<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
DAILY INCOME FUND 212-830-5200
================================================================================
Dear Shareholder,
We are pleased to present the annual report of Institutional Daily Income Fund
for the year ended March 31, 2000.
The Fund's Money Market Portfolio had 167 shareholders and net assets of
$1,263,788,603 as of March 31, 2000. The U.S. Treasury Portfolio had 90
shareholders and net assets of $714,833,233 as of March 31, 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
MARCH 31, 2000
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Commercial Paper (42.89)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 25,000,000 Banco Santander Puerto Rico 04/19/00 6.08% $ 24,932,778
14,000,000 Bank of America 08/11/00 6.25 13,694,139
30,000,000 British Aerospace NA Inc. 04/06/00 5.93 29,985,325
15,000,000 British Aerospace NA Inc. 08/21/00 6.30 14,643,583
40,700,000 Caterpillar Financial Services 09/19/00 6.35 39,528,779
12,300,000 Centric Capital Corporation 04/07/00 5.91 12,291,964
37,000,000 Centric Capital Corporation 04/28/00 6.12 36,843,521
13,400,000 City of Anaheim
LOC Credit Suisse First Boston 04/04/00 6.05 13,400,000
40,000,000 Falcon Asset Securitization Corporation 04/27/00 6.04 39,840,000
14,000,000 General Electric Capital Corp. 04/17/00 6.06 13,967,170
20,000,000 General Electric Capital Corp. 06/08/00 6.03 19,782,200
12,000,000 Intrepid Funding Master Trust 06/07/00 6.08 11,870,217
20,000,000 Island Finance Puerto Rico, Inc. 04/19/00 5.91 19,948,000
19,000,000 Island Finance Puerto Rico, Inc. 05/12/00 5.99 18,878,558
24,000,000 Lehman Brothers Holdings, Inc. 06/12/00 6.24 23,715,800
50,000,000 Lexington Parker Capital 04/14/00 5.98 49,909,097
15,226,000 Long Lane Master Trust IV 05/11/00 6.04 15,130,372
18,074,000 Long Lane Master Trust IV 05/23/00 6.05 17,924,388
8,516,000 Long Lane Master Trust III 04/28/00 5.21 8,486,726
20,000,000 Market Street Funding 05/12/00 6.00 19,871,950
28,000,000 Paine Webber Group 05/01/00 5.96 27,871,511
40,000,000 Special Purpose Accounts Receivable Co-Operation 04/27/00 6.08 39,838,933
20,000,000 Special Purpose Accounts Receivable Co-Operation 05/18/00 6.03 19,851,750
9,830,000 Sand Dollar Funding LLC 04/03/00 5.90 9,830,000
- ------------- -------------
546,046,000 Total Commercial Paper 542,036,761
- ------------- -------------
<CAPTION>
Letter of Credit Commercial Paper (18.97%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15,000,000 Banco Itau S.A.
LOC Barclays Bank PLC 05/26/00 6.04% $ 14,872,358
20,000,000 Banco Itau S.A.
LOC Barclays Bank PLC 06/15/00 6.15 19,758,289
6,000,000 Banco Rio de La Plata S.A.
LOC HSBC Bank US 04/04/00 6.13 5,999,008
25,000,000 Banco Rio de La Plata S.A.
LOC HSBC Bank US 04/05/00 6.13 24,991,736
36,000,000 CSN Overseas
LOC Banco Santander 06/28/00 6.09 35,486,580
</TABLE>
- --------------------------------------------------------------------------------
The 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>
$ 17,000,000 CSN Overseas
LOC Barclays Bank PLC 08/31/00 6.31% $ 16,566,500
28,000,000 Cofco Capital Corporation
LOC Bank of America 05/16/00 6.11 27,797,661
30,000,000 Dixie Overseas Ltd.
LOC Credit Agricole Indosuez 04/07/00 5.91 29,980,400
50,000,000 E D & F Man Finance
LOC Rabobank Nederland 06/22/00 6.25 49,315,556
15,000,000 Louis Dreyfus Corporation
LOC ABN AMRO Bank 04/19/00 6.08 14,959,667
- ------------- -------------
242,000,000 Total Letter of Credit Commercial Paper 239,727,755
- ------------- -------------
<CAPTION>
Loan Participation (1.58%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Equitable Life Assurance with Chase Manhattan Bank 03/19/01 6.24% $ 20,000,000
- ------------- -------------
20,000,000 Total Loan Participation 20,000,000
- ------------- -------------
<CAPTION>
Master Notes (1.19%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,000,000 GMAC Mortgage Corporation 04/03/00 5.91% $ 10,000,000
5,000,000 The Goldman Sachs Group L.P. 05/18/00 6.09 5,000,000
- ------------- -------------
15,000,000 Total Master Notes 15,000,000
- ------------- -------------
<CAPTION>
Medium Term Notes (2.92%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 20,000,000 Lehman Brothers Holdings 07/20/00 5.95% $ 20,005,504
6,916,500 Structured Enhanced Return Trust STEERS 1998 - Series A-42
Insured by MBIA Insurance Corp. 08/25/00 6.12 6,916,500
10,000,000 Syndicated Loan Trust, - Series 1999-3 06/15/00 6.02 10,000,000
- ------------- -------------
36,916,500 Total Medium Term Notes 36,922,004
- ------------- -------------
<CAPTION>
Other Notes (20.19%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,880,000 Alpine Capital Investments L.L.C.
LOC First of America 09/15/27 (a) 6.25% $ 3,880,000
1,340,000 Austin Printing Co. & Klein Austin
LOC Bank One 08/01/14 (a) 6.18 1,340,000
1,635,000 Automated Packaging Systems
LOC National City Bank 10/01/08 (a) 6.18 1,635,000
1,705,000 Bardstown, KY IDRB (R & J Tower Corporation Project)
LOC Comerica Bank 06/01/24 (a) 6.20 1,705,000
1,000,000 Burgess & Niple Limited
LOC National City Bank 09/01/14 (a) 6.18 1,000,000
26,500,000 Catholic Health Initiatives - Series C 12/01/27 (a) 6.25 26,500,000
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 2000
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 30,000,000 CFM International Inc.
LOC General Electric Company 01/01/10 (a) 6.17% $ 30,000,000
1,500,000 Cedar Works Project
LOC Firstar Bank 05/01/09 (a) 5.00 1,500,000
835,000 City of Colorado Springs Adjustable Rate Taxable/Convertible Bonds
(Goodwill Industries) - Series 1997B
LOC Bank One 02/01/07 (a) 6.20 835,000
20,000,000 Comerica Bank Senior Bank Notes 07/13/00 (b) 5.98 19,997,820
8,300,000 Crystal Clinic - Series 2000
LOC First Merit Bank 04/01/20 (a) 6.26 8,300,000
1,080,000 Crystal Enterprises Inc.
LOC Old Kent Bank & Trust Co. 06/01/28 (a) 6.20 1,080,000
2,000,000 DP Fox Capital, L.L.C.
LOC Michigan National Bank 09/01/29 (a) 6.18 2,000,000
10,600,000 Dekalb County, GA (Emory University Project) 06/07/00 6.10 10,600,000
2,920,000 Delta Capital L.L.C.
LOC First Michigan Bank 10/01/26 (a) 6.25 2,920,000
720,000 Delta Capital L.L.C. - Series A
LOC First Michigan Bank 10/01/26 (a) 6.25 720,000
1,825,000 Dickenson Press, Inc. - Series 1997
LOC First Michigan Bank 01/01/27 (a) 6.25 1,825,000
5,900,000 Douglas County, GA Development Authority
(Abrams Riverside, LLC Project)
LOC Bank of America 11/01/18 (a) 6.20 5,900,000
2,270,000 First Metropolitan Title Company
LOC LaSalle National Bank 05/01/24 (a) 6.25 2,270,000
4,645,000 First Metropolitan Title Company
LOC LaSalle National Bank 05/01/22 (a) 6.18 4,645,000
710,000 Four Development Company
LOC PNC Bank, N.A. 12/31/03 (a) 6.25 710,000
2,000,000 Frank J Catanzaro Sons
LOC Firstar Bank 01/01/15 (a) 5.00 2,000,000
1,300,000 GCG Portage L.L.C.
LOC Old Kent Bank & Trust Co. 02/01/26 (a) 6.25 1,300,000
20,000,000 Goldman Sachs Group Floating Rate Note 09/05/00 (b) 6.18 20,000,000
5,000,000 Goldman Sachs Group L.P. 04/12/01 (a) 6.12 5,000,000
3,175,000 Governor's Village LLC
LOC Fifth Third Bank 03/01/20 (a) 6.15 3,175,000
955,000 Hendricks County (Heartland Crossing)
LOC Bank One 01/01/22 (a) 6.35 955,000
</TABLE>
- --------------------------------------------------------------------------------
The 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>
$ 4,590,000 Hunter's Square, Inc. Project - Series 1998
LOC National City Bank 10/01/16 (a) 6.18% $ 4,590,000
10,000,000 John Hancock Mutual Life Insurance Company 08/19/05 (a) 6.15 10,000,000
1,135,000 JRB Corporation Demand Note
LOC Old Kent Bank & Trust Co. 07/01/26 (a) 6.25 1,135,000
3,300,000 JPV Capital LLC
LOC Michigan National Bank 12/01/39 (a) 6.18 3,300,000
1,025,000 Labelle Capital Funding
LOC National City Bank 09/01/26 (a) 6.20 1,025,000
860,000 LRV Enterprises, L.L.C.
LOC First of America 09/01/21 (a) 6.25 860,000
3,000,000 Camcairn Taxable Demand Note
LOC Firstar Bank 10/01/21 (a) 6.21 3,000,000
3,000,000 Mayfair Village Retirement Center, Inc., KY
(Variable Rate Term Notes) - Series 1995
LOC PNC Bank, N.A. 05/15/00 (a) 6.11 3,000,000
5,855,000 Medic Funding Corporation
Guaranteed by Federal Home Loan Bank 05/01/27 (a) 6.29 5,855,000
1,935,000 Mercer County, NJ Improvement Authority - Series 99
LOC Credit Suisse First Boston 12/01/00 (b) 7.00 1,939,199
1,510,000 Mississippi Business Finance Corporation IDRB
(ABTCO, Inc. Project) - Series 1997B
LOC Bank One 06/01/10 (a) 6.35 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) 6.19 3,650,000
3,000,000 Mt Carmel West Medical Office Building
LOC National City Bank 08/01/19 (a) 6.18 3,000,000
14,000,000 New York City GO Bonds
Insured by FGIC 06/07/00 (a) 6.07 14,000,000
1,300,000 Pennsylvania EDFA Taxable Development RB
(C & D Charter Power System) - Series 1989 B2
LOC PNC Bank, N.A. 12/01/00 (a) 6.20 1,300,000
600,000 Pennsylvania EDFA (Oglevee Limited Project)
LOC PNC Bank, N.A. 08/01/02 (a) 6.20 600,000
675,000 Pennsylvania EDFA
(Philadelphia Business & Technical Center Project) - Series A1
LOC PNC Bank, N.A. 04/01/04 (a) 6.20 675,000
700,000 Pennsylvania EDFA Taxable Development RB
(Quality Foods L.P. Project) - Series 1995D
LOC PNC Bank, N.A. 12/01/14 (a) 6.20 700,000
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 2000
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 750,000 Pennsylvania EDFA Taxable Development RB
(Southpointe Rink Association Project) - Series 1994D7
LOC PNC Bank, N.A. 12/01/09 (a) 6.20% $ 750,000
2,400,000 Pennsylvania EDFA Taxable Development RB
(West 914 Incorporation Project) - Series 1991A
LOC PNC Bank, N.A. 05/01/21 (a) 6.20 2,400,000
13,500,000 Secor Realty Inc
LOC National City Bank 04/01/20 (a) 6.18 13,500,000
1,235,000 Shepherd Capital, L.L.C.
LOC First of America 09/15/47 (a) 6.25 1,235,000
2,850,000 St. Anns Medical Office Building
LOC National City Bank 11/01/19 (a) 6.18 2,850,000
1,905,000 Trendway Corporation
LOC Michigan National Bank 12/01/26 (a) 6.20 1,905,000
2,479,000 WWMT Ltd. Project
LOC First Merit Bank 03/01/24 (a) 5.00 2,479,000
1,075,000 Willingham Properties
LOC PNC Bank, N.A. 12/31/09 (a) 6.25 1,075,000
5,162,000 Washington State Housing Finance
LOC Wells Fargo 01/01/30 (a) 6.25 5,162,000
1,935,000 Zylstra Funding, Inc.
LOC First Michigan Bank 06/01/27 (a) 6.25 1,935,000
- -------------- --------------
255,221,000 Total Other Notes 255,223,019
- -------------- --------------
<CAPTION>
Repurchase Agreement, Overnight (3.09%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 39,000,000 Morgan Stanley & Co., Incorporated (Collateralized by $53,155,771,
FNMA and GNMA, 6.500% to 8.000% due 10/20/25 to 1/15/30) 04/03/00 6.13% $ 39,000,000
- -------------- --------------
39,000,000 Total Repurchase Agreement, Overnight 39,000,000
- -------------- --------------
<CAPTION>
Time Deposits (9.50%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 60,000,000 National Bank of Canada 04/03/00 6.31% $ 60,000,000
30,000,000 Pittsburgh National Bank 04/03/00 6.31 30,000,000
30,000,000 Westdeutsche Landesbank 04/03/00 6.31 30,000,000
- -------------- --------------
120,000,000 Total Time Deposits 120,000,000
- -------------- --------------
Total Investments (100.33%) (Cost $1,267,909,539+) 1,267,909,539
Cash and Other Assets Net of Liabilities (-0.33%) ( 4,120,936)
--------------
Net Assets (100.00%) $1,263,788,603
==============
Net Asset Value, offering and redemption price per share:
Class A Shares, 764,608,419 shares outstanding (Note 3) $ 1.00
==============
Class B Shares, 354,548,728 shares outstanding (Note 3) $ 1.00
==============
Pinnacle Shares, 144,631,456 shares outstanding (Note 3) $ 1.00
==============
</TABLE>
+ Aggregate cost for federal income tax purposes is identical.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
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>
KEY:
<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
FNMA = Federal National Mortgage Association RB = Revenue Bond
GNMA = Government National Mortgage Association STEERS = Structured Enhanced Return Trust
GO = General Obligation
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 2000
================================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements, Overnight (44.07%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 85,000,000 The Goldman Sachs Group L.P. (Collateralized by $126,237,623,
FHLMC (backed by GNMA) and GNMA, 6.000% to 7.500%,
due 01/17/09 to 10/16/29) 04/03/00 6.13% $ 85,000,000
85,000,000 Morgan (J.P.) Securities (Collateralized by $96,705,662,
GNMA, 6.500% to 7.000%, due 05/15/24 to 10/15/29) 04/03/00 6.13 85,000,000
60,000,000 Morgan Stanley & Company, Inc. (Collateralized by $177,857,756,
GNMA, 5.500% to 7.125%, due 10/20/21 to 08/20/29) 04/03/00 6.13 60,000,000
85,000,000 Salomon Smith Barney (Collateralized by $121,122,980,
GNMA, 6.000% to 7.000%, due 03/20/22 to 05/16/27) 04/03/00 6.13 85,000,000
- -------------- --------------
315,000,000 Total Repurchase Agreements, Overnight 315,000,000
- -------------- --------------
<CAPTION>
U.S. Government Obligations (55.82%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 50,000,000 U.S. Treasury Bills 04/18/00 5.98% $ 49,875,833
225,000,000 U.S. Treasury Bills 04/20/00 5.96 224,369,465
40,000,000 U.S. Treasury Notes 05/15/00 5.10 40,049,320
10,000,000 U.S. Treasury Notes 05/31/00 4.86 10,006,618
25,000,000 U.S. Treasury Notes 07/31/00 5.44 25,015,793
15,000,000 U.S. Treasury Notes 08/31/00 5.30 14,975,927
10,000,000 U.S. Treasury Notes 11/15/00 5.55 9,999,772
10,000,000 U.S. Treasury Notes 01/31/01 6.06 9,863,502
15,000,000 U.S. Treasury Notes 02/15/01 6.19 14,872,176
- -------------- --------------
400,000,000 Total U.S. Government Obligations 399,028,406
- -------------- --------------
Total Investments (99.89%) (Cost $714,028,406+) 714,028,406
Cash and Other Assets Net of Liabilities (0.11%) 804,827
--------------
Net Assets (100.00%) $ 714,833,233
==============
Net Asset Value, offering and redemption price per share:
Class A Shares, 658,396,095 shares outstanding (Note 3) $ 1.00
==============
Class B Shares, 37,987,536 shares outstanding (Note 3) $ 1.00
==============
Pinnacle Shares, 18,449,602 shares outstanding (Note 3) $ 1.00
==============
+ Aggregate cost for federal income tax purposes is identical.
<CAPTION>
KEY:
<S> <C> <C>
FHLMC = Federal Home Loan Mortgage Corporation
GNMA = Government National Mortgage Association
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2000
================================================================================
<TABLE>
<CAPTION>
Money Market U.S. Treasury
Portfolio Portfolio
------------------ -----------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest................................................... $ 39,175,742 $ 38,915,936
------------------ -----------------
Expenses: (Note 2)
Investment management fee.................................. 836,918 901,607
Administration fee......................................... 348,716 375,670
Shareholder servicing fee (Class A)........................ 1,023,406 1,673,442
Custodian expenses......................................... 40,146 59,431
Shareholder servicing and related shareholder expenses..... 153,273 165,130
Legal, compliance and filing fees.......................... 143,101 67,709
Audit and accounting....................................... 39,643 86,650
Trustees' fees ............................................ 6,225 6,225
Amortization of organization costs......................... 366 -0-
Miscellaneous.............................................. 9,987 23,507
------------------ -----------------
Total expenses......................................... 2,601,781 3,359,371
Less:
Expenses paid indirectly (Note 2)..................... -0- ( 2,035)
Fees waived (Note 2).................................. ( 183,558) ( 181,253)
------------------ -----------------
Net expenses................................... 2,418,223 3,176,083
------------------ -----------------
Net investment income.......................................... 36,757,519 35,739,853
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C> <C>
Net realized gain (loss) on investments........................ -0- -0-
------------------ -----------------
Increase in net assets from operations......................... $ 36,757,519 $ 35,739,853
================== =================
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 2000 AND 1999
================================================================================
<TABLE>
<CAPTION>
Money Market Portfolio U.S. Treasury Portfolio
----------------------------------- -----------------------------------
2000 1999 2000 1999
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income................... $ 36,757,519 $ 20,229,842 $ 35,739,853 $ 31,771,556
Net realized gain (loss) on investments -0- 4,250 -0- 26,250
-------------- ------------- ------------- -------------
Increase in net assets from operations.. 36,757,519 20,234,092 35,739,853 31,797,806
Dividends to shareholders:
Net investment income
Class A............................... ( 21,330,939) ( 7,860,183) ( 31,666,894) ( 29,706,735)
Class B............................... ( 10,109,238) ( 12,369,659) ( 3,246,867) ( 2,064,821)
Pinnacle shares....................... ( 5,317,342) -0- ( 826,092) -0-
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............................... 482,350,233 173,601,064 ( 62,801,444) 253,825,264
Class B............................... 133,429,805 ( 6,773,897) ( 41,805,178) 72,960,122
Pinnacle shares....................... 144,631,456 -0- 18,449,602 -0-
-------------- ------------- ------------- -------------
Total increase (decrease)............. 760,411,494 166,827,167 ( 86,157,020) 326,785,386
Net assets:
Beginning of year..................... 503,377,109 336,549,942 800,990,253 474,204,867
-------------- ------------- ------------- -------------
End of year........................... $1,263,788,603 $ 503,377,109 $ 714,833,233 $ 800,990,253
============== ============= ============= =============
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies.
Institutional Daily Income Fund (the "Fund") is a no-load, diversified, open-end
management investment company registered under the Investment Company Act of
1940. The Fund offers investors three managed portfolios of money market
instruments: U.S. Treasury Portfolio, Money Market Portfolio and Municipal
Portfolio. Presently only the Money Market Portfolio and U.S. Treasury Portfolio
have been activated. Each Portfolio has 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 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)
================================================================================
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 year ended March 31, 2000, the Manager voluntarily waived investment
management fees and administration fees of $22,036 and $161,522, respectively,
for the Money Market Portfolio and administration fees $181,253, 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 Statements of Operations under the caption "Shareholder
servicing and related shareholder expenses" are fees of $138,070 and $149,459
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 $2,035 for the U.S. Treasury Portfolio.
3. Transactions in Shares of Beneficial Interest.
At March 31, 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 $1,263,788,603 and $714,833,233, respectively.
Transactions in shares of beneficial interest, all at $1.00 per share, were as
follows:
<TABLE>
<CAPTION>
Money Market Portfolio
-----------------------------------------
For the Year Ended For the Year Ended
Class A March 31, 2000 March 31, 1999
- ------- -------------- --------------
<S> <C> <C>
Sold.................................... $1,877,791,119 $1,206,034,402
Issued on reinvestment of dividends..... 19,077,715 7,406,833
Redeemed................................ (1,414,518,601) (1,039,840,171)
- ------- ------------- -------------
Net increase (decrease)................. 482,350,233 173,601,064
============= =============
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
3. Transactions in Shares of Beneficial Interest. (Continued)
<TABLE>
<CAPTION>
Money Market Portfolio
------------------------------------------
For the Year Ended For the Year Ended
Class B March 31, 2000 March 31, 1999
- ------- -------------- --------------
<S> <C> <C>
Sold.................................... $1,404,004,264 $1,168,818,328
Issued on reinvestment of dividends..... 9,356,473 12,028,592
Redeemed................................ (1,279,930,932) (1,187,620,817)
- ------- ------------- -------------
Net increase (decrease)................. 133,429,805 ( 6,773,897)
============= =============
<CAPTION>
July 29, 1999
(Commencement of Sales) to
PINNACLE SHARES March 31, 2000
- --------------- --------------
<S> <C>
Sold.................................... $ 238,497,604
Issued on reinvestment of dividends..... 5,316,113
Redeemed................................ ( 99,182,261)
-------------
Net increase (decrease)................. 144,631,456
<CAPTION>
U.S. Treasury Portfolio
------------------------------------------
For the Year Ended For the Year Ended
Class A March 31, 2000 March 31, 1999
- ------- -------------- --------------
<S> <C> <C>
Sold.................................... 2,073,614,004 $1,588,809,964
Issued on reinvestment of dividends..... 30,570,696 28,772,982
Redeemed................................ (2,166,986,144) (1,363,757,682)
------------- -------------
Net increase (decrease)................. ( 62,801,444) 253,825,264
============= =============
<CAPTION>
For the Year Ended For the Year Ended
Class B March 31, 2000 March 31, 1999
- ------- -------------- --------------
<S> <C> <C>
Sold.................................... $ 256,122,980 $ 204,200,988
Issued on reinvestment of dividends..... 3,237,610 1,905,798
Redeemed................................ ( 301,165,768) ( 133,146,664)
------------- -------------
Net increase (decrease)................. ( 41,805,178) 72,960,122
============= =============
<CAPTION>
July 29, 1999
(Commencement of Sales) to
PINNACLE SHARES March 31, 2000
- --------------- --------------
<S> <C>
Sold.................................... $ 57,728,428
Issued on reinvestment of dividends..... 825,910
Redeemed................................ ( 40,104,736)
-------------
Net increase (decrease)................. 18,449,602
=============
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
4. Financial Highlights.
<TABLE>
<CAPTION>
Money Market Portfolio
---------------------------------------------------------------------
CLASS A For the Year Ended March 31, April 6, 1995
- ------- ------------------------------------------------- (Commencement of Sales) to
2000 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....................... 0.051 0.050 0.053 0.050 0.054
Less distributions:
Dividends from net investment income........ ( 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
======== ======== ======== ======== ========
Total Return................................... 5.17% 5.12% 5.38% 5.16% 5.58%*
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 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% 0.42% 0.41%*
Net investment income....................... 5.21% 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... 0.03% 0.05% 0.07% 0.09% 0.13%*
Expenses reimbursed......................... 0.00% 0.00% 0.00% 0.00% 0.03%*
<CAPTION>
Money Market Portfolio
---------------------------------------------------------------------
For the Year Ended March 31,
CLASS B ---------------------------------------------------------------------
- ------- 2000 1999 1998 1997 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....................... 0.053 0.053 0.055 0.053 0.57
Less distributions:
Dividends from net investment income........ ( 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
======== ========, ======== ======== ========
Total Return................................... 5.43% 5.38% 5.64% 5.42% 5.85%
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 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% 0.17% 0.16%
Net investment income....................... 5.36% 5.27% 5.50% 5.29% 5.64%
Expenses paid indirectly.................... 0.00% 0.00% 0.00% 0.01% 0.04%
Management and administration fees waived... 0.03% 0.05% 0.07% 0.09% 0.13%
Expenses reimbursed......................... 0.00% 0.00% 0.00% 0.00% 0.03%
</TABLE>
* Annualized
+ Includes expenses paid indirectly.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
4. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
Money Market Portfolio
--------------------------------------
July 29, 1999
PINNACLE SHARES (Commencement of Sales) to
- --------------- March 31, 2000
--------------
<S> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............ $ 1.00
-----------
Income from investment operations:
Net investment income....................... 0.038
Less distributions:
Dividends from net investment income........ ( 0.038 )
----------
Net asset value, end of period.................. $ 1.00
===========
Total Return.................................... 5.43%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 144,632
Ratios to average net assets:
Expenses (net of fees waived and reimbursed)+... 0.20%*
Net investment income....................... 5.36%*
Expenses paid indirectly.................... 0.00%*
Management and administration fees waived... 0.03%*
</TABLE>
* Annualized
+ Includes expenses paid indirectly.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
4. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
U.S. Treasury Portfolio
---------------------------------------------------------------------------------
For the Year Ended March 31, November 29, 1995
CLASS A ------------------------------------------------ (Commencement of Operations) to
- ------- 2000 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........................ 0.048 0.048 0.051 0.049 0.017
Less distributions:
Dividends from net investment income......... ( 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
======== ======== ======== ======== ========
Total Return.................................... 4.82% 4.86% 5.24% 5.00% 5.18%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 658,396 $ 721,197 $ 467,372 $ 310,290 $ 291,747
Ratios to average net assets:
Expenses (net of fees waived)+............... 0.45% 0.45% 0.42% 0.42% 0.43%*
Net investment income........................ 4.73% 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.... 0.02% 0.04% 0.07% 0.05% 0.08%*
<CAPTION>
U.S. Treasury Portfolio
---------------------------------------------------------------------------------
For the Year Ended March 31, November 18, 1996
--------------------------------------------- (Commencement of Sales) to
CLASS B 2000 1999 1998 March 31, 1997
- ------- ---------- ---------- ---------- --------------
<S> <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
---------- ---------- ---------- ----------
Income from investment operations:
Net investment income........................ 0.050 0.050 0.054 0.019
Less distributions:
Dividends from net investment income......... ( 0.050) ( 0.050) ( 0.054) ( 0.019)
-------- -------- -------- --------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= =========
Total Return.................................... 5.08% 5.12% 5.50% 5.27%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 37,987 $ 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........................ 4.97% 4.73% 5.37% 5.14%*
Expenses paid indirectly..................... 0.00% 0.00% 0.00% 0.01%*
Management and administration fees waived.... 0.02% 0.04% 0.07% 0.05%*
</TABLE>
* Annualized
+ Includes expenses paid indirectly.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
4. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
U.S. Treasury Portfolio
--------------------------------------------
July 29, 1999
PINNACLE SHARES (Commencement of Sales) to
- --------------- March 31, 2000
--------------
<S> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............ $ 1.00
-------------
Income from investment operations:
Net investment income........................ 0.035
Less distributions:
Dividends from net investment income......... ( 0.035 )
-----------
Net asset value, end of period.................. $ 1.00
============
Total Return.................................... 5.08%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 18,450
Ratios to average net assets:
Expenses (net of fees waived)+............... 0.20%*
Net investment income........................ 4.97%*
Expenses paid indirectly..................... 0.00%*
Management and administration fees waived.... 0.02%*
</TABLE>
* Annualized
+ Includes expenses paid indirectly.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
INDEPENDENT AUDITOR'S REPORT
================================================================================
To the Board of Trustees and Shareholders of
Institutional Daily Income Fund
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Money Market portfolio and the U.S. Treasury Portfolio (constituting
Institutional Daily Income Fund, hereafter referred to as the "Fund") at March
31, 2000, and the results of each of their operations, the changes in each of
their net assets and the financial highlights for the year then ended, in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with auditing standards generally accepted in the United States which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included confirmation
of securities at March 31, 2000 by correspondence with the custodian and
brokers, provides a reasonable basis for the opinion expressed above. The
financial statements for the year ended March 31, 1999, including the financial
highlights for each of the period prior to March 31, 2000 were audited by other
independent accountants whose report dated April 30, 1999 expressed an
unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, New York
May 9, 2000
- --------------------------------------------------------------------------------
<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 L.P.
600 Fifth Avenue
New York, New York 10020
IDI3/00A
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INSTITUTIONAL
DAILY
INCOME FUND
Annual Report
March 31, 2000
- --------------------------------------------------------------------------------
