<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, 1999 through September 30, 1999.
The Fund's Money Market Portfolio had 144 shareholders and net assets of
$642,404,148 as of September 30, 1999. The U.S. Treasury Portfolio had 59
shareholders and net assets of $743,428,423 as of September 30, 1999.
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, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Commercial Paper (30.29%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 30,000,000 Banco Santander 10/01/99 5.35% $ 30,000,000
18,000,000 Island Finance Puerto Rico, Inc. 12/09/99 5.44 17,815,425
20,000,000 J.P. Morgan Securities Inc. 10/15/99 4.92 19,962,667
10,000,000 Long Lane Master Trust IV - Series A 11/10/99 5.01 9,945,778
8,516,000 Long Lane Master Trust IV - Series A 04/28/00 5.21 8,270,101
19,000,000 Market Street Funding 10/01/99 5.68 19,000,000
15,000,000 Market Street Funding 10/21/99 5.39 14,955,333
15,000,000 Receivables Capital Corporation 10/12/99 5.35 14,975,708
10,000,000 Receivables Capital Corporation 01/14/00 5.94 9,830,833
25,000,000 Sigma Finance Corporation 10/26/99 5.26 24,909,896
25,000,000 Special Purpose Accounts Receivable Co-Operation 10/21/99 5.36 24,926,389
------------ ------------
195,516,000 Total Commercial Paper 194,592,130
------------ ------------
<CAPTION>
Commerical Paper - Foreign (3.88%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 25,000,000 Ford Credit Europe PLC 10/20/99 5.19% $ 24,932,444
------------ ------------
25,000,000 Total Commercial Paper - Foreign 24,932,444
------------ ------------
<CAPTION>
Letter of Credit Commercial Paper (15.45%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Accor SA
LOC Banque Nationale de Paris 10/27/99 5.38% $ 19,922,722
15,000,000 Banca Serfin S.A.
LOC Barclays Bank PLC 10/21/99 5.39 14,955,250
15,000,000 Banco Itau SA
LOC Barclays Bank PLC 05/26/00 6.04 14,426,817
20,000,000 Dixie Overseas, Ltd.
LOC Credit Agricole 10/08/99 5.35 19,979,272
30,000,000 ED&F Man Finance
LOC Rabobank Nederland 10/07/99 5.37 29,973,300
------------ ------------
100,000,000 Total Letter of Credit Commercial Paper 99,257,361
------------ ------------
<CAPTION>
Loan Participation (1.56%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,000,000 Equitable Life Assurance Society 03/20/00 5.56% $ 10,000,000
------------ ------------
10,000,000 Total Loan Participation 10,000,000
------------ ------------
<CAPTION>
Master Notes (3.11%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,000,000 GMAC Mortgage Corporation 10/01/99 5.34% $ 10,000,000
5,000,000 The Goldman Sachs Group L.P. 10/19/99 5.36 5,000,000
5,000,000 The Goldman Sachs Group L.P. 10/13/00 5.26 5,000,000
------------ ------------
20,000,000 Total Master Notes 20,000,000
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Medium Term Notes (4.91%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 13,659,299 Conti Mortgage Home Equity
Insured by MBIA Insurance Corp. 01/18/00 5.49% $ 13,659,299
7,869,296 Structured Enhanced Return Trust STEERS 1998 - Series A-42
Insured by MBIA Insurance Corp. 08/25/00 5.63 7,869,296
10,000,000 Syndicated Loan TR Ser 1999-3 06/15/00 5.52 10,000,000
------------ ------------
31,528,595 Total Medium Term Notes 31,528,595
------------ ------------
<CAPTION>
Other Notes (27.82%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,940,000 Alpine Capital Investments L.L.C.
LOC First of America 09/15/27 (a) 5.58% $ 3,940,000
13,400,000 Anaheim County, CA
LOC Credit Suisse First Boston 10/18/99 (b) 5.45 13,400,000
1,475,000 Austin Printing Co. & Klein Austin
LOC Bank One 08/01/14 (a) 5.41 1,475,000
1,750,000 Automated Packaging Systems
LOC National City Bank 10/01/08 (a) 5.41 1,750,000
1,705,000 Bardstown, KY IDRB (R & J Tower Corporation Project)
LOC Comerica Bank 06/01/24 (a) 5.48 1,705,000
1,000,000 Burgess & Niple Limited
LOC National City Bank 09/01/14 (a) 5.41 1,000,000
30,000,000 CFM International Inc.
LOC General Electric Company 01/01/10 (a) 5.43 30,000,000
835,000 City of Colorado Springs Adjustable Rate Taxable/Convertible Bonds
(Goodwill Industries) - Series 1997B
LOC Bank One 02/01/07 (a) 5.49 835,000
20,000,000 Comerica Bank 07/13/00 5.37 19,993,825
1,100,000 Crystal Enterprises Inc.
LOC Old Kent Bank & Trust Co. 06/01/28 (a) 5.58 1,100,000
2,000,000 DP Fox Capital, L.L.C.
LOC Michigan National Bank 05/01/28 (a) 5.48 2,000,000
3,600,000 Dekalb County, GA (Emory University Project) 10/07/99 (b) 5.40 3,600,000
3,085,000 Delta Capital L.L.C.
LOC First Michigan Bank 10/01/16 (a) 5.58 3,085,000
830,000 Delta Capital L.L.C. - Series A
LOC First Michigan Bank 01/01/26 (a) 5.58 830,000
1,960,000 Dickenson Press, Inc. - Series 1997
LOC First Michigan Bank 01/01/27 (a) 5.58 1,960,000
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 6,000,000 Douglas County, GA Development Authority
(Abrams Riverside, LLC Project)
LOC Bank of America 11/01/18 (a) 5.45% $ 6,000,000
2,270,000 First Metropolitan Title
LOC Michigan National Bank 05/01/24 (a) 5.58 2,270,000
910,000 Four Development Company
LOC PNC Bank, N.A. 12/31/03 (a) 5.54 910,000
1,325,000 GCG Portage L.L.C.
LOC Old Kent Bank & Trust Co. 02/01/26 (a) 5.58 1,325,000
20,000,000 Goldman Sachs Group L.P. 09/05/00 5.59 20,000,000
965,000 Hendricks County (Heartland Crossing)
LOC Bank One 01/01/22 (a) 5.64 965,000
2,120,000 Hunter's Square, Inc. Project - Series 1998
LOC National City Bank 10/01/16 (a) 5.41 2,120,000
10,000,000 John Hancock Mutual Life Insurance Company 08/19/05 (a) 5.53 10,000,000
1,135,000 JRB Corporation
LOC Old Kent Bank & Trust Co. 07/01/26 (a) 5.58 1,135,000
1,100,000 Labelle Capital Funding
LOC First of America 09/01/26 (a) 5.48 1,100,000
860,000 LRV Enterprises, L.L.C.
LOC First of America 09/01/21 (a) 5.58 860,000
3,000,000 Mayfair Village Retirement Center, Inc., KY
(Variable Rate Term Notes) - Series 1995
LOC PNC Bank, N.A. 05/01/00 (a) 5.37 3,000,000
5,855,000 Medic Funding Corporation
Guaranteed by Federal Home Loan Bank 05/01/27 (a) 5.49 5,855,000
1,355,000 Mercer County, NJ Improvement Authority - Series 99 01/14/00 6.25 1,355,000
1,510,000 Mississippi Business Finance Corporation IDRB
(ABTCO, Inc. Project) - Series 1997B
LOC National Bank of Detroit 06/01/10 (a) 5.45 1,510,000
3,650,000 Mississippi Business Finance Corporation IDRB
(ABTCO, Inc. Project) - Series 1997B
LOC First Union National Bank 04/01/22 (a) 5.45 3,650,000
1,000,000 Mt. Carmel West Medical Office Building
LOC National City Bank 08/01/19 (a) 5.41 1,000,000
</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>
$ 14,000,000 New York City, NY GO Bonds
Insured by FGIC 02/01/00 5.80% $ 14,000,000
1,400,000 Pennsylvania EDFA Taxable Development RB
(C & D Charter Power System) - Series 1989 B2
LOC PNC Bank, N.A. 12/01/00 (a) 5.45 1,400,000
600,000 Pennsylvania EDFA (Oglevee Limited Project)
LOC PNC Bank, N.A. 08/01/02 (a) 5.45 600,000
675,000 Pennsylvania EDFA
(Philadelphia Business & Technical Center Project) - Series A1
LOC PNC Bank, N.A. 04/01/04 (a) 5.45 675,000
800,000 Pennsylvania EDFA Taxable Development RB
(Quality Foods L.P. Project) - Series 1995D
LOC PNC Bank, N.A. 12/01/14 (a) 5.45 800,000
850,000 Pennsylvania EDFA Taxable Development RB
(Southpointe Rink Association Project) - Series 1994D7
LOC PNC Bank, N.A. 12/01/09 (a) 5.45 850,000
2,400,000 Pennsylvania EDFA Taxable Development RB
(West 914 Incorporation Project) - Series 1991A
LOC PNC Bank, N.A. 05/01/21 (a) 5.45 2,400,000
1,260,000 Shepherd Capital, L.L.C.
LOC First of America 09/15/47 (a) 5.58 1,260,000
2,000,000 St. Anns Medical Office Building
LOC National City Bank 11/01/19 (a) 5.41 2,000,000
1,950,000 Trendway Corporation
LOC Michigan National Bank 12/01/26 (a) 5.58 1,950,000
1,106,000 Willingham Properties
LOC PNC Bank, N.A. 12/31/09 (a) 5.54 1,106,000
1,935,000 Zylstra Funding, Inc.
LOC First Michigan Bank 06/01/27 (a) 5.58 1,935,000
------------ ------------
178,711,000 Total Other Notes 178,704,825
------------ ------------
<CAPTION>
Repurchase Agreement, Overnight (1.09%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 7,000,000 Morgan Stanley & Co., Incorporated (Collateralized by GNMA,
6.500% to 10.000% due 11/15/09 to 05/15/29) 10/01/99 5.30% $ 7,000,000
------------ ------------
7,000,000 Total Repurchase Agreement, Overnight 7,000,000
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Time Deposits (7.94%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 25,000,000 Bank One 10/01/99 5.70% $ 25,000,000
26,000,000 Westdeutsche Landesbank 10/01/99 5.71 26,000,000
------------ ------------
51,000,000 Total Time Deposits 51,000,000
------------ ------------
<CAPTION>
Yankee Certificate of Deposit (3.89%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 25,000,000 Unibank 12/23/99 5.44% $ 25,000,566
------------ ------------
25,000,000 Total Yankee Certificate of Deposit 25,000,566
------------ ------------
Total Investments (99.94%) (Cost $642,015,921+) 642,015,921
Cash and Other Assets, Net of Liabilities (0.06%) 388,227
------------
Net Assets (100.00%) $642,404,148
============
Net Asset Value, offering and redemption price per share:
Class A Shares, 360,095,741 shares outstanding (Note 3) $ 1.00
============
Class B Shares, 282,308,407 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>
EDFA = Economic Development Finance Authority LOC = Letter of Credit
FGIC = Financial Guaranty Insurance Company RB = Revenue Bond
GO = General Obligation STEERS = Structured Enhanced Return Trust
IDRB = Industrial Development Revenue Bond
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements, Overnight (47.22%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 55,000,000 CIBC (Collateralized by U.S. Treasury Note, 6.875%, due 05/15/06,
U.S. Treasury Bonds, 8.875% to 13.250%, due 05/15/14 to 02/15/19) 10/01/99 5.25% $ 55,000,000
100,000,000 The Goldman Sachs Group L.P. (Collateralized by FMAC, 2.850% to 6.688%,
due 01/01/00 to 06/17/27, GNMA, 6.500% to 7.000%,
due 07/20/28 to 05/15/29) 10/01/99 5.40 100,000,000
96,000,000 Morgan Stanley & Company, Inc. (Collateralized by GNMA,
4.000% to 7.125%, due 08/20/21 to 08/20/29) 10/01/99 5.35 96,000,000
100,000,000 Salomon Smith Barney (Collateralized by GNMA,
6.000% to 8.000%, due 02/15/28 to 09/15/29) 10/01/99 5.32 100,000,000
------------ ------------
351,000,000 Total Repurchase Agreements, Overnight 351,000,000
------------ ------------
<CAPTION>
U.S. Government Obligations (52.51%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$225,000,000 U.S. Treasury Bills 10/07/99 3.20% $224,879,917
30,000,000 U.S. Treasury Notes 10/15/99 4.55 30,014,363
10,000,000 U.S. Treasury Notes 01/31/00 4.41 10,023,828
50,000,000 U.S. Treasury Notes 02/29/00 4.69 50,237,416
40,000,000 U.S. Treasury Notes 05/15/00 5.03 40,266,562
10,000,000 U.S. Treasury Notes 05/31/00 4.85 10,027,727
10,000,000 U.S. Treasury Notes 07/31/00 5.22 9,993,103
15,000,000 U.S. Treasury Notes 08/31/00 5.35 14,946,236
------------ ------------
390,000,000 Total U.S. Government Obligations 390,389,152
------------ ------------
Total Investments (99.73%) (Cost $741,389,152+) 741,389,152
Cash and Other Assets, Net of Liabilities (0.27%) 2,039,271
------------
Net Assets (100.00%) $743,428,423
============
Net Asset Value, offering and redemption price per share:
Class A Shares, 668,896,951 shares outstanding (Note 3) $ 1.00
============
Class B Shares, 74,531,472 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 30,1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Money Market U.S. Treasury
Portfolio Portfolio
------------------ ----------------
INVESTMENT INCOME
<S> <C> <C>
Income:
Interest................................................... $ 14,104,245 $ 18,266,102
------------------ ----------------
Expenses: (Note 2)
Investment management fee.................................. 327,270 446,842
Administration fee......................................... 136,363 186,184
Distribution fee (Class A)................................. 350,753 833,502
Custodian expenses......................................... 28,273 37,313
Shareholder servicing and related shareholder expenses..... 59,984 80,918
Legal, compliance and filing fees.......................... 45,933 39,865
Audit and accounting....................................... 34,920 44,031
Trustees' fees ............................................ 3,108 3,108
Amortization of organization costs......................... 366 --
Miscellaneous.............................................. 7,849 11,934
------------------ ----------------
Total expenses......................................... 994,819 1,683,697
Less:
Fees waived (Note 2).................................. ( 98,616) ( 105,458)
------------------ ----------------
Net expenses................................... 896,203 1,578,239
------------------ ----------------
Net investment income......................................... 13,208,042 16,687,863
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C> <C>
Net realized gain (loss) on investments....................... -0- -0-
------------------ ----------------
Increase in net assets from operations........................ $ 13,208,042 $ 16,687,863
================== ================
</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, 1999 Ended September 30, 1999 Ended
(Unaudited) March 31, 1999 (Unaudited) March 31, 1999
--------- -------------- --------- --------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C> <C> <C>
Operations:
Net investment income................... $ 13,208,042 $ 20,229,842 $ 16,687,863 $ 31,771,556
Net realized gain (loss) on investments. -0- 4,250 -0- 26,250
------------- ------------- ------------- -------------
Increase in net assets from operations.. 13,208,042 20,234,092 16,687,863 31,797,806
Dividends to shareholders:
Net investment income
Class A............................... ( 6,639,140) ( 7,860,183) ( 14,858,793) ( 29,706,735)
Class B............................... ( 6,568,902) ( 12,369,659) ( 1,829,070) ( 2,064,821)
Net realized gain on investments
Class A............................... -0- ( 1,686) -0- ( 25,305)
Class B............................... -0- ( 2,564) -0- ( 945)
Capital share transactions (Note 3):
Class A............................... 77,837,555 173,601,064 ( 52,300,588) 253,825,264
Class B............................... 61,189,484 ( 6,773,897) ( 5,261,242) 72,960,122
------------- ------------- ------------- -------------
Total increase (decrease)............. 139,027,039 166,827,167 ( 57,561,830) 326,785,386
Net assets:
Beginning of period................... 503,377,109 336,549,942 800,990,253 474,204,867
------------- ------------- ------------- -------------
End of period......................... $ 642,404,148 $ 503,377,109 $ 743,428,423 $ 800,990,253
============= ============= ============= =============
</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 shareholder servicing fees and 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 Funds 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.
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, 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, 1999, the Manager voluntarily waived
investment management fees and administration fees of $22,036 and $76,580,
respectively, for the Money Market Portfolio and administration fees of $105,458
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 $54,545 and $74,486 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.
3. Transactions in Shares of Beneficial Interest.
At September 30, 1999, 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 $642,404,148 and $743,428,423, 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)
(UNAUDITED)
================================================================================
3. Transactions in Shares of Beneficial Interest. (Continued)
<TABLE>
<CAPTION>
Money Market Portfolio
----------------------------------------
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
------------------ --------------
<S> <C> <C>
Class A
-------
Sold.................................... $ 732,589,327 $1,206,034,402
Issued on reinvestment of dividends..... 6,223,001 7,406,833
Redeemed................................ ( 660,974,773) (1,039,840,171)
------------- -------------
Net increase (decrease)................. 77,837,555 173,601,064
============= =============
<CAPTION>
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
------------------ --------------
<S> <C> <C>
Class B
-------
Sold.................................... $ 631,596,378 $1,168,818,328
Issued on reinvestment of dividends..... 6,496,623 12,028,592
Redeemed................................ ( 576,903,517) (1,187,620,817)
------------- -------------
Net increase (decrease)................. 61,189,484 ( 6,773,897)
============= =============
<CAPTION>
U.S. Treasury Portfolio
----------------------------------------
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
------------------ --------------
<S> <C> <C>
Class A
-------
Sold.................................... $ 590,907,221 $1,588,809,964
Issued on reinvestment of dividends..... 14,548,240 28,772,982
Redeemed................................ ( 657,756,049) (1,363,757,682)
------------- -------------
Net increase (decrease)................. ( 52,300,588) 253,825,264
============= =============
<CAPTION>
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
------------------ --------------
<S> <C> <C>
Class B
-------
Sold.................................... $ 151,431,063 $ 204,200,988
Issued on reinvestment of dividends..... 1,824,593 1,905,798
Redeemed................................ ( 158,516,898) ( 133,146,664)
------------- -------------
Net increase (decrease)................. ( 5,261,242) 72,960,122
============= =============
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
4. Financial Highlights.
<TABLE>
<CAPTION>
Money Market Portfolio
-------------------------------------------------------------------------------
Six Months For the Year Ended March 31, April 6, 1995
CLASS A Ended ---------------------------------- (Commencement of Sales) to
- ------- September 30, 1999 1999 1998 1997 March 31, 1996
------------------ --------- --------- -------- --------------
<S> <C> <C> <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 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income....................... 0.024 0.050 0.053 0.050 0.054
Less distributions:
Dividends from net investment income........ ( 0.024) ( 0.050) ( 0.053) ( 0.050) ( 0.054)
------- ------- ------- ------- -------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return................................... 4.79%* 5.12% 5.38% 5.16% 5.58%*
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 360,096 $ 282,258 $ 108,657 $ 38,220 $ 5
Ratios to average net assets:
Expenses (net of fees waived and reimbursed)+ 0.45%* 0.45% 0.45% 0.42% 0.41%*
Net investment income....................... 4.73%* 4.93% 5.25% 5.07% 5.46%*
Expenses paid indirectly.................... 0.00%* 0.00% 0.00% 0.01% 0.04%*
Management and administration fees waived... 0.04%* 0.05% 0.07% 0.09% 0.13%*
Expenses reimbursed......................... 0.00%* 0.00% 0.00% 0.00% 0.03%*
<CAPTION>
Money Market Portfolio
-----------------------------------------------------------------------------------
April 14, 1994
Six Months For the Year Ended March 31, (Commencement
CLASS B Ended ---------------------------------------------- of Sales) to
------- September 30, 1999 1999 1998 1997 1996 March 31, 1995
------------------ -------- -------- -------- -------- --------------
<S> <C> <C> <C> <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 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income....................... 0.025 0.053 0.055 0.053 0.057 0.045
Less distributions:
Dividends from net investment income........ ( 0.025) ( 0.053) ( 0.055) ( 0.053) ( 0.057) ( 0.045)
------- ------- ------- ------- ------- -------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return................................... 5.05%* 5.38% 5.64% 5.42% 5.85% 5.16%*
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 282,308 $ 221,119 $ 227,893 $ 158,525 $ 127,282 $ 35,857
Ratios to average net assets:
Expenses (net of fees waived and reimbursed)+ 0.20%* 0.20% 0.20% 0.17% 0.16% 0.02%*
Net investment income....................... 4.96%* 5.27% 5.50% 5.29% 5.64% 5.14%*
Expenses paid indirectly.................... 0.00%* 0.00% 0.00% 0.01% 0.04% 0.00%*
Management and administration fees waived... 0.04%* 0.05% 0.07% 0.09% 0.13% 0.13%*
Expenses reimbursed......................... 0.00%* 0.00% 0.00% 0.00% 0.03% 0.25%*
* Annualized
+ Includes expenses paid indirectly.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
4. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
U.S. Treasury Portfolio
------------------------------------------------------------------------------------
Six Months For the Year Ended March 31, November 29, 1995
CLASS A Ended ---------------------------------- (Commencement of Operations) to
------- September 30, 1999 1999 1998 1997 March 31, 1996
------------------ --------- --------- --------- --------------
<S> <C> <C> <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 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income...................... 0.022 0.048 0.051 0.049 0.017
Less distributions:
Dividends from net investment income....... ( 0.022) ( 0.048) ( 0.051) ( 0.049) ( 0.017)
-------- -------- -------- -------- --------
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.................................. 4.53%* 4.86% 5.24% 5.00% 5.18%*
Ratios/Supplemental Data
Net assets, end of period (000)............... $ 668,897 $ 721,197 $ 467,372 $ 310,290 $ 291,747
Ratios to average net assets:
Expenses (net of fees waived)+............. 0.45%* 0.45% 0.42% 0.42% 0.43%*
Net investment income...................... 4.46%* 4.71% 5.12% 4.89% 5.07%*
Expenses paid indirectly................... 0.00%* 0.00% 0.00% 0.01% 0.00%*
Management and administration fees waived.. 0.03%* 0.04% 0.07% 0.05% 0.08%*
<CAPTION>
U.S. Treasury Portfolio
------------------------------------------------------------------------------------
Six Months For the Year Ended March 31, November 18, 1996
CLASS B Ended ---------------------------- (Commencement of Sales) to
------- September 30, 1999 1999 1998 March 31, 1997
------------------ -------- --------- --------------
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...................... 0.024 0.050 0.054 0.019
Less distributions:
Dividends from net investment income....... ( 0.024) ( 0.050) ( 0.054) ( 0.019)
-------- -------- -------- --------
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total Return.................................. 4.79%* 5.12% 5.50% 5.27%*
Ratios/Supplemental Data
Net assets, end of period (000)............... $ 74,531 $ 79,793 $ 6,833 $ 7,799
Ratios to average net assets:
Expenses (net of fees waived)+............. 0.20%* 0.20% 0.17% 0.17%*
Net investment income...................... 4.69%* 4.73% 5.37% 5.14%*
Expenses paid indirectly................... 0.00%* 0.00% 0.00% 0.01%
Management and administration fees waived.. 0.03%* 0.04% 0.07% 0.05%*
* Annualized
+ Includes expenses paid indirectly
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
================================================================================
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition have joined
PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or a disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audits for the two most recent fiscal years and through
August 13, 1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
McGladrey would have caused it to make reference to the subject matter of
disagreement in connection with its report.
Effective August 13, 1999, the Fund, with the approval of its Board of Trustees
and its Audit Committee, engaged PwC as its independent auditors.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL
DAILY
INCOME FUND
Semi-Annual Report
September 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
<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
IDI999S
- --------------------------------------------------------------------------------
<PAGE>
