<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, 2000 through September 30, 2000.
The Fund's Money Market Portfolio had 285 shareholders and net assets of
$1,109,330,313 as of September 30, 2000. The U.S. Treasury Portfolio had 164
shareholders and net assets of $433,338,100 as of September 30, 2000.
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, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Commercial Paper (43.90%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 44,270,000 BAE Systems Holdings Inc. 12/08/00 6.59% $ 43,736,104
40,000,000 Caterpillar Financial Services 03/12/01 6.65 38,847,956
25,000,000 Falcon Asset Securitization Corporation 12/21/00 6.65 24,638,889
1,000,000 Forrestal Funding Master Trust 02/08/01 6.70 976,672
25,502,000 Great Lakes Funding Capital Co 10/23/00 6.57 25,404,859
40,000,000 HSBC Bank Argentina S.A. 12/18/00 6.90 39,429,344
17,000,000 Intrepid Funding Master Trust 11/20/00 7.03 16,842,887
50,000,000 Island Finance of Puerto Rico 10/10/00 6.65 49,927,333
24,000,000 Lehman Brothers Holdings Inc. 10/11/00 6.51 23,962,200
8,473,000 Long Lane Master Trust IV 10/27/00 6.69 8,434,283
18,446,000 Long Lane Master Trust IV 11/22/00 7.05 18,268,042
25,000,000 Long Lane Master Trust IV 12/08/00 6.62 24,697,104
40,265,000 Market Street Funding 10/18/00 6.56 40,148,321
20,000,000 National Rural Utilities Coop. 03/13/01 6.65 19,420,400
30,000,000 National Rural Utilities Coop. 03/14/01 6.69 29,121,158
25,000,000 Paine Webber Group 10/03/00 6.81 24,995,347
10,000,000 Paine Webber Group 10/10/00 6.76 9,985,222
18,472,000 Sand Dollar Funding LLC 12/14/00 6.65 18,228,154
30,000,000 Special Purpose Accounts Receivable Co-Operation 10/24/00 6.56 29,880,283
------------ ------------
492,428,000 Total Commercial Paper 486,944,558
------------ ------------
<CAPTION>
Letter of Credit Commercial Paper (14.77%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Banco Bradesco S.A.
LOC Barclays Bank PLC 11/20/00 6.58% $ 19,822,783
20,000,000 Banco Bradesco S.A.
LOC Barclays Bank PLC 06/14/01 7.15 19,053,667
10,000,000 Banco Continental De Panama S.A.
LOC HSBC Bank 10/24/00 6.68 9,959,972
4,000,000 Banco Del Istmo, S.A.
LOC Barclays Bank PLC 11/01/00 6.89 3,977,667
15,000,000 Banco Rio de La Plata S.A.
LOC Banco Santander 03/08/01 7.12 14,558,438
20,000,000 Banco Santander Brasil
LOC Standard Chartered 11/08/00 6.61 19,865,978
25,000,000 China Merchants Bank
LOC ABN AMRO Bank N.V. 10/26/00 6.57 24,891,667
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Letter of Credit Commercial Paper (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 China Merchants Bank
LOC ABN AMRO Bank N.V. 11/10/00 6.59% $ 14,894,375
12,000,000 Cofco Capital Corporation
LOC Bank of America 10/05/00 6.83 11,993,320
15,000,000 Cofco Capital Corporation
LOC Bank of America 10/27/00 6.58 14,932,188
10,000,000 Pemex Capital Inc
LOC Barclays Bank PLC 12/27/00 6.73 9,843,767
------------ ------------
166,000,000 Total Letter of Credit Commercial Paper 163,793,822
------------ ------------
<CAPTION>
Master Notes (5.41%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 30,000,000 GMAC Mortgage Corporation 10/02/00 6.58% $ 30,000,000
20,000,000 The Goldman Sachs Group L.P. 02/02/01 6.78 20,000,000
10,000,000 The Goldman Sachs Group L.P. 11/15/00 6.87 10,000,000
------------ ------------
60,000,000 Total Master Notes 60,000,0000
------------ ------------
<CAPTION>
Medium Term Notes (3.15%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Lexington Parker Capital 01/25/01 6.63% $ 20,000,000
5,000,000 Racers - Series 2000-6-MM 04/26/01 6.55 4,996,544
10,000,000 Syndicated Loan Trust, - Series 2000-12 06/15/01 6.76 10,000,000
------------ ------------
35,000,000 Total Medium Term Notes 34,996,544
------------ ------------
<CAPTION>
Loan Participation (1.80%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Equitable Life Assurance with Chase Manhattan Bank 03/19/01 6.71% $ 20,000,000
------------ ------------
20,000,000 Total Loan Participation 20,000,000
------------ ------------
<CAPTION>
Other Notes (24.85%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,820,000 Alpine Capital Investments L.L.C.
LOC First of America 09/15/27 (a) 6.75% $ 3,820,000
5,980,000 Arbor Properties Inc.
LOC Amsouth Bank 06/01/22 (a) 6.15 5,980,000
1,205,000 Austin Printing Co. & Klein Austin
LOC Bank One 08/01/14 (a) 6.70 1,205,000
1,560,000 Automated Packaging Systems
LOC National City Bank 10/01/08 (a) 6.70 1,560,000
1,705,000 Bardstown, KY IDRB
(R & J Tower Corporation Project)
LOC Comerica Bank 06/01/24 (a) 6.72 1,705,000
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,830,000 Burgess & Niple Limited
LOC National City Bank 09/01/14 (a) 6.70% $ 3,830,000
26,500,000 Catholic Health Initiatives - Series C 12/01/27 (a) 6.70 26,500,000
28,470,000 CFM International Inc.
LOC General Electric Company 01/01/10 (a) 6.67 28,470,000
1,380,000 Cedar Works Project
LOC Firstar Bank 05/01/09 (a) 6.70 1,380,000
750,000 City of Colorado Springs Adjustable Rate Taxable/Convertible Bonds
(Goodwill Industries) - Series 1997B
LOC Bank One 02/01/07 (a) 6.70 750,000
8,240,000 Crystal Clinic - Series 2000
LOC First Merit Bank 04/01/20 (a) 6.78 8,240,000
1,055,000 Crystal Enterprises Inc.
LOC Old Kent Bank & Trust Co. 06/01/28 (a) 6.75 1,055,000
3,525,000 D.E.D.E. Realty
LOC Fifth Third Bank 12/01/11 (a) 6.69 3,525,000
2,000,000 DP Fox Capital, L.L.C.
LOC Michigan National Bank 09/01/29 (a) 6.70 2,000,000
11,000,000 Dekalb County, GA (Emory University Project) 11/02/00 6.70 11,000,000
720,000 Delta Capital L.L.C. - Series 96-A
LOC First Michigan Bank 10/01/26 (a) 6.75 720,000
2,920,000 Delta Capital L.L.C. - Series 96-B
LOC First Michigan Bank 10/01/26 (a) 6.75 2,920,000
1,825,000 Dickenson Press, Inc. - Series 1997
LOC First Michigan Bank 01/01/27 (a) 6.75 1,825,000
5,900,000 Douglas County, GA Development Authority (Abrams Riverside, LLC Project)
LOC Bank of America 11/01/18 (a) 6.70 5,900,000
4,445,000 First Metropolitan Title Company
LOC LaSalle National Bank 05/01/22 (a) 6.70 4,445,000
2,165,000 First Metropolitan Title Company
LOC LaSalle National Bank 05/01/24 (a) 6.75 2,165,000
710,000 Four Development Company
LOC PNC Bank, N.A. 12/31/03 (a) 6.70 710,000
2,000,000 Frank J. Catanzaro Sons and Daughters
LOC Firstar Bank 01/01/15 (a) 6.70 2,000,000
1,300,000 GCG Portage L.L.C.
LOC Old Kent Bank & Trust Co. 02/01/26 (a) 6.75 1,300,000
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 5,000,000 Goldman Sachs Group L.P. 10/15/01 (a) 6.85% $ 5,000,000
1,897,000 Goson Project - Series 1999
LOC First Merit Bank 08/01/23 (a) 6.78 1,897,000
3,175,000 Governor's Village LLC
LOC Fifth Third Bank 03/01/20 (a) 6.63 3,175,000
17,105,000 Hannahville Indian Community
LOC National City Bank 06/01/13 (a) 6.67 17,105,000
955,000 Hendricks County (Heartland Crossing)
LOC Bank One 01/01/22 (a) 6.85 955,000
4,535,000 Hunter's Square, Inc. Project - Series 1998
LOC National City Bank 10/01/16 (a) 6.70 4,535,000
5,000,000 Jackson Tube Service Inc - Series 2000
LOC Fifth Third Bank 07/01/10 (a) 6.64 5,000,000
4,500,000 Jackson Tube Service Inc - Series 1998
LOC Fifth Third Bank 09/01/18 (a) 6.63 4,500,000
10,000,000 John Hancock Mutual Life Insurance Company 08/19/05 (a) 6.75 10,000,000
1,010,000 JRB Corporation Demand Note
LOC Old Kent Bank & Trust Co. 07/01/26 (a) 6.75 1,010,000
3,300,000 JPV Capital LLC
LOC Michigan National Bank 12/01/39 (a) 6.70 3,300,000
3,625,000 KBL Capital
LOC National City Bank 05/01/27 (a) 6.67 3,625,000
2,100,000 Kingston Healthcare Corp.
(Kingston Home Project)
LOC Wells Fargo Bank 07/20/25 (a) 6.72 2,100,000
1,025,000 Labelle Capital Funding
LOC National City Bank 09/01/26 (a) 6.72 1,025,000
795,000 LRV Enterprises, L.L.C.
LOC First of America 09/01/21 (a) 6.75 795,000
3,605,000 Luken Woodlawn LLC 02/01/18 (a) 6.69 3,605,000
11,000,000 Maximum Principal Amount Camcairn
LOC Firstar Bank 10/01/21 (a) 6.73 11,000,000
3,000,000 Mayfair Village Retirement Center, Inc., KY
(Variable Rate Term Notes) - Series 1995
LOC PNC Bank, N.A. 05/15/09 (a) 6.61 3,000,000
5,855,000 Medic Funding Corporation
Guaranteed by Federal Home Loan Bank 05/01/27 (a) 6.68 5,855,000
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,935,000 Mercer County, NJ Improvement Authority - Series 1999 12/01/00 (b) 7.00% $ 1,936,041
1,365,000 Mississippi Business Finance Corporation IDRB
(ABTCO, Inc. Project) - Series 1997B
LOC Bank One 06/01/10 (a) 6.70 1,365,000
3,650,000 Mississippi Business Finance Corporation IDRB
(ABTCO, Inc. Project) - Series 1997B
LOC First Union National Bank 04/01/22 (a) 6.68 3,650,000
3,000,000 Mt Carmel West Medical Office Building
LOC National City Bank 08/01/19 (a) 6.70 3,000,000
14,000,000 New York City GO Bonds
Insured by FGIC 11/08/00 (a) 6.65 14,000,000
400,000 Pennsylvania EDFA (Oglevee Limited Project)
LOC PNC Bank, N.A. 08/01/02 (a) 6.70 400,000
575,000 Pennsylvania EDFA
(Philadelphia Business & Technical Center Project) - Series A1
LOC PNC Bank, N.A. 04/01/04 (a) 6.70 575,000
700,000 Pennsylvania EDFA Taxable Development RB
(Quality Foods L.P. Project) - Series 1995D
LOC PNC Bank, N.A. 12/01/14 (a) 6.70 700,000
750,000 Pennsylvania EDFA Taxable Development RB
(Southpointe Rink Association Project) - Series 1994D7
LOC PNC Bank, N.A. 12/01/09 (a) 6.70 750,000
2,200,000 Pennsylvania EDFA Taxable Development RB
(West 914 Incorporation Project) - Series 1991A
LOC PNC Bank, N.A. 05/01/21 (a) 6.70 2,200,000
2,090,000 PRD Land Acquisition Company Ltd.
LOC First Merit Bank 05/01/17 (a) 6.78 2,090,000
4,000,000 Scott Street Land Co.
LOC Fifth Third Bank 01/01/22 (a) 6.63 4,000,000
13,315,000 Secor Realty Inc.
LOC National City Bank 04/01/20 (a) 6.70 13,315,000
1,235,000 Shepherd Capital, L.L.C.
LOC First of America 09/15/47 (a) 6.75 1,235,000
3,550,000 St. Anns Medical Office Building
LOC National City Bank 11/01/19 (a) 6.70 3,550,000
1,905,000 Trendway Corporation
LOC Michigan National Bank 12/01/26 (a) 6.75 1,905,000
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,459,000 WMMT Ltd. Project
LOC First Merit Bank 03/01/24 (a) 6.78% $ 2,459,000
1,043,000 Willingham Properties
LOC PNC Bank, N.A. 12/31/09 (a) 6.70 1,043,000
5,162,000 Washington State Housing Finance
LOC Wells Fargo Bank 01/01/30 (a) 6.70 5,162,000
1,855,000 Zylstra Funding, Inc.
LOC First Michigan Bank 06/01/27 (a) 6.75 1,855,000
------------ -------------
275,676,000 Total Other Notes 275,677,041
------------ -------------
<CAPTION>
Time Deposits (6.13%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 35,000,000 Dresdner Bank 10/02/00 6.71% $ 35,000,000
33,000,000 Toronto Dominion Bank 10/02/00 6.71 33,000,000
------------ -------------
68,000,000 Total Time Deposits 68,000,000
------------ -------------
Total Investments (100.01%) (Cost $1,109,411,965+) $1,109,411,965
Liabilities In Excess of Cash and Other Assets (-0.01%) ( 81,652)
-------------
Net Assets (100.00%) $1,109,330,313
=============
Net Asset Value, offering and redemption price per share:
Class A Shares, 840,435,971 Shares Outstanding (Note 3) $ 1.00
=============
Class B Shares, 138,463,493 Shares Outstanding (Note 3) $ 1.00
=============
Pinnacle Shares,130,430,849 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 IDRB = Industrial Development Revenue Bond
FGIC = Financial Guaranty Insurance Company LOC = Letter of Credit
GO = General Obligation RB = Revenue Bond
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements, Overnight (46.84%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 50,000,000 The Goldman Sachs Group L.P. (Collateralized by $52,788,818,
GNMA, 7.000% to 7.270%, due 11/16/26 to 05/20/28, value $51,000,000) 10/02/00 6.60% $ 50,000,000
55,000,000 Morgan (J.P.) Securities (Collateralized by $64,487,075,
GNMA, 6.000% to 8.000%, due 02/15/028 to 05/15/30, value $56,100,000) 10/02/00 6.55 55,000,000
43,000,000 Morgan Stanley & Company, Inc. (Collateralized by $157,626,000,
GNMA, 6.000% to 8.000%, due 02/20/24 to 08/15/30, value $43,866,016) 10/02/00 6.62 43,000,000
55,000,000 Salomon Smith Barney (Collateralized by $124,505,126,
GNMA, 6.500% to 7.125%, due 02/16/26 to 10/15/27, value $56,100,000) 10/02/00 6.58 55,000,000
------------ ------------
203,000,000 Total Repurchase Agreements, Overnight 203,000,000
------------ ------------
<CAPTION>
U.S. Government Obligations (53.03%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$175,000,000 U.S. Treasury Bills 10/05/00 5.44% $174,920,729
10,000,000 U.S. Treasury Notes 11/15/00 5.49 9,999,956
10,000,000 U.S. Treasury Notes 01/31/01 6.01 9,945,491
15,000,000 U.S. Treasury Notes 02/15/01 6.13 14,945,333
20,000,000 U.S. Treasury Notes 05/31/01 6.45 19,969,914
------------ ------------
230,000,000 Total U.S. Government Obligations 229,781,423
------------ ------------
Total Investments (99.87%) (Cost $432,781,423+) 432,781,423
Cash and Other Assets, Net of Liabilities (0.13%) 556,677
------------
Net Assets (100.00%) $433,338,100
============
Net Asset Value, offering and redemption price per share:
Class A Shares,403,131,645 shares outstanding (Note 3) $ 1.00
============
Class B Shares, 12,415,620 shares outstanding (Note 3) $ 1.00
============
Pinnacle Shares,17,790,835 shares outstanding (Note 3) $ 1.00
============
</TABLE>
+ Aggregate cost for federal income tax purposes is identical.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C>
GNMA = Government National Mortgage Association
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Money Market U.S. Treasury
Portfolio Portfolio
----------------- -----------------
INVESTMENT INCOME
<S> <C> <C>
Income:
Interest................................................... $ 35,127,881 $ 17,806,524
Expenses: (Note 2)
----------------- -----------------
Investment management fee.................................. 645,021 342,002
Administration fee......................................... 268,759 142,501
Shareholder servicing fee (Class A)........................ 924,049 668,142
Custodian expenses......................................... 46,804 18,459
Shareholder servicing and related shareholder expenses+.... 124,179 63,221
Legal, compliance and filing fees.......................... 26,877 21,121
Audit and accounting....................................... 50,583 29,699
Trustees' fees ............................................ 3,105 3,105
Amortization of organization costs......................... -0- -0-
Miscellaneous.............................................. 23,624 11,650
----------------- -----------------
Total expenses.......................................... 2,113,001 1,299,900
Less:
Expenses paid indirectly (Note 2)...................... ( 6,412) ( 4,754)
Fees waived (Note 2)................................... ( 107,504) ( 57,001)
----------------- -----------------
Net expenses..................................... 1,999,085 1,238,145
----------------- -----------------
Net investment income......................................... 33,128,796 16,568,379
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C> <C>
Net realized gain (loss) on investments....................... -0- -0-
----------------- -----------------
Increase in net assets from operations........................ $ 33,128,796 $ 16,568,379
================= =================
</TABLE>
+ Includes class specific transfer agency expenses of $73,924, $20,578 and
$13,002 for Money Market Portfolio for Class A, Class B and Pinnacle Class,
respectively and $53,451, $1,861 and $1,688 for U.S. Treasury Portfolio for
Class A, Class B and Pinnacle Class, respectively.
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these 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, 2000 Ended September 30, 2000 Ended
(Unaudited) March 31, 2000 (Unaudited) March 31, 2000
--------- -------------- --------- --------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C> <C> <C>
Operations:
Net investment income................... $ 33,128,796 $ 36,757,519 $ 16,568,379 $ 35,739,853
Net realized gain (loss) on investments. -0- -0- -0- -0-
-------------- -------------- -------------- --------------
Increase in net assets from operations.. 33,128,796 36,757,519 16,568,379 35,739,853
Dividends to shareholders:
Net investment income
Class A............................... ( 22,566,813) ( 21,330,939) ( 15,499,645) ( 31,666,894)
Class B............................... ( 6,425,906) ( 10,109,238) ( 556,905) ( 3,246,867)
Pinnacle shares....................... ( 4,136,077) ( 5,317,342) ( 511,829) ( 826,092)
Net realized gain on investments
Class A............................... -0- -0- -0- -0-
Class B............................... -0- -0- -0- -0-
Capital share transactions (Note 3):
Class A............................... 75,827,552 482,350,233 ( 255,264,450) ( 62,801,444)
Class B............................... ( 216,085,235) 133,429,805 ( 25,571,916) ( 41,805,178)
Pinnacle shares....................... ( 14,200,607) 144,631,456 ( 658,767) 18,449,602
------------- -------------- ------------- --------------
Total increase (decrease)............. ( 154,458,290) 760,411,494 ( 281,495,133) ( 86,157,020)
Net assets:
Beginning of period................... 1,263,788,603 503,377,109 714,833,233 800,990,253
-------------- -------------- -------------- --------------
End of period......................... $1,109,330,313 $1,263,788,603 $ 433,338,100 $ 714,833,233
============== ============== ============== ==============
</TABLE>
--------------------------------------------------------------------------------
These accompanying notes are an integral part of these 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 three classes of stock authorized, Class
A, Class B and Pinnacle shares. 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 and Pinnacle 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, all share
classes 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 distribution of
the Pinnacle shares commenced on July 29, 1999.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America 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 accounting
principles generally accepted in the United States of America 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 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, 2000, the Manager voluntarily waived
administration fees of $107,504 and $57,001, for the Money Market Portfolio and
U.S. Treasury Portfolio, respectively.
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 $108,020 and $57,384 paid to Reich
& Tang Services, Inc., an affiliate of the Manager, as shareholder 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 $6,412 and $4,754 for the Money Market Portfolio and the
U.S. Treasury Portfolio, respectively.
3. Transactions in Shares of Beneficial Interest.
At September 30, 2000, 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 $1,109,330,313 and $433,338,100, respectively.
Transactions in shares of beneficial interest, all at $1.00 per share, were as
follows:
<TABLE>
<CAPTION>
Money Market Portfolio
------------------------------------------
Six Months Ended
September 30, 2000 For the Year Ended
Class A (Unaudited) March 31, 2000
------- ------------- --------------
<S> <C> <C>
Sold.................................... $1,205,142,183 $1,877,791,119
Issued on reinvestment of dividends..... 21,923,200 19,077,715
Redeemed................................ ( 1,151,237,831) ( 1,414,518,601)
-------------- --------------
Net increase (decrease)................. 75,827,552 482,350,233
============== ==============
</TABLE>
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
================================================================================
3. Transactions in Shares of Beneficial Interest. (Continued)
<TABLE>
<CAPTION>
Money Market Portfolio
-------------------------------------------
Six Months Ended
September 30, 2000 For the Year Ended
Class B (Unaudited) March 31, 2000
------- ------------- --------------
<S> <C> <C>
Sold.................................... $ 673,916,353 $1,404,004,264
Issued on reinvestment of dividends..... 6,997,412 9,356,473
Redeemed................................ ( 896,999,000) (1,279,930,932)
------------- -------------
Net increase (decrease)................. ( 216,085,235) 133,429,805
============= =============
<CAPTION>
Six Months Ended July 29, 1999
September 30, 2000 (Commencement of Sales) to
PINNACLE SHARES (Unaudited) March 31, 2000
--------------- ------------- --------------
<S> <C> <C>
Sold.................................... $ 56,591,104 $ 238,497,604
Issued on reinvestment of dividends..... 4,134,763 5,316,113
Redeemed................................ ( 74,926,474) ( 99,182,261)
------------- -------------
Net increase (decrease)................. ( 14,200,607) 144,631,456
============= =============
<CAPTION>
U.S. Treasury Portfolio
-------------------------------------------
Six Months Ended
September 30, 2000 For the Year Ended
Class A (Unaudited) March 31, 2000
------- ------------- --------------
<S> <C> <C>
Sold.................................... $ 742,842,886 $2,073,614,004
Issued on reinvestment of dividends..... 16,042,313 30,570,696
Redeemed................................ (1,014,149,649) (2,166,986,144)
------------- -------------
Net increase (decrease)................. ( 255,264,450) ( 62,801,444)
============= =============
<CAPTION>
Six Months Ended
September 30, 2000 For the Year Ended
Class B (Unaudited) March 31, 2000
------- ------------- --------------
<S> <C> <C>
Sold.................................... $ 29,620,197 $ 256,122,980
Issued on reinvestment of dividends..... 635,994 3,237,610
Redeemed................................ ( 55,828,107) ( 301,165,768)
------------- -------------
Net increase (decrease)................. ( 25,571,916) ( 41,805,178)
============= =============
<CAPTION>
Six Months Ended July 29, 1999
September 30, 2000 (Commencement of Sales) to
PINNACLE SHARES (Unaudited) March 31, 2000
--------------- --------- --------------
<S> <C> <C>
Sold.................................... $ 25,025,562 $ 57,728,428
Issued on reinvestment of dividends..... 511,680 825,910
Redeemed................................ ( 26,196,009) ( 40,104,736)
------------- -------------
Net increase (decrease)................. ( 658,767) 18,449,602
============= =============
</TABLE>
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
4. Financial Highlights.
<TABLE>
<CAPTION>
Money Market Portfolio
-----------------------------------------------------------------------------------
April 6, 1995
Six Months For the Year Ended March 31, (Commencement of
CLASS A Ended -------------------------------------------- Sales) to
------- September 30, 2000 2000 1999 1998 1997 March 31, 1996
------------------ -------- -------- -------- -------- --------------
<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....................... 0.030 0.051 0.050 0.053 0.050 0.054
Less distributions:
Dividends from net investment income........ ( 0.030) ( 0.051) ( 0.050) ( 0.053) ( 0.050) ( 0.054)
------ ------ ------ ------ ------ ------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total Return................................... 3.08%** 5.17% 5.12% 5.38% 5.16% 5.52%**
Ratios/Supplemental Data
Net assets, end of period (000)................ $840,436 $764,608 $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% 0.45% 0.42% 0.41%*
Net investment income....................... 6.11%* 5.21% 4.93% 5.25% 5.07% 5.46%*
Expenses paid indirectly.................... 0.00% 0.00% 0.00% 0.00% 0.01% 0.04%*
Management and administration fees waived... 0.02%* 0.03% 0.05% 0.07% 0.09% 0.13%*
Expenses reimbursed......................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.03%*
<CAPTION>
Money Market Portfolio
-----------------------------------------------------------------------------
Six Months For the Year Ended March 31,
CLASS B Ended --------------------------------------------------------
------- September 30, 2000 2000 1999 1998 1997 1996
------------------ -------- -------- -------- -------- --------
<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....................... 0.032 0.053 0.053 0.055 0.053 0.057
Less distributions:
Dividends from net investment income........ ( 0.032) ( 0.053) ( 0.053) ( 0.055) ( 0.053) ( 0.057)
------- ------- ------- ------- ------- -------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return................................... 3.20%** 5.43% 5.38% 5.64% 5.42% 5.85%
Ratios/Supplemental Data
Net assets, end of period (000)................ $138,463 $ 354,549 $ 221,119 $ 227,893 $ 158,525 $ 127,282
Ratios to average net assets:
Expenses (net of fees waived and reimbursed)+ 0.20%* 0.20% 0.20% 0.20% 0.17% 0.16%
Net investment income....................... 6.29%* 5.36% 5.27% 5.50% 5.29% 5.64%
Expenses paid indirectly.................... 0.00% 0.00% 0.00% 0.00% 0.01% 0.04%
Management and administration fees waived... 0.02%* 0.03% 0.05% 0.07% 0.09% 0.13%
Expenses reimbursed......................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.03%
* Annualized
** Not Annualized
+ Includes expenses paid indirectly.
</TABLE>
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
================================================================================
4. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
Money Market Portfolio
----------------------------------------------------
Six Months July 29, 1999
PINNACLE SHARES Ended (Commencement of Sales) to
--------------- September 30, 2000 March 31, 2000
------------------ --------------
<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....................... 0.032 0.038
Less distributions:
Dividends from net investment income........ ( 0.032) ( 0.038)
------- -------
Net asset value, end of period.................. $ 1.00 $ 1.00
======== ========
Total Return.................................... 3.20%** 3.80%**
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 130,431 $ 144,632
Ratios to average net assets:
Expenses (net of fees waived and reimbursed)+ 0.20%* 0.20%*
Net investment income....................... 6.29%* 5.36%*
Expenses paid indirectly.................... 0.00% 0.00%*
Management and administration fees waived... 0.02%* 0.03%*
</TABLE>
* Annualized
** Not Annualized
+ Includes expenses paid indirectly.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
4. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
U.S. Treasury Portfolio
-----------------------------------------------------------------------------------
November 29, 1995
Six Months For the Year Ended March 31, (Commencement of
CLASS A Ended -------------------------------------------- Operations) to
------- September 30, 2000 2000 1999 1998 1997 March 31, 1996
------------------ -------- -------- -------- -------- --------------
<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....................... 0.029 0.048 0.048 0.051 0.049 0.017
Less distributions:
Dividends from net investment income........ ( 0.029) ( 0.048) ( 0.048) ( 0.051) ( 0.049) ( 0.017)
------ ------ ------ ------ ------ ------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total Return................................... 2.94%** 4.82% 4.86% 5.24% 5.00% 1.73%**
Ratios/Supplemental Data
Net assets, end of period (000)................ $403,132 $658,396 $721,197 $467,372 $310,290 $291,747
Ratios to average net assets:
Expenses (net of fees waived)+.............. 0.45%* 0.45% 0.45% 0.42% 0.42% 0.43%*
Net investment income....................... 5.80%* 4.73% 4.71% 5.12% 4.89% 5.07%*
Expenses paid indirectly.................... 0.00% 0.00% 0.00% 0.00% 0.01% 0.00%*
Management and administration fees waived... 0.02%* 0.02% 0.04% 0.07% 0.05% 0.08%*
<CAPTION>
U.S. Treasury Portfolio
------------------------------------------------------------------------------
November 18,1996
Six Months For the Year Ended March 31, (Commencement of
CLASS B Ended ---------------------------------------- Sales) to
------- September 30, 2000 2000 1999 1998 March 31, 1997
------------------ -------- -------- -------- --------------
<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....................... 0.030 0.050 0.050 0.054 0.019
Less distributions:
Dividends from net investment income........ ( 0.030) ( 0.050) ( 0.050) ( 0.054) ( 0.019)
------- ------- ------- ------- -------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return................................... 3.07%** 5.08% 5.12% 5.50% 1.90%**
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 12,415 $ 37,987 $ 79,793 $ 6,833 $ 7,799
Ratios to average net assets:
Expenses (net of fees waived)+.............. 0.20%* 0.20% 0.20% 0.17% 0.17%*
Net investment income....................... 6.02%* 4.97% 4.73% 5.37% 5.14%*
Expenses paid indirectly.................... 0.00% 0.00% 0.00% 0.00% 0.01%*
Management and administration fees waived... 0.02%* 0.02% 0.04% 0.07% 0.05%*
</TABLE>
* Annualized
** Not Annualized
+ Includes expenses paid indirectly
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
================================================================================
4. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
U.S. Treasury Portfolio
--------------------------------------------------
Six Months July 29, 1999
PINNACLE SHARES Ended (Commencement of Sales) to
--------------- September 30, 2000 March 31, 2000
------------------ --------------
<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....................... 0.030 0.035
Less distributions:
Dividends from net investment income........ ( 0.030) ( 0.035)
------- --------
Net asset value, end of period.................. $ 1.00 $ 1.00
======== =========
Total Return.................................... 3.07%** 3.53%**
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 17,791 $ 18,450
Ratios to average net assets:
Expenses (net of fees waived and reimbursed)+ 0.20%* 0.20%*
Net investment income....................... 6.02%* 4.97%*
Expenses paid indirectly.................... 0.00% 0.00%*
Management and administration fees waived... 0.02%* 0.02%*
</TABLE>
* Annualized
** Not Annualized
+ Includes expenses paid indirectly.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
INSTITUTIONAL
DAILY
INCOME FUND
Semi-Annual Report
September 30, 2000
(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
State Street Kansas City
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
IDI900S
--------------------------------------------------------------------------------
<PAGE>
