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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Marina Belaya, 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: | February 28, 2014 |
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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 02/28/14
BofA Funds Series Trust
Item 1. Reports to Stockholders.
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 6 | ||||||
Statement of Operations | 8 | ||||||
Statement of Changes in Net Assets | 9 | ||||||
Financial Highlights | 11 | ||||||
Notes to Financial Statements | 18 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 24 | ||||||
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 California Tax-Exempt Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
9/1/13 – 2/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.20 | 0.60 | 0.60 | 0.12 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.20 | 0.60 | 0.60 | 0.12 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.20 | 0.60 | 0.60 | 0.12 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.20 | 0.60 | 0.60 | 0.12 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.20 | 0.60 | 0.60 | 0.12 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.20 | 0.60 | 0.60 | 0.12 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.20 | 0.60 | 0.60 | 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 365.
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
February 28, 2014 (Unaudited)
Municipal Bonds – 92.6% | |||||||||||
Par ($) | Value ($) | ||||||||||
California – 80.1% | |||||||||||
CA Corona | |||||||||||
Country Hills Apartments, | |||||||||||
Series 1995 A, DPCE: FHLMC 0.050% 02/01/25 (03/06/14) (a)(b) | 5,035,000 | 5,035,000 | |||||||||
CA County of Riverside CA | |||||||||||
Series 2013 D | |||||||||||
2.000% 10/15/14 | 10,000,000 | 10,112,184 | |||||||||
CA Daly City Housing Development Finance Agency | |||||||||||
Serramonte Ridge LLC, | |||||||||||
Series 1999 A, DPCE: FNMA 0.050% 10/15/29 (03/06/14) (a)(b) | 6,700,000 | 6,700,000 | |||||||||
CA Deutsche Bank Spears/Lifers Trust | |||||||||||
Alta Loma California, | |||||||||||
Series 2007, GTY AGMT: Deutsche Bank AG 0.110% 02/01/37 (03/06/14) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
Chino Basin California Regional | |||||||||||
Financing Authority, Series 2008, GTY AGMT, Deutsche Bank AG 0.090% 04/01/48 (03/06/14) (a)(b)(c) | 4,094,000 | 4,094,000 | |||||||||
Imperial California Community College, | |||||||||||
Series 2007-444, Insured: FGIC, GTY AGMT: Deutsche Bank AG: LIQ FAC: Deutsche Bank AG 0.090% 08/01/32 (03/06/14) (a)(b)(c) | 3,685,000 | 3,685,000 | |||||||||
Los Angeles County Housing Authority, | |||||||||||
Series 2011-1008, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG: 0.100% 10/01/31 (03/06/14) (a)(b)(c) | 28,000,000 | 28,000,000 | |||||||||
CA Economic Development Financing Authority | |||||||||||
Mid-Pacific Co., LLC, Vortech Engineering, Inc., | |||||||||||
Series 1997, AMT, LOC: Wells Fargo Bank N.A. 0.040% 09/01/22 (03/05/14) (a)(b) | 1,415,000 | 1,415,000 |
Par ($) | Value ($) | ||||||||||
CA Fresno | |||||||||||
Multi-Family Housing, Wasatch Pool Holdings LLC, | |||||||||||
Stonepine Apartments, Series 2001 A, DPCE: FNMA 0.050% 02/15/31 (03/06/14) (a)(b) | 4,860,000 | 4,860,000 | |||||||||
CA Health Facilities Financing Authority | |||||||||||
Stanford Hospital & Clinics, | |||||||||||
Series 2008 B2, 0.130% 11/15/45 (06/04/14) (b)(d) | 16,350,000 | 16,350,000 | |||||||||
CA Indio Multi-Family Housing Revenue | |||||||||||
Carreon Villa Apartments, | |||||||||||
Series 1996 A, DPCE: FNMA 0.050% 08/01/26 (03/06/14) (a)(b) | 5,650,000 | 5,650,000 | |||||||||
CA Infrastructure & Economic Development Bank Revenue | |||||||||||
Le Lycee Francais De Los, | |||||||||||
Series 2006, LOC: Mellon Bank, N.A. 0.040% 09/01/36 (03/06/14) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
CA Infrastructure & Economic Development Bank | |||||||||||
Pacific Gas & Electric Co.: | |||||||||||
Series 2009 A, LOC: Mizuho Corporate Bank 0.030% 11/01/26 (03/03/14) (a)(b) | 8,800,000 | 8,800,000 | |||||||||
Series 2009 B, LOC: Wells Fargo Bank N.A. 0.030% 11/01/26 (03/03/14) (a)(b) | 5,200,000 | 5,200,000 | |||||||||
Traditional Baking, Inc., | |||||||||||
Series 2003, AMT, LOC: U.S. Bank N.A. 0.060% 08/01/28 (03/05/14) (a)(b) | 1,270,000 | 1,270,000 | |||||||||
CA Irvine Ranch Water District | |||||||||||
Series 2011 A-1, | |||||||||||
0.040% 10/01/37 (03/06/14) (b)(d) | 8,000,000 | 8,000,000 | |||||||||
CA Los Angeles County, Capital Asset Leasing Corp. | |||||||||||
Series A1, | |||||||||||
LOC: JPMorgan Chase Bank 0.080% 05/07/14 | 14,000,000 | 14,000,000 | |||||||||
CA Los Angeles County | |||||||||||
Series 2013 B | |||||||||||
2.000% 06/30/14 | 7,100,000 | 7,143,113 |
See Accompanying Notes to Financial Statements.
2
BofA California Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CA Los Angeles Unified School District | |||||||||||
Series 2012 A | |||||||||||
4.000% 07/01/14 | 1,000,000 | 1,013,069 | |||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2011 A-1, | |||||||||||
0.050% 07/01/36 (03/06/14) (b)(d) | 10,000,000 | 10,000,000 | |||||||||
CA Monterey Peninsula Water Management District | |||||||||||
Wastewater Reclamation Project, | |||||||||||
Series 1992, LOC: Wells Fargo Bank N.A. 0.050% 07/01/22 (03/01/14) (a)(b) | 2,192,000 | 2,192,000 | |||||||||
CA Municipal Finance Authority | |||||||||||
Series 2010 | |||||||||||
GTY AGMT: Chevron U.S.A. Inc, 0.020% 11/01/35 (03/03/14) (a)(b) | 2,185,000 | 2,185,000 | |||||||||
CA Oceanside | |||||||||||
Shadow Way Apartments LP, | |||||||||||
Series 2009, LOC: FHLMC 0.020% 03/01/49 (03/06/14) (a)(b) | 1,375,000 | 1,375,000 | |||||||||
CA Oxnard Housing Authority | |||||||||||
Seawind Apartments Ltd., | |||||||||||
Series 1990 A, AMT, DPCE: FNMA 0.090% 12/01/20 (03/05/14) (a)(b) | 2,325,000 | 2,325,000 | |||||||||
CA Pittsburg Public Financing Authority | |||||||||||
Series 2008, | |||||||||||
LOC: Bank of the West 0.080% 06/01/35 (03/06/14) (a)(b) | 3,085,000 | 3,085,000 | |||||||||
CA Pittsburg Redevelopment Agency | |||||||||||
Los Medanos Community, | |||||||||||
Series 2004 A, LOC: State Street Bank & Trust Co., LOC: California State Teachers Retirement System 0.030% 09/01/35 (03/03/14) (a)(b) | 11,090,000 | 11,090,000 | |||||||||
CA RBC Municipal Products, Inc. Trust | |||||||||||
Kaiser Permanente, | |||||||||||
Series 2011 E-21, LOC: Royal Bank of Canada 0.030% 10/01/15 (03/06/14) (a)(b)(c) | 16,000,000 | 16,000,000 |
Par ($) | Value ($) | ||||||||||
Los Angeles County, | |||||||||||
Series 2011 E-24, LOC: Royal Bank of Canada 0.030% 07/01/31 (03/06/14) (a)(b)(c) | 15,000,000 | 15,000,000 | |||||||||
CA San Diego County Regional Airport Authority | |||||||||||
Series 2005, AMT, | |||||||||||
GTY AGMT: Deutsche Bank A.G., LIQ FAC: Deutsche Bank A.G. 0.090% 07/01/20 (03/06/14) (a)(b)(c) | 1,155,000 | 1,155,000 | |||||||||
CA San Francisco City & County | |||||||||||
Certificates of Participation, | |||||||||||
Series 2007 1883, GTY AGMT: Wells Fargo Bank N.A. 0.070% 09/01/31 (03/06/14) (a)(b) | 13,570,000 | 13,570,000 | |||||||||
CA San Jose Redevelopment Agency | |||||||||||
Series 1996 B, | |||||||||||
LOC: JPMorgan Chase Bank 0.150% 05/16/14 | 4,400,000 | 4,400,000 | |||||||||
Series 2003 B, | |||||||||||
LOC: JPMorgan Chase Bank 0.150% 05/16/14 | 4,100,000 | 4,100,000 | |||||||||
CA San Mateo Joint Powers Financing Authority | |||||||||||
Public Safety Project, | |||||||||||
Series 2007 A, LOC: Wells Fargo Bank N.A. 0.040% 04/01/39 (03/06/14) (a)(b) | 15,365,000 | 15,365,000 | |||||||||
CA School Cash Reserve Program Authority | |||||||||||
Series 2013 H | |||||||||||
2.000% 06/02/14 | 7,650,000 | 7,684,954 | |||||||||
Series 2014 J | |||||||||||
2.000% 10/01/14 (e) | 8,000,000 | 8,083,120 | |||||||||
CA Statewide Communities Development Authority | |||||||||||
Birchcrest Preservation, | |||||||||||
Series 2001 S AMT, LOC: U.S. Bank N.A. 0.070% 08/01/32 (03/03/14) (a)(b) | 955,000 | 955,000 | |||||||||
Kaiser Permanente, | |||||||||||
Series 2009 B-4, 0.210% 05/02/14 | 6,900,000 | 6,900,000 | |||||||||
Kaiser Permanente: | |||||||||||
Series 2001 B, 3.900% 08/01/31 (07/01/14) (b)(d) | 1,225,000 | 1,239,986 | |||||||||
Series 2009 A 5.000% 04/01/14 | 5,000,000 | 5,018,400 |
See Accompanying Notes to Financial Statements.
3
BofA California Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series B-5 0.140% 08/06/14 | 6,250,000 | 6,250,000 | |||||||||
Plan Nine Partners LLC, | |||||||||||
Series 2005 A, LOC: Union Bank of CA N.A. 0.070% 02/01/35 (03/06/14) (a)(b) | 8,115,000 | 8,115,000 | |||||||||
Series 9-D, 0.180% 08/12/14 | 5,000,000 | 5,000,000 | |||||||||
Series 9B-3, 0.140% 10/10/14 | 1,500,000 | 1,500,000 | |||||||||
Series K, 0.200% 06/05/14 | 4,000,000 | 4,000,000 | |||||||||
CA State | |||||||||||
Revenue Anticipation Notes, | |||||||||||
Series 2013 A2, 2.000% 06/23/14 | 10,500,000 | 10,558,022 | |||||||||
Series 2013 A1, 2.000% 05/28/14 | 2,000,000 | 2,008,860 | |||||||||
CA University of California | |||||||||||
Series 2011 AB | |||||||||||
5.000% 05/15/14 | 2,000,000 | 2,019,551 | |||||||||
Series 2013, | |||||||||||
0.020% 05/15/48 (03/06/14) (b)(d) | 8,650,000 | 8,650,000 | |||||||||
California Total | 329,152,259 | ||||||||||
New Jersey – 3.0% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 2012, AMT, | |||||||||||
LOC: BNP Paribas 0.100% 03/07/14 | 12,100,000 | 12,100,000 | |||||||||
New Jersey Total | 12,100,000 | ||||||||||
Puerto Rico – 9.5% | |||||||||||
PR RBC Municipal Products, Inc. Trust | |||||||||||
Series 2013 E-46, | |||||||||||
LOC: Royal Bank of Canada 0.140% 09/01/15 (03/06/14) (a)(b)(c) | 2,000,000 | 2,000,000 |
Par ($) | Value ($) | ||||||||||
PR RIB Floater Trust | |||||||||||
Series 2013 8WE, | |||||||||||
LOC: Barclays Bank PLC 0.130% 09/30/14 (03/06/14) (a)(b)(c) | 37,200,000 | 37,200,000 | |||||||||
Puerto Rico Total | 39,200,000 | ||||||||||
Total Municipal Bonds (cost of $380,452,259) | 380,452,259 | ||||||||||
Closed-End Investment Companies – 10.5% | |||||||||||
California – 10.5% | |||||||||||
CA Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2010 3, | |||||||||||
LIQ FAC: Deutsche Bank AG 0.130% 03/01/40 (03/06/14) (a)(b)(c) | 8,000,000 | 8,000,000 | |||||||||
CA Nuveen Performance Plus Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.100% 12/01/40 (03/06/14) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
CA Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.100% 08/01/40 (03/06/14) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
CA Nuveen Select Quality Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.100% 08/01/40 (03/06/14) (a)(b)(c) | 15,000,000 | 15,000,000 | |||||||||
California Total | 43,000,000 | ||||||||||
Total Closed-End Investment Companies (cost of $43,000,000) | 43,000,000 | ||||||||||
Total Investments – 103.1% (cost of $423,452,259) (f) | 423,452,259 | ||||||||||
Other Assets & Liabilities, Net – (3.1)% | (12,675,281 | ) | |||||||||
Net Assets – 100.0% | 410,776,978 |
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 February 28, 2014.
See Accompanying Notes to Financial Statements.
4
BofA California Tax-Exempt Reserves
February 28, 2014 (Unaudited)
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(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 February 28, 2014, these securities, which are not illiquid, amounted to $160,134,000 or 39.0% 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 February 28, 2014.
(e) Security purchased on a delayed delivery basis.
(f) Cost for federal income tax purposes is $423,452,259.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 380,452,259 | $ | — | $ | 380,452,259 | |||||||||||
Total Closed-End Investment Companies | — | 43,000,000 | — | 43,000,000 | |||||||||||||||
Total Investments | $ | — | $ | 423,452,259 | $ | — | $ | 423,452,259 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 92.6 | ||||||
Closed-End Investment Companies | 10.5 | ||||||
103.1 | |||||||
Other Assets & Liabilities, Net | (3.1 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FGIC | Financial Guaranty Insurance Co. | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities – BofA California Tax-Exempt Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 423,452,259 | |||||||||
Cash | 35,253 | ||||||||||
Receivable for: | |||||||||||
Interest | 588,282 | ||||||||||
Expense reimbursement due from investment advisor | 20,319 | ||||||||||
Prepaid expenses | 13,048 | ||||||||||
Total Assets | 424,109,161 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased | 5,124,650 | ||||||||||
Investments purchased on a delayed delivery basis | 8,083,120 | ||||||||||
Distributions | 3 | ||||||||||
Investment advisory fee | 15,197 | ||||||||||
Administration fee | 4,809 | ||||||||||
Pricing and bookkeeping fees | 10,389 | ||||||||||
Transfer agent fee | 5,250 | ||||||||||
Trustees' fees | 6,885 | ||||||||||
Audit fee | 20,948 | ||||||||||
Legal fee | 37,694 | ||||||||||
Custody fee | 2,904 | ||||||||||
Chief compliance officer expenses | 1,309 | ||||||||||
Other liabilities | 19,025 | ||||||||||
Total Liabilities | 13,332,183 | ||||||||||
Net Assets | 410,776,978 | ||||||||||
Net Assets Consist of | Paid-in capital | 411,518,312 | |||||||||
Undistributed net investment income | 25,185 | ||||||||||
Accumulated net realized loss | (766,519 | ) | |||||||||
Net Assets | 410,776,978 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities – BofA California Tax-Exempt Reserves
February 28, 2014 (Unaudited) (continued)
Adviser Class Shares | Net assets | $ | 8,634,021 | ||||||||
Shares outstanding | 8,643,164 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 91,337,079 | ||||||||
Shares outstanding | 91,434,642 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 10,658,980 | ||||||||
Shares outstanding | 10,670,271 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 166,078 | ||||||||
Shares outstanding | 166,254 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 2,692,052 | ||||||||
Shares outstanding | 2,695,008 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 11,124 | ||||||||
Shares outstanding | 11,136 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 297,277,644 | ||||||||
Shares outstanding | 297,582,449 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
7
Statement of Operations – BofA California Tax-Exempt Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 249,589 | |||||||||
Expenses | Investment advisory fee | 322,177 | |||||||||
Administration fee | 163,567 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 19,535 | ||||||||||
Investor Class Shares | 1,340 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 12,737 | ||||||||||
Daily Class Shares | 13,954 | ||||||||||
Investor Class Shares | 3,351 | ||||||||||
Liquidity Class Shares | 14 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 33 | ||||||||||
Trust Class Shares | 149,960 | ||||||||||
Transfer agent fee | 4,216 | ||||||||||
Pricing and bookkeeping fees | 54,563 | ||||||||||
Trustees' fees | 14,237 | ||||||||||
Custody fee | 5,700 | ||||||||||
Legal fees | 63,917 | ||||||||||
Chief compliance officer expenses | 3,949 | ||||||||||
Other expenses | 61,208 | ||||||||||
Total Expenses | 894,458 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (443,824 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (12,743 | ) | |||||||||
Daily Class Shares | (33,478 | ) | |||||||||
Institutional Class Shares | (33 | ) | |||||||||
Investor Class Shares | (4,693 | ) | |||||||||
Liquidity Class Shares | (13 | ) | |||||||||
Trust Class Shares | (150,085 | ) | |||||||||
Net Expenses | 249,589 | ||||||||||
Net Investment Income | — | ||||||||||
Net realized loss on investments | (991 | ) | |||||||||
Net Decrease Resulting from Operations | (991 | ) |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets – BofA California Tax-Exempt Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | — | 26,656 | ||||||||||||
Net realized gain (loss) on investments | (991 | ) | 4,724 | ||||||||||||
Net increase (decrease) resulting from operations | (991 | ) | 31,380 | ||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | — | (616 | ) | ||||||||||||
Capital Class Shares | — | (12,559 | ) | ||||||||||||
Daily Class Shares | — | (541 | ) | ||||||||||||
Institutional Class Shares | — | (29 | ) | ||||||||||||
Investor Class | — | (164 | ) | ||||||||||||
Trust Class Shares | — | (12,748 | ) | ||||||||||||
Total distributions to shareholders | — | (26,657 | ) | ||||||||||||
Net Capital Stock Transactions | (50,305,370 | ) | (57,737,660 | ) | |||||||||||
Total decrease in net assets | (50,306,361 | ) | (57,732,937 | ) | |||||||||||
Net Assets | Beginning of period | 461,083,339 | 518,816,276 | ||||||||||||
End of period | 410,776,978 | 461,083,339 | |||||||||||||
Undistributed net investment income at end of period | 25,185 | 25,185 |
See Accompanying Notes to Financial Statements.
9
Statements of Changes in Net Assets (continued) – BofA California Tax-Exempt
Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | — | — | 1,555 | 1,555 | |||||||||||||||
Distributions reinvested | — | — | 31 | 31 | |||||||||||||||
Redemptions | (4,451,917 | ) | (4,451,917 | ) | (30,546,023 | ) | (30,546,023 | ) | |||||||||||
Net decrease | (4,451,917 | ) | (4,451,917 | ) | (30,544,437 | ) | (30,544,437 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 149,661,640 | 149,661,640 | 329,250,527 | 329,250,527 | |||||||||||||||
Distributions reinvested | — | — | 4,278 | 4,278 | |||||||||||||||
Redemptions | (168,797,271 | ) | (168,797,271 | ) | (294,730,651 | ) | (294,730,651 | ) | |||||||||||
Net increase (decrease) | (19,135,631 | ) | (19,135,631 | ) | 34,524,154 | 34,524,154 | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | — | — | 258 | 258 | |||||||||||||||
Redemptions | (1,270,100 | ) | (1,270,100 | ) | (5,159,897 | ) | (5,159,897 | ) | |||||||||||
Net decrease | (1,270,100 | ) | (1,270,100 | ) | (5,159,639 | ) | (5,159,639 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | — | — | 10,015 | 10,015 | |||||||||||||||
Distributions reinvested | — | — | 4 | 4 | |||||||||||||||
Redemptions | (1,215 | ) | (1,215 | ) | (529,603 | ) | (529,603 | ) | |||||||||||
Net decrease | (1,215 | ) | (1,215 | ) | (519,584 | ) | (519,584 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 3,128,973 | 3,128,973 | 9,490,365 | 9,490,365 | |||||||||||||||
Distributions reinvested | — | — | 53 | 53 | |||||||||||||||
Redemptions | (3,306,829 | ) | (3,306,829 | ) | (15,631,452 | ) | (15,631,452 | ) | |||||||||||
Net decrease | (177,856 | ) | (177,856 | ) | (6,141,034 | ) | (6,141,034 | ) | |||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | — | — | 10,000 | 10,000 | |||||||||||||||
Net increase | — | — | 10,000 | 10,000 | |||||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 251,907,632 | 251,907,632 | 634,486,412 | 634,486,412 | |||||||||||||||
Distributions reinvested | — | — | 230 | 230 | |||||||||||||||
Redemptions | (277,176,283 | ) | (277,176,283 | ) | (684,393,762 | ) | (684,393,762 | ) | |||||||||||
Net decrease | (25,268,651 | ) | (25,268,651 | ) | (49,907,120 | ) | (49,907,120 | ) |
See Accompanying Notes to Financial Statements.
10
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | — | (d) | — | (e) | 0.0076 | ||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | — | (d) | — | (e) | 0.0076 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.0076 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.05 | % | 0.03 | % | 0.00 | %(i) | 0.76 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.12 | %(j) | 0.19 | %(k) | 0.23 | %(k) | 0.32 | %(k) | 0.35 | %(k) | 0.48 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.46 | %(j) | 0.38 | % | 0.34 | % | 0.23 | % | 0.18 | % | 0.06 | % | |||||||||||||||
Net investment income | — | — | %(i)(k) | — | (k) | — | %(i)(k) | — | %(i)(k) | 0.88 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 8,634 | $ | 13,083 | $ | 43,603 | $ | 62,936 | $ | 217,843 | $ | 309,195 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(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 California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | (d) | 0.001 | 0.0014 | 0.0100 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (d) | 0.001 | 0.0014 | 0.0100 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.0014 | ) | (0.0100 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.01 | % | 0.08 | % | 0.14 | % | 0.14 | % | 1.00 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.12 | %(h) | 0.17 | %(i) | 0.20 | %(i) | 0.20 | %(i) | 0.20 | %(i) | 0.24 | %(i) | |||||||||||||||
Waiver/Reimbursement | 0.21 | %(h) | 0.15 | % | 0.12 | % | 0.10 | % | 0.08 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.01 | %(i) | 0.03 | %(i) | 0.11 | %(i) | 0.14 | %(i) | 1.13 | %(i) | ||||||||||||||||
Net assets, end of period (000s) | $ | 91,337 | $ | 110,464 | $ | 75,981 | $ | 117,232 | $ | 193,989 | $ | 366,450 |
(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 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) Not annualized.
(h) Annualized.
(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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Daily Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | — | (d) | — | 0.0054 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | — | (d) | — | 0.0054 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | — | (0.0054 | ) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.00 | %(h) | 0.05 | % | 0.03 | % | 0.00 | % | 0.54 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.12 | %(i) | 0.18 | %(j) | 0.23 | %(j) | 0.32 | %(j) | 0.35 | %(j) | 0.73 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.81 | %(i) | 0.74 | % | 0.69 | % | 0.58 | % | 0.53 | % | 0.16 | % | |||||||||||||||
Net investment income | — | — | %(h)(j) | — | (j) | — | %(h)(j) | — | (j) | 0.62 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 10,659 | $ | 11,929 | $ | 17,086 | $ | 35,567 | $ | 273,194 | $ | 1,045,609 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) Annualized.
(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 California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | (d) | 0.001 | 0.0010 | 0.0096 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (d) | 0.001 | 0.0010 | 0.0096 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.0010 | ) | (0.0096 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.00 | %(h) | 0.05 | % | 0.11 | % | 0.10 | % | 0.96 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.12 | %(i) | 0.19 | %(j) | 0.22 | %(j) | 0.23 | %(j) | 0.24 | %(j) | 0.28 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.25 | %(i) | 0.17 | % | 0.13 | % | 0.11 | % | 0.08 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.01 | %(j) | — | %(h)(j) | 0.08 | %(j) | 0.10 | %(j) | 1.04 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 166 | $ | 167 | $ | 686 | $ | 110,499 | $ | 265,338 | $ | 447,721 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) Annualized.
(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 California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | — | (d) | — | 0.0068 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | — | (d) | — | 0.0068 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | — | (0.0068 | ) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.00 | %(h) | 0.05 | % | 0.03 | % | 0.00 | % | 0.68 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.12 | %(i) | 0.19 | %(j) | 0.22 | %(j) | 0.30 | %(j) | 0.35 | %(j) | 0.56 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.56 | %(i) | 0.48 | % | 0.44 | % | 0.35 | % | 0.28 | % | 0.08 | % | |||||||||||||||
Net investment income | — | — | %(h)(j) | — | (j) | — | %(h)(j) | — | (j) | 0.77 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 2,692 | $ | 2,870 | $ | 9,007 | $ | 6,201 | $ | 5,178 | $ | 188,904 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) Annualized.
(j) The benefits derived from expense reductions had an impact of 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | — | (d) | 0.0002 | 0.0085 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | — | (d) | 0.0002 | 0.0085 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | (0.0002 | ) | (0.0085 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.00 | %(h) | 0.04 | % | 0.03 | % | 0.01 | % | 0.85 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.12 | %(j) | 0.19 | %(k) | 0.21 | %(k) | 0.28 | %(k) | 0.33 | %(k) | 0.39 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.45 | %(j) | 0.38 | % | 0.35 | % | 0.27 | % | 0.20 | % | 0.15 | % | |||||||||||||||
Net investment income | — | — | %(h)(k) | — | (k) | — | %(h)(k) | 0.02 | %(k) | 1.79 | %(i)(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 11 | $ | 11 | $ | 1 | $ | 701 | $ | 1 | $ | 478 |
(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 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) Not annualized.
(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) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | (d) | 0.001 | 0.0005 | 0.0090 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (d) | 0.001 | 0.0005 | 0.0090 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | (0.001 | ) | (0.0005 | ) | (0.0090 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.00 | %(h) | 0.05 | % | 0.06 | % | 0.05 | % | 0.90 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.12 | %(i) | 0.18 | %(j) | 0.22 | %(j) | 0.28 | %(j) | 0.30 | %(j) | 0.34 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.31 | %(i) | 0.24 | % | 0.19 | % | 0.12 | % | 0.08 | % | 0.05 | % | |||||||||||||||
Net investment income | — | — | %(h)(j) | — | %(h)(j) | 0.02 | %(j) | 0.05 | %(j) | 0.96 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 297,278 | $ | 322,559 | $ | 372,451 | $ | 381,369 | $ | 311,692 | $ | 585,899 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) Annualized.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Notes to Financial Statements – BofA California Tax-Exempt Reserves
February 28, 2014 (Unaudited)
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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule
being 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 upon the specific identification method for both financial statement and federal income tax purposes.
18
BofA California Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
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 year ended August 31, 2013 was as follows:
Distributions paid from | |||||||
Tax-Exempt Income | $ | 26,628 | |||||
Ordinary Income* | 29 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
19
BofA California Tax-Exempt Reserves, February 28, 2014 (Unaudited)
As of August 31, 2013, the Fund had pre-Effective Date capital loss carry forwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carry Forwards | ||||||
2018 | $ | 764,679 |
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 50 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 (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly investment advisory fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor pursuant to which State Street provides
20
BofA California Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Daily Class, Investor Class and Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act permits the Fund to compensate and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class, Daily Class, Investor Class and Liquidity Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses
incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | 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 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
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 Shareholder Servicing Plan fees through December 31, 2014 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such payments and/or reimbursements 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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor and the Distributor.
21
BofA California Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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
The Advisor 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, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/14 | |||||||||||||||
$ | 587,907 | $ | 674,674 | $ | 898,417 | $ | 2,160,998 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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 Trust are employees of the Advisor 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
Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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.
Note 5. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
22
BofA California Tax-Exempt Reserves, February 28, 2014 (Unaudited)
Note 6. Shareholder Concentration
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 7. Significant Risks and Contingencies
The Fund's risks include, but are not limited to the following:
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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
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 volatile 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, instrumentalities and 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
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
23
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
24
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA California Tax-Exempt Reserves, the Board noted that the Fund's total expense ratio was above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple
25
measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In particular, in considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by BoAA to its other clients, including institutional investors,
unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
26
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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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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 California Tax-Exempt Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-CATE-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 12 | ||||||
Statement of Operations | 14 | ||||||
Statement of Changes in Net Assets | 15 | ||||||
Financial Highlights | 17 | ||||||
Notes to Financial Statements | 27 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 34 | ||||||
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 Cash Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,023.70 | 1.09 | 1.10 | 0.22 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,023.85 | 0.94 | 0.95 | 0.19 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.65 | 1.14 | 1.15 | 0.23 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,023.85 | 0.94 | 0.95 | 0.19 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.70 | 1.09 | 1.10 | 0.22 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.65 | 1.14 | 1.15 | 0.23 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.65 | 1.14 | 1.15 | 0.23 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.65 | 1.14 | 1.15 | 0.23 | ||||||||||||||||||||||||
Marsico Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.70 | 1.09 | 1.10 | 0.22 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.65 | 1.14 | 1.15 | 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 365.
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
February 28, 2014 (Unaudited)
Certificates of Deposit – 23.2% | |||||||||||
Par ($) | Value ($) | ||||||||||
Bank of Montreal Chicago | |||||||||||
0.180% 03/12/14 | 17,280,000 | 17,280,316 | |||||||||
Bank of Nova Scotia Houston | |||||||||||
0.220% 05/19/14 | 160,000,000 | 160,000,000 | |||||||||
0.230% 05/20/14 | 60,000,000 | 60,000,000 | |||||||||
0.230% 05/22/14 | 75,000,000 | 75,000,000 | |||||||||
0.240% 07/02/14 | 48,000,000 | 48,000,000 | |||||||||
0.250% 06/26/14 | 98,300,000 | 98,300,000 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd./NY | |||||||||||
0.200% 04/16/14 | 50,000,000 | 50,000,000 | |||||||||
0.210% 05/28/14 | 100,800,000 | 100,800,000 | |||||||||
0.400% 03/07/14 | 2,950,000 | 2,950,083 | |||||||||
Barclays Bank PLC NY | |||||||||||
0.230% 03/18/14 | 17,000,000 | 17,000,000 | |||||||||
Chase Bank USA N.A. | |||||||||||
0.250% 04/25/14 | 65,500,000 | 65,500,000 | |||||||||
CICFP | |||||||||||
0.270% 04/01/14 | 36,000,000 | 36,000,310 | |||||||||
Credit Industrial et Commercial NY | |||||||||||
0.210% 03/04/14 | 100,000,000 | 100,000,000 | |||||||||
0.230% 06/02/14 | 50,600,000 | 50,600,000 | |||||||||
0.230% 06/03/14 | 91,000,000 | 91,000,000 | |||||||||
Credit Suisse NY | |||||||||||
0.250% 04/29/14 | 8,000,000 | 8,000,000 | |||||||||
0.250% 05/05/14 | 65,000,000 | 65,000,000 | |||||||||
0.250% 05/07/14 | 40,300,000 | 40,300,000 | |||||||||
0.250% 06/04/14 | 10,000,000 | 10,000,000 | |||||||||
0.250% 07/15/14 | 82,000,000 | 82,000,000 | |||||||||
Deutsche Bank AG NY | |||||||||||
0.220% 04/30/14 | 47,300,000 | 47,300,000 | |||||||||
0.240% 04/30/14 | 39,000,000 | 39,000,000 | |||||||||
JPMorgan Chase Bank NA | |||||||||||
0.250% 04/21/14 | 74,510,000 | 74,510,000 | |||||||||
0.320% 06/06/14 | 14,550,000 | 14,551,951 | |||||||||
Mizuho Corporate Bank Ltd./NY | |||||||||||
0.220% 05/13/14 | 60,000,000 | 60,000,000 | |||||||||
Norinchukin Bank NY | |||||||||||
0.100% 03/04/14 | 233,000,000 | 233,000,000 | |||||||||
Rabobank Nederland NV/NY | |||||||||||
0.250% 07/01/14 | 1,706,000 | 1,706,000 | |||||||||
0.250% 07/15/14 | 5,025,000 | 5,025,000 | |||||||||
0.250% 07/21/14 | 69,975,000 | 69,975,000 | |||||||||
Skandinaviska Enskilda Banken AB/NY | |||||||||||
0.230% 07/02/14 | 95,600,000 | 95,600,000 | |||||||||
0.230% 07/03/14 | 55,000,000 | 55,000,000 |
Par ($) | Value ($) | ||||||||||
0.230% 07/09/14 | 31,028,000 | 31,028,000 | |||||||||
0.230% 07/15/14 | 12,972,000 | 12,972,000 | |||||||||
0.270% 03/18/14 | 7,000,000 | 7,000,099 | |||||||||
Sumitomo Mitsui Banking Corp./NY | |||||||||||
0.220% 03/11/14 | 51,200,000 | 51,200,000 | |||||||||
0.220% 03/18/14 | 43,500,000 | 43,500,000 | |||||||||
0.220% 04/02/14 | 44,640,000 | 44,640,000 | |||||||||
0.220% 04/21/14 | 61,700,000 | 61,700,000 | |||||||||
0.220% 06/03/14 | 39,000,000 | 39,000,000 | |||||||||
0.220% 06/11/14 | 20,300,000 | 20,300,000 | |||||||||
0.220% 06/18/14 | 39,000,000 | 39,000,000 | |||||||||
UBS AG Stamford CT | |||||||||||
0.515% 05/30/14 | 17,500,000 | 17,512,864 | |||||||||
Wells Fargo Bank N.A. | |||||||||||
0.210% 06/06/14 | 51,000,000 | 51,000,000 | |||||||||
0.210% 06/09/14 | 22,000,000 | 22,000,000 | |||||||||
Total Certificates of Deposit (cost of $2,314,251,623) | 2,314,251,623 | ||||||||||
Commercial Paper – 22.1% | |||||||||||
ASB Finance Ltd. | |||||||||||
0.220% 05/23/14 (a)(b) | 23,580,000 | 23,568,040 | |||||||||
0.240% 04/01/14 (a)(b) | 36,010,000 | 36,002,558 | |||||||||
0.250% 04/10/14 (a)(b) | 36,010,000 | 35,999,997 | |||||||||
Australia & New Zealand Banking Group | |||||||||||
0.140% 03/25/14 (a)(b) | 3,320,000 | 3,319,690 | |||||||||
Bank of Nova Scotia | |||||||||||
0.225% 05/19/14 (a) | 52,170,000 | 52,144,241 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd. | |||||||||||
0.200% 05/07/14 (a) | 6,000,000 | 5,997,767 | |||||||||
Barclays Bank PLC CCP | |||||||||||
0.210% 03/03/14 (a)(b)(c) | 26,000,000 | 25,999,697 | |||||||||
0.210% 03/06/14 (a)(b)(c) | 51,000,000 | 50,998,512 | |||||||||
0.260% 05/23/14 (b)(c) | 69,000,000 | 69,000,000 | |||||||||
0.260% 06/17/14 (b)(c) | 44,250,000 | 44,250,000 | |||||||||
0.270% 05/13/14 (b)(c) | 95,000,000 | 95,000,000 | |||||||||
BNZ International Funding Ltd. | |||||||||||
0.220% 06/13/14 (a)(b) | 36,310,000 | 36,286,923 | |||||||||
0.240% 04/02/14 (a)(b) | 5,999,000 | 5,997,720 | |||||||||
0.240% 04/11/14 (a)(b) | 61,095,000 | 61,078,301 | |||||||||
0.240% 06/13/14 (a)(b) | 10,305,000 | 10,297,855 | |||||||||
Caisse d'Amortissement de la Dette Sociale | |||||||||||
0.250% 04/22/14 (a)(b) | 12,965,000 | 12,960,318 | |||||||||
0.255% 04/22/14 (a)(b) | 75,000,000 | 74,972,375 |
See Accompanying Notes to Financial Statements.
2
BofA Cash Reserves
February 28, 2014 (Unaudited)
Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Coca-Cola Co. | |||||||||||
0.200% 07/25/14 (a)(b) | 20,395,000 | 20,378,457 | |||||||||
Collateralized Commercial Paper Co. LLC | |||||||||||
0.260% 08/18/14 (a)(c) | 40,000,000 | 39,950,889 | |||||||||
Commonwealth Bank of Australia | |||||||||||
0.262% 04/04/14 (b) | 860,000 | 860,112 | |||||||||
0.263% 03/28/14 (b) | 22,240,000 | 22,242,499 | |||||||||
Dexia Credit Local | |||||||||||
0.245% 07/07/14 (a)(d) | 35,000,000 | 34,969,511 | |||||||||
0.245% 07/08/14 (a)(d) | 15,000,000 | 14,986,831 | |||||||||
0.245% 07/11/14 (a)(d) | 45,000,000 | 44,959,575 | |||||||||
0.250% 06/25/14 (a)(d) | 75,114,000 | 75,053,492 | |||||||||
0.250% 07/01/14 (a)(d) | 105,000,000 | 104,911,042 | |||||||||
0.255% 06/25/14 (a)(d) | 100,000,000 | 99,917,833 | |||||||||
0.300% 08/21/14 (a)(d) | 30,000,000 | 29,956,750 | |||||||||
DNB NOR Bank ASA | |||||||||||
0.220% 05/12/14 (a)(b) | 8,965,000 | 8,961,055 | |||||||||
0.225% 07/28/14 (a)(b) | 75,000,000 | 74,930,156 | |||||||||
0.230% 04/01/14 (a)(b) | 11,000,000 | 10,997,821 | |||||||||
0.235% 08/26/14 (a)(b) | 45,000,000 | 44,947,712 | |||||||||
0.260% 03/03/14 (a)(b) | 45,750,000 | 45,749,339 | |||||||||
0.260% 03/10/14 (a)(b) | 13,000,000 | 12,999,155 | |||||||||
Erste Abwicklungsanstalt | |||||||||||
0.240% 04/02/14 (a)(b) | 1,845,000 | 1,844,606 | |||||||||
Massachusetts Mutual Life Insurance Co. | |||||||||||
0.130% 03/13/14 (a)(b) | 20,615,000 | 20,614,107 | |||||||||
0.130% 03/14/14 (a)(b) | 23,685,000 | 23,683,888 | |||||||||
0.130% 03/20/14 (a)(b) | 15,600,000 | 15,598,930 | |||||||||
Nationwide Building Society | |||||||||||
0.120% 03/04/14 (a)(b) | 5,155,000 | 5,154,948 | |||||||||
0.130% 03/04/14 (a)(b) | 3,410,000 | 3,409,963 | |||||||||
0.170% 04/01/14 (a)(b) | 20,525,000 | 20,521,995 | |||||||||
NV Bank Nederlandse Gemeenten | |||||||||||
0.220% 08/01/14 (a)(b) | 40,000,000 | 39,962,600 | |||||||||
Rabobank USA Financial Corp. | |||||||||||
0.230% 06/05/14 (a) | 25,900,000 | 25,884,115 | |||||||||
Skandinaviska Enskilda Banken AG | |||||||||||
0.230% 05/08/14 (a)(b) | 32,000,000 | 31,986,098 | |||||||||
Svenska Handelsbanken, Inc. | |||||||||||
0.230% 03/10/14 (a)(b) | 33,720,000 | 33,718,061 | |||||||||
Swedbank AB | |||||||||||
0.230% 07/07/14 (a) | 130,000,000 | 129,893,689 | |||||||||
0.230% 07/08/14 (a) | 22,325,000 | 22,306,601 | |||||||||
0.230% 07/09/14 (a) | 154,000,000 | 153,872,094 |
Par ($) | Value ($) | ||||||||||
Toyota Credit Canada, Inc. | |||||||||||
0.210% 06/09/14 (a) | 33,545,000 | 33,525,432 | |||||||||
0.230% 05/30/14 (a) | 25,670,000 | 25,655,240 | |||||||||
Toyota Credit Puerto Rico | |||||||||||
0.230% 08/13/14 (a) | 5,050,000 | 5,044,677 | |||||||||
Toyota Motor Credit Corp. | |||||||||||
0.210% 07/28/14 (a) | 25,000,000 | 24,978,271 | |||||||||
0.220% 07/01/14 (a) | 25,000,000 | 24,981,361 | |||||||||
0.230% 06/26/14 (a) | 21,150,000 | 21,134,190 | |||||||||
0.230% 06/27/14 (a) | 4,000,000 | 3,996,984 | |||||||||
0.250% 03/03/14 (a) | 81,850,000 | 81,848,863 | |||||||||
Westpac Securities NZ Ltd. | |||||||||||
0.225% 05/05/14 (a)(b) | 33,000,000 | 32,986,594 | |||||||||
0.225% 05/06/14 (a)(b) | 37,080,000 | 37,064,704 | |||||||||
0.240% 04/02/14 (a)(b) | 56,650,000 | 56,637,915 | |||||||||
Total Commercial Paper (cost of $2,206,952,149) | 2,206,952,149 | ||||||||||
Asset-Backed Commercial Paper – 21.0% | |||||||||||
Albion Capital Corp. | |||||||||||
0.210% 05/15/14 (a)(b) | 40,165,000 | 40,147,428 | |||||||||
Chariot Funding LLC | |||||||||||
0.230% 05/05/14 (a)(b) | 38,730,000 | 38,713,916 | |||||||||
0.230% 06/02/14 (a)(b) | 21,290,000 | 21,277,350 | |||||||||
0.230% 06/10/14 (a)(b) | 18,760,000 | 18,747,895 | |||||||||
0.230% 06/16/14 (a)(b) | 54,650,000 | 54,612,641 | |||||||||
0.240% 03/11/14 (a)(b) | 23,040,000 | 23,038,464 | |||||||||
0.240% 04/01/14 (a)(b) | 21,301,000 | 21,296,598 | |||||||||
0.240% 04/02/14 (a)(b) | 32,425,000 | 32,418,083 | |||||||||
FCAR Owner Trust | |||||||||||
0.200% 03/03/14 (a) | 10,750,000 | 10,749,881 | |||||||||
0.210% 04/15/14 (a) | 22,300,000 | 22,294,146 | |||||||||
0.220% 03/31/14 (a) | 7,730,000 | 7,728,583 | |||||||||
0.240% 04/01/14 (a) | 855,000 | 854,823 | |||||||||
Gotham Funding Corp. | |||||||||||
0.150% 03/20/14 (a)(b) | 57,200,000 | 57,195,472 | |||||||||
Jupiter Securitization Co. LLC | |||||||||||
0.230% 05/05/14 (a)(b) | 41,505,000 | 41,487,764 | |||||||||
0.230% 06/12/14 (a)(b) | 48,770,000 | 48,737,907 | |||||||||
0.240% 03/10/14 (a)(b) | 10,985,000 | 10,984,341 | |||||||||
0.240% 03/17/14 (a)(b) | 14,305,000 | 14,303,474 | |||||||||
0.240% 03/24/14 (a)(b) | 21,433,000 | 21,429,714 | |||||||||
0.240% 04/01/14 (a)(b) | 19,725,000 | 19,720,923 | |||||||||
Kells Funding LLC | |||||||||||
0.218% 12/10/14 (03/25/14) (b)(e)(f) | 60,850,000 | 60,850,000 | |||||||||
0.228% 12/11/14 (03/25/14) (b)(e)(f) | 40,000,000 | 40,000,000 |
See Accompanying Notes to Financial Statements.
3
BofA Cash Reserves
February 28, 2014 (Unaudited)
Asset-Backed Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.230% 08/27/14 (a)(b) | 25,000,000 | 24,971,410 | |||||||||
0.237% 12/09/14 (03/25/14) (b)(e)(f) | 70,000,000 | 70,000,000 | |||||||||
0.239% 12/08/14 (03/25/14) (b)(e)(f) | 10,955,000 | 10,955,000 | |||||||||
0.240% 04/22/14 (a)(b) | 18,550,000 | 18,543,569 | |||||||||
0.240% 05/02/14 (a)(b) | 37,800,000 | 37,784,376 | |||||||||
0.240% 08/19/14 (a)(b) | 16,490,000 | 16,471,201 | |||||||||
0.240% 08/22/14 (a)(b) | 57,010,000 | 56,943,868 | |||||||||
0.240% 09/02/14 (a)(b) | 81,825,000 | 81,724,082 | |||||||||
0.246% 01/09/15 (05/01/14) (b)(e)(f) | 10,000,000 | 10,000,000 | |||||||||
Liberty Street Funding LLC | |||||||||||
0.130% 03/03/14 (a)(b) | 34,000,000 | 33,999,754 | |||||||||
0.130% 03/11/14 (a)(b) | 24,990,000 | 24,989,098 | |||||||||
0.130% 03/12/14 (a)(b) | 83,300,000 | 83,296,691 | |||||||||
0.130% 03/25/14 (a)(b) | 28,950,000 | 28,947,491 | |||||||||
Manhattan Asset Funding Co. LLC | |||||||||||
0.140% 03/03/14 (a)(b) | 13,000,000 | 12,999,899 | |||||||||
0.150% 03/04/14 (a)(b) | 4,500,000 | 4,499,944 | |||||||||
0.150% 03/10/14 (a)(b) | 30,000,000 | 29,998,875 | |||||||||
0.160% 03/11/14 (a)(b) | 55,000,000 | 54,997,555 | |||||||||
0.165% 04/01/14 (a)(b) | 13,175,000 | 13,173,128 | |||||||||
0.170% 03/19/14 (a)(b) | 42,400,000 | 42,396,396 | |||||||||
Newport Funding Corp. | |||||||||||
0.220% 03/26/14 (a)(b) | 16,820,000 | 16,817,430 | |||||||||
Northern Pines Funding LLC | |||||||||||
0.220% 04/30/14 (a)(b)(c) | 50,000,000 | 49,981,667 | |||||||||
Old Line Funding LLC | |||||||||||
0.230% 05/27/14 (a)(b) | 27,339,000 | 27,323,804 | |||||||||
0.230% 06/12/14 (a)(b) | 33,680,000 | 33,657,837 | |||||||||
0.230% 08/08/14 (a)(b) | 40,000,000 | 39,959,111 | |||||||||
0.230% 08/13/14 (a)(b) | 46,010,000 | 45,961,498 | |||||||||
0.230% 08/25/14 (a)(b) | 28,270,000 | 28,238,031 | |||||||||
0.240% 03/04/14 (a)(b) | 25,960,000 | 25,959,481 | |||||||||
0.240% 03/05/14 (a)(b) | 43,394,000 | 43,392,843 | |||||||||
0.240% 03/07/14 (a)(b) | 13,190,000 | 13,189,472 | |||||||||
0.250% 04/10/14 (a)(b) | 22,768,000 | 22,761,676 | |||||||||
0.250% 04/14/14 (a)(b) | 17,045,000 | 17,039,792 | |||||||||
0.250% 04/22/14 (a)(b) | 30,855,000 | 30,843,858 | |||||||||
Regency Markets No. 1 LLC | |||||||||||
0.130% 03/07/14 (a)(b) | 127,795,000 | 127,792,231 | |||||||||
0.140% 03/12/14 (a)(b) | 29,530,000 | 29,528,737 | |||||||||
0.140% 03/17/14 (a)(b) | 31,347,000 | 31,345,049 | |||||||||
0.140% 03/20/14 (a)(b) | 13,012,000 | 13,011,039 | |||||||||
0.145% 03/20/14 (a)(b) | 84,484,000 | 84,477,535 | |||||||||
0.150% 03/17/14 (a)(b) | 17,800,000 | 17,798,813 |
Par ($) | Value ($) | ||||||||||
Sheffield Receivables Corp. | |||||||||||
0.220% 03/21/14 (a)(b) | 9,700,000 | 9,698,814 | |||||||||
Thunder Bay Funding LLC | |||||||||||
0.205% 04/29/14 (03/31/14) (b)(e)(f) | 15,500,000 | 15,500,000 | |||||||||
0.230% 05/19/14 (a)(b) | 8,925,000 | 8,920,495 | |||||||||
0.230% 06/09/14 (a)(b) | 14,290,000 | 14,280,870 | |||||||||
0.230% 06/11/14 (a)(b) | 22,651,000 | 22,636,239 | |||||||||
0.240% 03/03/14 (a)(b) | 10,000,000 | 9,999,867 | |||||||||
0.250% 04/14/14 (a)(b) | 7,790,000 | 7,787,620 | |||||||||
Victory Receivables Corp. | |||||||||||
0.150% 03/11/14 (a)(b) | 42,092,000 | 42,090,246 | |||||||||
0.150% 03/20/14 (a)(b) | 250,000 | 249,980 | |||||||||
Total Asset-Backed Commercial Paper (cost of $2,093,525,775) | 2,093,525,775 |
Time Deposits – 6.2%
Barclays Bank PLC | |||||||||||
0.080% 03/03/14 | 43,000,000 | 43,000,000 | |||||||||
Citibank N.A. | |||||||||||
0.080% 03/03/14 | 351,299,000 | 351,299,000 | |||||||||
US Bank Grand Cayman Time Deposit | |||||||||||
0.100% 03/03/14 | 224,725,000 | 224,725,000 | |||||||||
Total Time Deposits (cost of $619,024,000) | 619,024,000 |
Municipal Bonds (f)(g) – 2.5%
Colorado – 0.4% | |||||||||||
CO Housing & Finance Authority | |||||||||||
Multi-Family: | |||||||||||
Series 2003 A-1, SPA: FHLB 0.120% 10/01/33 (03/05/14) | 9,805,000 | 9,805,000 | |||||||||
Series 2004 A1, SPA: FHLB 0.080% 10/01/34 (03/05/14) | 16,015,000 | 16,015,000 | |||||||||
Series 2008 C1, SPA: FHLB 0.100% 10/01/38 (03/05/14) | 7,010,000 | 7,010,000 | |||||||||
Series 2005 B-1, | |||||||||||
SPA: FHLB 0.080% 04/01/40 (03/05/14) | 5,655,000 | 5,655,000 |
See Accompanying Notes to Financial Statements.
4
BofA Cash Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (f)(g) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CO Sheridan Redevelopment Agency | |||||||||||
South Santa, | |||||||||||
Series 2011, LOC: JPMorgan Chase Bank 0.250% 12/01/29 (03/06/14) | 1,600,000 | 1,600,000 | |||||||||
Colorado Total | 40,085,000 | ||||||||||
Florida – 0.2% | |||||||||||
FL Miami-Dade County Industrial Development Authority | |||||||||||
South Florida Stadium, | |||||||||||
Miami Stadium Project, Series 2007, LOC: TD Bank N.A. | |||||||||||
0.120% 07/01/37 (03/06/14) | 19,500,000 | 19,500,000 | |||||||||
Florida Total | 19,500,000 | ||||||||||
Illinois – 0.0% | |||||||||||
IL University of Illinois | |||||||||||
Series 2014 C | |||||||||||
LOC: Northern Trust Company 0.100% 04/01/44 (03/06/14) | 3,070,000 | 3,070,000 | |||||||||
Illinois Total | 3,070,000 | ||||||||||
Iowa – 0.1% | |||||||||||
IA Finance Authority | |||||||||||
Series 2004 B, AMT, | |||||||||||
SPA: FHLB 0.040% 07/01/34 (03/06/14) | 6,070,000 | 6,070,000 | |||||||||
Series 2007 G, | |||||||||||
SPA: FHLB 0.090% 01/01/38 (03/06/14) | 1,410,000 | 1,410,000 | |||||||||
Series 2009 G, | |||||||||||
SPA: FHLB 0.110% 01/01/39 (03/06/14) | 1,150,000 | 1,150,000 | |||||||||
Iowa Total | 8,630,000 |
Par ($) | Value ($) | ||||||||||
Maryland – 0.0% | |||||||||||
MD Easton | |||||||||||
William Hill Manor, Inc., | |||||||||||
Series 2009 B, LOC: Branch Banking & Trust 0.170% 01/01/26 (03/06/14) | 2,600,000 | 2,600,000 | |||||||||
Maryland Total | 2,600,000 | ||||||||||
Massachusetts – 0.1% | |||||||||||
MA Simmons College | |||||||||||
Series 2008, | |||||||||||
LOC: TD Bank N.A. 0.120% 10/01/22 (03/06/14) | 5,915,000 | 5,915,000 | |||||||||
Massachusetts Total | 5,915,000 | ||||||||||
Minnesota – 0.2% | |||||||||||
MN Office of Higher Education | |||||||||||
Supplies for Students, | |||||||||||
Series 2008 A, LOC: U.S. Bank N.A. 0.110% 12/01/43 (03/06/14) | 22,395,000 | 22,395,000 | |||||||||
Minnesota Total | 22,395,000 | ||||||||||
New Hampshire – 0.1% | |||||||||||
NH Health & Education Facilities Authority | |||||||||||
Dartmouth College, | |||||||||||
Series 2007 C, SPA: JPMorgan Chase Bank 0.080% 06/01/41 (03/05/14) | 11,635,000 | 11,635,000 | |||||||||
New Hampshire Total | 11,635,000 | ||||||||||
New York – 0.2% | |||||||||||
NY Housing Finance Agency | |||||||||||
Broadway, | |||||||||||
Series 2011 B, LOC: Wells Fargo Bank N.A. 0.100% 05/01/44 (03/05/14) | 5,485,000 | 5,485,000 |
See Accompanying Notes to Financial Statements.
5
BofA Cash Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (f)(g) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY New York City | |||||||||||
Series 2011 D-3, | |||||||||||
SPA: Bank of New York 0.030% 10/01/39 (03/03/14) | 16,715,000 | 16,715,000 | |||||||||
New York Total | 22,200,000 | ||||||||||
North Carolina – 0.1% | |||||||||||
NC Catawba | |||||||||||
Catawba Medical Center, | |||||||||||
Series 2009, LOC: Branch Banking & Trust 0.160% 10/01/34 (03/06/14) | 5,350,000 | 5,350,000 | |||||||||
North Carolina Total | 5,350,000 | ||||||||||
Oregon – 0.4% | |||||||||||
OR Housing & Community Services Department | |||||||||||
Series 2006 C, AMT, | |||||||||||
SPA: State Street Bank & Trust Co. 0.060% 07/01/36 (03/06/14) | 5,000,000 | 5,000,000 | |||||||||
Single Family: | |||||||||||
Series 2005 C, AMT, SPA: State Street Bank & Trust Co. 0.050% 07/01/35 (03/05/14) | 10,500,000 | 10,500,000 | |||||||||
Series 2006 F, AMT, SPA: State Street Bank & Trust Co. 0.040% 07/01/37 (03/06/14) | 20,000,000 | 20,000,000 | |||||||||
Oregon Total | 35,500,000 | ||||||||||
Texas – 0.4% | |||||||||||
TX State | |||||||||||
Small Business, | |||||||||||
Series 2005 B, SPA: National Australia Bank 0.060% 06/01/45 (03/06/14) | 3,025,000 | 3,025,000 | |||||||||
Veterans Housing Assistance, | |||||||||||
Series 2004 I, SPA: JPMorgan Chase Bank 0.100% 12/01/24 (03/05/14) | 7,700,000 | 7,700,000 |
Par ($) | Value ($) | ||||||||||
Veterans Housing: | |||||||||||
Series 1997 B-2, LIQ FAC: State Street Bank & Trust Co. 0.100% 12/01/29 (03/05/14) | 5,000,000 | 5,000,000 | |||||||||
Series 2004, SPA: JPMorgan Chase Bank NA 0.100% 06/01/20 (03/05/14) | 3,750,000 | 3,750,000 | |||||||||
Series 2006 B, LIQ FAC: Landesbank Hessen-Thüringen 0.140% 12/01/26 (03/05/14) | 8,390,000 | 8,390,000 | |||||||||
Veterans Land: | |||||||||||
Series 2002 A, SPA: Landesbank Hessen-Thüringen 0.150% 12/01/32 (03/04/14) | 5,100,000 | 5,100,000 | |||||||||
Series 2004, SPA: State Street Bank & Trust Co. 0.120% 12/01/24 (03/04/14) | 2,005,000 | 2,005,000 | |||||||||
Texas Total | 34,970,000 | ||||||||||
Utah – 0.1% | |||||||||||
UT State Board of Regents | |||||||||||
Series 2014 A | |||||||||||
LOC: Royal Bank of Canada 0.100% 02/01/49 (03/06/14) | 6,962,000 | 6,962,000 | |||||||||
Utah Total | 6,962,000 | ||||||||||
Washington – 0.0% | |||||||||||
WA Housing Finance Commission | |||||||||||
Spokane United Methodist Homes, | |||||||||||
Rockwood Programs, Series 1999 B, LOC: Wells Fargo Bank N.A. 0.120% 01/01/30 (03/06/14) | 2,485,000 | 2,485,000 | |||||||||
Washington Total | 2,485,000 |
See Accompanying Notes to Financial Statements.
6
BofA Cash Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (f)(g) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Wisconsin – 0.2% | |||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Wheaton Franciscan Services, | |||||||||||
Series 2007, LOC: PNC Bank N.A. 0.030% 08/15/36 (03/05/14) | 24,640,000 | 24,640,000 | |||||||||
Wisconsin Total | 24,640,000 | ||||||||||
Total Municipal Bonds (cost of $245,937,000) | 245,937,000 | ||||||||||
Government & Agency Obligations – 1.5% | |||||||||||
U.S. Government Agencies – 1.5% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.200% 01/13/16 (03/03/14) (e)(f) | 28,120,000 | 28,117,342 | |||||||||
0.230% 04/01/15 (03/03/14) (e)(f) | 8,065,000 | 8,065,000 | |||||||||
0.250% 10/20/14 (03/03/14) (e)(f) | 42,197,000 | 42,197,000 | |||||||||
0.250% 02/01/16 (03/03/14) (e)(f) | 2,700,000 | 2,702,102 | |||||||||
2.625% 04/17/14 | 13,440,000 | 13,483,339 | |||||||||
Federal National Mortgage Association | |||||||||||
0.134% 06/20/14 (03/20/14) (e)(f) | 50,695,000 | 50,691,881 | |||||||||
U.S. Government Agencies Total | 145,256,664 | ||||||||||
Total Government & Agency Obligations (cost of $145,256,664) | 145,256,664 | ||||||||||
Corporate Bonds – 1.3% | |||||||||||
Commonwealth Bank of Australia | |||||||||||
0.746% 06/25/14 (03/25/14) (b)(e)(f) | 2,557,000 | 2,561,414 | |||||||||
0.974% 03/17/14 (b)(e) | 6,272,000 | 6,274,149 | |||||||||
2.125% 03/17/14 (b) | 5,475,000 | 5,479,527 | |||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA/Netherlands | |||||||||||
4.200% 05/13/14 (b) | 3,920,000 | 3,951,735 | |||||||||
Credit Suisse New York | |||||||||||
5.500% 05/01/14 | 8,126,000 | 8,197,483 | |||||||||
General Electric Capital Corp. | |||||||||||
0.503% 09/15/14 (03/17/14) (e)(f) | 2,845,000 | 2,849,361 | |||||||||
3.750% 11/14/14 | 50,440,000 | 51,684,739 | |||||||||
4.750% 09/15/14 | 5,194,000 | 5,321,153 |
Par ($) | Value ($) | ||||||||||
National Australia Bank Ltd. | |||||||||||
0.962% 04/11/14 (b)(e) | 9,665,000 | 9,673,346 | |||||||||
1.185% 07/25/14 (04/28/14) (b)(e)(f) | 1,830,000 | 1,837,145 | |||||||||
2.250% 04/11/14 (b) | 1,790,000 | 1,794,037 | |||||||||
Svenska Handelsbanken AB | |||||||||||
4.875% 06/10/14 (b) | 6,822,000 | 6,908,413 | |||||||||
Toronto-Dominion Bank | |||||||||||
1.375% 07/14/14 | 3,574,000 | 3,589,088 | |||||||||
Toyota Motor Credit Corp. | |||||||||||
0.233% 06/11/14 (03/11/14) (e)(f) | 16,651,000 | 16,652,655 | |||||||||
Total Corporate Bonds (cost of $126,774,245) | 126,774,245 |
Repurchase Agreements – 22.2%
Repurchase agreement with | |||||||||||
ABN Amro, Inc., dated 02/28/14, due 03/03/14 at 0.140%, collateralized by U.S. Government Agency obligations, U.S. Treasury obligations, and corporate bonds with various maturities to 05/01/43, market value $102,180,459 (repurchase proceeds $100,001,167) | 100,000,000 | 100,000,000 | |||||||||
Repurchase agreement with | |||||||||||
ABN Amro, Inc., dated 02/28/14, due 03/03/14 at 0.240%, collateralized by common stocks, market value $78,437,084 (repurchase proceeds $71,306,426) | 71,305,000 | 71,305,000 | |||||||||
Repurchase agreement with | |||||||||||
ABN Amro, Inc., dated 02/28/14, due 03/21/14 at 0.300%, collateralized by common stocks, market value $20,192,204 (repurchase proceeds $18,359,283) | 18,355,000 | 18,355,000 |
See Accompanying Notes to Financial Statements.
7
BofA Cash Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
BNP Paribas, dated 02/14/14, due 04/15/14 at 0.380%, collateralized by corporate bonds with various maturities to 10/15/16, market value $27,516,139 (repurchase proceeds $25,025,840) | 25,010,000 | 25,010,000 | |||||||||
Repurchase agreement with | |||||||||||
BNP Paribas, dated 02/19/14, at 0.240%, collateralized by common stocks and exchange-traded funds, market value $171,263,960 (e)(h)(i) | 155,995,000 | 155,995,000 | |||||||||
Repurchase agreement with | |||||||||||
BNP Paribas, dated 02/21/14, due 4/22/14 at 0.380%, collateralized by corporate bonds with various maturities to 10/15/16, market value $28,274,614 (repurchase proceeds $25,716,277) | 25,700,000 | 25,700,000 | |||||||||
Repurchase agreement with | |||||||||||
BNP Paribas, dated 02/27/14, due 03/28/14 at 0.250%, collateralized by corporate bonds with various maturities to 06/03/21, market value $36,073,753 (repurchase proceeds $34,361,919) (i) | 34,355,000 | 34,355,000 | |||||||||
Repurchase agreement with | |||||||||||
BNP Paribas, dated 02/28/14, due 03/03/14 at 0.210%, collateralized by common stocks, preferred stocks and exchange-traded funds, market value $156,889,524 (repurchase proceeds $142,612,496) | 142,610,000 | 142,610,000 | |||||||||
Repurchase agreement with | |||||||||||
BNP Paribas, dated 02/28/14, due 03/03/14 at 0.270%, collateralized by corporate bonds with various maturities to 10/15/39, market value $39,216,426 (repurchase proceeds $35,650,802) | 35,650,000 | 35,650,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Credit Suisse First Boston, dated 02/28/14, due 03/03/14 at 0.160%, collateralized by corporate bonds with various maturities to 07/15/23, market value $35,433,809 (repurchase proceeds $33,745,450) | 33,745,000 | 33,745,000 | |||||||||
Repurchase agreement with | |||||||||||
Credit Suisse First Boston, dated 02/28/14, due 03/03/14 at 0.210%, collateralized by common stocks, market value $57,303,698 (repurchase proceeds $53,480,936) | 53,480,000 | 53,480,000 | |||||||||
Repurchase agreement with | |||||||||||
Credit Suisse First Boston, dated 02/28/14, due 04/04/14 at 0.340%, collateralized by common stocks, market value $70,201,061 (repurchase proceeds $66,011,813) (i) | 65,990,000 | 65,990,000 | |||||||||
Repurchase agreement with | |||||||||||
HSBC Securities USA, Inc., dated 02/03/14, at 0.160%, collateralized by corporate bonds with various maturities to 01/15/23, market value $43,403,120 (e)(h)(i) | 41,335,000 | 41,335,000 | |||||||||
Repurchase agreement with | |||||||||||
ING Bank, dated 02/28/2014, due 03/03/14 at 0.220%, collateralized by common stocks, market value $98,043,042 (repurchase proceeds $89,131,634) | 89,130,000 | 89,130,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 02/03/14, due 05/02/14 at 0.490%, collateralized by a corporate bond maturing 06/15/14, market value $15,159,646 (repurchase proceeds $13,790,498) | 13,774,000 | 13,774,000 |
See Accompanying Notes to Financial Statements.
8
BofA Cash Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 02/18/14, due 05/19/14 at 0.380%, collateralized by common stocks, market value $11,556,031 (repurchase proceeds $10,961,403) | 10,951,000 | 10,951,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 02/25/14, due 05/27/14 at 0.380%, collateralized by common stocks and exchange-traded funds, market value $11,736,841 (repurchase proceeds $10,865,427) | 10,855,000 | 10,855,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 02/28/14, due 04/14/14 at 0.443%, collateralized by exchange-traded funds, market value $88,009,921 (repurchase proceeds $80,044,300) (i) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 02/28/14, due 04/14/14 at 0.550%, collateralized by corporate bonds with various maturities to 11/15/40, market value $81,303,266 (repurchase proceeds $73,950,806) (i) | 73,900,000 | 73,900,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 02/28/14, due 05/29/14 at 0.380%, collateralized by common stocks, market value $9,406,549 (repurchase proceeds $8,923,469) | 8,915,000 | 8,915,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 02/28/14, due 05/29/14 at 0.600%, collateralized by corporate bonds with various maturities to 12/15/35, market value $27,883,181 (repurchase proceeds $25,383,018) (i) | 25,345,000 | 25,345,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 12/11/13, due 03/11/14 at 0.490%, collateralized by a corporate bond maturing 10/15/17, market value $10,000,110 (repurchase proceeds $9,091,123) | 9,080,000 | 9,080,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 12/18/13, due 03/18/14 at 0.490%, collateralized by corporate bonds with various maturities to 06/01/38, market value $10,231,142 (repurchase proceeds $9,301,380) | 9,290,000 | 9,290,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 12/23/13, due 03/24/14 at 0.490%, collateralized by a corporate bond maturing 06/15/14, market value $10,056,970 (repurchase proceeds $9,141,309) | 9,130,000 | 9,130,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, dated 12/30/13, due 03/28/14 at 0.500%, collateralized by corporate bonds with various maturities to 06/01/38, market value $19,946,608 (repurchase proceeds $18,137,141) | 18,115,000 | 18,115,000 |
See Accompanying Notes to Financial Statements.
9
BofA Cash Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by corporate bonds with various maturities to 02/01/24, market value $118,010,975 (repurchase proceeds $112,391,405) | 112,390,000 | 112,390,000 | |||||||||
Repurchase agreement with | |||||||||||
Mizuho Securities USA, Inc., dated 02/03/14, at 0.170%, collateralized by corporate bonds and a U.S. Treasury obligation with various maturities to 02/15/24, market value $375,691,920 (e)(h)(i) | 358,715,000 | 358,715,000 | |||||||||
Repurchase agreement with | |||||||||||
RBC Capital Markets, dated 02/25/14, due 03/04/14 at 0.150%, collateralized by corporate bonds with various maturities to 02/01/24, market value $56,864,173 (repurchase proceeds $54,156,580) | 54,155,000 | 54,155,000 | |||||||||
Repurchase agreement with | |||||||||||
SG Americas Securities LLC, dated 02/28/14, due 03/03/14 at 0.180%, collateralized by corporate bonds with various maturities to 04/15/23, market value $74,871,373 repurchase proceeds ($71,306,070) | 71,305,000 | 71,305,000 | |||||||||
Repurchase agreement with | |||||||||||
SG Americas Securities LLC, dated 02/28/14, due 03/03/14 at 0.210%, collateralized by corporate bonds with various maturities to 09/15/23, market value $74,871,560 repurchase proceeds ($71,306,248) | 71,305,000 | 71,305,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
TD USA Securities, Inc., dated 02/28/14, due 03/03/14 at 0.090%, collateralized by corporate bonds with various maturities to 02/01/24, market value $132,841,747 (repurchase proceeds $126,515,949) | 126,515,000 | 126,515,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank NA, dated 02/03/14, at 0.160%, collateralized by corporate bonds and a U.S. Government Agency obligation with various maturities to 06/01/42, market value $92,334,016 (e)(h)(i) | 88,100,000 | 88,100,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank NA, dated 02/25/14, due 03/04/14 at 0.290%, collateralized by corporate bonds with various maturities to 02/15/24, market value $49,756,655 (repurchase proceeds $47,387,672) | 47,385,000 | 47,385,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank NA, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by a U.S. Treasury obligation maturing 02/28/21, market value $90,419,054 (repurchase proceeds $88,646,108) | 88,645,000 | 88,645,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank NA, dated 12/10/13, due 03/12/14 at 0.350%, collateralized by corporate bonds with various maturities to 11/15/23, market value $9,158,135 (repurchase proceeds $8,722,795) | 8,715,000 | 8,715,000 |
See Accompanying Notes to Financial Statements.
10
BofA Cash Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank NA, dated 12/11/13, due 03/13/14 at 0.350%, collateralized by corporate bonds with various maturities to 01/31/24, market value $15,263,409 (repurchase proceeds $14,537,992) | 14,525,000 | 14,525,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank NA, dated 12/18/13, due 03/18/14 at 0.350%, collateralized by corporate bonds with various maturities to 11/15/23, market value $13,665,207 (repurchase proceeds $13,016,379) | 13,005,000 | 13,005,000 | |||||||||
Total Repurchase Agreements (cost of $2,216,775,000) | 2,216,775,000 | ||||||||||
Total Investments – 100.0% (cost of $9,968,496,456) (j) | 9,968,496,456 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 746,161 | ||||||||||
Net Assets – 100.0% | 9,969,242,617 |
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 February 28, 2014, these securities, which are not illiquid, amounted to $3,241,360,809 or 32.5% of net assets for the Fund.
(c) Collateralized commercial paper.
(d) Guaranteed by the Kingdom of Belgium, the French Republic and the Grand Duchy of Luxembourg.
(e) The interest rate shown on floating rate or variable rate securities reflects the rate at February 28, 2014.
(f) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(g) 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 February 28, 2014.
(h) Open repurchase agreement with no specific maturity date.
(i) This security is subject to a demand feature.
(j) Cost for federal income tax purposes is $9,968,496,456.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 2,314,251,623 | $ | — | $ | 2,314,251,623 | |||||||||||
Total Commercial Paper | — | 2,206,952,149 | — | 2,206,952,149 | |||||||||||||||
Total Asset-Backed Commercial Paper | — | 2,093,525,775 | — | 2,093,525,775 | |||||||||||||||
Total Time Deposits | — | 619,024,000 | — | 619,024,000 | |||||||||||||||
Total Municipal Bonds | — | 245,937,000 | — | 245,937,000 | |||||||||||||||
Total Government & Agency Obligations | — | 145,256,664 | — | 145,256,664 | |||||||||||||||
Total Corporate Bonds | — | 126,774,245 | — | 126,774,245 | |||||||||||||||
Total Repurchase Agreements | — | 2,216,775,000 | — | 2,216,775,000 | |||||||||||||||
Total Investments | $ | — | $ | 9,968,496,456 | $ | — | $ | 9,968,496,456 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Certificates of Deposit | 23.2 | ||||||
Commercial Paper | 22.1 | ||||||
Asset-Backed Commercial Paper | 21.0 | ||||||
Time Deposits | 6.2 | ||||||
Municipal Bonds | 2.5 | ||||||
Government & Agency Obligations | 1.5 | ||||||
Corporate Bonds | 1.3 | ||||||
77.8 | |||||||
Repurchase Agreements | 22.2 | ||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
FHLB | Federal Home Loan Bank | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
11
Statement of Assets and Liabilities – BofA Cash Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 7,751,721,456 | |||||||||
Repurchase agreements, at amortized cost approximating value | 2,216,775,000 | ||||||||||
Total investments, at value | 9,968,496,456 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 105,552 | ||||||||||
Interest | 2,551,117 | ||||||||||
Expense reimbursement due from investment advisor | 88,320 | ||||||||||
Trustees' deferred compensation plan | 96,702 | ||||||||||
Prepaid expenses | 252,621 | ||||||||||
Total Assets | 9,971,590,768 | ||||||||||
Liabilities | Payable to custodian bank | 102,879 | |||||||||
Payable for: | |||||||||||
Fund shares repurchased | 265,997 | ||||||||||
Distributions | 82,138 | ||||||||||
Investment advisory fee | 1,062,752 | ||||||||||
Administration fee | 290,312 | ||||||||||
Pricing and bookkeeping fees | 20,998 | ||||||||||
Transfer agent fee | 89,009 | ||||||||||
Trustees' fees | 22,607 | ||||||||||
Custody fee | 52,183 | ||||||||||
Shareholder administration fee | 51,106 | ||||||||||
Chief compliance officer expenses | 4,221 | ||||||||||
Trustees' deferred compensation plan | 96,702 | ||||||||||
Other liabilities | 207,247 | ||||||||||
Total Liabilities | 2,348,151 | ||||||||||
Net Assets | 9,969,242,617 | ||||||||||
Net Assets Consist of | Paid-in capital | 9,966,671,853 | |||||||||
Undistributed net investment income | 4,900,233 | ||||||||||
Accumulated net realized loss | (2,329,469 | ) | |||||||||
Net Assets | 9,969,242,617 |
See Accompanying Notes to Financial Statements.
12
Statement of Assets and Liabilities (continued) – BofA Cash Reserves
February 28, 2014 (Unaudited)
Adviser Class Shares | Net assets | $ | 1,378,143,379 | ||||||||
Shares outstanding | 1,378,071,495 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 6,843,361,841 | ||||||||
Shares outstanding | 6,843,010,521 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 706,286,144 | ||||||||
Shares outstanding | 706,250,186 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 155,449,096 | ||||||||
Shares outstanding | 155,441,079 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 248,340,512 | ||||||||
Shares outstanding | 248,328,537 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 17,158,357 | ||||||||
Shares outstanding | 17,157,490 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 19,522,150 | ||||||||
Shares outstanding | 19,521,141 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 25,444,234 | ||||||||
Shares outstanding | 25,442,929 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Marsico Shares | Net assets | $ | 7,465,951 | ||||||||
Shares outstanding | 7,465,569 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 568,070,953 | ||||||||
Shares outstanding | 568,041,718 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
13
Statement of Operations – BofA Cash Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 10,655,811 | |||||||||
Expenses | Investment advisory fee | 7,118,402 | |||||||||
Administration fee | 4,665,601 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 1,326,423 | ||||||||||
Investor Class Shares | 9,122 | ||||||||||
Investor II Class Shares | 10,644 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 1,940,693 | ||||||||||
Daily Class Shares | 947,445 | ||||||||||
Investor Class Shares | 22,806 | ||||||||||
Investor II Class Shares | 26,610 | ||||||||||
Liquidity Class Shares | 32,866 | ||||||||||
Marsico Shares | 9,140 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 49,517 | ||||||||||
Investor II Class Shares | 10,644 | ||||||||||
Marsico Shares | 3,656 | ||||||||||
Trust Class Shares | 311,534 | ||||||||||
Transfer agent fee | 220,393 | ||||||||||
Pricing and bookkeeping fees | 93,732 | ||||||||||
Trustees' fees | 40,798 | ||||||||||
Custody fee | 114,565 | ||||||||||
Chief compliance officer expenses | 11,323 | ||||||||||
Other expenses | 685,114 | ||||||||||
Total Expenses | 17,651,028 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (3,922,568 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (1,670,463 | ) | |||||||||
Daily Class Shares | (2,141,694 | ) | |||||||||
Institutional Class Shares | (8,739 | ) | |||||||||
Investor Class Shares | (28,751 | ) | |||||||||
Investor II Class Shares | (44,165 | ) | |||||||||
Liquidity Class Shares | (28,296 | ) | |||||||||
Marsico Shares | (11,534 | ) | |||||||||
Trust Class Shares | (203,835 | ) | |||||||||
Net Expenses | 9,590,983 | ||||||||||
Net Investment Income | 1,064,828 | ||||||||||
Net realized gain on investments | 16,096 | ||||||||||
Net Increase Resulting from Operations | 1,080,924 |
See Accompanying Notes to Financial Statements.
14
Statement of Changes in Net Assets – BofA Cash Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | 1,064,828 | 5,805,526 | ||||||||||||
Net realized gain on investments | 16,096 | 20,187 | |||||||||||||
Net increase resulting from operations | 1,080,924 | 5,825,713 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Capital Class Shares | (1,033,508 | ) | (5,171,029 | ) | |||||||||||
Institutional Capital Shares | (28,718 | ) | (185,452 | ) | |||||||||||
Institutional Class Shares | (2,609 | ) | (349,179 | ) | |||||||||||
Liquidity Class Shares | — | (25 | ) | ||||||||||||
Trust Class Shares | — | (99,842 | ) | ||||||||||||
Total distributions to shareholders | (1,064,835 | ) | (5,805,527 | ) | |||||||||||
Net Capital Stock Transactions | 992,621,049 | (2,418,457,915 | ) | ||||||||||||
Total increase (decrease) in net assets | 992,637,138 | (2,418,437,729 | ) | ||||||||||||
Net Assets | Beginning of period | 8,976,605,479 | 11,395,043,208 | ||||||||||||
End of period | 9,969,242,617 | 8,976,605,479 | |||||||||||||
Undistributed net investment income at end of period | 4,900,233 | 4,900,240 |
See Accompanying Notes to Financial Statements.
15
Statement of Changes in Net Assets (continued) – BofA Cash Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 6,167,263,032 | 6,167,263,032 | 12,304,726,726 | 12,304,726,726 | |||||||||||||||
Redemptions | (6,270,115,836 | ) | (6,270,115,836 | ) | (12,565,271,416 | ) | (12,565,271,416 | ) | |||||||||||
Net decrease | (102,852,804 | ) | (102,852,804 | ) | (260,544,690 | ) | (260,544,690 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 10,064,844,532 | 10,064,844,532 | 19,888,692,177 | 19,888,692,177 | |||||||||||||||
Distributions reinvested | 328,421 | 328,421 | 2,478,432 | 2,478,432 | |||||||||||||||
Redemptions | (8,717,017,920 | ) | (8,717,017,920 | ) | (20,959,120,765 | ) | (20,959,120,765 | ) | |||||||||||
Net increase (decrease) | 1,348,155,033 | 1,348,155,033 | (1,067,950,156 | ) | (1,067,950,156 | ) | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 24,185,296 | 24,185,296 | 34,041,526 | 34,041,526 | |||||||||||||||
Redemptions | (124,178,009 | ) | (124,178,009 | ) | (301,838,090 | ) | (301,838,090 | ) | |||||||||||
Net decrease | (99,992,713 | ) | (99,992,713 | ) | (267,796,564 | ) | (267,796,564 | ) | |||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 24,708,569 | 24,708,569 | 37,752,427 | 37,752,428 | |||||||||||||||
Distributions reinvested | 27,658 | 27,658 | 175,903 | 175,903 | |||||||||||||||
Redemptions | (38,596,120 | ) | (38,596,120 | ) | (94,752,344 | ) | (94,752,344 | ) | |||||||||||
Net decrease | (13,859,893 | ) | (13,859,893 | ) | (56,824,014 | ) | (56,824,013 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 472,799,060 | 472,799,060 | 3,047,692,451 | 3,047,692,451 | |||||||||||||||
Distributions reinvested | 2,444 | 2,444 | 328,407 | 328,407 | |||||||||||||||
Redemptions | (522,039,217 | ) | (522,039,217 | ) | (3,626,500,410 | ) | (3,626,500,410 | ) | |||||||||||
Net decrease | (49,237,713 | ) | (49,237,713 | ) | (578,479,552 | ) | (578,479,552 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 1,722,878 | 1,722,878 | 7,189,924 | 7,189,924 | |||||||||||||||
Redemptions | (3,062,382 | ) | (3,062,382 | ) | (12,943,328 | ) | (12,943,328 | ) | |||||||||||
Net decrease | (1,339,504 | ) | (1,339,504 | ) | (5,753,404 | ) | (5,753,404 | ) | |||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 2,287,461 | 2,287,461 | 5,229,282 | 5,229,282 | |||||||||||||||
Redemptions | (5,977,430 | ) | (5,977,430 | ) | (11,421,742 | ) | (11,421,742 | ) | |||||||||||
Net decrease | (3,689,969 | ) | (3,689,969 | ) | (6,192,460 | ) | (6,192,460 | ) | |||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 2,711,903 | 2,711,903 | 76,436,930 | 76,436,930 | |||||||||||||||
Distributions reinvested | — | — | 24 | 24 | |||||||||||||||
Redemptions | (4,258,556 | ) | (4,258,556 | ) | (164,030,389 | ) | (164,030,389 | ) | |||||||||||
Net decrease | (1,546,653 | ) | (1,546,653 | ) | (87,593,435 | ) | (87,593,435 | ) | |||||||||||
Marsico Shares | |||||||||||||||||||
Subscriptions | 2,054,468 | 2,054,468 | 4,341,841 | 4,341,841 | |||||||||||||||
Redemptions | (2,276,076 | ) | (2,276,076 | ) | (5,695,523 | ) | (5,695,523 | ) | |||||||||||
Net decrease | (221,608 | ) | (221,608 | ) | (1,353,682 | ) | (1,353,682 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 451,164,216 | 451,164,216 | 1,227,300,047 | 1,227,300,047 | |||||||||||||||
Distributions reinvested | — | — | 3,228 | 3,228 | |||||||||||||||
Redemptions | (533,957,343 | ) | (533,957,343 | ) | (1,313,273,234 | ) | (1,313,273,234 | ) | |||||||||||
Net decrease | (82,793,127 | ) | (82,793,127 | ) | (85,969,959 | ) | (85,969,959 | ) |
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | — | 0.01 | |||||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | — | — | — | (0.01 | ) | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.89 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.22 | %(j) | 0.29 | %(k) | 0.36 | %(k) | 0.32 | %(k) | 0.34 | %(k) | 0.50 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.30 | %(j) | 0.23 | % | 0.17 | % | 0.21 | % | 0.19 | % | 0.06 | % | |||||||||||||||
Net investment income | — | — | (k) | — | (k) | — | (k) | — | (k) | 1.03 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 1,378,143 | $ | 1,481,000 | $ | 1,741,542 | $ | 1,964,131 | $ | 4,362,143 | $ | 6,761,914 |
(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 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) Not annualized.
(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 would have been (1.35)%.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | 0.001 | 0.002 | 0.001 | — | (e) | 0.01 | |||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | 0.001 | 0.002 | 0.001 | — | (e) | 0.01 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | (0.001 | ) | (0.002 | ) | (0.001 | ) | — | (e) | (0.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.02 | %(h) | 0.09 | % | 0.16 | % | 0.11 | % | 0.13 | % | 1.13 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.19 | %(j) | 0.20 | %(k) | 0.20 | %(k) | 0.20 | %(k) | 0.21 | %(k) | 0.26 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.08 | %(j) | 0.07 | % | 0.08 | % | 0.08 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.03 | %(j) | 0.09 | %(k) | 0.16 | %(k) | 0.11 | %(k) | 0.13 | %(k) | 1.10 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 6,843,362 | $ | 5,495,170 | $ | 6,563,081 | $ | 4,638,454 | $ | 6,748,972 | $ | 9,410,196 |
(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 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) Not annualized.
(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 would have been (1.11)%.
(j) Annualized.
(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 Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Daily Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | — | 0.01 | |||||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
From net investment income | — | — | — | — | — | (0.01 | ) | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.65 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.23 | %(j) | 0.29 | %(k) | 0.35 | %(k) | 0.32 | %(k) | 0.34 | %(k) | 0.75 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.65 | %(j) | 0.58 | % | 0.52 | % | 0.56 | % | 0.54 | % | 0.16 | % | |||||||||||||||
Net investment income | — | — | (k) | — | (k) | — | (k) | — | (k) | 0.71 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 706,286 | $ | 806,286 | $ | 1,074,085 | $ | 1,672,737 | $ | 7,097,157 | $ | 12,642,466 |
(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 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) Not annualized.
(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 would have been (1.59)%.
(j) Annualized.
(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 Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Capital Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (e) | 0.001 | 0.002 | 0.001 | — | (f) | 0.01 | |||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | — | (f) | |||||||||||||||
Total from Investment Operations | — | (e) | 0.001 | 0.002 | 0.001 | — | (f) | 0.01 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (e) | (0.001 | ) | (0.002 | ) | (0.001 | ) | — | (f) | (0.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.02 | %(i) | 0.09 | % | 0.16 | % | 0.11 | % | 0.13 | % | 1.13 | %(j) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.19 | %(k) | 0.20 | %(l) | 0.20 | %(l) | 0.20 | %(l) | 0.21 | %(l) | 0.26 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.08 | %(k) | 0.07 | % | 0.08 | % | 0.08 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.03 | %(k) | 0.09 | %(l) | 0.16 | %(l) | 0.11 | %(l) | 0.13 | %(l) | 1.15 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 155,449 | $ | 169,310 | $ | 226,134 | $ | 353,702 | $ | 436,201 | $ | 610,474 |
(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 $0.001 per share.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested.
(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) Not annualized.
(j) 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 would have been (1.11)%.
(k) Annualized.
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | 0.001 | 0.001 | — | (e) | 0.01 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | 0.001 | 0.001 | — | (e) | 0.01 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | (0.001 | ) | (0.001 | ) | — | (e) | (0.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.05 | % | 0.12 | % | 0.07 | % | 0.09 | % | 1.09 | %(j) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.22 | %(k) | 0.24 | %(l) | 0.24 | %(l) | 0.24 | %(l) | 0.25 | %(l) | 0.30 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.09 | %(k) | 0.07 | % | 0.08 | % | 0.08 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | — | %(k)(i) | 0.05 | %(l) | 0.12 | %(l) | 0.08 | %(l) | 0.09 | %(l) | 1.20 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 248,341 | $ | 297,581 | $ | 876,079 | $ | 997,386 | $ | 1,672,273 | $ | 2,349,743 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) 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 would have been (1.15)%.
(k) Annualized.
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | — | 0.01 | |||||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | — | — | — | (0.01 | ) | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.81 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.23 | %(j) | 0.29 | %(k) | 0.35 | %(k) | 0.32 | %(k) | 0.33 | %(k) | 0.59 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.40 | %(j) | 0.33 | % | 0.27 | % | 0.31 | % | 0.30 | % | 0.07 | % | |||||||||||||||
Net investment income | — | — | (k) | — | (k) | — | (k) | — | (k) | 0.91 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 17,158 | $ | 18,498 | $ | 24,251 | $ | 30,707 | $ | 70,579 | $ | 380,937 |
(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 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) Not annualized.
(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 would have been (1.43)%.
(j) Annualized.
(k) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor II Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | — | 0.01 | |||||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | — | (f) | |||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | — | — | — | (0.01 | ) | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.00 | %(i) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.74 | %(j)(k) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.23 | %(l) | 0.29 | %(m) | 0.35 | %(m) | 0.32 | %(m) | 0.33 | %(m) | 0.66 | %(m) | |||||||||||||||
Waiver/Reimbursement | 0.50 | %(l) | 0.43 | % | 0.37 | % | 0.41 | % | 0.40 | % | 0.10 | % | |||||||||||||||
Net investment income | — | — | (m) | — | (m) | — | (m) | — | (m) | 0.94 | %(j)(m) | ||||||||||||||||
Net assets, end of period (000s) | $ | 19,522 | $ | 23,212 | $ | 29,405 | $ | 31,245 | $ | 56,305 | $ | 382,035 |
(a) On October 1, 2011, Class A shares were renamed Investor II Class shares and Class B and C 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 at net asset value assuming all distributions reinvested.
(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) Not annualized.
(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) 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 would have been (1.50)%.
(l) Annualized.
(m) 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 date for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.01 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.02 | % | 0.00 | %(i) | 0.01 | % | 0.98 | %(j) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.23 | %(k) | 0.29 | %(l) | 0.34 | %(l) | 0.31 | %(l) | 0.33 | %(l) | 0.41 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.30 | %(k) | 0.23 | % | 0.19 | % | 0.22 | % | 0.20 | % | 0.15 | % | |||||||||||||||
Net investment income | — | — | %(i)(l) | 0.02 | %(l) | — | %(i)(l) | 0.01 | %(l) | 1.07 | %(l) | ||||||||||||||||
Net assets, end of period (000s) | $ | 25,444 | $ | 26,991 | $ | 114,588 | $ | 116,540 | $ | 174,664 | $ | 463,145 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) 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 would have been (1.26)%.
(k) Annualized.
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Marsico Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | — | 0.01 | |||||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | — | — | — | (0.01 | ) | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.81 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.22 | %(j) | 0.29 | %(k) | 0.35 | %(k) | 0.31 | %(k) | 0.34 | %(k) | 0.58 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.40 | %(j) | 0.33 | % | 0.27 | % | 0.32 | % | 0.29 | % | 0.08 | % | |||||||||||||||
Net investment income | — | — | (k) | — | (k) | — | (k) | — | (k) | 0.84 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 7,466 | $ | 7,688 | $ | 9,041 | $ | 11,348 | $ | 14,109 | $ | 18,497 |
(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 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) Not annualized.
(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 would have been (1.43)%.
(j) Annualized.
(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 data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | 0.001 | — | (d) | — | (e) | 0.01 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | 0.001 | — | (d) | — | (e) | 0.01 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | — | (d) | — | (e) | (0.01 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.01 | % | 0.06 | % | 0.02 | % | 0.04 | % | 1.03 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.23 | %(j) | 0.28 | %(k) | 0.30 | %(k) | 0.29 | %(k) | 0.30 | %(k) | 0.36 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.15 | %(j) | 0.09 | % | 0.08 | % | 0.09 | % | 0.08 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.01 | %(k) | 0.06 | %(k) | 0.02 | %(k) | 0.04 | %(k) | 1.14 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 568,071 | $ | 650,870 | $ | 736,836 | $ | 754,638 | $ | 946,914 | $ | 934,916 |
(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 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) Not annualized.
(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 would have been (1.21)%.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
26
Notes to Financial Statements – BofA Cash Reserves
February 28, 2014 (Unaudited)
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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule being 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.
27
BofA Cash Reserves, February 28, 2014 (Unaudited)
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, the Fund's investment advisor (the "Advisor"), determines are creditworthy. Repurchase agreements are collateralized by the securities purchased by the Fund under the repurchase agreements, which may include securities that the Fund is not otherwise directly permitted to purchase, such as long-term government bonds, investment-grade corporate bonds and equity securities. The Advisor is responsible for determining that such underlying securities are 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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
Note 3. Capital Support
On October 5, 2009, an affiliate of the Advisor purchased certain securities owned by the Fund. In addition, on October 8, 2009, an affiliate of the Advisor 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
28
BofA Cash Reserves, February 28, 2014 (Unaudited)
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 year ended August 31, 2013 was as follows:
Distributions paid from | |||||||
Ordinary Income* | $ | 5,805,527 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
As of August 31, 2013, the Fund had pre-Effective Date capital loss carry forwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carry Forwards | ||||||
2017 | $ | 2,345,565 |
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 50 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 5. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
The Advisor, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly investment advisory fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date. In addition, the Advisor, at its discretion, has voluntarily agreed to waive a portion of its Advisory fee. This waiver may be modified or discontinued by the Advisor at any time.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.14% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, at the
29
BofA Cash Reserves, February 28, 2014 (Unaudited)
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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor 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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Effective February 1, 2013, the Accounting Services Agreement was amended to reflect Shadow Pricing Services
pursuant to which State Street provides a daily shadow net asset value calculation for the Fund. Under the agreement, the Fund pays State Street an annual fee of $20,000 paid monthly.
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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act permits the Fund to compensate and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class, Daily Class, Investor Class, Investor II Class, Liquidity Class and Marsico shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
30
BofA Cash Reserves, February 28, 2014 (Unaudited)
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | 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 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
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 | %** | |||||||
Marsico Shares | 0.25 | % | 0.25 | % |
* The Distributor has contractually agreed to waive Distribution Plan fees and/or Shareholder Servicing Plan fees through December 31, 2014 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such payments and/or reimbursements 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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for
shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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 | % | |||||||
Marsico Shares | 0.10 | % | 0.10 | % | |||||||
Trust Class Shares | 0.10 | % | 0.10 | % |
Fee Waivers and Expense Reimbursements
The Advisor 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, 2014, 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), 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 such date. In addition, the Advisor, at its discretion, has voluntarily agreed to bear an additional portion of the Fund's expenses. This voluntary expense limitation may be modified or discontinued by the Advisor at any time.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/2014 | |||||||||||||||
$ | 7,018,579 | $ | 8,236,952 | $ | 11,280,667 | $ | 26,536,198 | $ | — |
31
BofA Cash Reserves, February 28, 2014 (Unaudited)
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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 Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is
also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 7. Shareholder Concentration
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
The Fund's risks include, but are not limited to the following:
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 may be 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 may be 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.
32
BofA Cash Reserves, February 28, 2014 (Unaudited)
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
Legal Proceedings
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
33
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
34
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA Cash Reserves, the Board noted that the Fund's Contractual Management Fee Rate, Actual Management Fee Rate and total expense ratio were each above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
35
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In particular, in considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by
BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
36
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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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 Cash Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-CSHR-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 6 | ||||||
Statement of Operations | 8 | ||||||
Statement of Changes in Net Assets | 9 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 21 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 27 | ||||||
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 (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
9/1/13 – 2/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.55 | 0.25 | 0.25 | 0.05 | (a) | |||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.50 | 0.30 | 0.30 | 0.06 |
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 365.
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.
(a) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares,fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
1
Investment Portfolio – BofA Government Plus Reserves
February 28, 2014 (Unaudited)
Government & Agency Obligations – 55.9% | |||||||||||
Par ($) | Value ($) | ||||||||||
U.S. Government Agencies – 55.9% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.090% 06/19/14 (a) | 9,000,000 | 8,997,525 | |||||||||
0.114% 04/20/15 (03/20/14) (b)(c) | 3,765,000 | 3,764,803 | |||||||||
0.125% 08/12/14 (03/12/14) (b)(c) | 6,645,000 | 6,644,252 | |||||||||
0.134% 07/14/14 (03/14/14) (b)(c) | 7,180,000 | 7,179,461 | |||||||||
0.135% 11/26/14 (03/26/14) (b)(c) | 250,000 | 249,963 | |||||||||
0.140% 11/17/14 (a) | 3,000,000 | 2,996,955 | |||||||||
0.144% 09/01/15 (03/01/14) (b)(c) | 3,960,000 | 3,960,627 | |||||||||
0.150% 08/26/14 (03/03/14) (b)(c) | 2,495,000 | 2,494,939 | |||||||||
0.154% 09/14/15 (03/14/14) (b)(c) | 37,000 | 37,006 | |||||||||
0.154% 11/19/15 (03/19/14) (b)(c) | 1,795,000 | 1,795,119 | |||||||||
0.154% 03/20/15 (03/20/14) (b)(c) | 320,000 | 320,105 | |||||||||
0.155% 03/26/15 (03/26/14) (b)(c) | 2,535,000 | 2,535,159 | |||||||||
0.157% 10/08/15 (03/08/14) (b)(c) | 4,364,000 | 4,364,196 | |||||||||
0.159% 08/03/15 (03/03/14) (b)(c) | 440,000 | 440,129 | |||||||||
0.159% 10/01/15 (03/01/14) (b)(c) | 1,330,000 | 1,330,220 | |||||||||
0.165% 02/27/15 (03/27/14) (b)(c) | 510,000 | 510,129 | |||||||||
0.170% 12/24/14 | 2,350,000 | 2,350,550 | |||||||||
0.176% 04/23/15 (03/23/14) (b)(c) | 1,488,000 | 1,488,570 | |||||||||
0.176% 06/22/15 (03/22/14) (b)(c) | 785,000 | 785,413 | |||||||||
0.179% 03/20/15 (03/20/14) (b)(c) | 645,000 | 645,383 | |||||||||
0.180% 04/30/14 | 80,000 | 80,008 | |||||||||
0.181% 09/22/15 (03/22/14) (b)(c) | 1,111,000 | 1,111,727 | |||||||||
0.184% 07/20/15 (03/20/14) (b)(c) | 2,420,000 | 2,421,790 | |||||||||
0.184% 02/13/15 (03/13/14) (b)(c) | 160,000 | 160,093 | |||||||||
0.185% 09/29/14 (03/29/14) (b)(c) | 1,070,000 | 1,070,341 | |||||||||
0.185% 06/26/15 (03/26/14) (b)(c) | 2,655,000 | 2,656,994 |
Par ($) | Value ($) | ||||||||||
0.185% 09/18/15 (03/18/14) (b)(c) | 2,100,000 | 2,101,930 | |||||||||
0.185% 10/26/15 (03/26/14) (b)(c) | 650,000 | 650,279 | |||||||||
0.190% 10/16/14 | 265,000 | 265,081 | |||||||||
0.195% 08/17/15 (03/17/14) (b)(c) | 3,386,000 | 3,388,741 | |||||||||
0.200% 01/13/16 (03/03/14) (b)(c) | 7,705,000 | 7,704,272 | |||||||||
0.210% 03/04/15 (03/03/14) (b)(c) | 780,000 | 780,597 | |||||||||
0.210% 05/05/15 (03/03/14) (b)(c) | 240,000 | 240,172 | |||||||||
0.210% 10/22/15 (03/03/14) (b)(c) | 980,000 | 980,245 | |||||||||
0.210% 01/04/16 (03/03/14) (b)(c) | 125,000 | 124,988 | |||||||||
0.220% 03/04/15 (03/03/14) (b)(c) | 2,784,000 | 2,783,715 | |||||||||
0.230% 04/01/15 (03/03/14) (b)(c) | 415,000 | 415,000 | |||||||||
0.250% 06/11/14 (03/03/14) (b)(c) | 105,000 | 105,028 | |||||||||
0.250% 10/20/14 (03/03/14) (b)(c) | 2,412,000 | 2,412,000 | |||||||||
0.280% 10/14/14 (03/03/14) (b)(c) | 510,000 | 510,394 | |||||||||
0.350% 05/01/15 (03/03/14) (b)(c) | 1,585,000 | 1,587,534 | |||||||||
2.125% 03/05/14 | 542,000 | 542,117 | |||||||||
2.625% 04/17/14 | 2,325,000 | 2,332,500 | |||||||||
3.000% 09/22/14 | 1,670,000 | 1,696,882 | |||||||||
Federal Home Loan Bank | |||||||||||
0.060% 03/18/14 | 7,210,000 | 7,209,931 | |||||||||
0.060% 04/02/14 | 4,000,000 | 3,999,909 | |||||||||
0.070% 03/18/14 | 1,990,000 | 1,990,000 | |||||||||
0.070% 03/26/14 | 3,000,000 | 2,999,968 | |||||||||
0.070% 04/02/14 | 11,620,000 | 11,619,541 | |||||||||
0.080% 03/10/14 | 3,000,000 | 2,999,985 | |||||||||
0.090% 03/14/14 (a) | 6,000,000 | 5,999,805 | |||||||||
0.100% 03/28/14 (a) | 15,000,000 | 14,998,875 | |||||||||
0.100% 04/02/14 (a) | 10,000,000 | 9,999,111 | |||||||||
0.100% 04/28/14 | 370,000 | 369,994 | |||||||||
0.100% 05/29/14 | 8,000,000 | 7,999,296 | |||||||||
0.100% 06/11/14 | 13,000,000 | 12,998,483 | |||||||||
0.100% 08/21/14 | 1,700,000 | 1,699,873 | |||||||||
0.105% 03/19/14 (a) | 15,545,000 | 15,544,184 | |||||||||
0.110% 03/03/14 | 6,980,000 | 6,979,989 | |||||||||
0.110% 03/21/14 (a) | 11,000,000 | 10,999,328 | |||||||||
0.110% 03/28/14 | 7,000,000 | 7,000,049 |
See Accompanying Notes to Financial Statements.
2
BofA Government Plus Reserves
February 28, 2014 (Unaudited)
Government & Agency Obligations (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.110% 07/15/14 | 5,000,000 | 4,999,887 | |||||||||
0.120% 03/28/14 | 160,000 | 160,002 | |||||||||
0.120% 05/21/14 | 1,745,000 | 1,744,996 | |||||||||
0.120% 05/27/14 | 3,000,000 | 2,999,922 | |||||||||
0.120% 08/12/14 | 2,000,000 | 1,999,667 | |||||||||
0.120% 08/13/14 | 1,505,000 | 1,504,995 | |||||||||
0.120% 08/14/14 | 6,165,000 | 6,164,839 | |||||||||
0.120% 08/25/14 | 4,430,000 | 4,429,158 | |||||||||
0.120% 10/27/14 | 6,990,000 | 6,989,334 | |||||||||
0.125% 03/20/14 | 4,745,000 | 4,745,004 | |||||||||
0.125% 03/21/14 | 9,510,000 | 9,509,905 | |||||||||
0.125% 03/24/14 | 3,380,000 | 3,379,983 | |||||||||
0.125% 03/27/14 | 290,000 | 290,004 | |||||||||
0.125% 05/20/14 | 715,000 | 714,975 | |||||||||
0.125% 09/03/14 | 2,000,000 | 1,999,621 | |||||||||
0.125% 10/02/14 | 3,660,000 | 3,659,867 | |||||||||
0.125% 11/18/14 | 1,085,000 | 1,084,870 | |||||||||
0.130% 03/21/14 (a) | 3,015,000 | 3,014,782 | |||||||||
0.130% 04/04/14 (a) | 4,020,000 | 4,019,506 | |||||||||
0.130% 04/16/14 | 2,105,000 | 2,104,984 | |||||||||
0.130% 04/22/14 | 1,460,000 | 1,460,041 | |||||||||
0.130% 06/11/14 | 2,615,000 | 2,614,915 | |||||||||
0.130% 10/30/14 | 8,180,000 | 8,179,372 | |||||||||
0.130% 11/03/14 | 2,335,000 | 2,334,815 | |||||||||
0.135% 03/26/14 (a) | 1,505,000 | 1,504,859 | |||||||||
0.135% 06/06/14 (a) | 8,155,000 | 8,152,034 | |||||||||
0.138% 06/18/14 (a) | 6,000,000 | 5,997,493 | |||||||||
0.140% 10/16/14 | 280,000 | 280,007 | |||||||||
0.140% 10/17/14 | 10,060,000 | 10,060,281 | |||||||||
0.140% 11/21/14 | 2,350,000 | 2,350,059 | |||||||||
0.145% 04/04/14 (a) | 3,910,000 | 3,909,465 | |||||||||
0.150% 04/09/14 (a) | 3,970,000 | 3,969,355 | |||||||||
0.150% 04/11/14 (a) | 1,700,000 | 1,699,710 | |||||||||
0.160% 04/11/14 | 18,000,000 | 18,000,899 | |||||||||
0.170% 03/21/14 | 7,930,000 | 7,930,172 | |||||||||
0.170% 04/03/14 | 3,645,000 | 3,645,160 | |||||||||
0.170% 04/17/14 | 12,875,000 | 12,875,710 | |||||||||
0.170% 04/25/14 | 835,000 | 835,062 | |||||||||
0.170% 07/28/14 | 9,000,000 | 9,000,693 | |||||||||
0.170% 08/22/14 | 1,650,000 | 1,650,292 | |||||||||
0.180% 03/07/14 | 850,000 | 850,007 | |||||||||
0.180% 03/11/14 | 1,820,000 | 1,820,023 | |||||||||
0.190% 07/25/14 | 735,000 | 735,114 | |||||||||
0.200% 08/19/15 (03/03/14) (b)(c) | 150,000 | 149,955 | |||||||||
0.210% 06/11/14 (03/03/14) (b)(c) | 115,000 | 115,042 | |||||||||
0.230% 10/08/14 | 465,000 | 465,264 | |||||||||
0.290% 04/24/14 (03/03/14) (b)(c) | 100,000 | 100,024 | |||||||||
0.375% 06/12/14 | 5,000,000 | 5,003,296 |
Par ($) | Value ($) | ||||||||||
0.875% 12/12/14 | 310,000 | 311,761 | |||||||||
1.125% 05/30/14 | 2,285,000 | 2,290,687 | |||||||||
1.300% 04/29/14 | 3,000,000 | 3,005,679 | |||||||||
1.375% 05/28/14 | 4,095,000 | 4,107,303 | |||||||||
1.375% 09/12/14 | 795,000 | 800,341 | |||||||||
2.375% 03/14/14 | 6,990,000 | 6,995,653 | |||||||||
2.500% 06/13/14 | 2,335,000 | 2,350,723 | |||||||||
2.650% 04/23/14 | 55,000 | 55,196 | |||||||||
2.700% 11/18/14 | 45,000 | 45,818 | |||||||||
2.750% 03/25/14 | 400,000 | 400,704 | |||||||||
2.750% 12/12/14 | 1,840,000 | 1,877,538 | |||||||||
3.250% 09/12/14 | 975,000 | 991,278 | |||||||||
4.750% 11/14/14 | 105,000 | 108,403 | |||||||||
4.875% 06/13/14 | 105,000 | 106,420 | |||||||||
5.068% 04/17/14 | 95,000 | 95,630 | |||||||||
5.250% 06/18/14 | 3,645,000 | 3,701,025 | |||||||||
5.375% 06/13/14 | 1,470,000 | 1,491,992 | |||||||||
5.500% 08/13/14 | 2,470,000 | 2,529,869 | |||||||||
Federal Home Loan Mortgage Corp. | |||||||||||
0.130% 04/07/14 (a) | 2,385,000 | 2,384,681 | |||||||||
0.135% 10/16/15 (03/16/14) (b)(c) | 13,875,000 | 13,874,972 | |||||||||
0.157% 12/05/14 (03/05/14) (b)(c) | 1,000,000 | 1,000,123 | |||||||||
0.250% 08/14/14 | 5,000,000 | 5,002,708 | |||||||||
0.300% 03/21/14 | 3,550,000 | 3,550,372 | |||||||||
0.320% 12/03/14 | 3,615,000 | 3,620,028 | |||||||||
0.375% 04/28/14 | 5,262,000 | 5,264,170 | |||||||||
0.375% 08/28/14 | 9,749,000 | 9,760,746 | |||||||||
0.500% 09/19/14 | 1,400,000 | 1,402,946 | |||||||||
0.750% 11/25/14 | 525,000 | 527,320 | |||||||||
1.000% 07/30/14 | 4,465,000 | 4,481,309 | |||||||||
1.000% 08/20/14 | 5,513,000 | 5,535,161 | |||||||||
1.350% 04/29/14 | 3,290,000 | 3,296,592 | |||||||||
2.500% 04/23/14 | 10,762,000 | 10,799,339 | |||||||||
3.000% 07/28/14 | 5,015,000 | 5,074,240 | |||||||||
4.500% 04/02/14 | 6,373,000 | 6,397,676 | |||||||||
5.000% 07/15/14 | 6,475,000 | 6,593,258 | |||||||||
5.000% 11/13/14 | 390,000 | 403,322 | |||||||||
Federal National Mortgage Association | |||||||||||
0.125% 02/27/15 (03/27/14) (b)(c) | 12,000,000 | 11,998,807 | |||||||||
0.127% 04/02/14 (a) | 24,167,000 | 24,164,315 | |||||||||
0.134% 06/20/14 (03/20/14) (b)(c) | 3,170,000 | 3,169,805 | |||||||||
0.164% 01/20/15 (03/20/14) (b)(c) | 1,902,000 | 1,902,340 | |||||||||
0.360% 06/23/14 (03/03/14) (b)(c) | 2,430,000 | 2,431,640 |
See Accompanying Notes to Financial Statements.
3
BofA Government Plus Reserves
February 28, 2014 (Unaudited)
Government & Agency Obligations (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.460% 11/21/14 (03/03/14) (b)(c) | 395,000 | 395,957 | |||||||||
0.625% 10/30/14 | 2,457,000 | 2,464,941 | |||||||||
0.750% 12/19/14 | 1,145,000 | 1,150,557 | |||||||||
0.875% 08/28/14 | 5,152,000 | 5,170,839 | |||||||||
1.000% 05/16/14 | 1,000,000 | 1,001,848 | |||||||||
1.125% 06/27/14 | 8,619,000 | 8,647,149 | |||||||||
1.350% 03/21/14 | 2,000,000 | 2,001,378 | |||||||||
2.500% 05/15/14 | 4,049,000 | 4,069,241 | |||||||||
2.625% 11/20/14 | 3,184,000 | 3,241,247 | |||||||||
2.750% 03/13/14 | 6,853,000 | 6,859,031 | |||||||||
3.000% 09/16/14 | 1,776,000 | 1,803,829 | |||||||||
4.125% 04/15/14 | 16,995,000 | 17,080,935 | |||||||||
U.S. Government Agencies Total | 613,415,515 | ||||||||||
Total Government & Agency Obligations (cost of $613,415,515) | 613,415,515 | ||||||||||
Repurchase Agreements – 44.0% | |||||||||||
Repurchase agreement with | |||||||||||
ABN AMRO Bank US, dated 02/25/14, due 03/04/14 at 0.050%, collateralized by U.S. Government Agency obligations and U.S. Treasury obligations with various maturities to 04/01/43, market value $81,600,681 (repurchase proceeds $80,000,778) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Bank of Nova Scotia, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by U.S. Treasury obligations with various maturities to 11/15/20, market value $75,722,705 (repurchase proceeds $74,237,928) | 74,237,000 | 74,237,000 | |||||||||
Repurchase agreement with | |||||||||||
Credit Suisse First Boston, dated 02/12/14, due 05/13/14 at 0.100%, collateralized by a U.S. Government Agency obligation maturing 01/01/42, market value $10,200,030 (repurchase proceeds $10,002,500) | 10,000,000 | 10,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Credit Suisse First Boston, dated 02/26/14, due 05/27/14 at 0.100%, collateralized by a U.S. Government Agency obligation maturing 01/01/42, market value $8,672,978 (repurchase proceeds $8,502,125) | 8,500,000 | 8,500,000 | |||||||||
Repurchase agreement with | |||||||||||
Credit Suisse First Boston, dated 12/03/13, due 03/03/14 at 0.120%, collateralized by a U.S. Government Agency obligation maturing 01/01/42, market value $10,200,030 (repurchase proceeds $10,003,000) | 10,000,000 | 10,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Goldman Sachs, dated 02/28/14, due 03/03/14 at 0.060%, collateralized by U.S. Government Agency obligations with various maturities to 09/01/42, market value $76,500,383 (repurchase proceeds $75,000,375) | 75,000,000 | 75,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities, dated 02/27/14, due 03/06/14 at 0.050%, collateralized by U.S. Government Agency obligations with various maturities to 07/01/43, market value $51,000,283 (repurchase proceeds $50,000,486) | 50,000,000 | 50,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.060%, collateralized by U.S. Government Agency obligations with various maturities to 11/01/43, market value $81,600,408 (repurchase proceeds $80,000,400) | 80,000,000 | 80,000,000 |
See Accompanying Notes to Financial Statements.
4
BofA Government Plus Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.100%, collateralized by U.S. Government Agency obligations with various maturities to 05/01/42, market value $45,900,383 (repurchase proceeds $45,000,375) | 45,000,000 | 45,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by a U.S. Treasury obligation maturing 02/28/21, market value $51,000,705 (repurchase proceeds $50,000,625) | 50,000,000 | 50,000,000 | |||||||||
Total Repurchase Agreements (cost of $482,737,000) | 482,737,000 | ||||||||||
Total Investments — 99.9% (cost of $1,096,152,515) (d) | 1,096,152,515 | ||||||||||
Other Assets & Liabilities, Net — 0.1% | 717,847 | ||||||||||
Net Assets — 100.0% | 1,096,870,362 |
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 February 28, 2014.
(c) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(d) Cost for federal income tax purposes is $1,096,152,515.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 613,415,515 | $ | — | $ | 613,415,515 | |||||||||||
Total Repurchase Agreements | — | 482,737,000 | — | 482,737,000 | |||||||||||||||
Total Investments | $ | — | $ | 1,096,152,515 | $ | — | $ | 1,096,152,515 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Government & Agency Obligations | 55.9 | ||||||
Repurchase Agreements | 44.0 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities – BofA Government Plus Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 613,415,515 | |||||||||
Repurchase agreements, at amortized cost approximating value | 482,737,000 | ||||||||||
Total investments, at value | 1,096,152,515 | ||||||||||
Cash | 108 | ||||||||||
Receivable for: | |||||||||||
Interest | 1,157,982 | ||||||||||
Expense reimbursement due from investment advisor | 33,510 | ||||||||||
Trustees' deferred compensation plan | 35,426 | ||||||||||
Prepaid expenses | 16,780 | ||||||||||
Other assets | 13,756 | ||||||||||
Total Assets | 1,097,410,077 | ||||||||||
Liabilities | Payable for: | ||||||||||
Fund shares repurchased | 364,106 | ||||||||||
Distributions | 8,091 | ||||||||||
Investment advisory fee | 18,525 | ||||||||||
Administration fee | 4,492 | ||||||||||
Pricing and bookkeeping fees | 15,985 | ||||||||||
Transfer agent fee | 3,760 | ||||||||||
Trustees' fees | 7,158 | ||||||||||
Audit fee | 21,006 | ||||||||||
Legal fee | 37,694 | ||||||||||
Custody fee | 8,373 | ||||||||||
Reports to shareholders | 13,551 | ||||||||||
Chief compliance officer expenses | 1,406 | ||||||||||
Trustees' deferred compensation plan | 35,426 | ||||||||||
Other liabilities | 142 | ||||||||||
Total Liabilities | 539,715 | ||||||||||
Net Assets | 1,096,870,362 | ||||||||||
Net Assets Consist of | Paid-in capital | 1,096,874,195 | |||||||||
Overdistributed net investment income | (7,485 | ) | |||||||||
Accumulated net realized gain | 3,652 | ||||||||||
Net Assets | 1,096,870,362 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities (continued) – BofA Government Plus Reserves
February 28, 2014 (Unaudited)
Adviser Class Shares | Net assets | $ | 4,114,035 | ||||||||
Shares outstanding | 4,113,961 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 1,009,856,960 | ||||||||
Shares outstanding | 1,009,840,264 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 460,310 | ||||||||
Shares outstanding | 460,301 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 10,009 | ||||||||
Shares outstanding | 10,009 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 30,286,854 | ||||||||
Shares outstanding | 30,286,262 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 286,185 | ||||||||
Shares outstanding | 286,180 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 1,086,227 | ||||||||
Shares outstanding | 1,086,208 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 5,140,066 | ||||||||
Shares outstanding | 5,139,974 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 45,629,716 | ||||||||
Shares outstanding | 45,628,873 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
7
Statement of Operations – BofA Government Plus Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 451,302 | |||||||||
Expenses | Investment advisory fee | 820,224 | |||||||||
Administration fee | 235,849 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 597 | ||||||||||
Investor Class Shares | 133 | ||||||||||
Investor II Class Shares | 594 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 6,546 | ||||||||||
Daily Class Shares | 426 | ||||||||||
Investor Class Shares | 334 | ||||||||||
Investor II Class Shares | 1,485 | ||||||||||
Liquidity Class Shares | 6,372 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 7,858 | ||||||||||
Investor II Class Shares | 594 | ||||||||||
Trust Class Shares | 26,636 | ||||||||||
Transfer agent fee | 10,731 | ||||||||||
Pricing and bookkeeping fees | 78,380 | ||||||||||
Trustees' fees | 15,763 | ||||||||||
Custody fee | 20,113 | ||||||||||
Chief compliance officer expenses | 4,336 | ||||||||||
Other expenses | 194,320 | ||||||||||
Total Expenses | 1,431,291 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (1,110,100 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (6,551 | ) | |||||||||
Daily Class Shares | (1,024 | ) | |||||||||
Institutional Class Shares | (7,807 | ) | |||||||||
Investor Class Shares | (468 | ) | |||||||||
Investor II Class Shares | (2,673 | ) | |||||||||
Liquidity Class Shares | (6,367 | ) | |||||||||
Trust Class Shares | (26,607 | ) | |||||||||
Net Expenses | 269,694 | ||||||||||
Net Investment Income | 181,608 | ||||||||||
Net Increase Resulting from Operations | 181,608 |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets – BofA Government Plus Reserves
Increase (Decrease) in Net Assets | |||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | ||||||||||||||
Operations | Net investment income | 181,608 | 114,910 | ||||||||||||
Net realized gain on investments | — | 8,019 | |||||||||||||
Net increase resulting from operations | 181,608 | 122,929 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (1,040 | ) | (1,307 | ) | |||||||||||
Capital Class Shares | (160,738 | ) | (96,268 | ) | |||||||||||
Daily Class Shares | (68 | ) | (245 | ) | |||||||||||
Institutional Capital Shares | (41 | ) | (995 | ) | |||||||||||
Institutional Class Shares | (7,833 | ) | (2,881 | ) | |||||||||||
Investor Class Shares | (53 | ) | (79 | ) | |||||||||||
Investor II Class Shares | (236 | ) | (138 | ) | |||||||||||
Liquidity Class Shares | (1,013 | ) | (1,029 | ) | |||||||||||
Trust Class Shares | (10,586 | ) | (11,968 | ) | |||||||||||
Total distributions to shareholders | (181,608 | ) | (114,910 | ) | |||||||||||
Net Capital Stock Transactions | 494,772,358 | 102,264,366 | |||||||||||||
Total increase in net assets | 494,772,358 | 102,272,385 | |||||||||||||
Net Assets | Beginning of period | 602,098,004 | 499,825,619 | ||||||||||||
End of period | 1,096,870,362 | 602,098,004 | |||||||||||||
Overdistributed net investment income at end of period | (7,485 | ) | (7,485 | ) |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA Government Plus Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 9,350,000 | 9,350,000 | 25,805,000 | 25,805,000 | |||||||||||||||
Distributions reinvested | 1,022 | 1,022 | 1,289 | 1,289 | |||||||||||||||
Redemptions | (11,948,724 | ) | (11,948,724 | ) | (25,200,681 | ) | (25,200,681 | ) | |||||||||||
Net increase (decrease) | (2,597,702 | ) | (2,597,702 | ) | 605,608 | 605,608 | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 2,577,830,538 | 2,577,830,538 | 2,684,794,990 | 2,684,794,991 | |||||||||||||||
Distributions reinvested | 121,417 | 121,417 | 55,817 | 55,817 | |||||||||||||||
Redemptions | (2,071,847,086 | ) | (2,071,847,086 | ) | (2,520,040,114 | ) | (2,520,040,114 | ) | |||||||||||
Net increase | 506,104,869 | 506,104,869 | 164,810,693 | 164,810,694 | |||||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 2,873,092 | 2,873,092 | 5,597,480 | 5,597,480 | |||||||||||||||
Distributions reinvested | 16 | 16 | 20 | 20 | |||||||||||||||
Redemptions | (2,613,460 | ) | (2,613,460 | ) | (17,424,877 | ) | (17,424,877 | ) | |||||||||||
Net increase (decrease) | 259,648 | 259,648 | (11,827,377 | ) | (11,827,377 | ) | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 295,099 | 295,099 | 12,151,016 | 12,151,016 | |||||||||||||||
Distributions reinvested | 2 | 2 | 3 | 3 | |||||||||||||||
Redemptions | (340,095 | ) | (340,095 | ) | (70,717,274 | ) | (70,717,274 | ) | |||||||||||
Net decrease | (44,994 | ) | (44,994 | ) | (58,566,255 | ) | (58,566,255 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 88,150,000 | 88,150,000 | 111,549,817 | 111,549,817 | |||||||||||||||
Distributions reinvested | 7,833 | 7,833 | 2,879 | 2,879 | |||||||||||||||
Redemptions | (80,500,000 | ) | (80,500,000 | ) | (105,052,001 | ) | (105,052,001 | ) | |||||||||||
Net increase | 7,657,833 | 7,657,833 | 6,500,695 | 6,500,695 | |||||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 501,205 | 501,205 | 1,984,659 | 1,984,659 | |||||||||||||||
Distributions reinvested | 23 | 23 | 20 | 20 | |||||||||||||||
Redemptions | (438,741 | ) | (438,741 | ) | (1,894,495 | ) | (1,894,495 | ) | |||||||||||
Net increase | 62,487 | 62,487 | 90,184 | 90,184 |
See Accompanying Notes to Financial Statements.
10
Statement of Changes in Net Assets (continued) – BofA Government Plus Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 3,372,336 | 3,372,336 | 1,657,310 | 1,657,310 | |||||||||||||||
Distributions reinvested | 18 | 18 | 19 | 19 | |||||||||||||||
Redemptions | (3,640,595 | ) | (3,640,595 | ) | (769,892 | ) | (769,892 | ) | |||||||||||
Net increase (decrease) | (268,241 | ) | (268,241 | ) | 887,437 | 887,437 | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | — | — | 1 | 1 | |||||||||||||||
Distributions reinvested | 1,014 | 1,014 | 1,029 | 1,029 | |||||||||||||||
Net increase | 1,014 | 1,014 | 1,030 | 1,030 | |||||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 56,283,436 | 56,283,436 | 109,729,466 | 109,729,466 | |||||||||||||||
Distributions reinvested | 280 | 280 | 365 | 365 | |||||||||||||||
Redemptions | (72,686,272 | ) | (72,686,272 | ) | (109,967,481 | ) | (109,967,481 | ) | |||||||||||
Net decrease | (16,402,556 | ) | (16,402,556 | ) | (237,650 | ) | (237,650 | ) |
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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 | 2010 (a)(b) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (c) | — | (c) | — | (c) | — | — | 0.006 | ||||||||||||||||||
Net realized gain on investments | — | — | (c) | — | — | — | — | ||||||||||||||||||||
Total from investment operations | — | (c) | — | (c) | — | (c) | — | — | 0.006 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (c) | — | (c) | — | (c) | — | — | (0.006 | ) | |||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (c) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (d)(e) | 0.02 | %(f) | 0.02 | % | 0.01 | % | 0.00 | %(g) | 0.00 | % | 0.58 | %(h) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(i) | 0.15 | %(j) | 0.16 | %(j) | 0.22 | %(j) | 0.22 | %(j) | 0.43 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.50 | %(i) | 0.45 | % | 0.42 | % | 0.34 | % | 0.31 | % | 0.10 | % | |||||||||||||||
Net investment income | 0.04 | %(i) | 0.02 | %(j) | 0.01 | %(j) | — | (j) | — | (j) | 0.68 | %(h)(j) | |||||||||||||||
Net assets, end of period (000s) | $ | 4,114 | $ | 6,712 | $ | 6,106 | $ | 6,956 | $ | 83,849 | $ | 100,232 |
(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) Not annualized.
(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) Annualized.
(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 Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | 0.008 | ||||||||||||||||
Net realized gain on investments | — | — | (d) | — | — | — | — | ||||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | 0.008 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | (0.008 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.02 | %(g) | 0.02 | % | 0.01 | % | 0.01 | %(h) | 0.03 | % | 0.80 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(i) | 0.14 | %(j) | 0.16 | %(j) | 0.17 | %(j) | 0.19 | %(j) | 0.20 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.24 | %(i) | 0.20 | % | 0.17 | % | 0.14 | % | 0.09 | % | 0.08 | % | |||||||||||||||
Net investment income | 0.04 | %(i) | 0.02 | %(j) | 0.01 | %(j) | 0.01 | %(j) | 0.03 | %(j) | 0.67 | %(j) | |||||||||||||||
Net assets, end of period (000s) | $ | 1,009,857 | $ | 503,751 | $ | 338,932 | $ | 492,086 | $ | 534,988 | $ | 1,071,570 |
(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) 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) 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) Annualized.
(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 Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Daily Class Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | |||||||||
Net realized gain on investments | — | — | (b) | — | |||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | |||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | |||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.02 | %(e) | 0.02 | % | 0.01 | %(e) | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.05 | %(f)(g) | 0.18 | %(h) | 0.16 | %(f)(h) | |||||||||
Waiver/Reimbursement | 0.84 | %(f) | 0.76 | % | 0.77 | %(f) | |||||||||
Net investment income | 0.04 | %(f) | 0.02 | %(h) | 0.02 | %(f)(h) | |||||||||
Net assets, end of period (000s) | $ | 460 | $ | 201 | $ | 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 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) Not annualized.
(f) Annualized.
(g) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
(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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Capital Shares | 2014 | 2013 | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | 0.008 | ||||||||||||||||
Net realized gain on investments | — | — | (d) | — | — | — | — | ||||||||||||||||||||
Total from investment operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | 0.008 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (d) | (0.008 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.02 | %(g) | 0.03 | % | 0.01 | % | 0.01 | %(h) | 0.03 | % | 0.80 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(i) | 0.19 | %(j)(k) | 0.16 | %(j) | 0.18 | %(j) | 0.19 | %(j) | 0.20 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.24 | %(i) | 0.15 | % | 0.17 | % | 0.13 | % | 0.09 | % | 0.08 | % | |||||||||||||||
Net investment income | 0.04 | %(i) | 0.02 | %(j) | 0.01 | %(j) | 0.02 | %(j) | 0.02 | %(j) | 0.81 | %(j) | |||||||||||||||
Net assets, end of period (000s) | $ | 10 | $ | 55 | $ | 58,622 | $ | 50,336 | $ | 78,011 | $ | 156,431 |
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(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) On May 1, 2010, Columbia Government Plus Reserves was renamed BofA 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) 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) Annualized.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
(k) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 | 2010 (a)(b) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (c) | — | (c) | — | (c) | — | (c) | — | (c) | 0.008 | ||||||||||||||||
Net realized gain on investments | — | — | (c) | — | — | — | — | ||||||||||||||||||||
Total from investment operations | — | (c) | — | (c) | — | (c) | — | (c) | — | (c) | 0.008 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (c) | — | (c) | — | (c) | — | (c) | — | (c) | (0.008 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (c) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (d)(e) | 0.02 | %(f) | 0.02 | % | 0.01 | % | 0.00 | %(g)(h) | 0.01 | % | 0.76 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(j) | 0.15 | %(k) | 0.16 | %(k) | 0.18 | %(k) | 0.21 | %(k) | 0.24 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.28 | %(j) | 0.23 | % | 0.21 | % | 0.17 | % | 0.11 | % | 0.08 | % | |||||||||||||||
Net investment income | 0.04 | %(j) | 0.02 | %(k) | — | %(h)(k) | — | %(h)(k) | 0.01 | %(k) | 0.58 | %(i)(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 30,287 | $ | 22,629 | $ | 16,128 | $ | 75,270 | $ | 53,599 | $ | 191,321 |
(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) Not annualized.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(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) Annualized.
(k) 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 Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Investor Class Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | |||||||||
Net realized gain on investments | — | — | (b) | — | |||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | |||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | |||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.02 | %(e) | 0.02 | % | 0.01 | %(e) | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.06 | %(f) | 0.13 | %(g)(h) | 0.16 | %(f)(g) | |||||||||
Waiver/Reimbursement | 0.60 | %(f) | 0.57 | % | 0.51 | %(f) | |||||||||
Net investment income | 0.04 | %(f) | 0.02 | %(g) | 0.01 | %(f)(g) | |||||||||
Net assets, end of period (000s) | $ | 286 | $ | 224 | $ | 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 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) Not annualized.
(f) Annualized.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
(h) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
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:
Investor II Class Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | |||||||||
Net realized gain on investments | — | — | (b) | — | |||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | |||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | |||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.02 | %(e) | 0.02 | % | 0.01 | %(e) | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.06 | %(f) | 0.14 | %(g) | 0.16 | %(f)(g) | |||||||||
Waiver/Reimbursement | 0.69 | %(f) | 0.66 | % | 0.62 | %(f) | |||||||||
Net investment income | 0.04 | %(f) | 0.02 | %(g) | 0.01 | %(f)(g) | |||||||||
Net assets, end of period (000s) | $ | 1,086 | $ | 1,354 | $ | 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 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) Not annualized.
(f) Annualized.
(g) The benefits derived from expense reductions had an impact of 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 | 2010 (a)(b) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (c) | — | (c) | — | (c) | — | — | (c) | 0.007 | |||||||||||||||||
Net realized gain on investments | — | — | (c) | — | — | — | — | ||||||||||||||||||||
Total from investment operations | — | (c) | — | (c) | — | (c) | — | — | (c) | 0.007 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (c) | — | (c) | — | (c) | — | — | (c) | (0.007 | ) | ||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (c) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | % | ||||||||||||||
Total return (d)(e) | 0.02 | %(f) | 0.02 | % | 0.01 | % | 0.00 | %(g) | 0.00 | % | 0.66 | %(h) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(i) | 0.15 | %(j) | 0.16 | %(j) | 0.19 | %(j) | 0.22 | %(j) | 0.34 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.49 | %(i) | 0.45 | % | 0.42 | % | 0.37 | % | 0.31 | % | 0.19 | % | |||||||||||||||
Net investment income | 0.04 | %(i) | 0.02 | %(j) | 0.01 | %(j) | — | (j) | — | %(j)(k) | 0.12 | %(h)(j) | |||||||||||||||
Net assets, end of period (000s) | $ | 5,140 | $ | 5,139 | $ | 5,138 | $ | 5,138 | $ | 5,136 | $ | 5,147 |
(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) Not annualized.
(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) Annualized.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
(k) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 | 2010 (a)(b) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (c) | — | (c) | — | (c) | — | — | (c) | 0.007 | |||||||||||||||||
Net realized gain on investments | — | — | (c) | — | — | — | — | ||||||||||||||||||||
Total from investment operations | — | (c) | — | (c) | — | (c) | — | — | (c) | 0.007 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (c) | — | (c) | — | (c) | — | — | (c) | (0.007 | ) | ||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (c) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (d)(e) | 0.02 | %(f) | 0.02 | % | 0.01 | % | 0.00 | %(g) | 0.00 | %(h) | 0.71 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(i) | 0.15 | %(j) | 0.16 | %(j) | 0.19 | %(j) | 0.21 | %(j) | 0.30 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.35 | %(i) | 0.29 | % | 0.27 | % | 0.22 | % | 0.17 | % | 0.08 | % | |||||||||||||||
Net investment income | 0.04 | %(i) | 0.02 | %(j) | 0.01 | %(j) | — | (j) | — | %(h)(j) | 0.62 | %(j) | |||||||||||||||
Net assets, end of period (000s) | $ | 45,630 | $ | 62,033 | $ | 62,270 | $ | 82,047 | $ | 108,968 | $ | 216,878 |
(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) Not annualized.
(g) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(h) Rounds to less than 0.01%.
(i) Annualized.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
20
Notes to Financial Statements – BofA Government Plus Reserves
February 28, 2014 (Unaudited)
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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule being 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.
21
BofA Government Plus Reserves, February 28, 2014 (Unaudited)
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, the Fund's investment advisor (the "Advisor"), determines are creditworthy. Repurchase agreements are collateralized by the securities purchased by the Fund under the repurchase agreements, which may include securities that the Fund is not otherwise directly permitted to purchase, such as long-term government bonds. The Advisor is responsible for determining that such underlying securities are 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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
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.
22
BofA Government Plus Reserves, February 28, 2014 (Unaudited)
The tax character of distributions paid during the year ended August 31, 2013 was as follows:
Distributions paid from | |||||||
Ordinary Income* | $ | 114,910 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
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 50 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
The Advisor, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly
investment advisory fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
As of January 1, 2013, the Advisor 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, 2014. There is no guarantee that this expense limitation will continue after such date.
Prior to January 1, 2013, the Advisor had 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 daily net assets.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration
23
BofA Government Plus Reserves, February 28, 2014 (Unaudited)
agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.02% of the Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor 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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act permits the Fund to compensate and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class, Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | 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 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
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 Shareholder Servicing Plan fees through December 31, 2014 at an annual rate of 0.10% of the Fund's Liquidity Class shares average daily net assets, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such
24
BofA Government Plus Reserves, February 28, 2014 (Unaudited)
payments and/or reimbursements 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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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
The Advisor 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, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total | Amount recovered | |||||||||
$ | 547,381 | $ | 547,381 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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.
25
BofA Government Plus Reserves, February 28, 2014 (Unaudited)
Fees Paid to Officers and Trustees
All Officers of the Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 6. Capital Contribution
On November 29, 2010 an affiliate of the Advisor made a voluntary capital contribution to the Fund of $325,079.
Note 7. Shareholder Concentration
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
The Fund's risks include, but are not limited to the following:
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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
Legal Proceedings
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
26
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
27
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.02% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA Government Plus Reserves, the Board noted that the Fund's total expense ratio was above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple
28
measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
In considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. The Board received information showing that specific classes of certain Funds generally outperformed their peers in the more recent periods, while certain other classes underperformed their peers in the more recent periods. In particular, the Board noted that the net return investment performance of certain classes of BofA Government Plus Reserves was below the median range of such Fund's Universe (meaning that the Fund's performance ranked in the fourth or fifth quintile relative to its Universe) over certain recent periods.
Where net return investment performance of a class of a particular Fund was below the median range of the Fund's Universe, the Board, in considering the re-approval of the Advisory Agreement for such Fund, generally noted other applicable factors, including, among others, stronger relative net return performance of other classes or over other periods, the relatively tight dispersion of performance data within a particular Universe, the Fund's Actual Management Fee Rate, Contractual Management Fee Rate and/or total expense ratio, the Fund's expense cap and waiver arrangements, the composition and share classes used in the comparisons and BoAA's emphasis on liquidity and capital preservation, as well as its organizational strength and capacity and its history with the Funds.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly
available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
29
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
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 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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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
Semiannual Report, February 28, 2014
© 2014 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
SAR/GOVP-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 6 | ||||||
Statement of Operations | 8 | ||||||
Statement of Changes in Net Assets | 9 | ||||||
Financial Highlights | 11 | ||||||
Notes to Financial Statements | 20 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 26 | ||||||
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 (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.40 | 0.40 | 0.40 | 0.08 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | 0.40 | 0.40 | 0.08 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | 0.40 | 0.40 | 0.08 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | 0.40 | 0.40 | 0.08 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | 0.40 | 0.40 | 0.08 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | 0.40 | 0.40 | 0.08 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | 0.40 | 0.40 | 0.08 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | �� | 0.40 | 0.40 | 0.08 | |||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.40 | 0.40 | 0.40 | 0.08 |
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 365.
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
February 28, 2014 (Unaudited)
Government & Agency Obligations – 99.9% | |||||||||||
Par ($) | Value ($) | ||||||||||
U.S. Government Agencies – 87.6% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.010% 03/03/14 (a) | 213,255,000 | 213,254,882 | |||||||||
0.020% 03/03/14 (a) | 10,000,000 | 9,999,989 | |||||||||
0.030% 03/18/14 (a) | 100,000,000 | 99,998,583 | |||||||||
0.030% 03/19/14 (a) | 75,000,000 | 74,998,875 | |||||||||
0.030% 03/20/14 (a) | 39,675,000 | 39,674,372 | |||||||||
0.030% 03/28/14 (a) | 50,000,000 | 49,998,875 | |||||||||
0.040% 03/03/14 (a) | 34,000,000 | 33,999,924 | |||||||||
0.040% 03/25/14 (a) | 25,000,000 | 24,999,333 | |||||||||
0.040% 04/03/14 (a) | 80,500,000 | 80,497,048 | |||||||||
0.040% 04/09/14 (a) | 50,000,000 | 49,997,833 | |||||||||
0.040% 04/10/14 (a) | 40,000,000 | 39,998,222 | |||||||||
0.040% 05/19/14 (a) | 10,000,000 | 9,999,122 | |||||||||
0.050% 04/30/14 (a) | 50,000,000 | 49,995,833 | |||||||||
0.060% 03/07/14 (a) | 10,000,000 | 9,999,900 | |||||||||
0.070% 04/10/14 (a) | 4,000,000 | 3,999,689 | |||||||||
0.070% 06/27/14 (a) | 75,000,000 | 74,982,792 | |||||||||
0.080% 04/28/14 (a) | 5,000,000 | 4,999,356 | |||||||||
0.080% 05/16/14 (a) | 7,980,000 | 7,978,652 | |||||||||
0.080% 06/04/14 (a) | 40,075,000 | 40,066,540 | |||||||||
0.090% 03/05/14 (a) | 32,500,000 | 32,499,675 | |||||||||
0.090% 03/17/14 (a) | 50,000,000 | 49,998,000 | |||||||||
0.090% 03/28/14 (a) | 75,000,000 | 74,994,937 | |||||||||
0.090% 04/04/14 (a) | 20,000,000 | 19,998,300 | |||||||||
0.090% 06/19/14 (a) | 22,000,000 | 21,993,950 | |||||||||
0.100% 04/11/14 (a) | 45,000,000 | 44,994,875 | |||||||||
0.100% 04/15/14 (a) | 84,000,000 | 83,989,500 | |||||||||
0.100% 04/29/14 (a) | 20,870,000 | 20,866,580 | |||||||||
0.100% 05/12/14 (a) | 50,000,000 | 49,990,000 | |||||||||
0.100% 06/27/14 (a) | 25,000,000 | 24,991,806 | |||||||||
0.105% 04/17/14 (03/17/14) (b)(c) | 100,000 | 100,003 | |||||||||
0.110% 07/14/14 (a) | 15,000,000 | 14,993,812 | |||||||||
0.110% 08/18/14 (a) | 5,000,000 | 4,997,403 | |||||||||
0.114% 04/20/15 (03/20/14) (b)(c) | 38,650,000 | 38,647,974 | |||||||||
0.120% 06/03/14 (03/03/14) (b)(c) | 2,500,000 | 2,500,260 | |||||||||
0.120% 08/06/14 (a) | 26,000,000 | 25,986,307 | |||||||||
0.120% 10/17/14 (a) | 66,655,000 | 66,603,898 | |||||||||
0.125% 10/27/14 (03/27/14) (b)(c) | 8,075,000 | 8,076,700 | |||||||||
0.125% 08/12/14 (03/12/14) (b)(c) | 73,645,000 | 73,636,715 | |||||||||
0.127% 10/09/14 (03/09/14) (b)(c) | 735,000 | 735,029 | |||||||||
0.130% 10/03/14 (a) | 10,000,000 | 9,992,200 | |||||||||
0.134% 07/14/14 (03/14/14) (b)(c) | 76,230,000 | 76,224,273 |
Par ($) | Value ($) | ||||||||||
0.135% 11/26/14 (03/26/14) (b)(c) | 745,000 | 745,156 | |||||||||
0.135% 12/24/14 (a) | 19,245,000 | 19,223,494 | |||||||||
0.136% 07/23/14 (03/23/14) (b)(c) | 175,000 | 175,029 | |||||||||
0.140% 11/17/14 (a) | 14,000,000 | 13,985,790 | |||||||||
0.144% 09/01/15 (03/01/14) (b)(c) | 88,830,000 | 88,844,100 | |||||||||
0.150% 08/26/14 (03/03/14) (b)(c) | 25,490,000 | 25,489,373 | |||||||||
0.154% 09/14/15 (03/14/14) (b)(c) | 7,412,000 | 7,414,517 | |||||||||
0.154% 11/19/15 (03/19/14) (b)(c) | 5,575,000 | 5,575,149 | |||||||||
0.154% 03/20/15 (03/20/14) (b)(c) | 3,105,000 | 3,106,014 | |||||||||
0.155% 03/26/15 (03/26/14) (b)(c) | 5,450,000 | 5,451,770 | |||||||||
0.157% 10/08/15 (03/08/14) (b)(c) | 1,392,000 | 1,391,883 | |||||||||
0.158% 07/06/15 (03/06/14) (b)(c) | 200,000 | 200,084 | |||||||||
0.159% 08/03/15 (03/03/14) (b)(c) | 4,290,000 | 4,291,260 | |||||||||
0.159% 10/01/15 (03/01/14) (b)(c) | 2,175,000 | 2,175,372 | |||||||||
0.160% 04/23/14 | 10,600,000 | 10,600,397 | |||||||||
0.160% 06/11/14 | 2,855,000 | 2,855,357 | |||||||||
0.164% 01/19/16 (03/19/14) (b)(c) | 1,300,000 | 1,300,140 | |||||||||
0.165% 08/27/14 (03/27/14) (b)(c) | 1,411,000 | 1,411,382 | |||||||||
0.165% 02/27/15 (03/27/14) (b)(c) | 4,460,000 | 4,461,280 | |||||||||
0.166% 10/24/14 (03/24/14) (b)(c) | 370,000 | 370,125 | |||||||||
0.170% 04/27/15 (03/27/14) (b)(c) | 29,760,000 | 29,774,879 | |||||||||
0.170% 12/24/14 | 15,050,000 | 15,053,525 | |||||||||
0.176% 04/23/15 (03/23/14) (b)(c) | 22,073,000 | 22,084,412 | |||||||||
0.176% 06/22/15 (03/22/14) (b)(c) | 22,275,000 | 22,286,011 | |||||||||
0.176% 03/26/15 (03/26/14) (b)(c) | 425,000 | 424,849 | |||||||||
0.179% 03/20/15 (03/20/14) (b)(c) | 1,580,000 | 1,580,830 | |||||||||
0.180% 03/04/14 | 1,600,000 | 1,600,009 | |||||||||
0.180% 04/30/14 | 645,000 | 645,061 | |||||||||
0.181% 09/22/15 (03/22/14) (b)(c) | 7,780,000 | 7,785,131 |
See Accompanying Notes to Financial Statements.
2
BofA Government Reserves
February 28, 2014 (Unaudited)
Government & Agency Obligations (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.184% 07/20/15 (03/20/14) (b)(c) | 40,355,000 | 40,381,775 | |||||||||
0.184% 02/13/15 (03/13/14) (b)(c) | 3,385,000 | 3,386,945 | |||||||||
0.185% 09/29/14 (03/29/14) (b)(c) | 12,935,000 | 12,941,900 | |||||||||
0.185% 06/26/15 (03/26/14) (b)(c) | 24,590,000 | 24,608,171 | |||||||||
0.185% 07/27/15 (03/27/14) (b)(c) | 4,000,000 | 4,002,283 | |||||||||
0.185% 09/18/15 (03/18/14) (b)(c) | 23,500,000 | 23,522,116 | |||||||||
0.185% 10/26/15 (03/26/14) (b)(c) | 2,665,000 | 2,666,848 | |||||||||
0.188% 04/06/15 (03/06/14) (b)(c) | 5,220,000 | 5,223,758 | |||||||||
0.190% 07/15/14 | 2,520,000 | 2,520,364 | |||||||||
0.190% 10/16/14 | 1,735,000 | 1,735,533 | |||||||||
0.195% 08/17/15 (03/17/14) (b)(c) | 8,101,000 | 8,107,539 | |||||||||
0.196% 07/24/15 (03/24/14) (b)(c) | 10,000,000 | 10,008,566 | |||||||||
0.200% 05/13/14 | 3,085,000 | 3,085,527 | |||||||||
0.200% 08/28/14 | 2,005,000 | 2,005,741 | |||||||||
0.200% 10/15/14 | 1,380,000 | 1,380,422 | |||||||||
0.200% 01/13/16 (03/03/14) (b)(c) | 47,745,000 | 47,740,486 | |||||||||
0.205% 10/26/15 (03/26/14) (b)(c) | 8,190,000 | 8,198,974 | |||||||||
0.210% 04/25/14 (03/03/14) (b)(c) | 235,000 | 234,950 | |||||||||
0.210% 03/04/15 (03/03/14) (b)(c) | 8,950,000 | 8,956,889 | |||||||||
0.210% 05/05/15 (03/03/14) (b)(c) | 2,330,000 | 2,331,672 | |||||||||
0.210% 10/22/15 (03/03/14) (b)(c) | 5,900,000 | 5,901,475 | |||||||||
0.210% 01/04/16 (03/03/14) (b)(c) | 805,000 | 804,925 | |||||||||
0.220% 03/04/15 (03/03/14) (b)(c) | 32,601,000 | 32,597,664 | |||||||||
0.220% 03/24/15 (03/03/14) (b)(c) | 300,000 | 300,243 | |||||||||
0.230% 04/01/15 (03/03/14) (b)(c) | 5,200,000 | 5,200,000 | |||||||||
0.250% 04/04/14 | 1,000,000 | 1,000,113 | |||||||||
0.250% 06/11/14 (03/03/14) (b)(c) | 4,690,000 | 4,691,819 | |||||||||
0.250% 07/28/14 | 7,410,000 | 7,413,904 | |||||||||
0.250% 10/20/14 (03/03/14) (b)(c) | 23,881,000 | 23,881,000 |
Par ($) | Value ($) | ||||||||||
0.250% 01/26/15 (03/03/14) (b)(c) | 10,000,000 | 10,007,798 | |||||||||
0.260% 03/04/14 | 4,220,000 | 4,220,038 | |||||||||
0.270% 08/03/15 (03/03/14) (b)(c) | 2,405,000 | 2,409,854 | |||||||||
0.280% 10/14/14 (03/03/14) (b)(c) | 3,185,000 | 3,187,610 | |||||||||
0.290% 03/27/14 (03/03/14) (b)(c) | 5,330,000 | 5,330,681 | |||||||||
0.300% 04/23/14 | 3,040,000 | 3,040,793 | |||||||||
0.300% 07/18/14 | 1,215,000 | 1,215,905 | |||||||||
0.300% 08/21/14 | 1,000,000 | 1,000,875 | |||||||||
0.350% 05/01/15 (03/03/14) (b)(c) | 16,075,000 | 16,100,704 | |||||||||
0.375% 03/03/14 | 1,000,000 | 1,000,014 | |||||||||
1.625% 11/19/14 | 9,972,000 | 10,077,666 | |||||||||
1.900% 06/02/14 | 3,690,000 | 3,706,558 | |||||||||
2.125% 03/05/14 | 6,660,000 | 6,661,442 | |||||||||
2.625% 04/17/14 | 36,979,000 | 37,100,842 | |||||||||
3.000% 09/22/14 | 1,630,000 | 1,656,350 | |||||||||
3.800% 04/08/14 | 700,000 | 702,711 | |||||||||
4.480% 11/20/14 | 800,000 | 825,036 | |||||||||
4.900% 04/29/14 | 200,000 | 201,601 | |||||||||
4.950% 04/07/14 | 3,000,000 | 3,014,624 | |||||||||
5.200% 04/17/14 | 1,000,000 | 1,006,601 | |||||||||
Federal Home Loan Bank | |||||||||||
0.010% 03/03/14 (a) | 153,328,000 | 153,328,000 | |||||||||
0.040% 03/26/14 (a) | 99,794,000 | 99,791,228 | |||||||||
0.050% 04/23/14 (a) | 34,125,000 | 34,122,488 | |||||||||
0.050% 04/30/14 (a) | 112,810,000 | 112,800,599 | |||||||||
0.060% 03/18/14 | 73,550,000 | 73,549,294 | |||||||||
0.060% 04/02/14 | 29,000,000 | 28,999,337 | |||||||||
0.060% 05/28/14 (a) | 60,473,000 | 60,464,131 | |||||||||
0.070% 03/18/14 | 10,775,000 | 10,774,998 | |||||||||
0.070% 03/26/14 | 6,000,000 | 5,999,936 | |||||||||
0.070% 04/02/14 | 34,625,000 | 34,623,879 | |||||||||
0.080% 03/10/14 | 31,000,000 | 30,999,842 | |||||||||
0.090% 03/05/14 | 1,610,000 | 1,610,010 | |||||||||
0.090% 03/14/14 (a) | 22,985,000 | 22,984,253 | |||||||||
0.090% 08/28/14 | 20,340,000 | 20,338,321 | |||||||||
0.100% 03/03/14 (a) | 2,000,000 | 1,999,989 | |||||||||
0.100% 04/02/14 (a) | 75,000,000 | 74,993,333 | |||||||||
0.100% 04/28/14 | 47,000,000 | 46,999,147 | |||||||||
0.100% 06/11/14 | 75,000,000 | 74,991,251 | |||||||||
0.100% 08/21/14 | 85,975,000 | 85,968,575 | |||||||||
0.105% 03/19/14 (a) | 105,110,000 | 105,104,482 | |||||||||
0.110% 03/03/14 | 111,995,000 | 111,994,850 | |||||||||
0.110% 03/28/14 | 50,000,000 | 50,000,351 | |||||||||
0.120% 03/28/14 | 1,140,000 | 1,140,016 | |||||||||
0.120% 05/21/14 | 47,385,000 | 47,384,900 |
See Accompanying Notes to Financial Statements.
3
BofA Government Reserves
February 28, 2014 (Unaudited)
Government & Agency Obligations (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.120% 05/27/14 | 37,125,000 | 37,124,260 | |||||||||
0.120% 08/12/14 | 17,000,000 | 16,997,168 | |||||||||
0.120% 08/13/14 | 8,630,000 | 8,629,973 | |||||||||
0.120% 08/14/14 | 35,090,000 | 35,089,084 | |||||||||
0.120% 08/25/14 | 58,680,000 | 58,669,685 | |||||||||
0.120% 10/27/14 | 44,755,000 | 44,750,737 | |||||||||
0.125% 03/20/14 | 45,560,000 | 45,560,034 | |||||||||
0.125% 03/21/14 | 10,000,000 | 9,999,825 | |||||||||
0.125% 03/24/14 | 63,970,000 | 63,969,875 | |||||||||
0.125% 03/27/14 | 23,610,000 | 23,610,902 | |||||||||
0.125% 04/11/14 | 830,000 | 830,014 | |||||||||
0.125% 05/20/14 | 7,830,000 | 7,829,783 | |||||||||
0.125% 09/03/14 | 825,000 | 825,037 | |||||||||
0.125% 09/16/14 | 5,545,000 | 5,544,963 | |||||||||
0.125% 10/02/14 | 23,420,000 | 23,419,146 | |||||||||
0.125% 11/04/14 | 360,000 | 359,910 | |||||||||
0.130% 03/21/14 (a) | 68,670,000 | 68,665,040 | |||||||||
0.130% 04/04/14 (a) | 30,475,000 | 30,471,258 | |||||||||
0.130% 04/16/14 | 21,660,000 | 21,659,833 | |||||||||
0.130% 06/11/14 | 19,255,000 | 19,254,377 | |||||||||
0.130% 10/30/14 | 46,870,000 | 46,866,399 | |||||||||
0.130% 11/03/14 | 14,940,000 | 14,938,815 | |||||||||
0.135% 03/26/14 (a) | 11,430,000 | 11,428,928 | |||||||||
0.135% 06/06/14 (a) | 59,985,000 | 59,963,180 | |||||||||
0.138% 06/18/14 (a) | 60,000,000 | 59,974,930 | |||||||||
0.140% 06/04/14 | 4,610,000 | 4,609,976 | |||||||||
0.140% 10/16/14 | 1,785,000 | 1,785,044 | |||||||||
0.140% 10/17/14 | 64,310,000 | 64,311,799 | |||||||||
0.145% 04/04/14 (a) | 29,640,000 | 29,635,941 | |||||||||
0.150% 04/09/14 (a) | 30,090,000 | 30,085,110 | |||||||||
0.150% 04/11/14 (a) | 12,885,000 | 12,882,799 | |||||||||
0.160% 04/11/14 | 14,000,000 | 14,000,699 | |||||||||
0.170% 03/21/14 | 79,710,000 | 79,711,728 | |||||||||
0.170% 04/03/14 | 27,285,000 | 27,286,197 | |||||||||
0.170% 04/17/14 | 106,925,000 | 106,930,978 | |||||||||
0.170% 04/24/14 | 42,000,000 | 42,003,077 | |||||||||
0.170% 04/25/14 | 8,485,000 | 8,485,629 | |||||||||
0.170% 04/29/14 | 295,000 | 295,035 | |||||||||
0.170% 08/22/14 | 9,100,000 | 9,101,609 | |||||||||
0.170% 08/26/14 | 1,175,000 | 1,175,076 | |||||||||
0.180% 03/06/14 | 4,985,000 | 4,985,019 | |||||||||
0.180% 03/11/14 | 19,715,000 | 19,715,243 | |||||||||
0.180% 03/18/14 | 805,000 | 805,053 | |||||||||
0.180% 08/05/14 | 1,930,000 | 1,930,191 | |||||||||
0.190% 07/25/14 | 5,135,000 | 5,135,797 | |||||||||
0.210% 06/11/14 (03/03/14) (b)(c) | 1,300,000 | 1,300,479 | |||||||||
0.220% 06/04/14 (03/03/14) (b)(c) | 480,000 | 480,178 | |||||||||
0.230% 04/15/14 | 11,425,000 | 11,427,493 | |||||||||
0.230% 10/08/14 | 2,975,000 | 2,976,687 |
Par ($) | Value ($) | ||||||||||
0.240% 04/22/14 | 115,410,000 | 115,430,018 | |||||||||
0.350% 05/23/14 | 1,500,000 | 1,500,751 | |||||||||
0.375% 05/23/14 | 4,410,000 | 4,413,174 | |||||||||
0.875% 12/12/14 | 1,975,000 | 1,986,219 | |||||||||
1.375% 05/28/14 | 89,530,000 | 89,813,335 | |||||||||
2.375% 03/14/14 | 55,285,000 | 55,329,937 | |||||||||
2.500% 06/13/14 | 1,665,000 | 1,676,220 | |||||||||
2.650% 04/23/14 | 650,000 | 652,319 | |||||||||
2.700% 11/18/14 | 300,000 | 305,451 | |||||||||
2.750% 12/12/14 | 4,445,000 | 4,535,707 | |||||||||
2.930% 03/11/14 | 2,400,000 | 2,402,044 | |||||||||
3.250% 09/12/14 | 330,000 | 335,497 | |||||||||
4.750% 11/14/14 | 585,000 | 603,961 | |||||||||
4.875% 06/13/14 | 705,000 | 714,557 | |||||||||
5.000% 03/14/14 | 7,470,000 | 7,485,160 | |||||||||
5.068% 04/17/14 | 600,000 | 603,981 | |||||||||
5.250% 06/18/14 | 12,545,000 | 12,736,936 | |||||||||
5.375% 06/13/14 | 8,215,000 | 8,337,874 | |||||||||
5.500% 08/13/14 | 17,210,000 | 17,627,313 | |||||||||
Tennessee Valley Authority | |||||||||||
0.015% 03/05/14 (a) | 20,225,000 | 20,224,966 | |||||||||
0.019% 03/05/14 (a) | 140,800,000 | 140,799,703 | |||||||||
0.030% 03/06/14 (a) | 160,635,000 | 160,634,331 | |||||||||
0.030% 03/13/14 (a) | 100,800,000 | 100,798,992 | |||||||||
U.S. Government Agencies Total | 5,611,255,350 | ||||||||||
U.S. Government Obligations – 12.3% | |||||||||||
U.S. Treasury Bill | |||||||||||
0.005% 03/06/14 (d) | 82,377,000 | 82,376,943 | |||||||||
0.035% 03/27/14 (d) | 80,815,000 | 80,812,957 | |||||||||
0.040% 03/27/14 (d) | 283,955,000 | 283,946,797 | |||||||||
0.040% 04/17/14 (d) | 81,360,000 | 81,355,751 | |||||||||
0.040% 04/24/14 (d) | 81,360,000 | 81,355,118 | |||||||||
0.045% 04/17/14 (d) | 40,680,000 | 40,677,610 | |||||||||
U.S. Treasury Note | |||||||||||
0.250% 05/31/14 | 40,658,000 | 40,677,629 | |||||||||
1.750% 03/31/14 | 56,205,000 | 56,284,044 | |||||||||
1.875% 04/30/14 | 42,925,000 | 43,054,960 | |||||||||
U.S. Government Obligations Total | 790,541,809 | ||||||||||
Total Government & Agency Obligations (cost of $6,401,797,159) | 6,401,797,159 | ||||||||||
Total Investments – 99.9% (cost of $6,401,797,159) (e) | 6,401,797,159 | ||||||||||
Other Assets & Liabilities, Net – 0.1% | 3,384,062 | ||||||||||
Net Assets – 100.0% | 6,405,181,221 |
See Accompanying Notes to Financial Statements.
4
BofA Government Reserves
February 28, 2014 (Unaudited)
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 February 28, 2014.
(c) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(d) The rate shown represents the annualized yield at the date of purchase.
(e) Cost for federal income tax purposes is $6,401,797,159.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 6,401,797,159 | $ | — | $ | 6,401,797,159 | |||||||||||
Total Investments | $ | — | $ | 6,401,797,159 | $ | — | $ | 6,401,797,159 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
U.S. Government Agencies | 87.6 | ||||||
U.S. Government Obligations | 12.3 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities – BofA Government Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 6,401,797,159 | |||||||||
Cash | 788 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 6,490 | ||||||||||
Interest | 3,618,544 | ||||||||||
Expense reimbursement due from investment advisor | 26,089 | ||||||||||
Trustees' deferred compensation plan | 24,416 | ||||||||||
Prepaid expenses | 163,977 | ||||||||||
Total Assets | 6,405,637,463 | ||||||||||
Liabilities | Payable for: | ||||||||||
Distributions | 27,995 | ||||||||||
Investment advisory fee | 109,886 | ||||||||||
Administration fee | 181,330 | ||||||||||
Pricing and bookkeeping fees | 16,581 | ||||||||||
Transfer agent fee | 20,471 | ||||||||||
Trustees' fees | 15,767 | ||||||||||
Custody fee | 23,962 | ||||||||||
Chief compliance officer expenses | 2,829 | ||||||||||
Trustees' deferred compensation plan | 24,416 | ||||||||||
Other liabilities | 33,005 | ||||||||||
Total Liabilities | 456,242 | ||||||||||
Net Assets | 6,405,181,221 | ||||||||||
Net Assets Consist of | Paid-in capital | 6,405,572,738 | |||||||||
Overdistributed net investment income | (15,278 | ) | |||||||||
Accumulated net realized loss | (376,239 | ) | |||||||||
Net Assets | 6,405,181,221 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities (continued) – BofA Government Reserves
February 28, 2014 (Unaudited)
Adviser Class Shares | Net assets | $ | 427,512,037 | ||||||||
Shares outstanding | 427,552,298 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 2,949,884,276 | ||||||||
Shares outstanding | 2,950,124,181 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 303,763,342 | ||||||||
Shares outstanding | 303,787,297 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 646,931,443 | ||||||||
Shares outstanding | 646,982,848 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 50,571,372 | ||||||||
Shares outstanding | 50,576,291 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 2,908,069 | ||||||||
Shares outstanding | 2,908,295 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 1,405,584 | ||||||||
Shares outstanding | 1,405,697 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 88,785,173 | ||||||||
Shares outstanding | 88,795,947 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 1,933,419,925 | ||||||||
Shares outstanding | 1,933,575,365 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
7
Statement of Operations – BofA Government Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 2,812,371 | |||||||||
Expenses | Investment advisory fee | 4,879,377 | |||||||||
Administration fee | 3,182,918 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 221,663 | ||||||||||
Investor Class Shares | 1,947 | ||||||||||
Investor II Class Shares | 776 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 570,876 | ||||||||||
Daily Class Shares | 158,331 | ||||||||||
Investor Class Shares | 4,867 | ||||||||||
Investor II Class Shares | 1,941 | ||||||||||
Liquidity Class Shares | 142,064 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 10,547 | ||||||||||
Investor II Class Shares | 776 | ||||||||||
Trust Class Shares | 962,715 | ||||||||||
Transfer agent fee | 65,690 | ||||||||||
Pricing and bookkeeping fees | 80,590 | ||||||||||
Trustees' fees | 32,821 | ||||||||||
Custody fee | 45,324 | ||||||||||
Chief compliance officer expenses | 9,144 | ||||||||||
Other expenses | 298,687 | ||||||||||
Total Expenses | 10,671,054 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (6,107,927 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (570,706 | ) | |||||||||
Daily Class Shares | (379,915 | ) | |||||||||
Institutional Class Shares | (10,521 | ) | |||||||||
Investor Class Shares | (6,813 | ) | |||||||||
Investor II Class Shares | (3,492 | ) | |||||||||
Liquidity Class Shares | (142,048 | ) | |||||||||
Trust Class Shares | (962,608 | ) | |||||||||
Net Expenses | 2,487,024 | ||||||||||
Net Investment Income | 325,347 | ||||||||||
Net realized gain on investments | 40,731 | ||||||||||
Net Increase Resulting from Operations | 366,078 |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets – BofA Government Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | 325,347 | 629,797 | ||||||||||||
Net realized gain on investments | 40,731 | 12,315 | |||||||||||||
Net increase resulting from operations | 366,078 | 642,112 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (22,837 | ) | (38,098 | ) | |||||||||||
Capital Class Shares | (166,838 | ) | (375,892 | ) | |||||||||||
Daily Class Shares | (6,334 | ) | (8,911 | ) | |||||||||||
Institutional Capital Shares | (24,437 | ) | (618 | ) | |||||||||||
Institutional Class Shares | (2,637 | ) | (14,170 | ) | |||||||||||
Investor Class | (195 | ) | (498 | ) | |||||||||||
Investor II Class Shares | (78 | ) | (192 | ) | |||||||||||
Liquidity Class Shares | (5,683 | ) | (12,665 | ) | |||||||||||
Trust Class Shares | (96,280 | ) | (178,754 | ) | |||||||||||
Total distributions to shareholders | (325,319 | ) | (629,798 | ) | |||||||||||
Net Capital Stock Transactions | 288,326,876 | (425,917,609 | ) | ||||||||||||
Total increase (decrease) in net assets | 288,367,635 | (425,905,295 | ) | ||||||||||||
Net Assets | Beginning of period | 6,116,813,586 | 6,542,718,881 | ||||||||||||
End of period | 6,405,181,221 | 6,116,813,586 | |||||||||||||
Overdistributed net investment income at end of period | (15,278 | ) | (15,306 | ) |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA Government Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 1,511,275,316 | 1,511,275,316 | 2,490,803,185 | 2,490,803,185 | |||||||||||||||
Distributions reinvested | 2,079 | 2,079 | 3,497 | 3,497 | |||||||||||||||
Redemptions | (1,501,334,971 | ) | (1,501,334,971 | ) | (2,394,280,869 | ) | (2,394,280,869 | ) | |||||||||||
Net increase | 9,942,424 | 9,942,424 | 96,525,813 | 96,525,813 | |||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 5,783,499,345 | 5,783,499,345 | 12,322,900,962 | 12,322,900,962 | |||||||||||||||
Distributions reinvested | 99,154 | 99,154 | 232,724 | 232,724 | |||||||||||||||
Redemptions | (6,479,617,540 | ) | (6,479,617,540 | ) | (12,461,611,325 | ) | (12,461,611,325 | ) | |||||||||||
Net decrease | (696,019,041 | ) | (696,019,041 | ) | (138,477,639 | ) | (138,477,639 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 307,653,951 | 307,653,951 | 433,161,072 | 433,161,072 | |||||||||||||||
Distributions reinvested | 1 | 1 | 1 | 1 | |||||||||||||||
Redemptions | (66,596,981 | ) | (66,596,981 | ) | (445,613,674 | ) | (445,613,674 | ) | |||||||||||
Net increase (decrease) | 241,056,971 | 241,056,971 | (12,452,601 | ) | (12,452,601 | ) | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 1,049,892,104 | 1,049,892,104 | 7,677,365 | 7,677,365 | |||||||||||||||
Distributions reinvested | 23,673 | 23,673 | — | — | |||||||||||||||
Redemptions | (403,001,444 | ) | (403,001,444 | ) | (83,095,814 | ) | (83,095,814 | ) | |||||||||||
Net increase (decrease) | 646,914,333 | 646,914,333 | (75,418,449 | ) | (75,418,449 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 145,629,107 | 145,629,107 | 582,426,158 | 582,426,158 | |||||||||||||||
Distributions reinvested | 2,542 | 2,542 | 12,849 | 12,849 | |||||||||||||||
Redemptions | (141,040,528 | ) | (141,040,528 | ) | (750,035,736 | ) | (750,035,736 | ) | |||||||||||
Net increase (decrease) | 4,591,121 | 4,591,121 | (167,596,729 | ) | (167,596,729 | ) | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 7,807,298 | 7,807,298 | 31,954,490 | 31,954,490 | |||||||||||||||
Distributions reinvested | 11 | 11 | — | — | |||||||||||||||
Redemptions | (9,109,245 | ) | (9,109,245 | ) | (32,301,624 | ) | (32,301,624 | ) | |||||||||||
Net decrease | (1,301,936 | ) | (1,301,936 | ) | (347,134 | ) | (347,134 | ) | |||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 802,069 | 802,069 | 3,681,405 | 3,681,405 | |||||||||||||||
Distributions reinvested | 51 | 51 | 111 | 111 | |||||||||||||||
Redemptions | (802,771 | ) | (802,771 | ) | (4,004,554 | ) | (4,004,554 | ) | |||||||||||
Net decrease | (651 | ) | (651 | ) | (323,038 | ) | (323,038 | ) | |||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 337,590,000 | 337,590,000 | 790,052,449 | 790,052,449 | |||||||||||||||
Distributions reinvested | 5,663 | 5,663 | 12,656 | 12,656 | |||||||||||||||
Redemptions | (388,400,616 | ) | (388,400,616 | ) | (793,145,931 | ) | (793,145,931 | ) | |||||||||||
Net decrease | (50,804,953 | ) | (50,804,953 | ) | (3,080,826 | ) | (3,080,826 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 2,040,157,450 | 2,040,157,450 | 4,514,627,532 | 4,514,627,532 | |||||||||||||||
Distributions reinvested | 164 | 164 | 523 | 523 | |||||||||||||||
Redemptions | (1,906,209,006 | ) | (1,906,209,006 | ) | (4,639,375,061 | ) | (4,639,375,061 | ) | |||||||||||
Net increase (decrease) | 133,948,608 | 133,948,608 | (124,747,006 | ) | (124,747,006 | ) |
See Accompanying Notes to Financial Statements.
10
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0051 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0051 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0051 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.51 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(j) | 0.11 | %(k) | 0.11 | %(k) | 0.16 | %(k) | 0.16 | %(k) | 0.42 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.44 | %(j) | 0.41 | % | 0.41 | % | 0.35 | % | 0.35 | % | 0.08 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(i)(k) | — | %(i)(k) | — | (k) | 0.57 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 427,512 | $ | 417,569 | $ | 321,056 | $ | 393,326 | $ | 696,992 | $ | 1,047,967 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | 0.0071 | ||||||||||||||||
Net realized gain on investments | — | (e) | — | (e) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | 0.0071 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | (0.0071 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.00 | %(i)(j) | 0.01 | % | 0.00 | %(j) | 0.00 | %(j) | 0.00 | %(j) | 0.71 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(k) | 0.11 | %(l) | 0.11 | %(l) | 0.15 | %(l) | 0.16 | %(l) | 0.20 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.19 | %(k) | 0.16 | % | 0.16 | % | 0.11 | % | 0.10 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.01 | %(k) | 0.01 | %(l) | — | %(j)(l) | — | %(j)(l) | — | %(j)(l) | 0.68 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 2,949,884 | $ | 3,645,814 | $ | 3,784,266 | $ | 3,502,524 | $ | 5,188,621 | $ | 11,711,498 |
(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 at net asset value assuming all distributions reinvested.
(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) Not annualized.
(j) Rounds to less than 0.01%.
(k) Annualized.
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Daily Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0036 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0036 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0036 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.36 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(j) | 0.11 | %(k) | 0.11 | %(k) | 0.16 | %(k) | 0.16 | %(k) | 0.56 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.79 | %(j) | 0.75 | % | 0.76 | % | 0.70 | % | 0.70 | % | 0.29 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(i)(k) | — | %(i)(k) | — | (k) | 0.36 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 303,763 | $ | 62,724 | $ | 75,176 | $ | 106,178 | $ | 469,892 | $ | 1,022,642 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Capital Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | 0.0071 | ||||||||||||||||
Net realized gain on investments | — | (e) | — | (e) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | 0.0071 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | (0.0071 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.00 | %(i)(j) | 0.01 | % | 0.00 | %(j) | 0.00 | %(j) | 0.00 | %(j) | 0.71 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(k) | 0.14 | %(l)(m) | 0.11 | %(l) | 0.16 | %(l) | 0.16 | %(l) | 0.20 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.19 | %(k) | 0.13 | % | 0.15 | % | 0.10 | % | 0.10 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.01 | %(k) | 0.01 | %(l) | 0.01 | %(l) | — | %(j)(l) | — | %(j)(l) | 0.75 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 646,931 | $ | 69 | $ | 75,480 | $ | 36,981 | $ | 97,318 | $ | 129,606 |
(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 at net asset value assuming all distributions reinvested.
(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) Not annualized.
(j) Rounds to less than 0.01%.
(k) Annualized.
(l) The benefits derived from expense reductions had an impact of less than 0.01%.
(m) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
See Accompanying Notes to Financial Statements.
14
Financial Highlights – BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0067 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0067 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0067 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.67 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(j) | 0.11 | %(k) | 0.11 | %(k) | 0.16 | %(k) | 0.16 | %(k) | 0.24 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.23 | %(j) | 0.19 | % | 0.20 | % | 0.14 | % | 0.14 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(i)(k) | — | %(i)(k) | — | (k) | 0.66 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 50,571 | $ | 45,979 | $ | 213,568 | $ | 527,276 | $ | 1,096,358 | $ | 2,667,449 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0046 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0046 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0046 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.46 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(j) | 0.11 | %(k) | 0.11 | %(k) | 0.16 | %(k) | 0.16 | %(k) | 0.46 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.54 | %(j) | 0.51 | % | 0.51 | % | 0.45 | % | 0.45 | % | 0.14 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(i)(k) | — | %(i)(k) | — | (k) | 0.42 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 2,908 | $ | 4,210 | $ | 4,557 | $ | 7,866 | $ | 17,681 | $ | 117,298 |
(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 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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) 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 data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor II Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | (e) | — | (e) | — | 0.0043 | |||||||||||||||||
Net realized gain on investments | — | (e) | — | (e) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | — | (e) | — | 0.0043 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | (0.0043 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.00 | %(i)(j) | 0.01 | % | 0.00 | %(j) | 0.00 | %(j) | 0.00 | %(j) | 0.43 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(k) | 0.11 | %(l) | 0.11 | %(l) | 0.15 | %(l) | 0.16 | %(l) | 0.51 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.64 | %(k) | 0.61 | % | 0.61 | % | 0.56 | % | 0.55 | % | 0.19 | % | |||||||||||||||
Net investment income | 0.01 | %(k) | 0.01 | %(l) | — | %(j)(l) | — | %(j)(l) | — | (l) | 0.41 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 1,406 | $ | 1,406 | $ | 1,729 | $ | 1,432 | $ | 1,943 | $ | 13,777 |
(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 at net asset value assuming all distributions reinvested.
(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) Not annualized.
(j) Rounds to less than 0.01%.
(k) Annualized.
(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 Government Reserves
Selected date for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0057 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0057 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0057 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.57 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(j) | 0.11 | %(k) | 0.11 | %(k) | 0.15 | %(k) | 0.16 | %(k) | 0.34 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.44 | %(j) | 0.41 | % | 0.41 | % | 0.36 | % | 0.35 | % | 0.16 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(i)(k) | — | %(i)(k) | — | %(i)(k) | 0.61 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 88,785 | $ | 139,587 | $ | 142,671 | $ | 156,846 | $ | 275,844 | $ | 864,213 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(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 Government Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0061 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0061 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0061 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.00 | %(i) | 0.00 | %(i) | 0.00 | %(i) | 0.61 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.08 | %(j) | 0.11 | %(k) | 0.11 | %(k) | 0.15 | %(k) | 0.16 | %(k) | 0.29 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.29 | %(j) | 0.26 | % | 0.26 | % | 0.21 | % | 0.20 | % | 0.06 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(i)(k) | — | %(i)(k) | — | (k) | 0.56 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 1,933,420 | $ | 1,799,454 | $ | 1,924,215 | $ | 1,809,236 | $ | 1,575,967 | $ | 2,678,358 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Notes to Financial Statements – BofA Government Reserves
February 28, 2014 (Unaudited)
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, 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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule being 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 upon the specific identification method for both financial statement and federal income tax purposes.
20
BofA Government Reserves, February 28, 2014 (Unaudited)
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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
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 year ended August 31, 2013 was as follows:
Distributions paid from | |||||||
Ordinary Income* | $ | 629,798 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
21
BofA Government Reserves, February 28, 2014 (Unaudited)
As of August 31, 2013, the Fund had pre-Effective Date capital loss carry forwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carry Forwards | ||||||
2014 | $ | 416,970 |
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 50 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 (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly investment advisory fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor pursuant to which State Street provides
22
BofA Government Reserves, February 28, 2014 (Unaudited)
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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act permits the Fund to compensate and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class, Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the
Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | 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 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
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 Shareholder Servicing Plan fees through December 31, 2014 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such payments and/or reimbursements 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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor and the Distributor.
23
BofA Government Reserves, February 28, 2014 (Unaudited)
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
The Advisor 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, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/2014 | |||||||||||||||
$ | 4,126,445 | $ | 4,148,892 | $ | 5,576,141 | $ | 13,851,478 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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 Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is
24
BofA Government Reserves, February 28, 2014 (Unaudited)
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 six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 6. Shareholder Concentration
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 7. Significant Risks and Contingencies
The Fund's risks include, but are not limited to the following:
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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
Legal Proceedings
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
25
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
26
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.01% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA Government Reserves, the Board noted that the Fund's Contractual Management Fee Rate and Actual Management Fee Rate were each above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple
27
measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
In considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. The Board received information showing that specific classes of certain Funds generally outperformed their peers in the more recent periods, while certain other classes underperformed their peers in the more recent periods. In particular, the Board noted that the net return investment performance of certain classes of BofA Government Reserves was below the median range of such Fund's Universe (meaning that the Fund's performance ranked in the fourth or fifth quintile relative to its Universe) over certain recent periods.
Where net return investment performance of a class of a particular Fund was below the median range of the Fund's Universe, the Board, in considering the re-approval of the Advisory Agreement for such Fund, generally noted other applicable factors, including, among others, stronger relative net return performance of other classes or over other periods, the relatively tight dispersion of performance data within a particular Universe, the Fund's Actual Management Fee Rate, Contractual Management Fee Rate and/or total expense ratio, the Fund's expense cap and waiver arrangements, the composition and share classes used in the comparisons and BoAA's emphasis on liquidity and capital preservation, as well as its organizational strength and capacity and its history with the Funds.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board
did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
28
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
29
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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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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
Semiannual Report, February 28, 2014
© 2014 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
SAR-GOVT-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 Portfolio | 3 | ||||||
Statements of Assets and Liabilities | 9 | ||||||
Statements of Operations | 10 | ||||||
Statements of Changes in Net Assets | 11 | ||||||
Financial Highlights | 14 | ||||||
Notes to Financial Statements | 20 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 26 | ||||||
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 Connecticut Municipal Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,000.00 | 1,024.15 | 0.64 | 0.65 | 0.13 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.15 | 0.64 | 0.65 | 0.13 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.15 | 0.64 | 0.65 | 0.13 |
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 365.
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
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:
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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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 $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,000.00 | 1,024.10 | 0.69 | 0.70 | 0.14 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.10 | 0.69 | 0.70 | 0.14 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.10 | 0.69 | 0.70 | 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 365.
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.
2
Investment Portfolio – BofA Connecticut Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds – 94.3% | |||||||||||
Par ($) | Value ($) | ||||||||||
Connecticut – 69.2% | |||||||||||
CT Branford | |||||||||||
Series 2013, | |||||||||||
1.000% 08/14/14 | 540,000 | 541,960 | |||||||||
CT Development Authority | |||||||||||
Imperial Electric Assembly, | |||||||||||
Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.210% 05/01/21 (03/06/14) (a)(b) | 775,000 | 775,000 | |||||||||
RK Bradley Associates LP, | |||||||||||
Bradley Airport Hotel, Series 2006, LOC: TD Bank N.A. 0.030% 12/01/28 (03/06/14) (a)(b) | 1,900,000 | 1,900,000 | |||||||||
CT Easton | |||||||||||
Series 2011 | |||||||||||
3.000% 11/01/14 | 485,000 | 493,866 | |||||||||
CT Fairfield | |||||||||||
Series 2013 | |||||||||||
2.000% 01/01/15 | 2,000,000 | 2,030,066 | |||||||||
CT Hartford County Metropolitan District | |||||||||||
Series 2013, | |||||||||||
1.750% 03/25/14 | 1,000,000 | 1,001,023 | |||||||||
CT Health & Educational Facilities Authority | |||||||||||
CIL Community Resources, | |||||||||||
Series 2011 A, LOC: HSBC Bank USA N.A. 0.030% 07/01/41 (03/06/14) (a)(b) | 1,925,000 | 1,925,000 | |||||||||
Eastern Connecticut Health, | |||||||||||
Series 2010 E, LOC: TD Bank N.A. 0.030% 07/01/34 (03/06/14) (a)(b) | 3,600,000 | 3,600,000 | |||||||||
Hospital for Special Care, | |||||||||||
Series 2010 E, LOC: Federal Home Loan Bank of Boston 0.030% 07/01/37 (03/06/14) (a)(b) | 2,090,000 | 2,090,000 | |||||||||
Lawrence & Mem Corp. Oblig., | |||||||||||
Series 2013 H, LOC: TD Bank N.A. 0.030% 07/01/34 (03/05/14) (a)(b) | 500,000 | 500,000 |
Par ($) | Value ($) | ||||||||||
St. Francis Hospital & Medical Center, | |||||||||||
Series 2008 F, LOC: JPMorgan Chase Bank | |||||||||||
0.100% 07/01/47 (03/06/14) (a)(b) | 1,320,000 | 1,320,000 | |||||||||
The Hotchkiss School, | |||||||||||
Series 2000 A, SPA: U.S. Bank N.A. | |||||||||||
0.030% 07/01/30 (03/06/14) (a)(b) | 2,900,000 | 2,900,000 | |||||||||
The Taft School, | |||||||||||
Series 2000 E, LOC: Wells Fargo Bank N.A. | |||||||||||
0.080% 07/01/30 (03/05/14) (a)(b) | 3,200,000 | 3,200,000 | |||||||||
Wesleyan University: | |||||||||||
Series 2010 H 0.030% 07/01/40 (03/06/14) (b)(c) | 1,000,000 | 1,000,000 | |||||||||
Series 2010, LIQ FAC: Citibank N.A. 0.030% 01/01/18 (03/06/14) (a)(b)(d) | 2,300,000 | 2,300,000 | |||||||||
Westover School, | |||||||||||
Series 2007 B, | |||||||||||
LOC: TD Bank N.A. | |||||||||||
0.030% 07/01/30 (03/06/14) (a)(b) | 500,000 | 500,000 | |||||||||
Yale University, | |||||||||||
Series 2001 V-2, 0.010% 07/01/36 (03/03/14) (b)(c) | 2,995,000 | 2,995,000 | |||||||||
CT Housing Finance Authority | |||||||||||
MERLOTS, | |||||||||||
Series 2007 C90, AMT, SPA: Wells Fargo Bank N.A. 0.180% 11/15/15 (07/16/14) (a)(b)(d) | 3,260,000 | 3,260,000 | |||||||||
Series 2009 A-1, | |||||||||||
SPA: JPMorgan Chase Bank 0.030% 05/15/39 (03/03/14) (a)(b) | 840,000 | 840,000 | |||||||||
Series 2009 A-2, | |||||||||||
SPA: JPMorgan Chase Bank 0.030% 05/15/39 (03/03/14) (a)(b) | 2,205,000 | 2,205,000 | |||||||||
Series 2009 C2 | |||||||||||
SPA: JPMorgan Chase Bank N.A. 0.030% 11/15/36 (03/03/14) (a)(b) | 200,000 | 200,000 |
See Accompanying Notes to Financial Statements.
3
BofA Connecticut Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series 2011 B-1 | |||||||||||
1.300% 11/15/14 | 700,000 | 704,856 | |||||||||
Series 2011 C1, | |||||||||||
SPA: Barclays Bank PLC 0.030% 05/15/35 (03/06/14) (a)(b) | 2,600,000 | 2,600,000 | |||||||||
CT Killingly | |||||||||||
Series 2013, | |||||||||||
1.000% 04/30/14 | 2,000,000 | 2,002,258 | |||||||||
CT Manchester | |||||||||||
Series 2013, | |||||||||||
1.500% 07/03/14 | 1,000,000 | 1,004,372 | |||||||||
CT Oxford | |||||||||||
Series 2013, | |||||||||||
0.750% 07/24/14 | 1,000,000 | 1,002,139 | |||||||||
CT Shelton | |||||||||||
Series 2013 A | |||||||||||
2.000% 08/01/14 | 471,000 | 474,268 | |||||||||
CT State | |||||||||||
Series 2010 B | |||||||||||
5.000% 12/01/14 | 1,415,000 | 1,466,036 | |||||||||
Series 2012 F | |||||||||||
3.000% 09/15/14 | 500,000 | 507,303 | |||||||||
CT Vernon | |||||||||||
Series 2012 | |||||||||||
3.000% 08/01/14 | 780,000 | 788,838 | |||||||||
Connecticut Total | 46,126,985 | ||||||||||
Illinois – 1.0% | |||||||||||
IL Chicago | |||||||||||
Gas Plus, Inc., | |||||||||||
Series 2002, AMT, LOC: Northern Trust Co. 0.520% 11/01/22 (03/06/14) (a)(b) | 650,000 | 650,000 | |||||||||
Illinois Total | 650,000 | ||||||||||
New Jersey – 3.0% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 2012, AMT, | |||||||||||
LOC: BNP Paribas 0.100% 03/07/14 | 2,000,000 | 2,000,000 | |||||||||
New Jersey Total | 2,000,000 |
Par ($) | Value ($) | ||||||||||
Puerto Rico – 19.9% | |||||||||||
PR Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2007 462, | |||||||||||
GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG | |||||||||||
0.230% 08/01/47 (03/06/14) (a)(b)(d) | 4,765,000 | 4,765,000 | |||||||||
PR RBC Municipal Products, Inc. Trust | |||||||||||
Series 2013 E-46, | |||||||||||
LOC: Royal Bank of Canada 0.140% 09/01/15 (03/06/14) (a)(b)(d) | 5,200,000 | 5,200,000 | |||||||||
PR RIB Floater Trust | |||||||||||
Series 2013 8WE, | |||||||||||
LOC: Barclays Bank PLC 0.130% 09/30/14 (03/06/14) (a)(b)(d) | 3,300,000 | 3,300,000 | |||||||||
Puerto Rico Total | 13,265,000 | ||||||||||
Texas – 1.2% | |||||||||||
TX Lower Neches Valley Authority Industrial Development Corp. | |||||||||||
Exxon Capital Ventures, | |||||||||||
Series 2010, GTY AGMT: Exxon Mobil Corp. | |||||||||||
0.030% 11/01/38 (03/03/14) (a)(b) | 800,000 | 800,000 | |||||||||
Texas Total | 800,000 | ||||||||||
Total Municipal Bonds (cost of $62,841,985) | 62,841,985 | ||||||||||
Closed-End Investment Company – 5.6% | |||||||||||
Other – 5.6% | |||||||||||
Nuveen AMT-Free Municipal Income Fund | |||||||||||
Series 2013 2-1309, | |||||||||||
LIQ FAC: Citibank N.A. 0.110% 12/01/40 (03/06/14) (a)(b)(d) | 3,750,000 | 3,750,000 | |||||||||
Other Total | 3,750,000 | ||||||||||
Total Closed-End Investment Company (cost of $3,750,000) | 3,750,000 | ||||||||||
Total Investments – 99.9% (cost of $66,591,985) (e) | 66,591,985 | ||||||||||
Other Assets & Liabilities, Net – 0.1% | 82,585 | ||||||||||
Net Assets – 100.0% | 66,674,570 |
See Accompanying Notes to Financial Statements.
4
BofA Connecticut Municipal Reserves
February 28, 2014 (Unaudited)
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 February 28, 2014.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(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 February 28, 2014.
(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 February 28, 2014, these securities, which are not illiquid, amounted to $22,575,000 or 33.9% of net assets for the Fund.
(e) Cost for federal income tax purposes is $66,591,985.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 62,841,985 | $ | — | $ | 62,841,985 | |||||||||||
Total Closed-End Investment Company | — | 3,750,000 | — | 3,750,000 | |||||||||||||||
Total Investments | $ | — | $ | 66,591,985 | $ | — | $ | 66,591,985 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 94.3 | ||||||
Closed-End Investment Company | 5.6 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
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 | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
5
Investment Portfolio – BofA Massachusetts Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds – 95.2% | |||||||||||
Par ($) | Value ($) | ||||||||||
Massachusetts – 72.4% | |||||||||||
MA Barclays Capital Municipal Trust Receipts | |||||||||||
Harvard University, | |||||||||||
Series 2010, LIQ FAC: Barclays Bank PLC 0.050% 12/15/34 (03/06/14) (a)(b)(c) | 1,000,000 | 1,000,000 | |||||||||
MA Barnstable | |||||||||||
Series 2013, | |||||||||||
2.000% 11/15/14 | 793,000 | 802,656 | |||||||||
MA BB&T Municipal Trust | |||||||||||
Massachusetts State Water Resources, | |||||||||||
Series 2007 B, LIQ FAC: Branch Banking & Trust 0.040% 02/01/29 (03/06/14) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
MA Billerica | |||||||||||
Series 2013 A, | |||||||||||
2.000% 05/15/14 | 1,717,000 | 1,723,056 | |||||||||
MA Canton | |||||||||||
Series 2013, | |||||||||||
3.000% 03/15/14 | 426,959 | 427,400 | |||||||||
MA Deutsche Bank Spears/Lifers Trust | |||||||||||
Massachusetts State College Building Authority, | |||||||||||
Series 2008, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.050% 05/01/39 (03/06/14) (a)(b)(c) | 1,895,000 | 1,895,000 | |||||||||
MA Development Finance Agency | |||||||||||
Babson College, | |||||||||||
Series 2008 A, LOC: FHLB | |||||||||||
0.020% 10/01/32 (03/06/14) (a)(b) | 1,925,000 | 1,925,000 | |||||||||
Bancroft Schools & Communities, | |||||||||||
Series 2001, LOC: TD Bank N.A. 0.040% 09/01/31 (03/06/14) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
Beth Israel Deaconess Medical, | |||||||||||
Series 2011 B, LOC: M&T Bank 0.050% 06/01/41 (03/06/14) (a)(b) | 6,455,000 | 6,455,000 |
Par ($) | Value ($) | ||||||||||
Partners Healthcare System, | |||||||||||
Series 2011 K-1, SPA: Wells Fargo Bank N.A. 0.020% 07/01/46 (03/06/14) (a)(b) | 3,500,000 | 3,500,000 | |||||||||
Tabor Academy, | |||||||||||
Series 2007 A, LOC: FHLB, | |||||||||||
0.040% 12/01/36 (03/05/14) (a)(b) | 5,745,000 | 5,745,000 | |||||||||
MA Easton | |||||||||||
Series 2013 | |||||||||||
1.000% 08/22/14 | 1,700,000 | 1,705,900 | |||||||||
MA Framingham | |||||||||||
Series 2012 A, | |||||||||||
3.000% 12/01/14 | 1,000,000 | 1,021,516 | |||||||||
MA Gloucester | |||||||||||
2.000% 02/01/15 | 634,000 | 644,279 | |||||||||
Series 2006, | |||||||||||
5.000% 07/15/14 | 920,000 | 935,890 | |||||||||
MA Haverhill | |||||||||||
Series 2011 A | |||||||||||
Insured: State Aid Withholding | |||||||||||
2.000% 09/01/14 | 300,000 | 302,567 | |||||||||
MA Health & Educational Facilities Authority | |||||||||||
Harvard University, | |||||||||||
Series 1999 R, 0.010% 11/01/49 (03/03/14) (b)(d) | 1,500,000 | 1,500,000 | |||||||||
The Children's Hospital Corp., | |||||||||||
Series 2010 N3 | |||||||||||
LOC: U.S. Bank N.A. 0.020% 10/01/38 (03/05/14) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
Tufts University, | |||||||||||
Series 2008 N-2, SPA: Wells Fargo Bank N.A. 0.020% 08/15/34 (03/03/14) (a)(b) | 3,600,000 | 3,600,000 | |||||||||
MA Holliston | |||||||||||
Series 2013, | |||||||||||
1.000% 05/23/14 | 1,010,000 | 1,011,532 | |||||||||
MA Housing Finance Agency | |||||||||||
ROCS RRII R 11928, | |||||||||||
Series 2011, AMT, LIQ FAC: Citibank N.A. | |||||||||||
0.130% 06/01/36 (03/06/14) (a)(b)(c) | 3,195,000 | 3,195,000 |
See Accompanying Notes to Financial Statements.
6
BofA Massachusetts Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
MA Industrial Finance Agency | |||||||||||
120 Chestnut Street LP, | |||||||||||
Series 1992, LOC: Sumitomo Bank Ltd. 0.030% 08/01/26 (03/05/14) (a)(b) | 2,610,000 | 2,610,000 | |||||||||
Governor Dummer Academy, | |||||||||||
Series 1996, LOC: TD Bank N.A. 0.040% 07/01/26 (03/06/14) (a)(b) | 2,900,000 | 2,900,000 | |||||||||
Nova Realty Trust, | |||||||||||
Series 1994, LOC: TD Bank N.A. 0.030% 12/01/24 (03/06/14) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
MA Lawrence | |||||||||||
Series 2013, | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A): | |||||||||||
1.000% 06/01/14 | 7,147,450 | 7,156,942 | |||||||||
1.000% 09/01/14 | 4,000,000 | 4,011,233 | |||||||||
Series 2014, | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) | |||||||||||
1.000% 03/01/15 (e) | 2,000,000 | 2,012,680 | |||||||||
MA Lynn | |||||||||||
Series 2009 | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) | |||||||||||
5.000% 12/01/14 | 3,560,000 | 3,687,135 | |||||||||
MA Merrimac | |||||||||||
Series 2013, | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) | |||||||||||
2.000% 09/01/14 | 461,000 | 464,820 | |||||||||
MA Natick | |||||||||||
Series 2013, | |||||||||||
2.000% 04/15/14 | 1,111,000 | 1,113,353 | |||||||||
MA RBC Municipal Products, Inc. Trust | |||||||||||
Series 2012 E-38, | |||||||||||
LOC: Royal Bank of Canada | |||||||||||
0.040% 01/01/16 (03/06/14) (a)(b)(c) | 13,000,000 | 13,000,000 | |||||||||
MA Rockland | |||||||||||
2.000% 03/01/15 | 735,000 | 747,436 |
Par ($) | Value ($) | ||||||||||
MA Taunton | |||||||||||
Series 2013, | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) | |||||||||||
2.000% 09/01/14 | 604,000 | 609,004 | |||||||||
MA University of Massachusetts Building Authority | |||||||||||
Series 2011 1, | |||||||||||
SPA: Wells Fargo Bank N.A. | |||||||||||
0.020% 11/01/34 (03/05/14) (a)(b) | 3,100,000 | 3,100,000 | |||||||||
MA Water Resources Authority | |||||||||||
Series 2002 C, | |||||||||||
LOC: Landesbank Hessen-Thüringen 0.030% 08/01/20 (03/03/14) (a)(b) | 570,000 | 570,000 | |||||||||
Series 2008 E, | |||||||||||
SPA: JPMorgan Chase Bank | |||||||||||
0.030% 08/01/37 (03/06/14) (a)(b) | 3,500,000 | 3,500,000 | |||||||||
MA Worcester | |||||||||||
Series 2004 A, | |||||||||||
Insured: NATL-RE 5.250% 08/15/14 | 1,335,000 | 1,365,343 | |||||||||
Massachusetts Total | 95,637,742 | ||||||||||
New Jersey – 3.0% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 2012, AMT, | |||||||||||
LOC: BNP Paribas | |||||||||||
0.100% 03/07/14 | 3,900,000 | 3,900,000 | |||||||||
New Jersey Total | 3,900,000 | ||||||||||
Puerto Rico – 18.2% | |||||||||||
PR Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2008 627A, | |||||||||||
GTY AGMT: Deutsche Bank AG, | |||||||||||
LIQ FAC: Deutsche Bank AG | |||||||||||
0.050% 08/01/54 (03/06/14) (a)(b)(c) | 9,700,000 | 9,700,000 | |||||||||
PR RIB Floater Trust | |||||||||||
Series 2013 8WE, | |||||||||||
LOC: Barclays Bank PLC | |||||||||||
0.130% 09/30/14 (03/06/14) (a)(b)(c) | 14,300,000 | 14,300,000 | |||||||||
Puerto Rico Total | 24,000,000 |
See Accompanying Notes to Financial Statements.
7
BofA Massachusetts Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Wyoming – 1.6% | |||||||||||
WY Uinta County | |||||||||||
Series 1993, | |||||||||||
GTY AGMT: Chevron Corp., | |||||||||||
0.030% 08/15/20 (03/03/14) (a)(b) | 2,100,000 | 2,100,000 | |||||||||
Wyoming Total | 2,100,000 | ||||||||||
Total Municipal Bonds (cost of $125,637,742) | 125,637,742 | ||||||||||
Closed-End Investment Company – 6.8% | |||||||||||
Other – 6.8% | |||||||||||
Nuveen AMT-Free Municipal Income Fund | |||||||||||
Series 2013 2-1309, | |||||||||||
LIQ FAC: Citibank N.A. 0.110% 12/01/40 (03/06/14) (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 – 102.0% (cost of $134,637,742) (f) | 134,637,742 | ||||||||||
Other Assets & Liabilities, Net – (2.0)% | (2,592,428 | ) | |||||||||
Net Assets – 100.0% | 132,045,314 |
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 February 28, 2014.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(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 February 28, 2014, these securities, which are not illiquid, amounted to $52,090,000 or 39.4% 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 February 28, 2014.
(e) Security purchased on a delayed delivery basis.
(f) Cost for federal income tax purposes is $134,637,742.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 125,637,742 | $ | — | $ | 125,637,742 | |||||||||||
Total Closed-End Investment Company | — | 9,000,000 | — | 9,000,000 | |||||||||||||||
Total Investments | $ | — | $ | 134,637,742 | $ | — | $ | 134,637,742 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 95.2 | ||||||
Closed-End Investment Company | 6.8 | ||||||
102.0 | |||||||
Other Assets & Liabilities, Net | (2.0 | ) | |||||
100.0 |
Acronym | Name | ||||||
AID | U.S. Agency for International Development | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FHLB | Federal Home Loan Bank | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
NATL-RE | National Public Finance Guarantee Corp. Reinsured | ||||||
ROCS | Reset Option Certificates | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
8
Statements of Assets and Liabilities – BofA Money Market Funds
February 28, 2014 (Unaudited)
($) | ($) | ||||||||||
BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | ||||||||||
Assets | |||||||||||
Investments, at amortized cost approximating value | 66,591,985 | 134,637,742 | |||||||||
Cash | 45,549 | 40,315 | |||||||||
Receivable for: | |||||||||||
Fund shares sold | — | 750 | |||||||||
Interest | 101,466 | 194,754 | |||||||||
Expense reimbursement due from investment advisor | 18,443 | 18,366 | |||||||||
Trustees' deferred compensation plan | 5,359 | 6,394 | |||||||||
Prepaid expenses | 1,985 | 4,422 | |||||||||
Other assets | 1,899 | — | |||||||||
Total Assets | 66,766,686 | 134,902,743 | |||||||||
Liabilities | |||||||||||
Payable for: | |||||||||||
Investments purchased | — | 747,436 | |||||||||
Investments purchased on a delayed delivery basis | — | 2,012,680 | |||||||||
Distributions | — | 4 | |||||||||
Investment advisory fee | 3,975 | 7,493 | |||||||||
Pricing and bookkeeping fees | 5,204 | 6,094 | |||||||||
Transfer agent fee | 2,085 | 2,212 | |||||||||
Trustees' fees | 6,298 | 6,449 | |||||||||
Audit fee | 21,006 | 21,005 | |||||||||
Legal fee | 37,694 | 37,693 | |||||||||
Custody fee | 1,443 | 1,541 | |||||||||
Chief compliance officer expenses | 1,176 | 1,207 | |||||||||
Trustees' deferred compensation plan | 5,359 | 6,394 | |||||||||
Other liabilities | 7,876 | 7,221 | |||||||||
Total Liabilities | 92,116 | 2,857,429 | |||||||||
Net Assets | 66,674,570 | 132,045,314 | |||||||||
Net Assets Consist of | |||||||||||
Paid-in capital | 66,646,563 | 132,013,401 | |||||||||
Undistributed net investment income | 16,532 | 28,235 | |||||||||
Accumulated net realized gain | 11,475 | 3,678 | |||||||||
Net Assets | 66,674,570 | 132,045,314 | |||||||||
Capital Class Shares | |||||||||||
Net assets | $ | 65,548,631 | $ | 129,035,196 | |||||||
Shares outstanding | 65,519,412 | 128,999,856 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 | |||||||
Investor Class Shares | |||||||||||
Net assets | $ | 988,457 | $ | 1,223,243 | |||||||
Shares outstanding | 987,969 | 1,222,907 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 | |||||||
Trust Class Shares | |||||||||||
Net assets | $ | 137,482 | $ | 1,786,875 | |||||||
Shares outstanding | 137,422 | 1,786,307 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 |
See Accompanying Notes to Financial Statements.
9
Statements of Operations – BofA Money Market Funds
For the Six Months Ended February 28, 2014 (Unaudited)
($) | ($) | ||||||||||
BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | ||||||||||
Investment Income | |||||||||||
Interest | 45,173 | 101,428 | |||||||||
Expenses | |||||||||||
Investment advisory fee | 51,167 | 105,991 | |||||||||
Administration fee | 9,994 | 41,062 | |||||||||
Distribution fee: | |||||||||||
Investor Class Shares | 752 | 575 | |||||||||
Service fee: | |||||||||||
Investor Class Shares | 1,880 | 1,437 | |||||||||
Shareholder administration fee: | |||||||||||
Trust Class Shares | 155 | 2,094 | |||||||||
Transfer agent fee | 1,413 | 2,070 | |||||||||
Pricing and bookkeeping fees | 26,014 | 31,881 | |||||||||
Trustees' fees | 13,112 | 13,316 | |||||||||
Custody fee | 2,823 | 3,748 | |||||||||
Audit fee | 21,115 | 21,113 | |||||||||
Legal fees | 63,917 | 63,918 | |||||||||
Chief compliance officer expenses | 3,643 | 3,699 | |||||||||
Other expenses | 19,215 | 20,336 | |||||||||
Total Expenses | 215,200 | 311,240 | |||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (167,239 | ) | (205,711 | ) | |||||||
Fees waived by distributor: | |||||||||||
Investor Class Shares | (2,634 | ) | (2,010 | ) | |||||||
Trust Class Shares | (154 | ) | (2,091 | ) | |||||||
Net Expenses | 45,173 | 101,428 | |||||||||
Net Investment Income | — | — | |||||||||
Net realized gain (loss) on investments | 11,475 | (80 | ) | ||||||||
Net Increase (Decrease) Resulting from Operations | 11,475 | (80 | ) |
See Accompanying Notes to Financial Statements.
10
Statements of Changes in Net Assets – BofA Money Market Funds
Increase (Decrease) in Net Assets | BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | |||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | ||||||||||||||||
Operations | |||||||||||||||||||
Net investment income | — | 16,803 | — | 30,579 | |||||||||||||||
Reimbursement by Investment Advisor | — | — | — | 10,160 | |||||||||||||||
Net realized gain (loss) on investments | 11,475 | — | (80 | ) | (6,402 | ) | |||||||||||||
Net increase (decrease) resulting from operations | 11,475 | 16,803 | (80 | ) | 34,337 | ||||||||||||||
Distributions to Shareholders | |||||||||||||||||||
From net investment income: | |||||||||||||||||||
Capital Class Shares | — | (35,916 | ) | — | (65,768 | ) | |||||||||||||
Investor Class Shares | — | (536 | ) | — | (226 | ) | |||||||||||||
Trust Class Shares | — | (35 | ) | — | (2,546 | ) | |||||||||||||
Total distributions to shareholders | — | (36,487 | ) | — | (68,540 | ) | |||||||||||||
Net Capital Stock Transactions | (4,830,039 | ) | (32,219,065 | ) | (19,246,567 | ) | (36,183,880 | ) | |||||||||||
Total decrease in net assets | (4,818,564 | ) | (32,238,749 | ) | (19,246,647 | ) | (36,218,083 | ) | |||||||||||
Net Assets | |||||||||||||||||||
Beginning of period | 71,493,134 | 103,731,883 | 151,291,961 | 187,510,044 | |||||||||||||||
End of period | 66,674,570 | 71,493,134 | 132,045,314 | 151,291,961 | |||||||||||||||
Undistributed net investment income at end of period | 16,532 | 16,532 | 28,235 | 28,235 |
See Accompanying Notes to Financial Statements.
11
Statements of Changes in Net Assets (continued) – BofA Connecticut
Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 58,787,653 | 58,787,653 | 187,322,012 | 187,322,012 | |||||||||||||||
Distributions reinvested | — | — | 215 | 215 | |||||||||||||||
Redemptions | (62,283,441 | ) | (62,283,441 | ) | (212,676,550 | ) | (212,676,550 | ) | |||||||||||
Net decrease | (3,495,788 | ) | (3,495,788 | ) | (25,354,323 | ) | (25,354,323 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 3,508,899 | 3,508,899 | 16,974,392 | 16,974,392 | |||||||||||||||
Distributions reinvested | — | — | 4 | 4 | |||||||||||||||
Redemptions | (4,835,228 | ) | (4,835,228 | ) | (23,884,482 | ) | (23,884,482 | ) | |||||||||||
Net decrease | (1,326,329 | ) | (1,326,329 | ) | (6,910,086 | ) | (6,910,086 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 2,084,690 | 2,084,690 | 1,436,931 | 1,436,931 | |||||||||||||||
Distributions reinvested | — | — | 5 | 5 | |||||||||||||||
Redemptions | (2,092,612 | ) | (2,092,612 | ) | (1,391,592 | ) | (1,391,592 | ) | |||||||||||
Net increase (decrease) | (7,922 | ) | (7,922 | ) | 45,344 | 45,344 |
See Accompanying Notes to Financial Statements.
12
Statements of Changes in Net Assets (continued) – BofA Massachusetts
Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 78,441,565 | 78,441,565 | 297,497,200 | 297,497,200 | |||||||||||||||
Distributions reinvested | — | — | 841 | 841 | |||||||||||||||
Redemptions | (94,867,027 | ) | (94,867,027 | ) | (338,826,136 | ) | (338,826,136 | ) | |||||||||||
Net decrease | (16,425,462 | ) | (16,425,462 | ) | (41,328,095 | ) | (41,328,095 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 264,756 | 264,756 | 1,654,131 | 1,654,131 | |||||||||||||||
Distributions reinvested | — | — | 6 | 6 | |||||||||||||||
Redemptions | (60,178 | ) | (60,178 | ) | (1,221,912 | ) | (1,221,912 | ) | |||||||||||
Net increase | 204,578 | 204,578 | 432,225 | 432,225 | |||||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 2,191,652 | 2,191,652 | 24,428,194 | 24,428,194 | |||||||||||||||
Distributions reinvested | — | — | 6 | 6 | |||||||||||||||
Redemptions | (5,217,335 | ) | (5,217,335 | ) | (19,716,210 | ) | (19,716,210 | ) | |||||||||||
Net increase (decrease) | (3,025,683 | ) | (3,025,683 | ) | 4,711,990 | 4,711,990 |
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA Connecticut Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | 0.001 | 0.001 | 0.001 | 0.010 | ||||||||||||||||||||
Net realized gain on investments | — | (d) | — | — | — | — | — | ||||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | 0.001 | 0.001 | 0.001 | 0.010 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.010 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.05 | % | 0.11 | % | 0.11 | % | 0.13 | % | 0.99 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.13 | %(h) | 0.18 | %(i) | 0.20 | %(i) | 0.20 | %(i) | 0.20 | %(i) | 0.24 | %(i) | |||||||||||||||
Waiver/Reimbursement | 0.49 | %(h) | 0.42 | % | 0.32 | % | 0.37 | % | 0.16 | % | 0.10 | % | |||||||||||||||
Net investment income | — | 0.02 | %(i) | 0.04 | %(i) | 0.11 | %(i) | 0.13 | %(i) | 0.95 | %(i) | ||||||||||||||||
Net assets, end of period (000s) | $ | 65,549 | $ | 69,033 | $ | 94,404 | $ | 98,206 | $ | 110,239 | $ | 275,997 |
(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) 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) Not annualized.
(h) Annualized.
(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 Connecticut Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Investor Class Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | — | (b) | — | |||||||||||
Net realized gain on investments | — | (b) | — | — | |||||||||||
Total from Investment Operations | — | (b) | — | (b) | — | ||||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | — | (b) | — | (b) | ||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.00 | %(e) | 0.03 | % | 0.06 | %(e) | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.13 | %(f) | 0.21 | %(g) | 0.25 | %(f)(g) | |||||||||
Waiver/Reimbursement | 0.84 | %(f) | 0.73 | % | 0.61 | %(f) | |||||||||
Net investment income | — | — | %(g)(h) | — | (g) | ||||||||||
Net assets, end of period (000s) | $ | 988 | $ | 2,315 | $ | 9,228 |
(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 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) Not annualized.
(f) Annualized.
(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 Connecticut Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Trust Class Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | — | (b) | — | |||||||||||
Net realized gain on investments | — | (b) | — | — | |||||||||||
Total from Investment Operations | — | (b) | — | (b) | — | ||||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | — | (b) | — | |||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.00 | %(e) | 0.03 | % | 0.00 | % | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.13 | %(f) | 0.20 | %(g) | 0.23 | %(f)(g) | |||||||||
Waiver/Reimbursement | 0.58 | %(f) | 0.54 | % | 0.37 | %(f) | |||||||||
Net investment income | — | — | %(g)(h) | — | (g) | ||||||||||
Net assets, end of period (000s) | $ | 137 | $ | 145 | $ | 100 |
(a) Trust Class shares commenced operations on July 18, 2012. Per share data and total return reflect activity from that date.
(b) Rounds to less than $0.001 per share.
(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) Not annualized.
(f) Annualized.
(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 Massachusetts Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 (a) | 2011 | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | 0.001 | 0.001 | 0.001 | 0.010 | ||||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | — | — | — | — | ||||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | 0.001 | 0.001 | 0.001 | 0.010 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.010 | ) | ||||||||||||||||
From net realized gains | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.010 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.04 | %(h) | 0.07 | % | 0.12 | % | 0.13 | % | 1.03 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.14 | %(i) | 0.18 | %(j) | 0.20 | %(j) | 0.20 | %(j) | 0.20 | %(j) | 0.24 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.29 | %(i) | 0.25 | % | 0.19 | % | 0.22 | % | 0.11 | % | 0.09 | % | |||||||||||||||
Net investment income | — | 0.02 | %(j) | 0.04 | %(j) | 0.11 | %(j) | 0.10 | %(j) | 1.01 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 129,035 | $ | 145,460 | $ | 186,824 | $ | 198,945 | $ | 240,934 | $ | 315,359 |
(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) 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) Not annualized.
(h) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(i) Annualized.
(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 Massachusetts Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Investor Class Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | — | — | ||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | ||||||||||
Total from Investment Operations | — | (b) | — | (b) | — | ||||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | — | (b) | — | (b) | ||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.00 | %(e) | 0.02 | %(f) | 0.03 | %(e) | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.14 | %(g) | 0.19 | %(h) | 0.24 | %(g)(h) | |||||||||
Waiver/Reimbursement | 0.64 | %(g) | 0.59 | % | 0.49 | %(g) | |||||||||
Net investment income | — | — | (h) | — | (h) | ||||||||||
Net assets, end of period (000s) | $ | 1,223 | $ | 1,019 | $ | 586 |
(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 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) Not annualized.
(f) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(g) Annualized.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
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:
Trust Class Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | — | — | ||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | ||||||||||
Total from Investment Operations | — | (b) | — | (b) | — | ||||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | — | (b) | — | |||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.00 | %(e) | 0.02 | %(f) | 0.00 | % | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.14 | %(g) | 0.17 | %(h)(i) | 0.23 | %(g)(h) | |||||||||
Waiver/Reimbursement | 0.39 | %(g) | 0.36 | % | 0.25 | %(g) | |||||||||
Net investment income | — | — | (h) | — | (h) | ||||||||||
Net assets, end of period (000s) | $ | 1,787 | $ | 4,813 | $ | 100 |
(a) Trust Class shares commenced operations on July 18, 2012. Per share data and total return reflect activity from that date.
(b) Rounds to less than $0.001 per share.
(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) Not annualized.
(f) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(g) Annualized.
(h) The benefits derived from expense reductions had an impact of less than 0.01%.
(i) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
See Accompanying Notes to Financial Statements.
19
Notes to Financial Statements – BofA Money Market Funds
February 28, 2014 (Unaudited)
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 together, 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, 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 generally accepted accounting principles ("GAAP") in the United States of America 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 Funds in the preparation of their 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 subject to the conditions in such rule being 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).
• 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.
20
BofA Money Market Funds, February 28, 2014 (Unaudited)
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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Funds generally intend to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Funds' maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
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.
The tax character of distributions paid during the year ended August 31, 2013 was as follows:
Tax-Exempt Income | Ordinary Income* | Long-Term Capital Gains | |||||||||||||
BofA Connecticut Municipal Reserves | $ | 33,836 | $ | 2,651 | $ | — | |||||||||
BofA Massachusetts Municipal Reserves | 60,143 | 8,397 | — |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
21
BofA Money Market Funds, February 28, 2014 (Unaudited)
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
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 50 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 (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Funds. The Advisor receives a monthly investment advisory fee, calculated based on the combined average daily net assets of the Funds and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date.
For the six months ended February 28, 2014, the effective investment advisory fee rates, net of fee waivers, were 0.15% of each Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Funds for a monthly administration fee, calculated based on the combined average daily net assets of the Funds and the other series of the Trust advised by the Advisor, 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 | % |
Additionally, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the effective administration fee rates, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of each Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor pursuant to which State Street provides accounting services to the Funds. Under the
22
BofA Money Market Funds, February 28, 2014 (Unaudited)
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 0.015% of average daily net assets of each Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Funds also 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 agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Funds.
The Funds may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, 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 and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Investor Class shares of the Funds. The Shareholder Servicing Plan permits the Funds to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits for each Fund, each as a percentage of average daily net assets, follow:
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 | % | |||||||
Shareholder Servicing Plan: | |||||||||||
Investor Class Shares – Connecticut Municipal Reserves | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares – Massachusetts Municipal Reserves | 0.25 | % | 0.25 | % |
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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Funds. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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 | % |
23
BofA Money Market Funds, February 28, 2014 (Unaudited)
Fee Waivers and Expense Reimbursements
The Advisor and/or some of the Funds' other service providers have contractually agreed to bear a portion of the Funds' expenses through December 31, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Funds certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Funds' total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: 2016 | Total potential recovery | Amount recovered during the period ended 02/28/2014 | |||||||||||||
Connecticut Municipal Reserves | $ | 224,361 | $ | 224,361 | $ | — | |||||||||
Massachusetts Municipal Reserves | 256,860 | 256,860 | — |
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 for all classes of each Fund. In addition, the Advisor 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 the Advisor at any time.
Fees Paid to Officers and Trustees
All Officers of the Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Funds, along with other affiliated funds, pay their pro-rata share of a portion 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. 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. Line of Credit
The Funds and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Funds did not borrow under this arrangement.
Note 6. Shareholder Concentration
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.
24
BofA Money Market Funds, February 28, 2014 (Unaudited)
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds.
Note 7. Significant Risks and Contingencies
The Fund's risks include, but are not limited to the following:
Securities Risk
The Funds are subject to interest rate and credit risk. The value of debt securities may decline as interest rates increase. The Funds could lose money if the issuer of a fixed income security is unable to pay interest or repay principal when it is due.
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 overall value of the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Funds' value will likely be more volatile than the value of more diversified funds. The Funds may not operate as non-diversified funds at all times.
Redemption/Liquidity Risk
The Funds may be subject to redemption risk. The Funds may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Funds may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Funds could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
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, instrumentalities and 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
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
25
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
26
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Funds' distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.00% for all classes of the Funds. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. The Board noted that BofA Connecticut Municipal Reserves' and BofA Massachusetts Municipal Reserves' total expense ratio, Actual Management Fee Rate and Contractual Management Fee Rate were each at or below the median ranges of their respective Peer Groups.
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In particular, in considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
27
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its
affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
28
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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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 Connecticut Municipal Reserves
BofA Massachusetts Municipal Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-CTMA-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 30 | ||||||
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 Money Market Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,023.75 | 1.04 | 1.05 | 0.21 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.30 | 1,024.00 | 0.79 | 0.80 | 0.16 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.30 | 1,024.00 | 0.79 | 0.80 | 0.16 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,023.80 | 0.99 | 1.00 | 0.20 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.75 | 1.04 | 1.05 | 0.21 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.75 | 1.04 | 1.05 | 0.21 |
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 365.
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
February 28, 2014 (Unaudited)
Certificates of Deposit – 29.7% | |||||||||||
Par ($) | Value ($) | ||||||||||
Bank of Montreal Chicago | |||||||||||
0.176% 04/22/14 (03/24/14) (a)(b) | 156,860,000 | 156,860,298 | |||||||||
Bank of Nova Scotia Houston | |||||||||||
0.165% 03/27/14 | 225,700,000 | 225,700,000 | |||||||||
0.170% 03/05/14 (03/03/14) (a)(b) | 65,650,000 | 65,650,000 | |||||||||
0.220% 05/19/14 | 119,000,000 | 119,000,000 | |||||||||
0.230% 05/21/14 | 55,000,000 | 55,000,000 | |||||||||
0.230% 08/25/14 | 71,000,000 | 71,000,000 | |||||||||
0.240% 07/07/14 | 50,000,000 | 50,000,000 | |||||||||
0.250% 06/26/14 | 52,000,000 | 52,000,000 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd./NY | |||||||||||
0.200% 04/07/14 | 100,000,000 | 100,000,000 | |||||||||
0.200% 04/16/14 | 160,700,000 | 160,700,000 | |||||||||
0.200% 06/10/14 | 82,700,000 | 82,700,000 | |||||||||
0.210% 04/30/14 | 125,600,000 | 125,600,000 | |||||||||
0.210% 06/11/14 | 27,000,000 | 27,000,000 | |||||||||
0.250% 03/26/14 | 39,490,000 | 39,490,896 | |||||||||
Barclays Bank PLC NY | |||||||||||
0.230% 03/18/14 | 153,000,000 | 153,000,000 | |||||||||
Chase Bank USA N.A. | |||||||||||
0.250% 04/25/14 | 170,000,000 | 170,000,000 | |||||||||
CICFP | |||||||||||
0.270% 04/01/14 | 47,000,000 | 47,000,404 | |||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA/NY | |||||||||||
0.230% 06/02/14 | 100,000,000 | 100,000,000 | |||||||||
0.240% 07/01/14 | 40,000,000 | 40,000,000 | |||||||||
Credit Industrial et Commercial NY | |||||||||||
0.210% 03/04/14 | 84,000,000 | 84,000,000 | |||||||||
0.230% 03/10/14 | 38,000,000 | 38,000,095 | |||||||||
0.230% 06/02/14 | 100,000,000 | 100,000,000 | |||||||||
0.230% 06/03/14 | 72,900,000 | 72,900,000 | |||||||||
0.245% 04/16/14 | 103,000,000 | 103,000,657 | |||||||||
Credit Suisse NY | |||||||||||
0.245% 04/22/14 | 193,000,000 | 193,000,000 | |||||||||
0.250% 04/29/14 | 35,000,000 | 35,000,000 | |||||||||
0.250% 05/29/14 | 75,000,000 | 75,000,000 | |||||||||
0.250% 06/04/14 | 30,000,000 | 30,000,000 | |||||||||
0.250% 07/15/14 | 100,000,000 | 100,000,000 | |||||||||
Deutsche Bank AG NY | |||||||||||
0.240% 04/30/14 | 50,000,000 | 50,000,000 | |||||||||
DNB NOR Bank ASA/NY | |||||||||||
0.240% 03/04/14 | 29,000,000 | 29,000,000 |
Par ($) | Value ($) | ||||||||||
JPMorgan Chase Bank NA | |||||||||||
0.250% 04/21/14 | 113,045,000 | 113,045,000 | |||||||||
0.320% 06/06/14 | 10,000,000 | 10,001,341 | |||||||||
Mizuho Corporate Bank Ltd./NY | |||||||||||
0.210% 04/21/14 | 140,000,000 | 140,000,000 | |||||||||
0.220% 03/24/14 | 115,100,000 | 115,100,000 | |||||||||
0.220% 04/21/14 | 56,000,000 | 56,000,000 | |||||||||
0.220% 04/22/14 | 29,600,000 | 29,600,000 | |||||||||
0.220% 05/07/14 | 139,950,000 | 139,950,000 | |||||||||
0.230% 03/04/14 | 53,000,000 | 53,000,018 | |||||||||
Norinchukin Bank NY | |||||||||||
0.100% 03/04/14 | 321,000,000 | 321,000,000 | |||||||||
0.100% 03/07/14 | 215,400,000 | 215,400,000 | |||||||||
NZ Australia Bank | |||||||||||
0.250% 03/17/14 | 60,000,000 | 60,000,000 | |||||||||
Rabobank Nederland NV/NY | |||||||||||
0.250% 07/01/14 | 3,012,000 | 3,012,000 | |||||||||
0.250% 07/15/14 | 191,930,000 | 191,930,000 | |||||||||
0.250% 07/21/14 | 209,140,000 | 209,140,000 | |||||||||
Skandinaviska Enskilda Banken AB/NY | |||||||||||
0.230% 04/11/14 | 139,750,000 | 139,750,000 | |||||||||
0.230% 07/08/14 | 84,000,000 | 84,000,000 | |||||||||
0.230% 07/09/14 | 26,141,000 | 26,141,000 | |||||||||
0.230% 07/15/14 | 36,860,000 | 36,860,000 | |||||||||
Sumitomo Mitsui Banking Corp./NY | |||||||||||
0.220% 03/28/14 | 30,600,000 | 30,600,000 | |||||||||
0.220% 04/02/14 | 50,655,000 | 50,655,000 | |||||||||
0.220% 04/07/14 | 91,000,000 | 91,000,000 | |||||||||
0.220% 04/21/14 | 51,000,000 | 51,000,000 | |||||||||
0.220% 04/25/14 | 22,000,000 | 22,000,000 | |||||||||
0.220% 04/28/14 | 31,000,000 | 31,000,000 | |||||||||
0.220% 05/08/14 | 97,000,000 | 97,000,000 | |||||||||
0.220% 05/23/14 | 90,000,000 | 90,000,000 | |||||||||
0.220% 06/03/14 | 22,300,000 | 22,300,000 | |||||||||
0.220% 06/18/14 | 41,000,000 | 41,000,000 | |||||||||
Wells Fargo Bank NA | |||||||||||
0.170% 03/03/14 | 46,400,000 | 46,400,000 | |||||||||
0.175% 05/02/14 (03/04/14) (a)(b) | 100,900,000 | 100,900,000 | |||||||||
Westpac Banking Corp./NY | |||||||||||
0.270% 04/15/14 (03/03/14) (a)(b) | 3,495,000 | 3,495,350 | |||||||||
Total Certificates of Deposit (cost of $5,371,882,059) | 5,371,882,059 |
See Accompanying Notes to Financial Statements.
2
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Asset-Backed Commercial Paper – 18.9% | |||||||||||
Par ($) | Value ($) | ||||||||||
Albion Capital Corp. | |||||||||||
0.200% 05/21/14 (c)(d) | 44,443,000 | 44,423,001 | |||||||||
0.210% 05/15/14 (c)(d) | 69,863,000 | 69,832,435 | |||||||||
Chariot Funding LLC | |||||||||||
0.230% 05/05/14 (c)(d) | 65,445,000 | 65,417,822 | |||||||||
0.230% 05/12/14 (c)(d) | 21,880,000 | 21,869,935 | |||||||||
0.230% 05/15/14 (c)(d) | 50,000,000 | 49,976,042 | |||||||||
0.230% 05/27/14 (c)(d) | 21,640,000 | 21,627,972 | |||||||||
0.230% 06/03/14 (c)(d) | 25,000,000 | 24,984,986 | |||||||||
0.230% 06/04/14 (c)(d) | 25,000,000 | 24,984,826 | |||||||||
0.230% 06/17/14 (c)(d) | 23,000,000 | 22,984,130 | |||||||||
0.240% 03/04/14 (c)(d) | 27,975,000 | 27,974,440 | |||||||||
0.240% 03/11/14 (c)(d) | 26,960,000 | 26,958,203 | |||||||||
0.240% 03/18/14 (c)(d) | 19,750,000 | 19,747,762 | |||||||||
0.240% 03/24/14 (c)(d) | 22,910,000 | 22,906,487 | |||||||||
0.240% 03/25/14 (c)(d) | 41,532,000 | 41,525,355 | |||||||||
0.240% 04/01/14 (c)(d) | 28,963,000 | 28,957,014 | |||||||||
0.240% 04/02/14 (c)(d) | 45,215,000 | 45,205,354 | |||||||||
Fairway Finance Corp. | |||||||||||
0.165% 03/31/14 (a)(d) | 18,875,000 | 18,875,000 | |||||||||
FCAR Owner Trust | |||||||||||
0.200% 03/03/14 (c) | 17,930,000 | 17,929,801 | |||||||||
0.210% 04/03/14 (c) | 3,560,000 | 3,559,315 | |||||||||
0.210% 04/15/14 (c) | 80,475,000 | 80,453,875 | |||||||||
0.220% 03/31/14 (c) | 13,115,000 | 13,112,596 | |||||||||
0.240% 04/01/14 (c) | 1,310,000 | 1,309,729 | |||||||||
Gemini Securitization Corp. LLC | |||||||||||
0.210% 04/08/14 (c)(d) | 25,000,000 | 24,994,458 | |||||||||
0.220% 03/26/14 (c)(d) | 89,470,000 | 89,456,331 | |||||||||
0.220% 03/27/14 (c)(d) | 88,570,000 | 88,555,927 | |||||||||
Gotham Funding Corp. | |||||||||||
0.145% 03/26/14 (c)(d) | 35,000,000 | 34,996,476 | |||||||||
Jupiter Securitization Co. LLC | |||||||||||
0.230% 05/12/14 (c)(d) | 21,880,000 | 21,869,935 | |||||||||
0.230% 05/22/14 (c)(d) | 25,000,000 | 24,986,903 | |||||||||
0.230% 05/27/14 (c)(d) | 24,225,000 | 24,211,535 | |||||||||
0.230% 06/03/14 (c)(d) | 25,000,000 | 24,984,986 | |||||||||
0.230% 06/10/14 (c)(d) | 48,535,000 | 48,503,681 | |||||||||
0.230% 06/17/14 (c)(d) | 37,685,000 | 37,658,997 | |||||||||
0.240% 03/10/14 (c)(d) | 11,945,000 | 11,944,283 | |||||||||
0.240% 03/12/14 (c)(d) | 24,345,000 | 24,343,215 | |||||||||
0.240% 03/27/14 (c)(d) | 28,000,000 | 27,995,147 | |||||||||
0.240% 04/01/14 (c)(d) | 26,830,000 | 26,824,455 | |||||||||
Kells Funding LLC | |||||||||||
0.218% 12/10/14 (03/25/14) (a)(b)(d) | 28,000,000 | 28,000,000 | |||||||||
0.228% 12/11/14 (03/25/14) (a)(b)(d) | 100,000,000 | 100,000,000 |
Par ($) | Value ($) | ||||||||||
0.239% 12/08/14 (03/25/14) (a)(b)(d) | 22,040,000 | 22,040,000 | |||||||||
0.240% 04/22/14 (c)(d) | 27,710,000 | 27,700,394 | |||||||||
0.240% 05/02/14 (c)(d) | 57,360,000 | 57,336,291 | |||||||||
0.240% 07/07/14 (c)(d) | 90,140,000 | 90,063,081 | |||||||||
0.240% 08/19/14 (c)(d) | 129,630,000 | 129,482,222 | |||||||||
0.240% 08/22/14 (c)(d) | 105,440,000 | 105,317,690 | |||||||||
0.240% 09/02/14 (c)(d) | 60,580,000 | 60,505,285 | |||||||||
Liberty Street Funding LLC | |||||||||||
0.130% 03/18/14 (c)(d) | 32,210,000 | 32,208,023 | |||||||||
0.130% 03/19/14 (c)(d) | 54,825,000 | 54,821,436 | |||||||||
0.130% 03/25/14 (c)(d) | 51,050,000 | 51,045,576 | |||||||||
Manhattan Asset Funding Co. LLC | |||||||||||
0.150% 03/19/14 (c)(d) | 8,405,000 | 8,404,370 | |||||||||
0.150% 03/26/14 (c)(d) | 14,005,000 | 14,003,541 | |||||||||
0.160% 03/24/14 (c)(d) | 14,005,000 | 14,003,568 | |||||||||
0.160% 04/01/14 (c)(d) | 10,505,000 | 10,503,553 | |||||||||
0.165% 04/01/14 (c)(d) | 23,190,000 | 23,186,705 | |||||||||
0.170% 04/10/14 (c)(d) | 10,505,000 | 10,503,016 | |||||||||
0.180% 03/18/14 (c)(d) | 68,046,000 | 68,040,216 | |||||||||
Newport Funding Corp. | |||||||||||
0.220% 03/26/14 (c)(d) | 29,685,000 | 29,680,465 | |||||||||
Old Line Funding LLC | |||||||||||
0.205% 04/29/14 (03/31/14) (a)(b)(d) | 80,000,000 | 80,000,000 | |||||||||
0.230% 04/25/14 (c)(d) | 128,260,000 | 128,214,931 | |||||||||
0.230% 05/27/14 (c)(d) | 51,770,000 | 51,741,225 | |||||||||
0.230% 08/13/14 (c)(d) | 81,565,000 | 81,479,017 | |||||||||
0.230% 08/25/14 (c)(d) | 49,850,000 | 49,793,628 | |||||||||
0.240% 03/04/14 (c)(d) | 27,335,000 | 27,334,453 | |||||||||
0.240% 03/07/14 (c)(d) | 16,172,000 | 16,171,353 | |||||||||
0.250% 04/10/14 (c)(d) | 33,170,000 | 33,160,786 | |||||||||
0.250% 04/14/14 (c)(d) | 24,835,000 | 24,827,412 | |||||||||
0.250% 04/22/14 (c)(d) | 44,950,000 | 44,933,768 | |||||||||
Regency Markets No. 1 LLC | |||||||||||
0.130% 03/07/14 (c)(d) | 230,655,000 | 230,650,002 | |||||||||
0.140% 03/17/14 (c)(d) | 26,260,000 | 26,258,366 | |||||||||
Thunder Bay Funding LLC | |||||||||||
0.230% 04/23/14 (c)(d) | 50,375,000 | 50,357,942 | |||||||||
0.230% 04/25/14 (c)(d) | 16,770,000 | 16,764,107 | |||||||||
0.230% 05/19/14 (c)(d) | 16,032,000 | 16,023,908 | |||||||||
0.230% 05/27/14 (c)(d) | 43,875,000 | 43,850,613 | |||||||||
0.230% 06/09/14 (c)(d) | 27,200,000 | 27,182,622 | |||||||||
0.230% 06/11/14 (c)(d) | 39,266,000 | 39,240,412 | |||||||||
0.240% 03/03/14 (c)(d) | 14,000,000 | 13,999,813 | |||||||||
0.250% 04/14/14 (c)(d) | 11,345,000 | 11,341,533 |
See Accompanying Notes to Financial Statements.
3
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Asset-Backed Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Victory Receivables Corp. | |||||||||||
0.145% 03/26/14 (c)(d) | 54,235,000 | 54,229,539 | |||||||||
Working Capital Management Co. | |||||||||||
0.120% 03/04/14 (c)(d) | 36,325,000 | 36,324,637 | |||||||||
0.120% 03/05/14 (c)(d) | 36,370,000 | 36,369,515 | |||||||||
0.120% 03/06/14 (c)(d) | 29,915,000 | 29,914,501 | |||||||||
0.120% 03/07/14 (c)(d) | 23,805,000 | 23,804,524 | |||||||||
0.130% 03/03/14 (c)(d) | 31,875,000 | 31,874,770 | |||||||||
0.130% 03/04/14 (c)(d) | 24,140,000 | 24,139,738 | |||||||||
0.130% 03/05/14 (c)(d) | 23,120,000 | 23,119,666 | |||||||||
Total Asset-Backed Commercial Paper (cost of $3,415,890,622) | 3,415,890,622 | ||||||||||
Commercial Paper – 17.2% | |||||||||||
ASB Finance Ltd. | |||||||||||
0.220% 03/10/14 (c)(d) | 40,000,000 | 39,997,800 | |||||||||
0.240% 04/01/14 (c)(d) | 52,455,000 | 52,444,159 | |||||||||
0.250% 04/10/14 (c)(d) | 52,455,000 | 52,440,429 | |||||||||
Bank of Nova Scotia | |||||||||||
0.225% 05/19/14 (c) | 40,000,000 | 39,980,250 | |||||||||
0.230% 07/01/14 (c) | 40,000,000 | 39,968,822 | |||||||||
Barclays Bank PLC CCP | |||||||||||
0.210% 03/03/14 (c)(d)(e) | 74,000,000 | 73,999,136 | |||||||||
0.210% 03/06/14 (c)(d)(e) | 29,000,000 | 28,999,154 | |||||||||
0.210% 03/19/14 (c)(d)(e) | 35,000,000 | 34,996,325 | |||||||||
BNZ International Funding Ltd. | |||||||||||
0.220% 06/13/14 (c)(d) | 125,690,000 | 125,610,117 | |||||||||
0.220% 07/07/14 (c)(d) | 25,000,000 | 24,980,444 | |||||||||
0.230% 06/13/14 (c)(d) | 20,000,000 | 19,986,711 | |||||||||
0.240% 04/02/14 (c)(d) | 8,735,000 | 8,733,136 | |||||||||
0.240% 04/11/14 (c)(d) | 89,000,000 | 88,975,672 | |||||||||
0.240% 06/13/14 (c)(d) | 18,180,000 | 18,167,395 | |||||||||
Collateralized Commercial Paper Co. LLC | |||||||||||
0.250% 08/22/14 (c)(e) | 25,000,000 | 24,969,792 | |||||||||
0.260% 08/18/14 (c)(e) | 26,700,000 | 26,667,218 | |||||||||
0.260% 08/25/14 (c)(e) | 25,000,000 | 24,968,042 | |||||||||
Commonwealth Bank of Australia | |||||||||||
0.159% 04/03/14 (03/03/14) (a)(b)(d) | 59,135,000 | 59,134,464 | |||||||||
0.262% 04/04/14 (d) | 1,510,000 | 1,510,196 | |||||||||
0.263% 03/28/14 (d) | 39,215,000 | 39,219,406 | |||||||||
Dexia Credit Local | |||||||||||
0.245% 07/07/14 (c)(f) | 100,000,000 | 99,912,889 | |||||||||
0.245% 07/08/14 (c)(f) | 85,000,000 | 84,925,377 | |||||||||
0.250% 06/25/14 (c)(f) | 124,886,000 | 124,785,398 | |||||||||
0.250% 06/26/14 (c)(f) | 100,000,000 | 99,918,750 | |||||||||
0.280% 08/19/14 (c)(f) | 85,160,000 | 85,046,737 |
Par ($) | Value ($) | ||||||||||
0.300% 08/20/14 (c)(f) | 104,035,000 | 103,885,882 | |||||||||
0.300% 08/21/14 (c)(f) | 111,685,000 | 111,523,987 | |||||||||
0.400% 03/05/14 (c)(f) | 30,000,000 | 29,998,667 | |||||||||
0.400% 03/05/14 (c)(f) | 85,000,000 | 84,996,223 | |||||||||
DNB NOR Bank ASA | |||||||||||
0.230% 03/24/14 (c)(d) | 44,000,000 | 43,993,534 | |||||||||
0.230% 04/01/14 (c)(d) | 35,000,000 | 34,993,068 | |||||||||
0.235% 08/26/14 (c)(d) | 48,000,000 | 47,944,227 | |||||||||
0.255% 03/13/14 (c)(d) | 46,000,000 | 45,996,090 | |||||||||
0.260% 03/03/14 (c)(d) | 43,770,000 | 43,769,367 | |||||||||
0.260% 03/10/14 (c)(d) | 68,460,000 | 68,455,550 | |||||||||
Erste Abwicklungsanstalt | |||||||||||
0.240% 04/02/14 (c)(d) | 2,835,000 | 2,834,395 | |||||||||
Nationwide Building Society | |||||||||||
0.120% 03/04/14 (c)(d) | 8,965,000 | 8,964,910 | |||||||||
0.130% 03/04/14 (c)(d) | 5,940,000 | 5,939,935 | |||||||||
NV Bank Nederlandse Gemeenten | |||||||||||
0.240% 09/05/14 (c)(d) | 30,000,000 | 29,962,400 | |||||||||
Rabobank USA Financial Corp. | |||||||||||
0.230% 05/16/14 (c) | 4,000,000 | 3,998,058 | |||||||||
0.250% 06/24/14 (c) | 10,000,000 | 9,992,014 | |||||||||
Skandinaviska Enskilda Banken AB | |||||||||||
0.235% 04/14/14 (c)(d) | 100,000,000 | 99,971,278 | |||||||||
0.240% 06/10/14 (c)(d) | 109,000,000 | 108,926,607 | |||||||||
Sumitomo Mitsui Banking Corp. | |||||||||||
0.240% 05/06/14 (c)(d) | 7,363,000 | 7,359,760 | |||||||||
Svenska Handelsbanken, Inc. | |||||||||||
0.230% 03/10/14 (c)(d) | 38,545,000 | 38,542,784 | |||||||||
Swedbank AB | |||||||||||
0.230% 07/07/14 (c) | 70,000,000 | 69,942,756 | |||||||||
0.230% 07/08/14 (c) | 158,650,000 | 158,519,246 | |||||||||
Toyota Credit Canada, Inc. | |||||||||||
0.230% 05/30/14 (c) | 47,325,000 | 47,297,788 | |||||||||
Toyota Credit Puerto Rico | |||||||||||
0.220% 06/26/14 (c) | 25,000,000 | 24,982,125 | |||||||||
0.230% 08/13/14 (c) | 8,950,000 | 8,940,565 | |||||||||
Toyota Motor Credit Corp. | |||||||||||
0.220% 07/01/14 (c) | 86,000,000 | 85,935,882 | |||||||||
0.230% 06/26/14 (c) | 37,343,000 | 37,315,086 | |||||||||
0.230% 06/27/14 (c) | 163,000,000 | 162,877,116 | |||||||||
0.240% 06/20/14 (c) | 106,000,000 | 105,921,560 | |||||||||
0.250% 03/03/14 (c) | 5,000,000 | 4,999,931 |
See Accompanying Notes to Financial Statements.
4
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Westpac Securities NZ Ltd. | |||||||||||
0.225% 05/06/14 (c)(d) | 62,920,000 | 62,894,045 | |||||||||
0.230% 03/03/14 (c)(d) | 16,264,000 | 16,263,792 | |||||||||
0.240% 04/02/14 (c)(d) | 82,530,000 | 82,512,394 | |||||||||
Total Commercial Paper (cost of $3,120,788,841) | 3,120,788,841 | ||||||||||
Time Deposits – 14.4% | |||||||||||
Barclays Bank PLC | |||||||||||
0.080% 03/03/14 | 392,720,000 | 392,720,000 | |||||||||
Citibank N.A. | |||||||||||
0.080% 03/03/14 | 402,000,000 | 402,000,000 | |||||||||
Credit Agricole SA | |||||||||||
0.100% 03/03/14 | 325,000,000 | 325,000,000 | |||||||||
Lloyds Time Deposit | |||||||||||
0.060% 03/03/14 | 750,000,000 | 750,000,000 | |||||||||
Natixis Paris Time Deposit | |||||||||||
0.090% 03/03/14 | 332,668,000 | 332,668,000 | |||||||||
US Bank Grand Cayman Time Deposit | |||||||||||
0.100% 03/03/14 | 405,600,000 | 405,600,000 | |||||||||
Total Time Deposits (cost of $2,607,988,000) | 2,607,988,000 | ||||||||||
Municipal Bonds (b)(g) – 1.9% | |||||||||||
Arizona – 0.2% | |||||||||||
AZ Pima County Industrial Development Authority | |||||||||||
Tucson Electric Power Co., Series 1982, LOC: Bank of New York 0.040% 12/01/22 (03/05/14) | 30,350,000 | 30,350,000 | |||||||||
Arizona Total | 30,350,000 | ||||||||||
California – 0.1% | |||||||||||
CA Sacramento Municipal Utility District | |||||||||||
Series 2012 L LOC: U.S. Bank N.A. 0.020% 08/15/41 (03/06/14) | 14,905,000 | 14,905,000 | |||||||||
California Total | 14,905,000 | ||||||||||
Colorado – 0.1% | |||||||||||
CO Housing & Finance Authority | |||||||||||
Multi-Family: Series 2004 A1, SPA: FHLB 0.080% 10/01/34 (03/05/14) | 7,830,000 | 7,830,000 |
Par ($) | Value ($) | ||||||||||
Series 2008 C1, SPA: FHLB 0.100% 10/01/38 (03/05/14) | 3,505,000 | 3,505,000 | |||||||||
Series 2005 B-1, SPA: FHLB 0.080% 04/01/40 (03/05/14) | 5,005,000 | 5,005,000 | |||||||||
Colorado Total | 16,340,000 | ||||||||||
Illinois – 0.0% | |||||||||||
IL University of Illinois | |||||||||||
Series 2014 C LOC: Northern Trust Company 0.100% 04/01/44 (03/06/14) | 5,300,000 | 5,300,000 | |||||||||
Illinois Total | 5,300,000 | ||||||||||
Indiana – 0.1% | |||||||||||
IN Finance Authority Health System | |||||||||||
Sisters of St. Francis Health, Series 2008 F, LOC: Bank of New York 0.030% 09/01/48 (03/06/14) | 27,935,000 | 27,934,780 | |||||||||
Indiana Total | 27,934,780 | ||||||||||
Iowa – 0.1% | |||||||||||
IA Finance Authority | |||||||||||
Series 2004 B, AMT, SPA: FHLB 0.040% 07/01/34 (03/06/14) | 4,555,000 | 4,555,000 | |||||||||
Series 2007 C, SPA: FHLB 0.110% 07/01/37 (03/06/14) | 590,000 | 590,000 | |||||||||
Series 2007 G, SPA: FHLB 0.090% 01/01/38 (03/06/14) | 700,000 | 700,000 | |||||||||
Series 2007, SPA: FHLB 0.090% 01/01/39 (03/06/14) | 3,660,000 | 3,660,000 | |||||||||
Series 2009 G, SPA: FHLB 0.110% 01/01/39 (03/06/14) | 3,700,000 | 3,700,000 | |||||||||
Iowa Total | 13,205,000 | ||||||||||
Massachusetts – 0.0% | |||||||||||
MA Simmons College | |||||||||||
Series 2008, LOC: TD Bank N.A. 0.120% 10/01/22 (03/06/14) | 4,480,000 | 4,480,000 | |||||||||
Massachusetts Total | 4,480,000 |
See Accompanying Notes to Financial Statements.
5
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (b)(g) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Michigan – 0.2% | |||||||||||
MI Kent Hospital Finance Authority | |||||||||||
Spectrum Health, Series 2008 C, LOC: Bank of New York 0.040% 01/15/26 (03/05/14) | 41,080,000 | 41,080,000 | |||||||||
Michigan Total | 41,080,000 | ||||||||||
Missouri – 0.1% | |||||||||||
MO St. Louis Industrial Development Authority | |||||||||||
St. Louis Art Museum Foundation, Series 2009 B, LOC: U.S. Bank N.A. 0.040% 12/01/40 (03/05/14) | 9,930,000 | 9,930,000 | |||||||||
Missouri Total | 9,930,000 | ||||||||||
New Hampshire – 0.0% | |||||||||||
NH Health & Education Facilities Authority | |||||||||||
Dartmouth College, Series 2007 C, SPA: JPMorgan Chase Bank 0.080% 06/01/41 (03/05/14) | 4,855,000 | 4,855,000 | |||||||||
New Hampshire Total | 4,855,000 | ||||||||||
New York – 0.1% | |||||||||||
NY New York City | |||||||||||
Series 2011 D-3, SPA: Bank of New York 0.030% 10/01/39 (03/03/14) | 19,750,000 | 19,750,000 | |||||||||
New York Total | 19,750,000 | ||||||||||
Ohio – 0.1% | |||||||||||
OH Cleveland Department of Public Utilities Division of Water | |||||||||||
Series 2008 Q LOC: Bank of Ny Mellon 0.040% 01/01/33 (03/06/14) | 16,995,000 | 16,995,000 | |||||||||
Ohio Total | 16,995,000 | ||||||||||
Pennsylvania – 0.1% | |||||||||||
PA Philadelphia Airport Revenue | |||||||||||
Series 2005 C2, AMT, LOC: Royal Bank of Canada 0.040% 06/15/25 (03/05/14) | 13,985,000 | 13,985,000 | |||||||||
Pennsylvania Total | 13,985,000 |
Par ($) | Value ($) | ||||||||||
Texas – 0.4% | |||||||||||
TX State | |||||||||||
Product Development Project, Series 2005 A, SPA: National Australia Bank 0.060% 06/01/45 (03/06/14) | 1,475,000 | 1,475,000 | |||||||||
Small Business, Series 2005 B, SPA: National Australia Bank 0.060% 06/01/45 (03/06/14) | 1,125,000 | 1,125,000 | |||||||||
Veterans Housing Assistance, Series 2004 I, SPA: JPMorgan Chase Bank 0.100% 12/01/24 (03/05/14) | 5,400,000 | 5,400,000 | |||||||||
Veterans Housing: Series 1997 B-2, LIQ FAC: State Street Bank & Trust Co. 0.100% 12/01/29 (03/05/14) | 13,000,000 | 13,000,000 | |||||||||
Series 2004, SPA: JPMorgan Chase Bank NA 0.100% 06/01/20 (03/05/14) | 2,600,000 | 2,600,000 | |||||||||
Series 2006 B, LIQ FAC: Landesbank Hessen-Thüringen 0.140% 12/01/26 (03/05/14) | 6,465,000 | 6,465,000 | |||||||||
Veterans Land: Series 2000, SPA: JPMorgan Chase Bank: 0.120% 12/01/20 (03/04/14) | 8,250,000 | 8,250,000 | |||||||||
0.120% 12/01/30 (03/04/14) | 11,400,000 | 11,400,000 | |||||||||
Series 2002 A, SPA: Landesbank Hessen-Thüringen 0.150% 12/01/32 (03/04/14) | 9,700,000 | 9,700,000 | |||||||||
Series 2003, SPA: State Street Bank & Trust Co. 0.080% 12/01/23 (03/04/14) | 2,875,000 | 2,875,000 | |||||||||
Series 2004, SPA: State Street Bank & Trust Co. 0.120% 12/01/24 (03/04/14) | 9,325,000 | 9,325,000 | |||||||||
Texas Total | 71,615,000 | ||||||||||
Utah – 0.1% | |||||||||||
UT State Board of Regents | |||||||||||
Series 2014 A LOC: Royal Bank of Canada 0.100% 02/01/49 (03/06/14) | 12,214,000 | 12,214,000 | |||||||||
Utah Total | 12,214,000 |
See Accompanying Notes to Financial Statements.
6
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (b)(g) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Wisconsin – 0.2% | |||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Wheaton Franciscan Services: Series 2003 B, LOC: U.S. Bank N.A. 0.030% 08/15/33 (03/05/14) | 11,650,000 | 11,650,000 | |||||||||
Series 2007, LOC: PNC Bank N.A. 0.030% 08/15/36 (03/05/14) | 18,980,000 | 18,980,000 | |||||||||
WI Housing & Economic Development Authority | |||||||||||
Series 2006 B, SPA: Bank of Nova Scotia 0.070% 09/01/37 (03/06/14) | 4,260,000 | 4,260,000 | |||||||||
Wisconsin Total | 34,890,000 | ||||||||||
Total Municipal Bonds (cost of $337,828,780) | 337,828,780 | ||||||||||
Government & Agency Obligations – 1.1% | |||||||||||
U.S. Government Agencies – 1.1% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.200% 01/13/16 (03/03/14) (a)(b) | 57,730,000 | 57,724,543 | |||||||||
0.230% 04/01/15 (03/03/14) (a)(b) | 10,060,000 | 10,060,000 | |||||||||
0.250% 10/20/14 (03/03/14) (a)(b) | 60,014,000 | 60,014,000 | |||||||||
Federal National Mortgage Association | |||||||||||
0.125% 02/27/15 (03/27/14) (a)(b) | 74,000,000 | 73,981,648 | |||||||||
0.164% 01/20/15 (03/20/14) (a)(b) | 725,000 | 725,035 | |||||||||
U.S. Government Agencies Total | 202,505,226 | ||||||||||
Total Government & Agency Obligations (cost of $202,505,226) | 202,505,226 | ||||||||||
Corporate Bonds – 0.6% | |||||||||||
Commonwealth Bank of Australia | |||||||||||
0.746% 06/25/14 (03/25/14) (a)(b)(d) | 5,120,000 | 5,128,838 | |||||||||
0.974% 03/17/14 (a)(d) | 3,047,000 | 3,048,032 | |||||||||
Credit Suisse New York | |||||||||||
5.500% 05/01/14 | 3,058,000 | 3,084,645 | |||||||||
National Australia Bank Ltd. | |||||||||||
0.962% 04/11/14 (a)(d) | 13,145,000 | 13,156,352 | |||||||||
1.185% 07/25/14 (04/28/14) (a)(b)(d) | 3,395,000 | 3,408,256 | |||||||||
2.250% 04/11/14 (d) | 8,210,000 | 8,228,460 |
Par ($) | Value ($) | ||||||||||
Svenska Handelsbanken AB | |||||||||||
4.875% 06/10/14 (d) | 26,548,000 | 26,885,198 | |||||||||
Toronto-Dominion Bank | |||||||||||
1.375% 07/14/14 | 4,710,000 | 4,730,200 | |||||||||
Toyota Motor Credit Corp. | |||||||||||
0.233% 06/11/14 (03/11/14) (a)(b) | 33,349,000 | 33,352,315 | |||||||||
Total Corporate Bonds (cost of $101,022,296) | 101,022,296 | ||||||||||
Repurchase Agreements – 16.2% | |||||||||||
Repurchase agreement with ABN Amro, Inc., dated 02/03/14, due 03/05/14 at 0.300%, collateralized by common stocks, market value $33,007,717 (repurchase proceeds $30,007,500) | 30,000,000 | 30,000,000 | |||||||||
Repurchase agreement with ABN Amro, Inc., dated 02/06/14, due 03/07/14 at 0.300%, collateralized by common stocks, market value $33,007,194 (repurchase proceeds $30,007,250) | 30,000,000 | 30,000,000 | |||||||||
Repurchase agreement with ABN Amro, Inc., dated 02/21/14, due 03/21/14 at 0.300%, collateralized by common stocks, market value $34,812,427 (repurchase proceeds $31,652,384) | 31,645,000 | 31,645,000 | |||||||||
Repurchase agreement with ABN Amro, Inc., dated 02/28/14, due 03/03/14 at 0.240%, collateralized by common stocks, market value $141,567,348 (repurchase proceeds $128,697,574) | 128,695,000 | 128,695,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 02/14/14, due 04/15/14 at 0.380%, collateralized by corporate bonds with various maturities to 10/15/39, market value $49,498,264 (repurchase proceeds $45,018,494) | 44,990,000 | 44,990,000 |
See Accompanying Notes to Financial Statements.
7
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with BNP Paribas, dated 02/19/14, at 0.240%, collateralized by common stocks, preferred stocks, and exchange-traded funds, market value $295,971,380 (a)(h)(i) | 269,005,000 | 269,005,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 02/21/14, due 04/22/14 at 0.380%, collateralized by corporate bonds with various maturities to 10/15/39, market value $48,736,743 (repurchase proceeds $44,328,057) | 44,300,000 | 44,300,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 02/27/14, due 03/28/14 at 0.250%, collateralized by corporate bonds with various maturities to 02/25/23, market value $63,280,008 (repurchase proceeds $60,277,137) (i) | 60,265,000 | 60,265,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 02/28/14, due 03/03/14 at 0.210%, collateralized by common stocks, preferred stocks, and exchange-traded funds, market value $283,179,327 (repurchase proceeds $257,394,504) | 257,390,000 | 257,390,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 02/28/14, due 03/03/14 at 0.270%, collateralized by corporate bonds with various maturities to 10/15/39, market value $70,787,406 (repurchase proceeds $64,351,448) | 64,350,000 | 64,350,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 02/28/14, due 03/03/14 at 0.160%, collateralized by U.S. Government Agency obligations with various maturities to 02/15/49, market value $62,123,349 (repurchase proceeds $60,905,812) | 60,905,000 | 60,905,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Credit Suisse First Boston, dated 02/28/14, due 03/03/14 at 0.210%, collateralized by common stocks, market value $103,466,938 (repurchase proceeds $96,521,689) | 96,520,000 | 96,520,000 | |||||||||
Repurchase agreement with Credit Suisse First Boston, dated 02/28/14, due 04/04/14 at 0.340%, collateralized by common stocks, market value $130,062,065 (repurchase proceeds $122,050,331) (i) | 122,010,000 | 122,010,000 | |||||||||
Repurchase agreement with HSBC Securities USA, Inc., dated 02/03/14, at 0.160%, collateralized by corporate bonds with various maturities to 12/01/23, market value $85,802,623 (a)(h)(i) | 81,715,000 | 81,715,000 | |||||||||
Repurchase agreement with ING Bank, dated 02/28/14, due 03/03/14 at 0.220%, collateralized by common stocks, market value $176,957,049 (repurchase proceeds $160,872,949) | 160,870,000 | 160,870,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 02/03/14, due 05/02/14 at 0.490%, collateralized by a corporate bond maturing 04/15/15, market value $29,962,715 (repurchase proceeds $27,258,611) | 27,226,000 | 27,226,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 02/18/14, due 05/19/14 at 0.380%, collateralized by exchange-traded funds, market value $20,958,454 (repurchase proceeds $19,067,097) | 19,049,000 | 19,049,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 02/25/14, due 05/27/14 at 0.380%, collateralized by common stocks, market value $20,165,874 (repurchase proceeds $19,163,390) | 19,145,000 | 19,145,000 |
See Accompanying Notes to Financial Statements.
8
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with JPMorgan Securities, dated 02/28/14, due 04/14/14 at 0.443%, collateralized by common stocks, market value $94,570,298 (repurchase proceeds $90,049,838) (i) | 90,000,000 | 90,000,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 02/28/14, due 04/14/14 at 0.550%, collateralized by corporate bonds with various maturities to 04/15/15, market value $111,227,456 (repurchase proceeds $101,169,506) (i) | 101,100,000 | 101,100,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 02/28/14, due 05/29/14 at 0.380%, collateralized by common stocks, market value $16,951,929 (repurchase proceeds $16,100,281) | 16,085,000 | 16,085,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 02/28/14, due 05/29/14 at 0.450%, collateralized by common stocks, market value $26,282,108 (repurchase proceeds $25,028,125) (i) | 25,000,000 | 25,000,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 02/28/14, due 05/29/14 at 0.600%, collateralized by corporate bonds with various maturities to 12/15/35, market value $32,625,420 (repurchase proceeds $29,699,483) (i) | 29,655,000 | 29,655,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 12/11/13, due 03/11/14 at 0.490%, collateralized by a corporate bond maturing 06/15/14, market value $17,533,750 (repurchase proceeds $15,939,502) | 15,920,000 | 15,920,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with JPMorgan Securities, dated 12/18/13, due 03/18/14 at 0.490%, collateralized by a corporate bond maturing 06/15/14, market value $17,302,934 (repurchase proceeds $15,729,245) | 15,710,000 | 15,710,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 12/23/13, due 03/24/14 at 0.490%, collateralized by corporate bonds with various maturities to 01/11/31, market value $17,475,029 (repurchase proceeds $15,889,657) | 15,870,000 | 15,870,000 | |||||||||
Repurchase agreement with JPMorgan Securities, dated 12/30/13, due 03/28/14 at 0.500%, collateralized by corporate bonds with various maturities to 04/15/15, market value $35,107,967 (repurchase proceeds $31,923,971) | 31,885,000 | 31,885,000 | |||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.120%, collateralized by a U.S. Treasury obligation and U.S. Government Agency obligations with various maturities to 12/01/43, market value $153,001,550 (repurchase proceeds $150,001,500) | 150,000,000 | 150,000,000 | |||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by corporate bonds with various maturities to 08/15/23, market value $65,741,322 (repurchase proceeds $62,610,783) | 62,610,000 | 62,610,000 |
See Accompanying Notes to Financial Statements.
9
BofA Money Market Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with RBC Capital Markets, dated 02/25/14, due 03/04/14 at 0.150%, collateralized by corporate bonds with various maturities to 02/15/24, market value $100,261,757 (repurchase proceeds $95,487,785) | 95,485,000 | 95,485,000 | |||||||||
Repurchase agreement with SG Americas Securities LLC, dated 02/28/14, due 03/03/14 at 0.180%, collateralized by corporate bonds with various maturities to 09/15/23, market value $135,131,777 (repurchase proceeds $128,696,930) | 128,695,000 | 128,695,000 | |||||||||
Repurchase agreement with SG Americas Securities LLC, dated 02/28/14, due 03/03/14 at 0.210%, collateralized by corporate bonds with various maturities to 09/15/23, market value $135,132,116 (repurchase proceeds $128,697,252) | 128,695,000 | 128,695,000 | |||||||||
Repurchase agreement with Wells Fargo Bank NA, dated 02/03/14, at 0.160%, collateralized by corporate bonds with various maturities to 02/15/24, market value $182,880,815 (a)(h)(i) | 174,150,000 | 174,150,000 | |||||||||
Repurchase agreement with Wells Fargo Bank NA, dated 02/25/14, due 03/04/14 at 0.290%, collateralized by corporate bonds with various maturities to 02/15/24, market value $87,731,741 (repurchase proceeds $83,554,711) | 83,550,000 | 83,550,000 | |||||||||
Repurchase agreement with Wells Fargo Bank NA, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by a U.S. Treasury obligation maturing 08/28/14, market value $163,935,443 (repurchase proceeds $160,721,009) | 160,719,000 | 160,719,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Wells Fargo Bank NA, dated 12/10/13, due 03/12/14 at 0.350%, collateralized by corporate bonds with various maturities to 11/25/23, market value $17,113,049 (repurchase proceeds $16,299,566) | 16,285,000 | 16,285,000 | |||||||||
Repurchase agreement with Wells Fargo Bank NA, dated 12/11/13, due 03/13/14 at 0.350%, collateralized by corporate bonds with various maturities to 11/15/23, market value $26,770,075 (repurchase proceeds $25,497,786) | 25,475,000 | 25,475,000 | |||||||||
Repurchase agreement with Wells Fargo Bank NA, dated 12/18/13, due 03/18/14 at 0.350%, collateralized by corporate bonds with various maturities to 02/15/24, market value $23,111,591 (repurchase proceeds $22,014,246) | 21,995,000 | 21,995,000 | |||||||||
Total Repurchase Agreements (cost of $2,936,964,000) | 2,936,964,000 | ||||||||||
Total Investments – 100.0% (cost of $18,094,869,824) (j) | 18,094,869,824 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 589,420 | ||||||||||
Net Assets – 100.0% | 18,095,459,244 |
Notes to Investment Portfolio:
(a) The interest rate shown on floating rate or variable rate securities reflects the rate at February 28, 2014.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(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 February 28, 2014, these securities, which are not illiquid, amounted to $4,777,899,122 or 26.4% of net assets for the Fund.
(e) Collateralized commercial paper.
(f) Guaranteed by the Kingdom of Belgium, the French Republic and the Grand Duchy of Luxembourg.
(g) 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
See Accompanying Notes to Financial Statements.
10
BofA Money Market Reserves
February 28, 2014 (Unaudited)
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 February 28, 2014.
(h) Open repurchase agreement with no specific maturity date.
(i) This security is subject to a demand feature.
(j) Cost for federal income tax purposes is $18,094,869,824.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 5,371,882,059 | $ | — | $ | 5,371,882,059 | |||||||||||
Total Asset-Backed Commercial Paper | — | 3,415,890,622 | — | 3,415,890,622 | |||||||||||||||
Total Commercial Paper | — | 3,120,788,841 | — | 3,120,788,841 | |||||||||||||||
Total Time Deposits | — | 2,607,988,000 | — | 2,607,988,000 | |||||||||||||||
Total Municipal Bonds | — | 337,828,780 | — | 337,828,780 | |||||||||||||||
Total Government & Agency Obligations | — | 202,505,226 | — | 202,505,226 | |||||||||||||||
Total Corporate Bonds | — | 101,022,296 | — | 101,022,296 | |||||||||||||||
Total Repurchase Agreements | — | 2,936,964,000 | — | 2,936,964,000 | |||||||||||||||
Total Investments | $ | — | $ | 18,094,869,824 | $ | — | $ | 18,094,869,824 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Certificates of Deposit | 29.7 | ||||||
Asset-Backed Commercial Paper | 18.9 | ||||||
Commercial Paper | 17.2 | ||||||
Time Deposits | 14.4 | ||||||
Municipal Bonds | 1.9 | ||||||
Government & Agency Obligations | 1.1 | ||||||
Corporate Bonds | 0.6 | ||||||
83.8 | |||||||
Repurchase Agreements | 16.2 | ||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
FHLB | Federal Home Loan Bank | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
11
Statement of Assets and Liabilities – BofA Money Market Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 15,157,905,824 | |||||||||
Repurchase agreements, at amortized cost approximating value | 2,936,964,000 | ||||||||||
Total investments, at value | 18,094,869,824 | ||||||||||
Cash | 47,846 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 35,311 | ||||||||||
Interest | 2,729,945 | ||||||||||
Trustees' deferred compensation plan | 69,369 | ||||||||||
Prepaid expenses | 231,275 | ||||||||||
Total Assets | 18,097,983,570 | ||||||||||
Liabilities | Payable for: | ||||||||||
Fund shares repurchased | 16,874 | ||||||||||
Distributions | 190,820 | ||||||||||
Investment advisory fee | 1,508,173 | ||||||||||
Administration fee | 535,092 | ||||||||||
Pricing and bookkeeping fees | 21,416 | ||||||||||
Transfer agent fee | 14,847 | ||||||||||
Trustees' fees | 20,726 | ||||||||||
Custody fee | 91,282 | ||||||||||
Distribution and service fees | 11,079 | ||||||||||
Shareholder administration fee | 11,212 | ||||||||||
Chief compliance officer expenses | 3,841 | ||||||||||
Trustees' deferred compensation plan | 69,369 | ||||||||||
Other liabilities | 29,595 | ||||||||||
Total Liabilities | 2,524,326 | ||||||||||
Net Assets | 18,095,459,244 | ||||||||||
Net Assets Consist of | Paid-in capital | 18,095,329,774 | |||||||||
Undistributed net investment income | 67,665 | ||||||||||
Accumulated net realized gain | 61,805 | ||||||||||
Net Assets | 18,095,459,244 |
See Accompanying Notes to Financial Statements.
12
Statement of Assets and Liabilities (continued) – BofA Money Market Reserves
February 28, 2014 (Unaudited)
Adviser Class Shares | Net assets | $ | 372,355,554 | ||||||||
Shares outstanding | 372,351,820 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 17,362,267,205 | ||||||||
Shares outstanding | 17,362,101,826 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 71,857,448 | ||||||||
Shares outstanding | 71,856,733 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 219,115,921 | ||||||||
Shares outstanding | 219,113,687 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 10,018,973 | ||||||||
Shares outstanding | 10,018,871 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 59,844,143 | ||||||||
Shares outstanding | 59,843,537 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
13
Statement of Operations – BofA Money Market Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 16,773,180 | |||||||||
Expenses | Investment advisory fee | 11,896,475 | |||||||||
Administration fee | 7,850,983 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 462,219 | ||||||||||
Liquidity Class Shares | 50,075 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 43,939 | ||||||||||
Trust Class Shares | 33,813 | ||||||||||
Transfer agent fee | 116,044 | ||||||||||
Pricing and bookkeeping fees | 94,802 | ||||||||||
Trustees' fees | 60,266 | ||||||||||
Custody fee | 154,375 | ||||||||||
Chief compliance officer expenses | 16,787 | ||||||||||
Other expenses | 343,376 | ||||||||||
Total Expenses | 21,123,154 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (7,910,004 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (364,388 | ) | |||||||||
Institutional Class Shares | (298 | ) | |||||||||
Liquidity Class Shares | (39,308 | ) | |||||||||
Trust Class Shares | (15,871 | ) | |||||||||
Net Expenses | 12,793,285 | ||||||||||
Net Investment Income | 3,979,895 | ||||||||||
Net realized gain on investments | 23,087 | ||||||||||
Net Increase Resulting from Operations | 4,002,982 |
See Accompanying Notes to Financial Statements.
14
Statement of Changes in Net Assets – BofA Money Market Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | 3,979,895 | 8,887,020 | ||||||||||||
Net realized gain on investments | 23,087 | 38,755 | |||||||||||||
Net increase resulting from operations | 4,002,982 | 8,925,775 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Capital Class Shares | (3,955,682 | ) | (8,723,295 | ) | |||||||||||
Institutional Capital Shares | (9,581 | ) | (39,029 | ) | |||||||||||
Institutional Class Shares | (14,630 | ) | (118,976 | ) | |||||||||||
Trust Class Shares | — | (5,720 | ) | ||||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | — | (595 | ) | ||||||||||||
Capital Class Shares | — | (16,375 | ) | ||||||||||||
Institutional Capital Shares | — | (41 | ) | ||||||||||||
Institutional Class Shares | — | (355 | ) | ||||||||||||
Liquidity Class Shares | — | (44 | ) | ||||||||||||
Trust Class Shares | — | (135 | ) | ||||||||||||
Total distributions to shareholders | (3,979,893 | ) | (8,904,565 | ) | |||||||||||
Net Capital Stock Transactions | 8,523,710,660 | (2,098,083,369 | ) | ||||||||||||
Total increase (decrease) in net assets | 8,523,733,749 | (2,098,062,159 | ) | ||||||||||||
Net Assets | Beginning of period | 9,571,725,495 | 11,669,787,654 | ||||||||||||
End of period | 18,095,459,244 | 9,571,725,495 | |||||||||||||
Undistributed net investment income at end of period | 67,665 | 67,663 |
See Accompanying Notes to Financial Statements.
15
Statement of Changes in Net Assets (continued) – BofA Money Market Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 564,897,796 | 564,897,796 | 1,340,515,561 | 1,340,515,562 | |||||||||||||||
Distributions reinvested | — | — | 37 | 37 | |||||||||||||||
Redemptions | (529,388,439 | ) | (529,388,439 | ) | (1,453,540,931 | ) | (1,453,540,931 | ) | |||||||||||
Net increase (decrease) | 35,509,357 | 35,509,357 | (113,025,333 | ) | (113,025,332 | ) | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 95,572,394,088 | 95,572,394,088 | 57,631,706,601 | 57,631,706,601 | |||||||||||||||
Distributions reinvested | 2,695,098 | 2,695,098 | 6,440,254 | 6,440,255 | |||||||||||||||
Redemptions | (87,052,017,462 | ) | (87,052,017,462 | ) | (59,337,788,478 | ) | (59,337,788,478 | ) | |||||||||||
Net increase (decrease) | 8,523,071,724 | 8,523,071,724 | (1,699,641,623 | ) | (1,699,641,622 | ) | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 80,677,232 | 80,677,232 | 56,502,246 | 56,502,246 | |||||||||||||||
Distributions reinvested | 7,255 | 7,255 | 42 | 42 | |||||||||||||||
Redemptions | (17,576,959 | ) | (17,576,959 | ) | (291,590,052 | ) | (291,590,053 | ) | |||||||||||
Net increase (decrease) | 63,107,528 | 63,107,528 | (235,087,764 | ) | (235,087,765 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 223,548,646 | 223,548,646 | 876,376,034 | 876,376,033 | |||||||||||||||
Distributions reinvested | 14,050 | 14,050 | 115,059 | 115,059 | |||||||||||||||
Redemptions | (270,507,939 | ) | (270,507,939 | ) | (934,887,010 | ) | (934,887,010 | ) | |||||||||||
Net decrease | (46,945,243 | ) | (46,945,243 | ) | (58,395,917 | ) | (58,395,918 | ) | |||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 71,997,596 | 71,997,596 | 124,147,376 | 124,147,376 | |||||||||||||||
Distributions reinvested | — | — | 44 | 44 | |||||||||||||||
Redemptions | (112,544,384 | ) | (112,544,384 | ) | (102,838,230 | ) | (102,838,230 | ) | |||||||||||
Net increase (decrease) | (40,546,788 | ) | (40,546,788 | ) | 21,309,190 | 21,309,190 | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 135,929,326 | 135,929,326 | 447,012,036 | 447,012,036 | |||||||||||||||
Redemptions | (146,415,244 | ) | (146,415,244 | ) | (460,253,958 | ) | (460,253,958 | ) | |||||||||||
Net decrease | (10,485,918 | ) | (10,485,918 | ) | (13,241,922 | ) | (13,241,922 | ) |
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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | (d) | — | 0.01 | ||||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | — | — | — | (0.01 | ) | ||||||||||||||||||||
From net realized gains | — | — | (d) | — | (d) | — | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | — | — | (0.01 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.00 | %(i) | 0.00 | % | 0.00 | % | 0.89 | %(j)(k) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.21 | %(l) | 0.28 | %(m) | 0.33 | %(m) | 0.31 | %(m) | 0.33 | %(m) | 0.48 | %(m) | |||||||||||||||
Waiver/Reimbursement | 0.30 | %(l) | 0.23 | % | 0.18 | % | 0.21 | % | 0.19 | % | 0.06 | % | |||||||||||||||
Net investment income | — | — | (m) | — | (m) | — | %(i)(m) | — | (m) | 1.08 | %(k)(m) | ||||||||||||||||
Net assets, end of period (000s) | $ | 372,356 | $ | 336,848 | $ | 449,873 | $ | 681,956 | $ | 1,399,372 | $ | 3,100,587 |
(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 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) Not Annualized
(i) Rounds to less than 0.01%.
(j) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.00%.
(k) 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.
(l) Annualized
(m) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (e) | 0.001 | 0.001 | 0.001 | — | (f) | 0.01 | |||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | — | (f) | |||||||||||||||
Total from Investment Operations | — | (e) | 0.001 | 0.001 | 0.001 | — | (f) | 0.01 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (e) | (0.001 | ) | (0.001 | ) | (0.001 | ) | — | (f) | (0.01 | ) | |||||||||||||||
From net realized gains | — | — | (e) | — | (e) | — | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | (e) | (0.001 | ) | (0.001 | ) | (0.001 | ) | — | (f) | (0.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.03 | %(i) | 0.07 | % | 0.14 | % | 0.11 | % | 0.13 | % | 1.13 | %(j) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.16 | %(k) | 0.20 | %(l) | 0.20 | %(l) | 0.20 | %(l) | 0.20 | %(l) | 0.24 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.10 | %(k) | 0.06 | % | 0.06 | % | 0.07 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.05 | %(k) | 0.08 | %(l) | 0.14 | %(l) | 0.11 | %(l) | 0.13 | %(l) | 1.07 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 17,362,267 | $ | 8,839,168 | $ | 10,538,788 | $ | 6,387,295 | $ | 8,094,013 | $ | 8,254,775 |
(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 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 $0.001 per share.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested.
(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) Not Annualized
(j) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.24%.
(k) Annualized
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Capital Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (e) | 0.001 | 0.001 | 0.001 | — | (f) | 0.01 | |||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | — | (f) | |||||||||||||||
Total from Investment Operations | — | (e) | 0.001 | 0.001 | 0.001 | — | (f) | 0.01 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (e) | (0.001 | ) | (0.001 | ) | (0.001 | ) | — | (f) | (0.01 | ) | |||||||||||||||
From net realized gains | — | — | (e) | — | (e) | — | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | (e) | (0.001 | ) | (0.001 | ) | �� | (0.001 | ) | — | (f) | (0.01 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.03 | %(i) | 0.07 | % | 0.14 | % | 0.11 | % | 0.13 | % | 1.13 | %(j) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.16 | %(k) | 0.20 | %(l) | 0.20 | %(l) | 0.20 | %(l) | 0.20 | %(l) | 0.24 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.10 | %(k) | 0.06 | % | 0.06 | % | 0.07 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.05 | %(k) | 0.11 | %(l) | 0.14 | %(l) | 0.11 | %(l) | 0.13 | %(l) | 1.19 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 71,857 | $ | 8,749 | $ | 243,840 | $ | 213,428 | $ | 331,202 | $ | 490,631 |
(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 $0.001 per share.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested.
(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) Not Annualized
(j) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.24%.
(k) Annualized
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | 0.001 | 0.001 | — | (e) | 0.01 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | 0.001 | 0.001 | — | (e) | 0.01 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | (0.001 | ) | (0.001 | ) | — | (e) | (0.01 | ) | |||||||||||||||
From net realized gains | — | — | (d) | — | (d) | — | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | (0.001 | ) | (0.001 | ) | — | (e) | (0.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.01 | %(h) | 0.04 | % | 0.10 | % | 0.07 | % | 0.09 | % | 1.09 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.20 | %(j) | 0.24 | %(k) | 0.24 | %(k) | 0.24 | %(k) | 0.24 | %(k) | 0.28 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.10 | %(j) | 0.06 | % | 0.06 | % | 0.07 | % | 0.06 | % | 0.05 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.04 | %(k) | 0.09 | %(k) | 0.07 | %(k) | 0.09 | %(k) | 1.11 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 219,116 | $ | 266,063 | $ | 324,459 | $ | 534,875 | $ | 991,882 | $ | 2,003,722 |
(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 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) Not Annualized
(i) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.20%.
(j) Annualized
(k) 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 data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | — | (d) | — | (d) | — | (e) | (0.01 | ) | |||||||||||||||||
From net realized gains | — | — | (d) | — | (d) | — | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.01 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.01 | % | 0.00 | %(i) | 0.01 | % | 0.98 | %(j) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.21 | %(k) | 0.29 | %(l) | 0.32 | %(l) | 0.31 | %(l) | 0.33 | %(l) | 0.39 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.30 | %(k) | 0.23 | % | 0.19 | % | 0.21 | % | 0.19 | % | 0.15 | % | |||||||||||||||
Net investment income | — | — | (l) | 0.01 | %(l) | — | %(i)(l) | — | %(i)(l) | 1.12 | %(l) | ||||||||||||||||
Net assets, end of period (000s) | $ | 10,019 | $ | 50,566 | $ | 29,257 | $ | 47,905 | $ | 102,245 | $ | 453,489 |
(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 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) Not Annualized
(i) Rounds to less than 0.01%.
(j) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.09%.
(k) Annualized
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | |||||||||||||||||
Net realized gain (loss) on investments and Capital Support Agreement | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.01 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.01 | ) | ||||||||||||||||
From net realized gains | — | — | (d) | — | (d) | — | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.01 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.01 | % | 0.04 | % | 0.02 | % | 0.03 | % | 1.03 | %(i) | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.21 | %(j) | 0.27 | %(k) | 0.30 | %(k) | 0.29 | %(k) | 0.30 | %(k) | 0.34 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.15 | %(j) | 0.09 | % | 0.06 | % | 0.08 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.01 | %(k) | 0.04 | %(k) | 0.02 | %(k) | 0.03 | %(k) | 1.02 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 59,844 | $ | 70,331 | $ | 83,572 | $ | 111,876 | $ | 87,924 | $ | 179,509 |
(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 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) Not Annualized
(i) Had an affiliate of the investment advisor not provided capital support, total return would have been 0.14%.
(j) Annualized
(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
February 28, 2014 (Unaudited)
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. 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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule being 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 upon the
23
BofA Money Market Reserves, February 28, 2014 (Unaudited)
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, the Fund's investment advisor (the "Advisor"), determines are creditworthy. Repurchase agreements are collateralized by the securities purchased by the Fund under the repurchase agreements, which may include securities that the Fund is not otherwise directly permitted to purchase, such as long-term government bonds, investment-grade corporate bonds and equity securities. The Advisor is responsible for determining that such underlying securities are 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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
Note 3. Capital Support
On September 8, 2009, an affiliate of the Advisor 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.
24
BofA Money Market Reserves, February 28, 2014 (Unaudited)
The tax character of distributions paid during the year ended August 31, 2013 was as follows:
Distributions paid from | |||||||
Ordinary Income* | $ | 8,887,057 | |||||
Long-Term Capital Gains | 17,508 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
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 50 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 5. Fees and Compensation Paid to Affiliates and Other Expenses
Investment Advisory Fee
The Advisor, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly
investment advisory fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date. In addition, the Advisor, at its discretion, has voluntarily agreed to waive a portion of its Advisory fee. This waiver may be modified or discontinued by the Advisor at any time.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.11% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
25
BofA Money Market Reserves, February 28, 2014 (Unaudited)
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor 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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
Effective February 1, 2013, the Accounting Services Agreement was amended to reflect Shadow Pricing Services pursuant to which State Street provides a daily shadow net asset value calculation for the Fund. Under the agreement, the Fund pays State Street an annual fee of $20,000 paid monthly.
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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, 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 and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class and Liquidity Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Liquidity Class Shares | 0.15 | %* | 0.25 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
Adviser 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 Shareholder Servicing Plan fees through December 31, 2014 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such payments and/or reimbursements may not exceed, on an annual basis, 0.25% of the average daily net assets of the Fund's Liquidity Class shares.
26
BofA Money Market Reserves, February 28, 2014 (Unaudited)
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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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
The Advisor 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, 2014, 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), 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 such date. In addition, the Advisor, at its discretion, has voluntarily agreed to bear an additional portion of the Fund's expenses. This voluntary expense limitation may be modified or discontinued by the Advisor at any time.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/2014 | |||||||||||||||
$ | 7,551,736 | $ | 6,172,479 | $ | 6,692,522 | $ | 20,416,737 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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 Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The
27
BofA Money Market Reserves, February 28, 2014 (Unaudited)
Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 7. Shareholder Concentration
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
The Fund's risks include, but are not limited to the following:
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 may be 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 may be 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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
Legal Proceedings
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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
28
BofA Money Market Reserves, February 28, 2014 (Unaudited)
independence of its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
29
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
30
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA Money Market Reserves, the Board noted that the Fund's Contractual Management Fee Rate, Actual Management Fee Rate and total expense ratio were each above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
31
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In particular, in considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by
BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
32
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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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 Money Market Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-MMR-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 13 | ||||||
Statement of Operations | 15 | ||||||
Statement of Changes in Net Assets | 16 | ||||||
Financial Highlights | 18 | ||||||
Notes to Financial Statements | 26 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 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 Municipal Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,023.95 | 0.84 | 0.85 | 0.17 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 0.84 | 0.85 | 0.17 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 0.84 | 0.85 | 0.17 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 0.84 | 0.85 | 0.17 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 0.84 | 0.85 | 0.17 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 0.84 | 0.85 | 0.17 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.90 | 0.89 | 0.90 | 0.18 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 0.84 | 0.85 | 0.17 |
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 365.
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
February 28, 2014 (Unaudited)
Municipal Bonds – 74.8% | |||||||||||
Par ($) | Value ($) | ||||||||||
Arizona – 0.8% | |||||||||||
AZ City of Phoenix Civic Improvement Corp. | |||||||||||
Series 2004, | |||||||||||
Pre-refunded 07/01/14, Insured: AMBAC 5.000% 07/01/16 | 6,000,000 | 6,096,481 | |||||||||
AZ Maricopa County Industrial Development Authority | |||||||||||
Sonora Vista II Apartments, | |||||||||||
Series 2003 A, AMT, LOC: Wells Fargo Bank N.A. 0.190% 12/01/39 (03/06/14) (a)(b) | 830,000 | 830,000 | |||||||||
AZ Phoenix Industrial Development Authority | |||||||||||
Phoenix Broadway Associates, | |||||||||||
Sunrise Vista Apartments, Series 2003 A, AMT, LOC: Wells Fargo Bank N.A. 0.190% 06/01/31 (03/06/14) (a)(b) | 4,320,000 | 4,320,000 | |||||||||
Arizona Total | 11,246,481 | ||||||||||
Arkansas – 0.3% | |||||||||||
AR Development Finance Authority | |||||||||||
MERLOTS, | |||||||||||
Series 2007 C106, AMT, DPCE: GNMA/FNMA, SPA: Wells Fargo Bank N.A. 0.350% 01/01/35 (03/05/14) (a)(b)(c) | 505,000 | 505,000 | |||||||||
AR Pulaski County Health Facilities Board | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2000 B, LIQ FAC: JPMorganChase Bank 0.140% 12/01/28 (03/05/14) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
Arkansas Total | 4,505,000 | ||||||||||
California – 3.0% | |||||||||||
CA Airport Community of San Francisco | |||||||||||
Series A-3, | |||||||||||
LOC: Royal Bank of Canada 0.150% 06/18/14 | 2,150,000 | 2,150,000 | |||||||||
CA Statewide Communities Development Authority | |||||||||||
0.140% 08/06/14 | 12,500,000 | 12,500,000 | |||||||||
Kaiser Permanente, | |||||||||||
Series 2009 B-4, 0.210% 05/02/14 | 7,200,000 | 7,200,000 |
Par ($) | Value ($) | ||||||||||
CA State | |||||||||||
Revenue Anticipation Notes, | |||||||||||
Series 2013 A2, 2.000% 06/23/14 | 13,710,000 | 13,785,636 | |||||||||
CA University of California | |||||||||||
Series 2013, | |||||||||||
0.020% 05/15/48 (03/06/14) (b)(d) | 5,400,000 | 5,400,000 | |||||||||
California Total | 41,035,636 | ||||||||||
Colorado – 0.4% | |||||||||||
CO Boulder County | |||||||||||
Boulder Medical Center PC, | |||||||||||
Series 1998, AMT, LOC: Wells Fargo Bank N.A. 0.190% 01/01/17 (03/06/14) (a)(b) | 785,000 | 785,000 | |||||||||
CO Health Facilities Authority | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2004 B-6, SPA: JPMorgan Chase Bank 0.150% 03/01/44 (03/05/14) (a)(b) | 4,100,000 | 4,100,000 | |||||||||
Colorado Total | 4,885,000 | ||||||||||
Connecticut – 0.5% | |||||||||||
CT Enfield | |||||||||||
Series 2013, | |||||||||||
1.000% 08/12/14 | 3,300,000 | 3,311,389 | |||||||||
CT Manchester | |||||||||||
Series 2013, | |||||||||||
1.500% 07/03/14 | 3,081,000 | 3,094,472 | |||||||||
Connecticut Total | 6,405,861 | ||||||||||
Florida – 2.2% | |||||||||||
FL Hillsborough County Industrial Development Authority | |||||||||||
Seaboard Tampa Terminals, | |||||||||||
Series 1986, AMT, LOC: Northern Trust Co. 0.320% 12/01/16 (03/05/14) (a)(b) | 4,250,000 | 4,250,000 | |||||||||
FL North Broward Hospital District | |||||||||||
Series 2005 A-6, | |||||||||||
LOC: Wells Fargo Bank N.A. 0.030% 01/15/27 (03/06/14) (a)(b) | 22,600,000 | 22,600,000 |
See Accompanying Notes to Financial Statements.
2
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
FL Sunshine Governmental Financing Commission | |||||||||||
SPA: JPMorgan Chase Bank | |||||||||||
0.130% 08/22/14 | 3,600,000 | 3,600,000 | |||||||||
Florida Total | 30,450,000 | ||||||||||
Georgia – 1.1% | |||||||||||
GA Atlanta Urban Residential Finance Authority | |||||||||||
Series 1992 A, AMT, | |||||||||||
LOC: Wells Fargo Bank N.A. 0.190% 12/01/14 (03/06/14) (a)(b) | 440,000 | 440,000 | |||||||||
GA Gordon County Development Authority | |||||||||||
Nance Carpet & Rug, Inc., | |||||||||||
Series 2006, AMT, LOC: Branch Banking & Trust 0.200% 10/01/21 (03/06/14) (a)(b) | 1,580,000 | 1,580,000 | |||||||||
GA Municipal Electric Authority | |||||||||||
Series 2008 B, | |||||||||||
LOC: Bank of Tokyo-Mitsubishi 0.030% 01/01/48 (03/05/14) (a)(b) | 7,600,000 | 7,600,000 | |||||||||
GA Savannah Economic Development Authority | |||||||||||
Consolidated Utilities, Inc., | |||||||||||
Series 2007, AMT, LOC: Branch Banking & Trust 0.100% 11/01/27 (03/06/14) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
GA Wayne County Industrial Development Authority | |||||||||||
Absorption Corp., | |||||||||||
Series 2004, AMT, LOC: Branch Banking & Trust 0.100% 09/01/19 (03/06/14) (a)(b) | 1,400,000 | 1,400,000 | |||||||||
Georgia Total | 15,020,000 | ||||||||||
Idaho – 0.7% | |||||||||||
ID Eagle Industrial Development Corp. | |||||||||||
Rose Cottage LLC, | |||||||||||
Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.240% 09/01/21 (03/06/14) (a)(b) | 2,360,000 | 2,360,000 |
Par ($) | Value ($) | ||||||||||
ID Housing & Finance Association | |||||||||||
Balmoral II LP, | |||||||||||
Series 2001, AMT, LOC: U.S. Bank N.A. 0.060% 04/01/33 (03/03/14) (a)(b) | 4,050,000 | 4,050,000 | |||||||||
Balmoral LP, | |||||||||||
Series 2000, AMT, LOC: U.S. Bank N.A. 0.060% 05/01/32 (03/03/14) (a)(b) | 3,615,000 | 3,615,000 | |||||||||
Idaho Total | 10,025,000 | ||||||||||
Illinois – 3.8% | |||||||||||
IL Chicago | |||||||||||
Groot Industries, Inc., | |||||||||||
Series 1995, AMT, LOC: JPMorgan Chase Bank 0.290% 12/01/15 (03/06/14) (a)(b) | 300,000 | 300,000 | |||||||||
MERLOTS: | |||||||||||
Series 2007 C46, AMT, SPA: Wells Fargo Bank N.A. 0.350% 12/01/38 (03/05/14) (a)(b)(c) | 250,000 | 250,000 | |||||||||
Series 2008 C38, AMT, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.350% 06/01/43 (03/05/14) (a)(b)(c) | 795,000 | 795,000 | |||||||||
North Larabee LP, | |||||||||||
Series 2001 A, AMT, LOC: BMO Harris Bank N.A. 0.130% 04/01/36 (03/06/14) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
Renaissance St. Luke LP, | |||||||||||
Series 2004 A, AMT, LOC: BMO Harris Bank N.A. 0.130% 01/01/39 (03/06/14) (a)(b) | 3,365,000 | 3,365,000 | |||||||||
IL Finance Authority | |||||||||||
Campanya-Turano Bakery, | |||||||||||
Series 2000, AMT, LOC: JPMorgan Chase Bank 0.490% 08/01/25 (03/06/14) (a)(b) | 690,000 | 690,000 |
See Accompanying Notes to Financial Statements.
3
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Concordia Place Apartrments LP, | |||||||||||
Series 2013 A, AMT, LOC: BMO Harris Bank N.A. 0.180% 01/01/34 (03/06/14) (a)(b) | 11,455,000 | 11,455,000 | |||||||||
Decatur Mental Health Center, | |||||||||||
Series 1997, AMT, LOC: PNC Bank N.A. 0.150% 05/01/18 (03/06/14) (a)(b) | 995,000 | 995,000 | |||||||||
Engineered Polymer, | |||||||||||
Valspar Corp., Series 1995, AMT, LOC: Lloyds Bank: 0.190% 08/01/15 (03/06/14) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
Groot Industries, Inc., | |||||||||||
Series 2003, AMT, LOC: JPMorgan Chase Bank 0.290% 12/01/23 (03/06/14) (a)(b) | 2,850,000 | 2,850,000 | |||||||||
Knead Dough Baking, | |||||||||||
Series 2000, AMT, LOC: JPMorgan Chase Bank 0.490% 09/01/25 (03/06/14) (a)(b) | 180,000 | 180,000 | |||||||||
Lake Towers Associates II LP, | |||||||||||
Cinnamon Lake Towers, Series 1997, AMT, DPCE: FHLMC: SPA: FHLMC 0.180% 10/01/23 (03/06/14) (a)(b) | 8,565,000 | 8,565,000 | |||||||||
Merug LLC, | |||||||||||
Series 2004 A, AMT, LOC: JPMorgan Chase Bank 0.290% 12/01/18 (03/06/14) (a)(b) | 1,280,000 | 1,280,000 | |||||||||
University of Chicago, | |||||||||||
Series 2001 B3, 0.230% 07/01/36 (03/13/14) (b)(d) | 2,800,000 | 2,800,000 | |||||||||
IL Housing Development Authority | |||||||||||
Pontiac Tower Associates III, | |||||||||||
Series 2005, AMT, LOC: BMO Harris Bank N.A. 0.180% 09/01/35 (03/06/14) (a)(b) | 3,360,000 | 3,360,000 |
Par ($) | Value ($) | ||||||||||
Sterling Towers Associates II, | |||||||||||
Series 2001, AMT, LOC: BMO Harris Bank N.A. 0.180% 10/01/35 (03/06/14) (a)(b) | 3,280,000 | 3,280,000 | |||||||||
Illinois Total | 52,165,000 | ||||||||||
Indiana – 1.4% | |||||||||||
IN Allen County | |||||||||||
Debeere LLC, | |||||||||||
Series 2002, AMT, LOC: JPMorgan Chase Bank 0.490% 08/01/17 (03/06/14) (a)(b) | 1,200,000 | 1,200,000 | |||||||||
IN Bond Bank | |||||||||||
Series 2014 A, | |||||||||||
1.250% 01/06/15 | 5,220,000 | 5,264,323 | |||||||||
IN Health Facility Financing Authority | |||||||||||
Ascension Health Credit Group, | |||||||||||
Series 2005 A6, 5.000% 10/01/27 (06/01/14) (b)(d) | 1,500,000 | 1,517,605 | |||||||||
Community Hospital, | |||||||||||
Series 2000 A, LOC: Wells Fargo Bank N.A. 0.030% 07/01/28 (03/06/14) (a)(b) | 10,500,000 | 10,500,000 | |||||||||
Indiana Total | 18,481,928 | ||||||||||
Iowa – 0.2% | |||||||||||
IA Clinton | |||||||||||
Sethness Products Company., | |||||||||||
Series 2004, AMT, LOC: Northern Trust Company 0.320% 12/01/22 (03/05/14) (a)(b) | 2,500,000 | 2,500,000 | |||||||||
Iowa Total | 2,500,000 | ||||||||||
Kansas – 1.5% | |||||||||||
KS Wyandotte County-Kansas City Unified Government | |||||||||||
Series 2013 I, | |||||||||||
0.240% 03/01/14 | 4,470,000 | 4,470,000 | |||||||||
Series 2013 III, | |||||||||||
0.220% 03/01/14 | 3,965,000 | 3,965,000 | |||||||||
Series 2014 I, | |||||||||||
0.180% 03/01/15 | 11,950,000 | 11,951,188 | |||||||||
Kansas Total | 20,386,188 |
See Accompanying Notes to Financial Statements.
4
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Kentucky – 0.8% | |||||||||||
KY Campbellsville-Taylor County Economic Development Authority | |||||||||||
Airguard Industries, Inc., | |||||||||||
Series 2001, AMT, LOC: JPMorgan Chase Bank 0.320% 05/01/31 (03/05/14) (a)(b) | 7,410,000 | 7,410,000 | |||||||||
KY Clipper Tax-Exempt Certificate Trust | |||||||||||
Kentucky Housing Corp., | |||||||||||
Certification of Participation, Series 2005, AMT, LIQ FAC: State Street Bank & Trust Co. 0.150% 07/01/35 (03/06/14) (a)(b) | 995,000 | 995,000 | |||||||||
KY Hopkinsville | |||||||||||
Comefri USA, Inc., | |||||||||||
Series 2006, AMT, LOC: Branch Banking & Trust 0.200% 06/01/26 (03/06/14) (a)(b) | 2,470,000 | 2,470,000 | |||||||||
Kentucky Total | 10,875,000 | ||||||||||
Louisiana – 0.9% | |||||||||||
LA Bank of New York Municipal Certificates Trust | |||||||||||
Louisiana State Public Facility Authority | |||||||||||
Tulane University Series 2007, LOC: Bank of New York 0.280% 02/15/36 (05/15/14) (a)(b) | 3,895,000 | 3,895,000 | |||||||||
LA Public Facilities Authority | |||||||||||
Baton Rouge General Medical, | |||||||||||
Series 2004, Pre-refunded 07/01/14: 5.250% 07/01/24 | 1,360,000 | 1,381,690 | |||||||||
5.250% 07/01/33 | 7,000,000 | 7,109,777 | |||||||||
Louisiana Total | 12,386,467 | ||||||||||
Massachusetts – 1.7% | |||||||||||
MA Deutsche Bank Spears/Lifers Trust | |||||||||||
Massachusetts State College Building Authority, | |||||||||||
Series 2008, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.050% 05/01/39 (03/06/14) (a)(b)(c) | 1,650,000 | 1,650,000 |
Par ($) | Value ($) | ||||||||||
MA Development Finance Agency | |||||||||||
Partners Healthcare System: | |||||||||||
Series 2011 K-1, SPA: Wells Fargo Bank N.A. 0.020% 07/01/46 (03/06/14) (a)(b) | 13,400,000 | 13,400,000 | |||||||||
Series 2012, | |||||||||||
LIQ FAC: Citibank N.A. 0.030% 07/01/19 (03/06/14) (a)(b)(c) | 1,500,000 | 1,500,000 | |||||||||
MA Lawrence | |||||||||||
Series 2013, | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) 1.000% 09/01/14 | 2,000,000 | 2,005,616 | |||||||||
Series 2014, | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) 1.000% 03/01/15 (e) | 4,000,000 | 4,025,360 | |||||||||
Massachusetts Total | 22,580,976 | ||||||||||
Michigan – 13.9% | |||||||||||
MI Bank of New York Municipal Certificates Trust | |||||||||||
Detroit Sewer Disposal, | |||||||||||
Series 2006, LOC: Bank of New York 0.300% 07/01/26 (04/01/14) (a)(b)(c) | 80,981,000 | 80,981,000 | |||||||||
MI Housing Development Authority | |||||||||||
Series 2007 C, AMT, | |||||||||||
SPA: Bank of Nova Scotia 0.090% 10/01/42 (03/05/14) (a)(b) | 10,415,000 | 10,415,000 | |||||||||
MI RBC Municipal Products, Inc., Trust | |||||||||||
Michigan Higher Ed Student Loan Authority, | |||||||||||
Series 2008 L30, AMT, LOC: Royal Bank of Canada 0.070% 09/01/32 (03/06/14) (a)(b) | 76,090,000 | 76,090,000 | |||||||||
MI State Housing Development Authority | |||||||||||
Series 2007 C AMT, | |||||||||||
SPA: JPMorgan Chase Bank N.A. 0.090% 04/01/42 (03/05/14) (a)(b) | 11,930,000 | 11,930,000 |
See Accompanying Notes to Financial Statements.
5
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
MI Sterling Heights Economic Development Corp. | |||||||||||
Kunath Enterprises LLC, | |||||||||||
Series 2000, AMT, LOC: JPMorgan Chase Bank 0.490% 02/01/16 (03/05/14) (a)(b) | 300,000 | 300,000 | |||||||||
MI Strategic Fund | |||||||||||
Coastal Container Corp., | |||||||||||
Series 2007, AMT, LOC: PNC Bank N.A. 0.230% 12/01/27 (03/06/14) (a)(b) | 4,530,000 | 4,530,000 | |||||||||
Continental Carbonic Products, Inc., | |||||||||||
Series 2007, AMT, LOC: JPMorgan Chase Bank 0.140% 03/01/32 (03/06/14) (a)(b) | 5,410,000 | 5,410,000 | |||||||||
Lapeer Technologies LLC, | |||||||||||
Series 2000, AMT, LOC: JPMorgan Chase Bank 0.440% 02/01/20 (03/05/14) (a)(b) | 600,000 | 600,000 | |||||||||
Michigan Total | 190,256,000 | ||||||||||
Minnesota – 0.6% | |||||||||||
MN Eden Prairie | |||||||||||
SWB LLC, | |||||||||||
Series 2000 A, AMT, LOC: U.S. Bank N.A. 0.160% 11/01/20 (03/06/14) (a)(b) | 1,305,000 | 1,305,000 | |||||||||
MN Jenkins | |||||||||||
Pequot Tool & Manufacturing, Inc., | |||||||||||
Series 2007, AMT, LOC: Wells Fargo Bank N.A. 0.240% 06/01/27 (03/06/14) (a)(b) | 980,000 | 980,000 | |||||||||
MN Rural Water Finance Authority, Inc. | |||||||||||
Series 2013, | |||||||||||
1.000% 01/01/15 | 6,500,000 | 6,540,675 | |||||||||
Minnesota Total | 8,825,675 |
Par ($) | Value ($) | ||||||||||
Mississippi – 0.1% | |||||||||||
MS Home Corp. | |||||||||||
MERLOTS, | |||||||||||
Series 2007, AMT, GTY AGMT: GNMA, FNMA, FHLMC, SPA: Wells Fargo Bank N.A. 0.250% 06/01/38 (03/05/14) (a)(b)(c) | 1,850,000 | 1,850,000 | |||||||||
Mississippi Total | 1,850,000 | ||||||||||
Missouri – 1.4% | |||||||||||
MO Development Finance Board | |||||||||||
The Nelson Gallery Foundation: | |||||||||||
Series 2004 A, SPA: Northern Trust Company 0.030% 12/01/33 (03/03/14) (a)(b) | 12,385,000 | 12,385,000 | |||||||||
Series 2008 A, | |||||||||||
SPA: Northern Trust Company 0.030% 12/01/37 (03/03/14) (a)(b) | 6,400,000 | 6,400,000 | |||||||||
Missouri Total | 18,785,000 | ||||||||||
Montana – 0.7% | |||||||||||
MT Board of Investments | |||||||||||
Series 2004, | |||||||||||
0.220% 03/01/29 (03/01/14) (b)(d) | 5,600,000 | 5,600,000 | |||||||||
Series 2013, | |||||||||||
0.220% 03/01/38 (03/01/14) (b)(d) | 3,820,000 | 3,820,000 | |||||||||
Montana Total | 9,420,000 | ||||||||||
Nebraska – 0.2% | |||||||||||
NE Lancaster County | |||||||||||
MLLC LLC, | |||||||||||
Garner Industries, Inc., Series 2000 A, AMT, LOC: Wells Fargo Bank N.A. 0.190% 11/01/20 (03/06/14) (a)(b) | 2,180,000 | 2,180,000 | |||||||||
Nebraska Total | 2,180,000 |
See Accompanying Notes to Financial Statements.
6
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Nevada – 0.7% | |||||||||||
NV Housing Division | |||||||||||
Sdashs Apartments Ltd., | |||||||||||
Series 2002 A, AMT, LOC: Wells Fargo Bank N.A. 0.180% 04/01/35 (03/06/14) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
NV Reno | |||||||||||
ReTrac-Reno Transportation Rail Access Corridor, | |||||||||||
Series 2008, LOC: Bank of New York 0.040% 06/01/42 (03/03/14) (a)(b) | 5,400,000 | 5,400,000 | |||||||||
NV Sparks | |||||||||||
Rix Industries, | |||||||||||
Series 2002, AMT, LOC: Wells Fargo Bank N.A. 0.240% 07/01/27 (03/06/14) (a)(b) | 880,000 | 880,000 | |||||||||
Nevada Total | 9,280,000 | ||||||||||
New Hampshire – 2.7% | |||||||||||
NH Health & Education Facilities Authority | |||||||||||
University System of New Hampshire: | |||||||||||
Series 2005 A2, SPA: U.S. Bank N.A. 0.040% 07/01/35 (03/03/14) (a)(b) | 15,200,000 | 15,200,000 | |||||||||
Series 2005 B-1, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.040% 07/01/33 (03/03/14) (a)(b) | 15,625,000 | 15,625,000 | |||||||||
Series 2011 B, | |||||||||||
0.040% 07/01/33 (03/03/14) (b)(d) | 6,035,000 | 6,035,000 | |||||||||
New Hampshire Total | 36,860,000 | ||||||||||
New Jersey – 9.3% | |||||||||||
NJ East Brunswick | |||||||||||
Series 2013: | |||||||||||
1.000% 03/21/14 | 8,152,000 | 8,154,354 | |||||||||
2.000% 03/15/14 | 1,850,000 | 1,851,153 | |||||||||
NJ Economic Development Authority | |||||||||||
0.100% 03/07/14 | 50,000,000 | 50,000,000 | |||||||||
Series 2012, AMT, | |||||||||||
LOC: BNP Paribas 0.100% 03/07/14 | 23,350,000 | 23,350,000 |
Par ($) | Value ($) | ||||||||||
NJ Livingston | |||||||||||
Series 2013, | |||||||||||
1.000% 05/22/14 | 5,500,000 | 5,508,995 | |||||||||
NJ Monmouth County Improvement Authority | |||||||||||
Series 2013, | |||||||||||
2.000% 12/04/14 | 1,925,000 | 1,951,331 | |||||||||
NJ North Bergen | |||||||||||
Series 2013, | |||||||||||
1.000% 04/02/14 | 5,750,000 | 5,753,413 | |||||||||
NJ Readington | |||||||||||
Series 2014, | |||||||||||
1.000% 01/29/15 | 5,675,000 | 5,714,367 | |||||||||
NJ RIB Floater Trust | |||||||||||
NJ Healthcare Financing Authority | |||||||||||
Series 2013, LOC: Barclays Bank PLC 0.080% 07/03/17 (03/06/14) (a)(b)(c) | 8,350,000 | 8,350,000 | |||||||||
NJ Stafford | |||||||||||
Series 2013 A, | |||||||||||
1.000% 05/19/14 | 8,447,750 | 8,459,759 | |||||||||
NJ Sussex County | |||||||||||
Series 2013, | |||||||||||
1.000% 06/27/14 | 7,000,000 | 7,018,063 | |||||||||
NJ Township of North Bergen | |||||||||||
Series 2013, | |||||||||||
1.000% 04/02/14 | 2,010,000 | 2,010,913 | |||||||||
New Jersey Total | 128,122,348 | ||||||||||
New York – 5.7% | |||||||||||
NY Cheektowaga | |||||||||||
Series 2013, | |||||||||||
0.500% 07/17/14 | 5,800,000 | 5,805,915 | |||||||||
NY Connetquot Central School District of Islip | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 0.500% 09/04/14 | 2,500,000 | 2,503,061 | |||||||||
NY Corning School District | |||||||||||
1.000% 06/26/14 | 12,300,000 | 12,334,517 | |||||||||
NY East Hampton Union Free School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 06/26/14 | 1,870,000 | 1,874,761 |
See Accompanying Notes to Financial Statements.
7
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY Housing Development Corp. | |||||||||||
Series 2013 F, | |||||||||||
0.200% 11/01/47 (12/23/14) (b)(d) | 1,300,000 | 1,300,000 | |||||||||
NY Liberty Development Corp. | |||||||||||
3 World Trade Center LLC, | |||||||||||
Series 2011 A3, Escrowed in U.S. Treasuries, 0.230% 12/01/49 (03/19/14) (b)(d) | 16,900,000 | 16,900,000 | |||||||||
NY New York City Municipal Water Finance Authority | |||||||||||
Series 2007 BB-1, | |||||||||||
SPA: BNP Paribas 0.020% 06/15/36 (03/06/14) (a)(b) | 2,700,000 | 2,700,000 | |||||||||
NY Rockland County Industrial Development Agency | |||||||||||
Rockland Jewish Community Center, | |||||||||||
Series 2007, LOC: Wells Fargo Bank N.A. 0.020% 12/01/32 (03/06/14) (a)(b) | 2,730,000 | 2,730,000 | |||||||||
NY Seneca Falls Central School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 07/23/14 | 6,000,000 | 6,012,948 | |||||||||
NY Tonawanda | |||||||||||
Series 2013, | |||||||||||
1.000% 09/04/14 | 3,920,000 | 3,934,621 | |||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2000, | |||||||||||
SPA: Lloyds TSB Bank PLC 0.200% 01/01/19 (03/05/14) (a)(b) | 10,935,000 | 10,935,000 | |||||||||
Series 2002 F, | |||||||||||
SPA: Landesbank Hessen-Thüringen 0.040% 11/01/32 (03/03/14) (a)(b) | 1,835,000 | 1,835,000 | |||||||||
NY Victor Central School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 09/26/14 | 4,100,949 | 4,118,986 | |||||||||
NY West Seneca | |||||||||||
Series 2013, | |||||||||||
1.000% 08/01/14 | 5,400,000 | 5,416,705 | |||||||||
New York Total | 78,401,514 |
Par ($) | Value ($) | ||||||||||
North Carolina – 1.8% | |||||||||||
NC Capital Facilities Finance Agency | |||||||||||
The Fletcher School, Inc., | |||||||||||
Series 2008, LOC: Wells Fargo Bank N.A. 0.040% 08/01/33 (03/06/14) (a)(b) | 3,300,000 | 3,300,000 | |||||||||
NC Clipper Tax-Exempt Certificate Trust | |||||||||||
North Carolina Housing Finance Agency, | |||||||||||
Series 2005, AMT, LIQ FAC: State Street Bank & Trust Co. 0.150% 07/01/36 (03/06/14) (a)(b) | 70,000 | 70,000 | |||||||||
NC Educational Facilities Finance Agency | |||||||||||
Elon University, | |||||||||||
Series 1998, LOC: TD Bank N.A. 0.030% 01/01/21 (03/05/14) (a)(b) | 3,305,000 | 3,305,000 | |||||||||
NC Guilford County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
ABCO Automation, Inc., | |||||||||||
Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.190% 07/01/21 (03/06/14) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
Snider Tire, Inc., | |||||||||||
Series 1999, AMT, LOC: Wells Fargo Bank N.A. 0.190% 10/01/19 (03/06/14) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
NC Iredell County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Valspar Corp. Project, | |||||||||||
Series 1995, AMT, LOC: Lloyds Bank 0.190% 06/01/15 (03/06/14) (a)(b) | 4,500,000 | 4,500,000 | |||||||||
NC Rowan County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
DDSM Properties LLC, | |||||||||||
Series 2008, AMT, LOC: Wells Fargo Bank N.A. 0.190% 01/01/28 (03/06/14) (a)(b) | 4,230,000 | 4,230,000 |
See Accompanying Notes to Financial Statements.
8
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
PHC LLC, | |||||||||||
Series 1999, AMT, LOC: Branch Banking & Trust 0.100% 03/01/14 (03/06/14) (a)(b) | 515,000 | 515,000 | |||||||||
NC Wake County | |||||||||||
Series 2007 B, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.030% 03/01/24 (03/06/14) (a)(b) | 2,100,000 | 2,100,000 | |||||||||
NC Yancey County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Altec Industries, Inc., | |||||||||||
Series 2007, AMT, LOC: Branch Banking & Trust 0.100% 03/01/27 (03/06/14) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
North Carolina Total | 25,020,000 | ||||||||||
Ohio – 1.5% | |||||||||||
OH County of Montgomery | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2004 B1, SPA: Bank of NY Mellon 0.190% 03/01/27 (03/05/14) (a)(b) | 16,700,000 | 16,700,000 | |||||||||
OH Cuyahoga County | |||||||||||
Corporate Wings, | |||||||||||
Series 2005, AMT, LOC: U.S. Bank N.A. 0.230% 04/01/25 (03/06/14) (a)(b) | 925,000 | 925,000 | |||||||||
OH Lucas County | |||||||||||
American Capital Properties, | |||||||||||
Series 1999, AMT, LOC: PNC Bank N.A. 0.090% 10/01/18 (03/06/14) (a)(b) | 1,655,000 | 1,655,000 | |||||||||
OH Solon | |||||||||||
JTM Products, Inc., Project, | |||||||||||
Series 2001, AMT, LOC: PNC Bank N.A. 0.090% 06/01/21 (03/06/14) (a)(b) | 760,000 | 760,000 | |||||||||
Ohio Total | 20,040,000 |
Par ($) | Value ($) | ||||||||||
Pennsylvania – 0.6% | |||||||||||
PA Economic Development Financing Authority | |||||||||||
Pittsburgh Allegheny County, | |||||||||||
Series 2002 A3, AMT, LOC: PNC Bank N.A. 0.150% 04/01/22 (03/06/14) (a)(b) | 900,000 | 900,000 | |||||||||
PA Lawrence County Industrial Development Authority | |||||||||||
Doren, Inc., | |||||||||||
Series 2004, AMT, LOC: PNC Bank N.A. 0.150% 12/01/15 (03/06/14) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
PA St. Mary Hospital Authority | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2004 B, SPA: Landesbank Hessen-Thüringen 0.030% 03/01/32 (03/05/14) (a)(b) | 5,800,000 | 5,800,000 | |||||||||
Pennsylvania Total | 8,400,000 | ||||||||||
Puerto Rico – 3.1% | |||||||||||
PR RBC Municipal Products, Inc. Trust | |||||||||||
Series 2013 E-46, | |||||||||||
LOC: Royal Bank of Canada 0.140% 09/01/15 (03/06/14) (a)(b)(c) | 32,200,000 | 32,200,000 | |||||||||
PR RIB Floater Trust | |||||||||||
Series 2013 8WE, | |||||||||||
LOC: Barclays Bank PLC 0.130% 09/30/14 (03/06/14) (a)(b)(c) | 10,150,000 | 10,150,000 | |||||||||
Puerto Rico Total | 42,350,000 | ||||||||||
South Carolina – 1.3% | |||||||||||
SC Greenville County School District | |||||||||||
Series 2013, | |||||||||||
Credit Support: South Carolina School District Credit Enhancement Program 1.000% 06/02/14 | 13,000,000 | 13,027,311 | |||||||||
SC Jobs-Economic Development Authority | |||||||||||
Quoizel, Inc., | |||||||||||
Series 1996, AMT, LOC: Branch Banking & Trust 0.100% 05/01/16 (03/06/14) (a)(b) | 1,075,000 | 1,075,000 |
See Accompanying Notes to Financial Statements.
9
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Watson Engineering, Inc., | |||||||||||
Series 2007, AMT, LOC: PNC Bank N.A. 0.090% 09/01/27 (03/06/14) (a)(b) | 4,155,000 | 4,155,000 | |||||||||
South Carolina Total | 18,257,311 | ||||||||||
Texas – 5.2% | |||||||||||
TX Harris County Health Facilities Development Corp. | |||||||||||
The Methodist Hospital, | |||||||||||
Series 2008 A1, 0.030% 12/01/41 (03/03/14) (b)(d) | 19,300,000 | 19,300,000 | |||||||||
TX Port of Port Arthur Navigation District | |||||||||||
Total S.A., | |||||||||||
Fina Oil & Chemical Co.: Series 1998, AMT, 0.120% 05/01/33 (03/05/14) (b)(d) | 3,300,000 | 3,300,000 | |||||||||
Series 2000 B, AMT, | |||||||||||
0.110% 05/01/35 (03/05/14) (b)(d) | 10,000,000 | 10,000,000 | |||||||||
TX State | |||||||||||
Series 2013 | |||||||||||
2.000% 08/28/14 | 38,800,000 | 39,151,367 | |||||||||
Texas Total | 71,751,367 | ||||||||||
Utah – 0.5% | |||||||||||
UT Building Ownership Authority | |||||||||||
Series 2004, | |||||||||||
Pre-refunded 05/15/14, 5.000% 05/15/17 | 1,825,000 | 1,842,751 | |||||||||
UT Weber County | |||||||||||
IHC Health Services, Inc., | |||||||||||
Series 2000 A, SPA: Bank of New York Mellon 0.030% 02/15/31 (03/03/14) (a)(b) | 5,500,000 | 5,500,000 | |||||||||
Utah Total | 7,342,751 | ||||||||||
Virginia – 1.9% | |||||||||||
VA Deutsche Bank Spears/Lifers Trust | |||||||||||
Richmond VA Redevelopment & Housing Authority, | |||||||||||
Series 2011, AMT, GTY AGMT: Deutsche Bank AG 0.280% 10/01/29 (04/24/14) (a)(b)(c) | 18,030,000 | 18,030,000 |
Par ($) | Value ($) | ||||||||||
VA Fairfax County Economic Development Authority | |||||||||||
Szivic Family LLC, | |||||||||||
Series 2006, AMT, LOC: Branch Banking & Trust 0.200% 09/01/26 (03/06/14) (a)(b) | 1,300,000 | 1,300,000 | |||||||||
VA Fairfax County Industrial Development Authority | |||||||||||
Inova Health Sys Obl Grp, | |||||||||||
Series 2009, Pre-refunded 05/15/14, 5.500% 05/15/29 | 6,275,000 | 6,342,487 | |||||||||
Virginia Total | 25,672,487 | ||||||||||
Washington – 1.2% | |||||||||||
WA Economic Development Finance Authority | |||||||||||
RMI Investors LLC, | |||||||||||
Series 2001 F, AMT, LOC: Wells Fargo Bank N.A. 0.190% 08/01/26 (03/06/14) (a)(b) | 2,600,000 | 2,600,000 | |||||||||
WA Health Care Facilities Authority | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2002 B, SPA: JPMorgan Chase Bank N.A. 0.150% 03/01/32 (03/05/14) (a)(b) | 3,600,000 | 3,600,000 | |||||||||
WA Pierce County Economic Development Corp. | |||||||||||
Sumner Leasing LLC, | |||||||||||
Quality Stamping Project, Series 2006, AMT, LOC: FHLB 0.240% 12/01/36 (03/06/14) (a)(b) | 1,805,000 | 1,805,000 | |||||||||
WA Port of Seattle Industrial Development Corp. | |||||||||||
Crowley Marine Services, | |||||||||||
Series 2001, AMT, LOC: DNB NOR Bank ASA 0.140% 12/31/21 (03/05/14) (a)(b) | 8,700,000 | 8,700,000 | |||||||||
Washington Total | 16,705,000 | ||||||||||
Wisconsin – 1.0% | |||||||||||
WI Ashland | |||||||||||
Larson-Juhl U.S. LLC, | |||||||||||
Series 2000, AMT, LOC: Wells Fargo Bank N.A. 0.240% 07/01/20 (03/07/14) (a)(b) | 2,220,000 | 2,220,000 |
See Accompanying Notes to Financial Statements.
10
BofA Municipal Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Bay Area Medical Center, Inc., | |||||||||||
Series 2008, LOC: BMO Harris N.A. 0.040% 02/01/38 (03/03/14) (a)(b) | 7,585,000 | 7,585,000 | |||||||||
WI Milwaukee Redevelopment Authority | |||||||||||
Helwig Carbon Products, Inc., | |||||||||||
Series 1998 A, AMT, LOC: JPMorgan Chase Bank 0.090% 11/01/28 (03/06/14) (a)(b) | 2,775,000 | 2,775,000 | |||||||||
WI Public Finance Authority | |||||||||||
Glenridge on Palmer Ranch, | |||||||||||
Series 2011 B, LOC: Bank of Scotland 0.050% 06/01/41 (03/03/14) (a)(b) | 1,570,000 | 1,570,000 | |||||||||
Wisconsin Total | 14,150,000 | ||||||||||
Wyoming – 2.1% | |||||||||||
WY Sweetwater County | |||||||||||
PacifiCorp, | |||||||||||
Series 1995, AMT, LOC: Bank of Nova Scotia 0.040% 11/01/25 (03/03/14) (a)(b) | 16,300,000 | 16,300,000 | |||||||||
WY Uinta County | |||||||||||
GTY AGMT: Chevron Corp., | |||||||||||
Series 1993, 0.030% 08/15/20 (03/03/14) (b)(d) | 12,900,000 | 12,900,000 | |||||||||
Wyoming Total | 29,200,000 | ||||||||||
Total Municipal Bonds (cost of $1,025,817,990) | 1,025,817,990 | ||||||||||
Closed-End Investment Companies – 16.4% | |||||||||||
California – 0.7% | |||||||||||
CA Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.100% 08/01/40 (03/06/14) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
California Total | 10,000,000 |
Par ($) | Value ($) | ||||||||||
Other – 15.7% | |||||||||||
Nuveen Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.120% 12/01/40 (03/06/14) (a)(b)(c) | 100,000,000 | 100,000,000 | |||||||||
Nuveen Premium Income Municipal Fund 4, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.110% 03/01/40 (03/06/14) (a)(b)(c) | 77,200,000 | 77,200,000 | |||||||||
Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.110% 12/01/40 (03/06/14) (a)(b)(c) | 38,500,000 | 38,500,000 | |||||||||
Other Total | 215,700,000 | ||||||||||
Total Closed-End Investment Companies (cost of $225,700,000) | 225,700,000 | ||||||||||
Short-Term Obligations – 9.0% | |||||||||||
Variable Rate Demand Notes – 9.0% | |||||||||||
FHLMC Multi-Family VRD Certificates | |||||||||||
0.090% 11/15/34 (03/06/14) (b)(d) | 9,831,769 | 9,831,769 | |||||||||
0.090% 02/15/35 (03/06/14) (b)(c)(d) | 9,480,024 | 9,480,024 | |||||||||
0.090% 08/15/45 (03/06/14) (b)(d) | 66,333,376 | 66,333,376 | |||||||||
0.090% 01/15/47 (03/06/14) (b)(d) | 37,167,888 | 37,167,888 | |||||||||
Variable Rate Demand Notes Total | 122,813,057 | ||||||||||
Total Short-Term Obligations (cost of $122,813,057) | 122,813,057 | ||||||||||
Total Investments – 100.2% (cost of $1,374,331,047) (f) | 1,374,331,047 | ||||||||||
Other Assets & Liabilities, Net – (0.2)% | (2,490,722 | ) | |||||||||
Net Assets – 100.0% | 1,371,840,325 |
See Accompanying Notes to Financial Statements.
11
BofA Municipal Reserves
February 28, 2014 (Unaudited)
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 February 28, 2014.
(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 February 28, 2014, these securities, which are not illiquid, amounted to $391,441,024 or 28.5% 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 February 28, 2014.
(e) Security purchased on a delayed delivery basis.
(f) Cost for federal income tax purposes is $1,374,331,047.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 1,025,817,990 | $ | — | $ | 1,025,817,990 | |||||||||||
Total Closed-End Investment Companies | — | 225,700,000 | — | 225,700,000 | |||||||||||||||
Total Short-Term Obligations | — | 122,813,057 | — | 122,813,057 | |||||||||||||||
Total Investments | $ | — | $ | 1,374,331,047 | $ | — | $ | 1,374,331,047 |
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 six months ended February 28. 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 74.8 | ||||||
Closed End Investment Companies | 16.4 | ||||||
91.2 | |||||||
Short-Term Obligations | 9.0 | ||||||
Other Assets & Liabilities, Net | (0.2 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMBAC | Ambac Assurance Corp. | ||||||
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 | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
12
Statement of Assets and Liabilities – BofA Municipal Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 1,374,331,047 | |||||||||
Cash | 63,482 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 900 | ||||||||||
Interest | 1,643,137 | ||||||||||
Expense reimbursement due from investment advisor | 28,333 | ||||||||||
Trustees' deferred compensation plan | 12,029 | ||||||||||
Prepaid expenses | 44,589 | ||||||||||
Other assets | 27,156 | ||||||||||
Total Assets | 1,376,150,673 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased on a delayed delivery basis | 4,025,360 | ||||||||||
Distributions | 8 | ||||||||||
Investment advisory fee | 107,738 | ||||||||||
Administration fee | 30,233 | ||||||||||
Pricing and bookkeeping fees | 16,772 | ||||||||||
Transfer agent fee | 10,230 | ||||||||||
Trustees' fees | 8,719 | ||||||||||
Audit fee | 27,429 | ||||||||||
Legal fee | 37,694 | ||||||||||
Custody fee | 7,633 | ||||||||||
Chief compliance officer expenses | 1,536 | ||||||||||
Trustees' deferred compensation plan | 12,029 | ||||||||||
Other liabilities | 24,967 | ||||||||||
Total Liabilities | 4,310,348 | ||||||||||
Net Assets | 1,371,840,325 | ||||||||||
Net Assets Consist of | Paid-in capital | 1,371,628,266 | |||||||||
Undistributed net investment income | 509,024 | ||||||||||
Accumulated net realized loss | (296,965 | ) | |||||||||
Net Assets | 1,371,840,325 |
See Accompanying Notes to Financial Statements.
13
Statement of Assets and Liabilities (continued) – BofA Municipal Reserves
February 28, 2014 (Unaudited)
Adviser Class Shares | Net assets | $ | 47,993,009 | ||||||||
Shares outstanding | 47,984,992 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 521,378,982 | ||||||||
Shares outstanding | 521,289,044 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 21,888,434 | ||||||||
Shares outstanding | 21,884,624 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 22,649,215 | ||||||||
Shares outstanding | 22,644,829 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 16,118,858 | ||||||||
Shares outstanding | 16,116,059 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 223,039 | ||||||||
Shares outstanding | 223,000 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 66,927 | ||||||||
Shares outstanding | 66,916 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 741,521,861 | ||||||||
Shares outstanding | 741,391,371 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
14
Statement of Operations – BofA Municipal Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 1,118,355 | |||||||||
Expenses | Investment advisory fee | 985,635 | |||||||||
Administration fee | 587,090 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 41,276 | ||||||||||
Investor Class Shares | 113 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 51,874 | ||||||||||
Daily Class Shares | 29,483 | ||||||||||
Investor Class Shares | 282 | ||||||||||
Liquidity Class Shares | 4,186 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 3,508 | ||||||||||
Trust Class Shares | 329,057 | ||||||||||
Transfer agent fee | 16,083 | ||||||||||
Pricing and bookkeeping fees | 74,940 | ||||||||||
Trustees' fees | 16,575 | ||||||||||
Custody fee | 9,931 | ||||||||||
Chief compliance officer expenses | 4,685 | ||||||||||
Other expenses | 211,717 | ||||||||||
Total Expenses | 2,366,435 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (788,735 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (51,817 | ) | |||||||||
Daily Class Shares | (70,739 | ) | |||||||||
Institutional Class Shares | (3,491 | ) | |||||||||
Investor Class Shares | (395 | ) | |||||||||
Liquidity Class Shares | (4,177 | ) | |||||||||
Trust Class Shares | (328,726 | ) | |||||||||
Net Expenses | 1,118,355 | ||||||||||
Net Investment Income | — | ||||||||||
Net realized gain on investments | 4,900 | ||||||||||
Net Increase Resulting from Operations | 4,900 |
See Accompanying Notes to Financial Statements.
15
Statement of Changes in Net Assets – BofA Municipal Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | — | 514,568 | ||||||||||||
Net realized gain on investments | 4,900 | 37,248 | |||||||||||||
Net Reimbursement by Investment Advisor | — | 35,560 | |||||||||||||
Net increase resulting from operations | 4,900 | 587,376 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | — | (19,154 | ) | ||||||||||||
Capital Class Shares | — | (800,561 | ) | ||||||||||||
Daily Class Shares | — | (11,422 | ) | ||||||||||||
Institutional Capital Shares | — | (19,697 | ) | ||||||||||||
Institutional Class Shares | — | (16,310 | ) | ||||||||||||
Investor Class | — | (90 | ) | ||||||||||||
Liquidity Class Shares | — | (2,048 | ) | ||||||||||||
Trust Class Shares | — | (227,213 | ) | ||||||||||||
Total distributions to shareholders | — | (1,096,495 | ) | ||||||||||||
Net Capital Stock Transactions | (29,933,779 | ) | (1,160,486,255 | ) | |||||||||||
Total decrease in net assets | (29,928,879 | ) | (1,160,995,374 | ) | |||||||||||
Net Assets | Beginning of period | 1,401,769,204 | 2,562,764,578 | ||||||||||||
End of period | 1,371,840,325 | 1,401,769,204 | |||||||||||||
Undistributed net investment income at end of period | 509,024 | 509,024 |
See Accompanying Notes to Financial Statements.
16
Statement of Changes in Net Assets (continued) – BofA Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 135,097,499 | 135,097,499 | 244,035,993 | 244,035,993 | |||||||||||||||
Distributions reinvested | — | — | 1,839 | 1,839 | |||||||||||||||
Redemptions | (114,624,683 | ) | (114,624,683 | ) | (266,753,426 | ) | (266,753,426 | ) | |||||||||||
Net increase (decrease) | 20,472,816 | 20,472,816 | (22,715,594 | ) | (22,715,594 | ) | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 521,407,926 | 521,407,926 | 2,080,050,275 | 2,080,050,275 | |||||||||||||||
Distributions reinvested | — | — | 326,408 | 326,408 | |||||||||||||||
Redemptions | (670,998,565 | ) | (670,998,565 | ) | (3,223,321,662 | ) | (3,223,321,662 | ) | |||||||||||
Net decrease | (149,590,639 | ) | (149,590,639 | ) | (1,142,944,979 | ) | (1,142,944,979 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 25 | 25 | 500,364 | 500,364 | |||||||||||||||
Redemptions | (3,871,970 | ) | (3,871,970 | ) | (14,891,749 | ) | (14,891,749 | ) | |||||||||||
Net decrease | (3,871,945 | ) | (3,871,945 | ) | (14,391,385 | ) | (14,391,385 | ) | |||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 1,301,047 | 1,301,047 | 35,556,026 | 35,556,026 | |||||||||||||||
Distributions reinvested | — | — | 11,804 | 11,804 | |||||||||||||||
Redemptions | (10,340,197 | ) | (10,340,197 | ) | (33,854,115 | ) | (33,854,115 | ) | |||||||||||
Net increase (decrease) | (9,039,150 | ) | (9,039,150 | ) | 1,713,715 | 1,713,715 | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 17,100,000 | 17,100,000 | 133,462,204 | 133,462,204 | |||||||||||||||
Distributions reinvested | — | — | 15,010 | 15,010 | |||||||||||||||
Redemptions | (23,072,761 | ) | (23,072,761 | ) | (200,612,463 | ) | (200,612,463 | ) | |||||||||||
Net decrease | (5,972,761 | ) | (5,972,761 | ) | (67,135,249 | ) | (67,135,249 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | — | — | 21,000 | 21,000 | |||||||||||||||
Distributions reinvested | — | — | 66 | 66 | |||||||||||||||
Redemptions | (22,711 | ) | (22,711 | ) | (14,816 | ) | (14,816 | ) | |||||||||||
Net increase (decrease) | (22,711 | ) | (22,711 | ) | 6,250 | 6,250 | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | — | — | 200,000 | 200,000 | |||||||||||||||
Distributions reinvested | — | — | 2,048 | 2,048 | |||||||||||||||
Redemptions | (5,495,003 | ) | (5,495,003 | ) | (1,741,782 | ) | (1,741,782 | ) | |||||||||||
Net decrease | (5,495,003 | ) | (5,495,003 | ) | (1,539,734 | ) | (1,539,734 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 448,241,268 | 448,241,268 | 963,503,552 | 963,503,552 | |||||||||||||||
Redemptions | (324,655,654 | ) | (324,655,654 | ) | (876,982,831 | ) | (876,982,831 | ) | |||||||||||
Net increase | 123,585,614 | 123,585,614 | 86,520,721 | 86,520,721 |
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | (d) | — | (d) | 0.0001 | 0.0100 | |||||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | 0.0001 | 0.0100 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (0.0001 | ) | (0.0100 | ) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.04 | %(h) | 0.00 | %(i) | 0.00 | % | 0.00 | %(i) | 1.00 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.17 | %(j) | 0.22 | %(k) | 0.29 | %(k) | 0.34 | %(k) | 0.39 | %(k) | 0.48 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.37 | %(j) | 0.31 | % | 0.23 | % | 0.18 | % | 0.13 | % | 0.05 | % | |||||||||||||||
Net investment income | — | — | (k) | — | %(i)(k) | — | %(i)(k) | 0.01 | %(k) | 1.06 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 47,993 | $ | 27,518 | $ | 50,243 | $ | 168,505 | $ | 329,108 | $ | 701,879 |
(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 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) Not annualized.
(h) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(i) Rounds to less than 0.01%.
(j) Annualized.
(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 Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | 0.001 | 0.001 | 0.0019 | 0.0125 | ||||||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | 0.001 | 0.001 | 0.0019 | 0.0125 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.0019 | ) | (0.0125 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.07 | %(h) | 0.09 | % | 0.14 | % | 0.19 | % | 1.26 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.17 | %(i) | 0.20 | %(j) | 0.20 | %(j) | 0.20 | %(j) | 0.20 | %(j) | 0.23 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.12 | %(i) | 0.08 | % | 0.07 | % | 0.07 | % | 0.06 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.04 | %(j) | 0.09 | %(j) | 0.14 | %(j) | 0.18 | %(j) | 1.15 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 521,379 | $ | 670,991 | $ | 1,814,346 | $ | 2,825,365 | $ | 3,619,465 | $ | 4,655,880 |
(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 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) Not annualized.
(h) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(i) Annualized.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Daily Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | (d) | — | (d) | — | 0.0071 | |||||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0071 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | — | (0.0071 | ) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.04 | %(h) | 0.00 | %(i) | 0.00 | %(i) | 0.00 | % | 0.71 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.17 | %(j) | 0.23 | %(k) | 0.29 | %(k) | 0.35 | %(k) | 0.39 | %(k) | 0.78 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.72 | %(j) | 0.65 | % | 0.58 | % | 0.52 | % | 0.47 | % | 0.10 | % | |||||||||||||||
Net investment income | — | — | (k) | — | %(i)(k) | — | %(i)(k) | — | (k) | 0.78 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 21,888 | $ | 25,761 | $ | 40,160 | $ | 88,455 | $ | 452,671 | $ | 1,347,281 |
(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 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) Not annualized.
(h) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
20
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Capital Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (e) | 0.001 | 0.001 | 0.0019 | 0.0125 | ||||||||||||||||||||
Net realized gain on investments | — | (e) | — | (e) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | 0.001 | 0.001 | 0.0019 | 0.0125 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (e) | (0.001 | ) | (0.001 | ) | (0.0019 | ) | (0.0125 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.07 | %(i) | 0.09 | % | 0.14 | % | 0.19 | % | 1.26 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.17 | %(j) | 0.19 | %(k)(l) | 0.20 | %(k) | 0.20 | %(k) | 0.20 | %(k) | 0.23 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.12 | %(j) | 0.09 | % | 0.07 | % | 0.07 | % | 0.06 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.03 | %(k) | 0.09 | %(k) | 0.14 | %(k) | 0.19 | %(k) | 1.24 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 22,649 | $ | 31,689 | $ | 29,978 | $ | 21,696 | $ | 25,943 | $ | 36,380 |
(a) On October 1, 2011, Class Z shares were converted to 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 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) 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) Not annualized.
(i) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
(l) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
See Accompanying Notes to Financial Statements.
21
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | 0.001 | 0.001 | 0.0015 | 0.0121 | ||||||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | 0.001 | 0.001 | 0.0015 | 0.0121 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.0015 | ) | (0.0121 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.05 | %(h) | 0.05 | % | 0.10 | % | 0.15 | % | 1.22 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.17 | %(i) | 0.22 | %(j) | 0.24 | %(j) | 0.24 | %(j) | 0.24 | %(j) | 0.27 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.16 | %(i) | 0.10 | % | 0.07 | % | 0.07 | % | 0.06 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.02 | %(j) | 0.05 | %(j) | 0.10 | %(j) | 0.15 | %(j) | 1.12 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 16,119 | $ | 22,092 | $ | 89,248 | $ | 159,867 | $ | 328,101 | $ | 1,123,450 |
(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 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) Not annualized.
(h) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(i) Annualized.
(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 Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (d) | 0.0090 | ||||||||||||||||||||
Net realized gain on investments | — | (e) | — | (e) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | — | — | (d) | 0.0090 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (e) | — | — | — | (d) | (0.0090 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.04 | %(i) | 0.00 | % | 0.00 | % | 0.00 | %(j) | 0.91 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.17 | %(k) | 0.23 | %(l) | 0.29 | %(l) | 0.34 | %(l) | 0.39 | %(l) | 0.58 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.47 | %(k) | 0.40 | % | 0.33 | % | 0.28 | % | 0.22 | % | 0.05 | % | |||||||||||||||
Net investment income | — | — | (l) | — | (l) | — | (l) | — | %(j)(l) | 0.88 | %(l) | ||||||||||||||||
Net assets, end of period (000s) | $ | 223 | $ | 246 | $ | 240 | $ | 218 | $ | 245 | $ | 53,818 |
(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) 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) Not annualized.
(i) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(j) Rounds to less than 0.01%.
(k) Annualized.
(l) 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 date for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | (d) | — | (d) | 0.0004 | 0.0110 | |||||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | 0.0004 | 0.0110 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | (0.0004 | ) | (0.0110 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.04 | %(h) | 0.00 | %(i) | 0.01 | % | 0.04 | % | 1.10 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.18 | %(j) | 0.23 | %(k) | 0.29 | %(k) | 0.33 | %(k) | 0.34 | %(k) | 0.38 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.36 | %(j) | 0.30 | % | 0.23 | % | 0.19 | % | 0.17 | % | 0.15 | % | |||||||||||||||
Net investment income | — | — | (k) | — | %(i)(k) | 0.01 | %(k) | 0.06 | %(k) | 1.11 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 67 | $ | 5,563 | $ | 7,104 | $ | 8,184 | $ | 12,882 | $ | 167,085 |
(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 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) Not annualized.
(h) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | (d) | — | (d) | 0.0009 | 0.0115 | |||||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | 0.0009 | 0.0115 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | (0.0009 | ) | (0.0115 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.04 | %(h) | 0.01 | % | 0.05 | % | 0.09 | % | 1.15 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.17 | %(i) | 0.22 | %(j) | 0.28 | %(j) | 0.29 | %(j) | 0.30 | %(j) | 0.33 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.22 | %(i) | 0.16 | % | 0.09 | % | 0.08 | % | 0.06 | % | 0.05 | % | |||||||||||||||
Net investment income | — | — | (j) | 0.01 | %(j) | 0.05 | %(j) | 0.09 | %(j) | 1.09 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 741,522 | $ | 617,909 | $ | 531,446 | $ | 551,600 | $ | 351,866 | $ | 456,691 |
(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 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) Not annualized.
(h) Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement had an impact of less than 0.01% on the Fund's total return.
(i) Annualized.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
25
Notes to Financial Statements – BofA Municipal Reserves
February 28, 2014 (Unaudited)
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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule
being 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 upon the specific identification method for both financial statement and federal income tax purposes.
26
BofA Municipal Reserves, February 28, 2014 (Unaudited)
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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
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 year ended August 31, 2013 was as follows:
Distributions paid from | |||||||
Tax-Exempt Income | $ | 776,314 | |||||
Ordinary Income* | 320,181 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
27
BofA Municipal Reserves, February 28, 2014 (Unaudited)
As of August 31, 2013, the Fund had pre-Effective Date capital loss carry forwards which, if not used, will expire as follows:
Year of Expiration | Capital Loss Carry Forwards | ||||||
2017 | $ | 226,472 |
As of August 31, 2013, the Fund had post-Act capital losses as follows:
Short-Term Losses | |||||||
$ | 75,393 |
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 50 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 (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly investment advisory fee, calculated based on the combined average daily net assets of the Fund and the
other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
28
BofA Municipal Reserves, February 28, 2014 (Unaudited)
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor 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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Daily Class, Investor Class and Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act permits the Fund to compensate and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial
intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class, Daily Class, Investor Class and Liquidity Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | 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 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
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 Shareholder Servicing Plan fees through December 31, 2014 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such payments and/or reimbursements 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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration
29
BofA Municipal Reserves, February 28, 2014 (Unaudited)
services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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
The Advisor 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, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/2014 | |||||||||||||||
$ | 1,634,582 | $ | 2,382,610 | $ | 3,128,637 | $ | 7,145,829 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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 Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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.
30
BofA Municipal Reserves, February 28, 2014 (Unaudited)
Note 5. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 6. Shareholder Concentration
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 7. Significant Risks and Contingencies
The Fund's risks include, but are not limited to the following:
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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund
reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
Legal Proceedings
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
31
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
32
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA Municipal Reserves, the Board noted that the Fund's Contractual Management Fee Rate, Actual Management Fee Rate and total expense ratio were each above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
33
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In particular, in considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by
BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
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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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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 Municipal Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-MNR-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 6 | ||||||
Statement of Operations | 8 | ||||||
Statement of Changes in Net Assets | 9 | ||||||
Financial Highlights | 11 | ||||||
Notes to Financial Statements | 15 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 21 | ||||||
Important Information About This Report | 25 |
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 (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,000.00 | 1,024.05 | 0.74 | 0.75 | 0.15 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.05 | 0.74 | 0.75 | 0.15 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.05 | 0.74 | 0.75 | 0.15 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.10 | 0.69 | 0.70 | 0.14 | (a) |
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 365.
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.
(a) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares,fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
1
Investment Portfolio – BofA New York Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds – 93.6% | |||||||||||
Par ($) | Value ($) | ||||||||||
New Jersey – 3.0% | |||||||||||
NJ Economic Development Authority | |||||||||||
Series 2012, AMT, | |||||||||||
LOC: BNP Paribas 0.100% 03/07/14 | 9,000,000 | 9,000,000 | |||||||||
New Jersey Total | 9,000,000 | ||||||||||
New York – 76.7% | |||||||||||
NY Albany Industrial Development Agency | |||||||||||
Albany College of Pharmacy, | |||||||||||
Series 2004 B, LOC: TD Bank N.A. 0.040% 12/01/34 (03/06/14) (a)(b) | 6,620,000 | 6,620,000 | |||||||||
NY Amherst Development Corp. | |||||||||||
Asbury Pointe, Inc., | |||||||||||
Series 2011 A, LOC: M&T Bank 0.050% 02/01/35 (03/06/14) (a)(b) | 3,810,000 | 3,810,000 | |||||||||
NY Brewster Central School District | |||||||||||
Series 2014, | |||||||||||
Insured: State Aid Withholding 1.250% 01/30/15 | 607,419 | 611,578 | |||||||||
NY Bronxville Union Free School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 09/19/14 | 4,100,000 | 4,116,519 | |||||||||
NY Cheektowaga Central School District | |||||||||||
Series 2014, | |||||||||||
Insured: State Aid Withholding 3.000% 12/01/14 (c) | 1,330,000 | 1,357,478 | |||||||||
NY City Industrial Development Agency | |||||||||||
Jamaica First Parking LLC, | |||||||||||
Series 2001, LOC: TD Bank N.A. 0.040% 03/01/31 (03/06/14) (a)(b) | 3,710,000 | 3,710,000 | |||||||||
NY Clarence Central School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 07/17/14 | 1,387,500 | 1,390,214 |
Par ($) | Value ($) | ||||||||||
NY Clipper Tax-Exempt Certificate Trust | |||||||||||
New York Dormitory Authority, | |||||||||||
Series 2007, LIQ FAC: State Street Bank & Trust Co. 0.060% 11/15/26 (03/06/14) (a)(b) | 15,125,000 | 15,125,000 | |||||||||
NY Connetquot Central School District of Islip | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 0.500% 09/04/14 | 2,700,000 | 2,703,306 | |||||||||
NY County of Onondaga | |||||||||||
Syracuse University, | |||||||||||
Series 2010 A, LOC: Wells Fargo Bank N.A. 0.020% 12/01/29 (03/05/14) (a)(b) | 3,700,000 | 3,700,000 | |||||||||
NY County of Sullivan | |||||||||||
Series 2014, | |||||||||||
1.000% 03/06/15 (c) | 7,350,000 | 7,403,508 | |||||||||
NY County of Ulster | |||||||||||
Series 2013 A, | |||||||||||
1.000% 11/14/14 | 1,224,500 | 1,229,925 | |||||||||
NY Dormitory Authority | |||||||||||
Catholic Health System, | |||||||||||
Series 2008, LOC: HSBC Bank USA N.A. 0.040% 07/01/34 (03/06/14) (a)(b) | 7,155,000 | 7,155,000 | |||||||||
Pratt Institute, | |||||||||||
Series 2009 B, LOC: TD Bank N.A. 0.110% 07/01/34 (03/06/14) (a)(b) | 5,810,000 | 5,810,000 | |||||||||
Wanger College, | |||||||||||
Series 1998, LOC: JPMorgan Chase Bank 0.030% 07/01/28 (03/05/14) (a)(b) | 4,200,000 | 4,200,000 | |||||||||
NY Erie County Industrial Development Agency | |||||||||||
Series 2009 A, | |||||||||||
Insured: State Aid Withholding 5.000% 05/01/14 | 1,025,000 | 1,033,278 | |||||||||
Series 2012, | |||||||||||
Insured: State Aid Withholding LIQ FAC: Deutsche Bank A.G. 0.050% 05/01/31 (03/06/14) (a)(b)(d) | 2,735,000 | 2,735,000 |
See Accompanying Notes to Financial Statements.
2
BofA New York Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY Greene County | |||||||||||
Series 2013, | |||||||||||
1.000% 03/28/14 | 10,000,000 | 10,004,638 | |||||||||
NY Honeoye Falls-Lima Central School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 06/18/14 | 6,468,068 | 6,481,917 | |||||||||
NY Housing Finance Agency | |||||||||||
L&M 93rd Street LLC, | |||||||||||
250 West 93rd St., Series 2005 A, AMT, LOC: Landesbank Hessen-Thüringen: 0.070% 11/01/38 (03/05/14) (a)(b) | 5,650,000 | 5,650,000 | |||||||||
Midtown West B LLC, | |||||||||||
505 West 37th St. Series 2009 A, LOC: Landesbank Hessen-Thüringen: 0.040% 05/01/42 (03/03/14) (a)(b) | 10,500,000 | 10,500,000 | |||||||||
NY JPMorgan Chase PUTTERs/DRIVERs Trust | |||||||||||
New York State Thruway Authority, | |||||||||||
Series 2009 3600Z, LIQ FAC: JPMorgan Chase Bank 0.150% 01/01/16 (03/06/14) (a)(b)(d) | 9,245,000 | 9,245,000 | |||||||||
NY Livingston County Industrial Development Agency | |||||||||||
Red Jacket/Nicholas, | |||||||||||
Series 2007 A, LOC: HSBC Bank USA N.A. 0.040% 07/01/19 (03/06/14) (a)(b) | 1,422,000 | 1,422,000 | |||||||||
NY Monroe County Industrial Development Agency | |||||||||||
Nazareth College of Rochester, | |||||||||||
Series 2008, LOC: JPMorgan Chase Bank 0.040% 04/01/38 (03/05/14) (a)(b) | 1,850,000 | 1,850,000 | |||||||||
St. Ann's Home for the Aged, | |||||||||||
Series 2000, LOC: HSBC Bank USA N.A. 0.060% 07/01/30 (03/05/14) (a)(b) | 6,625,000 | 6,625,000 |
Par ($) | Value ($) | ||||||||||
NY Mortgage Agency | |||||||||||
Series 2006 139, AMT, | |||||||||||
SPA: JPMorgan Chase Bank 0.040% 10/01/37 (03/03/14) (a)(b) | 2,180,000 | 2,180,000 | |||||||||
Series 2014, | |||||||||||
0.185% 10/01/14 (c) | 2,935,000 | 2,935,000 | |||||||||
NY Nassau Health Care Corp. | |||||||||||
Series 2009 C2, | |||||||||||
LOC: Wells Fargo Bank N.A. 0.090% 08/01/29 (04/07/14) (a)(b) | 5,365,000 | 5,365,000 | |||||||||
NY New York City Housing Development Corp. | |||||||||||
RBNB 20 Owner LLC, | |||||||||||
Series 2006 A, LOC: Landesbank Hessen-Thüringen 0.050% 06/01/39 (03/05/14) (a)(b) | 1,795,000 | 1,795,000 | |||||||||
RBNB Wall Street Owner, | |||||||||||
Series 2005 A, LOC: Landesbank Hessen-Thüringen 0.050% 12/01/36 (03/05/14) (a)(b) | 6,500,000 | 6,500,000 | |||||||||
NY New York City Transitional Finance Authority Future Tax Secured Revenue | |||||||||||
Series 2002 1, | |||||||||||
LIQ FAC: Landesbank Hessen-Thüringen 0.060% 11/01/22 (03/05/14) (a)(b) | 1,340,000 | 1,340,000 | |||||||||
NY New York City | |||||||||||
Series 1995 F-4, | |||||||||||
LOC: Landesbank Hessen-Thüringen 0.100% 02/15/20 (03/05/14) (a)(b) | 2,100,000 | 2,100,000 | |||||||||
NY Oneida County Industrial Development Agency | |||||||||||
Champion Home Builders Co., | |||||||||||
Series 1999, AMT, LOC: Wells Fargo Bank N.A. 0.090% 06/01/29 (03/06/14) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Economic Development Growth Enterprises, | |||||||||||
Series 2001, AMT, LOC: Bank of New York 0.080% 06/01/26 (03/06/14) (a)(b) | 2,185,000 | 2,185,000 |
See Accompanying Notes to Financial Statements.
3
BofA New York Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY Putnam County Industrial Development Agency | |||||||||||
United Cerebral Palsy of Putnam, | |||||||||||
Series 2005 B, LOC: TD Bank N.A. 0.040% 12/01/30 (03/06/14) (a)(b) | 3,300,000 | 3,300,000 | |||||||||
NY RIB Floater Trust Various States | |||||||||||
New York City Municipal Water Finance Authority | |||||||||||
Series 2013, LIQ FAC: Barclays Bank PLC 0.040% 06/15/44 (03/06/14) (a)(b)(d) | 2,000,000 | 2,000,000 | |||||||||
NY Riverhead Industrial Development Agency | |||||||||||
Series 2007, | |||||||||||
LOC: M&T Bank 0.060% 07/01/32 (03/06/14) (a)(b) | 9,705,000 | 9,705,000 | |||||||||
NY Rockville Centre Union Free School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 06/26/14 | 7,500,000 | 7,519,279 | |||||||||
NY Saratoga County Industrial Development Agency | |||||||||||
Saratoga Hospital, | |||||||||||
Series 2007 A, LOC: HSBC Bank PLC 0.040% 12/01/32 (03/06/14) (a)(b) | 10,680,000 | 10,680,000 | |||||||||
NY Seneca Falls Central School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 07/23/14 | 9,345,000 | 9,365,167 | |||||||||
NY State Dormitory Authority | |||||||||||
Northern Westchester Hospital, | |||||||||||
Series 2009, LOC: TD Bank N.A. 0.030% 11/01/34 (03/06/14) (a)(b) | 2,830,000 | 2,830,000 | |||||||||
NY Town of Southampton | |||||||||||
Series 2013, | |||||||||||
2.000% 09/01/14 | 1,000,000 | 1,008,702 | |||||||||
NY Town of Webster | |||||||||||
Series 2013, | |||||||||||
1.000% 10/01/14 | 5,038,700 | 5,058,399 | |||||||||
NY Town of West Seneca | |||||||||||
Series 2014, | |||||||||||
1.000% 08/01/14 | 2,500,000 | 2,507,026 |
Par ($) | Value ($) | ||||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2000, | |||||||||||
SPA: Lloyds TSB Bank PLC 0.200% 01/01/19 (03/05/14) (a)(b) | 9,270,000 | 9,270,000 | |||||||||
Series 2005 B-2A, | |||||||||||
Insured: Government of Authority, LOC: California Public Employees Retirement System 0.030% 01/01/32 (03/03/14) (a)(b) | 5,790,000 | 5,790,000 | |||||||||
NY Wells Fargo Stage Trust | |||||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2008, Insured: Government of Authority LIQ FAC: Wells Fargo & Company 0.070% 11/15/37 (03/06/14) (a)(b)(d) | 6,110,000 | 6,110,000 | |||||||||
NY Westchester County Industrial Development Agency | |||||||||||
Community Housing Innovations, | |||||||||||
Series 2001, LOC: M&T Bank 0.120% 08/01/26 (03/06/14) (a)(b) | 3,200,000 | 3,200,000 | |||||||||
New York Total | 232,232,934 | ||||||||||
Puerto Rico – 13.5% | |||||||||||
PR Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2008 627A, | |||||||||||
GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.050% 08/01/54 (03/06/14) (a)(b)(d) | 4,248,000 | 4,248,000 | |||||||||
PR RBC Municipal Products, Inc. Trust | |||||||||||
Series 2013 E-46, | |||||||||||
LOC: Royal Bank of Canada 0.140% 09/01/15 (03/06/14) (a)(b)(d) | 10,500,000 | 10,500,000 | |||||||||
PR RIB Floater Trust | |||||||||||
Series 2013 8WE, | |||||||||||
LOC: Barclays Bank PLC 0.130% 09/30/14 (03/06/14) (a)(b)(d) | 26,200,000 | 26,200,000 | |||||||||
Puerto Rico Total | 40,948,000 |
See Accompanying Notes to Financial Statements.
4
BofA New York Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Utah – 0.4% | |||||||||||
UT Park City | |||||||||||
Ctr of Excellence Pptys, | |||||||||||
Series 2007, LOC: Wells Fargo Bank N.A. 0.040% 04/01/27 (03/06/14) (a)(b) | 1,100,000 | 1,100,000 | |||||||||
Utah Total | 1,100,000 | ||||||||||
Total Municipal Bonds (cost of $283,280,934) | 283,280,934 | ||||||||||
Closed-End Investment Companies – 10.2% | |||||||||||
New York – 10.2% | |||||||||||
NY Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2013, | |||||||||||
LIQ FAC: Citibank N.A.: 0.090% 08/01/40 (03/06/14) (a)(b)(d) | 16,800,000 | 16,800,000 | |||||||||
0.090% 12/01/40 (03/06/14) (a)(b)(d) | 2,000,000 | 2,000,000 | |||||||||
NY Nuveen Performance Plus Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Deutsche Bank AG 0.120% 03/01/40 (03/06/14) (a)(b)(d) | 12,200,000 | 12,200,000 | |||||||||
New York Total | 31,000,000 | ||||||||||
Total Closed-End Investment Companies (cost of $31,000,000) | 31,000,000 | ||||||||||
Total Investments – 103.8% (cost of $314,280,934) (e) | 314,280,934 | ||||||||||
Other Assets & Liabilities, Net – (3.8)% | (11,444,099 | ) | |||||||||
Net Assets – 100.0% | 302,836,835 |
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 February 28, 2014.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(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 February 28, 2014, these securities, which are not illiquid, amounted to $92,038,000 or 30.4% of net assets for the Fund.
(e) Cost for federal income tax purposes is $314,280,934.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 283,280,934 | $ | — | $ | 283,280,934 | |||||||||||
Total Closed-End Investment Companies | — | 31,000,000 | — | 31,000,000 | |||||||||||||||
Total Investments | $ | — | $ | 314,280,934 | $ | — | $ | 314,280,934 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 93.6 | ||||||
Closed-End Investment Companies | 10.2 | ||||||
103.8 | |||||||
Other Assets & Liabilities, Net | (3.8 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DRIVERs | Derivative Inverse Tax-Exempt Receipts | ||||||
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.
5
Statement of Assets and Liabilities – BofA New York Tax-Exempt Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 314,280,934 | |||||||||
Cash | 15,817 | ||||||||||
Receivable for: | |||||||||||
Interest | 319,842 | ||||||||||
Expense reimbursement due from investment advisor | 18,700 | ||||||||||
Trustees' deferred compensation plan | 404 | ||||||||||
Prepaid expenses | 8,917 | ||||||||||
Total Assets | 314,644,614 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased on a delayed delivery basis | 11,695,986 | ||||||||||
Distributions | 23 | ||||||||||
Investment advisory fee | 17,927 | ||||||||||
Administration fee | 2,762 | ||||||||||
Pricing and bookkeeping fees | 8,495 | ||||||||||
Transfer agent fee | 4,376 | ||||||||||
Trustees' fees | 6,687 | ||||||||||
Custody fee | 2,275 | ||||||||||
Chief compliance officer expenses | 1,242 | ||||||||||
Trustees' deferred compensation plan | 404 | ||||||||||
Other liabilities | 67,602 | ||||||||||
Total Liabilities | 11,807,779 | ||||||||||
Net Assets | 302,836,835 | ||||||||||
Net Assets Consist of | Paid-in capital | 302,799,979 | |||||||||
Undistributed net investment income | 23,282 | ||||||||||
Accumulated net realized gain | 13,574 | ||||||||||
Net Assets | 302,836,835 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities (continued) – BofA New York Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Capital Class Shares | Net assets | $ | 75,220,792 | ||||||||
Shares outstanding | 75,200,728 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 477,109 | ||||||||
Shares outstanding | 476,983 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 1,144,545 | ||||||||
Shares outstanding | 1,144,242 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 225,994,389 | ||||||||
Shares outstanding | 225,934,079 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
7
Statement of Operations – BofA New York Tax-Exempt Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 218,542 | |||||||||
Expenses | Investment advisory fee | 225,991 | |||||||||
Administration fee | 109,062 | ||||||||||
Distribution fee: | |||||||||||
Investor Class Shares | 629 | ||||||||||
Service fee: | |||||||||||
Investor Class Shares | 1,572 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 95 | ||||||||||
Trust Class Shares | 107,343 | ||||||||||
Transfer agent fee | 2,860 | ||||||||||
Pricing and bookkeeping fees | 43,847 | ||||||||||
Trustees' fees | 13,796 | ||||||||||
Custody fee | 4,235 | ||||||||||
Chief compliance officer expenses | 3,841 | ||||||||||
Other expenses | 111,698 | ||||||||||
Total Expenses | 624,969 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (296,829 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Institutional Class Shares | (95 | ) | |||||||||
Investor Class Shares | (2,200 | ) | |||||||||
Trust Class Shares | (107,303 | ) | |||||||||
Net Expenses | 218,542 | ||||||||||
Net Investment Income | — | ||||||||||
Net Increase Resulting from Operations | — |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets – BofA New York Tax-Exempt Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | — | 23,307 | ||||||||||||
Net realized gain on investments | — | 13,574 | |||||||||||||
Net increase resulting from operations | — | 36,881 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Capital Class Shares | — | (33,087 | ) | ||||||||||||
Institutional Class Shares | — | (88 | ) | ||||||||||||
Investor Class Shares | — | (125 | ) | ||||||||||||
Trust Class Shares | — | (23,382 | ) | ||||||||||||
Total distributions to shareholders | — | (56,682 | ) | ||||||||||||
Net Capital Stock Transactions | (8,728,350 | ) | (50,953,374 | ) | |||||||||||
Total decrease in net assets | (8,728,350 | ) | (50,973,175 | ) | |||||||||||
Net Assets | Beginning of period | 311,565,185 | 362,538,360 | ||||||||||||
End of period | 302,836,835 | 311,565,185 | |||||||||||||
Undistributed net investment income at end of period | 23,282 | 23,282 |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA New York Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 60,563,857 | 60,563,857 | 228,167,446 | 228,167,446 | |||||||||||||||
Distributions reinvested | — | — | 1 | 1 | |||||||||||||||
Redemptions | (81,631,144 | ) | (81,631,144 | ) | (233,026,009 | ) | (233,026,008 | ) | |||||||||||
Net decrease | (21,067,287 | ) | (21,067,287 | ) | (4,858,562 | ) | (4,858,561 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | — | — | 10,000 | 10,000 | |||||||||||||||
Distributions reinvested | — | — | 88 | 88 | |||||||||||||||
Net increase | — | — | 10,088 | 10,088 | |||||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 1,160,804 | 1,160,804 | 7,780,253 | 7,780,253 | |||||||||||||||
Distributions reinvested | — | — | 17 | 17 | |||||||||||||||
Redemptions | (1,463,700 | ) | (1,463,700 | ) | (7,995,922 | ) | (7,995,922 | ) | |||||||||||
Net decrease | (302,896 | ) | (302,896 | ) | (215,652 | ) | (215,652 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 182,982,897 | 182,982,897 | 378,728,778 | 378,728,778 | |||||||||||||||
Distributions reinvested | — | — | 242 | 242 | |||||||||||||||
Redemptions | (170,341,064 | ) | (170,341,064 | ) | (424,618,269 | ) | (424,618,269 | ) | |||||||||||
Net increase (decrease) | 12,641,833 | 12,641,833 | (45,889,249 | ) | (45,889,249 | ) |
See Accompanying Notes to Financial Statements.
10
Financial Highlights – BofA New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (e) | 0.001 | 0.001 | 0.0012 | 0.0104 | ||||||||||||||||||||
Net realized gain on investments | — | — | (e) | — | (e) | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | — | (e) | 0.001 | 0.001 | 0.0012 | 0.0104 | ||||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (e) | (0.001 | ) | (0.001 | ) | (0.0012 | ) | (0.0104 | ) | ||||||||||||||||
From net realized gains | — | — | — | (e) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | — | (e) | (0.001 | ) | (0.001 | ) | (0.0012 | ) | (0.0104 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.03 | % | 0.12 | % | 0.14 | % | 0.12 | % | 1.04 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.15 | %(i) | 0.18 | %(j) | 0.20 | %(j) | 0.20 | %(j) | 0.20 | %(j) | 0.24 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.20 | %(i) | 0.15 | % | 0.13 | % | 0.15 | % | 0.09 | % | 0.07 | % | |||||||||||||||
Net investment income | — | 0.02 | %(j) | 0.06 | %(j) | 0.14 | %(j) | 0.11 | %(j) | 1.15 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 75,221 | $ | 96,293 | $ | 101,154 | $ | 85,820 | $ | 123,141 | $ | 133,680 |
(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 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) Not annualized.
(i) Annualized.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | 0.001 | 0.001 | 0.0008 | 0.0100 | ||||||||||||||||||||
Net realized gain on investments | — | — | (d) | — | (d) | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | — | (d) | 0.001 | 0.001 | 0.0008 | 0.0100 | ||||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.0008 | ) | (0.0100 | ) | ||||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | (0.001 | ) | (0.001 | ) | (0.0008 | ) | (0.0100 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.02 | % | 0.08 | % | 0.10 | % | 0.08 | % | 1.01 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.15 | %(h) | 0.20 | %(i) | 0.24 | %(i) | 0.24 | %(i) | 0.24 | %(i) | 0.28 | %(i) | |||||||||||||||
Waiver/Reimbursement | 0.24 | %(h) | 0.18 | % | 0.13 | % | 0.15 | % | 0.09 | % | 0.07 | % | |||||||||||||||
Net investment income | — | 0.01 | %(i) | 0.03 | %(i) | 0.09 | %(i) | 0.07 | %(i) | 1.03 | %(i) | ||||||||||||||||
Net assets, end of period (000s) | $ | 477 | $ | 477 | $ | 467 | $ | 881 | $ | 95,095 | $ | 119,388 |
(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 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) Not annualized.
(h) Annualized.
(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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | — | — | — | 0.0065 | |||||||||||||||||||||
Net realized gain on investments | — | — | (e) | — | (e) | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | — | (e) | — | (e) | — | — | 0.0065 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (e) | — | (e) | — | — | (0.0065 | ) | ||||||||||||||||||
From net realized gains | — | — | — | (e) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | — | (e) | — | (e) | — | — | (0.0065 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.01 | % | 0.05 | % | 0.00 | % | 0.00 | % | 0.65 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.15 | %(i) | 0.21 | %(j) | 0.26 | %(j) | 0.31 | %(j) | 0.32 | %(j) | 0.65 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.55 | %(i) | 0.48 | % | 0.42 | % | 0.49 | % | 0.42 | % | 0.11 | % | |||||||||||||||
Net investment income | — | — | (j) | — | (j) | — | (j) | — | (j) | 0.72 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 1,145 | $ | 1,448 | $ | 1,663 | $ | 365 | $ | 21,052 | $ | 34,694 |
(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 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) Not annualized.
(i) Annualized.
(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 New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | 0.001 | — | (d) | 0.0003 | 0.0094 | ||||||||||||||||||||
Net realized gain on investments | — | — | (d) | — | (d) | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | — | (d) | 0.001 | — | (d) | 0.0003 | 0.0094 | |||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | (0.001 | ) | — | (d) | (0.0003 | ) | (0.0094 | ) | ||||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | (0.001 | ) | — | (d) | (0.0003 | ) | (0.0094 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g) | 0.01 | % | 0.05 | % | 0.05 | % | 0.03 | % | 0.95 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.14 | %(h)(i) | 0.21 | %(j) | 0.26 | %(j) | 0.29 | %(j) | 0.29 | %(j) | 0.34 | %(j) | |||||||||||||||
Waiver/Reimbursement | 0.30 | %(h) | 0.23 | % | 0.17 | % | 0.16 | % | 0.10 | % | 0.07 | % | |||||||||||||||
Net investment income | — | — | (j) | — | %(j)(k) | 0.05 | %(j) | 0.03 | %(j) | 0.93 | %(j) | ||||||||||||||||
Net assets, end of period (000s) | $ | 225,994 | $ | 213,347 | $ | 259,254 | $ | 294,169 | $ | 391,472 | $ | 645,197 |
(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 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) Not annualized.
(h) Annualized.
(i) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
(j) The benefits derived from expense reductions had an impact of less than 0.01%.
(k) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
14
Notes to Financial Statements – BofA New York Tax-Exempt Reserves
February 28, 2014 (Unaudited)
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. 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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule being 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.
15
BofA New York Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or
short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
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 year ended August 31, 2013 was as follows:
Distributions paid from
Tax-Exempt Income | $ | 50,153 | |||||
Ordinary Income* | 6,529 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
16
BofA New York Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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 50 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 (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly investment advisory fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor 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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also reimburses State Street for certain out-of-pocket expenses and charges including fees associated with pricing the securities held in the Investment Portfolio.
17
BofA New York Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, 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 and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Investor Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | Current Rate (after fee waivers) | Plan Limit | |||||||||
Investor Class Shares | 0.10 | % | 0.10 | % | |||||||
Shareholder Servicing Plan: | |||||||||||
Investor Class Shares | 0.25 | % | 0.25 | % |
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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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
The Advisor 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, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
18
BofA New York Tax-Exempt Reserves, February 28, 2014 (Unaudited)
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/2014 | |||||||||||||||
$ | 460,655 | $ | 547,553 | $ | 671,629 | $ | 1,679,837 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
Fees Paid to Officers and Trustees
All Officers of the Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 6. Shareholder Concentration
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 7. Significant Risks and Contingencies
The Fund's risks include, but are not limited to the following:
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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
19
BofA New York Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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 volatile 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, instrumentalities and 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
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
20
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
21
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual advisory fees, administration fees, actual non-management
fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. The Board noted that BofA New York Tax-Exempt Reserves' total expense ratio, Actual Management Fee Rate and Contractual Management Fee Rate were each at or below the median range of its Peer Group.
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In particular, in considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
22
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its
affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
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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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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
25
BofATM Global Capital Management
100 Federal Street
Boston, MA 02110
BofA New York Tax-Exempt Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-NYTE-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 22 | ||||||
Statement of Operations | 24 | ||||||
Statement of Changes in Net Assets | 25 | ||||||
Financial Highlights | 27 | ||||||
Notes to Financial Statements | 35 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 41 | ||||||
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 Tax-Exempt Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.25 | 0.55 | 0.55 | 0.11 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.25 | 0.55 | 0.55 | 0.11 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.25 | 0.55 | 0.55 | 0.11 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.25 | 0.55 | 0.55 | 0.11 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.25 | 0.55 | 0.55 | 0.11 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.25 | 0.55 | 0.55 | 0.11 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.25 | 0.55 | 0.55 | 0.11 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.25 | 0.55 | 0.55 | 0.11 |
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 365.
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
February 28, 2014 (Unaudited)
Municipal Bonds – 97.9% | |||||||||||
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. 0.190% 07/01/21 (03/07/14) (a)(b) | 2,150,000 | 2,150,000 | |||||||||
Alabama Total | 2,150,000 | ||||||||||
Arizona – 0.5% | |||||||||||
AZ Deutsche Bank Spears/Lifers Trust | |||||||||||
Dignity Health Obligated Group, | |||||||||||
Series 2012-1082, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.080% 03/01/29 (03/06/14) (a)(b)(c) | 12,245,000 | 12,245,000 | |||||||||
AZ Phoenix Industrial Development Authority | |||||||||||
Pilgrim Rest Foundation, Inc., | |||||||||||
Series 2005 A, LOC: JPMorgan Chase Bank 0.090% 10/01/30 (03/06/14) (a)(b) | 6,060,000 | 6,060,000 | |||||||||
AZ Tempe Industrial Development Authority | |||||||||||
Centers for Habilitation, | |||||||||||
Series 2001, LOC: Wells Fargo Bank N.A. 0.190% 12/01/21 (03/06/14) (a)(b) | 1,390,000 | 1,390,000 | |||||||||
Arizona Total | 19,695,000 | ||||||||||
Arkansas – 0.4% | |||||||||||
AR Fort Smith | |||||||||||
Mitsubishi Power System of America, | |||||||||||
Series 2010, LOC: Bank Tokyo-Mitsubishi UFJ 0.060% 10/01/40 (03/06/14) (a)(b) | 5,930,000 | 5,930,000 | |||||||||
AR Pulaski County Health Facilities Board | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2000 B, LIQ FAC: JPMorganChase Bank 0.140% 12/01/28 (03/05/14) (a)(b) | 12,900,000 | 12,900,000 | |||||||||
Arkansas Total | 18,830,000 |
Par ($) | Value ($) | ||||||||||
California – 5.5% | |||||||||||
CA Deutsche Bank Spears/Lifers Trust | |||||||||||
California State Health Facility - Dignity Health, | |||||||||||
Series 2012-1083, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG: 0.090% 03/01/28 (03/06/14) (a)(b)(c) | 13,000,000 | 13,000,000 | |||||||||
Golden State Tobacco Securitization Corp., | |||||||||||
Series 2012-1103, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG: 0.080% 06/01/35 (03/06/14) (a)(b)(c) | 10,740,000 | 10,740,000 | |||||||||
Los Angeles County Housing Authority, | |||||||||||
Series 2011-1008, GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG: 0.100% 10/01/31 (03/06/14) (a)(b)(c) | 9,595,000 | 9,595,000 | |||||||||
CA Irvine Ranch Water District | |||||||||||
Series 2011 A-1, | |||||||||||
0.040% 10/01/37 (03/06/14) (b)(d) | 5,900,000 | 5,900,000 | |||||||||
Series 2011 A-2, | |||||||||||
0.040% 10/01/37 (03/03/14) (b)(d) | 11,680,000 | 11,680,000 | |||||||||
CA Los Angeles County, Capital Asset Leasing Corp. | |||||||||||
Series A1, | |||||||||||
LOC: JPMorgan Chase Bank 0.080% 05/07/14 | 10,275,000 | 10,275,000 | |||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2011 A-1, | |||||||||||
0.050% 07/01/36 (03/06/14) (b)(d) | 13,000,000 | 13,000,000 | |||||||||
Series 2011 A-3, | |||||||||||
0.050% 07/01/36 (03/06/14) (b)(d) | 20,000,000 | 20,000,000 | |||||||||
CA RBC Municipal Products, Inc. Trust | |||||||||||
Kaiser Permanente, | |||||||||||
Series 2011 E-21, LOC: Royal Bank of Canada 0.030% 10/01/15 (03/06/14) (a)(b)(c) | 19,000,000 | 19,000,000 | |||||||||
CA San Jose Redevelopment Agency | |||||||||||
Series 1996 B, | |||||||||||
LOC: JPMorgan Chase Bank 0.150% 05/16/14 | 6,000,000 | 6,000,000 |
See Accompanying Notes to Financial Statements.
2
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CA Statewide Communities Development Authority | |||||||||||
Kaiser Permanente: | |||||||||||
Series 2009 B-1, 0.190% 03/12/14 | 7,100,000 | 7,100,000 | |||||||||
Series 2009 B-4, 0.210% 05/02/14 | 20,900,000 | 20,900,000 | |||||||||
Series K, 0.200% 04/08/14 | 8,500,000 | 8,500,000 | |||||||||
Series 09-D 0.180% 08/12/14 | 15,000,000 | 15,000,000 | |||||||||
Series K, 0.200% 06/05/14 | 7,000,000 | 7,000,000 | |||||||||
CA State | |||||||||||
Revenue Anticipation Notes, | |||||||||||
Series 2013 A2, 2.000% 06/23/14 | 41,150,000 | 41,377,238 | |||||||||
Series 2013 A1, | |||||||||||
2.000% 05/28/14 | 14,400,000 | 14,464,227 | |||||||||
California Total | 233,531,465 | ||||||||||
Colorado – 1.8% | |||||||||||
CO Clipper Tax-Exempt Certificate Trust | |||||||||||
Colorado Springs CO Utilities Revenue | |||||||||||
Series 2012 5A, LIQ FAC: State Street Bank & Trust Co. 0.030% 11/15/30 (03/06/14) (a)(b)(c) | 9,810,000 | 9,810,000 | |||||||||
CO Colorado Springs | |||||||||||
Fine Arts Center, | |||||||||||
Series 2006, LOC: Wells Fargo Bank N.A. 0.040% 07/01/21 (03/06/14) (a)(b) | 1,800,000 | 1,800,000 | |||||||||
CO Educational & Cultural Facilities Authority | |||||||||||
Daughters of Israel, Inc., | |||||||||||
National Jewish Federation, Series 2006 B-4, LOC: TD Bank N.A.: 0.030% 12/01/35 (03/03/14) (a)(b) | 7,525,000 | 7,525,000 | |||||||||
JFMC Facilities Corp., | |||||||||||
Series 2009 C-7, LOC: U.S. Bank N.A. 0.030% 03/01/39 (03/03/14) (a)(b) | 9,455,000 | 9,455,000 |
Par ($) | Value ($) | ||||||||||
National Jewish Federation: | |||||||||||
Series 2007 C-4, LOC: U.S. Bank N.A. 0.030% 06/01/37 (03/03/14) (a)(b) | 9,300,000 | 9,300,000 | |||||||||
Series 2011 F2, LOC: Northern Trust Co. 0.030% 07/01/41 (03/03/14) (a)(b) | 7,540,000 | 7,540,000 | |||||||||
CO Fitzsimons Redevelopment Authority | |||||||||||
University Physicians Inc, | |||||||||||
Series 2002, LOC: U.S. Bank N.A. 0.030% 01/01/25 (03/06/14) (a)(b) | 10,620,000 | 10,620,000 | |||||||||
CO Health Facilities Authority | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2004 B-6, SPA: JPMorgan Chase Bank 0.150% 03/01/44 (03/05/14) (a)(b) | 13,400,000 | 13,400,000 | |||||||||
Crossroads at Delta, | |||||||||||
Series 2004 A, LOC: U.S. Bank N.A. 0.030% 11/01/28 (03/06/14) (a)(b) | 3,800,000 | 3,800,000 | |||||||||
CO Jefferson County | |||||||||||
Rocky Mountain Butterfly Consortium, | |||||||||||
Series 1998, LOC: Wells Fargo Bank N.A. 0.140% 06/01/28 (03/06/14) (a)(b) | 1,335,000 | 1,335,000 | |||||||||
Colorado Total | 74,585,000 | ||||||||||
Connecticut – 1.9% | |||||||||||
CT Branford | |||||||||||
Series 2013, | |||||||||||
1.000% 08/14/14 | 2,000,000 | 2,007,260 | |||||||||
CT Enfield | |||||||||||
Series 2013, | |||||||||||
1.000% 08/12/14 | 9,300,000 | 9,332,096 | |||||||||
CT Fairfield | |||||||||||
Series 2013 | |||||||||||
2.000% 01/01/15 | 1,710,000 | 1,735,706 |
See Accompanying Notes to Financial Statements.
3
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CT Greenwich | |||||||||||
Series 2014 | |||||||||||
2.000% 01/15/15 | 5,640,000 | 5,731,302 | |||||||||
CT Health & Educational Facilities Authority | |||||||||||
Lawrence & Mem Corp. Oblig., | |||||||||||
Series 2013 H, LOC: TD Bank N.A. 0.030% 07/01/34 (03/05/14) (a)(b) | 1,900,000 | 1,900,000 | |||||||||
Westover School, | |||||||||||
Series 2007 B, LOC: TD Bank N.A. 0.030% 07/01/30 (03/06/14) (a)(b) | 1,130,000 | 1,130,000 | |||||||||
CT Housing Finance Authority | |||||||||||
Series 2011 C1, | |||||||||||
SPA: Barclays Bank PLC 0.030% 05/15/35 (03/06/14) (a)(b) | 405,000 | 405,000 | |||||||||
CT Manchester | |||||||||||
Series 2013, | |||||||||||
1.500% 07/03/14 | 8,300,000 | 8,336,292 | |||||||||
CT Oxford | |||||||||||
Series 2013, | |||||||||||
0.750% 07/24/14 | 5,677,000 | 5,689,144 | |||||||||
CT Ridgefield | |||||||||||
Series 2013 | |||||||||||
1.000% 12/16/14 | 5,000,000 | 5,032,875 | |||||||||
CT Shelton | |||||||||||
Series 2013, | |||||||||||
1.000% 08/01/14 | 4,690,000 | 4,705,492 | |||||||||
CT South Windsor | |||||||||||
Series 2014: | |||||||||||
1.000% 02/10/15 | 11,700,000 | 11,792,975 | |||||||||
1.000% 02/18/15 | 6,320,000 | 6,371,998 | |||||||||
CT Special Tax Revenue | |||||||||||
Series 2013, | |||||||||||
LIQ FAC: Citibank N.A. 0.030% 01/01/21 (03/06/14) (a)(b)(c) | 8,000,000 | 8,000,000 | |||||||||
CT Waterford | |||||||||||
Series 2013, | |||||||||||
0.750% 03/17/14 | 10,000,000 | 10,002,492 | |||||||||
Connecticut Total | 82,172,632 |
Par ($) | Value ($) | ||||||||||
Delaware – 1.0% | |||||||||||
DE BB&T Municipal Trust | |||||||||||
Series 2008-1007, | |||||||||||
LOC: Branch Banking & Trust 0.130% 04/10/22 (03/06/14) (a)(b)(c) | 18,140,000 | 18,140,000 | |||||||||
Series 2008-1033, | |||||||||||
LOC: Branch Banking & Trust 0.130% 06/01/24 (03/06/14) (a)(b) | 6,650,000 | 6,650,000 | |||||||||
DE New Castle County | |||||||||||
CHF-Delaware LLC, | |||||||||||
University Courtyard Apartments, Series 2005, LOC: PNC Bank N.A. 0.050% 08/01/31 (03/06/14) (a)(b) | 16,355,000 | 16,355,000 | |||||||||
Delaware Total | 41,145,000 | ||||||||||
District of Columbia – 1.6% | |||||||||||
DC District of Columbia | |||||||||||
Series 2013 A, | |||||||||||
0.070% 12/01/14 (03/06/14) (b)(d) | 22,800,000 | 22,800,000 | |||||||||
DC JPMorgan Chase PUTTERs/DRIVERs Trust | |||||||||||
Series 2013, | |||||||||||
LOC: JPMorgan Chase Bank N.A. 0.100% 11/19/14 (03/06/14) (a)(b)(c) | 40,000,000 | 40,000,000 | |||||||||
DC RIB Floater Trust | |||||||||||
District of Columbia Income Tax Secured Revenue | |||||||||||
Series 2013, LIQ FAC: Barclays Bank PLC 0.050% 12/01/35 (03/06/14) (a)(b)(c) | 4,200,000 | 4,200,000 | |||||||||
District of Columbia Total | 67,000,000 | ||||||||||
Florida – 3.6% | |||||||||||
FL Broward County Health Facilities Authority | |||||||||||
Henderson Mental Health Center, | |||||||||||
Series 2004, LOC: Northern Trust Co. 0.050% 07/01/29 (03/05/14) (a)(b) | 1,200,000 | 1,200,000 |
See Accompanying Notes to Financial Statements.
4
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
FL Deutsche Bank Spears/Lifers Trust | |||||||||||
Palm Coast Florida Utility System Revenue, | |||||||||||
Series 2008-579, GTY AGMT: Deutsche Bank AG 0.090% 10/01/24 (03/06/14) (a)(b)(c) | 5,215,000 | 5,215,000 | |||||||||
FL Eclipse Funding Trust | |||||||||||
Miami-Dade County School Board, | |||||||||||
Series 2007, LOC: U.S. Bank N.A. 0.030% 05/01/32 (03/06/14) (a)(b)(c) | 4,480,000 | 4,480,000 | |||||||||
Volusia County School Board | |||||||||||
Series 2007, LOC: U.S. Bank N.A. 0.030% 08/01/32 (03/06/14) (a)(b)(c) | 14,595,000 | 14,595,000 | |||||||||
FL Jacksonville Economic Development Commission | |||||||||||
North Florida Shipyards, Inc., | |||||||||||
Series 2010, LOC: Branch Banking & Trust 0.030% 09/01/20 (03/06/14) (a)(b) | 2,875,000 | 2,875,000 | |||||||||
FL Lakeland | |||||||||||
Florida Southern College, | |||||||||||
Series 2012 B, LOC: TD Bank N.A. 0.030% 09/01/24 (03/06/14) (a)(b) | 9,005,000 | 9,005,000 | |||||||||
FL Miami-Dade County Educational Facilities Authority | |||||||||||
University of Miami, | |||||||||||
Series 2008-2710, GTY AGMT: Wells Fargo Co., LIQ FAC: Wells Fargo Co. 0.050% 04/01/38 (03/06/14) (a)(b)(c) | 14,820,000 | 14,820,000 | |||||||||
FL Miami-Dade County Expressway Authority | |||||||||||
Series 2004 B, | |||||||||||
Pre-refunded 07/01/14, 5.000% 07/01/33 | 10,000,000 | 10,159,349 | |||||||||
FL Miami-Dade County Industrial Development Authority | |||||||||||
Dave & Mary Alper Jewish Community, | |||||||||||
Series 2002, LOC: Northern Trust Co. 0.050% 04/01/32 (03/05/14) (a)(b) | 5,695,000 | 5,695,000 |
Par ($) | Value ($) | ||||||||||
FL Orlando-Orange County Expressway Authority | |||||||||||
Series 2008 B-1, | |||||||||||
LOC: Bank of Montreal 0.030% 07/01/40 (03/06/14) (a)(b) | 21,025,000 | 21,025,000 | |||||||||
FL Palm Beach County | |||||||||||
Pine Crest Prep School, | |||||||||||
Series 2012 B, LOC: TD Bank N.A. 0.030% 06/01/38 (03/06/14) (a)(b) | 33,850,000 | 33,850,000 | |||||||||
Zoological Society of Palm Beach, | |||||||||||
Series 2001, LOC: Northern Trust Co. 0.050% 05/01/31 (03/05/14) (a)(b) | 7,150,000 | 7,150,000 | |||||||||
FL Sunshine Governmental Financing Commission | |||||||||||
SPA: JPMorgan Chase Bank: | |||||||||||
0.130% 04/09/14 | 12,000,000 | 12,000,000 | |||||||||
0.130% 08/22/14 | 11,400,000 | 11,400,000 | |||||||||
Florida Total | 153,469,349 | ||||||||||
Georgia – 2.0% | |||||||||||
GA BB&T Municipal Trust | |||||||||||
Series 2008-1014, | |||||||||||
LOC: Branch Banking & Trust 0.130% 09/01/23 (03/06/14) (a)(b)(c) | 15,435,000 | 15,435,000 | |||||||||
GA Clipper Tax-Exempt Certificate Trust | |||||||||||
Georgia State, | |||||||||||
Series 2007, Pre-refunded in U.S. Treasuries, LIQ FAC: State Street Bank & Trust Co. 0.030% 03/01/18 (03/06/14) (a)(b) | 9,995,000 | 9,995,000 | |||||||||
GA Fulton County Development Authority | |||||||||||
The Weber School, | |||||||||||
Series 2006, LOC: Branch Banking & Trust 0.030% 12/01/30 (03/06/14) (a)(b) | 3,190,000 | 3,190,000 | |||||||||
GA Main Street Natural Gas, Inc. | |||||||||||
Series 2010 A, | |||||||||||
SPA: Royal Bank of Canada 0.030% 08/01/40 (03/06/14) (a)(b) | 11,630,000 | 11,630,000 |
See Accompanying Notes to Financial Statements.
5
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
GA Municipal Electric Authority | |||||||||||
Series 2008 B, | |||||||||||
LOC: Bank of Tokyo-Mitsubishi 0.030% 01/01/48 (03/05/14) (a)(b) | 43,100,000 | 43,100,000 | |||||||||
Georgia Total | 83,350,000 | ||||||||||
Illinois – 6.6% | |||||||||||
IL Chicago Heights | |||||||||||
Chicago Heights Fitness, | |||||||||||
Series 2002 A, LOC: JPMorgan Chase Bank 0.140% 03/01/17 (03/06/14) (a)(b) | 830,000 | 830,000 | |||||||||
IL Clipper Tax-Exempt Certificate Trust | |||||||||||
Series 2013-2A, | |||||||||||
LIQ FAC: State Street Bank & Trust Co. 0.040% 11/15/25 (03/06/14) (a)(b)(c) | 7,500,000 | 7,500,000 | |||||||||
IL Deutsche Bank Spears/Lifers Trust | |||||||||||
Chicago Illinois Board of Education: | |||||||||||
Series 2007-306, GTY AGMT: Deutsche Bank AG 0.100% 12/01/25 (03/06/14) (a)(b)(c) | 5,285,000 | 5,285,000 | |||||||||
Series 2007-443, GTY AGMT: Deutsche Bank AG 0.050% 12/01/31 (03/06/14) (a)(b)(c) | 8,820,000 | 8,820,000 | |||||||||
Kane, Cook & Du Page Counties School District No. 46, | |||||||||||
Series 2007-425, GTY AGMT: Deutsche Bank AG 0.090% 01/01/23 (03/06/14) (a)(b)(c) | 11,525,000 | 11,525,000 | |||||||||
McHenry County Community Unit School | |||||||||||
District No. 200 Woodstock, Series 2007-420, GTY AGMT: Deutsche Bank AG 0.090% 01/15/26 (03/06/14) (a)(b)(c) | 27,065,000 | 27,065,000 | |||||||||
IL Development Finance Authority | |||||||||||
American Academy of Dermatology, | |||||||||||
Series 2001, LOC: JPMorgan Chase Bank 0.090% 04/01/21 (03/06/14) (a)(b) | 4,000,000 | 4,000,000 |
Par ($) | Value ($) | ||||||||||
American College of Surgeons, | |||||||||||
Series 1996, LOC: Northern Trust Co. 0.040% 08/01/26 (03/07/14) (a)(b) | 18,017,000 | 18,017,000 | |||||||||
IL Finance Authority | |||||||||||
Advocate Healthcare Network, | |||||||||||
Series 2003 C, 0.210% 11/15/22 (04/25/14) (b)(d) | 6,765,000 | 6,765,000 | |||||||||
Elmhurst College: | |||||||||||
Series 2003, LOC: BMO Harris N.A. 0.030% 03/01/33 (03/06/14) (a)(b) | 9,450,000 | 9,450,000 | |||||||||
Series 2007, LOC: BMO Harris N.A. 0.030% 02/01/42 (03/06/14) (a)(b) | 12,500,000 | 12,500,000 | |||||||||
Francis W. Parker School, | |||||||||||
Series 1999, LOC: BMO Harris N.A., LOC: Northern Trust Co.: 0.040% 04/01/29 (03/05/14) (a)(b) | 4,100,000 | 4,100,000 | |||||||||
IV Healthcorp, Inc., | |||||||||||
Series 2009, LOC: BMO Harris N.A. 0.050% 12/01/39 (03/06/14) (a)(b) | 21,560,000 | 21,560,000 | |||||||||
Lake Forest Academy, | |||||||||||
Series 2000, LOC: Northern Trust Co. 0.040% 12/01/24 (03/05/14) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
Lake Forest Open Lands, | |||||||||||
Series 1999, LOC: Northern Trust Co. 0.050% 08/01/33 (03/05/14) (a)(b) | 6,100,000 | 6,100,000 | |||||||||
Search Development Center, | |||||||||||
Series 2007, LOC: JPMorgan Chase Bank 0.080% 12/01/37 (03/06/14) (a)(b) | 9,965,000 | 9,965,000 | |||||||||
Steppenwolf Theatre Co., | |||||||||||
Series 2013, LOC: Northern Trust Co. 0.030% 03/01/43 (03/06/14) (a)(b) | 5,675,000 | 5,675,000 |
See Accompanying Notes to Financial Statements.
6
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
University of Chicago, | |||||||||||
Series 2001 B3, 0.230% 07/01/36 (03/13/14) (a)(b) | 7,200,000 | 7,200,000 | |||||||||
YMCA of Chicago, | |||||||||||
Series 2004 LOC: Harris Trust & Svgs Bk 0.040% 06/01/34 (03/05/14) (a)(b) | 200,000 | 200,000 | |||||||||
IL Housing Development Authority Multi-Family | |||||||||||
Brookhaven Apartments Associates LP, | |||||||||||
Series 2008, Credit Support: FHLMC, SPA: FHLMC 0.120% 08/01/38 (03/06/14) (a)(b) | 7,145,000 | 7,145,000 | |||||||||
IL Toll Highway Authority | |||||||||||
Series 2008 A-1A, | |||||||||||
SPA: JPMorgan Chase Bank 0.050% 01/01/31 (03/06/14) (a)(b) | 78,100,000 | 78,100,000 | |||||||||
IL Village of Brookfield | |||||||||||
Chicago Zoological Society, | |||||||||||
Series 2008, LOC: Northern Trust Co. 0.050% 06/01/38 (03/05/14) (a)(b) | 22,640,000 | 22,640,000 | |||||||||
Illinois Total | 280,442,000 | ||||||||||
Indiana – 3.4% | |||||||||||
IN Crawfordsville Industrial Development Authority | |||||||||||
Acuity Brands, | |||||||||||
National Services Industries, Inc., Series 1991, LOC: Wells Fargo Bank N.A. 0.140% 06/01/21 (03/06/14) (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 0.050% 01/15/20 (03/06/14) (a)(b)(c) | 8,230,000 | 8,230,000 | |||||||||
Dyer Indiana Redevelopment Authority, | |||||||||||
Series 2008-573, GTY AGMT: Deutsche Bank AG 0.090% 07/15/18 (03/06/14) (a)(b)(c) | 6,995,000 | 6,995,000 |
Par ($) | Value ($) | ||||||||||
IN Development Finance Authority | |||||||||||
Goodwill Industries, | |||||||||||
Series 2005, LOC: PNC Bank N.A. 0.060% 01/01/27 (03/06/14) (a)(b) | 5,425,000 | 5,425,000 | |||||||||
Rehabilitation Center, Inc., | |||||||||||
Series 2002, LOC: Wells Fargo Bank N.A. 0.190% 07/01/17 (03/06/14) (a)(b) | 790,000 | 790,000 | |||||||||
IN Finance Authority | |||||||||||
ArcelorMittal, | |||||||||||
Ispat Inland, Inc., Series 2005, LOC: Rabobank Nederland: 0.050% 06/01/35 (03/05/14) (a)(b) | 25,480,000 | 25,480,000 | |||||||||
Community Health Network Oblg Group, | |||||||||||
Series 2009 A LOC: Wells Fargo Bank N.A. 0.030% 07/01/39 (03/06/14) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
Goodwill Industries, | |||||||||||
Series 2006, LOC: JPMorgan Chase Bank 0.090% 12/01/36 (03/06/14) (a)(b) | 7,800,000 | 7,800,000 | |||||||||
Lutheran Child & Family Services, | |||||||||||
Series 2005, LOC: PNC Bank N.A. 0.060% 11/01/27 (03/06/14) (a)(b) | 4,265,000 | 4,265,000 | |||||||||
IN Health Facility Finance Authority | |||||||||||
Anthony Wayne Rehabilitation Center, | |||||||||||
Series 2001, LOC: Wells Fargo Bank N.A. 0.140% 02/01/31 (03/06/14) (a)(b) | 2,030,000 | 2,030,000 | |||||||||
Community Hospital of Lagrange, | |||||||||||
Series 2007, LOC: PNC Bank N.A. 0.030% 11/01/32 (03/06/14) (a)(b) | 21,115,000 | 21,115,000 | |||||||||
Southern Indiana Rehab Hospital, | |||||||||||
Series 2001, LOC: JPMorgan Chase Bank 0.140% 04/01/20 (03/06/14) (a)(b) | 1,290,000 | 1,290,000 |
See Accompanying Notes to Financial Statements.
7
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
IN Health Facility Financing Authority | |||||||||||
Community Hospital, | |||||||||||
Series 2000 A, LOC: Wells Fargo Bank N.A. 0.030% 07/01/28 (03/06/14) (a)(b) | 7,000,000 | 7,000,000 | |||||||||
IN Lawrenceburg | |||||||||||
Indiana Michigan Power Co., | |||||||||||
Series 2008 H, LOC: Bank of Nova Scotia 0.030% 11/01/21 (03/06/14) (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. 0.080% 06/01/29 (03/06/14) (a)(b) | 6,405,000 | 6,405,000 | |||||||||
IN RBC Municipal Products, Inc. Trust | |||||||||||
Series 2013 E, | |||||||||||
LIQ FAC: Royal Bank of Canada 0.030% 12/01/14 (03/06/14) (a)(b)(c) | 20,900,000 | 20,900,000 | |||||||||
IN St. Joseph County | |||||||||||
South Bend Medical Foundation, Inc., | |||||||||||
Series 2000, LOC: PNC Bank N.A. 0.060% 08/01/20 (03/06/14) (a)(b) | 9,315,000 | 9,315,000 | |||||||||
Indiana Total | 145,040,000 | ||||||||||
Iowa – 0.2% | |||||||||||
IA Higher Education Loan Authority | |||||||||||
Des Moines University Osteopath: | |||||||||||
Series 2003, LOC: U.S. Bank N.A. 0.040% 10/01/33 (03/03/14) (a)(b) | 4,695,000 | 4,695,000 | |||||||||
Series 2004, LOC: U.S. Bank N.A. 0.040% 10/01/24 (03/03/14) (a)(b) | 4,400,000 | 4,400,000 |
Par ($) | Value ($) | ||||||||||
IA Woodbury County | |||||||||||
June E. Nylan Cancer Center, | |||||||||||
Siouxland Regional Cancer Center, Series 1998 A, LOC: Wells Fargo Bank N.A. 0.140% 12/01/14 (03/06/14) (a)(b) | 475,000 | 475,000 | |||||||||
Iowa Total | 9,570,000 | ||||||||||
Kansas – 1.3% | |||||||||||
KS Wyandotte County-Kansas City Unified Government | |||||||||||
Series 2013 I, | |||||||||||
0.240% 03/01/14 | 9,575,000 | 9,575,000 | |||||||||
Series 2013 III, | |||||||||||
0.220% 03/01/14 | 9,310,000 | 9,310,000 | |||||||||
Series 2014 I, | |||||||||||
0.180% 03/01/15 | 33,190,000 | 33,193,301 | |||||||||
Series 2014 | |||||||||||
0.180% 03/01/15 | 5,005,000 | 5,005,498 | |||||||||
Kansas Total | 57,083,799 | ||||||||||
Kentucky – 1.1% | |||||||||||
KY Economic Development Finance Authority | |||||||||||
Baptist Healthcare System, | |||||||||||
Series 2009 B4 LOC: Branch Banking & Trust 0.050% 08/15/38 (03/06/14) (a)(b) | 29,255,000 | 29,255,000 | |||||||||
KY Louisville/Jefferson County Metropolitan Government | |||||||||||
Norton Healthcare Oblig., | |||||||||||
Series 2013, LOC: PNC Bank N.A. 0.030% 10/01/43 (03/05/14) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
KY Morehead League of Cities Funding Trust | |||||||||||
Series 2004 A, | |||||||||||
LOC: U.S. Bank N.A. 0.040% 06/01/34 (03/07/14) (a)(b) | 9,910,500 | 9,910,500 | |||||||||
Kentucky Total | 47,165,500 |
See Accompanying Notes to Financial Statements.
8
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Louisiana – 0.7% | |||||||||||
LA Bank of New York Municipal Certificates Trust | |||||||||||
Louisiana State Public Facility Authority | |||||||||||
Tulane University Series 2007, LOC: Bank of New York 0.280% 02/15/36 (05/15/14) (a)(b) | 12,395,000 | 12,395,000 | |||||||||
LA Public Facilities Authority | |||||||||||
Baton Rouge General Medical, | |||||||||||
Series 2004, Pre-refunded 07/01/14, 5.250% 07/01/33 | 18,000,000 | 18,281,935 | |||||||||
Louisiana Total | 30,676,935 | ||||||||||
Maine – 0.2% | |||||||||||
ME Eclipse Funding Trust | |||||||||||
Maine Health & Higher Educational Facility Authority, | |||||||||||
Series 2007, LOC: U.S. Bank N.A. 0.030% 07/01/37 (03/06/14) (a)(b)(c) | 9,825,000 | 9,825,000 | |||||||||
Maine Total | 9,825,000 | ||||||||||
Maryland – 0.9% | |||||||||||
MD Baltimore County Economic Development Authority | |||||||||||
Blue Circle, Inc., | |||||||||||
Series 1992, LOC: BNP Paribas 0.500% 12/01/17 (03/05/14) (a)(b) | 4,400,000 | 4,400,000 | |||||||||
Torah Institute of Baltimore, | |||||||||||
Series 2004, LOC: Branch Banking & Trust 0.030% 07/01/24 (03/06/14) (a)(b) | 2,575,000 | 2,575,000 | |||||||||
MD Bel Air Economic Development Authority | |||||||||||
Harford Day School, Inc., | |||||||||||
Series 2007, LOC: Branch Banking & Trust 0.030% 10/01/33 (03/06/14) (a)(b) | 3,850,000 | 3,850,000 | |||||||||
MD Health & Higher Educational Facilities Authority | |||||||||||
Johns Hopkins University, | |||||||||||
Series 2004 A, Pre-refunded 07/01/14, 5.000% 07/01/38 | 5,050,000 | 5,129,510 |
Par ($) | Value ($) | ||||||||||
MD Montgomery County Housing Opportunities Commission | |||||||||||
Series 2011 A, | |||||||||||
Insured: GNMA/FNMA/FHLMC, LOC: TD Bank N.A. 0.050% 01/01/49 (03/06/14) (a)(b) | 7,405,000 | 7,405,000 | |||||||||
MD Prince George's County | |||||||||||
Series 2007-2128, | |||||||||||
GTY AGMT: Wells Fargo Bank N.A. 0.030% 07/01/34 (03/06/14) (a)(b)(c) | 13,710,000 | 13,710,000 | |||||||||
Maryland Total | 37,069,510 | ||||||||||
Massachusetts – 0.4% | |||||||||||
MA Commonwealth | |||||||||||
Series 2001 | |||||||||||
5.500% 11/01/14 | 1,000,000 | 1,035,873 | |||||||||
MA Concord | |||||||||||
Series 2013, | |||||||||||
1.000% 06/16/14 | 1,800,000 | 1,804,032 | |||||||||
MA Department of Transportation | |||||||||||
Contract Assistance-A7: | |||||||||||
Series 2010, SPA: JPMorgan Chase Bank 0.040% 01/01/29 (03/05/14) (a)(b) | 2,800,000 | 2,800,000 | |||||||||
MA Development Finance Agency | |||||||||||
Tabor Academy, | |||||||||||
Series 2007 A, LOC: FHLB, 0.040% 12/01/36 (03/05/14) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
MA Easton | |||||||||||
Series 2013 | |||||||||||
1.000% 08/22/14 | 1,000,000 | 1,003,428 | |||||||||
MA North Attleborough | |||||||||||
Series 2013, | |||||||||||
1.000% 05/22/14 | 3,062,256 | 3,067,285 | |||||||||
MA Norton | |||||||||||
Series 2013, | |||||||||||
1.000% 05/21/14 | 5,300,000 | 5,309,585 | |||||||||
MA Plymouth | |||||||||||
Series 2013, | |||||||||||
3.000% 05/01/14 | 1,544,000 | 1,551,134 |
See Accompanying Notes to Financial Statements.
9
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
MA University of Massachusetts Building Authority | |||||||||||
Series 2011 1, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.020% 11/01/34 (03/05/14) (a)(b) | 1,535,000 | 1,535,000 | |||||||||
Massachusetts Total | 19,106,337 | ||||||||||
Michigan – 2.3% | |||||||||||
MI Bank of New York Municipal Certificates Trust | |||||||||||
Detroit Sewer Disposal, | |||||||||||
Series 2006, LOC: Bank of New York 0.300% 07/01/26 (04/01/14) (a)(b)(c) | 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 0.080% 12/01/31 (03/06/14) (a)(b)(c) | 2,655,000 | 2,655,000 | |||||||||
MI L'Anse Creuse Public Schools | |||||||||||
School Building & Site-RMKT, | |||||||||||
Series 2008, SPA: JPMorgan Chase Bank 0.040% 05/01/35 (03/03/14) (a)(b) | 15,500,000 | 15,500,000 | |||||||||
MI St. Joseph Hospital Finance Authority | |||||||||||
Lakeland Hospitals at Niles: | |||||||||||
Series 2003, SPA: JPMorgan Chase Bank 0.080% 01/01/32 (03/06/14) (a)(b) | 31,725,000 | 31,725,000 | |||||||||
Series 2006, SPA: JPMorgan Chase Bank 0.080% 01/01/35 (03/06/14) (a)(b) | 30,675,000 | 30,675,000 | |||||||||
Michigan Total | 98,929,500 | ||||||||||
Minnesota – 0.9% | |||||||||||
MN Bemidji Independent School District No 31 | |||||||||||
Series 2013 A, | |||||||||||
Minnesota School District Credit Enhancement Program, 3.000% 04/01/14 | 1,000,000 | 1,002,417 |
Par ($) | Value ($) | ||||||||||
MN Holdingford Independent School District No 738 | |||||||||||
Series 2013, | |||||||||||
Minnesota School District Credit Enhancement Program, 1.250% 09/11/14 | 3,000,000 | 3,015,094 | |||||||||
MN Litchfield Independent School District No 465 | |||||||||||
Series 2013, | |||||||||||
Minnesota School District Credit Enhancement Program, 1.250% 09/25/14 | 2,700,000 | 2,714,541 | |||||||||
MN Metropolitan Council | |||||||||||
Series 2012 E | |||||||||||
5.000% 09/01/14 | 5,650,000 | 5,787,445 | |||||||||
MN Minneapolis Special School District No 1 | |||||||||||
Series 2013 D | |||||||||||
Minnesota School District Credit Enhancement Program 5.000% 02/01/15 | 4,270,000 | 4,459,424 | |||||||||
MN New London-Spicer Independent School District No 345 | |||||||||||
Series 2013, | |||||||||||
Minnesota School District Credit Enhancement Program, 1.250% 09/22/14 | 3,000,000 | 3,015,918 | |||||||||
MN New York Mills Independent School District No 553 | |||||||||||
Series 2013, | |||||||||||
Minnesota School District Credit Enhancement Program, 1.250% 09/24/14 | 1,115,000 | 1,120,670 | |||||||||
MN Rosemount-Apple Valley-Eagan Independent School District No. 196 | |||||||||||
Series 1996 A, | |||||||||||
Minnesota School District Credit Enhancement Program, 04/01/14 (e) | 1,960,000 | 1,959,468 | |||||||||
MN State | |||||||||||
Series 2010 D | |||||||||||
5.000% 08/01/14 | 14,000,000 | 14,287,050 | |||||||||
Minnesota Total | 37,362,027 | ||||||||||
Missouri – 2.9% | |||||||||||
MO Deutsche Bank Spears/Lifers Trust | |||||||||||
Kansas City Assistance Corp., | |||||||||||
Series 2008-536, GTY AGMT: Deutsche Bank AG 0.050% 04/15/19 (03/06/14) (a)(b)(c) | 9,300,000 | 9,300,000 |
See Accompanying Notes to Financial Statements.
10
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
MO Development Finance Board | |||||||||||
The Nelson Gallery Foundation: | |||||||||||
Series 2004 A, SPA: Northern Trust Company 0.030% 12/01/33 (03/03/14) (a)(b) | 13,790,000 | 13,790,000 | |||||||||
Series 2008 A, SPA: Northern Trust Company 0.030% 12/01/37 (03/03/14) (a)(b) | 44,600,000 | 44,600,000 | |||||||||
MO Health & Educational Facilities Authority | |||||||||||
Ascension Health, | |||||||||||
Series 2008 C-5, 0.020% 11/15/26 (03/05/14) (b)(d) | 10,500,000 | 10,500,000 | |||||||||
MO Kansas City | |||||||||||
H. Roe Battle Convention Center, | |||||||||||
Series 2008 E, LOC: Sumitomo Mitsui Banking 0.040% 04/15/34 (03/05/14) (a)(b) | 14,025,000 | 14,025,000 | |||||||||
MO Nodaway Industrial Development Authority | |||||||||||
Northwest Foundation, Inc., | |||||||||||
Series 2002, LOC: U.S. Bank N.A. 0.030% 11/01/32 (03/06/14) (a)(b) | 2,675,000 | 2,675,000 | |||||||||
MO St. Louis Airport | |||||||||||
Series 2005, | |||||||||||
GTY AGMT: Deutsche Bank AG 0.050% 07/01/31 (03/06/14) (a)(b)(c) | 27,870,000 | 27,870,000 | |||||||||
Missouri Total | 122,760,000 | ||||||||||
Montana – 0.8% | |||||||||||
MT Board of Investments | |||||||||||
Series 2004, | |||||||||||
0.220% 03/01/29 (f) | 22,400,000 | 22,400,000 | |||||||||
Series 2013, | |||||||||||
0.220% 03/01/38 (f) | 12,180,000 | 12,180,000 | |||||||||
Montana Total | 34,580,000 | ||||||||||
Nebraska – 2.0% | |||||||||||
NE Central Plains Energy Project | |||||||||||
Series 2009 2, | |||||||||||
SPA: Royal Bank of Canada 0.030% 08/01/39 (03/06/14) (a)(b) | 40,345,000 | 40,345,000 |
Par ($) | Value ($) | ||||||||||
NE Nuckolls County | |||||||||||
Agrex, Inc., | |||||||||||
Series 1985, LOC: JPMorgan Chase Bank 0.090% 02/01/15 (03/05/14) (a)(b) | 5,100,000 | 5,100,000 | |||||||||
NE Omaha Public Power District | |||||||||||
0.080% 03/18/14 | 8,900,000 | 8,900,000 | |||||||||
0.100% 04/02/14 | 15,000,000 | 15,000,000 | |||||||||
0.100% 04/09/14 | 3,500,000 | 3,500,000 | |||||||||
0.130% 03/11/14 | 12,430,000 | 12,430,000 | |||||||||
Nebraska Total | 85,275,000 | ||||||||||
Nevada – 2.1% | |||||||||||
NV Deutsche Bank Spears/Lifers Trust | |||||||||||
Clark County School District, | |||||||||||
Series 2008-684, GTY AGMT: Deutsche Bank AG 0.050% 06/15/24 (03/06/14) (a)(b)(c) | 9,755,000 | 9,755,000 | |||||||||
NV Reno | |||||||||||
ReTrac-Reno Transportation Rail Access Corridor, | |||||||||||
Series 2008, LOC: Bank of New York 0.040% 06/01/42 (03/03/14) (a)(b) | 78,945,000 | 78,945,000 | |||||||||
Nevada Total | 88,700,000 | ||||||||||
New Hampshire – 2.3% | |||||||||||
NH Business Finance Authority | |||||||||||
Taylor Home: | |||||||||||
Series 2005 A, LOC: TD Bank N.A. 0.030% 05/01/35 (03/06/14) (a)(b) | 10,695,000 | 10,695,000 | |||||||||
Series 2005 B, LOC: TD Bank N.A. 0.030% 05/01/35 (03/06/14) (a)(b) | 11,735,000 | 11,735,000 | |||||||||
NH Health & Education Facilities Authority | |||||||||||
Tilton School, | |||||||||||
Series 2006, LOC: TD Bank N.A. 0.030% 02/01/36 (03/06/14) (a)(b) | 15,025,000 | 15,025,000 |
See Accompanying Notes to Financial Statements.
11
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
University System of New Hampshire: | |||||||||||
Series 2005 A2, SPA: U.S. Bank N.A. 0.040% 07/01/35 (03/03/14) (a)(b) | 12,300,000 | 12,300,000 | |||||||||
Series 2005 B-1, SPA: Wells Fargo Bank N.A. 0.040% 07/01/33 (03/03/14) (a)(b) | 17,000,000 | 17,000,000 | |||||||||
Series 2005 B SPA: Wells Fargo Bank N.A. 0.040% 07/01/33 (03/03/14) (a)(b) | 31,380,000 | 31,380,000 | |||||||||
New Hampshire Total | 98,135,000 | ||||||||||
New Jersey – 3.1% | |||||||||||
NJ Deutsche Bank Spears/Lifers Trust | |||||||||||
New Jersey State Transportation Trust Fund Authority: | |||||||||||
Series 2007-317, LIQ FAC: Deutsche Bank AG 0.260% 12/15/33 (04/24/14) (a)(b)(c) | 31,030,000 | 31,030,000 | |||||||||
Series 2007-452, GTY AGMT: Deutsche Bank AG 0.110% 12/15/33 (03/06/14) (a)(b)(c) | 20,780,000 | 20,780,000 | |||||||||
NJ Monmouth County Improvement Authority | |||||||||||
Series 2013, | |||||||||||
2.000% 12/04/14 | 6,500,000 | 6,588,911 | |||||||||
NJ North Bergen | |||||||||||
Series 2013, | |||||||||||
1.000% 04/02/14 | 14,110,250 | 14,118,625 | |||||||||
NJ Readington | |||||||||||
Series 2014, | |||||||||||
1.000% 01/29/15 | 17,950,000 | 18,074,518 | |||||||||
NJ RIB Floater Trust | |||||||||||
NJ Healthcare Financing Authority | |||||||||||
Series 2013, LOC: Barclays Bank PLC 0.080% 07/03/17 (03/06/14) (a)(b)(c) | 23,650,000 | 23,650,000 | |||||||||
NJ Sussex County | |||||||||||
Series 2013, | |||||||||||
1.000% 06/27/14 | 19,000,000 | 19,049,028 | |||||||||
New Jersey Total | 133,291,082 |
Par ($) | Value ($) | ||||||||||
New Mexico – 1.8% | |||||||||||
NM Municipal Energy Acquisition Authority | |||||||||||
Series 2009, | |||||||||||
SPA: Royal Bank of Canada 0.030% 11/01/39 (03/06/14) (a)(b) | 69,110,000 | 69,110,000 | |||||||||
NM State | |||||||||||
Series 2013, | |||||||||||
2.000% 03/01/14 | 6,450,000 | 6,450,000 | |||||||||
New Mexico Total | 75,560,000 | ||||||||||
New York – 12.5% | |||||||||||
NY BB&T Municipal Trust | |||||||||||
Series 2009-1037, | |||||||||||
LOC: Branch Banking & Trust 0.200% 06/01/17 (03/06/14) (a)(b)(c) | 460,000 | 460,000 | |||||||||
Series 2010-1039, | |||||||||||
LOC: Branch Banking & Trust 0.130% 06/01/25 (03/06/14) (a)(b)(c) | 32,660,000 | 32,660,000 | |||||||||
NY Cheektowaga | |||||||||||
Series 2013, | |||||||||||
0.500% 07/17/14 | 15,700,000 | 15,716,011 | |||||||||
NY Connetquot Central School District of Islip | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 0.500% 09/04/14 | 7,500,000 | 7,509,183 | |||||||||
NY Corning School District | |||||||||||
1.000% 06/26/14 | 39,700,000 | 39,811,408 | |||||||||
NY County of Saratoga NY | |||||||||||
Saratoga Hospital Obl Group, | |||||||||||
Series 2014 LOC: Hsbc Bank Usa N.A. 0.040% 12/01/40 (03/06/14) (a)(b) | 3,125,000 | 3,125,000 | |||||||||
NY East Hampton Union Free School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 06/26/14 | 5,750,000 | 5,764,641 | |||||||||
NY Franklin County Civic Development Corp. | |||||||||||
Alice Hyde Medical Center, | |||||||||||
Series 2013 A, LOC: HSBC Bank USA N.A. 0.040% 10/01/38 (03/06/14) (a)(b) | 4,400,000 | 4,400,000 |
See Accompanying Notes to Financial Statements.
12
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY Housing Development Corp. | |||||||||||
Series 2013 F, | |||||||||||
0.200% 11/01/47 (12/23/14) (b)(d) | 4,400,000 | 4,400,000 | |||||||||
NY Housing Finance Agency | |||||||||||
Ann/Nassau Realty LLC, | |||||||||||
111 Nassau Street Housing, Series 2011 A, LOC: Landesbank Hessen-Thüringen: 0.040% 11/01/44 (03/03/14) (a)(b) | 8,935,000 | 8,935,000 | |||||||||
Midtown West B LLC, | |||||||||||
505 West 37th St.: Series 2009 A, LOC: Landesbank Hessen-Thüringen: 0.040% 05/01/42 (03/03/14) (a)(b) | 22,800,000 | 22,800,000 | |||||||||
Series 2009 B, LOC: Landesbank Hessen-Thüringen 0.040% 05/01/42 (03/03/14) (a)(b) | 36,600,000 | 36,600,000 | |||||||||
NY Liberty Development Corp. | |||||||||||
3 World Trade Center LLC: | |||||||||||
Series 2010 A1, Escrowed in U.S. Treasuries, 0.230% 12/01/50 (03/19/14) (b)(d) | 76,000,000 | 76,000,131 | |||||||||
Series 2011 A3, Escrowed in U.S. Treasuries, 0.230% 12/01/49 (03/19/14) (b)(d) | 55,000,000 | 55,000,000 | |||||||||
NY Nassau Health Care Corp. | |||||||||||
Series 2009 C2, | |||||||||||
LOC: Wells Fargo Bank N.A. 0.090% 08/01/29 (04/07/14) (a)(b) | 6,455,000 | 6,455,000 | |||||||||
NY New York City Transitional Finance Authority Future Tax Secured Revenue | |||||||||||
Series 2012 C5 | |||||||||||
LOC: Sumitomo Mitsui Banking 0.030% 11/01/41 (03/06/14) (a)(b) | 9,000,000 | 9,000,000 | |||||||||
NY State Dormitory Authority | |||||||||||
City University of Ny, | |||||||||||
Series 2008: LOC: TD Bank N.A. 0.030% 07/01/31 (03/06/14) (a)(b) | 28,720,000 | 28,720,000 |
Par ($) | Value ($) | ||||||||||
LOC: Td Bank N.A. 1.000% 01/30/15 | 19,140,000 | 19,288,089 | |||||||||
Northern Westchester Hospital, | |||||||||||
Series 2009, LOC: TD Bank N.A. 0.030% 11/01/34 (03/06/14) (a)(b) | 5,040,000 | 5,040,000 | |||||||||
NY Tonawanda | |||||||||||
Series 2013, | |||||||||||
1.000% 09/04/14 | 11,540,000 | 11,583,041 | |||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2002 F, | |||||||||||
SPA: Landesbank Hessen-Thüringen 0.040% 11/01/32 (03/03/14) (a)(b) | 104,775,000 | 104,775,000 | |||||||||
NY Victor Central School District | |||||||||||
Series 2013, | |||||||||||
Insured: State Aid Withholding 1.000% 09/26/14 | 13,000,000 | 13,057,176 | |||||||||
NY Wells Fargo Stage Trust | |||||||||||
Series 2008, | |||||||||||
Insured: Government of Authority LIQ FAC: Wells Fargo & Company 0.070% 11/15/37 (03/06/14) (a)(b)(c) | 9,000,000 | 9,000,000 | |||||||||
NY West Seneca | |||||||||||
Series 2013, | |||||||||||
1.000% 08/01/14 | 14,700,000 | 14,745,475 | |||||||||
New York Total | 534,845,155 | ||||||||||
North Carolina – 3.6% | |||||||||||
NC BB&T Municipal Trust | |||||||||||
Series 2008-1008, | |||||||||||
LOC: Branch Banking & Trust 0.130% 03/01/24 (03/06/14) (a)(b)(c) | 10,955,000 | 10,955,000 | |||||||||
Series 2008-1023, | |||||||||||
LOC: Branch Banking & Trust 0.130% 05/01/24 (03/06/14) (a)(b)(c) | 3,515,000 | 3,515,000 | |||||||||
NC Capital Facilities Finance Agency | |||||||||||
Barton College, | |||||||||||
Series 2004, LOC: Branch Banking & Trust 0.030% 07/01/19 (03/06/14) (a)(b) | 3,300,000 | 3,300,000 |
See Accompanying Notes to Financial Statements.
13
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
High Point University: | |||||||||||
Series 2007, LOC: Branch Banking & Trust 0.030% 12/01/29 (03/06/14) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Series 2008, LOC: Branch Banking & Trust 0.030% 05/01/30 (03/06/14) (a)(b) | 3,360,000 | 3,360,000 | |||||||||
Methodist University, | |||||||||||
Series 2005, LOC: Wells Fargo Bank N.A. 0.040% 03/01/30 (03/06/14) (a)(b) | 13,080,000 | 13,080,000 | |||||||||
NC Charlotte Water & Sewer System Revenue | |||||||||||
Series 2006 B, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.030% 07/01/36 (03/06/14) (a)(b) | 8,000,000 | 8,000,000 | |||||||||
NC Facilities Financing | |||||||||||
Duke University, | |||||||||||
Series A1, 0.130% 03/05/14 | 22,979,000 | 22,979,000 | |||||||||
NC Forsyth County | |||||||||||
Series 2004 A, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.040% 03/01/25 (03/06/14) (a)(b) | 8,715,000 | 8,715,000 | |||||||||
Series 2004 B, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.040% 03/01/25 (03/06/14) (a)(b) | 11,000,000 | 11,000,000 | |||||||||
NC Mecklenburg County | |||||||||||
Series 2009 A, | |||||||||||
5.000% 08/01/14 | 2,740,000 | 2,794,919 | |||||||||
NC Medical Care Commission | |||||||||||
Deerfield Episcopal Retirement, | |||||||||||
Series 2008 B, LOC: Branch Banking & Trust 0.030% 11/01/38 (03/06/14) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
J. Arthur Dosher Memorial Hospital, | |||||||||||
Series 1998 J, LOC: Branch Banking & Trust 0.030% 05/01/18 (03/06/14) (a)(b) | 1,305,000 | 1,305,000 |
Par ($) | Value ($) | ||||||||||
Southeastern Regional Medical Center, | |||||||||||
Series 2005, LOC: Branch Banking & Trust 0.030% 06/01/37 (03/06/14) (a)(b) | 6,855,000 | 6,855,000 | |||||||||
Westcare, Inc., | |||||||||||
Series 2002 A, LOC: Branch Banking & Trust 0.030% 09/01/22 (03/06/14) (a)(b) | 5,100,000 | 5,100,000 | |||||||||
NC Wake County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Habitat for Humanity of Wake County, | |||||||||||
Series 2007, LOC: Branch Banking & Trust 0.030% 11/01/32 (03/06/14) (a)(b) | 3,800,000 | 3,800,000 | |||||||||
NC Wake County | |||||||||||
Series 2003 B, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.030% 04/01/16 (03/06/14) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
Series 2003 C, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.030% 04/01/19 (03/06/14) (a)(b) | 19,000,000 | 19,000,000 | |||||||||
Series 2007 A, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.030% 03/01/26 (03/06/14) (a)(b) | 13,400,000 | 13,400,000 | |||||||||
North Carolina Total | 153,158,919 | ||||||||||
Ohio – 2.7% | |||||||||||
OH Cuyahoga County | |||||||||||
Cleveland Hearing & Speech, | |||||||||||
Series 2008, LOC: PNC Bank N.A. 0.040% 06/01/38 (03/06/14) (a)(b) | 4,790,000 | 4,790,000 | |||||||||
OH Deutsche Bank Spears/Lifers Trust | |||||||||||
Columbus Ohio Regional Airport Authority, | |||||||||||
Series 2008-488, GTY AGMT: Deutsche Bank AG 0.050% 01/01/28 (03/06/14) (a)(b)(c) | 4,885,000 | 4,885,000 |
See Accompanying Notes to Financial Statements.
14
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
OH Eclipse Funding Trust | |||||||||||
Higher Educational Facility, | |||||||||||
University of Dayton, Series 2006, LOC: U.S. Bank N.A. 0.030% 12/01/33 (03/06/14) (a)(b)(c) | 5,855,000 | 5,855,000 | |||||||||
OH Geauga County | |||||||||||
Sisters of Notre Dame, | |||||||||||
Series 2001, LOC: PNC Bank N.A. 0.060% 08/01/16 (03/06/14) (a)(b) | 1,935,000 | 1,935,000 | |||||||||
OH Huron County | |||||||||||
Fisher-Titus Medical Center, | |||||||||||
Series 2003 A, LOC: PNC Bank N.A. 0.050% 12/01/27 (03/06/14) (a)(b) | 9,435,000 | 9,435,000 | |||||||||
Norwalk Area Health System, | |||||||||||
Series 2003, LOC: PNC Bank N.A. 0.050% 12/01/27 (03/06/14) (a)(b) | 5,575,000 | 5,575,000 | |||||||||
OH Montgomery County | |||||||||||
Catholic Hlth Initiatives, | |||||||||||
Series 2008 C2 SPA: U.S. Bank N.A. 0.140% 10/01/41 (03/05/14) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
OH Salem Civic Facility | |||||||||||
Salem Community Center, Inc., | |||||||||||
Series 2001, LOC: PNC Bank N.A. 0.060% 06/01/27 (03/06/14) (a)(b) | 6,655,000 | 6,655,000 | |||||||||
OH Stark County Port Authority | |||||||||||
Community Action Agency, | |||||||||||
Series 2001, LOC: JPMorgan Chase Bank 0.110% 12/01/22 (03/06/14) (a)(b) | 2,800,000 | 2,800,000 | |||||||||
OH State University | |||||||||||
0.070% 03/12/14 | 17,100,000 | 17,100,000 |
Par ($) | Value ($) | ||||||||||
OH Zanesville Muskingum County Port Authority | |||||||||||
Grove City Church, | |||||||||||
Series 2006, LOC: PNC Bank N.A. 0.060% 02/01/24 (03/06/14) (a)(b) | 7,450,000 | 7,450,000 | |||||||||
Ohio Total | 116,480,000 | ||||||||||
Oregon – 0.5% | |||||||||||
OR Confederated Tribes of the Umatilla Indian Reservation | |||||||||||
Series 2008, | |||||||||||
LOC: Wells Fargo Bank N.A. 0.040% 12/01/28 (03/06/14) (a)(b) | 7,750,000 | 7,750,000 | |||||||||
OR State | |||||||||||
Series 2008 | |||||||||||
SPA: Bank of Tokyo-Mitsubishi UFJ 0.030% 12/01/45 (03/05/14) (a)(b) | 13,200,000 | 13,200,000 | |||||||||
Oregon Total | 20,950,000 | ||||||||||
Pennsylvania – 6.1% | |||||||||||
PA Allegheny County Hospital Development Authority | |||||||||||
Jefferson Regional Medical Center, | |||||||||||
Series 2006 A, LOC: PNC Bank N.A. 0.040% 05/01/26 (03/06/14) (a)(b) | 22,000,000 | 22,000,000 | |||||||||
PA Allegheny County Industrial Development Authority | |||||||||||
Our Lady of the Sacred Heart High School, | |||||||||||
Series 2002, LOC: PNC Bank N.A. 0.050% 06/01/22 (03/06/14) (a)(b) | 1,690,000 | 1,690,000 | |||||||||
PA Deutsche Bank Spears/Lifers Trust | |||||||||||
Westmoreland County Municipal Authority, | |||||||||||
Series 2007-301, GTY AGMT: Deutsche Bank AG 0.080% 08/15/30 (03/06/14) (a)(b)(c) | 5,845,000 | 5,845,000 | |||||||||
PA Emmaus General Authority | |||||||||||
Series 1989 B-28, | |||||||||||
LOC: U.S. Bank N.A. 0.040% 03/01/24 (03/05/14) (a)(b) | 2,400,000 | 2,400,000 |
See Accompanying Notes to Financial Statements.
15
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series 1989 B-29, | |||||||||||
LOC: U.S. Bank N.A. 0.040% 03/01/24 (03/05/14) (a)(b) | 8,100,000 | 8,100,000 | |||||||||
Series 1989 E-22, | |||||||||||
LOC: U.S. Bank N.A. 0.040% 03/01/24 (03/05/14) (a)(b) | 11,200,000 | 11,200,000 | |||||||||
Series 1989 F-27, | |||||||||||
LOC: U.S. Bank N.A. 0.040% 03/01/24 (03/05/14) (a)(b) | 2,300,000 | 2,300,000 | |||||||||
Series 2003 E-20, | |||||||||||
LOC: U.S. Bank N.A. 0.040% 03/01/24 (03/05/14) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
PA Haverford Township School District | |||||||||||
Series 2009, | |||||||||||
LOC: TD Bank N.A. 0.030% 03/01/30 (03/06/14) (a)(b) | 4,065,000 | 4,065,000 | |||||||||
PA Higher Educational Facilities Authority | |||||||||||
Mount Aloysius College, | |||||||||||
Series 2003 L3, LOC: PNC Bank N.A. 0.050% 05/01/28 (03/06/14) (a)(b) | 4,900,000 | 4,900,000 | |||||||||
PA JPMorgan Chase PUTTERs/DRIVERs Trust | |||||||||||
University of Pittsburgh Medical Center | |||||||||||
Series 2013, LIQ FAC: JPMorgan Chase Bank N.A. 0.080% 03/03/34 (03/06/14) (a)(b)(c) | 61,240,000 | 61,240,000 | |||||||||
PA North Penn Water Authority | |||||||||||
Series 2008, | |||||||||||
LOC: U.S. Bank N.A. 0.030% 11/01/24 (03/06/14) (a)(b) | 6,790,000 | 6,790,000 | |||||||||
PA Philadelphia Authority for Industrial Development | |||||||||||
NewCourtland Elder Services, | |||||||||||
Series 2007, LOC: PNC Bank N.A. 0.040% 03/01/26 (03/06/14) (a)(b) | 7,090,000 | 7,090,000 |
Par ($) | Value ($) | ||||||||||
PA Public School Building Authority | |||||||||||
Park School Project: | |||||||||||
Series 2009 A, LOC: PNC Bank N.A. 0.040% 08/01/30 (03/06/14) (a)(b) | 9,740,000 | 9,740,000 | |||||||||
Series 2009 B, LOC: PNC Bank N.A. 0.040% 05/15/20 (03/06/14) (a)(b) | 11,685,000 | 11,685,000 | |||||||||
PA RBC Municipal Products, Inc. Trust | |||||||||||
Bethlehem PA Area School District, | |||||||||||
Series 2011 E-31, LOC: Royal Bank of Canada 0.030% 05/01/14 (03/06/14) (a)(b)(c) | 5,000,000 | 5,000,000 | |||||||||
Hempfield PA School District, | |||||||||||
Series 2011 E-30, LOC: Royal Bank of Canada 0.030% 08/01/25 (03/06/14) (a)(b)(c) | 5,275,000 | 5,275,000 | |||||||||
Manhein Township PA School District, | |||||||||||
Series 2011 E-28, LOC: Royal Bank of Canada 0.030% 12/12/14 (03/06/14) (a)(b)(c) | 13,350,000 | 13,350,000 | |||||||||
Pennsylvania State Turnpike Commission, | |||||||||||
Series 2011 E-22, LOC: Royal Bank of Canada 0.030% 12/01/38 (03/06/14) (a)(b)(c) | 15,850,000 | 15,850,000 | |||||||||
University of Pittsburgh Medical Center, | |||||||||||
Series 2010 E-16, LOC: Royal Bank of Canada 0.030% 04/15/39 (03/06/14) (a)(b)(c) | 29,515,000 | 29,515,000 | |||||||||
PA Ridley School District | |||||||||||
Series 2009, | |||||||||||
LOC: TD Bank N.A. 0.030% 11/01/29 (03/06/14) (a)(b) | 3,370,000 | 3,370,000 | |||||||||
PA St. Mary Hospital Authority | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2004 B, SPA: Landesbank Hessen-Thüringen 0.030% 03/01/32 (03/05/14) (a)(b) | 6,000,000 | 6,000,000 |
See Accompanying Notes to Financial Statements.
16
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
PA University of Pittsburgh | |||||||||||
Series 2013, | |||||||||||
2.000% 07/11/14 | 18,400,000 | 18,520,939 | |||||||||
Pennsylvania Total | 261,925,939 | ||||||||||
Puerto Rico – 3.7% | |||||||||||
PR RBC Municipal Products, Inc. Trust | |||||||||||
Series 2013 E-46, | |||||||||||
LOC: Royal Bank of Canada 0.140% 09/01/15 (03/06/14) (a)(b)(c) | 119,900,000 | 119,900,000 | |||||||||
PR RIB Floater Trust | |||||||||||
Series 2013 8WE, | |||||||||||
LOC: Barclays Bank PLC 0.130% 09/30/14 (03/06/14) (a)(b)(c) | 39,350,000 | 39,350,000 | |||||||||
Puerto Rico Total | 159,250,000 | ||||||||||
Rhode Island – 1.2% | |||||||||||
RI Health & Educational Building Corp. | |||||||||||
Brown University, | |||||||||||
Higher Education Facilities, Series 2003 B, 0.020% 09/01/43 (03/06/14) (b)(d) | 31,660,000 | 31,660,000 | |||||||||
Rhode Island School of Design, | |||||||||||
Series 2008 B, LOC: TD Bank N.A. 0.030% 08/15/36 (03/05/14) (a)(b) | 17,295,000 | 17,295,000 | |||||||||
Rhode Island Total | 48,955,000 | ||||||||||
South Carolina – 1.9% | |||||||||||
SC Aiken County Consolidated School District | |||||||||||
Series 2011, | |||||||||||
Credit Support: South Carolina School District Credit Enhancement Program 3.000% 04/01/14 | 2,660,000 | 2,666,216 | |||||||||
Series 2013, | |||||||||||
Credit Support: South Carolina School District Credit Enhancement Program 4.000% 04/01/14 | 3,690,000 | 3,701,942 | |||||||||
SC Chester County School District | |||||||||||
Series 2012 B, | |||||||||||
Credit Support: South Carolina School District Credit Enhancement Program 4.000% 03/01/14 | 2,505,000 | 2,505,000 |
Par ($) | Value ($) | ||||||||||
SC Florence School District One | |||||||||||
Series 2012, | |||||||||||
Credit Support: South Carolina School District Credit Enhancement Program 5.000% 03/01/14 | 5,145,000 | 5,145,000 | |||||||||
SC Greenville County School District | |||||||||||
Series 2013, | |||||||||||
Credit Support: South Carolina School District Credit Enhancement Program 1.000% 06/02/14 | 40,420,000 | 40,504,916 | |||||||||
SC Jobs-Economic Development Authority | |||||||||||
Anmed Health, | |||||||||||
Series 2009 LOC: Wells Fargo Bank N.A. 0.030% 02/01/39 (03/05/14) (a)(b) | 18,545,000 | 18,545,000 | |||||||||
SC JPMorgan Chase PUTTERs/DRIVERs Trust | |||||||||||
SC State Public Service Authority | |||||||||||
Series 2013, LIQ FAC: JPMorgan Chase Bank N.A. 0.110% 06/01/37 (03/06/14) (a)(b)(c) | 3,000,000 | 3,000,000 | |||||||||
SC Oconee County School District | |||||||||||
Series 2013, | |||||||||||
Credit Support: South Carolina School District Credit Enhancement Program 2.000% 03/01/14 | 5,000,000 | 5,000,000 | |||||||||
South Carolina Total | 81,068,074 | ||||||||||
South Dakota – 0.7% | |||||||||||
SD Health & Educational Facilities Authority | |||||||||||
Regional Health Inc, | |||||||||||
Series 2008, LOC: U.S. Bank N.A. 0.040% 09/01/27 (03/03/14) (a)(b) | 14,400,000 | 14,400,000 | |||||||||
SD Housing Development Authority | |||||||||||
Homeownership Mortgage, | |||||||||||
Series 2003 C-1, SPA: Landesbank Hessen-Thüringen 0.120% 05/01/32 (03/06/14) (a)(b) | 3,900,000 | 3,900,000 | |||||||||
SD Sioux Falls | |||||||||||
Series 2007-1886, | |||||||||||
GTY AGMT: Wells Fargo Bank N.A. 0.060% 11/15/33 (03/06/14) (a)(b) | 12,255,000 | 12,255,000 | |||||||||
South Dakota Total | 30,555,000 |
See Accompanying Notes to Financial Statements.
17
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Tennessee – 0.9% | |||||||||||
TN Blount County Public Building Authority | |||||||||||
Series 2009 E-7-A, | |||||||||||
LOC: Branch Banking & Trust 0.030% 06/01/39 (03/05/14) (a)(b) | 5,335,000 | 5,335,000 | |||||||||
Series 2009 E-8-A, | |||||||||||
LOC: Branch Banking & Trust 0.030% 06/01/37 (03/05/14) (a)(b) | 1,470,000 | 1,470,000 | |||||||||
Series 2009 E-9-A, | |||||||||||
LOC: Branch Banking & Trust 0.030% 06/01/30 (03/05/14) (a)(b) | 4,960,000 | 4,960,000 | |||||||||
TN Clipper Tax-Exempt Certificate Trust | |||||||||||
Met Government Nashville & Davidson County | |||||||||||
Series 2013 1A, LIQ FAC: State Street Bank & Trust Co. 0.030% 07/01/27 (03/06/14) (a)(b)(c) | 7,500,000 | 7,500,000 | |||||||||
TN Hawkins County Industrial Development Board | |||||||||||
Leggett & Platt, Inc., | |||||||||||
Series 1988 B, LOC: Wells Fargo Bank N.A. 0.150% 10/01/27 (03/05/14) (a)(b) | 1,750,000 | 1,750,000 | |||||||||
TN School Board | |||||||||||
SPA: State Street Bank & Trust Co. | |||||||||||
Series 97-A 0.060% 03/05/14 | 18,600,000 | 18,600,000 | |||||||||
Tennessee Total | 39,615,000 | ||||||||||
Texas – 7.1% | |||||||||||
TX Bexar County Housing Finance Corp. | |||||||||||
Multi-Family Housing, | |||||||||||
Perrin Park Apartments, Series 1996, LOC: Northern Trust Company 0.050% 06/01/28 (03/06/14) (a)(b) | 10,375,000 | 10,375,000 | |||||||||
TX Deutsche Bank Spears/Lifers Trust | |||||||||||
Caddo Mills Texas Independent School District, | |||||||||||
Series 2008-473, Insured: PSF, GTY AGMT: Deutsche Bank AG: 0.080% 08/15/42 (03/06/14) (a)(b)(c) | 10,230,000 | 10,230,000 |
Par ($) | Value ($) | ||||||||||
Houston Taxes Utility Systems, | |||||||||||
Series 2008-511, GTY AGMT: Deutsche Bank AG 0.080% 11/15/25 (03/06/14) (a)(b)(c) | 12,530,000 | 12,530,000 | |||||||||
Lovejoy Independent School District, | |||||||||||
Series 2008-514, GTY AGMT: PSF, LIQ FAC: Deutsche Bank AG: 0.060% 02/15/38 (03/06/14) (a)(b)(c) | 3,520,000 | 3,520,000 | |||||||||
Victoria Independent School District, | |||||||||||
Series 2008-604, GTY AGMT: PSF, LIQ FAC: Deutsche Bank AG: 0.050% 02/15/37 (03/06/14) (a)(b)(c) | 7,610,000 | 7,610,000 | |||||||||
TX Gregg County Housing Finance Corp. | |||||||||||
Bailey Properties LLC, | |||||||||||
Series 2004 A, Guarantor: FNMA, LIQ FAC: FNMA: 0.030% 02/15/23 (03/06/14) (a)(b) | 4,415,000 | 4,415,000 | |||||||||
Summer Green LLC, | |||||||||||
Series 2004 A, Guarantor: FNMA, LIQ FAC: FNMA: 0.030% 02/15/23 (03/06/14) (a)(b) | 2,270,000 | 2,270,000 | |||||||||
TX Harris County Health Facilities Development Corp. | |||||||||||
Gulf Coast Regional Blood Center, | |||||||||||
Series 1992, LOC: JPMorgan Chase Bank 0.140% 04/01/17 (03/06/14) (a)(b) | 1,150,000 | 1,150,000 | |||||||||
TX North Texas Tollway | |||||||||||
LOC: JPMorgan Chase Bank: | |||||||||||
0.080% 04/10/14 | 7,000,000 | 7,000,000 | |||||||||
0.080% 04/11/14 | 37,000,000 | 37,000,000 | |||||||||
0.090% 04/09/14 | 15,000,000 | 15,000,000 | |||||||||
TX Northside Independent School District | |||||||||||
Series 2007 A | |||||||||||
Guarantor: PSF 2.000% 06/01/14 | 2,170,000 | 2,179,608 | |||||||||
TX Permanent University Fund | |||||||||||
Series 2013, | |||||||||||
3.000% 07/01/14 | 5,970,000 | 6,027,041 |
See Accompanying Notes to Financial Statements.
18
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
TX Round Rock Independent School District | |||||||||||
Series 2007, | |||||||||||
Guarantor: PSF, LIQ FAC: Wells Fargo Bank N.A. 0.050% 08/01/32 (03/06/14) (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 0.090% 12/01/21 (03/06/14) (a)(b) | 4,245,000 | 4,245,000 | |||||||||
TX State | |||||||||||
Series 2013 B | |||||||||||
SPA: Bank of Ny Mellon 0.040% 12/01/43 (03/05/14) (a)(b) | 18,000,000 | 18,000,000 | |||||||||
Series 2013: | |||||||||||
0.020% 03/01/30 (03/05/14) (b)(d) | 400,000 | 400,000 | |||||||||
2.000% 08/28/14 | 126,575,000 | 127,721,245 | |||||||||
TX Texas A&M University | |||||||||||
Series B | |||||||||||
0.050% 04/03/14 | 21,000,000 | 21,000,000 | |||||||||
Texas Total | 301,467,894 | ||||||||||
Utah – 1.9% | |||||||||||
UT Housing Corp. | |||||||||||
Multi-Family Housing, | |||||||||||
Miller Timbergate Apartments LLC, Series 2009 A, LIQ FAC: FHLMC, GTY AGMT: FNMA 0.080% 04/01/42 (03/06/14) (a)(b) | 3,125,000 | 3,125,000 | |||||||||
UT Intermountain Power Agency | |||||||||||
Series B-1 | |||||||||||
SPA: JPMorgan Chase Bank 0.110% 06/13/14 | 18,700,000 | 18,700,000 | |||||||||
UT Weber County | |||||||||||
IHC Health Services, Inc., | |||||||||||
Series 2000 C, SPA: Bank of New York Mellon 0.030% 02/15/35 (03/03/14) (a)(b) | 59,500,000 | 59,500,000 | |||||||||
Utah Total | 81,325,000 |
Par ($) | Value ($) | ||||||||||
Vermont – 0.1% | |||||||||||
VT Educational & Health Buildings Financing Agency | |||||||||||
Springfield Hospital, | |||||||||||
Series 2002 A, LOC: TD Bank N.A. 0.030% 09/01/31 (03/06/14) (a)(b) | 6,095,000 | 6,095,000 | |||||||||
Vermont Total | 6,095,000 | ||||||||||
Virginia – 1.1% | |||||||||||
VA Chesapeake Redevelopment & Housing Authority | |||||||||||
Great Bridge Apartments LLC, | |||||||||||
Series 2008 A, DPCE: FNMA, LIQ FAC: FNMA 0.050% 01/15/41 (03/06/14) (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 Company 0.050% 10/01/25 (03/05/14) (a)(b) | 2,500,000 | 2,500,000 | |||||||||
Series 1988 D, LOC: Northern Trust Company 0.050% 10/01/25 (03/05/14) (a)(b) | 1,200,000 | 1,200,000 | |||||||||
VA Loudoun County Industrial Development Authority | |||||||||||
Jack Kent Cooke Foundation, | |||||||||||
Series 2004, LOC: Northern Trust Company 0.050% 06/01/34 (03/05/14) (a)(b) | 12,500,000 | 12,500,000 | |||||||||
VA Public Building Authority | |||||||||||
Series 2007 A, | |||||||||||
5.000% 08/01/14 | 1,000,000 | 1,020,083 | |||||||||
VA Public School Authority | |||||||||||
Series 2008 A, | |||||||||||
Insured: State Intercept Program 5.000% 08/01/14 | 5,410,000 | 5,518,480 | |||||||||
VA Winchester Industrial Development Authority | |||||||||||
Westminster-Canterbury of Winchester, Inc., | |||||||||||
Series 2005 B, LOC: Branch Banking & Trust 0.030% 01/01/35 (03/06/14) (a)(b) | 3,980,000 | 3,980,000 | |||||||||
Virginia Total | 45,343,563 |
See Accompanying Notes to Financial Statements.
19
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Washington – 1.1% | |||||||||||
WA Deutsche Bank Spears/Lifers Trust | |||||||||||
King County, | |||||||||||
Series 2008-598, LIQ FAC: Deutsche Bank AG 0.050% 01/01/28 (03/06/14) (a)(b)(c) | 7,000,000 | 7,000,000 | |||||||||
Washington State, | |||||||||||
Series 2008-599, LIQ FAC: Deutsche Bank AG 0.060% 01/01/30 (03/06/14) (a)(b)(c) | 9,805,000 | 9,805,000 | |||||||||
WA Eclipse Funding Trust | |||||||||||
King County, | |||||||||||
Series 2007, LOC: U.S. Bank N.A. 0.030% 12/01/31 (03/06/14) (a)(b)(c) | 3,335,000 | 3,335,000 | |||||||||
WA Health Care Facilities Authority | |||||||||||
Catholic Health Initiatives, | |||||||||||
Series 2002 B, SPA: JPMorgan Chase Bank N.A. 0.150% 03/01/32 (03/05/14) (a)(b) | 11,300,000 | 11,300,000 | |||||||||
WA Housing Finance Commission | |||||||||||
Artspace Everett LP, | |||||||||||
Series 2008 B, Credit Support: FHLMC, LIQ FAC: FHLMC: 0.040% 12/01/41 (03/05/14) (a)(b) | 3,200,000 | 3,200,000 | |||||||||
Pioneer Human Services, | |||||||||||
Series 2009 D, LOC: U.S. Bank N.A. 0.060% 07/01/29 (03/05/14) (a)(b) | 3,405,000 | 3,405,000 | |||||||||
Single Family Housing, | |||||||||||
Series 2009, DPCE: GNMA/FNMA/FHLMC, LIQ FAC: State Street Bank & Trust Co.: 0.030% 06/01/39 (03/06/14) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
The Evergreen School, | |||||||||||
Series 2002, LOC: Wells Fargo Bank N.A. 0.140% 07/01/28 (03/06/14) (a)(b) | 1,435,000 | 1,435,000 |
Par ($) | Value ($) | ||||||||||
WA Seattle Housing Authority | |||||||||||
Bayview Manor Homes, | |||||||||||
Series 1994 B, LOC: U.S. Bank N.A. 0.030% 05/01/19 (03/06/14) (a)(b) | 1,675,000 | 1,675,000 | |||||||||
Washington Total | 47,155,000 | ||||||||||
West Virginia – 0.5% | |||||||||||
WV Deutsche Bank Spears/Lifers Trust | |||||||||||
Series 2007-385, | |||||||||||
GTY AGMT: Deutsche Bank AG, LIQ FAC: Deutsche Bank AG 0.090% 04/01/30 (03/06/14) (a)(b)(c) | 2,790,000 | 2,790,000 | |||||||||
WV Economic Development Authority | |||||||||||
Appalachian Power Co., | |||||||||||
Series 2009 B, LOC: Sumitomo Mitsui Banking 0.030% 12/01/42 (03/06/14) (a)(b) | 17,800,000 | 17,800,000 | |||||||||
West Virginia Total | 20,590,000 | ||||||||||
Wisconsin – 0.9% | |||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Bay Area Medical Center, Inc., | |||||||||||
Series 2008, LOC: BMO Harris N.A. 0.040% 02/01/38 (03/03/14) (a)(b) | 14,260,000 | 14,260,000 | |||||||||
WI Public Finance Authority | |||||||||||
Glenridge on Palmer Ranch, | |||||||||||
Series 2011 B, LOC: Bank of Scotland 0.050% 06/01/41 (03/03/14) (a)(b) | 24,575,000 | 24,575,000 | |||||||||
Wisconsin Total | 38,835,000 | ||||||||||
Total Municipal Bonds (cost of $4,174,114,680) | 4,174,114,680 |
See Accompanying Notes to Financial Statements.
20
BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Closed-End Investment Companies – 2.4% | |||||||||||
Par ($) | Value ($) | ||||||||||
California – 0.4% | |||||||||||
CA Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2010 3, | |||||||||||
LIQ FAC: Deutsche Bank AG 0.130% 03/01/40 (03/06/14) (a)(b)(c) | 8,200,000 | 8,200,000 | |||||||||
Series 2010 4, | |||||||||||
LIQ FAC: Citibank N.A. 0.090% 12/01/40 (03/06/14) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
California Total | 18,200,000 | ||||||||||
New York – 0.8% | |||||||||||
NY Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2013, | |||||||||||
LIQ FAC: Citibank N.A.: 0.090% 12/01/40 (03/06/14) (a)(b)(c) | 15,000,000 | 15,000,000 | |||||||||
0.090% 08/01/40 (03/06/14) (a)(b)(c) | 15,000,000 | 15,000,000 | |||||||||
NY Nuveen Performance Plus Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Deutsche Bank AG 0.120% 03/01/40 (03/06/14) (a)(b)(c) | 2,300,000 | 2,300,000 | |||||||||
New York Total | 32,300,000 | ||||||||||
Other – 1.2% | |||||||||||
Nuveen AMT-Free Municipal Income Fund | |||||||||||
Series 2013 2-1309, | |||||||||||
LIQ FAC: Citibank N.A. 0.110% 12/01/40 (03/06/14) (a)(b)(c) | 2,250,000 | 2,250,000 | |||||||||
Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.110% 12/01/40 (03/06/14) (a)(b)(c) | 49,900,000 | 49,900,000 | |||||||||
Other Total | 52,150,000 | ||||||||||
Total Closed-End Investment Companies (cost of $102,650,000) | 102,650,000 | ||||||||||
Total Investments – 100.3% (cost of $4,276,764,680) (g) | 4,276,764,680 | ||||||||||
Other Assets & Liabilities, Net – (0.3)% | (13,581,650 | ) | |||||||||
Net Assets – 100.0% | 4,263,183,030 |
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 February 28, 2014.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(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 February 28, 2014, these securities, which are not illiquid, amounted to $995,169,500 or 23.3% 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 February 28, 2014.
(e) Zero coupon bond.
(f) Security purchased on a delayed delivery basis.
(g) Cost for federal income tax purposes is $4,276,764,680.
The following table summarizes the inputs used, as of February 28, 2014, 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 | $ | — | $ | 4,174,114,680 | $ | — | $ | 4,174,114,680 | |||||||||||
Total Closed-End Investment Companies | — | 102,650,000 | — | 102,650,000 | |||||||||||||||
Total Investments | $ | — | $ | 4,276,764,680 | $ | — | $ | 4,276,764,680 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 97.9 | ||||||
Closed-End Investment Companies | 2.4 | ||||||
100.3 | |||||||
Other Assets & Liabilities, Net | (0.3 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
DRIVERs | Derivative Inverse Tax-Exempt Receipts | ||||||
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 | ||||||
PSF | Guaranteed by Permanent School Fund | ||||||
PUTTERs | Puttable Tax-Exempt Receipts | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
21
Statement of Assets and Liabilities – BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 4,276,764,680 | |||||||||
Cash | 25,964 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 75 | ||||||||||
Interest | 4,670,335 | ||||||||||
Expense reimbursement due from investment advisor | 21,015 | ||||||||||
Trustees' deferred compensation plan | 23,796 | ||||||||||
Prepaid expenses | 111,258 | ||||||||||
Total Assets | 4,281,617,123 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased on a delayed delivery basis | 18,000,000 | ||||||||||
Fund shares repurchased | 2,500 | ||||||||||
Distributions | 5 | ||||||||||
Investment advisory fee | 149,668 | ||||||||||
Administration fee | 121,212 | ||||||||||
Pricing and bookkeeping fees | 22,600 | ||||||||||
Transfer agent fee | 12,335 | ||||||||||
Trustees' fees | 13,274 | ||||||||||
Custody fee | 16,243 | ||||||||||
Chief compliance officer expenses | 2,397 | ||||||||||
Trustees' deferred compensation plan | 23,796 | ||||||||||
Other liabilities | 70,063 | ||||||||||
Total Liabilities | 18,434,093 | ||||||||||
Net Assets | 4,263,183,030 | ||||||||||
Net Assets Consist of | Paid-in capital | 4,263,018,380 | |||||||||
Undistributed net investment income | 241,409 | ||||||||||
Accumulated net realized loss | (76,759 | ) | |||||||||
Net Assets | 4,263,183,030 |
See Accompanying Notes to Financial Statements.
22
Statement of Assets and Liabilities (continued) – BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
Adviser Class Shares | Net assets | $ | 10,343,432 | ||||||||
Shares outstanding | 10,343,506 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 1,162,290,123 | ||||||||
Shares outstanding | 1,162,298,694 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 4,252,659 | ||||||||
Shares outstanding | 4,252,692 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 46,908 | ||||||||
Shares outstanding | 46,909 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 22,993,674 | ||||||||
Shares outstanding | 22,993,846 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 3,665,891 | ||||||||
Shares outstanding | 3,665,925 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 10,000 | ||||||||
Shares outstanding | 10,000 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 3,059,580,343 | ||||||||
Shares outstanding | 3,059,601,170 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
23
Statement of Operations – BofA Tax-Exempt Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 2,279,543 | |||||||||
Expenses | Investment advisory fee | 3,088,663 | |||||||||
Administration fee | 1,989,109 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 7,110 | ||||||||||
Investor Class Shares | 2,718 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 8,806 | ||||||||||
Daily Class Shares | 5,078 | ||||||||||
Investor Class Shares | 6,795 | ||||||||||
Liquidity Class Shares | 12 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 4,663 | ||||||||||
Trust Class Shares | 1,430,050 | ||||||||||
Transfer agent fee | 33,191 | ||||||||||
Pricing and bookkeeping fees | 85,254 | ||||||||||
Trustees' fees | 25,024 | ||||||||||
Custody fee | 25,442 | ||||||||||
Chief compliance officer expenses | 7,045 | ||||||||||
Other expenses | 244,268 | ||||||||||
Total Expenses | 6,963,228 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (3,219,093 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (8,805 | ) | |||||||||
Daily Class Shares | (12,184 | ) | |||||||||
Institutional Class Shares | (4,652 | ) | |||||||||
Investor Class Shares | (9,514 | ) | |||||||||
Liquidity Class Shares | (11 | ) | |||||||||
Trust Class Shares | (1,429,426 | ) | |||||||||
Net Expenses | 2,279,543 | ||||||||||
Net Investment Income | — | ||||||||||
Net realized gain on investments | 69,787 | ||||||||||
Net Increase Resulting from Operations | 69,787 |
See Accompanying Notes to Financial Statements.
24
Statement of Changes in Net Assets – BofA Tax-Exempt Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | — | 257,350 | ||||||||||||
Net realized gain on investments | 69,787 | 48,514 | |||||||||||||
Net increase resulting from operations | 69,787 | 305,864 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | — | (232 | ) | ||||||||||||
Capital Class Shares | — | (150,396 | ) | ||||||||||||
Daily Class Shares | — | (162 | ) | ||||||||||||
Institutional Capital Shares | — | (2,633 | ) | ||||||||||||
Institutional Class Shares | — | (985 | ) | ||||||||||||
Investor Class | — | (192 | ) | ||||||||||||
Trust Class Shares | — | (102,750 | ) | ||||||||||||
Total distributions to shareholders | — | (257,350 | ) | ||||||||||||
Net Capital Stock Transactions | 184,256,190 | (298,702,166 | ) | ||||||||||||
Total increase (decrease) in net assets | 184,325,977 | (298,653,652 | ) | ||||||||||||
Net Assets | Beginning of period | 4,078,857,053 | 4,377,510,705 | ||||||||||||
End of period | 4,263,183,030 | 4,078,857,053 | |||||||||||||
Undistributed net investment income at end of period | 241,409 | 241,409 |
See Accompanying Notes to Financial Statements.
25
Statement of Changes in Net Assets (continued) – BofA Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 16,404,907 | 16,404,907 | 54,456,984 | 54,456,984 | |||||||||||||||
Distributions reinvested | — | — | 51 | 51 | |||||||||||||||
Redemptions | (12,732,278 | ) | (12,732,278 | ) | (53,424,797 | ) | (53,424,797 | ) | |||||||||||
Net increase | 3,672,629 | 3,672,629 | 1,032,238 | 1,032,238 | |||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 594,421,326 | 594,421,327 | 2,074,472,273 | 2,074,472,273 | |||||||||||||||
Distributions reinvested | — | — | 8,950 | 8,950 | |||||||||||||||
Redemptions | (749,362,782 | ) | (749,362,782 | ) | (1,861,455,365 | ) | (1,861,455,365 | ) | |||||||||||
Net increase (decrease) | (154,941,456 | ) | (154,941,455 | ) | 213,025,858 | 213,025,858 | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 5,482,857 | 5,482,857 | 19,227,240 | 19,227,240 | |||||||||||||||
Redemptions | (5,180,494 | ) | (5,180,494 | ) | (22,706,565 | ) | (22,706,565 | ) | |||||||||||
Net increase (decrease) | 302,363 | 302,363 | (3,479,325 | ) | (3,479,325 | ) | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | — | — | 13,874,645 | 13,874,645 | |||||||||||||||
Distributions reinvested | — | — | 5 | 5 | |||||||||||||||
Redemptions | — | — | (373,870,390 | ) | (373,870,390 | ) | |||||||||||||
Net decrease | — | — | (359,995,740 | ) | (359,995,740 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 12,830 | 12,830 | 62,908,207 | 62,908,207 | |||||||||||||||
Distributions reinvested | — | — | 818 | 818 | |||||||||||||||
Redemptions | (1,499,117 | ) | (1,499,117 | ) | (100,085,336 | ) | (100,085,336 | ) | |||||||||||
Net decrease | (1,486,287 | ) | (1,486,287 | ) | (37,176,311 | ) | (37,176,311 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 9,949,217 | 9,949,217 | 21,237,427 | 21,237,427 | |||||||||||||||
Distributions reinvested | — | — | 44 | 44 | |||||||||||||||
Redemptions | (12,916,899 | ) | (12,916,899 | ) | (18,865,467 | ) | (18,865,467 | ) | |||||||||||
Net increase (decrease) | (2,967,682 | ) | (2,967,682 | ) | 2,372,004 | 2,372,004 | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | — | — | 10,000 | 10,000 | |||||||||||||||
Redemptions | — | — | (217,905 | ) | (217,905 | ) | |||||||||||||
Net decrease | — | — | (207,905 | ) | (207,905 | ) | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 1,584,134,232 | 1,584,134,233 | 3,083,859,521 | 3,083,859,521 | |||||||||||||||
Distributions reinvested | — | — | 145 | 145 | |||||||||||||||
Redemptions | (1,244,457,613 | ) | (1,244,457,611 | ) | (3,198,132,651 | ) | (3,198,132,651 | ) | |||||||||||
Net increase (decrease) | 339,676,619 | 339,676,622 | (114,272,985 | ) | (114,272,985 | ) |
See Accompanying Notes to Financial Statements.
26
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | — | (d) | — | (e) | 0.0089 | ||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.0089 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | — | (e) | (0.0089 | ) | |||||||||||||||||
From net realized gains | — | — | — | (d) | — | (d) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.0089 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.02 | % | 0.00 | %(i) | 0.00 | %(i) | 0.89 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(j) | 0.16 | %(k) | 0.21 | %(k) | 0.31 | %(k) | 0.35 | %(k) | 0.48 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.41 | %(j) | 0.35 | % | 0.30 | % | 0.21 | % | 0.17 | % | 0.05 | % | |||||||||||||||
Net investment income | — | — | %(i)(k) | — | (k) | — | %(i)(k) | — | %(i)(k) | 0.78 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 10,343 | $ | 6,671 | $ | 5,638 | $ | 11,797 | $ | 48,725 | $ | 71,050 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
27
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (e) | — | (e) | 0.001 | 0.0014 | 0.0113 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | — | (f) | |||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | 0.001 | 0.0014 | 0.0113 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (e) | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | ||||||||||||||||
From net realized gains | — | — | — | (e) | — | (e) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (e) | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.00 | %(i) | 0.01 | % | 0.04 | % | 0.10 | % | 0.13 | % | 1.14 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(j) | 0.16 | %(k) | 0.19 | %(k) | 0.20 | %(k) | 0.20 | %(k) | 0.23 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.16 | %(j) | 0.11 | % | 0.08 | % | 0.07 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.01 | %(k) | 0.02 | %(k) | 0.10 | %(k) | 0.14 | %(k) | 1.03 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 1,162,290 | $ | 1,317,210 | $ | 1,104,177 | $ | 1,205,520 | $ | 1,903,203 | $ | 3,922,964 |
(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 at net asset value assuming all distributions reinvested.
(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) Not annualized.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
28
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Daily Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | (d) | — | (d) | — | (e) | 0.0062 | |||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.0062 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.0062 | ) | ||||||||||||||||
From net realized gains | — | — | — | (d) | — | (d) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | — | (d) | — | (e) | (0.0062 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.02 | % | 0.00 | %(i) | 0.00 | %(i) | 0.62 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(j) | 0.18 | %(k) | 0.21 | %(k) | 0.30 | %(k) | 0.34 | %(k) | 0.76 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.76 | %(j) | 0.69 | % | 0.66 | % | 0.57 | % | 0.53 | % | 0.12 | % | |||||||||||||||
Net investment income | — | — | %(i)(k) | — | %(i)(k) | — | %(i)(k) | — | (k) | 0.64 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 4,253 | $ | 3,950 | $ | 7,429 | $ | 6,093 | $ | 38,206 | $ | 59,499 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
29
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Capital Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (e) | — | (e) | 0.001 | 0.0014 | 0.0113 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | — | (f) | |||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | 0.001 | 0.0014 | 0.0113 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (e) | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | ||||||||||||||||
From net realized gains | — | — | — | (e) | — | (e) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (e) | — | (e) | (0.001 | ) | (0.0014 | ) | (0.0113 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.00 | %(i) | 0.02 | % | 0.04 | % | 0.10 | % | 0.13 | % | 1.14 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(j) | 0.20 | %(k)(l) | 0.19 | %(k) | 0.20 | %(k) | 0.20 | %(k) | 0.23 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.16 | %(j) | 0.07 | % | 0.08 | % | 0.07 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | — | 0.01 | %(k) | 0.02 | %(k) | 0.10 | %(k) | 0.14 | %(k) | 1.14 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 47 | $ | 47 | $ | 360,031 | $ | 328,612 | $ | 424,460 | $ | 590,847 |
(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 at net asset value assuming all distributions reinvested.
(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) Not annualized.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
(l) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | (d) | 0.001 | 0.0010 | 0.0109 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | 0.001 | 0.0010 | 0.0109 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | (0.001 | ) | (0.0010 | ) | (0.0109 | ) | ||||||||||||||||
From net realized gains | — | — | — | (d) | — | (d) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | (0.001 | ) | (0.0010 | ) | (0.0109 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.03 | % | 0.06 | % | 0.09 | % | 1.10 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(j) | 0.17 | %(k) | 0.21 | %(k) | 0.23 | %(k) | 0.24 | %(k) | 0.27 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.20 | %(j) | 0.13 | % | 0.10 | % | 0.08 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | — | — | %(i)(k) | — | %(i)(k) | 0.07 | %(k) | 0.10 | %(k) | 1.06 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 22,994 | $ | 24,480 | $ | 61,654 | $ | 88,637 | $ | 187,997 | $ | 445,549 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (e) | — | — | (e) | — | 0.0080 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | — | (f) | |||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | — | (e) | — | (f) | 0.0080 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (e) | — | (e) | — | (e) | — | (f) | (0.0080 | ) | ||||||||||||||||
From net realized gains | — | — | — | (e) | — | (e) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (e) | — | (e) | — | (e) | — | (f) | (0.0080 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (g)(h) | 0.00 | %(i) | 0.00 | %(j) | 0.02 | % | 0.00 | %(j) | 0.00 | % | 0.81 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(k) | 0.17 | %(l) | 0.21 | %(l) | 0.27 | %(l) | 0.34 | %(l) | 0.57 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.51 | %(k) | 0.45 | % | 0.41 | % | 0.35 | % | 0.30 | % | 0.06 | % | |||||||||||||||
Net investment income | — | — | %(j)(l) | — | (l) | — | %(j)(l) | — | (l) | 0.86 | %(l) | ||||||||||||||||
Net assets, end of period (000s) | $ | 3,666 | $ | 6,633 | $ | 4,261 | $ | 2,534 | $ | 1,333 | $ | 8,960 |
(a) On October 1, 2011, Class A shares were converted to 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) Total return at net asset value assuming all distributions reinvested.
(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) Not annualized.
(j) Rounds to less than 0.01%.
(k) Annualized.
(l) 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 date for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | — | (d) | 0.0001 | 0.0098 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | 0.0001 | 0.0098 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | (0.0001 | ) | (0.0098 | ) | ||||||||||||||||
From net realized gains | — | — | — | (d) | — | (d) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | — | (d) | (0.0001 | ) | (0.0098 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.02 | % | 0.00 | %(i) | 0.01 | % | 0.99 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(j) | 0.20 | %(k) | 0.21 | %(k) | 0.31 | %(k) | 0.33 | %(k) | 0.38 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.39 | %(j) | 0.32 | % | 0.30 | % | 0.21 | % | 0.19 | % | 0.15 | % | |||||||||||||||
Net investment income | — | — | %(i)(k) | — | (k) | — | %(i)(k) | 0.01 | %(k) | 1.11 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 10 | $ | 10 | $ | 218 | $ | 218 | $ | 12,412 | $ | 29,865 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | — | (d) | — | — | (d) | 0.0004 | 0.0103 | |||||||||||||||||||
Net realized gain (loss) on investments | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | — | (e) | |||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | 0.0004 | 0.0103 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | — | (d) | — | (d) | — | (d) | (0.0004 | ) | (0.0103 | ) | ||||||||||||||||
From net realized gains | — | — | — | (d) | — | (d) | — | — | |||||||||||||||||||
Total Distributions to Shareholders | — | — | (d) | — | (d) | — | (d) | (0.0004 | ) | (0.0103 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h) | 0.00 | %(i) | 0.02 | % | 0.02 | % | 0.04 | % | 1.04 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.11 | %(j) | 0.17 | %(k) | 0.21 | %(k) | 0.28 | %(k) | 0.30 | %(k) | 0.33 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.26 | %(j) | 0.20 | % | 0.16 | % | 0.09 | % | 0.07 | % | 0.05 | % | |||||||||||||||
Net investment income | — | — | %(i)(k) | — | (k) | 0.02 | %(k) | 0.04 | %(k) | 1.05 | %(k) | ||||||||||||||||
Net assets, end of period (000s) | $ | 3,059,580 | $ | 2,719,857 | $ | 2,834,101 | $ | 3,058,369 | $ | 3,374,811 | $ | 5,587,196 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
34
Notes to Financial Statements – BofA Tax-Exempt Reserves
February 28, 2014 (Unaudited)
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, 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 Class 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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule being 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.
35
BofA Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or
short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
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 year ended August 31, 2013 was as follows:
Distributions paid from | |||||||
Tax-Exempt Income | $ | 257,350 | |||||
Ordinary Income* | — |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
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BofA Tax-Exempt Reserves, February 28, 2014 (Unaudited)
As of August 31, 2013, the Fund had post-Effective Date capital losses as follows:
Short-Term Losses | |||
$ | 146,546 |
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 50 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 (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly investment advisory fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor 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
37
BofA Tax-Exempt Reserves, February 28, 2014 (Unaudited)
on an annualized percentage rate of 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Daily Class, Investor Class and Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act permits the Fund to compensate and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class, Daily Class, Investor Class and Liquidity Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | 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 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
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 Shareholder Servicing Plan fees through December 31, 2014 at an annual rate of 0.10% of the Fund's Liquidity Class shares average daily net assets, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such payments and/or reimbursements 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 the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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 | % |
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BofA Tax-Exempt Reserves, February 28, 2014 (Unaudited)
Fee Waivers and Expense Reimbursements
The Advisor 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, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/2014 | |||||||||||||||
$ | 3,197,030 | $ | 3,240,857 | $ | 3,595,998 | $ | 10,033,885 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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 Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 6. Shareholder Concentration
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
39
BofA Tax-Exempt Reserves, February 28, 2014 (Unaudited)
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 7. Significant Risks and Contingencies
The Fund's risks include, but are not limited to the following:
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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
Legal Proceedings
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
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Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
41
The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.00% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual
advisory fees, administration fees, actual non-management fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA Tax-Exempt Reserves, the Board noted that the Fund's Contractual Management Fee Rate was above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
42
Fund Performance. The Board considered the investment performance results for each of the Funds over multiple measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
In considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. The Board received information showing that specific classes of certain Funds generally outperformed their peers in the more recent periods, while certain other classes underperformed their peers in the more recent periods. In particular, the Board noted that the net return investment performance of certain classes of BofA Tax-Exempt Reserves was below the median range of such Fund's Universe (meaning that the Fund's performance ranked in the fourth or fifth quintile relative to its Universe) over certain recent periods.
Where net return investment performance of a class of a particular Fund was below the median range of the Fund's Universe, the Board, in considering the re-approval of the Advisory Agreement for such Fund, generally noted other applicable factors, including, among others, stronger relative net return performance of other classes or over other periods, the relatively tight dispersion of performance data within a particular Universe, the Fund's Actual Management Fee Rate, Contractual Management Fee Rate and/or total expense ratio, the Fund's expense cap and waiver arrangements, the composition and share classes used in the comparisons and BoAA's emphasis on liquidity and capital preservation, as well as its organizational strength and capacity and its history with the Funds.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The Board also reviewed information compiled by Lipper
comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
43
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
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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 June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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 Tax-Exempt Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-TER-44/265606-0414
BofATM Funds
Semiannual Report
February 28, 2014
• 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 | 5 | ||||||
Statement of Operations | 7 | ||||||
Statement of Changes in Net Assets | 8 | ||||||
Financial Highlights | 10 | ||||||
Notes to Financial Statements | 19 | ||||||
Board Consideration and Re-Approval of Investment Advisory Agreement | 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 Treasury Reserves
As a fund shareholder, you incur ongoing costs, which generally include investment advisory fees, distribution (Rule 12b-1) and service 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
09/01/13 – 02/28/14 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.55 | 0.25 | 0.25 | 0.05 | (a) | |||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.30 | 0.30 | 0.06 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.30 | 0.30 | 0.06 |
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 365.
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.
(a) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares,fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
1
Investment Portfolio – BofA Treasury Reserves
February 28, 2014 (Unaudited)
Government & Agency Obligations – 20.8% | |||||||||||
Par ($) | Value ($) | ||||||||||
U.S. Government Obligations – 20.8% | |||||||||||
U.S. Treasury Bill | |||||||||||
0.086% 08/14/14 (a) | 44,090,000 | 44,072,516 | |||||||||
U.S. Treasury Floating Rate Note | |||||||||||
0.090% 01/31/16 (03/04/14) (b)(c) | 15,130,000 | 15,127,521 | |||||||||
U.S. Treasury Note | |||||||||||
0.125% 07/31/14 | 88,180,000 | 88,189,350 | |||||||||
0.250% 06/30/14 | 192,400,000 | 192,511,071 | |||||||||
0.250% 09/15/14 | 38,500,000 | 38,531,801 | |||||||||
0.250% 11/30/14 | 44,090,000 | 44,127,200 | |||||||||
0.250% 12/15/14 | 180,615,000 | 180,779,267 | |||||||||
0.250% 01/15/15 | 140,300,000 | 140,436,959 | |||||||||
0.250% 01/31/15 | 162,625,000 | 162,802,003 | |||||||||
0.375% 11/15/14 | 96,320,000 | 96,507,401 | |||||||||
0.625% 07/15/14 | 44,200,000 | 44,288,638 | |||||||||
2.125% 11/30/14 | 88,290,000 | 89,607,097 | |||||||||
2.375% 08/31/14 | 123,960,000 | 125,369,647 | |||||||||
2.375% 09/30/14 | 140,500,000 | 142,359,996 | |||||||||
2.375% 10/31/14 | 88,180,000 | 89,499,947 | |||||||||
2.625% 06/30/14 | 88,600,000 | 89,351,889 | |||||||||
2.625% 07/31/14 | 91,840,000 | 92,821,245 | |||||||||
U.S. Government Obligations Total | 1,676,383,548 | ||||||||||
Total Government & Agency Obligations (cost of $1,676,383,548) | 1,676,383,548 |
Repurchase Agreements – 79.2%
Repurchase agreement with Bank of Nova Scotia, dated 02/28/14, due 03/03/14 at 0.050%, collateralized by U.S. Treasury obligations with various maturities to 10/31/17, market value $71,400,308 (repurchase proceeds $70,000,292) | 70,000,000 | 70,000,000 | |||||||||
Repurchase agreement with Bank of Nova Scotia, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by a U.S. Treasury obligation maturing 02/29/16, market value $77,279,301 (repurchase proceeds $75,763,947) | 75,763,000 | 75,763,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Barclays Capital, dated 02/28/14, due 03/03/14 at 0.040%, collateralized by a U.S. Treasury obligation maturing 09/30/15, market value $15,300,109 (repurchase proceeds $15,000,050) | 15,000,000 | 15,000,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 02/28/14, due 03/03/14 at 0.050%, collateralized by U.S. Treasury obligations with various maturities to 05/31/17, market value $102,000,518 (repurchase proceeds $100,000,417) | 100,000,000 | 100,000,000 | |||||||||
Repurchase agreement with BNP Paribas, dated 02/28/14, due 03/03/14 at 0.060%, collateralized by U.S. Government Agency obligations with various maturities to 11/20/43, market value $408,002,267 (repurchase proceeds $400,002,000) | 400,000,000 | 400,000,000 | |||||||||
Repurchase agreement with Citibank N.A., dated 02/28/14, due 03/03/14 at 0.050%, collateralized by U.S. Treasury obligations with various maturities to 09/30/19, market value $71,400,386 (repurchase proceeds $70,000,292) | 70,000,000 | 70,000,000 | |||||||||
Repurchase agreement with Credit Agricole SA, dated 02/28/14, due 03/03/14 at 0.080%, collateralized by a U.S. Treasury obligation maturing 04/30/20, market value $102,000,733 (repurchase proceeds $100,000,667) | 100,000,000 | 100,000,000 |
See Accompanying Notes to Financial Statements.
2
BofA Treasury Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Credit Agricole SA, dated 02/28/14, due 03/07/14 at 0.050%, collateralized by U.S. Treasury obligations with various maturities to 02/15/42, market value $255,022,047 (repurchase proceeds $250,002,431) | 250,000,000 | 250,000,000 | |||||||||
Repurchase agreement with Deutsche Bank Securities, dated 02/28/14, due 03/03/14 at 0.050%, collateralized by U.S. Government Agency obligations and U.S. Treasury obligations with various maturities to 01/15/55, market value $331,501,445 (repurchase proceeds $325,001,354) | 325,000,000 | 325,000,000 | |||||||||
Repurchase agreement with Federal Reserve Bank of New York, dated 02/28/14, due 03/03/14 at 0.050%, collateralized by a U.S. Treasury obligation maturing 07/31/18, market value $2,725,011,439 (repurchase proceeds $2,725,011,354) | 2,725,000,000 | 2,725,000,000 | |||||||||
Repurchase agreement with Goldman Sachs & Co., dated 02/28/14, due 03/03/14 at 0.020%, collateralized by U.S. Treasury obligations with various maturities to 02/15/44, market value $386,685,838 (repurchase proceeds $379,103,632) | 379,103,000 | 379,103,000 | |||||||||
Repurchase agreement with HSBC Securities USA, Inc., dated 02/28/14, due 03/07/14 at 0.050%, collateralized by U.S. Treasury obligations with various maturities to 11/15/21, market value $102,005,087 (repurchase proceeds $100,000,972) | 100,000,000 | 100,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 01/22/14, due 03/21/14 at 0.060% collateralized by U.S. Treasury obligations with various maturities to 09/30/17, market value $51,003,481 (repurchase proceeds $50,004,833) | 50,000,000 | 50,000,000 | |||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 02/06/14, due 03/07/14 at 0.060% collateralized by U.S. Treasury obligations with various maturities to 11/15/43, market value $76,503,276 (repurchase proceeds $75,003,625) | 75,000,000 | 75,000,000 | |||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 02/27/14, due 03/06/14 at 0.040% collateralized by U.S. Treasury obligations with various maturities to 08/15/41, market value $306,001,375 (repurchase proceeds $300,002,333) | 300,000,000 | 300,000,000 | |||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.050% collateralized by a U.S. Treasury obligation maturing 08/31/17, market value $102,000,438 (repurchase proceeds $100,000,417) | 100,000,000 | 100,000,000 | |||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.070% collateralized by U.S. Treasury obligations with various maturities to 11/15/43, market value $714,004,295 (repurchase proceeds $700,004,083) | 700,000,000 | 700,000,000 |
See Accompanying Notes to Financial Statements.
3
BofA Treasury Reserves
February 28, 2014 (Unaudited)
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Mitsubishi UFJ Securities, dated 02/28/14, due 03/03/14 at 0.120%, collateralized by a U.S. Treasury obligation maturing 08/31/17, market value $51,000,516 (repurchase proceeds $50,000,500) | 50,000,000 | 50,000,000 | |||||||||
Repurchase agreement with Societe Generale, dated 02/28/14, due 03/03/14 at 0.050%, collateralized by U.S. Government Agency obligations with various maturities to 01/20/44, market value $306,001,275 (repurchase proceeds $300,001,250) | 300,000,000 | 300,000,000 | |||||||||
Repurchase agreement with TD USA Securities, Inc., dated 02/28/14, due 03/07/14 at 0.050%, collateralized by U.S. Treasury obligations with various maturities to 04/30/20, market value $49,108,136 (repurchase proceeds $48,145,468) | 48,145,000 | 48,145,000 | |||||||||
Repurchase agreement with Wells Fargo, dated 02/28/14, due 03/03/14 at 0.050%, collateralized by U.S. Treasury obligations with various maturities to 02/15/23, market value $71,400,299 (repurchase proceeds $70,000,292) | 70,000,000 | 70,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Wells Fargo, dated 02/28/14, due 03/03/14 at 0.150%, collateralized by U.S. Treasury obligations with various maturities to 02/28/21, market value $102,001,293 (repurchase proceeds $100,001,250) | 100,000,000 | 100,000,000 | |||||||||
Total Repurchase Agreements (cost of $6,403,011,000) | 6,403,011,000 | ||||||||||
Total Investments – 100.0% (cost of $8,079,394,548) (d) | 8,079,394,548 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 3,643,361 | ||||||||||
Net Assets – 100.0% | 8,083,037,909 |
Notes to Investment Portfolio:
(a) The rate shown represents the annualized yield at the date of purchase.
(b) The interest rate shown on floating rate or variable rate securities reflects the rate at February 28, 2014.
(c) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities.
(d) Cost for federal income tax purposes is $8,079,394,548.
The following table summarizes the inputs used, as of February 28, 2014, 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 and Agency Obligations | $ | — | $ | 1,676,383,548 | $ | — | $ | 1,676,383,548 | |||||||||||
Total Repurchase Agreements | — | 6,403,011,000 | — | 6,403,011,000 | |||||||||||||||
Total Investments | $ | — | $ | 8,079,394,548 | $ | — | $ | 8,079,394,548 |
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 six months ended February 28, 2014, 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 February 28, 2014, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Government & Agency Obligations | 20.8 | ||||||
Repurchase Agreements | 79.2 | ||||||
100.0 | |||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
4
Statement of Assets and Liabilities – BofA Treasury Reserves
February 28, 2014 (Unaudited)
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 1,676,383,548 | |||||||||
Repurchase agreements, at amortized cost approximating value | 6,403,011,000 | ||||||||||
Total investments, at value | 8,079,394,548 | ||||||||||
Cash | 526 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 100 | ||||||||||
Interest | 3,637,302 | ||||||||||
Expense reimbursement due from investment advisor | 32,337 | ||||||||||
Trustees' deferred compensation plan | 49,016 | ||||||||||
Prepaid expenses | 261,223 | ||||||||||
Other assets | 60,665 | ||||||||||
Total Assets | 8,083,435,717 | ||||||||||
Liabilities | Payable for: | ||||||||||
Distributions | 32,296 | ||||||||||
Administration fee | 126,485 | ||||||||||
Pricing and bookkeeping fees | 15,427 | ||||||||||
Transfer agent fee | 20,024 | ||||||||||
Trustees' fees | 22,764 | ||||||||||
Audit fee | 27,434 | ||||||||||
Legal fee | 37,694 | ||||||||||
Custody fee | 49,933 | ||||||||||
Chief compliance officer expenses | 4,188 | ||||||||||
Trustees' deferred compensation plan | 49,016 | ||||||||||
Other liabilities | 12,547 | ||||||||||
Total Liabilities | 397,808 | ||||||||||
Net Assets | 8,083,037,909 | ||||||||||
Net Assets Consist of | Paid-in capital | 8,083,017,635 | |||||||||
Overdistributed net investment income | (46,424 | ) | |||||||||
Accumulated net realized gain | 66,698 | ||||||||||
Net Assets | 8,083,037,909 |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities (continued) – BofA Treasury Reserves
February 28, 2014 (Unaudited)
Adviser Class Shares | Net assets | $ | 2,032,934,486 | ||||||||
Shares outstanding | 2,032,907,111 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 4,914,473,923 | ||||||||
Shares outstanding | 4,914,406,250 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 125,805,217 | ||||||||
Shares outstanding | 125,803,473 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 7,982,024 | ||||||||
Shares outstanding | 7,981,909 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 294,782,677 | ||||||||
Shares outstanding | 294,778,444 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 5,557,075 | ||||||||
Shares outstanding | 5,556,975 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 105,618,545 | ||||||||
Shares outstanding | 105,617,101 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 59,506,408 | ||||||||
Shares outstanding | 59,505,562 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 536,377,554 | ||||||||
Shares outstanding | 536,370,174 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
6
Statement of Operations – BofA Treasury Reserves
For the Six Months Ended February 28, 2014 (Unaudited)
($) | |||||||||||
Investment Income | Interest | 2,947,946 | |||||||||
Expenses | Investment advisory fee | 6,302,625 | |||||||||
Administration fee | 4,131,750 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 224,897 | ||||||||||
Investor Class Shares | 3,832 | ||||||||||
Investor II Class Shares | 43,029 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 2,562,606 | ||||||||||
Daily Class Shares | 160,641 | ||||||||||
Investor Class Shares | 9,580 | ||||||||||
Investor II Class Shares | 107,572 | ||||||||||
Liquidity Class Shares | 71,298 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 79,094 | ||||||||||
Investor II Class Shares | 43,029 | ||||||||||
Trust Class Shares | 267,967 | ||||||||||
Transfer agent fee | 74,279 | ||||||||||
Pricing and bookkeeping fees | 78,113 | ||||||||||
Trustees' fees | 36,977 | ||||||||||
Custody fee | 102,741 | ||||||||||
Chief compliance officer expenses | 10,402 | ||||||||||
Other expenses | 337,175 | ||||||||||
Total Expenses | 14,647,607 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (8,545,247 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (2,563,936 | ) | |||||||||
Daily Class Shares | (385,541 | ) | |||||||||
Institutional Class Shares | (78,842 | ) | |||||||||
Investor Class Shares | (13,411 | ) | |||||||||
Investor II Class Shares | (193,551 | ) | |||||||||
Liquidity Class Shares | (71,299 | ) | |||||||||
Trust Class Shares | (267,999 | ) | |||||||||
Net Expenses | 2,527,781 | ||||||||||
Net Investment Income | 420,165 | ||||||||||
Net realized gain on investments | 59,058 | ||||||||||
Net Increase Resulting from Operations | 479,223 |
See Accompanying Notes to Financial Statements.
7
Statement of Changes in Net Assets – BofA Treasury Reserves
Increase (Decrease) in Net Assets | (Unaudited) Six Months Ended February 28, 2014 ($) | Year Ended August 31, 2013 ($) | |||||||||||||
Operations | Net investment income | 420,165 | 930,334 | ||||||||||||
Net realized gain on investments | 59,058 | 7,640 | |||||||||||||
Net increase resulting from operations | 479,223 | 937,974 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (102,503 | ) | (209,889 | ) | |||||||||||
Capital Class Shares | (256,883 | ) | (613,794 | ) | |||||||||||
Daily Class Shares | (6,426 | ) | (8,314 | ) | |||||||||||
Institutional Capital Shares | (252 | ) | (706 | ) | |||||||||||
Institutional Class Shares | (19,773 | ) | (33,961 | ) | |||||||||||
Investor Class | (383 | ) | (637 | ) | |||||||||||
Investor II Class Shares | (4,303 | ) | (9,646 | ) | |||||||||||
Liquidity Class Shares | (2,852 | ) | (6,550 | ) | |||||||||||
Trust Class Shares | (26,796 | ) | (46,836 | ) | |||||||||||
Total distributions to shareholders | (420,171 | ) | (930,333 | ) | |||||||||||
Net Capital Stock Transactions | (1,502,755,309 | ) | 1,233,753,088 | ||||||||||||
Total increase (decrease) in net assets | (1,502,696,257 | ) | 1,233,760,729 | ||||||||||||
Net Assets | Beginning of period | 9,585,734,166 | 8,351,973,437 | ||||||||||||
End of period | 8,083,037,909 | 9,585,734,166 | |||||||||||||
Overdistributed net investment income at end of period | (46,424 | ) | (46,418 | ) |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets (continued) – BofA Treasury Reserves
Capital Stock Activity | |||||||||||||||||||
(Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 5,041,859,231 | 5,041,859,231 | 9,436,380,768 | 9,436,380,768 | |||||||||||||||
Distributions reinvested | 3,769 | 3,769 | 11,084 | 11,084 | |||||||||||||||
Redemptions | (5,053,906,789 | ) | (5,053,906,789 | ) | (9,303,995,620 | ) | (9,303,995,620 | ) | |||||||||||
Net increase (decrease) | (12,043,789 | ) | (12,043,789 | ) | 132,396,232 | 132,396,232 | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 16,052,155,198 | 16,052,155,198 | 35,229,829,786 | 35,229,829,786 | |||||||||||||||
Distributions reinvested | 154,306 | 154,306 | 380,672 | 380,672 | |||||||||||||||
Redemptions | (17,575,582,318 | ) | (17,575,582,318 | ) | (34,254,998,107 | ) | (34,254,998,107 | ) | |||||||||||
Net increase (decrease) | (1,523,272,814 | ) | (1,523,272,814 | ) | 975,212,351 | 975,212,351 | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 19,012,557 | 19,012,557 | 122,098,625 | 122,098,625 | |||||||||||||||
Distributions reinvested | 124 | 124 | 361 | 361 | |||||||||||||||
Redemptions | (23,452,507 | ) | (23,452,507 | ) | (76,459,885 | ) | (76,459,885 | ) | |||||||||||
Net increase (decrease) | (4,439,826 | ) | (4,439,826 | ) | 45,639,101 | 45,639,101 | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 4,909,951 | 4,909,951 | 30,838,459 | 30,838,459 | |||||||||||||||
Distributions reinvested | 4 | 4 | 9 | 9 | |||||||||||||||
Redemptions | (1,075,759 | ) | (1,075,759 | ) | (27,102,492 | ) | (27,102,492 | ) | |||||||||||
Net increase | 3,834,196 | 3,834,196 | 3,735,976 | 3,735,976 | |||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 433,675,825 | 433,675,825 | 1,377,850,455 | 1,377,850,455 | |||||||||||||||
Distributions reinvested | 17,667 | 17,667 | 28,902 | 28,902 | |||||||||||||||
Redemptions | (479,973,314 | ) | (479,973,314 | ) | (1,303,607,373 | ) | (1,303,607,373 | ) | |||||||||||
Net increase (decrease) | (46,279,822 | ) | (46,279,822 | ) | 74,271,984 | 74,271,984 | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 5,834,084 | 5,834,084 | 8,590,172 | 8,590,172 | |||||||||||||||
Distributions reinvested | 84 | 84 | 175 | 175 | |||||||||||||||
Redemptions | (5,858,066 | ) | (5,858,066 | ) | (8,589,462 | ) | (8,589,462 | ) | |||||||||||
Net increase (decrease) | (23,898 | ) | (23,898 | ) | 885 | 885 | |||||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 151,995,093 | 151,995,093 | 202,596,486 | 202,596,486 | |||||||||||||||
Distributions reinvested | 32 | 32 | 106 | 106 | |||||||||||||||
Redemptions | (143,610,068 | ) | (143,610,068 | ) | (208,398,403 | ) | (208,398,403 | ) | |||||||||||
Net increase (decrease) | 8,385,057 | 8,385,057 | (5,801,811 | ) | (5,801,811 | ) | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 9,692,483 | 9,692,483 | 25,951,948 | 25,951,948 | |||||||||||||||
Distributions reinvested | 2,852 | 2,852 | 6,537 | 6,537 | |||||||||||||||
Redemptions | (12,378,416 | ) | (12,378,416 | ) | (35,688,525 | ) | (35,688,525 | ) | |||||||||||
Net decrease | (2,683,081 | ) | (2,683,081 | ) | (9,730,040 | ) | (9,730,040 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 476,156,317 | 476,156,317 | 722,192,551 | 722,192,551 | |||||||||||||||
Distributions reinvested | — | — | 14 | 14 | |||||||||||||||
Redemptions | (402,387,649 | ) | (402,387,649 | ) | (704,164,155 | ) | (704,164,155 | ) | |||||||||||
Net increase | 73,768,668 | 73,768,668 | 18,028,410 | 18,028,410 |
See Accompanying Notes to Financial Statements.
9
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Adviser Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0011 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0011 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (0.0011 | ) | ||||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | — | (d) | — | (d) | — | (0.0011 | ) | ||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g)(h) | 0.01 | % | 0.01 | % | 0.00 | %(i) | 0.00 | % | 0.11 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(j) | 0.12 | %(k) | 0.11 | %(k) | 0.16 | %(k) | 0.17 | %(k) | 0.31 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.46 | %(j) | 0.39 | % | 0.40 | % | 0.35 | % | 0.34 | % | 0.19 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(h)(k) | — | %(h)(k) | — | (k) | 0.13 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 2,032,934 | $ | 2,044,961 | $ | 1,912,565 | $ | 2,933,795 | $ | 3,747,604 | $ | 5,266,200 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
10
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Capital Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.0022 | ||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.0022 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0022 | ) | |||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0022 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.01 | % | 0.01 | %(j) | 0.00 | %(i) | 0.22 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(k) | 0.12 | %(l) | 0.11 | %(l) | 0.14 | %(l) | 0.16 | %(l) | 0.19 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.20 | %(k) | 0.14 | % | 0.15 | % | 0.12 | % | 0.10 | % | 0.06 | % | |||||||||||||||
Net investment income | 0.01 | %(k) | 0.01 | %(l) | — | %(i)(l) | 0.01 | %(l) | — | %(i)(l) | 0.24 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 4,914,474 | $ | 6,437,715 | $ | 5,462,494 | $ | 4,455,824 | $ | 3,785,055 | $ | 5,696,275 |
(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 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) Not annualized.
(i) Rounds to less than 0.01%.
(j) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(k) Annualized.
(l) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
11
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Daily Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0007 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0007 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | — | (0.0007 | ) | |||||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | — | (d) | — | — | (0.0007 | ) | |||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g)(h) | 0.01 | % | 0.01 | % | 0.00 | %(i) | 0.00 | % | 0.07 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(j) | 0.12 | %(k) | 0.11 | %(k) | 0.17 | %(k) | 0.17 | %(k) | 0.34 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.80 | %(j) | 0.74 | % | 0.75 | % | 0.69 | % | 0.69 | % | 0.51 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(h)(k) | — | %(h)(k) | — | (k) | 0.06 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 125,805 | $ | 130,244 | $ | 84,605 | $ | 143,382 | $ | 697,764 | $ | 1,153,305 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Institutional Capital Shares | (Unaudited) Six Months Ended February 28, 2014 | Year Ended August 31, 2013 | Period Ended August 31, 2012 (a) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | |||||||||
Net realized gain on investments | — | (b) | — | (b) | — | ||||||||||
Total from Investment Operations | — | (b) | — | (b) | — | (b) | |||||||||
Less Distributions to Shareholders: | |||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | |||||||||
From net realized gains | — | — | — | (b) | |||||||||||
Total Distributions to Shareholders | — | (b) | — | (b) | — | (b) | |||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Total return (c)(d) | 0.00 | %(e)(f) | 0.01 | % | 0.00 | %(e)(f) | |||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||
Net expenses | 0.05 | %(g)(h) | 0.13 | %(g)(i) | 0.14 | %(h)(i) | |||||||||
Waiver/Reimbursement | 0.21 | %(h) | 0.14 | % | 0.13 | %(h) | |||||||||
Net investment income | 0.01 | %(h) | 0.01 | %(i) | 0.01 | %(h)(i) | |||||||||
Net assets, end of period (000s) | $ | 7,982 | $ | 4,148 | $ | 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 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) Rounds to less than 0.01%.
(f) Not annualized.
(g) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
(h) Annualized.
(i) The benefits derived from expense reductions had an impact of 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Institutional Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.0019 | ||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | 0.0019 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0019 | ) | |||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | — | (d) | — | (d) | — | (e) | (0.0019 | ) | |||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.01 | % | 0.00 | %(j) | 0.00 | %(h) | 0.19 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(k) | 0.12 | %(l) | 0.11 | %(l) | 0.16 | %(l) | 0.17 | %(l) | 0.22 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.24 | %(k) | 0.18 | % | 0.19 | % | 0.14 | % | 0.13 | % | 0.07 | % | |||||||||||||||
Net investment income | 0.01 | %(k) | 0.01 | %(l) | — | %(h)(l) | — | %(h)(l) | — | %(h)(l) | 0.21 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 294,783 | $ | 341,060 | $ | 266,788 | $ | 333,703 | $ | 810,783 | $ | 1,829,959 |
(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 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) Rounds to less than 0.01%.
(i) Not annualized.
(j) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(k) Annualized.
(l) 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:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0010 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0010 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | — | (0.0010 | ) | |||||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | — | (d) | — | — | (0.0010 | ) | |||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g)(h) | 0.01 | % | 0.01 | % | 0.00 | %(i) | 0.00 | % | 0.10 | % | |||||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(j) | 0.12 | %(k) | 0.11 | %(k) | 0.17 | %(k) | 0.17 | %(k) | 0.32 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.55 | %(j) | 0.49 | % | 0.50 | % | 0.44 | % | 0.44 | % | 0.28 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(h)(k) | — | %(h)(k) | — | (k) | 0.11 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 5,557 | $ | 5,581 | $ | 5,580 | $ | 7,743 | $ | 18,884 | $ | 79,399 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(j) Annualized.
(k) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Investor II Class Shares | 2014 | 2013 | 2012 (a) | 2011 (b) | 2010 (c)(d) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (e) | — | (e) | — | (e) | — | (e) | — | 0.0009 | |||||||||||||||||
Net realized gain on investments | — | (e) | — | (e) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (e) | — | (e) | — | (e) | — | (e) | — | 0.0009 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (e) | — | (e) | — | (e) | — | — | (0.0009 | ) | |||||||||||||||||
From net realized gains | — | — | — | (e) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (e) | — | (e) | — | (e) | — | — | (0.0009 | ) | |||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (e) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (f)(g) | 0.00 | %(h)(i) | 0.01 | % | 0.01 | % | 0.00 | %(j) | 0.00 | % | 0.09 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(k) | 0.12 | %(l) | 0.11 | %(l) | 0.16 | %(l) | 0.17 | %(l) | 0.34 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.65 | %(k) | 0.59 | % | 0.60 | % | 0.55 | % | 0.54 | % | 0.36 | % | |||||||||||||||
Net investment income | 0.01 | %(k) | 0.01 | %(l) | — | %(h)(l) | — | %(h)(l) | — | (l) | 0.12 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 105,619 | $ | 97,233 | $ | 103,034 | $ | 107,653 | $ | 170,781 | $ | 200,805 |
(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 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) Rounds to less than 0.01%.
(i) Not annualized.
(j) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(k) Annualized.
(l) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Liquidity Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0012 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0012 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | — | (0.0012 | ) | |||||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | — | (d) | — | — | (0.0012 | ) | |||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g)(h) | 0.01 | % | 0.01 | % | 0.00 | %(i) | 0.00 | % | 0.12 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(j) | 0.13 | %(k)(l) | 0.11 | %(l) | 0.16 | %(l) | 0.17 | %(l) | 0.29 | %(l) | |||||||||||||||
Waiver/Reimbursement | 0.45 | %(j) | 0.39 | % | 0.41 | % | 0.35 | % | 0.34 | % | 0.21 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(l) | — | %(h)(l) | — | %(h)(l) | — | (l) | 0.17 | %(l) | |||||||||||||||
Net assets, end of period (000s) | $ | 59,506 | $ | 62,189 | $ | 71,919 | $ | 138,535 | $ | 176,051 | $ | 413,066 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(j) Annualized.
(k) The expense ratio shown does not correspond with the relative expense structure of the share class for the period due to the timing of subscriptions and redemptions of shares, fluctuating yields of the portfolio as well as yield floor expense reimbursements made to the share class.
(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 Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Ended February 28, | Year Ended August 31, | ||||||||||||||||||||||||||
Trust Class Shares | 2014 | 2013 | 2012 | 2011 (a) | 2010 (b)(c) | 2009 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0015 | |||||||||||||||||
Net realized gain on investments | — | (d) | — | (d) | — | — | — | — | |||||||||||||||||||
Total from Investment Operations | — | (d) | — | (d) | — | (d) | — | (d) | — | 0.0015 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||||||
From net investment income | — | (d) | — | (d) | — | (d) | — | — | (0.0015 | ) | |||||||||||||||||
From net realized gains | — | — | — | (d) | — | — | — | ||||||||||||||||||||
Total Distributions to Shareholders | — | (d) | — | (d) | — | (d) | — | — | (0.0015 | ) | |||||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | (d) | — | — | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total return (e)(f) | 0.00 | %(g)(h) | 0.01 | % | 0.01 | % | 0.00 | %(i) | 0.00 | % | 0.15 | % | |||||||||||||||
Ratios to Average Net Assets/ Supplemental Data: | |||||||||||||||||||||||||||
Net expenses | 0.06 | %(j) | 0.12 | %(k) | 0.11 | %(k) | 0.15 | %(k) | 0.17 | %(k) | 0.27 | %(k) | |||||||||||||||
Waiver/Reimbursement | 0.30 | %(j) | 0.24 | % | 0.25 | % | 0.21 | % | 0.19 | % | 0.08 | % | |||||||||||||||
Net investment income | 0.01 | %(j) | 0.01 | %(k) | — | %(h)(k) | — | %(h)(k) | — | (k) | 0.13 | %(k) | |||||||||||||||
Net assets, end of period (000s) | $ | 536,378 | $ | 462,604 | $ | 444,576 | �� | $ | 478,302 | $ | 469,327 | $ | 857,336 |
(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 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) Not annualized.
(h) Rounds to less than 0.01%.
(i) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(j) Annualized.
(k) 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 Treasury Reserves
February 28, 2014 (Unaudited)
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, 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 generally accepted accounting principles ("GAAP") in the United States of America 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 subject to the conditions in such rule being 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 upon the
19
BofA Treasury Reserves, February 28, 2014 (Unaudited)
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, the Fund's investment advisor (the "Advisor"), determines are creditworthy. Repurchase agreements are collateralized by the securities purchased by the Fund under the repurchase agreements, which may include securities that the Fund is not otherwise directly permitted to purchase, such as long-term government bonds. The Advisor is responsible for determining that such underlying securities are 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" ("RIC") 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 seeks to avoid federal excise tax. Therefore, no federal income tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared daily and paid monthly. The Fund generally intends to distribute any net realized capital gain (whether long-term or short-term gain) at least once a year. 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 may provide general indemnities. 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. The Fund's maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
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.
20
BofA Treasury Reserves, February 28, 2014 (Unaudited)
The tax character of distributions paid during the year ended August 31, 2013 was as follows:
Distributions paid from
Ordinary Income* | $ | 930,333 |
* For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions.
The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") requires that capital loss carry forwards generated in taxable years beginning after December 22, 2010, the effective date of the Act (the "Effective Date"), be fully used before capital loss carry forwards generated in taxable years prior to the Effective Date. 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 Effective Date.
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 50 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
The Advisor, an indirect, wholly owned subsidiary of Bank of America Corporation ("BAC"), provides investment advisory services to the Fund. The Advisor receives a monthly investment advisory fee, calculated based on the combined
average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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 | % |
The Advisor 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 daily net assets through December 31, 2014. There is no guarantee that this expense limitation will continue after such date.
For the six months ended February 28, 2014, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
Administration Fee
The Advisor provides administrative and other services to the Fund for a monthly administration fee, calculated based on the combined average daily net assets of the Fund and the other series of the Trust advised by the Advisor, 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, the Advisor has retained State Street Bank and Trust Company ("State Street") to provide certain administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the six months ended February 28, 2014, the Fund's effective administration fee rate, net of fee waivers but including payments made to State Street for pricing and bookkeeping fees, as outlined below, was 0.04% of the Fund's average daily net assets.
21
BofA Treasury Reserves, February 28, 2014 (Unaudited)
Pricing and Bookkeeping Fees
The Trust has entered into a Financial Reporting Services Agreement (the "Financial Reporting Services Agreement") with State Street and the Advisor 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 the Advisor 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 0.015% of average daily net assets of the Fund. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). In addition, the Fund also 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.
The Fund may automatically sell your shares if the value of your account (treating each account of a BofA Fund you own separately from any other account of another BofA Fund you may own) falls below $1,000. Please refer to the Prospectus for additional details.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor, is the principal underwriter of the Fund's shares.
The Trust has adopted a distribution plan ("Distribution Plan") for the Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act permits the Fund to compensate and/or reimburse the Distributor for distribution services provided by it and related expenses incurred, including payments by the Distributor to eligible
financial intermediaries for selling shares of the Funds and providing services to investors.
The Trust also has adopted a shareholder servicing plan ("Shareholder Servicing Plan") for the Adviser Class, Daily Class, Investor Class, Investor II Class and Liquidity Class shares of the Fund. The Shareholder Servicing Plan permits the Fund to compensate eligible financial intermediaries for providing shareholder services. A substantial portion of the expenses incurred pursuant to the Shareholder Servicing Plan is paid to affiliates of the Advisor and the Distributor.
The annual rates in effect and plan limits, each as a percentage of average daily net assets, follow:
Distribution Plan: | 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 | %** | |||||||
Shareholder Servicing Plan: | |||||||||||
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 Shareholder Servicing Plan fees through December 31, 2014 as a percentage of the Fund's Liquidity Class shares average daily net assets at an annual rate of 0.10%, so that combined Distribution Plan and Shareholder Servicing Plan fees will not exceed 0.15%. This fee and expense arrangement may only be modified or amended with the approval of all parties to such arrangement, including the Fund (acting through its Board) and the Distributor.
** To the extent that the Liquidity Class shares of the Fund make payments and/or reimbursements pursuant to the Distribution Plan and/or the Shareholder Servicing Plan, the combined total of such payments and/or reimbursements 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,
22
BofA Treasury Reserves, February 28, 2014 (Unaudited)
Investor II Class and Trust Class shares of the Fund. Under the Administration Plans, the Fund may pay eligible the Advisor, the Distributor and/or eligible financial intermediaries a fee for shareholder administration services that is in addition to the fees it pays to the Advisor for overseeing the administrative operations of such Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor 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
The Advisor 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, 2014, 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), 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 such date.
The Advisor and the Distributor are entitled to recover from the Fund certain fees waived and/or expenses reimbursed for a three-year period following the date of such waiver and/or reimbursement if such recovery does not cause the Fund's total operating expenses to exceed the expense commitment in effect at the time the expenses to be recovered were incurred.
At February 28, 2014, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the period | |||||||||||||||||
2016 | 2015 | 2014 | recovery | ended 02/28/2014 | |||||||||||||||
$ | 5,806,647 | $ | 5,240,089 | $ | 5,773,438 | $ | 16,820,174 | $ | — |
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 for all classes of the Fund. In addition, the Advisor 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 the Advisor at any time.
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 Trust are employees of the Advisor 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 Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of a portion 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. 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.
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BofA Treasury Reserves, February 28, 2014 (Unaudited)
Note 5. Line of Credit
The Fund and the other series of the Trust participate in a $750 million 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 $10,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds.
For the six months ended February 28, 2014, the Fund did not borrow under this arrangement.
Note 6. Capital Contribution
On November 29, 2010 an affiliate of the Advisor made a voluntary capital contribution to the Fund of $3,865,298.
Note 7. Shareholder Concentration
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
The Fund's risks include, but are not limited to the following:
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.
Redemption/Liquidity Risk
The Fund may be subject to redemption risk. The Fund may need to sell portfolio securities to meet shareholder redemption requests. In this scenario, the Fund may not be
able to sell portfolio securities because such securities may be deemed illiquid. In such events, the Fund could be forced to sell portfolio securities at unfavorable prices in an effort to generate cash to pay redeeming shareholders. The Fund reserves the right to pay redemption proceeds with securities (a "redemption in kind'). The Fund may, in certain circumstances, suspend redemptions or the payment of redemption proceeds when permitted by applicable rules and regulations.
Legal Proceedings
The Advisor and the Distributor (collectively, the "BofA Group") remain subject to a settlement agreement with the New York Attorney General ("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. The NYAG Settlement, among other things, requires the Advisor 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 its Board and certain special consulting and compliance measures. 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; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; and maintain certain compliance and ethics oversight structures.
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Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
Even though the following description of the Board's consideration of the investment advisory agreement covers multiple funds, for purposes of this shareholder report, the description is only relevant as to the Fund.
The Board of Trustees (the "Board") of BofA Funds Series Trust (the "Trust"), including a majority of the Trustees who have no direct or indirect interest in the Trust's investment advisory agreement and are not "interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), are required annually to review and re-approve the existing investment advisory agreement. Consistent with this requirement, the Board reviewed and re-approved, during the most recent six months covered by this report, the investment advisory agreement with BofA Advisors, LLC ("BoAA") and the Trust, on behalf of BofA California Tax-Exempt Reserves, BofA Cash Reserves, BofA Connecticut Municipal Reserves, BofA Government Plus Reserves, BofA Government Reserves, BofA Massachusetts Municipal Reserves, BofA Money Market Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, BofA Tax-Exempt Reserves and BofA Treasury Reserves. The Trust's investment advisory agreement with BoAA is referred to as the "Advisory Agreement." The funds identified above are each referred to individually as a "Fund" and collectively referred to as the "Funds."
More specifically, at a meeting held on December 8-10, 2013, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of BoAA and the re-approval of the Advisory Agreement. The Board also reviewed and considered a report prepared and provided by an independent fee consultant (the "Fee Consultant") appointed by the Independent Trustees. The Fee Consultant's role was to manage, and provide input regarding, the process by which the investment advisory fees payable by the Funds under the Advisory Agreement are negotiated. The Fee Consultant found that the Board had the relevant information necessary to evaluate the reasonableness of the proposed management fees for each Fund and that the fee negotiation process was, to the extent practicable, at arms' length and reasonable. A summary of the Fee Consultant's report is available at http://www.bofacapital.com.
In preparation for the December meeting, the Board met in October 2013 to review and discuss the materials described below. The Board also received performance and other reports at its quarterly meetings, and the Board's Contracts Review Committee met on multiple occasions prior to the October meeting to assist the Board in preparation for the Board's consideration of the re-approval of the Advisory Agreement. BoAA's responses to a detailed series of requests submitted by the Fee Consultant and the Independent Trustees' independent legal counsel on the Board's behalf also were presented to the Board. All of these submissions and reports were considered by the Board in the context of, among other things, the recent history of money market funds and the investments available to such funds, as well as possible changes in markets and the regulatory scheme in which such funds operate. The Board's review and conclusions are based on the comprehensive consideration of all information presented to it and are not the result of any single controlling factor. The Board evaluated all information available to it on a Fund-by-Fund basis, and its determinations were made separately in respect of each Fund. The Independent Trustees were assisted in their evaluation of the Advisory Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from BoAA.
Nature, Extent and Quality of Services. The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Funds by BoAA under the Advisory Agreement. BoAA's most recent form registering it as an investment advisor with the Securities and Exchange Commission was also made available to the Board. The Board reviewed and analyzed those materials, which included, among other things, information about the background and experience of senior management and investment personnel of BoAA.
In addition, the Board considered the investment and compliance programs of the Funds and BoAA, including reports of the Funds' Chief Compliance Officer as well as periodic reports from an Independent Compliance Consultant. In this connection, the Board considered information regarding BoAA's ongoing monitoring and risk management oversight activities, including BoAA's "stress testing" initiatives that were presented to the Board on a quarterly basis throughout the year.
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The Board evaluated the ability of BoAA and certain of its affiliates, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. In this regard, the Board considered information regarding the nature of BoAA's compensation structure applicable to portfolio managers and other key investment personnel. In addition, the Board took into account the administrative services provided to the Funds by BoAA, including BoAA's oversight of third party service providers.
Based on the above factors, together with those referenced below, the Board concluded that it was satisfied with the nature, extent and quality of the investment advisory services provided to each of the Funds by BoAA.
Investment Advisory Fee Rates and Other Expenses. The Board reviewed and considered the proposed contractual investment advisory fee rates both separately and together with the administration fee rates payable by the Funds (the "Contractual Management Fee Rates"). In addition, the Board reviewed the proposed fee waiver/cap arrangements applicable to the Contractual Management Fee Rates and considered the Contractual Management Fee Rates after taking the proposed waivers/caps into account (the "Actual Management Fee Rates"). The Board also noted that the Fund's distributor, BofA Distributors, Inc. (the "Distributor"), had voluntarily undertaken to reimburse certain class-specific Fund expenses (consisting of shareholder servicing, distribution and shareholder administration fees, as applicable) to the extent necessary to maintain a minimum annualized net yield of 0.01% for all classes of the Fund. In addition, the Board noted that BoAA had voluntarily undertaken to reimburse certain Fund expenses (consisting of advisory and administration fees) to the extent necessary to maintain such yields in the event the Distributor's reimbursement of class-specific Fund expenses is not sufficient to maintain the minimum annualized net yields described above. The Board noted that these undertakings, as well as other applicable voluntary waivers and expense caps for certain Funds, were voluntary and could be modified or discontinued by the Distributor and/or BoAA at any time.
The Board reviewed and considered statistical information regarding each Fund's total expense ratio and its various components, including contractual advisory fees, actual
advisory fees, administration fees, actual non-management fees, Rule 12b-1 and non-Rule 12b-1 shareholder servicing and administration fees, fee waivers/caps and/or expense reimbursements. The Board also reviewed comparisons of these fees to the expense information for the group of funds determined to be most similar to a given Fund (the "Peer Group") and to a broader universe of relevant funds (the "Universe"). Lipper Inc., an independent provider of investment company data, selected the funds in each Fund's Universe based on the subsets of the iMoneyNet category peers, which include mutual funds that are viewed by BoAA as direct competitor peers to the Funds in the institutional market and share similar distribution platforms, expense structures and investment objectives. The Board was provided with a description of the methodology used to select the mutual funds in each Fund's Peer Group(s) and Universe. Additional comparisons and other data also were prepared by, or at the direction of, the Fee Consultant, which the Board considered during its deliberations.
The Board considered the Contractual and Actual Management Fee Rates and total expense ratio of each Fund on a Fund-by-Fund basis. In this regard, the Board received information comparing each Fund's total expense ratio, Contractual Management Fee Rate and Actual Management Fee Rate to its Peer Group and assigning a quintile ranking for each such category. For example, a Fund that ranked in the first quintile for total expense ratio had a lower expense ratio than at least 80% of the funds in its Peer Group. Where a Fund's total expense ratio, Contractual Management Fee Rate and/or Actual Management Fee Rate was above the median range of its Peer Group (meaning that it ranked in the fourth or fifth quintile), the Board noted other applicable factors described below. In this connection, with respect to BofA Treasury Reserves, the Board noted that the Fund's Contractual Management Fee Rate was above the median range of its Peer Group.
The Board generally noted other applicable factors, including, among others, competitive investment performance, the quality of administrative and/or shareholder services, the Fund's total expense ratios for other classes, the Fund's expense cap and waiver arrangements and/or comparisons to subsets of funds and institutional account fees in considering the re-approval of the Advisory Agreement.
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Fund Performance. The Board considered the investment performance results for each of the Funds over multiple measurement periods. It also considered these results in comparison to the performance results of each Fund's Universe. In addition, the Board considered information regarding how BoAA and its affiliates analyze and manage potential risks to the Funds, including BoAA's credit review process and the nature of the Funds' investments.
In considering the investment performance of each Fund, the Board compared the net return investment performance of representative classes of each Fund to its Universe, which included funds with similar pricing structures and Rule 12b-1 fees. The Board received information showing that specific classes of certain Funds generally outperformed their peers in the more recent periods, while certain other classes underperformed their peers in the more recent periods. In particular, the Board noted that the net return investment performance of certain classes of BofA Treasury Reserves was below the median range of such Fund's Universe (meaning that the Fund's performance ranked in the fourth or fifth quintile relative to its Universe) over certain recent periods.
Where net return investment performance of a class of a particular Fund was below the median range of the Fund's Universe, the Board, in considering the re-approval of the Advisory Agreement for such Fund, generally noted other applicable factors, including, among others, stronger relative net return performance of other classes or over other periods, the relatively tight dispersion of performance data within a particular Universe, the Fund's Actual Management Fee Rate, Contractual Management Fee Rate and/or total expense ratio, the Fund's expense cap and waiver arrangements, the composition and share classes used in the comparisons and BoAA's emphasis on liquidity and capital preservation, as well as its organizational strength and capacity and its history with the Funds.
Profitability. The Board received and considered a detailed profitability analysis of BoAA based on the Contractual Management Fee Rates and the Actual Management Fee Rates, as well as on other relationships between the Funds and BoAA affiliates. The analysis included complex-wide and per-Fund information and was derived from allocation methodologies estimating certain expenses of the Funds. The
Board also reviewed information compiled by Lipper comparing profitability information for BoAA to other management companies for which information was publicly available. After reviewing such materials in detail, the Board did not deem the profits and other ancillary benefits that BoAA and its affiliates received from providing these services to be unreasonable.
Economies of Scale. The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Funds, whether the Funds have appropriately benefited from any economies of scale and whether there is potential for realization of further economies of scale. The Board also considered information from management regarding potential sources of economies of scale and the impact of decreases in overall Fund assets and the current yield environment on BoAA's ability to realize and share economies of scale. The Board concluded that any potential economies of scale are shared fairly with Fund shareholders, most particularly through breakpoints, fee waiver arrangements and further investments by BoAA relating to services provided to the Funds.
Information About Services to Other BoAA Clients. The Board also received and considered information about the nature and extent of services and fee rates offered by BoAA to its other clients, including institutional investors, unregistered and offshore funds and clients for which BoAA serves as a sub-advisor. In this regard, the Board concluded that, where the Contractual Management Fee Rates and Actual Management Fee Rates were appreciably above the range of the fee rates charged to other BoAA clients, based on information provided by BoAA, the additional services provided, costs and risks associated with sponsoring, managing and operating the Funds provided a justification for the higher fee rates charged to the Funds.
Other Benefits to BoAA. The Board received and considered information regarding potential "fall-out" or ancillary benefits that could be received by BoAA and its affiliates as a result of their relationship with the Funds. Such benefits include, among others, benefits attributable to BoAA's relationship with the Funds (such as benefits realized by an affiliated broker) and benefits potentially derived from an increase in BoAA's business as a result of its relationship
27
with the Funds (such as the ability to market to shareholders other financial products offered by BoAA and its affiliates).
The Board did not deem such benefits to be unreasonable.
Other Factors and Broader Review. As discussed above, the Board reviewed materials received from BoAA during the re-approval process under Section 15(c) of the 1940 Act. The Board also reviewed and assessed the quality of the services the Funds received from BoAA and its affiliates throughout the year, including in light of regulatory and market developments impacting money market funds. In this regard, the Board reviewed reports of BoAA at each of the quarterly meetings and, as necessary, more frequently, which included, among other things, investment performance reports and reports comparing the Funds to certain competitors. In addition, the Board conferred with the Funds' investment personnel at various times throughout the year.
Conclusion. After an evaluation of the above-described factors, and based on its deliberations and analysis of the information provided and alternatives considered, the Board, including all of the Independent Trustees, concluded that the compensation payable to BoAA under the Advisory Agreement is fair and equitable. Accordingly, the Board, including all of the Independent Trustees, unanimously re-approved the Advisory Agreement.
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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 1-888-331-0904 Institutional Investors: 800-353-0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 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.
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.
BofATM Global Capital Management is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors. BofA Funds are distributed by BofA Distributors, Inc., member FINRA and SIPC. BofA Distributors, Inc. is part of BofA Global Capital Management and an affiliate of Bank of America Corporation.
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.
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 Treasury Reserves
Semiannual Report, February 28, 2014
© 2014 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
SAR-TSYR-44/265606/0414
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
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 have not been any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, since those procedures were last disclosed in response to requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item 22(b)(15) of Schedule 14A) or this Item.
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 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: Not applicable at this time.
(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.
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(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 |
| April 22, 2014 |
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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 |
| April 22, 2014 |
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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 |
| April 22, 2014 |
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