- -------------------------------------------------------------------------------
INSTITUTIONAL
DAILY INCOME FUND 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
MONEY MARKET PORTFOLIO 212-830-5200
===============================================================================
Dear Shareholder,
We are pleased to present the semi-annual report of the Money Market Portfolio
of Institutional Daily Income Fund for the period April 1, 1995 through
September 30, 1995. As of the end of the period the Fund had net assets of
$76,358,263 and 16 active shareholders.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
/s/ Steven W. Duff
Steven W. Duff
President
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Commercial Paper (37.94%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Banco Bradesco S.A. (Grand Cayman)
LOC Barclays Bank PLC 02/23/96 5.79% $ 977,400
1,800,000 Beta Finance Corporation 12/05/95 5.64 1,782,368
2,750,000 Embarcadero Center Venture
LOC Dai-Ichi Kangyo Bank, Ltd. 10/23/95 5.86 2,740,664
1,000,000 Guangdong Enterprises Incorporated
LOC Credit Suisse 01/19/96 5.80 982,742
1,505,000 H.J. Heinz Company 10/11/95 5.78 1,502,837
2,000,000 Merrill Lynch & Company Incorporated 12/07/95 5.72 1,979,283
3,000,000 Morgan Stanley 12/20/95 5.68 2,963,133
3,000,000 New Center Asset Trust 10/11/95 5.79 2,995,680
2,000,000 Pemex Capital, Incorporated
LOC Swiss Bank Corp. 10/31/95 5.78 1,990,768
2,000,000 Petroleo Brasilerio S.A. (Petrobras)
LOC Barclays Bank PLC 01/03/96 5.87 1,970,343
3,000,000 Ranger Funding Corporation 10/11/95 5.80 2,995,673
2,000,000 Receivables Capital Corporation 10/12/95 5.77 1,996,805
2,000,000 Sinochem American Holdings Incorporated
LOC Credit Suisse 10/10/95 5.77 1,997,471
2,100,000 Special Purpose Accounts Receivable
Cooperative Corporation (SPARCS) 10/20/95 5.78 2,093,963
- -------------- -----------
29,155,000 Total Commercial Paper 28,969,130
- -------------- -----------
<CAPTION>
Domestic Bankers' Acceptances (3.89%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Morgan Guaranty Trust Company 10/27/95 5.71% $ 996,070
2,000,000 Trust Company Bank of Georgia 12/29/95 5.78 1,972,133
- -------------- ----------
3,000,000 Total Domestic Bankers' Acceptances 2,968,203
- -------------- ----------
<CAPTION>
Domestic Certificates of Deposit (3.93%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,000,000 American Express Centurian Bank 10/23/95 5.75% $ 3,000,000
- -------------- ----------
3,000,000 Total Domestic Certificates of Deposit 3,000,000
- -------------- ----------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Foreign Commercial Paper (11.69%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,000,000 ABN-AMRO Canadian Schedule B 11/30/95 5.75% $ 1,981,415
3,000,000 Banque International A Luxemborg 12/29/95 5.82 2,957,907
1,000,000 National Westminster Bank PLC 12/04/95 5.79 990,112
3,000,000 Union Bank of Switzerland 10/02/95 6.40 3,000,000
---------- ----------
9,000,000 Total Foreign Commercial paper 8,929,434
---------- ----------
<CAPTION>
Japanese Yankee Certificates of Deposit (2.62%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,000,000 Sumitomo Bank, Limited 10/11/95 5.96% $ 2,000,010
---------- ----------
2,000,000 Total Japanese Yankee Certificates of Deposit 2,000,010
---------- ----------
<CAPTION>
Other Notes (14.50%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,000,000 County of Passaic, NJ GO Refunding Bonds Series B
LOC Bank of Nova Scotia 09/01/20 5.95% $ 3,000,000
1,000,000 Fresno County, CA TRAN 06/28/96 6.00 999,545
2,200,000 State of Missouri HEFA
(SSM Health Care System) 1995 - Series D
MBIA Insured 06/01/24 5.90 2,200,000
2,000,000 Mississippi Business Finance Corporation IDRB
(Howard Industries, Inc.) - Series 1995
LOC National Bank of Detroit 06/01/10 6.00 2,000,000
2,875,000 The City of New York Fiscal 1996 Series A-2
LOC Societe Generale 01/18/96 5.87 2,875,000
---------- -----------
11,075,000 Total Other Notes 11,074,545
---------- -----------
<CAPTION>
Repurchase Agreements, Overnight (21.77%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 16,621,000 Goldman, Sachs & Co. (Collateralized by: 10/02/95 6.35% $ 16,621,000
$ 6,337,093, U.S. Treasury Bonds, 12.000%, due 08/15/13
$10,248,678, U.S. Treasury Notes, 5.875%, due 08/15/98)
----------- ------------
16,621,000 Total Repurchase Agreements, Overnight 16,621,000
----------- ------------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Yankee Certificates of Deposit (3.93%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Canadian Imperial Bank of Commerce 10/19/95 5.75% $ 1,000,000
2,000,000 Canadian Imperial Bank of Commerce 11/20/95 5.70 2,000,000
---------- ------------
3,000,000 Total Yankee Certificates of Deposit 3,000,000
---------- ------------
Total Investments (100.27%) (Cost $76,562,322+) 76,562,322
Liabilities in Excess of Cash and Other Assets (-0.27%) ( 204,059)
------------
Net Assets (100.00%) $ 76,358,263
============
Net Asset Value, offering and redemption price per share:
Class A shares, 5,128 shares outstanding (Note 3) $ 1.00
============
Class B shares, 76,353,135 shares outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purpose is identical.
</TABLE>
<TABLE>
<CAPTION>
KEYS:
<S> <C> <C>
GO = Government Obligation
HEFA = Health and Education Finance Authority
IDRB = Industrial Development Revenue Bond
TRAN = Tax and Revenue Anticipation Note
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest............................................................. $ 1,655,545
-------------
Expenses: (Note 2)
Management fee....................................................... 22,231
Administration fee................................................... 13,894
Shareholder servicing fee (Class A).................................. 6
Custodian, shareholder servicing
and related shareholder expenses................................... 14,069
Legal, compliance and filing fees.................................... 20,342
Audit and accounting................................................. 18,953
Trustees' fees....................................................... 3,056
Amortization of organization costs................................... 5,150
Other................................................................ 953
-------------
Total expenses..................................................... 98,654
Less:
Expenses paid indirectly........................................ ( 16,862)
Fees waived and expenses reimbursed............................. ( 53,997)
-------------
Net expenses.................................................... 27,795
-------------
Net investment income.................................................... 1,627,750
-------------
Increase in net assets from operations................................... $ 1,627,750
=============
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended April 14, 1995
September 30, 1995 (Inception) to
(Unaudited) March 31, 1995
--------- --------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income....................................... $ 1,627,750 $ 1,961,158
----------------- ----------------
Increase in net assets from operations...................... 1,627,750 1,961,158
Dividends to shareholders from net investment income........
Class A................................................. ( 139) --
Class B................................................. ( 1,627,611) ( 1,961,158)
Transactions in shares of beneficial interest (Note 3)......
Class A................................................. 5,128 --
Class B................................................. 40,496,369 35,756,766
------------------ ----------------
Total increase (decrease)................................... 40,501,497 35,756,766
Net assets:
Beginning of period......................................... 35,856,766 100,000
------------------ ----------------
End of period............................................... $ 76,358,263 $ 35,856,766
================== ================
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
1. Summary of Accounting Policies
Institutional Daily Income Fund (the "Fund") is a no-load, diversified, open-end
management investment company registered under the Investment Company Act of
1940. The Fund offers investors three managed portfolios of money market
instruments: U.S. Government Portfolio, Money Market Portfolio and Municipal
Portfolio. Presently only the Money Market Portfolio has been activated. Each
Portfolio has two classes of stock authorized, Class A and Class B. The Class A
shares of each Portfolio are subject to a service fee pursuant to each
Portfolio's distribution and service plan. The Class B shares are not subject to
a service fee. In all other respects, the Class A and Class B shares represent
the same interest in the income and assets of each respective Portolio.
Distribution of Class A shares of the Money Market Portfolio commenced April 6,
1995. All Fund shares outstanding before April 6, 1995 were desigated as Class B
shares.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles for investment companies as follows.
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument.
b) Federal Income Taxes -
It is the policy of each Portfolio to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (including net realized short-term capital
gains) are declared daily and paid monthly. Capital gains distributions if
any, will be made at least annually and in no event later than sixty days
after the end of the Fund's fiscal year.
d) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis. It is the Fund's
policy to take possession of securities as collateral under repurchase
agreements and to determine on a daily basis that the value of such
securities are sufficient to cover the value of the repurchase agreements.
2. Investment Management Fees and Other Transactions with Affiliates
Under the Investment Management Contract, each Portfolio pays an investment
management fee to Reich & Tang Asset Management, L.P. (the Manager) at the
annual rate of .08% of the Portfolio's average daily net assets. The Manager is
required to reimburse the Fund for its expenses (exclusive of interest, taxes,
brokerage, and extraordinary expenses) to the extent that such expenses,
including the investment management and administration fees, for any fiscal year
exceed the limits on investment company expenses prescribed by any state in
which the Fund's shares are qualified for sale.
Pursuant to an Administrative Services Contract each Potfolio pays to the
Manager an annual fee of .05% of the Portfolio's average daily net assets.
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
The Manager is a wholly-owned subsidiary of New England Investment Companies,
L.P. ("NEIC"). On August 16, 1995, New England Mutual Life Insurance Company
("The New England"), the owner of NEIC's general partner and a majority owner of
the limited partnership interest in NEIC, entered into an agreement to merge
with Metropolitan Life Insurance Company ("MetLife"), with MetLife to be the
survivor of the merger. The merger is subject to several conditions, including
the required approval, by shareholders of the Fund of a proposed new investment
advisory agreement, intended to take effect at the time of the merger. The new
agreement will be substantially similar to the existing agreement.
Pursuant to a distribution and service plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors L.P. (the
Distributor) have entered into a Distribution Agreement and a Shareholder
Servicing Agreement (with respect to the Class A shares of the Fund only). For
its services under the Shareholder Servicing Agreement, the Distributor receives
from each Portfolio with respect only to the Class A shares, a service fee equal
to .25% of 1% per annum of each Portfolio's average daily net assets.
With respect to each Portfolio, the manager has voluntarily agreed to waive its
management and administration services fees in whole or in part and reimburse
each Portfolio its operating expenses to the extent that such Portfolio's total
operating expenses exceed: (i) .15% of such Portfolio's average daily net assets
during the first fiscal year of the Fund; (ii) .175% of such Portfolio's average
daily net assets during the second fiscal year of the Fund, and (iii) .20% of
such Portfolio's average daily net assets in the third fiscal year of the Fund.
During the period ended September 30, 1995, the Manager and Distributor
voluntarily waived investment management fees, administration fees and
distribution fees of $22,231, $13,894 and 6 respectively. In addition, although
not required to do so, the Manager has agreed to reimburse expenses amounting to
$17,866.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$1,000 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Custodian,
shareholder servicing and related shareholder expenses" are fees of $111 paid to
Fundtech Services L.P., an affiliate of the Manager as servicing agent for the
Fund. Also, included under this caption are custodian expense offsets of
$16,862.
3. Transactions in Shares of Beneficial Interest
At September 30, 1995, an unlimited number of shares of beneficial interest were
authorized and capital paid in amounted to $76,358,263. Transactions in shares
of beneficial interest, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Class A Class B
----------------- ------------------------------------
April 6, 1995
(Commencement of Six Months April 14,1994
Operations) to Ended (Inception) to
September 30, 1995 September 30, 1995 March 31, 1995
------------------ ------------------ --------------
<S> <C> <C> <C>
Sold............................................. 5,009 237,189,190 301,915,598
Issued on reinvestment of dividends.............. 119 1,099,230 1,531,019
Redeemed......................................... ( -- ) ( 197,792,051) (267,689,851)
----------- ------------ -----------
Net increase (decrease).......................... 5,128 40,496,369 35,756,766
=========== ============ ===========
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
4. Selected Financial Information
<TABLE>
<CAPTION>
Class A** Class B
------------- -------------------------------
April 14,1994
Period Ended (Inception) to
September 30, 1995 March 31, 1995
----------------------------------- --------------
<S> <C> <C> <C>
Per Share Operating Performance:
(For a share outstanding throughout the period)
Net asset value, beginning of period............. $ 1.00 $ 1.00 $ 1.00
------- ------- ------
Income from investment operations:
Net investment income............................ 0.027 0.029 0.045
Less distributions:
Dividends from net investment income............. ( 0.027) ( 0.029) ( 0.045)
------- ------- -------
Net asset value, end of period................... $ 1.00 $ 1.00 $ 1.00
======= ======= ======
Total Return..................................... 5.75%* 6.02%* 5.16%*
Ratios/Supplemental Data
Net assets, end of period (000).................. $ 5 $ 76,353 $ 35,857
Ratios to average net assets:
Expenses...................................... .35%*+ .10%*+ .02%*+
Net investment income 5.62%*+ 5.86%*+ 5.14%*+
** Class A commenced operations on April 6, 1995.
* Annualized
+ Net of management and administration fees waived and expenses reimbursed
equivalent to .19% and .38% of average net assets. In addition shareholder
servicing fees equivalent to .25% were waived only with respect to Class A.
</TABLE>
- -------------------------------------------------------------------------------
