<PAGE>
1
-------------------------------------------------------------------------------
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 annual report of the Money Market Portfolio of
Institutional Daily Income Fund for the period April 14, 1994 (inception)
through March 31, 1995.
The Fund had net assets of $35,856,766 as of March 31, 1995. Dividends earned on
a share held throughout the period were $.045 which, when adjusted for the
compounding effect of the reinvestment of dividends, represents a 5.16% yield on
an annual basis. The Federal Reserve, during the last fiscal year, has raised
the Federal Funds Rate from 3.00% to 6.00%. Rates on taxable investments have
risen accordingly.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
/S/ Steven Duff
Steven Duff
President
-------------------------------------------------------------------------------
<PAGE>
2
-------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Commercial Paper (35.91%)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,000,000 Asset Securitization Cooperative Corp. 04/25/95 6.24% $ 1,992,483
1,418,000 Campbell Soup Company 04/18/95 6.00 1,414,473
2,000,000 General Electric Credit Corp. 04/17/95 5.97 1,995,372
1,500,000 Multibanco Commermex Co. 04/21/95 6.24 1,495,335
LOC Societe Generale
2,000,000 Ranger Funding Corp. 05/31/95 6.19 1,980,345
2,000,000 Receivables Capital Corp. 04/07/95 6.14 1,998,649
2,000,000 SCI Systems Inc. 04/06/95 6.01 1,999,003
LOC ABN-AMRO Bank N.V.
------------ ----------
12,918,000 Total Commercial Paper 12,875,660
------------ ----------
<CAPTION>
Domestic Bankers' Acceptances (2.77%)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Republic National Bank of New York 05/11/95 6.10% $ 993,635
------------ ---------
1,000,000 Total Domestic Bankers' Acceptances 993,635
------------ ---------
<CAPTION>
Domestic Certificates of Deposit (5.58%)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,000,000 American Express Centurian Bank 04/06/95 6.05% $ 2,000,000
------------ -----------
2,000,000 Total Domestic Certificates of Deposit 2,000,000
------------ -----------
<CAPTION>
Eurodollar Certificates of Deposit (5.58%)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Bayerische Landesbank Girozentrale 04/13/95 6.06% $ 999,873
1,000,000 Sumitomo Bank 05/02/95 6.11 1,000,038
------------ ----------
2,000,000 Total Eurodollar Certificates of Deposit 1,999,911
------------ ----------
<CAPTION>
Federal Home Loan Mortgage (8.36%)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,000,000 Federal Home Loan Mortgage 09/07/95 5.60% $ 2,997,755
------------ -----------
3,000,000 Total Federal Home Loan Mortgage 2,997,755
------------ -----------
<CAPTION>
Foreign Commercial Paper (24.18%)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,000,000 Barclays Bank International Ltd. 04/10/95 6.01% $ 1,997,674
1,500,000 Canadian Imperial Bank of Commerce 06/01/95 6.11 1,485,127
1,000,000 Kredietbank 06/15/95 6.17 987,712
1,200,000 Province of British Columbia 04/05/95 6.05 1,199,600
</TABLE>
-------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
3
-------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Foreign Commercial Paper (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,500,000 Swedish Export Credit Corp. 04/03/95 6.25% $ 1,500,000
LOC Sovereign
1,500,000 Union Bank of Switzerland 04/03/95 6.30 1,500,000
----------- -----------
8,700,000 Total Foreign Commercial Paper 8,670,113
----------- -----------
<CAPTION>
Repurchase Agreements, Overnight (10.63%)
-----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 3,812,000 Goldman, Sachs & Co. (Collateralized by $3,812,274 04/03/95 6.25% $ 3,812,000
U.S. Treasury Bonds, 7.625%, due 02/15/25)
----------- -----------
3,812,000 Total Repurchase Agreements, Overnight 3,812,000
----------- -----------
<CAPTION>
U.S. Government Obligations (5.52%)
-----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 1,000,000 U.S. Treasury Bills 05/04/95 5.68% $ 995,247
1,000,000 U.S. Treasury Bills 07/27/95 5.54 983,229
----------- -----------
2,000,000 Total U.S. Government Obligations 1,978,476
----------- -----------
<CAPTION>
Yankee Certificates of Deposit (4.18%)
-----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 1,500,000 Canadian Imperial Bank of Commerce 04/03/95 6.02% $ 1,500,000
----------- ------------
1,500,000 Total Yankee Certificates of Deposit 1,500,000
----------- ------------
Total Investments (102.71%) (Cost $36,827,550+) 36,827,550
Liabilities in Excess of Cash and Other Assets (-2.71%) ( 970,784)
-------------
Net Assets (100%), 35,856,766 Shares Outstanding (Note 3) $ 35,856,766
=============
Net Asset Value, offering and redemption price per share $ 1.00
=============
+ Aggregate cost for federal income tax purpose is identical.
</TABLE>
-------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
4
-------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
APRIL 14, 1994 (INCEPTION DATE) TO MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest............................................................. $ 1,969,818
-------------
Expenses: (Note 2)
Custodian, shareholder servicing
and related shareholder expenses................................... 17,637
Legal, compliance and filing fees.................................... 31,717
Audit and accounting................................................. 37,836
Trustees' fees....................................................... 5,817
Amortization of organization costs................................... 9,907
Other................................................................ 2,818
-------------
Total expenses..................................................... 105,732
Less: Reimbursement of expenses from Manager (Note 2).............. ( 97,072)
-------------
Net expenses.................................................... 8,660
-------------
Net investment income.................................................... 1,961,158
-------------
Increase in net assets from operations................................... $ 1,961,158
=============
</TABLE>
-------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
5
-------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
APRIL 14, 1994 (INCEPTION DATE) TO MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS
Operations:
<S> <C>
Net investment income........................................... $ 1,961,158
--------------
Increase in net assets from operations.......................... 1,961,158
Dividends to shareholders from net investment income............ ( 1,961,158)
Transactions in shares of beneficial interest (Note 3).......... 35,756,766
--------------
Total increase (decrease)....................................... 35,756,766
--------------
Net assets:
Beginning of period............................................. 100,000
--------------
End of period................................................... $ 35,856,766
==============
</TABLE>
-------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
6
-------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
===============================================================================
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 was established as a Massachusetts business trust on January 20,
1994 and commenced operations on April 14, 1994. 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.
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 the Fund 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 Portfolio pays to the
Manager an annual fee of .05% of the 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.
-------------------------------------------------------------------------------
<PAGE>
7
-------------------------------------------------------------------------------
===============================================================================
During the period ended March 31, 1995, the Manager voluntarily waived
investment management fees and administration fees of $30,505 and $19,065
respectively. In addition, although not required to do so, the Manager has
agreed to reimburse expenses amounting to $97,072.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$1,000 per annum plus $250 per meeting attended.
3. Transactions in Shares of Beneficial Interest.
At March 31, 1995, an unlimited number of shares of beneficial interest were
authorized and capital paid in amounted to $35,856,766. Transactions in shares
of beneficial interest, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
April 14, 1994
(Inception date)
to
March 31, 1995
--------------
<S> <C>
Sold........................................................... 301,915,598
Issued on reinvestment of dividends............................ 1,531,019
Redeemed....................................................... ( 267,689,851)
-------------
Net increase (decrease)........................................ 35,756,766
==============
</TABLE>
4. Selected Financial Information.
<TABLE>
<CAPTION>
April 14, 1994
(Inception date)
to
March 31, 1995
--------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C>
Net asset value, beginning of period........................... $ 1.00
-------------
Income from investment operations:
Net investment income.......................................... 0.045
Less distributions:
Dividends from net investment income........................... ( 0.045)
-------------
Net asset value, end of period................................. $ 1.00
=============
Total Return................................................... 5.16%*
Ratios/Supplemental Data.......................................
Net assets, end of period (000)................................ $ 35,857
Ratios to average net assets:..................................
Expenses................................................... .02%*+
Net investment income...................................... 5.14%*+
* Annualized
+ Net of investment management and administration fees waived equivalent to .13% of average net asset plus
expenses reimbursed equivalent to .25% of average net assets.
</TABLE>
-------------------------------------------------------------------------------
<PAGE>
8
-------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
===============================================================================
The Board of Trustees and Shareholders
Institutional Daily Income Fund
We have audited the accompanying statement of net assets of the Money Market
Portfolio of Institutional Daily Income Fund as of March 31, 1995, and the
related statements of operations, changes in net assets, and the selected
financial information for the period then ended. These financial statements and
selected financial information are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements and
selected financial information based on our audit.
We conducted our audit 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 selected financial
information 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, 1995, by correspondence with the custodian. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and selected financial information
referred to above present fairly, in all material respects, the financial
position of Institutional Daily Income Fund as of March 31, 1995, the results of
its operations, the changes in its net assets and the selected financial
information for the period indicated, in conformity with generally accepted
accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
April 24, 1995
-------------------------------------------------------------------------------
<PAGE>
9
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
