2000
Shareholder Report
TD Waterhouse
Family of Funds, Inc.
TD Waterhouse Dow 30 Fund
[LOGO]
<PAGE>
2000
ANNUAL REPORT
October 31, 2000
TD Waterhouse Family of Funds Inc.
Five portfolios to
choose from:
Money Market
o
US Government
o
Municipal
o
California Municipal
o
New York Municipal
<PAGE>
<TABLE>
<CAPTION>
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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 President and CEO of Vice President and Secretary
Management, Inc. 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, Administration
& Operations
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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</TABLE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
DEAR SHAREHOLDER:
I am pleased to provide you with the TD Waterhouse Family of Funds (the "Fund")
annual report for the fiscal year ended October 31, 2000. Our family has grown
this year to include the California and New York Municipal Money Market
Portfolios ("California Portfolio" or "New York Portfolio"), which commenced
operations on September 1, 2000.
During the year, each of the five Portfolios attempted to provide maximum
current income from high quality money market securities while maintaining a
conservative investment portfolio to ensure safety of principal. By October 31,
2000, assets in the five Portfolios increased to approximately $7.9 billion.
PORTFOLIO RESULTS*
For the fiscal year ended October 31, 2000, the five Portfolios had the
following yields and returns.**
<TABLE>
<CAPTION>
Tax-
Tax- Equivalent Tax-
Equivalent Seven-Day Seven-Day Equivalent
Seven-Day Seven-Day Effective Effective Average Average
Yield at Yield at Yield at Yield at Annual Annual
10/31/00 10/31/00(1) 10/31/00 10/31/00(1) Return Return(1)
-------- ----------- -------- ----------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Money Market Portfolio 6.00% -- 6.17% -- 5.74% --
U.S. Government Portfolio 5.87% -- 6.03% -- 5.56% --
Municipal Portfolio 3.67% 5.73% 3.73% 5.83% 3.45% 5.39%
California Portfolio 3.09% 4.83% 3.14% 4.91% 2.96% 4.63%
New York Portfolio 3.50% 5.47% 3.56% 5.56% 3.54% 5.53%
</TABLE>
COMMENTARY
The year 2000 has been a difficult one for the financial markets. After a decade
of unprecedented economic growth, the stock market and the interest rate markets
have endured significant turmoil. Over the last twelve months the Federal
Reserve has raised the Fed Funds target rate 1.25 percentage points to 6.5%.
This was done in an attempt to provide a "soft landing" for an economy at risk
of expanding at an inflationary pace. During this period of tightening, various
economic indicators have vacillated, causing mixed signals to the financial
markets. The result has been volatility in interest rates and the stock market.
The Federal Reserve appears to be moving to a neutral stance regarding
inflation; a result of diminished concerns that a 4% unemployment rate will lead
to accelerating wage increases. In light of this, our current economic state
remains healthy, and there are reasonable odds that we can maintain a relatively
non-inflationary growth rate.
Our strategy for the Fund is to maintain a neutral maturity structure while
keeping a watchful eye on the economy. We are looking for specific economic
signs which would provide the basis to lengthen or shorten the portfolios'
maturity structure in order to maximize our shareholders' returns, while
maintaining a conservative bias. In short, liquidity and safety of principal
will continue as the overall guidelines for these Portfolios.
We look forward to continuing to meet your expanding investment needs in the
years to come.
Sincerely,
/s/Frank J. Petrilli
Frank J. Petrilli
President and Chief Operating Officer
TD Waterhouse Group, Inc.
December 12, 2000
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*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 yields and returns are based on a constant investment throughout the
period, include reinvestment of dividends, and reflect a net return to the
shareholder after all expenses, inclusive of fee waivers. For the fiscal year
ended October 31, 2000, the Investment Manager and its affiliates waived a
portion of their fees for the Money Market, U.S. Government, Municipal,
California and New York Portfolios. The California and New York Portfolios
commenced operations on September 1, 2000. Without these fee waivers in effect,
the seven-day yields and seven-day effective yields at October 31, 2000 and
average annual returns, would have been:
<TABLE>
<CAPTION>
Seven-Day Average
Seven-Day Yield Effective Yield Annual
at October 31, 2000 at October 31, 2000 Return
------------------- ------------------- ------
<S> <C> <C> <C>
Money Market Portfolio 5.83% 6.00% 5.57%
U.S. Government Portfolio 5.68% 5.84% 5.37%
Municipal Portfolio 3.46% 3.52% 3.24%
California Municipal Money Market Portfolio 2.59% 2.64% 2.46%
New York Municipal Money Market Portfolio 2.93% 2.99% 2.97%
The tax equivalent seven-day yields and seven-day effective yields at October
31, 2000 and tax equivalent average annual returns for the Municipal, California
and New York Portfolios would have been:
Tax-Equivalent
Tax-Equivalent Seven-Day Tax-Equivalent
Seven-Day Yield at Effective Yield at Average
October 31, 2000(1) October 31, 2000(1) Annual Return(1)
------------------- ------------------- ----------------
Municipal Portfolio 5.41% 5.50% 5.06%
California Portfolio 4.05% 4.13% 3.84%
New York Portfolio 4.58% 4.67% 4.64%
The seven-day yield more closely reflects the current earnings of a Portfolio
than the average annual return. Yield will fluctuate.
</TABLE>
(1) Tax equivalent return and yield at 36% marginal federal income tax rate.
Distributor: Funds Distributor, Inc.
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Table of Contents
Statements of Assets and Liabilities ...................................... 8
Statements of Operations .................................................. 9
Statements of Changes in Net Assets ....................................... 10
Financial Highlights ...................................................... 12
Notes to Financial Statements ............................................. 16
Money Market Portfolio
Schedule of Investments ................................................ 19
U.S. Government Portfolio
Schedule of Investments ................................................ 24
Municipal Portfolio
Schedule of Investments ................................................ 26
California Municipal Money Market Portfolio
Schedule of Investments ................................................ 32
New York Municipal Money Market Portfolio
Schedule of Investments ................................................ 34
Notes to Schedules of Investments ......................................... 35
Report of Independent Auditors ............................................ 36
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TD WATERHOUSE FAMILY OF FUNDS, INC.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 2000
California New York
Municipal Municipal
Money U.S. Money Money
Market Government Municipal Market Market
Portfolio Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value
(including repurchase agreements of
$213,817,000, $245,104,000, $0, $0,
and $0, respectively) (Note 2) $6,316,020,037 $ 996,354,686 $ 527,530,524 $ 213,066,340 $ 100,167,586
Cash 225,125 215,184 -- 88,882 48,523
Interest receivable 35,680,160 4,795,456 3,695,614 1,560,893 565,627
-------------- -------------- -------------- -------------- --------------
TOTAL ASSETS 6,351,925,322 1,001,365,326 531,226,138 214,716,115 100,781,736
LIABILITIES
Bank overdraft -- -- 15,959 -- --
Dividends payable to shareholders 1,007,567 143,691 51,997 18,131 9,583
Payable for securities purchased 190,898,763 108,799,461 7,207,773 -- --
Payable to Investment Manager and its
affiliates (Note 3) 3,615,903 563,122 328,841 77,062 30,239
Accrued expenses and other liabilities 539,600 59,714 53,668 75,004 36,108
-------------- -------------- -------------- -------------- --------------
TOTAL LIABILITIES 196,061,833 109,565,988 7,658,238 170,197 75,930
-------------- -------------- -------------- -------------- --------------
NET ASSETS $6,155,863,489 $ 891,799,338 $ 523,567,900 $ 214,545,918 $ 100,705,806
============== ============== ============== ============== ==============
Net assets consist of:
Paid-in capital $6,156,093,207 $ 891,800,844 $ 523,577,576 $ 214,548,479 $ 100,705,932
Accumulated net realized losses from
security transactions (229,718) (1,506) (9,676) (2,561) (126)
-------------- -------------- -------------- -------------- --------------
Net assets, at value $6,155,863,489 $ 891,799,338 $ 523,567,900 $ 214,545,918 $ 100,705,806
============== ============== ============== ============== ==============
Shares outstanding ($.0001 par value
common stock, 50 billion, 20 billion,
10 billion, 10 billion and
10 billion shares authorized,
respectively) 6,156,093,207 891,800,844 523,577,576 214,548,479 100,705,932
============== ============== ============== ============== ==============
Net asset value, redemption price and
offering price per share (Note 2) $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ============== ==============
</TABLE>
Please see accompanying notes to financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Year Ended October 31, 2000
California New York
Municipal Municipal
Money U.S. Money Money
Market Government Municipal Market Market
Portfolio Portfolio Portfolio Portfolio* Portfolio*
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 355,440,725 $ 55,545,264 $ 20,921,387 $ 1,348,945 $ 711,224
-------------- -------------- -------------- -------------- --------------
EXPENSES
Investment management fees (Note 3) 18,520,525 3,155,017 1,770,389 131,020 59,471
Shareholder servicing fees (Note 3) 13,803,324 2,253,584 1,264,563 93,586 42,480
Transfer agent fees (Note 3) 11,042,659 1,802,867 1,011,651 74,869 33,984
Administration fees (Note 3) 5,521,330 901,433 505,825 37,434 16,992
Shareholder reports and mailing 848,566 99,890 49,945 13,802 10,545
Registration fees 562,385 95,251 100,174 60,385 28,824
Custody fees (Note 2) 307,790 57,926 32,821 2,322 1,041
Professional fees 95,262 16,131 10,791 7,810 6,534
Directors' fees 9,119 14,744 9,119 2,008 2,008
Other expenses 147,135 31,937 38,667 8,060 6,296
-------------- -------------- -------------- -------------- --------------
TOTAL EXPENSES 50,858,095 8,428,780 4,793,945 431,296 208,175
Fees waived/expenses reimbursed by
the Investment Manager and its
affiliates (Note 3) (9,447,053) (1,668,005) (1,050,784) (187,972) (97,728)
-------------- -------------- -------------- -------------- --------------
NET EXPENSES 41,411,042 6,760,775 3,743,161 243,324 110,447
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME 314,029,683 48,784,489 17,178,226 1,105,621 600,777
-------------- -------------- -------------- -------------- --------------
NET REALIZED LOSSES FROM
SECURITY TRANSACTIONS (172,114) (348) (5,183) (2,561) (126)
-------------- -------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 313,857,569 $ 48,784,141 $ 17,173,043 $ 1,103,060 $ 600,651
============== ============== ============== ============== ==============
</TABLE>
*Portfolio commenced operations on September 1, 2000.
Please see accompanying notes to financial statements.
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<TABLE>
<CAPTION>
TD WATERHOUSE FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Money U.S.
Market Government
Portfolio Portfolio
Year Year Year Year
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2000 1999 2000 1999
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 314,029,683 $ 179,330,810 $ 48,784,489 $ 29,879,648
Net realized gains (losses) from
security transactions (172,114) (54,821) (348) 2,543
-------------- -------------- -------------- -------------
Net increase in net assets from operations 313,857,569 179,275,989 48,784,141 29,882,191
-------------- -------------- -------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (314,029,683) (179,330,810) (48,784,489) (29,879,648)
-------------- -------------- -------------- -------------
CAPITAL SHARE TRANSACTIONS
($1.00 per share):
Proceeds from shares sold 34,307,024,019 21,183,221,750 4,560,320,296 2,840,728,249
Shares issued in reinvestment
of dividends 314,863,794 178,243,250 48,988,109 29,660,883
Payments for shares redeemed (33,112,120,801) (19,672,867,482) (4,598,228,972) (2,527,075,190)
-------------- -------------- -------------- -------------
Net increase in net assets from
capital share transactions 1,509,767,012 1,688,597,518 11,079,433 343,313,942
-------------- -------------- -------------- -------------
TOTAL INCREASE IN NET ASSETS 1,509,594,898 1,688,542,697 11,079,085 343,316,485
NET ASSETS:
Beginning of period 4,646,268,591 2,957,725,894 880,720,253 537,403,768
-------------- -------------- -------------- -------------
End of period $6,155,863,489 $4,646,268,591 $ 891,799,338 $ 880,720,253
============== ============== ============== =============
</TABLE>
Please see accompanying notes to financial statements.
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<TABLE>
<CAPTION>
TD WATERHOUSE FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(CONTINUED)
California New York
Municipal Municipal
Money Money
Municipal Market Market
Portfolio Portfolio Portfolio
Year Year Period Period
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2000 1999 2000* 2000*
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 17,178,226 $ 11,246,206 $ 1,105,621 $ 600,777
Net realized gains (losses) from
security transactions (5,183) (3,652) (2,561) (126)
-------------- -------------- -------------- -------------
Net increase in net assets from operations 17,173,043 11,242,554 1,103,060 600,651
-------------- -------------- -------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (17,178,226) (11,246,206) (1,105,621) (600,777)
-------------- -------------- -------------- -------------
CAPITAL SHARE TRANSACTIONS
($1.00 per share):
Proceeds from shares sold 2,261,209,517 1,668,809,031 373,855,182 175,074,126
Shares issued in reinvestment
of dividends 17,240,699 11,184,591 1,087,491 591,195
Payments for shares redeemed (2,242,013,827) (1,573,943,722) (160,394,194) (74,959,389)
-------------- -------------- -------------- -------------
Net increase in net assets from
capital share transactions 36,436,389 106,049,900 214,548,479 100,705,932
-------------- -------------- -------------- -------------
TOTAL INCREASE IN NET ASSETS 36,431,206 106,046,248 214,545,918 100,705,806
NET ASSETS:
Beginning of period 487,136,694 381,090,446 -- --
-------------- -------------- -------------- -------------
End of period $ 523,567,900 $ 487,136,694 $ 214,545,918 $ 100,705,806
============== ============== ============== =============
</TABLE>
* Portfolio commenced operations on September 1, 2000.
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 the Fund's financial statements.
<TABLE>
<CAPTION>
Money Market Portfolio
Year Year Year Year Period
Ended Ended Ended Ended Ended
October 31, October 31, October 31, October 31, October 31,
2000 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 0.056 0.044 0.049 0.048 0.041
--------------- -------------- --------------- -------------- --------------
Distributions from net investment
income (0.056) (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% 0.71% 0.75% 0.83% 0.79%(A)
Ratio of net investment income to
average net assets 5.69% 4.44% 4.92% 4.79% 4.64%(A)
Decrease reflected in above expense
ratio due to waivers/reimbursements
by the Investment Manager and its
affiliates (Note 3) 0.17% 0.21% 0.15% 0.08% 0.13%(A)
SUPPLEMENTAL DATA
Total investment return (B) 5.74% 4.54% 5.04% 4.89% 4.82%(A)
Net assets, end of period $ 6,155,863,489 $ 4,646,268,591 $ 2,957,725,894 $1,787,786,777 $1,342,610,086
=============== =============== =============== ============== ==============
Average net assets $ 5,519,126,965 $ 4,035,269,586 $ 2,302,804,288 $1,592,722,254 $1,104,558,438
=============== =============== =============== ============== ==============
</TABLE>
* 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.
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 the Fund's financial statements.
<TABLE>
<CAPTION>
U.S. Government Portfolio
Year Year Year Year Period
Ended Ended Ended Ended Ended
October 31, October 31, October 31, October 31, October 31,
2000 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 0.054 0.044 0.048 0.047 0.041
-------------- -------------- -------------- -------------- --------------
Distributions from net investment
income (0.054) (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% 0.75% 0.78% 0.81% 0.73%(A)
Ratio of net investment income to
average net assets 5.41% 4.40% 4.80% 4.69% 4.64%(A)
Decrease reflected in above expense
ratio due to waivers/reimbursements
by the Investment Manager and its
affiliates (Note 3) 0.19% 0.19% 0.11% 0.07% 0.18%(A)
SUPPLEMENTAL DATA
Total investment return (B) 5.56% 4.47% 4.91% 4.79% 4.82%(A)
Net assets, end of period $ 891,799,338 $ 880,720,253 $ 537,403,768 $ 402,685,311 $ 371,046,770
============== ============== ============== ============== ==============
Average net assets $ 901,031,857 $ 678,643,185 $ 457,821,528 $ 398,635,777 $ 293,708,330
============== ============== ============== ============== ==============
</TABLE>
* 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.
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 the Fund's financial statements.
<TABLE>
<CAPTION>
Municipal Portfolio
Year Year Year Year Period
Ended Ended Ended Ended Ended
October 31, October 31, October 31, October 31, October 31,
2000 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 0.034 0.026 0.029 0.030 0.026
-------------- -------------- -------------- -------------- --------------
Distributions from net investment
income (0.034) (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% 0.74% 0.72% 0.74% 0.62%(A)
Ratio of net investment income to
average net assets 3.40% 2.56% 2.93% 2.97% 2.90%(A)
Decrease reflected in above expense
ratio due to waivers/reimbursements
by the Investment Manager and its
affiliates (Note 3) 0.21% 0.21% 0.13% 0.10% 0.23%(A)
SUPPLEMENTAL DATA
Total investment return (B) 3.45% 2.59% 2.98% 3.01% 3.05%(A)
Net assets, end of period $ 523,567,900 $ 487,136,694 $ 381,090,446 $ 265,623,696 $ 226,253,394
============== ============== ============== ============== ===============
Average net assets $ 505,599,538 $ 439,705,095 $ 312,133,086 $ 252,444,536 $ 196,592,413
============== ============== ============== ============== ===============
</TABLE>
* 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.
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 the Fund's financial statements.
<TABLE>
<CAPTION>
California New York
Municipal Municipal
Money Market Money Market
Portfolio Portfolio
Period Period
Ended Ended
October 31, October 31,
2000* 2000*
-------------- ---------------
<S> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of period $ 1.000 $ 1.000
-------------- ---------------
Net investment income 0.005 0.006
-------------- ---------------
Distributions from net investment
income (0.005) (0.006)
-------------- ---------------
Net asset value, end of period $ 1.000 $ 1.000
============== ===============
RATIOS
Ratio of expenses to average net assets 0.65% (A) 0.65% (A)
Ratio of net investment income to
average net assets 2.95% (A) 3.53% (A)
Decrease reflected in above expense
ratio due to waivers/reimbursements
by the Investment Manager and its
affiliates (Note 3) 0.50% (A) 0.57% (A)
SUPPLEMENTAL DATA
Total investment return (B) 2.96% (A) 3.54% (A)
Net assets, end of period $ 214,545,918 $ 100,705,806
============== ===============
Average net assets $ 224,605,169 $ 101,951,165
============== ===============
</TABLE>
* Portfolio commenced operations on September 1, 2000.
(A) Annualized.
(B) Total investment return is calculated assuming a purchase of shares on the
first day and a sale on the last day of the period reported and includes
reinvestment of dividends.
Please see accompanying notes to financial statements.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS-- OCTOBER 31, 2000
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
five investment portfolios. These financial statements relate to five money
market portfolios of the Fund (each a "Portfolio" and collectively the
"Portfolios"), each of which is a diversified investment portfolio, with the
exception of the California Municipal Money Market Portfolio and the New York
Municipal Money Market Portfolio, which are non-diversified. The investment
objective of each 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. The California Municipal Money Market
Portfolio and New York Municipal Money Market Portfolio offer investors
Federally tax-exempt income by investing primarily in municipal securities,
along with tax-exempt income in their respective states.
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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16
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS-- OCTOBER 31, 2000
(CONTINUED)
Expenses -- Expenses directly attributable to each Portfolio are charged to that
Portfolio's operations. Expenses that 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 accounting principles generally accepted in the United States, which may
require the use of management estimates and assumptions. Actual results could
differ from these estimates.
Federal Income Taxes -- It is each Portfolio's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Portfolio so
qualifies, and distributes at least 90% of its taxable net income, the Portfolio
(not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Portfolio's intention to declare as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ended October 31) plus undistributed amounts
from prior years.
As of October 31, 2000, for Federal income tax purposes the following Portfolios
have capital loss carryforwards available to offset future capital gains, if
any:
Amount Expiring
Money Market Portfolio $ 54,821 2007
172,114 2008
U.S. Government Portfolio 1,396 2006
348 2008
Municipal Portfolio 841 2005
3,652 2007
5,183 2008
California Municipal Money Market Portfolio 2,561 2008
New York Municipal Money Market Portfolio 126 2008
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 year ended October 31, 2000, the
Investment Manager voluntarily waived $3,695,607, $648,668, $408,638, $73,100
and $38,005 of its investment management fee for the Money Market Portfolio, the
U.S. Government Portfolio, the Municipal Portfolio, the California Municipal
Money Market Portfolio and the New York Municipal Money Market 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 year ended October 31, 2000, TD Waterhouse voluntarily waived $1,101,810,
$185,334, $116,754, $20,886 and $10,859 of its administrative fee for the Money
Market Portfolio, the U.S. Government Portfolio, the Municipal Portfolio, the
California Municipal Money Market Portfolio and the New York Municipal Money
Market Portfolio, respectively.
--------------------------------------------------------------------------------
17
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS-- OCTOBER 31, 2000
(CONTINUED)
TD Waterhouse has been retained under a Shareholder Services Agreement to
perform certain shareholder services necessary for the operation of the Fund.
The shareholder service plan adopted by the Fund provides that each Portfolio
pays TD Waterhouse a monthly fee at an annual rate of .25 of 1% of average daily
net assets. For the year ended October 31, 2000, TD Waterhouse voluntarily
waived $2,446,017, $463,335, $291,885, $52,214 and $27,147 of its shareholder
servicing fees for the Money Market Portfolio, the U.S. Government Portfolio,
the Municipal Portfolio, the California Municipal Money Market Portfolio and the
New York Municipal Money Market 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 year ended October 31, 2000, the Transfer Agent voluntarily waived
$2,203,619, $370,668, $233,507, $41,772 and $21,717 of its transfer agency and
dividend disbursing agency fees for the Money Market Portfolio, the U.S.
Government Portfolio, the Municipal Portfolio, the California Municipal Money
Market Portfolio and the New York Municipal Money Market Portfolio,
respectively.
Each Director who is not an "interested person" as defined in the Act, who
serves on the Board of Directors/Trustees of one or more investment companies 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 $15,000, payable quarterly,
2. a supplemental annual retainer of $6,000, if serving on the Board of
Directors/Trustees of two investment companies in the Fund Complex,
3. an additional supplemental annual retainer of $2,500, if serving on the
Board of Directors/Trustees of three or more investment companies in the
Fund Complex, and
4. a meeting fee of $3,000 for each meeting attended.
Compensation is allocated among the companies and the respective portfolios.
NOTE 4 -- CREDIT RISK
The California Municipal Money Market Portfolio and the New York Municipal Money
Market Portfolio follow an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting each state and related
public bodies and municipalities may affect the ability of issuers within the
state to pay interest on, or repay principal of, municipal obligations held by
the California Municipal Money Market Portfolio and the New York Municipal Money
Market Portfolio.
NOTE 5-- FEDERAL TAX INFORMATION (UNAUDITED)
In accordance with Federal tax requirements, the Municipal, California Municipal
Money Market and New York Municipal Money Market Portfolios designate
substantially all the dividends paid from net investment income during the year
ended October 31, 2000 as "exempt-interest dividends." As required by Federal
regulations, shareholders will receive notification of their portion of the
Fund's taxable ordinary dividends and capital gains distributions paid (if any)
for the 2000 calendar year early in 2001.
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATIONS
ASSET-BACKED OBLIGATIONS--16.6%
$ 35,890,061 Americredit Automobile Receivables Trust, Ser 2000C, Cl. A-1, 6.73%, due 9/7/01
(GTY: FSA) 6.73 $ 35,890,061
60,000,000 Bavaria TRR Corp., due 11/3/00 (LOC: Bayerische Hypo -und Vereinsbank AG) (Note E) 6.53 59,978,233
79,710,000 Bavaria TRR Corp., due 11/27/00 (LOC: Bayerische Hypo -und Vereinsbank AG) (Note E) 6.55 79,335,230
85,000,000 CRC (Corporate Receivables Corporation), due 1/10/01 (Note E) 6.67 83,915,778
50,000,000 CXC Inc., due 1/9/01 (Note E) 6.68 49,370,375
25,000,000 Dakota Certificate Program, due 11/14/00 (Note E) 6.54 24,941,229
30,000,000 Dakota Certificate Program, due 1/12/01 (Note E) 6.66 29,606,400
29,999,866 IKON Receivables, LLC, Ser 2000-1, Cl. A-1, 7.00%, due 6/15/01 (GTY: AMBAC) 7.03 29,998,680
25,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.61%, due 11/6/00 (Notes A, E) 6.62 24,997,961
25,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.64%, due 11/13/00 (Notes A, E) 6.68 24,993,690
50,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.60%, due 11/20/00 (Notes A, E) 6.62 49,993,709
15,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.75%, due 11/20/00 (Notes A, E) 6.76 14,999,963
100,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.82%, due 11/20/00 (Notes A, E) 6.71 100,063,400
25,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.62%, due 11/27/00 (Notes A, E) 6.62 25,000,000
50,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.64%, due 11/28/00 (Notes A, E) 6.67 49,994,194
10,000,000 Liberty Lighthouse U.S. Capital Co., LLC, 6.96%, due 1/8/01 (Notes A, E) 6.81 10,013,445
21,117,000 Long Lane Master Trust IV, Ser. 99-A, due 11/6/00
(Counterparty: Fleet National Bank) (Note E) 6.57 21,097,848
35,672,000 Long Lane Master Trust IV, Ser. 99-A, due 11/7/00
(Counterparty: Fleet National Bank) (Note E) 6.57 35,633,177
39,992,000 Long Lane Master Trust IV, Ser. 99-A, due 11/8/00
(Counterparty: Fleet National Bank) (Note E) 6.65 39,941,144
32,969,000 Long Lane Master Trust IV, Ser. 99-A, due 11/29/00
(Counterparty: Fleet National Bank) (Note E) 6.57 32,801,554
15,600,000 Long Lane Master Trust IV, Ser. 99-A, due 11/30/00
(Counterparty: Fleet National Bank) (Note E) 6.58 15,517,814
39,353,000 Long Lane Master Trust IV, Ser. 99-A, due 1/26/01
(Counterparty: Fleet National Bank) (Note E) 6.72 38,731,594
18,854,000 Old Slip Funding Corp., due 12/1/00 (Counterparty: Bank of New York) (Note E) 6.55 18,751,717
75,000,000 RACERS Ser. 2000-15-MM-MBS, 6.64%, due 11/13/00
(Counterparty: Dresdner Bank AG) (Notes A, E) 6.64 75,000,000
25,000,000 RACERS Ser. 2000-10-MM Rabobank, 6.64%, due 11/22/00 (Counterparty: Rabobank Nederland)
(Notes A, E) 6.64 25,000,000
2,129,302 WFS Financial 2000A Owner Trust Notes Class A-1, 6.28%, due 3/20/01 (GTY: FSA) 6.28 2,129,302
20,518,704 WFS Financial 2000B Owner Trust Notes Class A-1, 6.91%, due 5/20/01 (GTY: FSA) 6.91 20,518,704
--------------
1,018,215,202
--------------
BROKER/DEALER OBLIGATIONS--10.1%
125,000,000 Bear Stearns Cos., Inc., 6.67%, due 11/6/00 (Note A) 6.62 125,011,008
25,000,000 Bear Stearns Cos., Inc., 6.77%, due 11/15/00 (Note A) 6.61 25,014,173
25,000,000 Bear Stearns Cos., Inc., 6.78%, due 11/21/00 (Note A) 6.63 25,002,000
5,000,000 Bear Stearns Cos., Inc., 6.79%, due 11/21/00 (Note A) 6.83 4,999,899
15,000,000 Goldman Sachs Group, Inc., 6.86%, due 11/21/00 (Notes A, E) 6.69 15,001,543
120,000,000 Goldman Sachs Group, Inc., 6.92%, due 1/15/01 (Notes A, E) 6.92 120,000,000
100,000,000 Goldman Sachs Group, Inc. (Put 2/5/01), 6.86%, due 2/5/01 (Notes A, E) 6.76 100,063,924
10,500,000 Morgan Stanley, Dean Witter, Discover & Co., 7.28%, due 11/13/00 (Note A) 6.68 10,502,130
150,000,000 Morgan Stanley, Dean Witter, Discover & Co., 6.65%, due 11/15/00 (Note A) 6.65 150,000,000
20,300,000 Morgan Stanley, Dean Witter, Discover & Co., 6.09%, due 3/9/01 6.79 20,256,266
27,350,000 Salomon Smith Barney Holdings, Inc., 6.73%, due 12/12/00 (Notes A, E) 6.68 27,357,581
--------------
623,208,524
--------------
EXTENDIBLE COMMERCIAL NOTES--7.0%
85,000,000 ASAP Funding, Inc. Liquidity Notes, due 1/30/01 (Counterparty: 53% Bank of America, N.A.;
47% Citibank, N.A.) (Notes E, F) 6.59 85,000,000
80,000,000 ASAP Funding, Inc. Liquidity Notes, due 2/26/01 (Counterparty: 53% Bank of America, N.A.;
47% Citibank, N.A.) (Notes E, F) 6.59 79,621,556
60,311,000 ASAP Funding, Inc. Liquidity Notes, due 2/26/01 (Counterparty: 53% Bank of America, N.A.;
47% Citibank, N.A.) (Notes E, F) 6.59 60,025,695
54,150,000 ASAP Funding, Inc. Liquidity Notes, due 4/2/01 (Counterparty: 53% Bank of America, N.A.;
47% Citibank, N.A.) (Notes E, F) 6.76 53,529,832
21,234,000 ASAP Funding, Inc. Liquidity Notes, due 4/10/01 (Counterparty: 53% Bank of America, N.A.;
47% Citibank, N.A.) (Notes E, F) 6.76 20,959,433
45,900,000 Associates Corp. of N.A., due 11/3/00 (Notes E, F) 6.60 45,883,323
</TABLE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 40,000,000 Associates Corp. of N.A., due 1/24/01 (Notes E, F) 6.68 $ 39,385,867
50,000,000 Duke Energy Corp., due 11/05/01 (Notes E, F) 6.66 49,363,194
--------------
433,768,900
--------------
FINANCE & INSURANCE OBLIGATIONS--8.9%
70,000,000 Associates Corp. of N.A., 6.66%, due 12/26/00 (Note A) 6.66 70,000,000
145,000,000 Associates Corp. of N.A., 6.65%, due 12/29/00 (Note A) 6.65 145,000,000
12,500,000 CIT Group Holdings, Inc., 5.50%, due 10/15/01 6.73 12,359,935
100,000,000 CIT Group Holdings, Inc., 6.60%, due 12/6/00 (Note A) 6.65 99,971,059
27,000,000 CIT Group Holdings, Inc., 6.79%, due 12/21/00 (Note A) 6.86 26,987,014
45,000,000 General Motors Acceptance Corp., 6.90%, due 11/24/00 (Note A) 6.69 45,079,045
45,000,000 Sigma Finance Inc., 6.61%, due 11/13/00 (Notes A, E) 6.62 44,998,236
75,000,000 Sigma Finance Inc., 6.64%, due 12/15/00 (Notes A, E) 6.64 75,000,000
30,000,000 Sigma Finance Inc., 6.85%, due 2/26/01 (Note E) 6.85 30,000,000
--------------
549,395,289
--------------
FUNDING AGREEMENTS--4.1%
250,000,000 Metropolitan Life Insurance Co., 6.89%, due 1/2/01 (Notes A, B) 6.89 250,000,000
--------------
INDUSTRIAL & OTHER OBLIGATIONS--5.5%
27,732,187 Amtrak Trust 93-B, Ser. A VRDN, 6.67%, due 11/6/00 (GTY: General Electric Co.) (Note C) 6.67 27,732,187
21,305,454 Amtrak Trust 93-B, Ser. B VRDN, 6.67%, due 11/6/00 (GTY: General Electric Co.) (Note C) 6.67 21,305,454
14,040,000 AT&T Capital Corp., 7.50%, due 11/15/00 (GTY: CIT Group Holdings, Inc.) 6.39 14,045,372
11,450,000 AT&T Capital Corp., 6.25%, due 7/13/01 (GTY: CIT Group Holdings, Inc.) 6.83 11,411,625
45,000,000 AT&T Corp., 6.63%, due 12/14/00 (Note A) 6.64 44,997,157
10,000,000 AT&T Corp., 6.82%, due 1/15/01 (Note A) 6.88 9,996,912
50,000,000 AT&T Corp., due 2/8/01 6.66 49,103,500
94,594,000 AT&T Corp., due 2/27/01 6.66 92,578,622
40,000,000 AT&T Corp., due 3/14/01 6.64 39,043,878
20,000,000 Ford Capital BV, 10.13%, due 11/15/00 (GTY: Ford Motor Co.) 6.47 20,026,507
10,000,000 Frontenac Properties, Inc., 6.69%, due 11/1/00
(GTY: Sisters of Mercy Health System, Inc.) (Note A) 6.69 10,000,000
--------------
340,241,214
--------------
LOAN PARTICIPATIONS--6.7%
75,000,000 Four Times Square Partners, L.P., 6.70%, due 11/1/00 (GTY: Prudential Ins. Co. of America;
Other exposure: Chase Manhattan Bank) (Notes A, B) 6.62 75,000,000
100,000,000 GMAC Mortgage Corporation, due 11/1/00 (General Motors Acceptance Corp.;
Other exposure: Bank One, Texas, N.A.) 6.70 100,000,000
20,000,000 GMAC Mortgage Corporation, due 12/1/00 (General Motors Acceptance Corp.;
Other exposure: Bank One, Texas, N.A.) (Note B) 6.70 19,888,953
30,000,000 GMAC Mortgage Corporation, due 12/1/00 (General Motors Acceptance Corp.;
Other exposure: Bank One, N.A.) (Note B) 6.70 29,833,430
24,000,000 Int'l Lease Finance Corp., 6.59%, due 11/6/00
(Other exposure: Chase Manhattan Bank) (Note B) 6.59 24,000,000
49,000,000 Luddite Associates, 7.00%, due 12/6/00 (GTY: Prudential Ins. Co. of America;
Other exposure: Chase Manhattan Bank) (Note B) 7.00 49,000,000
12,000,000 Perserverance Associates, 6.68%, due 11/6/00 (GTY: Prudential Ins. Co. of America;
Other exposure: Chase Manhattan Bank) 6.68 12,000,000
22,000,000 Prudential Ins. Co. of America, 6.68%, due 11/6/00 (GTY: Prudential Ins. Co. of America;
Other exposure: Chase Manhattan Bank) 6.68 22,000,000
80,000,000 Prudential Ins. Co. of America, 6.68%, due 11/9/00 (GTY: Prudential Ins. Co. of America;
Other exposure: Chase Manhattan Bank) (Note B) 6.68 80,000,000
--------------
411,722,383
--------------
TOTAL CORPORATE OBLIGATIONS--58.9% 3,626,551,512
--------------
</TABLE>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BANK OBLIGATIONS
BANK NOTES--11.8%
$ 7,000,000 Bank of America, N.A., 6.76%, due 1/29/01 (Note A) 6.76 $ 6,999,450
106,000,000 Bank of Scotland Treasury Services, 6.77%, due 1/19/01 (GTY: Bank of Scotland) (Note A) 6.76 106,001,386
117,800,000 Bank of Scotland Treasury Services, 6.77%, due 1/19/01 (GTY: Bank of Scotland) (Note A) 6.77 117,795,732
50,000,000 BNP Paribas, 6.69%, due 11/10/00 (Note A) 6.69 49,999,922
50,000,000 First Union National Bank, 6.77%, due 11/1/00 (Note A) 6.77 50,000,000
13,000,000 First Union National Bank, 6.81%, due 11/21/00 (Note A) 6.66 13,002,090
50,000,000 First Union National Bank, 6.62%, due 11/29/00 (Note A) 6.62 50,002,995
50,000,000 First Union National Bank, 6.77%, due 1/15/01 (Note A) 6.77 50,000,000
25,000,000 First USA Bank, N.A., 6.71%, due 12/4/00 (Note A) 6.67 25,005,567
50,000,000 First USA Bank, N.A., 6.72%, due 12/4/00 (Note A) 6.64 50,014,326
10,500,000 First USA Bank, N.A., 6.83%, due 1/12/01 (Note A) 6.81 10,499,273
20,000,000 First USA Bank, N.A., 6.79%, due 1/23/01 (Note A) 6.77 19,997,360
15,000,000 First USA Bank, N.A., 6.80%, due 1/29/01 (Note A) 6.77 14,998,582
25,000,000 First USA Bank, N.A., 6.82%, due 1/31/01 (Note A) 6.77 24,998,812
50,000,000 Fleet National Bank, 6.56%, due 11/20/00 (Note A) 6.60 49,985,889
85,000,000 Wells Fargo & Co., 6.59%, due 11/14/00 (Note A) 6.59 85,000,000
--------------
724,301,384
--------------
DOMESTIC BANK SUPPORTED OBLIGATIONS--3.8%
245,000 Adult Communities Total Services, Inc. Series 1996 VRDN, 6.67%, due 11/2/00
(LOC: LaSalle National Bank) (Note C) 6.58 245,000
5,700,000 Belmay, Inc., Multi-Mode Rev. Bonds, Ser. 1999 VRDN, 6.82%, due 11/2/00
(LOC: Bank of New York) (Note C) 6.73 5,700,000
7,100,000 CEGW, Inc. Tax. Notes, Ser. 1999, 6.75%, due 11/1/00 (LOC: PNC Bank, N.A.) (Note A) 6.66 7,100,000
19,500,000 EPI Corp., Taxable Adj. Rate Notes, Series 1998, 6.75%, due 11/1/00
(LOC: PNC Bank, N.A.) (Note A) 6.75 19,500,000
50,000,000 Formosa Plastics Corp., USA - Ser. B, due 4/16/01 (LOC: Bank of America, N.A.) 6.62 48,519,833
50,000,000 Formosa Plastics Corp., USA - Ser. B, due 4/23/01 (LOC: Bank of America, N.A.) 6.63 48,457,417
13,700,000 ISCO, Inc. Tax. VRDN Ser. 1999, 6.70%, due 11/2/00
(LOC: First Union National Bank) (Note C) 6.61 13,700,000
8,100,000 Mark-Lynn Foods, Inc., Tax VRDN, Ser. 2000, 6.67%, due 11/2/00
(LOC: Bank of America, N.A.) (Note C) 6.60 8,100,000
31,550,000 Metrocrest Hospital Authority, Ser. 89-A, due 1/22/01 (LOC: Bank of New York, NY) 6.76 31,072,734
23,345,000 Resources & Conservation Center LP Tax VRDN
(Resources for the Future, Inc. Proj.), Ser. 1999, 6.70%, due 11/2/00
(LOC: First Union National Bank) (Note C) 6.70 23,345,000
3,720,000 Senior Systems Technology LLC VRDN, 6.75%, due 11/1/00
(LOC: Comerica Bank - California) (Note C) 6.75 3,720,000
4,955,000 Stech, LLP Tax. Adj. Rate Bonds, Ser. 1998, 6.75%, due 11/1/00
(LOC: PNC Bank, N.A.) (Note A) 6.66 4,955,000
7,300,000 Watson Clinic LLP Tax., Ser. 1999 VRDN, 6.67%, due 11/2/00
(LOC: Bank of America, N.A.) (Note C) 6.58 7,300,000
10,375,000 Willow Run Foods, Inc. Ser 1999-1 VRDN, 6.75%, due 11/1/00 (LOC: PNC Bank, N.A.) (Note C) 6.66 10,375,000
--------------
232,089,984
--------------
DOMESTIC CERTIFICATES OF DEPOSIT--0.8%
50,000,000 First Union National Bank, 7.00%, due 11/22/00 7.00 50,000,000
--------------
FOREIGN BANK SUPPORTED OBLIGATIONS--16.1%
10,000,000 Banca Serfin S.A., due 11/9/00 (LOC: Barclays Bank PLC) 6.62 9,985,511
30,000,000 Banca Serfin S.A., due 11/13/00 (LOC: Barclays Bank PLC) 6.63 29,934,800
75,000,000 Banco de Galicia y Buenos Aires, S.A., due 2/23/01 (LOC:
Bayerische Hypo -und Vereinsbank AG) 6.68 73,451,500
50,000,000 Banco de la Provincia de Buenos Aires, due 12/13/00 (LOC: Barclays Bank PLC) 6.62 49,620,250
20,000,000 Banco del Istmo, due 11/17/00 (LOC: Barclays Bank PLC) 6.63 19,941,956
15,000,000 Banco del Istmo, due 11/27/00 (LOC: Barclays Bank PLC) 7.07 14,926,008
9,000,000 Banco Itau S.A., due 4/18/01 (LOC: Bayerische Hypo -und Vereinsbank AG) 6.61 8,731,200
60,000,000 Bankboston Latino Americano, S.A., due 1/30/01 (LOC: HSBC Bank USA) 6.68 59,014,500
64,493,000 Bankboston Latino Americano, S.A., due 2/1/01 (LOC: HSBC Bank USA) 6.68 63,410,163
50,000,000 Citibank, N.A., Nassau Branch, due 11/9/00 (LOC: Banco Santander Central Hispano, S.A.) 6.64 49,927,444
50,000,000 Citibank, N.A., Nassau Branch, due 12/11/00 (LOC: Banco Santander Central Hispano, S.A.) 6.57 49,637,778
40,000,000 Corporacion Andina de Fomento, due 11/13/00 (LOC: Barclays Bank PLC) 6.55 39,913,067
</TABLE>
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 12,120,000 CSN Overseas, Ser. C, due 12/4/00 (LOC: Banco Santander Central Hispano, S.A.) 6.57 $ 12,047,674
42,175,000 CSN Overseas, Ser. C, due 12/11/00 (LOC: Banco Santander Central Hispano, S.A.) 6.66 41,868,997
17,805,000 CSN Overseas, Ser. C, due 1/17/01 (LOC: Banco Santander Central Hispano, S.A.) 6.66 17,555,176
21,000,000 Demir Funding Corp., due 4/10/01 (LOC: Bayerische Hypo -und Vereinsbank AG) 6.66 20,398,000
55,000,000 Fortis Funding LLC, due 1/2/01 (LOC: Generale Bank) 6.66 54,379,569
35,000,000 GTL-Trade Corp., due 12/6/00 (LOC: Banco Santander Central Hispano, S.A.) 6.58 34,778,819
38,000,000 Inland Empire Solid Waste Fin. Auth. 1999 Ser. A VRDN, 6.60%, due 11/7/00
(LOC: Bayerische Hypo -und Vereinsbank AG) (Note C) 6.51 38,000,000
10,000,000 PEMEX Capital, Inc., due 2/1/01 (LOC: Barclays Bank PLC) 6.64 9,833,889
50,000,000 PEMEX Capital, Inc., due 4/23/01 (LOC: Barclays Bank PLC) 6.61 48,462,222
64,365,000 Redding Life Care LLC (Meadow Ridge Proj.) Ser. 1998B VRDN, 6.80%, due 11/7/00
(LOC: BNP Paribas) (Note C) 6.71 64,365,000
50,000,000 Societe Generale North America, Inc., due 2/27/01 (GTY: Societe Generale) 6.65 48,939,639
60,000,000 Unibanco-Uniao de Bancos Brasileiros, Ser. A & B, due 1/12/01
(LOC: Westdeutsche Landesbank GZ) 6.88 59,202,000
50,000,000 Unibanco-Uniao de Bancos Brasileiros, Ser. C, due 4/12/01 (LOC: Barclays Bank PLC) 6.88 48,551,000
25,000,000 United Mexican States, due 11/30/00 (LOC: Barclays Bank PLC) 6.78 24,867,083
--------------
991,743,245
--------------
YANKEE BANK CERTIFICATES OF DEPOSIT--3.6%
100,000,000 Deutsche Bank AG, 6.68%, due 2/20/01 6.73 99,985,576
50,000,000 Societe Generale, 6.57%, due 11/16/00 (Note A) 6.68 49,992,976
75,000,000 Societe Generale, 6.50%, due 1/8/01 6.55 74,993,360
--------------
224,971,912
--------------
TOTAL BANK OBLIGATIONS--36.1% 2,223,106,525
--------------
TAXABLE MUNICIPAL OBLIGATIONS--4.1%
40,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds (Atlantic Richfield Co. Proj.)
Ser. 1997, 6.63%, due 11/13/00
(GTY: Atlantic Richfield Co.) (Note E) 6.63 40,000,000
48,000,000 Calif. Pollution Control Fin. Auth. Env. Imp. Rev. Bonds (Atlantic Richfield Co. Proj.)
Ser. 1997, 6.69%, due 2/13/01 (GTY: Atlantic Richfield Co.) (Note E) 6.69 48,000,000
25,000,000 Calif. Pollution Control Fin. Auth. Rev. Bonds (Browning Ferris Proj.)
Ser. 1997, 6.58%, due 11/15/00 (LOC: Chase Bank of Texas, N.A.) 6.58 25,000,000
4,735,000 City of Gaithersburg (MD) Econ. Dev. Rev. (Asbury Methodist Village, Inc. Fac.)
Ser. 1997B VRDN, 6.67%, due 11/1/00 (Insured: MBIA; LIQ: Bank of America, N.A.) (Note C) 6.58 4,735,000
23,900,000 Ill. Dev. Auth. Revenue Bonds Ser. 1996 VRDN, 6.70%, due 11/2/00
(LOC: Northern Trust Co.) (Note C) 6.61 23,900,000
6,070,000 Ill. Health Facilities Auth. Ser. 1996F VRDN, 6.67%, due 11/1/00
(LOC: LaSalle National Bank) (Note C) 6.58 6,070,000
13,800,000 Ill. Student Asst. Comm. Student Loan Rev. Bonds Ser. 1999B-I VRDN, 6.60%, due 11/1/00
(Insured: MBIA; LIQ: Bank One, N.A.) (Note C) 6.60 13,800,000
18,000,000 Ill. Student Asst. Comm. Student Loan Rev. Bonds Ser. 1999B-II VRDN, 6.60%, due 11/1/00
(Insured: MBIA; LIQ: Bank One, N.A.) (Note C) 6.60 18,000,000
11,000,000 Miss. Bus. Fin. Corp. IDB (GE Plastics Finishing Inc. Proj.)
Ser. 1998 VRDN, 6.60%, due 11/1/00 (GTY: General Electric Co.) (Note C) 6.60 11,000,000
14,000,000 Miss. Bus. Fin. Corp. IDB (Telapex Inc. Proj.) Ser. 2000 VRDN, 6.62%, due 11/2/00
(LOC: First Union National Bank) (Note C) 6.62 14,000,000
3,620,000 PA Econ. Dev. Fin. Auth. Taxable Dev. Rev. Bonds (Country Meadows of Allentown Proj.)
Ser. 1996B VRDN, 6.75%, due 11/1/00 (LOC: First Union National Bank) (Note C) 6.75 3,620,000
8,700,000 Polk Cty. FL IDA Rev. Bonds (Watson Clinic LLP Proj.) Ser. 99 VRDN, 6.67%, due 11/2/00
(LOC: Bank of America, N.A.) (Note C) 6.58 8,700,000
15,720,000 St. Francis Place LP Tax. MFH VRDN (St. Francis Place) Ser. 98, 6.70%, due 11/2/00
(LOC: Credit Suisse First Boston) (Notes C, E) 6.61 15,720,000
20,000,000 Texas State GO Bonds, 6.59%, due 11/7/00 (LIQ: Morgan Guaranty Trust) (Note A) 6.59 20,000,000
--------------
TOTAL TAXABLE MUNICIPAL OBLIGATIONS--4.1% 252,545,000
--------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--3.5%
$213,817,000 ABN Amro Bank, N.V.
~dated 10/31/00, due 11/1/00, in the amount of $213,856,259
~fully collateralized by $214,294,000 U.S.
Government securities, coupon range 6.75% to 7.32%,
maturity range 8/22/01 to 2/15/02, value $218,096,327 6.61 $ 213,817,000
---------------
TOTAL INVESTMENTS (Cost $6,316,020,037)--102.6% 6,316,020,037
LIABILITIES IN EXCESS OF OTHER ASSETS--(2.6)% (160,156,548)
---------------
NET ASSETS--100.0% $ 6,155,863,489
===============
</TABLE>
Please see accompanying notes to the schedules of investments and financial
statements.
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23
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL HOME LOAN BANK--12.4%
$ 4,500,000 Notes, 6.20%, due 11/3/00 6.37 $ 4,499,907
30,000,000 Notes, 6.46%, due 11/17/00 (Note A) 6.53 29,983,776
5,000,000 Notes, 6.38%, due 12/20/00 6.97 4,995,495
25,000,000 Notes, 6.46%, due 12/28/00 (Note A) 6.51 24,988,968
10,000,000 Notes, 4.88%, due 1/26/01 6.61 9,957,506
14,000,000 Notes, 5.63%, due 3/19/01 7.01 13,928,932
15,000,000 Notes, 6.66%, due 4/6/01 6.55 15,002,655
6,950,000 Notes, 6.89%, due 9/12/01 6.90 6,949,400
--------------
110,306,639
--------------
FEDERAL HOME LOAN MORTGAGE CORP.--10.6%
30,000,000 Notes, 5.20%, due 11/16/00 6.35 29,986,240
25,000,000 Notes, 6.41%, due 11/20/00 (Note A) 6.48 24,995,816
15,000,000 Notes, 0.00%, due 1/16/01 6.55 14,796,350
10,000,000 Notes, 6.40%, due 2/8/01 6.52 9,990,496
15,000,000 Notes, 5.38%, due 3/1/01 6.57 14,938,459
--------------
94,707,361
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--44.1%
10,200,000 Mortgage-backed Discount Notes, due 11/1/00 6.69 10,200,000
20,000,000 Mortgage-backed Discount Notes, due 11/1/00 6.66 20,000,000
25,000,000 Mortgage-backed Discount Notes, due 11/1/00 6.62 25,000,000
45,000,000 Mortgage-backed Discount Notes, due 11/1/00 6.61 45,000,000
18,010,000 Mortgage-backed Discount Notes, due 12/1/00 6.63 17,912,596
25,000,000 Mortgage-backed Discount Notes, due 12/1/00 6.49 24,865,625
18,648,100 Mortgage-backed Discount Notes, due 1/2/01 6.54 18,441,272
22,642,000 Mortgage-backed Discount Notes, due 1/2/01 6.55 22,389,705
35,000,000 Mortgage-backed Discount Notes, due 1/2/01 6.58 34,612,113
45,000,000 Mortgage-backed Discount Notes, due 1/30/01 6.57 44,273,250
4,952,000 Mortgage-backed Discount Notes, due 2/1/01 6.60 4,870,248
25,000,000 Mortgage-backed Discount Notes, due 2/1/01 6.55 24,588,556
294,222 Mortgage-backed Notes, 6.00%, due 11/1/00 6.22 294,222
1,285,000 Notes, 4.75%, due 11/2/00 6.06 1,284,955
10,000,000 Notes, 4.90%, due 11/2/00 5.95 9,999,719
60,000,000 Notes, 6.42%, due 11/8/00 (Note A) 6.52 59,994,056
1,000,000 Notes, 5.90%, due 11/24/00 6.75 999,385
1,550,000 Notes, 5.10%, due 11/29/00 5.98 1,548,999
2,000,000 Notes, 5.90%, due 12/19/00 6.78 1,997,407
13,000,000 Notes, 5.23%, due 1/8/01 6.45 12,972,565
2,000,000 Notes, 0.00%, due 2/12/01 6.58 1,963,263
10,000,000 Notes, 5.25%, due 2/12/01 6.51 9,966,369
--------------
393,174,305
--------------
STUDENT LOAN MARKETING ASSOCIATION--12.9%
25,000,000 Notes, 6.81%, due 11/7/00 (Note A) 6.76 24,995,798
50,000,000 Notes, 6.82%, due 11/7/00 (Note A) 6.74 49,990,164
10,000,000 Notes, 7.07%, due 11/13/00 (Note A) 7.02 9,999,838
5,595,000 Notes, 6.13%, due 11/15/00 6.86 5,592,738
25,000,000 Notes, 5.90%, due 12/1/00 6.60 24,983,843
--------------
115,562,381
--------------
</TABLE>
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24
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<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT GUARANTEED OBLIGATIONS--4.2%
$12,500,0000 American Classic Voyages (Project America, Ship I, Inc.) U.S. Government
Guaranteed Ship Financing Notes, Ser. A 2000, 6.71%, due 1/31/01 (Notes A, B) 6.71 $ 12,500,000
25,000,000 American Classic Voyages (Project America, Ship I, Inc.) U.S. Government
Guaranteed Ship Financing Notes, Ser. B 2000, 6.71%, due 7/31/01 (Notes A, B) 6.71 25,000,000
--------------
37,500,000
--------------
REPURCHASE AGREEMENTS--27.5%
160,104,000 ABN Amro Bank, N.V.
~dated 10/31/00, due 11/1/00, in the amount of $160,133,397
~fully collateralized by $160,515,000 U.S. Government
securities, coupon 6.75%, maturity 2/15/02, value $163,310,759 6.61 160,104,000
85,000,000 Salomon Smith Barney, Inc.
~dated 10/31/00, due 11/7/00, in the amount of $85,108,257
~fully collateralized by $103,502,372 U.S. Government securities,
coupon range 6% to 8.5%, maturity range 4/15/26 to 10/15/30, value $86,700,000 6.55 85,000,000
--------------
245,104,000
--------------
TOTAL INVESTMENTS (Cost $996,354,686)--111.7% 996,354,686
LIABILITIES IN EXCESS OF OTHER ASSETS--(11.7%) (104,555,348)
--------------
NET ASSETS--100.0% $ 891,799,338
==============
</TABLE>
Please see accompanying notes to the schedules of investments and financial
statements.
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25
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<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL OBLIGATIONS
ALABAMA--2.5%
$ 4,640,000 Huntsville IDB Rev. Bonds (Central CPVC Corp. Proj.) Ser.1998 VRDN, 4.50%
(LOC: First Union National Bank) (Note C) 4.50 $ 4,640,000
3,000,000 Montgomery IDB Rev. Bonds (Kinpak Inc. Proj.) VRDN, 4.60%
(LOC: First Union National Bank ) (Note C) 4.60 3,000,000
4,650,000 Montgomery IDR Bonds (Anderson ALACO Lawn Proj.) VRDN, 4.50% (LOC: U.S. Bank) (Note C) 4.50 4,650,000
1,000,000 Univ. of South AL Hosp. Rev. Bonds, 4.35%, due 8/1/01 (Insured: AMBAC) 4.37 999,780
--------------
13,289,780
--------------
ALASKA--0.7%
800,000 Anchorage Port & Terminal Rev. Bonds, 6.00%, due 2/1/01 (Insured: MBIA) 4.30 803,296
2,400,000 IDA Rev. Bonds (Alaska Hotel Properties, Inc.) VRDN, 4.40%
(LOC: National Westminster) (Note C) 4.40 2,400,000
380,000 Municipal Bond Bank, Ser. A, 4.75%, due 4/1/01 (Insured: MBIA) 4.90 379,684
--------------
3,582,980
--------------
ARIZONA--0.4%
2,200,000 Pima County IDA Rev. Bonds (Tucson Elec. Co.Proj.) VRDN, 4.40%
(LOC: Societe Generale) (Note C) 4.40 2,200,000
--------------
ARKANSAS--0.2%
1,265,000 DFA Rev. Bonds (Conestoga Wood Proj,) VRDN, 4.55%
(LOC: First Union National Bank) (Note C) 4.55 1,265,000
--------------
CALIFORNIA--2.3%
7,300,000 Higher Educ. Loan Auth., Ser. 1987A, 4.45%, put 7/1/01 (LOC: SLMA) 4.45 7,300,000
1,932,787 Pitney Bowes Credit Corp., Ser. 1999-1, 4.25%, put 1/24/01 (Note E) 4.25 1,932,787
2,700,000 School Cash Reserve Prog. Auth., Ser. A, 5.25%, due 7/3/01 4.27 2,716,948
--------------
11,949,735
--------------
COLORADO--0.3%
1,580,000 Denver City & County Airport Rev. Bonds, Ser. 1991D, 7.75%, due 11/15/01 prerefunded
@ 102 (Note D) 4.43 1,662,669
--------------
DELAWARE--0.2%
1,160,000 Wilmington Community Rev. Bonds, VRDN, 4.60% (LOC: First Union National Bank) (Note C) 4.60 1,160,000
--------------
DISTRICT OF COLUMBIA--3.2%
830,000 GO Bonds, Ser. A, 6.30%, due 6/1/01 (Insured: MBIA) 4.40 838,881
12,000,000 HFA COP (Tyler House Apts. Proj.) Ser. 1995A VRDN, 4.50%
(LOC: Landesbank Hessen-Theuringen GZ) (Note C) 4.50 12,000,000
4,000,000 Water & Sewer Rev. Bonds (Eagle Trust Certs.) VRDN 4.43% (LIQ: Citibank) (Notes C, E) 4.43 4,000,000
--------------
16,838,881
--------------
FLORIDA--6.5%
2,000,000 Board of Education (ABN-AMRO Munitops 1998) VRDN, 4.42% (LIQ:ABN-AMRO Bank) (Notes C, E) 4.42 2,000,000
2,200,000 Pinellas Cty. IDR Bonds (Pozin Enterprises Onc. Proj.) VRDN, 4.55%
(LOC: Nationsbank) (Note C) 4.55 2,200,000
2,000,000 St. Johns Cty. IDA Rev. Bonds (Coastal Health Investors Ltd. Proj.)
Ser. 1986 VRDN, 4.50%, (LOC: SunTrust Bank) (Note C) 4.50 2,000,000
7,135,000 Sunrise Utility Sys. Rev. Bonds , Ser. PCR17 VRDN, 4.58% (LIQ: Citibank) (Notes C, E) 4.58 7,135,000
10,380,000 Sunshine St. Governmental Fin. Comm. Rev. Bonds, Ser. A, 4.30%, due 12/4/00
(SBPA: Bank of Nova Scotia) 4.30 10,380,000
10,140,000 Sunshine St. Governmental Fin. Comm. Rev. Bonds, Ser. B, 4.25%, due 12/4/00
(SBPA: Dexia) 4.25 10,140,000
--------------
33,855,000
--------------
GEORGIA--3.6%
300,000 Atlanta Board of Educ. COP, 4.60%, due 12/1/00 (Insured: FGIC) 4.15 300,107
400,000 Atlanta Water Rev. Bonds, Ser. A, 3.50%, due 11/1/00 (Insured: FGIC) 4.75 400,000
200,000 Clayton Cty. SD GO Bonds, 5.20%, due 2/1/01 4.30 200,437
200,000 Cobb Cty. SD GO Bonds, 4.60%, due 2/1/01 4.30 200,145
6,462,000 Dekalb Cty. Hsg. Auth. SFM Rev. Bonds , Ser.1997A VRDN, 4.60%
(LIQ: Bank of New York) (Note C) 4.60 6,462,000
1,500,000 Gwinnett Cty. IDR (Barco Inc. Proj.) VRDN, 4.55% (LOC: First Union National Bank)
(Note C) 4.55 1,500,000
6,500,000 Municipal Electric Authority of GA Rev. Bonds, Ser. 1985A, 4.25%, due 12/6/00
(LOC: Morgan Guaranty Trust) 4.25 6,500,000
1,200,000 Talbot Cty. Dev. Auth. IDR Bonds (Douglas Asphalt Co.Proj.) VRDN, 4.60%
(LOC: First Union National Bank) (Note C) 4.60 1,200,000
</TABLE>
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26
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<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 2,000,000 Valdosta Lowndes Cty. IDR Bonds (Reames Cos. Proj.) Ser 1998 VRDN, 4.50%
(LOC: Nationsbank) (Note C) 4.50 $ 2,000,000
--------------
18,762,689
--------------
ILLINOIS--6.4%
2,065,000 Bedford Park IDR Bonds (Cintas Sales Corp. Proj.) VRDN, 4.40%
(LOC: PNC Bank) (Note C) 4.40 2,065,000
2,900,000 Chicago (Muni. Sec. Trust Receipts) Ser. A2 VRDN, 4.55%
(LIQ: Credit Suisse First Boston) (Notes C, E) 4.55 2,900,000
4,300,000 Chicago IDR Bonds (Enterprise Center X Proj.) VRDN, 4.44% (LOC: Bank One) (Note C) 4.44 4,300,000
2,625,000 Chicago Sales Tax Rev. Bonds, VRDN, 4.58% (LIQ: Citibank) (Note C) 4.58 2,625,000
575,000 DFA Rev. Bonds (D.E. Akin Seed Proj.) VRDN, 4.55% (LOC: Banc One) (Note C) 4.55 575,000
900,000 DFA Rev. Bonds (Profile Plastics Proj.) VRDN, 4.44% (LOC: LaSalle National Bank) (Note C) 4.44 900,000
8,800,000 Health Facs. Auth. Rev. Bonds, 6.80%,due 11/1/01 prerefunded @102 (Note D) 4.57 9,165,142
1,700,000 Lake Cty. Solid Waste Rev. Bonds (Countryside Landfill Inc.) VRDN, 4.55%
(LOC: Morgan Guaranty Trust) (Note C) 4.55 1,700,000
800,000 Madison Cty. Envir. Rev. Bonds (Shell- Wood River Proj.) Ser. 1997A VRDN, 4.75% (Note C) 4.75 800,000
930,000 Madison Cty. Envir. Rev. Bonds (Shell- Wood River Proj.) Ser. 1997 VRDN, 4.75% (Note C) 4.75 930,000
305,000 Massac Cty. Comm. Unit SD #1 GO Bonds, 4.50% due 10/15/01 (Insured: MBIA) 4.50 305,000
4,000,000 Paris IDR Bonds (Simonton Building Products Inc. Proj.) VRDN, 4.50%
(LOC: Wachovia Bank) (Note C) 4.50 4,000,000
2,300,000 Richmond IDR Bonds (Maclean Fogg Co. Proj.) VRDN, 4.55% (LOC: Bank of America) (Note C) 4.55 2,300,000
800,000 Southwestern IL Dev. Auth. Solid Waste Disp.
(Shell Oil Co.-Wood River Proj.) Ser. 91 VRDN, 4.75% (Note C) 4.75 800,000
--------------
33,365,142
--------------
INDIANA--1.2%
650,000 Bond Bank Rev. Bonds, 5.00%, due 2/1/01 (LOC: CIBC) 4.25 651,157
250,000 Educ. Rev. Bonds (Rose Hulman Proj.) 5.25%, due 6/1/01 (Insured: MBIA) 4.30 251,333
2,200,000 Employment Dev. Commission Rev. Bonds (Fischer Enterprises Proj.) VRDN, 4.50%
(LOC: PNC Bank) (Note C) 4.50 2,200,000
1,000,000 Marion Cty. Convention & Recreation Facs. Rev. Bonds, 7.00%, due 6/1/01
prerefunded @ 102 (Note D) 4.40 1,034,170
750,000 New Albany EDR Bonds (Gordon & Jeff Huncilman Proj.) VRDN, 4.50% (LOC: PNC Bank) (Note C) 4.50 750,000
1,400,000 Whiting Sewer & Solid Waste Disp. Rev. Bonds (Amoco Oil Co. Proj.) VRDN, 4.75% (Note C) 4.75 1,400,000
--------------
6,286,660
--------------
IOWA--1.6%
3,600,000 Dubuque Rev. Bonds (Jeld-Wen, Inc. Proj.) Ser. 1988 VRDN, 4.75% (LOC: ABN-AMRO Bank)
(Note C) 4.75 3,600,000
2,800,000 Higher Educ. Rev. Bonds (Grinnell College) 5.25%, due 6/1/01 4.40 2,813,315
1,000,000 Student Loan Rev. Bonds, Ser. A, 5.15%, due 12/1/00 (GTY: SLMA) 4.38 1,000,540
400,000 Student Loan Rev. Bonds, Ser. C, 6.60%, due 12/1/00 (Insured: AMBAC) 4.40 400,684
705,000 Univ. of IA Fac. Corp. Rev. Bonds (Medical Educ. & Biomed Research Fac.Proj.),
4.50%, due 6/1/01 (Insured: AMBAC) 4.40 705,366
--------------
8,519,905
--------------
KANSAS--0.2%
1,150,000 Spring Hill IRB (Abrasive Engineering Proj.) VRDN, 4.57%
(LOC: LaSalle National Bank) (Note C) 4.57 1,150,000
--------------
KENTUCKY--1.8%
275,000 Higher Educ. Rev. Bonds, Ser. A, 4.70%, due 12/1/00 4.00 275,152
3,000,000 Mayfield IDR Bonds (Seaboard Farms of KY Inc. Proj.) VRDN, 4.50%
(LOC: SunTrust Bank) (Note C) 4.50 3,000,000
5,000,000 Pulaski Cty. Solid Waste Rev. Bonds
(National Rural - Eastern KY Power) Ser. B, 4.30%, put 2/15/01 4.30 5,000,000
1,000,000 Turnpike Auth. (Trust Rec.) Ser. 17 VRDN, 4.50% (LIQ: Commerzbank AG) (Notes C, E) 4.50 1,000,000
--------------
9,275,152
--------------
LOUISIANA--0.4%
2,000,000 Jefferson Parish IDR Rev. Bonds (George J. Ackel Sr. Proj.) VRDN, 4.45%
(LOC: Regions Bank) (Note C) 4.45 2,000,000
205,000 Pub. Fac. Auth. Rev. Bonds, 6.20%, due 3/1/01 4.50 206,110
--------------
2,206,110
--------------
MAINE--0.5%
800,000 Educ. Loan Marketing Corp. Rev. Bonds (Student Loan) Ser. A4, 5.60%, due 11/1/00 4.40 800,000
2,000,000 Pub. Util. Fin. Rev. Bonds (ME Public Service Co. Proj.) VRDN, 4.55%
(LOC: Bank of New York) (Note C) 4.55 2,000,000
--------------
2,800,000
--------------
</TABLE>
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MARYLAND--3.9%
$ 7,450,000 Anne Arundel Cty. (Baltimore Gas & Electric Proj.) Ser. 1988, 4.30%, due 11/6/00
(SBPA: Bank of New York, Chemical) 4.30 $ 7,450,000
5,000,000 Anne Arundel Cty. (Baltimore Gas & Electric Proj.) Ser. 1988, 4.25%, due 12/5/00
(SBPA: Bank of New York, Chemical) 4.25 5,000,000
3,000,000 CDA Rev. Bonds, VRDN Ser. 2000CMC3, 4.50% (LIQ: Chase Manhattan Bank) (Notes C, E) 4.50 3,000,000
1,890,000 Health & Higher Educ. (North Arundel Hosp. Proj.) VRDN, 4.35% (LOC: Mellon Bank) (Note C)4.35 1,890,000
3,000,000 Montgomery GO BANS, 4.20%, due 12/6/00 (LIQ: Westdeutche Landesbank GZ) 4.20 3,000,000
--------------
20,340,000
--------------
MASSACHUSETTS--1.3%
2,100,000 DFA Rev. Bonds (JPF Realty Proj.) Ser. A VRDN, 4.35% (LOC: Bank of Boston) (Note C) 4.35 2,100,000
595,000 Educ. Loan Auth. Rev. Bonds, Issue E, Series B, 4.95%, due 7/1/01 (Insured: AMBAC) 4.60 596,304
2,415,000 HEFA Rev. Bonds (Becker College) Ser. A1 VRDN, 4.20% (LOC: Bank of Boston) (Note C) 4.20 2,415,000
500,000 HEFA Rev. Bonds (Harvard University) 6.10%, due 12/1/00 4.70 500,556
435,000 HFA Rev. Bonds, Ser. A, 5.70%, due 1/1/01 (Insured: AMBAC) 5.00 435,486
700,000 IDA Rev. Bonds (October Co. Inc. Proj.) VRDN, 4.60% (LOC: Bank of Boston) (Note C) 4.60 700,000
--------------
6,747,346
--------------
MICHIGAN--2.7%
500,000 HFA Rev. Bonds (Detroit Med. Center) Ser. A, 7.50%, due 8/15/01, prerefunded @102 (Note D)4.35 521,682
13,000,000 Milan Area SD GO Bonds, Ser. B, 4.40%, put 11/1/00 4.59 13,000,000
375,000 Montcalm Cty. Bldg. Auth. GO Bonds, 5.00%, due 5/1/01 (Insured: AMBAC) 4.47 375,960
235,000 Tahquamenon SD GO Bonds, 4.50%, due 5/1/01 (Insured: FSA) 4.45 235,046
--------------
14,132,688
--------------
MINNESOTA--2.1%
4,800,000 Cass Lake ISD #115 GO Notes, 4.55%, due 9/30/01 4.40 4,806,097
3,800,000 Moorhead ISD #152 GO Notes, 4.50%, due 9/28/01 4.38 3,804,111
1,190,000 Staples-Motley ISD #2170 GO Notes, 4.60%, due 9/30/01 4.42 1,191,861
1,300,000 Waseca, Rice, & Steele Ctys. ISD Notes, 4.45%, due 3/30/01 4.40 1,300,251
--------------
11,102,320
--------------
MISSISSIPPI--0.4%
1,600,000 Business Fin. Corp. IDR Bonds (Lehman- Roberts Co. Proj.) Ser. A, VRDN, 4.55%
(LOC: Nationsbank) (Note C) 4.55 1,600,000
590,000 Tupelo Pub. Sch. Dist. GO Bonds, 6.90%, due 11/1/00 (Insured: MBIA) 4.00 590,000
--------------
2,190,000
--------------
MISSOURI--0.7%
1,400,000 Env. Imp. & Energy Res. Auth. (Assoc. Elec. Coop.) Ser. 93M, VRDN, 4.45%
(GTY: CFC National Rural) (Note C) 4.45 1,400,000
2,100,000 Warrensburg IDA Rev. Bonds (Swisher Mower Inc. Proj.) VRDN, 4.50%
(LOC: Nationsbank) (Note C) 4.50 2,100,000
--------------
3,500,000
--------------
MONTANA--0.3%
805,000 Butte Silver Bow PCR Bonds (Rhone-Poulenc Inc. Proj.) VRDN, 4.40%
(LOC: Banque Nationale de Paris) (Note C) 4.40 805,000
800,000 Higher Educ. Student Assistance Corp. Rev. Bonds, Ser. 1993A, 5.05%, due 12/1/00 4.25 800,507
--------------
1,605,507
--------------
NEBRASKA--0.8%
1,675,000 Gage Cty. IDR Bonds (Accuma Corp. Proj.) VRDN, 4.50%
(LOC: First Union National Bank) (Note C) 4.50 1,675,000
2,500,000 Lincoln (Lincoln Elec. Sys.) 4.25%, due 12/5/00 (LIQ: Morgan Guaranty Trust) 4.25 2,500,000
--------------
4,175,000
--------------
NEVADA--0.4%
1,000,000 Clark Cty. IDR Bonds (Nevada Cogeneration Assoc. #2) VRDN, 4.80%
(LOC: ABN-AMRO Bank) (Note C) 4.80 1,000,000
300,000 Clark Cty. SD GO Bonds, Ser. A, 5.75%, due 6/15/01 (Insured: MBIA) 4.33 302,546
1,000,000 Henderson Cty. Pub. Imp. Trust Rev. Bonds (Berry Plastics Corp. Proj.)
Ser. 1991 VRDN, 4.44% (LOC: Nationsbank) (Note C) 4.44 1,000,000
--------------
2,302,546
--------------
</TABLE>
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28
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW HAMPSHIRE--2.9%
$ 3,300,000 Business Fin. Auth. (Forty - One Northwestern LLC Proj.) Ser. 1998 VRDN, 4.45%
(LOC: Bank of Boston) (Note C) 4.45 $ 3,300,000
3,500,000 Business Fin. Auth. (Foundation for Seacoast Health) Ser. A VRDN, 4.40%
(LOC: Fleet Bank) (Note C) 4.40 3,500,000
2,300,000 Business Fin. Auth. (Wiggins Airway Inc. Proj.) VRDN, 4.45% (LOC: Bank of Boston)
(Note C) 4.45 2,300,000
2,500,000 Dover GO TANS, 4.75%, due 6/20/01 4.60 2,502,213
2,400,000 IDA Rev. Bonds (Oerlikon- Burhle USA) VRDN, 4.45%
(LOC: Union Bank of Switzerland) (Note C) 4.45 2,400,000
1,250,000 Manchester Hsg. Auth. Rev. Bonds (Wall St. Tower Proj.) Ser. B VRDN, 4.55%
(LOC: PNC Bank) (Note C) 4.55 1,250,000
--------------
15,252,213
--------------
NEW JERSEY--1.0%
5,000,000 Bayonne Temporary Notes, 5.00%, due 7/12/01 4.47 5,017,550
--------------
NEW MEXICO--1.4%
1,400,000 Albuquerque IDR Bonds (CVI Laser Corp. Proj.) Ser. 1998 VRDN, 4.55%
(LOC: Nationsbank) (Note C) 4.55 1,400,000
1,430,000 Albuquerque IDR Bonds (Karsten Co. of NM) Ser. 1997A VRDN, 4.70% (LOC: Bank One)
(Note C) 4.70 1,430,000
3,700,000 Farmington IDR Bonds (Independent Mobility Sys. Proj.) Ser. A VRDN, 4.55%
(LOC: Bank of America) (Note C) 4.55 3,700,000
555,000 Mortgage Fin. Auth. Rev. Bonds (Eagle Trust) VRDN, 4.68% (LIQ: Citibank) (Notes C, E) 4.68 555,000
--------------
7,085,000
--------------
NEW YORK--0.1%
200,000 Bethlehem CSD GO Bonds, 7.10%, due 11/1/00 (Insured: AMBAC) 4.05 200,000
250,000 Med. Care Facs. Fin. Agy. Rev. Bonds, 7.75%, due 2/15/01, prerefunded @ 102 (Note D) 4.30 257,349
--------------
457,349
--------------
NORTH CAROLINA--0.2%
1,000,000 Burke Cty. PCR Bonds (Jobst Institute Inc. Proj.) VRDN, 4.50% (LOC: Wachovia) (Note C) 4.50 1,000,000
--------------
OHIO--3.3%
3,770,000 Franklin Cty. IDR Bonds (IDS Acquisition Corp. Proj.) VRDN, 4.65% (LOC: Bank One)
(Note C) 4.65 3,770,000
11,750,000 Hsg. Rev. Bonds , Ser. CMC2 VRDN, 4.45% (LIQ: Chase Manhattan Bank) (Notes C, E) 4.45 11,750,000
1,020,000 Pub. Fac. Comm. Higher Educ. Rev. Bonds, 4.70%, due 6/1/01 (Insured: AMBAC) 4.60 1,020,563
400,000 Pub. Fac. Comm. Higher Educ. Rev. Bonds, 5.38%, due 12/1/00 (Insured: FSA) 4.00 400,436
500,000 Water Dev. Auth. Rev. Bonds, 5.25%, due 6/1/01 (Insured: MBIA) 4.50 502,105
--------------
17,443,104
--------------
OKLAHOMA--4.3%
1,000,000 Claremore Public Works Auth. Rev. Bonds, 5.50%, due 6/1/01 (Insured: FSA) 4.90 1,003,348
5,195,000 Tulsa Parking Auth. Rev. Bonds (Williams Center Proj.)
Ser. A , 4.75%, put 11/14/00 (LOC: Bank of America) 4.75 5,195,000
1,000,000 Tulsa Pub. Facs. Auth. Rev. Bonds (Ogden Martin Systems) 5.15%, due 11/1/01
(Insured: AMBAC) 4.50 1,006,234
15,450,000 Water Resources Board, State Loan Prog. Rev. Bonds, Ser. 1999, 4.30%, put 3/1/01
(SBPA: Bayerische Landesbank GZ) 4.30 15,450,000
--------------
22,654,582
--------------
OREGON--0.9%
4,600,000 Hillsboro Rev. Bonds (OR Graduate Institute) VRDN, 4.40% (LOC: Comerica Bank) (Note C) 4.40 4,600,000
--------------
PENNSYLVANIA--3.5%
2,800,000 Allegheny Cty. Hosp. Dev. Auth. Rev. Bonds (Central Blood Bank) VRDN, 4.40%
(LOC: PNC Bank) (Note C) 4.40 2,800,000
1,300,000 Bethel Township IDA (Brentwood Industries Inc. Proj.) VRDN, 4.50%
(LOC: First Union National Bank) (Note C) 4.50 1,300,000
4,020,000 Cambria Cty. IDA Rev. Bonds (Cambria Cogen Co. Proj.) Ser. 1998A2 VRDN, 4.35%
(LOC: Bayerische Hypo -und Vereinsbank AG) (Note C) 4.35 4,020,000
2,500,000 EDA Rev. Bonds (SJ Bailey & Sons, Inc. Proj.) VRDN, 4.50%, (LOC: PNC Bank) 4.50 2,500,000
1,800,000 Higher Educ. Rev. Bonds, Ser. A, 6.80%, due 12/1/00 (Insured: FGIC) 4.40 1,803,507
1,800,000 Philadelphia IDR Bonds (Henry H. Ottens Mfg. Proj.) VRDN, 4.55%
(LOC: First Union National Bank) (Note C) 4.55 1,800,000
4,000,000 Westmoreland Cty. IDA Rev. Bonds (Advance USA Proj.) Ser. 1999A VRDN, 4.50%
(LOC: PNC Bank) (Note C) 4.50 4,000,000
--------------
18,223,507
--------------
</TABLE>
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RHODE ISLAND--0.5%
$ 2,500,000 Ind. Fac. Corp. IDR Bonds (NFA Corp. Proj.) VRDN, 4.45% (LOC: Bank of Boston) (Note C) 4.45 $ 2,500,000
--------------
SOUTH CAROLINA--5.6%
4,000,000 Greenville City & Cty. IDR Bonds (Stevens Aviation Tech. Serv. Facs. Proj.) Ser. 97
VRDN, 4.55% (LOC: First Union National Bank) (Note C) 4.55 4,000,000
900,000 Jobs EDA Rev. Bonds (Ellcon National Inc. Proj.) VRDN, 4.55%
(LOC: First Union National Bank) (Note C) 4.55 900,000
2,150,000 Jobs EDA Rev. Bonds (JM Steel Corp. Proj.) Ser. 1999A VRDN, 4.50% (LOC: PNC Bank) (Note C)4.50 2,150,000
5,100,000 Jobs EDA Rev. Bonds (JM Steel Corp. Proj.) Ser. 1999B VRDN, 4.50% (LOC: PNC Bank) (Note C)4.50 5,100,000
2,400,000 Jobs EDA Rev. Bonds (Klockner Namasco Proj.) VRDN, 4.50%
(LOC: Bayerische Landesbank GZ) (Note C) 4.50 2,400,000
6,700,000 Jobs EDA Rev. Bonds (Zeuna Starker USA, Inc. Proj.) VRDN, 4.50%
(LOC: Bayerische Landesbank GZ) (Note C) 4.50 6,700,000
8,000,000 Port Auth. Rev. Bonds (ABN-AMRO Munitops #7) VRDN, 4.47%
(LIQ: ABN-AMRO Bank) (Notes C, E) 4.47 8,000,000
--------------
29,250,000
--------------
SOUTH DAKOTA--2.2%
250,000 Building Lease Rev. Bonds, Ser. A, 4.50%, due 12/1/00 (Insured: AMBAC) 4.45 250,009
6,400,000 HDA Rev. Bonds (Homeownership Mortgage Bds.) Ser. 2000K, 4.40%, due 11/8/01 4.40 6,400,000
4,685,000 Sioux Falls Rev. Bonds (Evangelical Lutheran Proj.) VRDN, 4.50%
(SBPA: Norwest Bank) (Note C) 4.50 4,685,000
--------------
11,335,009
--------------
TENNESSEE--2.2%
2,800,000 Franklin Cty. IDB (Franklin Ind. Inc. Proj.) VRDN, 4.60% (LOC: Nationsbank) (Note C) 4.60 2,800,000
8,600,000 Metropolitan Government Davidson Cty. (ABN-AMRO Munitops) Ser. 1999-1, 4.44%
(LIQ: ABN-AMRO Bank) (Notes C, E) 4.44 8,600,000
--------------
11,400,000
--------------
TEXAS--15.1%
250,000 Arlington Waterworks & Sewer Rev. Bonds, 4.75%, due 6/1/01 (Insured: AMBAC) 4.50 250,343
1,020,000 Austin Util. Sys. Rev. Bonds, Ser. A, 8.00%, prerefunded @ 100, due 5/15/01 (Note D) 4.45 1,038,864
6,140,000 Bexar Cty. Hsg. Rev. Bonds (Eagle Trust) Ser. 94C4301 VRDN, 4.48%
(LIQ: Citibank) (Notes C, E) 4.48 6,140,000
2,655,000 Brazos Higher Educ. Rev. Bonds, Ser. A-2, 5.85%, due 6/1/01 (GTY: Student Loans) 4.92 2,668,749
800,000 Brazos Higher Educ. Rev. Bonds, Ser. C-1, 6.20%, due 11/1/00 (GTY: Student Loans) 4.70 800,000
12,400,000 Brazos River Auth. Rev. Bonds (TX Util. Elec. Co. Proj.) Ser. 1994A, 4.30%, due 12/5/00
(LOC: Chase Manhattan Bank) 4.30 12,400,000
1,500,000 Brazos River Auth. Rev. Bonds (TX Util. Elec. Co. Proj.) Ser. 1996A VRDN, 4.75%,
(LIQ: Bank of New York) (Note C) 4.75 1,500,000
800,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Amoco Oil Proj.) Ser. 1993
VRDN, 4.75% (Note C) 4.75 800,000
500,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Amoco Oil Proj.) Ser. 1996
VRDN, 4.75% (Note C) 4.75 500,000
800,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Citgo Petroleum Corp. Proj.)
Ser. 1994 VRDN, 4.80%, (LOC: Wachovia Bank) (Note C) 4.80 800,000
750,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Citgo Petroleum Corp. Proj.)
Ser. 1999 VRDN, 4.80%, (LOC: Banque Nationale de Paris) (Note C) 4.80 750,000
700,000 Gulf Coast Waste Disposal Auth. Solid Waste Rev. Bonds (Exxon Oil Proj.)
Ser. 1995 VRDN,4.60% (Note C) 4.60 700,000
16,300,000 Harris Cty. GO CP Notes, Ser. C, 4.25%, due 11/3/00 (LIQ: Union Bank of Switzerland) 4.25 16,300,000
1,869,000 Houston Airport Rev. Bonds, ABN-AMRO Munitops Trust Cert., Ser.1998-15 VRDN, 3.35%
(LIQ: ABN-AMRO Bank) (Notes C, E) 3.35 1,869,000
1,000,000 Irving ISD GO Bonds, 4.10%, due 8/15/01 4.50 996,904
585,000 Katy ISD GO Bonds, 7.00%, due 2/15/01 4.40 589,281
4,000,000 North Central Health Facs. Rev. Bonds, 6.685%, due 6/19/01 prerefunded @ 102 (Note D) 4.70 4,128,414
200,000 Pub. Fin. Auth. Bldg. Rev. Bonds, 4.50%, due 2/1/01 (Insured: AMBAC) 4.45 200,000
300,000 Pub. Fin. Auth. Rev. Bonds (Parks & Wildlife Depts. Proj.) 4.75%,
due 2/1/01 (Insured: FSA) 4.40 300,254
1,000,000 San Antonio GO Bonds, 5.50%, due 8/1/01 4.30 1,008,564
2,000,000 San Antonio IDA Rev. Bonds (LGC Building LLC & KLN Steel Prod. Co. Ltd. Proj. )
Ser. 1998 VRDN, 4.55% (LOC: Nationsbank) (Note C) 4.55 2,000,000
3,000,000 San Marcos IDC Rev. Bonds (TB Woods Inc. Proj. ) VRDN, 4.50% (LOC: PNC Bank) (Note C) 4.50 3,000,000
400,000 South TX Higher Educ. Auth. Rev. Bonds, Ser. A1, 4.75%, due 12/1/00 4.50 400,078
230,000 Southwest ISD GO Bonds, 7.00%, due 2/1/01 4.35 231,476
13,000,000 TRANS, 5.25%, due 8/31/01 4.25 13,103,243
</TABLE>
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 1,000,000 TRANS, VRDN, 4.95% (Note C) 4.95 $ 1,000,000
900,000 University of TX Systems Rev. Bonds, 5.38%, due 3/15/01 (Insured: FSA) 4.52 902,760
4,800,000 Veterans Hsg. Rev. Bonds, Ser. 1994A-1 VRDN, 4.55% (Note C) 4.55 4,800,000
--------------
79,177,930
--------------
UTAH--0.3%
300,000 Springville Elec. Rev Bonds, 3.35%, due 3/1/01 (Insured: AMBAC) 5.15 298,200
1,000,000 Trementon City IDR Bonds (La-Z-Boy Chair Co. Proj.) Ser. 1990 VRDN, 4.45%
(LOC: NBD Bank) (Note C) 4.45 1,000,000
--------------
1,298,200
--------------
VARIOUS STATES--3.9%
3,340,000 Greystone Tax Exempt Cert., Ser.1998-2 VRDN, 4.50%
(LOC: Credit Suisse First Boston) (Notes C, E) 4.50 3,340,000
8,090,146 Pitney Bowes Credit Corp. Leasetops Muni Trust, Ser. 1998-2 VRDN, 4.67%
(LIQ: Pitney Bowes Credit Corp.) (Notes C, E) 4.67 8,090,146
8,738,231 Pitney Bowes Credit Corp. Leasetops Muni Trust, Ser. 1999-2 VRDN, 4.72%,
(LIQ: Pitney Bowes Credit Corp.) (Notes C, E) 4.72 8,738,231
--------------
20,168,377
--------------
VIRGINIA--2.9%
8,000,000 Chesapeake GO Bonds (Eagle Trust) Ser. 98-4601 VRDN, 4.26% (LIQ: Citibank) (Notes C, E) 4.26 8,000,000
1,700,000 Isle of Wight IDA Rev. Bonds (Smithfield Ham & Produce Co.) VRDN, 4.50%
(LOC: Nationsbank) (Note C) 4.50 1,700,000
2,900,000 King George Cty. IDA Rev. Bonds (Garnet of VA Inc. Proj.) VRDN, 4.50%
(LOC: Morgan Guaranty Trust) (Note C) 4.50 2,900,000
2,500,000 Norfolk IDA Rev. Notes (Sentara Health Sys. Group) 4.20%,
due 12/15/00 (LIQ: Wachovia Bank) 4.20 2,500,000
--------------
15,100,000
--------------
WASHINGTON--4.8%
200,000 Clark Cty. GO Bonds, 4.75%, due 12/1/00 4.66 200,000
3,410,000 Econ. DFA Rev. Bonds (Waste Management Proj.) Ser. 2000 VRDN, 4.50%
(LOC: Fleet Bank) (Note C) 4.50 3,410,000
2,400,000 EDA Rev. Bonds (Ace Tank Proj.) VRDN, 4.45% (LOC: US Bank) (Note C) 4.45 2,400,000
200,000 GO Bonds, Ser. A & AT 6, 5.60%, due 2/1/01 (Escrowed to Maturity) (Note D) 4.40 200,562
7,420,000 HFC Rev. Bonds (Boardwalk Apts. Proj.) VRDN, 4.45% (LOC: US Bank) (Note C) 4.45 7,420,000
2,000,000 HFC Rev. Bonds (Lake Washington Apt. Proj.) VRDN, 4.40% (LOC: Bank of America) (Note C) 4.40 2,000,000
2,250,000 HFC Rev. Bonds (Oxford Square Apts. Proj.) Ser. A VRDN, 4.45% (LOC: US Bank) (Note C) 4.45 2,250,000
400,000 Highline Water Dist. Rev. Bonds, 4.05%, due 11/1/00 (Insured: MBIA) 4.00 400,000
800,000 Motor Vehicle Fuel Tax GO Bonds, Ser. B, 6.00%, due 6/1/01 4.60 806,143
1,300,000 Olympia EDC Rev. Bonds (Spring Air Northwest Proj.) VRDN, 4.50% (LOC: US Bank) (Note C) 4.50 1,300,000
1,000,000 Port of Seattle IDR Bonds (Alaska Airlines Inc.) VRDN, 4.30%
(LOC: Bank of New York) (Note C) 4.30 1,000,000
740,000 Port of Seattle Rev. Bonds, 4.40%, due 2/1/01 4.40 740,000
2,000,000 Port of Seattle Rev. Bonds, Ser. 1997 VRDN, 4.55%
(LOC: Canadian Imperial Bank of Commerce) (Note C) 4.55 2,000,000
1,000,000 Snohomish Cty. GO Bonds, 4.75%, due 12/1/00 (Insured: MBIA) 3.95 1,000,634
--------------
25,127,339
--------------
WEST VIRGINIA--1.1%
775,000 Hsg. Dev. Rev. Bonds, Ser. B, 4.40%, due 11/1/00 4.50 775,000
5,200,000 Public Energy Auth. (Morgantown Energy Assoc. Proj.) Ser. 1989A, 4.15%, due 11/13/00
(LOC: Credit Locale de France) 4.10 5,200,000
--------------
5,975,000
--------------
WISCONSIN--0.0%
200,000 Taylor Cty. GO Bonds, 4.90%, 3/1/01 (Insured: MBIA) 4.50 200,254
--------------
TOTAL MUNICIPAL OBLIGATIONS (Cost $527,530,524)--100.8% 527,530,524
LIABILITIES IN EXCESS OF OTHER ASSETS--(0.8%) (3,962,624)
---------------
NET ASSETS--100.00% $ 523,567,900
===============
Please see accompanying notes to the schedules of investments and financial statements.
</TABLE>
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<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL OBLIGATIONS
CALIFORNIA--96.3%
$ 300,000 Alternative Energy Source Fin. Auth. Rev. Bonds, Ser. 1986 VRDN, 4.25%
(LOC: Banque Nationale de Paris) (Note C) 4.25 $ 300,000
4,500,000 Big Bear Lake Rev. Bonds (SW Gas Corp. Proj.) Ser. A VRDN, 3.90% (LOC: KBC Bank) (Note C) 3.90 4,500,000
1,100,000 Colton Redev. Agy. Rev. Bonds, Ser. 1985A VRDN, 3.40% (LOC: FHLB) (Note C) 3.40 1,100,000
5,000,000 Educ. Fac. Auth. Rev. Bonds (California Inst. of Technology) VRDN, 3.70% (Note C) 3.70 5,000,000
1,000,000 El Dorado Cty. Rev. Bonds, 7.40%, due 11/1/00 prerefunded @102 (Note D) 3.45 1,020,000
115,000 Fresno USD COP, 4.00%, due 11/1/00 (Insured: FSA) 4.00 115,000
4,800,000 GO Bonds (Muni Trust) Ser. SGB7 VRDN, 3.63% (LIQ: Societe Generale) (Notes C, E) 3.63 4,800,000
9,770,000 GO Bonds, Ser. BJ, 3.60%, put 6/1/01 4.00 9,741,607
9,800,000 Health Fac. Fin. Auth. Rev. Bonds (Pooled Loan Prog.)
Ser. B VRDN, 3.75% (SBPA: FGIC) (Note C) 3.75 9,800,000
3,380,000 Health Facs. Fin. Auth. Rev. Bonds (Kaiser Permanente) Ser. A, 7.00%, due 12/1/00
prerefunded @102 (Note D) 3.68 3,456,278
1,675,000 HFA Rev. Bonds, Ser.W, 3.90%, due 10/1/01 3.90 1,675,000
8,150,000 Infrastructure & EDR Bonds (Independent Systems) Ser. B VRDN, 3.75%
(SBPA: Westdeutche Landesbank GZ, Bayerische Landesbank GZ,
Morgan Guaranty Trust) (Note C) 3.75 8,150,000
1,300,000 Los Angeles Community Redev. Agy. Rev. Bonds (Grand Promenade Proj.) VRDN, 3.95%
(LOC: Bank of America) (Note C) 3.95 1,300,000
9,000,000 Los Angeles Cty. Capital Lease COP Notes, 3.60%, due 11/8/00 (LOC: Westdeutche
Landesbank GZ, Bayerische Landesbank GZ, Morgan Guaranty Trust) 3.60 9,000,000
4,800,000 Los Angeles Cty. COP, 6.708%, due 5/1/01 prerefunded @102 (Note D) 4.15 4,956,278
1,600,000 Los Angeles Cty. Pension Obligation Rev. Bonds, Ser. B VRDN, 3.75%
(SBPA: Credit Local de France) (Note C) 3.75 1,600,000
1,000,000 Los Angeles Dept. Water & Power Rev. Bonds, 3.85%, due 11/2/00
(LOC: Bayerische Landesbank GZ, Bank of America, Credit Commerciale de France,
Morgan Guaranty Trust, Westdeutche Landesbank GZ) 3.85 1,000,000
510,000 Los Angeles Harbor Rev. Bonds, Ser. B, 6.00%, due 8/1/01 4.00 517,410
3,610,000 Los Angeles Hsg. Rev. Bonds, Ser. A VRDN, 3.85% (LOC: FHLB) (Note C) 3.85 3,610,000
1,200,000 Los Angeles MFH Rev. Bonds (Museum Terrace Apts) Ser. H VRDN, 3.95%
(LOC: Bank of America) (Note C) 3.95 1,200,000
2,000,000 Metropolitan Water Dist. of So. Cal., Ser. C, 3.80% (LIQ: Morgan Guaranty Trust) (Note C) 3.80 2,000,000
6,375,000 Mt. Diablo Hosp. Dist. Rev. Bonds, Ser. A, 7.00%, due 12/1/00 prerefunded @102 (Note D) 3.67 6,518,927
2,500,000 Mt. Diablo Hosp. Dist. Rev. Bonds, Ser. A, 8.00%, due 12/1/00 prerefunded @102 (Note D) 3.67 2,558,451
4,000,000 No. Cal. Trans. Auth. Rev. Bonds (Oregon Transmission) Ser. B, 3.50%, due 12/6/00
(LOC: Westdeutche Landesbank GZ) 3.50 4,000,000
4,000,000 Orange Cty. Spec. Fin. Auth. Rev. Bonds (Teeter Plan) Ser. B VRDN, 3.85%
(SBPA: First Union National Bank) (Note C) 3.85 4,000,000
3,055,000 Palmdale Comm. Redev. Agy. Rev. Bonds (MERLOT) Ser. 2000TTT, 4.05%, put 9/1/01
(LIQ: First Union National Bank) (Note E) 4.05 3,055,000
2,025,000 Riverside Cty. IDA Rev. Bonds (Merrick Engineering Inc.) VRDN, 3.90%
(LOC: Wells Fargo Bank) (Note C) 3.90 2,025,000
1,350,000 Sacramento Cty. GO Bonds, 8.20% due 12/1/00 prerefunded @ 102 (Note D) 3.50 1,382,023
3,910,000 Sacramento Cty. Sanitation Dist. GO Bonds (MERLOT) Ser. 2000SSS, 4.10%, put 8/1/01
(LIQ: First Union National Bank) (Note E) 4.10 3,910,000
2,000,000 Sacramento MUD (MERLOT) Ser. 2000 A10, 3.85%, put 10/1/01
(LIQ: First Union National Bank) (Note E) 3.85 2,000,000
4,000,000 Sacramento MUD Elec. Rev. Bonds (Muni Trust Receipts) Ser. SGB4 VRDN, 3.63%
(LIQ: Societe Generale) (Notes C, E) 3.63 4,000,000
5,000,000 Sacramento MUD Rev. Bonds, Ser I, 3.80%, due 11/3/00 (LOC: Bayerische Landesbank GZ,
Morgan Guaranty Trust, Westdeutche Landesbank GZ) 3.80 5,000,000
4,400,000 San Bernadino Cty. COP (County Center Refining Proj.) VRDN, 4.40%
(LOC: Canadian Imperial Bank of Commerce) (Note C) 4.40 4,400,000
1,000,000 San Bernadino Cty. COP, Ser. B, 7.00%, due 8/1/01 prerefunded @102 (Note D) 3.80 1,042,744
1,300,000 San Diego Cty. COP, 5.00%, due 9/1/01 (Insured: AMBAC) 3.80 1,312,622
2,000,000 San Diego Cty. Transportation Sales Tax Rev. CP Notes, Ser. A, 3.60%, due 11/7/00
(LOC: Morgan Guaranty Trust) 3.65 2,000,000
1,500,000 San Dimas Redev. IDB Rev. Bonds (French Co. Proj.) VRDN, 3.85%
(LOC: Credit Commerciale de France) (Note C) 3.85 1,500,000
3,600,000 San Francisco Bay Area Rapid Transit Fin. Auth. CP Notes, 3.60%, due 11/9/00
(LOC: Bayerische Landesbank GZ) 3.60 3,600,000
8,000,000 San Francisco Bay Area Rapid Transit Fin. Auth. CP Notes, Ser. F, 3.65%, due 12/7/00
(LOC: State Street) 3.65 8,000,000
</TABLE>
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32
<PAGE>
<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 1,020,000 Santa Ana Hsg. Auth. Rev. Bonds (Harbor Private Apts.) Ser. A VRDN, 3.85%
(LOC: FNMA) (Note C) 3.85 $ 1,020,000
800,000 Santa Cruz Hsg. Auth. Rev. Bonds (Paloma Del Mar Apts.) Ser. A VRDN, 3.70%
(LOC: Wells Fargo) (Note C) 3.70 800,000
2,000,000 School Fac. Fin. Corp. COP (Capital Improvement ) Ser. D VRDN, 3.95%
(LOC: KBC Bank) (Note C) 3.95 2,000,000
3,500,000 Southern CA Pub. Power Auth. Rev. Bonds (Palo Verde Proj.) Ser. B VRDN, 3.75%
(SBPA: Morgan Guaranty Trust) (Note C) 3.75 3,500,000
7,200,000 Southern CA Pub. Power Auth. Rev. Bonds (Southern Transmission) VRDN, 3.75%
(LOC: Barclays Bank) (Note C) 3.75 7,200,000
5,000,000 Stanislaus Waste To Energy Rev. Bonds (Ogden Martin Proj. ) VRDN, 3.75%
(SBPA: Morgan Guaranty Trust) (Note C) 3.75 5,000,000
6,000,000 Statewide CDA (Fairfax Towers Proj.) Ser. A VRDN, 3.85% (LOC: FNMA) (Note C) 3.85 6,000,000
11,000,000 Statewide CDA Rev. Bonds, Ser. N-6 VRDN, 4.00% (SBPA: Bank of New York) (Note C) 4.00 11,000,000
9,900,000 Transit Fin. Auth. Rev. Bonds, Ser. 1997 VRDN, 3.75%
(SBPA: Credit Suisse First Boston) (Note C) 3.75 9,900,000
4,000,000 Univ. of CA Board of Regents, CP Notes, Ser. A, 3.60%, due 12/13/00 3.60 4,000,000
10,000,000 Watereuse Fin. Auth. Rev. Bonds, VRDN, 3.75% (SBPA: Credit Suisse First Boston) (Note C) 3.75 10,000,000
11,000,000 West Basin Muni. Water Dist. Rev. Bonds (Phase III Recycled Water) Ser. A VRDN, 3.70%
(LOC: Bayerische Hypo -und Vereinsbank AG) (Note C) 3.70 11,000,000
--------------
206,566,340
--------------
PUERTO RICO--3.0%
1,500,000 Highway & Transportation Auth. Rev. Bonds (ROC II TR1) VRDN, 3.63%
(LIQ: Salomon Smith Barney) (Notes C, E) 3.63 1,500,000
5,000,000 Highway & Transportation Auth. Rev. Bonds (ROC 2) VRDN, 3.63%
(LIQ: Salomon Smith Barney)(Notes C, E) 3.63 5,000,000
--------------
6,500,000
--------------
TOTAL MUNICIPAL OBLIGATIONS (Cost $213,066,340)--99.3% 213,066,340
OTHER ASSETS AND LIABILITIES, NET--0.7% 1,479,578
--------------
NET ASSETS--100.00% $ 214,545,918
==============
</TABLE>
Please see accompanying notes to the schedules of investments and financial
statements.
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33
<PAGE>
<TABLE>
<CAPTION>
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TD WATERHOUSE FAMILY OF FUNDS, INC.
NEW YORK MUNICIPAL MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 2000
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL OBLIGATIONS
NEW YORK--95.0%
$ 485,000 Altmar Parish-Williamstown CSD GO Bonds, 5.10%, due 6/15/01 (Insured: FGIC) 4.05 $ 487,908
4,500,000 Babylon IDA Rev. Bonds (Ogden Martin Proj.) VRDN, 4.00%
(SBPA: Chase Manhattan Bank) (Note C) 4.00 4,500,000
400,000 Campbell-Savona CSD GO Bonds, 4.50%, due 6/15/01 (Insured: FSA) 4.10 401,069
4,300,000 Dorm. Auth. Rev. Bonds (FFT Senior Community Inc.) Ser. A VRDN, 4.10%
(LOC: KBC Bank) (Note C) 4.10 4,300,000
1,500,000 Dorm. Auth. Rev. Bonds (Sloan Kettering Cancer Center.) Ser. 1989B VRDN, 4.20%
(LOC: Chase Manhattan Bank) (Note C) 4.20 1,500,000
500,000 Energy Research & Dev. Auth. Rev. Bonds (Niagara Mohawk Power), Ser. 1986A VRDN, 4.60%
(LOC: Bank One) (Note C) 4.60 500,000
4,200,000 Energy Research & Dev. Auth. PCR Bonds (Orange & Rockland Ctys.) Ser. A VRDN, 4.00%
(LIQ: Societe Generale) (Note C) 4.00 4,200,000
4,000,000 Env. Fac. Solid Waste Rev. Bonds (General Elec. Co. Proj.) 4.25%, due 11/6/00 4.25 4,000,000
2,000,000 Erie Cty. Water Auth. Rev. Bonds, Ser. A VRDN, 4.00%
(SBPA: National Australia Bank) (Note C) 4.00 2,000,000
2,705,000 Geneva HFA Rev. Bonds (Depaul Community Facs.) Ser. A VRDN, 4.25% (LOC: FHLB) (Note C) 4.25 2,705,000
445,000 Herkimer CSD GO Bonds, 5.12%, due 6/15/01 (Insured: FSA) 4.45 447,462
5,000,000 HFA (Service) Ser. A VRDN, 4.00% (LOC: Commerzbank) (Note C) 4.00 5,000,000
4,100,000 HFA Rev. Bonds (150 East 44th St. Proj.) Ser. A VRDN, 4.20% (LOC: Fleet Bank) (Note C) 4.20 4,100,000
1,400,000 HFA Rev. Bonds (Gethsemane Apts. Proj.) Ser. A VRDN, 4.35% (LOC: FHLB) (Note C) 4.35 1,400,000
195,000 HFA Rev. Bonds (Mental Hygeine) 7.60%, due 5/1/01 (Escrowed to Maturity in
U.S. Government Securities) (Note D) 4.35 198,082
412,000 Highland CSD GO Bonds, 5.00% due 6/15/01 (Insured: FSA) 4.10 414,220
2,000,000 Local Govt. Assistance Corp., Ser. D VRDN, 4.15% (LOC: Societe Generale) (Note C) 4.15 2,000,000
4,100,000 Local Govt. Assistance Corp., Ser. G VRDN, 4.00% (LOC: Bank of Nova Scotia) (Note C) 4.00 4,100,000
4,400,000 Med. Care Fac. Fin. Auth. Rev. Bonds (Lenox Hill Hosp.) Ser. A VRDN, 4.25%
(LOC: Chase Manhattan Bank) (Note C) 4.25 4,400,000
4,900,000 Metropolitan Transportation Auth. Rev. Bonds, 4.20% due 12/6/00 (LOC: ABN-AMRO Bank) 4.20 4,900,000
325,000 Monroe Cty. GO Bonds, 5.00%, due 3/1/01 4.25 325,759
1,910,000 Muni Assistance Corp. , Ser. G, 5.50%, due 7/1/01 4.20 1,925,961
250,000 Nassau Cty. GO Bonds, Ser. E, 5.00%, due 5/1/01 (Insured: MBIA) 4.35 250,425
1,500,000 Nassau Cty. GO Bonds, Ser. Z, 4.25%, due 9/1/01 (Insured: FGIC) 4.25 1,500,000
4,040,000 NYC Cultural Res. Rev. Bonds (American Museum of Natural History) Ser. B VRDN, 4.00%
(SBPA: Credit Suisse First Boston) (Note C) 4.00 4,040,000
4,000,000 NYC GO Bonds, Ser. 1994 A6 VRDN, 4.15% (LOC: Landesbank Hessen-Thueringen GZ) (Note C) 4.15 4,000,000
1,500,000 NYC GO Bonds, Ser, 1995 F3 VRDN, 4.20% (LOC: Morgan Guaranty Trust) (Note C) 4.20 1,500,000
250,000 NYC GO Bonds, Series A, 7.75% due 8/15/01 prerefunded @ 101.5 (Note D) 4.25 260,182
700,000 NYC IDA Rev. Bonds (USA Waste Services) VRDN, 4.25% (LOC: KBC Bank) (Note C) 4.25 700,000
4,000,000 NYC Muni Water Fin. Auth CP Notes, Ser. 5A, 4.00% due 11/8/00
(LOC: Landesbank Hessen-Theuringen GZ, Bayerische Landesbank GZ,
Westdeutche Landesbank GZ) 4.00 4,000,000
800,000 NYC Transitional Fin. Auth. Rev. Bonds (Trust Receipts) Ser. A16 VRDN, 5.25%
(LIQ: Bayerische Hypo -und Vereinsbank AG) (Notes C, E) 5.25 800,000
3,000,000 Oyster Bay GO BANS, 5.13%, due 9/28/01 4.70 3,011,021
5,000,000 Oyster Bay GO BANS, Ser. C, 5.00%, due 8/24/01 4.40 5,022,711
1,400,000 Port Authority of NY & NJ, Ser. 1996-5 VRDN, 4.60% (SBPA:
Bayerische Landesbank GZ) (Note C) 4.60 1,400,000
2,365,000 Suffolk Cty. IDA Rev. Bonds (Target Rock Corp.) Ser. 1987 VRDN, 4.10%
(LOC: Scotia Bank) (Note C) 4.10 2,365,000
5,000,000 Thruway Auth. Service Contract Rev. Bonds (Eagle Trust) Ser. 2000305 VRDN, 3.95%
(LIQ: Citibank) (Notes C, E) 3.95 5,000,000
4,500,000 Triborough Bridge & Tunnel Auth. GO Bonds (Trust Receipts), Ser. N17 VRDN, 4.35%
(SBPA: Bank of New York) (Notes C, E) 4.35 4,500,000
1,700,000 Triborough Bridge & Tunnel Auth. GO RANS, Ser. 2000A VRDN, 4.35%
(SBPA: Bank of New York) (Note C) 4.35 1,700,000
680,000 Webster CSD GO BANS, 4.88%, due 6/15/01 4.45 681,733
1,126,000 Webster CSD GO Bonds, 4.80%, due 6/15/01 4.05 1,131,053
--------------
95,667,586
--------------
PUERTO RICO--4.5%
4,500,000 Highway & Transportation Auth. Rev. Bonds (ROC) VRDN, 3.63%
(LIQ: Salomon Smith Barney) (Notes C, E) 3.63 4,500,000
--------------
TOTAL MUNICIPAL OBLIGATIONS (Cost $100,167,586)--99.5% 100,167,586
OTHER ASSETS AND LIABILITIES, NET--0.5% 538,220
--------------
NET ASSETS--100.00% $ 100,705,806
==============
</TABLE>
Please see accompanying notes to the schedules of investments and financial
statements.
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34
<PAGE>
TD WATERHOUSE FAMILY OF FUNDS, INC.
NOTES TO SCHEDULES OF INVESTMENTS
October 31, 2000
(A) Variable rate securities. The rates shown are the current rates on
October 31, 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 October 31, 2000,
the aggregate market value of these securities, valued at
amortized cost, is $527,722,383, representing 8.6% of net assets
of the Money Market Portfolio, and $37,500,000, representing 4.2%
of the net assets of the U.S. Government Portfolio.
(C) Securities payable on demand. The interest rate, which is subject
to change, is based upon bank prime rates or an index of market
rates.
(D) Bonds which are prerefunded or escrowed to maturity are
collateralized by U.S. Government Securities which are held in
escrow and are used to pay principal and interest on the municipal
issue and to retire the bonds in full at the earliest refunding
date.
(E) Security exempt from registration under the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At
October 31, 2000, these securities amounted to $1,879,588,639, or
30.5% of net assets of the Money Market Portfolio, $87,050,164 or
16.6% of net assets of the Municipal Portfolio, $24,265,000 or
11.3% of net assets of the California Municipal Money Market
Portfolio, and $14,800,000 or 14.7% of net assets of the New York
Municipal Money Market Portfolio.
(F) Security may be extended at issuer's option as a floating rate
note with a final maturity no longer than 390 days from date of
purchase. Maturity date listed is the expected redemption date.
DESCRIPTION OF ABBREVIATIONS
<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corporation IDC Industrial Development Corporation
BANS Bond Anticipation Note IDR Industrial Development Revenue Bond
COP Certificates of Participation IRB Industrial Revenue Bonds
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 Insurance Corporation
EDR Economic Development Revenue MFH Multi-Family Housing
FGIC Financial Guaranty Insurance Company MUD Municipal Urban Development
FHLB Federal Home Loan Bank PCR Pollution Control Revenue Bond
FNMA Federal National Mortgage Association RANS Revenue Anticipation Notes
FSA Financial Security Assurance Inc. ROC Reset Option Certificate
GO General Obligation SBPA Standby Bond Purchase Agreement
GTY Guarantee SD School District
HEFA Health & Education Facilities Authority SLMA Student Loan Marketing Association
HDA Housing Development Authority SFM Single Family Mortgage
HFA Housing Finance Authority TANS Tax Anticipation Notes
HFC Housing Finance Commission TRANS Tax Revenue Anticipation Notes
IDA Industrial Development Authority USD Unified School District
IDB Industrial Development Board 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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35
<PAGE>
Report of Independent Auditors
Shareholders and Board of Directors
TD Waterhouse Family of Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the TD Waterhouse Family of Funds, Inc.
(comprising, respectively, the Money Market Portfolio, the U.S. Government
Portfolio, the Municipal Portfolio, the California Municipal Money Market
Portfolio and the New York Municipal Money Market Portfolio) as of October 31,
2000, and the related statements of operations for the year then ended and the
statements of changes in net assets and financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 2000 by correspondence with
the custodian and others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the TD Waterhouse Family of Funds,
Inc. at October 31, 2000, the results of their operations for the year then
ended and the changes in their net assets and the financial highlights for each
of the indicated periods, in conformity with accounting principles generally
accepted in the United States.
/s/ Ernst & Young LLP
New York, New York
December 1, 2000
<PAGE>
2000
Annual Report
October 31, 2000
[GRAPHIC OMITTED]
TD Waterhouse
Dow 30
Fund
[LOGO]
<PAGE>
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<TABLE>
<CAPTION>
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 President and CEO of Vice President and Secretary
Management, Inc. 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,
TDWaterhouse 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, Administration
& Operations
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
</TABLE>
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38
<PAGE>
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TD WATERHOUSE DOW 30 FUND
Dear Shareholder:
--------------------------------------------------------------------------------
We are pleased to provide you with the annual report for the TD Waterhouse Dow
30 Fund (the "Fund") for the fiscal year ended October 31, 2000. Total net
assets for the Fund were approximately $160.7 million as of October 31, 2000.
The Dow Jones Industrial Average(SM) ("DJIA"(SM)) ended the period up 2.25%,
starting at 10,729.86 on October 31, 1999 and finishing at 10,971.14 on October
31, 2000. Over the Fund's past fiscal year, the DJIA has largely remained in a
wide range between a low of about 10,000 and a high of about 11,500. On a total
return basis, which includes reinvested dividends, the annual return for the
DJIA was +3.78%.
Your Fund had a total return for the same period of +3.56%, 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]
--------------------------------------------------------------------------------
Dow 30 Fund Average Annual Return as of 10/31/00:
One Year: 3.56%
Since Inception (3/31/98): 10.54%
--------------------------------------------------------------------------------
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 12 months ended
October 31, 2000 is shown in the chart below. As can be seen in the chart, there
was an unusually wide disparity in performance among the individual stocks.
During the period, several companies executed stock splits, including Home Depot
Inc. (3-for-2), General Electric Co. (3-for-1), American Express Co. (3-for-1),
Alcoa Inc. (2-for-1), Intel Corp. (2-for-1), Citigroup Inc. (4-for-3), and
Hewlett-Packard Co. (2-for-1). In addition, Hewlett-Packard Co. spun off its
Agilent Technologies Inc. subsidiary.
--------------------------------------------------------------------------------
39
<PAGE>
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<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Price Price
Appreciation* DJIA Component Appreciation* DJIA Component
------------------------------------------------------------------------------------------------
<S> <C>
60.7% Hewlett-Packard Co. 0.1% Int'l Business Machines Corp.
------------------------------------------------------------------------------------------------
47.2% The Boeing Co. -5.5% Honeywell International
------------------------------------------------------------------------------------------------
45.4% Philip Morris Cos. Inc. -5.6% Alcoa Inc.
------------------------------------------------------------------------------------------------
35.8% The Walt Disney Co. -11.6% General Motors Corp.
------------------------------------------------------------------------------------------------
29.6% Citigroup Inc. -12.1% Johnson & Johnson
------------------------------------------------------------------------------------------------
26.5% J.P. Morgan & Co., Inc. -14.6% Home Depot Inc.
------------------------------------------------------------------------------------------------
21.3% General Electric Co. -20.0% Wal-Mart Stores, Inc.
------------------------------------------------------------------------------------------------
20.4% Exxon Mobil Corp. -24.9% McDonald's Corp.
------------------------------------------------------------------------------------------------
16.9% American Express Co. -25.6% Microsoft Corp.
------------------------------------------------------------------------------------------------
16.2% Intel Corp. -29.6% E.I. du Pont de Nemours and Co.
------------------------------------------------------------------------------------------------
15.4% United Technologies Corp. -30.4% International Paper Co.
------------------------------------------------------------------------------------------------
13.3% SBC Communications Inc. -31.9% The Proctor & Gamble Co.
------------------------------------------------------------------------------------------------
13.0% Merck & Co., Inc. -34.9% Eastman Kodak Co.
------------------------------------------------------------------------------------------------
2.3% The Coca-Cola Company -36.5% Caterpillar Inc.
------------------------------------------------------------------------------------------------
1.6% Minnesota Mining & Mfg. Co. -50.4% AT&T Corp.
------------------------------------------------------------------------------------------------
(c) 2000 Dow Jones & Company
</TABLE>
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 12-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 fiscal year was
marked by significant volatility. Most recently, investor sentiment has been
primarily influenced by valuation concerns, as surging oil prices and a falling
European currency - the "Euro" pressured the earnings of several companies.
Combined with several interest rate increases engineered by the Federal Reserve
Open Market Committee ("Federal Reserve"), investors were forced to consider
lowering their expectations for the economy's future growth rate and corporate
profits. While the U.S. economy expanded at a strong pace over the last four
calendar quarters, growing at an average annualized rate of over 5.0%, there are
signs that the growth rate could be adjusting to a slower, more sustainable
pace. This is largely due to the Federal Reserve's six interest rate increases
since June 1999. The ultimate impact of these rate adjustments on corporate
earnings, stock prices, economic growth and inflation are uncertain at this
point in time.
Looking forward to the next six months, the market's direction will likely be
primarily affected by how quickly and by how much the economy slows, as well as
by the impact of this slowing on corporate earnings, interest rates,
inflationary trends, 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 1-800-934-4448 and press option number 4 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.
December 12, 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.
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<PAGE>
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----------------------------
Table of Contents
----------------------------
Schedule of Investments ................................................... 42
Statement of Assets and Liabilities ....................................... 43
Statement of Operations ................................................... 44
Statement of Changes in Net Assets ........................................ 45
Financial Highlights ...................................................... 46
Notes to Financial Statements ............................................. 47
Report of Independent Auditors ............................................ 51
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41
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
Schedule of Investments
October 31, 2000
NUMBER OF
SHARES VALUE
-----------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
Alcoa Inc. 87,925 $ 2,522,348
American Express Co. 87,925 5,275,500
AT&T Corp. 87,925 2,038,761
The Boeing Co. 87,925 5,962,414
Caterpillar Inc. 87,925 3,082,870
Citigroup Inc. 87,925 4,627,053
The Coca-Cola Company 87,925 5,308,472
E.I. du Pont de Nemours and Co. 87,925 3,989,597
Eastman Kodak Co. 87,925 3,945,634
Exxon Mobil Corp. 87,925 7,841,811
General Electric Co. 87,925 4,819,389
General Motors Corp. 87,925 5,462,341
Hewlett-Packard Co. 87,925 4,083,017
Home Depot Inc. 87,925 3,780,775
Honeywell International 87,925 4,731,464
Intel Corp. 87,925 3,956,625
International Business Machines Corp. 87,925 8,660,613
International Paper Co. 87,925 3,220,253
J.P. Morgan & Co., Inc. 87,925 14,551,588
Johnson & Johnson 87,925 8,100,091
McDonald's Corp. 87,925 2,725,675
Merck & Co., Inc. 87,925 7,907,755
Microsoft Corp.(A) 87,925 6,055,834
Minnesota Mining & Manufacturing Co. 87,925 8,495,753
Philip Morris Cos., Inc. 87,925 3,220,253
The Proctor & Gamble Co. 87,925 6,281,142
SBC Communications Inc. 87,925 5,072,173
United Technologies Corp. 87,925 6,138,264
Wal-Mart Stores, Inc. 87,925 3,989,597
The Walt Disney Co. 87,925 3,148,814
-----------
TOTAL COMMON STOCKS (cost $152,905,986)--98.9% 158,995,876
-----------
OTHER (cost $361,813)--0.2%
Diamonds(SM) Trust, Series 1 3,485 381,281
-----------
REPURCHASE AGREEMENT--0.6%
ABN AMRO Inc. (Par Value & Cost $900,000)
~dated 10/31/00, due 11/1/00, 6.61%, in the amount of $900,165
~fully collateralized by $890,000 U.S. Government Securities, 7.12%, 11/15/01,
value $922,736 900,000
-----------
U.S. GOVERNMENT OBLIGATIONS (cost $99,392)--0.1%
United States Treasury Bill, dated 12/9/00, matures 12/7/00,
par value $100,000, yield at time of purchase 6.18%(B) 99,390
-----------
TOTAL INVESTMENTS (cost $154,267,191)--99.8% 160,376,547
OTHER ASSETS AND LIABILITIES, NET--0.2% 327,639
-----------
NET ASSETS--100.0% $160,704,186
============
</TABLE>
(A) Non-income producing security
(B) Security pledged as collateral on open futures contracts
Please see accompanying notes to financial statements.
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42
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
Statement of Assets and Liabilities
October 31, 2000
<S> <C>
ASSETS
Investments in securities, at value (cost $154,267,191) $160,376,547
Dividend and interest receivable 107,341
Receivable for capital shares sold 361,878
Receivable for investment securities sold 4,109,148
Receivable from broker 155,589
Variation margin receivable 22,500
-------------
Total Assets 165,133,003
LIABILITIES
Bank overdraft 90,762
Payable for capital shares redeemed 127,892
Payable for investment securities purchased 4,140,923
Payable to Investment Manager and its affiliates (Note 3) 11,619
Other accrued expenses 57,621
-------------
Total Liabilities 4,428,817
-------------
NET ASSETS $160,704,186
=============
Net assets consist of:
Paid-in-capital 140,026,169
Accumulated net realized gains from security transactions 14,642,193
Net unrealized appreciation on investments and futures contracts 6,035,824
-------------
Net assets, at value $160,704,186
=============
Shares of beneficial interest outstanding 14,653,522
=============
Net asset value, redemption price and offering price per share (Note 2) $ 10.97
=============
Please see accompanying notes to financial statements.
----------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
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TD WATERHOUSE DOW 30 FUND
Statement of Operations
For the Year Ended October 31, 2000
INVESTMENT INCOME
Dividend income $ 2,682,335
Interest income 12,179
------------
Total Investment Income 2,694,514
------------
EXPENSES
Shareholder servicing fees (Note 3) 439,598
Investment management fees (Note 3) 351,678
Custody fees (Note 2) 91,928
Transfer agent fees (Note 3) 87,920
Professional fees 78,831
Registration fees 55,675
Shareholder reports and mailing 49,355
Trustees' fees 22,589
Other expenses 13,021
------------
TOTAL EXPENSES 1,190,595
Fees waived/expenses reimbursed by the Investment Manager
and its affiliates (Note 3) (751,009)
------------
Net Expenses 439,586
------------
Net Investment Income 2,254,928
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 15,234,788
Net change in unrealized depreciation on investments (11,035,243)
Net change in unrealized depreciation on futures contracts (73,532)
------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 4,126,013
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 6,380,941
============
Please see accompanying notes to financial statements.
--------------------------------------------------------------------------------
44
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TD WATERHOUSE DOW 30 FUND
Statement of Changes in Net Assets
Year Year
Ended Ended
October 31, October 31,
2000 1999
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,254,928 $ 1,622,456
Net realized gains from security transactions 15,234,788 2,545,555
Net change in unrealized appreciation/depreciation on investments (11,108,775) 17,310,316
-------------- -------------
Net increase in net assets from operations 6,380,941 21,478,327
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (2,264,934) (1,622,456)
In excess of net investment income -- (2,724)
From net realized gains on security transactions (3,057,262) --
-------------- -------------
Total distributions to shareholders (5,322,196) (1,625,180)
-------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 88,503,495 155,677,326
Reinvestment of dividends 5,322,196 1,625,180
Payments for shares redeemed (109,491,695) (64,055,262)
-------------- -------------
Net increase (decrease) in net assets from capital share transactions (15,666,004) 93,247,244
-------------- -------------
Total Increase (Decrease) in Net Assets (14,607,259) 113,100,391
NET ASSETS:
Beginning of period 175,311,445 62,211,054
-------------- -------------
End of period $160,704,186 $175,311,445
============== =============
CAPITAL STOCK TRANSACTIONS:
Shares sold 8,195,894 15,233,177
Shares issued for dividends reinvested 492,427 159,759
Shares redeemed (10,094,133) (6,294,226)
Effect of reverse stock split (281,516) --
-------------- -------------
Net increase (decrease) in shares outstanding (1,687,328) 9,098,710
============== =============
</TABLE>
Please see accompanying notes to financial statements.
--------------------------------------------------------------------------------
45
<PAGE>
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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 the periods indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Year Period
Ended Ended Ended
October 31, October 31, October 31,
2000 1999+ 1998*+
--------------- --------------- --------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 10.91 $ 8.74 $ 8.93
--------------- --------------- --------------
INVESTMENT OPERATIONS
Net investment income 0.13 0.14 0.08
Net realized and unrealized gains (losses) on
investments 0.25 2.17 (0.19)
--------------- --------------- --------------
Total From Investment Operations 0.38 2.31 (0.11)
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income (0.13) (0.14) (0.08)
Distributions from realized gains on investments (0.19) -- --
--------------- --------------- --------------
Total Distributions (0.32) (0.14) (0.08)
NET ASSET VALUE, END OF PERIOD $ 10.97 $ 10.91 $ 8.74
=============== =============== ==============
RATIOS
Ratio of net expenses to average net assets 0.25% 0.25% 0.25%(A)
Ratio of net investment income to average net assets 1.28% 1.37% 1.48%(A)
Decrease reflected in above expense ratio due to
waivers/reimbursements by the Investment Manager
and its affiliates (Note 3) 0.43% 0.43% 0.55%(A)
SUPPLEMENTAL DATA
Portfolio turnover rate 38% 47% 8%(A)
Total investment return (B) 3.56% 26.72% (1.19%)
Net assets, end of period $ 160,704,186 $ 175,311,445 $ 62,211,054
=============== =============== ==============
Average net assets $ 175,715,409 $ 118,399,466 $ 28,460,853
=============== =============== ==============
</TABLE>
* The Fund commenced operations on March 31, 1998.
+ Adjusted for a .983262 to 1 reverse stock split paid to shareholders of
record on December 2, 1999.
(A) Annualized.
(B) Total investment return is calculated assuming a purchase of shares on the
first day and a sale on the last day of the period reported and includes
reinvestment of dividends.
Please see accompanying notes to financial statements.
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46
<PAGE>
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TD WATERHOUSE DOW 30 FUND
Notes to Financial Statements
For the Year Ended October 31, 2000
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") and currently consists of eight funds
including the TD Waterhouse Dow 30 Fund (the "Fund"). 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(SM) 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.
Futures Contracts -- The Fund may invest in stock index futures contracts. The
Fund is required to deposit with the broker an amount of cash equivalents equal
to a certain percentage of the contract amount. This is known as the "initial
margin." The "variation margin" represents the daily fluctuation in the value of
the contract. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the time it was closed. The Fund may purchase index futures
contracts for several reasons: to simulate full investment in the underlying
index while retaining a cash balance for fund management purposes, to facilitate
trading, to reduce transactions costs, or to seek higher investment returns when
a futures contract is priced more attractively than securities in the index.
As of October 31, 2000, the Fund had the following open futures contracts: 18
DJIA Index Futures contracts expiring in December 2000, market value covered by
the contracts of $1,983,960, and unrealized depreciation of $73,532.
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.
--------------------------------------------------------------------------------
47
<PAGE>
--------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
Notes to Financial Statements
For the Year Ended October 31, 2000
(continued)
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. Expenses which are applicable to all funds in the Trust are
allocated on a pro rata basis.
Use of Estimates -- The Fund's financial statements are prepared in accordance
with accounting principles generally accepted in the United States, 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.
Reclassification of Capital Components -- As of October 31, 2000, to reflect
permanent book to tax differences, the Fund reclassified $10,006 from
accumulated net realized gains from security transactions to undistributed net
investment income. This reclassification had no effect on net assets or net
asset value per share.
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 will limit the Fund's overall expense ratio to no more than 0.45% on an
annual basis; however, for the fiscal year ended October 31, 2000, the
investment manager limited expenses to 0.25%. All expense limitations are
voluntary. For the year ended October 31, 2000, the Investment Manager
voluntarily waived $300,404 of its investment management fee.
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, 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.
--------------------------------------------------------------------------------
48
<PAGE>
TD WATERHOUSE DOW 30 FUND
Notes to Financial Statements
For the Year Ended October 31, 2000
(continued)
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 .25 of 1% of average daily net
assets. For the year ended October 31, 2000, TD Waterhouse voluntarily waived
$375,504 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
year ended October 31, 2000, the Transfer Agent voluntarily waived $75,101 of
its transfer agent fee for the Fund.
Each Trustee who is not an "interested person" as defined in the Act, who serves
on the Board of Trustees/Directors of one or more investment companies 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 $15,000, payable quarterly,
2. a supplemental annual retainer of $6,000, if serving on the Board of
Trustees/Directors of more than two companies in the Fund Complex,
3. an additional supplemental annual retainer of $2,500, if serving on the
Board of Trustees/Directors of three or more companies in the Fund Complex,
and
4. a meeting fee of $3,000 for each meeting attended.
Compensation is allocated among the companies and the respective funds.
The Fund placed all of its portfolio transactions with TD Waterhouse. There were
no commissions paid to TD Waterhouse for the year ended October 31, 2000.
NOTE 4 - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investment securities, other
than short-term investments, amounted to $66,208,252 and $82,263,317,
respectively, for the year ended October 31, 2000.
The cost of portfolio investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes as of
October 31, 2000. Accordingly, net unrealized appreciation for Federal income
tax purposes aggregated $6,109,356, consisting of $21,009,271 gross unrealized
appreciation and $14,899,915 gross unrealized depreciation.
--------------------------------------------------------------------------------
49
<PAGE>
--------------------------------------------------------------------------------
TD WATERHOUSE DOW 30 FUND
Notes to Financial Statements -- October 31, 2000
(continued)
NOTE 5 -- SUBSEQUENT EVENT
On December 8, 2000, the Fund paid a capital gain distribution to shareholders
of record on December 7, 2000 in the amount of $1.20 per share (the short-term
capital gain distribution was $0.22 per share and the long-term capital gain
distribution was $0.98 per share). On the same day, the Fund declared a reverse
share split with a factor of 0.88674 in order to restore the Fund's net asset
value per share to at or near .001 (or 1/1000) of the closing value of the Dow
Jones Industrial Average.
Note 6-- Federal Tax Information (Unaudited)
As required by Federal regulations, shareholders will receive notification of
their portion of the Fund's taxable ordinary dividends and capital gains
distributions paid, (if any), for the 2000 calendar year early in 2001.
--------------------------------------------------------------------------------
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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50
<PAGE>
--------------------------------------------------------------------------------
Report of Independent Auditors
Shareholders and Board of Trustees
TD Waterhouse Dow 30 Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the TD Waterhouse Dow 30 Fund (one of the funds
comprising TD Waterhouse Trust) as of October 31, 2000, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 2000 by correspondence with
the custodian and others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the TD
Waterhouse Dow 30 Fund at October 31, 2000, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the indicated
periods, in conformity with accounting principles generally accepted in the
United States.
/s/Ernst & Young LLP
New York, New York
December 1, 2000
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51
<PAGE>
[TD WATERHOUSE LOGO]
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