UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-3658
CDC Nvest Tax Exempt Money Market Trust
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(Exact name of registrant as specified in charter)
399 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
John E. Pelletier, Esq.
CDC IXIS Asset Management Distributors, L.P.
399 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 449-2801
Date of fiscal year end: June 30, 2003
Date of reporting period: June 30, 2003
Item 1. Reports to Stockholders.
The Registrant's annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
[LOGO OF CDC NVEST FUNDS(SM)]
CDC IXIS Asset Management Distributors
[GRAPHIC APPEARS HERE]
Money Market Funds
Annual Report
June 30, 2003
CDC Nvest Cash Management Trust -
Money Market Series
Reich & Tang Asset Management
CDC Nvest Tax Exempt Money Market Trust
Reich & Tang Asset Management
TABLE OF CONTENTS
Management Discussion
and Performance.................... Page 2
Schedule of Investments.............Page 4
Financial Statements................Page 6
Report of Independent
Auditors...........................Page 14
Trustees' Information..............Page 15
CDC NVEST MONEY MARKET FUNDS
Annualized Seven-Day Yields -- June 30, 2003
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Class A, B & C
CDC Nvest Cash Management Trust -- Money Market Series 0.27%
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Class A & B
CDC Nvest Tax Exempt Money Market Trust 0.10%*
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Yields will fluctuate with changes in market conditions.
The seven-day money market yield reflects the funds' current earnings more
closely than total return.
* The advisor waived certain fund expenses. If these expenses had not been
waived, the fund's seven-day yield would have been 0.04%.
Average Annual Total Returns -- June 30, 2003
CDC NVEST CASH MANAGEMENT TRUST -- MONEY MARKET SERIES
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Class A (Inception 7/10/78) 1 Year 5 Years 10 Years
Net Asset Value/1/ 0.76% 3.49% 3.96%
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Class B (Inception 9/13/93) 1 Year 5 Years Since Inception
Net Asset Value/1/ 0.76% 3.49% 3.99%
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Class C (Inception 3/1/98) 1 Year 5 Years Since Inception
Net Asset Value/1/ 0.76% 3.49% 3.59%
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CDC NVEST TAX EXEMPT MONEY MARKET TRUST
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Class A (Inception 4/21/83) 1 Year/2/ 5 Years/2/ 10 Years/2/
Net Asset Value/1/ 0.28% 2.05% 2.53%
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Class B (Inception 9/13/93) 1 Year/2/ 5 Years/2/ Since Inception/2/
Net Asset Value/1/ 0.28% 2.05% 2.57%
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/1/ These returns include reinvestment of distributions, represent past
performance and do not predict future results.
/2/ The advisor waived certain fees during the period indicated, and the fund's
average annual returns would have been lower if these fees had not been
waived.
These two funds are not insured or guaranteed by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency. Although both funds seek to
maintain a constant share price of $1.00, it is possible to lose money by
investing in them.
CDC NVEST CASH MANAGEMENT TRUST - MONEY MARKET SERIES CDC NVEST TAX EXEMPT MONEY MARKET TRUST
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Objective: Objective:
Seeks maximum current income consistent with Seeks current income exempt from federal income taxes
preservation of capital and liquidity. consistent with preservation of capital and liquidity.
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Strategy: Strategy:
Invests primarily in high-quality, short-term, Focuses on high-quality, short-term, U.S. municipal money
U.S. and dollar-denominated foreign money market market investments that pay interest exempt from federal
investments. income tax.
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Manager: Manager:
Molly J. Flewharty, Molly J. Flewharty,
Reich & Tang Asset Management Reich & Tang Asset Management
1
CDC NVEST MONEY MARKET FUNDS
CDC NVEST CASH MANAGEMENT TRUST MANAGEMENT DISCUSSION
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Short-term interest rates generally remained at historic lows throughout CDC
Nvest Cash Management Trust's fiscal year, which ended June 30, 2003. Although
this resulted in low yields, money market funds continue to offer a combination
of relative stability and easy access to cash that have made them a basic tool
for many investors.
Throughout the 12-month period, the fund maintained a constant price of $1.00
per share and provided a total return of 0.76%, based on the net asset value of
Class A shares and $0.0076 per share in reinvested dividends. The fund's
seven-day SEC yield as of the end of June was 0.27%.
Two cuts in 12 months leave interest rates at 45-year lows
At the beginning of the fund's fiscal year in July of 2002, the economy was
sluggish and investors were alert to the possibility that the Federal Reserve
Board might cut short-term interest rates in an effort to stimulate the economy.
We extended the fund's average maturity early in the period to lock in yields
for as long as possible.
However, the Fed took no action until early November, when it lowered the
Federal Funds Rate - the rate banks charge each other for overnight borrowing -
by 0.50% to 1.25%. Short-term interest rates remained at that level throughout
most of the period, but the economy failed to respond.
In May, the economy seemed to be recovering from the reversal that occurred
during the war in Iraq, but the Fed became increasingly concerned about the
prospect of deflation. Deflation refers to a downward spiral in the price of
goods and services brought about by decreasing demand, which can lead to
increased unemployment and a stalled economy. Late in June, the Fed reduced
interest rates again, this time by 0.25% to 1.00%.
Managed maturities, commercial paper help maximize income
We positioned the fund to generate as much income as possible given the low
level of money market interest rates, keeping maturities on the longer side to
lock in yields to the extent possible. During the past 12 months, the fund's
average maturity ranged from 48 days in the fall of 2002 to 71 days in the
spring of 2003, ending June at 64 days. Maturities shift every day as we buy and
sell securities or as they mature.
Throughout the period, commercial paper comprised the bulk of the portfolio
because that's where value and yields were most attractive. During the first
half of the fund's fiscal year, we also invested a portion of assets in U.S.
government agency securities, seeking higher yields without sacrificing relative
safety. However, when concerns arose about accounting procedures at Freddie Mac
(a major player in the home-mortgage market), we again focused on quality,
investing almost exclusively in commercial paper and bank notes.
Fed expected to "wait and see"
With the Fed's most recent rate cut in June, it seems unlikely that short-term
interest rates will go much below current levels. In fact, most financial
experts agree that the Fed is unlikely to lower the Federal Funds Rate below
0.75%. Although economists generally expect the combined stimulus of rate cuts
and tax policies to have positive effects on the economy in the second half of
2003, unemployment numbers recently touched new highs for this cycle and current
economic data show little progress.
We believe the Fed will hold off for the time being, closely monitoring the
health of the economy, and we expect to pursue the strategies we have used in
the past 12 months, emphasizing high quality and keeping average maturities on
the longer side. We will also strive to move quickly to take advantage of
investment opportunities as they arise.
2
CDC NVEST MONEY MARKET FUNDS
CDC NVEST TAX EXEMPT MONEY MARKET TRUST MANAGEMENT DISCUSSION
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The income available from money market investments slowed to a trickle during
the 12 months ended June 30, 2003. However, CDC Nvest Tax Exempt Money Market
Trust maintained a constant price of $1.00 per share throughout the period. The
fund also provided a total return of 0.28%, based on the net asset value of
Class A shares and $0.0028 per share in reinvested dividends. Its seven-day SEC
yield as of the end of June was 0.10%, after the expense waiver. The fund's
seven-day yield is equivalent to a taxable yield of 0.15%, based on the highest
2003 federal tax bracket of 35%.
Interest rates steady at low levels
Although short-term interest rates generally remained stable during the past 12
months, all eyes were on the Federal Reserve Board, waiting to see whether
concerns about the economy and deflation would drive them to cut rates further.
Deflation refers to a downward spiral in prices for goods and services brought
about by decreasing demand, which can lead to increased unemployment and a
stalled economy. However, the Fed remained on the sidelines until November of
2002, when it slashed the Federal Funds Rate - the rate banks charge each other
for overnight borrowing - by 0.50% to 1.25%. Just days before the end of the
fund's fiscal year, the Fed again lowered rates, this time by 0.25% to 1.00%,
the lowest level in 45 years.
Throughout the period, we adjusted the fund's average maturity to take advantage
of rate fluctuations in the fixed-income market generally, as well as to
capitalize on seasonal factors that are unique to the tax-exempt markets. During
the past 12 months, the fund's average maturity ranged from 40 days in November
of 2002 to 74 days in January of 2003. Maturities change daily as we buy and
sell securities or as they mature.
% OF NET ASSETS
AS OF
LARGEST STATES 6/30/03 12/31/02
- ---------------------------------------------
Texas 22.9% 18.6%
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Florida 9.0 9.0
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Hawaii 7.2 6.7
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Wyoming 7.0 3.1
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Illinois 6.6 6.2
- ---------------------------------------------
Tennessee 6.6 10.4
Seasonal factors influenced supply / demand
During any given year there are two periods of increased activity in the
municipal bond markets: July and January. Because the fiscal year-end for most
municipalities is June 30, the supply of newly issued, one-year, fixed-rate
securities typically is high in late June. This means we are usually most active
in the market at the start of the fund's fiscal year in July because the large
increase in supply generally produces attractive yields.
At the beginning of the fund's fiscal year last July, the supply of new issues
was substantial, but the credit quality of many of the notes concerned us.
Reflecting the stresses on the nation's economy, many states were in poor fiscal
health and watching their budget deficits grow. Consequently, we focused on
states and municipalities that were effectively managing their budget problems.
Typically, each December shareholders of tax-exempt money market funds redeem
shares to meet year-end tax payments or for other expenses. Since money market
funds are the largest purchasers of variable-rate securities, demand for these
securities drops off in December, sending prices lower and yields up. However,
redemptions were down in December of 2002, resulting in only minor rate
increases.
During the second half of the fund's fiscal year, we were concerned that the
sluggish economy might prompt the Fed to lower interest rates again, so we
extended maturities to lock in yields, and then shortened again, in preparation
for the next influx of new notes. The fund's average maturity at June 30, 2003
was 45 days.
Interest rates expected to be flat or falling
With its latest cut, the Fed signaled that interest rates would remain low for
now, but the question remains whether that quarter-point rate cut will be
enough. We believe the Fed will maintain a hands-off policy for the time being,
closely monitoring the health of the economy. As specialists in money market
investing, we will put our experience and buying power to work to benefit
shareholders as opportunities present themselves.
These two funds are not insured or guaranteed by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency. Although both funds seek to
maintain a constant share price of $1.00, it is possible to lose money by
investing in them.
The portfolio manager's commentary reflects the conditions and actions taken
during the reporting period, which are subject to change. A shift in opinion may
result in strategic and other portfolio changes.
Some of CDC Nvest Tax Exempt Money Market Trust's income may be subject to
federal and state taxes. Capital gains are fully taxable. Investors may be
subject to the Alternative Minimum Tax (AMT). See the fund's prospectus for
details.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
3
CASH MANAGEMENT TRUST - MONEY MARKET SERIES
Investments as of June 30, 2003
INVESTMENTS -- 99.8% OF TOTAL NET ASSETS
PRINCIPAL
AMOUNT DESCRIPTION VALUE (a)
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COMMERCIAL PAPER -- 71.9%
AIRLINE -- 1.6%
$ 7,585,000 New York City, NY, Industrial Development Agency, 1.000%, 7/01/2008 (c) ............ $ 7,585,000
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ASSET-BACKED -- 16.3%
10,000,000 Market Street Funding Corp., 144A, 1.320%, 7/01/2003 ............................... 10,000,000
10,000,000 Greyhawk Funding LLC, 144A, 1.230%, 7/11/2003 ...................................... 9,996,583
10,000,000 Greyhawk Funding LLC, 144A, 0.950%, 7/15/2003 ...................................... 9,996,306
5,000,000 Fountain Square Commercial Funding Corp., 144A, 1.260%, 7/17/2003 .................. 4,997,200
5,000,000 Market Street Funding Corp., 144A, 1.180%, 7/25/2003 ............................... 4,996,067
10,000,000 Fountain Square Commercial Funding Corp., 144A, 1.220%, 8/04/2003 .................. 9,988,478
5,000,000 Govco, Inc., 144A, 1.210%, 8/08/2003 ............................................... 4,993,614
20,000,000 Special Purpose Accounts Receivable Cooperative Corp., 144A, 1.230%, 8/08/2003 ..... 19,974,033
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74,942,281
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BANKING -- 13.9%
5,000,000 Societe Generale North America, 1.245%, 7/07/2003 .................................. 4,998,963
4,000,000 Alliance & Leicester PLC, 1.305%, 7/09/2003 ........................................ 3,998,840
10,000,000 Banco Bilbao Vizcaya Argentaria Puerto Rico, 1.250%, 7/17/2003 ..................... 9,994,444
10,000,000 Yorkshire Building Society, 1.220%, 7/21/2003 ...................................... 9,993,222
10,000,000 Alliance & Leicester PLC, 1.250%, 7/21/2003 ........................................ 9,993,055
5,000,000 Alliance & Leicester PLC, 1.270%, 7/21/2003 ........................................ 4,996,472
5,000,000 HBOS Treasury Services PLC, 1.230%, 7/31/2003 ...................................... 4,994,875
15,000,000 Banco Rio de la Plata SA, 0.970%, 3/18/2004 ........................................ 14,894,513
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63,864,384
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BUILDING -- 7.5%
1,225,000 Shayeson-Huff Properties LLC, 1.250%, 11/01/2016 (c) ............................... 1,225,000
2,875,000 Cardiology Building Associates LLC, 1.150%, 10/01/2021 (c) ......................... 2,875,000
2,700,000 J&M LLC, 1.313%, 10/01/2026 (c) .................................................... 2,700,000
17,450,000 MOB Management Two LLC, 1.350%, 12/01/2026 (c) ..................................... 17,450,000
5,200,000 VWS McAdory Market LLC, 1.150%, 7/01/2027 (c) ...................................... 5,200,000
2,015,000 Daniel Land Co., 1.313%, 10/01/2027 (c) ............................................ 2,015,000
3,130,000 MOB Management One LLC, 1.350%, 12/01/2031 (c) ..................................... 3,130,000
--------------
34,595,000
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EDUCATION -- 6.3%
15,000,000 Board of Trustees of the Leland Stanford Junior University, 1.220%, 7/07/2003 ...... 14,996,950
5,000,000 Board of Trustees of the Leland Stanford Junior University, 1.030%, 9/10/2003 ...... 4,989,843
9,000,000 Yale University, 1.020%, 9/26/2003 ................................................. 8,977,815
--------------
28,964,608
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ELECTRIC UTILITIES -- 2.2%
10,000,000 AES Shady Point, Inc., 1.220%, 9/02/2003 ........................................... 9,978,650
--------------
FINANCIAL SERVICES -- 7.2%
5,000,000 UBS Finance (Delaware) LLC, 1.310%, 7/01/2003 ...................................... 5,000,000
10,000,000 Private Export Funding Corp., 1.220%, 7/22/2003 .................................... 9,992,883
5,000,000 CSN Overseas, 1.270%, 10/16/2003 ................................................... 4,981,126
5,000,000 Private Export Funding Corp., 1.120%, 11/13/2003 ................................... 4,979,000
2,425,000 SSK Co. LLC, 1.250%, 11/01/2021 (c) ................................................ 2,425,000
2,035,000 Jobs Co. (The) LLC, 1.313%, 2/01/2022 (c) .......................................... 2,035,000
3,430,000 Alpine Capital Investments LLC, 1.280%, 9/15/2027 (c) .............................. 3,430,000
--------------
32,843,009
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GOVERNMENT -- 2.2%
10,000,000 Mississippi, 1.640%, 12/01/2003 .................................................... 10,000,177
--------------
HEALTH CARE PROVIDERS -- 2.4%
11,000,000 Dean Health Systems, Inc., 1.150%, 7/15/2003 ....................................... 10,995,081
--------------
HOSPITAL -- 0.7%
3,130,000 Birmingham, AL, Special Care Facilities Financing Authority, 1.313%,
9/01/2018 (c) ..................................................................... 3,130,000
--------------
MULTI-FAMILY -- 4.2%
2,500,000 New York City, NY, Housing Development Corp., 1.020%, 1/15/2034 (c) ................ 2,500,000
2,100,000 Florida Housing Finance Corp., (Stuart Pointe Partners), 1.050%, 4/01/2034 (c) ..... 2,100,000
10,000,000 New York Housing Finance Agency, 1.020%, 11/01/2034 (c) ............................ 10,000,000
4,544,838 Los Angeles, CA, Community Redevelopment Agency, 1.100%, 12/15/2034 (c) ............ 4,544,838
--------------
19,144,838
--------------
PUBLIC POWER/UTILITY -- 4.1%
19,000,000 New Jersey Economic Development Authority, 1.000%, 9/01/2021 (c) ................... 19,000,000
--------------
SINGLE-FAMILY -- 1.1%
5,000,000 Connecticut Housing Finance Authority, 1.050%, 5/15/2033 (c) ....................... 5,000,000
--------------
U.S. GOVERNMENT AGENCIES -- 2.2%
5,000,000 Student Loan Marketing Association, Medium Term Note, 2.600%, 7/02/2003 ............ 5,002,900
5,000,000 Federal Home Loan Mortgage Corp. Discount Notes, 1.170%, 3/25/2004 ................. 4,956,450
--------------
9,959,350
--------------
Total Commercial Paper (Cost $330,002,378) ......................................... 330,002,378
--------------
BANK NOTE -- 2.2%
10,000,000 Bank of America NA, 1.230%, 7/10/2003 .............................................. 10,000,000
--------------
Total Bank Note (Cost 10,000,000) .................................................. 10,000,000
--------------
MEDIUM TERM NOTE -- 4.4%
15,000,000 Caterpillar Financial Services Corp., 1.370%, 7/09/2003 (c) ........................ 15,000,000
5,000,000 General Electric Capital Corp., Medium Term Note, 1.170%, 10/17/2003 (c) ........... 5,000,000
--------------
Total Medium Term Note (Cost $20,000,000) .......................................... 20,000,000
--------------
CERTIFICATES OF DEPOSIT -- 17.4%
10,000,000 Svenska Handelsbanken AB/NY, 1.200%, 8/22/2003 ..................................... 10,000,236
20,000,000 Toronto-Dominion Bank (The)/NY, 1.510%, 11/12/2003 ................................. 20,000,000
10,000,000 Credit Agricole Indosuez/NY, 1.050%, 1/16/2004 ..................................... 9,999,864
10,000,000 Rabobank Nederland NV/NY, 1.043%, 1/22/2004 (c) .................................... 10,000,000
10,000,000 Harris Trust & Savings Bank, 1.320%, 3/01/2004 ..................................... 9,999,667
10,000,000 Abbey National Treasury Services PLC, 1.040%, 3/08/2004 (c) ........................ 9,999,318
5,000,000 UBS AG (Stamford, CT), 1.095%, 3/15/2004 ........................................... 4,999,562
5,000,000 Credit Agricole Indosuez/NY, 1.310%, 4/15/2004 (c) ................................. 5,000,000
--------------
Total Certificates of Deposit (Cost $79,998,647) ................................... 79,998,647
--------------
TIME DEPOSITS -- 3.9%
17,900,000 BNP Paribas SA, 1.375%, 7/01/2003 .................................................. 17,900,000
--------------
Total Time Deposits (Cost $17,900,000) ............................................. 17,900,000
--------------
SHORT TERM INVESTMENT -- 0.0%
44,848 Repurchase Agreement with Investors Bank & Trust Co. dated 6/30/2003
at 0.75% to be repurchased at $44,849 on 7/01/2003, collateralized
by $45,409 Government National Mortgage Association Bond, 5.375%, due
4/20/2024 valued at $47,090 ....................................................... 44,848
--------------
Total Short Term Investment (Cost $44,848) ......................................... 44,848
--------------
Total Investments -- 99.8% (Identified Cost $457,945,873) (b) .................... 457,945,873
Other assets less liabilities .................................................... 1,011,385
--------------
Total Net Assets -- 100.0% ....................................................... $ 458,957,258
==============
(a) See Note 2a of Notes to Financial Statements.
(b) The aggregate cost for federal income tax purposes was $457,945,873. At
June 30, 2003, the components of distributable earnings, on a tax basis
consisted of $198,033 of undistributed ordinary income and $0 of
long-term gains.
(c) Floating rate notes are instruments whose interest rates vary with
changes in a designated base rate (such as the prime interest rate) on a
specified date (such as coupon date or interest payment date). These
instruments are payable on demand and are secured by letters of credit or
other credit support agreements from major banks. Maturity dates shown
represent the ultimate maturity of the note.
144A Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registrations, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $74,942,281 or 16.3% of
net assets.
For the year ended June 30, 2003, the Fund has elected to defer $435 of
capital losses attributable to post-October losses.
See accompanying notes to financial statements.
4
TAX EXEMPT MONEY MARKET TRUST
Investments as of June 30, 2003
Investments -- 99.5% of Total Net Assets
PRINCIPAL
AMOUNT DESCRIPTION VALUE (a)
- -----------------------------------------------------------------------------------------------------------------------
ALASKA -- 5.5%
$ 665,000 Alaska Industrial Development & Export Authority, 1.300%, 7/01/2003 (c) ............ $ 665,000
160,000 Alaska Industrial Development & Export Authority, 1.300%, 7/01/2005 (c) ............ 160,000
75,000 Alaska Industrial Development & Export Authority, 1.300%, 7/01/2005 (c) ............ 75,000
240,000 Alaska Industrial Development & Export Authority, 1.300%, 7/01/2006 (c) ............ 240,000
100,000 Alaska Industrial Development & Export Authority, 1.300%, 7/01/2007 (c) ............ 100,000
190,000 Alaska Industrial Development & Export Authority, 1.300%, 7/01/2007 (c) ............ 190,000
380,000 Alaska Industrial Development & Export Authority, 1.300%, 7/01/2012 (c) ............ 380,000
--------------
1,810,000
--------------
FLORIDA -- 9.0%
1,000,000 Sunshine State Governmental Financing Commission, 1.000%, 7/16/2003 ................ 1,000,000
500,000 Sunshine State Governmental Financing Commission, 0.900%, 9/10/2003 ................ 500,000
500,000 Gainesville, FL, Utility Systems, 0.950%, 9/10/2003 ................................ 500,000
1,000,000 Palm Beach County, FL, Industrial Development, 1.250%, 11/01/2011 (c) .............. 1,000,000
--------------
3,000,000
--------------
HAWAII -- 7.2%
500,000 Honolulu, HI, City & County, 0.950%, 8/07/2003 ..................................... 500,000
1,875,000 Honolulu, HI, City & County, 1.300%, 12/01/2013 (c) ................................ 1,875,000
--------------
2,375,000
--------------
ILLINOIS -- 6.6%
2,200,000 McCook, IL, 1.050%, 12/01/2021 (c) ................................................. 2,200,000
--------------
INDIANA -- 1.5%
500,000 Indiana Bond Bank, 2.000%, 1/27/2004 ............................................... 502,885
--------------
IOWA -- 3.0%
1,000,000 West Des Moines, IA, Commerical Development, 0.970%, 12/01/2014 (c) ................ 1,000,000
--------------
MARYLAND -- 4.5%
1,500,000 Baltimore County, MD, Metropolitan District, 1.100%, 7/11/2003 ..................... 1,500,000
--------------
MASSACHUSETTS -- 4.5%
500,000 Commonwealth of Massachusetts, 0.900%, 8/11/2003 ................................... 500,000
500,000 Massachusetts Health & Educational Facilities Authority,
(Capital Asset Program), 0.900%, 7/01/2010 (c) .................................... 500,000
500,000 Massachusetts, (Central Artery), 0.950%, 12/01/2030 (c) ............................ 500,000
--------------
1,500,000
--------------
MINNESOTA -- 1.5%
500,000 Rochester, MN, Health Care Facilities, 0.900%, 9/10/2003 ........................... 500,000
--------------
PENNSYLVANIA -- 6.0%
2,000,000 Quakertown, PA, Hospital Authority, 0.950%, 7/01/2005 (c) .......................... 2,000,000
--------------
SOUTH CAROLINA -- 1.5%
500,000 Berkeley County, SC, Pollution Control, (Amoco Chemical Co.),
0.950%, 7/01/2012 (c) ............................................................. 500,000
--------------
TENNESSEE -- 6.6%
2,200,000 Blount County, TN, Industrial Development Board, 1.200%, 8/01/2008 (c) ............. 2,200,000
--------------
TEXAS -- 22.9%
1,500,000 San Antonio, TX, Water System, 1.000%, 7/09/2003 ................................... 1,500,000
500,000 Austin, TX, 0.900%, 8/14/2003 ...................................................... 500,000
1,500,000 Texas State, 2.750%, 8/29/2003 ..................................................... 1,503,227
2,100,000 Montgomery County, TX, Industrial Development Authority, 1.300%, 8/01/2017 (c) ..... 2,100,000
1,000,000 San Antonio, TX, Airport System, 1.150%, 4/01/2020 (c) ............................. 1,000,000
1,000,000 Houston, TX, Independent School District, 1.050%, 6/15/2033 ........................ 999,690
--------------
7,602,917
--------------
UNITED STATES -- 3.2%
1,045,000 Puttable Floating Option Tax-Exempt Receipts, 0.950%, 1/01/2032 (c) ................ 1,044,960
--------------
UTAH -- 4.5%
500,000 Intermountain Power Agency, 1.000%, 7/01/2015 (c) .................................. 500,000
1,000,000 Intermountain Power Agency, 0.950%, 7/01/2018 (c) .................................. 1,000,000
--------------
1,500,000
--------------
WASHINGTON -- 3.0%
315,000 Moses Lake, WA, 1.500%, 8/01/2003 .................................................. 315,000
300,000 Pierce County, WA, Fire Protection, District No. 16, 1.100%, 12/01/2003 ............ 300,000
370,000 Franklin County, WA, 3.500%, 12/01/2003 ............................................ 373,065
--------------
988,065
--------------
WISCONSIN -- 1.5%
500,000 West Allis West Milwaukee, WI, School District, 1.800%, 9/22/2003 .................. 500,055
--------------
WYOMING -- 7.0%
1,000,000 Sweetwater County, WY, Pollution Control, 1.050%, 7/16/2003 ........................ 1,000,000
1,330,000 Sublette County, WY, Pollution Control (Exxon Mobil Corp.), 0.900%, 11/01/2014 (c).. 1,330,000
--------------
2,330,000
--------------
Total Investments -- 99.5% (Identified Cost $33,053,882) (b) ....................... 33,053,882
Other assets less liabilities ...................................................... 157,521
--------------
Total Net Assets -- 100.0% ......................................................... $ 33,211,403
==============
(a) See Note 2a of Notes to Financial Statements.
(b) The aggregate cost for federal income tax purposes was $33,053,882. At
June 30, 2003 the fund had a capital loss carryover of approximately
$7,652, which expires on June 30, 2008. This may be available to offset
future realized capital gains, if any, to the extent provided by
regulations.
At June 30, 2003, the components of distributable earnings, on a tax basis
consisted of $66,404 of undistributed ordinary income and $0 of long-term gains.
(c) Floating rate notes are instruments whose interest rates vary with
changes in a designated base rate (such as the prime interest rate) on a
specified date (such as coupon date or interest payment date). These
instruments are payable on demand and are secured by letters of credit or
other credit support agreements from major banks. Maturity dates shown
represent the ultimate maturity of the note.
See accompanying notes to financial statements.
5
STATEMENTS OF ASSETS & LIABILITIES
June 30, 2003
CASH MANAGEMENT TRUST TAX EXEMPT
MONEY MARKET MONEY MARKET
SERIES TRUST
--------------------- ---------------
ASSETS
Investments, at value (Identified cost $457,945,873
and $33,053,882, respectively) ..................... $ 457,945,873 $ 33,053,882
Cash ................................................ -- 73,511
Receivable for:
Shares sold ......................................... 3,157,226 251,333
Interest ............................................ 674,494 97,612
--------------------- ---------------
461,777,593 33,476,338
--------------------- ---------------
LIABILITIES
Payable for:
Shares redeemed ..................................... 2,257,568 156,084
Dividends payable ................................... 1,970 194
Accrued expenses:
Management fees ..................................... 155,279 9,899
Deferred Trustees' fees ............................. 133,903 45,527
Transfer agent ...................................... 166,793 12,134
Accounting and administrative fees .................. 30,443 2,146
Other expenses ...................................... 74,379 38,951
--------------------- ---------------
2,820,335 264,935
--------------------- ---------------
NET ASSETS ............................................ $ 458,957,258 $ 33,211,403
===================== ===============
Net assets consist of:
Paid in capital ..................................... $ 458,890,312 $ 33,198,328
Undistributed (overdistributed) net investment
income ............................................. 67,382 20,727
Accumulated net realized gain (loss) on investments.. (436) (7,652)
--------------------- ---------------
NET ASSETS ............................................ $ 458,957,258 $ 33,211,403
===================== ===============
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE:
CLASS A SHARES:
Net assets .......................................... $ 418,814,444 $ 32,800,019
===================== ===============
Shares of beneficial interest ....................... 418,749,219 32,786,586
===================== ===============
Net asset value and redemption price per share ...... $ 1.00 $ 1.00
===================== ===============
CLASS B SHARES:
Net assets .......................................... $ 36,212,580 $ 411,384
===================== ===============
Shares of beneficial interest ....................... 36,211,640 411,269
===================== ===============
Net asset value and redemption price per share ...... $ 1.00 $ 1.00
===================== ===============
CLASS C SHARES:
Net assets .......................................... $ 3,930,234 $ --
===================== ===============
Shares of beneficial interest ....................... 3,929,667 --
===================== ===============
Net asset value and redemption price per share ...... $ 1.00 $ --
===================== ===============
See accompanying notes to financial statements.
6
STATEMENTS OF OPERATIONS
For the Year Ended June 30, 2003
CASH MANAGEMENT TRUST - TAX EXEMPT
MONEY MARKET MONEY MARKET
SERIES TRUST
----------------------- ------------------
INVESTMENT INCOME
Interest ................................................................ $ 8,440,666 $ 525,367
----------------------- ------------------
Expenses
Management fees ....................................................... 2,039,902 144,315
Trustees' fees and expenses ........................................... 54,553 10,543
Accounting and administrative ......................................... 371,431 25,898
Custodian fees ........................................................ 73,120 38,877
Transfer agent ........................................................ 1,754,984 130,943
Audit and tax services ................................................ 25,938 25,405
Legal fees ............................................................ 43,127 4,220
Shareholder reporting ................................................. 29,546 6,098
Registration fees ..................................................... 78,102 32,869
Miscellaneous ......................................................... 33,301 4,083
----------------------- ------------------
Total expenses before reductions ........................................ 4,504,004 423,251
Less reimbursement/waiver ............................................. -- (3,439)
Less reductions ....................................................... -- (621)
----------------------- ------------------
Net expenses ............................................................ 4,504,004 419,191
----------------------- ------------------
Net investment income ..................................................... 3,936,662 106,176
----------------------- ------------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) on investments - net ............................... 1,073 --
----------------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........... $ 3,937,735 $ 106,176
======================= ==================
See accompanying notes to financial statements.
7
STATEMENTS OF CHANGES IN NET ASSETS
CASH MANAGEMENT TRUST - TAX EXEMPT
MONEY MARKET SERIES MONEY MARKET TRUST
-------------------------------- --------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002
-------------- -------------- -------------- --------------
FROM OPERATIONS
Net investment income ............................. $ 3,936,662 $ 9,667,827 $ 106,176 $ 363,895
Net realized gain (loss) on investments and
foreign currency transactions .................... 1,073 19,248 -- --
-------------- -------------- -------------- --------------
Increase in net assets resulting from operations .. 3,937,735 9,687,075 106,176 363,895
-------------- -------------- -------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (a)
Class A ......................................... (3,638,617) (9,133,092) (100,895) (361,484)
Class B ......................................... (283,294) (482,242) (899) (2,411)
Class C ......................................... (34,420) (57,910) -- --
-------------- -------------- -------------- --------------
(3,956,331) (9,673,244) (101,794) (363,895)
-------------- -------------- -------------- --------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares (b) .................. 626,533,663 773,190,735 28,748,326 35,818,308
Net asset value of shares issued in connection
with the reinvestment of dividends from net
investment income and distributions from net
realized gains ................................... 3,848,644 9,444,340 99,510 355,426
Cost of shares redeemed ........................... (703,454,020) (795,752,837) (34,137,875) (45,134,739)
-------------- -------------- -------------- --------------
Decrease in net assets derived from capital share
transactions ....................................... (73,071,713) (13,117,762) (5,290,039) (8,961,005)
-------------- -------------- -------------- --------------
Total decrease in net assets ...................... (73,090,309) (13,103,931) (5,285,657) (8,961,005)
NET ASSETS
Beginning of period ............................... 532,047,567 545,151,498 38,497,060 47,458,065
-------------- -------------- -------------- --------------
End of period ..................................... $ 458,957,258 $ 532,047,567 $ 33,211,403 $ 38,497,060
============== ============== ============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME ................. $ 67,382 $ 66,294 $ 20,727 $ 16,345
============== ============== ============== ==============
(a) Amounts distributed include a net realized short-term gain of $8,450 for
the Cash Management Trust Money Market Series for the year ended June 30,
2002.
(b) Shares of the series are sold and redeemed at Net Asset Value ($1.00).
See accompanying notes to financial statements.
8
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
INCOME FROM INVESTMENT OPERATIONS:
NET ASSET ----------------------------------------
VALUE, NET REALIZED
BEGINNING NET AND UNREALIZED TOTAL FROM
OF INVESTMENT GAIN (LOSS) ON INVESTMENT
THE PERIOD INCOME INVESTMENTS OPERATIONS
---------- ---------- -------------- ----------
CASH MANAGEMENT TRUST- MONEY MARKET SERIES
CLASS A,B,C
6/30/2003 $ 1.00 $ 0.0076 $ -- $ 0.0076
6/30/2002 1.00 0.0175 -- 0.0175
6/30/2001 1.00 0.0524 -- 0.0524
6/30/2000 1.00 0.0498 -- 0.0498
6/30/1999 1.00 0.0445 -- 0.0445
TAX EXEMPT MONEY MARKET TRUST
CLASS A,B
6/30/2003 $ 1.00 $ 0.0028 $ -- $ 0.0028
6/30/2002 1.00 0.0085 -- 0.0085
6/30/2001 1.00 0.0317 -- 0.0317
6/30/2000 1.00 0.0309 -- 0.0309
6/30/1999 1.00 0.0276 -- 0.0276
LESS DISTRIBUTIONS:
------------------------------------------------
DIVIDENDS DISTRIBUTIONS NET ASSET
FROM FROM NET VALUE, TOTAL
NET INVESTMENT REALIZED TOTAL END OF RETURN
INCOME CAPITAL GAINS DISTRIBUTIONS THE PERIOD (%)
-------------- ------------- ------------- ---------- ------
CASH MANAGEMENT TRUST- MONEY MARKET SERIES
CLASS A,B,C
6/30/2003 $ (0.0076) $ -- $ (0.0076) $ 1.00 0.8
6/30/2002 (0.0175)(a) -- (0.0175) 1.00 1.8
6/30/2001 (0.0524)(a) -- (0.0524) 1.00 5.4
6/30/2000 (0.0498)(a) -- (0.0498) 1.00 5.1
6/30/1999 (0.0445)(a) -- (0.0445) 1.00 4.6
TAX EXEMPT MONEY MARKET TRUST
CLASS A,B
6/30/2003 $ (0.0028) $ -- $ (0.0028) $ 1.00 0.3(b)
6/30/2002 (0.0085) -- (0.0085) 1.00 0.9
6/30/2001 (0.0317) -- (0.0317) 1.00 3.2(b)
6/30/2000 (0.0309)(a) -- (0.0309) 1.00 3.1(b)
6/30/1999 (0.0276) -- (0.0276) 1.00 2.8(b)
9
RATIOS TO AVERAGE NET ASSETS:
-----------------------------
NET ASSETS, EXPENSES AFTER NET
END OF EXPENSE INVESTMENT
THE PERIOD EXPENSES REDUCTIONS INCOME
(000'S) (%) (%) (%)
-------------- ------------ -------------- ----------
CASH MANAGEMENT TRUST- MONEY MARKET SERIES
CLASS A,B,C
6/30/2003 $ 458,957 0.88 0.88 0.77
6/30/2002 532,048 0.91 0.91 1.75
6/30/2001 545,151 0.84 0.84 5.27
6/30/2000 603,916 0.84 0.84 4.96
6/30/1999 664,609 0.84 0.84 4.46
TAX EXEMPT MONEY MARKET TRUST
CLASS A,B
6/30/2003 $ 33,211 1.16(c) 1.16(c)(e) 0.29
6/30/2002 38,497 1.16 1.16(d) 0.86
6/30/2001 47,458 0.86(c) 0.86(c) 3.20
6/30/2000 71,964 0.65(c) 0.65(c) 3.10
6/30/1999 84,879 0.65(c) 0.65(c) 2.76
The subadviser to the Trusts prior to June 1, 2001, was Back Bay Advisors, L.P.
Effective June 1, 2001, Reich & Tang Asset Management, LLC became the subadviser
to the Trusts.
(a) Including net realized gain (loss) on investments.
(b) Had certain expenses not been reduced during the period, total returns
would have been lower.
(c) After giving effect to an expense limitation and fee waiver.
(d) Tax Exempt Money Market Trust had Custodian fee credits totalling $304
during the year ended June 30, 2002.
(e) Tax Exempt Money Market Trust had Custodian fee credits totalling $621
during the year ended June 30, 2003.
See accompanying notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
For the Year Ended June 30, 2003
1. Organization. CDC Nvest Cash Management Trust - Money Market Series and CDC
Nvest Tax Exempt Money Market Trust (the "Trusts" and each a "Trust") are
organized as Massachusetts business trusts. Each Trust is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. Each Declaration of Trust permits the Trustees to issue an unlimited
number of shares of the Trust.
CDC Nvest Cash Management Trust - Money Market Series (the "CMT Money Market
Series") offers Class A, Class B and Class C shares. The Trust seeks maximum
current income consistent with preservation of capital and liquidity.
CDC Nvest Tax Exempt Money Market Trust (the "Tax Exempt Money Market Trust")
offers Class A and Class B shares. The Trust seeks current income exempt from
federal income taxes consistent with the preservation of principal.
Shares of the Trusts are sold without a front end sales charge. Shares acquired
by exchange of shares of another CDC Nvest stock or bond fund may be subject to
a contingent deferred sales charge.
2. Significant Accounting Policies. The following is a summary of significant
accounting policies consistently followed by each Trust in the preparation of
its financial statements. The Trusts' financial statements are prepared in
accordance with accounting principles generally accepted in the United States of
America that require the use of management estimates that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
a. Security Valuation. The Trusts employ the amortized cost method of security
valuation as set forth in Rule 2a-7 under the Investment Company Act of 1940
which, in the opinion of the Trustees of each Trust, represents the fair value
of the particular security. The amortized cost of a security is determined by
valuing it at original cost and thereafter assumes a constant
accretion/amortization to maturity of any discount/premium.
b. Repurchase Agreements. The Trusts, through their custodian, receive delivery
of the underlying securities collateralizing repurchase agreements. It is the
Trusts' policy that the market value of the collateral be at least equal to 100%
of the repurchase price including interest. The subadviser is responsible for
determining that the value of the collateral is at all times at least equal to
the repurchase price. Repurchase agreements could involve certain risks in the
event of default or insolvency of the counterparty, including possible delays or
restrictions upon the Trust's ability to dispose of the underlying security.
c. Security Transactions and Related Investment Income. Security transactions
are accounted for on trade date and interest income is recorded on an accrual
basis. In determining net gain or loss on securities sold, the cost of
securities has been determined on an identified cost basis.
d. Federal Income Taxes. Each Trust intends to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies, and to
distribute to its shareholders substantially all of its taxable and tax exempt
income. Accordingly, no provision for federal income tax has been made.
Distributions from net investment income and short-term capital gains are
treated as ordinary income for tax purposes.
e. Dividends and Distributions to Shareholders. Dividends and distributions are
declared daily to shareholders of record at the time and are paid monthly.
Long-term gain distributions, if any, will be made annually. The timing and
characterization of certain income and capital gains distributions are
determined in accordance with federal tax regulations which may differ from
accounting principles generally accepted in the United States of America. These
differences are primarily due to deferred Trustee fees.
f. Other. Each Trust invests primarily in a portfolio of money market
instruments maturing in 397 days or less whose ratings are within the two
highest rating categories of a nationally recognized rating agency or, if not
rated, are believed to be of comparable quality. The ability of the issuers of
the securities held by the Trusts to meet their obligations may be affected by
foreign, economic, political and legal developments in the case of foreign
banks, foreign branches, or subsidiaries of U.S. banks, or domestic economic
developments in a specific industry, state or region.
3. Investment Transactions. For the year ended June 30, 2003, purchases and
sales or maturities of short-term obligations (including securities purchased
subject to repurchase agreements) were as follows:
Trust Purchases Sales
- ----------------------------- ---------------- ----------------
CMT Money Market Series $ 8,396,281,205 $ 8,485,298,979
Tax Exempt Money Market Trust 72,052,811 77,267,229
11
NOTES TO FINANCIAL STATEMENTS (continued)
For the Year Ended June 30, 2003
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
a. Management Fees. CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS
Advisers") is the investment adviser to each of the Trusts. Under the terms of
the management agreements, each Trust pays a management fee at the following
annual rates, calculated daily and payable monthly, based on each Trust's
average daily net assets:
Percentage of Average Daily Net Assets
--------------------------------------------------------------------------------------------
First Next Next Next Next Over
Trust $100 million $400 million $500 million $500 million $500 million $2 billion
- ----------------------------- ------------ ------------ ------------ ------------ ------------ ------------
CMT Money Market Series 0.400% 0.400% 0.375% 0.325% 0.275% 0.225%
Tax Exempt Money Market Trust 0.400% 0.300% 0.300% 0.300% 0.300% 0.300%
For the year ended June 30, 2003, the management fees for each Trust were as
follows:
Percentage of Average
Gross Waiver of Net Daily Net Assets
Management Management Management ---------------------
Fund Fee Fee Fee Gross Net
- ----------------------------- ------------ ------------ ------------ ---------- -------
CMT Money Market Series $ 2,039,902 $ -- $ 2,039,902 0.400% 0.400%
Tax Exempt Money Market Trust 144,315 3,439 140,876 0.400% 0.400%
CDC IXIS Advisers has agreed to voluntarily waive its management fee (and, to
the extent necessary bear other expenses of each Fund) in order to preserve the
net asset value of each Fund at $1.00 per share. The expense limitations are
voluntary and temporary and may be revised or terminated at any time without
notice.
CDC IXIS Advisers has entered into separate subadvisory agreements for each
Trust with Reich & Tang Asset Management, LLC ("Reich & Tang"). Payments to CDC
IXIS Advisers are reduced by payments to the subadviser. CDC IXIS Advisers and
Reich & Tang are wholly owned subsidiaries of CDC IXIS Asset Management North
America, L.P. Certain officers and directors of CDC IXIS Advisers are also
officers or Trustees of the Trusts.
b. Accounting and Administrative Expense. CDC IXIS Asset Management Services,
Inc. ("CIS"), a wholly owned subsidiary of CDC IXIS Asset Management North
America, L.P., performs certain accounting and administrative services for the
Trusts and has subcontracted with Investors Bank & Trust Company to serve as
subadministrator. Pursuant to an agreement among the Trusts, CDC Nvest Funds
Trust I, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III, CDC Nvest
Companies Trust I and CIS, each Trust pays CIS its pro rata portion of a group
fee for these services representing the higher amount based on the following
calculations:
(1) Percentage of Eligible Average Daily Net Assets
First Next Over
$5 billion $5 billion $10 billion
---------- ---------- -----------
0.0600% 0.0500% 0.0450%
or
(2) Each Trust's pro rata portion, based on eligible assets, of the
annual aggregate minimum fee of $3.4 million.
For the year ended June 30, 2003, amounts paid to CIS for accounting and
administrative expense were as follows:
Accounting
and Percentage of Average
Trust Administrative Daily Net Assets
- ----------------------------- -------------- ---------------------
CMT Money Market Series $ 371,431 0.073%
Tax Exempt Money Market Trust 25,898 0.072%
Prior to January 1, 2003, the annual aggregate fee to average daily net assets
was 0.0350% on the first $5 billion in average daily net assets, 0.0325% on the
next $5 billion in average daily net assets, and 0.0300% on average daily net
assets over $10 billion. The annual aggregate minimum fee was $2.5 million.
12
NOTES TO FINANCIAL STATEMENTS (continued)
For the Year Ended June 30, 2003
c. Transfer Agent Fees. CIS is the transfer and shareholder servicing agent for
each Trust and has subcontracted with Boston Financial Data Services ("BFDS") to
serve as sub-transfer agent. Each Trust pays CIS service fees for servicing
shareholder accounts. Classes A, B and C pay service fees monthly representing
the higher amount based on the following calculations:
(1) Annual aggregate fee determined by applying an annual fee rate
(see schedule below) to the eligible average daily net assets.
Eligible assets are the average daily net assets of all
non-networked accounts in money market funds offered within the
CDC Nvest Family of Funds for which there are exchange privileges
among the Funds.
First Next Over
$650 million $5 billion $5.65 billion
------------ ---------- -------------
0.239% 0.200% 0.195%
Each Class of shares is subject to an annual class minimum of
$18,000.
or
(2) An allocated portion, based on eligible assets, of the annual
aggregate minimum fee of $1.4 million.
In addition, pursuant to other servicing agreements, the classes pay service
fees to other firms that provide similar services for their own shareholder
accounts.
CIS, BFDS and other firms are also reimbursed by the Trusts for out-of-pocket
expenses. For the year ended June 30, 2003, amounts paid to CIS as compensation
for its services as transfer agent were as follows:
Transfer
Agent
Trust Fee
- ----------------------------- ------------
CMT Money Market Series $ 1,330,485
Tax Exempt Money Market Trust 109,870
Effective July 1, 2003, the annual aggregate minimum fee changed to $1.1
million.
d. Trustees Fees and Expenses. Effective June 10, 2003, the Board of Trustees
approved the unification of the CDC Nvest Funds Board with the Loomis Sayles
Funds I and Loomis Sayles Funds II Boards of Trustees. The result is a combined
Board of Trustees comprised of CDC Nvest Funds Trustees and Loomis Sayles
Trustees that will jointly govern CDC Nvest Funds Trust I, II, III, CDC Nvest
Companies Trust I, CDC Nvest Cash Management Trust - Money Market Series, CDC
Nvest Tax Exempt Money Market Trust and AEW Real Estate Income Fund (the "CDC
Nvest Funds") and Loomis Sayles Funds I and Loomis Sayles Funds II (the "Loomis
Sayles Funds").
The Trusts do not pay any compensation directly to their officers or Trustees
who are directors, officers or employees of CDC IXIS Advisers, CDC IXIS Asset
Management Distributors, L.P., CDC IXIS Asset Management North America L.P., CIS
or their affiliates. Each other Trustee receives a retainer fee at the annual
rate of $45,000 and meeting attendance fees of $4,500 for each meeting of the
Board of Trustees attended. Each committee member receives an additional
retainer fee at the annual rate of $7,000 while each committee chairman receives
a retainer fee (beyond the $7,000 fee) at the annual rate of $5,000. The
retainer fees assume four Board or Committee meetings per year; Trustees are
compensated per meeting in excess of four per year, at the rate of $4,500 and
$1,750, respectively. These fees are allocated to the various CDC Nvest Funds
and Loomis Sayles Funds based on a formula that takes into account, among other
factors, the relative net assets of each Trust.
A deferred compensation plan (the "Plan") is available to the Trustees on a
voluntary basis. Each participating Trustee will receive an amount equal to the
value that such deferred compensation would have been had it been invested in
the Trusts or certain other CDC Nvest Funds on the normal payment date. Deferred
amounts remain in the Trusts until distributed in accordance with the Plan.
e. Publishing Services. CIS performs certain desktop publishing services for the
Funds. Fees for theses services are presented in the statements of operations as
shareholder reporting. For the year ended June 30, 2003, amounts paid to CIS as
compensation for these services were as follows:
Publishing
Trust Services Fee
- ----------------------------- ------------
CMT Money Market Series $ 3,789
Tax Exempt Money Market Trust 3,502
5. Concentration of Credit. At June 30, 2003, the Tax Exempt Money Market Trust
had the following concentrations by revenue source in excess of 10% of the
Trust's total net assets: Manufacturing (12.5%). The Trust also had more than
10% of its total net assets invested in tax-exempt obligations of Texas (22.9%).
13
REPORT OF INDEPENDENT AUDITORS
To the Trustees and Shareholders of CDC Nvest Cash Management Trust - Money
Market Series and CDC Nvest Tax Exempt Money Market Trust
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of CDC Nvest Cash Management Trust -
Money Market Series and CDC Nvest Tax Exempt Money Market Trust (the "Trusts")
at June 30, 2003, and the results of each of their operations, the changes in
each of their net assets and the financial highlights for the periods indicated,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trusts'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 2003 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 8, 2003
14
TRUSTEES' INFORMATION
The Funds are governed by a Board of Trustees, which is responsible for
generally overseeing the conduct of Fund business and for protecting the
interests of shareholders. The trustees meet periodically throughout the year to
oversee the Funds' activities, review contractual arrangements with companies
that provide services to the Funds and review the Funds' performance.
POSITION(s) HELD WITH NUMBER OF PORTFOLIOS IN
FUNDS, LENGTH OF TIME PRINCIPAL OCCUPATION(s) FUND COMPLEX OVERSEEN AND
NAME, AGE AND ADDRESS SERVED AND TERM OF OFFICE/1/ DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD
- --------------------------- ----------------------------- ------------------------------ ------------------------------
INDEPENDENT TRUSTEES
Graham T. Allison, Jr. (63) Trustee (2); Douglas Dillon Professor and 44;
399 Boylston Street 19 years Director for the Belfer Center Director, Taubman Centers,
Boston, MA 02116 of Science and International Inc.; Board Member, USEC
Affairs, John F. Kennedy Inc.
School of Government,
Harvard University
Edward A. Benjamin (65) Trustee (1) Director, Coal, Energy 44;
399 Boylston Street Less than 1 year Investments & Management, Director, Precision Optics
Boston, MA 02116 LLC; formerly, Partner, Corporation (optics
Ropes & Gray (law firm) manufacturer)
until 1999
Daniel M. Cain (58) Trustee, President and CEO, Cain 44;
452 Fifth Avenue Chairman (1); Brothers & Company, Trustee for Universal Health
New York, NY 10018 7 years Incorporated (investment Realty Income Trust
banking) Director, PASC
Paul G. Chenault (69) Trustee (2) Retired; Trustee, First 44;
5852 Pebble Beach Way Less than 1 year Variable Life (variable life Director, Mailco Office
San Luis Obispo, CA 93401 insurance) Products, Inc.
Kenneth J. Cowan (71) Trustee Retired 44;
399 Boylston Street Chairman (2); None
Boston, MA 02116 28 years
Richard Darman (60) Trustee (2); Partner, The Carlyle Group 44;
399 Boylston Street 7 years (investments); Chairman of Director and Chairman, AES
Boston, MA 02116 the Board of Directors of Corporation
AES Corporation
(international power company);
formerly, Professor, John F.
Kennedy School of
Government, Harvard
University
Sandra O. Moose (61) Trustee (1); Senior Vice President and 44;
One Exchange Place 21 years Director, The Boston Director, Verizon
Boston, MA 02109 Consulting Group, Inc. Communications
(management consulting) Director, Rohm and Haas
Company
John A. Shane (70) Trustee (2); President, Palmer Service 44;
200 Unicorn Park Drive 21 years Corporation (venture capital Director, Gensym
Woburn, MA 01801 organization) Corporation; Director,
Overland Data, Inc.
Director, Abt Associates
15
TRUSTEES' INFORMATION
POSITION(s) HELD WITH NUMBER OF PORTFOLIOS IN
FUNDS, LENGTH OF TIME PRINCIPAL OCCUPATION(s) FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS SERVED AND TERM OF OFFICE/1/ DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD
- --------------------------- ----------------------------- ------------------------------ ------------------------------
INDEPENDENT TRUSTEES
(continued)
Pendleton P. White (72) Trustee (2); Retired 44;
6 Breckenridge Lane 22 years None
Savannah, GA 31411
INTERESTED TRUSTEES
Robert J. Blanding/2/ (56) Trustee President, Chairman, 44;
555 California Street Less than 1 year Director, and Chief None
San Francisco, CA 94104 Executive Officer, Loomis
Sayles, Chief Executive
Officer - Loomis Sayles
Funds II; President and
CEO - Loomis Sayles Funds I
John T. Hailer/3/ (42) President and Chief President and Chief 44;
399 Boylston Street Executive Officer, Executive Officer, CDC IXIS None
Boston, MA 02116 Trustee; Asset Management
3 years Distributors, L.P.;
President - Loomis Sayles
Funds II, formerly, Senior
Vice President, Fidelity
Investments
Peter S. Voss/4/ (56) Chairman of the Board, Director, President and Chief 44;
399 Boylston Street Trustee; Executive Officer, CDC IXIS Trustee of Harris Associates
Boston, MA 02116 11 years Asset Management North Investment Trust/5/
America, L.P.
OFFICERS
Nicholas H. Palmerino (38) Treasurer; Senior Vice President, CDC 44;
399 Boylston Street Not Applicable IXIS Asset Management None
Boston, MA 02116 Services, Inc.; Senior Vice
President, CDC IXIS Asset
Management Advisers, L.P.;
formerly, Vice President,
Loomis, Sayles & Company,
L.P.
16
TRUSTEES' INFORMATION
POSITION(s) HELD WITH NUMBER OF PORTFOLIOS IN
FUNDS, LENGTH OF TIME PRINCIPAL OCCUPATION(s) FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS SERVED AND TERM OF OFFICE/1/ DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD
- --------------------------- ----------------------------- ------------------------------ ------------------------------
OFFICERS
(continued)
John E. Pelletier (39) Secretary and Clerk; Senior Vice President, 44;
399 Boylston Street Not Applicable General Counsel, Secretary None
Boston, MA 02116 and Clerk, CDC IXIS
Distribution Corporation;
Senior Vice President,
General Counsel, Secretary
and Clerk, CDC IXIS Asset
Management Distributors,
L.P.; Senior Vice President,
General Counsel, Secretary
and Clerk, CDC IXIS Asset
Management Advisers, L.P.;
Executive Vice President,
General Counsel, Secretary,
Clerk, and Director, CDC
IXIS Asset Management
Services, Inc.
(1) Member of Audit Committee.
(2) Member of Contract Review Committee and Governance Committee.
/1/ All Trustees serve until retirement, resignation or removal from the Board.
The current retirement age is 72. Mr. White is expected to retire by
December 31, 2003.
/2/ Mr. Blanding is deemed an "interested person" of CDC Nvest Funds because he
holds the following positions with affiliated persons of the Trusts:
President, Chairman, Director and Chief Executive Officer of Loomis, Sayles
& Company, L.P. ("Loomis Sayles").
/3/ Mr. Hailer is an "interested person" of CDC Nvest Funds because he holds
the following positions with affiliated persons of the Trusts: Director and
Executive Vice President of CDC IXIS Asset Management Distribution
Corporation ("CDC IXIS Distribution Corporation"); and President and Chief
Executive Officer of CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS
Advisers").
/4/ Mr. Voss is an "interested person" of CDC Nvest Funds because he holds the
following positions with affiliated persons of the Trusts: Director of CDC
IXIS Asset Management Services, Inc. ("CIS"); Director of CDC IXIS
Distribution Corporation; Director and Chairman of CDC IXIS Asset
Management Associates Inc.; Director of AEW Capital Management, Inc;
Director of Harris Associates, Inc; Director of Loomis, Sayles & Company,
Inc.; Director of Reich & Tang Asset Management Inc.; Director of Westpeak
Investment Advisors, Inc.; Director of Vaughan, Nelson, Scarborough &
McCullough, Inc.; Director, Hansberger Group, Inc.; Member, Board of
Managers, Harris Alternatives L.L.C.; and Director and Member of the
Executive Board of CDC IXIS Asset Management
/5/ As of January 30, 2003, Harris Associates Investment Trust had seven series
that were overseen by its Board of Trustees.
17
Notes
18
Notes
19
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [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.
The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation.
Item 10. Exhibits.
(a) Code of Ethics - Not applicable.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer.
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.
CDC Nvest Tax Exempt Money Market Trust
By: /s/ John T. Hailer
----------------------------
Name: John T. Hailer
Title: President
Date: August 28, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ John T. Hailer
----------------------------
Name: John T. Hailer
Title: Chief Executive Officer
Date: August 28, 2003
By: /s/ Nicholas Palmerino
----------------------------
Name: Nicholas Palmerino
Title: Treasurer
Date: August 28, 2003
EXHIBIT INDEX
(b)(1) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2 under the Investment Company Act of 1940.
(b)(2) Certification of principal executive officer and principal financial
officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.