<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
DAILY INCOME FUND 212-830-5200
================================================================================
Dear Shareholder,
We are pleased to present the semi-annual report of Institutional Daily Income
Fund for the period April 1, 1998 through September 30, 1998.
The Fund's Money Market Portfolio had 74 shareholders and net assets of
$451,588,923 as of September 30, 1998. The U.S. Treasury Portfolio had 26
shareholders and net assets of $800,969,769 as of September 30, 1998.
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, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Bankers Acceptance (3.31%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Citibank, N.A. 10/30/98 5.58% $ 14,932,937
------------ ------------
15,000,000 Total Bankers Acceptance 14,932,937
------------ ------------
<CAPTION>
Commercial Paper (9.90%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Centric Capital Corporation 01/13/99 5.47% $ 14,767,300
15,000,000 Paine Webber Group 10/14/98 5.66 14,969,504
15,000,000 Sigma Finance Corporation 10/08/98 5.62 14,984,046
------------ ------------
45,000,000 Total Commercial Paper 44,720,850
------------ ------------
<CAPTION>
Letter of Credit Commercial Paper (18.50%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,000,000 Banca Serfin S.A.
LOC Barclays Bank 08/26/99 5.40% $ 9,531,175
15,000,000 Banco Bozano Simonsen, S.A.
LOC Banco Santander 06/18/99 5.81 14,404,167
15,000,000 Banco De Galicia Y Buenos Aires S.A.
LOC Bayerische Vereinsbank, A.G. 02/24/99 5.37 14,681,233
15,000,000 Hyundai Motor Finance Co.
LOC Bank of America 10/02/98 5.58 14,997,679
15,000,000 Louis Dreyfus Corporation
LOC ABN AMRO 10/08/98 5.57 14,983,842
15,000,000 Transportadora de Gas del Sur, S.A.
LOC Dresdner Bank 10/20/98 5.60 14,956,300
------------ ------------
85,000,000 Total Letter of Credit Commercial Paper 83,554,396
------------ ------------
<CAPTION>
Loan Participations (3.32%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Equitable Life Assurance Society 03/22/99 5.72% $ 15,000,000
------------ ------------
15,000,000 Total Loan Participations 15,000,000
------------ ------------
<CAPTION>
Master Notes (2.22%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 5,000,000 The Goldman Sachs Group L.P. 01/22/99 5.54% $ 5,000,000
5,000,000 The Goldman Sachs Group L.P. 10/13/99 5.68 5,000,000
------------ ------------
10,000,000 Total Master Notes 10,000,000
------------ ------------
<CAPTION>
Medium Term Notes (3.32%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Structured Enhanced Return Trust STEERS 1998 - Series A-40
MBIA Insured 01/15/99 5.70% $ 15,000,000
------------ ------------
15,000,000 Total Medium Term Notes 15,000,000
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (27.34%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 4,055,000 Alpine Capital Investments L.L.C.
LOC First of America 09/15/27 (a) 5.60% $ 4,055,000
4,225,000 American West Michigan Properties
LOC Comerica Bank 12/01/25 (a) 5.60 4,225,000
13,400,000 Anaheim County, CA
LOC Credit Suisse First Boston 11/03/98 (a) 5.58 13,400,000
848,000 Antonio Sofo & Son Importing Co.
LOC PNC Bank, N.A. 12/31/09 (a) 5.70 848,000
1,705,000 Bardstown, KY IDRB (R & J Tower Corporation Project)
LOC Comerica Bank 06/01/24 (a) 5.60 1,705,000
920,000 City of Colorado Springs Adj. Rate Taxable/Convertible Bonds
(Goodwill Industries) - 1997B
LOC Bank One Ohio 02/01/07 (a) 5.64 920,000
1,100,000 Crystal Enterprises Inc.
LOC Old Kent Bank & Trust Co. 06/01/28 (a) 5.60 1,100,000
3,250,000 Delta Capital L.L.C.
LOC First Michigan Bank 10/01/16 (a) 5.60 3,250,000
930,000 Delta Capital L.L.C. Series A
LOC First Michigan Bank 01/01/26 (a) 5.60 930,000
2,085,000 Dickenson Press, Inc. - Series 1997
LOC First Michigan Bank 01/01/27 (a) 5.60 2,085,000
3,400,000 Emory University Project Dekalb County, GA 11/01/27 (a) 5.30 3,400,000
3,500,000 Emory University Project Dekalb County, GA 12/02/98 (b) 5.55 3,500,000
1,350,000 GCG Portage L.L.C.
LOC Old Kent Bank & Trust Co. 02/01/26 (a) 5.60 1,350,000
965,000 Hendricks County (Heartland Crossing)
LOC Bank One Ohio 01/01/22 (a) 5.80 965,000
2,180,000 Hunter's Square, Inc. Project - Series 1998
LOC National City Bank 10/01/16 (a) 5.63 2,180,000
6,620,000 Jake Sweeney Automotive, Inc.
LOC Star Bank, N.A. 04/01/05 (a) 5.64 6,620,000
10,000,000 John Hancock Mutual Life Insurance Company 08/19/00 (a) 5.77 10,000,000
925,000 LRV Enterprises, L.L.C.
LOC First of America 09/01/21 (a) 5.60 925,000
5,000,000 Long Lane Master Trust III
LOC BankBoston 11/02/98 (b) 5.74 5,000,000
8,000,000 Long Lane Master Trust III
LOC BankBoston 04/30/99 (b) 5.72 8,000,000
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,300,000 Mayfair Village Retirement Center, Inc., KY
(Variable Rate Term Notes) - Series 1995
LOC PNC Bank, N.A. 05/01/00 (a) 5.52% $ 3,300,000
5,855,000 Medic Funding Corporation
Federal Home Loan Bank 05/01/27 (a) 5.64 5,855,000
4,250,000 Mississippi Business Finance Corporation IDRB
(ABTCO, Inc. Project) - Series 1997B
LOC First Union National Bank 04/01/22 (a) 5.60 4,250,000
1,655,000 Mississippi Business Finance Corporation IDRB
(Howard Industries, Inc.) - Series 1995
LOC National Bank of Detroit 06/01/10 (a) 5.65 1,655,000
14,000,000 New York City, NY GO Bonds
FGIC Insured 11/19/98 (b) 5.74 14,000,000
1,500,000 Pennsylvania EDFA (C & D Charter Power System)
Taxable Development RB - Series 1991B2
LOC PNC Bank, N.A. 12/01/00 (a) 5.60 1,500,000
800,000 Pennsylvania EDFA (Oglevee Ltd. Project)
LOC PNC Bank, N.A. 08/01/02 (a) 5.60 800,000
800,000 Pennsylvania EDFA
(Philadelphia Business & Technical Center Project) - Series A1
LOC PNC Bank, N.A. 04/01/04 (a) 5.60 800,000
900,000 Pennsylvania EDFA
(Quality Foods L.P. Project) Taxable Development RB - Series 1995D
LOC PNC Bank, N.A. 12/01/14 (a) 5.60 900,000
800,000 Pennsylvania EDFA (Southpointe Rink Association Project)
Taxable Development RB - Series 1994D7
LOC PNC Bank, N.A. 12/01/09 (a) 5.60 800,000
2,500,000 Pennsylvania EDFA
(West 914 Incorporation Project) Taxable Development RB - Series 1991A
LOC PNC Bank, N.A. 05/01/21 (a) 5.60 2,500,000
1,275,000 SDR Capital, L.L.C.
LOC First Michigan Bank 10/15/01 (a) 5.60 1,275,000
2,930,000 State of Connecticut Resource Recovery Authority
LOC National Westminster Bank PLC 11/15/98 (b) 5.95 2,930,000
1,000,000 State of Tennessee Adjustable Taxable BAN - Series B 07/02/01 (a) 5.45 1,000,000
2,000,000 State of Tennessee Adjustable Taxable BAN - Series D 07/02/01 (a) 5.45 2,000,000
1,990,000 Trendway Corporation
LOC Michigan National Bank 12/01/26 (a) 5.60 1,990,000
2,000,000 Woodlawn Ohio For Southland Properties
LOC Bank of Montreal 06/01/08 (a) 5.62 2,000,000
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,455,000 Zylstra Funding, Inc
LOC First Michigan Bank 06/01/27 (a) 5.60% $ 1,455,000
------------ ------------
123,468,000 Total Other Notes 123,468,000
------------ ------------
<CAPTION>
Repurchase Agreements, Overnight (21.48%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 97,000,000 Morgan Stanley & Co., Incorporated (Collateralized by 187,564,714
GNMA, 5.000% to 7.000%, due 11/20/24 to 12/20/27) 10/01/98 5.65% $ 97,000,000
------------ ------------
97,000,000 Total Repurchase Agreements, Overnight 97,000,000
------------ ------------
<CAPTION>
Time Deposits (7.09%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,000,000 PNC Bank, N.A. 10/01/98 5.87% $ 10,000,000
22,000,000 Westdeutsche Landesbank 10/01/98 5.87 22,000,000
------------ ------------
32,000,000 Total Time Deposits 32,000,000
------------ ------------
<CAPTION>
Yankee Certificate of Deposit (3.32%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Canadian Imperial Bank of Commerce 11/17/98 5.46% $ 15,000,000
------------ ------------
15,000,000 Total Yankee Certificate of Deposit 15,000,000
------------ ------------
Total Investments (99.80%) (Cost $450,676,183+) 450,676,183
Cash and Other Assets Net of Liabilities (0.20%) 912,740
------------
Net Assets (100.00%) $451,588,923
============
Net Asset Value, offering and redemption price per share:
Class A, 194,116,099 shares outstanding (Note 3) $ 1.00
============
Class B, 257,472,824 shares outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
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> <C> <C> <C> <C>
BAN = Bond Anticipation Note IDRB = Industrial Development Revenue Bond
EDFA = Economic Development Finance Authority RB = Revenue Bond
GO = General Obligation
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements (48.81%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 85,000,000 Canadian Imperial Bank of Commerce (Collateralized by $100,780,249,
GNMA, 5.500% to 7.000%, due 10/20/17 to 01/20/28) 10/01/98 5.65% $ 85,000,000
85,000,000 Morgan (J.P.) Securities, Inc. (Collateralized by $337,163,406,
GNMA, 9.000%, due 06/15/16 to 10/15/27) 10/01/98 5.65 85,000,000
76,000,000 Morgan Stanley & Company, Inc. (Collateralized by $122,411,862,
GNMA, 4.500% to 7.000%, due 05/20/24 to 04/20/28) 10/01/98 5.65 76,000,000
125,000,000 The Goldman Sachs Group L.P. (Collateralized by $160,802,182,
GNMA, 6.125% to 7.000%, due 03/15/27 to 09/16/27) 10/01/98 5.60 125,000,000
20,000,000 The Goldman Sachs Group L.P. (Collateralized by $20,811,439,
GNMA, 5.000%, due 10/20/27) 10/14/98 5.53 20,000,000
------------ ------------
391,000,000 Total Repurchase Agreements 391,000,000
------------ ------------
<CAPTION>
U.S. Government Obligations (50.92%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$113,339,000 U.S. Treasury Bills 10/01/98 1.00% $113,339,000
60,000,000 U.S. Treasury Bills 11/12/98 3.82 59,734,000
100,000,000 U.S. Treasury Bills 12/24/98 4.41 98,981,500
25,000,000 U.S. Treasury Notes, 7.12% 10/15/98 4.67 25,021,400
5,000,000 U.S. Treasury Notes, 5.87% 10/31/98 5.32 5,001,148
5,000,000 U.S. Treasury Notes, 5.50% 11/15/98 5.52 4,998,997
5,000,000 U.S. Treasury Notes, 5.12% 11/30/98 5.58 4,995,246
5,000,000 U.S. Treasury Notes, 5.62% 11/30/98 5.58 4,999,860
20,000,000 U.S. Treasury Notes, 5.87% 01/31/99 5.35 20,023,968
20,000,000 U.S. Treasury Notes, 6.37% 04/30/99 5.27 20,089,994
15,000,000 U.S. Treasury Notes, 6.00% 06/30/99 5.26 15,049,564
10,000,000 U.S. Treasury Notes, 6.37% 07/15/99 5.24 10,064,229
25,000,000 U.S. Treasury Notes, 7.12% 09/30/99 4.69 25,530,858
------------ ------------
408,339,000 Total U.S. Government Obligations 407,829,764
------------ ------------
Total Investments (99.73%) (Cost $798,829,764+) 798,829,764
Cash and Other Assets, Net of Liabilities (0.27%) 2,140,005
------------
Net Assets (100.00%) $800,969,769
============
Net Asset Value offering and redemption price per share:
Class A Shares, 772,479,884 shares outstanding (Note 3) $ 1.00
============
Class B Shares, 28,489,885 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
SIX MONTHS ENDED SEPTEMBER 30,1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Money Market U.S. Treasury
Portfolio Portfolio
---------------- ----------------
INVESTMENT INCOME
Income:
<S> <C> <C>
Interest................................................... $ 10,439,063 $ 15,928,654
---------------- ----------------
Expenses: (Note 2)
Investment management fee.................................. 221,372 344,556
Administration fee......................................... 92,238 143,565
Distribution fee (Class A)................................. 149,677 702,167
Custodian expenses......................................... 18,925 29,905
Shareholder servicing and related shareholder expenses..... 39,600 63,550
Legal, compliance and filing fees.......................... 47,848 96,807
Audit and accounting....................................... 39,521 45,205
Trustees' fees............................................. 3,012 3,012
Amortization of organization costs......................... 5,150 --
Miscellaneous.............................................. 7,830 11,474
---------------- ----------------
Total expenses........................................ 625,173 1,440,241
Less:
Fees waived (Note 2).................................... ( 103,971) ( 160,212)
Expenses paid indirectly ............................... ( 2,572) ( 4,157)
---------------- ----------------
Net expenses.......................................... 518,630 1,275,872
---------------- ----------------
Net investment income.......................................... 9,920,433 14,652,782
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments........................ 2,250 -0-
---------------- ----------------
Increase in net assets from operations......................... $ 9,922,683 $ 14,652,782
================ ================
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Money Market Portfolio U.S. Treasury Portfolio
----------------------------------- ------------------------------------
Six Months Six Months
Ended Year Ended Year
September 30, 1998 Ended September 30, 1998 Ended
(Unaudited) March 31, 1998 (Unaudited) March 31, 1998
--------- -------------- --------- --------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
<S> <C> <C> <C> <C>
Net investment income................... $ 9,920,433 $ 15,790,068 $ 14,652,782 $ 19,993,964
Net realized gain (loss) on investments. 2,250 3,299 -0- 11,744
------------- ------------- ------------- -------------
Increase in net assets from operations.. 9,922,683 15,793,367 14,652,782 20,005,708
Dividends to shareholders:
Net investment income
Class A............................... ( 3,118,570) ( 3,807,170) ( 14,318,701) ( 19,599,207)
Class B............................... ( 6,801,863) ( 11,982,898) ( 334,081) ( 394,757)
Net realized gain on investments
Class A............................... ( 730) ( 1,031) -- ( 11,553)
Class B............................... ( 1,520) ( 2,268) -- ( 191)
Capital share transactions (Note 3):
Class A............................... 85,458,977 70,436,963 305,107,609 157,082,320
Class B............................... 29,580,004 69,367,687 21,657,293 ( 966,631)
------------- ------------- ------------- -------------
Total increase (decrease)............. 115,038,981 139,804,650 326,764,902 156,115,689
Net assets:
Beginning of period................... 336,549,942 196,745,292 474,204,867 318,089,178
------------- ------------- ------------- -------------
End of period......................... $ 451,588,923 $ 336,549,942 $ 800,969,769 $ 474,204,867
============= ============= ============= =============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
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. 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>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
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.
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 the Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors, Inc.
(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.
During the period ended September 30, 1998, the Manager voluntarily waived
investment management fees and administration fees of $48,628 and $55,343,
respectively, for the Money Market Portfolio and $74,073 and $86,139,
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 for each Portfolio.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees of $36,792 and $57,301 paid to Reich
& Tang Services, Inc., 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 captions "Custodian expenses"
are expense offsets of $2,572 and $4,157 for the Money Market Portfolio and U.S.
Treasury Portfolio, respectively.
3. Transactions in Shares of Beneficial Interest.
At September 30, 1998, 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 $451,588,923 and $800,969,769, respectively.
Transactions in shares of beneficial interest, all at $1.00 per share, were as
follows:
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
3. Transactions in Shares of Beneficial Interest. (Continued)
Money Market Portfolio
------------------------------------------
Six Months Ended Year Ended
September 30, 1998 March 31, 1998
------------------ --------------
Class A
-------
<S> <C> <C>
Sold...................................... $ 561,388,972 $ 814,098,188
Issued on reinvestment of dividends....... 2,984,649 3,558,103
Redeemed.................................. ( 478,914,644) ( 747,219,328)
------------- -------------
Net increase (decrease)................... 85,458,977 70,436,963
============= =============
Six Months Ended Year Ended
September 30, 1998 March 31, 1998
------------------ --------------
<CAPTION>
Class B
-------
<S> <C> <C>
Sold...................................... $ 587,954,414 $1,041,115,865
Issued on reinvestment of dividends....... 6,529,114 11,473,035
Redeemed.................................. ( 564,903,524) ( 983,221,213)
------------- -------------
Net increase (decrease)................... 29,580,004 69,367,687
============= =============
U.S. Treasury Portfolio
------------------------------------------
Six Months Ended Year Ended
September 30, 1998 March 31, 1998
------------------ --------------
<CAPTION>
Class A
-------
<S> <C> <C>
Sold...................................... $1,035,527,150 $ 967,765,949
Issued on reinvestment of dividends....... 13,574,926 19,073,209
Redeemed.................................. ( 743,994,467) ( 829,756,838)
------------- -------------
Net increase (decrease)................... 305,107,609 157,082,320
============= =============
Six Months Ended Year Ended
September 30, 1998 March 31, 1998
------------------ --------------
<CAPTION>
Class B
-------
<S> <C> <C>
Sold...................................... $ 66,167,737 $ 24,810,119
Issued on reinvestment of dividends....... 302,460 388,146
Redeemed.................................. ( 44,812,904) ( 26,164,896)
------------- -------------
Net increase (decrease)................... 21,657,293 ( 966,631)
============= =============
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
4. Financial Highlights.
Money Market Portfolio
---------------------------------------------------------------------------------
Six Months April 6, 1995
CLASS A Ended For the Year Ended March 31, (Commencement of Sales) to
------- ----------------------------
September 30, 1998 1998 1997 March 31, 1996
------------------ ---------- ---------- --------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.026 0.053 0.050 0.054
Less distributions:
Dividends from net investment income........ ( 0.026) ( 0.053) ( 0.050) ( 0.054)
--------- --------- --------- ---------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= =========
Total Return.................................... 5.34%* 5.38% 5.16% 5.58%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 194,116 $ 108,657 $ 38,220 $ 5
Ratios to average net assets:
Expenses (net of fees waived and reimbursed) 0.45%*+ 0.45%+ 0.42%+ 0.41%*+
Net investment income....................... 5.21%* 5.25% 5.07% 5.46%*
Expenses paid indirectly.................... 0.00% 0.00% 0.01% 0.04%*
Management and administration fees waived... 0.06%* 0.07% 0.09% 0.13%*
Expenses reimbursed......................... 0.00% 0.00% 0.00% 0.03%*
<CAPTION>
Money Market Portfolio
---------------------------------------------------------------------------------
CLASS B Six Months For the Year Ended March 31, April 14, 1994
Ended --------------------------------- (Commencement of Sales) to
September 30, 1998 1998 1997 1996 March 31, 1995
------------------ -------- -------- -------- -----------------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.027 0.055 0.053 0.057 0.045
Less distributions:
Dividends from net investment income........ ( 0.027) ( 0.055) ( 0.053) ( 0.057) ( 0.045)
--------- --------- --------- --------- ---------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total Return.................................... 5.60%* 5.64% 5.42% 5.85% 5.16%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 257,473 $ 227,893 $ 158,525 $ 127,282 $ 35,857
Ratios to average net assets:
Expenses (net of fees waived and reimbursed) 0.20%*+ 0.20%+ 0.17%+ 0.16%+ 0.02%*
Net investment income....................... 5.46%* 5.50% 5.29% 5.64% 5.14%*
Expenses paid indirectly.................... 0.00% 0.00% 0.01% 0.04% 0.00%*
Management and administration fees waived... 0.06%* 0.07% 0.09% 0.13% 0.13%*
Expenses reimbursed......................... 0.00% 0.00% 0.00% 0.03% 0.25%*
* Annualized
+ Includes expenses paid indirectly.
</TABLE>
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<PAGE>
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<TABLE>
<CAPTION>
4. Financial Highlights. (Continued)
U.S. Treasury Portfolio
---------------------------------------------------------------------------------
CLASS A Six Months For the Year Ended March 31, November 29, 1995
------- Ended ---------------------------- (Commencement of Sales) to
September 30, 1998 1998 1997 March 31, 1996
------------------ ---------- ---------- --------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income....................... 0.026 0.051 0.049 0.017
Less distributions:
Dividends from net investment income........ ( 0.026) ( 0.051) ( 0.049) ( 0.017)
--------- --------- --------- ---------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= =========
Total Return.................................... 5.22%* 5.24% 5.00% 5.18%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 772,480 $ 467,372 $ 310,290 $ 291,747
Ratios to average net assets:
Expenses (net of fees waived)............... 0.45%*+ 0.42%+ 0.42%+ 0.43%*
Net investment income....................... 5.10%* 5.12% 4.89% 5.07%*
Expenses paid indirectly.................... 0.00% 0.00% 0.01% 0.00%
Management and administration fees waived... 0.06%* 0.07% 0.05% 0.08%*
<CAPTION>
U.S. Treasury Portfolio
---------------------------------------------------------------------------------
Six Months For the Year November 18, 1996
CLASS B Ended Ended (Commencement of Sales) to
- ------- September 30, 1998 March 31, 1998 March 31, 1997
------------------ -------------- --------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C>
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income....................... 0.027 0.054 0.019
Less distributions:
Dividends from net investment income........ ( 0.027) ( 0.054) ( 0.019)
--------- --------- ---------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return.................................... 5.49%* 5.50% 5.27%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 28,490 $ 6,833 $ 7,799
Ratios to average net assets:
Expenses (net of fees waived)............... 0.20%*+ 0.17%+ 0.17%*+
Net investment income....................... 5.33%* 5.37% 5.14%*
Expenses paid indirectly.................... 0.00% 0.00% 0.01%*
Management and administration fees waived... 0.06%* 0.07% 0.05%*
* Annualized
+ Includes expenses paid indirectly.
</TABLE>
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[This Page Intentionally Left Blank.]
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<PAGE>
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INSTITUTIONAL
DAILY
INCOME FUND
Semi-Annual Report
September 30, 1998
(Unaudited)
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<PAGE>
- --------------------------------------------------------------------------------
- -----------------------------------------------------
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.
- ------------------------------------------------------
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
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
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<PAGE>
