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FLORIDA
DAILY
MUNICIPAL
INCOME
FUND
Annual Report
August 31, 1995
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<PAGE>
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FLORIDA
DAILY MUNICIPAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND 212/830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the annual report of Florida Daily Municipal Income
Fund for the period September 19, 1994 (Commencement of Operations) through
August 31, 1995.
The Fund had net assets of $31,147,839 and 263 active shareholders as of August
31, 1995. The Federal Reserve, during the last fiscal year, has lowered the
Federal Funds rate by twenty-five basis points. Rates on tax exempt investments
have fallen accordingly.
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
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Tax Exempt Commercial Paper (17.34%)
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$ 1,300,000 City of Jacksonville, FL - Series A 09/08/95 3.75% $ 1,300,000 P1 A1
1,100,000 City of Orlando, FL 10/05/95 3.60 1,100,000 P1 A1+
1,000,000 Florida Municipal Power Agency RB
(Initial Pooled Loan Project) - Series A
LOC First Union National Bank 11/17/95 3.70 1,000,000 VMIG-1 A1+
2,000,000 Sunshine State Government Financing
Commission RB - Series 1986
LOC Union Bank of Switzerland/Morgan Guaranty Trust Company
/National Westminster Bank PLC 11/15/95 3.40 2,000,000 VMIG-1
- ----------- ----------
5,400,000 Total Tax Exempt Commercial Paper 5,400,000
- ----------- ----------
<CAPTION>
Other Tax Exempt Investments (3.21%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Miami, FL TAN 09/28/95 4.04% $ 1,000,639 MIG-1 SP-1+
- ----------- -----------
1,000,000 Total Other Tax Exempt Investments 1,000,639
---------- -----------
<CAPTION>
Other Variable Rate Demand Instruments (c) (75.80%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 City of Naples, FL
(Naples County Hospital Incorporated Project)
LOC Mellon Bank, N.A. 11/01/22 3.65% $ 100,000 A1
300,000 Dade County, FL HFA
LOC Trust Co. Bank of Atlanta 09/01/05 3.45 300,000 A1+
1,000,000 Dade County, FL IDA PCRB
(Florida Power & Light Co. Project) 04/01/20 3.35 1,000,000 VMIG-1 A1+
200,000 Dade County, Florida Capital Asset - Subseries 1990
LOC Sanwa Bank, Ltd. 10/01/10 3.70 200,000 VMIG-1 A1+
2,700,000 Dade County, FL IDA RB
(Florida Convalescent Association)
LOC Bank of Tokyo, Ltd. 12/01/11 3.85 2,700,000 VMIG-1
2,300,000 St. John's County, FL HRB
(Flagler Hospital, Inc.) - Series 1986A
LOC Kredietbank 08/01/16 3.65 2,300,000 VMIG-1
1,000,000 Florida HFA MHRB (Falls of Venice Project) (b)
LOC PNC Bank 12/01/11 4.00 1,000,000
100,000 Gulf Breeze, FL RB - Series 1985B
FGIC Insured 12/01/15 3.55 100,000 VMIG-1 A1+
1,400,000 Gulf Breeze, FL RB - Series 1985C
FGIC Insured 12/01/15 3.55 1,400,000 VMIG-1 A1
1,300,000 Indian River County, FL IDRB
(Florida Convention Centers Project)
LOC Toronto-Dominion Bank 01/01/11 4.20 1,300,000 P1
</TABLE>
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See Notes to Financial Statements.
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<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Other Variable Rate Demand Instruments (c) (Continued)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,700,000 Jacksonville, FL HRB
(University Medical Center) - Series 1989
LOC Sumitomo Bank, Ltd. 02/01/19 3.75% $ 2,700,000 VMIG-1
1,000,000 Jacksonville, FL HRB (Baptist Medical Center Project)
MBIA Insured 06/01/08 3.55 1,000,000 VMIG-1 A1+
1,000,000 Jacksonville, FL IDRB
(University of Florida Health Science Center) - Series 1989
LOC Barnett Bank of Jacksonville 07/01/19 3.65 1,000,000 VMIG-1
710,000 Lee, FL IDRB (Christian & Missionary Alliance) - Series 1985
LOC Banque Paribas 04/01/10 3.68 710,000 A1
200,000 Monroe County, FL IDA
(Beverly Enterprises) - Series 1985
LOC Morgan Guaranty Trust Company 06/01/10 3.55 200,000 VMIG-1
900,000 Ocean Highway & Port Authority FL IDA RB
(Port, Airport & Marina Improvement)
LOC ABN AMRO Bank N.V. 12/01/20 3.70 900,000 VMIG-1 A1+
700,000 Orange County, FL Health Facilities Authority
(Mayflower Retirement Co. Project) - Series 1988
LOC Banque Paribas 03/01/18 3.65 700,000 A1
1,000,000 Orange County, FL IDRB
(Florida Convention Centers Project) - Series A
LOC Toronto-Dominion Bank 01/01/11 4.00 1,000,000 P1
2,000,000 Palm Beach County, FL
(Norton Gallery of Art Project) - Series 1995
LOC Northern Trust 05/01/25 3.60 2,000,000 A1+
1,000,000 Pinellas County, FL (Summit McGregor Property)
LOC Nations Bank 07/01/07 3.75 1,000,000 P1 A1
1,000,000 Pinellas County, FL Industry Council IDRB
(Genca Corporation Project) (b)
LOC PNC Bank 11/01/09 3.90 1,000,000
1,000,000 Pinellas County, FL (Indian Country Project) (b)
LOC Wachovia Bank & Trust Co., N.A. 10/01/01 3.60 1,000,000
- ----------- ------------
23,610,000 Total Other Variable Rate Demand Instruments 23,610,000
- ----------- ------------
Total Investments (96.35%) (Cost $30,010,639+) 30,010,639
Cash and Other Assets in Excess of Liabilities (3.65%) 1,137,200
------------
Net Assets (100.00%) $ 31,147,839
============
Net Asset Value, offering and redemption price per share:
Class A Shares, 20,976,330 Shares Outstanding (Note 3) $ 1.00
============
Class B Shares, 10,175,406 Shares Outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
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See Notes to Financial Statements.
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1995
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FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings noted are those of the holding company of the bank whose letter
of credit collateralizes such instruments. P1 and A1+ are the highest
ratings assigned for tax exempt commercial paper.
(b) Securities that are not rated which the Fund's Board of Trustees has
determined to be of comparable quality to those rated securities in which
the Fund invests.
(c) Securities payable on demand at par including accrued interest (usually
with seven days notice) and unconditionally secured as to principal and
interest by a bank letter of credit. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indices.
The rate shown is the rate in effect at the date of this statement.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
HFA = Housing Finance Authority MHRB = Multi-family Housing Revenue Bond
HRB = Hospital Revenue Bond PCRB = Pollution Control Revenue Bond
IDA = Industrial Development Authority RB = Revenue Bond
IDRB = Industrial Development Revenue Bond TAN = Tax Anticipation Note
</TABLE>
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See Notes to Financial Statements.
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF OPERATIONS
SEPTEMBER 19, 1994 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1995
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest....................................................................$ 1,627,270
-----------------
Expenses: (Note 2)
Investment management fee................................................... 165,350
Administration fee.......................................................... 82,675
Shareholder servicing fee................................................... 63,089
Custodian, shareholder servicing and related shareholder expenses........... 117,228
Legal, compliance and filing fees........................................... 20,617
Audit and accounting........................................................ 53,313
Trustees' fees.............................................................. 6,116
Amortization of organization expenses....................................... 10,896
Other....................................................................... 2,923
-----------------
Total expenses........................................................... 522,207
Less: Fees waived and expenses reimbursed (Note 2).......................( 398,419)
-----------------
Net expenses............................................................. 123,788
-----------------
Net investment income....................................................... 1,503,482
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments.....................................( 3,897)
-----------------
Increase in net assets from operations......................................$ 1,499,585
=================
</TABLE>
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See Notes to Financial Statements.
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
September 19, 1994
(Commencement of Operations)
to August 31, 1995
------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income.................................................... $ 1,503,482
Net realized gain (loss) on investments.................................. ( 3,897)
-----------------
Increase (decrease) in net assets from operations............................ 1,499,585
Dividends to shareholders from net investment income
Class A ................................................................. ( 894,135)
Class B.................................................................. ( 609,347)
Transactions in shares of beneficial interest (Note 3)
Class A ................................................................. 20,976,330
Class B.................................................................. 10,075,406
-----------------
Total increase (decrease).............................................. 31,047,839
Net assets:
Beginning of period...................................................... 100,000
-----------------
End of period............................................................ $ 31,147,839
=================
</TABLE>
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See Notes to Financial Statements.
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FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
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1. Summary of Accounting Policies.
Florida Daily Municipal Income Fund is a no-load, non-diversified, open-end
management investment company registered under the Investment Company Act of
1940. The Fund was established as a Massachusetts Business Trust on August 31,
1994 and commenced operations on September 19, 1994. The Fund has two classes of
stock authorized, Class A and Class B. The Class A shares are subject to a
service fee pursuant to the Distribution and Service Plan. The Class B shares
are not subject to a service fee. In all other respects the Class A and Class B
shares represent the same interest in the income and assets of the Fund. Its
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. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) 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.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management L.P. (Manager) at the annual rate of .40%
of the Fund's average daily net assets. The Manager is required to reimburse the
Fund for its expenses (exclusive of interest, taxes, brokerage, and
extraordinary expenses) to the extent that such expenses, including the
investment management and the shareholder servicing and administration fees, for
any fiscal year exceed the limits on investment company expenses prescribed by
any state in which the Fund's shares are qualified for sale. No such
reimbursement was required for the period ended August 31, 1995.
Pursuant to an Administrative Services Contract the Fund pays to the Manager an
annual fee of .20% of the Fund's average daily net assets.
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FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and Reich & Tang Distributors L.P. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement,
only with respect to Class A shares of the Fund. For its services under the
Shareholder Servicing Agreement, the Distributor receives from the Fund with
respect only to the Class A shares, a fee equal to .25% of the Fund's average
daily net assets. There were no additional expenses borne by the Fund pursuant
to the Distribution Plan.
During the period ended August 31, 1995, the Manager and the Distributor
voluntarily waived investment management fees and administration fees of
$165,350 and $82,675, respectively, and reimbursed other operating expenses
amounting to $150,394.
Fees are paid to Trustees who are unaffiliated with the Manager on the basis of
$1,000 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Custodian,
shareholder servicing and related shareholder expenses" are fees of $2,141 paid
to Fundtech Services L.P., an affiliate of the Manager, as servicing agent for
the Fund.
3. Transactions in Shares of Beneficial Interest.
At August 31, 1995, an unlimited number of shares of beneficial interest ($.01
par value) were authorized and capital paid in amounted to $31,151,736.
Transactions, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Class A
October 6, 1994
(Commencement of Operations)
to August 31, 1995
------------------
<S> <C>
Sold............................................... 221,569,078
Issued on reinvestment of dividends................ 816,529
Redeemed........................................... ( 201,409,277)
-----------------
Net increase (decrease)............................ 20,976,330
=================
</TABLE>
<TABLE>
<CAPTION>
Class B
September 19, 1994
(Commencement of Operations)
to August 31, 1995
------------------
<S> <C>
Sold............................................... 185,971,722
Issued on reinvestment of dividends................ 576,818
Redeemed........................................... ( 176,473,134)
----------------
Net increase (decrease)............................ 10,075,406
================
</TABLE>
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<PAGE>
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4. Sales of Securities.
Accumulated undistributed realized losses at August 31, 1995 amounted to $3,897.
Such amount represents tax basis capital losses which may be carried forward to
offset future capital gains. Such losses expire August 31, 2003.
5. Concentration of Credit Risk.
The Fund invests primarily in obligations of political subdivisions of the State
of Florida and, accordingly, is subject to the credit risk associated with the
non-performance of such issuers. Approximately 77% of these investments are
further secured, as to principal and interest, by letters of credit issued by
financial institutions. The Fund maintains a policy of monitoring its exposure
by reviewing the credit worthiness of the issuers, as well as that of the
financial institutions issuing the letters of credit, and by limiting the amount
of holdings with letters of credit from one financial institution.
6. Selected Financial Information.
<TABLE>
<CAPTION>
Period ended
August 31, 1995 **
--------------------------------
Class A Class B
------- -------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C>
Net asset value, beginning of period.... $ 1.000 $ 1.000
------------ ------------
Income from investment operations
Net investment income................. 0.032 0.036
Less distributions:
Dividends from net investment income.... ( 0.032) ( 0.036)
------------ ------------
Net asset value, end of period.......... $ 1.000 $ 1.000
============ ============
Total Return............................ 3.60%* 3.84%*
Ratios/Supplemental Data................
Net assets, end of period(000).......... $ 20,974 $ 10,174
Ratios to average net assets:
Expenses............................. 0.40%+* 0.14%+*
Net investment income................ 3.54%* 3.78%*
* Annualized.
** Class A commenced operations on October 6, 1994 and Class B commenced
operations on September 19, 1994.
+ Net of management and administration fees waived and expenses reimbursed
equivalent to .95% of average net assets.
</TABLE>
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<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
INDEPENDENT AUDITOR'S REPORT
===============================================================================
The Board of Trustees and Shareholders
Florida Daily Municipal Income Fund
We have audited the accompanying statement of net assets of Florida Daily
Municipal Income Fund as of August 31, 1995 and the related statement of
operations, the statement of changes in net assets and the selected financial
information for the period from September 19, 1994 (Commencement of Operations)
to August 31, 1995. These financial statements and selected financial
information are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and selected financial
information based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and selected financial
information are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and selected financial information
referred to above present fairly, in all material respects, the financial
position of Florida Daily Municipal Income Fund as of August 31, 1995, the
results of its operations, the changes in its net assets and the selected
financial information for the period indicated, in conformity with generally
accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
September 27, 1995
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[This Page Intentionally Left Blank.]
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This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
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Florida Daily Municipal 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, Transfer Agent & Dividend
Disbursing Agent
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
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