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1999
ANNUAL REPORT
October 31, 1999
TD WATERHOUSE
FAMILY
OF
FUNDS
--------------
Three money market portfolios to choose from:
Money Market o U.S. Government o Municipal
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TD WATERHOUSE FAMILY OF FUNDS, INC.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
<S> <C> <C>
DIRECTORS EXECUTIVE OFFICERS
GEORGE F. STAUDTER CAROLYN B. LEWIS GEORGE A. RIO*
Director of Koger Equity, Inc. President of President, Treasurer
Independent Financial Consultant The CBL Group and Chief Financial Officer
RICHARD W. DALRYMPLE LAWRENCE J. TOAL CHRISTOPHER J. KELLEY*
President of Teamwork Mgmt., Inc. Chairman/President/CEO of Vice President and Secretary
Dime Bancorp, Inc.
<FN>
*Affiliated person of the Distributor
</FN>
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TD WATERHOUSE ASSET MANAGEMENT, INC.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
<S> <C> <C>
DIRECTORS
LAWRENCE M. WATERHOUSE, JR. FRANK J. PETRILLI RICHARD H. NEIMAN
Chairman Chairman, President and Executive Vice President,
TD Waterhouse Holdings, Inc. Chief Executive Officer General Counsel and Secretary
SENIOR OFFICERS
DAVID A. HARTMAN B. KEVIN STERNS MICHELE R. TEICHNER
Senior Vice President Executive Vice President Senior Vice President
Chief Investment Officer Chief Financial Officer & Treasurer Operations & Compliance
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SERVICE PROVIDERS
<S> <C> <C>
INVESTMENT MANAGER TRANSFER AGENT INDEPENDENT AUDITORS
TD Waterhouse Asset Management, Inc. National Investors Services Corp. Ernst & Young LLP
100 Wall Street 55 Water Street 787 Seventh Avenue
New York, NY 10005 New York, NY 10041 New York, NY 10019
ADMINISTRATOR & CUSTODIAN LEGAL COUNSEL
SHAREHOLDER SERVICING The Bank of New York Swidler Berlin Shereff
TD Waterhouse Investor Services, Inc. 100 Church Street Friedman, LLP
100 Wall Street New York, NY 10286 405 Lexington Avenue
New York, NY 10005 New York, NY 10174
Customer Service Department DISTRIBUTOR
1-800-934-4448 Funds Distributor, Inc.
60 State Street
Boston, MA 02109
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TD WATERHOUSE FAMILY OF FUNDS, INC.(A)
DEAR SHAREHOLDER:
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I am pleased to provide you with the TD Waterhouse Family of Funds (the "Fund")
annual report for the fiscal year ended October 31, 1999.
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 October 31, 1999, assets in the three Portfolios
increased to a total of $6.0 billion.
PORTFOLIO RESULTS*
For the fiscal year ended October 31, 1999, the three money market Portfolios
had the following annualized returns.**
o The Money Market Portfolio had an annualized return of 4.54% and an
annualized yield of 4.44%.
o The U.S. Government Portfolio had an
annualized return of 4.49% and an
annualized current yield of 4.40%.
o The Municipal Portfolio had an annualized return of 2.59%, a taxable
equivalent return of 4.05%(1), an annualized current yield of 2.56% and an
annualized taxable equivalent yield of 4.00%(1).
Money market rates have increased approximately 1/2 of 1% over the past six
months. The Federal Reserve Bank (the "Fed") has cautiously monitored the
financial markets and the economy for signs of inflationary growth and has
increased the targeted Federal Funds Rate twice, for the six months ended
October 31, 1999 and subsequently during November 1999, 1/4 of 1% each time.
These moves can be considered anticipatory by the Fed to head off a potentially
heated up economy six months to one year in the future. The bond market and
interest rates in general appear to be signaling that we are at the upper range
for interest rates, and expectations are for interest rates to trend lower over
the next six months.
The Fed has stated that the financial markets have prepared for Y2K and does not
anticipate any significant computer related disruptions. The Fed has announced
that it stands ready to provide all the liquidity necessary for the financial
markets to service any extraordinary withdrawal demands.
We have structured each Portfolio to provide adequate liquidity for increased
redemptions. Since all the Portfolios are invested in high quality short-term
securities, we do not anticipate any market disruption at year-end and recommend
that our shareholders remain calm through all the media hype of Y2K issues. We
will maintain a market neutral position through year-end and reassess our
position at the beginning of next year.
We look forward to continuing to meet your expanding investment needs in the
years to come.
Sincerely,
/s/Frank J. Petrilli
Frank J. Petrilli
President and Chief Operating Officer
TD Waterhouse Group, Inc.
December 8, 1999
(A) As of September 20, 1999, Waterhouse Investors Family of Funds, Inc. changed
its name to TD Waterhouse Family of Funds, Inc.
*An investment in a money market portfolio is not insured nor guaranteed by the
Federal Deposit Insurance Corporation or any government agency. Although, the
Portfolios seek to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Portfolios.
**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 fiscal year ended October
31, 1999, the Investment Manager and its affiliates waived a portion of their
fees 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 4.33% and 4.23% for the Money Market Portfolio, 4.28% and 4.21% for
the U.S Government Portfolio and 2.38% and 2.35%, for the Municipal Portfolio.
The annualized taxable equivalent return and yield for the Municipal Portfolio
would have been 3.72% and 3.67%, respectively. The yield more closely reflects
the current earnings of a Portfolio than the total return. Yield will fluctuate.
(1) Taxable equivalent return and yield at 36% marginal federal income tax rate.
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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 ................................................10
Money Market Portfolio
Schedule of Investments ...................................................13
U.S. Government Portfolio
Schedule of Investments ...................................................17
Municipal Portfolio
Schedule of Investments ...................................................19
Notes to Schedules of Investments ............................................25
Report of Independent Auditors ...............................................26
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TD WATERHOUSE FAMILY OF FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1999
Money U.S.
Market Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (including
repurchase agreements of $34,991,000,
$44,744,000, and $0, respectively) (Note 2) $ 4,618,165,431 $ 875,713,921 $ 485,220,975
Cash 30,434 368 6,613
Interest receivable 33,334,378 6,051,047 3,054,368
Other assets 5,698 61 46
------------------ ------------------ -----------------
TOTAL ASSETS 4,651,535,941 881,765,397 488,282,002
LIABILITIES
Dividends payable to shareholders 1,841,678 347,310 114,470
Payable for securities purchased -- -- 606,740
Payable to Investment Manager and
affiliates (Note 3) 2,819,430 552,907 353,671
Accrued expenses and other liabilities 606,242 144,927 70,427
------------------ ------------------ -----------------
TOTAL LIABILITIES 5,267,350 1,045,144 1,145,308
------------------ ------------------ -----------------
NET ASSETS $ 4,646,268,591 $ 880,720,253 $ 487,136,694
================== ================== =================
Net assets consist of:
Paid-in capital $ 4,646,326,195 $ 880,721,411 $ 487,141,187
Accumulated net realized losses from
security transactions (57,604) (1,158) (4,493)
------------------ ------------------ -----------------
Net assets, at value $ 4,646,268,591 $ 880,720,253 $ 487,136,694
================== ================== =================
Shares outstanding ($.0001 par value
common stock, 50 billion, 20 billion,
and 10 billion shares authorized, respectively) 4,646,326,195 880,721,411 487,141,187
================== ================== =================
Net asset value, redemption price and offering
price per share (Note 2) $ 1.00 $ 1.00 $ 1.00
================== ================== =================
Please see accompanying notes to financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
STATEMENTS OF OPERATIONS
For the Year Ended October 31, 1999
Money U.S.
Market Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 208,000,787 $ 34,975,696 $ 14,501,986
------------------ ------------------ -----------------
EXPENSES
Investment management fees (Note 3) 13,614,660 2,374,984 1,538,867
Shareholder servicing fees (Note 3) 10,124,166 1,696,417 1,106,078
Transfer agent fees (Note 3) 8,069,497 1,357,133 879,351
Administration fees (Note 3) 4,034,742 678,567 439,676
Registration fees 612,098 176,821 125,127
Shareholder reports and mailing 245,218 29,193 17,516
Custody fees (Note 2) 250,989 53,379 29,601
Professional fees 101,058 15,990 10,950
Directors' fees 11,250 11,250 11,250
Other expenses 230,179 24,548 6,603
------------------ ------------------ -----------------
TOTAL EXPENSES 37,293,857 6,418,282 4,165,019
Fees waived / expenses reimbursed by the
Investment Manager and its affiliates (Note 3) (8,623,880) (1,322,234) (909,239)
------------------ ------------------ -----------------
NET EXPENSES 28,669,977 5,096,048 3,255,780
------------------ ------------------ -----------------
NET INVESTMENT INCOME 179,330,810 29,879,648 11,246,206
------------------ ------------------ -----------------
NET REALIZED GAINS (LOSSES) FROM
SECURITY TRANSACTIONS (54,821) 2,543 (3,652)
------------------ ------------------ -----------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 179,275,989 $ 29,882,191 $ 11,242,554
================== ================== =================
Please see accompanying notes to financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Money U.S.
Market Government Municipal
Portfolio Portfolio Portfolio
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
October 31, October 31, October 31, October 31, October 31, October 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 179,330,810 $ 113,300,200 $ 29,879,648 $ 21,967,834 $ 11,246,206 $ 9,149,602
Net realized gains (losses)
from security transactions (54,821) 36 2,543 (3,939) (3,652) 2,572
--------------- --------------- --------------- --------------- ------------- --------------
Net increase in net assets
from operations 179,275,989 113,300,236 29,882,191 21,963,895 11,242,554 9,152,174
--------------- --------------- --------------- --------------- ------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income (179,330,810) (113,300,200) (29,879,648) (21,967,834) (11,246,206) (9,149,602)
--------------- --------------- --------------- --------------- ------------- --------------
CAPITAL SHARE
TRANSACTIONS
($1.00 per share):
Proceeds from shares sold 21,183,221,750 9,765,915,572 2,840,728,249 1,534,515,923 1,668,809,031 1,073,142,210
Shares issued in reinvestment
of dividends 178,243,250 112,790,339 29,660,883 21,892,239 11,184,591 9,118,338
Payments for shares redeemed (19,672,867,482) (8,708,766,830) (2,527,075,190) (1,421,685,766)(1,573,943,722) (966,796,370)
--------------- --------------- --------------- --------------- ------------- --------------
Net increase in net assets from
capital share transactions 1,688,597,518 1,169,939,081 343,313,942 134,722,396 106,049,900 115,464,178
--------------- --------------- --------------- --------------- ------------- --------------
TOTAL INCREASE IN NET ASSETS 1,688,542,697 1,169,939,117 343,316,485 134,718,457 106,046,248 115,466,750
NET ASSETS:
Beginning of year 2,957,725,894 1,787,786,777 537,403,768 402,685,311 381,090,446 265,623,696
--------------- --------------- --------------- --------------- ------------- --------------
End of year $4,646,268,591 $ 2,957,725,894 $ 880,720,253 $ 537,403,768 $ 487,136,694 $ 381,090,446
=============== =============== =============== =============== ============= ==============
Please see accompanying notes to financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
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.
MONEY MARKET
PORTFOLIO
Year Year Year Period
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
1999 1998 1997 1996*
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------- -------------- -------------- --------------
Net investment income 0.044 0.049 0.048 0.041
-------------- -------------- -------------- --------------
Distributions from net
investment income (0.044) (0.049) (0.048) (0.041)
-------------- -------------- -------------- --------------
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
============== ============== ============== ==============
RATIOS
Ratio of expenses to average net assets 0.71% 0.75% 0.83% 0.79%(A)
Ratio of net investment income
to average net assets 4.44% 4.92% 4.79% 4.64%(A)
Decrease reflected in above net
expense ratio due to waivers/
reimbursements by the
Investment Manager and
its affiliates (Note 3) 0.21% 0.15% 0.08% 0.13%(A)
SUPPLEMENTAL DATA
Total investment return (B) 4.54% 5.04% 4.89% 4.82%(A)
Net assets, end of period $4,646,268,591 $2,957,725,894 $1,787,786,777 $1,342,610,086
============== ============== ============== ===============
Average net assets $4,035,269,586 $2,302,804,288 $1,592,722,254 $1,104,558,438
============== ============== ============== ===============
U.S. GOVERNMENT
PORTFOLIO
Year Year Year Period
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
1999 1998 1997 1996*
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- ------------ ------------- -------------
Net investment income 0.044 0.048 0.047 0.041
------------- ------------ ------------- -------------
Distributions from net
investment income (0.044) (0.048) (0.047) (0.041)
------------- ------------ ------------- -------------
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
============= ============ ============= =============
RATIOS
Ratio of expenses to average net assets 0.75% 0.78% 0.81% 0.73%(A)
Ratio of net investment income
to average net assets 4.40% 4.80% 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) 0.19% 0.11% 0.07% 0.18%(A)
SUPPLEMENTAL DATA
Total investment return (B) 4.47% 4.91% 4.79% 4.82%(A)
Net assets, end of period $880,720,253 $537,403,768 $402,685,311 $371,046,770
============= ============ ============= =============
Average net assets $678,643,185 $457,821,528 $398,635,777 $293,708,330
============= ============ ============= =============
<FN>
* The Portfolio commenced operations on December 20, 1995.
(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.
</FN>
Please see accompanying notes to financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
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.
MUNICIPAL
PORTFOLIO
Year Year Year Period
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
1999 1998 1997 1996*
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000
------------- ------------- ------------- ------------
Net investment income 0.026 0.029 0.030 0.026
------------- ------------- ------------- ------------
Distributions from net investment income (0.026) (0.029) (0.030) (0.026)
------------- ------------- ------------- ------------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000
============= ============= ============= ============
RATIOS
Ratio of expenses to average net assets 0.74% 0.72% 0.74% 0.62%(A)
Ratio of net investment income to average net assets 2.56% 2.93% 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) 0.21% 0.13% 0.10% 0.23%(A)
SUPPLEMENTAL DATA
Total investment return (B) 2.59% 2.98% 3.01% 3.05%(A)
Net assets, end of period $487,136,694 $381,090,446 $265,623,696 $226,253,394
============= ============= ============ ============
Average net assets $439,705,095 $312,133,086 $252,444,536 $196,592,413
============= ============= ============ ============
<FN>
* The Portfolio commenced operations on December 20, 1995.
(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.
</FN>
Please see accompanying notes to financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1999
NOTE 1 -- ORGANIZATION
TD Waterhouse Family of Funds, Inc. (the "Fund") was organized as a Maryland
corporation on August 16, 1995. On September 20, 1999, the Waterhouse Investors
Family of Funds, Inc. changed its name to TD Waterhouse 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"). Shares of the Fund are registered under the Securities Act
of 1933, as amended. 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. At
October 31, 1999, the cost of investments of each Portfolio for Federal income
tax purposes was substantially the same as the cost for financial reporting
purposes.
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. Under
the terms of the custody agreement, each Portfolio receives net earnings credits
based on available cash balances left on deposit. Income earned under this
arrangement is included in interest income.
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.
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.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1999
(CONTINUED)
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.
As of October 31, 1999, for Federal income tax purposes the following Portfolios
have capital loss carryforwards available to offset future capital gains, if
any:
<TABLE>
<CAPTION>
Amount Expires
--------- ---------
<S> <C> <C>
Money Market Portfolio $54,821 2007
U.S. Government Portfolio 1,396 2006
Municipal Portfolio 841 2005
3,652 2007
</TABLE>
NOTE 3 -- INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES OF
THE INVESTMENT MANAGER
Under the terms of an Investment Management Agreement with TD Waterhouse Asset
Management, Inc. (the "Investment Manager"), a majority-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. For the year ended October 31, 1999, the Investment Manager
voluntarily waived $439,676 of its investment management fee for the Municipal
Portfolio.
TD Waterhouse Investor Services, Inc. ("TD Waterhouse"), 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 TD Waterhouse a monthly fee
at an annual rate of .10 of 1% of each Portfolio's average daily net assets.
TD Waterhouse 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 TD Waterhouse, a monthly fee at an annual rate of .25 of 1% of average
daily net assets. For the year ended October 31, 1999, TD Waterhouse voluntarily
waived $8,273,493, $1,322,234 and $469,563 of its shareholder servicing fees for
the Money Market Portfolio, the U.S. Government Portfolio and the Municipal
Portfolio, respectively.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1999
(CONTINUED)
The Fund has entered into a Transfer Agency and Dividend Disbursing Agency
Agreement with National Investors Services Corp. (the "Transfer Agent"), an
affiliate of the Investment Manager, to perform transfer and dividend disbursing
agency-related services. For such services, each Portfolio pays the Transfer
Agent a monthly fee at an annual rate of .20 of 1% of average daily net assets.
For the year ended October 31, 1999, the Transfer Agent voluntarily waived
$350,387 of its transfer agency and dividend disbursing agency fees for the
Money Market Portfolio.
Each Director who is not an "interested person" ("independent Director") as
defined in the Act, who serves on the Board of Directors/Trustees of one or more
portfolios in the "Fund Complex" (which includes the Fund, TD Waterhouse Trust
and National Investors Cash Management Fund, Inc.), receives:
1. a base annual retainer of $12,000, payable quarterly.
2. a supplemental annual retainer of $5,000, if serving on the Board of
Directors/Trustees of more than one company in the Fund Complex, and
3. a meeting fee of $2,000 for each meeting attended.
Compensation is allocated between the companies and among the respective
portfolios.
NOTE 4 -- FEDERAL TAX INFORMATION (UNAUDITED)
In accordance with Federal tax requirements, the Municipal Portfolio designates
substantially all the dividends paid from net investment income during the year
ended October 31, 1999 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 1999 calendar year early in 2000.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
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<S> <C> <C> <C>
CORPORATE OBLIGATIONS
ASSET-BACKED OBLIGATIONS--24.7%
$ 30,000,000 ANRC Auto Owner Trust Ser. 1999-A, Cl. A-1, 6.17%, due 10/16/00 (Insured: MBIA) 6.17 $ 30,000,000
32,000,000 Asset-Backed Securities Investment Trust Ser. 1997-F, VRN, 5.40%, due 11/15/99
(GTY: MBIA) (Note A) 5.40 32,000,000
20,100,000 Bavaria TRR Corp., due 11/16/99 (LOC: Bayerische Hypo -und Vereinsbank, S.A.) (Note E) 5.42 20,054,859
94,250,000 CARMAX Auto Owner Trust, Ser. 1999-1, Cl. A-1, 6.20%, due 11/15/00
(Insured: MBIA) (Note E) 6.20 94,250,000
37,500,000 Citibank Capital Markets Assets LLC, due 2/18/00 5.95 36,841,458
50,000,000 Corporate Receivables Corp., VRN, 5.44%, due 11/15/99 (Note A, E) 5.44 50,000,000
50,000,000 CXC Inc., VRN, 5.43%, due 11/16/99 (Note A, E) 5.43 50,000,000
50,000,000 Dakota Certificate Program, due 11/10/99 (Note E) 5.41 49,932,625
50,000,000 Dakota Certificate Program, due 1/14/00 (Note E) 6.02 49,393,611
32,548,000 Forrestal Funding Master Trust, due 1/26/00 (Counter Party: Bank of America NT & SA)
(Note E) 6.17 32,076,036
22,191,084 GE Aircraft Engine Receivables Corp. Multi-Mode Receivables Pool Participation
Certificate, Ser. 1998-1, due 12/27/99 (Note E) 5.41 22,191,084
24,846,483 IKON Receivables, LLC, Ser. 99-1, Cl. A-1, 5.11%, due 6/15/00 (Insured: AMBAC) (Note E) 5.11 24,846,483
75,000,000 IKON Receivables, LLC, Ser. 99-2, Cl. A-1, 6.14%, due 10/16/00 (Insured: AMBAC) (Note E) 6.14 75,000,000
18,000,000 Liberty Lighthouse U.S. Capital Co. LLC, VRN, 5.46%, due 11/12/99 (Note A, E) 5.57 17,984,715
200,000,000 Liberty Lighthouse U.S. Capital Co. LLC, VRN, 6.18%, due 1/10/00 (Note A, E) 6.18 200,001,516
27,889,000 Long Lane Master Trust IV, due 11/10/99 (Counter Party: BankBoston, N.A.) (Note E) 5.44 27,851,559
30,000,000 Park Avenue Receivables Corp., VRN, 5.43%, due 11/13/99
(LIQ: 10% Chase Manhattan Bank) (Note A) (Note E) 5.43 30,000,000
43,160,000 Park Avenue Receivables Corp., due 11/19/99 (LIQ: 10% Chase Manhattan Bank) (Note E) 5.41 43,043,900
51,291,000 Park Avenue Receivables Corp., due 2/16/00 (LIQ: 10% Chase Manhattan Bank) (Note E) 5.98 50,407,998
25,000,000 Park Avenue Receivables Corp., due 2/22/00 (LIQ: 10% Chase Manhattan Bank) (Note E) 5.94 24,547,215
50,000,000 RACERS Series 1999-16, VRN, 5.42%, due 11/2/99
(GTY: National Westminster Bank PLC) (Note A, E) 5.42 50,000,000
100,000,000 RACERS Series 1999-26-MM-CCABS, VRN, 5.55%, due 11/15/99
(Counter Party: AIG) (Note A, E) 5.55 100,000,000
894,519 WFS Financial 1999A Owner Trust Notes Class A-1, 5.01%, due 2/20/00 (GTY: FSA) 5.01 894,519
37,862,488 WFS Financial 1999B Owner Trust Notes Class A-1, 5.40%, due 7/20/00 (GTY: FSA) 5.40 37,862,488
--------------
1,149,180,066
--------------
BROKER/DEALER OBLIGATIONS--10.8%
20,000,000 Bear Stearns Cos., Inc., VRN, 5.72%, due 11/3/99 (Note A) 5.39 20,000,313
20,000,000 Bear Stearns Cos., Inc., VRN, 5.52%, due 11/10/99 (Note A) 5.43 20,006,312
20,000,000 Bear Stearns Cos., Inc., VRN, 5.51%, due 11/12/99 (Note A) 5.43 20,009,213
5,000,000 Bear Stearns Cos., Inc., VRN, 5.58%, due 11/23/99 (Note A) 5.62 4,998,055
65,000,000 Bear Stearns Cos., Inc., VRN, 5.58%, due 11/29/99 (Note A) 5.58 65,000,000
100,000,000 Bear Stearns Cos., Inc., VRN, 5.51%, due 12/16/99 (Note A) 5.51 100,000,000
70,000,000 Goldman Sachs Group, L.P., VRN, 5.53%, due 11/26/99 (Note A, E) 5.53 70,000,000
10,000,000 Goldman Sachs Group, L.P., VRN, 6.33%, due 1/7/00 (Note A, E) 6.14 10,003,438
120,000,000 Goldman Sachs Group, L.P., VRN, 6.26%, due 1/18/00 (Note A, B, E) 6.26 120,000,000
7,000,000 Merrill Lynch & Co., Inc., VRN, 5.36%, due 11/5/99 (Note A) 4.92 7,000,036
25,000,000 Merrill Lynch & Co., Inc., VRN, 5.85%, due 11/17/99 (Note A) 5.41 25,031,630
5,000,000 Merrill Lynch & Co., Inc., VRN, 5.68%, due 11/22/99 (Note A) 5.45 5,003,523
7,500,000 Merrill Lynch & Co., Inc., VRN, 5.68%, due 11/22/99 (Note A) 5.49 7,504,555
25,000,000 Salomon Smith Barney Holdings, Inc., VRN, 5.55%, due 11/1/99 (Note A) 5.55 24,999,713
--------------
499,556,788
--------------
FINANCE & INSURANCE OBLIGATIONS--9.0%
21,000,000 CIT Group Holdings, Inc., 5.88%, due 12/9/99 5.02 21,021,719
75,000,000 General Motors Acceptance Corp., VRN, 5.49%, due 11/1/99 (Note A) 5.65 74,900,265
16,800,000 General Motors Acceptance Corp., VRN, 5.45%, due 11/24/99 (Note A) 5.44 16,800,638
20,000,000 GMAC Australia Finance, VRN, 5.55%, due 11/19/99 (Note A) 5.45 20,011,491
25,000,000 Heller Financial, Inc., VRN, 5.71%, due 11/15/99 (Insured: MBIA) (Note A) 5.56 25,001,396
60,000,000 Metropolitan Life Insurance Co., VRN, 6.15%, due 1/1/00 (Note A, E) 6.15 60,000,000
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13
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000,000 Sigma Finance, Inc., VRN, 5.57%, due 11/1/99 (Note A) 5.57 $ 100,000,000
31,000,000 Sigma Finance, Inc., due 1/28/00 (Note E) 5.43 30,602,167
25,000,000 Sigma Finance, Inc., 5.20%, due 2/22/00 (Note E) 5.20 25,000,000
45,000,000 Xerox Credit Corp., 5.32%, due 3/31/00 5.35 44,995,147
--------------
418,332,823
--------------
INDUSTRIAL & OTHER OBLIGATIONS--4.9%
28,434,050 Amtrak Trust 93-B Ser. A VRDN, 5.56%, due 11/2/99 (GTY: General Electric Co.) (Note C) 5.55 28,434,050
22,305,721 Amtrak Trust 93-B Ser. B VRDN, 5.56%, due 11/2/99 (GTY: General Electric Co.) (Note C) 5.55 22,305,721
20,000,000 AT&T Corp., 8.25%, due 1/11/00 5.35 20,098,445
50,000,000 AT&T Corp., VRN, 6.14%, due 1/13/00 (Note A) 6.18 49,986,066
10,000,000 Frontenac Properties, Inc., VRDN, 5.46%, due 11/03/99 5.46 10,000,000
(GTY: Sisters of Mercy Health System, Inc.) (Notes A, C)
20,000,000 Southern California Edison Co., VRN, 5.51%, due 11/26/99 (Note A) 5.51 20,000,000
75,000,000 Xerox Corp., 5.64%, due 7/14/00 5.69 74,974,595
--------------
225,798,877
--------------
LOAN PARTICIPATIONS--4.4%
42,000,000 Four Times Square Partners, L.P., 5.58%, due 12/2/99
(GTY: Prudential Ins. Co. of America; Other support: Chase Manhattan Bank) (Note B) 5.58 42,000,000
49,000,000 Luddite Associates, 6.20%, due 3/6/00
(GTY: Prudential Ins. Co. of America; Other support: Chase Manhattan Bank) (Note B) 6.20 49,000,000
92,000,000 Prudential Ins. Co. of America, 5.57%, due 12/10/99
(Other support: Chase Manhattan Bank) (Note B) 5.57 92,000,000
22,000,000 Prudential Ins. Co. of America, 6.20%, due 3/6/00
(Other support: Chase Manhattan Bank) (Note B) 6.20 22,000,000
--------------
205,000,000
--------------
TOTAL CORPORATE OBLIGATIONS--53.8% 2,497,868,554
--------------
BANK OBLIGATIONS
BANK NOTES--17.3%
30,000,000 American Express Centurion Bank, VRN, 5.41%, due 11/10/99 (Note A) 5.41 30,000,000
55,000,000 Bank One Corp., VRN, 5.39%, due 11/9/99 (Note A) 5.41 54,984,702
58,500,000 Branch Banking & Trust Co., N.C., 4.96%, due 1/20/00 4.99 58,496,288
20,000,000 Branch Banking & Trust Co., VRN, 5.46%, due 11/1/99 (Note A) 5.73 19,987,458
100,000,000 Branch Banking & Trust Co., VRN, 5.61%, due 11/1/99 (Note A) 5.65 99,966,780
50,000,000 Branch Banking & Trust Co., VRN, 5.63%, due 11/1/99 (Note A) 5.67 49,982,987
50,000,000 Citicorp, VRN, 5.43%, due 11/2/99 (Note A) 5.43 50,000,000
75,000,000 Comerica Bank, N.A., VRN, 5.36%, due 11/15/99 (Note A) 5.39 74,994,634
50,000,000 European American Bank, 5.28%, due 5/15/00 5.32 49,989,673
50,000,000 First Union National Bank, VRN, 5.55%, due 11/29/99 (Note A) 5.55 50,000,000
50,000,000 Fleet National Bank, VRN, 5.47%, due 11/1/99 (Note A) 5.52 49,990,692
5,000,000 Huntington National Bank, VRN, 6.22%, due 1/13/00 (Note A) 6.16 5,000,586
15,000,000 Huntington National Bank, VRN, 6.25%, due 1/21/00 (Note A) 6.25 14,998,850
40,000,000 J.P. Morgan & Co. Inc., 5.30%, due 3/13/00 5.72 39,939,774
25,000,000 LaSalle National Bank (Chicago), 4.97%, due 2/1/00 4.97 25,000,000
25,000,000 Morgan Guaranty Trust Co. of NY, VRN, 5.43%, due 11/29/99 (Note A) 5.44 24,999,820
105,000,000 Wells Fargo & Co., VRN, 5.39%, due 12/29/99 (Note A) 5.46 104,965,562
--------------
803,297,806
--------------
DOMESTIC BANK SUPPORTED OBLIGATIONS--2.1%
15,000 701 Green Valley Association LLC, Ser. 1997 VRDN, 5.50%, due 11/4/99
(LOC: First Union National Bank) (Note C) 5.42 15,000
3,480,000 Adult Communities Total Services, Inc., Ser. 1996 VRDN, 5.50%, due 11/4/99
(LOC: LaSalle National Bank) (Note C) 5.42 3,480,000
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14
<PAGE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 7,500,000 CEGW, Inc. Tax. Notes, Ser. 1999 VRDN, 5.50%, due 11/1/99
(LOC: PNC Bank, N.A.) (Note C) 5.42 $ 7,500,000
13,725,000 Community Health Systems, Inc., Ser. 1991-A VRDN, 5.45%, due 11/3/99
(LOC: First Union National Bank) (Note C) 5.38 13,725,000
20,900,000 EPI Corp., Taxable Adj. Rate Notes, Ser. 1998 VRDN, 5.50%, due 11/1/99
(LOC: PNC Bank, N.A.) (Note C) 5.50 20,900,000
31,550,000 Metrocrest Hospital Authority, Ser. 89-A, due 2/7/00 (LOC: Bank of New York) 6.06 31,040,207
305,000 Orloski Service Station Inc. & Affiliates (Frank & Adeline Orloski) Tax., Ser. 1998A
VRDN, 5.50%, due 11/3/99 (LOC: First Union National Bank) (Note C) 5.42 305,000
285,000 Orloski Service Station Inc. & Affiliates (Orloski Service Station Inc.) Tax. Ser. 1998B
VRDN, 5.50%, due 11/3/99 (LOC: First Union National Bank) (Note C) 5.42 285,000
145,000 Rockland Industries, Inc. Tax., Ser. 1997 VRDN, 5.50%, due 11/4/99
(LOC: First Union National Bank) (Note C) 5.42 145,000
3,885,000 Senior Systems Technology LLC VRDN, 5.50%, due 11/1/99
(LOC: Comerica Bank - California) (Note C) 5.50 3,885,000
5,100,000 Stech, LLP Tax. Adj. Rate Bonds, Ser. 1998 VRDN, 5.50%, due 11/1/99
(LOC: PNC Bank, N.A.) (Note C) 5.42 5,100,000
30,000 Triad Group, Inc., Ser. 1997 VRDN, 5.50%, due 11/4/99
(LOC: First Union National Bank) (Note C) 5.42 30,000
11,875,000 Willow Run Foods, Inc., Ser. 1999-1 VRDN, 5.50%, due 11/1/99
(LOC: PNC Bank, N.A.) (Note C) 5.42 11,875,000
--------------
98,285,207
--------------
FOREIGN BANK SUPPORTED OBLIGATIONS--12.1%
35,000,000 Banca Serfin SA, Institucion de Banca Multiple, Grupo Financiero Serfin, due 11/18/99
(LOC: Barclays Bank PLC) 5.13 34,919,344
50,000,000 Banca Serfin SA, Institucion de Banca Multiple, Grupo Financiero Serfin, due 11/22/99
(LOC: Barclays Bank PLC) 5.10 49,856,792
15,000,000 Banco BCN Barclays e Galicia (Bahamas) Ltd., due 11/4/99 (LOC: Barclays Bank PLC) 5.03 14,993,856
11,000,000 Banco BCN Barclays e Galicia (Bahamas) Ltd., due 11/5/99 (LOC: Barclays Bank PLC) 5.03 10,993,993
9,500,000 Banco BCN Barclays e Galicia (Bahamas) Ltd., due 11/8/99 (LOC: Barclays Bank PLC) 5.03 9,490,921
25,000,000 Banco Bradesco, S.A. Grand Cayman, due 4/3/00 (LOC: WestDeutsche Landesbank) 6.01 24,376,514
20,000,000 Banco Itau, due 05/12/00 (LOC: Bayerische Hypo -und Vereinsbank, S.A.) 6.02 19,265,970
20,000,000 Banco Rio de la Plata SA, due 2/4/00 (LOC: Barclays Bank PLC) 5.96 19,692,833
25,000,000 BOS International Australia, Ltd. VRDN, 5.31%, due 12/1/99 (GTY: Bank of Scotland)
(Note C) 5.36 24,996,050
40,000,000 Comision Federal de Electricidad, Ser. A, due 3/27/00 (LOC: WestDeutsche Landesbank) 6.00 39,049,400
17,021,000 Cosco (Cayman) Funding Co. Ltd., due 11/18/99 (LINE: Rabobank Nederland) (Note E) 5.46 16,977,355
20,500,000 CSN Overseas, Ser. B, due 1/18/00 (LOC: Banco Santander) 6.01 20,238,386
35,000,000 CSN Overseas, Ser. A, due 1/18/00 (LOC: Barclays Bank PLC) 6.02 34,552,583
20,000,000 CSN Overseas, Ser. A, due 3/2/00 (LOC: Barclays Bank PLC) 5.97 19,606,211
25,000,000 ED&F Man Finance, Inc., due 12/8/99 (LOC: Rabobank Nederland) 5.48 24,861,250
15,000,000 Formosa Plastics Corp., USA, Ser. A, due 4/12/00 (LOC: ABN Amro Bank, NV) 6.07 14,600,650
25,000,000 Generale Funding LLC, due 11/3/99 (LOC: Generale Bank) 5.32 24,992,708
52,500,000 Holy Cross Health System Corp., Ser. 1996, due 2/23/00
(LOC: KBC Bank NV & Northern Trust Co.) 5.95 51,535,750
24,500,000 Nacional Financiera, S.N.C., due 11/22/99 (LOC: Barclays Bank PLC) 5.14 24,431,886
15,820,000 St. Francis Place LP Tax. MFH VRDN (St. Francis Place) Ser. 98, 5.49%, due 11/4/99
(LOC: Credit Suisse First Boston) (Note C) 5.42 15,820,000
800,000 Synectic Partnership VRDN, 5.50%, due 11/3/99 (LOC La Salle National Bank) (Note C) 5.42 800,000
20,000,000 Transportadora de Gas del Sur, S.A., due 3/29/00 (LOC: Dresdner Bank AG) 6.17 19,503,333
20,000,000 Transportadora de Gas del Sur, S.A., due 3/30/00 (LOC: Dresdner Bank AG) 6.17 19,503,087
11,000,000 Unibanco-Uniao de Bancos Brasileiros, Ser. A, due 7/13/00
(LOC: WestDeutsche Landesbank) 6.08 10,549,642
19,000,000 Unibanco-Uniao de Bancos Brasileiros, Ser. B, due 7/13/00
(LOC: WestDeutsche Landesbank) 6.08 18,302,672
--------------
563,911,186
--------------
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15
<PAGE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
YANKEE BANK CERTIFICATES OF DEPOSIT--8.9%
$ 60,000,000 Bayerische Hypo -und Vereinsbank AG, 5.17%, due 5/4/00 5.23 $ 59,983,898
50,000,000 Bayerische Hypo -und Vereinsbank AG, VRN, 5.33%, due 11/26/99 (Note A) 5.38 49,988,099
27,600,000 Commerzbank AG, 5.16%, due 2/25/00 5.22 27,594,932
40,000,000 Commerzbank AG, 5.17%, due 4/24/00 5.22 39,990,772
50,000,000 Deutsche Bank AG, 5.07%, due 2/17/00 5.11 49,995,722
60,000,000 Deutsche Bank AG, 5.36%, due 5/22/00 5.42 59,983,970
50,000,000 Societe Generale, VRN, 5.33%, due 11/3/99 (Note A) 5.38 49,991,628
75,000,000 Svenska Handelsbanken AB, 5.23%, due 3/1/00 5.26 74,992,821
--------------
412,521,842
--------------
TOTAL BANK OBLIGATIONS--40.4% 1,878,016,041
--------------
TAXABLE MUNICIPAL OBLIGATIONS
5,000,000 Bergen County (NJ) Improvement Auth., County Gtd. Proj. Notes
(Bergen Pines Cty. Hosp. Proj.)Ser. 1998, 5.33%, due 3/16/00 5.33 5,000,000
25,000,000 Broward Cty., FL, Pro. Sports Fac. Tax. & Rev. Bonds
(Broward Cty. Civic Arena Proj.) Ser. 1996B 5.50 25,000,000
(TTR 14) VRDN, 5.50%, due 11/1/99 (Insured: MBIA; LIQ: Citibank) (Note C)
7,465,000 CA HFA Rev. Bonds, Ser. T, VRDN, 5.45%, due 11/3/99
(Insured: AMBAC; LIQ: Bank of America) (Note C) 5.45 7,465,000
38,000,000 CA Pollution Control Fin. Auth. Env. Imp. Rev. Bonds (Atlantic Richfield Co. Proj.)
Ser. 1997, 5.98%, due 2/3/00 (GTY: Atlantic Richfield Co.) 5.98 38,000,000
4,735,000 City of Gaithersburg (MD) Econ. Dev. Rev. (Asbury Methodist Village, Inc. Fac.)
Ser. 1997B VRDN, 5.50%, due 11/3/99 (Insured: MBIA; LIQ: Nationsbank N.A.) (Note C) 5.42 4,735,000
26,000,000 Gulf Coast IDA Env. Fac. Rev. Bonds (CITGO Petroleum Corp. Proj.) Tax.,
Ser. 1998A, 5.98%, due 2/3/00 (LOC: Royal Bank of Canada) 5.98 26,000,000
5,500,000 IDA of City of Portsmouth (VA) (PortCentre I Proj.) Ser. 1997B VRDN, 5.45%, due 11/1/99
(LOC: NationsBank, N.A.) (Note C) 5.45 5,500,000
23,900,000 IL Dev. Auth. Rev. Bonds, Ser. 1996 VRDN, 5.55%, due 11/4/99
(LOC: Northern Trust Co.) (Note C) 5.47 23,900,000
6,150,000 IL Health Facilities Auth., Ser. 1996F VRDN, 5.50%, due 11/3/99
(LOC: LaSalle National Bank) (Note C) 5.42 6,149,836
9,215,000 MD Health & Higher Educational Facilities Auth. Rev. Bonds, Ser. 1998B VRDN, 5.40%,
due 11/3/99 (LOC: First Union National Bank) (Note C) 5.40 9,215,000
11,000,000 MS Bus. Fin. Corp. Indus. Dev. Bonds (GE Plastics Finishing Inc. Proj.) Ser. 1998 VRDN,
5.48%, due 11/1/99 (GTY: General Electric Company) (Note C) 5.48 11,000,000
2,000,000 NH Bus. Fin. Auth. (Foundation for Seacoast Health) Ser. 1998B VRDN, 5.55%, due 11/4/99
(LOC: Fleet Bank, NH) (Note C) 5.55 2,000,000
6,000,000 NJ EDA State Pension Fdg. Bonds, Ser. 1997A VRDN, 5.50%, due 11/1/99
(Insured: MBIA; LIQ: Citibank, N.A.) (Note C) 5.50 6,000,000
3,825,000 PA Econ. Dev. Fin. Auth. Tax. Dev. Rev. Bonds (Country Meadows of Allentown Proj.)
Ser. 1996B VRDN, 5.50%, due 11/1/99 (LOC: Mellon Bank, N.A.) (Note C) 5.50 3,825,000
13,500,000 State of OH Tax. Dev. Asst., Ser. 1996, 5.50%, optional put 11/1/99
(Insured: AMBAC; LIQ: Citibank, N.A.) 5.50 13,500,000
20,000,000 State of OH Tax. Dev. Asst., Ser. CR16T, 5.50%, optional put 11/1/99
(Insured: AMBAC; LIQ: Citibank, N.A.) 5.50 20,000,000
--------------
TOTAL TAXABLE MUNICIPAL OBLIGATIONS--4.5% 207,289,836
--------------
REPURCHASE AGREEMENT--0.7%
34,991,000 ABN AMRO, Inc.
~dated 10/29/99, due 11/1/99, in the amount of $35,006,513
~fully collateralized by $38,339,437 FNMA mortgage backed bond, 6.00%, due 10/1/29,
value $35,690,821 5.32 34,991,000
--------------
TOTAL INVESTMENTS--99.4% 4,618,165,431
OTHER ASSETS AND LIABILITIES, NET--0.6% 28,103,160
--------------
NET ASSETS--100.0% $4,646,268,591
==============
Please see accompanying notes to the schedules of investments and financial
statements.
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16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FEDERAL FARM CREDIT BANK--3.9%
$ 10,000,000 Notes, 5.13%, due 11/3/99 (Note A) 5.20 $ 9,998,040
2,000,000 Notes, 5.80%, due 11/8/99 4.88 2,000,329
9,500,000 Notes, 5.22%, due 12/1/99 5.32 9,498,733
12,400,000 Notes, 5.25%, due 1/18/00 5.62 12,386,520
--------------
33,883,622
--------------
FEDERAL HOME LOAN BANK--39.7%
45,000,000 Notes, 5.31%, due 11/1/99 5.38 44,999,372
25,000,000 Notes, 5.31%, due 11/1/99 (Note A) 5.37 24,999,634
75,000,000 Notes, 5.35%, due 11/1/99 (Note A) 5.41 74,983,094
10,000,000 Notes, 5.58%, due 11/1/99 (Note A) 5.58 10,000,000
2,000,000 Notes, 5.91%, due 11/5/99 4.87 2,000,198
24,000,000 Notes, 8.35%, due 11/10/99 5.17 24,017,430
10,000,000 Notes, 5.21%, due 11/12/99 (Note A) 5.30 9,995,518
25,000,000 Notes, 5.26%, due 11/28/99 (Note A) 5.27 24,990,929
5,000,000 Notes, 5.93%, due 12/10/99 5.00 5,004,688
1,625,000 Notes, 10.15%, due 12/15/99 5.43 1,634,097
3,000,000 Notes, 5.83%, due 12/16/99 5.26 3,001,387
25,000,000 Notes, 5.92%, due 1/4/00 (Note A) 5.99 24,984,123
1,000,000 Notes, 4.90%, due 1/14/00 5.70 998,016
15,000,000 Notes, 4.95%, due 2/17/00 4.98 14,998,511
15,000,000 Notes, 5.00%, due 2/24/00 5.02 14,998,830
19,350,000 Notes, 5.01%, due 2/3/00 5.01 19,350,000
15,000,000 Notes, 5.05%, due 3/3/00 4.97 14,999,208
10,000,000 Notes, 5.10%, due 3/3/00 5.10 9,998,706
5,000,000 Notes, 5.25%, due 3/24/00 4.96 5,000,000
10,000,000 Notes, 5.05%, due 4/26/00 5.03 9,999,903
2,000,000 Notes, 6.64%, due 4/28/00 4.44 2,010,947
7,000,000 Notes, 5.54%, due 7/12/00 5.86 6,981,991
--------------
349,946,582
--------------
FEDERAL HOME LOAN MORTGAGE CORP.--10.6%
30,000,000 Discount Notes, due 1/20/00 5.62 29,633,333
10,000,000 Discount Notes, due 1/27/00 5.66 9,866,117
20,000,000 Discount Notes, due 3/2/00 5.66 19,626,544
35,000,000 Discount Notes, due 3/16/00 5.68 34,269,378
--------------
93,395,372
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--20.9%
15,000,000 Mortgage-backed Discount Notes, due 11/1/99 5.23 15,000,000
25,000,000 Mortgage-backed Discount Notes, due 11/2/99 5.19 24,996,444
20,000,000 Mortgage-backed Discount Notes, due 12/1/99 5.41 19,911,000
35,000,000 Mortgage-backed Discount Notes, due 2/1/00 5.67 34,502,689
8,400,000 Mortgage-backed Discount Notes, due 2/1/00 5.72 8,279,357
15,000,000 Mortgage-backed Discount Notes, due 5/1/00 5.85 14,573,817
25,000,000 Notes, 5.43%, due 11/1/99 (Note A) 5.46 24,993,176
2,800,000 Notes, 5.60%, due 1/12/00 5.70 2,798,320
2,150,000 Notes, 5.34%, due 1/24/00 5.63 2,147,996
2,385,000 Notes, 6.25%, due 3/20/00 5.70 2,389,357
7,125,000 Notes, 8.90%, due 6/12/00 5.48 7,267,369
7,500,000 Notes, 5.46%, due 6/21/00 5.45 7,500,000
20,000,000 Notes, 5.62%, due 8/9/00 5.79 19,974,082
--------------
184,334,407
--------------
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17
<PAGE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION--19.2%
$ 10,000,000 Notes, 5.41%, due 11/1/99 (Note A) 5.46 $ 9,995,164
30,000,000 Notes, 5.70%, due 11/2/99 (Note A) 5.79 29,992,035
20,000,000 Notes, 5.80%, due 11/2/99 (Note A) 5.76 19,998,012
40,000,000 Notes, 5.83%, due 11/2/99 (Note A) 5.79 39,980,581
25,000,000 Notes, 5.83%, due 11/2/99 (Note A) 5.83 24,977,807
25,000,000 Notes, 5.90%, due 11/2/99 (Note A) 5.87 24,999,642
10,000,000 Notes, 5.84%, due 11/4/99 (Note A) 5.78 9,999,491
9,500,000 Notes, 5.68%, due 6/30/00 5.65 9,467,206
--------------
169,409,938
--------------
REPURCHASE AGREEMENT--5.1%
44,744,000 ABN AMRO
~dated 10/29/99, due 11/1/99, in the amount of $44,763,837
~fully collateralized by $49,025,742 FNMA mortgage backed bond, 6.00%, due 10/1/29,
value $45,638,880 5.32 44,744,000
--------------
TOTAL INVESTMENTS--99.4% 875,713,921
OTHER ASSETS AND LIABILITIES, NET--0.6% 5,006,332
--------------
NET ASSETS--100.0% $ 880,720,253
==============
Please see accompanying notes to the schedules of investments and financial
statements.
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18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS
ALABAMA--2.44%
$ 280,000 Brewton GO Bonds, 3.25%, due 12/1/99 (Insured: MBIA) 3.25 $ 280,000
3,600,000 Decatur IDB Solid Waste Disp. Rev. Bonds (Amoco Chem. Co.) Ser. 1995 VRDN, 3.60% (Note C) 3.60 3,600,000
5,000,000 Huntsville IDB Rev. Bonds (Central CPVC Corp. Proj.) Ser. 1998 VRDN, 3.60%
(LOC: First Union Nationad Bank ) (Note C) 3.60 5,000,000
3,000,000 Montgomery IDB Rev. Bonds (Kinpak Inc. Proj.) VRDN, 3.60%
(LOC: First Union National Bank) (Note C) 3.60 3,000,000
--------------
11,880,000
--------------
ARIZONA--0.88%
2,100,000 Maricopa Cty. PCR Bonds (Southern Cal. Edison Proj.) Ser. 1985F, 3.85%, due 2/9/00 3.85 2,100,000
2,200,000 Pima County IDA (Tucson Elec. Co. Proj.) VRDN, 3.45% (LOC: Societe Generale) (Note C) 3.45 2,200,000
--------------
4,300,000
--------------
ARKANSAS--0.31%
1,515,000 Arkansas DFA Rev. Bonds (Conestoga Wood Proj.) VRDN, 3.65%
(LOC: First Union National Bank) (Note C) 3.65 1,515,000
--------------
CALIFORNIA--4.49%
300,000 California Alternative Energy Source Fin. Auth., Ser. 1986 VRDN, 3.75%
(LOC: Banque Nationale de Paris) (Note C) 3.75 300,000
10,000,000 California Higher Educ. Loan Auth., Ser. 1987A, 3.55%, put 7/1/00 (LOC: SLMA) 3.55 10,000,000
1,055,000 California Higher Educ. Student Loan Rev. Bonds, Ser. E2, 5.90%, due 12/1/99 3.20 1,057,289
5,000,000 California School Cash Reserve Prog. Auth., Ser. A, 4.00%, due 7/3/00 3.10 5,029,206
2,440,278 Pitney Bowes Credit Corp., Ser. 1999-1, 3.80%, put 7/12/00 3.80 2,440,278
3,065,000 Student Educ. Loan Marketing Corp., VRDN, 4.10% (LOC: State Street Bank) (Note C) 4.10 3,065,000
--------------
21,891,773
--------------
COLORADO--1.69%
6,725,000 Commerce City Rev. Bonds (Golf Enterprise) Ser. 1994 VRDN, 3.50%
(LOC: U.S. Bank of Washington) (Note C) 3.50 6,725,000
1,285,000 Metex Metro. Dist. GO Bonds, 5.00%, due 12/1/99 (Insured: MBIA) 3.35 1,286,700
225,000 Morgan Cty. SD #RE-3, 3.25%, due 12/1/99 (Insured: AMBAC) 3.25 225,000
--------------
8,236,700
--------------
CONNECTICUT--0.14%
505,000 Connecticut HFA Rev. Bonds, Ser. H2, 3.25%, due 11/15/99 3.25 505,000
200,000 New Britain GO Bonds, 4.40%, due 2/1/00 (Insured: MBIA) 3.30 200,538
--------------
705,538
--------------
DELAWARE--0.24%
1,160,000 Wilmington Community Rev. Bonds, Ser. A VRDN, 3.70% (LOC: Corestates Bank) (Note C) 3.70 1,160,000
--------------
DISTRICT OF COLUMBIA--4.38%
775,000 District of Columbia GO Bonds, 7.10%, due 6/1/00 (Insured: FSA) 3.55 790,577
2,720,000 District of Columbia GO Bonds, Ser. B-1 VRDN, 3.75% (LOC: Societe Generale) (Note C) 3.75 2,720,000
700,000 District of Columbia GO Bonds, Ser. B-2 VRDN, 3.75% (LOC: Bank of America) (Note C) 3.75 700,000
12,000,000 District of Columbia HFA COP (Tyler House Apts. Proj.) Ser. 1995A VRDN, 3.70%
(LOC: Landesbank Hessen Thuringen) (Note C) 3.70 12,000,000
1,100,000 District of Columbia Rev. Bonds (Catholic Univ. of Amer. Proj.) 5.00%, due 10/1/00
(Insured: AMBAC) 3.70 1,112,698
4,000,000 District of Columbia Water & Sewer Rev. Bonds (Eagle Trust Certs.) VRDN, 3.54%
(LIQ: Citibank) (Note C) 3.54 4,000,000
--------------
21,323,275
--------------
FLORIDA--5.22%
300,000 Alachua Cty. Health Facs. Rev. Bonds (Shands Teaching Hosp.) Ser. A, 4.25%, due 12/1/99
(Insured: MBIA) 3.20 300,252
2,000,000 Florida Board of Education (ABN-AMRO Munitops) VRDN, 3.61% (LIQ: ABN-AMRO Bank) (Note C) 3.61 2,000,000
700,000 Hillsboro Cty. Aviation Auth. (Tampa Int'l. Airport BAN) 3.60%, due 12/7/99
(LOC: National Westminster Bank) 3.60 700,000
7,800,000 Jacksonville Elec. Auth. Tax Exempt CP Notes, 3.50%, due 12/3/99 (RCA: Morgan Guaranty) 3.30 7,800,000
2,500,000 Orange Cty. IDA (Sutherland Printing Proj.) Ser. 1998A VRDN, 3.70%
(LOC: First Union National Bank) (Note C) 3.70 2,500,000
2,400,000 Pinellas Cty. IDR Bonds (Pozin Enterprises Inc. Proj.) VRDN, 3.75% (LOC: Nationsbank)
(Note C) 3.75 2,400,000
2,100,000 St. Johns Cty. IDA Rev. Bonds (Coastal Health Investors Ltd. Proj.) Ser. 1986 VRDN, 3.60%
(LOC: SunTrust Bank) (Note C) 3.60 2,100,000
- ------------------------------------------------------------------------------------------------------------------------------------
19
<PAGE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 460,000 St. Lucie West Services Dist. (Water Management Benefit) Ser. A, 3.50%, due 5/1/00
(Insured: MBIA) 3.65 $ 459,443
7,150,000 Sunrise Utility Sys. Rev. Bonds, Ser. PCR17 VRDN, 3.72% (LIQ: Citibank) (Note C) 3.72 7,150,000
--------------
25,409,695
--------------
GEORGIA--4.12%
10,540,000 Clayton Cty. GO Bonds (Jail Courthouse & Public Admin. Bldg. Proj.) 4.75%, due 8/1/00 3.78 10,614,124
4,380,000 DeKalb Cty. Hsg. Auth. SFM, Ser.1997A VRDN, 3.70% (LIQ: Bank of New York) (Note C) 3.70 4,380,000
1,500,000 Gwinnett Cty. IDR (Barco Inc. Proj.) VRDN, 3.40% (LOC: First Union National Bank) (Note C)3.40 1,500,000
1,600,000 Talbot Cty. Dev. Auth. IDR (Douglas Asphalt Co. Proj.) VRDN, 3.65%
(LOC: First Union National Bank) (Note C) 3.65 1,600,000
2,000,000 Valdosta Lowndes Cty. IDR (Reames Cos. Proj.) Ser 1998 VRDN, 3.70% (LOC: Nationsbank)
(Note C) 3.70 2,000,000
--------------
20,094,124
--------------
ILLINOIS--4.47%
1,400,000 Bedford Park IDR Bonds (Cintas Sales Corp. Proj.) VRDN, 3.60% (LOC: PNC Bank) (Note C) 3.60 1,400,000
2,900,000 Chicago (Muni. Sec. Trust Receipts) Ser. A2 VRDN, 3.65% (Insured: AMBAC; LIQ:
Credit Suisse) (Note C) 3.65 2,900,000
2,625,000 Chicago Sales Tax Rev. Bonds, VRDN, 3.45% (LIQ: Citibank) (Note C) 3.45 2,625,000
250,000 De Kalb Ogle Ctys. GO Bonds (Community College Dist. # 523) 6.25%, due 12/1/99
(Insured: AMBAC) 3.20 250,613
500,000 Glenview Bond Antic. Bonds, 5.55%, due 12/1/99 3.73 500,727
575,000 Illinois DFA (D.E. Akin Seed Proj.) VRDN, 3.75% (LOC: Bank One) (Note C) 3.75 575,000
1,000,000 Illinois DFA Rev. Bonds (Profile Plastics Proj.) VRDN, 3.59%
(LOC: LaSalle National Bank) (Note C) 3.59 1,000,000
4,350,000 Northern Illinois Univ. COP (Hoffman Estates Educ. Center Proj.) 7.00%, due 9/1/00,
prerefunded @102 (Note D) 3.80 4,546,720
4,000,000 Paris IDR Bonds (Simonton Building Products Inc. Proj.) VRDN, 3.70% (LOC: Wachovia Bank)
(Note C) 3.70 4,000,000
2,400,000 Richmond IDR (Maclean Fogg Co. Proj.) VRDN, 3.75% (LOC: Bank of America) (Note C) 3.75 2,400,000
900,000 Southwestern Illinois Dev. Auth. Solid Waste Disp. (Shell Oil Co.-Wood River Proj.)
Ser. 92 VRDN, 3.60% (Note C) 3.60 900,000
700,000 Will Cty. Facs. Rev. Bonds (Amoco Chem. Co. Proj.) Ser. 98 VRDN, 3.60% (Note C) 3.60 700,000
--------------
21,798,060
--------------
INDIANA--3.18%
2,170,000 Indiana Bond Bank Rev. Bonds, 3.10%, due 2/1/00 (Insured: AMBAC) 3.10 2,170,000
1,400,000 Indiana Employment Dev. Commission Rev. Bonds (Fischer Enterprises Proj.) VRDN, 3.70%
(LOC: PNC Bank) (Note C) 3.70 1,400,000
3,000,000 Indianapolis Gas Util. Sys. (Citizens Gas & Coke Util.) 3.50%, due 11/4/99
(LINE: NBD Bank) 3.50 3,000,000
8,000,000 Jeffersonville EDR Bonds (Apollo America Corp. Proj.) VRDN, 3.60%
(LOC: Chase Manhattan Bank) (Note C) 3.60 8,000,000
900,000 New Albany EDR Bonds (Gordon & Jeff Huncilman Proj.) VRDN, 3.70% (LOC: PNC Bank) (Note C) 3.70 900,000
--------------
15,470,000
--------------
IOWA--1.06%
3,900,000 Dubuque (Jeld-Wen, Inc. Proj.) Ser. 1988 VRDN, 3.97% (LOC: ABN-AMRO Bank) (Note C) 3.97 3,900,000
1,265,000 Iowa Fin. Auth. Single Family Rev. Bonds, GNMA Ser. A, 3.20%, put 11/1/99
(GNMA Collateralized) 3.20 1,265,000
--------------
5,165,000
--------------
KENTUCKY---1.40%
310,000 Erlanger GO Bonds, 3.75%, due 11/1/99 (Insured: AMBAC) 3.30 310,000
1,500,000 Kentucky Turnpike Auth. (Trust Rec.) Ser. 17 VRDN, 3.70% (LIQ: Commerzbank) (Note C) 3.70 1,500,000
2,000,000 Pendleton Cty. (Kentucky Assoc. of Counties Lease Trust Prog.) Ser. 1989,
3.55%, due 12/7/99 (LOC: Commonwealth Bank of Australia) 3.55 2,000,000
3,000,000 Pulaski Cty. Solid Waste Rev. Bonds (National Rural - Eastern KY Power)
Ser. B, 3.55%, put 2/15/00 3.55 3,000,000
--------------
6,810,000
--------------
LOUISIANA--2.30%
6,889,000 Calcasieu Parish Pub. Trust Auth. Rev. Bonds (WPT Corp. Proj.) Ser. 1997, VRDN, 3.65%
(LOC: Morgan Guaranty) (Note C) 3.65 6,889,000
1,600,000 Placquemines Parish Env. Rev. Bonds (BP Exploration & Oil Proj.) Ser. 1995 VRDN, 3.60%
(Note C) 3.60 1,600,000
1,600,000 St. Charles Parish (Shell Oil Co.) Ser. 1991 VRDN, 3.60% (Note C) 3.60 1,600,000
500,000 St. Charles Parish (Shell Oil Co.) Ser. 1993 VRDN, 3.60% (Note C) 3.60 500,000
595,000 St. Tammany Parish Sales Tax Rev. Bonds, 7.00%, due 4/1/00 (Insured: FGIC) 3.25 604,012
--------------
11,193,012
--------------
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20
<PAGE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
MARYLAND--1.93%
$ 7,500,000 Anne Arundel Cty. (Baltimore Gas & Elec. Proj.) Ser. 1988, 3.45%, due 11/3/99
(SBPA: Bank of New York, Chemical) 3.45 $ 7,500,000
1,890,000 Maryland Health & Higher Educ. (North Arundel Hosp. Proj.) VRDN, 3.55%
(LOC: Mellon Bank) (Note C) 3.55 1,890,000
--------------
9,390,000
--------------
MASSACHUSETTS--4.47%
706,000 Hamilton Wenham Regional SD GO Bonds, 6.50%, due 5/1/00 (Insured: FSA) 3.40 716,622
2,200,000 Massachusetts DFA Rev. Bonds (JPF Realty Proj.) Ser. A VRDN, 3.65%
(LOC: Bank of Boston) (Note C) 3.65 2,200,000
500,000 Massachusetts GO Bonds, 4.60%, due 11/1/99 4.00 500,229
500,000 Massachusetts GO Bonds, 5.00%, due 8/1/00 4.00 503,619
2,415,000 Massachusetts HEFA Rev. Bonds (Becker College) Ser. A1 VRDN, 3.45% (LOC: Bank of Boston)
(Note C) 3.45 2,415,000
4,815,000 Massachusetts HEFA Rev. Bonds (Endicott College) Ser. B VRDN, 3.45% (LOC: Bank of Boston)
(Note C) 3.45 4,815,000
700,000 Massachusetts IDA Rev. Bonds (October Co. Inc. Proj.) VRDN, 3.65% (LOC: Bank of Boston)
(Note C) 3.65 700,000
3,900,000 Massachusetts IFA Rev. Bonds (Showa Womens Institute Inc. Proj.) VRDN, 3.75%
(LOC: Bank of New York) (Note C) 3.75 3,900,000
500,000 Massachusetts Water Res. Auth. Rev. Bonds, Ser. A, 7.375%, due 4/1/00, prerefunded @ 102
(Note D) 3.20 518,307
5,500,000 Worchester GO BAN, 4.40%, due 8/30/00 3.85 5,524,214
--------------
21,792,991
--------------
MICHIGAN--0.04%
205,000 Wayne Charter Cty. Airport Rev. Bonds (Detroit Met. Wayne Cty.) 5.25%,
due 12/1/99 (Insured: MBIA) 3.35 205,312
--------------
MINNESOTA--0.92%
2,105,000 Cass Lake ISD #115 GO Notes, 3.90%, due 9/30/00 3.90 2,104,979
910,000 Duluth ISD #709, Ser. B, 4.20%, due 2/1/00 (Insured: AMBAC) 3.20 912,216
220,000 Elk River ISD GO Bonds, 5.00%, due 2/1/00 (Insured: AMBAC) 3.25 220,943
1,250,000 New York Mills ISD #553 GO Notes, 3.90%, due 9/30/00 3.90 1,249,950
--------------
4,488,088
--------------
MISSISSIPPI--0.87%
1,050,000 Jackson Cty. Sewer Fac. Rev. Bonds (Chevron USA Inc. Proj.) Ser. 1994 VRDN, 3.60% (Note C)3.60 1,050,000
760,000 Jackson Cty. Water & Sewer Rev. Bonds, 6.75%, due 9/1/00 (Insured: FGIC) 3.60 779,346
1,800,000 Mississippi Business Fin. Corp. IDR Bonds (Lehman-Roberts Co. Proj.) Ser. A VRDN, 3.75%
(LOC: Nationsbank) (Note C) 3.75 1,800,000
590,000 Tupelo Pub. SD GO Bonds, 6.90%, due 11/1/00 (Insured: MBIA) 4.00 606,514
--------------
4,235,860
--------------
MISSOURI--0.71%
650,000 Independence Water Util. Rev.Bonds, 3.25%, due 11/1/99 (Insured: AMBAC) 3.25 650,000
600,000 Phelps Cty. Hosp. Rev. Bonds (Phelps Cty. Regional Med. Center) 8.30%, due 3/1/00,
prerefunded @ 102 (Note D) 3.20 621,751
2,200,000 Warrensburg IDA Rev. Bonds (Swisher Mower Inc. Proj.) VRDN, 3.70% (LOC: Nationsbank)
(Note C) 3.70 2,200,000
--------------
3,471,751
--------------
NEBRASKA--0.43%
2,090,000 Gage Cty. IDR Rev. Bonds (Accuma Corp. Proj.) VRDN, 3.60%
(LOC: First Union National Bank) (Note C) 3.60 2,090,000
--------------
NEVADA--0.56%
1,100,000 Henderson Cty. Pub. Imp. Trust Rev. Bonds (Berry Plastics Corp.Proj.) Ser. 1991 VRDN,
3.59% (LOC: Nationsbank) (Note C) 3.59 1,100,000
1,625,000 Nevada Business & Industry IDR Bonds (Huck Store Fixture Co. Proj. ) Ser. A VRDN, 3.75%
(LOC: Bank of America ) (Note C) 3.75 1,625,000
--------------
2,725,000
--------------
NEW HAMPSHIRE--2.45%
1,250,000 Manchester Hsg. Auth. Rev. Bonds (Wall St. Tower Proj.) Ser. B VRDN, 3.70%
(LOC: PNC Bank) (Note C) 3.70 1,250,000
3,400,000 New Hampshire Business Fin. Auth. (Forty-One Northwestern LLC Proj.) Ser. 1998 VRDN,
3.71% (LOC: Bank of Boston) (Note C) 3.71 3,400,000
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21
<PAGE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,500,000 New Hampshire Business Fin. Auth. (Foundation for Seacoast Health) Ser. A VRDN, 3.55%
(LOC: Fleet Bank) (Note C) 3.55 $ 2,500,000
2,400,000 New Hampshire Business Fin. Auth. (Wiggins Airway Inc. Proj.) VRDN, 4.00%
(LOC: Bank of Boston) (Note C) 4.00 2,400,000
2,400,000 New Hampshire IDA Rev. Bonds (Oerlikon-Burhle USA) VRDN, 3.90%
(LOC: Union Bank of Switzerland) (Note C) 3.90 2,400,000
11,950,000
--------------
NEW MEXICO--0.76%
1,500,000 Albuquerque IDR (CVI Laser Corp. Proj.) Ser. 1998 VRDN, 3.75% (LOC: Nationsbank) (Note C) 3.75 1,500,000
1,540,000 Albuquerque IDR (Karsten Co. of New Mexico) Ser. 1997A VRDN, 3.70% (LOC: Bank One)
(Note C) 3.70 1,540,000
655,000 New Mexico MFA Rev. Bonds (Eagle Trust) VRDN, 3.82% (LIQ: Citibank) (Note C) 3.82 655,000
--------------
3,695,000
--------------
NEW YORK--0.98%
240,000 Albion CSD GO Bonds, 4.85%, due 6/15/00 (Insured: FGIC) 3.50 241,956
250,000 Hempstead Town GO Bonds, 5.00%, due 2/15/00 (Insured: AMBAC) 3.20 251,266
200,000 Nassau Cty. GO Bonds, 6.10%, due 11/15/99 (Insured: FGIC) 3.75 200,168
400,000 New York City PHA, 3.50%, due 1/1/00 (GTY: U.S. Government) 3.23 400,000
3,700,000 New York State Dorm. Auth. Rev. Bonds (Trust #27) VRDN, 3.75% (LOC: Bank of New York)
(Note C, E) 3.75 3,700,000
--------------
4,793,390
--------------
NORTH CAROLINA--1.13%
5,500,000 Person Cty. PCR Bonds (Carolina Power & Light Co. Proj.) VRDN, 3.80%
(LOC: Suntrust Bank) (Note C) 3.80 5,500,000
--------------
NORTH DAKOTA--0.38%
780,000 Fargo GO Bonds, 4.00%, due 5/1/00 3.85 780,495
1,065,000 North Dakota Municipal Bond Bank Rev. Bonds, 3.80%, due 6/1/00 3.60 1,066,124
--------------
1,846,619
--------------
OHIO--3.83%
310,000 Benjamin Logan Local SD GO Bonds, 3.90%, due 12/1/99 (Insured: AMBAC) 3.20 310,174
350,000 Columbus GO Bonds, Ser. 1, 4.50%, due 6/15/00 3.50 352,113
235,000 Ohio GO Bonds, 4.50%, due 5/15/00 3.60 236,100
10,545,000 Ohio Hsg. Rev. Bonds, Ser. CMC2 VRDN, 3.60% (LIQ: Chase Manhattan Bank) (Note C) 3.60 10,545,000
2,200,000 Ohio Solid Waste Rev. Bonds (BP Exploration & Oil Proj.) VRDN, 3.60% (Note C) 3.60 2,200,000
5,000,000 Ohio Water Dev. Auth. PCR Bonds (Ohio Edison Co. Proj.) Ser. A, 4.20%, put 5/1/00
(LOC: Union Bank of Switzerland) 4.12 5,002,615
--------------
18,646,002
--------------
OKLAHOMA--3.83%
100,000 Tulsa Cty. Health Care Rev. Bonds (Laureate Psychiatric Clinic) 4.60%, due 12/15/99 4.00 100,070
4,070,000 Tulsa Parking Auth. Rev. Bonds (Williams Center Proj.) Ser. A , 3.30%, put 11/15/99
(LOC: Nationsbank) 3.30 4,070,000
14,500,000 Water Resources Board, State Loan Prog. Rev. Bonds, Ser. 1999, 3.60%, put 3/1/00
(SBPA: Bayerische Landesbank) 3.60 14,500,000
--------------
18,670,070
--------------
PENNSYLVANIA--6.30%
2,700,000 Allegheny Cty. Hosp. Dev. Auth. Rev. Bonds (Central Blood Bank) VRDN, 3.60%
(LOC: PNC Bank) (Note C) 3.60 2,700,000
1,000,000 Allegheny Cty. Hosp. Dev. Auth. Rev. Bonds (UPMC Health Sys.) Ser. A, 3.90%, due 8/1/00
(Insured: MBIA) 3.75 1,001,070
1,400,000 Bethel Township IDA (Brentwood Industries Inc. Proj.) VRDN, 3.60% (LOC: Corestates Bank)
(Note C) 3.60 1,400,000
4,020,000 Cambria Cty. IDA Rev. Bonds (Cambria Cogen Co. Proj.) Ser. 1998A2 VRDN, 3.52%
(LOC: Bayerische Hypo-und Vereinsbank) (Note C) 3.52 4,020,000
1,000,000 Carbon Cty. IDA Res. Rec. Rev. (Panther Creek Proj.) Ser. 1992A, 3.45%, due 11/2/99
(LOC: National Westminster Bank) 3.45 1,000,000
860,000 Montgomery Cty. Higher Educ. & Health Rev. Bonds (Bryn Mawr Hosp. Proj.) 7.375%,
due 12/1/99, prerefunded @ 102 (Note D) 3.20 880,027
1,185,000 Montgomery Cty. Higher Educ. & Health Rev. Bonds (Northwestern Corp.)
Ser. A, 8.375%, due 6/1/00, prerefunded @ 102 (Note D) 3.20 1,240,116
2,500,000 Pennsylvania EDA Rev. Bonds (SJ Bailey & Sons, Inc. Proj.) VRDN, 3.70%, (LOC: PNC Bank)
(Note C) 3.70 2,500,000
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
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$ 1,885,000 Philadelphia Hosp. & Higher Educ. Facs. Auth. Rev. Bonds (Northwestern Corp.)
Ser. A, 8.375%, due 6/1/00, prerefunded @ 102 (Note D) 3.63 $ 1,972,681
1,900,000 Philadelphia IDR (Henry H. Ottens Mfg. Proj.) VRDN, 3.60%
(LOC: First Union National Bank) (Note C) 3.60 1,900,000
500,000 Pittsburgh SD GO Bonds, 4.50%, due 9/1/00 (Insured: FGIC) 4.00 501,996
6,800,000 Venango IDA (Scrubgrass Proj.) Ser. 1990A, 3.85%, due 2/11/00
(LOC: National Westminster Bank) 3.85 6,800,000
500,000 Washington Cty. Auth. Lease Rev. Bond, 6.90%, due 12/15/99 (Insured: AMBAC) 3.15 502,207
4,000,000 Westmoreland Cty. IDA Rev.Bonds (Advance USA Proj.) Ser. 1999A VRDN, 3.70%
(LOC: PNC Bank) (Note C) 3.70 4,000,000
250,000 York Sewer Auth. Rev. Bonds, 4.90%, due 12/1/99 (Insured: MBIA) 3.20 250,341
--------------
30,668,438
--------------
RHODE ISLAND--0.41%
2,000,000 Rhode Island Ind. Fac. Corp. IDR (NFA Corp. Proj.) VRDN, 3.75% (LOC: Bank of Boston)
(Note C) 3.75 2,000,000
--------------
SOUTH CAROLINA--6.29%
500,000 Berkeley Cty. IDB (Amoco Chemical Proj.) Ser. 1997 VRDN, 3.60% (Note C) 3.60 500,000
700,000 Berkeley Cty. IDB (Amoco Chemical Proj.) Ser. 1999 VRDN, 3.60% (Note C) 3.60 700,000
2,800,000 Florence Cty. Solid Waste Disp. Rev. Bonds (Roche Carolina, Inc.) Ser. 98 VRDN, 3.60%
(LOC: Deutsche Bank) (Note C) 3.60 2,800,000
4,000,000 Greenville City & Cty. IDR Bonds (Stevens Aviation Tech. Serv. Facs. Proj.)
Ser. 97 VRDN, 3.60% (LOC: First Union National Bank) (Note C) 3.60 4,000,000
300,000 Lexington SD #001 GO Bonds (SC SD Enhance Prog.) 6.30%, due 2/1/00 3.20 302,287
5,000,000 South Carolina Port Auth. (ABN-AMRO Munitops #7) VRDN, 3.52% (LIQ: ABN-AMRO Bank)
(Note C) 3.52 5,000,000
1,000,000 South Carolina Jobs EDA (Ellcon National Inc. Proj.) VRDN, 3.60%
(LOC: First Union National Bank) (Note C) 3.60 1,000,000
2,150,000 South Carolina Jobs EDA (JM Steel Corp. Proj.) Ser. 1999A VRDN, 3.70% (LOC: PNC Bank)
(Note C) 3.70 2,150,000
5,100,000 South Carolina Jobs EDA (JM Steel Corp. Proj.) Ser. 1999B VRDN, 3.70% (LOC: PNC Bank)
(Note C) 3.70 5,100,000
2,400,000 South Carolina Jobs EDA (Klockner Namasco Proj.) VRDN, 3.70% (LOC: Bayerische Landesbank)
(Note C) 3.70 2,400,000
6,700,000 South Carolina Jobs EDA (Zeuna Starker USA, Inc. Proj.) VRDN, 3.65%
(LOC: Bayerische Landesbank) (Note C) 3.65 6,700,000
--------------
30,652,287
--------------
SOUTH DAKOTA--1.36%
600,000 South Dakota HDA (Homeownership Mortgage Bds.) Ser. 1997E VRDN, 4.05%
(GIC: WestDeutsche Landesbank) (Note C) 4.05 600,000
1,005,000 South Dakota HDA (Homeownership Mortgage Bds.) Ser. 1997J, 4.25%, due 5/1/00 3.40 1,009,141
2,000,000 South Dakota HDA (Homeownership Mortgage Bds.) Ser. 1998H, 3.20%, due 12/2/99 3.20 2,000,000
3,000,000 South Dakota HDA (Homeownership Mortgage Bds.) Ser. 1998I, 3.20%, due 12/2/99 3.60 2,996,550
--------------
6,605,691
--------------
TENNESSEE--2.40%
3,100,000 Franklin Cty. IDB (Franklin Ind. Inc. Proj.) VRDN, 3.70% (LOC: Nationsbank) (Note C) 3.70 3,100,000
8,600,000 Metropolitan Government Davidson Cty. (ABN-AMRO Munitops) Ser. 1999-1, 3.35%, put 5/3/00
(LIQ: ABN-AMRO) 3.35 8,600,000
--------------
11,700,000
--------------
TEXAS--10.70%
545,000 Allen ISD GO Bonds, 3.50%, due 2/15/00 (Insured: AMBAC) 3.20 545,456
1,000,000 Austin Util. Sys. Rev. Bonds, 5.80%, due 11/15/99 (Insured: AMBAC) 3.80 1,000,731
650,000 Austin Util. Sys. Rev. Bonds, Ser. A, 10.00%, due 5/15/00, prerefunded @ 100 (Note D) 3.65 671,551
800,000 Austin Util. Sys. Rev. Bonds, Ser. A, 9.50%, due 5/15/00, prerefunded @ 100 (Note D) 3.35 825,690
3,000,000 Austin Util. Sys. Rev. Bonds, Ser. A, 3.55%, due 12/7/99 (LOC: Morgan Guaranty) 3.55 3,000,000
4,361,000 Austin Util. Sys. Rev. Bonds, Ser. A, 3.50%, due 11/4/99 (LOC: Morgan Guaranty) 3.50 4,361,000
285,000 Brazos Cty. COP, 7.25%, due 3/1/00 (Insured: FSA) 3.30 288,647
965,000 Brazos Higher Educ. Rev. Bonds, Ser. C-1, 5.30%, due 6/1/00 (GTY: Student Loans) 4.15 971,248
8,200,000 Brazos River Auth. (Texas Util. Elec. Co. Proj.) Ser. 1994A, 3.55%, due 11/2/99
(LOC: Canadian Imperial Bank of Commerce) 3.20 8,200,000
5,000,000 Brazos River Auth. (Texas Util. Elec. Co. Proj.) Ser. 1994A, 3.85%, due 2/10/00
(LOC: Canadian Imperial Bank of Commerce) 3.85 5,000,000
3,850,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Amoco Oil Proj.)
Ser. 1994 VRDN, 3.60% (Note C) 3.60 3,850,000
1,100,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Amoco Oil Proj.)
Ser. 1995 VRDN, 3.60% (Note C) 3.60 1,100,000
700,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Amoco Oil Proj.)
Ser. 1996 VRDN, 3.60% (Note C) 3.60 700,000
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1999
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
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$ 500,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Citgo Petroleum Corp. Proj.)
Ser. 1999 VRDN, 3.65%, (LOC: Banque Nationale de Paris) (Note C) 3.65 $ 500,000
1,869,000 Houston Airport Rev. Bonds, (ABN-AMRO Munitops) Trust Cert., Ser.1998-15, 3.35%,
put 2/16/00 (LIQ: ABN-AMRO Bank) 3.35 1,869,000
250,000 Houston Water & Sewer Sys. Rev. Bonds, Ser. C, 5.90%, due 12/1/99 (Insured: AMBAC) 3.20 250,541
500,000 Midlothian IDC Rev. Bonds (Texas Industries Inc. Proj.) Ser. 1999 VRDN, 3.60%
(LOC: Bank of America) (Note C) 3.60 500,000
500,000 Northeast ISD GO Bonds, 7.00%, due 2/1/00 (GTY: Texas Permanent School Fund) 3.20 504,660
2,000,000 North Texas Higher Educ. Auth. Rev. Bonds, Ser. E, 7.00%, due 4/1/00 (Insured: AMBAC) 3.75 2,026,215
2,000,000 San Antonio IDA (LGC Building LLC & KLN Steel Prod. Co. Ltd. Proj.)
Ser. 1998 VRDN, 3.75% (LOC: Nationsbank) (Note C) 3.75 2,000,000
2,000,000 San Marcos IDC Rev. Bonds (TB Woods Inc. Proj.) VRDN, 3.70% (LOC: PNC Bank) (Note C) 3.70 2,000,000
1,000,000 Texas Dept. of Hsg. & Comm. Affairs, Ser. B, 3.35%, due 12/8/99
(Insured: FGIC; LIQ: FGIC) 3.35 1,000,000
4,900,000 Texas Veterans Hsg., Ser. 1994A-1 VRDN, 3.70% (Note C) 3.70 4,900,000
6,000,000 Texas TRAN, 4.50%, due 8/31/00 3.68 6,039,004
--------------
52,103,743
--------------
UTAH--0.21%
1,000,000 Trementon City IDR (La-Z-Boy Chair Co. Proj.) Ser. 1990 VRDN, 3.92% (LOC: NBD Bank)
(Note C) 3.92 1,000,000
VARIOUS STATES--3.38%
3,340,000 Greystone Tax Exempt Cert., Ser. 1998-2 VRDN, 3.64% (LOC: Credit Suisse) (Note C, E) 3.64 3,340,000
13,135,660 Pitney Bowes Credit Corp. Leasetops Muni Trust, Ser. 1998-2 VRDN, 3.88%,
(LIQ: Pitney Bowes Credit Corp.) (Note C, E) 3.88 13,135,660
--------------
16,475,660
--------------
VIRGINIA--2.59%
8,000,000 Chesapeake GO Bonds (Eagle Trust) Ser. 98-4601 VRDN, 3.54% (LIQ: Citibank) (Note C, E) 3.54 8,000,000
2,900,000 King George Cty. IDA Rev. Bonds (Garnet of VA Inc. Proj.) VRDN, 3.70%
(LOC: Morgan Guaranty) (Note C) 3.70 2,900,000
1,700,000 Isle of Wight IDA Rev. Bonds (Smithfield Ham & Produce Co.) VRDN, 3.70%
(LOC: Nationsbank) (Note C) 3.70 1,700,000
--------------
12,600,000
--------------
WASHINGTON--2.80%
1,300,000 Olympia EDC Rev. Bonds (Spring Air Northwest Proj.) VRDN, 3.75% (LOC: US Bank) (Note C) 3.75 1,300,000
2,400,000 Washington EDA Rev. Bonds (Ace Tank Proj.) VRDN, 3.85% (LOC: US Bank) (Note C) 3.85 2,400,000
250,000 Washington GO Bonds, 4.75%, due 5/1/00 4.00 250,887
7,420,000 Washington HFC (Boardwalk Apts. Proj.) VRDN, 3.75% (LOC: US Bank) (Note C) 3.75 7,420,000
2,250,000 Washington HFC (Oxford Square Apts. Proj.) Ser. A VRDN, 3.75% (LOC: US Bank) (Note C) 3.75 2,250,000
--------------
13,620,887
--------------
WEST VIRGINIA--2.40%
1,335,000 Raleigh Cty. Board of Educ. Public School GO Bonds, 4.00%, due 5/1/00 3.35 1,339,201
4,000,000 West Virginia GO Bonds, Ser. 1998C VRDN, 3.71% (LIQ: Bank of Boston) (Note C) 3.71 4,000,000
4,000,000 West Virginia Public Energy Auth. (Morgantown Energy Assoc. Proj.)
Ser. 1989A, 3.55%, due 11/5/99 (LOC: Union Bank of Switzerland) 3.55 4,000,000
2,400,000 West Virginia Public Energy Auth. (Morgantown Energy Assoc. Proj.)
Ser. 1989A, 3.85%, due 2/8/00 (LOC: Union Bank of Switzerland) 3.85 2,400,000
--------------
11,739,201
--------------
WISCONSIN--1.15%
560,000 Janesville GO Promissory Notes, 4.50%, due 6/1/00 (Insured: FSA) 3.85 562,042
265,000 Monona GO Bonds, 4.30%, due 8/1/00 (Insured: FSA) 3.90 265,766
4,775,000 Oshkosh Water Rev. BAN, Ser. C, 4.875%, due 1/1/00 4.53 4,775,000
--------------
5,602,808
--------------
TOTAL MUNICIPAL OBLIGATIONS--99.60% 485,220,975
OTHER ASSETS AND LIABILITIES, NET--0.40% 1,915,719
--------------
NET ASSETS--100.00% $ 487,136,694
==============
Please see accompanying notes to the schedules of investments and financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO SCHEDULES OF INVESTMENTS
October 31, 1999
(A) Variable rate securities. The rates shown are the current rates on October
31, 1999. 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. At October 31, 1999, the
aggregate value of these securities, valued at amortized cost, is
$325,000,000, representing 7.0% 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 exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers. At October 31, 1999, these securities
amounted to $1,374,164,561 or 29.57% of net assets of the Money Market
Portfolio, and $28,175,660 or 5.78% of net assets of the Municipal
Portfolio.
DESCRIPTION OF ABBREVIATIONS
AIG American International Group
AMBAC American Municipal Bond Assurance Corporation
BAN Bond Anticipation Note
COP Certificates of Participation
CP Commercial Paper
CSD Central School District
DFA Developmental Finance Authority
EDA Economic Development Authority
EDC Economic Development Corporation
EDR Economic Development Revenue
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Inc.
GIC Guaranteed Investment Contract
GNMA Government National Mortgage Association
GO General Obligation
GTY Guarantee
HDA Housing Development Authority
HEFA Health & Education Facilities Authority
HFA Housing Finance Authority
HFC Housing Finance Commission
IDA Industrial Development Authority
IDB Industrial Development Board
IDC Industrial Development Corporation
IDR Industrial Development Revenue Bond
IFA Industrial Finance Authority
ISD Independent School District
LINE Line of Credit
LIQ Liquidity Agreement
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance Insurance Corporation
MFA Mortgage Finance Authority
MFH Multi-Family Housing
PCR Pollution Control Revenue Bond
PHA Public Housing Authority
RCA Revolving Credit Agreement
SBPA Standby Bond Purchase Agreement
SD School District
SFM Single Family Mortgage
SLMA Student Loan Marketing Association
TRAN Tax Revenue Anticipation Note
VRDN Variable Rate Demand Note
VRN Variable Rate Notes
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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Report of Independent Auditors
Shareholders and Board of Directors
TD Waterhouse Family of Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of TD Waterhouse Family of Funds, Inc.
(comprising, respectively, the Money Market Portfolio, the U.S. Government
Portfolio, and the Municipal Portfolio) as of October 31, 1999, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1999, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting TD Waterhouse Family of Funds, Inc. at
October 31, 1999, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
/s/Ernst & Young LLP
New York, New York
December 2, 1999
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