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Northern Funds
MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
U.S. GOVERNMENT SELECT MONEY MARKET FUND
MUNICIPAL MONEY MARKET FUND
CALIFORNIA MUNICIPAL MONEY MARKET FUND
ANNUAL REPORT
MARCH 31, 1998
TABLE OF CONTENTS
PAGE
Abbreviations and Other Information........................................ 1
Economic and Market Overview............................................... 2
Portfolio Commentaries..................................................... 3
Money Market Funds
Statements of Assets and Liabilities.................................. 5
Statements of Operations................................................. 6
Statements of Changes in Net Assets...................................... 7
Financial Highlights.................................................... 9
Schedules of Investments
Money Market Fund................................................... 12
U.S. Government Money Market Fund.................................... 16
U.S. Government Select Money Market Fund............................. 17
Municipal Money Market Fund.......................................... 18
California Municipal Money Market Fund............................... 31
Notes to the Financial Statements.......................................... 34
Report of Independent Public Accountants.................................. 36
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NOT FDIC-INSURED May lose value No bank guarantee
- ------------------------------------------------------------------------------
Northern FundsSM are not insured or guaranteed by the U.S. government, nor can
there be any assurance that the money market funds will be able to maintain a
stable net asset value of $1.00 per share.
Shares of Northern Funds are distributed by an independent third party, Sunstone
Distribution Services, LLC, and sold by The Northern Trust Company and its bank
affiliates.
Northern Funds Annual Report
ABBREVIATIONS AND
OTHER INFORMATION
With respect to the Schedules of Investments, the percentage shown for each
investment category reflects the value of investments in that category as a
percentage of total net assets.
Interest rates represent either the stated coupon rate, annualized yield on date
of purchase for discounted notes, or, for floating rate securities, the current
reset rate.
Prerefunding is a procedure in which a bond issuer floats a second bond in order
to pay off the first bond at the first call date. The proceeds from the sale of
the second bond are safely invested, usually in Treasury securities, that will
mature at the first call date of the first bond issue. Those first bonds are
said to be prerefunded after this operation has taken place.
Maturity dates represent the stated date on the security, the next interest
reset date or next puttable dates for floating rate securities or the prerefund-
ed date for these types of securities.
EXPLANATION OF ABBREVIATIONS USED THROUGHOUT THE SCHEDULES OF INVESTMENTS
ADP Automated Data Processing
AMBAC American Municipal Bond
Assurance Corp.
AMT Alternative Minimum Tax
BAN Bond Anticipation Note
BTP Banker's Trust Partnership
CAPMAC Capital Markets
Assurance Corp.
Colld. Collateralized
COP Certificate of Participation
CP Commercial Paper
CVP Central Valley Project
FFCB Federal Farm Credit Bank
FGIC Financial Guaranty
Insurance Corp.
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FMC Fidelity Mortgage Corp.
FNMA Fannie Mae
FRN Floating Rate Note
FSA Financial Security Assurance
G.O. General Obligation
GNMA Government National
Mortgage Association
GTD. Guaranteed
HDA Housing Development Authority
HFA Housing Finance Authority
IDA Industrial Development
Authority
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance
Association
MTN Medium Term Note
P-Floats Puttable Floating Rate Security
PCR Pollution Control Revenue
PSF Permanent School Fund
RAN Revenue Anticipation Note
SFM Single Family Mortgage
SLMA SLM Holding Corp.
SOC GEN Societe Generale
TOB Tender Option Bond
TOC Tender Option Certificate
TOCR Tender Option Custodial Receipt
TRAN Tax and Revenue
Anticipation Note
VRDN Variable Rate Demand Note
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ECONOMIC AND MARKET OVERVIEW
- --------------------------------------------------------------------------------
REVIEW AND OUTLOOK OF THE ECONOMY - MODERATE GROWTH WITH LOW INFLATION EXPECTED
FOR 1998
In 1997, the economy turned in a stellar performance, posting the strongest
growth, the lowest unemployment rate, and the lowest inflation rate since the
start of this business expansion in the spring of 1991. Growth last year was
well-balanced, with personal consumption, business fixed investment, residential
investment, and exports all making substantial positive contributions. Although
economic activity is expected to moderate in 1998 from its 1997 pace, we believe
it is likely to be above its 7-year compound annual rate of about 2.5%.
The principal factor responsible for expected 1998 moderation in U.S. economic
growth is the fallout from the Asian economic difficulties. We believe this will
dampen U.S. export growth, which, in turn, will ripple through other sectors of
our economy. In part because of weaker Asian demand for our products and in part
because of the rapid growth in manufacturing capacity that has occurred here in
recent years, business equipment spending is expected to slow down this year.
Continued relatively strong consumer spending and residential construction
activity is forecast to be an offset to weaker exports and a more moderate pace
of capital spending. Household sector spending will be supported by rising
incomes, increased job security, increased wealth from the equity markets, and
low interest rates. The unemployment rate is expected to remain around its 1997
level of 4.7% as growth in both the supply of and demand for labor moderates.
From the perspective of the U.S. economy, the magnitude and duration of the
Asian drag on export growth depends critically on Japanese economic conditions.
The Japanese economy, which was one of the fastest growing in the industrialized
world in 1996, nearly ground to a halt in 1997 because of continued banking
system problems and an abrupt shift toward a restrictive fiscal policy. The
Japanese government is taking steps to shore-up its banking system. The
government also has announced its plans for the largest fiscal stimulus package
in recent years approximately 3% of its Gross Domestic Product ("GDP"). These
steps are likely to result in some positive growth for the Japanese economy late
in 1998.
We believe continental European economic activity should continue along its
stronger 1997 path. Although European fiscal policies are unlikely to turn
expansionary, neither are they likely to become more restrictive in 1998, given
that the charter member countries of the new European Monetary Union ("EMU")
have been chosen. Thus, what has been a drag on European economic activity could
become a neutral factor. At the same time, some of those charter member
countries will be experiencing more accommodative monetary policies as their
short-term interest rates are adjusted down to the Franco-German level in
preparation for the January 1, 1999 start of the EMU. This is expected to
further bolster European economic growth. So, toward the end of 1998, there is
likely to be something occurring which has been absent through most of this
business expansion a synchronization of accelerating economic growth in Europe
and Japan, with continued solid growth in the U.S.
Inflation is anticipated to stay low this year. With sluggish economic growth in
Asia, commodity prices are not expected to spike higher. We believe the lagged
effects of the recent appreciation of the U.S. dollar will continue to hold down
the prices of goods here. This will offset the rising prices of services, which
are less affected by foreign competition. Although significant increases in
energy prices are not expected, these prices may be near a cycle low as
producers cut back on their output and global demand picks up later this year.
Also toward the end of this year, the lagged effects from the prior dollar
appreciation, which had been holding down inflation, are likely to be waning.
This could set the stage for a drift up in inflation in 1999, especially if
European and Japanese economic activity is picking up at the end of 1998, as
expected.
The Federal Reserve was preparing to tighten monetary policy in the fourth
quarter of last year because it feared that if the economy continued to grow as
rapidly as it did in 1997, inflation was likely to rise. However, the Fed "held
its fire" as the Asian economic crisis intensified in the fall on the assumption
that these events would slow U.S. economic activity, thus acting as a substitute
for Fed tightening. Our export growth is slowing because of the Asian weakness.
But in the first quarter of this year, exceptionally strong domestic demand has
more than offset weakening foreign demand. Some of the strength in first quarter
domestic demand may be "borrowed" from subsequent quarters because of the
unusually mild winter experienced in many parts of the country. Assuming that
economic activity does moderate from its first quarter pace, the Fed is expected
to keep monetary policy on hold through most of this year. However, the risks
are rising that the Fed might engage in some "fine-tuning" tightening either
late this year or early next year.
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PORTFOLIO COMMENTARIES
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MONEY MARKET FUND
The maturity structure of the Fund continues to anticipate interest rate action
by the Federal Reserve. The portfolio is heavily weighted in Tier One
commercial paper (rated in the highest rating category by at least two
nationally recognized statistical rating organizations (NRSROs)) where yields
are attractive. The remainder is invested in certificates of deposit,
repurchase agreements, variable rate notes, Treasury bills and other high-
quality instruments. Quality and yield remain the primary factors in selecting
issues for the portfolio. During the upcoming year, the Fund will be managed in
an effort to take advantage of interest rate changes that occur. The barbell
strategy is implemented to take advantage of any backup in the market. As
always, we will continue to focus on providing our shareholders with the
quality, liquidity and yield they are seeking in a money market fund.
Mary Ann Flynn
Portfolio Manager
U.S. GOVERNMENT
MONEY MARKET FUND
U.S. GOVERNMENT SELECT
MONEY MARKET FUND
Beginning in June 1997, the Funds adopted a barbell maturity structure. This
strategy afforded the Funds with sufficient liquidity to remain competitive in
a rising rate environment while adding yield and hedging against possible
deflation with longer-term securities. In the U.S. Government Money Market
Fund, we have substantially increased our exposure to repurchase agreements both
overnight and in the short-term markets. In the U.S. Government Select Money
Market Fund, we invest in those government agencies which are exempt from state
and local taxation. Looking ahead, we will maintain our emphasis on quality,
liquidity and yield.
Valerie J. Lokhorst
Portfolio Manager
MUNICIPAL MONEY
MARKET FUND
CALIFORNIA MUNICIPAL
MONEY MARKET FUND
The largest single factor affecting the short-term money market arena during the
last year was supply. During 1997, we had a large amount of floating rate
product come into the market. This kept floating rate yields at relatively high
levels for most of 1997, causing the yield curve in short-term municipals to be
very flat. As a result, the barbell strategy we employed was less effective than
it has been in the past. The Funds are designed for people and corporations in
the highest tax bracket, with the California Municipal Money Market Fund
remaining an attractive investment for California taxpayers. Supply will
continue to be a big factor again in 1998, but this time the lack of supply may
keep yields depressed for most of the year. The first quarter of calendar 1998
saw yields in short-term municipals at very low levels compared to taxables.
The Federal Reserve will also play a role in the market in 1998, but what, or
how significant, that role will be remains to be seen.
Brad Snyder
Portfolio Manager
MONEY MARKET FUNDS 7-DAY YIELDS<F1>
PERIOD ENDED MAY 12, 1998
U.S.
U.S. Government California
Government Select Municipal Municipal
Money Money Money Money Money
Market Market Market Market Market
Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------
Current 5.09% 5.01% 4.97% 3.33% 3.25%
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Effective 5.22% 5.14% 5.10% 3.39% 3.30%
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<F1> Yield calculations reflect fee waivers in effect, represent past
performance and will fluctuate. In the absence of fee waivers, current 7-
day yields for the Money Market, U.S. Government Money Market, U.S.
Government Select Money Market, Municipal Money Market and California
Municipal Money Market Funds would have been 5.05%, 4.94%, 4.92%, 3.28% and
3.19%, respectively. An investment in any one of the money market funds is
neither insured nor guaranteed by the U.S. government nor is there any
assurance the Funds will be able to maintain a stable net asset value of
$1.00 per share.
<TABLE>
<CAPTION>
MONEY MARKET FUNDS YIELD<F2> COMPARISONS
AVERAGE MONTHLY RATES
IBC'S
MONEY
FUND
AVERAGETM/
CALIFORNIA
STATE-
IBC'S IBC'S U.S. GOV'T IBC'S IBC'S CALIFORNIA SPECIFIC
MONEY U.S. GOV'T MONEY SELECT MONEY MUNICIPAL MONEY MUNICIPAL STOCK
MONEY FUND MONEY FUND MONEY FUND MONEY FUND MONEY BROKER &
MARKET AVERAGETM/ MARKET AVERAGETM/ MARKET AVERAGETM/ MARKET AVERAGETM/ MARKET GENERAL
FUND ALL TAXABLE FUND GOVERNMENT FUND GOVERNMENT FUND ALL TAX-FREE FUND PURPOSE
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998
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March 5.13% 5.03% 5.09% 4.86% 5.03% 4.86% 2.92% 2.80% 2.75% 2.68%
- ----------------------------------------------------------------------------------------------------------------------------------
February 5.16% 5.05% 5.13% 4.87% 5.04% 4.87% 2.82% 2.77% 2.58% 2.65%
- ----------------------------------------------------------------------------------------------------------------------------------
January 5.25% 5.10% 5.19% 4.90% 5.15% 4.90% 3.06% 2.99% 2.91% 2.87%
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1997
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December 5.27% 5.12% 5.16% 4.92% 5.24% 4.92% 3.33% 3.23% 3.27% 3.12%
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November 5.19% 5.05% 5.14% 4.85% 5.17% 4.85% 3.33% 3.24% 3.35% 3.14%
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October 5.16% 5.01% 5.09% 4.83% 5.01% 4.83% 3.24% 3.11% 3.12% 3.00%
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September 5.15% 5.02% 5.10% 4.84% 5.18% 4.84% 3.28% 3.15% 3.26% 3.11%
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August 5.19% 5.04% 5.11% 4.85% 5.17% 4.85% 3.10% 2.96% 3.07% 2.92%
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July 5.20% 5.02% 5.07% 4.82% 5.16% 4.82% 3.24% 3.08% 3.20% 2.90%
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June 5.22% 5.02% 5.06% 4.82% 5.13% 4.82% 3.41% 3.28% 3.47% 3.15%
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May 5.19% 4.98% 5.02% 4.78% 5.11% 4.78% 3.53% 3.37% 3.58% 3.29%
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April 5.07% 4.94% 4.95% 4.75% 5.05% 4.75% 3.33% 3.17% 3.28% 3.08%
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</TABLE>
<F2> Yield calculations for Northern Funds reflect fee waivers in effect,
represent past performance and will fluctuate; in the absence of fee
waivers, performance would be reduced. An investment in any one of the
money market funds is neither insured nor guaranteed by the U.S. government
nor is there any assurance the Funds will be able to maintain a stable net
asset value of $1.00 per share.
We compare our Funds to the IBC's Money Fund AveragesTM which are
composites of professionally managed money market investments with
similar investment objectives.
NORTHERN FUNDS Annual Report
STATEMENTS OF ASSETS AND LIABILITIES March 31, 1998
<TABLE>
<CAPTION>
MONEY MARKET FUNDS
U.S.
U.S. GOV'T. CALIFORNIA
GOV'T. SELECT MUNICIPAL MUNICIPAL
MONEY MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET MARKET
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA FUND FUND FUND FUND FUND
- -------------------------------------------- --------- -------- -------- --------- ----------
<C> <C> <C> <C> <C>
ASSETS:
Investments, at amortized cost $2,917,130 $245,667 $309,664 $1,810,177 $225,235
Repurchase agreements, at cost which
approximates market value 350,000 171,125 _ _ _
Cash _ _ _ _ 83
Income receivable 16,807 1,446 723 12,825 2,241
Receivable for fund shares sold 76,612 21,610 5,052 39,511 5,348
Receivable for securities sold _ _ _ 8,190 _
Receivable from Adviser 26 8 6 17 4
Deferred organization costs,
net of accumulated amortization 27 10 6 31 6
Prepaid and other assets 74 20 25 50 7
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Total Assets 3,360,676 439,886 315,476 1,870,801 232,924
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LIABILITIES:
Due to custodian 57 _ _ _ _
Dividends payable 14,182 1,765 1,310 4,544 516
Payable for fund shares redeemed 49,685 21,007 7,682 51,615 7,520
Accrued investment advisory fees 216 28 20 121 15
Accrued transfer agent fees 54 7 5 30 4
Accrued administration fees 19 3 2 14 2
Accrued custody and accounting fees 14 2 1 11 2
Accrued registration fees and other liabilities 419 32 31 123 22
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Total Liabilities 64,646 22,844 9,051 56,458 8,081
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Net Assets $3,296,030 $417,042 $306,425 $1,814,343 $224,843
- --------------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Capital stock $3,295,926 $417,011 $306,411 $1,814,017 $224,831
Accumulated undistributed
net investment income 101 27 14 180 13
Accumulated undistributed
net realized gains (losses) 3 4 _ 146 (1)
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Net Assets $3,296,030 $417,042 $306,425 $1,814,343 $224,843
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SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 3,296,023 417,038 306,425 1,814,127 224,844
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
STATEMENTS OF OPERATIONS Year Ended March 31, 1998
MONEY MARKET FUNDS
U.S.
U.S. GOV'T. CALIFORNIA
GOV'T. SELECT MUNICIPAL MUNICIPAL
MONEY MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET MARKET
AMOUNTS IN THOUSANDS FUND FUND FUND FUND FUND
- -------------------------------------------- --------- -------- -------- --------- ----------
<C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $136,282 $19,260 $12,166 $56,875 $7,781
- --------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 14,236 2,046 1,307 9,097 1,287
Administration fees 3,559 512 327 2,274 376
Transfer agent fees 2,373 341 218 1,516 214
Custody and accounting fees 540 115 79 358 87
Registration fees 452 35 44 132 10
Professional fees 40 20 18 33 18
Amortization of organization costs 28 11 4 31 4
Trustees' fees and expenses 28 7 5 23 5
Other 138 70 17 93 18
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Total Expenses 21,394 3,157 2,019 13,557 2,019
Less voluntary waivers of:
Investment advisory fees (4,745) (682) (633) (3,033) (568)
Administration fees (2,372) (294) (203) (1,345) (244)
Less: Reimbursement of expenses by Adviser (1,227) (305) (182) (841) (166)
- --------------------------------------------------------------------------------------------------------------------------------
Net Expenses 13,050 1,876 1,001 8,338 1,041
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NET INVESTMENT INCOME 123,232 17,384 11,165 48,537 6,740
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NET REALIZED GAINS (LOSSES) ON:
INVESTMENTS 3 4 1 255 (1)
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NET INCREASE IN ASSETS RESULTING
FROM OPERATIONS $123,235 $17,388 $11,166 $48,792 $6,739
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</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
MONEY MARKET FUNDS
U.S. GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
--------------------------------- -----------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31,
AMOUNTS IN THOUSANDS 1998 1997 1998 1997
- --------------------- --------------------------------- -----------------------------
<C> <C> <C> <C>
OPERATIONS:
Net investment income $ 123,232 $ 64,325 $ 17,384 $ 11,819
Net realized gains on investments 3 1 4 _
- --------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 123,235 64,326 17,388 11,819
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CAPITAL SHARE TRANSACTIONS:
Shares sold 11,527,035 7,318,021 1,747,441 1,755,453
Shares from reinvestment of dividends 15,289 6,771 3,063 2,684
Shares redeemed (9,853,484) (6,779,419) (1,647,725) (1,650,983)
- --------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Capital Share Transactions 1,688,840 545,373 102,779 107,154
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (123,232) (64,325) (17,384) (11,819)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 1,688,843 545,374 102,783 107,154
NET ASSETS:
Beginning of year 1,607,187 1,061,813 314,259 207,105
- --------------------------------------------------------------------------------------------------------------------------------
End of year $3,296,030 $1,607,187 $417,042 $314,259
- --------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME $101 $77 $27 $21
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
MONEY MARKET FUNDS
U.S. GOVERNMENT CALIFORNIA
SELECT MUNICIPAL MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------------------ ------------------------- -----------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
AMOUNTS IN THOUSANDS 1998 1997 1998 1997 1998 1997
- ---------------------- ------------------------ ------------------------- -----------------------
<C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 11,165 $ 5,924 $ 48,537 $ 37,048 $ 6,740 $ 5,177
Net realized gains
(losses) on investments 1 (1) 255 (109) (1) _
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 11,166 5,923 48,792 36,939 6,739 5,177
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 1,006,456 483,126 7,708,423 6,319,359 1,249,341 1,517,961
Shares from reinvestment of dividends 3,723 2,092 5,789 2,651 1,007 337
Shares redeemed (871,883) (402,489) (7,320,165) (6,004,649) (1,226,493) (1,482,396)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Capital Share Transactions 138,296 82,729 394,047 317,361 23,855 35,902
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (11,165) (5,924) (48,537) (37,048) (6,740) (5,177)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 138,297 82,728 394,302 317,252 23,854 35,902
NET ASSETS:
Beginning of year 168,128 85,400 1,420,041 1,102,789 200,989 165,087
- -----------------------------------------------------------------------------------------------------------------------------------
End of year $306,425 $168,128 $1,814,343 $1,420,041 $224,843 $200,989
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME $14 $10 $180 $153 $13 $9
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
MONEY MARKET FUNDS
U.S. GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
--------------------------------------------- --------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1998 1997 1996 1995<F1> 1998 1997 1996 1995<F1>
- -------------------------- --------------------------------------------- --------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.04 0.05 0.05 0.05 0.04
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.05) (0.05) (0.05) (0.04) (0.05) (0.05) (0.05) (0.04)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN<F2> 5.31% 5.05% 5.57% 4.55% 5.22% 4.93% 5.46% 4.47%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands,
end of year $3,296,030 $1,607,187 $1,061,813 $894,279 $417,042 $314,259 $207,105 $227,543
Ratio to average net assets of<F3>:
Expenses, net of waivers and
reimbursements 0.55% 0.55% 0.49% 0.45% 0.55% 0.55% 0.49% 0.45%
Expenses, before waivers and
reimbursements 0.90% 0.90% 0.91% 0.96% 0.93% 0.96% 0.94% 1.01%
Net investment income, net of
waivers and reimbursements 5.19% 4.94% 5.42% 4.94% 5.10% 4.82% 5.33% 4.93%
Net investment income, before
waivers and reimbursements 4.84% 4.59% 5.00% 4.43% 4.72% 4.41% 4.88% 4.37%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> For the period April 11, 1994 (commencement of operations) through March
31, 1995.
<F2> Assumes investment at net asset value at the beginning of the period,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the period. Total return
is not annualized for periods less than one year.
<F3> Annualized for periods less than a full year.
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (Continued)
Money Market Funds
U.S. Government California
Select Municipal Municipal
Money Market Money Market Money Market
Fund Fund Fund
-------------------------------- ---------------------------------- ------------------------------
Year Year Year Year Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar.
31, 31, 31, 31, 31, 31, 31, 31, 31, 31, 31, 31,
1998 1997 1996 1995<F1> 1998 1997 1996 1995<F2> 1998 1997 1996 1995<F3>
- ------------------------ -------------------------------- ---------------------------------- ------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE,
BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.01
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net
investment income (0.05) (0.05) (0.05) (0.02) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03)(0.04) (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN<F4> 5.24% 5.07% 5.55% 1.75% 3.27% 3.14% 3.54% 2.90% 3.20% 3.19% 3.63% 1.27%
SUPPLEMENTAL DATA
AND RATIOS:
Net assets,
in thousands,
end of year $306,425 $168,128 $85,400 $82,162$1,814,343$1,420,041$1,102,789$927,747$224,843 $200,989$165,087$161,316
Ratio to average
net assets of<F5>:
Expenses, net of
waivers and
reimbursements 0.46% 0.40% 0.33% 0.30% 0.55% 0.55% 0.49% 0.45% 0.49% 0.45% 0.39% 0.35%
Expenses, before
waivers and
reimbursements 0.93% 0.97% 1.00% 1.32% 0.89% 0.90% 0.91% 0.95% 0.94% 0.94% 0.94% 1.07%
Net investment
income, net of
waivers and
reimbursements 5.13% 4.95% 5.43% 5.84% 3.20% 3.08% 3.46% 3.10% 3.14% 3.13% 3.55% 3.78%
Net investment
income, before
waivers and
reimbursements 4.66% 4.38% 4.76% 4.82% 2.86% 2.73% 3.04% 2.60% 2.69% 2.64% 3.00% 3.06%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> For the period December 12, 1994 (commencement of operations) through
March 31, 1995.
<F2> For the period April 11, 1994 (commencement of operations) through
March 31, 1995.
<F3> For the period November 29, 1994 (commencement of operations) through
March 31, 1995.
<F4> Assumes investment at net asset value at the beginning of the period,
reinvestment of all dividends and distributions, and a complete
redemption of the investment at net asset value at the end of the
period. Total return is not annualized for periods less than one year.
<F5> Annualized for periods less than a full year.
See Notes to the Financial Statements.
SCHEDULES OF INVESTMENTS March 31, 1998
MONEY MARKET FUND
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 11.4%
Domestic Certificates of Deposit - 4.1%
Bankers Trust New York Corp.
$25,000 5.91%, 7/14/98 $ 24,998
25,000 5.64%, 1/22/99 24,987
25,000 CrestarBank,
5.60%, 2/2/99 24,997
25,000 Huntington National Bank, Columbus,
5.92%, 9/18/98 24,997
35,000 Union Bank of California,
5.72%, 6/10/98 35,003
--------
134,982
--------
FOREIGN CERTIFICATES OF DEPOSIT - 7.3%
Banque Nationale de Paris, New York Branch
35,000 5.71%, 2/18/99 34,940
24,000 5.82%, 3/30/99 23,974
Barclays Bank, New York Branch
15,000 6.00%, 6/25/98 14,998
32,000 5.63%, 2/25/99 31,980
Canadian Bank Imperial Bank of
Commerce, New York Branch
25,000 5.63%, 4/7/98 25,000
25,000 5.65%, 4/7/98 25,000
10,000 5.99%, 10/21/98 9,997
10,000 National Westminster Bank, New York
Branch, 6.00%, 6/26/98 9,999
Societe Generale, New York Branch
26,000 5.92%, 7/17/98 25,998
15,000 5.90%, 8/21/98 14,997
10,000 5.64%, 1/7/99 10,003
15,000 5.74%, 3/5/99 14,996
--------
241,882
--------
Total Certificates of Deposit
(cost $376,864) 376,864
COMMERCIAL PAPER - 51.4%
ASSET BACKED SECURITIES - 21.9%
15,000 ABC Funding,
5.86%, 6/1/98 14,856
Amsterdam Funding Corp.
10,705 5.61%, 4/10/98 10,690
1,917 5.62%, 4/10/98 1,914
See Notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
ASSET BACKED SECURITIES - 21.9% (CONT'D.)
$15,000 Atlantic Asset Securitization Corp.,
5.61%, 4/9/98 $14,981
11,500 Avco Financial Services Canada Ltd.,
5.63%, 5/29/98 11,397
Certain Funding Corp.
52,760 5.59%, 4/15/98 52,646
17,000 5.56%, 5/12/98 16,894
1,190 5.62%, 5/28/98 1,179
4,680 5.63%, 6/16/98 4,625
Concord Minutemen Capital Co.
12,558 5.64%, 4/14/98 12,532
12,034 5.63%, 4/20/98 11,998
11,867 5.63%, 4/23/98 11,827
12,793 5.64%, 4/23/98 12,749
8,400 5.64%, 5/7/98 8,353
2,500 Cooperative Association of Tractor
Dealers, Series A, 5.57%, 4/23/98 2,492
12,500 Corporate Receivables Corp.,
5.56%, 4/8/98 12,487
46,000 CPI Funding, 5.84%, 5/26/98 45,601
CXC, Inc.
12,500 5.55%, 4/2/98 12,498
12,500 5.56%, 4/3/98 12,496
25,000 Diageo PLC, 5.52%, 7/6/98 24,641
1,817 Eureka Securitization, Inc.,
5.60%, 5/14/98 1,805
12,407 Kitty Hawk Funding Corp.,
5.65%, 5/28/98 12,297
2,371 KZH Crescent I Corp.,
5.63%, 4/20/98 2,364
3,292 KZH Crescent II Corp.,
5.63%, 4/21/98 3,282
4,811 KZH Crescent III Corp.,
5.64%, 4/24/98 4,794
11,019 KZH Crescent IV Corp.,
5.67%, 4/20/98 10,986
Lexington Parker Capital Co. LLC
40,000 5.61%, 4/1/98 40,000
7,747 5.61%, 5/21/98 7,687
12,107 5.57%, 8/11/98 11,866
60,000 New Center Asset Trust,
6.00%, 4/1/98 60,000
11,923 Old Line Funding Corp.,
5.62%, 4/16/98 11,895
3,142 Park Avenue Receivables Corp.,
5.60%, 5/7/98 3,125
SCHEDULES OF INVESTMENTS March 31, 1998
MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
ASSET BACKED SECURITIES - 21.9% (CONT'D.)
$47,469 Pooled Account Receivables Corp.,
5.62%, 4/16/98 $ 47,358
ROSE, Inc.
5,480 5.58%, 4/27/98 5,458
11,000 5.57%, 4/28/98 10,955
10,000 SALTS (II) Cayman Islands Corp.,
5.74%, 6/18/98 10,000
34,000 SALTS (III) Cayman Islands Corp.,
5.73%, 7/23/98 34,000
40,000 Sheffield Receivables Corp.,
6.15%, 4/1/98 40,000
28,500 Special Purpose Accounts Receivable
Cooperative Corp., 5.60%, 5/22/98 28,277
8,000 Sunkyong America, Inc.,
5.57%, 6/8/98 7,917
20,000 Thames Asset Global Securitization,
5.58%, 5/26/98 19,832
20,000 Twin Towers, Inc.,
5.64%, 4/14/98 19,959
Windmill Funding Corp.
25,000 5.61%, 4/8/98 24,973
6,101 5.60%, 5/8/98 6,066
--------
721,752
--------
BROKERAGE SERVICES - 1.4%
Salomon Smith Barney Holdings, Inc.
25,000 5.58%, 4/14/98 24,950
22,000 5.57%, 7/7/98 21,679
--------
46,629
--------
COMMUNICATIONS - 2.2%
9,500 GTE Financial Corp.,
5.69%, 4/27/98 9,461
21,000 GTE Funding Corp.,
5.65%, 6/23/98
20,730
44,000 MCI Communications Corp.,
6.10%, 4/1/98 44,000
--------
74,191
--------
ELECTRONIC AND OTHER ELECTRICAL
COMPONENTS - 3.9%
12,500 Duke Capital Corp.,
5.54%, 5/15/98 12,416
See Notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
ELECTRONIC AND OTHER ELECTRICAL
COMPONENTS - 3.9% (CONT'D.)
General Electric Capital Corp.
$75,000 6.20%, 4/1/98 $ 75,000
40,000 5.56%, 7/17/98 39,358
--------
126,774
--------
FOREIGN DEPOSITORY INSTITUTIONS - 4.2%
30,000 Abbey National North America,
5.76%, 6/17/98 29,641
30,000 Banco Real S.A., Grand Cayman,
5.81%, 4/16/98 29,929
30,000 Halifax Building Society,
5.76%, 6/16/98 29,645
40,000 Lloyds Bank PLC, 5.51%, 7/13/98 39,387
10,000 Nacional Financiera, S.N.C.,
Grand Cayman, 5.86%, 5/13/98 9,934
--------
138,536
--------
Insurance Services - 1.4%
14,966 AON Corp., 5.63%, 4/28/98 14,904
10,000 SAFECO Corp., 5.60%, 5/2/98 9,922
Torchmark, Inc.
10,000 5.58%, 4/15/98 9,979
10,000 5.59%, 4/23/98 9,966
--------
44,771
--------
NONDEPOSITORY BUSINESS
CREDIT INSTITUTIONS - 6.3%
25,000 Beta Finance Corp.,
5.51%, 7/14/98 24,613
90,000 Countrywide Home Loans,
5.61%, 5/27/98 89,226
Finova Capital Corp.
1,000 5.66%, 4/9/98 999
5,000 5.55%, 4/16/98 4,989
20,000 5.59%, 4/29/98 19,914
10,000 5.54%, 5/8/98 9,944
35,000 5.57%, 5/8/98 34,802
3,000 5.57%, 5/22/98 2,977
5,000 5.59%, 5/27/98 4,957
10,000 5.63%, 6/25/98 9,869
6,000 5.63%, 6/26/98 5,920
--------
208,210
--------
SCHEDULES OF INVESTMENTS March 31, 1998
MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
TRANSPORTATION PARTS AND
EQUIPMENT - 9.8%
Chrysler Financial Corp.
$25,000 5.62%, 4/30/98 $ 24,888
37,500 5.61%, 5/4/98 37,308
25,000 5.58%, 5/27/98 24,786
Ford Credit Canada Ltd.
12,500 5.59%, 4/1/98 12,500
25,000 5.56%, 4/3/98 24,992
20,000 5.60%, 4/6/98 19,984
25,000 5.63%, 4/8/98 24,973
20,000 5.68%, 4/9/98 19,975
10,000 5.61%, 4/13/98 9,982
10,000 5.61%, 5/14/98 9,934
15,000 5.51%, 7/16/98 14,763
10,000 Ford Motor Credit Corp.,
6.13%, 4/1/98 10,000
General Motors Acceptance Corp.
10,000 5.88%, 4/15/98 9,978
6,000 5.83%, 4/16/98 5,986
20,000 5.58%, 5/28/98 19,826
10,000 5.63%, 6/10/98 9,892
10,000 5.62%, 6/23/98 9,872
5,000 5.59%, 7/30/98 4,909
15,000 5.57%, 8/12/98 14,700
12,500 5.57%, 8/13/98 12,248
--------
321,496
--------
WHOLESALE TRADE - DURABLE GOODS - 0.3%
10,000 Sinochem American Holdings, Inc.,
5.60%, 4/28/98 9,958
---------
Total Commercial Paper
(cost $1,692,317) 1,692,317
---------
CORPORATE BONDS - 7.0%
10,000 Bank One Milwaukee,
5.60%, 1/29/99 9,996
20,000 Bayerische Landesbank,
5.81%, 8/14/98 20,018
Beta Finance Corp.
10,000 6.00%, 10/27/98 10,000
40,000 5.56%, 2/4/99 40,000
CIT Group Holdings
3,000 6.19%, 4/15/98 3,003
10,000 5.83%, 4/30/98 10,006
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
CORPORATE BONDS - 7.0% (CONT'D.)
$11,760 Communaute Urbaine de Lille,
5.88%, 4/3/98 $ 11,760
10,000 First National Bank of Boston,
5.69%, 4/9/98 10,000
26,000 First Wachovia Bank,
6.20%, 4/6/98 26,000
1,526 GE Engine Receivables 1995-1 Trust,
5.68%, 4/6/98 1,526
5,938 GE Engine Receivables 1996-1 Trust,
5.68%, 4/6/98 5,938
14,000 Huntington National Bank, Columbus,
5.88%, 9/22/98 13,995
20,000 Key Bank N.A.,
6.25%, 4/13/98 20,000
20,000 Morgan Guaranty Trust Co.,
6.00%, 6/22/98 19,998
5,000 Penney (J.C.) & Co., Inc.,
5.95%, 11/15/98 4,980
18,600 Physicians Plus Medical Group,
5.75%, 4/2/98 18,600
6,000 SunTrust Banks, Inc.,
5.89%, 7/14/98 5,999
--------
Total Corporate Bonds
(cost $231,819) 231,819
--------
EURODOLLAR TIME DEPOSITS - 10.0%
40,000 Banco Central Hispanoamericano,
Grand Cayman, 6.25%, 4/1/98 40,000
60,494 Banque Paribas, Grand Cayman,
6.25%, 4/1/98 60,494
120,000 Credit Suisse First Boston,
Grand Cayman, 6.25%, 4/1/98 120,000
30,000 Creditanstalt A.G., Grand Cayman,
6.13%, 4/1/98 30,000
45,000 Key Bank N.A., Grand Cayman,
6.13%, 4/1/98 45,000
25,000 Postipankki Ltd., Grand Cayman,
6.13%, 4/1/98 25,000
10,000 Societe Generale, Grand Cayman,
6.00%, 4/1/98 10,000
--------
Total Eurodollar Time Deposits
(cost $330,494) 330,494
--------
SCHEDULES OF INVESTMENTS March 31, 1998
MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
GUARANTEED INVESTMENT
CONTRACTS - 2.6%
$50,000 General American Life Insurance Co.,
5.89%, 4/23/98 $ 50,000
20,000 Integrity Life Insurance Co.,
6.11%, 4/1/98 20,000
15,000 Transamerica Life Insurance and
Annuity Co., 5.68%, 3/19/99 15,000
--------
Total Guaranteed Investment Contracts
(cost $85,000) 85,000
--------
MUNICIPAL INVESTMENTS - 6.1%
14,000 Flint, Michigan Hospital Building
Authority, 5.70%, 4/2/98 14,000
9,000 Hydro-Quebec Corp., Province of
Quebec, 5.82%, 4/15/98 9,000
15,415 Integris Health, Inc., 5.73%, 4/1/98 15,415
30,000 Los Angeles County, California
Pension Obligation, 5.74%, 4/2/98 30,000
4,431 Municipal Electric Authority of
Georgia, 5.53%, 4/9/98 4,431
12,500 New Jersey Economic Development
Authority, 5.69%, 4/3/98 12,500
5,400 Schreiber Industrial Park-North Co.,
Virginia, 5.65%, 4/2/98 5,400
9,360 Seattle, Washington Limited Tax G.O.,
Series C, 5.50%, 4/1/98 9,360
10,000 Stanislaus County, California
Pension Obligation, 5.79%, 4/1/98 10,000
10,215 State of Texas-Veterans Land Bond,
5.79%, 4/1/98 10,215
13,300 Texas Municipal Power Agency,
5.68%, 4/13/98 13,300
12,745 Virginia HDA Multi-Family Housing Bond,
5.79%, 4/1/98 12,745
Virginia State HDA
Multi-Family Housing Bond,
Series A
32,820 5.55%, 4/1/98 32,820
18,300 5.60%, 4/1/98 18,300
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
MUNICIPAL INVESTMENTS -
6.1% (CONT'D.)
$ 3,150 Waukesha, Wisconsin Health
Systems, Inc., 5.70%, 4/2/98 $ 3,150
----------
Total Municipal Investments
(cost $200,636) 200,636
--------
REPURCHASE AGREEMENTS - 10.6%
250,000 Donaldson, Lufkin & Jenrette Securities,
Inc., dated 3/31/98, repurchase price
$250,041 (Colld. by U.S. Government
Securities), 5.90%, 4/1/98 250,000
100,000 UBS Securities, Inc., dated 3/31/98,
repurchase price $100,017 (Colld. by
U.S. Government Securities),
5.95%, 4/1/98 100,000
----------
Total Repurchase Agreements
(cost $350,000) 350,000
----------
Total Investments - 99.1%
(cost $3,267,130) 3,267,130
----------
Other Assets less Liabilities - 0.9% 28,900
----------
NET ASSETS - 100.0% $3,296,030
==========
SCHEDULES OF INVESTMENTS March 31, 1998
U.S. GOVERNMENT MONEY MARKET FUND
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES - 58.9%
Fannie Mae - 5.5%
$ 9,000 FNMA Discount Note,
5.53%, 4/29/98 $ 8,961
FNMA MTN
5,000 5.89%, 5/21/98 4,999
3,000 5.63%, 8/14/98 2,998
6,000 5.38%, 2/9/99 5,993
----------
22,951
----------
FEDERAL FARM CREDIT BANK - 3.3%
FFCB Bonds
3,000 5.75%, 7/1/98 2,999
7,000 5.70%, 9/2/98 6,997
3,380 FFCB Discount Note,
5.70%, 12/1/98 3,365
340 FFCB MTN,
5.53%, 4/29/98 340
----------
13,701
----------
FEDERAL HOME LOAN BANK - 37.6%
FHLB Bonds
6,000 5.72%, 7/7/98 5,999
12,000 5.715%, 7/21/98 11,999
2,595 5.69%, 10/2/98 2,594
3,800 5.70%, 10/23/98 3,799
3,400 5.792%, 10/23/98 3,399
3,200 5.775%, 10/30/98 3,200
5,400 5.50%, 3/19/99 5,395
5,550 5.50%, 3/26/99 5,545
115,000 FHLB Discount Note,
5.90%, 4/1/98 115,000
----------
156,930
----------
OVERSEAS PRIVATE INVESTMENT
Corp. - 4.3%
18,000 FRN, 5.52%, 4/1/98 18,000
----------
SLM HOLDING CORP. - 8.2%
SLMA MTN
6,000 5.86%, 6/10/98 5,999
3,000 5.63%, 8/6/98 2,999
1,600 5.60%, 8/11/98 1,599
6,000 5.79%, 9/16/98 6,000
4,000 5.72%, 11/20/98 3,998
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
SLM HOLDING CORP. - 8.2% (CONT'D.)
SLMA MTN (cont'd.)
$5,500 5.74%, 12/17/98 $ 5,496
8,000 5.40%, 2/10/99 7,993
----------
34,084
----------
Total U.S. Government Agencies
(cost $245,666) 245,666
----------
NUMBER
OF SHARES
(000S)
- ----------
OTHER - 0.0%
1 Dreyfus Prime Money Market Fund
(cost $1) 1
----------
PRINCIPAL
AMOUNT
(000S)
- ----------
REPURCHASE AGREEMENTS - 41.0%
$100,000 HSBC Securities, Inc.,
dated 3/31/98, repurchase
price $116,250 (Colld. by U.S.
Government Securities),
5.85%, 4/1/98 100,000
50,000 SBC Warburg, Inc.,
dated 3/31/98,
repurchase price
$58,125 (Colld. by U.S.
Government Securities),
5.85%, 4/1/98 50,000
21,125 SBC Warburg, Inc.,
dated 3/31/98,
repurchase price
$24,616 (Colld. by U.S.
Government Securities),
5.95%, 4/1/98 21,125
----------
Total Repurchase Agreements
(cost $171,125) 171,125
----------
Total Investments - 99.9%
(cost $416,792) 416,792
Other Assets less Liabilities - 0.1% 250
----------
NET ASSETS - 100.0% $417,042
==========
SCHEDULES OF INVESTMENTS March 31, 1998
U.S. GOVERNMENT SELECT MONEY MARKET FUND
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES - 101.1%
FEDERAL FARM CREDIT BANK - 2.5%
FFCB Discount Notes
$ 7,500 5.75%, 7/1/98 $ 7,497
230 5.70%, 12/1/98 230
----------
7,727
----------
FEDERAL HOME LOAN BANK - 90.7%
FHLB Bonds
4,000 5.96%, 6/9/98 4,000
5,000 5.715%, 7/21/98 5,000
600 5.70%, 10/23/98 600
4,000 5.435%, 2/2/99 3,994
5,200 5.52%, 3/23/99 5,196
3,000 5.50%, 3/26/99 2,997
FHLB Discount Notes
4,540 5.58%, 4/1/98 4,540
2,328 5.65%, 4/1/98 2,328
84,094 5.90%, 4/1/98 84,094
9,350 5.47%, 4/22/98 9,320
31,000 5.493%, 4/24/98 30,891
19,500 5.43%, 5/1/98 19,412
12,750 5.44%, 5/1/98 12,692
14,382 5.44%, 5/6/98 14,306
10,250 5.41%, 5/8/98 10,193
11,000 5.42%, 5/8/98 10,939
8,500 5.43%, 5/11/98 8,449
9,000 5.424%, 5/13/98 8,943
10,000 5.424%, 5/15/98 9,934
12,820 5.43%, 5/15/98 12,735
2,413 5.43%, 5/20/98 2,395
7,000 5.43%, 5/22/98 6,946
1,440 5.69%, 10/2/98 1,439
2,200 5.70%, 10/23/98 2,200
2,200 5.792%, 10/23/98 2,199
2,200 5.775%, 10/30/98 2,200
----------
277,942
----------
SLM HOLDING CORP. - 7.9%
SLMA MTN
3,000 5.86%, 6/10/98 2,999
3,000 5.60%, 8/11/98 2,997
6,000 5.79%, 9/16/98 5,999
See Notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
SLM HOLDING CORP. - 7.9% (CONT'D.)
SLMA MTN (cont'd.)
$6,000 5.82%, 9/16/98 $ 6,002
2,500 5.72%, 11/20/98 2,499
3,500 5.74%, 12/17/98 3,498
----------
23,994
----------
Total U.S. Government Agencies
(cost $309,663) 309,663
----------
NUMBER
OF SHARES
(000S)
- ----------
OTHER - 0.0%
1 Dreyfus Prime Money Market Fund
(cost $1) 1
----------
Total Investments - 101.1%
(cost $309,664) 309,664
Liabilities less Other Assets - (1.1)% (3,239)
----------
NET ASSETS - 100.0% $306,425
==========
See notes to the Financial Statements.
SCHEDULES OF INVESTMENTS MARCH 31, 1998
MUNICIPAL MONEY MARKET FUND
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
MUNICIPAL INVESTMENTS - 99.3%
ALABAMA - 1.0%
$ 1,800 Ashland City Industrial Development
Board IDR (AMT), Russell Corp. Project
(SunTrust Banks, Inc. LOC),
3.80%, 4/7/98 $ 1,800
3,700 Board of Trustees of University of Alabama
Revenue Bond, Series 1997, University
of Alabama at Birmingham Hospital,
3.70%, 4/7/98 3,700
2,575 Columbia City Industrial Development
Board IDR (AMT), Russell Corp. Project
(SunTrust Banks, Inc. LOC), 3.80%, 4/7/98 2,575
2,575 Geneva County Industrial Development
Board IDR (AMT), Russell Corp. Project
(SunTrust Banks, Inc. LOC), 3.80%, 4/1/98 2,575
700 Greenville City IDR VRDN,
Series 1992, Allied-Signal Project
(FMC Corp. Gtd.), 3.85%, 4/7/98 700
2,600 Selma City IDR VRDN,
Series 1996 A, Meadowcraft, Inc. Project
(NationsBank LOC), 3.85%, 4/7/98 2,600
4,300 Stevenson City Environment
Improvement IDR VRDN, Series 1996
(AMT), Mead Corp. Project (Soc Gen LOC),
3.85%, 4/1/98 4,300
----------
18,250
----------
ALASKA - 1.2%
8,025 Alaska Housing Finance Corp.,
Series PT-37, Merrill P-Floats
(Banque Nationale de Paris LOC),
3.67%, 4/1/98 8,025
14,500 Alaska Industrial Development and
Export Authority VRDN, Series 1996 B
(AMT) (Seafirst Bank LOC),
3.75%, 4/7/98 14,500
----------
22,525
----------
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
ARIZONA - 0.8%
1,325 Apache County IDR VRDN
(AMT), Imperial Components, Inc.
Project (Harris Trust & Savings Bank LOC),
3.85%, 4/7/98 1,325
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
Arizona - 0.8% (cont'd.)
$12,835 Maricopa County PCR VRDN, Series A,
El Paso Electric Project (Westpac Banking
Corp. LOC), 3.70%, 4/7/98 $12,835
----------
14,160
----------
ARKANSAS - 0.3%
3,250 Lowell City IDR VRDN, Series 1996
(AMT), Little Rock Newspapers, Inc.
Project (Bank of New York LOC),
3.80%, 4/7/98 3,250
2,200 West Memphis City IDR VRDN (AMT),
Proform Co. LLC Project
(First Bank LOC), 3.90%, 4/7/98 2,200
----------
5,450
----------
CALIFORNIA - 2.4%
California State G.O. Bond
(FGIC Insured)
200 Series CR-152, 3.62%, 4/7/98 200
800 Series 5027C, 3.62%, 4/7/98 800
3,000 California State G.O. Bond,
Series SG-91, Merrill Floating Rate Receipts,
3.70%, 4/7/98 3,000
9,000 California State HFA Home Mortgage
Revenue FRN, Series E (AMT),
3.55%, 7/1/98 9,000
4,600 California State RAN, Series 1997,
4.00%, 4/1/98 4,600
8,500 Irvine Ranch County Consolidated
Water Districts 2, 102, 103-3, 203 & 206
VRDN, Series 1993 B (Morgan Guaranty
Trust Co. LOC), 3.70%, 4/1/98 8,500
2,746 Los Angeles City IDR VRDN,
Series BTP-129 (Colld. by U.S. Government
Securities), 3.90%, 10/8/98 2,746
5,000 Los Angeles County TRAN, Series A,
4.50%, 6/30/98 5,008
9,420 Riverside County TRAN, Series A,
4.50%, 6/30/98 9,432
----------
43,286
----------
COLORADO - 1.5%
15,038 Arapahoe County Capital Improvements TOB,
Series E BTP-255, Project E-470,
3.80%, 4/7/98 15,038
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
COLORADO - 1.5% (CONT'D.)
$ 4,500 Colorado HFA VRDN (AMT), Metal Sales
Manufacturing Corp. Project (Star Bank
LOC), 3.90%, 4/1/98 $ 4,500
4,800 Denver City and County, Series 1997A
(AMT), Airport Systems Sub Revenue Bonds,
3.60%, 5/15/98 4,800
2,000 Pitkin County IDR, Series 1994 B (AMT),
Aspen Skiing Project (First National Bank
of Chicago LOC), 3.90%, 4/1/98 2,000
----------
26,338
----------
DELAWARE - 0.2%
1,325 Delaware State Economic Development
Authority PCR VRDN, Allied-Signal Corp.
Project (FMC Corp. Gtd.), 3.85%, 4/7/98 1,325
2,200 Delaware State Economic Development
Authority, Series 1996 A (AMT), Ciba-Geigy
Project (Union Bank of Switzerland LOC),
3.90%, 4/1/98 2,200
----------
3,525
----------
DISTRICT OF COLUMBIA - 2.9%
23,300 District of Columbia Metro Airport
Authority, Series 1997 C (AMT), Airport
Systems Revenue Bond, 3.70%, 4/7/98 23,300
District of Columbia Metro Airport
Authority Passenger Facility
4,500 3.90%, 4/16/98 4,500
5,000 3.90%, 4/16/98 5,000
20,000 3.60%, 5/22/98 20,000
----------
52,800
----------
FLORIDA - 2.5%
5,500 Broward County HFA Revenue VRDN,
Sanctuary Park Apts. Multifamily Project
(PNC Bank LOC), 3.80%, 4/1/98 5,500
5,000 Dade County Solid Waste Systems Revenue
Bond BAN, 4.75%, 9/1/98 5,011
4,545 Duval County HFA Mortgage Revenue
VRDN, Series 1996-3A (AMT), Clipper
Trust Certificate, 3.87%, 4/7/98 4,545
1,500 Escambia County PCR, Series 1997 A Gulf
Power Co. Project, 3.90%, 4/1/98 1,500
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
FLORIDA - 2.5% (CONT'D.)
Florida State Board of Education Capital
Outlay VRDN
$3,660 Series BTP-52 ADP Class B,
3.85%, 4/7/98 $ 3,660
6,594 Series BTP-233, 3.90%, 10/8/98 6,594
3,900 Florida State Board of Education VRDN,
Series 1994 E, Eagle Trust, 3.82%, 4/7/98 3,900
7,585 Florida State Department of
Environmental Protection VRDN,
Series 1994 A BTP-64 (MBIA Insured),
3.85%, 4/7/98 7,585
4,400 Florida State Housing Finance Agency,
Series 2 (AMT), 3.90%, 4/7/98 4,400
1,300 Highlands County Health Facilities
VRDN, Series 1996 A, Adventist Health
System (CAPMAC Insured),
3.85%, 4/7/98 1,300
400 Jacksonville City Capital Project, Series 1
(AMBAC Insured), 3.70%, 4/7/98 400
900 Jacksonville City PCR, Series 1997 NN,
Florida Power and Lighting Co. Project,
3.80%, 4/1/98 900
----------
45,295
----------
GEORGIA - 3.6%
6,600 Burke County Development Authority
PCR, Series 1997 (AMT), Georgia Power
Co. Plant Vogtle Project, 3.85%, 4/1/98 6,600
5,300 Clayton County IDA IDR VRDN (AMT),
Blue Circle Aggregates, Inc. Project
(Denmark Danske Bank LOC),
3.80%, 4/7/98 5,300
3,000 Clayton County Housing Authority
Revenue VRDN (AMT), Williamsburg South
Apartments Project (PNC Bank LOC),
3.90%, 4/7/98 3,000
5,200 DeKalb County Housing Authority
Revenue VRDN, Series 1995 (AMT), Cedar
Creek Apartment Project (General Electric
Capital Corp. LOC), 3.90%, 4/7/98 5,200
2,500 Floyd County IDA (AMT), Marglens
Industries, Inc. Project (SunTrust Banks,
Inc. LOC), 3.80%, 4/7/98 2,500
4,000 Fulton County Development Authority,
Series 1997, Woodward Academy, Inc.
Project (SunTrust Banks, Inc. LOC),
3.70%, 4/7/98 4,000
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
GEORGIA - 3.6% (CONT'D.)
Georgia HFA Conventional Mortgage TOB
(AMT), Various Programs
$ 9,180 Series 1990 C, 3.85%, 6/1/98 $ 9,180
1,480 Series 1990 D, 3.85%, 6/1/98 1,480
15,655 Georgia Municipal Electric Authority VRDN,
Subordinated Series 1985 B (G.O. of
Participants Insured) (Credit Suisse/First
Boston LOC), 3.65%, 4/7/98 15,655
2,000 Gwinett County IDR, Series 1998 (AMT),
Network Publications, Inc. (NationsBank
LOC), 3.80%, 4/7/98 2,000
4,150 Henry County Development Authority,
Series 1997 (AMT), Atlas Roofing Corp.
Project (SunTrust Banks, Inc. LOC),
3.80%, 4/7/98 4,150
5,000 Savannah City Economic Development
Authority, Series 1997 (AMT), Kaolin
Terminals Project (NationsBank LOC),
3.80%, 4/7/98 5,000
2,000 Whitfield County IDA, Series 1998 (AMT),
H&S Whitting, Inc. Project (NationsBank
LOC), 3.80%, 4/7/98 2,000
----------
66,065
----------
HAWAII - 0.8%
5,000 Hawaii State Department of Budget and
Finance, Series A (AMT), Hawaiian Electric
Co. Project (MBIA Insured),
3.85%, 4/7/98 5,000
10,000 Honolulu City and County G.O. Bonds,
Series 1997 C (Citibank Trust LOC),
3.92%, 4/7/98 10,000
----------
15,000
----------
ILLINOIS - 11.0%
3,500 Arlington Heights IDR VRDN, Series 1997
(AMT), 3E Graphics and Printing Project
(Harris Trust & Savings Bank LOC),
3.80%, 4/7/98 3,500
9,580 Aurora City Rental Housing Revenue Bonds,
Series PA-328, Fox Valley Project (Merrill
Lynch Gtd.), 3.87%, 4/7/98 9,580
2,215 Bedford Park City IDR VRDN, Series 1997,
Cintas Sales Corp. Project (PNC Bank
LOC), 3.90%, 4/7/98 2,215
See Notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
ILLINOIS - 11.0% (CONT'D.)
$ 7,000 Bolingbrook City Multifamily Housing
VRDN, Series 1997 A (AMT), Amberton
Apartments Project (LaSalle National
Bank LOC), 3.75%, 4/7/98 $ 7,000
11,320 Chicago City Building Acquisition
Certificates, Series 1997 SSP-7
(FSA Insured), 3.825%, 4/7/98 11,320
2,655 Chicago City IDR, Series B (AMT),
Guernsey Bel, Inc. Project (Harris Trust
& Savings Bank LOC), 3.85%, 4/7/98 2,655
4,500 Chicago City Midway Airport Revenue
VRDN, Series 1995 (AMT), American
Trans Air, Inc. Project (National
Bank of Detroit LOC), 3.85%, 4/7/98 4,500
2,400 Chicago City O'Hare International
Airport Revenue VRDN, Series 1988 A
(AMT) (Bayerische Landesbank LOC),
3.75%, 4/7/98 2,400
9,495 Chicago City Public Building Commission,
Series A PA-155, Merrill P-Floats (MBIA
Insured), 3.75%, 4/7/98 9,495
1,855 Des Plaines City IDR VRDN,
Series 1996 (AMT), Finzer Roller, Inc.
Project (Harris Trust & Savings Bank LOC),
3.85%, 4/7/98 1,855
3,750 Frankfort City IDR, Series 1996 (AMT),
Bimba Manufacturing Co. Project
(Harris Trust & Savings Bank LOC),
3.85%, 4/7/98 3,750
5,000 Fulton County IDR VRDN, Series 1998,
(AMT), Drives, Inc. Project (Harris Trust &
Savings Bank LOC), 3.80%, 4/7/98 5,000
1,755 Illinois Development Finance Authority
IDR VRDN (AMT), Bimba Manufacturing
Co. Project (Harris Trust & Savings Bank
LOC), 3.85%, 4/7/98 1,755
5,950 Illinois Development Finance Authority
IDR VRDN, Enterprise Office Campus
(FNMA LOC), 3.75%, 6/1/98 5,950
4,100 Illinois Development Finance Authority
VRDN (AMT), Series 1997,
Ciccone Food Products Project
(Harris Trust & Savings Bank LOC),
3.80%, 4/7/98 4,100
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
ILLINOIS - 11.0% (CONT'D.)
$ 2,400 Illinois Development Finance Authority
IDR VRDN, Series 1997 A (AMT), Randall
Metals Corp. Project (LaSalle National
Bank LOC), 3.95%, 4/7/98 $ 2,400
1,400 Illinois Development Finance Authority
VRDN, Series 1990 (AMT), Solar Press, Inc.
Project (First National Bank of Chicago
LOC), 3.80%, 4/7/98 1,400
1,700 Illinois Development Finance Authority
VRDN, WBEZ Alliance, Inc. Project
(LaSalle National Bank LOC),
3.70%, 4/7/98 1,700
4,000 Illinois Educational Facilities Authority
VRDN, Series 1996, The Art Institute of
Chicago Project, 3.75%, 4/7/98 4,000
3,300 Illinois Educational Facilities Authority,
Cultural Pooled Financing Project
(American National Bank LOC),
3.75%, 4/7/98 3,300
7,600 Illinois Educational Facilities Authority
VRDN, National College of Education
Project (Harris Trust & Savings Bank LOC),
3.75%, 4/7/98 7,600
7,000 Illinois Health Facility Authority, Series
1985B, Evanston Hospital Corp.,
3.60%, 8/31/98 7,000
2,300 Illinois Health Facility Authority, Series
1996, Proctor Hospital Corp. (Bank One
LOC), 3.70%, 4/7/98 2,300
4,700 Illinois Health Facility Authority, Series E,
Franciscan Eldercare (LaSalle National Bank
LOC), 3.75%, 4/7/98 4,700
9,585 Illinois Health Facility Authority, Series A,
Loyola University Health (MBIA Insured),
3.50%, 4/7/98 9,585
2,000 Illinois Health Facility Authority VRDN,
Revolving Pooled Loan Facility (First
National Bank of Chicago LOC),
3.70%, 4/7/98 2,000
15,000 Illinois Housing Development Authority
Homeowner Mortgage (AMT),
Series 1997 B-2, 4.15%, 7/7/98 15,000
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
ILLINOIS - 11.0% (CONT'D.)
$15,806 Illinois Metropolitan Pier and Exposition
Authority Dedicated Sales TRB,
Series BTP-230-A, Inc. Project
(Harris Trust & Savings Bank LOC),
3.70%, 9/22/98 $ 15,806
7,500 Ladd Village IDR VRDN, Series 1996
(AMT), O'Neal Metals (NationsBank
LOC), 3.85%, 4/7/98 7,500
2,000 Lisle Village Multifamily Housing VRDN,
Series 1996, Four Lakes Phase V Project
(FNMA Insured), 3.70%, 4/7/98 2,000
3,560 Metropolitan Pier and Exposition Authority,
Series 1996 A, McCormick Place Project
(AMBAC Insured), 3.80%, 4/7/98 3,560
3,150 Niles Village IDR VRDN, Series 1996
(AMT), Lewis Spring and Manufacturing
Co. Project (Harris Trust & Savings Bank
LOC), 3.85%, 4/7/98 3,150
5,000 Palos Hill County Multifamily Housing,
Series 1998 (AMT), Green Oaks Project,
(LaSalle National Bank LOC),
3.85%, 4/7/98 5,000
9,400 Pooled Puttable Float Option (AMT),
Series PT6, Various State and Housing
Agencies, 4.075%, 8/6/98 9,401
3,000 Rockford City IDR, Series 1998 (AMT),
Ring Can Corp. Project (SunTrust Banks,
Inc. LOC), 3.80%, 4/7/98 3,000
2,375 Romeoville City IDR, Series 1997 (AMT),
Metropolitan Industries, Inc. Project
(Harris Trust & Savings Bank LOC),
3.85%, 4/7/98 2,375
6,000 Savanna City IDR VRDN, Series 1994
(AMT), Metform Corp. Project (First
National Bank of Chicago LOC),
3.80%, 4/7/98 6,000
6,200 Schaumburg City Multifamily Housing,
Series 1989 Treehouse II Apartments Project
(Barclays Bank LOC), 3.75%, 4/7/98 6,200
----------
200,052
----------
INDIANA - 1.5%
2,790 Anderson City Economic Development
VRDN, Series 1996 (AMT), Gateway
Village Project (FHLB LOC),
3.80%, 4/1/98 2,790
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
INDIANA - 1.5% (CONT'D.)
$1,500 Greencastle City IDR VRDN, Series 1996
(AMT), Crown Equipment Corp. Project
(Mellon Bank LOC), 3.95%, 4/7/98 $ 1,500
2,840 Hammond City Economic Development
VRDN, Series 1996 A (AMT), Annex at
Douglas Point Project (FHLB LOC),
3.80%, 4/7/98 2,840
8,000 Indiana Bond Bank, Advanced Funding
Program, Series A-2, 4.00%, 1/20/99 8,024
Indiana Development Finance Authority
IDR VRDN (AMT), Red Gold, Inc. Project
(Harris Trust & Savings Bank LOC)
5,100 Series 1994 A, 3.85%, 4/7/98 5,100
3,200 Series 1994 B, 3.85%, 4/7/98 3,200
2,900 Indiana State Development Finance
Authority VRDN, Indiana Historical Society,
Inc. Project (NBD Bank LOC),
3.70%, 4/7/98 2,900
----------
26,354
----------
IOWA - 1.5%
6,085 Iowa Finance Authority SFM,
Series 1997 A, 3.67%, 4/1/98 6,085
2,240 Iowa Finance Authority SFM, Series A
(GNMA/FNMA Insured),
3.65%, 2/24/99 2,240
3,475 Iowa Finance Authority, Series B (AMT),
SFM Backed Program
(GNMA/FNMA Insured), 3.70%, 2/24/99 3,475
Iowa Finance Authority Waste Disposal
Revenue VRDN (AMT), Cedar River Paper
Co. Project (Swiss Bank Corp. LOC)
1,100 Series 1993 A, 3.95%, 4/1/98 1,100
3,600 Series 1995 A, 3.95%, 4/1/98 3,600
5,000 Series 1996 A, 3.95%, 4/1/98 5,000
6,000 Series 1997 A, 3.95%, 4/1/98 6,000
----------
27,500
----------
KANSAS - 0.8%
7,000 Topeka City Temporary Notes,
Series A, 4.00%, 7/15/98 7,002
8,000 Wichita City G.O. Temporary Notes,
Series 194, 4.25%, 8/27/98 8,018
----------
15,020
----------
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
KENTUCKY - 5.6%
$ 3,951 Carroll County Solid Waste Disposal
Revenue VRDN (AMT), North American
Stainless Project (Banco Bilbao Vizcaya
LOC), 3.95%, 4/7/98 $ 3,951
3,265 Clark County Industrial Building IDR
VRDN, Series 1996 (AMT), Bluegrass Art
Cast Project (Bank One LOC),
3.85%, 4/7/98 3,265
Daviess County Waste Disposal Facility
IDR VRDN (AMT), Scott Paper Co. Project
(Kimberly-Clark Corp. Gtd.)
21,800 Series 1993 A, 3.85%, 4/1/98 21,800
15,300 Series 1993 B, 3.85%, 4/1/98 15,300
11,900 Series 1994 A, 3.85%, 4/1/98 11,900
2,500 Greenville City IDR VRDN,
Wetterau, Inc. Project (PNC Bank LOC),
3.80%, 4/7/98 2,500
10,000 Kentucky Interlocal School Transportation
Association TRAN, 4.09%, 6/30/98 10,001
9,500 Kentucky Rural Water Finance Corp.
Notes, Series 1996, Public Construction
Project, 4.375%, 4/1/98 9,500
12,000 Louisville and Jefferson Counties VRDN
(AMT), Regional Airport Authority System,
Series 1997 A-1 (National City Bank of
Louisville LOC), 3.90%, 4/7/98 12,000
12,000 Mayfield City Lease Revenue VRDN,
Series 1996, Kentucky League of Cities
Pooled Project (PNC Bank LOC),
3.80%, 4/7/98 12,000
----------
102,217
----------
LOUISIANA - 0.5%
2,100 Ascension Parish VRDN, Series 1995
(AMT), BASF Corp. Project, 3.95%, 4/1/98 2,100
2,900 Louisiana Public Facility Authority
Hospital, Series 1997, Willis-Knighton
Medical Center (AMBAC Insured),
3.70%, 4/7/98 2,900
4,000 South Louisiana Port Commission, Series
1997 (AMT), Holnam, Inc. Project
(ABN Amro Holding LOC),
3.75%, 4/7/98 4,000
----------
9,000
----------
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
MAINE - 1.0%
$ 2,000 Fort Fairfield County Revenue Bond (AMT),
Atlantic Custom Processors (PNC Bank
LOC), 3.95%, 4/7/98 $ 2,000
5,000 Maine Public Utility Finance Bank
Revenue VRDN, Series 1996 (AMT), Maine
Public Service Co. Project (Bank of New
York LOC), 3.80%, 4/7/98 5,000
10,400 Maine State Housing Authority (AMT),
Multifamily Development, Park Village
Apartment Project (GE Capital Corp. LOC),
3.85%, 4/7/98 10,400
----------
17,400
----------
MARYLAND - 2.0%
2,200 Baltimore City Economic Development
VRDN, Series 1985, Mt. Washington
Pediatric Hospital, Inc. (Mellon Bank LOC),
3.85%, 4/7/98 2,200
2,000 Cecil County Economic Development
VRDN (AMT), Steel Techs, Inc. Facility
(PNC Bank LOC),
3.95%, 4/7/98 2,000
10 Maryland State Community
Development Administration, Series
PT-12, Merrill P-Floats (Commerzbank A.G.
LOC), 3.67%, 4/1/98 10
2,975 Maryland State Economic Development
Corp. VRDN (AMT), Unsite Design, Inc.
(Mellon Bank N.A. LOC), 3.95%, 4/7/98 2,975
2,375 Maryland State Health and Higher
Educational Facilities Authority Revenue
VRDN, Series A (NationsBank LOC),
3.65%, 4/1/98 2,375
3,000 Maryland State IDA, Townsend Culinary,
Inc. Project (SunTrust Banks, Inc. LOC),
3.90%, 4/7/98 3,000
24,000 Montgomery County CP BAN, Series 1995,
3.60%, 4/9/98 24,000
----------
36,560
----------
MASSACHUSETTS - 0.3%
3,095 Massachusetts State HFA VRDN, Series
1996-5A (AMT), Clipper Trust Certificate
(AMBAC Insured), 3.77%, 6/1/98 3,095
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
MASSACHUSETTS - 0.3% (CONT'D.)
$ 2,200 Massachusetts State HFA VRDN, Series
PA-132 (AMT), Harbor Point Project
(AMBAC Insured), 3.85%, 4/7/98 $ 2,200
----------
5,295
----------
MICHIGAN - 1.3%
6,000 Detroit City School District State School
Aid Notes, Series 1997, 4.50%, 5/1/98 6,003
1,100 Michigan Strategic Fund PCR, Series
1995 CC, Detroit Edison Project (Barclays
Bank PLC LOC), 3.80%, 4/1/98 1,100
6,900 Michigan Strategic Fund Ltd. VRDN, Series
1992 (AMT), Dow Chemical Co. Project
(Dow Chemical Gtd.), 3.90%, 4/1/98 6,900
2,330 Michigan Strategic Fund Ltd. VRDN (AMT),
Kruger Commodities, Inc. Project (Harris
Trust & Savings Bank LOC), 3.85%, 4/7/98 2,330
4,000 Michigan State TRAN, Series 1997 B,
4.50%, 7/2/98 4,006
3,300 Midland County Economic Development
Corp., Series 1993 A (AMT), Dow Chemical
Corp. Project, 3.95%, 4/1/98 3,300
----------
23,639
----------
MINNESOTA - 0.2%
3,060 Stearns County Housing and
Redevelopment Authority VRDN
(AMT), Cold Spring Granite Co. Project
(First Bank LOC), 3.90%, 4/7/98 3,060
MISSISSIPPI - 0.7%
9,325 Mississippi State G.O. Refunding
Bonds, Series BTP-207, 3.80%, 4/7/98 9,325
3,310 Mississippi State Home Single Family
Revenue Bonds, Series G-CL5 (AMT),
PT-146, P-Floats, 3.85%, 4/7/98 3,310
----------
12,635
----------
MISSOURI - 2.2%
7,500 Missouri Higher Education Loan Authority,
Series 1990 B (National Westminster LOC),
3.80%, 4/7/98 7,500
17,200 Missouri Higher Education Loan Authority
VRDN, Series 1990 A (AMT) (National
Westminster LOC), 3.80%, 4/7/98 17,200
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
MISSOURI - 2.2% (CONT'D.)
$ 1,000 Missouri Higher Education Loan Authority
VRDN, Series 1991 B (AMT)
(MBIA Insured), 3.85%, 4/7/98 $ 1,000
6,140 Missouri Housing Development VRDN,
Series 1994 A (AMT), Merrill P-Floats
PA-116 (Colld. by U.S. Government
Securities), 3.85%, 4/7/98 6,140
8,000 St. Louis City TRAN, Series 1997,
4.50%, 6/30/98 8,012
----------
39,852
----------
MONTANA - 2.6%
Montana Board of Housing SFM VRDN,
Merrill P-Floats
3,920 Series 1996-A-2, PT-87, 3.85%, 4/7/98 3,920
4,000 Series 1997, PA-158, 3.85%, 4/7/98 4,000
39,200 Montana Board of Investment Resources
Recovery Revenue VRDN (AMT), Colstrip
Energy L.P. Project (Credit Locale de
France LOC), 3.80%, 4/7/98 39,200
----------
47,120
----------
NEBRASKA - 0.4%
2,000 Nebraska Investment Finance Authority
SFM TOB, Series B (FGIC Insured),
3.70%, 7/15/98 2,000
5,700 Omaha Public Power District
Electric Revenue Bond, Series A,
4.05%, 2/1/99 5,722
----------
7,722
----------
NEVADA - 2.1%
20,100 Clark County Nevada Airport Improvement
Refunding Revenue Bond, Series 1993 A
(MBIA Insured), 3.65%, 4/7/98 20,100
18,065 Nevada State G.O. VRDN, Series 1997
SGB31 (FGIC Insured), 3.80%, 4/7/98 18,065
----------
38,165
----------
NEW HAMPSHIRE - 1.0%
18,000 New Hampshire State Business Finance
Authority, Series A (AMT), United
Illuminating Co. (Barclays Bank of New
York LOC), 3.80%, 4/7/98 18,000
----------
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
NEW JERSEY - 0.7%
$13,515 New Jersey Transportation Trust Fund
Authority, Series 1996 B PT-161, P-Floats,
3.70%, 2/26/99 $13,515
----------
NEW YORK - 1.0%
589 Marine Midland Premium Loan Trust
Variable Rate COP, Series 1991 A (Hong
Kong and Shanghai Banking Corp. LOC),
3.65%, 4/7/98 589
3,200 New York City Municipal Water Finance
Authority, Water and Sewer System
Revenue Bonds, Series 1994 E
(MBIA Insured), 3.72%, 4/7/98 3,200
4,800 New York City G.O. VRDN, Series 1993 B
(FGIC Insured), 3.80%, 4/1/98 4,800
1,400 New York City G.O., Sub-Series A-7
(Morgan Guaranty Trust LOC),
3.85%, 4/1/98 1,400
1,100 New York City RAN, Series 26 LB Trust
Receipts (Soc Gen LOC),
4.00%, 4/1/98 1,100
4,600 New York State Environmental Facilities
Corp. PCR VRDN, Weekly Optional Put,
Eagle Trust No. 94302 (FSA Insured),
3.70%, 4/7/98 4,600
2,420 Pooled VRDN, P-Floats, Series PPT2
(Backed by Alaska HFC & South Dakota
HFA), 3.58%, 4/11/98 2,420
----------
18,109
----------
NORTH CAROLINA - 1.8%
2,500 Brunswick County PCR IDR VRDN,
Series 1996 (AMT), Armada Project
(NationsBank LOC), 3.80%, 4/7/98 2,500
5,900 Capital Regional Airport Commission
Passenger Facility Charge Revenue VRDN
(AMT) (First Union National Bank of
Charlotte LOC), 3.80%, 4/7/98 5,900
8,100 Catawba County PCR IDR, Series 1996
(AMT), Hooker Furniture Corp. Project
(NationsBank LOC), 3.80%, 4/7/98 8,100
2,500 Mecklenburg County PCR IDR VRDN,
Series 1996 (AMT), SteriGenics
International Project (Comerica Bank
LOC), 3.90%, 4/7/98 2,500
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
NORTH CAROLINA - 1.8% (CONT'D.)
$ 8,135 Mecklenburg County Variable Lease,
Series 1996, YMCA of Charlotte Project
(Wachovia Bank LOC), 3.65%, 4/7/98 $ 8,135
2,500 North Carolina Medical Care Commission,
Series A, Pooled Financing Project
(NationsBank LOC), 3.85%, 4/1/98 2,500
3,800 North Carolina State Ports Authority
VRDN, Series 1996 (AMT), Morehead
City Terminals, Inc. (NationsBank LOC),
3.80%, 4/7/98 3,800
----------
33,435
----------
OHIO - 3.3%
6,710 Dublin Inn Tax-Exempt Mortgage Bond
Trust, Series 1987, Six Month Demand
Adj. Rate Certificate (Huntington National
Bank LOC), 4.57%, 9/1/98 6,710
4,000 Ohio State Air Quality Development
Authority, Series A, Pollution Control-
Duquesne Light (Union Bank of
Switzerland LOC), 3.95%, 7/10/98 4,000
9,000 Ohio State Air Quality Development
Authority VRDN, Series A, Ohio Edison
Project (Toronto Dominion Bank LOC),
3.65%, 2/1/99 9,000
4,755 Ohio State HFA VRDN, Series 1989 A
(AMT), 3.80%, 4/7/98 4,755
1,940 Ohio State Higher Education Facility
Revenue TOB, Series BTP-29 ADP, Class B
(MBIA Insured), 3.85%, 4/7/98 1,940
5,875 Ohio State Infrastructure Improvement
VRDN, Series 1994, BTP-170,
3.75%, 10/22/98 5,875
8,910 Ohio State Public Facilities Commission,
Series 2A BTP-237, Higher Education
Facilities Project (AMBAC Insured),
4.15%, 4/8/98 8,910
2,900 Ohio State Water Development Authority
PCR VRDN, Philip Morris Cos. Project
(Philip Morris Cos., Inc. Gtd.),
4.00%, 4/7/98 2,900
13,000 Student Loan Funding Corp., Series 1983 A,
Ohio Student Loan (Bank of America
LOC), 3.70%, 4/7/98 13,000
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
OHIO - 3.3% (CONT'D.)
$ 2,500 Union County IDR VRDN (AMT),
Union Aggregates Co. Project
(PNC Bank LOC), 3.95%, 4/7/98 $ 2,500
----------
59,590
----------
OKLAHOMA - 1.0%
11,195 Oklahoma Water Resources Board,
Series 1994 A, State Loan Program
(Swiss Bank Corp. LOC), 3.55%, 9/1/98 11,195
7,245 Tulsa City Airport Improvement
VRDN, Series B-1 (AMT) (MBIA Insured),
3.82%, 4/7/98 7,245
----------
18,440
----------
OREGON - 1.3%
1,100 Metropolitan Service District Riedel
Oregon Compost Waste Disposal VRDN
(AMT) (US National Bank LOC),
4.00%, 4/7/98 1,100
4,820 Multnomah County School District
G.O. Bond, Series 1996 BTP-208,
3.90%, 6/1/98 4,820
3,900 Oregon State Economic Development
Revenue, Series 176 (AMT), Cascade Steel
Rolling Mills Project (Commerzbank A.G.
LOC), 3.80%, 4/7/98 3,900
6,600 Oregon State Economic Development
Revenue, Series 181 (AMT), Oregon Metal
Slitters, Inc. (Key Bank N.A. LOC),
3.80%, 4/7/98 6,600
5,000 Portland City Multifamily Revenue
VRDN, Series 1996 (AMT), Union Station
Project - Phase B (US National Bank LOC),
3.90%, 4/7/98 5,000
1,590 Portland City Sewer System Revenue,
Series PA-169, Merrill P-Floats (FGIC
Insured), 3.80%, 4/7/98 1,590
----------
23,010
----------
PENNSYLVANIA - 11.0%
4,000 Allegheny County Environment
Improvement IDA, Series 1987, USX Corp.
Project (Commerzbank LOC),
3.60%, 6/4/98 4,000
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
PENNSYLVANIA - 11.0% (CONT'D.)
$ 3,930 Allegheny County Hospital Development
Authority, Series B-1, Presbyterian
University Hospital (PNC Bank LOC),
3.70%, 4/1/98 $ 3,930
4,925 Allegheny County IDA VRDN, Series
1991, Eye and Ear Properties Corp.
(Pittsburgh National Bank LOC),
3.70%, 4/1/98 4,925
3,000 Allegheny County IDA VRDN, Series A,
Sewickley Academy Project (PNC Bank
LOC), 3.80%, 4/7/98 3,000
3,700 Chester County IDA, Series 1997 A (AMT),
KAC III Realty Corp. Project (PNC Bank
LOC), 3.95%, 4/7/98 3,700
22,500 Delaware Valley Regional Finance
Authority VRDN, Series 1997 A, Merril
Lynch P-Floats (Midland Bank PLC LOC),
3.80%, 5/21/98 22,500
36,900 Emmaus County General Authority
Bond, Series 1996, Variable Rate Loan
Program (FSA Insured), 3.75%, 4/7/98 36,900
3,600 Pennsylvania Economic Development
Finance Authority IDR VRDN, Series
1996 A1-8 (AMT) (PNC Bank LOC),
3.95%, 4/7/98 3,600
Pennsylvania Higher Education
Assistance Agency VRDN (AMT),
Student Loan Program (SLMA LOC)
22,900 Series 1994 A, 3.80%, 4/7/98 22,900
20,500 Series 1995 A, 3.80%, 4/7/98 20,500
8,500 Series 1997 A, 3.80%, 4/7/98 8,500
6,700 Pennsylvania Higher Education Facilities
Authority Revenue Bond VRDN, Series I
(Allied Irish Bank PLC LOC),
4.50%, 11/1/98 6,724
9,900 Pennsylvania Intergovernmental Coop
Authority, BTP-288, Philadelphia City
Funding Program (FGIC Insured),
3.80%, 4/7/98 9,900
20,000 Philadelphia City School District TRAN,
Series 1997 (Commerzbank LOC),
4.50%, 6/30/98 20,026
5,000 Philadelphia City TRAN, Series 1997 A,
4.50%, 6/30/98 5,006
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
PENNSYLVANIA - 11.0% (CONT'D.)
$ 2,600 Quakertown Hospital Authority VRDN,
Hospital Group Pooled Financing (PNC
Bank LOC), 3.75%, 4/7/98 $ 2,600
6,900 Schuylkill County IDA VRDN, Gilberton
Power Project (Mellon Bank LOC),
3.70%, 4/7/98 6,900
10,000 York City General Authority Pooled
Financing, Series 1996 (First Union
National Bank LOC), 3.80%, 4/1/98 10,000
1,410 Washington County Hospital Authority
VRDN, Series B1-E, Eye & Ear Hospital
(PNC Bank LOC), 3.70%, 4/1/98 1,410
2,125 Washington County IDA VRDN (AMT),
Accutrex Products, Inc. (Mellon Bank
LOC), 3.95%, 4/7/98 2,125
----------
199,146
----------
SOUTH CAROLINA - 0.7%
5,400 Cherokee County IDR VRDN, Series 1989
(AMT), Oshkosh Truck Corp. Project
(NationsBank LOC), 3.80%, 4/7/98 5,400
Lexington County IDR VRDN,
Allied-Signal Project (FMC Corp. Gtd.)
200 Series 1992, 3.85%, 4/7/98 200
900 Series 1992 A, 3.85%, 4/7/98 900
5,800 South Carolina Jobs Economic Development
Authority (AMT), Greenville YMCA Project
(NationsBank LOC), 3.75%, 4/7/98 5,800
----------
12,300
----------
SOUTH DAKOTA - 0.8%
8,410 South Dakota Economic Development
Finance Authority VRDN, Series 1996
(AMT), Hastings Filters, Inc. Project
(Harris Trust & Savings Bank LOC),
3.85%, 4/7/98 8,410
South Dakota Housing Development
Authority Homeowner Mortgage VRDN
(AMT), Merrill P-Floats
2,320 Series PA-119, 3.85%, 4/7/98 2,320
4,300 Series PT-73-A, 3.80%, 4/7/98 4,300
----------
15,030
----------
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
TENNESSEE - 3.9%
Clarksville Tennessee Public Building
Authority, Tennessee Muni Bond Fund
(NationsBank LOC)
$4,200 Series 1995, 3.70%, 4/7/98 $ 4,200
5,500 Series 1997, 3.70%, 4/7/98 5,500
1,500 Dickson County IDR VRDN, Series
1996 (AMT), Tennessee Bun Co. LLC
Project (PNC Bank LOC), 3.95%, 4/7/98 1,500
1,200 Greeneville IDR VRDN, Series 1993, Pet,
Inc. Project (Credit Suisse LOC),
3.80%, 4/7/98 1,200
2,000 Hendersonville County IDR VRDN,
Multifamily Housing Windsor Park Project
(FNMA Insured), 3.70%, 4/7/98 2,000
6,000 Jackson City Waste Facility IDR VRDN,
Series 1995 (AMT), Florida Steel Corp.
Project (NationsBank LOC), 3.80%, 4/7/98 6,000
5,000 Memphis City G.O. VRDN, Series 1996,
Soc Gen Series SGB-23, 3.80%, 4/7/98 5,000
1,000 Morristown City IDR VRDN, Series 1997,
BOS Automotive Products, Inc. (Bayerische
Vereinsbank LOC), 3.80%, 4/7/98 1,000
4,000 Nashville and Davidson Counties Health
and Education Facilities Board VRDN,
Series 1996-A, Adventist Health Systems
Sunbelt (SunTrust Bank LOC),
3.75%, 4/7/98 4,000
5,000 Nashville and Davidson Counties
Housing VRDN (AMT), Old Hickory Towers
Project (FHLB LOC), 3.90%, 4/7/98 5,000
8,400 Shelby County G.O. Bond, Series 1996 B,
Soc Gen Trust SGB-21 (FSA Insured),
3.80%, 4/7/98 8,400
4,890 Shelby County G.O., Series B BTP-216,
3.75%, 10/22/98 4,890
5,000 Shelby County G.O., Unlimited Series B
BTP-263, 3.80%, 4/7/98 5,000
1,000 Shelby County Health and Education
Authority (AMT), Arbor Lake Project
(PNC Bank LOC), 3.95%, 4/7/98 1,000
8,550 Tennessee State G.O. TOB,
Series 1997 BTP-242, 3.80%, 4/7/98 8,550
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
TENNESSEE - 3.9% (CONT'D.)
$ 7,500 Tennessee State Housing Development
Agency, Series 1997-2 (AMT),
Homeownership Program, 4.00%, 6/4/98 $ 7,500
----------
70,740
----------
TEXAS - 12.5%
2,525 Austin City Independent School District
Building VRDN, Series 1996 SG-68 (PSF of
Texas Gtd.), 3.80%, 4/7/98 2,525
6,000 Austin City VRDN, Series A (AMT), Airport
Systems Notes (Morgan Guaranty Trust
LOC), 3.75%, 4/7/98 6,000
6,755 Brazos Higher Education Authority,
Series C-1 (AMT) (SLMA Gtd.),
4.95%, 6/1/98 6,769
2,700 Brazos River Authority, Series 1997 (AMT),
Houston Light and Power Co. Project
(AMBAC Insured), 3.90%, 4/1/98 2,700
1,500 Brazos River Harbor Navigation District,
Dow Chemical, 3.45%, 4/9/98 1,500
Brazos River Harbor Navigation District
VRDN (AMT), BASF Corp. Project
(BASF Corporation Gtd.)
5,300 Series 1996, 3.95%, 4/1/98 5,300
5,200 Series 1997, 3.95%, 4/1/98 5,200
5,000 Calhoun County Navigation IDR VRDN
(AMT), Formosa Plastics Corp. U.S.A.
(Bank of America LOC), 3.80%, 4/7/98 5,000
6,500 Denton County Independent School
District G.O., Series B (PSF of Texas Gtd.),
3.90%, 8/15/98 6,500
3,500 El Paso City Housing Finance Corp.
VRDN, Series 1993 (AMT), Viva Apartments
Project (General Electric Corp. LOC),
3.95%, 4/7/98 3,500
15,000 Greater East Texas Student Loan Corp.,
Series A (SLMA Gtd.), 3.60%, 3/1/99 15,000
Gulf Coast Waste Disposal Authority
VRDN (AMT), Amoco Oil Co. Project
(Amoco Oil Company Gtd.)
2,300 Series 1991, 3.80%, 4/1/98 2,300
1,800 Series 1994, 3.85%, 4/1/98 1,800
11,785 Harris County Health Facility, Series
1997 B, Sisters of Charity, Inc.,
3.85%, 4/7/98 11,785
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
TEXAS - 12.5% (CONT'D.)
$ 3,800 Harris County Toll Road Unlimited Tax
VRDN, Series 1994 A, Citicorp Eagle Trust
No. 954302, 3.82%, 4/7/98 $ 3,800
3,455 Houston City Water and Sewer System TOB,
Series 1992 C BTP-54 (MBIA Insured),
3.85%, 4/7/98 3,455
3,300 Hurst, Euless and Bedford Cities
Independent School Districts Floating Rate
Receipts, Series SG-98, 3.80%, 4/7/98 3,300
North Texas Higher Education Authority
VRDN (AMT), Student Loan Program
(SLMA LOC)
14,500 Series 1993 A, 3.80%, 4/7/98 14,500
5,000 Series 1996 A, 3.80%, 4/7/98 5,000
2,300 Panhandle-Plains Higher Education
Authority VRDN, Student Loan
Revenue, Series A (SLMA LOC),
3.75%, 4/7/98 2,300
7,245 Pearland City Independent School
District G.O., Series 1997 SG-106
(PSF Gtd.), 3.80%, 4/7/98 7,245
9,400 Port Development of Corpus Christi
Solid Waste Disposal (AMT), Koch Refining
Co. Project, 3.80%, 4/7/98 9,400
Port Development of Corpus Christi
Solid Waste Disposal (AMT),
Koch Refining Co. Project
9,750 Series 1996, 3.80%, 4/7/98 9,750
24,100 Series 1997, 3.80%, 4/7/98 24,100
14,450 Port of Corpus Christi, Series 1992,
Union Pacific Resources Project,
3.80%, 5/4/98 14,450
2,600 Port of Houston Authority (AMT),
Unlimited Tax G.O. (FGIC Insured),
5.50%, 10/1/98 2,620
15,000 Port of Port Arthur Navigation District,
Series 1998 (AMT), Star Enterprise Project
(Bank of Montreal LOC), 3.75%, 4/7/98 15,000
2,500 Sabine River Authority PCR VRDN,
Series 1995 C (AMT), Texas Utilities Electric
Co. Project (Union Bank of Switzerland
LOC), 4.05%, 4/1/98 2,500
1,200 Sabine River Authority PCR VRDN,
Series 1996 B (AMT), Texas Utilities Electric
Co. Project (AMBAC Insured),
3.90%, 4/1/98 1,200
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
TEXAS - 12.5% (CONT'D.)
$ 9,880 San Antonio City Electric and Gas
Revenue VRDN, Merrill Lynch Trust
Receipts, Series 1997 SG-107,
3.80%, 4/7/98 $ 9,880
1,600 Sherman Independent School District
G.O., Series 1985 A SG-80 (PSF Gtd.),
3.80%, 4/7/98 1,600
2,080 Tarrant County G.O. LTD, Certificates of
Obligation, 5.50%, 7/15/98 2,092
6,545 Texas Department of Housing and
Community Affairs SFM, Series PA-128
(AMT), 3.85%, 4/7/98 6,545
5,000 Texas State TRAN, Series 1997 A,
4.75%, 8/31/98 5,018
6,580 Texas Veterans Housing Program,
Series 1994 D PT-83 (AMT),
3.775%, 2/11/99 6,580
----------
226,214
----------
UTAH - 1.4%
8,300 Salt Lake City Subordinated Airport
Revenue Bonds, Series 1996 A (AMT)
(Union Bank of Switzerland LOC),
3.70%, 4/7/98 8,300
16,200 Utah State Board of Regents VRDN, Series
1996 Q (AMT), Student Loan Program
(AMBAC Insured), 3.80%, 4/7/98 16,200
----------
24,500
----------
VIRGINIA - 1.6%
4,200 Botetourt County IDR VRDN (AMT),
Valley Forge Company Project (Harris
Trust & Savings Bank LOC),
3.50%, 4/7/98 4,200
2,000 Charles County Solid Waste Disposal
Facility IDR (AMT), Chambers
Development, Inc. Project (Morgan
Guaranty LOC), 3.85%, 4/7/98 2,000
9,500 Grant County Disposal Revenue Bond,
Series 1996 (AMT), Virginia Electric
Power Co. Project, 3.55%, 6/11/98 9,500
4,200 Halifax County, IDA VRDN, Series 1998
(AMT), D-Scan, Inc. Project (NationsBank
LOC), 3.80%, 4/7/98 4,200
1,700 Louisa Town IDA, Virginia Electric
Power Co. Project, 3.70%, 6/17/98 1,700
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
VIRGINIA - 1.6% (CONT'D.)
$ 3,200 Norfolk City G.O. VRDN, Citicorp Eagle
Trust No. 944601, 3.82%, 4/7/98 $ 3,200
3,900 Virginia State G.O. VRDN, Series 1994,
Citicorp Eagle Trust No. 954601,
3.77%, 4/7/98 3,900
----------
28,700
----------
WASHINGTON - 2.7%
2,850 Algona Economic Development Corp.
(AMT), Peter Pan Seafoods Project (Seattle
First National Bank LOC), 3.75%, 4/7/98 2,850
5,700 Grandview City Public Corp. IDR, Series
1989 (AMT), Shonan USA Project (Bank
of America LOC), 3.80%, 4/7/98 5,700
1,800 Kent City Economic Development Corp.
IDR VRDN, Associated Grocers Project
(Seattle-First National Bank LOC),
4.02%, 4/7/98 1,800
5,340 Seattle City Municipal Light and Power
Revenue Bonds, Series A BTP-272,
3.70%, 10/23/98 5,340
Spokane County School District #081, G.O.
7,990 BTP-283, 3.65%, 3/18/99 7,990
4,455 BTP-286, 3.65%, 3/18/99 4,455
17,519 Washington Public Power Supply System
Revenue, Series 1990 B, Nuclear Project
No. 2, Prerefunded BTP-85 (Colld. in U.S.
Government Securities), 3.75%, 10/15/98 17,519
2,800 Washington State Housing Finance
Commission VRDN, Series 5A-S (AMT),
Single Family Program, 3.90%, 12/15/98 2,800
----------
48,454
----------
WEST VIRGINIA - 0.3%
1,300 Brooke County IDR, Series 1997 (AMT),
Star-Kist Foods, Inc. Project,
3.95%, 4/7/98 1,300
3,000 Marion County Waste Disposal IDR
VRDN, Series 1990 B (AMT), Granttown
Project (National Westminster Bank LOC),
3.80%, 4/7/98 3,000
2,000 Ritchie County IDR VRDN (AMT),
Simonton Building Products, Inc. Project
(PNC Bank LOC), 3.95%, 4/7/98 2,000
----------
6,300
----------
See notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
WISCONSIN - 3.2%
$ 1,625 Elkhorn City Area School District
BAN, 4.25%, 4/1/98 $ 1,625
8,000 Manitowoc City Public School District
BAN, 4.00%, 10/1/98 8,004
3,300 Milwaukee City Redevelopment VRDN,
Series 1996 (AMT), Starline
Manufacturing, Inc. (Harris Trust &
Savings Bank LOC), 3.85%, 4/7/98 3,300
4,290 Pewaukee City IDR VRDN, Series 1992
(AMT), HUSCO International, Inc. Project
(Bank One LOC), 3.80%, 4/7/98 4,290
1,900 Wisconsin Health and Education
Revenue Bond, Series 1994 A, Sinai
Samaritan Medical Center Project
(M&I Bank LOC), 3.75%, 4/7/98 1,900
5,345 Wisconsin Health and Education
Revenue Bond, Series 1997, Froedtert
Memorial Lutheran Hospital Trust
(M&I Bank LOC), 3.75%, 4/7/98 5,345
5,000 Wisconsin Housing and Economic
Development Authority Revenue
Floating Rate Trust Receipts, Series
1997 FR/RI-18 (AMT), 3.95%, 4/7/98 5,000
7,620 Wisconsin Housing and Economic
Development Authority Revenue, Series
B (AMT), Home Ownership Revenue
Program, 3.60%, 9/1/98 7,620
12,545 Wisconsin Housing and Economic
Development Authority Revenue
TOB, Home Ownership Revenue
Program, 3.65%, 4/7/98 12,545
8,210 Wisconsin State G.O. Bond, Series
1996 A BTP-209, 3.75%, 10/22/98 8,210
----------
57,839
----------
WYOMING - 0.2%
3,000 Gillette City PCR, Pacific Project,
3.70%, 4/3/98 3,000
----------
Total Municipal Investments
(cost $1,800,607) 1,800,607
----------
SCHEDULES OF INVESTMENTS March 31, 1998
MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
OTHER - 0.5%
396 AIM Tax-Free Money Market Fund $ 396
300 Dreyfus Tax Exempt Cash
Management Fund 300
419 Federated Tax Free Trust Money Market
Fund No. 15 419
500 Federated Tax Free Trust
Money Market Fund No. 73 500
7,616 Provident Municipal Cash Fund (AMT) 7,616
339 Provident Municipal Fund 339
----------
Total Other
(cost $9,570) 9,570
----------
Total Investments - 99.8%
(cost $1,810,177) 1,810,177
Other Assets less Liabilities - 0.2% 4,166
----------
NET ASSETS - 100.0% $1,814,343
==========
See Notes to the Financial Statements.
SCHEDULES OF INVESTMENTS March 31, 1998
CALIFORNIA MUNICIPAL MONEY MARKET FUND
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
MUNICIPAL INVESTMENTS - 99.8%
California - 98.9%
$5,000 California Community College Finance
Authority TRAN, Series A,
4.50%, 6/30/98 $ 5,008
760 California HFA Multifamily Housing
Mortgage Revenue Bond, Series B
(FHA Insured), 3.60%, 4/7/98 760
800 California State Community Development
Authority Revenue Refunding Bond,
Series 1995 A-1 (Colld. by FNMA Securities),
3.45%, 4/1/98 800
2,855 California State Department of Water
Resources and Sewer VRDN, Series SG-5,
CVP, Merrill Soc Gen Muni Trust,
3.62%, 4/7/98 2,855
1,700 California State Economic Development
Financing Authority FRN, Series 1996,
Volk Enterprises Project
(Harris Trust & Savings Bank LOC),
3.35%, 4/7/98 1,700
3,450 California State G.O. TOCR, Weekly Put,
Series 1998 A (MBIA Insured),
3.65%, 4/7/98 3,450
1,500 California State G.O. VRDN, CR-153,
3.62%, 4/1/98 1,500
18,000 California State G.O. VRDN,
Series 1997 H, 3.77%, 6/30/98 18,000
3,900 California State G.O. VRDN TOB,
Series CR-152, 3.96%, 4/7/98 3,900
California State G.O. VRDN, Weekly
Optional Put
2,300 Series CR-152, 3.62%, 4/7/98 2,300
1,200 Series CR-153, 3.65%, 4/7/98 1,200
1,480 California State HFA Revenue Bond,
P-Floats PT-14, 3.62%, 4/7/98 1,480
1,860 California State HFA SFM Bond,
Series G (FSA Insured),
3.60%, 4/7/98 1,860
California State HFA SFM Revenue Bond
(AMT) (Harris Trust & Savings Bank LOC)
2,400 Series C, 3.55%, 2/1/99 2,400
6,000 Series E, 3.55%, 3/12/99 6,000
See Notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
CALIFORNIA - 98.9% (CONT'D.)
$ 2,900 California State Housing Finance Agency
Multi-Units Housing Revenue,
Series 1992 A CR-231 (MBIA Insured),
3.70%, 4/7/98 $ 2,900
10,500 California State Merlots, Series T
(FGIC Insured), 3.70%, 4/1/98 10,500
California State Pollution Control
Financing Authority FRN,
Southern California Edison Project
3,500 Series 1986 A, 3.90%, 4/1/98 3,500
100 Series 1986 B, 3.90%, 4/1/98 100
7,000 California State Pollution Control
Financing Authority, Series 1997 B
(AMT), Air Products Manufacturing Corp.,
3.60%, 4/1/98 7,000
1,900 California State Pollution Control
Financing Authority, Series 1997 A
(AMT), Arco Project, 3.60%, 4/7/98 1,900
3,600 California State Pollution Control
Financing Authority PCR FRN,
Series A (AMT), Pacific Gas & Electric Co.
(Swiss Bank Corp. LOC),
3.40%, 4/7/98 3,600
2,700 California State Pollution Control
Financing Authority PCR FRN,
Series B (AMT), Pacific Gas & Electric Co.
(Deutsche Bank A.G. LOC),
3.75%, 4/1/98 2,700
5,560 California State Pollution Control
Financing Authority PCR FRN,
Series 1997 C (AMT), Pacific Gas &
Electric Co. (Kredietbank LOC),
3.75%, 4/1/98 5,560
1,600 California State Pollution Control
Financing Authority PCR FRN,
Series F, Pacific Gas & Electric Co.
(Banque Nationale de Paris LOC),
3.70%, 4/1/98 1,600
6,400 California State RAN, Series 1997-8,
4.50%, 6/30/98 6,410
600 California Statewide Community
Development Authority Refunding FRN,
Series 1993 A, House Ear Institute Project
(Morgan Guaranty Trust Co. LOC),
3.70%, 4/1/98 600
SCHEDULES OF INVESTMENTS March 31, 1998
CALIFORNIA MUNICIPAL MONEY MARKET FUND (continued)
CALIFORNIA - 98.9% (CONT'D.)
$ 6,900 Chula Vista City IDR Bond, Series 1996 B,
San Diego Gas & Electric Co.,
3.95%, 4/1/98 $ 6,900
13,685 Contra Costa County Home Mortgage
Variable Rate COP, Series 1997 A
(Colld. by U.S. Government Securities),
3.77%, 4/7/98 13,685
2,200 Foothill/Eastern Transportation Corridor
Agency Toll Road Revenue Bond,
Series 1995 B (Morgan Guaranty Trust
Co. LOC), 3.30%, 4/7/98 2,200
2,100 Irvine City Improvement Assessment
Dist. No. 89-10 Refunding Bond
(National Westminster PLC LOC),
3.80%, 4/1/98 2,100
900 Irvine Ranch Consolidated County Water
District VRDN (Landesbank Hessen
Thuringen Girozentral LOC),
3.80%, 4/1/98 900
2,100 Irvine Ranch Consolidated Water Districts
105, 140, 240 & 250 Improvement Bond
(Commerzbank A.G. LOC),
3.80%, 4/1/98 2,100
6,100 Irvine Ranch Consolidated Water Districts
2, 102, 103-3, 203 & 206 VRDN,
Series 1993 B (Morgan Guaranty Trust
Co. LOC), 3.70%, 4/1/98 6,100
Kern County Public Facilities Project COP
(Union Bank of Switzerland LOC)
1,800 Series C, 3.30%, 4/7/98 1,800
2,800 Series D, 3.30%, 4/7/98 2,800
6,600 Livermore County TRAN,
4.50%, 10/29/98 6,624
4,200 Los Angeles City Housing Revenue
Bond Clipper Trust Certificates,
Series 1996-6A (AMT),
3.77%, 4/3/98 4,200
1,700 Los Angeles City Multifamily Refunding
Bond, Series 1995 D (AMT), Coral Wood
Court Project (Union Bank of California
LOC), 3.65%, 4/1/98 1,700
1,025 Los Angeles Convention and Exhibition
Center VRDN, Merrill P-Floats,
Series 1993 PA-88 (MBIA Insured),
3.62%, 4/7/98 1,025
See Notes to the Financial Statements.
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
CALIFORNIA - 98.9% (CONT'D.)
$2,500 Los Angeles County Community
Redevelopment Agency TOC, BTP-129,
3.80%, 6/1/98 $2,500
Los Angeles County Metropolitan
Transportation Authority Municipal Trust
Receipts, Union Station Project
(FSA Insured)
3,900 Soc Gen Trust SGB-1,
3.70%, 4/7/98 3,900
3,900 Soc Gen Trust SGB-2,
3.70%, 4/7/98 3,900
5,000 Los Angeles County TRAN, Series A,
4.50%, 6/30/98 5,008
4,000 Metropolitan Water District Southern
California CP, Series B,
3.35%, 8/12/98 4,000
2,500 Moreno Valley Unified School District
TRAN, 4.50%, 6/30/98 2,503
1,900 Orange County Apartment Development
Authority VRDN, Series 1988 A,
Vista Verde Apartments
(Wells Fargo & Co. LOC),
3.70%, 4/7/98 1,900
9,500 Orange County Apartment Development
Authority VRDN, Series B,
Aliso Creek Project
(Wells Fargo & Co. LOC),
3.75%, 4/7/98 9,500
1,600 Orange County Limited Obligation
Improvement Bond, Irvine Coast
Assessment District 88-1,
(Societe Generale LOC),
3.70%, 4/1/98 1,600
1,800 Orange County Sanitation Districts
1-3, 5-7, 11, 13 & 14 COP
(National Westminster PLC LOC),
3.80%, 4/1/98 1,800
1,650 Oxnard School District TRAN,
4.50%, 8/13/98 1,653
4,390 Regents of the University of California
VRDN, Series C-SG24, Merrill Soc Gen
Muni Trust, 3.62%, 4/7/98 4,390
5,000 Regents of the University of California
VRDN, Series D (MBIA Insured),
Multiple Purpose Projects,
3.60%, 4/1/98 5,000
SCHEDULES OF INVESTMENTS March 31, 1998
CALIFORNIA MUNICIPAL MONEY MARKET FUND (continued)
CALIFORNIA - 98.9% (CONT'D.)
$ 835 Riverside County Community
Multifamily Mortgage Revenue FRN,
Series A, Ambergate Apartments
(Union Bank of California LOC),
3.55%, 4/8/98 $ 835
5,475 Riverside County Public Facilities COP,
Series B (National Westminster PLC LOC),
3.55%, 4/7/98 5,475
2,000 Riverside County TRAN, Series A,
4.50%, 6/30/98 2,003
3,000 San Francisco City and County Airport
Variable Rate Receipts, Susquehanna
Structured Product SSP-4
(AMBAC Insured), 3.65%, 4/1/98 3,000
2,975 San Francisco City and County Variable
Rate Receipts, Series 1996-AA6
(FGIC Insured), 3.72%, 4/1/98 2,975
3,000 San Luis Obispo County TRAN,
4.50%, 7/8/98 3,005
4,830 San Marcos City Public Facility Authority
Revenue Bond, Series BTP-188, Civic
Center Projects (Colld. by U.S.
Government Securities),
3.60%, 9/2/98 4,830
845 Santa Clara County Housing Authority
Multifamily VRDN, Series A (AMT),
Avenida Espana Gardens
(Union Bank of California LOC),
3.60%, 4/7/98 845
----------
222,339
----------
PUERTO RICO - 0.9%
2,000 Puerto Rico Industrial Medical &
Environmental PCR Bond,
Series 1983 A, Merck & Co., Inc.,
3.99%, 12/1/98 2,003
----------
Total Municipal Investments
(cost $224,342) 224,342
----------
See notes to the Financial Statements.
NUMBER
OF SHARES VALUE
(000s) (000s)
- ------------------------------------------------------------------
OTHER - 0.4%
768 Federated Tax-Exempt
Money Market Fund No. 80 $ 768
125 Provident Institutional California
Money Fund 125
----------
Total Other
(cost $893) 893
----------
Total Investments - 100.2%
(cost $225,235) 225,235
Liabilities less Other Assets - (0.2)% (392)
----------
NET ASSETS - 100.0% $224,843
==========
NOTES TO THE
FINANCIAL STATEMENTS
MARCH 31, 1998
1. ORGANIZATION
Northern Funds was organized October 12, 1993 as a Massachusetts business trust
and is registered under the Investment Company Act of 1940 as an open-end
management investment company consisting of 20 portfolios. The Money Market,
U.S. Government Money Market, U.S. Government Select Money Market, Municipal
Money Market and California Municipal Money Market Funds (collectively the
"Funds") are separate, diversified investment portfolios of Northern Funds,
except the California Municipal Money Market Fund which is a non-diversified
portfolio of Northern Funds. Non-diversified portfolios may invest a relatively
high percentage of their net assets in obligations of a limited number of
issuers. Each of the Funds maintains its own investment objective.
The Funds have entered into an Investment Advisory Agreement with The
Northern Trust Company ("Northern Trust" or the "Adviser"). Northern Trust also
serves as custodian, fund accountant and transfer agent for the Funds.
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. These
policies are in conformity with generally accepted accounting principles
("GAAP"). The preparation of financial statements in conformity with GAAP
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 those estimates.
A VALUATION OF SECURITIES - Short-term investments held by the Funds are
valued using the amortized cost method, which approximates market value.
Under this method, investments purchased at a discount or premium are
valued by amortizing the difference between the original purchase price and
maturity value of the issue over the period to maturity. Guaranteed
investment contracts are valued at cost plus accrued interest, which
approximates market value. Any securities for which no current quotations
are readily available are valued at fair value as determined in good faith
by the Adviser under the supervision of the Board of Trustees.
B REPURCHASE AGREEMENTS - During the term of a repurchase agreement, the
market value of the underlying collateral, including accrued interest, is
required to equal or exceed the market value of the repurchase agreement.
The underlying collateral for all repurchase agreements is held in a
customer-only account of Northern Trust, as custodian for the Funds, at the
Federal Reserve Bank of Chicago.
C ORGANIZATION COSTS - Organization expenses of approximately $342,000 have
been deferred and are being amortized on a straight-line basis through
1999.
D INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded
as of the trade date. The Funds determine the gain or loss realized from
investment transactions by using an identified cost basis method. Interest
income is recognized on an accrual basis and includes amortization of
discounts and premiums.
During the year ended March 31, 1998, all of the dividends derived from net
investment income paid by the Municipal Money Market and California
Municipal Money Market Funds were "exempt-interest dividends," excludable
from gross income for Federal income tax purposes. Further, all such
dividends paid by the California Municipal Money Market Fund were
"California exempt-interest dividends," exempt from California state
personal income tax.
E EXPENSES - The Funds are charged for those expenses that are directly
attributable to each Fund. Expenses that are not directly attributable to
a Fund are typically allocated among the Funds in proportion to their
respective net assets.
F DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income are
declared daily and paid monthly.
Distributions of net realized capital gains, if any, are declared at least
annually. Distributions to shareholders are recorded on the ex-dividend
date.
The timing and character of distributions determined in accordance with
federal income tax regulations may differ from financial statement amounts
determined in accordance with generally accepted accounting principles due
to differences in the treatment and recognition of investment income and
realized gains (losses). These differences are primarily related to
capital loss carryforwards. Certain differences in treatment of income and
capital gains for distributions, which are permanent, may result in
periodic reclassifications in the Funds' capital accounts.
G Federal Income Taxes - No provision for federal income taxes has been made
since the Funds intend to comply with the requirements of the Internal
Revenue Code available to regulated investment companies and to distribute
substantially all of their taxable income to their shareholders.
At March 31, 1998, the California Municipal Money Market Fund had a capital
loss carryforward, for federal income tax purposes, of approximately $1,000
due to expire March 31, 2006. This capital loss carryforward is available
to offset future gains.
H RECLASSIFICATIONS - At March 31, 1998, the Funds made reclassifications
among their capital accounts to reflect the characterization of certain
income and capital gains distributions for federal income tax purposes, as
follows:
UNDISTRIBUTED UNDISTRIBUTED
NET NET PAID
AMOUNTS IN INVESTMENT CAPITAL IN
THOUSANDS INCOME GAINS CAPITAL
- ---------------------------------------------------------------------
Money Market 24 (1) (23)
U.S. Government
Money Market 6 _ (6)
U.S. Government
Select Money
Market 4 _ (4)
Municipal Money
Market 27 _ (27)
California Municipal
Money Market 4 _ (4)
- ---------------------------------------------------------------------
These reclassifications have no impact on the net asset value of the Funds
and are primarily due to differing treatments of certain fees and expenses.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
Pursuant to its advisory agreement with the Funds, the Adviser is entitled to
receive a fee, calculated daily and payable monthly, at the annual rates
presented below as applied to each Fund's daily net assets. For the year ended
March 31, 1998, the Adviser voluntarily agreed to waive a portion of its
advisory fees as applied to each Fund's daily net assets as shown on the
accompanying Statements of Operations. Northern Trust had also agreed to
reimburse the Funds as shown on the accompanying Statements of Operations to
adhere to the expense limitations presented in the following table:
ANNUAL ADVISORY
ADVISORY FEES AFTER EXPENSE
FEES WAIVERS LIMITATIONS
- ---------------------------------------------------------------------
Money Market 0.60% 0.40% 0.55%
U.S. Government
Money Market 0.60% 0.40% 0.55%
U.S. Government Select
Money Market 0.60% 0.40% 0.55%
Municipal Money
Market 0.60% 0.40% 0.55%
California Municipal
Money Market 0.60% 0.40% 0.55%
- ---------------------------------------------------------------------
For the periods April 1, 1997 to September 30, 1997 and November 3, 1997 to
December 31, 1997, the annual advisory fees, advisory fees after waivers and
expense limitations for the U.S. Government Select Money Market and California
Municipal Money Market Funds were as follows:
ANNUAL ADVISORY
ADVISORY FEES AFTER EXPENSE
FEES WAIVERS LIMITATIONS
- ---------------------------------------------------------------------
U.S. Government Select
Money Market 0.60% 0.25% 0.40%
California Municipal
Money Market 0.60% 0.30% 0.45%
- ---------------------------------------------------------------------
The Funds have entered into an administrative agreement with Sunstone
Financial Group, Inc. ("Sunstone") for certain administrative services.
Pursuant to its administrative agreement with the Funds, Sunstone is entitled to
receive a fee, computed daily and payable monthly, at the annual rate of 0.15%
of each Fund's daily net assets. For the year ended March 31, 1998, Sunstone
voluntarily agreed to waive a portion of its administration fees as shown on the
accompanying Statements of Operations. The waivers and reimbursements of
Northern Trust and Sunstone described above are voluntary and may be terminated
by them at any time at their discretion.
4. BANK LOANS
The Funds maintain a $5,000,000 revolving bank credit line for liquidity and
other purposes. Borrowings under this arrangement bear interest at 1% above the
Fed Funds rate and are secured by pledged securities equal to or exceeding 120%
of the outstanding balance.
As of March 31, 1998, there were no outstanding borrowings.
REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES:
NORTHERN FUNDS MONEY MARKET FUND,
U.S. GOVERNMENT MONEY MARKET FUND,
U.S. GOVERNMENT SELECT MONEY MARKET FUND,
MUNICIPAL MONEY MARKET FUND,
CALIFORNIA MUNICIPAL MONEY MARKET FUND
We have audited the accompanying statements of assets and liabilities of
Northern Funds (a Massachusetts business trust consisting of the Money Market
Fund, U.S. Government Money Market Fund, U.S. Government Select Money Market
Fund, Municipal Money Market Fund and California Municipal Money Market Fund),
including the schedules of investments, as of March 31, 1998, and the related
statements of operations, changes in net assets, and the financial highlights
for the periods indicated thereon. 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 includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
March 31, 1998, by physical examination of the securities held by the custodian
and by correspondence with outside depositories 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 each
of the respective portfolios constituting Northern Funds as of March 31, 1998,
the results of their operations, changes in their net assets, and financial
highlights for the periods indicated thereon, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 13, 1998
This report has been prepared for the general information of Northern Funds
shareholders. It is not authorized for distribution to prospective investors
unless accompanied or preceded by a current Northern Funds prospectus, which
contains more complete information about Northern Funds investment policies,
management fees and expenses. Investors are reminded to read the prospectus
carefully before investing or sending money.
c 1998 Sunstone Distribution Services, LLC,
Distributor
NF4090398
(logo)
Northern Funds SM
P.O. Box 2081
Milwaukee, WI 53201-9800
1-800-595-9111
