
Minneapolis/St. Paul Office of
Arthur Andersen & Co.
J. Scott Spiker Chief Executive Senior Executive Vice President of
Officer the Distributor; Chief Executive
Officer and Director of Insight;
Senior Vice President and Business
Manager, Employee Benefit Services,
of Norwest Corporation from 1990
through January 1994; Product
Manager, Institutional Collective
Funds, of Norwest Corporation from
1989 through January 1994.
Raye C. Kanzenbach Chief Investment Vice President and Chief Investment
Officer Officer of Insight; prior to 1991,
Director, Senior Vice President and
Secretary of Insight Bond Management,
Inc. since 1983.
Julie K. Getchell Chief Financial President and Chief Operating Officer
Officer of Insight and Senior Vice President
of the Distributor.
Principal Occupations During the
Name and Address Position Past Five Years and Other Affiliations
- ---------------- -------- --------------------------------------
Matthew L. Thompson Secretary Partner of Faegre & Benson LLP, Great
2200 Norwest Center Hall's general counsel, since May
90 South Seventh Street 1995; Vice President, Assistant
Minneapolis, MN 55402 Secretary and Corporate/Fund Counsel
of DRC from January 1994 to May 1995;
prior thereto, Partner of Dorsey &
Whitney since 1993 and Associate of
Dorsey & Whitney from 1985 through
1992.
Thomas D. Vogel Compliance Vice President and Controller of
Officer Insight and the Distributor's Business
Services Group; Assistant Controller
of Insight from 1993 to 1995.
______________________________
* Mr. James may be deemed to be an "interested" Director because he is a
director of The St. Paul Companies, which owns a majority interest in a
registered broker-dealer.
The annual compensation of each Director is $6,000 plus $1,000 for each
meeting attended. No compensation is paid by Great Hall to its officers. The
following table sets forth for such period the aggregate compensation
(excluding expenses) paid by Great Hall to its directors during the fiscal year
ended July 31, 1997:
COMPENSATION TABLE
------------------
Pensions or Retirement
Aggregate Benefits Accrued
Compensation as part of
Name of Director from Great Hall Great Hall Expenses
T. Geron (Jerry) Bell $10,000 None
Sandra J. Hale $10,000* None
Ron James $10,000 None
Jay H. Wein $10,000* None
______________________________
* Director was paid an additional $2,000 from Insight for additional work
during the year relating to the Board's due diligence responsibilities in
connection with the transfer of two prior series of Great Hall.
Additional directors of Insight are as follows:
Name Other Positions
----------------------- -------------------------------------
Irving Weiser Chairman, Chief Executive Officer and
President of the Distributor
John C. Appel Vice Chairman and Chief Financial
Officer of the Distributor
William A. Johnstone Vice Chairman of the Distributor and
President of its Equity Capital
Markets Group
Ronald A. Tschetter Senior Executive Vice President of
the Distributor and President of its
Private Client Group
Nelson D. Civello Senior Executive Vice President of
the Distributor and President of its
Fixed Income Capital Markets Group
GENERAL INFORMATION
Under the terms of the Custodian Agreement, Norwest Bank Minnesota, N.A.
(the "Custodian") holds and safekeeps all of the assets of each Fund. For its
services, the Custodian receives from each Fund a monthly fee based upon the
average market value of such Fund's securities held in custody plus securities
transaction charges; it is also reimbursed for certain out-of-pocket expenses.
Under the terms of an Investment Account Agreement, Investors Fiduciary
Trust Company (the "Fund Accounting Agent") performs necessary investment
accounting and recordkeeping services for the Fund. For its services, the Fund
Accounting Agent is paid a monthly fee and is reimbursed for certain out-of-
pocket expenses.
Under the terms of the Transfer Agency Agreement, Rodney Square
Management Corporation (the "Transfer Agent") maintains the shareholder account
records for each Fund, handles certain communications between shareholders and
each Fund, distributes dividends and distributions payable by each Fund and
produces statements with respect to account activity for each Fund and its
shareholders. For these services, the Transfer Agent receives a flat monthly
fee and is also reimbursed for certain out-of-pocket expenses.
The Distributor also performs certain shareholder account services for
the Funds pursuant to a Shareholder Account Service Agreement. Under the terms
of the Shareholder Account Service Agreement, the Distributor disburses or
credits all proceeds of redemptions, dividends and other distributions to
shareholders, handles certain communications between shareholders and each
Fund, prepares shareholder records, maintains a master account with the
Transfer Agent on behalf of shareholders and performs other related services.
For its services, the Distributor receives a monthly fee computed on the basis
of the number of shareholder accounts that are maintained for each Fund during
the month and also is reimbursed for certain out-of-pocket expenses.
Great Hall maintains accounting records that specifically allocate assets
and liabilities on a series by series basis. The shares of each series
represent an undivided interest in the assets and liabilities specifically
allocated to that series. Creditors and other persons contracting with Great
Hall with respect to a series may look solely to the assets of that series to
satisfy claims against Great Hall.
All Fund shares are the same class and are freely transferable. Each
share has equal dividend rights and is entitled to one vote at all shareholder
meetings. Separate votes are taken by each series of Great Hall except to the
extent that the 1940 Act requires shares of all series to be voted in the
aggregate. Shares have non-cumulative voting rights, so that the holders of
more than 50% of the shares can, if they choose to do so, elect all the
directors of Great Hall, in which event the holders of the remaining shares
will be unable to elect any person as a director. Whenever the approval of a
majority of the outstanding shares of a series of Great Hall is required in
connection with shareholder approval of an investment advisory agreement,
changes in the investment objectives, policies or limitations of that series,
or changes in the distribution expense plan, a "majority" shall mean the vote
of the lesser of: (a) 67% or more of the shares of such series present at a
meeting, if the holders of more than 50% of the outstanding shares of such
series are present in person or by proxy; or (b) more than 50% of the
outstanding shares of such series. To the knowledge of Great Hall, no
shareholder beneficially owned 5% or more of any Fund's shares as of
November 20, 1997.
Great Hall is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend to
hold such meetings. The Board of Directors may convene shareholder meetings
when it deems appropriate. In addition, if a regular meeting of shareholders
has not been held during the immediately preceding fifteen months, a
shareholder or shareholders holding three percent or more of the voting shares
of Great Hall may demand a regular meeting of shareholders by written notice of
demand given to the chief executive officer or the chief financial officer of
Great Hall. Within ninety days after receipt of the demand, a regular meeting
of shareholders must be held at the expense of Great Hall. Irrespective of
whether a regular meeting of shareholders has been held during the immediately
preceding fifteen months, in accordance with Section 16(c) of the 1940 Act, the
Board of Directors of Great Hall shall promptly call a meeting of shareholders
for the purpose of voting upon the question of removal of any director when
requested in writing to do so by the record holders of not less than 10% of the
outstanding shares, and Great Hall will assist in communications with other
shareholders as required by the 1940 Act.
Under Minnesota law, the Board of Directors has overall responsibility
for managing Great Hall in good faith, in a manner reasonably believed to be in
the best interests of Great Hall, and with the care an ordinarily prudent
person in a like position would exercise in similar circumstances.
Under Minnesota law, directors owe Great Hall and its shareholders
certain fiduciary duties, including a duty of "loyalty" (to act in good faith
and in the best interests of Great Hall) and a duty of "care" (to act with the
care that a reasonably prudent person would exercise under similar
circumstances). Minnesota law authorizes corporations to eliminate the
personal monetary liability of directors to the corporation or its shareholders
for breach of the duty of "care." Directors of corporations adopting such a
limitation provision still owe the corporation this duty of "care," but under
most circumstances cannot be sued for monetary damages for breaches of such
duty. The Articles of Incorporation of Great Hall limit the liability of
directors to the fullest extent permitted by law.
The directors of Great Hall remain fully liable (including possibly for
monetary damages) for breaches of their duty of "loyalty," for self-dealing,
for bad faith and intentional misconduct, and for violations of the 1933 Act,
the Securities Act of 1934, and certain provisions of Minnesota corporation
law. Additionally, the 1940 Act prohibits limiting a director's liability for
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
director's duties in the conduct of the director's office, and it is uncertain
whether and to what extent directors remain liable for monetary damages for
violations of the 1940 Act. The SEC staff has taken the position that
investment company directors remain liable for monetary damages under certain
circumstances.
Upon issuance and sale in accordance with the terms of the Fund's
Prospectus and Statement of Additional Information, each share of a Fund will
be fully paid and non-assessable. Shares have no preemptive, subscription or
conversion rights and are redeemable as set forth under "How To Redeem Shares"
in the Prospectus. In the event of the dissolution or liquidation of Great
Hall, the holders of the shares of any Fund are entitled to receive, as a
class, the underlying assets of such Fund available for distribution to
shareholders.
COUNSEL AND AUDITORS
Faegre & Benson LLP, 2200 Norwest Center, 90 South Seventh Street,
Minneapolis, Minnesota 55402, serves as Great Hall's general counsel.
Lindquist & Vennum PLLP, 4200 IDS Center, 80 South Eighth Street, Minneapolis,
Minnesota 55402, serves as counsel to Great Hall's disinterested directors.
KPMG Peat Marwick LLP, 90 South Seventh Street, 4200 Norwest Tower,
Minneapolis, Minnesota 55402, has been selected as the independent auditors of
Great Hall for its fiscal year ending July 31, 1998.
FINANCIAL AND OTHER INFORMATION
The prospectus and this Statement of Additional Information do not
contain all the information included in Great Hall's Registration Statement
filed with the SEC under the 1933 Act and the 1940 Act (the "Registration
Statement") with respect to the securities offered by the Prospectus and this
Statement of Additional Information. Certain portions of the Registration
Statement have been omitted from the Prospectus and this Statement of
Additional Information pursuant to the rules and regulations of the SEC. The
Registration Statement including the exhibits thereto may be examined at the
office of the SEC in Washington, D.C.
Statements contained in the Prospectus or in this Statement of Additional
Information as to any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectus and this Statement of Additional Information
for a part, each such statement being qualified in all respects by such
reference.
APPENDIX
RATINGS OF INVESTMENTS
The following is a description of Standard & Poor's Corporation ("S&P")
and Moody's Investors Service, Inc. ("Moody's") commercial paper, loan, note
and bond ratings. To the extent that ratings accorded by S&P or Moody's may
change as a result of changes in such organizations, the Funds will attempt to
use comparable rating standards for their permissible investments.
Description of Moody's Commercial Paper, Loan and Note Ratings.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Repayment capacity will normally be evidenced by the following characteristics:
* Leading market positions in well established industries.
* High rates of return on funds employed.
* Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
* Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
* Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Loans bearing the designation MIG-1 by Moody's are of the best quality,
enjoying strong protection from established cash flows, superior liquidity
support or demonstrated broad-based access to the market for refinancing.
Loans bearing the designation of MIG-2 are of high quality, with margins
of protection ample although not so large as the preceding group.
Loans bearing the designation of MIG-3 are of favorable quality. All
security elements are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established.
Description of S&P's Commercial Paper and Municipal Note Ratings
The rating A is the highest commercial paper rating assigned by S&P.
Issues in this category have the greatest capacity for timely payment and are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
The designation A-1 indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
The designation A-2 indicates that the capacity for timely payment is
strong. However, the relative degree of safety is not as high as for issues
designated "A-1."
The designation A-3 indicates a satisfactory capacity for timely payment.
However, issues with this designation are somewhat more vulnerable to the
adverse effects of changes in circumstances than issues carrying the higher
designations.
Municipal notes rated SP-1 have a very strong or strong capacity to pay
principal and interest. Those issuers determined to possess overwhelming
safety characteristics will be given a plus (+) designation.
Municipal notes rated SP-2 have a satisfactory capacity to pay principal
and interest.
Municipal notes rated SP-3 have a speculative capacity to pay principal
and interest.
Description of S&P's Bond Ratings
AAA-Bonds rated AAA have the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
AA-Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in a small degree.
A-Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Although they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher-rated categories.
BB, B, CCC, CC, C-Bonds rated BB, B, CCC, CC and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Plus (+) or (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Description of Moody's Bond Ratings
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than with respect
to Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Within each rating classification from Aa through B, Moody's has assigned
the numerical modifiers 1, 2 and 3. The modifier 1 indicates that a security
ranks in the high end of that rating category, 2 in the mid-range of a category
and 3 nearer the low end of a category.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Great Hall Investment Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments in securities, of Prime Money Market
Fund, U.S. Government Money Market Fund and Tax-Free Money Market Fund (funds
within Great Hall Investment Funds, Inc.) as of July 31, 1997 and the related
statements of operations for the year then ended and the statements of changes
in net assets for each of the years in the two-year period ended July 31, 1997
and the financial highlights for each of the years in the five-year period
ended July 31, 1997. These financial statements and the financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and the
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Investment securities held in custody are confirmed
to us by the custodian. As to securities purchased and sold but not received
or delivered, we request confirmations from brokers, and where replies are not
received, we carry out other appropriate auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Prime Money Market Fund, U.S. Government Money Market Fund and Tax-Free Money
Market Fund at July 31, 1997, and the results of their operations for the year
then ended and the changes in their net assets for each of the years in the
two-year period ended July 31, 1997, and the financial highlights for each of
the years in the five-year period ended July 31, 1997, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 3, 1997
STATEMENTS OF ASSETS AND LIABILITIES
July 31, 1997
Prime U.S. Government Tax-Free
Money Money Money
Market Fund Market Fund Market Fund
- -------------------------------------------------------------------------------
Assets:
Investments in securities a
market value (note 2),
(identified cost $3,117,513,689;
$181,234,836 and $420,942,637,
respectively).................... $3,117,513,689 $181,234,836 $420,942,637
Cash in bank on demand deposit..... 194,264 85,919 178,729
Accrued interest receivable........ 13,799,676 1,000,360 2,576,898
Receivable for investment
securities sold.................. -- -- 4,001,534
- -------------------------------------------------------------------------------
Total assets....................... 3,131,507,629 182,321,115 427,699,798
- -------------------------------------------------------------------------------
Liabilities:
Payable for investment
securities purchased............. -- -- 4,676,818
Accrued investment advisory fee.... 1,225,104 72,151 181,746
Other accrued expenses............. 428,540 93,469 100,825
- -------------------------------------------------------------------------------
Total liabilities.................. 1,653,644 165,620 4,959,389
- -------------------------------------------------------------------------------
Net assets applicable to
outstanding capital stock........ $3,129,853,985 $182,155,495 $422,740,409
- -------------------------------------------------------------------------------
Represented by:
Capital stock - authorized
100 billion shares of
$.01 par value for each Fund,
outstanding 3,129,853,985;
182,155,495 and 422,740,409
shares, respectively............. $31,298,540 $1,821,555 $4,227,404
Additional paid-in capital......... 3,098,555,445 180,333,940 418,513,005
- -------------------------------------------------------------------------------
Total - representing
net assets applicable to
outstanding capital stock........ $3,129,853,985 $182,155,495 $422,740,409
- -------------------------------------------------------------------------------
Net asset value per share of
outstanding capital stock........ $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------
See accompanying notes to investments in securities.
STATEMENTS OF OPERATIONS
Year ended July 31, 1997
Prime U.S. Government Tax-Free
Money Money Money
Market Fund Market Fund Market Fund
- -------------------------------------------------------------------------------
Income:
Interest...................... $157,409,157 $9,494,463 $14,482,296
- -------------------------------------------------------------------------------
Expenses (note 4):
Investment advisory fee....... 13,295,885 796,320 2,007,198
Custodian, accounting and
transfer agent fees......... 368,000 51,405 40,500
Sub-accounting transfer
agent fees.................. 3,050,000 74,608 102,557
Reports to shareholders....... 961,286 19,000 35,000
Amortization of
organization costs.......... 8,549 4,578 5,285
Directors' fees............... 11,250 11,250 11,250
Audit and legal fees.......... 32,000 18,000 22,900
Registration fees............. 465,000 61,399 83,824
Administrative................ 15,000 300 9,600
Other expenses................ 31,627 3,197 24,718
- -------------------------------------------------------------------------------
Total expenses.................. 18,238,597 1,040,057 2,342,832
- -------------------------------------------------------------------------------
Investment income - net......... 139,170,560 8,454,406 12,139,464
- -------------------------------------------------------------------------------
Net increase in net assets
resulting from operations..... $139,170,560 $8,454,406 $12,139,464
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
Prime U.S. Government Tax-Free
Money Market Fund Money Market Fund Money Market Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
7/31/97 7/31/96 7/31/97 7/31/96 7/31/97 7/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations:
Investment income,
net..................... $139,170,560 94,637,073 $8,454,406 $6,521,362 $12,139,464 $11,649,531
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting
from operations......... 139,170,560 94,637,073 8,454,406 6,521,362 12,139,464 11,649,531
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Investment income
-- net................ (139,170,560) (94,637,073) (8,454,406) (6,521,362) (12,139,464) (11,649,531)
Net realized gains...... -- -- -- -- -- (378,871)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders............ (139,170,560) (94,637,073) (8,454,406) (6,521,362) (12,139,464) (12,028,402)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions
at net asset value of
$1.00 per share:
Proceeds from
sales................. 1,741,550,277 1,205,825,019 220,284,955 174,595,563 541,367,559 358,435,430
Shares issued for
reinvestment of
distributions......... 139,170,560 94,637,073 8,454,406 6,521,362 12,139,464 12,028,402
Payment for shares
redeemed.............. (1,156,322,769) (493,931,322) (193,269,020) (156,680,720) (489,919,846) (374,204,795)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets from capital
share transactions...... 724,398,068 806,530,770 35,470,341 24,436,205 63,587,177 (3,740,963)
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets............. 724,398,068 806,530,770 35,470,341 24,436,205 63,587,177 (4,119,834)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning
of year................... 2,405,455,917 1,598,925,147 146,685,154 122,248,949 359,153,232 363,273,066
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end
of year................... $3,129,853,985 $2,405,455,917 $182,155,495 $146,685,154 $422,740,409 $359,153,232
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Organization
Great Hall Investment Funds, Inc. (the Company) was incorporated on June
24, 1991 and is registered under the Investment Company Act of 1940 (as
amended) as an open-end management investment company and presently
includes three funds; Prime Money Market Fund, U.S. Government Money Market
Fund and Tax-Free Money Market Fund (the funds). The Company's articles of
incorporation permit the board of directors to create additional funds in
the future.
2. Summary of Significant Accounting Policies
The significant accounting policies followed by the funds are as follows:
Investments in Securities
Pursuant to Rule 2a-7 of the Investment Company Act of 1940 (as amended),
securities are valued at amortized cost, which approximates market value,
in order to maintain a constant net asset value of $1 per share.
Security transactions are accounted for on the date the securities are
purchased or sold. Interest income, including amortization of discount and
premium, is accrued daily.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Federal Taxes
The funds' policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income to shareholders. Therefore, no income tax
provision is required. Each fund is treated as a separate entity for
federal income tax purposes. In addition, on a calendar-year basis, each
fund intends to distribute substantially all of its net investment income
and realized gains, if any, to avoid the payment of any federal excise
taxes.
Distribution to Shareholders
Distribution to shareholders from net investment income are declared daily
and paid monthly through reinvestment in additional shares of the funds at
net asset value or payable in cash.
Organization Costs
Organization expenses were incurred in connection with the start-up and
initial registration of the funds. These costs were amortized over 60
months on a straight-line basis through October, 1996.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Repurchase Agreements
Securities pledged as collateral for repurchase agreements are held by the
funds' custodian bank until maturity of the repurchase agreement.
Procedures for all agreements ensure that the daily market value of the
collateral is in excess of the repurchase agreement in the event of
default.
3. Investment Security Transactions
Cost of purchases and proceeds from sales of securities from August 1, 1996
to July 31, 1997 were as follows:
Purchases Sales Proceeds
---------------------------------------------------------------------------
Prime Money Market Fund............... $16,025,147,495 $15,317,765,837
U.S. Government Money Market Fund..... 6,445,049,770 6,410,160,000
Tax-Free Money Market Fund............ 1,272,222,323 1,213,185,818
4. Fees and Expenses
The Company has entered into an investment advisory and management
agreement with Interra Advisory Services, Inc. (IAS), formerly IFG Asset
Management Services, Inc., under which IAS manages each fund's assets and
furnishes related office facilities, equipment, research and personnel.
The agreement requires each fund to pay IAS a monthly fee based upon
average daily net assets. The fee for the Prime Money Market Fund is equal
to an annual rate of 0.55% of the first $700 million in net assets and then
decreasing in reduced percentages to 0.40% of net assets in excess of $2
billion. The fee for the U.S. Government Money Market Fund is equal to an
annual rate of 0.50% of the first $100 million in net assets and then
decreasing in reduced percentages to 0.35% of net assets in excess of $300
million. The fee for the Tax-Free Money Market Fund is equal to an annual
rate of 0.50% of net assets.
Each of the three funds has also entered into sub-accounting agreements
with affiliates Dain Bosworth Incorporated (DBI) and Rauscher Pierce
Refsnes, Inc. (RPR) where each firm performs various transfer and dividend
disbursing agent services. The fee, which is paid monthly to DBI and RPR
for providing such service, is equal to an annual rate of $12 per
shareholder account plus certain out-of-pocket expenses.
In addition to the investment advisory and management fee and the
shareholder account servicing fee, each fund is responsible for paying most
other operating expenses including outside directors' fees and expenses,
custodian fees, registration fees, printing and shareholder reports,
transfer agent fees and expenses, legal, auditing and accounting services,
organizational costs, insurance, interest and other miscellaneous expenses.
Legal fees and expenses of $35,839 for the year ended July 31, 1997 were
paid to a law firm of which the secretary of the funds is a partner.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Financial Highlights
Per share data for a share of capital stock outstanding throughout each
period and selected information for the period are as follows:
<TABLE>
<CAPTION>
Prime Money Market Fund
- --------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
7/31/97 7/31/96 7/31/95 7/31/94 7/31/93
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period............... $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Income from
investment operations............. 0.05 0.05 0.05 0.03 0.03
Distributions to shareholders
from investment income............ (0.05) (0.05) (0.05) (0.03) (0.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period...... $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Total return........................ 4.9% 5.0% 4.9% 2.8% 2.7%
Net assets at end
of period (000s omitted).......... $3,129,854 $2,405,456 $1,598,925 $1,029,775 $861,670
Ratio of expenses to
average daily net assets*......... 0.64% 0.70% 0.77% 0.80% 0.78%
Ratio of net investment
income to average
daily net assets*................... 4.90% 4.93% 4.93% 2.81% 2.68%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Various fund fees and expenses were voluntarily waived or absorbed by IAS
for the Prime Money Market Fund during the periods prior to 1995. Had the
Fund paid all expenses, the ratio of expenses and net investment income
to average daily net assets would have been 0.81%/2.80% for the year
ended July 31, 1994 and 0.82%/2.64% for the year ended July 31, 1993.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Financial Highlights (continued)
<TABLE>
<CAPTION>
U.S. Government Money Market Fund
- -------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
7/31/97 7/31/96 7/31/95 7/31/94 7/31/93
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.. $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Income from
investment operations............. 0.05 0.05 0.05 0.03 0.03
Distributions to shareholders
from investment income............ (0.05) (0.05) (0.05) (0.03) (0.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period...... $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Total return........................ 4.8% 4.9% 4.8% 2.7% 2.6%
Net assets at end
of period (000s omitted).......... $182,155 $146,685 $122,249 $56,815 $66,558
Ratio of expenses to
average daily net assets.......... 0.60% 0.65% 0.73% 0.78% 0.79%
Ratio of net investment
income to average
daily net assets.................. 4.85% 4.87% 4.94% 2.73% 2.57%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Financial Highlights (continued)
<TABLE>
<CAPTION>
Tax-Free Money Market Fund
- --------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
7/31/97 7/31/96 7/31/95 7/31/94 7/31/93
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period............... $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Income from
investment operations............. 0.03 0.03 0.03 0.02 0.02
Distributions to shareholders
from investment income............ (0.03) (0.03) (0.03) (0.02) (0.02)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period...... $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Total return........................ 3.0% 3.0% 3.1% 2.0% 2.1%
Net assets at end
of period (000s omitted).......... $422,740 $359,153 $363,273 $275,278 $209,469
Ratio of expenses to
average daily net assets.......... 0.58% 0.59% 0.60% 0.65% 0.67%
Ratio of net investment
income to average
daily net assets.................. 3.02% 3.03% 3.14% 1.98% 2.09%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
PRIME MONEY MARKET FUND
Investments in Securities
July 31, 1997
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (96.03%):
- -------------------------------------------------------------------------------
Agricultural Products (1.93%)
Cargill Inc., 5.49%-5.52%, 9/16/97-10/10/97 $35,000,000 $34,644,483
Cargill Financial Services, Inc.,
5.38%-5.49%, 9/2/97-9/15/97 25,970,000 (d) 25,812,584
------------
60,457,067
------------
Banks - Domestic (19.45%)
Allegheny University Hospital,
5.52%, 9/17/97, LOC PNC Bank 24,215,000 24,040,491
Bank of America, 5.59%, 10/10/97 30,000,000 30,000,000
Bank of New York, 5.80%, 3/3/98 15,000,000 14,995,791
Bankers Trust Company,
5.32%-5.81%, 9/9/97-1/8/98 32,300,000 (d) 32,253,522
Bankers Trust New York Corporation,
5.53%, 10/14/97 10,000,000 9,886,328
Bank One Columbus N.A.,
5.53%-5.68%, 9/24/97-5/18/98 45,000,000 (e) 44,990,881
Comerica Bank of Detroit,
6.00%-6.13%, 9/15/97-6/24/98 30,000,000 30,065,381
Fifth Third Bank, Cincinnati, 5.58%, 8/28/97 25,000,000 25,000,000
First Bank, Minneapolis, N.A.,
5.49%-5.58%, 8/4/97-6/1/98 55,000,000 (e) 54,993,923
First National Bank of Chicago, 5.65%, 10/1/97 15,000,000 15,000,479
Formosa Plastics USA,
5.63%, 8/12/97, LOC Bank of America 15,000,000 14,974,196
Key Bank N.A., Cleveland, 5.89%, 3/11/98 20,000,000 19,995,233
Morgan Guaranty Trust Company,
5.38%-5.78%, 9/30/97-11/14/97 27,000,000 (e) 26,995,646
Nations Bank, 5.30%-5.58, 8/8/97-8/20/97 30,000,000 29,989,694
Norwest Corporation,
5.53%-6.11%, 8/19/97-11/15/97 48,560,000 48,485,151
PNC Bank, N.A., 5.34%-5.39, 11/25/97-1/9/98 25,000,000 (e) 24,994,685
Regions Bank, 5.53%-5.60%, 8/11/97-10/20/97 75,000,000 74,992,306
Suntrust Bank, 5.55%, 8/1/97 15,000,000 15,000,000
Wachovia Bank, North Carolina,
5.53%-5.55%, 8/12/97-8/29/97 62,500,000 62,314,006
Wachovia Bank of Georgia, N.A., 5.71%, 10/6/97 10,000,000 9,895,317
------------
608,863,030
------------
Banks - Other (17.68%)
ABN - AMRO, 5.54%-6.05%, 8/19/97-6/11/98 40,000,000 39,939,710
Accor S.A., 5.50%-5.55%, 10/8/97-10/23/97,
LOC Banque Nationale De Paris 47,000,000 46,460,285
Banca Serfin SA, 5.33%-5.63%,
8/5/97-10/20/97, LOC Barclays Bank 17,400,000 17,272,890
Bank of Nova Scotia, 5.61%-5.68%, 9/2/97-9/17/97 50,000,000 50,000,322
Barclay Bank, 5.48%, 9/2/97 10,000,000 9,951,289
Canadian Imperial Bank of Commerce,
5.57%-5.78%, 9/2/97-2/27/98 20,000,000 19,999,296
Cemex S.A., 5.67%,8/12/97, LOC Credit Suisse 10,500,000 10,481,809
See accompanying notes to investments in securities.
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- -------------------------------------------------------------------------------
Banks - Other (continued)
Commed Fuel Company, Inc.,
5.52%, 9/17/97, LOC Credit Suisse $14,798,000 $14,691,356
Deutsche Bank, 5.72%, 10/28/97 2,000,000 1,999,322
Formosa Plastics Corporation USA,
5.60%-5.63%, 8/20/97-9/22/97,
LOC ABN - AMRO Bank 20,000,000 19,889,397
Hahn Issuing Corporation, 5.52%, 9/16/97,
LOC Canadian Imperial Bank of Commerce 25,000,000 24,823,667
JMG Funding Inc.,
5.52%, 8/29/97, LOC Societe Generale 15,000,000 14,935,600
National Westminister Bank,
5.63%-5.85%, 9/9/97-10/3/97 30,000,000 30,001,351
Petroleo Brasiliero, 5.52%-5.57%,
8/13/97-10/24/97, LOC Barclays Bank 40,000,000 39,769,217
Rabobank Nederland NY,
5.54%-6.00%, 10/1/97-3/20/98 34,700,000 34,697,687
Royal Bank of Canada,
5.53%-6.24%, 8/6/97-4/6/98 40,700,000 40,692,778
Sinochem American, Inc.,
5.35%-5.66%, 8/4/97-5/2/97, LOC Credit Suisse 27,000,000 26,981,625
Societe Generale, 5.58%-5.78%, 8/11/97-10/6/97 35,000,000 35,002,788
Sunkyung America Inc.,
5.50%, 10/22/97, LOC Credit Suisse 13,000,000 12,837,139
Toronto Dominion Holdings, Inc.,
5.48%-5.54%, 9/2/97-9/9/97 50,290,000 50,022,105
UBS Finance Incorporated, 5.50%, 8/8/97 12,955,000 12,941,145
------------
553,390,778
------------
Business Machines (1.02%)
Pitney Bowes Credit Inc., 5.56%, 8/27/97 12,000,000 11,951,467
Xerox Corporation, 5.53%, 8/22/97 20,000,000 19,935,483
------------
31,886,950
------------
Chemicals (1.05%)
Dupont (E.I.) deNemours & Co., 6.04%, 11/20/97 10,200,000 10,211,224
Henkel Corporation,
5.50%-5.51%, 10/2/97-10/16/97 23,000,000 (d) 22,769,179
------------
32,980,403
------------
Conglomerates (1.04%)
Grand Metropolitan Capital Corp.,
5.51%, 10/15/97 20,000,000 19,770,416
Pacific Dunlop Holdings, Inc.,
5.52%-5.63%, 8/22/97-8/29/97 12,921,000 (d) 12,876,531
------------
32,646,947
------------
Electronics (0.48%)
Vermont American Corporation, 5.48%, 9/4/97 15,000,000 (d) 14,922,367
------------
See accompanying notes to investments in securities.
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- -------------------------------------------------------------------------------
Financial - Auto (1.32%)
Ford Motor Credit Corporation,
5.48%-6.25%, 8/11/97-3/25/98 $28,600,000 $28,530,325
Toyota Motor Credit Corporation, 5.49%, 9/16/97 12,970,000 12,879,016
------------
41,409,341
------------
Financial - Diversified Business (13.34%)
American General Finance Corporation,
5.85%, 11/15/97 1,100,000 1,105,648
Associates Corporation of North America,
5.48%-5.55%, 9/5/97-9/11/97 46,900,000 46,628,424
Avco Financial Services,
5.46%-6.33%, 9/9/97-5/1/98 19,650,000 (e) 19,568,799
Beneficial Corporation,
5.50%-5.64%, 8/21/97-11/17/97 56,345,000 56,056,352
CIT Group Holdings, 5.50%-6.17%, 8/18/97-4/1/98 53,095,000 (e) 52,941,487
Commercial Credit Corporation, 5.54%, 8/21/97 30,750,000 30,655,326
General Electric Capital Corporation,
5.48%-5.56%, 8/11/97-9/23/97 47,000,000 46,808,727
Household Finance Company,
5.54%-6.00%, 8/4/97-7/6/98 37,500,000 (e) 37,543,893
Merrill Lynch & Co.,
5.35%-5.79%, 9/8/97-5/6/98 60,000,000 (e) 59,922,771
Morgan (J.P.) and Company,
5.48%, 8/25/97 15,000,000 14,945,200
Morgan Stanley & Company,
5.51%-5.66%, 9/11/97-5/15/98 46,000,000 (e) 45,713,442
Transamerica Finance Corporation, 5.77%, 8/15/97 5,550,000 5,551,975
------------
417,442,044
------------
Financial - Diversified Business, Asset-Backed (19.89%)
Asset Securitization Coop. Corporation,
5.55%-5.57%, 8/7/97-8/27/97 63,850,000 (d) 63,686,246
Barton Capital Corporation,
5.51%-5.56%, 8/8/97-9/19/97 70,000,000 (d) 69,731,443
Delaware Funding Corporation, 5.52%, 8/27/97 25,000,000 (d) 24,900,333
Falcon Asset Securitization,
5.51%-5.56%, 8/20/97-8/28/97 55,540,000 (d) 55,363,316
Fleet Funding Corporation,
5.52%-5.53%, 8/25/97-9/10/97 40,591,000 (d) 40,421,040
Monte Rosa Capital Corporation,
5.52%-5.54%, 8/15/97-9/3/97 72,000,000 (d) 71,757,949
Preferred Receivables Funding Corporation,
5.52%-5.57%, 8/13/97-8/26/97 65,025,000 (d) 64,865,443
Receivables Capital Corporation,
5.51%-5.52%, 9/4/97-9/8/97 35,112,000 (d) 34,916,756
Redwood Receivables Corporation,
5.51%-5.60%, 8/1/97-9/12/97 56,350,000 (d) 56,200,611
Triple A One Funding,
5.53%-5.62%, 8/15/97-9/10/97 66,315,000 (d) 66,048,151
Windmill Funding Corporation,
5.53%-5.58%, 8/1/97-9/18/97 74,979,000 (d) 74,699,465
------------
622,590,753
------------
See accompanying notes to investments in securities.
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- -------------------------------------------------------------------------------
Food & Beverage (1.96%)
CPC International, 5.52%-5.55%, 9/22/97-10/7/97 $37,400,000 (d) $37,055,043
HJ Heinz Company, 5.86%, 9/15/97 500,000 499,781
PepsiCo Incorporated, 5.48%, 9/15/97 23,990,000 23,825,669
------------
61,380,493
------------
Household Products (4.04%)
Clorox Company, 5.47%-5.57%, 8/4/97-9/23/97 69,000,000 68,703,442
Colgate-Palmolive Company, 6.15%, 2/16/98 3,300,000 3,308,418
Sherwin-Williams Co.,
5.47%-5.56%, 8/14/97-10/14/97 54,730,000 (d) 54,303,584
------------
126,315,444
------------
Municipals (3.99%)
Allegheny County, PA Sanitary Authority
Sewer Revenue Bonds Series A,
6.20%, 6/1/98, MBIA Insured 2,000,000 2,011,907
Arapahoe County, CO Series 1996A
5.75%-6.00%, 11/1/97,
LOC Banque Nationale De Paris 6,430,000 6,430,000
Bedford County Virginia Industrial Development
Authority Series 1995B, 5.83%, 9/4/97,
LOC Canadian Imperial Bank of Commerce 15,000,000 15,000,000
Series 1995C, 5.83%, 9/4/97,
LOC Societe Generale 8,000,000 8,000,000
City of Palmdale,
CA Community Redevelopment, 5.82%, 11/15/97 10,000,000 10,025,610
MetroCrest Hospital Authority,
5.45%, 8/1/97, LOC Bank of New York 15,300,000 15,300,000
New York City, New York G.O.
5.70%-5.75%, 8/5/97-9/3/97, FGIC Insured 37,485,000 37,485,000
Siouxland Regional Cancer Center,
5.74%, 12/1/14, MBIA Insured 4,375,000 (b) 4,375,000
Virginia Housing Development
Authority Commonwealth Mortgage
Bonds Series A, 5.86%, 12/11/97 10,000,000 9,997,812
West Baton Rouge Ind. Dev.
(Dow Chemical Co. Project),
5.70%, 8/11/97, Guaranty: Dow Chemical 16,300,000 16,300,000
------------
124,925,329
------------
Oil Services (0.13%)
Texaco Capital Corporation,
5.82%-6.11%, 11/15/97 3,925,000 3,958,122
------------
Printing & Publishing (1.52%)
Gannett Company, 5.50%, 8/25/97 18,335,000 (d) 18,267,771
McGraw-Hill, Incorporated,
5.50%-5.56%, 9/22/97-11/24/97 29,500,000 29,167,981
------------
47,435,752
------------
See accompanying notes to investments in securities.
PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- -------------------------------------------------------------------------------
Retail Stores (2.57%)
Dillard Department Stores, 5.80%, 9/15/97 $3,000,000 $3,013,533
Nordstrom Credit Corporation, 5.49%, 8/25/97 11,000,000 10,959,740
J.C. Penney Funding Inc.,
5.50%-5.54%, 8/29/97-10/1/97 49,500,000 (d) 49,080,409
Toys "R" Us, 5.48%, 9/5/97 17,553,000 17,459,481
------------
80,513,163
------------
Utilities - Electric (4.14%)
Carolina Power & Light,
5.50%-5.55%, 8/7/97-9/22/97 35,700,000 35,566,236
Duke Energy Company, 5.64%, 8/12/97 2,060,000 2,059,988
Pacific Gas and Electric,
5.52%-5.55%, 8/26/97-9/22/97 55,000,000 54,646,254
Southern California Edison,
5.57%, 10/6/97-10/8/97 37,770,000 37,378,807
------------
129,651,285
------------
Utilities - Telephone (0.48%)
SBC Communications Capital Corp., 5.51%, 9/5/97 15,000,000 14,919,646
- -------------------------------------------------------------------------------
Total Commercial Paper & Other
Corporate Obligations (cost: $3,005,688,914) $3,005,688,914
- -------------------------------------------------------------------------------
Government & Agencies Securities (3.57%):
- -------------------------------------------------------------------------------
Federal Farm Credit Bank,
5.51%-5.58%, 8/1/97-10/1/97 35,000,000 (e) 35,000,000
Federal Home Loan Bank, 5.54%, 12/16/97 10,000,000 (e) 9,999,084
Federal National Mortgage Association,
5.52%-5.71%, 8/1/97-11/10/97 37,000,000 (e) 37,038,842
Federal National Mortgage Corp., 5.40%, 12/3/97 10,000,000 (e) 9,997,682
Private Export Funding Corp., 5.50%, 10/9/97 20,000,000 19,789,167
- -------------------------------------------------------------------------------
Total Government & Agencies Securities (cost: $111,824,775) $111,824,775
- -------------------------------------------------------------------------------
Total Investment in Securities (cost: $3,117,513,689) (c) $3,117,513,689
- -------------------------------------------------------------------------------
See accompanying notes to investments in securities.
PRIME MONEY MARKET FUND
Investments in Securities (continued)
- -------------------------------------------------------------------------------
Notes to Investments in Securities:
- -------------------------------------------------------------------------------
(a) Securities are valued in accordance with procedures described in note 2 to
the financial statements.
(b) All or a portion consists of securities with interest rates that vary to
reflect current market conditions; rate shown is the effective rate on
July 31, 1997. The maturity date shown represents final maturity.
However, for purposes of Rule 2a-7, maturity is the next interest rate
reset date at which time the security can be put back to the issuer.
(c) Also represents cost for federal income tax purposes.
(d) All or a portion consists of commercial paper sold within terms of a
private placement memorandum, exempt from registration under section 4(2)
of the Securities Act of 1933, as amended, and may be sold only to dealers
in that program or other "accredited investors." These securities have
been determined to be liquid under guidelines established by the Board of
Directors.
(e) All or a portion consists of short-term securities with interest rates
that reset at set intervals at rates that are based on specific market
indices. Rate shown is the effective rate on July 31, 1997.
U.S. GOVERNMENT MONEY MARKET FUND
Investments in Securities
July 31, 1997
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
Government & Agencies Securities (99.49%):
- -------------------------------------------------------------------------------
Federal National Mortgage Association Notes (34.08%)
5.36%-5.90%, 8/1/97-2/10/98 $62,265,000 (c) $62,081,424
Federal Home Loan Mortgage Corporation Notes (29.93%)
5.35%-6.04%, 8/1/97-3/20/98 54,695,000 (c) 54,520,835
Federal Home Loan Bank Notes (22.55%)
5.35%-5.82%, 8/8/97-3/13/98 41,170,000 (c) 41,078,592
Federal Farm Credit Bank Notes (7.13%)
5.43%-5.71%, 8/1/97-4/14/98 13,000,000 (c) 12,996,446
Student Loan Marketing Association Notes (3.46%)
5.44%-5.61%, 10/30/97-2/5/98 6,300,000 6,299,132
Tennessee Valley Authority (2.34%)
5.43%, 8/19/97 4,270,000 4,258,407
- -------------------------------------------------------------------------------
Total Investment in Securities (cost: $181,234,836) (b) $181,234,836
- -------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2 to
the financial statements.
(b) Also represents cost for federal income tax purposes.
(c) All or a portion of the balance consists of securities with interest rates
that reset at set intervals at rates that are based on specific market
indices. Rate shown is the effective rate on July 31, 1997.
TAX-FREE MONEY MARKET FUND
Investments in Securities
July 31, 1997
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
Arkansas (0.24%)
Development Finance Authority Correction Facility Revenue,
3.65%, 10/1/97, MBIA Insured $1,000,000 $1,000,000
------------
California (2.64%)
Los Angeles Regional Airports
Improvement Corp. Lease Revenue
3.70%, 12/1/24, LOC Wachovia Bank of Georgia 700,000 (b) 700,000
3.70%, 12/1/25, LOC Societe Generale 2,400,000 (b) 2,400,000
School Cash Reserve Prog. Auth.,
3.85%, 7/2/98, AMBAC Insured 8,000,000 8,063,586
------------
11,163,586
------------
Colorado (2.75%)
Adams County Family Housing Revenue
(Hunters Cove Project)
Series 1985, 3.80%, 1/15/14, LOC GECC 7,500,000 (b) 7,500,000
Arapahoe County School District #005,
(Cherry Creek), 4.00%, 12/15/97 1,000,000 985,476
Arapahoe County
(Dove Valley Metropolitan District) Series 1996B,
4.00%, 11/1/25, LOC Banque National De Paris 820,000 (b) 820,000
Denver City & County, 3.85%, 10/1/97 1,000,000 1,001,866
Greenwood Metro District G.O.,
3.50%, 12/1/97, MBIA Insured 1,310,000 1,314,262
------------
11,621,604
------------
Florida (4.35%)
Dade County Revenue Capital Appreciation Bonds,
3.82%, 2/1/98 1,125,000 1,103,871
Housing Finance Authority MFHR Bonds,
(Oaks-Orange Park), 3.70%, 7/1/07,
LOC Chase Manhattan Bank 2,580,000 (b) 2,580,000
3.25%, 11/1/07, LOC Chase Manhattan Bank 3,000,000 (b) 3,000,000
Jacksonville Electric Authority, 3.75%, 9/3/97 3,600,000 3,600,000
Manatee County School District,
3.70%, 8/1/97, AMBAC Insured 3,000,000 3,000,000
West Orange Memorial Hospital,
3.60%, 9/10/97, LOC Rabobank Nederland 5,100,000 5,100,000
------------
18,383,871
------------
Georgia (1.21%)
Clayton County MFHR Series 1990
(King's Arena Apartment),
3.60%, 1/1/21, FSA Insured 2,215,000 (b) 2,215,000
Hapeville Development Authority,
3.75%, 11/1/15, LOC Deutsche Bank 1,900,000 (b) 1,900,000
State of Georgia G.O., 3.80%, 8/1/97 1,000,000 1,000,000
------------
5,115,000
------------
See accompanying notes to investments in securities.
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
Hawaii (1.25%)
County of Honolulu, 3.70%, 8/8/97 $2,300,000 $2,300,000
Honolulu City & County, 3.80%, 8/11/97 3,000,000 3,000,000
------------
5,300,000
------------
Illinois (16.72%)
Chicago O'Hare International Airport,
3.65%, 1/1/15, LOC Societe Generale 3,400,000 (b) 3,400,000
City of Springfield Community Improvement Revenue Bonds
Series 1985, (Realing Restoration Project),
3.85%, 12/1/15 3,300,000 (b) 3,300,000
City of Springfield MFHR
(OT Center Limited Project), 3.85%, 12/1/15 7,700,000 (b) 7,700,000
Development Finance Authority Revenue,
3.65%, 8/13/97 13,700,000 13,700,000
Development Finance Authority
(A.E. Stanley Manufacturing), 3.60%, 12/1/05,
LOC Union Bank of Switzerland 1,600,000 (b) 1,600,000
Education Facilities Authority
(Cultural Pool Program), 3.60%, 12/1/25,
LOC First National Bank of Chicago 950,000 (b) 950,000
Health Facilities Authority,
3.60%, 9/9/97, MBIA Insured 3,350,000 3,350,000
Health Facilities Authority Demand Revenue Bonds
Palos Community Hospital,
3.60%, 12/1/15, LOC ABN AMRO 600,000 (b) 600,000
Series 1985B, 3.60%, 11/1/15,
LOC First National Bank of Chicago 10,900,000 (b) 10,900,000
University of Chicago Clinics,
3.55%, 8/1/01-8/1/05, MBIA Insured 3,655,000 (b) 3,728,101
Joliet Regional Port District IDR Bonds,
3.80%, 7/15/03, Guaranty: Dow Chemical 12,840,000 (b) 12,840,000
Lake County Community School District #60,
3.65%, 12/1/97, FSA Insured 1,000,000 1,009,909
Peoria G.O. Series A,
3.60%, 12/15/97, FGIC Insured 1,290,000 1,294,215
State of Illinois G.O., 3.90%, 11/1/97 1,750,000 1,774,013
State Sales Tax Revenue, 3.80%, 6/15/98 1,175,000 1,235,793
State Toll Highway Authority Revenue Bonds
Series 1993B, 3.60%, 1/1/10, MBIA Insured 3,300,000 (b) 3,300,000
------------
70,682,031
------------
Indiana (6.22%)
Health Facilities Financing Authority
Hospital Revenue Bonds Series 1990,
3.65%, 11/1/20, LOC NBD Bank 2,000,000 (b) 2,000,000
Capital Access Designated Pool Program,
3.65%, 12/1/02-1/1/12, LOC Comerica Bank 13,100,000 (b) 13,100,000
St. Anthony Med. Ctr., 3.60%,
12/1/14-12/1/17, LOC Rabobank Nederland 11,200,000 (b) 11,200,000
----------
26,300,000
----------
See accompanying notes to investments in securities.
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
Iowa (2.95%)
Higher Education Loan Authority
Revenue Private College Facilities
3.95%, 8/1/97, MBIA Insured $1,015,000 $1,015,000
Mount Vernon Private College Project (Cornell)
Series 1985, 3.95%, 10/1/15,
LOC First Bank Minneapolis, N.A. 3,200,000 (b) 3,200,000
Polk County Hospital Revenue Bonds,
3.60%, 12/1/05, MBIA Insured 5,240,000 (b) 5,240,000
State School Corporation
(Iowa Cash Anticipation Program),
3.80%, 6/26/98, FSA Insured 3,000,000 3,018,226
------------
12,473,226
------------
Kansas (3.90%)
City of Burlington PCR,
3.75%, 8/11/97, LOC Toronto Dominion Bank 10,500,000 10,500,000
Kansas City IDR,
3.80%, 8/1/15, LOC Credit Suisse 3,800,000 (b) 3,800,000
State Development Finance Authority Health Facilities
Revenue, (St. Luke's Shawnee Mission)
3.60%, 11/15/97, MBIA Insured 2,190,000 2,198,642
------------
16,498,642
------------
Louisiana (1.81%)
New Orleans Sewer Service Revenue,
3.94%, 6/1/98, FGIC Insured 800,000 806,709
Parish of West Baton Rouge,
3.85%, 8/7/97, Guaranty: Dow Chemical 5,050,000 5,050,000
State Public Facilities Authority
(Kenner Hotel LLP Project),
3.75%, 12/1/15, LOC Deutsche Bank 1,800,000 (b) 1,800,000
------------
7,656,709
------------
Maryland (6.26%)
Anne Arundel County, 3.70%,
9/11/97, LOC Baltimore Gas & Electric 9,300,000 9,300,000
Baltimore Industrial Development Revenue,
3.70%, 12/1/97 1,000,000 1,029,170
Montgomery Cnty. Housing Opportunity,
3.70%, 11/1/07, LOC GECC 12,000,000 (b) 12,000,000
Montgomery Cnty. Public Improvement Series A-1,
3.90%, 7/1/07, FSA Insured 2,100,000 (b) 2,100,000
State of Maryland G.O., 3.50%, 10/15/97 2,010,000 2,022,318
------------
26,451,488
------------
Massachusetts (0.24%)
Boston Hospital Revenues, Escrowed in Governments,
3.47%, 8/15/97, FHA Insured 1,000,000 1,001,237
------------
See accompanying notes to investments in securities.
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
Michigan (0.85%)
Delta County Economic Development Corp.,
3.75%, 12/1/23, LOC Bank of Nova Scotia $400,000 (b) $400,000
Underground Storage Tank Financial Assurance Authority,
3.75%, 10/1/97,
LOC Canadian Imperial Bank of Commerce 3,200,000 3,200,000
------------
3,600,000
------------
Minnesota (1.51%)
Duluth Independent School Series A,
(School District Credit Enhancement Program),
3.90%, 9/30/97 1,000,000 1,000,158
St. Paul Housing and Redevelopment Authority
(Science Museum of MN Project) 3.75%, 5/1/27,
LOC First Bank Minneapolis N.A. 1,250,000 (b) 1,250,000
State Housing Finance Agency SFMR Series 1986A,
3.70%, 8/1/97 850,000 850,000
State Tax & Aid Anticipation Borrowing
(School Districts), 3.80%, 8/13/98 1,000,000 (e) 1,000,000
State Tax Certs. of Indebtedness Series A,
(School District Credit Enhancement Program),
3.95%, 8/19/97 2,300,000 2,300,600
------------
6,400,758
------------
Missouri (0.90%)
State Environmental Improvement
& Energy Resource Authority PCR
3.95%, 6/1/98, LOC Union Bank of Switzerland 2,000,000 2,001,600
(Monsanto Corporation), 3.65%, 2/1/09 1,800,000 (b) 1,800,000
------------
3,801,600
------------
Montana (2.15%)
State Health Facilities Authority Revenue Bonds
Series A, 3.60%, 12/1/15, FGIC Insured 9,105,000 (b) 9,105,000
------------
Nebraska (2.65%)
Investment Finance Auth. Hospital Rev. Bonds,
3.62%, 12/1/15, FGIC Insured 4,100,000 (b) 4,100,000
Lincoln Electric System Revenue Corp.
Series 1995, 3.70%, 8/8/97 5,100,000 5,100,000
Omaha Public Power District Electric Revenue,
3.68%, 2/1/98 2,000,000 2,016,806
------------
11,216,806
------------
Nevada (3.01%)
Clark County Airport System Refunding Revenue Notes
Series 1993A, 3.60%, 7/1/12, MBIA Insured 9,540,000 (b) 9,540,000
3.60%, 7/1/25, LOC Toronto Dominion Bank 3,200,000 (b) 3,200,000
------------
12,740,000
------------
See accompanying notes to investments in securities.
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
New Jersey (1.43%)
Camden County Municipal Utilities Auth.
Sewer Revenue, 3.88%, 12/1/97, FGIC Insured $3,450,000 $3,567,100
Economic Development Authority Revenue Bonds
(Volvo American Corp.),
4.05%, 12/1/04, LOC Credit Suisse 1,200,000 (b) 1,200,000
Series C (Performing Arts Ctr. Project),
3.93%, 6/15/98, AMBAC Insured 1,250,000 1,292,875
------------
6,059,975
------------
New Mexico (0.26%)
City of Albuquerque Revenue Bonds,
3.60%, 7/1/14, AMBAC Insured 1,100,000 (b) 1,100,000
------------
New York (4.28%)
New York City G.O.
3.75%, 8/1/18, LOC Morgan Guaranty 4,000,000 (b) 4,000,000
3.60%, 8/15/04, MBIA Insured 1,600,000 (b) 1,600,000
NYC Water Finance Authority,
3.75%, 6/15/22-6/15/23, FGIC Insured 7,965,000 (b) 7,965,000
Local Government Assist. Corp.,
3.65%, 4/1/25, LOC Nat'l Westminster Bank 1,100,000 (b) 1,100,000
Medical Care Facilities Finance Agency,
3.83%, 8/15/97, MBIA Insured 1,025,000 1,025,323
St. Lawrence County IDA (Reynolds Metals Company),
3.75%, 12/1/07, LOC Bank of Nova Scotia 1,250,000 (b) 1,250,000
State Tollway Authority Hwy./Bridge Fund,
3.71%, 4/1/98, AMBAC Insured 1,135,000 1,144,488
------------
18,084,811
------------
North Carolina (0.35%)
Education Facilities Finance Agency Rev.
(Bowman Gray School of Medicine),
3.65%, 9/1/20, LOC Wachovia Bank 1,500,000 (b) 1,500,000
------------
Ohio (2.77%)
Air Quality Development Authority PCR,
3.75%, 8/6/97, FGIC Insured 3,000,000 3,000,000
Akron Sewer System Rev. Bonds Series 1996,
3.80%, 12/1/97, MBIA Insured 1,000,000 1,003,887
State Water Development Authority PCR
(Cleveland Electric Illuminating Project),
3.70%, 9/8/97, FGIC Insured 7,700,000 7,700,000
------------
11,703,887
------------
Oklahoma (0.24%)
Garfield County Industrial Authority PCR,
3.70%, 1/1/25,
Guaranty: Oklahoma Gas & Electric 1,000,000 (b) 1,000,000
------------
See accompanying notes to investments in securities.
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
Pennsylvania (6.93%)
Beaver County IDA Pollution Control Revenue Bonds
3.70%, 10/1/97, LOC Swiss Bank $2,100,000 $2,100,000
3.70%, 11/20/97 5,800,000 5,800,000
Delaware IDA, 3.75%, 11/18/97, FGIC Insured 1,000,000 1,000,000
Lehigh County IDA
(Allegheny Electric Coop.) Series 1985,
3.80%, 12/1/15, LOC Rabobank Nederland 3,000,000 (b) 3,000,000
Quakertown Hospital Authority,
3.75%, 7/1/05, LOC PNC Bank 16,400,000 (b) 16,400,000
Water and Sewer System Revenue Sub. Series 1995B,
3.60%, 9/1/97, FSA Insured 1,000,000 1,000,310
------------
29,300,310
------------
South Carolina (3.08%)
Berkeley County PCR Revenue,
3.65%, 12/1/08, LOC Royal Bank of Canada 10,725,000 (b) 10,725,000
Florence County Hospital Revenue
(McLeod Regional Medical Center)
Series 1985A, 3.75%, 11/1/15, FGIC Insured 2,300,000 (b) 2,300,000
------------
13,025,000
------------
Tennessee (0.50%)
Clarksville Public Building Authority Revenue
Series 1990, 3.60%, 7/1/13, MBIA Insured 1,100,000 (b) 1,100,000
Shelby County Public Improvement
Series 1989A, 3.75%, 8/1/09 1,000,000 (b) 1,020,000
------------
2,120,000
------------
Texas (8.42%)
Arlington Independent School District
Capital Appreciation Refunding Bonds,
3.67%, 8/15/97, MBIA Insured 1,250,000 1,248,267
Austin Municipal Multiplier Refunding
Series 1985, 3.95%, 9/1/97 3,900,000 3,887,724
Coastal Bend Health Facilities Development Corp.,
3.65%, 8/15/27, LOC First Chicago 4,000,000 (b) 4,000,000
Goose Creek Consolidated Independent School
District Capital Appreciation Bonds,
3.75%, 2/15/98, Texas PSF guaranteed 1,200,000 1,176,389
Harris County Health Facilities Development Corp.
Hospital Revenue, 3.80%, 10/1/17 1,500,000 (b) 1,542,484
3.60%, 6/1/24, LOC Societe Generale 4,900,000 (b) 4,900,000
Lone Star Airport Improvement,
3.70%, 12/1/14, LOC Royal Bank of Canada 2,100,000 (b) 2,100,000
Nueces River Authority PCR Series 1985,
3.80%, 12/01/99, LOC Bank of Nova Scotia 6,500,000 (b) 6,500,000
See accompanying notes to investments in securities.
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
Texas (continued)
San Antonio Electric and Gas
Revenue Refunding Improvement
Series 1988, 3.73%, 2/1/98 $1,900,000 $1,976,910
State Refunding Public Finance Authority
Series 1995A, 3.53%, 10/1/97 2,250,000 2,255,373
State Tax Revenue Anticipation Notes
Series 1996, 3.90%, 8/29/97 6,000,000 6,003,651
------------
35,590,790
------------
Utah (3.95%)
Intermountain Power Agency (UT Power Supply),
3.70%, 10/3/97, LOC Swiss Bank 3,500,000 3,500,000
State Board of Regents Student Loan Revenue Bonds
Series B, 3.65%, 11/1/00, AMBAC Insured 13,200,000 (b) 13,200,000
------------
16,700,000
------------
Washington (1.72%)
State of Washingon G.O., 3.70%, 3/1/98 1,550,000 1,587,138
State Health Care Facilities Authority Revenue
Series A, 3.70%, 1/1/18,
LOC Morgan Guaranty Trust 985,000 (b) 985,000
Fred Hutchenson Cancer Ctr.,
3.70%, 1/1/23, LOC Morgan Guaranty Trust 4,700,000 (b) 4,700,000
------------
7,272,138
------------
West Virginia (0.21%)
State Hospital Finance Authority Revenue,
3.85%, 8/1/97, FSA Insured 875,000 (e) 874,160
------------
Wisconsin (0.50%)
Health Facilities Authority, 3.55%, 1/1/16,
LOC Toronto Dominion Bank 2,100,000 (b) 2,100,000
------------
Wyoming (3.31%)
Converse County PCR,
3.80%, 8/5/97, LOC Deutsche Bank 2,800,000 2,800,000
Gillette, Campbell County PCR,
3.75%, 9/5/97, LOC Deutsche Bank 1,000,000 1,000,000
Lincoln County PCR,
3.75%, 11/1/14, Exxon Corporation 2,100,000 (b) 2,100,000
Platte County PCR
Series 1984A, 3.80%, 7/1/14,
LOC Societe Generale 7,900,000 (b) 7,900,000
Series 1984B, 3.80%, 7/1/14,
LOC Societe Generale 200,000 (b) 200,000
------------
14,000,000
- -------------------------------------------------------------------------------
Total Investments in Securities (cost: $420,942,637) (d) $420,942,637
- -------------------------------------------------------------------------------
See accompanying notes to investments in securities.
TAX-FREE MONEY MARKET FUND
Investments in Securities (continued)
- -------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2 to
the financial statements.
(b) Interest rate varies to reflect current market conditions; rate shown is
the effective rate on July 31, 1997. The maturity date shown represents
final maturity. However, for purposes of Rule 2a-7, maturity is the next
interest rate reset date at which time the security can be put back to the
issuer.
(c) Portfolio abbreviations: AMBAC - American Municipal Bond
Association Corporation
FGIC - Financial Guaranty Insurance Corporation
FHA - Federal Housing Administration
FSA - Financial Security Assurance Corporation
GECC - General Electric Capital Corporation
G.O. - General Obligation
IDA - Industrial Development Authority
IDR - Industrial Development Revenue
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
SFMR - Single Family Mortgage Revenue
(d) Also represents cost for federal income tax purposes.
(e) At July 31, 1997, the cost of securities purchased on a when issued basis
was $1,875,253.75.
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A
STATEMENT OF ADDITIONAL INFORMATION OF
GREAT HALL INSTITUTIONAL PRIME MONEY MARKET FUND
(a series of Great Hall Investment Funds, Inc.)
GREAT HALL
INSTITUTIONAL PRIME MONEY MARKET FUND
-------------------------------------
60 South Sixth Street
Minneapolis, Minnesota 55402
(800) 934-6674
-----------------------------------
STATEMENT OF ADDITIONAL INFORMATION
dated August 1, 1997,
as amended on December 1, 1997
-----------------------------------
Great Hall Institutional Prime Money Market Fund (the "Fund") is a
diversified series of Great Hall Investment Funds, Inc. ("Great Hall"), an
open-end management investment company which currently offers its common shares
in four series. This Statement of Additional Information relates only to the
Fund and does not relate to any other series of Great Hall.
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Fund's Prospectus dated August 1, 1997, which
has been filed with the Securities and Exchange Commission (the "SEC"). To
obtain a copy of the Prospectus, please call Great Hall or your investment
executive.
TABLE OF CONTENTS
-----------------
Page
------
Investment Policies...................................... B-2
Investment Restrictions.................................. B-3
Taxes.................................................... B-4
Portfolio Transactions................................... B-5
Management and Distribution Agreements................... B-6
Determination of Net Asset Value......................... B-7
Calculation of Performance Data.......................... B-7
Directors and Officers................................... B-8
General Information...................................... B-10
Counsel and Auditors..................................... B-11
Financial and Other Information.......................... B-11
Appendix--Ratings of Investments......................... A-1
Financial Statements..................................... F-1
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information or the Prospectus dated August 1, 1997, and, if given or made, such
information or representations may not be relied upon as having been authorized
by Great Hall or the Distributor (as defined herein). This Statement of
Additional Information does not constitute an offer to sell, or a solicitation
of an offer to buy, securities in any state or jurisdiction in which such
offering or solicitation may not lawfully be made. The delivery of this
Statement of Additional Information at any time shall not imply that there has
been no change in the Fund's affairs since the date hereof.
INVESTMENT POLICIES
The following information supplements that set forth under "Investment
Objective and Policies" and "Certain Investment Strategies and Restrictions" in
the Prospectus and does not, standing alone, present a complete explanation of
the matters disclosed.
The Fund invests in high quality, domestic money market instruments,
including but not limited to marketable obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities (described below); corporate
debt obligations that are rated AA or better by Standard & Poor's Corporation
("S&P"), or Aa or better by Moody's Investors Service, Inc. ("Moody's");
obligations of banks and savings and loans that are members of the Federal
Deposit Insurance Corporation (the "FDIC"), which obligations may include, but
are not limited to, certificates of deposit, bankers' acceptances and
documented discount notes and letters of credit; high-grade commercial paper
guaranteed or issued by domestic corporations; and instruments (including
repurchase agreements) secured by such obligations.
Investments in obligations of banks and savings and loans are limited to:
(a) certificates of deposit issued by banks with assets in excess of
$500,000,000 or branches of such banks; (b) certificates of deposit or other
deposit obligations of savings and loans with assets in excess of $500,000,000;
and (c) bankers' acceptances, letters of credit or other obligations guaranteed
by banks meeting the above criteria. Bankers' acceptances are short-term
credit instruments used to finance the import, export, transfer or storage of
goods. They are termed "accepted" when a bank guarantees their payment at
maturity. Obligations issued or guaranteed by FDIC member institutions are not
necessarily guaranteed by the FDIC. Deposit obligations of domestic banks and
savings and loans are only insured by the FDIC up to a maximum of $100,000,
which limitation applies to all funds that Prime Fund may have on deposit at
any one bank or savings and loan. Bankers' acceptances and letters of credit
are not so insured. Deposit obligations of foreign banks or foreign branches
of domestic banks also are not covered by FDIC insurance; in addition, such
investments may involve other risks different from risks associated with
investments in deposit obligations of domestic banks, such as future political
and economic developments and the possible imposition of governmental
restrictions.
Permissible commercial paper investments generally consist of obligations
rated Prime-1 or A-1, or their subsequent equivalents, by Moody's or S&P, or
unrated commercial paper issued by companies with an unsecured debt issue
outstanding that is rated Aa or better by Moody's or AA or better by S&P.
Commercial paper constitutes unsecured indebtedness of business or banking
firms issued to finance their short-term financial needs. The Fund may also
purchase corporate debt obligations maturing within 397 days from the date of
acquisition with a minimum rating of Aa or AA.
Government Securities. The Fund may invest without limitation in
obligations of the United States Government or agencies or instrumentalities of
the United States Government ("Government Obligations"). Government Obligations
are backed in a variety of ways by the U.S. Government or its agencies or
instrumentalities. Some Government Obligations, such as U.S. Treasury bills,
notes and bonds and securities issued by the Government National Mortgage
Association ("GNMA"), are backed by the full faith and credit of the United
States Treasury. Others, such as those of the Federal Home Loan Banks, are
backed by the right of the issuer to borrow from the U.S. Treasury. Still
other Government Obligations, such as those issued by the Federal National
Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation
("FHLMC") and the Student Loan Marketing Association, are backed only by the
credit of the agency or instrumentality issuing the obligations and, in certain
instances, by the discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality. In none of these cases,
however, does the United States Government guarantee the value or yield of the
Government Obligations themselves or the net asset value of the Fund's shares.
Repurchase Agreements. The Fund may enter into repurchase agreements with
respect to any of the securities in which the Fund may invest directly. A
repurchase agreement is an agreement under which the Fund will purchase a
security subject to resale to a bank or dealer at an agreed-upon price and
date. The transaction requires the collateralization of the seller's
obligation by the transfer to the Fund's custodian of eligible securities with
an initial market value, including accrued interest, equal to at least the
dollar amount invested by the Fund in each agreement, and with the value of the
underlying securities marked to market daily to maintain at least 100%
collateralization of the repurchase price (including accrued interest). A
default by the seller might cause the Fund to experience a loss or delay in the
liquidation of the collateral securing the repurchase obligation and might also
cause the Fund to incur disposition costs in liquidating the collateral.
However, the Fund intends to enter into repurchase agreements only with primary
dealers that report to the Federal Reserve Bank of New York or with the 100
largest U.S. commercial banks (as measured by domestic deposits).
Additionally, the Fund intends to follow the collateral custody, protection and
perfection guidelines recommended by the Comptroller of the Currency for the
use of national banks in their direct repurchase agreement activities. As a
non-fundamental policy, the Fund will not invest more than 10% of its net
assets in repurchase agreements maturing in more than 7 days and other illiquid
investments.
Illiquid Investments; Liquidity Guidelines. The Fund is permitted to
invest up to 10% of its assets in all forms of "illiquid" investments and may
invest without limitation in "restricted" securities which Insight Investment
Management, Inc., the Fund's investment adviser ("Insight"), pursuant to
liquidity standards established by Great Hall's Board of Directors, has
determined are liquid. An investment is generally deemed to be "illiquid" if
it cannot be disposed of within seven days in the ordinary course of business
at approximately the amount at which the investment company is valuing the
investment. "Restricted securities" are securities which were originally sold
in private placements and which have not been registered under the Securities
Act of 1933 (the "1933 Act"). Such securities generally have been considered
illiquid by the staff of the SEC, since such securities may be resold only
subject to statutory restrictions and delays or if registered under the 1933
Act. However, the SEC has acknowledged that a market exists for certain
restricted securities (for example, securities qualifying for resale to certain
"qualified institutional buyers" pursuant to Rule 144A under the 1933 Act).
Additionally, Insight and the Fund believe that a similar market exists for
commercial paper issued pursuant to the private placement exemption of Section
4(2) of the 1933 Act. The Fund may invest without limitation in these forms of
restricted securities if such securities are deemed by Insight to be liquid in
accordance with liquidity guidelines established by Great Hall's Board of
Directors. Under these guidelines, Insight must consider (a) the frequency of
trades and quotes for the security, (b) the number of dealers willing to
purchase or sell the security and the number of other potential purchasers, (c)
dealer undertakings to make a market in the security, and (d) the nature of the
security and the nature of the marketplace trades (for example, the time needed
to dispose of the security, the method of soliciting offers and the mechanics
of transfer). Investing in restricted securities could have the effect of
increasing the level of the Fund's illiquidity to the extent that qualified
purchasers of the securities become, for a time, uninterested in purchasing
these securities.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions. In addition to the Fund's
investment objective and those policies identified as fundamental in the
Prospectus, the Fund has adopted the following fundamental investment
restrictions, which may not be changed without approval of shareholders owning
a majority of the Fund's outstanding shares, which as used in the Prospectus
and this Statement of Additional Information means the lesser of: (a) 67% or
more of the Fund's shares present at a shareholders' meeting if more than 50%
of the Fund's shares are represented at the meeting in person or by proxy; or
(b) more than 50% of the Fund's outstanding shares. The Fund may not:
(1) borrow money or issue senior securities (as defined the Investment
Company Act of 1940, as amended), except that the Fund may borrow money for
temporary or emergency non-investment purposes such as to accommodate
abnormally heavy redemption requests, and then only in an amount not exceeding
5% of the value of its total assets at the time of borrowing;
(2) underwrite securities issued by other persons, except insofar as
the Fund may be deemed an underwriter under the Securities Act of 1933, as
amended, in selling portfolio securities;
(3) invest more than 25% of its total assets in any one industry;
provided that this restriction shall not apply to (i) securities issued or
guaranteed by United States banks or United States branches of foreign banks
that are subject to the same regulation as United States banks, or (ii)
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and to repurchase agreements fully collateralized by
securities that are issued or guaranteed by the U.S. Government, its agencies
or instrumentalities;
(4) purchase or sell real estate or real estate mortgage loans
(although the Fund may invest in obligations secured by interests in real
estate), commodities, commodity contracts (including futures contracts), real
estate partnership interests and oil, gas and mineral leases; or
(5) make loans, other than by entering into repurchase agreements and
through the purchase of other permitted investments in accordance with its
investment objective and policies.
If the issuer of a security is within a given industry and the security
is guaranteed by an entity within a different industry, the industry of the
guarantor rather than that of the issuer shall be deemed to be the industry for
purposes of applying the test in investment restriction number 3 above.
Non-Fundamental Investment Restrictions. In addition, the Fund has
adopted certain non-fundamental investment restrictions, which may be changed
by the Board of Directors of Great Hall without approval by the Fund's
shareholders. As non-fundamental policies, the Fund may not:
(1) invest in companies for the purpose of exercising control or
management;
(2) invest in securities issued by other investment companies in excess
of limits imposed by applicable law.
(3) invest more than 10% of its net assets in illiquid investments,
including but not limited to repurchase agreements maturing in more than seven
days;
(4) pledge, mortgage or hypothecate its assets, except that to secure
permitted borrowings; or
(5) sell securities short or purchase any securities on margin, except
for such short-term credits as are necessary for clearance of portfolio
transactions.
Percentage Restrictions. If a fundamental or a non-fundamental
percentage restriction or limitation is adhered to at the time of investment, a
later increase or decrease in such percentage resulting from a change in values
or net assets will not be considered a violation thereof.
TAXES
Taxation of the Fund-In General
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
so qualify, the Fund must, among other things; (a) derive in each taxable year
at least 90% of its gross income from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies, or other income derived with respect to its
business of investing in such stock, securities or currencies (the "90% test");
and (b) satisfy certain diversification requirements at the close of each
quarter of the Fund's taxable year.
As a regulated investment company, the Fund will not be liable for
federal income taxes on the part of its taxable net investment income and net
capital gains, if any, that it distributes to shareholders if at least 90% of
its net investment income and net short-term capital gain for the taxable year
is distributed. However, if for any taxable year the Fund does not satisfy the
requirements of Subchapter M of the Code, all of its taxable income will be
subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to
shareholders as ordinary income to the extent of the Fund's current or
accumulated earnings and profits.
The Fund will be liable for a nondeductible 4% excise tax on amounts not
distributed on a timely basis. To avoid the tax, during each calendar year the
Fund must distribute: (a) at least 98% of its ordinary income (not taking into
account any capital gains or losses) for the calendar year; (b) at least 98% of
its capital gain net income for the twelve-month period ending on October 31
(or December 31, if the Fund so elects); and (c) any portion (not taxed to the
Fund) of the respective balances from the prior year. The Fund intends to make
sufficient distributions to avoid this 4% excise tax.
The Fund, or a shareholder's broker with respect to the Fund, is required
to withhold federal income tax at a rate of 31% of the dividends, capital gains
distributions and proceeds of redemptions if a shareholder fails to furnish the
Fund with a correct taxpayer identification number ("TIN") or to certify that
the shareholder is exempt from such withholding or if the Internal Revenue
Service notifies the Fund or broker that the shareholder has provided the Fund
with an incorrect TIN or failed to properly report dividend or interest income
for federal income tax purposes. Any such withheld amount will be fully
creditable on each shareholder's individual federal income tax return. An
individual's TIN is his or her social security number.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders. No attempt
is made to present a detailed explanation of the federal or state income tax
treatment of the Fund or its shareholders, and this discussion is not intended
as a substitute for careful tax planning. Each investor is advised to consult
his or her tax adviser regarding specific questions as to federal, state, local
and foreign taxation.
PORTFOLIO TRANSACTIONS
As provided in the investment advisory agreement in effect between
Insight and the Fund, Insight makes investment decisions and decisions as to
the execution of portfolio transactions for the Fund, subject to the general
supervision of the Board of Directors of Great Hall. At times, investment
decisions may be made to purchase or sell the same investment security for more
than one account over which Insight exercises investment discretion (including
the Fund), in which case the transactions will be allocated as to amount and
price in a manner considered equitable to each such account.
Under the 1940 Act, persons affiliated with Great Hall are prohibited
from dealing with Great Hall as a principal in the purchase and sale of
investments. Since over-the-counter transactions are usually principal
transactions, affiliated persons of Great Hall may not serve as a dealer in
connection with such transfers or commitments. The 1940 Act also prohibits
Great Hall from purchasing a security being publicly underwritten from a
syndicate in which any affiliated person is a principal underwriter except in
accordance with certain limitations. Furthermore, Great Hall may not use any
affiliated person as a broker or dealer in executing portfolio transactions
without complying with the limitations imposed by the rules of the SEC, which
rules require the commissions, fees or other remuneration received by such
affiliated broker or dealer be: (a) reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers or dealers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period of time;
and (b) at least as favorable as commissions contemporaneously charged by such
affiliated broker or dealer on comparable transactions for its most favored
comparable unaffiliated customers.
Most purchase and sale transactions with respect to the Fund are with the
issuer or an underwriter or with major dealers of securities acting as
principals. Such transactions are normally on a net basis and generally do not
involve payment of brokerage commissions. However, the cost of securities
purchased from an underwriter normally includes a commission paid by the issuer
to the underwriter. Purchases or sales from or to dealers will normally
reflect the spread between bid and ask prices.
In effecting purchases and sales of portfolio securities for the Fund,
Insight will place orders in such manner as in its opinion will offer the best
price and market for the execution of each transaction. Among two or more
dealers offering the best price and execution, such dealers may also evaluated
by Insight on the basis of their furnishment of research information and
statistical and other services to Insight. It is not always possible to place
a dollar value on information and services received from dealers. Since it is
only supplementary to Insight's own research efforts, the receipt of research
information is not expected to reduce significantly Insight's expenses. Insight
may also consider, subject to its requirement to seek best execution, sales by
dealers of the Fund shares.
MANAGEMENT AND DISTRIBUTION AGREEMENTS
Investment Adviser; Investment Advisory Agreement
Insight serves as the Fund's investment adviser. Insight is a wholly-
owned subsidiary of Interra Financial Incorporated, which will be renamed Dain
Rauscher Corporation on or about January 1, 1998 ("DRC").
Pursuant to an investment advisory agreement (the "Advisory Agreement"),
Insight performs and bears the internal cost of research, statistical analysis
and continuous supervision of the Fund's investment portfolio and furnishes
office facilities and certain clerical and administrative services to the Fund.
In addition, Insight bears all promotional expenses, including the cost of
printing and distributing prospectuses utilized for promotional purposes.
Other expenses are borne by the Fund including, but not limited to, taxes,
interest, brokerage fees and commissions, and costs and expenses associated
with the following matters and services: registration and qualification of
Great Hall, the Fund and its shares with the SEC and the various states;
services of the Fund's custodian, transfer agent, dividend disbursing agent,
accounting services agent, shareholder services agent, independent auditors and
outside legal counsel; maintenance of corporate existence; preparation,
printing and distribution of prospectuses to existing Fund shareholders;
services of Great Hall directors who are not employees of Insight or of the
Distributor or any of their affiliates; directors' and shareholders' meetings,
including the printing and mailing of proxy materials; insurance premiums for
fidelity and other coverage; issuance and sale of Fund shares (to the extent
not borne by the Distributor under its agreement with Great Hall); redemption
of Fund shares; association membership dues; preparation, printing and mailing
of shareholder reports; and portfolio pricing services, if any. Expenses borne
by Great Hall and attributable to only one series of Great Hall will be
allocated to that series; expenses that are not specifically allocable to any
one series will be allocated among all series (including the Fund) in a manner
and on a basis determined in good faith by the Board of Directors of Great
Hall, including a majority of the Directors who are not "interested" persons of
Great Hall or Insight, to be fair and equitable.
Under the Advisory Agreement, Insight receives a monthly advisory fee
equal on an annual basis to .25% of the average daily value of the Fund's net
assets.
The Advisory Agreement continues in effect from year to year, if
specifically approved at least annually by a vote cast in person at a meeting
called for such purpose by a majority of the Directors of Great Hall, and a
majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of Great Hall or Insight ("Independent Directors"). The Advisory
Agreement may be terminated by either party thereto, by the Independent
Directors or by a vote of the holders of a majority of the outstanding
securities of Great Hall, at any time, without penalty, upon 60 days' written
notice, and automatically terminates in the event of an assignment.
Termination will not affect the right of Insight to receive payment of any
unpaid balance of the compensation earned prior to termination.
The Distributor
The Fund is distributed by Dain Bosworth Incorporated ("Dain") and
Rauscher Pierce Refsnes, Inc. ("Rauscher"), each a member firm of the New York
Stock Exchange (the "NYSE"), the National Association of Securities Dealers,
Inc. and a wholly owned subsidiary of DRC. On or about January 2, 1998,
Rauscher will be merged into Dain, and the combined firm will be renamed Dain
Rauscher Incorporated ("Dain Rauscher"). Prior to January 2, 1998, Dain and
Rauscher together and, following January 2, 1998, the combined Dain Rauscher,
will be referred to as the "Distributor." The Funds have agreed to indemnify
the Distributor and its affiliates, to the extent permitted by applicable law,
against certain liabilities under the Securities Act of 1933.
DETERMINATION OF NET ASSET VALUE
The Fund's net asset value per share will be calculated in accordance
with generally accepted accounting principles and the applicable rules and
regulations of the SEC. The Fund values its portfolio securities using the
amortized cost method. This method involves valuing a security at its cost and
thereafter accruing any discount or premium at a constant rate to maturity. By
declaring these accruals to the Fund's shareholders in the daily dividend, the
value of the Fund's assets and, thus, its net asset value per share, will
generally remain constant. Although this method provides certainty in
valuation, it may result in periods during which the value of the Fund's
securities, as determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold the securities. During such periods, the
yields on Fund shares may differ somewhat from that obtained in similar funds
with identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of their portfolio securities
In connection with the use of the amortized cost method, the Fund
maintains a dollar-weighted average portfolio maturity of 90 days or less and
purchases only portfolio securities having remaining maturities of 397 days or
less. Great Hall's Board of Directors has established procedures designed to
stabilize, to the extent reasonably possible, the Fund's net asset value per
share, as computed for purposes of sales and redemptions, at $1.00. Such
procedures include review of the Fund's portfolio holdings by the Board of
Directors of Great Hall at such intervals as it may deem appropriate to
determine whether the Fund's net asset value calculated by using available
market quotations deviates from $1.00 per share and, if so, whether such
deviation may result in material dilution or may be otherwise unfair to
existing shareholders. In the event that the Board of Directors determines
that a material deviation from net asset value exists, the Board will take such
corrective action as it deems necessary and appropriate, which action might
include selling portfolio securities prior to maturity to realize capital gains
or losses or to shorten average portfolio maturity, withholding dividends, or
establishing net asset values per share by using available market quotations.
CALCULATION OF PERFORMANCE DATA
Yield
As stated in the Prospectus, the Fund from time to time may advertise its
yield.
The Fund's current yield will be computed by determining the change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of a seven-day period,
and dividing the change by the value of the account at the beginning of the
base period to obtain the base period return, and then multiplying the base
period return by (365/7), with the resulting yield figure carried to at least
the nearest hundredth of one percent.
The Fund's effective or compounded yield will be computed by determining
the change, exclusive of capital changes, in the value of a hypothetical pre-
existing account having a balance of one share at the beginning of a seven-day
period, and dividing the change by the value of the account at the beginning of
the base period to obtain the base period return, and then compounding the base
period return by adding 1, raising the sum to a power equal to 365 divided by
7, and subtracting 1 from the result, according to the following formula:
Effective yield = [(Base period return + 1) 365/7] - 1
DIRECTORS AND OFFICERS
Directors and officers of Great Hall, together with information as to
their principal occupations during the past five years, are set forth below.
Except as otherwise set forth below, the address of each officer and director
is the same as that of Great Hall - 60 South Sixth Street, Minneapolis,
Minnesota 55402.
Principal Occupations During the
Name and Address Position Past Five Years and Other Affiliations
- ---------------- -------- --------------------------------------
T. Geron ("Jerry") Bell Director President of the Minnesota Twins
34 Puckett Place Baseball Club Incorporated since 1987.
Minneapolis, MN 55415
Sandra J. Hale Director President of Enterprise Management,
2308 West Lake of the Int'l. since 1991; Minnesota
Isles Pkwy. Commissioner of Administration from
Minneapolis, MN 55405 1982 to 1990.
Ron James* Director President and Chief Executive Officer
150 South Fifth Street, of Ceridian Corporation-Human
Suite 3300 Resources Group since January 1996;
Minneapolis, MN 55402 Vice-President - Minnesota of U.S.
West Communications from 1990 to
December 1995; Vice President and
General Manager-Large Business
Markets of U.S. West Communications
from 1987 to 1990; Director of The
St. Paul Companies since 1993.
Jay H. Wein Director Independent consultant since April
5305 Elm Ridge Circle 1995; Director of Information
Excelsior, MN 55331 Advantage, Inc. since 1992 and
Chairman from 1992 to April 1995;
Retired in August 1989 after 15 years
as Office Managing Partner of the
Minneapolis/St. Paul Office of
Arthur Andersen & Co.
J. Scott Spiker Chief Executive Senior Executive Vice President of
Officer the Distributor; Chief Executive
Officer and Director of Insight;
Senior Vice President and Business
Manager, Employee Benefit Services,
of Norwest Corporation from 1990
through January 1994; Product
Manager, Institutional Collective
Funds, of Norwest Corporation from
1989 through January 1994.
Raye C. Kanzenbach Chief Investment Vice President and Chief Investment
Officer Officer of Insight; prior to 1991,
Director, Senior Vice President and
Secretary of Insight Bond Management,
Inc. since 1983.
Julie K. Getchell Chief Financial President and Chief Operating Officer
Officer of Insight and Senior Vice President
of the Distributor.
Principal Occupations During the
Name and Address Position Past Five Years and Other Affiliations
- ---------------- -------- --------------------------------------
Matthew L. Thompson Secretary Partner of Faegre & Benson LLP, Great
2200 Norwest Center Hall's general counsel, since May
90 South Seventh Street 1995; Vice President, Assistant
Minneapolis, MN 55402 Secretary and Corporate/Fund Counsel
of DRC from January 1994 to May 1995;
prior thereto, Partner of Dorsey &
Whitney since 1993 and Associate of
Dorsey & Whitney from 1985 through
1992.
Thomas D. Vogel Compliance Vice President and Controller of
Officer Insight and the Distributor's Business
Services Group; Assistant Controller
of Insight from 1993 to 1995.
______________________________
* Mr. James may be deemed to be an "interested" Director because he is a
director of The St. Paul Companies, which owns a majority interest in a
registered broker-dealer.
The annual compensation of each Director is $6,000 plus $1,000 for each
meeting attended. No compensation is paid by Great Hall to its officers. The
following table sets forth for such period the aggregate compensation
(excluding expenses) paid by Great Hall to its directors during the fiscal year
ended July 31, 1997:
COMPENSATION TABLE
------------------
Pensions or Retirement
Aggregate Benefits Accrued
Compensation as part of
Name of Director from Great Hall Great Hall Expenses
T. Geron (Jerry) Bell $10,000 None
Sandra J. Hale $10,000* None
Ron James $10,000 None
Jay H. Wein $10,000* None
______________________________
* Director was paid an additional $2,000 from Insight for additional work
during the year relating to the Board's due diligence responsibilities in
connection with the transfer of two prior series of Great Hall.
Additional directors of Insight are as follows:
Name Other Positions
----------------------- -------------------------------------
Irving Weiser Chairman, Chief Executive Officer and
President of the Distributor
John C. Appel Vice Chairman and Chief Financial
Officer of the Distributor
William A. Johnstone Vice Chairman of the Distributor and
President of its Equity Capital
Markets Group
Ronald A. Tschetter Senior Executive Vice President of
the Distributor and President of its
Private Client Group
Nelson D. Civello Senior Executive Vice President of
the Distributor and President of its
Fixed Income Capital Markets Group
GENERAL INFORMATION
Under the terms of the Custodian Agreement, Norwest Bank Minnesota, N.A.
(the "Custodian") holds and safekeeps all of the Fund's assets. For its
services, the Custodian is paid a monthly fee based upon the average market
value of the Fund's assets held in custody plus securities transaction charges;
it is also reimbursed for certain out-of-pocket expenses.
Under the terms of an Investment Account Agreement, Investors Fiduciary
Trust Company (the "Fund Accounting Agent") performs necessary investment
accounting and recordkeeping services for the Fund. For its services, the Fund
Accounting Agent is paid a monthly fee and is reimbursed for certain out-of-
pocket expenses.
Under the terms of a Transfer Agency Agreement, Rodney Square Management
Corporation (the "Transfer Agent") maintains the Fund's shareholder account
records, handles certain shareholder communications, distributes dividends and
distributions and produces activity statements. For these services, the
Transfer Agent receives a flat monthly fee and is also reimbursed for certain
out-of-pocket expenses.
The Distributor also performs certain shareholder account services for
the Fund pursuant to a Shareholder Account Service Agreement. Under the terms
of the Shareholder Account Service Agreement, the Distributor disburses or
credits all proceeds of redemptions, dividends and other distributions to
shareholders, handles certain shareholder communications, prepares shareholder
records, maintains a master account with the Transfer Agent on behalf of
shareholders and performs other related services. For its services, the
Distributor receives a monthly fee computed on the basis of the number of
shareholder accounts that are maintained for the Fund during the month and also
is reimbursed for certain out-of-pocket expenses.
Great Hall maintains accounting records that specifically allocate assets
and liabilities on a series by series basis. The shares of each series
represent an undivided interest in the assets and liabilities specifically
allocated to that series. Creditors and other persons contracting with Great
Hall with respect to a series may look solely to the assets of that series to
satisfy claims against Great Hall.
All Fund shares are the same class and are freely transferable. Each
share has equal dividend rights and is entitled to one vote at all shareholder
meetings. Separate votes are taken by each series of Great Hall except to the
extent that the 1940 Act requires shares of all series to be voted in the
aggregate. Shares have non-cumulative voting rights, so that the holders of
more than 50% of the shares can, if they choose to do so, elect all the
directors of Great Hall, in which event the holders of the remaining shares
will be unable to elect any person as a director. Whenever the approval of a
majority of the outstanding shares of a series of Great Hall is required in
connection with shareholder approval of an investment advisory agreement,
changes in the investment objective, policies or limitations of that series, or
changes in the distribution expense plan, a "majority" shall mean the vote of
the lesser of: (a) 67% or more of the shares of such series present at a
meeting, if the holders of more than 50% of the outstanding shares of such
series are present in person or by proxy; or (b) more than 50% of the
outstanding shares of such series. To the knowledge of Great Hall, no
shareholder beneficially owned 5% or more of the Fund's shares as of
November 20, 1997.
Great Hall is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend to
hold such meetings. The Board of Directors may convene shareholder meetings
when it deems appropriate. In addition, if a regular meeting of shareholders
has not been held during the immediately preceding fifteen months, a
shareholder or shareholders holding three percent or more of the voting shares
of Great Hall may demand a regular meeting of shareholders by written notice of
demand given to the chief executive officer or the chief financial officer of
Great Hall. Within ninety days after receipt of the demand, a regular meeting
of shareholders must be held at the expense of Great Hall. Irrespective of
whether a regular meeting of shareholders has been held during the immediately
preceding fifteen months, in accordance with Section 16(c) of the 1940 Act, the
Board of Directors of Great Hall shall promptly call a meeting of shareholders
for the purpose of voting upon the question of removal of any director when
requested in writing to do so by the record holders of not less than 10% of the
outstanding shares, and Great Hall will assist in communications with other
shareholders as required by the 1940 Act.
Under Minnesota law, the Board of Directors has overall responsibility
for managing Great Hall in good faith, in a manner reasonably believed to be in
the best interests of Great Hall, and with the care an ordinarily prudent
person in a like position would exercise in similar circumstances. Under
Minnesota law, directors owe Great Hall and its shareholders certain fiduciary
duties, including a duty of "loyalty" (to act in good faith and in the best
interests of Great Hall) and a duty of "care" (to act with the care that a
reasonably prudent person would exercise under similar circumstances).
Minnesota law authorizes corporations to eliminate the personal monetary
liability of directors to the corporation or its shareholders for breach of the
duty of "care." Directors of corporations adopting such a limitation provision
still owe the corporation this duty of "care," but under most circumstances
cannot be sued for monetary damages for breaches of such duty. The Articles of
Incorporation of Great Hall limit the liability of directors to the fullest
extent permitted by law. The directors of Great Hall remain fully liable
(including possibly for monetary damages) for breaches of their duty of
"loyalty," for self-dealing, for bad faith and intentional misconduct, and for
violations of the 1933 Act, the Securities Act of 1934, and certain provisions
of Minnesota corporation law. Additionally, the 1940 Act prohibits limiting a
director's liability for willful misfeasance, bad faith, gross negligence, or
reckless disregard of the director's duties in the conduct of the director's
office, and it is uncertain whether and to what extent directors remain liable
for monetary damages for violations of the 1940 Act. The SEC staff has taken
the position that investment company directors remain liable for monetary
damages under certain circumstances.
Upon issuance and sale in accordance with the terms of the Fund's
Prospectus and Statement of Additional Information, each Fund share will be
fully paid and non-assessable. Shares have no preemptive, subscription or
conversion rights and are redeemable as set forth under "How To Redeem Shares"
in the Prospectus. In the event of the dissolution or liquidation of Great
Hall, the holders of the Fund shares are entitled to receive, as a class, the
underlying assets of the Fund available for distribution to shareholders.
COUNSEL AND AUDITORS
Faegre & Benson LLP, 2200 Norwest Center, 90 South Seventh Street,
Minneapolis, Minnesota 55402, serves as Great Hall's general counsel.
Lindquist & Vennum PLLP, 4200 IDS Center, 80 South Eighth Street, Minneapolis,
Minnesota 55402, serves as counsel to Great Hall's disinterested directors.
KPMG Peat Marwick LLP, 90 South Seventh Street, 4200 Norwest Tower,
Minneapolis, Minnesota 55402, has been selected as the independent auditors of
Great Hall for its fiscal year ending July 31, 1998.
FINANCIAL AND OTHER INFORMATION
The Fund's prospectus and this Statement of Additional Information do not
contain all the information included in Great Hall's Registration Statement
filed with the SEC under the 1933 Act and the 1940 Act (the "Registration
Statement") with respect to the securities offered by the Prospectus and this
Statement of Additional Information. Certain portions of the Registration
Statement have been omitted from the Prospectus and this Statement of
Additional Information pursuant to the rules and regulations of the SEC. The
Registration Statement including the exhibits thereto may be examined at the
office of the SEC in Washington, D.C.
Statements contained in the Fund's Prospectus or in this Statement of
Additional Information as to any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectus and this Statement of Additional Information
for a part, each such statement being qualified in all respects by such
reference.
APPENDIX
RATINGS OF INVESTMENTS
The following is a description of Standard & Poor's Corporation ("S&P")
and Moody's Investors Service, Inc. ("Moody's") commercial paper, loan, note
and bond ratings. To the extent that ratings accorded by S&P or Moody's may
change as a result of changes in such organizations, the Fund will attempt to
use comparable rating standards for their permissible investments.
Description of Moody's Commercial Paper, Loan and Note Ratings.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Repayment capacity will normally be evidenced by the following characteristics:
* Leading market positions in well established industries.
* High rates of return on funds employed.
* Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
* Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
* Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Loans bearing the designation MIG-1 by Moody's are of the best quality,
enjoying strong protection from established cash flows, superior liquidity
support or demonstrated broad-based access to the market for refinancing.
Loans bearing the designation of MIG-2 are of high quality, with margins
of protection ample although not so large as the preceding group.
Loans bearing the designation of MIG-3 are of favorable quality. -All
security elements are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established.
Description of S&P's Commercial Paper and Municipal Note Ratings
The rating A is the highest commercial paper rating assigned by S&P.
Issues in this category have the greatest capacity for timely payment and are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
The designation A-1 indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
The designation A-2 indicates that the capacity for timely payment is
strong. However, the relative degree of safety is not as high as for issues
designated "A-1."
The designation A-3 indicates a satisfactory capacity for timely payment.
However, issues with this designation are somewhat more vulnerable to the
adverse effects of changes in circumstances than issues carrying the higher
designations.
Municipal notes rated SP-1 have a very strong or strong capacity to pay
principal and interest. Those issuers determined to possess overwhelming
safety characteristics will be given a plus (+) designation.
Municipal notes rated SP-2 have a satisfactory capacity to pay principal
and interest.
Municipal notes rated SP-3 have a speculative capacity to pay principal
and interest.
Description of S&P's Bond Ratings
AAA-Bonds rated AAA have the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
AA-Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in a small degree.
A-Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Although they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher-rated categories.
BB, B, CCC, CC, C-Bonds rated BB, B, CCC, CC and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Plus (+) or (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Description of Moody's Bond Ratings
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than with respect
to Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Within each rating classification from Aa through B, Moody's has assigned
the numerical modifiers 1, 2 and 3. The modifier 1 indicates that a security
ranks in the high end of that rating category, 2 in the mid-range of a category
and 3 nearer the low end of a category.
INSTITUTIONAL PRIME MONEY MARKET FUND
Statement of Assets and Liabilities
October 31, 1997
(unaudited)
- -------------------------------------------------------------------------------
Assets:
Investments in securities at market value (note 2),
(identified cost $81,094,482)............................ $81,094,482
Cash in bank on demand deposit............................. 16,519
Accrued interest receivable................................ 104,866
Organization costs (note 2)................................ 8,031
- -------------------------------------------------------------------------------
Total assets............................................... 81,223,898
- -------------------------------------------------------------------------------
Liabilities:
Other accrued expenses..................................... 21,500
- -------------------------------------------------------------------------------
Total liabilities.......................................... 21,500
- -------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock......... $81,202,398
- -------------------------------------------------------------------------------
Represented by:
Capital stock - authorized
100 billion shares of $.01 par
value for the fund, outstanding 81,202,398 shares........ $812,024
Additional paid-in capital................................. 80,390,374
- -------------------------------------------------------------------------------
Total - representing net assets applicable to
outstanding capital stock............................ $81,202,398
- -------------------------------------------------------------------------------
Net asset value per share
of outstanding capital stock............................. $1.00
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
INSTITUTIONAL PRIME MONEY MARKET FUND
Statement of Operations
For the period from August 11, 1997 to October 31, 1997
(unaudited)
- -------------------------------------------------------------------------------
Income:
Interest....................................................... $573,037
- -------------------------------------------------------------------------------
Expenses (note 4):
Investment advisory fee........................................ 25,355
Custodian, accounting and transfer agent fees.................. 4,747
Sub-accounting transfer agent fees............................. 220
Reports to shareholders........................................ 500
Amortization of organization costs............................. 386
Directors' fees................................................ 1,000
Audit and legal fees........................................... 3,000
Registration fees.............................................. 21,400
Administrative................................................. 550
Other expenses................................................. 2,226
- -------------------------------------------------------------------------------
Total expenses................................................... 59,384
Less expenses voluntarily waived or absorbed by Advisor.......... (24,127)
- -------------------------------------------------------------------------------
Total net expenses............................................... 35,257
- -------------------------------------------------------------------------------
Investment income - net.......................................... 537,780
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations............. $537,780
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
INSTITUTIONAL PRIME MONEY MARKET FUND
Statement of Changes in Net Assets
For the period from August 11, 1997 to October 31, 1997
(unaudited)
- -------------------------------------------------------------------------------
Operations:
Investment income, net................................... $537,780
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations..... 537,780
- -------------------------------------------------------------------------------
Distributions to shareholders from:
Investment income - net.................................. (537,780)
- -------------------------------------------------------------------------------
Total distributions to shareholders...................... (537,780)
- -------------------------------------------------------------------------------
Capital share transactions at net asset value of $1.00 per share:
Proceeds from sales...................................... 116,034,593
Shares issued for reinvestment of distributions.......... 537,780
Payment for shares redeemed.............................. (35,369,975)
- -------------------------------------------------------------------------------
Increase in net assets from capital share transactions... 81,202,398
- -------------------------------------------------------------------------------
Total increase in net assets............................... 81,202,398
- -------------------------------------------------------------------------------
Net assets at beginning of period.......................... --
- -------------------------------------------------------------------------------
Net assets at end of period................................ $81,202,398
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
INSTITUTIONAL PRIME MONEY MARKET FUND
Notes To Financial Statements
1. Organization
Great Hall Investment Funds, Inc. (the Company) was incorporated on June
24, 1991 and is registered under the Investment Company Act of 1940 (as
amended) as an open-end management investment company and presently
includes four funds; Institutional Prime Money Market Fund (the fund), U.S.
Government Money Market Fund, Tax-Free Money Market Fund and Prime Money
Market Fund. The Company's articles of incorporation permit the board of
directors to create additional funds in the future.
2. Summary of Significant Accounting Policies
The significant accounting policies followed by the fund are as follows:
Investments in Securities
Pursuant to Rule 2a-7 of the Investment Company Act of 1940 (as amended),
securities are valued at amortized cost, which approximates market value,
in order to maintain a constant net asset value of $1 per share. Security
transactions are accounted for on the date the securities are purchased or
sold. Interest income, including amortization of discount and premium, is
accrued daily.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Federal Taxes
The funds' policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income to shareholders. Therefore, no income tax
provision is required. The fund is treated as a separate entity for
federal income tax purposes. In addition, on a calendar-year basis, the
fund intends to distribute substantially all of its net investment income
and realized gains, if any, to avoid the payment of any federal excise
taxes.
Distribution to Shareholders
Distribution to shareholders from net investment income are declared daily
and paid monthly through reinvestment in additional shares of the fund at
net asset value or payable in cash.
INSTITUTIONAL PRIME MONEY MARKET FUND
Notes To Financial Statements (continued)
Organization Costs
Organization expenses were incurred in connection with the start-up and
initial registration of the funds. These costs are being amortized over 60
months on a straight-line basis.
Repurchase Agreements
Securities pledged as collateral for repurchase agreements are held by the
funds' custodian bank until maturity of the repurchase agreement.
Procedures for all agreements ensure that the daily market value of the
collateral is in excess of the repurchase agreement in the event of
default.
3. Investment Security Transactions
Cost of purchases and proceeds from sales of securities from August 11,
1997 to October 31, 1997 were as follows:
Purchases Sales Proceeds
---------------------------------------------------------------------------
Institutional Prime Money Market Fund.... $340,645,229 $259,550,747
4. Fees and Expenses
The Company has entered into an investment advisory and management
agreement with Interra Advisory Services, Inc. (IAS), under which IAS
manages the fund's assets and furnishes related office facilities,
equipment, research and personnel. The agreement requires the fund to pay
IAS a monthly fee based upon average daily net assets. The fee is equal to
an annual rate of 0.25% of net assets.
The fund has also entered into a sub-accounting agreement with affiliates
Dain Bosworth Incorporated (DBI) and Rauscher Pierce Refsnes, Inc. (RPR)
where each firm performs various transfer and dividend disbursing agent
services. The fee, which is paid monthly to DBI and RPR for providing such
service, is equal to an annual rate of $12 per shareholder account plus
certain out-of-pocket expenses.
In addition to the investment advisory and management fee and the
shareholder account servicing fee, the fund is responsible for paying most
other operating expenses including outside directors' fees and expenses,
custodian fees, registration fees, printing and shareholder reports,
transfer agent fees and expenses, legal, auditing and accounting services,
organizational costs, insurance, interest and other miscellaneous expenses.
INSTITUTIONAL PRIME MONEY MARKET FUND
Notes To Financial Statements (continued)
5. Financial Highlights
Per share data for a share of capital stock outstanding throughout the
period and selected information for the period are as follows:
---------------------------------------------------------------------------
Period from
8/11/97 to 10/3197
(unaudited)
---------------------------------------------------------------------------
Net asset value, beginning of period......................... $1.00
---------------------------------------------------------------------------
Income from investment operations............................ 0.01
Distributions to shareholders from investment income......... (0.01)
---------------------------------------------------------------------------
Net asset value, end of period............................... $1.00
---------------------------------------------------------------------------
Total return................................................. 1.2%
Net assets at end of period (000s omitted)................... $81,202
Ratio of expenses to average daily net assets**.............. 0.35%*
Ratio of net investment income to
average daily net assets**.................................. 5.30%*
---------------------------------------------------------------------------
* Adjusted to an annual basis.
** Various fund fees and expenses were voluntarily waived or absorbed by
IAS for the fund during the period ended October 31, 1997. Had the
fund paid all expenses, the ratio of expenses and net investment income
to average daily net assets would have been 0.59%/5.06% for the period
from August 11, 1997 to October 31, 1997.
INSTITUTIONAL PRIME MONEY MARKET FUND
Investments in Securities (unaudited)
October 31, 1997
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
Commercial Paper & Other Corporate Obligations (86.32%):
- -------------------------------------------------------------------------------
Banks - Domestic (13.61%)
Bankers Trust Company,
5.58%-5.65%, 12/2/97-3/11/98 $2,100,000 (d) $2,098,060
Chase Manhatten Bank,
Bankers Acceptance, 5.50%, 12/8/97 1,000,000 994,653
First National
Bank of Chicago, 5.60%, 1/6/98 4,000,000 4,000,000
Suntrust Bank,
Bankers Acceptance, 5.52%, 1/6/98 4,000,000 3,960,747
-----------
11,053,460
-----------
Banks - Foreign (1.47%)
Banco Nacionale de Mexico, S.A.
5.53%, 12/10/97, LOC Barclay Bank 1,200,000 1,193,180
-----------
Banks - Other (5.13%)
Accor S.A., 5.53%, 11/13/97,
LOC Banque Nationale De Paris 100,000 99,846
Commed Fuel Company, Inc., 5.53%, 11/21/97 100,000 99,724
Toronto Dominion Holdings, Inc.,
5.52%, 1/2/98 4,000,000 3,963,133
-----------
4,162,703
-----------
Chemicals (2.46%)
Henkel Corporation, 5.52%, 11/24/97 2,000,000 (c) 1,993,560
-----------
Drugs and Cosmetics (5.05%)
American Home Products Corporation,
5.51%, 11/17/97 1,300,000 (c) 1,297,214
Pfizer Inc., 5.52%, 11/3/97 2,800,000 2,800,000
-----------
4,097,214
-----------
Financial - Auto (3.72%)
Ford Motor Credit Corporation, 5.72%, 2/12/98 3,000,000 (d) 3,024,240
-----------
Financial - Diversified Business (15.38%)
American General Finance Corporation,
5.57%, 1/12/98 1,200,000 1,187,003
Associates Corporation of North America,
5.51%, 11/21/97 100,000 99,725
CIT Group Holdings, 5.51%, 12/9/97 1,200,000 1,193,388
Dillard Investment Company, 5.50%, 11/21/97 4,000,000 3,989,000
General Electric Capital Corporation,
5.50%-5.57%, 1/14/98-2/17/98 1,300,000 (c) 1,285,013
See accompanying notes to investments in securities
INSTITUTIONAL PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- -------------------------------------------------------------------------------
Financial - Diversified Business (continued)
Household Finance Company,
5.53%-5.54%, 1/16/98-1/28/98 $1,800,000 $1,779,320
Merrill Lynch & Co.,
5.54%-5.57%, 11/24/97-3/16/98 1,800,000 1,764,694
Morgan (J.P.) and Company, 5.50%, 12/11/97 1,200,000 1,193,033
-----------
12,491,176
-----------
Financial - Diversified Business, Asset-Backed (17.11%)
Asset Securitization Coop. Corporation,
5.51%, 12/5/97 4,000,000 (c) 3,980,409
Barton Capital Corporation, 5.57%, 3/16/98 1,500,000 (c) 1,469,133
Falcon Asset Securitization, 5.53%, 11/5/97 1,000,000 (c) 999,693
Receivables Capital Corporation, 5.55%, 11/6/97 1,500,000 (c) 1,499,306
Redwood Receivables Corporation, 5.55%, 11/6/97 2,000,000 1,999,075
Triple A One Funding, 5.54%, 11/7/97-1/15/98 2,970,000 (c) 2,946,935
Windmill Funding Corporation, 5.60%, 11/14//97 1,000,000 (c) 998,289
-----------
13,892,840
-----------
Food & Beverage (5.04%)
Campbell Soup Company, 5.53%, 1/7/98 1,500,000 (c) 1,485,023
Coca-Cola Company, 5.50%, 11/10/97 1,029,000 1,027,900
HJ Heinz Company, 5.55%, 11/3/97 1,583,000 1,583,000
-----------
4,095,923
-----------
Printing & Publishing (1.60%)
Gannett Company, 5.48%, 11/14/97 1,300,000 (c) 1,297,823
-----------
Retail Stores (8.37%)
Albertson's Inc., 5.49%, 11/5/97 4,000,000 3,998,780
Toys "R" Us, 5.51%, 11/3/97 2,800,000 2,800,000
-----------
6,798,780
-----------
Utilities - Electric (4.93%)
Tampa Electric Company, 5.48%, 11/3/97 4,000,000 (c) 4,000,000
-----------
Utilities - Telephone (2.46%)
Ameritech Capital Funding, 5.50%, 11/24/97 2,000,000 (c) 1,993,583
- -------------------------------------------------------------------------------
Total Commercial Paper & Other
Corporate Obligations (cost: $70,094,482) $70,094,482
- -------------------------------------------------------------------------------
See accompanying notes to investments in securities
INSTITUTIONAL PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Government & Agencies Securities (13.55%):
- -------------------------------------------------------------------------------
Federal Home Mortgage Corporation,
5.65%, 11/3/97 $11,000,000 $11,000,000
- -------------------------------------------------------------------------------
Total Government & Agencies Securities (cost: $11,000,000) 11,000,000
- -------------------------------------------------------------------------------
Total Investment in Securities (cost: $81,094,482) (b) $81,094,482
- -------------------------------------------------------------------------------
Notes to Investments in Securities:
(a) Securities are valued in accordance with procedures described in note 2 to
the financial statements.
(b) Also represents cost for federal income tax purposes.
(c) All or a portion consists of commercial paper sold within terms of a
private placement memorandum, exempt from registration under section 4(2)
of the Securities Act of 1933, as amended, and may be sold only to dealers
in that program or other "accredited investors." These securities have
been determined to be liquid under guidelines established by the Board of
Directors.
(d) All or a portion consists of short-term securities with interest rates
that reset at set intervals at rates that are based on specific market
indices. Rate shown is the effective rate on October 31, 1997.
GREAT HALL INVESTMENT FUNDS, INC.
Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A
PART C
OTHER INFORMATION
PART C
OTHER INFORMATION
Item 24 -- Financial Statements and Exhibits
(a) Audited financial statements for each of Series A through Series C
of Great Hall Investment Funds, Inc. are included as part of such series'
Statement of Additional Information.
(b) Exhibits:
1 Articles of Incorporation 1
2 Bylaws 3
3 Not applicable
4 Not applicable
5 Investment Advisory Agreement 3
6 Co-Distributor Agreement 3
7 Not applicable
8 Custodian Contract 1
9.1 Transfer Agency Agreement 2
9.2 Shareholder Account Services Agreement 3
9.3 Investment Accounting Agreement 3
10 Opinion and Consent of Faegre & Benson LLP 3
11 Consent of KPMG Peat Marwick L.L.P.
12 Not applicable
13 Letter of Investment Intent 1
14 Not applicable
15 Not applicable
16 Schedules Supporting Computations of Performance Data 1
17 Powers of Attorney 1
18.1 Officers/Directors of Dain Bosworth Incorporated
18.2 Officers/Directors of Rauscher Pierce Refsnes, Inc.
19 Code of Ethics 1
1 Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 7 to the Registration Statement filed on or about November 29,
1995.
2 Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 8 to the Registration Statement filed on or about December 1,
1996.
3 Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 9 to the Registration Statement filed on or about August 1,
1997.
Item 25 -- Persons Controlled by or Under Common Control with Registrant
- ------------------------------------------------------------------------
See the information set forth under the caption "Investment Management"
in the accompanying Prospectuses (Part A of this Registration Statement) and
under the captions "Management and Distribution Agreements" and "Directors and
Officers" in the accompanying Statements of Additional Information (Part B of
this Registration Statement).
Item 26 -- Number of Holders of Securities
- ------------------------------------------
The following table sets forth the number of holders of shares of the
Registrant as of October 31, 1997:
Title of Class Number of Shareholders
-------------- ----------------------
Series A Common Shares,
par value $.01 per share 349,458
Series B Common Shares,
par value $.01 per share 8,101
Series C Common Shares,
par value $.01 per share 8,989
Series F Common Shares,
par value $.01 per share 43
Item 27 -- Indemnification
- --------------------------
The Articles of Incorporation (Exhibit 1) and Bylaws (Exhibit 2) of the
Registrant provide that the Registrant shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to the
full extent permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided that no such indemnification may be made
if it would be in violation of Section 17(h) of the Investment Company Act of
1940, as now enacted or hereafter amended. Section 302A.521 of the Minnesota
Statutes, as now enacted, provides that a corporation shall indemnify a person
made or threatened to be made a party to a proceeding against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys'
fees and disbursements, incurred by the person in connection with the
proceeding, if, with respect to the acts or omissions of the person complained
of in the proceeding, the person: (a) has not been indemnified by another
organization for the same judgments, penalties, fines, settlements and
reasonable expenses incurred by the person in connection with the proceeding
with respect to the same acts or omissions; (b) acted in good faith;
(c) received no improper personal benefit; (d) complied with the Minnesota
Statute dealing with directors' conflicts of interest, if applicable; (e) in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful; and (f) reasonably believed that the conduct was in the
best interests of the corporation or, in certain circumstances, reasonably
believed that the conduct was not opposed to the best interests of the
corporation.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 28 -- Business and Other Connections of Investment Adviser
- ---------------------------------------------------------------
Information on the business of the Registrant's investment adviser and on
the officers and directors of the investment adviser is set forth under the
caption "Investment Management" in the accompanying Prospectuses (Part A of
this Registration Statement) and under the captions "Management and
Distribution Agreements" and "Directors and Officers" in the accompanying
Statements of Additional Information (Part B of this Registration Statement).
Item 29 -- Principal Underwriters
- ---------------------------------
(a) As set forth in the accompanying Prospectus and Statement of
Additional Information, Dain Bosworth Incorporated ("Dain") and Rauscher Pierce
Refsnes, Inc. ("Rauscher") serve as the principal underwriters of the
Registrant's shares of common stock. As of the date of this filing, neither
Dain nor Rauscher serves as a principal underwriter to any other registered
investment companies.
(b) The names, positions and offices of directors and officers of Dain
and Rauscher are set forth in Exhibits 18.1 and 18.2. The principal business
address of each director and officer of Dain is 60 South Sixth Street,
Minneapolis, Minnesota 55402, and the principal business address of each
director and executive officer of Rauscher is CityPlace, 2711 North Haskell
Avenue, Dallas, Texas 75204.
(c) Not applicable.
Item 30 -- Location of Accounts and Records
- -------------------------------------------
The custodian of the Registrant is Norwest Bank Minnesota, N.A., 90 South
Seventh Street, Minneapolis, Minnesota 55402. The dividend disbursing agent
and transfer agent of the Registrant is Rodney Square Management Corporation,
1105 North Market Street, Fifth Floor, Wilmington, Delaware 19890-0001. The
fund accounting agent of the Registrant is Investors Fiduciary Trust Company,
127 West 10th Street, Kansas City, Missouri 64105-1716. Other records will be
maintained by the Registrant at its principal offices, which are located at
60 South Sixth Street, Minneapolis, Minnesota 55402.
Item 31 -- Management Services
- ------------------------------
Not applicable.
Item 32 -- Undertakings
- -----------------------
(a) Not applicable.
(b) Not applicable.
(c) Registrant hereby undertakes to furnish to each person to whom a
prospectus of any series of the Registrant the latest Annual Report of such
series. Such Annual Report will be furnished by the Registrant without charge
upon request by any such person.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Minneapolis, and
State of Minnesota, on the 24th day of November, 1997.
GREAT HALL INVESTMENT FUNDS, INC.
By /s/ J. Scott Spiker
J. Scott Spiker
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement on Form N-1A has been signed
below by the following persons in the capacities and on the date indicated.
Name/Signature Title Date
- -------------- ----- ----
/s/ J. Scott Spiker Chief Executive Officer
J. Scott Spiker (Principal Executive Officer) November 24, 1997
/s/ Julie K. Getchell Chief Financial Officer
Julie K. Getchell (Principal Financial and November 24, 1997
Accounting Officer)
T. Geron Bell* Director
Sandra J. Hale* Director
Ron James* Director
Jay H. Wein* Director
*By /s/ Julie K. Getchell
Julie K. Getchell,
Attorney-in-Fact November 24, 1997
(Pursuant to Powers of Attorney dated August 17, 1994, filed as Exhibit 17 to
Post-Effective Amendment No. 7 to the Registration Statement on November 29,
1995.)
EXHIBIT INDEX
Exhibit Description Page
------- ----------- ----
1 Articles of Incorporation 1
2 Bylaws 3
3 Not applicable
4 Not applicable
5 Investment Advisory Agreement 3
6 Co-Distributor Agreement 3
7 Not applicable
8 Custodian Contract 1
9.1 Transfer Agency and Service Agreement 2
9.2 Shareholder Account Services Agreement 3
9.3 Investment Accounting Agreement 3
10 Opinion and Consent of
Faegre & Benson LLP 3
11 Consent of
KPMG Peat Marwick L.L.P. Filed Electronically
12 Not applicable
13 Letter of Investment Intent 1
14 Not applicable
15 Not applicable
16 Schedules Supporting Computations
of Performance Data 1
17 Powers of Attorney 1
18.1 Officers/Directors of Incorporated
Dain Bosworth Incorporated Filed Electronically
18.2 Officers/Directors of
Rauscher Pierce Refsnes, Inc. Filed Electronically
19 Code of Ethics 1
1 Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 7 to the Registration Statement filed on or about November 29,
1995.
2 Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 8 to the Registration Statement filed on or about December 1,
1996.
3 Incorporated by reference to the like numbered exhibit to Post-Effective
Amendment No. 9 to the Registration Statement filed on or about August 1,
1997.
Great Hall Investment Funds, Inc.
Registration Statement 1997
Exhibit Index
EX-99.INDEX Exhibit Index
EX-99.B11 OTH CONSNT Consent of KPMG Peat Marwick LLP
EX-99.B18.1 OFFICERS Officers/Directors of Dain Bosworth Incorporated
EX-99.B18.2 OFFICERS Officers/Directors of Rauscher Pierce Refsnes, Inc.
EX-27.1 PRIME FUND Financial Data Schedule - Prime Money Market Fund
EX-27.2 GOVT FUND Financial Data Schedule - U.S. Gov't Money Market Fund
EX-27.3 TAXFREE FUND Financial Data Schedule - Tax-Free Money Market Fund
Independent Auditors' Consent
-----------------------------
The Board of Directors
Great Hall Investment Funds, Inc.
We consent to the use of our reports included herein and the reference to our
Firm under the Heading "FINANCIAL HIGHLIGHTS" in Part A and "COUNSEL AND
AUDITORS" in Part B of the Registration Statement on Form N-1A.
KPMG Peat Marwick LLP
Minneapolis, MN
November 21, 1997
Aaker, William R.....................Associate VP/Investment Officer
Abzug, Paul A.........................................Vice President
Acord, Donald F...................................Investment Officer
Adams, A. Michael..................Vice President/Investment Officer
Adams, Terry L........................................Vice President
Adamski, Mary K....................................Managing Director
Agner, Benjamin J..................................Managing Director
Ahlbrecht, James R.................Vice President/Investment Officer
Alan, Lawrence........................................Vice President
Alber, Brett G..............................Associate Vice President
Alepra, Peter F...................................Investment Officer
Allen, Bruce G.....................Vice President/Investment Officer
Allis, Peter D.....................Vice President/Investment Officer
Altman, Clea T........................................Vice President
Alvord, Steven L..................................Investment Officer
Ament, Dan A......................................Investment Officer
Ament, Jeffrey R..................................Investment Officer
Anderson, David L..................Vice President/Investment Officer
Anderson, John A...................Vice President/Investment Officer
Anderson, Karen J........................First VP/Investment Officer
Anderson, Kurt S..................................Investment Officer
Anderson, Rodney G.......................First VP/Investment Officer
Anderson Rons, Bonnie M...............................Vice President
Andras, Rudolph P.....................................Vice President
Andreasen, Grant K................................Investment Officer
Andrews, George A....................Associate VP/Investment Officer
Appel, John C....................President & Chief Operating Officer
Archia, Adrienne J.................................Managing Director
Armour, James M......................Associate VP/Investment Officer
Arnold, Robert D...................Vice President/Investment Officer
Aronson, Gary L....................Vice President/Investment Officer
Arora, Sanjiv.........................................Vice President
Artus, Douglas E......................................Vice President
Aster, Gary A......................................Managing Director
Atkinson, Richard W..................Associate VP/Investment Officer
Augustine, James D................................Investment Officer
Auker, Randall B........................Senior VP/Investment Officer
Aymond, John C....................First VP/Inst'l Fixed Income Sales
Bachmann, Donald R...................Associate VP/Investment Officer
Bailey, Mark W.....................Vice President/Investment Officer
Bakalars, Michael J...............................Investment Officer
Baker, Michael J.........................First VP/Investment Officer
Baker, Rosalyn Wallach............................Investment Officer
Bankord, Mark A.........................Senior VP/Investment Officer
Barber Jr, Eddie C................................Investment Officer
Barnhart, William C...................................Vice President
Barr, Donald L.....................Vice President/Investment Officer
Barrington, Jr, Richard F............Associate VP/Investment Officer
Bast, Maryann E.........................Senior VP/Investment Officer
Bauchman, Nancy A.......................Senior VP/Investment Officer
Bauman, Terry P......................Associate VP/Investment Officer
Bave, John H..........................................Vice President
Bayless, Glen R......................Associate VP/Investment Officer
Bayless, Robert E.......................Senior VP/Investment Officer
Beck, Donald W....................................Investment Officer
Begun, Timothy E..................................Investment Officer
Bell, Steven H.....................................Managing Director
Belski, Brian G.......................................Vice President
Bennett, Carolyn L...................Associate VP/Investment Officer
Benson, James G....................Vice President/Investment Officer
Betts, David H.....................Vice President/Investment Officer
Bevington, Lynn A..................Vice President/Investment Officer
Bharmal, Jamaluddin R................Associate VP/Investment Officer
Bingham, Kent D....................Vice President/Investment Officer
Bird, Michael A....................................Managing Director
Bishop, James R.......................................Vice President
Black, Joel D......................................Managing Director
Blackledge, Frederick C............................Managing Director
Blanchard, Robert L................Vice President/Investment Officer
Bledsoe, Jr, Gilbert H..................Senior VP/Investment Officer
Blind, Bradley J..................................Investment Officer
Boat, Shawn C........................Associate VP/Investment Officer
Bohoskey, Charles W......................First VP/Investment Officer
Bolay, Peter F.....................Vice President/Investment Officer
Bolken, Lowell R......................................Vice President
Bond, Greg E.........................Associate VP/Investment Officer
Bongaarts, Michael V..............................Investment Officer
Bouquet, James B..................................Investment Officer
Bowen, Fred.................................Associate Vice President
Bowman, Mark B....................................Investment Officer
Brady, Eileen Samantha.............Vice President/Investment Officer
Brady, Patrick M.........................First VP/Investment Officer
Brass, Alan..............................First VP/Investment Officer
Braucht, William C......................Senior VP/Investment Officer
Brawner, Gene E..........................First VP/Investment Officer
Bredice, William T................................Investment Officer
Brenna, Mark L.....................Vice President/Investment Officer
Brenton, Craig C..................................Investment Officer
Brezovar, Frank H..................Vice President/Investment Officer
Bright, David J......................Associate VP/Investment Officer
Bromelkamp, David J................Vice President/Investment Officer
Brooke, Robert W..................Vice President/Inst'l Equity Sales
Brugger, Kent V..........................First VP/Investment Officer
Brumley, John Blair...................................Vice President
Brunkhorst, George F...............Vice President/Investment Officer
Bryans, Robert P..................................Investment Officer
Budd, Jr, Stephen E................Vice President/Investment Officer
Buelow, Jeffrey S........................First VP/Investment Officer
Bunnell, Don M.....................Vice President/Investment Officer
Buol, Christopher G................Vice President/Investment Officer
Burback, Laura A..................................Investment Officer
Burns, Scott A....................................Investment Officer
Burr, Daniel H.....................Vice President/Investment Officer
Bush, William D....................Vice President/Investment Officer
Buskirk, Brian W...................Vice President/Investment Officer
Buss, David C...............................Associate Vice President
Buss, Robert E.......................Associate VP/Investment Officer
Buttress, Paul W............................Associate Vice President
Byrd, Jr, Richard E............................Senior Vice President
Byrne, Jr, Cletus E................Vice President/Investment Officer
Byron, Linda R..............................Associate Vice President
Cable, John P........................Associate VP/Investment Officer
Calkins, Patrick R................................Investment Officer
Calta, Frank.......................................Managing Director
Calvert, Martin L..................Vice President/Investment Officer
Camarigg, Daniel S................................Investment Officer
Campbell, Crawford M..............................Investment Officer
Campbell, George F................................Investment Officer
Cardinal, David L.......................Senior VP/Investment Officer
Carlson, Bruce E........................Senior VP/Investment Officer
Carlson, Charles K.................Vice President/Investment Officer
Carlson, Kathryn M................................Investment Officer
Carpenter, Kevin D.................................Managing Director
Carrington, William T.................................Vice President
Carroll, Patrick D.................Vice President/Investment Officer
Carter, Michael A.......................Senior VP/Investment Officer
Casey, Terence J...................................Managing Director
Cavanor, Paul K.......................................Vice President
Caverly, Scott E.....................Associate VP/Investment Officer
Cavitt, Carolyn H.................................Investment Officer
Ceaser, Gregg L....................Vice President/Investment Officer
Ceja, Lynn M................................Associate Vice President
Champer, Leonard A................................Investment Officer
Chandler, Richard A...................................Vice President
Chapman, James D.........................First VP/Investment Officer
Chapman, Walter S....................Associate VP/Investment Officer
Cheney, Cynthia H...........................Associate Vice President
Chernow, Robert W..................Vice President/Investment Officer
Chester, Sheldon.........................First VP/Investment Officer
Chochrek, Suzanne M...................................Vice President
Christensen, Michael L...................First VP/Investment Officer
Cinquina, Sandra S....................................Vice President
Civello, Nelson D...........................Executive Vice President
Clark, Cary R......................Vice President/Investment Officer
Clark, Daryl P.....................Vice President/Investment Officer
Claxton, John L....................Vice President/Investment Officer
Clay, John C............................Senior VP/Investment Officer
Clinton, Richard J.................................Managing Director
Coffey, Susan E....................................Managing Director
Coffman, Gregory S....................................Vice President
Coglianese, Angelo J..............First VP/Inst'l Fixed Income Sales
Cohen, Susan L...........................First VP/Investment Officer
Coit, Dennis A.....................Vice President/Investment Officer
Colianni, Joseph G....................................Vice President
Collins, Leo T.....................Vice President/Investment Officer
Conley, Roger R......................Associate VP/Investment Officer
Conway, Thomas W...................Vice President/Investment Officer
Cooper, Robert A........................Senior VP/Investment Officer
Corn, David M......................Vice President/Investment Officer
Cory, Rebecca B......................Associate VP/Investment Officer
Cossel, Larry G......................Associate VP/Investment Officer
Courtney, Darrel G................................Investment Officer
Coverdale, Christine F.............................Managing Director
Covlin, Harold D.........................First VP/Investment Officer
Cowling, Michael D.................Vice President/Investment Officer
Coxhead, Thomas L..................Vice President/Investment Officer
Crabtree, Benjamin B...............................Managing Director
Craw, Nelson E.....................Vice President/Investment Officer
Crawford, John C...................Vice President/Investment Officer
Crawford, Richard P................Vice President/Investment Officer
Crosby, David E..........................First VP/Investment Officer
Crowe, Elizabeth E....................................Vice President
Crowell, Charles A......................Senior VP/Investment Officer
Cunniff, Jeffrey L................................Investment Officer
Dabney, Reid J........................................Vice President
Daggatt, Diane H......................................Vice President
Dagher, John B....................First VP/Inst'l Fixed Income Sales
Dagher, Matthew....................................Managing Director
Daniels, Mary M....................Vice President/Investment Officer
Danskin, James W..................................Investment Officer
Davidge, Jr, Edward C..............Vice President/Investment Officer
Davidson, Randy L.................................Investment Officer
Davis, Michael B.....................Associate VP/Investment Officer
Davis, Thomas K......................Associate VP/Investment Officer
Deeny, Patricia...................................Investment Officer
Delzell, Gerald G........................First VP/Investment Officer
Denner, Stephen S.......................Senior VP/Investment Officer
Derose, Christine A...............................Investment Officer
Dewalt, Stephen R..................Vice President/Investment Officer
Dickey, Robert F...................................Managing Director
Dickson, Michael J................................Investment Officer
Dietz, Robert W...................................Investment Officer
Diley, John Jay.......................................Vice President
Diloreto, Lucio J........................First VP/Investment Officer
Discher, Brett S......................................Vice President
Dixon, Brenda K......................Associate VP/Investment Officer
Dobesh, Gregory T....................Associate VP/Investment Officer
Dockendorff, John G...................................Vice President
Doerr, Jeffrey L...................Vice President/Investment Officer
Domgard, James R.....................Associate VP/Investment Officer
Dorr, Philip M........................................Vice President
Dorsey, Michael A.....................................Vice President
Dorweiler, Robert P...................................Vice President
Dow, Philip S.............................Managing Director/Director
Drake, Harry S...........................First VP/Investment Officer
Drexel, H. Grayson.................Vice President/Investment Officer
Drexler, Stephen J.............................Senior Vice President
Drummond, Michael S............................Senior Vice President
Duke, Jonathan N......................................Vice President
Dumphy, Thomas A........................Senior VP/Investment Officer
Dunn, Leonard E..........................First VP/Investment Officer
Dunning, Kyle L....................Vice President/Investment Officer
Dutcher, James D........................Senior VP/Investment Officer
Dutton, Michael E..................Vice President/Investment Officer
Dykstra, Jack E...................................Investment Officer
Eckert, James O....................Vice President/Investment Officer
Eder, Donald L..........................Senior VP/Investment Officer
Edmiston, Robert B....................................Vice President
Egan, Francis X..........................First VP/Investment Officer
Eggebrecht, Donald R..............................Investment Officer
Eisenberg, Noah..........................First VP/Investment Officer
Elliott, Patrick D.................Vice President/Investment Officer
Ellis, Sally A.....................Vice President/Investment Officer
Ellsworth, Brian A.......................First VP/Investment Officer
Elmore, Jennifer L.................Vice President/Investment Officer
Elston, Mark J..........................Senior VP/Investment Officer
Elvord, James E....................Vice President/Investment Officer
Erickson, Duane A...........................Associate Vice President
Ernst, Randy F.....................Vice President/Investment Officer
Ernst, Ronald R..........................First VP/Investment Officer
Erzar, Thomas B....................Vice President/Investment Officer
Eslinger, Carol S.....................................Vice President
Etteldorf, A. Robert........................Associate Vice President
Etter, C F.........................Vice President/Investment Officer
Eubank, George B.....................Associate VP/Investment Officer
Evans, David J..........................Senior VP/Investment Officer
Fagerburg, Michael A...............Vice President/Investment Officer
Fahnhorst, Keith V.................Vice President/Investment Officer
Fahrer, Robert F...................Vice President/Investment Officer
Faler, Mark H........................Associate VP/Investment Officer
Falk, Robert A..........................Senior VP/Investment Officer
Fallon, Jr, Francis X.....................Managing Director/Director
Fanelli, Jr, Daniel G....................First VP/Investment Officer
Fanning, Brian B...................Vice President/Investment Officer
Fanning, Kevin P...................Vice President/Investment Officer
Farni, Sr, Jeffrey L...............Vice President/Investment Officer
Farr, Michael T....................Vice President/Investment Officer
Fedje, Noel I............................First VP/Investment Officer
Felicetta, Lee..........................Senior VP/Investment Officer
Festa, Michael..............Vice President/Inst'l Fixed Income Sales
Fiacco, Ronald J.....................Associate VP/Investment Officer
Finucan, Roger J...................Vice President/Investment Officer
Fisher, Harrison...............................Senior Vice President
Fisher, John L.....................Vice President/Investment Officer
Fitzpatrick, Joseph B.................................Vice President
Flaherty, Jr, Joseph W.............................Managing Director
Flake, Carla G........................................Vice President
Fleck, Brian S....................................Investment Officer
Flesch, Daniel E...................Vice President/Investment Officer
Foerster, III, Harry Robert...........................Vice President
Folino, Alison.....................................Managing Director
Ford, William D....................Vice President/Investment Officer
Foster, Elizabeth A................Vice President/Investment Officer
Frederick, Melvin L......................First VP/Investment Officer
Frederick, Mitchell S................Associate VP/Investment Officer
Freeman, Paul I.........................Senior VP/Investment Officer
Frey, William T...................................Investment Officer
Friar, James P...........................First VP/Investment Officer
Friedman, George E.................Vice President/Investment Officer
Froelich, Jr, Francis J............Vice President/Investment Officer
Fuhr, Lisa A..........................................Vice President
Fuller, Charles L....................Associate VP/Investment Officer
Fullerton, Roger S...................Associate VP/Investment Officer
Gabbert, Roger D.........................First VP/Investment Officer
Gabel, Thomas E.........................First VP/Inst'l Equity Sales
Gall, J. Charles...................Vice President/Investment Officer
Garcia, Charles W...........................Associate Vice President
Garlock, John H....................Vice President/Investment Officer
Gasher, Douglas S.................First VP/Inst'l Fixed Income Sales
Gates, Thomas G......................Associate VP/Investment Officer
Geenen, John T.....................Vice President/Investment Officer
Gendler, Nancy J......................................Vice President
Gesten, Richard W....................Associate VP/Investment Officer
Gifford, Ann E........................................Vice President
Gillilan, Michael S............................Senior Vice President
Gilmore, Keith R........................Senior VP/Investment Officer
Givens, John W.....................Vice President/Investment Officer
Glassburn, Richard B...............Vice President/Investment Officer
Gleason, James E.....................Associate VP/Investment Officer
Glowacki, Peter J....................Associate VP/Investment Officer
Gode, III, Orrin J.................Vice President/Investment Officer
Goetz, Leon J.........................................Vice President
Goff, Janel M.....................................Investment Officer
Goon, Mary M......................................Investment Officer
Gorsky, Dale L.....................Vice President/Investment Officer
Goss Jr, William R....................................Vice President
Gould, Timothy D...................Vice President/Investment Officer
Graves, Gregory B......................Principal - Corporate Finance
Gray, Sally J........................Associate VP/Investment Officer
Greene, G. Michael.................Vice President/Investment Officer
Greenfield, John N................................Investment Officer
Greenway, Charles E................Vice President/Investment Officer
Gribben, Joseph P....................Associate VP/Investment Officer
Griggs, Elbert C..................................Investment Officer
Griggs, John H....................................Investment Officer
Grutzner, Paul E..................................Investment Officer
Gurtcheff, Glenn A....................................Vice President
Hackett, John R..........................First VP/Investment Officer
Hackl, Kenneth J........................Senior VP/Investment Officer
Halbert, Parice C.....................................Vice President
Hale, Kelly I......................Vice President/Investment Officer
Hall, Timothy R......................Associate VP/Investment Officer
Hallin, George G.........................First VP/Investment Officer
Halstenson, Thomas J...............Vice President/Investment Officer
Halvorson, Robert J...................................Vice President
Hamlin, Robert J...................Vice President/Investment Officer
Hammer, Kenneth M..................Vice President/Investment Officer
Hanno, Dennis R....................Vice President/Investment Officer
Hansen, Brian C.............................Associate Vice President
Hansen, Gary J.....................................Managing Director
Hansen, Marcia L......................................Vice President
Hansen, Robert S.....................Associate VP/Investment Officer
Hanses, Barry......................Vice President/Investment Officer
Hanson, Sterling M...................Associate VP/Investment Officer
Happel, William R.................................Investment Officer
Hardwick, Gary W.....................Associate VP/Investment Officer
Harris, Jonathan.....................Associate VP/Investment Officer
Harris, Thomas D.....................Associate VP/Investment Officer
Hart, George C.....................Vice President/Investment Officer
Hartsough, Russell L.................Associate VP/Investment Officer
Hartung, Kenneth A................................Investment Officer
Haskell, II, Charles A.............Vice President/Investment Officer
Hasselquist, Peter L...............................Managing Director
Hassenflu, Mark E....................Associate VP/Investment Officer
Hauxwell, Stanley A................Vice President/Investment Officer
Hawke, Leah.................................Associate Vice President
Hayden, Gary F..........................Senior VP/Investment Officer
Hayes, Lawrence S....................Associate VP/Investment Officer
Hearnen, Bonnie J...........................Associate Vice President
Heck, Richard A......................Associate VP/Investment Officer
Heeren, David C......................Associate VP/Investment Officer
Heeren, Mary Ann...................Vice President/Investment Officer
Heiam, Albert E....................Vice President/Investment Officer
Heintz, Karen B.............................Associate Vice President
Heise, Russell B...............................Senior Vice President
Henderson, Linda L........................Managing Director/Director
Henry, Alan J......................Vice President/Investment Officer
Hensel, Robert A............................Assistant Vice President
Hering, Donald F...................Vice President/Investment Officer
Hert, Paul T.......................Vice President/Investment Officer
Herzberg, Mary A...................Vice President/Investment Officer
Hester, Wayne A.........................Senior VP/Investment Officer
Heupel, David E.............................Associate Vice President
Heyes, Edward K....................Vice President/Investment Officer
Hickman, Thomas J.................................Investment Officer
Higgins, J. Scott.................................Investment Officer
Hildebrand, Robert J..................................Vice President
Hildreth, Ildiko A....................................Vice President
Hill, Steven R.....................Vice President/Investment Officer
Hillman, Philip E..................Vice President/Investment Officer
Hills, Darrick L......................................Vice President
Himelright, Jr, Loring K................Senior VP/Investment Officer
Hinson, Richard C.......................Senior VP/Investment Officer
Hnastchenko, John P................Vice President/Investment Officer
Hoaglund, Elizabeth B.................................Vice President
Hodder, Edwin C....................Vice President/Investment Officer
Hoden, Thomas E...................VP/Investment Officer/Res. Manager
Hoebelheinrich, Gary L.............Vice President/Investment Officer
Hoelscher, Harold G.....................Senior VP/Investment Officer
Hoffman, Hugh J.......................................Vice President
Hogan, Shirley M..................First VP/Inst'l Fixed Income Sales
Hogue, Mary S...............................Associate Vice President
Hogue, Richard C...................Vice President/Investment Officer
Holderman, Charles J....................Senior VP/Investment Officer
Holman, Harry P..........................First VP/Investment Officer
Holmes, Jr, William B..............Vice President/Investment Officer
Holstead, George B....................................Vice President
Holtz, Lawrence C..............................Senior Vice President
Holzrichter, Daniel J.............................Investment Officer
Honl, Mark D................................Associate Vice President
Horkey, Richard W.................................Investment Officer
Horn, Robert K.....................Vice President/Investment Officer
Hostettler, Diane M...................................Vice President
Hovany, George E...................Vice President/Investment Officer
Howard, Paul S....................................Investment Officer
Hoy, Kathryn J..............................Associate Vice President
Hubick, Anthony J..................Vice President/Investment Officer
Hughes, John P........................................Vice President
Hughes, Paul V.....................................Managing Director
Huntington, Eugene F..................................Vice President
Hurst, Donna M........................................Vice President
Hyde, Dawn I...................................Senior Vice President
Iancu, Sorin.......................Vice President/Investment Officer
Idelkope, Gregory P..................Associate VP/Investment Officer
Ing, Joel C.................................Associate Vice President
Ingalls, Margaret M................Vice President/Investment Officer
Ingram, Charles R....................Associate VP/Investment Officer
Isaacson, Kim D....................Vice President/Investment Officer
Ivankoe, John.........................................Vice President
Iverson, Marvin D.................................Investment Officer
Jackson, Charles M....................................Vice President
Jacobs, Stephen E.....................................Vice President
James, Bryce A.....................Vice President/Investment Officer
Jansson, James R........................Senior VP/Investment Officer
Jennings, David B..................................Managing Director
Jensen, Jay A......................Vice President/Investment Officer
Jimmerson, Keith O.................Vice President/Investment Officer
Joas, Paul K............................Senior VP/Investment Officer
Johns, Stuart G...................................Investment Officer
Johnson, Angela C...........................Associate Vice President
Johnson, Bruce W......................................Vice President
Johnson, Charles H...................Associate VP/Investment Officer
Johnson, James A...................Vice President/Investment Officer
Johnson, Kelly J...................................Managing Director
Johnson, Nancy A............................Associate Vice President
Johnson, P. Scott....................Associate VP/Investment Officer
Johnson, Scott R..................................Investment Officer
Johnson, Tamara A.....................................Vice President
Johnson, Thomas F.................................Investment Officer
Johnson, Jr, Restor E..............................Managing Director
Johnson-Collins, Cinda L..........................Investment Officer
Johnston, James T....................Associate VP/Investment Officer
Jones, Milton Stephens.............Vice President/Investment Officer
Jones, Roger C.....................................Managing Director
Jordan, Jeffrey D..................Vice President/Investment Officer
Jordan, Jr, Thomas R...............Vice President/Investment Officer
Josephsen, Tom.....................Vice President/Investment Officer
Josephson, Wayne A....................................Vice President
Jussila, William A...................Associate VP/Investment Officer
Kailing, Penelope W.....................Senior VP/Investment Officer
Kaiser, Harold L.........................First VP/Investment Officer
Kalivas, Christine S..................................Vice President
Kalland, James A..................................Investment Officer
Kamrowski, Kevin J...................Associate VP/Investment Officer
Kappes, Jon M.....................................Investment Officer
Kappes, Kenneth J........................First VP/Investment Officer
Karlman, Robert L..................Vice President/Investment Officer
Kassem, Leyla G.......................................Vice President
Kauth, Kenneth C.....................Associate VP/Investment Officer
Kava-Dolan, Cecelia................Vice President/Investment Officer
Kavanagh, Michael R............................Senior Vice President
Kaye, Howard L.....................Vice President/Investment Officer
Kazak, Joseph L.............................Associate Vice President
Kearney, Jr, Norman L..............Vice President/Investment Officer
Keene, David.......................Vice President/Investment Officer
Keith, Richard L.....................Associate VP/Investment Officer
Keller, Richard A..................Vice President/Investment Officer
Kellett, Scott B.....................Associate VP/Investment Officer
Kelley, Frank E.........................Senior VP/Investment Officer
Kelley, Gregory G.......................Senior VP/Investment Officer
Kelley, Richard W.......................Senior VP/Investment Officer
Kelly, James E.....................Vice President/Investment Officer
Kelly, Mark D......................Vice President/Investment Officer
Kennedy, Mary Ann.................................Investment Officer
Kennedy, Patrick G.................Vice President/Investment Officer
Kenny, Edward P......................Associate VP/Investment Officer
Kensinger, Jr, Don G..............................Investment Officer
Kenyon, Henry David......................First VP/Investment Officer
Keppler, Anthony J................................Investment Officer
Kerber, William J.......................Senior VP/Investment Officer
Kermeen, Deborah J....................................Vice President
Kerr, James P..................................Senior Vice President
Ketcher, Richard L...................Associate VP/Investment Officer
Ketelsleger, Kevin..............................First Vice President
Keysser, Ralf Donald...............................Managing Director
Khouri, Debra S....................Vice President/Investment Officer
Kidd, William L.........................Senior VP/Investment Officer
King, Al...........................Vice President/Investment Officer
King, John J...................................Senior Vice President
Kinsella, John P...................Vice President/Investment Officer
Kinsey, Kenneth K..................Vice President/Investment Officer
Kirkeng, Guri.........................................Vice President
Klein, David J...........................First VP/Investment Officer
Kleinschmidt, Gary A...............Vice President/Investment Officer
Klipstein, Patrick B..............................Investment Officer
Kniffin, Jr, Ogden.................................Managing Director
Knittel, Robert C..................Vice President/Investment Officer
Knorring, James P.................First VP/Inst'l Fixed Income Sales
Knotz, Susan K..............................Associate Vice President
Knudson, L. Roger....................Associate VP/Investment Officer
Koenig, Lynn R.....................Vice President/Investment Officer
Koenigs, Raymond R...................Associate VP/Investment Officer
Kolb, Daniel J.......................Associate VP/Investment Officer
Koosmann, Nancy J...........................Associate Vice President
Kougl, Maureen A.....................Associate VP/Investment Officer
Kozloff, Joseph H..............................Senior Vice President
Krauss, Richard A.....................................Vice President
Krech, Richard R......................................Vice President
Krivacs, John E...................................Investment Officer
Kroenke, Michael A...................Associate VP/Investment Officer
Krohn, William E...................Vice President/Investment Officer
Krum, Kevin.................................Associate Vice President
Kuechenmeister, Daniel P..............................Vice President
Kuehn, Gregory J..................................Investment Officer
Kurimay, Joseph W..................Vice President/Investment Officer
LaVine, Michael J....................Associate VP/Investment Officer
Laabs, Janelle S............................Associate Vice President
Laetz, Kurt R.....................................Investment Officer
Lainson, Jr, John J................Vice President/Investment Officer
Lambert, Karl R....................Vice President/Investment Officer
Lamson, Dennis R...................Vice President/Investment Officer
Lane, Alfred W..........................Senior VP/Investment Officer
Langley, Robert W.................................Investment Officer
Lankford, Philip F....................................Vice President
Lanzon, William P..................................Managing Director
Larkin, Dean R.....................Vice President/Investment Officer
Larsen, John E.....................Vice President/Investment Officer
Larson, Daniel L...................................Managing Director
Larson, Gregory A...........................Associate Vice President
Larson, Kenneth R...........................Associate Vice President
Larson, Kurt D....................................Investment Officer
Laube, David D.....................Vice President/Investment Officer
Lawrence, Christopher J...............................Vice President
Lawrence, Gordon D.......................First VP/Investment Officer
Lawson, George A...................Vice President/Investment Officer
Leach, Jr, Robert A..................Associate VP/Investment Officer
Leaverton, Karl V..............................Senior Vice President
Leavitt, Crayton D.................Vice President/Investment Officer
Lee, Steven C........................Associate VP/Investment Officer
Lehr, Leon........................................Investment Officer
Lemley, John.......................................Managing Director
Leonard, Bryan W..................First VP/Inst'l Fixed Income Sales
Leslie, Mark T........................................Vice President
Letheby, Michael J...................Associate VP/Investment Officer
Levine, Robert G...................Vice President/Investment Officer
Levy, Mark D.......................Vice President/Investment Officer
Lewis, Richard J...................Vice President/Investment Officer
Liston, Larry G....................Vice President/Investment Officer
Litt, Larry N........................Associate VP/Investment Officer
Logue, Edward J.......................................Vice President
Longsdorf, Richard M...............Vice President/Investment Officer
Lorence, Drake W...................Vice President/Investment Officer
Lukk, Ott..........................Vice President/Investment Officer
Lundquist, Steven W..................Associate VP/Investment Officer
Lunsford, Thomas R..............................First Vice President
Lutiger, James P...................Vice President/Investment Officer
Macpherson, Gary K......................Senior VP/Investment Officer
Madsen, Earl K..........................Senior VP/Investment Officer
Madsen, John K.....................Vice President/Investment Officer
Madson, Jennifer L....................................Vice President
Maertens, Raymond J...............................Investment Officer
Mague, William W............................Associate Vice President
Makela, Robert P..................................Investment Officer
Manna, Mary Ann M...........................Associate Vice President
Manno, Micheal P...................Vice President/Investment Officer
Manske, Jr, Stanley R...................Senior VP/Investment Officer
Marcotte, Daniel B.................................Managing Director
Marden, Dorothy A.................................Investment Officer
Marek, Joseph R...................................Investment Officer
Marks, Bennett E...................Vice President/Investment Officer
Marshall, James A.....................................Vice President
Martin, Matthew E....................Associate VP/Investment Officer
Mataic, Daniel J............................Associate Vice President
Mattson, Daniel E.................................Investment Officer
Mayerle, John P....................Vice President/Investment Officer
McBride, Joseph M..................Vice President/Investment Officer
McCague, Ann C........................................Vice President
McCallum, Maureen C...................................Vice President
McClellan, Dale B.....................................Vice President
McCormick, John C........................First VP/Investment Officer
McCormick, Michael S.................Associate VP/Investment Officer
McCoy, Harry A..........................Senior VP/Investment Officer
McDow, Jo Layne....................Vice President/Investment Officer
McDowell, William L................Vice President/Investment Officer
McEvoy, Shirley A..................Vice President/Investment Officer
McFarland, Devon M................................Investment Officer
McFarland, Richard D...................................Vice Chairman
McFarlin, Jeffrey C...............................Investment Officer
McGraw, Knowel K.....................Associate VP/Investment Officer
McGuire, Francine J...............................Investment Officer
McGuire, Tom W...........................First VP/Investment Officer
McHugh, William B.............Assistant VP/Inst'l Fixed Income Sales
McKellin, David W....................Associate VP/Investment Officer
McKenna, James D...................Vice President/Investment Officer
McKenzie, Kenneth P...............................Investment Officer
McLaughlin, Casey P..................Associate VP/Investment Officer
McNeil, Michael L....................Associate VP/Investment Officer
McPhail, Dan C.....................Vice President/Investment Officer
McQuaid, Michael M.................Vice President/Investment Officer
Mead, Don R..........................Associate VP/Investment Officer
Means, IV, James A.................Vice President/Investment Officer
Medved, James J...................................Investment Officer
Medved, Jerry C....................Vice President/Investment Officer
Mehrer, Roger L..........................First VP/Investment Officer
Melanson, Richard E..................Associate VP/Investment Officer
Melton, Donald R........................Senior VP/Investment Officer
Mendenhall, James P................Vice President/Investment Officer
Merback, Michael C................................Investment Officer
Merriam, Theodore D...................................Vice President
Merrill, Rhett W......................................Vice President
Metz, John W.........................Associate VP/Investment Officer
Metz, Richard T...................................Investment Officer
Meyer, Peggy L..............................Associate Vice President
Miles, Peter B...........................First VP/Investment Officer
Miller, James E......................Associate VP/Investment Officer
Miller, Joseph M.....................Associate VP/Investment Officer
Miller, Leo G.....................................Investment Officer
Misner, Jr, John W.................Vice President/Investment Officer
Mistak, Thomas L..................................Investment Officer
Moen, Phyllis E..........................First VP/Investment Officer
Mohs, Robert...............Senior VP/Investment Officer/Res. Manager
Mooney, Anthony J..................Vice President/Investment Officer
Mooney, Richard A.......................Senior VP/Investment Officer
Moore, Theodore H..................Vice President/Investment Officer
Morgan, Mark A........................................Vice President
Mortimer, Peter S..................Vice President/Investment Officer
Mortimer, Jr, Robert T.............Vice President/Investment Officer
Mueller, Craig P......................................Vice President
Mueller, Frederick B...............Vice President/Investment Officer
Mueller, Patricia A..................Associate VP/Investment Officer
Mullen, Christopher M..............Vice President/Investment Officer
Munro, Charles Blake...............Vice President/Investment Officer
Murdock, Guy B.....................................Managing Director
Murphy, James J.........................Senior VP/Investment Officer
Murphy, Kathleen R....................................Vice President
Murphy, Patrick J.................................Investment Officer
Murray, Dennis J...................................Managing Director
Myers, David E..........................Senior VP/Investment Officer
Naedler, Henry W...................Vice President/Investment Officer
Nakamura, Theodore T...............Vice President/Investment Officer
Nash, Charles F....................Vice President/Investment Officer
Naslund, Randolph W...............................Investment Officer
Nelson, Ann N...............................Associate Vice President
Nelson, David A......................Associate VP/Investment Officer
Nelson, Dennis E......................................Vice President
Nelson, Terry G...................................Investment Officer
Netzel, Thomas C..................First VP/Inst'l Fixed Income Sales
Niebler, Gregory A.................Vice President/Investment Officer
Nielson, Thomas E..................Vice President/Investment Officer
Nodler, Richard E....................Associate VP/Investment Officer
Nordstrom, Jonathan W.................................Vice President
Norris, Rocky J....................Vice President/Investment Officer
Novak, Richard S............................Associate Vice President
Nowicki, John M....................Vice President/Investment Officer
Nunes, Jr, Arthur G......................First VP/Investment Officer
O'Brien, Gordon A.................................Investment Officer
O'Connor, Gregory D...................................Vice President
O'Donnell, Steven P...................................Vice President
O'Leary, Richard M....................................Vice President
O'Malley, John C............................Executive Vice President
O'Meara, Jr, Michael J...............Associate VP/Investment Officer
Ochsenhirt, Michael C.........Assistant VP/Inst'l Fixed Income Sales
Odell, Charles K.....................Associate VP/Investment Officer
Ogiela, Gregory A..................Vice President/Investment Officer
Olanie, Eric F...........................First VP/Investment Officer
Olsen, Evan P......................................Managing Director
Olsen, Kristian A........................First VP/Investment Officer
Olson, Craig W.......................Associate VP/Investment Officer
Olson, Martin C..........................First VP/Investment Officer
Oltrogge, Gary R.....................Associate VP/Investment Officer
Orgel, Mark A...........................Senior VP/Investment Officer
Orrico, Brian J...................................Investment Officer
Owen, Faith R.........................................Vice President
Packman, Jeffrey S.................Vice President/Investment Officer
Paff, Andrea J....................................Investment Officer
Parks, William B........................Senior VP/Investment Officer
Parrott, Geraldine M...............Vice President/Investment Officer
Parsons, H. Allen.......................Senior VP/Investment Officer
Pates, John R.........................................Vice President
Patrick, Sandra S.................................Investment Officer
Patterson, James F...................Associate VP/Investment Officer
Patton, Rick L.....................Vice President/Investment Officer
Paul, Marty E......................................Managing Director
Pavish, Jessica E....................Associate VP/Investment Officer
Pawlak, Gregory S.......................Senior VP/Investment Officer
Pease, Susan R....................First VP/Inst'l Fixed Income Sales
Peck, Wendell C......................Associate VP/Investment Officer
Peckumn, Douglas G...................Associate VP/Investment Officer
Pedersen, Janie S...........................Associate Vice President
Pedersen, Leonard S................Vice President/Investment Officer
Pedersen, Richard A.....................Senior VP/Investment Officer
Pedersen, Richard J.......................Managing Director/Director
Pederson, Sandra F....................................Vice President
Penner, Cynthia L.....................................Vice President
Perrine, Jeffery A....................................Vice President
Perry, Stuart J.......................................Vice President
Peters, Daniel N...................Vice President/Investment Officer
Peterson, Gary W.........................First VP/Investment Officer
Peterson, Gregory D................Vice President/Investment Officer
Peterson, Judd M.....................Associate VP/Investment Officer
Petras, Richard G.................................Investment Officer
Pettit, Lynn R...........................First VP/Investment Officer
Peyton, John W..........................Senior VP/Investment Officer
Peyton, Robert J...................Vice President/Investment Officer
Phillips, Thomas W.................Vice President/Investment Officer
Pieh, Sam................................First VP/Investment Officer
Pietila, Bradley M................................Investment Officer
Pihaly, James R.............................Associate Vice President
Pluckhahn, Charles W...............................Managing Director
Pokela, Barbara L.....................................Vice President
Pollock, David M........................Senior VP/Investment Officer
Polydoros, Nick J.......................Senior VP/Investment Officer
Porasik, Jeffrey M...................Associate VP/Investment Officer
Posner, Robert L.........................First VP/Investment Officer
Possis, Milton C...................Vice President/Investment Officer
Pruner, Richard G........................First VP/Investment Officer
Psyhogeos, George J.........Vice President/Inst'l Fixed Income Sales
Pugsley, Paul F.............................Associate Vice President
Quade, Steven A...................................Investment Officer
Quaid, Steven P...................................Investment Officer
Qualley, Gary J....................Vice President/Investment Officer
Quello, John M..........................Senior VP/Investment Officer
Quigley, Thomas L....................Associate VP/Investment Officer
Quinn, Andrew L...................................Investment Officer
Quinn, Anne M.........................................Vice President
Quinn, David M....................................Investment Officer
Radtke, David F.........................Senior VP/Investment Officer
Radtke, Thomas J..................................Investment Officer
Rae, Robert T...........................Senior VP/Investment Officer
Rafti, William R...................Vice President/Investment Officer
Ramos, Dean A.........................................Vice President
Ranals, James E....................Vice President/Investment Officer
Randall, Barry G...................Vice President/Investment Officer
Randall, Barry W......................................Vice President
Rasmussen, Bjarne T..................Associate VP/Investment Officer
Ray, Richard C.......................Associate VP/Investment Officer
Raymond, Diane L............................Associate Vice President
Reagan, Brian J....................................Managing Director
Redding, William G...................Associate VP/Investment Officer
Redmond, Thomas P..................Vice President/Investment Officer
Ree, Scott M..........................................Vice President
Reilly, John D.....................Vice President/Investment Officer
Reinkensmeyer, Donald C...........................Investment Officer
Renn, James F.....................................Investment Officer
Reser, Alan L......................Vice President/Investment Officer
Rewey, James O..........................Senior VP/Investment Officer
Richardson, Candace L.......................Associate Vice President
Richardson, Marcia L........................Associate Vice President
Richter, Arthur H..................Vice President/Investment Officer
Rickart, Douglas L...................Associate VP/Investment Officer
Rickman, Steven R.....................................Vice President
Riggio, Robert C......................................Vice President
Ring, Ward D..........................................Vice President
Ringgaard, Todd J.................................Investment Officer
Ringsmuth, Dennis M.....................Senior VP/Investment Officer
Rippeteau, Mark E....................Associate VP/Investment Officer
Rippy, Robert E......................Associate VP/Investment Officer
Risher, Steve O...................................Investment Officer
Robertson, William B...............Vice President/Investment Officer
Robinson, William S................Vice President/Investment Officer
Robitaille, Thomas W.....................First VP/Investment Officer
Roder, Jonathan M..................Vice President/Investment Officer
Roed, Clarence Fred......................First VP/Investment Officer
Rogers, Michael K.................................Investment Officer
Romero, John A.......................Associate VP/Investment Officer
Rooney, Michael R.....................................Vice President
Ross, Michael J....................................Managing Director
Ross, William F....................Vice President/Investment Officer
Rosso, William J...............................Senior Vice President
Rupert, Gregory J.................................Investment Officer
Rush, Barrie J.....................Vice President/Investment Officer
Rustad, James W......................Associate VP/Investment Officer
Rutledge, Andrew S..........................Associate Vice President
Ryan, Margaret M......................................Vice President
Salzman, Dennis G..................Vice President/Investment Officer
Sammons, Greg P................................Senior Vice President
Santos, Stephen W..................Vice President/Investment Officer
Sawyer, Robert I...................Vice President/Investment Officer
Scherer, Rachael M.................................Managing Director
Schmidt, Roger J........................Senior VP/Investment Officer
Schneebeck, Robert J...............Vice President/Investment Officer
Schonebaum, David R................Vice President/Investment Officer
Schor, Stephen J..................................Investment Officer
Schwartz, David K.................................Investment Officer
Sebastian, John V..............................Senior Vice President
Seitz, Thomas G.......................................Vice President
Sergeant, James C.....................................Vice President
Sexe, Douglas E...................................Investment Officer
Seyler, James R....................Vice President/Investment Officer
Shaffer, William J.................Vice President/Investment Officer
Shanahan, Brendan.....................................Vice President
Shannon, Robert S.................................Investment Officer
Shantz, Deborah C.....................................Vice President
Sharma, Shree N....................Vice President/Investment Officer
Sharp, Terrence L..................Vice President/Investment Officer
Shaughnessy, Robert M..............Vice President/Investment Officer
Shaw, Jr, Fred D........................Senior VP/Investment Officer
Shoemaker, Jr, Charles J...........Vice President/Investment Officer
Siebold, Thomas H.................................Investment Officer
Siebrasse, Daniel H..................Associate VP/Investment Officer
Siegler, John C................................Senior Vice President
Sikich, Joseph D...................Vice President/Investment Officer
Silfen, Howard C...................................Managing Director
Simmons, Barbara N.................Vice President/Investment Officer
Simpson, Carol D..................................Investment Officer
Sinclair, Charles W................Vice President/Investment Officer
Sinkula, John A.........................Senior VP/Investment Officer
Sire, Wendy S........................Associate VP/Investment Officer
Skillestad, Robert A...............Vice President/Investment Officer
Slaasted, Robert J................................Investment Officer
Slichter, Kenneth C................................Managing Director
Sloan, Owen A......................Vice President/Investment Officer
Smegal, Bradley T..................Vice President/Investment Officer
Smith, Bradley D.....................Associate VP/Investment Officer
Smith, Bruce E.....................................Managing Director
Smith, David W.....................Vice President/Investment Officer
Smith, Delbert E........................Senior VP/Investment Officer
Smith, Geoffrey B.....................................Vice President
Smith, Graham F...................................Investment Officer
Smith, Grant D.....................Vice President/Investment Officer
Smith, Rodney F.......................................Vice President
Smith, Ronald W....................Vice President/Investment Officer
Smith, Stephen M......................................Vice President
Soderlund, John R..................Vice President/Investment Officer
Sogge, David B.................................Senior Vice President
Solon, Vlasie...........................Senior VP/Investment Officer
Sorenson, Mary A..................................Investment Officer
Souders, William R................First VP/Inst'l Fixed Income Sales
South, Donald R....................Vice President/Investment Officer
Spavin, Charles H....................Associate VP/Investment Officer
Spencer, Brad L...................................Investment Officer
Spencer, Carla J..................................Investment Officer
Spencer, Michael M...................Associate VP/Investment Officer
Spheeris, Leon G...................Vice President/Investment Officer
Spurrier, John E........................Senior VP/Investment Officer
Stano, John P......................Vice President/Investment Officer
Stebbins, Kirk D......................................Vice President
Stehr, Rollyn D...................................Investment Officer
Stengel, John R.........................Senior VP/Investment Officer
Stoner, Jr, Paul A.................Vice President/Investment Officer
Storey, Jr, Benjamin M..................Senior VP/Investment Officer
Stotts, Thomas J......................................Vice President
Stoudt, Dana C....................................Investment Officer
Stover, Allen L.........................Senior VP/Investment Officer
Stradt, Michael L..................Vice President/Investment Officer
Straight, Thomas G.................Vice President/Investment Officer
Stribling, Richard B..............................Investment Officer
Strom, Kevin L.....................................Managing Director
Styrbicki, John M.................First VP/Inst'l Fixed Income Sales
Sucharski, Thomas J................Vice President/Investment Officer
Sullivan, Daniel J................................Investment Officer
Sullivan, Michael G...................................Vice President
Sullivan, Patrick T...................................Vice President
Sullivan, Thomas E.................................Managing Director
Sullivan, Thomas M.................................Managing Director
Sumners, Mary S.......................................Vice President
Surbeck, Richard J......................Senior VP/Investment Officer
Svendsen, G. Rolf.....................................Vice President
Swanson, Cynthia J.................Vice President/Investment Officer
Swanson, Roger W...................Vice President/Investment Officer
Swart, Keith D........................................Vice President
Sweet, Catherine L....................................Vice President
Sweno, Jeffrey G...................Vice President/Investment Officer
Sykes, Susan M....................................Investment Officer
Takemura, Stephen M..................Associate VP/Investment Officer
Talt, Sandra L..............................Associate Vice President
Tate, Carlene R...............Assistant VP/Inst'l Fixed Income Sales
Tejera, Richard J..................................Managing Director
Theiss, Randy L.......................................Vice President
Thickens, David W...........................Associate Vice President
Thiele, Richard W....................Associate VP/Investment Officer
Thomas, Steven J.....................Associate VP/Investment Officer
Thompson, John G.........................First VP/Investment Officer
Thompson, John L...................Vice President/Investment Officer
Thornton, Michael J................Vice President/Investment Officer
Tierney, Jr, Eugene W..............Vice President/Investment Officer
Tobin, Cathleen B..............................Senior Vice President
Towers, John R........................................Vice President
Trafton, R. Michael..................Associate VP/Investment Officer
Trageser, David P.....................................Vice President
Trammel, Susan S............................Associate Vice President
Trinen, Michael F..................Vice President/Investment Officer
Tripp, Thomas G....................Vice President/Investment Officer
Tschetter, Ronald A.........................Executive Vice President
Turnquist, Edwin G................................Investment Officer
Unterseher, Loren A...................................Vice President
Upin, David T......................Vice President/Investment Officer
Utley, James T.....................Vice President/Investment Officer
Van Amen, Martin J...................Associate VP/Investment Officer
Van Note, Gordon F....................................Vice President
Vanden Heuvel, Matthew J..........................Investment Officer
Vendetti, Dino J......................................Vice President
Vinson, Curtis R..................................Investment Officer
Vogel, Charles S........................First VP/Inst'l Equity Sales
Vogel, Dale J......................Vice President/Investment Officer
Volk, Joan L................................Associate Vice President
Wade, Eugene R.....................Vice President/Investment Officer
Waits, Dennis N...................................Investment Officer
Wall, Curtis L...........................First VP/Investment Officer
Wallstein, Gary L..................Vice President/Investment Officer
Walter, Thomas T..................................Investment Officer
Walters, Lawrence C...............................Investment Officer
Wanne, Sidney C.........................Senior VP/Investment Officer
Warner, Craig W......................Associate VP/Investment Officer
Watkins, Christopher M...............Associate VP/Investment Officer
Wattier, Richard A................................Investment Officer
Webb, Stanton R....................Vice President/Investment Officer
Webb, Steven F....................................Investment Officer
Webster, Ann A..............................Associate Vice President
Weed, Thomas G....................................Investment Officer
Weems, Don G.......................Vice President/Investment Officer
Weingartner, Harry.................Vice President/Investment Officer
Weinrich, Frederick J..............Vice President/Investment Officer
Weirich, Joseph J..................Vice President/Investment Officer
Welch, John D..................................Senior Vice President
Wells, John F............................First VP/Investment Officer
Weltzien, Don L.........................Senior VP/Investment Officer
Wendel, Michael R.................................Investment Officer
West, Jr, Gene T...................Vice President/Investment Officer
Westerbur, Barbara J..................................Vice President
Whalen, Jr, John L.................Vice President/Investment Officer
White, James R.....................................Managing Director
White, Ronald G..........................First VP/Investment Officer
Wick, Scott R......................Vice President/Investment Officer
Wickman, Barry E...................Vice President/Investment Officer
Wiederhoeft, Diane M........................Associate Vice President
Wier, Michael J....................................Managing Director
Wilkins, Richard G.................Vice President/Investment Officer
Wilkinson, Charles H.....................First VP/Investment Officer
Williams, Robert D.......................First VP/Investment Officer
Wilson, Dennis A.........................First VP/Investment Officer
Wilson, Robert J...................Vice President/Investment Officer
Wilson, Terrance L.................Vice President/Investment Officer
Winegar, Michael B................................Investment Officer
Winkey, Travis J...................................Managing Director
Winsness, Sharon A.................Vice President/Investment Officer
Witt, Gregory A...................................Investment Officer
Wittenburg, Bonnie L...............................Managing Director
Wolfe, David M........................................Vice President
Woodstra, Bradford P..............................Investment Officer
Wool, Stephen C.......................................Vice President
Wozniak, James M...................Vice President/Investment Officer
Wozny, Gary M......................Vice President/Investment Officer
Wrich, Thomas L...................................Investment Officer
Wright, Robert S..................................Investment Officer
Wulff, Karen P....................................Investment Officer
Wurst, Molly A..............................Associate Vice President
Wyszynski, Don H..........................Managing Director/Director
Yanisch, Stephen J........................Managing Director/Director
Young, Gavin W..........................Senior VP/Investment Officer
Ziehl Jr, William H................Vice President/Investment Officer
Zimm, Rodney V....................................Investment Officer
Zitek, James D....................................Investment Officer
Aguila, Percy R.......................................Vice President
Airington, J. Everett.................................Vice President
Ake, Paul J...........................................Vice President
Alexander, Steven R...................................Vice President
Alexander, Vernon E...................................Vice President
Andrew, James..................................Senior Vice President
Anthony, Mark E.................................First Vice President
Ayers, Ronnie M.......................................Vice President
Baird, Perry M........................................Vice President
Baker, Allen D..................................First Vice President
Baker, Mark S..................................Senior Vice President
Baldwin, William L.............................Senior Vice President
Bales, Wesley..................................Senior Vice President
Barker, William................................Senior Vice President
Barnard, William K.............................Senior Vice President
Barnett, Jerry B...............................Senior Vice President
Barnett, Robert W..............................Senior Vice President
Barney, Roger A.......................................Vice President
Bartholomew, Jana R.............................First Vice President
Bauchman, John R......................................Vice President
Becker, Pamela L......................................Vice President
Benoit, Regina G............................Assistant Vice President
Benson, Bryan E.......................................Vice President
Bergman, Carolyn M....................................Vice President
Berry, Cindy M........................................Vice President
Blattel, Rudolf.......................................Vice President
Blonkvist, Kevin M....................................Vice President
Bloomfield, Jr, Edwin..........................Senior Vice President
Bobo Jr, Keith L......................................Vice President
Boles, Philip M.............................Assistant Vice President
Bolin, Patrick A......................................Vice President
Bolstein, Marlene T.........................Assistant Vice President
Bonner, Pauletta J....................................Vice President
Boulware, Jr, John C...........................Senior Vice President
Boynton, J. Bryan...............................First Vice President
Brandenberger, Robert J........................Senior Vice President
Brast, Craig A..............................Assistant Vice President
Braver, Robert.................................Senior Vice President
Brazelton, III, Lewis E........................Senior Vice President
Breckenridge, John R..................................Vice President
Brollier, David S...............................First Vice President
Brooks, Philip J................................First Vice President
Brown, Jr, Robert...........................Executive Vice President
Brown, Steve..........................................Vice President
Bubas, David A.................................Senior Vice President
Buchanan, D. Kirk.....................................Vice President
Buchanan, Robert...............................Senior Vice President
Buck, G. Clyde.................................Senior Vice President
Bundock, John E.......................................Vice President
Burkhart, Theodore Ray.........................Senior Vice President
Burns, Daniel.........................................Vice President
Butler, Susan Ann...............................First Vice President
Campbell, William B...................................Vice President
Campbell, William F.........................Senior Vice President
Carey, III, Edwin J.........................Vice President
Carney, William R.........................Vice President
Carter, John T.........................Senior Vice President
Cashman, Sally L.........................Senior Vice President
Cassidy, Paul J.........................First Vice President
Castro, Joseph J.........................Assistant Vice President
Catuzzi, Lawrence.........................Senior Vice President
Chaney, Craig A.........................Senior Vice President
Chapman, Bruce scott.........................First Vice President
Chapman, Van William.........................Vice President
Chesley, Ged S.........................First Vice President
Chesnut, Jr, William G.........................Senior Vice President
Childres, Glenn D.........................Senior Vice President
Clausen, Shirley M.........................Assistant Vice President
Clawson, Robert J.........................Vice President
Coleman, Davenia C.........................Assistant Vice President
Colonna, Thomas P.........................Senior Vice President
Colwell, John Dann.........................Assistant Vice President
Conklin, Keith R.........................Vice President
Cooper, Duane C.........................Senior Vice President
Cooper, Malcolm L.........................Senior Vice President
Cope, Michael A.........................First Vice President
Cordiak, Robert B.........................First Vice President
Cottrell, John Hall.........................Vice President
Couch, Stephen F.........................Vice President
Countryman, Danetta.........................Assistant Vice President
Crew, John N.........................Senior Vice President
Cunningham, Joseph.........................Senior Vice President
Cunningham, Scott F.........................First Vice President
Cutchall, Creston C.........................Senior Vice President
Dalton, John.........................First Vice President
Davis, Jr, Charles D.........................Vice President
Davis, Jr, Richard H.........................Senior Vice President
Davis, Richard L.........................Senior Vice President
Davis, Scott A.........................Senior Vice President
Delong, Francis D.........................Vice President
Demarzio, David.........................Senior Vice President
Dennis, Randy W.........................Vice President
Devenport, John T.........................Vice President
Dollarhide, David W.........................Senior Vice President
Donatone, Marie.........................Assistant Vice President
Dorrance, George W.........................First Vice President
Duperier, Frank D.........................Senior Vice President
Dupske, Mary F.........................Vice President
Eades, Thomas H.........................Vice President
Easterbrook, Mark S.........................Vice President
Ehrenberg-Chesler, Laura.........................Vice President
Eller, James R.........................First Vice President
Evans, Marc.........................First Vice President
Falbaum, Vance L.........................Assistant Vice President
Fernandez, Ruben G.........................Vice President
Feste, Joseph A.........................First Vice President
Fish, Kurt R.........................Vice President
Fleckenstein, John E.........................Assistant Vice President
Foggio, Robert.........................Vice President
Forrester, Tommy.........................Vice President
Fradenburg, Glen A.........................First Vice President
Free, Jolynn H.........................Vice President
Freund, Kurt.........................Senior Vice President
Fuller, Sandra J.........................Vice President
Gabel, Joseph P.........................Vice President
Galanis, George.........................Vice President
Gambling, Ann.........................Vice President
Geesman, John L.........................Senior Vice President
Geron, James M.........................Senior Vice President
Gilbert, Larry O.........................Vice President
Gillespie, Robert E.........................Senior Vice President
Gilmore, Todd T.........................Assistant Vice President
Glosser, Gregory C.........................Senior Vice President
Goldstein, Jeffrey.........................Senior Vice President
Golladay, Monty A.........................First Vice President
Goulooze, Richard W.........................Senior Vice President
Grandbouche, Scott I.........................First Vice President
Green, James E.........................Senior Vice President
Green, Michael D.........................Vice President
Green, Tammy R.........................Assistant Vice President
Greer, Jr, John M.........................Senior Vice President
Guarino, Margaret.........................Senior Vice President
Gumbert, William.........................First Vice President
Gutkowski, Sr, Joseph P.........................Senior Vice President
Habig, Jennifer L.........................Associate Vice President
Hall, Catherine L.........................Associate Vice President
Hamel, Christopher.........................Senior Vice President
Hanley, Donald W.........................Senior Vice President
Hardee, Harvey H.........................Senior Vice President
Harris, Becky S.........................Vice President
Harris, Kenneth B.........................Vice President
Hasie, Monte S.........................Senior Vice President
Hasie, Todd L.........................Senior Vice President
Hause, Jr, Gerald W.........................Vice President
Hayden, Patrick J.........................Vice President
Heflin, Rebecca J.........................First Vice President
Heinonen, Linda A.........................Assistant Vice President
Henderson, Dale.........................Senior Vice President
Henderson, Robert V.........................Senior Vice President
Henson, Lauren.........................Assistant Vice President
Herndon, Russell B.........................Senior Vice President
Herzog, Steven A.........................Vice President
Hickey, John E.........................Senior Vice President
Hickman, Robert F.........................Senior Vice President
Hicks, Lindsey P.........................Vice President
Higley, Robert A.........................Senior Vice President
Hilger, Michael D.........................Vice President
Hillis, Akleema.........................Vice President
Hixon, Karen S.........................Vice President
Hokaj, Janet L.........................Vice President
Hoke, Scott A.........................Assistant Vice President
Holder, Joyce L.........................Vice President
Holder, Todd H.........................Vice President
Hollenkamp, Dennis.........................Vice President
Horler, Virginia.........................Senior Vice President
Horton, Blythe M.........................Vice President
Horton, Gary L.........................Vice President
Howard, Jr, James W.........................Vice President
Howell, Daniel D.........................Vice President
Huber, Michael E.........................Assistant Vice President
Hucher, Krista M.........................Assistant Vice President
Hussey, Boynton.........................First Vice President
Ildebrando, Frank J.........................Senior Vice President
Ingersol, Kempton.........................Assistant Vice President
Jenkins, Steven R.........................Vice President
Jennings, Thomas M.........................Vice President
Jensen, Winston.........................Senior Vice President
Jeppesen, Klair F.........................Vice President
Jobes, William K.........................Senior Vice President
Johnsen, Robert J.........................Senior Vice President
Jones, B. Paul.........................Vice President
Jones, Barbara.........................Vice President
Jones, Christopher B.........................Vice President
Jordan, Jay D.........................Senior Vice President
Joy, Timothy B.........................Vice President
Keller, Stewart.........................Vice President
Kelly, Linda.........................Vice President
Killian, Kenneth V.........................Vice President
King, Billie C.........................Vice President
King, Michael C.........................Senior Vice President
Kipp, James R.........................Senior Vice President
Knight, John C.........................Vice President
Kocurek, David C.........................Vice President
Kreps, Lewis W.........................Vice President
Lambert, Dennis C.........................Senior Vice President
Lane, Marylyn.........................Vice President
Langdon, Bert.........................Vice President
Lapier, David.........................First Vice President
Laraia, Craig W.........................Senior Vice President
Larkin, James J.........................First Vice President
Laros, Angelo P.........................Assistant Vice President
Laros, Thomas G.........................Senior Vice President
Lenhart, Gary L.........................Senior Vice President
Lenihan, Jr, Edmond P.........................Assistant Vice President
Lewis, Amy C.........................Assistant Vice President
Lewis, Cindy G.........................Vice President
Lewis, Holden.........................Vice President
Lies IV, William.........................Vice President
Lindgren, Kenneth.........................Senior Vice President
Logan, Jr, Jackson D.........................Senior Vice President
Loggins, Lesley R.........................Assistant Vice President
Lowery, John F.........................Vice President
Loy, Claude E.........................Senior Vice President
Lynch, Jr, Leslie O.........................Executive Vice President
Machado, Elizabeth A.........................Assistant Vice President
Machak, Gary.........................First Vice President
Machemehl, David.........................Vice President
Malone, J M.........................Assistant Vice President
Marek, John J.........................Senior Vice President
Marks, Lorraine L.........................Vice President
Marshall, Joseph A.........................Senior Vice President
Martin, Truman F.........................Vice President
Massey Jr., James V.........................Vice President
Matrone, Louis J.........................First Vice President
Matrone, Vincent A.........................Senior Vice President
Matthews, III, Henry P.........................Vice President
Mayrisch, Lenard.........................Vice President
Mays, Charles R.........................Assistant Vice President
Mcarthur, Douglas E.........................Vice President
McDermott, Robert L.........................Senior Vice President
McDonald, John A.........................Vice President
McDonnell, Jr, Paul C.........................First Vice President
McGowan, Spencer D.........................Senior Vice President
McKenzie, Keith S.........................Senior Vice President
McNamara, Gerald.........................Senior Vice President
McQueeney, Gerard M.........................Assistant Vice President
Meadors, David E.........................Assistant Vice President
Middleton, Richard J.........................First Vice President
Mildren, William H.........................Vice President
Miller, Donald F.........................First Vice President
Monday, C. Barrett.........................Senior Vice President
Montgomery, Ernest E.........................Vice President
Morgan, Jr, Philip.........................Vice President
Morin, Virginia.........................Assistant Vice President
Mundinger, Richard E.........................Vice President
Murray, Francis J.........................Senior Vice President
Myers, Walter F.........................First Vice President
Nasi, Robert A.........................First Vice President
Neff, John E.........................Senior Vice President
Neuhaus, Jr, Joseph R.........................Senior Vice President
Newnham, Morris L.........................Senior Vice President
Nickel, Gary L.........................Senior Vice President
Nicol, Arthur C.........................Senior Vice President
Nieto, James G.........................Vice President
Nodilo, Patsy Lee.........................First Vice President
Nolan, Tom.........................Senior Vice President
Northcutt, Camalene M.........................Assistant Vice President
Oakley, James T.........................Senior Vice President
Ockwood, Jeffrey A.........................Senior Vice President
O'Connor, Patricia M.........................Vice President
Oelze, Richard R.........................Vice President
O'Keefe, Michael D.........................Vice President
O'Key, Roberta A.........................Vice President
Olshevski, George.........................Vice President
Oxford, Mark D.........................Vice President
Palmer, James D.........................Vice President
Pierce, Jr, Charles C.........................Vice Chairmain
Piper, Karen E.........................Assistant Vice President
Plant, Phillip M.........................Senior Vice President
Plantenberg, Randal C.........................Vice President
Pollok, Jr, Lewis W.........................Senior Vice President
Ponder, Cindy.........................Assistant Vice President
Posey, Anne W.........................Vice President
Powers, Kevin F.........................Vice President
Precht, Keith J.........................Assistant Vice President
Present, Robert J.........................Vice President
Rannow, Timothy D.........................Vice President
Rathmann, Richard C.........................Senior Vice President
Rauscher, III, John H.........................Senior Vice President
Razzano, Joseph.........................Vice President
Reaney, Christian.........................Vice President
Reed, Linda P.........................Vice President
Regan, Bryant J.........................First Vice President
Reynolds, Danny.........................Assistant Vice President
Riggsby, Lewis D.........................Vice President
Roark, Murray B.........................Vice President
Robalin, Jr, Thorne W.........................Vice President
Robbins, Jerry M.........................Assistant Vice President
Roberts, Jerry B.........................First Vice President
Rockov, Kolja.........................Assistant Vice President
Roever, Jr, Richard O.........................Vice President
Rogers, Richard L.........................Vice President
Rutledge, John C.........................Assistant Vice President
Saling, Jr, Carl A.........................Senior Vice President
Schaefer, Richard A.........................First Vice President
Scheffler, Leon A.........................First Vice President
Schiano, Dominick.........................Vice President
Schlueter, Shirley.........................Vice President
Schmidt, John A.........................First Vice President
Schramm, Robert E.........................Assistant Vice President
Schwalenberg, John.........................Assistant Vice President
Schwenke, Kenneth F.........................Senior Vice President
Seeley, Peter C.........................Vice President
Shaughnessy, Kerry B.........................Vice President
Shaw, James A.........................Vice President
Simons, Ron.........................Assistant Vice President
Sinnott, James N.........................Vice President
Sloan, Frank O.........................Senior Vice President
Smith, Brook M.........................Senior Vice President
Smith, David A.........................Assistant Vice President
Smith, Nulsen B.........................Senior Vice President
Smith, Peter C.........................Vice President
Smith, Robert C.........................Senior Vice President
Smith, Russ C.........................Senior Vice President
Smith, Stephen A.........................Vice President
Smith, Susan L.........................Vice President
Smith, Truman.........................Senior Vice President
Snider, Jr, John R.........................Vice President
Soodhalter, Charles R.........................First Vice President
Spaeth, Tracy M.........................Vice President
Sparks, Joseph C.........................Senior Vice President
Stesiak, Peter W.........................Vice President
Stokes, Judith A.........................Assistant Vice President
Stuart, Carl W.........................Senior Vice President
Sullivan, John L.........................Vice President
Sutton, Randall C.........................Senior Vice President
Taylor, Dirk A.........................Assistant Vice President
Ternes, Patricia B.........................Assistant Vice President
Terpinski, Casper M.........................First Vice President
Thomas, Jack A.........................Senior Vice President
Thomas, Stephen H.........................Senior Vice President
Thompson, Jr, G. Marty.........................Senior Vice President
Tilley, Jr, Joe A.........................Senior Vice President
Tolbert, Brenda.........................Assistant Vice President
Tomczak, Joan E.........................Assistant Vice President
Townsend, Jr, Peyton.........................Vice President
Travers, Jerry L.........................Vice President
Traweek, Darryl W.........................Vice President
Traylor, Kristi.........................Assistant Vice President
Tubb, John Henry.........................Vice President
Turner, James N.........................Vice President
Turner, Jay K.........................Senior Vice President
Vann, Jr, John R.........................Vice President
Vanosky, Robert.........................Executive Vice President
Via, Jr, Wilburn A.........................Vice President
Vogelpohl, William G.........................Assistant Vice President
Waage, Lawrence.........................Vice President
Wagner, Jeffrey J.........................First Vice President
Wallace, Gene.........................Senior Vice President
Watts, David.........................Vice President
Weaver, Dorothy S.........................Assistant Vice President
Weinberg, John R.........................Vice President
Weldon, Christopher J.........................Vice President
Werner, Stuart C.........................Senior Vice President
Wetterschneider, Larry K.........................Senior Vice President
Wheeler, Kathryn S.........................Vice President
Whidby, Mark W.........................Vice President
Whitley, Jr, Frank J.........................Senior Vice President
Whittaker, Dave R.........................First Vice President
Wicklund, James K.........................First Vice President
Wienberg, Kevin R.........................Vice President
Wilhite, Dan N.........................Executive Vice President
Wilkinson, Donna.........................Vice President
Williams, Doris N.........................Assistant Vice President
Williard, John E.........................Senior Vice President
Wilson, Jr, Lawrence H.........................Senior Vice President
Wilson, Robert A.........................Assistant Vice President
Woodall, Robert L.........................Vice President
Wren, George E.........................Vice President
Wyett, Stephen M.........................Senior Vice President
Yates, Radford M.........................Senior Vice President
Young, Sr, Douglas R.........................Senior Vice President
Zimmerman Jr, David L.........................FVP/Investment Officer/Resident
Manager
Zimmerman, Paul V.........................Vice President
Zomermaand, Deborah A.........................Vice President
Rauscher Pierce Refsnes, Inc. 1997 Officers
6
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Great Hall
Investment Funds, Inc.'s July 31, 1997 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> PRIME MONEY MARKET FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JUL-31-1997
<INVESTMENTS-AT-COST> 3,117,514
<INVESTMENTS-AT-VALUE> 3,117,514
<RECEIVABLES> 13,800
<ASSETS-OTHER> 194
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,131,508
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,654
<TOTAL-LIABILITIES> 1,654
<SENIOR-EQUITY> 31,299
<PAID-IN-CAPITAL-COMMON> 3,098,555
<SHARES-COMMON-STOCK> 3,129,854
<SHARES-COMMON-PRIOR> 2,405,546
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,129,854
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 157,409
<OTHER-INCOME> 0
<EXPENSES-NET> (18,238)
<NET-INVESTMENT-INCOME> 139,171
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 139,171
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (139,171)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,741,550
<NUMBER-OF-SHARES-REDEEMED> (1,156,323)
<SHARES-REINVESTED> 139,171
<NET-CHANGE-IN-ASSETS> 724,398
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (13,296)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (18,238)
<AVERAGE-NET-ASSETS> 2,839,994
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.05)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains financial information extracted from Great Hall
Investment Funds, Inc.'s July 31, 1997 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> U.S. GOVERNMENT MONEY MARKET FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JUL-31-1997
<INVESTMENTS-AT-COST> 181,235
<INVESTMENTS-AT-VALUE> 181,235
<RECEIVABLES> 0
<ASSETS-OTHER> 1,086
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 182,321
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 166
<TOTAL-LIABILITIES> 166
<SENIOR-EQUITY> 1,821
<PAID-IN-CAPITAL-COMMON> 180,334
<SHARES-COMMON-STOCK> 182,155
<SHARES-COMMON-PRIOR> 146,685
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 182,155
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,494
<OTHER-INCOME> 0
<EXPENSES-NET> (1,040)
<NET-INVESTMENT-INCOME> 8,454
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 8,454
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8,454)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 220,285
<NUMBER-OF-SHARES-REDEEMED> (193,269)
<SHARES-REINVESTED> 8,454
<NET-CHANGE-IN-ASSETS> 35,470
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (796)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,040)
<AVERAGE-NET-ASSETS> 174,290
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.05)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Great Hall
Investment Funds, Inc.'s July 31, 1997 Annual Report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> TAX-FREE MONEY MARKET FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JUL-31-1997
<INVESTMENTS-AT-COST> 420,943
<INVESTMENTS-AT-VALUE> 420,943
<RECEIVABLES> 4,002
<ASSETS-OTHER> 2,755
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 427,700
<PAYABLE-FOR-SECURITIES> 4,677
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 283
<TOTAL-LIABILITIES> 4,960
<SENIOR-EQUITY> 4,227
<PAID-IN-CAPITAL-COMMON> 418,513
<SHARES-COMMON-STOCK> 422,740
<SHARES-COMMON-PRIOR> 359,153
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 422,740
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,482
<OTHER-INCOME> 0
<EXPENSES-NET> (2,343)
<NET-INVESTMENT-INCOME> 12,139
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 12,139
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (12,139)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 541,368
<NUMBER-OF-SHARES-REDEEMED> (489,920)
<SHARES-REINVESTED> 12,139
<NET-CHANGE-IN-ASSETS> 63,587
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (2,007)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,343)
<AVERAGE-NET-ASSETS> 401,878
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
