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WINTHROP MUNICIPAL MONEY FUND
WINTHROP U.S. GOVERNMENT MONEY FUND
OCTOBER 31, 1998
ANNUAL
REPORT
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WINTHROP MONEY FUNDS -- STATEMENT OF INVESTMENTS October 31, 1998
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WINTHROP MUNICIPAL MONEY FUND
<TABLE>
<CAPTION>
MUNICIPAL PRINCIPAL
OBLIGATIONS -- 97.0% AMOUNT VALUE
---------- -----------
<S> <C> <C>
ALABAMA -- 2.4%
Decatur, AL IDR SWDR (Amoco Chemical Co. Project) (LOC: Amoco Guarantee Corp.) VRDN
3.800%'D'DD'............................................................................. $1,400,000 $ 1,400,000
-----------
ALASKA -- 1.7%
City of Valdez, Alaska Marine Terminal CP (LOC: Atlantic Richfield Co.) 3.400%, 11/06/98... 1,000,000 1,000,000
-----------
COLORADO -- 3.5%
City & County of Denver, CO CP (LOC: Bayerische Landesbank) 3.100%, 11/12/98............... 1,000,000 1,000,000
City & County of Denver, CO CP (LOC: Bayerische Landesbank) 3.300%, 11/17/98............... 1,000,000 1,000,000
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2,000,000
-----------
FLORIDA -- 5.2%
Florida Local Government Assistance CP (LOC: First Union National Bank of Florida) 3.300%,
12/09/98................................................................................. 2,000,000 2,000,000
Florida Local Government Assistance CP (LOC: First Union National Bank of Florida) 3.300%,
02/08/99................................................................................. 1,000,000 1,000,000
-----------
3,000,000
-----------
GEORGIA -- 1.7%
Municipal Gas Authority of Georgia Revenue Ser. C (LOC: Wachovia Bank, Bank of America,
Morgan Guaranty Trust Co., Bayerische Landesbank) VRDN 3.250%'D'DD'...................... 1,000,000 1,000,000
-----------
IDAHO -- 5.2%
Idaho State TANS
4.500%, 06/30/99......................................................................... 3,000,000 3,017,201
-----------
ILLINOIS -- 5.5%
Illinois Health CP (LOC: Bank of America) 3.450%, 01/11/99................................. 2,000,000 2,000,000
Southwestern Ill Development Authority SWDR (LOC: Shell Oil Co. Wood River Project) VRDN
3.800%'D'DD'............................................................................. 1,200,000 1,200,000
-----------
3,200,000
-----------
KANSAS -- 0.5%
Butler County, KS SWDR (Texaco Refining & Marketing) Ser. B (LOC: Texaco, Inc.) VRDN
3.850%'D'DD'............................................................................. 300,000 300,000
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KENTUCKY -- 3.9%
Pendleton County, KY CP (LOC: Bank of Australia) 2.950%, 02/11/99.......................... 2,250,000 2,250,000
-----------
LOUISIANA -- 7.3%
Lake Charles, LA Harbor & Terminal District Port Revenue (LOC: National Westminster Bank)
VRDN 3.150%'D'DD'........................................................................ $1,000,000 $ 1,000,000
St. Charles Parish, LA PCR (Shell Oil Co. Project) Ser. A (LOC: Shell Oil Co.) VRDN
3.800%'D'DD'............................................................................. 1,000,000 1,000,000
Plaquemines Parish, LA Environmental Revenue (British Petroleum Exploration & Oil, Inc.)
(LOC: British Petroleum) VRDN 3.850%'D'DD'............................................... 2,100,000 2,100,000
Calcasieu Parish, LA Public Trust Authority SWDR (WPT Corp. Project) (LOC: Morgan Guaranty
Trust Co.) VRDN 3.250%'D'DD'............................................................. 100,000 100,000
-----------
4,200,000
-----------
MARYLAND -- 1.7%
Baltimore County, MD PCR CP (LOC: Baltimore Gas & Electric Co.) 3.500%, 12/08/98........... 1,000,000 1,000,000
-----------
MASSACHUSETTS -- 3.5%
Massachusetts Water Resource CP (LOC: Morgan Guaranty Trust Co.) 3.500%, 12/15/98.......... 2,000,000 2,000,000
-----------
MICHIGAN -- 5.4%
Detroit, MI Water Supply System (LIQ: FGIC) VRDN 3.100%'D'................................. 800,000 800,000
Michigan State HDA (Pine Ridge) (LOC: Wachovia Bank) VRDN 3.000%'D'DD'..................... 1,300,000 1,300,000
Michigan State HDA (Harbortown, Ltd.) (LOC: Bankers Trust Co.) VRDN 3.225%'D'.............. 1,000,000 1,000,000
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3,100,000
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NEBRASKA -- 4.7%
Nebraska Higher Education Loan Program Ser. C (LOC: SLMA) VRDN 3.150%'D'................... 2,700,000 2,700,000
-----------
NEVADA -- 3.5%
Clark County, NV IDR (Cogeneration Association I Project) (LOC: Canadian Imperial Bank
Corp.) VRDN 3.850%'D'DD'................................................................. 2,000,000 2,000,000
-----------
NEW YORK -- 3.5%
New York, NY Ser. B (LOC: MBIA) VRDN 3.700%'D'............................................. 2,000,000 2,000,000
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</TABLE>
See notes to financial statements.
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WINTHROP MONEY FUNDS -- STATEMENT OF INVESTMENTS October 31, 1998 (continued)
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WINTHROP MUNICIPAL MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
OHIO -- 3.5%
Ohio State Air Quality Development Authority Revenue (JMG Funding Ltd. Partnership) (LOC:
Societe Generale) VRDN 3.100%'D'......................................................... $1,000,000 $ 1,000,000
Ohio State Public Facilities Commission (LOC: AMBAC) 6.250%, 05/01/99...................... 1,000,000 1,012,264
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2,012,264
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PENNSYLVANIA -- 15.4%
Alleghany County, PA IDA PCR CP (LOC: Commerzbank) 3.600%, 11/06/98........................ 2,000,000 2,000,000
Alleghany County, PA IDA PCR CP (LOC: Commerzbank) 3.300%, 01/21/99........................ 2,000,000 2,000,000
Carbon County, PA CP (LOC: National Westminster Bank) 3.400%, 01/13/99..................... 1,000,000 1,000,000
Philadelphia, PA School District TRANS (LOC: PNC Bank) 4.250%, 06/30/99.................... 2,500,000 2,509,876
Indiana County, PA IDA PCR (Conemaugh Project) (LOC: Union Bank of Switzerland) VRDN
3.100%'D'................................................................................ 1,400,000 1,400,000
-----------
8,909,876
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SOUTH CAROLINA -- 8.7%
Berkeley County, SC IDR (LOC: Nucor Corp.) VRDN 3.250%'D'.................................. 1,000,000 1,000,000
Berkeley County, SC IDR (LOC: Nucor Corp.) VRDN 3.250%'D'.................................. 1,000,000 1,000,000
South Carolina Public Power CP (LOC: Santee Cooper) 3.400%, 12/09/98....................... 3,000,000 3,000,000
-----------
5,000,000
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TEXAS -- 4.1%
Gulf Coast, TX IDA Marine Terminal Revenue (Amoco Oil Company Project) (LOC: Amoco
Guarantee) VRDN 3.800%'D'................................................................ 1,300,000 1,300,000
Gulf Coast Waste Disposal Authority of Texas CP (LOC: Exxon Corp.) 3.650%, 11/05/98........ $1,000,000 $ 1,000,000
Matagorda County, TX Naval District Revenue (Houston Lighting & Power Co.) (LOC: Union Bank
of Switzerland) 3.800%, 11/01/28......................................................... 100,000 100,000
-----------
2,400,000
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UTAH -- 0.9%
Salt Lake City, UT Airport Revenue Ser. A (LOC: Union Bank of Switzerland) VRDN 3.150%'D'.. 500,000 500,000
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WISCONSIN -- 3.5%
Wisconsin State Ser. A
5.750%, 05/01/99......................................................................... 2,000,000 2,019,921
-----------
WYOMING -- 1.7%
Lincoln County, WY PCR (Exxon Project) (LOC: Exxon Corp.) VRDN 3.700%'D'................... 1,000,000 1,000,000
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TOTAL MUNICIPAL OBLIGATIONS
(amortized cost $56,009,262)......................................................................... 56,009,262
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REGISTERED INVESTMENT COMPANIES -- 2.7%
(amortized cost $1,583,100)
<CAPTION>
SHARES
----------
<S> <C> <C>
Federated Tax-Free Obligations Fund........................................................ 1,583,100 1,583,100
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TOTAL INVESTMENTS -- 99.7%
(amortized cost $57,592,362)......................................................................... 57,592,362
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CASH AND OTHER ASSETS
NET OF LIABILITIES -- 0.3%............................................................................. 185,401
-----------
NET ASSETS -- 100.00%.................................................................................... $57,777,763
-----------
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</TABLE>
'DD' Subject to Alternative Minimum Tax.
'D' Securities payable on demand. Rate shown is rate in effect at October 31,
1998. This rate is subject to change and is based on bank prime rates or an
index of market interest rates.
ABBREVIATIONS USED IN THE PORTFOLIO
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance
Corporation
CP Commercial Paper
FGIC Financial Guaranty Insurance Corporation
HDA Housing Development Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue Bond
LIQ Liquidity Agreement
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance Insurance
Corporation
PCR Pollution Control Revenue Bond
SLMA Student Loan Marketing Association
SWDR Solid Waste Disposal Revenue
TANS Tax Anticipation Notes
TRANS Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Note
</TABLE>
See notes to financial statements.
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WINTHROP MONEY FUNDS -- STATEMENT OF INVESTMENTS October 31, 1998 (continued)
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WINTHROP U.S. GOVERNMENT MONEY FUND
<TABLE>
<CAPTION>
U.S. GOVERNMENT PRINCIPAL
AGENCIES -- 62.4% AMOUNT VALUE
---------- -----------
<S> <C> <C>
Federal Farm Credit Bank
5.500%, 11/02/98......................................................................... $1,000,000 $ 999,998
5.700%, 11/03/98......................................................................... 2,000,000 2,000,006
5.500%, 03/08/99......................................................................... 500,000 500,515
Federal Farm Credit Bank Discount Notes
5.140%, 11/12/98......................................................................... 936,000 934,530
Federal Home Loan Bank
5.415%, 02/10/99......................................................................... 500,000 500,144
5.540%, 02/20/99......................................................................... 3,000,000 3,000,433
5.630%, 05/05/99......................................................................... 250,000 250,601
5.630%, 06/15/99......................................................................... 395,000 396,084
Federal Home Loan Mortgage Corp. Discount Notes
4.820%, 11/04/98......................................................................... 2,000,000 1,999,197
5.360%, 11/10/98......................................................................... 1,109,000 1,107,514
4.820%, 11/13/98......................................................................... 5,183,000 5,174,673
5.450%, 11/13/98......................................................................... 402,000 401,270
5.140%, 11/16/98......................................................................... 710,000 708,479
5.340%, 11/19/98......................................................................... 2,000,000 1,994,660
5.050%, 12/04/98......................................................................... 625,000 622,107
5.100%, 12/10/98......................................................................... 910,000 904,972
5.050%, 12/28/98......................................................................... 322,000 319,425
5.000%, 02/25/99......................................................................... 495,000 487,025
Federal National Mortgage Association
7.050%, 12/10/98......................................................................... 1,505,000 1,507,007
5.500%, 02/12/99......................................................................... 1,890,000 1,890,000
5.600%, 04/22/99......................................................................... 1,000,000 999,687
5.650%, 05/26/99......................................................................... 1,420,000 1,423,184
Federal National Mortgage Association Discount Notes
5.100%, 12/16/98......................................................................... 845,000 839,613
5.280%, 12/18/98......................................................................... 2,500,000 2,482,767
5.260%, 01/29/99......................................................................... 604,000 596,146
5.000%, 03/15/99......................................................................... 390,000 382,742
Student Loan Marketing Association
5.740%, 12/17/98......................................................................... 250,000 250,024
5.400%, 02/10/99......................................................................... 2,000,000 1,999,693
5.630%, 06/02/99......................................................................... 730,000 732,094
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TOTAL U.S. GOVERNMENT AGENCIES
(amortized cost $35,404,590).......................................................................... 35,404,590
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REPURCHASE
AGREEMENTS -- 37.4%
JP Morgan 5.550%, dated 10/30/98 due 11/02/98 in the amount of $11,207,181 (fully
collateralized by $6,986,000 U.S. Treasury Bonds, 11.750%, 11/15/14, value
$11,203,553)............................................................................. $11,202,000 $11,202,000
Chase 4.950%, dated 10/30/98 due 11/04/98 in the amount of $10,009,625 (fully
collateralized by $1,000,000 Federal Home Loan Mortgage Corp. 0.000%, 02/01/28, value
$184,968 and $13,655,000 Federal Home Loan Mortgage Corp. 0.000%, 04/01/28, value
$10,117,976)............................................................................. 10,000,000 10,000,000
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TOTAL REPURCHASE AGREEMENTS
(amortized cost $21,202,000).......................................................................... 21,202,000
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TOTAL INVESTMENTS -- 99.8%
(amortized cost $56,606,590).......................................................................... 56,606,590
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CASH AND OTHER ASSETS
NET OF LIABILITIES -- 0.2%............................................................................ 90,372
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NET ASSETS -- 100.00%................................................................................... $56,696,962
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-----------
</TABLE>
See notes to financial statements.
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WINTHROP MONEY FUNDS -- STATEMENT OF ASSETS AND LIABILITIES October 31, 1998
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<TABLE>
<CAPTION>
MUNICIPAL U.S. GOVERNMENT
MONEY FUND MONEY FUND
----------- ---------------
<S> <C> <C>
ASSETS:
Investments in securities, at value (cost $57,592,362 and $56,606,590, respectively)
(including repurchase agreements of $21,202,000 for the U.S. Government Money
Fund)............................................................................ $57,592,362 $56,606,590
Cash................................................................................ 3,243 7,302
Interest receivable................................................................. 354,212 284,398
Deferred organization costs (Note A)................................................ 46,874 46,874
----------- ---------------
Total assets........................................................................ 57,996,691 56,945,164
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LIABILITIES:
Payable to investment advisor....................................................... 20,650 20,331
Payable to distributor.............................................................. 12,906 12,707
Dividends payable................................................................... 62,440 109,953
Accrued expenses and other liabilities.............................................. 122,932 105,211
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Total liabilities................................................................... 218,928 248,202
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NET ASSETS............................................................................ $57,777,763 $56,696,962
----------- ---------------
----------- ---------------
NET ASSETS CONSIST OF:
Capital paid-in..................................................................... $57,777,763 $56,695,683
Accumulated net realized gain on investments........................................ -- 1,279
----------- ---------------
$57,777,763 $56,696,962
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----------- ---------------
Shares outstanding.................................................................. 57,777,763 56,695,683
----------- ---------------
----------- ---------------
Net asset value and redemption value per share...................................... $1.00 $1.00
----- -----
----- -----
</TABLE>
STATEMENT OF OPERATIONS for the year ended October 31, 1998
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<TABLE>
<CAPTION>
MUNICIPAL U.S. GOVERNMENT
MONEY FUND MONEY FUND
---------- ---------------
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................................. $2,207,956 $ 2,383,241
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EXPENSES:
Investment advisory fees (Note B).................................................... 246,668 171,144
Distribution fees (Note B)........................................................... 154,168 106,965
Registration fees.................................................................... 55,810 41,000
Transfer agent fees.................................................................. 29,100 33,800
Custodian fees....................................................................... 55,000 47,000
Auditing fees........................................................................ 24,500 17,000
Printing fees........................................................................ 17,000 14,500
Trustees' fees....................................................................... 9,500 6,500
Legal fees........................................................................... 17,500 14,000
Miscellaneous........................................................................ 24,777 24,527
Amortization of organization costs (Note A).......................................... 14,129 14,129
---------- ---------------
Total expenses.................................................................... 648,152 490,565
Less expenses reimbursed by investment advisor.................................... (93,148) (105,492)
---------- ---------------
Net expenses...................................................................... 555,004 385,073
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NET INVESTMENT INCOME.................................................................. 1,652,952 1,998,168
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NET REALIZED GAIN ON INVESTMENTS....................................................... -- 1,289
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NET INCREASE IN NET ASSETS FROM OPERATIONS............................................. $1,652,952 $ 1,999,457
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</TABLE>
See notes to financial statements.
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WINTHROP MONEY FUNDS -- STATEMENT OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
MUNICIPAL U.S. GOVERNMENT
MONEY FUND MONEY FUND
--------------------------- ---------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
10/31/98 10/31/97* 10/31/98 10/31/97*
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income..................................... $ 1,652,952 $ 575,232 $ 1,998,168 $ 795,296
Net realized gain (loss) on investments................... -- -- 1,289 (10)
----------- ------------ ----------- ------------
Net increase in net assets from operations................ 1,652,952 575,232 1,999,457 795,286
----------- ------------ ----------- ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income......................................... (1,652,952) (575,232) (1,998,168) (795,296)
----------- ------------ ----------- ------------
CAPITAL STOCK TRANSACTIONS -- (NET) Note C.................. 19,096,408 38,681,355 21,521,599 35,174,084
----------- ------------ ----------- ------------
Total increase in net assets.............................. 19,096,408 38,681,355 21,522,888 35,174,074
NET ASSETS:
Beginning of period....................................... 38,681,355 -- 35,174,074 --
----------- ------------ ----------- ------------
End of period............................................. $57,777,763 $38,681,355 $56,696,962 $35,174,074
----------- ------------ ----------- ------------
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</TABLE>
*Commencement of operations was February 24, 1997.
See notes to financial statements.
WINTHROP MONEY FUNDS -- NOTES TO FINANCIAL STATEMENTS October 31, 1998
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NOTE (A) SIGNIFICANT ACCOUNTING POLICIES. Winthrop Money Funds ('Fund' or
'Funds') consists of two portfolios (the 'Portfolios'), the Winthrop Municipal
Money Fund and the Winthrop U.S. Government Money Fund (together the 'Money
Funds'), each a separate diversified series of the Winthrop Opportunity Funds
(the 'Trust'). In addition, the Trust consists of the Winthrop International
Equity Fund and the Winthrop Developing Markets Fund. The Trust was organized as
a Delaware business trust under the laws of Delaware on May 31, 1995 and is
registered under the Investment Company Act of 1940 (the 'Act'), as amended, as
an open-end management investment company. The Money Funds commenced operations
on February 24, 1997.
The Municipal Money Fund seeks maximum current income, consistent with liquidity
and safety of principal, that is exempt from Federal income taxes by investing
principally in a diversified portfolio of municipal securities. The investment
objective of the U.S. Government Money Fund is maximum current income,
consistent with liquidity and safety of principal, by investing in a portfolio
of U.S. Government securities.
Each Portfolio is considered to be a separate entity for financial reporting and
tax purposes. It is the Funds' policy to maintain a continuous net asset value
of $1.00 per share for each Portfolio. The Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that each Portfolio will be able to maintain
a stable net asset value of $1.00 per share.
The Trust accounts separately for the assets, liabilities and operations of each
Portfolio. Expenses directly attributable to each Portfolio are charged to that
Portfolio's operations; expenses which are applicable to all portfolios are
allocated among them on a pro rata basis. The Funds' financial statements are
prepared in accordance with generally accepted accounting principles which may
require the use of management estimates and assumptions. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Funds.
(1) SECURITY VALUATION: Securities are valued at amortized cost, which has
been determined by the Funds' Board of Trustees to represent the fair value of
the Funds' investments. This involves initially valuing a security at its
original cost and thereafter assuming a constant amortization to maturity of
any discount or premium.
(2) REPURCHASE AGREEMENTS: The Funds may enter into repurchase agreements with
financial institutions, deemed to be creditworthy by the Funds' Advisor,
subject to the seller's agreement to repurchase and the Funds' agreement to
resell such securities at a mutually agreed-upon price. Securities purchased
subject to repurchase agreements are deposited with the Funds' custodian or
custodians authorized in accordance with guidelines approved by the Funds'
Trustees. Pursuant to the terms of the repurchase agreement, such securities
must have an aggregate market value greater than or equal to the repurchase
price plus accrued interest at all times. If the value of the underlying
securities falls below the value of the repurchase price plus accrued
interest, the Funds will require the seller to deposit additional collateral
by the next business day. If the request for additional collateral is not met,
or the seller defaults on its repurchase obligation, the Funds maintain the
right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
(3) FEDERAL INCOME TAXES: The Funds intend to continue to be treated as
'regulated investment companies' under Sub-chapter M of the Internal Revenue
Code and to distribute substantially all of their net taxable income.
<PAGE>
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WINTHROP MONEY FUNDS -- NOTES TO FINANCIAL STATEMENTS October 31, 1998
(continued)
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Accordingly, no provisions for federal income taxes have been made in the
accompanying financial statements. For federal income tax purposes, the cost
of securities owned at October 31, 1998, was substantially the same as the
cost of securities for financial statement purposes.
(4) INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Discounts and premiums on securities purchased are
amortized in accordance with income tax regulations which approximate
generally accepted accounting principles. Security gains and losses are
determined on the identified cost basis.
(5) DIVIDENDS AND DISTRIBUTIONS: It is the policy of the Funds to declare
dividends daily from net investment income. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Funds may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Funds not to distribute such gain.
(6) DEFERRED ORGANIZATION COSTS: The Funds will reimburse the Advisor for
costs incurred in connection with their organization. The costs are being
amortized on a straight-line basis over sixty months commencing February 24,
1997.
NOTE (B) ADVISORY AND DISTRIBUTION SERVICES AGREEMENT: DLJ Investment Management
Corp. (the 'Advisor') is a wholly-owned subsidiary of Donaldson, Lufkin &
Jenrette Securities Corporation, which is a wholly-owned subsidiary of
Donaldson, Lufkin and Jenrette, Inc. ('DLJ'). DLJ is an independently operated,
indirect subsidiary of The Equitable Companies, Incorporated, a holding company
controlled by AXA-UAP ('AXA'), a member of a large French insurance group. AXA
is indirectly controlled by a group of four French mutual insurance companies.
Under its Advisory Agreement with the Funds, the Advisor will provide investment
advisory services and order placement facilities for the Funds and pay all
compensation of Trustees of the Funds who are affiliated persons of the Advisor.
The Advisor or its affiliates will also furnish the Funds, without charge,
management supervision and assistance and office facilities. The Funds will pay
the Advisor at the following annual percentage rates of the average daily net
assets of each Portfolio: .40 of 1% of each Portfolio's first $1 billion and .35
of 1% of the balance. Such fees will be accrued daily and paid monthly.
For the period February 24, 1997 through October 31, 1999, the Advisor has
agreed to voluntarily reduce its management fees and the Advisor or its
affiliates have agreed to reimburse operating expenses by the amount that total
fund operating expenses exceed 0.90% of the average daily net assets of each
Fund. After October 31, 1999, the Advisor or its affiliates may, in their sole
discretion, determine to discontinue this practice with respect to either Fund.
As a result of the voluntary assumption of expenses, the Municipal Money Fund
and U.S. Government Money Fund were reimbursed $93,148 and $105,492,
respectively, during the year ended October 31, 1998.
Pursuant to Rule 12b-1 under the Act, the Fund has entered into a Distribution
Services Agreement (the 'Agreement') with Donaldson, Lufkin & Jenrette
Securities Corporation, the Fund's Distributor, under which the Fund pays a
distribution services fee to the Distributor at an annual rate of up to .25 of
1% of its average daily net assets. Under the Agreement, each Fund is obligated
to pay distribution and/or service fees to the Distributor for its distribution
and service activities as reimbursement for specific expenses incurred. In
addition, the Agreement provides that the Advisor may use its own resources
including fees from investment companies (including the Fund) to finance the
distribution of the Fund's shares.
Each Trustee who is not an affiliated person receives an attendance fee of
$2,000 per meeting. In addition, each unaffiliated Trustee who is a member of
the audit committee receives an attendance fee of $1,000 per meeting. Attendance
fees are charged to all series of the Trust and are allocated on a pro rata
basis.
NOTE (C) SHARES OF BENEFICIAL INTEREST: There is an unlimited number of shares
($0.001 par value) authorized. Transactions in shares of beneficial interest
were as follows ($1.00 per share):
<TABLE>
<CAPTION>
MUNICIPAL MONEY FUND U.S. GOVERNMENT MONEY FUND
------------------------------------- -------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997* OCTOBER 31, 1998 OCTOBER 31, 1997*
---------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Shares sold...................................... $ 334,233,077 $ 152,516,396 $211,453,991 $ 155,268,954
Shares issued through reinvestment of
dividends...................................... 1,635,577 522,240 1,942,413 689,953
---------------- ----------------- ---------------- -----------------
335,868,654 153,038,636 213,396,404 155,958,907
---------------- ----------------- ---------------- -----------------
Shares redeemed.................................. (316,772,246) (114,357,281) (191,874,805) (120,784,823)
---------------- ----------------- ---------------- -----------------
Net increase..................................... $ 19,096,408 $ 38,681,355 $ 21,521,599 $ 35,174,084
---------------- ----------------- ---------------- -----------------
---------------- ----------------- ---------------- -----------------
</TABLE>
* Commencement of operations was February 24, 1997.
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for a share of capital stock
outstanding throughout each period presented. This information has been derived
from information provided in the financial statements.
<TABLE>
<CAPTION>
MUNICIPAL MONEY FUND U.S. GOVERNMENT MONEY FUND
---------------------------- ----------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
10/31/98 10/31/97'D' 10/31/98 10/31/97'D'
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income...................................... 0.027 0.020 0.047 0.032
Dividends from net investment income....................... (0.027) (0.020) (0.047) (0.032)
---------- ------------ ---------- ------------
Net asset value, end of period............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
Total return'D'D'.......................................... 2.72% 2.90%(1) 4.79% 4.68%(1)
Ratio of expenses to average net assets(2)................. 0.90% 0.90%(1) 0.90% 0.90%(1)
Ratio of net investment income to average net assets(2).... 2.68% 2.87%(1) 4.68% 4.65%(1)
Net assets, end of period (000's omitted).................. $ 57,778 $ 38,681 $ 56,697 $ 35,174
</TABLE>
'D' Commencement of operations was February 24, 1997
'D'D' Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period, and redemption on
the last day of the period.
(1) Annualized
(2) Net of voluntary assumption by Advisor of expenses, expressed as a
percentage of average net assets for the periods ended 10/31/98 and 97,
respectively, as follows: Municipal Money Fund, .15% and .40% (annualized),
and U.S. Government Money Fund, .25% and .45% (annualized).
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
Shareholders and Board of Trustees
Winthrop Municipal Money Fund and Winthrop U.S. Government Money Fund
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Winthrop Municipal Money Fund and Winthrop U.S.
Government Money Fund (two of the Funds constituting Winthrop Opportunity Funds)
as of October 31, 1998, and the related statement of operations for the year
then ended and the statement of changes in net assets and financial highlights
for the year then ended and for the period from February 24, 1997 (commencement
of operations) to October 31, 1997. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits 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 financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1998 by correspondence with the custodian and
brokers. 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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Winthrop Municipal Money Fund and Winthrop U.S. Government Money Fund at October
31, 1998, the results of their operations for the year then ended, and the
changes in their net assets and the financial highlights for the year then ended
and for the period from February 24, 1997 to October 31, 1997, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
December 10, 1998
<PAGE>
<PAGE>
WINTHROP MONEY FUNDS
(800) 225-8011
TRUSTEES
G. MOFFETT COCHRAN ROBERT E. FISCHER
WILMOT H. KIDD, III MARTIN JAFFE
JOHN W. WALLER, III
OFFICERS
G. MOFFETT COCHRAN, Chairman and President
JAMES A. ENGLE, Vice President
MARTIN JAFFE, Vice President, Secretary and Treasurer
BRIAN A. KAMMERER, Vice President
INVESTMENT ADVISER
DLJ INVESTMENT MANAGEMENT CORP.
277 Park Avenue, New York, NY 10172
CUSTODIAN
CITIBANK, N.A.
111 Wall Street, New York, NY 10043
TRANSFER AGENT
FIRST DATA INVESTOR SERVICES GROUP, INC.
P.O. Box 61503 (3200 Horizon Drive)
King of Prussia, PA 19406
DISTRIBUTOR
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue, New York, NY 10019
LEGAL COUNSEL
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 Third Avenue, New York, NY 10022
This report is submitted for the general information of the stockholders of the
Fund. It is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus, which should be
read carefully before investing.
WMF-2 12/98
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as.................................... 'D'
The double dagger symbol shall be expressed as............................. 'DD'
