<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
DAILY INCOME FUND 212-830-5200
================================================================================
Dear Shareholder,
We are pleased to present the annual report of Institutional Daily Income Fund
for the period April 1, 1996 through March 31, 1997.
The Fund's Money Market Portfolio had 27 shareholders and net assets of
$196,745,292 as of March 31, 1997. The U.S. Treasury Portfolio had 17
shareholders and net assets of $318,089,178 as of March 31, 1997.
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>
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INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1997
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Commercial Paper (51.17%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 9,000,000 ANZ Banking Group 04/14/97 5.44% $ 8,982,548
9,000,000 Commonwealth Bank of Australia 04/10/97 5.40 8,988,007
9,000,000 General Electric Capital Corporation 04/21/97 5.38 8,973,450
9,000,000 Hertz Corporation 04/29/97 5.42 8,962,550
9,000,000 Island Finance 04/04/97 5.34 8,996,010
8,000,000 Merrill Lynch & Co., Inc. 04/30/97 5.43 7,965,522
9,000,000 Receivables Capital Corporation 04/11/97 5.38 8,986,625
10,000,000 Sigma Finance Corporation 05/06/97 5.42 9,947,986
10,000,000 Svenska Handelsbanken 04/30/97 5.41 9,956,983
9,000,000 Unifunding 04/09/97 5.40 8,989,340
10,000,000 Venantius A.B. 05/23/97 5.43 9,922,867
------------- ------------
101,000,000 Total Commercial Paper 100,671,888
------------- ------------
<CAPTION>
Letter of Credit Commercial Paper (4.05%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 4,000,000 Nacional Financeria
LOC Societe Generale 04/30/97 5.39% $ 3,982,761
4,000,000 Premium Funding - Series E
LOC Citibank 04/11/97 5.40 3,994,033
------------- ------------
8,000,000 Total Letter of Credit Commercial Paper 7,976,794
------------- ------------
<CAPTION>
Master Notes (2.54%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 5,000,000 Goldman Sachs 08/01/97 6.85% $ 5,000,000
------------- ------------
5,000,000 Total Master Notes 5,000,000
------------- ------------
<CAPTION>
Other Notes (24.45%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 2,000,000 City of Elsmere, KY Industrial Building RB
(International Mold Steel Inc. Project)
LOC Star Bank, N.A. 10/01/16 (a) 5.77% $ 2,000,000
3,000,000 County of Passaic, NJ GO Refunding Bond - Series B
LOC Bank of Nova Scotia 09/01/20 (a) 5.65 3,000,000
1,040,000 LRV Enterprises, L.L.C. Taxable VRDN - Series 1996
LOC First of America/Michigan National Bank 09/01/21 (a) 5.75 1,040,000
3,900,000 Mayfair Village Retirement Center, Inc., KY
(VR Term Notes) - Series 1995
LOC PNC Bank 05/01/00 (a) 5.76 3,900,000
2,906,000 Mercer Cty Improvement Authority Taxable RB
(County Baseball Stadium Project) - Series 1997 04/15/98 5.96 2,911,645
1,364,000 Michigan Municipal Bond Authority RAN - Series C 08/04/97 6.42 1,365,986
3,745,000 Michigan Municipal Bond Authority RN - Series E 08/05/97 6.42 3,748,595
</TABLE>
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See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Other Notes (Continued)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,900,000 Mississippi Business Finance Corporation IDRB
(Howard Industries, Inc.) - Series 1995
LOC First National Bank of Chicago 06/01/10 (a) 5.85% $ 1,900,000
2,700,000 Pennsylvania EDFA
(West 914 Incorporation Project) RB - Series 1991A
LOC PNC Bank 05/01/21(a) 5.85 2,700,000
1,300,000 Pennsylvania EDFA RB
(C & D Charter Power System) - Series 1991B2
LOC PNC Bank 12/01/00(a) 5.40 1,300,000
1,100,000 Pennsylvania EDFA Bond
LOC PNC Bank 08/01/02 (a) 5.85 1,100,000
3,090,000 State of Connecticut RRA Taxable VR - Subseries 2
LOC National Westminster Bank PLC 11/15/97 (b) 6.00 3,090,000
2,200,000 State of Missouri HEFA
(SSM Health Care System) 1995 - Series D
MBIA Insured 06/01/25 (a) 5.65 2,200,000
2,000,000 State of Tennessee - Series D 07/02/01 (a) 5.60 2,000,000
1,000,000 State of Tennessee Adjustable Taxable BAN - Series B 07/02/01 (a) 5.60 1,000,000
3,000,000 The City of New York Fiscal 1996 - Series 1996 A-2
LOC Societe Generale 04/24/97 5.52 3,000,000
2,840,000 The City of New York, Fiscal 1996
LOC Societe Generale 05/08/97 5.45 2,840,000
9,000,000 Wichita, Kansas Taxable General Obligation
Renewal & Improvement Temporary Notes 08/28/97 5.62 9,001,769
------------- ------------
48,085,000 Total Other Notes 48,097,995
------------- ------------
<CAPTION>
Repurchase Agreements, Overnight (17.28%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 34,000,000 Morgan Stanley & Co., Incorporated (Collateralized
by $44,725,000, GNMA, 6.500%, due 2/20/24) 04/01/97 6.50% $ 34,000,000
------------- ------------
34,000,000 Total Repurchase Agreements, Overnight 34,000,000
------------- ------------
Total Investments (99.49%) (Cost 195,746,677+) 195,746,677
Cash and Other Assets, Net of Liabilities (0.51%) 998,615
------------
Net Assets (100.00%) $ 196,745,292
Net Asset Value, offering and redemption price per share: ============
Class A, 38,220,159 shares outstanding (Note 3) $ 1.00
============
Class B,158,525,133 shares outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1997
================================================================================
FOOTNOTES:
(a) Securities are payable on demand at par including accrued interest
(usually with seven days notice) and where applicable are unconditionally
secured as to principal and interest by a letter of credit. The interest
rates are adjustable and are based on market rates. The rate shown is the
rate in effect at the date of this statement.
(b) The maturity date indicated for this security is the mandatory put date.
<TABLE>
<CAPTION>
KEYS:
<S> <C>
BAN = Bond Anticipation Note RAN = Revenue Anticipation Note
EDFA = Economic Development Finance Authority RB = Revenue Bond
GO = General Obligation RN = Revenue Note
HEFA = Health and Education Finance Authority RRA = Resource Recovery Authority
IDRB = Industrial Development Revenue Bond VRDN = Variable Rate Demand Note
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1997
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- --------
Repurchase Agreements, Overnight (47.79%)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 30,000,000 CIBC (Collateralized by $31,725,000, U.S. Treasury
Bills, due 11/13/97) 04/01/97 6.30% $ 30,000,000
30,000,000 Donaldson Lufkin Jenrette (Collateralized by
$5,769,000, U.S. Treasury Bills, due 05/01/97, and $25,072,000
U.S. Treasury Notes, 5.00% to 6.50%, due 04/30/98 to 02/15/06) 04/01/97 6.51 30,000,000
10,000,000 Goldman Sachs (Collateralized by $11,911,724,
GNMA's, 6.00% to 9.00%, due 02/15/09 to 03/20/27) 04/01/97 6.54 10,000,000
30,000,000 Morgan (J.P.) Securities, Inc. (Collateralized by
$30,413,000, U.S. Treasury Notes, 6.25%, due 10/31/01) 04/01/97 6.25 30,000,000
32,000,000 Morgan Stanley & Co., Incorporated (Collateralized by
$41,475,000, GNMA, 7.00%, due 04/20/24) 04/01/97 6.50 32,000,000
20,000,000 Goldman Sachs (Collateralized by $41,150,915,
GNMA's, 6.00% to 9.00%, due 09/15/07 to 03/15/27) 04/07/97 5.32 20,000,000
------------- -------------
152,000,000 Total Repurchase Agreements, Overnight 152,000,000
------------- -------------
<CAPTION>
U.S. Government Obligations (51.94%)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 20,000,000 U.S. Treasury Bills 04/03/97 5.02% $ 19,994,437
60,000,000 U.S. Treasury Bills 04/17/97 5.12 59,864,400
5,000,000 U.S. Treasury Bills 06/05/97 5.12 4,954,861
5,000,000 U.S. Treasury Bills 06/26/97 5.20 4,939,501
5,000,000 U.S. Treasury Bills 07/24/97 5.23 4,919,408
2,000,000 U.S. Treasury Bills 02/05/98 5.80 1,904,933
9,000,000 U.S. Treasury Bills 03/05/98 5.67 8,546,282
10,000,000 U.S. Treasury Notes, 6.87% 04/30/97 5.20 10,011,502
5,000,000 U.S. Treasury Notes, 6.50% 05/15/97 5.10 5,007,162
5,000,000 U.S. Treasury Notes, 6.75% 05/31/97 5.21 5,010,669
5,000,000 U.S. Treasury Notes, 5.62% 06/30/97 5.23 5,003,142
15,000,000 U.S. Treasury Notes, 5.87% 07/31/97 5.23 15,023,338
10,000,000 U.S. Treasury Notes, 6.50% 08/15/97 5.15 10,042,500
10,000,000 U.S. Treasury Notes, 5.62% 08/31/97 5.46 10,001,492
------------- -------------
166,000,000 Total U.S. Government Obligations 165,223,627
------------- -------------
Total Investments (99.73%) Cost ($ 317,223,627+) 317,223,627
Cash and Other Assets, Net of Liabilities (0.27%) 865,551
-------------
Net Assets (100%) $ 318,089,178
Net Asset Value offering and redemption price per share: =============
Class A Shares, 310,289,955 shares outstanding (Note 3) $ 1.00
=============
Class B Shares, 7,799,223 shares outstanding (Note 3) $ 1.00
=============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1997
================================================================================
<TABLE>
<CAPTION>
Money Market U.S. Treasury
Portfolio Portfolio
------------ -------------
INVESTMENT INCOME
<S> <C> <C>
Income:
Interest................................................... $ 9,035,692 $ 15,524,891
------------ -------------
Expenses: (Note 2)
Investment management fee.................................. 175,379 302,799
Administration fee......................................... 82,861 146,609
Distribution fee (Class A)................................. 28,701 726,925
Custodian expenses......................................... 17,497 37,129
Shareholder servicing and related shareholder expenses..... 44,253 72,565
Legal, compliance and filing fees.......................... 32,220 22,624
Audit and accounting....................................... 44,613 46,286
Trustees' fees ............................................ 5,427 6,276
Amortization of organization costs......................... 10,271 --
Miscellaneous.............................................. 3,148 5,136
------------ -------------
Total expenses......................................... 444,370 1,366,349
Less:
Fees waived (Note 2).................................. ( 142,235) ( 156,189)
Expenses paid indirectly.............................. ( 13,201) ( 18,952)
------------ -------------
Net expenses................................... 288,934 1,191,208
------------ -------------
Net investment income......................................... 8,746,758 14,333,683
------------ -------------
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments....................... 287 3,711
----------- -------------
Increase in net assets from operations........................ $ 8,747,045 $ 14,337,394
=========== =============
</TABLE>
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See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS
Money Market Portfolio U.S. Treasury Portfolio
----------------------------------- -------------------------------------
November 29, 1995
Year Year Year (Commencement of
Ended Ended Ended Operations) to
March 31, March 31, March 31, March 31,
1997 1996 1997 1996
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Operations:
Net investment income.................. $ 8,746,758 $ 4,255,909 $ 14,333,683 $ 4,543,322
Net realized gain (loss) on investments 287 847 3,711 --
------------- ------------- -------------- --------------
Increase in net assets from operations. 8,747,045 4,256,756 14,337,394 4,543,322
Dividends to shareholders:
Net investment income
Class A.............................. ( 581,612) ( 276) ( 14,207,747) ( 4,543,322)
Class B.............................. ( 8,165,146) ( 4,255,633) ( 125,936) --
Net realized gain on investments
Class A.............................. -- -- ( 3,638) --
Class B.............................. ( 287) ( 847) ( 73) --
Capital share transactions (Note 3):
Class A.............................. 38,214,898 5,261 18,542,509 291,747,446
Class B.............................. 31,243,369 91,424,998 7,799,223 --
------------- ------------- -------------- --------------
Total increase (decrease)............ 69,458,267 91,430,259 26,341,732 291,747,446
Net assets:
Beginning of period.................. 127,287,025 35,856,766 291,747,446 -0-
------------- ------------- -------------- --------------
End of period........................ $ 196,745,292 $ 127,287,025 $ 318,089,178 $ 291,747,446
============= ============= ============== ==============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
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 offers investors three managed portfolios of money market
instruments: U.S. Treasury Portfolio, Money Market Portfolio and Municipal
Portfolio. Presently only the Money Market Portfolio and U.S. Treasury Portfolio
have 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. Additionally, each Portfolio may allocate
among its classes certain expenses, to the extent allowable to specific classes,
including transfer agent fees, government registration fees, certain printing
and postage costs, and administrative and legal expenses. Class specific
expenses of the Fund were limited to distribution fees and minor transfer agent
expenses. In all other respects, the Class A and Class B shares represent the
same interest in the income and assets of each respective Portfolio.
Distribution of Class A shares of the Money Market Portfolio commenced April 6,
1995. All Portfolio shares outstanding before April 6, 1995 were designated as
Class B shares. Distribution of Class B shares of the U.S. Treasury Portfolio
commenced November 18, 1996. All Portfolio shares outstanding before November
18, 1996 were designated as Class A 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) Use of Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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 increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
e) 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.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
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 .12% of the Portfolio's average daily net assets. Prior to August
30, 1996, the investment management fee was 0.08%.
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.
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% per annum of each Portfolio's average daily net assets.
The Manager has voluntarily agreed to waive its management and administrative
services fees in whole or in part and reimburse each Portfolio its operating
expenses to the extent that (i) such Portfolio's Class A shares total operating
expenses exceed .40%, .425% and .45% of the Class A shares average daily net
assets during the first, second, and third fiscal years of the Fund,
respectively, and (ii) such Portfolio's Class B shares total operating expenses
exceed .15%, .175%, and .20% of the Class B shares average daily net assets
during the first, second, and third fiscal years of the Fund.
During the year ended March 31, 1997, the Manager voluntarily waived investment
management fees and administration fees of $92,518 and $49,717, respectively,
for the Money Market Portfolio and $68,224 and $87,965, respectively, for the
U.S. Treasury Portfolio.
Fees are paid to Trustees 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 "Shareholder servicing
and related shareholder expenses" are fees of $31,083 and $53,753 paid to Reich
& Tang Services, L.P., an affiliate of the Manager, as servicing agent for the
Fund, for the Money Market Portfolio and U.S Treasury Portfolio, respectively.
Included in the Statements of Operations under the caption "Custodian expenses"
are expense offsets of $13,201 and $18,952 for the Money Market Portfolio and
U.S. Treasury Portfolio, respectively.
3. Transactions in Shares of Beneficial Interest.
At March 31, 1997, an unlimited number of shares of beneficial interest were
authorized and capital paid in for the Money Market Portfolio and the U.S.
Treasury Portfolio amounted to $196,745,292 and $318,089,178, respectively.
Transactions in shares of beneficial interest, all at $1.00 per share, were as
follows:
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
<TABLE>
<CAPTION>
3. Transactions in Shares of Beneficial Interest. (Continued)
Money Market Portfolio
------------------------------------------------
April 6, 1995
Year Ended (Commencement of Sales) to
March 31, 1997 March 31, 1996
-------------- --------------
CLASS A
- -------
<S> <C> <C>
Sold.................................... $ 225,303,821 $ 5,009
Issued on reinvestment of dividends..... 511,560 252
Redeemed................................ ( 187,600,483) ( -- )
-------------- --------------
Net increase (decrease)................. 38,214,898 5,261
============== ==============
<CAPTION>
Year Ended Year Ended
March 31, 1997 March 31, 1996
CLASS B -------------- --------------
- -------
<S> <C> <C>
Sold.................................... $ 585,658,049 $ 553,221,220
Issued on reinvestment of dividends..... 6,523,737 2,877,254
Redeemed................................ ( 560,938,417) ( 464,673,476)
-------------- --------------
Net increase (decrease)................. 31,243,369 91,424,998
============== ==============
<CAPTION>
U.S. Treasury Portfolio
------------------------------------------------
November 29, 1995
Year Ended (Commencement of Operations) to
March 31, 1997 March 31, 1996
-------------- --------------
CLASS A
- -------
<S> <C> <C>
Sold.................................... $ 566,923,016 $ 439,583,631
Issued on reinvestment of dividends..... 14,118,326 4,016,345
Redeemed................................ ( 562,498,833) ( 151,852,530)
-------------- --------------
Net increase (decrease)................. 18,542,509 291,747,446
============== ==============
<CAPTION>
November 18, 1996
(Commencement of Sales) to
March 31, 1997
--------------
CLASS B
- -------
<S> <C>
Sold.................................... $ 9,174,613
Issued on reinvestment of dividends..... 126,008
Redeemed................................ ( 1,501,398)
--------------
Net increase (decrease)................. 7,799,223
==============
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
4. Selected Financial Information.
Money Market Portfolio
----------------------------------------------------
For the Year April 6, 1995
Ended (Commencement of Sales) to
March 31, 1997 March 31, 1996
--------------- --------------
CLASS A
- -------
<S> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.............. $ 1.00 $ 1.00
--------------- --------------
Income from investment operations:
Net investment income........................... 0.050 0.054
Less distributions:
Dividends from net investment income............ ( 0.050) (0.054)
--------------- --------------
Net asset value, end of period.................... $ 1.00 $ 1.00
=============== ==============
Total Return...................................... 5.16% 5.58%*
Ratios/Supplemental Data
Net assets, end of period (000)................... $ 38,220 $ 5
Ratios to average net assets:
Expenses (net of fees waived and reimbursed) 0.42%+ 0.41%*+
Net investment income........................... 5.07% 5.46%*
Expenses paid indirectly.......................... 0.01% 0.04%
Management and administration fees waived......... 0.09% 0.13%
Expenses reimbursed............................... --- 0.03%
<CAPTION>
Money Market Portfolio
--------------------------------------------------------------------------
For the Year Ended March 31, April 14, 1994
---------------------------------------- (Commencement of Operations)
CLASS B 1997 1996 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........................... 0.053 0.057 0.045
Less distributions:
Dividends from net investment income......... ... ( 0.053) ( 0.057) ( 0.045)
--------------- -------------- --------------
Net asset value, end of period.................... $ 1.00 $ 1.00 $1.00
=============== ============== ==============
Total Return...................................... 5.42% 5.85% 5.16%*
Ratios/Supplemental Data
Net assets, end of period (000)................... $ 158,525 $ 127,282 $ 35,857
Ratios to average net assets:
Expenses (net of fees waived and reimbursed) 0.17%+ 0.16%+ 0.02%*
Net investment income........................... 5.29% 5.64% 5.14%*
Expenses paid indirectly.......................... 0.01% 0.04% ---
Management and administration fees waived......... 0.09% 0.13% 0.13%
Expenses reimbursed............................... --- 0.03% 0.25%
* Annualized
+ Includes expenses paid indirectly.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
<TABLE>
<CAPTION>
4. Selected Financial Information. (Continued)
U.S. Treasury Portfolio
-------------------------------------------------------
For the Year November 29, 1995
Ended (Commencement of Operations) to
March 31, 1997 March 31, 1996
--------------- --------------
CLASS A
- -------
<S> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............. $ 1.00 $ 1.00
Income from investment operations: -------------- --------------
Net investment income.......................... 0.049 0.017
Less distributions:
Dividends from net investment income........... ( 0.049) ( 0.017)
-------------- --------------
Net asset value, end of period................... $ 1.00 $ 1.00
============== ==============
Total Return..................................... 5.00% 5.18%*
Ratios/Supplemental Data
Net assets, end of period (000).................. $ 310,290 $ 291,747
Ratios to average net assets:
Expenses (net of fees waived).................. 0.42%+ 0.43%*
Net investment income.......................... 4.89% 5.07%*
Expenses paid indirectly......................... 0.01% --
Management and administration fees waived........ 0.05% 0.08%
<CAPTION>
U.S. Treasury Portfolio
-------------------------------------------------------
November 18, 1996
CLASS B (Commencement of Sales) to
- ------- March 31, 1997
---------------
<S> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.............. $ 1.00
Income from investment operations: ---------------
Net investment income........................... 0.019
Less distributions:
Dividends from net investment income............ ( 0.019)
---------------
Net asset value, end of period.................... $ 1.00
===============
Total Return...................................... 5.27%*
Ratios/Supplemental Data
Net assets, end of period (000)................... $ 7,799
Ratios to average net assets:
Expenses (net of fees waived)................... 0.17%*+
Net investment income........................... 5.14%*
Expenses paid indirectly.......................... 0.01%
Management and administration fees waived......... 0.05%
* Annualized
+ Includes expenses paid indirectly.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
INDEPENDENT AUDITOR'S REPORT
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The Board of Trustees and Shareholders
Institutional Daily Income Fund
We have audited the accompanying statements of net assets of the Money Market
Portfolio and the U.S. Treasury Portfolio of Institutional Daily Income Fund as
of March 31, 1997, and the related statements of operations, the statements of
changes in net assets, and the selected financial information for each of the
periods indicated in the accompanying financial statements. 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 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 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, 1997, 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 audits provide 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 the Money Market Portfolio and the U.S. Treasury Portfolio of
Institutional Daily Income Fund as of March 31, 1997, the results of its
operations, the changes in its net assets and the selected financial information
for the periods indicated, in conformity with generally accepted accounting
principles.
\s\McGladrey & Pullen, LLP
April 25, 1997
New York, New York
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INSTITUTIONAL
DAILY
INCOME FUND
Annual Report
March 31, 1997
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This report is submitted for the general
information of the shareholders of the Fund. It is
not authorized for distribution to prospective
investors in the Fund unless preceded or
accompanied by an effective prospectus, which
includes information regarding the Fund's
objectives and policies, experience of its
management, marketability of shares, and other
information.
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Institutional Daily Income Fund
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services L.P.
600 Fifth Avenue
New York, New York 10020
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