<PAGE>
FGIC PUBLIC TRUST-Trademark- FGIC PUBLIC TRUST-Trademark-
- ----------------------------- -----------------------------
A Family of Funds Created for A Family of Funds Created for
Municipalities Municipalities
THESE FUNDS ARE NOT INSURED BY FGIC, THESE FUNDS ARE NOT INSURED BY FGIC,
THE FDIC, OR ANY OTHER INSURER. THE FDIC, OR ANY OTHER INSURER.
FGIC Public Trust
370 17th Street SEMI-ANNUAL REPORT
Suite 2700
Denver, Colorado 80202 OCTOBER 31, 1996
1-800-298-FGIC (3442)
INVESTMENT ADVISOR
FGIC Advisors, Inc.
115 Broadway U.S. TREASURY
New York, New York 10006 MONEY MARKET FUND
U.S. GOVERNMENT
MONEY MARKET FUND
--------------
A Family
of Funds
Created for
ALPS MUTUAL FUNDS SERVICES
- --------------------------
SPONSOR AND DISTRIBUTOR Municipalities
--------------
<PAGE>
LETTER FROM THE CHAIRMAN -------------------------------------------------------
Dear Shareholder:
The FGIC Public Trust Funds have secured their position as the alternative
investment option of choice for municipalities and governmental entities.
In the wake of the collapse of the Orange County investment pool, state and
local government subdivisions are beginning to re-examine their investment
policies and are beginning to ask the important question: How safe are
unregistered investment pools? We believe that the final analysis will show that
investment choices such as FGIC Public Trust are well suited for the municipal
investor.
We are committed to making the Funds as easy to use and as appealing to our
shareholders as possible. If you would like to call us at 1-800-298-FGIC(3442)
or write us at 370 17th Street, Suite 2700, Denver, Colorado 80202, we would
welcome your input about how the Funds can work better for you.
As always, thank you for your continued participation in the FGIC Public Trust
Funds.
Sincerely,
/s/ Ann C. Stern
Ann C. Stern
Chairman
- ------------------------------------------------------------------------------ 1
<PAGE>
MANAGER'S FUND UPDATE ----------------------------------------------------------
U.S. TREASURY MONEY MARKET FUND
The U.S. Treasury Money Market Fund seeks current income and stability of
principal by investing in U.S. Treasury bills, notes and other direct
obligations of the U.S. Treasury and repurchase agreements collateralized 102%
with direct Treasury obligations. The Government guarantee supporting the Fund's
investments applies only to the payment of principal and interest of the Fund's
underlying portfolio securities. It does not guarantee the value of the Fund's
shares nor does it guarantee against adverse price movements brought about by an
increase in prevailing interest rates. The Fund strives to provide investors
with as high a level of current income as is consistent with the preservation of
capital and liquidity. It seeks to maintain a stable net asset value of $1.00
per share although there can be no assurance of this. The Fund's 7-day effective
yield was 5.15% and the 7-day SEC yield was 5.03% as of October 31, 1996.
The Federal Reserve Board initiated its last change in monetary policy by
lowering the key Federal Funds rate to 5.25% from 5.50% on January 31st of this
year. The current shape of the yield curve, substantially "flat" on the shorter
end, suggests a market expectation of potential further cuts in this key
administered rate. The Fund's Manager has adjusted the maturity range of the
Fund to take advantage of relatively high short-term interest rates while
maintaining a substantial degree of liquidity. We do not see any short-term
rewards in extending portfolio maturities at this time, preferring to wait for
more opportune situations for maturity extensions. Clearly, the current shape of
the short-term yield curve is providing minimal rewards for such extensions.
U.S. TREASURY MONEY MARKET FUND
SECTOR PROFILE
as of October 31, 1996
[PIE CHART] Repurchase
Agreements
100%
2 ------------------------------------------------------------------------------
<PAGE>
MANAGER'S FUND UPDATE ----------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
In response to the changing needs of our shareholders, FGIC Advisors
requested that the FGIC Public Trust Funds' Board of Trustees consider the
conversion of the Short-Term U.S. Government Income Fund to the U.S. Government
Money Market Fund. There were a number of considerations that formed the
foundation for this proposal. Our shareholders voiced a need for a
higher-yielding investment vehicle in the maturity range of a money market fund.
We were pleased to be able to respond to our shareholders' needs with the U.S.
Government Money Market Fund, which incorporates lower expenses, more
competitive yields and a broader investment policy, while still providing a
high-degree of liquidity and credit quality. The conversion was approved and
completed in July of this years.
The U.S. Government Money Market Fund invests exclusively in obligations
issued or guaranteed as to principal and interest by the U.S. Government or by
any of its agencies or instrumentalities and repurchase agreements
collateralized 102% by these obligations. The Government guarantee applies only
to the payment of principal and interest of the Fund's underlying portfolio
securities. It does not guarantee the value of the Fund's shares nor does it
guarantee against adverse price movements brought about by an increase in
prevailing interest rates. The Fund strives to provide investors with as high a
level of current income as is consistent with the preservation of capital and
liquidity. It seeks to maintain a stable net asset value of $1.00 per share
although there can be no assurance of this. The Fund's 7-day effective yield was
5.28% and the 7-day SEC yield was 5.14% as of October 31, 1996.
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
TRUST. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS
ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS FOR EACH PORTFOLIO OF THE
TRUST, WHICH CONTAINS INFORMATION CONCERNING THE INVESTMENT POLICIES AND
EXPENSES OF THE FUNDS AS WELL AS OTHER PERTINENT INFORMATION.
U.S. GOVERNMENT MONEY MARKET FUND
SECTOR PROFILE
as of October 31, 1996
[PIE CHART] Government
Agency
28%
Repurchase
Agreements
72%
- ------------------------------------------------------------------------------ 3
<PAGE>
MANAGEMENT OF THE FUNDS --------------------------------------------------------
The property, affairs and business of the Funds are managed by the Board of
Trustees. The Trustees elect officers who are charged with responsibility for
the day-to-day operations of the Funds and the execution of policies formulated
by the Trustees. The Trustees and their affiliations are as follows:
ANN C. STERN - Trustee and Chairman. Ms. Stern is Chairman and Chief Executive
Officer of FGIC. Ms. Stern was named CEO of FGIC in January 1992 and was
elected to Chairman in October 1993. Prior to her appointment, Ms. Stern was
Managing Director and General Counsel of FGIC. Ms. Stern is also a member of
the Executive Committee and Structured Finance Underwriting Committee. Prior to
joining FGIC, Ms. Stern was an Associate and a Partner at two New York City law
firms specializing in municipal bonds. She is a member of several organizations
including the Board of Advisors of the Association of Financial Guaranty
Insurers, the American Bar Association, the Arts and Culture Committee of the GE
Foundation and a member of the Board of Advisors of The Public's Capital, a
quarterly journal on infrastructure. Because of her affiliation with FGIC, Ms.
Stern is considered an "interested" Trustee of FGIC Public Trust.
W. ROBERT ALEXANDER - Trustee and President. Mr. Alexander is the Chief
Executive Officer of ALPS Mutual Funds Services, Inc. which provides
administration and distribution services for proprietary mutual fund complexes.
Prior to co-founding ALPS, Mr. Alexander was Vice Chairman of First Interstate
Bank of Denver, responsible for Trust, Private Banking, Retail Banking, Cash
Management Services and Marketing. Mr. Alexander is a member of the Board of
Trustees of the Colorado Trust, Colorado's largest foundation, as well as a
Trustee of the Hunter and Hughs Trusts. Because of his affiliation with ALPS,
Mr. Alexander is considered an "interested" Trustee of FGIC Public Trust.
BEVERLY S. BUNCH - Trustee. Ms. Bunch is Assistant Professor at the LBJ School
of Public Affairs, University of Texas at San Antonio. Ms. Bunch teaches
graduate courses in public financial management, economics, and quantitative
methods. Ms. Bunch also conducts research in environmental finance and
municipal debt. Prior to her current position, Ms. Bunch was Assistant to the
Executive Director of the Texas Bond Review Board. In that capacity, Ms. Bunch
analyzed proposed state debt issues, briefed board representatives and made
recommendations to state budget officials on capital planning and budgeting.
Ms. Bunch has held several academic positions and has taught courses in public
finance and related subjects. Ms. Bunch also acted as Budget Analyst for the
City of San Antonio where she analyzed and monitored a $64 million budget for
four city departments.
4 ------------------------------------------------------------------------------
<PAGE>
MANAGEMENT OF THE FUNDS (CONTINUED) --------------------------------------------
WILLIAM J. COCHRAN - Trustee. Mr. Cochran served as Director of Finance and
Chief Financial Officer of the City of Hartford, Connecticut from 1987 to 1993.
As Director of Finance, Mr. Cochran had full Charter responsibility for the
fiscal affairs of a major urban government comprised of 6,000 employees, assets
of over $1 billion and an overall operating budget of $500 million. During Mr.
Cochran's tenure with Hartford, the city was awarded the Certificate of
Achievement for Excellence in Financial Reporting and the Distinguished Budget
Presentation Award by the Government Finance Officers Association ("GFOA") for
many years. Prior to his tenure as Director of Finance and Chief Financial
Officer, Mr. Cochran was the Executive Director of the Hartford Development
Commission from October, 1981. Mr. Cochran has served on the Executive Board of
the GFOA and served on its Debt and Fiscal Policy Committee. Mr. Cochran is
also a member of the Connecticut Government Finance Officers Association and is
a Founder and Trustee of the Hartford Partnership for Scholarships.
MAYNARD H. JACKSON, JR. - Trustee. Mr. Jackson served three terms as the mayor
of Atlanta, completing his last term in January of 1994. During his tenure as
mayor, Rand McNally named Atlanta as the best major city in which to live and
work in the United States. Mr. Jackson recently returned to the private sector
as Chairman of the Board of Jackson Securities. Mr. Jackson has also held
positions on several civic related boards including Chairman of the U.S. Local
Government Energy Policy Advisory Committee, founding Chairman of the Rebuild
America Coalition and founding Chairman of the Atlanta Economic Development
Authority of Atlanta. Mr. Jackson was also a key component of Atlanta's
successful bid for the 1996 Summer Olympics. A member of Phi Beta Kappa and a
trustee of Morehouse College, Mr. Jackson is the recipient of numerous honorary
degrees, citations and awards for civic, humanitarian, academic and business
achievements.
Detailed information about the Trustees and their affiliations may be found in
the Statement of Additional Information under Management of the Fund.
- ------------------------------------------------------------------------------ 5
<PAGE>
MANAGEMENT OF THE FUNDS --------------------------------------------------------
FGIC PUBLIC TRUST OFFICERS AND TRUSTEES
Ann C. Stern,
Trustee and Chairman
W. Robert Alexander,
Trustee and President
Beverly S. Bunch,
Trustee
William J. Cochran,
Trustee
Maynard H. Jackson, Jr.,
Trustee
James E. McCullough,
Vice President
William Paston,
Vice President and Treasurer
Steve Howard,
Secretary
6 ------------------------------------------------------------------------------
<PAGE>
U.S. TREASURY MONEY MARKET FUND ------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at amortized cost (which approximates market value)
- - see accompanying statement $265,972,585
Organizational costs, net of accumulated amortization 174,993
Receivable from investment advisor 163,744
Other 16,160
- -------------------------------------------------------------------------------------
Total Assets 266,327,482
- -------------------------------------------------------------------------------------
LIABILITIES
Dividends payable 1,118,060
Accrued expenses 69,006
- -------------------------------------------------------------------------------------
Total Liabilities 1,187,066
- -------------------------------------------------------------------------------------
NET ASSETS $265,140,416
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $265,174,233
Accumulated net realized loss (33,817)
- -------------------------------------------------------------------------------------
NET ASSETS $265,140,416
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 265,174,233
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Net asset value and redemption value per share $1.00
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
- ------------------------------------------------------------------------------ 7
<PAGE>
U.S. TREASURY MONEY MARKET FUND ------------------------------------------------
STATEMENT OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Face Value Market Value(1) Collateral Value
- ---------- ----------------------------------
REPURCHASE AGREEMENTS
COLLATERALIZED BY U.S. GOVERNMENT
OBLIGATIONS 100.31%
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$11,600,000 Repurchase agreement with BA Securities Inc.,
5.52%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.875%
due 2/28/97 $11,601,779 $11,843,215
11,600,000 Repurchase agreement with Barclay's BZW
Securities Inc., 5.54%, dated 10/31/96 and
maturing 11/1/96, collateralized by U.S.
Treasury Note, 6.125%, due 9/30/00 11,601,785 11,832,147
11,600,000 Repurchase agreement with Chase Securities Inc.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 5.875% due
10/31/98 11,601,782 11,832,203
11,600,000 Repurchase agreement with Dean Witter Corp.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Notes, 6.50%
due 8/15/97, 7.125% due 10/15/98, 5.875%
due 3/31/99, 7.25% due 8/15/04, U.S. Treasury
Bill due 11/7/96 11,601,782 11,832,995
11,600,000 Repurchase agreement with First Chicago Capital
Markets, 5.50%, dated 10/31/96 and maturing
11/1/96, collateralized by U.S. Treasury Bond,
6.75% due 8/15/26, U.S. Treasury Notes, 5.25%
due 12/31/97, 7.875% due 4/15/98, 5.875% due
10/31/98, 6.375% due 1/15/99, 5.875% due
3/31/99, 6.00% due 8/15/99, 7.125% due 9/30/99 11,601,772 11,834,728
11,600,000 Repurchase agreement with Goldman Sachs,
5.45%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Bond, 11.625%
due 11/15/04, U.S. Treasury Note, 6.75% due
5/31/99 11,601,756 11,832,510
</TABLE>
8 ------------------------------------------------------------------------------
<PAGE>
U.S. TREASURY MONEY MARKET FUND ------------------------------------------------
STATEMENT OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
Face Value Market Value(1) Collateral Value
- ---------- ----------------------------------
REPURCHASE AGREEMENTS
COLLATERALIZED BY U.S. GOVERNMENT
OBLIGATIONS (continued)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$42,800,000 Repurchase agreement with Harris Nesbitt,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.00%
due 5/31/98 $42,806,575 $43,669,434
11,600,000 Repurchase agreement with Lehman Brothers Inc.,
5.60%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.125% due
8/31/98 11,601,804 11,832,060
11,600,000 Repurchase agreement with Merrill Lynch Inc.,
5.40%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.125% due
5/31/97 11,601,740 11,842,724
52,731,806 Repurchase agreement with Morgan Stanley Inc.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 5.375% due
11/30/97 52,739,906 53,788,291
11,600,000 Repurchase agreement with Sanwa Securities Inc.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Notes, 7.25% due
11/15/96, 6.125% due 8/31/98, 6.50% due 5/31/01,
5.625% due 2/15/06 11,601,782 11,832,111
11,600,000 Repurchase agreement with Smith Barney Shearson
Inc., 5.48%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.50% due
5/15/05 11,601,766 11,832,591
11,600,000 Repurchase agreement with State Street Bank Corp.,
5.53%, dated 10/31/96 and maturing 11/01/96,
collateralized by U.S. Treasury Bond, 10.75% due
8/15/05 11,601,782 12,028,160
</TABLE>
- ------------------------------------------------------------------------------ 9
<PAGE>
U.S. TREASURY MONEY MARKET FUND ------------------------------------------------
STATEMENT OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
Face Value Market Value(1) Collateral Value
- ---------- ----------------------------------
REPURCHASE AGREEMENTS
COLLATERALIZED BY U.S. GOVERNMENT
OBLIGATIONS (continued)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$42,800,000 Repurchase agreement with UBS Securities Inc.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Bills, due 1/2/97,
1/9/97, 1/16/97, 1/23/97, 1/30/97, 2/6/97 $42,806,574 $43,658,716
TOTAL REPURCHASE AGREEMENTS
(Cost $265,972,585) 265,972,585 271,491,885
-----------------------------------
TOTAL INVESTMENTS
(Cost $265,972,585) 100.31% 265,972,585
Liabilities in Excess of Other Assets (0.31)% (832,169)
--------------------------------
NET ASSETS 100.00% $265,140,416
--------------------------------
--------------------------------
</TABLE>
(1) See note 1 to financial statements.
10 -----------------------------------------------------------------------------
<PAGE>
U.S. TREASURY MONEY MARKET FUND ------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME $8,481,605
- -------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee (Note 3) 480,955
Administration services * (Note 3) 378,081
Legal 54,703
Audit 1,565
Amortization of organization costs 34,237
Insurance 13,756
Registration 74,419
Other 2,017
- -------------------------------------------------------------------------------------
Total Expenses 1,039,733
- -------------------------------------------------------------------------------------
Expenses waived by investment advisor (480,955)
Expenses reimbursed by investment advisor (77,823)
- -------------------------------------------------------------------------------------
Net Expenses 480,955
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME $8,000,650
- -------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $8,000,650
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
*Administration services include: fund accounting, daily pricing, licensing and
registration, shareholder services, transfer agency, custody, fund ratings,
training and printing.
See notes to financial statements.
- ----------------------------------------------------------------------------- 11
<PAGE>
U.S. TREASURY MONEY MARKET FUND ------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
October 31, 1996 (Unaudited) April 30, 1996
---------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $8,000,650 $13,297,094
Net realized gain on investments 0 8,676
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 8,000,650 13,305,770
Dividends to shareholders from net investment income (8,000,650) (13,297,094)
- -----------------------------------------------------------------------------------------------------------
Change in net assets from operations 0 8,676
- -----------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Shares sold 632,161,534 1,141,004,290
Dividends reinvested 7,429,498 9,807,519
- -----------------------------------------------------------------------------------------------------------
639,591,032 1,150,811,809
Shares redeemed (690,814,383) (943,512,019)
- -----------------------------------------------------------------------------------------------------------
Change in net assets derived from beneficial interest
transactions (51,223,351) 207,299,790
- -----------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET ASSETS (51,223,351) 207,308,466
NET ASSETS:
Beginning of period 316,363,767 109,055,301
- -----------------------------------------------------------------------------------------------------------
End of period $265,140,416 $316,363,767
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
12 -----------------------------------------------------------------------------
<PAGE>
U.S. TEASURY MONEY MARKET FUND -------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial
interest outstanding throughout the period indicated:
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
October 31, 1996 (Unaudited) April 30, 1996
---------------------------------------------------
<S> <C> <C>
Net asset value - beginning of period $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05
- -----------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.03) (0.05)
- -----------------------------------------------------------------------------------------------------------
Net asset value - end of period $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------
Total return 2.54% 5.44%
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $265,140 $316,364
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.30%(1) 0.30%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 4.99%(1) 5.36%
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets without fee
waivers 0.65%(1) 0.71%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets
without fee waivers 4.64%(1) 4.95%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized
See notes to financial statements.
- ----------------------------------------------------------------------------- 13
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND ----------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at amortized cost (which approximates market value)
- - see accompanying statement $73,552,714
Interest receivable 59,121
Organizational costs, net of accumulated amortization 8,866
Other 10,776
- -------------------------------------------------------------------------------------
Total Assets 73,631,477
- -------------------------------------------------------------------------------------
LIABILITIES
Dividends payable 287,009
Advisory fees payable 46,414
Accrued expenses 37,812
- -------------------------------------------------------------------------------------
Total Liabilities 371,235
- -------------------------------------------------------------------------------------
NET ASSETS $73,260,242
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $73,421,987
Accumulated net realized loss (161,745)
- -------------------------------------------------------------------------------------
NET ASSETS $73,260,242
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 73,270,670
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Net asset value and redemption value per share $1.00
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
14 -----------------------------------------------------------------------------
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND ----------------------------------------------
STATEMENT OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Face Value Market Value(1)
- ---------- ---------------
U.S. GOVERNMENT OBLIGATIONS 28.54%
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,000,000 Federal Home Loan Bank
5.705%, 5/1/97 $1,000,000
10,000,000 Federal Home Loan Mortgage Corp.
5.27%, 1/2/97 9,908,825
10,000,000 Federal National Mortgage Association
5.245%*, 11/1/96 9,996,701
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $20,905,526) 20,905,526
--------------
Collateral Value
----------------
REPURCHASE AGREEMENTS
COLLATERALIZED BY U.S.
GOVERNMENT OBLIGATIONS 71.86%
- ----------------------------------------------------------------------------------------------------
2,500,000 Repurchase agreement with BA Securities
Inc., 5.52%, dated 10/31/96 and maturing
11/1/96, collateralized by U.S. Treasury
Note, 6.875% due 2/28/97 2,500,383 $2,612,623
2,500,000 Repurchase agreement with Barclay's BZW
Securities Inc., 5.54%, dated 10/31/96 and
maturing 11/1/96, collateralized by U.S.
Treasury Note, 6.125% due 9/30/00 2,500,385 2,550,431
2,500,000 Repurchase agreement with Chase Securities
Inc., 5.53%, dated 10/31/96 and maturing
11/1/96, collateralized by U.S. Treasury Note,
5.875% due 10/31/98 2,500,384 2,554,794
2,500,000 Repurchase agreement with Dean Witter Corp.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Bonds, 7.25%
due 5/15/16 and 7.625% due 2/15/25 2,500,384 2,551,030
</TABLE>
- ----------------------------------------------------------------------------- 15
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND ----------------------------------------------
STATEMENT OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
Face Value Market Value(1) Collateral Value
- ---------- ----------------------------------
REPURCHASE AGREEMENTS
COLLATERALIZED BY U.S.
GOVERNMENT OBLIGATIONS (continued)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$2,500,000 Repurchase agreement with First Chicago
Capital Markets, 5.50%, dated 10/31/96 and
maturing 11/1/96, collateralized by U.S.
Treasury Note, 5.25% due 12/31/97 $2,500,382 $2,553,989
2,500,000 Repurchase agreement with Goldman Sachs,
5.45%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Bond, 11.625%
due 11/15/04 2,500,378 2,551,055
9,000,000 Repurchase agreement with Harris Nesbitt,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.00%
due 5/31/98 9,001,383 9,196,025
2,500,000 Repurchase agreement with Lehman Brothers
Inc., 5.60%, dated 10/31/96 and maturing
11/1/96, collateralized by U.S. Treasury Note,
6.125% due 8/31/98 2,500,389 2,550,320
2,500,000 Repurchase agreement with Merrill Lynch Inc.,
5.40%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.125% due
5/31/97 2,500,375 2,552,799
7,139,116 Repurchase agreement with Morgan Stanley Inc.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by U.S. Treasury Note, 6.00% due
11/30/97 7,140,213 7,283,443
2,500,000 Repurchase agreement with Sanwa Securities
Inc., 5.53%, dated 10/31/96 and maturing
11/1/96, collateralized by U.S. Treasury Notes,
5.375% due 5/31/98, 7.125% due 10/15/98,
U.S. Treasury Bill due 11/14/96 2,500,384 2,550,028
</TABLE>
16 -----------------------------------------------------------------------------
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND ----------------------------------------------
STATEMENT OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
Face Value Market Value(1) Collateral Value
- ---------- ----------------------------------
REPURCHASE AGREEMENTS
COLLATERALIZED BY U.S.
GOVERNMENT OBLIGATIONS (continued)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$2,500,000 Repurchase agreement with Smith Barney
Shearson Inc., 5.48%, dated 10/31/96 and
maturing 11/1/96, collateralized by U.S.
Treasury Note, 6.50% due 5/15/05 $2,500,381 $2,652,902
2,500,000 Repurchase agreement with State Street Bank
Corp., 5.53%, dated 10/31/96 and maturing
11/1/96, collateralized by U.S. Treasury Note,
5.875% due 4/30/98 2,500,384 2,627,712
9,000,000 Repurchase agreement with UBS Securities Inc.,
5.53%, dated 10/31/96 and maturing 11/1/96,
collateralized by FNMA, 6.40% due 5/2/01,
6.48% due 7/10/98, 5.44% due 1/24/01, FHLMC,
6.81% due 6/4/99, 6.747% due 8/23/01 9,001,383 9,182,046
-----------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $52,647,188) 52,647,188 53,969,197
-----------------------------------
TOTAL INVESTMENTS
(Cost $73,552,714) 100.40% 73,552,714
Liabilities in Excess of Other Assets (0.40%) (292,472)
--------------------------------------
NET ASSETS 100.00% $73,260,242
--------------------------------------
--------------------------------------
</TABLE>
(1) See note 1 to financial statements.
*Floating or variable rate security - rate disclosed as of October 31, 1996.
- ----------------------------------------------------------------------------- 17
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND ----------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME $1,377,985
- -------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee (Note 3) 53,541
Administration services * (Note 3) 45,371
Legal 24,933
Audit 348
Amortization of organization costs 1,801
Insurance 1,038
Registration 4,559
Miscellaneous 1,261
- -------------------------------------------------------------------------------------
Total Expenses 132,852
- -------------------------------------------------------------------------------------
Expenses waived by investment advisor (53,541)
Expenses reimbursed by investment advisor (3,935)
- -------------------------------------------------------------------------------------
NET EXPENSES 75,376
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,302,609
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized gain from investment transactions 24,925
- -------------------------------------------------------------------------------------
Unrealized appreciation on investments:
Beginning of period 40,458
End of period 0
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation (40,458)
- -------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (15,533)
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,287,076
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Administration services include: fund accounting, daily pricing, custody,
licensing and registration, shareholder servicing, transfer agency, custody,
fund ratings, training and printing.
See notes to financial statements.
18 -----------------------------------------------------------------------------
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND ----------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
October 31, 1996 (Unaudited) April 30, 1996
---------------------------- --------------
<S> <C> <C>
OPERATIONS
Net investment income $1,302,609 $1,828,452
Net realized gain (loss) on investments 24,925 2,142
Net change in unrealized appreciation (40,458) 4,513
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,287,076 1,835,107
Dividends to shareholders from net investment income (1,302,578) (1,828,452)
- -----------------------------------------------------------------------------------------------------------
Change in net assets from operations (15,502) 6,655
- -----------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Shares sold 108,183,474 23,564,658
Dividends reinvested 843,575 1,457,918
- -----------------------------------------------------------------------------------------------------------
109,027,049 25,022,576
Shares redeemed (66,833,453) (35,840,169)
- -----------------------------------------------------------------------------------------------------------
Change in net assets derived from beneficial interest
transactions 42,193,596 (10,817,593)
- -----------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS 42,178,094 (10,810,938)
NET ASSETS:
Beginning of period 31,082,148 41,893,086
- -----------------------------------------------------------------------------------------------------------
End of period $73,260,242 $31,082,148
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
- ----------------------------------------------------------------------------- 19
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND ----------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest
outstanding throughout the period indicated: For the Six For the
Months Ended Year Ended
October 31, 1996 (Unaudited) April 30, 1996
---------------------------- --------------
<S> <C> <C>
Net asset value - beginning of period $9.97 $9.97
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.11 0.55
- -----------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.11) (0.55)
Stock split (Note 4) (8.97) -
- -----------------------------------------------------------------------------------------------------------
Net asset value - end of period $1.00 $9.97
- -----------------------------------------------------------------------------------------------------------
Total return 2.54% 5.65%
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $73,260 $31,082
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.29%(1) 0.60%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 5.06%(1) 5.38%
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets without fee waivers 0.52%(1) 0.85%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets without
fee waivers 4.84%(1) 5.12%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate n/a(2) 0.00%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized.
(2) A portfolio turnover rate is, in general, calculated for non-money market
funds and therefore is no longer applicable for the U.S. Government Money
Market Fund (see Note 4).
See notes to financial statements.
20 -----------------------------------------------------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
FGIC Public Trust, (the "Trust") is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The U.S.
Treasury Money Market Fund and the U.S. Government Money Market Fund ("Funds"),
are represented by separate classes of shares of beneficial interest of the
Trust, which is organized as a Delaware business trust.
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.
INVESTMENT VALUATION: The U.S. Treasury Money Market Fund and the U.S.
Government Money Market Fund value their securities on the basis of amortized
cost which approximates market value.
REPURCHASE AGREEMENTS: The Funds' custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that value,
including accrued interest, is at least 102% of the repurchase price. In the
event of default on the obligation to repurchase, the Funds have the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default by or
bankruptcy of the other party to the agreement, realization and/or retention of
the collateral may be subject to legal proceedings.
FEDERAL INCOME TAXES: It is the Funds' policy to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no Federal Income Tax provisions are required.
ORGANIZATION COSTS: The Funds have deferred certain organization costs.
Such costs are being amortized over a 60 month period from the commencement of
operations. In the event that all, or part of FGIC's initial investment in
shares of the Funds are withdrawn during the amortization period, the redemption
proceeds will be reduced by the proportionate amount of the unamortized
organization costs represented by the ratio that the number of shares redeemed
bears to the number of initial shares outstanding at the time of each
redemption.
OTHER: Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Dividends from net investment
income are declared daily and paid monthly. Distributions of accumulated net
realized gains, if any, are declared at least once a year. Realized gains and
losses from investment transactions are reported on an identified cost basis
which is the same basis the Funds use for Federal Income Tax Purposes.
- ----------------------------------------------------------------------------- 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) --------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
2. SHARES OF BENEFICIAL INTEREST
On October 31, 1996, there was an unlimited number of no par value shares
of beneficial interest authorized. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Money Market Fund U.S. Government Money Market Fund
--------------------------------------------- ----------------------------------------------
For the Six Months For the Year Ended For the Six Months For the Period Ended
Ended October 31, 1996 April 30, 1996 Ended October 31, 1996 April 30, 1996
---------------------- ------------------ ---------------------- --------------------
<S> <C> <C> <C> <C>
Shares Sold 632,161,534 1,141,004,290 106,259,577 2,361,064
- -----------------------------------------------------------------------------------------------------------------------------
Shares Reinvested 7,429,498 9,807,519 579,686 146,094
- -----------------------------------------------------------------------------------------------------------------------------
Stock Split (Note 4) - - 27,832,061 -
- -----------------------------------------------------------------------------------------------------------------------------
Total 639,591,032 1,150,811,809 134,671,324 2,507,158
- -----------------------------------------------------------------------------------------------------------------------------
Shares Redeemed 690,814,383 943,512,019 64,517,712 3,591,204
- -----------------------------------------------------------------------------------------------------------------------------
Net Increase
(Decrease) (51,223,351) 207,299,790 70,153,612 (1,084,046)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
3. INVESTMENT ADVISORY FEES, ADMINISTRATION FEES AND OTHER RELATED
PARTY TRANSACTIONS
The Trust has entered into Investment Advisory Agreements with
FGICAdvisors, Inc. (FGIC). Pursuant to these advisory agreements with the
Trust, the Investment Advisor is entitled to an advisory fee, computed daily and
payable monthly. FGICreceives an annual fee of .35 percent and .15 percent of
the average net assets of the U.S. Treasury Money Market Fund and U.S.
Government Money Market Fund, respectively. In addition, for the six months
ended October 31, 1996 , FGIC waived all of its advisory fee and voluntarily
assumed some of the expenses of the U.S. Treasury Money Market Fund and the U.S.
Government Money Market Fund. ALPSMutual Funds Services, Inc. (ALPS) serves as
the Funds' administrator. ALPS is entitled to receive a fee from the Funds for
its administrative services, computed daily and payable monthly, at the annual
rate of .18 percent of average daily net assets up to $500 million, .15 percent
on the next $500 million and .12 percent on assets in excess of $1 billion
subject to a minimum monthly fee of $62,500 for the U.S. Treasury Money Market
Fund and $7,500 for the U.S. Government Money Market Fund.
- ----------------------------------------------------------------------------- 22
<PAGE>
NOTES TO FINANCIAL STATEMENT (CONTINUED) ---------------------------------------
3. INVESTMENT ADVISORY FEES, ADMINISTRATION FEES AND OTHER RELATED
PARTY TRANSACTIONS (continued)
Four shareholders of the U.S. Treasury Money Market Fund owned 8.1 percent,
7.2 percent, 6.0 percent and 5.2 percent of that Fund's outstanding shares at
October 31, 1996. Six shareholders of the U.S. Government Money Market Fund
owned 24.0 percent, 21.9 percent, 14.2 percent, 11.2 percent, 6.8 percent and
5.3 percent of that Fund's outstanding shares at October 31, 1996.
4. STOCK SPLIT
At a Special Meeting of the U.S. Government Money Market Fund (the "Fund")
(formerly the Short-Term U.S. Government Income Fund) held on June 27, 1996, the
shareholders of the Fund approved an amendment to a fundamental investment
restriction of the Fund to allow for the purchase of United States Government
agency and instrumentality obligations as well as repurchase agreements
collateralized to 102% by direct obligations of United States Government
agencies and instrumentalities. The shareholders also approved that the Fund
change from a non-money market fund to a money market fund and that the Fund
change its name to the U.S. Government Money Market Fund to reflect these
changes. After the close of business on July 9, 1996 the changes approved by the
shareholders of the Fund were implemented. As a money market fund, the Fund
seeks to maintain a net asset value of $1.00 for purposes of purchases and
redemptions. In order to bring the net asset value of the Fund to $1.00, the
Fund executed a stock split of 8.97 to 1 after the close of business on July 9,
1996.
- ----------------------------------------------------------------------------- 23
