Boston 1784 Institutional Money Market Funds
[BOSTON 1784 FUNDS LOGO OMITTED]
Semi-Annual Report to Shareholders
November 30, 1998
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TABLE OF CONTENTS
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LETTER TO SHAREHOLDERS 1
INVESTMENT ADVISER'S REPORT 2
FINANCIAL STATEMENTS 4
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BOSTON 1784 FUNDS:
[bullet] ARE NOT INSURED BY THE FDIC OR 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 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. INVESTMENT COUNSELORS ARE REGISTERED REPRESENTATIVES
OF BANKBOSTON INVESTOR SERVICES, INC. (MEMBER NASD/SIPC), A WHOLLY-OWNED
SUBSIDIARY OF BANKBOSTON, N.A.
AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH MONEY MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT
AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MONEY
MARKET FUND.
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BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
LETTER TO SHAREHOLDERS
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[Photo omitted]
[Catherine N. Thornton, Director]
[Photo omitted]
[Robert Nesher, President]
We are pleased to provide you with this semi-annual report for Boston 1784
Institutional Money Market Funds.
BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND continued to perform
well during the six month period ended November 30, 1998. For the twelve months
ended November 30, 1998, the Fund's total return of 5.26% ranked it in the top
quartile (26 out of 119 funds) in the Lipper Institutional U.S. Treasury Money
Market Funds Average. As of November 30, 1998, the Fund's assets totaled $4.3
billion.
During the period, the Fund consistently earned a `AAAm' rating from Standard &
Poor's. This rating is based on an analysis of the Fund's credit quality,
market price exposure and management. The rating signifies excellent safety of
invested principal and a superior capacity to maintain a $1 per share net asset
value at all times, limiting your exposure to loss. This is accomplished
through conservative investment practices and strict internal controls.
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND completed its first full year
of operations on November 5, 1998. Total return for the twelve months ended
November 30, 1998 was 5.44%. Total assets as of November 30, 1998 were $491
million.
Please remember that a Fund's performance in the past is not necessarily an
indication of how the Fund will do in the future.
As you will read in the Investment Adviser's Report, money market investors may
see yields decline in the coming months as the Federal Reserve Board reacts to a
slowing U.S. economy. While the Funds will strive to maximize the productivity
of your investment, it will not compromise credit standards or stability to do
so.
Thank you for selecting Boston 1784 Funds to manage your cash reserves. Please
contact your Investment Counselor or call 1-800-BKB-1784, Monday through Friday
from 8:00 a.m. to 6:00 p.m. (Eastern time), with any questions you may have
about your account.
Sincerely,
/S/ROBERT NESHER /S/CATHERINE N. THORNTON
ROBERT NESHER CATHERINE N. THORNTON
PRESIDENT DIRECTOR, INVESTMENT SERVICES
BOSTON 1784 FUNDS BANKBOSTON, N.A.
1
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INVESTMENT ADVISER'S REPORT
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[PHOTO OMITTED]
EDWARD G. RILEY, JR.
CHIEF INVESTMENT OFFICER
Several words come to mind when describing the past six months. "Volatile"
certainly describes the stock market. The downs and ups in the stock market
since August have been startling in their suddenness and scope, leaving many
investors to wonder just how to plan in the face of such unpredictability. In
contrast, however, money market investors have seen interest rates (and
portfolio yields) drift downward.
The swings in the stock market took place against a mixed economic backdrop.
On the consumer side, we've seen confidence bounce back from a dip in September.
Few signs are more telling, and perhaps more alarming, than the incredible
growth of consumer credit in October. The reasons for this psychological upswing
are clear. According to the most recent government statistics, wages and
salaries are on the rise, up some 4% over last year. At the same time,
unemployment remains low, and consumers seem unperturbed by the rounds of
layoffs announced by some large companies.
In contrast, the manufacturing sector of the economy is slipping into the
doldrums. Imports from cash-starved, currency-weakened Asian countries continue
to depress sales. Worldwide overcapacity in a number of industries has led to a
slowdown in capital spending. With wages and salaries rising and sales
weakening, many manufacturers are feeling a real squeeze on profits, as
indicated by the number of companies missing their earnings estimates and
pre-announcing earnings shortfalls.
The international situation remains uncertain. At long last, Japan appears to
be taking serious steps to address its economic woes. Even so, consumer and
investor confidence in that country remains depressed, which was only
exacerbated by recent government seizures of insolvent financial institutions.
In Hong Kong, the recession continues. Latin American economies and markets,
particularly Brazil, still suffer from Asian-induced instability. Europe shows
signs of a slowdown, with declining retail sales in the United Kingdom and
declining business confidence in Italy, Belgium and the Netherlands.
[GRAPH OMITTED]
[FEDERAL FUNDS RATE
NOVEMBER 1995-NOVEMBER 1998]
Plot points are as follows:
5.80
5.24
5.31
5.50
5.50
4.75
2
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BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
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MONEY MARKET REVIEW
One possible result of global overcapacity and economic weakness is
deflation--a worry about which investors and, to some extent, the Federal
Reserve Board are unaccustomed. To counter this trend and the growing trend
toward tighter business credit on the part of commercial banks, the Federal
Reserve Board reduced its target interest rate on Federal Funds by 0.75% since
June 1, 1998 to 4.75% on November 30, 1998. The Federal Reserve Board's
uncertainty was reflected in the tentativeness of rate reductions, with a 0.25%
drop in September, followed by a second 0.25% reduction a month later.
By reducing U.S. interest rates, the Federal Reserve Board signaled its
concern regarding deflation to other central banks, which promptly followed with
reductions of their own. The result has been a total of 51 interest rate cuts by
various central banks since October 1. These interest rate cuts are unleashing
tremendous liquidity in their respective economies and in the financial markets.
Given economic uncertainty and the threat of deflation, further interest rate
reductions are likely in 1999, although they may not be immediate. In reducing
rates, however, the Federal Reserve Board must perform a balancing act. It must
provide enough liquidity to boost economic activity, but not so much that funds
flow into financial assets instead, resulting in even greater asset inflation.
Moreover, the Federal Reserve Board must reduce rates sufficiently to allow
other central banks room for reductions without disrupting foreign exchange
rates. That said, we expect a reduction of 0.75% to 1% during the next 12
months.
/S/Edward G. Riley, Jr.
Edward G.Riley, Jr.
Chief Investment Officer
BankBoston, N.A.
3
<PAGE>
AS OF NOVEMBER 30, 1998
STATEMENT OF NET ASSETS (UNAUDITED)
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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. GOVERNMENT AGENCY OBLIGATIONS -- 33.6%
Fannie Mae
5.360%, 02/19/99 $15,000 $ 15,005
5.650%, 05/26/99 10,000 10,037
Fannie Mae MTN
6.450%, 07/01/99 15,000 15,115
Federal Home Loan Bank
5.835%, 12/17/98 21,150 21,149
5.010%, 10/06/99 14,360 14,360
5.070%, 10/08/99 7,110 7,110
5.060%, 10/14/99 24,150 24,150
5.000%, 10/27/99 64,500 64,500
5.030%, 10/29/99 25,000 25,000
5.090%, 11/05/99 11,925 11,923
5.250%, 11/24/99 27,000 27,000
Federal Home Loan Bank (A)
4.827%, 01/20/99 60,000 59,603
5.033%, 02/26/99 45,000 44,460
Federal Home Loan Bank (B)
4.910%, 02/26/99 24,700 24,676
4.995%, 03/26/99 27,000 26,996
5.103%, 09/08/99 45,000 44,983
Federal Home Loan Mortgage
5.020%, 11/05/99 20,000 20,000
5.200%, 11/24/99 10,680 10,680
Federal Home Loan Mortgage (A)
5.151%, 12/01/98 95,000 95,000
5.504%, 12/04/98 8,800 8,796
5.274%, 12/17/98 22,190 22,139
4.803%, 01/11/99 45,000 44,757
5.090%, 01/14/99 30,000 29,816
5.109%, 02/10/99 45,000 44,553
4.997%, 02/17/99 12,500 12,367
5.033%, 02/25/99 10,000 9,881
5.153%, 02/25/99 50,000 49,393
5.159%, 02/26/99 60,000 59,263
4.966%, 03/12/99 35,000 34,520
4.935%, 03/26/99 21,506 21,173
5.095%, 03/26/99 25,000 24,601
Federal National Mortgage
Association
5.560%, 12/15/98 30,000 30,000
5.380%, 02/12/99 25,000 25,008
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DESCRIPTION PAR (000) VALUE (000)
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Federal National Mortgage
Association (A)
5.350%, 12/14/98 $ 2,000 $ 2,000
5.352%, 12/23/98 25,000 24,919
5.498%, 12/30/98 33,395 33,253
5.117%, 01/07/99 72,000 71,626
5.116%, 01/08/99 66,000 65,648
5.127%, 01/08/99 25,000 24,866
Federal National Mortgage
Association (B)
4.740%, 05/25/99 6,500 6,497
Federal National Mortgage
Association, MTN
5.650%, 04/09/99 30,000 30,004
5.650%, 05/07/99 14,700 14,707
Federal National Mortgage
Association, MTN (B)
4.950%, 03/03/99 25,000 24,999
Private Export Funding Agency,
Series 144A (B)
4.840%, 02/28/99 19,024 18,989
Student Loan Marketing
Association
5.510%, 09/16/99 47,000 47,000
Student Loan Marketing
Association (B)
4.770%, 02/08/99 20,675 20,674
4.760%, 02/22/99 58,900 58,893
5.160%, 03/18/99 15,000 15,000
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TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $1,437,089) 1,437,089
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U.S. TREASURY OBLIGATIONS -- 16.1%
U.S. Treasury Bills (A)
4.519%, 01/21/99 45,000 44,714
4.535%, 01/21/99 50,000 49,682
4.551%, 01/21/99 67,000 66,571
5.055%, 03/04/99 45,000 44,412
4.499%, 04/22/99 25,000 24,564
4.390%, 07/22/99 45,000 43,721
4
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
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DESCRIPTION PAR (000) VALUE (000)
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U.S. Treasury Notes
5.875%, 01/31/99 $ 90,000 $ 90,066
6.250%, 03/31/99 111,500 111,791
6.375%, 04/30/99 45,000 45,169
6.500%, 04/30/99 45,000 45,322
6.000%, 06/30/99 45,000 45,391
5.875%, 07/31/99 45,000 45,262
6.875%, 08/31/99 30,000 30,466
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TOTAL U.S. TREASURY OBLIGATIONS
(Cost $687,131) 687,131
---------
REPURCHASE AGREEMENTS -- 50.1%
Dean Witter
5.13%, dated 11/30/98, matures
12/01/98, repurchase price
$33,516,201 (collateralized
by U.S. Treasury Instruments:
total market value
$34,181,730) (C) 33,511 33,511
First Boston
5.10%, dated 11/30/98, matures
12/01/98, repurchase price
$12,001,700 (collateralized by
U.S. Treasury Notes: total market
value $12,241,981) (C) 138,000 138,000
Goldman Sachs
5.20%, dated 11/30/98, matures
12/01/98, repurchase price
$573,197,831 (collateralized
by U.S. Treasury Instruments:
total market value
$584,577,492) (C) 573,115 573,115
Greenwich Capital
5.25%, dated 11/30/98, matures
12/01/98, repurchase price
$260,394,961 (collateralized
by U.S. Treasury Instruments:
total market value
$265,564,265) (C) 260,357 260,357
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DESCRIPTION PAR (000) VALUE (000)
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J.P. Morgan
5.20%, dated 11/30/98, matures
12/01/98, repurchase price
$450,065,000 (collateralized
by U.S. Treasury Instruments:
total market value
$459,000,149) (C) $450,000 $ 450,000
Prudential Securities
5.25%, dated 11/30/98, matures
12/01/98, repurchase price
$685,099,896 (collateralized
by U.S. Treasury Instruments:
total market value
$698,700,787) (C) 685,000 685,000
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TOTAL REPURCHASE AGREEMENTS
(Cost $2,139,983) 2,139,983
----------
TOTAL INVESTMENTS -- 99.8%
(Cost $4,264,203) 4,264,203
----------
OTHER ASSETS AND LIABILITIES,
NET-- 0.2% 8,008
---------
NET ASSETS:
Capital Shares (unlimited
authorization -- no par
value) based on 4,271,980,407
outstanding shares
of beneficial interest 4,271,980
Undistributed net investment income 115
Accumulated net realized gain
on investments 116
----------
TOTAL NET ASSETS -- 100.0% $4,272,211
==========
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 November 30, 1998.
(B) Variable Rate Security. The rate reported on the Statement of Net Assets is
the rate in effect on November 30, 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.
5
<PAGE>
AS OF NOVEMBER 30, 1998
STATEMENT OF NET ASSETS (UNAUDITED)
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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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COMMERCIAL PAPER -- 68.6%
BANKS -- 4.3%
Bank of America (A)
5.131%, 01/28/99 $11,000 $10,910
Bank of New York (A)
5.350%, 01/12/99 10,000 9,938
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20,848
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ENTERTAINMENT -- 2.0%
Walt Disney (A)
5.032%, 03/02/99 10,000 9,873
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FINANCIAL SERVICES -- 47.5%
Allomon Funding (A)
5.348%, 12/08/98 3,546 3,542
Alpine Securitization (A)
5.265%, 01/15/99 2,789 2,771
5.328%, 01/15/99 5,000 4,967
5.358%, 01/21/99 5,728 5,685
Barton Capital (A)
5.374%, 01/15/99 5,000 4,967
5.406%, 02/05/99 5,000 4,951
5.074%, 04/09/99 2,174 2,135
Caterpillar (A)
5.134%, 01/06/99 9,300 9,253
Certain Funding (A)
5.017%, 12/14/98 4,110 4,103
5.320%, 02/16/99 10,200 10,085
Concord Minuteman Capital (A)
5.335%, 01/13/99 5,000 4,969
5.446%, 03/16/99 10,000 9,844
Corporate Receivables (A)
5.533%, 01/08/99 5,000 4,971
5.424%, 02/05/99 5,000 4,951
Falcon Asset Securitization (A)
5.022%, 12/21/98 10,000 9,972
Fountain Square Funding (A)
5.019%, 12/16/98 5,691 5,679
5.020%, 12/17/98 5,000 4,989
General Electric Capital (A)
5.193%, 12/04/98 10,000 9,996
4.941%, 12/09/98 5,000 4,995
General Motors Acceptance (A)
5.132%, 01/29/99 10,000 9,917
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DESCRIPTION PAR (000) VALUE (000)
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Greenwich Funding
Corporation (A)
5.235%, 02/12/99 $ 2,193 $ 2,170
5.334%, 02/25/99 5,000 4,937
IBM Credit (A)
4.759%, 12/04/98 3,000 2,999
5.344%, 01/07/99 8,000 7,956
Lexington Parker (A)
5.495%, 01/13/99 10,000 9,935
5.481%, 01/19/99 5,000 4,963
Market Street Funding (A)
5.302%, 12/11/98 3,000 2,996
5.579%, 01/14/99 5,000 4,966
Monte Rosa Capital (A)
5.369%, 01/04/99 6,893 6,859
5.381%, 01/12/99 5,000 4,969
5.481%, 02/12/99 3,000 2,967
Norwest (A)
5.120%, 01/22/99 10,000 9,927
Prudential Funding (A)
5.085%, 12/10/98 10,000 9,987
Sigma Financial (A)
5.264%, 12/11/98 10,000 9,986
5.103%, 04/15/99 5,000 4,907
Triple A One Funding (A)
5.270%, 12/09/98 7,080 7,072
Wood Street Funding (A)
5.420%, 01/29/99 5,000 4,956
5.520%, 01/29/99 8,000 7,929
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233,223
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FOOD, BEVERAGE & TOBACCO -- 3.7%
Pepsico (A)
5.161%, 12/02/98 10,000 9,999
4.758%, 12/03/98 8,000 7,998
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17,997
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HOUSING -- 2.0%
Virginia State Housing
Development Authority
5.050%, 05/19/99 10,000 10,000
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INSURANCE -- 4.0%
AIG Funding (A)
4.779%, 12/04/98 4,800 4,798
6
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
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DESCRIPTION PAR (000) VALUE (000)
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INSURANCE (CONTINUED)
USAA Capital Corporation (A)
4.939%, 12/16/98 $ 5,000 $ 4,990
5.251%, 01/11/99 10,000 9,941
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19,729
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TAXABLE MUNICIPALS -- 4.4%
DeKalb County, Georgia,
Emory University
5.600%, 12/09/98 2,505 2,505
5.250%, 02/11/99 3,000 3,000
Minnesota State City
of Saint Paul
5.720%, 12/17/98 2,500 2,500
New York City, New York, FGIC
5.600%, 12/09/98 2,600 2,600
5.250%, 01/14/99 2,500 2,500
5.260%, 02/03/99 3,035 3,035
5.260%, 02/08/99 2,100 2,100
5.250%, 02/11/99 3,335 3,335
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21,575
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UTILITIES -- 0.7%
Lower Colorado
River Authority (A)
5.580%, 12/09/98 3,500 3,500
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TOTAL COMMERCIAL PAPER
(Cost $336,745) 336,745
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CORPORATE BONDS -- 12.1%
Advocare (B)
5.040%, 12/02/98 4,000 4,000
Associates Corporation
7.500%, 05/15/99 4,000 4,030
Associates Corporation, MTN
5.560%, 12/17/98 1,000 1,000
Bank One Wisconsin
5.740%, 05/11/99 1,000 1,000
Bear Stearns
7.625%, 09/15/99 1,075 1,092
Bowie Assisted Living,
Series 1997, LOC (B) (C)
5.450%, 12/02/98 6,200 6,200
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DESCRIPTION PAR (000) VALUE (000)
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Chase Manhattan Bank
5.875%, 08/04/99 $ 3,440 $ 3,449
7.750%, 11/01/99 5,300 5,438
Chrysler
5.625%, 01/15/99 1,450 1,450
Chrysler Financial, MTN
5.740%, 01/11/99 4,000 4,001
6.160%, 07/28/99 1,385 1,395
Deutsche Bank Financial, MTN
9.280%, 05/31/99 4,000 4,078
Ford Motor Credit
7.250%, 05/15/99 1,583 1,592
7.250%, 05/15/99 1,000 1,008
Ford Motor Credit, MTN
7.900%, 05/17/99 5,000 5,047
General Electric
Capital Corporation
8.100%, 01/26/99 1,500 1,506
General Motors Acceptance
7.750%, 01/15/99 495 496
IBM Credit
5.680%, 05/07/99 1,000 999
Manufacturers Hanover
8.500%, 02/15/99 1,170 1,177
Merrill Lynch
5.500%, 02/16/99 3,400 3,396
Norwest Financial
6.250%, 04/15/99 2,000 2,004
7.625%, 10/15/99 1,000 1,022
Service Graphics (B)
5.350%, 12/02/98 1,100 1,100
Uno, LOC (B)
5.350%, 12/02/98 3,100 3,100
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TOTAL CORPORATE BONDS
(Cost $59,580) 59,580
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TAXABLE MUNICIPAL BONDS -- 4.6%
Barton Healthcare (B)
5.350%, 12/02/98 700 700
Catholic Health Initiatives (B)
5.400%, 12/02/98 5,000 5,000
7
<PAGE>
AS OF NOVEMBER 30, 1998
STATEMENT OF NET ASSETS (UNAUDITED)
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BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND (CONCLUDED)
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DESCRIPTION PAR (000) VALUE (000)
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TAXABLE MUNICIPAL BONDS (CONTINUED)
Health Midwest Venture (B)
5.350%, 12/02/98 $ 2,000 $ 2,000
Illinois State Student
Assistance RB, LOC (B)
5.270%, 12/02/98 5,000 5,000
Los Angeles, California,
Community Redevelopment
Agency RB, FSA (B)
5.350%, 12/02/98 2,500 2,500
Maryland State Health &
Higher Education
Facilities RB, Series B, LOC (B)
5.350%, 12/02/98 3,000 3,000
New Hampshire State (B)
5.100%, 12/02/98 2,000 2,000
Olathe, Kansas,
Industrial RB, LOC (B)
5.400%, 12/03/98 2,200 2,200
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TOTAL TAXABLE MUNICIPAL BONDS
(Cost $22,400) 22,400
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U.S. GOVERNMENT AGENCY OBLIGATIONS -- 12.2%
Federal Farm Credit Bank
5.480%, 12/01/98 5,000 5,000
Federal Home Loan Bank
5.000%, 10/27/99 15,000 15,000
5.250%, 11/12/99 10,000 10,000
Federal Home Loan Bank (B)
4.910%, 12/01/98 15,000 14,985
Federal Home Loan
Mortgage Corporation
5.200%, 11/24/99 5,000 5,000
Federal National Mortgage
Association MTN
5.490%, 08/03/99 10,000 10,037
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TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $60,022) 60,022
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CERTIFICATES OF DEPOSIT -- 2.3%
Bayerische Landesbank Yankee
5.720%, 05/06/99 5,000 4,999
Societe Generale
5.765%, 04/19/99 6,000 6,000
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TOTAL CERTIFICATES OF DEPOSIT
(Cost $10,999) 10,999
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DESCRIPTION PAR (000) VALUE (000)
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REPURCHASE AGREEMENT -- 0.3%
Goldman Sachs
5.20%, dated 11/30/98, matures
12/01/98, repurchase price
$1,521,545 (collateralized
by U.S. Treasury Instruments:
total market value
$1,551,752) (D) $1,521 $ 1,521
--------
TOTAL REPURCHASE AGREEMENT
(Cost $1,521) 1,521
--------
TOTAL INVESTMENTS -- 100.1%
(Cost $491,267) 491,267
--------
OTHER ASSETS AND LIABILITIES,
Net-- (0.1%) (346)
--------
NET ASSETS:
Capital Shares (unlimited authorization --
no par value) based on 490,926,164
outstanding shares of beneficial interest 490,926
Accumulated net realized loss
on investments (5)
--------
TOTAL NET ASSETS-- 100.0% $490,921
========
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 November 30, 1998.
(B) Variable Rate Security. The rate reported on the Statement of Net Assets is
the rate in effect on November 30, 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
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
TECP--Tax Exempt Commercial Paper 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.
8
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS (000) (UNAUDITED)
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FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<CAPTION>
BOSTON BOSTON
1784 INSTITUTIONAL 1784 INSTITUTIONAL
U.S. TREASURY PRIME MONEY
MONEY MARKET FUND MARKET FUND
=================== ================
<S> <C> <C>
INTEREST INCOME: $109,849 $10,968
--------- --------
EXPENSES:
INVESTMENT ADVISORY FEES 4,099 398
LESS: WAIVER OF INVESTMENT ADVISORY FEES -- (100)
ADMINISTRATOR FEES 1,379 134
REGISTRATION FEES 222 48
TRANSFER AGENT FEES & EXPENSES 194 27
PROFESSIONAL FEES 209 18
PRINTING 119 11
CUSTODIAN FEES 116 23
AMORTIZATION OF DEFERRED ORGANIZATIONAL COSTS -- 28
TRUSTEE FEES 47 4
OTHER EXPENSES 75 6
-------- --------
TOTAL EXPENSES, NET OF WAIVERS 6,460 597
-------- --------
NET INVESTMENT INCOME 103,389 10,371
-------- --------
NET REALIZED GAIN (LOSS) ON INVESTMENTS 40 (5)
-------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $103,429 $10,366
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
9
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (000)
- -------------------------------------------------------------------------------
FOR THE PERIOD ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE PERIOD ENDED MAY 31,
1998
<TABLE>
<CAPTION>
BOSTON BOSTON
1784 INSTITUTIONAL 1784 INSTITUTIONAL
U.S. TREASURY PRIME MONEY
MONEY MARKET FUND MARKET FUND
========================= =========================
6/1/98 6/1/97 6/1/98 11/5/97
to to to to
11/30/98 5/31/98 11/30/98 5/31/98 (1)
------------ ----------- ---------- ------------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME $ 103,389 $ 169,367 $ 10,371 $ 6,095
NET REALIZED GAIN (LOSS) ON INVESTMENTS 40 95 (5) --
------------ ----------- ---------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 103,429 169,462 10,366 6,095
------------ ----------- ---------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
NET INVESTMENT INCOME (103,389) (169,365) (10,371) (6,095)
REALIZED CAPITAL GAINS -- -- -- --
------------ ----------- ---------- ------------
TOTAL DISTRIBUTIONS (103,389) (169,365) (10,371) (6,095)
------------ ----------- ---------- ------------
SHARE TRANSACTIONS:
PROCEEDS FROM SHARES ISSUED 6,997,263 14,628,533 1,650,045 1,438,198
REINVESTMENT OF CASH DISTRIBUTIONS 31,997 67,225 6,777 5,560
COST OF SHARES REDEEMED (7,042,890) (13,001,541) (1,468,234) (1,141,420)
------------ ----------- ---------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS (13,630) 1,694,217 188,588 302,338
------------ ----------- ---------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (13,590) 1,694,314 188,583 302,338
============ =========== ========== ============
NET ASSETS:
BEGINNING OF PERIOD 4,285,801 2,591,487 302,338 --
------------ ----------- ---------- ------------
NET ASSETS:
END OF PERIOD $4,272,211 $4,285,801 $ 490,921 $ 302,338
============ =========== ========== ============
CAPITAL SHARE TRANSACTIONS:
SHARES ISSUED 6,997,263 14,628,533 1,650,045 1,438,198
SHARES ISSUED IN LIEU OF CASH DISTRIBUTIONS 31,997 67,225 6,777 5,560
SHARES REDEEMED (7,042,890) (13,001,541) (1,468,234) (1,141,420)
------------ ----------- ---------- ------------
NET INCREASE (DECREASE) IN CAPITAL SHARE TRANSACTIONS (13,630) 1,694,217 188,588 302,338
============ =========== ========== ============
<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.
10
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
BOSTON 1784 INSTITUTIONAL MONEY MARKET FUNDS
FOR THE PERIOD ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE PERIODS ENDED MAY 31
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO
DISTRIBU- RATIO OF OF NET RATIO OF RATIO OF
NET TIONS NET NET EXPENSES INCOME EXPENSES NET INCOME
ASSET NET FROM NET ASSET ASSETS TO TO TO AVERAGE TO AVERAGE
VALUE INVEST- INVEST- VALUE END AVERAGE AVERAGE NET ASSETS NET ASSETS
BEGINNING MENT MENT END OF TOTAL OF PERIOD NET NET (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME PERIOD RETURN (000) ASSETS ASSETS WAIVERS) WAIVERS)
- ---------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 INSTITUTIONAL
U.S. TREASURY MONEY MARKET FUND
FOR THE PERIOD ENDED
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NOVEMBER 30, 1998 $1.00 0.03 (0.03) $1.00 5.26% $4,272,211 0.32% 5.04% 0.32% 5.04%
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
NOVEMBER 30, 1998 $1.00 0.03 (0.03) $1.00 5.44% $490,921 0.30% 5.21% 0.35% 5.16%
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>
[DAGGER] ALL RATIOS FOR THE SEMI-ANNUAL PERIOD ENDED NOVEMBER 30, 1998 INCLUDING TOTAL RETURN HAVE BEEN ANNUALIZED.
* 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.
11
<PAGE>
NOVEMBER 30, 1998
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
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 November 30, 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 management'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.
12
<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 November 30, 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.
13
<PAGE>
NOVEMBER 30, 1998
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (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. were parties to a custodial
agreement dated June 1, 1993 under which BankBoston, N.A. held cash, securities
and other assets of the Institutional Funds as required by the Investment
Company Act of 1940, as amended. For the period June 1, 1998 to September 30,
1998, BankBoston, N.A. served as the Funds' custodian and received 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. On September
30, 1998, the Custodial Agreement was amended and assigned to Investors Bank &
Trust ("IBT"). Effective October 1, 1998, IBT is entitled to receive an annual
fee, to be paid monthly, of 0.005% of the market value of each Institutional
Fund's assets. In the capacity as custodian to the Institutional Funds,
BankBoston, N.A. played and IBT 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.
14
<PAGE>
BOSTON 1784 INSTITUTIONAL
MONEY MARKET FUNDS
- -------------------------------------------------------------------------------
5. LINE OF CREDIT
The Institutional Funds have a bank line of credit. 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 a commitment fee of
0.10% per annum on the unused portion of the line of credit. There were no
borrowings under the line of credit during the period ended November 30, 1998.
15
<PAGE>
NOTES
- -------------------------------------------------------------------------------
16
<PAGE>
NOTES
- -------------------------------------------------------------------------------
17
<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
Investors Bank and Trust Company
Boston, MA 02116
[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-0151
