UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-10407

Master Portfolio Trust
(Exact name of registrant as specified in charter)

55 Water Street, New York, NY 10041
(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.
Legg Mason & Co., LLC
300 First Stamford Place, 4^th Floor
Stamford, CT 06902
(Name and address of agent for service)

Registrant's telephone number, including area code: (800) 451-2010

Date of fiscal year end: August 31
Date of reporting period: February 29, 2008

ITEM 1.           REPORT TO STOCKHOLDERS.

The Semi-Annual Report to Stockholders is filed herewith.

Schedule of investments (unaudited)
February 29, 2008

TAX FREE RESERVES PORTFOLIO

FACE AMOUNT		SECURITY	VALUE
SHORT-TERM INVESTMENTS — 98.1%
		Alabama — 2.0%
$	4,800,000	Demopolis, AL, IDB, IDR, Delaware Mesa Farms Project,
		LOC-Wells Fargo Bank N.A., 3.120%, 3/6/08(a)(b)	$	4,800,000
	26,550,000	Lower Alabama Gas District, Alabama Gas Supply Revenue,
		LIQ FAC-Societe Generale, 3.160%, 3/6/08(a)		26,550,000
	20,700,000	Stevenson, AL, IDB, Environmental Improvement Revenue,
		The Mead Corp. Project, LOC-JPMorgan Chase, 3.060%, 3/5/08(a)(b)		20,700,000
		Total Alabama		52,050,000
		Alaska — 0.3%
	8,500,000	Valdez, AK, Marine Terminal Revenue, Refunding, BP Pipelines Inc. Project,
		3.000%, 3/5/08(a)		8,500,000
		Arizona — 0.5%
	8,245,000	Arizona State Transportation Board, Maricopa County Regional Area,
		4.000% due 7/1/08		8,263,542
	900,000	Coconino County, AZ, IDA, Scuff Steel Project, LOC-Wells Fargo Bank N.A.,
		3.260%, 3/6/08(a)(b)		900,000
	1,365,000	Maricopa County, AZ, IDA, MFH Revenue, Refunding Sonora Vista II
		Apartments, LOC-Wells Fargo Bank N.A., 3.230%, 3/6/08(a)(b)		1,365,000
	2,300,000	Phoenix, AZ, IDA, MFH Revenue, Refunding Sunrise Vista Apartments-A,
		LOC-Wells Fargo Bank N.A., 3.230%, 3/6/08(a)(b)		2,300,000
		Total Arizona		12,828,542
		California — 0.2%
	3,670,000	California Transit Finance Authority, FSA, SPA-Credit Suisse First Boston,
		3.080%, 3/5/08(a)		3,670,000
	1,600,000	Los Angeles, CA, Regional Airports Improvement Corp. Lease Revenue,
		Sublease Los Angeles International LAX 2, LOC-Societe Generale,
		3.950%, 3/3/08(a)		1,600,000
		Total California		5,270,000
		Colorado — 1.6%
		Colorado Educational & Cultural Facilities Authority Revenue,
		National Jewish Federation Bond Program:
	7,995,000	LOC-Bank of America, 3.500%, 3/3/08(a)		7,995,000
	2,500,000	LOC-JPMorgan Chase, 3.500%, 3/3/08(a)		2,500,000
		LOC-U.S. Bank N.A.:
	105,000	3.500%, 3/3/08(a)		105,000
	2,400,000	3.550%, 3/3/08(a)		2,400,000
		Colorado Health Facilities Authority Revenue:
	9,375,000	Refunding, Sisters Charity Health Systems, SPA-JPMorgan Chase,
		3.250%, 3/5/08(a)		9,375,000
	7,000,000	SPA-Landesbank Hessen-Thuringen, 3.200%, 3/5/08(a)		7,000,000
	3,400,000	Colorado HFA, SPA-Lloyds TSB Bank PLC, 3.250%, 3/5/08(a)		3,400,000
	1,410,000	Colorado HFA, EDR, Warneke Paper Box Co. Project, 3.260%, 3/6/08(a)(b)		1,410,000
	1,400,000	Colorado HFA, Single-Family Mortgage Program, Revenue,
		SPA-Depfa Bank PLC, 3.250%, 3/5/08(a)		1,400,000
	4,695,000	Weld County, CO, Economic Development Revenue, BSC Hudson LLC
		Project, LOC-Wells Fargo Bank NA, 3.260%, 3/6/08(a)(b)		4,695,000
		Total Colorado		40,280,000

See Notes to Financial Statements.

20  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO

FACE AMOUNT		SECURITY	VALUE
		Connecticut — 0.5%
$	8,250,000	Bethel Connecticut, GO, BAN, 4.000% due 8/26/08	$	8,276,627
	3,820,000	New Haven, CT, TECP, LOC Landesbank Hessen Thurigen, 2.560%
		due 6/10/08		3,820,000
		Total Connecticut		12,096,627
		Delaware — 1.2%
		Delaware State EDA Revenue:
	200,000	Hospital Billing Collection, LOC- JPMorgan Chase, 3.000%, 3/5/08(a)		200,000
	2,100,000	Hospital Billing, LOC-JPMorgan Chase, 3.200%, 3/5/08(a)		2,100,000
	10,500,000	St. Edmond’s Academy Project, LOC-Mercantile Safe Deposit,
		3.180%, 3/7/08(a)		10,500,000
	18,000,000	Delaware State Health Facilities Authority Revenue, Beebe Medical
		Center Project, 3.070%, 3/6/08(a)		18,000,000
	965,000	Kent County, DE, Delaware State University Student Housing,
		LOC-Wachovia Bank NA, 3.350%, 3/6/08(a)		965,000
		Total Delaware		31,765,000
		District of Columbia — 3.5%
	25,000,000	District of Columbia, TRAN, 4.000% due 9/30/08		25,123,220
	2,450,000	District of Columbia Enterprise Zone Revenue, Crowell and Moring LLP
		Project, LOC-Wachovia Bank, 3.450%, 3/5/08(a)(b)		2,450,000
		District of Columbia Revenue:
	260,000	American Psychological Association, LOC-Bank of America,
		3.020%, 3/6/08(a)		260,000
	1,545,000	National Public Radio Inc., LOC-SunTrust Bank, 3.250%, 3/5/08(a)		1,545,000
	6,300,000	Thomas B. Fordham Foundation, LOC-SunTrust Bank, 3.250%, 3/6/08(a)		6,300,000
	9,000,000	District of Columbia, GO, FSA, SPA-Depfa Bank PLC, 3.210%, 3/5/08(a)		9,000,000
		Metropolitan Washington Airports Authority:
	15,000,000	TECP, LOC Bank of America, 3.450% due 3/6/08		15,000,000
	8,000,000	TECP, LOC Bank of America, 3.500% due 3/20/08		8,000,000
	12,000,000	Metropolitan Washington D.C. Airports Authority, TECP, LOC
		Bank of America, 1.000% due 5/13/08		12,000,000
	10,000,000	Washington D.C. Metro Area Transit, TECP, LOC Wachovia, 2.600%
		due 5/7/08		10,000,000
		Total District of Columbia		89,678,220
		Florida — 7.5%
	10,000,000	Brevard County, FL, EFA Revenue, Florida Institute of Technology,
		3.000%, 3/6/08(a)		10,000,000
	8,650,000	Broward County, FL, Educational Facilities Authority Revenue,
		Nova Southeastern University, LOC-Bank of America N.A.,
		3.250%, 3/5/08(a)		8,650,000
	2,440,000	Coconut Creek, FL, IDR, Elite Aluminum Corp. Project,
		LOC-Bank of American, 3.100%, 3/6/08(a)(b)		2,440,000
		Florida Housing Finance Corp.:
	2,100,000	Multi-Family Revenue Arlington Apartments, LOC-Bank of America N.A.,
		3.200%, 3/5/08(a)(b)		2,100,000
	850,000	Multi-Family Revenue Refunding Mortgage Victoria Park,
		LIQ-FNMA, 3.160%, 3/6/08(a)		849,992
	6,595,000	Revenue, Heritage Pointe I-1, FNMA, 3.200%, 3/5/08(a)(b)		6,595,000

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  21

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO

FACE AMOUNT		SECURITY	VALUE
		Florida — 7.5% continued
		Florida State Board of Education:
$	1,500,000	Public Education, 5.000% due 6/1/08	$	1,510,411
	7,310,000	Refunding, 5.000% due 1/1/09		7,491,271
	3,640,000	Florida State Municipal Power Agency Revenue, All Requirements
		Power Supply, FSA, 5.000% due 10/1/08		3,721,626
	3,710,000	Florida State Turnpike Authority Turnpike Revenue, Refunding
		Department Transportation, 5.000% due 7/1/08		3,739,467
	3,100,000	Highlands County, FL, Health Facilities Authority Revenue, Refunding,
		Hospital Adventist Health, FSA, SPA-Dexia Credit Local,
		2.980%, 3/6/08(a)		3,100,000
		Jacksonville, FL:
	17,500,000	Electric Authority, TECP, LOC Landesbank Hessen Thurigen,
		3.250% due 3/10/08		17,500,000
	3,300,000	HFA, MFH, Revenue, Refunding, St. Augustine Apartments,
		LIQ-FNMA, 3.080%, 3/5/08(a)		3,300,000
	15,000,000	Jacksonville, FL, TECP, LOC Landesbank Baden Wurttemburg, 0.750%
		due 4/2/08		15,000,000
	6,445,000	JEA District, FL, Energy System Revenue, LOC-State Street Bank &
		Trust Co., 2.970%, 3/6/08(a)		6,445,000
		Lee County, FL, IDA:
	7,980,000	EFA, Canterbury School Inc. Project, LOC-SunTrust Bank,
		3.250%, 3/5/08(a)		7,980,000
	5,100,000	North Fort Myers Utility Inc., LOC-SunTrust Bank, 3.350%, 3/5/08(a)(b)		5,100,000
	21,400,000	Miami-Dade County, FL, Water & Sewer Revenue, Refunding, FSA,
		SPA-JPMorgan Chase, 3.160%, 3/6/08(a)		21,400,000
		Orange County, FL, HFA Multi-Family Revenue:
	5,810,000	Glenn Millenia Club Partners Ltd., LOC-Fannie Mae, 3.250%, 3/5/08(a)(b)		5,810,000
	4,835,000	Lakeside Pointe Apartments, LOC-Bank of America N.A.,
		3.250%, 3/5/08(a)(b)		4,835,000
		Orlando & Orange County, FL, Expressway Authority:
	14,485,000	FSA, SPA-Dexia Credit Local, 3.100%, 3/6/08(a)		14,485,000
	1,775,000	Refunding, FSA, SPA-Dexia Credit Local, 3.100%, 3/6/08(a)		1,775,000
	2,800,000	Orlando, FL, Utilities Commission Water & Electric Revenue,
		5.000% due 10/1/25		2,845,086
	5,690,000	Palm Beach County, FL, Revenue, St. Andrews School,
		LOC-Bank of America N.A., 3.000%, 3/6/08(a)		5,690,000
	20,000,000	Palm Beach, FL, School District, TECP, LOC Bank of America, 0.800%
		due 8/14/08		20,000,000
	4,900,000	Pinellas County, FL, Health Facilities Authority Revenue, Refunding,
		Health Systems Baycare, FSA, SPA-Morgan Stanley, 3.150%, 3/6/08(a)		4,900,000
	2,665,000	Sarasota-Manatee Airport Authority, Refunding, LOC-SunTrust Bank,
		3.700%, 3/3/08(a)		2,665,000
	3,200,000	St. Johns County, FL, IDA, Hospital Revenue, Flagler Hospital,
		Convertible 12/20/07, 3.250%, 3/5/08(a)		3,200,000
		Total Florida		193,127,853

See Notes to Financial Statements.

22  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO

FACE AMOUNT		SECURITY	VALUE
		Georgia — 4.8%
		Atlanta, GA:
$	9,500,000	Development Authority Revenue, Botanical Garden Improvements
		Project, LOC-SunTrust Bank, 3.250%, 3/5/08(a)	$	9,500,000
	2,000,000	Water & Wastewater Revenue, TECP, LOC JPMorgan, Bank of America,
		Dexia Credit Local, Lloyds Bank Plc, 3.350% due 7/29/08		2,000,000
		Cobb County, GA, Housing Authority, MFH Revenue,
		Post Bridge Project, FNMA, LIQ-FNMA:
	2,750,000	3.241%, 3/5/08(a)		2,750,000
	4,900,000	3.250%, 3/5/08(a)		4,900,000
	7,500,000	Coweta County, GA, Development Authority Revenue, Metro Atlanta
		YMCA Project, LOC-SunTrust Bank, 3.250%, 3/5/08(a)		7,500,000
	6,000,000	De Kalb County, GA, Development Authority, IDR, The Paideia School Inc.
		Project, LOC-SunTrust Bank, 3.250%, 3/5/08(a)		6,000,000
	3,000,000	Douglas County, GA, Development Authority, IDR, Pandosia LLC Project,
		LOC-Wells Fargo Bank N.A., 3.260%, 3/6/08(a)(b)		3,000,000
	6,600,000	Floyd County, GA, Development Authority Revenue, Berry College Project,
		LOC-SunTrust Bank, 3.250%, 3/5/08(a)		6,600,000
		Fulton County, GA, Development Authority Revenue:
	8,000,000	Shepherd Center Inc. Project, LOC-SunTrust Bank, 3.250%, 3/5/08(a)		8,000,000
	6,500,000	Woodward Academy Inc. Project, LOC-SunTrust Bank, 3.250%, 3/5/08(a)		6,500,000
	10,655,000	Georgia State Ports Authority Revenue, Garden City Terminal Project,
		LOC-SunTrust Bank, 3.250%, 3/5/08(a)		10,655,000
	4,133,000	Georgia State, Finance & Investment Commission, GO,
		SPA-Dexia Credit Local, 3.000%, 3/6/08(a)		4,133,000
	5,500,000	Georgia State, Road & Toll Authority, TECP, LOC State Street Bank,
		2.870% due 3/4/08		5,500,000
	3,000,000	Henry County, GA, School District, 5.000% due 4/1/08		3,003,079
	2,475,000	Liberty County, GA, Industrial Authority, Refunding, Millennium Realty
		Project, LOC-SunTrust Bank, 3.400%, 3/5/08(a)(b)		2,475,000
	800,000	Metropolitan Atlanta Rapid Transit Authority, GA, Sales Tax Revenue,
		LOC-Bayerische Landesbank & Westdeutsche Landesbank,
		3.100%, 3/5/08(a)		800,000
	10,000,000	Municipal Electric Authority, GA, TECP, LiQ Westdeutsche Landesbank
		2.750% due 6/9/08		10,000,000
		Private Colleges & Universities Authority, GA, Revenue:
	3,100,000	Emory University, 2.900%, 3/6/08(a)		3,100,000
	27,450,000	Refunding, Emory University, 2.990%, 3/6/08(a)		27,450,000
		Total Georgia		123,866,079
		Illinois — 5.6%
		Aurora, IL:
	5,000,000	IDR, Diamond Envelope Corp., LOC-LaSalle Bank N.A.,
		3.100%, 3/6/08(a)(b)		5,000,000
	2,480,000	Keson Industries Inc. Project, LOC-Harris Trust and Savings Bank,
		3.150%, 3/6/08(a)(b)		2,480,000
		Chicago, IL:
	3,300,000	GO, Board of Education, FSA, SPA-Dexia Credit Local, 3.400%, 3/6/08(a)		3,300,000
	3,945,000	John Hofuelster & Son Inc., 3.150%, 3/6/08(a)(b)		3,945,000

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  23

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Illinois — 5.6% continued
		MFH Revenue:
$	7,320,000	Central Station Project, LIQ FAC-FNMA, 3.360%, 3/6/08(a)(b)	$	7,320,000
	8,610,000	Uptown Preservation Apartments, LOC-LaSalle Bank N.A.,
		3.230%, 3/6/08(a)(b)		8,610,000
		Renaissance Center LP:
	300,000	LOC-Harris Bank, 3.150%, 3/6/08(a)(b)		300,000
	2,570,000	LOC-Harris Trust and Savings Bank, 3.150%, 3/6/08(a)(b)		2,570,000
	4,595,000	Cook County Community Consolidated School District No. 21,
		Wheeling, IL, Tax Anticipation Warrants, 4.750% due 4/1/08		4,598,776
	500,000	Cook County, IL, GO, Capital Improvement, SPA-Depfa Bank PLC,
		3.250%, 3/6/08(a)		500,000
		Du Page County, IL, Revenue:
	9,175,000	Benet Academy Capital Building Project, LOC-LaSalle Bank N.A.,
		3.000%, 3/6/08(a)(c)		9,175,000
	15,500,000	Morton Arboretum Project, LOC-Bank of America N.A.,
		3.000%, 3/6/08(a)		15,500,000
	3,375,000	Fulton, IL, Drives-Inc., 3.150%, 3/6/08(a)(b)		3,375,000
	8,600,000	Illinois Development Finance Authority, Lyric Opera of Chicago Project,
		LOC-Northern Trust Co., LOC-Harris Trust & Savings Bank,
		LOC-Bank One N.A., 3.200%, 3/5/08(a)		8,600,000
	5,450,000	Illinois Development Finance Authority Revenue, Residential Rental,
		LIQ-FHLMC, 3.100%, 3/5/08(a)(b)		5,450,000
		Illinois Development Finance Authority, IDR:
	3,095,000	Elite Manufacturing Tech Inc. Project, LOC-LaSalle Bank N.A.,
		3.100%, 3/6/08(a)(b)		3,095,000
	3,220,000	Northwest Pallet Supply Project, LOC-Harris Trust & Savings Bank,
		3.150%, 3/6/08(a)(b)		3,220,000
		Illinois Finance Authority:
	2,100,000	Elgin Academy Project, LOC-Charter One Bank, 3.050%, 3/5/08(a)		2,100,000
	7,680,000	Saint Xavier University Project, LOC-Lasalle Bank N.A.,
		3.100%, 3/6/08(a)		7,680,000
		Illinois Finance Authority Revenue:
	2,495,000	Alexian Brothers Health Systems C, FSA, SPA-Harris Bank,
		3.050%, 3/6/08(a)		2,495,000
	2,150,000	Dominican University, LOC-JPMorgan Chase, 3.200%, 3/5/08(a)		2,150,000
	6,000,000	Illinois College, LOC-U.S. Bank, 3.180%, 3/6/08(a)		6,000,000
	6,625,000	Northwestern Memorial Hospital, SPA-UBS AG, 2.880%, 3/6/08(a)		6,625,000
	3,070,000	OSF Healthcare System, FSA, SPA-JPMorgan Chase, 3.050%, 3/5/08(a)		3,070,000
		Resurrection Health:
	4,600,000	LOC-JPMorgan Chase, 4.010%, 3/3/08(a)		4,600,000
	1,000,000	LOC-LaSalle Bank N.A., 3.190%, 3/6/08(a)		1,000,000
	1,000,000	Illinois Health Facilities Authority, Swedish Covenant Hospital,
		LOC-LaSalle Bank, 3.050%, 3/5/08(a)		1,000,000
	2,405,000	Illinois Health Facilities Authority Revenue, Alexian Brothers Health,
		FSA, 5.125% Prerefunded 1/1/09 @ 101, due 1/1/28(d)		2,474,871
	995,000	Illinois Housing Development Authority Revenue, Danbury Court
		Apartment-Phase II-B, LOC-Federal Home Loan Bank, 3.100%,
		3/6/08(a)(b)		995,000

See Notes to Financial Statements.

24  |   Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Illinois — 5.6% continued
$	15,000,000	Illinois State Toll Highway Authority, Highway Revenue, Refunding
		Senior Priority, 3.250%, 3/6/08(a)	$	15,000,000
	1,250,000	Warren County, IL, Monmouth College Project, 3.190%, 3/6/08(a)		1,250,000
		Total Illinois		143,478,647
		Indiana — 0.8%
	15,000,000	Indianapolis Airport Authority, TECP, LOC, JPMorgan Chase, 3.040%
		due 3/7/08		15,000,000
	4,265,000	Whitley County, IN, EDR, Micopulse Inc. Project,
		LOC-Wells Fargo Bank N.A., 3.260%, 3/6/08(a)(b)		4,265,000
		Total Indiana		19,265,000
		Iowa — 0.6%
		Iowa Finance Authority:
	4,000,000	Industrial Development Revenue, Embria Health Sciences Project,
		LOC-Wells Fargo Bank, 3.260%, 3/6/08(a)(b)		4,000,000
	5,000,000	Single Family Mortgage Bonds, 2004 Series B, 3.150%, 3/6/08(a)(b)		5,000,000
	5,000,000	Iowa State, TRAN, 4.000% due 6/30/08		5,012,187
		Total Iowa		14,012,187
		Kansas — 0.6%
	5,875,000	Kansas State Department of Transportation Highway Revenue,
		Refunding, 5.000% due 9/1/08		5,923,292
	10,220,000	Lawrence, KS, GO, 4.250% due 10/1/08		10,265,397
		Total Kansas		16,188,689
		Kentucky — 0.3%
	1,610,000	Berea, KY, Educational Facilities Revenue, 4.000%, 3/3/08(a)		1,610,000
	3,505,000	Breckinridge County, KY, Lease Program Revenue, Kentucky Association
		of Counties Leasing Trust, LOC-U.S. Bank N.A., 2.700%, 3/5/08(a)		3,505,000
	2,800,000	Kentucky Housing Corp., Housing Revenue, SPA-Kentucky Housing Corp.,
		3.310%, 3/5/08(a)(b)		2,800,000
		Total Kentucky		7,915,000
		Louisiana — 1.0%
	3,200,000	Ascension Parish, LA, IDB Inc., Revenue, Geismar Project,
		LOC-SunTrust Bank, 3.250%, 3/5/08(a)		3,200,000
	4,900,000	Calcasieu Parish Inc. Louisiana Industrial Development Board Revenue,
		Refunding-Hydroserve Westlake, LOC-JPMorgan Chase, 3.350%,
		3/5/08(a)(b)		4,900,000
	4,100,000	Calcasieu Parish, LA, Public Trust Authority Solid Waste Disposal
		Revenue, WPT Corp. Project, LOC-Bank of America, 3.350%, 3/5/08(a)(b)		4,100,000
	400,000	East Baton Rouge Parish, LA, PCR, Refunding, ExxonMobil Project,
		3.650%, 3/3/08(a)		400,000
	4,000,000	Louisiana Housing Finance Agency, MFH, Revenue, Jefferson Lakes
		Apartments Project, FHLMC, LIQ-FHLMC, 3.210%, 3/6/08(a)(b)		4,000,000
	300,000	Louisiana PFA Revenue, Comm-Care Louisiana Project,
		LOC-JPMorgan Chase, 3.160%, 3/6/08(a)		300,000
	8,755,000	State of Louisiana, FSA, 5.500% due 4/15/08		8,803,895
		Total Louisiana		25,703,895

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report   |  25

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Maryland — 4.8%
$	3,025,000	Frederick County, MD, Refunding Public Facilities, 5.250% due 7/1/08	$	3,067,469
		Howard County, MD:
	5,710,000	Multi-Family Revenue, Sherwood Crossing Apartments, LIQ-FNMA,
		3.160%, 3/6/08(a)		5,710,000
	3,230,000	Revenue, Refunding Glenelg Country School, LOC-PNC Bank N.A.,
		3.160%, 3/7/08(a)		3,230,000
	15,000,000	TECP, LOC State Street Bank, 3.400% due 3/4/08		15,000,000
		Maryland Health & Higher EFA TECP, Johns Hopkins University:
	2,000,000	0.950% due 6/5/08		2,000,000
	400,000	Revenue, Mercy Medical Center, LOC-Bank of America,
		3.030%, 3/5/08(a)		400,000
	2,780,000	Maryland Health & Higher EFA Revenue, University of Maryland
		Medical System, LOC-Bank of America N.A., 3.000%, 3/6/08(a)		2,780,000
	2,600,000	Maryland State Community Development Administration, Department
		of Housing and Community Developments, SPA-State Street Bank &
		Trust Co., 3.000%, 3/6/08(a)(b)		2,600,000
		Maryland State Economic Development Corp. Revenue:
	2,900,000	Refunding, Constellation Energy Inc., LOC-Wachovia Bank,
		3.160%, 3/6/08(a)		2,900,000
	6,740,000	Santa Barbara Court LLC Project, LOC-PNC Bank N.A.,
		3.210%, 3/7/08(a)(b)		6,740,000
		Maryland State Health & Higher EFA Revenue:
	7,200,000	Archdiocese of Baltimore Schools, LOC-PNC Bank N.A., 3.170%, 3/7/08(a)		7,200,000
	1,400,000	Gilman School, LOC-SunTrust Bank, 3.240%, 3/5/08(a)		1,400,000
	16,000,000	Mercy Medical Center, LOC-Wachovia Bank NA, 3.290%, 3/6/08(a)		16,000,000
	4,400,000	Maryland State Stadium Authority, Sports Facilities Lease Revenue,
		Refunding, Football Stadium, SPA-Dexia Credit Local, 3.100%, 3/6/08(a)		4,400,000
	18,700,000	Montgomery County, MD, TECP, LOC Fortis Bank NV, 2.750% due 4/1/08		18,700,000
	8,140,000	Montgomery County, MD, EDR, George Meany Center for Labor,
		LOC-Bank of America N.A., 3.000%, 3/6/08(a)		8,140,000
		Montgomery County, MD:
	500,000	Housing Opportunities Commission Housing Revenue,
		The Grand Issue I, LIQ-Fannie Mae, 2.840%, 3/5/08(a)(b)		500,000
	400,000	Revenue, Sidwell Friends School, LOC-SunTrust Bank, 3.250%, 3/5/08(a)		400,000
	16,350,000	Prince Georges County, MD, Revenue, Refunding, Collington Episcopal,
		LOC-LaSalle Bank N.A., 2.980%, 3/6/08(a)		16,350,000
	3,250,000	Washington County, MD, EDR, St. James School Project,
		LOC-PNC Bank NA, 3.070%, 3/6/08(a)		3,250,000
	1,660,000	Washington Suburban Sanitation District, MD, GO, Refunding-Building
		Construction, 5.250% due 6/1/08		1,676,686
		Total Maryland		122,444,155
		Massachusetts — 1.8%
	10,000,000	Commonwealth of Massachusetts, TECP LIQ Dexia Credit Local,
		3.320% due 3/4/08		10,000,000
	500,000	Massachusetts State DFA, Revenue, Smith College, SPA-Morgan Stanley,
		3.350%, 3/6/08(a)		500,000
		Massachusetts State HEFA:
	5,100,000	Amherst College, Series F, 3.000%, 3/6/08(a)		5,100,000
	2,200,000	Harvard University, 3.400%, 3/6/08(a)		2,200,000

See Notes to Financial Statements.

26  |   Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Massachusetts — 1.8% continued
$	5,300,000	Pool Loan Program, LOC-Citizens Bank, 3.120%, 3/6/08(a)	$	5,300,000
		Massachusetts State HEFA Revenue:
	600,000	Amherst College, 3.000%, 3/6/08(a)		600,000
		Capital Asset Program:
	2,500,000	LOC-Bank of America, 3.120%, 3/6/08(a)		2,500,000
	2,120,000	LOC-Bank of MA, 3.120%, 3/6/08(a)		2,120,000
	1,775,000	Capital Asset, LOC-Bank of America, 3.120%, 3/6/08(a)		1,775,000
	200,000	Hallmark Health System, FSA, SPA-Bank of America, 3.030%, 3/6/08(a)		200,000
	200,000	Partners Healthcare Systems, SPA-Bank of America, 3.350%, 3/6/08(a)		200,000
	7,300,000	Suffolk University, LOC-JPMorgan Chase, 3.150%, 3/6/08(a)		7,300,000
	2,700,000	Massachusetts State HFA, Housing Revenue, FSA, SPA-Dexia Credit Local,
		2.890%, 3/5/08(a)		2,700,000
	600,000	Massachusetts State Water Resources Authority, Multi-Modal, Refunding,
		LOC-Landesbank Baden-Wurttemberg, 3.250%, 3/3/08(a)		600,000
	4,000,000	New Bedford, MA, GO, RAN, 3.750% due 6/30/08		4,008,586
		Total Massachusetts		45,103,586
		Michigan — 2.3%
	6,500,000	Detroit, MI, TAN, LOC-Scotiabank, 4.500% due 3/1/08		6,500,000
	6,120,000	Michigan Municipal Bond Authority Revenue, Notes, LOC-Scotiabank,
		4.500% due 8/20/08		6,142,721
	10,000,000	Michigan State, LOC-Depfa Bank PLC, 4.000% due 9/30/08		10,060,761
	6,130,000	Michigan State, Strategic Fund Ltd. Obligation Revenue, Refunding,
		Industrial Development MSCM Inc., LOC-LaSalle Bank Midwest,
		3.100%, 3/6/08(a)(b)		6,130,000
	10,235,000	University of Michigan, TECP, 3.160% due 3/4/08		10,235,000
		University of Michigan TECP:
	15,830,000	3.370% due 3/3/08		15,830,000
		Hospital:
	1,900,000	4.000%, 3/3/08(a)		1,900,000
	2,200,000	3.230%, 3/6/08(a)		2,200,000
		Total Michigan		58,998,482
		Minnesota — 2.8%
	1,740,000	Mendota Heights, MN, Purchase Revenue, St. Thomas Academy Project,
		LOC-Allied Irish Banks PLC, 3.180%, 3/6/08(a)		1,740,000
	16,619,000	Minneapolis St. Paul, Airport, TECP, LOC Westdeutsche Landesbank,
		2.200% due 5/6/08		16,619,000
	16,950,000	Minnesota HEFA Revenue, MN, Carleton College, SPA-Wells Fargo Bank,
		3.050%, 3/6/08(a)		16,950,000
	15,530,000	Minnesota State, Housing Finance Agency, Residential Housing Finance,
		SPA-Lloyds TSB Bank PLC, 3.270%, 3/6/08(a)(b)		15,530,000
	5,000,000	Minnetonka, MN, MFH Revenue, Refunding-Minnetonka Hills Apartments,
		LIQ-FNMA, 3.200%, 3/6/08(a)		5,000,000
	3,710,000	Oak Park Heights, MN, MFH Revenue, Refunding Housing Boutwells
		Landing, LIQ-Freddie Mac, 3.200%, 3/6/08(a)		3,710,000
	8,000,000	Rochester, MN, GO, Waste Water, SPA-Depfa Bank PLC, 3.160%, 3/6/08(a)		8,000,000
	5,000,000	St. Cloud, MN, Health Care Revenue, Centracare Health Systems Project,
		SPA-Royal Bank of Canada, 3.150%, 3/6/08(a)		5,000,000
		Total Minnesota		72,549,000

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report   |  27

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Mississippi — 1.2%
		Mississippi Business Finance Commission Gulf Opportunity Zone,
		Chevron USA Inc. Project:
$	4,000,000	2.900%, 3/5/08(a)	$	4,000,000
	4,000,000	3.250%, 3/5/08(a)		4,000,000
		Mississippi Business Finance Corp.:
	5,000,000	Chrome Deposit Corp. Project, LOC-PNC Bank N.A., 3.100%, 3/6/08(a)		5,000,000
	17,100,000	Gulf Opportunity Zone, Revenue, Petal Gas Storage LLC,
		LOC-SunTrust Bank, 3.250%, 3/5/08(a)		17,100,000
		Total Mississippi		30,100,000
		Missouri — 0.7%
	750,000	Bi-State Development Agency, MO, Metrolink Cross County,FSA,
		SPA-WESTLB AG, 3.000%, 3/5/08(a)		750,000
	2,500,000	Kansas City, MO, IDA, MFH Revenue, Clay Terrace Apartments Project,
		LOC-LaSalle Bank N.A., 3.100%, 3/6/08(a)(b)		2,500,000
		Missouri State HEFA:
		Revenue:
	6,175,000	Assemblies of God College, LOC-Bank of America, 3.000%, 3/6/08(a)		6,175,000
	1,000,000	BJC Health Systems, SPA-Bank of Nova Scotia & JPMorgan Chase,
		3.500%, 3/3/08(a)		1,000,000
		Washington University:
	100,000	SPA-Dexia Credit Local, 4.000%, 3/3/08(a)		100,000
	500,000	SPA-JPMorgan Chase, 3.500%, 3/3/08(a)		500,000
	600,000	Washington University, SPA-JPMorgan Chase, 4.000%, 3/3/08(a)		600,000
	890,000	Missouri State Highways & Transit Commission State Road Revenue,
		Multi Modal Third Lien, LOC-State Street Bank & Trust Co.,
		3.000%, 3/5/08(a)		890,000
	3,680,000	Missouri State Highways & Transit Commission, State Road Revenue,
		Multi-Modal, Third Lien, LOC-State Street Bank & Trust, 2.550%, 3/5/08(a)		3,680,000
	1,000,000	St. Charles County, MO, Public Water Supply, District No. 2, COP,
		LOC-Bank of America N.A., 3.000%, 3/6/08(a)		1,000,000
		Total Missouri		17,195,000
		Nebraska — 4.0%
	23,245,000	American Public Energy Agency Nebraska, Gas Supply Revenue,
		SPA-Societe Generale, 3.160%, 3/6/08(a)		23,245,000
	4,320,000	American Public Energy Agency, NE, Gas Supply Revenue, National
		Public Gas Agency Project, SPA-Societe Generale, 3.160%, 3/6/08(a)		4,320,000
	2,000,000	Lincoln, NE, Waterworks Revenue, Refunding, 5.000% due 8/15/08		2,034,648
		Nebraska Investment Finance Authority, Single Family Housing Revenue:
	7,205,000	3.350%, 3/5/08(a)(b)		7,205,000
	1,245,000	SPA-FHLB, 3.350%, 3/5/08(a)(b)		1,245,000
		Nebraska Public Power District:
	5,000,000	TECP, LiQ Bank of Nova Scotia, 3.000% due 3/7/08		5,000,000
	16,700,000	TECP, LiQ Bank of Nova Scotia, 1.400% due 7/15/08		16,700,000
	42,500,000	Omaha, NE, Public Power District, TECP, LOC JPMorgan Chase,
		3.350% due 3/3/08		42,500,000
		Total Nebraska		102,249,648

See Notes to Financial Statements.

28  |   Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Nevada — 0.8%
$	11,400,000	Las Vegas, NV, Water District, TECP, LiQ BNP Paribas, Lloyds Bank Plc,
		0.950% due 6/5/08	$	11,400,000
	4,500,000	Nevada Housing Division, Single Family Mortgage Revenue,
		GNMA, FNMA, FHLMC, SPA-JPMorgan Chase, 3.000%, 3/5/08(a)(b)		4,500,000
	1,200,000	Nevada State, GO, Municipal Bond Bank Projects 66 and 67, MBIA,
		5.375% due 5/15/21(d)		1,210,612
	2,343,000	Tuckee Meadows Water Authority, TECP, LOC Lloyds Bank Plc,
		2.600% due 6/2/08		2,343,000
		Total Nevada		19,453,612
		New Hampshire — 0.1%
		New Hampshire HEFA Revenue:
	1,800,000	Dartmouth College, SPA-JPMorgan Chase, 4.000%, 3/3/08(a)		1,800,000
	1,775,000	Dartmouth Hitchcock Clinic, FSA, SPA-Dexia Credit Local & JPMorgan
		Chase, 3.160%, 3/6/08(a)		1,775,000
		Total New Hampshire		3,575,000
		New Jersey — 3.3%
	9,000,000	Montclair Township, NJ, GO, Temporary Notes, 3.750% due 12/19/08		9,060,182
	17,708,482	Montgomery Township, NJ, BAN, 4.000% due 9/26/08		17,764,200
	200,000	New Jersey EDA Revenue, School Facilities Construction Subordinated,
		LOC-Bank of Nova Scotia, LOC-Lloyds TSB Bank PLC, 3.500%, 3/3/08(a)		200,000
	9,900,000	Newark, NJ, GO, School Promissory Notes, 3.000% due 1/23/09		9,947,596
	25,000,000	State of New Jersey, TRAN, 4.500% due 6/24/08		25,068,899
	23,468,895	Trenton, NJ, BAN, 4.500% due 7/2/08		23,525,911
		Total New Jersey		85,566,788
		New Mexico — 0.8%
	2,000,000	New Mexico Educational Assistance Foundation, Education Loan,
		4.950% due 3/1/09(b)		2,065,356
		New Mexico State Hospital Equipment Loan Council Hospital Revenue:
	2,900,000	Refunding, Presbyterian Healthcare, 4.600% due 8/1/08		2,917,789
	15,500,000	Refunding, Presbyterian Healthcare B, FSA, SPA-Citibank N.A.,
		2.900%, 3/5/08(a)		15,500,000
		Total New Mexico		20,483,145
		New York — 1.2%
	5,000,000	Metropolitan Transit Authority NYC, TECP, LOC-ABN AMRO BANK NY,
		3.050% due 7/8/08		5,000,000
	5,700,000	New York City, NY, HDC Mortgage Revenue, Queens Family Courthouse
		Apartment, LOC-Citibank N.A., 3.270%, 3/5/08(a)(b)		5,700,000
		New York City, NY, TFA:
	6,995,000	Future Tax Secured, Revenue, SPA-Dexia Credit Local, 2.950%, 3/5/08(a)		6,995,000
	1,755,000	New York City Recovery Project Revenue, Subordinated,
		LIQ-JPMorgan Chase, 4.000%, 3/3/08(a)		1,755,000
	3,600,000	New York State Dormitory Authority Revenue, Court Facilities Lease,
		LOC-Bayerische Landesbank, 2.790%, 3/5/08(a)		3,600,000
	8,000,000	New York State Power Authority, TECP, 2.680% due 7/2/08		8,000,000
		Total New York		31,050,000

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report|29

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		North Carolina — 4.9%
$	8,600,000	Board of Governors University, NC, TECP, 2.750% due 3/4/08	$	8,600,000
		Charlotte, NC:
	3,000,000	TECP, LiQ Depfa Bank Plc, 2.950% due 7/22/08		3,000,000
	11,493,000	TECP, LiQ Depfa Bank Plc, 2.900% due 8/15/08		11,493,000
	3,835,000	TECP, LiQ U.S. Bank, KBC Bank, 1.200% due 11/6/08		3,835,000
	3,000,000	GO, SPA-KBC Bank NV, 3.000%, 3/6/08(a)		3,000,000
	11,310,000	Water & Sewer System Revenue, SPA-Depfa Bank PLC, 3.330%, 3/6/08(a)		11,310,000
		Charlotte-Mecklenburg Hospital Authority, NC, Health Care System Revenue:
	9,200,000	FSA, SPA-Dexia Credit Local, 3.330%, 3/6/08(a)		9,200,000
	825,000	LIQ-Bank of America, 3.000%, 3/6/08(a)		825,000
	5,000,000	Durham County, NC, Industrial Facilities & Pollution Control Financing
		Authority, 3.160%, 3/6/08(a)		5,000,000
	13,760,000	Guilford County, NC, GO, SPA-Dexia Credit Local, 3.000%, 3/6/08(a)		13,760,000
		Mecklenburg County, NC, COP:
	4,580,000	SPA-Depfa Bank PLC, 3.330%, 3/6/08(a)		4,580,000
	2,190,000	SPA-Wachovia Bank NA, 3.330%, 3/6/08(a)		2,190,000
		New Hanover County, NC:
	6,750,000	GO, SPA-Wachovia Bank, 3.250%, 3/6/08(a)		6,750,000
	3,075,000	Hospital Revenue, Refunding, New Hanover Regional, FSA,
		SPA-Wachovia Bank, 3.050%, 3/5/08(a)		3,075,000
	1,890,000	North Carolina Educational Facilities Finance Agency Revenue,
		Providence Day School, LOC-Bank of America, 3.000%, 3/6/08(a)		1,890,000
	485,000	North Carolina Medical Care Commission Hospital Revenue,
		North Carolina Baptist Hospital Project, SPA-Wachovia Bank,
		3.100%, 3/6/08(a)		485,000
	490,000	North Carolina Medical Care Commission, Health Care Facilities
		Revenue, Carol Woods Project, Radian, LOC-Branch Banking & Trust,
		3.500%, 3/3/08(a)		490,000
		North Carolina State, GO:
	4,200,000	Public Improvement, SPA-Landesbank Hessen-Thuringen,
		2.850%, 3/5/08(a)		4,200,000
	6,450,000	SPA-Baygrische Landes Bank, 3.000%, 3/5/08(a)		6,450,000
		Union County, NC, GO:
	8,640,000	SPA-Depfa Bank PLC, 3.320%, 3/6/08(a)		8,640,000
	4,820,000	SPA-Dexia Credit Local, 3.320%, 3/6/08(a)		4,820,000
	13,800,000	Wake County, NC, GO, SPA-Landesbank Hessen-Thuringen,
		3.320%, 3/6/08(a)		13,800,000
		Total North Carolina		127,393,000
		North Dakota — 0.4%
	9,590,000	North Dakota State Housing Finance Agency Revenue, Housing Finance
		Program, Home Mortgage Finance, SPA-KBC Bank, 3.060%, 3/5/08(a)(b)		9,590,000
		Ohio — 2.9%
	13,225,000	Cleveland-Cuyahoga County, OH, Port Authority Revenue, 96th Research
		Building Project, LOC-Fifth Third Bank, 3.200%, 3/5/08(a)		13,225,000
	5,500,000	Columbus, OH, Airport, TECP, LiQ Calyon, 2.680% due 6/3/08		5,500,000
	4,000,000	Columbus, OH, City School District, GO, BAN, School Facilities
		Construction, 3.750% due 12/11/08		4,018,102

See Notes to Financial Statements.

30|Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Ohio — 2.9% continued
$	3,000,000	Columbus, OH, GO, San Sewer, 3.300%, 3/6/08(a)	$	3,000,000
	4,060,000	Columbus, OH, Sewer Revenue, Refunding, 3.300%, 3/6/08(a)		4,060,000
		Geauga County, OH, Revenue:
	5,800,000	South Franklin Circle Project A, LOC-Keybank N.A., 4.000%, 3/3/08(a)		5,800,000
	10,900,000	South Franklin Circle Project, LOC-Keybank N.A., 4.000%, 3/3/08(a)		10,900,000
	3,865,000	Ohio State Higher Educational Facilities, Commission Revenue,
		Higher Educational Facility-Pooled Program, LOC-Fifth Third Bank,
		3.180%, 3/6/08(a)		3,865,000
	6,000,000	Ohio State Major New State Infrastructure Project Revenue,
		4.250% due 6/15/08		6,015,467
	2,830,000	Ohio State University, General Receipts, 2.530%, 3/5/08(a)		2,830,000
	4,640,000	Ohio State Water Nuclear Development Authority, PCR, Refunding,
		Firstenergy Nuclear Project, LOC-Wachovia Bank, 2.970%, 3/5/08(a)		4,640,000
		Ohio State, GO:
	780,000	Common Schools, 3.000%, 3/5/08(a)		780,000
	400,000	Refunding and Improvement Infrastructure, 3.100%, 3/5/08(a)		400,000
	3,380,000	Ohio State, GO, Common Schools, 2.850%, 3/5/08(a)		3,380,000
	4,675,000	Salem, OH, Hospital Revenue, Refunding and Improvement Salem
		Community, LOC-JPMorgan Chase, 3.400%, 3/6/08(a)		4,675,000
		Total Ohio		73,088,569
		Oregon — 1.8%
	10,865,000	City Of Salem, OR, Water & Sewer, TECP, LiQ Fortis Bank
		2.750% due 7/1/08		10,865,000
	6,650,000	Klamath Falls, OR, Electric Revenue, Klamath Cogen,
		5.875% due 1/1/16(c)(d)		6,929,871
	1,880,000	Medford, OR, Hospital Facilities Authority Revenue, Cascade Manor
		Project, LOC-KBC Bank, 3.500%, 3/3/08(a)		1,880,000
	9,850,000	Multnomah County, OR, GO, TRAN, 4.250% due 6/30/08		9,866,306
	500,000	Oregon State GO, Veterans Welfare, SPA-Dexia Credit Local,
		3.150%, 3/3/08(a)		500,000
	10,000,000	Oregon State, Housing & Community Services Department Mortgage
		Revenue, Single Family Mortgage Program, SPA-KBC Bank N.V.,
		3.100%, 3/7/08(a)(b)		10,000,000
	4,825,000	Washington County, OR, Housing Authority Revenue, Refunding-Bethany
		Meadows II Project, LOC-U.S. Bank N.A., 3.240%, 3/6/08(a)(b)		4,825,000
		Total Oregon		44,866,177
		Pennsylvania — 8.2%
	6,000,000	Allegheny County, PA, IDA, Little Sisters of the Poor, 3.070%, 3/6/08(a)		6,000,000
	5,300,000	Allegheny County, PA, Higher Education Building Authority University
		Revenue, Carnegie Mellon University, SPA-Landesbank Hessen-Thuringen,
		3.500%, 3/3/08(a)		5,300,000
	12,400,000	Beaver County, PA, IDA, PCR, Refunding, Firstenergy Nuclear,
		LOC-Wachovia Bank, 2.970%, 3/5/08(a)		12,400,000
	6,500,000	Central York School District, GO, FSA, 3.180%, 3/6/08(a)		6,500,000
	12,150,000	Cumberland County, PA, Municipal Authority Revenue, Refunding,
		Asbury Obligated Group, LOC-KBC Bank N.V., 3.000%, 3/6/08(a)		12,150,000
	4,725,000	Delaware County Authority, PA, Dunwoody Village Inc., 3.380%, 3/6/08(a)		4,725,000

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report|31

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Pennsylvania — 8.2% continued
$	10,000,000	Fayette County, PA, Hospital Authority, Fayette Regional Health System,
		LOC-PNC Bank N.A., 3.070%, 3/6/08(a)	$	10,000,000
	305,000	Geisinger Authority, PA, Health System Revenue, Geisinger Health System,
		SPA-Wachovia Bank, 3.450%, 3/3/08(a)		305,000
	2,700,000	Lampeter-Strasburg, PA, School District, FSA, SPA-Royal Bank of Canada,
		3.180%, 3/6/08(a)		2,700,000
	1,825,000	Lancaster County, PA, GO, FSA, 3.180%, 3/6/08(a)		1,824,998
	3,300,000	Lancaster, PA, IDA Revenue, Hospice Lancaster County Project,
		LOC-PNC Bank N.A., 3.070%, 3/6/08(a)		3,300,000
	400,000	Luzerne County, PA, GO, Notes, FSA, SPA-JPMorgan Chase,
		3.400%, 3/6/08(a)		400,000
	8,000,000	Luzerne County, PA, IDA, Lease Revenue, GTD, LOC-PNC Bank N.A.,
		3.070%, 3/6/08(a)		8,000,000
	1,570,000	Manheim Township School District, PA, GO, FSA, SPA-Royal
		Bank of Canada, 3.190%, 3/6/08(a)		1,570,000
	2,175,000	Manheim, PA, CSD, GO, FSA, SPA-Dexia Credit Local, 3.180%, 3/6/08(a)		2,175,000
	6,375,000	Middletown, PA, Area School District, FSA, SPA-RBC Centura Bank,
		3.190%, 3/6/08(a)		6,375,000
	600,000	Montgomery County, PA, IDA Revenue, Philadelphia Presbyterian Homes,
		Series B, LOC-Wachovia Bank N.A., 2.950%, 3/6/08(a)		600,000
	4,000,000	Nazareth, PA, Area School District, GO, FSA, SPA-Dexia Credit Local,
		3.190%, 3/6/08(a)		4,000,000
	7,970,000	New Castle, PA, Area Hospital Authority, Jameson Memorial Hospital,
		LOC-PNC Bank, 3.070%, 3/6/08(a)		7,970,000
	2,250,000	Pennsylvania Economic Development Financing Authority Revenue,
		LOC-PNC Bank N.A., 3.120%, 3/6/08(a)(b)		2,250,000
	6,000,000	Pennsylvania Economic Development Financing Authority, Exempt
		Facilities Revenue, Shippingport Project, LOC-PNC Bank,
		2.940%, 3/5/08(a)(b)		6,000,000
	800,000	Pennsylvania Housing Finance Agency, SPA-Dexia Credit Local,
		3.190%, 3/5/08(a)(b)		800,000
	1,180,000	Pennsylvania State Turnpike Commission, Revenue, SPA-Landesbank
		Baden-Wurttemberg, 3.200%, 3/5/08(a)		1,180,000
	7,500,000	Philadelphia, PA, GO, TRAN, 4.500% due 6/30/08		7,519,959
	6,415,000	Philadelphia, PA, Authority for IDR, Pooled Loan Program,
		LOC-Citizens Bank, 3.100%, 3/6/08(a)		6,415,000
		Philadelphia, PA, Gas Works Revenue:
	27,800,000	TECP, LOC JPMorgan Chase, 2.950% due 3/10/08		27,800,000
	7,800,000	TECP, LOC JPMorgan Chase, 1.000% due 5/12/08		7,800,000
		Philadelphia, PA:
	7,125,000	Authority for IDR, The Franklin Institute Project, LOC-Bank of America,
		3.000%, 3/6/08(a)		7,125,000
	6,200,000	Authority for Industrial Development, Springside School,
		LOC-PNC Bank, 3.180%, 3/6/08(a)		6,200,000
	6,105,000	Phoenixville, PA, Area School District, GO, FSA, SPA-Wachovia Bank N.A.,
		3.180%, 3/6/08(a)		6,105,000
	4,700,000	Pittsburgh & Allegheny County, PA, Sports & Exhibition Authority,
		FSA, SPA-PNC Bank, 3.080%, 3/6/08(a)		4,700,000

See Notes to Financial Statements.

32|Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO

	FACE AMOUNT	SECURITY	VALUE
		Pennsylvania — 8.2% continued
$	600,000	Saint Mary Hospital Authority Bucks County, Catholic Health,
		2.900%, 3/5/08(a)	$	600,000
	10,325,000	State Public School Building Authority, Albert Gallatin Area Schools,
		FSA, SPA-PNC Bank, 3.070%, 3/6/08(a)		10,325,000
		University of Pittsburgh, PA, Commonwealth System of Higher Education,
		University Capital Project, SPA-Depfa Bank PLC:
	3,150,000	2.850%, 3/5/08(a)		3,150,000
	1,500,000	3.230%, 3/5/08(a)		1,500,000
		Washington County Hospital Authority, PA:
	2,990,000	Hospital Washington Hospital Project, 3.800% due 7/1/08(e)		2,990,000
	6,500,000	Washington Hospital, 3.800% due 7/1/08(e)		6,500,000
	3,900,000	York County, PA, GO, TRAN, 3.500% due 6/30/08		3,909,328
		Total Pennsylvania		209,164,285
		Rhode Island — 0.1%
	1,900,000	Rhode Island Health & Educational Building Corp. Revenue, Catholic
		Schools Program, LOC-Citizens Bank of Rhode Island, 3.000%, 3/5/08(a)		1,900,000
		South Carolina — 2.6%
	2,175,000	Beaufort County, SC, School District, GO, Refunding, SCSDE,
		5.000% due 4/1/08		2,178,484
	35,800,000	Charleston, SC, Waterworks & Sewer Revenue, Capital Improvement,
		SPA-Wachovia Bank, 3.000%, 3/6/08(a)		35,800,000
	2,700,000	Oconee County, SC, PCR, Refunding-Facilities Duke,
		Remarketed 11/03/03, LOC-SunTrust Bank, 3.250%, 3/6/08(a)		2,700,000
		South Carolina Jobs EDA:
	4,600,000	EDR, Vista Hotel Partners LLC, LOC-SunTrust Bank, 3.350%, 3/5/08(a)(b)		4,600,000
	4,790,000	Hospital Facilities Revenue, Sisters Charity Providence Hospital,
		LOC-Wachovia Bank, 3.350%, 3/6/08(a)		4,790,000
	6,630,000	Revenue, Executive Kitchens Inc. Project, LOC-SunTrust Bank,
		3.350%, 3/5/08(a)(b)		6,630,000
	6,100,000	South Carolina Jobs-EDA, Hospice Laurens County Inc.,
		LOC-SunTrust Bank, 3.250%, 3/5/08(a)		6,100,000
	3,745,000	South Carolina State Housing Finance & Development Authority
		Multi-Family Revenue, Rental Housing, Rocky Creek, LOC-Wachovia Bank,
		3.430%, 3/6/08(a)(b)		3,745,000
		Total South Carolina		66,543,484
		South Dakota — 0.3%
	6,210,000	South Dakota Economic Development Finance Authority, Hastings
		Filters Inc., 3.180%, 3/6/08(a)(b)		6,210,000
	1,590,000	South Dakota Housing Development Authority, Homeownership
		Mortgage, SPA-Landesbank Hessen-Thuringen, 3.050%, 3/5/08(a)		1,590,000
		Total South Dakota		7,800,000
		Tennessee — 2.5%
	13,600,000	Hamilton County, TN, GO, TECP, LOC Suntrust Bank, 1.600% due 4/1/08		13,600,000
	9,000,000	Jackson, TN, Health Educational & Housing Facility Board Revenue,
		Union University Project, LOC-SunTrust Bank, 3.250%, 3/5/08(a)		9,000,000
	8,500,000	Marion County, TN, Industrial & Environmental Development Board,
		Valmont Industries Inc. Project, LOC-Wachovia Bank N.A.,
		3.450%, 3/6/08(a)(b)		8,500,000

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report|33

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO
	FACE AMOUNT	SECURITY	VALUE
		Tennessee — 2.5% continued
$	5,000,000	Metropolitan Government Nashville & Davidson County, TN, TECP,
		Vanderbilt University, 1.550% due 3/3/08	$	5,000,000
	5,280,000	Metropolitan Nashville, TN, Airport Authority Special Facilities Revenue,
		Aero Nashville LLC Project, LOC-JPMorgan Chase, 3.210%, 3/6/08(a)(b)		5,280,000
	5,650,000	Montgomery County, TN, Public Building Authority, Revenue, Tennessee
		County Loan Pool, LOC-Bank of America, 3.000%, 3/6/08(a)(c)		5,650,000
	4,250,000	Morristown, TN, Industrial Development Board Revenue, Industrial
		Automotive Products, LOC-Landesbank Baden, 3.400%, 3/5/08(a)(b)		4,250,000
	13,780,000	Tusculum, TN, Health, Educational & Housing Facilities Board Revenue,
		Tusculum College Project, LOC-SunTrust Bank, 3.250%, 3/5/08(a)		13,780,000
		Total Tennessee		65,060,000
		Texas — 10.0%
	1,035,000	Austin, TX, Water & Wastewater System Revenue, FSA, SPA-Landesbank
		Baden-Wurttemberg, 3.400%, 3/6/08(a)		1,035,000
		Bexar County, TX, Housing Finance Corp., Multi-Family Housing Revenue:
	4,930,000	Refunding, Northwest Trails Apartments, FNMA, LOC-FNMA,
		3.200%, 3/6/08(a)		4,930,000
	6,435,000	Refunding, Vista Meadows Project, FHLMC, LOC-FHLMC,
		3.200%, 3/6/08(a)		6,435,000
	5,000,000	City of Garland, TX, GO, TECP, 2.100% due 6/10/08		5,000,000
	11,100,000	Crawford, TX, Education Facilities Corp., Concordia University,
		LOC-Wachovia Bank N.A., 3.350%, 3/6/08(a)		11,100,000
	5,892,000	Dallas, TX, Water & Sewer, TECP, 1.850% due 4/23/08		5,892,000
	10,000,000	Dallas, TX, Water & Sewer, TECP, LOC-Bank of America,
		3.350% due 3/11/08		10,000,000
	15,000,000	Dallas, TX, Area Rapid Transit, Senior Subordinated, TECP,
		LIQ-Landesbank Baden-Wurttemberg, 3.450% due 3/11/08		15,000,000
	2,700,000	Grapevine-Colleyville, TX, ISD, 8.250% due 6/15/08		2,734,541
		Harris County, TX, Health Facilities Development Corp. Revenue:
	45,000,000	Refunding, Methodist Hospital Systems LOC-LandesBank
		Hessen-Thuringen, 3.350%, 3/6/08(a)		45,000,000
	390,000	St. Luke’s Episcopal Hospital, SPA-Northern Trust, Bayerische
		Landesbank, Bank of America, JPMorgan Chase, 3.500%, 3/3/08(a)		390,000
		Houston, TX, Airport Systems Revenue:
	15,000,000	TECP, LOC Dexia Credit Local, 3.350% due 3/27/08		15,000,000
	6,000,000	TECP, LOC Dexia Credit Local, 1.400% due 6/25/08		6,000,000
	1,400,000	Lower Neches Valley Authority, TX, Industrial Development Corp.,
		Exempt Facilities Revenue, Mobil Oil Refining Corp. Project,
		4.000%, 3/3/08(a)(b)		1,400,000
	1,000,000	Lubbock, TX, ISD, GO, School Building, PSF-GTD, SPA-Bank of
		America N.A., 3.160%, 3/6/08(a)		1,000,000
	14,500,000	North Central Texas Health Facility Development Corp. Revenue,
		Baylor Health Care System Project, FSA, SPA-Bank of New York,
		2.900%, 3/5/08(a)		14,500,000
	7,600,000	Polly Ryon Memorial Hospital Authority, TX, Hospital Revenue,
		LOC-JPMorgan Chase, 3.400%, 3/6/08(a)		7,600,000
	7,000,000	Riesel, TX, Industrial Development Corporation, Solid Waste Disposal
		Revenue, Sandy Creek Energy Association, LOC-Credit Suisse,
		3.380%, 3/5/08(a)(b)		7,000,000

See Notes to Financial Statements.

34  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO
	FACE AMOUNT	SECURITY	VALUE
		Texas — 10.0% continued
$	4,250,000	Riesel, TX, IDC, Solid Waste Disposal Revenue, Sandy Creek Energy
		Association, LOC-Credit Suisse, 3.380%, 3/5/08(a)(b)	$	4,250,000
	1,600,000	San Antonio, TX, Empowerment Zone Development Corp.,
		Drury Southwest Hotel Project, LOC-U.S. Bank, 3.100%, 3/6/08(a)(b)		1,600,000
	17,175,000	Tarrant County, TX, Cultural Education Facilities Finance Corp.,
		Hospital Revenue, Valley Baptist Medical Center, LOC-JPMorgan Chase,
		3.100%, 3/5/08(a)		17,175,000
	635,000	Tarrant County, TX, Health Facilities Development Corp. Revenue,
		Adventist/Sunbelt, LOC-SunTrust Bank, 2.980%, 3/6/08(a)		635,000
	6,900,000	Texas Public Finance Authority, TECP, 2.600% due 6/2/08		6,900,000
	4,000,000	Texas State Turnpike Authority, Central Texas Turnpike System Revenue,
		BAN, Second Tier, 5.000% due 6/1/08		4,023,568
	5,568,000	Texas Tech University, TECP, 3.350% due 3/11/08		5,568,000
	13,950,000	Trinity River Authority, TX, Solid Waste Disposal Revenue, Community
		Waste Disposal Project, LOC-Wells Fargo Bank NA, 3.180%, 3/6/08(a)(b)		13,950,000
	12,300,000	Tyler, TX, IDS, GO, School Building, PSF-GTD, LIQ-Dexia Credit Local,
		3.160%, 3/6/08(a)		12,300,000
	10,000,000	University of Texas, TECP, 1.650% due 7/7/08		10,000,000
	20,000,000	Weatherford, TX, ISD, PSF-GTD, SPA-Depfa Bank PLC, 3.780% due 8/1/08(e)		20,000,000
		Total Texas		256,418,109
		Utah — 2.1%
	1,300,000	Utah County, UT, Hospital Revenue, IHC Health Services Inc.,
		SPA-Westdeutsche Landesbank, 3.120%, 3/6/08(a)		1,300,000
		Utah Housing Corp. Single Family Mortgage Revenue:
	2,000,000	GIC-Depfa Bank PLC, 3.380%, 3/5/08(a)(b)		2,000,000
	8,645,000	LIQ-Bayerische Landesbank, 3.350%, 3/5/08(a)(b)		8,645,000
	5,250,000	LIQ-Depfa Bank PLC, 3.350%, 3/5/08(a)(b)		5,250,000
	3,295,000	SPA-Bayerische Landesbank, 3.350%, 3/5/08(a)(b)		3,295,000
	7,160,000	SPA-Depfa Bank PLC, 3.350%, 3/5/08(a)(b)		7,160,000
		SPA-Lehman Brothers:
	4,000,000	3.350%, 3/5/08(a)(b)		4,000,000
	3,990,000	3.350%, 3/5/08(a)(b)		3,990,000
	5,380,000	SPA-Westdeutsche Landesbank, 3.350%, 3/5/08(a)(b)		5,380,000
	5,295,000	Utah Housing Corporation, Single Family Mortgage Revenue,
		SPA-Westdeutsche Landesbank, 3.350%, 3/5/08(a)(b)		5,295,000
	1,885,000	Utah State Housing Finance Agency, Single Family Mortgage,
		SPA-Bayerische Landesbank, 3.350%, 3/5/08(a)(b)		1,885,000
	6,300,000	Weber County, UT, Hospital Revenue, IHC Health Services,
		SPA-Landesbank Hessen-Thuringen, 3.150%, 3/3/08(a)		6,300,000
		Total Utah		54,500,000
		Virginia — 3.0%
	10,000,000	Albemarle County, VA, IDA Revenue, Thomas Jefferson Foundation Inc.,
		LOC-SunTrust Bank, 3.250%, 3/5/08(a)		10,000,000
		Fairfax County, VA:
	5,000,000	EDA Revenue, Mount Vernon Ladies Association of the Union Project,
		LOC-SunTrust Bank, 3.250%, 3/5/08(a)		5,000,000

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report   |   35

Schedule of investments (unaudited) continued
February 29, 2008

TAX FREE RESERVES PORTFOLIO
	FACE AMOUNT	SECURITY	VALUE
		Virginia — 3.0% continued
$	7,000,000	Redevelopment & Housing Authority Revenue, BAN, Affordable Housing,
		3.625% due 10/9/08	$	7,013,376
	8,000,000	Norfolk, VA, GO, SPA-Lloyds TSB Bank PLC, 3.250%, 3/6/08(a)(b)		8,000,000
	15,000,000	Richmond, VA, GO, RAN, 4.000% due 6/25/08		15,032,733
	19,000,000	University of Virginia, TECP, 1.000% due 6/26/08		19,000,000
	8,600,000	Virginia College Building Authority, VA, Various Shenandoah University
		Projects, 3.450%, 3/3/08(a)		8,600,000
	970,000	Virginia College Building Authority, VA, Educational Facilities Revenue,
		21st Century College, SPA-Wachovia Bank, 3.990%, 3/3/08(a)		970,000
	4,000,000	Virginia Commonwealth Transportation Board, Federal Highway
		Reimbursement Notes, 5.000% due 10/1/08		4,049,150
		Total Virginia		77,665,259
		Washington — 2.7%
	2,600,000	Everett, WA, GO, LOC-Bank of America, 3.050%, 3/6/08(a)		2,600,000
	6,645,000	Snohomish County, WA, Housing Authority Revenue, Autumn Chase
		Apartments Project, LOC-Bank of America N.A., 3.000%, 3/6/08(a)		6,645,000
	13,000,000	Tulalip Tribes of the Tulalip Reservation, WA, Revenue, Refunding
		Capital Projects, LOC- Wells Fargo Bank NA, 3.020%, 3/6/08(a)		13,000,000
	4,300,000	Washington State Economic Development Finance Authority Revenue,
		Canam Steel Project, LOC-Toronto-Dominion Bank, 3.150%, 3/6/08(a)(b)		4,300,000
	3,960,000	Washington State Economic Development Finance Authority, EDR,
		Benaroya Research Institute at Virginia Mason, LOC-Bank of America,
		3.120%, 3/6/08(a)		3,960,000
	200,000	Washington State Health Care Facilities Authority Revenue, Multicare
		Health Systems, FSA, SPA-U.S. Bank NA, 3.550%, 3/3/08(a)		200,000
	1,300,000	Washington State Health Care Facilities Authority, Revenue, Catholic
		Health, SPA-JPMorgan Chase, 3.200%, 3/5/08(a)		1,300,000
		Washington State Housing Finance Commission Non-Profit Revenue:
	8,300,000	Eastside Catholic School, LOC-Keybank N.A., 3.200%, 3/6/08(a)		8,300,000
	10,695,000	St. Thomas School Project, 3.170%, 3/6/08(a)		10,695,000
		Washington State, Housing Finance Commission, MFH Revenue:
	5,200,000	Deer Run West Apartments Project, LOC-Wachovia Bank N.A.,
		3.100%, 3/6/08(a)(b)		5,200,000
	6,125,000	Rolling Hills Apartments Project, FNMA, LIQ-FNMA, 3.100%, 3/6/08(a)(b)		6,125,000
	6,355,000	Washington, WA, HEFA, Revenue, Whitman College Project,
		SPA-JPMorgan Chase, 3.400%, 3/6/08(a)		6,355,000
		Total Washington		68,680,000
		Wisconsin — 1.0%
	4,735,000	Verona, WI, IDR, Latitude Corp. Project, LOC-US Bank N.A.,
		3.340%, 3/6/08(a)(b)		4,735,000
	7,495,000	Wisconsin Housing & EDA Home Ownership Revenue, SPA-FHLB,
		3.270%, 3/5/08(a)(b)		7,495,000
		Wisconsin State HEFA Revenue:
	5,275,000	Benevolent Corp. Cedar Community, LOC-JPMorgan Chase,
		3.400%, 3/6/08(a)		5,275,000
	6,800,000	Gundersen Lutheran, FSA, SPA-Dexia Public Finance Bank,
		3.780%, 3/3/08(a)		6,800,000
		Total Wisconsin		24,305,000

See Notes to Financial Statements.

36  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

TAX FREE RESERVES PORTFOLIO
	FACE
	AMOUNT	SECURITY	VALUE
		Wyoming — 0.8%
$	8,000,000	Sweetwater, WY, Memorial Hospital Project, LOC-Keybank NA,
		3.010%, 3/5/08(a)	$	8,000,000
	6,050,000	Wyoming CDA, Housing Revenue, SPA-State Street Bank & Trust Co.,
		3.330%, 3/5/08(a)(b)		6,050,000
	6,070,000	Wyoming CDA, Revenue, Single-Family Mortgage,
		SPA-Westdeutsche Landesbank, 3.100%, 3/6/08(a)		6,070,000
		Total Wyoming		20,120,000
		TOTAL INVESTMENTS — 98.1% (Cost — $2,511,888,038#)		2,511,888,038
		Other Assets in Excess of Liabilities — 1.9%		49,128,975
		TOTAL NET ASSETS — 100.0%	$	2,561,017,013

(a)	Variable rate demand obligations have a demand feature under which the Fund can tender them back to the issuer on no more than 7 days notice. Date shown is the date of the next interest rate change.
(b)	Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax (“AMT”).
(c)	Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees, unless otherwise noted.
(d)	Pre-Refunded bonds are escrowed with government obligations and/or government agency securities and are considered by the Manager to be triple-A rated even if issuer has not applied for new ratings.
(e)	Variable rate security. Interest rate disclosed is that which is in effect at February 29, 2008.
#	Aggregate cost for federal income tax purposes is substantially the same.

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  37

Schedule of investments (unaudited) continuedFebruary 29, 2008

Abbreviations used in this schedule:
BAN	—	Bond Anticipation Notes
CDA	—	Community Development Authority
COP	—	Certificate of Participation
CSD	—	Central School District
DFA	—	Development Finance Agency
EDA	—	Economic Development Authority
EDR	—	Economic Development Revenue
EFA	—	Educational Facilities Authority
FHLB	—	Federal Home Loan Bank
FHLMC	—	Federal Home Loan Mortgage Corporation
FNMA	—	Federal National Mortgage Association
FSA	—	Financial Security Assurance - Insured Bonds
GIC	—	Guaranteed Investment Contract
GNMA	—	Government National Mortgage Association
GO	—	General Obligation
GTD	—	Guaranteed
HDC	—	Housing Development Corporation
HEFA	—	Health & Educational Facilities Authority
HFA	—	Housing Finance Authority
IDA	—	Industrial Development Authority
IDB	—	Industrial Development Board
IDC	—	Industrial Development Corporation
IDR	—	Industrial Development Revenue
ISD	—	Independent School District
LIQ	—	Liquidity Facility
LOC	—	Letter of Credit
MBIA	—	Municipal Bond Investors Assurance Corporation - Insured Bonds
MFH	—	Multi-Family Housing
MTA	—	Metropolitan Transportation Authority
PCR	—	Pollution Control Revenue
PFA	—	Public Facilities Authority
PSF	—	Permanent School Fund
RAN	—	Revenue Anticipation Notes
Radian	—	Radian Assets Assurance
SPA	—	Standby Bond Purchase Agreement
TAN	—	Tax Anticipation Notes
TECP	—	Tax Exempt Commercial Paper
TFA	—	Transitional Finance Authority
TRAN	—	Tax and Revenue Anticipation Notes

See Notes to Financial Statements.

38   |   Tax Free Reserves Portfolio 2008 Semi-Annual Report

SUMMARY OF INVESTMENTS BY INDUSTRY*
Education	16.9	%
Hospitals	12.6
General obligation	11.4
Miscellaneous	10.7
Industrial development	9.2
Transportation	8.6
Housing: single-family	6.1
Utilities	6.0
Water & sewer	5.7
Housing: multi-family	4.8
Public facilities	2.9
Solid waste	1.2
Life care systems	1.1
Pollution control	1.0
Tax allocation	1.0
Pre-refunded	0.4
Finance	0.3
Electric	0.1
Total	100	%

* As a percentage of total investments. Please note that the Fund holdings are as of February 29, 2008 and are subject to change.

RATINGS TABLE†
S&P/Moody’s‡
A-1	61.7	%
VMIG1	22.2
SP-1	4.3
AAA	2.9
MIG1	2.5
F1	2.0
AA	1.7
NR	1.7
P1	1.0
	100.0	%

†	As percentage of total investments
‡	S&P primary rating; Moody’s secondary, then Fitch.
See pages 40 and 41 for definitions of ratings.

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  39

Bond ratings (unaudited)

The definitions of the applicable rating symbols are set forth below:

Standard & Poor’s Ratings Service (“Standard & Poor’s”) — Ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (–) sign to show relative standings within the major rating categories.

AAA	—	Bonds rated “AAA” have the highest rating assigned by Standard & Poor’s. Capacity to pay interest and repay principal is extremely strong.
AA	—	Bonds rated “AA” have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in a small degree.
A	—	Bonds rated “A” have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB	—	Bonds rated “BBB” are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.
BB, B, CCC,
CC and C	—	Bonds rated “BB”, “B”, “CCC”, “CC” and “C” are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. “BB” represents the lowest degree of speculation and “C” the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.
D	—	Bonds rated “D” are in default and payment of interest and/or repayment of principal is in arrears.
Moody’s Investors Service (“Moody’s”) — Numerical modifiers 1, 2 and 3 may be applied to each generic rating from “Aa” to “Caa,” where 1 is the highest and 3 the lowest ranking within its generic category.
Aaa	—	Bonds rated “Aaa” are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edge.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa	—	Bonds rated “Aa” are judged to be of high quality by all standards. Together with the “Aaa” group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in “Aaa” securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in “Aaa” securities.
A	—	Bonds rated “A” possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future.
Baa	—	Bonds rated “Baa” are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Ba	—	Bonds rated “Ba” are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and therefore not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.

See Notes to Financial Statements.

40 |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

B	—	Bonds rated “B” generally lack characteristics of desirable investments. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa	—	Bonds rated “Caa” are of poor standing. These may be in default, or present elements of danger may exist with respect to principal or interest.
Ca	—	Bonds rated “Ca” represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings.
C	—	Bonds rated “C” are the lowest class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.

Fitch Ratings Service (“Fitch”) — Ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (–) sign to show relative standings within the major rating categories.

AAA	—	Bonds rated “AAA” have the highest rating assigned by Fitch. Capacity to pay interest and repay principal is extremely strong.
AA	—	Bonds rated “AA” have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in a small degree.
A	—	Bonds rated “A” have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB	—	Bonds rated “BBB” are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.
BB, B, CCC
and CC	—	Bonds rated “BB”, “B”, “CCC” and “CC” are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. “BB” represents a lower degree of speculation than “B”, and “CC” the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.
NR	—	Indicates that the bond is not rated by Standard & Poor’s, Moody’s or Fitch.

Short-term security ratings (unaudited)

SP-1	—	Standard & Poor’s highest rating indicating very strong or strong capacity to pay principal and interest; those issues determined to possess overwhelming safety characteristics are denoted with a plus (+) sign.
A-1	—	Standard & Poor’s highest commercial paper and variable-rate demand obligation (VRDO) rating indicating that the degree of safety regarding timely payment is either overwhelming or very strong; those issues determined to possess overwhelming safety characteristics are denoted with a plus (+) sign.
VMIG 1	—	Moody’s highest rating for issues having a demand feature— VRDO.
MIG1	—	Moody’s highest rating for short-term municipal obligations.
P-1	—	Moody’s highest rating for commercial paper and for VRDO prior to the advent of the VMIG 1 rating.
F1	—	Fitch’s highest rating indicating the strongest capacity for timely payment of financial commitments; those issues determined to possess overwhelming strong credit feature are denoted with a plus (+) sign.

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  41

Statement of assets and liabilities (unaudited)
Tax Free Reserves Portfolio
February 29, 2008

ASSETS:
Investments, at amortized cost	$	2,511,888,038
Cash		70,185
Receivable for securities sold		54,562,942
Interest receivable		11,015,103
Prepaid expenses		15,066
Total Assets		2,577,551,334
LIABILITIES:
Payable for securities purchased		16,155,908
Investment management fee payable		296,328
Trustees’ fees payable		11,683
Accrued expenses		70,402
Total Liabilities		16,534,321
TOTAL NET ASSETS	$	2,561,017,013
REPRESENTED BY:
Paid-in capital	$	2,561,017,013

See Notes to Financial Statements.

42 |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

Statement of operations (unaudited)Tax Free Reserves Portfolio
For the Six Months Ended February 29, 2008

INVESTMENT INCOME:
Interest	$	40,703,358
EXPENSES:
Investment management fee (Note 2)		1,877,067
Legal fees		48,836
Trustees’ fees		17,062
Insurance		14,260
Audit and tax		12,557
Custody fees		12,317
Miscellaneous expenses		4,937
Total Expenses		1,987,036
Less: Fee waivers and/or expense reimbursements (Note 2)		(107,915	)
Fees paid indirectly (Note 1)		(2,678	)
Net Expenses		1,876,443
NET INVESTMENT INCOME		38,826,915
NET REALIZED GAIN ON INVESTMENTS		97,273
INCREASE IN NET ASSETS FROM OPERATIONS	$	38,924,188

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  43

Statements of changes in net assets
Tax Free Reserves Portfolio

FOR THE SIX MONTHS ENDED FEBRUARY 29, 2008 (unaudited) AND THE YEAR ENDED AUGUST 31, 2007	2008			2007
OPERATIONS:
Net investment income	$	38,826,915		$	60,539,760
Net realized gain		97,273			72,108
Increase in Net Assets From Operations		38,924,188			60,611,868
CAPITAL TRANSACTIONS:
Proceeds from contributions		3,272,010,374			5,363,146,181
Value of withdrawals		(2,584,793,121	)		(5,268,887,356	)
Increase in Net Assets From Capital Transactions		687,217,253			94,258,825
INCREASE IN NET ASSETS		726,141,441			154,870,693
NET ASSETS:
Beginning of period		1,834,875,572			1,680,004,879
End of period	$	2,561,017,013		$	1,834,875,572

See Notes to Financial Statements.

44  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

Financial highlights
Tax Free Reserves Portfolio

FOR YEARS ENDED AUGUST 31, UNLESS OTHERWISE NOTED:
	2008		1	2007			2006			2005			2004			2003
NET ASSETS,
END OF PERIOD (Millions)	$	2,561		$	1,835		$	1,680		$	2,261		$	1,515		$	1,511
Total return2		1.57	%		3.56	%		3.05	%		1.88	%		0.91	%		1.17	%
RATIOS TO AVERAGE NET ASSETS:
Gross expenses		0.16	%3		0.16	%4		0.17	%		0.23	%		0.23	%		0.24	%
Net expenses5,6,7		0.15	3		0.15	4		0.15			0.15			0.15			0.15
Net investment income		3.10	3		3.51			2.99			1.95			0.90			1.14

1	For the six months ended February 29, 2008 (unaudited).
2	Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
3	Annualized.
4	Included in the expense ratios are certain non-recurring restructuring (and reorganization, if applicable) fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 0.16% and 0.15%, respectively.
5	As a result of a voluntary expense limitation, the ratio of expenses, other than interest, brokerage, taxes and extraordinary expenses, to average net assets of shares will not exceed 0.15%.
6	Reflects fee waivers and/or expense reimbursements.
7	There was no impact to the expense ratio as a result of fees paid indirectly.

See Notes to Financial Statements.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  45

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

Tax Free Reserves Portfolio (the “Portfolio”) is a no-load, non-diversified investment series of Master Portfolio Trust (the “Trust”). The Trust, a Maryland business Trust, is registered under the investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. At February 29, 2008, all investors in the Portfolio were funds advised by the manager of the fund and/or its affiliates.

The following are significant accounting policies consistently followed by the Portfolio and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ.

(a) Investment valuation. Money market instruments are valued at amortized cost, in accordance with Rule 2a-7 under the 1940 Act, which approximates market value. This method involves valuing portfolio securities at their cost and thereafter assuming a constant amortization to maturity of any discount or premium. The Portfolio’s use of amortized cost is subject to their compliance with certain conditions as specified by Rule 2a-7 of the 1940 Act.

(b) Interest income and expenses. Interest income consists of interest accrued and discount earned (including both original issue and market discount adjusted for amortization of premium) on the investments of the Portfolio. Expenses of the Portfolio are accrued daily. The Portfolio bears all costs of its operations other than expenses specifically assumed by the manager.

(c) Credit and market risk. The Fund may invest in instruments specifically structured so that they are eligible for purchase by money market funds, including securities that have demand, tender or put features, or interest rate reset features. Structured instruments may take the form of participation interests or receipts in underlying securities or other assets, and in some cases are backed by a financial institution serving as a liquidity provider. Some of these instruments may have an interest rate swap feature which substitutes a floating or variable interest rate for the fixed interest rate on an underlying security, and some may be asset-backed or mortgage-backed securities. Structured instruments are a type of derivative instrument and the payment and credit qualities of these instruments derive from the assets embedded in the structure.

The fair value of these securities may be different than the amortized cost value reported in the Statement of Investments for the Fund. As of the date of this report, the Fund continued to meet the requirements under Rule 2a-7 that permits the Fund to utilize amortized cost to value its securities.

46  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

(d) Fees paid indirectly. The Portfolio’s custody fees are reduced according to a fee arrangement, which provides for a reduction based on the level of cash deposited with the custodian by the Portfolio. The amount is shown as a reduction of expenses on the Statement of Operations.

(e) Income taxes. The Portfolio is classified as a partnership for federal income tax purposes. As such, each investor in the Portfolio is treated as owner of its proportionate share of the net assets, income, expenses and realized and unrealized gains and losses of the Portfolio. Therefore, no Federal income tax provision is required. It is intended that the Portfolio’s assets will be managed so an investor in the Portfolio can satisfy the requirements of the subchapter M of the Internal Revenue Code.

(f) Other. Purchases, maturities and sales of money market instruments are accounted for on the date of the transaction. Realized gains and losses are calculated on the identified cost basis.

2. Investment management agreement and other transactions with affiliates

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Portfolio’s investment manager and Western Asset Management Company (“Western Asset”) is the Portfolio’s subadviser. LMPFA and Western Asset are wholly-owned subsidiaries of Legg Mason, Inc. (“Legg Mason”).

Under the investment management agreement, the Portfolio pays investment management fees, calculated daily and paid monthly, at an annual rate of 0.15% of the Portfolio’s average daily net assets.

LMPFA provides administrative and certain oversight services to the Portfolio. LMPFA delegates to the subadviser the day-to-day portfolio management of the Portfolio. For its services, LMPFA pays Western Asset 70% of the net management fee it receives from the Portfolio.

During the six months ended February 29, 2008, the Portfolio had a voluntary expense limitation in place of 0.15% of the Portfolio’s average daily net assets.

During the six months ended February 29, 2008, LMPFA waived a portion of its fee in the amount of $107,915.

Effective January 1, 2008, the manager is permitted to recapture amounts that it has previously voluntarily waived and/or reimbursed to the Fund during the same fiscal year if the Fund’s total annual operating expenses have fallen to a level below the expense cap shown in the fee table of the Fund’s prospectus. In no case will the manager recapture any amount that would result, on any particular Fund business day, in the Fund’s total annual operating expenses exceeding the expense cap.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  47

Notes to financial statements (unaudited) continued

On July 10, 2006, a retirement plan applicable to the Portfolio was amended by the Board then overseeing the Portfolio (the “previous Board”) to provide for the payment of certain benefits (in lieu of any other retirement payments under any previous plans) to Trustees who had not elected to retire as of April 2007. All of Trustees comprising the previous Board (and who had not elected to retire as of April 2007) elected to receive benefits under the amended plan. Each fund overseen by the previous Board (including the portfolio) paid its pro rata share (based upon assets size) of such benefits to the Trustees comprising the previous Board. Legg Mason or its affiliates agreed to reimburse the funds an amount equal to 50% of these benefits. The Portfolio’s allocable share of benefits under this amendment at February 29, 2008 was $7,814. Generally benefits under the retirement plan are paid in quarterly installments unless the Trustees elected to receive them in a lump sum at net present value. Two former Trustees are currently receiving payments under retirement plan.

Certain officers and one of the Trustees of the Trust are employees of Legg Mason or its affiliates and not receive compensation from the Trust.

3. Legal matters

Beginning in June 2004, class action lawsuits alleging violations of the federal securities laws were filed against Citigroup Global Markets, Inc. (“CGM”), and other affiliated funds (collectively, the “Funds”), and a number of its then affiliates, including Smith Barney Fund Management LLC (“SBFM”) and Salomon Brothers Asset Management Inc (“SBAM”), which were then investment adviser or manager to certain of the Funds (the “Managers”), substantially all of the mutual funds then managed by the Managers (the “Defendant Funds”), and Board Members of the Defendant Funds (collectively, the “Defendants”). The complaints alleged, among other things, that CGM created various undisclosed incentives for its brokers to sell Smith Barney and Salomon Brothers funds. In addition, according to the complaints, the Managers caused the Defendant Funds to pay excessive brokerage commissions to CGM for steering clients towards proprietary funds. The complaints also alleged that the Defendants breached their fiduciary duty to the Defendant Funds by improperly charging Rule 12b-1 fees and by drawing on fund assets to make undisclosed payments of soft dollars and excessive brokerage commissions. The complaints also alleged that the Defendant Funds failed to adequately disclose certain of the allegedly wrongful conduct. The complaints sought injunctive relief and compensatory and punitive damages, rescission of the Defendant Funds’ contracts with the Managers, recovery of all fees paid to the Managers pursuant to such contracts and an award of attorneys’ fees and litigation expenses.

On December 15, 2004, a consolidated amended complaint (the “Complaint”) was filed alleging substantially similar causes of action. On May 27, 2005, all of the Defendants filed motions to dismiss the Complaint. On July 26, 2006, the court issued a decision and order (1) finding that plaintiffs lacked standing to sue on behalf of the shareholders of the Funds in which none of the plaintiffs had

48  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

invested and dismissing those Funds from the case (although stating that they could be brought back into the case if standing as to them could be established), and (2) other than one stayed claim, dismissing all of the causes of action against the remaining Defendants, with prejudice, except for the cause of action under Section 36(b) of the 1940 Act, which the court granted plaintiffs leave to repeal as a derivative claim.

On October 16, 2006, plaintiffs filed their Second Consolidated Amended Complaint (“Second Amended Complaint”) which alleges derivative claims on behalf of nine funds identified in the Second Amended Complaint, under Section 36(b) of the 1940 Act, against Citigroup Asset Management (“CAM”), SBAM and SBFM as investment advisers to the identified funds, as well as CGM as a distributor for the identified funds (collectively, the “Second Amended Complaint Defendants”). The Fund was not identified in the Second Amended Complaint.

The Second Amended Complaint alleges no claims against any of the Funds or any of their Board Members. Under Section 36(b), the Second Amended Complaint alleges similar facts and seeks similar relief against the Second Amended Complaint Defendants as the Complaint.

On December 3, 2007, the court granted the Defendants’ motion to dismiss, with prejudice. On January 2, 2008, the plaintiffs filed a notice of appeal to Second Circuit Court of Appeals.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed in the future.

* * *

Beginning in August 2005, five class action lawsuits alleging violations of federal securities laws and state law were filed against CGM and SBFM, (collectively, the “Defendants”) based on the May 31, 2005 settlement order issued against the Defendants by the Securities and Exchange Commission (“SEC”) as previously described. The complaints seek injunctive relief and compensatory and punitive damages, removal of SBFM as the investment manager for the Smith Barney family of funds, rescission of the funds’ management and other contracts with SBFM, recovery of all fees paid to SBFM pursuant to such contracts, and an award of attorneys’ fees and litigation expenses. The five actions were subsequently consolidated, and a consolidated complaint was filed.

On September 26, 2007, the United States District Court for the Southern District of New York issued an order dismissing the consolidated complaint, and judgment was later entered. An appeal has been filed and is pending before the U.S. Court of Appeals for the Second Circuit.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  49

Notes to financial statements (unaudited) continued

4. Other matter

On or about May 30, 2006, John Halebian, a purported shareholder of Citi New York Tax Free Reserves, a series of Legg Mason Partners Money Market Trust, formerly a series of CitiFunds Trust III (the “Subject Trust”), filed a complaint in the United States District Court for the Southern District of New York against the independent trustees of the Subject Trust (Elliott J. Berv, Donald M. Carlton, A. Benton Cocanougher, Mark T. Finn, Stephen Randolph Gross, Diana R. Harrington, Susan B. Kerley, Alan G. Merten and R. Richardson Pettit).

The Subject Trust is also named in the complaint as a nominal defendant. The complaint alleges both derivative claims on behalf of the Subject Trust and class claims on behalf of a putative class of shareholders of the Subject Trust in connection with the 2005 sale of Citigroup’s asset management business to Legg Mason and the related approval of new investment advisory agreements by the trustees and shareholders. In the derivative claim, the plaintiff alleges, among other things, that the independent trustees breached their fiduciary duty to the Subject Trust and its shareholders by failing to negotiate lower fees or seek competing bids from other qualified investment advisers in connection with Citigroup’s sale to Legg Mason. In the claims brought on behalf of the putative class of shareholders, the plaintiff alleges that the independent trustees violated the proxy solicitation requirements of the 1940 Act, and breached their fiduciary duty to shareholders, by virtue of the voting procedures, including “echo voting,” used to obtain approval of the new investment advisory agreements and statements made in a proxy statement regarding those voting procedures. The plaintiff alleges that the proxy statement was misleading because it failed to disclose that the voting procedures violated the 1940 Act. The relief sought includes an award of damages, rescission of the advisory agreement, and an award of costs and attorney fees.

In advance of filing the complaint, Mr. Halebian’s lawyers made written demand for relief on the Board of the Subject Trust, and the Board’s independent trustees formed a demand review committee to investigate the matters raised in the demand, and subsequently in the complaint, and recommend a course of action to the Board. The committee, after a thorough review, determined that the independent trustees did not breach their fiduciary duties as alleged by Mr. Halebian, and that the action demanded by Mr. Halebian would not be in the best interests of the Subject Trust. The Board of the Subject Trust (the trustee who is an “interested person” of the Subject Trust, within the meaning of the 1940 Act, having recused himself from the matter), after receiving and considering the committee’s report and based upon the findings of the committee, subsequently also so determined and, adopting the recommendation of the committee, directed counsel to move to dismiss Mr. Halebian’s complaint. A motion to dismiss was filed on October 23, 2006. Opposition papers were filed on or about December 7, 2006. The complaint was dismissed on July 31, 2007. Mr. Halebian has filed an appeal in the U.S. Court of Appeals for the Second Circuit. The appeal is pending.

50  |  Tax Free Reserves Portfolio 2008 Semi-Annual Report

5. Recent accounting pronouncements

On September 20, 2006, the Financial Accounting Standard Board (“FASB”) released Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management has determined that there is no material impact to the Portfolio’s valuation policies as a result of adopting FAS 157. The Portfolio will implement the disclosure requirements beginning with its November 30, 2008 Form N-Q.

* * *

In March 2008, FASB issued the Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures about the Portfolio’s derivative and hedging activities, including how such activities are accounted for and their effect on the Portfolio’s financial position, performance and cash flows. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Portfolio’s financial statements and related disclosures.

6. Recent developments

On May 21, 2007, the United States Supreme Court agreed to hear an appeal in Department of Revenue of Kentucky v. Davis, a case concerning the validity of statutes that create a state tax exemption for interest from municipal securities. The Kentucky Court of Appeals had held that Kentucky’s statute, which provided an exemption for interest earned on municipal securities of Kentucky issuers while taxing interest earned on municipal securities of issuers in other states, violated the Interstate Commerce Clause of the United States Constitution. If the Supreme Court were to adopt the reasoning of the Kentucky Court of Appeals, its decision would affect the state tax status of fund distributions. It is unclear how such a decision would affect the market for municipal securities, but it could adversely affect the value of securities held by the Portfolio, and therefore of the Fund’s shares. Such a decision could also prompt legislation at the state level that would have further impacts upon the taxability of Fund distributions and upon the market for municipal securities. The case was argued before the Supreme Court on November 5, 2007, but no decision has yet been issued.

Tax Free Reserves Portfolio 2008 Semi-Annual Report  |  51

Board approval of management and
subadvisory agreements (unaudited)

At a meeting of the Board of Trustees of Master Portfolio Trust (the “Trust”) held on November 12-13, 2007, the Board, including the Board members who are not considered to be “interested persons” of the Trust (the “Independent Board Members”) under the Investment Company Act of 1940, as amended (the “1940 Act”), approved for an annual period the continuation of the management agreement (the “Management Agreement”) between the Trust and Legg Mason Partners Fund Advisor, LLC (the “Manager”) with respect to the Tax Free Reserves Portfolio, a series of the Trust (the “Fund”), and the sub-advisory agreement (the “Sub-Advisory Agreement”) between the Manager and Western Asset Management Company (the “Subadviser”), an affiliate of the Manager, with respect to the Fund.

Background

The Board received information in advance of the meeting from the Manager to assist it in its consideration of the Management Agreement and the Sub-Advisory Agreement and was given the opportunity to ask questions and request additional information from management. The Board received and considered a variety of information about the Manager, the Subadviser and the Fund’s placement agent, as well as the management, sub-advisory and placement agency and distribution arrangements for the Fund and other funds overseen by the Board, certain portions of which are discussed below. The Board noted that the Fund is a “master” fund in a “master-feeder” structure, whereby each “feeder fund” has the same investment objective and policies as the Fund and invests substantially all of its assets in the Fund. The presentation made to the Board encompassed the Fund and all funds for which the Board has responsibility, including the following feeder funds in the Fund (each, a “Feeder Fund”): Citi Tax Free Reserves, a series of Legg Mason Partners Money Market Trust, and Citi Institutional Tax Free Reserves, a series of Legg Mason Partners Institutional Trust. The discussion below covers both the advisory and the administrative functions being rendered by the Manager, both of which functions are encompassed by the Management Agreement, as well as the advisory functions rendered by the Subadviser pursuant to the Sub-Advisory Agreement.

Board approval of management agreement and sub-advisory agreement

The Independent Board Members were advised by separate independent legal counsel throughout the process. Prior to voting, the Independent Board Members received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Management Agreement and the Sub-Advisory Agreement. The Independent Board Members also discussed the proposed continuation of the Management Agreement and the Sub-Advisory Agreement in private sessions with their independent legal counsel at which no representatives of the Manager were present. In approving the Management Agreement and Sub-Advisory Agreement, the Board, including the Independent Board Members,

52  |  Tax Free Reserves Portfolio

considered a variety of factors, including those factors discussed below. No single factor reviewed by the Board was identified by the Board as the principal factor in determining whether to approve the Management Agreement and the Sub-Advisory Agreement, and each Board Member attributed different weight to the various factors.

Nature, extent and quality of the services under the management agreement and sub-advisory agreement

The Board received and considered information regarding the nature, extent and quality of services provided to the Fund by the Manager and the Subadviser under the Management Agreement and the Sub-Advisory Agreement, respectively, during the past two years. The Board noted information received at regular meetings throughout the year related to the services rendered by the Manager in its management of the Fund’s affairs and the Manager’s role in coordinating the activities of the Fund’s other service providers. The Board’s evaluation of the services provided by the Manager and the Subadviser took into account the Board’s knowledge and familiarity gained as Board members of funds in the Legg Mason Partners fund complex, including the scope and quality of the investment management and other capabilities of the Manager and the Subadviser, and the quality of the Manager’s administrative and other services. The Board observed that the scope of services provided by the Manager and the Subadviser had expanded over time as a result of regulatory and other developments, including maintaining and monitoring their own and the Fund’s expanded compliance programs. The Board reviewed information received from the Manager and the Subadviser regarding the Fund’s compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act.

The Board reviewed the qualifications, backgrounds and responsibilities of the Fund’s senior personnel and the portfolio management team primarily responsible for the day-to-day portfolio management of the Fund. The Board also considered the degree to which the Manager implemented organizational changes to improve investment results and the services provided to the Legg Mason Partners fund complex. The Board also considered, based on its knowledge of the Manager and its affiliates, the financial resources available to Legg Mason, Inc., the parent organization of the Manager and the Subadviser.

The Board considered the division of responsibilities between the Manager and the Subadviser and the oversight provided by the Manager. The Board also considered the Manager’s and the Subadviser’s brokerage policies and practices. In addition, management also reported to the Board on, among other things, its business plans, organizational changes and portfolio manager compensation plan.

Tax Free Reserves Portfolio  |  53

Board approval of management and
subadvisory agreements (unaudited) continued

The Board concluded that, overall, the nature, extent and quality of services provided (and expected to be provided) under the Management Agreement and the Sub-Advisory Agreement were satisfactory.

Fund performance

In considering the performance of the Fund, the Board received and considered performance information for the Feeder Funds as well as a group of funds (a “Performance Universe”) selected by Lipper, Inc. (“Lipper”), an independent provider of investment company data, for each Feeder Fund. The Board noted that each Feeder Fund’s performance was the same as the performance of the Fund (except for the effect of fees at the Feeder Fund level), and therefore relevant to the Board’s conclusions regarding the Fund’s performance. The Board was provided with a description of the methodology Lipper used to determine the similarity of each Feeder Fund with the funds included in its Performance Universe. The Board also noted that it had received and discussed with management information throughout the year at periodic intervals comparing each Feeder Fund’s performance against its benchmark.

The information comparing Citi Tax Free Reserves’ performance to that of its Performance Universe, consisting of all retail funds classified as tax-exempt money market funds by Lipper, showed, among other data, that Citi Tax Free Reserves’ performance for the 1- and 3-year periods ended June 30, 2007 was below the median and that performance for the 5-year period ended June 30, 2007 was at the median. The Board noted the explanations from the Manager concerning the underperformance versus the peer group.

The information comparing Citi Institutional Tax Free Reserves’ performance to that of its Performance Universe, consisting of all funds classified as institutional tax-exempt money market funds by Lipper, showed, among other data, that Citi Institutional Tax Free Reserves’ performance for the 1-, 3- and 5-year periods ended June 30, 2007 was above the median.

Based on its review, which included careful consideration of all of the factors noted above, the Board concluded that the Fund’s performance was satisfactory.

Management fees and expense ratios

The Board reviewed and considered the contractual management fee payable by the Fund to the Manager in light of the nature, extent and quality of the management and sub-advisory services provided by the Manager and the Subadviser. The Board also reviewed and considered that fee waiver and/or expense reimbursement arrangements currently are in place for the Fund and considered the actual fee rate (after taking waivers and reimbursements into account) and that the Manager has agreed to continue its fee waivers and reimbursements until further notice. In addition, the Board noted that the

54  |  Tax Free Reserves Portfolio

compensation paid to the Subadviser is paid directly by the Manager, not the Fund, and, accordingly, that the retention of the Subadviser does not increase the fees or expenses otherwise incurred by the Fund’s shareholders.

Additionally, the Board received and considered information comparing each Feeder Fund’s contractual management fee (each, a “Contractual Management Fee”) and the actual fee rate (after taking waivers and reimbursements into account) (each an “Actual Management Fee”) and the Feeder Fund’s overall expenses with those of funds in both the relevant expense group and a broader group of funds, each selected and provided by Lipper. The expense comparisons compared the Feeder Fund to funds similar in size to the Fund, and the Board noted that the Feeder Funds’ assets represented a significant portion of the Fund’s assets. The Board noted that each Feeder Fund’s expense information reflected both management fees and total expenses payable by the Feeder Fund as well as management fees and total expenses payable by the Fund, and therefore was relevant to the Board’s conclusions regarding the Fund’s expenses. The Board also reviewed information regarding fees charged by the Manager to other U.S. clients investing primarily in an asset class similar to that of the Fund, including, where applicable, separate accounts.

The Manager reviewed with the Board the differences in scope of services provided to the Fund and to these other clients, noting that the Fund is provided with administrative services, office facilities, Fund officers (including the Fund’s chief executive, chief financial and chief compliance officers), and that the Manager coordinates and oversees the provision of services to the Fund by other Fund service providers. The Board considered the fee comparisons in light of the differences required to manage these different types of accounts. The Board also considered and discussed information about the Subadvisers’ fees, including the amount of the management fees retained by the Manager after payment of the subadvisory fee. The Board also received an analysis of complex-wide management fees provided by the Manager, which, among other things, set out a framework of fees based on asset classes.

Management also discussed with the Board the Fund’s placement agency arrangements and the distribution arrangements of the Feeder Funds. The Board noted that beneficial interests in the Fund are issued solely in private placement transactions that do not involve any “public offering” within the meaning of Section 4(2) of the Securities Act of 1933, as amended, and that the placement agent for the Fund receives no compensation for serving in that capacity. The Board also was provided with information concerning revenues received by and certain expenses incurred by distributors affiliated with the Fund during the past two years and how the amounts received by the distributors were paid during that period.

The information comparing each Feeder Fund’s Contractual Management Fee and its Actual Management Fee (which reflects a fee waiver) as well as its actual total expense ratio to its Lipper expense group, consisting of a group (including

Tax Free Reserves Portfolio  |  55

Board approval of management and
subadvisory agreements (unaudited) continued

the Feeder Fund) of either retail no-load funds classified as “tax exempt money market funds” or funds classified as “institutional tax exempt money market funds” and chosen to be comparable to the Feeder Fund by Lipper, showed that Citi Tax Free Reserves’ Contractual Management Fee was slightly above the median of the management fees paid by the other funds in the Lipper expense group, Citi Institutional Tax Free Reserves was slightly below the median of the management fees paid by the other funds in the Lipper expense group and that each Feeder Fund’s Actual Management Fee was below the median of its expense group. The Board noted that each Feeder Fund’s actual total expense ratio also was below the median of its expense group. The Board also noted that the Manager was continuing its voluntary waiver until further notice, resulting in the same net effective fee as currently in place, which is lower than the Fund’s current contractual management fee.

Taking all of the above into consideration, the Board determined that the management fee and the subadvisory fees for the Fund were reasonable in light of the nature, extent and quality of the services provided to the Fund under the Management Agreement and the Sub-Advisory Agreement.

Manager profitability

The Board received and considered an analysis of the profitability of the Manager and its affiliates in providing services to the Fund. The Board also received profitability information with respect to the Legg Mason Partners fund complex as a whole. In addition, the Board received information with respect to the Manager’s allocation methodologies used in preparing this profitability data, as well as a report from an outside consultant that had reviewed the methodologies. The profitability of the Manager and its affiliates was considered by the Board not excessive in light of the nature, extent and quality of the services provided to the Fund and the type of fund.

Economies of scale

The Board received and discussed information concerning whether the Manager realizes economies of scale as the Fund’s assets grow. The Board noted that each Feeder Fund’s Contractual Management Fee (which also reflects the Fund’s management fee) is slightly above or below the average of such Feeder Fund’s Lipper expense group and such Feeder Fund’s Contractual Management Fee is approximately equivalent to the asset-weighted average of the management fees paid by the funds in the Feeder Fund’s expense group at all asset levels as set forth in the information provided by Lipper. The Board also noted that the each Feeder Fund’s Actual Management Fee (which also reflects the Fund’s management fee) was below the median of its expense group. The Board also noted that as the Fund’s assets have increased over time, certain expenses, such as fees for Board members, auditors and legal fees, become a smaller percentage of overall assets. The Board also considered fee waivers by

56  |  Tax Free Reserves Portfolio

the Manager and the fact that the Manager pays the subadvisory fee out of the management fee.

The Board determined that the management fee structure for the Fund was reasonable.

Other benefits to the manager and the subadviser

The Board considered other benefits received by the Manager, the Subadviser and their affiliates as a result of their relationship with the Fund, including the opportunity to offer additional products and services to Fund shareholders.

In light of the costs of providing investment management and other services to the Fund and the ongoing commitment of the Manager and the Subadviser to the Fund, the Board considered that the ancillary benefits that the Manager and its affiliates received were reasonable.

* * *

In light of all of the foregoing, the Board determined that the continuation of each of the Management Agreement and Sub-Advisory Agreement would be in the best interests of the Fund’s shareholders and approved the continuation of such agreements for another year.

Tax Free Reserves Portfolio  |  57

[This page intentionally left blank.]

[This page intentionally left blank.]

ITEM 2.	CODE OF ETHICS.
	Not applicable.
ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT.
	Not applicable.
ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES
	Not applicable.
ITEM 5.	AUDIT COMMITTEE OF LISTED REGISTRANTS.
	Not applicable.
ITEM 6.	SCHEDULE OF INVESTMENTS.
	Included herein under Item 1.
ITEM 7.	DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
	Not applicable.
ITEM 8.	PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
	Not applicable.
ITEM 9.	PURCHASES OF INCOME SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
	Not applicable.
ITEM 10.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
	Not applicable.
ITEM 11.	CONTROLS AND PROCEDURES.

(a)      The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b)      There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12.	EXHIBITS.
	(a) (1) Not applicable.
	Exhibit 99.CODE ETH
	(a) (2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.
	Exhibit 99.CERT
	(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.
	Exhibit 99.906CERT

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.

Master Portfolio Trust
By:	/s/ R. Jay Gerken
	(R. Jay Gerken)
	Chief Executive Officer of
	Master Portfolio Trust
Date:	May 1, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ R. Jay Gerken
	(R. Jay Gerken)
	Chief Executive Officer of
	Master Portfolio Trust
Date:	May 1, 2008
By:	/s/ Frances M. Guggino
	(Frances M. Guggino)
	Chief Financial Officer of
	Master Portfolio Trust
Date:	May 1, 2008