-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GBvn1odv8PiLH36ebX1QGn17dfMwaKIo6lEZfP+dQkFv5lAPHUmIqspPue5skvO4 /iRw0gNYlKqX9HUViL+jig== 0000935069-02-000967.txt : 20020829 0000935069-02-000967.hdr.sgml : 20020829 20020829133204 ACCESSION NUMBER: 0000935069-02-000967 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020829 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BT INVESTMENT FUNDS CENTRAL INDEX KEY: 0000797657 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04760 FILM NUMBER: 02752370 BUSINESS ADDRESS: STREET 1: FEDERATED INVESTORS TOWERS CITY: PITTSBURGH STATE: PA ZIP: 15222-3770 BUSINESS PHONE: 412881401 MAIL ADDRESS: STREET 1: 6 ST JAMES AVE 9TH FL STREET 2: C/O SIGNATURE FINANCIAL GROUP CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: BT TAX FREE INVESTMENT TRUST DATE OF NAME CHANGE: 19880530 N-30D 1 combtax.txt COMBO TAX FREE SA [GRAPHIC OMITTED] DEUTSCHE ASSET MANAGEMENT Mutual Fund Semi-Annual Report June 30, 2002 Investment NY Tax Free Money Fund Tax Free Money Fund [GRAPHIC OMITTED} A Member of the Deutsche Bank Group Investment Funds - -------------------------------------------------------------------------------- TABLE OF CONTENTS LETTER TO SHAREHOLDERS ......................................... 3 INVESTMENT FUNDS Schedules of Investments .................................... 7 Statements of Assets and Liabilities ........................15 Statements of Operations ....................................16 Statements of Changes in Net Assets .........................17 Financial Highlights ........................................18 Notes to Financial Statements ...............................20 ----------------------------- The Funds are not insured by the FDIC and are not a deposit, obligation of or guaranteed by Deutsche Bank AG. Each Fund is subject to investment risks, including possible loss of principal amount invested. ----------------------------- - -------------------------------------------------------------------------------- 2 Investment Funds - -------------------------------------------------------------------------------- LETTER TO SHAREHOLDERS We are pleased to present you with this semi-annual report for NY Tax Free Money Fund and Tax Free Money Fund (the 'Funds'), providing a detailed review of the markets, the Portfolios, and our outlook. Included are a complete financial summary of the Funds' operations and a listing of the Portfolios' holdings. MARKET ACTIVITY AS 2002 BEGAN, THE WEAKENED STATE OF THE US ECONOMY CAUSED MUCH UNCERTAINTY IN THE FINANCIAL MARKETS. MANY INVESTORS REMAINED SKEPTICAL AS TO WHETHER THE FEDERAL RESERVE BOARD HAD COMPLETED ITS INTEREST RATE CUTTING CYCLE. o Despite a stream of economic data that pointed to signs of bottoming in the general US economy, fears related to the ongoing war on terrorism kept the Federal Reserve Board on hold. o By February, it became clear that no more interest rate cuts would likely be forthcoming from the Federal Reserve Board during this cycle and additionally that interest rate hikes might not be too long in coming. o In fact, at its March 19th meeting, the Federal Reserve Board kept the federal funds rate at 1.75% but shifted from an easing to a neutral bias, citing a slow economic recovery in progress. The money markets began pricing in potential interest rate increases by mid-year 2002 causing the yield curve to steepen. AS THE SECOND CALENDAR QUARTER GOT UNDERWAY, THE US ECONOMIC RECOVERY SEEMED A BIT MORE TENTATIVE THAN DURING THE FIRST QUARTER. o Business spending began to pick up and the consumer continued to spend, especially on housing. o However, no improvement could be detected in the labor market. In fact, the unemployment rate climbed to 6% in April before leveling off in May and June. o Manufacturing in the US also remained weak. o In reaction, the one-year US Treasury yield curve flattened somewhat, as market participants expected the federal funds rate to remain unchanged at 1.75% until at least the fourth quarter of 2002. THE GLOBAL POLITICAL ENVIRONMENT ALSO IMPACTED THE MONEY MARKETS DURING THE SEMI-ANNUAL PERIOD. o Renewed terrorist threats in the US weighed on the confidence of American financial markets, as did escalating tensions in the Middle and Far East. Disquiet between India and Pakistan built, and suicide bombings in Israel reached new levels of devastation. o Toward the end of the semi-annual period, US citizens were on heightened alert, as the Office of Homeland Security issued new terror alerts surrounding the July 4th holiday weekend. ALSO ON THE FOREFRONT OF THE MONEY MARKETS' ATTENTION WAS THE DEVALUATION OF THE US DOLLAR IN THE GLOBAL CURRENCY MARKETS. o As the second calendar quarter was coming to a close, the US dollar and the euro nearly reached parity. o Currency traders were focusing on global terror woes and the slower than expected recovery of the US economy. TO A LESS DRAMATIC DEGREE, THE MUNICIPAL MARKETS FOLLOWED A SIMILAR TREND AS THEIR TAXABLE COUNTERPARTS, WITH YIELDS DECLINING IN SPITE OF STEADY CASH FLOW INTO THE MUNICIPAL MARKETS AND AN INCREASE IN MUNICIPAL ISSUANCE. MUNICIPAL MARKET CREDIT QUALITY REMAINED FAIRLY STABLE. o As the pace of US economic recovery remained sluggish during the first half of 2002, many municipal revenue sources were impacted. However, given that many large municipal issuers were able to increase cash surpluses over the past several years, municipal credit quality remained stable during the semi-annual period. o Among the states that issued new paper in the first half of 2002 was California. California issued $7.5 billion in revenue anticipation warrants due to the soft economy and the State's rising expenditures. California anticipates further issuance in the third quarter totaling approximately $7 billion. Other municipal borrowers issued larger deals and some came back to the market after several years of surplus had temporarily reduced the need for borrowing. o The increased issuance of short-term notes did not result in significant upward pressure on one-year rates however, as this rise in supply was offset by strong demand. With headlines in the financial press dominated by volatile US equity performance, corporate accounting failures and conflict of interest issues, investors continued their flight to quality, seeking the perceived safe haven of municipal bonds. - -------------------------------------------------------------------------------- 3 Investment Funds - -------------------------------------------------------------------------------- LETTER TO SHAREHOLDERS o Municipal money market assets increased over the first half of 2002, with the majority of this increase occurring during the month of January. o The yield on one-year municipal notes declined by 0.28%, from 1.78% on December 31, 2001 to 1.50% on June 30, 2002. INVESTMENT REVIEW
Annualized 7 Day Periods Ended Annualized 7 Day Annualized 7 Day Effective Taxable June 30, 2002 Current Yield 2 Effective Yield 2 Equivalent Yield NY Tax Free Money Fund Investment 1,3 0.58% 0.58% 1.01% - ----------------------------------------------------------------------------------------------------------------- iMoneyNet--State Specific Retail Money Funds Average 4 0.84% 0.84% n/a - ----------------------------------------------------------------------------------------------------------------- Tax Free Money Fund Investment 1,3 0.68% 0.68% 1.11% - ----------------------------------------------------------------------------------------------------------------- iMoneyNet--National RetailTax FreeMoney Funds Average 4 0.92% 0.92% n/a - ----------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- 1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Yields will fluctuate. The yields quoted more closely reflect the Funds' current earnings than the total return quotations below. 'Current yield' refers to the income generated by an investment in the Funds over a seven-day period. This income is then 'annualized.' The 'effective yield' is calculated similarly but, when annualized, the income earned by an investment in the Funds is assumed to be reinvested. The 'effective yield' may be slightly higher than the 'current yield' because of the compounding effect of this assumed reinvestment. The 'taxable equivalent yield' demonstrates the yield on a taxable investment necessary to produce an after-tax yield equal to a fund's tax free yield. An investment in each Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although each Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds. 2 The investment advisor and administrator have contractually agreed to waive their fees and/or reimburse expenses until April 30, 2003 so that total net expenses are not exceeded. Without such fee waivers the seven-day current and effective yields would have been 0.51% and 0.51%, respectively for NY Tax Free Money Fund Investment, and 0.62% and 0.62%, respectively for Tax Free Money Fund Investment. 3 For certain investors, a portion of the Fund's income may be subject to the federal alternative minimum tax. Distribution of the Fund's income may be subject to state and local taxes. The taxable equivalent yield for Tax Free Money Fund Investment reflects the maximum regular federal tax bracket of 38.6% and, for NY Tax Free Money Fund Investment, a combined regular federal, state and city tax bracket of 42.81% is used. 4 Money Fund Report Averages, a service of iMoneyNet, Inc., are averages for categories of similar money market funds.
CUMULATIVE AVERAGE ANNUAL TOTAL RETURNS TOTAL RETURNS Periods Ended 6 Months 1 Year 3 Years 5 Years 10 Years Since 1 Year 3 Years 5 Years 10 Years Since June 30, 2002 Inception 2 Inception 2 NY Tax Free Money Fund Investment 1,3 0.32% 0.99% 6.86% 12.55% 26.70% 49.91% 0.99% 2.24% 2.39% 2.39% 2.99% iMoneyNet--State Specific Retail Money Funds Average 4 0.43% 1.21% 7.47% 13.56% 29.15% 53.06% 1.21% 2.43% 2.57% 2.59% 3.14% - ------------------------------------------------------------------------------------------------------------------------------------ Tax Free Money Fund Investment 1,3 0.37% 1.13% 7.29% 13.22% 28.80% 62.46% 1.13% 2.37% 2.51% 2.56% 3.28% iMoneyNet--National Retail Tax Free Money Funds Average 4 0.46% 1.28% 7.92% 14.30% 30.69% 64.98% 1.28% 2.57% 2.71% 2.71% 3.39% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Total returns will fluctuate. All performance assumes the reinvestment of dividends. Performance would have been lower during the specified periods if certain of each Fund's fees and expenses had not been waived. 2 The Funds' inception dates are: NY Tax Free Money Fund Investment: September 27, 1988; Tax Free Money Fund Investment: June 10, 1987. Benchmark returns are for the periods beginning September 30, 1988 for the iMoneyNet--State Specific Retail Money Funds Average and June 30, 1987 for the iMoneyNet--National Retail Tax Free Money Funds Average. 3 For certain investors, a portion of the Fund's income may be subject to the federal alternative minimum tax. Distribution of the Fund's income may be subject to state and local taxes. 4 Money Fund Report Averages, a service of iMoneyNet, Inc., are averages for categories of similar money market funds.
- -------------------------------------------------------------------------------- 4 Investment Funds - -------------------------------------------------------------------------------- LETTER TO SHAREHOLDERS NY TAX FREE MONEY During the semi-annual period, we lengthened the Fund's weighted average maturity from 44 days to 56 days, keeping the Fund within a neutral to longer-than-benchmark range. We adjusted the Fund's weighted average maturity to prepare for seasonal events and supply/demand phenomena. For example, the 'January Effect' is a period when a large amount of cash flows into the municipal money market from maturing securities and coupon payments. April is traditionally a month when withdrawals from money market funds are par for the course. Redemptions from tax-exempt money markets during the 2002 tax season totaled approximately 2%, compared to approximately 6% in 2001. Given the flight to greater levels of safety benefiting US municipal markets and the relatively light season of tax redemptions, there was only a brief intra-month increase in yields during April. As usual, a large percentage of high quality municipal issues became available in June. Net assets in the Fund remained relatively stable during the semi-annual period. SECTOR ALLOCATION By Asset Type as of June 30, 2002 (percentages are based on market value of total investments in the Portfolio) [PIE CHART OMITTED] DATA POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS: G.O. Bonds 3% Floating Rate Demand Notes 55% Commercial Paper 26% Bond Anticipation Notes 7% Revenue Anticipation Notes 5% Revenue Bonds 4% - -------------------------------------------------------------------------------- TAX FREE MONEY As with the NY Tax Free Money Fund, we kept this Fund's weighted average maturity in the neutral to longer-than-benchmark range. The Fund's weighted average maturity started the year at 47 days and stood at 42 days at June 30, 2002. We adjusted the Fund's weighted average maturity to prepare for seasonal events, such as tax time in April and the January and July reinvestment periods. Net assets in the Fund decreased about 8% during the semi-annual period. MANAGER OUTLOOK In our view, the US economy continues to chug along, still with promises of some pickup in growth ahead. Non-defense capital goods shipments and orders came in somewhat stronger than expected, and equipment and software spending are anticipated to record a moderate increase for the second calendar quarter. The housing market continues to exhibit impressive vigor, as sales of new homes soared in June. While downside risks remain considerable, we believe the US economy nevertheless shows promising signs of returning to trend growth. We expect that the Federal Reserve Board will keep interest rates unchanged for at least the next several meetings and is unlikely to begin the process of reversing some of last year's interest rate cuts until it is more confident in the sustainability of the economic expansion. At a minimum, the Federal Reserve Board will want to see more concrete signs of a revival in business investment and much greater improvement in the labor markets. We expect this evidence to emerge gradually in the second half of this year and then continue to solidify in 2003. A sufficient case to begin the tightening process is unlikely to be built before the fourth quarter of 2002 at the earliest. SECTOR ALLOCATION By Asset Type as of June 30, 2002 (percentages are based on market value of total investments in the Portfolio) [PIE CHART OMITTED] DATA POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS: Floating Rate Notes 2% Floating Rate Demand Notes 66% Commercial Paper 14% Revenue Anticipation Notes 6% Revenue Bonds 5% G.O. Bonds 4% Taxable Revenue Anticipation Notes 3% - -------------------------------------------------------------------------------- 5 Investment Funds - -------------------------------------------------------------------------------- LETTER TO SHAREHOLDERS In light of this view, we will look to maintain the Funds' weighted average maturity in a neutral position, usually within the 40 to 50 day range. We intend to continue to adjust the Funds' weighted average maturities in anticipation of seasonal factors, supply/demand opportunities and anticipated changes in Federal Reserve Board monetary policy. Given the apparently ongoing flight to quality and sluggish economic recovery as well as potentially higher short-term rates toward the end of 2002, we will also seek to make selective purchases in the six- to thirteen-month range. We remain especially careful when making one-year purchases, as the backdrop for higher rates, including higher supply, continues. As for the credit quality outlook, we do have concerns. Toward the end of the semi-annual period, we began to see revenue shortfalls and expenditure increases. This will likely result in many projected budget shortfalls at the state level. Going forward, then, we expect difficult negotiations regarding budget decisions, an increase in short-term note issuance and a softening of credit quality. It becomes increasingly important that we continue to seek high-quality, attractive issue-specific buying opportunities as they arise. We will, of course, continue to closely observe economic conditions and how they affect the financial markets, as we seek to provide high current income consistent with liquidity and capital preservation. /S/ STEVEN H. BOYD Steven H. Boyd Portfolio Manager of TAX FREE MONEY FUND and NY TAX FREE MONEY FUND June 30, 2002 - -------------------------------------------------------------------------------- 6 NY Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE NEW JERSEY--4.05% New Jersey Port Authority, Series B: $ 4,000,000 1.20%, 8/8/02 .......................................................................................... $ 4,000,000 500,000 1.30%, 10/9/02 ......................................................................................... 500,000 ------------ TOTAL NEW JERSEY (Amortized Cost $4,500,000) ......................................................................... 4,500,000 ------------ NEW YORK--100.76% 3,000,000 Buffalo, New York, G.O., Revenue Anticipation Notes, (FGIC Insured), 2.50%, 6/27/03 .................... 3,028,470 2,370,000 Erie County, New York, Industrial Development Agency, Civic Facilities Revenue, Subordinate Adult Services, (LOC: Keybank N.A.), Variable Weekly Rate, Revenue Bond,1 1.35%, 6/1/22 .............................. 2,370,000 2,775,000 Great Neck North, New York, Water Authority, Water System Revenue, Series A, (FGIC Insured), (SPA: FGIC), Floating Rate Weekly Demand Note,1 1.04%, 1/1/20 ........................................ 2,775,000 1,000,000 Long Island Power Authority, New York, Electric System Revenue, Sub-Series 2A, (LOC: Westdeutsche Landesbank), (LOC: State Street Bank & Trust Co.), Floating Rate Weekly Demand Note,1 1.10%, 5/1/33 .. 1,000,000 2,000,000 Long Island Power Authority, New York, Electric System Revenue, Sub-Series 3A, (LOC: Morgan Guaranty Trust), Floating Rate Weekly Demand Note,1 1.11%, 5/1/33 ....................... 2,000,000 225,000 Municipal Assistance Corp. for New York City, New York, Series G, (GO of Corp. Insured), Revenue Bond, 5.00%, 7/1/02 ................................................... 225,000 100,000 Municipal Assistance Corp. for New York City, New York, Series M, Revenue Bond, 5.00%, 7/1/02 .......... 100,000 4,000,000 Nassau County, New York, Interim Finance Authority, Series B-1, Bond Anticipation Note, 2.50%, 7/18/02 . 4,001,901 4,200,000 New York City, New York, Cultural Resource Revenue, Museum of Broadcasting, (LOC: KBC Bank N.V.), Floating Rate Weekly Demand Note,1 1.15%, 5/1/14 ............................... 4,200,000 2,300,000 New York City, New York, Health & Hospital Corp. Revenue, Health Systems, Series C, (LOC: Toronto Dominion Bank), Floating Rate Weekly Demand Note,1 1.15%, 2/15/26 ...................... 2,300,000 2,500,000 New York City, New York, Health & Hospital Corp. Revenue, Health Systems, Series D, (LOC: Bank of Nova Scotia), Floating Rate Weekly Demand Note,1 1.10%, 2/15/26 ........................ 2,500,000 1,300,000 New York City, New York, Housing Development Corp., Mortgage Revenue, Columbus Apartments, Series A, (FNMA Insured), Floating Rate Weekly Demand Note,1 1.10%, 3/15/25 .................................... 1,300,000 1,500,000 New York City, New York, Housing Development Corp., Multifamily Rent Housing Revenue, Carnegie Park, Series A, (FNMA Guaranteed), Variable Weekly Rate, Revenue Bond,1 1.10%, 11/15/19 .................... 1,500,000 3,000,000 New York City, New York, Housing Development Corp., Multifamily Rent Housing Revenue, Monterey, Series A, (FNMA Guaranteed), Variable Weekly Rate, Revenue Bond,1 1.10%, 11/15/19 .................... 3,000,000 2,000,000 New York City, New York, Municipal Water Finance Authority, Water & Sewer Revenue, Series A, (FGIC Insured), (SPA: FGIC), Floating Rate Daily Demand Note,1 1.80%, 6/15/25 ........................ 2,000,000 500,000 New York City, New York, Sub-Series B5, G.O., (MBIA Insured), (SPA: Landesbank Hessen), Floating Rate Daily Demand Note,1 1.75%, 8/15/09 ..................................................... 500,000 1,000,000 New York City, New York, Sub-Series H-4, G.O., (AMBAC Insured), (SPA: Kredietbank N.V.), Floating Rate Weekly Demand Note,1 1.15%, 8/1/15 ..................................................... 1,000,000 2,000,000 New York City, New York, Transitional Finance Authority Revenue, Bond Anticipation Note, Series 3, 2.75%, 11/13/02 ............................................................................ 2,006,750 45,000 New York City, New York, Transitional Finance Authority Revenue, Future Tax Secured, Series A, (SPA: Bank One N.A.), Floating Rate Weekly Demand Note,1 1.05%, 2/15/30 .............................. 45,000
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 7 NY Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE $ 950,000 New York City, New York, Transitional Finance Authority Revenue, Future Tax Secured, Series A-1, (SPA: Morgan Guaranty Trust, Society Generale, Commerzbank), Floating Rate Weekly Demand Note,1 1.05%, 11/15/22 ........................................................................ $ 950,000 1,000,000 New York City, New York, Transitional Finance Authority Revenue, Recovery Note, Series A, 3.25%, 10/2/02 1,004,437 3,000,000 New York City, New York, Transitional Finance Authority Revenue, Series 4, 2.50%, 2/26/03 .............. 3,019,666 2,800,000 New York City, Water Revenue, Commercial Paper, Series 5, 1.30%, 8/5/02 ................................ 2,800,000 5,000,000 New York State Dormitory, Columbia, Commercial Paper, 1.35%, 10/10/02 .................................. 5,000,000 2,000,000 New York State Thruway, Commercial Paper, 1.40%, 8/7/02 ................................................ 2,000,000 1,000,000 New York State, Dormitory Authority Revenue, Cornell University, Series A, (SPA: Toronto Dominion Bank), Floating Rate Weekly Demand Note,1 1.15%, 7/1/29 ..................................................... 1,000,000 3,910,000 New York State, Dormitory Authority Revenue, Cornell University, Series B, (SPA: Toronto Dominion Bank), Floating Rate Weekly Demand Note,1 1.15%, 7/1/30 ..................................................... 3,910,000 1,280,000 New York State, Dormitory Authority Revenue, New York Public Library, Series A, (MBIA Insured), (SPA: First Union National Bank), Floating Rate Weekly Demand Note,1 1.10%, 7/1/28 ................... 1,280,000 3,000,000 New York State, Dormitory Authority Revenue, Rockefeller University, Series A2, Floating Rate Weekly Demand Note,1 1.15%, 7/1/32 ..................................................... 3,000,000 300,000 New York State, Dormitory Authority Revenue, University of Rochester, Series A, Revenue Bond, 5.00%, 7/1/02 300,000 3,000,000 New York State, Energy Research & Development Authority, Pollution Control Revenue, Niagara Mohawk Power, Series A, (LOC: Toronto Dominion Bank), Floating Rate Daily Demand Note,1 2.00%, 7/1/15 ....... 3,000,000 3,000,000 New York State, Environmental Facilities Corp., 1.43%, 8/9/02 .......................................... 3,000,000 2,760,000 New York State, Environmental Facilities Corp., State Clean Water & Drinking Revolving Funds, Series F, Revenue Bond, 3.50%, 5/15/03 ............................................................... 2,803,012 1,200,000 New York State, G.O., 1.40%, 7/23/02 ................................................................... 1,200,000 1,094,000 New York State, Housing Finance Agency Revenue, Hospital Special Surgery Staff, Series A, (LOC: Chase Manhattan Bank), Revenue Bond, 1.35%, 11/1/10 ............................................ 1,094,000 5,090,000 New York State, Housing Finance Agency Revenue, Normandie County I Project, (LOC: Landesbank Hessen), Variable Weekly Rate, Revenue Bond,1 1.10%, 5/15/15 .................................................. 5,090,000 New York State, Housing Finance Agency Service Contract Obligation Revenue, Series A, (LOC: Commerzbank A.G.), Variable Weekly Rate, Revenue Bond,1: 3,000,000 1.25%, 3/15/27 ....................................................................................... 3,000,000 3,400,000 1.30%, 3/15/28 ....................................................................................... 3,400,000 400,000 New York State, Local Government Assistance Corp., Series B, (GO of Corp. Insured), (LOC: Westdeutsche Landesbank), (LOC: Bayerische Landesbank), Floating Rate Weekly Demand Note,1 1.10%, 4/1/23 .......... 400,000 3,000,000 New York State, Local Government Assistance Corp., Series G, (LOC: Bank of Nova Scotia), Floating Rate Weekly Demand Note,1 1.10%, 4/1/25 ..................................................... 3,000,000 880,000 New York State, Mortgage Agency Revenue, Homeowner Mortgage, Series UU, (FHA Mortgage Guaranteed), Revenue Bond, 3.00%, 11/15/02 ............................................. 884,959 1,995,000 New York State, Thruway Authority, General Revenue, Bond Anticipation Note, Series A, 3.25%, 3/26/03 ... 2,010,039 1,900,000 New York State, Triborough Bridge & Tunnel Authority, Series A, (FSA Insured), (SPA: Morgan Guaranty Trust), Floating Rate Weekly Demand Note,1 1.15%, 1/1/31 ....................... 1,900,000
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 8 NY Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE $ 6,000,000 New York State, Triborough Bridge & Tunnel Authority, Series C, (AMBAC Insured), (SPA: Westdeutsche Landesbank), Floating Rate Weekly Demand Note,1 1.10%, 1/1/13 .................... $ 6,000,000 New York, LIP Authority, Commercial Paper: 4,000,000 1.35%, 8/7/02 ........................................................................................ 4,000,000 2,000,000 1.35%, 9/6/02 ........................................................................................ 2,000,000 1,000,000 New York, Metropolitan Transit Authority, Commercial Paper, 1.35%, 10/7/02 ............................. 1,000,000 New York, Metropolitan Transportation, Commercial Paper: 4,000,000 1.35%, 8/28/02 ....................................................................................... 4,000,000 500,000 1.35%, 9/6/02 ........................................................................................ 500,000 500,000 New York, Thruway Authority, Commercial Paper, 1.30%, 10/9/02 .......................................... 500,000 3,000,000 Suffolk County, New York, Series B, (FGIC Insured), G.O., 4.00%, 12/1/02 ............................... 3,027,419 ------------ TOTAL NEW YORK (Amortized Cost $111,925,653) ......................................................................... 111,925,653 ------------ PUERTO RICO--1.49% 1,650,000 Puerto Rico, Commonwealth Highway & Transportation Authority, Transportation Revenue, Series A, (AMBAC Insured), (SPA: Bank of Nova Scotia), Revenue Bond, 1.10%, 7/1/28, (Amortized Cost $1,650,000) .......................................................................... 1,650,000 ------------ TOTAL INVESTMENTS (Amortized Cost $118,075,653)2 ..............................................................106.30% $118,075,653 LIABILITIES IN EXCESS OF OTHER ASSETS ......................................................................... (6.30) (6,999,360) ------- ------------ NET ASSETS ....................................................................................................100.00% $111,076,293 ======= ============ - ------------------------------------------------------------------------------------------------------------------------------------ 1 Security payable on demand, secured by Bank Letter of Credit on other bank credit agreements. This interest rate, which will change periodically, is based on bank prime rates or other interest rates. 2 Also aggregate cost for federal tax purposes. The following abbreviations are used in the portfolio description: AMBAC--American Municipal Bond Assurance Corporation FGIC --Financial Guaranty Insurance Company FHA --Federal Housing Administration FNMA --Federal National Mortgage Association FSA --Financial Security Assurance GO --General Obligation LOC --Letter of Credit MBIA --Municipal Bond Investors Assurance SPA --Standby Purchase Agreement
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 9 Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE ALABAMA--1.98% $ 3,000,000 Jefferson County, Alabama, Sewer Revenue, Capital Improvement Warrants, Series A, (FGIC Insured), (SPA: J.P. Morgan Chase & Co.), 1.30%, 2/1/42 ........................................................ $ 3,000,000 ------------ ARIZONA--1.39% 2,100,000 Apache County, Arizona, Industrial Development Authority, Industrial Development Revenue, Tuscon Electric Power, (LOC: Toronto Dominion Bank), Variable Weekly Rate, Revenue Bond,1 1.20%, 12/15/18 ............ 2,100,000 ------------ CALIFORNIA--0.99% 1,500,000 California State, Revenue Anticipation Warrants, Series A, 2.50%, 10/25/02 ............................. 1,503,876 ------------ COLORADO--6.15% 1,000,000 Colorado, Housing & Finance Authority, Multifamily-Diamond, Series I, (FNMA Guaranteed), Variable Weekly Rate, Revenue Bond,1 1.20%, 10/15/16 ................................................. 1,000,000 805,000 Colorado, Housing & Finance Authority, Multifamily-Greenwood, Series D, (FNMA Guaranteed), Variable Weekly Rate, Revenue Bond,1 1.20%, 10/15/16 ................................................. 805,000 1,500,000 Colorado, Housing & Finance Authority, Multifamily-Hunters, Series E, (FNMA Guaranteed), Variable Weekly Rate, Revenue Bond,1 1.20%, 10/15/16 ................................................. 1,500,000 2,000,000 Regional Transportation District, Colorado, 1.60%, 10/8/02 ............................................. 2,000,000 4,000,000 Traer Creek Metropolitan District, Colorado, Bond Revenue, Avon, (LOC: BNP Paribas), 1.30%, 10/1/21 .... 4,000,000 ------------ 9,305,000 ------------ FLORIDA--6.14% 1,000,000 Capital Projects Finance Authority, Florida, Glenridge On Palmer Ranch, Series C, (LOC: Bank of Scotland), 1.85%, 6/1/12 ............................................................... 1,000,000 1,500,000 Jacksonville, Florida, Capital Project Revenue, Series 1, (AMBAC Insured), Variable Weekly Rate, Revenue Bond,1 1.15%, 10/1/17 ........................................................................ 1,500,000 1,300,000 Jacksonville, Florida, Electric Authority Revenue, Zero Coupon, 10/1/30 ................................ 1,300,000 1,000,000 Jacksonville, Florida, Electric Authority Revenue, Electric System, Series C, (SPA: Dexia Credit Local), Floating Rate Daily Demand Note,1 1.85%, 10/1/30 ..................................................... 1,000,000 3,000,000 Jacksonville, Florida, Electric Authority Revenue, Series C-1, 1.50%, 9/12/02 .......................... 3,000,000 1,500,000 Pinellas County, Florida, Health Facilities Authority Revenue, Pooled Hospital Loan Program, (AMBAC Insured), (SPA: Suntrust Bank), 1.85%, 12/1/15 ................................................................. 1,500,000 ------------ 9,300,000 ------------ GEORGIA--11.51% 3,000,000 Atlanta, Georgia, Water & Waste Revenue, Series B, (FSA Insured), (SPA: Dexia Credit Local), 1.15%, 11/1/38 ....................................................................................... 3,000,000 2,000,000 Burke County, Georgia, Commercial Paper, 1.50%, 7/18/02 ................................................ 2,000,000 2,000,000 Burke County, Georgia, Development Authority Pollution Control Revenue, Oglethorpe Power Corp., Series A, (AMBAC Insured), (SPA: Morgan Guaranty Trust), Floating Rate Daily Demand Note,1 1.85%, 1/1/20 ....... 2,000,000 2,000,000 Cobb County, Georgia, Housing Authority Multifamily Housing Revenue, Post Mill Project, (FNMA Guaranteed), Variable Weekly Rate, Revenue Bond,1 1.22%, 6/1/25 ................................................... 2,000,000 1,000,000 Macon-Bibb County, Georgia, Hospital Authority Revenue, Anticipation Certificates, Medical Center Control, (LOC: Suntrust Bank, Atlanta), Floating Rate Weekly Demand Note,1 1.25%, 12/1/18 ..................... 1,000,000
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 10 Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE $ 2,150,000 Municipal Electric Authority, Georgia, Project One, Series B, (FSA Insured), (SPA: Dexia Bank), 1.10%, 1/1/16 ..................................................................... $ 2,150,000 1,250,000 Municipal Electric Authority, Georgia, Project One, Sub-Series B, (AMBAC Insured), 5.25%, 1/1/03 ....... 1,269,848 4,000,000 Smyrna, Georgia, Housing Authority, Multifamily Housing Revenue, F&M Villages Project, (FNMA Insured), Variable Weekly Rate, Revenue Bond,1 1.20%, 6/1/25 ................................................... 4,000,000 ------------ 17,419,848 ------------ ILLINOIS--16.01% 1,450,000 Chicago, Illinois, G.O., Metropolitan Water Reclamation District, Greater Chicago, 5.00%, 12/1/02 ...... 1,470,774 1,910,000 Chicago, Illinois, Sales Tax Revenue, (FGIC Insured), 4.00%, 1/1/03 .................................... 1,931,771 3,000,000 Chicago, Illinois, G.O., Series B, (FGIC Insured), (SPA: Landebank Baden), 1.27%, 1/1/37 ............... 3,000,000 2,000,000 Chicago, Illinois, G.O., Tender Notes, (LOC: Landebank Hessen), 1.90%, 1/3/03, Put Bond due 10/31/02, .. 2,000,000 3,000,000 Illinois, Development Finance Authority Revenue, Evanston Northwestern, Series A, (SPA: Bank One N.A.), Variable Weekly Rate, Revenue Bond,1 1.25%, 5/1/31 ................................................... 3,000,000 1,700,000 Illinois, Health Facility Authority Revenue, Gottlieb Health Resources, Inc., (LOC: Harris Trust and Savings Bank), Flaoting Rate Weekly Demand Note,1 1.25%, 11/15/24 .................................... 1,700,000 3,260,000 Illinois, Health Facility Authority Revenue, Gottlieb Health Resources, Inc., (LOC: Harris Trust and Savings Bank), Variable Weekly Rate, Revenue Bond,1 1.25%, 11/15/25 .................................. 3,260,000 200,000 Illinois, Health Facility Authority Revenue, Northwestern Memorial Hospital, Series C, (SPA: Westdeutsche Landebank), Variable Daily Rate, Revenue Bond,1 1.85%, 8/15/32 .................... 200,000 1,000,000 Illinois, Health Facility Authority Revenue, Resurrection Health, Series A, (FSA Insured), (SPA: Bank of Illinois N.A.), Variable Daily Rate, Revenue Bond,1 1.85%, 5/15/29 ..................... 1,000,000 1,970,000 Illinois, Housing Development Authority Multifamily Revenue, Lakeshore Plaza, Series A, (MBIA Insured), (SPA: Bank One N.A.), Floating Rate Weekly Demand Note,1 1.22%, 7/1/27 ............................... 1,970,000 2,000,000 Illinois, Housing Finance Authority, 1.60%, 9/19/02 .................................................... 2,000,000 2,700,000 Schaumburg, Illinois, G.O., Series A, (SPA: Northern Trust Co.), Floating Rate Weekly Demand Note,1 1.22%, 12/1/13 .................................................... 2,700,000 ------------ 24,232,545 ------------ IOWA--1.94% Iowa, Finance Authority Hospital Facility Revenue, Iowa Health System, Series B, (AMBAC Insured), (SPA: Harris Trust & Savings Bank), Variable Weekly Rate, Revenue Bond,1: 1,000,000 1.25%, 7/1/15 ........................................................................................ 1,000,000 1,930,000 1.27%, 1/1/28 ........................................................................................ 1,930,000 ------------ 2,930,000 ------------ KANSAS--3.30% 5,000,000 Kansas State, Department Transitional Highway Revenue, Series C-2, Revenue Bond,1 1.25%, 9/1/20 ........ 5,000,000 ------------ MARYLAND--0.66% 1,000,000 Maryland State, Department Transitional Consolidated, Revenue Bond,1 5.00%, 9/1/02 ..................... 1,005,147 ------------
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 11 Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE MICHIGAN--1.21% $ 1,000,000 Michigan State, Building Authority Revenue, Series I, Revenue Bond,1 5.875%, 10/1/08 ................... $ 1,030,001 800,000 Oakland University, Michigan, University Revenues, (FGIC Insured), (SPA: FGIC), Floating Rate Weekly Demand Note,1 1.25%, 3/1/31 ..................................................... 800,000 ------------ 1,830,001 ------------ MISSOURI--0.13% 200,000 Missouri State, Health & Educational Facility Authority, Health Facility Revenue, Demand-Barnes Hospital Project, (LOC: Morgan Guaranty Trust), Variable Weekly Rate, Revenue Bond,1 1.25%, 12/1/15 .. 200,000 ------------ NEVADA--1.98% 3,000,000 Clark County, Nevada, Highway, 1.35%, 7/29/02 .......................................................... 3,000,000 ------------ NEW HAMPSHIRE - 3.21% 3,200,000 New Hampshire, Health & Education Facilities Authority Revenue, Dartmouth Hitchcock Obligation, Series A, (FSA Insured), Variable Weekly Rate, Revenue Bond,1 1.20%, 8/1/31 .................................... 3,200,000 1,650,000 New Hampshire, Municipal Bond Bank, Series C, (MBIA Insured), 5.625%, 8/15/02 .......................... 1,655,644 ------------ 4,855,644 ------------ NEW YORK--8.29% 900,000 Buffalo, New York, G.O., Revenue Anticipation Notes, (FGIC Insured), 2.50%, 6/27/03 .................... 908,541 2,000,000 Metropolitan Transitional Authority, New York Revenue, Series D-2, (FSA Insured), (SPA: Dexia Credit Local), Variable Weekly Rate, Revenue Bond,1 1.10%, 11/1/32 .................................................. 2,000,000 7,000,000 New York City, New York, Transitional Finance Authority Revenue, Series 4, 2.50%, 2/26/03 .............. 7,040,858 2,600,000 New York State, Housing Finance Agency Service Contract Obligation Revenue, Series A, (LOC: Commerzbank A.G.), Variable Weekly Rate, Revenue Bond,1 1.30%, 3/15/28 ......................... 2,600,000 ------------ 12,549,399 ------------ NORTH CAROLINA--8.02% 4,000,000 Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care System Revenue, Series D, (Nationsbank N.A. Guaranteed), Floating Rate Weekly Demand Note,1 1.25%, 1/15/26 ..................... 4,000,000 4,400,000 North Carolina Medical Care Community Hospital Revenue, Moses H. Cone Memorial Hospital Project, (SPA: Wachovia Bank & Trust), Floating Rate Weekly Demand Note,1 1.20%, 10/1/23 ...................... 4,400,000 3,750,000 North Carolina State, G.O., Public Improvement, Series F, (SPA: Landesbank Hessen), 1.20%, 5/1/21 ...... 3,750,000 ------------ 12,150,000 ------------ PENNSYLVANIA--6.93% 1,505,000 Delaware County, Pennsylvania, Industrial Development Authority Revenue, Resource Recovery Facility, Series G, Variable Weekly Rate, Revenue Bond,1 1.15%, 12/1/31 ........................................ 1,505,000 1,000,000 Delaware Valley, Pennsylvania, Regional Finance Authority, Local Government Revenue, Mode 1, (LOC: Toronto Dominion Bank), Variable Weekly Rate, Revenue Bond,1 1.25%, 8/1/16 ..................... 1,000,000 2,585,000 Harrisburg, Pennsylvania, Authority Revenue, (LOC: Hypovereinsbank), Variable Weekly Rate, Revenue Bond,1 1.18%, 3/1/34 ......................................................................... 2,585,000 400,000 Lehigh County, Pennsylvania, Industrial Development Authority Pollution Control Revenue, Allegheny Electric Corp., (LOC: Rabobank Nederland), Floating Rate Demand Note,1 1.55%, 6/1/14 ....... 400,000
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 12 Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE $ 3,000,000 Manheim, Pennsylvania, G.O., School District, (FSA Insured), (SPA: Dexia Credit Local), 1.28%, 6/1/16 .. $ 3,000,000 2,000,000 Pennsylvania State, Higher Educational Facilities Authority Revenue, Carnegie Mellon University, Series B, (SPA: Morgan Guaranty Trust), Variable Daily Rate, Revenue Bond,1 1.30%, 11/1/27 ........... 2,000,000 ------------ 10,490,000 ------------ TENNESSEE--5.68% 1,000,000 Memphis, Tennessee, 1.30%, 9/5/02 ...................................................................... 1,000,000 2,600,000 Memphis, Tennessee, G.O., Series A, (SPA: Westdeutsche Landesbank), 1.35%, 8/1/03 ...................... 2,600,000 5,000,000 Montgomery County, Tennessee, Public Building Authority Pooled Finance Revenue, Tennessee County Loan Pool, (LOC: Bank of America N.A.), 1.85%, 4/1/32 ............................... 5,000,000 ------------ 8,600,000 ------------ TEXAS--14.50% 1,000,000 Angelina & Neches River Authority, Texas, Industrial Development Corp., Solid Waste Revenue, Series B, (LOC: Bank Of America), Floating Rate Daily Demand Note,1 1.90%, 5/1/14 .............................. 1,000,000 500,000 Angelina & Neches River Authority, Texas, Industrial Development Corp., Solid Waste Revenue, Series C, (LOC: Bank Of America), Floating Rate Daily Demand Note,1 1.90%, 5/1/14 .............................. 500,000 1,000,000 Angelina & Neches River Authority, Texas, Industrial Development Corp., Solid Waste Revenue, Series D, (LOC: Bank Of America), Floating Rate Daily Demand Note,1 1.90%, 5/1/14 .............................. 1,000,000 2,300,000 Brownsville, Texas, Utility System Revenue, Series B, (MBIA Insured), Floating Rate Weekly Demand Note,1 1.20%, 9/1/25 ..................................................... 2,300,000 295,000 El Paso, Texas, Certificates Obligation, Series A, (MBIA Insured), 6.40%, 8/15/02 ...................... 296,749 1,000,000 Harris County, Texas, Commercial Paper, 1.40%, 8/7/02 .................................................. 1,000,000 Houston, Texas, General Obligation, Series C: 3,000,000 1.35%, 8/7/02 ........................................................................................ 3,000,000 1,500,000 1.40%, 10/10/02 ...................................................................................... 1,500,000 2,000,000 Houston, Texas, Tax & Revenue Anticipation Notes, 3.00%, 6/30/03 ....................................... 2,028,100 3,000,000 North Texas Toll Authority, Commercial Paper, 1.50%, 7/10/02 ........................................... 3,000,000 735,000 Plano, Texas, Tax Notes, Series A, G.O., 3.00%, 9/1/02 ................................................. 735,828 700,000 Southwest Higher Education Authority, Inc., Southern Methodist University Project, Series B, (LOC: Landesbank Hessen), Floating Rate Weekly Demand Note,1 1.22%, 10/1/29 .......................... 700,000 1,310,000 Texas State, Series A, G.O., 5.60%, 10/1/02 ............................................................ 1,323,383 3,000,000 Texas State, Tax & Revenue Anticipation Note, Series A, 3.75%, 8/29/02 ................................. 3,009,785 565,000 Texas, Small Business Industrial Development Corp., Industrial Development Revenue, Texas Public Facilities Capital Access, (LOC: KBC Bank N.V.), Floating Rate Weekly Demand Note,1 1.40%, 7/1/26 ............... 565,000 ------------ 21,958,845 ------------ UTAH--0.20% 300,000 Utah State, Series A, G.O., (SPA: Toronto Dominion Bank), Floating Rate Weekly Demand Note,1 1.20%, 7/1/16 ........................................................................................ 300,000 ------------
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 13 Tax Free Money Fund Investment - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS June 30, 2002 (Unaudited)
PRINCIPAL AMOUNT SECURITY VALUE WASHINGTON--3.31% $ 1,000,000 King County, Washington, Sewer Revenue, Series C, 5.25%, 1/1/03 ........................................ $ 1,017,599 1,000,000 King County, Washington, Sewer Revenue, JR Lien, Series B, (LOC: Helaba), Floating Rate Weekly Demand Note,1 1.25%, 1/1/32 ..................................................... 1,000,000 2,000,000 Snohomish County, Washington, Public Utility District Number 001, Electric Revenue, Generation System, Series A, (FSA Insured), (SPA: Dexia Public Finance Bank), Floating Rate Weekly Demand Note,1 1.20%, 12/1/17 .................................................... 2,000,000 1,000,000 Tacoma, Washington, Electric Authority Revenue, 1.45%, 10/9/02 ......................................... 1,000,000 ------------ 5,017,599 ------------ WEST VIRGINIA--0.66% 1,000,000 Monongalia County, West Virginia, Building Community Hospital Revenue, Monongalia General Hospital, Series A, (LOC: Bank One West Virginia), Variable Weekly Rate, Revenue Bond,1 1.40%, 7/1/17 .......... 1,000,000 ------------ WISCONSIN--0.66% 1,000,000 Oak Creek, Wisconsin, Pollution Control Revenue, Wisconsin Electric Power Co. Project, Variable Weekly Rate, Revenue Bond,1 1.45%, 8/1/16 ......................................................................... 1,000,000 ------------ TOTAL INVESTMENTS (Amortized Cost $158,747,904)2 ..............................................................104.85% $158,747,904 LIABILITIES IN EXCESS OF OTHER ASSETS ......................................................................... (4.85) (7,342,254) ------- ------------ NET ASSETS ....................................................................................................100.00% $151,405,650 ======= ============= - ------------------------------------------------------------------------------------------------------------------------------------ 1 Security payable on demand, secured by Bank Letter of Credit on other bank credit agreements. This interest rate, which will change periodically, is based on bank prime rates or other interest rates. 2 Also aggregate cost for federal tax purposes. The following abbreviations are c used in the portfolio description: AMBAC--American Municipal Bond Assurance Corporation FGIC --Financial Guaranty Insurance Company FNMA --Federal National Mortgage Association FSA --Financial Security Assurance GO --General Obligation LOC --Letter of Credit MBIA --Municipal Bond Investors Assurance SPA --Standby Purchase Agreement
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 14 Investment Funds - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES (Unaudited)
JUNE 30, 2002 NY TAX FREE TAX FREE MONEY MONEY FUND FUND ------------ ------------ ASSETS Investments at amortized cost ..................................................$118,075,653 $158,747,904 Cash ........................................................................... 292,829 -- Receivable for securities sold ................................................. 171,033 700,297 Receivable for Fund shares sold ................................................ 1,014,386 3,766,896 Interest receivable ............................................................ 88,592 256,933 Prepaid expenses and other ..................................................... 3,359 6,952 ------------ ------------ Total assets ...................................................................... 119,645,852 163,478,982 ------------ ------------ LIABILITIES Payable for securities purchased ............................................... 3,028,470 3,240,522 Payable for capital shares redeemed ............................................ 5,389,934 8,623,606 Due to advisor ................................................................. 7,440 12,359 Dividend payable ............................................................... 52,835 83,879 Accrued expenses and other ..................................................... 90,880 112,966 ------------ ------------ Total liabilities ................................................................. 8,569,559 12,073,332 ------------ ------------ NET ASSETS ........................................................................$111,076,293 $151,405,650 ============ ============ COMPOSITION OF NET ASSETS Paid-in capital ................................................................$111,063,726 $151,429,731 Accumulated net realized gain (loss) from investment transactions .............. 12,567 (24,081) ------------ ------------ NET ASSETS ........................................................................$111,076,293 $151,405,650 ============ ============ SHARES OUTSTANDING ($0.001 par value per share, unlimited number of shares authorized) ......................................... 111,088,054 151,428,451 ============ ============ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (net assets divided by shares outstanding) .....................................$ 1.00 $ 1.00 ============ ============
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 15 Investment Funds - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS (Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30, 2002 NY TAX FREE TAX FREE MONEY MONEY FUND FUND ------------ ------------ INVESTMENT INCOME Interest income .............................................................. $778,547 $1,226,514 -------- ---------- Total investment income ........................................................... 778,547 1,226,514 -------- ---------- EXPENSES Administration and services fees ............................................... 339,847 498,474 Advisory fees .................................................................. 84,133 123,596 Professional fees .............................................................. 19,887 19,732 Trustees fees .................................................................. 5,445 5,457 Printing and shareholder reports ............................................... 7,140 6,597 Registration fees .............................................................. 1,623 5,567 Miscellaneous .................................................................. 1,416 1,108 -------- ---------- Total expenses .................................................................... 459,491 660,531 Less: fee waivers and/or expense reimbursements ................................... (38,830) (42,553) -------- ---------- Net expenses ...................................................................... 420,661 617,978 -------- ---------- NET INVESTMENT INCOME ............................................................. 357,886 608,536 -------- ---------- REALIZED GAIN ON INVESTMENTS: Net realized gain from investment transactions ................................. 23,104 5,782 -------- ---------- NET INCREASE IN NET ASSETS FROM OPERATIONS ........................................ $380,990 $ 614,318 ======== ==========
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 16 Investment Funds - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE YEAR ENDED FOR THE SIX MONTHS FOR THE YEAR ENDED ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, 2002 1 2001 2 2002 1 2001 2 NY TAX-FREE MONEY FUND TAX-FREE MONEY FUND ---------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS FROM: OPERATIONS Net investment income .............$ 357,886 $ 2,172,413 $ 608,536 $ 3,558,341 Net realized gain (loss) from investment transactions ......... 23,104 3,942 5,782 37,481 ------------- ------------- ------------- --------------- Net increase in net assets from operations ................... 380,990 2,176,355 614,318 3,595,822 ------------- ------------- ------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income ............. (358,080) (2,172,562) (604,238) (3,558,490) ------------- ------------- ------------- --------------- CAPITAL SHARE TRANSACTIONS (at net asset value of $1.00 per share) Proceeds from sales of shares ....................... 227,668,738 427,165,533 524,106,127 980,860,365 Dividend reinvestments ............ 91,099 712,631 54,722 872,664 Cost of shares redeemed ........... (226,445,361) (404,631,886) (536,388,302) (1,040,599,985) ------------- ------------- ------------- --------------- Net increase (decrease) in net assets from capital share transactions ...................... 1,314,476 23,246,278 (12,227,453) (58,866,956) ------------- ------------- ------------- --------------- TOTAL INCREASE (DECREASE) IN NET ASSETS ..................... 1,337,386 23,250,071 (12,217,373) (58,829,624) NET ASSETS Beginning of period ............... 109,738,907 86,488,836 163,623,023 222,452,647 ------------- ------------- ------------- --------------- End of period .....................$ 111,076,293 $ 109,738,907 $ 151,405,650 $ 163,623,023 ============= ============= ============= =============== - -------------------------------------------------------------------------------------------------------------------- 1 Unaudited. 2 The Statements of Changes in Net Assets for the year ended December 31, 2001 includes the Funds' information as stand-alone and feeder funds (see Note 1 in the Notes to Financial Statements).
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 17 Investment Funds - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
NY TAX FOR THE SIX FREE MONEY MONTHS ENDED FUND JUNE 30, FOR THE YEARS ENDED DECEMBER 31, 2002 1 2001 2 2000 2 1999 2 1998 2 1997 2 PER SHARE OPERATING PERFORMANCE: NET ASSET VALUE, BEGINNING OF PERIOD ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------ ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS Net investment income ............. 0.00 3 0.02 0.03 0.02 0.03 0.03 Net realized gain (loss) from investment transactions ......... 0.00 3 0.00 3 (0.00) 3 0.00 3 (0.00) 3 (0.00) 3 ------ ------ ------ ------ ------ ------ Total from investment operations ........................ 0.00 0.02 0.03 0.02 0.03 0.03 ------ ------ ------ ------ ------ ------ DISTRIBUTIONS TO SHAREHOLDERS Net investment income ............. (0.00) 3 (0.02) (0.03) (0.02) (0.03) (0.03) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ====== ====== ====== ====== ====== ====== TOTAL INVESTMENT RETURN .............. 0.32% 1.89% 3.23% 2.41% 2.66% 2.86% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (000s omitted) .................. $111,076 $109,739 $86,489 $73,867 $77,839 $85,364 Ratios to average net assets: Net investment income ........... 0.64% 4 1.86% 3.19% 2.37% 2.63% 2.83% Expenses after waivers and/or reimbursements, including expenses of the NY Tax Free Money Portfolio ......... 0.75% 4 0.75% 0.75% 0.75% 0.75% 0.75% Expenses before waivers and/or reimbursements, including expenses of the NY Tax Free Money Portfolio .................... 0.82% 4 0.80% 0.86% 0.84% 0.85% 0.81% - ---------------------------------------------------------------------------------------------------------------------- 1 Unaudited. 2 The Financial Highlights prior to April 27, 2001 include the Funds' information as feeder funds for the respective periods (see Note 1 in the Notes to Financial Statements). 3 Less than $.005 per share. 4 Annualized.
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 18 Investment Funds - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
TAX FREE FOR THE SIX MONEY MONTHS ENDED FUND JUNE 30, FOR THE YEARS ENDED DECEMBER 31, 2002 1 2001 2 2000 2 1999 2 1998 2 1997 2 PER SHARE OPERATING PERFORMANCE: NET ASSET VALUE, BEGINNING OF PERIOD ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------ ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS Net investment income ............. 0.00 3 0.02 0.03 0.02 0.03 0.03 Net realized gain (loss) from investment transactions ......... (0.00) 3 0.00 3 (0.00) 3 (0.00) 3 0.00 3 (0.00) 3 ------ ------ ------ ------ ------ ------ Total from investment operations ........................ (0.00) 0.02 0.03 0.02 0.03 0.03 ------ ------ ------ ------ ------ ------ DISTRIBUTIONS TO SHAREHOLDERS Net investment income ............. 0.00 3 (0.02) (0.03) (0.02) (0.03) (0.03) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ====== ====== ====== ====== ====== ====== TOTAL INVESTMENT RETURN .............. 0.37% 2.08% 3.35% 2.54% 2.75% 2.94% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (000s omitted) .................. $151,406 $163,623 $222,453 $128,480 $201,094 $150,483 Ratios to average net assets: Net investment income ........... 0.74% 4 2.11% 3.30% 2.50% 2.71% 2.90% Expenses after waivers and/or reimbursements, including expenses of the Tax Free Money Portfolio .................... 0.75% 4 0.75% 0.75% 0.75% 0.75% 0.75% Expenses before waivers and/or reimbursements, including expenses of the Tax Free Money Portfolio .................... 0.80% 4 0.79% 0.82% 0.80% 0.83% 0.80% - ---------------------------------------------------------------------------------------------------------------------- 1 Unaudited. 2 The Financial Highlights prior to April 27, 2001 include the Funds' information as feeder funds for the respective periods (see Note 1 in the Notes to Financial Statements). 3 Less than $.005 per share. 4 Annualized.
See Notes to Financial Statements. - -------------------------------------------------------------------------------- 19 Investment Funds - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1--ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES A. ORGANIZATION BT Investment Funds (the 'Trust') is registered under the Investment Company Act of 1940 (the 'Act'), as amended, as a diversified, open-end management investment company. The Trust is organized as a business trust under the laws of the Commonwealth of Massachusetts. NY Tax Free Money Fund Investment and Tax Free Money Fund Investment (each a 'Fund', and collectively, the 'Funds') are two of the funds the Trust offers to investors. New York Tax Free Money Fund Investment seeks a high level of current income exempt from Federal and New York income tax consistent with liquidity and the preservation of capital by investing primarily in high quality, short-term, tax-exempt money market instruments. Tax Free Money Fund Investment seeks a high level of current income exempt from Federal income tax consistent with liquidity and the preservation of capital by investing primarily in high quality, short-term, tax-exempt money market instruments. Details concerning each Fund's investment objective and policies and the risk factors associated with each Fund's investments are described in the Prospectus and Statement of Additional Information. On March 26, 2001, the Board of Trustees approved the dissolution of the NY Tax Free Money Portfolio and the Tax Free Money Portfolio (the 'Portfolios'). Until April 27, 2001, NY Tax Free Money Fund Investment and Tax Free Money Fund Investment invested all of their investable assets in the NY Tax Free Money Portfolio and the Tax Free Money Portfolio (each a 'Portfolio', collectively, the 'Portfolios'), respectively. Each Portfolio had the same investment objective and policies as its corresponding Fund. The Portfolios were organized as New York Trusts and registered as investment companies under the Act. On April 27, 2001, NY Tax Free Money Fund Investment and Tax Free Money Fund Investment withdrew their assets in-kind from their respective Portfolios and began operations as stand-alone funds. B. VALUATION OF SECURITIES The Funds value their investments at amortized cost. C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME Securities transactions are recorded on trade date. Realized gains and losses are determined by comparing the proceeds of a sale or the cost of a purchase with a specific offsetting transaction. Interest income, including amortization of premiums and accretion of discounts, is accrued daily. Estimated expenses are also accrued daily. D. DISTRIBUTIONS Each Fund distributes all of its net investment income in the form of dividends, which are declared and recorded daily. Accumulated daily dividends are distributed to shareholders monthly. E. FEDERAL INCOME TAXES It is each Fund's policy to continue to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable income to shareholders. Therefore, no federal income taxes have been accrued. F. REPURCHASE AGREEMENTS Each Fund may make short term investments in repurchase agreements that are fully collateralized by US government securities. Under the terms of a repurchase agreement, a financial institution sells fixed income securities to the Fund and agrees to buy them back on a specified day in return for the principal amount of the original sale plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Fund has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Fund's claims on the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- 20 Investment Funds - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (Unaudited) G. ESTIMATES In preparing its financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions. Actual results may be different. NOTE 2--FEES AND TRANSACTIONS WITH AFFILIATES Deutsche Asset Management, Inc., an indirect, wholly owned subsidiary of Deutsche Bank AG, is the Advisor for each of the Funds. Each Fund pays the Advisor an annual fee based on its average daily net assets which is calculated daily and paid monthly at the annual rate of 0.15%. Investment Company Capital Corp. (ICCC), an indirect, wholly owned subsidiary of Deutsche Bank AG, is each Fund's Administrator. Each Fund pays the Administrator an annual fee based on its average daily net assets which is calculated daily and paid monthly at the annual rate of 0.60%. The Advisor and Administrator have contractually agreed to waive their fees and/or reimburse expenses of each Fund through April 30, 2003, to the extent necessary, to limit all expenses to 0.75% of the average daily net assets of each Fund. Certain officers and directors of the Funds are also officers or directors of ICCC or affiliated with Deutsche Bank AG. These persons are not paid by the Funds for serving in these capacities. NOTE 3--LINE OF CREDIT AGREEMENT Each Fund participates with other affiliated entities in an unsecured revolving credit facility with a syndicate of banks in the amount of $200,000,000, which expires April 25, 2003. A commitment fee is apportioned among the participants based on their relative net assets. Neither Fund borrowed during the period. NOTE 4--FEDERAL INCOME TAXES Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments for dividends payable. Distributions during the year ended December 31, 2001 were characterized as follows for tax purposes: New York Tax Free Money--Investment Tax exempt income $2,172,562 Tax Free Money--Investment Tax exempt income $3,558,490 At December 31, 2001, the components of distributable earnings on a tax basis were as follows: New York Tax Free Money--Investment Capital loss carryovers $(10,537) Tax Free Money--Investment Capital loss carryovers $(29,863) At December 31, 2001, the New York Tax Free Money Fund--Investment had capital loss carryovers available as a reduction against future net realized capital gains that consisted of $10,537, of which $618 expires in 2003, $2,716 expires in 2004, $1,774 expires in 2005, $472 expires in 2006, and $4,957 expires in 2008. At December 31, 2001, the Tax Free Money Fund--Investment had capital loss carryovers available as a reduction against future net realized capital gains that consisted of $29,863, of which $5,981 expires in 2004, $5,713 expires in 2005, $5,453 expires in 2007, and $12,716 expires in 2008. - -------------------------------------------------------------------------------- 21 Investment Funds - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 5--SUBSEQUENT EVENTS Proxy Results (unaudited). At the Special Shareholder Meeting on July 30, 2002, shareholders of the Trust voted on and approved the following proposal. A description of the proposal and number of shares voted are as follows: 1. To elect the BT Investment Funds Board of Trustees. Shares Shares voted Nominees voted 'For' 'Withheld' - --------- ----------- ---------- Richard R. Burt 465,963,551 1,046,063 S. Leland Dill 465,954,900 1,054,714 Martin J. Gruber 465,999,953 1,009,661 Richard T. Hale 465,990,987 1,018,627 Joseph R. Hardiman 466,003,149 1,006,465 Richard J. Herring 466,000,789 1,008,825 Graham E. Jones 465,936,258 1,073,356 Rebecca W. Rimel 466,001,659 1,007,955 Philip Saunders, Jr. 465,956,049 1,053,565 William N. Searcy 465,956,053 1,053,562 Robert H. Wadsworth 466,000,832 1,008,782 2. To approve a new investment advisory agreement between the Funds and Deutsche Asset Management, Inc. Shares Shares Shares voted voted voted Funds 'For' 'Against' 'Abstain' - --------- ---------- --------- --------- Tax Free Fund 95,124,787 239,492 144,689 NY Tax Free Fund 72,652,406 223,228 107,434 - -------------------------------------------------------------------------------- 22 PRIVACY STATEMENT This privacy statement is issued by the Deutsche Asset Management mutual funds, Scudder Financial Services, Inc., Scudder Investor Services, Inc., Scudder Trust Company and Scudder Distributors, Inc. We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients' information. We never sell customer lists or individual client information. Internal policies are in place to protect confidentiality, while allowing client needs to be served. Only individuals who need to do so in carrying out their job responsibilities may access client information. We maintain physical, electronic and procedural safeguards that comply with federal standards to protect confidentiality. These safeguards extend to all forms of interaction with us, including the Internet. In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our websites, and through transactions with us or our affiliates. To be able to serve our clients, information is shared with affiliates and other companies. Specifically, we disclose client information to parties that perform various services for us, such as transfer agents, custodians, and broker-dealers. Limited information also may be shared with affiliates, with companies with which we have joint marketing agreements, or with other parties as required by law. Any organization receiving client information may only use it for the purpose designated by the entities listed above. If you have questions about our privacy policy, please contact us at (800) 730-1313, or write to: Deutsche Asset Management Attention: Correspondence P.O. Box 219415 Kansas City, MO 64121-9415 July 2002 For information on how to invest, shareholder account information and current price and yield information, please contact your relationship manager or write to: DEUTSCHE ASSET MANAGEMENT SERVICE CENTER PO BOX 219210 KANSAS CITY, MO 64121-9210 or call toll-free: 1-800-730-1313 This report must be preceded or accompanied by a current prospectus for the Funds. Deutsche Asset Management is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Bank Securities Inc., Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Investment Management Americas Inc. and Scudder Trust Company. NY Tax Free Money Fund Investment CUSIP #055922207 Tax Free Money Fund Investment CUSIP #055922306 NYTMFREESA (6/02) Printed 8/02 Distributed by: ICC Distributors, Inc. -----END PRIVACY-ENHANCED MESSAGE-----