<PAGE>
(Great Hall LOGO) September 12, 1997
To Our Shareholders:
I am pleased to present the July 31, 1997 Annual Report for the Great Hall
Prime, U.S. Government and Tax-Free Money Market Funds. This report contains a
statement of Assets and Liabilities for each Fund and a detailed schedule of
each Fund's investment portfolio as of July 31, 1997. Also included are
Statements of Operations which show each Fund's earnings and expenses, and
Statements of Changes in Net Assets for the fiscal year.
Interest rates rose and fell in two full cycles during the fiscal year, and
ended the year at approximately the beginning of the year levels. The two
prime movers of interest rates throughout the year were the economy's growth
rate and the market's perception of how the Federal Reserve would respond to
that growth. The economy grew rapidly in the Fall of 1996, slowed late in the
year, sped up again in the first quarter of 1997, and then slowed again.
Interest rates rose when the economy grew rapidly with the expectation that the
Fed would raise short-term interest rates, and fell when the economy's growth
rate subsided. In March the Federal Reserve did indeed respond to strong
growth and low unemployment by increasing the fed funds rate (the rate at which
banks lend each other money overnight) from 5.25% to 5.50%. Over the entire
fiscal year most short-term interest rates traded within a range of only 0.50%
to 0.60%. So although there were numerous changes in the market's sentiment,
these changes mostly offset each other, and interest rates remained in a fairly
narrow range.
The primary goals of each Fund are to preserve capital and maintain high
liquidity. To meet these goals the Funds' managers employ careful credit
analysis on all investments, and the Funds are managed very conservatively.
Furthermore, none of the Funds use risky derivatives to boost its yield.
Despite these conservative policies, the Funds' yields have remained
competitive compared to other money market funds. This prudent and successful
strategy has earned the confidence of investors, who have increased the net
asset level of the Funds to an all-time high of $3.7 billion as of July
31,1997.
Thank you for your confidence in the Great Hall Funds. We pledge to continue
managing these Funds in the careful and diligent manner that you have come to
expect.
Sincerely,
J. Scott Spiker
Chief Executive Officer
Great Hall Investment Funds, Inc.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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>
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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>
<PAGE>
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>
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
------------
35,590,79
------------
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
FEDERAL TAX INFORMATION
Information for federal income tax purposes is presented as an aid for
shareholders in reporting the distributions shown below:
Distributions paid during the fiscal year ended July 31, 1997:
Prime Money U.S. Government Tax-Free Money
Market Fund Money Market Fund Market Fund
- -------------------------------------------------------------------------------
Payable Date Per Share Per Share Per Share
- -------------------------------------------------------------------------------
August 30....... $0.00439 $0.00431 $0.00270
September 30.... 0.00373 0.00367 0.00227
October 31...... 0.00413 0.00409 0.00251
November 29..... 0.00410 0.00409 0.00259
December 31..... 0.00412 0.00409 0.00261
January 31...... 0.00425 0.00421 0.00253
March 3......... 0.00371 0.00368 0.00219
March 31........ 0.00385 0.00381 0.00219
April 30........ 0.00404 0.00400 0.00259
June 2.......... 0.00439 0.00433 0.00291
June 30......... 0.00399 0.00393 0.00257
July 31......... 0.00427 0.00423 0.00259
-------- -------- --------
$0.04895 $0.04843 $0.03023
======== ======== ========
Source of Distributions
During the period ending July 31, 1997, 100% of the Tax-Free Money Market Fund
distributions were derived from interest on municipal securities and qualify as
exempt interest dividends for federal tax purposes.
Federal Taxation
Exempt interest dividends are exempt from federal income taxes and should not
be included in shareholders' gross income but need to be reported on the income
tax return for information purposes. Each shareholder should consult a tax
adviser about reporting this income for state and local tax purposes. By early
February 1998, the Fund will provide the shareholder with information regarding
the percentage of distributions exempt from federal income taxes and a
breakdown setting forth states from which income was earned.
Income distributions for the Prime Money Market Fund and U.S. Government Money
Market Fund are taxable as ordinary dividend income and none qualify for the
corporate dividends received deduction. Each shareholder should consult a tax
adviser about reporting this income for state and local tax purposes. By early
February 1998, each shareholder will receive a breakdown of income earned by
investment category on a calendar-year basis.
<PAGE>
(This Page Intentionally Left Blank)
SIGNATURE PAGE
(LOGO)
This report is signed on behalf of the registrant (or depositor or trustee) in
he City of Minneapolis and State of Minnesota on the sixteenth day of September,
1997.
Great Hall Investment Funds, Inc.
Julie K. Getchell J. Scott Spiker
Witness: -------------------- By: --------------------
Julie K. Getchell J. Scott Spiker
Chief Administrative Officer Chief Executive Officer
