IOWA SCHOOLS JOINT
INVESTMENT TRUST
Interim Financial Report
December 31, 1995
<PAGE>
TRUSTEES' REPORT
- - ----------------
To Iowa Schools Joint Investment Trust Participants:
The Iowa Schools Joint Investment Trust (ISJIT) is pleased to present this
semi-annual report of Trust operations for the period ended December 31, 1995.
During 1995, market rates for short-term securities remained remarkably
constant. Through responsible, conservative money management practices, ISJIT
continued to provide an effective investment alternative to participants for
both the Diversified and Direct Government Obligation Portfolios. The
complementary operation of the Fixed Term Automated (FTA) Investment Program
also provided program participants with the opportunity to realize higher rates
of return by investing, when appropriate, in longer-term securities consistent
with their anticipated disbursement requirements.
Included in this report is a summary of liquid rates for the calendar year 1995.
Rates earned by ISJIT participants were reflective of the general trend in
interest rates throughout the year.
As always, ISJIT's investment policies and practices focused upon the
preservation of capital and maintenance of liquidity throughout 1995. These
policies and practices are designed to provide participants with a safe,
effective investment alternative for all invested funds.
Participation in ISJIT's investment programs continues to grow and serve
additional participants. As of December 31, 1995, a total of 303 school
corporations and eligible 28E organizations were program participants. During
the period, total assets invested within the liquid funds ranged from a low of
$114,310,757 to a high of $211,414,702. When fixed term securities are included,
the respective figures range from a low of $187,396,632 to a high of
$288,891,705.
The Board of Trustees is very pleased with the success of the ISJIT cash
management program. The level of participation in ISJIT underscores the
desirability of the program.
The Board of Trustees welcomes your comments and suggestions regarding any
method of improving ISJIT performance or desirable expanded services. Thanks to
your participation and support ISJIT CONTINUES TO GROW . . . TO MEET YOUR NEEDS.
Respectfully,
Carolyn Jons, Chair
Board of Trustees
<PAGE>
MANAGEMENT DISCUSSION
- - ---------------------
During the first six-months of the fiscal year, the pace of economic growth
slowed, inflation was mild, and the Federal Reserve lowered short-term interest
rates slightly. The Federal Reserve lowered the federal funds rate 0.25 percent
in July and by another 0.25 percent in December.
The economy continues to show signs of weakening. The Index of Leading
Indicators, a forward looking gauge of the economy, has declined in seven of the
last ten months. New jobs are growing at only one-third the rate of 1994.
Retailers had their worst Christmas season since 1990. Demand for both consumer
and business loans has slowed.
The inflation outlook remains quite good. Industrial prices actually fell during
the last year. Consumer prices rose at an annual rate of 2.6 percent in 1995,
the same as 1994. Wage inflation is being reigned in as corporations continue to
layoff workers. The GDP deflator index, the broadest measure of U.S. inflation,
has risen only 1.4 percent over the last year.
We expect the Federal Reserve to continue to gradually lower short-term interest
rates in 1996, due to the combination of a slowing economy and mild inflation.
The rate declines will most likely be in 0.25 to 0.50 percent increments over
the course of the year. Since we expect short-term interest rates to decline,
the average maturity of the portfolio has been extended to 70- to 80-days.
The ISJIT program emphasizes three key elements: safety, liquidity, and
competitive rates in that order. The safety and security of participant moneys
is our first priority. The second priority is to assure daily liquidity. Only
after the first two elements are satisfied, do we examine the rates of different
investments.
ISJIT continues to provide a competitive rate. Over the last six-months, the
yield of the diversified portfolio was 0.22 percent greater than the Donoghue
Index of national money market funds.
We appreciate your support of ISJIT over the first six-months of the fiscal year
and look forward to serving you in 1996.
Sincerely,
Kathryn D. Beyer, CFA
Managing Director
Investors Management Group
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
<TABLE>
<CAPTION>
Yield at
Time of Amortized
Par Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------ -------- -------- ------------
<S> <C> <C> <C> <C>
DISCOUNTED GOVERNMENT SECURITIES -- 16.06%
$ 850,000 Fed. Home Ln. Bank-Disc. Note 6.13% 01/05/96 $ 849,476
1,000,000 Fed. Home Ln. Bank-Disc. Note 6.13% 01/12/96 998,304
980,000 Fed. Home Ln. Bank-Disc. Note 6.13% 01/19/96 977,280
2,740,000 Federal Home Ln. Mtge. Corp.-Disc. Note 5.64% 01/19/96 2,732,506
2,500,000 Fed. Home Ln. Bank-Disc. Note 6.32% 01/29/96 2,488,294
1,630,000 Federal Farm Credit Bank-Disc. Note 5.73% 01/31/96 1,622,421
1,000,000 Federal Home Ln. Mtge. Corp.-Disc. Note 5.69% 02/07/96 994,296
1,385,000 Federal Home Ln. Mtge. Corp.-Disc. Note 5.69% 02/08/96 1,376,886
2,000,000 Fed. Natl. Mtge. Assoc.-Disc. Note 5.72% 02/12/96 1,987,015
1,935,000 Fed. Home Ln. Bank-Disc. Note 5.59% 02/20/96 1,920,299
1,000,000 Fed. Natl. Mtge. Assoc.-Disc. Note 5.82% 02/21/96 992,095
2,000,000 Federal Farm Credit Bank-Disc. Note 5.61% 03/18/96 1,976,943
1,400,000 Fed. Natl. Mtge. Assoc.-Disc. Note 5.62% 03/25/96 1,382,197
635,000 Fed. Home Ln. Bank-Disc. Note 5.72% 04/16/96 624,754
4,375,000 World Bank-Discount Notes 5.82% 05/17/96 4,283,429
1,500,000 Fed. Home Ln. Bank-Disc. Note 5.50% 06/19/96 1,462,671
------------
TOTAL (cost-- $26,668,866) $ 26,668,866
------------
COUPON SECURITIES -- 28.74%
$ 2,500,000 Fed. Natl. Mtge. Assoc., 9.200% 5.79% 01/10/96 $ 2,502,018
1,000,000 Fed. Natl. Mtge. Assoc., Variable Rate 5.94% 02/09/96 999,942
2,000,000 Fed. Natl. Mtge. Assoc., 9.350% 5.80% 02/12/96 2,007,788
2,500,000 Fed. Home Loan Bank, 6.220% 6.20% 02/15/96 2,500,000
2,500,000 Fed. Home Loan Bank, 6.910% 6.11% 02/21/96 2,502,606
2,500,000 Tennesee Valley Authority, 4.375% 5.87% 03/04/96 2,493,700
1,000,000 Fed. Home Loan Bank, 4.890% 5.69% 03/11/96 998,386
2,500,000 Fed. Natl. Mtge. Assoc., 6.460% 5.75% 03/27/96 2,503,899
1,000,000 Fed. Natl. Mtge. Assoc., 6.460% 6.16% 03/27/96 1,000,649
2,500,000 Fed. Natl. Mtge. Assoc., 6.460% 6.38% 03/27/96 2,500,357
1,755,000 Fed. Home Loan Bank, 6.010% 5.73% 05/15/96 1,756,658
2,025,000 Federal Farm Credit Bank, 5.520% 5.59% 06/03/96 2,024,327
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, continued
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Time of Amortized
Par Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------ -------- -------- ------------
$ 500,000 Fed. Home Loan Bank, 5.050% 5.68% 06/07/96 $ 498,654
1,000,000 Fed. Natl. Mtge. Assoc., 5.500% 5.56% 06/12/96 999,717
1,000,000 Fed. Home Loan Bank, 4.540% 5.77% 06/21/96 994,354
2,000,000 Fed. Natl. Mtge. Assoc., 5.630% 5.69% 06/28/96 1,999,281
2,500,000 Fed. Natl. Mtge. Assoc., 5.630% 5.68% 06/28/96 2,499,168
1,000,000 Fed. Natl. Mtge. Assoc., Variable Rate 5.88% 07/05/96 999,311
1,000,000 Fed. Natl. Mtge. Assoc., 8.000% 5.60% 07/10/96 1,012,070
1,500,000 Fed. Home Loan Bank, 5.000% 5.83% 07/16/96 1,493,513
2,000,000 Federal Farm Credit Bank, 5.750% 5.67% 08/01/96 2,000,689
1,000,000 Federal Farm Credit Bank, 5.750% 5.71% 08/01/96 1,000,115
1,300,000 Federal Farm Credit Bank, 5.875% 5.56% 09/03/96 1,302,437
2,500,000 Fed. Natl. Mtge. Assoc., 5.760% 5.55% 09/03/96 2,503,171
1,320,000 Tennesee Valley Authority, 4.190% 5.48% 09/09/96 1,308,643
500,000 Fed. Home Loan Bank, 4.170% 5.70% 09/09/96 494,913
1,000,000 Fed. Home Loan Bank, 4.500% 5.78% 09/23/96 991,014
1,000,000 Federal Home Ln. Mtge. Corp., 8.125% 5.55% 09/30/96 1,018,417
500,000 Federal Farm Credit Bank, 4.200% 5.60% 10/21/96 494,531
500,000 Fed. Home Loan Bank, 7.920% 5.74% 10/21/96 508,369
1,750,000 Fed. Home Loan Bank, 9.150% 5.58% 10/30/96 1,799,711
------------
TOTAL (cost-- $47,708,408) $ 47,708,408
------------
CERTIFICATES OF DEPOSIT -- 15.87%
$ 300,000 Valley State Bank, Rock Valley 5.80% 01/02/96 $ 300,000
1,000,000 Valley State Bank, Rock Valley 5.80% 01/08/96 1,000,000
250,000 Citizens Bank, Sac City 6.00% 01/12/96 250,000
400,000 Exchange Bank, Collins 6.10% 01/17/96 400,000
500,000 Union State Bank, Monona 5.55% 01/22/96 500,000
1,500,000 Nevada National Bank, Nevada 5.85% 01/26/96 1,500,000
500,000 Peoples State Bank, Elkader 5.77% 01/26/96 500,000
500,000 Union State Bank, Winterset 7.50% 01/26/96 500,000
675,000 Hawkeye Bank, Mt. Pleasant 5.85% 01/27/96 675,000
1,000,000 Nevada National Bank, Nevada 5.80% 01/29/96 1,000,000
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, continued
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Time of Amortized
Par Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------ -------- -------- ------------
$ 500,000 Peoples Savings Bank, Elma 5.95% 01/31/96 $ 500,000
1,000,000 Pella National Bank, Pella 5.95% 02/02/96 1,000,000
500,000 Peoples Trust & Savings Bank, Grand Junction 5.75% 02/14/96 500,000
500,000 Heritage Bank, Holstein 6.00% 02/14/96 500,000
250,000 Ft. Madison Bank & Tr, Ft. Madison 5.90% 02/20/96 250,000
500,000 Union State Bank, Winterset 7.50% 02/21/96 500,000
125,000 Farmers State Bank, Hawarden 6.00% 02/26/96 125,000
500,000 Peoples State Bank, Elkader 5.60% 02/27/96 500,000
2,500,000 Firstar Bank, Des Moines 5.75% 02/28/96 2,500,000
2,500,000 Firstar Bank, Des Moines 5.75% 03/11/96 2,500,000
250,000 Citizens Bank, Sac City 6.00% 03/12/96 250,000
250,000 Citizens Bank, Sac City 6.00% 03/13/96 250,000
5,000,000 Norwest Bank, Clive 5.65% 03/21/96 5,000,000
500,000 Union State Bank, Elma 5.65% 03/25/96 500,000
500,000 Peoples State Bank, Rock Valley 5.90% 04/30/96 500,000
250,000 Citizens Bank, Sac City 6.05% 07/16/96 250,000
300,000 Miles Savings Bank, Miles 6.10% 08/09/96 300,000
500,000 Heritage Bank, Holstein 6.15% 08/16/96 500,000
250,000 Ft. Madison Bank & Tr, Ft. Madison 6.10% 08/21/96 250,000
200,000 Shelby Co. State Bank, Harlan 6.00% 10/13/96 200,000
1,000,000 Nevada National Bank, Nevada 6.00% 10/30/96 1,000,000
1,000,000 Hawkeye Bank, Cedar Rapids 6.00% 11/07/96 1,000,000
250,000 Libertyville Savings Bank, Libertyville 6.00% 11/21/96 250,000
300,000 First State Bank, Ida Grove 5.80% 12/06/96 300,000
300,000 Miles Savings Bank, Miles 5.85% 12/13/96 300,000
------------
TOTAL (cost-- $26,350,000) $ 26,350,000
------------
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, continued
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Time of Amortized
Par Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------ -------- -------- ------------
REPURCHASE AGREEMENTS (collateralized by U.S. Govt. securities) -- 39.07%
$64,862,000 Cantor Fitzgerald, Repo 5.78% 01/02/96 $ 64,862,000
------------
TOTAL (cost-- $64,862,000) $ 64,862,000
------------
TOTAL INVESTMENTS-- 99.74% (cost-- $165,589,274) $165,589,274
EXCESS OF OTHER ASSETS OVER TOTAL LIABILITIES-- 0.26% $ 428,697
(Includes $33,851 payable to IMG and $708,327 ------------
dividends payable to unitholders)
NET ASSETS-- 100% $166,017,971
Applicable to 166,017,971 outstanding units ============
NET ASSET VALUE: $ 1.00
Offering and redemption price per unit ($166,017,971 ============
divided by 166,017,971 units outstanding)
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Time of Amortized
Par Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------ -------- -------- ------------
DISCOUNTED GOVERNMENT SECURITIES -- 12.76%
$ 1,500,000 U. S. Treasury Bill 5.96% 02/08/96 $ 1,491,007
1,500,000 U. S. Treasury Bill 6.24% 04/04/96 1,476,892
1,500,000 U. S. Treasury Bill 5.69% 05/02/96 1,472,550
------------
TOTAL (cost-- $4,440,449) $ 4,440,449
------------
COUPON SECURITIES -- 34.65%
$ 1,500,000 U. S. Treasury Note, 7.500% 5.71% 02/29/96 $ 1,504,154
1,000,000 U. S. Treasury Note, 7.500% 5.73% 02/29/96 1,002,770
1,500,000 U. S. Treasury Note, 7.625% 5.70% 04/30/96 1,509,053
1,000,000 U. S. Treasury Note, 7.625% 5.74% 04/30/96 1,005,941
1,000,000 U. S. Treasury Note, 7.375% 5.57% 05/15/96 1,006,009
1,000,000 U. S. Treasury Note, 7.375% 5.68% 05/15/96 995,242
1,000,000 U. S. Treasury Note, 5.875% 5.52% 05/31/96 1,007,065
1,000,000 U. S. Treasury Note, 7.625% 5.52% 05/31/96 1,001,421
1,000,000 U. S. Treasury Note, 7.625% 5.84% 05/31/96 1,001,411
1,000,000 U. S. Treasury Note, 7.875% 5.52% 07/31/96 1,009,308
1,000,000 U. S. Treasury Note, 7.875% 5.66% 07/31/96 1,016,137
------------
TOTAL (cost-- $12,058,511) $ 12,058,511
------------
REPURCHASE AGREEMENTS (collateralized by U.S. Govt. securities) -- 52.47%
$18,260,000 Cantor Fitzgerald, Repo 5.78% 01/02/96 $ 18,260,000
------------
TOTAL (cost-- $18,260,000) $ 18,260,000
------------
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
STATEMENT OF NET ASSETS, continued
DECEMBER 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Time of Amortized
Par Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------ -------- -------- ------------
TOTAL INVESTMENTS-- 99.88% (cost-- $34,758,960) $ 34,758,960
EXCESS OF OTHER ASSETS OVER TOTAL LIABILITIES-- 0.12% $ 41,934
(Includes $4,151 payable to IMG and $146,213 ------------
dividends payable to unitholders)
NET ASSETS-- 100% $ 34,800,894
Applicable to 34,800,894 outstanding units ============
NET ASSET VALUE: $ 1.00
Offering and redemption price per unit ($34,800,894 ============
divided by 34,800,894 units outstanding)
</TABLE>
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
STATEMENT OF OPERATIONS
For the six months ended December 31, 1995
- - ------------------------------------------
Direct Government
Diversified Portfolio Obligation Portfolio
--------------------- --------------------
INVESTMENT INCOME:
Interest $ 3,833,642 $ 913,794
----------- -----------
EXPENSES:
Investment advisory and
program support fees 162,102 23,617
Custody and administrative fees 146,026 51,169
Distribution fees 65,020 15,748
Other fees and expenses 13,004 3,148
------ -----
Total Expenses 386,152 93,682
------- ------
NET INVESTMENT INCOME $ 3,447,490 $ 820,112
=========== ===========
See Notes to Financial Statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended December 31, 1995 and 1994
- - ---------------------------------------------------
<TABLE>
<CAPTION>
Direct Government
Diversified Portfolio Obligation Portfolio
1995 1994 1995 1994
--------------------------- ---------------------------
<S> <C> <C> <C> <C>
From Investment Activities:
Net investment income
distributed to unitholders $ 3,447,490 $ 2,503,371 $ 820,112 $ 604,173
============ ============ ============ ============
From Unit Transactions:
(at constant net asset value
of $1 per unit)
Units sold $427,404,925 $434,320,675 $ 14,066,301 $ 17,213,300
Units issued in reinvestment
of dividends from net
investment income 3,447,490 2,503,371 820,112 604,173
Units redeemed (428,953,726) (430,001,776) (10,567,440) (18,382,770)
------------ ------------ ----------- -----------
Net increase/(decrease) in
net assets derived from
unit transactions 1,898,689 6,822,270 4,318,973 (565,297)
Net assets at beginning of
six months 164,119,282 122,162,936 30,481,921 28,308,699
----------- ----------- ---------- ----------
Net assets at end of
six months $166,017,971 $128,985,206 $ 34,800,894 $ 27,743,402
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
Selected Data for A Unit of Each Portfolio
Outstanding Through Each Six Month Period
- - -----------------------------------------
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988 1987
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
IOWA SCHOOLS JOINT INVESTMENT TRUST DIVERSIFIED PORTFOLIO
Net Asset Value,
Beginning
of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net Investment
Income .053 .043 .027 .031 .073 .073 .080 .073 .063
------------------------------------------------------------------------------------------------
Dividends
Distributed (.053) (.043) (.027) (.031) (.073) (.073) (.080) (.073) (.063)
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
================================================================================================
Total Return 5.31% 4.33% 2.68% 3.11% 7.26% 7.27% 8.05% 7.26% 6.27%
Ratio of Expenses
to Average
Net Assets 0.59% 0.59% 0.58% 0.58% 0.62% 0.66% 0.67% 0.67% 0.64%
Ratio of Net
Income to
Average
Net Assets 5.31% 4.33% 2.68% 3.11% 7.26% 7.27% 8.05% 7.26% 6.27%
Net Assets,
End of Period
(000 Omitted) $166,018 $128,985 $143,987 $143,378 $110,353 $103,212 $ 60,102 $ 58,366 $ 60,037
<PAGE>
Selected Data for A Unit of Each Portfolio
Outstanding Through Each Six Month Period
- - -----------------------------------------
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988*
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
Net Asset Value,
Beginning
of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net Investment
Income .052 .042 .025 .030 .049 .073 .080 .084
-------------------------------------------------------------------------------------
Dividends
Distributed (.052) (.042) (.025) (.030) (.049) (.073) (.080) (.084)
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=====================================================================================
Total Return 5.21% 4.23% 2.54% 2.98% 4.93% 7.28% 8.05% 8.44%
Ratio of Expenses
to Average
Net Assets 0.59% 0.59% 0.58% 0.58% 0.62% 0.65% 0.65% 0.66%
Ratio of Net
Income to
Average
Net Assets 5.21% 4.23% 2.54% 2.98% 4.93% 7.28% 8.05% 8.44%
Net Assets,
End of Period
(000 Omitted) $ 34,801 $ 27,743 $ 32,508 $ 28,713 $ 29,228 $ 27,443 $ 18,688 $ 10,317
</TABLE>
*From Commencement of Operations (September 22, 1988).
See Notes to Financial Statements.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- - -----------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Iowa Schools Joint Investment Trust (ISJIT) is a common law trust
established under Iowa law pursuant to Chapter 28E and Section 279.29, Iowa
Code (1985), as amended, which authorizes Iowa schools to jointly invest
moneys pursuant to a joint investment agreement. ISJIT is registered under
the Investment Company Act of 1940. ISJIT was established by the adoption
of a Joint Powers Agreement and Declaration of Trust as of October 1, 1986,
and commenced operations on December 16, 1986. The Joint Powers Agreement
and Declaration of Trust was amended September 22, 1988, and again on May
1, 1993. As amended, ISJIT is authorized and now operates three investment
programs: 1) the Diversified Portfolio, 2) the Direct Government Obligation
Portfolio, and 3) the Fixed Term Automated (FTA) Investment Program. The
objective of the portfolios is to maintain a high degree of liquidity and
safety of principal through investment in short-term securities as
permitted for Iowa schools under Iowa law. The objective of the FTA
Investment Program is to provide individual public agency ownership of
investments in legally permissible individual securities which offer fixed
rates of return and fixed maturities. Norwest Bank Iowa, N.A., serves as
ISJIT's Administrator and Custodian, and Investors Management Group serves
as the Investment Advisor.
INVESTMENTS IN SECURITIES
The Diversified and Direct Government Obligation Portfolios consist of cash
and short-term investments valued at amortized cost pursuant to Rule 2a-7
under the Investment Company Act of 1940. This involves valuing a portfolio
security at its original cost on the date of purchase, and thereafter
amortizing any premium or discount on a straight-line basis to maturity.
The amount of premium or discount amortized to income under the
straight-line method does not differ materially from the amount which would
be amortized to income under the interest method. Procedures are followed
to maintain a constant net asset value of $1.00 per unit for each
portfolio.
Security transactions are accounted for on the trade date. Interest income,
including the accretion of discount and amortization of premium, is
recorded on the accrual basis.
Under Governmental Accounting Standards as to custodial credit risk,
ISJIT's investments in securities are classified as category one. Category
one is the most secure investment category description.
Certificates of deposit amounts in excess of the $100,000 federal deposit
insurance are collateralized as required by Iowa law, including the
security provided by the State of Iowa's sinking fund for public deposits.
In connection with transactions in repurchase agreements, it is ISJIT's
policy that its Custodian take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest at all times. If the
seller defaults, and the value of the collateral declines, realization of
the collateral by ISJIT may be delayed or limited. At December 31, 1995,
the securities purchased under overnight agreements to resell were
collateralized by government agency securities with market values of
$66,553,000 and $18,654,000 for the Diversified Portfolio and the Direct
Government Obligation Portfolio, respectively.
UNIT ISSUES, REDEMPTIONS, AND DISTRIBUTIONS
ISJIT determines the net asset value of each portfolio account daily. Units
are issued and redeemed daily at the daily net asset value. Net investment
income for each portfolio is declared daily and distributed monthly.
INCOME TAXES
ISJIT is exempt from federal and state income tax.
FEES AND EXPENSES
Under separate agreements with ISJIT, Investors Management Group (IMG), the
Investment Advisor and Program Support Provider, and Norwest Bank, Iowa,
N.A. (Norwest), the Custodian and Administrator are paid an annual fee for
operating the investment programs. For each of the portfolios, IMG receives
.150 percent of the average daily net asset value up to $150 million and
.125 percent exceeding $150 million for investment advisor fees. In
addition, IMG receives .10 percent of the average daily net asset value of
the Diversified Portfolio for program support fees. For the six months
ended December 31, 1995, the Diversified Portfolio and the Direct
Government Obligation Portfolio paid $162,102 and $23,617, respectively to
IMG for services provided. For each of the portfolios, Norwest receives
.050 percent of the average daily net asset value up to $150 million, .045
percent from $150 to $200 million, and .040 percent exceeding $200 million
for custodial services. For the Diversified Portfolio, Norwest receives
.175 percent of the average daily net asset value up to $150 million, .165
percent from $150 to $200 million, and .150 percent exceeding $200 million;
for the Direct Government Obligation Portfolio, Norwest receives .275
percent of the average daily net asset value up to $150 million, .265
percent from $150 to $200 million, and .250 percent exceeding $200 million
for administrative services. For the six months ended December 31, 1995,
the Diversified Portfolio and the Direct Government Obligation Portfolio
paid $146,026 and $51,169, respectively to Norwest for services provided.
Under a distribution plan, the sponsoring association receives an annual
fee of .10 percent of the daily net asset value of the portfolios. For the
six months ended December 31, 1995, the Diversified Portfolio and the
Direct Government Obligation Portfolio paid $65,020 and $15,748,
respectively to the Iowa Association of School Boards. ISJIT is responsible
for operating expenses incurred directly by ISJIT.
All fees are computed daily and paid monthly.
(2) SECURITIES TRANSACTIONS
Purchases of portfolio securities for the Diversified Portfolio and Direct
Government Obligation Portfolio aggregated $5,500,750,000 and
$2,274,178,000 respectively for the six months ended December 31, 1995.
Proceeds from maturities of securities for the Diversified Portfolio and
Direct Government Obligation Portfolio aggregated $5,526,875,649 and
$2,264,254,000, respectively for the six months ended December 31, 1995.
<PAGE>
BOARD OF TRUSTEES
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CAROLYN JONS, Chairperson, Ames
DON WILLIAMS, Chairperson, Villisca
GARY D. BENGSTEN, Treasurer, Carroll
BOYD BOEHLJE, Trustee, Pella
GERALD COWELL, Trustee, Creston
RICHARD VANDE KIEFT, Trustee, Cedar Falls
SERVICE PROVIDERS
- - -----------------
INVESTMENT ADVISOR:
Investors Management Group
2203 Grand Avenue
Des Moines, IA 50312-5338
CUSTODIAN AND ADMINISTRATOR:
Norwest Bank Iowa, N.A.
666 Walnut, P.O. Box 837
Des Moines, IA 50304
LEGAL COUNSEL:
Ahlers, Cooney, Dorweiler, Haynie,
Smith & Allbee, P.C.
100 Court Avenue
Des Moines, IA 50309
INDEPENDENT AUDITORS:
KPMG Peat Marwick LLP
2500 Ruan Center
Des Moines, IA 50309
FOR INVESTMENT INFORMATION . . .
c/o Norwest Bank Iowa, N.A.
666 Walnut, P.O. Box 837
Des Moines, Iowa 50304
Toll Free (800) 872-0140 or (515) 245-3245
