As filed with the Securities and Exchange Commission on September 29, 1995
Registration No. 33-65818
File No. 811-7862
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 2 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY [ X ]
ACT OF 1940
Amendment No. 4 [ X ]
(Check appropriate box or boxes)
CASH RESOURCE TRUST
(Exact name of registrant as specified in charter)
901 East Byrd Street
Richmond, Virginia 23219
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code (804) 782-3647
_______________
PAUL F. COSTELLO, President
Cash Resource Trust
901 East Byrd Street
Richmond, Virginia 23219
(Name and address of agent for service)
_________________
Copy to:
TIMOTHY W. DIGGINS, Esquire
ROPES & GRAY
One International Place
Boston, Massachusetts 02110
______________
It is proposed that this filing will become effective (check appropriate box):
[ X ] immediately upon filing pursuant to paragraph (b)
[ ] on September , 1995 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Cash Resource Trust registered an indefinite amount of securities under
the Securities Act of 1933 pursuant to Rule 24f-2 of the Investment Company Act
of 1940 and filed a Rule 24f-2 notice on September 25, 1995.
<PAGE>
CASH RESOURCE TRUST
CROSS REFERENCE SHEET
(as required by Rule 404(c))
Part A
N-1A Item No. Location
1. Cover Page Cover Page
2. Synopsis Cover Page; Expense
summary
3. Condensed Financial Information Expense summary
4. General Description of Registrant Cover Page; Investment
objectives; Selection of
investments; Risk factors; Other
investment practices; How a
fund's performance is calculated;
General information about the Trust
5. Management of the Fund Investment objectives; The
Trust's management; Distribution
services; General information about
the Trust
5A. Management's Discussion
of Fund Performance Not Applicable
6. Capital Stock and Other
Securities Buying and selling of shares of the
Funds; Dividends; Certain tax
matters; General information
about the Trust
7. Purchase of Securities Being
Offered Buying and selling of shares of the
Funds; How to exchange shares
8. Redemption or Repurchase Buying and selling of shares of
Funds; How to exchange shares;
Financial Institutions
9. Pending Legal Proceedings Not Applicable
Part B
N-1A Item No. Location
10. Cover Page Cover Page
11. Table of Contents Cover Page
12. General Information and History Not Applicable
13. Investment Objectives and
Policies Investment Objectives and Policies
of the Trust; Investment
Restrictions; Portfolio Turnover
14. Management of the Fund Management of the Trust
15. Control Persons and Principal
Holders of Securities Management of the Trust
16. Investment Advisory and Other
Services Management of the Trust; Principal
Underwriter; Custodian; Independent
Auditors; Experts
17. Brokerage Allocation Management of the Trust (Brokerage
and Research Services; Brokerage
Commissions)
18. Capital Stock and Other
Securities Determination of Net Asset Value;
Taxes; Dividends and Distributions;
Distribution; Organization and
Capitalization
19. Purchase, Redemption and Pricing
of Securities Being Offered Management of the Trust;
Determination of Net Asset Value;
Distribution
20. Tax Status Investment Objectives and
Policies of the Trust; Taxes;
Dividends and Distributions
21. Underwriters Management of the Trust; Principle
Underwriter
22. Calculations of Yield Quotations
of Money Market Funds Performance Information
23. Financial Statements Financial Statements
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of the Registration Statement.
<PAGE>
P R O S P E C T U S September 29, 1995
Cash Resource Trust
Cash Resource Money Market Fund, Cash Resource U.S. Government Money Market
Fund, and Cash Resource Tax-Exempt Money Market Fund are designed for investors
who seek current income consistent with preservation of capital and maintenance
of liquidity. The Funds are diversified investment portfolios of Cash Resource
Trust (the "Trust"), an open-end, management investment company.
AN INVESTMENT IN THE TRUST IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT A FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
This Prospectus explains concisely what you should know before investing in
the Trust. Please read it carefully and keep it for future reference. YOU CAN
FIND MORE DETAILED INFORMATION ABOUT THE TRUST IN THE SEPTEMBER 29, 1995
STATEMENT OF ADDITIONAL INFORMATION, AS AMENDED FROM TIME TO TIME. FOR A FREE
COPY OF THE STATEMENT, CALL 1-800-382-0016. The Statement has been filed with
the Securities and Exchange Commission and is incorporated into this Prospectus
by reference.
SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
EXPENSE SUMMARY
Expenses are one of several factors to consider when investing in a Fund.
The following table summarizes your maximum transaction costs from an investment
in each of the Funds and expenses incurred by each Fund based on its most recent
fiscal year. The Examples show the cumulative expenses attributable to a
hypothetical $1,000 investment in each Fund over specified periods.
<TABLE>
<CAPTION>
CASH
CASH CASH RESOURCE RESOURCE
RESOURCE U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees .22% .21% .22%
12b-1 Fees .38% .38% .33%
Other Expenses .22% .29% .19%
Total Fund Operating Expenses .82% .88% .74%
</TABLE>
EXAMPLES
Your investment of $1,000 in a Fund would incur the following expenses,
assuming 5% annual return and redemption at the end of each period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Cash Resource Money Market Fund $8 $27 $46 $101
Cash Resource U.S. Government Money
Market Fund $9 $27 $49 $108
Cash Resource Tax-Exempt Money Market
Fund $8 $24 $41 $ 92
</TABLE>
The table is provided to help you understand the expenses of investing in
each of the Funds and your share of the operating expenses which each of the
Funds incurs. The table and Examples are based on the Funds' expenses for their
last fiscal year, except that the Management Fees for Cash Resource Tax-Exempt
Money Market Fund reflect the termination by Commonwealth Investment Counsel,
Inc. of a voluntary waiver of a portion of its management fee. Actual Management
Fees and Total Fund Operating Expenses for the Fund were .20% and .72%,
respectively. The Examples do not represent past or future expense levels.
Actual returns and expenses may be greater or less than those shown. Federal
regulations require the Examples to assume a 5% annual return, but actual annual
return will vary. Because of the 12b-1 fees payable by the Funds, long-term
shareholders may pay more in aggregate sales charges than the maximum initial
sales charge permitted by the National Association of Securities Dealers, Inc.
FINANCIAL HIGHLIGHTS
The financial highlights presented below for the Trust have been audited by
KPMG Peat Marwick LLP, independent auditors. The report of KPMG Peat Marwick LLP
is contained in the Statement of Additional Information, which may be obtained
in the manner described on the cover page of this Prospectus. Each of the Funds
began operations on December 20, 1993. See "Financial Statements" in the
Statement of Additional Information.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MONEY MARKET U.S. GOVERNMENT TAX-EXEMPT
FUND MONEY MARKET FUND MONEY MARKET FUND
YEAR ENDED JULY 31, 1995 1994* 1995 1994* 1995 1994*
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations
Net investment income** 0.05 0.02 0.05 0.02 0.03 0.01
Distributions
Net investment income** (0.05) (0.02) (0.05) (0.02) (0.03) (0.01)
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN 4.97% 1.83% 4.82% 1.82% 3.05% 1.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $422,657 $192,260 $1,216,690 $907,819 $266,895 $195,702
Ratio of expenses to average net
assets 0.82% 0.89%(a) 0.88% 0.80%(a) 0.72% 0.65%(a)
Ratio of expenses to average net
assets excluding waivers 0.82% 0.93%(a) 0.88% 0.83%(a) 0.74% 0.74%(a)
Ratio of net investment income to
average net assets 4.96% 2.96%(a) 4.75% 2.91%(a) 3.01% 1.87%(a)
</TABLE>
* For the period from December 20, 1993 (commencement of operations) to
July 31, 1994.
** Includes net realized capital gain (loss) which were under $0.01 per
share.
(a) Annualized.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is to seek as high a rate of current
income (or, in the case of Cash Resource Tax-Exempt Money Market Fund, as high a
rate of current income exempt from federal income tax) as its investment adviser
believes is consistent with preservation of capital and maintenance of
liquidity. The Funds seek their objectives through the investment policies
described below. Because each of the Funds is a money market fund, it will only
invest in the types of investments described below under "Selection of
Investments".
The investment objective and policies of each Fund may, unless otherwise
specifically stated, be changed by the Trustees without a vote of the
shareholders. As a matter of policy, the Trustees would not materially change
the investment objective of a Fund without shareholder approval. None of the
Funds is intended to be a complete investment program, and there is no assurance
the Funds will achieve their objectives.
Commonwealth Advisors, Inc. ("Commonwealth Advisors") serves as the
investment manager to each of the Funds. Commonwealth Investment Counsel, Inc.
("Commonwealth Investment Counsel"), an affiliate of
Commonwealth Advisors, serves as sub-adviser to the Funds, implementing a
continuing investment program for each of the Funds. (Prior to June, 1995,
Commonwealth Advisors was know as Cambridge Investment Advisors, Inc.)
CASH RESOURCE MONEY MARKET FUND
Cash Resource Money Market Fund invests in a portfolio of high-quality
money market instruments consisting exclusively of:
(Bullet) BANK CERTIFICATES OF DEPOSIT (CD'S): negotiable certificates
issued against funds deposited in a commercial bank for a definite
period of time and earning a specified return.
(Bullet) BANKERS' ACCEPTANCES: negotiable drafts or bills of exchange,
which have been "accepted" by a bank, meaning, in effect, that the
bank has unconditionally agreed to pay the face value of the
instrument on maturity.
(Bullet) PRIME COMMERCIAL PAPER: high-grade, short-term obligations issued
by banks, corporations, and other issuers.
(Bullet) CORPORATE OBLIGATIONS: high-grade, short-term obligations other
than prime commercial paper.
(Bullet) U.S. GOVERNMENT SECURITIES: marketable securities issued or
guaranteed as to principal or interest by the U.S. Government or
by its agencies or instrumentalities.
(Bullet) REPURCHASE AGREEMENTS: with respect to U.S. Treasury or U.S.
Government securities.
CASH RESOURCE U.S. GOVERNMENT MONEY MARKET FUND
Cash Resource U.S. Government Money Market Fund invests exclusively in U.S.
Treasury bills, notes, and bonds, and other obligations issued or guaranteed as
to principal or interest by the U.S. Government, its agencies, or
instrumentalities, and in repurchase agreements with respect to such
obligations. Certain of these obligations, including U.S. Treasury bills, notes,
and bonds, mortgage participation certificates issued or guaranteed by the
Government National Mortgage Association, and Federal Housing Administration
debentures, are supported by the full faith and credit of the United States.
Other U.S. Government securities issued by federal agencies or
government-sponsored enterprises are not supported by the full faith and credit
of the United States. These securities include obligations supported by the
right of the issuer to borrow from the U.S. Treasury, such as obligations
of Federal Home Loan Banks, and obligations supported only by the credit of an
instrumentality, such as Federal National Mortgage Association bonds.
Short-term U.S. Government obligations generally are considered among the
safest short-term investments. Because of their added safety, the yields
available from U.S. Government obligations are generally lower than the yields
available from comparable corporate debt securities. The U.S. Government
guarantee of the securities owned by the Fund does not guarantee the net asset
value of the Fund's shares, which the Fund seeks to maintain at $1.00 per share.
CASH RESOURCE TAX-EXEMPT MONEY MARKET FUND
Cash Resource Tax-Exempt Money Market Fund invests, as a fundamental
policy, at least 80% of its net assets in Tax-Exempt Securities (as described
below). The Fund may invest the remainder of its assets in investments of any
kind in which either of the other Funds may invest.
The Fund will invest in only the following tax-exempt securities: (i)
municipal notes; (ii) municipal bonds; (iii) municipal securities backed by the
U.S. Government or any of its agencies or instrumentalities; (iv) short-term
discount notes (tax-exempt commercial paper); (v) participation interests in any
of the foregoing; and (vi) unrated securities or new types of tax-exempt
instruments which become available in the future if Commonwealth Investment
Counsel determines they meet the quality standards discussed below
(collectively, "Tax-Exempt Securities"). (In the case of any such new types of
tax-exempt instruments, this Prospectus would be revised as may be appropriate
to describe such instruments.) In connection with the purchase of Tax-Exempt
Securities, the Fund may acquire stand-by commitments, which give the Fund the
right to resell the security to the dealer at a specified price. Stand-by
commitments may provide additional liquidity for the Fund but are subject to the
risk that the dealer may fail to meet its obligations. The Fund does not
generally expect to pay additional consideration for stand-by commitments or to
assign any value to them.
TAX-EXEMPT SECURITIES are debt obligations issued by a state (including the
District of Columbia), a U.S. territory or possession, or any of their political
subdivisions, the interest from which is, in the opinion of bond counsel, exempt
from federal income tax. These securities are issued to obtain funds for various
public purposes, such as the construction of public facilities, the payment of
general operating expenses, or the refunding of outstanding debts. They may also
be issued to finance various private activities, including the lending of funds
to public or private institutions for the construction of housing, educational,
or medical facilities and may also include certain types of private activity and
industrial development bonds issued by public authorities to finance privately
owned or operated facilities. Short-term Tax-Exempt Securities are generally
issued as interim financing in anticipation of tax collections, revenue
receipts, or bond sales to finance various public purposes.
The two principal classifications of Tax-Exempt Securities are general
obligation and limited obligation (or revenue) securities. GENERAL OBLIGATION
securities involve the credit of an issuer possessing taxing power and are
payable from the issuer's general unrestricted revenues. Their payment may
depend on an appropriation by the issuer's legislative body. The characteristics
and methods of enforcement of general obligation securities vary according to
the law applicable to the particular issuer. LIMITED OBLIGATION securities are
payable only from the revenues derived from a particular facility or class of
facilities, or a specific revenue source, and generally are not payable from the
unrestricted revenues of the issuer. Industrial development and private activity
bonds are in most cases limited obligation securities, the credit quality of
which is directly related to the corporate user of the facilities.
For purposes of the fundamental policy of the Fund to invest at least 80%
of its assets in Tax-Exempt Securities, the Fund will not treat obligations as
Tax-Exempt Securities for purposes of measuring compliance
with such policy if they would give rise to interest income subject to federal
alternative minimum tax for individuals. To the extent that the Fund invests in
these securities, individual shareholders of the Fund, depending on their own
tax status, may be subject to federal alternative minimum tax on the part of the
Fund's distributions derived from these securities. In addition, an investment
in the Fund may cause corporate shareholders to be subject to (or result in an
increased liability under) the alternative minimum tax because a portion of
tax-exempt income is generally included in alternative minimum taxable income.
SELECTION OF INVESTMENTS
Each Fund will invest only in U.S. dollar-denominated high-quality
securities and other U.S. dollar-denominated money market instruments meeting
credit criteria which the Trustees believe present minimal credit risk.
"High-quality securities" are (i) commercial paper or other short-term
obligations rated in one of the two highest short-term rating categories by at
least two nationally recognized rating services (or, if only one rating service
has rated the security, by that service), (ii) obligations rated at least AA by
Standard & Poor's Corporation or Aa by Moody's Investors Services, Inc. at the
time of investment, and (iii) unrated securities determined by Commonwealth
Investment Counsel to be of comparable quality, subject to the overall
supervision of the Trustees. Each Fund will maintain a dollar-weighted average
maturity of 90 days or less and will not invest in securities with remaining
maturities of more than 397 days. A Fund may invest in variable or floating-rate
securities which bear interest at rates subject to periodic adjustment or which
provide for periodic recovery of principal on demand. Under certain conditions,
these securities may be deemed to have remaining maturities equal to the time
remaining until the next interest adjustment date or the date on which principal
can be recovered on demand. Cash Resource Money Market Fund will not invest more
than 5% (determined at the time of investment) of its total assets in securities
rated below the highest applicable rating category, nor will it purchase
securities of any issuer if, immediately thereafter, more than 5% of the Fund's
total assets would be invested in securities of that issuer. Each of the Funds
follows investment and valuation policies designed to maintain a stable net
asset value of $1.00 per share, although there is no assurance that these
policies will be successful.
Considerations of liquidity and preservation of capital mean that a Fund
may not necessarily invest in money market instruments paying the highest
available yield at a particular time. Consistent with its investment objective,
a Fund will attempt to maximize yields by portfolio trading and by buying and
selling portfolio investments in anticipation of or in response to changing
economic and money market conditions and trends. Each Fund may also invest to
take advantage of what Commonwealth Investment Counsel believes to be temporary
disparities in yields of different segments of the high-grade money market or
among particular instruments within the same segment of the market. These
policies, as well as the relatively short maturity of obligations purchased by
the Funds, may result in frequent changes in the Funds' portfolios. The Funds
will not usually pay brokerage commissions in connection with the purchase or
sale of portfolio securities.
The portfolio of a Fund will be affected by general changes in interest
rates resulting in increases or decreases in the values of the obligations held
by the Fund. Although the Funds' investment policies are designed to minimize
these changes and to maintain a net asset value of $1.00 per share, there is no
assurance that these policies will be successful. Withdrawals by shareholders
could require the sale of portfolio investments at a time when such a sale might
not otherwise be desirable.
RISK FACTORS
INTEREST RATES. The portfolio of a Fund will be affected by general changes
in interest rates resulting in increases or decreases in the value of the
obligations held by the Fund. The value of the securities in a Fund's
portfolio can be expected to vary inversely to the changes in prevailing
interest rates. Withdrawals by shareholders could require the sale of portfolio
investments at a time when such a sale might not otherwise be desirable.
CONCENTRATION. CASH RESOURCE MONEY MARKET FUND may invest without limit in
obligations of domestic branches of U.S. banks and U.S. branches of foreign
banks (if it can be demonstrated that they are subject to the same regulations
as U.S. banks). At times when the Fund has concentrated its investments in bank
obligations, the value of its portfolio securities may be especially affected by
factors pertaining to the issuers of such obligations.
CASH RESOURCE TAX-EXEMPT MONEY MARKET FUND will not invest more than 25% of
its total assets in any one industry. Governmental issuers of Tax-Exempt
Securities are not considered part of any "industry." However, Tax-Exempt
Securities backed only by the assets and revenues of nongovernmental users may
for this purpose be deemed to be issued by such nongovernmental users, and the
25% limitation would apply to such obligations.
It is nonetheless possible that the Fund may invest more than 25% of its
assets in a broader segment of the Tax-Exempt Securities market, such as revenue
obligations of hospitals and other health care facilities, housing agency
revenue obligations, or airport revenue obligations. This would be the case only
if Commonwealth Investment Counsel determined that the yields available from
obligations in a particular segment of the market justified the additional risks
associated with such concentration. Although such obligations could be supported
by the credit of governmental users or by the credit of nongovernmental users
engaged in a number of industries, economic, business, political, and other
developments generally affecting the revenues of such users (for example,
proposed legislation or pending court decisions affecting the financing of such
projects and market factors affecting the demand for their services or products)
may have a general adverse effect on all Tax-Exempt Securities in such a market
segment.
The Fund reserves the right to invest more than 25% of its assets in
industrial development bonds and private activity bonds or notes. The Fund also
reserves the right to invest more than 25% of its assets in securities relating
to one or more states (including the District of Columbia), U.S. territories or
possessions, or any of their political subdivisions. As a result of such an
investment, the performance of the Fund may be especially affected by factors
pertaining to the economy of the relevant state and other factors specifically
affecting the ability of issuers of such securities to meet their obligations.
As a result, the value of the Fund's shares may fluctuate more widely than the
value of shares of a fund investing in securities relating to a greater number
of different states. The ability of governmental issuers to meet their
obligations will depend primarily on the availability of tax and other revenues
to those governments and on their fiscal conditions generally. The amounts of
tax and other revenues available to governmental issuers may be affected from
time to time by economic, political, and demographic conditions affecting a
particular state. In addition, constitutional or statutory restrictions may
limit a government's power to raise revenues or increase taxes. The availability
of federal, state, and local aid to issuers of such securities may also affect
their ability to meet their obligations. Payments of principal and interest on
limited obligation securities will depend on the economic condition of the
facility or specific revenue source from whose revenues the payments will be
made, which in turn could be affected by economic, political, and demographic
conditions affecting a particular state. Any reduction in the actual or
perceived ability of an issuer of Tax-Exempt Securities in a particular state to
meet its obligations (including a reduction in the rating of its outstanding
securities) would likely adversely affect the market value and marketability of
its obligations and could adversely affect the values of Tax-Exempt Securities
issued by others in that state as well.
OTHER INVESTMENT PRACTICES
A FUND MAY ALSO ENGAGE TO A LIMITED EXTENT IN THE FOLLOWING INVESTMENT
PRACTICES, EACH OF WHICH INVOLVES CERTAIN SPECIAL RISKS. THE STATEMENT OF
ADDITIONAL INFORMATION CONTAINS MORE DETAILED INFORMATION ABOUT THESE PRACTICES.
FOREIGN INVESTMENTS. Cash Resource Money Market Fund may invest in
commercial paper of foreign issuers and in bank certificates of deposit and
bankers' acceptances payable in U.S. dollars and issued by foreign banks
(including U.S. branches of foreign banks) or by foreign branches of U.S. banks.
These investments subject the Fund to investment risks different from those
associated with domestic investments. Such risks include adverse political and
economic developments in such countries, the imposition of withholding taxes of
interest income, seizure or nationalization of foreign deposits, or the adoption
of other governmental restrictions which may adversely affect the payment of
principal and interest on such obligations. Legal remedies available to
investors in certain foreign countries may be more limited than those available
with respect to investments in the U.S. or in other foreign countries. Foreign
settlement procedures and trade regulations may involve certain risks (such as
delay in payment or delivery of securities or in the recovery of the Fund's
assets held abroad) and expenses not present in the settlement of domestic
investments. In addition, foreign securities may be less liquid than U.S.
securities, and foreign accounting and disclosure standards may differ from U.S.
standards. Special tax considerations apply to foreign securities.
REPURCHASE AGREEMENTS. Under a repurchase agreement, a Fund purchases a
debt instrument for a relatively short period (usually not more than one week),
which the seller agrees to repurchase at a fixed time and price, representing
the Fund's cost plus interest. A Fund will enter into repurchase agreements only
with commercial banks and with registered broker-dealers who are members of a
national securities exchange or market makers in government securities, and only
if the debt instrument subject to the repurchase agreement is a U.S. Government
security. Although Commonwealth Investment Counsel will monitor repurchase
agreement transactions to ensure that they will be fully collateralized at all
times, a Fund bears a risk of loss if the other party defaults on its obligation
and the Fund is delayed or prevented from exercising its rights to dispose of
the collateral. If the other party should become involved in bankruptcy or
insolvency proceedings, it is possible that a Fund may be treated as an
unsecured creditor and required to return the underlying collateral to the other
party's estate.
SECURITIES LENDING. A Fund may lend portfolio securities to broker-dealers.
These transactions must be fully collateralized at all times with cash or
short-term debt obligations, but involve some risk to a Fund if the other party
should default on its obligation and the Fund is delayed or prevented from
recovering the collateral. Any investment of collateral by a Fund would be made
in accordance with the Fund's investment objective and policies described above.
DIVIDENDS
THE TRUST DETERMINES THE NET INCOME OF EACH FUND AS OF THE CLOSE OF REGULAR
TRADING ON THE NEW YORK STOCK EXCHANGE (THE "EXCHANGE") EACH DAY THE EXCHANGE IS
OPEN. Each determination of a Fund's net income includes (i) all accrued
interest on the Fund's investments, (ii) plus or minus all realized and
unrealized gains and losses on the Fund's investments, (iii) less all accrued
expenses of the Fund. Each Fund's investments are valued at amortized cost
according to Securities and Exchange Commission Rule 2a-7. A Fund will not
normally have unrealized gains or losses so long as it values its investments by
the amortized cost method.
DAILY DIVIDENDS. Each Fund declares all of its net interest income as a
distribution on each day it is open for business, as a dividend to shareholders
of record immediately prior to the close of regular trading on the Exchange.
Shareholders who purchase shares of a Fund at or before 12:00 noon on any day
will receive the dividend declared by the Fund for that day; shareholders who
purchase shares after 12:00 noon will begin earning dividends on the day after
the Fund accepts their order. A Fund's net income for Saturdays, Sundays, and
holidays is declared as a dividend on the preceding business day. Dividends for
the immediately preceding month will be paid on the fifteenth day of each
calendar month (or, if that day is not a business day, on the next business
day), except that a Fund's schedule for payment of dividends during the month of
December may be adjusted to assist in tax reporting and distribution
requirements. A shareholder who withdraws the entire balance of an account at
any time during the month will be paid all dividends declared through the time
of the withdrawal. Since the net income of each Fund is declared as a dividend
each time it is determined, the net asset value per share of each Fund normally
remains at $1 per share immediately after each determination and dividend
declaration.
YOU CAN CHOOSE FROM TWO DISTRIBUTION OPTIONS: (1) automatically reinvest
all distributions from a Fund in additional shares of that Fund; or (2) receive
all distributions in cash. If you wish to change your distribution option, you
should contact your Financial Institution (as defined below), who will be
responsible for forwarding the necessary instructions to the Trust's transfer
agent, Investors Fiduciary Trust Company ("IFTC"). If you do not select an
option when you open your account, all distributions will be reinvested. You
will receive a statement confirming reinvestment of distributions in additional
shares of a Fund promptly following the month in which the reinvestment occurs.
CERTAIN TAX MATTERS. Each Fund intends to qualify as a "regulated
investment company" for federal income tax purposes and to meet all other
requirements that are necessary for it to be relieved of federal income taxes on
income (and gains, if any) it distributes to shareholders. Each Fund will
distribute substantially all of its ordinary income (and net capital gains, if
any) on a current basis.
Dividends paid by Cash Resource Tax-Exempt Money Market Fund that are
derived from exempt-interest income (known as "exempt-interest dividends") and
that are designated as such may be treated by the Fund's shareholders as items
of interest excludable from their federal gross income. (Shareholders should
consult their own tax adviser with respect to whether exempt-interest dividends
would be excludable from gross income if the shareholder were treated as a
"substantial user" of facilities financed by an obligation held by Cash Resource
Tax-Exempt Money Market Fund or a "related person" to such user under the
Internal Revenue Code.) If a shareholder receives an exempt-interest dividend
with respect to any share held for six months or less, any loss on the sale or
exchange of that share will be disallowed to the extent of the amount of the
exempt-interest dividend. To the extent dividends paid to shareholders are
derived from taxable income (for example, from interest on certificates of
deposit) or from gains, such dividends will be subject to federal income tax,
whether they are paid in the form of cash or additional shares. Early in each
year the Fund will notify you of the amount and tax status of distributions paid
to you by the Fund for the preceding year.
If Cash Resource Tax-Exempt Money Market Fund holds certain "private
activity bonds" ("industrial development bonds" under prior law), dividends
derived from interest on such obligations will be classified as an item of tax
preference which could subject certain shareholders to alternative minimum tax
liability. Corporate shareholders must also take all exempt-interest dividends
into account in determining "adjusted current earnings" for purposes of
calculating their alternative minimum tax liability.
Shareholders receiving Social Security benefits or Railroad Retirement Act
benefits should note that all exempt-interest dividends will be taken into
account in determining the taxability of such benefits.
The foregoing is a summary of certain federal income tax consequences of
investing in the Funds. You should consult your tax adviser to determine the
precise effect of an investment in each Fund on your particular tax situation.
BUYING AND SELLING SHARES OF THE FUNDS
HOW TO BUY SHARES. The Trust offers shares of the Funds continuously at a
price of $1.00 per share. The Trust determines net asset value twice each day,
as of 12:00 noon and as of the close of regular trading on the Exchange. The
shares of each Fund are sold at net asset value through a number of selected
financial institutions, such as investment dealers and banks (each, a "Financial
Institution"). Your Financial Institution is responsible for forwarding any
necessary documentation to IFTC. There is no sales charge on sales of shares,
nor is any minimum investment required for any of the Funds.
Because each Fund seeks to be fully invested at all times, investments must
be in Same Day Funds to be accepted. Investments which are accepted at or before
12:00 noon will be invested at the net asset value determined at that time;
investments accepted after 12:00 noon will receive the net asset value
determined at the close of regular trading on the Exchange. "Same Day Funds" are
funds credited by the applicable regional Federal Reserve Bank to the account of
the Trust at its designated bank. When payment in Same Day Funds is available to
the Trust, the Trust will accept the order to purchase shares at the net asset
value next determined.
If you are considering redeeming shares or transferring shares to another
person shortly after purchase, you should pay for those shares with wired Same
Day Funds or a certified check to avoid any delay in redemption or transfer.
Otherwise, the Trust may delay payment for shares until the purchase price of
those shares has been collected which may be up to 15 calendar days after the
purchase date.
For more information on how to purchase shares of the Funds, contact your
Financial Institution or Mentor Distributors, Inc. ("Mentor Distributors"), 901
East Byrd Street, Richmond, Virginia 23219, the principal underwriter of the
Trust's shares. Mentor Distributors' telephone number is 1-800-382-0016.
HOW TO SELL SHARES. You can redeem your Fund shares through your Financial
Institution any day the Exchange is open, or you may redeem your shares by check
or by mail. Redemption will be effected at the net asset value per share of the
Fund next determined after receipt of the redemption request in good order. The
Trust must receive your properly completed purchase documentation before you may
sell shares.
SELLING SHARES THROUGH YOUR FINANCIAL INSTITUTION. You may redeem your
shares through your Financial Institution. Your Financial Institution is
responsible for delivering your redemption request and all necessary
documentation to the Trust, and may charge you for its services (including, for
example, charges relating to the wiring of funds). Your Financial Institution
may accept your redemption instructions by telephone. Consult your Financial
Institution.
SELLING SHARES BY CHECK. If you would like the ability to write checks
against your investment in the Trust, you should provide the necessary
documentation to your Financial Institution and complete the signature card
which you may obtain by calling your Financial Institution or the Trust. When
the Trust receives your properly completed documentation and card, you will
receive checks drawn on your Trust account and payable through the Trust's
designated bank. These checks may be made payable to the order of any person.
You will continue to earn dividends until the check clears. When a check is
presented for payment, a sufficient number of full and fractional shares of the
Trust in your account will be redeemed to cover the amount of the check. Your
Financial Institution may limit the availability of the check-writing privilege
or assess certain fees in connection with the checkwriting privilege.
Shareholders using Trust checks are subject to the Trust's designated
bank's rules governing checking accounts. There is currently no charge to the
shareholder for the use of checks, although one may be imposed in the future.
Shareholders would be notified in advance of the imposition of any such charge.
(In addition, if you deplete your original check supply, there may be a charge
to order additional checks.) You should make sure that there are sufficient
shares in your account to cover the amount of the check drawn. If there is an
insufficient number of shares in the account, the check will be dishonored and
returned, and no shares will be redeemed. Because dividends declared on shares
held in your account and prior withdrawals may cause the value of your account
to change, it is impossible to determine in advance your account's total value.
Accordingly, you should not write a check for the entire value of your account
or close your account by writing a check. A shareholder may revoke check-writing
authorization by written notice to IFTC.
SELLING SHARES BY MAIL. You may also sell shares of a Fund by sending a
written withdrawal request to IFTC. You must sign the withdrawal request and
include a stock power with signature(s) guaranteed by a bank, broker/dealer, or
certain other financial institutions.
IFTC may require additional documentation from shareholders which are
corporations, partnerships, agents, fiduciaries or surviving joint owners.
Corporations, partnerships, agents, trusts, and fiduciary accounts must submit a
completed resolution in proper form before selling shares. Resolution forms are
available from IFTC and Mentor Distributors.
THE TRUST GENERALLY SENDS YOU PAYMENT FOR YOUR SHARES THE BUSINESS DAY
AFTER YOUR REQUEST IS RECEIVED. Under unusual circumstances, the Trust may
suspend repurchases, or postpone payment for more than seven days, as permitted
by federal securities law.
HOW TO EXCHANGE SHARES
You can exchange your shares in any Fund for shares of any other Fund in
the Trust at net asset value, except as described below. Your Financial
Institution will be responsible for forwarding the necessary documentation to
IFTC. Exchange Authorization Forms are available from your Financial Institution
or Mentor Distributors. For federal income tax purposes, an exchange is treated
as a sale of shares and generally results in a capital gain or loss. The Trust
reserves the right to change or suspend the exchange privilege at any time.
Shareholders would be notified of any change or suspension. Consult your
Financial Institution or Mentor Distributors before requesting an exchange.
FINANCIAL INSTITUTIONS
Financial Institutions provide varying arrangements for their clients with
respect to the purchase and redemption of Trust shares and the confirmation
thereof and may arrange with their clients for other investment or
administrative services. When you effect transactions with the Trust (including
among other things the purchase, redemption, or exchange of Fund shares) through
a Financial Institution, the Financial Institution, and not the Trust, will be
responsible for taking all steps, and furnishing all necessary documentation, to
effect such transactions. Financial Institutions have the responsibility to
deliver purchase and redemption requests to the Trust promptly. Some Financial
Institutions may establish minimum investment requirements with respect to the
Trust or any Fund. They may also establish and charge fees and other amounts to
their client for their services. Certain privileges, such as the check writing
privilege or reinvestment options, may not be available through certain
Financial Institutions or they may be available only under certain conditions.
YOUR FINANCIAL INSTITUTION MAY CHARGE FEES TO OR IMPOSE RESTRICTIONS ON YOUR
SHAREHOLDER ACCOUNT. CONSULT YOUR FINANCIAL INSTITUTION FOR INFORMATION ABOUT
ANY FEES OR RESTRICTIONS OR FOR FURTHER INFORMATION CONCERNING ITS SERVICES.
THE TRUST'S MANAGEMENT
The Trustees are responsible for generally overseeing the conduct of the
Trust's business. COMMONWEALTH ADVISORS, INC. serves as investment manager to
each of the Funds, providing investment advisory services and advising and
assisting the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of the Trustees. COMMONWEALTH INVESTMENT
COUNSEL, INC., an affiliate of Commonwealth Advisors, serves as a sub-adviser to
each of the Funds pursuant to a sub-advisory agreement among Commonwealth
Advisors, Commonwealth Investment Counsel, and the Trust. Subject to such
policies as the Trustees may determine, Commonwealth Investment Counsel
furnishes a continuing investment program for the Funds and makes investment
decisions on their behalf. Commonwealth Advisors and Commonwealth Investment
Counsel are wholly owned subsidiaries of Mentor Investment Group, Inc., which is
in turn a wholly owned subsidiary of Wheat First Butcher Singer, Inc., a
diversified financial services holding company. Commonwealth Advisors also
serves as investment adviser to the Mentor Capital Growth, Mentor Income and
Growth, Mentor Quality Income, and Mentor Municipal Income Portfolios, each of
which is a series of shares of beneficial interest of The Mentor Funds, an
open-end series investment company. Commonwealth Investment Counsel serves as
investment adviser to the Mentor Short-Duration Income Portfolio and Mentor
Balanced Portfolio, each of which is a series of shares of beneficial interest
of The Mentor Funds, the Mentor Fixed-Income, Mentor Intermediate Duration, and
Mentor Cash Management Portfolios, each of which is a series of shares of
beneficial interest of Mentor Institutional Trust, an open-end series investment
company, and Mentor Income Fund, Inc., a closed-end investment company. The
address of Commonwealth Advisors and Commonwealth Investment Counsel is 901 East
Byrd Street, Richmond, Virginia 23219.
Each Fund pays management fees to Commonwealth Advisors monthly at the
following annual rates (based on the assets of the Fund): 0.22% of the first
$500 million of the Fund's average net assets; 0.20% of the next $500 million;
0.175% of the next $1 billion; 0.16% of the next $1 billion; and 0.15% of any
amounts over $3 billion. Commonwealth Advisors in turn pays fees from its own
assets to Commonwealth Investment Counsel monthly at the following annual rates
(based on the assets of each Fund taken separately): 0.17% of the first $500
million of a Fund's average net assets; 0.15% of the next $500 million; 0.125%
of the next $1 billion; 0.11% of the next $1 billion; and 0.10% of any amounts
over $3 billion. Commonwealth Advisors and Commonwealth Investment Counsel may
from time to time voluntarily agree to reduce their compensation (and, if
necessary, to pay certain expenses) with respect to one or more Funds to the
extent that a Fund's expenses (other than Commonwealth Advisors' compensation,
brokerage, interest, taxes, deferred organizational expenses, payments required
under the Fund's Distribution Plan, and extraordinary expenses) exceed an annual
rate of the Fund's average net assets specified by Commonwealth Advisors.
The Trust pays all expenses not assumed by Commonwealth Advisors, including
Trustees' fees, auditing, legal, custodial, investor servicing, and shareholder
reporting expenses, and payments under its Distribution Plans. General expenses
of the Trust will be charged to the assets of each Fund on a basis that the
Trustees deem fair and equitable, which may be based on the relative assets of
each Fund or the nature of the services performed and relative applicability to
each Fund. Expenses directly charged or attributable to a Fund will be paid from
the assets of that Fund.
Commonwealth Investment Counsel places all orders for purchases and sales
of the securities of each Fund. In selecting broker-dealers, Commonwealth
Investment Counsel may consider research and brokerage services furnished to it
and its affiliates. Subject to seeking the most favorable price and execution
available, Commonwealth Investment Counsel may consider sales of shares of the
Funds (and, if permitted by law, of the other funds in the Mentor family) as a
factor in the selection of broker-dealers.
DISTRIBUTION SERVICES
Each Fund has adopted a Distribution Plan (each, a "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to
permit each of the Funds to compensate Mentor Distributors for services provided
and expenses incurred by it in promoting the sale of shares of the Fund,
reducing redemptions, or maintaining or improving services provided to
shareholders by Mentor Distributors. The Plans provide for monthly payments by
the Funds to Mentor Distributors at the annual rate of up to .38% of a Fund's
average net assets (.33% in the case of Cash Resource Tax-Exempt Money Market
Fund), subject to the authority of the Trustees to reduce the amount of payments
or to suspend the Plans for such periods as they may determine. At present, the
Trustees have approved payments under the Plans at the rate of .38% of a Fund's
average net assets in the case of Cash Resource Money Market Fund and Cash
Resource U.S. Government Money Market Fund, and .33% of the Fund's average net
assets in the case of Cash Resource Tax-Exempt Money Market Fund. Were the
Trustees to decide in the future to approve payments by a Fund under its Plan at
a higher rate, shareholders would be notified and this Prospectus would be
revised. Any material increase in amounts payable under a Plan would require
shareholder approval.
In order to compensate Financial Institutions for services provided in
connection with sales of Fund shares and the maintenance of shareholder accounts
(or, in the case of certain Financial Institutions which are banking
institutions, for certain administrative and shareholder services), Mentor
Distributors may make periodic payments (from any amounts received by it under
the Plans or from its other resources) to each qualifying Financial Institution
based on the average net asset value of shares for which the Financial
Institution is designated as the financial institution of record. Mentor
Distributors makes such payments at the annual rate of between 0.15% and 0.40%
in the case of Cash Resource Money Market Fund and Cash Resource U.S. Government
Money Market Fund, and between 0.15% and 0.33% in the case of Cash Resource
Tax-Exempt Money Market Fund. Mentor Distributors may suspend or modify these
payments at any time, and payments are subject to the continuation of each
Fund's Plan and of applicable agreements between Mentor Distributors and the
applicable Financial Institution.
HOW A FUND'S PERFORMANCE IS CALCULATED
YIELD AND EFFECTIVE YIELD DATA MAY FROM TIME TO TIME BE INCLUDED IN
ADVERTISEMENTS ABOUT ONE OR ALL OF THE FUNDS. "Yield" is calculated by dividing
a Fund's annualized net investment income per share during a recent 30-day
period by the net asset value per share on the last day of that period.
"Effective yield" compounds that yield for a year and is, for that reason,
greater than a Fund's yield. "Tax-equivalent" yield shows the effect on
performance of the tax-exempt status of distributions received from Cash
Resource Tax-Exempt Money Market Fund. It reflects the approximate yield that a
taxable investment must earn for shareholders at stated income levels to produce
an after-tax yield equivalent to the Fund's tax-exempt yield. Quotations of
yield for any period when an expense limitation was in effect will be greater
than if the limitation had not been in effect. A Fund's performance may be
compared to various indices. See the Statement of Additional Information.
ALL DATA IS BASED ON A FUND'S PAST INVESTMENT RESULTS AND DOES NOT PREDICT
FUTURE PERFORMANCE. Investment performance, which will vary, is based on many
factors, including market conditions, the composition of a Fund's portfolio, and
a Fund's operating expenses. Investment performance also often reflects the
risks associated with a Fund's investment objective and policies. These factors
should be considered when comparing a Fund's investment results to those of
other mutual funds and other investment vehicles.
GENERAL INFORMATION ABOUT THE TRUST
Cash Resource Trust is a Massachusetts business trust organized on June 14,
1993. A copy of the Agreement and Declaration of Trust, which is governed by
Massachusetts law, is on file with the Secretary of State of The Commonwealth of
Massachusetts.
The Trust is an open-end, diversified management investment company with an
unlimited number of authorized shares of beneficial interest. Shares of the
Trust may, without shareholder approval, be divided into two or more series of
shares representing separate investment portfolios, and are currently divided
into three series of shares, one representing each Fund. Under the Agreement and
Declaration of Trust, a Fund's shares may be further divided, without
shareholder approval, into two or more classes of shares having such preferences
or special or relative rights and privileges as the Trustees may determine. Each
share has one vote, with fractional shares voting proportionally. Shares of each
Fund are freely transferable, are entitled to dividends as declared by the
Trustees, and, if a Fund were liquidated, would receive the net assets of the
Fund. The Trust may suspend the sale of shares of any Fund at any time and may
refuse any order to purchase shares. Although the Trust is not required to hold
annual meetings of its shareholders, shareholders have the right to call a
meeting to elect or remove Trustees, or to take other actions as provided in the
Agreement and Declaration of Trust.
INVESTORS FIDUCIARY TRUST COMPANY, located at 127 West 10th Street, Kansas
City, Missouri 64105, is the transfer agent and dividend-paying agent for the
Trust. IFTC may at times engage at its own expense certain firms (including
certain Financial Institutions) to perform certain bookkeeping, data processing,
and administrative services pertaining to the maintenance of shareholder
accounts.
If you own fewer shares of a Fund than a minimum amount set by the Trustees
(presently 500 shares), the Trust may choose to redeem your shares and pay you
for them. You will receive at least 30 days written notice before the Trust
redeems your shares, and you may purchase additional shares at any time to avoid
a redemption. The Trust may also redeem shares if you own shares of any Fund or
of the Trust above any maximum amount set by the Trustees. There is presently no
maximum, but the Trustees may establish one at any time, which could apply to
both present and future shareholders.
The Trust may send a single copy of shareholder reports and communications
to an address where there is more than one registered shareholder with the same
last name, unless a shareholder at that address requests, by calling or writing
his Financial Institution, that the Trust do otherwise.
<PAGE>
CASH RESOURCE TRUST
FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
September 29, 1995
This Statement of Additional Information contains information which may be
of interest to investors but which is not included in the Prospectus of Cash
Resource Trust (the "Trust"). This Statement is not a prospectus and is only
authorized for distribution when accompanied or preceded by the Prospectus of
the Trust dated September 29, 1995. This Statement should be read together with
the Prospectus. Investors may obtain a free copy of the Prospectus by calling
Mentor Distributors, Inc. ("Mentor Distributors"), the Trust's distributor, at
(800) 382-0016.
Table of Contents
Part I Page
INVESTMENT OBJECTIVES AND POLICIES OF THE TRUST . . . . . . . . . 2
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . 4
MANAGEMENT OF THE TRUST . . . . . . . . . . . . . . . . . . . . . 6
PRINCIPAL HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . .10
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . .10
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . .14
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
DIVIDENDS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . .18
DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . .18
ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . .20
PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . . . .21
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . .21
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . .21
SHAREHOLDER LIABILITY . . . . . . . . . . . . . . . . . . . . . .26
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . .27
INVESTMENT OBJECTIVES AND POLICIES OF THE TRUST
The Trust currently offers shares of beneficial interest of three series
(each, a "Fund") with separate investment objectives and policies. The
investment objectives and policies of each of the Funds are described in the
Prospectus. This Statement contains additional information concerning certain
investment practices and investment restrictions of the Trust.
Except as described below under "Investment Restrictions," the investment
objectives and policies described in the Prospectus and in this Statement are
not fundamental, and the Trustees may change the investment objectives and
policies of a Fund without an affirmative vote of shareholders of a Fund.
Except as otherwise noted below, the following descriptions of certain
investment policies and techniques are applicable to all of the Funds.
Repurchase Agreements
Each Fund may enter into repurchase agreements. A repurchase agreement is
a contract under which a Fund acquires a security for a relatively short period
(usually not more than one week) subject to the obligation of the seller to
repurchase and the Fund to resell such security at a fixed time and price
(representing a Fund's cost plus interest). It is each Fund's present intention
to enter into repurchase agreements only with member banks of the Federal
Reserve System and securities dealers meeting certain criteria as to
creditworthiness and financial condition established by the Trustees of a Fund
and only with respect to obligations of the U.S. Government or its agencies or
instrumentalities or other high quality short term debt obligations. Repurchase
agreements may also be viewed as loans made by a Fund which are collateralized
by the securities subject to repurchase. Commonwealth Investment Council, Inc.
("Commonwealth") will monitor such transactions to ensure that the value of the
underlying securities will be at least equal at all times to the total amount of
the repurchase obligation, including the interest factor. If the seller
defaults, a Fund could realize a loss on the sale of the underlying security to
the extent that the proceeds of the sale including accrued interest are less
than the resale price provided in the agreement including interest. In
addition, if the seller should be involved in bankruptcy or insolvency
proceedings, a Fund may incur delay and costs in selling the underlying security
or may suffer a loss of principal and interest if the Fund is treated as an
unsecured creditor and required to return the underlying collateral to the
seller's estate.
Securities Loans
A Fund may lend its portfolio securities provided: (1) the loan is secured
continuously by collateral consisting of U.S. Government securities, cash, or
cash equivalents adjusted daily to have market value at least equal to the
current market value of the securities loaned; (2) the Fund may at any time call
the loan and regain the securities loaned; (3) the Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of the securities loaned will not at any time exceed one-third of
the total assets of such Fund. In addition, it is anticipated that a Fund may
share with the borrower some of the income received on the collateral for the
loan or that it will be paid a premium for the loan. Before a Fund enters into
a loan, Commonwealth considers all relevant facts and circumstances including
the creditworthiness of the borrower. The risks in lending portfolio
securities, as with other extensions of credit, consist of possible delay in
recovery of the securities or possible loss of rights in the collateral should
the borrower fail financially. Although voting rights, or rights to consent,
with respect to the loaned securities pass to the borrower, a Fund retains the
right to call the loans at any time on reasonable notice, and it will do so in
order that the securities may be voted by the Fund if the holders of such
securities are asked to vote upon or consent to matters materially affecting the
investment. A Fund will not lend portfolio securities to borrowers affiliated
with the Trust.
Foreign Securities
Cash Resource Money Market Fund may invest in U.S. dollar denominated
foreign securities which meet the criteria applicable to the Fund's domestic
investments, and in certificates of deposit issued by U.S. branches of foreign
banks and foreign branches of U.S. banks. Investment by the Fund in foreign
securities is subject to the limitations set forth in the Prospectus.
Investments in foreign securities may involve considerations different from
investments in domestic securities due to limited publicly available
information, non-uniform accounting standards, lower trading volume and possible
consequent illiquidity, greater volatility in price, the possible imposition of
withholding or confiscatory taxes, the possible adoption of foreign governmental
restrictions affecting the payment of principal and interest, expropriation of
assets, nationalization, or other adverse political or economic developments.
Foreign companies may not be subject to auditing and financial reporting
standards and requirements comparable to those which apply to U.S. companies.
Foreign brokerage commissions and other fees are generally higher than in the
United States. It may be more difficult to obtain and enforce a judgment
against a foreign issuer.
In determining whether to invest in securities of foreign issuers,
Commonwealth will consider the likely impact of foreign taxes on the net yield
available to the Fund and its shareholders. Income received by the Fund from
sources within foreign countries may be reduced by withholding and other taxes
imposed by such countries. Tax conventions between certain countries and the
United States may reduce or eliminate such taxes. It is impossible to determine
the effective rate of foreign tax in advance since the amount of the Fund's
assets to be invested in various countries is not known, and tax laws and their
interpretations may change from time to time and may change without advance
notice. Any such taxes paid by the Fund will reduce its net income available
for distribution to shareholders.
INVESTMENT RESTRICTIONS
The Trust has adopted the following restrictions applicable to all of the
Funds, which may not be changed without the affirmative vote of a "majority of
the outstanding voting securities" of a Fund, which is defined in the 1940 Act
to mean the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund and (2) 67% or more of the shares present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting or by proxy. A Fund may not:
1. Borrow money in excess of 10% of the value (taken at the lower of cost
or current value) of its total assets (not including the amount borrowed) at the
time the borrowing is made, and then only from banks as a temporary measure (not
for leverage) in situations which might otherwise require the untimely
disposition of portfolio investments or for extraordinary or emergency purposes.
Such borrowings will be repaid before any additional investments are purchased.
2. Pledge, hypothecate, mortgage, or otherwise encumber its assets in
excess of 15% of its total assets (taken at the lower of cost and current value)
and then only in connection with borrowings permitted by restriction 1 above.
3. Purchase securities on margin, expect such short-term credits as may
be necessary for the clearance of purchase and sales of securities.
4. Make short sales of securities or maintain a short position for the
account of a Fund unless at all times when a short position is open it owns an
equal amount of such securities or owns securities which, without payment of any
further consideration, are convertible into or exchangeable for securities of
the same issue as, and in equal amount to, the securities sold short.
5. Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under the federal securities laws.
6. Purchase or sell real estate, although it may purchase securities of
issuers which deal in real estate, securities which are secured by interests in
real estate, and securities representing interests in real estate, and it may
acquire and dispose of real estate or interests in real estate acquired through
the exercise of its rights as a holder of debt obligations secured by real
estate or interests therein.
7. Purchase or sell commodities or commodity contracts.
8. Make loans, except by purchase of debt obligations in which a Fund
may invest consistent with its investment policies and by entering into
repurchase agreements and securities loans.
9. Invest in securities of any issuer, if, to the knowledge of a Fund,
officers and Trustees of the Trust and officers and directors of Commonwealth
Advisors, Inc. who beneficially own more than 0.5% of the securities of that
issuer together own more than 5% of such securities.
10. As to 75% of its assets, invest in securities of any issuer if,
immediately after such investment, more than 5% of the total assets of the Fund
(taken at current value) would be invested in the securities of such issuer;
provided that this limitation does not apply to securities issued or guaranteed
as to principal or interest by the U.S. Government or its agencies or
instrumentalities.
11. Acquire more than 10% of the voting securities of any issuer.
12. Invest more than 25% of its assets in any one industry, except that
Cash Resource Money Market Fund may invest without limit in obligations of
domestic branches of U.S. banks and U.S. branches of foreign banks (if it can be
demonstrated that they are subject to the same regulation as U.S. banks).
13. Make investments for the purpose of gaining control of a company's
management.
14. Issue any class of securities which is senior to a Fund's shares of
beneficial interest, except as consistent with or permitted by the Investment
Company Act of 1940 or as permitted by rule or order of the Securities and
Exchange Commission.
In addition, it is contrary to the current policy of the Trust, which may
be changed without shareholder approval, to invest in the securities of other
registered open-end investment companies.
All percentage limitations on investments will apply at the time of
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment. Except
for the investment restrictions listed above and those designated in the
Prospectus as fundamental, the other investment policies described in the
Prospectus and this Statement are not fundamental and may be changed by approval
of the Trustees. As a matter of policy, the Trustees would not materially
change a Fund's investment objective without shareholder approval.
MANAGEMENT OF THE TRUST
<TABLE>
<CAPTION>
Principal Occupation
Position Held With During Past
Name and Address A Fund Five Years
<S> <C> <C>
Daniel J. Ludeman*+ Chairman and Chairman and Chief Executive
901 E. Byrd Street Trustee Officer since July 1991, Mentor
Richmond, VA 23219 Investment Group, Inc.; Managing
Director of Wheat, First Securities,
Inc. since August 1989; Managing
Director of Wheat First Butcher
Singer, Inc. since June 1991;
Director, Mentor Income Fund, Inc.;
Chairman and Trustee, Mentor
Institutional Trust.
Arnold H. Dreyfuss Trustee Trustee, The Mentor Funds and Mentor
P.O. Box 18156 Institutional Trust; formerly,
Richmond, Virginia 23226 Chairman and Chief Executive
Officer, Hamilton Beach/Proctor-
Silex, Inc.
Thomas F. Keller Trustee Dean, Fuqua School of
Fuqua School of Business Business, Duke University; Trustee,
Duke University The Mentor Funds and Mentor
Durham, NC 27706 Institutional Trust.
Louis W. Moelchert, Jr. Trustee Vice President of Business and
University of Richmond Finance, University of Richmond;
Richmond, VA 23173 Trustee, The Mentor Funds and Mentor
Institutional Trust.
Stanley F. Pauley Trustee Chairman and Chief
E.R. Carpenter Executive Officer, E.R.
Company, Incorporated Carpenter Company
5016 Monument Avenue Incorporated; Trustee,
Richmond, Virginia 23261 The Mentor Funds; Mentor and Mentor
Institutional Trust.
Troy A. Peery, Jr. Trustee President, Heilig-
Heilig-Meyers Company Meyers Company;
2235 Staples Mill Road Trustee, Cambridge
Richmond, Virginia 23230 Series Trust and Mentor
Institutional Trust.
Peter J. Quinn, Jr.*+ Trustee President, Mentor Distributors,
901 E. Byrd Street Inc.; Managing Director, Mentor
Richmond, VA 23219 Investment Group, Inc.;
Managing Director, Wheat First
Butcher Singer, Inc.; formerly,
Senior Vice President/Director
of Mutual Funds, Wheat First
Butcher Singer, Inc.
Paul F. Costello President Managing Director, Wheat First
901 E. Byrd Street Butcher Singer, Inc., Mentor
Richmond, VA 23219 Investment Group, Inc.; President,
Mentor Income Fund, Inc., and
Mentor Institutional Trust;
formerly, President, Mentor
Series Trust; Director,
President and Chief Executive
Officer, First Variable Life
Insurance Company; President
and Chief Financial Officer,
Variable Investors Series
Trust; President and Treasurer,
Atlantic Capital & Research,
Inc.; Vice President and
Treasurer, Variable Stock Fund,
Inc., Monarch Investment Series
Trust, and GEICO Tax Advantage
Series Trust; Vice President,
Monarch Life Insurance Company,
GEICO Investment Services
Company, Inc., Monarch
Investment Services Company,
Inc., and Springfield Life
Insurance Company.
Terry L. Perkins Treasurer Vice President, Mentor Investment
901 E. Byrd Street Group, Inc.; Treasurer, Mentor
Richmond, VA 23219 Institutional Trust; Treasurer
Mentor Income Fund, Inc.; formerly
Treasurer and Comptroller, Ryland
Capital Management, Inc.;
Treasurer, Mentor Series Trust.
John M. Ivan Clerk Managing Director
10700 North Park Drive and Director of Compliance
Glen Allen, VA 23060 since October 1992, and
Assistant General Counsel,
Wheat, First Securities,
Inc.; Managing Director
and Assistant Secretary,
Wheat First Butcher Singer
Inc. (formerly WFS
Financial Corporation);
Clerk, Mentor
Institutional Trust;
Secretary, Mentor Income
Fund, Inc. formerly,
Clerk, Mentor Series
Trust.
</TABLE>
* This Trustee is deemed to be an "interested person" of a Fund as defined in
the 1940 Act.
+ Members of the Executive Committee. The Executive Committee of the Trustees
is entitled to exercise certain responsibilities of the Trustees between
meetings of the Trustees.
Except as stated above, the principal occupations of the officers and
Trustees for the last five years have been with the employers as shown above,
although in some cases they have held different positions with such employers.
Total compensation
Aggregate compensation from all
Trustees from the Trust complex funds
Daniel J. Ludeman $ 0 $ 0
Arnold H. Dreyfuss 6,000 12,200
Thomas F. Keller 6,000 12,200
Louis W. Moelchert, Jr. 6,000 12,200
Stanley F. Pauley 6,000 12,200
Troy A. Peery, Jr. 6,000 12,200
Peter J. Quinn, Jr. 0 0
The Trustees do not receive pension or retirement benefits from the Trust.
The Agreement and Declaration of Trust of the Trust provides that the Trust
will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with litigation in which they may be involved because of
their offices with the Trust, except if it is determined in the manner specified
in the Agreement and Declaration of Trust that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Trust or that such indemnification would relieve any officer or Trustee of any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of his or her duties. The Trust,
at its expense, may provide liability insurance for the benefit of its Trustees
and officers.
PRINCIPAL HOLDERS OF SECURITIES
As of September 1, 1995, the officers and Trustees of the Trust owned as a
group less than one percent of the outstanding shares of each Fund. To the
knowledge of the Trust, no person owns of record or beneficially more than 5% of
the outstanding shares of any Fund as of that date.
INVESTMENT ADVISORY AND OTHER SERVICES
Under a Management Contract (the "Management Contract") between the Trust
and Commonwealth Advisors, Inc. ("Commonwealth Advisors"), Commonwealth
Advisors, at its expense, provides the Funds with investment advisory services
and advises and assists the officers of the Trust in taking such steps as are
necessary or appropriate to carry out the decisions of its Trustees regarding
the conduct of business of the Trust and each Fund. Commonwealth Advisors is a
wholly-owned subsidiary of Mentor Investment Group, Inc., which in turn is a
wholly-owned subsidiary of Wheat First Butcher Singer Inc., a diversified
financial holding company.
The table below shows amounts paid to Commonwealth Advisors by each Fund
under the Management Contract for the periods indicated:
December 20, 1993 Fiscal year
(Commencement of operations) ended
to July 31, 1994 July 31, 1995
Cash Resource Money Market Fund $ 229,508 $ 616,369
Cash Resource U.S. Government
Money Market Fund $1,121,385 $2,097,838
Cash Resource Tax-Exempt Money
Market Fund $ 164,663 $ 486,638
The amounts paid to Commonwealth Advisors reflect expense reductions
as follows, which are due to an expense limitation:
December 20, 1993 Fiscal year
(Commencement of operations) ended
to July 31, 1994 July 31, 1995
Cash Resource Money Market Fund $ 44,729 $ 0
Cash Resource U.S. Government
Money Market Fund $ 161,394 $ 0
Cash Resource Tax-Exempt
Money Market Fund $ 122,485 $48,886
Under a Subadviser Contract (the "Subadviser Contract") between
Commonwealth Investment Counsel, Inc. ("Commonwealth") and Commonwealth
Advisors, Commonwealth regularly provides the Funds with investment
research, advice, and supervision and furnishes continuously investment
programs consistent with the investment objectives and policies of the
various Funds, and determines, for the various Funds, what securities shall
be purchased, what securities shall be held or sold, and what portion of a
Fund's assets shall be held uninvested, subject always to the provisions of
the Agreement and Declaration of Trust and By-laws, and of the 1940 Act,
and to a Fund's investment objectives, policies, and restrictions, and
subject further to such policies and instructions as the Trustees may from
time to time establish.
Commonwealth Advisors and Commonwealth make available to the Trust,
without expense to the Trust, the services of such of their directors,
officers, and employees as may duly be elected Trustees or officers of the
Trust, subject to their individual consent to serve and to any limitations
imposed by law. Commonwealth Advisors pays the compensation and expenses
of officers and executive employees of the Trust. Commonwealth Advisors
and Commonwealth also provide investment advisory research and statistical
facilities and all clerical services relating to such research,
statistical, and investment work. Commonwealth Advisors pays the Trust's
office rent.
Under the Management Contract, the Trust is responsible for all its
other expenses, including clerical salaries not related to investment
activities; fees and expenses incurred in connection with membership in
investment company organizations; brokers' commissions; payment for
portfolio pricing services to a pricing agent, if any; legal expenses;
auditing expenses; accounting expenses; taxes and governmental fees; fees
and expenses of the transfer agent and investor servicing agents of the
Trust; the cost of preparing share certificates or any other expenses,
including clerical expenses, incurred in connection with the issue, sale,
underwriting, redemption, or repurchase of shares; the expenses of and fees
for registering or qualifying securities for sale; the fees and expenses of
the Trustees of the Trust who are not affiliated with Commonwealth
Advisors; the cost of preparing and distributing reports and notices to
shareholders; public and investor relations expenses; and fees and
disbursements of custodians of a Fund's assets. The Trust is also
responsible for its expenses incurred in connection with litigation,
proceedings, and claims and the legal obligation it may have to indemnify
its officers and Trustees with respect thereto.
Commonwealth Advisors has agreed that, if in any year the aggregate
expenses of any of the Funds (including fees pursuant to the Management
Contract but excluding interest, taxes, brokerage and distribution fees
and, with the prior written consent of the necessary state securities
commissions, extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Trust, Commonwealth Advisors will
reimburse the Trust for such excess expense. This expense reimbursement
obligation is not limited to the amount of Commonwealth Advisors's fees.
Such expense reimbursement, if any, will be estimated, reconciled and paid
on a monthly basis. The most stringent state expense limitation applicable
to the Trust presently requires reimbursement of expenses in any year that
such expenses exceed the sum of 2.5% of the first $30 million of the
average daily net assets, 2.0% of the next $70 million of the average daily
net assets, and 1.5% of the average daily net assets over $100 million.
The Management Contract and the Subadviser Contract provide that
Commonwealth Advisors and Commonwealth shall not be subject to any
liability to the Trust or to any shareholder for any act or omission in the
course of, or connected with, their rendering services under the Management
Contract or the Subadviser Contract in the absence of willful misfeasance,
bad faith, gross negligence, or reckless disregard of their duties.
Each of the Management Contract and the Subadviser Contract may be
terminated without penalty by vote of the Trustees as to any Fund or by the
shareholders of that Fund, or by Commonwealth Advisors (or Commonwealth) on
30 days written notice. Each of the Management Contract and Subadviser
Contract also terminates without payment of any penalty in the event of its
assignment. In addition, each of the Management Contract and the
Subadviser Contract may be amended only by a vote of the shareholders of
the affected Fund(s), and provides that it will continue in effect from
year to year (after December 1995) only so long as such continuance is
approved at least annually with respect to each Fund by vote of either the
Trustees or the shareholders of a Fund, and, in either case, by a majority
of the Trustees who are not "interested persons" of Commonwealth Advisors
(or Commonwealth). In each of the foregoing cases, the vote of the
shareholders is the affirmative vote of a "majority of the outstanding
voting securities" as defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
Commonwealth Advisors and Commonwealth may place portfolio
transactions with broker-dealers which furnish, without cost, certain
research, statistical, and quotation services of value to Commonwealth
Advisors or Commonwealth and their affiliates in advising the Trust and
other clients, provided that they shall always seek best price and
execution with respect to transactions. Certain investments may be
appropriate for the Trust and for other clients advised by Commonwealth
Advisors or Commonwealth. Investment decisions for the Trust and other
clients are made with a view to achieving their respective investment
objectives and after consideration of such factors as their current
holdings, availability of cash for investment, and the size of their
investments generally. Frequently, a particular security may be bought or
sold for only one client or in different amounts and at different times for
more than one but less than all clients. Likewise, a particular security
may be bought for one or more clients when one or more other clients are
selling the security. In addition, purchases or sales of the same security
may be made for two or more clients of Commonwealth Advisors or
Commonwealth on the same day. In such event, such transactions will be
allocated among the clients in a manner believed by Commonwealth Advisors
or Commonwealth to be equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities
purchased or sold by the Trust. Purchase and sale orders for the Trust may
be combined with those of other clients of Commonwealth Advisors or
Commonwealth in the interest of achieving the most favorable net results
for the Trust.
Brokerage and Research Services. Transactions on U.S. stock exchanges
and other agency transactions involve the payment by a the Trust of
negotiated brokerage commissions. Such commissions vary among different
brokers. Also, a particular broker may charge different commissions
according to such factors as the difficulty and size of the transaction.
Transactions in foreign securities often involve the payment of fixed
brokerage commissions, which are generally higher than those in the United
States. There is generally no stated commission in the case of securities
traded in the over-the-counter markets, but the price paid by the Trust
usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by a Fund includes a disclosed,
fixed commission or discount retained by the underwriter or dealer.
Commonwealth places all orders for the purchase and sale of portfolio
securities for the Funds and buys and sells securities for the Funds
through a substantial number of brokers and dealers. In so doing, it uses
its best efforts to obtain for the Funds the best price and execution
available. In seeking the best price and execution, Commonwealth, having
in mind the Funds' best interests, considers all factors it deems relevant,
including, by way of illustration, price, the size of the transaction, the
nature of the market for the security, the amount of the commission, the
timing of the transaction taking into account market prices and trends, the
reputation, experience, and financial stability of the broker-dealer
involved, and the quality of service rendered by the broker-dealer in other
transactions.
It has for many years been a common practice in the investment
advisory business for advisers of investment companies and other
institutional investors to receive research, statistical, and quotation
services from broker-dealers which execute portfolio transactions for the
clients of such advisers. Consistent with this practice, Commonwealth
receives research, statistical, and quotation services from many broker-
dealers with which it places a Fund's portfolio transactions. These
services, which in some cases may also be purchased for cash, include such
matters as general economic and security market reviews, industry and
company reviews, evaluations of securities, and recommendations as to the
purchase and sale of securities. Some of these services are of value to
Commonwealth and its affiliates in advising various of their clients
(including the Trust), although not all of these services are necessarily
useful and of value in managing the Trust. The management fees paid by the
Funds are not reduced because Commonwealth Advisors or Commonwealth and its
affiliates receive such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, and
by the Investment Advisory Agreement, Commonwealth Advisors or Commonwealth may
cause a Fund to pay a broker-dealer which provides brokerage and research
services to Commonwealth Advisors or Commonwealth an amount of disclosed
commission for effecting a securities transaction for that Fund in excess of the
commission which another broker-dealer would have charged for effecting that
transaction. Commonwealth Advisors and Commonwealth's authority to cause a Fund
to pay any such greater commissions in also subject to such policies as the
Trustees may adopt from time to time.
Brokerage Commissions. It is anticipated that most purchases and
sales of portfolio investments will be with the issuer or with major
dealers in money market instruments acting as principal. Accordingly, it
is not anticipated that the Funds will pay significant brokerage
commissions. None of the Funds incurred brokerage commissions in the 1994
fiscal period or the 1995 fiscal year. In underwritten offerings, the
price paid by a Fund includes a disclosed, fixed commission or discount
retained by the underwriter. There is generally no stated commission in
the case of securities purchased from or sold to dealers, but the prices of
such securities usually include an undisclosed dealer's mark-up or mark-
down. None of the Funds incurred underwriting commissions in the 1994
fiscal period or the 1995 fiscal year.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is determined twice each
day as of 12:00 noon and as of the close of regular trading (generally 4:00
p.m. New York time) on each day the New York Stock Exchange is open for
trading. The New York Stock Exchange is normally closed on the following
national holidays: New Year's Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving, and Christmas.
The valuation of each Fund's portfolio securities is based upon their
amortized cost, which does not take into account unrealized securities
gains or losses. This method involves initially valuing an instrument at
its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. By using amortized cost valuation,
each Fund seeks to maintain a constant net asset value of $1.00 per share,
despite minor shifts in the market value of its portfolio securities.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price a Fund would receive if it sold the instrument. During
periods of declining interest rates, the quoted yield on shares of a Fund
may tend to be higher than a like computation made by a fund with identical
investments utilizing a method of valuation based on market prices and
estimates of market prices for all of its portfolio instruments. Thus, if
the use of amortized cost by a Fund resulted in a lower aggregate portfolio
value on a particular day, a prospective investor in that Fund would be
able to obtain a somewhat higher yield if he purchased shares of the Fund
on that day, than would result from investment in a fund utilizing solely
market values, and existing investors in a Fund would receive less
investment income. The converse would apply on a day when the use of
amortized cost by a Fund resulted in a higher aggregate portfolio value.
However, as a result of certain procedures adopted by the Trust, the Trust
believes any difference will normally be minimal.
The valuation of a Fund's portfolio instruments at amortized cost is
permitted in accordance with Securities and Exchange Commission Rule 2a-7
and certain procedures adopted by the Trustees. Under these procedures, a
Fund must maintain a dollar-weighted average portfolio maturity of 90 days
or less, purchase only instruments having remaining maturities of 397 days
or less, and invest in securities determined by the Trustees to be of high
quality with minimal credit risks. The Trustees have also established
procedures designed to stabilize, to the extent reasonably possible, a
Fund's price per share as computed for the purpose of distribution,
redemption and repurchase at $1.00. These procedures include review of a
Fund's portfolio holdings by the Trustees, at such intervals as they may
deem appropriate, to determine whether a Fund's net asset value calculated
by using readily available market quotations deviates from $1.00 per share,
and, if so, whether such deviation may result in material dilution or is
otherwise unfair to existing shareholders. In the event the Trustees
determine that such a deviation may result in material dilution or is
otherwise unfair to existing shareholders, they will take such corrective
action as they regard as necessary and appropriate, including the sale of
portfolio instruments prior to maturity to realize capital gains or losses
or to shorten the average portfolio maturity; withholding dividends;
redemption of shares in kind; or establishing a net asset value per share
by using readily available market quotations.
Since the net income of a Fund is declared as a dividend each time it
is determined, the net asset value per share of a Fund remains at $1.00 per
share immediately after such determination and dividend declaration. Any
increase in the value of a shareholder's investment in a Fund representing
the reinvestment of dividend income is reflected by an increase in the
number of shares of a Fund in the shareholder's account on the last day of
each month (or, if that day is not a business day, on the next business
day). It is expected that a Fund's net income will be positive each time
it is determined. However, if because of realized losses on sales of
portfolio investments, a sudden rise in interest rates, or for any other
reason the net income of a Fund determined at any time is a negative
amount, a Fund will offset such amount allocable to each then shareholder's
account from dividends accrued during the month with respect to such
account. If at the time of payment of a dividend by a Fund (either at the
regular monthly dividend payment date, or, in the case of a shareholder who
is withdrawing all or substantially all of the shares in an account, at the
time of withdrawal), such negative amount exceeds a shareholder's accrued
dividends, the Fund will reduce the number of outstanding shares by
treating the shareholder as having contributed to the capital of the Fund
that number of full and fractional shares which represent the amount of the
excess. Each shareholder is deemed to have agreed to such contribution in
these circumstances by his or her investment in a Fund.
Should a Fund incur or anticipate, with respect to its respective
portfolio, any unusual or unexpected significant expense or loss which
would affect disproportionately a Fund's income for a particular period,
the Trustees would at that time consider whether to adhere to the dividend
policy described above or to revise it in light of the then prevailing
circumstances in order to ameliorate to the extent possible the
disproportionate effect of such expense or loss on then existing
shareholders. Such expenses or losses may nevertheless result in a
shareholder's receiving no dividends for the period during which the shares
are held and receiving upon redemption a price per share lower than that
which was paid.
The proceeds received by each Fund for each issue or sale of its
shares, and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, will be specifically allocated to such
Fund, and constitute the underlying assets of that Fund. The underlying
assets of each Fund will be segregated on the Trust's books of account, and
will be charged with the liabilities in respect of such Fund and with a
share of the general liabilities of the Trust. Expenses with respect to
any two or more Funds may be allocated in proportion to the net asset
values of the respective Funds except where allocations of direct expenses
can otherwise be fairly made.
TAXES
Each Fund of the Trust intends to qualify each year and elect to be
taxed as a regulated investment company under Subchapter M of the United
States Internal Revenue Code of 1986, as amended (the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, a Fund will not be subject to federal income
tax on any of its net investment income or net realized capital gains that
are distributed to its shareholders. As a Massachusetts business trust, a
Fund under present law will not be subject to any excise or income taxes in
Massachusetts.
Other than dividends from Cash Resource Tax-Exempt Money Market Fund
that are excludable from income, distributions from a Fund will be taxable
to a shareholder whether received in cash or additional shares. Such
distributions that are designated as capital gains distributions will be
taxable as such, regardless of how long Fund shares are held, while other
taxable distributions will be taxed as ordinary income. Loss on the sale
of Fund shares held for less than six months will be treated as a long term
capital loss to the extent of any capital gain distribution received with
respect to such shares (and will be disallowed to the extent of exempt-
interest dividends received with respect to such shares). Also interest on
indebtedness incurred to purchase shares of Cash Resource Tax-Exempt Money
Market Fund may be nondeductible.
In order to qualify as a "regulated investment company," a Fund must,
among other things, (a) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, gains from
the sale or other dispositions of stock, securities, or foreign currencies,
and other income (including gains from options, futures, or forward
contracts) derived with respect to its business of investing in such stock,
securities, or currencies; (b) derive less than 30% of its gross income
from the sale or other disposition of certain assets (including stock and
securities) held less than three months; (c) diversify its holdings so
that, at the close of each quarter of its taxable year, (i) at least 50% of
the value of its total assets consists of cash, cash items, U.S. Government
Securities, and other securities limited generally with respect to any one
issuer to not more than 5% of the total assets of a Fund and not more than
10% of the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities of any
issuer (other than U.S. Government Securities). In order to receive the
favorable tax treatment accorded regulated investment companies and their
shareholders, moreover, a Fund must in general distribute at least 90% of
its interest, dividends, net short-term capital gain, and certain other
income each year. To satisfy these requirements, a Fund may engage in
investment techniques that affect the amount, timing and character of its
income and distributions.
An excise tax at the rate of 4% will be imposed on the excess, if any,
of each Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net
income recognized during the one-year period ending on October 31 (or
December 31, if the Fund so elects) plus undistributed amounts from prior
years. Each Fund intends to make distributions sufficient to avoid
imposition of the excise tax. Distributions declared by a Fund during
October, November or December to shareholders of record on a date in any
such month and paid by the Fund during the following January will be
treated for federal tax purposes as paid by the Fund and received by
shareholders on December 31 of the year in which declared.
Each Fund is required to withhold 31% of all income dividends and
capital gain distributions, and 31% of the gross proceeds of all
redemptions of Fund shares, in the case of any shareholder who does not
provide a correct taxpayer identification number, about whom a Fund is
notified that the shareholder has underreported income in the past, or who
fails to certify to a Fund that the shareholder is not subject to such
withholding. Tax-exempt shareholders are not subject to these back-up
withholding rules so long as they furnish the Fund with a proper
certification.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For
the complete provisions, reference should be made to the pertinent Code
sections and regulations. The Code and regulations are subject to change
by legislative or administrative actions. Dividends and distributions also
may be subject to state and federal taxes. Shareholders are urged to
consult their tax advisers regarding specific questions as to federal,
state or local taxes. The foregoing discussion relates solely to U.S.
federal income tax law. Non-U.S. investors should consult their tax
advisers concerning the tax consequences of ownership of shares of the
Fund, including the possibility that distributions may be subject to a 30%
United States withholding tax (or a reduced rate of withholding provided by
treaty).
DIVIDENDS AND DISTRIBUTIONS
The net investment income of each of the Funds is determined as of the
close of trading on the New York Stock Exchange (generally 4:00 p.m. New York
time) on each day on which the Exchange is open for business. All of the net
investment income so determined normally will be declared as a dividend daily to
shareholders of record as of the close of trading on the Exchange after the
purchase and redemption of shares. Unless the business day before a weekend or
holiday is the last day of an accounting period, the dividend declared on that
day will include an amount in respect of a Fund's income for the subsequent
non-business day or days. No daily dividend will include any amount of net
income in respect of a subsequent semi-annual accounting period. Dividends
commence on the next business day after the date of purchase. Dividends
declared during any month will be invested as described in the Prospectus.
Net income of a Fund consists of all interest income accrued on
portfolio assets less all expenses of the Fund and amortized market
premium. Amortized market discount is included in interest income. The
Trust does not anticipate that any Fund will normally realize any long-term
capital gains with respect to its portfolio securities.
DISTRIBUTION
Mentor Distributors is the principal underwriter of the continually
offered shares of each of the Funds pursuant to a Distribution Agreement
between Mentor Distributors and the Trust. Mentor Distributors is not
obligated to sell any specific amount of shares of any Fund and will
purchase shares of a Fund for resale only against orders for shares.
The Trust, on behalf of each Fund, has adopted a Distribution Plan and
Agreement pursuant to Rule 12b-1 under the 1940 Act (each, a "Plan"). The
purpose of each Plan is to permit a Fund to compensate Mentor Distributors
for services provided and expenses incurred by it in promoting the sale of
shares of the Funds, reducing redemptions, or maintaining or improving
services provided to shareholders by Mentor Distributors or Financial
Institutions. Each Plan provides for payments by each Fund to Mentor
Distributors at the annual rate of up to 0.38% of the Fund's average net
assets (0.33% in the case of Cash Resource Tax-Exempt Money Market Fund),
subject to the authority of the Trustees to reduce the amount of payments
or to suspend the Plans as to any Fund for such periods as they may
determine. Subject to these limitations, the amount of such payments and
the specific purposes for which they are made shall be determined by the
Trustees.
For the periods indicated, each Fund paid the following amounts to
Mentor Distributors under its respective Plan:
December 20, 1993 Fiscal year
(Commencement of operations) ended
to July 31, 1994 July 31, 1995
Cash Resource Money Market Fund $ 457,505 $1,060,999
Cash Resource U.S. Government
Money Market Fund $2,212,290 $3,764,477
Cash Resource Tax-Exempt Money
Market Fund $ 420,006 $ 729,833
Mentor Distributors paid distribution expenses to Financial Institutions in
respect of the Funds as follows:
December 20, 1993 Fiscal year
(Commencement of operations) ended
to July 31, 1994 July 31, 1995
Cash Resource Money Market Fund $ 474,834 $1,060,999
Cash Resource U.S. Government
Money Market Fund $2,326,017 $3,764,477
Cash Resource Tax-Exempt Money
Market Fund $ 431,813 $ 729,833
Mentor Distributors did not incur any expenses in respect of marketing
materials and promotional and other expenses for the Funds for the 1994 fiscal
period or the 1995 fiscal year.
Continuance of a Plan is subject to annual approval by a vote of the
Trustees, including a majority of the Trustees who are not interested persons of
the Trust, and have no direct or indirect financial interest in the operation of
the Plan and related agreements (the "Qualified Trustees"), cast in person at a
meeting called for that purpose. All material amendments to a Plan must be
likewise approved by the Trustees and the Qualified Trustees.
A Plan may not be amended in order to increase materially the costs which a
Fund may bear for distribution pursuant to the Plan without also being approved
by a majority of the outstanding voting securities of that Fund. Each Plan
terminates automatically in the event of its assignment and may be terminated as
to any Fund without penalty, at any time, by a vote of a majority of the
outstanding voting securities of the Fund or by a vote of a majority of the
Qualified Trustees.
In order to compensate selected financial institutions, such as investment
dealers and banks through which shares of each Fund are sold ("Financial
Institutions") for services provided in connection with sales of shares of each
Fund and/or for administrative services and the maintenance of shareholder
accounts, Mentor Distributors may make periodic payments to qualifying Financial
Institutions based on the average net asset value of shares of a Fund which are
attributable to shareholders for whom the Financial Institutions are designated
as the Financial Institution of record. Mentor Distributors may make such
payments at the annual rate of up to 0.40% of the average net asset value of
such shares (0.33% in the case of Cash Resource Tax-Exempt Money Market Fund).
For this purpose, "average net assets" attributable to a shareholder account
means the product of (i) the average daily share balance of the Fund account
times (ii) the Fund's average daily net asset value per share. For
administrative reasons, Mentor Distributors may enter into agreements with
certain Financial Institutions providing for the calculation of "average net
assets" on the basis of assets of the accounts of the Financial Institutions'
customers on an established day in this period. Mentor Distributors may suspend
or modify these payments at any time, and payments are subject to the
continuation of the Fund's Distribution Plan described below and the terms of
related agreements between Financial Institutions and Mentor Distributors.
ORGANIZATION
The Trust is an open-end investment company established under the laws
of The Commonwealth of Massachusetts by Agreement and Declaration of Trust
dated June 14, 1993.
Shares entitle their holders to one vote per share, with fractional
shares voting proportionally; however, separate votes will be taken by each
Fund on matters affecting an individual Fund. For example, a change in a
fundamental investment policy for the Cash Resource Money Market Fund would
be voted upon only by shareholders of the Cash Resource Money Market Fund.
Additionally, approval of the Management Contract and the Subadviser
Contract is a matter to be determined separately by each Fund. Approval by
the shareholders of one Fund is effective as to that Fund. Shares have
noncumulative voting rights. Although a Fund is not required to hold
annual meetings of its shareholders, shareholders have the right to call a
meeting to elect or remove Trustees or to take other actions as provided in
the Declaration of Trust. Shares have no preemptive or subscription
rights, and are transferable. Shares are entitled to dividends as declared
by the Trustees, and if a Fund were liquidated, the shares of that Fund
would receive the net assets of that Fund. The Trust may suspend the sale
of shares at any time and may refuse any order to purchase shares.
Additional Funds may be created from time to time with different
investment objectives. Any additional Funds may be managed by investment
advisers or sub-advisers other than Commonwealth Advisors and Commonwealth.
In addition, the Trustees have the right, subject to any necessary
regulatory approvals, to create more than one class of shares in a Fund,
with the classes being subject to different charges and expenses and having
such other different rights as the Trustees may prescribe and to terminate
any Fund of the Trust.
PORTFOLIO TURNOVER
The portfolio turnover rate of a Fund is defined by the Securities and
Exchange Commission as the ratio of the lesser of annual sales or purchases to
the monthly average value of the portfolio, excluding from both the numerator
and the denominator securities with maturities at the time of acquisition of one
year or less. Under that definition, the Funds will have no portfolio turnover.
Fund turnover generally involves some expense to a Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities.
CUSTODIAN
Investors Fiduciary Trust Company is the custodian of the Trust's assets.
The custodian's responsibilities include safeguarding and controlling the
Trust's cash and securities, handling the receipt and delivery of securities,
and collecting interest and dividends on the Trust's investments. The custodian
does not determine the investment policies of the Trust or decide which
securities the Trust will buy or sell.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP located at 99 High Street, Boston, Massachusetts
02110, are the Trust's independent auditors, providing audit services, tax
return preparation and other tax consulting services and assistance and
consultation in connection with the review of various Securities and Exchange
Commission filings.
PERFORMANCE INFORMATION
Based on the seven-day period ended July 31, 1995, Cash Resource Money
Market Fund's yield was 5.22% and its effective yield was 5.36%. Based on
the seven-day period ended July 31, 1995 Cash Resource U.S. Government
Money Market Fund's yield was 4.97% and its effective yield was 5.09%. See
below for information on how these Funds' yields and effective yields are
calculated.
Based on the seven-day period ended July 31, 1995, Cash Resource Tax-
Exempt Money Market Fund's tax-exempt yield was 3.08%, and its tax-exempt
effective yield was 3.13%. A shareholder in a 31.00% federal tax bracket
would have to earn 4.46% from a taxable investment to produce an after-tax
yield equal to the Fund's tax-exempt yield of 3.08% and an effective yield
of 4.54% from a taxable investment to produce an after-tax yield equal to
the Fund's tax-exempt effective yield of 3.13%. See below for information
on how the Fund's tax-exempt yield and tax-exempt effective yield are
calculated.
The yield of each Fund is computed by determining the percentage net
change, excluding capital changes, in the value of an investment in one
share of such Fund over the base period, and multiplying the net change by
365/7 (or approximately 52 weeks). A Fund's effective yield represents a
compounding of the yield by adding 1 to the number representing the
percentage change in value of the investment during the base period,
raising that sum to a power equal to 365/7, and subtracting 1 from the
result.
In the case of Cash Resource Tax-Exempt Money Market Fund, the Fund's
tax-equivalent yield during the base period may be presented for
shareholders in one or more stated tax brackets. Tax-equivalent yield is
calculated by adjusting the Fund's tax-exempt yield by a factor designed to
show the approximate yield that a taxable investment would have to earn to
produce an after-tax yield equal, for that shareholder, to the Fund's tax-
exempt yield. The Fund's tax-equivalent yield will differ for shareholders
in other tax brackets.
From time to time, Commonwealth Advisors may reduce its compensation
or assume expenses of a Fund in order to reduce a Fund's expenses, as
described in the Trust's current prospectus. Any such waiver or assumption
would increase that Fund's yield during the period of the waiver or
assumption.
Independent statistical agencies measure a Fund's investment
performance and publish comparative information showing how the Fund, and
other investment companies, performed in specified time periods. Three
agencies whose reports are commonly used for such comparisons are set forth
below. From time to time, a Fund may distribute these comparisons to its
shareholders or to potential investors. THE AGENCIES LISTED BELOW MEASURE
PERFORMANCE BASED ON THEIR OWN CRITERIA RATHER THAN ON THE STANDARDIZED
PERFORMANCE MEASURES DESCRIBED IN THE PRECEDING SECTION.
LIPPER ANALYTICAL SERVICES, INC. distributes mutual fund rankings
monthly. The rankings are based on total return performance
calculated by Lipper, reflecting generally changes in net asset value
adjusted for reinvestment of capital gains and income dividends. They
do not reflect deduction of any sales charges. Lipper rankings cover
a variety of performance periods, for example year-to-date, 1-year, 5-
year, and 10-year performance. Lipper classifies mutual funds by
investment objective and asset category.
MORNINGSTAR, INC. distributes mutual fund ratings twice a month. the
ratings are divided into five groups: highest, above average,
neutral, below average and lowest. They represent a fund's historical
risk/reward ratio relative to other funds with similar objectives.
The performance factor is a weighted-average assessment of the Fund's
3-year, 5-year, and 10-year total return performance (if available)
reflecting deduction of expenses and sales charges. Performance is
adjusted using quantitative techniques to reflect the risk profile of
the fund. The ratings are derived from a purely quantitative system
that does not utilize the subjective criteria customarily employed by
rating agencies such as Standard & Poor's Corporation and Moody's
Investor Service, Inc.
WEISENBERGER'S MANAGEMENT RESULTS publishes mutual fund rankings and
is distributed monthly. The rankings are based entirely on total
return calculated by Weisenberger for periods such as year-to-date, 1-
year, 3-year, 5-year and 10-year performance. Mutual funds are ranked
in general categories (e.g., international bond, international equity,
municipal bond, and maximum capital gain). Weisenberger rankings do
not reflect deduction of sales charges or fees.
Independent publications may also evaluate a Fund's performance.
Certain of those publications are listed below, at the request of Mentor
Distributors, which bears full responsibility for their use and the
descriptions appearing below. From time to time any or all of the Funds
may distribute evaluations by or excerpts from these publications to its
shareholders or to potential investors. The following illustrates the
types of information provided by these publications.
BUSINESS WEEK publishes mutual fund rankings in its Investment Figures
of the Week column. The rankings are based on 4-week and 52-week
total return reflecting changes in net asset value and the
reinvestment of all distributions. They do not reflect deduction of
any sales charges. Funds are not categorized; they compete in a large
universe of over 2,000 funds. The source for rankings is data
generated by Morningstar, Inc.
INVESTOR'S BUSINESS DAILY publishes mutual fund rankings on a daily
basis. The rankings are depicted as the top 25 funds in a given
category. The categories are based loosely on the type of fund, e.g.,
growth funds, balanced funds, U.S. government funds, GNMA funds,
growth and income funds, corporate bond funds, etc. Performance
periods for sector equity funds can vary from 4 weeks to 39 weeks;
performance periods for other fund groups vary from 1 year to 3 years.
Total return performance reflects changes in net asset value and
reinvestment of dividends and capital gains. The rankings are based
strictly on total return. They do not reflect deduction of any sales
charges Performance grades are conferred from A+ to E. An A+ rating
means that the fund has performed within the top 5% of a general
universe of over 2000 funds; an A rating denotes the top 10%; an A- is
given to the top 15%, etc.
BARRON's periodically publishes mutual fund rankings. The rankings
are based on total return performance provided by Lipper Analytical
Services. The Lipper total return data reflects changes in net asset
value and reinvestment of distributions, but does not reflect
deduction of any sales charges. The performance periods vary from
short-term intervals (current quarter or year-to-date, for example) to
long-term periods (five-year or ten-year performance, for example).
Barron's classifies the funds using the Lipper mutual fund categories,
such as Capital Appreciation Funds, Growth Funds, U.S. Government
Funds, Equity Income Funds, Global Funds, etc. Occasionally, Barron's
modifies the Lipper information by ranking the funds in asset classes.
"Large funds" may be those with assets in excess of $25 million;
"small funds" may be those with less than $25 million in assets.
THE WALL STREET JOURNAL publishes its Mutual Fund Scorecard on a daily
basis. Each Scorecard is a ranking of the top-15 funds in a given
Lipper Analytical Services category. Lipper provides the rankings
based on its total return data reflecting changes in net asset value
and reinvestment of distributions and not reflecting any sales
charges. The Scorecard portrays 4-week, year-to-date, one-year and 5-
year performance; however, the ranking is based on the one-year
results. The rankings for any given category appear approximately
once per month.
FORTUNE magazine periodically publishes mutual fund rankings that have
been compiled for the magazine by Morningstar, Inc. Funds are placed
in stock or bond fund categories (for example, aggressive growth stock
funds, growth stock funds, small company stock funds, junk bond funds,
Treasury bond funds etc.), with the top-10 stock funds and the top-5
bond funds appearing in the rankings. The rankings are based on 3-
year annualized total return reflecting changes in net asset value and
reinvestment of distributions and not reflecting sales charges.
Performance is adjusted using quantitative techniques to reflect the
risk profile of the fund.
MONEY magazine periodically publishes mutual fund rankings on a
database of funds tracked for performance by Lipper Analytical
Services. The funds are placed in 23 stock or bond fund categories
and analyzed for five-year risk adjusted return. Total return
reflects changes in net asset value and reinvestment of all dividends
and capital gains distributions and does not reflect deduction of any
sales charges. Grades are conferred (from A to E): the top 20% in
each category receive an A, the next 20% a B, etc. To be ranked, a
fund must be at least one year old, accept a minimum investment of
$25,000 or less and have had assets of at least $25 million as of a
given date.
FINANCIAL WORLD publishes its monthly Independent Appraisals of Mutual
Funds, a survey of approximately 1000 mutual funds. Funds are
categorized as to type, e.g., balanced funds, corporate bond funds,
global bond funds, growth and income funds, U.S. government bond
funds, etc. To compete, funds must be over one year old, have over $1
million in assets, require a maximum of $10,000 initial investment,
and should be available in at least 10 states in the United States.
The funds receive a composite past performance rating, which weighs
the intermediate -- and long-term past performance of each fund versus
its category, as well as taking into account its risk, reward to risk,
and fees. An A+ rated fund is one of the best, while a D- rated fund
is one of the worst. The source for Financial World rating is
Schabacker investment management in Rockville, Maryland.
FORBES magazine periodically publishes mutual fund ratings based on
performance over at least two bull and bear market cycles. The funds
are categorized by type, including stock and balanced funds, taxable
bond funds, municipal bond funds, etc. Data sources include Lipper
Analytical Services and CDA Investment Technologies. The ratings are
based strictly on performance at net asset value over the given
cycles. Funds performing in the top 5% receive an A+ rating; the top
15% receive an A rating; and so on until the bottom 5% receive an F
rating. Each fund exhibits two ratings, one for performance in "up"
markets and another for performance in "down" markets.
KIPLINGER's PERSONAL FINANCE MAGAZINE (formerly Changing Times),
periodically publishes rankings of mutual funds based on one-, three-
and five-year total return performance reflecting changes in net asset
value and reinvestment of dividends and capital gains and not
reflecting deduction of any sales charges. Funds are ranked by
tenths: a rank of 1 means that a fund was among the highest 10% in
total return for the period; a rank of 10 denotes the bottom 10%.
Funds compete in categories of similar funds -- aggressive growth
funds, growth and income funds, sector funds, corporate bond funds,
global governmental bond funds, mortgage-backed securities funds, etc.
Kiplinger's also provides a risk-adjusted grade in both rising and
falling markets. Funds are graded against others with the same
objective. The average weekly total return over two years is
calculated. Performance is adjusted using quantitative techniques to
reflect the risk profile of the fund.
U.S. NEWS AND WORLD REPORT periodically publishes mutual fund rankings
based on an overall performance index (OPI) devised by Kanon Bloch
Carre & Co., a Boston research firm. Over 2000 funds are tracked and
divided into 10 equity, taxable bond and tax-free bond categories.
Funds compete within the 10 groups and three broad categories. The
OPI is a number from 0-100 that measures the relative performance of
funds at least three years old over the last 1, 3, 5 and 10 years and
the last six bear markets. Total return reflects changes in net asset
value and the reinvestment of any dividends and capital gains
distributions and does not reflect deduction of any sales charges.
Results for the longer periods receive the most weight.
THE 100 BEST MUTUAL FUNDS YOU CAN BUY (1992), authored by Gordon K.
Williamson. The author's list of funds is divided into 12 equity and
bond fund categories, and the 100 funds are determined by applying
four criteria. First, equity funds whose current management teams
have been in place for less than five years are eliminated. (The
standard for bond funds is three years.) Second, the author excludes
any fund that ranks in the bottom 20 percent of its category's risk
level. Risk is determined by analyzing how many months over the past
three years the fund has underperformed a bank CD or a U.S. Treasury
bill. Third, a fund must have demonstrated strong results for current
three-year and five-year performance. Fourth, the fund must either
possess, in Mr. Williamson's judgment, "excellent" risk-adjusted
return or "superior" return with low levels of risk. Each of the 100
funds is ranked in five categories: total return, risk/volatility,
management, current income and expenses. The rankings follow a five-
point system: zero designates "poor"; one point means "fair"; two
points denote "good"; three points qualify as a "very good"; four
points rank as "superior"; and five points mean "excellent.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Trust and requires that notice of
such disclaimer be given in each agreement, obligation, or instrument
entered into or executed by the Trust or the Trustee. The Agreement and
Declaration of Trust provides for indemnification out of a Fund's property
for all loss and expense of any shareholder held personally liable for the
obligations of a Fund. Thus the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to
circumstances in which a Fund would be unable to meet its obligations.
<PAGE>
Cash Resource Trust
MONEY-MARKET FUND
Portfolio of Investments
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
CORPORATE OBLIGATIONS 3.08%
(a) Abbey National Treasury Service, 5.74%, 11/16/95 $ 8,000 $ 7,999
(a) Boatmen's Bank of Southern Missouri, 6.06%, 8/04/95 5,000 5,000
TOTAL CORPORATE OBLIGATIONS 12,999
BANKERS ACCEPTANCES 5.42%
Nations Bank, 6.00%, 8/28/95 5,000 4,978
Swiss Bank, 5.85%, 10/20/95 3,000 2,961
Sanwa, 5.85%, 8/14/95 15,000 15,000
TOTAL BANKERS ACCEPTANCES 22,939
BANK OBLIGATIONS 13.72%
Banc One Milwaukee, 5.96%, 9/11/95 15,000 15,000
Bank Of America, 5.75%, 8/21/95 18,000 18,000
First of America, 6.00%, 8/10/95 15,000 15,000
Nations Bank, 6.06%, 10/12/95 10,000 10,000
TOTAL BANK OBLIGATIONS 58,000
COMMERCIAL PAPER 60.75%
ASSET BACKED SECURITIES 3.51%
CIESCO Limited Partnership, 5.68%, 10/13/95 15,000 14,827
CHEMICALS & ALLIED PRODUCTS 7.06%
DIC Americas, Inc., 5.97%, 8/14/95 15,000 14,968
Dupont E I De Nemours, 5.92%, 9/22/95 15,000 14,871
Total Chemicals & Allied Products 29,839
COMMERCIAL BANKS 7.01%
First Union Corporation, 5.68%, 10/31/95 15,000 14,785
Internationale Nederland, 5.95%, 8/28/95 5,000 4,978
Internationale Nederland, 5.68%, 10/20/95 10,000 9,874
Total Commercial Banks 29,637
COMPUTER PROCESSING, DATA PREPARATION SERVICES 3.52%
Electronic Data Systems Corporation,
5.70%, 9/15/95 15,000 14,893
ELECTRIC SERVICES 4.30%
National Rural Utilities, 5.72%, 8/29/95 10,000 9,956
Rincon Securities, Inc., 6.02%, 8/01/95 1,245 1,245
Rincon Securities, Inc., 5.95%, 8/11/95 2,170 2,166
Rincon Securities, Inc., 5.97%, 8/17/95 2,000 1,995
Rincon Securities, Inc., 5.73%, 9/26/95 2,845 2,820
Total Electric Services 18,182
</TABLE>
<PAGE>
Cash Resource Trust
MONEY-MARKET FUND
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
FARM MACHINERY & EQUIPMENT 3.53%
Kubota Finance USA, 5.77%, 8/31/95 $ 15,000 $ 14,928
OIL AND GAS FIELD EXPLORATION SERVICES 3.54%
Statoil, 5.73%, 8/18/95 15,000 14,959
PERSONAL CREDIT INSTITUTIONS 10.61%
American Express Credit Corporation, 5.93%, 8/15/95 15,000 14,965
Associate Corporation of North America, 5.73%, 8/22/95 15,000 14,950
Ford Motor Credit Company, 5.74%, 8/25/95 15,000 14,943
Total Personal Credit Institutions 44,858
PRIMARY PRODUCTION OF ALUMINUM 2.61%
Queensland Alumina Ltd., 5.73%, 8/29/95 11,072 11,023
RENTAL & LEASING 2.35%
General Electric Capital Corporation, 6.09%, 8/21/95 3,000 2,990
General Electric Capital Corporation, 6.03%, 9/18/95 7,000 6,944
Total Rental & Leasing 9,934
SECURITY BROKERS & DEALERS 9.42%
Bears Stearns Company , 5.95%, 8/23/95 10,000 9,964
CS First Boston, 5.75%, 8/18/95 8,000 7,978
CS First Boston, 6.04%, 8/28/95 5,000 4,977
CS First Boston, 6.11%, 8/31/95 2,000 1,990
Merrill Lynch, 5.72%, 8/25/95 7,000 6,973
Merrill Lynch, 6.12%, 9/11/95 8,000 7,944
Total Security Brokers & Dealers 39,826
TELECOMMUNICATIONS 3.27%
AT&T Capital Corporation, 5.68%, 10/30/95 4,000 3,943
Bellsouth Capital Funding, 6.09%, 10/02/95 10,000 9,895
Total Telecommunications 13,838
TOTAL COMMERCIAL PAPER 256,744
U.S. GOVERNMENT AND AGENCIES 10.65%
Federal Home Loan Bank,
6.20%, 5/24/96 5,000 5,000
(a) 6.04% - 6.17%, 12/23/96 - 2/14/97 15,000 15,000
</TABLE>
<PAGE>
Cash Resource Trust
MONEY-MARKET FUND
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCIES (CONTINUED)
(a) Student Loan Market Association,
5.81% - 5.84%, 11/24/97 - 2/22/99 $ 25,000 $ 24,996
TOTAL U.S. GOVERNMENT AND AGENCIES 44,996
REPURCHASE AGREEMENTS 6.18%
Goldman, Sachs & Company
Dated 7/31/95, 5.83%, due 8/01/95, collateralized by
$6,512 Federal National Mortgage Association,
6.00%, 10/01/08 6,134 6,134
United Bank of Switzerland
Dated 7/31/95, 5.86%, due 8/01/95, collateralized by
$5,119 Federal Home Loan Mortgage Corporation,
6.00% - 6.50%, 11/15/08 - 2/15/23 and
$23,415 Federal National Mortgage Association,
6.00%, 12/15/08 20,000 20,000
TOTAL REPURCHASE AGREEMENTS 26,134
TOTAL INVESTMENTS (COST $421,812) 99.80% 421,812
OTHER ASSETS LESS LIABILITIES 0.20% 845
NET ASSETS 100.00% $422,657
</TABLE>
SEE NOTES TO PORTFOLIOS OF INVESTMENTS.
<PAGE>
`Cash Resource Trust
U.S. GOVERNMENT MONEY-MARKET FUND
Portfolio of Investments
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCIES 57.40%
Federal Farm Credit Bank
6.02%, 8/01/95 $ 35,000 $ 35,000
Federal Home Loan Bank
5.63% - 6.27%, 8/07/95 - 5/24/96 265,090 262,143
(a) 5.71% - 6.04%, 3/08/96 - 2/16/99 62,000 62,000
Federal Home Loan Mortgage Corporation
5.55% - 5.94%, 8/10/95 - 11/09/95 118,235 117,012
Federal National Mortgage Association
5.68% - 5.91%, 8/09/95 - 9/11/95 110,000 109,719
(a) Student Loan Market Association
5.81% - 6.08%, 7/01/96 - 02/08/99 112,500 112,498
TOTAL U.S. GOVERNMENT AND AGENCIES 698,372
REPURCHASE AGREEMENTS 42.77%
Chase Securities, Inc.
Dated 7/31/95, 5.82%, due 8/01/95, collateralized by
$54,383 Federal National Mortgage Association,
6.50% - 7.52%, 7/01/99 - 10/01/24 and
$11,196 Federal Home Loan Mortgage Corporation,
6.00% - 7.50%, 10/01/00 - 11/01/09 60,000 60,000
Goldman, Sachs & Company
Dated 7/31/95, 5.83%, due 8/01/95, collateralized by
$94,398 Federal National Mortgage Association,
6.00% - 6.50%, 10/01/08 - 4/01/09 and
$132,030 Federal Home Loan Mortgage Corporation,
7.00%, 2/01/00 220,430 220,430
Merrill Lynch, Pierce, Fenner & Smith, Inc.
Dated 7/31/95, 5.79%, due 8/01/95, collateralized by
$37,425 Federal National Mortgage Association,
7.00% - 8.50%, 7/01/17 - 8/01/25 and
$24,786 Federal Home Loan Mortgage Corporation,
6.50%, 3/01/09 60,000 60,000
</TABLE>
<PAGE>
Cash Resource Trust
U.S. GOVERNMENT MONEY-MARKET FUND
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Nationsbank Corporation
Dated 7/31/95, 5.80%, due 8/01/95, collateralized by
$57,600 U.S. T reasury Notes, 6.88% - 7.50%,
8/31/99 - 10/31/99 $ 60,000 $ 60,000
Paine Webber, Inc.
Dated 7/31/95, 5.80%, due 8/01/95, collateralized by
$63,613 Government National Mortgage Association,
7.50% - 8.00%, 11/15/23 - 6/15/25 60,000 60,000
United Bank of Switzerland
Dated 7/31/95, 5.88%, due 8/01/95, collateralized
by $5,300 Federal Home Loan Mortgage Corporation
6.50%, 2/15/23 and $147,552 Federal National
Mortgage Association - Strips, 5.92% - 13.08%,
4/01/23 - 10/01/24 60,000 60,000
TOTAL REPURCHASE AGREEMENTS 520,430
TOTAL INVESTMENTS 100.17% 1,218,802
OTHER ASSETS LESS LIABILITIES (0.17%) (2,112)
NET ASSETS 100.00% $1,216,690
</TABLE>
SEE NOTES TO PORTFOLIOS OF INVESTMENTS.
<PAGE>
Cash Resource Trust
TAX-EXEMPT MONEY-MARKET FUND
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
(a) VARIABLE RATE TAX-EXEMPT
DEMAND SECURITIES 48.23%
ALABAMA 3.29%
BNC Special Care Facility, Finance Authority
Series B, 3.75%, 12/01/30 $ 2,070 $ 2,070
University of Alabama, Board of Trustees,
3.80%, 10/01/13 6,700 6,700
8,770
ARIZONA 3.75%
Apache County IDA, Tucson Electric Power
Company Project, 3.85%, 6/15/20 10,000 10,000
CALIFORNIA 0.37%
Corona IDA, 4.05%, 12/01/04 1,000 1,000
COLORADO 5.32%
Colorado Housing Finance Authority MFH,
Series 1985, 3.85%, 5/01/97 7,200 7,200
Moffatt County, PCRB, Series 1984, 3.90%, 7/01/10 7,000 7,000
14,200
CONNECTICUT 0.56%
State of Connecticut Economic Recovery,
Series B, 3.75%, 6/01/96 1,500 1,500
IOWA 1.12%
Polk County, Iowa Hospital, 3.85%, 12/01/05 3,000 3,000
ILLINOIS 5.92%
Chicago O'Hare International Airport, American
Airlines, Series 1983C, 4.00%, 1/01/18 2,000 2,000
Illinois DFA Grayhill, Grayhill Inc. Project
IDR, 3.90%, 2/01/05 3,500 3,500
Illinois HFA Condell Medical Center,
3.90%, 11/01/05 5,800 5,800
Illinois HFA West Suburban Hospital, 3.85%, 7/01/05 3,200 3,200
Southwestern Illinois Development Authority,
4.00%, 4/01/22 1,300 1,300
15,800
</TABLE>
<PAGE>
Cash Resource Trust
TAX-EXEMPT MONEY-MARKET FUND
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
(a) VARIABLE RATE TAX-EXEMPT
DEMAND SECURITIES (CONTINUED)
MARYLAND 1.82%
Anne Arundel County, Oakland Hills Project
3.85%, 5/15/15 $ 2,052 $ 2,052
Howard County Revenue Bond, Harmony Hall
Inc. Project, 3.85%, 10/01/10 2,800 2,800
4,852
MISSOURI 0.64%
Missouri Health & Education, Series B,
3.70%, 12/01/19 1,700 1,700
MISSISSIPPI 0.60%
Jackson County, PCRB, 3.80%, 12/01/16 1,600 1,600
NORTH CAROLINA 6.71%
Durham County Public Improvement, 3.80%, 5/01/06 200 200
Durham County Water & Sewer, 3.80%, 12/01/15 2,800 2,800
Lincoln County Industrial Facility, PCRB
Series 1994, 4.05%, 8/01/09 6,000 6,000
North Carolina Educational Facilities,
Bowman Grey School, 3.85%, 9/01/20 4,200 4,200
North Carolina Medical Care, Moses
Cone Hospital, Series 1995, 3.80%, 9/01/02 4,700 4,700
17,900
NEBRASKA 0.75%
Nebraska IDA, Freemont Beef Project,
4.05%, 12/01/04 2,000 2,000
NEW HAMPSHIRE 3.75%
New Hampshire Health & Higher Education,
Series E, 3.75%, 12/01/25 10,000 10,000
NEW MEXICO 1.87%
City of Albuquerque, Airport Revenue Bond
Series 1995, 3.75%, 7/01/14 5,000 5,000
TENNESSEE 0.80%
Nashville and Davidson County Health
and Education Facility, 3.90%, 5/01/20 2,144 2,144
</TABLE>
<PAGE>
Cash Resource Trust
TAX-EXEMPT MONEY-MARKET FUND
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
(a) VARIABLE RATE TAX-EXEMPT
DEMAND SECURITIES (CONTINUED)
TEXAS 3.86%
North Texas Higher Education, Student Loan
Revenue Refund, Series 1991F, 3.90%, 4/01/20 $ 4,000 $ 4,000
Panhandle Plains, Student Loan Revenue,
Series A, 3.90%, 6/01/21 1,300 1,300
Red River Authority, PCRB, 3.70%, 7/01/11 5,000 5,000
10,300
VIRGINIA 6.35%
Chesterfield County IDR, Midlothian Hotel
Partnership, 3.85%, 12/01/14 6,424 6,424
IDA of Henrico County, Hermitage Project,
4.05%, 5/01/24 1,600 1,600
Lynchburg IDA, Mid-Atlantic, Series G,
3.75%, 12/01/25 500 500
Richmond IDR, Commonwealth Park,
3.90%, 11/01/07 1,432 1,432
Roanoke IDR, Quibell Corporate Project,
3.85%, 9/01/15 292 292
Spotsylvania City , IDA, Residential Care
Facilities, 3.85%, 10/01/20 4,684 4,684
Tazewell County, IDR, 4.25%, 1/01/03 1,100 1,100
Virginia Beach, Revenue Bond, 3.90%, 9/01/09 420 420
Virginia State HDA, Series A,
3.85%, 9/01/17 500 500
16,952
WISCONSIN 0.75%
Village of Pleasant Prairie, Muskie Enterprise
Project, Series 1995, 4.00%, 5/01/15 2,000 2,000
TOTAL VARIABLE RATE TAX-EXEMPT DEMAND SECURITIES 128,718
OTHER TAX-EXEMPT SECURITIES 51.50%
COLORADO 1.50%
Arapahoe County, Revenue Bond, Series L,
4.45%, 8/31/95 4,000 4,000
</TABLE>
<PAGE>
Cash Resource Trust
TAX-EXEMPT MONEY-MARKET FUND
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
July 31, 1995 PRINCIPAL VALUE
(in thousands) PERCENT OF NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C> <C>
OTHER TAX-EXEMPT SECURITIES (CONTINUED)
FLORIDA 4.53%
Jacksonville, Florida Power & Light, PCRB,
Series 1994, 4.10%, 12/15/95 $ 2,000 $ 2,000
Putnam County, Development Authority,
Seminole Electric, Series 1984, 3.40%, 12/15/95 3,100 3,100
St. Lucie City, Florida Power & Light, PCRB,
4.15%, 8/08/95 3,000 3,000
Sarasota City Public Hospital, 4.15%, 8/25/95 1,500 1,500
Sunshine State Government Finance Commission,
Series 1986, Revenue Bond, 3.70%, 10/24/95 2,500 2,500
12,100
ILLINOIS 4.01%
City of Chicago GO, Series 1994 A-2,
3.50%, 10/31/95 5,000 5,000
City of Chicago GO, Series 1995 A,
4.60%, 10/31/95 3,890 3,890
Fulton Solid Waste Facility, Revenue Bond,
Series A, 4.35%, 9/07/95 1,800 1,800
10,690
KANSAS 1.87%
Burlington Revenue Refund Bond,
3.05%, 10/20/95 5,000 5,000
LOUISIANA 1.87%
Plaquemines Port Harbor, Series C
3.10%, 8/17/95 5,000 5,000
MARYLAND 1.14%
Anne Arundel County, Baltimore Gas & Electric,
4.20%, 8/17/95 3,050 3,050
MINNESOTA 2.44%
Rochester Health Care, Series C, 3.80%, 8/23/95 500 500
Rochester Health Care, Series C, 4.10%, 8/23/95 5,000 5,000
University of Minnesota Revenue Bond,
4.15%, 8/25/95 1,000 1,000
6,500
MISSISSIPPI 1.87%
Claiborne County, PCRB, 3.70%, 09/07/95 5,000 5,000
</TABLE>
<PAGE>
Cash Resource Trust
TAX-EXEMPT MONEY-MARKET FUND
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
July 31, 1995 PERCENT OF PRINCIPAL VALUE
(in thousands) NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C>
OTHER TAX-EXEMPT SECURITIES (CONTINUED)
NORTH CAROLINA 3.67%
Wake County Industrial Facility, Series 1990,
4.15%, 8/22/95 $ 4,800 $ 4,800
Wake County Industrial Facility, Series 1990,
4.15%, 8/30/95 5,000 5,000
9,800
NEW HAMPSHIRE 0.75%
New Hampshire, New England Power
Series 1990A, 4.25%, 8/09/95 2,000 2,000
NEVADA 1.35%
Washoe County Water Facility, 4.20%, 8/16/95 3,600 3,600
SOUTH CAROLINA 2.62%
York County, PCRB, Series 1984N-3, 4.55%, 8/15/95 2,000 2,000
York County, PCRB, Series 1984N-3, 4.30%, 9/15/95 5,000 5,000
7,000
TEXAS 5.51%
Brazos Harbor Industrial Development,
Series 1986, 3.70%, 10/20/95 2,700 2,700
Brazos Harbor Industrial Development,
Series 1986, 3.75%, 10/20/95 1,000 1,000
Harris City Health Care, 4.13%, 8/28/95 4,700 4,700
San Antonio Electric & Gas, Series A,
3.10%, 10/16/95 3,000 3,000
San Antonio Electric & Gas, Series A,
3.70%, 10/16/95 300 300
Texas A&M University, Series B,
3.90%, 10/27/95 3,000 3,000
14,700
VIRGINIA 10.64%
IDA of Louisa County, Series 1984, 4.15%, 8/08/95 250 250
Peninsula Port Authority, 3.25%, 9/08/95 3,135 3,135
Virginia State Housing Development, Series A,
3.45%, 9/12/95 7,000 7,000
Virginia State Housing Development, Series F,
4.12%, 9/12/95 10,000 10,000
York County, IDA, PCRB, 4.30%, 8/24/95 8,000 8,000
28,385
</TABLE>
<PAGE>
Cash Resource Trust
TAX-EXEMPT MONEY-MARKET FUND
<TABLE>
<CAPTION> PERCENT OF PRINCIPAL VALUE
NET ASSETS AMOUNT (NOTE 2)
<S> <C> <C> <C>
OTHER TAX-EXEMPT SECURITIES (CONTINUED)
WEST VIRGINIA 3.75%
West Virginia HDA, 3.85%, 9/01/95 $ 10,000 $ 10,000
OTHER 3.98%
PNC Municash, 3.77%, 8/01/95 10,619 10,619
TOTAL OTHER TAX-EXEMPT SECURITIES 137,444
TOTAL INVESTMENTS (COST $266,162) 99.73% 266,162
OTHER ASSETS LESS LIABILITIES 0.27% 733
NET ASSETS 100.00% $266,895
</TABLE>
Notes to Portfolios of Investments
NOTE (a):
Floating Rate Securities- The rates shown are the effective rates at July 31,
1995. Securities shown without a date are payable within five business days and
are backed by credit support agreements from banks or insurance institutions.
NOTE (b):
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in Note (a). For each security, cost (for
financial reporting and federal income tax purposes) and carrying value are the
same.
INVESTMENT ABBREVIATIONS
DFA Development Finance Authority
GO General Obligation
HDA Housing Development Authority
HFA Housing Finance Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
MFH Multi-family Housing
PCRB Pollution Control Revenue Board
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
Cash Resource Trust
STATEMENTS OF ASSETS AND LIABILITIES
July 31, 1995
(in thousands)
<TABLE>
<CAPTION>
MONEY- U.S. GOVERNMENT TAX-EXEMPT
MARKET MONEY-MARKET MONEY-MARKET
FUND FUND FUND
<S> <C> <C> <C>
ASSETS
Investments, at amortized cost (Note 2)
Investment securities $395,678 $ 698,372 $266,162
Repurchase agreements 26,134 520,430 -
Total investments 421,812 1,218,802 266,162
Receivables
Interest 1,260 2,835 1,444
Shares of the portfolio sold 1,280 127 16
Deferred expenses (Note 2) 92 429 94
Other 1 199 90
Total assets 424,445 1,222,392 267,806
LIABILITIES
Payables
Dividends 839 2,320 317
Shares of the portfolio redeemed 866 3,161 542
Accrued distribution fee (Note 3) 26 76 15
Accrued expenses and other liabilities 57 145 37
Total liabilities 1,788 5,702 911
NET ASSETS $422,657 $1,216,690 $266,895
Shares outstanding 422,657 1,216,743 266,898
Net asset value per share $ 1.00 $ 1.00 $ 1.00
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
Cash Resource Trust
STATEMENTS OF OPERATIONS
Year Ended July 31, 1995
<TABLE>
<CAPTION>
MONEY- U.S. GOVERNMENT TAX-EXEMPT
MARKET MONEY-MARKET MONEY-MARKET
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME
Interest $16,250 $56,663 $8,258
EXPENSES
Distribution fee (Note 3) 1,061 3,764 730
Transfer agent fee (Note 3) 468 2,235 223
Management fee (Note 3) 616 2,098 487
Custodian and accounting fees 53 425 98
Shareholder reports 41 172 39
Professional fees 9 28 7
Registration fees 35 89 38
Organizational expenses 6 30 7
Directors' fees 6 12 6
Other 6 30 7
Total expenses 2,301 8,883 1,642
Deduct
Waiver of management fee (Note 3) - - 49
Net expenses 2,301 8,883 1,593
NET INVESTMENT INCOME 13,949 47,780 6,665
Realized gain (loss) on investments
Net realized gain (loss) on investments sold 4 (53) (3)
Net increase in net assets resulting
from operations $13,953 $47,727 $6,662
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
Cash Resource Trust
STATEMENTS OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
MONEY- U.S. GOVERNMENT TAX-EXEMPT
MARKET MONEY-MARKET MONEY-MARKET
FUND FUND FUND
YEAR ENDED JULY 31, 1995 1994* 1995 1994* 1995 1994*
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net investment income $ 13,949 $ 3,670 $ 47,780 $17,828 $ 6,665 $2,442
Net realized gain (loss) on
investments sold 4 - (53) - (3) -
Increase in net assets from operations 13,953 3,670 47,727 17,828 6,662 2,442
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (13,949) (3,670) (47,780) (17,828) (6,665) (2,442)
Net realized gain on investments (4) - - - - -
Net decrease from distributions (13,953) (3,670) (47,780) (17,828) (6,665) (2,442)
CAPITAL SHARE TRANSACTIONS (AT $1.00 PER SHARE)
Net proceeds from sale of shares 1,715,060 712,269 4,322,307 3,572,904 1,029,842 732,212
Reinvestment of dividends 13,420 3,289 46,908 16,053 6,528 2,194
Cost of shares redeemed (1,498,083) (523,298) (4,060,291) (2,681,138) (965,174) (538,704)
Change in net assets from
capital share transactions 230,397 192,260 308,924 907,819 71,196 195,702
Net increase in net assets 230,397 192,260 308,871 907,819 71,193 195,702
NET ASSETS
Beginning of period 192,260 - 907,819 - 195,702 -
End of period $ 422,657 $ 192,260 $ 1,216,690 $907,819 $ 266,895 $ 195,702
</TABLE>
* For the period from December 20, 1993 (commencement of operations) to July
31, 1994
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Cash Resource Trust
NOTES TO FINANCIAL STATEMENTS
July 31, 1995
NOTE 1: ORGANIZATION
Cash Resource Trust ("Trust") was organized on June 14, 1993 and is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Trust consists of three separate diversified funds
(hereinafter each individually referred to as a Fund or collectively as the
"Funds") at July 31, 1995 as follows:
Cash Resource Money-Market Fund ("Money-Market Fund")
Cash Resource U.S. Government Money-Market Fund ("U.S. Government Fund")
Cash Resource Tax-Exempt Money-Market Fund ("Tax-Exempt Fund")
The assets of each Fund of the Trust are segregated and a shareholder's interest
is limited to the Fund in which shares are held.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds:
A. VALUATION OF SECURITIES
Investments are stated at amortized cost, which approximates market value. In
the event that a deviation of 1/2 of 1% or more exists between a Fund's $1.00
per share net asset value, calculated at amortized cost, and the net asset value
calculated by reference to market-based values, or if there is any other
deviation that the Board of Trustees believes would result in a material
dilution to shareholders or purchasers, the Board of Trustees will promptly
consider what action should be initiated.
B. REPURCHASE AGREEMENTS
It is the policy of the Trust to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book entry system, or to
have segregated within the custodian bank's vault all securities held as
collateral in support of repurchase agreement investments. Additionally,
procedures have been established by the Trust to monitor, on a daily basis, the
market value of each repurchase agreement's underlying securities to ensure the
existence of a proper level of collateral.
The Trust will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers which are deemed by the
Trust's adviser to be creditworthy pursuant to guidelines established by the
Board of Trustees. Risks may arise from the potential inability of
counterparts to honor the terms of the repurchase agreement. Accordingly, the
Trust could receive less than the repurchase price on the sale of collateral
securities.
Cash Resource Trust
C. SECURITY TRANSACTIONS AND INTEREST INCOME
Security transactions for the Funds are accounted for on a trade date basis.
Interest income is recorded on the accrual basis and includes amortization of
premium and discount on investments.
D. EXPENSES
Expenses arising in connection with a Fund are allocated to that Fund. Other
Trust expenses are allocated among the Funds in proportion to their relative net
assets.
E. FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Fund shares are sold and redeemed on a continual basis at net asset value. The
net asset value per share (NAV) of each Fund is determined daily as of 4:00 p.m.
on each day that the New York Stock Exchange is open for trading. Each Fund
determines its NAV by dividing the total value of the Fund's investments and
other assets, less liabilities, by the number of Fund shares outstanding. Each
Fund declares a daily dividend, equal to its net investment income for that day
and payable at month end. Distributions from net realized capital gains, if
any, are paid annually.
F. FEDERAL INCOME TAXES
No provision for federal income taxes has been made since it is each Fund's
policy to comply with the provisions applicable to regulated investment
companies under the Internal Revenue Code and to distribute to its shareholders
within the allowable time limit substantially all taxable income and realized
capital gains.
At July 31, 1995, Government Money-Market Fund for federal tax purposes, had a
capital loss carryforward of approximately $54,000. Pursuant to the Code,
such capital loss carryforwards expire as follows: $1,000 in 2002 and $53,000 in
2003.
G. DEFERRED EXPENSES
Costs incurred by the Trust in connection with its initial share registration
and organization costs were deferred by the Funds and are being amortized on a
straight-line basis over a five year period through December 1998.
NOTE 3: INVESTMENT MANAGEMENT AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGEMENT AGREEMENT
Commonwealth Advisors, Inc. (formerly Cambridge Investment Advisors, Inc.) the
Funds' investment adviser ("Investment Adviser") provides investment advisory
services to each of the Funds. Commonwealth Investment Counsel, Inc.
("Commonwealth"), an affiliate of the Investment Adviser, serves as sub-adviser
to each of the Funds, pursuant to a sub-advisory agreement among the Investment
Adviser, Commonwealth and the Trust. Commonwealth furnishes a continuing
investment program for each of the Funds and makes investment decisions on their
behalf.
Cash Resource Trust
The Investment Adviser and Commonwealth are wholly-owned subsidiaries of Mentor
Investment Group, Inc. ("Mentor") (formerly Investment Management Group, Inc.),
which is in turn a wholly-owned subsidiary of Wheat First Butcher Singer, Inc.
("Wheat").
Each Fund pays management fees to the Investment Adviser monthly at the
following annual rates, expressed as a percentage of average daily net assets:
0.22% of the first $500 million of each Fund's average net assets; 0.20% of the
next $500 million; 0.175% of the next $1 billion; 0.16% of the next $1 billion;
and 0.15% of any amounts over $3 billion. The Investment Adviser in turn pays
fees from its own assets to Commonwealth monthly at the following annual rates
(based on the assets of each Fund taken separately): 0.17% of the first $500
million of a Fund's average net assets; 0.15% of the next $500 million; 0.125%
of the next $1 billion; 0.11% of the next $1 billion; and 0.10% of any amounts
over $3 billion. The Investment Adviser may from time to time voluntarily waive
some or all of its investment advisory fee and may terminate any such voluntary
waiver at any time at its sole discretion. For the year ended July 31, 1995,
the Investment Adviser and sub-adviser earned the following advisory fees:
ADVISER ADVISER FEE SUB-ADVISER
FEE VOLUNTARILY FEE
EARNED WAIVED EARNED
Money-Market Fund $ 616,369 $ - $ 476,285
U.S. Government Fund 2,097,838 - 1,598,353
Tax-Exempt Fund 486,638 48,886 413,642
In addition, the Funds provide direct reimbursement to Mentor for certain
accounting and operation related costs not covered under the Investment
Management Agreement. For the year ended July 31, 1995, the Money-Market Fund,
U.S. Government Fund and Tax-Exempt Fund paid $8,470, $28,453 and $6,239,
respectively to Mentor for these direct reimbursements.
DISTRIBUTION AGREEMENT
Under a Distribution Agreement, Mentor Distributors, Inc. ("Mentor
Distributors") (formerly, Cambridge Distributors, Inc.) a wholly-owned
subsidiary of Mentor, Mentor Distributors was appointed Distributor for each
Fund. To compensate Mentor Distributors for the services it provides and for
the expenses it incurs under the Distribution Agreement, the Funds have adopted
a Plan of Distribution pursuant to Rule 12b-1 under the Investment Company Act
of 1940, under which they pay a distribution fee, which is accrued daily and
paid monthly at the annual rate of 0.38% of the Fund's average daily net assets
for the Money-Market Fund and U.S. Government Fund and 0.33% of the Fund's
average daily net assets for the Tax-Exempt Fund.
TRANSFER AGENT AGREEMENT
Under a Transfer Agency Agreement, Investors Fiduciary Trust Company (IFTC)
serves as Transfer Agent and Dividend Disbursing Agent for each Fund. IFTC in
turn compensates Wheat (from IFTC's own assets) for related services provided by
Wheat directly to its clients. For the year ended July 31, 1995, Wheat earned
fees of $466,682, $2,180,323 and $215,753 respectively from the Money-Market
Fund, U.S. Government Fund and Tax-Exempt Fund.
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE TRUSTEES
CASH RESOURCE TRUST
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the Money-Market Fund, U.S. Government
Money-Market Fund and Tax-Exempt Money-Market Fund, (Portfolios of Cash Resource
Trust) as of July 31, 1995 and the related statements of operations for the year
then ended, and the statements of changes in net assets and financial highlights
for the year then ended and for the period from December 20, 1993 (commencement
of operations) to July 31, 1994. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
as of July 31, 1995 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Money-Market Fund, U.S. Government Money-Market Fund and Tax-Exempt Money-Market
Fund as of July 31, 1995, the results of their operations for the year then
ended and the changes in their net assets and their financial highlights for the
year then ended and the period from December 20, 1993 to July 31, 1994 in
conformity with generally accepted accounting principles.
/s/ KPMG PEAT MARWICK, LLP
KPMG PEAT MARWICK, LLP
Boston, Massachusetts
September 8, 1995
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Included in Parts A and B:
(1) Report of Independent Auditors - .
(2) Statements of Assets and Liabilities - July 31, 1995.
Statements of Operations - year ended July 31, 1995.
Statements of Changes in net assets -- year ended
July 31, 1995 and the period from Dec. 20, 1993 to
Jul. 31, 1994.
Financial Highlights for the year ended Jul.31, 1995
and the period from Dec. 20, 1993 to Jul. 31, 1994.
Notes to Financial Statements.
Included in Part C: None.
(b) Exhibits
(1) (A) Agreement and Declaration of Trust(1)
(B) Amendments to Agreement and Declaration of Trust(2)(3)
(2) Bylaws(1)
(3) Inapplicable
(4) (A) Forms of certificate representing shares of beneficial interest(1)
(B) Portions of Agreement and Declaration of Trust
Relating to Shareholders' Rights(1)
(C) Portions of Bylaws Relating to Shareholders' Rights(1)
(5) (A) Management Contract dated December 17, 1993(4)
(B) Subadviser Contract dated December 17, 1993(4)
(6) Distribution Agreement dated December 17, 1993(4)
(7) Inapplicable
(8) Custody Agreement dated December 20, 1993(4)
(9) (A) Agency Agreement dated December 20, 1993(4)
(B) Draft Processing Agency Agreement dated December 20, 1993(4)
(10) Opinion and Consent of Ropes & Gray(2)
(11) Consent of Independent Auditors(5)
(12) Inapplicable
(13) Initial Capital Agreement dated December 17, 1993(4)
(14) Inapplicable
(15)(A) Distribution Plan and Agreement on behalf of Cash Resource
Money Market Fund dated December 17, 1993(4)
(B) Distribution Plan and Agreement on behalf of
Cash Resource U.S. Government Money Market Fund
dated December 17, 1993(4)
(C) Distribution Plan and Agreement on behalf of Cash Resource
Tax-Exempt Money Market Fund dated December 17, 1993(4)
(16) Schedule of Computation of Performance(5)
(27) Financial Data Schedules(5)
(A) Cash Resource Money Market Fund
(B) Cash Resource U.S. Government Money Market Fund
(C) Cash Resource Tax-Exempt Money Market Fund
___________________
(1) Incorporated by reference from the Registrant's Registration
Statement on Form N-1A under the Securities Act of 1993, as
amended, filed on July 7, 1993.
(2) Incorporated by reference from Pre-Effective Amendment No. 1
to the Registrant's Registration Statement on Form N-1A
under the Securities Act of 1993, as amended, filed on
October 15, 1993 (File No. 33-655818).
(3) Incorporated by reference to Pre-Effective Amendment No. 2
to the Registrant's Registration Statement on Form N-1A
under the Securities Act of 1933, as amended, filed on
November 5, 1993 (File No. 33-65818).
(4) Incorporated by reference to Post-Effective Amendment No. 1
to the Registrant's Registration Statement on Form N-1A
under the Securities Act of 1933, as amended, filed on
October 3, 1994 (File No. 33-65818).
(5) Filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF RECORD HOLDERS OF SECURITIES
The following table shows the number of holders of record shares of
beneficial interest of Cash Resource Money Market Fund, Cash Resource U.S.
Government Money Market Fund, and Cash Resource Tax-Exempt Money Market Fund, as
of September 1, 1995:
Number of Record
Series Holders
Cash Resource Money Market Fund 45,095
Cash Resource U.S. Government Money Market Fund 170,595
Cash Resource Tax-Exempt Money Market Fund 13,652
ITEM 27. INDEMNIFICATION
The information required by this item is incorporated herein by
reference from the Registrant's Registration Statement on Form N-1A under
the Securities Act of 1933, as amended (File No. 33-65818).
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) Commonwealth Advisors, Inc. (formerly Cambridge Investment Advisors,
Inc.), located at 901 East Byrd Street, Richmond, Virginia 23219, serves as the
Registrant's investment adviser. It is a wholly-owned subsidiary of Mentor
Investment Group, Inc. ("Mentor") (formerly Investment Management Group, Inc.),
which in turn is a wholly-owned subsidiary of Wheat First Butcher Singer, Inc.
("Wheat First Butcher Singer"), a diversified financial services holding
company. Commonwealth Advisors was incorporated under the laws of Virginia in
1991.
The business and other connections of each director, officer, or partner
of Cambridge in which such director, officer, or partner is or has been, at any
time during the past two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner, or trustee are set forth in
the following table.
Other Substantial
Position with the Business, Profession,
Name Investment Adviser Vocation or Employment*
Peter J. Quinn, Jr. President and Director President, Mentor
Distributors, Inc.;
Managing Director,
Mentor Investment
Group, Inc. and
Wheat First Butcher
Singer, Inc.;
Trustee, The Mentor
Funds; Mentor
Investment Group,
Inc. and Wheat First
Butcher Singer;
formerly, Senior
Vice President/Director
of Mutual Funds,
Wheat, First
Securities Inc.;
President, Cambridge
Series Trust.
John M. Ivan Secretary Managing Director,
Senior Vice
President, Director
of Compliance and
Assistant General
Counsel, Wheat,
First Securities,
Inc.; Managing
Director and
Assistant Secretary,
Wheat First Butcher
Singer, Inc.
(formerly WFS
Financial
Corporation); Clerk,
Cash Resource Trust
and Mentor
Institutional Trust;
Secretary, Mentor
Income Fund, Inc.
Thomas L. Souders Treasurer Managing Director and
Chief Financial Officer,
Wheat, First Securities,
Inc.; formerly, Manager
of Internal Audit,
Heilig-Myers; formerly,
Manager, Peat Marwick &
Mitchell & Company
(b) Commonwealth Investment Counsel, Inc. ("Commonwealth"), located
at 901 East Byrd Street, Richmond, Virginia 23219, serves as subadviser to
the Trust. It is a wholly-owned subsidiary of Mentor, which in turn is a
wholly-owned subsidiary of Wheat First Butcher Singer. Commonwealth was
incorporated under the laws of Virginia in 1970.
The business and other connections of each director, officer, or
partner of Commonwealth in which such director, officer, or partner is or
has been, at any time during the past two fiscal years, engaged for his own
account or in the capacity of director, officer, employee, partner, or
trustee are set forth in the following table.
Other Substantial
Position with the Business, Profession,
Name Investment Adviser Vocation or Employment*
John G. Davenport President None
William F. Johnston, III Senior Vice President None
R. Preston Nuttall Senior Vice President Formerly, Senior Vice
President, Capitoline
Investment Services, 919
East Main Street,
Richmond, VA 23219
John J. Kelly Vice President None
William H. West, Jr. Vice President Formerly, Vice President,
Mentor Income Fund, Inc.;
Vice President of Ryland
Capital Management, Inc.;
formerly, Vice President,
RAC Income Fund, Inc.
Steven C. Henderson Vice President None
Stephen R. McClelland Associate Vice President Formerly, Associate Vice
President, Investment
Management Group, Inc.
Thomas L. Souders Treasurer None
John M. Ivan Secretary Managing Director, Senior
Vice President and
Assistant General
Counsel, Wheat, First
Securities, Inc.;
Managing Director and
Assistant Secretary,
Wheat First Butcher
Singer, Inc.; Clerk, Cash
Resource Trust;;
Secretary, Mentor Income
Fund, Inc.; formerly,
Clerk, Mentor Series
Trust
* The address of Mentor Investment Group, Inc. Wheat, First Securities,
Inc., Wheat First Butcher Singer, Inc., The Mentor Funds, and Mentor Income
Fund, Inc., is 901 East Byrd Street, Richmond, VA 23219. The address of
Ryland Capital Management, Inc. and RAC Income Fund, Inc. is 11000 Broken
Land Parkway, Columbia, MD 21044.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Mentor Distributors, Inc. (formerly Cambridge Distributors, Inc.) acts
as the principal underwriter for the Trust.
(b)
Positions and
Name and Principal Business Positions and Offices with Offices with
Address Underwriters Registrant
Peter J. Quinn, Jr. President and Director Trustee
901 East Byrd Street
Richmond, VA 23219
Paul F. Costello Senior Vice President President
901 East Byrd Street
Richmond, VA 23219
Thomas L. Souders Treasurer Trustee
901 East Byrd Street
Richmond, VA 23219
John M. Harris Secretary None
901 East Byrd Street
Richmond, VA 23219
John M. Ivan
901 East Byrd Street
Richmond, VA 23219 Assistant Secretary Clerk
(c) Inapplicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the Rules promulgated thereunder are Registrant's
Clerk, John M. Ivan; Registrant's investment adviser, Commonwealth
Advisors, and its sub-adviser, Commonwealth Investment Counsel, Inc.; and
Registrant's transfer agent and custodian, Investors Fiduciary Trust
Company. The address of the Clerk, Commonwealth Advisors, and Commonwealth
is 901 East Byrd Street, Richmond, Virginia 23219. The address of the
transfer agent and custodian is 127 West 10th Street, Kansas City, Missouri
64105-1716.
ITEM 31. MANAGEMENT SERVICES
None.
ITEM 32. Undertakings
(a) The Registrant undertakes, if requested to do so by the holders
of at least 10% of the Registrant's outstanding shares of
beneficial interest, to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee or
Trustees and to assist in communications with other shareholders
as required by Section 16(c) of the Investment Company Act of
1940.
(b) The Registrant undertakes to furnish to each person to whom a
prospectus of the Registrant is delivered a copy of the
Registrant's latest annual report to shareholders, upon request
and without charge.
NOTICE
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not
individually and that the obligations of or arising out of this instrument
are not binding upon any of the Trustees, officers, or shareholders
individually but are binding only upon the assets and property of the
Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to be signed on behalf of the undersigned, thereunto
duly authorized, in the City of Richmond, and the Commonwealth of Virginia
on this 29th day of September, 1995.
CASH RESOURCE TRUST
By:/s/ Paul F. Costello
Name: Paul F. Costello
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities indicated on the 29th day of September, 1995.
SIGNATURE TITLE
* Chairman; Trustee
Daniel J. Ludeman
* Trustee
Arnold H. Dreyfuss
Trustee
Thomas F. Keller
* Trustee
Louis W. Moelchert, Jr.
Trustee
Stanley F. Pauley
* Trustee
Troy A. Peery, Jr.
Trustee
Peter J. Quinn, Jr.
/s/ Paul F. Costello President; Principal Executive
Paul F. Costello Officer
/s/ Terry L. Perkins Treasurer; Principal Financial
Terry L. Perkins Officer; Principal Accounting Officer
*By: /s/ Paul F. Costello
Paul F. Costello
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
(11) Consent of Independent
Auditors
(16) Schedule of Computation
of Performance
(27) Financial Data
Schedules
(A) Cash Resource Money
Market Fund
(B) Cash Resource U.S.
Government Money Market
Fund
(C) Cash Resource Tax-Exempt
Money Market Fund
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
The Trustees
Cash Resource Trust
We consent to the use of our report dated September 8, 1995
included herein and to the references to our firm under the captions "FINANCIAL
HIGHLIGHTS" in the prospectus and "INDEPENDENT AUDITORS" in the statement of
additional information.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
September 29, 1995
CASH RESOURCE TRUST
SCHEDULE FOR COMPUTATION
OF PERFORMANCE
MONEY MARKET US GOVT TAX-EXEMPT
FUND FUND FUND
Initial Investment 1,000.00 1,000.00 1,000.00
Initial NAV 1.00 1.00 1.00
Initial Shares 1,000.00 1,000.00 1,000.00
Shares from Distribution 49.70 48.20 45.28
End of Period NAV 1.00 1.00 1.00
Total Return 4.97% 4.82% 4.53%
<TABLE>
<CAPTION>
MONEY MARKET US GOVT TAX-EXEMPT
FUND FUND FUND
<S> <C> <C> <C>
Account Balance (1 share @ $1.00) 1.00000000 1,00000000 1.00000000
Dividend Declaration
July 25, 1995 0.00014160 0.00013624 0.00008443
July 26, 1995 0.00014164 0.00013605 0.00008493
July 27, 1995 0.00014204 0.00013586 0.00008460
July 28, 1995 0.00014154 0.00013578 0.00008421
July 29, 1995 0.00014155 0.00013579 0.00008420
July 30, 1995 0.00014155 0.00013579 0.00008420
July 31, 1995 0.00015164 0.00013714 0.00008489
Ending Account Balance 1.00100156 1.00095265 1.00059146
Less: Beginning Account Balance 1.00000000 1.00000000 1.00000000
Difference 0.00100156 0.00095265 0.00059146
Base Period Return
(Difference/Beginning Account Balance) 0.00100156 0.00095265 0.00059146
Yield Quotation
(Base Period Return *365/7) 5.22% 4.97% 3.08%
Effective Yield Quotation
[(Base period Return +1)^(365/7)-1] 5.36% 5.09% 3.13%
</TABLE>
These quotations were computed based on the seven days ending July 31, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 421,811,619
<INVESTMENTS-AT-VALUE> 421,811,619
<RECEIVABLES> 1,259,944
<ASSETS-OTHER> 1,373,068
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 424,444,631
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,787,678
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 422,656,953
<SHARES-COMMON-STOCK> 422,656,953
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 422,656,953
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16,249,643
<OTHER-INCOME> 0
<EXPENSES-NET> 2,300,497
<NET-INVESTMENT-INCOME> 13,949,146
<REALIZED-GAINS-CURRENT> 4,125
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 13,953,271
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 13,949,146
<DISTRIBUTIONS-OF-GAINS> 4,125
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,715,059,721
<NUMBER-OF-SHARES-REDEEMED> (1,498,082,634)
<SHARES-REINVESTED> 13,419,964
<NET-CHANGE-IN-ASSETS> 230,397,051
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 616,369
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,300,497
<AVERAGE-NET-ASSETS> 281,479,032
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.82
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> U.S. GOVERNMENT MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 1,218,801,649
<INVESTMENTS-AT-VALUE> 1,218,801,649
<RECEIVABLES> 2,834,827
<ASSETS-OTHER> 743,397
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,222,379,873
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 5,689,478
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,216,690,395
<SHARES-COMMON-STOCK> 1,216,743,095
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,216,690,395
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 56,662,802
<OTHER-INCOME> 0
<EXPENSES-NET> 8,882,846
<NET-INVESTMENT-INCOME> 47,779,956
<REALIZED-GAINS-CURRENT> (52,700)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 47,727,256
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 47,779,956
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,322,307,058
<NUMBER-OF-SHARES-REDEEMED> (4,060,290,887)
<SHARES-REINVESTED> 46,907,937
<NET-CHANGE-IN-ASSETS> 308,871,409
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,097,838
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,882,846
<AVERAGE-NET-ASSETS> 1,006,264,985
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> TAX EXEMPT MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-START> AUG-1-1994
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 266,162,000
<INVESTMENTS-AT-VALUE> 266,162,000
<RECEIVABLES> 1,444,146
<ASSETS-OTHER> 135,640
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 267,741,786
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 847,207
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 266,894,579
<SHARES-COMMON-STOCK> 266,897,531
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 266,894,579
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,257,636
<OTHER-INCOME> 0
<EXPENSES-NET> 1,592,403
<NET-INVESTMENT-INCOME> 6,665,233
<REALIZED-GAINS-CURRENT> (2,878)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 6,662,354
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,665,287
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,029,841,741
<NUMBER-OF-SHARES-REDEEMED> 965,147,735
<SHARES-REINVESTED> 6,528,365
<NET-CHANGE-IN-ASSETS> 71,192,548
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 486,638
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,592,403
<AVERAGE-NET-ASSETS> 221,688,843
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.03)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
