INDEPENDENT AUDITORS' REPORT
In planning and performing our audits of the financial
statements of Payden & Rygel Investment Group (the "Funds"),
including Global Short Bond Fund, Global Fixed Income Fund,
Emerging Markets Bond Fund, Global Balanced Fund, European
Growth & Income Fund, European Aggressive Growth Fund, World
Target Twenty Fund, Growth & Income Fund, Market Return
Fund, U.S. Growth Leaders Fund, Small Cap Leaders Fund,
Bunker Hill Money Market Fund, Limited Maturity Fund, Short
Bond Fund, U.S. Government Fund, GNMA Fund, Investment
Quality Bond Fund, Total Return Fund, High Income Fund,
Short Duration Tax Exempt Fund, Tax Exempt Bond Fund and
California Municipal Income Fund, for the year ended October
31, 2000 (on which we have issued our report dated December
8, 2000), we considered their internal control, including
control activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, and not to
provide assurance on the Funds' internal control.
The management of the Funds is responsible for establishing
and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs
of controls. Generally, controls that are relevant to an
audit pertain to the entity's objective of preparing
financial statements for external purposes that are fairly
presented in conformity with accounting principles generally
accepted in the United States of America. Those controls
include the safeguarding of assets against unauthorized
acquisition, use, or disposition.
Because of inherent limitations in any internal control,
misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of internal
control to future periods is subject to the risk that the
internal control may become inadequate because of changes in
conditions, or that the degree of compliance with policies
or procedures may deteriorate.
Our consideration of the Funds' internal control would not
necessarily disclose all matters in internal control that
might be material weaknesses under standards established by
the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or
operation of one or more of the internal control components
does not reduce to a relatively low level the risk that
misstatements caused by error or fraud in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the Funds' internal control and their operation, including
controls for safeguarding securities, that we consider to be
material weaknesses as defined above as of October 31, 2000.
This report is intended solely for the information and use
of management, the Board of Trustees and Shareholders of the
Funds, and the Securities and Exchange Commission and is not
intended to be and should not be used by anyone other than
these specified parties.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December 8, 2000
