SOLON SHORT DURATION GOVERNMENT FUNDS
1981 N. Broadway, Suite #325
Walnut Creek, CA 94596
510-988-7110
Semi-Annual Report
For the six months ended August 31, 1997
Dear Fellow Shareholder:
We are pleased to report on the performance of the Solon
Short Duration Government Funds for the first half of The
Solon Funds' fiscal year, the six months ended August 31,
1997. Included, too, are performance figures showing
cumulative returns since inception March 1, 1994.
Please let us know what we can do to serve you better. We
appreciate your confidence in The Solon Funds and Solon Asset
Management, L.P.
Sincerely,
/s/Deborah Hicks Midanek
- ------------------------
Chairman
October 20, 1997
<PAGE>
<TABLE>
<CAPTION>
Total Returns for the Six-Month Period Ended August 31, 1997
<S> <C> <C>
Six Months Inception
Ended 8-31-97 3-1-94 through
8-31-97
------------- ---------------
Solon Short Duration
Government Funds:
One Year Portfolio 3.07% 23.61%
Three Year Portfolio 3.31% 23.64%
Lehman Government
1-3 Year Index 3.36% 21.87%
</TABLE>
<TABLE>
<CAPTION>
The value of a hypothetical $10,000.00 investment in the
Solon Short Duration Government Funds: One Year Portfolio
and Three Year Portfolio versus the Lehman Government 1-3
Year Index.
One Year Three Year Lehman 1-3 Year
<S> <C> <C> <C>
Feb 10000 10000 10000
Mar 10010 99.7 9949
Apr 10047.04 9919.11 9911.19
May 10078.18 9929.03 9925.07
Jun 10116.48 9965.77 9949.88
Jul 10153.91 10062.44 10039.43
Aug 10188.43 10107.72 10072.56
Sep 10229.19 10092.56 10049.39
Oct 10274.20 10113.75 10072.51
Nov 10309.13 10102.63 10030.2
Dec 10362.74 10143.04 10049.26
Jan 95 10437.35 10266.78 10185.93
Feb 10512.50 10411.54 10324.46
Mar 10559.80 10464.64 10382.28
Apr 10627.39 10550.45 10474.68
May 10677.33 10735.09 10653.80
Jun 10744.60 10799.5 10711.33
Jul 10804.77 10835.13 10754.17
Aug 10877.16 10916.4 10818.7
Sep 10925.02 10978.62 10871.71
Oct 10991.67 11064.25 10961.94
Nov 11070.81 11169.37 11055.12
Dec 11148.30 11272.12 11138.03
Jan 96 11225.22 11373.57 11232.71
Feb 11257.78 11320.12 11188.9
Mar 11319.71 11314.46 11181.07
Apr 11371.71 11324.64 11192.25
May 11430.90 11345.02 11216.87
June 11494.91 11444.86 11298.75
July 11563.88 11491.78 11342.82
Aug 11614.76 11523.96 11384.79
Sep 11687.94 11643.81 11488.39
Oct 11753.39 11775.39 11618.21
Nov 11838.01 11869.59 11704.18
Dec 11877.08 11869.59 11706.52
Jan 97 11932.90 11927.75 11762.71
Feb 11992.56 11968.30 11790.95
Mar 12036.94 11962.32 11781.51
Apr 12110.36 12059.21 11878.12
May 12176.97 12140.01 11961.27
June 12239.07 12226.21 12043.80
July 12306.39 12350.91 12175.08
Aug 12360.54 12364.50 12187.25
The Lehman Government 1-3 Year Index in unmanaged and assumes
reinvestment of all dividends. Past performance is no guarantee
of future results. Principal value will vary; shares may be
worth more or less than their original cost when redeemed.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOLON SHORT DURATION GOVERNMENT FUNDS:
ONE YEAR PORTFOLIO
SCHEDULE OF INVESTMENTS
August 31, 1997
Unaudited
<S> <C> <C>
Principal Value
Amount (Note 1)
- --------- -------
U.S. GOVERNMENT AGENCY SECURITIES-93.35%
Government National Mortgage Association-4.64%
$ 57,022 7.000% due 2/20/2019 $ 58,288
Federal Home Loan Mortgage Corporation-45.16%
4,022 5.150% due 11/15/2006,REMIC 4,012
52,285 5.750% due 3/15/2015, REMIC 52,171
10,000 6.000% due 12/15/2004, REMIC 9,953
96,137 6.000% due 8/15/2001, REMIC 95,927
42,379 6.350% due 7/15/2014, REMIC 42,286
362,000 6.750% due 10/15/2013, REMIC 362,792
---------
567,141
---------
Federal National Mortgage Association-17.41%
100,000 5.500% due 12/25/2014, REMIC 99,469
18,668 5.500% due 4/25/2014, REMIC 18,558
8,383 5.700% due 6/25/2016, REMIC 8,346
22,490 5.750% due 2/25/2012, REMIC 22,399
54,415 6.125% due 2/25/2021, REMIC 54,551
15,328 6.750% due 8/25/2005, REMIC 15,304
---------
218,627
Farmer Mac Discount Notes-14.23%
103,000 5.450% due 9/03/1997 102,922
76,000 5.450% due 9/22/1997 75,724
---------
178,646
Farm Credit Discount Note-11.91%
150,000 5.450% due 9/15/1997 149,614
---------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES (Cost $1,172,537) 1,172,316
---------
U.S. TREASURY OBLIGATIONS-2.95%
U.S. Treasury Notes-15.6%
27,000 5.875% due 10/31/1998 27,000
10,000 6.375% due 5/15/2000 10,072
---------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $36,917) 37,072
---------
COLLATERALIZED MORTGAGE OBLIGATIONS-11.45%
41,210 Residential Funding Mortgage Security-3.24%
5.065 due 10/25/2008 (Cost $40,585) 40,747
103,194 Salomon Brothers Mortgage Securities VII-8.21%
6.650% due 5/25/2024 (Cost $102,952) 103,000
---------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS(Cost $143,537) 143,747
---------
TOTAL INVESTMENTS (Cost $ 1,352,991) 107.74% 1,353,135
OTHER ASSETS AND LIABILITIES (Net) (7.75%) (97,227)
------ ---------
NET ASSETS 100.0% $1,255,908
====== =========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOLON SHORT DURATION GOVERNMENT FUNDS:
THREE YEAR PORTFOLIO
SCHEDULE OF INVESTMENTS
August 31, 1997
Unaudited
<S> <C> <C>
Principal Value
Amount (Note 1)
- --------- --------
U.S. GOVERNMENT AGENCY SECURITIES-51.75%
Government National Mortgage Association-7.27%
$ 500,000 8.000% due 11/01/2011, TBA $ 511,875
250,000 7.500% due 9/01/2011, TBA 251,953
287,825 6.875% due 11/20/2018 294,571
132,224 7.125% due 8/20/2017 135,364
----------
1,193,763
Federal National Mortgage Association-20.60%
916,452 6.000% due 10/01/2008 895,832
146,207 7.839% due 12/01/2017 149,817
155,000 6.500% due 9/01/2011, TBA 149,381
465,962 9.000% due 4/01/2016 494,648
829,917 5.700% due 6/25/2016, REMIC 826,286
269,879 5.750% due 2/25/2012, REMIC 268,783
585,033 6.125% due 2/25/2021, REMIC 586,496
8,397 9.400% due 10/25/2017, REMIC 8,523
---------
3,379,766
Federal Home Loan Mortgage Corp-23.88%
990,000 7.000% due 9/01/2011, TBA 994,950
21,079 5.000% due 2/15/2002, REMIC 21,013
48,269 5.150% due 11/15/2006, REMIC 48,148
265,000 5.400% due 4/15/2014, REMIC 263,095
550,000 5.500% due 12/15/2002, REMIC 547,766
324,000 6.000% due 12/15/2004, REMIC 322,481
384,551 6.000% due 8/15/2001, REMIC 383,709
80,343 6.100% due 4/15/2014, REMIC 80,167
314,358 6.200% due 5/15/2013, REMIC 131,670
95,087 6.250% due 4/15/2003, REMIC 95,058
169,516 6.350% due 7/15/2014, REMIC 169,146
263,302 6.500% due 6/15/2002, REMIC 262,973
138,000 6.750% due 10/15/2013, REMIC 138,302
263,433 10.000% due 6/15/2020, REMIC 278,251
---------
3,918,729
---------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES (Cost $8,443,093) 8,492,258
---------
COLLATERALIZED MORTGAGE OBLIGATIONS-12.07%
Countrywide Funding Corp
177,217 6.000% due 5/25/2009 176,497
Citicorp Mortgage Securities, Inc.
815,516 6.250% due 6/25/2024 810,419
GE Capital Mortgage Services, Inc.
121,212 7.000% due 5/25/2024 121,553
Countrywide Mortgage Backed Securities, Inc.
677,034 6.500% due 1/25/2024 675,553
Salomon Brothers Mortgage securities VII
196,824 6.650% due 5/25/2024 196,455
----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $1,974,904) 1,980,477
U.S. TREASURY NOTES -34.28%
1,142,000 6.375% due 5/15/2000 1,150,208
675,000 6.375% due 5/15/1999 679,430
740,000 6.000% due 8/15/2000 738,150
822,000 6.250% due 6/30/2002 822,000
1,350,000 5.875% due 1/31/1999 1,349,578
885,000 5.875% due 10/31/1998 885,000
---------
TOTAL U.S. TREASURY NOTES (Cost $5,628,142) 5,624,366
---------
REPURCHASE AGREEMENTS-13.88%
Repurchase agreement with Paine Webber, 5.65%,
dated 8/28/97, due 9/2/97, (Collateralized by
various Freddie Mac Securities, par value of
$2,375,000, 7.84%, due 4/15/24, value of
2,278,000 $2,324,292) (Cost $2,278,000) 2,278,000
TOTAL INVESTMENTS (Cost $18,324,139) 111.98% 18,375,101
OTHER ASSETS AND LIABILITIES (Net) (11.98%) (1,966,142)
------ -----------
NET ASSETS 100.0% $16,408,959
====== ===========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE SOLON FUNDS
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1997
(Unaudited)
Solon Short Duration
Government Funds:
<S> <C> <C>
One Year Three Year
-------- ----------
ASSETS
Investment in securities, at value
(Identified cost $1,352,991 and
$18,324,139 respectively) $1,353,135 $18,375,101
Cash 987 775
Receivables:
Fund Shares Sold - 56,932
Interest 5,167 119,052
Paydown and other receivable (302) 99,890
-------- ----------
Total Assets 1,358,987 18,651,750
-------- ----------
LIABILITIES
Investment securities purchased 102,990 2,217,134
Payable to manager (Note 2) - 25,352
Dividends Payable 89 305
-------- ----------
Total Liabilities 103,079 2,242,791
-------- ---------
NET ASSETS $1,255,908 $16,408,959
======== ===========
Net Assets consist of:
Capital shares $1,252,125 $16,398,881
Accumulated undistributed net
investment income (702) (4,983)
Accumulated net realized gain/loss
on investment transactions 4,341 (35,901)
Net unrealized appreciation
depreciation) of investments (Note 3) 144 50,962
--------- -----------
NET ASSETS $1,255,908 $16,408,959
========== ===========
Net Asset Value offering and redemption
price per share $10.06 $10.03
Number of shares outstanding with a par value
of $.01 per share, unlimited
number of shares authorized 124,780 1,636,336
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE SOLON FUNDS
STATEMENT OF OPERATIONS
For the Six Months Ended August 31, 1997
(Unaudited)
Solon Short Duration
Government Funds:
One Year Three Year
-------- ----------
<S> <C> <C>
INVESTMENT INCOME
Interest $27,569 $496,193
Expenses:
Adviosry fee (Note 2) 1,207 20,421
Custodian fee 17,111 22 612
Directors' fees & expenses (Note 2) 1,516 1,516
Shareholder Services 9,212 26,996
Interest expense (Note 4) - 368
Legal fee 2,308 2,308
Audit expense 10,625 10,625
Insurance expense 1,821 1,821
Administrative expense 338 5,718
Other 125 1,224
------- --------
Total expenses 44,263 93,609
Expenses reimbursed or fees waived
by the manager (Note 2) (44,263) (73,636)
------- --------
Total expenses - 19,973
------- --------
NET INVESTMENT INCOME 27,569 476,220
------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) 1,921 6,501
Net change in unrealized
appreciation (depreciation)(Note 3) (743) 31,702
------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS: 1,778 38,203
------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS: $28,747 $514,423
======= ========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE SOLON FUNDS
STATEMENT OF CHANGES IN NET ASSETS
Solon Short Duration Government Funds:
One Year Three Year
------------------------ ----------------------
For the For the For the For the
Six Months Year Six Month Year
Ended Ended Ended Ended
August 31, February 28, August 31, February 28,
1997 1997 1997 1997
(Unaudited) (Unaudited)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS:
FROM OPERATIONS:
Net investment income $27,569 $39,595 $476,220 $746,463
Net realized gain (loss)
from investment transactions 1,921 1,178 6,501 (37,298)
Net unrealized appreciation
of investments (Note 3) (743) 597 31,702 10,532
Net increase in net assets ------- ------- ------- -------
resulting from operations 28,747 41,370 514,423 719,697
------- ------- ------- -------
FROM DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income (28,455) (39,383) (482,548) (750,223)
Net realized gains - - - (20,722)
------ ------- ------- -------
Total distributions to
Shareholders (28,455) (39,383) (482,548) (770,945)
------ ------- ------- -------
FROM CAPITAL SHARE
TRANSACTIONS:
Net increase in net assets
from capital share
transactions (Note 5) 391,053 464,510 (1,432,334) 6,834,101
------- ------- --------- ----------
NET INCREASE IN NET ASSETS 391,345 466,497 (1,400,459) 6,782,854
NET ASSETS:
Beginning of the period 864,563 398,066 17,809,418 11,026,565
------- ------- ---------- ----------
End of period $1,255,908 $864,563 $16,408,959 $17,809,419
========== ======== =========== ===========
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE SOLON FUNDS
FINANCIAL HIGHLIGHTS
Solon Short Duration Government Funds:
One Year
- ----------------------------------------------
For the For the For the
For the
Six Months Year Year
Year
Ended Ended Ended
Ended
August 31, February 28, February 29,
February 28,
1997 1997 1996
1995
(Unaudited)
----------- ---------- -----------
- -----------
<S> <C> <C> <C>
<C>
Net asset value,
beginning of period $10.06 $10.03 $9.99
$10.00
Income from investment
operations:
Net investment income 0.30 0.60 0.64
0.53
Net realized and unrealized
gain (loss) on investments 0.00 0.03 0.05
(0.02)
------ ------- ------
- ------
Total from investment
operations 0.30 0.63 0.69
0.51
Distributions from:
Net investment income (0.29) (0.60) (0.65)
(0.52)
Realized gain on investments - - -
-
------ ------ ------
- ------
Net asset value,
end of period $10.07 $10.06 $10.03
$9.99
====== ====== ======
======
Total Return 5.28% 6.32% 7.09%
5.21%
Ratios/Supplemental Data:
Net assets, end of period $1,225,908 $864,563 $398,066
$144,667
Ratio of expenses to average
net assets:
Before expense reimbusement
of operating expenses 9.07%* 10.25% 16.47%
27.89%
After expense reimbursement
operating expenses 0.00%* 0.00% 0.00%
0.00%
Interest expense - - -
-
Ratio of net investment income
to average net assets 5.65%* 5.91% 6.46%
5.74%
Portfolio turnover rate 61.88% 81.82% -
-
Debt outstanding at end
of period - - -
-
Average debt outstanding
during the Period ** - - -
-
Average shares outstanding
during the period** - - -
-
Average debt per share
during the period** - - -
-
* Annualized
** Average based upon amounts outstanding at each month end.
</TABLE>
<TABLE>
<CAPTION>
THE SOLON FUNDS
FINANCIAL HIGHLIGHTS
Solon Short Duration Government Funds:
Three Year
- ----------------------------------------------
For the For the For the
For the
Six Months Year Year
Year
Ended Ended Ended
Ended
August 31, February 28, February 29,
February 28,
1997 1997 1996
1995
(Unaudited)
----------- ---------- -----------
- -----------
<S> <C> <C> <C>
<C>
Net asset value,
beginning of period $10.00 $10.04 $9.80
$10.00
Income from investment
operations:
Net investment income 0.30 0.58 0.60
0.61
Net realized and unrealized
gain (loss) on investments 0.02 (0.01) 0.23
(0.22)
------ ------- ------
- ------
Total from investment
operations 0.32 0.57 0.83
0.39
Distributions from:
Net investment income (0.29) (0.59) (0.59)
(0.59)
Realized gain on investments - (0.02) -
-
------ ------- ------
- ------
Net asset value,
end of period $10.03 $10.00 $10.04
$9.80
====== ====== ======
======
Total Return 5.80% 5.45% 8.73%
4.08%
Ratios/Supplemental Data:
Net assets, end of period $16,408,959 $17,809,418 $11,026,565
$7,064,812
Ratio of expenses to average
net assets:
Before expense reimbusement
of operating expenses 1.14%* 1.21% 1.45%
1.18%
After expense reimbursement
operating expenses 0.24%* 0.24% 0.24%
0.15%
Interest expense 0.00%* 0.02% 0.12%
0.04%
Ratio of net investment income
to average net assets 5.81%* 5.80% 6.18%
6.21%
Portfolio turnover rate 123% 279% 251%
405%
Debt outstanding at end
of period - - -
-
Average debt outstanding
during the period** $0 $56,238 $256,115
$75,604
Average shares outstanding
during the period** 1,639,411 1,320,830 901,238
895,472
Average debt per share
during the period** $0.00 $0.04 $0.28
$0.08
</TABLE>
* Annualized
** Average based upon amounts outstanding at each month end.
<PAGE>
THE SOLON FUNDS
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:
a. ORGANIZATION. The Solon Funds are registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end
management investment company. As of August 31,1997, The
Solon Funds had two series: Solon Short Duration Government Funds:
One Year Portfolio (the "One Year Portfolio") and Solon Short
Duration Government Funds: Three Year Portfolio (the "Three Year
Portfolio") (each a "Fund" and collectively the "Funds"). The
Funds commenced operations on March 1, 1994. The costs of
organization for the One Year Portfolio and the Three Year
Portfolio have been assumed by Solon Asset Management, L.P.
(the "Manager").
b. REPURCHASE AGREEMENTS. Securities pledged as collateral for
repurchase agreements are held on the Funds' behalf by the Funds'
custodian. The Manager is responsible for determining that the
value of the collateral remains at least equal to the resale price
of the agreement.
c. REVERSE REPURCHASE AGREEMENTS. The Funds fully collateralize
reverse repurchase agreements by maintaining cash, U.S. Government
Securities, or other liquid high grade debt instruments equal in
value to the Funds' obligations in a segregated account with the
Funds' custodian.
<PAGE>
THE SOLON FUNDS
NOTES TO FINANCIAL STATEMENTS -(Continued)
d. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Security
transactions are accounted for as of trade date. Realized gains
and losses are determined on the specific identified cost basis.
Interest income includes amortization of discounts and premiums.
Securities purchased on a when-issued or delayed delivery basis
may be settled a month or more after the trade date. Such
securities are included in the portfolio and are subject to
market fluctuations during this period. On the date of the
commitment to purchase or sell, the Funds designate specific
assets with a current value at least equal to the amount of the
commitment to be used for settling the commitment.
e. SECURITY VALUATION. It is the policy of the Funds to value
portfolio securities at market value. Market value is determined
on the basis of last reported sales price, or if no sales are
reported, as is the case with most securities traded over the
counter, the mean between representative bid and asked
quotations. Short-term securities with maturities of 60 days or
less are carried at amortized cost, which approximates market
value. Certain fixed income securities for which market
quotations are not readily available may be valued, pursuant to
guidelines established by the Board of Trustees, with reference
to fixed income securities whose prices are more readily
obtainable and whose durations are comparable to the securities
being valued. Subject to the foregoing, other securities for
which market quotations are not readily available are valued
at fair value as determined in good faith by the Board of
Trustees.
f. FEDERAL INCOME TAXES. The Funds intend to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and will distribute taxable income and net
realized gains sufficient to relieve each Fund from federal income,
excise, and state income taxes.
g. DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are
recorded on the ex-dividend date. The Funds declare dividends
daily and pay them monthly. Distributions of any short-term
capital gains earned by a Fund are distributed no less frequently
than annually. Income and capital gain distributions are
determined in accordance with income tax regulations which may
differ from generally accepted accounting principles.
h. USE OF ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying
notes. Actual results could differ from such estimates.
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
a. Solon Asset Management, L.P. (the "Manager") receives management
fees at the annual rate of 0.25% of the Fund's average net assets.
The Manager performs administrative services for the Funds for
which the Manager receives compensation based upon an annual
rate of 0.07% of its average net assets. The Manager also
provides shareholder services to the Funds for annual fees of
0.25% of the Fund's average net assets.
b. The Manager voluntarily agreed to absorb all the expenses,
excluding interest expense, of the One Year Portfolio for the year
ended August 31, 1997. The manager voluntarily agreed to limit
the Three Year Portfolio's expenses, excluding interest expense,
to .24% of average net assets on an annual basis. Reductions in
fees are subject to recovery within the following three years
provided the Fund is able to effect such reimbursement and remain
in compliance with applicable expense limitations. Any of the
Manager's voluntary absorptions are also subject to recovery,
insofar as expenses do not exceed limits established by the Board
of Trustees. Any request for reimbursement by the Manager is
subject to review and approval by the Board.
c. The Trust's Chairman and Chief Executive Officer is the sole
"affiliated person" as defined in the Investment Company Act.
Each Trustee who is not an "affiliated person" of the Trust
receives an annual retainer of $1,000 and a fee for each meeting
attended of $500, as well as reimbursement for expenses.
<PAGE>
THE SOLON FUNDS
NOTES TO FINANCIAL STATEMENTS -(Continued)
3. SECURITIES TRANSACTIONS:
a. Securities transactions (excluding short term securities) for
the period ended August 28, 1997, were as follows:
Purchases Sales
--------- -----
One Year Portfolio: $ 1,030,615 $ 458,026
Three Year Portfolio: $21,801,310 $19,108,798
b. On August 31, 1997, the composition of unrealized appreciation
and depreciation for federal income tax purposes was as follows:
Net
Tax Basis Tax Basis Unrealized
Unrealized Unrealized Appreciation
Appreciation (Depreciation) (Depreciation)
------------ -------------- --------------
One Year Portfolio $ 714 ($ 570) $ 144
Three Year Portfolio $67,508 ($16,546) $50,962
c. At August 31, 1997, the cost of investments for Federal income
tax purposes was the same as the cost for financial reporting
purposes.
4. SHORT TERM BORROWINGS
For the six months ended August 31, 1997 the maximum borrowings by
the Three Year Portfolio under reverse repurchase agreements
were $632,031. Interest rates ranged from 5.20% to 5.30% during
the period.
5. TRANSACTIONS IN CAPITAL SHARES:
<TABLE>
<CAPTION>
Transactions in capital shares were as follows:
For The Six Months Ending For The Year Ended
August 31, 1997 February 28, 1997
------------------ ------------------
<S> <C> <C> <C> <C>
One Year Portfolio Shares Amount Shares Amount
------ ------ ------ ------
Shares sold 67,703 $681,415 46,027 $462,303
Issued as reinvestment
of dividends 2,834 28,526 3,918 39,388
Shares redeemed (31,698) (318,888) (3,694) (37,181)
------ -------- ------ --------
Net increase 38,839 $391,053 46,251 $464,510
====== ======== ====== ========
Three Year Portfolio Shares Amount Shares Amount
------ ------ ------ ------
Shares sold 205,830 $2,140,369 730,310 $7,303,346
Issued as reinvestment
of dividends 42,467 344,230 77,395 773,032
Shares redeemed (392,937) (3,916,933) (124,869) (1,242,277)
------- --------- ------ ---------
Net increase (144,640) $(1,432,334) 682,836 $(6,834,101
======== ========== ======= ==========
</TABLE>
