<PAGE>
September 4, 1998
To Our Shareholders:
We are pleased to present the July 31, 1998 Annual Report for the Great Hall
Prime, U.S. Government, Tax-Free, and Institutional Prime 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, 1998.
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.
Short-term interest rates remained unusually steady during the fiscal year.
The economy was characterized by strong growth, very low inflation, and no
changes in monetary policy by the Federal Reserve. During the year, Gross
Domestic Product grew at 3.5%, a very strong showing for an economy that was
already near its capacity a year ago. Unemployment reached a 28-year low.
Even more remarkably, this strong economic growth was accompanied by a decline
in the already low inflation rate. The Consumer Price Index rose only 1.7%
over the last year. This was due in part to the strength of the dollar in
foreign exchange markets, which made imports cheaper and put pricing pressure
on U.S. manufacturers. The financial turmoil in Asia has caused our exports to
slow. If not for this dampening effect, the U.S. economy would be way
overheated. The Federal Reserve has not changed monetary policy since March
1997, when it raised short-term interest rates 0.25%. The combination of
benign inflation and the uncertainty as to the ultimate effect of the Asian
crisis has keep the Fed from further raising interest rates, despite the
economy's strong growth and low unemployment.
The primary goals of each Fund are to preserve capital and maintain high
liquidity. To meet these goals, we employ careful credit analysis on all
investments, and the Funds are managed very conservatively. Furthermore, not
one of the Funds uses risky derivatives to boost its yield. Despite these
conservative policies, the yields of the Funds have remained competitive
compared to other money market funds. This prudent and successful strategy has
earned the confidence of investors, as shown by an increase in the net asset
level of the Funds to $5.8 billion as of July 31, 1998.
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,
/s/ Raye Kanzenbach
Raye Kanzenbach
Chief Investment Officer
Great Hall Investment Funds, Inc.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
July 31, 1998
<TABLE>
Institutional
Prime U.S. Government Tax-Free Prime
Money Money Money Money
Market Fund Market Fund Market Fund Market Fund
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Investments in securities
at market value (note 2),
including repurchase agreements of
$0; $56,950,000; $0 and $0, respectively
(identified cost $4,831,104,788;
$227,945,524; $544,295,708 and
$212,896,115, respectively........ $4,831,104,788 $227,945,524 $544,295,708 $212,896,115
Cash in bank on demand deposit...... 163,128 64,742 40,054 23,372
Accrued interest receivable......... 16,549,950 1,106,749 3,119,785 1,022,933
Organization costs (note 2)......... -- -- -- 6,782
- --------------------------------------------------------------------------------------------------------
Total assets........................ 4,847,817,866 229,117,015 547,455,547 213,949,202
- --------------------------------------------------------------------------------------------------------
Liabilities:
Payable for investment
securities purchased.............. -- -- 1,266,974 --
Accrued investment advisory fee..... 1,955,598 85,488 231,234 44,143
Other accrued expenses.............. 1,510,553 102,043 108,673 119,849
- --------------------------------------------------------------------------------------------------------
Total liabilities................... 3,466,151 187,531 1,606,881 163,992
- --------------------------------------------------------------------------------------------------------
Net assets applicable to
outstanding capital stock......... $4,844,351,715 $228,929,484 $545,848,666 $213,785,210
- --------------------------------------------------------------------------------------------------------
Represented by:
Capital stock - authorized 100
billion shares of $.01 par value
for each Fund, outstanding
4,844,351,715; 228,929,484;
545,848,666 and 213,785,210
shares, respectively.............. $48,443,517 $2,289,295 $5,458,487 $2,137,852
Additional paid-in capital.......... 4,795,908,198 226,640,189 540,390,179 211,647,358
- --------------------------------------------------------------------------------------------------------
Total - representing net assets
applicable to outstanding
capital stock................... $4,844,351,715 $228,929,484 $545,848,666 $213,785,210
- --------------------------------------------------------------------------------------------------------
Net asset value per share
of outstanding capital stock...... $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
STATEMENTS OF OPERATIONS
Year ended ended July 31, 1998
<TABLE>
Institutional
Prime U.S. Government Tax-Free Prime
Money Money Money Money
Market Fund Market Fund Market Fund Market Fund
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income:
Interest...................... $220,561,512 $12,055,911 $17,214,394 $6,009,892
- -----------------------------------------------------------------------------------------------
Expenses (note 4):
Investment advisory fee....... 17,513,185 963,402 2,371,641 265,908
Custodian, accounting and
transfer agent fees......... 263,500 61,450 63,800 52,447
Sub-accounting fees........... 3,495,000 91,200 100,300 2,920
Reports to shareholders....... 1,491,064 38,000 36,189 5,700
Amortization of
organization costs.......... -- -- -- 1,635
Directors' fees............... 12,000 12,000 12,000 10,000
Audit and legal fees.......... 29,500 22,500 18,300 13,800
Registration fees............. 1,415,317 41,900 138,000 71,650
Administrative................ 52,500 5,400 4,100 7,050
Other expenses................ 168,893 33,681 6,783 10,979
- -----------------------------------------------------------------------------------------------
Total expenses.................. 24,440,959 1,269,533 2,751,113 442,089
Less expenses voluntarily
waived or absorbed
by Advisor.................... -- -- -- (28,050)
- -----------------------------------------------------------------------------------------------
Total net expenses.............. 24,440,959 1,269,533 2,751,113 414,039
- -----------------------------------------------------------------------------------------------
Investment income - net......... 196,120,553 10,786,378 14,463,281 5,595,853
- -----------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations..... $196,120,553 $10,786,378 $14,463,281 $5,595,853
- -----------------------------------------------------------------------------------------------
* Period from August 11, 1997 (commencement of operations) to July 31, 1998.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Prime
Money Market Fund
- -------------------------------------------------------------------------------
Year Year
Ended Ended
July 31, 1998 July 31, 1997
- -------------------------------------------------------------------------------
Operations:
Investment income, net........ $196,120,553 $139,170,560
- -------------------------------------------------------------------------------
Net increase in net assets
resulting from operations..... 196,120,553 139,170,560
- -------------------------------------------------------------------------------
Distributions to
shareholders from:
Investment income - net..... (196,120,553) (139,170,560)
- -------------------------------------------------------------------------------
Total distributions
to shareholders............. (196,120,553) (139,170,560)
- -------------------------------------------------------------------------------
Capital share transactions at net
asset value of $1.00 per share:
Proceeds from sales......... 5,231,760,076 1,741,550,277
Shares issued for
reinvestment of
distributions............. 196,120,553 139,170,560
Payment for
shares redeemed........... (3,713,382,899) (1,156,322,769)
- -------------------------------------------------------------------------------
Increase in net assets
from capital share
transactions................ 1,714,497,730 724,398,068
- -------------------------------------------------------------------------------
Total increase in net assets.... 1,714,497,730 724,398,068
- -------------------------------------------------------------------------------
Net assets at
beginning of year............. 3,129,853,985 2,405,455,917
- -------------------------------------------------------------------------------
Net assets at end of year....... $4,844,351,715 $3,129,853,985
- -------------------------------------------------------------------------------
* Commencement of operations.
See accompanying notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
Year Year Year Year Period from
Ended Ended Ended Ended Ended 8/11/97* to
7/31/98 7/31/97 7/31/98 7/31/97 7/31/98
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations:
Investment income, net........ $10,786,378 $8,454,406 $14,463,281 $12,139,464 $5,595,853
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations..... 10,786,378 8,454,406 14,463,281 12,139,464 5,595,853
- ---------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Investment income - net..... (10,786,378) (8,454,406) (14,463,281) (12,139,464) (5,595,853)
- ---------------------------------------------------------------------------------------------------------------
Total distributions
to shareholders............. (10,786,378) (8,454,406) (14,463,281) (12,139,464) (5,595,853)
- ---------------------------------------------------------------------------------------------------------------
Capital share transactions at net
asset value of $1.00 per share:
Proceeds from sales......... 295,197,283 220,284,955 599,371,172 541,367,559 439,240,574
Shares issued for
reinvestment of
distributions............. 10,786,378 8,454,406 14,463,281 12,139,464 5,595,853
Payment for
shares redeemed........... (259,209,672) (193,269,020) (490,726,196) (489,919,846) (231,051,217)
- ---------------------------------------------------------------------------------------------------------------
Increase in net assets
from capital share
transactions................ 46,773,989 35,470,341 123,108,257 63,587,177 213,785,210
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets.... 46,773,989 35,470,341 123,108,257 63,587,177 213,785,210
- ---------------------------------------------------------------------------------------------------------------
Net assets at
beginning of year............. 182,155,495 146,685,154 422,740,409 359,153,232 --
- ---------------------------------------------------------------------------------------------------------------
Net assets at end of year....... $228,929,484 $182,155,495 $545,848,666 $422,740,409 $213,785,210
- ---------------------------------------------------------------------------------------------------------------
* Commencement of operations.
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 four funds; Prime, U.S. Government, Tax-Free and the Institutional
Prime Money Market Funds (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 Institutional Prime Money Market Fund. These
costs are being amortized over 60 months on a straight-line basis.
<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, 1997
to July 31, 1998 (August 11, 1997 to July 31, 1998 for Institutional Prime)
were as follows:
Purchases Sales Proceeds
---------------------------------------------------------------------------
Prime Money Market Fund................. $65,747,186,541 $64,033,595,442
U.S. Government Money Market Fund....... 8,296,832,289 8,250,121,601
Tax-Free Money Market Fund.............. 1,181,988,627 1,058,635,556
Institutional Prime Money Market Fund... 1,810,239,933 1,597,343,818
4. Fees and Expenses
The Company has entered into an investment advisory and management
agreement with Insight Investment Management, Inc. (IIM), under which IIM
manages each fund's assets and furnishes related office facilities,
equipment, research and personnel. The agreement requires each fund to pay
IIM 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. The
fee for the Institutional Prime Money Market Fund is equal to an annual
rate of 0.25% of net assets. IIM voluntarily waived a portion of the
advisory fees for the Institutional Prime Money Market Fund for the current
period.
Each of the four funds has also entered into sub-accounting agreement with
affiliate Dain Rauscher Incorporated (DRI) where DRI performs various
transfer and dividend disbursing agent services. The fee, which is paid
monthly to DRI 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 $30,017 for the year ended July 31, 1998 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>
Prime Money Market Fund
--------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
7/31/98 7/31/97 7/31/96 7/31/95 7/31/94
--------------------------------------------------------------------------------------------------------------
<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 0.05 0.03
Distributions to shareholders
from investment income............ (0.05) (0.05) (0.05) (0.05) (0.03)
--------------------------------------------------------------------------------------------------------------
Net asset value, end of period..... $1.00 $1.00 $1.00 $1.00 $1.00
--------------------------------------------------------------------------------------------------------------
Total return....................... 5.0% 4.9% 5.0% 4.9% 2.8%
Net assets at end
of period (000s omitted).......... $4,844,352 $3,129,854 $2,405,456 $1,598,925 $1,029,775
Ratio of expenses to
average daily net assets*......... 0.63% 0.64% 0.70% 0.77% 0.80%
Ratio of net investment
income to average
daily net assets*................. 5.04% 4.90% 4.93% 4.93% 2.81%
--------------------------------------------------------------------------------------------------------------
</TABLE>
* Various fund fees and expenses were voluntarily waived or absorbed by
IIM for the Prime Money Market Fund during the year ended July 31, 1994.
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%.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Financial Highlights (continued)
<TABLE>
U. S. Government Money Market Fund
--------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
7/31/98 7/31/97 7/31/96 7/31/95 7/31/94
--------------------------------------------------------------------------------------------------------------
<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 0.05 0.03
Distributions to shareholders
from investment income............ (0.05) (0.05) (0.05) (0.05) (0.03)
--------------------------------------------------------------------------------------------------------------
Net asset value, end of period..... $1.00 $1.00 $1.00 $1.00 $1.00
--------------------------------------------------------------------------------------------------------------
Total return....................... 5.0% 4.8% 4.9% 4.8% 2.7%
Net assets at end
of period (000s omitted).......... $228,929 $182,155 $146,685 $122,249 $56,815
Ratio of expenses to
average daily net assets.......... 0.59% 0.60% 0.65% 0.73% 0.78%
Ratio of net investment
income to average
daily net assets.................. 4.98% 4.85% 4.87% 4.94% 2.73%
--------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Financial Highlights (continued)
<TABLE>
Tax-Free Money Market Fund
--------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
7/31/98 7/31/97 7/31/96 7/31/95 7/31/94
--------------------------------------------------------------------------------------------------------------
<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 0.03 0.02
Distributions to shareholders
from investment income............ (0.03) (0.03) (0.03) (0.03) (0.02)
--------------------------------------------------------------------------------------------------------------
Net asset value, end of period..... $1.00 $1.00 $1.00 $1.00 $1.00
--------------------------------------------------------------------------------------------------------------
Total return....................... 3.1% 3.0% 3.0% 3.1% 2.0%
Net assets at end
of period (000s omitted).......... $545,849 $422,740 $359,153 $363,273 $275,278
Ratio of expenses to
average daily net assets.......... 0.58% 0.58% 0.59% 0.60% 0.65%
Ratio of net investment
income to average
daily net assets.................. 3.05% 3.02% 3.03% 3.14% 1.98%
--------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Financial Highlights (continued)
Institutional Prime Money Market Fund
---------------------------------------------------------------------------
Period from
8/11/97* to
7/31/98
---------------------------------------------------------------------------
Net asset value, beginning of period............................ $1.00
---------------------------------------------------------------------------
Income from investment operations............................... 0.05
Distributions to shareholders from investment income............ (0.05)
---------------------------------------------------------------------------
Net asset value, end of period.................................. $1.00
---------------------------------------------------------------------------
Total return.................................................... 5.2%
Net assets at end of period (000s omitted)...................... $213,785
Ratio of expenses to average daily net assets**................. 0.39%
Ratio of net investment income to average daily net assets**.... 5.27%
---------------------------------------------------------------------------
* Commencement of operations.
** Adjusted to an annual basis. Various fund fees and expenses were
voluntarily waived or absorbed by IIM for the Institutional Prime Money
Market Fund during the period ended July 31, 1998. Had the Fund paid
all expenses, the ratio of expenses and net investment income to average
daily net assets would have been 0.42%/5.24% for the period ended July
31, 1998.
<PAGE>
PRIME MONEY MARKET FUND
Investments in Securities
July 31, 1998
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Percentages of each investment category relate to total net assets.)
Commercial Paper & Other Corporate Obligations (97.73%):
- -------------------------------------------------------------------------------
Agricultural Products (1.72%)
Archer Daniels Midland Company,
5.49%-5.50%, 8/3/98-9/9/98 $83,550,000 $83,366,503
------------
Banks - Domestic (10.34%)
Allegheny University Hospital, 5.51%, 8/10/98,
LOC Pittsburgh National Bank 25,000,000 24,965,563
Bank of America, 6.00%, 10/22/98 20,000,000 19,997,853
Bankers Trust Company,
5.69%-6.00%, 8/12/98-4/30/99 44,000,000 43,995,600
Bankers Trust New York Corporation,
6.00%, 8/7/98 15,000,000 14,999,785
Chase Manhattan Bank, 5.51%, 8/25/98 17,510,768 17,446,445
Comerica Bank of Detroit,
5.59%-6.00%, 10/21/98-10/27/98 31,000,000 (d) 30,997,184
First National Bank of Chicago,
5.56%-5.72%, 9/21/98-4/1/99 67,500,000 67,494,641
First Union National Bank Charlotte,
5.56%-5.57%, 9/22/98-10/21/98 62,000,000 62,000,000
Formosa Plastics USA,
5.51%, 9/8/98-10/16/98, LOC Bank of America 45,000,000 44,659,451
Key Bank N.A., Cleveland, 5.57%, 10/9/98 25,000,000 25,010,421
Nations Bank, 5.57%-5.60%, 9/2/98-10/22/98 85,800,000 85,800,000
Wachovia Bank N.A., 5.54%-5.56%, 9/16/98-10/6/98 63,400,000 63,400,000
------------
500,766,943
------------
Banks - Other (20.10%)
ABN - AMRO, 5.63%, 3/12/99 3,250,000 3,246,331
Abbey National Treasury Services, 5.54%, 7/20/99 30,000,000 (d) 29,976,567
Banco Bradesco S.A.,
5.52%, 10/15/98, LOC Barclays Bank 15,000,000 14,827,500
Banco Real S.A., 5.51%, 8/14/98-10/16/98,
LOC Barclays Bank 33,500,000 33,240,494
Bank of Nova Scotia,
5.50%-5.93%, 8/10/98-3/23/99 83,000,000 82,889,721
Banque National de Paris,
5.54%-5.64%, 8/25/98-3/19/99 86,000,000 85,999,686
Barclays Bank, 5.65%-5.87%, 8/25/98-3/2/99 28,000,000 27,995,940
Canadian Imperial Bank of Commerce,
5.54%-5.57%, 8/27/98-10/15/98 50,200,000 50,200,207
Cemex S.A., 5.52%-5.53%,
8/13/98-11/10/98, LOC Credit Suisse 24,000,000 23,764,394
Commed Fuel Company, Inc.,
5.51%, 8/6/98, LOC CIBC 25,000,000 24,980,868
Deutsche Bank, 5.49%-5.98%, 8/11/98-5/3/99 84,500,000 84,420,306
Formosa Plastics Corporation USA, 5.52%-5.53%,
8/13/98-10/15/98, LOC ABN - AMRO Bank 70,000,000 69,531,858
JMG Funding Inc.,
5.52%, 8/12/98, LOC Societe Generale 19,002,000 18,969,950
National Westminster Bank,
5.56%-5.70%, 9/21/98-3/30/99 45,000,000 44,992,069
Pemex Capital, Inc.,
5.50%-5.54%, 8/18/98-10/6/98, LOC Swiss Bank 56,280,000 55,834,076
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)
Petroleo Brasileiro S.A.-Petrobras, 5.50%-5.51%,
8/28/98-9/2/98, LOC Barclays Bank $25,550,000 $25,430,800
Presbyterian Healthcare Services,
5.52%, 9/16/98, LOC Toronto-Dominion Bank 20,000,000 19,858,933
Rabobank Nederland,
5.56%-5.57%, 9/10/98-10/30/98 85,000,000 85,004,071
Royal Bank of Canada, 5.65%, 7/30/99 27,250,000 27,241,402
Sinochem American, Inc.,
5.54%, 8/3/98-9/23/98, LOC Credit Suisse 39,165,000 39,081,016
Societe Generale, 5.69%-5.76%, 1/7/99-4/16/99 29,100,000 29,091,736
Sunkyong American Inc., 5.53%-5.59%,
9/3/98-9/10/98, LOC Credit Suisse 23,000,000 22,865,820
Swiss Bank Corporation,
5.63%-5.72%, 3/24/99-4/5/99 34,500,000 34,483,018
Toronto-Dominion Bank,
5.55%-5.57%, 8/10/98-9/3/98 40,000,000 39,972,588
------------
973,899,351
------------
Business Machines (2.06%)
Xerox Corporation, 5.51%-5.66%, 8/3/98-9/2/98 100,000,000 99,808,139
------------
Chemicals (3.28%)
Air Products and Chemicals, Inc.,
5.49%, 9/24/98-9/30/98 35,300,000 34,995,305
Dupont (E.I.) deNemours & Co.,
5.49%-5.50%, 8/26/98-9/9/98 53,640,000 53,381,852
Henkel Corporation, 5.50%, 8/3/98-9/22/98 71,000,000 (c) 70,541,667
------------
158,918,824
------------
Conglomerates (1.71%)
Diageo Capital PLC, 5.47%-5.50%, 8/6/98-9/14/98 83,000,000 (c) 82,642,499
------------
Drugs and Cosmetics (2.94%)
American Home Products Corporation,
5.48%-5.51%, 8/13/98-10/9/98 83,175,000 (c) 82,698,731
Becton Dickinson and Company,
5.50%, 9/14/98-9/18/98 60,000,000 59,578,333
------------
142,277,064
------------
Financial - Auto (4.91%)
Ford Motor Credit Corporation,
5.52%-5.65%, 8/3/98-8/5/98 100,000,000 99,955,136
General Motors Acceptance Corporation,
5.49%-5.76%, 8/7/98-7/6/99 80,000,000 (d) 79,862,412
Toyota Motor Credit Corporation,
5.50%-5.52%, 8/31/98-9/25/98 58,395,000 58,068,567
------------
237,886,115
------------
Financial - Aviation (1.12%)
International Lease Finance Corporation,
5.49%-5.50%, 10/14/98-10/15/98 55,000,000 54,374,236
------------
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 - Diversified Business (16.62%)
American General Finance Corporation,
5.48%-5.50%, 8/5/98-10/5/98 $98,590,000 $98,043,303
Associates Corporation of North America,
5.66%-5.87%, 8/3/98-11/15/98 88,650,000 88,620,551
CIT Group Holdings, 5.64%, 8/3/98 100,000,000 99,968,667
Commercial Credit Corporation,
5.50%-5.53%, 8/4/98-10/23/98 92,500,000 91,961,873
Dean Witter Discover,
5.70%-5.84%, 8/17/98-2/5/99 18,000,000 (d) 18,010,125
General Electric Capital Corporation,
5.49%, 8/6/98 40,000,000 39,969,500
Goldman Sachs, 5.50%, 9/11/98 25,000,000 24,843,403
Household Finance Company,
5.50%-5.69%, 9/4/98-5/4/99 23,250,000 (d) 23,278,747
Merrill Lynch & Co., 5.49%-5.68%, 8/3/98-3/2/99 93,500,000 (d) 93,239,815
Morgan (J.P.) and Company,
5.50%-5.59%, 8/18/98-4/5/99 33,000,000 (d) 32,933,481
Morgan Stanley Dean Witter Discover,
5.49%-5.64%, 8/12/98-1/15/99 70,000,000 (d) 69,345,878
Norwest Corporation,
5.51%-5.54%, 8/12/98-9/29/98 60,000,000 59,647,386
Norwest Financial, Inc., 5.51%, 8/12/98 15,400,000 15,374,072
U.S. Bancorp, 5.50%-5.52%, 8/17/98-9/9/98 50,000,000 49,807,067
------------
805,043,868
------------
Financial - Diversified Business, Asset-Backed (17.75%)
Asset Securitization Coop. Corporation,
5.51%-5.54%, 8/3/98-9/28/98 55,000,000 (c) 54,767,678
Barton Capital Corporation,
5.51%-5.54%, 8/14/98-10/20/98 96,850,000 (c) 96,241,475
Delaware Funding Corporation,
5.51%-5.52%, 9/2/98-10/21/98 62,969,000 (c) 62,403,490
Edison Asset Securitization,
5.51%-5.54%, 8/27/98-10/13/98 104,856,000 (c) 104,023,221
Falcon Asset Securitization,
5.52%-5.53%, 8/17/98-9/21/98 90,090,000 (c) 89,577,019
Fleet Funding Corporation,
5.53%-5.54%, 8/4/98-9/8/98 32,167,000 (c) 32,066,680
Monte Rosa Capital Corporation,
5.52%-5.57%, 8/14/98-9/21/98 100,000,000 (c) 99,694,550
Preferred Receivables Funding Corporation,
5.51%-5.52%, 9/1/98-10/22/98 45,065,000 (c) 44,752,096
Receivables Capital Corporation,
5.51%-5.53%, 8/14/98-10/14/98 94,165,000 (c) 93,727,777
Triple A One Funding,
5.53%-5.55%, 8/4/98-9/11/98 79,207,000 (c) 78,883,217
Windmill Funding Corporation,
5.52%-5.58%, 8/5/98-10/19/98 104,584,000 (c) 103,918,660
------------
860,055,863
------------
Food and Beverage (1.14%)
Coca Cola Company, 5.50%, 8/6/98 50,000,000 (c) 49,961,806
General Mills, Inc., 5.90%, 12/15/98 5,000,000 5,046,210
------------
55,008,016
------------
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):
- -------------------------------------------------------------------------------
Household Products (2.14%)
Clorox Company, 5.50%-5.52%, 8/10/89-9/11/98 $40,890,000 $40,735,543
Colgate-Palmolive Company, 5.49%, 8/3/98 10,100,000 10,096,920
Proctor and Gamble Company,
5.48%-5.50%, 8/21/98-9/3/98 53,135,000 52,889,274
------------
103,721,737
------------
Metals and Mining (1.34%)
Aluminium Company of America, 5.51%, 8/12/98 65,000,000 64,890,565
------------
Municipals (1.95%)
Bedford County Virginia Industrial
Development Authority, 5.70%, 12/1/25,
LOC Canadian Imperial Bank of Commerce 12,000,000 (e) 12,000,000
5.70%, 12/1/25, LOC Societe Generale 10,000,000 (e) 10,000,000
MetroCrest Hospital Authority,
5.57%, 8/4/98, LOC Bank of New York 15,300,000 15,292,899
New York City G.O.,
5.62%-5.64%, 8/1/18-8/1/22, FGIC Insured 27,755,000 (e) 27,755,000
State of Connecticut G.O., 5.65%, 8/1/99 4,400,000 4,394,092
Parish of West Baton
Rouge Industrial District #3, 5.63%,
11/1/25, Guaranty: Dow Chemical Co. 25,000,000 (e) 25,000,000
------------
94,441,991
------------
Oil Services (2.23%)
Petrofina S.A., 5.50%-5.51%, 10/6/98-10/20/98,
Guaranty: Petrofina S.A. 42,980,000 (c) 42,491,285
Texaco Inc., 5.50%-5.52%, 8/21/98-9/17/98 65,915,000 65,534,500
------------
108,025,785
------------
Printing and Publishing (0.56%)
Pearson Inc., 5.52%, 8/11/98 27,250,000 27,208,217
------------
Retail Stores (1.13%)
J.C. Penney Funding Inc.,
5.50%-5.52%, 8/7/98-10/21/98 55,000,000 (c) 54,776,625
------------
Telecommunications (0.88%)
Motorola Credit Corporation, 5.51%, 8/7/98 42,500,000 42,461,006
------------
Utilities - Electric (1.95%)
Baltimore Gas & Electric Company, 5.62%, 9/1/98 34,000,000 (d) 34,000,000
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):
- -------------------------------------------------------------------------------
Utilities - Electric (continued)
Carolina Power & Light, 5.50%, 8/14/98-9/14/98 $35,910,000 $35,722,125
Southern California Edison, 5.50%, 9/9/98 25,000,000 24,851,042
------------
94,573,167
------------
Utilities - Financial (1.66%)
National Rural Utilities
Cooperative Finance Corporation,
5.50%-5.51%, 8/7/98-10/28/98 81,000,000 80,380,619
------------
Utilities - Telephone (0.21%)
Bell Atlantic Financial Services, 5.91%, 9/1/98 10,000,000 9,994,810
- -------------------------------------------------------------------------------
Total Commercial Paper &
Other Corporate Obligations (cost: $4,734,521,943) $4,734,521,943
- -------------------------------------------------------------------------------
Government & Agencies Securities (1.99%):
- -------------------------------------------------------------------------------
Federal Home Loan Bank,
5.40%-5.55%, 11/6/98-2/26/99 35,000,000 (d) 34,994,388
Private Export Funding Corp.,
5.47%-5.52%, 8/5/98-10/19/98 61,850,000 61,588,457
- -------------------------------------------------------------------------------
Total Government &
Agencies Securities (cost: $96,582,845) $96,582,845
- -------------------------------------------------------------------------------
Total Investment in Securities
(cost: $4,831,104,788) (b) $4,831,104,788
- -------------------------------------------------------------------------------
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 July 31, 1998.
(e) Interest rate varies to reflect current market conditions; rate shown is
the effective rate on July 31, 1998. 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.
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
Investments in Securities
July 31, 1998
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
Government & Agencies Securities (74.69%):
- -------------------------------------------------------------------------------
Federal National Mortgage Association (29.96%)
5.40%-5.85%, 8/3/98-4/2/99 $68,850,000 (c) $68,584,809
Federal Home Loan Mortgage Corporation (19.04%)
5.42%-5.60%, 8/4/98-4/21/99 43,733,000 43,589,145
Federal Home Loan Bank (22.64%)
5.51%-5.65%, 8/20/98-4/7/99 51,855,000 (c) 51,826,904
Federal Farm Credit Bank (2.18%)
5.45%, 6/1/99 5,000,000 (c) 4,996,544
Student Loan Marketing Association (0.87%)
5.42%, 2/22/99 2,000,000 (c) 1,998,122
- -------------------------------------------------------------------------------
Total Government & Agencies Securities
(cost: $170,995,524) $170,995,524
- -------------------------------------------------------------------------------
Repurchase Agreement (24.88%)
- -------------------------------------------------------------------------------
First Chicago, 5.61%, acquired 7/31/98 and
due 8/3/98 with accrued interest of $8,815
(collateralized by $58,111,738 U.S. Treasury
Note, 6.25%, 4/30/01) (cost: $56,950,000) 56,950,000 56,950,000
- -------------------------------------------------------------------------------
Total Investment in Securities
(cost: $227,945,524) (b) $227,945,524
- -------------------------------------------------------------------------------
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, 1998.
<PAGE>
TAX-FREE MONEY MARKET FUND
Investments in Securities
July 31, 1998
Principal Market
Name of Issuer (c) Amount Value (a)
- -------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
Alaska (0.53%)
North Slope Borough,
3.75%, 6/30/99, MBIA Insured $3,000,000 $2,900,155
------------
Arizona (0.38%)
Maricopa County PCR (El Paso Elect),
3.50%, 12/1/14, LOC Barclays Bank 2,100,000 (b) 2,100,000
------------
California (0.90%)
Los Angeles Regional Airports
Improvement Corp. Lease Revenue,
3.75%, 12/1/24, LOC Wachovia Bank of Georgia 1,900,000 (b) 1,900,000
3.75%, 12/1/25, LOC Societe Generale 1,000,000 (b) 1,000,000
School Cash Reserve Program Authority Series A,
3.74%, 7/2/99, AMBAC Insured 2,000,000 2,013,437
------------
4,913,437
------------
Colorado (3.82%)
Arapahoe County (Dove Valley Metropolitan District)
Series 1996B, 4.05%, 11/1/98,
LOC Banque National de Paris 4,950,000 4,950,000
Adams County Family Housing Revenue
(Hunters Cove Project)
Series 1985, 3.70%, 1/15/14, LOC GECC 7,500,000 (b) 7,500,000
Boulder, Larimer & Weld Counties
(St. Vrain Valley School District),
3.95%, 12/15/98, FGIC Insured 857,962 845,695
Denver City & County MFHR (Parliament Apts.),
3.65%, 6/1/06, LOC GECC 2,200,000 (b) 2,200,000
Health Facilities Authority Revenue
(Visiting Nurses),
3.70%, 7/1/22, LOC Norwest Bank 2,090,000 (b) 2,090,000
Interstate South Metro District,
4.05%, 11/1/98, LOC Banque National de Paris 3,275,000 3,275,000
------------
20,860,695
------------
Florida (1.21%)
Jacksonville Electric Authority System,
3.55%, 8/4/98 3,000,000 3,000,000
West Orange Memorial Hospital,
3.70%, 8/13/98, LOC Rabobank Nederland 3,600,000 3,600,000
------------
6,600,000
------------
Georgia (3.63%)
Clayton County MFHR Series 1990
(Kings Arena Apartment),
3.50%, 1/1/21, FSA / Capital Guaranty Insured 2,215,000 (b) 2,215,000
Dougherty County School District Sales
Tax Bonds Series 1998, 3.65%, 3/1/99 1,500,000 1,500,000
Fulton County Residential Home Care,
3.70%, 1/1/18, LOC Rabobank Nederland 12,500,000 (b) 12,500,000
Hapeville Development Authority,
3.70%, 11/1/15, LOC Deutsche Bank 2,600,000 (b) 2,600,000
State of Georgia G.O.,
3.85%, 4/1/99, Escrowed in Governments 955,000 994,607
------------
19,809,607
------------
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 (0.88%)
Honolulu City & County,
3.70%, 8/12/98, LOC CIBC $2,300,000 $2,300,000
3.70%, 10/1/98, Prerefunded and
Escrowed in Governments 1,000,000 1,020,117
State of Hawaii G.O., 3.65%, 10/1/98,
Prerefunded and Escrowed in Governments 1,500,000 1,504,540
------------
4,824,657
------------
Idaho (0.92%)
State Health Facilities Authority Revenue
(St. Luke's Regional Medical Center),
3.70%, 5/1/22, LOC Credit Suisse 5,000,000 (b) 5,000,000
------------
Illinois (12.46%)
Chicago G.O., 3.55%, 2/4/99, LOC Morgan Guaranty 3,000,000 2,998,308
Chicago O'Hare International Airport,
3.50%, 1/1/15, LOC Societe Generale 3,300,000 (b) 3,300,000
City of Springfield Community Improvement Revenue
Bonds Series 1985, (Realing Restoration Project),
3.75%, 12/1/15, over-collateralized in Govt's 3,200,000 (b) 3,200,000
City of Springfield MFHR (OT Center Limited
Project), 3.75%, 12/1/15, collateralized
by a portfolio of U.S. Treasuries 7,700,000 (b) 7,700,000
Cook County G.O., 3.85%, 11/15/98, FGIC Insured 1,000,000 1,003,222
Development Finance Authority,
(A.E. Staley Manufacturing), 3.40%, 12/1/05,
LOC Union Bank of Switzerland 1,600,000 (b) 1,600,000
(Latin School of Chicago), 3.50%, 6/1/30,
LOC Bank of America 13,500,000 (b) 13,500,000
Education Facilities Authority
(Augustana College), 3.75%, 10/1/98, LOC AMBAC 715,000 715,992
Health Facilities Authority Demand Revenue Bonds
Series 1985B (Children's Memorial Hosp.
Project), 3.50%, 11/1/15,
LOC First Nat'l Bank of Chicago 10,600,000 (b) 10,600,000
Health Facilities Authority Revenue,
3.70%, 11/1/20, LOC Rabobank Nederland 6,160,000 (b) 6,160,000
(Lutheran Health System),
3.75%, 4/1/99, Prerefunded 1,750,000 1,825,136
Joliet Regional Port Dist. IDR Bonds,
3.70%, 7/15/03, Guaranty: Dow Chemical 11,295,000 (b) 11,295,000
Metropolitan Pier & Exposition Authority,
3.70%, 12/15/98, AMBAC Insured 2,945,000 2,905,350
Northwest Suburban Municipal Joint Action
Water Agency (Water Supply System Revenue),
3.82%, 5/1/99, MBIA Insured 1,200,000 1,213,773
------------
68,016,781
------------
Indiana (5.07%)
Hospital Equipment Finance Authority,
3.55%, 12/1/15, MBIA Insured 11,865,000 (b) 11,865,000
Hospital Facilities Financing Authority
(Capital Access Designated Pool Program),
3.55%, 12/1/02-4/1/13, LOC Comerica Bank 13,500,000 (b) 13,500,000
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)
- -------------------------------------------------------------------------------
Indiana (continued)
Health Facilities Financing Authority
(St. Anthony Medical Center),
3.50%, 12/1/14-12/1/17, LOC Rabobank Nederland $300,000 (b) $300,000
Health Facilities Financing Authority Hospital
Revenue Bonds Series 1990, 3.50%, 11/1/20,
LOC National Bank of Detroit 2,000,000 (b) 2,000,000
------------
27,665,000
------------
Iowa (5.12%)
Cash Anticipation Program,
3.55%, 1/28/99, FSA Insured 2,000,000 2,006,667
Financial Authority Revenue
(Burlington Medical Center),
3.60%, 6/1/27, FSA Insured 14,900,000 (b) 14,900,000
Higher Education Loan Authority Revenue
(Palmer Chiropractic), 3.80%, 4/1/27,
LOC Firstar Bank, N.A. 3,595,000 (b) 3,595,000
Mount Vernon Private College Project
(Cornell) Series 1985, 3.80%, 10/1/15,
LOC First Bank Minneapolis, N.A. 3,100,000 (b) 3,100,000
Polk County Hospital Equipment and
Improvement Revenue, 3.50%, 12/1/05,
MBIA Insured 4,340,000 (b) 4,340,000
------------
27,941,667
------------
Kansas (4.14%)
City of Burlington PCR,
3.50%-3.65%, 8/6/98-8/13/98,
LOC Societe Generale 7,600,000 7,600,000
3.45%-3.60%, 8/7/98-8/11/98,
LOC Toronto-Dominion Bank 8,000,000 8,000,000
Kansas City IDR,
3.70%, 8/1/15, LOC Credit Suisse 2,000,000 (b) 2,000,000
State Development Finance Authority Health
Facilities Revenue (Stormont Vail Healthcare),
3.75%, 11/15/23, LOC Credit Local de France 5,000,000 (b) 5,000,000
------------
22,600,000
------------
Louisiana (1.69%)
Lake Charles Port Harbor and Terminal,
3.85%, 12/1/98, LOC ABN - AMRO 1,500,000 1,500,698
Parish of East Baton Rouge,
3.70%, 11/1/19, Guaranty: Exxon Corporation 3,950,000 (b) 3,950,000
Plaquemines Port Harbor and Terminal,
3.60%, 3/15/99, LOC Morgan Guaranty 2,500,000 2,496,917
St. Tammany School District No. 12,
3.68%, 3/1/99, FSA Insured 1,235,000 (e) 1,254,007
------------
9,201,622
------------
Maryland (3.33%)
Anne Arundel County Port Facilities Revenue,
3.70%, 9/8/98-10/14/98, Guaranty:
Baltimore Gas and Electric 6,200,000 6,200,000
Montgomery County Housing Opportunity,
3.70%, 11/1/07, LOC GECC 12,000,000 (b) 12,000,000
------------
18,200,000
------------
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)
- -------------------------------------------------------------------------------
Massachusetts (0.33%)
City of Grafton G.O.,
3.70%, 2/15/99, MBIA Insured $765,000 $774,281
State of Massachusetts G.O.,
3.73%, 4/1/99, Prerefunded 1,000,000 1,043,258
------------
1,817,539
------------
Michigan (0.67%)
Delta County Economic Development
Authority (Mead Paper Project),
3.70%, 12/1/23, LOC Bank of Nova Scotia 2,800,000 (b) 2,800,000
Grand Blanc Community Schools G.O., 3.75%, 5/1/99 840,000 850,662
------------
3,650,662
------------
Minnesota (4.43%)
City of Cohasset (MN Power & Light Project),
3.70%, 6/1/13-6/1/20, LOC ABN - AMRO 8,930,000 (b) 8,930,000
Minneapolis/St. Paul State Housing &
Redevelopment Authority,
3.75%, 8/15/25, FSA Insured 4,345,000 (b) 4,345,000
St. Paul Housing and Redevelopment Authority
(Science Museum of MN Project), 3.45%-3.50%,
5/1/27, LOC First Bank Minneapolis, N.A. 4,965,000 (b) 4,965,000
State Tax & Aid Anticipation Borrowing Programs
(School Districts), 3.80%, 8/13/98-9/3/98 2,140,000 2,140,000
State Various Purpose Refunding Bonds,
3.74%, 8/1/98, Prerefunded 3,790,000 3,790,000
------------
24,170,000
------------
Mississippi (0.73%)
Claiborne County PCR,
3.55%, 9/9/98, Guaranty: Nat'l Rural
Utilities Cooperative Finance Corp. 1,400,000 1,400,000
(South Mississippi Electrical Power),
3.65%, 9/10/98 2,600,000 2,600,000
------------
4,000,000
------------
Missouri (3.19%)
Independence IDA (Groves & Graceland),
3.70%, 11/1/27, LOC Credit Local de France 9,000,000 (b) 9,000,000
State Environmental Improvement &
Energy Resource Authority PCR,
3.60%, 10/5/98, LOC Union Bank of Switzerland 3,600,000 3,600,000
(Monsanto Corporation), 3.20%, 2/1/09 1,800,000 (b) 1,800,000
State Health and Education Facilities Authority
Revenue (St. Francis Medical Center),
3.70%, 6/1/26, LOC Credit Local de France 3,000,000 (b) 3,000,000
------------
17,400,000
------------
Montana (1.67%)
State Health Facilities Authority Revenue Bonds
Series A, 3.45%, 12/1/15, FGIC Insured 9,105,000 (b) 9,105,000
------------
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)
- -------------------------------------------------------------------------------
Nebraska (0.75%)
Investment Finance Authority
Hospital Revenue Bonds,
3.50%, 12/1/15, FGIC Insured $4,100,000 (b) $4,100,000
------------
Nevada (2.39%)
Clark County Airport System
Refunding Revenue Bonds,
3.40%, 7/1/12, MBIA Insured 6,500,000 (b) 6,500,000
3.40%, 7/1/25, LOC Toronto-Dominion Bank 6,532,000 (b) 6,532,000
------------
13,032,000
------------
New Jersey (0.22%)
EDA (Volvo American Corp.),
3.96%, 12/1/04, LOC Credit Suisse 1,200,000 (b) 1,200,000
------------
New Mexico (0.18%)
City of Albuquerque Revenue Bonds,
3.55%, 7/1/14, AMBAC Insured 1,000,000 (b) 1,000,000
------------
New York (3.35%)
Campbell-Savona Central School District,
3.80%, 6/15/99, MBIA Insured 845,000 850,003
New York City G.O.,
3.70%, 8/15/23, MBIA Insured 900,000 (b) 900,000
3.70%, 8/1/17-8/1/18, LOC Morgan Guaranty 4,285,000 (b) 4,285,000
3.85%, 10/1/20-10/1/22, FGIC Insured 3,500,000 (b) 3,500,000
New York City Municipal Water Finance Authority,
3.70%-3.90%, 6/15/23-6/15/25, FGIC Insured 3,250,000 (b) 3,250,000
State Dorm Authority Revenue,
3.80%, 2/15/99, AMBAC Insured 1,000,000 1,004,957
State Energy Research & Development Authority,
3.35%, 8/15/15, AMBAC Insured 4,500,000 (b) 4,500,000
------------
18,289,960
------------
North Carolina (1.48%)
City of New Hanover, 3.85%, 12/1/98 740,000 739,875
State Medical Center Commission Revenues
(Carol Woods Project), 3.70%, 4/1/21,
LOC Nationsbank N.A. (Carolinas) 6,500,000 (b) 6,500,000
Wake County Hospital System,
3.90%, 10/1/98, MBIA Insured 820,000 820,130
------------
8,060,005
------------
North Dakota (0.74%)
State Housing Finance Agency, 3.75%, 1/1/99 4,020,000 4,020,000
------------
Ohio (1.40%)
Air Quality Development Authority PCR,
3.55%, 10/7/98, FGIC Insured 2,500,000 2,500,000
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)
- -------------------------------------------------------------------------------
Ohio (continued)
Miami County Hospital Facilities
Refunding and Improvement
(Upper Valley Medical Center),
3.80%, 5/15/99, MBIA Insured $1,125,000 $1,135,307
Sandusky Bond Anticipation Notes,
3.68%, 7/29/99 4,000,000 4,017,019
------------
7,652,326
------------
Oklahoma (0.18%)
Garfield County Industrial Authority
PCR, 3.55%, 1/1/25, Guaranty:
Oklahoma Gas & Electric 1,000,000 (b) 1,000,000
------------
Pennsylvania (9.29%)
Allegheny County IDA,
3.65%, 9/8/98-10/1/98, LOC Dresdner Bank 5,200,000 5,200,000
(Longwood at Oakmont Inc. Project),
3.70%, 7/1/27, LOC Dresdner Bank 8,600,000 (b) 8,600,000
Beaver County IDA Pollution Control Revenue Bonds,
3.70%, 9/4/98, LOC Swiss Bank 7,600,000 7,600,000
(Duquesne Light Co. Project),
3.70%, 10/22/98, LOC Swiss Bank 6,000,000 6,000,000
Delaware County PCR, 3.50%, 8/5/98, FGIC Insured 2,000,000 2,000,000
Delaware Valley Regional Finance Authority,
3.45%, 8/1/16, LOC Credit Suisse 2,000,000 (b) 2,000,000
Lehigh County IDA
(Allegheny Electric Coop.) Series 1985,
3.65%, 12/1/15, LOC Rabobank Nederland 2,900,000 (b) 2,900,000
Quakertown Hospital Authority, 3.55%, 7/1/05,
LOC Pittsburgh National Bank 16,400,000 (b) 16,400,000
------------
50,700,000
------------
South Carolina (4.47%)
Berkeley County PCR Revenue,
3.50%, 12/1/08, LOC Royal Bank of Canada 10,725,000 (b) 10,725,000
York County PCR, 3.60%-3.75%,
8/11/98-10/8/98, Guaranty: Duke Power Co. 13,650,000 13,650,000
------------
24,375,000
------------
South Dakota (0.40%)
Housing Development Authority
(Homeownership Mortgage), 3.75%, 11/1/98 2,195,000 2,195,000
------------
Tennessee (0.34%)
Shelby County Public Improvement
Series 1989A, 3.87%, 8/1/98, Prerefunded 3,910,000 1,864,679
------------
Texas (6.98%)
Amarillo Independent School District,
3.75%, 2/1/99, Texas PSF guaranteed 1,555,000 1,526,437
City of Austin,
3.45%, 8/3/98, LOC Morgan Guaranty 1,000,000 1,000,000
City of Carrollton,
3.82%, 8/15/98, Prerefunded 2,000,000 2,001,959
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)
Clint Independent School District,
3.65%, 3/1/99, Texas PSF guaranteed $825,000 $825,000
Cypress-Fairbanks Independent School District,
3.70%, 2/1/99, Texas PSF guaranteed 1,075,000 1,055,254
Goose Creek Consolidated Independent
School District Capital Appreciation Bonds,
3.68%, 2/15/99, Texas PSF guaranteed 1,200,000 1,176,815
Harris County Health Facilities Development
Corp. Hospital Revenue, 3.40%, 6/1/24,
LOC Societe Generale 4,800,000 (b) 4,800,000
Lone Star Airport Improvement, 3.75%,
12/1/14-8/15/25, LOC Royal Bank of Canada 2,700,000 (b) 2,700,000
Nueces River Authority PCR
(Reynolds Metals Co. Project),
3.70%, 12/01/99, LOC Bank of Nova Scotia 8,300,000 (b) 8,300,000
Pharr San Juan - Alamo
Independent School District G.O.,
3.75%, 2/1/99, PSF guaranteed 1,545,000 1,546,822
San Antonio Electric and Gas Revenue Refunding
Improvement, 3.75%, 2/1/99, Prerefunded 2,100,000 2,159,017
State Tax Anticipation Notes G.O.
Series 1996, 3.84%, 8/31/98 7,000,000 7,005,017
Tarrent County Housing Finance Corporation,
Multi-Family Housing - Single Family Apartments
Project, 3.50%, 11/1/17, LOC Suntrust Bank 4,025,000 (b) 4,025,000
------------
38,121,321
------------
Utah (3.70%)
Intermountain Power Agency,
3.50%, 9/9/98, LOC Bank of America 3,500,000 3,500,000
3.65%, 8/10/98, AMBAC Insured 3,500,000 3,500,000
State Board of Regents Student Loan Revenue Bonds
Series B, 3.50%, 11/1/00, AMBAC Insured 13,200,000 (b) 13,200,000
------------
20,200,000
------------
Washington (2.31%)
City of Federal Way G.O.,
3.82%, 6/1/99, AMBAC Insured 1,200,000 1,211,401
King County School District,
3.95%, 12/1/98, AMBAC Insured 1,435,000 1,436,623
State Health Care Facilities Authority
(Fred Hutchinson Cancer Center),
3.70%, 1/1/18, LOC Morgan Guaranty 3,310,000 (b) 3,310,000
State Housing Finance Commission,
3.70%, 7/1/11-1/1/21, LOC U.S. Bancorp 5,900,000 (b) 5,900,000
State of Washington G.O.
(Motor Vehicle Fuel Tax), 3.80%, 3/1/99,
Escrowed in Governments 750,000 764,665
------------
12,622,689
------------
West Virginia (0.16%)
State Hospital Finance Authority,
3.85%, 8/1/98, FSA Insured 875,000 875,000
------------
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)
- -------------------------------------------------------------------------------
Wisconsin (2.99%)
City of Madison G.O., 3.70%, 5/1/99 $2,280,000 $2,285,791
La Crosse IDA (Dairyland Power Cooperative),
3.70%, 9/1/14-2/1/15, AMBAC Insured 2,400,000 (b) 2,400,000
3.70%, 2/1/15, LOC AMBAC 4,550,000 (b) 4,550,000
State Health and Educational Facilities Authority,
3.80%, 10/1/26, LOC Firstar Bank 1,000,000 (b) 1,000,000
(Wheaton Franciscan), 3.75%, 8/15/98 3,000,000 3,064,900
State of Wisconsin G.O.,
3.78%, 5/1/99, Prerefunded 3,000,000 3,010,215
------------
16,310,906
------------
Wyoming (3.28%)
Lincoln County PCR, 3.70%, 11/1/14,
Guaranty: Exxon Corporation 5,100,000 (b) 5,100,000
Platte County PCR, 3.90%,
7/1/14, LOC Societe Generale 2,400,000 (b) 2,400,000
Sweetwater County PCR, 3.45%-3.50%,
6/4/98-10/6/98, LOC Union Bank of Switzerland 10,400,000 10,400,000
------------
17,900,000
- -------------------------------------------------------------------------------
Total Investments in Securities
(cost: $544,295,708) (d) $544,295,708
- -------------------------------------------------------------------------------
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, 1998. 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
CIBC - Canadian Imperial Bank of Commerce
FGIC - Financial Guaranty Insurance Corporation
FSA - Financial Security Assurance Corporation
G.O. - General Obligation
GECC - General Electric Capital Corporation
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
PSF - Texas Permanent School Fund
(d) Also represents cost for federal income tax purposes.
(e) On July 31, 1998, the cost of securities purchased on a when-issued basis
was $1,266,974.
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND
Investments in Securities
July 31, 1998
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Percentages of each investment category relate to total net assets.)
Commercial Paper & Other Corporate Obligations (93.04%):
- -------------------------------------------------------------------------------
Agricultural Products (3.01%)
Archer Daniels Midland Company, 5.50%, 8/17/98 $6,450,000 $6,434,233
------------
Banks - Domestic (11.42%)
Bankers Trust Company, 5.98%, 8/12/98 4,000,000 4,000,089
Citibank N.A., Bankers Acceptance, 5.50%, 9/14/98 713,273 708,478
Commed Fuel Co., Inc., 5.51%, 8/7/98,
LOC First National Bank of Chicago 4,765,000 4,760,624
First National Bank of Chicago,
5.72%-5.75%, 4/1/99-5/10/99 2,000,000 1,999,373
First Union National Bank, 5.56%, 9/22/98 8,000,000 8,000,000
Formosa Plastics Corporation USA,
5.51%,10/16/98, LOC Bank of America 5,000,000 4,941,839
------------
24,410,403
------------
Banks - Other (10.68%)
Bank of Nova Scotia, 5.50%, 8/19/98 5,000,000 4,986,250
Canadian Imperial Bank of Commerce,
5.82%, 9/30/98 5,000,000 5,000,068
Cemex S.A., 5.53%, 11/10/98, LOC Credit Suisse 3,000,000 2,953,456
Deutsche Bank, 5.57%-5.73%, 8/11/98-4/16/99 7,700,000 7,698,195
Societe Generale, 5.76%, 4/16/99 1,500,000 1,499,797
Swiss Bank Corporation, 5.65%, 3/24/99 700,000 699,432
------------
22,837,198
------------
Chemicals (5.31%)
Air Products and Chemicals, Inc., 5.50%, 8/18/98 3,200,000 3,191,689
Henkel Corporation, 5.50%, 9/18/98 8,215,000 (c) 8,154,757
------------
11,346,446
------------
Conglomorates (1.50%)
Diageo Capital PLC, 5.52%-5.60%, 8/12/98-8/31/98 3,208,000 (c) 3,196,747
------------
Drugs and Cosmetics (1.92%)
American Home Products Corporation,
5.48%, 10/9/98 3,735,000 (c) 3,695,770
Eli Lilly & Company, 5.59%, 2/16/99 400,000 403,173
------------
4,098,943
------------
Electronics (0.22%)
Emerson Electric Company, 5.47%, 10/30/98 485,000 478,368
------------
See accompanying notes to investments in securities.
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- -------------------------------------------------------------------------------
Entertainment (3.79%)
Walt Disney Company, 5.65%, 8/3/98 $8,100,000 $8,097,458
------------
Financial - Auto (7.89%)
General Motors Acceptance Corporation,
5.49%, 11/2/98 8,000,000 7,886,540
Toyota Motor Credit Corporation, 5.51%, 8/25/98 9,015,000 8,981,885
------------
16,868,425
------------
Financial - Diversified Business (14.52%)
Associates Corporation of North America,
5.87%, 9/1/98 3,000,000 2,999,008
Avco Financial Services, 5.51%, 8/18/98 9,000,000 8,976,507
Morgan (J.P.) and Company,
5.48%-5.59%, 9/28/98-4/5/99 9,800,000 (d) 9,688,025
Morgan Stanley Dean Witter Discover,
5.52%, 3/2/99 2,000,000 (d) 1,999,271
Norwest Corporation, 5.50%, 8/14/98 7,395,000 7,380,313
------------
31,043,124
------------
Financial - Diversified Business, Asset-Backed (13.94%)
Asset Securitization Coop. Corporation,
5.52%, 8/21/98 6,970,000 (c) 6,948,625
Delaware Funding Corporation,
5.51%-5.55%, 8/28/98-10/20/98 9,836,000 (c) 9,756,386
Monte Rosa Capital Corporation, 5.57%, 8/14/98 8,210,000 (c) 8,193,546
Windmill Funding Corporation, 5.53%, 10/19/98 4,955,000 (c) 4,894,870
------------
29,793,427
------------
Household Products (8.57%)
Clorox Corporation, 5.50%, 8/10/98 9,110,000 9,097,474
Sherwin-Williams Company,
5.50%-5.52%, 8/12/98-10/2/98 9,302,000 (c) 9,229,460
------------
18,326,934
------------
Municipals (1.40%)
Parish of West Baton Rouge Industrial District #3,
5.63%, 11/1/25, Guaranty: Dow Chemical Co. 3,000,000 (e) 3,000,000
------------
Printing and Publishing (0.87%)
McGraw-Hill Companies, Inc., 5.51%, 8/27/98 1,870,000 1,862,558
------------
Retail Stores (4.67%)
J.C. Penney Funding Inc.,
5.50%, 8/28/98-9/11/98 10,030,000 (c) 9,982,691
------------
See accompanying notes to investments in securities.
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND
Investments in Securities (continued)
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
Commercial Paper & Other Corporate Obligations (continued):
- -------------------------------------------------------------------------------
Utilities - Electric (3.33%)
Citizens Utilities Company, 5.55%, 8/24/98 $3,920,000 $3,906,100
Pacific Gas and Electric Company,
5.85%, 11/12/98 700,000 703,739
Southern California Edison Company,
5.60%, 12/15/98 930,000 929,170
Tampa Electric Company, 5.50%, 8/31/98 1,590,000 (c) 1,582,713
------------
7,121,722
- -------------------------------------------------------------------------------
Total Commercial Paper &
Other Corporate Obligations (cost: $198,898,677) $198,898,677
- -------------------------------------------------------------------------------
Government & Agencies Securities (6.55%):
- -------------------------------------------------------------------------------
Federal Home Loan Bank,
5.40%-5.55%, 11/6/98-3/10/99 14,000,000 (d) 13,997,438
- -------------------------------------------------------------------------------
Total Government & Agencies Securities
(cost: $13,997,438) $13,997,438
- -------------------------------------------------------------------------------
Total Investment in Securities
(cost: $212,896,115) (b) $212,896,115
- -------------------------------------------------------------------------------
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 July 31, 1998.
(e) Interest rate varies to reflect current market conditions; rate shown is
the effective rate on July 31, 1998. 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.
<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, Tax-Free Money Market Fund and
Institutional Prime Money Market Fund (funds within Great Hall Investment
Funds, Inc.) as of July 31, 1998 and the related statements of operations for
the year then ended and for the period from August 11, 1997 (commencement of
operations) to July 31, 1998 for Institutional Prime Money Market Fund and the
statements of changes in net assets for each of the years in the two-year
period ended July 31, 1998 and for the period from August 11, 1997
(commencement of operations) to July 31, 1998 for the Institutional Prime Money
Market Fund and the financial highlights for each of the years in the five-year
period ended July 31, 1998 and for the period from August 11, 1997
(commencement of operations) to July 31, 1998 for the Institutional Prime Money
Market Fund. 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 but not received, 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, Tax-Free Money
Market Fund and Institutional Prime Money Market Fund at July 31, 1998, and the
results of their operations, changes in their net assets and the financial
highlights for the periods stated in the first paragraph above, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 4, 1998
<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, 1998:
Prime U.S. Gov't Tax-Free Inst'l Prime
Money Money Money Money
Market Fund Market Fund Market Fund Market Fund
- -------------------------------------------------------------------------------
Payable Date Per Share Per Share Per Share Per Share
- -------------------------------------------------------------------------------
August 31 $0.00440 $0.00436 $0.00258 $0.00336
September 30 0.00399 0.00394 0.00251 0.00420
November 2 0.00454 0.00450 0.00281 0.00479
November 30 0.00387 0.00384 0.00248 0.00409
January 2 0.00452 0.00444 0.00282 0.00472
January 31 0.00436 0.00430 0.00256 0.00454
March 1 0.00386 0.00383 0.00215 0.00401
March 31 0.00410 0.00406 0.00229 0.00430
April 30 0.00411 0.00405 0.00266 0.00430
May 31 0.00426 0.00420 0.00273 0.00444
June 30 0.00413 0.00408 0.00250 0.00431
July 31 0.00429 0.00421 0.00244 0.00445
-------- -------- -------- --------
$0.05043 $0.04981 $0.03053 $0.05151
======== ======== ======== ========
Source of Distributions
During the period ending July 31, 1998, 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 1999, 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, U.S. Government Money
Market Fund and Institutional Prime 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 1999, each
shareholder will receive a breakdown of income earned by investment category on
a calendar-year basis.
<PAGE>
(This Page Intentionally Left Blank)
This report is signed on behalf of the registrant (or depositor or trustee) in
the City of Minneapolis and State of Minnesota on the eleventh day of
September, 1998
Great Hall Investment Funds, Inc.
---------------------------------
Witness: /s/ Julie K. Getchell By: /s/ J. Scott Spiker
----------------------------- -----------------------------
Julie K. Getchell J. Scott Spiker
President Chief Executive Officer
