THE INSTITUTIONAL FUND
1996 Annual Report
<PAGE>
CONTENTS
2 The Institutional Fund
3 Fund Profile
4 The Money Market Portfolio
7 Statement of Assets and Liabilities
7 Statement of Operations
8 Statements of Changes in Net Assets
9 Financial Highlights
10 Notes To Financial Statements
11 Independent Auditors' Report
THE PORTFOLIO
12 Statement of Assets and Liabilities
12 Statement of Operations
13 Statements of Changes in Net Assets
14 Financial Highlights
15 Notes To Financial Statements
16 Independent Auditors' Report
<PAGE>
The Institutional Fund
The Institutional Fund finished 1996 with a total return for the year that
placed it among the top 16% of institutional money market funds in the nation,*
maintaining its position as a valuable cash management tool. The average annual
total return of The Institutional Fund from its inception on June 15, 1994
through December 31, 1996 was 5.53 percent.
After shortening the average maturity of The Institutional Fund early in 1996
based on the market's anticipation of rising interest rates, the Fund began,
late in the year, to extend the maturity of its portfolio. As you will recall,
we generally shorten the portfolio's average maturity when interest rates are
rising, so we have the ability to reinvest assets at higher rates as our
investments mature. However, as the market anticipated an increase in rates by
the Federal Reserve Board in the fall, yields became available on maturities in
the 180 to 360 day range that we found too attractive to miss.
Between September 9 and October 15, we increased the average maturity of the
Fund from 48 to 90 days. As higher rates failed to materialize and yields
eventually declined, we gained a significant advantage in yield from our
decision to lengthen the average maturity of the Fund when we did. In hindsight,
we took the right action and benefited accordingly.
We will continue to actively manage the portfolio of The Institutional Fund
in an effort to earn the highest possible yields for our shareholders while
maintaining our commitment to portfolio quality.
*The Institutional Fund was ranked #19 of 119 institutional money market funds
for the 12 months ended December 31, 1996, according to IBC/Donoghue.
<TABLE>
<CAPTION>
RECENT TOTAL RETURNS for the periods ended December 31, 1996
1 year
<S> <C>
The Institutional Fund 5.43%
The Average Institutional
Money Market Fund 5.23%
Source: IBC Donoghue, Inc.
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO EXPOSURE as of December 31, 1996
pie chart:
<S> <C>
Commercial Paper 49.5%
U.S. Government Obligations 8.1%
Repurchase Agreements 9.3%
Corporate Obligations 33.1%
</TABLE>
<PAGE>
(graphic)
Fund Profile
INVESTMENT OBJECTIVE
The Institutional Fund's objective is to maximize current income while
maintaining stable asset values through investment in a portfolio of high
quality money market instruments.
MINIMUM INVESTMENT
The minimum Institutional Fund investment is $5 million.
SETTLEMENT
The Institutional Fund will accept purchases and redemptions daily prior
to 3 p.m. Eastern Time.
INCOME DISTRIBUTION
Income dividends are declared daily and paid monthly. Dividends may be
reinvested or paid in cash.
SALES CHARGE SCHEDULE
There are no sales charges for the purchase or redemption of fund shares. The
Institutional Fund is a no-load mutual fund.
EXPENSES
We strive to maintain a level of expenses that is below the industry average for
institutional money market funds.
STABLE ASSET VALUES
The Fund will seek to maintain a stable net asset value of $1 per share,
although there is no assurance it will be able to do so. Investments in The
Institutional Fund are neither insured nor guaranteed by the U.S. Government.
<PAGE>
<TABLE>
<CAPTION>
Money Market Portfolio
Portfolio of Investments as of December 31, 1996
AMORTIZED
FACE AMOUNT COST
<S> <C> <C>
COMMERCIAL PAPER - 49.5%
American Trading & Products, 5.35%, due 1/14/97 $4,000,000 $3,992,272
Bell South, 5.42%, due 1/21/97 5,030,000 5,014,854
Calcot, 5.75%, due 2/21/97 3,000,000 2,975,562
Calcot, 5.40%, due 1/24/97 5,000,000 4,982,750
Calcot, 5.36%, due 1/22/97 5,000,000 4,984,367
Cargill Financial, 5.58%, due 6/16/97 5,000,000 4,871,350
Coca-Cola Company, 5.80%, due 1/17/97 15,000,000 14,961,333
Equitable of Iowa, 5.61%, due 1/17/97 12,000,000 11,970,080
Fingerhut Owners Trust, 5.50%, due 1/09/97 10,000,000 9,987,778
Fleet Funding, 5.48%, due 1/24/97 2,200,000 2,192,298
Hertz Corporation, 5.90%, due 1/03/97 10,000,000 9,996,722
Hitachi America Ltd., 5.35%, due 3/25/97 8,160,000 8,059,349
JC Penney Funding, 5.39%, due 3/27/97 15,000,000 14,809,104
Merrill Lynch & Company, 5.55%, due 6/13/97 5,000,000 4,874,354
Michigan Consolidated Gas, 5.33%, due 2/07/97 8,000,000 7,956,175
National Rural Utilities, 5.31%, due 2/14/97 4,200,000 4,172,742
PHH Corporation, 5.50%, due 1/17/97 10,000,000 9,975,556
Portland General Electric, 5.33%, due 1/21/97 10,000,000 9,970,389
Receivables Capital Corporation, 5.75%, due 1/15/97 10,000,000 9,977,639
Toyota Motor Company, 5.31%, due 2/06/97 8,000,000 7,957,520
WMX Technologies, 5.60%, due 5/13/97 20,000,000 19,589,333
TOTAL COMMERCIAL PAPER ===========
(Cost $173,271,527) 173,271,527
-----------
CORPORATE OBLIGATIONS - 33.1%
American Home Products Corporation, 6.875%, due 4/15/97 1,005,000 1,008,499
American General Finance, 7.75%, due 1/15/97 450,000 450,335
Associates Corporation, 6.875%, due 1/15/97 425,000 425,179
*Bank One Capital Demand Note, 5.95%, next redemption
date 1/02/97, due 4/01/2113 3,536,000 3,536,000
Bell Atlantic Corporation, 7.22%, due 6/16/97 4,000,000 4,029,304
Bell Tri LSG, 8.05%, due 2/19/97 500,000 501,663
*Care Life Project Floating Rate Note, 5.80%, next
redemption date 1/02/97, due 8/01/2111 1,350,000 1,350,000
*Caterpillar Financial Incorporated Floating Rate Note,
5.654%, due 6/20/97 1,000,000 1,000,473
Caterpillar Incorporated, 5.05%, due 1/15/97 500,000 499,933
Central Illinois Public Service, 6.125%, due 7/01/97 2,000,000 2,003,840
Chase Manhattan Bank, 7.875%, due 1/15/97 750,000 750,574
Consolidated Rail, 6.00%, due 7/01/97 142,000 141,977
<PAGE>
<CAPTION>
Money Market Portfolio, continued
<S> <C> <C>
Cooper Industries, 7.77%, due 10/21/97 5,000,000 5,063,808
Cooper Industries, 7.81%, due 10/15/97 3,000,000 3,038,398
*Espanola/Nambe Variable Rate Demand Note, 5.84%, next
redemption date 1/02/97, due 6/01/2006 2,500,000 2,500,000
Ford Capital, 9.75%, due 6/05/97 3,700,000 3,755,316
Ford Holdings, 9.25%, due 7/15/97 3,168,000 3,220,923
Ford Motor Credit Corporation, 6.75%, put date 7/15/97 350,000 351,922
GE Capital Corporation, 7.00%, due 4/03/97 1,518,000 1,522,190
GE Capital Corporation, 4.55%, due 10/27/97 2,500,000 2,471,888
*General Motors Acceptance Corporation Floating Rate Note,
5.68%, next redemption date 4/13/97, due 4/13/98 10,000,000 10,000,000
General Motors Acceptance Corporation, 7.40%, due 1/14/97 170,000 170,130
General Motors Acceptance Corporation, 7.80%, due 5/05/97 9,200,000 9,264,405
General Motors Acceptance Corporation, 7.90%, due 5/01/97 1,500,000 1,509,712
General Telephone, California, 6.75%, due 12/01/97 2,500,000 2,500,000
General Nutrition Corporation, 11.375%, put date 3/03/97 5,000,000 5,183,933
Golden West Financial, 10.25%, due 5/15/97 475,000 482,422
*Hancor Incorporated Floating Rate Note, 5.84%, next
redemption date 1/02/97, due 12/01/2004 800,000 800,000
Hertz Corporation, 10.125%, due 3/01/97 2,000,000 2,014,965
Marshall & Isley, 7.375%, due 10/31/97 10,000,000 10,125,300
Michigan Consolidated Gas, 6.25%, due 5/01/97 1,500,000 1,502,857
Minnesota Mining & Manufacturing, 6.375%, due 6/16/97 1,000,000 1,001,186
Morgan Stanley Incorporated, 7.32%, due 1/15/97 500,000 500,292
*Mubea, Incorporated Floating Rate Note, 5.84%, next
redemption date 1/02/97, due 12/01/2004 5,000,000 5,000,000
NBD Bank N.A., 7.875%, due 1/21/97 250,000 250,266
Philip Morris Companies, 9.25%, due 12/01/97 1,568,000 1,615,090
Philip Morris Companies, 9.75%, due 5/01/97 814,000 824,532
Philip Morris Companies, 8.75%, due 6/15/97 500,000 506,712
Philip Morris Companies, 7.50%, due 3/15/97 870,000 873,155
*Presrite Corporation Floating Rate Note, 5.84%, next
redemption date 1/02/97, due 1/01/2004 2,540,000 2,540,000
*Seariver Maritime Financial Holdings Floating Rate Note,
5.405%, next redemption date 1/02/97, due 10/01/2111 7,000,000 7,000,000
Sears Roebuck & Company, 6.66%, due 5/20/97 1,000,000 1,003,456
Sears Roebuck & Company, 7.41%, due 6/11/97 100,000 100,629
Southern California Edison, 5.90%, due 1/15/97 1,000,000 1,000,237
Virginia Electric & Power, 7.25%, due 3/01/97 3,250,000 3,258,635
*White Castle Corporation, Floating Rate Note, 5.84%,
next redemption date 1/02/97, due 12/01/2010 9,000,000 9,000,000
TOTAL CORPORATE OBLIGATIONS ===========
(Cost $115,650,136) 115,650,136
-----------
U.S. TREASURY NOTES - 4.0%
U.S. Treasury Note, 6.00%, due 8/31/97 4,000,000 4,005,201
U.S. Treasury Note, 6.00%, due 11/30/97 10,000,000 10,043,606
TOTAL U.S. TREASURY NOTES ===========
(Cost $14,048,807) 14,048,807
-----------
<PAGE>
<CAPTION>
Money Market Portfolio, continued
<S> <C> <C>
U.S. TREASURY BILLS - 0.0%
U.S. Treasury Bill, 4.906%, due 1/09/97 63,100 63,031
TOTAL U.S. TREASURY BILLS =========
(Cost $63,031) 63,031
---------
U.S. GOVERNMENT OBLIGATIONS - 4.1%
Federal Home Loan Mortgage Corporation, 5.10%,
due 1/13/97 100,000 99,995
Federal Home Loan Mortgage Corporation, 6.47%,
due 7/07/97 500,000 501,978
Federal Home Loan Bank Note, 5.50%, due 3/21/97 235,000 235,000
Federal Farm Credit, 5.32%, due 2/03/97 200,000 199,895
*Federal Home Loan Bank Floating Rate Note, 5.803%,
due 4/08/97, next redemption date 1/02/97 2,000,000 2,000,863
*Student Loan Marketing Association Floating Rate Note,
5.48%, due 8/03/99, next redemption date 7/02/96 4,350,000 4,353,782
*Student Loan Marketing Association Floating Rate Note,
5.43%, due 11/10/98, next redemption date 7/02/96 5,000,000 5,000,000
*Student Loan Marketing Association Floating Rate Note,
5.41%, due 11/24/97, next redemption date 7/02/96 2,000,000 1,999,816
Tennesee Valley Authority, 6.00%, due 1/15/97 100,000 100,009
TOTAL U.S. GOVERNMENT OBLIGATIONS ==========
(Cost $14,491,338) 14,491,338
----------
REPURCHASE AGREEMENTS - 9.3%
(Collateralized by U.S. government obligations -
market value $32,927,954)
Paine Webber Incorporated, dated 12/31/96, 6.35%,
due 1/02/97 21,000,000 21,000,000
Prudential Bache Securities, dated 12/31/96,
6.75%, due 1/02/97 11,550,000 11,550,000
TOTAL REPURCHASE AGREEMENTS ==========
(Cost $32,550,000) 32,550,000
----------
TOTAL INVESTMENTS - 100% ============
(Cost $350,074,839) $350,074,839
------------
<FN>
* - Floating Rate as of 12/31/96.
</FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
The
Institutional
Fund
<S> <C>
Assets:
Investment in corresponding portfolio $232,942,318
Unamortized organizational costs 7,924
Prepaid expenses and other assets 929
============
Total Assets 232,951,171
------------
Liabilities:
Dividends payable 778,510
Accrued transfer agent and
administrative fees 19,600
Other accrued liabilities 10,683
============
Total Liabilities 808,793
------------
Net Assets:
Capital 232,142,378
============
Net Assets $232,142,378
------------
Capital Stock Outstanding 232,142,378
Net Asset Value, Offering and
Redemption Price Per Share $1.00
------------
See accompanying notes to financial statements
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
The
Institutional
Fund
<S> <C>
Net Investment Income From Corresponding Portfolio:
Interest $11,355,703
Expenses (381,437)
-----------
Total Net Investment Income From Corresponding Portfolio 10,974,266
-----------
Fund Expenses:
Legal fees 1,730
Audit fees 5,929
Printing and Postage 4,771
Administrative fee 62,698
Transfer agent fees 124,592
Trustees fees and expenses 5,805
Insurance 2,738
Distribution plan 40,180
Registration expense 1,084
Amortization of organizational costs 3,203
24f-2 filing fee 19,575
Other expenses 5,019
-----------
Total expenses 277,324
Expenses reimbursed by adviser (147,915)
-----------
Total Expenses - net 129,409
-----------
INVESTMENT INCOME - NET 10,844,857
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $10,844,857
===========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1996
The
Institutional
Fund
<S> <C> <C>
INCREASE IN NET ASSETS: 1996 1995
OPERATIONS:
Investment income - net $10,844,857 $3,327,472
----------- ----------
Net increase in net assets resulting
from operations 10,844,857 3,327,472
----------- ----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net (10,844,857) (3,327,472)
----------- ----------
Net decrease in net assets resulting
from dividends and distributions (10,844,857) (3,327,472)
CAPITAL TRANSACTIONS:
Net proceeds from sales 1,024,281,687 389,173,505
Reinvestment of dividends 4,122,320 1,987,756
Cost of redemptions (909,466,834) (337,450,306)
------------ ------------
Net increase in net assets
resulting from capital share transactions 118,937,173 53,710,955
------------ ------------
TOTAL INCREASE IN NET ASSETS 118,937,173 53,710,955
NET ASSETS - Beginning of period 113,205,205 59,494,250
------------ ------------
NET ASSETS - End of period $232,142,378 $113,205,205
============= ============
SHARE TRANSACTIONS:
Issued 1,024,281,687 389,173,505
Reinvested 4,122,320 1,987,756
Redeemed (909,466,834) (337,450,306)
------------ ------------
Change in shares 118,937,173 53,710,955
============= ============
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for an average share outstanding during each
period based upon audited financial statements
The Institutional Fund
Year Ended December 31,
For the Period
Year Ended December 31, June 15, 1994 2
1996 1995 to December 31, 1994
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05 0.06 0.03
Total From Investment Operations 0.05 0.06
====== ====== ======
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.05) (0.06) (0.03)
====== ====== ======
Total Distributions (0.05) (0.06) (0.03)
====== ====== ======
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
====== ====== ======
TOTAL RETURN 5.43% 6.01% 4.80% 1
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period ($000) 232,142 113,205 59,494
Ratio of Expenses to Average Net Assets 0.25% 0.25% 0.20% 1
Ratio of Net Investment Income to Average
Net Assets 5.30% 5.87% 4.51% 1
Ratio of Expenses to Average Net Assets,
before waiver of fees * 0.46% 0.55% 0.46% 1
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees * 5.09% 5.57% 4.25% 1
<FN>
1 Annualized
2 Date of commencement of operations
* Includes fees waived in corresponding portfolio
</FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
1. ORGANIZATION
The Flex-Partners Trust was organized in 1992 and is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Institutional Fund (the "Fund") commenced operations on June 15,
1994 when the Fund began investing all of its investable assets in a
corresponding open-end management investment company (the "Portfolio") having
the same investment objectives as the Fund. On December 31, 1996 The
Institutional Fund held approximately 66% of the total assets of The Money
Market Portfolio.
The financial statements of the Portfolio, including the Portfolio of
Investments, are included elsewhere in this report and should be read in
conjunction with the financial statements of the Fund.
2. SIGNIFICANT ACCOUNTING POLICES
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.
Valuation of Investments - Valuation of securities by the Portfolio is discussed
at Note 1 of the Notes to Financial Statements of the Money Market Portfolio
which are included elsewhere in this report.
Income Taxes - It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no Federal
income tax provision is required.
Organizational Costs - The cost related to the organization of the Fund has been
deferred and is being amortized on a straight-line basis over a five-year
period.
3. INVESTMENT ADVISORY, ACCOUNTING AND TRANSFER AGREEMENTS
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides the Portfolio with investment management research,
statistical and advisory services.
Mutual Funds Service Co., (MFS), a wholly-owned subsidiary of MII, serves as
stock transfer, dividend disbursing and shareholder servicing agent for the
Fund. Subject to a $4,000 annual minimum fee the Fund incurs an annual fee equal
to or the greater of $20 per shareholder account or 0.06% of the Fund's average
net assets, payable monthly.
MFS also provides the Trust with certain administrative services. The Fund
incurs an annual fee, payable monthly, of .03% of the Fund's average net assets.
The Fund has adopted a distribution expense plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Plans"). Pursuant to the Plans, the
Fund may annually incur certain expenses associated with the distribution of
fund shares in amounts not to exceed 3/100 of 1% of the Fund's average net
assets.
Certain officers and/or trustees of the Fund and the Portfolio are officers
and/or directors of MII, RMA and MFS.
4. CAPITAL SHARE TRANSACTIONS
At December 31, 1996, an indefinite number of shares of $0.10 par value stock
were authorized in the Fund and capital amounted to $232,142,378 in The
Institutional Fund. Transactions in capital stock are included elsewhere in this
report.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
The Flex-Partners' Trust
The Institutional Fund:
We have audited the accompanying statement of assets and liabilities of The
Flex-Partners' Trust, The Institutional Fund (Fund) as of December 31, 1996, and
the related statement of operations, statement of changes in net assets and the
financial highlights for the period indicated herein. These financial statements
and the financial highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit 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 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. Our
procedures included verification of securities owned as of December 31, 1996, by
correspondence with the custodian and other appropriate audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Flex-Partners' Trust, The Institutional Fund at December 31, 1996, the results
of its operations, the changes in its net assets and the financial highlights
for the period indicated herein, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
January 31, 1997
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
Money
Market
Portfolio
<S> <C>
Assets:
Investments at market value* $317,524,839
Repurchase agreements* 32,550,000
Cash 248,915
Interest receivable 3,167,087
Dividends receivable -
Prepaid/Other assets 844
Unamortized organization costs 2,545
============
Total Assets 353,494,230
------------
Liabilities:
Payable for futures contract settlement -
Payable to corresponding Fund 505,357
Payable to investment adviser 46,355
Accrued fund accounting fees 6,313
Other accrued liabilities 5,980
============
Total Liabilities 564,005
------------
Net Assets:
Capital 352,930,225
Net unrealized gain (loss) on investments -
============
Net Assets $352,930,225
------------
*Securities at cost 350,074,839
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
tatement of Operations
For the year ended December 31, 1996
Money
Market
Portfolio
<S> <C>
INVESTMENT INCOME - NET:
Interest $20,131,315
Dividends -
===========
Total Investment Income 20,131,315
-----------
Expenses:
Investment advisory fees 1,060,982
Legal fees 1,522
Audit fees 13,848
Custodian fees 21,008
Accounting fees 74,002
Trustees fees and expenses 4,938
Insurance 3,913
Amortization of organization cost 4,992
Other expenses 3,720
============
Total Expenses 1,188,925
Investment advisory fees waived (512,876)
Directed brokerage payments received -
============
Total Expenses - net 676,049
------------
INVESTMENT INCOME - NET 19,455,266
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on futures contracts -
Net realized gain (loss) on investments -
Net change in unrealized appreciation
(depreciation) of investments -
============
NET GAIN (LOSS) ON INVESTMENTS -
============
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 19,455,266
============
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1996
Money
Market
Portfolio
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income - net $19,455,266 $11,720,462
Net realized gain (loss) on investments
and futures contracts - -
Net change in unrealized appreciation
(depreciation) of investments - -
----------- -----------
Net increase in net assets resulting from
operations 19,455,266 11,720,462
----------- -----------
TRANSACTIONS OF INVESTORS' BENEFICIAL INTERESTS:
Contributions 1,414,075,891 753,617,719
Withdrawals (1,335,249,306) (735,213,083)
--------------- -------------
Net increase (decrease) in net assets resulting from
transactions of investors' beneficial interests 78,826,585 18,404,636
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS 98,281,851 30,125,098
=========== ===========
NET ASSETS - Beginning of period 254,648,374 224,523,276
=========== ===========
NET ASSETS - End of period $352,930,225 $254,648,374
=========== ===========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Ratios/Supplemental Data
MONEY MARKET PORTFOLIO
For The Period
May 1, 1992
Year Ended December 31, to Dec. 31, 1992
1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Assets, End of Period ($000) 352,930 256,126 224,523 200,148 244,272
Ratio of Expenses to Average Net Assets 0.19% 0.21% 0.19% 0.19% 0.18% 1
Ratio of Net Investment Income to Average Net Assets 5.34% 5.87% 4.28% 3.09% 3.60% 1
Ratio of Expenses to Average Net Assets, before
waiver of fees 0.33% 0.37% 0.39% 0.40% 0.40% 1
Ratio of Net Investment Income to Average Net Assets,
before waiver of fees 5.20% 5.70% 4.08% 2.88% 3.38% 1
Portfolio Turnover Rate N/A N/A N/A N/A N/A
<FN>
1 Annualized
</FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
The Money Market Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940, as amended, as a no-load, open-end management investment
company which was organized as a trust under the laws of the State of New York.
The Declaration of Trust permits the Trustees to issue beneficial interests in
the Portfolio. The following is a summary of significant accounting policies
followed by the Portfolio.
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.
Investments - Money market securities held in the Money Market Portfolio are
valued at amortized cost, which approximates market value in accordance with
Rule 2a-7 of the Investment Company Act of 1940. Amortized costs also represents
cost for federal income tax purposes.
Repurchase Agreements - It is the Portfolio's policy to take possession of the
collateral for repurchase agreements before payment is made to the seller.
Market value of the collateral at the date of purchase must be at least 100% of
the amount of the repurchase agreement.
Income Taxes - It is the Portfolio's policy to comply with the requirements of
the Internal Revenue Code applicable to partnerships. Therefore, no Federal
income tax provision is required.
Organizational Costs - The cost related to the organization the Portfolio has
been deferred and is being amortized on a straight-line basis over a five-year
period.
Other - The Portfolio follows industry practice and records security
transactions on the trade date. Gains and losses on security transactions are
determined on the first-in, first-out ("FIFO") basis. Interest income is
recognized as earned.
2. INVESTMENT ADVISORY, ACCOUNTING AND TRANSFER AGREEMENTS
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides the Portfolio with investment management, research,
statistical and advisory services, and pays certain other expenses of the
Portfolio. For such services the Portfolio pays monthly a fee based upon the
average daily value of the Portfolio's net assets at the following annual rate:
0.40% of average net assets up to $100 million and 0.25% of average net
exceeding $100 million. During the year ended December 31, 1996, RMA voluntarily
waived investment advisory fees in the Portfolio.
Mutual Funds Service Co. (MFS), a wholly-owned subsidiary of MII, serves as
accounting services agent for the Portfolio. The minimum annual fee for all such
services is $30,000. Subject to the applicable minimum fee, The Portfolio's
annual fee, payable monthly, is computed at the rate of 0.15% of the first $10
million, 0.10% of the next $20 million, 0.02% of the next $50 million and 0.01%
in excess of $80 million of the Portfolio's average net assets.
Certain officers and/or trustees of each Portfolio are officers and/or directors
of MII, RMA and MFS.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
The Money Market Portfolio:
We have audited the accompanying statement of assets and liabilities of the
Money Market Portfolio (Portfolio), including the portfolio of investments, as
of December 31, 1996, and the related statement of operations, statements of
changes in net assets and the financial highlights for each of the periods
indicated herein. These financial statements and the financial highlights are
the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements and 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 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. Our procedures included verification of securities owned as of
December 31, 1996, by correspondence with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Money Market Portfolio at December 31, 1996, the results of its operations, the
changes in its net assets and the financial highlights for each of the periods
indicated herein, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
January 31, 1997
<PAGE>
MANAGER AND INVESTMENT ADVISER
R. Meeder & Associates
6000 Memorial Drive
P.O. Box 7177
Dublin, Ohio 43017
BOARD OF TRUSTEES
Milton S. Bartholomew
Dr. Roger D. Blackwell
John M. Emery
Richard A. Farr
William L. Gurner
Robert S. Meeder, Sr.
Russell G. Means
Lowell G. Miller
Walter L. Ogle
Phillip A. Voelker
CUSTODIAN
Star Bank, N.A., Cincinnati
Cincinnati, Ohio 45201
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Mutual Funds Service co.
6000 Memorial Drive
Dublin, Ohio 43017
AUDITORS
KPMG Peat Marwick LLP
Columbus, Ohio 43215
