<PAGE>
CASH RESOURCE
TRUST
Annual Report
July 31, 1996
[MENTOR INVESTMENT GROUP LOGO]
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Cash Resource Trust
Annual Report
July 31, 1996
Message from the Chairman and President
It is our privilege to send you the Cash Resource Trust Annual Report for the
year ended July 31, 1996. The Cash Resource Trust is part of a diversified
family of funds offered by Mentor Investment Group, an investment advisory firm
with more than $6 billion under management. Mentor provides investment
management in seven different styles to a broad spectrum of investors.
As you know, the CRT Money Market Funds are invested to seek as high a rate of
current income (or, in the case of the Cash Resource Tax-Exempt Money Market
Fund, as high a rate of current income exempt from federal income tax) as the
investment advisor believes is consistent with preservation of capital and
maintenance of liquidity. The Funds are managed according to a conservative
policy that places strong emphasis on credit research. We carefully review each
investment and do not sacrifice quality to attain a higher yield.
In the pages that follow you will find financial statements for the Cash
Resource Money Market Fund, the Cash Resource U.S. Government Money Market Fund,
and the Cash Resource Tax-Exempt Money Market Fund, in addition to commentary
from members of the management team regarding their investment strategy and
outlook.
We thank you for your continuing investment in our Funds. We appreciate your
confidence in our commitment to providing current income consistent with
preservation of capital and maintenance of liquidity.
Sincerely,
/s/ DANIEL J. LUDEMAN /s/ PAUL F. COSTELLO
Daniel J. Ludeman Paul F. Costello
Chairman President
The Mentor
Mission Statement
Our mission is to provide professional investment management services
through a firm that is second to none in the quality of its investment
process, the skill and training of its professionals, and the commitment,
shared by all its associates, to deliver the highest level of service and
ethical behavior to clients.
For more information and a prospectus for the Cash Resource Trust, please call
us, (800)382-0016, or contact your financial consultant. The prospectus contains
complete information regarding advisory fees, sales charges, and expenses.
Please read them carefully before investing or sending money.
1
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Cash Resource Trust Annual Report
Managers' Overview
July 31, 1996
The three funds of the Cash Resource Trust (CRT) are invested in accordance with
conservative standards which place primary emphasis on liquidity and safety of
principal.
* The CRT Money Market Fund is a diversified portfolio of fixed-income
securities, including commercial paper, bank obligations, and other
short-term investments.
* The CRT U.S. Government Money Market Fund is invested entirely in securities
backed by the U.S. Government or its agencies, and related repurchase
agreements.
* The CRT Tax-Exempt Money Market Fund is structured to generate income exempt
from federal income tax.
The 12-month period ended July 31, 1996 was one of mixed signals for money
managers. The period began August 1, 1995 with the Federal Reserve having just
lowered the key Fed Funds rate to 5.75%, the first reduction in two years. The
next four months witnessed a mixed pattern of economic data, with the economy
apparently poised for strong growth but frustrated by a sluggish consumer.
During this period the markets tended to vacillate within a relatively narrow
trading range based on whether the latest statistics were weak or strong. But
the preponderance of evidence indicated a soft economy, with the result that the
Fed further reduced rates, to 5.50% in December and 5.25% in January.
It now appears, however, that the data for the winter months were distorted,
first by the partial government shutdown, then by bad weather, and were not as
weak as first reported. The coming of spring brought a more positive growth
track for the economy, with the result that sentiment shifted 180 degrees, away
from further cuts by the Fed and toward a return to the pattern of higher rates
prevailing in the previous fiscal year.
The fixed-income markets sold off sharply in response to this change in
expectations, with rates rising. The money market area was no exception. The
remainder of the year appears more uncertain than usual, with the course of the
economy and Fed policy somewhat open to question, particularly with presidential
elections taking place.
Our pledge to you is to continue our emphasis on safety and liquidity through
high credit standards and conservative investment policies. We thank you for
your investment.
/s/ R. PRESTON NUTTALL
R. Preston Nuttall
Director of Cash Management
/s/ HUBERT R. WHITE
Hubert R. White
Portfolio Manager
/s/ KATHRYN T. ALLEN
Kathryn T. Allen
Portfolio Manager
2
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Cash Resource Trust
Money Market Fund
Portfolio of Investments
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Bankers Acceptances 5.98%
Nationsbank Corporation, 5.39%, 8/07/96 $14,000 $ 13,987
Nationsbank of Texas, 5.31%, 11/15/96 5,000 4,922
Wachovia Bank, 5.42%, 10/29/96 20,000 19,732
Total Bankers Acceptances 38,641
Bank Notes 6.18%
Bank of America, 5.54%, 10/15/96 20,000 20,000
First of America, 4.98%, 12/19/96 20,000 19,956
Total Bank Notes 39,956
Certificates of Deposit 3.09%
First Alabama Bank, 5.37%, 8/05/96 5,000 5,000
First Alabama Bank, 5.47%, 9/09/96 15,000 15,000
Total Certificates of Deposit 20,000
Commercial Paper 65.96%
Apparel & Accessory Stores 3.08%
J.C. Penney Funding Corporation, 5.29%, 9/06/96 20,000 19,894
Asset Backed Securities 6.17%
CIESCO Limited Partnership, 5.36%, 8/07/96 15,000 14,987
Greenwich Funding Corporation, 5.37%, 8/20/96 (a) 25,000 24,929
Total Asset Backed Securities 39,916
Commercial Banks 17.62%
ABN-Amro North America Finance, Inc., 5.32%, 11/08/96 10,000 9,854
ABN-Amro North America Finance, Inc., 5.30%, 11/12/96 10,000 9,848
Abbey National North America, 5.29%, 11/20/96 20,000 19,674
Bank of New York, 5.42%, 9/24/96 20,000 19,837
Mellon Financial Company, 5.36%, 8/15/96 20,000 19,958
Nationsbank Corporation, 5.26%, 8/15/96 10,000 9,980
Svenska Handelsbanken, 5.50%, 10/09/96 25,000 24,736
Total Commercial Banks 113,887
</TABLE>
3
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Cash Resource Trust
Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Commercial Paper (continued)
Electric Services 4.97%
National Rural Utilities, 5.37%, 8/19/96 $20,000 $ 19,946
Rincon Securities, Inc., 5.37%, 8/28/96 1,250 1,245
Rincon Securities, Inc., 5.35%, 9/06/96 5,000 4,973
Rincon Securities, Inc., 5.38%, 9/09/96 6,000 5,965
Total Electric Services 32,129
Insurance Agents, Brokers & Service 3.06%
International Nederlanden, 5.42%, 10/21/96 10,000 9,878
International Nederlanden U.S. Insurance Holdings, Inc.,
5.41%, 9/17/96 10,000 9,929
Total Insurance Agents, Brokers & Service 19,807
Metal Mining 3.86%
North Financial, 5.40%, 8/13/96 25,000 24,955
Oil and Gas Field Exploration Services 1.54%
Statoil, 5.30%, 8/28/96 10,000 9,960
Personal Credit Institutions 7.69%
American Express, 5.30%, 8/21/96 20,000 19,941
Ford Motor Credit Company, 5.43%, 9/06/96 20,000 19,892
Ford Motor Credit Company, 5.42%, 10/17/96 10,000 9,884
Total Personal Credit Institutions 49,717
Rental & Leasing 3.04%
General Electric Capital, 5.24%, 8/30/96 7,000 6,970
General Electric Capital, 5.35%, 1/21/97 13,000 12,666
Total Rental & Leasing 19,636
Security Brokers & Dealers 11.85%
Bear Stearns Company, 5.40%, 9/13/96 20,000 19,871
CS First Boston, Inc., 5.33%, 8/27/96 17,000 16,935
CS First Boston, Inc., 5.40%, 9/11/96 10,000 9,939
Merrill Lynch & Company, Inc., 5.45%, 9/06/96 30,000 29,837
Total Security Brokers & Dealers 76,582
</TABLE>
4
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Cash Resource Trust
Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Commercial Paper (continued)
Tobacco Products 3.08%
Philip Morris, 5.38%, 9/09/96 $20,000 $ 19,884
Total Commercial Paper 426,367
Corporate Obligations 2.32%
Dupont E I De Nemours, 5.80%, 12/12/96 9,000 9,007
Walker & Associates, 5.54%, 07/01/11 (b) 6,000 6,000
Total Corporate Obligations 15,007
U.S. Government Securities and Agencies 7.75%
U.S. Treasury Note, 7.50%, 01/31/97 10,000 10,109
Federal Home Loan Bank, 5.31%-5.67%, 12/23/96-2/14/97 (b) 15,000 15,000
Student Loan Marketing Association, 5.51%-5.54%,
11/24/97-2/22/99 (b) 25,000 24,998
Total U.S. Government Securities and Agencies 50,107
Repurchase Agreement 9.95%
Goldman, Sachs & Company
Dated 7/31/96, 5.65%, due 8/01/96, collateralized by
$66,828 Federal National Mortgage Association, 7.50%,
3/01/26 64,345 64,345
Total Investments (cost $654,423) (d) 101.23% 654,423
Other Assets less Liabilities (1.23%) (7,923)
Net Assets 100.00% $646,500
</TABLE>
See notes to portfolios of investments.
5
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Cash Resource Trust
U.S. Government Money Market Fund
Portfolio of Investments
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
U.S. Government Securities and Agencies 59.65%
Federal Home Loan Bank
5.22%-5.36%, 10/16/96-2/19/97 $ 133,340 $ 130,837
5.31%-5.54%, 2/14/97-2/16/99 (b) 42,000 42,000
Federal Home Loan Mortgage Corporation
5.25%-5.36%, 8/05/96-10/23/96 225,459 224,838
Federal National Mortgage Association
5.17%-5.37%, 8/09/96-10/24/96 234,700 232,912
Student Loan Marketing Association
5.51%-5.55%, 10/14/97-2/08/99 (b) 105,000 104,998
U.S. Treasury Notes
6.50%-7.50%, 11/30/96-1/31/97 100,000 100,962
Total U.S. Government Securities and Agencies 836,547
Repurchase Agreements 40.55%
Chase Securities, Inc.
Dated 7/31/96, 5.65%, due 8/01/96, collateralized by
$61,596 Federal National Mortgage Association,
7.00%-9.00%, 3/01/25-6/01/26 60,000 60,000
First Union Corporation
Dated 7/31/96, 5.66%, due 8/01/96, collateralized by
$34,444 U.S. Treasury Notes, 11.25%, 2/15/15 50,000 50,000
Goldman, Sachs & Company
Dated 7/31/96, 5.65%, due 8/01/96, collateralized by
$185,618 Federal National Mortgage Association, 7.50%,
3/01/26 178,721 178,721
Lehman Brothers, Inc.
Dated 7/31/96, 5.68%, due 8/01/96, collateralized by
$57,716 Federal National Mortgage Association,
9.00%-9.50%, 5/01/22-3/01/25 60,000 60,000
Merrill Lynch, Pierce, Fenner & Smith, Inc.
Dated 7/31/96, 5.69%, due 8/01/96, collateralized by
$35,748 Federal Home Loan Mortgage Corporation 7.00%,
11/01/25 and $27,504 Federal National Mortgage Association
7.50%, 12/01/25 60,000 60,000
</TABLE>
6
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Cash Resource Trust
U.S. Government Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Repurchase Agreements (continued)
Paine Webber, Inc.
Dated 7/31/96, 5.68%, due 8/01/96, collateralized by
$43,420 Federal National Mortgage Association, 7.00%,
6/01/23 and $20,638 Government National Mortgage
Association, 7.00%, 7/15/25 $ 60,000 $ 60,000
United Bank of Switzerland
Dated 7/31/96, 5.68%, due 8/01/96, collateralized by
$61,267 Federal Home Loan Mortgage Corporation,
6.50%-7.00%, 1/01/24-2/01/24 and $45,330 Federal National
Mortgage Association-Strips, 6.50%-7.00%, 12/01/10-2/01/26 100,000 100,000
Total Repurchase Agreements 568,721
Total Investments (cost $1,405,268) (d) 100.20% 1,405,268
Other Assets less Liabilities (0.20%) (2,871)
Net Assets 100.00% $1,402,397
</TABLE>
See notes to portfolios of investments.
7
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Cash Resource Trust
Tax-Exempt Money Market Fund
Portfolio of Investments
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Variable Rate Tax-Exempt
Demand Securities (b) 43.53%
Alabama 2.20%
University of Alabama Board of Trustees,
3.60%, 10/01/13 $ 6,400 $ 6,400
Arizona 6.46%
Apache County IDA Tucson Electric Power
Company Project, 3.65%, 6/15/20 10,000 10,000
Coconino City Tuscon Gas & Electric
Service PCR Series A, 3.70%, 5/01/31 8,800 8,800
18,800
Colorado 2.54%
Colorado Housing Finance Authority
Series 1985, 3.60%, 5/01/97 7,400 7,400
Illinois 4.51%
Chicago O'Hare International Airport American
Airlines Series 1983C, 3.70%, 1/01/18 2,000 2,000
Illinois DFA Grayhill, Inc. Project
IDR, 3.75%, 2/01/05 3,150 3,150
Illinois DFA Flinn Scientific Project, 3.75%, 10/01/15 4,760 4,760
Illinois HFA West Suburban Hospital, 3.65%, 7/01/05 3,200 3,200
13,110
Maryland 4.44%
Anne Arundel County Oakland Hills Project,
3.65%, 5/15/15 2,052 2,052
Howard County Revenue Bond, Harmony Hall, Inc. Project,
3.65%, 10/01/10 2,868 2,868
Maryland State Health & Higher Education,
Series B, 3.65%, 4/01/35 8,000 8,000
12,920
Michigan 0.69%
Michigan State Strategic Fund, 3.75%, 2/01/09 2,000 2,000
</TABLE>
8
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Cash Resource Trust
Tax-Exempt Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Variable Rate Tax-Exempt
Demand Securities (b) (continued)
North Carolina 5.16%
Durham County Water & Sewer, 3.65%, 12/01/15 $ 4,800 $ 4,800
Lincoln County Industrial Facility PCR
Series 1994, 3.80%, 8/01/09 6,000 6,000
North Carolina Educational Facilities
Bowman Grey School, 3.55%, 9/01/20 4,200 4,200
15,000
New Mexico 0.70%
Albuquerque Greater Receipts Tax,
3.65%, 7/01/22 2,050 2,050
Tennessee 0.77%
Nashville and Davidson County Health
and Education Facility, 3.65%, 5/01/20 2,224 2,224
Texas 2.13%
North Texas Higher Education Student Loan
Revenue Refund, Series 1991F, 3.65%, 4/01/20 4,000 4,000
Panhandle Plains Student Loan Revenue
Series A, 3.65%, 6/01/21 1,300 1,300
Texas Education Authority Series 1985B,
3.60%, 12/01/25 885 885
6,185
Virginia 11.39%
Arlington County Ballston Public
Parking, 3.60%, 8/01/17 3,650 3,650
Botetourt County IDR Emkay Holdings
Project, 3.60%, 10/01/05 2,700 2,700
Capital Regional Airport Series 1995C,
3.70%, 7/01/23 4,000 4,000
Chesterfield County IDR Midlothian Hotel
Partnership, 3.65%, 12/01/14 6,344 6,344
Hampton Roads Regional Jail Series 1996B,
3.60%, 7/01/16 4,000 4,000
Hanover County IDR Carter Machinery,
3.65%, 11/01/98 500 500
</TABLE>
9
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Cash Resource Trust
Tax-Exempt Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Variable Rate Tax-Exempt
Demand Securities (b) (continued)
Virginia (continued)
Henrico County IDA Hermitage Project,
3.60% -- 3.65%, 5/01/24 $ 3,700 $ 3,700
Lynchburg IDA Mid-Atlantic Series G,
3.55%, 12/01/25 500 500
Richmond IDB Commonwealth Park,
3.70%, 11/01/07 1,364 1,364
Roanoke IDR Quibell Corporate Project,
3.65%, 9/01/15 292 292
Spotsylvania City IDA Residential Care
Facilities, 3.65%, 10/01/20 4,684 4,684
Tazewell County IDR, 4.00%, 1/01/03 1,000 1,000
Virginia Beach Revenue Bond, 3.65%, 9/01/09 410 410
33,144
Wisconsin 0.65%
Village of Pleasant Prairie Muskie Enterprise
Project, Series 1995, 3.75%, 5/01/15 1,900 1,900
Wyoming 1.89%
Lincoln County Exxon Series B,
3.65%, 11/01/14 1,500 1,500
Sweetwater County PCR Pacific Corporation
Project Series A, 3.50%, 7/01/15 4,000 4,000
5,500
Total Variable Rate Tax-Exempt Demand Securities 126,633
Other Tax-Exempt Securities 56.80%
Alabama 0.95%
IDB of Fairfield USX Corporation Project,
Series 1995, 3.55%, 10/01/96 2,775 2,775
Arizona 0.17%
Scottsdale IDA Memorial Hospital Series A,
3.70%, 9/01/96 485 485
</TABLE>
10
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<PAGE>
Cash Resource Trust
Tax-Exempt Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Other Tax-Exempt Securities (continued)
Colorado 1.04%
State of Colorado General Fund TRANS Series A,
4.50%, 6/27/97 $ 3,000 $ 3,017
Florida 3.61%
City of Jacksonville Series A, 3.40%, 9/10/96 5,000 5,000
Putnam County Development Authority
Seminole Electric Series 1984, 3.50%, 12/15/96 3,000 3,000
Sunshine State Government Finance Commission
Series 1986 Revenue Bond, 3.60%, 10/17/96 2,500 2,500
10,500
Georgia 1.72%
Dekalb County TRANS, 3.75%, 12/31/96 5,000 5,012
Illinois 2.99%
Chicago Illinois GO Tender Note, 3.10%, 2/04/97 2,300 2,300
City of Chicago GO Tender Notes Series 1995A, 3.65%,
10/31/96 6,400 6,400
8,700
Kentucky 0.86%
Pulaski County Solid Waste Project,
Series B, 3.20%, 8/15/96 2,500 2,500
Louisiana 2.23%
Plaquemines Port Harbor Series C, 3.70%, 10/22/96 6,500 6,500
Maryland 0.69%
Baltimore City Public Improvement, 3.40%, 8/15/96 2,000 2,000
Michigan 2.75%
State of Michigan GO Note RANS, 4.00%, 9/30/96 3,000 3,004
Michigan State, Underground Storage Tank
Financial Assurance Series I, 3.45%, 8/15/96 5,000 5,000
8,004
</TABLE>
11
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Cash Resource Trust
Tax-Exempt Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Other Tax-Exempt Securities (continued)
Minnesota 1.43%
Rochester Health Care Series C, 3.60%, 8/15/96 $ 3,010 $ 3,010
University of Minnesota Revenue Bond,
3.25%, 8/01/96 1,150 1,150
4,160
Mississippi 0.79%
Claiborne County PCR, 3.50%, 9/24/96 2,300 2,300
North Carolina 7.87%
North Carolina Power Agency Series B,
3.10%, 8/13/96 10,000 10,000
Wake County Industrial Facility Series 1990A,
3.70%-3.80%, 8/12/96-8/20/96 12,900 12,900
22,900
New York 1.04%
New York City TRANS Series A,
4.50%, 2/12/97 3,000 3,012
South Carolina 4.47%
York County PCR Series 1984N-3, 3.25%, 9/15/96 8,000 8,000
Beaufort County School District BANS Series 1995, 4.13%,
8/15/96 5,000 5,001
13,001
Texas 13.97%
Brazos Harbor Industrial Development
Series 1986, 3.65%, 8/22/96 3,700 3,700
Harris City Health Care, 3.40%, 9/09/96 5,000 5,000
Houston TRANS, 4.50%, 6/30/97 5,000 5,032
Houston Water & Sewer Series A, 3.40%, 8/28/96 8,000 8,000
San Antonio Electric & Gas Series A,
3.60%-3.70%, 8/14/96-8/23/96 10,900 10,900
State of Texas TRANS Series A,
4.75%, 8/30/96 8,000 8,004
40,636
</TABLE>
12
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<PAGE>
Cash Resource Trust
Tax-Exempt Money Market Fund
Portfolio of Investments (continued)
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Percent of Principal Value
Net Assets Amount (Note 2)
<S> <C>
Other Tax-Exempt Securities (continued)
Virginia 4.45%
Chesterfield County GO Bond
5.25%, 8/01/96 $ 800 $ 800
Chesterfield County IDR Series 1987B
3.60%, 10/24/96 1,000 1,000
Peninsula Port Authority, 3.55%, 8/13/96 3,135 3,135
York County IDA PCR, 3.55%-3.65%
8/08/96-9/10/96 8,000 8,000
12,935
West Virginia 3.44%
West Virginia HDA, 3.55%, 8/15/96 10,000 10,000
Other 2.33%
PNC Municash, 3.46%, 8/01/96 6,790 6,790
Total Other Tax-Exempt Securities 165,227
Total Investments (cost $291,860) (d) 100.33% 291,860
Other Assets less Liabilities (0.33%) (969)
Net Assets 100.00% $290,891
</TABLE>
Investment Abbreviations
BANS - Bond Anticipation Notes
DFA - Development Finance Authority
GO - General Obligation
HDA - Housing Development Authority
HFA - Housing Finance Authority
IDA - Industrial Development Authority
IDB - Industrial Development Board
IDR - Industrial Development Revenue
PCR - Pollution Control Revenue
RANS - Revenue Anticipation Notes
TRANS - Tax and Revenue Anticipation Notes
Notes to Portfolios of Investments
(a) These are securities that may be resold to qualified institutional buyers
under Rule 144A or securities offered pursuant to section 4 (2) of the
Securities Act of 1933, as amended. These securities have been determined to
be liquid under guidelines that have been established by the Board of
Trustees.
(b) Floating Rate Securities -- The rates shown are the effective rates at July
31, 1996.
(c) Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in (a).
(d) For each security, cost (for financial reporting and federal income tax
purposes) and carrying value are the same.
See notes to financial statements.
13
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<PAGE>
Cash Resource Trust
Statements of Assets and Liabilities
July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
U.S.
Money Government Tax-Exempt
Market Money Market Money Market
Fund Fund Fund
<S> <C>
Assets
Investments, at amortized cost (Note 2)
Investment securities $590,078 $ 836,547 $291,860
Repurchase agreements 64,345 568,721 -
Total investments 654,423 1,405,268 291,860
Receivables
Interest receivable 1,147 1,994 1,797
Shares of the portfolio sold 201 191 26
Investments sold - - 1,003
Deferred expenses (Note 2) 65 301 66
Other 371 - 74
Total assets 656,207 1,407,754 294,826
Liabilities
Payables
Dividends 1,346 2,766 355
Investments purchased - - 3,012
Shares of the portfolio redeemed 8,181 2,014 514
Accrued distribution fee (Note 3) 45 117 16
Accrued expenses and other liabilities 135 460 38
Total liabilities 9,707 5,357 3,935
Net Assets $646,500 $ 1,402,397 $290,891
Shares outstanding 646,500 1,402,450 290,894
Net asset value per share $ 1.00 $ 1.00 $ 1.00
</TABLE>
See notes to financial statements.
14
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<PAGE>
Cash Resource Trust
Statements of Operations
Year Ended July 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Money U.S. Government Tax-Exempt
Market Money Market Money Market
Fund Fund Fund
<S> <C>
Investment income
Interest $30,098 $73,399 $ 10,373
Expenses
Distribution fee (Note 3) 2,043 5,016 948
Management fee (Note 3) 1,173 2,660 632
Transfer agent fee (Note 3) 758 2,943 304
Custodian and accounting fees (Note 3) 198 735 140
Shareholder reports 84 344 29
Registration fees 73 274 85
Professional fees 40 137 22
Organizational expenses 10 66 12
Directors' fees 6 22 5
Other 36 122 12
Total expenses 4,421 12,319 2,189
Net investment income 25,677 61,080 8,184
Net increase in net assets resulting from operations $25,677 $61,080 $ 8,184
</TABLE>
See notes to financial statements.
15
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<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, 1996 1995 1996 1995 1996 1995
<S> <C>
Increase in Net Assets
Operations
Net investment income $ 25,677 $ 13,949 $ 61,080 $ 47,780 $ 8,184 $ 6,665
Net realized gain (loss)
on investments sold - 4 - (53) - (3)
Increase in net
assets from
operations 25,677 13,953 61,080 47,727 8,184 6,662
Distributions to
Shareholders
Net investment income (25,677) (13,949) (61,080) (47,780) (8,184) (6,665)
Net realized gain on
investments - (4) - - - -
Net decrease from
distributions (25,677) (13,953) (61,080) (47,780) (8,184) (6,665)
Capital Share Transactions
(at $1.00 per share)
Net proceeds from sale of
shares 3,001,684 1,715,060 5,769,658 4,322,307 1,194,000 1,029,842
Reinvestment of dividends 25,161 13,420 60,634 46,908 8,146 6,528
Cost of shares redeemed (2,803,002) (1,498,083) (5,644,585) (4,060,291) (1,178,150) (965,174)
Change in net assets
from capital share
transactions 223,843 230,397 185,707 308,924 23,996 71,196
Net increase in net assets 223,843 230,397 185,707 308,871 23,996 71,193
Net Assets
Beginning of year 422,657 192,260 1,216,690 907,819 266,895 195,702
End of year $ 646,500 $ 422,657 $ 1,402,397 $ 1,216,690 $ 290,891 $ 266,895
</TABLE>
See notes to financial statements.
16
<PAGE>
<PAGE>
Cash Resource Trust
Financial Highlights
<TABLE>
<CAPTION>
Money Market Fund
Year Year Period
Ended Ended Ended
7/31/96 7/31/95 7/31/94*
<S> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05** 0.02
Distributions
Net investment income (0.05) (0.05)** (0.02)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
Total Return 4.91% 4.97% 1.83%(b)
Ratios / Supplemental Data
Net assets, end of period (in thousands) $646,500 $422,657 $192,260
Ratio of expenses to average net assets 0.82% 0.82% 0.89%(a)
Ratio of expenses to average net assets excluding waivers 0.82% 0.82% 0.93%(a)
Ratio of net investment income to average net assets 4.77% 4.96% 2.96%(a)
</TABLE>
(a) Annualized.
(b) Total Return for periods less than one year are not annualized.
* For the period from December 20, 1993 (commencement of operations) to July
31, 1994.
** Includes net realized capital gains (losses) which were under $0.01 per
share.
See notes to financial statements.
17
<PAGE>
<PAGE>
Cash Resource Trust
Financial Highlights (continued)
<TABLE>
<CAPTION>
U.S. Government Tax-Exempt
Money Market Fund Money Market Fund
Year Year Period Year Year Period
Ended Ended Ended Ended Ended Ended
7/31/96 7/31/95 7/31/94* 7/31/96 7/31/95 7/31/94*
<S> <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 0.05** 0.02 0.03 0.03** 0.01
Distributions
Net investment income (0.05) (0.05) (0.02) (0.03) (0.03) (0.01)
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return 4.74% 4.82% 1.82%(b) 2.90% 3.05% 1.16%(b)
Ratios / Supplemental Data
Net assets, end of period (in
thousands) $1,402,397 $1,216,690 $907,819 $290,891 $266,895 $195,702
Ratio of expenses to average
net assets 0.93% 0.88% 0.80%(a) 0.76% 0.72% 0.65%(a)
Ratio of expenses to average
net assets excluding
waivers 0.93% 0.88% 0.83%(a) 0.76% 0.74% 0.74%(a)
Ratio of net investment
income to average net
assets 4.63% 4.75% 2.91%(a) 2.85% 3.01% 1.87%(a)
</TABLE>
(a) Annualized.
(b) Total Return for periods less than one year are not annualized.
* For the period from December 20, 1993 (commencement of operations) to July
31, 1994.
** Includes net realized capital gains (losses) which were under $0.01 per
share.
See notes to financial statements.
18
<PAGE>
<PAGE>
Cash Resource Trust
Notes to Financial Statements
July 31, 1996
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, 1996 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 investment objective of each Fund is to seek current income consistent with
preservation of capital and maintenance of liquidity.
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 in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect amounts
reported herein. Although actual results could differ from these estimates, any
such differences are expected to be immaterial to the net assets of 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.
19
<PAGE>
<PAGE>
Cash Resource Trust
Notes to Financial Statements
(continued)
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
counterparties to honor the terms of the repurchase agreement. Accordingly, the
Trust could receive less than the repurchase price on the sale of collateral
securities.
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, 1996, U.S. Government 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.
20
<PAGE>
<PAGE>
Cash Resource Trust
Notes to Financial Statements
(continued)
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. 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, 1996, the
Investment Adviser and sub-adviser earned the following advisory fees:
Adviser Sub-Adviser
Fee Fee
Earned Earned
Money Market Fund $1,172,603 $ 900,553
U.S. Government Fund 2,660,041 1,995,031
Tax-Exempt Fund 632,135 488,468
21
<PAGE>
<PAGE>
Cash Resource Trust
Notes to Financial Statements
(continued)
In addition, the Funds provide direct reimbursement to Mentor for certain
accounting and operations related costs not covered under the Investment
Management Agreement. For the year ended July 31, 1996, the Money Market Fund,
U.S. Government Fund and Tax-Exempt Fund paid $12,482, $30,947 and $6,767,
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, 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.
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).
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, 1996, Wheat earned
fees of $757,964, $2,942,606 and $304,012, respectively, from the Money Market
Fund, U.S. Government Fund and Tax-Exempt Fund.
22
<PAGE>
<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, 1996 and the related statements of operations for the year
then ended, and the statements of changes in net assets for each of the years in
the two year period then ended, and financial highlights for each of the years
in the two year period 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 and financial highlights. Our procedures included
confirmation of securities owned as of July 31, 1996 by correspondence with the
custodian and brokers. 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, 1996, the results of their operations for the year then
ended and the changes in their net assets for each of the years in the two year
period then ended and their financial highlights for the periods indicated in
the first paragraph above, in conformity with generally accepted accounting
principles.
/s/ KPMG PEAT MARWICK LLP
Boston, Massachusetts
September 6, 1996
23
<PAGE>
<PAGE>
Shareholder Information
Trustees
Daniel J. Ludeman, Trustee & Chairman
Chairman and Chief Executive Officer
Mentor Investment Group, Inc.
Arnold H. Dreyfuss, Trustee
former Chairman and
Chief Executive Officer
Hamilton Beach/Proctor-Silex, Inc.
Thomas F. Keller, Trustee
former Dean, Fuqua School of Business
Duke University
Louis W. Moelchert, Jr., Trustee
Vice President for Business & Finance
University of Richmond
Stanley F. Pauley, Jr., Trustee
Chairman and Chief Executive Officer
Carpenter Company
Troy A. Peery, Jr., Trustee
President
Heilig-Meyers Company
Peter J. Quinn, Jr., Trustee
Managing Director
Mentor Investment Group, Inc.
Officers
Paul F. Costello, President
Managing Director
Mentor Investment Group, Inc.
Terry L. Perkins, Treasurer
Senior Vice President
Mentor Investment Group, Inc.
John M. Ivan, Secretary
Managing Director/Assistant General Counsel
Wheat First Butcher Singer, Inc.
Michael A. Wade, Assistant Treasurer
Associate Vice President
Mentor Investment Group, Inc.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by a prospectus, which contains facts concerning the
objective, policies, management fees, and expenses of the Trust and further
information.
Cash Resource Trust
901 East Byrd Street
Richmond, VA 23219
