Boston 1784 Institutional
Money Market Funds
[Boston 1784 Funds Logo omitted]
Annual Report to Shareholders
May 31, 1998
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TABLE OF CONTENTS
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LETTER TO SHAREHOLDERS 1
INVESTMENT ADVISER'S REPORT 2
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE 4
FINANCIAL STATEMENTS 6
REPORT OF INDEPENDENT ACCOUNTANTS 18
NOTICE TO SHAREHOLDERS 19
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BOSTON 1784 FUNDS:
[BULLET] ARE NOT INSURED BY THE FDICOR ANY OTHER GOVERNMENTAL AGENCY;
[BULLET] ARE NOT GUARANTEED BY BANKBOSTON, N.A. OR ANY OF ITS AFFILIATES;
[BULLET] ARE NOT DEPOSITS OR OBLIGATIONS OF BANKBOSTON, N.A. OR ANY OF ITS
AFFILIATES;
[BULLET] INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED.
BANKBOSTON, N.A. SERVES AS INVESTMENT ADVISER, CUSTODIAN AND SHAREHOLDER
SERVICING AGENT FOR BOSTON 1784 FUNDS. BOSTON 1784 FUNDS ARE DISTRIBUTED BY
SEI INVESTMENTS DISTRIBUTION CO., A PARTY INDEPENDENT OF BANKBOSTON, N.A.
OR ANY OF ITS AFFILIATES. FINANCIAL SERVICES COUNSELORS ARE REGISTERED
REPRESENTATIVES OF BANKBOSTON INVESTOR SERVICES, INC. (MEMBER NASD/SIPC), A
WHOLLY-OWNED SUBSIDIARY OF BANKBOSTON, N.A.
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BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
LETTER TO SHAREHOLDERS
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[PHOTO OF ALLEN CROESSMANN, MANAGING DIRECTOR OMITTED]
[PHOTO OF ROBERT NESHER, PRESIDENT OMITTED]
We are pleased to provide this Annual Report covering, for the first time, two
Boston 1784 Institutional Money Market Funds:
[BULLET] BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND. For the
year ended May 31, 1998, the Fund produced a total return of 5.36%,
outperforming both its IBC/Financial Data and Lipper benchmarks for
the same period, and ranking it in the top 25% (26 out of 114) of the
Lipper Institutional U.S. Treasury Money Market Average. Moreover,
the Fund achieved these results while maintaining stringent credit
standards and sustaining an `AAAm' rating from Standard & Poor's,
which is based on the Fund's credit quality, market price exposure
and management. The Fund's net assets totaled $4.29 billion as of
May 31, 1998.
[BULLET] BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND. This Fund began
operations on November 5, 1997 and as of May 31, 1998 had $302
million in net assets. Total annualized return through May 31, 1998
was 5.55%.
You'll find more complete information on both Boston 1784 Institutional U.S.
Treasury Money Market Fund and Boston 1784 Institutional Prime Money Market Fund
in the Management's Discussion of Fund Performance section of this report.
Please keep in mind that past performance is no guarantee of future results.
Thank you for selecting Boston 1784 Funds to manage your cash reserves. Please
contact your Investment Counselor or call 1-800-BKB-1784 with any questions
about your account.
Sincerely,
/S/ SIGNATURE /S/ SIGNATURE
Robert Nesher Allen Croessmann
President Managing Director,
Boston 1784 Funds Investment Services
BankBoston, N.A.
1
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INVESTMENT ADVISER'S REPORT
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[PHOTO OF EDWARD G. RILEY, JR., CHIEF INVESTMENT OFFICER OMITTED]
If the past year had a theme song, it might well be, "The Beat Goes On." Despite
occasional ups and downs in the financial market, investors were the
beneficiaries of stable interest rates, the 8th year of a bull market in stocks,
and the 7th year of economic expansion.
There's no doubt that this is a robust economy. In 1997, we saw solid growth
in the Gross Domestic Product (GDP), while the first quarter of 1998 saw an
annualized 5.4% increase in GDP. Auto sales are firm and dealers report
improving floor traffic. Retail sales are up. Banks point to solid loan demand.
And all this with barely a hint of inflation, which hovers around a negligible
1%.
But, as we enter the second half of 1998, there are clear hints that things
won't go as smoothly as in the first half. The pace of manufacturing and
employment growth are slowing -- yet the pressure to increase prices to maintain
profits continues to rise. Unfortunately, the other antidote to profit declines
is layoffs. With slowing revenue growth in the second half, companies will be
particularly hard pressed to sustain earnings, avoid price increases, and
maintain employment levels -- much less raises -- all at the same time.
Storm clouds may be massing on the inflation horizon as well. The housing
component of the Consumer Price Index (CPI) is rising, medical inflation is
accelerating, and prices in the service sector of the economy are going up.
Although productivity is strong, wages and salaries are increasing at a 4.4%
rate, not far behind the economy's robust 5.4% growth. As a result, the most
recent CPI increase was the largest in six months, while the Producer Price
Index increased for the first time in six months.
MONEY MARKET REVIEW
Despite much discussion to the contrary, however, the Federal Reserve Board
has left the Federal Funds rate unchanged at 5.50%, following a 0.25% increase
in March 1997. Moreover, we do not expect short-term interest rates to increase
in the near future -- and, in fact, we could argue that they should come down
further. Historically, the real Federal Funds rate -- the difference between the
stated interest rate and inflation -- has ranged between 2.5% and 3.0%. Simple
arithmetic leads to the conclusion that rates should drop by another 100 basis
points (1%) or more. Obviously, despite its economic benefits, such a move would
not be good news for money market investors.
Of course, the Federal Reserve Board is walking a tightrope. It is concerned
about economic inflation, and Chairman Greenspan periodically
2
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BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
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buffets the markets by voicing his thoughts on asset inflation. The natural
inclination of an inflation-fighter is to raise rather than lower rates, but the
Federal Reserve Board cannot afford to do that with economic growth slowing and
the Asian crisis threatening a regional, or even global, recession. The result:
assuming inflation remains subdued, short-term interest rates will remain
unchanged for the near-term and possibly decline by year end.
/S/ SIGNATURE
Edward G. Riley, Jr.
Chief Investment Officer
BankBoston, N.A.
FEDERAL FUNDS RATE
MAY 31, 1995 -- MAY 31, 1998
[LINE GRAPH OMITTED]
PLOT POINTS TO FOLLOW:
Month Rate
May 1995 6.01%
Nov 1995 5.80%
May 1996 5.24%
Nov 1996 5.31%
May 1997 5.50%
Nov 1997 5.50%
May 1998 5.50%
3
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MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
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BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
The objective of Boston 1784 Institutional U.S. Treasury Money Market Fund is to
preserve the principal value of a shareholder's investment and to maintain a
high degree of liquidity while providing current income. As of May 31, 1998, the
Fund had grown to $4.29 billion in net assets from $2.59 billion in net assets
on June 1, 1997.
For the year ended May 31, 1998, the Fund had a total return of 5.36%,
compared with returns of 5.26% for the IBC/Financial Data Government-Only
Institutional-Only Average and 5.18% for the Lipper Institutional U.S. Treasury
Money Market Average for the same period. The Fund ranked in the top 25% (26 of
114) of the Lipper Institutional U.S. Treasury Money Market Average. The 7-day
yield as of May 31, 1998 was 5.21%.
In July 1997, The Fund's "AAAm" rating was again confirmed by Standard and
Poor's. The rating is based on an analysis of the Fund's credit quality, market
price exposure and management. The rating signifies that, in the opinion of
Standard and Poor's, the Fund offers excellent safety of principal and a
superior capacity to maintain a $1.00 per share net asset value at all times.
The Fund attempts to maintain these characteristics through conservative
investment practices and strict internal controls. The Fund is reviewed on a
weekly basis by Standard and Poor's.
The Fund invests primarily in U.S. government agency securities, U.S.
Treasury obligations and repurchase agreements fully collateralized by U.S.
Treasury obligations.
The Federal Funds rate has remained unchanged at 5.50% since March 1997 and
we do not anticipate any movement in short-term interest rates in the near
future given the apparent low inflation in the economy.
BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN BOSTON 1784
INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND, VERSUS THE IBC/FINANCIAL DATA
GOVERNMENT-ONLY INSTITUTIONAL-ONLY AVERAGE AND THE LIPPER INSTITUTIONAL U.S.
TREASURY MONEY MARKET AVERAGE
ONE YEAR RETURN 5.36%
ANNUALIZED 3 YEAR RETURN 5.33%
ANNUALIZED INCEPTION TO DATE 4.84%
[LINE GRAPH OMITTED]
PLOT POINTS TO FOLLOW:
BOSTON 1784 INSTITUTIONAL IBC/FINANCIAL DATA LIPPER INSTITUTIONAL
U.S. TREASURY MONEY GOVERNMENT-ONLY U.S. TREASURY MONEY
MARKET FUND INSTITUTIONAL-ONLY AVERAGE MARKET AVERAGE
6/30/93 $10,000 $10,000 $10,000
May 1994 $10,286 $10,275 $10,271
May 1995 $10,805 $10,784 $10,773
May 1996 $11,394 $11,363 $11,343
May 1997 $11,982 $11,940 $11,912
May 1998 $12,624 $12,568 $12,529
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
4
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BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
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BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
The objective of Boston 1784 Institutional Prime Money Market Fund is to
preserve the principal value of a shareholder's investment and to maintain a
high degree of liquidity while providing current income. The Fund began
operations on November 5, 1997 and as of May 31, 1998 had $302.3 million in net
assets.
For the period November 5, 1997 through May 31, 1998, the Fund had an
annualized return of 5.55%, compared with returns of 5.31% for the IBC/Financial
Data First Tier Institutional Only Average and 5.31% for the Lipper
Institutional Money Market Funds Average for the same period. Based on total
return, the Fund ranked among the top 34% (102 of 299) of the Lipper
Institutional Money Market Funds Average for the period ended May 31, 1998. The
7-day yield as of May 31, 1998 was 5.31%. The Fund's return and resulting
ranking reflect a waiver of certain management fees and expenses (see Financial
Highlights).
The Fund invests primarily in high quality money market instruments,
including short-term U.S. government obligations, corporate bonds, bank
obligations (including certificates of deposit, bankers' acceptances and fixed
time obligations), commercial paper, variable rate demand notes, taxable
municipal securities and repurchase agreements.
We expect interest rates to remain fairly stable in the near term given the
relatively low rate of inflation in the economy.
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN BOSTON 1784 PRIME
MONEY MARKET FUND, VERSUS THE IBC/FINANCIAL DATA FIRSTTIER INSTITUTIONAL ONLY
AVERAGE AND THE LIPPER INSTITUTIONAL MONEY MARKET FUNDS AVERAGE
ANNUALIZED INCEPTION TO DATE 5.55%
CUMULATIVE INCEPTION TO DATE 3.11%
[LINE GRAPH OMITTED]
PLOT POINTS TO FOLLOW:
BOSTON 1784 INSTITUTIONAL IBC/FINANCIAL DATA LIPPER INSTITUTIONAL
PRIME MONEY FIRST TIER MONEY MARKET
MARKET FUND INSTITUTIONAL-ONLY AVERAGE FUNDS AVERAGE
11/30/97 $10,000 $10,000 $10,000
May 1998 $10,271 $10,269 $10,265
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
5
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AS OF MAY 31, 1998
STATEMENT OF NET ASSETS
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BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
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DESCRIPTION PAR (000) VALUE (000)
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U.S. TREASURY OBLIGATIONS -- 15.3%
U.S. Treasury Bills (A)
5.146%, 09/17/98 $45,000 $ 44,320
5.198%, 10/15/98 45,000 44,139
5.245%, 11/12/98 50,000 48,834
5.267%, 11/27/98 67,000 65,291
U.S. Treasury Notes
5.250%, 07/31/98 47,500 47,475
6.250%, 07/31/98 92,850 92,945
6.125%, 08/31/98 128,265 128,416
6.000%, 09/30/98 25,000 25,051
5.625%, 11/30/98 45,000 45,043
5.875%, 01/31/99 45,000 45,122
6.250%, 03/31/99 66,500 66,877
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TOTAL U.S. TREASURY OBLIGATIONS
(Cost $653,513) 653,513
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U.S. GOVERNMENT AGENCY OBLIGATIONS -- 28.6%
Federal Home Loan Bank
5.775%, 10/30/98 15,000 15,007
5.835%, 12/17/98 21,150 21,144
Federal Home Loan Bank (B)
5.590%, 06/02/98 27,000 26,990
5.630%, 06/02/98 10,000 9,998
Federal Home Loan Mortgage
Corporation (A)
5.439%, 06/10/98 25,000 24,966
5.482%, 06/12/98 20,000 19,967
5.488%, 06/12/98 11,000 10,982
5.451%, 06/15/98 25,000 24,947
5.452%, 06/18/98 72,500 72,315
5.454%, 06/18/98 15,000 14,962
5.432%, 06/19/98 13,500 13,464
5.436%, 06/23/98 35,000 34,884
5.445%, 06/26/98 25,000 24,906
5.461%, 06/26/98 45,000 44,830
5.458%, 06/30/98 25,000 24,891
5.466%, 07/30/98 22,500 22,301
5.454%, 08/07/98 17,000 16,830
5.482%, 09/30/98 9,636 9,463
5.536%, 10/09/98 2,000 1,961
Federal National Mortgage
Association
5.740%, 06/09/98 2,500 2,500
5.350%, 07/16/98 9,000 8,996
5.350%, 08/12/98 2,735 2,733
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DESCRIPTION PAR (000) VALUE (000)
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Federal National Mortgage
Association (A)
5.461%, 06/10/98 $45,000 $ 44,939
5.470%, 06/10/98 50,000 49,932
5.493%, 06/11/98 45,000 44,932
5.497%, 06/19/98 25,000 24,932
5.460%, 06/30/98 22,000 21,904
5.486%, 07/15/98 50,000 49,669
5.481%, 07/17/98 45,000 44,689
5.479%, 07/23/98 26,731 26,522
5.476%, 07/24/98 25,000 24,801
5.483%, 07/27/98 29,000 28,756
5.485%, 07/30/98 22,769 22,567
5.488%, 09/14/98 15,000 14,765
5.496%, 09/24/98 44,350 43,589
5.501%, 09/24/98 25,500 25,062
5.500%, 10/08/98 25,000 24,518
5.482%, 10/13/98 5,000 4,901
5.507%, 11/16/98 46,000 44,849
5.498%, 12/30/98 33,395 32,355
Federal National Mortgage
Association (B)
5.335%, 06/02/98 6,500 6,494
5.511%, 06/14/98 2,000 1,999
Federal National Mortgage
Association, MTN
7.000%, 07/13/98 5,000 5,008
5.390%, 08/05/98 7,500 7,499
Federal National Mortgage
Association, MTN (B)
5.400%, 06/02/98 10,000 10,000
5.545%, 06/02/98 25,000 24,998
Student Loan Marketing
Association (B)
5.345%, 06/02/98 67,636 67,618
5.355%, 06/02/98 58,900 58,877
5.427%, 06/02/98 20,675 20,671
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TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $1,225,883) 1,225,883
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6
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BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
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DESCRIPTION PAR (000) VALUE (000)
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REPURCHASE AGREEMENTS -- 55.6%
Dean Witter
5.530%, dated 05/29/98, matures
06/01/98, repurchase price
$160,073,733 (collateralized
by U.S. Treasury Instruments:
total market value
$163,200,256) (C) $160,000 $160,000
First Boston
5.500%, dated 05/29/98, matures
06/01/98, repurchase price
$161,073,792 (collateralized
by U.S. Treasury Bonds:
total market value
$162,014,812) (C) 161,000 161,000
Goldman Sachs
5.600%, dated 05/29/98, matures
06/01/98, repurchase price
$200,093,333 (collateralized
by U.S. Treasury Instruments:
total market value
$204,000,295) (C) 200,000 200,000
Greenwich Capital
5.550%, dated 05/29/98, matures
06/01/98, repurchase price
$610,282,125 (collateralized
by U.S. Treasury Instruments:
total market value
$622,226,263) (C) 610,000 610,000
Hong Kong Shanghai Bank
5.520%, dated 05/29/98, matures
06/01/98, repurchase price
$161,074,060 (collateralized
by a U.S. Treasury Bond:
total market value
$163,847,500) (C) 161,000 161,000
J. P. Morgan
5.570%, dated 05/29/98, matures
06/01/98, repurchase price
$477,385,216 (collateralized
by U.S. Treasury Instruments:
total market value
$486,715,905) (C) 477,164 477,164
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DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Prudential Securities
5.570%, dated 05/29/98, matures
06/01/98, repurchase price
$615,285,463 collateralized
by U.S. Treasury Instruments:
total market value
$627,293,267) (C) $615,000 $ 615,000
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TOTAL REPURCHASE AGREEMENTS
(Cost $2,384,164) 2,384,164
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TOTAL INVESTMENTS -- 99.5%
(Cost $4,263,560) 4,263,560
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OTHER ASSETS AND LIABILITIES,
NET -- 0.5% 22,241
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NET ASSETS:
Capital Shares (unlimited
authorization -- no par
value) based on 4,285,609,599
outstanding shares of
beneficial interest 4,285,610
Accumulated net realized
gain on investments 76
Undistributed net investment income 115
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TOTAL NET ASSETS -- 100.0% $4,285,801
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NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $1.00
==========
(A) THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE EFFECTIVE YIELD AS
OF MAY 31, 1998.
(B) VARIABLE RATE SECURITY. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON MAY 31, 1998. THE DATE SHOWN IS THE NEXT SCHEDULED
RESET DATE.
(C) TRI-PARTY REPURCHASE AGREEMENT
MTN--MEDIUM TERM NOTE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
<PAGE>
AS OF MAY 31, 1998
STATEMENT OF NET ASSETS
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BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
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DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER -- 52.2%
BANKS -- 7.9%
Abbey National Bank (A)
5.613%, 10/20/98 $6,000 $ 5,872
Banc One (A)
5.556%, 06/02/98 8,000 7,999
Credit Suisse First Boston (A)
5.557%, 07/15/98 4,000 3,973
5.617%, 07/15/98 4,000 3,973
5.594%, 08/27/98 2,000 1,973
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23,790
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FINANCIAL SERVICES -- 39.9%
Alpine Securitization (A)
5.563%, 06/11/98 5,000 4,992
Alpine Securitiztion (A)
5.596%, 08/11/98 4,000 3,956
Bankers Trust Alex Brown
Holdings Funding (A)
5.632%, 10/22/98 6,000 5,869
Barton Capital (A)
5.440%, 06/03/98 3,618 3,617
5.553%, 06/05/98 1,580 1,579
5.560%, 06/19/98 3,000 2,992
Centric Capital (A)
5.578%, 07/10/98 5,000 4,970
Corporate Receivable (A)
5.553%, 06/12/98 3,000 2,995
Delaware Funding (A)
5.567%, 07/20/98 4,000 3,970
Falcon Asset Securitization (A)
5.536%, 06/09/98 3,000 2,996
5.546%, 06/12/98 2,000 1,997
5.549%, 06/18/98 5,000 4,987
General Electric Capital (A)
5.576%, 06/03/98 4,708 4,707
5.572%, 06/10/98 5,000 4,993
Greenwich Funding (A)
5.552%, 06/02/98 5,000 4,999
5.581%, 07/20/98 2,099 2,083
5.594%, 07/29/98 3,000 2,973
J.P. Morgan (A)
5.645%, 11/16/98 8,000 7,795
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DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Merrill Lynch (A)
5.554%, 06/19/98 $ 1,180 $ 1,177
5.553%, 06/26/98 2,000 1,992
5.568%, 07/30/98 3,000 2,973
5.581%, 08/06/98 3,000 2,970
Prudential Funding (A)
5.653%, 06/01/98 10,000 10,000
Receivables Capital (A)
5.665%, 06/04/98 5,000 4,998
5.566%, 06/18/98 1,000 997
5.575%, 06/19/98 3,000 2,992
UBS Finance (A)
5.643%, 06/01/98 10,000 10,000
Woodstreet Funding (A)
5.653%, 06/01/98 10,000 10,000
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120,569
----------
MUNICIPALS -- 4.4%
Dekalb County, Georgia,
Emory University
5.650%, 06/04/98 2,000 2,000
Lower Colorado River Authority
5.630%, 06/30/98 3,500 3,500
New York City, New York
5.600%, 06/11/98 2,000 2,000
5.630%, 07/02/98 2,300 2,300
5.650%, 07/08/98 1,035 1,035
Saint Paul, Minnesota GO
5.720%, 08/14/98 2,500 2,500
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13,335
----------
TOTAL COMMERCIAL PAPER
(Cost $157,694) 157,694
----------
CORPORATE BONDS -- 12.6%
Associates, MTN
5.560%, 12/17/98 1,000 999
Bank One Wisconsin
5.740%, 05/11/99 1,000 999
Bowie Assisted Living,
Series 1997, LOC (B) (C)
5.800%, 06/03/98 6,200 6,200
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BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
================================================================================
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DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS (CONTINUED)
Chrysler
5.625%, 01/15/99 $1,450 $ 1,449
Chrysler Financial, MTN
5.740%, 01/11/99 4,000 4,003
First Chicago National Bank
8.500%, 06/01/98 1,025 1,025
6.050%, 11/04/98 6,000 6,006
Ford Motor Credit
5.320%, 09/15/98 400 400
7.250%, 05/15/99 1,583 1,603
Ford Motor Credit, MTN
7.900%, 05/17/99 5,000 5,099
General Motors Acceptance
7.750%, 01/15/99 495 501
IBM Credit
5.680%, 05/07/99 1,000 999
Manufacturers Hanover
8.500%, 02/15/99 1,170 1,192
Merrill Lynch, EU
5.500%, 02/16/99 3,400 3,388
NationsBank
5.125%, 09/15/98 400 399
Norwest Financial
6.230%, 09/01/98 1,000 1,001
PepsiCo
7.625%, 11/01/98 250 252
Uno, LOC (B)
5.700%, 06/03/98 2,700 2,700
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TOTAL CORPORATE BONDS
(Cost $38,215) 38,215
----------
TAXABLE MUNICIPAL BONDS -- 5.3%
Barton Healthcare LLC (B)
5.700%, 06/03/98 700 700
Catholic Health Initiatives (B)
5.600%, 06/03/98 5,000 5,000
Illinois State Student
Assistance RB, LOC (B)
5.610%, 06/03/98 5,000 5,000
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DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Los Angeles, California,
Community Redevelopment
Agency RB, FSA (B)
5.650%, 06/03/98 $2,500 $ 2,500
Maryland State Health & Higher
Education Facilities RB,
Series B, LOC (B)
5.750%, 06/03/98 3,000 3,000
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TOTAL TAXABLE MUNICIPAL BONDS
(Cost $16,200) 16,200
----------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 6.3%
Federal Home Loan Bank
5.835%, 12/17/98 3,000 2,999
5.625%, 03/12/99 5,000 4,999
Federal Home Loan Mortgage
Corporation
5.630%, 01/05/99 1,000 1,000
Federal National Mortgage
Association, MTN
7.000%, 07/13/98 5,000 5,008
5.890%, 12/30/98 5,000 5,000
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TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $19,006) 19,006
----------
CERTIFICATE OF DEPOSIT -- 2.0%
Societe Generale
5.765%, 04/19/99 6,000 6,000
----------
TOTAL CERTIFICATE OF DEPOSIT
(Cost $6,000) 6,000
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9
<PAGE>
AS OF MAY 31, 1998
STATEMENT OF NET ASSETS
================================================================================
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND (CONCLUDED)
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DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 21.3%
J.P. Morgan
5.570%, dated 05/29/98, matures
06/01/98, repurchase price
$24,409,979 (collateralized
by U.S. Treasury Instruments:
total market value
$24,869,525) (D) $24,399 $ 24,399
Paine Webber
5.550%, dated 05/29/98, matures
06/01/98, repurchase price
$40,018,500 (collateralized by
U.S. Treasury Instruments:
total market value
$40,790,345) (D) 40,000 40,000
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $64,399) 64,399
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $301,514) 301,514
--------
OTHER ASSETS AND LIABILITIES,
NET -- 0.3% 824
--------
- --------------------------------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Capital Shares (unlimited
authorization -- no par value)
based on 302,338,000
outstanding shares of
beneficial interest $302,338
--------
TOTAL NET ASSETS -- 100.0% $302,338
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $1.00
========
(A) THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE EFFECTIVE YIELD AS
OF MAY 31, 1998.
(B) VARIABLE RATE SECURITY. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON MAY 31, 1998. THE DATE SHOWN IS THE NEXT SCHEDULED
RESET DATE.
(C) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS NORMALLY EXEMPT FROM
REGISTRATION TO QUALIFIED INSTITUTIONAL BUYERS.
(D) TRI-PARTY REPURCHASE AGREEMENT
EU--EUROBOND
GO--GENERAL OBLIGATION
LOC--SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A MAJOR
COMMERCIAL BANK OR OTHER FINANCIAL INSTITUTION.
MTN--MEDIUM TERM NOTE
RB--REVENUE BOND
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR THE
SECURITIES AS SET FORTH IN THE STATEMENT OF NET ASSETS.
FGIC--FINANCIAL GUARANTY INSURANCE CORPORATION
FSA--FINANCIAL SECURITY ASSURANCE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS (000)
================================================================================
FOR THE YEAR ENDED MAY 31, 1998 (EXCEPT WHERE NOTED)
<TABLE>
<CAPTION>
BOSTON BOSTON
1784 INSTITUTIONAL 1784 INSTITUTIONAL
U.S. TREASURY PRIME MONEY
MONEY MARKET FUND MARKET FUND (1)
================== ==================
<S> <C> <C>
INTEREST INCOME: $180,022 $6,397
-------- ------
EXPENSES:
INVESTMENT ADVISORY FEES 6,468 227
LESS: WAIVER OF INVESTMENT ADVISORY FEES -- (181)
ADMINISTRATOR FEES 2,303 79
REGISTRATION FEES 551 113
TRANSFER AGENT FEES & EXPENSES 418 20
PROFESSIONAL FEES 288 14
PRINTING 178 7
CUSTODIAN FEES 242 18
AMORTIZATION OF DEFERRED ORGANIZATIONAL COSTS 9 --
TRUSTEE FEES 73 1
OTHER EXPENSES 125 4
-------- ------
TOTAL EXPENSES, NET OF WAIVERS 10,655 302
-------- ------
NET INVESTMENT INCOME 169,367 6,095
-------- ------
NET REALIZED GAIN ON INVESTMENTS 95 --
-------- ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $169,462 $6,095
======== ======
<FN>
(1) BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND COMMENCED OPERATIONS ON
NOVEMBER 5, 1997. REFLECTS OPERATIONS FOR THE PERIOD FROM NOVEMBER 5, 1997
THROUGH MAY 31, 1998.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (000)
================================================================================
<TABLE>
<CAPTION>
BOSTON BOSTON
1784 INSTITUTIONAL 1784 INSTITUTIONAL
U.S. TREASURY PRIME MONEY
MONEY MARKET FUND MARKET FUND
======================= ==================
6/1/97 6/1/96 11/5/97
TO TO TO
5/31/98 5/31/97 5/31/98 (1)
-------- -------- ----------------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C>
NET INVESTMENT INCOME $ 169,367 $ 82,775 $ 6,095
NET REALIZED GAIN (LOSS) ON INVESTMENTS 95 (19) --
----------- ---------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 169,462 82,756 6,095
----------- ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
NET INVESTMENT INCOME (169,365) (82,777) (6,095)
REALIZED CAPITAL GAINS -- -- --
----------- ---------- -----------
TOTAL DISTRIBUTIONS (169,365) (82,777) (6,095)
----------- ---------- -----------
SHARE TRANSACTIONS:
VALUE FROM SHARES ISSUED IN REORGANIZATION (SEE NOTE 6) -- 1,047,876 --
PROCEEDS FROM SHARES ISSUED 14,628,533 5,295,692 1,438,198
REINVESTMENT OF CASH DISTRIBUTIONS 67,225 40,208 5,560
COST OF SHARES REDEEMED (13,001,541) (4,437,001) (1,141,420)
----------- ---------- -----------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 1,694,217 1,946,775 302,338
----------- ---------- -----------
TOTAL INCREASE IN NET ASSETS 1,694,314 1,946,754 302,338
=========== ========== ===========
NET ASSETS:
BEGINNING OF PERIOD 2,591,487 644,733 --
----------- ---------- -----------
NET ASSETS:
END OF PERIOD $ 4,285,801 $2,591,487 $302,338
=========== ========== ===========
CAPITAL SHARE TRANSACTIONS:
SHARES ISSUED IN REORGANIZATION (SEE NOTE 6) -- 1,047,876 --
SHARES ISSUED 14,628,533 5,295,692 1,438,198
SHARES ISSUED IN LIEU OF CASH DISTRIBUTIONS 67,225 40,208 5,560
SHARES REDEEMED (13,001,541) (4,437,001) (1,141,420)
----------- ---------- -----------
NET INCREASE IN CAPITAL SHARE TRANSACTIONS 1,694,217 1,946,775 302,338
=========== ========== ===========
<FN>
(1) BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND COMMENCED OPERATIONS ON NOVEMBER 5, 1997.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS
================================================================================
BOSTON 1784 INSTITUTIONAL MONEY MARKET FUNDS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
RATIO RATIO OF
NET NET NET RATIO OF EXPENSES NET 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>
BOSTON 1784 INSTITUTIONAL
U.S. TREASURY MONEY MARKET FUND
FOR THE YEAR ENDED
MAY 31, 1998 $1.00 0.05 (0.05) $1.00 5.36% $4,285,801 0.33% 5.24% 0.33% 5.24%
FOR THE YEAR ENDED
MAY 31, 1997 $1.00 0.05 (0.05) $1.00 5.16% $2,591,487 0.33% 5.05% 0.34% 5.04%
FOR THE YEAR ENDED
MAY 31, 1996 $1.00 0.05 (0.05) $1.00 5.45% $ 644,733 0.32% 5.29% 0.39% 5.22%
FOR THE YEAR ENDED
MAY 31, 1995 $1.00 0.05 (0.05) $1.00 5.05% $ 395,585 0.30% 5.12% 0.41% 5.01%
FOR THE PERIOD ENDED
MAY 31, 1994 (1) $1.00 0.03 (0.03) $1.00 2.99%* $ 181,568 0.22% 3.16% 0.55% 2.83%
- ------------------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 INSTITUTIONAL
PRIME MONEY MARKET FUND
FOR THE PERIOD ENDED
MAY 31, 1998 (2) $1.00 0.03 (0.03) $1.00 5.55% $ 302,338 0.27% 5.36% 0.42% 5.21%
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
* RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
(1) BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND COMMENCED
OPERATIONS ON JUNE 14, 1993. ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
(2) BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND COMMENCED OPERATIONS ON
NOVEMBER 5, 1997. ALL RATIOS FOR THE PERIOD, INCLUDING TOTAL RETURN, HAVE
BEEN ANNUALIZED.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
<PAGE>
MAY 31, 1998
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. ORGANIZATION
Boston 1784 Institutional U.S. Treasury Money Market Fund and Boston 1784
Institutional Prime Money Market Fund are portfolios of Boston 1784 Funds (the
"Trust"), an open-end investment company registered under the Investment Company
Act of 1940, as amended. The Trust is offering shares in 17 separate portfolios
(the "Funds") as of May 31, 1998:
MONEY MARKET FUNDS:
BOSTON 1784 TAX-FREE MONEY MARKET FUND
BOSTON 1784 U.S. TREASURY MONEY MARKET FUND
BOSTON 1784 INSTITUTIONAL U.S. TREASURY
MONEY MARKET FUND
BOSTON 1784 PRIME MONEY MARKET FUND
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
BOND FUNDS:
BOSTON 1784 SHORT-TERM INCOME FUND
BOSTON 1784 INCOME FUND
BOSTON 1784 U.S. GOVERNMENT MEDIUM-TERM
INCOME FUND
TAX-EXEMPT INCOME FUNDS:
BOSTON 1784 TAX-EXEMPT MEDIUM-TERM INCOME FUND
BOSTON 1784 CONNECTICUT TAX-EXEMPT INCOME FUND
BOSTON 1784 FLORIDA TAX-EXEMPT INCOME FUND
BOSTON 1784 MASSACHUSETTS TAX-EXEMPT INCOME FUND
BOSTON 1784 RHODE ISLAND TAX-EXEMPT INCOME FUND
STOCK FUNDS:
BOSTON 1784 ASSET ALLOCATION FUND
BOSTON 1784 GROWTH AND INCOME FUND
BOSTON 1784 GROWTH FUND
BOSTON 1784 INTERNATIONAL EQUITY FUND
The Funds' prospectuses provide a description of each Fund's investment
objectives, policies and strategies.
The financial statements of Boston 1784 Institutional U.S. Treasury Money Market
Fund and Boston 1784 Institutional Prime Money Market Fund are included herein.
The financial statements of the other Funds are presented separately. The assets
of each Fund are segregated, and a shareholder's interest is limited to the Fund
in which shares are held. The financial statements have been prepared in
accordance with generally accepted accounting principles which require the use
of managment's estimates. Actual results could differ from these estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by Boston
1784 Institutional U.S. Treasury Money Market Fund and Boston 1784 Institutional
Prime Money Market Fund (the "Institutional Funds").
SECURITY VALUATION --
Investment securities of the Institutional Funds 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.
14
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
================================================================================
SECURITY TRANSACTIONS AND INVESTMENT INCOME --
Security transactions are accounted for on the trade date of the security
purchase or sale. Costs used in determining net realized capital gains and
losses on the sale of securities are those of the specific securities sold,
adjusted for the accretion and amortization of the purchase discounts and
premiums during the respective holding period. Interest income is recorded on
the accrual basis.
REPURCHASE AGREEMENTS --
The Institutional Funds invest in tri-party repurchase agreements. Securities
pledged as collateral for tri-party repurchase agreements are maintained in a
segregated account by the broker's custodian bank until maturity of the
repurchase agreements. Provisions of the repurchase agreements and procedures
adopted by the Adviser are intended to ensure that the market value of the
collateral, including accrued interest thereon, is sufficient in the event of
default by the counterparty. If the counter-party defaults and the value of the
collateral declines or if the counterparty enters into insolvency proceedings,
realization on the collateral by the Institutional Funds may be delayed or
limited.
EXPENSES --
Expenses that are directly related to the Funds are charged directly to the
Funds. Other operating expenses of the Trust are prorated to the Funds on the
basis of relative net assets.
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income are declared on a daily basis and are
payable on the first business day of the following month. Any net realized
capital gains on sales of securities for the Institutional Funds are distributed
to its shareholders at least annually.
FEDERAL INCOME TAXES --
The Trust's policy is to comply with the require-ments of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Accordingly, no provision for federal income
taxes is required in the financial statements. At May 31, 1998, the total cost
of securities for federal income tax purposes was not materially different from
amounts reported for financial reporting purposes.
ORGANIZATIONAL COSTS --
These costs have been deferred in the account of the Institutional Funds and are
being amortized on a straight line basis over a period of sixty months
commencing with operations. If any or all of the shares representing initial
capital of the Institutional Funds are redeemed by any holder thereof prior to
the end of the amortization period, the proceeds will be reduced by the
unamortized organizational cost balance in the same proportion as the number of
shares redeemed bears to the initial shares outstanding immediately preceding
the redemption.
15
<PAGE>
MAY 31, 1998
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
================================================================================
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
Pursuant to an investment advisory agreement dated June 1, 1993, investment
advisory services are provided to the Trust by BankBoston, N.A. (the "Adviser").
The Adviser is entitled to receive an annual fee of 0.20% of the average daily
net assets for each of the Institutional Funds. Such fee is computed daily and
paid monthly. BankBoston, N.A. has voluntarily agreed to waive a portion of its
investment advisory fee in order to maintain competitive expense ratios.
The Institutional Funds and BankBoston, N.A. (the "Custodian") are parties
to a custodial agreement dated June 1, 1993 under which the Custodian holds
cash, securities and other assets of the Institutional Funds as required by the
Investment Company Act of 1940, as amended. The Custodian is entitled to receive
an annual fee, to be paid monthly, of 0.01% for the first $100 million in
average daily net assets, 0.0075% for the next $100 million and 0.005% of the
average daily net assets over $200 million of each of the Institutional Funds.
In its capacity as custodian to the Institutional Funds, the Custodian plays no
role in determining the investment policies of the Institutional Funds or which
securities are to be purchased or sold by the Institutional Funds.
4. ADMINISTRATIVE AND DISTRIBUTION SERVICES
Pursuant to an administration agreement dated December 1, 1996, SEI Investments
Mutual Funds Services (formerly SEI Fund Resources), a wholly-owned subsidiary
of SEI Investments Company, acts as the Trust's Administrator, and is entitled
to receive an annual fee of 0.085% of the Trust's first $5 billion of average
daily net assets and 0.045% of the Trust's average daily net assets over $5
billion. Such fee is computed daily and paid monthly.
SEI Investments Distribution Co. ("SEI Investments"), a wholly-owned
subsidiary of SEI Investments Company, acts as the Institutional Funds'
Distributor pursuant to a distribution agreement dated June 1, 1993, as amended
and restated October 27, 1995. SEI Investments is paid no fees by the
Institutional Funds.
Certain officers of the Trust are also officers of the Administrator. Such
officers are paid no fees by the Trust.
The Trust has paid legal fees to a law firm, of which the Secretary of the
Trust is a member.
5. LINE OF CREDIT
The Institutional Funds have a bank line of credit under which borrowings are
secured by investment securities of the Institutional Funds. Borrowings may not
exceed 10% of the Institutional Funds' total assets. Borrowings under the line
are charged interest at the current overnight Federal Funds rate plus a variable
rate determined at the date of borrowing. There is no commitment fee on the
unused portion of the line of credit. There were no borrowings under the line of
credit during the year ended May 31, 1998.
16
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
================================================================================
6. REORGANIZATION WITH BAYFUNDS
On July 31, 1996, the Board of Trustees of the Trust and on July 31, 1996 and
August 15, 1996, the Board of Trustees of BayFunds approved an Agreement and
Plan of Reorganization (the "Reorganization Agreement") providing for the
transfer of all assets and liabilities of the portfolios of BayFunds in exchange
for the issuance of shares in certain Funds in tax-free reorganizations (except
in the case of the reorganization of BayFunds U.S. Treasury Money Market
Portfolio with Boston 1784 U.S. Treasury Money Market Fund and Boston 1784
Institutional U.S. Treasury Money Market Fund, which did not qualify for
tax-free treatment). At a special meeting of the shareholders held on November
6, 1996, the shareholders of BayFunds voted to approve the Reorganization
Agreement. Pursuant to the Reorganization Agreement, on November 25, 1996
substantially all of the assets and liabilities attributable to the
Institutional Shares of BayFunds U.S. Treasury Money Market Portfolio were
transferred to the Fund in exchange for shares of Boston 1784 Institutional U.S.
Treasury Money Market Fund.
<TABLE>
<CAPTION>
COMBINED
SHARES NET ASSETS
SHARES NET ASSETS BOSTON ISSUED IN AFTER
BAYFUNDS AT 11/25/96 AT 11/25/96 1784 FUND REORGANIZATION REORGANIZATION
===============================================================================================================================
<S> <C> <C> <C> <C>
U.S. TREASURY MONEY
MARKET PORTFOLIO
INSTITUTIONAL SHARES 1,047,875,735 1,047,875,735 INSTITUTIONAL U.S. TREASURY MONEY MARKET 1,047,875,735 2,061,477,418
NAV
PER SHARE
ON DAY OF
BAYFUNDS REORGANIZATION
=========================================
U.S. TREASURY MONEY
MARKET PORTFOLIO
INSTITUTIONAL SHARES 1.00
</TABLE>
17
<PAGE>
MAY 31, 1998
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
TO THE SHAREHOLDERS AND
BOARD OF TRUSTEES OF BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
IN OUR OPINION, THE ACCOMPANYING STATEMENTS OF NET ASSETS AND THE RELATED
STATEMENTS OF OPERATIONS AND OF CHANGES IN NET ASSETS AND THE FINANCIAL
HIGHLIGHTS PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION
OF BOSTON 1784 INSTITUTIONAL MONEY MARKET FUNDS (COMPRISING, RESPECTIVELY,
BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND AND BOSTON 1784
INSTITUTIONAL PRIME MONEY MARKET FUND REFERRED TO COLLECTIVELY HEREIN AS
THE "INSTITUTIONAL FUNDS"), AT MAY 31, 1998, THE RESULTS OF THEIR
OPERATIONS, CHANGES IN THEIR NET ASSETS AND THE FINANCIAL HIGHLIGHTS FOR
EACH OF THE PERIODS PRESENTED, IN CONFORMITY WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES. THESE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
(HEREAFTER REFERRED TO AS "FINANCIAL STATEMENTS") ARE THE RESPONSIBILITY OF
THE INSTITUTIONAL FUNDS' MANAGEMENT; OUR RESPONSIBILITY IS TO EXPRESS AN
OPINION ON THESE FINANCIAL STATEMENTS BASED ON OUR AUDITS. WE CONDUCTED OUR
AUDITS OF THESE FINANCIAL STATEMENTS IN ACCORDANCE WITH GENERALLY ACCEPTED
AUDITING STANDARDS WHICH REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO
OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE
OF MATERIAL MISSTATEMENT. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS,
EVIDENCE SUPPORTING THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL
STATEMENTS, ASSESSING THE ACCOUNTING PRINCIPLES USED AND SIGNIFICANT
ESTIMATES MADE BY MANAGEMENT, AND EVALUATING THE OVERALL FINANCIAL
STATEMENT PRESENTATION. WE BELIEVE THAT OUR AUDITS, WHICH INCLUDED
CONFIRMATION OF SECURITIES AT MAY 31, 1998 BY CORRESPONDENCE WITH THE
CUSTODIAN AND BROKERS, PROVIDE A REASONABLE BASIS FOR THE OPINION EXPRESSED
ABOVE.
PRICEWATERHOUSECOOPERS LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
July 10, 1998
18
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
NOTICE TO SHAREHOLDERS (UNAUDITED)
================================================================================
FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS, THIS NOTICE IS FOR INFORMATIONAL
PURPOSES ONLY.
Dear Boston 1784 Funds Shareholders:
For the fiscal year ended May 31, 1998, Boston 1784 Institutional Money
Market Funds are designating long-term capital gains, qualifying dividends and
exempt income with regard to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A)* (B)* (C)*
LONG-TERM MID-TERM ORDINARY (E)**
CAPITAL GAINS CAPITAL GAINS INCOME TOTAL (D)** TAX- (F)**
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING EXEMPT FOREIGN
(TAX BASIS) (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS (1) INTEREST TAX CREDIT
=================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL
U.S. TREASURY
MONEY MARKET 0% 0% 100% 100% 0% 0% 0%
INSTITUTIONAL PRIME
MONEY MARKET 0% 0% 100% 100% 0% 0% 0%
<FN>
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
RECEIVED DEDUCTION.
* ITEMS (A) (B) AND (C) ARE BASED ON A PERCENTAGE OF THE FUND'S TOTAL
DISTRIBUTIONS.
** ITEMS (D), (E) AND (F) ARE BASED ON A PERCENTAGE OF ORDINARY INCOME
DISTRIBUTIONS OF THE FUND.
</FN>
</TABLE>
19
<PAGE>
NOTES
================================================================================
20
<PAGE>
BOARD OF TRUSTEES
David H. Carter
Tarrant Cutler
Kenneth A. Froot
Sara L. Johnson
Kathryn Flacke Muncil
Robert A. Nesher
Alvin J. Silk
INVESTMENT ADVISER
BankBoston, N.A.
Boston, MA 02110
================================================================================
ADMINISTRATOR
SEI Investments Mutual Funds Services
Oaks, PA 19456
DISTRIBUTOR
SEI Investments Distribution Co.
Oaks, PA 19456
LEGAL COUNSEL
Bingham Dana LLP
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, PA 19103
CUSTODIAN
BankBoston, N.A.
Boston, MA 02110
[BOSTON 1784 FUNDS LOGO OMITTED]
BOSTON 1784 FUNDS
P.O. BOX 8524
BOSTON, MA 02266-8524
1-800-BKB-1784
This report and the financial statements contained herein are for the general
information of the shareholders of Boston 1784 Institutional U.S. Treasury Money
Market Fund and Boston 1784 Institutional Prime Money Market Fund. This report
is not authorized for distribution to prospective investors in a fund unless
preceded or accompanied by a currently effective prospectus.
MF-0150
