AIG
MONEY MARKET FUND
SEMI-ANNUAL REPORT
APRIL 30, 1996
AIG (LOGO)
[GRAPHIC OMITTED]
ADVISED BY
AIG CAPITAL MANAGEMENT CORP.
<PAGE>
THE AIG MONEY MARKET FUND
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LETTER TO SHAREHOLDERS, APRIL 30, 1996
Dear Shareholder:
We are pleased to provide you with this report on the AIG Money Market Fund (the
"Fund") for its semi-annual reporting period ending April 30, 1996. During the
first four months of this period, short term interest rates declined steadily on
expectations of a slow growth economy without inflation. This decline was halted
in February on renewed fears of rising inflation and increased economic
activity.
The Federal Open Market Committee lowered the Discount Rate and target Federal
Funds rate by .25% (25 basis points) each at its January meeting to 5.00% and
5.25%, respectively. The February Employment Report stunned market participants
and, barring substantial downward revision, closed the door on near-term rate
cuts. Our concern that government shutdowns and the early January 1996 blizzard
obscured the underlying economic trend appears to have been borne out. The March
Employment Report, released in early April, confirmed that the economy is
stronger rather than weaker. Food and energy prices have firmed, but industrial
commodities appear less pressured. The present benign inflation environment may
not remain so and little progress has been made on a budget deficit reduction
package. While we believe official rate rises are not an immediate prospect, the
outlook is muddied.
Earlier expectations of interest rate cuts have been replaced by fears of
interest rate increases. Industrial production and payroll growth have
strengthened. The bullish sentiment which prevailed in the bond and money
markets early in the year was characterized by forward interest rates which had
already priced in successive Federal Reserve Board ("FRB") easings. We noted in
our October shareholder letter that the risks appeared to be market
disappointment at the size and pace of FRB accommodation. The anticipated
reevaluation of prospective reinvestment opportunities has steepened the yield
curve. The Fund has slightly extended its Weighted Average Maturity ("WAM"),
taking advantage of improved relative returns.
At present, the Fund continues a cautious outlook and maintains a shorter WAM
than the average fund as reported by IBC/Donoghue, primarily attributable to
higher concentration in short term bank obligations and commercial paper. Over
the coming quarter, the Fund's investments are expected to maintain, but not
substantively lengthen, its WAM unless prospective market yields warrant an
extension strategy. As always, AIG Capital Management Corp. continues to review
market factors, concrete economic statistics and anecdotal market psychology,
with a focus on continuing to meet shareholders' investment objectives.
Sincerely,
/s/ ROBERT L. ASH
Robert L. Ash
Chairman of AIG Capital Management Corp.
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STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND
APRIL 30, 1996 (UNAUDITED)
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AIG MONEY MARKETFUND
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FACE
AMOUNT VALUE
(000) (000)
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U.S. GOVERNMENT AGENCY OBLIGATIONS (3.9%)
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FFCB
$15,000 4.950, 03/03/97 $ 14,956
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TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $14,956,031) 14,956
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COMMERCIAL PAPER (66.7%)
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Anheuser-Busch
18,000 5.400, 05/01/96 18,000
Associates of North America
15,000 5.370, 06/12/96 14,907
Bil North America
10,000 5.410, 07/08/96 9,899
Chevron U.K. Investment PLC
15,000 5.370, 05/16/96 14,967
Coca Cola
15,000 5.290, 06/10/96 14,912
Commerzbank U.S. Finance
15,000 5.370, 05/09/96 14,982
General Electric Capital
15,000 5.340, 05/08/96 14,985
General Electric Capital Services
15,000 5.350, 05/20/96 14,958
Glaxo Wellcome PLC
9,000 5.340, 05/15/96 8,981
Goldman Sachs Group
15,000 5.320, 05/29/96 14,938
Great Lakes Chemical
10,000 5.310, 05/31/96 9,956
Hertz
10,000 5.360, 05/22/96 9,969
J.P. Morgan
6,990 5.380, 06/07/96 6,952
Korea Development Bank
10,000 5.230, 05/28/96 9,961
5,000 5.380, 05/28/96 4,980
Merrill Lynch
10,000 5.380, 06/17/96 9,930
5,000 5.320, 05/06/96 4,996
Morgan Stanley
15,000 5.280, 05/03/96 14,996
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FACE
AMOUNT VALUE
(000) (000)
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UBS Finance
$15,000 5.350, 05/01/96 $ 15,000
Unilever Capital
15,000 5.400, 05/01/96 15,000
Wal-Mart Stores
15,000 5.260, 05/07/96 14,987
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TOTAL COMMERCIAL PAPER
(Cost $258,256,208) 258,256
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CERTIFICATES OF DEPOSIT (15.7%)
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Bank of Tokyo- Mitsubishi
16,000 5.500, 05/13/96 16,001
Societe Generale
15,000 5.380, 06/11/96 15,000
Sumitomo Bank
5,000 5.500, 05/01/96 5,000
10,000 5.420, 05/29/96 10,000
Svenska Handelsbanken
15,000 5.360, 05/13/96 15,000
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TOTAL CERTIFICATES OF DEPOSIT
(Cost $61,000,638) 61,001
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TIME DEPOSITS (14.0%)
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BHF-Bank Berliner Handels und
Frankfurter Bank
18,320 5.380, 05/01/96 18,320
Fifth Third Bank
18,000 5.380, 05/01/96 18,000
Westpac Banking
18,000 5.380, 05/01/96 18,000
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TOTAL TIME DEPOSITS
(Cost $54,320,000) 54,320
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TOTAL INVESTMENTS (100.3%)
(Cost $388,532,877) 388,533
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OTHER ASSETS AND LIABILITIES (-0.3%)
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Other Assets and Liabilities, Net (1,317)
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND
APRIL 30, 1996 (UNAUDITED)
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AIG MONEY MARKET FUND
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VALUE
(000)
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NET ASSETS:
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Portfolio shares of Class A (unlimited
authorization, no par value) based
on 275,420,525 outstanding shares
of beneficial interest $275,420
Portfolio shares of Class B (unlimited
authorization, no par value) based
on 111,793,662 outstanding shares
of beneficial interest 111,794
Accumulated net realized gain on
investments 2
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TOTAL NET ASSETS (100.0%) $387,216
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Net Asset Value, Offering Price and
Redemption Price Per Share--Class A $1.00
Net Asset Value, Offering Price and
Redemption Price Per Share--ClassB $1.00
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FFCB--Federal Farm Credit Bank
PLC --Private Limited Corporation
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF OPERATIONS THE ADVISORS' INNER CIRCLE FUND
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1996 (UNAUDITED)
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11/1/95 TO
4/30/96
AIG MONEY MARKET FUND (000)
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INVESTMENT INCOME:
Interest $12,276
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Total Investment Income 12,276
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EXPENSES:
Investment Advisory Fees 545
Waiver of Investment Advisory Fees (31)
Administrative Fees 210
Custodian Fees 29
Professional Fees 30
Distribution Fees (1) 195
Transfer Agent Fees 29
Printing Fees 8
Trustee Fees 3
Registration and Filing Fees 7
Insurance and Other Fees 10
Amortization of Deferred Organizational Costs 5
Rating Fees 15
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Total Expenses 1,055
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Net Investment Income 11,221
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NET REALIZED LOSS FROM SECURITIES SOLD (1)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $11,220
=======
(1) DISTRIBUTION FEES ARE INCURRED BY THE CLASS B SHARES ONLY.
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS THE ADVISORS' INNER CIRCLE FUND
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1996 (UNAUDITED) AND THE PERIOD
ENDED OCTOBER 31, 1995.
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11/1/95 TO 12/1/94 TO
4/30/96 10/31/95(1)
AIG MONEY MARKETFUND (000) (000)
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INVESTMENT ACTIVITIES:
Net Investment Income $ 11,221 $ 17,596
Net Realized Gain (Loss) on Securities (1) 3
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Increase in Net Assets Resulting
from Operations 11,220 17,599
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DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income
Class A (8,527) (15,644)
Class B (2,694) (1,952)
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Total Distributions (11,221) (17,596)
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SHARE TRANSACTIONS (AT $1.00 PER SHARE):
Class A
Shares Issued 10,137,389 14,099,321
Shares Issued in Lieu of Cash Distributions 8,850 14,200
Shares Redeemed (10,184,473) (13,799,867)
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Net Class A Share Transactions (38,234) 313,654
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Class B
Shares Issued 112,436 178,792
Shares Issued in Lieu of Cash Distributions 2,699 1,516
Shares Redeemed (123,823) (59,826)
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Net Class B Share Transactions (8,688) 120,482
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Increase (Decrease) in Net Assets From
Share Transactions (46,922) 434,136
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Total Increase (Decrease) in Net Assets (46,923) 434,139
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Beginning of Period 434,139 --
End of Period $ 387,216 $ 434,139
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(1) THE AIG MONEY MARKET FUND CLASS A AND CLASS B COMMENCED OPERATIONS ON
DECEMBER 1, 1994 AND FEBRUARY 16, 1995, RESPECTIVELY.
The accompanying notes are an integral part of the financial statements
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<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS THE ADVISORS' INNER CIRCLE FUND
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1996 (UNAUDITED) AND THE PERIOD ENDED OCTOBER 31, 1995.
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For a Share Outstanding Throughout the Period
RATIO
RATIO OF NET
NET NET NET RATIO OF EXPENSES INCOME
ASSET DISTRIBUTIONS ASSET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE NET FROM NET VALUE END OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ---------- ------------ --------- ------ --------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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AIG MONEY MARKET
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CLASS A (1)
1996 $1.00 0.03 (0.03) $1.00 5.26%* $275,422 0.40%* 5.24%* 0.41%* 5.23%*
1995 1.00 0.05 (0.05) 1.00 5.75%* 313,657 0.40%* 5.60%* 0.47%* 5.53%*
CLASS B (1)
1996 $1.00 0.02 (0.02) $1.00 4.90%* $111,794 0.75%* 4.86%* 0.76%* 4.85%*
1995 1.00 0.04 (0.04) 1.00 5.43%* 120,482 0.75%* 5.18%* 0.85%* 5.08%*
<FN>
* ANNUALIZED
(1) THE AIG MONEY MARKET FUND CLASS A AND CLASS B COMMENCED OPERATIONS ON DECEMBER 1, 1994 AND FEBRUARY 16, 1995, RESPECTIVELY.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS THE ADVISORS' INNER CIRCLE FUND
APRIL 30, 1996 (UNAUDITED)
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1. ORGANIZATION:
THE ADVISORS' INNER CIRCLE FUND (the "Trust") is organized as a
Massachusetts business trust under a Declaration of Trust dated July 18, 1991.
The Trust is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as a diversified open-end management investment company with
nine portfolios. The financial statements herein are those of one such
portfolio, the AIG Money Market Fund (the "Fund"). The Fund is registered to
offer two classes of shares: Class A and Class B. The financial statements of
the remaining portfolios are presented separately. The assets of each portfolio
are segregated, and a Shareholder's interest is limited to the portfolio in
which shares are held. The Fund's prospectuses provide a description of the
Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed
by the Fund.
SECURITY VALUATION -- Investment securities are stated at amortized cost,
which approximates market value. Under this valuation method, purchase
discounts and premiums are accreted and amortized ratably to maturity and
are included in interest income.
FEDERAL INCOME TAXES -- It is the Fund's intention to qualify as a
regulated investment company by complying with the appropriate provisions
of the Internal Revenue Code of 1986, as amended. Accordingly, no provision
for Federal income taxes is required.
SECURITY TRANSACTIONS AND RELATED INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on the accrual basis. Costs used in
determining realized gains and losses on the sales of investment securities
are those of the specific securities sold during the respective holding
period.
NET ASSET VALUE PER SHARE -- The net asset value per share of the Fund is
calculated on each business day by dividing the total value of assets, less
liabilities, by the number of shares outstanding.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market
value of the collateral including accrued interest thereon, is sufficient
in the event of default by the counterparty. If the counterparty defaults
and the value of the collateral declines or if the counterparty enters into
an insolvency proceeding, realization of the collateral by the Fund may be
delayed or limited.
EXPENSES -- Expenses that are directly related to the Fund are charged
directly to the Fund. Other operating expenses of the Trust are prorated to
the portfolios on the basis of relative net asset value. Class specific
expenses, such as the 12b-1 fees, are borne by that class. Income, other
expenses and realized gains and losses of the Fund are allocated to the
respective classes on the basis of the relative net asset value each day.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE ADVISORS' INNER CIRCLE FUND
APRIL 30, 1996 (UNAUDITED)
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Distributions from net investment income are declared daily and paid to
Shareholders monthly. Any net realized capital gains are distributed to
Shareholders at least annually.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount 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.
3. ORGANIZATION COSTS AND TRANSACTIONS WITH AFFILIATES:
The Fund incurred organization costs of $33,000. These costs have been
capitalized by the Fund and are being amortized over sixty months commencing
with operations. In the event any of the initial shares of the Fund are redeemed
by any holder thereof during the period that the Fund is amortizing its
organizational costs, the redemption proceeds payable to the holder thereof by
the Fund will be reduced by the unamortized organizational costs in the same
ratio as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption. Organization costs include
legal fees of approximately $21,000 for organizational work performed by a law
firm of which a trustee of the Trust is a partner and two officers of the Fund
are partners.
Certain officers of the Trust are also officers of SEI Financial Management
Corporation (the "Administrator") and/or SEI Financial Services Company. Such
officers are paid no fees by the Trust for serving as officers of the Trust.
4. ADMINISTRATION, SHAREHOLDER SERVICING AND DISTRIBUTION AGREEMENTS:
The Trust and the Administrator are parties to an Administration Agreement
under which the Administrator provides administrative services at an annual rate
of .145% of the Fund's average daily net assets up to $100 million; .1125% of
the Fund's average daily assets from $100 million up to and including $200
million; .07% of the Fund's average daily net assets from $200 million up to and
including $450 million; and .05% of the Fund's average daily net assets over
$450 million.
The Trust and SEI Financial Services Company ("SFS" or "the Distributor")
have entered into a Distribution Agreement under which SFS acts as the
distributor of the Fund's shares. The distributor receives no fees for its
distribution services under this agreement. The Fund has adopted a Distribution
Plan ("the Plan") on behalf of the Class B shares pursuant to the 1940 Act, Rule
12b-1. The Plan provides for payment of fees to the Distributor at an annual
rate of .35% of the average daily net assets of the Class B shares.
DST Systems, Inc. (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Fund under a transfer agency agreement with
the Trust.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) THE ADVISORS' INNER CIRCLE FUND
APRIL 30, 1996 (UNAUDITED)
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5. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS:
The Trust and AIG Capital Management Corp. (the "Advisor") are parties to
an Investment Advisory Agreement (the "Advisory Agreement"). Under the terms of
the Advisory Agreement, the Advisor receives an annual fee equal to .25% of the
Fund's average daily net assets. The Advisor has voluntarily agreed to waive all
or a portion of its fees in order to limit operating expenses to not more than
.40% of the average daily net assets of Class A and not more than .75% of the
average daily net assets of Class B. Fee waivers are voluntary and may be
terminated at any time upon sixty days' written notice to the Fund.
CoreStates Bank, N.A. acts as custodian (the "Custodian") for the Fund.
Fees of the Custodian are being paid on the basis of the net assets of the Fund.
The Custodian plays no role in determining the investment policies of the Fund
or which securities are to be purchased and sold by the Fund.
6. CONCENTRATION OF CREDIT RISK:
The Fund invests primarily in high quality money market instruments. The
Fund maintains a diversified portfolio which currently has a concentration of
assets in the banking industry. The ability of the issuers of the securities
held by the Fund to meet their obligations may be affected by economic
developments in the banking industry.
<PAGE>
NOTES
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INVESTMENT ADVISOR:
AIG CAPITAL MANAGEMENT CORP.
70 PINE STREET
NEW YORK, NY 10270
DISTRIBUTOR:
SEI FINANCIAL SERVICES COMPANY
680 EAST SWEDESFORD ROAD
WAYNE, PA 19087-1658
For information call: 1-800-845-3885
This information must be preceded or accompanied by
a current prospectus.
AIG-F-005-02
