<PAGE>
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1998
SEMIANNUAL REPORT
April 30, 1998
(Unaudited)
Waterhouse
Investors Cash
Management
Funds
........................................
THREE MONEY MARKET PORTFOLIOS TO CHOOSE FROM:
MONEY MARKET * U.S. GOVERNMENT * MUNICIPAL
[LOGO]
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WATERHOUSE INVESTORS FAMILY OF FUNDS, INC.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
GEORGE F. STAUDTER
Director of Koger Equity, Inc.
Independent Financial Consultant
RICHARD W. DALRYMPLE
President of Teamwork Mgmt., Inc.
CAROLYN B. LEWIS
President of
The CBL Group
LAWRENCE J. TOAL
Chairman/President/CEO of
Dime Bancorp, Inc.
EXECUTIVE OFFICERS
RICHARD W. INGRAM*
President, Treasurer
and Chief Financial Officer
CHRISTOPHER J. KELLEY*
Vice President and Secretary
*Affiliated person of the Distributor
WATERHOUSE ASSET MANAGEMENT, INC.
BOARD OF DIRECTORS AND SENIOR OFFICERS
DIRECTORS
LAWRENCE M. WATERHOUSE, JR.
Chairman
Waterhouse Investor Services, Inc.
FRANK J. PETRILLI
President and Chief Executive Officer
Waterhouse Investor Services, Inc.
RICHARD H. NEIMAN
Executive Vice President
General Counsel and Secretary
Waterhouse Investor Services, Inc.
SENIOR OFFICERS
DAVID A. HARTMAN
Senior Vice President
Chief Investment Officer
M. BERNARD SIEGEL
Senior Vice President
Chief Financial Officer & Treasurer
MICHELE R. TEICHNER
Senior Vice President
Operations & Compliance
SERVICE PROVIDERS
INVESTMENT MANAGER TRANSFER AGENT INDEPENDENT AUDITORS
Waterhouse Asset Waterhouse National Bank Ernst & Young LLP
Management, Inc. 525 Washington Blvd. 787 Seventh Avenue
100 Wall Street Jersey City, NJ 07310 New York, NY 10019
New York, New York 10005
ADMINISTRATOR & CUSTODIAN LEGAL COUNSEL
SHAREHOLDER SERVICING The Bank of New York Shereff, Friedman,
Waterhouse Securities, 90 Washington Street Hoffman &
Inc. New York, NY 10286 Goodman, LLP
100 Wall Street 919 Third Avenue
New York, NY 10005 DISTRIBUTOR New York, NY 10022
Customer Service Funds Distributor, Inc.
Department 60 State Street
(800) 934-4410 Boston, MA 02109
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WATERHOUSE INVESTORS FAMILY OF FUNDS, INC.
formerly Waterhouse Investors Cash Management Fund,
Inc.(A)
DEAR SHAREHOLDER:
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I am pleased to provide you with the Waterhouse Investors Cash Management Funds
(the "Fund") semiannual report for the six months ended April 30, 1998.
During the year, each of the Money Market, U.S. Government and Municipal
Portfolios attempted to provide maximum current income from high quality money
market securities while maintaining a conservative investment portfolio to
ensure safety of principal. By April 30, 1998, assets in the three Portfolios
increased to a total of $3.1 billion.
PORTFOLIO RESULTS *
For the six months ended April 30, 1998, the three money market Portfolios had
the following annualized returns.**
* The Money Market Portfolio had an annualized return of 5.04% and a current
yield of 4.99%.
* The U.S. Government Portfolio had an annualized return of 4.91% and a
current yield of 4.86%.
* The Municipal Portfolio had an annualized return of 3.00%, a taxable
equivalent return of 4.69%(1), a current yield of 2.98% and a taxable
equivalent yield of 4.66%(1).
The economy has grown at a 3% to 5% pace for the last six months, while
inflation has been virtually non-existent. We expect the Federal Reserve to
maintain a watchful eye over the economy, as they look for any signs of an
uptick in inflation. Economic events in Asia have increased the possibility that
the U.S. economy will slow down which could prevent the Federal Reserve from
raising interest rates. In light of the current economic environment, the
average maturities of the Portfolios are being maintained at or below the
industry average to react quickly to changes in short-term interest rates.
Thank you for investing in the Fund and for your confidence in us. For the
second consecutive year, Waterhouse Securities was ranked #1 discount broker by
SmartMoney Magazine.(2) According to the SmartMoney article "we set out to
identify the single best discount broker--that is the one firm with the best mix
of price, product, service and reputation."
We look forward to continuing to meet your expanding investment needs in the
years to come.
Sincerely,
/s/ Lawrence M. Waterhouse, Jr.
- -----------------------------------------------
Lawrence M. Waterhouse, Jr.
Chairman
Waterhouse Investor Services, Inc.
(A) As of December 18, 1997, Waterhouse Investors Cash Management Fund, Inc.
changed its name to Waterhouse Investors Family of Funds, Inc.
* An investment in the Fund is neither FDIC-insured nor guaranteed by the U.S.
Government and is not a deposit or obligation of, or guaranteed by, any bank.
There can be no assurance that a portfolio will be able to maintain a stable net
asset value of $1 per share.
** These returns are based on a constant investment throughout the period,
include reinvestment of dividends and reflect a net return to the shareholder
after all expenses, inclusive of fee waivers. For the six months ended April 30,
1998, the Investment Manager and its affiliates waived a portion of their fee
for the Money Market, U.S. Government and Municipal Portfolios. Without these
fee waivers in effect, the annualized returns and current yields would have been
4.89% and 4.84% for the Money Market Portfolio, 4.83% and 4.78% for the U.S.
Government Portfolio and 2.88% and 2.86% for the Municipal Portfolio. The
annualized taxable equivalent return and yield for the Municipal Portfolio would
have been 4.50% and 4.47%, respectively. The yield more closely reflects the
current earnings of the Portfolios than the total return.
(1) Taxable equivalent return and yield at 36% marginal federal income tax rate.
(2) As compared to 22 discount brokerage firms in the SmartMoney Magazine, July
1998 issue.
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3
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TABLE OF CONTENTS
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Statements of Assets and Liabilities...................5
Statements of Operations...............................6
Statements of Changes in Net Assets....................7
Financial Highlights...................................8
Notes to Financial Statements.......................9-11
Money Market Portfolio
Schedule of Investments.........................12-15
U.S. Government Portfolio
Schedule of Investments.........................16-17
Municipal Portfolio
Schedule of Investments.........................18-22
Notes to
Schedules of Investments...........................23
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4
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
MONEY MARKET U.S. GOVERNMENT MUNICIPAL
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
ASSETS
Investments in securities, at value
(including repurchase agreements of
$21,402,000, $24,071,000, and $0,
respectively) (Note 2) $ 2,343,187,119 $ 463,518,901 $ 318,752,645
Cash 250 444 108,839
Interest receivable 16,675,282 4,120,124 1,768,254
Other assets 33,081 8,507 5,671
---------------- --------------- ----------------
TOTAL ASSETS 2,359,895,732 467,647,976 320,635,409
LIABILITIES
Dividends payable to shareholders 311,418 61,311 29,496
Payable for securities purchased 29,985,649 4,749,200 10,780,466
Payable to Investment Manager and its
affiliates (Note 3) 1,401,272 269,043 150,953
Accrued expenses and other liabilities 185,548 35,291 36,169
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TOTAL LIABILITIES 31,883,887 5,114,845 10,997,084
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NET ASSETS $ 2,328,011,845 $ 462,533,131 $ 309,638,325
---------------- --------------- ----------------
---------------- --------------- ----------------
Net assets consist of:
Paid-in capital $ 2,328,014,628 $ 462,535,317 $ 309,643,149
Accumulated net realized losses from
security transactions (2,783) (2,186) (4,824)
---------------- --------------- ----------------
Net assets, at value $ 2,328,011,845 $ 462,533,131 $ 309,638,325
---------------- --------------- ----------------
---------------- --------------- ----------------
Shares outstanding ($.0001 par value
common stock, 60 billion, 20 billion,
and 10 billion shares authorized,
respectively) 2,328,014,628 462,535,317 309,643,149
---------------- --------------- ----------------
---------------- --------------- ----------------
Net asset value, redemption price and
offering price per share (Note 2) $ 1.00 $ 1.00 $ 1.00
---------------- --------------- ----------------
---------------- --------------- ----------------
</TABLE>
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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5
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
MONEY MARKET U.S. GOVERNMENT MUNICIPAL
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 58,060,534 $ 12,180,811 $ 5,350,860
---------------- --------------- ----------------
EXPENSES
Investment management fees (Note 3) 3,483,692 753,585 506,230
Transfer agent fees (Note 3) 2,023,019 430,620 289,267
Shareholder servicing fees (Note 3) 2,023,019 365,992 159,125
Administration fees (Note 3) 1,011,509 215,310 144,633
Shareholder reports and mailing 257,227 51,445 34,297
Registration fees 196,196 22,273 8,535
Custody fees 55,483 16,420 10,498
Professional fees 38,725 13,717 8,316
Directors' fees 11,805 11,805 11,805
Other expenses 72,328 24,292 42,200
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TOTAL EXPENSES 9,173,003 1,905,459 1,214,906
Fees waived/expenses reimbursed by the
Investment Manager and its affiliates
(Note 3) (1,499,247) (178,990) (167,486)
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NET EXPENSES 7,673,756 1,726,469 1,047,420
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NET INVESTMENT INCOME 50,386,778 10,454,342 4,303,440
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NET REALIZED GAINS (LOSSES) FROM SECURITY
TRANSACTIONS 36 (2,424) (1,411)
---------------- --------------- ----------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 50,386,814 $ 10,451,918 $ 4,302,029
---------------- --------------- ----------------
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</TABLE>
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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6
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET U.S. GOVERNMENT MUNICIPAL
PORTFOLIO PORTFOLIO PORTFOLIO
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR
APRIL 30, ENDED APRIL 30, ENDED APRIL 30, ENDED
1998 OCTOBER 31, 1998 OCTOBER 31, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 50,386,778 $ 76,296,290 $ 10,454,342 $ 18,691,230 $ 4,303,440 $ 7,492,691
Net realized gain (loss)
from security
transactions 36 21,960 (2,424) 449 (1,411) (2,642)
-------------- -------------- -------------- -------------- ------------ ------------
Net increase in net assets
from operations 50,386,814 76,318,250 10,451,918 18,691,679 4,302,029 7,490,049
-------------- -------------- -------------- -------------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income (50,386,778) (76,296,290) (10,454,342) (18,691,230) (4,303,440) (7,492,691)
From net realized gains -- (23,984) -- -- -- --
-------------- -------------- -------------- -------------- ------------ ------------
Decrease in net assets from
distributions to
shareholders (50,386,778) (76,320,274) (10,454,342) (18,691,230) (4,303,440) (7,492,691)
-------------- -------------- -------------- -------------- ------------ ------------
CAPITAL SHARE TRANSACTIONS
($1.00 PER SHARE):
Proceeds from shares sold 4,287,259,046 5,645,355,075 719,804,690 1,215,495,738 510,681,071 742,968,364
Shares issued in
reinvestment of
dividends 50,319,617 78,797,634 10,445,983 19,383,642 4,295,536 7,760,110
Payments for shares
redeemed (3,797,353,631) (5,278,973,994) (670,400,429) (1,203,241,288) (470,960,567) (711,355,530)
-------------- -------------- -------------- -------------- ------------ ------------
Net increase in net assets
from capital share
transactions 540,225,032 445,178,715 59,850,244 31,638,092 44,016,040 39,372,944
-------------- -------------- -------------- -------------- ------------ ------------
TOTAL INCREASE IN NET ASSETS 540,225,068 445,176,691 59,847,820 31,638,541 44,014,629 39,370,302
NET ASSETS:
Beginning of period 1,787,786,777 1,342,610,086 402,685,311 371,046,770 265,623,696 226,253,394
-------------- -------------- -------------- -------------- ------------ ------------
End of period $2,328,011,845 $1,787,786,777 $ 462,533,131 $ 402,685,311 $309,638,325 $265,623,696
-------------- -------------- -------------- -------------- ------------ ------------
-------------- -------------- -------------- -------------- ------------ ------------
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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7
</TABLE>
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a
share of common stock outstanding, total investment return, ratios
to average net assets and other supplemental data for each period
indicated. This information has been derived from each Portfolio's
financial statements.
<TABLE>
<CAPTION>
MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO
SIX MONTHS SIX MONTHS
ENDED YEAR PERIOD ENDED YEAR PERIOD
APRIL 30, ENDED ENDED APRIL 30, ENDED ENDED
1998 OCTOBER 31, OCTOBER 31, 1998 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1997 1996* (UNAUDITED) 1997 1996*
PER SHARE OPERATING
PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------- -------------- -------------- -------------- -------------- --------------
Net investment income....... 0.025 0.048 0.041 0.024 0.047 0.041
-------------- -------------- -------------- -------------- -------------- --------------
Distributions from net
investment income......... (0.025) (0.048) (0.041) (0.024) (0.047) (0.041)
-------------- -------------- -------------- -------------- -------------- --------------
Net asset value, end of
period.................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
RATIOS
Ratio of expenses to average
net assets**.............. 0.76%(A) 0.83% 0.79%(A) 0.80%(A) 0.81% 0.73%(A)
Ratio of net investment
income to average net
assets**.................. 4.98%(A) 4.79% 4.64%(A) 4.85%(A) 4.69% 4.64%(A)
Decrease reflected in above
net expense ratio due to
waivers/ reimbursements by
the Investment Manager and
its affiliates (Note 3)... 0.15%(A) 0.08% 0.13%(A) 0.08%(A) 0.07% 0.18%(A)
SUPPLEMENTAL DATA
Total investment return
(B)....................... 5.04%(A) 4.89% 4.82%(A) 4.91%(A) 4.79% 4.82%(A)
Net assets, end of period... $2,328,011,845 $1,787,786,777 $1,342,610,086 $ 462,533,131 $ 402,685,311 $ 371,046,770
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
<CAPTION>
MUNICIPAL
PORTFOLIO
SIX MONTHS
ENDED YEAR PERIOD
APRIL 30, ENDED ENDED
1998 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1997 1996*
PER SHARE OPERATING
PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning
of period................. $ 1.000 $ 1.000 $ 1.000
-------------- -------------- --------------
Net investment income....... 0.015 0.030 0.026
-------------- -------------- --------------
Distributions from net
investment income......... (0.015) (0.030) (0.026)
-------------- -------------- --------------
Net asset value, end of
period.................... $ 1.000 $ 1.000 $ 1.000
-------------- -------------- --------------
-------------- -------------- --------------
RATIOS
Ratio of expenses to average
net assets**.............. 0.72%(A) 0.74% 0.62%(A)
Ratio of net investment
income to average net
assets**.................. 2.98%(A) 2.97% 2.90%(A)
Decrease reflected in above
net expense ratio due to
waivers/ reimbursements by
the Investment Manager and
its affiliates (Note 3)... 0.12%(A) 0.10% 0.23%(A)
SUPPLEMENTAL DATA
Total investment return
(B)....................... 3.00%(A) 3.01% 3.05%(A)
Net assets, end of period... $ 309,638,325 $ 265,623,696 $ 226,253,394
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
* The Portfolio commenced operations on December 20, 1995.
** The average net assets for the periods ended April 30, 1998, October 31, 1997
and October 31, 1996, were $2,040,061,862, $1,592,722,254 and $1,104,558,438
for the Money Market Portfolio; $434,246,547, $398,635,777 and $293,708,330
for the U.S. Government Portfolio; and $291,691,264, $252,444,536 and
$196,592,413 for the Municipal Portfolio.
(A) Annualized.
(B) Total investment return is calculated assuming a purchase of shares on the
first day and a sale on the last day of the period reported and includes
reinvestment of dividends.
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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8
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1998 (UNAUDITED)
NOTE 1 -- ORGANIZATION
Waterhouse Investors Family of Funds, Inc. (the "Fund") was organized as a
Maryland corporation on August 16, 1995. On December 18, 1997, Waterhouse
Investors Cash Management Fund, Inc. changed its name to Waterhouse Investors
Family of Funds, Inc. The Fund is registered as an open-end, management
investment company with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "Act"), and the Securities Act
of 1933, as amended and currently has four investment portfolios. These
financial statements relate to three money market portfolios of the Fund (each a
"Portfolio" and collectively the "Portfolios"), each of which is a diversified
investment portfolio. The investment objective of each of the Money Market
Portfolio, the U.S. Government Portfolio and the Municipal Portfolio is to seek
maximum current income to the extent consistent with liquidity and preservation
of capital. The Money Market Portfolio has the flexibility to invest broadly in
U.S. dollar-denominated securities of domestic and foreign issuers. The U.S.
Government Portfolio offers an added measure of safety by investing exclusively
in obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities. The Municipal Portfolio offers investors federally tax-exempt
income by investing primarily in municipal securities.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Fund's significant accounting policies:
Computation of Net Asset Value -- It is each Portfolio's policy to maintain a
continuous net asset value of $1.00 per share. Each Portfolio 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.
Securities Valuation -- Each Portfolio's securities are valued using the
amortized cost method, which approximates market value. The amortized cost
method involves initially valuing a security at its original cost and thereafter
assuming a constant amortization to maturity of any discount or premium.
Repurchase Agreements -- The Fund may enter into repurchase agreements with
financial institutions deemed to be creditworthy by the Fund's Investment
Manager, subject to the seller's agreement to repurchase and the Fund's
agreement to resell such securities at a mutually agreed upon price. Securities
purchased subject to repurchase agreements are deposited with the Fund's
custodian and, pursuant to the terms of the repurchase agreement, 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 Fund 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 Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller.
Investment Income -- Interest income is accrued as earned. Discounts and
premiums on securities purchased are amortized in accordance with income tax
regulations which approximate generally accepted accounting principles.
Distributions to Shareholders -- Dividends arising from net investment income
are declared daily and paid monthly. With respect to each Portfolio, net
realized short-term capital gains, if any, may be distributed during 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.
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9
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1998 (UNAUDITED) (CONTINUED)
Securities Transactions -- Securities transactions are accounted for on the
trade date. Realized gain and loss from securities transactions are recorded on
a specific identification basis.
Expenses -- Expenses directly attributable to each Portfolio are charged to that
Portfolio's operations. Expenses which are applicable to all Portfolios are
allocated on a pro rata basis.
Use of Estimates -- The Fund's 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 these
estimates.
Federal Income Taxes -- It is each Portfolio's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Portfolio so
qualifies, and distributes at least 90% of its taxable net income, the Portfolio
(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 each Portfolio'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.
NOTE 3 -- INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH
AFFILIATES OF THE INVESTMENT MANAGER
Under the terms of an Investment Management Agreement with Waterhouse Asset
Management, Inc. (the "Investment Manager"), an indirect wholly owned subsidiary
of The Toronto-Dominion Bank, for the investment management services furnished
to each Portfolio, such Portfolio pays the Investment Manager an annual
investment management fee, on a graduated basis, equal to .35 of 1% of the first
$1 billion of average daily net assets of each such Portfolio, .34 of 1% of the
next $1 billion, and .33 of 1% of average daily net assets of each such
Portfolio over $2 billion. The Investment Manager has agreed to waive a portion
of its fee payable by the Municipal Portfolio through October 15, 1998, so that
the actual fee payable annually by the Portfolio during the period will be equal
to .25 of 1% of its average daily net assets. For the six months ended April 30,
1998, the Investment Manager voluntarily waived $144,647 of its investment
management fee for the Municipal Portfolio.
Waterhouse Securities, an affiliate of the Investment Manager, has been retained
under an Administration Agreement to perform certain administrative services for
the Fund. For the administrative services rendered to the Fund, each Portfolio
pays Waterhouse Securities a monthly fee at an annual rate of .10 of 1% of each
Portfolio's average daily net assets. For the six months ended April 30, 1998,
the Investment Manager voluntarily waived $1,788 of its adminstration fee for
the Municipal Portfolio.
Waterhouse Securities has been retained under a Shareholder Services Agreement
to perform certain shareholder services necessary for the operation of the Fund.
The shareholder service plan adopted by the Fund provides that each Portfolio
pays Waterhouse Securities a monthly fee at an annual rate of up to .25 of 1% of
average daily net assets. The Fund's Board of Directors has determined to limit
the annual fee payable through October 15, 1998 under the Shareholder Servicing
Plan so as not to exceed .20 of 1% of average daily net assets in the case of
the Money Market Portfolio, .17 of 1% of average daily net assets in the case of
the U.S. Government Portfolio, and .11 of 1% of average daily net assets in the
case of the Municipal Portfolio. For the six months ended April 30, 1998,
Waterhouse Securities voluntarily waived $1,448,592, $178,990, and $7,500 of its
shareholder servicing fee for the Money Market Portfolio, the U.S. Government
Portfolio, and the Municipal Portfolio, respectively.
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10
<PAGE>
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1998 (UNAUDITED) (CONTINUED)
The Fund has entered into a Transfer Agency and Dividend Disbursing Agency
Agreement with Waterhouse National Bank (the "Bank"), an affiliate of the
Investment Manager, to perform transfer and dividend disbursing agency-related
services. For such services, each Portfolio pays the Bank a monthly fee at an
annual rate of .20 of 1% of average daily net assets. For the six months ended
April 30, 1998, the Bank voluntarily waived $50,655 and $13,551 of its transfer
agent fee for the Money Market Portfolio and the Municipal Portfolio,
respectively.
Each Director who is not an "interested person" ("disinterested Director") as
defined in the Act receives from the Fund a base annual retainer of $12,000,
payable quarterly. Each disinterested Director who serves on the Board of
Directors of the "Fund Complex" (which includes the Fund and National Investors
Cash Management Fund, Inc.), receives a supplemental annual retainer of $5,000,
payable quarterly.
Additionally, each disinterested Director of the Fund receives from the Fund a
fee of $2,000 for each meeting attended. In the event that meetings of the Fund
Complex are held on the same day or concurrently, such meetings are considered a
single meeting and the meeting fee is paid by the Fund Complex.
NOTE 4 -- FEDERAL TAX INFORMATION
In accordance with the Federal tax requirements, the Municipal Portfolio
designates substantially all the dividends paid from net investment income
during the six months ended April 30, 1998 as "exempt-interest dividends." As
required by Federal regulations, shareholders will receive notification of their
portion of the Fund's taxable ordinary dividends and capital gains distributions
paid (if any) for the 1998 calendar year early in 1999.
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11
<PAGE>
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MONEY MARKET PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ---------------------------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS:
<S> <C> <C> <C>
ASSET-BACKED COMMERICAL PAPER--6.1%
$32,000,000 Asset-Backed Securities Investment Trust Ser. 1997-F,
Variable Rate Notes, 5.64%, due 5/15/98 (Insured: MBIA)
(Note A) 5.62 $ 32,000,000
10,000,000 CXC Inc., due 5/15/98 5.54 9,978,844
17,247,000 Park Avenue Receivables Corp., due 5/4/98 (LIQ: Chase
Manhattan Bank N.A.) 5.57 17,239,023
30,159,000 Park Avenue Receivables Corp., due 5/13/98 (LIQ: Chase
Manhattan Bank N.A.) 5.55 30,103,507
10,000,000 Preferred Receivables Funding Corp., due 6/10/98 5.55 9,938,889
33,425,000 Preferred Receivables Funding Corp., due 6/12/98 5.54 33,210,913
10,225,000 Preferred Receivables Funding Corp., due 7/29/98 5.55 10,087,991
--------------
142,559,167
--------------
BROKER / DEALER OBLIGATIONS--15.7%
45,000,000 Bear Stearns Cos., Inc., Variable Rate Notes, 5.455%, due
5/1/98 (Note A) 5.46 45,000,000
7,000,000 Bear Stearns Cos., Inc., Variable Rate Notes, 5.47%, due
5/1/98 (Note A) 5.47 7,000,000
5,000,000 Bear Stearns Cos., Inc., Variable Rate Notes, 5.806%, due
5/14/98 (Note A) 5.63 5,000,315
7,000,000 Bear Stearns Cos., Inc., Variable Rate Notes, 5.636%, due
5/27/98 (Note A) 5.64 7,000,000
20,000,000 Bear Stearns Cos., Inc., Variable Rate Notes, 5.626%, due
6/1/98 (Note A) 5.63 20,000,000
7,000,000 Bear Stearns Cos., Inc., Zero Coupon Bond, due 11/12/98 5.70 6,791,277
30,000,000 Goldman Sachs Group, L.P., Variable Rate Notes, 5.688%, due
6/26/98 (Note A) 5.69 30,000,000
80,000,000 Goldman Sachs Group, L.P., Variable Rate Notes, 5.656%, due
7/15/98 (Notes A, B) 5.66 80,000,000
15,000,000 Merrill Lynch & Co., Inc., Variable Rate Notes, 5.45%, due
5/1/98 (Note A) 5.45 14,999,729
55,000,000 Merrill Lynch & Co., Inc., Variable Rate Notes, 5.46%, due
5/1/98 (Note A) 5.46 55,000,000
20,000,000 Merrill Lynch & Co., Inc., Variable Rate Notes, 5.616%, due
5/26/98 (Note A) 5.62 20,000,000
40,000,000 Morgan Stanley, Dean Witter, Discover & Co., Variable Rate
Notes, 5.53%,
due 5/1/98 (Note A) 5.53 40,000,000
15,000,000 Morgan Stanley Group LP, Variable Rate Notes, 5.872%, due
5/29/98 (Note A) 5.63 15,011,700
3,000,000 Morgan Stanley Group LP, Variable Rate Notes, 5.872%, due
5/29/98 (Note A) 5.70 3,001,460
2,500,000 Salomon Inc., 6.04%, due 7/9/98 5.65 2,501,355
15,000,000 Salomon Smith Barney Holdings, Inc., due 7/6/98 5.58 14,848,475
--------------
366,154,311
--------------
FINANCE & INSURANCE CO. OBLIGATIONS--6.1%
3,600,000 Avco Financial Services, Inc., 5.50%, due 5/1/98 5.76 3,600,000
2,455,000 Ford Motor Credit Co., 9.10%, due 5/4/98 5.75 2,455,652
6,000,000 Ford Motor Credit Co., 5.83%, due 6/29/98 5.74 6,000,665
2,000,000 Ford Motor Credit Co., 9.70%, due 10/5/98 5.95 2,030,869
2,560,000 Ford Motor Credit Co., Variable Rate Notes, 5.891%, due
5/26/98 (Note A) 5.66 2,561,857
20,000,000 General Motors Acceptance Corp., due 5/8/98 5.53 19,978,572
16,500,000 General Motors Acceptance Corp., 6.20%, due 12/7/98 5.96 16,525,969
30,000,000 General Motors Acceptance Corp., Variable Rate Notes, 5.51%,
due 5/1/98 (Note A) 5.48 30,000,194
10,000,000 General Motors Acceptance Corp., Variable Rate Notes, 5.568%,
due 6/22/98 (Note A) 5.63 9,997,458
30,000,000 Household Finance Co., Variable Rate Notes, 5.58%, due 5/1/98
(Note A) 5.50 29,999,535
14,000,000 International Lease Finance Corp., 7.00%, due 6/1/98 5.80 14,013,283
5,875,000 International Lease Finance Corp., 5.75%, due 1/15/99 5.67 5,874,887
--------------
143,038,941
--------------
INDUSTRIAL & OTHER COMMERCIAL PAPER--1.0%
7,000,000 Frontenac Properties, Inc., Variable Rate Notes, 5.70%, due
5/7/98 (GTY: Sisters of Mercy Health System, Inc.) (Note A) 5.70 7,000,000
5,100,000 Pepsico, Inc., 5.80%, due 8/31/98 5.50 5,101,733
10,000,000 Pepsico, Inc., 7.75%, due 10/1/98 5.60 10,082,140
--------------
22,183,873
--------------
TOTAL CORPORATE OBLIGATIONS--28.9% 673,936,292
--------------
BANK OBLIGATIONS:
BANK NOTES--5.7%
30,000,000 Comerica Bank, N.A., 5.97%, due 10/27/98 5.54 30,048,321
5,000,000 Commonwealth Bank of Australia, Variable Rate Notes, 5.625%,
due 8/27/98
(GTY: Commonwealth of Australia) (Note A) 5.65 4,997,344
</TABLE>
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MONEY MARKET PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ---------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
$25,000,000 FCC National Bank, Variable Rate Notes, 5.568%, due 5/5/98 5.64 $ 24,997,071
(Note A)
2,000,000 First USA Bank, Variable Rate Notes, 5.925%, due 5/7/98 5.60 2,000,109
(Note A)
15,000,000 LaSalle National Bank, Chicago, 5.76%, due 7/10/98 5.76 15,000,000
20,000,000 PNC Bank, N.A., Variable Rate Notes, 5.38%, due 5/1/98 5.47 19,997,180
(Note A)
20,000,000 PNC Bank, N.A., Variable Rate Notes, 5.38%, due 5/1/98 5.45 19,994,209
(Note A)
5,000,000 PNC Bank, N.A., Variable Rate Notes, 5.688%, due 5/5/98 5.66 5,000,093
(Note A)
5,000,000 Wells Fargo Bank, N.A., Variable Rate Notes, 5.813%, due 5.70 5,000,000
5/29/98 (Notes A, E)
5,000,000 Wells Fargo Bank, N.A., Variable Rate Notes, 5.813%, due 5.64 5,000,000
5/29/98 (Notes A, E)
--------------
132,034,327
--------------
BANK SUPPORTED OBLIGATIONS--20.9%
6,540,000 Adult Communities Total Services, Inc. Series 1996 VRDN, 5.67 6,540,000
5.75%, due 5/7/98 (LOC: LaSalle National Bank, Chicago)
(Note C)
5,000,000 Alfa Russia Finance B.V., due 5/6/98 (LOC: Societe Generale) 5.57 4,996,181
10,000,000 Assisted Living Funding, LLC Ser. 1997 VRDN, 5.70%, due 5.70 10,000,000
5/7/98 (LOC: First Union National Bank) (Note C)
15,000,000 Banca Serfin S.A., Insittucion de Banca Multiple, Grupo 5.88 14,711,267
Financiero Serfin, due 8/31/98 (LOC: Barclays Bank PLC)
15,000,000 Banco Bandeirantes, S.A., due 6/18/98 (LOC: Barclays Bank 5.90 14,888,000
PLC)
10,000,000 Banco de Credito Nacional, S.A., due 7/20/98 (LOC: Barclays 5.52 9,880,667
Bank PLC)
22,000,000 Banco de Galicia y Buenos Aires S.A., due 9/16/98 (LOC: 5.64 21,538,697
Bayerische Vereinsbank AG)
10,000,000 Banco National de Comercio Exterior, S.N.C., due 5/7/98 5.54 9,990,900
(LOC: Barclays Bank PLC)
25,000,000 Banco Rio de la Plata S.A., due 12/7/98 (LOC: Bayerische 5.67 24,167,361
Vereinsbank AG & Banco Santander)
21,500,000 Banco Rio de la Plata S.A., due 12/8/98 (LOC: Bayerische 5.68 20,780,676
Vereinsbank AG & Banco Santander)
3,000,000 Baylis Group Partnership Ser. 1992 VRDN, 5.75%, due 5/7/98 5.67 3,000,000
(LOC: Kredietbank NV) (Note C)
3,210,000 Benedictine Health System, due 7/6/98 (LOC: LaSalle National 5.79 3,176,411
Bank, Chicago)
15,675,000 Cibinong International Finance Co., B.V., Ser. A, due 6/1/98 5.80 15,598,737
(LOC: Bank of America NT & SA)
15,000,000 COFCO Capital Corp., due 6/10/98 (LOC: Credit Suisse First 5.62 14,907,667
Boston)
13,000,000 COSCO (Cayman) Co. Ltd., due 5/4/98 (Line: Credit Suisse 5.55 12,994,063
First Boston)
15,000,000 COSCO (Cayman) Co. Ltd., due 5/4/98 (Line: Credit Suisse 5.56 14,993,150
First Boston)
10,000,000 COSCO (Cayman) Co. Ltd., due 5/6/98 (Line: Credit Suisse 5.57 9,992,375
First Boston)
10,000,000 COSCO (Cayman) Co. Ltd., due 6/8/98 (Line: Credit Suisse 5.58 9,941,628
First Boston)
30,000,000 Demir Funding Corp. I, due 7/13/98 (LOC: Bayerische 5.57 29,666,025
Vereinsbank AG)
9,600,000 Edward Obligated Grp. Ser. 1997B VRDN, 5.61%, due 5/7/98 5.61 9,600,000
(Insured: AMBAC; LIQ: Harris Trust & Savings Bank) (Note C)
20,000,000 KOC Funding Corp., due 5/14/98 (LOC: Credit Suisse First 5.54 19,960,494
Boston) (Note B)
5,000,000 Long Lane Master Trust I Ser. 1998A, Variable Rate Notes, 5.71 5,000,000
5.708%, due 7/20/98 (Counter Party: BankBoston, N.A.) (Notes
A, B)
11,000,000 Long Lane Master Trust II Ser. 1997B, Variable Rate Notes, 5.74 11,000,000
5.738%, due 6/26/98 (Counter Party: BankBoston, N.A.)
(Notes A, B)
20,000,000 Long Lane Master Trust III Ser. 1997C, Variable Rate Notes, 5.68 20,000,000
5.682%, due 5/2/98 (Counter Party: BankBoston, N.A.)
(Notes A, B)
14,239,000 Louis Dreyfus Corp. II, due 5/15/98 (LOC: Dresdner Bank AG) 5.57 14,208,323
31,550,000 Metrocrest Hospital Authority, Ser. 89-A, due 5/4/98 (LOC: 5.60 31,535,480
Bank of New York, NY)
20,000,000 Nacional Financiera, S.N.C, due 5/12/98 (LOC: Societe 5.56 19,966,450
Generale)
14,865,000 NuFunding Inc. VRDN, 5.726%, due 5/7/98 (LOC: LaSalle 5.65 14,865,000
National Bank, Chicago) (Note C)
15,000,000 Petroleo Brasileiro S.A., due 5/26/98 (LOC: Barclays Bank 5.80 14,941,979
PLC)
4,000,000 Rockland Industries, Inc. Taxable Series 1997 VRDN, 5.65%, 5.57 4,000,000
due 5/7/98 (LOC: First Union National Bank) (Note C)
7,615,000 Roosevelt Paper Co. Ser. 1997 VRDN, 5.75%, due 5/7/98 (LOC: 5.67 7,615,000
CoreStates Bank, N.A.) (Note C)
4,050,000 Senior Systems Technology LLC VRDN, 5.668%, due 5/7/98 (LOC: 5.67 4,050,000
Comerica Bank - California) (Note C)
21,500,000 Sinochem American C.P. Inc., due 5/14/98 (LOC: Credit Suisse 5.58 21,456,910
First Boston)
21,375,000 The Society of New York Hospital Fund, Inc., due 5/13/98 5.60 21,335,528
(LOC: Chase Manhattan Bank, N.A.)
4,000,000 Trap Rock Industries, Inc. Ser. 1997 VRDN, 5.75%, due 5/7/98 5.67 4,000,000
(LOC: CoreStates Bank, N.A.) (Note C)
5,920,000 Triad Group, Inc. Ser. 1997 VRDN, 5.65%, due 5/7/98 (LOC: 5.57 5,920,000
First Union National Bank) (Note C)
5,000,000 Unibanco-Uniao de Banco Brasileiros S.A., due 11/30/98 (LOC: 5.74 4,835,812
Bayerische Vereinsbank AG)
--------------
486,054,781
--------------
</TABLE>
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MONEY MARKET PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BANK TIME DEPOSITS--3.7%
$25,000,000 Credit Agricole Indosuez S.A., 5.54%, due 8/28/98 5.54 $ 25,000,000
20,000,000 Generale Bank, 5.531%, due 8/27/98 5.53 20,000,000
40,000,000 Westdeutsche Landesbank GZ, 5.54%, due 7/27/98 5.54 40,000,000
--------------
85,000,000
--------------
DOMESTIC CERTIFICATES OF DEPOSIT--4.9%
10,000,000 Bankers Trust Co., NY, 5.94%, due 9/10/98 6.00 9,997,939
40,000,000 Bankers Trust Co., NY, Variable Rate Notes, 5.41%, due 5.47 39,997,613
5/1/98 (Note A)
15,000,000 Bankers Trust Co., NY, Variable Rate Notes, 5.46%, due 5.48 14,997,340
5/1/98 (Note A)
25,000,000 Bankers Trust Co., NY, Variable Rate Notes, 5.46%, due 5.47 24,999,408
5/1/98 (Note A)
24,000,000 LaSalle National Bank, Chicago, 5.50%, due 6/8/98 5.50 24,000,000
--------------
113,992,300
--------------
YANKEE BANK CERTIFICATES OF DEPOSIT--14.4%
30,000,000 Banque Nationale de Paris, 5.84%, due 5/5/99 5.89 29,985,649
20,000,000 Banque Nationale de Paris, 5.96%, due 6/30/98 5.90 20,001,582
15,000,000 Banque Nationale de Paris, 5.57%, due 7/17/98 5.56 15,000,316
20,000,000 Credit Agricole Indosuez S.A., 5.655%, due 2/26/99 5.70 19,992,886
30,000,000 Credit Agricole Indosuez S.A., 5.66%, due 3/23/99 5.71 29,987,160
20,000,000 Credit Agricole Indosuez S.A., 5.74%, due 4/26/99 5.80 19,988,621
30,000,000 Deutsche Bank AG, 5.695%, due 3/30/99 5.76 29,983,031
5,000,000 Deutsche Bank AG, 5.94%, due 10/23/98 5.59 5,005,053
15,000,000 National Westminster Bank PLC, 5.54%, due 8/3/98 5.54 15,000,601
35,000,000 National Westminster Bank PLC, 5.53%, due 8/5/98 5.51 35,001,740
15,000,000 Societe Generale, 5.635%, due 12/31/98 5.64 15,000,000
35,000,000 Societe Generale, 5.75%, due 4/19/99 5.80 34,983,798
10,000,000 Societe Generale, Variable Rate Notes, 5.415%, due 5/1/98 5.48 9,997,725
(Note A)
25,000,000 Societe Generale, Variable Rate Notes, 5.45%, due 5/1/98 5.47 24,999,933
(Note A)
20,000,000 Svenska Handelsbanken AB, 5.86%, due 9/18/98 5.89 19,997,727
10,000,000 Swiss Bank Corp., 5.86%, due 7/17/98 5.53 10,002,945
--------------
334,928,767
--------------
TOTAL BANK OBLIGATIONS--49.6% 1,152,010,175
--------------
MUNICIPAL OBLIGATIONS:
TAXABLE OBLIGATIONS--21.3%
5,000,000 Bergen County (NJ) Improvement Auth., County Gtd. Proj. 5.66 5,000,000
Notes (Bergen Pines Cty. Hosp. Proj.) Ser. 1998, 5.74%, due
2/17/99
2,925,000 Bergen County (NJ) Improvement Auth., County Gtd. Proj. 5.75 2,925,000
Notes (Bergen Pines Cty. Hosp. Proj.) Ser. 1998B, 5.88%, due
2/17/99
2,270,000 Berks Co. IDA VRDN, 5.75%, due 5/7/98 (LOC: CoreStates Bank, 5.67 2,270,000
N.A.) (Note C)
30,000,000 Brazos River Auth., TX, Collateralized PCR (Texas Utilities 5.58 29,999,892
Elec. Co. Proj.) Ser. 1993A, 5.58%, due 5/14/98 (LOC:
Canadian Imperial Bank of Commerce)
25,000,000 Broward Cty., FL Pro. Sports Fac. Tax & Rev. Bonds (Broward 5.69 25,000,000
Cty. Civic Arena Proj.) Ser. 1996B (TTR 14), 5.688%, due
5/1/98 (Insured: MBIA; LIQ: Citibank, N.A.) (Note A)
30,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds 5.57 30,000,000
(Atlantic Richfield Co. Proj.) Ser. 1997, 5.57%, due 5/6/98
(GTY: Atlantic Richfield Co.)
8,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds 5.70 8,000,000
(Atlantic Richfield Co. Proj.) Ser. 1997, 5.70%, due 5/6/98
(GTY: Atlantic Richfield Co.)
20,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds 5.79 20,000,000
(Atlantic Richfield Co. Proj.) Ser. 1997, 5.79%, due 5/6/98
(GTY: Atlantic Richfield Co.)
10,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds 5.85 10,000,000
(Atlantic Richfield Co. Proj.) Ser. 1997, 5.85%, due 5/6/98
(GTY: Atlantic Richfield Co.)
20,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds 5.75 20,000,000
(Atlantic Richfield Co. Proj.) Ser. 1997, 5.75%, due 5/14/98
(GTY: Atlantic Richfield Co.)
25,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds 5.65 25,000,000
(Browning Ferris Industries) Ser. 1997, 5.65%, due 6/3/98
(LOC: Texas Commerce Bank, N.A.)
25,000,000 Calif. Pollution Control Fin. Auth. Rev. Bonds (Shell 5.57 25,000,000
Martinez Refining Co. Proj.) Ser. 1996, 5.57%, due 5/6/98
(GTY: Shell Oil Co.)
</TABLE>
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MONEY MARKET PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$4,735,000 City of Gaithersburg (MD) Econ. Dev. Rev. (Asbury Methodist 5.67 $ 4,735,000
Village, Inc. Fac.) Ser. 1997B VRDN, 5.75%, due 5/7/98
(Insured: MBIA; LIQ: Nationsbank N.A.) (Note C)
5,500,000 City of Portsmouth (VA) IDA (PortCentre I Proj.) Ser. 1997B 5.75 5,500,000
VRDN, 5.75%, due 5/1/98 (LOC: NationsBank, N.A.) (Note C)
15,000,000 City of St. Paul, MN, G.O. Notes, 5.72%, due 8/14/98 (LIQ: 5.64 15,000,000
Norwest Bank Minnesota, N.A.)
10,000,000 City of Whiting, IN Indus. Sewage & Solid Waste Disp. Rev. 5.58 10,000,000
Bonds (Amoco Oil Co. Proj.) Ser. 1995, 5.58%, due 6/23/98
(LOC: Amoco, LIQ: Nationsbank of Texas, N.A.)
31,570,000 City of Worcester, MA BAN, 5.86%, due 8/28/98 5.81 31,574,870
17,400,000 Gulf Coast Waste Disp. Auth. Waste Disp. Rev. Bonds (Valero 5.57 17,400,000
Energy Corp. Proj.) Ser. 1998 VRDN, 5.65%, due 5/6/98 (LOC:
Bank of Montreal) (Note C)
26,000,000 Ill. Dev. Auth. Revenue Bonds Ser. 1996 VRDN, 5.75%, due 5.67 26,000,000
5/7/98 (LOC: Northern Trust Co.) (Note C)
6,295,000 Ill. Health Facilities Auth. Ser. 1996F VRDN, 5.75%, due 5.67 6,295,000
5/7/98 (LOC: LaSalle National Bank, Chicago) (Note C)
20,000,000 Ill. Student Asst. Comm. Student Loan Rev. Bonds Ser. 1997B 5.61 20,000,000
VRDN, 5.61%, due 5/6/98 (LOC: First National Bank of
Chicago) (Note C)
7,000,000 Indus. Dev. Board of the Parish of Calcasieu (LA) Inc., Env. 5.59 7,000,000
Rev. Bonds (CITGO Petroleum Corp. Proj.) Ser. 1996, 5.59%,
due 6/17/98 (LOC: ABN-AMRO Bank, N.V.)
5,000,000 Maryland Health & Higher Educational Facilities Auth. Rev. 5.75 5,000,000
Bonds Ser. 1998B VRDN, 5.75%, due 5/7/98 (LOC: First Union
National Bank) (Note C)
2,130,000 Mass. Housing Fin. Agency Notes, Ser. 1994, 7.15%, due 5.55 2,135,393
7/1/98 (Insured: AMBAC)
11,000,000 Miss. Bus. Fin. Corp. Indus. Dev. Bonds (GE Plastics 5.67 11,000,000
Finishing Inc. Proj.) Ser. 1998 VRDN, 5.668%, due 5/1/98
(GTY: General Electric Company) (Note C)
4,000,000 Miss. Bus. Fin. Corp. Rev. Bonds (AB Co. Inc. Proj.) Ser. B 5.57 4,000,000
VRDN, 5.65%, due 5/7/98 (LOC: First Union National Bank)
(Note C)
3,800,000 NJ EDA (The Morey Organization, Inc. Proj.) Ser. 1997 VRDN, 5.67 3,800,000
5.75%, due 5/7/98 (LOC: CoreStates Bank, N.A.) (Note C)
6,000,000 NJ EDA State Pension Fdg. Bonds Ser. 1997A, 5.68%, Optional 5.68 6,000,000
Put 5/1/98 (Insured: MBIA; LIQ: Citibank, N.A.)
9,600,000 NY State HFA Svc. Contract Obligation Rev. Ser. 1997B VRDN, 5.58 9,600,000
5.66%, due 5/7/98 (LOC: Commerzbank AG) (Note C)
5,000,000 NY State HFA, Tribeca Landing Housing Rev. Bonds, Ser. 1997B 5.59 5,000,000
VRDN, 5.67%, due 5/6/98
(LOC: Fleet Bank, N.A.) (Note C)
9,500,000 Oakland-Alameda Cty., CA, Coliseum Auth. Lease Rev. Bonds 5.57 9,500,000
Ser. 1995 B2, 5.57%, due 5/15/98
(LOC: Canadian Imperial Bank of Commerce)
5,000,000 Oakland-Alameda Cty., CA, Coliseum Auth. Lease Rev. Bonds 5.58 5,000,000
Ser. 1996 A2, 5.58%, due 6/24/98
(LOC: Canadian Imperial Bank of Commerce)
3,975,000 PA Econ. Dev. Fin. Auth. Taxable Dev. Rev. Bonds (Country 5.70 3,975,000
Meadows of Allentown Proj.) Ser. 1996B VRDN, 5.70%, due
5/7/98 (LOC: Mellon Bank, N.A.) (Note C)
2,500,000 Passaic Cty., NJ Utilities Auth. Proj. Notes Ser. 1997A, 5.87 2,500,000
5.95%, due 8/4/98 (Insured: MBIA)
2,546,000 Passaic Cty., NJ Utilities Auth. Proj. Notes Ser. 1997, 5.87 2,546,000
5.95%, due 8/4/98 (Insured: MBIA)
3,080,000 Scripps Health Calif., Notes, 5.80%, due 10/1/98 (Insured: 5.55 3,082,497
MBIA)
39,500,000 State of NH PCR IDA (Public Svc. Co. of NH Proj.) Ser. 5.58 39,500,000
1991D, 5.58%, due 6/17/98 (LOC: Barclays Bank PLC)
13,500,000 State of Ohio, Taxable Dev. Asst, Ser. 1996, 5.688%, 5.69 13,500,000
Optional Put 5/1/98 (Insured: AMBAC; LIQ: Citibank, N.A.)
20,000,000 State of Ohio, Taxable Dev. Asst. Ser. CR16T, 5.688%, 5.69 20,000,000
Optional Put 5/1/98 (Insured: AMBAC; LIQ: Citibank, N.A.)
3,000,000 Westchester County NY IDA (BWP Distributors Inc. Proj.) Ser. 5.57 3,000,000
1997 VRDN, 5.65%, due 5/7/98
(LOC: First Union National Bank) (Note C)
--------------
TOTAL MUNICIPAL OBLIGATIONS --21.3% 495,838,652
--------------
REPURCHASE AGREEMENTS --.9%
21,402,000 Morgan Stanley & Co., Inc.,
-dated 4/30/98, due 5/1/98, in the amount of $21,405,305,
-fully collateralized by $32,380,290 U.S. Government
Securities, value $21,963,418 5.56 21,402,000
--------------
TOTAL INVESTMENTS -- 100.7% 2,343,187,119
OTHER ASSETS AND LIABILITIES, NET -- (0.7%) (15,175,274)
--------------
NET ASSETS -- 100.0% $2,328,011,845
--------------
--------------
</TABLE>
PLEASE SEE ACCOMPANYING NOTES TO THE SCHEDULES OF INVESTMENTS
AND FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
U.S. GOVERNMENT PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FEDERAL FARM CREDIT BANK--8.2%
$ 1,000,000 Notes, 5.90%, due 6/2/98 5.45 $ 1,000,341
1,000,000 Notes, 5.70%, due 11/3/98 5.55 1,000,519
1,250,000 Notes, 5.85%, due 9/11/98 (Note E) 5.73 1,250,272
25,000,000 Variable Rate Notes, 5.28%, due 5/1/98 (Note A) 5.34 24,997,550
10,000,000 Variable Rate Notes, 5.458%, due 5/1/98 (Note A) 5.54 9,997,180
--------------
38,245,862
--------------
FEDERAL HOME LOAN BANK--38.5%
1,055,000 Notes, 5.82%, due 6/16/98 5.62 1,055,186
1,000,000 Notes, 5.72%, due 6/23/98 5.45 1,000,288
1,000,000 Notes, 5.90%, due 6/29/98 5.45 1,000,665
3,290,000 Notes, 5.72%, due 6/30/98 5.72 3,289,772
5,000,000 Notes, 5.725%, due 9/8/98 5.47 5,003,432
1,380,000 Notes, 5.685%, due 10/2/98 5.50 1,380,774
1,000,000 Notes, 5.925%, due 2/1/99 5.62 1,001,691
3,214,286 Notes, 5.74%, due 3/11/99 (Note E) 5.76 3,215,092
1,805,000 Notes, 5.55%, due 3/23/99 5.72 1,802,358
4,800,000 Notes, 5.70%, due 4/15/99 (Note E) 5.67 4,797,849
10,000,000 Variable Rate Notes, 5.633%, due 5/2/98 (Note A) 5.48 10,005,654
9,000,000 Variable Rate Notes, 5.633%, due 5/4/98 (Note A) 5.54 9,003,485
15,000,000 Variable Rate Notes, 5.508%, due 5/6/98 (Note A) 5.50 14,991,051
5,450,000 Variable Rate Notes, 5.52%, due 5/6/98 (Note A) 5.57 5,450,182
50,000,000 Variable Rate Notes, 5.467%, due 5/7/98 (Note A) 5.54 49,992,484
25,000,000 Variable Rate Notes, 5.426%, due 5/7/98 (Note A) 5.52 24,995,709
15,000,000 Variable Rate Notes, 5.431%, due 5/17/98 (Note A) 5.51 14,995,487
5,000,000 Variable Rate Notes, 5.441%, due 5/25/98 (Note A) 5.49 4,997,753
20,000,000 Variable Rate Notes, 5.428%, due 6/30/98 (Note A) 5.52 19,992,671
--------------
177,971,583
--------------
FEDERAL HOME LOAN MORTGAGE CORP.--5.8%
5,623,944 Mortgage Pool M90189, 6.00%, due 7/1/98 5.60 5,619,045
1,465,140 Mortgage Pool L90042, 6.00%, due 8/1/98 5.82 1,465,083
5,406,504 Mortgage Pool G50133, 6.00%, due 11/1/98 5.74 5,401,912
1,965,000 Notes, 5.95%, due 6/19/98 5.42 1,966,232
5,000,000 Notes, 13.00%, due 11/4/98 5.61 5,175,094
2,000,000 Notes, 5.18%, due 11/18/98 (Note E) 5.56 1,995,856
5,000,000 Notes, 5.605%, due 3/12/99 5.57 5,001,404
--------------
26,624,626
--------------
FEDERAL NATIONAL MORTGAGE ASSOC.--29.7%
5,000,000 Discount Notes, due 3/24/99 5.82 4,749,200
2,705,000 Notes, 6.08%, due 5/6/98 5.63 2,705,141
7,000,000 Notes, 8.15%, due 5/11/98 5.46 7,005,030
2,935,000 Notes, 5.25%, due 5/13/98 5.72 2,934,502
1,000,000 Notes, 5.84%, due 6/19/98 5.45 1,000,421
4,000,000 Notes, 5.33%, due 6/26/98 (Note E) 5.75 3,997,114
2,000,000 Notes, 6.29%, due 7/8/98 5.58 2,001,907
1,875,000 Notes, 5.22%, due 7/10/98 (Note E) 5.83 1,872,825
1,690,000 Notes, 6.00%, due 7/17/98 5.46 1,691,772
1,000,000 Notes, 9.40%, due 8/10/98 5.48 1,010,557
1,250,000 Notes, 5.35%, due 8/12/98 (Note E) 5.82 1,248,352
1,485,000 Notes, 5.63%, due 8/14/98 5.43 1,485,627
1,000,000 Notes, 6.09%, due 9/1/98 5.55 1,001,344
1,000,000 Notes, 6.32%, due 9/17/98 5.44 1,003,056
</TABLE>
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
U.S. GOVERNMENT PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$10,000,000 Notes, 5.30%, due 12/10/98 (Note E) 5.84 $ 9,969,286
3,710,000 Notes, 5.75%, due 12/10/98 (Note E) 5.68 3,709,896
9,200,000 Notes, 5.80%, due 3/4/99 (Note E) 5.79 9,200,295
6,000,000 Notes, 6.00%, due 3/26/99 5.72 6,014,548
10,000,000 Variable Rate Notes, 5.43%, due 5/5/98 (Note A) 5.54 9,987,179
10,000,000 Variable Rate Notes, 5.553%, due 5/5/98 (Note A) 5.50 9,998,943
30,000,000 Variable Rate Notes, 5.57%, due 5/5/98 (Note A) 5.55 29,985,123
15,000,000 Variable Rate Notes, 5.588%, due 5/5/98 (Note A) 5.55 14,997,387
10,000,000 Variable Rate Notes, 5.448%, due 7/5/98 (Note A) 5.61 9,996,420
--------------
137,565,925
--------------
STUDENT LOAN MARKETING ASSOCIATION--12.8%
5,000,000 Notes, 5.60%, due 8/11/98 5.77 4,997,723
1,000,000 Notes, 5.82%, due 9/16/98 5.42 1,001,252
10,000,000 Notes, 5.703%, due 1/22/99 (Note E) 5.63 10,000,000
5,000,000 Notes, 7.723%, due 1/25/99 5.59 5,073,413
23,000,000 Variable Rate Notes, 5.273%, due 5/5/98 (Note A) 5.34 22,974,565
15,000,000 Variable Rate Notes, 5.563%, due 5/5/98 (Note A) 5.54 14,992,952
--------------
59,039,905
--------------
REPURCHASE AGREEMENTS--5.2%
24,071,000 Morgan Stanley & Co., Inc.,
-dated 4/30/98, due 5/1/98, in the amount of $24,074,718,
-fully collateralized by $31,116,330 U.S. Government
Securities, value 24,657,418 5.56 24,071,000
--------------
TOTAL INVESTMENTS -- 100.2% 463,518,901
OTHER ASSETS AND LIABILITIES, NET -- (0.2%) (985,770)
--------------
NET ASSETS -- 100.0% $ 462,533,131
--------------
--------------
</TABLE>
PLEASE SEE ACCOMPANYING NOTES TO THE SCHEDULES OF INVESTMENTS
AND FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MUNICIPAL PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS:
ALASKA--.1%
$ 100,000 North Slope Boro, Ser. A, 4.85%, due 6/30/98 (Insured: MBIA) 4.00 $ 100,135
--------------
ARIZONA--.8%
500,000 Phoenix Street & Highway User Rev. Bonds , 6.90%, due 7/1/98
(Escrowed to Maturity) (Note D) 4.50 501,964
2,000,000 Pima County IDA (Tucson Elec. Co. Proj.) VRDN, 4.25% (LOC:
Societe Generale) (Note C) 4.25 2,000,000
--------------
2,501,964
--------------
CALIFORNIA--.1%
300,000 California Alternative Energy Source Fin. Auth., Ser. 1986
VRDN, 3.70% (LOC: Banque Nationale de Paris) (Note C) 3.70 300,000
--------------
COLORADO--9.1%
6,780,000 Commerce City Rev. Bonds (Golf Enterprise), VRDN, 4.50%
(LOC: U.S. Bank of Washington) (Note C) 4.50 6,780,000
3,900,000 Denver City & County Airport Rev. Bonds, Ser. 1997A, 3.35%,
due 5/8/98 (LOC: Bayerische Landesbank) 3.35 3,900,000
6,300,000 Denver City & County Airport Rev. Bonds, Ser. 1997A, 3.30%,
due 5/8/98 (LOC: Bayerische Landesbank) 3.30 6,300,000
5,000,000 Denver City & County Airport Rev. Bonds, Ser. 1997B VRDN,
4.25% (LOC: Bayerische Landesbank) (Note C) 4.25 5,000,000
6,200,000 Pueblo Cty. IDR (Kaiser Aero Space & Elec. Proj.) VRDN,
4.20% (LOC: ABN-AMRO Bank N.V.) (Note C) 4.20 6,200,000
--------------
28,180,000
--------------
CONNECTICUT--.1%
105,000 Hebron G.O. Bonds, 6.10%, due 11/15/98 (Insured: MBIA) 4.00 106,157
--------------
DELAWARE--3.1%
8,600,000 Delaware Econ. Dev. Auth. IDR (Del. Clean Pwr. Proj.) VRDN
Ser. 1997C, 4.35% (LOC: Canadian Imperial Bank of Commerce)
(Note C) 4.35 8,600,000
1,160,000 Wilmington Community Rev Bonds, VRDN Program A, 4.35% (LOC:
CoreStates Bank, N.A.) (Note C) 4.35 1,160,000
--------------
9,760,000
--------------
DISTRICT OF COLUMBIA--1.2%
100,000 Washington D.C. G.O. Bonds, 7.30%, due 6/1/98 (Insured:
AMBAC) 4.00 100,273
105,000 Washington D.C. G.O. Bonds, 7.00%, due 6/1/98 (Insured:
AMBAC) 3.90 105,265
200,000 Washington D.C. G.O. Bonds, Ser. B, 6.625%, due 6/1/98
(Insured: MBIA) 4.00 200,438
250,000 Washington D.C. G.O. Bonds, Ser. B, 6.95%, due 6/1/98
(Insured: FSA) 3.80 250,637
100,000 Washington D.C. G.O. Bonds, Ser. B-3, 4.40%, due 6/1/98
(Insured: MBIA) 4.00 100,033
3,000,000 Washington D.C. G.O. Notes, Ser. 1997, VRDN, 4.10% (LOC:
First Union National Bank) (Note C) 4.10 3,000,000
--------------
3,756,646
--------------
FLORIDA--11.3%
120,000 Florida Board of Ed. G.O. Bonds, 5.40%, due 5/1/98 (Escrowed
to Maturity) (Note D) 4.00 120,000
365,000 Florida Board of Ed. G.O. Bonds, Ser. 1988B1, 7.875%, due
6/1/98, Prerefunded @ 102 (Note D) 3.90 373,474
2,500,000 Florida Muni. Power Agy. CP Notes, Ser. A, 3.45%, due
5/12/98 (LOC: First Union National Bank) 3.45 2,500,000
6,000,000 Florida Muni. Power Agy. CP Notes, Ser. A, 3.60%, due
5/13/98 (LOC: First Union National Bank) 3.60 6,000,000
1,543,000 Gainesville Utility System CP, Ser. C, 3.45%, due 5/11/98
(LIQ: Bank of America NT & SA & SunTrust Bank) 3.45 1,543,000
5,000,000 Indian River Cty. Hosp. Dist., Ser. 1990, 3.55%, due 5/11/98
(LOC: Kredietbank N.V.) 3.55 5,000,000
4,700,000 Lee Cty. Hosp. Board of Dir. (Lee Memorial Hosp. Proj.) Ser.
1995A, 3.40%, due 5/14/98 (LINE: SunTrust Bank) 3.40 4,700,000
6,000,000 Lee Cty. Hosp. Board of Dir. (Lee Memorial Hosp. Proj.) Ser.
1995A, 3.70%, due 5/29/98 (LINE: SunTrust Bank) 3.70 6,000,000
4,000,000 Lee Cty. Hosp. Board of Dir. (Lee Memorial Hosp. Proj.) Ser.
1995A, 3.70%, due 6/10/98 (LINE: SunTrust Bank) 3.70 4,000,000
100,000 Ocala Power Supply Rev. Bonds, 6.75%, due 10/1/98 (Insured:
MBIA) 5.76 100,394
2,500,000 Orange Cty. IDA (Sutherland Printing Proj.) Ser. 1998A VRDN,
4.25% (LOC: First Union National Bank) (Note C) 4.25 2,500,000
2,250,000 St. Lucie Cty. PCR (Florida Power & Light Co. Proj.) Ser.
1994, 3.55%, due 5/12/98 3.55 2,250,000
--------------
35,086,868
--------------
GEORGIA--3.1%
150,000 Cobb Cty. Hosp. Auth. Rev. Bonds (Kennestone Hospital)
7.30%, due 8/1/98 (Insured: MBIA) 4.00 151,211
9,192,000 Dekalb Cty. Hsg. Auth. SFM , Ser. 1997A, VRDN, 4.40% (LIQ:
Bank of New York, NY) (Note C) 4.40 9,192,000
200,000 Gwinnett Cty. Water & Sewer COP Rev. Bonds, 8.05%, due
8/1/98 4.00 201,976
--------------
9,545,187
--------------
</TABLE>
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MUNICIPAL PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
HAWAII--1.3%
$ 100,000 Department of Budget & Fin. (Queens Med. Ctr. Proj.), 6.80%,
due 7/1/98, Prerefunded @102 (Note D) 4.00 $ 102,442
4,000,000 Hawaii G.O. Bonds, VRDN, 4.25% (LIQ: BankBoston, N.A.)
(Note C) 4.25 4,000,000
--------------
4,102,442
--------------
ILLINOIS--7.1%
2,500,000 Arcola IDR (Herff Jones, Inc. Proj.) VRDN, 4.25% (LOC:
Wachovia Bank & Trust Co.) (Note C) 4.25 2,500,000
2,900,000 Chicago (Muni. Sec. Trust Receipts) Ser. A2 VRDN, 4.65%
(LIQ: Credit Suisse First Boston) (Note C) 4.65 2,900,000
100,000 DuPage Cty. Water & Sewer Rev. Bonds, 8.125%, due 12/1/98
(Insured: AMBAC) 4.00 102,348
600,000 Illinois COP, Ser. 1995A, 4.30%, due 7/1/98 (Insured: MBIA) 4.30 600,000
3,000,000 Illinois Dev. Fin. Auth. (Citizens Util. Co. Proj.) VRDN,
4.10% (Note C) 4.10 3,000,000
375,000 Illinois Dev. Fin. Auth. (D.E. Akin Seed Proj.) VRDN, 4.30%
(LOC: Banc One) (Note C) 4.30 375,000
1,850,000 Illinois Dev. Fin. Auth. (Emtech Machining & Grinding Inc.,
Proj.) VRDN, 4.25% (LOC: LaSalle National Bank, Chicago)
(Note C) 4.25 1,850,000
6,500,000 Illinois Health Fac. Auth. Rev. Bonds (Victory Health
Services) Ser. B, 3.35%, due 5/14/98 (LOC: Bank of America
NT & SA) 3.35 6,500,000
1,800,000 North Aurora IDR (Oberweiss Dairy, Inc. Proj.) VRDN, 4.25%
(LOC: LaSalle National Bank, Chicago) (Note C) 4.25 1,800,000
200,000 Northlake G.O., 4.40%, due 12/1/98 (Insured: MBIA) 4.00 200,454
2,340,000 Oak Lawn IDR (Lavergne Partners Proj.) VRDN, 4.25% (LOC:
LaSalle National Bank, Chicago) (Note C) 4.25 2,340,000
--------------
22,167,802
--------------
INDIANA--2.6%
5,000,000 Indianapolis Gas Utility Sys. Rev. CP (Citizens Gas & Coke
Util. Proj.) 3.45%, due 6/5/98 (LIQ: NBD Bank, N.A.) 3.45 5,000,000
3,000,000 Newton Cty. IDR (Intec Group, Inc. Proj.) VRDN, 4.25% (LOC:
LaSalle National Bank, Chicago) (Note C) 4.25 3,000,000
--------------
8,000,000
--------------
IOWA--1.5%
4,500,000 Dubuque (Jeld-Wen, Inc. Proj.) Ser. 1988 VRDN, 4.45% (LOC:
ABN-AMRO Bank N.V.) (Note C) 4.45 4,500,000
100,000 Iowa Student Loan Rev. Bonds, Ser. C, 6.375%, due 12/1/98
(Insured: AMBAC) 4.00 101,351
100,000 North Central Iowa Community Sch. Dist., 4.50%, due 5/1/98
(Insured: AMBAC) 4.00 100,000
--------------
4,701,351
--------------
KANSAS--.1%
220,000 Johnson Cty. Water Dist. #0001, 10.50%, due 12/1/98,
Prerefunded @ 100 (Note D) 7.97 223,067
205,000 Lawrence G.O. Bonds, Ser.T, 6.50%, due 9/1/98 4.00 206,677
--------------
429,744
--------------
KENTUCKY--6.1%
4,915,000 Danville Multi-City Lease Rev. Bonds, 3.55%, due 5/1/98
(LOC: PNC Bank) 3.55 4,915,000
4,315,000 Jefferson Cty. PCR (Louisville Gas & Elec. Co. Proj.) Ser.
1993A, 3.30%, due 5/11/98 3.30 4,315,000
4,900,000 Kentucky Turnpike Auth. (Trust Rec.) Ser. 17 VRDN, 4.15%
(LIQ: Commerzbank AG) (Note C) 4.15 4,900,000
1,200,000 Mayfield (Kentucky League of Cities Pooled Lease Fin. Prog.)
Ser. 1996 VRDN, 4.15% (LOC: PNC Bank, Kentucky) (Note C) 4.15 1,200,000
3,500,000 Pendleton Cty. (Kentucky Assoc. of Counties Lease Trust
Prog.) Ser. 1989, 3.50%, due 5/8/98 (LOC: Commonwealth Bank
of Australia) 3.50 3,500,000
--------------
18,830,000
--------------
LOUISIANA--2.3%
6,889,000 Calcasieu Parish Pub. Trust Auth. Rev. Bonds (WPT Corp.
Proj.) Ser. 1997, VRDN, 4.20% (LOC: Morgan Guaranty Trust
Co. of NY) (Note C) 4.20 6,889,000
100,000 Louisiana Correctional Facs. Corp. Rev. Bonds, 4.80%, due
12/15/98 (Insured: FSA) 4.00 100,484
100,000 Louisiana PFA Rev. Bonds (Alton Ochsner Med. Foundation
Proj.) Ser. A, 5.60%, due 5/15/98 (Insured: MBIA) 4.00 100,060
--------------
7,089,544
--------------
MARYLAND--8.6%
4,000,000 Anne Arundel Cty. (Baltimore Gas & Electric Proj.) Ser.
1988, 3.60%, due 5/7/98 (SBPA: Bank of New York) 3.60 4,000,000
4,100,000 Anne Arundel Cty. (Baltimore Gas & Electric Proj.) Ser.
1988, 3.45%, due 5/7/98 (SBPA: Bank of New York) 3.45 4,100,000
8,000,000 Anne Arundel Cty. (Baltimore Gas & Electric Proj.) Ser.
1988, 3.50%, due 6/9/98 (SBPA: Bank of New York) 3.50 8,000,000
1,500,000 Baltimore Cty. Rev. Auth. (Golf Systems) VRDN, 4.30% (LOC:
First National Bank of Maryland) (Note C) 4.30 1,500,000
2,500,000 Maryland Health & Higher Ed. (Deaton Special Hosp. & Home
Proj.) VRDN, 4.30% (LOC: First National Bank of Maryland)
(Note C) 4.30 2,500,000
</TABLE>
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MUNICIPAL PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
$ 2,000,000 Maryland Health & Higher Ed. (North Arundel Hosp. Proj.)
VRDN, 4.25% (LOC: Mellon Bank, N.A.) (Note C) 4.25 $ 2,000,000
4,500,000 Maryland Health & Higher Ed. (Univ. of Maryland Med. Sys.)
Ser. A, VRDN, 4.30% (LOC: First National Bank of Maryland)
(Note C) 4.30 4,500,000
--------------
26,600,000
--------------
MASSACHUSETTS--2.6%
290,000 Farmington River Regional Sch. Dist. G.O. Bonds, 5.50%, due
11/15/98 (Insured: AMBAC) 4.00 292,289
4,000,000 Massachusetts Health & Educ. Fac. Auth. (Becker College
Issue) Ser. A1 VRDN, 4.20%
(LOC: BankBoston, N.A.) (Note C) 4.20 4,000,000
3,800,000 Massachusetts Ind. Fin. Auth. (Ark-Les Electronic Prod.
Corp. Proj.) Ser. 1998 VRDN, 4.20%
(LOC: BankBoston, N.A.) (Note C) 4.20 3,800,000
110,000 Norfolk G.O. Bonds, 6.75%, due 11/15/98 (Insured: AMBAC) 4.00 111,592
--------------
8,203,881
--------------
MICHIGAN--4.1%
11,005,000 Michigan Hsg. Dev. Auth., Ser. 1988A, 3.60%, due 5/28/98
(LOC: Landesbank Hessen-Thueringen GZ) 3.60 11,005,000
1,700,000 Michigan Strategic Fund (United Fixtures Co. Proj.) Ser.
1995, VRDN, 4.35% (LOC: Bankers Trust Co., NY) (Note C) 4.35 1,700,000
--------------
12,705,000
--------------
MINNESOTA--.1%
200,000 Minnesota G.O. Bonds, 6.60%, due 8/1/98, Prerefunded @ 100
(Note D) 4.00 201,273
--------------
MISSISSIPPI--1.7%
5,325,000 Clairborne Cty. PCR (South Mississippi Elec. Power Assoc. -
National Rural Utilities CFC) Ser. 1985 G-2, 3.55%, due
5/12/98 3.55 5,325,000
--------------
MISSOURI--1.4%
1,950,000 Missouri Env. Imp. & Energy Res. Auth. (Assoc. Elec. Coop.)
Ser. 93M, VRDN, 4.10% (GTY: National Rural Utilities CFC)
(Note C) 4.10 1,950,000
500,000 Missouri Health & Educ. Facs. Auth. (SSM Health Care) Ser.
AA, 4.90%, due 6/1/98 (Insured: MBIA) 4.00 500,369
2,000,000 Missouri Health & Educ. Facs. Auth. (Stowers Institute for
Med. Res.) Ser. 1998, VRDN, 4.15% (LIQ: Morgan Guaranty
Trust Co. of NY) (Note C) 4.15 2,000,000
--------------
4,450,369
--------------
NEBRASKA--1.0%
3,100,000 Lincoln (Lincoln Elec. Sys.) 3.50%, due 6/9/98 (LIQ: Morgan
Guaranty Trust Co. of NY) 3.50 3,100,000
--------------
NEW HAMPSHIRE--.5%
1,570,000 Manchester Hsg. Auth. Rev. Bonds (Wall St. Tower Proj.) Ser.
B, VRDN, 4.35% (LOC: PNC Bank, N.A.) (Note C) 4.35 1,570,000
--------------
NEW JERSEY--.2%
200,000 Hammonton G.O. Bonds, 4.875%, due 12/1/98 (Insured: FGIC) 4.00 200,993
500,000 Jersey City Incinerator Auth. Rev. Bonds, 6.90%, due
11/15/98 (Insured: FGIC) 4.10 507,360
100,000 New Jersey Wastewater Treatment Trust, Ser. B, 7.25%, due
5/15/98, Prerefunded @ 101.75 (Note D) 3.90 101,873
--------------
810,226
--------------
NEW MEXICO--.5%
1,650,000 Albuquerque IDR (Karsten Co. of New Mexico) Ser. 1997A,
VRDN, 4.25% (LOC: Bank One) (Note C) 4.25 1,650,000
--------------
NEW YORK--.1%
100,000 Brookhaven G.O. Bonds, Ser. B, 7.00%, due 5/1/98 (Insured:
MBIA) 4.00 100,000
150,000 New York State Dorm. Auth. Rev. Bonds (Spec. Obl.) Ser. A,
6.55%, due 5/1/98 (Escrowed to Maturity) (Note D) 4.05 150,000
--------------
250,000
--------------
NORTH CAROLINA--.1%
175,000 Concord COP Ser. A, 4.60%, due 6/1/98 (Insured: MBIA) 4.00 175,087
--------------
OHIO--1.7%
1,000,000 Montgomery Cty. Hosp. Fac. Rev. Bonds (Miami Valley Hosp.)
Ser. 1998B, 3.60%, due 6/3/98 (LOC: Northern Trust Co.) 3.60 1,000,000
100,000 Montgomery Cty. Rev. Bonds (Sisters of Charity Health Care)
Ser. 1991A, 5.90%, due 5/15/98 (Insured: MBIA) 4.00 100,071
</TABLE>
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MUNICIPAL PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,800,000 Ohio Air Quality Dev. Auth. Rev. Bonds (JMG Funding) Ser. B
VRDN, 4.15% (LOC: Societe Generale) (Note C) 4.15 $ 1,800,000
2,500,000 Ohio Air Quality Dev. Auth. PCR (Ohio Edison Co. Proj.) Ser.
B, 4.10%, Optional Put 5/1/98
(LOC: Union Bank of Switzerland) 4.11 2,499,750
100,000 Ohio G.O. Bonds, 5.50%, due 8/1/98 (LOC: Wachovia Bank N.A.) 4.00 100,366
--------------
5,500,187
--------------
OREGON--.2%
500,000 Klamath Falls Elec. Rev. Bonds (Salt Caves Hydro-Elec.
Proj.) Ser. B, 4.50%, Mandatory Put 5/1/98
(Escrowed to Maturity) (Note D) 4.00 500,000
--------------
PENNSYLVANIA--6.2%
1,000,000 Beaver Cty. IDA (Duquesne Light Co. Proj.) Ser. 1993A, 3.30%
due 5/4/98 (LOC: Union Bank of Switzerland) 3.30 1,000,000
1,500,000 Bethel Township IDA (Brentwood Industries Inc. Proj.) VRDN,
4.35% (LOC: CoreStates Bank, N.A.) (Note C) 4.35 1,500,000
2,000,000 Carbon Cty. IDA Res. Rec. Rev. (Panther Creek Proj.) Ser.
1990A, 3.40%, due 5/5/98 (LOC: National Westminster Bank) 3.40 2,000,000
385,000 Dauphin Cty. Gen. Auth. Health Sys. Rev. Bonds (Pinnacle
Health Sys. Proj.) 4.00%, due 5/15/98 (Insured: MBIA) 4.00 385,000
7,600,000 Dauphin Cty. Gen. Auth. Rev. Bonds (Educ. & Hlth. Loan
Prog.) VRDN, 4.17% (LIQ: Chase Manhattan Bank N.A.) (Note C) 4.17 7,600,000
100,000 Pennsylvania COP, Ser. A, 4.25%, due 7/1/98 (Insured: AMBAC) 4.00 100,040
260,000 Pennsylvania G.O., 4.75%, due 6/15/98 4.00 260,232
200,000 Pennsylvania Higher Ed. Facs. Auth. Rev. Bonds, Ser. K,
4.00%, due 6/15/98 (Insured: AMBAC) 4.00 200,000
3,585,000 Philadelphia IDR (GDL Estates Corp.) Ser. 1998B VRDN, 4.20%
(LOC: CoreStates Bank, N.A.) (Note C) 4.20 3,585,000
150,000 Pittsburgh G.O. Bonds, Ser. A, 4.20%, due 9/1/98 (Insured:
AMBAC) 4.00 150,095
2,000,000 Venango IDA (Scrubgrass Proj.) Ser. 1990B, 3.55%, due
5/27/98 (LOC: National Westminster Bank) 3.55 2,000,000
285,000 Williams Valley Sch. Dist. G.O. Bonds, 3.85%, due 9/1/98
(Insured: FSA) 3.85 284,644
--------------
19,065,011
--------------
RHODE ISLAND--.7%
100,000 Pawtucket G.O. Bonds, 5.20%, due 6/15/98 (Insured: MBIA) 4.00 100,144
1,900,000 Rhode Island Ind. Fac. Corp. IDR (NFA Corp. Proj.) VRDN,
4.50% (LOC: BankBoston N.A.) (Note C) 4.50 1,900,000
--------------
2,000,144
--------------
SOUTH CAROLINA--3.5%
4,000,000 Greenville County IDR Bonds (Stevens Aviation Tech. Serv.
Facs. Proj.) Ser. 97, VRDN, 4.25%
(LOC: First Union National Bank) (Note C) 4.25 4,000,000
6,700,000 South Carolina Jobs EDA (Zeuna Starker USA, Inc. Proj.)
VRDN, 4.30% (LOC: Bayerische Landesbank GZ) (Note C) 4.30 6,700,000
--------------
10,700,000
--------------
SOUTH DAKOTA--3.0%
5,800,000 South Dakota Hsg. Dev. Auth. (Homeownership Mortgage Bds.)
Ser. 1997E, VRDN, 4.25% (GIC: Westdeutsche Landesbank GZ)
(Note C) 4.25 5,800,000
1,345,000 South Dakota Hsg. Dev. Auth. (Homeownership Mortgage Bds.)
Ser. 1997G, 3.95%, due 8/13/98 3.95 1,345,000
2,145,000 South Dakota Hsg. Dev. Auth. (Homeownership Mortgage Bds.)
Ser. 1997H, 3.95%, due 8/13/98 3.95 2,145,000
--------------
9,290,000
--------------
TENNESSEE--1.1%
3,400,000 Franklin Cty. IDB (Franklin Ind. Inc. Proj.) VRDN, 4.35%
(LOC: Nationsbank, TN)
(Note C) 4.35 3,400,000
100,000 Shelby Cty. Health, Ed., & Hsg. Fac. Rev. Bonds (Methodist
Health Sts.) Ser. 1989A, 7.10%, due 6/1/98 (Insured: MBIA) 4.00 100,255
--------------
3,500,255
--------------
TEXAS--11.8%
135,000 Arlington Ind. Sch. Dist., 7.00%, due 8/15/98 (Escrowed to
Maturity) (Note D) 4.00 136,142
240,000 Arlington Ind. Sch. Dist., 7.00%, due 8/15/98 , Prerefunded
@ 100 (Note D) 4.00 242,030
1,500,000 Brazos River Auth. (Texas Util. Elec. Co. Proj.) Ser. 1994A,
3.35%, due 5/4/98 (LOC: Canadian Imperial Bank of Commerce) 3.35 1,500,000
2,500,000 Brazos River Auth. (Texas Util. Elec. Co. Proj.) Ser. 1994A,
3.30%, due 5/4/98 (LOC: Canadian Imperial Bank of Commerce) 3.30 2,500,000
200,000 Brazos River Auth. (Texas Util. Elec. Co. Proj.) Ser. 1995C,
VRDN, 4.40%, (LOC: Swiss Bank Corp.) (Note C) 4.40 200,000
250,000 Harris Cty., Rev. Bonds (Toll Road) 8.10%, due 8/1/98,
Prerefunded @ 102 (Note D) 4.00 257,459
250,000 Harris Cty., Rev. Bonds (Toll Road) 8.125%, due 8/1/98,
Prerefunded @ 102 (Note D) 4.00 257,474
</TABLE>
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21
<PAGE>
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WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
MUNICIPAL PORTFOLIO * SCHEDULE OF INVESTMENTS
April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 4,700,000 Houston Airport CP Notes Ser. A, 3.45%, due 5/14/98 (LOC:
Canadian Imperial Bank of Commerce, Commerzbank AG) 3.45 $ 4,700,000
185,000 Longview G.O. Bonds, 7.00%, 6/1/98 (Insured: MBIA) 4.00 185,462
100,000 North Texas Municipal Dist. Rev. Bonds, 4.00%, 6/1/98
(Insured: MBIA) 4.00 100,000
7,000,000 San Antonio Water System CP Notes Ser. 1995, 3.45%, due
5/6/98 (RCA: Westdeutsche Landesbank GZ) 3.45 7,000,000
5,730,000 Texas Dept. of Hsg. & Comm. Affairs, Ser. A, 3.65%, due
7/8/98 (LIQ: FGIC) 3.65 5,730,000
3,315,000 Texas Dept. of Hsg. & Comm. Affairs, Ser. B, 3.60%, due
7/8/98 (LIQ: FGIC) 3.60 3,315,000
100,000 Texas Pub. Bldg. Auth. Rev. Bonds, 6.25%, due 8/1/98
(Insured: MBIA) 4.00 100,550
3,900,000 Texas G.O. Bonds (BT 104) VRDN, 4.35% (Note C) 4.35 3,900,000
6,266,000 University of Texas Board of Regents, Ser. A, 3.45%, due
6/4/98 3.45 6,266,000
--------------
36,390,117
--------------
VIRGINIA--.6%
1,500,000 Louisa IDA (Virginia Elec. Power Co.), 3.65%, due 5/20/98 3.65 1,500,000
430,000 Virginia Hsg. Dev. Auth., Ser. B., 5.00%, due 5/1/98 4.00 430,000
--------------
1,930,000
--------------
WASHINGTON--.1%
100,000 King & Snohomish Ctys. G.O. Bonds (Sch. Dist #417) Ser. A,
5.75%, due 12/1/98 (Insured: FGIC) 4.00 100,995
100,000 Washington G.O., 4.80%, due 9/1/98 4.00 100,260
--------------
201,255
--------------
WEST VIRGINIA--1.8%
3,000,000 West Virginia Public Energy Auth. (Morgantown Energy Assoc.
Proj.) Ser. 1989A, 3.55%, due 6/2/98 (LOC: Swiss Bank Corp.) 3.55 3,000,000
2,500,000 West Virginia Public Energy Auth. (Morgantown Energy Assoc.
Proj.) Ser. 1989A, 3.55%, due 6/8/98 (LOC: Swiss Bank Corp.) 3.55 2,500,000
--------------
5,500,000
--------------
WISCONSIN--1.4%
200,000 Wisconsin G.O., Ser. A, 6.40%, due 5/1/98, Prerefunded @ 101
(Note D) 4.10 202,000
200,000 Wisconsin G.O., Ser. C, 6.80%, due 5/1/98, Prerefunded @ 101
(Note D) 4.10 202,000
4,073,000 Wisconsin Transportation Rev. CP Notes, Ser. 1997A, 3.45%,
due 5/5/98 3.45 4,073,000
--------------
4,477,000
--------------
TOTAL MUNICIPAL OBLIGATIONS -- 102.9% 318,752,645
OTHER ASSETS AND LIABILITIES, NET (2.9%) (9,114,320)
--------------
NET ASSETS -- 100.0% $ 309,638,325
--------------
--------------
</TABLE>
PLEASE SEE ACCOMPANYING NOTES TO THE SCHEDULES OF INVESTMENTS
AND FINANCIAL STATEMENTS.
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22
<PAGE>
WATERHOUSE INVESTORS CASH MANAGEMENT FUNDS
NOTES TO SCHEDULES OF INVESTMENTS
April 30, 1998 (Unaudited)
(A) Variable rate securities. The rates shown are the current rates on April
30, 1998. Dates shown represent the next interest reset date.
(B) These obligations were acquired for investment, not with intent to
distribute or sell. They are restricted as to public resale. These
obligations were acquired at a cost of par. On April 30, 1998, the
aggregate value of these securities, valued at amortized cost, is
$135,960,494, representing 5.8% of net assets of the Money Market
Portfolio.
(C) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market rates.
(D) Bonds which are prerefunded or escrowed to maturity are collateralized by
U.S. Government Securities which are held in escrow and are used to pay
principal and interest on the municipal issue and to retire the bonds in
full at the earliest refunding date.
(E) Security may be redeemed prior to maturity date at the discretion of the
issuer.
DESCRIPTION OF ABBREVIATIONS
AMBAC American Municipal Bond Assurance Corporation
BAN Bond Anticipation Note
CFC Cooperative Finance Corporation
COP Certificate of Participation
CP Commercial Paper
EDA Economic Development Authority
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Inc.
GIC Guaranteed Investment Contract
G.O. General Obligation
GTY Guaranty
HFA Housing Finance Authority
IDA Industrial Development Authority
IDB Industrial Development Bond
IDR Industrial Development Revenue Bond
LINE Line of Credit
LIQ Liquidity Agreement
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance Insurance Corporation
PCR Pollution Control Revenue Bond
PFA Public Finance Authority
RCA Revolving Credit Authority
SBPA Standby Bond Purchase Agreement
SFM Single Family Mortgage
VRDN Variable Rate Demand Note
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
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<PAGE>
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WATERHOUSE SECURITIES, INC.
---------------------------------------------------
Where Investors Who Expect Value Feel Right At Home
Member New York Stock Exchange * SIPC
National Headquarters * 100 Wall Street * New York, NY
Over 125 Branches Nationwide
[LOGO] TD Waterhouse Securities is a subsidiary of The Toronto-Dominion Bank
MSI #0571 Rev. 6/98
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