NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
Each Portfolio may invest in financial futures contracts for the purpose of hedging their existing portfolio securities
or securities it intends to purchase against fluctuations in fair value caused by changes in prevailing market interest
rates. Upon entering into a financial futures contract, the Portfolio is required to pledge to the broker an amount
of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit).
Subsequent payments, known as 'variation margin,' are made or received by the Portfolio each day, depending
on the daily fluctuations in the fair value of the underlying security. The Portfolio recognizes a gain or loss equal to
the daily variation margin. Should market conditions move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions
involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the
underlying hedged assets.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are accounted for on the date the security is purchased or sold ('trade date'). Interest
income is recognized on the accrual basis and includes, where applicable, the amortization of premium or
discount. Realized gains and losses on investments sold are recorded on the identified cost basis. Dividend
income is recorded on the ex-dividend date.
Expenses incurred by the Republic Funds with respect to any two or more funds within the Republic Funds are
allocated in proportion to the net assets of each fund within the Republic Funds, except when allocations of direct
expenses to each Portfolio can otherwise be made fairly. Expenses directly attributable to a Portfolio are charged
to that Portfolio.
Costs incurred in connection with the organization and initial registra