BENHAM INVESTMENT TRUST, N-30D, 1996-10-30

BENHAM INVESTMENT TRUST
N-30D, 1996-10-30

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BENHAM PRIME
MONEY MARKET FUND

=================

Semiannual Report

August 31, 1996

[picture of a desktop with books, a lamp
mail, a pen, glasses]

Twentieth Century Mutual Funds
and The Benham Group

[front cover]

CONTENTS

U.S. ECONOMIC REVIEW ................................. 1

PERFORMANCE INFORMATION .............................. 2

PORTFOLIO STATISTICS & COMPOSITION ................... 3

MARKET SUMMARY ....................................... 5

MANAGEMENT DISCUSSION
Fund Performance and Strategy ........................ 6
Credit Quality and Diversification ................... 8

INVESTMENT FUNDAMENTALS
Money Market Instruments .............................10
Risk Measurements & Management .......................12
Other Definitions ....................................14

FINANCIAL INFORMATION (UNAUDITED)
Financial Highlights .................................15
Financial Statements and Notes .......................16
Schedule of Investment Securities ....................22

U.S. ECONOMIC REVIEW
JAMES M. BENHAM [photo of James
Chairman, Benham Funds M. Benham]

After a slow start in January, the U.S. economy grew at a healthy pace for the
first three quarters of 1996, confounding market analysts who predicted a
significant slowdown in the second half of the year. During 1995, economic
weakness prompted the Federal Reserve (the Fed) to make a series of short-term
interest rate cuts, culminating in a quarter-of-a-percent cut in January 1996.
This expansionary monetary policy helped speed the pace of U.S. economic growth
from an anemic 0.3% annual rate in the fourth quarter of 1995 to a more robust
2.0% in the first quarter of 1996. Growth expanded further to an impressive 4.7%
in the second quarter of the year (see the accompanying graph).

[bar graph on left side of page - graph data described below]

Stronger-than-expected corporate earnings provided fuel for increased corporate
expansion and job growth. Nearly two million new jobs were created in the first
eight months of the year, sending the national unemployment rate to a six-year
low of 5.1%. Healthy employment numbers and a strong performance by U.S. stocks
in general led to fears of inflationary pressure and expectations of an interest
rate hike by the Fed. As a result, U.S. bonds overall gave a lackluster
performance for the period.

But the expected surge in inflation failed to materialize. For the first eight
months of the year, inflation, as measured by the consumer price index (CPI),
grew at an annualized rate of 3.2%, as compared to a 2.8% rate for the first
eight months of 1995. (The 2.5% inflation rate for all of 1995 was the lowest
annual rate since 1986.) Because of this apparent lack of inflationary pressure,
the Fed held interest rates steady through September.

Nevertheless, some market participants believe that the Fed will raise interest
rates before the end of the year. Signs of wage inflation have surfaced--in
June, the Labor Department reported the largest average hourly earnings increase
in more than 30 years. In spite of higher interest rates for most of this year,
the housing market has remained robust, and consumer confidence is at a six-year
high, indicating that the U.S. consumer may still have some spending power.
Whatever the Fed's plans, however, it is unlikely that we will see a Fed move in
interest rates until the November elections are safely past.

[graph data]

Quarterly Economic Growth (GDP)
vs. Inflation (Consumer Price Index)
July 1994 - August 1996
GDP CPI
Jan-94 2.52
Feb-94 2.51
Mar-94 2.50 2.51
Apr-94 2.36
May-94 2.29
Jun-94 4.90 2.56
Jul-94 2.70
Aug-94 2.90
Sep-94 3.50 3.03
Oct-94 2.68
Nov-94 2.60
Dec-94 3.00 2.60
Jan-95 2.87
Feb-95 2.79
Mar-95 0.40 2.86
Apr-95 2.98
May-95 3.12
Jun-95 0.70 3.04
Jul-95 2.83
Aug-95 2.62
Sep-95 3.80 2.54
Oct-95 2.74
Nov-95 2.67
Dec-95 0.30 2.67
Jan-96 2.72
Feb-96 2.72
Mar-96 2.00 2.84
Apr-96 2.90
May-96 2.96
Jun-96 4.70 2.75
Jul-96 2.95
Aug-96 2.88
Source: Bloomberg Financial Markets

PERFORMANCE INFORMATION
YIELD AND TOTAL RETURN SUMMARY

For Periods Ended August 31, 1996

Net Asset 7-Day 7-Day Average Annual Total Returns
- --------------------------------------------------------------------------------
Value Current Effective Life of
(3/1/96-8/31/96) Yield Yield 1 Year 5 Years Fund
- --------------------------------------------------------------------------------

$1.00 4.90% 5.02% 5.19% N/A 5.03%

The Fund commenced operations on November 17, 1993.

PLEASE NOTE: Yields and total returns are based on historical Fund performance
and do not guarantee future results. The Fund's yields and total returns will
vary. The U.S. government neither insures nor guarantees investments in the
Fund. The Fund is managed to maintain a stable $1.00 share price, but, as with
all money market funds, there is no assurance that the Fund will be able to do
so.

PERFORMANCE DEFINITIONS

The 7-day current yield is calculated based on the income generated by an
investment in the Fund over a seven-day period and is expressed as an annual
percentage rate. The 7-day effective yield is calculated similarly, although
this figure is slightly higher than the Fund's 7-day current yield because of
the effects of compounding. The 7-day effective yield assumes that income earned
from the Fund's investments is reinvested and generating additional income.

Total return figures show the overall dollar or percentage change in the value
of a hypothetical investment in the Fund and assume that all of the Fund's
distributions are reinvested. Average annual total returns illustrate the
annually compounded returns that would have produced the Fund's cumulative total
returns if the Fund's performance had been constant over the entire period.
Average annual total returns smooth out variations in a fund's return; they are
not the same as year-by-year results. For fiscal year-by-year total returns,
please refer to the Fund's "Financial Highlights" on page 15.

LIPPER PERFORMANCE COMPARISON

Lipper Analytical Services (Lipper) is an independent mutual fund ranking
service located in Summit, NJ. Rankings are based on cumulative (6-month) and
average annual total returns for the periods ended 8/31/96 for the funds in
Lipper's "Money Market Funds" category.

6 Months 1 Year Life of Fund+
The Fund: 2.49% 5.19% 5.06%
Category Average: 2.36% 4.94% 4.54%
The Fund's Ranking: N/A 66 out of 287 10 out of 226

+ from November 30, 1993, to August 31, 1996

Total returns are based on historical performance and do not guarantee future
results.

PORTFOLIO STATISTICS & COMPOSITION

KEY PORTFOLIO STATISTICS

8/31/96 2/29/96

Portfolio Value: $1,210,150,887 $1,276,353,495
Number of Issues: 76 74
Average Maturity: 45 days 68 days

For definitions of these terms, see page 14.

PORTFOLIO COMPOSITION BY COUNTRY

[pie charts]
8/31/96 2/29/96
U.S.: 67.2% U.S.: 53.9%
France: 7.4% Germany: 15.2%
Canada: 5.1% Australia: 5.7%
Sweden: 4.5% Canada: 5.6%
Other European: 6.4% Japan: 2.0%
Other: 9.4% Other European: 17.6%

See page 13 for a discussion of the Fund's country limits.

PORTFOLIO COMPOSITION BY INDUSTRY

[pie charts]
8/31/96 2/29/96
Banks: 34% Banks: 50%
Misc. Financial Services: 16% U.S. Govt. Agency Securities: 15%
U.S. Treasury & Govt. Agency Securities: 15% Misc. Financial Services: 11%
Oil/Gas/Petrochemical: 8% Other: 24%
Other: 27%

See page 13 for a discussion of the Fund's issuer and industry limits.

PORTFOLIO COMPOSITION

COMPOSITION BY MATURITY

[pie charts]
8/31/96 2/29/96
1-29 Days: 42.2% 1-29 Days: 53.5%
30-59 Days: 32.2% 30-59 Days: 12.7%
60-89 Days: 16.0% 60-89 Days: 11.6%
90-119 Days: 3.5% 90-119 Days: 2.2%
120-397 Days: 6.1% 120-397 Days: 20.0%

The Fund buys only U.S. dollar-denominated obligations with remaining maturities
of 13 months (397 days) or less. The Fund also maintains a dollar-weighted
average portfolio maturity of 90 days or less, with 50-60 days considered a
"neutral" position.

COMPOSITION BY SECURITY TYPE

[pie charts]
8/31/96 2/29/96
Commercial Paper: 63.6% Commercial Paper: 52.3%
Yankee CDs: 12.8% U.S. Govt. Agency Discount Notes: 14.9%
Floating-Rate Notes: 10.6% Eurodollar CDs: 11.7%
U.S. Govt. Agency Notes: 5.9% Yankee CDs: 11.3%
Eurodollar CDs: 2.5% Floating-Rate Notes: 5.7%
Other: 4.6% Other: 4.1%

These security types are defined on pages 10 and 11.

COMPOSITION BY S&P CREDIT RATING

[pie charts]
8/31/96
A-1+: 70%
A-1: 25%
Unrated U.S. Govt. Agency Securities: 5%

2/29/96
A-1+: 80%
A-1: 17%
A-2: 2%
Unrated U.S. Govt. Agency Securities: 1%

The Fund restricts its investments to obligations considered "first-tier" by the
SEC or "high-quality" according to guidelines established by the Fund's Board of
Trustees. First-tier obligations have received the highest rating from at least
two credit rating agencies such as Moody's and Standard & Poor's (S&P). For
example, A-1 (which includes A-1+) is S&P's highest commercial paper credit
rating. The A-2 rated securities shown above are considered first-tier because
they received top ratings from two rating services other than S&P. "Unrated U.S.
Government Agency Securities" are nonrated obligations of government-sponsored
enterprises that we have determined to be of comparable quality to A-1+ rated
obligations.

MARKET SUMMARY
CORPORATE MONEY MARKET SECURITIES
by Amy O'Donnell, Portfolio Manager, and Bob Gahagan, Vice President

Though the Fed held short-term interest rates steady from February through
August, the combination of stronger-than-expected economic growth and low
inflation (discussed on page 1) caused uncertainty in U.S. financial markets
about the Fed's interest rate intentions. As a result, money market yields
fluctuated throughout the period. The money market yield curve* reacted to each
change in market expectations, steepening in response to strong economic numbers
and flattening at signs of economic weakness.

The graph below illustrates this reactive volatility in money market rates. The
federal funds rate (the lending rate targeted by the Federal Reserve for large
overnight loans between commercial banks) remained steady after the Fed's last
rate hike in January. But three-month LIBOR,+ which tends to reflect the
financial market's current expectations of interest rate policy, fluctuated
significantly. As the graph illustrates, the sharpest movements in three-month
LIBOR typically occurred in response to the government's monthly employment
report, which the markets use as a gauge of economic strength.

Though yields on one-year securities rose during the period, the yield of the
average first-tier* money fund fell below 5% as wary portfolio managers,
uncertain of the interest rate outlook, bought more-defensive and lower-yielding
shorter-term securities. With inflation running slightly above 3%, money market
investors' "real" yields (stated yields minus the inflation rate) deteriorated,
falling below 2%.

Though we think it possible that the Fed may raise short-term rates by year's
end, shifting market sentiment alone may provide adequate cause for continued
volatility in money market yields.

* defined on page 14

+ London Interbank Offered Rate--a "money market rate" that most banks and
corporations track when determining the rate they'll pay to investors on
short-term debt (see also page 14).

[line graph - data described below]

Fed Funds vs. Three-Month LIBOR

LIBOR Fed Funds Rate Target Employment Report Released
2/1/96 5.32813 5.25
2/2/96 5.35938 5.25 X
2/5/96 5.33594 5.25
2/6/96 5.33594 5.25
2/7/96 5.32031 5.25
2/8/96 5.30469 5.25
2/9/96 5.29688 5.25
2/12/96 5.25781 5.25
2/13/96 5.25781 5.25
2/14/96 5.26563 5.25
2/15/96 5.26563 5.25
2/16/96 5.27344 5.25
2/19/96 5.28125 5.25
2/20/96 5.28125 5.25
2/21/96 5.3125 5.25
2/22/96 5.29688 5.25
2/23/96 5.28125 5.25
2/26/96 5.27344 5.25
2/27/96 5.29688 5.25
2/28/96 5.3125 5.25
2/29/96 5.32813 5.25
3/1/96 5.32813 5.25
3/4/96 5.3125 5.25
3/5/96 5.29688 5.25
3/6/96 5.3125 5.25
3/7/96 5.3125 5.25
3/8/96 5.32031 5.25 X
3/11/96 5.45313 5.25
3/12/96 5.44531 5.25
3/13/96 5.44531 5.25
3/14/96 5.44531 5.25
3/15/96 5.44531 5.25
3/18/96 5.47656 5.25
3/19/96 5.48438 5.25
3/20/96 5.48438 5.25
3/21/96 5.47656 5.25
3/22/96 5.46875 5.25
3/25/96 5.46875 5.25
3/26/96 5.45313 5.25
3/27/96 5.46875 5.25
3/28/96 5.49219 5.25
3/29/96 5.49219 5.25
4/1/96 5.48438 5.25
4/2/96 5.48438 5.25
4/3/96 5.49219 5.25
4/4/96 5.48438 5.25
4/8/96 5.48438 5.25 X
4/9/96 5.5625 5.25
4/10/96 5.55469 5.25
4/11/96 5.55469 5.25
4/12/96 5.55469 5.25
4/15/96 5.52344 5.25
4/16/96 5.51563 5.25
4/17/96 5.51563 5.25
4/18/96 5.51563 5.25
4/19/96 5.51563 5.25
4/22/96 5.49219 5.25
4/23/96 5.49219 5.25
4/24/96 5.48438 5.25
4/25/96 5.48438 5.25
4/26/96 5.48438 5.25
4/29/96 5.48438 5.25
4/30/96 5.48438 5.25
5/1/96 5.51563 5.25
5/2/96 5.51563 5.25
5/3/96 5.54688 5.25 X
5/6/96 5.54688 5.25
5/7/96 5.51563 5.25
5/8/96 5.51563 5.25
5/9/96 5.51563 5.25
5/10/96 5.51563 5.25
5/13/96 5.50781 5.25
5/14/96 5.51563 5.25
5/15/96 5.48438 5.25
5/16/96 5.48438 5.25
5/17/96 5.51563 5.25
5/20/96 5.51563 5.25
5/21/96 5.51563 5.25
5/22/96 5.51563 5.25
5/23/96 5.50781 5.25
5/24/96 5.5 5.25
5/27/96 5.5 5.25
5/28/96 5.5 5.25
5/29/96 5.49219 5.25
5/30/96 5.51563 5.25
5/31/96 5.51563 5.25
6/3/96 5.55469 5.25
6/4/96 5.55469 5.25
6/5/96 5.55469 5.25
6/6/96 5.54688 5.25
6/7/96 5.52344 5.25 X
6/10/96 5.60938 5.25
6/11/96 5.60938 5.25
6/12/96 5.60938 5.25
6/13/96 5.60938 5.25
6/14/96 5.60938 5.25
6/17/96 5.59375 5.25
6/18/96 5.58594 5.25
6/19/96 5.58594 5.25
6/20/96 5.57813 5.25
6/21/96 5.59375 5.25
6/24/96 5.58594 5.25
6/25/96 5.58594 5.25
6/26/96 5.60938 5.25
6/27/96 5.625 5.25
6/28/96 5.60156 5.25
7/1/96 5.59375 5.25
7/2/96 5.59375 5.25
7/3/96 5.61719 5.25
7/4/96 5.58594 5.25
7/5/96 5.58594 5.25 X
7/8/96 5.71875 5.25
7/9/96 5.71875 5.25
7/10/96 5.71094 5.25
7/11/96 5.69531 5.25
7/12/96 5.6875 5.25
7/15/96 5.6875 5.25
7/16/96 5.69531 5.25
7/17/96 5.67969 5.25
7/18/96 5.67969 5.25
7/19/96 5.64844 5.25
7/22/96 5.64844 5.25
7/23/96 5.64844 5.25
7/24/96 5.64844 5.25
7/25/96 5.65625 5.25
7/26/96 5.65625 5.25
7/29/96 5.67188 5.25
7/30/96 5.70313 5.25
7/31/96 5.6875 5.25
8/1/96 5.67188 5.25
8/2/96 5.61719 5.25 X
8/5/96 5.54688 5.25
8/6/96 5.5625 5.25
8/7/96 5.54688 5.25
8/8/96 5.54688 5.25
8/9/96 5.54688 5.25
8/12/96 5.53125 5.25
8/13/96 5.53125 5.25
8/14/96 5.53125 5.25
8/15/96 5.53125 5.25
8/16/96 5.53125 5.25
8/19/96 5.53125 5.25
8/20/96 5.53125 5.25
8/21/96 5.5 5.25
8/22/96 5.5 5.25
8/23/96 5.48438 5.25
8/26/96 5.48438 5.25
8/27/96 5.53906 5.25
8/28/96 5.54688 5.25
8/29/96 5.53906 5.25
8/30/96 5.57031 5.25

Source: DRI/McGraw-Hill

MANAGEMENT DISCUSSION
FUND PERFORMANCE AND STRATEGY
by Amy O`Donnell, Portfolio Manager

NOTE: TERMS MARKED WITH AN ASTERISK (*) ARE DEFINED IN THE INVESTMENT
FUNDAMENTALS SECTION (PAGES 10-14).

Q: How did the Fund perform?

A: The Fund's 2.49% return for the six months ended 8/31/96 was 13 basis
points* higher than the 2.36% average total return for the 294 funds in
Lipper's "Money Market Funds" category for the same period (see the
Lipper Performance Comparison on page 2). For the one-year period ended
August 31, the Fund had a total return of 5.19%, compared to the 4.94%
average return of its Lipper group. Based on this one-year return, the
Fund was ranked in the top 25% of its Lipper category. The Fund also
continued to meet its stated objective--seeking the highest level of
current income consistent with preservation of capital. The Fund's
yield declined fractionally during the period, but not as much as that
of the average first-tier* money market fund.

Q: What caused money market fund yields to fall?

A: Mixed economic signals during the period (see pages 1 and 5) caused
considerable uncertainty among money market fund managers about
short-term interest rate trends. Many money fund managers, anticipating
an eventual short-term rate hike by the Fed, shied away from one-year
securities and favored one- to three-month securities. These
shorter-term issues, while more defensive, also offer lower yields.

Q: Did you follow a similar strategy during the period?

A: Yes. As the Fund's longer-term securities matured, we replaced them
with shorter-term issues, giving us the flexibility to respond quickly
to a rise in interest rates. By the end of August, more than forty
percent of the Fund's holdings were in one- to 30-day securities,
bringing its average maturity* down to 45 days--slightly shorter than
that of the average money market fund and below the Fund's "neutral"
50- to 60-day average maturity (see the Composition By Maturity charts
on page 4). This move to a so-called "bullet" portfolio structure*
completed the unwinding of the barbell structure* that we had in place
early in the year when interest rates were still falling.

Q: The Fund's total return held up very well, especially considering the
significant drop in the Fund's average maturity. Why?

A: The structure of the money market yield curve* during the period
allowed us to reinvest the Fund's maturing securities in new securities
with comparable yields. We also added value to the Fund by

MANAGEMENT DISCUSSION
FUND PERFORMANCE AND STRATEGY
(Continued from the previous page)

purchasing more floating-rate notes* and callable and convertible
securities. These offered higher yields while adding very little
additional risk to the portfolio. It should be noted that these
particular types of "structured" securities are considered acceptable
for money market investments by the SEC (see "Floating-Rate Notes"
on page 11 of the Investment Fundamentals).

Q: Why the significant shifts in the Fund's composition? For example,
holdings in commercial paper* increased from 52% to 64%; German
holdings dropped dramatically, and French holdings rose. (See the
Composition By Country and Composition By Investment Type charts on
pages 3 and 4.)

A: Most of the changes in the Fund's composition resulted from our desire
to maintain a shorter average maturity. When we're looking for very
short-term securities, we'll likely buy commercial paper because it
makes up the bulk of available securities with maturities in the one-
to 60-day range.

Regarding the Fund's German holdings, most of the German issuers on our
Approved Issuer List (AIL--see the Credit Quality and Diversification
section on pages 8 and 9) are German banks, which have very strong
credit ratings. Because our internal guidelines allow us to buy
longer-term securities (six- to 12-month maturities) from only the
strongest issuers, we tend to buy German securities when we want to
lengthen the Fund's maturity. However, since we've been shortening the
Fund's portfolio, we replaced the Fund's maturing German securities
with other shorter-term securities that had higher yields due to their
lower credit quality relative to German issues.

The Fund's French holdings increased because we added a new AAA rated
French issuer to our AIL. We have consistently purchased shorter-term
securities from this source because of their relatively high yields.

Q: You mentioned in the market discussion on page 5 that you expect
ongoing volatility in money market yields as well as an eventual
short-term interest rate increase by the Fed. Given this outlook, how
do you plan to manage the Fund over the next six months?

A: We plan to remain relatively defensive, but we may occasionally extend
the Fund's average maturity to take advantage of yield spikes caused by
shifting market sentiment. However, we will likely stay within about 10
days of the average money market fund's maturity.

MANAGEMENT DISCUSSION
CREDIT QUALITY AND DIVERSIFICATION
with Vicki Zesses, Manager of Corporate Credit Research

VICKI ZESSES IS RESPONSIBLE FOR MANAGING CREDIT RESEARCH AND CREDIT RISK
REDUCTION FOR ALL TWENTIETH CENTURY AND BENHAM CORPORATE MONEY MARKET AND BOND
FUNDS. SHE HAS 12 YEARS OF EXPERIENCE IN MANAGING CORPORATE CREDIT RESEARCH AND
RISK.

Q: About a year ago, you began to organize a credit research team and set
up investment limits to help maintain optimal diversification and
minimal credit risk within the Twentieth Century/Benham money market
and bond funds. What have you accomplished?

A: Over the past year we have created a new credit management system,
which we will continue to refine over time. The key to the system is a
series of investment limits we have set--both for individual funds and
the company as a whole--that are designed to cap our exposure to the
individual issuers, countries or industries from whom we purchase
securities (see Addressing and Measuring Credit Risk on pages 12 and
13). We currently have a five-person credit research team (CRT) that
carries out in-depth analysis on all securities considered for purchase
by any of the Twentieth Century/Benham money market or bond funds. We
hope to expand the team to seven by next year.

We have developed an Approved Issuers List (AIL), which has become a
vital tool for our portfolio managers in choosing acceptable
investments for our funds. Managers may purchase securities only from
issuers listed on the AIL.

Q: Is there a system in place to double-check whether purchased securities
fall within allowed limits?

A: Yes. We have established a very thorough daily routine for verifying
the acceptability of issues purchased by the funds. But we plan to go
even further. By early 1997, we intend to transfer this task to a
sophisticated software system that will verify the acceptability of a
security before a purchase is completed.

Q: How is your team organized?

A: Our approach is somewhat unique. Our analysts are assigned by industry
rather than by type of fund (money market fund, bond fund, etc.). This
arrangement helps avoid overlapping research and allows for the
development of specialized industry knowledge, resulting in more
informed comparisons. This approach is particularly beneficial to the
Prime Fund, which invests the majority of its assets in commercial
paper.

MANAGEMENT DISCUSSION
CREDIT QUALITY AND DIVERSIFICATION
(Continued from the previous page)

Q: Speaking of industries, have there been any significant industry
trends, like last year's Japanese banking scare, that you've been
watching over the last six months?

A: We're still keeping a close eye on the Japanese banking situation and
avoiding most Japanese bank securities. Though the situation has
stabilized somewhat, we believe there is still a serious lack of
internal controls in the Japanese banking system that will have to be
dealt with. The Japanese Ministry of Finance has stated that it will
back its major banks, and we only do business with the top six or seven
of those banks, purchasing very short-term securities.

By contrast, the U.S. banking industry has shown improving asset
quality as the trend toward consolidation--mergers and
acquisitions--continues.

Q: What, in your opinion, has caused the unprecedented wave of U.S. bank
merger activity over the last few years?

A: Actually, money market funds such as the Prime Fund have been a major
catalyst in the trend toward consolidation in the banking industry. In
the past, large corporations in need of loans depended on commercial
banks to supply them with ready cash. Now they can raise cash more
cheaply by issuing commercial paper to investors, including mutual
funds such as Twentieth Century/Benham. This transition (moving away
from traditional bank loans in favor of borrowing directly from
investors) is known as "disintermediation" (i.e., eliminating the
middle man).

Dwindling corporate demand for bank loans resulted in fiercer
competition among financial institutions. This ultimately helped
trigger the progression we have seen over the last few years--regional
banks being acquired by super-regional banks, and super-regionals and
money centers purchasing one another as they attempt to benefit from
economies of scale, improve efficiencies and cut costs. The positive
side-effect of this trend, as I mentioned before, has been the improved
asset quality of surviving banks.

INVESTMENT FUNDAMENTALS
MONEY MARKET INSTRUMENTS

The Money Market

The "money market" is a highly liquid, multi-trillion-dollar worldwide financial
market that matches supply from corporations, banks and governments that have
short-term cash or borrowing needs with demand from investors who want to buy
short-term, low-risk, interest-bearing instruments.

On the supply side, corporate, financial and fiscal entities sometimes have more
current obligations to meet than cash on hand, and they need to raise money.
They are therefore willing to sell short-term IOUs to investors in exchange for
cash. For example, corporations issue short-term securities called commercial
paper to raise cash to cover current expenses that are incurred before
anticipated revenues.

On the demand side, investors want a place to "park" their money in the short
term where it can earn interest, retain value and be readily available for other
opportunities or expense payments. Finance officers at corporations, banks,
government offices and securities firms saw how they could satisfy both sides by
issuing certain types of debt securities.

Most money market securities are issued at a discount and pay full value at
maturity (13 months or less). The difference between the purchase value and the
maturity value is the imputed interest.

Money Market Securities

Bankers' Acceptances (BAs)--securities issued by banks to finance commercial
trade. BAs bear an importer's name and allow the importer to back its pledge to
pay for imported goods with a bank's pledge to cover the transaction if the
importer cannot do so.

Certificates of Deposit (CDs)/Eurodollar CDs/Yankee CDs--CDs represent a bank's
obligation to repay money deposited with it for a specified period of time.
Different types of CDs have different issuers. For example, Yankee CDs are
issued by U.S. branches of foreign banks, and Eurodollar CDs are issued in
London by Canadian, European and Japanese banks.

Commercial Paper (CP)--short-term debt issued by large corporations to raise
cash and to cover current expenses in anticipation of future revenues. The
maximum maturity for CP is 270 days, although most CP is issued in a one- to
50-day maturity range. CP rates generally track those of other widely traded
money market instruments, such as Treasury bills and certificates of deposit,
but they are also influenced by the maturity date and the size and credit rating
of the issuer.

INVESTMENT FUNDAMENTALS
MONEY MARKET INSTRUMENTS
(Continued from the previous page)

Floating-Rate Notes (FRNs)--debt securities whose interest rates change when a
designated base rate changes. The base rate is often the federal funds rate, the
90-day Treasury bill rate or the London Interbank Offered Rate (LIBOR). FRNs are
considered derivatives because they "derive" their interest rates from their
designated base rates. However, FRNs are not "risky" derivatives--their behavior
is similar to that of their designated base rates. The SEC has recognized this
similarity and does not consider FRNs to be inappropriate investments for money
market funds.

FRNs are useful because they can save money for both issuers and investors.
Issuers can save money because issuing one set of FRNs allows them to borrow
short-term money without refiling each month with the SEC or incurring monthly
brokerage costs. Issuers share the savings with investors in the form of higher
yields, which they use to attract investors away from traditional securities.

Government Agency Discount Notes--short-term debt securities issued by U.S.
government agencies (such as the Federal Farm Credit Bank, the Federal Home Loan
Bank and the Federal National Mortgage Association). Some agency discount notes
are backed by the full faith and credit of the U.S. government, while most are
guaranteed only by the issuing agency. These notes are issued at a discount and
achieve full value at maturity (typically one year or less).

Government Agency Notes--intermediate-term debt securities issued by U.S.
government agencies (such as the Federal Farm Credit Bank, the Federal Home Loan
Bank and the Federal National Mortgage Association). Some agency notes are
backed by the full faith and credit of the U.S. government, while most are
guaranteed only by the issuing agency. These notes are issued with maturities
ranging from three months to 30 years. The Fund typically buys agency notes with
remaining terms of 365 days or less.

INVESTMENT FUNDAMENTALS
RISK MEASUREMENTS & MANAGEMENT

Addressing and Measuring Interest Rate Risk

Average maturity measures the interest rate sensitivity and interest rate
exposure of a money market portfolio. It shows the average amount of time that
will pass until the securities in the portfolio mature. The longer a portfolio's
average maturity, the more interest rate exposure and interest rate sensitivity
it has. For example, a portfolio with a 90-day average maturity will take much
longer to reinvest its maturing securities than a portfolio with a 30-day
average maturity. Portfolios with longer average maturities generally pay higher
yields to compensate for greater interest rate exposure. To help ensure the
share price stability of money market funds, the SEC mandates that a money
market fund's average maturity cannot exceed 90 days.

Average maturity is also an important strategic tool. Reducing a fund's average
maturity as interest rates rise allows the portfolio manager to more quickly
reinvest matured assets in higher-yielding securities. Conversely, lengthening a
fund's average maturity as interest rates fall allows the portfolio manager to
"lock in" higher yields.

Addressing and Measuring Credit Risk

Credit risk is the risk that an issuer of a debt security could default on its
obligations and fail to make timely payments of interest and principal. The
level of this risk depends on economic factors and the credit quality of the
issuer--its financial strength. Credit quality can be determined by analyzing
the issuer's financial statements and debt management history.

Credit ratings issued by independent rating and research companies such as
Standard & Poor's (S&P) help quantify credit quality--the stronger the issuer,
the higher the credit rating. In turn, credit quality and ratings greatly
influence the prices and yields of money market securities--high ratings mean
higher prices and less current income (yield) as compensation for risk.

But credit ratings are subjective. They reflect the opinions of the rating
agencies that issue them and are not absolute standards of quality. Therefore,
we do not rely exclusively on outside credit rating agencies. We review and take
into consideration their ratings--it would be unwise not to--but we also perform
our own analysis.

INVESTMENT FUNDAMENTALS
RISK MEASUREMENTS & MANAGEMENT
(Continued from the previous page)

The Fund relies on credit analysis from a Twentieth Century/Benham credit
research team (CRT) and independent companies such as S&P. The CRT conducts
in-depth analysis on specific issues that the Fund holds or is considering for
purchase. Amy O'Donnell, the Fund's manager, also operates within limits
determined by the CRT to reduce the Fund's exposure to individual credit risk
factors, such as specific issuers, industries or countries. The limits help
protect the Fund from unexpected developments that might cause an issuer (or
issuers in an industry or country) to default.

Issuer limits are based on the CRT's estimate of each issuer's ability to repay.
The CRT starts by looking only at "first-tier" issuers. Within this framework,
the CRT analysts evaluate each issuer's repayment capabilities and assign each
to a group, ranked from 1 (best) to 5. The Fund is permitted to own a
significantly greater amount of securities issued by Group 1 issuers than by
issuers in other groups.

The CRT also ranks and limits country and industry sectors. For example, country
rankings and limits are determined by each country's financial strength,
economic health and political environment. Industry rankings and limits take
into account each industry's sensitivity to the ups and downs of the business
cycle, as well as the economic and regulatory environment.

INVESTMENT FUNDAMENTALS
OTHER DEFINITIONS

Investment Terms

Basis Points--a basis point equals one one-hundredth of a percentage point (or
0.01%). Therefore, 100 basis points equals one percentage point (or 1%).
Coupon--the stated interest rate on a security.
First-Tier--a security that has received the highest rating from at least two
nationally recognized rating services, such as Moody's or Standard & Poor's (or
one if only one has rated the security). A "first-tier fund" purchases only
securities deemed to be of first-tier quality.
LIBOR (London Interbank Offered Rate)--the interest rate at which the most
creditworthy international banks dealing in Eurodollars make large loans to one
another.
Yield Curve--a graphic representation of the relationship between maturity and
yield for fixed-income securities. Yield curve graphs plot lengthening
maturities along the horizontal axis and rising yields along the vertical axis.
Most "normal" yield curves start in the lower left corner of the graph and rise
to the upper right corner, indicating that yields rise as maturities lengthen.
This upward sloping yield curve illustrates a normal risk/return
relationship--more return (yield) for more risk (a longer maturity). Conversely,
a "flat" yield curve provides little or no extra return for taking on more risk.

Portfolio Statistics

Portfolio Value--the amortized cost of a fund's investments on a given date.
Number of Issues--the number of different securities issuances held by a fund on
a given date.
Average Maturity--a weighted average of all maturities in a fund's
portfolio.

Portfolio Structures

Barbell Structure--a structure that overweights a portfolio in short- and
long-term securities and underweights intermediate-term securities. This
structure tends to outperform a bullet structure when the yield curve is moving
from steep to flat (short-term rates are rising faster than long-term rates, or
long-term rates are falling faster than short-term rates). In a rising interest
rate environment, the short-term securities capture the higher yields with
little price depreciation. In a declining interest rate environment, the
short-term securities provide a relatively steady yield, while longer-term
securities provide more price appreciation than intermediate-term securities.
Bullet Structure--a structure that clusters a portfolio's maturities around a
single maturity (usually an intermediate-term maturity). This structure tends to
outperform a barbell structure when the yield curve is moving from flat to steep
(long-term rates are rising faster than short-term rates, or short-term rates
are falling faster than long-term rates). In a rising interest rate environment,
intermediate-term securities experience less price depreciation than long-term
securities. In a declining interest rate environment, intermediate-term
securities provide significantly more price appreciation than short-term
securities.
Ladder Structure--a balanced structure that staggers maturities so
they occur at regular intervals. This structure tends to be effective when
interest rates are relatively stable, and it provides a regular schedule of
maturing securities.

14
<TABLE>
<CAPTION>
BENHAM PRIME MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Six Months Ended August 31, 1996,
and the Years Ended February 28 and February 29 (except as noted)

AUG. 31,
1996 FEB. 29, FEB. 28, FEB. 28,
(UNAUDITED) 1996 1995 1994+
------------ ------------ ------------ ------------
PER-SHARE DATA
- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD ................................... $ 1.00 1.00 1.00 1.00
Income From Investment Operations
Net Investment Income ................................................. .0247 .0560 .0493 .0095
Net Realized Losses on Investments .................................... (.0002) 0 0 0
------ ------ ------ ------
Total Income from Investment Operations ............................. .0245 .0560 .0493 .0095
------ ------ ------ ------
Distributions
From Net Investment Income ............................................ (.0247) (.0560) (.0493) (.0095)
------ ------ ------ ------
NET ASSET VALUE AT END OF PERIOD ......................................... $ 1.00 1.00 1.00 1.00
====== ====== ====== ======
TOTAL RETURN* ............................................................ 2.49% 5.60% 4.93% .96%
- ---------------
SUPPLEMENTAL DATA AND RATIOS
Net Assets at End of Period (in thousands of dollars) ....................$ 1,227,794 1,270,653 1,509,863 75,168
Ratio of Expenses to Average Daily Net Assets++ .......................... .50%** .48% .04% 0%
Ratio of Expenses to Average Daily Net Assets (Before Reimbursement)++ ... .63%** .62% .71% 1.49%**
Ratio of Net Investment Income to Average Daily Net Assets++ ............ 4.91** 5.43% 5.28% 3.35%**
Ratio of Net Investment Income to Average Daily Net
Assets (Before Reimbursement)++ ....................................... 4.78** 5.29% 4.61% 1.86%**

- ---------------------------
+ Commencement of operations for Benham Prime Money Market Fund was November 17, 1993.
++ The ratios beginning with the year ended February 29, 1996, include expenses paid through expense offset arrangements.
* Total return figures assume reinvestment of dividends and are not annualized.
** Annualized.

See the accompanying notes to financial statements.
</TABLE>

15
<TABLE>
<CAPTION>
BENHAM PRIME MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1996
(Unaudited)

ASSETS
<S> <C>
Investment securities (cost $1,210,150,887) ................................................................ $1,210,150,887
Cash ....................................................................................................... 448,537
Interest receivable ........................................................................................ 6,053,108
Receivable for fund shares sold ............................................................................ 13,763,145
Prepaid expenses and other assets .......................................................................... 43,175
------------
Total assets ............................................................................................. 1,230,458,852
------------

LIABILITIES
Payable for fund shares redeemed ........................................................................... 1,923,505
Dividends payable .......................................................................................... 192,643
Fees payable to affiliates ................................................................................. 531,210
Accrued expenses and other liabilities ..................................................................... 17,289
------------
Total liabilities ........................................................................................ 2,664,647
------------
NET ASSETS .................................................................................................... $1,227,794,205
------------

Net assets consist of:
Capital paid in ............................................................................................ 1,228,066,266
Accumulated net realized loss on investments ............................................................... (273,339)
Undistributed net investment income ........................................................................ 1,278
------------
Net assets .................................................................................................... $1,227,794,205
------------
Shares of beneficial interest outstanding (unlimited number of shares authorized) .......................... 1,228,066,266
============
Net asset value, offering price and redemption price per share ............................................. $1.00
=====

- ---------------------------
See the accompanying notes to financial statements.
</TABLE>

BENHAM PRIME MONEY MARKET FUND
STATEMENT OF OPERATIONS
For the Six Months Ended August 31, 1996
(Unaudited)

INVESTMENT INCOME ................................................ $34,104,698
----------
EXPENSES (NOTE 2):
Investment advisory fees ............................. 1,953,445
Administrative fees .................................. 605,356
Transfer agency fees ................................. 940,376
Printing and postage ................................. 172,515
Custodian fees ....................................... 91,594
Auditing and legal fees .............................. 29,487
Registration and filing fees ......................... 50,208
Directors' fees and expenses ......................... 32,642
Other operating expenses ............................. 94,632
---------
Total expenses ............................................... 3,970,255
Amount reimbursed (Note 2) ....................................... (763,149)
Custodian earnings credits (Note 3) .............................. (54,315)
----------
Net expenses ................................................... 3,152,791
----------
Net investment income ........................................ 30,951,907
----------
Net realized loss on investments ................................. (273,339)
----------
Net increase in net assets resulting from operations ............. $30,678,568
==========

- ---------------------------
See the accompanying notes to financial statements.

17
<TABLE>
<CAPTION>
BENHAM PRIME MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended August 31, 1996 (Unaudited), and
the Year Ended February 29, 1996

AUGUST 31, FEBRUARY 29,
1996 1996
------------ ------------
FROM INVESTMENT ACTIVITIES:
<S> <C> <C>
Net investment income ......................................................................... 30,951,907 74,177,757
Net realized loss on investments .............................................................. (273,339) 0
------------- ------------
Change in net assets derived from investment activities ..................................... 30,678,568 74,177,757
------------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ......................................................................... (30,950,629) (74,177,757)
------------- ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares ................................................................. 1,055,508,068 2,375,209,952
Net asset value of dividends reinvested ....................................................... 29,709,551 71,075,673
Cost of shares redeemed .......................................................................(1,127,804,756)(2,685,494,938)
------------- ------------
Change in net assets derived from capital share transactions ................................ (42,587,137) (239,209,313)
------------- ------------
Net decrease in net assets ................................................................ (42,859,198) (239,209,313)
NET ASSETS:
Beginning of period ........................................................................... 1,270,653,403 1,509,862,716
------------- ------------
End of period .................................................................................$1,227,794,205 1,270,653,403
============= ============
- ---------------------------
See the accompanying notes to financial statements.
</TABLE>

BENHAM PRIME MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
(UNAUDITED)

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Benham Prime Money Market Fund (the Fund) is an open-end management investment
company registered under the Investment Company Act of 1940. It is currently the
sole fund of Benham Investment Trust. The Fund seeks the highest level of
current income consistent with preservation of capital. The Fund buys high
quality (first-tier), U.S. dollar denominated money market instruments and other
short-term obligations of banks, governments, and corporations. The following
significant accounting policies are in accordance with accounting policies
generally accepted in the investment company industry.

SECURITY VALUATIONS--Securities are valued at amortized cost, which approximates
current market value.

SECURITY TRANSACTIONS--Security transactions are accounted for on the date
purchased or sold. Net realized gains and losses are determined on the
identified cost basis, which is also used for federal income tax purposes.

INVESTMENT INCOME--Interest income is recorded on the accrual basis and includes
amortization of premiums and discounts. Discounts and premiums on securities
purchased are amortized on a straight-line basis.

INCOME TAXES STATUS--It is the policy of the Fund to distribute all taxable
income and capital gains to shareholders and to otherwise qualify as a regulated
investment company under provisions of the Internal Revenue Code. Accordingly,
no provision has been made for federal or state taxes.

DISTRIBUTIONS TO SHAREHOLDERS--Net investment income dividends are declared and
credited daily and paid monthly. The Fund does not expect to realize any
long-term gains, and accordingly, does not expect to pay any capital gain
distributions.

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principals requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements

and the reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from these estimates.

(2) INVESTMENT ADVISORY FEES AND OTHER
TRANSACTIONS WITH AFFILIATES

Benham Management Corporation (BMC) is a wholly owned subsidiary of Twentieth
Century Companies, Inc. (TCC). The Fund pays BMC a monthly investment advisory
fee equal to the following annual percentages of the Fund's average daily net
assets.

.50% of the first $100 million
.45% of the next $100 million
.40% of the next $100 million
.35% of the next $100 million
.30% of the next $100 million
.25% of the next $1 billion
.24% of the next $1 billion
.23% of the next $1 billion
.22% of the next $1 billion
.21% of the next $1 billion
.20% of the next $1 billion
.19% of average daily net assets over $6.5 billion

BMC provides the Fund with all investment advice. TCC pays all compensation of
Fund officers and trustees who are officers or directors of TCC or any of its
subsidiaries. In addition, promotion and distribution expenses are paid by BMC.

The Fund has an Administrative Services and Transfer Agency Agreement with
Benham Financial Services, Inc. (BFS), a wholly owned subsidiary of TCC. Under
the agreement, BFS provides administrative and transfer agency services
necessary to operate the Fund. Fees for these services are based on transaction
volume, number of accounts and average net assets of all funds in The Benham
Group. Effective September 3, 1996, Twentieth Century Services, Inc., a
wholly-owned subsidiary of TCC, replaced BFS in the Administrative Services and
Transfer Agency Agreement. There were no other changes made to the existing
agreement.

The Fund has an additional agreement with BMC pursuant to which BMC established
a contractual expense guarantee that limits Fund expenses (excluding expenses
such as brokerage commissions, taxes, interest, and custodian earnings credits)
to .50% of the Fund's average daily net assets through May 31, 1998. The
agreement provides further that BMC may recover amounts (representing expenses
in excess of the Fund's expense guarantee rate) absorbed during the preceding

11 months, if, and to the extent that, for any given month, the Fund's expenses
are less than the .50% expense guarantee.

The payables to affiliates as of August 31, 1996, based on the above agreements,
were as follows:

Investment Advisor ................................................ $226,208
Administrative Services ........................................... 101,537
Transfer Agent .................................................... 203,465
--------
$531,210
========

The Fund has a distribution agreement with Benham Distributors, Inc. (BDI),
which is responsible for promoting sales of and distributing the Fund's shares.
BMC pays all costs incurred by BDI. BDI is a wholly owned subsidiary of TCC.
Effective September 3, 1996, Twentieth Century Securities, Inc., a wholly-owned
subsidiary of TCC, replaced BDI.

(3) EXPENSE OFFSET ARRANGEMENTS

The Fund's Statement of Operations reflects custodian earnings credits. These
amounts are used to offset the custody fees payable by the Fund to the custodian
bank. The credits are earned when the Fund maintains a balance of uninvested
cash at the custodian bank. Beginning with the year ending February 29, 1996,
the ratios of expenses to average daily net assets shown in the Financial
Highlights are calculated as if these credits had not been earned.

21
<TABLE>
<CAPTION>
BENHAM PRIME MONEY MARKET FUND
SCHEDULE OF INVESTMENT SECURITIES
August 31, 1996
(Unaudited)

Rating
Rate1 Maturity Face Amount Value Moody's/S&P
---- ------ -------- ------- ---------
COMMERCIAL PAPER - 63.6% .............................................
<S> <C> <C> <C> <C> <C>
ABN-AMRO North America Finance Inc. ................................... 5.21% 12/04/96 $ 14,000,000 13,809,180 P1/A-1+
American Express Credit Corp. ......................................... 5.19% 11/12/96 25,000,000 24,735,000 P1/A-1
Associates Corporation North America .................................. 5.19% 10/30/96 30,000,000 29,738,433 P1/A-1
Banque Nationale De Paris (Canada) .................................... 5.19% 11/15/96 10,000,000 9,888,958 P1/A-1
Bass Finance (C.I.) Ltd. .............................................. 5.12% 09/05/96 9,326,000 9,320,456 P1/A-1
BT Securities Corporation ............................................. 5.12% 09/19/96 25,000,000 24,933,750 P1/A-1
Caisse D'Amortissement De La Dette Sociale ............................ 5.13% 09/26/96 32,500,000 32,377,448 P1/A-1+
Chevron Transport Corporation (Acquired 08/29/96; Cost $14,865,038)+ .. 5.18% 10/29/96 15,000,000 14,871,675 P1/A-1+
Chevron U.K. Investment PLC ........................................... 5.12% 09/05/96 30,000,000 29,982,300 P1/A-1+
Chevron U.K. Investment PLC ........................................... 5.16% 10/15/96 10,000,000 9,935,100 P1/A-1+
Dover Corp. ........................................................... 5.12% 09/18/96 6,020,000 6,004,962 NR/A-1
Dover Corp. (Acquired 08/21/96; Cost $5,970,960)+. .................... 5.13% 09/23/96 6,000,000 5,980,640 NR/A-1
Dun & Bradstreet Corp. ................................................ 5.12% 09/18/96 15,300,000 15,261,708 P1/A-1+
Dun & Bradstreet Corp. ................................................ 5.12% 09/20/96 6,000,000 5,983,248 P1/A-1+
Dun & Bradstreet Corp. ................................................ 5.13% 09/26/96 5,715,000 5,694,124 P1/A-1+
Ford Motor Credit Co. ................................................. 5.15% 10/08/96 16,900,000 16,807,942 P1/A-1+
Gannett Co., Inc. (Acquired 07/18/96; Cost $8,876,925)+ ............... 5.16% 10/16/96 9,000,000 8,938,463 P1/A-1
Gannett Co., Inc. (Acquired 07/17/96; Cost $7,730,724)+ ............... 5.18% 10/25/96 7,850,000 7,785,591 P1/A-1
General Electric Capital Corp. ........................................ 5.17% 10/23/96 14,000,000 13,893,024 P1/A-1+
General Electric Capital Corp. ........................................ 5.19% 11/20/96 25,000,000 24,706,111 P1/A-1+
Goldman Sachs Group L.P. .............................................. 5.15% 10/07/96 25,000,000 24,866,250 P1/A-1+
Hitachi Credit America Corp. .......................................... 5.16% 10/17/96 5,495,000 5,457,436 P1/A-1+
IMI Funding Corp. (USA) ............................................... 5.17% 10/18/96 5,420,000 5,382,284 P1/A-1+
IMI Funding Corp. (USA) ............................................... 5.19% 11/04/96 16,500,000 16,338,960 P1/A-1+
Kingdom of Sweden ..................................................... 5.18% 10/25/96 25,000,000 24,802,000 P1/A-1+
Kingdom of Sweden ..................................................... 5.19% 11/15/96 13,500,000 13,354,313 P1/A-1+
Kingdom of Sweden ..................................................... 5.23% 12/16/96 15,000,000 14,764,003 P1/A-1+
</TABLE>

22
<TABLE>

Rating
Rate1 Maturity Face Amount Value Moody's/S&P
---- ------ -------- ------- ---------
COMMERCIAL PAPER (CONTINUED)
<S> <C> <C> <C> <C> <C>
Koch Industries Inc. .................................................. 5.12% 09/17/96 $ 15,100,000 15,064,028 P1/A-1+
Lucent Technologies Inc. .............................................. 5.13% 09/25/96 30,000,000 29,895,000 P1/A-1
Merrill Lynch & Co., Inc. ............................................. 5.12% 09/04/96 10,000,000 9,995,542 P1/A-1+
Mitsubishi International Corp. ........................................ 5.18% 10/28/96 17,500,000 17,352,592 P1/A-1+
Mitsubishi International Corp. ........................................ 5.12% 09/03/96 25,000,000 24,992,611 P1/A-1+
Mitsui & Co. (USA) Inc. ............................................... 5.12% 09/13/96 17,175,000 17,143,913 P1/A-1
Monsanto Company (Acquired 08/16/96; Cost $9,920,650)+ ................ 5.15% 10/09/96 10,000,000 9,944,161 P1/A-1
Morgan Stanley Group, Inc. ............................................ 5.12% 09/03/96 26,000,000 25,992,287 P1/A-1+
National Rural Utilities Cooperative Finance Corp. .................... 5.15% 10/07/96 27,000,000 26,856,360 P1/A-1+
Pemex Capital, Inc. ................................................... 5.12% 09/04/96 15,000,000 14,993,313 P1/A-1
Pemex Capital, Inc. ................................................... 5.17% 10/21/96 10,000,000 9,924,306 P1/A-1+
Pemex Capital, Inc. ................................................... 5.18% 10/28/96 15,000,000 14,873,175 P1/A-1
Principal Mutual Life Insurance Co. ................................... 5.12% 09/10/96 5,000,000 4,993,387 P1/A-1+
Prudential Funding Corporation ........................................ 5.14% 10/03/96 42,000,000 41,802,133 P1/A-1+
Reed Elsevier Inc. (Acquired 07/22/96; Cost $13,874,700)+ ............. 5.12% 09/20/96 14,000,000 13,960,322 P1/A-1+
Sony Capital Corp. .................................................... 5.13% 09/23/96 10,000,000 9,967,183 P1/A-1
Sony Capital Corp. (Acquired 08/19/96; Cost $14,869,708)+ ............. 5.16% 10/17/96 15,000,000 14,898,417 P1/A-1
Southland Corp. ....................................................... 5.13% 09/23/96 6,200,000 6,180,070 P1/A-1+
Statoil-Den Norske Stats Oljeselskap a.s. ............................. 5.14% 09/30/96 25,000,000 24,893,868 P1/A-1+
U.S. West Communications, Inc. ........................................ 5.15% 10/11/96 13,224,000 13,145,831 P1/A-1
Vermont American Corp. (Acquired 08/21/96; Cost $7,061,229)+ .......... 5.12% 09/12/96 7,084,000 7,072,614 P1/A-1+
------------ ------------
Total Commercial Paper (cost $769,554,472) ......................... 773,809,000 769,554,472
------------ ------------

YANKEE CERTIFICATES OF DEPOSIT - 12.8% ................................
Australia & New Zealand Banking Group LTD ............................. 5.38% 10/09/96 25,000,000 25,000,764 P1/A-1
Bank of Nova Scotia ................................................... 5.48% 10/03/96 2,000,000 2,000,214 P1/A-1+
Banque National de Paris S.A. ......................................... 5.43% 09/24/96 20,000,000 20,000,000 P1/A-1
Canadian Imperial Bank of Commerce .................................... 5.40% 11/01/96 13,000,000 13,000,000 P1/A-1+
Canadian Imperial Bank of Commerce .................................... 5.40% 11/05/96 30,000,000 30,000,000 P1/A-1+
National Westminster Bank, PLC (NY Br.) ............................... 5.43% 09/18/96 40,000,000 40,000,187 P1/A-1+
Societe Generale ...................................................... 5.35% 10/02/96 25,000,000 25,000,000 P1/A-1+
------------ ------------
Total Yankee Certificates of Deposit (cost $155,001,165) ........... 155,000,000 155,001,165
------------ ------------
</TABLE>
23
<TABLE>
Rating
Rate(1) Maturity Face Amount Value Moody's/S&P
---- ------ -------- ------- ---------
FLOATING-RATE NOTES - 10.6%
<S> <C> <C> <C> <C> <C>
Bayerische Landesbank Girozentrale, (NY Br.), resets monthly off of
the 1-month LIBOR - .15 with no caps, final maturity 03/03/97 ...... 5.32% 09/01/96-2$ 15,000,000 14,991,942 P1/A-1+
Federal Home Loan Banks, resets daily off of federal funds
rate +.15 with no caps, final maturity 08/01/97 .................... 5.39% 09/03/96-2 25,000,000 25,000,000 P1/A-1+
Federal National Mortgage Association, resets daily off of federal
funds rate -.065 with no caps, final maturity 04/21/97 ............ 5.18% 09/03/96-2 20,000,000 19,979,348 P1/NR
Federal National Mortgage Association, resets daily off of federal
funds rate with no caps, final maturity 04/04/97 ................... 5.24% 09/03/92 10,000,000 9,994,454 P1/NR
General Electric Capital Corp., resets daily off of federal funds
rate + .21 with no caps, final maturity 10/25/96 ................... 5.45% 09/03/96-2 9,730,000 9,731,782 P1/A-1+
J.P. Morgan & Co., Inc., resets daily off of federal funds
rate +.15 with no caps, final maturity 03/21/97 .................... 5.39% 09/03/96-2 10,000,000 10,002,294 P1/A-1+
Student Loan Marketing Assoc., resets quarterly off the
3-month LIBOR + .01 with no caps, final maturity 10/04/96 .......... 5.57% 10/04/96-2 20,000,000 20,000,000 P1/NR
Wachovia Bank of North Carolina, N.A., resets monthly off of
the 1-month LIBOR + .125 with no caps, final maturity 01/03/97 .... 5.32% 09/03/96-2 18,000,000 17,994,277 P1/A-1+
------------ ------------
Total Floating-Rate Notes (cost $127,694,097) ...................... 127,730,000 127,694,097
------------ ------------

U.S. GOVERNMENT AGENCY NOTES - 5.9% ...................................
Federal Home Loan Bank ................................................ 4.12% 10/04/96 4,800,000 4,793,850 P1/A-1+
Federal Home Loan Bank ................................................ 7.92% 01/17/97 10,000,000 10,107,813 P1/A-1+
Federal Home Loan Bank ................................................ 5.05% 02/21/97 25,500,000 25,418,318 P1/A-1+
Federal Home Loan Bank ................................................ 5.30% 03/18/97 10,000,000 9,973,188 P1/A-1+
Federal Home Loan Bank Callable Agency ................................ 5.30% 03/21/97 8,200,000 8,177,974 P1/A-1+
Federal National Mortgage Association ................................. 7.88% 12/20/96 13,350,000 13,462,946 P1/NR
------------ ------------
Total U.S. Government Agency Notes (cost $71,934,089) .............. 71,850,000 71,934,089
------------ ------------

EURODOLLAR CERTIFICATE OF DEPOSIT - 2.5% ..............................
Morgan Guaranty Trust Co., London .................................... 5.75% 09/09/96 20,000,000 20,000,043 P1/A-1+
Kredietbank N.V.. ..................................................... 5.38% 10/08/96 10,000,000 10,000,196 P1/A-1+
------------ ------------
Total Eurodollar Certificate of Deposit (cost $30,000,239) ......... 30,000,000 30,000,239
------------ ------------
</TABLE>

24
<TABLE>
Rating
Rate(1) Maturity Face Amount Value Moody's/S&P
---- ------ -------- ------- ---------
<S> <C> <C> <C> <C> <C>
U.S. TREASURY NOTE - 1.7% .............................................
U.S. Treasury Note (cost $20,126,899) ................................. 6.63% 03/31/97 $ 20,000,000 20,126,899 P1/A-1+
------------ ------------

BANK NOTE - 1.0% ......................................................
Wachovia Bank North Carolina, N.A. (cost $12,866,373). ................ 7.15% 11/07/96 12,830,000 12,866,373 P1/A-1+
------------ ------------

U.S. GOVERNMENT AGENCY DISCOUNT NOTE - 0.9% ...........................
Federal Home Loan Mortgage Corp. (cost $10,937,318) ................... 5.23% 10/10/96 11,000,000 10,937,318 P1/A-1+
------------ ------------

DOMESTIC CERTIFICATE OF DEPOSIT - 0.6% ................................
First Tennessee Bank, N.A. (cost $7,000,000) .......................... 5.33% 09/06/96 7,000,000 7,000,000 P1/A-1
------------ ------------

CORPORATE NOTE - 0.4% .................................................
General Electric Capital Corp (cost $5,036,235) ....................... 8.75% 11/26/96 5,000,000 5,036,235 P1/A-1+
------------ ------------
TOTAL INVESTMENT SECURITIES (COST $1,210,150,887)(3)- 100.0% .......................... $1,214,219,000$1,210,150,887
============ ============

- ---------------------------
1 The rate for Commercial Paper and Agency Discount Notes is the yield to maturity as of August 31, 1996. The rate for all other
securities is the stated coupon rate as of August 31, 1996.
2 These maturity dates represent the next interest rate reset date. This date is used to calculate the Fund's average days to
maturity.
3 Cost for financial reporting and federal income tax purposes is the same.
+ Restricted securities exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. Any resale by the
Fund must be in an exempt transaction, normally to a qualified institutional buyer. The aggregate value for these securities at
August 31, 1996, was $83,451,883, which represents 6.7% of the net assets of the Fund.
</TABLE>

DEFINITIONS

NR - Not Rated

CAP - A predetermined rate that a fixed-income security's coupon will never
exceed, regardless of where the coupon formula resets. A cap limits the
investor's coupon payments, regardless of how high interest rates rise. In
volatile interest rate environments, caps can cause and amplify price
instability for fixed-rate securities. Therefore, it has always been the policy
of the Fund not to purchase floating-rate notes with caps.

RESETS - The frequency with which a fixed-income security's coupon changes,
based on current market conditions or an underlying index. The more frequently a
security resets, the less risk the investor is taking that the coupon will vary
significantly from current market rates.

LIBOR - London Interbank Offered Rate on Eurodollar deposits traded between
banks. LIBOR is a "money market rate." LIBOR is the interest rate that most
banks and corporations track when determining the rate they'll pay to investors
on short-term debt.

FEDERAL FUNDS RATE - The average rate at which the federal funds rate traded in
a given day. The federal funds rate is the rate that banks charge each other for
unsecured overnight loans, and is considered a "money market rate."

- ---------------------------
See the accompanying notes to financial statements.

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TRUSTEES

James M. Benham
Albert A. Eisenstat
Ronald J. Gilson
Myron S. Scholes
Kenneth E. Scott
Ezra Solomon
Isaac Stein
James E. Stowers, III
Jeanne D. Wohlers

OFFICERS

James M. Benham
Chairman of the Board

Maryanne Roepke
Treasurer and Chief Financial Officer

Douglas A. Paul
Vice President, Secretary
and General Counsel

Ann N. McCoid
Controller

Twentieth Century Mutual Funds
and The Benham Group

- ------------------------------

P.O. Box 419200 o Kansas City, Missouri 64141-6200

Person-to-person assistance:
1-800-345-2021 or 816-531-5575

Internet: http://www.twentieth-century.com

For more information on risks, management fees and
expenses, call 1-800-345-2021 for a free prospectus. Read the
prospectus carefully before investing or sending money.