<PAGE>
GREAT HALL INVESTMENT FUNDS, INC.
60 SOUTH SIXTH STREET
MINNEAPOLIS, MN 55402
800-934-6674
GREAT HALL-REGISTRATION MARK-
INVESTMENT FUNDS, INC.
- ----------------------
Annual Report
- ----------------------
PRIME MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
TAX-FREE MONEY MARKET FUND
INSTITUTIONAL PRIME MONEY MARKET FUND
INSTITUTIONAL TAX-FREE MONEY MARKET FUND
[LOGO]
July 31, 1999
<PAGE>
[LOGO]
September 3, 1999
To Our Shareholders:
We are pleased to present the July 31, 1999 Annual Report for the Great Hall
Prime, U.S. Government, Tax-Free, Institutional Prime, and Insitutional 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, 1999. 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 declined about 0.75% last fall, as the Fed reduced
interest rates in order to stabilize the international financial system.
Interest rates stayed at these lower levels until the end of May, when it became
apparent that the Fed was about to reverse course and begin to raise the fed
funds rate (the rate at which banks lend each other money overnight). Short-term
interest rates have since risen about 0.50% from their lows. The Fed raised the
fed funds rate from 4.75% to 5.00% in June and to 5.25% in August. The U.S.
economy continues its magnificent performance. Economic growth is continuing at
about 4%, unemployment is at the lowest rate in 30 years, inflation remains low,
and the federal budget is in balance. The Fed will continue to monitor the
economy's growth rate and the tightness of the labor market to determine if
further increases in short-term interest rates are warranted.
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. None
of the Funds have ever invested in "funding agreements," which have recently
experienced some difficulties. 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
brought the net asset level of the Funds to $5.7 billion as of July 31, 1999.
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,
[LOGO]
Raye Kanzenbach
Chief Investment Officer
Great Hall Investment Funds, Inc.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 1999
<TABLE>
<CAPTION>
PRIME U.S. GOVERNMENT TAX-FREE INST'L PRIME INST'L TAX-FREE
MONEY MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND MARKET FUND
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities
at market value (note
2), amortized cost
$4,508,972,711;
$269,955,551;
$495,442,943;
$308,611,703; and
$52,872,294,
respectively........... $4,508,972,711 $269,955,551 $ 495,442,943 $ 308,611,703 $52,872,294
Cash in bank on demand
deposit................ 985,051 68,282 57,060 46,595 44,401
Accrued interest
receivable............. 15,480,907 1,613,156 2,059,968 1,730,760 260,987
Organization costs (note
2)..................... -- -- -- 5,099 --
- ----------------------------------------------------------------------------------------------------------------
Total assets............. 4,525,438,669 271,636,989 497,559,971 310,394,157 53,177,682
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES:
Accrued investment
advisory fee........... 1,714,632 99,924 219,148 69,512 --
Other accrued expenses... 1,024,240 160,580 202,191 141,548 29,001
- ----------------------------------------------------------------------------------------------------------------
Total liabilities........ 2,738,872 260,504 421,339 211,060 29,001
- ----------------------------------------------------------------------------------------------------------------
Net assets applicable to
outstanding capital
stock.................. $4,522,699,797 $271,376,485 $ 497,138,632 $ 310,183,097 $53,148,681
- ----------------------------------------------------------------------------------------------------------------
REPRESENTED BY:
Capital stock -
authorized 100 billion
shares of $.01 par
value for each Fund,
outstanding
4,522,699,797;
271,376,485; and
497,138,632 shares,
respectively........... $ 45,226,998 $ 2,713,765 $ 4,971,386 $ -- $ --
Capital stock -
authorized 10 billion
shares of $.01 par
value for each Fund,
outstanding
310,183,097; and
53,148,681 shares,
respectively........... -- -- -- 3,101,831 531,487
Additional paid-in
capital................ 4,477,472,799 268,662,720 492,167,246 307,081,266 52,617,194
- ----------------------------------------------------------------------------------------------------------------
Total - representing
net assets
applicable to
outstanding capital
stock.............. $4,522,699,797 $271,376,485 $ 497,138,632 $ 310,183,097 $53,148,681
- ----------------------------------------------------------------------------------------------------------------
Net asset value per share
of outstanding capital
stock.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
PRIME U.S. GOVERNMENT TAX-FREE INST'L PRIME INST'L TAX-FREE
MONEY MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND MARKET FUND*
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
INCOME:
Interest............... $244,054,713 $13,723,708 $17,258,735 $14,811,433 $1,237,071
- ------------------------------------------------------------------------------------------------------------
EXPENSES (NOTE 4):
Investment advisory
fee.................. 20,639,795 1,177,276 2,661,827 714,258 100,138
Custodian, accounting
and
transfer agent
fees................. 239,700 46,300 74,650 33,050 22,800
Sub-accounting fees.... 5,187,000 141,400 137,900 2,400 1,050
Reports to
shareholders......... 1,568,074 40,250 31,300 3,000 900
Amortization of
organization costs... -- -- -- 1,683 --
Directors' fees........ 6,199 6,199 6,199 8,799 7,500
Audit and legal fees... 73,500 31,000 41,000 29,900 21,726
Registration fees...... 463,089 121,995 200,690 158,227 56,244
Administrative......... 27,750 2,200 2,400 5,200 1,000
Other expenses......... 60,434 28,165 6,676 2,849 8,670
- ------------------------------------------------------------------------------------------------------------
Total expenses........... 28,265,541 1,594,785 3,162,642 959,366 220,028
Less expenses voluntarily
waived or absorbed by
Advisor................ -- -- -- -- (100,138)
- ------------------------------------------------------------------------------------------------------------
Total net expenses....... 28,265,541 1,594,785 3,162,642 959,366 119,890
- ------------------------------------------------------------------------------------------------------------
Investment income --
net.................... 215,789,172 12,128,923 14,096,093 13,852,067 1,117,181
- ------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............. $215,789,172 $12,128,923 $14,096,093 $13,852,067 $1,117,181
- ------------------------------------------------------------------------------------------------------------
</TABLE>
* Period from September 23, 1998 (commencement of operations) to July 31,
1999.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. GOVERNMENT
PRIME MONEY MARKET FUND MONEY MARKET FUND
- -----------------------------------------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Operations:
Investment income,
net.................. $ 215,789,172 $ 196,120,553 $ 12,128,923 $ 10,786,378
- -----------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations........... 215,789,172 196,120,553 12,128,923 10,786,378
- -----------------------------------------------------------------------------------------
Distributions to
shareholders from:
Investment income --
net.................. (215,789,172) (196,120,553) (12,128,923) (10,786,378)
- -----------------------------------------------------------------------------------------
Total distributions to
shareholders......... (215,789,172) (196,120,553) (12,128,923) (10,786,378)
- -----------------------------------------------------------------------------------------
Capital share
transactions at net
asset
value of $1.00 per
share:
Proceeds from
sales.............. 2,663,848,899 5,231,760,076 325,052,784 295,197,283
Shares issued for
reinvestment
of distributions... 215,789,172 196,120,553 12,128,923 10,786,378
Payment for shares
redeemed........... (3,201,289,989) (3,713,382,899) (294,734,706) (259,209,672)
- -----------------------------------------------------------------------------------------
Increase/(decrease) in
net assets from
capital share
transactions......... (321,651,918) 1,714,497,730 42,447,001 46,773,989
- -----------------------------------------------------------------------------------------
Total increase/(decrease)
in net assets.......... (321,651,918) 1,714,497,730 42,447,001 46,773,989
- -----------------------------------------------------------------------------------------
Net assets at beginning
of period.............. 4,844,351,715 3,129,853,985 228,929,484 182,155,495
- -----------------------------------------------------------------------------------------
Net assets at end of
period................. $ 4,522,699,797 $ 4,844,351,715 $ 271,376,485 $ 228,929,484
- -----------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE INSTITUTIONAL PRIME
MONEY MARKET FUND MONEY MARKET FUND INSTITUTIONAL
TAX-FREE
MONEY MARKET
FUND
-------------------------------------------------------------------------
Period from Period from
Aug. 11, Sept. 23,
Year Year Year 1997* 1998*
Ended Ended Ended to July 31, to July 31,
July 31, 1999 July 31, 1998 July 31, 1999 1998 1999
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Operations:
Investment income,
net.................. $ 14,096,093 $ 14,463,281 $ 13,852,067 $ 5,595,853 $ 1,117,181
- ----------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations........... 14,096,093 14,463,281 13,852,067 5,595,853 1,117,181
- ----------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Investment income --
net.................. (14,096,093) (14,463,281) (13,852,067) (5,595,853) (1,117,181)
- ----------------------------------------------------------------------------------------------------
Total distributions to
shareholders......... (14,096,093) (14,463,281) (13,852,067) (5,595,853) (1,117,181)
- ----------------------------------------------------------------------------------------------------
Capital share
transactions at net
asset
value of $1.00 per
share:
Proceeds from
sales.............. 568,704,391 599,371,172 784,765,959 439,240,574 159,109,858
Shares issued for
reinvestment
of distributions... 14,096,093 14,463,281 13,852,067 5,595,853 1,117,181
Payment for shares
redeemed........... (631,510,518) (490,726,196) (702,220,139) (231,051,217) (107,078,358)
- ----------------------------------------------------------------------------------------------------
Increase/(decrease) in
net assets from
capital share
transactions......... (48,710,034) 123,108,257 96,397,887 213,785,210 53,148,681
- ----------------------------------------------------------------------------------------------------
Total increase/(decrease)
in net assets.......... (48,710,034) 123,108,257 96,397,887 213,785,210 53,148,681
- ----------------------------------------------------------------------------------------------------
Net assets at beginning
of period.............. 545,848,666 422,740,409 213,785,210 -- --
- ----------------------------------------------------------------------------------------------------
Net assets at end of
period................. $ 497,138,632 $ 545,848,666 $ 310,183,097 $ 213,785,210 $ 53,148,681
- ----------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<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 five
funds; Prime, U.S. Government, Tax-Free, Institutional Prime, and the
Institutional Tax-Free 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 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.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ORGANIZATION COSTS
Organization expenses were incurred in connection with the start-up and
initial registration of both Institutional Prime and Institutional Tax-Free
Money Market Funds. The Institutional Prime organizational expenses are being
amortized over 60 months while the Institutional Tax-Free organizational
expenses were expensed during the period.
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, 1998
to July 31, 1999 (September 23, 1998 to July 31, 1999 for Institutional
Tax-Free Money Market Fund) were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES PROCEEDS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Prime Money Market Fund.................................. $ 65,587,783,941 $ 65,909,916,018
U.S. Government Money Market Fund........................ 8,459,142,198 8,417,132,171
Tax-Free Money Market Fund............................... 1,080,231,905 1,129,084,670
Institutional Prime Money Market Fund.................... 5,365,406,857 5,269,691,269
Institutional Tax-Free Money Market Fund................. 204,623,322 151,751,028
</TABLE>
4. FEES AND EXPENSES
The Company has entered into an investment advisory and management agreement
with Insight Investment Management (IIM), a wholly-owned subsidiary of Dain
Rauscher Corporation, 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 fees for both the Institutional Prime and
Institutional Tax-Free Money Market Funds are equal to an annual rate of
0.25% of net assets. IIM voluntarily waived its advisory fees for the
Institutional Tax-Free Money Market Fund for the current period.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
4. FEES AND EXPENSES (continued)
Each of the five funds has also entered into sub-accounting agreements with
affiliate Dain Rauscher Incorporated (DRI) where the firm 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 $18
per shareholder account plus certain out-of-pocket expenses. Under a prior
agreement which ended November 17, 1998 the fee was 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 $49,525 for the period ended July 31, 1999 were
paid to a law firm of which the Secretary of the funds is a partner.
8
<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 July 31,
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 1995
<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 0.05
Distributions to
shareholders from
investment income...... (0.05) (0.05) (0.05) (0.05) (0.05)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------
Total return............. 4.6% 5.0% 4.9% 5.0% 4.9%
Net assets at end
of period (000's
omitted)............... $ 4,522,700 $ 4,844,352 $ 3,129,854 $ 2,405,456 $1,598,925
Ratio of expenses to
average daily net
assets................. 0.61% 0.63% 0.64% 0.70% 0.77%
Ratio of net investment
income to average daily
net assets............. 4.62% 5.04% 4.90% 4.93% 4.93%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
9
<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 July 31,
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 1995
<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 0.05
Distributions to
shareholders from
investment income...... (0.05) (0.05) (0.05) (0.05) (0.05)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------------
Total return............. 4.5% 5.0% 4.8% 4.9% 4.8%
Net assets at end
of period (000's
omitted)............... $ 271,376 $ 228,929 $ 182,155 $ 146,685 $122,249
Ratio of expenses to
average daily net
assets................. 0.59% 0.59% 0.60% 0.65% 0.73%
Ratio of net investment
income to average daily
net assets............. 4.50% 4.98% 4.85% 4.87% 4.94%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
10
<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 July 31,
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 1995
<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 0.03
Distributions to
shareholders from
investment income...... (0.03) (0.03) (0.03) (0.03) (0.03)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------------
Total return............. 2.7% 3.1% 3.0% 3.0% 3.1%
Net assets at end
of period (000's
omitted)............... $ 497,139 $ 545,849 $ 422,740 $ 359,153 $363,273
Ratio of expenses to
average daily net
assets................. 0.59% 0.58% 0.58% 0.59% 0.60%
Ratio of net investment
income to average
daily net assets....... 2.65% 3.05% 3.02% 3.03% 3.14%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
5. FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
INSTITUTIONAL PRIME MONEY MARKET FUND
- ----------------------------------------------------------------------------
Period from
August 11, 1997*
Year ended to
July 31, 1999 July 31, 1998
<S> <C> <C>
- ----------------------------------------------------------------------------
Net asset value, beginning of period.... $ 1.00 $ 1.00
- ----------------------------------------------------------------------------
Income from investment operations....... 0.05 0.05
Distributions to shareholders from
investment income..................... (0.05) (0.05)
- ----------------------------------------------------------------------------
Net asset value, end of period.......... $ 1.00 $ 1.00
- ----------------------------------------------------------------------------
Total return............................ 4.9% 5.2%
Net assets at end of period (000's
omitted).............................. $ 310,183 $213,785
Ratio of expenses to average daily net
assets**.............................. 0.34% 0.39%
Ratio of net investment income to
average daily net assets**............ 4.85% 5.27%
- ----------------------------------------------------------------------------
</TABLE>
* 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.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
5. FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
INSTITUTIONAL TAX-FREE MONEY MARKET FUND
- ------------------------------------------------------------------------
Period from
September 23, 1998*
to
July 31, 1999
<S> <C>
- ------------------------------------------------------------------------
Net asset value, beginning of period.............. $ 1.00
- ------------------------------------------------------------------------
Income from investment operations................. 0.03
Distributions to shareholders from investment
income.......................................... (0.03)
- ------------------------------------------------------------------------
Net asset value, end of period.................... $ 1.00
- ------------------------------------------------------------------------
Total return...................................... 2.5%
Net assets at end of period (000's omitted)....... $53,149
Ratio of expenses to average daily net assets**... 0.30%
Ratio of net investment income to average daily
net assets**.................................... 2.79%
- ------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
** Adjusted to an annual basis. Various fund fees and expenses were
voluntarily waived or absorbed by IIM for the Institutional Tax-Free Money
Market Fund during the period ended July 31, 1999. Had the Fund paid all
expenses, the ratio of expenses and net investment income to average daily
net assets would have been 0.55%/2.54% for the period ended July 31, 1999.
13
<PAGE>
PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
<S> <C> <C>
- ----------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (99.37%):
- ----------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS (1.78%)
Archer Daniels Midland Company, 5.10%,
9/21/99 $ 3,000,000 $ 2,978,325
Cargill Inc., 5.12%-5.42%, 9/3/99-1/19/00 78,480,000 77,555,799
------------------
80,534,124
------------------
BANKS - DOMESTIC (15.13%)
Bank of America, 5.25%, 2/25/00 30,000,000 30,000,000
Branch Banking & Trust Company,
5.03%-5.25%, 9/15/99-10/8/99 14,000,000 14,016,831
COFCO Capital Corporation, 5.11%, 8/17/99,
LOC Bank of America 10,100,000 10,077,062
Comerica Bank, 5.17%, 7/13/00 20,000,000(d) 19,992,508
Fifth Third Bank, Cincinatti, 5.19%,
10/20/99 25,000,000 25,000,000
First National Bank of Chicago,
5.15%-5.20%, 9/2/99-10/19/99 43,740,000 43,740,000
First Tennessee Bank, 4.93%-5.05%,
8/10/99-8/16/99 42,000,000 42,000,000
First Union National Bank, Charlotte,
5.05%-5.32%, 10/21/99-11/10/99 64,700,000(d) 64,700,000
Key Bank N.A., Cleveland, 4.98%-5.14%,
9/23/99-2/18/00 50,000,000(d) 50,004,244
LaSalle Bank, Chicago, 5.01%-5.26%,
8/18/99-2/1/00 80,000,000 79,996,238
NationsBank, 5.17%, 9/21/99 10,000,000 10,000,000
Old Kent Bank, 5.00%, 8/17/99 30,000,000 30,000,000
PNC Bank N.A., 5.15%, 8/3/99-6/7/00 75,000,000(d) 74,987,285
Regionsbank N.A., Birmingham, 4.87%-5.73%,
8/18/99-7/14/00 46,100,000 46,099,792
Southtrust Bank N.A., Atlanta, 4.89%,
8/12/99 25,000,000 25,000,146
Southtrust Bank N.A., Birmingham,
5.09%-5.20%, 9/20/99-4/28/00 64,300,000 64,285,347
U.S. Bank N.A., Minneapolis, 4.85%-5.14%,
8/10/99-9/7/99 54,000,000 54,000,000
------------------
683,899,453
------------------
BANKS - OTHER (19.11%)
ABN - AMRO, 5.01%, 11/17/99 20,000,000 19,997,716
Accor S.A., 4.96%-5.13%, 8/6/99-9/14/99,
LOC Banque Nationale De Paris 65,000,000 64,767,383
Abbey National Treasury Services,
4.99%-5.13%, 10/19/99-5/4/00 61,200,000(d) 61,006,457
Banco Nationale De Mexico, 5.13%, 9/16/99,
LOC Barclays Bank 20,000,000 19,868,900
Banque National De Paris, 5.14%, 9/23/99 20,000,000 20,000,000
Bank of Nova Scotia, 4.86%-5.53%,
8/6/99-1/21/00 80,000,000 79,959,000
Canadian Imperial Bank of Commerce,
5.03%-5.17%, 1/24/00-2/23/00 67,000,000 67,154,029
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
14
<PAGE>
PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (CONTINUED)
- ----------------------------------------------------------------------------------
BANKS - OTHER (CONTINUED)
Deutsche Bank, 4.79%-5.10%, 8/4/99-4/19/00 $ 87,250,000 $ 87,158,970
Dresdner Bank A.G., New York, 5.06%-5.14%,
1/14/00-7/24/00 60,000,000 59,989,897
Formosa Plastics USA, 5.05%-5.18%,
8/17/99-10/12/99,
LOC ABN - AMRO & Bank of America 45,000,000 44,736,689
JMG Funding Inc., 5.12%-5.25%,
9/1/99-9/14/99,
LOC Societe Generale 31,300,000 31,120,285
National Westminster Bank, 4.98%-5.08%,
1/7/00-4/10/00 45,000,000 44,988,200
Pemex Capital Capital Corporation,
5.13%-5.15%, 9/20/99-9/24/99,
LOC Societe Generale 37,519,000 37,241,135
Petroleo Brasilieiro, 4.82%, 8/9/99, LOC
Barclays Bank 20,000,000 19,978,578
Presbyterian Healthcare Services, 5.11%,
9/8/99,
LOC Toronto-Dominion Bank 22,850,000 22,726,750
Rabobank Nederland, 4.98%-5.11%,
1/10/00-2/16/00 29,000,000 28,995,453
Royal Bank of Canada, 5.04%, 2/8/00 11,000,000 10,997,489
Sinochem America, 5.00%-5.13%,
8/12/99-9/15/99,
LOC ABN - AMRO 30,000,000 29,880,896
Toronto Dominion Holdings, Inc.,
5.00%-5.16%, 10/29/99-1/5/00 49,000,000 48,614,935
United Bank of Switzerland A.G.,
5.20%-5.70%, 3/1/00-7/10/00 65,000,000 64,978,815
------------------
864,161,577
------------------
CHEMICALS (1.58%)
Air Products and Chemicals, Inc., 5.08%,
8/13/99 20,000,000 19,966,133
Henkel Corporation, 5.10%-5.19%,
9/16/99-11/12/99 52,100,000(c) 51,577,271
------------------
71,543,404
------------------
CONGLOMERATES (1.11%)
Diageo Capital PLC, 5.10%, 8/2/99 50,000,000(c) 49,992,917
------------------
DRUGS AND COSMETICS (1.93%)
American Home Products, 4.92%-5.72%,
8/3/99-2/15/00 48,375,000(c) 48,198,634
Becton Dickinson Company, 5.16%-5.38%,
10/21/99-1/13/00 40,000,000 39,274,633
------------------
87,473,267
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
15
<PAGE>
PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (CONTINUED)
- ----------------------------------------------------------------------------------
FINANCIAL - AUTO (1.40%)
Ford Motor Credit Corporation,
5.02%-5.11%, 8/26/99-9/8/99 $ 33,400,000 $ 33,245,408
General Motors Acceptance Corporation,
4.97%, 8/17/99 10,000,000 9,977,911
Toyota Motor Credit Corporation, 5.77%,
7/6/00 20,000,000 20,000,000
------------------
63,223,319
------------------
FINANCIAL - AVIATION (2.15%)
AlliedSignal Inc., 5.10%-5.20%,
8/19/99-10/12/99 68,815,000(c) 68,291,220
International Lease Finance Corporation,
4.79%-4.90%, 8/3/99-8/5/99 29,000,000 28,988,107
------------------
97,279,327
------------------
FINANCIAL - DIVERSIFIED BUSINESS (13.95%)
American General Finance Corporation,
4.90%-5.19%, 8/2/99-2/15/00 91,450,000 91,260,911
Associates Corporation of North America,
5.10%-5.28%, 8/2/99-9/1/99 75,655,000 75,662,786
CIT Group Holdings, 5.29%, 1/14/00 30,000,000(d) 29,988,606
Commercial Credit Corporation,
4.90%-5.12%, 8/4/99-9/14/99 84,405,000 84,217,321
General Electric Capital Corporation,
4.96%, 8/10/99 25,000,000 24,969,000
Goldman Sachs Group, 5.18%-5.41%,
11/17/99-1/13/00 65,000,000 65,000,000
Household Finance Company, 5.10%, 9/13/99 30,000,000 29,817,250
Merrill Lynch & Co., 4.98%-5.50%,
9/30/99-3/6/00 82,000,000(d) 82,032,097
Morgan (J.P.) and Company, 5.00%, 8/20/99 20,000,000 19,947,222
Morgan Stanley Dean Witter Discover,
4.98%-5.14%, 8/13/99-3/2/00 70,000,000(d) 69,984,041
U.S. Bancorp Inc., 4.97%-5.10%,
8/13/99-9/7/99 24,240,000 24,148,792
Wells Fargo Company, 5.01%-5.02%,
8/10/99-8/25/99 33,940,000 33,855,607
------------------
630,883,633
------------------
FINANCIAL - DIVERSIFIED BUSINESS, ASSET-BACKED (20.49%)
Asset Securitization Coop. Corporation,
5.10%-5.17%, 8/24/99-9/17/99 84,750,000(c) 84,326,980
Barton Capital Corporation, 5.05%-5.18%,
8/10/99-10/8/99 100,080,000(c) 99,506,522
Delaware Funding Corporation, 5.05%-5.12%,
8/26/99-9/10/99 98,800,000(c) 98,331,171
Edison Asset Securitization, 4.82%-5.18%,
8/20/99-10/5/99 87,117,000(c) 86,673,165
Falcon Asset Securitization, 4.84%-5.22%,
8/12/99-10/29/99 84,000,000(c) 83,679,328
Fleet Funding Corporation, 5.11%, 9/3/99 11,000,000(c) 10,948,474
Park Avenue Receivables Corporation,
5.11%-5.17%, 8/20/99-9/10/99 80,733,000(c) 80,429,675
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
16
<PAGE>
PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (CONTINUED)
- ----------------------------------------------------------------------------------
FINANCIAL - DIVERSIFIED BUSINESS,
ASSET-BACKED (CONTINUED)
Preferred Receivables Funding Corporation,
4.94%-5.13%, 8/5/99-9/16/99 $ 66,890,000(c) $ 66,604,014
Receivables Capital Corporation,
4.98%-5.18%, 8/6/99-10/7/99 94,415,000(c) 93,856,282
Thunder Bay Funding, 4.82%-5.16%,
8/3/99-10/4/99 90,675,000(c) 90,251,889
Triple A One Funding, 5.04%-5.13%,
8/5/99-9/9/99 43,104,000(c) 42,929,937
Windmill Funding Corporation, 5.07%-5.14%,
8/6/99-9/27/99 89,830,000(c) 89,413,249
------------------
926,950,686
------------------
FOOD AND BEVERAGE (4.86%)
Anheuser Busch Companies Inc., 5.08%,
7/6/00 36,200,000 36,176,618
Bestfoods Company, 5.12%, 9/16/99 15,000,000 14,901,867
Coca Cola Company, 4.87%-5.08%,
8/2/99-8/26/99 98,750,000 98,536,144
H.J. Heinz Company, 4.90%-5.10%,
8/5/99-8/24/99 70,250,000 70,127,777
------------------
219,742,406
------------------
GOVERNMENT - DOMESTIC (0.88%)
Private Export Funding Corporation,
5.08%-5.16%, 9/15/99-10/12/99 40,340,000 39,984,591
------------------
HOUSEHOLD PRODUCTS (4.86%)
Clorox Corporation, 5.00%-5.10%,
8/13/99-9/16/99 60,170,000 59,884,759
Fortune Brands Inc., 5.00%-5.14%,
8/2/99-10/1/99 60,290,000(c) 60,062,107
Proctor & Gamble Company, 4.88%-5.09%,
8/6/99-8/23/99 100,000,000 99,786,972
------------------
219,733,838
------------------
MANUFACTURING (0.76%)
Caterpillar Financial Services Inc.,
4.80%-5.62%, 8/12/99-3/15/00 34,250,000 34,242,017
------------------
OIL SERVICES (1.90%)
American Petrofina Holding Company, 5.03%,
8/16/99 5,000,000 4,989,521
Halliburton Company, 4.90%-4.95%,
8/4/99-8/11/99 56,110,000 56,056,368
Petrofina Delaware, 5.00%, 8/12/99 25,000,000 24,961,806
------------------
86,007,695
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
17
<PAGE>
PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (CONTINUED)
- ----------------------------------------------------------------------------------
TELECOMMUNICATIONS (2.73%)
AT&T Company, 5.27%, 7/13/00 $ 30,000,000(d) $ 29,988,623
BellSouth Telecommunications, 4.88%-5.14%,
8/3/99-9/13/99 93,765,000(c) 93,584,407
------------------
123,573,030
------------------
UTILITIES - ELECTRIC (2.82%)
Baltimore Gas & Electric Company,
4.97%-5.10%, 8/13/99-9/1/99 48,275,000(d) 48,250,733
Carolina Power & Light, 5.05%, 9/13/99 32,000,000 31,806,978
Northern States Power Company, 5.10%,
9/20/99 23,000,000 22,837,083
Southern California Edison, 5.11%, 9/10/99 25,000,000 24,858,056
------------------
127,752,850
------------------
UTILITIES - FINANCIAL (1.93%)
National Rural Utilities Cooperative
Finance Corporation,
4.78%-5.18%, 8/9/99-6/26/00 87,400,000 87,144,577
- ----------------------------------------------------------------------------------
Total Commercial Paper & Other Corporate
Obligations (cost: $4,494,122,711) $ 4,494,122,711
- ----------------------------------------------------------------------------------
TAXABLE MUNICIPALS (0.33%):
- ----------------------------------------------------------------------------------
New York City G.O., 4.90%, 8/11/99, FGIC
Insured 10,450,000 10,450,000
State of Connecticut G.O. 5.65%, 8/1/99 4,400,000 4,400,000
- ----------------------------------------------------------------------------------
Total Taxable Municipals (cost: $14,850,000) $ 14,850,000
- ----------------------------------------------------------------------------------
Total Investment in Securities (cost:
$4,508,972,711) (b) $ 4,508,972,711
- ----------------------------------------------------------------------------------
</TABLE>
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, 1999.
18
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
INVESTMENTS IN SECURITIES
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
<S> <C> <C>
- ----------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
GOVERNMENT & AGENCIES SECURITIES (91.26%):
- ----------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (13.45%)
5.05%-6.15%, 9/24/99-5/12/00 $ 36,500,000 $ 36,498,358
FEDERAL HOME LOAN MORTGAGE CORPORATION (36.76%)
4.76%-6.13%, 8/19/99-7/14/00 99,970,000(c) 99,764,772
FEDERAL HOME LOAN BANK (18.57%)
4.75%-5.15%, 8/20/99-5/12/00 50,500,000(c) 50,385,371
FEDERAL FARM CREDIT BANK (12.90%)
5.00%-5.06%, 3/10/00-7/3/00 35,000,000(c) 34,995,542
STUDENT LOAN MARKETING ASSOCIATION (9.21%)
5.16%-5.31%, 12/10/99-7/27/00 25,000,000(c) 25,006,018
TENNESSEE VALLEY AUTHORITY (0.37%)
4.86%, 10/1/99 1,000,000 1,005,490
- ----------------------------------------------------------------------------------
Total Government & Agencies Securities (cost:
$247,655,551) $ 247,655,551
- ----------------------------------------------------------------------------------
REPURCHASE AGREEMENT (8.22%)
- ----------------------------------------------------------------------------------
Merrill Lynch, 5.05%, acquired 7/30/99 and
due 8/2/99 with accrued interest of
$9,385 (collateralized by $23,065,000
Federal National Mortgage Association
Note, 5.90%, 4/12/04) (cost:
$22,300,000) 22,300,000 22,300,000
- ----------------------------------------------------------------------------------
Total Investment in Securities (cost:
$269,955,551) (b) $ 269,955,551
- ----------------------------------------------------------------------------------
</TABLE>
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, 1999.
19
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
<S> <C> <C>
- ----------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
ALABAMA (1.62%)
Morgan County Decatur General Hospital,
3.55%, 3/1/00,
AMBAC Insured $ 965,000 $ 975,130
Town of Chatom Independent Development
Board, 3.35%, 8/13/99,
Guaranty: National Rural Coop Finance
Corporation 7,100,000 7,100,000
------------------
8,075,130
------------------
ALASKA (0.76%)
Anchorage General Obligation, 3.60%,
8/1/00, MBIA Insured 2,000,000 2,019,414
Anchorage Alaska Water Revenue, 3.50%,
8/1/99, FSA Insured 1,000,000 1,000,000
Fairbanks North Star Borough, 3.25%,
4/1/00, FSA Insured 745,000 759,527
------------------
3,778,941
------------------
ARIZONA (2.79%)
Maricopa County PCR (El Paso Elect),
3.10%, 7/1/14-12/1/14,
LOC Barclays Bank 12,300,000(b) 12,300,000
Scottsdale Arizona IDA Hospital, 3.24%,
9/1/99, AMBAC Insured 1,560,000 1,563,884
------------------
13,863,884
------------------
CALIFORNIA (1.29%)
Los Angeles Regional Airports Improvement
Corp. Lease Revenue
3.40%, 12/1/24, LOC Wachovia Bank of
Georgia 6,400,000(b) 6,400,000
------------------
COLORADO (4.39%)
Adams County Family Housing Revenue
(Hunters Cove Project)
Series 1985A, 3.25%, 1/15/14, LOC GECC 7,500,000(b) 7,500,000
Association of School Boards (Pueblo
School District),
3.20%, 12/1/99, Prerefunded 1,555,470 1,534,593
Aurora Centretech Metro District, 3.40%,
12/1/99,
LOC Banque National De Paris 1,000,000 1,000,000
Central Platte Valley Metro District,
3.55%, 10/1/99, MBIA Insured 1,000,000 999,998
Dove Valley Metro District, 3.38%,
11/1/99,
LOC Banque National De Paris 4,925,000 4,925,000
Health Facilities Authority Revenue
(Visiting Nurses), 3.40%, 7/1/22,
LOC Norwest Bank 1,030,000(b) 1,030,000
Interstate South Metro District, 3.38%,
11/1/99,
LOC Banque National De Paris 3,270,000 3,270,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
20
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
COLORADO (CONTINUED)
SBC Metro District, 3.35%, 12/1/99, LOC
U.S. Bank $ 1,555,000 $ 1,555,000
------------------
21,814,591
------------------
DELAWARE (1.25%)
Delaware Valley Regional Finance
Authority, 3.05%, 12/1/20,
LOC Credit Suisse 2,600,000(b) 2,600,000
New Castle County Development Authority,
3.15%, 8/15/20,
LOC First Union National Bank 3,592,500(b) 3,592,500
------------------
6,192,500
------------------
DISTRICT OF COLUMBIA (0.30%)
District of Columbia G.O., 3.10%, 12/1/99,
FSA Insured 1,485,000 1,494,732
------------------
FLORIDA (3.93%)
Hillsborough County Florida Utility,
3.05%-3.45%, 8/1/99, MBIA Insured 2,500,000 2,500,000
Jacksonville Education Facility Revenue,
3.15%, 10/1/22, LOC First Union 4,000,000(b) 4,000,000
Orange County Housing Finance Authority
Housing Revenue,
3.10%, 12/1/22 LOC Citibank 2,200,000(b) 2,200,000
Palm Beach Housing Finance Development
Authority, 3.00%, 11/1/07,
LOC Credit Suisse 5,000,000(b) 5,000,000
West Orange Memorial Hospital,
3.25%-3.30%, 8/2/99-8/10/99,
LOC Rabobank Nederland 5,850,000 5,850,000
------------------
19,550,000
------------------
GEORGIA (5.47%)
De Kalb Private Hospital Authority, 3.05%,
3/1/24, LOC Suntrust Bank 7,000,000(b) 7,000,000
Fulton County Residential Home Care,
3.45%, 1/1/18,
LOC Rabobank Nederland 1,100,000(b) 1,100,000
Hapeville Development Authority, 3.40%,
11/1/15, LOC Deutsche Bank 2,200,000(b) 2,200,000
Municipal Electric Authority of Georgia,
3.15%, 1/1/26, LOC ABN-AMRO 16,900,000(b) 16,900,000
------------------
27,200,000
------------------
ILLINOIS (10.66%)
Chicago O'Hare International Airport,
3.00%, 1/1/15,
LOC Societe Generale 3,200,000(b) 3,200,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
21
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
ILLINOIS (CONTINUED)
City of Springfield Community Improvement
Revenue Bonds Series 1985, (Realty
Restoration Project), 3.40%, 12/1/15,
collateralized in U.S. Governments $ 3,100,000(b) $ 3,100,000
City of Springfield MFHR (OT Center
Limited Project), 3.40%, 12/1/15,
collateralized in U.S. Governments 7,700,000(b) 7,700,000
Cook County Community College #508, 3.15%,
12/1/99, MBIA Insured 1,000,000 1,013,547
Development Finance Authority (A.E.
Stanley Manufacturing), 3.00%, 12/1/05,
LOC Union Bank of Switzerland 1,600,000(b) 1,600,000
Development Finance Authority (Jewish
Elderly Council), 3.15%, 3/1/25,
LOC LaSalle National Bank 600,000(b) 600,000
Education Facility Authority Demand
Revenue Bond
(Cultural Pool Program), 3.10%,
12/1/25,
LOC First National Bank of Chicago 4,265,000(b) 4,265,000
Galesburg Revenue (Knox College),
3.15%-3.25%, 7/1/24-3/1/31,
LOC LaSalle National Bank 8,500,000(b) 8,500,000
Health Facilities Authority (Alexian
Brothers Medical Center),
3.20%-3.35%, 8/23/99-9/8/99, MBIA
Insured 4,300,000 4,300,000
Health Facilities Authority (Children's
Memorial Hospital Project), Series
1985B, 3.20%, 11/1/15, LOC First
National Bank of Chicago 9,900,000(b) 9,900,000
Joliet Regional Port District Bonds,
3.50%, 7/15/03,
Guaranty: Dow Chemical 8,795,000(b) 8,795,000
------------------
52,973,547
------------------
INDIANA (3.73%)
Health Facilities Financing Authority
Hospital Revenue Bonds Series 1990,
3.00%, 11/1/20, LOC National Bank of
Detroit 2,000,000(b) 2,000,000
Health Facilities Financing Authority,
3.00%, 8/1/06-1/1/22,
LOC First Chicago 7,800,000(b) 7,800,000
Health Facilities Financing Authority
(Capital Access Designated Pool
Program) 3.15%, 12/1/02-4/1/13,
LOC Comerica Bank 6,750,000(b) 6,750,000
Secondary Market for Education Loans,
3.35%, 6/1/00, AMBAC Insured 2,000,000 2,004,025
------------------
18,554,025
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
22
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
IOWA (5.31%)
Financial Authority Revenue (Burlington
Medical Center), 3.20%, 6/1/27, FSA
Insured $ 20,400,000(b) $ 20,400,000
Higher Education Loan Authority Revenue
(Palmer Chiropractic), 3.55%, 4/1/27,
LOC Firstar Bank N.A. 3,000,000(b) 3,000,000
Mount Vernon Private College Project
(Cornell) Series 1985, 3.20%, 10/1/15,
LOC U.S. Bank 3,000,000(b) 3,000,000
------------------
26,400,000
------------------
KANSAS (0.50%)
State Development Authority Revenue,
3.25%, 6/1/00, FSA Insured 2,470,000 2,485,008
------------------
KENTUCKY (0.56%)
Economic Development Finance Authority
(Baptist Healthcare),
3.05%, 8/15/99, MBIA Insured 1,800,000 1,800,642
State Property and Buildings Community
Revenue, 3.05%, 9/1/99 1,000,000 1,000,908
------------------
2,801,550
------------------
LOUISIANA (1.52%)
Orleans Parish School Board, 3.20%,
2/1/00, MBIA Insured 3,000,000 2,953,036
Parish of East Baton Rouge, 3.40%,
11/1/19, Guaranty: Exxon Corporation 4,600,000(b) 4,600,000
------------------
7,553,036
------------------
MARYLAND (5.43%)
Anne Arundel County Port Facilities
Revenue, 3.35%, 8/5/99-10/13/99,
Guaranty: Baltimore Gas & Electric 6,200,000 6,200,000
Baltimore County Consolidated Public
Improvement Bonds, 3.15%, 4/1/00,
Prerefunded and Escrowed in Governments 2,380,000 2,484,550
Montgomery County Housing Opportunity,
3.15%, 11/1/07, LOC FHLMC 18,300,000(b) 18,300,000
------------------
26,984,550
------------------
MASSACHUSETTS (0.31%)
State Construction Loans, 3.15%, 3/1/00,
Escrowed in Governments 1,500,000 1,563,988
------------------
MICHIGAN (2.02%)
Delta County Economic Development
Authority, 3.40%, 12/1/23,
LOC Bank of Nova Scotia 5,800,000(b) 5,800,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
23
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
MICHIGAN (CONTINUED)
Farmington Public School District, 3.25%,
5/1/00, Guaranty: School Bond Loan
Program $ 815,000 $ 818,739
Kent Hospital Finance Authority (Spectrum
Health), 3.00%, 1/15/26,
MBIA Insured 3,400,000(b) 3,400,000
------------------
10,018,739
------------------
MINNESOTA (3.34%)
City of Duluth Economic Authority, 3.45%,
6/1/19,
LOC Credit Local De France 5,100,000(b) 5,100,000
City of Duluth Tax Increment Revenue,
3.10%, 9/1/10,
LOC Wachovia Bank 1,500,000(b) 1,500,000
Minneapolis/St. Paul State Housing &
Redevelopment Authority, 3.50%,
8/15/25, FSA Insured 4,000,000(b) 4,000,000
St. Paul Housing and Redevelopment
Authority (Science Museum of MN
Project), 3.05%-3.15%, 5/1/27, LOC U.S.
Bank 5,500,000(b) 5,500,000
University of Minnesota, 3.45%, 2/15/00,
Prerefunded 501,120 503,625
------------------
16,603,625
------------------
MISSISSIPPI (2.75%)
Business Finance Corporation (Mississippi
College Project), 3.20%, 2/1/09, LOC
Bank of America 6,400,000(b) 6,400,000
Claiborne County PCR, 3.35%, 8/6/99,
Guaranty: Nat'l Rural Utilities
Cooperative Finance Corp. 2,700,000 2,700,000
Hospital Equipment Finance Authority
Revenue (Baptist Medical Center),
3.10%, 7/1/12, LOC Rabobank 1,200,000(b) 1,200,000
State Highway Revenue Series #39, 3.10%,
2/1/00, Prerefunded 2,745,840 2,323,666
Tupelo School District, 3.20%, 12/1/99,
AMBAC Insured 1,050,000 1,053,232
------------------
13,676,898
------------------
MISSOURI (3.06%)
Kansas City IDA Hospital Revenue (Resh
Health Services), 3.40%, 10/15/14, MBIA
Insured 2,100,000(b) 2,100,000
Kansas City Municipal Assistance
Corporation (Leasehold H Roe Bartle),
3.25%, 4/15/00, Prerefunded and
Escrowed in Governments 1,300,000 1,359,970
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
24
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
MISSOURI (CONTINUED)
State Environmental Improvement & Energy
Resource Authority PCR, 3.20%, 8/23/99,
LOC Union Bank of Switzerland $ 1,700,000 $ 1,700,000
State Health and Education Facilities
Authority Revenue Series A
(Christian Health Services Project),
3.10%, 11/1/19,
LOC Morgan Guaranty 1,000,000(b) 1,000,000
State Health and Education Facilities
Authority Revenue
(Kirkwood School District), 3.65%,
9/13/99 2,375,000 2,376,613
State Health and Education Facilities
Authority Revenue
(St. Francis Medical Center), 3.45%,
6/1/26,
LOC Credit Local de France 6,700,000(b) 6,700,000
------------------
15,236,583
------------------
MONTANA (1.83%)
State Health Facilities Authority Revenue
Bonds Series A
(Health Care Pooled Loan Program),
3.05%, 12/1/15, FGIC Insured 9,105,000(b) 9,105,000
------------------
NEVADA (1.50%)
Clark County Airport System Refunding
Revenue Bonds,
3.00%, 7/1/25, LOC Toronto Dominion
Bank 3,000,000(b) 3,000,000
3.00%, 7/1/12, MBIA Insured 4,445,000(b) 4,445,000
------------------
7,445,000
------------------
NEW JERSEY (0.24%)
Economic Development Authority (Volvo
American Corp.), 3.41%, 12/1/04, LOC
Credit Suisse 1,200,000(b) 1,200,000
------------------
NEW YORK (0.20%)
New York City G.O., 3.50%, 10/01/20, FGIC
Insured 1,000,000(b) 1,000,000
------------------
NORTH CAROLINA (4.92%)
Educational Facility Finance Agency
(Gardner Webb University),
3.10%, 7/1/17, LOC First Union Bank 5,870,000(b) 5,870,000
Haywood Regional Medical Center, 3.10%,
5/1/17, LOC First Union Bank 4,885,000(b) 4,885,000
State Medical Care Commission Hospital
(Angel Medical Care Center), 3.10%,
10/1/16, LOC First Union 3,600,000(b) 3,600,000
State Medical Center Commission Revenues
(Carol Woods Project), 3.45%, 4/1/21,
LOC Bank of America 4,300,000(b) 4,300,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
25
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA (CONTINUED)
State Medical Care Commission (Carolina
Meadows Project), 3.45%, 6/1/28, LOC
Wachovia Bank $ 1,800,000(b) $ 1,800,000
University of North Carolina Revenue,
3.20%, 11/1/16,
LOC Wachovia Bank 4,000,000(b) 4,000,000
------------------
24,455,000
------------------
OHIO (4.08%)
Warren County Ohio Health Care Facility
(Otterbein Homes), 3.15%, 7/1/23, LOC
Fifth Third Bank 20,300,000(b) 20,300,000
------------------
OKLAHOMA (0.32%)
City of Moore G.O., 3.40%, 4/1/00, MBIA
Insured 600,000 602,325
Garfield County Industrial Authority PCR,
3.20%, 1/1/25,
Guaranty: Oklahoma Gas & Electric 1,000,000(b) 1,000,000
------------------
1,602,325
------------------
PENNSYLVANIA (4.88%)
Allegheny County Hospital Revenue, 3.15%,
8/6/99, LOC PNC Bank 5,200,000 5,200,000
Dauphin County General Authority, 3.35%,
6/1/00, AMBAC Insured 750,000 750,300
Philadelphia Water and Wastewater Revenue,
3.05%, 8/1/99,
AMBAC Insured 1,000,000 1,000,000
Quakertown Hospital Authority, 3.25%,
7/1/05-7/1/26, LOC PNC Bank 17,300,000(b) 17,300,000
------------------
24,250,300
------------------
SOUTH CAROLINA (1.73%)
State Housing Finance and Development
Authority, 3.15%, 7/1/07,
LOC First Union Bank 2,120,000(b) 2,120,000
York County PCR, 3.20%-3.35%,
9/15/99-10/6/99,
Guaranty: Duke Power Company 6,500,000 6,500,000
------------------
8,620,000
------------------
TENNESSEE (2.74%)
Clarksville Public Building Authority,
3.00%, 7/1/13, MBIA Insured 1,911,000(b) 1,911,000
Montgomery County Public Building
Authority, 3.20%, 7/1/15,
LOC NationsBank 5,500,000(b) 5,500,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
26
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
TENNESSEE (CONTINUED)
Nashville and Davidson County Health and
Education Facility, 3.20%, 8/1/18, LOC
NationsBank $ 6,200,000(b) $ 6,200,000
------------------
13,611,000
------------------
TEXAS (7.12%)
Austin Independent School District, 3.54%,
8/1/99, Texas PSF guaranteed 1,000,000 1,000,000
Brazos River Harbor Navagation District,
3.45%, 8/1/22,
Guaranty: Dow Chemical 2,400,000(b) 2,400,000
Brownsville Utility System Revenue Bond,
3.58%, 9/1/99, AMBAC Insured 1,000,000 1,001,170
City of Austin, 3.30%, 10/14/99, LOC
Morgan Guaranty 1,000,000 1,000,000
Coastal Bend Health Facilities, 3.15%,
8/15/27, LOC First Chicago 355,000(b) 355,000
Dallas County Mental Health Center
Facility Revenue Bond, 3.30%, 9/1/99,
FSA Insured 870,000 871,438
Grand Prairie G.O., 3.25%, 2/15/00, MBIA
Insured 2,390,000 2,418,254
Harris County, 3.00%-3.28%, 10/1/99, MBIA
Insured 8,675,000 8,626,620
Houston Water & Sewer Systems, 3.18%,
12/1/99, MBIA Insured 750,000 754,675
North East Independent School District,
3.15%, 2/1/00,
Texas PSF guaranteed 2,150,000 2,190,621
Nueces River Authority PCR (Reynolds
Metals Co. Project), 3.45%, 12/01/99,
LOC Bank of Nova Scotia 7,300,000 7,300,000
Pflugerville ISD, 3.25%, 8/15/99, Texas
PSF Guaranteed 998,771 998,771
San Antonio Water Revenue Capital
Appreciation Bonds, 3.35%, 5/1/00,
Prerefunded 2,430,048 2,453,411
Tarrant County Housing Finance
Corporation, MFHR - Single Family
Apartments Project, 3.15%, 11/1/17, LOC
Suntrust Bank 4,025,000(b) 4,025,000
------------------
35,394,960
------------------
UTAH (4.34%)
State Board of Regents Student Loan
Revenue Bonds Series B, 3.15%, 11/1/00,
AMBAC Insured 11,900,000(b) 11,900,000
State Highway Improvement, 3.15%, 8/16/99,
LOC State of Utah G.O. 5,400,000 5,400,000
State of Utah G.O., 3.05%, 7/1/16,
Guaranty: State of Utah 4,300,000(b) 4,300,000
------------------
21,600,000
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
27
<PAGE>
TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
VERMONT (0.25%)
State of Vermont G.O., 3.15%, 2/1/00,
Escrowed in Governments $ 1,210,000 $ 1,255,116
------------------
WASHINGTON (2.13%)
State Housing Finance Commission, 3.40%,
1/1/21, LOC U.S. Bank 8,100,000(b) 8,100,000
State of Washington G.O., 3.55%, 8/1/00,
Prerefunded 2,476,560 2,475,732
------------------
10,575,732
------------------
WEST VIRGINIA (0.20%)
Weirton Hospital Building, 3.10%, 12/1/99,
AMBAC Insured 1,000,000 1,007,183
------------------
WISCONSIN (1.83%)
La Crosse IDA (Dairyland Power
Cooperative), 3.40%, 9/1/14-2/1/15,
AMBAC Insured 9,100,000(b) 9,100,000
------------------
WYOMING (0.34%)
Converse County PCR, 3.35%, 8/4/99, LOC
Deutsche Bank 1,400,000 1,400,000
Uinta County, 3.40%, 8/15/20, Guaranty:
Chevron Inc. 300,000(b) 300,000
------------------
1,700,000
- ----------------------------------------------------------------------------------
Total Investments in Securities (cost:
$495,442,943) (d) $ 495,442,943
- ----------------------------------------------------------------------------------
</TABLE>
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, 1999. 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
FHLMC - Federal Home Loan Mortgage Corporation
FSA - Financial Security Assurance Corporation
G.O. - General Obligation
GECC - General Electric Capital Corporation
IDA - Industrial Development Authority
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
PSF - Permanent School Fund
(d) Also represents cost for federal income tax purposes.
28
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
<S> <C> <C>
- ----------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (97.88%):
- ----------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS (2.96%)
Archer Daniels Midland Company, 5.35%,
1/18/00 $ 1,740,000 $ 1,696,041
Cargill Inc., 5.12%, 9/3/99 7,520,000 7,484,706
------------------
9,180,747
------------------
BANKS - DOMESTIC (19.40%)
Branch Banking and Trust Company, 5.03%,
9/15/99 2,000,000 2,002,534
Chemical Bank, 5.40%, 11/02/99, LOC Chase
Manhattan 5,000,000(d) 5,004,959
Comerica Bank, 5.13%, 7/13/00 10,000,000(d) 9,996,254
First National Bank of Chicago, 5.15%,
9/2/99 6,260,000 6,260,000
First Union National Bank, Charlotte,
5.05%, 11/10/99 5,300,000(d) 5,300,000
Key Bank N.A., Cleveland, 5.01%-5.75%,
2/18/00-4/25/00 12,000,000(d) 12,011,131
Regionsbank N.A., Birmingham, 4.87%,
8/18/99 9,900,000 9,900,000
Southtrust Bank N.A., Birmingham, 5.13%,
9/20/99 9,700,000 9,700,000
------------------
60,174,878
------------------
BANKS - OTHER (5.87%)
Petroleo Brasileiro, S.A., 5.09%, 8/20/99,
LOC Barclays Bank 8,730,000 8,706,548
Royal Bank of Canada, 5.04%, 2/8/00 4,000,000 3,999,092
Union Bank of Switzerland A.G, 5.29%,
3/1/00 5,500,000 5,500,156
------------------
18,205,796
------------------
CHEMICALS (10.10%)
Air Products and Chemicals, Inc.,
5.15%-6.01%, 10/25/99-12/15/99 14,880,000 14,826,995
Dow Chemical, 5.10%, 8/2/99 5,500,000 5,499,221
Henkel Corporation, 4.79%, 8/10/99 11,000,000(c) 10,986,828
------------------
31,313,044
------------------
DRUGS AND COSMETICS (4.84%)
American Home Products Corporation, 5.11%,
2/15/00 1,000,000 1,013,171
Schering Corporation, 4.98%, 8/3/99 14,000,000 13,996,127
------------------
15,009,298
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
29
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (CONTINUED)
- ----------------------------------------------------------------------------------
FINANCIAL - AUTO (0.64%)
Toyota Motor Credit Corporation, 5.14%,
9/23/99 $ 2,000,000(d) $ 1,999,892
------------------
FINANCIAL - DIVERSIFIED BUSINESS (23.82%)
American General Finance Corporation,
5.15%, 2/15/00 4,000,000 4,057,322
Associates Corporation of North America,
5.10%, 9/17/99 1,500,000 1,502,271
Household Finance Corporation,
5.38%-5.40%, 8/16/99-4/27/00 15,500,000(d) 15,515,280
Merrill Lynch & Co., 5.14%-5.50%,
3/3/00-3/6/00 15,000,000(d) 15,019,604
Morgan (J.P.) and Company, 5.02%-5.13%,
8/9/99-5/18/00,
Guaranty: Morgan Guaranty 14,150,000(d) 14,139,106
Morgan Stanley Dean Witter Discover,
5.43%-7.50%, 9/1/99-3/1/00 11,000,000(d) 11,025,425
Norwest Financial, 6.00%, 8/1/99 1,000,000 1,000,000
Wells Fargo & Company, 5.01%, 8/10/99 11,645,000 11,630,415
------------------
73,889,423
------------------
FINANCIAL - DIVERSIFIED BUSINESS, ASSET-BACKED (8.73%)
Monte Blanc Capital Corporation, 5.08%,
8/6/99, LOC UBS & MBIA 11,660,000(c) 11,651,773
Park Avenue Receivables, 5.25%, 9/9/99,
LOC Chase Manhattan 10,000,000 9,943,125
Preferred Receivables Funding Corporation,
5.25%, 8/5/99 5,500,000(c) 5,496,792
------------------
27,091,690
------------------
FOOD AND BEVERAGE (1.85%)
H.J. Heinz, 5.08%, 8/20/99 4,750,000 4,737,265
Sara Lee Corporation, 6.70%, 9/9/99 1,000,000 1,001,374
------------------
5,738,639
------------------
HOUSEHOLD PRODUCTS (1.87%)
Fortune Brands, Inc., 5.00%-5.10%,
8/2/99-8/9/99 5,790,000(c) 5,788,201
------------------
MANUFACTURING (1.79%)
Caterpillar Financial Services Inc.,
5.80%, 3/15/00 5,550,000 5,553,026
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
30
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER & OTHER CORPORATE OBLIGATIONS (CONTINUED)
- ----------------------------------------------------------------------------------
OIL SERVICES (8.39%)
American Petrofina Holding Company, 5.02%,
8/16/99
Guaranty: Petrofina S.A. $ 17,600,000 $ 17,563,186
Halliburton Company, 4.89%, 8/10/99 8,485,000 8,474,627
------------------
26,037,813
------------------
TELECOMMUNICATIONS (3.22%)
AT&T Company, 5.27%, 7/13/00 10,000,000(d) 9,996,208
------------------
TRUCKING (4.40%)
United Parcel Services of America, 5.15%,
8/2/99 13,635,000 13,633,048
- ----------------------------------------------------------------------------------
Total Commercial Paper & Other Corporate
Obligations (cost: $303,611,703) $ 303,611,703
- ----------------------------------------------------------------------------------
GOVERNMENT & AGENCIES SECURITIES (1.61%):
- ----------------------------------------------------------------------------------
Federal Home Loan Bank, 4.90%, 1/14/00 5,000,000 5,000,000
- ----------------------------------------------------------------------------------
Total Government & Agencies Securities (cost:
$5,000,000) $ 5,000,000
- ----------------------------------------------------------------------------------
Total Investment in Securities (cost:
$308,611,703) (b) $ 308,611,703
- ----------------------------------------------------------------------------------
</TABLE>
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, 1999.
31
<PAGE>
INSTITUTIONAL TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
<S> <C> <C>
- ----------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets.)
CALIFORNIA (0.25%)
Oakland-Alameda County, 3.30%, 2/1/00, LOC
CIBC $130,000 $ 130,703
------------------
COLORADO (1.79%)
Health Facilities Authority Revenue
(Visiting Nurses), 3.40%, 7/1/22,
LOC Norwest Bank 950,000(b) 950,000
------------------
DELAWARE (0.19%)
Delaware Valley Regional Finance
Authority, 3.05%, 12/1/20,
LOC Credit Suisse 100,000(b) 100,000
------------------
FLORIDA (8.47%)
Florida Housing Finance Agency
(Multifamily Housing Monterey Meadows),
3.05%, 12/1/07, LOC Citibank 2,500,000(b) 2,500,000
Hillsborough County Florida Utility,
3.12%, 8/1/99, MBIA Insured 1,000,000 1,000,000
West Orange Memorial Hospital, 3.10%,
8/10/99, LOC Rabobank Nederland 1,000,000 1,000,000
------------------
4,500,000
------------------
GEORGIA (11.48%)
De Kalb Private Hospital Authority, 3.05%,
3/1/24, LOC Suntrust Bank 3,200,000(b) 3,200,000
Municipal Electric Authority, 3.15%,
1/1/26, LOC ABN-AMRO 2,900,000(b) 2,900,000
------------------
6,100,000
------------------
ILLINOIS (7.23%)
Cook County G.O., 3.10%, 11/1/99, AMBAC
Insured 720,000 725,517
Education Facility Authority (Cultural
Pool Program), 3.10%, 12/1/25,
LOC First National Bank of Chicago 615,000(b) 615,000
Health Facilities Authority Revenue,
3.20%, 11/1/15,
LOC First National Bank of Chicago 500,000(b) 500,000
Joliet Regional Port District IDR Bonds,
3.50%, 7/15/03,
Guaranty: Dow Chemical 2,000,000(b) 2,000,000
------------------
3,840,517
------------------
INDIANA (14.11%)
Health Facilities Financing Authority,
3.00%, 1/1/22, LOC First Chicago 1,000,000(b) 1,000,000
Health Facilities Financing Authority
(Capital Access Designated Pool
Program), 3.15%, 8/1/06-4/1/13, LOC
Comerica Bank 4,500,000(b) 4,500,000
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
32
<PAGE>
INSTITUTIONAL TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
INDIANA (CONTINUED)
Hospital Equipment Finance Authority,
3.15%, 12/1/15, First Chicago Insured $2,000,000(b) $ 2,000,000
------------------
7,500,000
------------------
IOWA (0.75%)
Higher Education Authority (Palmer
Chiropractic), 3.55%, 4/1/27,
LOC Firststar Bank 400,000(b) 400,000
------------------
KENTUCKY (1.46%)
State Property & Building Commission
(Project Number 49), 3.40%, 12/1/99,
Prerefunded 778,837 774,592
------------------
LOUISIANA (1.13%)
Louisiana Public Facilities Authority
(Kenner Hotel), 3.40%, 12/1/15,
LOC Deutsche Bank 600,000(b) 600,000
------------------
MARYLAND (8.05%)
Anne Arundel County Port Facilities
Revenue, 3.35%, 10/14/99,
Guaranty: Baltimore Gas & Electric 2,380,000 2,380,000
Montgomery County Housing Opportunity,
3.15%, 11/1/07, LOC FHLMC 1,900,000(b) 1,900,000
------------------
4,280,000
------------------
MINNESOTA (5.82%)
Beltrami County Environmental, 3.40%,
12/1/21,
LOC Union Bank of Switzerland 400,000(b) 400,000
City of Cohasset Revenue and Light
Project, 3.45%, 6/1/13,
LOC ABN-AMRO 800,000(b) 800,000
City of Duluth Tax Increment Revenue,
3.10%, 9/1/10, LOC Wachovia Bank 1,300,000(b) 1,300,000
City of Minneapolis Unlimited Tax G.O.,
3.25%, 12/1/99 595,000 595,000
------------------
3,095,000
------------------
MISSISSIPPI (2.38%)
Claiborne County PCR, 3.35%, 8/6/99,
Guaranty: Nat'l Rural Utilities
Cooperative Finance Corp. 800,000 800,000
State Highway Revenue Series #39, 3.10%,
2/1/00, Prerefunded 457,640 464,733
------------------
1,264,733
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
33
<PAGE>
INSTITUTIONAL TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
MISSOURI (3.76%)
State Health and Education Facilities
Authority (St. Francis Medical Center),
3.45%, 6/1/26, LOC Credit Local De
France $2,000,000(b) $ 2,000,000
------------------
NEVADA (0.56%)
Clark County Airport System Refunding
Revenue Notes 3.00%, 7/1/12,
MBIA Insured 300,000(b) 300,000
------------------
NEW YORK (7.90%)
New York City G.O. 3.40%, 8/15/18, AMBAC
Insured 1,000,000(b) 1,000,000
New York City Municipal Water Finance
Authority, 3.50%, 6/15/23-6/15/25, FGIC
Insured 3,200,000(b) 3,200,000
------------------
4,200,000
------------------
NORTH CAROLINA (0.75%)
State Medical Care Commission Hospital
Revenue Bonds, 3.45%, 10/1/13, LOC
First Union Bank 400,000(b) 400,000
------------------
OHIO (2.45%)
Warren County Ohio Health Care Facility
(Otterbein Homes), 3.15%, 7/1/23, LOC
Fifth Third Bank 1,300,000(b) 1,300,000
------------------
OREGON (0.94%)
Tri-County Trans Dist, 3.05%, 8/1/99,
AMBAC Insured 500,000 500,000
------------------
PENNSYLVANIA (1.51%)
Quakertown Hospital Authority, 3.25%,
7/1/05, LOC PNC Bank 800,000(b) 800,000
------------------
SOUTH CAROLINA (3.57%)
York County PCR, 3.20%-3.25%,
8/2/99-8/18/99,
Guaranty: Duke Power Company 1,900,000 1,900,000
------------------
TENNESSEE (4.52%)
Nashville and Davidson County Health and
Education Facility,
3.20%, 10/1/26, LOC NationsBank 800,000(b) 800,000
3.20%, 8/1/18, LOC NationsBank 1,600,000(b) 1,600,000
------------------
2,400,000
------------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
34
<PAGE>
INSTITUTIONAL TAX FREE MONEY MARKET FUND
INVESTMENTS IN SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
NAME OF ISSUER (c) AMOUNT VALUE (a)
- ----------------------------------------------------------------------------------
<S> <C> <C>
TEXAS (6.40%)
Grand Prairie Health Facilities
(Dallas/Fort Worth Medical Center),
3.10%, 11/1/99, AMBAC Insured $845,000 $ 851,057
Harris County Housing Finance MFHR, 3.32%,
9/1/99,
LOC Bank of Nova Scotia 230,000 230,435
Northside Texas Independent School
District, 3.13%, 2/1/00, Permanent
School Fund Guaranteed 1,385,000 1,420,698
San Antonio Water Revenue Bonds, 3.35%,
5/1/00, Prerefunded 888,500 897,043
------------------
3,399,233
------------------
VERMONT (1.95%)
State G.O., 3.12%, 2/1/00, Prerefunded 1,055,890 1,037,516
------------------
WASHINGTON (1.88%)
State Health Care Facilities Authority
(Fred Hutchinson Cancer Center),
3.50%, 1/1/29, LOC Bank of America 1,000,000(b) 1,000,000
------------------
WYOMING (0.19%)
Uinta County PCR, 3.40%, 12/1/22,
Guaranty: Chevron 100,000(b) 100,000
- ----------------------------------------------------------------------------------
Total Investments in Securities (cost:
$52,872,294) (d) $ 52,872,294
- ----------------------------------------------------------------------------------
</TABLE>
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, 1999. 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
FHLMC - Federal Home Loan Mortgage Corporation
G.O. - General Obligation
IDR - Industrial Development Revenue
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
(d) Also represents cost for federal income tax purposes.
35
<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, Institutional Prime
Money Market Fund and Institutional Tax-Free Money Market Fund (funds within
Great Hall Investment Funds, Inc.) as of July 31, 1999 and the related
statements of operations for the year then ended (period from September 23, 1998
(commencement of operations) to July 31, 1999 for Institutional Tax-Free Money
Market Fund) and the statements of changes in net assets for each of the years
in the two-year period ended July 31, 1999 for the Prime, U.S. Government and
Tax-Free Money Market Funds and for the year ended July 31, 1999 and the period
from August 11, 1997 (commencement of operations) to July 31, 1998 for the
Institutional Prime Money Market Fund and for the period from September 23, 1998
to July 31, 1999 for Institutional Tax-Free Money Market Fund and the financial
highlights for each of the years in the five-year period ended July 31, 1999 for
the Prime, U.S. Government and Tax-Free Money Market Funds and for the year
ended July 31, 1999 and the period from August 11, 1997 to July 31, 1998 for the
Institutional Prime Money Market Fund and for the period from September 23, 1998
to July 31, 1999 for Institutional Tax-Free 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 or brokers. 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, Institutional Prime Money Market Fund and Institutional Tax-Free
Money Market Fund at July 31, 1999, 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 LLP
Minneapolis, Minnesota
September 3, 1999
36
<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, 1999:
<TABLE>
<CAPTION>
PRIME
MONEY
MARKET FUND
------------
U.S. GOV'T TAX-FREE INST'L PRIME INST'L TAX-FREE
MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
------------ ------------ ------------ ----------------
- -----------------------------------------------------------------------------------------------------
PAYABLE DATE PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
August 31................ $0.00429 $0.00421 $0.00240 $0.00446 $0.00000
September 30............. 0.00412 0.00405 0.00247 0.00428 0.00079
November 1............... 0.00427 0.00409 0.00244 0.00441 0.00283
November 30.............. 0.00378 0.00365 0.00214 0.00392 0.00239
January 3................ 0.00440 0.00422 0.00269 0.00458 0.00306
January 31............... 0.00352 0.00341 0.00194 0.00374 0.00216
February 28.............. 0.00341 0.00334 0.00167 0.00364 0.00183
March 31................. 0.00369 0.00366 0.00205 0.00396 0.00223
May 2.................... 0.00380 0.00373 0.00262 0.00410 0.00244
May 31................... 0.00344 0.00340 0.00223 0.00371 0.00236
June 30.................. 0.00357 0.00355 0.00224 0.00386 0.00241
July 31.................. 0.00379 0.00377 0.00210 0.00412 0.00222
------------ ------------ ------------ ------------ --------
$0.04608 $0.04508 $0.02699 $0.04878 $0.02472
------------ ------------ ------------ ------------ --------
------------ ------------ ------------ ------------ --------
</TABLE>
SOURCE OF DISTRIBUTIONS
During the period ending July 31, 1999, 100% of the Tax-Free Money Market Fund
and Institutional 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
2000, 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 2000, each shareholder will
receive a breakdown of income earned by investment category on a calendar-year
basis.
37
This report is signed on behalf of the registrant (or depositor or trustee) in
the City of Minneapolis and State of Minnesota on the twentieth day of
September, 1999
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
