2000
SHAREHOLDER REPORTS
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TD WATERHOUSE FAMILY
OF FUNDS,INC.
TD WATERHOUSE DOW 30 FUND
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| SEMIANNUAL REPORT |
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| April 30, 2000 |
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| TD WATERHOUSE FAMILY |
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| Money Market |
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| U.S. Government |
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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.
*Affiliated person of the Distributor
TD WATERHOUSE ASSET MANAGEMENT, INC.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
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 Compliance, Operations
& Administration
SERVICE PROVIDERS
INVESTMENT MANAGER TRANSFER AGENT INDEPENDENT AUDITORS
TD Waterhouse Asset Management, Inc. National Investor 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. INDEPENDENT DIRECTORS COUNSEL
60 State Street Willkie Farr & Gallagher
Boston, MA 02109 153 East 53rd Street
New York, NY 10022
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TD WATERHOUSE FAMILY OF FUNDS, INC.
DEAR SHAREHOLDER:
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I am pleased to provide you with the TD Waterhouse Family of Funds, Inc. (the
"Fund") semiannual report for the period ended April 30, 2000.
During the period, 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, 2000, assets in the three Portfolios
increased to a total of $6.7 billion.
PORTFOLIO RESULTS*
For the six months ended April 30, 2000, the three money market Portfolios had
the following yields and returns.**
o The Money Market Portfolio had a seven-day yield of 5.55% at April 30,
2000, an annualized yield of 5.40% and an annualized return of 5.29%.
o The U. S. Government Portfolio had a seven-day yield of 5.05% at April 30,
2000, an annualized current yield of 5.06% and an annualized return of
5.10%.
o The Municipal Portfolio had a seven-day yield of 3.81% at April 30, 2000, a
tax equivalent seven-day yield of 5.95% at April 30, 2000, an annualized
current yield of 3.11%, an annualized taxable equivalent yield of 4.86%, an
annualized return of 3.13%, and a taxable equivalent return of 4.89%(1).
COMMENTARY
First quarter 2000 Real Gross Domestic Product (GDP) growth was more than 5%.
With unemployment at a 30 year low, the underlying trend in core inflation
appears to be rising. The Federal Reserve Open Market Committee ("FOMC") raised
the Federal Funds and Discount Rate targets by 1/2 of 1 percent on May 16, 2000.
This was in addition to two previous increases of 1/4 of 1 percent since our
last report. In its comments at the time of the latest increase, the FOMC also
indicated that "...risks are weighted mainly toward conditions that may generate
heightened inflation pressures in the foreseeable future," which might indicate
a willingness to increase the Fed Funds rate again if the economy continues to
show strong growth. The pace and size of future increases are of great
significance to us in assessing market conditions.
Having shortened the average maturity of the Portfolios over the past two
quarters in anticipation of the FOMC increases, we have recently taken advantage
of higher rates to establish a slightly longer average maturity. We still
maintain a significant portion of the Portfolios in very short-term securities
to retain our flexibility in the face of increasing uncertainty in the fixed
income markets.
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.
June 8, 2000
[FN]
* 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 six
months ended April 30, 2000, 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 seven-day
yields at April 30, 2000, annualized current yields and annualized returns
respectively, would have been 5.38%, 5.23% and 5.12% for the Money Market
Portfolio, 4.86%, 4.87% and 4.91% for the U.S Government Portfolio and
3.59%, 2.89% and 2.91% for the Municipal Portfolio. The taxable seven-day
yield at April 30, 2000, annualized taxable equivalent yield and return for
the Municipal Portfolio would have been 5.61%, 4.55% and 4.52%,
respectively. The seven-day yield more closely reflects the current
earnings of a Portfolio than the annualized current yield and annualized
total return. Yield will fluctuate.
(1) Taxable equivalent return and yield at 36% marginal federal income tax
rate.
</FN>
Distributor: Funds Distributor, Inc.
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TABLE OF CONTENTS
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Statements of Assets and Liabilities...........................7
Statements of Operations.......................................8
Statements of Changes in Net Assets............................9
Financial Highlights..........................................10
Notes to Financial Statements.................................13
Money Market Portfolio
Schedule of Investments....................................16
U.S. Government Portfolio
Schedule of Investments....................................20
Municipal Portfolio
Schedule of Investments....................................22
Notes to Schedules of Investments.............................28
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TD WATERHOUSE FAMILY OF FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 2000
(Unaudited)
Money U.S.
Market Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (including
repurchase agreements of $108,650,000,
$182,302,000, and $0, respectively) (Note 2) $ 5,379,761,601 $ 970,848,179 $ 466,754,771
Cash 200,421 274 189,075
Interest receivable 38,234,817 4,997,721 3,220,230
Other assets 49,610 8,072 5,146
------------------ ------------------ -----------------
TOTAL ASSETS 5,418,246,449 975,854,246 470,169,222
LIABILITIES
Dividends payable to shareholders 2,363,459 416,894 153,800
Payable for securities purchased 121,608,552 28,002,134 --
Payable to Investment Manager and
affiliates (Note 3) 3,290,550 562,216 284,372
Accrued expenses and other liabilities 47,657 67,540 30,237
------------------ ------------------ -----------------
TOTAL LIABILITIES 127,310,218 29,048,784 468,409
------------------ ------------------ -----------------
NET ASSETS $ 5,290,936,231 $ 946,805,462 $ 469,700,813
================== ================== =================
Net assets consist of:
Paid-in capital $ 5,291,163,416 $ 946,809,132 $ 469,719,021
Accumulated net realized losses from
security transactions (227,185) (3,670) (18,208)
------------------ ------------------ -----------------
Net assets, at value $ 5,290,936,231 $ 946,805,462 $ 469,700,813
================== ================== =================
Shares outstanding ($.0001 par value common
stock, 50 billion, 20 billion, and 10 billion
shares authorized, respectively) 5,291,163,416 946,809,132 469,719,021
================== ================== =================
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 Six Months Ended April 30, 2000
(Unaudited)
Money U.S.
Market Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 157,826,709 $ 26,528,422 $ 9,651,365
------------------ ------------------ -----------------
EXPENSES
Investment management fees (Note 3) 8,617,393 1,598,841 877,875
Shareholder servicing fees (Note 3) 6,415,209 1,142,029 627,054
Transfer agent fees (Note 3) 5,132,167 913,624 501,643
Administration fees (Note 3) 2,566,083 456,812 250,821
Shareholder reports and mailing 291,921 78,707 40,903
Registration fees 277,434 69,877 53,850
Custody fees (Note 2) 142,731 27,101 20,000
Professional fees 12,145 8,706 4,693
Directors' fees 4,889 4,889 4,889
Other expenses 60,786 13,631 14,216
------------------ ------------------ -----------------
TOTAL EXPENSES 23,520,758 4,314,217 2,395,944
Fees waived / expenses reimbursed by the
Investment Manager and its affiliates (Note 3) (4,273,094) (885,174) (539,262)
------------------ ------------------ -----------------
NET EXPENSES 19,247,664 3,429,043 1,856,682
------------------ ------------------ -----------------
NET INVESTMENT INCOME 138,579,045 23,099,379 7,794,683
------------------ ------------------ -----------------
NET REALIZED LOSSES FROM
SECURITY TRANSACTIONS (169,581) (2,512) (13,715)
------------------ ------------------ -----------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 138,409,464 $ 23,096,867 $ 7,780,968
================== ================== =================
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
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
April 30, Ended April 30, Ended April 30, Ended
2000 October 31, 2000 October 31, 2000 October 31,
(Unaudited) 1999 (Unaudited) 1999 (Unaudited) 1999
------------ ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 138,579,045 $ 179,330,810 $ 23,099,379 $ 29,879,648 $ 7,794,683 $ 11,246,206
Net realized gains (losses)
from security transactions (169,581) (54,821) (2,512) 2,543 (13,715) (3,652)
--------------- --------------- --------------- --------------- ------------- --------------
Net increase in net assets
from operations 138,409,464 179,275,989 23,096,867 29,882,191 7,780,968 11,242,554
--------------- --------------- --------------- --------------- ------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income (138,579,045) (179,330,810) (23,099,379) (29,879,648) (7,794,683) (11,246,206)
--------------- --------------- --------------- --------------- ------------- --------------
CAPITAL SHARE
TRANSACTIONS
($1.00 per share):
Proceeds from shares sold 18,649,158,601 21,183,221,750 2,707,787,670 2,840,728,249 1,246,416,071 1,668,809,031
Shares issued in reinvestment
of dividends 138,057,264 178,243,250 23,029,795 29,660,883 7,755,353 11,184,591
Payments for shares redeemed (18,142,378,644) (19,672,867,482) (2,664,729,744) (2,527,075,190)(1,271,593,590)(1,573,943,722)
--------------- --------------- --------------- --------------- ------------- --------------
Net increase (decrease) in net assets
from capital share transactions 644,837,221 1,688,597,518 66,087,721 343,313,942 (17,422,166) 106,049,900
--------------- --------------- --------------- --------------- ------------- --------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 644,667,640 1,688,542,697 66,085,209 343,316,485 (17,435,881) 106,046,248
NET ASSETS:
Beginning of period 4,646,268,591 2,957,725,894 880,720,253 537,403,768 487,136,694 381,090,446
--------------- --------------- --------------- --------------- ------------- --------------
End of period $5,290,936,231 $ 4,646,268,591 $ 946,805,462 $ 880,720,253 $ 469,700,813 $ 487,136,694
=============== =============== =============== =============== ============= ==============
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
Six Months
Ended Year Year Year Period
April 30, Ended Ended Ended Ended
2000 October 31, October 31, October 31, October 31,
(Unaudited) 1999 1998 1997 1996*
------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------- -------------- -------------- -------------- -------------
Net investment income 0.026 0.044 0.049 0.048 0.041
-------------- -------------- -------------- -------------- -------------
Distributions from net
investment income (0.026) (0.044) (0.049) (0.048) (0.041)
-------------- -------------- -------------- -------------- -------------
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============== ============== ============== ============== =============
RATIOS
Ratio of expenses to average net assets 0.75%(A) 0.71% 0.75% 0.83% 0.79%(A)
Ratio of net investment income
to average net assets 5.40%(A) 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) 0.17%(A) 0.21% 0.15% 0.08% 0.13%(A)
SUPPLEMENTAL DATA
Total investment return (B) 5.29%(A) 4.54% 5.04% 4.89% 4.82%(A)
Net assets, end of period $5,290,936,231 $4,646,268,591 $2,957,725,894 $1,787,786,777 $1,342,610,086
============== ============== ============== =============== ==============
Average net assets $5,156,694,634 $4,035,239,586 $2,302,804,288 $1,592,722,254 $1,104,588,438
============== ============== ============== =============== ==============
<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.
U.S. GOVERNMENT
PORTFOLIO
Six Months
Ended Year Year Year Period
April 30, Ended Ended Ended Ended
2000 October 31, October 31, October 31, October 31,
(Unaudited) 1999 1998 1997 1996*
------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------- -------------- -------------- -------------- -------------
Net investment income 0.025 0.044 0.048 0.047 0.041
-------------- -------------- -------------- -------------- -------------
Distributions from net
investment income (0.025) (0.044) (0.048) (0.047) (0.041)
-------------- -------------- -------------- -------------- -------------
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============== ============== ============== ============== =============
RATIOS
Ratio of expenses to average net assets 0.75%(A) 0.75% 0.78% 0.81% 0.73%(A)
Ratio of net investment income
to average net assets 5.06%(A) 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%(A) 0.19% 0.11% 0.07% 0.18%(A)
SUPPLEMENTAL DATA
Total investment return (B) 5.10%(A) 4.47% 4.91% 4.79% 4.82%(A)
Net assets, end of period $ 946,805,462 $ 880,720,253 $ 537,403,768 $ 402,685,311 $ 371,046,770
============== ============== ============== ============== ==============
Average net assets $ 917,962,530 $ 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
Six Months
Ended Year Year Year Period
April 30, Ended Ended Ended Ended
2000 October 31, October 31, October 31, October 31,
(Unaudited) 1999 1998 1997 1996*
------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------- -------------- -------------- -------------- -------------
Net investment income 0.015 0.026 0.029 0.030 0.026
-------------- -------------- -------------- -------------- -------------
Distributions from net
investment income (0.015) (0.026) (0.029) (0.030) (0.026)
-------------- -------------- -------------- -------------- -------------
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============== ============== ============== ============== =============
RATIOS
Ratio of expenses to average net assets 0.74%(A) 0.74% 0.72% 0.74% 0.62%(A)
Ratio of net investment income
to average net assets 3.11%(A) 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) 0.22%(A) 0.21% 0.13% 0.10% 0.23%(A)
SUPPLEMENTAL DATA
Total investment return (B) 3.13%(A) 2.59% 2.98% 3.01% 3.05%(A)
Net assets, end of period $ 469,700,813 $ 487,136,694 $ 381,090,446 $ 265,623,696 $ 226,253,394
============== ============== ============== ============== ==============
Average net assets $ 503,987,640 $ 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
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
NOTE 1 -- ORGANIZATION
TD Waterhouse Family of Funds, Inc. (the "Fund") was organized as a Maryland
corporation on August 16, 1995. 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. The Fund currently
has three 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. 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
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
(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.
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"), an indirect 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 six months ended April 30, 2000, the
Investment Manager voluntarily waived $1,648,048, $344,235 and $209,713 of its
investment management fee for the Money Market Portfolio, the U.S. Government
Portfolio and the Municipal Portfolio, respectively.
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. For
the six months ended April 30, 2000, TD Waterhouse voluntarily waived $490,752,
$98,353 and $59,918 of its administrative fee for the Money Market Portfolio,
the U.S. Government Portfolio and the Municipal Portfolio, respectively.
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 six months ended April 30, 2000, TD Waterhouse voluntarily
waived $1,152,791, $245,882 and $149,795 of its shareholder servicing fees for
the Money Market Portfolio, the U.S. Government Portfolio and the Municipal
Portfolio, respectively.
The Fund has entered into a Transfer Agency and Dividend Disbursing Agency
Agreement with National Investor 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 six months ended April 30, 2000, the Transfer Agent voluntarily waived
$981,503, $196,706 and $119,836 of its transfer agency and dividend disbursing
agency fees for the Money Market Portfolio, the U.S. Government Portfolio and
the Municipal Portfolio, respectively.
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14
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
(CONTINUED)
Each Director who is not an "interested person" ("independent Director") as
defined in the Act, who serves on the Board of Directors 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 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.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS
ASSET-BACKED OBLIGATIONS--21.1%
<S> <C> <C> <C>
$137,000,000 Aquinas Funding LLC, due 5/1/00 (Other Support: MBIA & Rabobank Nederland) (Note E) 6.07 $ 137,000,000
32,000,000 Asset-Backed Securities Investment Trust Ser. 1997-F, 6.08%, due 5/15/00 (GTY: MBIA)
(Notes A,E) 6.21 32,000,000
61,000,000 Bavaria TRR Corp., due 7/26/00 (Counterparty: Bayerische Hypo -und Vereinsbank, S.A.)
(Note E) 6.17 60,128,581
2,081,684 Bay View 1999-LG-1 Auto Trust Cl. A-1, 6.13%, due 1/15/01 (Insured: MBIA) 6.34 2,081,439
16,022,155 CARMAX Auto Owner Trust, Ser. 1999-1, Cl. A-1, 6.20%, due 11/15/00 (Insured: MBIA) 6.20 16,022,155
100,000,000 Corporate Receivables Corp., due 5/4/00 (Note E) 6.04 99,949,833
50,000,000 Corporate Receivables Corp., 6.16%, due 5/12/00 (Notes A,E) 6.16 50,000,000
40,000,000 Corporate Receivables Corp., due 5/17/00 (Note E) 6.06 39,892,800
50,000,000 Dakota Certificate Program, due 5/22/00 (Note E) 6.09 49,823,542
50,000,000 Dakota Certificate Program, due 6/9/00 (Note E) 6.16 49,670,125
59,373,000 Forrestal Funding Master Trust, Ser. 1999A, due 5/10/00
(Counterparty: Bank of America NT & SA) (Note E) 6.01 59,285,425
33,200,000 Forrestal Funding Master Trust, Ser. 1999A, due 5/24/00
(Counterparty: Bank of America NT & SA) (Note E) 6.03 33,074,642
22,000,000 Forrestal Funding Master Trust, Ser. 1999A, due 6/7/00
(Counterparty: Bank of America NT & SA) (Note E) 6.09 21,864,333
50,933,000 Forrestal Funding Master Trust, Ser. 2000A, due 5/17/00
(Counterparty: Bank of America NT & SA) (Note E) 6.02 50,799,216
2,267,198 IKON Receivables, LLC, Ser. 99-1, Cl. A-1, 5.11%, due 6/15/00 (Insured: AMBAC) 5.11 2,267,198
26,987,635 IKON Receivables, LLC, Ser 99-2, Cl. A-1, 6.14%, due 10/15/00 (Insured: AMBAC) 6.14 26,987,635
40,394,000 Intrepid Funding Master Trust, Ser. 1999A, due 6/21/00
(Counterparty: Bank of America NT & SA) (Note E) 6.19 40,043,212
20,000,000 Intrepid Funding Master Trust, Ser. 1999A, due 7/6/00
(Counterparty: Bank of America NT & SA) (Note E) 6.25 19,774,500
18,000,000 Liberty Lighthouse U.S. Capital Co. LLC, 6.18%, due 5/11/00 (Notes A,E) 6.29 17,994,510
25,000,000 Liberty Lighthouse U.S. Capital Co. LLC, 6.01%, due 5/15/00 (Notes A,E) 6.05 24,987,514
15,000,000 Liberty Lighthouse U.S. Capital Co. LLC, 6.15%, due 5/18/00 (Notes A,E) 6.16 14,999,603
50,000,000 Liberty Lighthouse U.S. Capital Co. LLC, 6.27%, due 5/30/00 (Notes A,E) 6.30 49,989,083
38,636,000 Long Lane Master Trust IV, Ser. 99-A, due 5/15/00
(Counterparty: BankBoston, N.A.) (Note E) 6.01 38,548,404
50,000,000 RACERS Ser. 1999-16-MM-MBS Notes, 6.15%, due 5/2/00 (GTY: National Westminster Bank PLC)
(Notes A,E) 6.15 50,000,000
100,000,000 RACERS Ser. 1999-26-MM-CCABS Notes, 6.27%, due 5/15/00 (Counterparty: AIG) (Notes A,E) 6.27 100,000,000
5,924,990 USCSC, Ser. 1999-D, Cl. A-1, 6.13%, due 12/1/00 (Insured: MBIA) 6.13 5,924,990
22,000,000 WFS Financial 2000A Owner Trust Notes Class A-1, 6.28%, due 3/20/01 (Insured: FSA) 6.28 22,000,000
--------------
1,115,108,742
--------------
BROKER/DEALER OBLIGATIONS--10.0%
20,000,000 Bear Stearns Cos., Inc., 6.23%, due 5/12/00 (Note A) 6.15 20,001,728
5,000,000 Bear Stearns Cos., Inc., 6.21%, due 5/23/00 (Note A) 6.25 4,998,972
65,000,000 Bear Stearns Cos., Inc., 6.18%, due 5/28/00 (Note A) 6.18 65,000,000
100,000,000 Bear Stearns Cos., Inc., 6.16%, due 6/16/00 (Note A) 6.16 100,000,000
100,000,000 Goldman Sachs Group, Inc., 6.25%, due 5/7/00 (Notes A,E) 6.15 100,073,800
15,000,000 Goldman Sachs Group, L.P., 6.28%, due 5/23/00 (Notes A,E) 6.11 15,015,740
120,000,000 Goldman Sachs Group, L.P., 6.36%, due 7/17/00 (Notes A,E) 6.28 120,000,000
10,500,000 Morgan Stanley, Dean Witter, Discover & Co., 6.70%, due 5/15/00 (Note A) 6.10 10,534,792
20,300,000 Morgan Stanley, Dean Witter, Discover & Co., 6.09%, due 3/9/01 6.79 20,193,398
75,000,000 Salomon Smith Barney Holdings, Inc., due 5/26/00 6.08 74,684,896
--------------
530,503,325
--------------
FINANCE & INSURANCE OBLIGATIONS--4.3%
5,000,000 American General Finance Corp., 5.88%, due 7/1/00 6.07 4,997,290
75,000,000 General Motors Acceptance Corp. IV, 6.18%, due 5/1/00 (Note A) 6.34 74,959,779
22,240,000 General Motors Acceptance Corp., 5.80%, due 8/7/00 6.22 22,212,027
20,000,000 GMAC Australia Finance, 6.19%, due 5/19/00 (Note A) 6.08 20,001,034
75,000,000 Sigma Finance Inc., 6.13%, due 6/15/00 (Notes A,E) 6.13 75,000,000
30,000,000 Sigma Finance Inc., 6.85%, due 2/26/01 (Note E) 6.85 30,000,000
--------------
227,170,130
--------------
FUNDING AGREEMENTS--1.2%
60,000,000 Metropolitan Life Insurance Co., 6.36%, due 6/1/00 (Notes A,B) 6.36 60,000,000
--------------
60,000,000
--------------
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL & OTHER OBLIGATIONS--4.6%
<S> <C> <C> <C>
$ 28,434,050 Amtrak Trust 93-B Ser. A VRDN, 6.19%, due 5/1/00 (GTY: General Electric Co.) (Note C) 6.19 $ 28,434,050
22,305,721 Amtrak Trust 93-B Ser. B VRDN, 6.19%, due 5/1/00 (GTY: General Electric Co.) (Note C) 6.19 22,305,721
10,000,000 AT&T Capital Corp., 6.59%, due 8/4/00 (GTY: CIT Group Holdings, Inc.) 6.10 10,010,255
14,040,000 AT&T Capital Corp., 7.50%, due 11/15/00 (GTY: CIT Group Holdings, Inc.) 6.39 14,115,972
50,000,000 AT&T Corp., 6.24%, due 7/13/00 (Note A) 6.28 49,996,011
20,000,000 Ford Capital BV, 10.13%, due 11/15/00 (GTY: Ford Motor Co.) 6.47 20,374,889
10,000,000 Frontenac Properties, Inc., 6.21%, due 5/8/00 (GTY: Sisters of Mercy
Health System, Inc.) (Note A) 6.21 10,000,000
50,000,000 International Lease Finance Corp., 6.11%, due 5/1/00 (Note A) 6.03 50,037,110
18,000,000 National Rural Utilities Coop. Fin. Corp., 6.29%, due 7/14/00 (Note A) 6.28 18,000,576
20,000,000 Southern California Edison Co., 6.25%, due 5/26/00 (Note A) 6.25 20,000,000
--------------
243,274,584
--------------
LOAN PARTICIPATIONS--4.3%
65,000,000 Four Times Square Partners, L.P., 6.15%, due 6/2/00 (GTY: Prudential Ins.
Co. of America; Other support: Chase Manhattan Bank) (Note B) 6.15 65,000,000
49,000,000 Luddite Associates, 6.17%, due 6/6/00 (GTY: Prudential Ins. Co. of America;
Other support: Chase Manhattan Bank) (Note B) 6.17 49,000,000
22,000,000 Prudential Ins. Co. of America, 6.17%, due 6/6/00 (Other support: Chase Manhattan Bank)
(Note B) 6.17 22,000,000
92,000,000 Prudential Ins. Co. of America, 6.18%, due 6/9/00 (Other support: Chase Manhattan Bank)
(Note B) 6.18 92,000,000
--------------
228,000,000
--------------
TOTAL CORPORATE OBLIGATIONS--45.5% 2,404,056,782
--------------
BANK OBLIGATIONS
BANK COMMERCIAL PAPER--3.2%
50,000,000 Irish Life & Permanent PLC, due 5/10/00 (Note E) 6.04 49,925,625
50,000,000 Irish Life & Permanent PLC, due 7/24/00 (Note E) 6.14 49,304,667
75,000,000 Irish Life & Permanent PLC, due 10/27/00 (Note E) 6.43 72,699,104
--------------
171,929,396
--------------
BANK NOTES--14.0%
106,000,000 Bank of Scotland Treasury Services, 6.28%, due 7/19/00 (GTY: Bank of Scotland) (Note A) 6.27 106,004,626
117,800,000 Bank of Scotland Treasury Services, 6.28%, due 7/19/00 (GTY: Bank of Scotland) (Note A) 6.28 117,791,086
55,000,000 Bank One Corp., 6.12%, due 5/9/00 (Note A) 6.14 54,994,575
75,000,000 Bank One N.A., 5.50%, due 6/5/00 6.12 74,936,260
100,000,000 Branch Banking & Trust Co., N.C., 6.30%, due 5/1/00 (Note A) 6.34 99,986,347
50,000,000 Branch Banking & Trust Co., N.C., 6.32%, due 5/1/00 (Note A) 6.36 49,998,091
20,000,000 Branch Banking & Trust Co., N.C., 6.35%, due 5/1/00 (Note A) 6.42 19,994,313
50,000,000 Citicorp, 6.16%, due 5/2/00 (Note A) 6.16 50,000,000
50,000,000 European American Bank, 5.28%, due 5/15/00 5.32 49,999,262
50,000,000 First Union National Bank, 6.15%, due 5/29/00 (Note A) 6.15 50,000,000
50,000,000 First USA Bank, 6.16%, due 6/2/00 (Note A) 6.08 50,036,110
15,000,000 Huntington National Bank, 6.36%, due 7/21/00 (Note A) 6.35 14,999,646
--------------
738,740,316
--------------
DOMESTIC BANK CERTIFICATES OF DEPOSIT--0.9%
50,000,000 Regions Bank, 6.10%, due 7/5/00 6.10 50,000,000
--------------
50,000,000
--------------
DOMESTIC BANK SUPPORTED OBLIGATIONS--2.8%
245,000 Adult Communities Total Services, Inc., Ser. 1996 VRDN, 6.22%, due 5/8/00
(LOC: LaSalle National Bank) (Note C) 6.16 245,000
6,000,000 Belmay, Inc. Multi Mode Rev. Bonds, Ser. 1999 VRDN, 6.38%, due 5/4/00
(LOC: Bank of New York) (Note C) 6.29 6,000,000
7,500,000 CEGW, Inc. Tax. Notes, Ser. 1999, 6.25%, optional put 5/3/00 (LOC: PNC Bank, N.A.) 6.16 7,500,000
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 20,100,000 EPI Corp., Tax. Adj. Rate Notes, Ser. 1998, 6.25%, optional put 5/1/00
(LOC: PNC Bank, N.A.) 6.25 $ 20,100,000
23,000,000 Formosa Plastics Corp., Ser. B, due 5/4/00 (LOC: Bank of America, N.A.) 5.98 22,988,826
11,500,000 ISCO, Inc. Tax. VRDN Ser. 1999, 6.26%, due 5/4/00 (LOC: First Union National Bank)
(Note C) 6.17 11,500,000
31,550,000 Metrocrest Hospital Authority, Ser. 89-A, due 5/22/00 (LOC: Bank of New York) 6.14 31,437,930
23,345,000 Resources & Conservation Center LP Tax VRDN (Resources of the Future, Inc. Proj.)
Ser. 1999, 6.26%, due 5/4/00 (LOC: First Union National Bank) (Note C) 6.26 23,345,000
3,720,000 Senior Systems Technology LLC VRDN, 6.20%, due 5/8/00 (LOC: Comerica Bank - California)
(Note C) 6.20 3,720,000
4,955,000 Stech, LLP Tax. Adj. Rate Bonds, Ser. 1998, 6.25%, optional put 5/1/00
(LOC: PNC Bank, N.A.) 6.16 4,955,000
7,300,000 Watson Clinic LLP Ser. 1999 Tax. VRDN, 6.23%, due 5/4/00 (LOC: Bank of America N.A.)
(Note C) 6.14 7,300,000
11,375,000 Willow Run Foods, Inc. Ser 1999-1 VRDN, 6.25%, due 5/1/00 (LOC: PNC Bank, N.A.) (Note C) 6.16 11,375,000
--------------
150,466,756
--------------
FOREIGN BANK SUPPORTED OBLIGATIONS--19.7%
10,500,000 Banco Barclays e Galicia (Bahamas), Ltd., due 5/2/00 (LOC: Barclays Bank PLC) 6.01 10,498,294
10,000,000 Banco Barclays e Galicia (Bahamas), Ltd., due 5/5/00 (LOC: Barclays Bank PLC) 6.02 9,993,500
30,000,000 Banco Bozano Simonsen, S.A., due 6/21/00 (LOC: Banco Santander Central Hispanoamerica) 6.14 29,745,213
50,000,000 Banco Bradesco, S.A., Grand Cayman, due 6/19/00 (LOC: Barclays Bank PLC) 6.20 49,584,861
75,000,000 Banco de Galicia y Buenos Aires, S.A., due 7/25/00
(LOC: Bayerische Hypo -und Vereinsbank, S.A.) 6.35 73,893,229
30,000,000 Banco de la Provincia de Buenos Aires, due 9/11/00 (LOC: Barclays Bank PLC) 6.33 29,328,350
22,500,000 Banco Hipotecario, S.A., due 5/22/00 (LOC: Barclays Bank PLC) 6.15 22,421,250
25,000,000 Banco Hipotecario, S.A., due 8/25/00 (LOC: Barclays Bank PLC) 6.09 24,530,764
20,000,000 Banco Itau, due 5/12/00 (LOC: Bayerische Hypo -und Vereinsbank, S.A.) 6.02 19,964,678
46,252,000 Carondolet Health System, due 5/12/00 (LOC: Rabobank Nederland) 6.02 46,167,770
50,000,000 Citibank, N.A., Nassau Branch, due 5/10/00 (LOC: Banco Santander Central Hispanoamerica) 6.04 49,925,625
25,000,000 Citibank, N.A., Nassau Branch, due 7/19/00 (LOC: Banco Santander Central Hispanoamerica) 6.15 24,672,479
50,000,000 Citibank, N.A., Nassau Branch, due 7/26/00 (LOC: Banco Santander Central Hispanoamerica) 6.32 49,257,056
41,000,000 ED&F Man Treasury Management, due 6/26/00 (LOC: Rabobank Nederland) 6.18 40,610,318
17,000,000 GTL-Trade Corp., due 5/22/00 (LOC: Banco Santander Central Hispanoamerica) 6.06 16,940,698
35,000,000 GTL-Trade Corp., due 6/26/00 (LOC: Banco Santander Central Hispanoamerica) 6.12 34,676,056
14,306,000 Holy Cross Health System Corp. Ser. 1996, due 5/3/00
(LOC: 2/3 KBC Bank NV, 1/3 Northern Trust Co.) 6.05 14,301,271
20,000,000 Holy Cross Health System Corp. Ser. 1996, due 6/14/00
(LOC: 2/3 KBC Bank NV, 1/3 Northern Trust Co.) 6.10 19,853,333
38,000,000 Inland Empire Solid Waste Fin. Auth. 1999 Ser. A VRDN, 6.12%, due 5/8/00
(LOC: Bayerische Hypo -und Vereinsbank, S.A.) (Note C) 6.04 38,000,000
18,737,000 Mt. Sinai Medical Realty Corp., due 5/17/00 (LOC: Landesbank Hessen-Thueringen GZ) 6.07 18,687,451
25,000,000 PEMEX Capital, Inc., due 7/6/00 (LOC: Barclays Bank PLC) 6.22 24,719,500
15,720,000 St. Francis Place LP Tax. MFH VRDN (St. Francis Place) Ser. 98, 6.25%, due 5/4/00
(LOC: Credit Suisse First Boston) (Notes C,E) 6.16 15,720,000
250,000,000 UBS Finance (DE), due 5/1/00 (LOC: UBS AG) 6.04 250,000,000
11,000,000 Unibanco-Uniao de Bancos Brasileiros, Ser. A, due 7/13/00
(LOC: Westdeutsche Landesbank GZ) 6.08 10,871,074
19,000,000 Unibanco-Uniao de Bancos Brasileiros, Ser. B, due 7/13/00
(LOC: Westdeutsche Landesbank GZ) 6.08 18,777,309
50,000,000 Unibanco-Uniao de Bancos Brasileiros, Ser. C, due 4/12/01 (LOC: Barclays Bank PLC) 6.88 46,905,222
50,000,000 United Mexican States, due 6/2/00 (LOC: Barclays Bank PLC) 6.08 49,736,444
--------------
1,039,781,745
--------------
YANKEE BANK CERTIFICATES OF DEPOSIT--7.0%
60,000,000 Bayerische Hypo -und Vereinsbank AG, 5.17%, due 5/4/00 5.23 59,999,739
60,000,000 Deutsche Bank AG, 5.36%, due 5/22/00 5.42 59,998,342
25,000,000 Deutsche Bank AG, 5.92%, due 10/2/00 6.25 24,955,992
100,000,000 Deutsche Bank AG, 6.68%, due 2/20/01 6.73 99,961,665
50,000,000 Societe Generale, 6.08%, due 5/16/00 (Note A) 6.19 49,965,475
75,000,000 Societe Generale, 6.50%, due 1/8/01 6.55 74,975,393
--------------
369,856,606
--------------
TOTAL BANK OBLIGATIONS--47.6% 2,520,774,819
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
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<S> <C> <C> <C>
TAXABLE MUNICIPAL OBLIGATIONS--6.5%
$ 25,000,000 Broward Cty., FL, Pro. Sports Fac. Tax & Rev. Bonds (Broward Cty. Civic Arena Proj.)
Ser. 1996B (TTR 14), 6.13%, optional put 5/1/00 (Insured: MBIA; LIQ: Citibank) 6.13 $ 25,000,000
17,000,000 Calcasieu Parish, LA, IDB Env. Rev. Bonds, Taxable, 6.05%, due 5/17/00
(LIQ: Westdeutsche Landesbank GZ) 6.05 17,000,000
40,000,000 CA Pollution Control Fin. Auth. Env. Imp. Rev. Bonds (Atlantic Richfield Co. Proj.)
Ser. 1997, 6.10%, due 5/3/00 (GTY: Atlantic Richfield Co.) (Note E) 6.10 40,000,000
100,000,000 CA Pollution Control Fin. Auth. Env. Imp. Rev. Bonds (Shell Oil Co. Proj.)
Ser. 1998A, 6.10%, due 5/17/00 (GTY: Shell Oil Co.) 6.10 100,000,000
4,735,000 City of Gaithersburg, MD Econ. Dev. Rev. (Asbury Methodist Village, Inc. Fac.)
Ser. 1997B VRDN, 6.22%, due 5/3/00 (Insured: MBIA; LIQ: Bank of America N.A.) (Note C) 6.16 4,735,000
19,170,000 City of Portland, OR Ltd. Tax Pension Obligation Rev. Bonds 1999 Ser. C (TTR 20), 6.18%,
optional put 5/1/00 (LIQ: Citibank, N.A.) 6.18 19,170,000
5,500,000 IDA of City Portsmouth, VA (PortCentre I Proj.) Ser. 1997B VRDN, 6.25%, due 5/1/00
(LOC: Bank of America N.A.) (Note C) 6.15 5,500,000
23,900,000 IL Dev. Auth. Revenue Bonds Ser. 1996 VRDN, 6.25%, due 5/4/00
(LOC: Northern Trust Co.) (Note C) 6.16 23,900,000
6,150,000 IL Health Facilities Auth. Ser. 1996F VRDN, 6.25%, due 5/3/00
(LOC: LaSalle National Bank) (Note C) 6.16 6,150,000
10,000,000 IL Hsg. Dev. Auth. Affordable Housing Pgm. Trust Fund Bonds Ser. 1995A (TTR 5), 6.18%,
optional put 5/1/00 (Insured: AMBAC ; LIQ: Citibank, N.A.) 6.18 10,000,000
13,800,000 IL Student Asst. Comm. Student Loan Rev. Bonds Ser. 1999B-I VRDN, 6.12%, due 5/3/00
(Insured: MBIA; LIQ: Bank One, N.A.) (Note C) 6.12 13,800,000
18,000,000 IL Student Asst. Comm. Student Loan Rev. Bonds Ser. 1999B-II VRDN, 6.12%, due 5/3/00
(Insured: MBIA; LIQ: Bank One, N.A.) (Note C) 6.12 18,000,000
11,000,000 MS Bus. Fin. Corp. Indus. Dev. Bonds (GE Plastics Finishing Inc. Proj.)
Ser. 1998 VRDN, 6.11%, due 5/1/00 (GTY: General Electric Company) (Note C) 6.11 11,000,000
6,000,000 NJ EDA State Pension Fdg. Bonds Ser. 1997A (TTR 19), 6.18%, optional put 5/1/00
(Insured: MBIA; LIQ: Citibank, N.A.) 6.18 6,000,000
3,825,000 PA Econ. Dev. Fin. Auth. Taxable Dev. Rev. Bonds (Country Meadows of Allentown Proj.)
Ser. 1996B VRDN, 6.20%, due 5/1/00 (LOC: First Union National Bank) (Note C) 6.20 3,825,000
8,700,000 Polk Cty. FL IDA Rev. Bonds (Watson Clinic LLP Proj.) Ser. 99 VRDN, 6.23%, due 5/4/00
(LOC: Bank of America N.A.) (Note C) 6.14 8,700,000
13,500,000 State of Ohio, Taxable Dev. Asst, Ser. 1996 (TTR 15 & 16), 6.18%, optional put 5/1/00
(Insured: AMBAC; LIQ: Citibank, N.A.) 6.18 13,500,000
20,000,000 State of Ohio, Taxable Dev. Asst. Ser. CR16T (TTR 15 & 16), 6.18%, optional put 5/1/00
(Insured: AMBAC; LIQ: Citibank, N.A.) 6.18 20,000,000
--------------
TOTAL TAXABLE MUNICIPAL OBLIGATIONS--6.5% 346,280,000
--------------
REPURCHASE AGREEMENT--2.1%
108,650,000 ABN AMRO
~dated 4/28/00, due 5/1/00, in the amount of $108,702,876
~fully collateralized by $113,071,000 U.S. Government securities, coupon
range 0% to 7.13%, maturity range 5/15/00 to 1/15/30, value $110,827,270 5.84 108,650,000
--------------
TOTAL INVESTMENTS--101.7% 5,379,761,601
OTHER ASSETS AND LIABILITIES, NET--(1.7)% (88,825,370)
--------------
NET ASSETS--100.0% $ 5,290,936,231
==============
PLEASE SEE ACCOMPANYING NOTES TO THE SCHEDULES OF INVESTMENTS AND FINANCIAL STATEMENTS.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FEDERAL FARM CREDIT BANK--1.3%
$ 10,000,000 Notes, 5.89%, due 5/3/00 (Note A) 5.92 $ 9,999,979
2,500,000 Notes, 4.33%, due 10/26/00 6.16 2,478,179
--------------
12,478,158
--------------
FEDERAL HOME LOAN BANK--6.7%
10,000,000 Notes, 5.87%, due 5/12/00 (Note A) 5.96 9,999,744
3,000,000 Notes, 5.00%, due 5/17/00 5.90 2,998,412
1,000,000 Notes, 5.05%, due 5/19/00 5.91 999,533
3,000,000 Notes, 5.26%, due 5/26/00 6.00 2,998,188
25,000,000 Notes, 6.13%, due 7/4/00 (Note A) 6.20 24,992,672
7,000,000 Notes, 5.54%, due 7/12/00 5.86 6,994,895
2,000,000 Notes, 5.50%, due 7/14/00 6.02 1,997,626
3,000,000 Notes, 5.57%, due 8/17/00 5.86 2,997,042
6,000,000 Notes, 5.47%, due 8/18/00 5.86 5,992,256
3,500,000 Notes, 6.20%, due 11/3/00 6.23 3,496,632
--------------
63,467,000
--------------
FEDERAL HOME LOAN MORTGAGE CORP.--5.7%
25,000,000 Notes, 5.92%, due 5/20/00 (Note A) 6.05 24,980,106
30,000,000 Notes, 5.20%, due 11/16/00 6.35 29,817,445
--------------
54,797,551
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--48.3%
15,000,000 Mortgage-backed Discount Notes, due 5/1/00 5.85 15,000,000
50,000,000 Mortgage-backed Discount Notes, due 5/1/00 5.84 50,000,000
20,000,000 Mortgage-backed Discount Notes, due 5/2/00 5.87 19,996,789
30,000,000 Mortgage-backed Discount Notes, due 5/10/00 5.94 29,956,125
50,000,000 Mortgage-backed Discount Notes, due 6/1/00 6.01 49,745,111
50,000,000 Mortgage-backed Discount Notes, due 7/3/00 6.09 49,477,625
28,450,000 Mortgage-backed Discount Notes, due 8/1/00 6.26 28,002,134
34,655,000 Mortgage-backed Discount Notes, due 9/1/00 5.87 33,989,575
5,771,442 Mortgage-backed Discount Notes, due 10/1/00 5.91 5,763,507
2,182,268 Mortgage-Backed Notes, 6.00%, Pool 190103, due 11/1/00 6.22 2,173,096
25,000,000 Notes, 6.12%, due 5/1/00 (Note A) 6.15 24,996,906
60,000,000 Notes, 5.93%, due 5/8/00 (Note A) 6.03 59,964,495
2,000,000 Notes, 5.12%, due 5/12/00 5.91 1,999,465
2,500,000 Notes, 5.10%, due 5/19/00 5.97 2,498,849
7,125,000 Notes, 8.90%, due 6/12/00 5.48 7,151,694
8,500,000 Notes, 5.46%, due 6/21/00 5.53 8,498,743
1,000,000 Notes, 5.67%, due 7/21/00 5.83 999,549
1,000,000 Notes, 5.56%, due 8/4/00 6.07 998,474
20,000,000 Notes, 5.62%, due 8/9/00 5.79 19,991,093
1,500,000 Notes, 6.09%, due 8/21/00 5.95 1,500,283
9,250,000 Notes, 5.10%, due 9/25/00 5.87 9,221,382
1,285,000 Notes, 4.75%, due 11/2/00 6.06 1,276,641
10,000,000 Notes, 4.90%, due 11/2/00 5.95 9,948,021
1,550,000 Notes, 5.10%, due 11/29/00 5.98 1,542,422
13,000,000 Notes, 5.23%, due 1/8/01 6.45 12,898,328
10,000,000 Notes, 5.25%, due 2/12/01 6.51 9,906,290
--------------
457,496,597
--------------
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
STUDENT LOAN MARKETING ASSOCIATION--14.9%
$ 10,000,000 Notes, 6.10%, due 5/1/00 (Note A) 6.15 $ 9,997,650
25,000,000 Notes, 6.22%, due 5/2/00 (Note A) 6.19 24,989,562
25,000,000 Notes, 6.46%, due 5/2/00 (Note A) 6.46 24,988,996
30,000,000 Notes, 6.46%, due 5/2/00 (Note A) 6.42 29,992,778
30,000,000 Notes, 6.48%, due 5/2/00 (Note A) 6.42 29,996,349
10,000,000 Notes, 6.48%, due 5/2/00 (Note A) 6.44 9,997,358
9,500,000 Notes, 5.13%, due 6/30/00 5.13 9,491,869
1,500,000 Notes, 4.74%, due 10/27/00 6.48 1,487,597
--------------
140,942,161
--------------
U.S. GOVERNMENT GUARANTEED OBLIGATIONS--6.3%
4,000,000 Agency for International Dev. Bonds, 5.25%, due 9/15/00 5.92 3,989,712
12,500,000 American Classic Voyages (Project America, Ship I, Inc.) U.S. Government
Guaranteed Ship Financing Notes, Ser. A-2000, 6.33%, due 1/31/01 (Notes A,B) 6.33 12,500,000
8,750,000 Overseas Private Investment Corp. Ser. 165A Notes, 6.13%, due 5/8/00 (Note A) 6.04 8,750,000
15,750,000 Overseas Private Investment Corp. Ser. 165E Notes, 6.13%, due 5/8/00 (Note A) 6.04 15,750,000
18,375,000 Overseas Private Investment Corp. Ser. 169N, Notes, 6.13%, due 5/8/00 (Note A) 6.04 18,375,000
--------------
59,364,712
--------------
REPURCHASE AGREEMENTS--19.3%
132,302,000 ABN AMRO
~dated 4/28/00, due 5/1/00, in the amount of $132,366,387
~fully collateralized by $137,570,000 U.S. Government securities,
coupon range 0% to 7.54%, maturity range 6/13/00 to 7/7/09, value $134,950,708 5.84 132,302,000
50,000,000 Morgan Stanley & Co. Inc.
~dated 4/25/00, due 5/2/00, in the amount of $50,057,556
~fully collateralized by $65,637,824 U.S. Government securities, coupon 6.5%,
maturity range 5/1/13 to 8/1/29, value $51,250,142 5.92 50,000,000
--------------
182,302,000
--------------
TOTAL INVESTMENTS--102.5% 970,848,179
OTHER ASSETS AND LIABILITIES, NET--(2.5%) (24,042,717)
--------------
NET ASSETS--100.0% $ 946,805,462
==============
PLEASE SEE ACCOMPANYING NOTES TO THE SCHEDULES OF INVESTMENTS AND FINANCIAL STATEMENTS.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS
ALABAMA--2.74%
$ 600,000 Decatur IDB Solid Waste Disp. Rev. Bonds (Amoco Chem. Co.) Ser. 1995 VRDN, 6.20% (Note C) 6.20 $ 600,000
4,640,000 Huntsville IDB Rev. Bonds (Central CPVC Corp.Proj.) Ser.1998 VRDN, 5.20%
(LOC: First Union National Bank) (Note C) 5.20 4,640,000
3,000,000 Montgomery IDB Rev. Bonds (Kinpak Inc. Proj.) VRDN, 5.20%
(LOC: First Union National Bank) (Note C) 5.20 3,000,000
4,650,000 Montgomery IDR Bonds (Anderson ALACO Lawn Proj.) VRDN, 4.58% (LOC: U.S. Bank) (Note C) 4.58 4,650,000
--------------
12,890,000
--------------
ALASKA--0.88%
800,000 Anchorage Port & Terminal Rev. Bonds, 6.00%, due 2/1/01 (Insured: MBIA) 4.30 809,887
2,800,000 IDA Rev. Bonds (Alaska Hotel Properties, Inc.) VRDN, 4.85%
(LOC: National Westminster) (Note C) 4.85 2,800,000
500,000 North Slope Boro, Ser. B, 6.75%, due 6/30/00 (Insured: FSA) 4.25 502,002
--------------
4,111,889
--------------
ARIZONA--0.47%
2,200,000 Pima Cty. IDA (Tucson Elec. Co.Proj.) VRDN, 5.00% (LOC: Societe Generale) (Note C) 5.00 2,200,000
--------------
ARKANSAS--0.31%
1,435,000 DFA Rev. Bonds (Conestoga Wood Proj.) VRDN, 5.25%
(LOC: First Union National Bank) (Note C) 5.25 1,435,000
--------------
CALIFORNIA--2.67%
300,000 Alternative Energy Source Fin. Auth., Ser. 1986 VRDN, 3.80%
(LOC: Banque Nationale de Paris) (Note C) 3.80 300,000
10,000,000 Higher Educ. Loan Auth., Ser. 1987A, 3.55%, put 7/1/00 (LOC: SLMA) 3.55 10,000,000
2,219,687 Pitney Bowes Credit Corp., Ser. 1999-1, 3.80%, put 7/12/00 (Note E) 3.80 2,219,687
--------------
12,519,687
--------------
COLORADO--1.41%
6,645,000 Commerce City Rev. Bonds (Golf Enterprise) Ser. 1994 VRDN, 5.10%
(LOC: U.S. Bank of Washington) (Note C) 5.10 6,645,000
--------------
DELAWARE--0.25%
1,160,000 Wilmington Community Rev. Bonds, Program A, VRDN, 5.30% (LOC: Corestates Bank) (Note C) 5.30 1,160,000
--------------
DISTRICT OF COLUMBIA--3.81%
775,000 GO Bonds, 7.10%, due 6/1/00 (Insured: FSA) 3.55 777,267
12,000,000 HFA COP (Tyler House Apts. Proj.) Ser.1995A VRDN, 5.20%
(LOC: Landesbank Hessen Thuringen) (Note C) 5.20 12,000,000
1,100,000 Rev. Bonds (Catholic Univ. of Amer. Proj.) 5.00%, due 10/1/00 (Insured: AMBAC) 3.70 1,105,799
4,000,000 Water & Sewer Rev. Bonds (Eagle Trust Certs.) VRDN, 5.13% (LIQ: Citibank) (Note C,E) 5.13 4,000,000
--------------
17,883,066
--------------
FLORIDA--4.63%
2,000,000 Board of Educ. (ABN-AMRO Munitops 1998) VRDN, 5.18% (LIQ: ABN-AMRO Bank) (Note C,E) 5.18 2,000,000
2,000,000 Jacksonville Elec. Auth. Rev. Bonds (St. Johns River Proj.) Ser. 6C, 6.40%, due 10/1/00 4.10 2,018,702
5,800,000 Jacksonville Elec. Auth. Tax Exempt CP Notes, 3.95%, due 6/5/00
(RCA: Morgan Guaranty Trust) 3.95 5,800,000
2,300,000 Pinellas Cty. IDR Bonds (Pozin Enterprises Inc. Proj.) VRDN, 5.25%
(LOC: Nationsbank) (Note C) 5.25 2,300,000
2,000,000 St. Johns Cty. IDA Rev. Bonds (Coastal Health Investors Ltd. Proj.)
Ser. 1986 VRDN, 5.15%, (LOC: SunTrust Bank) (Note C) 5.15 2,000,000
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, 5.28% (LIQ: Citibank) (Note C) 5.28 7,150,000
--------------
21,728,145
--------------
GEORGIA--4.94%
300,000 Atlanta Board of Educ. COP, 4.60%, due 12/1/00 (Insured: FGIC) 4.15 300,764
400,000 Atlanta Water Rev. Bonds, Ser. A, 3.50%, due 11/1/00 (Insured: FGIC) 4.75 395,732
10,540,000 Clayton Cty. GO Bonds (Jail Courthouse & Public Admin. Bldg. Proj.) 4.75%, due 8/1/00 3.78 10,564,888
200,000 Clayton Cty. SD GO Bonds, 5.20%, due 2/1/01 4.30 201,310
200,000 Cobb Cty. SD GO Bonds, 4.60%, due 2/1/01 4.30 200,435
6,642,000 Dekalb Cty. Hsg. Auth. SFM, Ser.1997A VRDN, 5.25% (LIQ: Bank of New York) (Note C) 5.25 6,642,000
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,500,000 Gwinnett Cty. IDR (Barco Inc. Proj.) VRDN, 5.20%
(LOC: First Union National Bank) (Note C) 5.20 $ 1,500,000
1,400,000 Talbot Cty. Dev. Auth. IDR Bonds (Douglas Asphalt Co. Proj.) VRDN, 5.25%
(LOC: First Union National Bank) (Note C) 5.25 1,400,000
2,000,000 Valdosta Lowndes Cty. IDR Bonds (Reames Cos. Proj.)
Ser. 1998 VRDN, 5.20% (LOC: Nationsbank) (Note C) 5.20 2,000,000
--------------
23,205,129
--------------
ILLINOIS--5.80%
2,065,000 Bedford Park IDR Bonds (Cintas Sales Corp. Proj.) VRDN, 5.10% (LOC: PNC Bank) (Note C) 5.10 2,065,000
4,300,000 Chicago IDR Bonds (Enterprise Center X Proj.) VRDN, 5.13% (LOC: Bank One) (Note C) 5.13 4,300,000
2,900,000 Chicago (Muni. Sec. Trust Receipts) Ser. A2 VRDN, 5.25%
(Insured: AMBAC; LIQ: Credit Suisse) (Note C) 5.25 2,900,000
2,625,000 Chicago Sales Tax Rev. Bonds, VRDN, 5.28% (LIQ: Citibank) (Note C) 5.28 2,625,000
575,000 DFA Rev. Bonds (D.E. Akin Seed Proj.) VRDN, 5.20% (LOC: Banc One) (Note C) 5.20 575,000
1,000,000 DFA Rev. Bonds (Profile Plastics Proj.) VRDN, 5.13% (LOC: LaSalle National Bank)(Note C) 5.13 1,000,000
1,700,000 Lake Cty. Solid Waste Rev. Bonds (Countryside Landfill Inc.) VRDN, 5.25%
(LOC: Morgan Guaranty Trust) (Note C) 5.25 1,700,000
4,350,000 Northern Illinois Univ. COP (Hoffman Estates Educ. Center Proj.) 7.00%,
due 9/1/00, prerefunded @102 (Note D) 3.80 4,481,248
4,000,000 Paris IDR Bonds (Simonton Building Products Inc. Proj.)
VRDN, 5.20% (LOC: Wachovia Bank) (Note C) 5.20 4,000,000
2,400,000 Richmond IDR Bonds (Maclean Fogg Co.Proj.) VRDN, 5.25% (LOC: Bank of America) (Note C) 5.25 2,400,000
500,000 Univ. of Illinois COP (Util. Infrastructure Proj.) 5.00%, due 8/15/00 (Insured: MBIA) 4.00 501,402
700,000 Will Cty. Facs. Rev. Bonds (Amoco Chem. Co. Proj.) Ser. 98 VRDN, 6.20% (Note C) 6.20 700,000
--------------
27,247,650
--------------
INDIANA--0.85%
900,000 DFA Rev. Bonds (PSI Energy Inc. Proj.) VRDN, 6.20% (LOC: Morgan Guaranty) (Note C) 6.20 900,000
2,200,000 Employment Dev. Commission Rev. Bonds (Fischer Enterprises Proj.) VRDN, 5.20%
(LOC: PNC Bank) (Note C) 5.20 2,200,000
900,000 New Albany EDR Bonds (Gordon & Jeff Huncilman Proj.) VRDN, 5.20% (LOC: PNC Bank)(Note C) 5.20 900,000
--------------
4,000,000
--------------
IOWA--0.83%
3,900,000 Dubuque (Jeld-Wen, Inc. Proj.) Ser. 1988 VRDN, 5.44% (LOC: ABN-AMRO Bank) (Note C) 5.44 3,900,000
--------------
KENTUCKY---4.86%
11,860,000 Asset & Liability Agy. Rev. Bonds (Proj. Notes)
Ser. A, 4.00%, due 6/7/00 (LOC: Commerzbank AG) 4.00 11,860,000
275,000 Higher Educ. Rev. Bonds, Ser. A, 4.70%, due 12/1/00 4.00 276,088
3,000,000 Mayfield IDR Bonds (Seaboard Farms of KY Inc. Proj.)
VRDN, 5.15% (LOC: SunTrust Bank) (Note C) 5.15 3,000,000
3,200,000 Pendleton Cty. (KY Assoc. of Ctys. Lease Trust Prog.) Ser. 1989, 3.90%, due 6/2/00
(LOC: Commonwealth Bank of Australia) 3.90 3,200,000
2,500,000 Pulaski Cty. Solid Waste Rev. Bonds
(National Rural - Eastern KY Power) Ser. B, 4.05%, put 8/15/00 4.05 2,500,000
500,000 Turnpike Auth. EDR Bonds, 7.25%, due 5/15/00 , prerefunded @ 101.5 (Note D) 4.10 508,847
1,500,000 Turnpike Auth. (Trust Rec.) Ser. 17 VRDN, 5.20% (LIQ: Commerzbank) (Note C,E) 5.20 1,500,000
--------------
22,844,935
--------------
LOUISIANA--0.58%
2,000,000 Jefferson Parish IDR Rev. Bonds (George J. Ackel Sr. Proj.)
VRDN, 5.15% (LOC: Regions Bank) (Note C) 5.15 2,000,000
205,000 Pub. Fac. Auth. Rev. Bonds, 6.20%, due 3/1/01 4.50 207,813
500,000 St. Charles Parish (Shell Oil Co.) Ser. 1993 VRDN, 6.20% (Note C) 6.20 500,000
--------------
2,707,813
--------------
MAINE--0.60%
800,000 Educ. Loan Marketing Corp. Rev. Bonds (Student Loan) Ser. A4, 5.60%, due 11/1/00 4.40 804,647
2,000,000 Pub. Util. Fin. Rev. Bonds (Maine Public Service Co. Proj.) VRDN, 5.15%
(LOC: Bank of New York) (Note C) 5.15 2,000,000
--------------
2,804,647
--------------
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MARYLAND--2.96%
$ 9,000,000 Anne Arundel Cty. (Baltimore Gas & Electric Proj.) Ser. 1988, 4.05%, due 6/6/00
(SBPA: Bank of New York, Chemical) 4.05 $ 9,000,000
3,000,000 CDA Rev. Bonds, Ser.2000-CMC3 VRDN, 5.25% (LIQ: Chase Manhattan Bank) (Note C) 5.25 3,000,000
1,890,000 Health & Higher Educ. (No. Arundel Hosp. Proj.) VRDN, 5.15% (LOC: Mellon Bank) (Note C) 5.15 1,890,000
--------------
13,890,000
--------------
MASSACHUSETTS--2.71%
706,000 Hamilton Wenham Regional SD GO Bonds, 6.50%, due 5/1/00 (Insured: FSA) 3.40 706,000
2,100,000 DFA Rev. Bonds (JPF Realty Proj.) Ser. A VRDN, 5.15% (LOC: Bank of Boston) (Note C) 5.15 2,100,000
500,000 GO Bonds, 5.00%, due 8/1/00 4.40 501,215
2,415,000 HEFA Rev. Bonds (Becker College) Ser. A1 VRDN, 5.10% (LOC: Bank of Boston) (Note C) 5.10 2,415,000
435,000 HFA Rev. Bonds, Ser. A, 5.70%, due 1/1/01 (Insured: AMBAC) 5.00 436,953
700,000 IDA Rev. Bonds (October Co. Inc. Proj.) VRDN, 5.15% (LOC: Bank of Boston) (Note C) 5.15 700,000
350,000 New England Educ. Loan Marketing Corp. Rev. Bonds, Ser. 1993G, 5.00%, due 8/1/00 4.25 350,646
5,500,000 Worchester GO BAN, 4.40%, due 8/30/00 3.85 5,509,670
--------------
12,719,484
--------------
MICHIGAN--0.05%
250,000 Building Auth. Rev. Bonds, Ser. I, 4.40%, due 10/1/00 (Insured: AMBAC) 4.40 250,093
--------------
MINNESOTA--0.99%
2,105,000 Cass Lake ISD #115 GO Notes, 3.90%, due 9/30/00 3.90 2,104,979
1,250,000 New York Mills ISD #553 GO Notes, 3.90%, due 9/30/00 3.90 1,249,950
1,300,000 Waseca, Rice & Steele Ctys. ISD Notes, 4.45%, due 3/30/01 4.40 1,300,562
--------------
4,655,491
--------------
MISSISSIPPI--0.69%
1,600,000 Business Fin. Corp. IDR Bonds (Lehman-Roberts Co. Proj.) Ser. A VRDN, 5.25%
(LOC: Nationsbank) (Note C) 5.25 1,600,000
255,000 Clarksdale Sewer & Wastewater Treatment Sys.
Rev. Bonds, 5.10%, due 10/1/00 (Insured: MBIA) 4.30 255,821
760,000 Jackson Cty. Water & Sewer Rev. Bonds, 6.75%, due 9/1/00 (Insured: FGIC) 3.60 767,802
590,000 Tupelo Pub. SD GO Bonds, 6.90%, due 11/1/00 (Insured: MBIA) 4.00 598,348
--------------
3,221,971
--------------
MISSOURI--1.77%
6,200,000 Kansas City IDA Rev. Bonds (Crooked Creek Apts. Proj.) Ser. A VRDN, 5.13%
(LOC: LaSalle National Bank) (Note C) 5.13 6,200,000
2,100,000 Warrensburg IDA Rev. Bonds (Swisher Mower Inc. Proj.)
VRDN, 5.20% (LOC: Nationsbank) (Note C) 5.20 2,100,000
--------------
8,300,000
--------------
MONTANA--0.34%
805,000 Butte Silver Bow PCR Bonds (Rhone-Poulenc Inc. Proj.) VRDN, 5.15%
(LOC: Banque Nationale de Paris) (Note C) 5.15 805,000
800,000 Higher Educ. Student Assistance Corp. Rev. Bonds, Ser. 1993A, 5.05%, due 12/1/00 4.25 803,618
--------------
1,608,618
--------------
NEBRASKA--0.39%
1,840,000 Gage Cty. IDR Rev. Bonds (Accuma Corp. Proj.) VRDN, 5.20%
(LOC: First Union National Bank) (Note C) 5.20 1,840,000
--------------
NEVADA--0.21%
1,000,000 Henderson Cty. Pub. Imp. Trust Rev. Bonds (Berry Plastics Corp.Proj.)
Ser. 1991 VRDN, 5.13% (LOC: Nationsbank) (Note C) 5.13 1,000,000
--------------
NEW HAMPSHIRE--2.76%
3,400,000 Business Fin. Auth. (Forty-One Northwestern LLC Proj.) Ser. 1998 VRDN, 5.15%
(LOC: Bank of Boston) (Note C) 5.15 3,400,000
3,500,000 Business Fin. Auth. (Foundation for Seacoast Health)
Ser. A VRDN, 5.25% (LOC: Fleet Bank) (Note C) 5.25 3,500,000
2,400,000 Business Fin. Auth. (Wiggins Airway Inc. Proj.)
VRDN, 5.20% (LOC: Bank of Boston) (Note C) 5.20 2,400,000
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 2,400,000 IDA Rev. Bonds (Oerlikon-Burhle USA) VRDN, 4.30%
(LOC: Union Bank of Switzerland) (Note C) 4.30 $ 2,400,000
1,250,000 Manchester Hsg. Auth. Rev. Bonds (Wall St. Tower Proj.)
Ser. B VRDN, 5.25% (LOC: PNC Bank) (Note C) 5.25 1,250,000
--------------
12,950,000
--------------
NEW JERSEY--0.06%
300,000 Transportation Corp. Rev. Bonds, Ser. B, 4.50%, due 6/15/00 (Insured: MBIA) 4.20 300,066
--------------
NEW MEXICO--1.55%
1,500,000 Albuquerque IDR (CVI Laser Corp. Proj.)
Ser. 1998 VRDN, 5.25% (LOC: Nationsbank) (Note C) 5.25 1,500,000
1,465,000 Albuquerque IDR (Karsten Co. of New Mexico)
Ser. 1997A VRDN, 5.40% (LOC: Bank One) (Note C) 5.40 1,465,000
3,700,000 Farmington IDR Bonds (Independent Mobility Sys. Proj.) Ser. A VRDN, 5.25%
(LOC: Bank Of America) (Note C) 5.25 3,700,000
595,000 Mortgage Fin. Auth. Rev. Bonds (Eagle Trust) VRDN, 5.38% (LIQ: Citibank) (Note C,E) 5.38 595,000
--------------
7,260,000
--------------
NEW YORK--0.15%
240,000 Albion CSD GO Bonds, 4.85%, due 6/15/00 (Insured: FGIC) 3.50 240,388
200,000 Bethlehem CSD GO Bonds, 7.10%, due 11/1/00 (Insured: AMBAC) 4.05 202,970
250,000 New York Med. Care Facs. Fin. Agy. Rev. Bonds, 7.75%,
due 2/15/01, prerefunded @ 102 (Note D) 4.30 261,426
--------------
704,784
--------------
NORTH DAKOTA--0.39%
1,065,000 Bond Bank Rev. Bonds, 3.80%, due 6/1/00 3.60 1,065,164
780,000 Fargo GO Bonds, 4.00%, due 5/1/00 3.85 780,000
--------------
1,845,164
--------------
OHIO--4.09%
2,200,000 Air Quality Dev. Auth. Rev. Bonds (Cleveland Elec. Co. Proj.)
Ser. B, 3.90%, due 6/1/00 (LIQ: FGIC) 3.90 2,200,000
350,000 Columbus GO Bonds, Ser. 1, 4.50%, due 6/15/00 3.50 350,419
235,000 GO Bonds, 4.50%, due 5/15/00 3.60 235,079
10,500,000 Hsg. Rev. Bonds, Ser. CMC2, VRDN, 5.20% (LIQ: Chase Manhattan Bank) (Note C) 5.20 10,500,000
400,000 Pub. Fac. Comm. Higher Educ. Rev. Bonds, 5.38%, due 12/1/00 (Insured: FSA) 4.00 403,113
500,000 Solid Waste Rev. Bonds (BP Exploration & Oil Proj.) VRDN, 6.20% (Note C) 6.20 500,000
5,000,000 Water Dev. Auth. PCR Bonds (Ohio Edison Co. Proj.) Ser. A, 4.20%, put 5/1/00
(LOC: Union Bank of Switzerland) 4.12 5,002,544
--------------
19,191,155
--------------
OKLAHOMA--3.93%
200,000 HFA Rev. Bonds, Ser. A2, 3.30%, due 9/1/00 5.10 198,380
1,180,000 IDA Rev. Bonds (Health Sys. Oblig. Group) Ser. A, 4.50%, due 8/15/00 (Insured: MBIA) 4.10 1,181,306
3,700,000 Tulsa Parking Auth. Rev. Bonds (Williams Center Proj.)
Ser. A , 3.90%, put 5/15/00 (LOC: Bank of America) 3.90 3,700,000
13,375,000 Water Resources Board, State Loan Prog. Rev. Bonds, Ser. 1999, 4.10%, put 9/1/00
(SBPA: Bayerische Landesbank GZ) 4.10 13,375,000
--------------
18,454,686
--------------
OREGON--0.51%
2,400,000 Hillsboro Rev. Bonds (Oregon Graduate Institute)
VRDN, 5.90% (LOC: Comerica Bank) (Note C) 5.90 2,400,000
--------------
PENNSYLVANIA--6.59%
2,800,000 Allegheny Cty. Hosp. Dev. Auth. Rev. Bonds
(Central Blood Bank) VRDN, 5.10% (LOC: PNC Bank) (Note C) 5.10 2,800,000
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 1,000,359
1,300,000 Bethel Township IDA (Brentwood Industries Inc. Proj.)
VRDN, 5.20% (LOC: Corestates Bank) (Note C) 5.20 1,300,000
4,020,000 Cambria Cty. IDA Rev. Bonds (Cambria Cogen Co. Proj.) Ser. 1998A2 VRDN, 5.00%
(LOC: Bayerische Hypo -und Vereinsbank) (Note C) 5.00 4,020,000
5,700,000 Carbon Cty. IDA Res. Rec. Rev. (Panther Creek Proj.) Ser. 1990A, 3.75%, due 5/11/00
(LOC: National Westminster Bank) 3.75 5,700,000
300,000 Lower Dauphin Cty. SD GO Bonds, Ser. A, 4.00%, due 9/1/00 (Insured: MBIA) 4.40 299,520
1,185,000 Montgomery Cty. Higher Educ. & Health Rev. Bonds (Northwestern Corp.) 8.38%,
due 6/1/00, prerefunded @ 102 (Note D) 3.20 1,213,272
2,500,000 EDA Rev. Bonds (SJ Bailey & Sons, Inc. Proj.) VRDN, 5.20%, (LOC: PNC Bank) 5.20 2,500,000
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25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 500,000 Higher Educ. Rev. Bonds, Ser. A, 6.80%, due 12/1/00 (Insured: FGIC) 4.40 $ 506,775
1,885,000 Philadelphia Hosp. & Higher Educ. Facs. Auth. Rev. Bonds
(Northwestern Corp.) Ser. A, 8.38%, due 6/1/00, prerefunded @ 102 (Note D) 3.63 1,929,974
1,900,000 Philadelphia IDR (Henry H. Ottens Mfg. Proj.) VRDN, 5.20%
(LOC: First Union National Bank) (Note C) 5.20 1,900,000
500,000 Pittsburgh SD GO Bonds, 4.50%, due 9/1/00 (Insured: FGIC) 4.00 500,805
2,700,000 Venango IDA (Scrubgrass Proj.) Ser. 1990A, 3.95%,
due 6/8/00 (LOC: National Westminster Bank) 3.95 2,700,000
600,000 Venango IDA (Scrubgrass Proj.) Ser. 1993, 4.00%,
due 6/8/00 (LOC: National Westminster Bank) 4.00 600,000
4,000,000 Westmoreland Cty. IDA Rev. Bonds (Advance USA Proj.)
Ser.1999A VRDN, 5.20% (LOC: PNC Bank)(Note C) 5.20 4,000,000
--------------
30,970,705
--------------
RHODE ISLAND--1.91%
2,500,000 Ind. Fac. Corp. IDR (NFA Corp. Proj.) VRDN, 5.20% (LOC: Bank of Boston) (Note C) 5.20 2,500,000
6,500,000 Hsg. & Mortgage Fin. Corp. Rev. Bonds (Homeownership Opportunity) Ser. 28B, 3.75%,
due 10/1/00 (GIC: FGIC) 4.60 6,464,835
--------------
8,964,835
--------------
SOUTH CAROLINA--6.36%
500,000 Berkeley Cty. IDB (Amoco Chemical Proj.)
Ser. 1997 VRDN, 6.20% (Note C) 6.20 500,000
4,000,000 Greenville City & Cty. IDR Bonds (Stevens Aviation Tech.
Serv. Facs. Proj.) Ser. 97 VRDN, 5.20% (LOC: First Union National Bank) (Note C) 5.20 4,000,000
1,000,000 Jobs EDA (Ellcon National Inc. Proj.) VRDN, 5.20%
(LOC: First Union National Bank) (Note C) 5.20 1,000,000
2,150,000 Jobs EDA (JM Steel Corp. Proj.) Ser. 1999A VRDN, 5.20% (LOC: PNC Bank) (Note C) 5.20 2,150,000
5,100,000 Jobs EDA (JM Steel Corp. Proj.) Ser. 1999B VRDN, 5.20% (LOC: PNC Bank) (Note C) 5.20 5,100,000
2,400,000 Jobs EDA (Klockner Namasco Proj.) VRDN, 5.20% (LOC: Bayerische Landesbank GZ) (Note C) 5.20 2,400,000
6,700,000 Jobs EDA (Zeuna Starker USA, Inc. Proj.) VRDN, 5.25%
(LOC: Bayerische Landesbank GZ) (Note C) 5.25 6,700,000
8,000,000 Port Auth. (ABN-AMRO Munitops #7) VRDN, 4.57% (LIQ: ABN-AMRO Bank) (Note C,E) 4.57 8,000,000
--------------
29,850,000
--------------
SOUTH DAKOTA--1.48%
4,685,000 Sioux Falls Rev. Bonds (Evangelical Lutheran Proj.)
VRDN, 5.15% (SBPA: Norwest Bank) (Note C) 5.15 4,685,000
250,000 Building Lease Rev. Bonds, Ser. A, 4.50%, due 12/1/00 (Insured: AMBAC) 4.45 250,061
400,000 HDA (Homeownership Mortgage Bonds) Ser. 1997B, 4.00%, due 5/1/00 4.50 399,256
600,000 HDA (Homeownership Mortgage Bonds) Ser. 1997E VRDN, 5.30%
(GIC: WestDeutsche Landesbank GZ) 5.30 600,000
1,005,000 HDA (Homeownership Mortgage Bonds) Ser. 1997J, 4.25%, due 5/1/00 3.40 1,005,000
--------------
6,939,317
--------------
TENNESSEE--2.43%
2,800,000 Franklin Cty. IDB (Franklin Ind. Inc. Proj.) VRDN, 5.25% (LOC: Nationsbank) (Note C) 5.25 2,800,000
8,600,000 Metropolitan Government Davidson Cty. (ABN-AMRO Munitops)
Ser. 1999-1, 3.35%, put 5/3/00 (LIQ: ABN-AMRO Bank) (Note E) 3.35 8,600,000
--------------
11,400,000
--------------
TEXAS--8.99%
800,000 Austin Util. Sys. Rev. Bonds, Ser. A, 9.50%, prerefunded @ 100, due 5/15/00 (Note D) 3.35 801,835
650,000 Austin Util. Sys. Rev. Bonds, Ser. A, 10.00%, prerefunded @ 100, due 5/15/00 (Note D) 3.65 651,539
6,720,000 Bexar Cty. Hsg. Rev. Bonds (Eagle Trust) Ser. 94C VRDN, 5.18% (LIQ: Citibank) (Note C,E) 5.18 6,720,000
965,000 Brazos Higher Educ. Rev. Bonds, Ser. C-1, 5.30%, due 6/1/00 (GTY: Student Loans) 4.15 965,909
800,000 Brazos Higher Educ. Rev. Bonds, Ser. C-1, 6.20%, due 11/1/00 (GTY: Student Loans) 4.70 805,787
12,800,000 Brazos River Auth. (Texas Util. Elec. Co. Proj.) Ser. 1994A, 3.85%, due 5/12/00
(LOC: Canadian Imperial Bank of Commerce) 3.55 12,800,000
600,000 Brazos River Auth. (Texas Util. Elec. Co. Proj.) Ser. 1996A VRDN, 6.25%,
(Insured: AMBAC; LIQ: Bank of New York) (Note C) 6.25 600,000
2,560,000 Dept. of Hsg. & Comm. Affairs, Ser. A, 3.75%, due 5/4/00 (Insured: FGIC; LIQ: FGIC) 3.75 2,560,000
3,045,000 Dept. of Hsg. & Comm. Affairs, Ser. A, 3.95%, due 5/4/00 (Insured: FGIC; LIQ: FGIC) 3.95 3,045,000
700,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Amoco Oil Proj.)
Ser. 1993 VRDN, 6.20% (Note C) 6.20 700,000
500,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Citgo Petroleum Corp. Proj.)
Ser. 1999 VRDN, 6.25%, (LOC: Banque Nationale de Paris) (Note C) 6.25 500,000
1,869,000 Houston Airport Rev. Bonds (ABN-AMRO Munitops Trust Cert.) Ser.1998-15 VRDN, 5.15%
(LIQ: ABN-AMRO Bank) (Note C,E) 5.15 1,869,000
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</TABLE>
26
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<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
April 30, 2000 (Unaudited)
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
500,000 Houston ISD GO Bonds, Ser. A, 5.20%, due 8/15/00 4.25 501,328
$ 200,000 Port Houston Auth. GO Bonds, 6.90%, due 10/1/00 (Insured: FSA) 4.40 $ 202,036
300,000 Pub. Fin. Auth. Rev. Bonds (Parks & Wildlife Depts. Proj.)
4.75%, due 2/1/01 (Insured: FSA) 4.40 300,762
2,000,000 San Antonio IDA (LGC Building LLC & KLN Steel Prod. Co. Ltd. Proj.)
Ser. 1998 VRDN, 5.25% (LOC: Nationsbank) (Note C) 5.25 2,000,000
2,000,000 San Marcos IDC Rev. Bonds (TB Woods Inc.Proj.) VRDN, 5.20% (LOC: PNC Bank) (Note C) 5.20 2,000,000
400,000 South Texas Higher Educ. Auth. Rev. Bonds, Ser. A1, 4.75%, due 12/1/00 4.50 400,555
4,800,000 Veterans Hsg., Ser. 1994A-1 VRDN, 5.25% (Note C) 5.25 4,800,000
--------------
41,421,916
--------------
UTAH--0.21%
1,000,000 Trementon City IDR Bonds (La-Z-Boy Chair Co. Proj.)
Ser. 1990 VRDN, 5.44% (LOC: NBD Bank) (Note C) 5.44 1,000,000
--------------
VARIOUS STATES--4.74%
3,340,000 Greystone Tax Exempt Cert., Ser. 1998-2 VRDN, 5.21%
(LOC: Credit Suisse First Boston) (Note C,E) 5.21 3,340,000
10,868,335 Pitney Bowes Credit Corp. Leasetops Muni Trust, Ser.1998-2 VRDN, 5.41%,
(LIQ: Pitney Bowes Credit Corp.) (Note C,E) 5.41 10,868,335
8,059,077 Pitney Bowes Credit Corp. Leasetops Muni Trust, Ser.1999-2 VRDN, 5.46%,
(LIQ: Pitney Bowes Credit Corp.) (Note C,E) 5.46 8,059,077
--------------
22,267,412
--------------
VIRGINIA--2.68%
8,000,000 Chesapeake GO Bonds (Eagle Trust) Ser. 98-4601 VRDN, 5.13% (LIQ: Citibank) (Note C,E) 5.13 8,000,000
2,900,000 King George Cty. IDA Rev. Bonds (Garnet of VA Inc. Proj.) VRDN, 5.20%
(LOC: Morgan Guaranty) (Note C) 5.20 2,900,000
1,700,000 Isle of Wight IDA Rev. Bonds (Smithfield Ham & Produce Co.) VRDN, 5.20%
(LOC: Nationsbank) (Note C) 5.20 1,700,000
--------------
12,600,000
--------------
WASHINGTON--4.16%
2,400,000 EDA Rev. Bonds (Ace Tank Proj.) VRDN, 5.35% (LOC: US Bank) (Note C) 5.35 2,400,000
250,000 GO Bonds, 4.75%, due 5/1/00 4.00 250,000
500,000 Health Care Rev. Bonds (Sisters of Providence) 6.00%, due 10/1/00 (Insured: AMBAC) 4.00 504,059
7,420,000 HFC (Boardwalk Apts. Proj.) VRDN, 5.40% (LOC: US Bank) (Note C) 5.40 7,420,000
2,250,000 HFC (Oxford Square Apts. Proj.) Ser. A VRDN, 5.35% (LOC: US Bank) (Note C) 5.35 2,250,000
1,000,000 HFC Rev. Bonds (Lake Washington Apt. Proj.) VRDN, 5.20% (LOC: Bank of America) (Note C) 5.20 1,000,000
400,000 Highline Water Dist. Rev. Bonds, 4.05%, due 11/1/00 (Insured: MBIA) 4.00 400,095
1,300,000 Olympia EDC Rev. Bonds (Spring Air Northwest Proj.) VRDN, 5.35% (LOC: US Bank) (Note C) 5.35 1,300,000
1,000,000 Port of Seattle IDR Bonds (Alaska Airlines Inc.) VRDN, 4.25%
(LOC: Bank of New York) (Note C) 4.25 1,000,000
2,000,000 Port of Seattle Rev. Bonds, Ser. 1997 VRDN, 5.25%
(LOC: Canadian Imperial Bank of Commerce) (Note C) 5.25 2,000,000
1,000,000 Snohomish Cty. GO Bonds, 4.75%, due 12/1/00 (Insured: MBIA) 3.95 1,004,524
--------------
19,528,678
--------------
WEST VIRGINIA--0.45%
775,000 Hsg. Dev. Rev. Bonds, Ser. B, 4.40%, due 11/1/00 4.50 774,403
1,335,000 Raleigh Cty. Board of Educ. Public School GO Bonds, 4.00%, due 5/1/00 3.35 1,335,000
--------------
2,109,403
--------------
WISCONSIN--0.22%
560,000 Janesville GO Promissory Notes, 4.50%, due 6/1/00 (Insured: FSA) 3.85 560,297
265,000 Monona GO Bonds, 4.30%, due 8/1/00 (Insured: FSA) 3.90 265,257
200,000 Taylor Cty. GO Bonds, 4.90%, due 3/1/01 (Insured: MBIA) 4.50 200,643
--------------
1,026,197
--------------
TOTAL MUNICIPAL OBLIGATIONS--99.40% 466,754,771
OTHER ASSETS AND LIABILITIES, NET--0.60% 2,946,042
--------------
NET ASSETS--100.00% $ 469,700,813
==============
PLEASE SEE ACCOMPANYING NOTES TO THE SCHEDULES OF INVESTMENTS AND FINANCIAL STATEMENTS.
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27
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<PAGE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO SCHEDULES OF INVESTMENTS
April 30, 2000 (Unaudited)
(A) Variable rate securities. The rates shown are the current rates on April
30, 2000. 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, 2000, the
aggregate value of these securities, valued at amortized cost, is
$288,000,000, representing 5.4% 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. Dates
shown represent the next interest reset date.
(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 April 30, 2000, these securities
amounted to $1,607,564,260, or 30.4% of net assets in the Money Market
Portfolio and $65,771,099 or 14.0% of net assets in the Municipal
Portfolio.
DESCRIPTION OF ABBREVIATIONS
<TABLE>
<CAPTION>
<S> <C>
AIG American International Group HFC Housing Finance Commission
AMBAC American Municipal Bond Assurance IDA Industrial Development Authority
Corporation IDB Industrial Development Board
BAN Bond Anticipation Note IDC Industrial Development Corporation
COP Certificates of Participation IDR Industrial Development Revenue Bond
CP Commercial Paper ISD Independent School District
CDA Community Development Authority LIQ Liquidity Agreement
CSD Central School District LLC Limited Liability Corporation
DFA Developmental Finance Authority LOC Letter of Credit
EDA Economic Development Authority LP Limited Partnership
EDC Economic Development Corporation MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue Insurance Corporation
FGIC Financial Guaranty Insurance Company MFH Multi-Family Housing
FSA Financial Security Assurance Inc. PCR Pollution Control Revenue Bond
GIC Guaranteed Investment Contract RCA Revolving Credit Agreement
GO General Obligation SBPA Standby Bond Purchase Agreement
GTY Guarantee SD School District
HDA Housing Development Authority SLMA Student Loan Marketing Association
HEFA Health & Education Facilities Authority SFM Single Family Mortgage
HFA Housing Finance Authority VRDN Variable Rate Demand Note
---------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------
| 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>
|-------------------------------|
| 2000 |
|-------------------------------|
| |
| SEMIANNUAL REPORT |
| |
| April 30, 2000 (Unaudited) |
| |
| |
| |
| |
| |
| |
| TD Waterhouse Dow 30 Fund |
| |
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29
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<CAPTION>
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TD WATERHOUSE TRUST
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
<S> <C> <C>
TRUSTEES 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.
*Affiliated person of the Distributor
TD WATERHOUSE ASSET MANAGEMENT, INC.
BOARD OF DIRECTORS AND SENIOR OFFICERS
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 Compliance, Operations
& Administration
SERVICE PROVIDERS
INVESTMENT MANAGER TRANSFER AGENT INDEPENDENT AUDITORS
TD Waterhouse Asset Management, Inc. National Investor 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. INDEPENDENT TRUSTEES COUNSEL
60 State Street Willkie Farr & Gallagher
Boston, MA 02109 153 East 53rd Street
New York, NY 10022
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30
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--------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
DEAR SHAREHOLDER:
--------------------------------------------------------------------------------
We are pleased to provide you with the semiannual report for the TD Waterhouse
Dow 30 Fund (the "Fund") for the six month period ended April 30, 2000. Total
net assets were approximately $180 million as of April 30, 2000. Despite
significant volatility in the latter half of this six month period, the Dow
Jones Industrial AverageSM ("DJIA"SM) ended nearly unchanged, starting at 10,730
on October 31, 1999 and finishing at 10,734 on April 30, 2000. The DJIA peaked
at 11,722 in mid-January before hitting a low of 9,796 in early March. Since
this bottom, the DJIA has rebounded but has experienced a substantial degree of
instability, along with other major market indices. On a total return basis,
which includes reinvested dividends, the six month return for the DJIA was
+0.76%. Your Fund had a total return for the same period of +0.60%, after
expenses. Since the investment objective of the Fund is to match the performance
of the DJIA before Fund expenses, we are pleased with these results. As with any
investment, past performance is no guarantee of future results and there is no
guarantee that the Fund's investment objective will be achieved in the future.
We will continue to work diligently seeking to achieve the objective of the Fund
and to provide our shareholders with an investment vehicle designed to closely
emulate the performance of the DJIA.
[GRAPHIC OMITTED]
In the printed version of the document, a line graph appears which depicts
the following plot points:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
3/30/98 4/30/98 5/31/98 6/30/98 7/31/98 8/31/98 9/30/98
Dow 30 Fund $10,000.00 $10,328.48 $10,170.18 $10,245.24 $10,171.23 $ 8,652.88 $ 9,014.46
DIJA Index $10,000.00 $10,324.82 $10,162.94 $10,234.98 $10,161.24 $ 8,646.34 $ 9,008.32
10/31/98 11/30/98 12/31/98 1/31/99 2/28/99 3/31/99 4/30/99
Dow 30 Fund $9,879.56 $10,507.42 $10,594.84 $10,803.44 $10,767.91 $ 11,336.26 $12,500.03
DIJA Index $9,874.30 $10,503.96 $10,592.72 $10,802.14 $10,768.08 $ 11,338.80 $12,505.09
5/31/99 6/30/99 7/31/99 8/31/99 9/30/99 10/31/99 11/30/99
Dow 30 Fund $12,255.08 $12,747.73 $12,384.68 $12,614.08 $12,052.36 $ 12,517.46 $12,709.43
DIJA Index $12,267.22 $12,759.93 $12,399.21 $12,631.30 $12,072.40 $ 12,537.48 $12,734.36
12/31/99 1/31/00 2/29/00 3/31/00 4/30/00
Dow 30 Fund $13,438.66 $12,790.28 $11,857.76 $ 12,804.64 $12,587.58
DIJA Index $13,474.72 $12,827.23 $11,897.54 $ 12,844.39 $12,630.85
</TABLE>
----------------------------------------------------------
| Dow 30 Fund Average Annual Total Return as of 4/30/00: |
| One Year: 0.76% |
| Since Inception (3/30/98): 11.72% |
----------------------------------------------------------
Note: Performance data quoted represents past performance. As with all
investments, past performance is no guarantee of future results. The
return is based on a constant investment throughout the period, includes
reinvestment of dividends and reflects a net return to the shareholders
after all expenses, inclusive of fee waivers. Without this waiver, the
Fund's total return would have been lower. The returns shown for the DJIA
reflect the reinvestment of dividends, but do not include any expenses,
since an index has none. It is not possible to invest in an index. The
investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
The price performance of each of the DJIA stocks during the six months ended
April 30, 2000 is shown in the chart on the following page. As can be seen in
the chart, there was an unusually wide disparity in performance among the
individual stocks. During the period, Home Depot executed a 3-for-2 stock split.
--------------------------------------------------------------------------------
31
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Price Price
Appreciation* DJIA Component Appreciation* DJIA Component
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
82.3% Hewlett-Packard Co. -2.6% American Express Co.
-------------------------------------------------------------------------------------------------------------------
64.2% The Walt Disney Co. -7.6% McDonald's Corp.
-------------------------------------------------------------------------------------------------------------------
63.8% Intel Corp. -9.0% Minnesota Mining & Mfg Co.
-------------------------------------------------------------------------------------------------------------------
33.3% General Motors Corp. -12.6% Merck & Co., Inc.
-------------------------------------------------------------------------------------------------------------------
16.0% General Electric Co. -13.2% Philip Morris Cos. Inc.
-------------------------------------------------------------------------------------------------------------------
13.5% Int'l Business Machines Corp. -13.8% The Boeing Co.
-------------------------------------------------------------------------------------------------------------------
11.4% Home Depot Inc. -14.0% SBC Communications Inc.
-------------------------------------------------------------------------------------------------------------------
9.8% Citigroup Inc. -18.9% Eastman Kodak Co.
-------------------------------------------------------------------------------------------------------------------
6.8% Alcoa Inc. -20.2% The Coca-Cola Company
-------------------------------------------------------------------------------------------------------------------
4.9% Exxon Mobil Corp. -21.2% Johnson & Johnson
-------------------------------------------------------------------------------------------------------------------
2.8% United Technologies Corp. -24.6% Microsoft Corp.
-------------------------------------------------------------------------------------------------------------------
-0.1% AT&T Corp. -26.4% E.I. du Pont de Nemours and Co.
-------------------------------------------------------------------------------------------------------------------
-1.6% Honeywell International -28.6% Caterpillar Inc.
-------------------------------------------------------------------------------------------------------------------
-1.9% J.P. Morgan & Co., Inc. -30.2% International Paper Co.
-------------------------------------------------------------------------------------------------------------------
-2.3% Wal-Mart Stores, Inc. -43.1% The Proctor & Gamble Co.
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(C) 2000 Dow Jones & Company
Notes: *Percentages reflect each stock's price appreciation only. They do not
include reinvested dividends. The stocks are listed from the best
performer to the worst over the most recent six month period.
Performance quoted represents past performance and is not a guarantee of
future results.
The U.S. stock market's performance over the Fund's most recent semiannual
period was marked by strong volatility. Investor sentiment was influenced by the
debate on "New Economy" versus "Old Economy" stocks as well as a renewed focus
on stock valuations relative to companies' earnings. Another critical factor
influencing the market was continued worry about rising interest rates resulting
from the Federal Reserve Open Market Committee's ("Federal Reserve") attempt to
prevent the rise of inflation from an overheating domestic economy. While the
U.S. economy expanded at a strong pace over the last two calendar quarters,
growing at annualized rates of 7.3% and 5.4% respectively, the continuation of
this exceptionally strong growth may be doubtful in the face of continued
interest rate hikes. The impact of the Federal Reserve's interest rate increases
on corporate earnings, stock prices, economic growth and inflation are uncertain
at this point in time.
Looking forward to the next twelve months, the market's direction will likely be
primarily affected by interest rates, inflationary trends, corporate profits,
and money investment flows. In light of today's economic and market
environments, we believe the overall quality and underlying financial strength
of the companies comprising the DJIA can provide a solid investment foundation
for our shareholders' investments in the Fund.
We welcome additional investments into the Fund, and provide a number of
attractive ways to invest or add to current positions. The minimum initial
investment is $1,000 and $100 for subsequent purchases, although these minimums
may be waived for existing customers of TD Waterhouse Investor Services, Inc.
("TD Waterhouse"). For TD Waterhouse IRA accounts, there are no minimum or
subsequent investment requirements. A periodic investment plan is also available
which requires a minimum investment of $100 monthly or $300 quarterly. Keep in
mind, however, that periodic investing neither guarantees a profit nor protects
against a loss in a declining market. You may contact TD Waterhouse's mutual
funds service department at 1-800-457-6516 or your local branch office for more
information.
Sincerely,
/s/Frank J. Petrilli
Frank J. Petrilli
President and Chief Operating Officer
TD Waterhouse Group, Inc.
June 8, 2000
An investment in the Fund is neither FDIC-insured nor guaranteed by the U. S.
Government and is not a deposit or obligation guaranteed by any bank and is
subject to investment risk, including possible loss of the principal amount
invested.
Distributor: Funds Distributor, Inc.
-------------------------------------------------------------------------------
32
<PAGE>
--------------------------------------------------------------------------------
--------------------------------
TABLE OF CONTENTS
--------------------------------
Schedule of Investments 34
Statement of Assets and Liabilities 35
Statement of Operations 36
Statement of Changes in Net Assets 37
Financial Highlights 38
Notes to Financial Statements 39
--------------------------------------------------------------------------------
33
<PAGE>
TD WATERHOUSE DOW 30 FUND
SCHEDULE OF INVESTMENTS
April 30, 2000
(Unaudited)
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCKS
Alcoa Inc. 82,877 $ 5,376,645
American Express Co. 82,877 12,436,730
AT&T Corp. 82,877 3,869,320
The Boeing Co. 82,877 3,289,181
Caterpillar Inc. 82,877 3,268,462
Citigroup Inc. 82,877 4,926,002
The Coca-Cola Company 82,877 3,900,399
E.I. du Pont de Nemours and Co. 82,877 3,931,478
Eastman Kodak Co. 82,877 4,635,932
Exxon Mobil Corp. 82,877 6,438,507
General Electric Co. 82,877 13,032,408
General Motors Corp. 82,877 7,759,359
Hewlett-Packard Co. 82,877 11,188,395
Home Depot Inc. 82,877 4,646,292
Honeywell International 82,877 4,641,112
Intel Corp. 82,877 10,509,839
International Business Machines Corp. 82,877 9,251,145
International Paper Co. 82,877 3,045,730
J.P. Morgan & Co., Inc. 82,877 10,639,335
Johnson & Johnson 82,877 6,837,352
McDonald's Corp. 82,877 3,159,686
Merck & Co., Inc. 82,877 5,759,952
Microsoft Corp.(A) 82,877 5,780,671
Minnesota Mining & Manufacturing Co. 82,877 7,168,861
Philip Morris Cos. Inc. 82,877 1,812,934
The Proctor & Gamble Co. 82,877 4,941,541
SBC Communications Inc. 82,877 3,631,049
United Technologies Corp. 82,877 5,153,913
Wal-Mart Stores, Inc. 82,877 4,589,314
The Walt Disney Co. 82,877 3,589,610
-----------
TOTAL COMMON STOCKS (cost $165,277,189)--99.5% 179,211,153
-----------
OTHER (cost $1,323,971)--0.8%
DiamondsSM Trust, Series 1 12,558 1,349,200
-----------
TOTAL INVESTMENTS (cost $166,601,160)--100.3% 180,560,353
OTHER ASSETS AND LIABILITIES, NET--(0.3%) (453,135)
-----------
NET ASSETS--100.0% $180,107,218
============
(A) Non-income producing security
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
34
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
(Unaudited)
<S> <C>
ASSETS
Investments in securities, at value (cost $166,601,160) $180,560,353
Dividends receivable 113,731
Receivable for capital shares sold 187,180
Receivable for investment securities sold 632,577
Receivable from Investment Manager & affiliates (Note 3) 29,936
Other assets 2,058
-------------
TOTAL ASSETS 181,525,835
LIABILITIES
Bank overdraft 1,052,331
Payable for investment securities purchased 1,842
Payable for capital shares redeemed 322,274
Other accrued expenses 42,170
-------------
TOTAL LIABILITIES 1,418,617
-------------
NET ASSETS $180,107,218
=============
Net assets consist of:
Paid-in capital $163,270,202
Undistributed net investment income 322
Accumulated net realized gains from security transactions 2,877,501
Net unrealized appreciation on investments 13,959,193
-------------
Net assets, at value $180,107,218
=============
Shares of beneficial interest outstanding 16,784,519
=============
Net asset value, redemption price and offering price per share (Note 2) $ 10.73
=============
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
------------------------------------------------------------------------------------------------------------------------------------
35
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2000
(Unaudited)
<S> <C>
INVESTMENT INCOME
Dividend income $ 1,305,340
Interest income 4,026
------------
TOTAL INVESTMENT INCOME 1,309,366
------------
EXPENSES
Shareholder servicing fees (Note 3) 226,376
Investment management fees (Note 3) 181,100
Transfer agent fees (Note 3) 45,276
Shareholder reports and mailing 71,077
Custody fees (Note 2) 39,113
Registration fees 35,193
Trustees' fees and expenses 14,667
Professional fees 12,808
Other expenses 12,352
------------
TOTAL EXPENSES 637,962
Fees waived/expenses reimbursed by the Investment Manager
and its affiliates (Note 3) (411,589)
------------
NET EXPENSES 226,373
------------
NET INVESTMENT INCOME 1,082,993
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 3,460,090
Net change in unrealized appreciation/depreciation on investments (3,185,406)
------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 274,684
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,357,677
============
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
------------------------------------------------------------------------------------------------------------------------------------
36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended Year
April 30, Ended
2000 October 31,
(Unaudited) 1999
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,082,993 $ 1,622,456
Net realized gains from security transactions 3,460,090 2,545,555
Net change in unrealized appreciation/depreciation on investments (3,185,406) 17,310,316
-------------- -------------
Net increase in net assets from operations 1,357,677 21,478,327
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,082,671) (1,622,456)
From net realized gains on security transactions (3,057,262) --
In excess of net investment income -- (2,724)
-------------- -------------
Total distributions to shareholders (4,139,933) (1,625,180)
-------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 69,667,666 155,677,326
Shares issued in reinvestment of dividends 4,139,933 1,625,180
Payments for shares redeemed (66,229,570) (64,055,262)
-------------- -------------
Net increase in net assets from capital share transactions 7,578,029 93,247,244
-------------- -------------
TOTAL INCREASE IN NET ASSETS 4,795,773 113,100,391
NET ASSETS:
Beginning of period 175,311,445 62,211,054
-------------- -------------
End of period $180,107,218 $175,311,445
============== =============
Undistributed net investment income $ 322 $ --
============== =============
CAPITAL STOCK TRANSACTIONS:
Shares sold 6,431,732 15,233,177
Shares issued for dividends reinvested 382,177 159,759
Shares redeemed (6,370,240) (6,294,226)
-------------- -------------
Net increase in shares outstanding 443,669 9,098,710
============== =============
PLEASE SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
------------------------------------------------------------------------------------------------------------------------------------
37
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each period indicated. This information has been derived from
the Fund's financial statements.
Six Months
Ended Year Period
April 30, Ended Ended
2000 October 31, October 31,
(Unaudited) 1999 1998*
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 10.73 $ 8.59 $ 8.78
-------------- ----------------- --------------
INVESTMENT OPERATIONS
Net investment income 0.06 0.14 0.08
Net realized and unrealized gains (losses)
on investments 0.19 2.14 (0.19)
-------------- ----------------- --------------
TOTAL FROM INVESTMENT OPERATIONS 0.25 2.28 (0.11)
-------------- ----------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income (0.06) (0.14) (0.08)
Distributions from capital gains (0.19) -- --
-------------- ----------------- --------------
TOTAL DISTRIBUTIONS (0.25) (0.14) (0.08)
Net asset value, end of period $ 10.73 $ 10.73 $ 8.59
============== ================= ==============
RATIOS
Ratio of net expenses to average net assets 0.25%(A) 0.25% 0.25%(A)
Ratio of net investment income to
average net assets 1.20%(A) 1.37% 1.48%(A)
Decrease reflected in above expense ratio
due to waivers/reimbursements by the
Investment Manager and its affiliates (Note 3) 0.46%(A) 0.43% 0.55%(A)
SUPPLEMENTAL DATA
Portfolio turnover rate 26%(A) 47% 8%(A)
Total investment return 0.60%(B) 26.72%(B) (1.19%)(B)
Net assets, end of period $ 180,107,218 $ 175,311,445 $ 62,211,054
=============== ================= ==============
Average net assets $ 181,954,112 $ 118,399,466 $ 28,460,853
=============== ================= ==============
<FN>
* The Fund commenced operations on March 31, 1998.
(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.
------------------------------------------------------------------------------------------------------------------------------------
38
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
NOTE 1 -- ORGANIZATION
TD Waterhouse Trust (the "Trust") was organized as a Delaware business trust on
August 6, 1999. The Trust 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 beneficial interest of the Trust
are registered under the Securities Act of 1933, as amended. The investment
objective of the Fund is to seek to track the total return of the Dow Jones
Industrial Average before Fund expenses. The Fund commenced operations on March
31, 1998 and became part of the Trust on November 5, 1999. It is a
non-diversified portfolio.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Fund's significant accounting policies:
Share Valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
are equal to the net asset value per share.
Securities Valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(normally 4:00 p.m., Eastern Time). Securities which are traded over-the-counter
are valued at the last sales price, if available, otherwise, at the last quoted
bid price. Securities traded on a national stock exchange are valued based upon
the closing price on the principal exchange where the security is traded.
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. Dividend income is
recorded on the ex-dividend date. Under the terms of the custody agreement, the
Fund 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,
if any, are declared daily and paid monthly. 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.
Expenses -- Expenses directly attributable to the Fund are charged to the Fund's
operations.
--------------------------------------------------------------------------------
39
<PAGE>
--------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
(CONTINUED)
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 the Fund'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 the Fund so
qualifies, and distributes at least 90% of its taxable net income, the Fund (not
the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
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 the
Fund, the Fund pays the Investment Manager an annual investment management fee,
equal to .20 of 1% of the average daily net assets of the Fund. The Investment
Manager currently anticipates that it will limit the Fund's overall expense
ratio to no more than 0.25% on an annual basis; however, effective January 1,
2000 the investment manager may limit expenses on an annual basis to no more
than 0.45%. All expense limitations are voluntary. For the six months ended
April 30, 2000, the Investment Manager voluntarily waived $164,636 of its
investment management fee.
TD Waterhouse Investor Securities, 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, the Investment Manager (not the Fund) pays TD
Waterhouse a monthly fee at an annual rate of .10 of 1% of the Fund'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 the Fund pay TD
Waterhouse, a monthly fee at an annual rate of up to .25 of 1% of average daily
net assets. For the six months ended April 30, 2000, TD Waterhouse voluntarily
waived $205,795 of its shareholder servicing fee for the Fund.
The Fund has entered into a Transfer Agency and Dividend Disbursing Agency
Agreement with National Investor Services Corp. (the "Transfer Agent"), an
affiliate of the Investment Manager, to perform transfer and dividend disbursing
agency-related services. For such services, the Fund pays the Transfer Agent a
monthly fee at an annual rate of .05 of 1% of average daily net assets. For the
six months ended April 30, 2000, the Transfer Agent voluntarily waived $41,159
of its transfer agent fee for the Fund.
--------------------------------------------------------------------------------
40
<PAGE>
--------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
(CONTINUED)
Each Trustee who is not an "interested person" ("independent Trustee") as
defined in the Act, who serves on the Board of Trustees of one or more
portfolios in the "Fund Complex" (which includes the Trust, TD Waterhouse Family
of Funds, Inc. 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
Trustees/Directors 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.
The Fund placed all of its portfolio transactions with TD Waterhouse. There were
no commissions paid to TD Waterhouse for the six months ended April 30, 2000.
NOTE 4 - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investment securities, other
than short-term investments, amounted to $27,975,743 and $23,214,327
respectively, for the six months ended April 30, 2000.
The cost of portfolio investments for Federal income tax purposes was
$166,601,160 as of April 30, 2000. Accordingly, net unrealized appreciation for
Federal income tax purposes aggregated $13,959,193, consisting of $29,159,523
gross unrealized appreciation and $15,200,330 gross unrealized depreciation.
--------------------------------------------------------------------------------
| This Report has been prepared for shareholders and may be distributed |
| to others only if preceded or accompanied by a current prospectus. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
41
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