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 | 811-22357 | |||||||
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BofA Funds Series Trust | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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One Hundred Federal Street, Boston, Massachusetts |
| 02110 | ||||||
(Address of principal executive offices) |
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Peter T. Fariel, Esq. BofA Advisors, LLC One Hundred Federal Street Boston, MA 02110 | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | (617) 434-5801 |
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Date of fiscal year end: | August 31 |
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Date of reporting period: | August 31, 2012 |
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Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Form N-CSR Items – period ended 08/31/12
BofA Funds Series Trust
Item 1. Reports to Stockholders.
BofATM Funds
Annual Report
August 31, 2012
BofA California Tax-Exempt Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 7 | ||||||
Statement of Operations | 9 | ||||||
Statement of Changes in Net Assets | 10 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 19 | ||||||
Report of Independent Registered Public Accounting Firm | 26 | ||||||
Federal Income Tax Information | 27 | ||||||
Fund Governance | 28 | ||||||
Important Information About This Report | 33 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA California Tax-Exempt Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.98 | 1.16 | 1.17 | 0.23 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.98 | 1.16 | 1.17 | 0.23 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.03 | 1.11 | 1.12 | 0.22 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.98 | 1.16 | 1.17 | 0.23 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.23 | 0.90 | 0.92 | 0.18 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.98 | 1.16 | 1.17 | 0.23 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA California Tax-Exempt Reserves
August 31, 2012
Municipal Bonds – 87.9%
Par ($) | Value ($) | ||||||||||
California – 85.2% | |||||||||||
CA Alameda Public Financing Authority | |||||||||||
Alameda Point Improvement, | |||||||||||
Series 2003 A, LOC: California State Teachers Retirement System 0.180% 12/01/33 (09/05/12) (a)(b) | 8,100,000 | 8,100,000 | |||||||||
CA Alameda-Contra Costa Schools Financing Authority | |||||||||||
Capital Improvement Refinancing, | |||||||||||
Series 2010 N, LOC: FHLB 0.140% 08/01/30 (09/06/12) (a)(b) | 3,815,000 | 3,815,000 | |||||||||
CA Barstow | |||||||||||
Desert Visa Apartments, | |||||||||||
Series 1991, LOC: FHLB 0.180% 12/01/20 (09/05/12) (a)(b) | 2,200,000 | 2,200,000 | |||||||||
CA BB&T Municipal Trust | |||||||||||
Series 2007-2014, | |||||||||||
LIQ FAC: Branch Banking & Trust 0.170% 09/15/32 (09/06/12) (a)(b) | 6,690,000 | 6,690,000 | |||||||||
CA Corona | |||||||||||
Country Hills Apartments, | |||||||||||
Series 1995 A, DPCE: FHLMC 0.180% 02/01/25 (09/06/12) (a)(b) | 5,515,000 | 5,515,000 | |||||||||
CA Daly City Housing Development Finance Agency | |||||||||||
Serramonte Ridge LLC, | |||||||||||
Series 1999 A, DPCE: FNMA 0.180% 10/15/29 (09/06/12) (a)(b) | 6,700,000 | 6,700,000 | |||||||||
CA Department of Water Resources | |||||||||||
Series 2010 M, | |||||||||||
3.000% 05/01/13 | 2,000,000 | 2,035,029 | |||||||||
CA Deutsche Bank Spears/Lifers Trust | |||||||||||
Alta Loma California, | |||||||||||
Series 2007, GTY AGMT: Deutsche Bank AG 0.250% 02/01/37 (09/06/12) (a)(b) | 10,000,000 | 10,000,000 |
Par ($) | Value ($) | ||||||||||
Chino Basin California Regional Financing Authority, | |||||||||||
Series 2008, GTY AGMT: Deutsche Bank AG 0.270% 04/01/48 (09/06/12) (a)(b)(c) | 3,883,000 | 3,883,000 | |||||||||
Los Angeles County Housing Authority, | |||||||||||
River Park Apartments, Series 2011, GTY AGMT: Deutsche Bank AG 0.260% 10/01/31 (09/06/12) (a)(b)(c) | 18,475,000 | 18,475,000 | |||||||||
Series 2007, | |||||||||||
Insured: FGIC, GTY AGMT: Deutsche Bank AG 0.270% 08/01/32 (09/06/12) (a)(b) | 3,505,000 | 3,505,000 | |||||||||
CA Duarte Redevelopment Agency | |||||||||||
Certificates of Participation: | |||||||||||
Johnson Duarte Partners, Series 1984 B, LOC: General Electric Capital Corp. 0.130% 12/01/19 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Piken Duarte Partners, | |||||||||||
Series 1984 A, LOC: General Electric Capital Corp. 0.130% 12/01/19 (09/06/12) (a)(b) | 7,000,000 | 7,000,000 | |||||||||
CA East Bay Municipal Utility District | |||||||||||
Series 2009 A1, | |||||||||||
0.170% 06/01/26 (09/06/12) (b)(d) | 6,885,000 | 6,885,000 | |||||||||
Series 2009 A2, | |||||||||||
0.180% 06/01/26 (09/06/12) (b)(d) | 4,935,000 | 4,935,000 | |||||||||
CA Foothill-De Anza Community College District | |||||||||||
Series 2007-1884, | |||||||||||
GTY AGMT: Wells Fargo Bank N.A. 0.170% 08/01/31 (09/06/12) (a)(b) | 9,710,000 | 9,710,000 | |||||||||
CA Fresno | |||||||||||
Multi-Family Housing, | |||||||||||
Wasatch Pool Holdings LLC, Stonepine Apartments, Series 2001 A, DPCE: FNMA 0.180% 02/15/31 (09/06/12) (a)(b) | 5,095,000 | 5,095,000 |
See Accompanying Notes to Financial Statements.
2
BofA California Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
CA Golden State Tobacco Securitization Corp. | |||||||||||
Enhanced Asset-Backed, | |||||||||||
Series 2003 B, Pre-refunded 06/01/13: 5.500% 06/01/33 | 2,780,000 | 2,888,635 | |||||||||
5.500% 06/01/43 | 1,000,000 | 1,039,084 | |||||||||
5.625% 06/01/38 | 1,095,000 | 1,138,748 | |||||||||
Series 2003 A-1, | |||||||||||
Pre-refunded 06/01/13, 6.625% 06/01/40 | 1,485,000 | 1,555,968 | |||||||||
Series 2003 A-4, | |||||||||||
Pre-refunded 06/01/13, 7.800% 06/01/42 | 1,100,000 | 1,161,868 | |||||||||
CA Health Facilities Financing Authority | |||||||||||
Scripps Health, | |||||||||||
Series 2012 B, 0.150% 10/01/42 (09/05/12) (b)(d) | 9,075,000 | 9,075,000 | |||||||||
Stanford Hospital & Clinics, | |||||||||||
Series 2008 B2: 0.170% 11/15/45 (12/05/12) (b)(d) | 7,800,000 | 7,800,000 | |||||||||
0.180% 11/15/45 (01/15/13) (b)(d) | 5,000,000 | 5,000,000 | |||||||||
CA Indio Multi-Family Housing Revenue | |||||||||||
Carreon Villa Apartments, | |||||||||||
Series 1996 A, DPCE: FNMA 0.180% 08/01/26 (09/06/12) (a)(b) | 5,650,000 | 5,650,000 | |||||||||
CA Infrastructure & Economic Development Bank | |||||||||||
Columbia College, | |||||||||||
Hollywood Project, Series 2010, LOC: Rabobank N.A. 0.150% 10/01/40 (09/06/12) (a)(b) | 5,135,000 | 5,135,000 | |||||||||
San Francisco Ballet Association, | |||||||||||
Series 2008, LOC: FHLB 0.180% 08/01/38 (09/04/12) (a)(b) | 15,600,000 | 15,600,000 | |||||||||
CA Irvine Ranch Water District | |||||||||||
Series 2011 A-1, | |||||||||||
0.160% 10/01/37 (09/06/12) (b)(d) | 10,000,000 | 10,000,000 |
Par ($) | Value ($) | ||||||||||
CA JPMorgan Chase Putters/Drivers Trust | |||||||||||
Scripps Health, | |||||||||||
Series 2012 4039, LIQ FAC: JPMorgan Chase Bank 0.180% 11/15/19 (09/06/12) (a)(b)(c) | 3,000,000 | 3,000,000 | |||||||||
California State Department of Water Resources Supply, | |||||||||||
Series 2012 4059, LIQ FAC: JPMorgan Chase Bank 0.190% 05/01/13 (09/04/12) (a)(b)(c) | 4,260,000 | 4,260,000 | |||||||||
Los Angeles CA Unified School District, | |||||||||||
Series 2012 4252, LIQ FAC: JPMorgan Chase Bank 0.190% 02/28/13 (09/04/12) (a)(b)(c) | 3,900,000 | 3,900,000 | |||||||||
CA Los Angeles County | |||||||||||
Tax & Revenue Anticipation Notes, | |||||||||||
Series 2012 C, 2.000% 06/28/13 | 8,000,000 | 8,118,072 | |||||||||
CA Los Angeles Department of Water & Power | |||||||||||
Series 2001 B1, | |||||||||||
SPA: Royal Bank of Canada 0.130% 07/01/35 (09/06/12) (a)(b) | 7,000,000 | 7,000,000 | |||||||||
CA Los Angeles Unified School District | |||||||||||
Series 2010 A, | |||||||||||
3.000% 07/01/13 | 1,000,000 | 1,022,897 | |||||||||
CA Los Angeles | |||||||||||
Tax & Revenue Anticipation Notes, | |||||||||||
Series 2012 C, 2.000% 04/25/13 | 7,000,000 | 7,081,285 | |||||||||
CA Manteca Redevelopment Agency | |||||||||||
Sub-Amended Merged Project Area, | |||||||||||
Series 2005, LOC: State Street Bank & Trust Co. 0.180% 10/01/42 (09/04/12) (a)(b) | 6,700,000 | 6,700,000 | |||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2011 A-1, | |||||||||||
0.170% 07/01/36 (09/06/12) (b)(d) | 10,000,000 | 10,000,000 | |||||||||
Series 2011 A-4, | |||||||||||
0.320% 07/01/36 (09/06/12) (b)(d) | 8,000,000 | 8,007,734 |
See Accompanying Notes to Financial Statements.
3
BofA California Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
CA Monterey Peninsula Water Management District | |||||||||||
Wastewater Reclamation Project, | |||||||||||
Series 1992, LOC: Wells Fargo Bank N.A. 0.220% 07/01/22 (09/01/12) (a)(b) | 2,390,000 | 2,390,000 | |||||||||
CA Newport Beach | |||||||||||
Hoag Memorial Hospital/Newport Health, | |||||||||||
Series 2008 E, LOC: Northern Trust Co. 0.160% 12/01/40 (09/05/12) (a)(b) | 12,500,000 | 12,500,000 | |||||||||
CA Oceanside | |||||||||||
Shadow Way Apartments LP, | |||||||||||
Series 2009, LOC: FHLMC 0.170% 03/01/49 (09/06/12) (a)(b) | 1,375,000 | 1,375,000 | |||||||||
CA Pittsburg Redevelopment Agency | |||||||||||
Los Medanos Community, | |||||||||||
Series 2004 A, LOC: State Street Bank & Trust Co., LOC: California State Teachers Retirement System 0.180% 09/01/35 (09/04/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
CA RBC Municipal Products, Inc. Trust | |||||||||||
Kaiser Permanente, | |||||||||||
Series 2011 E-21, LOC: Royal Bank of Canada 0.210% 10/01/13 (09/06/12) (a)(b)(c) | 6,000,000 | 6,000,000 | |||||||||
CA San Diego County Regional Transportation Commission | |||||||||||
Series 2008 B, | |||||||||||
SPA: JPMorgan Chase Bank 0.170% 04/01/38 (09/06/12) (a)(b) | 7,115,000 | 7,115,000 | |||||||||
CA San Diego County School Districts | |||||||||||
Tax & Revenue Anticipation Notes, | |||||||||||
Series 2012 A, Insured: Government of Participants 2.000% 06/28/13 | 2,000,000 | 2,030,017 | |||||||||
CA San Francisco City & County Redevelopment Agency | |||||||||||
Hunters Point, | |||||||||||
Series 2005 A, LOC: JPMorgan Chase Bank 0.220% 08/01/36 (09/06/12) (a)(b) | 1,500,000 | 1,500,000 |
Par ($) | Value ($) | ||||||||||
CA San Francisco City & County | |||||||||||
Certificates of Participation, | |||||||||||
Series 2007 1883, GTY AGMT: Wells Fargo Bank N.A. 0.220% 09/01/31 (09/06/12) (a)(b) | 13,420,000 | 13,420,000 | |||||||||
CA San Mateo Joint Powers Financing Authority | |||||||||||
Public Safety Project, | |||||||||||
Series 2007 A, LOC: Wells Fargo Bank N.A. 0.190% 04/01/39 (09/06/12) (a)(b) | 15,565,000 | 15,565,000 | |||||||||
CA San Rafael Redevelopment Authority | |||||||||||
Sanraf Associates, | |||||||||||
Series 2001 A, AMT, LOC: Citibank N.A. 0.280% 12/01/31 (09/05/12) (a)(b) | 1,500,000 | 1,500,000 | |||||||||
CA School Cash Reserve Program Authority | |||||||||||
Series 2012 L, | |||||||||||
2.000% 06/03/13 | 8,200,000 | 8,308,321 | |||||||||
CA Statewide Communities Development Authority | |||||||||||
Gas Supply Revenue, | |||||||||||
Series 2010, SPA: Royal Bank of Canada 0.170% 11/01/40 (09/06/12) (a)(b) | 19,715,000 | 19,715,000 | |||||||||
John Muir Health, | |||||||||||
Series 2008 C, LOC: Wells Fargo Bank N.A. 0.170% 08/15/27 (09/04/12) (a)(b) | 1,465,000 | 1,465,000 | |||||||||
Kaiser Credit Group, | |||||||||||
Kaiser Permanente: Series 2009 A, 5.000% 04/01/13 | 2,580,000 | 2,650,122 | |||||||||
Series 2009 C2, 0.160% 04/01/46 (09/05/12) (b)(d) | 7,145,000 | 7,145,000 | |||||||||
Kaiser Permanente: | |||||||||||
0.230% 09/12/12 | 1,500,000 | 1,500,000 | |||||||||
0.240% 02/14/13 | 14,200,000 | 14,200,000 | |||||||||
0.240% 05/07/13 | 5,000,000 | 5,000,000 | |||||||||
0.250% 11/08/12 | 10,000,000 | 10,000,000 | |||||||||
Los Angeles County Museum of Art, | |||||||||||
Series 2008, LOC: Union Bank N.A. 0.150% 12/01/37 (09/05/12) (a)(b) | 13,040,000 | 13,040,000 |
See Accompanying Notes to Financial Statements.
4
BofA California Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Plan Nine Partners LLC, | |||||||||||
Series 2005 A, LOC: Union Bank N.A. 0.200% 02/01/35 (09/06/12) (a)(b) | 8,115,000 | 8,115,000 | |||||||||
CA State | |||||||||||
Revenue Anticipation Notes: | |||||||||||
Series 2012 A-1, 2.500% 05/30/13 | 2,500,000 | 2,540,166 | |||||||||
Series 2012 A-2, 2.500% 06/20/13 | 13,500,000 | 13,726,407 | |||||||||
Series 2012 A-2, | |||||||||||
Guarantor: Royal Bank of Canada 0.180% 10/03/12 | 13,800,000 | 13,800,000 | |||||||||
CA Sunnyvale | |||||||||||
Government Center Site, | |||||||||||
Series 2009 A, LOC: Union Bank N.A. 0.160% 04/01/31 (09/06/12) (a)(b) | 9,085,000 | 9,085,000 | |||||||||
CA Tahoe Forest Hospital District | |||||||||||
Health Facilities, | |||||||||||
Series 2002, LOC: U.S. Bank N.A. 0.180% 07/01/33 (09/04/12) (a)(b) | 3,655,000 | 3,655,000 | |||||||||
California Total | 442,017,353 | ||||||||||
Louisiana – 0.4% | |||||||||||
LA Municipal Gas Authority | |||||||||||
Putters, | |||||||||||
Series 2006 1411Q, LOC: JPMorgan Chase Bank 0.300% 08/01/16 (09/04/12) (a)(b) | 2,045,000 | 2,045,000 | |||||||||
Louisiana Total | 2,045,000 | ||||||||||
New Jersey – 2.3% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 1992, | |||||||||||
LOC: BNP Paribas 0.600% 09/04/12 | 11,710,000 | 11,710,000 | |||||||||
New Jersey Total | 11,710,000 | ||||||||||
Total Municipal Bonds (cost of $455,772,353) | 455,772,353 |
Closed-End Investment Companies – 12.1%
Par ($) | Value ($) | ||||||||||
California – 12.1% | |||||||||||
CA Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2010, | |||||||||||
LIQ FAC: Deutsche Bank AG 0.310% 03/01/40 (09/06/12) (a)(b)(c) | 16,200,000 | 16,200,000 | |||||||||
CA Nuveen Investment Quality Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.270% 12/01/40 (09/06/12) (a)(b)(c) | 11,600,000 | 11,600,000 | |||||||||
CA Nuveen Performance Plus Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.270% 12/01/40 (09/06/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
CA Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.270% 08/01/40 (09/06/12) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
CA Nuveen Select Quality Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.270% 08/01/40 (09/06/12) (a)(b)(c) | 15,000,000 | 15,000,000 | |||||||||
California Total | 62,800,000 | ||||||||||
Total Closed-End Investment Companies (cost of $62,800,000) | 62,800,000 | ||||||||||
Total Investments – 100.0% (cost of $518,572,353) (e) | 518,572,353 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 243,923 | ||||||||||
Net Assets – 100.0% | 518,816,276 |
Notes to Investment Portfolio:
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(b) Parenthetical date represents the effective maturity date for the security.
(c) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $92,318,000 or 17.8% of net assets for the Fund.
See Accompanying Notes to Financial Statements.
5
BofA California Tax-Exempt Reserves
August 31, 2012
(d) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(e) Cost for federal income tax purposes is $518,572,353.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Municipal Bonds | $ | — | $ | 455,772,353 | $ | — | $ | 455,772,353 | |||||||||||
Total Closed-End Investment Companies | — | 62,800,000 | — | 62,800,000 | |||||||||||||||
Total Investments | $ | — | $ | 518,572,353 | $ | — | $ | 518,572,353 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 87.9 | ||||||
Closed-End Investment Companies | 12.1 | ||||||
100.0 | |||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FGIC | Financial Guaranty Insurance Co. | ||||||
FHLB | Federal Home Loan Bank | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities – BofA California Tax-Exempt Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 518,572,353 | |||||||||
Cash | 3,559 | ||||||||||
Receivable for: | |||||||||||
Interest | 397,767 | ||||||||||
Expense reimbursement due from investment advisor | 14,957 | ||||||||||
Prepaid expenses | 8,232 | ||||||||||
Total Assets | 518,996,868 | ||||||||||
Liabilities | Payable for: | ||||||||||
Distributions | 67 | ||||||||||
Investment advisory fee | 60,117 | ||||||||||
Administration fee | 7,977 | ||||||||||
Pricing and bookkeeping fees | 12,780 | ||||||||||
Transfer agent fee | 3,119 | ||||||||||
Trustees' fees | 2,807 | ||||||||||
Audit fee | 43,550 | ||||||||||
Legal fee | 31,761 | ||||||||||
Custody fee | 2,419 | ||||||||||
Chief compliance officer expenses | 1,381 | ||||||||||
Other liabilities | 14,614 | ||||||||||
Total Liabilities | 180,592 | ||||||||||
Net Assets | 518,816,276 | ||||||||||
Net Assets Consist of | Paid-in capital | 519,561,342 | |||||||||
Undistributed net investment income | 25,186 | ||||||||||
Accumulated net realized loss | (770,252 | ) | |||||||||
Net Assets | 518,816,276 |
See Accompanying Notes to Financial Statements.
7
Statement of Assets and Liabilities (continued) – BofA California Tax-Exempt Reserves
August 31, 2012
Adviser Class Shares | Net assets | $ | 43,603,106 | ||||||||
Shares outstanding | 43,639,518 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 75,981,418 | ||||||||
Shares outstanding | 76,046,119 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 17,085,828 | ||||||||
Shares outstanding | 17,100,010 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 686,485 | ||||||||
Shares outstanding | 687,053 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 9,006,993 | ||||||||
Shares outstanding | 9,013,898 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 1,135 | ||||||||
Shares outstanding | 1,136 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 372,451,311 | ||||||||
Shares outstanding | 372,758,220 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
8
Statement of Operations – BofA California Tax-Exempt Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 1,299,436 | |||||||||
Expenses | Investment advisory fee | 870,016 | |||||||||
Administration fee | 455,983 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 81,341 | ||||||||||
Investor Class Shares | 6,783 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 128,324 | ||||||||||
Daily Class Shares | 58,101 | ||||||||||
Investor Class Shares | 16,957 | ||||||||||
Liquidity Class Shares | 127 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 12,578 | ||||||||||
Trust Class Shares | 372,154 | ||||||||||
Transfer agent fee | 26,015 | ||||||||||
Pricing and bookkeeping fees | 143,789 | ||||||||||
Trustees' fees | 54,591 | ||||||||||
Custody fee | 16,833 | ||||||||||
Legal fees | 139,750 | �� | |||||||||
Chief compliance officer expenses | 7,496 | ||||||||||
Other expenses | 120,945 | ||||||||||
Total Expenses | 2,511,783 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (693,438 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (113,806 | ) | |||||||||
Daily Class Shares | (132,931 | ) | |||||||||
Institutional Class Shares | (5,599 | ) | |||||||||
Investor Class Shares | (21,829 | ) | |||||||||
Liquidity Class Shares | (120 | ) | |||||||||
Trust Class Shares | (271,768 | ) | |||||||||
Expense reductions | (15 | ) | |||||||||
Net Expenses | 1,272,277 | ||||||||||
Net Investment Income | 27,159 | ||||||||||
Net realized gain on investments | 2,527 | ||||||||||
Net Increase Resulting from Operations | 29,686 |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets – BofA California Tax-Exempt Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2012 ($) | 2011 ($) | |||||||||||||
Operations | Net investment income | 27,159 | 407,106 | ||||||||||||
Net realized gain on investments | 2,527 | 247,561 | |||||||||||||
Net increase resulting from operations | 29,686 | 654,667 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (25,320 | ) | (26,508 | ) | |||||||||||
Capital Class Shares | (79,285 | ) | (244,260 | ) | |||||||||||
Daily Class Shares | (11,577 | ) | (15,543 | ) | |||||||||||
Institutional Class Shares | (28,963 | ) | (186,946 | ) | |||||||||||
Investor Class Shares | (2,937 | ) | (1,174 | ) | |||||||||||
Liquidity Class Shares | (1 | ) | (232 | ) | |||||||||||
Trust Class Shares | (192,187 | ) | (180,826 | ) | |||||||||||
Total distributions to shareholders | (340,270 | ) | (655,489 | ) | |||||||||||
Net Capital Stock Transactions | (195,378,152 | ) | (552,730,094 | ) | |||||||||||
Total decrease in net assets | (195,688,736 | ) | (552,730,916 | ) | |||||||||||
Net Assets | Beginning of period | 714,505,012 | 1,267,235,928 | ||||||||||||
End of period | 518,816,276 | 714,505,012 | |||||||||||||
Undistributed net investment income at end of period | 25,186 | 367,942 |
See Accompanying Notes to Financial Statements.
10
Statement of Changes in Net Assets (continued) – BofA California Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 57,721 | 57,721 | 76,814,563 | 76,814,563 | |||||||||||||||
Distributions reinvested | 15,569 | 15,569 | 13,733 | 13,733 | |||||||||||||||
Redemptions | (19,379,937 | ) | (19,379,937 | ) | (231,745,298 | ) | (231,745,298 | ) | |||||||||||
Net decrease | (19,306,647 | ) | (19,306,647 | ) | (154,917,002 | ) | (154,917,002 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 222,598,992 | 222,598,992 | 577,634,398 | 577,634,398 | |||||||||||||||
Distributions reinvested | 6,553 | 6,553 | 141,199 | 141,199 | |||||||||||||||
Redemptions | (263,810,459 | ) | (263,810,459 | ) | (654,532,431 | ) | (654,532,431 | ) | |||||||||||
Net decrease | (41,204,914 | ) | (41,204,914 | ) | (76,756,834 | ) | (76,756,834 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 460,574 | 460,574 | 60,893,921 | 60,893,921 | |||||||||||||||
Redemptions | (18,933,195 | ) | (18,933,195 | ) | (298,540,500 | ) | (298,540,500 | ) | |||||||||||
Net decrease | (18,472,621 | ) | (18,472,621 | ) | (237,646,579 | ) | (237,646,579 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 29,282 | 29,282 | 58,202,197 | 58,202,197 | |||||||||||||||
Distributions reinvested | 46 | 46 | 3,448 | 3,448 | |||||||||||||||
Redemptions | (109,860,589 | ) | (109,860,589 | ) | (213,049,233 | ) | (213,049,233 | ) | |||||||||||
Net decrease | (109,831,261 | ) | (109,831,261 | ) | (154,843,588 | ) | (154,843,588 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 30,460,317 | 30,460,317 | 10,323,278 | 10,323,278 | |||||||||||||||
Distributions reinvested | 1,847 | 1,847 | 1,143 | 1,143 | |||||||||||||||
Redemptions | (27,650,622 | ) | (27,650,622 | ) | (9,300,828 | ) | (9,300,828 | ) | |||||||||||
Net increase | 2,811,542 | 2,811,542 | 1,023,593 | 1,023,593 | |||||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | — | — | 700,000 | 700,000 | |||||||||||||||
Distributions reinvested | — | — | 232 | 232 | |||||||||||||||
Redemptions | (699,999 | ) | (699,999 | ) | — | — | |||||||||||||
Net increase (decrease) | (699,999 | ) | (699,999 | ) | 700,232 | 700,232 | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 641,315,221 | 641,315,221 | 530,074,562 | 530,074,563 | |||||||||||||||
Distributions reinvested | 3,055 | 3,055 | 3,913 | 3,913 | |||||||||||||||
Redemptions | (649,992,528 | ) | (649,992,528 | ) | (460,368,392 | ) | (460,368,392 | ) | |||||||||||
Net increase (decrease) | (8,674,252 | ) | (8,674,252 | ) | 69,710,083 | 69,710,084 |
See Accompanying Notes to Financial Statements.
11
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | — | (e) | 0.0076 | 0.0217 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0076 | ) | (0.0217 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.05 | % | 0.03 | % | 0.00 | %(h) | 0.76 | % | 2.20 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.23 | % | 0.32 | % | 0.35 | % | 0.48 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.34 | % | 0.23 | % | 0.18 | % | 0.06 | % | 0.05 | % | |||||||||||||
Net investment income (i) | — | — | %(h) | — | %(h) | 0.88 | % | 2.09 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 43,603 | $ | 62,936 | $ | 217,843 | $ | 309,195 | $ | 674,000 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia California Tax-Exempt Reserves was renamed BofA California Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia California Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia California Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | 0.001 | 0.0014 | 0.0100 | 0.0242 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.0014 | ) | (0.0100 | ) | (0.0242 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.08 | % | 0.14 | % | 0.14 | % | 1.00 | % | 2.45 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.20 | % | 0.20 | % | 0.20 | % | 0.24 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.12 | % | 0.10 | % | 0.08 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (g) | 0.03 | % | 0.11 | % | 0.14 | % | 1.13 | % | 2.37 | % | |||||||||||||
Net assets, end of period (000s) | $ | 75,981 | $ | 117,232 | $ | 193,989 | $ | 366,450 | $ | 857,425 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia California Tax-Exempt Reserves was renamed BofA California Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia California Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia California Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | — | 0.0054 | 0.0182 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (0.0054 | ) | (0.0182 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.05 | % | 0.03 | % | 0.00 | % | 0.54 | % | 1.84 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.23 | % | 0.32 | % | 0.35 | % | 0.73 | % | 0.80 | % | |||||||||||||
Waiver/Reimbursement | 0.69 | % | 0.58 | % | 0.53 | % | 0.16 | % | 0.05 | % | |||||||||||||
Net investment income (g) | — | — | %(h) | — | 0.62 | % | 1.76 | % | |||||||||||||||
Net assets, end of period (000s) | $ | 17,086 | $ | 35,567 | $ | 273,194 | $ | 1,045,609 | $ | 1,772,303 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia California Tax-Exempt Reserves was renamed BofA California Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia California Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia California Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
14
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | 0.001 | 0.0010 | 0.0096 | 0.0238 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.0010 | ) | (0.0096 | ) | (0.0238 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.05 | % | 0.11 | % | 0.10 | % | 0.96 | % | 2.41 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.22 | % | 0.23 | % | 0.24 | % | 0.28 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.13 | % | 0.11 | % | 0.08 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (g) | — | %(h) | 0.08 | % | 0.10 | % | 1.04 | % | 2.28 | % | |||||||||||||
Net assets, end of period (000s) | $ | 686 | $ | 110,499 | $ | 265,338 | $ | 447,721 | $ | 942,240 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia California Tax-Exempt Reserves was renamed BofA California Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia California Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia California Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | — | 0.0068 | 0.0207 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (0.0068 | ) | (0.0207 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.05 | % | 0.03 | % | 0.00 | % | 0.68 | % | 2.09 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.22 | % | 0.30 | % | 0.35 | % | 0.56 | % | 0.55 | % | |||||||||||||
Waiver/Reimbursement | 0.44 | % | 0.35 | % | 0.28 | % | 0.08 | % | 0.05 | % | |||||||||||||
Net investment income (g) | — | — | %(h) | — | 0.77 | % | 2.08 | % | |||||||||||||||
Net assets, end of period (000s) | $ | 9,007 | $ | 6,201 | $ | 5,178 | $ | 188,904 | $ | 262,145 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia California Tax-Exempt Reserves was renamed BofA California Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia California Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia California Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA California Tax-Exempt Reserves
Selected date for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | 0.0002 | 0.0085 | 0.0227 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | (0.0002 | ) | (0.0085 | ) | (0.0227 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.04 | % | 0.03 | % | 0.01 | % | 0.85 | %(g) | 2.30 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.21 | % | 0.28 | % | 0.33 | % | 0.39 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.35 | % | 0.27 | % | 0.20 | % | 0.15 | % | 0.15 | % | |||||||||||||
Net investment income (h) | — | — | %(i) | 0.02 | % | 1.79 | %(g) | 2.41 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 1 | $ | 701 | $ | 1 | $ | 478 | $ | 33,242 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia California Tax-Exempt Reserves was renamed BofA California Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia California Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia California Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | 0.001 | 0.0005 | 0.0090 | 0.0232 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | (0.001 | ) | (0.0005 | ) | (0.0090 | ) | (0.0232 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.05 | % | 0.06 | % | 0.05 | % | 0.90 | % | 2.35 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.22 | % | 0.28 | % | 0.30 | % | 0.34 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.12 | % | 0.08 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (g) | — | %(h) | 0.02 | % | 0.05 | % | 0.96 | % | 2.23 | % | |||||||||||||
Net assets, end of period (000s) | $ | 372,451 | $ | 381,369 | $ | 311,692 | $ | 585,899 | $ | 761,991 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia California Tax-Exempt Reserves was renamed BofA California Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia California Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia California Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
18
Notes to Financial Statements – BofA California Tax-Exempt Reserves
August 31, 2012
Note 1. Organization
BofA California Tax-Exempt Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a non-diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income exempt from federal income tax and California individual income tax, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares and the Fund offers seven classes of shares: Adviser Class, Capital Class, Daily Class, Institutional Class, Investor Class, Liquidity Class, and Trust Class shares. Each class of shares is offered continuously at net asset value.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain
conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based
19
BofA California Tax-Exempt Reserves, August 31, 2012
upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the
fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from differing treatments for prior year undistributed tax-exempt income were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Loss | Paid-In Capital | |||||||||
$ | (29,645 | ) | $ | — | $ | 29,645 |
20
BofA California Tax-Exempt Reserves, August 31, 2012
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from | 2012 | 2011 | |||||||||
Tax-Exempt Income | $ | 337,696 | $ | 655,489 | |||||||
Ordinary Income* | 2,574 | — |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | 25,223 | $ | 30 | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
As of August 31, 2012, the Fund had pre-Act capital loss carryforwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carry Forwards | ||||||
2018 | $ | 770,252 |
Capital loss carry forwards of $2,527 were utilized by the Fund during the year ended August 31, 2012.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA Advisors, LLC ("BofA"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
21
BofA California Tax-Exempt Reserves, August 31, 2012
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted distribution plans ("Distribution Plans") for the Daily Class, Investor Class and Liquidity Class shares of the Fund. The Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class, Daily Class, Investor Class and Liquidity Class shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
22
BofA California Tax-Exempt Reserves, August 31, 2012
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Daily Class Shares | 0.35 | % | 0.35 | % | |||||||
Investor Class Shares | 0.10 | %` | 0.10 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Servicing Plans: | |||||||||||
Adviser Class Shares | 0.25 | % | 0.25 | % | |||||||
Daily Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** |
* The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012.
** To the extent that the Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012, so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense limitation in effect at the time the expenses to be recovered were incurred.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
23
BofA California Tax-Exempt Reserves, August 31, 2012
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 08/31/2012 | |||||||||||||||
$ | 674,674 | $ | 898,418 | $ | 1,486,821 | $ | 3,059,913 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $15 for the Fund.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
24
BofA California Tax-Exempt Reserves, August 31, 2012
Note 7. Shareholder Concentration
Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 8. Significant Risks and Contingencies
Non-Diversification Risk
The Fund is non-diversified, which generally means that it may invest a greater percentage of the total assets in the securities of fewer issuers than a "diversified" fund. This increases the risk that a change in the value of any one investment held by a Fund could affect the value of shares of the Fund more than it would affect the value of shares of a diversified fund holding a greater number of investments. Accordingly, the Fund's value will likely be more volitile than the value of more diversified funds. The Fund may not operate as a non-diversified fund at all times.
Geographic Concentration Risk
The Fund invests primarily in debt obligations issued by the State of California, and its political subdivisions, agencies and public authorities, and other qualified issuers that may be located outside of California. The Fund is more susceptible to economic and political factors adversely affecting issuers of this state's municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms
of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
25
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA California Tax-Exempt Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA California Tax-Exempt Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
26
Federal Income Tax Information (Unaudited) – BofA California Tax-Exempt Reserves
For the fiscal year ended August 31, 2012, 99.24% of the distributions from net investment income of the Fund qualifies as exempt interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
27
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
28
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
29
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
30
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA California Tax-Exempt Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
33
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA California Tax-Exempt Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-CATE-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA Cash Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 13 | ||||||
Statement of Operations | 15 | ||||||
Statement of Changes in Net Assets | 16 | ||||||
Financial Highlights | 19 | ||||||
Notes to Financial Statements | 29 | ||||||
Report of Independent Registered Public Accounting Firm | 37 | ||||||
Federal Income Tax Information | 38 | ||||||
Fund Governance | 39 | ||||||
Important Information About This Report | 45 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Cash Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
n For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
n For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.23 | 1.91 | 1.93 | 0.38 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.90 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.23 | 1.91 | 1.93 | 0.38 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.90 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.70 | 1,023.93 | 1.21 | 1.22 | 0.24 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.23 | 1.91 | 1.93 | 0.38 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.23 | 1.91 | 1.93 | 0.38 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,023.38 | 1.76 | 1.78 | 0.35 | ||||||||||||||||||||||||
Marsico Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.23 | 1.91 | 1.93 | 0.38 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.40 | 1,023.63 | 1.51 | 1.53 | 0.30 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA Cash Reserves
August 31, 2012
Commercial Paper – 24.1%
Par ($) | Value ($) | ||||||||||
ANZ National International Ltd. | |||||||||||
0.340% 02/22/13 (a)(b) | 23,700,000 | 23,661,053 | |||||||||
0.360% 11/05/12 (a)(b) | 42,785,000 | 42,757,190 | |||||||||
0.360% 01/25/13 (a)(b) | 155,000,000 | 154,773,700 | |||||||||
0.380% 01/18/13 (a)(b) | 89,000,000 | 88,869,417 | |||||||||
0.394% 12/07/12 (09/07/12) (b)(c)(d) | 42,350,000 | 42,350,000 | |||||||||
0.420% 01/14/13 (a)(b) | 42,950,000 | 42,882,354 | |||||||||
0.440% 01/11/13 (a)(b) | 80,200,000 | 80,070,611 | |||||||||
ASB Finance Ltd. | |||||||||||
0.345% 12/03/12 (09/04/12) (b)(c)(d) | 43,800,000 | 43,800,000 | |||||||||
0.380% 01/28/13 (a)(b) | 100,000,000 | 99,842,722 | |||||||||
0.480% 09/27/12 (a)(b) | 18,865,000 | 18,858,460 | |||||||||
Australia & New Zealand Banking Group Ltd. | |||||||||||
0.295% 11/27/12 (09/28/12) (b)(c)(d) | 50,300,000 | 50,300,000 | |||||||||
BNZ International Funding Ltd. | |||||||||||
0.349% 11/16/12 (09/17/12) (b)(c)(d) | 43,740,000 | 43,740,000 | |||||||||
0.460% 01/03/13 (a)(b) | 6,115,000 | 6,105,311 | |||||||||
0.470% 01/03/13 (a)(b) | 100,000,000 | 99,838,111 | |||||||||
Commonwealth Bank of Australia | |||||||||||
0.287% 10/18/12 (09/18/12) (b)(c)(d) | 7,000,000 | 7,000,000 | |||||||||
0.380% 01/14/13 (a)(b) | 30,000,000 | 29,957,250 | |||||||||
DnB Norbank ASA | |||||||||||
0.310% 09/06/12 (a)(b) | 99,700,000 | 99,695,707 | |||||||||
0.310% 09/10/12 (a)(b) | 67,000,000 | 66,994,808 | |||||||||
0.370% 09/17/12 (a)(b) | 32,125,000 | 32,119,717 | |||||||||
Erste Abwicklungsanstalt | |||||||||||
0.370% 09/11/12 (a)(b) | 21,988,000 | 21,985,740 | |||||||||
0.370% 09/13/12 (a)(b) | 8,795,000 | 8,793,915 | |||||||||
0.370% 09/20/12 (a)(b) | 10,994,000 | 10,991,853 | |||||||||
0.420% 01/23/13 (a)(b) | 8,430,000 | 8,415,838 | |||||||||
0.440% 09/25/12 (a)(b) | 29,990,000 | 29,981,203 | |||||||||
0.500% 09/24/12 (a)(b) | 52,255,000 | 52,238,307 | |||||||||
0.500% 01/10/13 (a)(b) | 20,000,000 | 19,963,611 | |||||||||
0.520% 11/09/12 (a)(b) | 56,250,000 | 56,193,937 | |||||||||
0.520% 11/16/12 (a)(b) | 22,165,000 | 22,140,668 | |||||||||
0.580% 09/26/12 (a)(b) | 70,000,000 | 69,971,806 | |||||||||
0.580% 10/19/12 (a)(b) | 24,000,000 | 23,981,440 | |||||||||
0.600% 10/05/12 (a)(b) | 45,000,000 | 44,974,500 | |||||||||
0.600% 10/09/12 (a)(b) | 129,000,000 | 128,918,300 | |||||||||
General Electric Capital Corp. | |||||||||||
0.280% 09/28/12 (a) | 50,000,000 | 49,989,500 | |||||||||
0.310% 02/27/13 (a) | 50,000,000 | 49,922,931 | |||||||||
0.330% 02/26/13 (a) | 75,000,000 | 74,877,625 |
Par ($) | Value ($) | ||||||||||
0.330% 03/05/13 (a) | 94,000,000 | 93,840,592 | |||||||||
0.330% 03/15/13 (a) | 92,090,000 | 91,925,389 | |||||||||
0.340% 02/14/13 (a) | 89,800,000 | 89,659,214 | |||||||||
0.340% 03/27/13 (a) | 92,900,000 | 92,718,380 | |||||||||
HSBC Bank PLC | |||||||||||
0.410% 01/18/13 (a)(b) | 100,000,000 | 99,841,694 | |||||||||
0.410% 01/22/13 (a)(b) | 65,025,000 | 64,919,100 | |||||||||
JPMorgan Chase & Co. | |||||||||||
0.280% 11/01/12 (a) | 107,500,000 | 107,448,997 | |||||||||
Nationwide Building Society | |||||||||||
0.440% 09/25/12 (a)(b) | 23,000,000 | 22,993,253 | |||||||||
0.530% 10/22/12 (a)(b) | 86,650,000 | 86,584,940 | |||||||||
Nestle Finance International Ltd. | |||||||||||
0.310% 12/17/12 (a) | 29,870,000 | 29,842,478 | |||||||||
Prudential PLC | |||||||||||
0.360% 09/05/12 (a)(b) | 30,000,000 | 29,998,800 | |||||||||
0.380% 10/17/12 (a)(b) | 31,375,000 | 31,359,766 | |||||||||
Svenska Handelsbanken, Inc. | |||||||||||
0.350% 03/04/13 (a)(b) | 50,000,000 | 49,910,556 | |||||||||
Swedbank | |||||||||||
0.310% 12/03/12 (a) | 95,000,000 | 94,923,921 | |||||||||
Westpac Securities NZ Ltd. | |||||||||||
0.460% 01/02/13 (a)(b) | 14,000,000 | 13,977,997 | |||||||||
Total Commercial Paper (cost of $2,746,902,662) | 2,746,902,662 | ||||||||||
Certificates of Deposit – 21.1% | |||||||||||
Bank of Montreal | |||||||||||
0.300% 02/26/13 | 25,000,000 | 25,000,000 | |||||||||
Bank of Nova Scotia/Houston | |||||||||||
0.320% 10/18/12 | 50,000,000 | 50,000,000 | |||||||||
0.326% 12/27/12 (09/26/12) (c)(d) | 109,200,000 | 109,200,000 | |||||||||
0.327% 12/19/12 (09/19/12) (c)(d) | 40,130,000 | 40,130,000 | |||||||||
0.327% 12/20/12 (09/20/12) (c)(d) | 41,240,000 | 41,240,000 | |||||||||
0.750% 10/15/12 | 3,160,000 | 3,161,512 | |||||||||
0.755% 10/18/12 | 6,345,000 | 6,348,180 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd./NY | |||||||||||
0.330% 11/27/12 | 19,000,000 | 19,000,000 | |||||||||
0.340% 11/08/12 | 53,000,000 | 53,000,000 | |||||||||
0.340% 11/15/12 | 150,000,000 | 150,000,000 | |||||||||
0.340% 11/19/12 | 111,000,000 | 111,000,000 | |||||||||
Barclays Bank PLC/NY | |||||||||||
0.360% 11/29/12 | 100,000,000 | 100,000,000 |
See Accompanying Notes to Financial Statements.
2
BofA Cash Reserves
August 31, 2012
Certificates of Deposit (continued)
Par ($) | Value ($) | ||||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA/NY | |||||||||||
0.520% 10/12/12 | 43,085,000 | 43,085,000 | |||||||||
0.537% 11/09/12 | 14,725,000 | 14,726,962 | |||||||||
National Australia Bank Ltd. | |||||||||||
0.350% 01/18/13 | 53,000,000 | 53,000,000 | |||||||||
0.365% 01/25/13 | 38,000,000 | 38,000,769 | |||||||||
0.380% 01/11/13 | 20,000,000 | 20,000,000 | |||||||||
0.380% 01/15/13 | 60,425,000 | 60,425,000 | |||||||||
Nordea Bank Finland/NY | |||||||||||
0.350% 02/13/13 | 100,430,000 | 100,430,000 | |||||||||
0.350% 02/28/13 | 60,000,000 | 60,000,000 | |||||||||
0.360% 02/19/13 | 50,000,000 | 50,000,000 | |||||||||
0.360% 02/21/13 | 50,500,000 | 50,497,578 | |||||||||
0.400% 01/18/13 | 150,000,000 | 150,000,000 | |||||||||
Skandinaviska Enskilda Banken/NY | |||||||||||
0.340% 11/30/12 | 120,300,000 | 120,312,012 | |||||||||
0.440% 10/01/12 | 206,730,000 | 206,729,999 | |||||||||
0.450% 12/05/12 | 19,000,000 | 19,005,504 | |||||||||
Sumitomo Mitsui Banking Corp./NY | |||||||||||
0.320% 11/09/12 | 41,635,000 | 41,635,000 | |||||||||
0.320% 11/20/12 | 100,000,000 | 100,000,000 | |||||||||
0.320% 11/21/12 | 30,700,000 | 30,700,000 | |||||||||
0.320% 11/23/12 | 25,000,000 | 25,000,000 | |||||||||
0.320% 11/26/12 | 125,200,000 | 125,200,000 | |||||||||
0.320% 11/27/12 | 11,000,000 | 11,000,000 | |||||||||
Svenska Handelsbanken/NY | |||||||||||
0.355% 11/09/12 | 105,000,000 | 105,001,005 | |||||||||
0.550% 09/06/12 | 91,800,000 | 91,800,000 | |||||||||
0.570% 09/04/12 | 45,500,000 | 45,500,000 | |||||||||
Toronto-Dominion Bank/NY | |||||||||||
0.345% 11/05/12 (09/04/12) (c)(d) | 30,775,000 | 30,779,013 | |||||||||
UBS AG/Stamford | |||||||||||
0.250% 12/07/12 | 100,000,000 | 100,000,000 | |||||||||
Total Certificates of Deposit (cost of $2,400,907,534) | 2,400,907,534 | ||||||||||
Asset-Backed Commercial Paper (a) – 14.8% | |||||||||||
FCAR Owner Trust | |||||||||||
0.280% 10/01/12 | 117,662,000 | 117,634,546 | |||||||||
0.280% 11/14/12 | 28,765,000 | 28,748,444 | |||||||||
0.350% 09/04/12 | 18,745,000 | 18,744,453 | |||||||||
0.410% 02/04/13 | 46,940,000 | 46,856,603 | |||||||||
0.450% 10/01/12 | 96,750,000 | 96,713,719 | |||||||||
0.450% 01/02/13 | 90,135,000 | 89,996,417 | |||||||||
0.500% 09/04/12 | 9,000,000 | 8,999,625 |
Par ($) | Value ($) | ||||||||||
Gotham Funding Corp. | |||||||||||
0.280% 11/26/12 (b) | 25,000,000 | 24,983,278 | |||||||||
0.280% 11/28/12 (b) | 32,700,000 | 32,677,619 | |||||||||
0.280% 11/29/12 (b) | 90,000,000 | 89,937,700 | |||||||||
0.280% 12/03/12 (b) | 80,000,000 | 79,942,133 | |||||||||
Kells Funding LLC | |||||||||||
0.400% 09/04/12 (b) | 14,834,000 | 14,833,506 | |||||||||
0.410% 10/02/12 (b) | 24,117,000 | 24,108,485 | |||||||||
0.430% 09/04/12 (b) | 83,240,000 | 83,237,017 | |||||||||
0.430% 10/17/12 (b) | 42,312,000 | 42,288,752 | |||||||||
0.450% 10/05/12 (b) | 21,607,000 | 21,597,817 | |||||||||
0.450% 10/17/12 (b) | 61,904,000 | 61,868,405 | |||||||||
0.450% 10/18/12 (b) | 17,220,000 | 17,209,883 | |||||||||
0.500% 01/15/13 (b) | 33,725,000 | 33,661,297 | |||||||||
0.550% 10/01/12 (b) | 17,760,000 | 17,751,860 | |||||||||
0.550% 10/02/12 (b) | 76,196,000 | 76,159,913 | |||||||||
0.590% 01/02/13 (b) | 32,100,000 | 32,035,292 | |||||||||
0.600% 01/02/13 (b) | 60,990,000 | 60,864,970 | |||||||||
0.610% 10/01/12 (b) | 41,000,000 | 40,979,158 | |||||||||
Manhattan Asset Funding Co. LLC | |||||||||||
0.270% 10/11/12 (b) | 24,829,000 | 24,821,551 | |||||||||
Old Line Funding LLC | |||||||||||
0.320% 02/19/13 (b) | 35,485,000 | 35,431,063 | |||||||||
0.320% 02/21/13 (b) | 23,235,000 | 23,199,270 | |||||||||
Rhein Main Securitisation Ltd. | |||||||||||
0.470% 09/28/12 (b) | 37,100,000 | 37,086,922 | |||||||||
0.510% 09/14/12 (b) | 21,600,000 | 21,596,022 | |||||||||
Royal Park Investments Funding Corp. | |||||||||||
0.650% 09/06/12 (b) | 122,465,000 | 122,453,944 | |||||||||
0.650% 09/13/12 (b) | 54,030,000 | 54,018,294 | |||||||||
0.650% 09/18/12 (b) | 53,780,000 | 53,763,493 | |||||||||
0.650% 09/19/12 (b) | 60,115,000 | 60,095,463 | |||||||||
0.650% 09/27/12 (b) | 48,250,000 | 48,227,349 | |||||||||
0.650% 10/03/12 (b) | 42,475,000 | 42,450,459 | |||||||||
Total Asset-Backed Commercial Paper (cost of $1,684,974,722) | 1,684,974,722 | ||||||||||
Municipal Bonds (d)(e) – 9.1% | |||||||||||
California – 0.8% | |||||||||||
CA East Bay Municipal Utility District | |||||||||||
Series 2008 A-2, | |||||||||||
SPA: Barclays Bank PLC 0.150% 06/01/38 (09/05/12) | 13,640,000 | 13,640,000 |
See Accompanying Notes to Financial Statements.
3
BofA Cash Reserves
August 31, 2012
Municipal Bonds (d)(e) (continued)
Par ($) | Value ($) | ||||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2000 B-4, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.140% 07/01/35 (09/05/12) | 20,300,000 | 20,300,000 | |||||||||
Series 2008 A-2, | |||||||||||
SPA: Barclays Bank PLC 0.150% 07/01/37 (09/06/12) | 59,180,000 | 59,180,000 | |||||||||
California Total | 93,120,000 | ||||||||||
Colorado – 0.7% | |||||||||||
CO Housing & Finance Authority | |||||||||||
Multi-Family: | |||||||||||
Series 2003 A-1, SPA: FHLB 0.190% 10/01/33 (09/05/12) | 9,985,000 | 9,985,000 | |||||||||
Series 2003 A-2, SPA: FHLB 0.190% 10/01/33 (09/05/12) | 6,800,000 | 6,800,000 | |||||||||
Series 2004 A1, SPA: FHLB 0.180% 10/01/34 (09/05/12) | 20,660,000 | 20,660,000 | |||||||||
Series 2008 A1, SPA: FHLB 0.180% 04/01/29 (09/05/12) | 14,345,000 | 14,345,000 | |||||||||
Series 2008 C1, SPA: FHLB 0.180% 10/01/38 (09/05/12) | 7,945,000 | 7,945,000 | |||||||||
Series 2001 AA1, | |||||||||||
LOC: FNMA, LOC: FHLMC 0.180% 05/01/41 (09/05/12) | 2,465,000 | 2,465,000 | |||||||||
Series 2003 A1, | |||||||||||
LOC: FNMA 0.240% 11/01/30 (09/05/12) | 2,305,000 | 2,305,000 | |||||||||
Series 2005 B-1, | |||||||||||
SPA: FHLB 0.180% 04/01/40 (09/05/12) | 6,590,000 | 6,590,000 |
Par ($) | Value ($) | ||||||||||
Series 2006 CL1, | |||||||||||
SPA: FHLB 0.190% 11/01/36 (09/05/12) | 1,135,000 | 1,135,000 | |||||||||
Single Family: | |||||||||||
Series 2002 A-1, SPA: FHLB 0.240% 11/01/13 (09/05/12) | 1,410,000 | 1,410,000 | |||||||||
Series 2003 B1, LOC: FNMA, LOC: FHLMC 0.180% 11/01/33 (09/05/12) | 855,000 | 855,000 | |||||||||
Series 2006 B1, LOC: FNMA, LOC: FHLMC 0.180% 11/01/36 (09/05/12) | 755,000 | 755,000 | |||||||||
Series 2006 C1, LOC: FNMA, LOC: FHLMC 0.180% 11/01/36 (09/05/12) | 750,000 | 750,000 | |||||||||
CO Sheridan Redevelopment Agency | |||||||||||
South Santa, | |||||||||||
Series 2011, LOC: JPMorgan Chase Bank 0.510% 12/01/29 (09/06/12) | 1,600,000 | 1,600,000 | |||||||||
Colorado Total | 77,600,000 | ||||||||||
Connecticut – 0.3% | |||||||||||
CT Housing Finance Authority | |||||||||||
Series 2008 A5, | |||||||||||
SPA: FHLB 0.160% 11/15/38 (09/06/12) | 11,435,000 | 11,435,000 | |||||||||
Series 2008 B4, | |||||||||||
SPA: Landesbank Hessen-Thüringen 0.190% 11/15/38 (09/06/12) | 21,890,000 | 21,890,000 | |||||||||
Connecticut Total | 33,325,000 |
See Accompanying Notes to Financial Statements.
4
BofA Cash Reserves
August 31, 2012
Municipal Bonds (d)(e) (continued)
Par ($) | Value ($) | ||||||||||
Florida – 0.2% | |||||||||||
FL Miami-Dade County Industrial Development Authority | |||||||||||
South Florida Stadium, | |||||||||||
Miami Stadium Project, Series 2007, LOC: TD Bank N.A. 0.160% 07/01/37 (09/06/12) | 19,500,000 | 19,500,000 | |||||||||
Florida Total | 19,500,000 | ||||||||||
Illinois – 1.5% | |||||||||||
IL Bridgeview | |||||||||||
Series 2008 B1, | |||||||||||
LOC: Northern Trust Co. 0.190% 12/01/38 (09/05/12) | 7,500,000 | 7,500,000 | |||||||||
IL Chicago | |||||||||||
Series 2007 E, | |||||||||||
LOC: Barclays Bank PLC 0.180% 01/01/42 (09/04/12) | 92,700,000 | 92,700,000 | |||||||||
Series 2007 G, | |||||||||||
LOC: Barclays Bank PLC 0.180% 01/01/42 (09/04/12) | 20,000,000 | 20,000,000 | |||||||||
IL Toll Highway Authority | |||||||||||
Series 2008 A-1A, | |||||||||||
SPA: JPMorgan Chase Bank 0.270% 01/01/31 (09/06/12) | 48,965,000 | 48,965,000 | |||||||||
Illinois Total | 169,165,000 | ||||||||||
Iowa – 0.1% | |||||||||||
IA Finance Authority | |||||||||||
Series 2004 B, AMT, | |||||||||||
SPA: FHLB 0.210% 07/01/34 (09/06/12) | 7,260,000 | 7,260,000 | |||||||||
Series 2007 G, | |||||||||||
SPA: FHLB 0.180% 01/01/38 (09/06/12) | 1,985,000 | 1,985,000 | |||||||||
Series 2009 G, | |||||||||||
SPA: FHLB 0.180% 01/01/39 (09/06/12) | 1,705,000 | 1,705,000 | |||||||||
Iowa Total | 10,950,000 |
Par ($) | Value ($) | ||||||||||
Maryland – 0.0% | |||||||||||
MD Easton | |||||||||||
William Hill Manor, Inc., | |||||||||||
Series 2009 B, LOC: Branch Banking & Trust 0.280% 01/01/26 (09/06/12) | 2,800,000 | 2,800,000 | |||||||||
Maryland Total | 2,800,000 | ||||||||||
Massachusetts – 0.1% | |||||||||||
MA Simmons College | |||||||||||
Series 2008, | |||||||||||
LOC: TD Bank N.A. 0.180% 10/01/22 (09/06/12) | 6,670,000 | 6,670,000 | |||||||||
Massachusetts Total | 6,670,000 | ||||||||||
Minnesota – 0.2% | |||||||||||
MN Housing Finance Agency | |||||||||||
Residential Housing, | |||||||||||
Series 2007 T, SPA: State Street Bank & Trust Co. 0.210% 07/01/48 (09/06/12) | 795,000 | 795,000 | |||||||||
MN Montrose | |||||||||||
Lyman Lumber Co., | |||||||||||
Series 2001, LOC: U.S. Bank N.A. 0.180% 05/01/26 (09/06/12) | 1,245,000 | 1,245,000 | |||||||||
MN Office of Higher Education | |||||||||||
Supplies for Students, | |||||||||||
Series 2008 A, LOC: U.S. Bank N.A. 0.180% 12/01/43 (09/06/12) | 22,395,000 | 22,395,000 | |||||||||
Minnesota Total | 24,435,000 | ||||||||||
New Hampshire – 0.1% | |||||||||||
NH Health & Education Facilities Authority | |||||||||||
Dartmouth College, | |||||||||||
Series 2007 C, SPA: JPMorgan Chase Bank | |||||||||||
0.180% 06/01/41 (09/05/12) | 11,635,000 | 11,635,000 | |||||||||
New Hampshire Total | 11,635,000 |
See Accompanying Notes to Financial Statements.
5
BofA Cash Reserves
August 31, 2012
Municipal Bonds (d)(e) (continued)
Par ($) | Value ($) | ||||||||||
New Mexico – 0.1% | |||||||||||
NM Finance Authority | |||||||||||
Series 2008, | |||||||||||
LOC: Royal Bank of Canada 0.180% 12/15/26 (09/06/12) | 7,000,000 | 7,000,000 | |||||||||
New Mexico Total | 7,000,000 | ||||||||||
New York – 1.2% | |||||||||||
NY Housing Finance Agency | |||||||||||
Broadway, | |||||||||||
Series 2011 B, LOC: Wells Fargo Bank N.A. 0.180% 05/01/44 (09/05/12) | 5,485,000 | 5,485,000 | |||||||||
Midtown West 37th Street, | |||||||||||
Series 2007, LOC: Landesbank Hessen-Thüringen 0.200% 11/01/41 (09/05/12) | 6,300,000 | 6,300,000 | |||||||||
Series 2010 A, | |||||||||||
LOC: JPMorgan Chase Bank 0.160% 05/01/40 (09/05/12) | 10,000,000 | 10,000,000 | |||||||||
NY New York City Housing Development Corp. | |||||||||||
RBNB 20 Owner LLC, | |||||||||||
Series 2006 B, LOC: Landesbank Hessen-Thüringen 0.190% 06/01/39 (09/05/12) | 77,815,000 | 77,815,000 | |||||||||
Verde Apartments, | |||||||||||
Series 2010 A, LOC: JPMorgan Chase Bank 0.260% 01/01/16 (09/06/12) | 15,890,000 | 15,890,000 | |||||||||
NY New York City | |||||||||||
Series 2011 D-3, | |||||||||||
LOC: Bank of New York 0.170% 10/01/39 (09/04/12) | 16,715,000 | 16,715,000 | |||||||||
New York Total | 132,205,000 |
Par ($) | Value ($) | ||||||||||
North Carolina – 0.0% | |||||||||||
NC Catawba | |||||||||||
Catawba Medical Center, | |||||||||||
Series 2009, LOC: Branch Banking & Trust 0.270% 10/01/34 (09/06/12) | 5,350,000 | 5,350,000 | |||||||||
North Carolina Total | 5,350,000 | ||||||||||
Oregon – 0.5% | |||||||||||
OR Housing & Community Services Department | |||||||||||
Mortgage Revenue, | |||||||||||
Series 2004 L, AMT, SPA: State Street Bank & Trust Co. 0.170% 07/01/35 (09/05/12) | 10,500,000 | 10,500,000 | |||||||||
Series 2006 C, AMT, | |||||||||||
SPA: State Street Bank & Trust Co. 0.210% 07/01/36 (09/06/12) | 5,000,000 | 5,000,000 | |||||||||
Single Family: | |||||||||||
Series 2004 C, AMT, SPA: State Street Bank & Trust Co. 0.170% 07/01/34 (09/05/12) | 15,000,000 | 15,000,000 | |||||||||
Series 2005 C, AMT, SPA: State Street Bank & Trust Co. 0.200% 07/01/35 (09/05/12) | 10,500,000 | 10,500,000 | |||||||||
Series 2006 F, AMT, SPA: State Street Bank & Trust Co. 0.170% 07/01/37 (09/06/12) | 20,000,000 | 20,000,000 | |||||||||
Oregon Total | 61,000,000 | ||||||||||
Tennessee – 0.2% | |||||||||||
TN Sullivan County Health, Educational & Housing Facilities Board | |||||||||||
Wellmont Health System, | |||||||||||
Series 2005, LOC: JPMorgan Chase Bank 0.180% 09/01/32 (09/06/12) | 28,625,000 | 28,625,000 | |||||||||
Tennessee Total | 28,625,000 |
See Accompanying Notes to Financial Statements.
6
BofA Cash Reserves
August 31, 2012
Municipal Bonds (d)(e) (continued)
Par ($) | Value ($) | ||||||||||
Texas – 2.5% | |||||||||||
TX JPMorgan Chase Putters/Drivers Trust | |||||||||||
Series 2012 4262, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.200% 08/30/13 (09/04/12) (b) | 46,880,000 | 46,880,000 | |||||||||
Series 2012 4264, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.200% 08/30/13 (09/04/12) (b) | 98,490,000 | 98,490,000 | |||||||||
TX State | |||||||||||
Small Business, | |||||||||||
Series 2005 B, SPA: National Australia Bank 0.210% 06/01/45 (09/06/12) | 3,025,000 | 3,025,000 | |||||||||
Veterans Assistance, | |||||||||||
Series 2004 I, SPA: JPMorgan Chase Bank 0.210% 12/01/24 (09/05/12) | 7,700,000 | 7,700,000 | |||||||||
Veterans Housing: | |||||||||||
Series 1997 B-2, LIQ FAC: State Street Bank & Trust Co. 0.210% 12/01/29 (09/05/12) | 5,000,000 | 5,000,000 | |||||||||
Series 2003, AMT, SPA: Landesbank Hessen-Thüringen 0.170% 06/01/34 (09/05/12) | 10,390,000 | 10,390,000 | |||||||||
Series 2004, SPA: JPMorgan Chase Bank 0.210% 06/01/20 (09/05/12) | 3,750,000 | 3,750,000 | |||||||||
Series 2006 B, LIQ FAC: Landesbank Hessen-Thüringen 0.280% 12/01/26 (09/05/12) | 8,390,000 | 8,390,000 | |||||||||
Series 2009, SPA: JPMorgan Chase & Co. 0.210% 06/01/31 (09/05/12) | 9,250,000 | 9,250,000 |
Par ($) | Value ($) | ||||||||||
Series 2010 B, SPA: Sumitomo Mitsui Banking 0.230% 12/01/31 (09/05/12) | 11,660,000 | 11,660,000 | |||||||||
Veterans Land: | |||||||||||
Series 2004, SPA: State Street Bank & Trust Co. 0.190% 12/01/24 (09/04/12) | 2,105,000 | 2,105,000 | |||||||||
Series 2006 B, SPA: Landesbank Hessen-Thüringen 0.180% 12/01/26 (09/05/12) | 7,335,000 | 7,335,000 | |||||||||
Series 2011 A, SPA: JPMorgan Chase Bank 0.180% 06/01/41 (09/05/12) | 67,335,000 | 67,335,000 | |||||||||
Texas Total | 281,310,000 | ||||||||||
Vermont – 0.2% | |||||||||||
VT Educational & Health Buildings Financing Agency | |||||||||||
Norwich University, | |||||||||||
Series 2008, LOC: TD Bank N.A. 0.140% 09/01/38 (09/05/12) | 20,000,000 | 20,000,000 | |||||||||
Vermont Total | 20,000,000 | ||||||||||
Washington – 0.2% | |||||||||||
WA Housing Finance Commission | |||||||||||
Spokane United Methodist Homes, | |||||||||||
Rockwood Programs, Series 1999 B, LOC: Wells Fargo Bank N.A. 0.170% 01/01/30 (09/06/12) | 3,120,000 | 3,120,000 | |||||||||
WA Port of Seattle | |||||||||||
Series 2008, AMT, | |||||||||||
LOC: Landesbank Hessen-Thüringen 0.240% 07/01/33 (09/05/12) | 22,600,000 | 22,600,000 | |||||||||
Washington Total | 25,720,000 |
See Accompanying Notes to Financial Statements.
7
BofA Cash Reserves
August 31, 2012
Municipal Bonds (d)(e) (continued)
Par ($) | Value ($) | ||||||||||
Wisconsin – 0.2% | |||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Wheaton Franciscan Services, | |||||||||||
Series 2007, LOC: PNC Bank N.A. 0.140% 08/15/36 (09/05/12) | 24,705,000 | 24,705,000 | |||||||||
Wisconsin Total | 24,705,000 | ||||||||||
Total Municipal Bonds (cost of $1,035,115,000) | 1,035,115,000 | ||||||||||
Government & Agency Obligations – 3.5% | |||||||||||
U.S. Government Agencies – 2.7% | |||||||||||
Federal Home Loan Mortgage Corp. | |||||||||||
0.440% 11/18/13 (09/04/12) (c)(d) | 84,735,000 | 84,714,224 | |||||||||
Federal National Mortgage Association | |||||||||||
0.217% 06/20/14 (09/20/12) (c)(d) | 50,695,000 | 50,676,542 | |||||||||
0.267% 12/20/12 (09/20/12) (c)(d) | 30,000,000 | 29,998,170 | |||||||||
0.370% 01/27/14 (09/04/12) (c)(d) | 15,000,000 | 14,997,857 | |||||||||
0.380% 10/17/13 (09/04/12) (c)(d) | 21,000,000 | 20,995,195 | |||||||||
0.400% 02/01/13 (11/01/12) (c)(d) | 100,300,000 | 100,292,978 | |||||||||
U.S. Government Agencies Total | 301,674,966 | ||||||||||
U.S. Government Obligations – 0.8% | |||||||||||
U.S. Treasury Note | |||||||||||
0.500% 11/30/12 | 18,380,000 | 18,394,359 | |||||||||
1.375% 09/15/12 | 33,100,000 | 33,115,466 | |||||||||
1.375% 01/15/13 | 18,750,000 | 18,836,233 | |||||||||
3.875% 10/31/12 | 25,350,000 | 25,504,635 | |||||||||
U.S. Government Obligations Total | 95,850,693 | ||||||||||
Total Government & Agency Obligations (cost of $397,525,659) | 397,525,659 | ||||||||||
Time Deposits – 2.1% | |||||||||||
Citibank N.A. | |||||||||||
0.170% 09/04/12 | 160,300,000 | 160,300,000 | |||||||||
U.S. Bank N.A. | |||||||||||
0.150% 09/04/12 | 76,410,000 | 76,410,000 | |||||||||
Total Time Deposits (cost of $236,710,000) | 236,710,000 |
Corporate Bonds – 0.3%
Par ($) | Value ($) | ||||||||||
ANZ National International Ltd. | |||||||||||
2.375% 12/21/12 (b) | 1,135,000 | 1,141,830 | |||||||||
Commonwealth Bank of Australia | |||||||||||
2.750% 10/15/12 (b) | 15,705,000 | 15,750,058 | |||||||||
General Electric Capital Corp. | |||||||||||
1.305% 01/15/13 (10/15/12) (c)(d) | 2,100,000 | 2,106,976 | |||||||||
2.800% 01/08/13 | 4,201,000 | 4,234,922 | |||||||||
5.250% 10/19/12 | 8,958,000 | 9,014,408 | |||||||||
5.450% 01/15/13 | 1,371,000 | 1,396,405 | |||||||||
National Australia Bank Ltd. | |||||||||||
2.500% 01/08/13 (b) | 685,000 | 690,059 | |||||||||
Total Corporate Bonds (cost of $34,334,658) | 34,334,658 | ||||||||||
Repurchase Agreements – 25.1% | |||||||||||
Repurchase agreement with ABN Amro, Inc., dated 08/31/12, due 09/04/12 at 0.330%, collateralized by common stocks, market value $130,844,326 (repurchase proceeds $118,949,361) | 118,945,000 | 118,945,000 | |||||||||
Repurchase agreement with Bank of Nova Scotia, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government Agency obligations with various maturities to 03/01/42, market value $173,403,661 (repurchase proceeds $170,003,589) | 170,000,000 | 170,000,000 | |||||||||
Repurchase agreement with Barclays Capital, dated 08/31/12, due 09/04/12 at 0.320%, collateralized by common stocks, market value $26,131,645 (repurchase proceeds $24,780,881) | 24,780,000 | 24,780,000 |
See Accompanying Notes to Financial Statements.
8
BofA Cash Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/31/12, due 09/04/12 at 0.250%, collateralized by corporate bonds with various maturities to 06/15/22, market value $156,116,470 (repurchase proceeds $148,684,130) | 148,680,000 | 148,680,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/31/12, due 09/04/12 at 0.300%, collateralized by common stocks, exchanged traded funds and preferred stocks, market value $394,299,470 (repurchase proceeds $359,326,977) | 359,315,000 | 359,315,000 | |||||||||
Repurchase agreement with Deutsche Bank Securities, dated 08/31/12, due 09/04/12 at 0.350%, collateralized by common stocks and convertible preferred stocks, market value $111,044,843 (repurchase proceeds $99,123,855) | 99,120,000 | 99,120,000 | |||||||||
Repurchase agreement with Goldman Sachs, dated 08/31/12, due 10/02/12 at 0.280%, collateralized by U.S. Treasury obligations with various maturities to 04/15/16, market value $102,003,286 (repurchase proceeds $100,024,889) | 100,000,000 | 100,000,000 | |||||||||
Repurchase agreement with Goldman Sachs, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government Agency obligations with various maturities to 08/01/41, market value $102,002,153 (repurchase proceeds $100,002,111) | 100,000,000 | 100,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with HSBC Securities USA, Inc., dated 08/31/12, due 09/04/12 at 0.250%, collateralized by corporate bonds with various maturities to 04/12/22, market value $143,109,432 (repurchase proceeds $136,293,786) | 136,290,000 | 136,290,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/02/12, due 10/31/12 at 0.460%, collateralized by corporate bonds with various maturities to 06/07/22, market value $20,817,536 (repurchase proceeds $19,847,799) | 19,825,000 | 19,825,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/03/12, due 10/02/12 at 0.440%, collateralized by corporate bonds with various maturities to 07/15/22, market value $23,257,391 (repurchase proceeds $22,161,240) | 22,145,000 | 22,145,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/06/12, due 11/02/12 at 0.530%, collateralized by corporate bonds with various maturities to 07/15/22, market value $23,241,992 (repurchase proceeds $22,163,677) | 22,135,000 | 22,135,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/07/12, due 10/05/12 at 0.430%, collateralized by corporate bonds with various maturities to 06/07/22, market value $22,987,953 (repurchase proceeds $21,905,426) | 21,890,000 | 21,890,000 |
See Accompanying Notes to Financial Statements.
9
BofA Cash Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/09/12, due 11/07/12 at 0.530%, collateralized by corporate bonds with various maturities to 06/07/22, market value $22,978,802 (repurchase proceeds $21,908,991) | 21,880,000 | 21,880,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/28/12, due 09/04/12 at 0.260%, collateralized by corporate bonds with various maturities to 06/15/22, market value $56,472,040 (repurchase proceeds $53,782,719) | 53,780,000 | 53,780,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/31/12, due 09/04/12 at 0.180%, collateralized by a U.S. Treasury obligation maturing 08/31/14, market value $38,763,798 (repurchase proceeds $38,000,760) | 38,000,000 | 38,000,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/31/12, due 09/04/12 at 0.200%, collateralized by U.S. Government Agency obligations with various maturities to 08/01/42, market value $143,821,084 (repurchase proceeds $141,003,133) | 141,000,000 | 141,000,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/31/12, due 09/04/12 at 0.300%, collateralized by corporate bonds with various maturities to 07/15/22, market value $140,409,866 (repurchase proceeds $133,724,457) | 133,720,000 | 133,720,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/15/12, due 11/13/12 at 0.540%, collateralized by corporate bonds with various maturities to 05/15/22, market value $46,321,723 (repurchase proceeds $44,169,549) | 44,110,000 | 44,110,000 | |||||||||
Repurchase agreement with Mizuho Securities USA, Inc., dated 08/31/12, due 09/04/12 at 0.280%, collateralized by corporate bonds and U.S. Treasury obligations with various maturities to 08/17/22, market value $275,295,799 (repurchase proceeds $266,878,303) | 266,870,000 | 266,870,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/30/12, due 09/06/12 at 0.230%, collateralized by certificates of deposit with various maturities to 02/19/13, market value $95,352,251 (repurchase proceeds $92,579,140) | 92,575,000 | 92,575,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/31/12, due 11/29/12 at 0.390%, collateralized by corporate bonds with various maturities to 05/08/22, market value $193,688,251 (repurchase proceeds $184,644,853) | 184,465,000 | 184,465,000 | |||||||||
Repurchase agreement with TD USA Securities, Inc., dated 08/31/12, due 09/04/12 at 0.220%, collateralized by corporate bonds with various maturities to 03/29/21, market value $208,152,001 (repurchase proceeds $198,244,846) | 198,240,000 | 198,240,000 |
See Accompanying Notes to Financial Statements.
10
BofA Cash Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Wells Fargo, dated 08/23/12, due 11/26/12 at 0.450%, collateralized by corporate bonds and commercial paper with various maturities to 08/15/22, market value $47,958,169 (repurchase proceeds $45,759,275) | 45,705,000 | 45,705,000 | |||||||||
Repurchase agreement with Wells Fargo, dated 08/31/12, due 09/04/12 at 0.200%, collateralized by U.S. Government Agency obligations with various maturities to 08/01/42, market value $204,000,000 (repurchase proceeds $200,004,444) | 200,000,000 | 200,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Wells Fargo, dated 08/31/12, due 09/04/12 at 0.250%, collateralized by corporate bonds with various maturities to 05/15/22, market value $106,412,250 (repurchase proceeds $101,347,815) | 101,345,000 | 101,345,000 | |||||||||
Total Repurchase Agreements (cost of $2,864,815,000) | 2,864,815,000 | ||||||||||
Total Investments – 100.1% (cost of $11,401,285,235) (f) | 11,401,285,235 | ||||||||||
Other Assets & Liabilities, Net – (0.1)% | (6,242,027 | ) | |||||||||
Net Assets – 100.0% | 11,395,043,208 |
Notes to Investment Portfolio:
(a) The rate shown represents the discount rate at the date of purchase.
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $3,411,986,497 or 29.9% of net assets for the Fund.
(c) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2012.
(d) Parenthetical date represents the effective maturity date for the security.
(e) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(f) Cost for federal income tax purposes is $11,401,285,235.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Commercial Paper | $ | — | $ | 2,746,902,662 | $ | — | $ | 2,746,902,662 | |||||||||||
Total Certificates of Deposit | — | 2,400,907,534 | — | 2,400,907,534 | |||||||||||||||
Total Asset-Backed Commercial Paper | — | 1,684,974,722 | — | 1,684,974,722 | |||||||||||||||
Total Municipal Bonds | — | 1,035,115,000 | — | 1,035,115,000 | |||||||||||||||
Total Government & Agency Obligations | — | 397,525,659 | — | 397,525,659 | |||||||||||||||
Total Time Deposits | — | 236,710,000 | — | 236,710,000 | |||||||||||||||
Total Corporate Bonds | — | 34,334,658 | — | 34,334,658 | |||||||||||||||
Total Repurchase Agreements | — | 2,864,815,000 | — | 2,864,815,000 | |||||||||||||||
Total Investments | $ | — | $ | 11,401,285,235 | $ | — | $ | 11,401,285,235 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
11
BofA Cash Reserves
August 31, 2012
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Commercial Paper | 24.1 | ||||||
Certificates of Deposit | 21.1 | ||||||
Asset-Backed Commercial Paper | 14.8 | ||||||
Municipal Bonds | 9.1 | ||||||
Government & Agency Obligations | 3.5 | ||||||
Time Deposits | 2.1 | ||||||
Corporate Bonds | 0.3 | ||||||
75.0 | |||||||
Repurchase Agreements | 25.1 | ||||||
Other Assets & Liabilities, Net | (0.1 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
FHLB | Federal Home Loan Bank | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
12
Statement of Assets and Liabilities – BofA Cash Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 8,536,470,235 | |||||||||
Repurchase agreements, at amortized cost approximating value | 2,864,815,000 | ||||||||||
Total investments, at value | 11,401,285,235 | ||||||||||
Cash | 172 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 52,450 | ||||||||||
Interest | 2,532,539 | ||||||||||
Expense reimbursement due from investment advisor | 112,065 | ||||||||||
Trustees' deferred compensation plan | 88,255 | ||||||||||
Prepaid expenses | 141,355 | ||||||||||
Total Assets | 11,404,212,071 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased | 5,420,760 | ||||||||||
Fund shares repurchased | 191,031 | ||||||||||
Distributions | 403,490 | ||||||||||
Investment advisory fee | 1,348,404 | ||||||||||
Administration fee | 347,907 | ||||||||||
Pricing and bookkeeping fees | 20,428 | ||||||||||
Transfer agent fee | 133,780 | ||||||||||
Trustees' fees | 8,688 | ||||||||||
Custody fee | 42,448 | ||||||||||
Reports to shareholders | 582,952 | ||||||||||
Distribution and service fees | 397,169 | ||||||||||
Shareholder administration fee | 95,069 | ||||||||||
Chief compliance officer expenses | 4,322 | ||||||||||
Trustees' deferred compensation plan | 88,255 | ||||||||||
Other liabilities | 84,160 | ||||||||||
Total Liabilities | 9,168,863 | ||||||||||
Net Assets | 11,395,043,208 | ||||||||||
Net Assets Consist of | Paid-in capital | 11,392,689,556 | |||||||||
Undistributed net investment income | 4,719,404 | ||||||||||
Accumulated net realized loss | (2,365,752 | ) | |||||||||
Net Assets | 11,395,043,208 |
See Accompanying Notes to Financial Statements.
13
Statement of Assets and Liabilities (continued) – BofA Cash Reserves
August 31, 2012
Adviser Class Shares | Net assets | $ | 1,741,542,066 | ||||||||
Shares outstanding | 1,741,468,989 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 6,563,081,376 | ||||||||
Shares outstanding | 6,562,805,644 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 1,074,084,839 | ||||||||
Shares outstanding | 1,074,039,463 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares (1) | Net assets | $ | 226,134,416 | ||||||||
Shares outstanding | 226,124,986 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 876,078,982 | ||||||||
Shares outstanding | 876,045,802 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 24,251,422 | ||||||||
Shares outstanding | 24,250,398 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares (1) | Net assets | $ | 29,404,792 | ||||||||
Shares outstanding | 29,403,570 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 114,587,825 | ||||||||
Shares outstanding | 114,583,017 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Marsico Shares | Net assets | $ | 9,041,241 | ||||||||
Shares outstanding | 9,040,859 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 736,836,249 | ||||||||
Shares outstanding | 736,804,804 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
14
Statement of Operations – BofA Cash Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 38,852,378 | |||||||||
Expenses | |||||||||||
Investment advisory fee | 16,428,182 | ||||||||||
Administration fee | 10,812,121 | ||||||||||
Distribution fee: | |||||||||||
Class B Shares (1) | 3,055 | ||||||||||
Class C Shares (1) | 2,486 | ||||||||||
Daily Class Shares | 4,620,171 | ||||||||||
Investor Class Shares | 25,389 | ||||||||||
Investor II Class Shares (1) | 33,380 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 4,730,152 | ||||||||||
Class B Shares (1) | 1,019 | ||||||||||
Class C Shares (1) | 829 | ||||||||||
Daily Class Shares | 3,300,122 | ||||||||||
Investor Class Shares | 63,473 | ||||||||||
Investor II Class Shares (1) | 83,449 | ||||||||||
Liquidity Class Shares | 320,470 | ||||||||||
Marsico Shares | 24,119 | ||||||||||
Shareholder administration fee: | |||||||||||
Class B Shares (1) | 407 | ||||||||||
Class C Shares (1) | 331 | ||||||||||
Institutional Class Shares | 350,629 | ||||||||||
Investor II Class Shares (1) | 33,380 | ||||||||||
Marsico Shares | 9,648 | ||||||||||
Trust Class Shares | 765,346 | ||||||||||
Transfer agent fee | 481,689 | ||||||||||
Pricing and bookkeeping fees | 181,510 | ||||||||||
Trustees' fees | 143,465 | ||||||||||
Custody fee | 227,153 | ||||||||||
Chief compliance officer expenses | 23,043 | ||||||||||
Other expenses | 1,855,854 | ||||||||||
Total Expenses | 44,520,872 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (8,236,952 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (1,798,324 | ) | |||||||||
Class B Shares (1) | (4,117 | ) | |||||||||
Class C Shares (1) | (3,351 | ) | |||||||||
Daily Class Shares | (5,918,215 | ) | |||||||||
Investor Class Shares | (49,707 | ) | |||||||||
Investor II Class Shares (1) | (98,844 | ) | |||||||||
Liquidity Class Shares | (146,021 | ) | |||||||||
Marsico Shares | (19,140 | ) | |||||||||
Trust Class Shares | (13,461 | ) | |||||||||
Expense reductions | (96 | ) | |||||||||
Net Expenses | 28,232,644 | ||||||||||
Net Investment Income | 10,619,734 | ||||||||||
Net realized gain on investments | 177,384 | ||||||||||
Net Increase Resulting from Operations | 10,797,118 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
15
Statement of Changes in Net Assets – BofA Cash Reserves
Increase (Decrease) in Net Assets | Year Ended August 31, 2012 ($) | Year Ended August 31, 2011 ($) | |||||||||||||
Operations | Net investment income | 10,619,734 | 8,095,580 | ||||||||||||
Net realized gain on investments | 177,384 | 231,139 | |||||||||||||
Net increase resulting from operations | 10,797,118 | 8,326,719 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Capital Class Shares | (8,643,460 | ) | (6,519,706 | ) | |||||||||||
Class Z Shares (1) | (25,697 | ) | (442,021 | ) | |||||||||||
Institutional Capital Shares (1) | (500,360 | ) | — | ||||||||||||
Institutional Class Shares | (979,356 | ) | (957,527 | ) | |||||||||||
Liquidity Class Shares | (26,918 | ) | (3,115 | ) | |||||||||||
Trust Class Shares | (443,943 | ) | (173,420 | ) | |||||||||||
Total distributions to shareholders | (10,619,734 | ) | (8,095,789 | ) | |||||||||||
Net Capital Stock Transactions | 814,818,901 | (11,019,836,995 | ) | ||||||||||||
Total increase (decrease) in net assets | 814,996,285 | (11,019,606,065 | ) | ||||||||||||
Net Assets | Beginning of period | 10,580,046,923 | 21,599,652,988 | ||||||||||||
End of period | 11,395,043,208 | 10,580,046,923 | |||||||||||||
Undistributed net investment income at end of period | 4,719,404 | 4,548,580 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
16
Statement of Changes in Net Assets (continued) – BofA Cash Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 11,053,991,674 | 11,053,991,674 | 9,483,145,932 | 9,483,145,932 | |||||||||||||||
Redemptions | (11,276,600,292 | ) | (11,276,600,292 | ) | (11,881,199,893 | ) | (11,881,199,893 | ) | |||||||||||
Net decrease | (222,608,618 | ) | (222,608,618 | ) | (2,398,053,961 | ) | (2,398,053,961 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 31,086,349,045 | 31,086,349,044 | 27,144,938,217 | 27,144,938,217 | |||||||||||||||
Distributions reinvested | 4,362,955 | 4,362,955 | 2,937,057 | 2,937,057 | |||||||||||||||
Redemptions | (29,166,228,157 | ) | (29,166,228,157 | ) | (29,258,503,274 | ) | (29,258,503,274 | ) | |||||||||||
Net increase (decrease) | 1,924,483,843 | 1,924,483,842 | (2,110,628,000 | ) | (2,110,628,000 | ) | |||||||||||||
Class B Shares (1) | |||||||||||||||||||
Conversion | (4,863,266 | ) | (4,863,266 | ) | — | — | |||||||||||||
Redemptions | (194,762 | ) | (194,762 | ) | (6,571,952 | ) | (6,571,952 | ) | |||||||||||
Net decrease | (5,058,028 | ) | (5,058,028 | ) | (6,571,952 | ) | (6,571,952 | ) | |||||||||||
Class C Shares (1) | |||||||||||||||||||
Conversion | (3,911,796 | ) | (3,911,796 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 19,419 | 19,419 | |||||||||||||||
Redemptions | (188,430 | ) | (188,430 | ) | (4,624,127 | ) | (4,624,127 | ) | |||||||||||
Net decrease | (4,100,226 | ) | (4,100,226 | ) | (4,604,708 | ) | (4,604,708 | ) | |||||||||||
Class Z Shares (1) | |||||||||||||||||||
Subscriptions | 2,442,512 | 2,442,512 | 66,472,467 | 66,472,467 | |||||||||||||||
Conversion | (348,148,494 | ) | (348,148,494 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 430,496 | 430,496 | |||||||||||||||
Redemptions | (7,986,933 | ) | (7,986,933 | ) | (149,409,718 | ) | (149,409,718 | ) | |||||||||||
Net decrease | (353,692,915 | ) | (353,692,915 | ) | (82,506,755 | ) | (82,506,755 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 52,652,563 | 52,652,563 | 1,660,789,491 | 1,660,789,491 | |||||||||||||||
Redemptions | (651,304,111 | ) | (651,304,111 | ) | (7,085,231,607 | ) | (7,085,231,607 | ) | |||||||||||
Net decrease | (598,651,548 | ) | (598,651,548 | ) | (5,424,442,116 | ) | (5,424,442,116 | ) | |||||||||||
Institutional Capital Shares (1) | |||||||||||||||||||
Subscriptions | 122,918,421 | 122,918,421 | — | — | |||||||||||||||
Conversion | 348,148,494 | 348,148,494 | — | — | |||||||||||||||
Distributions reinvested | 423,491 | 423,491 | — | — | |||||||||||||||
Redemptions | (245,365,420 | ) | (245,365,420 | ) | — | — | |||||||||||||
Net increase | 226,124,986 | 226,124,986 | — | — | |||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 3,122,833,429 | 3,122,833,428 | 6,288,641,628 | 6,288,641,628 | |||||||||||||||
Distributions reinvested | 874,317 | 874,317 | 707,879 | 707,879 | |||||||||||||||
Redemptions | (3,245,016,087 | ) | (3,245,016,087 | ) | (6,964,264,202 | ) | (6,964,264,202 | ) | |||||||||||
Net decrease | (121,308,341 | ) | (121,308,342 | ) | (674,914,695 | ) | (674,914,695 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
17
Statement of Changes in Net Assets (continued) – BofA Cash Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 10,535,251 | 10,535,251 | 45,373,746 | 45,373,746 | |||||||||||||||
Redemptions | (16,991,137 | ) | (16,991,137 | ) | (85,246,486 | ) | (85,246,486 | ) | |||||||||||
Net decrease | (6,455,886 | ) | (6,455,886 | ) | (39,872,740 | ) | (39,872,740 | ) | |||||||||||
Investor II Class Shares (1) | |||||||||||||||||||
Subscriptions | 3,055,450 | 3,055,450 | 6,399,021 | 6,399,021 | |||||||||||||||
Conversion | 8,775,062 | 8,775,062 | — | — | |||||||||||||||
Redemptions | (13,671,019 | ) | (13,671,019 | ) | (31,460,118 | ) | (31,460,118 | ) | |||||||||||
Net decrease | (1,840,507 | ) | (1,840,507 | ) | (25,061,097 | ) | (25,061,097 | ) | |||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 304,879,367 | 304,879,366 | 253,944,365 | 253,944,365 | |||||||||||||||
Distributions reinvested | 26,465 | 26,465 | 3,032 | 3,032 | |||||||||||||||
Redemptions | (306,859,932 | ) | (306,859,932 | ) | (312,073,960 | ) | (312,073,960 | ) | |||||||||||
Net decrease | (1,954,100 | ) | (1,954,101 | ) | (58,126,563 | ) | (58,126,563 | ) | |||||||||||
Marsico Shares | |||||||||||||||||||
Subscriptions | 3,622,426 | 3,622,426 | 6,266,182 | 6,266,182 | |||||||||||||||
Redemptions | (5,929,030 | ) | (5,929,030 | ) | (9,027,914 | ) | (9,027,914 | ) | |||||||||||
Net decrease | (2,306,604 | ) | (2,306,604 | ) | (2,761,732 | ) | (2,761,732 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 838,259,318 | 838,259,318 | 1,094,074,671 | 1,094,074,671 | |||||||||||||||
Distributions reinvested | 18,348 | 18,348 | 7,342 | 7,342 | |||||||||||||||
Redemptions | (856,090,818 | ) | (856,090,818 | ) | (1,286,374,689 | ) | (1,286,374,689 | ) | |||||||||||
Net decrease | (17,813,152 | ) | (17,813,152 | ) | (192,292,676 | ) | (192,292,676 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | 0.01 | 0.03 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.03 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | % | 0.00 | % | 0.00 | % | 0.89 | %(h) | 3.46 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.36 | % | 0.32 | % | 0.34 | % | 0.50 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.17 | % | 0.21 | % | 0.19 | % | 0.06 | % | 0.05 | % | |||||||||||||
Net investment income (i) | — | — | — | 1.03 | % | 3.51 | % | ||||||||||||||||
Net assets, end of period (000s) | $ | 1,741,542 | $ | 1,964,131 | $ | 4,362,143 | $ | 6,761,914 | $ | 13,868,350 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.35)% and 2.47%, respectively.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.002 | 0.001 | — | (d) | 0.01 | 0.04 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (d) | — | (d) | — | (d) | |||||||||||||
Total from investment operations | 0.002 | 0.001 | — | (d) | 0.01 | 0.04 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.002 | ) | (0.001 | ) | — | (d) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.16 | % | 0.11 | % | 0.13 | % | 1.13 | %(h) | 3.72 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.20 | % | 0.20 | % | 0.21 | % | 0.26 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.08 | % | 0.07 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (i) | 0.16 | % | 0.11 | % | 0.13 | % | 1.10 | % | 3.76 | % | |||||||||||||
Net assets, end of period (000s) | $ | 6,563,081 | $ | 4,638,454 | $ | 6,748,972 | $ | 9,410,196 | $ | 10,543,052 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.01 per share.
(e) Rounds to less than $0.001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.11)% and 2.73%, respectively.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
20
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | 0.01 | 0.03 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.03 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | % | 0.00 | % | 0.00 | % | 0.65 | %(h) | 3.10 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.35 | % | 0.32 | % | 0.34 | % | 0.75 | % | 0.80 | % | |||||||||||||
Waiver/Reimbursement | 0.52 | % | 0.56 | % | 0.54 | % | 0.16 | % | 0.05 | % | |||||||||||||
Net investment income (i) | — | — | — | 0.71 | % | 3.07 | % | ||||||||||||||||
Net assets, end of period (000s) | $ | 1,074,085 | $ | 1,672,737 | $ | 7,097,157 | $ | 12,642,466 | $ | 17,730,933 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.59)% and 2.12%, respectively.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
21
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.002 | 0.001 | — | (e) | 0.01 | 0.04 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (f) | — | (f) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | 0.002 | 0.001 | — | (e) | 0.01 | 0.04 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.002 | ) | (0.001 | ) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.16 | % | 0.11 | % | 0.13 | % | 1.13 | %(i) | 3.72 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.20 | % | 0.20 | % | 0.21 | % | 0.26 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.08 | % | 0.07 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (j) | 0.16 | % | 0.11 | % | 0.13 | % | 1.15 | % | 3.67 | % | |||||||||||||
Net assets, end of period (000s) | $ | 226,134 | $ | 353,702 | $ | 436,201 | $ | 610,474 | $ | 674,440 |
(a) On October 1, 2011, the Institutional Capital shares of the Fund commenced operations and the Class Z shares of the Fund converted into the Institutional Capital shares of the Fund. The financial information of the Fund's Institutional Capital shares prior to this conversion is that of the Class Z shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(c) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(d) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(e) Rounds to less than $0.01 per share.
(f) Rounds to less than $0.001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.11)% and 2.73%, respectively.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
22
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | — | (d) | 0.01 | 0.04 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (d) | — | (d) | — | (d) | |||||||||||||
Total from investment operations | 0.001 | 0.001 | — | (d) | 0.01 | 0.04 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | — | (d) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.12 | % | 0.07 | % | 0.09 | % | 1.09 | %(h) | 3.68 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.24 | % | 0.24 | % | 0.25 | % | 0.30 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.08 | % | 0.07 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (i) | 0.12 | % | 0.08 | % | 0.09 | % | 1.20 | % | 3.79 | % | |||||||||||||
Net assets, end of period (000s) | $ | 876,079 | $ | 997,386 | $ | 1,672,273 | $ | 2,349,743 | $ | 4,450,313 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.01 per share.
(e) Rounds to less than $0.001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.15)% and 2.69%, respectively.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
23
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | 0.01 | 0.03 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.03 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | % | 0.00 | % | 0.00 | % | 0.81 | %(h) | 3.36 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.35 | % | 0.32 | % | 0.33 | % | 0.59 | % | 0.55 | % | |||||||||||||
Waiver/Reimbursement | 0.27 | % | 0.31 | % | 0.30 | % | 0.07 | % | 0.05 | % | |||||||||||||
Net investment income (i) | — | — | — | 0.91 | % | 3.43 | % | ||||||||||||||||
Net assets, end of period (000s) | $ | 24,251 | $ | 30,707 | $ | 70,579 | $ | 380,937 | $ | 696,449 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.43)% and 2.37%, respectively.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
24
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor II Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | 0.01 | 0.03 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (f) | — | (f) | — | (f) | |||||||||||||
Total from investment operations | — | (e) | — | (e) | — | (f) | 0.01 | 0.03 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.00 | % | 0.00 | % | 0.00 | % | 0.74 | %(i)(j) | 3.26 | %(i)(j) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (k) | 0.35 | % | 0.32 | % | 0.33 | % | 0.66 | % | 0.65 | % | |||||||||||||
Waiver/Reimbursement | 0.37 | % | 0.41 | % | 0.40 | % | 0.10 | % | 0.05 | % | |||||||||||||
Net investment income (k) | — | — | — | 0.94 | %(j) | 3.03 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 29,405 | $ | 31,245 | $ | 56,305 | $ | 382,035 | $ | 692,142 |
(a) After the close of business on September 30, 2011, Class A shares were renamed Investor II Class shares and Class B shares and Class C shares converted into Investor II Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(e) Rounds to less than $0.001 per share.
(f) Rounds to less than $0.01 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.50)% and 2.27%, respectively.
(j) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
25
Financial Highlights – BofA Cash Reserves
Selected date for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (e) | 0.01 | 0.04 | |||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.04 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.02 | % | 0.00 | %(h) | 0.01 | % | 0.98 | %(i) | 3.57 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.34 | % | 0.31 | % | 0.33 | % | 0.41 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.22 | % | 0.20 | % | 0.15 | % | 0.15 | % | |||||||||||||
Net investment income (j) | 0.02 | % | — | %(h) | 0.01 | % | 1.07 | % | 3.64 | % | |||||||||||||
Net assets, end of period (000s) | $ | 114,588 | $ | 116,540 | $ | 174,664 | $ | 463,145 | $ | 811,513 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.26)% and 2.58%, respectively.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
26
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Marsico Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | 0.01 | 0.03 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.03 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | % | 0.00 | % | 0.00 | % | 0.81 | %(h) | 3.36 | %(h)(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.35 | % | 0.31 | % | 0.34 | % | 0.58 | % | 0.55 | % | |||||||||||||
Waiver/Reimbursement | 0.27 | % | 0.32 | % | 0.29 | % | 0.08 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | — | — | 0.84 | % | 3.15 | %(i) | ||||||||||||||||
Net assets, end of period (000s) | $ | 9,041 | $ | 11,348 | $ | 14,109 | $ | 18,497 | $ | 22,075 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.43)% and 2.37%, respectively.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
27
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | — | (d) | — | (e) | 0.01 | 0.04 | ||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | 0.001 | — | (d) | — | (e) | 0.01 | 0.04 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | — | (d) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.06 | % | 0.02 | % | 0.04 | % | 1.03 | %(h) | 3.62 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.30 | % | 0.29 | % | 0.30 | % | 0.36 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.09 | % | 0.08 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (i) | 0.06 | % | 0.02 | % | 0.04 | % | 1.14 | % | 3.72 | % | |||||||||||||
Net assets, end of period (000s) | $ | 736,836 | $ | 754,638 | $ | 946,914 | $ | 934,916 | $ | 1,721,466 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Cash Reserves was renamed BofA Cash Reserves.
(c) On December 31, 2009, Columbia Cash Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Cash Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had affiliates of the investment advisor not reimbursed the Fund for realized losses on securities and not provided capital support, total return at August 31, 2009 and August 31, 2008 would have been (1.21)% and 2.63%, respectively.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
28
Notes to Financial Statements – BofA Cash Reserves
August 31, 2012
Note 1. Organization
BofA Cash Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers ten classes of shares: Adviser Class, Capital Class, Daily Class, Institutional Capital, Institutional Class, Investor Class, Investor II Class, Liquidity Class, Marsico and Trust Class shares. Each class of shares is offered continuously at net asset value. After the close of business on September 30, 2011, Class A shares were renamed Investor II Class shares and Class B shares and Class C shares converted into Investor II Class shares. On October 1, 2011, Institutional Capital shares commenced operations and Class Z shares were converted into Institutional Capital shares.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
29
BofA Cash Reserves, August 31, 2012
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that BofA Advisors, LLC ("BofA"), the Fund's investment advisor, has determined are creditworthy. The Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement, which may include securities that the Fund is not otherwise directly permitted to purchase. BofA is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on the Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated
to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
30
BofA Cash Reserves, August 31, 2012
Note 3. Capital Support
On October 5, 2009, an affiliate of BofA purchased certain securities owned by the Fund. In addition, on October 8, 2009, an affiliate of BofA made a capital contribution to the Fund of $21,755,102.
Note 4. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from non-deductible excise tax adjustments were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Loss | Paid-In Capital | |||||||||
$ | 170,824 | $ | — | $ | (170,824 | ) |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from | 2012 | 2011 | |||||||||
Ordinary Income* | $ | 10,619,734 | $ | 8,095,789 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 5,162,174 | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
As of August 31, 2012, the Fund had pre-Act capital loss carryforwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carry Forwards | ||||||
2017 | $ | 2,365,752 |
Capital loss carry forwards of $173,312 were utilized by the Fund during the year ended August 31, 2012.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior
31
BofA Cash Reserves, August 31, 2012
three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
32
BofA Cash Reserves, August 31, 2012
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted distribution plans ("Distribution Plans") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class, Daily Class, Investor Class, Investor II Class, Liquidity Class and Marsico shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Class B Shares* | 0.75 | % | 0.75 | % | |||||||
Class C Shares* | 0.75 | % | 0.75 | % | |||||||
Daily Class Shares | 0.35 | % | 0.35 | % | |||||||
Investor Class Shares | 0.10 | % | 0.10 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Liquidity Class Shares | 0.15 | %** | 0.25 | %*** |
Servicing Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Adviser Class Shares | 0.25 | % | 0.25 | % | |||||||
Class B Shares* | 0.25 | % | 0.25 | % | |||||||
Class C Shares* | 0.25 | % | 0.25 | % | |||||||
Daily Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor II Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %** | 0.25 | %*** | |||||||
Marsico Shares | 0.25 | % | 0.25 | % |
* After the close of business on September 30, 2011, the Fund's Class B shares and Class C shares converted into the Fund's Investor II Class shares.
** The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012.
*** To the extent that the Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class, Investor II Class, Marsico and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
33
BofA Cash Reserves, August 31, 2012
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Class B Shares* | 0.10 | % | 0.10 | % | |||||||
Class C Shares* | 0.10 | % | 0.10 | % | |||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Marsico Shares | 0.10 | % | 0.10 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
* After the close of business on September 30, 2011, the Fund's Class B shares and Class C shares converted into the Fund's Investor II Class shares.
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012 so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net
assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense limitation in effect at the time the expenses to be recovered were incurred.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 08/31/2012 | |||||||||||||||
$ | 8,236,952 | $ | 11,280,667 | $ | 19,267,225 | $ | 38,784,844 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current
34
BofA Cash Reserves, August 31, 2012
period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 6. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $96 for the Fund.
Note 7. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's
borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
Note 8. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 9. Significant Risks and Contingencies
Securities Risk
The Fund is subject to interest rate and credit risk. The value of debt securities may decline as interest rates increase. The Fund could lose money if the issuer of a fixed income security is unable to pay interest or repay principal when it is due.
The Fund is subject to mortgage-related risk. The value of mortgage-backed securities can fall if the owners of the underlying mortgages default or pay off their mortgages sooner than expected, which could happen when interest rates fall, or pay off their mortgages later than expected, which could happen when interest rates rise.
The Fund is subject to asset-backed securities risk. Payment of interest and repayment of principal may be impacted by the cash flows generated by the assets backing these securities. The value of the Fund's asset-backed securities may also be affected by changes in interest rates, the availability of information concerning the interests in and structure of the pools of purchase contracts, financing leases or sales agreements that are
35
BofA Cash Reserves, August 31, 2012
represented by these securities, the creditworthiness of the underlying securities or the servicing agent for the pool, the originator of the loans or receivables, or the entities that provide any supporting letters of credit, surety bonds, or other credit enhancements.
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
36
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Cash Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA Cash Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
37
Federal Income Tax Information (Unaudited) – BofA Cash Reserves
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
38
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
39
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. |
40
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
41
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Cash Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
45
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Cash Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-CSHR-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA Government Plus Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 5 | ||||||
Statement of Operations | 7 | ||||||
Statement of Changes in Net Assets | 8 | ||||||
Financial Highlights | 11 | ||||||
Notes to Financial Statements | 20 | ||||||
Report of Independent Registered Public Accounting Firm | 27 | ||||||
Federal Income Tax Information | 28 | ||||||
Fund Governance | 29 | ||||||
Important Information About This Report | 33 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Government Plus Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.23 | 0.90 | 0.92 | 0.18 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.28 | 0.85 | 0.87 | 0.17 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.28 | 0.85 | 0.87 | 0.17 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.28 | 0.85 | 0.87 | 0.17 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.28 | 0.85 | 0.87 | 0.17 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.23 | 0.90 | 0.92 | 0.18 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.23 | 0.90 | 0.92 | 0.18 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.23 | 0.90 | 0.92 | 0.18 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.23 | 0.90 | 0.92 | 0.18 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA Government Plus Reserves
August 31, 2012
Government & Agency Obligations – 53.6%
Par ($) | Value ($) | ||||||||||
U.S. Government Agencies – 32.7% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.140% 01/28/13 (a) | 1,780,000 | 1,779,575 | |||||||||
0.166% 10/26/12 (09/26/12) (b)(c) | 2,000,000 | 1,999,910 | |||||||||
0.176% 09/27/13 (09/27/12) (b)(c) | 6,000,000 | 5,999,026 | |||||||||
0.185% 11/29/12 (09/29/12) (b)(c) | 6,000,000 | 5,999,703 | |||||||||
0.185% 07/29/13 (09/29/12) (b)(c) | 150,000 | 149,863 | |||||||||
0.216% 08/01/13 (09/01/12) (b)(c) | 4,000,000 | 3,999,269 | |||||||||
0.220% 04/16/13 | 155,000 | 155,022 | |||||||||
0.240% 02/01/13 (11/01/12) (b)(c) | 1,500,000 | 1,499,873 | |||||||||
0.249% 11/13/12 (09/13/12) (b)(c) | 2,163,000 | 2,163,160 | |||||||||
0.259% 10/12/12 (09/12/12) (b)(c) | 500,000 | 500,034 | |||||||||
0.259% 12/13/12 (09/13/12) (b)(c) | 1,686,000 | 1,686,241 | |||||||||
0.260% 01/10/13 (09/10/12) (b)(c) | 4,400,000 | 4,399,760 | |||||||||
0.264% 11/05/12 (09/05/12) (b)(c) | 310,000 | 310,023 | |||||||||
0.280% 11/26/12 (09/04/12) (b)(c) | 6,000,000 | 6,000,000 | |||||||||
0.300% 05/03/13 (11/03/12) (b)(c) | 590,000 | 590,200 | |||||||||
0.340% 11/27/13 (09/04/12) (b)(c) | 6,500,000 | 6,500,000 | |||||||||
0.346% 10/01/12 (09/01/12) (b)(c) | 1,000,000 | 1,000,117 | |||||||||
0.378% 03/22/13 (09/22/12) (b)(c) | 3,000,000 | 2,999,991 | |||||||||
0.389% 02/07/13 (11/07/12) (b)(c) | 2,000,000 | 1,999,930 | |||||||||
0.396% 01/25/13 (10/25/12) (b)(c) | 1,122,000 | 1,122,043 | |||||||||
Federal Home Loan Bank | |||||||||||
0.125% 04/23/13 (a) | 85,000 | 84,958 | |||||||||
0.125% 04/30/13 (a) | 1,000,000 | 999,353 | |||||||||
0.170% 01/18/13 (a) | 4,825,000 | 4,824,380 | |||||||||
0.170% 01/23/13 (a) | 4,250,000 | 4,249,428 | |||||||||
0.186% 10/25/12 (09/25/12) (b)(c) | 3,000,000 | 2,999,910 | |||||||||
0.186% 11/26/12 (09/26/12) (b)(c) | 14,500,000 | 14,499,306 | |||||||||
0.190% 01/14/13 (a) | 1,170,000 | 1,169,962 |
Par ($) | Value ($) | ||||||||||
0.200% 11/29/12 | 400,000 | 400,056 | |||||||||
0.200% 04/30/13 (a) | 225,000 | 224,980 | |||||||||
0.220% 11/08/13 (09/04/12) (b)(c) | 525,000 | 524,748 | |||||||||
0.230% 05/10/13 | 2,575,000 | 2,575,493 | |||||||||
0.230% 11/08/13 (09/04/12) (b)(c) | 2,495,000 | 2,493,800 | |||||||||
0.240% 04/26/13 | 450,000 | 450,110 | |||||||||
0.240% 11/25/13 (09/04/12) (b)(c) | 500,000 | 499,875 | |||||||||
0.250% 04/10/13 | 2,555,000 | 2,555,811 | |||||||||
0.370% 04/26/13 | 965,000 | 966,051 | |||||||||
1.625% 11/21/12 | 150,000 | 150,488 | |||||||||
5.985% 04/15/13 | 280,000 | 290,031 | |||||||||
Federal Home Loan Mortgage Corp. | |||||||||||
0.155% 11/01/12 (a) | 1,500,000 | 1,499,606 | |||||||||
0.175% 10/03/12 (a) | 375,000 | 374,942 | |||||||||
0.186% 11/02/12 (09/02/12) (b)(c) | 1,600,000 | 1,599,947 | |||||||||
0.188% 06/17/13 (09/17/12) (b)(c) | 2,000,000 | 1,999,200 | |||||||||
0.190% 01/14/13 (a) | 4,175,000 | 4,172,025 | |||||||||
0.194% 02/04/13 (09/04/12) (b)(c) | 8,000,000 | 7,998,260 | |||||||||
0.195% 06/03/13 (09/03/12) (b)(c) | 1,500,000 | 1,499,543 | |||||||||
0.197% 03/21/13 (09/21/12) (b)(c) | 4,000,000 | 3,998,885 | |||||||||
0.280% 10/12/12 (09/04/12) (b)(c) | 467,000 | 466,989 | |||||||||
0.440% 11/18/13 (09/04/12) (b)(c) | 5,799,000 | 5,799,960 | |||||||||
1.625% 04/15/13 | 10,108,000 | 10,197,766 | |||||||||
4.500% 01/15/13 | 6,345,000 | 6,445,622 | |||||||||
Federal National Mortgage Association | |||||||||||
0.155% 01/04/13 (a) | 4,565,000 | 4,562,543 | |||||||||
0.213% 11/08/13 (09/08/12) (b)(c) | 457,000 | 456,894 | |||||||||
0.217% 06/20/14 (09/20/12) (b)(c) | 3,170,000 | 3,168,846 | |||||||||
0.266% 12/28/12 (09/28/12) (b)(c) | 30,000 | 30,007 | |||||||||
0.267% 12/20/12 (09/20/12) (b)(c) | 3,000,000 | 2,999,817 | |||||||||
0.340% 11/23/12 (09/04/12) (b)(c) | 315,000 | 315,029 | |||||||||
0.345% 05/17/13 (11/17/12) (b)(c) | 57,000 | 57,014 | |||||||||
0.380% 10/17/13 (09/04/12) (b)(c) | 3,000,000 | 2,999,314 |
See Accompanying Notes to Financial Statements.
2
BofA Government Plus Reserves
August 31, 2012
Government & Agency Obligations (continued)
Par ($) | Value ($) | ||||||||||
0.400% 02/01/13 (11/01/12) (b)(c) | 3,050,000 | 3,049,810 | |||||||||
3.250% 04/09/13 | 4,986,000 | 5,077,371 | |||||||||
4.375% 03/15/13 | 1,000,000 | 1,022,398 | |||||||||
4.750% 11/19/12 | 1,250,000 | 1,262,411 | |||||||||
Tennessee Valley Authority | |||||||||||
6.000% 03/15/13 | 1,600,000 | 1,649,775 | |||||||||
U.S. Government Agencies Total | 163,516,454 | ||||||||||
U.S. Government Obligations – 20.9% | |||||||||||
U.S. Treasury Note | |||||||||||
0.375% 10/31/12 | 500,000 | 500,223 | |||||||||
0.500% 11/30/12 | 11,000,000 | 11,008,759 | |||||||||
0.625% 01/31/13 | 2,820,000 | 2,825,299 | |||||||||
1.125% 12/15/12 | 4,000,000 | 4,010,981 | |||||||||
1.375% 09/15/12 | 14,000,000 | 14,006,509 | |||||||||
1.375% 10/15/12 | 8,000,000 | 8,011,877 | |||||||||
1.375% 11/15/12 | 8,300,000 | 8,320,731 | |||||||||
1.375% 01/15/13 | 18,450,000 | 18,532,906 | |||||||||
1.375% 02/15/13 | 14,550,000 | 14,628,894 | |||||||||
1.750% 04/15/13 | 2,000,000 | 2,019,384 | |||||||||
3.125% 04/30/13 | 2,835,000 | 2,890,274 | |||||||||
3.375% 11/30/12 | 8,500,000 | 8,566,580 | |||||||||
3.875% 10/31/12 | 4,000,000 | 4,024,502 | |||||||||
3.875% 02/15/13 | 2,450,000 | 2,491,030 | |||||||||
4.000% 11/15/12 | 2,500,000 | 2,519,615 | |||||||||
U.S. Government Obligations Total | 104,357,564 | ||||||||||
Total Government & Agency Obligations (cost of $267,874,018) | 267,874,018 | ||||||||||
Repurchase Agreements – 46.3% | |||||||||||
Repurchase agreement with ABN AMRO Bank US, dated 08/31/12, due 09/04/12 at 0.200%, collateralized by a U.S. Treasury obligation maturing 01/15/21, market value $81,600,048 (repurchase proceeds $80,001,778) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with Bank of Nova Scotia, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by a U.S. Government Agency obligation maturing 05/01/42, market value $30,600,646 (repurchase proceeds $30,000,633) | 30,000,000 | 30,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Credit Suisse First Boston, dated 07/13/12, due 10/11/12 at 0.250%, collateralized by a U.S. Government Agency obligation maturing 02/01/41, market value $10,200,647 (repurchase proceeds $10,006,250) | 10,000,000 | 10,000,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/21/12, due 11/19/12 at 0.230%, collateralized by a U.S. Government Agency obligation maturing 02/01/41, market value $4,593,325 (repurchase proceeds $4,502,588) | 4,500,000 | 4,500,000 | |||||||||
Repurchase agreement with Goldman Sachs, dated 08/31/12, due 09/04/12 at 0.200%, collateralized by a U.S. Government Agency obligation maturing 09/06/13, market value $4,994,308 (repurchase proceeds $4,895,109) | 4,895,000 | 4,895,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government Agency obligations with various maturities to 02/20/42, market value $40,800,001 (repurchase proceeds $40,000,844) | 40,000,000 | 40,000,000 | |||||||||
Repurchase agreement with Societe Generale, dated 08/31/12, due 09/04/12 at 0.200%, collateralized by a U.S. Government Agency obligation maturing 11/01/31, market value $51,000,000 (repurchase proceeds $50,001,111) | 50,000,000 | 50,000,000 |
See Accompanying Notes to Financial Statements.
3
BofA Government Plus Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with UBS Securities LLC, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by a U.S. Treasury obligation maturing 04/15/28, market value $9,697,327 (repurchase proceeds $9,507,201) | 9,507,000 | 9,507,000 | |||||||||
Repurchase agreement with UBS Securities LLC, dated 08/31/12, due 09/04/12 at 0.210%, collateralized by U.S. Government Agency obligations and corporate bonds with various maturities to 12/28/12, market value $2,518,350 (repurchase proceeds $2,445,057) | 2,445,000 | 2,445,000 | |||||||||
Total Repurchase Agreements (cost of $231,347,000) | 231,347,000 | ||||||||||
Total Investments – 99.9% | |||||||||||
(cost of $499,221,018) (d) | 499,221,018 | ||||||||||
Other Assets & Liabilities, Net – 0.1% | 604,601 | ||||||||||
Net Assets – 100.0% | 499,825,619 |
Notes to Investment Portfolio:
(a) The rate shown represents the discount rate at the date of purchase.
(b) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2012.
(c) Parenthetical date represents the effective maturity date for the security.
(d) Cost for federal income tax purposes is $499,221,018.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Government & Agency Obligations | $ | — | $ | 267,874,018 | $ | — | $ | 267,874,018 | |||||||||||
Total Repurchase Agreements | — | 231,347,000 | — | 231,347,000 | |||||||||||||||
Total Investments | $ | — | $ | 499,221,018 | $ | — | $ | 499,221,018 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Government & Agency Obligations | 53.6 | ||||||
Repurchase Agreements | 46.3 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
4
Statement of Assets and Liabilities – BofA Government Plus Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 267,874,018 | |||||||||
Repurchase agreements, at amortized cost approximating value | 231,347,000 | ||||||||||
Total investments, at value | 499,221,018 | ||||||||||
Cash | 254 | ||||||||||
Receivable for: | |||||||||||
Interest | 715,081 | ||||||||||
Expense reimbursement due from investment advisor | 17,209 | ||||||||||
Trustees' deferred compensation plan | 33,144 | ||||||||||
Prepaid expenses | 10,807 | ||||||||||
Other assets | 18,139 | ||||||||||
Total Assets | 500,015,652 | ||||||||||
Liabilities | Payable for: | ||||||||||
Distributions | 4,700 | ||||||||||
Investment advisory fee | 47,059 | ||||||||||
Pricing and bookkeeping fees | 11,363 | ||||||||||
Transfer agent fee | 5,215 | ||||||||||
Trustees' fees | 2,891 | ||||||||||
Audit fee | 33,850 | ||||||||||
Legal fee | 31,761 | ||||||||||
Custody fee | 9,587 | ||||||||||
Chief compliance officer expenses | 1,379 | ||||||||||
Trustees' deferred compensation plan | 33,144 | ||||||||||
Other liabilities | 9,084 | ||||||||||
Total Liabilities | 190,033 | ||||||||||
Net Assets | 499,825,619 | ||||||||||
Net Assets Consist of | Paid-in capital | 499,837,471 | |||||||||
Overdistributed net investment income | (11,852 | ) | |||||||||
Net Assets | 499,825,619 |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities (continued) – BofA Government Plus Reserves
August 31, 2012
Adviser Class Shares | Net assets | $ | 6,106,182 | ||||||||
Shares outstanding | 6,106,055 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares (1) | Net assets | $ | 338,931,816 | ||||||||
Shares outstanding | 338,924,702 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares (1) | Net assets | $ | 12,028,252 | ||||||||
Shares outstanding | 12,028,030 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares (1) | Net assets | $ | 58,622,396 | ||||||||
Shares outstanding | 58,621,258 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 16,128,045 | ||||||||
Shares outstanding | 16,127,734 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares (1) | Net assets | $ | 133,511 | ||||||||
Shares outstanding | 133,509 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares (1) | Net assets | $ | 467,022 | ||||||||
Shares outstanding | 467,012 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 5,138,040 | ||||||||
Shares outstanding | 5,137,930 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 62,270,355 | ||||||||
Shares outstanding | 62,269,079 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
6
Statement of Operations – BofA Government Plus Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 958,304 | |||||||||
Expenses | Investment advisory fee | 1,049,239 | |||||||||
Administration fee | 265,585 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares (1) | 7,141 | ||||||||||
Investor Class Shares (1) | 92 | ||||||||||
Investor II Class Shares (1) | 114 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 16,123 | ||||||||||
Daily Class Shares (1) | 5,100 | ||||||||||
Investor Class Shares (1) | 230 | ||||||||||
Investor II Class Shares (1) | 285 | ||||||||||
Liquidity Class Shares | 12,844 | ||||||||||
Retail A Shares (1) | 291 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 18,287 | ||||||||||
Investor II Class Shares (1) | 114 | ||||||||||
Trust Class Shares | 72,694 | ||||||||||
Transfer agent fee | 29,064 | ||||||||||
Pricing and bookkeeping fees | 132,966 | ||||||||||
Trustees' fees | 50,525 | ||||||||||
Custody fee | 37,970 | ||||||||||
Legal fees | 140,052 | ||||||||||
Chief compliance officer expenses | 7,646 | ||||||||||
Other expenses | 197,037 | ||||||||||
Total Expenses | 2,043,399 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (1,000,277 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (16,108 | ) | |||||||||
Daily Class Shares (1) | (12,227 | ) | |||||||||
Institutional Class Shares | (18,372 | ) | |||||||||
Investor Class Shares (1) | (317 | ) | |||||||||
Investor II Class Shares (1) | (510 | ) | |||||||||
Liquidity Class Shares | (12,830 | ) | |||||||||
Retail A Shares (1) | (291 | ) | |||||||||
Trust Class Shares | (72,503 | ) | |||||||||
Expense reductions | (1 | ) | |||||||||
Net Expenses | 909,963 | ||||||||||
Net Investment Income | 48,341 | ||||||||||
Net Increase Resulting from Operations | 48,341 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
7
Statement of Changes in Net Assets – BofA Government Plus Reserves
Increase (Decrease) in Net Assets | Year Ended August 31, 2012 ($) | Year Ended August 31, 2011 ($) | |||||||||||||
Operations | Net investment income | 48,341 | 88,724 | ||||||||||||
Net realized gain on investments | — | 10,399 | |||||||||||||
Net increase resulting from operations | 48,341 | 99,123 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (730 | ) | — | ||||||||||||
Capital Class Shares (1) | (32,581 | ) | (74,813 | ) | |||||||||||
Daily Class Shares (1) | (400 | ) | — | ||||||||||||
G-Trust Shares (1) | — | (12,251 | ) | ||||||||||||
Institutional Capital Shares (1) | (5,494 | ) | — | ||||||||||||
Institutional Class Shares | (2,242 | ) | (1,659 | ) | |||||||||||
Investor Class Shares (1) | (9 | ) | — | ||||||||||||
Investor II Class Shares (1) | (13 | ) | — | ||||||||||||
Liquidity Class Shares | (465 | ) | — | ||||||||||||
Trust Class Shares | (6,403 | ) | — | ||||||||||||
Total distributions to shareholders | (48,337 | ) | (88,723 | ) | |||||||||||
Net Capital Stock Transactions | (215,575,785 | ) | (154,291,176 | ) | |||||||||||
Contribution from advisor (Note 7) | — | 325,079 | |||||||||||||
Total decrease in net assets | (215,575,781 | ) | (153,955,697 | ) | |||||||||||
Net Assets | Beginning of period | 715,401,400 | 869,357,097 | ||||||||||||
End of period | 499,825,619 | 715,401,400 | |||||||||||||
Overdistributed net investment income at end of period | (11,852 | ) | (3,740 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets (continued) – BofA Government Plus Reserves
Capital Stock Activity Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 10,459,051 | 10,459,051 | 762,600,295 | 762,600,295 | |||||||||||||||
Distributions reinvested | 714 | 714 | — | — | |||||||||||||||
Redemptions | (11,309,231 | ) | (11,309,231 | ) | (839,525,413 | ) | (839,525,413 | ) | |||||||||||
Net decrease | (849,466 | ) | (849,466 | ) | (76,925,118 | ) | (76,925,118 | ) | |||||||||||
Capital Class Shares (1) | |||||||||||||||||||
Subscriptions | 1,813,163,894 | 1,813,163,892 | 2,710,962,237 | 2,710,962,237 | |||||||||||||||
Conversion | 3,542,174 | 3,542,174 | — | — | |||||||||||||||
Distributions reinvested | 17,162 | 17,162 | 19,652 | 19,652 | |||||||||||||||
Redemptions | (1,969,877,470 | ) | (1,969,877,470 | ) | (2,754,086,162 | ) | (2,754,086,162 | ) | |||||||||||
Net decrease | (153,154,240 | ) | (153,154,242 | ) | (43,104,273 | ) | (43,104,273 | ) | |||||||||||
Daily Class Shares (1) | |||||||||||||||||||
Subscriptions | 31,066,208 | 31,066,208 | — | — | |||||||||||||||
Distributions reinvested | 9 | 9 | — | — | |||||||||||||||
Redemptions | (19,038,187 | ) | (19,038,187 | ) | — | — | |||||||||||||
Net increase | 12,028,030 | 12,028,030 | — | — | |||||||||||||||
Institutional Capital Shares (1) | |||||||||||||||||||
Subscriptions | 151,427,855 | 151,427,854 | 229,155,373 | 229,155,373 | |||||||||||||||
Distributions reinvested | — | — | 874 | 874 | |||||||||||||||
Redemptions | (143,142,313 | ) | (143,142,313 | ) | (256,864,330 | ) | (256,864,330 | ) | |||||||||||
Net increase (decrease) | 8,285,542 | 8,285,541 | (27,708,083 | ) | (27,708,083 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 113,704,705 | 113,704,705 | 260,393,849 | 260,393,849 | |||||||||||||||
Distributions reinvested | 2,242 | 2,242 | 1,645 | 1,645 | |||||||||||||||
Redemptions | (172,847,771 | ) | (172,847,771 | ) | (238,746,427 | ) | (238,746,427 | ) | |||||||||||
Net increase (decrease) | (59,140,824 | ) | (59,140,824 | ) | 21,649,067 | 21,649,067 | |||||||||||||
Investor Class Shares (1) | |||||||||||||||||||
Subscriptions | 133,504 | 133,504 | — | — | |||||||||||||||
Distributions reinvested | 9 | 9 | — | — | |||||||||||||||
Redemptions | (4 | ) | (4 | ) | — | — | |||||||||||||
Net increase | 133,509 | 133,509 | — | — | |||||||||||||||
Investor II Class Shares (1) | |||||||||||||||||||
Subscriptions | 1,485,433 | 1,485,433 | — | — | |||||||||||||||
Distributions reinvested | 9 | 9 | — | — | |||||||||||||||
Redemptions | (1,018,430 | ) | (1,018,430 | ) | — | — | |||||||||||||
Net increase | 467,012 | 467,012 | — | — |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA Government Plus Reserves
Capital Stock Activity Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Distributions reinvested | 465 | 465 | — | — | |||||||||||||||
Net increase | 465 | 465 | — | — | |||||||||||||||
Retail A Shares (1) | |||||||||||||||||||
Subscriptions | 570 | 570 | 41,740 | 41,740 | |||||||||||||||
Conversion | (3,542,174 | ) | (3,542,174 | ) | — | — | |||||||||||||
Redemptions | (27,487 | ) | (27,487 | ) | (1,280,625 | ) | (1,280,625 | ) | |||||||||||
Net decrease | (3,569,091 | ) | (3,569,091 | ) | (1,238,885 | ) | (1,238,885 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 86,952,617 | 86,952,617 | 167,230,566 | 167,230,566 | |||||||||||||||
Distributions reinvested | 214 | 215 | — | — | |||||||||||||||
Redemptions | (106,729,551 | ) | (106,729,551 | ) | (194,194,450 | ) | (194,194,450 | ) | |||||||||||
Net decrease | (19,776,720 | ) | (19,776,719 | ) | (26,963,884 | ) | (26,963,884 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
10
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 | 2010 (a)(b) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (c) | — | — | 0.006 | 0.032 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (c) | — | — | (0.006 | ) | (0.032 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | (c) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (d)(e) | 0.01 | % | 0.00 | %(f) | 0.00 | % | 0.58 | %(g) | 3.24 | %(g) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.16 | % | 0.22 | % | 0.22 | % | 0.43 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.42 | % | 0.34 | % | 0.31 | % | 0.10 | % | 0.10 | % | |||||||||||||
Net investment income (h) | 0.01 | % | — | — | 0.68 | %(g) | 2.41 | %(g) | |||||||||||||||
Net assets, end of period (000s) | $ | 6,106 | $ | 6,956 | $ | 83,849 | $ | 100,232 | $ | 156,679 |
(a) On May 1, 2010, Columbia Government Plus Reserves was renamed BofA Government Plus Reserves.
(b) On December 31, 2009, Columbia Government Plus Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Plus Reserves.
(c) Rounds to less than $0.001 per share.
(d) Total return at net asset value assuming all distributions reinvested.
(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(f) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(g) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
11
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | 0.008 | 0.034 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | (0.008 | ) | (0.034 | ) | |||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.01 | %(g) | 0.03 | % | 0.80 | % | 3.49 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.16 | % | 0.17 | % | 0.19 | % | 0.20 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.17 | % | 0.14 | % | 0.09 | % | 0.08 | % | 0.10 | % | |||||||||||||
Net investment income (i) | 0.01 | % | 0.01 | % | 0.03 | % | 0.67 | % | 3.31 | %(h) | |||||||||||||
Net assets, end of period (000s) | $ | 338,932 | $ | 492,086 | $ | 534,988 | $ | 1,071,570 | $ | 562,837 |
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(b) On May 1, 2010, Columbia Government Plus Reserves was renamed BofA Government Plus Reserves.
(c) On December 31, 2009, Columbia Government Plus Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Plus Reserves.
(d) Rounds to less than $0.001 per share.
(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(f) Total return at net asset value assuming all distributions reinvested.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout the period is as follows:
Period Ended August 31, | |||||||
Daily Class Shares | 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment income | — | (b) | |||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | (b) | |||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (c)(d) | 0.01 | %(e) | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (f) | 0.16 | %(g) | |||||
Waiver/Reimbursement | 0.77 | %(g) | |||||
Net investment income (f) | 0.02 | %(g) | |||||
Net assets, end of period (000s) | $ | 12,028 |
(a) Daily Class shares commenced operations on October 3, 2011. Per share data and total return reflect activity from that date.
(b) Rounds to less than $0.001 per share.
(c) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Annualized.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | 0.008 | 0.034 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | (0.008 | ) | (0.034 | ) | |||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.01 | %(g) | 0.03 | % | 0.80 | % | 3.49 | % | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.16 | % | 0.18 | % | 0.19 | % | 0.20 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.17 | % | 0.13 | % | 0.09 | % | 0.08 | % | 0.10 | % | |||||||||||||
Net investment income (h) | 0.01 | % | 0.02 | % | 0.02 | % | 0.81 | % | 3.45 | % | |||||||||||||
Net assets, end of period (000s) | $ | 58,622 | $ | 50,336 | $ | 78,011 | $ | 156,431 | $ | 189,029 |
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(b) On May 1, 2010, Columbia Government Plus Reserves was renamed BofA Government Plus Reserves.
(c) On December 31, 2009, Columbia Government Plus Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Plus Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return at net asset value assuming all distributions reinvested.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
14
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 | 2010 (a)(b) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (c) | — | (c) | — | (c) | 0.008 | 0.034 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (c) | — | (c) | — | (c) | (0.008 | ) | (0.034 | ) | |||||||||||||
Increase from Contribution from Advisor | — | — | (c) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (d)(e) | 0.01 | % | 0.00 | %(f)(g) | 0.01 | % | 0.76 | %(h) | 3.45 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.16 | % | 0.18 | % | 0.21 | % | 0.24 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.21 | % | 0.17 | % | 0.11 | % | 0.08 | % | 0.10 | % | |||||||||||||
Net investment income (i) | — | %(g) | — | %(g) | 0.01 | % | 0.58 | %(h) | 3.24 | %(h) | |||||||||||||
Net assets, end of period (000s) | $ | 16,128 | $ | 75,270 | $ | 53,599 | $ | 191,321 | $ | 72,527 |
(a) On May 1, 2010, Columbia Government Plus Reserves was renamed BofA Government Plus Reserves.
(b) On December 31, 2009, Columbia Government Plus Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Plus Reserves.
(c) Rounds to less than $0.001 per share.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) Total return at net asset value assuming all distributions reinvested.
(f) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(g) Rounds to less than 0.01%.
(h) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout the period is as follows:
Period Ended August 31, | |||||||
Investor Class Shares | 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment income | — | (b) | |||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | (b) | |||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (c)(d) | 0.01 | %(e) | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (f) | 0.16 | %(g) | |||||
Waiver/Reimbursement | 0.51 | %(g) | |||||
Net investment income (f) | 0.01 | %(g) | |||||
Net assets, end of period (000s) | $ | 134 |
(a) Investor Class shares commenced operations on October 3, 2011. Per share data and total return reflect activity from that date.
(b) Rounds to less than $0.001 per share.
(c) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Annualized.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout the period is as follows:
Period Ended August 31, | |||||||
Investor II Class Shares | 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment income | — | (b) | |||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | (b) | |||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (c)(d) | 0.01 | %(e) | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (f) | 0.16 | %(g) | |||||
Waiver/Reimbursement | 0.62 | %(g) | |||||
Net investment income (f) | 0.01 | %(g) | |||||
Net assets, end of period (000s) | $ | 467 |
(a) Investor II Class shares commenced operations on October 3, 2011. Per share data and total return reflect activity from that date.
(b) Rounds to less than $0.001 per share.
(c) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Annualized.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 | 2010 (a)(b) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (c) | — | — | (c) | 0.007 | 0.033 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (c) | — | — | (c) | (0.007 | ) | (0.033 | ) | ||||||||||||||
Increase from Contribution from Advisor | — | — | (c) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (d)(e) | 0.01 | % | 0.00 | %(f) | 0.00 | % | 0.66 | %(g) | 3.36 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.16 | % | 0.19 | % | 0.22 | % | 0.34 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.42 | % | 0.37 | % | 0.31 | % | 0.19 | % | 0.20 | % | |||||||||||||
Net investment income (h) | 0.01 | % | — | — | %(i) | 0.12 | %(g) | 3.30 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 5,138 | $ | 5,138 | $ | 5,136 | $ | 5,147 | $ | 11 |
(a) On May 1, 2010, Columbia Government Plus Reserves was renamed BofA Government Plus Reserves.
(b) On December 31, 2009, Columbia Government Plus Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Plus Reserves.
(c) Rounds to less than $0.001 per share.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) Total return at net asset value assuming all distributions reinvested.
(f) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(g) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 | 2010 (a)(b) | 2009 | 2008 (c) | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | — | (d) | 0.007 | 0.009 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | — | (d) | (0.007 | ) | (0.009 | ) | ||||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.00 | %(h) | 0.00 | %(i) | 0.71 | % | 0.94 | %(g) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.16 | % | 0.19 | % | 0.21 | % | 0.30 | % | 0.30 | %(k) | |||||||||||||
Waiver/Reimbursement | 0.27 | % | 0.22 | % | 0.17 | % | 0.08 | % | 0.10 | %(k) | |||||||||||||
Net investment income (j) | 0.01 | % | — | — | %(i) | 0.62 | % | 2.22 | %(k) | ||||||||||||||
Net assets, end of period (000s) | $ | 62,270 | $ | 82,047 | $ | 108,968 | $ | 216,878 | $ | 219,620 |
(a) On May 1, 2010, Columbia Government Plus Reserves was renamed BofA Government Plus Reserves.
(b) On December 31, 2009, Columbia Government Plus Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Plus Reserves.
(c) Trust Class Shares commenced operations on March 31, 2008.
(d) Rounds to less than $0.001 per share.
(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Not annualized.
(h) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(i) Rounds to less than 0.01%.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
(k) Annualized.
See Accompanying Notes to Financial Statements.
19
Notes to Financial Statements – BofA Government Plus Reserves
August 31, 2012
Note 1. Organization
BofA Government Plus Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares and the Fund offers nine classes of shares: Adviser Class, Capital Class, Daily Class, Institutional Capital, Institutional Class, Investor Class, Investor II Class, Liquidity Class and Trust Class shares. Each class of shares is offered continuously at net asset value. After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares. On October 1, 2011, Retail A shares were converted into Capital Class shares. On October 3, 2011, the Daily Class shares, Investor Class shares and Investor II Class shares commenced operations.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used.
20
BofA Government Plus Reserves, August 31, 2012
Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that BofA Advisors, LLC ("BofA"), the Fund's investment advisor, has determined are creditworthy. The Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement, which may include securities that the Fund is not otherwise directly permitted to purchase. BofA is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on the Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses
directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements
21
BofA Government Plus Reserves, August 31, 2012
is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from differing treatments for prior period adjustments were identified and reclassified among the components of the Fund's net assets as follows:
Overdistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In Capital | |||||||||
$ | (8,116 | ) | $ | — | $ | 8,116 |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from | 2012 | 2011 | |||||||||
Ordinary Income* | $ | 48,337 | $ | 88,723 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 331 | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior
22
BofA Government Plus Reserves, August 31, 2012
three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.18 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.16% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.14% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.067 | % | |||||
Over $125 billion | 0.020 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
23
BofA Government Plus Reserves, August 31, 2012
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted distribution plans ("Distribution Plans") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class, Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Daily Class Shares | 0.35 | % | 0.35 | % | |||||||
Investor Class Shares | 0.10 | % | 0.10 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Servicing Plans: | |||||||||||
Adviser Class Shares | 0.25 | % | 0.25 | % | |||||||
Daily Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % |
Servicing Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Investor II Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Retail A Shares*** | 0.10 | % | 0.10 | % |
* The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 at an annual rate of 0.10% of the Fund's Liquidity Class shares average daily net assets, so that combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012. The amount of the waiver is included in the fees waived by shareholder service provider on the Statement of Operations.
** To the extent that any Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
*** On October 1, 2011, the Fund's Retail A shares converted into the Fund's Capital Class shares, which has not adopted a Servicing Plan for such share class.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class, Investor II Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012, so that the Fund's ordinary operating expenses (excluding any
24
BofA Government Plus Reserves, August 31, 2012
distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time. Effective March 20, 2012, the Distributor and BofA have voluntarily agreed to reimburse expenses, as applicable, in order to maintain a minimum annualized net yield of 0.02% for all classes of the Fund.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a
non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $1 for the Fund.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
25
BofA Government Plus Reserves, August 31, 2012
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
Note 7. Capital Contribution
On November 29, 2010, an affiliate of BofA made a voluntary capital contribution to the Fund of $325,079.
Note 8. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 9. Significant Risks and Contingencies
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay
disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
26
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Government Plus Reserves
In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 BofA Government Plus Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
27
Federal Income Tax Information (Unaudited) – BofA Government Plus Reserves
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
28
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Trustee—MIT 401k Plan. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive—Officer-Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
29
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
30
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
31
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Government Plus Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
33
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Government Plus Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-GOVP-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA Government Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 4 | ||||||
Statement of Operations | 6 | ||||||
Statement of Changes in Net Assets | 7 | ||||||
Financial Highlights | 10 | ||||||
Notes to Financial Statements | 19 | ||||||
Report of Independent Registered Public Accounting Firm | 26 | ||||||
Federal Income Tax Information | 27 | ||||||
Fund Governance | 28 | ||||||
Important Information About This Report | 33 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Government Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.53 | 0.60 | 0.61 | 0.12 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA Government Reserves
August 31, 2012
Government & Agency Obligations – 99.9%
Par ($) | Value ($) | ||||||||||
U.S. Government Agencies – 44.1% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.140% 01/28/13 (a) | 9,320,000 | 9,317,580 | |||||||||
0.166% 10/26/12 (09/26/12) (b)(c) | 20,000,000 | 19,999,094 | |||||||||
0.176% 09/27/13 (09/27/12) (b)(c) | 68,000,000 | 67,988,961 | |||||||||
0.185% 07/29/13 (09/29/12) (b)(c) | 665,000 | 664,391 | |||||||||
0.207% 07/24/13 (09/24/12) (b)(c) | 705,000 | 704,491 | |||||||||
0.216% 08/01/13 (09/01/12) (b)(c) | 37,000,000 | 36,993,235 | |||||||||
0.220% 04/16/13 | 2,015,000 | 2,015,287 | |||||||||
0.226% 12/28/12 (09/28/12) (b)(c) | 77,000,000 | 77,000,070 | |||||||||
0.227% 11/19/13 (09/19/12) (b)(c) | 5,250,000 | 5,249,394 | |||||||||
0.236% 11/27/12 (09/27/12) (b)(c) | 13,000,000 | 13,000,321 | |||||||||
0.240% 02/01/13 (11/01/12) (b)(c) | 8,000,000 | 7,999,322 | |||||||||
0.249% 11/13/12 (09/13/12) (b)(c) | 11,090,000 | 11,090,909 | |||||||||
0.259% 10/12/12 (09/12/12) (b)(c) | 4,991,000 | 4,991,343 | |||||||||
0.259% 12/13/12 (09/13/12) (b)(c) | 66,242,000 | 66,245,661 | |||||||||
0.260% 01/10/13 (09/10/12) (b)(c) | 99,700,000 | 99,694,563 | |||||||||
0.264% 11/05/12 (09/05/12) (b)(c) | 3,720,000 | 3,720,270 | |||||||||
0.280% 11/26/12 (09/04/12) (b)(c) | 75,000,000 | 75,000,000 | |||||||||
0.280% 04/25/14 (09/04/12) (b)(c) | 235,000 | 234,309 | |||||||||
0.300% 04/11/13 (10/11/12) (b)(c) | 8,140,000 | 8,141,502 | |||||||||
0.300% 05/03/13 (11/03/12) (b)(c) | 6,870,000 | 6,872,331 | |||||||||
0.340% 11/27/13 (09/04/12) (b)(c) | 117,000,000 | 117,000,000 | |||||||||
0.346% 10/01/12 (09/01/12) (b)(c) | 6,000,000 | 6,000,701 | |||||||||
0.378% 03/22/13 (09/22/12) (b)(c) | 37,000,000 | 36,999,890 | |||||||||
0.389% 02/07/13 (11/07/12) (b)(c) | 82,000,000 | 81,997,144 | |||||||||
0.396% 01/25/13 (10/25/12) (b)(c) | 12,530,000 | 12,530,487 | |||||||||
1.375% 06/25/13 | 5,335,000 | 5,385,429 | |||||||||
2.500% 01/14/13 | 4,160,000 | 4,195,013 |
Par ($) | Value ($) | ||||||||||
Federal Home Loan Bank | |||||||||||
0.040% 09/05/12 (a) | 200,000,000 | 199,999,111 | |||||||||
0.100% 09/05/12 (a) | 204,650,000 | 204,647,726 | |||||||||
0.118% 09/05/12 (a) | 81,880,000 | 81,878,931 | |||||||||
0.118% 10/19/12 (a) | 193,590,000 | 193,559,542 | |||||||||
0.120% 09/12/12 (a) | 175,000,000 | 174,993,583 | |||||||||
0.125% 09/12/12 (a) | 25,812,000 | 25,811,014 | |||||||||
0.125% 09/26/12 (a) | 23,495,000 | 23,492,961 | |||||||||
0.125% 01/17/13 (a) | 4,910,000 | 4,908,540 | |||||||||
0.125% 04/30/13 (a) | 70,765,000 | 70,719,832 | |||||||||
0.130% 10/03/12 (a) | 149,165,000 | 149,147,763 | |||||||||
0.130% 01/02/13 (a) | 8,435,000 | 8,431,253 | |||||||||
0.134% 10/03/12 (a) | 5,970,000 | 5,969,289 | |||||||||
0.150% 12/07/12 (a) | 137,946,000 | 137,890,247 | |||||||||
0.150% 01/03/13 (a) | 8,405,000 | 8,400,657 | |||||||||
0.150% 01/07/13 (a) | 9,185,000 | 9,180,101 | |||||||||
0.153% 12/05/12 (a) | 13,525,000 | 13,519,539 | |||||||||
0.160% 11/13/12 (a) | 41,793,000 | 41,779,441 | |||||||||
0.160% 02/01/13 (a) | 40,895,000 | 40,892,570 | |||||||||
0.166% 12/27/12 (09/27/12) (b)(c) | 12,650,000 | 12,650,850 | |||||||||
0.170% 01/16/13 (a) | 62,240,000 | 62,199,734 | |||||||||
0.170% 01/18/13 (a) | 58,160,000 | 58,152,531 | |||||||||
0.170% 01/23/13 (a) | 4,230,000 | 4,229,348 | |||||||||
0.170% 01/23/13 (a) | 50,040,000 | 50,033,263 | |||||||||
0.175% 01/02/13 (a) | 70,135,000 | 70,093,065 | |||||||||
0.180% 02/15/13 (a) | 6,535,000 | 6,534,709 | |||||||||
0.186% 10/25/12 (09/25/12) (b)(c) | 56,300,000 | 56,298,318 | |||||||||
0.190% 01/14/13 (a) | 830,000 | 829,956 | |||||||||
0.190% 02/22/13 | 20,415,000 | 20,415,517 | |||||||||
0.190% 02/27/13 (a) | 5,500,000 | 5,499,728 | |||||||||
0.200% 11/19/12 | 29,000,000 | 29,003,979 | |||||||||
0.200% 11/29/12 | 14,000,000 | 14,001,964 | |||||||||
0.200% 03/01/13 | 4,000,000 | 4,000,046 | |||||||||
0.210% 01/04/13 | 2,165,000 | 2,165,040 | |||||||||
0.220% 11/08/13 (09/01/12) (b)(c) | 6,820,000 | 6,816,731 | |||||||||
0.230% 05/10/13 | 33,535,000 | 33,541,425 | |||||||||
0.230% 11/08/13 (09/01/12) (b)(c) | 59,190,000 | 59,161,523 | |||||||||
0.240% 11/25/13 (09/01/12) (b)(c) | 38,000,000 | 37,990,531 | |||||||||
0.250% 04/10/13 | 33,975,000 | 33,985,781 | |||||||||
0.250% 04/11/13 | 4,875,000 | 4,876,539 | |||||||||
0.300% 03/19/13 | 3,270,000 | 3,272,110 | |||||||||
0.310% 05/09/13 (09/01/12) (b)(c) | 23,200,000 | 23,200,000 | |||||||||
0.370% 04/26/13 | 12,420,000 | 12,433,524 | |||||||||
1.000% 03/27/13 | 14,565,000 | 14,630,866 | |||||||||
1.500% 01/16/13 | 9,195,000 | 9,239,335 |
See Accompanying Notes to Financial Statements.
2
BofA Government Reserves
August 31, 2012
Government & Agency Obligations (continued)
Par ($) | Value ($) | ||||||||||
1.625% 11/21/12 | 1,640,000 | 1,645,339 | |||||||||
1.625% 03/20/13 | 6,025,000 | 6,071,948 | |||||||||
1.750% 03/08/13 | 20,540,000 | 20,703,557 | |||||||||
2.625% 02/26/13 | 25,000 | 25,286 | |||||||||
3.375% 02/27/13 | 33,710,000 | 34,231,518 | |||||||||
3.875% 06/14/13 | 3,570,000 | 3,672,364 | |||||||||
5.000% 03/08/13 | 9,760,000 | 10,000,849 | |||||||||
U.S. Government Agencies Total | 2,887,861,072 | ||||||||||
U.S. Government Obligations – 55.8% | |||||||||||
U.S. Treasury Bill | |||||||||||
0.050% 09/06/12 (d) | 70,000,000 | 69,999,514 | |||||||||
0.060% 09/06/12 (d) | 393,345,000 | 393,341,722 | |||||||||
0.072% 09/17/12 (d) | 41,161,000 | 41,159,683 | |||||||||
0.075% 09/06/12 (d) | 100,000,000 | 99,998,958 | |||||||||
0.080% 09/06/12 (d) | 418,045,000 | 418,040,355 | |||||||||
0.085% 09/06/12 (d) | 37,640,000 | 37,639,556 | |||||||||
0.095% 09/06/12 (d) | 163,585,000 | 163,582,841 | |||||||||
0.105% 09/06/12 (d) | 149,355,000 | 149,352,822 | |||||||||
0.112% 09/17/12 (d) | 301,120,000 | 301,105,011 | |||||||||
0.113% 09/17/12 (d) | 165,628,000 | 165,619,718 | |||||||||
0.123% 09/17/12 (d) | 163,475,000 | 163,466,100 | |||||||||
0.130% 09/17/12 (d) | 376,800,000 | 376,778,229 | |||||||||
U.S. Treasury Note | |||||||||||
0.375% 09/30/12 | 53,000,000 | 53,011,458 | |||||||||
0.375% 10/31/12 | 5,500,000 | 5,502,457 | |||||||||
0.500% 11/30/12 | 127,000,000 | 127,100,814 | |||||||||
0.625% 01/31/13 | 35,130,000 | 35,196,008 | |||||||||
1.125% 12/15/12 | 90,000,000 | 90,244,716 |
Par ($) | Value ($) | ||||||||||
1.375% 09/15/12 | 137,310,000 | 137,374,520 | |||||||||
1.375% 10/15/12 | 54,000,000 | 54,080,862 | |||||||||
1.375% 11/15/12 | 30,000,000 | 30,074,086 | |||||||||
1.375% 01/15/13 | 236,400,000 | 237,456,507 | |||||||||
1.375% 02/15/13 | 103,500,000 | 104,062,315 | |||||||||
1.750% 04/15/13 | 56,200,000 | 56,744,067 | |||||||||
3.125% 04/30/13 | 37,660,000 | 38,394,260 | |||||||||
3.375% 11/30/12 | 58,100,000 | 58,555,110 | |||||||||
3.875% 10/31/12 | 95,500,000 | 96,084,282 | |||||||||
3.875% 02/15/13 | 42,720,000 | 43,435,422 | |||||||||
4.000% 11/15/12 | 100,500,000 | 101,292,848 | |||||||||
U.S. Government Obligations Total | 3,648,694,241 | ||||||||||
Total Government & Agency Obligations (cost of $6,536,555,313) | 6,536,555,313 | ||||||||||
Total Investments – 99.9% (cost of $6,536,555,313) (e) | 6,536,555,313 | ||||||||||
Other Assets & Liabilities, Net – 0.1% | 6,163,568 | ||||||||||
Net Assets – 100.0% | 6,542,718,881 |
Notes to Investment Portfolio:
(a) The rate shown represents the discount rate at the date of purchase.
(b) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2012.
(c) Parenthetical date represents the effective maturity date for the security.
(d) The rate shown represents the annualized yield at the date of purchase.
(e) Cost for federal income tax purposes is $6,536,555,313.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Government & Agency Obligations | $ | — | $ | 6,536,555,313 | $ | — | $ | 6,536,555,313 | |||||||||||
Total Investments | $ | — | $ | 6,536,555,313 | $ | — | $ | 6,536,555,313 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
U.S. Government Obligations | 55.8 | ||||||
U.S. Government Agencies | 44.1 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
3
Statement of Assets and Liabilities – BofA Government Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 6,536,555,313 | |||||||||
Cash | 577 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 310 | ||||||||||
Interest | 6,962,550 | ||||||||||
Trustees' deferred compensation plan | 22,843 | ||||||||||
Prepaid expenses | 81,344 | ||||||||||
Total Assets | 6,543,622,937 | ||||||||||
Liabilities | Expense reimbursement due to investment advisor | 7,110 | |||||||||
Payable for: | |||||||||||
Fund shares repurchased | 3,364 | ||||||||||
Distributions | 30,096 | ||||||||||
Investment advisory fee | 446,208 | ||||||||||
Administration fee | 209,989 | ||||||||||
Pricing and bookkeeping fees | 15,136 | ||||||||||
Transfer agent fee | 20,197 | ||||||||||
Trustees' fees | 6,356 | ||||||||||
Custody fee | 17,517 | ||||||||||
Chief compliance officer expenses | 3,120 | ||||||||||
Trustees' deferred compensation plan | 22,843 | ||||||||||
Other liabilities | 122,120 | ||||||||||
Total Liabilities | 904,056 | ||||||||||
Net Assets | 6,542,718,881 | ||||||||||
Net Assets Consist of | Paid-in capital | 6,543,163,471 | |||||||||
Overdistributed net investment income | (15,305 | ) | |||||||||
Accumulated net realized loss | (429,285 | ) | |||||||||
Net Assets | 6,542,718,881 |
See Accompanying Notes to Financial Statements.
4
Statement of Assets and Liabilities (continued) – BofA Government Reserves
August 31, 2012
($) | |||||||||||
Adviser Class Shares | Net assets | $ | 321,055,656 | ||||||||
Shares outstanding | 321,084,061 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares (1) | Net assets | $ | 3,784,266,370 | ||||||||
Shares outstanding | 3,784,620,861 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 75,176,317 | ||||||||
Shares outstanding | 75,182,927 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares (1) | Net assets | $ | 75,480,307 | ||||||||
Shares outstanding | 75,486,964 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 213,568,391 | ||||||||
Shares outstanding | 213,581,899 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 4,556,970 | ||||||||
Shares outstanding | 4,557,365 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares (1) | Net assets | $ | 1,729,232 | ||||||||
Shares outstanding | 1,729,386 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 142,670,644 | ||||||||
Shares outstanding | 142,681,726 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 1,924,214,994 | ||||||||
Shares outstanding | 1,924,373,763 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
5
Statement of Operations – BofA Government Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 7,144,206 | |||||||||
Expenses | Investment advisory fee | 9,657,538 | |||||||||
Administration fee | 6,298,359 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 298,980 | ||||||||||
Investor Class Shares | 5,878 | ||||||||||
Investor II Class Shares (1) | 1,362 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 956,215 | ||||||||||
Daily Class Shares | 213,504 | ||||||||||
Investor Class Shares | 14,676 | ||||||||||
Investor II Class Shares (1) | 3,403 | ||||||||||
Liquidity Class Shares | 349,347 | ||||||||||
Retail A Shares (1) | 1,919 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 129,388 | ||||||||||
Investor II Class Shares (1) | 1,362 | ||||||||||
Trust Class Shares | 1,923,966 | ||||||||||
Transfer agent fee | 125,389 | ||||||||||
Pricing and bookkeeping fees | 155,448 | ||||||||||
Trustees' fees | 76,609 | ||||||||||
Custody fee | 93,461 | ||||||||||
Chief compliance officer expenses | 16,621 | ||||||||||
Other expenses | 615,106 | ||||||||||
Total Expenses | 20,938,531 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (10,177,391 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (956,098 | ) | |||||||||
Daily Class Shares | (512,454 | ) | |||||||||
Institutional Capital Shares (1) | (6 | ) | |||||||||
Institutional Class Shares | (129,683 | ) | |||||||||
Investor Class Shares | (20,557 | ) | |||||||||
Investor II Class Shares (1) | (6,125 | ) | |||||||||
Liquidity Class Shares | (349,642 | ) | |||||||||
Retail A Shares (1) | (1,919 | ) | |||||||||
Trust Class Shares | (1,923,550 | ) | |||||||||
Expense reductions | (6,055 | ) | |||||||||
Net Expenses | 6,855,051 | ||||||||||
Net Investment Income | 289,155 | ||||||||||
Net realized gain on investments | 12,162 | ||||||||||
Net Increase Resulting from Operations | 301,317 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
6
Statement of Changes in Net Assets – BofA Government Reserves
Increase (Decrease) in Net Assets | Year Ended August 31, 2012 ($) | Year Ended August 31, 2011 ($) | |||||||||||||
Operations | Net investment income | 289,155 | 5,769 | ||||||||||||
Net realized gain on investments | 12,162 | 323,559 | |||||||||||||
Net increase resulting from operations | 301,317 | 329,328 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (17,523 | ) | (8,457 | ) | |||||||||||
Capital Class Shares (1) | (162,369 | ) | (91,106 | ) | |||||||||||
Class A Shares (1) | — | (24 | ) | ||||||||||||
Daily Class Shares | (3,432 | ) | (2,418 | ) | |||||||||||
G-Trust Shares (1) | — | (836 | ) | ||||||||||||
Institutional Capital Shares (1) | (5,254 | ) | — | ||||||||||||
Institutional Class Shares | (11,990 | ) | (8,757 | ) | |||||||||||
Investor Class | (225 | ) | (184 | ) | |||||||||||
Investor II Class Shares (1) | (66 | ) | — | ||||||||||||
Liquidity Class Shares | (5,179 | ) | (2,378 | ) | |||||||||||
Retail A Shares (1) | — | (419 | ) | ||||||||||||
Trust Class Shares | (83,116 | ) | (25,831 | ) | |||||||||||
Total distributions to shareholders | (289,154 | ) | (140,410 | ) | |||||||||||
Net Capital Stock Transactions | (25,004,079 | ) | (2,885,893,123 | ) | |||||||||||
Total decrease in net assets | (24,991,916 | ) | (2,885,704,205 | ) | |||||||||||
Net Assets | Beginning of period | 6,567,710,797 | 9,453,415,002 | ||||||||||||
End of period | 6,542,718,881 | 6,567,710,797 | |||||||||||||
Overdistributed net investment income at end of period | (15,305 | ) | (11,437 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
7
Statement of Changes in Net Assets (continued) – BofA Government Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 1,492,136,883 | 1,492,136,883 | 1,877,728,200 | 1,877,728,200 | |||||||||||||||
Distributions reinvested | 2,113 | 2,113 | 1,499 | 1,499 | |||||||||||||||
Redemptions | (1,564,415,429 | ) | (1,564,415,429 | ) | (2,181,419,905 | ) | (2,181,419,905 | ) | |||||||||||
Net decrease | (72,276,433 | ) | (72,276,433 | ) | (303,690,206 | ) | (303,690,206 | ) | |||||||||||
Capital Class Shares (1) | |||||||||||||||||||
Subscriptions | 10,158,039,538 | 10,158,039,538 | 15,876,441,875 | 15,876,441,875 | |||||||||||||||
Conversion | 25,992,068 | 25,992,068 | — | — | |||||||||||||||
Distributions reinvested | 109,396 | 109,396 | 66,016 | 66,016 | |||||||||||||||
Redemptions | (9,902,353,681 | ) | (9,902,353,681 | ) | (17,562,726,670 | ) | (17,562,726,670 | ) | |||||||||||
Net increase (decrease) | 281,787,321 | 281,787,321 | (1,686,218,779 | ) | (1,686,218,779 | ) | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 16,680,642 | 16,680,642 | 187,587,316 | 187,587,316 | |||||||||||||||
Distributions reinvested | 12 | 12 | 4 | 4 | |||||||||||||||
Redemptions | (47,684,833 | ) | (47,684,833 | ) | (551,330,973 | ) | (551,330,973 | ) | |||||||||||
Net decrease | (31,004,179 | ) | (31,004,179 | ) | (363,743,653 | ) | (363,743,653 | ) | |||||||||||
Institutional Capital Shares (1) | |||||||||||||||||||
Subscriptions | 355,561,030 | 355,561,029 | 150,984,272 | 150,984,272 | |||||||||||||||
Distributions reinvested | 2 | 2 | 17 | 17 | |||||||||||||||
Redemptions | (317,058,297 | ) | (317,058,297 | ) | (211,326,388 | ) | (211,326,388 | ) | |||||||||||
Net increase (decrease) | 38,502,735 | 38,502,734 | (60,342,099 | ) | (60,342,099 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 927,453,505 | 927,453,505 | 1,443,452,647 | 1,443,452,647 | |||||||||||||||
Distributions reinvested | 10,361 | 10,361 | 6,386 | 6,386 | |||||||||||||||
Redemptions | (1,241,203,752 | ) | (1,241,203,752 | ) | (2,012,584,527 | ) | (2,012,584,527 | ) | |||||||||||
Net decrease | (313,739,886 | ) | (313,739,886 | ) | (569,125,494 | ) | (569,125,494 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 20,149,345 | 20,149,345 | 23,631,426 | 23,631,426 | |||||||||||||||
Distributions reinvested | 11 | 11 | 2 | 2 | |||||||||||||||
Redemptions | (23,458,224 | ) | (23,458,224 | ) | (33,447,132 | ) | (33,447,132 | ) | |||||||||||
Net decrease | (3,308,868 | ) | (3,308,868 | ) | (9,815,704 | ) | (9,815,704 | ) | |||||||||||
Investor II Class Shares (1) | |||||||||||||||||||
Subscriptions | 1,267,351 | 1,267,350 | 10,218 | 10,218 | |||||||||||||||
Distributions reinvested | 57 | 57 | 17 | 17 | |||||||||||||||
Redemptions | (970,572 | ) | (970,572 | ) | (520,701 | ) | (520,701 | ) | |||||||||||
Net increase (decrease) | 296,836 | 296,835 | (510,466 | ) | (510,466 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets (continued) – BofA Government Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 1,121,882,888 | 1,121,882,888 | 1,380,249,790 | 1,380,249,790 | |||||||||||||||
Distributions reinvested | 5,289 | 5,289 | 1,646 | 1,646 | |||||||||||||||
Redemptions | (1,136,068,231 | ) | (1,136,068,231 | ) | (1,499,254,212 | ) | (1,499,254,212 | ) | |||||||||||
Net decrease | (14,180,054 | ) | (14,180,054 | ) | (119,002,776 | ) | (119,002,776 | ) | |||||||||||
Retail A Shares (1) | |||||||||||||||||||
Subscriptions | 100,710 | 100,709 | 1,188,486 | 1,188,487 | |||||||||||||||
Conversion | (25,992,068 | ) | (25,992,068 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 315 | 315 | |||||||||||||||
Redemptions | (156,387 | ) | (156,387 | ) | (7,943,046 | ) | (7,943,046 | ) | |||||||||||
Net decrease | (26,047,745 | ) | (26,047,746 | ) | (6,754,245 | ) | (6,754,244 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 3,525,012,759 | 3,525,012,759 | 5,099,231,601 | 5,099,231,601 | |||||||||||||||
Distributions reinvested | 315 | 315 | 276 | 276 | |||||||||||||||
Redemptions | (3,410,046,877 | ) | (3,410,046,877 | ) | (4,865,921,579 | ) | (4,865,921,579 | ) | |||||||||||
Net increase | 114,966,197 | 114,966,197 | 233,310,298 | 233,310,298 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
9
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0051 | 0.0309 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0051 | ) | (0.0309 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(h) | 0.00 | %(h) | 0.51 | % | 3.13 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.16 | % | 0.16 | % | 0.42 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.41 | % | 0.35 | % | 0.35 | % | 0.08 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | %(h) | — | %(h) | — | 0.57 | % | 2.97 | %(i) | ||||||||||||||
Net assets, end of period (000s) | $ | 321,056 | $ | 393,326 | $ | 696,992 | $ | 1,047,967 | $ | 1,820,646 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(c) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
10
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | (f) | 0.0071 | 0.0334 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (f) | (0.0071 | ) | (0.0334 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.71 | % | 3.39 | %(j) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (k) | 0.11 | % | 0.15 | % | 0.16 | % | 0.20 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.16 | % | 0.11 | % | 0.10 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (k) | — | %(i) | — | %(i) | — | %(i) | 0.68 | % | 3.08 | %(j) | |||||||||||||
Net assets, end of period (000s) | $ | 3,784,266 | $ | 3,502,524 | $ | 5,188,621 | $ | 11,711,498 | $ | 7,646,775 |
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(d) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(e) Rounds to less than $0.001 per share.
(f) Rounds to less than $0.0001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) Rounds to less than 0.01%.
(j) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
11
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0036 | 0.0274 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0036 | ) | (0.0274 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(h) | 0.00 | %(h) | 0.36 | % | 2.77 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.16 | % | 0.16 | % | 0.56 | % | 0.80 | % | |||||||||||||
Waiver/Reimbursement | 0.76 | % | 0.70 | % | 0.70 | % | 0.29 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | %(h) | — | %(h) | — | 0.36 | % | 2.57 | %(i) | ||||||||||||||
Net assets, end of period (000s) | $ | 75,176 | $ | 106,178 | $ | 469,892 | $ | 1,022,642 | $ | 898,522 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(c) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | (f) | 0.0071 | 0.0334 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (f) | (0.0071 | ) | (0.0334 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.71 | % | 3.39 | % | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.16 | % | 0.16 | % | 0.20 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.15 | % | 0.10 | % | 0.10 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (j) | 0.01 | % | — | %(i) | — | %(i) | 0.75 | % | 3.40 | % | |||||||||||||
Net assets, end of period (000s) | $ | 75,480 | $ | 36,981 | $ | 97,318 | $ | 129,606 | $ | 191,126 |
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(d) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(e) Rounds to less than $0.001 per share.
(f) Rounds to less than $0.0001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) Rounds to less than 0.01%.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0067 | 0.0330 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0067 | ) | (0.0330 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(h) | 0.00 | %(h) | 0.67 | % | 3.35 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.16 | % | 0.16 | % | 0.24 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.20 | % | 0.14 | % | 0.14 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | %(h) | — | %(h) | — | 0.66 | % | 2.98 | %(i) | ||||||||||||||
Net assets, end of period (000s) | $ | 213,568 | $ | 527,276 | $ | 1,096,358 | $ | 2,667,449 | $ | 2,617,573 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(c) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
14
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0046 | 0.0299 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0046 | ) | (0.0299 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(h) | 0.00 | %(h) | 0.46 | % | 3.03 | % | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.11 | % | 0.16 | % | 0.16 | % | 0.46 | % | 0.55 | % | |||||||||||||
Waiver/Reimbursement | 0.51 | % | 0.45 | % | 0.45 | % | 0.14 | % | 0.05 | % | |||||||||||||
Net investment income (i) | — | %(h) | — | %(h) | — | 0.42 | % | 2.99 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 4,557 | $ | 7,866 | $ | 17,681 | $ | 117,298 | $ | 107,656 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(c) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor II Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | 0.0043 | 0.0290 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (f) | (0.0043 | ) | (0.0290 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.43 | % | 2.94 | % | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.15 | % | 0.16 | % | 0.51 | % | 0.65 | % | |||||||||||||
Waiver/Reimbursement | 0.61 | % | 0.56 | % | 0.55 | % | 0.19 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | %(i) | — | %(i) | — | 0.41 | % | 2.84 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 1,729 | $ | 1,432 | $ | 1,943 | $ | 13,777 | $ | 11,110 |
(a) After the close of business on September 30, 2011, Class A shares were renamed Investor II Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(d) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(e) Rounds to less than $0.001 per share.
(f) Rounds to less than $0.0001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) Rounds to less than 0.01%.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Government Reserves
Selected date for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0057 | 0.0319 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0057 | ) | (0.0319 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(h) | 0.00 | %(h) | 0.57 | % | 3.23 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.15 | % | 0.16 | % | 0.34 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.41 | % | 0.36 | % | 0.35 | % | 0.16 | % | 0.15 | % | |||||||||||||
Net investment income (j) | — | %(h) | — | %(h) | — | %(h) | 0.61 | % | 2.93 | %(i) | |||||||||||||
Net assets, end of period (000s) | $ | 142,671 | $ | 156,846 | $ | 275,844 | $ | 864,213 | $ | 1,225,417 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(c) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0061 | 0.0324 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0061 | ) | (0.0324 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(h) | 0.00 | %(h) | 0.61 | % | 3.29 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.15 | % | 0.16 | % | 0.29 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.26 | % | 0.21 | % | 0.20 | % | 0.06 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | %(h) | — | %(h) | — | 0.56 | % | 2.44 | %(i) | ||||||||||||||
Net assets, end of period (000s) | $ | 1,924,215 | $ | 1,809,236 | $ | 1,575,967 | $ | 2,678,358 | $ | 1,948,302 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Government Reserves was renamed BofA Government Reserves.
(c) On December 31, 2009, Columbia Government Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Government Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and asumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
18
Notes to Financial Statements – BofA Government Reserves
August 31, 2012
Note 1. Organization
BofA Government Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers nine classes of shares: Adviser Class, Capital Class, Daily Class, Institutional Capital Class, Institutional Class, Investor Class, Investor II Class, Liquidity Class and Trust Class shares. Each class of shares is offered continuously at net asset value. After the close of business on September 30, 2011, Class A shares were renamed Investor II Class shares and G-Trust shares were renamed Institutional Capital shares. On October 1, 2011, Retail A shares were converted into Capital Class shares.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
19
BofA Government Reserves, August 31, 2012
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be
subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from differing treatments for prior period adjustments were
20
BofA Government Reserves, August 31, 2012
identified and reclassified among the components of the Fund's net assets as follows:
Overdistributed Net Investment Income | Accumulated Net Realized Loss | Paid-In Capital | |||||||||
$ | (3,869 | ) | $ | — | $ | 3,869 |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from: | 2012 | 2011 | |||||||||
Ordinary Income* | $ | 289,154 | $ | 140,410 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | ||||||
$ | 21,444 | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss
carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
As of August 31, 2012, the Fund had pre-Act capital loss carryforwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carry Forwards | ||||||
2014 | $ | 429,285 |
Capital loss carry forwards of $12,162 were utilized by the Fund during the year ended August 31, 2012.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA Advisors, LLC ("BofA"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund
21
BofA Government Reserves, August 31, 2012
and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services
Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
22
BofA Government Reserves, August 31, 2012
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted distribution plans ("Distribution Plans") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class, Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Daily Class Shares | 0.35 | % | 0.35 | % | |||||||
Investor Class Shares | 0.10 | % | 0.10 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Servicing Plans: | |||||||||||
Adviser Class shares | 0.25 | % | 0.25 | % | |||||||
Daily Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor II Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Retail A Shares*** | 0.09 | % | 0.09 | % |
* The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that
combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012.
** To the extent that the Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
*** On October 1, 2011, the Fund's Retail A shares converted into the Fund's Capital Class shares, which has not adopted a Servicing Plan for such share class.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class, Investor II Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012, so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
23
BofA Government Reserves, August 31, 2012
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time. Effective March 20, 2012, the Distributor and BofA have voluntarily agreed to reimburse expenses, as applicable, in order to
maintain a minimum annualized net yield of 0.01% for all classes of the Fund.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense limitation in effect at the time the expenses to be recovered were incurred.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 08/31/2012 | |||||||||||||||
$ | 4,148,892 | $ | 5,576,141 | $ | 7,840,966 | $ | 17,565,999 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market
fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $6,055 for the Fund.
24
BofA Government Reserves, August 31, 2012
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
Note 7. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 8. Significant Risks and Contingencies
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
25
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Government Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA Government Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
26
Federal Income Tax Information (Unaudited) – BofA Government Reserves
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
27
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
28
Fund Governance (continued)
Independent Trustee (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
29
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
30
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Government Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
33
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Government Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-GOVT-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
< BofA Connecticut Municipal Reserves
< BofA Massachusetts Municipal Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolios | 3 | ||||||
Statements of Assets and Liabilities | 11 | ||||||
Statements of Operations | 12 | ||||||
Statements of Changes in Net Assets | 13 | ||||||
Financial Highlights | 16 | ||||||
Notes to Financial Statements | 22 | ||||||
Report of Independent Registered Public Accounting Firm | 30 | ||||||
Federal Income Tax Information | 31 | ||||||
Fund Governance | 32 | ||||||
Important Information About This Report | 37 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Connecticut Municipal Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.40 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.88 | 1.26 | 1.27 | 0.25 | ||||||||||||||||||||||||
Trust Class Shares (1) | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.98 | 0.28 | 1.17 | 0.23 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
(1) Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by 45/366 (to reflect the period shown of July 18, 2012 to August 31, 2012).
1
Understanding Your Expenses – BofA Massachusetts Municipal Reserves
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.40 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.88 | 1.26 | 1.27 | 0.25 | ||||||||||||||||||||||||
Trust Class Shares (1) | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.98 | 0.28 | 1.17 | 0.23 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
(1) Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by 45/366 (to reflect the period shown of July 18, 2012 to August 31, 2012).
2
Investment Portfolio – BofA Connecticut Municipal Reserves
August 31, 2012
Municipal Bonds – 101.3%
Par ($) | Value ($) | ||||||||||
Arizona – 0.6% | |||||||||||
AZ Phoenix Industrial Development Authority | |||||||||||
Spring Air Mattress Co., | |||||||||||
Series 1999, AMT, LOC: JPMorgan Chase Bank 0.630% 04/01/19 (09/05/12) (a)(b) | 640,000 | 640,000 | |||||||||
Arizona Total | 640,000 | ||||||||||
Connecticut – 82.2% | |||||||||||
CT Berlin | |||||||||||
Series 2012, | |||||||||||
1.000% 09/20/12 | 3,000,000 | 3,001,262 | |||||||||
CT Bloomfield | |||||||||||
Series 2010 A, | |||||||||||
4.000% 10/15/12 | 500,000 | 502,192 | |||||||||
CT Danbury | |||||||||||
Series 2012, | |||||||||||
3.000% 07/15/13 | 850,000 | 869,877 | |||||||||
CT Darien | |||||||||||
Series 2012, | |||||||||||
2.000% 08/01/13 (c) | 1,095,000 | 1,112,268 | |||||||||
CT Derby | |||||||||||
Series 2012: | |||||||||||
1.000% 12/19/12 (c) | 4,000,000 | 4,008,040 | |||||||||
1.500% 09/04/12 | 2,750,000 | 2,750,265 | |||||||||
CT Development Authority | |||||||||||
Imperial Electric Assembly, | |||||||||||
Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.340% 05/01/21 (09/06/12) (a)(b) | 850,000 | 850,000 | |||||||||
Rand-Whitney Containerboard LP, | |||||||||||
Series 1993, AMT, LOC: Bank of Montreal 0.170% 08/01/23 (09/05/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
RK Bradley Associates LP, | |||||||||||
Bradley Airport Hotel, Series 2006, LOC: TD Bank N.A. 0.150% 12/01/28 (09/06/12) (a)(b) | 2,000,000 | 2,000,000 | |||||||||
CT Enfield | |||||||||||
Series 2012, | |||||||||||
1.000% 08/13/13 | 2,500,000 | 2,516,753 |
Par ($) | Value ($) | ||||||||||
CT Glastonbury | |||||||||||
Series 2011, | |||||||||||
1.250% 11/13/12 | 415,000 | 415,618 | |||||||||
CT Groton | |||||||||||
Series 2006, | |||||||||||
4.000% 10/01/12 | 345,000 | 346,001 | |||||||||
CT Health & Educational Facilities Authority | |||||||||||
CIL Community Resources, | |||||||||||
Series 2011 A, LOC: HSBC Bank USA N.A. 0.170% 07/01/41 (09/06/12) (a)(b) | 2,430,000 | 2,430,000 | |||||||||
Eastern Connecticut Health, | |||||||||||
Series 2010 E, LOC: TD Bank N.A. 0.160% 07/01/34 (09/06/12) (a)(b) | 4,600,000 | 4,600,000 | |||||||||
Hospital for Special Care, | |||||||||||
Series 2010 E, LOC: Federal Home Loan Bank of Boston 0.160% 07/01/37 (09/06/12) (a)(b) | 3,820,000 | 3,820,000 | |||||||||
Lawrence & Memorial Hospital, Inc., | |||||||||||
Series 2004 E, LOC: JPMorgan Chase Bank 0.180% 07/01/34 (09/05/12) (a)(b) | 2,400,000 | 2,400,000 | |||||||||
St. Francis Hospital & Medical Center, | |||||||||||
Series 2008 F, LOC: JPMorgan Chase Bank 0.160% 07/01/47 (09/06/12) (a)(b) | 3,680,000 | 3,680,000 | |||||||||
The Hotchkiss School, | |||||||||||
Series 2000 A, SPA: U.S. Bank N.A. 0.160% 07/01/30 (09/06/12) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
The Taft School, | |||||||||||
Series 2000 E, LOC: Wells Fargo Bank N.A. 0.170% 07/01/30 (09/05/12) (a)(b) | 4,800,000 | 4,800,000 | |||||||||
Wesleyan University, | |||||||||||
Series 2010, LIQ FAC: Citibank N.A. 0.170% 01/01/18 (09/06/12) (a)(b)(d) | 4,200,000 | 4,200,000 |
See Accompanying Notes to Financial Statements.
3
BofA Connecticut Municipal Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Yale University, | |||||||||||
Series 2010 A3, 4.000% 07/01/49 (02/07/13) (b)(e) | 1,200,000 | 1,218,651 | |||||||||
CT Housing Finance Authority | |||||||||||
CIL Realty, Inc., | |||||||||||
Series 2008, LOC: HSBC Bank USA N.A. 0.160% 07/01/32 (09/06/12) (a)(b) | 2,905,000 | 2,905,000 | |||||||||
MERLOTS, | |||||||||||
Series 2007 C90, AMT, SPA: Wells Fargo Bank N.A. 0.220% 11/15/15 (09/05/12) (a)(b) | 1,285,000 | 1,285,000 | |||||||||
Series 2011 C1, | |||||||||||
Insured: Government of Authority, SPA: Barclays Bank PLC 0.160% 05/15/35 (09/06/12) (a)(b) | 3,005,000 | 3,005,000 | |||||||||
Series 2012 D3, AMT, | |||||||||||
SPA: Bank Tokyo-Mitsubishi UFJ 0.200% 05/15/33 (09/06/12) (a)(b) | 2,620,000 | 2,620,000 | |||||||||
CT JPMorgan Chase Putters/Drivers Trust | |||||||||||
Waterford, CT, | |||||||||||
Series 2012 4074, LIQ FAC: JPMorgan Chase Bank 0.190% 03/18/13 (09/04/12) (a)(b)(d) | 4,700,000 | 4,700,000 | |||||||||
CT Milford | |||||||||||
Series 2011, | |||||||||||
3.000% 11/01/12 | 770,000 | 773,338 | |||||||||
CT New Haven | |||||||||||
Series 2002 C, | |||||||||||
Pre-refunded 01/01/12, Insured: NATL-RE 5.000% 11/01/22 | 1,965,000 | 1,999,861 | |||||||||
CT Plymouth | |||||||||||
Series 2012: | |||||||||||
1.000% 07/18/13 | 1,500,000 | 1,508,110 | |||||||||
2.000% 07/15/13 | 750,000 | 760,386 | |||||||||
CT Regional School District No. 10 | |||||||||||
Series 2012, | |||||||||||
1.500% 10/12/12 | 650,000 | 650,915 |
Par ($) | Value ($) | ||||||||||
CT Regional School District No. 16 | |||||||||||
Series 2012, | |||||||||||
Insured: State Aid Withholding 2.000% 09/01/13 (c) | 400,000 | 406,292 | |||||||||
CT Shelton | |||||||||||
Series 2012 A, | |||||||||||
1.000% 08/01/13 | 457,000 | 459,501 | |||||||||
CT Special Tax Revenue | |||||||||||
Special Tax Transportation, | |||||||||||
Series 1991 B, 6.500% 10/01/12 | 2,000,000 | 2,010,089 | |||||||||
CT State | |||||||||||
Series 2002 D: | |||||||||||
5.250% 11/15/12 | 615,000 | 621,089 | |||||||||
Pre-refunded 11/15/12, 5.375% 11/15/16 | 500,000 | 505,156 | |||||||||
Series 2002 F, | |||||||||||
Pre-refunded 10/15/12, 5.000% 10/15/17 | 525,000 | 527,948 | |||||||||
Series 2005 C, | |||||||||||
5.000% 06/01/13 | 795,000 | 822,528 | |||||||||
Series 2006 D, | |||||||||||
4.000% 11/01/12 | 500,000 | 503,030 | |||||||||
CT Thomaston | |||||||||||
Series 2012, | |||||||||||
1.000% 05/09/13 | 3,725,000 | 3,743,113 | |||||||||
CT Vernon | |||||||||||
Series 2012, | |||||||||||
2.000% 10/11/12 | 930,000 | 931,775 | |||||||||
Connecticut Total | 85,259,058 | ||||||||||
Illinois – 0.8% | |||||||||||
IL Chicago | |||||||||||
Gas Plus, Inc., | |||||||||||
Series 2002, AMT, LOC: Northern Trust Co. 0.670% 11/01/22 (09/06/12) (a)(b) | 850,000 | 850,000 | |||||||||
Illinois Total | 850,000 |
See Accompanying Notes to Financial Statements.
4
BofA Connecticut Municipal Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Indiana – 0.8% | |||||||||||
IN Elkhart | |||||||||||
Vahala Enterprises, Inc., | |||||||||||
Series 2002, AMT, LOC: JPMorgan Chase Bank 0.630% 09/01/17 (09/06/12) (a)(b) | 800,000 | 800,000 | |||||||||
Indiana Total | 800,000 | ||||||||||
New Jersey – 4.3% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 1992, | |||||||||||
LOC: BNP Paribas 0.600% 09/04/12 | 4,500,000 | 4,500,000 | |||||||||
New Jersey Total | 4,500,000 | ||||||||||
Puerto Rico – 12.6% | |||||||||||
PR Commonwealth of Puerto Rico Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2007 462, | |||||||||||
GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.240% 08/01/47 (09/06/12) (a)(b) | 4,765,000 | 4,765,000 | |||||||||
Series 2008 627A, | |||||||||||
GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.200% 08/01/54 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
PR Commonwealth of Puerto Rico | |||||||||||
Series 2003 C-5-2, | |||||||||||
LOC: Barclays Bank PLC 0.160% 07/01/20 (09/06/12) (a)(b) | 3,280,000 | 3,280,000 | |||||||||
Puerto Rico Total | 13,045,000 | ||||||||||
Total Municipal Bonds (cost of $105,094,058) | 105,094,058 |
Closed-End Investment Company – 3.9%
Par ($) | Value ($) | ||||||||||
Other – 3.9% | |||||||||||
Nuveen Premier Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.290% 12/01/40 (09/06/12) (a)(b)(d) | 4,000,000 | 4,000,000 | |||||||||
Other Total | 4,000,000 | ||||||||||
Total Closed-End Investment Company (cost of $4,000,000) | 4,000,000 | ||||||||||
Total Investments – 105.2% (cost of $109,094,058) (f) | 109,094,058 | ||||||||||
Other Assets & Liabilities, Net – (5.2)% | (5,362,175 | ) | |||||||||
Net Assets – 100.0% | 103,731,883 |
Notes to Investment Portfolio:
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(b) Parenthetical date represents the effective maturity date for the security.
(c) Security purchased on a delayed delivery basis.
(d) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $12,900,000 or 12.4% of net assets for the Fund.
(e) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(f) Cost for federal income tax purposes is $109,094,058.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Municipal Bonds | $ | — | $ | 105,094,058 | $ | — | $ | 105,094,058 | |||||||||||
Total Closed-End Investment Company | — | 4,000,000 | — | 4,000,000 | |||||||||||||||
Total Investments | $ | — | $ | 109,094,058 | $ | — | $ | 109,094,058 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
See Accompanying Notes to Financial Statements.
5
BofA Connecticut Municipal Reserves
August 31, 2012
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 101.3 | ||||||
Closed-End Investment Company | 3.9 | ||||||
105.2 | |||||||
Other Assets & Liabilities, Net | (5.2 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
MERLOTS | Municipal Exempt Receipts – Liquidity Optional Tender Series | ||||||
NATL-RE | National Public Finance Guarantee Corp. | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
6
Investment Portfolio – BofA Massachusetts Municipal Reserves
August 31, 2012
Municipal Bonds – 95.1%
Par ($) | Value ($) | ||||||||||
Massachusetts – 82.0% | |||||||||||
MA Barclays Capital Municipal Trust Receipts | |||||||||||
Harvard University, | |||||||||||
Series 2010, LIQ FAC: Barclays Bank PLC 0.150% 12/15/34 (09/06/12) (a)(b)(c) | 3,150,000 | 3,150,000 | |||||||||
MA Barnstable | |||||||||||
Series 2012, | |||||||||||
2.000% 09/15/12 | 1,070,000 | 1,070,712 | |||||||||
MA Bay Transportation Authority | |||||||||||
Series 2000 A1, | |||||||||||
SPA: Barclays Bank PLC 0.160% 03/01/30 (09/05/12) (a)(b) | 6,815,000 | 6,815,000 | |||||||||
MA Billerica | |||||||||||
Series 2012, | |||||||||||
1.000% 05/17/13 | 2,612,000 | 2,625,904 | |||||||||
MA Cohasset | |||||||||||
Series 2009, | |||||||||||
2.000% 11/15/12 | 855,000 | 857,774 | |||||||||
Series 2011, | |||||||||||
1.000% 12/07/12 | 2,387,150 | 2,389,726 | |||||||||
MA Department of Transportation | |||||||||||
Contract Assistance-A7, | |||||||||||
Series 2010, SPA: JPMorgan Chase Bank 0.160% 01/01/29 (09/05/12) (a)(b) | 5,360,000 | 5,360,000 | |||||||||
Series 2010 A2, | |||||||||||
LOC: Wells Fargo Bank N.A. 0.160% 01/01/37 (09/05/12) (a)(b) | 2,500,000 | 2,500,000 | |||||||||
MA Deutsche Bank Spears/Lifers Trust | |||||||||||
Massachusetts State College Building Authority, | |||||||||||
Series 2008, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.250% 05/01/39 (09/06/12) (a)(b) | 3,565,000 | 3,565,000 | |||||||||
MA Development Finance Agency | |||||||||||
Abby Kelly Foster Charter, | |||||||||||
Series 2008, LOC: TD Bank N.A. 0.180% 09/01/38 (09/06/12) (a)(b) | 4,765,000 | 4,765,000 |
Par ($) | Value ($) | ||||||||||
Babson College, | |||||||||||
Series 2008 A, LOC: FHLB 0.160% 10/01/32 (09/06/12) (a)(b) | 2,035,000 | 2,035,000 | |||||||||
Beth Israel Deaconess Medical: | |||||||||||
Series 2011 A, LOC: Citizens Bank 0.180% 06/01/41 (09/06/12) (a)(b) | 8,900,000 | 8,900,000 | |||||||||
Series 2011 B, LOC: M&T Bank 0.190% 06/01/41 (09/06/12) (a)(b) | 6,565,000 | 6,565,000 | |||||||||
Boston University: | |||||||||||
Series 2008 U-1, LOC: Bank of Nova Scotia 0.120% 10/01/40 (09/06/12) (a)(b) | 2,800,000 | 2,800,000 | |||||||||
Series 2008 U-3, LOC: Northern Trust Co. 0.120% 10/01/40 (09/06/12) (a)(b) | 5,405,000 | 5,405,000 | |||||||||
Partners Healthcare System, | |||||||||||
Series 2012, LIQ FAC: Citibank N.A. 0.170% 07/01/19 (09/06/12) (a)(b)(c) | 1,500,000 | 1,500,000 | |||||||||
MA Fall River | |||||||||||
Series 2012, | |||||||||||
DPCE: State Aid Withholding 4.000% 03/01/13 | 1,665,000 | 1,694,624 | |||||||||
MA Hanover | |||||||||||
Series 2011, | |||||||||||
1.000% 09/14/12 | 6,000,000 | 6,001,464 | |||||||||
MA Health & Educational Facilities Authority | |||||||||||
Harrington Memorial, | |||||||||||
Series 2008 A, LOC: TD Bank N.A. 0.140% 07/01/38 (09/05/12) (a)(b) | 6,700,000 | 6,700,000 | |||||||||
Partners Healthcare Systems, | |||||||||||
Series 2003 D-3, SPA: JPMorgan Chase Bank 0.160% 07/01/38 (09/06/12) (a)(b) | 3,485,000 | 3,485,000 |
See Accompanying Notes to Financial Statements.
7
BofA Massachusetts Municipal Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
The Children's Hospital Corp., | |||||||||||
Series 2010 N-4, LOC: JPMorgan Chase Bank, GTY AGMT: The Children's Medical Center 0.180% 10/01/49 (09/04/12) (a)(b) | 1,795,000 | 1,795,000 | |||||||||
MA Holliston | |||||||||||
Series 2012, | |||||||||||
1.000% 05/24/13 | 1,560,000 | 1,566,530 | |||||||||
MA Housing Finance Agency | |||||||||||
ROCS RRII R 11928, | |||||||||||
Series 2011, AMT, LIQ FAC: Citibank N.A. 0.270% 06/01/36 (09/06/12) (a)(b)(c) | 3,195,000 | 3,195,000 | |||||||||
MA Industrial Finance Agency | |||||||||||
120 Chestnut Street LP, | |||||||||||
Series 1992, LOC: Sumitomo Bank Ltd. 0.170% 08/01/26 (09/05/12) (a)(b) | 2,610,000 | 2,610,000 | |||||||||
Governor Dummer Academy, | |||||||||||
Series 1996, LOC: TD Bank N.A. 0.150% 07/01/26 (09/06/12) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
MA JPMorgan Chase Putters/Drivers Trust | |||||||||||
Massachusetts Bay Transportation Authority, | |||||||||||
Series 2012 4098, LIQ FAC: JPMorgan Chase Bank 0.200% 01/01/17 (09/04/12) (a)(b)(c) | 4,020,000 | 4,020,000 | |||||||||
MA Lowell | |||||||||||
Series 2010, | |||||||||||
DPCE: State Aid Withholding 3.000% 09/01/12 | 1,935,000 | 1,935,000 | |||||||||
MA Marlborough | |||||||||||
Series 2005, | |||||||||||
3.500% 06/15/13 | 500,000 | 512,556 | |||||||||
MA Medfield | |||||||||||
Series 2012, | |||||||||||
3.000% 03/15/13 | 1,120,000 | 1,136,187 | |||||||||
MA Nantucket | |||||||||||
Series 2012, | |||||||||||
2.000% 12/01/12 | 1,075,000 | 1,079,422 |
Par ($) | Value ($) | ||||||||||
MA Natick | |||||||||||
Series 2012 A, | |||||||||||
2.000% 06/01/13 | 673,000 | 681,077 | |||||||||
MA Newburyport | |||||||||||
Series 2012, | |||||||||||
1.000% 01/18/13 | 2,816,000 | 2,822,218 | |||||||||
MA Norfolk County | |||||||||||
Series 2012, | |||||||||||
1.000% 10/26/12 | 1,000,000 | 1,000,744 | |||||||||
MA North Reading | |||||||||||
Series 2012, | |||||||||||
2.000% 05/15/13 | 1,626,000 | 1,644,562 | |||||||||
MA Norwood | |||||||||||
Series 2012, | |||||||||||
1.250% 01/18/13 | 3,800,000 | 3,813,219 | |||||||||
MA Port Authority | |||||||||||
0.170% 01/11/13 | 4,000,000 | 4,000,000 | |||||||||
MA Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Massachusetts State Development Finance Agency, | |||||||||||
Haverhill Mills Project, Series 2008, AMT, LIQ FAC: FHLMC 0.370% 05/01/55 (09/06/12) (a)(b) | 10,730,000 | 10,730,000 | |||||||||
MA Shrewsbury | |||||||||||
Series 2011, | |||||||||||
1.000% 11/16/12 | 3,500,000 | 3,504,999 | |||||||||
Series 2012, | |||||||||||
1.000% 07/12/13 | 2,325,000 | 2,338,137 | |||||||||
MA State | |||||||||||
Central Artery, | |||||||||||
Series 2000 B, SPA: U.S. Bank N.A. 0.180% 12/01/30 (09/04/12) (a)(b) | 855,000 | 855,000 | |||||||||
Series 2002 C: | |||||||||||
Insured: AGMC, Pre-refunded 11/01/12, 5.250% 11/01/30 | 2,000,000 | 2,016,493 | |||||||||
Pre-refunded 11/01/12, 5.500% 11/01/20 | 1,400,000 | 1,412,048 | |||||||||
Series 2002 E, | |||||||||||
Insured: AGMC, Pre-refunded 01/01/13, 5.250% 01/01/18 | 500,000 | 507,977 |
See Accompanying Notes to Financial Statements.
8
BofA Massachusetts Municipal Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Series 2006 B, | |||||||||||
SPA: JPMorgan Chase Bank 0.180% 03/01/26 (09/04/12) (a)(b) | 1,130,000 | 1,130,000 | |||||||||
Series 2008 C27, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.170% 11/01/25 (09/05/12) (a)(b)(c) | 6,610,000 | 6,610,000 | |||||||||
MA University of Massachusetts Building Authority | |||||||||||
Series 2008 1, | |||||||||||
LOC: Lloyds TSB Bank PLC 0.210% 05/01/38 (09/05/12) (a)(b) | 4,655,000 | 4,655,000 | |||||||||
MA Water Resources Authority | |||||||||||
ROCS RRII R 11914, | |||||||||||
Series 2011, LIQ FAC: Citibank N.A. 0.170% 08/01/18 (09/06/12) (a)(b)(c) | 2,585,000 | 2,585,000 | |||||||||
MA Weston | |||||||||||
Series 2012, | |||||||||||
1.000% 02/01/13 | 4,425,000 | 4,439,820 | |||||||||
Massachusetts Total | 153,781,193 | ||||||||||
New Jersey – 4.3% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 1992, | |||||||||||
LOC: BNP Paribas 0.600% 09/04/12 | 8,000,000 | 8,000,000 | |||||||||
New Jersey Total | 8,000,000 | ||||||||||
Puerto Rico – 8.8% | |||||||||||
PR Commonwealth of Puerto Rico Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2008, | |||||||||||
GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.200% 08/01/54 (09/06/12) (a)(b) | 8,105,000 | 8,105,000 | |||||||||
PR Commonwealth of Puerto Rico | |||||||||||
Series 2003 C-5-2, | |||||||||||
LOC: Barclays Bank PLC 0.160% 07/01/20 (09/06/12) (a)(b) | 8,350,000 | 8,350,000 | |||||||||
Puerto Rico Total | 16,455,000 | ||||||||||
Total Municipal Bonds (cost of $178,236,193) | 178,236,193 |
Closed-End Investment Company – 4.8%
Par ($) | Value ($) | ||||||||||
Other – 4.8% | |||||||||||
Nuveen Premier Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.290% 12/01/40 (09/06/12) (a)(b)(c) | 9,000,000 | 9,000,000 | |||||||||
Other Total | 9,000,000 | ||||||||||
Total Closed-End Investment Company (cost of $9,000,000) | 9,000,000 | ||||||||||
Total Investments – 99.9% (cost of $187,236,193) (d) | 187,236,193 | ||||||||||
Other Assets & Liabilities, Net – 0.1% | 273,851 | ||||||||||
Net Assets – 100.0% | 187,510,044 |
Notes to Investment Portfolio:
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(b) Parenthetical date represents the effective maturity date for the security.
(c) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $30,060,000 or 16.0% of net assets for the Fund.
(d) Cost for federal income tax purposes is $187,236,193.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Municipal Bonds | $ | — | $ | 178,236,193 | $ | — | $ | 178,236,193 | |||||||||||
Total Closed-End Investment Company | — | 9,000,000 | — | 9,000,000 | |||||||||||||||
Total Investments | $ | — | $ | 187,236,193 | $ | — | $ | 187,236,193 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
9
BofA Massachusetts Municipal Reserves
August 31, 2012
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 95.1 | ||||||
Closed-End Investment Company | 4.8 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
100.0 |
Acronym | Name | ||||||
AGMC | Assured Guaranty Municipal Corp. | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FHLB | Federal Home Loan Bank | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
10
Statements of Assets and Liabilities – BofA Money Market Funds
August 31, 2012
($) | ($) | ||||||||||
BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | ||||||||||
Assets | |||||||||||
Investments, at amortized cost approximating value | 109,094,058 | 187,236,193 | |||||||||
Cash | 7,160 | 639 | |||||||||
Receivable for: | |||||||||||
Investments sold on a delayed delivery basis | 700,074 | — | |||||||||
Fund shares sold | — | 750 | |||||||||
Interest | 227,054 | 360,030 | |||||||||
Expense reimbursement due from investment advisor | 22,084 | 19,152 | |||||||||
Trustees' deferred compensation plan | 5,014 | 5,983 | |||||||||
Prepaid expenses | 1,111 | 2,300 | |||||||||
Other assets | 3,966 | 3,766 | |||||||||
Total Assets | 110,060,521 | 187,628,813 | |||||||||
Liabilities | |||||||||||
Payable for: | |||||||||||
Investments purchased on a delayed delivery basis | 6,226,611 | — | |||||||||
Distributions | 1,837 | 4,093 | |||||||||
Investment advisory fee | 13,833 | 24,220 | |||||||||
Administration fee | — | 870 | |||||||||
Pricing and bookkeeping fees | 5,839 | 7,148 | |||||||||
Transfer agent fee | 211 | 566 | |||||||||
Trustees' fees | 2,664 | 2,735 | |||||||||
Audit fee | 33,850 | 33,850 | |||||||||
Legal fee | 31,761 | 31,761 | |||||||||
Custody fee | 1,963 | 1,682 | |||||||||
Distribution and service fees | 175 | 14 | |||||||||
Chief compliance officer expenses | 1,202 | 1,231 | |||||||||
Trustees' deferred compensation plan | 5,014 | 5,983 | |||||||||
Other liabilities | 3,678 | 4,616 | |||||||||
Total Liabilities | 6,328,638 | 118,769 | |||||||||
Net Assets | 103,731,883 | 187,510,044 | |||||||||
Net Assets Consist of | |||||||||||
Paid-in capital | 103,695,667 | 187,440,474 | |||||||||
Undistributed net investment income | 33,565 | 61,173 | |||||||||
Accumulated net realized gain | 2,651 | 8,397 | |||||||||
Net Assets | 103,731,883 | 187,510,044 | |||||||||
Capital Class Shares (1) | |||||||||||
Net assets | $ | 94,404,127 | $ | 186,823,689 | |||||||
Shares outstanding | 94,369,523 | 186,753,413 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 | |||||||
Investor Class Shares (1) | |||||||||||
Net assets | $ | 9,227,720 | $ | 586,317 | |||||||
Shares outstanding | 9,224,384 | 586,104 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 | |||||||
Trust Class Shares (1) | |||||||||||
Net assets | $ | 100,036 | $ | 100,038 | |||||||
Shares outstanding | 100,000 | 100,000 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
11
Statements of Operations – BofA Money Market Funds
For the Year Ended August 31, 2012
($) | ($) | ||||||||||
BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | ||||||||||
Investment Income | |||||||||||
Interest | 266,930 | 507,604 | |||||||||
Expenses | |||||||||||
Investment advisory fee | 164,479 | 312,173 | |||||||||
Administration fee | 55,205 | 138,899 | |||||||||
Distribution fee: | |||||||||||
Investor Class Shares (1) | 3,590 | 229 | |||||||||
Shareholder service fee: | |||||||||||
Investor Class Shares (1) | 8,976 | 572 | |||||||||
Retail A Shares (1) | 61 | 162 | |||||||||
Shareholder administration fee: | |||||||||||
Trust Class Shares (1) | 12 | 12 | |||||||||
Transfer agent fee | 8,826 | 9,195 | |||||||||
Pricing and bookkeeping fees | 64,931 | 79,377 | |||||||||
Trustees' fees | 48,955 | 49,434 | |||||||||
Custody fee | 8,612 | 9,526 | |||||||||
Audit fee | 40,492 | 40,492 | |||||||||
Legal fees | 140,397 | 140,318 | |||||||||
Chief compliance officer expenses | 6,755 | 6,934 | |||||||||
Other expenses | 28,091 | 28,890 | |||||||||
Total Expenses | 579,382 | 816,213 | |||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (347,333 | ) | (400,132 | ) | |||||||
Fees waived by distributor: | |||||||||||
Investor Class Shares (1) | (10,789 | ) | (699 | ) | |||||||
Retail A Shares (1) | (28 | ) | (76 | ) | |||||||
Trust Class Shares (1) | (9 | ) | (9 | ) | |||||||
Expense reductions | (35 | ) | (117 | ) | |||||||
Net Expenses | 221,188 | 415,180 | |||||||||
Net Investment Income | 45,742 | 92,424 | |||||||||
Net realized gain on investments | 2,929 | 9,381 | |||||||||
Net Increase Resulting from Operations | 48,671 | 101,805 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
12
Statements of Changes in Net Assets – BofA Money Market Funds
Increase (Decrease) in Net Assets | BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | |||||||||||||||||
Year Ended August 31, | Year Ended August 31, | ||||||||||||||||||
2012 ($) | 2011 ($) | 2012 ($) | 2011 ($) | ||||||||||||||||
Operations | |||||||||||||||||||
Net investment income | 45,742 | 123,990 | 92,424 | 228,071 | |||||||||||||||
Net realized gain (loss) on investments | 2,929 | (278 | ) | 9,381 | (984 | ) | |||||||||||||
Net increase resulting from operations | 48,671 | 123,712 | 101,805 | 227,087 | |||||||||||||||
Distributions to Shareholders | |||||||||||||||||||
From net investment income: | |||||||||||||||||||
Capital Class Shares (1) | (115,273 | ) | — | (145,191 | ) | — | |||||||||||||
G-Trust Shares (1) | (4,599 | ) | (123,642 | ) | (7,215 | ) | (226,984 | ) | |||||||||||
Investor Class Shares (1) | (463 | ) | — | (50 | ) | — | |||||||||||||
Retail A Shares (1) | — | (304 | ) | — | (1,032 | ) | |||||||||||||
From net realized gains: | |||||||||||||||||||
G-Trust Shares (1) | — | — | — | (29,677 | ) | ||||||||||||||
Retail A Shares (1) | — | — | — | (324 | ) | ||||||||||||||
Total distributions to shareholders | (120,335 | ) | (123,946 | ) | (152,456 | ) | (258,017 | ) | |||||||||||
Net Capital Stock Transactions | 4,853,572 | (30,373,921 | ) | (13,856,561 | ) | (117,036,653 | ) | ||||||||||||
Total increase (decrease) in net assets | 4,781,908 | (30,374,155 | ) | (13,907,212 | ) | (117,067,583 | ) | ||||||||||||
Net Assets | |||||||||||||||||||
Beginning of period | 98,949,975 | 129,324,130 | 201,417,256 | 318,484,839 | |||||||||||||||
End of period | 103,731,883 | 98,949,975 | 187,510,044 | 201,417,256 | |||||||||||||||
Undistributed net investment income at end of period | 33,565 | 109,891 | 61,173 | 123,244 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
13
Statements of Changes in Net Assets (continued) – BofA Connecticut Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, 2012 | Year Ended August 31, 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares (1) | |||||||||||||||||||
Subscriptions | 154,188,502 | 154,188,502 | — | — | |||||||||||||||
Conversion | 105,984,910 | 105,984,910 | — | — | |||||||||||||||
Distributions reinvested | 635 | 635 | — | — | |||||||||||||||
Redemptions | (165,804,524 | ) | (165,804,524 | ) | — | — | |||||||||||||
Net increase | 94,369,523 | 94,369,523 | — | — | |||||||||||||||
G-Trust Shares (1) | |||||||||||||||||||
Subscriptions | 18,758,256 | 18,758,256 | 219,882,726 | 219,882,726 | |||||||||||||||
Conversion | (105,243,588 | ) | (105,243,588 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 1,903 | 1,903 | |||||||||||||||
Redemptions | (11,612,100 | ) | (11,612,100 | ) | (231,932,934 | ) | (231,932,934 | ) | |||||||||||
Net decrease | (98,097,432 | ) | (98,097,432 | ) | (12,048,305 | ) | (12,048,305 | ) | |||||||||||
Investor Class Shares (1) | |||||||||||||||||||
Subscriptions | 36,352,130 | 36,352,130 | — | — | |||||||||||||||
Distributions reinvested | 11 | 11 | — | — | |||||||||||||||
Redemptions | (27,127,757 | ) | (27,127,757 | ) | — | — | |||||||||||||
Net increase | 9,224,384 | 9,224,384 | — | — | |||||||||||||||
Retail A Shares (1) | |||||||||||||||||||
Subscriptions | 860 | 859 | 964,876 | 964,876 | |||||||||||||||
Conversion | (741,322 | ) | (741,322 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 298 | 298 | |||||||||||||||
Redemptions | (2,440 | ) | (2,440 | ) | (19,290,790 | ) | (19,290,790 | ) | |||||||||||
Net decrease | (742,902 | ) | (742,903 | ) | (18,325,616 | ) | (18,325,616 | ) | |||||||||||
Trust Class Shares (1) | |||||||||||||||||||
Subscriptions | 100,000 | 100,000 | — | — | |||||||||||||||
Net increase | 100,000 | 100,000 | — | — |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
14
Statements of Changes in Net Assets (continued) – BofA Massachusetts Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, 2012 | Year Ended August 31, 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares (1) | |||||||||||||||||||
Subscriptions | 283,937,919 | 283,937,918 | — | — | |||||||||||||||
Conversion | 204,438,456 | 204,438,456 | — | — | |||||||||||||||
Distributions reinvested | 1,499 | 1,499 | — | — | |||||||||||||||
Redemptions | (301,624,461 | ) | (301,624,461 | ) | — | — | |||||||||||||
Net increase | 186,753,413 | 186,753,412 | — | — | |||||||||||||||
G-Trust Shares (1) | |||||||||||||||||||
Subscriptions | 25,580,836 | 25,580,836 | 459,536,859 | 459,536,859 | |||||||||||||||
Conversion | (201,967,378 | ) | (201,967,378 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 4,099 | 4,099 | |||||||||||||||
Redemptions | (22,438,606 | ) | (22,438,606 | ) | (501,534,746 | ) | (501,534,746 | ) | |||||||||||
Net decrease | (198,825,148 | ) | (198,825,148 | ) | (41,993,788 | ) | (41,993,788 | ) | |||||||||||
Investor Class Shares (1) | |||||||||||||||||||
Subscriptions | 1,061,282 | 1,061,281 | — | — | |||||||||||||||
Distributions reinvested | 12 | 12 | — | — | |||||||||||||||
Redemptions | (475,190 | ) | (475,190 | ) | — | — | |||||||||||||
Net increase | 586,104 | 586,103 | — | — | |||||||||||||||
Retail A Shares (1) | |||||||||||||||||||
Subscriptions | 150 | 150 | 2,721,170 | 2,721,170 | |||||||||||||||
Conversion | (2,471,078 | ) | (2,471,078 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 1,354 | 1,354 | |||||||||||||||
Redemptions | — | — | (77,765,389 | ) | (77,765,389 | ) | |||||||||||||
Net decrease | (2,470,928 | ) | (2,470,928 | ) | (75,042,865 | ) | (75,042,865 | ) | |||||||||||
Trust Class Shares (1) | |||||||||||||||||||
Subscriptions | 100,000 | 100,000 | — | — | |||||||||||||||
Net increase | 100,000 | 100,000 | — | — |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Connecticut Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income (d) | 0.001 | 0.001 | 0.001 | 0.010 | 0.025 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.010 | ) | (0.025 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.11 | % | 0.11 | % | 0.13 | % | 0.99 | % | 2.48 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.20 | % | 0.20 | % | 0.20 | % | 0.24 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.32 | % | 0.37 | % | 0.16 | % | 0.10 | % | 0.11 | % | |||||||||||||
Net investment income (g) | 0.04 | % | 0.11 | % | 0.13 | % | 0.95 | % | 2.41 | % | |||||||||||||
Net assets, end of period (000s) | $ | 94,404 | $ | 98,206 | $ | 110,239 | $ | 275,997 | $ | 251,676 |
(a) On October 1, 2011, Retail A shares and G-Trust shares were converted into Capital Class shares when Capital Class shares were first offered. The financial information of Capital Class shares prior to this conversion is that of G-Trust shares, which reflects substantially the same expenses as those of Capital Class shares. If the historic financial information of Retail A shares was used instead of that of G-Trust shares, the total return for each period prior to the conversion would be lower due to the higher expenses applicable to Retail A shares.
(b) On May 1, 2010, Columbia Connecticut Municipal Reserves was renamed BofA Connecticut Municipal Reserves.
(c) On December 31, 2009, Columbia Connecticut Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Connecticut Municipal Reserves.
(d) Per share data was calculated using the average shares outstanding during the period.
(e) Total return at net asset value assuming all distributions reinvested.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Connecticut Municipal Reserves
Selected data for a share outstanding throughout the period is as follows:
Investor Class Shares | Period Ended August 31, 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment income (b) | — | ||||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | (c) | |||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (d)(e) | 0.06 | %(f) | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (g) | 0.25 | %(h) | |||||
Waiver/Reimbursement | 0.61 | %(h) | |||||
Net investment income (g) | — | ||||||
Net assets, end of period (000s) | $ | 9,228 |
(a) Investor Class shares commenced operations on October 3, 2011. Per share data and total return reflect activity from that date.
(b) Per share data was calculated using the average shares outstanding during the period.
(c) Rounds to less than $0.001 per share.
(d) Total return at net asset value assuming all distributions reinvested.
(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) Annualized.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Connecticut Municipal Reserves
Selected data for a share outstanding throughout the period is as follows:
Trust Class Shares | Period Ended August 31, 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment income (b) | — | ||||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | ||||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (c)(d) | 0.00 | % | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (e) | 0.23 | %(f) | |||||
Waiver/Reimbursement | 0.37 | %(f) | |||||
Net investment income (e) | — | ||||||
Net assets, end of period (000s) | $ | 100 |
(a) Trust Class shares commenced operations on July 18, 2012. Per share data and total return reflect activity from that date.
(b) Per share data was calculated using the average shares outstanding during the period.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Annualized.
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Massachusetts Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income (d) | 0.001 | 0.001 | 0.001 | 0.010 | 0.025 | ||||||||||||||||||
Net realized gain (loss) on investments (e) | — | — | — | — | — | ||||||||||||||||||
Total from Investment Operations | 0.001 | 0.001 | 0.001 | 0.010 | 0.025 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.010 | ) | (0.025 | ) | |||||||||||||
From net realized gains | — | — | (e) | — | — | — | |||||||||||||||||
Total Distributions to Shareholders | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.010 | ) | (0.025 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.07 | % | 0.12 | % | 0.13 | % | 1.03 | % | 2.48 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.20 | % | 0.20 | % | 0.20 | % | 0.24 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.22 | % | 0.11 | % | 0.09 | % | 0.08 | % | |||||||||||||
Net investment income (h) | 0.04 | % | 0.11 | % | 0.10 | % | 1.01 | % | 2.28 | % | |||||||||||||
Net assets, end of period (000s) | $ | 186,824 | $ | 198,945 | $ | 240,934 | $ | 315,359 | $ | 411,289 |
(a) On October 1, 2011, Retail A shares and G-Trust shares were converted into Capital Class shares when Capital Class shares were first offered. The financial information of Capital Class shares prior to this conversion is that of G-Trust shares, which reflects substantially the same expenses as those of Capital Class shares. If the historic financial information of Retail A shares was used instead of that of G-Trust shares, the total return for each period prior to the conversion would be lower due to the higher expenses applicable to Retail A shares.
(b) On May 1, 2010, Columbia Massachusetts Municipal Reserves was renamed BofA Massachusetts Municipal Reserves.
(c) On December 31, 2009, Columbia Massachusetts Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Massachusetts Municipal Reserves.
(d) Per share data was calculated using the average shares outstanding during the period.
(e) Rounds to less than $0.001 per share.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights – BofA Massachusetts Municipal Reserves
Selected data for a share outstanding throughout the period is as follows:
Investor Class Shares | Period Ended August 31, 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment loss (b) | — | ||||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | (c) | |||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (d)(e) | 0.03 | %(f) | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (g) | 0.24 | %(h) | |||||
Waiver/Reimbursement | 0.49 | %(h) | |||||
Net investment income (g) | — | ||||||
Net assets, end of period (000s) | $ | 586 |
(a) Investor Class shares commenced operations on October 3, 2011. Per share data and total return reflect activity from that date.
(b) Per share data was calculated using the average shares outstanding during the period.
(c) Rounds to less than $0.001 per share.
(d) Total return at net asset value assuming all distributions reinvested.
(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) Annualized.
See Accompanying Notes to Financial Statements.
20
Financial Highlights – BofA Massachusetts Municipal Reserves
Selected data for a share outstanding throughout the period is as follows:
Trust Class Shares | Period Ended August 31, 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment income (b) | — | ||||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | ||||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (c)(d) | 0.00 | % | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (e) | 0.23 | %(f) | |||||
Waiver/Reimbursement | 0.25 | %(f) | |||||
Net investment income (e) | — | ||||||
Net assets, end of period (000s) | $ | 100 |
(a) Trust Class shares commenced operations on July 18, 2012. Per share data and total return reflect activity from that date.
(b) Per share data was calculated using the average shares outstanding during the period.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Annualized.
See Accompanying Notes to Financial Statements.
21
Notes to Financial Statements – BofA Money Market Funds
August 31, 2012
Note 1. Organization
BofA Funds Series Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust. Information presented in these financial statements pertains to BofA Connecticut Municipal Reserves and BofA Massachusetts Municipal Reserves (each a "Fund" and collectively, the "Funds"), each a series of the Trust. Each Fund is a non-diversified fund.
Investment Objectives
BofA Connecticut Municipal Reserves seeks current income exempt from federal income tax and Connecticut individual income tax, trust and estate income tax, consistent with capital preservation and maintenance of a high degree of liquidity. BofA Massachusetts Municipal Reserves seeks current income exempt from federal income tax and Massachusetts individual income tax, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and each Fund offers three classes of shares: Capital Class, Investor Class and Trust Class shares. Each class of shares is offered continuously at net asset value. On October 1, 2011, for each Fund, the Capital Class shares commenced operations and the G-Trust and Retail A shares converted into each Fund's Capital Class shares. On October 3, 2011, each Fund's Investor Class shares commenced operations. On July 18, 2012, each Fund's Trust Class shares commenced operations.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Funds are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Funds. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and each Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which each Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
22
BofA Money Market Funds, August 31, 2012
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Funds and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Fund are charged to such Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of a Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the
Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund's maximum exposure under these arrangements is unknown because this would involve future claims against such Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to a Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
23
BofA Money Market Funds, August 31, 2012
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from prior year undistributed tax-exempt income were identified and reclassified among the components of the Funds' net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Gain | Paid-In Capital | |||||||||||||
BofA Connecticut Municipal Reserves | $ | (1,733 | ) | $ | — | $ | 1,733 | ||||||||
BofA Massachusetts Municipal Reserves | (2,039 | ) | — | 2,039 |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, 2012 | |||||||||||||||
Tax-Exempt Income | Ordinary Income* | Long-Term Capital Gains | |||||||||||||
BofA Connecticut Municipal Reserves | $ | 120,335 | $ | — | $ | — | |||||||||
BofA Massachusetts Municipal Reserves | 152,456 | — | — | ||||||||||||
August 31, 2011 | |||||||||||||||
Tax-Exempt Income | Ordinary Income* | Long-Term Capital Gains | |||||||||||||
BofA Connecticut Municipal Reserves | $ | 123,946 | $ | — | $ | — | |||||||||
BofA Massachusetts Municipal Reserves | 229,428 | 11 | 28,578 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The components of distributable earnings on a tax basis as of August 31, 2012 were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||||||
BofA Connecticut Municipal Reserves | $ | 35,402 | $ | 2,651 | $ | — | |||||||||
BofA Massachusetts Municipal Reserves | 67,610 | 8,397 | — |
24
BofA Money Market Funds, August 31, 2012
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forwards by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
Capital loss carry forwards of $278 and $984 were utilized by BofA Connecticut Municipal Reserves and BofA Massachusetts Municipal Reserves, respectively, during the year ended August, 31, 2012.
Management is required to determine whether a tax position of the Funds is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by each Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Funds' federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA Advisors, LLC ("BofA"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Funds. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Funds and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Funds to an annual rate of 0.19% of each Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
For the year ended August 31, 2012, the effective investment advisory fee rates, net of fee waivers, were 0.15% of each Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Funds for a monthly administration fee, calculated based on the combined average net assets of the Funds and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
25
BofA Money Market Funds, August 31, 2012
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Funds. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Funds reimburse State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in each Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Funds' shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Funds.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below a Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statements of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Funds' shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Investor Class shares of the Funds. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act, permits the Funds to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of Investor Class shares.
The Trust also has adopted a shareholder servicing plan ("Servicing Plan") for the Investor Class shares of the Funds. The Servicing Plan permits the Funds to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to this plan is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits for each Fund, as a percentage of average daily net assets are as follows:
Distribution Plan: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Investor Class Shares – Connecticut Municipal Reserves | 0.10% | 0.10% | |||||||||
Investor Class Shares – Massachusetts Municipal Reserves | 0.10 | % | 0.10 | % | |||||||
Servicing Plan: | |||||||||||
Investor Class Shares – Connecticut Municipal Reserves | 0.25% | 0.25% | |||||||||
Investor Class Shares – Massachusetts Municipal Reserves | 0.25 | % | 0.25 | % | |||||||
Retail A Shares – Connecticut Municipal Reserves* | 0.10% | 0.10% | |||||||||
Retail A Shares – Massachusetts Municipal Reserves* | 0.08 | % | 0.08 | % |
* On October 1, 2011, the Fund's Retail A shares converted into the Fund's Capital Class shares, which has not adopted a Servicing Plan for such share class.
26
BofA Money Market Funds, August 31, 2012
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Trust Class shares of the Funds. Under the Administration Plans, the Funds may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plan: | Current Rate | Plan Limit | |||||||||
Trust Class Shares – Connecticut Municipal Reserves | 0.10% | 0.10% | |||||||||
Trust Class Shares – Massachusetts Municipal Reserves | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
BofA and/or some of the Funds' other service providers have contractually agreed to bear a portion of the Funds' expenses through December 31, 2012, so that the Funds' ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Funds' custodian, do not exceed the annual rate of 0.20% of each Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of each Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain
such yield in the event the Distributor's reimbursement of class specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time.
Fees Paid to Officers and Trustees
All officers of the Funds are employees of BofA or its affiliates and, with the exception of the Funds' Chief Compliance Officer, receive no compensation from the Funds. The Board has appointed a Chief Compliance Officer to the Funds in accordance with federal securities regulations. The Funds, along with other affiliated funds, pay their pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Funds, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of the Fund's assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statements of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statements of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.
27
BofA Money Market Funds, August 31, 2012
For the year ended August 31, 2012, these custody credits reduced total expenses for the Funds as follows:
Custody Credits | |||||||
BofA Connecticut Municipal Reserves | $ | 35 | |||||
BofA Massachusetts Municipal Reserves | 117 |
Note 6. Line of Credit
The Funds and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Funds and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Funds did not borrow under these arrangements.
Note 7. Shareholder Concentration
The Funds' risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Funds' shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds.
Note 8. Significant Risks and Contingencies
Non-Diversification Risk
The Funds are non-diversified, which generally means that they may invest a greater percentage of their total assets in the securities of fewer issuers than a "diversified" fund. This increases the risk that a change in the value of any one investment held by a Fund could affect the value of shares of the Fund more than it would affect the value of shares of a diversified fund holding a greater number of investments. Accordingly, the Funds' value will likely be more volitile than the value of more diversified funds. The Funds may not operate as non-diversified funds at all times.
Geographic Concentration Risk
BofA Connecticut Municipal Reserves and BofA Massachusetts Municipal Reserves invest primarily in debt obligations issued, respectively, by the State of Connecticut and the Commonwealth of Massachusetts, and their political subdivisions, agencies and public authorities, and other qualified issuers that may be located outside of Connecticut and Massachusetts, respectively. The Funds are more susceptible to economic and political factors adversely affecting issuers of each respective state's municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the
28
BofA Money Market Funds, August 31, 2012
"SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
29
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Connecticut Municipal Reserves and BofA Massachusetts Municipal Reserves
In our opinion, the accompanying statements of assets and liabilities, including the investment portfolios, 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 BofA Connecticut Municipal Reserves and BofA Massachusetts Municipal Reserves (each a series of BofA Funds Series Trust, hereafter collectively referred to as the "Funds") at August 31, 2012, and the results of each of their operations, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of 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 Funds' 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
30
Federal Income Tax Information (Unaudited) – BofA Money Market Funds
BofA Connecticut Municipal Reserves
For the fiscal year ended August 31, 2012, 100.00% of the distributions from net investment income of the Fund qualifies as exempt interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
BofA Massachusetts Municipal Reserves
For the fiscal year ended August 31, 2012, 100.00% of the distributions from net investment income of the Fund qualifies as exempt interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
31
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
32
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
33
Fund Governance (continued)
Officers (Continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
34
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Money Market Funds.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
37
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Connecticut Municipal Reserves
BofA Massachusetts Municipal Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-CTMA-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA Money Market Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 12 | ||||||
Statement of Operations | 14 | ||||||
Statement of Changes in Net Assets | 15 | ||||||
Financial Highlights | 17 | ||||||
Notes to Financial Statements | 23 | ||||||
Report of Independent Registered Public Accounting Firm | 30 | ||||||
Federal Income Tax Information | 31 | ||||||
Fund Governance | 32 | ||||||
Important Information About This Report | 37 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Money Market Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
n For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
n For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.33 | 1.81 | 1.83 | 0.36 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.80 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.80 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.60 | 1,023.93 | 1.21 | 1.22 | 0.24 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.38 | 1.76 | 1.78 | 0.35 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.30 | 1,023.63 | 1.51 | 1.53 | 0.30 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA Money Market Reserves
August 31, 2012
Certificates of Deposit – 25.0%
Par ($) | Value ($) | ||||||||||
Bank of Montreal | |||||||||||
0.300% 02/26/13 | 75,000,000 | 75,000,000 | |||||||||
0.310% 01/28/13 | 62,570,000 | 62,570,000 | |||||||||
Bank of Nova Scotia/Houston | |||||||||||
0.320% 10/18/12 | 50,000,000 | 50,000,000 | |||||||||
0.327% 12/19/12 (09/19/12) (a)(b) | 46,150,000 | 46,150,000 | |||||||||
0.327% 12/20/12 (09/20/12) (a)(b) | 46,265,000 | 46,265,000 | |||||||||
0.330% 01/10/13 | 54,680,000 | 54,680,000 | |||||||||
0.750% 10/15/12 | 3,610,000 | 3,611,727 | |||||||||
0.755% 10/18/12 (a) | 6,825,000 | 6,828,421 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd./NY | |||||||||||
0.330% 11/23/12 | 38,000,000 | 38,000,000 | |||||||||
0.330% 11/27/12 | 23,400,000 | 23,400,000 | |||||||||
0.340% 11/08/12 | 113,000,000 | 113,000,000 | |||||||||
0.340% 11/13/12 | 45,000,000 | 45,000,000 | |||||||||
0.360% 09/12/12 | 60,350,000 | 60,350,000 | |||||||||
0.360% 09/13/12 | 40,000,000 | 40,000,000 | |||||||||
0.360% 09/25/12 | 40,000,000 | 40,000,000 | |||||||||
0.360% 10/23/12 | 43,000,000 | 43,000,000 | |||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA/NY | |||||||||||
0.520% 10/12/12 | 46,680,000 | 46,680,000 | |||||||||
0.537% 11/09/12 (a) | 14,860,000 | 14,861,980 | |||||||||
DnB Norbank ASA/NY | |||||||||||
0.300% 10/11/12 | 42,705,000 | 42,705,000 | |||||||||
National Australia Bank Ltd. | |||||||||||
0.286% 10/26/12 (09/26/12) (a)(b) | 74,895,000 | 74,895,000 | |||||||||
0.340% 11/09/12 | 43,395,000 | 43,395,000 | |||||||||
0.350% 01/18/13 | 51,600,000 | 51,600,000 | |||||||||
0.365% 01/25/13 | 43,000,000 | 43,000,870 | |||||||||
0.380% 01/11/13 | 32,400,000 | 32,400,000 | |||||||||
0.380% 01/15/13 | 51,000,000 | 51,000,000 | |||||||||
Nordea Bank Finland/NY | |||||||||||
0.350% 02/13/13 | 100,000,000 | 100,000,000 | |||||||||
0.360% 02/15/13 | 100,550,000 | 100,550,000 | |||||||||
0.360% 02/19/13 | 50,000,000 | 50,000,000 | |||||||||
0.360% 02/21/13 | 121,000,000 | 120,994,197 | |||||||||
0.400% 01/18/13 | 160,630,000 | 160,630,000 | |||||||||
Skandinaviska Enskilda Banken/NY | |||||||||||
0.390% 10/01/12 | 90,000,000 | 90,000,000 | |||||||||
0.440% 09/26/12 | 25,535,000 | 25,535,531 | |||||||||
0.440% 10/01/12 | 108,570,000 | 108,570,000 | |||||||||
Sumitomo Mitsui Banking Corp./NY | |||||||||||
0.320% 11/09/12 | 45,935,000 | 45,935,000 | |||||||||
0.320% 11/21/12 | 30,000,000 | 30,000,000 |
Par ($) | Value ($) | ||||||||||
0.320% 11/23/12 | 25,500,000 | 25,500,000 | |||||||||
0.320% 11/27/12 | 25,000,000 | 25,000,000 | |||||||||
0.340% 10/12/12 | 170,000,000 | 170,000,000 | |||||||||
0.340% 10/16/12 | 36,000,000 | 36,000,000 | |||||||||
0.340% 10/24/12 | 70,950,000 | 70,950,000 | |||||||||
Svenska Handelsbanken/NY | |||||||||||
0.290% 10/19/12 | 40,450,000 | 40,450,000 | |||||||||
0.310% 09/24/12 | 100,000,000 | 100,000,000 | |||||||||
0.315% 10/12/12 | 112,000,000 | 112,000,637 | |||||||||
0.570% 09/04/12 | 41,500,000 | 41,500,000 | |||||||||
Toronto-Dominion Bank/NY | |||||||||||
0.300% 01/22/13 | 62,205,000 | 62,205,000 | |||||||||
0.300% 01/29/13 | 45,750,000 | 45,750,000 | |||||||||
0.300% 02/20/13 | 39,040,000 | 39,040,000 | |||||||||
0.307% 12/20/12 (09/20/12) (a)(b) | 85,115,000 | 85,115,000 | |||||||||
0.345% 11/05/12 (09/04/12) (a)(b) | 30,935,000 | 30,939,034 | |||||||||
Westpac Banking Corp./NY | |||||||||||
0.314% 12/06/12 (09/06/12) (a)(b) | 45,600,000 | 45,600,000 | |||||||||
Total Certificates of Deposit (cost of $2,910,657,397) | 2,910,657,397 | ||||||||||
Asset-Backed Commercial Paper – 22.0% | |||||||||||
Fairway Finance Corp. | |||||||||||
0.271% 11/09/12 (09/09/12) (a)(b)(d) | 30,107,000 | 30,107,000 | |||||||||
FCAR Owner Trust | |||||||||||
0.280% 10/01/12 (c) | 131,703,000 | 131,672,269 | |||||||||
0.280% 11/14/12 (c) | 31,770,000 | 31,751,715 | |||||||||
0.300% 09/12/12 (c) | 3,845,000 | 3,844,648 | |||||||||
0.350% 09/04/12 (c) | 19,965,000 | 19,964,418 | |||||||||
0.410% 02/04/13 (c) | 47,445,000 | 47,360,706 | |||||||||
0.450% 10/01/12 (c) | 102,000,000 | 101,961,750 | |||||||||
0.450% 01/02/13 (c) | 101,128,000 | 100,972,516 | |||||||||
0.500% 09/04/12 (c) | 8,000,000 | 7,999,667 | |||||||||
Gotham Funding Corp. | |||||||||||
0.280% 10/23/12 (c)(d) | 112,716,000 | 112,670,413 | |||||||||
0.280% 10/24/12 (c)(d) | 101,550,000 | 101,508,139 | |||||||||
0.280% 11/13/12 (c)(d) | 11,090,000 | 11,083,703 | |||||||||
0.280% 11/26/12 (c)(d) | 25,000,000 | 24,983,278 | |||||||||
0.280% 11/28/12 (c)(d) | 17,000,000 | 16,988,364 | |||||||||
Jupiter Securitization Co. LLC | |||||||||||
0.240% 12/21/12 (c)(d) | 18,799,000 | 18,785,089 | |||||||||
Kells Funding LLC | |||||||||||
0.400% 09/04/12 (c)(d) | 16,643,000 | 16,642,445 | |||||||||
0.410% 10/02/12 (c)(d) | 21,300,000 | 21,292,480 |
See Accompanying Notes to Financial Statements.
2
BofA Money Market Reserves
August 31, 2012
Asset-Backed Commercial Paper (continued)
Par ($) | Value ($) | ||||||||||
0.430% 09/04/12 (c)(d) | 89,990,000 | 89,986,775 | |||||||||
0.430% 10/17/12 (c)(d) | 48,196,000 | 48,169,519 | |||||||||
0.450% 10/05/12 (c)(d) | 24,242,000 | 24,231,697 | |||||||||
0.450% 10/17/12 (c)(d) | 68,611,000 | 68,571,549 | |||||||||
0.450% 10/18/12 (c)(d) | 45,535,000 | 45,508,248 | |||||||||
0.500% 01/15/13 (c)(d) | 40,755,000 | 40,678,018 | |||||||||
0.550% 10/01/12 (c)(d) | 19,110,000 | 19,101,241 | |||||||||
0.550% 10/02/12 (c)(d) | 83,985,000 | 83,945,224 | |||||||||
0.590% 01/02/13 (c)(d) | 35,000,000 | 34,929,446 | |||||||||
0.600% 01/02/13 (c)(d) | 66,761,000 | 66,624,140 | |||||||||
0.610% 10/01/12 (c)(d) | 10,000,000 | 9,994,917 | |||||||||
Manhattan Asset Funding Co. LLC | |||||||||||
0.220% 09/25/12 (c)(d) | 66,865,000 | 66,855,193 | |||||||||
0.220% 10/10/12 (c)(d) | 17,615,000 | 17,610,802 | |||||||||
0.230% 10/04/12 (c)(d) | 25,000,000 | 24,994,729 | |||||||||
0.230% 10/09/12 (c)(d) | 18,550,000 | 18,545,496 | |||||||||
0.250% 10/16/12 (c)(d) | 1,920,000 | 1,919,400 | |||||||||
0.270% 10/11/12 (c)(d) | 26,707,000 | 26,698,988 | |||||||||
0.270% 10/15/12 (c)(d) | 13,285,000 | 13,280,616 | |||||||||
0.330% 11/20/12 (c)(d) | 54,965,000 | 54,924,692 | |||||||||
Old Line Funding LLC | |||||||||||
0.300% 01/16/13 (c)(d) | 27,000,000 | 26,969,175 | |||||||||
0.320% 02/19/13 (c)(d) | 39,115,000 | 39,055,545 | |||||||||
0.320% 02/21/13 (c)(d) | 26,040,000 | 25,999,956 | |||||||||
Rhein Main Securitisation Ltd. | |||||||||||
0.470% 09/28/12 (c)(d) | 44,830,000 | 44,814,197 | |||||||||
0.510% 09/14/12 (c)(d) | 24,565,000 | 24,560,476 | |||||||||
Royal Park Investments Funding Corp. | |||||||||||
0.650% 09/06/12 (c)(d) | 127,450,000 | 127,438,494 | |||||||||
0.650% 09/13/12 (c)(d) | 61,435,000 | 61,421,690 | |||||||||
0.650% 09/18/12 (c)(d) | 59,600,000 | 59,581,706 | |||||||||
0.650% 09/19/12 (c)(d) | 66,260,000 | 66,238,465 | |||||||||
0.650% 09/27/12 (c)(d) | 58,315,000 | 58,287,624 | |||||||||
0.650% 10/03/12 (c)(d) | 45,525,000 | 45,498,697 | |||||||||
Salisbury Receivables Co. LLC | |||||||||||
0.250% 10/23/12 (c)(d) | 38,000,000 | 37,986,278 | |||||||||
0.270% 09/17/12 (c)(d) | 50,000,000 | 49,994,000 | |||||||||
0.270% 10/16/12 (c)(d) | 40,000,000 | 39,986,500 | |||||||||
0.270% 10/22/12 (c)(d) | 50,000,000 | 49,980,875 | |||||||||
0.300% 11/05/12 (c)(d) | 60,000,000 | 59,967,500 | |||||||||
0.300% 11/07/12 (c)(d) | 35,000,000 | 34,980,458 | |||||||||
0.300% 11/16/12 (c)(d) | 65,515,000 | 65,473,507 | |||||||||
0.310% 11/01/12 (c)(d) | 6,500,000 | 6,496,586 | |||||||||
Sheffield Receivables Corp. | |||||||||||
0.250% 10/24/12 (c)(d) | 39,310,000 | 39,295,532 | |||||||||
0.300% 11/20/12 (c)(d) | 50,000,000 | 49,966,667 | |||||||||
Total Asset-Backed Commercial Paper (cost of $2,570,153,218) | 2,570,153,218 |
Commercial Paper – 16.7%
Par ($) | Value ($) | ||||||||||
ANZ National International Ltd. | |||||||||||
0.340% 02/22/13 (c)(d) | 25,000,000 | 24,958,917 | |||||||||
0.360% 11/05/12 (c)(d) | 46,400,000 | 46,369,840 | |||||||||
0.390% 12/14/12 (09/14/12) (a)(b)(d) | 60,600,000 | 60,600,000 | |||||||||
0.394% 12/07/12 (09/07/12) (a)(b)(d) | 49,205,000 | 49,205,000 | |||||||||
0.410% 10/03/12 (c)(d) | 67,000,000 | 66,975,582 | |||||||||
0.410% 01/16/13 (c)(d) | 25,000,000 | 24,960,993 | |||||||||
0.420% 01/14/13 (c)(d) | 47,040,000 | 46,965,912 | |||||||||
0.440% 01/11/13 (c)(d) | 43,000,000 | 42,930,627 | |||||||||
ASB Finance Ltd. | |||||||||||
0.345% 12/03/12 (09/04/12) (a)(b)(d) | 44,245,000 | 44,245,000 | |||||||||
0.480% 09/27/12 (c)(d) | 18,500,000 | 18,493,587 | |||||||||
Australia & New Zealand Banking Group Ltd. | |||||||||||
0.295% 11/27/12 (09/28/12) (a)(b)(d) | 100,000,000 | 100,000,000 | |||||||||
0.344% 12/07/12 (09/07/12) (a)(b)(d) | 101,000,000 | 101,000,000 | |||||||||
BNZ International Funding Ltd. | |||||||||||
0.349% 11/16/12 (09/17/12) (a)(b)(d) | 46,995,000 | 46,995,000 | |||||||||
0.460% 01/03/13 (c)(d) | 6,655,000 | 6,644,456 | |||||||||
0.470% 01/03/13 (c)(d) | 33,000,000 | 32,946,577 | |||||||||
Commonwealth Bank of Australia | |||||||||||
0.271% 11/09/12 (09/09/12) (a)(b)(d) | 86,020,000 | 86,018,387 | |||||||||
0.287% 10/18/12 (09/18/12) (a)(b)(d) | 39,115,000 | 39,115,000 | |||||||||
0.310% 10/26/12 (c)(d) | 47,615,000 | 47,592,449 | |||||||||
0.380% 01/11/13 (c)(d) | 13,500,000 | 13,481,190 | |||||||||
0.380% 01/14/13 (c)(d) | 75,000,000 | 74,893,125 | |||||||||
Erste Abwicklungsanstalt | |||||||||||
0.370% 09/11/12 (c)(d) | 24,068,000 | 24,065,526 | |||||||||
0.370% 09/13/12 (c)(d) | 9,627,000 | 9,625,813 | |||||||||
0.370% 09/20/12 (c)(d) | 12,034,000 | 12,031,650 | |||||||||
0.420% 01/23/13 (c)(d) | 10,190,000 | 10,172,881 | |||||||||
0.440% 09/25/12 (c)(d) | 29,985,000 | 29,976,204 | |||||||||
0.500% 09/24/12 (c)(d) | 52,745,000 | 52,728,151 | |||||||||
0.500% 01/10/13 (c)(d) | 16,000,000 | 15,970,889 | |||||||||
0.520% 11/09/12 (c)(d) | 63,285,000 | 63,221,926 | |||||||||
0.520% 11/16/12 (c)(d) | 23,810,000 | 23,783,862 | |||||||||
0.580% 10/19/12 (c)(d) | 63,670,000 | 63,620,762 | |||||||||
0.600% 10/05/12 (c)(d) | 106,000,000 | 105,939,933 | |||||||||
0.600% 10/09/12 (c)(d) | 62,000,000 | 61,960,733 | |||||||||
General Electric Co. | |||||||||||
0.280% 02/19/13 (c) | 75,000,000 | 74,900,250 |
See Accompanying Notes to Financial Statements.
3
BofA Money Market Reserves
August 31, 2012
Commercial Paper (continued)
Par ($) | Value ($) | ||||||||||
HSBC Bank PLC | |||||||||||
0.410% 01/22/13 (c)(d) | 72,580,000 | 72,461,795 | |||||||||
National Australia Funding Delaware, Inc. | |||||||||||
0.320% 11/01/12 (c)(d) | 43,010,000 | 42,986,679 | |||||||||
0.330% 01/14/13 (c)(d) | 34,741,000 | 34,698,008 | |||||||||
Nestle Finance International Ltd. | |||||||||||
0.300% 12/17/12 (c) | 15,000,000 | 14,986,625 | |||||||||
0.310% 12/17/12 (c) | 32,370,000 | 32,340,175 | |||||||||
Nordea North America, Inc. | |||||||||||
0.350% 02/25/13 (c) | 27,000,000 | 26,953,537 | |||||||||
Svenska Handelsbanken, Inc. | |||||||||||
0.350% 03/04/13 (c)(d) | 100,000,000 | 99,821,111 | |||||||||
Westpac Securities NZ Ltd. | |||||||||||
0.390% 10/02/12 (c)(d) | 6,000,000 | 5,997,985 | |||||||||
0.420% 09/06/12 (c)(d) | 30,857,000 | 30,855,200 | |||||||||
0.430% 10/01/12 (c)(d) | 37,660,000 | 37,646,505 | |||||||||
0.460% 01/02/13 (c)(d) | 28,000,000 | 27,955,993 | |||||||||
Total Commercial Paper (cost of $1,949,093,835) | 1,949,093,835 | ||||||||||
Municipal Bonds (b)(e) – 6.8% | |||||||||||
Arizona – 0.1% | |||||||||||
AZ Pima County Industrial Development Authority | |||||||||||
Tucson Electric Power Co., | |||||||||||
Series 1982, LOC: Bank of New York 0.130% 12/01/22 (09/05/12) | 15,450,000 | 15,450,000 | |||||||||
Arizona Total | 15,450,000 | ||||||||||
California – 0.7% | |||||||||||
CA Calleguas-Las Virgenes Public Financing Authority | |||||||||||
Municipal Water District, | |||||||||||
Series 2008 A, LOC: Wells Fargo Bank N.A. 0.150% 07/01/37 (09/06/12) | 8,535,000 | 8,535,000 | |||||||||
CA East Bay Municipal Utility District | |||||||||||
Series 2008 A-2, | |||||||||||
SPA: Barclays Bank PLC 0.150% 06/01/38 (09/05/12) | 14,225,000 | 14,225,000 | |||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2000 B-4, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.140% 07/01/35 (09/05/12) | 15,300,000 | 15,300,000 |
Par ($) | Value ($) | ||||||||||
CA State | |||||||||||
Series 2005 A-2-1, | |||||||||||
LOC: Barclays Bank PLC 0.210% 05/01/40 (09/05/12) | 41,625,000 | 41,625,000 | |||||||||
California Total | 79,685,000 | ||||||||||
Colorado – 0.4% | |||||||||||
CO Housing & Finance Authority | |||||||||||
Multi-Family: | |||||||||||
Series 2003 A-2, SPA: FHLB 0.190% 10/01/33 (09/05/12) | 3,000,000 | 3,000,000 | |||||||||
Series 2004 A1, SPA: FHLB 0.180% 10/01/34 (09/05/12) | 10,105,000 | 10,105,000 | |||||||||
Series 2008 A1, SPA: FHLB 0.180% 04/01/29 (09/05/12) | 5,740,000 | 5,740,000 | |||||||||
Series 2008 C1, SPA: FHLB 0.180% 10/01/38 (09/05/12) | 3,970,000 | 3,970,000 | |||||||||
Series 2001 AA1, | |||||||||||
LOC: FNMA, LOC: FHLMC 0.180% 05/01/41 (09/05/12) | 14,505,000 | 14,505,000 | |||||||||
Series 2003 A1, | |||||||||||
LOC: FNMA 0.240% 11/01/30 (09/05/12) | 1,980,000 | 1,980,000 | |||||||||
Series 2005 B-1, | |||||||||||
SPA: FHLB 0.180% 04/01/40 (09/05/12) | 5,830,000 | 5,830,000 | |||||||||
Series 2006 CL1, | |||||||||||
SPA: FHLB 0.190% 11/01/36 (09/05/12) | 700,000 | 700,000 | |||||||||
Single Family: | |||||||||||
Series 2002 A-1, SPA: FHLB 0.240% 11/01/13 (09/05/12) | 1,340,000 | 1,340,000 |
See Accompanying Notes to Financial Statements.
4
BofA Money Market Reserves
August 31, 2012
Municipal Bonds (b)(e) (continued)
Par ($) | Value ($) | ||||||||||
Series 2003 B1, LOC: FNMA, LOC: FHLMC 0.180% 11/01/33 (09/05/12) | 3,380,000 | 3,380,000 | |||||||||
Series 2006 B1, LOC: FNMA, LOC: FHLMC 0.180% 11/01/36 (09/05/12) | 320,000 | 320,000 | |||||||||
Series 2006 C1, LOC: FNMA, LOC: FHLMC 0.180% 11/01/36 (09/05/12) | 315,000 | 315,000 | |||||||||
Colorado Total | 51,185,000 | ||||||||||
Connecticut – 0.2% | |||||||||||
CT Housing Finance Authority | |||||||||||
Series 2008 A5, | |||||||||||
SPA: FHLB 0.160% 11/15/38 (09/06/12) | 12,049,000 | 12,049,000 | |||||||||
Series 2008 B4, | |||||||||||
SPA: Landesbank Hessen-Thüringen 0.190% 11/15/38 (09/06/12) | 15,610,000 | 15,610,000 | |||||||||
Connecticut Total | 27,659,000 | ||||||||||
Illinois – 0.4% | |||||||||||
IL Toll Highway Authority | |||||||||||
Series 2008 A-1A, | |||||||||||
SPA: JPMorgan Chase Bank 0.270% 01/01/31 (09/06/12) | 51,070,000 | 51,070,000 | |||||||||
Illinois Total | 51,070,000 | ||||||||||
Iowa – 0.2% | |||||||||||
IA Finance Authority | |||||||||||
Series 2004 B, AMT, | |||||||||||
SPA: FHLB 0.210% 07/01/34 (09/06/12) | 5,445,000 | 5,445,000 | |||||||||
Series 2007 C, | |||||||||||
SPA: FHLB 0.180% 07/01/37 (09/06/12) | 830,000 | 830,000 |
Par ($) | Value ($) | ||||||||||
Series 2007 G, | |||||||||||
SPA: FHLB 0.180% 01/01/38 (09/06/12) | 980,000 | 980,000 | |||||||||
Series 2007, | |||||||||||
SPA: FHLB 0.180% 01/01/39 (09/06/12) | 4,970,000 | 4,970,000 | |||||||||
Series 2009 G, | |||||||||||
SPA: FHLB 0.180% 01/01/39 (09/06/12) | 5,495,000 | 5,495,000 | |||||||||
Iowa Total | 17,720,000 | ||||||||||
Massachusetts – 0.5% | |||||||||||
MA Bay Transportation Authority | |||||||||||
General Transportation System, | |||||||||||
Series 2000 A1, SPA: Barclays Bank PLC 0.160% 03/01/30 (09/05/12) | 56,015,000 | 56,015,000 | |||||||||
MA Simmons College | |||||||||||
Series 2008, | |||||||||||
LOC: TD Bank N.A. 0.180% 10/01/22 (09/06/12) | 5,050,000 | 5,050,000 | |||||||||
Massachusetts Total | 61,065,000 | ||||||||||
Michigan – 0.4% | |||||||||||
MI Kent Hospital Finance Authority | |||||||||||
Spectrum Health, | |||||||||||
Series 2008 C, LOC: Bank of New York 0.120% 01/15/26 (09/05/12) | 44,100,000 | 44,100,000 | |||||||||
Michigan Total | 44,100,000 | ||||||||||
Minnesota – 0.0% | |||||||||||
MN Housing Finance Agency | |||||||||||
Residential Housing, | |||||||||||
Series 2007 T, SPA: State Street Bank & Trust Co. 0.210% 07/01/48 (09/06/12) | 515,000 | 515,000 | |||||||||
Minnesota Total | 515,000 |
See Accompanying Notes to Financial Statements.
5
BofA Money Market Reserves
August 31, 2012
Municipal Bonds (b)(e) (continued)
Par ($) | Value ($) | ||||||||||
Missouri – 0.1% | |||||||||||
MO St. Louis Industrial Development Authority | |||||||||||
St. Louis Art Museum Foundation, | |||||||||||
Series 2009 B, LOC: U.S. Bank N.A. 0.180% 12/01/40 (09/05/12) | 9,930,000 | 9,930,000 | |||||||||
Missouri Total | 9,930,000 | ||||||||||
New Hampshire – 0.1% | |||||||||||
NH Health & Education Facilities Authority | |||||||||||
Dartmouth College, | |||||||||||
Series 2007 C, SPA: JPMorgan Chase Bank 0.180% 06/01/41 (09/05/12) | 4,855,000 | 4,855,000 | |||||||||
New Hampshire Total | 4,855,000 | ||||||||||
New Mexico – 0.1% | |||||||||||
NM Finance Authority | |||||||||||
Series 2008, | |||||||||||
LOC: Royal Bank of Canada 0.180% 12/15/26 (09/06/12) | 10,850,000 | 10,850,000 | |||||||||
New Mexico Total | 10,850,000 | ||||||||||
New York – 0.2% | |||||||||||
NY New York City | |||||||||||
Series 2011 D-3, | |||||||||||
LOC: Bank of New York 0.170% 10/01/39 (09/04/12) | 19,750,000 | 19,750,000 | |||||||||
New York Total | 19,750,000 | ||||||||||
Pennsylvania – 0.4% | |||||||||||
PA Philadelphia Airport Revenue | |||||||||||
Series 2005 C2, AMT, | |||||||||||
LOC: Royal Bank of Canada 0.170% 06/15/25 (09/05/12) | 14,690,000 | 14,690,000 | |||||||||
PA Philadelphia Water & Sewer Revenue | |||||||||||
Series 1997 B, | |||||||||||
LOC: TD Bank N.A. 0.150% 08/01/27 (09/05/12) | 29,055,000 | 29,055,000 | |||||||||
Pennsylvania Total | 43,745,000 |
Par ($) | Value ($) | ||||||||||
Texas – 2.4% | |||||||||||
TX JPMorgan Chase Putters/Drivers Trust | |||||||||||
Series 2012 4264, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.200% 08/30/13 (09/04/12) (d) | 105,570,000 | 105,570,000 | |||||||||
State of Texas | |||||||||||
Series 2012-4262, LIQ FAC: JPMorgan Chase Bank 0.200% 08/30/13 (09/04/12) (d) | 50,250,000 | 50,250,000 | |||||||||
TX State | |||||||||||
Product Development Project, | |||||||||||
Series 2005 A, SPA: National Australia Bank 0.210% 06/01/45 (09/06/12) | 1,475,000 | 1,475,000 | |||||||||
Small Business, | |||||||||||
Series 2005 B, SPA: National Australia Bank 0.210% 06/01/45 (09/06/12) | 1,125,000 | 1,125,000 | |||||||||
Veterans Assistance, | |||||||||||
Series 2004 I, SPA: JPMorgan Chase Bank 0.210% 12/01/24 (09/05/12) | 5,400,000 | 5,400,000 | |||||||||
Veterans Housing Assistance, | |||||||||||
Series 1999 A-2, LIQ FAC: JPMorgan Chase Bank 0.170% 12/01/29 (09/05/12) | 26,000,000 | 26,000,000 | |||||||||
Veterans Housing: | |||||||||||
Series 1997 B-2, LIQ FAC: State Street Bank & Trust Co. 0.210% 12/01/29 (09/05/12) | 13,000,000 | 13,000,000 | |||||||||
Series 2003, AMT, SPA: Landesbank Hessen-Thüringen 0.170% 06/01/34 (09/05/12) | 7,565,000 | 7,565,000 | |||||||||
Series 2004, SPA: JPMorgan Chase Bank 0.210% 06/01/20 (09/05/12) | 2,600,000 | 2,600,000 | |||||||||
Series 2006 B, LIQ FAC: Landesbank Hessen-Thüringen 0.280% 12/01/26 (09/05/12) | 6,465,000 | 6,465,000 |
See Accompanying Notes to Financial Statements.
6
BofA Money Market Reserves
August 31, 2012
Municipal Bonds (b)(e) (continued)
Par ($) | Value ($) | ||||||||||
Series 2009, SPA: JPMorgan Chase & Co. 0.210% 06/01/31 (09/05/12) | 735,000 | 735,000 | |||||||||
Veterans Land: | |||||||||||
Series 2000, SPA: JPMorgan Chase Bank: 0.190% 12/01/20 (09/04/12) | 9,940,000 | 9,940,000 | |||||||||
0.190% 12/01/30 (09/04/12) | 12,100,000 | 12,100,000 | |||||||||
Series 2003, SPA: State Street Bank & Trust Co. 0.210% 12/01/23 (09/04/12) | 3,165,000 | 3,165,000 | |||||||||
Series 2004, SPA: State Street Bank & Trust Co. 0.190% 12/01/24 (09/04/12) | 9,760,000 | 9,760,000 | |||||||||
Series 2006 B, SPA: Landesbank Hessen-Thüringen 0.180% 12/01/26 (09/05/12) | 5,795,000 | 5,795,000 | |||||||||
TX University of Texas | |||||||||||
Financing System, | |||||||||||
Series 2008 B, LIQ FAC: University of Texas Investment Management Co. 0.150% 08/01/25 (09/06/12) | 20,745,000 | 20,745,000 | |||||||||
Texas Total | 281,690,000 | ||||||||||
Washington – 0.3% | |||||||||||
WA Health Care Facilities Authority | |||||||||||
MultiCare Health System, | |||||||||||
Series 2007 C, LOC: Barclays Bank PLC 0.140% 08/15/41 (09/05/12) | 17,605,000 | 17,605,000 | |||||||||
WA Port of Seattle | |||||||||||
Series 2008, AMT, | |||||||||||
LOC: Landesbank Hessen-Thüringen 0.240% 07/01/33 (09/05/12) | 17,300,000 | 17,300,000 | |||||||||
Washington Total | 34,905,000 |
Par ($) | Value ($) | ||||||||||
Wisconsin – 0.3% | |||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Wheaton Franciscan Services: | |||||||||||
Series 2003 B, LOC: U.S. Bank N.A. 0.170% 08/15/33 (09/05/12) | 11,650,000 | 11,650,000 | |||||||||
Series 2007, LOC: PNC Bank N.A. 0.140% 08/15/36 (09/05/12) | 19,030,000 | 19,030,000 | |||||||||
WI Housing & Economic Development Authority | |||||||||||
Series 2006 B, | |||||||||||
SPA: Bank of Nova Scotia 0.210% 09/01/37 (09/06/12) | 5,010,000 | 5,010,000 | |||||||||
Wisconsin Total | 35,690,000 | ||||||||||
Total Municipal Bonds (cost of $789,864,000) | 789,864,000 | ||||||||||
Time Deposits – 6.0% | |||||||||||
Citibank N.A. | |||||||||||
0.170% 09/04/12 | 300,000,000 | 300,000,000 | |||||||||
SSB Cayman | |||||||||||
0.010% 09/04/12 | 327,051,000 | 327,051,000 | |||||||||
U.S. Bank N.A. | |||||||||||
0.150% 09/04/12 | 77,765,000 | 77,765,000 | |||||||||
Total Time Deposits (cost of $704,816,000) | 704,816,000 | ||||||||||
Government & Agency Obligations – 3.9% | |||||||||||
U.S. Government Agencies – 2.0% | |||||||||||
Federal Home Loan Bank | |||||||||||
1.875% 06/21/13 | 34,500,000 | 34,950,609 | |||||||||
Federal Home Loan Mortgage Corp. | |||||||||||
0.440% 11/18/13 (09/04/12) (a)(b) | 57,800,000 | 57,785,828 | |||||||||
Federal National Mortgage Association | |||||||||||
0.267% 12/20/12 (09/20/12) (a)(b) | 25,000,000 | 24,998,475 | |||||||||
0.370% 01/27/14 (09/04/12) (a)(b) | 14,000,000 | 13,998,000 | |||||||||
0.380% 10/17/13 (09/04/12) (a)(b) | 29,605,000 | 29,598,227 | |||||||||
0.400% 02/01/13 (11/01/12) (a)(b) | 71,300,000 | 71,294,954 | |||||||||
U.S. Government Agencies Total | 232,626,093 |
See Accompanying Notes to Financial Statements.
7
BofA Money Market Reserves
August 31, 2012
Government & Agency Obligations (continued)
Par ($) | Value ($) | ||||||||||
U.S. Government Obligations – 1.9% | |||||||||||
U.S. Treasury Note | |||||||||||
0.500% 11/30/12 | 17,500,000 | 17,513,672 | |||||||||
0.625% 01/31/13 | 21,340,000 | 21,380,097 | |||||||||
1.125% 12/15/12 | 26,985,000 | 27,057,789 | |||||||||
1.375% 09/15/12 | 30,800,000 | 30,814,391 | |||||||||
1.375% 01/15/13 | 74,985,000 | 75,322,221 | |||||||||
3.375% 11/30/12 | 25,000,000 | 25,196,012 | |||||||||
3.875% 10/31/12 | 24,375,000 | 24,523,687 | |||||||||
U.S. Government Obligations Total | 221,807,869 | ||||||||||
Total Government & Agency Obligations (cost of $454,433,962) | 454,433,962 | ||||||||||
Corporate Bonds – 0.2% | |||||||||||
ANZ National International Ltd. | |||||||||||
2.375% 12/21/12 (d) | 1,252,000 | 1,259,534 | |||||||||
Commonwealth Bank of Australia | |||||||||||
2.750% 10/15/12 (d) | 16,525,000 | 16,572,411 | |||||||||
5.000% 11/06/12 (d) | 1,000,000 | 1,008,028 | |||||||||
General Electric Capital Corp. | |||||||||||
2.800% 01/08/13 | 4,714,000 | 4,752,064 | |||||||||
National Australia Bank Ltd. | |||||||||||
2.500% 01/08/13 (d) | 815,000 | 821,019 | |||||||||
Total Corporate Bonds (cost of $24,413,056) | 24,413,056 | ||||||||||
Repurchase Agreements – 19.4% | |||||||||||
Repurchase agreement with ABN AMRO Bank US, Inc., dated 08/31/12, due 09/04/12 at 0.330%, collateralized by common stocks, market value $133,165,402 (repurchase proceeds $121,059,439) | 121,055,000 | 121,055,000 | |||||||||
Repurchase agreement with Barclays Capital, dated 08/31/12, due 09/04/12 at 0.320%, collateralized by common stocks, market value $26,595,636 (repurchase proceeds $25,220,897) | 25,220,000 | 25,220,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Citibank N.A., dated 08/31/12, due 09/04/12 at 0.200%, collateralized by U.S. Government Agency obligations with various maturities to 12/01/47, market value $97,920,000 (repurchase proceeds $96,002,133) | 96,000,000 | 96,000,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/31/12, due 09/04/12 at 0.250%, collateralized by corporate bonds with various maturities to 07/15/22, market value $158,886,652 (repurchase proceeds $151,324,203) | 151,320,000 | 151,320,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/31/12, due 09/04/12 at 0.300%, collateralized by common stocks, exchange traded funds and preferred stocks, market value $395,756,367 (repurchase proceeds $365,697,190) | 365,685,000 | 365,685,000 | |||||||||
Repurchase agreement with Deutsche Bank Securities, dated 08/31/12, due 09/04/12 at 0.350%, collateralized by corporate bonds, common stocks and preferred stocks with various maturities to 11/15/37, market value $112,238,917 (repurchase proceeds $100,883,923) | 100,880,000 | 100,880,000 | |||||||||
Repurchase agreement with Goldman Sachs, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government Agency obligations with various maturities to 07/01/41, market value $102,002,154 (repurchase proceeds $102,002,111) | 100,000,000 | 100,000,000 |
See Accompanying Notes to Financial Statements.
8
BofA Money Market Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with HSBC Securities USA, Inc., dated 08/31/12, due 09/04/12 at 0.250%, collateralized by corporate bonds with various maturities to 05/15/22, market value $145,647,589 (repurchase proceeds $138,713,853) | 138,710,000 | 138,710,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/02/12, due 10/31/12 at 0.460%, collateralized by corporate bonds with various maturities to 03/15/22, market value $22,603,829 (repurchase proceeds $21,549,754) | 21,525,000 | 21,525,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/03/12, due 10/02/12 at 0.440%, collateralized by corporate bonds with various maturities to 04/15/17, market value $25,017,240 (repurchase proceeds $23,842,472) | 23,825,000 | 23,825,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/06/12, due 11/02/12 at 0.530%, collateralized by corporate bonds with various maturities to 03/15/18, market value $24,949,394 (repurchase proceeds $23,790,782) | 23,760,000 | 23,760,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/07/12, due 10/05/12 at 0.430%, collateralized by corporate bonds with various maturities to 07/15/22, market value $25,170,154 (repurchase proceeds $23,986,892) | 23,970,000 | 23,970,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/09/12, due 11/07/12 at 0.530%, collateralized by corporate bonds with various maturities to 04/01/22, market value $25,380,646 (repurchase proceeds $24,202,025) | 24,170,000 | 24,170,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/15/12, due 11/13/12 at 0.540%, collateralized by corporate bonds with various maturities to 06/15/22, market value $49,821,254 (repurchase proceeds $47,509,051) | 47,445,000 | 47,445,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/28/12, due 09/04/12 at 0.260%, collateralized by corporate bonds with various maturities to 04/15/22, market value $64,792,350 (repurchase proceeds $61,708,120) | 61,705,000 | 61,705,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/31/12, due 09/04/12 at 0.200%, collateralized by U.S. Government Agency obligations with various maturities to 09/01/42, market value $146,882,936 (repurchase proceeds $144,003,200) | 144,000,000 | 144,000,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/31/12, due 09/04/12 at 0.300%, collateralized by corporate bonds with various maturities to 06/01/22, market value $142,897,691 (repurchase proceeds $136,094,536) | 136,090,000 | 136,090,000 |
See Accompanying Notes to Financial Statements.
9
BofA Money Market Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with RBC Capital Markets, dated 08/30/12, due 09/06/12 at 0.230%, collateralized by corporate bonds with various maturities to 02/04/13, market value $102,212,050 (repurchase proceeds $99,239,438) | 99,235,000 | 99,235,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/31/12, due 11/29/12 at 0.390%, collateralized by corporate bonds with various maturities to 03/20/27, market value $196,978,227 (repurchase proceeds $187,923,047) | 187,740,000 | 187,740,000 | |||||||||
Repurchase agreement with TD USA Securities, Inc., dated 08/31/12, due 09/04/12 at 0.220%, collateralized by corporate bonds with various maturities to 03/01/19, market value $211,848,000 (repurchase proceeds $201,764,932) | 201,760,000 | 201,760,000 | |||||||||
Repurchase agreement with UBS Securities LLC, dated 08/31/12, due 09/04/12 at 0.200%, collateralized by a U.S. Government Agency obligation maturing 06/01/41, market value $15,603,960 (repurchase proceeds $15,298,340) | 15,298,000 | 15,298,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Wells Fargo, dated 08/23/12, due 11/26/12 at 0.450%, collateralized by corporate bonds with various maturities to 11/10/21, market value $57,009,750 (repurchase proceeds $54,359,475) | 54,295,000 | 54,295,000 | |||||||||
Repurchase agreement with Wells Fargo, dated 08/31/12, due 09/04/12 at 0.250%, collateralized by corporate bonds with various maturities to 06/15/22, market value $108,013,066 (repurchase proceeds $103,147,865) | 103,145,000 | 103,145,000 | |||||||||
Total Repurchase Agreements (cost of $2,266,833,000) | 2,266,833,000 | ||||||||||
Total Investments – 100.0% (cost of $11,670,264,468) (f) | 11,670,264,468 | ||||||||||
Other Assets & Liabilities, Net – (0.0)% | (476,814 | ) | |||||||||
Net Assets – 100.0% | 11,669,787,654 |
Notes to Investment Portfolio:
(a) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2012.
(b) Parenthetical date represents the effective maturity date for the security.
(c) The rate shown represents the discount rate at the date of purchase.
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $4,100,019,769 or 35.1% of net assets for the Fund.
(e) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(f) Cost for federal income tax purposes is $11,670,264,468.
See Accompanying Notes to Financial Statements.
10
BofA Money Market Reserves
August 31, 2012
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Certificates of Deposit | $ | — | $ | 2,910,657,397 | $ | — | $ | 2,910,657,397 | |||||||||||
Total Asset-Backed Commercial Paper | — | 2,570,153,218 | — | 2,570,153,218 | |||||||||||||||
Total Commercial Paper | — | 1,949,093,835 | — | 1,949,093,835 | |||||||||||||||
Total Municipal Bonds | — | 789,864,000 | — | 789,864,000 | |||||||||||||||
Total Time Deposits | — | 704,816,000 | — | 704,816,000 | |||||||||||||||
Total Government & Agency Obligations | — | 454,433,962 | — | 454,433,962 | |||||||||||||||
Total Corporate Bonds | — | 24,413,056 | — | 24,413,056 | |||||||||||||||
Total Repurchase Agreements | — | 2,266,833,000 | — | 2,266,833,000 | |||||||||||||||
Total Investments | $ | — | $ | 11,670,264,468 | $ | — | $ | 11,670,264,468 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Certificates of Deposit | 25.0 | ||||||
Asset-Backed Commercial Paper | 22.0 | ||||||
Commercial Paper | 16.7 | ||||||
Municipal Bonds | 6.8 | ||||||
Time Deposits | 6.0 | ||||||
Government & Agency Obligations | 3.9 | ||||||
Corporate Bonds | 0.2 | ||||||
80.6 | |||||||
Repurchase Agreements | 19.4 | ||||||
Other Assets & Liabilities, Net | (0.0 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
FHLB | Federal Home Loan Bank | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
11
Statement of Assets and Liabilities – BofA Money Market Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 9,403,431,468 | |||||||||
Repurchase agreements, at amortized cost approximating value | 2,266,833,000 | ||||||||||
Total investments, at value | 11,670,264,468 | ||||||||||
Cash | 928 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 15,856 | ||||||||||
Interest | 3,023,546 | ||||||||||
Trustees' deferred compensation plan | 64,900 | ||||||||||
Prepaid expenses | 94,699 | ||||||||||
Total Assets | 11,673,464,397 | ||||||||||
Liabilities | Expense reimbursement due to investment advisor | 8,900 | |||||||||
Payable for: | |||||||||||
Investments purchased | 1,055,872 | ||||||||||
Fund shares repurchased | 31,300 | ||||||||||
Distributions | 329,748 | ||||||||||
Investment advisory fee | 1,499,892 | ||||||||||
Administration fee | 388,304 | ||||||||||
Pricing and bookkeeping fees | 19,442 | ||||||||||
Transfer agent fee | 34,049 | ||||||||||
Trustees' fees | 11,252 | ||||||||||
Custody fee | 51,696 | ||||||||||
Distribution and service fees | 51,403 | ||||||||||
Shareholder administration fee | 17,382 | ||||||||||
Chief compliance officer expenses | 3,434 | ||||||||||
Trustees' deferred compensation plan | 64,900 | ||||||||||
Other liabilities | 109,169 | ||||||||||
Total Liabilities | 3,676,743 | ||||||||||
Net Assets | 11,669,787,654 | ||||||||||
Net Assets Consist of | Paid-in capital | 11,669,702,484 | |||||||||
Overdistributed net investment income | (20,403 | ) | |||||||||
Accumulated net realized gain | 105,573 | ||||||||||
Net Assets | 11,669,787,654 |
See Accompanying Notes to Financial Statements.
12
Statement of Assets and Liabilities (continued) – BofA Money Market Reserves
August 31, 2012
Adviser Class Shares | Net assets | $ | 449,872,615 | ||||||||
Shares outstanding | 449,867,796 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares (1) | Net assets | $ | 10,538,787,719 | ||||||||
Shares outstanding | 10,538,671,725 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares (1) | Net assets | $ | 243,839,616 | ||||||||
Shares outstanding | 243,836,969 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 324,458,602 | ||||||||
Shares outstanding | 324,454,847 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 29,256,788 | ||||||||
Shares outstanding | 29,256,469 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 83,572,314 | ||||||||
Shares outstanding | 83,571,377 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
13
Statement of Operations – BofA Money Market Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 34,484,958 | |||||||||
Expenses | Investment advisory fee | 15,218,180 | |||||||||
Administration fee | 10,005,454 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 1,693,692 | ||||||||||
Liquidity Class Shares | 78,108 | ||||||||||
Retail A Class Shares (1) | 2,404 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 164,056 | ||||||||||
Trust Class Shares | 110,171 | ||||||||||
Transfer agent fee | 208,150 | ||||||||||
Pricing and bookkeeping fees | 175,788 | ||||||||||
Trustees' fees | 98,456 | ||||||||||
Custody fee | 215,460 | ||||||||||
Chief compliance officer expenses | 21,747 | ||||||||||
Other expenses | 529,661 | ||||||||||
Total Expenses | 28,521,327 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (6,172,479 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (784,839 | ) | |||||||||
Liquidity Class Shares | (39,445 | ) | |||||||||
Trust Class Shares | (3,164 | ) | |||||||||
Expense reductions | (1,071 | ) | |||||||||
Net Expenses | 21,520,329 | ||||||||||
Net Investment Income | 12,964,629 | ||||||||||
Net realized gain on investments | 105,652 | ||||||||||
Net Increase Resulting from Operations | 13,070,281 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
14
Statement of Changes in Net Assets – BofA Money Market Reserves
Increase (Decrease) in Net Assets | Year Ended August 31, 2012 ($) | Year Ended August 31, 2011 ($) | |||||||||||||
Operations | Net investment income | 12,964,629 | 9,266,607 | ||||||||||||
Net realized gain on investments | 105,652 | 157,824 | |||||||||||||
Net increase resulting from operations | 13,070,281 | 9,424,431 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Capital Class Shares (1) | (12,190,676 | ) | (8,433,725 | ) | |||||||||||
Institutional Capital Shares (1) | (345,214 | ) | (286,860 | ) | |||||||||||
Institutional Class Shares | (383,120 | ) | (505,728 | ) | |||||||||||
Liquidity Class Shares | (1,745 | ) | (1,807 | ) | |||||||||||
Retail A Class Shares (1) | (504 | ) | (19,939 | ) | |||||||||||
Trust Class Shares | (43,370 | ) | (17,979 | ) | |||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | (1,150 | ) | — | ||||||||||||
Capital Class Shares (1) | (8,785 | ) | — | ||||||||||||
Institutional Capital Shares (1) | (301 | ) | — | ||||||||||||
Institutional Class Shares | (494 | ) | — | ||||||||||||
Liquidity Class Shares | (45 | ) | — | ||||||||||||
Trust Class Shares | (121 | ) | — | ||||||||||||
Total distributions to shareholders | (12,975,525 | ) | (9,266,038 | ) | |||||||||||
Net Capital Stock Transactions | 3,650,203,097 | (3,040,562,181 | ) | ||||||||||||
Total increase (decrease) in net assets | 3,650,297,853 | (3,040,403,788 | ) | ||||||||||||
Net Assets | Beginning of period | 8,019,489,801 | 11,059,893,589 | ||||||||||||
End of period | 11,669,787,654 | 8,019,489,801 | |||||||||||||
Overdistributed net investment income at end of period | (20,403 | ) | (33,213 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
15
Statement of Changes in Net Assets (continued) – BofA Money Market Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
�� | Shares | Dollars ($) | Shares | Dollars ($) | |||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 1,929,505,878 | 1,929,505,878 | 2,057,476,130 | 2,057,476,130 | |||||||||||||||
Distributions reinvested | 37 | 37 | — | — | |||||||||||||||
Redemptions | (2,161,591,451 | ) | (2,161,591,451 | ) | (2,774,909,968 | ) | (2,774,909,968 | ) | |||||||||||
Net decrease | (232,085,536 | ) | (232,085,536 | ) | (717,433,838 | ) | (717,433,838 | ) | |||||||||||
Capital Class Shares (1) | |||||||||||||||||||
Subscriptions | 48,261,681,377 | 48,261,681,377 | 35,743,309,633 | 35,743,309,633 | |||||||||||||||
Conversion | 41,663,554 | 41,663,554 | — | — | |||||||||||||||
Distributions reinvested | 8,934,343 | 8,934,343 | 7,049,765 | 7,049,765 | |||||||||||||||
Redemptions | (44,160,875,936 | ) | (44,160,875,936 | ) | (37,457,197,475 | ) | (37,457,197,475 | ) | |||||||||||
Net increase (decrease) | 4,151,403,338 | 4,151,403,338 | (1,706,838,077 | ) | (1,706,838,077 | ) | |||||||||||||
Institutional Capital Shares (1) | |||||||||||||||||||
Subscriptions | 380,697,323 | 380,697,323 | 364,125,159 | 364,125,159 | |||||||||||||||
Distributions reinvested | 11,601 | 11,601 | 19,303 | 19,303 | |||||||||||||||
Redemptions | (350,299,291 | ) | (350,299,291 | ) | (481,922,834 | ) | (481,922,834 | ) | |||||||||||
Net increase (decrease) | 30,409,633 | 30,409,633 | (117,778,372 | ) | (117,778,372 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 977,916,119 | 977,916,120 | 1,298,986,727 | 1,298,986,727 | |||||||||||||||
Distributions reinvested | 375,721 | 375,721 | 492,591 | 492,591 | |||||||||||||||
Redemptions | (1,188,709,761 | ) | (1,188,709,761 | ) | (1,756,499,251 | ) | (1,756,499,251 | ) | |||||||||||
Net decrease | (210,417,921 | ) | (210,417,920 | ) | (457,019,933 | ) | (457,019,933 | ) | |||||||||||
Investor Class Shares (1) | |||||||||||||||||||
Redemptions | — | — | (10,002 | ) | (10,002 | ) | |||||||||||||
Net decrease | — | — | (10,002 | ) | (10,002 | ) | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 14,898,323 | 14,898,323 | 65,199,515 | 65,199,515 | |||||||||||||||
Distributions reinvested | 1,763 | 1,763 | 1,758 | 1,758 | |||||||||||||||
Redemptions | (33,547,997 | ) | (33,547,997 | ) | (119,542,424 | ) | (119,542,424 | ) | |||||||||||
Net decrease | (18,647,911 | ) | (18,647,911 | ) | (54,341,151 | ) | (54,341,151 | ) | |||||||||||
Retail A Class Shares (1) | |||||||||||||||||||
Subscriptions | 559,596 | 559,596 | 5,921,562 | 5,921,562 | |||||||||||||||
Conversion | (41,663,554 | ) | (41,663,554 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 19,668 | 19,668 | |||||||||||||||
Redemptions | (1,050,713 | ) | (1,050,714 | ) | (17,031,782 | ) | (17,031,782 | ) | |||||||||||
Net decrease | (42,154,671 | ) | (42,154,672 | ) | (11,090,552 | ) | (11,090,552 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 373,158,766 | 373,158,765 | 453,695,630 | 453,695,630 | |||||||||||||||
Redemptions | (401,462,600 | ) | (401,462,600 | ) | (429,745,886 | ) | (429,745,886 | ) | |||||||||||
Net increase (decrease) | (28,303,834 | ) | (28,303,835 | ) | 23,949,744 | 23,949,744 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | — | 0.01 | 0.03 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.03 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||||
From capital gains | — | (d) | — | — | — | — | |||||||||||||||||
Total from distributions to shareholders | — | (d) | — | — | (0.01 | ) | (0.03 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | % | 0.00 | % | 0.89 | %(i)(j) | 3.51 | %(k) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (l) | 0.33 | % | 0.31 | % | 0.33 | % | 0.48 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.18 | % | 0.21 | % | 0.19 | % | 0.06 | % | 0.05 | % | |||||||||||||
Net investment income (l) | — | — | %(h) | — | 1.08 | %(j) | 3.52 | % | |||||||||||||||
Net assets, end of period (000s) | $ | 449,873 | $ | 681,956 | $ | 1,399,372 | $ | 3,100,587 | $ | 6,545,670 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Money Market Reserves was renamed BofA Money Market Reserves.
(c) On December 31, 2009, Columbia Money Market Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Money Market Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.00%.
(j) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(k) The reimbursements from affiliates of the investment advisor for realized losses on securities and capital support had no impact to total return.
(l) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | — | (e) | 0.01 | 0.04 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (f) | — | (f) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | 0.001 | 0.001 | — | (e) | 0.01 | 0.04 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
From capital gains | — | (f) | — | — | — | — | |||||||||||||||||
Total from distributions to shareholders | (0.001 | ) | (0.001 | ) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.14 | % | 0.11 | % | 0.13 | % | 1.13 | %(i) | 3.76 | %(j) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (k) | 0.20 | % | 0.20 | % | 0.20 | % | 0.24 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.06 | % | 0.07 | % | 0.07 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (k) | 0.14 | % | 0.11 | % | 0.13 | % | 1.07 | % | 3.81 | % | |||||||||||||
Net assets, end of period (000s) | $ | 10,538,788 | $ | 6,387,295 | $ | 8,094,013 | $ | 8,254,775 | $ | 10,352,511 |
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(c) On May 1, 2010, Columbia Money Market Reserves was renamed BofA Money Market Reserves.
(d) On December 31, 2009, Columbia Money Market Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Money Market Reserves.
(e) Rounds to less than $0.01 per share.
(f) Rounds to less than $0.001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.24%.
(j) The reimbursements from affiliates of the investment advisor for realized losses on securities and capital support had no impact to total return.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | — | (e) | 0.01 | 0.04 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (f) | — | (f) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | 0.001 | 0.001 | — | (e) | 0.01 | 0.04 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
From capital gains | — | (f) | — | — | — | — | |||||||||||||||||
Total from distributions to shareholders | (0.001 | ) | (0.001 | ) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.14 | % | 0.11 | % | 0.13 | % | 1.13 | %(i) | 3.76 | %(j) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (k) | 0.20 | % | 0.20 | % | 0.20 | % | 0.24 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.06 | % | 0.07 | % | 0.07 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (k) | 0.14 | % | 0.11 | % | 0.13 | % | 1.19 | % | 3.73 | % | |||||||||||||
Net assets, end of period (000s) | $ | 243,840 | $ | 213,428 | $ | 331,202 | $ | 490,631 | $ | 680,983 |
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(c) On May 1, 2010, Columbia Money Market Reserves was renamed BofA Money Market Reserves.
(d) On December 31, 2009, Columbia Money Market Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Money Market Reserves.
(e) Rounds to less than $0.01 per share.
(f) Rounds to less than $0.001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.24%.
(j) The reimbursements from affiliates of the investment advisor for realized losses on securities and capital support had no impact to total return.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | — | (d) | 0.01 | 0.04 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (d) | — | (d) | — | (d) | |||||||||||||
Total from investment operations | 0.001 | 0.001 | — | (d) | 0.01 | 0.04 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | — | (d) | (0.01 | ) | (0.04 | ) | |||||||||||||
From capital gains | — | (e) | — | — | — | — | |||||||||||||||||
Total from distributions to shareholders | (0.001 | ) | (0.001 | ) | — | (d) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.10 | % | 0.07 | % | 0.09 | % | 1.09 | %(h) | 3.72 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.24 | % | 0.24 | % | 0.24 | % | 0.28 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.06 | % | 0.07 | % | 0.06 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (j) | 0.09 | % | 0.07 | % | 0.09 | % | 1.11 | % | 3.66 | % | |||||||||||||
Net assets, end of period (000s) | $ | 324,459 | $ | 534,875 | $ | 991,882 | $ | 2,003,722 | $ | 2,926,008 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Money Market Reserves was renamed BofA Money Market Reserves.
(c) On December 31, 2009, Columbia Money Market Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Money Market Reserves.
(d) Rounds to less than $0.01 per share.
(e) Rounds to less than $0.001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.20%.
(i) The reimbursements from affiliates of the investment advisor for realized losses on securities and capital support had no impact to total return.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
20
Financial Highlights – BofA Money Market Reserves
Selected date for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (e) | 0.01 | 0.04 | |||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.04 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
From capital gains | — | (d) | — | — | — | — | |||||||||||||||||
Total from distributions to shareholders | — | (d) | — | (d) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.01 | % | 0.00 | %(h) | 0.01 | % | 0.98 | %(i) | 3.61 | %(j) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (k) | 0.32 | % | 0.31 | % | 0.33 | % | 0.39 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.21 | % | 0.19 | % | 0.15 | % | 0.15 | % | |||||||||||||
Net investment income (k) | 0.01 | % | — | %(h) | — | %(h) | 1.12 | % | 3.71 | % | |||||||||||||
Net assets, end of period (000s) | $ | 29,257 | $ | 47,905 | $ | 102,245 | $ | 453,489 | $ | 1,014,693 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Money Market Reserves was renamed BofA Money Market Reserves.
(c) On December 31, 2009, Columbia Money Market Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Money Market Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.09%.
(j) The reimbursements from affiliates of the investment advisor for realized losses on securities and capital support had no impact to total return.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
21
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (e) | 0.01 | 0.04 | |||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.01 | 0.04 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
From capital gains | — | (d) | — | — | — | — | |||||||||||||||||
Total from distributions to shareholders | — | (d) | — | (d) | — | (e) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.04 | % | 0.02 | % | 0.03 | % | 1.03 | %(h) | 3.66 | %(i)(j) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (k) | 0.30 | % | 0.29 | % | 0.30 | % | 0.34 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.06 | % | 0.08 | % | 0.07 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (k) | 0.04 | % | 0.02 | % | 0.03 | % | 1.02 | % | 3.40 | %(j) | |||||||||||||
Net assets, end of period (000s) | $ | 83,572 | $ | 111,876 | $ | 87,924 | $ | 179,509 | $ | 162,859 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to two decimal places.
(b) On May 1, 2010, Columbia Money Market Reserves was renamed BofA Money Market Reserves.
(c) On December 31, 2009, Columbia Money Market Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Money Market Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.01 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.14%.
(i) The reimbursements from affiliates of the investment advisor for realized losses on securities and capital support had no impact to total return.
(j) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
22
Notes to Financial Statements – BofA Money Market Reserves
August 31, 2012
Note 1. Organization
BofA Money Market Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers six classes of shares: Adviser Class, Capital Class, Institutional Capital, Institutional Class, Liquidity Class and Trust Class shares. Each class of shares is offered continuously at net asset value. On August 18, 2011, Investor Class shares were liquidated. After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares. On October 1, 2011, Retail A shares were converted into Capital Class shares.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
23
BofA Money Market Reserves, August 31, 2012
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that BofA Advisors, LLC ("BofA"), the Fund's investment advisor, has determined are creditworthy. The Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement, which may include securities that the Fund is not otherwise directly permitted to purchase. BofA is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on the Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated
to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
24
BofA Money Market Reserves, August 31, 2012
Note 3. Capital Support
On September 8, 2009, an affiliate of BofA purchased certain securities owned by the Fund.
Note 4. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from distribution re-designations were identified and reclassified among the components of the Fund's net assets as follows:
Overdistributed Net Investment Income | Accumulated Net Realized Gain | Paid-In Capital | |||||||||
$ | 12,810 | $ | (12,810 | ) | $ | — |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from | 2012 | 2011 | |||||||||
Ordinary Income* | $ | 12,964,629 | $ | 9,266,038 | |||||||
Long-Term Capital Gains | 10,896 | — |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 417,141 | $ | 17,508 |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
25
BofA Money Market Reserves, August 31, 2012
Note 5. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
26
BofA Money Market Reserves, August 31, 2012
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act, permits the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the class's shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class and Liquidity Class shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plan: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Servicing Plans: | |||||||||||
Adviser Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Retail A Shares*** | 0.07 | % | 0.07 | % |
* The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012.
** To the extent that the Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on
an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
*** On October 1, 2011, the Fund's Retail A shares converted into the Fund's Capital Class shares, which has not adopted a Servicing Plan for such share class.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012 so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund
27
BofA Money Market Reserves, August 31, 2012
expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year period following the date of such fee waiver and/or
reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense limitation in effect at the time the expenses to be recovered were incurred.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 8/31/12 | |||||||||||||||
$ | 6,172,479 | $ | 6,692,522 | $ | 8,091,802 | $ | 20,956,803 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to
pending payments to retired trustees under legacy deferred compensation plans.
Note 6. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $1,071 for the Fund.
Note 7. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and
28
BofA Money Market Reserves, August 31, 2012
apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
Note 8. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 9. Significant Risks and Contingencies
Securities Risk
The Fund is subject to interest rate and credit risk. The value of debt securities may decline as interest rates increase. The Fund could lose money if the issuer of a fixed income security is unable to pay interest or repay principal when it is due.
The Fund is subject to mortgage-related risk. The value of mortgage-backed securities can fall if the owners of the underlying mortgages default or pay off their mortgages
sooner than expected, which could happen when interest rates fall, or pay off their mortgages later than expected, which could happen when interest rates rise.
The Fund is subject to asset-backed securities risk. Payment of interest and repayment of principal may be impacted by the cash flows generated by the assets backing these securities. The value of the Fund's asset-backed securities may also be affected by changes in interest rates, the availability of information concerning the interests in and structure of the pools of purchase contracts, financing leases or sales agreements that are represented by these securities, the creditworthiness of the underlying securities or the servicing agent for the pool, the originator of the loans or receivables, or the entities that provide any supporting letters of credit, surety bonds, or other credit enhancements.
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
29
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Money Market Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA Money Market Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
30
Federal Income Tax Information (Unaudited) – BofA Money Market Reserves
The Fund hereby designates as a capital gain dividend with respect to the fiscal year ended August 31, 2012, $17,587, or if subsequently determined to be different, the net capital gain of such year.
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
31
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
32
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
33
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
34
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Money Market Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
37
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Money Market Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-MMR-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA Municipal Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 18 | ||||||
Statement of Operations | 20 | ||||||
Statement of Changes in Net Assets | 21 | ||||||
Financial Highlights | 23 | ||||||
Notes to Financial Statements | 31 | ||||||
Report of Independent Registered Public Accounting Firm | 38 | ||||||
Federal Income Tax Information | 39 | ||||||
Fund Governance | 40 | ||||||
Important Information About This Report | 45 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Municipal Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.63 | 1.51 | 1.53 | 0.30 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.50 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.63 | 1.51 | 1.53 | 0.30 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.50 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.30 | 1,023.93 | 1.21 | 1.22 | 0.24 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.63 | 1.51 | 1.53 | 0.30 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.63 | 1.51 | 1.53 | 0.30 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.68 | 1.46 | 1.48 | 0.29 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA Municipal Reserves
August 31, 2012
Municipal Bonds – 80.1% | |||||||||||
Par ($) | Value ($) | ||||||||||
Alabama – 0.9% | |||||||||||
AL University of Alabama | |||||||||||
Series 2012 B, LOC: Wells Fargo Bank N.A. 0.160% 09/01/42 (09/05/12) (a)(b) | 22,335,000 | 22,335,000 | |||||||||
Alabama Total | 22,335,000 | ||||||||||
Arizona – 0.5% | |||||||||||
AZ Maricopa County Industrial Development Authority | |||||||||||
Series 2005, AMT, GTY AGMT: FHLMC 0.410% 01/01/36 (09/06/12) (a)(b) | 6,900,000 | 6,900,000 | |||||||||
Sonora Vista II Apartments, Series 2003 A, AMT, LOC: Wells Fargo Bank N.A. 0.320% 12/01/39 (09/06/12) (a)(b) | 845,000 | 845,000 | |||||||||
AZ Phoenix Industrial Development Authority | |||||||||||
Phoenix Broadway Associates, Sunrise Vista Apartments, Series 2003 A, AMT, LOC: Wells Fargo Bank N.A. 0.320% 06/01/31 (09/06/12) (a)(b) | 4,400,000 | 4,400,000 | |||||||||
Arizona Total | 12,145,000 | ||||||||||
Arkansas – 0.0% | |||||||||||
AR Development Finance Authority | |||||||||||
Series 2007 C106, AMT, DPCE: GNMA/FNMA, SPA: Wells Fargo Bank N.A. 0.470% 01/01/35 (09/05/12) (a)(b) | 1,170,000 | 1,170,000 | |||||||||
Arkansas Total | 1,170,000 | ||||||||||
California – 8.8% | |||||||||||
CA Irvine Ranch Water District | |||||||||||
Series 2011 A-1, 0.160% 10/01/37 (09/06/12) (b)(c) | 31,000,000 | 31,000,000 | |||||||||
CA Los Angeles | |||||||||||
Tax & Revenue Anticipation Notes, Series 2012 C, 2.000% 04/25/13 | 27,600,000 | 27,920,496 |
Par ($) | Value ($) | ||||||||||
CA Los Angeles County | |||||||||||
Tax & Revenue Anticipation Notes, Series 2012 C, 2.000% 06/28/13 | 45,000,000 | 45,664,155 | |||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2011 A-3, 0.170% 07/01/36 (09/06/12) (b)(c) | 21,435,000 | 21,435,000 | |||||||||
CA San Diego County Regional Airport Authority | |||||||||||
Series 2005, AMT, GTY AGMT: Deutsche Bank A.G. LIQ FAC: Deutsche Bank A.G. 0.290% 07/01/20 (09/06/12) (a)(b) | 1,170,000 | 1,170,000 | |||||||||
CA Statewide Communities Development Authority | |||||||||||
Kaiser Permanente: Series 2008-B, 0.250% 10/10/12 | 20,000,000 | 20,000,000 | |||||||||
Series 2009 B-1, 0.240% 11/09/12 | 17,000,000 | 17,000,000 | |||||||||
Series 2009 B-4, 0.250% 01/18/13 | 5,000,000 | 5,000,000 | |||||||||
Lincoln Corner Apartments, Series 2001, AMT, GTY AGMT: FHLMC 0.410% 07/01/15 (09/06/12) (a)(b) | 7,775,000 | 7,775,000 | |||||||||
CA State | |||||||||||
Revenue Anticipation Notes: Series 2012 A-1, 2.500% 05/30/13 | 9,500,000 | 9,652,631 | |||||||||
Series 2012 A-2, 2.500% 06/20/13 | 38,500,000 | 39,135,304 | |||||||||
California Total | 225,752,586 | ||||||||||
Colorado – 0.9% | |||||||||||
CO Boulder County | |||||||||||
Boulder Medical Center PC, Series 1998, AMT, LOC: Wells Fargo Bank N.A. 0.320% 01/01/17 (09/06/12) (a)(b) | 1,325,000 | 1,325,000 | |||||||||
CO Denver Airport System Revenue | |||||||||||
Series 1992 G, AMT, LOC: Lloyds TSB Bank PLC 0.290% 11/15/25 (09/05/12) (a)(b) | 17,850,000 | 17,850,000 |
See Accompanying Notes to Financial Statements.
2
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CO Health Facilities Authority | |||||||||||
Catholic Health Initiatives, Series 2009 B, 5.000% 07/01/39 (11/08/12) (b)(c) | 4,175,000 | 4,211,600 | |||||||||
Colorado Total | 23,386,600 | ||||||||||
Connecticut – 2.1% | |||||||||||
CT Derby | |||||||||||
Series 2012, 1.500% 09/04/12 | 2,650,000 | 2,650,255 | |||||||||
CT Hartford County Metropolitan District | |||||||||||
Series 2012, 1.000% 12/06/12 | 8,050,000 | 8,067,452 | |||||||||
CT JPMorgan Chase Putters/Drivers Trust | |||||||||||
Waterford, CT, Series 2012 4074, LIQ FAC: JPMorgan Chase Bank 0.190% 03/18/13 (09/04/12) (a)(b)(d) | 7,240,000 | 7,240,000 | |||||||||
CT Manchester | |||||||||||
Series 2012, 1.250% 07/05/13 | 6,785,000 | 6,843,047 | |||||||||
CT New Milford | |||||||||||
Series 2012, 1.000% 07/25/13 | 13,200,000 | 13,295,578 | |||||||||
CT Thomaston | |||||||||||
Series 2012, 1.000% 05/09/13 | 3,000,000 | 3,014,588 | |||||||||
CT Trumbull | |||||||||||
Series 2011, 1.000% 09/07/12 | 12,550,000 | 12,551,477 | |||||||||
Connecticut Total | 53,662,397 | ||||||||||
Delaware – 2.8% | |||||||||||
DE Eagle Tax-Exempt Trust | |||||||||||
Series 2008, AMT, Insured: FHLMC, LIQ FAC: FHLB 0.220% 04/15/49 (09/06/12) (a)(b) | 70,690,000 | 70,690,000 | |||||||||
Delaware Total | 70,690,000 |
Par ($) | Value ($) | ||||||||||
District of Columbia – 3.1% | |||||||||||
DC District of Columbia | |||||||||||
American University, Series 1999, LOC: Wells Fargo Bank N.A. 0.170% 01/01/28 (09/05/12) (a)(b) | 18,500,000 | 18,500,000 | |||||||||
Series 2011, 2.000% 09/28/12 | 60,600,000 | 60,676,619 | |||||||||
District of Columbia Total | 79,176,619 | ||||||||||
Florida – 1.7% | |||||||||||
FL Alachua County Health Facilities Authority | |||||||||||
Oak Hammock at The University of Florida, Series 2002 A, LOC: Bank of Scotland 0.230% 10/01/32 (09/04/12) (a)(b) | 5,935,000 | 5,935,000 | |||||||||
FL Development Finance Corp. | |||||||||||
4504 30th Street West LLC, Series 2007, AMT, LOC: Branch Banking & Trust 0.330% 09/01/27 (09/06/12) (a)(b) | 2,920,000 | 2,920,000 | |||||||||
FL Hillsborough County Industrial Development Authority | |||||||||||
Allied Aerofoam Real Estate, Series 2003, AMT, LOC: Wells Fargo Bank N.A. 0.320% 08/01/23 (09/06/12) (a)(b) | 1,905,000 | 1,905,000 | |||||||||
Seaboard Tampa Terminals, Series 1986, AMT, LOC: Northern Trust Co. 0.470% 12/01/16 (09/05/12) (a)(b) | 4,250,000 | 4,250,000 | |||||||||
FL Housing Finance Corp. | |||||||||||
Tuscany Lakes Ltd., Series 2006 K-3, AMT, DPCE: FNMA 0.210% 11/15/35 (09/06/12) (a)(b) | 2,400,000 | 2,400,000 | |||||||||
FL Orange County Housing Finance Authority | |||||||||||
Marbella Cove II LP, Series 2007 B, AMT, LOC: FHLB 0.230% 06/15/42 (09/05/12) (a)(b) | 4,185,000 | 4,185,000 |
See Accompanying Notes to Financial Statements.
3
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
FL Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Series 2008, AMT, GTY AGMT: FHLMC: 0.410% 07/01/39 (09/06/12) (a)(b) | 8,375,000 | 8,375,000 | |||||||||
0.410% 03/01/50 (09/06/12) (a)(b) | 4,020,000 | 4,020,000 | |||||||||
FL Sunshine State Government Finance | |||||||||||
LOC: JPMorgan Chase Bank 0.300% 09/14/12 | 10,000,000 | 10,000,000 | |||||||||
Florida Total | 43,990,000 | ||||||||||
Georgia – 2.8% | |||||||||||
GA Atlanta Urban Residential Finance Authority | |||||||||||
Series 1992 A, AMT, LOC: Wells Fargo Bank N.A. 0.320% 12/01/14 (09/06/12) (a)(b) | 1,255,000 | 1,255,000 | |||||||||
GA Bacon Industrial Building Authority | |||||||||||
D. L. Lee & Sons, Inc., Series 2004, AMT, LOC: Branch Banking & Trust 0.230% 09/01/24 (09/06/12) (a)(b) | 5,955,000 | 5,955,000 | |||||||||
GA Gordon County Development Authority | |||||||||||
Nance Carpet & Rug, Inc., Series 2006, AMT, LOC: Branch Banking & Trust 0.330% 10/01/21 (09/06/12) (a)(b) | 1,885,000 | 1,885,000 | |||||||||
GA Gwinnett County Development Authority | |||||||||||
KMD Group LLC, Series 2007, AMT, LOC: Branch Banking & Trust 0.340% 02/01/32 (09/05/12) (a)(b) | 1,595,000 | 1,595,000 | |||||||||
GA Houston County Development Authority | |||||||||||
Clean Control Corp., Series 2000, AMT, LOC: Branch Banking & Trust 0.230% 06/01/20 (09/06/12) (a)(b) | 1,400,000 | 1,400,000 | |||||||||
GA Municipal Gas Authority | |||||||||||
Gas Portfolio III: Series 2011 O, DPCE: Government of Authority 2.000% 11/13/12 | 8,200,000 | 8,225,731 |
Par ($) | Value ($) | ||||||||||
Series 2012 P, 2.000% 05/22/13 | 11,000,000 | 11,132,706 | |||||||||
GA Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Series 2008, AMT, GTY AGMT: FHLMC: 0.370% 12/01/37 (09/06/12) (a)(b) | 12,705,000 | 12,705,000 | |||||||||
0.370% 12/01/43 (09/06/12) (a)(b) | 11,665,000 | 11,665,000 | |||||||||
0.410% 04/01/46 (09/06/12) (a)(b) | 8,930,000 | 8,930,000 | |||||||||
GA Savannah Economic Development Authority | |||||||||||
Consolidated Utilities, Inc., Series 2007, AMT, LOC: Branch Banking & Trust 0.230% 11/01/27 (09/06/12) (a)(b) | 4,370,000 | 4,370,000 | |||||||||
GA Wayne County Industrial Development Authority | |||||||||||
Absorption Corp., Series 2004, AMT, LOC: Branch Banking & Trust 0.230% 09/01/19 (09/06/12) (a)(b) | 1,800,000 | 1,800,000 | |||||||||
Georgia Total | 70,918,437 | ||||||||||
Idaho – 1.2% | |||||||||||
ID Eagle Industrial Development Corp. | |||||||||||
Rose Cottage LLC, Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.370% 09/01/21 (09/06/12) (a)(b) | 2,855,000 | 2,855,000 | |||||||||
ID State | |||||||||||
Tax Anticipation Notes, Series 2012, 2.000% 06/28/13 | 27,000,000 | 27,398,493 | |||||||||
Idaho Total | 30,253,493 | ||||||||||
Illinois – 3.7% | |||||||||||
IL Chicago | |||||||||||
Concordia Place Apartments LP, Series 2003, AMT, LOC: Harris N.A. 0.300% 07/01/34 (09/06/12) (a)(b) | 11,945,000 | 11,945,000 |
See Accompanying Notes to Financial Statements.
4
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Groot Industries, Inc., Series 1995, AMT, LOC: JPMorgan Chase Bank 0.430% 12/01/15 (09/06/12) (a)(b) | 500,000 | 500,000 | |||||||||
MERLOTS: Series 2007 C46, AMT, SPA: Wells Fargo Bank N.A. 0.470% 12/01/38 (09/05/12) (a)(b) | 1,810,000 | 1,810,000 | |||||||||
Series 2008 C38, AMT, SPA: Wells Fargo Bank N.A. 0.470% 06/01/43 (09/05/12) (a)(b)(d) | 2,050,000 | 2,050,000 | |||||||||
MRC Polymers, Inc., Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.280% 10/01/31 (09/06/12) (a)(b) | 3,825,000 | 3,825,000 | |||||||||
North Larabee LP, Series 2001 A, AMT, LOC: Harris N.A. 0.290% 04/01/36 (09/06/12) (a)(b) | 4,170,000 | 4,170,000 | |||||||||
Renaissance St. Luke LP, Series 2004 A, AMT, LOC: Harris N.A. 0.290% 01/01/39 (09/06/12) (a)(b) | 3,455,000 | 3,455,000 | |||||||||
IL Des Plaines | |||||||||||
MMP Properties LLC, Series 1998, AMT, LOC: JPMorgan Chase Bank 0.430% 10/01/18 (09/06/12) (a)(b) | 945,000 | 945,000 | |||||||||
IL Finance Authority | |||||||||||
Advocate Healthcare Network Oblong, Series 2008 A1, 0.220% 11/01/30 (01/24/13) (b)(c) | 2,900,000 | 2,900,000 | |||||||||
Barton Manufacturing, Inc., Series 2005, AMT, LOC: PNC Bank N.A. 0.270% 11/01/18 (09/06/12) (a)(b) | 1,338,000 | 1,338,000 | |||||||||
Campanya-Turano Bakery, Series 2000, AMT, LOC: JPMorgan Chase Bank 0.430% 08/01/25 (09/06/12) (a)(b) | 1,380,000 | 1,380,000 |
Par ($) | Value ($) | ||||||||||
Clingan Steel, Inc., Series 2003 A, AMT, LOC: JPMorgan Chase Bank 0.630% 12/01/23 (09/06/12) (a)(b) | 545,000 | 545,000 | |||||||||
Decatur Mental Health Center, Series 1997, AMT, LOC: PNC Bank N.A. 0.270% 05/01/18 (09/06/12) (a)(b) | 1,215,000 | 1,215,000 | |||||||||
Engineered Polymer, Valspar Corp., Series 1995, AMT, LOC: Lloyds Bank 0.320% 08/01/15 (09/06/12) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
Forty Foot High Realty LLC, Series 2002, AMT, LOC: Harris N.A. 0.270% 12/01/27 (09/06/12) (a)(b) | 3,470,000 | 3,470,000 | |||||||||
Groot Industries, Inc., Series 2003, AMT, LOC: JPMorgan Chase Bank 0.430% 12/01/23 (09/06/12) (a)(b) | 3,420,000 | 3,420,000 | |||||||||
Knead Dough Baking, Series 2000, AMT, LOC: JPMorgan Chase Bank 0.630% 09/01/25 (09/06/12) (a)(b) | 300,000 | 300,000 | |||||||||
Lake Towers Associates II LP, Cinnamon Lake Towers, Series 1997, AMT, DPCE: FHLMC, SPA: FHLMC 0.300% 10/01/23 (09/06/12) (a)(b) | 8,565,000 | 8,565,000 | |||||||||
Merug LLC, Series 2004 A, AMT, LOC: JPMorgan Chase Bank 0.430% 12/01/18 (09/06/12) (a)(b) | 1,400,000 | 1,400,000 | |||||||||
Toyal America, Inc., Series 1997, AMT, LOC: Bank of Tokyo-Mitsubishi UFJ 0.210% 06/01/17 (09/06/12) (a)(b) | 5,200,000 | 5,200,000 |
See Accompanying Notes to Financial Statements.
5
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
IL Housing Development Authority | |||||||||||
Mattoon Towers Associates II, Series 2004, AMT, LOC: FHLB 0.230% 01/01/34 (09/06/12) (a)(b) | 2,910,000 | 2,910,000 | |||||||||
Pontiac Tower Associates III, Series 2005, AMT, LOC: Harris N.A. 0.300% 09/01/35 (09/06/12) (a)(b) | 3,440,000 | 3,440,000 | |||||||||
Sterling Towers Associates II, Series 2001, AMT, LOC: Harris N.A. 0.300% 10/01/35 (09/06/12) (a)(b) | 3,420,000 | 3,420,000 | |||||||||
IL Skokie Village | |||||||||||
P.S. Greetings, Inc., Series 2003 P, AMT, LOC: JPMorgan Chase Bank 0.270% 12/01/33 (09/06/12) (a)(b) | 1,880,000 | 1,880,000 | |||||||||
IL State | |||||||||||
Unemployment Insurance Fund, Series 2012 A, 2.000% 06/15/13 | 3,000,000 | 3,040,405 | |||||||||
IL Toll Highway Authority | |||||||||||
Series 1998 B, SPA: Landesbank Hessen-Thüringen 0.370% 01/01/16 (09/06/12) (a)(b) | 2,800,000 | 2,800,000 | |||||||||
Series 2008 A-1A, SPA: JPMorgan Chase Bank 0.270% 01/01/31 (09/06/12) (a)(b) | 12,005,000 | 12,005,000 | |||||||||
Illinois Total | 95,928,405 | ||||||||||
Indiana – 2.7% | |||||||||||
IN Allen County | |||||||||||
Debeere LLC, Series 2002, AMT, LOC: JPMorgan Chase Bank 0.680% 08/01/17 (09/06/12) (a)(b) | 1,500,000 | 1,500,000 | |||||||||
IN Bond Bank | |||||||||||
Advanced Funding Program Notes, Series 2012 A, 1.250% 01/03/13 | 7,800,000 | 7,823,658 |
Par ($) | Value ($) | ||||||||||
IN Fort Wayne | |||||||||||
PHD, Inc., Series 2000, AMT, LOC: Wells Fargo Bank N.A. 0.280% 05/01/15 (09/05/12) (a)(b) | 800,000 | 800,000 | |||||||||
IN Gibson County | |||||||||||
Toyota Motor Manufacturing: Series 1997, AMT, 0.170% 10/01/27 (09/05/12) (b)(c) | 10,000,000 | 10,000,000 | |||||||||
Series 1998, AMT, 0.170% 01/01/28 (09/05/12) (b)(c) | 10,000,000 | 10,000,000 | |||||||||
Series 1999 A, AMT, GTY AGMT: Toyota Motor Credit Corp. 0.170% 01/01/29 (09/05/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
Series 2000 A, AMT, GTY AGMT: Toyota Motor Credit Corp. 0.170% 01/01/30 (09/05/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
Series 2001 B, AMT, GTY AGMT: Toyota Motor Credit Corp.: 0.170% 02/01/31 (09/05/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
0.170% 09/01/31 (09/05/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
Indiana Total | 70,123,658 | ||||||||||
Iowa – 0.1% | |||||||||||
IA Clinton | |||||||||||
Sethness Products Company., Series 2004, AMT, LOC: Northern Trust Co. 0.470% 12/01/22 (09/05/12) (a)(b) | 2,800,000 | 2,800,000 | |||||||||
Iowa Total | 2,800,000 | ||||||||||
Kentucky – 0.5% | |||||||||||
KY Campbellsville-Taylor County Economic Development Authority | |||||||||||
Airguard Industries, Inc., Series 2001, AMT, LOC: JPMorgan Chase Bank 0.470% 05/01/31 (09/05/12) (a)(b) | 7,410,000 | 7,410,000 |
See Accompanying Notes to Financial Statements.
6
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
KY Clipper Tax-Exempt Certificate Trust | |||||||||||
Kentucky Housing Corp., Certification of Participation, Series 2005, AMT, LIQ FAC: State Street Bank & Trust Co. 0.290% 07/01/35 (09/06/12) (a)(b) | 3,980,000 | 3,980,000 | |||||||||
KY Hopkinsville | |||||||||||
Comefri USA, Inc., Series 2006, AMT, LOC: Branch Banking & Trust 0.330% 06/01/26 (09/06/12) (a)(b) | 2,660,000 | 2,660,000 | |||||||||
Kentucky Total | 14,050,000 | ||||||||||
Louisiana – 0.9% | |||||||||||
LA Municipal Gas Authority | |||||||||||
Series 2006 1411 Q, LOC: JPMorgan Chase & Co. 0.300% 08/01/16 (09/04/12) (a)(b) | 22,000,000 | 22,000,000 | |||||||||
Louisiana Total | 22,000,000 | ||||||||||
Maryland – 0.2% | |||||||||||
MD Carroll County | |||||||||||
Shelters Systems, Ltd., Series 2004, AMT, LOC: Branch Banking & Trust 0.230% 07/01/24 (09/06/12) (a)(b) | 3,900,000 | 3,900,000 | |||||||||
Maryland Total | 3,900,000 | ||||||||||
Massachusetts – 0.4% | |||||||||||
MA Billerica | |||||||||||
Series 2012, 1.000% 05/17/13 | 2,000,000 | 2,010,646 | |||||||||
MA Hingham | |||||||||||
Series 2012, 0.750% 06/28/13 | 7,830,000 | 7,865,589 | |||||||||
Massachusetts Total | 9,876,235 | ||||||||||
Michigan – 12.0% | |||||||||||
MI Bank of New York Municipal Certificates Trust | |||||||||||
Detroit Sewer Disposal, Series 2006, LOC: Bank of New York 0.300% 07/01/26 (10/01/12) (a)(b) | 80,981,000 | 80,981,000 |
Par ($) | Value ($) | ||||||||||
MI Finance Authority | |||||||||||
State Aid Notes, Series 2012 B-1, 2.000% 08/20/13 | 30,000,000 | 30,469,587 | |||||||||
MI L'Anse Creuse Public Schools | |||||||||||
Series 2008, SPA: JPMorgan Chase Bank 0.200% 05/01/35 (09/04/12) (a)(b) | 27,600,000 | 27,600,000 | |||||||||
MI RBC Municipal Products, Inc., Trust | |||||||||||
Michigan Higher Ed Student Loan Authority: Series 2008 L30, AMT, LOC: Royal Bank of Canada 0.220% 09/01/32 (09/06/12) (a)(b) | 96,090,000 | 96,090,000 | |||||||||
Series 2008 L32, AMT, LOC: Royal Bank of Canada 0.220% 09/01/32 (09/06/12) (a)(b) | 57,895,000 | 57,895,000 | |||||||||
MI Sterling Heights Economic Development Corp. | |||||||||||
Kunath Enterprises LLC, Series 2000, AMT, LOC: JPMorgan Chase Bank 0.630% 02/01/16 (09/05/12) (a)(b) | 600,000 | 600,000 | |||||||||
MI Strategic Fund | |||||||||||
Agritek Industries, Inc., Series 2005, AMT, LOC: PNC Bank N.A. 0.270% 06/01/35 (09/06/12) (a)(b) | 1,750,000 | 1,750,000 | |||||||||
Coastal Container Corp., Series 2007, AMT, LOC: PNC Bank N.A. 0.270% 12/01/27 (09/06/12) (a)(b) | 5,130,000 | 5,130,000 | |||||||||
Continental Carbonic Products, Inc., Series 2007, AMT, LOC: JPMorgan Chase Bank 0.280% 03/01/32 (09/06/12) (a)(b) | 6,960,000 | 6,960,000 | |||||||||
Lapeer Technologies LLC, Series 2000, AMT, LOC: JPMorgan Chase Bank 0.380% 02/01/20 (09/05/12) (a)(b) | 950,000 | 950,000 | |||||||||
Michigan Total | 308,425,587 |
See Accompanying Notes to Financial Statements.
7
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Minnesota – 3.5% | |||||||||||
MN Brainerd Independent School District No. 181 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 A, 1.000% 09/28/12 | 4,900,000 | 4,902,713 | |||||||||
MN Chisago Lakes Independent School District No. 2144 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012, 1.250% 08/30/13 | 2,500,000 | 2,520,992 | |||||||||
MN East Grand Forks Independent School District No. 595 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012, 1.500% 08/29/13 | 3,000,000 | 3,032,608 | |||||||||
MN Eden Prairie | |||||||||||
SWB LLC, Series 2000 A, AMT, LOC: U.S. Bank N.A. 0.310% 11/01/20 (09/06/12) (a)(b) | 1,525,000 | 1,525,000 | |||||||||
MN Edina Independent School District No. 273 | |||||||||||
Tax Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012, 2.000% 03/15/13 | 3,000,000 | 3,028,022 | |||||||||
MN Itasca County Independent School District No. 318 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program: Series 2011 B, 1.000% 09/20/12 | 5,400,000 | 5,401,870 | |||||||||
Series 2012, 1.500% 09/27/13 (e) | 6,800,000 | 6,881,328 | |||||||||
MN Jenkins | |||||||||||
Pequot Tool & Manufacturing, Inc., Series 2007, AMT, LOC: Wells Fargo Bank N.A. 0.370% 06/01/27 (09/06/12) (a)(b) | 1,275,000 | 1,275,000 | |||||||||
MN Lakeville Independent School District No. 194 | |||||||||||
Minnesota School District Credit Enhancement Program, Series 2012 C, 2.000% 02/01/13 | 3,630,000 | 3,654,633 |
Par ($) | Value ($) | ||||||||||
MN Litchfield Independent School District No. 465 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012, 1.250% 09/30/13 | 5,000,000 | 5,048,305 | |||||||||
MN Little Falls Independent School District No. 482 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2011 A, 1.000% 09/28/12 | 4,885,000 | 4,886,971 | |||||||||
MN Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Roseville Minnesota Multifamily Housing Centennial Apartments Project, Series 2007, AMT, GTY AGMT: FHLMC 0.370% 01/01/50 (09/06/12) (a)(b) | 11,910,000 | 11,910,000 | |||||||||
MN Rosemount-Apple Valley-Eagan Independent School District No. 196 | |||||||||||
Tax Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 B, 1.000% 09/28/12 | 7,500,000 | 7,504,233 | |||||||||
MN School District Capital Equipment Borrowing Program | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2011 B, 2.000% 09/09/12 | 16,000,000 | 16,006,020 | |||||||||
MN St. Paul Port Authority | |||||||||||
Camada LP, Series 2005, AMT, LOC: Wells Fargo Bank N.A. 0.320% 12/01/12 (09/06/12) (a)(b) | 500,000 | 500,000 | |||||||||
MN Waseca Independent School District No. 829 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2011 A, 1.000% 09/28/12 | 5,500,000 | 5,502,503 | |||||||||
MN West St. Paul-Mendota Heights-Eagan Independent School District No. 197 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2011 A, 1.000% 09/13/12 | 6,000,000 | 6,001,312 | |||||||||
Minnesota Total | 89,581,510 |
See Accompanying Notes to Financial Statements.
8
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Mississippi – 0.2% | |||||||||||
MS Business Finance Corp. | |||||||||||
Hamlin Sheet Metal Co., Series 2005, AMT, LOC: Branch Banking & Trust 0.230% 03/01/25 (09/06/12) (a)(b) | 2,085,000 | 2,085,000 | |||||||||
MS Home Corp. | |||||||||||
MERLOTS, Series 2007, AMT, GTY AGMT: GNMA, FNMA, FHLMC, SPA: Wells Fargo Bank N.A. 0.370% 06/01/38 (09/05/12) (a)(b) | 3,195,000 | 3,195,000 | |||||||||
Mississippi Total | 5,280,000 | ||||||||||
Missouri – 0.5% | |||||||||||
MO Health & Educational Facilities Authority | |||||||||||
Washington University, Series 2004 B, LOC: Wells Fargo Bank N.A. 0.170% 02/15/34 (09/04/12) (a)(b) | 12,330,000 | 12,330,000 | |||||||||
Missouri Total | 12,330,000 | ||||||||||
Montana – 0.2% | |||||||||||
MT Board of Investments | |||||||||||
Series 2004, 0.220% 03/01/29 03/01/13) (b)(c) | 5,600,000 | 5,600,000 | |||||||||
Montana Total | 5,600,000 | ||||||||||
Nebraska – 0.9% | |||||||||||
NE Lancaster County Hospital Authority No. 1 | |||||||||||
BryanLGH Medical Center, Series 2008 B-1, LOC: U.S. Bank N.A. 0.210% 06/01/31 (09/04/12) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
NE Lancaster County | |||||||||||
MLLC LLC, Garner Industries, Inc., Series 2000 A, AMT, LOC: Wells Fargo Bank N.A. 0.320% 11/01/20 (09/06/12) (a)(b) | 2,925,000 | 2,925,000 |
Par ($) | Value ($) | ||||||||||
NE Omaha Public Power District | |||||||||||
Electric Revenue Notes, Series A: 0.180% 10/03/12 | 4,230,000 | 4,230,000 | |||||||||
0.180% 10/04/12 | 6,000,000 | 6,000,000 | |||||||||
0.190% 10/09/12 | 6,000,000 | 6,000,000 | |||||||||
Nebraska Total | 22,155,000 | ||||||||||
Nevada – 0.2% | |||||||||||
NV Housing Division | |||||||||||
Sdashs Apartments Ltd., Series 2002 A, AMT, LOC: Wells Fargo Bank N.A. 0.320% 04/01/35 (09/06/12) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
NV Reno | |||||||||||
ReTrac-Reno Transportation Rail Access Corridor, Series 2008, LOC: Bank of New York 0.180% 06/01/42 (09/04/12) (a)(b) | 2,135,000 | 2,135,000 | |||||||||
NV Sparks | |||||||||||
Rix Industries, Series 2002, AMT, LOC: Wells Fargo Bank N.A. 0.370% 07/01/27 (09/06/12) (a)(b) | 1,090,000 | 1,090,000 | |||||||||
Nevada Total | 6,225,000 | ||||||||||
New Jersey – 3.2% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 1991, LOC: BNP Paribas 0.600% 09/04/12 | 50,000,000 | 50,000,000 | |||||||||
Series 1992, LOC: BNP Paribas 0.600% 09/04/12 | 20,000,000 | 20,000,000 | |||||||||
NJ Elmwood Park | |||||||||||
Series 2012, 1.000% 08/09/13 | 6,300,000 | 6,332,911 | |||||||||
NJ Springfield/Union County | |||||||||||
Series 2012, 1.000% 08/09/13 | 5,755,000 | 5,791,498 | |||||||||
New Jersey Total | 82,124,409 |
See Accompanying Notes to Financial Statements.
9
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
New York – 8.5% | |||||||||||
NY Baldwinsville Central School District | |||||||||||
New York State Aid Intercept Program, Series 2012, 1.000% 06/27/13 | 4,000,000 | 4,023,315 | |||||||||
NY Erie County Industrial Development Agency | |||||||||||
Series 2012, Credit Support: State Aid Withholding 1.000% 05/01/13 | 2,000,000 | 2,009,128 | |||||||||
NY Housing Finance Agency | |||||||||||
Ann/Nassau Realty LLC, 111 Nassau St., Series 2011 A, LOC: Landesbank Hessen-Thüringen 0.200% 11/01/44 (09/04/12) (a)(b) | 3,290,000 | 3,290,000 | |||||||||
Midtown West B LLC, 505 West 37th St., Series 2008 A, AMT, LOC: Landesbank Hessen-Thüringen 0.280% 05/01/42 (09/05/12) (a)(b) | 50,645,000 | 50,645,000 | |||||||||
NY Metropolitan Transportation Authority | |||||||||||
Series 2008 D2, LOC: Landesbank Hessen-Thüringen 0.210% 11/01/35 (09/04/12) (a)(b) | 14,340,000 | 14,340,000 | |||||||||
NY Mortgage Agency | |||||||||||
Escrowed in United States Treasuries: Series 2012 173-A, 0.190% 04/01/40 (12/01/12) (b)(c) | 4,000,000 | 4,000,000 | |||||||||
Series 2012 173-B, 0.230% 04/01/40 (05/01/13) (b)(c) | 4,000,000 | 4,000,000 | |||||||||
NY New York City Housing Development Corp. | |||||||||||
Series 2008 H2B, AMT, 0.320% 05/01/13 | 3,000,000 | 3,000,000 | |||||||||
Series 2012 C, 0.270% 05/01/45 (02/01/13) (b)(c) | 4,000,000 | 4,000,000 | |||||||||
NY New York City Municipal Water Finance Authority | |||||||||||
Series 2007 BB-3, SPA: BNP Paribas 0.190% 06/15/34 (09/04/12) (a)(b) | 9,075,000 | 9,075,000 |
Par ($) | Value ($) | ||||||||||
NY New York City Transitional Finance Authority Future Tax Secured Revenue | |||||||||||
NYC Recovery, Series 2002 1D, SPA: Landesbank Hessen-Thüringen 0.180% 11/01/22 (09/04/12) (a)(b) | 11,515,000 | 11,515,000 | |||||||||
NY New York City | |||||||||||
Series 1993 E4, LOC: BNP Paribas: 0.190% 08/01/21 (09/04/12) (a)(b) | 8,700,000 | 8,700,000 | |||||||||
0.190% 08/01/22 (09/04/12) (a)(b) | 7,600,000 | 7,600,000 | |||||||||
Series 2011 D-3, LOC: Bank of New York 0.170% 10/01/39 (09/04/12) (a)(b) | 19,390,000 | 19,390,000 | |||||||||
NY North Hempstead | |||||||||||
Series 2011, 1.000% 10/05/12 | 11,361,250 | 11,368,711 | |||||||||
NY Oneida County Industrial Development Agency | |||||||||||
Champion Home Builders Co., Series 1999, AMT, LOC: Wells Fargo Bank N.A. 0.230% 06/01/29 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
NY Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Westchester County Industrial Development Agency, Levister Redevelopment Co. LLC, Series 2007, AMT, GTY AGMT: FHLMC 0.370% 09/01/50 (09/06/12) (a)(b) | 24,385,000 | 24,385,000 | |||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2007, SPA: JPMorgan Chase Bank 0.380% 01/01/19 (09/05/12) (a)(b) | 28,810,000 | 28,810,000 | |||||||||
NY Warwick Valley Central School District | |||||||||||
Series 2012, 1.000% 06/28/13 | 3,000,000 | 3,017,189 | |||||||||
New York Total | 218,168,343 |
See Accompanying Notes to Financial Statements.
10
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
North Carolina – 2.0% | |||||||||||
NC Capital Facilities Finance Agency | |||||||||||
Duke University, 0.180% 10/04/12 | 4,774,000 | 4,774,000 | |||||||||
NC Catawba County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Von Drehle Properties LLC, Series 2001, AMT, LOC: Branch Banking & Trust 0.230% 12/01/21 (09/06/12) (a)(b) | 2,140,000 | 2,140,000 | |||||||||
NC Clipper Tax-Exempt Certificate Trust | |||||||||||
North Carolina Housing Finance Agency, Series 2005, AMT, LIQ FAC: State Street Bank & Trust Co. 0.290% 07/01/36 (09/06/12) (a)(b) | 2,815,000 | 2,815,000 | |||||||||
NC Davidson County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Childress Winery LLC, Series 2004, AMT, LOC: Branch Banking & Trust 0.230% 04/01/26 (09/06/12) (a)(b) | 3,500,000 | 3,500,000 | |||||||||
NC Durham County | |||||||||||
NRP Alston Village LLC, Series 2005, AMT, GTY AGMT: FHLMC 0.370% 11/01/24 (09/06/12) (a)(b) | 17,730,000 | 17,730,000 | |||||||||
NC Guilford County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
ABCO Automation, Inc., Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.320% 07/01/21 (09/06/12) (a)(b) | 900,000 | 900,000 | |||||||||
Snider Tire, Inc., Series 1999, AMT, LOC: Wells Fargo Bank N.A. 0.320% 10/01/19 (09/06/12) (a)(b) | 1,400,000 | 1,400,000 | |||||||||
NC Iredell County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Valspar Corp. Project, Series 1995, AMT, LOC: Lloyds Bank 0.320% 06/01/15 (09/06/12) (a)(b) | 4,500,000 | 4,500,000 |
Par ($) | Value ($) | ||||||||||
NC Johnston County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Hamlin Sheet Metal Co., Series 1997, AMT, LOC: Branch Banking & Trust 0.230% 11/01/17 (09/06/12) (a)(b) | 1,300,000 | 1,300,000 | |||||||||
NC Rowan County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
DDSM Properties LLC, Series 2008, AMT, LOC: Wells Fargo Bank N.A. 0.320% 01/01/28 (09/06/12) (a)(b) | 5,310,000 | 5,310,000 | |||||||||
PHC LLC, Series 1999, AMT, LOC: Branch Banking & Trust 0.230% 03/01/14 (09/06/12) (a)(b) | 1,010,000 | 1,010,000 | |||||||||
NC Wayne County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Reuel, Inc., Series 2008, AMT, LOC: Branch Banking & Trust 0.330% 03/01/26 (09/06/12) (a)(b) | 1,550,000 | 1,550,000 | |||||||||
NC Yancey County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Altec Industries, Inc., Series 2007, AMT, LOC: Branch Banking & Trust 0.230% 03/01/27 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
North Carolina Total | 51,929,000 | ||||||||||
Ohio – 1.2% | |||||||||||
OH Cuyahoga County | |||||||||||
Corporate Wings, Series 2005, AMT, LOC: U.S. Bank N.A. 0.390% 04/01/25 (09/06/12) (a)(b) | 1,195,000 | 1,195,000 | |||||||||
OH Franklin County | |||||||||||
OhioHealth Corp., Series 2011 B, 0.250% 11/15/33 (07/09/13) (b)(c) | 11,060,000 | 11,060,000 |
See Accompanying Notes to Financial Statements.
11
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
OH Lucas County | |||||||||||
American Capital Properties, Series 1999, AMT, LOC: PNC Bank N.A. 0.270% 10/01/18 (09/06/12) (a)(b) | 2,115,000 | 2,115,000 | |||||||||
OH Ohio State University | |||||||||||
0.180% 10/04/12 | 9,500,000 | 9,500,000 | |||||||||
OH Portage County Port Authority | |||||||||||
BF Properties LP, Delta System, Inc., Series 2008, AMT, LOC: PNC Bank N.A. 0.270% 02/01/29 (09/06/12) (a)(b) | 5,570,000 | 5,570,000 | |||||||||
OH Solon | |||||||||||
JTM Products, Inc., Project, Series 2001, AMT, LOC: PNC Bank N.A. 0.270% 06/01/21 (09/06/12) (a)(b) | 955,000 | 955,000 | |||||||||
Ohio Total | 30,395,000 | ||||||||||
Oklahoma – 0.0% | |||||||||||
OK Comanche County Industrial Development Authority | |||||||||||
Silver-Line Plastics Corp., Series 2000, AMT, LOC: Wells Fargo Bank N.A. 0.320% 10/01/15 (09/06/12) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
Oklahoma Total | 1,000,000 | ||||||||||
Oregon – 0.5% | |||||||||||
OR Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Oregon State Housing & Development, Series 2008, AMT, GTY AGMT: FHLMC 0.410% 12/01/50 (09/06/12) (a)(b) | 6,715,000 | 6,715,000 | |||||||||
OR State | |||||||||||
Antelope Acquisition LLC, Series 2004, AMT, LOC: Union Bank N.A. 0.320% 08/01/24 (09/06/12) (a)(b) | 1,260,000 | 1,260,000 |
Par ($) | Value ($) | ||||||||||
LD McFarland Co., Ltd., Series 1996, AMT, LOC: U.S. Bank N.A. 0.210% 11/01/16 (09/06/12) (a)(b) | 3,690,000 | 3,690,000 | |||||||||
Oregon Total | 11,665,000 | ||||||||||
Pennsylvania – 0.4% | |||||||||||
PA Economic Development Financing Authority | |||||||||||
Pittsburgh Allegheny County, Series 2002 A3, AMT, LOC: PNC Bank N.A. 0.340% 04/01/22 (09/06/12) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
PA Lawrence County Industrial Development Authority | |||||||||||
Doren, Inc., Series 2004, AMT, LOC: PNC Bank N.A. 0.270% 12/01/15 (09/06/12) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
PA University of Pittsburgh | |||||||||||
Series 2012, 2.000% 07/02/13 | 8,000,000 | 8,119,073 | |||||||||
Pennsylvania Total | 10,819,073 | ||||||||||
South Carolina – 0.8% | |||||||||||
SC Charleston County School District Development Corp. | |||||||||||
Series 2012, Credit Support: South Carolina School District Credit Enhancement Program 2.250% 05/13/13 | 3,820,000 | 3,874,940 | |||||||||
SC Jobs-Economic Development Authority | |||||||||||
Quoizel, Inc., Series 1996, AMT, LOC: Branch Banking & Trust 0.230% 05/01/16 (09/06/12) (a)(b) | 1,525,000 | 1,525,000 | |||||||||
Watson Engineering, Inc., Series 2007, AMT, LOC: PNC Bank N.A. 0.270% 09/01/27 (09/06/12) (a)(b) | 5,080,000 | 5,080,000 | |||||||||
SC Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Series 2008, AMT, GTY AGMT: FHLMC 0.410% 03/01/49 (09/06/12) (a)(b) | 9,735,000 | 9,735,000 | |||||||||
South Carolina Total | 20,214,940 |
See Accompanying Notes to Financial Statements.
12
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
South Dakota – 0.0% | |||||||||||
SD Clipper Tax-Exempt Trust | |||||||||||
South Dakota Housing Development Authority, Series 2009, AMT, LIQ FAC: State Street Bank & Trust Co. 0.290% 05/01/30 (09/06/12) (a)(b)(d) | 565,000 | 565,000 | |||||||||
South Dakota Total | 565,000 | ||||||||||
Tennessee – 0.1% | |||||||||||
TN Shelby County Health Educational & Housing Facilities Board | |||||||||||
Multi-Family Housing Revenue, Series 1995, AMT, LOC: U.S. Bank N.A. 0.290% 01/01/23 (09/06/12) (a)(b) | 2,360,000 | 2,360,000 | |||||||||
Tennessee Total | 2,360,000 | ||||||||||
Texas – 6.8% | |||||||||||
TX Capital Industrial Development Corp. | |||||||||||
Texas Disposal Systems, Series 2001, AMT, LOC: Union Bank N.A. 0.240% 05/01/16 (09/06/12) (a)(b) | 4,715,000 | 4,715,000 | |||||||||
TX JPMorgan Chase Putters/Drivers Trust | |||||||||||
Texas Tax & Revenue Anticipation Notes, Series 2012 4262, LIQ FAC: JPMorgan Chase Bank 0.200% 08/30/13 (09/04/12) (a)(b)(d) | 11,300,000 | 11,300,000 | |||||||||
TX Lower Neches Valley Authority Industrial Development Corp. | |||||||||||
Exxon Mobil Corp., Series 2001 B, AMT, 0.180% 11/01/29 (09/04/12) (b)(c) | 53,710,000 | 53,710,000 | |||||||||
TX Port of Port Arthur Navigation District | |||||||||||
Total S.A., Fina Oil & Chemical Co.: Series 1998, AMT, 0.280% 05/01/33 (09/05/12) (b)(c) | 3,300,000 | 3,300,000 | |||||||||
Series 2000 B, AMT, 0.300% 05/01/35 (09/05/12) (b)(c) | 10,000,000 | 10,000,000 |
Par ($) | Value ($) | ||||||||||
TX Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Costa Mirada Ltd., Series 2008, AMT, GTY AGMT: FHLMC 0.370% 10/01/50 (09/06/12) (a)(b) | 11,225,000 | 11,225,000 | |||||||||
Harris County Texas, Series 2008, AMT, GTY AGMT: FHLMC 0.410% 06/01/30 (09/06/12) (a)(b) | 4,690,000 | 4,690,000 | |||||||||
San Antonio Texas, Series 2008, AMT, GTY AGMT: FHLMC: 0.370% 11/01/49 (09/06/12) (a)(b) | 14,205,000 | 14,205,000 | |||||||||
0.370% 05/01/50 (09/06/12) (a)(b) | 13,575,000 | 13,575,000 | |||||||||
Texas State Department of Housing, Series 2008, AMT, GTY AGMT: FHLMC: 0.370% 03/01/46 (09/06/12) (a)(b) | 13,840,000 | 13,840,000 | |||||||||
0.370% 09/01/46 (09/06/12) (a)(b) | 11,900,000 | 11,900,000 | |||||||||
0.370% 12/01/47 (09/06/12) (a)(b) | 11,385,000 | 11,385,000 | |||||||||
0.410% 07/01/44 (09/06/12) (a)(b) | 9,720,000 | 9,720,000 | |||||||||
Texas Total | 173,565,000 | ||||||||||
Utah – 0.3% | |||||||||||
UT Tooele | |||||||||||
Encon Utah LLC, Series 2002 A, AMT, LOC: U.S. Bank N.A. 0.260% 10/01/22 (09/06/12) (a)(b) | 2,575,000 | 2,575,000 | |||||||||
UT Weber County | |||||||||||
IHC Health Services, Inc., Series 2000 A, SPA: Landesbank Hessen-Thüringen 0.200% 02/15/31 (09/04/12) (a)(b) | 4,380,000 | 4,380,000 | |||||||||
Utah Total | 6,955,000 |
See Accompanying Notes to Financial Statements.
13
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Virginia – 0.5% | |||||||||||
VA Fairfax County Economic Development Authority | |||||||||||
Szivic Family LLC, Series 2006, AMT, LOC: Branch Banking & Trust 0.330% 09/01/26 (09/06/12) (a)(b) | 1,550,000 | 1,550,000 | |||||||||
VA Henrico Economic Development Authority | |||||||||||
Colonial Mechanical Corp., Series 2000, AMT, LOC: Wells Fargo Bank N.A. 0.320% 08/01/20 (09/06/12) (a)(b) | 1,855,000 | 1,855,000 | |||||||||
VA Portsmouth Redevelopment & Housing Authority | |||||||||||
King Square Apartments, Series 2006, AMT, GTY AGMT: FHLMC 0.410% 03/01/50 (09/06/12) (a)(b) | 3,350,000 | 3,350,000 | |||||||||
VA Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Harrisonburg Virginia, Series 2008, AMT, GTY AGMT: FHLMC 0.450% 05/01/40 (09/06/12) (a)(b) | 6,410,000 | 6,410,000 | |||||||||
Virginia Total | 13,165,000 | ||||||||||
Washington – 1.3% | |||||||||||
WA Economic Development Finance Authority | |||||||||||
RMI Investors LLC, Series 2001 F, AMT, LOC: Wells Fargo Bank N.A. 0.320% 08/01/26 (09/06/12) (a)(b) | 2,785,000 | 2,785,000 | |||||||||
WA Housing Finance Commission | |||||||||||
The Seasons I LLC, Series 2006, AMT, DPCE: FNMA 0.200% 12/15/40 (09/06/12) (a)(b) | 14,660,000 | 14,660,000 | |||||||||
WA Kitsap County Industrial Development Corp. | |||||||||||
Cara Group LLC, Series 2003, AMT, LOC: U.S. Bank N.A. 0.370% 03/01/32 (09/06/12) (a)(b) | 1,420,000 | 1,420,000 |
Par ($) | Value ($) | ||||||||||
WA Pierce County Economic Development Corp. | |||||||||||
Cascade Pole & Lumber Co., Series 1996, AMT, LOC: U.S. Bank N.A. 0.210% 12/01/17 (09/06/12) (a)(b) | 3,955,000 | 3,955,000 | |||||||||
Sumner Leasing LLC, Quality Stamping Project, Series 2006, AMT, LOC: FHLB 0.370% 12/01/36 (09/06/12) (a)(b) | 1,895,000 | 1,895,000 | |||||||||
WA Port of Seattle Industrial Development Corp. | |||||||||||
Crowley Marine Services, Series 2001, AMT, LOC: DnB NOR Bank ASA 0.280% 12/31/21 (09/05/12) (a)(b) | 8,700,000 | 8,700,000 | |||||||||
Washington Total | 33,415,000 | ||||||||||
West Virginia – 1.6% | |||||||||||
WV Putnam County | |||||||||||
Toyota Motor Manufacturing West Virginia, Inc., Series 1998 A, AMT, GTY AGMT: Toyota Motor Credit Corp. 0.170% 06/01/28 (09/05/12) (a)(b) | 40,000,000 | 40,000,000 | |||||||||
West Virginia Total | 40,000,000 | ||||||||||
Wisconsin – 2.1% | |||||||||||
WI Ashland | |||||||||||
Larson-Juhl U.S. LLC, Series 2000, AMT, LOC: Wells Fargo Bank N.A. 0.370% 07/01/20 (09/07/12) (a)(b) | 2,495,000 | 2,495,000 | |||||||||
WI Housing & Economic Development Authority | |||||||||||
Series 2008 B, AMT, LIQ FAC: JPMorgan Chase Bank 0.280% 11/01/31 (09/06/12) (a)(b) | 1,500,000 | 1,500,000 | |||||||||
WI JPMorgan Chase Putters/Drivers Trust | |||||||||||
Wisconsin Housing & Economic Development Authority, Series 2012, AMT, Credit Support: Government of Authority, LIQ FAC: JPMorgan Chase Bank 0.240% 03/01/15 (09/04/12) (a)(b)(d) | 15,975,000 | 15,975,000 |
See Accompanying Notes to Financial Statements.
14
BofA Municipal Reserves
August 31, 2012
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
WI Pewaukee | |||||||||||
Mixer Systems, Inc., Series 2000, AMT, LOC: JPMorgan Chase Bank 0.430% 09/01/20 (09/06/12) (a)(b) | 1,150,000 | 1,150,000 | |||||||||
WI Plymouth | |||||||||||
Masters Gallery Foods, Series 2008 A, AMT, LOC: Wells Fargo Bank N.A. 0.320% 05/01/38 (09/06/12) (a)(b) | 5,300,000 | 5,300,000 | |||||||||
WI Public Finance Authority | |||||||||||
Glenridge on Palmer Ranch, Series 2011 B, LOC: Bank of Scotland 0.230% 06/01/41 (09/04/12) (a)(b) | 26,355,000 | 26,355,000 | |||||||||
WI Village of Menomonee Falls | |||||||||||
Jema LLC, Series 1994, AMT, LOC: JPMorgan Chase Bank 0.430% 09/01/14 (09/06/12) (a)(b) | 1,020,000 | 1,020,000 | |||||||||
Wisconsin Total | 53,795,000 | ||||||||||
Total Municipal Bonds (cost of $2,051,891,292) | 2,051,891,292 | ||||||||||
Closed-End Investment Companies – 14.6% | |||||||||||
California – 0.9% | |||||||||||
CA Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.270% 08/01/40 (09/06/12) (a)(b)(d) | 24,100,000 | 24,100,000 | |||||||||
California Total | 24,100,000 | ||||||||||
New Jersey – 1.2% | |||||||||||
NJ Nuveen Investment Quality Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.290% 08/01/40 (09/06/12) (a)(b)(d) | 21,300,000 | 21,300,000 |
Par ($) | Value ($) | ||||||||||
NJ Nuveen Premium Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.290% 08/01/40 (09/06/12) (a)(b)(d) | 10,000,000 | 10,000,000 | |||||||||
New Jersey Total | 31,300,000 | ||||||||||
New York – 0.9% | |||||||||||
NY Nuveen Investment Quality Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.270% 08/01/40 (09/06/12) (a)(b)(d) | 15,000,000 | 15,000,000 | |||||||||
NY Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIC FAQ: Citibank N.A. 0.270% 12/01/40 (09/06/12) (a)(b)(d) | 7,000,000 | 7,000,000 | |||||||||
New York Total | 22,000,000 | ||||||||||
Other – 10.5% | |||||||||||
Nuveen Insured Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.290% 12/01/40 (09/06/12) (a)(b)(d) | 100,000,000 | 100,000,000 | |||||||||
Nuveen Premier Insured Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.290% 12/01/40 (09/06/12) (a)(b)(d) | 2,000,000 | 2,000,000 | |||||||||
Nuveen Premium Income Municipal Fund 4, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: JPMorgan Chase Bank 0.270% 03/01/40 (09/06/12) (a)(b)(d) | 77,200,000 | 77,200,000 | |||||||||
Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: JPMorgan Chase Bank 0.270% 12/01/40 (09/06/12) (a)(b)(d) | 88,400,000 | 88,400,000 | |||||||||
Other Total | 267,600,000 |
See Accompanying Notes to Financial Statements.
15
BofA Municipal Reserves
August 31, 2012
Closed-End Investment Companies (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Pennsylvania – 1.1% | |||||||||||
PA Nuveen Investment Quality Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.290% 08/01/40 (09/06/12) (a)(b)(d) | 14,000,000 | 14,000,000 | |||||||||
PA Nuveen Premium Income Municipal Fund 2, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.290% 08/01/40 (09/06/12) (a)(b)(d) | 15,000,000 | 15,000,000 | |||||||||
Pennsylvania Total | 29,000,000 | ||||||||||
Total Closed-End Investment Companies (cost of $374,000,000) | 374,000,000 |
Short-Term Obligations – 5.5% |
Par ($) | Value ($) | ||||||||||
Variable Rate Demand Notes – 5.5% | |||||||||||
FHLMC Multi-Family VRD Certificates | |||||||||||
0.230% 11/15/34 (09/06/12) (b)(c) | 10,086,099 | 10,086,099 | |||||||||
0.230% 02/15/35 (09/06/12) (b)(c)(d) | 9,797,899 | 9,797,899 | |||||||||
0.230% 08/15/45 (09/06/12) (b)(c) | 83,196,279 | 83,196,279 | |||||||||
0.230% 01/15/47 (09/06/12) (b)(c) | 37,803,753 | 37,803,753 | |||||||||
Variable Rate Demand Notes Total | 140,884,030 | ||||||||||
Total Short-Term Obligations (cost of $140,884,030) | 140,884,030 | ||||||||||
Total Investments – 100.2% (cost of $2,566,775,322) (f) | 2,566,775,322 | ||||||||||
Other Assets & Liabilities, Net – (0.2)% | (4,010,744 | ) | |||||||||
Net Assets – 100.0% | 2,562,764,578 |
Notes to Investment Portfolio:
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(b) Parenthetical date represents the effective maturity date for the security.
(c) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature.
These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $420,927,899 or 16.4% of net assets for the Fund.
(e) Security purchased on a delayed delivery basis.
(f) Cost for federal income tax purposes is $2,566,775,322.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Municipal Bonds | $ | — | $ | 2,051,891,292 | $ | — | $ | 2,051,891,292 | |||||||||||
Total Closed-End Investment Companies | — | 374,000,000 | — | 374,000,000 | |||||||||||||||
Total Short-Term Obligations | — | 140,884,030 | — | 140,884,030 | |||||||||||||||
Total Investments | $ | — | $ | 2,566,775,322 | $ | — | $ | 2,566,775,322 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 80.1 | ||||||
Closed-End Investment Companies | 14.6 | ||||||
94.7 | |||||||
Short-Term Obligations | 5.5 | ||||||
Other Assets & Liabilities, Net | (0.2 | ) | |||||
100.0 |
See Accompanying Notes to Financial Statements.
16
BofA Municipal Reserves
August 31, 2012
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FHLB | Federal Home Loan Bank | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
GNMA | Government National Mortgage Association | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
MERLOTS | Municipal Exempt Receipts – Liquidity Optional Tender Series | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
17
Statement of Assets and Liabilities – BofA Municipal Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 2,566,775,322 | |||||||||
Cash | 5,630 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 1,001 | ||||||||||
Interest | 3,454,606 | ||||||||||
Expense reimbursement due from investment advisor | 14,492 | ||||||||||
Trustees' deferred compensation plan | 10,222 | ||||||||||
Prepaid expenses | 43,421 | ||||||||||
Total Assets | 2,570,304,694 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased on a delayed delivery basis | 6,881,328 | ||||||||||
Fund shares repurchased | 4,740 | ||||||||||
Distributions | 58,761 | ||||||||||
Investment advisory fee | 317,743 | ||||||||||
Administration fee | 73,065 | ||||||||||
Pricing and bookkeeping fees | 20,467 | ||||||||||
Transfer agent fee | 10,568 | ||||||||||
Trustees' fees | 4,048 | ||||||||||
Custody fee | 12,856 | ||||||||||
Distribution and service fees | 5,896 | ||||||||||
Shareholder administration fee | 35,057 | ||||||||||
Chief compliance officer expenses | 2,189 | ||||||||||
Trustees' deferred compensation plan | 10,222 | ||||||||||
Other liabilities | 103,176 | ||||||||||
Total Liabilities | 7,540,116 | ||||||||||
Net Assets | 2,562,764,578 | ||||||||||
Net Assets Consist of | Paid-in capital | 2,561,934,942 | |||||||||
Undistributed net investment income | 1,204,309 | ||||||||||
Accumulated net realized loss | (374,673 | ) | |||||||||
Net Assets | 2,562,764,578 |
See Accompanying Notes to Financial Statements.
18
Statement of Assets and Liabilities (continued) – BofA Municipal Reserves
August 31, 2012
Adviser Class Shares | Net assets | $ | 50,242,863 | ||||||||
Shares outstanding | 50,227,770 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 1,814,346,033 | ||||||||
Shares outstanding | 1,813,824,662 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 40,160,059 | ||||||||
Shares outstanding | 40,147,954 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares (1) | Net assets | $ | 29,978,058 | ||||||||
Shares outstanding | 29,970,264 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 89,248,160 | ||||||||
Shares outstanding | 89,224,069 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 239,532 | ||||||||
Shares outstanding | 239,461 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 7,103,781 | ||||||||
Shares outstanding | 7,101,653 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 531,446,092 | ||||||||
Shares outstanding | 531,285,036 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
19
Statement of Operations – BofA Municipal Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 9,591,044 | |||||||||
Expenses | Investment advisory fee | 4,940,128 | |||||||||
Administration fee | 3,153,418 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 204,849 | ||||||||||
Investor Class Shares | 239 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 283,132 | ||||||||||
Daily Class Shares | 146,320 | ||||||||||
Investor Class Shares | 598 | ||||||||||
Liquidity Class Shares | 14,231 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 38,246 | ||||||||||
Trust Class Shares | 584,659 | ||||||||||
Transfer agent fee | 73,549 | ||||||||||
Pricing and bookkeeping fees | 202,225 | ||||||||||
Trustees' fees | 65,066 | ||||||||||
Custody fee | 67,072 | ||||||||||
Chief compliance officer expenses | 12,024 | ||||||||||
Other expenses | 459,796 | ||||||||||
Total Expenses | 10,245,552 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (2,382,610 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (180,942 | ) | |||||||||
Daily Class Shares | (297,900 | ) | |||||||||
Institutional Class Shares | (26 | ) | |||||||||
Investor Class Shares | (621 | ) | |||||||||
Liquidity Class Shares | (9,114 | ) | |||||||||
Trust Class Shares | (98,851 | ) | |||||||||
Expense reductions | (156 | ) | |||||||||
Net Expenses | 7,275,332 | ||||||||||
Net Investment Income | 2,315,712 | ||||||||||
Net realized loss on investments | (118,710 | ) | |||||||||
Net Increase Resulting from Operations | 2,197,002 |
See Accompanying Notes to Financial Statements.
20
Statement of Changes in Net Assets – BofA Municipal Reserves
Increase (Decrease) in Net Assets | Year Ended August 31, 2012 ($) | Year Ended August 31, 2011 ($) | |||||||||||||
Operations | Net investment income | 2,315,712 | 4,931,080 | ||||||||||||
Net realized gain (loss) on investments | (118,710 | ) | 35,725 | ||||||||||||
Net increase resulting from operations | 2,197,002 | 4,966,805 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (100 | ) | — | ||||||||||||
Capital Class Shares | (2,203,434 | ) | (4,412,334 | ) | |||||||||||
Class Z Shares (1) | (1,633 | ) | (32,439 | ) | |||||||||||
Daily Class Shares | (10 | ) | (5 | ) | |||||||||||
Institutional Capital Shares (1) | (17,714 | ) | — | ||||||||||||
Institutional Class Shares | (48,841 | ) | (231,767 | ) | |||||||||||
Liquidity Class Shares | (30 | ) | (1,131 | ) | |||||||||||
Trust Class Shares | (43,950 | ) | (252,741 | ) | |||||||||||
Total distributions to shareholders | (2,315,712 | ) | (4,930,417 | ) | |||||||||||
Net Capital Stock Transactions | (1,261,005,870 | ) | (1,296,428,912 | ) | |||||||||||
Total decrease in net assets | (1,261,124,580 | ) | (1,296,392,524 | ) | |||||||||||
Net Assets | Beginning of period | 3,823,889,158 | 5,120,281,682 | ||||||||||||
End of period | 2,562,764,578 | 3,823,889,158 | |||||||||||||
Undistributed net investment income at end of period | 1,204,309 | 1,204,309 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
21
Statement of Changes in Net Assets (continued) – BofA Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 361,597,245 | 361,597,245 | 899,685,691 | 899,685,691 | |||||||||||||||
Distributions reinvested | 7 | 7 | — | — | |||||||||||||||
Redemptions | (479,836,148 | ) | (479,836,148 | ) | (1,060,272,328 | ) | (1,060,272,328 | ) | |||||||||||
Net decrease | (118,238,896 | ) | (118,238,896 | ) | (160,586,637 | ) | (160,586,637 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 6,578,239,877 | 6,578,239,876 | 10,380,126,517 | 10,380,126,517 | |||||||||||||||
Distributions reinvested | 1,187,270 | 1,187,270 | 2,756,899 | 2,756,899 | |||||||||||||||
Redemptions | (7,590,334,263 | ) | (7,590,334,263 | ) | (11,177,041,557 | ) | (11,177,041,557 | ) | |||||||||||
Net decrease | (1,010,907,116 | ) | (1,010,907,117 | ) | (794,158,141 | ) | (794,158,141 | ) | |||||||||||
Class Z Shares (1) | |||||||||||||||||||
Subscriptions | 85,551 | 85,551 | 3,938,101 | 3,938,101 | |||||||||||||||
Conversion | (21,389,943 | ) | (21,389,943 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 31,004 | 31,004 | |||||||||||||||
Redemptions | (386,511 | ) | (386,511 | ) | (8,216,994 | ) | (8,216,994 | ) | |||||||||||
Net decrease | (21,690,903 | ) | (21,690,903 | ) | (4,247,889 | ) | (4,247,889 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 721,146 | 721,146 | 138,395,378 | 138,395,378 | |||||||||||||||
Distributions reinvested | — | — | 5 | 5 | |||||||||||||||
Redemptions | (49,007,633 | ) | (49,007,633 | ) | (502,555,126 | ) | (502,555,126 | ) | |||||||||||
Net decrease | (48,286,487 | ) | (48,286,487 | ) | (364,159,743 | ) | (364,159,743 | ) | |||||||||||
Institutional Capital Shares (1) | |||||||||||||||||||
Subscriptions | 24,622,453 | 24,622,453 | — | — | |||||||||||||||
Conversion | 21,389,943 | 21,389,943 | — | — | |||||||||||||||
Distributions reinvested | 15,939 | 15,939 | — | — | |||||||||||||||
Redemptions | (16,058,071 | ) | (16,058,071 | ) | — | — | |||||||||||||
Net increase | 29,970,264 | 29,970,264 | — | — | |||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 571,835,446 | 571,835,446 | 1,011,355,836 | 1,011,355,836 | |||||||||||||||
Distributions reinvested | 43,380 | 43,380 | 167,629 | 167,629 | |||||||||||||||
Redemptions | (642,485,541 | ) | (642,485,541 | ) | (1,179,740,860 | ) | (1,179,740,860 | ) | |||||||||||
Net decrease | (70,606,715 | ) | (70,606,715 | ) | (168,217,395 | ) | (168,217,395 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 134,667 | 134,667 | 92,206 | 92,206 | |||||||||||||||
Redemptions | (113,296 | ) | (113,296 | ) | (118,664 | ) | (118,664 | ) | |||||||||||
Net increase (decrease) | 21,371 | 21,371 | (26,458 | ) | (26,458 | ) | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 2,320,000 | 2,320,000 | 6,765,015 | 6,765,015 | |||||||||||||||
Distributions reinvested | 30 | 30 | 1,126 | 1,126 | |||||||||||||||
Redemptions | (3,400,321 | ) | (3,400,321 | ) | (11,463,682 | ) | (11,463,682 | ) | |||||||||||
Net decrease | (1,080,291 | ) | (1,080,291 | ) | (4,697,541 | ) | (4,697,541 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 864,853,168 | 864,853,168 | 1,112,364,414 | 1,112,364,414 | |||||||||||||||
Distributions reinvested | 62 | 62 | 300 | 300 | |||||||||||||||
Redemptions | (885,040,326 | ) | (885,040,326 | ) | (912,699,822 | ) | (912,699,822 | ) | |||||||||||
Net increase (decrease) | (20,187,096 | ) | (20,187,096 | ) | 199,664,892 | 199,664,892 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
22
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | 0.0001 | 0.0100 | 0.0241 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (0.0001 | ) | (0.0100 | ) | (0.0241 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.00 | % | 0.00 | %(g) | 1.00 | % | 2.44 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.29 | % | 0.34 | % | 0.39 | % | 0.48 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.23 | % | 0.18 | % | 0.13 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (h) | — | %(g) | — | %(g) | 0.01 | % | 1.06 | % | 2.40 | % | |||||||||||||
Net assets, end of period (000s) | $ | 50,243 | $ | 168,505 | $ | 329,108 | $ | 701,879 | $ | 957,701 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(c) On December 31, 2009, Columbia Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Municipal Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) Rounds to less than 0.01%.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
23
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | 0.0019 | 0.0125 | 0.0266 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.0019 | ) | (0.0125 | ) | (0.0266 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (d)(e) | 0.09 | % | 0.14 | % | 0.19 | % | 1.26 | % | 2.70 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (f) | 0.20 | % | 0.20 | % | 0.20 | % | 0.23 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.07 | % | 0.07 | % | 0.06 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (f) | 0.09 | % | 0.14 | % | 0.18 | % | 1.15 | % | 2.72 | % | |||||||||||||
Net assets, end of period (000s) | $ | 1,814,346 | $ | 2,825,365 | $ | 3,619,465 | $ | 4,655,880 | $ | 3,207,123 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(c) On December 31, 2009, Columbia Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Municipal Reserves.
(d) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
24
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0071 | 0.0206 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (0.0071 | ) | (0.0206 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.00 | %(g) | 0.00 | % | 0.71 | % | 2.08 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.29 | % | 0.35 | % | 0.39 | % | 0.78 | % | 0.80 | % | |||||||||||||
Waiver/Reimbursement | 0.58 | % | 0.52 | % | 0.47 | % | 0.10 | % | 0.05 | % | |||||||||||||
Net investment income (h) | — | %(g) | — | %(g) | — | 0.78 | % | 1.99 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 40,160 | $ | 88,455 | $ | 452,671 | $ | 1,347,281 | $ | 1,990,097 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) Rounds to less than 0.01%.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
25
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | 0.0019 | 0.0125 | 0.0267 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.0019 | ) | (0.0125 | ) | (0.0267 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.09 | % | 0.14 | % | 0.19 | % | 1.26 | % | 2.70 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.20 | % | 0.20 | % | 0.20 | % | 0.23 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.07 | % | 0.07 | % | 0.06 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (g) | 0.09 | % | 0.14 | % | 0.19 | % | 1.24 | % | 2.70 | % | |||||||||||||
Net assets, end of period (000s) | $ | 29,978 | $ | 21,696 | $ | 25,943 | $ | 36,380 | $ | 36,333 |
(a) On October 1, 2011, the Institutional Capital shares of the Fund commenced operations and the Class Z shares of the Fund converted into the Institutional Capital shares of the Fund. The financial information of the Fund's Institutional Capital shares prior to this conversion is that of the Class Z shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(d) On December 31, 2009, Columbia Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Municipal Reserves.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
26
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | 0.0015 | 0.0121 | 0.0262 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.0015 | ) | (0.0121 | ) | (0.0262 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (d)(e) | 0.05 | % | 0.10 | % | 0.15 | % | 1.22 | % | 2.66 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (f) | 0.24 | % | 0.24 | % | 0.24 | % | 0.27 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.07 | % | 0.07 | % | 0.06 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (f) | 0.05 | % | 0.10 | % | 0.15 | % | 1.12 | % | 2.67 | % | |||||||||||||
Net assets, end of period (000s) | $ | 89,248 | $ | 159,867 | $ | 328,101 | $ | 1,123,450 | $ | 985,752 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(c) On December 31, 2009, Columbia Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Municipal Reserves.
(d) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(e) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
27
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (d) | 0.0090 | 0.0231 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (d) | (0.0090 | ) | (0.0231 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.00 | % | 0.00 | % | 0.00 | %(g) | 0.91 | % | 2.34 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.29 | % | 0.34 | % | 0.39 | % | 0.58 | % | 0.55 | % | |||||||||||||
Waiver/Reimbursement | 0.33 | % | 0.28 | % | 0.22 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (h) | — | — | — | %(g) | 0.88 | % | 2.28 | % | |||||||||||||||
Net assets, end of period (000s) | $ | 240 | $ | 218 | $ | 245 | $ | 53,818 | $ | 54,832 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(c) On December 31, 2009, Columbia Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Municipal Reserves.
(d) Rounds to less than $0.0001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) Rounds to less than 0.01%.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
28
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | 0.0004 | 0.0110 | 0.0251 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | (0.0004 | ) | (0.0110 | ) | (0.0251 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.01 | % | 0.04 | % | 1.10 | % | 2.54 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.29 | % | 0.33 | % | 0.34 | % | 0.38 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.23 | % | 0.19 | % | 0.17 | % | 0.15 | % | 0.15 | % | |||||||||||||
Net investment income (h) | — | %(g) | 0.01 | % | 0.06 | % | 1.11 | % | 2.68 | % | |||||||||||||
Net assets, end of period (000s) | $ | 7,104 | $ | 8,184 | $ | 12,882 | $ | 167,085 | $ | 157,720 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(c) On December 31, 2009, Columbia Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Municipal Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) Rounds to less than 0.01%.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
29
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | 0.0009 | 0.0115 | 0.0256 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | (0.0009 | ) | (0.0115 | ) | (0.0256 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.05 | % | 0.09 | % | 1.15 | % | 2.59 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.28 | % | 0.29 | % | 0.30 | % | 0.33 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.09 | % | 0.08 | % | 0.06 | % | 0.05 | % | 0.05 | % | |||||||||||||
Net investment income (g) | 0.01 | % | 0.05 | % | 0.09 | % | 1.09 | % | 2.55 | % | |||||||||||||
Net assets, end of period (000s) | $ | 531,446 | $ | 551,600 | $ | 351,866 | $ | 456,691 | $ | 425,627 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Municipal Reserves was renamed BofA Municipal Reserves.
(c) On December 31, 2009, Columbia Municipal Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Municipal Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
30
Notes to Financial Statements – BofA Municipal Reserves
August 31, 2012
Note 1. Organization
BofA Municipal Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income exempt from federal income tax, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers eight classes of shares: Adviser Class, Capital Class, Daily Class, Institutional Capital, Institutional Class, Investor Class, Liquidity Class and Trust Class shares. Each class of shares is offered continuously at net asset value. On October 1, 2011, Institutional Capital shares commenced operations and Class Z shares were converted into Institutional Capital shares.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
31
BofA Municipal Reserves, August 31, 2012
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from: | 2012 | 2011 | |||||||||
Tax-Exempt Income | $ | 2,026,508 | $ | 4,930,417 | |||||||
Ordinary Income* | 289,204 | — |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
32
BofA Municipal Reserves, August 31, 2012
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | 942,889 | $ | 320,181 | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
As of August 31, 2012, the Fund had pre-Act capital loss carryforwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carryforwards | ||||||
2017 | $ | 226,472 |
Capital loss carry forwards of $29,491 were utilized by the Fund during the year ended August 31, 2012.
Under current tax rules, certain currency and capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of August 31, 2012, post-October capital losses of $148,201 attributed to security transactions were deferred to September 1, 2012.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA Advisors, LLC ("BofA"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
33
BofA Municipal Reserves, August 31, 2012
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted distribution plans ("Distribution Plans") for the Daily Class, Investor Class and Liquidity Class shares of the Fund. The Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class, Daily Class, Investor Class and Liquidity Class shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
34
BofA Municipal Reserves, August 31, 2012
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Daily Class Shares | 0.35 | % | 0.35 | % | |||||||
Investor Class Shares | 0.10 | % | 0.10 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Servicing Plans: | |||||||||||
Adviser Class Shares | 0.25 | % | 0.25 | % | |||||||
Daily Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** |
* The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012.
** To the extent that the Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012 so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense limitation in effect at the time the expenses to be recovered were incurred.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
35
BofA Municipal Reserves, August 31, 2012
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 8/31/12 | |||||||||||||||
$ | 2,382,610 | $ | 3,128,637 | $ | 4,775,827 | $ | 10,287,074 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $156 for the Fund.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
36
BofA Municipal Reserves, August 31, 2012
Note 7. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 8. Significant Risks and Contingencies
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
37
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Municipal Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA Municipal Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's management. Our responsibility is to express an opinion on these financial statements based on audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
38
Federal Income Tax Information (Unaudited) – BofA Municipal Reserves
For the fiscal year ended August 31, 2012, 87.51% of the distributions from net investment income of the Fund qualifies as exempt interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
39
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
40
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
41
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
42
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Municipal Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
45
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Municipal Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-MNR-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA New York Tax-Exempt Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 7 | ||||||
Statement of Operations | 9 | ||||||
Statement of Changes in Net Assets | 10 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 16 | ||||||
Report of Independent Registered Public Accounting Firm | 23 | ||||||
Federal Income Tax Information | 24 | ||||||
Fund Governance | 25 | ||||||
Important Information About This Report | 29 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA New York Tax-Exempt Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.40 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,023.93 | 1.21 | 1.22 | 0.24 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.83 | 1.31 | 1.32 | 0.26 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.83 | 1.31 | 1.32 | 0.26 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA New York Tax-Exempt Reserves
August 31, 2012
Municipal Bonds – 87.4%
Par ($) | Value ($) | ||||||||||
New Jersey – 1.7% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 1992, LOC: BNP Paribas 0.600% 09/04/12 | 6,090,000 | 6,090,000 | |||||||||
New Jersey Total | 6,090,000 | ||||||||||
New York – 85.7% | |||||||||||
NY Albany Industrial Development Agency | |||||||||||
Albany College of Pharmacy, Series 2004 B, LOC: TD Bank N.A. 0.160% 12/01/34 (09/06/12) (a)(b) | 6,855,000 | 6,855,000 | |||||||||
Albany Medical Center Hospital, Series 2006 A, LOC: RBS Citizens N.A. 0.240% 05/01/35 (09/06/12) (a)(b) | 4,535,000 | 4,535,000 | |||||||||
Teresian House Nursing Home, Series 2007 A, LOC: RBS Citizens N.A. 0.270% 07/01/16 (09/06/12) (a)(b) | 2,075,000 | 2,075,000 | |||||||||
NY Amherst Development Corp. | |||||||||||
Asbury Pointe, Inc., Series 2011 A, LOC: Manufacturers & Traders 0.190% 02/01/35 (09/06/12) (a)(b) | 3,895,000 | 3,895,000 | |||||||||
NY Amherst | |||||||||||
Series 2012 A, 1.000% 07/18/13 | 4,000,000 | 4,024,443 | |||||||||
NY Bank of New York Municipal Certificates Trust | |||||||||||
Series 2007, LOC: Bank of New York 0.270% 02/15/36 (11/15/12) (a)(b) | 17,150,000 | 17,150,000 | |||||||||
NY BB&T Municipal Trust | |||||||||||
New York Dormitory Authority, Trustees of Columbia University, Series 2008 18, LIQ FAC: Branch Banking & Trust 0.170% 01/01/16 (09/06/12) (a)(b) | 6,000,000 | 6,000,000 |
Par ($) | Value ($) | ||||||||||
NY Clipper Tax-Exempt Certificate Trust | |||||||||||
New York Dormitory Authority, Series 2007, LIQ FAC: State Street Bank & Trust Co. 0.200% 11/15/26 (09/06/12) (a)(b) | 15,125,000 | 15,125,000 | |||||||||
NY Dormitory Authority | |||||||||||
Catholic Health System: Series 2006 C, LOC: HSBC Bank USA N.A. 0.210% 07/01/22 (09/06/12) (a)(b) | 4,400,000 | 4,400,000 | |||||||||
Series 2008, LOC: HSBC Bank USA N.A. 0.210% 07/01/34 (09/06/12) (a)(b) | 7,345,000 | 7,345,000 | |||||||||
Le Moyne College, Series 2009, LOC: TD Bank N.A. 0.160% 01/01/39 (09/06/12) (a)(b) | 3,780,000 | 3,780,000 | |||||||||
Mental Health Services, Series 2003 D-2H, LOC: Royal Bank of Canada 0.150% 02/15/31 (09/06/12) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
Pratt Institute, Series 2009 B, LOC: TD Bank N.A. 0.160% 07/01/34 (09/06/12) (a)(b) | 8,990,000 | 8,990,000 | |||||||||
NY Dutchess County Industrial Development Agency | |||||||||||
Trinity-Pawling School Corp., Series 2002, LOC: PNC Bank N.A. 0.170% 10/01/32 (09/06/12) (a)(b) | 2,650,000 | 2,650,000 | |||||||||
NY Eclipse Funding Trust | |||||||||||
Metropolitan Transportation Authority, Series 2006, LOC: U.S. Bank N.A. 0.170% 11/15/13 (09/06/12) (a)(b) | 2,500,000 | 2,500,000 | |||||||||
NY Erie County Industrial Development Agency | |||||||||||
Series 2012, DPCE: State Aid Withholding 1.000% 05/01/13 | 5,455,000 | 5,479,896 |
See Accompanying Notes to Financial Statements.
2
BofA New York Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
NY Housing Finance Agency | |||||||||||
Ann/Nassau Realty LLC, 111 Nassau St., Series 2011 A, LOC: Landesbank Hessen-Thüringen 0.200% 11/01/44 (09/04/12) (a)(b) | 1,140,000 | 1,140,000 | |||||||||
L&M 93rd Street LLC, 250 West 93rd St., Series 2005 A, AMT, LOC: Landesbank Hessen-Thüringen 0.350% 11/01/38 (09/05/12) (a)(b) | 4,750,000 | 4,750,000 | |||||||||
Midtown West B LLC: 505 West 37th St., Series 2008 A, AMT, LOC: Landesbank Hessen-Thüringen 0.280% 05/01/42 (09/05/12) (a)(b) | 8,055,000 | 8,055,000 | |||||||||
Series 2009 B, LOC: Landesbank Hessen-Thüringen 0.280% 05/01/42 (09/05/12) (a)(b) | 6,800,000 | 6,800,000 | |||||||||
NY JPMorgan Chase Putters/Drivers Trust | |||||||||||
New York State Thruway Authority, Series 2009 3600Z, LIQ FAC: JPMorgan Chase Bank 0.320% 01/01/16 (09/06/12) (a)(b)(c) | 9,245,000 | 9,245,000 | |||||||||
Metropolitan Transportation Authority, Series 2012 4099, LIQ FAC: JPMorgan Chase Bank 0.240% 11/15/15 (09/04/12) (a)(b)(c) | 9,260,000 | 9,260,000 | |||||||||
New York, NY, Series 2012 4237, LIQ FAC: Deutsche Bank A.G. 0.210% 04/01/20 (09/06/12) (a)(b)(c) | 3,575,000 | 3,575,000 | |||||||||
NY Liberty Development Corp. | |||||||||||
3 World Trade Center LLC, Series 2010 A-2, LOC: JPMorgan Chase Bank 0.210% 12/01/50 (09/06/12) (a)(b) | 1,490,000 | 1,490,000 | |||||||||
NY Liverpool Central School District | |||||||||||
New York State Aid Intercept Program, Series 2011, 1.500% 10/05/12 | 2,432,140 | 2,434,002 |
Par ($) | Value ($) | ||||||||||
NY Livingston County Industrial Development Agency | |||||||||||
Red Jacket/Nicholas, Series 2007 A, LOC: HSBC Bank USA N.A. 0.210% 07/01/19 (09/06/12) (a)(b) | 1,647,000 | 1,647,000 | |||||||||
NY Local Government Assistance Corp. | |||||||||||
Series 2008 B-7V, SPA: JPMorgan Chase Bank 0.170% 04/01/20 (09/05/12) (a)(b) | 1,500,000 | 1,500,000 | |||||||||
NY Lockport City School District | |||||||||||
Series 2012, 2.000% 08/01/13 | 1,214,287 | 1,231,779 | |||||||||
NY Monroe County Industrial Development Agency | |||||||||||
Association for the Blind, Series 2008, LOC: JPMorgan Chase Bank 0.180% 02/01/38 (09/06/12) (a)(b) | 4,240,000 | 4,240,000 | |||||||||
Lagrange Associates, Series 1996 A, AMT, LOC: M&T Bank 0.350% 12/01/16 (09/06/12) (a)(b) | 755,000 | 755,000 | |||||||||
St. Ann's Home for the Aged, Series 2000, LOC: HSBC Bank USA N.A. 0.140% 07/01/30 (09/05/12) (a)(b) | 8,825,000 | 8,825,000 | |||||||||
NY New Rochelle | |||||||||||
Series 2012, 1.500% 03/08/13 | 4,561,000 | 4,583,219 | |||||||||
NY New York City Health & Hospital Corp. | |||||||||||
Series 2008 B, Insured: Government of Corp., LOC: TD Bank N.A. 0.170% 02/15/31 (09/05/12) (a)(b) | 7,000,000 | 7,000,000 | |||||||||
NY New York City Housing Development Corp. | |||||||||||
RBNB 20 Owner LLC, Series 2006 A, LOC: Landesbank Hessen-Thüringen 0.180% 06/01/39 (09/05/12) (a)(b) | 1,300,000 | 1,300,000 |
See Accompanying Notes to Financial Statements.
3
BofA New York Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
RBNB Wall Street Owner, Series 2005 A, LOC: Landesbank Hessen-Thüringen 0.180% 12/01/36 (09/05/12) (a)(b) | 6,100,000 | 6,100,000 | |||||||||
Series 2008 H2B, AMT, 0.320% 05/01/13 | 4,500,000 | 4,500,000 | |||||||||
Series 2012 C, 0.270% 05/01/45 (02/01/13) (b)(d) | 5,000,000 | 5,000,000 | |||||||||
NY New York City Industrial Development Agency | |||||||||||
Grace Church School, Series 2006, LOC: M&T Bank 0.250% 06/01/36 (09/06/12) (a)(b) | 5,580,000 | 5,580,000 | |||||||||
The Hewitt School, Series 2002, LOC: TD Bank N.A. 0.250% 12/01/34 (09/06/12) (a)(b) | 3,745,000 | 3,745,000 | |||||||||
NY New York City Municipal Water Finance Authority | |||||||||||
Series 2005 AA-1, 0.180% 06/15/32 (09/04/12) (b)(d) | 1,000,000 | 1,000,000 | |||||||||
NY New York City Transitional Finance Authority Future Tax Secured Revenue | |||||||||||
Series 1998 A, Pre-refunded 11/15/12, 5.375% 11/15/21 | 1,050,000 | 1,060,959 | |||||||||
Series 1998 A-2, SPA: Bank of Nova Scotia 0.160% 11/15/27 (09/05/12) (a)(b) | 3,700,000 | 3,700,000 | |||||||||
Series 2002 1, LIQ FAC: Landesbank Hessen-Thüringen 0.210% 11/01/22 (09/05/12) (a)(b) | 1,935,000 | 1,935,000 | |||||||||
NY New York City | |||||||||||
Series 1993 E4, LOC: BNP Paribas 0.190% 08/01/22 (09/04/12) (a)(b) | 2,400,000 | 2,400,000 | |||||||||
Series 2006 I-4, LOC: Bank of New York 0.200% 04/01/36 (09/05/12) (a)(b) | 1,000,000 | 1,000,000 |
Par ($) | Value ($) | ||||||||||
NY North Hempstead | |||||||||||
Series 2011, 1.500% 12/14/12 | 4,150,000 | 4,163,504 | |||||||||
NY Port Authority of New York & New Jersey | |||||||||||
Series 2011, AMT, Insured: Government of Authority 3.000% 09/15/12 | 1,000,000 | 1,000,970 | |||||||||
NY Putnam County Industrial Development Agency | |||||||||||
United Cerebral Palsy of Putnam, Series 2005 B, LOC: TD Bank N.A. 0.160% 12/01/30 (09/06/12) (a)(b) | 3,600,000 | 3,600,000 | |||||||||
NY Riverhead Industrial Development Agency | |||||||||||
Series 2007 LOC: M&T Bank 0.200% 07/01/32 (09/06/12) (a)(b) | 10,005,000 | 10,005,000 | |||||||||
NY Rochester | |||||||||||
Series 2012 I, 1.000% 08/15/13 | 5,128,000 | 5,160,171 | |||||||||
Series 2012, 1.000% 08/14/13 | 8,672,000 | 8,729,455 | |||||||||
NY Saratoga County Industrial Development Agency | |||||||||||
Saratoga Hospital, Series 2007 A, LOC: HSBC Bank PLC 0.210% 12/01/32 (09/06/12) (a)(b) | 11,415,000 | 11,415,000 | |||||||||
NY Suffolk County | |||||||||||
Series 2011, 1.000% 10/26/12 | 5,126,000 | 5,129,754 | |||||||||
NY Syracuse Industrial Development Agency | |||||||||||
Crouse Health Hospital, Series 2007 B, LOC: HSBC Bank USA N.A. 0.210% 01/01/23 (09/05/12) (a)(b) | 2,090,000 | 2,090,000 | |||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2003 B-1, Insured: Government of Authority, LOC: California Public Employees Retirement System 0.150% 01/01/33 (09/05/12) (a)(b) | 16,000,000 | 16,000,000 |
See Accompanying Notes to Financial Statements.
4
BofA New York Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Series 2007, SPA: JPMorgan Chase Bank 0.380% 01/01/19 (09/05/12) (a)(b) | 13,800,000 | 13,800,000 | |||||||||
NY Ulster County | |||||||||||
Series 2012, 0.500% 12/07/12 | 13,800,000 | 13,806,876 | |||||||||
NY Warwick Valley Central School District | |||||||||||
Series 2012, 1.000% 06/28/13 | 4,000,000 | 4,022,919 | |||||||||
NY Westchester County Industrial Development Agency | |||||||||||
Community Housing Innovations, Series 2001, LOC: M&T Bank 0.240% 08/01/26 (09/06/12) (a)(b) | 2,340,000 | 2,340,000 | |||||||||
New York Total | 310,919,947 | ||||||||||
Total Municipal Bonds (cost of $317,009,947) | 317,009,947 | ||||||||||
Closed-End Investment Companies – 11.4% | |||||||||||
New York – 11.4% | |||||||||||
NY Nuveen Performance Plus Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Deutsche Bank A.G. 0.280% 03/01/40 (09/06/12) (a)(b)(c) | 14,500,000 | 14,500,000 | |||||||||
NY Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIC FAQ: Citibank N.A. 0.270% 12/01/40 (09/06/12) (a)(b)(c) | 10,000,000 | 10,000,000 |
Par ($) | Value ($) | ||||||||||
NY Nuveen Select Quality Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.270% 08/01/40 (09/06/12) (a)(b)(c) | 16,800,000 | 16,800,000 | |||||||||
New York Total | 41,300,000 | ||||||||||
Total Closed-End Investment Companies (cost of $41,300,000) | 41,300,000 | ||||||||||
Total Investments – 98.8% (cost of $358,309,947) (e) | 358,309,947 | ||||||||||
Other Assets & Liabilities, Net – 1.2% | 4,228,413 | ||||||||||
Net Assets – 100.0% | 362,538,360 |
Notes to Investment Portfolio:
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(b) Parenthetical date represents the effective maturity date for the security.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $63,380,000 or 17.5% of net assets for the Fund.
(d) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(e) Cost for federal income tax purposes is $358,309,947.
See Accompanying Notes to Financial Statements.
5
BofA New York Tax-Exempt Reserves
August 31, 2012
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Municipal Bonds | $ | — | $ | 317,009,947 | $ | — | $ | 317,009,947 | |||||||||||
Total Closed-End Investment Companies | — | 41,300,000 | — | 41,300,000 | |||||||||||||||
Total Investments | $ | — | $ | 358,309,947 | $ | — | $ | 358,309,947 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 87.4 | ||||||
Closed-End Investment Companies | 11.4 | ||||||
98.8 | |||||||
Other Assets & Liabilities, Net | 1.2 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities – BofA New York Tax-Exempt Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 358,309,947 | |||||||||
Cash | 358 | ||||||||||
Receivable for: | |||||||||||
Investments sold | 4,080,016 | ||||||||||
Interest | 311,910 | ||||||||||
Expense reimbursement due from investment advisor | 6,578 | ||||||||||
Trustees' deferred compensation plan | 378 | ||||||||||
Prepaid expenses | 8,968 | ||||||||||
Total Assets | 362,718,155 | ||||||||||
Liabilities | Payable for: | ||||||||||
Distributions | 3,154 | ||||||||||
Investment advisory fee | 50,449 | ||||||||||
Administration fee | 5,241 | ||||||||||
Pricing and bookkeeping fees | 10,713 | ||||||||||
Transfer agent fee | 3,834 | ||||||||||
Trustees' fees | 2,851 | ||||||||||
Audit fee | 51,469 | ||||||||||
Legal fee | 31,761 | ||||||||||
Custody fee | 2,737 | ||||||||||
Shareholder administration fee | 7,694 | ||||||||||
Chief compliance officer expenses | 1,286 | ||||||||||
Trustees' deferred compensation plan | 378 | ||||||||||
Other liabilities | 8,228 | ||||||||||
Total Liabilities | 179,795 | ||||||||||
Net Assets | 362,538,360 | ||||||||||
Net Assets Consist of | Paid-in capital | 362,481,192 | |||||||||
Undistributed net investment income | 50,639 | ||||||||||
Accumulated net realized gain | 6,529 | ||||||||||
Net Assets | 362,538,360 |
See Accompanying Notes to Financial Statements.
7
Statement of Assets and Liabilities (continued) – BofA New York Tax-Exempt Reserves
August 31, 2012
Capital Class Shares (1) | Net assets | $ | 101,154,045 | ||||||||
Shares outstanding | 101,126,577 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 467,022 | ||||||||
Shares outstanding | 466,895 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares (1) | Net assets | $ | 1,663,240 | ||||||||
Shares outstanding | 1,662,790 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 259,254,053 | ||||||||
Shares outstanding | 259,181,495 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
8
Statement of Operations – BofA New York Tax-Exempt Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 1,095,902 | |||||||||
Expenses | Investment advisory fee | 626,184 | |||||||||
Administration fee | 316,838 | ||||||||||
Distribution fee: | |||||||||||
Class A Shares (1) | 30 | ||||||||||
Investor Class Shares (1) | 966 | ||||||||||
Service fee: | |||||||||||
Class A Shares (1) | 74 | ||||||||||
Investor Class Shares (1) | 2,415 | ||||||||||
Retail A Shares (1) | 3 | ||||||||||
Shareholder administration fee: | |||||||||||
Class A Shares (1) | 30 | ||||||||||
Institutional Class Shares | 310 | ||||||||||
Trust Class Shares | 303,198 | ||||||||||
Transfer agent fee | 29,685 | ||||||||||
Pricing and bookkeeping fees | 118,004 | ||||||||||
Trustees' fees | 51,087 | ||||||||||
Custody fee | 12,192 | ||||||||||
Legal fees | 140,146 | ||||||||||
Chief compliance officer expenses | 7,241 | ||||||||||
Other expenses | 81,539 | ||||||||||
Total Expenses | 1,689,942 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (547,553 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Class A Shares (1) | (104 | ) | |||||||||
Institutional Class Shares | (22 | ) | |||||||||
Investor Class Shares (1) | (2,793 | ) | |||||||||
Trust Class Shares | (118,368 | ) | |||||||||
Expense reductions | (33 | ) | |||||||||
Net Expenses | 1,021,069 | ||||||||||
Net Investment Income | 74,833 | ||||||||||
Net realized gain on investments | 6,530 | ||||||||||
Net Increase Resulting from Operations | 81,363 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets – BofA New York Tax-Exempt Reserves
Increase (Decrease) in Net Assets | Year Ended August 31, 2012 ($) | Year Ended August 31, 2011 ($) | |||||||||||||
Operations | Net investment income | 74,833 | 326,638 | ||||||||||||
Net realized gain on investments | 6,530 | 62,767 | |||||||||||||
Net increase resulting from operations | 81,363 | 389,405 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Capital Class Shares (1) | (109,828 | ) | (142,516 | ) | |||||||||||
G-Trust Shares (1) | (1,254 | ) | (16,326 | ) | |||||||||||
Institutional Class Shares | (398 | ) | (8,575 | ) | |||||||||||
Investor Class Shares (1) | (245 | ) | — | ||||||||||||
Retail A Shares (1) | — | (23 | ) | ||||||||||||
Trust Class Shares | (118,833 | ) | (158,996 | ) | |||||||||||
From net realized gains: | |||||||||||||||
Capital Class Shares (1) | (15,684 | ) | — | ||||||||||||
Institutional Class Shares | (73 | ) | — | ||||||||||||
Investor Class Shares (1) | (108 | ) | — | ||||||||||||
Trust Class Shares | (46,903 | ) | — | ||||||||||||
Total distributions to shareholders | (293,326 | ) | (326,436 | ) | |||||||||||
Net Capital Stock Transactions | (33,160,171 | ) | (246,813,088 | ) | |||||||||||
Total decrease in net assets | (33,372,134 | ) | (246,750,119 | ) | |||||||||||
Net Assets | Beginning of period | 395,910,494 | 642,660,613 | ||||||||||||
End of period | 362,538,360 | 395,910,494 | |||||||||||||
Undistributed net investment income at end of period | 50,639 | 206,364 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
10
Statement of Changes in Net Assets – BofA New York Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares (1) | |||||||||||||||||||
Subscriptions | — | — | 334,508 | 334,508 | |||||||||||||||
Redemptions | — | — | (663,770 | ) | (663,770 | ) | |||||||||||||
Net decrease | — | — | (329,262 | ) | (329,262 | ) | |||||||||||||
Capital Class Shares (1) | |||||||||||||||||||
Subscriptions | 180,443,009 | 180,443,009 | 217,591,038 | 217,591,038 | |||||||||||||||
Conversion | 15,127,028 | 15,127,028 | — | — | |||||||||||||||
Distributions reinvested | 18 | 18 | 4,329 | 4,329 | |||||||||||||||
Redemptions | (180,197,457 | ) | (180,197,457 | ) | (254,935,201 | ) | (254,935,201 | ) | |||||||||||
Net increase (decrease) | 15,372,598 | 15,372,598 | (37,339,834 | ) | (37,339,834 | ) | |||||||||||||
Class A Shares (1) | |||||||||||||||||||
Subscriptions | — | — | 3,460,412 | 3,460,412 | |||||||||||||||
Conversion | (356,443 | ) | (356,443 | ) | — | — | |||||||||||||
Redemptions | (7,900 | ) | (7,900 | ) | (24,139,856 | ) | (24,139,856 | ) | |||||||||||
Net decrease | (364,343 | ) | (364,343 | ) | (20,679,444 | ) | (20,679,444 | ) | |||||||||||
Daily Class Shares (1) | |||||||||||||||||||
Redemptions | — | — | (10,493 | ) | (10,493 | ) | |||||||||||||
Net decrease | — | — | (10,493 | ) | (10,493 | ) | |||||||||||||
G-Trust Shares (1) | |||||||||||||||||||
Subscriptions | 1,597,101 | 1,597,101 | 22,403,429 | 22,403,429 | |||||||||||||||
Conversion | (15,095,973 | ) | (15,095,973 | ) | — | — | |||||||||||||
Redemptions | (1,134,493 | ) | (1,134,494 | ) | (19,281,879 | ) | (19,281,879 | ) | |||||||||||
Net increase (decrease) | (14,633,365 | ) | (14,633,366 | ) | 3,121,550 | 3,121,550 | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 4,059,647 | 4,059,647 | 50,999,904 | 50,999,904 | |||||||||||||||
Distributions reinvested | 451 | 451 | 7,299 | 7,299 | |||||||||||||||
Redemptions | (4,473,187 | ) | (4,473,187 | ) | (145,184,422 | ) | (145,184,422 | ) | |||||||||||
Net decrease | (413,089 | ) | (413,089 | ) | (94,177,219 | ) | (94,177,219 | ) | |||||||||||
Investor Class Shares (1) | |||||||||||||||||||
Subscriptions | 5,171,519 | 5,171,519 | — | — | |||||||||||||||
Conversion | 356,443 | 356,443 | — | — | |||||||||||||||
Distributions reinvested | 181 | 181 | — | — | |||||||||||||||
Redemptions | (3,865,353 | ) | (3,865,353 | ) | — | — | |||||||||||||
Net increase | 1,662,790 | 1,662,790 | — | — | |||||||||||||||
Retail A Shares (1) | |||||||||||||||||||
Distributions reinvested | — | — | 23 | 23 | |||||||||||||||
Conversion | (31,055 | ) | (31,055 | ) | — | — | |||||||||||||
Redemptions | — | — | (13,231 | ) | (13,231 | ) | |||||||||||||
Net decrease | (31,055 | ) | (31,055 | ) | (13,208 | ) | (13,208 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 351,508,159 | 351,508,159 | 613,003,970 | 613,003,970 | |||||||||||||||
Distributions reinvested | 6,114 | 6,114 | 6,914 | 6,914 | |||||||||||||||
Redemptions | (386,267,979 | ) | (386,267,979 | ) | (710,396,062 | ) | (710,396,062 | ) | |||||||||||
Net decrease | (34,753,706 | ) | (34,753,706 | ) | (97,385,178 | ) | (97,385,178 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
11
Financial Highlights – BofA New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | 0.0012 | 0.0104 | 0.0245 | ||||||||||||||||||
Net realized gain on investments | — | (e) | — | — | — | — | |||||||||||||||||
Total from investment operations | 0.001 | 0.001 | 0.0012 | 0.0104 | 0.0245 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.0012 | ) | (0.0104 | ) | (0.0245 | ) | |||||||||||||
From net realized gains | — | (e) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | (0.001 | ) | (0.001 | ) | (0.0012 | ) | (0.0104 | ) | (0.0245 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.12 | % | 0.14 | % | 0.12 | % | 1.04 | % | 2.48 | %(h) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.20 | % | 0.20 | % | 0.20 | % | 0.24 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.13 | % | 0.15 | % | 0.09 | % | 0.07 | % | 0.08 | % | |||||||||||||
Net investment income (i) | 0.06 | % | 0.14 | % | 0.11 | % | 1.15 | % | 2.18 | %(h) | |||||||||||||
Net assets, end of period (000s) | $ | 101,154 | $ | 85,820 | $ | 123,141 | $ | 133,680 | $ | 372,166 |
(a) On October 1, 2011, G-Trust shares and Retail A shares were converted into Capital Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia New York Tax-Exempt Reserves was renamed BofA New York Tax-Exempt Reserves.
(d) On December 31, 2009, Columbia New York Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia New York Tax-Exempt Reserves.
(e) Rounds to less than $0.001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | 0.0008 | 0.0100 | 0.0241 | ||||||||||||||||||
Net realized gain on investments | — | (d) | — | — | — | — | |||||||||||||||||
Total from investment operations | 0.001 | 0.001 | 0.0008 | 0.0100 | 0.0241 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.0008 | ) | (0.0100 | ) | (0.0241 | ) | |||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | (0.001 | ) | (0.001 | ) | (0.0008 | ) | (0.0100 | ) | (0.0241 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.08 | % | 0.10 | % | 0.08 | % | 1.01 | % | 2.44 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (g) | 0.24 | % | 0.24 | % | 0.24 | % | 0.28 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.13 | % | 0.15 | % | 0.09 | % | 0.07 | % | 0.08 | % | |||||||||||||
Net investment income (g) | 0.03 | % | 0.09 | % | 0.07 | % | 1.03 | % | 2.44 | % | |||||||||||||
Net assets, end of period (000s) | $ | 467 | $ | 881 | $ | 95,095 | $ | 119,388 | $ | 181,320 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia New York Tax-Exempt Reserves was renamed BofA New York Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia New York Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia New York Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | 0.0065 | 0.0200 | ||||||||||||||||||
Net realized gain on investments | — | (e) | — | — | — | — | |||||||||||||||||
Total from investment operations | — | (e) | — | — | 0.0065 | 0.0200 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | — | — | (0.0065 | ) | (0.0200 | ) | |||||||||||||||
From net realized gains | — | (e) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (e) | — | — | (0.0065 | ) | (0.0200 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.05 | % | 0.00 | % | 0.00 | % | 0.65 | % | 2.02 | %(h) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.26 | % | 0.31 | % | 0.32 | % | 0.65 | % | 0.65 | % | |||||||||||||
Waiver/Reimbursement | 0.42 | % | 0.49 | % | 0.42 | % | 0.11 | % | 0.08 | % | |||||||||||||
Net investment income (i) | — | — | — | 0.72 | % | 1.82 | %(h) | ||||||||||||||||
Net assets, end of period (000s) | $ | 1,663 | $ | 365 | $ | 21,052 | $ | 34,694 | $ | 102,951 |
(a) On October 1, 2011, the Investor Class shares of the Fund commenced operations and the Class A shares of the Fund converted into the Investor Class shares of the Fund. The financial information of the Fund's Investor Class shares prior to this conversion is that of the Class A shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia New York Tax-Exempt Reserves was renamed BofA New York Tax-Exempt Reserves.
(d) On December 31, 2009, Columbia New York Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia New York Tax-Exempt Reserves.
(e) Rounds to less than $0.001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
14
Financial Highlights – BofA New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | — | (d) | 0.0003 | 0.0094 | 0.0235 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | — | — | — | |||||||||||||||||
Total from investment operations | 0.001 | — | (d) | 0.0003 | 0.0094 | 0.0235 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | — | (d) | (0.0003 | ) | (0.0094 | ) | (0.0235 | ) | |||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | (0.001 | ) | — | (d) | (0.0003 | ) | (0.0094 | ) | (0.0235 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.05 | % | 0.05 | % | 0.03 | % | 0.95 | % | 2.38 | %(g) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.26 | % | 0.29 | % | 0.29 | % | 0.34 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.17 | % | 0.16 | % | 0.10 | % | 0.07 | % | 0.08 | % | |||||||||||||
Net investment income (h) | — | %(i) | 0.05 | % | 0.03 | % | 0.93 | % | 1.72 | %(g) | |||||||||||||
Net assets, end of period (000s) | $ | 259,254 | $ | 294,169 | $ | 391,472 | $ | 645,197 | $ | 730,700 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia New York Tax-Exempt Reserves was renamed BofA New York Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia New York Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia New York Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Notes to Financial Statements – BofA New York Tax-Exempt Reserves
August 31, 2012
Note 1. Organization
BofA New York Tax-Exempt Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a non-diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income exempt from federal income tax and New York individual income tax, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers four classes of shares: Capital Class, Institutional Class, Investor Class and Trust Class shares. Each class of shares is offered continuously at net asset value. On August 18, 2011 Adviser Class and Daily Class shares were liquidated. The following changes to the Fund's share classes occurred on October 1, 2011: Investor Class shares commenced operations; Class A shares were converted into Investor Class shares; and G-Trust shares and Retail A shares were converted into Capital Class shares.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
16
BofA New York Tax-Exempt Reserves, August 31, 2012
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other
amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
17
BofA New York Tax-Exempt Reserves, August 31, 2012
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from | 2012 | 2011 | |||||||||
Tax-Exempt Income | $ | 230,558 | $ | 309,109 | |||||||
Ordinary Income* | — | 17,327 | |||||||||
Long-Term Capital Gains | 62,768 | — |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | 53,793 | $ | 6,529 | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the
position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA Advisors, LLC ("BofA"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
18
BofA New York Tax-Exempt Reserves, August 31, 2012
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Investor Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act, permits the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of Investor Class shares.
The Trust also has adopted a shareholder servicing plan ("Servicing Plan") for the Investor Class shares of the Fund. The Servicing Plan permits the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to this plan is paid to affiliates of BofA and the Distributor.
19
BofA New York Tax-Exempt Reserves, August 31, 2012
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Class A Shares* | 0.10 | % | 0.10 | % | |||||||
Investor Class Shares | 0.10 | % | 0.10 | % | |||||||
Servicing Plans: | |||||||||||
Class A Shares* | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % | |||||||
Retail A Shares** | 0.10 | % | 0.10 | % |
* On October 1, 2011, the Fund's Class A shares were converted into the Fund's Investor Class shares.
** On October 1, 2011, the Fund's Retail A shares were converted into the Fund's Capital Class shares, which has not adopted a Servicing Plan for such share class.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Class A Shares* | 0.10 | % | 0.10 | % | |||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
* On October 1, 2011, the Fund's Class A shares were converted into the Fund's Investor Class shares, which has not adopted an Administration Plan for such share class.
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012, so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense limitation in effect at the time the expenses to be recovered were incurred.
20
BofA New York Tax-Exempt Reserves, August 31, 2012
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 08/31/12 | |||||||||||||||
$ | 547,553 | $ | 671,629 | $ | 695,321 | $ | 1,914,503 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $33 for the Fund.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
21
BofA New York Tax-Exempt Reserves, August 31, 2012
Note 7. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 8. Significant Risks and Contingencies
Non-Diversification Risk
The Fund is non-diversified, which generally means that it may invest a greater percentage of the total assets in the securities of fewer issuers than a "diversified" fund. This increases the risk that a change in the value of any one investment held by a Fund could affect the value of shares of the Fund more than it would affect the value of shares of a diversified fund holding a greater number of investments. Accordingly, the Fund's value will likely be more volitile than the value of more diversified funds. The Fund may not operate as a non-diversified fund at all times.
Geographic Concentration Risk
The Fund invests primarily in debt obligations issued by the State of New York, and its political subdivisions, agencies and public authorities, and other qualified issuers that may be located outside of New York. The Fund is more susceptible to economic and political factors adversely affecting issuers of this state's municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the
"SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
22
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA New York Tax-Exempt Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA New York Tax-Exempt Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
23
Federal Income Tax Information (Unaudited) – BofA New York Tax-Exempt Reserves
For the fiscal year ended August 31, 2012, 100.00% of the distributions from net investment income of the Fund qualifies as exempt interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
24
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
25
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Age, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
26
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
27
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA New York Tax-Exempt Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
29
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA New York Tax-Exempt Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-NYTE-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA Tax-Exempt Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 25 | ||||||
Statement of Operations | 27 | ||||||
Statement of Changes in Net Assets | 28 | ||||||
Financial Highlights | 31 | ||||||
Notes to Financial Statements | 39 | ||||||
Report of Independent Registered Public Accounting Firm | 46 | ||||||
Federal Income Tax Information | 47 | ||||||
Fund Governance | 48 | ||||||
Important Information About This Report | 53 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Tax-Exempt Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.03 | 1.11 | 1.12 | 0.22 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.03 | 1.11 | 1.12 | 0.22 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.13 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.03 | 1.11 | 1.12 | 0.22 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.03 | 1.11 | 1.12 | 0.22 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.03 | 1.11 | 1.12 | 0.22 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.03 | 1.11 | 1.12 | 0.22 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds – 100.6%
Par ($) | Value ($) | ||||||||||
Alabama – 0.1% | |||||||||||
AL Special Care Facilities Financing Authority | |||||||||||
Altapointe Health Systems, Mental Health Center, Inc., Series 2001, LOC: Wells Fargo Bank N.A. 0.320% 07/01/21 (09/07/12) (a)(b) | 2,150,000 | 2,150,000 | |||||||||
AL State | |||||||||||
Capital Improvement, Series 2010 D, 4.000% 06/01/13 | 2,005,000 | 2,059,833 | |||||||||
Alabama Total | 4,209,833 | ||||||||||
Arizona – 0.8% | |||||||||||
AZ Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2012-1082, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.240% 03/01/29 (09/06/12) (a)(b)(c) | 12,245,000 | 12,245,000 | |||||||||
AZ Health Facilities Authority | |||||||||||
Phoenix Children's Hospital, Series 2007-008, GTY AGMT: BNP Paribas 0.470% 02/01/42 (09/06/12) (a)(b) | 12,385,000 | 12,385,000 | |||||||||
AZ Phoenix Industrial Development Authority | |||||||||||
Pilgrim Rest Foundation, Inc., Series 2005 A, LOC: JPMorgan Chase Bank 0.230% 10/01/30 (09/06/12) (a)(b) | 6,725,000 | 6,725,000 | |||||||||
AZ Tempe Industrial Development Authority | |||||||||||
Centers for Habilitation, Series 2001, LOC: Wells Fargo Bank N.A. 0.320% 12/01/21 (09/06/12) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
Arizona Total | 33,055,000 |
Par ($) | Value ($) | ||||||||||
Arkansas – 0.2% | |||||||||||
AR Fort Smith | |||||||||||
Mitsubishi Power System of America, Series 2010, LOC: Bank Tokyo-Mitsubishi UFJ 0.170% 10/01/40 (09/06/12) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
Arkansas Total | 8,000,000 | ||||||||||
California – 12.5% | |||||||||||
CA Deutsche Bank Spears/Lifers Trust | |||||||||||
Los Angeles County Housing Authority, Series 2011-1008, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.260% 10/01/31 (09/06/12) (a)(b)(c) | 19,120,000 | 19,120,000 | |||||||||
California State Health Facility - Dignity Health, Series 2012-1083, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.240% 03/01/28 (09/06/12) (a)(b)(c) | 13,000,000 | 13,000,000 | |||||||||
CA East Bay Municipal Utility District | |||||||||||
East Bay Mud: Series 2009 A1, 0.170% 06/01/26 (09/06/12) (a)(d) | 37,385,000 | 37,385,000 | |||||||||
Series 2009 A2, 0.180% 06/01/26 (09/06/12) (a)(d) | 39,325,000 | 39,325,000 | |||||||||
CA Health Facilities Financing Authority | |||||||||||
Stanford Hospital, Series 2010-3193, LIQ FAC: Deutsche Bank AG 0.200% 11/15/36 (09/06/12) (a)(b)(c) | 6,000,000 | 6,000,000 | |||||||||
CA Irvine Ranch Water District | |||||||||||
Series 2011 A-1, 0.160% 10/01/37 (09/06/12) (a)(d) | 18,075,000 | 18,075,000 | |||||||||
Series 2011 A-2, 0.160% 10/01/37 (09/06/12) (a)(d) | 26,085,000 | 26,085,000 |
See Accompanying Notes to Financial Statements.
2
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
CA Los Angeles County | |||||||||||
Tax & Revenue Anticipation Notes, Series 2012 C, 2.000% 06/28/13 | 71,000,000 | 72,047,889 | |||||||||
CA Los Angeles | |||||||||||
Tax & Revenue Anticipation Notes, Series 2012 C, 2.000% 04/25/13 | 44,400,000 | 44,915,581 | |||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2011 A-1, 0.170% 07/01/36 (09/06/12) (a)(d) | 24,440,000 | 24,440,000 | |||||||||
Series 2011 A-3, 0.170% 07/01/36 (09/06/12) (a)(d) | 8,000,000 | 8,000,000 | |||||||||
CA RBC Municipal Products, Inc. Trust | |||||||||||
Kaiser Permanente, Series 2011 E-21, LOC: Royal Bank of Canada 0.210% 10/01/13 (09/06/12) (a)(b)(c) | 29,000,000 | 29,000,000 | |||||||||
Los Angeles County, Series 2011 E-24, LOC: Royal Bank of Canada 0.210% 07/01/31 (09/06/12) (a)(b)(c) | 19,890,000 | 19,890,000 | |||||||||
CA San Diego County School Districts | |||||||||||
Tax & Revenue Anticipation Notes, Series 2012 A, 2.000% 06/28/13 | 20,000,000 | 20,300,166 | |||||||||
CA Statewide Communities Development Authority | |||||||||||
Gas Supply Revenue, Series 2010, SPA: Royal Bank of Canada 0.170% 11/01/40 (09/06/12) (a)(b) | 10,005,000 | 10,005,000 | |||||||||
Kaiser Credit Group, Series 2009 C2, 0.160% 04/01/46 (09/05/12) (a)(d) | 5,855,000 | 5,855,000 | |||||||||
Kaiser Permanente: Series 2008-B, 0.250% 10/10/12 | 30,000,000 | 30,000,000 | |||||||||
Series 2009 B-1, 0.240% 11/09/12 | 18,000,000 | 18,000,000 | |||||||||
Series 2009 B-4, 0.250% 01/18/13 | 15,000,000 | 15,000,000 |
Par ($) | Value ($) | ||||||||||
CA State | |||||||||||
Revenue Anticipation Notes: Series 2012 A-1, 2.500% 05/30/13 | 18,000,000 | 18,289,196 | |||||||||
Series 2012 A-2, 2.500% 06/20/13 | 73,000,000 | 74,204,602 | |||||||||
California Total | 548,937,434 | ||||||||||
Colorado – 2.5% | |||||||||||
CO Denver Urban Renewal Authority | |||||||||||
Series 2008 A-1, LOC: U.S. Bank N.A. 0.180% 12/01/25 (09/06/12) (a)(b) | 14,020,000 | 14,020,000 | |||||||||
Series 2008 A-2, LOC: U.S. Bank N.A. 0.180% 12/01/25 (09/06/12) (a)(b) | 18,615,000 | 18,615,000 | |||||||||
CO Educational & Cultural Facilities Authority | |||||||||||
Daughters of Israel, Inc., National Jewish Federation, Series 2006 B-4, LOC: TD Bank N.A. 0.190% 12/01/35 (09/04/12) (a)(b) | 7,285,000 | 7,285,000 | |||||||||
JFMC Facilities Corp., Series 2009 C-7, LOC: U.S. Bank N.A. 0.190% 03/01/39 (09/04/12) (a)(b) | 11,595,000 | 11,595,000 | |||||||||
Milwaukee Jewish Federation, Inc., National Jewish Federation, Series 2005 C-1, LOC: U.S. Bank N.A. 0.190% 09/01/35 (09/04/12) (a)(b) | 16,000,000 | 16,000,000 | |||||||||
Naropa University, Series 1999, LOC: Wells Fargo Bank N.A. 0.270% 11/01/24 (09/06/12) (a)(b) | 2,955,000 | 2,955,000 | |||||||||
National Jewish Federation: Series 2007 C-4, LOC: U.S. Bank N.A. 0.190% 06/01/37 (09/04/12) (a)(b) | 7,500,000 | 7,500,000 |
See Accompanying Notes to Financial Statements.
3
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Series 2011 F2, LOC: Northern Trust Co. 0.190% 07/01/41 (09/04/12) (a)(b) | 4,660,000 | 4,660,000 | |||||||||
Series 2012 B-5, LOC: TD Bank N.A. 0.190% 01/01/39 (09/04/12) (a)(b) | 9,000,000 | 9,000,000 | |||||||||
Oaks Christian School, Series 2006, LOC: U.S. Bank N.A. 0.190% 05/01/33 (09/04/12) (a)(b) | 7,250,000 | 7,250,000 | |||||||||
CO Health Facilities Authority | |||||||||||
Catholic Health Initiatives, Series 2009 B, 5.000% 07/01/39 (11/08/12) (a)(d) | 5,900,000 | 5,951,722 | |||||||||
Crossroads at Delta, Series 2004 A, LOC: U.S. Bank N.A. 0.160% 11/01/28 (09/06/12) (a)(b) | 3,800,000 | 3,800,000 | |||||||||
CO Jefferson County | |||||||||||
Rocky Mountain Butterfly Consortium, Series 1998, LOC: Wells Fargo Bank N.A. 0.270% 06/01/28 (09/06/12) (a)(b) | 1,395,000 | 1,395,000 | |||||||||
Colorado Total | 110,026,722 | ||||||||||
Connecticut – 2.2% | |||||||||||
CT Berlin | |||||||||||
Series 2012, 1.000% 09/20/12 | 6,426,000 | 6,428,704 | |||||||||
CT Derby | |||||||||||
Series 2012: 1.000% 12/19/12 (e) | 5,000,000 | 5,010,050 | |||||||||
1.500% 09/04/12 | 4,296,000 | 4,296,413 | |||||||||
CT Hartford County Metropolitan District | |||||||||||
Series 2012, 1.000% 12/06/12 | 13,389,000 | 13,418,027 |
Par ($) | Value ($) | ||||||||||
CT Housing Finance Authority | |||||||||||
Series 2011 C1, Insured: Government of Authority, SPA: Barclays Bank PLC 0.160% 05/15/35 (09/06/12) (a)(b) | 1,995,000 | 1,995,000 | |||||||||
CT Manchester | |||||||||||
Series 2012, 1.250% 07/05/13 | 11,108,000 | 11,203,031 | |||||||||
CT New Milford | |||||||||||
Series 2012, 1.000% 07/25/13 | 21,340,000 | 21,494,517 | |||||||||
CT State | |||||||||||
Series 2012 A, 0.160% 04/15/13 (09/06/12) (a)(d) | 11,800,000 | 11,800,000 | |||||||||
CT Trumbull | |||||||||||
State Aid Withholding, Series 2011, 1.000% 09/07/12 | 16,000,000 | 16,001,883 | |||||||||
CT Windsor Locks | |||||||||||
Series 2012, 1.000% 04/04/13 | 6,500,000 | 6,530,919 | |||||||||
Connecticut Total | 98,178,544 | ||||||||||
Delaware – 1.3% | |||||||||||
DE BB&T Municipal Trust | |||||||||||
Series 2008-1007, LOC: Branch Banking & Trust 0.260% 04/10/22 (09/06/12) (a)(b) | 25,005,000 | 25,005,000 | |||||||||
Series 2008-1033, LOC: Branch Banking & Trust 0.260% 06/01/24 (09/06/12) (a)(b) | 7,775,000 | 7,775,000 | |||||||||
DE New Castle County | |||||||||||
CHF-Delaware LLC, University Courtyard Apartments, Series 2005, LOC: PNC Bank N.A. 0.170% 08/01/31 (09/06/12) (a)(b) | 16,950,000 | 16,950,000 |
See Accompanying Notes to Financial Statements.
4
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
DE University of Delaware | |||||||||||
Series 2005, SPA: TD Bank N.A. 0.190% 11/01/35 (09/04/12) (a)(b) | 7,950,000 | 7,950,000 | |||||||||
Delaware Total | 57,680,000 | ||||||||||
District of Columbia – 2.0% | |||||||||||
DC District of Columbia | |||||||||||
Series 2011, 2.000% 09/28/12 | 79,400,000 | 79,500,397 | |||||||||
Thurgood Marshall Center Trust, Series 2002, LOC: Branch Banking & Trust 0.190% 12/01/27 (09/06/12) (a)(b) | 2,595,000 | 2,595,000 | |||||||||
DC JPMorgan Chase Putters/Drivers Trust | |||||||||||
Series 2012-4093, LIQ FAC: JPMorgan Chase Bank 0.200% 12/01/19 (09/04/12) (a)(b)(c) | 5,745,000 | 5,745,000 | |||||||||
District of Columbia Total | 87,840,397 | ||||||||||
Florida – 3.9% | |||||||||||
FL Alachua County Health Facilities Authority | |||||||||||
Oak Hammock at the University of Florida, Series 2002 A, LOC: Bank of Scotland 0.230% 10/01/32 (09/04/12) (a)(b) | 34,065,000 | 34,065,000 | |||||||||
FL BB&T Municipal Trust | |||||||||||
Series 2008-1030, LOC: Branch Banking & Trust 0.260% 07/18/24 (09/06/12) (a)(b) | 15,995,000 | 15,995,000 | |||||||||
FL Broward County Health Facilities Authority | |||||||||||
Henderson Mental Health Center, Series 2004, LOC: Northern Trust Co. 0.170% 07/01/29 (09/05/12) (a)(b) | 1,200,000 | 1,200,000 | |||||||||
FL Deutsche Bank Spears/Lifers Trust | |||||||||||
Palm Coast Florida Utility System Revenue, Series 2008-579, GTY AGMT: Deutsche Bank AG 0.230% 10/01/24 (09/06/12) (a)(b) | 4,470,000 | 4,470,000 |
Par ($) | Value ($) | ||||||||||
FL Eclipse Funding Trust | |||||||||||
Fort Pierce Redevelopment Agency, Series 2006, LOC: U.S. Bank N.A. 0.190% 05/01/31 (09/06/12) (a)(b) | 3,870,000 | 3,870,000 | |||||||||
Miami-Dade County School Board, Series 2007, LOC: U.S. Bank N.A. 0.170% 05/01/32 (09/06/12) (a)(b) | 4,535,000 | 4,535,000 | |||||||||
FL Jacksonville Economic Development Commission | |||||||||||
North Florida Shipyards, Inc., Series 2010, LOC: Branch Banking & Trust 0.160% 09/01/20 (09/06/12) (a)(b) | 3,570,000 | 3,570,000 | |||||||||
FL Jacksonville | |||||||||||
Crowley Liner Services, Series 1983, LOC: Den Norske Bank 0.250% 02/01/14 (09/01/12) (a)(b) | 3,600,000 | 3,600,000 | |||||||||
FL JPMorgan Chase Putters/Drivers Trust | |||||||||||
St. John's, Series 2012-4134, Insured: BHAC, LIQ FAC: JPMorgan Chase Bank 0.210% 10/01/15 (09/06/12) (a)(b)(c) | 13,270,000 | 13,270,000 | |||||||||
FL Miami-Dade County Educational Facilities Authority | |||||||||||
University of Miami, Floaters, Series 2008-2710, GTY AGMT: Wells Fargo Company 0.210% 04/01/38 (09/06/12) (a)(b) | 14,820,000 | 14,820,000 | |||||||||
FL Miami-Dade County Industrial Development Authority | |||||||||||
Dave & Mary Alper Jewish Community, Series 2002, LOC: Northern Trust Co. 0.170% 04/01/32 (09/05/12) (a)(b) | 5,695,000 | 5,695,000 |
See Accompanying Notes to Financial Statements.
5
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
FL Orlando-Orange County Expressway Authority | |||||||||||
Series 2003 C-4, Insured: AGMC, LOC: TD Bank N.A. 0.160% 07/01/25 (09/06/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
Series 2008 B-1, LOC: Bank of Montreal 0.140% 07/01/40 (09/06/12) (a)(b) | 21,025,000 | 21,025,000 | |||||||||
FL Palm Beach County | |||||||||||
Zoological Society of Palm Beach, Series 2001, LOC: Northern Trust Co. 0.170% 05/01/31 (09/06/12) (a)(b) | 6,600,000 | 6,600,000 | |||||||||
FL Pinellas County Health Facilities Authority | |||||||||||
Baycare Health Systems, Series 2009 A-2, LOC: Northern Trust Co. 0.160% 11/01/38 (09/06/12) (a)(b) | 9,025,000 | 9,025,000 | |||||||||
FL Sunshine Governmental Financing Commission | |||||||||||
LOC: JPMorgan Chase Bank 0.300% 09/14/12 | 15,000,000 | 15,000,000 | |||||||||
FL University of Southern Florida Financing Corp. | |||||||||||
Certificates of Participation, Master Lease Program, Series 2005 B-1, LOC: Wells Fargo Bank N.A. 0.180% 07/01/35 (09/05/12) (a)(b) | 4,245,000 | 4,245,000 | |||||||||
Florida Total | 170,985,000 | ||||||||||
Georgia – 4.9% | |||||||||||
GA BB&T Municipal Trust | |||||||||||
Series 2008-1014, LOC: Branch Banking & Trust 0.260% 09/01/23 (09/06/12) (a)(b) | 17,035,000 | 17,035,000 | |||||||||
GA Clipper Tax-Exempt Certificate Trust | |||||||||||
Georgia State, Series 2007, Pre-refunded in U.S. Treasuries, LIQ FAC: State Street Bank & Trust Co. 0.170% 03/01/18 (09/06/12) (a)(b) | 9,995,000 | 9,995,000 |
Par ($) | Value ($) | ||||||||||
GA Fulton County Development Authority | |||||||||||
The Weber School, Series 2006, LOC: Branch Banking & Trust 0.160% 12/01/30 (09/06/12) (a)(b) | 3,190,000 | 3,190,000 | |||||||||
GA Main Street Natural Gas, Inc. | |||||||||||
Series 2010 A, SPA: Royal Bank of Canada 0.180% 08/01/40 (09/06/12) (a)(b) | 84,815,000 | 84,815,000 | |||||||||
GA Municipal Gas Authority | |||||||||||
Gas Portfolio III: Series 2011 O, DPCE: Government of Authority, 2.000% 11/13/12 | 10,500,000 | 10,532,949 | |||||||||
Series 2012 P, 2.000% 05/22/13 | 16,000,000 | 16,193,026 | |||||||||
GA Private Colleges & Universities Authority | |||||||||||
Emory University, Series 2005 B-1, 0.160% 09/01/35 (09/06/12) (a)(d) | 49,450,000 | 49,450,000 | |||||||||
GA State | |||||||||||
Series 2012 A, 3.000% 07/01/13 | 16,195,000 | 16,571,915 | |||||||||
GA Thomasville Hospital Authority | |||||||||||
John D. Archbold Memorial Hospital, Series 2009 B, LOC: Branch Banking & Trust 0.160% 11/01/23 (09/06/12) (a)(b) | 6,790,000 | 6,790,000 | |||||||||
Georgia Total | 214,572,890 | ||||||||||
Idaho – 1.0% | |||||||||||
ID State | |||||||||||
Tax Anticipation Notes, Series 2012, 2.000% 06/28/13 | 43,000,000 | 43,634,637 | |||||||||
Idaho Total | 43,634,637 |
See Accompanying Notes to Financial Statements.
6
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Illinois – 7.6% | |||||||||||
IL Chicago Board of Education | |||||||||||
Series 2009 A2, LOC: Northern Trust Co. 0.150% 03/01/26 (09/06/12) (a)(b) | 9,135,000 | 9,135,000 | |||||||||
IL Chicago Heights | |||||||||||
Chicago Heights Fitness, Series 2002 A, LOC: JPMorgan Chase Bank 0.280% 03/01/17 (09/06/12) (a)(b) | 1,030,000 | 1,030,000 | |||||||||
IL DeKalb Tax Increment Revenue | |||||||||||
Series 2003, LOC: Northern Trust Co. 0.170% 01/01/13 (09/06/12) (a)(b) | 345,000 | 345,000 | |||||||||
IL Deutsche Bank Spears/Lifers Trust | |||||||||||
Chicago Illinois - City Colleges, Series 2007-346, GTY AGMT: Deutsche Bank AG 0.230% 01/01/26 (09/06/12) (a)(b) | 7,580,000 | 7,580,000 | |||||||||
Chicago Illinois Board of Education: Series 2007-306, GTY AGMT: Deutsche Bank AG 0.250% 12/01/25 (09/06/12) (a)(b) | 5,285,000 | 5,285,000 | |||||||||
Series 2007-443, GTY AGMT: Deutsche Bank AG 0.210% 12/01/31 (09/06/12) (a)(b) | 8,230,000 | 8,230,000 | |||||||||
Kane Cook & Du Page Counties School District No. 46, Series 2007-425, GTY AGMT: Deutsche Bank AG 0.230% 01/01/23 (09/06/12) (a)(b) | 11,525,000 | 11,525,000 | |||||||||
McHenry County Community Unit School District No. 200 Woodstock, Series 2007-420, GTY AGMT: Deutsche Bank AG 0.230% 01/15/26 (09/06/12) (a)(b) | 27,065,000 | 27,065,000 |
Par ($) | Value ($) | ||||||||||
IL Development Finance Authority | |||||||||||
American Academy of Dermatology, Series 2001, LOC: JPMorgan Chase Bank 0.230% 04/01/21 (09/06/12) (a)(b) | 4,500,000 | 4,500,000 | |||||||||
American College of Surgeons, Series 1996, LOC: Northern Trust Co. 0.170% 08/01/26 (09/07/12) (a)(b) | 18,017,000 | 18,017,000 | |||||||||
IL Educational Facilities Authority | |||||||||||
Elmhurst College, Series 2003, LOC: Harris N.A. 0.160% 03/01/33 (09/06/12) (a)(b) | 9,450,000 | 9,450,000 | |||||||||
Lake Forest Open Lands, Series 1999, LOC: Northern Trust Co. 0.170% 08/01/33 (09/05/12) (a)(b) | 6,100,000 | 6,100,000 | |||||||||
IL Finance Authority | |||||||||||
Advocate Healthcare Network Oblongs, Series 2008 A1, 0.220% 11/01/30 (01/24/13) (a)(d) | 4,100,000 | 4,100,000 | |||||||||
Elmhurst College, Series 2007, LOC: Harris N.A. 0.160% 02/01/42 (09/06/12) (a)(b) | 12,500,000 | 12,500,000 | |||||||||
Francis W. Parker School, Series 1999, LOC: Harris Trust & Savings Bank, LOC: Northern Trust Co. 0.200% 04/01/29 (09/05/12) (a)(b) | 4,100,000 | 4,100,000 | |||||||||
IV Healthcorp, Inc., Series 2009, LOC: Harris N.A. 0.190% 12/01/39 (09/06/12) (a)(b) | 22,295,000 | 22,295,000 | |||||||||
Lake Forest Academy, Series 2000, LOC: Northern Trust Co. 0.170% 12/01/24 (09/05/12) (a)(b) | 5,000,000 | 5,000,000 |
See Accompanying Notes to Financial Statements.
7
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Lake Forest Country Day School, Series 2005, LOC: Northern Trust Co. 0.170% 07/01/35 (09/05/12) (a)(b) | 3,250,000 | 3,250,000 | |||||||||
Search Development Center, Series 2007, LOC: JPMorgan Chase Bank 0.220% 12/01/37 (09/06/12) (a)(b) | 10,530,000 | 10,530,000 | |||||||||
IL Housing Development Authority Multi-Family | |||||||||||
Brookhaven Apartments Associates LP, Series 2008, Credit Support: FHLMC, SPA: FHLMC 0.240% 08/01/38 (09/06/12) (a)(b) | 7,145,000 | 7,145,000 | |||||||||
IL State | |||||||||||
Unemployment Insurance, Series 2012 A, 2.000% 06/15/13 | 5,000,000 | 5,067,342 | |||||||||
IL Toll Highway Authority | |||||||||||
Series 2008 A-1A, SPA: JPMorgan Chase Bank 0.270% 01/01/31 (09/06/12) (a)(b) | 45,795,000 | 45,795,000 | |||||||||
Series 2008 A-1B, SPA: PNC Bank N.A. 0.250% 01/01/31 (09/06/12) (a)(b) | 53,900,000 | 53,900,000 | |||||||||
Series 2008 A-2, SPA: JPMorgan Chase Bank 0.250% 01/01/31 (09/06/12) (a)(b) | 30,000,000 | 30,000,000 | |||||||||
IL Village of Brookfield | |||||||||||
Chicago Zoological Society, Series 2008, LOC: Northern Trust Co. 0.170% 06/01/38 (09/06/12) (a)(b) | 22,640,000 | 22,640,000 | |||||||||
Illinois Total | 334,584,342 | ||||||||||
Indiana – 5.8% | |||||||||||
IN Bond Bank | |||||||||||
Interim Advanced Funding Program Notes, Series 2012 A, 1.250% 01/03/13 | 11,600,000 | 11,635,184 |
Par ($) | Value ($) | ||||||||||
IN Crawfordsville Industrial Development Authority | |||||||||||
Acuity Brands, National Services Industries, Inc., Series 1991, LOC: Wells Fargo Bank N.A. 0.270% 06/01/21 (09/06/12) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
IN Deutsche Bank Spears/Lifers Trust | |||||||||||
Decatur Township Indiana Multi-School Building Corp., Series 2008-683, GTY AGMT: Deutsche Bank AG 0.210% 01/15/20 (09/06/12) (a)(b) | 8,230,000 | 8,230,000 | |||||||||
Dyer Indiana Redevelopment Authority, Series 2008-573, GTY AGMT: Deutsche Bank AG 0.270% 07/15/18 (09/06/12) (a)(b) | 7,130,000 | 7,130,000 | |||||||||
Westfield Indiana Multi-School Building Corp., Series 2008-595, GTY AGMT: Deutsche Bank AG 0.210% 07/15/27 (09/06/12) (a)(b) | 5,170,000 | 5,170,000 | |||||||||
IN Development Finance Authority | |||||||||||
Goodwill Industries, Series 2005, LOC: PNC Bank N.A. 0.220% 01/01/27 (09/06/12) (a)(b) | 5,425,000 | 5,425,000 | |||||||||
Rehabilitation Center, Inc., Series 2002, LOC: Wells Fargo Bank N.A. 0.320% 07/01/17 (09/06/12) (a)(b) | 970,000 | 970,000 | |||||||||
IN Educational Facilities Authority | |||||||||||
Wabash College, Series 2003, LOC: JPMorgan Chase Bank 0.220% 12/01/23 (09/06/12) (a)(b) | 10,455,000 | 10,455,000 | |||||||||
IN Finance Authority | |||||||||||
0.190% 11/26/12 | 54,500,000 | 54,500,000 | |||||||||
Ascension Health Credit Group, Series 2008 E4, 0.180% 11/15/36 (09/05/12) (a)(d) | 5,000,000 | 5,000,000 |
See Accompanying Notes to Financial Statements.
8
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Goodwill Industries, Series 2006, LOC: JPMorgan Chase Bank 0.230% 12/01/36 (09/06/12) (a)(b) | 9,000,000 | 9,000,000 | |||||||||
Lutheran Child & Family Services, Series 2005, LOC: PNC Bank N.A. 0.220% 11/01/27 (09/06/12) (a)(b) | 4,585,000 | 4,585,000 | |||||||||
IN Health Facility Finance Authority | |||||||||||
Anthony Wayne Rehabilitation Center, Series 2001, LOC: Wells Fargo Bank N.A. 0.270% 02/01/31 (09/06/12) (a)(b) | 2,195,000 | 2,195,000 | |||||||||
Community Hospital of Indiana, Series 2005 B, LOC: PNC Bank N.A. 0.170% 05/01/35 (09/06/12) (a)(b) | 16,500,000 | 16,500,000 | |||||||||
Community Hospital of Lagrange, Series 2007, LOC: PNC Bank N.A. 0.170% 11/01/32 (09/06/12) (a)(b) | 22,495,000 | 22,495,000 | |||||||||
Riverview Hospital, Series 2004, LOC: PNC Bank N.A. 0.170% 08/01/32 (09/06/12) (a)(b) | 16,900,000 | 16,900,000 | |||||||||
Southern Indiana Rehab Hospital, Series 2001, LOC: JPMorgan Chase Bank 0.280% 04/01/20 (09/06/12) (a)(b) | 2,175,000 | 2,175,000 | |||||||||
IN Lawrenceburg | |||||||||||
Indiana Michigan Power Co., Series 2008 H, LOC: Bank of Nova Scotia 0.160% 11/01/21 (09/06/12) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
IN Puttable Floating Option Tax-Exempt Receipts | |||||||||||
Indiana Finance Authority Highway Revenue, Series 2007, GTY AGMT: Wells Fargo Bank N.A. 0.230% 06/01/29 (09/06/12) (a)(b) | 6,405,000 | 6,405,000 |
Par ($) | Value ($) | ||||||||||
IN RBC Municipal Products, Inc. Trust | |||||||||||
Indiana State Housing & Community Development Authority, Series 2010 E-20, LIQ FAC: Royal Bank of Canada 0.180% 07/01/39 (09/06/12) (a)(b)(c) | 25,000,000 | 25,000,000 | |||||||||
Indiana University, Series 2011 E-23, LOC: Royal Bank of Canada 0.170% 03/01/36 (09/06/12) (a)(b)(c) | 8,925,000 | 8,925,000 | |||||||||
IN St. Joseph County | |||||||||||
South Bend Medical Foundation, Inc., Series 2000, LOC: PNC Bank N.A. 0.220% 08/01/20 (09/06/12) (a)(b) | 10,860,000 | 10,860,000 | |||||||||
University of Notre Dame du Lac, Series 2003, SPA: Northern Trust Co. 0.130% 03/01/38 (09/06/12) (a)(b) | 7,835,000 | 7,835,000 | |||||||||
Indiana Total | 253,390,184 | ||||||||||
Iowa – 0.6% | |||||||||||
IA Des Moines | |||||||||||
Central Iowa Hospital Corp., Iowa Methodist Medical Center, Series 1985, LOC: Wells Fargo Bank N.A. 0.180% 08/01/15 (09/05/12) (a)(b) | 23,000,000 | 23,000,000 | |||||||||
IA Woodbury County | |||||||||||
June E. Nylan Cancer Center, Siouxland Regional Cancer Center, Series 1998 A, LOC: Wells Fargo Bank N.A. 0.270% 12/01/14 (09/06/12) (a)(b) | 1,375,000 | 1,375,000 | |||||||||
Iowa Total | 24,375,000 | ||||||||||
Kentucky – 0.5% | |||||||||||
KY Morehead League of Cities Funding Trust | |||||||||||
Series 2004 A, LOC: U.S. Bank N.A. 0.160% 06/01/34 (09/07/12) (a)(b) | 3,350,000 | 3,350,000 |
See Accompanying Notes to Financial Statements.
9
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
KY Pendleton County | |||||||||||
Series 1989, LOC: JPMorgan Chase Bank 0.550% 09/14/12 (b) | 20,000,000 | 20,000,000 | |||||||||
Kentucky Total | 23,350,000 | ||||||||||
Louisiana – 2.5% | |||||||||||
LA Municipal Gas Authority | |||||||||||
Putters, Series 2006-1411Q, LOC: JPMorgan Chase Bank 0.300% 08/01/16 (09/04/12) (a)(b) | 57,945,000 | 57,945,000 | |||||||||
LA Public Facilities Authority | |||||||||||
Franciscan Missionaries, Series 2005 D, LOC: U.S. Bank N.A. 0.180% 07/01/28 (09/04/12) (a)(b) | 39,930,000 | 39,930,000 | |||||||||
LA St. James Parrish | |||||||||||
Nustar Logistics LP, Series 2011, LOC: Wells Fargo Bank N.A. 0.160% 08/01/41 (09/05/12) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
LA Upper Pontalba Building Restoration Corp. | |||||||||||
Upper Pontalba Building Project, Series 1996, LOC: JPMorgan Chase Bank 0.280% 12/01/16 (09/06/12) (a)(b) | 2,115,000 | 2,115,000 | |||||||||
Louisiana Total | 109,990,000 | ||||||||||
Maine – 0.2% | |||||||||||
ME Eclipse Funding Trust | |||||||||||
Maine Health & Higher Educational Facility Authority, Series 2007, LOC: U.S. Bank N.A. 0.170% 07/01/37 (09/06/12) (a)(b) | 6,715,000 | 6,715,000 | |||||||||
Maine Total | 6,715,000 |
Par ($) | Value ($) | ||||||||||
Maryland – 0.9% | |||||||||||
MD Baltimore County Economic Development Authority | |||||||||||
Blue Circle, Inc., Series 1992, LOC: BNP Paribas 0.730% 12/01/17 (09/05/12) (a)(b) | 4,400,000 | 4,400,000 | |||||||||
Torah Institute of Baltimore, Series 2004, LOC: Branch Banking & Trust 0.160% 07/01/24 (09/06/12) (a)(b) | 2,760,000 | 2,760,000 | |||||||||
MD Bel Air Economic Development Authority | |||||||||||
Harford Day School, Inc., Series 2007, LOC: Branch Banking & Trust 0.160% 10/01/33 (09/06/12) (a)(b) | 4,075,000 | 4,075,000 | |||||||||
MD Montgomery County Housing Opportunities Commission | |||||||||||
Series 2011 A, Insured: GNMA/FNMA/FHLMC, LOC: TD Bank N.A. 0.160% 01/01/49 (09/06/12) (a)(b) | 13,680,000 | 13,680,000 | |||||||||
MD Prince George's County | |||||||||||
Series 2007-2128, GTY AGMT: Wells Fargo Bank N.A. 0.170% 07/01/34 (09/06/12) (a)(b) | 13,710,000 | 13,710,000 | |||||||||
MD State | |||||||||||
Capital Improvement, State & Local Facilities, Series 2002 A, 5.500% 08/01/13 | 2,210,000 | 2,316,801 | |||||||||
Maryland Total | 40,941,801 | ||||||||||
Massachusetts – 0.5% | |||||||||||
MA Billerica | |||||||||||
Series 2012, 1.000% 05/17/13 | 3,000,000 | 3,015,969 | |||||||||
MA Hingham | |||||||||||
Series 2012, 0.750% 06/28/13 | 12,500,000 | 12,556,815 | |||||||||
MA Shrewsbury | |||||||||||
Series 2011, 1.000% 11/16/12 | 3,300,000 | 3,304,713 |
See Accompanying Notes to Financial Statements.
10
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
MA State | |||||||||||
Series 2002 C, Insured: Government of Authority, Pre-refunded 11/01/12, 5.500% 11/01/19 | 4,500,000 | 4,538,822 | |||||||||
Massachusetts Total | 23,416,319 | ||||||||||
Michigan – 2.0% | |||||||||||
MI Bank of New York Municipal Certificates Trust | |||||||||||
Detroit Sewer Disposal, Series 2006, LOC: Bank of New York 0.300% 07/01/26 (10/01/12) (a)(b) | 18,374,500 | 18,374,500 | |||||||||
MI Deutsche Bank Spears/Lifers Trust | |||||||||||
Grand Rapids & Kent County Joint Building Authority, Devos Place Project, Series 2007-302, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.230% 12/01/31 (09/06/12) (a)(b) | 2,655,000 | 2,655,000 | |||||||||
MI Finance Authority | |||||||||||
State Aid Notes, Series 2012 B1, 2.000% 08/20/13 | 5,000,000 | 5,079,981 | |||||||||
MI Hancock Hospital Finance Authority | |||||||||||
Portage Health Systems, Inc., Series 2006, LOC: PNC Bank N.A. 0.170% 08/01/31 (09/06/12) (a)(b) | 20,290,000 | 20,290,000 | |||||||||
MI L'Anse Creuse Public Schools | |||||||||||
School Building & Site-RMKT, Series 2008, SPA: JPMorgan Chase Bank 0.200% 05/01/35 (09/04/12) (a)(b) | 6,225,000 | 6,225,000 | |||||||||
MI Michigan State University | |||||||||||
Series 2003 A, SPA: Northern Trust Co. 0.160% 02/15/33 (09/05/12) (a)(b) | 12,000,000 | 12,000,000 |
Par ($) | Value ($) | ||||||||||
Series 2005, SPA: Bank of New York 0.160% 02/15/34 (09/05/12) (a)(b) | 10,500,000 | 10,500,000 | |||||||||
MI Saline Area Schools | |||||||||||
Series 2002, LOC: Landesbank Hessen-Thüringen 0.240% 05/01/30 (09/06/12) (a)(b) | 5,970,000 | 5,970,000 | |||||||||
MI University of Michigan | |||||||||||
Series 2012 A, 0.140% 04/01/36 (09/06/12) (a)(d) | 6,300,000 | 6,300,000 | |||||||||
Michigan Total | 87,394,481 | ||||||||||
Minnesota – 3.1% | |||||||||||
MN Austin Independent School District No. 492 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 B, 1.000% 09/28/12 | 7,000,000 | 7,003,743 | |||||||||
MN Blaine Industrial Development | |||||||||||
SuperValu, Inc., Series 1993, LOC: U.S. Bank N.A. 0.150% 11/01/13 (09/05/12) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
MN Brainerd Independent School District No. 181 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 A, 1.000% 09/28/12 | 7,100,000 | 7,103,930 | |||||||||
MN Columbia Heights Independent School District No. 13 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 B, 1.250% 09/16/13 | 6,000,000 | 6,057,173 | |||||||||
MN Edina Independent School District No. 273 | |||||||||||
Tax Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 A, 2.000% 03/15/13 | 4,500,000 | 4,542,033 |
See Accompanying Notes to Financial Statements.
11
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
MN Fridley Independent School District No. 14 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program: Series 2011 A, 1.000% 09/13/12 | 8,000,000 | 8,001,749 | |||||||||
Series 2012 A, 1.500% 09/27/13 (e) | 7,500,000 | 7,594,875 | |||||||||
MN Holdingford Independent School District No. 738 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012, 1.500% 09/28/13 (e) | 3,000,000 | 3,036,540 | |||||||||
MN Itasca County Independent School District No. 318 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2011 B, 1.000% 09/20/12 | 7,280,000 | 7,282,521 | |||||||||
MN Mankato | |||||||||||
Bethany Lutheran College, Inc., Series 2000 A, LOC: Wells Fargo Bank N.A. 0.270% 11/01/15 (09/06/12) (a)(b) | 1,280,000 | 1,280,000 | |||||||||
MN Maple Grove Multi-Family Housing | |||||||||||
Series 1991, LOC: Wells Fargo Bank N.A. 0.270% 11/01/31 (09/06/12) (a)(b) | 1,150,000 | 1,150,000 | |||||||||
MN Monticello Independent School District No. 882 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 A, 1.250% 09/20/13 | 4,200,000 | 4,241,745 | |||||||||
MN Moorhead Independent School District No. 152 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program: Series 2012 A, 1.250% 09/28/12 | 8,500,000 | 8,506,087 | |||||||||
Series 2012 B, 1.000% 09/18/13 (e) | 8,500,000 | 8,560,095 |
Par ($) | Value ($) | ||||||||||
MN Rocori Area Schools Independent School District No. 750 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 A, 1.250% 09/27/13 (e) | 3,000,000 | 3,028,530 | |||||||||
MN Rosemount-Apple Valley-Eagan Independent School District No. 196 | |||||||||||
Tax Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 B, 1.000% 09/28/12 | 12,500,000 | 12,507,055 | |||||||||
MN School District Capital Equipment Borrowing Program | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2011 B, 2.000% 09/09/12 | 24,850,000 | 24,859,348 | |||||||||
MN South St. Paul Special School District No. 6 | |||||||||||
Tax Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 A, 1.000% 09/28/12 | 6,000,000 | 6,003,307 | |||||||||
MN Warroad Independent School District No. 690 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2012 A, 1.500% 08/30/13 | 6,745,000 | 6,825,069 | |||||||||
MN West St. Paul-Mendota Heights-Eagan Independent School District No. 197 | |||||||||||
Aid Anticipation Certificates, Minnesota School District Credit Enhancement Program, Series 2011 A, 1.000% 09/13/12 | 8,000,000 | 8,001,750 | |||||||||
Minnesota Total | 137,285,550 |
See Accompanying Notes to Financial Statements.
12
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Missouri – 2.8% | |||||||||||
MO Deutsche Bank Spears/Lifers Trust | |||||||||||
Kansas City Assistance Corp., Series 2008-536, | |||||||||||
GTY AGMT: Deutsche Bank AG 0.210% 04/15/19 (09/06/12) (a)(b) | 9,465,000 | 9,465,000 | |||||||||
MO Health & Educational Facilities Authority | |||||||||||
Ascension Health: Series 2003 C-1, 0.180% 11/15/39 (09/05/12) (a)(d) | 8,075,000 | 8,075,000 | |||||||||
Series 2008 C-5, 0.160% 11/15/26 (09/05/12) (a)(d) | 10,500,000 | 10,500,000 | |||||||||
Bethesda Health Group, Inc., Series 2009, LOC: U.S. Bank N.A. 0.210% 08/01/41 (09/04/12) (a)(b) | 54,645,000 | 54,645,000 | |||||||||
MO Kansas City | |||||||||||
H. Roe Battle Convention Center, Series 2008 E, LOC: Sumitomo Mitsui Banking 0.170% 04/15/34 (09/05/12) (a)(b) | 10,105,000 | 10,105,000 | |||||||||
MO Nodaway Industrial Development Authority | |||||||||||
Northwest Foundation, Inc., Series 2002, LOC: U.S. Bank N.A. 0.160% 11/01/32 (09/06/12) (a)(b) | 2,975,000 | 2,975,000 | |||||||||
MO St. Louis Airport | |||||||||||
Series 2005, GTY AGMT: Deutsche Bank AG 0.210% 07/01/31 (09/06/12) (a)(b) | 27,970,000 | 27,970,000 | |||||||||
Missouri Total | 123,735,000 | ||||||||||
Montana – 0.2% | |||||||||||
MT Board of Investments | |||||||||||
Series 2004, 0.220% 03/01/29 (03/01/13) (a)(d) | 8,400,000 | 8,400,000 | |||||||||
Montana Total | 8,400,000 |
Par ($) | Value ($) | ||||||||||
Nebraska – 1.9% | |||||||||||
NE Central Plains Energy Project | |||||||||||
Series 2009 2, SPA: Royal Bank of Canada 0.180% 08/01/39 (09/06/12) (a)(b) | 40,725,000 | 40,725,000 | |||||||||
NE Nuckolls County | |||||||||||
Agrex, Inc., Series 1985, LOC: JPMorgan Chase Bank 0.230% 02/01/15 (09/05/12) (a)(b) | 5,100,000 | 5,100,000 | |||||||||
NE Omaha Public Power District | |||||||||||
Electric Revenue Notes, Series A: 0.180% 10/03/12 | 7,200,000 | 7,200,000 | |||||||||
0.180% 10/04/12 | 9,000,000 | 9,000,000 | |||||||||
0.180% 10/10/12 | 13,000,000 | 13,000,000 | |||||||||
0.190% 10/09/12 | 9,000,000 | 9,000,000 | |||||||||
Nebraska Total | 84,025,000 | ||||||||||
Nevada – 1.4% | |||||||||||
NV Clark County | |||||||||||
Opportunity Village Foundation, Series 2007, LOC: Northern Trust Co. 0.160% 01/01/37 (09/06/12) (a)(b) | 9,100,000 | 9,100,000 | |||||||||
NV Deutsche Bank Spears/Lifers Trust | |||||||||||
Clark County School District, Series 2008-684, GTY AGMT: Deutsche Bank AG 0.210% 06/15/24 (09/06/12) (a)(b) | 9,755,000 | 9,755,000 | |||||||||
NV Reno | |||||||||||
ReTrac-Reno Transportation Rail Access Corridor, Series 2008, LOC: Bank of New York 0.180% 06/01/42 (09/04/12) (a)(b) | 40,970,000 | 40,970,000 | |||||||||
Nevada Total | 59,825,000 |
See Accompanying Notes to Financial Statements.
13
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
New Hampshire – 0.3% | |||||||||||
NH Health & Education Facilities Authority | |||||||||||
Frisbie Memorial Hospital, Series 2006, LOC: TD Bank N.A. 0.150% 10/01/36 (09/06/12) (a)(b) | 11,300,000 | 11,300,000 | |||||||||
New Hampshire Total | 11,300,000 | ||||||||||
New Jersey – 1.3% | |||||||||||
NJ Deutsche Bank Spears/Lifers Trust | |||||||||||
New Jersey State Transportation Trust Fund Authority: Series 2007-317, Insured: FSA, LIQ FAC: Deutsche Bank AG 0.240% 12/15/33 (09/06/12) (a)(b) | 28,745,000 | 28,745,000 | |||||||||
Series 2007-452, Insured: NPFGC, GTY AGMT: Deutsche Bank AG 0.270% 12/15/33 (09/06/12) (a)(b) | 18,935,000 | 18,935,000 | |||||||||
NJ Economic Development Authority | |||||||||||
Series 2011, DPCE: State Appropriation, LIQ FAC: Citibank N.A. 0.520% 09/01/21 (09/06/12) (a)(b)(c) | 6,940,000 | 6,940,000 | |||||||||
NJ JPMorgan Chase Putters/Drivers Trust | |||||||||||
Series 2009-3540Z, Insured: FSA, LIQ FAC: JPMorgan Chase Bank 0.320% 12/15/13 (09/06/12) (a)(b)(c) | 2,780,000 | 2,780,000 | |||||||||
New Jersey Total | 57,400,000 | ||||||||||
New Mexico �� 1.7% | |||||||||||
NM Dona Ana County | |||||||||||
Foamex LP, Series 1985, LOC: Wells Fargo Bank N.A. 0.230% 11/01/13 (09/06/12) (a)(b) | 6,000,000 | 6,000,000 |
Par ($) | Value ($) | ||||||||||
NM Municipal Energy Acquisition Authority | |||||||||||
Series 2009, SPA: Royal Bank of Canada 0.180% 11/01/39 (09/06/12) (a)(b) | 69,680,000 | 69,680,000 | |||||||||
New Mexico Total | 75,680,000 | ||||||||||
New York – 11.2% | |||||||||||
NY Amherst | |||||||||||
Series 2012 A, 1.000% 07/18/13 | 3,025,000 | 3,043,485 | |||||||||
NY Baldwinsville Central School District | |||||||||||
New York State Aid Intercept Program, Series 2012, 1.000% 06/27/13 | 6,224,000 | 6,260,278 | |||||||||
NY BB&T Municipal Trust | |||||||||||
Series 2009-1037, LOC: Branch Banking & Trust 0.330% 06/01/17 (09/06/12) (a)(b)(c) | 21,965,000 | 21,965,000 | |||||||||
Series 2010-1039, LOC: Branch Banking & Trust 0.260% 06/01/25 (09/06/12) (a)(b)(c) | 41,280,000 | 41,280,000 | |||||||||
NY Erie County Industrial Development Agency | |||||||||||
Series 2012, Credit Support: State Aid Withholding 1.000% 05/01/13 | 3,100,000 | 3,114,148 | |||||||||
NY Housing Finance Agency | |||||||||||
Ann/Nassau Realty LLC, 111 Nassau Street Housing, Series 2011 A, LOC: Landesbank Hessen-Thüringen 0.200% 11/01/44 (09/04/12) (a)(b) | 4,505,000 | 4,505,000 | |||||||||
Midtown West B LLC, 505 West 37th St.: Series 2009 A, LOC: Landesbank Hessen-Thüringen 0.280% 05/01/42 (09/05/12) (a)(b) | 33,060,000 | 33,060,000 | |||||||||
Series 2009 B, LOC: Landesbank Hessen-Thüringen 0.280% 05/01/42 (09/05/12) (a)(b) | 51,000,000 | 51,000,000 |
See Accompanying Notes to Financial Statements.
14
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
NY Liberty Development Corp. | |||||||||||
3 World Trade Center LLC: Series 2010 A1, Escrowed in U.S. Treasuries, 0.250% 12/01/50 (05/22/13) (a)(d) | 50,000,000 | 50,000,000 | |||||||||
Series 2011 A3, 0.250% 12/01/49 (05/22/13) (a)(d) | 50,000,000 | 50,000,000 | |||||||||
NY Metropolitan Transportation Authority | |||||||||||
Series 2008 D2, LOC: Landesbank Hessen-Thüringen 0.210% 11/01/35 (09/04/12) (a)(b) | 65,060,000 | 65,060,000 | |||||||||
NY Mortgage Agency | |||||||||||
Series 2012 173-A, 0.190% 04/01/40 (12/01/12) (a)(d) | 1,000,000 | 1,000,000 | |||||||||
Series 2012 174-A, 0.190% 04/01/23 (12/01/12) (a)(d) | 7,000,000 | 7,000,000 | |||||||||
Series 2012 174-B, 0.230% 04/01/23 (05/01/13) (a)(d) | 5,000,000 | 5,000,000 | |||||||||
NY New York City Health & Hospital Corp. | |||||||||||
Series 2008 B, LOC: TD Bank N.A. 0.170% 02/15/31 (09/05/12) (a)(b) | 4,400,000 | 4,400,000 | |||||||||
NY New York City Housing Development Corp. | |||||||||||
Series 2009 H-2, 0.250% 05/01/41 (06/28/13) (a)(d) | 6,640,000 | 6,640,000 | |||||||||
Series 2012 C, 0.270% 05/01/45 (02/01/13) (a)(d) | 6,000,000 | 6,000,000 | |||||||||
NY New York City Municipal Water Finance Authority | |||||||||||
Series 2008 BB-2, SPA: Landesbank Hessen-Thüringen 0.210% 06/15/39 (09/04/12) (a)(b) | 23,885,000 | 23,885,000 | |||||||||
Series 2011 A-1, SPA: Mizuho Corporate Bank 0.170% 06/15/44 (09/04/12) (a)(b) | 11,050,000 | 11,050,000 |
Par ($) | Value ($) | ||||||||||
NY New York City | |||||||||||
Series 2004 H-4, LOC: Bank of New York 0.170% 03/01/34 (09/04/12) (a)(b) | 21,705,000 | 21,705,000 | |||||||||
Series 2008 J-6, LOC: Landesbank Hessen-Thüringen 0.220% 08/01/24 (09/04/12) (a)(b) | 41,680,000 | 41,680,000 | |||||||||
Series 2012 G-5, SPA: Wells Fargo Bank N.A. 0.160% 04/01/42 (09/04/12) (a)(b) | 12,900,000 | 12,900,000 | |||||||||
NY North Hempstead | |||||||||||
Series 2011, 1.000% 10/05/12 | 15,000,000 | 15,009,851 | |||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2007, SPA: JPMorgan Chase Bank 0.380% 01/01/19 (09/05/12) (a)(b) | 2,610,000 | 2,610,000 | |||||||||
New York Total | 488,167,762 | ||||||||||
North Carolina – 2.6% | |||||||||||
NC BB&T Municipal Trust | |||||||||||
Series 2008-1008, LOC: Branch Banking & Trust 0.260% 03/01/24 (09/06/12) (a)(b) | 11,315,000 | 11,315,000 | |||||||||
Series 2008-1023, LOC: Branch Banking & Trust 0.260% 05/01/24 (09/06/12) (a)(b)(c) | 3,975,000 | 3,975,000 | |||||||||
Series 2008-1026, LOC: Branch Banking & Trust 0.260% 10/01/18 (09/06/12) (a)(b)(c) | 9,475,000 | 9,475,000 | |||||||||
NC Capital Facilities Finance Agency | |||||||||||
0.180% 10/04/12 | 7,000,000 | 7,000,000 | |||||||||
Barton College, Series 2004, LOC: Branch Banking & Trust 0.160% 07/01/19 (09/06/12) (a)(b) | 3,700,000 | 3,700,000 |
See Accompanying Notes to Financial Statements.
15
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
High Point University: Series 2007, LOC: Branch Banking & Trust 0.160% 12/01/29 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Series 2008, LOC: Branch Banking & Trust 0.160% 05/01/30 (09/06/12) (a)(b) | 3,360,000 | 3,360,000 | |||||||||
NC Forsyth County | |||||||||||
Series 2004 A, SPA: Wells Fargo Bank N.A. 0.170% 03/01/25 (09/06/12) (a)(b) | 7,110,000 | 7,110,000 | |||||||||
NC Medical Care Commission | |||||||||||
Deerfield Episcopal Retirement, Series 2008 B, LOC: Branch Banking & Trust 0.160% 11/01/38 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
J. Arthur Dosher Memorial Hospital, Series 1998 J, LOC: Branch Banking & Trust 0.160% 05/01/18 (09/06/12) (a)(b) | 1,520,000 | 1,520,000 | |||||||||
Novant Health Obligation Group, Series 2004 B, SPA: JPMorgan Chase Bank 0.180% 11/01/34 (09/05/12) (a)(b) | 22,705,000 | 22,705,000 | |||||||||
Southeastern Regional Medical Center, Series 2005, LOC: Branch Banking & Trust 0.160% 06/01/37 (09/06/12) (a)(b) | 7,050,000 | 7,050,000 | |||||||||
Westcare, Inc., Series 2002 A, LOC: Branch Banking & Trust 0.160% 09/01/22 (09/06/12) (a)(b) | 6,100,000 | 6,100,000 | |||||||||
NC State | |||||||||||
Series 2002 E, SPA: Landesbank Hessen-Thüringen 0.180% 05/01/21 (09/05/12) (a)(b) | 11,950,000 | 11,950,000 |
Par ($) | Value ($) | ||||||||||
NC Wake County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Habitat for Humanity of Wake County, Series 2007, LOC: Branch Banking & Trust 0.160% 11/01/32 (09/06/12) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
NC Wake County | |||||||||||
Series 2009 C, 5.000% 03/01/13 | 2,855,000 | 2,923,334 | |||||||||
North Carolina Total | 112,183,334 | ||||||||||
Ohio – 4.0% | |||||||||||
OH Air Quality Development Authority | |||||||||||
Ohio Valley Electric Corp., Series 2009 C, LOC: Bank of Tokyo-Mitsubishi UFJ 0.160% 02/01/26 (09/06/12) (a)(b) | 3,600,000 | 3,600,000 | |||||||||
OH Butler County Port Authority | |||||||||||
Greater Miami Valley YMCA, Series 2007, LOC: JPMorgan Chase Bank 0.220% 09/01/37 (09/06/12) (a)(b) | 9,875,000 | 9,875,000 | |||||||||
OH Cleveland-Cuyahoga County Port Authority | |||||||||||
The Park Synagogue, Series 2006, LOC: U.S. Bank N.A. 0.170% 01/01/31 (09/06/12) (a)(b) | 9,655,000 | 9,655,000 | |||||||||
OH Columbus Regional Airport Authority | |||||||||||
Oasbo Program, Series 2004 A, LOC: U.S. Bank N.A. 0.170% 03/01/34 (09/06/12) (a)(b) | 21,320,000 | 21,320,000 | |||||||||
OH Cuyahoga County | |||||||||||
Cleveland Hearing & Speech, Series 2008, LOC: PNC Bank N.A. 0.170% 06/01/38 (09/06/12) (a)(b) | 4,790,000 | 4,790,000 |
See Accompanying Notes to Financial Statements.
16
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
OH Deutsche Bank Spears/Lifers Trust | |||||||||||
Columbus Ohio Regional Airport Authority, Series 2008-488, GTY AGMT: Deutsche Bank AG 0.210% 01/01/28 (09/06/12) (a)(b) | 4,950,000 | 4,950,000 | |||||||||
OH Eclipse Funding Trust | |||||||||||
Higher Educational Facility, University of Dayton, Series 2006, LOC: U.S. Bank N.A. 0.170% 12/01/33 (09/06/12) (a)(b) | 5,890,000 | 5,890,000 | |||||||||
OH Franklin County | |||||||||||
OhioHealth Corp., Series 2011 B, 0.250% 11/15/33 (07/09/13) (a)(d) | 18,045,000 | 18,045,000 | |||||||||
Traditions Healthcare, Series 2005, LOC: U.S. Bank N.A. 0.170% 06/01/30 (09/06/12) (a)(b) | 16,645,000 | 16,645,000 | |||||||||
OH Geauga County | |||||||||||
Sisters of Notre Dame, Series 2001, LOC: PNC Bank N.A. 0.220% 08/01/16 (09/06/12) (a)(b) | 2,985,000 | 2,985,000 | |||||||||
OH Higher Educational Facility Authority | |||||||||||
Tiffin University, Series 2007, LOC: PNC Bank N.A. 0.170% 08/01/22 (09/06/12) (a)(b) | 10,470,000 | 10,470,000 | |||||||||
OH Huron County | |||||||||||
Fisher-Titus Medical Center, Series 2003 A, LOC: PNC Bank N.A. 0.170% 12/01/27 (09/06/12) (a)(b) | 9,575,000 | 9,575,000 | |||||||||
Norwalk Area Health System, Series 2003, LOC: PNC Bank N.A. 0.170% 12/01/27 (09/06/12) (a)(b) | 6,120,000 | 6,120,000 |
Par ($) | Value ($) | ||||||||||
OH Lima | |||||||||||
Lima Memorial Hospital, Series 2007, LOC: JPMorgan Chase Bank 0.190% 04/01/37 (09/06/12) (a)(b) | 20,350,000 | 20,350,000 | |||||||||
OH Salem Civic Facility | |||||||||||
Salem Community Center, Inc., Series 2001, LOC: PNC Bank N.A. 0.220% 06/01/27 (09/06/12) (a)(b) | 7,135,000 | 7,135,000 | |||||||||
OH Stark County Port Authority | |||||||||||
Community Action Agency, Series 2001, LOC: JPMorgan Chase Bank 0.250% 12/01/22 (09/06/12) (a)(b) | 3,100,000 | 3,100,000 | |||||||||
OH State University | |||||||||||
0.180% 10/04/12 | 14,485,000 | 14,485,000 | |||||||||
OH Zanesville Muskingum County Port Authority | |||||||||||
Grove City Church, Series 2006, LOC: PNC Bank N.A. 0.220% 02/01/24 (09/06/12) (a)(b) | 7,630,000 | 7,630,000 | |||||||||
Ohio Total | 176,620,000 | ||||||||||
Oklahoma – 0.2% | |||||||||||
OK Industries Authority | |||||||||||
Casady School, Series 1998, LOC: JPMorgan Chase Bank 0.280% 08/01/18 (09/06/12) (a)(b) | 970,000 | 970,000 | |||||||||
OK Tulsa Industrial Authority | |||||||||||
Justin Industries, Inc., Series 1984, LOC: JPMorgan Chase Bank 0.190% 10/01/14 (09/06/12) (a)(b) | 6,335,000 | 6,335,000 | |||||||||
Oklahoma Total | 7,305,000 |
See Accompanying Notes to Financial Statements.
17
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Pennsylvania – 7.2% | |||||||||||
PA Adams County Industrial Development Authority | |||||||||||
Brethren Home Community, Series 2007, LOC: PNC Bank N.A. 0.150% 06/01/32 (09/06/12) (a)(b) | 8,240,000 | 8,240,000 | |||||||||
PA Allegheny County Hospital Development Authority | |||||||||||
Jefferson Regional Medical Center, Series 2006 A, LOC: PNC Bank N.A. 0.170% 05/01/26 (09/06/12) (a)(b) | 22,000,000 | 22,000,000 | |||||||||
PA Allegheny County Industrial Development Authority | |||||||||||
Our Lady Sacred Heart High School, Series 2002, LOC: PNC Bank N.A. 0.170% 06/01/22 (09/06/12) (a)(b) | 1,890,000 | 1,890,000 | |||||||||
PA Deutsche Bank Spears/Lifers Trust | |||||||||||
Westmoreland County Municipal Authority, Series 2007-301, GTY AGMT: Deutsche Bank AG 0.230% 08/15/30 (09/06/12) (a)(b) | 5,845,000 | 5,845,000 | |||||||||
PA Emmaus General Authority | |||||||||||
Series 1989 B-28, LOC: U.S. Bank N.A. 0.170% 03/01/24 (09/05/12) (a)(b) | 2,600,000 | 2,600,000 | |||||||||
Series 1989 B-29, LOC: U.S. Bank N.A. 0.170% 03/01/24 (09/05/12) (a)(b) | 7,300,000 | 7,300,000 | |||||||||
Series 1989 E-22, LOC: U.S. Bank N.A. 0.170% 03/01/24 (09/05/12) (a)(b) | 11,300,000 | 11,300,000 | |||||||||
Series 1989 F-27, LOC: U.S. Bank N.A. 0.170% 03/01/24 (09/05/12) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
Series 1989 G-6, LOC: U.S. Bank N.A. 0.170% 03/01/24 (09/05/12) (a)(b) | 1,400,000 | 1,400,000 |
Par ($) | Value ($) | ||||||||||
Series 2003 E-20, LOC: U.S. Bank N.A. 0.170% 03/01/24 (09/05/12) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
PA Haverford Township School District | |||||||||||
Series 2009, LOC: TD Bank N.A. 0.180% 03/01/30 (09/06/12) (a)(b) | 4,100,000 | 4,100,000 | |||||||||
PA Higher Educational Facilities Authority | |||||||||||
Mount Aloysius College, Series 2003 L3, LOC: PNC Bank N.A. 0.170% 05/01/28 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
PA North Penn Water Authority | |||||||||||
Series 2008, LOC: U.S. Bank N.A. 0.180% 11/01/24 (09/06/12) (a)(b) | 7,000,000 | 7,000,000 | |||||||||
PA Northampton County Higher Education Authority | |||||||||||
Lehigh University, Series 2006 A, 0.160% 11/15/21 (09/06/12) (a)(d) | 4,090,000 | 4,090,000 | |||||||||
PA Philadelphia Authority for Industrial Development | |||||||||||
NewCourtland Elder Services, Series 2007, LOC: PNC Bank N.A. 0.170% 03/01/26 (09/06/12) (a)(b) | 6,940,000 | 6,940,000 | |||||||||
PA Public School Building Authority | |||||||||||
Park School Project: Series 2009 A, LOC: PNC Bank N.A. 0.170% 08/01/30 (09/06/12) (a)(b) | 9,745,000 | 9,745,000 | |||||||||
Series 2009 B, LOC: PNC Bank N.A. 0.170% 05/15/20 (09/06/12) (a)(b) | 12,485,000 | 12,485,000 |
See Accompanying Notes to Financial Statements.
18
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
PA RBC Municipal Products, Inc. Trust | |||||||||||
Berks County PA Reading Hospital & Medical Center, Series 2011 C-15, LOC: Royal Bank of Canada 0.170% 11/01/12 (09/06/12) (a)(b)(c) | 9,970,000 | 9,970,000 | |||||||||
Bethlehem PA Area School District, Series 2011 E-31, LOC: Royal Bank of Canada 0.170% 05/01/14 (09/06/12) (a)(b)(c) | 5,000,000 | 5,000,000 | |||||||||
Hempfield PA School District, Series 2011 E-30, LOC: Royal Bank of Canada 0.170% 08/01/25 (09/06/12) (a)(b)(c) | 5,280,000 | 5,280,000 | |||||||||
Manhein Township PA School District, Series 2011 E-28, LOC: Royal Bank of Canada 0.170% 12/12/14 (09/06/12) (a)(b)(c) | 13,680,000 | 13,680,000 | |||||||||
Pennsylvania State Turnpike Commission, Series 2011 E-22, LOC: Royal Bank of Canada 0.170% 12/01/38 (09/06/12) (a)(b)(c) | 15,955,000 | 15,955,000 | |||||||||
University of Pittsburgh Medical Center, Series 2010 E-16, LOC: Royal Bank of Canada 0.170% 04/15/39 (09/06/12) (a)(b)(c) | 39,420,000 | 39,420,000 | |||||||||
PA Ridley School District | |||||||||||
Series 2009, LOC: TD Bank N.A. 0.180% 11/01/29 (09/06/12) (a)(b) | 3,660,000 | 3,660,000 | |||||||||
PA St. Mary Hospital Authority | |||||||||||
Catholic Health Initiatives, Series 2004 B, SPA: Landesbank Hessen-Thüringen 0.240% 03/01/32 (09/05/12) (a)(b) | 17,200,000 | 17,200,000 | |||||||||
PA Turnpike Commission | |||||||||||
Multi-Modal, Series 2010 A-2, SPA: JPMorgan Chase Bank 0.180% 12/01/35 (09/06/12) (a)(b) | 75,615,000 | 75,615,000 |
Par ($) | Value ($) | ||||||||||
PA University of Pittsburgh | |||||||||||
Series 2012, 2.000% 07/02/13 | 12,000,000 | 12,178,610 | |||||||||
Pennsylvania Total | 315,593,610 | ||||||||||
Rhode Island – 0.7% | |||||||||||
RI Health & Educational Building Corp. | |||||||||||
Brown University, Higher Education Facilities, Series 2003 B, 0.160% 09/01/43 (09/06/12) (a)(d) | 29,995,000 | 29,995,000 | |||||||||
Rhode Island Total | 29,995,000 | ||||||||||
South Carolina – 0.9% | |||||||||||
SC Charleston County School District Development Corp. | |||||||||||
Series 2012, Credit Support: South Carolina School District Credit Enhancement Program, 2.250% 05/13/13 | 6,190,000 | 6,279,026 | |||||||||
SC JPMorgan Chase Putters/Drivers Trust | |||||||||||
Anderson County SC School District #5, Series 2012-4218, Credit Support: South Carolina School District Credit Enhancement Program, Insured: AGMC, LIQ FAC: JPMorgan Chase Bank 0.200% 08/01/16 (09/06/12) (a)(b)(c) | 8,980,000 | 8,980,000 | |||||||||
SC Lexington & Richland School District No. 5 | |||||||||||
Series 2012 A, Credit Support: South Carolina School District Credit Enhancement Program 2.000% 03/01/13 | 15,000,000 | 15,135,307 | |||||||||
SC Puttable Floating Option Tax-Exempt Receipts | |||||||||||
P-Floats-PT-4550, Series 2008, GTY AGMT: FHLMC 0.410% 03/01/49 (09/06/12) (a)(b) | 9,940,000 | 9,940,000 | |||||||||
South Carolina Total | 40,334,333 |
See Accompanying Notes to Financial Statements.
19
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
South Dakota – 0.4% | |||||||||||
SD Housing Development Authority | |||||||||||
Homeownership Mortgage, Series 2003 C-1, SPA: Landesbank Hessen-Thüringen 0.260% 05/01/32 (09/06/12) (a)(b) | 3,900,000 | 3,900,000 | |||||||||
SD Sioux Falls | |||||||||||
Series 2007-1886, GTY AGMT: Wells Fargo Bank N.A. 0.210% 11/15/33 (09/06/12) (a)(b) | 12,165,000 | 12,165,000 | |||||||||
South Dakota Total | 16,065,000 | ||||||||||
Tennessee – 0.3% | |||||||||||
TN Blount County Public Building Authority | |||||||||||
Series 2009 E-7-A, LOC: Branch Banking & Trust 0.160% 06/01/39 (09/05/12) (a)(b) | 5,370,000 | 5,370,000 | |||||||||
Series 2009 E-8-A, LOC: Branch Banking & Trust 0.160% 06/01/37 (09/05/12) (a)(b) | 1,470,000 | 1,470,000 | |||||||||
Series 2009 E-9-A, LOC: Branch Banking & Trust 0.160% 06/01/30 (09/05/12) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
TN Hawkins County Industrial Development Board | |||||||||||
Leggett & Platt, Inc., Series 1988 B, LOC: Wells Fargo Bank N.A. 0.360% 10/01/27 (09/05/12) (a)(b) | 1,750,000 | 1,750,000 | |||||||||
Tennessee Total | 13,590,000 | ||||||||||
Texas – 4.5% | |||||||||||
TX Bexar County Housing Finance Corp. | |||||||||||
Multi-Family Housing, Perrin Park Apartments, Series 1996, LOC: Northern Trust Co. 0.190% 06/01/28 (09/06/12) (a)(b) | 10,375,000 | 10,375,000 |
Par ($) | Value ($) | ||||||||||
TX Deutsche Bank Spears/Lifers Trust | |||||||||||
Caddo Mills Texas Independent School District, Series 2008-473, Insured: PSF, GTY AGMT: Deutsche Bank AG 0.240% 08/15/42 (09/06/12) (a)(b) | 10,320,000 | 10,320,000 | |||||||||
Houston Taxes Utility Systems, Series 2008-511, GTY AGMT: Deutsche Bank AG 0.240% 11/15/25 (09/06/12) (a)(b) | 12,615,000 | 12,615,000 | |||||||||
Lovejoy Independent School District, Series 2008-514, GTY AGMT: PSF, LIQ FAC: Deutsche Bank AG 0.210% 02/15/38 (09/06/12) (a)(b) | 3,520,000 | 3,520,000 | |||||||||
Victoria Independent School District, Series 2008-604, GTY AGMT: PSF, LIQ FAC: Deutsche Bank AG 0.210% 02/15/37 (09/06/12) (a)(b) | 7,665,000 | 7,665,000 | |||||||||
TX Gregg County Housing Finance Corp. | |||||||||||
Bailey Properties LLC, Series 2004 A, Guarantor: FNMA, LIQ FAC: FNMA 0.170% 02/15/23 (09/06/12) (a)(b) | 4,565,000 | 4,565,000 | |||||||||
Summer Green LLC, Series 2004 A, Guarantor: FNMA, LIQ FAC: FNMA 0.170% 02/15/23 (09/06/12) (a)(b) | 2,360,000 | 2,360,000 | |||||||||
TX Harris County Cultural Education Facilities Finance Corp. | |||||||||||
Memorial Hermann Hospital System, Series 2008 D-3, LOC: Northern Trust Co. 0.160% 06/01/29 (09/06/12) (a)(b) | 5,000,000 | 5,000,000 |
See Accompanying Notes to Financial Statements.
20
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
TX Harris County Health Facilities Development Corp. | |||||||||||
Gulf Coast Regional Blood Center, Series 1992, LOC: JPMorgan Chase Bank 0.280% 04/01/17 (09/06/12) (a)(b) | 1,350,000 | 1,350,000 | |||||||||
TX Harris County Industrial Development Corp. | |||||||||||
Baytank, Inc., Series 1998, LOC: Den Norske Bank 0.180% 02/01/20 (09/05/12) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
TX JPMorgan Chase Putters/Drivers Trust | |||||||||||
Richardson TX Independent School District, Series 2012-4238, Insured: PSF, LIQ FAC: Deutsche Bank AG 0.210% 02/15/19 (09/06/12) (a)(b)(c) | 3,320,000 | 3,320,000 | |||||||||
Lake Travis TX Independent School District, Series 2012-4239, Insured: PSF, LIQ FAC: Deutsche Bank AG 0.210% 02/15/19 (09/06/12) (a)(b)(c) | 3,750,000 | 3,750,000 | |||||||||
Sheldon TX Independent School District, Series 2012-4245, Insured: PSF, LIQ FAC: Deutsche Bank AG 0.210% 02/15/15 (09/06/12) (a)(b)(c) | 5,690,000 | 5,690,000 | |||||||||
Series 2012-4262, LIQ FAC: JPMorgan Chase Bank 0.200% 08/30/13 (09/04/12) (a)(b)(c) | 19,700,000 | 19,700,000 | |||||||||
TX Mesquite Independent School District | |||||||||||
Series 2003 A, Insured: PSF, SPA: JPMorgan Chase Bank 0.210% 08/01/29 (09/06/12) (a)(b) | 18,960,000 | 18,960,000 | |||||||||
TX RBC Municipal Products, Inc. Trust | |||||||||||
Harris County Texas Cultural Educational Facility, Memorial Hermann Healthcare System, Series 2011 E-18, LOC: Royal Bank of Canada 0.170% 06/01/32 (09/06/12) (a)(b)(c) | 17,000,000 | 17,000,000 |
Par ($) | Value ($) | ||||||||||
TX Round Rock Independent School District | |||||||||||
Series 2007, Guarantor: PSF, LIQ FAC: Wells Fargo Bank N.A. 0.190% 08/01/32 (09/06/12) (a)(b) | 10,795,000 | 10,795,000 | |||||||||
TX San Antonio Education Facilities Corp. | |||||||||||
University of the Incarnate Word, Series 2001, LOC: JPMorgan Chase Bank 0.230% 12/01/21 (09/06/12) (a)(b) | 5,160,000 | 5,160,000 | |||||||||
TX State | |||||||||||
Series 2012 A, LIQ FAC: State Street Bank & Trust Co. 0.170% 12/01/42 (09/05/12) (a)(b) | 8,335,000 | 8,335,000 | |||||||||
TX Tarrant County Cultural Educational Facilities Finance Corp. | |||||||||||
Baylor Healthcare System, Series 2011, LOC: Northern Trust Co. 0.160% 11/15/50 (09/05/12) (a)(b) | 3,500,000 | 3,500,000 | |||||||||
TX Thruway Authority | |||||||||||
0.230% 11/07/12 | 6,000,000 | 6,000,000 | |||||||||
0.240% 10/16/12 | 7,000,000 | 7,000,000 | |||||||||
0.240% 10/30/12 | 13,000,000 | 13,000,000 | |||||||||
TX University of Texas | |||||||||||
Financing System, Series 2007 B, LIQ FAC: University of Texas Board of Regents 0.140% 08/01/34 (09/06/12) (a)(b) | 10,320,000 | 10,320,000 | |||||||||
Texas Total | 198,300,000 | ||||||||||
Utah – 0.1% | |||||||||||
UT Housing Corp. | |||||||||||
Multi-Family Housing, Miller Timbergate Apartments LLC, Series 2009 A, LIQ FAC: FHLMC, GTY AGMT: FNMA 0.220% 04/01/42 (09/06/12) (a)(b) | 3,125,000 | 3,125,000 | |||||||||
Utah Total | 3,125,000 |
See Accompanying Notes to Financial Statements.
21
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
Vermont – 0.2% | |||||||||||
VT Educational & Health Buildings Financing Agency | |||||||||||
Brattleboro Memorial Hospital, Series 2011 A, LOC: TD Bank N.A. 0.160% 12/01/31 (09/06/12) (a)(b) | 7,300,000 | 7,300,000 | |||||||||
Vermont Total | 7,300,000 | ||||||||||
Virginia – 1.1% | |||||||||||
VA Chesapeake Redevelopment & Housing Authority | |||||||||||
Great Bridge Apartments LLC, Series 2008 A, DPCE: FNMA, LIQ FAC: FNMA 0.190% 01/15/41 (09/06/12) (a)(b) | 18,625,000 | 18,625,000 | |||||||||
VA Fairfax County Industrial Development Authority | |||||||||||
Inova Health System Foundation, Fairfax Hospital: Series 1988 C, LOC: Northern Trust Co. 0.170% 10/01/25 (09/05/12) (a)(b) 8,200,000 8,200,000 Series 1988 D, LOC: Northern Trust Co. 0.170% 10/01/25 (09/05/12) (a)(b) | 3,800,000 | 3,800,000 | |||||||||
VA Loudoun County Industrial Development Authority | |||||||||||
Jack Kent Cooke Foundation, Series 2004, LOC: Northern Trust Co. 0.170% 06/01/34 (09/05/12) (a)(b) | 12,500,000 | 12,500,000 | |||||||||
VA Winchester Industrial Development Authority | |||||||||||
Westminster-Canterbury of Winchester, Inc., Series 2005 B, LOC: Branch Banking & Trust 0.160% 01/01/35 (09/06/12) (a)(b) | 4,040,000 | 4,040,000 | |||||||||
Virginia Total | 47,165,000 |
Par ($) | Value ($) | ||||||||||
Washington – 0.8% | |||||||||||
WA Deutsche Bank Spears/Lifers Trust | |||||||||||
King County, Series 2008-598, LIQ FAC: Deutsche Bank AG 0.210% 01/01/28 (09/06/12) (a)(b) | 7,000,000 | 7,000,000 | |||||||||
Washington State, Series 2008-599, LIQ FAC: Deutsche Bank AG 0.210% 01/01/30 (09/06/12) (a)(b) | 9,805,000 | 9,805,000 | |||||||||
WA Eclipse Funding Trust | |||||||||||
King County, Series 2007, LOC: U.S. Bank N.A. 0.170% 12/01/31 (09/06/12) (a)(b) | 3,350,000 | 3,350,000 | |||||||||
WA Housing Finance Commission | |||||||||||
Artspace Everett LP, Series 2008 B, Credit Support: FHLMC, LIQ FAC: FHLMC 0.170% 12/01/41 (09/05/12) (a)(b) | 3,200,000 | 3,200,000 | |||||||||
Pioneer Human Services, Series 2009 D, LOC: U.S. Bank N.A. 0.180% 07/01/29 (09/05/12) (a)(b) | 2,305,000 | 2,305,000 | |||||||||
Single Family Housing, Series 2009, DPCE: GNMA/FNMA/FHLMC, LIQ FAC: State Street Bank & Trust Co. 0.160% 06/01/39 (09/06/12) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
The Evergreen School, Series 2002, LOC: Wells Fargo Bank N.A. 0.270% 07/01/28 (09/06/12) (a)(b) | 1,320,000 | 1,320,000 | |||||||||
WA Seattle Housing Authority | |||||||||||
Bayview Manor Homes, Series 1994 B, LOC: U.S. Bank N.A. 0.160% 05/01/19 (09/06/12) (a)(b) | 1,905,000 | 1,905,000 | |||||||||
Washington Total | 34,885,000 |
See Accompanying Notes to Financial Statements.
22
BofA Tax-Exempt Reserves
August 31, 2012
Municipal Bonds (continued)
Par ($) | Value ($) | ||||||||||
West Virginia – 0.5% | |||||||||||
WV Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2007-385, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.290% 04/01/30 (09/06/12) (a)(b) | 2,605,000 | 2,605,000 | |||||||||
WV Economic Development Authority | |||||||||||
Appalachian Power Co., Series 2009 B, LOC: Sumitomo Mitsui Banking 0.160% 12/01/42 (09/06/12) (a)(b) | 16,600,000 | 16,600,000 | |||||||||
WV Hospital Finance Authority | |||||||||||
West Virginia University Hospital, Series 2009 A, LOC: Branch Banking & Trust 0.160% 06/01/33 (09/06/12) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
West Virginia Total | 22,205,000 | ||||||||||
Wisconsin – 1.2% | |||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Aurora Health Care, Inc., Series 2012 D, LOC: Bank of Montreal 0.150% 07/15/28 (09/06/12) (a)(b) | 33,325,000 | 33,325,000 | |||||||||
Bay Area Medical Center, Inc., Series 2008, LOC: Harris N.A. 0.190% 02/01/38 (09/04/12) (a)(b) | 15,300,000 | 15,300,000 |
Par ($) | Value ($) | ||||||||||
WI Housing & Economic Development Authority | |||||||||||
Series 2003 E, Insured: Government of Authority, SPA: FHLB 0.280% 05/01/43 (09/05/12) (a)(b) | 4,135,000 | 4,135,000 | |||||||||
Wisconsin Total | 52,760,000 | ||||||||||
Total Municipal Bonds (cost of $4,404,522,173) | 4,404,522,173 | ||||||||||
Total Investments – 100.6% (cost of $4,404,522,173) (f) | 4,404,522,173 | ||||||||||
Other Assets & Liabilities, Net – (0.6)% | (27,011,468 | ) | |||||||||
Net Assets – 100.0% | 4,377,510,705 |
Notes to Investment Portfolio:
(a) Parenthetical date represents the effective maturity date for the security.
(b) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2012, these securities, which are not illiquid, amounted to $386,355,000 or 8.8% of net assets for the Fund.
(d) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2012.
(e) Security purchased on a delayed delivery basis.
(f) Cost for federal income tax purposes is $4,404,522,173.
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Municipal Bonds | $ | — | $ | 4,404,522,173 | $ | — | $ | 4,404,522,173 | |||||||||||
Total Investments | $ | — | $ | 4,404,522,173 | $ | — | $ | 4,404,522,173 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
23
BofA Tax-Exempt Reserves
August 31, 2012
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 100.6 | ||||||
Other Assets & Liabilities, Net | (0.6 | ) | |||||
100.0 |
Acronym | Name | ||||||
AGMC | Assured Guaranty Municipal Corp. | ||||||
BHAC | Berkshire Hathaway Assurance Corp. | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FHLB | Federal Home Loan Bank | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
FSA | Financial Security Assurance, Inc. | ||||||
GNMA | Government National Mortgage Association | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
NPFGC | National Public Finance Guarantee Corp. | ||||||
PSF | Permanent School Fund | ||||||
Putters | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
24
Statement of Assets and Liabilities – BofA Tax-Exempt Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 4,404,522,173 | |||||||||
Cash | 6,970 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 1,075 | ||||||||||
Interest | 5,188,095 | ||||||||||
Trustees' deferred compensation plan | 22,263 | ||||||||||
Prepaid expenses | 67,204 | ||||||||||
Total Assets | 4,409,807,780 | ||||||||||
Liabilities | Expense reimbursement due to investment advisor | 15,855 | |||||||||
Payable for: | |||||||||||
Investments purchased | 4,139,049 | ||||||||||
Investments purchased on a delayed delivery basis | 27,230,090 | ||||||||||
Fund shares repurchased | 50,000 | ||||||||||
Distributions | 1,296 | ||||||||||
Investment advisory fee | 541,332 | ||||||||||
Administration fee | 142,696 | ||||||||||
Pricing and bookkeeping fees | 22,786 | ||||||||||
Transfer agent fee | 10,690 | ||||||||||
Trustees' fees | 5,494 | ||||||||||
Custody fee | 15,579 | ||||||||||
Chief compliance officer expenses | 2,516 | ||||||||||
Trustees' deferred compensation plan | 22,263 | ||||||||||
Other liabilities | 97,429 | ||||||||||
Total Liabilities | 32,297,075 | ||||||||||
Net Assets | 4,377,510,705 | ||||||||||
Net Assets Consist of | Paid-in capital | 4,377,464,556 | |||||||||
Undistributed net investment income | 241,209 | ||||||||||
Accumulated net realized loss | (195,060 | ) | |||||||||
Net Assets | 4,377,510,705 |
See Accompanying Notes to Financial Statements.
25
Statement of Assets and Liabilities (continued) – BofA Tax-Exempt Reserves
August 31, 2012
Adviser Class Shares | Net assets | $ | 5,638,451 | ||||||||
Shares outstanding | 5,638,639 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares (1) | Net assets | $ | 1,104,176,949 | ||||||||
Shares outstanding | 1,104,214,292 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 7,429,413 | ||||||||
Shares outstanding | 7,429,654 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares (1) | Net assets | $ | 360,030,712 | ||||||||
Shares outstanding | 360,042,649 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 61,654,376 | ||||||||
Shares outstanding | 61,656,444 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares (1) | Net assets | $ | 4,261,464 | ||||||||
Shares outstanding | 4,261,603 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 217,898 | ||||||||
Shares outstanding | 217,905 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 2,834,101,442 | ||||||||
Shares outstanding | 2,834,197,536 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
26
Statement of Operations – BofA Tax-Exempt Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 10,180,321 | |||||||||
Expenses | Investment advisory fee | 7,223,780 | |||||||||
Administration fee | 4,675,853 | ||||||||||
Distribution fee: | |||||||||||
Class A Shares (1) | 58 | ||||||||||
Daily Class Shares | 19,450 | ||||||||||
Investor Class Shares (1) | 4,168 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 20,543 | ||||||||||
Class A Shares (1) | 144 | ||||||||||
Daily Class Shares | 13,893 | ||||||||||
Investor Class Shares (1) | 10,421 | ||||||||||
Liquidity Class Shares | 545 | ||||||||||
Retail A Shares (1) | 532 | ||||||||||
Shareholder administration fee: | |||||||||||
Class A Shares (1) | 58 | ||||||||||
Institutional Class Shares | 31,623 | ||||||||||
Trust Class Shares | 3,146,191 | ||||||||||
Transfer agent fee | 92,014 | ||||||||||
Pricing and bookkeeping fees | 220,847 | ||||||||||
Trustees' fees | 76,683 | ||||||||||
Custody fee | 67,191 | ||||||||||
Chief compliance officer expenses | 14,347 | ||||||||||
Other expenses | 506,939 | ||||||||||
Total Expenses | 16,125,280 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (3,634,425 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (18,820 | ) | |||||||||
Class A Shares (1) | (240 | ) | |||||||||
Daily Class Shares | (32,334 | ) | |||||||||
Institutional Capital Shares (1) | (25 | ) | |||||||||
Institutional Class Shares | (18,014 | ) | |||||||||
Investor Class Shares (1) | (13,793 | ) | |||||||||
Liquidity Class Shares | (500 | ) | |||||||||
Retail A Shares (1) | (339 | ) | |||||||||
Trust Class Shares | (2,534,016 | ) | |||||||||
Expense reductions | (429 | ) | |||||||||
Net Expenses | 9,872,345 | ||||||||||
Net Investment Income | 307,976 | ||||||||||
Net realized loss on investments | (195,060 | ) | |||||||||
Net Increase Resulting from Operations | 112,916 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
27
Statement of Changes in Net Assets – BofA Tax-Exempt Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2012 ($) | 2011 ($) | |||||||||||||
Operations | Net investment income | 307,976 | 2,552,603 | ||||||||||||
Net realized gain (loss) on investments | (195,060 | ) | 579,196 | ||||||||||||
Net increase resulting from operations | 112,916 | 3,131,799 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (943 | ) | — | ||||||||||||
Capital Class Shares (1) | (387,277 | ) | (1,618,680 | ) | |||||||||||
Class A Shares (1) | — | (13 | ) | ||||||||||||
Daily Class Shares | (652 | ) | (40 | ) | |||||||||||
G-Trust Shares (1) | — | (362,830 | ) | ||||||||||||
Institutional Capital Shares (1) | (119,639 | ) | — | ||||||||||||
Institutional Class Shares | (12,510 | ) | (92,088 | ) | |||||||||||
Investor Class Shares (1) | (592 | ) | (12 | ) | |||||||||||
Liquidity Class Shares | (28 | ) | (113 | ) | |||||||||||
Retail A Shares (1) | — | (1,877 | ) | ||||||||||||
Trust Class Shares | (417,590 | ) | (475,187 | ) | |||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | (848 | ) | (52 | ) | |||||||||||
Capital Class Shares (1) | (140,861 | ) | (7,325 | ) | |||||||||||
Class A Shares (1) | — | (3 | ) | ||||||||||||
Daily Class Shares | (600 | ) | (37 | ) | |||||||||||
G-Trust Shares (1) | — | (1,539 | ) | ||||||||||||
Institutional Capital Shares (1) | (43,185 | ) | — | ||||||||||||
Institutional Class Shares | (8,497 | ) | (391 | ) | |||||||||||
Investor Class Shares (1) | (539 | ) | (7 | ) | |||||||||||
Liquidity Class Shares | (26 | ) | (23 | ) | |||||||||||
Retail A Shares (1) | — | (33 | ) | ||||||||||||
Trust Class Shares | (383,075 | ) | (12,623 | ) | |||||||||||
Total distributions to shareholders | (1,516,862 | ) | (2,572,873 | ) | |||||||||||
Net Capital Stock Transactions | (330,773,237 | ) | (1,293,022,193 | ) | |||||||||||
Total decrease in net assets | (332,177,183 | ) | (1,292,463,267 | ) | |||||||||||
Net Assets | Beginning of period | 4,709,687,888 | 6,002,151,155 | ||||||||||||
End of period | 4,377,510,705 | 4,709,687,888 | |||||||||||||
Undistributed net investment income at end of period | 241,209 | 1,011,131 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
28
Statement of Changes in Net Assets (continued) – BofA Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 29,104,336 | 29,104,336 | 184,222,477 | 184,222,477 | |||||||||||||||
Distributions reinvested | 362 | 362 | 13 | 13 | |||||||||||||||
Redemptions | (35,259,406 | ) | (35,259,406 | ) | (221,150,137 | ) | (221,150,137 | ) | |||||||||||
Net decrease | (6,154,708 | ) | (6,154,708 | ) | (36,927,647 | ) | (36,927,647 | ) | |||||||||||
Capital Class Shares (1) | |||||||||||||||||||
Subscriptions | 2,226,712,244 | 2,226,712,244 | 4,567,045,685 | 4,567,045,685 | |||||||||||||||
Conversion | 7,263,638 | 7,263,638 | — | — | |||||||||||||||
Distributions reinvested | 52,273 | 52,273 | 353,235 | 353,235 | |||||||||||||||
Redemptions | (2,335,011,703 | ) | (2,335,011,703 | ) | (5,265,182,780 | ) | (5,265,182,780 | ) | |||||||||||
Net decrease | (100,983,548 | ) | (100,983,548 | ) | (697,783,860 | ) | (697,783,860 | ) | |||||||||||
Class A Shares (1) | |||||||||||||||||||
Subscriptions | 275 | 275 | 4,310 | 4,310 | |||||||||||||||
Conversion | (700,348 | ) | (700,348 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 3 | 3 | |||||||||||||||
Redemptions | (2,591 | ) | (2,591 | ) | (476,102 | ) | (476,102 | ) | |||||||||||
Net decrease | (702,664 | ) | (702,664 | ) | (471,789 | ) | (471,789 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 11,391,480 | 11,391,480 | 14,409,950 | 14,409,950 | |||||||||||||||
Redemptions | (10,053,610 | ) | (10,053,610 | ) | (46,519,740 | ) | (46,519,740 | ) | |||||||||||
Net increase (decrease) | 1,337,870 | 1,337,870 | (32,109,790 | ) | (32,109,790 | ) | |||||||||||||
Institutional Capital Shares (1) | |||||||||||||||||||
Subscriptions | 322,885,927 | 322,885,927 | 325,419,727 | 325,419,727 | |||||||||||||||
Distributions reinvested | 11 | 11 | 27 | 27 | |||||||||||||||
Redemptions | (291,367,848 | ) | (291,367,848 | ) | (421,306,304 | ) | (421,306,304 | ) | |||||||||||
Net increase (decrease) | 31,518,090 | 31,518,090 | (95,886,550 | ) | (95,886,550 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 352,562,125 | 352,562,125 | 700,538,756 | 700,538,756 | |||||||||||||||
Distributions reinvested | 11,158 | 11,158 | 51,755 | 51,755 | |||||||||||||||
Redemptions | (379,530,414 | ) | (379,530,414 | ) | (799,953,176 | ) | (799,953,176 | ) | |||||||||||
Net decrease | (26,957,131 | ) | (26,957,131 | ) | (99,362,665 | ) | (99,362,665 | ) | |||||||||||
Investor Class Shares (1) | |||||||||||||||||||
Subscriptions | 38,808,291 | 38,808,291 | 9,622,470 | 9,622,470 | |||||||||||||||
Conversion | 700,348 | 700,348 | — | — | |||||||||||||||
Distributions reinvested | 442 | 442 | 5 | 6 | |||||||||||||||
Redemptions | (37,780,694 | ) | (37,780,694 | ) | (8,422,603 | ) | (8,422,603 | ) | |||||||||||
Net increase | 1,728,387 | 1,728,387 | 1,199,872 | 1,199,873 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
29
Statement of Changes in Net Assets (continued) – BofA Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Distributions reinvested | 54 | 54 | 134 | 134 | |||||||||||||||
Redemptions | — | — | (12,193,094 | ) | (12,193,094 | ) | |||||||||||||
Net increase (decrease) | 54 | 54 | (12,192,960 | ) | (12,192,960 | ) | |||||||||||||
Retail A Shares (1) | |||||||||||||||||||
Subscriptions | 107,979 | 107,979 | 1,029,082 | 1,029,082 | |||||||||||||||
Conversion | (7,263,638 | ) | (7,263,638 | ) | — | — | |||||||||||||
Distributions reinvested | — | — | 1,872 | 1,872 | |||||||||||||||
Redemptions | (47,952 | ) | (47,954 | ) | (3,654,842 | ) | (3,654,842 | ) | |||||||||||
Net decrease | (7,203,611 | ) | (7,203,613 | ) | (2,623,888 | ) | (2,623,888 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 2,652,443,096 | 2,652,443,096 | 2,533,937,683 | 2,533,937,683 | |||||||||||||||
Distributions reinvested | 1,992 | 1,992 | 4,494 | 4,494 | |||||||||||||||
Redemptions | (2,875,801,062 | ) | (2,875,801,062 | ) | (2,850,805,094 | ) | (2,850,805,094 | ) | |||||||||||
Net decrease | (223,355,974 | ) | (223,355,974 | ) | (316,862,917 | ) | (316,862,917 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
30
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | — | (e) | 0.0089 | 0.0229 | ||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.0089 | 0.0229 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | — | (e) | (0.0089 | ) | (0.0229 | ) | ||||||||||||||
From net realized gains | — | (d) | — | (d) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (d) | — | (d) | — | (e) | (0.0089 | ) | (0.0229 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.02 | % | 0.00 | %(h) | 0.00 | %(h) | 0.89 | % | 2.32 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.21 | % | 0.31 | % | 0.35 | % | 0.48 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.30 | % | 0.21 | % | 0.17 | % | 0.05 | % | 0.06 | % | |||||||||||||
Net investment income (j) | — | — | %(h) | — | %(h) | 0.78 | % | 2.11 | %(i) | ||||||||||||||
Net assets, end of period (000s) | $ | 5,638 | $ | 11,797 | $ | 48,725 | $ | 71,050 | $ | 110,969 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
31
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (e) | 0.001 | 0.0014 | 0.0113 | 0.0254 | |||||||||||||||||
Net realized gain (loss) on investments | — | (e) | — | (e) | — | (f) | — | (f) | — | (f) | |||||||||||||
Total from investment operations | — | (e) | 0.001 | 0.0014 | 0.0113 | 0.0254 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | (0.0254 | ) | |||||||||||||
From net realized gains | — | (e) | — | (e) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | (0.0254 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.04 | % | 0.10 | % | 0.13 | % | 1.14 | % | 2.57 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.19 | % | 0.20 | % | 0.20 | % | 0.23 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.07 | % | 0.07 | % | 0.05 | % | 0.06 | % | |||||||||||||
Net investment income (j) | 0.02 | % | 0.10 | % | 0.14 | % | 1.03 | % | 2.40 | %(i) | |||||||||||||
Net assets, end of period (000s) | $ | 1,104,177 | $ | 1,205,520 | $ | 1,903,203 | $ | 3,922,964 | $ | 2,750,559 |
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(d) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(e) Rounds to less than $0.001 per share.
(f) Rounds to less than $0.0001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
32
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (e) | 0.0062 | 0.0194 | |||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (e) | 0.0062 | 0.0194 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0062 | ) | (0.0194 | ) | |||||||||||||
From net realized gains | — | (d) | — | (d) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (d) | — | (d) | — | (e) | (0.0062 | ) | (0.0194 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.02 | % | 0.00 | %(h) | 0.00 | %(h) | 0.62 | % | 1.96 | %(i) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.21 | % | 0.30 | % | 0.34 | % | 0.76 | % | 0.80 | % | |||||||||||||
Waiver/Reimbursement | 0.66 | % | 0.57 | % | 0.53 | % | 0.12 | % | 0.06 | % | |||||||||||||
Net investment income (j) | — | %(h) | — | %(h) | — | 0.64 | % | 1.56 | %(i) | ||||||||||||||
Net assets, end of period (000s) | $ | 7,429 | $ | 6,093 | $ | 38,206 | $ | 59,499 | $ | 95,228 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
33
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (e) | 0.001 | 0.0014 | 0.0113 | 0.0254 | |||||||||||||||||
Net realized gain (loss) on investments | — | (e) | — | (e) | — | (f) | — | (f) | — | (f) | |||||||||||||
Total from investment operations | — | (e) | 0.001 | 0.0014 | 0.0113 | 0.0254 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | (0.0254 | ) | |||||||||||||
From net realized gains | — | (e) | — | (e) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | (0.0254 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.04 | % | 0.10 | % | 0.13 | % | 1.14 | % | 2.57 | % | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.19 | % | 0.20 | % | 0.20 | % | 0.23 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.07 | % | 0.07 | % | 0.05 | % | 0.06 | % | |||||||||||||
Net investment income (i) | 0.02 | % | 0.10 | % | 0.14 | % | 1.14 | % | 2.52 | % | |||||||||||||
Net assets, end of period (000s) | $ | 360,031 | $ | 328,612 | $ | 424,460 | $ | 590,847 | $ | 708,813 |
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(d) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(e) Rounds to less than $0.001 per share.
(f) Rounds to less than $0.0001 per share.
(g) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(h) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
34
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | 0.001 | 0.0010 | 0.0109 | 0.0250 | |||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | 0.001 | 0.0010 | 0.0109 | 0.0250 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | (0.001 | ) | (0.0010 | ) | (0.0109 | ) | (0.0250 | ) | |||||||||||||
From net realized gains | — | (d) | — | (d) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (d) | (0.001 | ) | (0.0010 | ) | (0.0109 | ) | (0.0250 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.03 | % | 0.06 | % | 0.09 | % | 1.10 | % | 2.53 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.21 | % | 0.23 | % | 0.24 | % | 0.27 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.10 | % | 0.08 | % | 0.07 | % | 0.05 | % | 0.06 | % | |||||||||||||
Net investment income (i) | — | %(j) | 0.07 | % | 0.10 | % | 1.06 | % | 2.31 | %(h) | |||||||||||||
Net assets, end of period (000s) | $ | 61,654 | $ | 88,637 | $ | 187,997 | $ | 445,549 | $ | 469,574 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
(j) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
35
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (e) | — | 0.0080 | 0.0219 | |||||||||||||||||
Net realized gain (loss) on investments | — | (e) | — | (e) | — | (f) | — | (f) | — | (f) | |||||||||||||
Total from investment operations | — | (e) | — | (e) | — | (f) | 0.0080 | 0.0219 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (f) | (0.0080 | ) | (0.0219 | ) | |||||||||||||
From net realized gains | — | (e) | — | (e) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (e) | — | (e) | — | (f) | (0.0080 | ) | (0.0219 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (g)(h) | 0.02 | % | 0.00 | %(i) | 0.00 | % | 0.81 | % | 2.21 | %(j) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (k) | 0.21 | % | 0.27 | % | 0.34 | % | 0.57 | % | 0.55 | % | |||||||||||||
Waiver/Reimbursement | 0.41 | % | 0.35 | % | 0.30 | % | 0.06 | % | 0.05 | % | |||||||||||||
Net investment income (k) | — | — | %(i) | — | 0.86 | % | 1.88 | %(j) | |||||||||||||||
Net assets, end of period (000s) | $ | 4,261 | $ | 2,534 | $ | 1,333 | $ | 8,960 | $ | 13,214 |
(a) On October 1, 2011, Class A shares were converted into Investor Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(d) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(e) Rounds to less than $0.001 per share.
(f) Rounds to less than $0.0001 per share.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(i) Rounds to less than 0.01%.
(j) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
36
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | 0.0001 | 0.0098 | 0.0239 | |||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | 0.0001 | 0.0098 | 0.0239 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | (0.0001 | ) | (0.0098 | ) | (0.0239 | ) | |||||||||||||
From net realized gains | — | (d) | — | (d) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (d) | — | (d) | (0.0001 | ) | (0.0098 | ) | (0.0239 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.02 | % | 0.00 | %(h) | 0.01 | % | 0.99 | % | 2.42 | % | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.21 | % | 0.31 | % | 0.33 | % | 0.38 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.30 | % | 0.21 | % | 0.19 | % | 0.15 | % | 0.16 | % | |||||||||||||
Net investment income (i) | — | — | %(h) | 0.01 | % | 1.11 | % | 2.36 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 218 | $ | 218 | $ | 12,412 | $ | 29,865 | $ | 77,169 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) Rounds to less than 0.01%.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
37
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (d) | 0.0004 | 0.0103 | 0.0244 | |||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (e) | — | (e) | — | (e) | |||||||||||||
Total from investment operations | — | (d) | — | (d) | 0.0004 | 0.0103 | 0.0244 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | (0.0004 | ) | (0.0103 | ) | (0.0244 | ) | |||||||||||||
From net realized gains | — | (d) | — | (d) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (d) | — | (d) | (0.0004 | ) | (0.0103 | ) | (0.0244 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.02 | % | 0.02 | % | 0.04 | % | 1.04 | % | 2.47 | %(h) | |||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.21 | % | 0.28 | % | 0.30 | % | 0.33 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.16 | % | 0.09 | % | 0.07 | % | 0.05 | % | 0.06 | % | |||||||||||||
Net investment income (i) | — | 0.02 | % | 0.04 | % | 1.05 | % | 2.24 | %(h) | ||||||||||||||
Net assets, end of period (000s) | $ | 2,834,101 | $ | 3,058,369 | $ | 3,374,811 | $ | 5,587,196 | $ | 6,686,234 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Tax-Exempt Reserves was renamed BofA Tax-Exempt Reserves.
(c) On December 31, 2009, Columbia Tax-Exempt Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Tax-Exempt Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
38
Notes to Financial Statements – BofA Tax-Exempt Reserves
August 31, 2012
Note 1. Organization
BofA Tax-Exempt Reserves (the "Fund"), a series of BofA Funds Series Trust ("the Trust"), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income exempt from federal income tax, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers eight classes of shares: Adviser Class, Capital Class, Daily Class, Institutional Capital Class, Institutional Class, Investor Class, Liquidity Class and Trust Class shares. Each class of shares is offered continuously at net asset value. After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares. On October 1, 2011, Class A shares were converted into Investor Class shares and Retail A shares were converted into Capital Class shares.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
39
BofA Tax-Exempt Reserves, August 31, 2012
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from differing treatments for prior year undistributed tax-exempt income were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Loss | Paid-In Capital | |||||||||
$ | (138,667 | ) | $ | 67 | $ | 138,600 |
40
BofA Tax-Exempt Reserves, August 31, 2012
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from: | 2012 | 2011 | |||||||||
Tax-Exempt Income | $ | 911,794 | $ | 2,475,804 | |||||||
Ordinary Income* | 332,535 | 75,036 | |||||||||
Long-Term Capital Gains | 272,533 | 22,033 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | 252,627 | $ | — | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
As of August 31, 2012, the Fund had post-Act capital losses as follows:
Short-Term Losses | |||
$ | 195,060 |
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA Advisors, LLC ("BofA"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Funds. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Funds and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
41
BofA Tax-Exempt Reserves, August 31, 2012
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted distribution plans ("Distribution Plans") for the Daily Class, Investor Class and Liquidity Class shares of the Fund. The Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class, Daily Class, Investor Class and Liquidity Class shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
42
BofA Tax-Exempt Reserves, August 31, 2012
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Class A Shares* | 0.10 | % | 0.10 | % | |||||||
Daily Class Shares | 0.35 | % | 0.35 | % | |||||||
Investor Class Shares | 0.10 | % | 0.10 | % | |||||||
Liquidity Class Shares | 0.15 | %** | 0.25 | %*** | |||||||
Servicing Plans: | |||||||||||
Adviser Class Shares | 0.25 | % | 0.25 | % | |||||||
Class A Shares* | 0.25 | % | 0.25 | % | |||||||
Daily Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %** | 0.25 | %*** | |||||||
Retail A Shares**** | 0.09 | % | 0.09 | % |
* On October 1, 2011, the Fund's Class A shares were converted into the Fund's Investor Class shares.
** The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 at an annual rate of 0.10% of the Fund's Liquidity Class shares average daily net assets, so that combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012. The amount of the waiver is included in the fees waived by shareholder service provider on the Statement of Operations.
*** To the extent that the Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
**** On October 1, 2011, Retail A shares of the Fund converted into Capital Class shares of the Fund, which has not adopted a Servicing Plan for such share class.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Class A Shares* | 0.10 | % | 0.10 | % | |||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
* On October 1, 2011, the Fund's Class A shares were converted into the Fund's Investor Class shares, which has not adopted a Servicing Plan for such share class.
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012, so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense
43
BofA Tax-Exempt Reserves, August 31, 2012
limitation in effect at the time the expenses to be recovered were incurred.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the
Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 8/31/12 | |||||||||||||||
$ | 3,240,857 | $ | 3,595,998 | $ | 4,982,934 | $ | 11,819,789 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense
reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $429 for the Fund.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund
44
BofA Tax-Exempt Reserves, August 31, 2012
participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
Note 7. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 8. Significant Risks and Contingencies
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily
undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
45
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Tax-Exempt Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA Tax-Exempt Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
46
Federal Income Tax Information (Unaudited) – BofA Tax-Exempt Reserves
For the fiscal year ended August 31, 2012, 97.07% of the distributions from net investment income of the Fund qualifies as exempt interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
47
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
48
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member—Perry Consulting LLC (advisory firm), since March 2008; Consultant—MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
49
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
50
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Tax-Exempt Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
53
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Tax-Exempt Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-TER-42/265704-1012
BofATM Funds
Annual Report
August 31, 2012
BofA Treasury Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 7 | ||||||
Statement of Operations | 9 | ||||||
Statement of Changes in Net Assets | 10 | ||||||
Financial Highlights | 13 | ||||||
Notes to Financial Statements | 22 | ||||||
Report of Independent Registered Public Accounting Firm | 29 | ||||||
Federal Income Tax Information | 30 | ||||||
Fund Governance | 31 | ||||||
Important Information About This Report | 37 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
Understanding Your Expenses – BofA Treasury Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
g For shareholders who receive their account statements from Boston Financial Data Services, Inc., your account balance is available online at www.bofacapital.com or by calling Shareholder Services at 888.331.0904. (Institutional Investors, please call 800.353.0828.)
g For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6.
2. In the section of the table below titled "Expenses paid during the period," locate the amount for your share class. You will find this number in the column labeled "Actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to an annual fee of up to $20. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
03/01/12 – 08/31/12
Account value at the beginning of the period ($) | Account value at the end of the period ($) | Expenses paid during the period ($) | Fund's annualized expense ratio (%) | ||||||||||||||||||||||||||||
Actual | Hypothetical | Actual | Hypothetical | Actual | Hypothetical | Actual | |||||||||||||||||||||||||
Adviser Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.43 | 0.70 | 0.71 | 0.14 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds.
1
Investment Portfolio – BofA Treasury Reserves
August 31, 2012
Government & Agency Obligations – 33.8%
Par ($) | Value ($) | ||||||||||
U.S. Government Obligations – 33.8% | |||||||||||
U.S. Treasury Bill | |||||||||||
0.143% 01/03/13 (a) | 22,125,000 | 22,114,102 | |||||||||
0.145% 01/10/13 (a) | 44,245,000 | 44,221,655 | |||||||||
U.S. Treasury Note | |||||||||||
0.375% 09/30/12 | 66,000,000 | 66,014,268 | |||||||||
0.375% 10/31/12 | 6,700,000 | 6,702,993 | |||||||||
0.500% 11/30/12 | 293,800,000 | 294,035,435 | |||||||||
0.500% 05/31/13 | 40,000,000 | 40,094,652 | |||||||||
0.625% 01/31/13 | 134,470,000 | 134,721,790 | |||||||||
1.125% 12/15/12 | 167,000,000 | 167,452,387 | |||||||||
1.125% 06/15/13 | 116,745,000 | 117,595,400 | |||||||||
1.375% 09/15/12 | 149,500,000 | 149,569,644 | |||||||||
1.375% 10/15/12 | 147,000,000 | 147,214,274 | |||||||||
1.375% 11/15/12 | 38,000,000 | 38,093,842 | |||||||||
1.375% 01/15/13 | 360,845,000 | 362,458,036 | |||||||||
1.375% 02/15/13 | 350,500,000 | 352,405,629 | |||||||||
1.750% 04/15/13 | 196,505,000 | 198,408,554 | |||||||||
2.875% 01/31/13 | 45,695,000 | 46,207,232 | |||||||||
3.125% 04/30/13 | 106,750,000 | 108,818,350 | |||||||||
3.375% 11/30/12 | 232,500,000 | 234,324,744 | |||||||||
3.875% 10/31/12 | 96,350,000 | 96,936,508 | |||||||||
3.875% 02/15/13 | 61,775,000 | 62,809,530 | |||||||||
4.000% 11/15/12 | 134,000,000 | 135,056,553 | |||||||||
U.S. Government Obligations Total | 2,825,255,578 | ||||||||||
Total Government & Agency Obligations (cost of $2,825,255,578) | 2,825,255,578 | ||||||||||
Repurchase Agreements – 66.1% | |||||||||||
Repurchase agreement with ABN AMRO Bank US, dated 08/31/12, due 09/04/12 at 0.180%, collateralized by U.S. Treasury obligations with various maturities to 01/15/21, market value $306,000,067 (repurchase proceeds $300,006,000) | 300,000,000 | 300,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Bank of Nova Scotia, dated 08/31/12, due 09/04/12 at 0.170%, collateralized by U.S. Treasury obligations with various maturities to 05/15/14, market value $306,005,822 (repurchase proceeds $300,005,667) | 300,000,000 | 300,000,000 | |||||||||
Repurchase agreement with Barclays Capital, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Treasury obligations with various maturities to 04/15/16, market value $357,000,034 (repurchase proceeds $350,007,389) | 350,000,000 | 350,000,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 08/31/12, due 09/04/12 at 0.180%, collateralized by U.S. Treasury obligations with various maturities to 03/31/17, market value $306,000,093 (repurchase proceeds $300,006,000) | 300,000,000 | 300,000,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government Agency obligations with various maturities to 08/20/42, market value $204,000,000 (repurchase proceeds $200,004,222) | 200,000,000 | 200,000,000 |
See Accompanying Notes to Financial Statements.
2
BofA Treasury Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Citibank N.A., dated 08/31/12, due 09/04/12 at 0.180%, collateralized by U.S. Treasury obligations with various maturities to 02/29/16, market value $438,600,081 (repurchase proceeds $430,008,600) | 430,000,000 | 430,000,000 | |||||||||
Repurchase agreement with Credit Agricole, dated 08/31/12, due 09/04/12 at 0.180%, collateralized by U.S. Treasury obligations with various maturities to 11/15/22, market value $408,000,052 (repurchase proceeds $400,008,000) | 400,000,000 | 400,000,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/16/12, due 11/14/12 at 0.160%, collateralized by U.S. Treasury obligations with various maturities to 05/15/41, market value $102,000,048 (repurchase proceeds $100,040,000) | 100,000,000 | 100,000,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/28/12, due 11/26/12 at 0.160%, collateralized by U.S. Treasury obligations with various maturities to 06/15/14, market value $81,600,098 (repurchase proceeds $80,032,000) | 80,000,000 | 80,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Credit Suisse First Boston, dated 08/31/12, due 09/04/12 at 0.170%, collateralized by U.S. Treasury obligations with various maturities to 11/30/15, market value $336,604,135 (repurchase proceeds $330,006,233) | 330,000,000 | 330,000,000 | |||||||||
Repurchase agreement with Deutsche Bank Securities, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Treasury obligations with various maturities to 07/15/15, market value $274,380,076 (repurchase proceeds $269,005,679) | 269,000,000 | 269,000,000 | |||||||||
Repurchase agreement with Fixed Income Clearing Corp., dated 08/31/12, due 09/04/12 at 0.020%, collateralized by U.S. Treasury obligations with various maturities to 02/15/19, market value $112,200,363 (repurchase proceeds $110,000,244) | 110,000,000 | 110,000,000 | |||||||||
Repurchase agreement with Goldman Sachs & Co., dated 08/31/12, due 09/04/12 at 0.120%, collateralized by U.S. Treasury obligations with various maturities to 02/15/19, market value $81,601,125 (repurchase proceeds $80,001,067) | 80,000,000 | 80,000,000 |
See Accompanying Notes to Financial Statements.
3
BofA Treasury Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Goldman Sachs & Co., dated 08/31/12, due 09/04/12 at 0.200%, collateralized by a corporate bond and a U.S. Government Agency obligation maturing 10/30/12, market value $85,460,999 (repurchase proceeds $82,971,844) | 82,970,000 | 82,970,000 | |||||||||
Repurchase agreement with HSBC Securities USA, Inc., dated 08/31/12, due 09/04/12 at 0.170%, collateralized by U.S. Treasury obligations with various maturities to 01/15/17, market value $204,000,073 (repurchase proceeds $200,003,778) | 200,000,000 | 200,000,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/31/12, due 09/04/12 at 0.180%, collateralized by a U.S. Treasury obligation maturing 08/31/14, market value $81,601,943 (repurchase proceeds $80,001,600) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with J.P. Morgan Securities, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government Agency obligations with various maturities to 01/20/42, market value $204,002,483 (repurchase proceeds $200,004,222) | 200,000,000 | 200,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with RBC Capital Markets, dated 08/31/12, due 09/04/12 at 0.140%, collateralized by a U.S. Treasury obligation maturing 05/15/21, market value $81,600,114 (repurchase proceeds $80,001,244) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/31/12, due 09/04/12 at 0.170%, collateralized by U.S. Government Agency obligations with various maturities to 08/20/42, market value $163,200,001 (repurchase proceeds $160,003,022) | 160,000,000 | 160,000,000 | |||||||||
Repurchase agreement with RBS Securities, Inc., dated 08/31/12, due 09/04/12 at 0.170%, collateralized by a U.S. Treasury obligation maturing 07/15/15, market value $204,004,165 (repurchase proceeds $200,003,778) | 200,000,000 | 200,000,000 | |||||||||
Repurchase agreement with Societe Generale, dated 08/31/12, due 09/04/12 at 0.180%, collateralized by a U.S. Treasury obligation maturing 04/15/28, market value $306,000,019 (repurchase proceeds $300,006,000) | 300,000,000 | 300,000,000 |
See Accompanying Notes to Financial Statements.
4
BofA Treasury Reserves
August 31, 2012
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Societe Generale, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government obligations with various maturities to 02/20/41, market value $204,000,000 (repurchase proceeds $200,004,222) | 200,000,000 | 200,000,000 | |||||||||
Repurchase agreement with TD USA Securities, Inc., dated 08/31/12, due 09/04/12 at 0.160%, collateralized by U.S. Treasury obligations with various maturities to 02/14/13, market value $204,000,034 (repurchase proceeds $200,003,556) | 200,000,000 | 200,000,000 | |||||||||
Repurchase agreement with UBS Securities LLC, dated 08/21/12, due 11/19/12 at 0.160%, collateralized by U.S. Treasury obligations with various maturities to 08/15/42, market value $76,500,033 (repurchase proceeds $75,030,000) | 75,000,000 | 75,000,000 | |||||||||
Repurchase agreement with UBS Securities LLC, dated 08/31/12, due 09/04/12 at 0.180%, collateralized by U.S. Treasury obligations with various maturities to 02/15/38, market value $252,601,030 (repurchase proceeds $247,652,953) | 247,648,000 | 247,648,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with UBS Securities LLC, dated 08/31/12, due 09/04/12 at 0.190%, collateralized by U.S. Government Agency obligations with various maturities to 08/20/42, market value $204,000,000 (repurchase proceeds $200,004,222) | 200,000,000 | 200,000,000 | |||||||||
Repurchase agreement with UBS Securities LLC, dated 08/31/12, due 09/04/12 at 0.210%, collateralized by corporate bonds and U.S. Government Agency obligations with various maturities to 12/19/12, market value $42,734,701 (repurchase proceeds $41,490,968) | 41,490,000 | 41,490,000 | |||||||||
Total Repurchase Agreements (cost of $5,516,108,000) | 5,516,108,000 | ||||||||||
Total Investments – 99.9% (cost of $8,341,363,578) (b) | 8,341,363,578 | ||||||||||
Other Assets & Liabilities, Net – 0.1% | 10,609,859 | ||||||||||
Net Assets – 100.0% | 8,351,973,437 |
Notes to Investment Portfolio:
(a) The rate shown represents the annualized yield at the date of purchase.
(b) Cost for federal income tax purposes is $8,341,363,578.
See Accompanying Notes to Financial Statements.
5
BofA Treasury Reserves
August 31, 2012
The following table summarizes the inputs used, as of August 31, 2012, in valuing the Fund's assets:
Description | Quoted Prices (Level 1) | Other Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||
Total Government & Agency Obligations | $ | — | $ | 2,825,255,578 | $ | — | $ | 2,825,255,578 | |||||||||||
Total Repurchase Agreements | — | 5,516,108,000 | — | 5,516,108,000 | |||||||||||||||
Total Investments | $ | — | $ | 8,341,363,578 | $ | — | $ | 8,341,363,578 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2012, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2012, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Government & Agency Obligations | 33.8 | ||||||
Repurchase Agreements | 66.1 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities – BofA Treasury Reserves
August 31, 2012
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 2,825,255,578 | |||||||||
Repurchase agreements, at amortized cost approximating value | 5,516,108,000 | ||||||||||
Total investments, at value | 8,341,363,578 | ||||||||||
Cash | 449 | ||||||||||
Receivable for: | |||||||||||
Interest | 11,564,129 | ||||||||||
Expense reimbursement due from investment advisor | 17,780 | ||||||||||
Trustees' deferred compensation plan | 45,859 | ||||||||||
Prepaid expenses | 108,107 | ||||||||||
Total Assets | 8,353,099,902 | ||||||||||
Liabilities | Payable for: | ||||||||||
Distributions | 28,612 | ||||||||||
Investment advisory fee | 611,740 | ||||||||||
Administration fee | 251,411 | ||||||||||
Pricing and bookkeeping fees | 14,619 | ||||||||||
Transfer agent fee | 18,731 | ||||||||||
Trustees' fees | 7,854 | ||||||||||
Custody fee | 43,291 | ||||||||||
Chief compliance officer expenses | 3,774 | ||||||||||
Trustees' deferred compensation plan | 45,859 | ||||||||||
Other liabilities | 100,574 | ||||||||||
Total Liabilities | 1,126,465 | ||||||||||
Net Assets | 8,351,973,437 | ||||||||||
Net Assets Consist of | Paid-in capital | 8,352,019,856 | |||||||||
Overdistributed net investment income | (46,419 | ) | |||||||||
Net Assets | 8,351,973,437 |
See Accompanying Notes to Financial Statements.
7
Statement of Assets and Liabilities (continued) – BofA Treasury Reserves
August 31, 2012
Adviser Class Shares | Net assets | $ | 1,912,565,293 | ||||||||
Shares outstanding | 1,912,554,668 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 5,462,494,376 | ||||||||
Shares outstanding | 5,462,466,713 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 84,604,681 | ||||||||
Shares outstanding | 84,604,198 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares (1) | Net assets | $ | 411,743 | ||||||||
Shares outstanding | 411,737 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 266,787,873 | ||||||||
Shares outstanding | 266,786,282 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 5,580,018 | ||||||||
Shares outstanding | 5,579,988 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares (1) | Net assets | $ | 103,034,465 | ||||||||
Shares outstanding | 103,033,855 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 71,919,136 | ||||||||
Shares outstanding | 71,918,683 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 444,575,852 | ||||||||
Shares outstanding | 444,573,096 | ||||||||||
Net asset value per share | $ | 1.00 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
8
Statement of Operations – BofA Treasury Reserves
For the Year Ended August 31, 2012
($) | |||||||||||
Investment Income | Interest | 9,786,202 | |||||||||
Expenses | Investment advisory fee | 12,460,757 | |||||||||
Administration fee | 8,167,171 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 392,722 | ||||||||||
Investor Class Shares | 6,521 | ||||||||||
Investor II Class Shares (1) | 95,993 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 6,231,260 | ||||||||||
Daily Class Shares | 280,516 | ||||||||||
Investor Class Shares | 16,302 | ||||||||||
Investor II Class Shares (1) | 239,984 | ||||||||||
Liquidity Class Shares | 251,132 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 119,981 | ||||||||||
Investor II Class Shares (1) | 95,993 | ||||||||||
Trust Class Shares | 600,803 | ||||||||||
Transfer agent fee | 122,828 | ||||||||||
Pricing and bookkeeping fees | 152,491 | ||||||||||
Trustees' fees | 108,828 | ||||||||||
Custody fee | 194,746 | ||||||||||
Chief compliance officer expenses | 21,151 | ||||||||||
Other expenses | 640,194 | ||||||||||
Total Expenses | 30,199,373 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (12,447,967 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (6,231,145 | ) | |||||||||
Daily Class Shares | (673,385 | ) | |||||||||
Institutional Class Shares | (120,632 | ) | |||||||||
Investor Class Shares | (22,832 | ) | |||||||||
Investor II Class Shares (1) | (432,158 | ) | |||||||||
Liquidity Class Shares | (252,025 | ) | |||||||||
Trust Class Shares | (601,535 | ) | |||||||||
Expense reductions | (3,276 | ) | |||||||||
Net Expenses | 9,414,418 | ||||||||||
Net Investment Income | 371,784 | ||||||||||
Net Increase Resulting from Operations | 371,784 |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets – BofA Treasury Reserves
Increase (Decrease) in Net Assets | Year Ended August 31, 2012 ($) | Year Ended August 31, 2011 ($) | |||||||||||||
Operations | Net investment income | 371,784 | 208,917 | ||||||||||||
Net realized gain on investments | — | 500,764 | |||||||||||||
Net increase resulting from operations | 371,784 | 709,681 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (103,465 | ) | (101 | ) | |||||||||||
Capital Class Shares | (220,534 | ) | (206,304 | ) | |||||||||||
Daily Class Shares | (4,342 | ) | — | ||||||||||||
Institutional Capital Shares (1) | (1,155 | ) | — | ||||||||||||
Institutional Class Shares | (11,873 | ) | (2,225 | ) | |||||||||||
Investor Class Shares | (267 | ) | — | ||||||||||||
Investor II Class Shares (1) | (4,352 | ) | — | ||||||||||||
Liquidity Class Shares | (3,451 | ) | — | ||||||||||||
Trust Class Shares | (22,342 | ) | — | ||||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | (50,998 | ) | — | ||||||||||||
Capital Class Shares | (91,221 | ) | — | ||||||||||||
Daily Class Shares | (2,492 | ) | — | ||||||||||||
Institutional Capital Shares (1) | (2 | ) | — | ||||||||||||
Institutional Class Shares | (6,651 | ) | — | ||||||||||||
Investor Class Shares | (144 | ) | — | ||||||||||||
Investor II Class Shares (1) | (1,736 | ) | — | ||||||||||||
Liquidity Class Shares | (2,271 | ) | — | ||||||||||||
Trust Class Shares | (14,521 | ) | — | ||||||||||||
Total distributions to shareholders | (541,817 | ) | (208,630 | ) | |||||||||||
Net Capital Stock Transactions | (246,793,481 | ) | (1,281,678,858 | ) | |||||||||||
Contribution from advisor (See Note 7) | — | 3,865,298 | |||||||||||||
Total decrease in net assets | (246,963,514 | ) | (1,277,312,509 | ) | |||||||||||
Net Assets | Beginning of period | 8,598,936,951 | 9,876,249,460 | ||||||||||||
End of period | 8,351,973,437 | 8,598,936,951 | |||||||||||||
Overdistributed net investment income at end of period | (46,419 | ) | (53,808 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
10
Statement of Changes in Net Assets (continued) – BofA Treasury Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 8,162,867,262 | 8,162,867,262 | 12,106,323,702 | 12,106,323,702 | |||||||||||||||
Distributions reinvested | 8,557 | 8,557 | 7 | 7 | |||||||||||||||
Redemptions | (9,184,045,588 | ) | (9,184,045,588 | ) | (12,921,820,706 | ) | (12,921,820,706 | ) | |||||||||||
Net decrease | (1,021,169,769 | ) | (1,021,169,769 | ) | (815,496,997 | ) | (815,496,997 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 23,479,331,702 | 23,479,331,702 | 22,182,062,900 | 22,182,062,900 | |||||||||||||||
Distributions reinvested | 229,246 | 229,246 | 75,283 | 75,283 | |||||||||||||||
Redemptions | (22,472,802,685 | ) | (22,472,802,685 | ) | (21,513,013,385 | ) | (21,513,013,385 | ) | |||||||||||
Net increase | 1,006,758,263 | 1,006,758,263 | 669,124,798 | 669,124,798 | |||||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 7,358,725 | 7,358,725 | 169,943,202 | 169,943,202 | |||||||||||||||
Distributions reinvested | 276 | 276 | — | — | |||||||||||||||
Redemptions | (66,133,236 | ) | (66,133,236 | ) | (724,619,237 | ) | (724,619,237 | ) | |||||||||||
Net decrease | (58,774,235 | ) | (58,774,235 | ) | (554,676,035 | ) | (554,676,035 | ) | |||||||||||
Institutional Capital Shares (1) | |||||||||||||||||||
Subscriptions | 36,669,376 | 36,669,376 | — | — | |||||||||||||||
Distributions reinvested | 5 | 5 | — | — | |||||||||||||||
Redemptions | (36,257,644 | ) | (36,257,644 | ) | — | — | |||||||||||||
Net increase | 411,737 | 411,737 | — | — | |||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 832,775,633 | 832,775,633 | 1,543,045,313 | 1,543,045,313 | |||||||||||||||
Distributions reinvested | 11,498 | 11,498 | 1,309 | 1,309 | |||||||||||||||
Redemptions | (899,696,727 | ) | (899,696,727 | ) | (2,020,503,878 | ) | (2,020,503,878 | ) | |||||||||||
Net decrease | (66,909,596 | ) | (66,909,596 | ) | (477,457,256 | ) | (477,457,256 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 3,917,498 | 3,917,498 | 7,833,527 | 7,833,527 | |||||||||||||||
Distributions reinvested | 195 | 195 | — | — | |||||||||||||||
Redemptions | (6,080,625 | ) | (6,080,625 | ) | (18,982,773 | ) | (18,982,773 | ) | |||||||||||
Net decrease | (2,162,932 | ) | (2,162,932 | ) | (11,149,246 | ) | (11,149,246 | ) | |||||||||||
Investor II Class Shares (1) | |||||||||||||||||||
Subscriptions | 245,188,368 | 245,188,368 | 180,151,652 | 180,151,652 | |||||||||||||||
Distributions reinvested | 87 | 87 | — | — | |||||||||||||||
Redemptions | (249,804,591 | ) | (249,804,591 | ) | (243,351,978 | ) | (243,351,978 | ) | |||||||||||
Net decrease | (4,616,136 | ) | (4,616,136 | ) | (63,200,326 | ) | (63,200,326 | ) |
(1) See Note 1 in the Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
11
Statement of Changes in Net Assets (continued) – BofA Treasury Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2012 | 2011 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 430,159,579 | 430,159,579 | 574,114,658 | 574,114,658 | |||||||||||||||
Distributions reinvested | 4,899 | 4,899 | — | — | |||||||||||||||
Redemptions | (496,777,949 | ) | (496,777,950 | ) | (611,705,408 | ) | (611,705,408 | ) | |||||||||||
Net decrease | (66,613,471 | ) | (66,613,472 | ) | (37,590,750 | ) | (37,590,750 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 1,076,385,019 | 1,076,385,019 | 1,401,782,963 | 1,401,782,964 | |||||||||||||||
Distributions reinvested | 46 | 46 | — | — | |||||||||||||||
Redemptions | (1,110,102,406 | ) | (1,110,102,406 | ) | (1,393,016,010 | ) | (1,393,016,010 | ) | |||||||||||
Net increase (decrease) | (33,717,341 | ) | (33,717,341 | ) | 8,766,953 | 8,766,954 |
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0011 | 0.0257 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (0.0011 | ) | (0.0257 | ) | ||||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (d) | — | (d) | — | (0.0011 | ) | (0.0257 | ) | ||||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.00 | %(g) | 0.00 | % | 0.11 | % | 2.60 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.11 | % | 0.16 | % | 0.17 | % | 0.31 | % | 0.45 | % | |||||||||||||
Waiver/Reimbursement | 0.40 | % | 0.35 | % | 0.34 | % | 0.19 | % | 0.05 | % | |||||||||||||
Net investment income (h) | — | %(i) | — | %(i) | — | 0.13 | % | 2.50 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 1,912,565 | $ | 2,933,795 | $ | 3,747,604 | $ | 5,266,200 | $ | 10,424,598 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(c) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (e) | 0.0022 | 0.0282 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0022 | ) | (0.0282 | ) | |||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (d) | — | (d) | — | (e) | (0.0022 | ) | (0.0282 | ) | |||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.01 | % | 0.01 | %(h) | 0.00 | %(i) | 0.22 | % | 2.85 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.14 | % | 0.16 | % | 0.19 | % | 0.20 | % | |||||||||||||
Waiver/Reimbursement | 0.15 | % | 0.12 | % | 0.10 | % | 0.06 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | %(i) | 0.01 | % | — | %(i) | 0.24 | % | 2.80 | % | |||||||||||||
Net assets, end of period (000s) | $ | 5,462,494 | $ | 4,455,824 | $ | 3,785,055 | $ | 5,696,275 | $ | 11,436,408 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(c) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(i) Rounds to less than 0.01%.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
14
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0007 | 0.0222 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | — | (0.0007 | ) | (0.0222 | ) | |||||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (d) | — | — | (0.0007 | ) | (0.0222 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.00 | %(g) | 0.00 | % | 0.07 | % | 2.25 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.11 | % | 0.17 | % | 0.17 | % | 0.34 | % | 0.79 | % | |||||||||||||
Waiver/Reimbursement | 0.75 | % | 0.69 | % | 0.69 | % | 0.51 | % | 0.06 | % | |||||||||||||
Net investment income (h) | — | %(i) | — | %(i) | — | 0.06 | % | 2.11 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 84,605 | $ | 143,382 | $ | 697,764 | $ | 1,153,305 | $ | 1,159,298 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(c) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout the period is as follows:
Institutional Capital Shares | Period Ended August 31, 2012 (a) | ||||||
Net Asset Value, Beginning of Period | $ | 1.00 | |||||
Income from Investment Operations: | |||||||
Net investment income | — | (b) | |||||
Less Distributions to Shareholders: | |||||||
From net investment income | — | (b) | |||||
From net realized gains | — | (b) | |||||
Total distributions to shareholders | — | (b) | |||||
Net Asset Value, End of Period | $ | 1.00 | |||||
Total return (c)(d) | 0.00 | %(e)(f) | |||||
Ratios to Average Net Assets/Supplemental Data: | |||||||
Net expenses (g) | 0.14 | %(h) | |||||
Waiver/Reimbursement | 0.13 | %(h) | |||||
Net investment income (g) | 0.01 | %(h) | |||||
Net assets, end of period (000s) | $ | 412 |
(a) Institutional Capital shares commenced operations on October 3, 2011. Per share data and total return reflect activity from that date.
(b) Rounds to less than $0.001 per share.
(c) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) Rounds to less than 0.01%.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) Annualized.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (e) | 0.0019 | 0.0278 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (e) | (0.0019 | ) | (0.0278 | ) | |||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (d) | — | (d) | — | (e) | (0.0019 | ) | (0.0278 | ) | |||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.01 | % | 0.00 | %(h) | 0.00 | %(i) | 0.19 | % | 2.81 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (j) | 0.11 | % | 0.16 | % | 0.17 | % | 0.22 | % | 0.24 | % | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.14 | % | 0.13 | % | 0.07 | % | 0.05 | % | |||||||||||||
Net investment income (j) | — | %(i) | — | %(i) | — | %(i) | 0.21 | % | 2.68 | % | |||||||||||||
Net assets, end of period (000s) | $ | 266,788 | $ | 333,703 | $ | 810,783 | $ | 1,829,959 | $ | 2,894,773 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(c) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(d) Rounds to less than $0.001 per share.
(e) Rounds to less than $0.0001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(i) Rounds to less than 0.01%.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0010 | 0.0247 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | — | (0.0010 | ) | (0.0247 | ) | |||||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (d) | — | — | (0.0010 | ) | (0.0247 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.00 | %(g) | 0.00 | % | 0.10 | % | 2.50 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.11 | % | 0.17 | % | 0.17 | % | 0.32 | % | 0.55 | % | |||||||||||||
Waiver/Reimbursement | 0.50 | % | 0.44 | % | 0.44 | % | 0.28 | % | 0.05 | % | |||||||||||||
Net investment income (h) | — | %(i) | — | %(i) | — | 0.11 | % | 2.42 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 5,580 | $ | 7,743 | $ | 18,884 | $ | 79,399 | $ | 234,962 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(c) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor II Class Shares | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | 0.0009 | 0.0237 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (e) | — | — | (0.0009 | ) | (0.0237 | ) | |||||||||||||||
From net realized gains | — | (e) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (e) | — | — | (0.0009 | ) | (0.0237 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | (e) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (f)(g) | 0.01 | % | 0.00 | %(h) | 0.00 | % | 0.09 | % | 2.40 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.11 | % | 0.16 | % | 0.17 | % | 0.34 | % | 0.65 | % | |||||||||||||
Waiver/Reimbursement | 0.60 | % | 0.55 | % | 0.54 | % | 0.36 | % | 0.05 | % | |||||||||||||
Net investment income (i) | — | %(j) | — | %(j) | — | 0.12 | % | 2.53 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 103,034 | $ | 107,653 | $ | 170,781 | $ | 200,805 | $ | 377,207 |
(a) After the close of business on September 30, 2011, Class A shares were renamed Investor II Class shares.
(b) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(c) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(d) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(e) Rounds to less than $0.001 per share.
(f) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(g) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(h) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
(j) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights – BofA Treasury Reserves
Selected date for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0012 | 0.0267 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | — | (0.0012 | ) | (0.0267 | ) | |||||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (d) | — | — | (0.0012 | ) | (0.0267 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.00 | %(g) | 0.00 | % | 0.12 | % | 2.70 | %(h) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (i) | 0.11 | % | 0.16 | % | 0.17 | % | 0.29 | % | 0.35 | % | |||||||||||||
Waiver/Reimbursement | 0.41 | % | 0.35 | % | 0.34 | % | 0.21 | % | 0.15 | % | |||||||||||||
Net investment income (i) | — | %(j) | — | %(j) | — | 0.17 | % | 2.53 | %(h) | ||||||||||||||
Net assets, end of period (000s) | $ | 71,919 | $ | 138,535 | $ | 176,051 | $ | 413,066 | $ | 995,952 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(c) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) The relationship of the class' net investment income ratio to total return may be affected by changes in the class' relative net assets during the fiscal period.
(i) The benefits derived from expense reductions had an impact of less than 0.01%.
(j) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
20
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | 2008 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | 0.0015 | 0.0272 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (d) | — | — | (0.0015 | ) | (0.0272 | ) | |||||||||||||||
From net realized gains | — | (d) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (d) | — | — | (0.0015 | ) | (0.0272 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | (d) | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (e)(f) | 0.01 | % | 0.00 | %(g) | 0.00 | % | 0.15 | % | 2.75 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Net expenses (h) | 0.11 | % | 0.15 | % | 0.17 | % | 0.27 | % | 0.30 | % | |||||||||||||
Waiver/Reimbursement | 0.25 | % | 0.21 | % | 0.19 | % | 0.08 | % | 0.05 | % | |||||||||||||
Net investment income (h) | — | %(i) | — | %(i) | — | 0.13 | % | 2.62 | % | ||||||||||||||
Net assets, end of period (000s) | $ | 444,576 | $ | 478,302 | $ | 469,327 | $ | 857,336 | $ | 964,875 |
(a) For fiscal periods prior to August 31, 2011, the Fund disclosed its per share amounts out to four decimal places.
(b) On May 1, 2010, Columbia Treasury Reserves was renamed BofA Treasury Reserves.
(c) On December 31, 2009, Columbia Treasury Reserves, a Portfolio of Columbia Funds Series Trust, was reorganized into a newly formed series of BofA Funds Series Trust, which was also named Columbia Treasury Reserves.
(d) Rounds to less than $0.001 per share.
(e) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions.
(f) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
21
Notes to Financial Statements – BofA Treasury Reserves
August 31, 2012
Note 1. Organization
BofA Treasury Reserves (the "Fund"), a series of BofA Funds Series Trust (the "Trust"), is a diversified fund. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Delaware statutory trust.
Investment Objective
The Fund seeks current income, consistent with capital preservation and maintenance of a high degree of liquidity.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers nine classes of shares: Adviser Class, Capital Class, Daily Class, Institutional Capital Class, Institutional Class, Investor Class, Investor II Class, Liquidity Class and Trust Class shares. Each class of shares is offered continuously at net asset value. After the close of business on September 30, 2011, Class A shares were renamed Investor II Class shares. On October 3, 2011, Institutional Capital shares commenced operations.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Securities in the Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Trust's Board of Trustees ("the Board") continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Fund. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Board has established procedures reasonably designed, taking into account the current market conditions and the Fund's investment objective, to ensure compliance with Rule 2a-7's requirements. These procedures include, among other things, determinations, at such intervals as the Board deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which the Fund's market based net asset value deviates from $1.00 per share.
GAAP establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy are described below:
• Level 1 – Prices determined using quoted prices in active markets for identical assets.
• Level 2 – Prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others).
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
22
BofA Treasury Reserves, August 31, 2012
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that BofA Advisors, LLC ("BofA"), the Fund's investment advisor, has determined are creditworthy. The Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement, which may include securities that the Fund is not otherwise directly permitted to purchase. BofA is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on the Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually after the fiscal year in which the capital gains were earned or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carry forward. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust's organizational documents and, in the case of the Trustees, by contract,
23
BofA Treasury Reserves, August 31, 2012
the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2012, permanent book and tax basis differences resulting primarily from differing treatments for deferred compensation adjustments and distribution re-designations were identified and reclassified among the components of the Fund's net assets as follows:
Overdistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In Capital | |||||||||
$ | 7,386 | $ | (7,386 | ) | $ | — |
The tax character of distributions paid during the years ended August 31, 2012 and August 31, 2011 were as follows:
August 31, | |||||||||||
Distributions paid from: | 2012 | 2011 | |||||||||
Ordinary Income* | $ | 541,817 | $ | 208,630 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2012, the components of distributable earnings on a tax basis were as follows:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | ||||||
$ | 10,791 | $ | — |
On December 22, 2010, the Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") was enacted. Among other changes to the federal income and excise tax provisions related to RICs, the Act changed the rules applying to capital loss carry forward by allowing RICs to carry forward capital losses indefinitely and to retain the character of capital loss carry forwards as short-term or long-term, as applicable. The previous rules limited the carry forward period to eight years, and all carry forwards were considered short-term in character. As a transition rule, the Act requires that capital loss carry forwards generated in taxable years beginning after effective date of the Act be fully used before capital loss carry forwards generated in taxable years prior to effective date of the Act. Therefore, under certain circumstances, capital loss carry forwards available as of the report date, if any, may expire unused. This change is effective for fiscal years beginning after the date of enactment.
Management is required to determine whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized by the Fund is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 4. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
BofA, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment
24
BofA Treasury Reserves, August 31, 2012
advisory services to the Fund. BofA receives a monthly investment advisory fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $175 billion | 0.15 | % | |||||
$175 billion to $225 billion | 0.13 | % | |||||
Over $225 billion | 0.08 | % |
BofA has contractually agreed to limit the combined investment advisory fee and administration fee for the Fund to an annual rate of 0.19% of the Fund's average net assets through December 31, 2012. There is no guarantee that this expense limitation will continue after December 31, 2012.
For the year ended August 31, 2012, the Fund's effective advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
BofA provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average net assets of the Fund and the other series of the Trust advised by BofA, at the following annual rates, less the fees payable by the Fund as described under the Pricing and Bookkeeping Fees note below:
Average Daily Net Assets | Annual Fee Rates | ||||||
First $125 billion | 0.10 | % | |||||
$125 billion to $175 billion | 0.05 | % | |||||
Over $175 billion | 0.02 | % |
Additionally, BofA has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. BofA pays State Street a fee for all services received under this agreement.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and BofA pursuant to which State Street provides financial reporting services to the Fund. The Trust has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the "State Street Agreements") with State Street and BofA pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Transfer Agent Fee
Boston Financial Data Services, Inc. (the "Transfer Agent") serves as transfer agent for the Fund's shares. Under a transfer, dividend disbursing and shareholders' servicing agent agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Fund.
An annual minimum account balance fee of up to $20 may apply to certain accounts with a value below the Fund's minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended August 31, 2012, no minimum account balance fees were charged by the Fund.
In addition to the charge for accounts below the minimum initial investment, the BofA Funds may automatically sell your shares if the value of your account (treating each account of a Fund you own separately from any other account of another Fund you may own) falls below $250. Please refer to the Prospectus for additional details.
25
BofA Treasury Reserves, August 31, 2012
Distribution and Service Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of BofA, is the principal underwriter of the Fund's shares.
The Trust has adopted distribution plans ("Distribution Plans") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Fund to compensate or reimburse the Distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares.
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for the Adviser Class, Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Servicing Plans permit the Fund to compensate or reimburse servicing agents for the shareholder services they have provided. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Distribution Plans: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Daily Class Shares | 0.35 | % | 0.35 | % | |||||||
Investor Class Shares | 0.10 | %` | 0.10 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Servicing Plans: | |||||||||||
Adviser Class Shares | 0.25 | % | 0.25 | % | |||||||
Daily Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares | 0.25 | % | 0.25 | % | |||||||
Investor II Class Shares | 0.25 | % | 0.25 | % | |||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** |
* The Distributor has contractually agreed to waive Distribution Plan fees and/or Servicing Plan fees through December 31, 2012 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined fees will not exceed 0.15%. There is no guarantee that this waiver will continue after December 31, 2012.
** To the extent that the Liquidity Class shares of the Fund make payments pursuant to the Distribution Plan and/or the Servicing Plan, the combined total of such payments may not exceed, on an
annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
Shareholder Administration Fees
The Trust has adopted shareholder administration plans ("Administration Plans") for the Institutional Class, Investor II Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay servicing agents that have entered into a shareholder administration agreement with the Trust for certain shareholder support services that are provided to holders of the classes' shares. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of BofA and the Distributor.
The annual rates in effect and plan limits, as a percentage of average daily net assets are as follows:
Administration Plans: | Current Rate | Plan Limit | |||||||||
Institutional Class Shares | 0.04 | % | 0.04 | % | |||||||
Investor II Class Shares | 0.10 | % | 0.10 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
BofA and/or some of the Fund's other service providers have contractually agreed to bear a portion of the Fund's expenses through December 31, 2012, so that the Fund's ordinary operating expenses (excluding any distribution, shareholder servicing and/or shareholder administration fees, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any) after giving effect to any balance credits from the Fund's custodian, do not exceed the annual rate of 0.20% of the Fund's average daily net assets. There is no guarantee that this expense limitation will continue after December 31, 2012.
The Distributor has voluntarily agreed to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary in order to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, BofA has voluntarily agreed to reimburse certain Fund expenses (consisting of advisory and administration
26
BofA Treasury Reserves, August 31, 2012
fees) to the extent necessary to maintain such yield in the event the Distributor's reimbursement of class-specific Fund expenses is fully utilized. These reimbursements are voluntary and may be modified or discontinued by the Distributor or BofA at any time. Effective March 20, 2012, the Distributor and BofA have voluntarily agreed to reimburse expenses, as applicable, in order to maintain a minimum annualized net yield of 0.01% for all classes of the Fund.
BofA is entitled to recover from the Fund any fees waived and/or expenses reimbursed for a three-year
period following the date of such fee waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense limitation in effect at the time the expenses to be recovered were incurred.
Under the Distribution Plan for the Liquidity Class shares, the Trust is currently not reimbursing the Distributor for distribution expenses. Unreimbursed expenses incurred by the Distributor in a given year may not be recovered by the Distributor in subsequent years.
At August 31, 2012, the amounts potentially recoverable by BofA pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2015 | 2014 | 2013 | recovery | ended 08/31/12 | |||||||||||||||
$ | 5,240,089 | $ | 5,773,438 | $ | 7,398,397 | $ | 18,411,924 | $ | — |
Fees Paid to Officers and Trustees
All officers of the Fund are employees of BofA or its affiliates and, with the exception of the Fund's Chief Compliance Officer, receive no compensation from the Fund. The Board has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer.
Trustees are compensated for their services to the Fund, as set forth on the Statement of Operations. Previously, the Trust's eligible Trustees participated in a non-qualified deferred compensation plan which the Board voted to terminate on February 28, 2011. Balances related to compensation previously deferred by the trustees were paid out of Fund assets on March 8, 2012. The expense for the deferred compensation plan, which includes Trustees' fees deferred during the current period as well as any gains or losses on the Trustees' deferred compensation balances as a result of market fluctuations, is included in "Trustees' fees" on the Statement of Operations. There are no liabilities associated with the terminated deferred compensation plan, however there are balances reflected as "Trustees' deferred compensation plan" on the Statement of Assets and
Liabilities which relate to pending payments to retired trustees under legacy deferred compensation plans.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended August 31, 2012, these custody credits reduced total expenses by $3,276 for the Fund.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $750,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $8,000 is also accrued and
27
BofA Treasury Reserves, August 31, 2012
apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
Prior to October 28, 2011, the Fund and other affiliated funds participated in a $200,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings were available for short-term liquidity or temporary or emergency purposes. Interest was charged to each participating fund based on the fund's borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 1.25% or the overnight LIBOR Rate plus 1.25%. An annual administration fee of $10,000 was also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the year ended August 31, 2012, the Fund did not borrow under these arrangements.
Note 7. Capital Contribution
On November 29, 2010, an affiliate of BofA made a capital contribution to the Fund of $3,865,298.
Note 8. Shareholder Concentration
The Fund's risks include, but are not limited to the following:
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of the Fund's shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 9. Significant Risks and Contingencies
Legal Proceedings
BofA and the Distributor (collectively, the "BofA Group") are subject to a settlement agreement with the New York Attorney General (the "NYAG") (the "NYAG Settlement") and a settlement order with the SEC (the "SEC Order") on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the BofA Group (or predecessor or affiliated entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $375 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the BofA Group's applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires BofA and its affiliates to make certain disclosures to investors relating to expenses. In connection with the BofA Group providing services to the BofA Funds, the BofA Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
28
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Treasury Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, 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 BofA Treasury Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2012, and the results of its operations, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 August 31, 2012 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 22, 2012
29
Federal Income Tax Information (Unaudited) – BofA Treasury Reserves
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2013 of amounts for use in preparing 2012 income tax returns.
30
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. MGI Funds (7 funds); BG Medicine, Inc. (life sciences) | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2010; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
George J. Gorman (Born 1952) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Senior Partner, Asset Management—Ernst & Young LLP, from 1988 to 2009. Oversees 11 Funds. Ashmore Funds (5 funds). | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present; Persident and Chief Executive Officer—California General Bank, N.A., from January 2008 through August 2010; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer-Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman-CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011; oversees 11 Funds. Columbia Funds (149 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer-Robeco Investment Management, from 2005 to 2008 (previously Chief Financial Officer, 2004-2005); oversees 11 Funds. |
31
Fund Governance (continued)
Independent Trustees (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Managing Member-Perry Consulting LLC (advisory firm), since March 2008; Consultant-MBIA, since March 2008; oversees 11 Funds. Korn/Ferry International (recruiting). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management, Columbia Management Advisors, LLC from 2007 to 2010; Head of Business Development and Mergers and Acquisitions for Global Wealth & Investment Management, Bank of America from 2006 to 2007. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Peter T. Fariel (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Secretary and Chief Legal Officer (since 2010) | Associate General Counsel, Bank of America since April 2005. |
32
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of the Advisor and Managing Director, Bank of America, since May 2010; Associate General Counsel, Bank of America from April 2005 to May 2010; Chief Legal Officer, Secretary and Senior Vice President, Columbia Funds, April 2005 to April 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President-Fund Treasury of the Advisor since October 2004. | ||||||
Thomas Loeffler (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Chief Operating Officer, BofA Global Capital Management Group, LLC since May 2010; Chief Operating Officer, Fixed-Income and Liquidity Strategies, Columbia Management Advisors, LLC from 2004 to 2010. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2012) | Assistant General Counsel, Bank of America since July 2007; Vice President and Senior Attorney for United States Trust Company, National Association from February 2006 to July 2007. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Treasurer (since 2010) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010; Vice President of Transfer Agency Oversight and Business Intelligence/Data at Oppenheimer Funds, April 2004 through January 2009. |
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888-331-0904 (Institutional Investors: 800-353-0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Treasury Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888-331-0904 (Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended August 31 is available from the SEC's website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds' website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund's Form N-Q is available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC, and a part of BofA Global Capital Management and an affiliate of Bank of America Corporation. BofA Global Capital Management is an investment division of Bank of America Corporation. BofA entities furnish investment management services and products for institutional and individual investors. BofA Advisors, LLC is an SEC-registered investment advisor and indirect, wholly owned subsidiary of Bank of America Corporation and is part of BofA Global Capital Management.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus, which contains this and other important information about the fund, contact your BofA Global Capital Management representative or a financial advisor or go to www.bofacapital.com.
Transfer Agent
Boston Financial Data Services, Inc.
P.O. Box 8723
Boston, MA 02266-8723
888-331-0904
(Institutional Investors: 800-353-0828)
Distributor
BofA Distributors, Inc.
100 Federal Street
Boston, MA 02110
Investment Advisor
BofA Advisors, LLC
100 Federal Street
Boston, MA 02110
37
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA Treasury Reserves
Annual Report, August 31, 2012
© 2012 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-TSYR-42/265704-1012
Item 2. Code of Ethics.
(a) The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b) During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics described in 2(a) above that relates to one or more of the items set forth in paragraph (b) of this item’s instructions.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that William A. Hawkins, George J. Gorman, William J. Kelly, and Harrison M. Bains, are members of the registrant’s Board of Trustees and Audit Committee. George J. Gorman qualifies as an audit committee financial expert. Mr. Hawkins, Mr. Gorman, Mr. Kelly, and Mr. Bains are each independent trustees, as defined in paragraph (a)(2) of this item’s instructions.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the series of the registrant whose report to stockholders is included in this annual filing.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional service rendered during the fiscal years ended August 31, 2012 and August 31, 2011 are approximately as follows:
2012 |
| 2011 |
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$ | 499,000 |
| $ | 501,350 |
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Audit Fees include amounts related to the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended August 31, 2012 and August 31, 2011 are approximately as follows:
2012 |
| 2011 |
| ||
$ | 52,305 |
| $ | 52,305 |
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Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported in Audit Fees above. In both fiscal years 2012 and 2011, Audit-Related Fees consist of agreed-upon procedures performed for semi-annual shareholder reports.
During the fiscal years ended August 31, 2012 and August 31, 2011, there were no Audit-Related Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c) Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended August 31, 2012 and August 31, 2011 are approximately as follows:
2012 |
| 2011 |
| ||
$ | 33,950 |
| $ | 32,045 |
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Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning.
During the fiscal years ended August 31, 2012 and August 31, 2011, there were no Tax Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d) All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended August 31, 2012 and August 31, 2011 are approximately as follows:
2012 |
| 2011 |
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$ | 0 |
| $ | 0 |
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All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended August 31, 2012 and August 31, 2011 are approximately as follows:
2012 |
| 2011 |
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$ | 263,630 |
| $ | 386,054 |
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For the fiscal year ended August 31, 2012, Aggregate All Other Fees consist of fees billed for an internal control examination of the registrant’s investment advisor in addition to agreed upon procedures in connection with IRC Section 851(b)3 and IRC Section 852(b)5, as applicable. For the fiscal year ended August 31, 2011, Aggregate All Other Fees consist of fees billed for internal control examinations of the registrant’s investment advisor and transfer agent.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant’s Audit Committee is required to pre-approve the engagement of the registrant’s independent accountants to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) or any entity controlling, controlled by or under common control with such investment adviser that provides ongoing services to the registrant (“Adviser Affiliates”), if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Accountants for Audit and Non-Audit Services (“Policy”). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant’s independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant (collectively “Fund Services”); (ii) non-audit services to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates, if the engagement relates directly to the operations or financial reporting of a Fund (collectively “Fund-related Adviser Services”); and (iii) certain other audit and non-audit services to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and Adviser Affiliates. Unless a type of service receives general pre-approval under the Policy, it requires specific pre-approval by the Audit Committee if it is to be provided by the independent accountants. Pre-approval of non-audit services to the registrant, the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates may be waived provided that the “de minimis” requirements set forth under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre-designated member or members who are Independent Trustees/Directors. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee’s responsibilities with respect to the pre-approval of services performed by the independent accountants may not be delegated to management.
The Policy requires the Fund Treasurer and/or an appropriate Fund officer to submit to the Audit Committee, on an annual basis, a schedule of the types of services that are subject to general pre-approval. The schedule(s) provide a description of each type of service that is subject to general pre-approval and, where possible, will provide estimated fee caps for each instance of providing each service. The Audit Committees will review and approve the types of services and review the projected fees for the next fiscal year and may add to, or subtract from, the list of general pre-approved services from time to time based on subsequent determinations. That approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent accountants will be permitted to perform.
The Fund Treasurer and/or an appropriate Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services initiated since the last such report was rendered, including a general description of the services, actual billed and projected fees, and the means by which such Fund Services or Fund-related Adviser Services were pre-approved by the Audit Committee.
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(e)(2) The percentage of services described in paragraphs (b) through (d) of this Item approved pursuant to the “de minimis” exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X during both fiscal years ended August 31, 2012 and August 31, 2011 was zero.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended August 31, 2012 and August 31, 2011 are approximately as follows:
2012 |
| 2011 |
| ||
$ | 349,885 |
| $ | 470,404 |
|
(h) The registrant’s Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
(a) The registrant’s “Schedule I — Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officers, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that material information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b) There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) |
| BofA Funds Series Trust |
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By (Signature and Title) | /s/ Michael Pelzar |
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| Michael Pelzar, President |
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Date |
| October 19, 2012 |
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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/ Michael Pelzar |
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| Michael Pelzar, President |
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Date |
| October 19, 2012 |
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By (Signature and Title) | /s/ Jeffrey R. Coleman |
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| Jeffrey R. Coleman, Chief Financial Officer |
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Date |
| October 19, 2012 |
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