<PAGE> 1
WEISS TREASURY FUND
A Letter from the President
Dear Shareholder,
It is with pleasure that we send you the Annual Report to Shareholders
for the fiscal year ended December 31, 1998 for the Weiss Treasury Fund (the
"Trust"), consisting of Weiss Treasury Only Money Market Fund and Weiss Treasury
Bond Fund. As of the end of the year, Weiss Treasury Bond Fund had not yet
commenced operations.
In 1998, we saw broad moves in interest rates on Treasury securities.
For instance, we started the year with the 3-month Treasury bill yielding 5.34%.
Interest rates moved somewhat lower, dropping this T-bill's yield to about 5% by
the end of July, when rates really started to fall. As the stock market tumbled
in August, so did Treasury bill yields, taking the 3-month Treasury bill all the
way to 3.62% on October 16th. Fortunately, rates later moved higher and closed
the year at 4.45%. As market volatility underscored investors' fears of a stock
market correction, there was considerable movement into Treasury securities and
an apparently related inflow of subscriptions for our Treasury Only Money Market
Fund.
Also, with the problems that are continuing to develop around the
world, investors have been seeking more conservative investment vehicles. This
could explain the increase in assets in the Weiss Treasury Only Money Market
Fund. In the first 6 months of the year, the Fund's assets grew from $33.361 to
$34.895 million. Only six months later, at the close of 1998, the Fund's assets
had nearly doubled to over $69 million.
The average weighted maturity of the Weiss Treasury Only Money Market
Fund was 52.71 days on December 31. This short maturity reflects the Fund's
conservative structure. As the issues of impeachment, world economic turmoil,
and Y2K continue to develop, this conservative vehicle could offer a relatively
stable place to invest.
If you have any questions concerning the Weiss Treasury Only Money
Market Fund, please call upon a fund representative at (800) 430-9617.
Sincerely,
/s/ John Breazeale
John Breazeale
President and Chairman
December 31, 1998
<PAGE> 2
WEISS TREASURY FUND
1998 Annual Portfolio Management Review
The world economy is, in our view, still under pressure. In the last
months of 1998, the deflation following the global economic problems became an
important investment concern. The Russian and Canadian economies continued to
decline as their natural resources lost more value, while Brazil moved into the
headlines as the next trouble spot. In fact, this deflation impacted stock
markets in almost every nation but the US. Here deflation has had little notice,
apparently due to the strong Dow, which has been hitting new highs. This has
taken attention away from the concern that personal financial stability isn't as
strong as it feels and some prices, particularly commodity prices, have fallen
to their lowest levels in decades.
All of this points to two things: possible economic trouble in the US
and the potential for another stock market drop. As if to give us a preview of
things to come, in 1998 the stock market started to sell off in early July and
fell hard until September. As one might expect, many investors around the world
appeared to take a defensive stance. With this "flight to quality" appearing
again, assets in more conservative investments, such as the Weiss Treasury Only
Money Market Fund, grew.
The potential problems that were developing at the end of 1998, such as
presidential impeachment and global economic and political turmoil, are
apparently still a cause of concern for investors. While this trend has slowed,
we continue to see many investors taking profits and moving to less volatile
investments. We share these various concerns and will continue to manage the
Fund in a conservative manner, including continuing to keep our average weighted
maturity relatively short.
As we move toward the year 2000, we will redouble our efforts to seek
to achieve the Weiss Treasury Only Money Market Fund's objective of providing
maximum current income consistent with preservation of capital.
<PAGE> 3
WEISS TREASURY ONLY MONEY MARKET FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Par (000) Value
--------- -----
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS - 54.87%
U.S. Treasury Notes - 27.52%
5.000%, due 01/31/99 ..................................................... $ 6,000 $ 6,000,212
5.000%, due 02/15/99 ..................................................... 13,000 13,003,304
-----------
Total U.S. Treasury Notes (Cost $19,003,516) 19,003,516
-----------
U.S. Treasury Bills - 27.35%
4.240%, due 01/07/99 ..................................................... 5,000 4,996,467
4.510%, due 01/21/99 ..................................................... 5,000 4,987,472
4.455%, due 02/25/99 ..................................................... 2,000 1,986,387
4.390%, due 03/11/99 ..................................................... 2,000 1,983,172
4.320%, due 04/29/99 ..................................................... 5,000 4,929,200
-----------
Total U.S. Treasury Bills (Cost $18,882,698) 18,882,698
-----------
Total U.S. Treasury Obligations (Cost $37,886,214) 37,886,214
-----------
REPURCHASE AGREEMENT - 44.57%
PNC Capital Markets Repurchase Agreement
4.40%, 01/04/99 (dated 12/31/98; proceeds
$30,792,047, collateralized by $29,810,000 U.S.
Treasury Notes, 5.375% due 07/31/00, valued
at $30,802,215) (Cost $30,777,000) ......................................... 30,777 30,777,000
-----------
Shares
------
SHORT-TERM INVESTMENT - 0.03%
Temporary Investment Fund, Inc.-
T-Fund Portfolio (Cost $20,592) .......................................... 20,592 20,592
-----------
TOTAL INVESTMENTS (COST $68,683,806*) 99.47% 68,683,806
OTHER ASSETS IN EXCESS OF LIABILITIES 0.53% 365,349
------- -----------
Net Assets (Equivalent to $1.00 per share based
on 69,049,803 shares of capital stock outstanding) 100.00% $69,049,155
======= ===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
($69,049,155 / 69,049,803 shares outstanding) $ 1.00
===========
</TABLE>
- ------------
* Aggregate cost for federal income tax purposes is substantially the same.
See accompanying notes to financial statements.
<PAGE> 4
WEISS TREASURY ONLY MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C>
Interest.................................... $ 2,212,963
-----------
EXPENSES:
Investment Advisory fees.................... 217,822
Administration fees......................... 51,827
Transfer Agent fees......................... 73,845
Custodian fees.............................. 18,935
Legal fees.................................. 47,648
Audit fees.................................. 15,098
Printing.................................... 16,000
Insurance................................... 10,490
Trustees' fees.............................. 1,361
Registration and filing fees................ 40,001
Amortization of organizational costs........ 5,647
-----------
Total Expenses....................... 498,674
Less: expenses waived and reimbursed........ (268,211)
-----------
Net Expenses......................... 230,463
-----------
Net Investment Income................................ 1,982,500
-----------
REALIZED (LOSS) ON INVESTMENTS:
Net Realized (Loss) on
Investment Securities....................... (648)
-----------
Net Increase in Net Assets Resulting from
Operations...................................... $ 1,981,852
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
WEISS TREASURY ONLY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the year ended For the year ended
INCREASE (DECREASE) IN NET ASSETS FROM: December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
Operations:
Net investment income.......................... $ 1,982,500 $ 1,037,821
Net realized (loss) on
investment securities.......................... (648) 0
------------ ------------
Net increase in net assets resulting from
operations..................................... 1,981,852 1,037,821
Distributions:
From net investment income..................... (1,982,500) (1,037,821)
Capital share transactions:
Net increase from capital share
transactions................................... 35,688,557 22,233,924
------------ ------------
Total increase in net assets................... 35,687,909 22,233,924
NET ASSETS
Beginning of year................................... 33,361,246 11,127,322
------------ ------------
End of year......................................... $69,049,155 $33,361,246
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
WEISS TREASURY ONLY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
For the year ended For the year ended For the period ended
December 31, 1998 December 31, 1997 December 31, 1996*
----------------- ----------------- ------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD: $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... 0.05 0.05 0.02
--------- --------- ---------
LESS DISTRIBUTIONS:
From net investment income.............. (0.05) (0.05) (0.02)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD: $ 1.00 $ 1.00 $ 1.00
========= ========= =========
TOTAL RETURN................................... 4.67% 4.71% 4.67%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)................ $69,049 $33,361 $11,127
Ratio of expenses to average net assets........ (1) 0.53% 0.50% 0.50%(3)
Ratio of net investment income to average
net assets.............................. (2) 4.55% 4.60% 4.54%(3)
</TABLE>
(1) The annualized expense ratios before waivers and reimbursement of
expenses for the periods ended December 31, 1998, December 31, 1997 and
December 31, 1996 would have been 1.14%, 1.69% and 7.69%, respectively.
(2) The annualized net investment income/(loss) ratios before waivers and
reimbursement of expenses for the periods ended December 31, 1998,
December 31, 1997 and December 31, 1996 would have been 3.94%, 3.41%
and (2.65)%, respectively.
(3) Annualized.
* Commencement of operations: June 28, 1996.
See accompanying notes to financial statements.
<PAGE> 7
WEISS TREASURY ONLY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. FUND ORGANIZATION
Weiss Treasury Fund (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company. The Trust was organized as a Massachusetts business trust on August 10,
1995. The Trust is a series fund that is authorized to issue shares of
beneficial interest in the following funds: Weiss Treasury Only Money Market
Fund (the "Fund") and Weiss Treasury Bond Fund. As of the date of this report,
Weiss Treasury Bond Fund had not commenced operation. The Board of Trustees of
the Trust oversees the business affairs of the Trust and is responsible for
significant decisions relating to the Fund's investment objective and policies.
The Trustees delegate the day-to-day management of the Funds to the officers of
the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in preparation of its financial statements. The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
Portfolio Valuation: Investment securities of the Fund are valued at amortized
cost. Amortized cost valuation involves valuing an instrument at its cost
initially and, thereafter, assuming a constant amortization to maturity of any
applicable discount or premium. Debt securities held by the Funds that have
maturities of less than sixty days are generally valued at amortized cost.
Security Transactions and Investment Income: Security transactions are recorded
on the trade date. Realized gains and losses on investments sold are recorded on
the identified cost basis. Net investment income for the Fund consists of all
interest income accrued on the Fund's assets, less accrued expenses. Interest
income for the Fund is comprised of accrued interest, original issue and market
discount earned less amortization of any market premium. The Fund's expenses are
also accrued daily.
Dividends and Distributions to Shareholders: The Fund declares dividends daily
from net investment income. The Fund intends to pay accrued dividends on the
last business day of each month. The Fund may make an additional distribution of
income and gains if necessary to satisfy a calendar year excise tax distribution
requirement.
Federal Income Taxes: The Fund is classified as a separate taxable entity for
Federal income tax purposes. The Fund intends to qualify as a separate
"regulated investment company" under the Internal Revenue Code and make the
requisite distributions to its shareholders that will be sufficient to relieve
it from Federal income tax and Federal excise tax. Therefore, no Federal tax
provision is required.
<PAGE> 8
WEISS TREASURY ONLY MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
Repurchase Agreements: The Fund may agree to purchase money market instruments
subject to the seller's agreement to repurchase them at an agreed upon date and
price. The seller, under a repurchase agreement, will be required on a daily
basis to maintain the value of the securities subject to the agreement at no
less than the repurchase price. In connection therewith, the Trust's Custodian
receives and holds collateral of not less than 100.5% of the repurchase price
plus accrued interest. If the value of the collateral falls below this amount,
the Trust will require the seller to deposit additional collateral.
Organizational Costs: The Trust bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
shares for distribution under Federal and state securities regulations. All
organization expenses are being amortized using the straight-line method over a
period not to exceed five years from the date of commencement of operations.
3. INVESTMENT MANAGER, DISTRIBUTOR, ADMINISTRATOR, AND OTHER RELATED PARTY
TRANSACTIONS
Weiss Money Management, Inc. (the "Manager") serves as the Investment Manager to
the Fund. Under an investment advisory agreement with the Fund, the Manager
provides continuous advice and recommendations concerning the Fund's
investments. Weiss Treasury Only Money Market Fund has agreed to compensate the
Manager for its services by the monthly payment of a fee at the annual rate of
0.50% of the average daily net. The Manager may from time to time waive all or a
portion of its fees payable by the Fund. Certain officers of the Manager serve
as President, Secretary and Trustee to the Trust.
Weiss Funds, Inc., a registered broker-dealer and wholly-owned subsidiary of the
Manager, serves as the Trust's Distributor.
PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC Bank, serves as
the Trust's Administrator and, in that capacity, performs various administrative
and accounting services for each Fund. PFPC also serves as the Trust's Transfer
Agent, dividend disbursing agent and registrar. An officer of PFPC serves as
Treasurer to the Trust.
PFPC Trust Company serves as the Custodian for the Fund's portfolio securities
and cash.
For the year ended December 31, 1998, the Manager of the Fund voluntarily waived
fees totaling $217,822. In addition, the Manager had voluntarily agreed to
reimburse the Fund to the extent required to maintain expenses at no more than
0.65% from January 1 through April 1, 1998 and 0.50% thereafter of the Fund's
average daily net assets. Accordingly, for the year ended December 31, 1998, the
Manager agreed to reimburse the Fund $50,389.
Dechert Price & Rhoads serves as legal counsel to the Trust. A partner of that
firm serves as Assistant Secretary to the Trust.
Each Trustee receives an annual fee of $500 plus reimbursement of out-of-pocket
expenses for serving in that capacity. No person who is an officer, trustee, or
employee of the Manager, Distributor, Administrator, or of any parent or
subsidiary thereof, who serves as officer, trustee, or
<PAGE> 9
WEISS TREASURY ONLY MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
(CONCLUDED)
employee of the Trust receives any compensation from the Trust.
4. NET ASSETS
At December 31, 1998, the Fund's net assets consisted of:
<TABLE>
<CAPTION>
<S> <C>
Paid in capital $69,049,803
Accumulated net realized loss on
investments (648)
-----------
$69,049,155
===========
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Board of Trustees to issue an
unlimited number of shares of beneficial interest each having $0.01 par value.
Transactions in capital shares for the year ended December 31, 1998 are
summarized below.
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Shares sold 58,510,318 $58,510,318
Shares reinvested 2,023,288 2,023,288
Shares repurchased (24,845,049) (24,845,049)
------------ ------------
35,688,557 $35,688,557
============ ============
</TABLE>
Transactions in capital shares for the year ended December 31, 1997 are
summarized below.
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Shares sold 43,729,538 $43,729,538
Shares reinvested 925,467 925,467
Shares repurchased (22,421,081) (22,421,081)
------------ ------------
22,233,924 $22,233,924
============ ============
</TABLE>
6. CAPITAL LOSS CARRYFORWARDS
The Fund has a capital loss carryforward of $648, which expires in the year
2006.
<PAGE> 10
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
WEISS TREASURY ONLY MONEY MARKET FUND
We have audited the accompanying statement of net assets of Weiss Treasury Only
Money Market Fund (the "Fund"), a series of Weiss Treasury Fund, as of December
31, 1998, and the related statement of operations, the statement of changes in
net assets and the financial highlights for the year then ended. 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 audit. The statement of changes
in net assets for the year ended December 31, 1997 and the financial highlights
for the year ended December 31, 1997 and the period ended June 28, 1996
(commencement of operations) to December 31, 1996 were audited by other auditors
whose report dated February 6, 1998 expressed an unqualified opinion on those
statements.
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 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. Our
procedures included confirmation of securities owned as of December 31, 1998 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 financial highlights referred to
above present fairly, in all material respects, the financial position of Weiss
Treasury Only Money Market Fund as of December 31, 1998, the results of its
operations, the changes in its net assets and the financial highlights for the
year then ended, in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 15, 1999
<PAGE> 11
BOARD OF TRUSTEES ADMINISTRATOR
John N. Breazeale PFPC Inc.
Chairman 103 Bellevue Pkwy.
Esther S. Gordon Wilmington, DE 19809
Robert L. Lehrer
Martin D. Weiss DISTRIBUTOR
Donald Wilk Weiss Funds, Inc.
4176 Burns Road
Palm Beach Gardens, FL 33410
OFFICERS
John N. Breazeale
President TRANSFER AGENT
David D. Marky PFPC Inc.
Treasurer 400 Bellevue Pkwy.
Sharon A. Parker Wilmington, DE 19809
Secretary
INVESTMENT MANAGER
Weiss Money Management, Inc.
4176 Burns Road
Palm Beach Gardens, FL 33410
This report and the financial statements contained herein are submitted for the
general information of shareholders. This report is not authorized for
distribution to prospective investors unless preceded or accompanied by an
effective prospectus.
THE WEISS TREASURY FUNDS
TREASURY ONLY MONEY MARKET FUND
TREASURY BOND FUND
ANNUAL REPORT TO SHAREHOLDERS
DECEMBER 31, 1998
