MILLENNIUM INCOME TRUST
SEMI-ANNUAL REPORT
MARCH 31, 2000
(UNAUDITED)
TREASURERS' GOVERNMENT MONEY MARKET FUND
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MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES - MARCH 31, 2000 (UNAUDITED)
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ASSETS
Investments in securities, at cost and value (Note 2) $ 15,440,687
Investment in repurchase agreements (Note 2) 11,801,477
Receivable from Investment Manager (Note 3) 38,630
Interest receivable 81,104
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Total Assets 27,361,898
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LIABILITIES
Dividends payable 77,227
Other accrued expenses 74,187
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Total Liabilities 151,414
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NET ASSETS $ 27,210,484
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NET ASSETS CONSIST OF:
Paid-in capital $ 27,232,071
Accumulated net realized losses from security transactions (21,587)
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NET ASSETS $ 27,210,484
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SHARES OF BENEFICIAL INTEREST OUTSTANDING (UNLIMITED
NUMBER OF SHARES AUTHORIZED, NO PAR VALUE) 27,232,071
============
NET ASSET VALUE, REDEMPTION PRICE AND
OFFERING PRICE PER SHARE (NOTE 2) $ 1.00
============
See accompanying notes to financial statements.
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MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
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INVESTMENT INCOME
Interest income $ 791,170
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EXPENSES
Investment management fees (Note 3) 28,348
Fund accounting, shareholder services and
transfer agent fees (Note 3) 21,000
Professional fees 28,800
S & P rating expense 11,000
Custodian fees 4,720
Trustees' fees and expenses 1,500
Insurance expense 4,833
Registration and filing fees 1,896
Other expenses 396
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Total Expenses 102,493
Fees waived and expenses reimbursed by the
Investment Manager (Note 3) (67,058)
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Net Expenses 35,435
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NET INVESTMENT INCOME 755,735
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NET REALIZED LOSSES FROM SECURITY TRANSACTIONS (2,209)
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 753,526
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See accompanying notes to financial statements.
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MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
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SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
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FROM OPERATIONS
<S> <C> <C>
Net investment income $ 755,735 $ 1,587,947
Net realized losses from securities investments (2,209) (19,379)
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Net increase in net assets resulting from operations 753,526 1,568,568
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DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (755,735) (1,587,947)
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FROM CAPITAL SHARE TRANSACTIONS (a)
Proceeds from shares sold 74,703,943 171,492,461
Net asset value of shares issued in reinvestment
of distributions to shareholders 208,125 841,401
Payments for shares redeemed (113,240,149) (140,481,515)
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Net increase (decrease) in net assets from
capital share transactions (38,328,081) 31,852,347
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Total increase (decrease) in net assets (38,330,290) 31,832,968
NET ASSETS
Beginning of period 65,540,774 33,707,806
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End of period $ 27,210,484 $ 65,540,774
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</TABLE>
(a) Capital share transactions are identical to the dollar value shown.
See accompanying notes to financial statements.
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MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
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Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
SIX MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 1998 1997 1996
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(UNAUDITED)
PER SHARE DATA
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<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.027 0.049 0.053 0.051 0.052
Dividends from net investment income (0.027) (0.049) (0.053) (0.051) (0.052)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN 2.71% 5.03% 5.33% 5.06% 5.27%
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RATIOS/SUPPLEMENTAL DATA
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Net assets at end of year (000's) $ 27,210 $ 65,541 $ 33,708 $ 111 $ 132
Ratios net of fees waived and expenses
reimbursed by Investment Manager (Note 3)
Ratio of net expenses to average net assets 0.25%(a) 0.25% 0.22% 0.00% 0.00%
Ratio of net investment income to average
net assets 5.33%(a) 4.92% 5.33% 5.06% 5.25%
Ratios assuming no fees waived and expenses
reimbursed by Investment Manager (Note 3)
Ratio of expenses to average net assets 0.72%(a) 0.69% 0.80% 30.19% 14.42%
Ratio of net investment income to average
net assets 4.86%(a) 4.48% 4.74% -25.13% -9.17%
</TABLE>
(a) Annualized.
See accompanying notes to financial statements.
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MILLENNIUM INCOME TRUST
Treasurers' Government Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS - March 31, 2000 (unaudited)
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PAR VALUE
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U.S. GOVERNMENT AGENCY OBLIGATIONS - 56.7%
Federal Farm Credit Bank,
6.88%, due 05/01/2000 $ 400,000 $ 400,180
5.67%, due 05/01/2000 255,000 254,936
8.80%, due 06/28/2000 380,000 382,291
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1,037,407
Federal Home Loan Bank
discount note, due 04/12/2000 375,000 374,308
7.01%, due 04/20/2000 1,000,000 1,000,425
discount note, due 04/24/2000 5,000,000 4,980,993
6.185%, due 06/07/2000 100,000 100,000
adjustable rate note, due 7/31/2000 2,000,000 2,000,697
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8,456,423
Federal Home Loan Mortgage Corporation
discount note, due 04/04/2000 1,247,000 1,246,404
discount note, due 04/06/2000 1,973,000 1,971,430
discount note, due 04/11/2000 2,508,000 2,503,973
6.395%, due 05/16/2000 225,000 225,050
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5,946,857
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS $ 15,440,687
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REPURCHASE AGREEMENTS (a) - 43.4%
FACE AMOUNT
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Lehman Brothers,
6.07%,dated 03/31/2000, due 04/03/2000 $ 11,801,477 $ 11,801,477
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TOTAL INVESTMENTS AT VALUE (AMORTIZED COST $17,255,949) - 100.1% $ 27,242,164
Liabilities in Excess of Other Assets - (0.1%) (31,680)
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NET ASSETS - 100.0% $ 27,210,484
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(a) Repurchase agreements are fully collateralized by U.S. Government agency
securities.
See accompanying notes to financial statements.
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MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS - MARCH 31, 2000 (UNAUDITED)
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1. ORGANIZATION
The Millennium Income Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as an open-end diversified
management investment company. The Trust was established as a Massachusetts
business trust under a Declaration of Trust dated August 19, 1994. The
Trust consists of one series, the Treasurers' Government Money Market Fund
(the "Fund"). The Fund had no operations prior to the public offering
(which occurred on October 2, 1995) of shares except for the initial
issuance of shares; accordingly, no financial statement information is
presented for the period prior to fiscal 1996. The Fund's investment
objective is to seek high current income, consistent with protection of
capital. The Fund is expecting to maintain a constant net asset value.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Fund's significant accounting policies:
SECURITY VALUATION - Securities are valued on an amortized cost basis,
which approximates market value. This involves initially valuing a security
at its original cost and thereafter assuming a constant amortization to
maturity of any discount or premium.
SHARE VALUATION - The net asset value per share of the Fund is calculated
daily by dividing the total value of the Fund's assets, less liabilities,
by the number of shares outstanding.
INVESTMENT INCOME - Interest income is accrued as earned and includes,
where applicable, the pro-rata amortization of premium or accretion of
discount.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income are
declared daily and paid on the last business day of each month. Net
realized short-term capital gains, if any, may be distributed throughout
the year and net realized long-term capital gains, if any, are distributed
at least once each year. Income distributions and capital gain
distributions are determined in accordance with income tax regulations.
SECURITY TRANSACTIONS - Investment transactions are accounted for on the
trade date. Securities sold are determined on a specific identification
basis.
REPURCHASE AGREEMENTS - Repurchase agreements are collateralized by U.S.
Government securities and are valued at cost, which, together with accrued
interest, approximates market. Collateral for repurchase agreements is held
in safekeeping in the Fund's custodian customer-only account at the Federal
Reserve Bank of Cleveland. At the time the Fund enters into a repurchase
agreement, the seller agrees that the value of the underlying securities,
including accrued interest, will be equal to or exceed the face amount of
the repurchase agreement. In the event of a bankruptcy or other default of
the seller of a repurchase agreement, the Fund could experience both delays
in liquidating the underlying security and losses. These losses would equal
the face amount of the repurchase agreement(s) and accrued interest, net of
any proceeds received in liquidation of the underlying securities. To
minimize the possibility of loss, the Fund enters into repurchase
agreements only with institutions deemed to be creditworthy under
guidelines established by the Board of Trustees.
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MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS - MARCH 31, 2000 (UNAUDITED)
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ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities at the date of the financial statements and the reported amount
of income and expenses during the reporting period. Actual results could
differ from these estimates.
FEDERAL INCOME TAX - It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been
made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ended October 31) plus undistributed
amounts from prior years.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The President of the Trust is the chairman and controlling shareholder of
Trias Capital Management, Inc. ("Trias"), the Trust's investment manager.
INVESTMENT MANAGEMENT AGREEMENT
The Fund's investments are managed by Trias pursuant to the terms of a
management agreement. Under the terms of the management agreement, the Fund
pays Trias a fee, which is computed and accrued daily and paid monthly at
the annual rate of .20% of its average daily net assets. In order to
voluntarily reduce operating expenses, Trias has agreed to reimburse the
Fund the amount by which its total operating expenses exceeded .25% of
average daily net assets. For the six months ended March 31, 2000, Trias
waived its entire management fee of $28,348 and reimbursed the Fund for
$38,630 of other operating expenses.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGREEMENT
The Fund has a Transfer, Dividend Disbursing, Shareholder Service and Plan
Agency Agreement with Integrated Fund Services, Inc. (formerly Countrywide
Fund Services, Inc.). For the services provided under this agreement,
Integrated receives a monthly fee at an annual rate of $20 per shareholder
account, subject to a minimum monthly fee of $1,500. In addition, the Fund
pays out-of-pocket expenses including, but not limited to, postage and
supplies.
ACCOUNTING SERVICES AGREEMENT
The Fund has an Accounting Services Agreement with Integrated. For the
services provided under this agreement, Integrated receives a monthly fee.
Based on current net asset levels, this fee is $2,000 per month.
