As filed with the Securities and Exchange Commission on December 2, 2003
Investment Company Act file number 811-8312
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Institutional Daily Income Fund
(Exact name of registrant as specified in charter)
600 Fifth Avenue
New York, NY 10020
(Address of principal executive offices) (Zip code)
Rosanne Holtzer
c/o Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-830-5200
Date of fiscal year end: March 31st
----------
Date of reporting period: September 30, 2003
Item 1: Report to Stockholders
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INSTITUTIONAL 600 Fifth Avenue, New York, NY 10020
DAILY INCOME FUND 212-830-5200
================================================================================
Dear Shareholder,
We are pleased to present the semi-annual report of Institutional Daily Income
Fund for the period April 1, 2003 through September 30, 2003.
The Fund's Money Market Portfolio had 493 shareholders and net assets of
$385,831,087 as of September 30, 2003. The U.S. Treasury Portfolio had 178
shareholders and net assets of $644,300,523 as of September 30, 2003.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
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INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2003
(UNAUDITED)
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Commercial Paper (17.09%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 15,000,000 HBOS Treasury Services 11/21/03 1.08% $ 14,977,156
15,000,000 Long Lane Master Trust IV - Series A (a) 10/20/03 1.07 14,991,529
20,000,000 Sigma Finance Corporation 11/18/03 1.07 19,971,467
15,000,000 Special Purpose Accounts Receivable 10/10/03 1.07 14,995,988
1,000,000 Tennessee School Board Authority 10/08/03 1.05 1,000,000
- -------------- --------------
66,000,000 Total Commercial Paper 65,936,140
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Domestic Certificate of Deposit (2.59%)
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$ 10,000,000 Harris Trust & Savings Bank 03/01/04 1.33% $ 9,999,793
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10,000,000 Total Domestic Certificate of Deposit 9,999,793
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Floating Rate Securities (20.57%)
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$ 10,000,000 Abbey National PLC (b) 03/08/04 1.30% $ 9,999,568
5,000,000 Caterpillar Financial Services Company (c) 07/09/04 1.21 5,000,000
7,885,000 CFM International Inc. (d)
LOC General Electric Company 01/01/10 1.17 7,885,000
15,000,000 Credit Agricole (e) 01/16/04 1.30 14,999,890
15,000,000 Equitable Life Assurance Society with J.P. Morgan Chase (f) 03/22/04 1.16 15,000,000
2,500,000 Erie County, NY IDA RB
(Niagara-Maryland L.L.C. Project) - Series 2003 (g)
LOC Manufacturers and Traders Bank & Trust Company 06/01/23 1.31 2,500,000
10,000,000 Rabobank Nederland (h) 01/22/04 1.04 10,000,000
10,000,000 Royal Bank of Canada (h) 01/28/04 1.04 10,000,000
4,000,000 The Goldman Sachs Group, L.P. (i) 10/12/04 1.36 4,000,000
- -------------- --------------
79,385,000 Total Floating Rate Securities 79,384,458
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Foreign Commercial Paper (7.76%)
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$ 15,000,000 Alliance & Leicester PLC 01/07/04 1.03% $ 14,957,942
5,000,000 Banco Bilbao Vizcaya Argentaria S.A. 10/22/03 1.06 4,996,908
10,000,000 Banco Bilbao Vizcaya Argentaria S.A. 10/30/03 1.10 9,991,139
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30,000,000 Total Foreign Commercial Paper 29,945,989
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Letter of Credit Commercial Paper (9.03%)
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$ 10,000,000 Banco Bradesco S.A.
LOC Banco Santander 11/13/03 1.10% $ 9,986,861
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The acompanying notes are an integral part of these financial statements.
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================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Letter of Credit Commercial Paper (Continued)
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<s> <c> <c> <c> <c>
$ 15,000,000 Banco Cuscatlan S.A.
LOC ING Bank NV 04/05/04 1.08% $ 14,915,850
10,000,000 Banco Rio de La Plata S.A.
LOC Banco Santander 03/18/04 0.98 9,954,464
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35,000,000 Total Letter of Credit Commercial Paper 34,857,175
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Other Notes (2.05%)
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$ 5,000,000 State of Mississippi Taxable GO
(Mississippi Major Economic Impact) 12/01/03 1.62% $ 5,000,035
2,900,000 State of New York GO - Series 2000C
LOC Dexia CLF 08/05/04 1.40 2,900,000
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7,900,000 Total Other Notes 7,900,035
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Repurchase Agreement (14.26%)
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$ 55,000,000 J.P. Morgan Securities, Inc., Repurchase proceeds at maturity
$55,001,528 (Collateralized by $65,470,355, GNMA,
5.000% to 7.500%, due 07/15/07 to 06/15/38, value $56,102,275) 10/01/03 1.00% $ 55,000,000
- -------------- --------------
55,000,000 Total Repurchase Agreement 55,000,000
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U.S. Government Agency Discount Note (2.58%)
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$ 10,000,000 Federal National Mortgage Association 02/18/04 1.12% $ 9,956,833
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10,000,000 Total U.S. Government Agency Discount Note 9,956,833
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Variable Rate Demand Instruments (17.28%)
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$ 2,145,000 American Micro Products (j)
LOC Firstar Bank 10/01/08 1.18% $ 2,145,000
1,950,000 Atlas Metal Investment Corporation (j)
LOC Fifth Third Bank 10/01/20 1.15 1,950,000
815,000 Austin Printing Co. & Klein Austin (j)
LOC Bank One 08/01/14 1.20 815,000
975,000 Automated Packaging Systems (j)
LOC National City Bank of Michigan/Illinois 10/01/08 1.21 975,000
1,045,000 Big Brothers Big Sisters (j)
LOC Fifth Third Bank 12/01/20 1.15 1,045,000
3,750,000 Briarwood Investments, L.L.C. (j)
Collateralized by Federal Home Loan Bank 04/01/23 1.18 3,750,000
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The acompanying notes are an integral part of these financial statements.
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INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 2003
(UNAUDITED)
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 465,000 City of Colorado Springs (Goodwill Industries) - Series 1997B (j)
LOC Bank One 02/01/07 1.19% $ 465,000
1,700,000 CJ Krehbiel Co. (j)
LOC Fifth Third Bank 10/01/10 1.15 1,700,000
2,865,000 D.E.D.E. Realty (j)
LOC Fifth Third Bank 12/01/11 1.15 2,865,000
2,435,000 Delta Capital L.L.C. - Series 1996B (j)
LOC Huntington National Bank 10/01/26 1.35 2,435,000
1,385,000 Dickenson Press, Inc. - Series 1997 (j)
LOC Huntington National Bank 01/01/27 1.35 1,385,000
1,365,000 First Metropolitan Title Company (j)
LOC LaSalle National Bank 05/01/24 1.35 1,365,000
1,790,000 Frank J. Catanzaro Sons and Daughters (j)
LOC Firstar Bank 01/01/15 1.18 1,790,000
2,995,000 Governor's Village L.L.C. (j)
LOC Fifth Third Bank 03/01/20 1.15 2,995,000
4,085,000 Hunter's Square, Inc. Project - Series 1998 (j)
LOC National City Bank of Michigan/Illinois 10/01/16 1.20 4,085,000
3,300,000 JPV Capital L.L.C. (j)
LOC ABN AMRO Bank N.A. 12/01/39 1.19 3,300,000
575,000 JRB Corporation Demand Note (j)
LOC Fifth Third Bank 07/01/26 1.35 575,000
1,900,000 Kissel Holdings L.L.C. (j)
LOC Firstar Bank 12/01/20 1.18 1,900,000
790,000 Labelle Capital Funding - Series A (j)
LOC National City Bank of Michigan/Illinois 09/01/26 1.30 790,000
2,000,000 Lauren Company, L.L.C. - Series 2003 (j)
LOC Wells Fargo Bank, N.A. 07/01/33 1.25 2,000,000
570,000 LRV Enterprises, L.L.C. (j)
LOC First of America 09/01/21 1.20 570,000
1,800,000 Mayfair Village Retirement Center, Inc., KY - Series 1995 (j)
LOC PNC Bank, N.A. 05/15/09 1.17 1,800,000
3,855,000 Michigan State Strategic Fund (Detroit Symphony) - Series B (k)
LOC ABN AMRO Bank N.A. 06/01/31 1.20 3,855,000
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The acompanying notes are an integral part of these financial statements.
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================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Variable Rate Demand Instruments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 830,000 Mississippi Business Finance Corporation IDRB
(Abtco, Inc. Project) - Series 1997B (j)
LOC Bank One 06/01/10 1.15% $ 830,000
3,650,000 Mississippi Business Finance Corporation IDRB
(Abtco, Inc. Project) - Series 1997B (j)
LOC First Union National Bank 04/01/22 1.19 3,650,000
2,755,000 Mount Caramel West Medical Office Building (j)
LOC National City Bank of Michigan/Illinois 08/01/19 1.20 2,755,000
1,800,000 Pennsylvania EDFA Taxable Development RB
(West 914 Incorporation Project) - Series 1991A (j)
LOC PNC Bank, N.A. 05/01/21 1.17 1,800,000
1,120,000 Shepherd Capital, L.L.C. (j)
LOC First of America 09/15/47 1.24 1,120,000
3,225,000 St. Ann's Medical Office Building (j)
LOC National City Bank of Michigan/Illinois 11/01/19 1.20 3,225,000
1,740,000 Trendway Corporation (j)
LOC ABN AMRO Bank N.A. 12/01/26 1.35 1,740,000
4,572,000 Washington State HFC (k)
LOC Wells Fargo Bank, N.A. 01/01/30 1.18 4,572,000
2,405,000 Wholesome Group (j)
LOC Fifth Third Bank 10/01/20 1.15 2,405,000
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66,652,000 Total Variable Rate Demand Instruments 66,652,000
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Yankee Certificates of Deposit (6.48%)
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$ 5,000,000 Abbey National PLC 10/21/03 1.90% $ 5,000,027
10,000,000 Toronto Dominion 11/12/03 1.51 10,000,000
5,000,000 Toronto Dominion 11/25/03 1.59 5,000,000
5,000,000 Union Bank of Switzerland 03/15/04 1.11 4,999,718
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25,000,000 Total Yankee Certificates of Deposit 24,999,745
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Total Investments (99.69%) (Cost $384,632,168+) 384,632,168
Cash and other assets, net of liabilities (0.31%) 1,198,919
--------------
Net Assets (100.00%) $ 385,831,087
==============
Net Asset Value, offering and redemption price per share:
Class A Shares, 96,377,534 shares outstanding (Note 3) $ 1.00
==============
Class B Shares, 162,568,727 shares outstanding (Note 3) $ 1.00
==============
Pinnacle Shares, 126,885,067 shares outstanding (Note 3) $ 1.00
==============
<FN>
+ Aggregate cost for federal income tax purposes is identical.
</FN>
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The acompanying notes are an integral part of these financial statements.
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INSTITUTIONAL DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 2003
(UNAUDITED)
================================================================================
FOOTNOTES:
(a) Guaranteed by Fleet Bank through Swap agreement.
(b) The interest rate is adjusted daily based upon Prime minus 2.96%.
(c) The interest rate is adjusted quarterly based upon three month LIBOR plus
0.10%.
(d) The interest rate is adjusted weekly based upon average of prior week one
month LIBOR plus 0.05%; weekly put at par.
(e) The interest rate is adjusted daily based upon Prime minus 2.9525%.
(f) The interest rate is adjusted monthly based upon one month LIBOR plus
0.04%.
(g) Securities payable on demand at par including accrued interest (with seven
days notice). Interest rate is adjusted weekly based upon one month LIBOR
plus 0.25%.
(h) The interest rate is adjusted daily based upon Prime minus 2.9575%.
(i) The interest rate is adjusted quarterly based upon three month LIBOR plus
0.25%.
(j) Securities payable on demand at par including accrued interest (with seven
days notice). Interest rate is adjusted weekly.
(k) Securities payable on demand at par including accrued interest (with one
day notice). Interest rate is adjusted daily.
KEY:
EDFA = Economic Development Finance Authority IDA = Industrial Development Authority
GNMA = Government National Mortgage Association IDRB = Industrial Development Revenue Bond
GO = General Obligation LOC = Letter of Credit
HFC = Housing Finance Commission RB = Revenue Bond
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The acompanying notes are an integral part of these financial statements.
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INSTITUTIONAL DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2003
(UNAUDITED)
================================================================================
Face Maturity Value
Amount Date Yield (Note 1)
------ ---- ----- ------
Repurchase Agreements, Overnight (48.73%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 90,000,000 Bank of America, Repurchase proceeds at maturity $90,002,350
(Collateralized by $92,126,000, U.S. Treasury Bills, 0.000%,
due 10/02/03 to 03/25/04, value $91,800,533) 10/01/03 0.94% $ 90,000,000
55,000,000 Bear, Stearns & Co., Repurchase proceeds at maturity $55,001,665
(Collateralized by $83,380,075, GNMA, 4.500% to 7.500%,
due 07/15/17 to 09/15/33, value $56,100,512) 10/01/03 1.09 55,000,000
79,000,000 J.P. Morgan Securities, Inc., Repurchase proceeds at maturity
$79,002,085 (Collateralized by $79,050,000, U.S. Treasury Notes,
3.250% to 4.250%, due 05/31/04 to 08/15/13, value $80,584,051) 10/01/03 0.95 79,000,000
90,000,000 UBS Paine Webber, Repurchase proceeds at maturity $90,002,375
(Collateralized by $71,150,000, U.S. Treasury Bond, 7.250%,
due 05/15/16, value $91,806,093) 10/01/03 0.95 90,000,000
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314,000,000 Total Repurchase Agreements 314,000,000
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U.S. Government Obligations (50.72%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 145,000,000 U.S. Treasury Bills 10/02/03 0.77% $ 144,996,898
25,000,000 U.S. Treasury Bills 02/19/04 1.03 24,900,125
20,000,000 U.S. Treasury Notes, 4.25% 11/15/03 1.76 20,059,988
35,000,000 U.S. Treasury Notes, 3.00% 01/31/04 1.28 35,192,265
25,000,000 U.S. Treasury Notes, 3.38% 04/30/04 1.26 25,301,038
25,000,000 U.S. Treasury Notes, 3.25% 05/31/04 1.18 25,337,774
40,000,000 U.S. Treasury Notes, 2.88% 06/30/04 1.01 40,547,942
10,000,000 U.S. Treasury Notes, 6.00% 08/15/04 1.07 10,424,805
- -------------- --------------
325,000,000 Total U.S. Government Obligations 326,760,835
- -------------- --------------
Total Investments (99.45%) (Cost $640,760,835+) 640,760,835
Cash and other assets, net of liabilities (0.55%) 3,539,688
--------------
Net Assets (100.00%) $ 644,300,523
==============
Net Asset Value, offering and redemption price per share:
Class A Shares, 202,646,471 shares outstanding (Note 3) $ 1.00
==============
Class B Shares, 412,649,879 shares outstanding (Note 3) $ 1.00
==============
Pinnacle Shares, 29,004,173 shares outstanding (Note 3) $ 1.00
==============
<FN>
+ Aggregate cost for federal income tax purposes is identical.
KEY:
GNMA = Government National Mortgage Association
</FN>
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The acompanying notes are an integral part of these financial statements.
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INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)
================================================================================
Money Market U.S. Treasury
Portfolio Portfolio
------------------ -----------------
INVESTMENT INCOME
Income:
Interest................................................... $ 2,339,555 $ 4,711,988
------------------ -----------------
Expenses: (Note 2)
Investment management fee.................................. 226,355 484,695
Administration fee......................................... 94,315 201,956
Shareholder servicing fee (Class A shares)................. 127,623 298,121
Custodian expenses......................................... 11,587 28,574
Shareholder servicing and related shareholder expenses+.... 27,278 94,134
Legal, compliance and filing fees.......................... 60,227 64,993
Audit and accounting....................................... 66,363 80,794
Trustees' fees ............................................ 7,843 6,343
Other...................................................... 8,025 14,509
------------------ -----------------
Total expenses......................................... 629,616 1,274,119
Less: Fees waived (Note 2)............................. ( 113,178) ( 161,565)
Expense paid indirectly (Note 2)................. ( 1,347) ( 6,608)
------------------ -----------------
Net expenses........................................... 515,091 1,105,946
------------------ -----------------
Net investment income.......................................... 1,824,464 3,606,042
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments........................ ( 241) 632
------------------ -----------------
Increase in net assets from operations......................... $ 1,824,223 $ 3,606,674
================== =================
<FN>
+ Includes class specific transfer agency expenses of $10,197 for Money
Market Portfolio Class A Shares and $23,813, $53,938 and $2,938 for U.S.
Treasury Portfolio Class A, Class B and Pinnacle Shares, respectively.
</FN>
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The acompanying notes are an integral part of these financial statements.
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INSTITUTIONAL DAILY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
Money Market Portfolio U.S. Treasury Portfolio
------------------------------------ ------------------------------------
Six Months Ended Year Six Months Ended Year
September 30, 2003 Ended September 30, 2003 Ended
(Unaudited) March 31, 2003 (Unaudited) March 31, 2003
--------- -------------- --------- --------------
INCREASE (DECREASE)
IN NET ASSETS
Operations:
Net investment income................... $ 1,824,464 $ 5,538,384 $ 3,606,042 $ 7,945,380
Net realized (loss) gain on investments. ( 241) 5,746 632 -0-
------------- -------------- -------------- --------------
Increase in net assets from operations.. 1,824,223 5,544,130 3,606,674 7,945,380
Dividends to shareholders:
Net investment income
Class A shares........................ ( 392,539) ( 1,204,233) ( 871,829) ( 3,441,338)
Class B shares........................ ( 803,071) ( 2,147,197) ( 2,591,848) ( 4,151,292)
Pinnacle shares....................... ( 628,854) ( 2,186,954) ( 142,365) ( 352,750)
Net realized gain on investments
Class A shares........................ -0- ( 1,151) ( 196) -0-
Class B shares........................ -0- ( 2,047) ( 414) -0-
Pinnacle shares....................... -0- ( 2,090) ( 22) -0-
Fund share transactions (Note 3):
Class A shares........................ ( 17,959,867) 46,877,884 ( 73,527,683) 22,225,808
Class B shares........................ 29,731,861 9,569,912 28,973,306 34,975,821
Pinnacle shares....................... ( 3,249,443) ( 23,047,632) 3,477,754 7,655,457
------------- -------------- -------------- --------------
Total increase (decrease)............. 8,522,310 33,400,622 ( 41,076,623) 64,857,086
Net assets:
Beginning of period................... 377,308,777 343,908,155 685,377,146 620,520,060
------------- -------------- -------------- --------------
End of period......................... $ 385,831,087 $ 377,308,777 $ 644,300,523 $ 685,377,146
============= ============== ============== ==============
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The acompanying notes are an integral part of these financial statements.
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INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
1. Summary of Accounting Policies.
Institutional Daily Income Fund (the Fund) is a no-load, diversified, open-end
management investment company registered under the Investment Company Act of
1940. The Fund offers investors three managed portfolios of money market
instruments: U.S. Treasury Portfolio, Money Market Portfolio and Municipal
Portfolio. Presently only the Money Market Portfolio and U.S. Treasury Portfolio
have been activated. Each Portfolio has three classes of stock authorized, Class
A, Class B and Pinnacle shares. The Class A shares of each Portfolio are subject
to a service fee pursuant to each Portfolio's distribution and service plan. The
Class B and Pinnacle shares are not subject to a service fee. Additionally, each
Portfolio may allocate among its classes certain expenses, to the extent
allowable to specific classes, including transfer agent fees, government
registration fees, certain printing and postage costs, and administrative and
legal expenses. Class specific expenses of the Fund were limited to shareholder
servicing fees and transfer agent expenses. In all other respects, all share
classes represent the same interest in the income and assets of each respective
Portfolio. The distribution of the Pinnacle shares commenced on July 29, 1999.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America for investment
companies as follows.
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument.
b) Federal Income Taxes -
It is the policy of each Portfolio to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (including net realized short-term capital
gains) are declared daily, paid monthly and taxable as ordinary income.
Capital gains distributions if any, will be made at least annually and in
no event later than sixty days after the end of the Fund's fiscal year.
d) Use of Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
e) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis. It is the Fund's
policy to take possession of securities as collateral under repurchase
agreements and to determine on a daily basis that the value of such
securities are sufficient to cover the value of the repurchase agreements.
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- --------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, each Portfolio pays an investment
management fee to Reich & Tang Asset Management, LLC (the Manager) at the annual
rate of .12% of the Portfolio's average daily net assets.
Pursuant to an Administrative Services Contract each Portfolio pays to the
Manager an annual fee of .05% of the Portfolio's average daily net assets.
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors, Inc.
(the Distributor) have entered into a Distribution Agreement and a Shareholder
Servicing Agreement (with respect to the Class A shares of the Fund only). For
its services under the Shareholder Servicing Agreement, the Distributor receives
from each Portfolio a service fee equal to .25% per annum of each Portfolio's
average daily net assets with respect only to the Class A shares.
During the period ended September 30, 2003, the Manager voluntarily waived
investment management fees of $75,452 for the Money Market Portfolio.
During the period ended September 30, 2003, the Manager voluntarily waived
administration fees of $37,726 and $161,565 for the Money Market Portfolio and
the U.S. Treasury Portfolio, respectively.
Fees are paid to Trustees who are unaffiliated with the Manager on the basis of
$5,000 per annum plus $1,000 per meeting attended.
Included in the statements of operations under the caption "Shareholder
servicing and related shareholder expenses" are fees of $10,207 and $80,722 for
the Money Market Portfolio and the U.S Treasury Portfolio, respectively, paid to
Reich & Tang Services, Inc., an affiliate of the Manager, as shareholder
servicing agent for the Fund. Also included under the same caption are expense
offsets of $1,347 and $899 for the Money Market Portfolio and the U.S. Treasury
Portfolio, respectively.
Included in the statement of operations under the caption "Custodian Expenses"
are expense offsets of $5,709 for the U.S. Treasury Portfolio.
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- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
3. Transactions in Shares of Beneficial Interest.
At September 30, 2003 an unlimited number of shares of beneficial interest were
authorized and capital paid in for the Money Market Portfolio and the U.S.
Treasury Portfolio amounted to $385,831,328 and $644,300,523, respectively.
Transactions in shares of beneficial interest, all at $1.00 per share, were as
follows:
Money Market Portfolio U.S. Treasury Portfolio
------------------------------------- -------------------------------------
Six Months Ended Six Months Ended
September 30, 2003 Year Ended September 30, 2003 Year Ended
Class A Shares (Unaudited) March 31, 2003 (Unaudited) March 31, 2003
- -------------- --------- -------------- --------- --------------
Sold................................ $ 754,232,500 $ 849,235,563 $ 430,888,186 $ 789,964,832
Issued on reinvestment of dividends. 386,810 1,186,423 347,332 1,348,489
Redeemed............................ ( 772,579,177) ( 803,544,102) ( 504,763,201) ( 769,087,513)
------------- ------------- ------------- -------------
Net (decrease) increase............. ( 17,959,867) 46,877,884 ( 73,527,683) 22,225,808
============== ============= ============== =============
Class B Shares
- --------------
Sold................................ $ 888,504,325 $ 787,809,778 $ 618,197,980 $ 808,280,872
Issued on reinvestment of dividends. 811,274 2,032,859 359,756 915,160
Redeemed............................ ( 859,583,738) ( 780,272,725) ( 589,584,430) ( 774,220,211)
------------- ------------- ------------- -------------
Net increase........................ 29,731,861 9,569,912 28,973,306 34,975,821
============== ============= ============= ==============
Pinnacle Shares
- ---------------
Sold................................ $ 53,763,552 $ 156,237,214 $ 26,845,550 $ 50,389,640
Issued on reinvestment of dividends. 628,821 2,188,836 142,381 352,720
Redeemed............................ ( 57,641,816) ( 181,473,682) ( 23,510,177) ( 43,086,903)
------------- ------------- ------------- -------------
Net (decrease) increase............. ( 3,249,443) ( 23,047,632) 3,477,754 7,655,457
============= ============== ============== =============
4. Tax Information
The tax character of all distributions paid by the Portfolios during the years
ended March 31, 2003 and 2002 were ordinary income.
At March 31, 2003, the Money Market Portfolio and U.S. Treasury Portfolio had
undistributed income of $22,796 and $233,720 respectively, for income tax
purposes included in dividend payable.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
4. Financial Highlights.
Money Market Portfolio
-------------------------------------------------------------------------------
Class A Shares Six Months Ended For the Year Ended March 31,
- -------------- September 30, 2003 ------------------------------------------------------------
(Unaudited) 2003 2002 2001 2000 1999
--------- --------- --------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the period)
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........................ 0.004 0.013 0.028 0.060 0.051 0.050
Less distributions:
Dividends from net investment income......... ( 0.004) ( 0.013) ( 0.028) ( 0.060) ( 0.051) ( 0.050)
------- ------- -------- ------- ------- -------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ======== ======== ========
Total Return.................................... 0.39%(a) 1.33% 2.85% 6.16% 5.17% 5.12%
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 96,377 $ 114,337 $ 67,459 $1,101,858 $ 764,608 $ 282,258
Ratios to average net assets:
Expenses(c) (net of fees waived) 0.47%(b) 0.47% 0.45% 0.45% 0.45% 0.45%
Net investment income........................ 0.77%(b) 1.32% 3.39% 5.96% 5.21% 4.93%
Management and administration fees waived.... 0.06%(b) 0.06% 0.02% 0.02% 0.03% 0.05%
Expenses paid indirectly..................... 0.00%(b) 0.00% 0.00% 0.00% 0.00% 0.00%
<FN>
(a) Not annualized
(b) Annualized
(c) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
4. Financial Highlights. (Continued)
Money Market Portfolio
-------------------------------------------------------------------------------
Class B Shares Six Months Ended For the Year Ended March 31,
- -------------- September 30, 2003 ------------------------------------------------------------
(Unaudited) 2003 2002 2001 2000 1999
--------- --------- --------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the period)
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........................ 0.005 0.016 0.031 0.062 0.053 0.053
Less distributions:
Dividends from net investment income......... ( 0.005) ( 0.016) ( 0.031) ( 0.062) ( 0.053) ( 0.053)
------- ------- ------- ------- ------- -------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ======== ======== ========
Total Return.................................... 0.52%(a) 1.61% 3.12% 6.42% 5.43% 5.38%
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 162,569 $ 132,837 $ 123,267 $ 211,725 $ 354,549 $ 221,119
Ratios to average net assets:
Expenses(c) (net of fees waived) 0.20%(b) 0.20% 0.20% 0.20% 0.20% 0.20%
Net investment income........................ 1.04%(b) 1.60% 3.15% 6.20% 5.36% 5.27%
Management and administration fees waived.... 0.06%(b) 0.06% 0.02% 0.02% 0.03% 0.05%
Expenses paid indirectly..................... 0.00%(b) 0.00% 0.00% 0.00% 0.00% 0.00%
<FN>
(a) Not annualized
(b) Annualized
(c) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
4. Financial Highlights. (Continued)
Money Market Portfolio
-------------------------------------------------------------------------------
Six Months Ended July 29,1999
Pinnacle Shares September 30, 2003 For the Year Ended March 31, (Commencement of Sales) to
- --------------- ------------------------------
(Unaudited) 2003 2002 2001 March 31, 2000
--------- -------- -------- -------- --------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income............... 0.005 0.016 0.031 0.062 0.038
Less distributions:
Dividends from net investment income ( 0.005) ( 0.016) ( 0.031) ( 0.062) ( 0.038)
------- ------- ------- ------- -------
Net asset value, end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.......................... 0.52%(a) 1.61% 3.12% 6.42% 3.80%(a)
Ratios/Supplemental Data
Net assets, end of period (000)....... $ 126,885 $ 130,135 $ 153,182 $ 128,777 $ 144,632
Ratios to average net assets:
Expenses(c) (net of fees waived).... 0.20%(b) 0.20% 0.20% 0.20% 0.20%(b)
Net investment income............... 1.04%(b) 1.60% 3.15% 6.20% 5.36%(b)
Management and administration fees waived 0.06%(b) 0.06% 0.02% 0.02% 0.03%(b)
Expenses paid indirectly............ 0.00%(b) 0.00% 0.00% 0.00% 0.00%(b)
<FN>
(a) Not annualized
(b) Annualized
(c) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
4. Financial Highlights. (Continued)
U.S. Treasury Portfolio
-------------------------------------------------------------------------------
Class A Shares Six Months Ended For the Year Ended March 31,
- -------------- September 30, 2003 ------------------------------------------------------------
(Unaudited) 2003 2002 2001 2000 1999
--------- --------- --------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the period)
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........................ 0.004 0.013 0.028 0.057 0.048 0.048
Less distributions:
Dividends from net investment income......... ( 0.004) ( 0.013) ( 0.028) ( 0.057) ( 0.048) ( 0.048)
------- ------- ------- ------- ------- -------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ======== ======== ========
Total Return.................................... 0.36%(a) 1.28% 2.86% 5.88% 4.82% 4.86%
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 202,647 $ 276,174 $ 253,948 $ 579,869 $ 658,396 $ 721,197
Ratios to average net assets:
Expenses(c) (net of fees waived)............. 0.45%(b) 0.45% 0.45% 0.46% 0.45% 0.45%
Net investment income........................ 0.73%(b) 1.28% 3.12% 5.68% 4.73% 4.71%
Management and administration fees waived.... 0.04%(b) 0.03% 0.02% 0.02% 0.02% 0.04%
Expenses paid indirectly..................... 0.00%(b) 0.00% 0.00% 0.01% 0.00% 0.00%
<FN>
(a) Not annualized
(b) Annualized
(c) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
4. Financial Highlights. (Continued)
U.S. Treasury Portfolio
-------------------------------------------------------------------------------
Class B Shares Six Months Ended For the Year Ended March 31,
- -------------- September 30, 2003 ------------------------------------------------------------
(Unaudited) 2003 2002 2001 2000 1999
--------- --------- --------- -------- -------- --------
Per Share Operating Performance:
(for a share outstanding throughout the period)
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....................... 0.005 0.015 0.031 0.060 0.050 0.050
Less distributions:
Dividends from net investment income......... ( 0.005) ( 0.015) ( 0.031) ( 0.060) ( 0.050) ( 0.050)
------- ------- ------- ------- ------- -------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ======== ======== ========
Total Return.................................... 0.49%(a) 1.53% 3.12% 6.14% 5.08% 5.12%
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 412,650 $ 383,677 $ 348,701 $ 151,356 $ 37,987 $ 79,793
Ratios to average net assets:
Expenses(c) (net of fees waived)............. 0.20%(b) 0.20% 0.21% 0.21% 0.20% 0.20%
Net investment income........................ 0.96%(b) 1.51% 2.66% 5.89% 4.97% 4.73%
Management and administration fees waived.... 0.04%(b) 0.03% 0.02% 0.02% 0.02% 0.04%
Expenses paid indirectly..................... 0.00%(b) 0.00% 0.00% 0.01% 0.00% 0.00%
<FN>
(a) Not annualized
(b) Annualized
(c) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
4. Financial Highlights. (Continued)
U.S. Treasury Portfolio
-------------------------------------------------------------------------------
Six Months Ended July 29,1999
Pinnacle Shares September 30, 2003 For the Year Ended March 31, (Commencement of Sales) to
- --------------- ------------------------------
(Unaudited) 2003 2002 2001 March 31, 2000
--------- -------- -------- -------- --------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income............... 0.005 0.015 0.031 0.060 0.035
Less distributions:
Dividends from net investment income ( 0.005) ( 0.015) ( 0.031) ( 0.060) ( 0.035)
------- ------- ------- ------- -------
Net asset value, end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.......................... 0.49%(a) 1.53% 3.12% 6.14% 3.53%(a)
Ratios/Supplemental Data
Net assets, end of period (000)....... $ 29,004 $ 25,526 $ 17,871 $ 20,724 $ 18,450
Ratios to average net assets:
Expenses(c) (net of fees waived).... 0.20%(b) 0.20% 0.20% 0.21% 0.20%(b)
Net investment income............... 0.96%(b) 1.51% 2.66% 5.89% 4.97%(b)
Management and administration fees waived 0.04%(b) 0.03% 0.02% 0.02% 0.02%(b)
Expenses paid indirectly............ 0.00%(b) 0.00% 0.00% 0.01% 0.00%(b)
<FN>
(a) Not annualized
(b) Annualized
(c) Includes expenses paid indirectly
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL DAILY INCOME FUND
ADDITIONAL INFORMATION
(UNAUDITED)
================================================================================
Trustees and Officers Information
September 30, 2003+
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Number of Portfolios Other
Position(s) Term of Principal Occupation(s) in Directorships
Name, Address*, Held with Office During Past Fund Complex held by
and Age Fund and Length of 5 Years Overseen by Trustees Director
Time Served or Officer
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Disinterested Trustee:
- ----------------------- -------------------- -------- ---------------------------- ---------------------- ---------------
Dr. W. Giles Mellon, Trustee 1994 Professor Emeritus of Director/Trustee of N/A
Age 72 Business Administration in nine other portfolios
the Graduate School of
Management, Rutgers
University with which he
has been associated since
1966.
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Robert Straniere, Trustee 1994 Owner, Straniere Law Firm Director/Trustee of WPG Funds
Esq., Age 62 since 1980, New York State nine other portfolios Group
Assemblyman since 1981 and
counsel at Fisher, Fisher &
Berger since 1955.
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Dr. Yung Wong, Trustee 1994 Managing Director of Director/Trustee of N/A
Age 64 Abacus Associates, an nine other portfolios
investment firm, since 1996.
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Interested Trustees/
Officers:
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Steven W. Duff, President 1994 Manager and President of Director/Trustee N/A
Age 49 and Trustee** Reich & Tang Asset and/or Officer of
Management, LLC ("RTAM, fourteen other
LLC"), a registered portfolios
Investment Advisor.
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Richard De Sanctis, Treasurer 1994 Executive Vice President, Officer of fourteen N/A
Age 47 and CFO of RTAM, LLC. other portfolios
Assistant
Secretary
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Molly Flewharty, Vice 1994 Senior Vice President of Officer of fourteen N/A
Age 52 President RTAM, LLC. other portfolios
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Rosanne Holtzer, Secretary 1998 Senior Vice President of Officer of fourteen N/A
Age 39 and RTAM, LLC. other portfolios
Assistant
Treasurer
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
Dana E. Messina, Vice 1994 Executive Vice President Officer of eleven N/A
Age 47 President of RTAM, LLC. other portfolios
- ----------------------- -------------- -------------- ---------------------------- ---------------------- ---------------
<FN>
+ The Statement of Additional Information includes additional information
about Institutional Daily Income Fund (the "Fund") trustees and is
available, without charge, upon request by calling the Fund's transfer
agent at (212) 830-5200.
* The address for each of the above trustees/officers of the Fund is Reich &
Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020.
** Steven W. Duff is deemed an interested person of the Fund due to his
affiliation with RTAM, LLC, the Fund's investment advisor.
</FN>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL
DAILY
INCOME FUND
Semi-Annual Report
September 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -----------------------------------------------------
This report is submitted for the general information
of the shareholders of the Fund. It is not
authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an
effective prospectus, which includes information
regarding the Fund's objectives and policies,
experience of its management, marketability of
shares, and other information.
- ------------------------------------------------------
Institutional Daily Income Fund
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
Custodian
The Bank of New York
100 Church Street, 10th Floor
New York, New York 10286
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
IDI9/03S
- --------------------------------------------------------------------------------
Item 2: Code of Ethics
Not applicable at this time.
Item 3: Audit Committee Financial Expert
Not applicable at this time.
Item 4: Principal Accountant Fees and Services
Not applicable at this time.
Item 5: Audit Committee of Listed Registrants
Not applicable.
Item 6: Reserved
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8: Reserved
Item 9: Controls and Procedures
(a) The registrant's Principal Executive Officer and Principal Financial
Officer have evaluated the registrant's disclosure controls and
procedures within 90 days of this filing and have concluded that the
registrant's disclosure controls and procedures were effective in
ensuring that information required to be disclosed by the registrant in
this Form N-CSR was recorded, processed, summarized and reported on a
timely basis.
(b) There were no changes in the registrant's internal controls over
financial reporting that occurred during the registrant's last fiscal
half-year that have materially affected, or are reasonably likely to
affect, the registrant's internal controls over financial reporting.
Item 10: Exhibits
(a)(1) Not applicable at this time.
(a)(2) Certifications of Principal Executive Officer and Principal Financial
Officer, under Rule 30a-2 of the Investment Company Act of 1940.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer, under Section 906 of the Sarbanes-Oxley Act of 2002, and 18
U.S.C. ss.1350.
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, thereunto duly authorized.
(Registrant) Institutional Daily Income Fund
By (Signature and Title)* /s/Rosanne Holtzer,
Rosanne Holtzer, Secretary
Date: December 2, 2003
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 (Signature and Title)* /s/Steven W. Duff
Steven W. Duff, Chief Executive Officer
Date: December 2, 2003
By (Signature and Title)* /s/Richard DeSanctis
Richard DeSanctis, Chief Financial Officer
Date: December 2, 2003
* Print the name and title of each signing officer under his or her signature.